Pershing Gold Announces 2015 Drilling Program and Update on Relief Canyon
LAKEWOOD, Colo., April 27, 2015 /PRNewswire/ -- Pershing Gold Corporation (OTCQB: PGLC) ("Pershing Gold" or the "Company"), an emerging Nevada gold producer on a fast-track to reopen the Relief Canyon Mine, today announced its plans for the Company's 2015 drilling program as well as an update on activities at Relief Canyon including a NI 43-101 compliant resource estimate update, an economic study, a permitting update, and ongoing metallurgical modeling and test work.
2015 Drilling Program
Pershing Gold has initiated road building and site preparation for phase 1 of its 2015 Relief Canyon drilling program. Pershing Gold plans to complete approximately 100 additional core holes at Relief Canyon in 2015. The drilling is planned to include approximately 75,000 feet (nearly 23,000 meters) and will begin in the second quarter of 2015. The current cost estimate for this phase 1 drilling is approximately $3.5 million. This program will focus on expanding the high-grade zones in the North Target Area where high-grade gold intercepts of 76.8 grams per tonne ("gpt"), 87.9 gpt, and 123.9 gpt gold ("Au") or 2.24 ounces per ton ("opt"), 2.57 opt and 3.62 opt Au were recently encountered. In addition, this program will focus on expanding the resource to the southwest, northeast, and to the west with step-out drilling from known zones of gold mineralization. This step-out drilling will be conducted with the goal of increasing the aerial extent of the resource, thereby increasing the total geologic limit of the gold mineralization for future resource estimates. Figure 1 highlights the areas planned for drilling in 2015.
"Recent drilling at Relief Canyon confirms that the deposit has many Carlin style characteristics, including multiple stacked zones of sediment hosted mineralization with a high-grade core. Our planned 2015 drilling program is designed to build on this success and continue to develop additional ounces and higher grades at Relief Canyon," said Stephen D. Alfers, Pershing Gold's Chairman and CEO. "Over the past few years our exploration team has had extraordinary success expanding the resource at Relief Canyon, from a measured and indicated ("M&I") resource of 113,000 ounces with 42,000 inferred ounces in August of 2011 when the Company acquired Relief Canyon, to our 2014 M&I resource estimate of 552,000 ounces with 165,000 inferred ounces. This represents a more than 450% increase in the resource in a few short years. With recent drilling showing consistently higher grades than have been historically encountered, we anticipate increased ounces and higher grade in the updated resource estimate expected later this quarter."
In addition to the exploration adjacent to the currently defined deposit, the Company plans to test early exploration targets currently being identified to the north, west and south of the Relief Canyon Mine. High-quality target selection is based on a thorough review of a large database of geophysical data as well as geologic mapping and geochemical results. The Company has defined several high quality targets and will prioritize and evaluate them during the 2015 program. Pershing Gold plans to initiate its 2015 drilling program in May of this year.
Updated NI 43-101 Resource Estimate
Pershing Gold recently completed a 134 hole core-drilling program totaling more than 74,000 feet (about 22,500 meters) at Relief Canyon. Up to three core-drill rigs were on-site from May 2014 to January 2015. Among the results of this drilling are multiple core-holes with high-grade intercepts including RC15-264, RC15-265A and RC15-279, that include gold intercepts of 76.8 grams per tonne ("gpt"), 87.9 gpt, and 123.9 gpt gold ("Au") or 2.24 ounces per ton ("opt"), 2.57 opt and 3.62 opt Au, respectively. These, and many other intercepts encountered in the recent drilling program, include grades that are significantly higher than the historic average grade at Relief Canyon of approximately 1 gpt Au (0.0292 opt Au).
Pershing Gold is currently in the process of incorporating the results of this drilling program into an updated NI 43-101 resource estimate. The Company expects the drilling results will improve and increase the gold resource at Relief Canyon. All assay, logging, survey and geotechnical data have been entered into the Company's databases. Geologic modeling and analyses are in progress and the Company expects to complete an updated NI 43-101 compliant resource estimate in the second quarter of 2015.
Economic Study and Start-Up Decision
Upon completion of the updated NI 43-101 compliant resource estimate expected in the second quarter of this year, the Company plans to conduct a thorough economic study on Relief Canyon. This study will provide estimates of production rates, cash costs, all-in-sustaining-costs, life-of-mine, net asset value estimates, and other key metrics. Pershing Gold plans to consider a plan to start-up the mine at Relief Canyon based on this economic study.
Permitting Update
Permitting for the Relief Canyon Mine is proceeding as planned and is on schedule. The Company already has all of the state and federal permits it needs to start mining in the existing open-pit mine, and in a small area adjacent to the northern rim of the North Pit. These permits also authorize operating the heap leach processing facilities.
In late March 2015, Pershing Gold submitted a Plan of Operations Modification to the US Bureau of Land Management and the Nevada Division of Environmental Protection covering expansion of the pit in all directions around the current pit boundary as shown in Figure 2. The proposed expansion would involve three years of mining and five years of heap leaching. This first phase expansion would produce a pit bottom elevation that would remain above the water table. No new leach pad space or changes to the processing plant are needed to accommodate the mineralized material that would be mined from the expanded pit. Additional permitting will be required in the future for the next phase of mining, which would deepen the pit below the water table and require additional leach pad capacity.
The agencies are currently conducting a completeness review to verify that the Plan of Operations Modification contains all of the necessary information about the project so they can begin their environmental review process. The agencies typically take about one month to review an application for completeness.
Prior to submitting the Plan of Operations Modification, the Company retained experts to perform extensive environmental baseline studies of the Relief Canyon project area including hydrogeologic investigations, plant and wildlife surveys, cultural resources surveys, pit slope stability studies, and geochemical tests to characterize the rocks to be mined. These studies demonstrate that there are no sensitive environmental issues associated with the proposed pit expansion. Consequently, the Company anticipates permitting for the Plan of Operations Modification will be a straightforward and timely process that will take about a year to complete.
Metallurgical Modeling and Test Work
Since acquiring the property in 2011, Pershing Gold has completed several metallurgical studies of the gold bearing rock at Relief Canyon. The summary of current metallurgical studies is presented in Section 13 of the November 2014 Technical Report on the Relief Canyon Mine, Pershing County, Nevada, which is available on the Company's website at www.pershinggold.com.
In addition to these studies, the Company has completed systematic testing of gold recovery of all drill samples from as early as 2012 with total gold assays greater than 0.2 gpt Au (0.006 opt Au) using a warm cyanide bearing solution for extraction. This testing process typically shakes or agitates the solution and pulp for approximately one hour before the gold analysis is completed. The result is referred to as the cyanide gold value ("CGV"). The amount of gold extracted, when compared to the total gold assay, provides valuable data for predicting recovery. Since 2012, more than 3,000 CGV analyses have been completed and are an important part of the geologic model.
Table 1 below shows the results of merging CGV results with the degree of oxidation logged. Mineral Zone 1 includes complete oxidation, is relatively shallow, and is controlled by fractures or fault zones. Average CGV recovery for this zone is 85%. Mineral Zone 2, or the mixed zone, includes oxide and sulfides and is by far the largest zone. Average gold recovery in this zone is 77%. Zone 3, the sulfide zone, comprises a relatively small part of the drilling, about 13%. Gold recoveries for zone 3 average approximately 36%.
In 2014, Mine Development Associates reported a small sulfide portion, about 3.2%, of the 2014 resource estimate. The cutoff grade for sulfide material is higher, reflecting higher processing costs. Most of the deposit as currently defined has excellent recovery and is amenable to recovering gold using heap leach processing techniques. The Company does not expect a significant increase in the amount of sulfide mineralization within the NI 43-101 resource estimate anticipated in the second quarter of this year.
| Table 1 Gold Recovery in Warm CGV Shake Tests by Mineral Zone |
|||
| Mineral |
Number of |
Percent of |
Average |
| Oxide (1) |
544 |
19% |
85% |
| Mixed (2) |
1970 |
68% |
77% |
| Sulfide (3) |
400 |
13% |
36% |
Recently, McClelland Labs, Inc. of Sparks, Nevada has commenced work on two metallurgical tests; the first is designed to evaluate gold recoveries from the Lower and Jasperoid zones and the second study should define the optimal crush sizing.
Material for the Lower and Jasperoid zones was obtained from three large diameter core holes (PQ) completed in January 2015. The large diameter core has generated more than 1,000 kilograms of material for use in column and bottle roll tests. Final results of these tests are expected late in the second quarter of 2015. Results of the warm CGV shake tests show average recoveries greater than 75%.
The second metallurgical study will be completed using a twelve-ton bulk ore sample that was collected from the existing open pits. The goal of the tests in this study is to evaluate gold leaching at crush sizes coarser than those previously considered. For the largest of these tests, a seven-ton split of the bulk sample was crushed to 100% passing 6". This material was then loaded into a 3' diameter by 18' tall column, and is currently under leach. Additional column leach tests are being conducted on samples of the same material that have been crushed to 100% passing 3", 1.5", and 1". These tests are being conducted to determine if high gold recoveries can be maintained when crushing costs are reduced by using a coarser crush size. The results from this test are expected in the third quarter of 2015.
About Pershing Gold Corporation
Pershing Gold is an emerging Nevada gold producer on a fast-track to re-open the Relief Canyon Mine, which includes three open-pit mines and a state-of-the-art, fully permitted and constructed heap-leach processing facility. Pershing Gold is currently permitted to resume mining at Relief Canyon under the existing Plan of Operations.
Pershing Gold's landholdings cover approximately 25,000 acres that include the Relief Canyon Mine asset and lands surrounding the mine in all directions. This land package provides Pershing Gold with the opportunity to expand the Relief Canyon Mine deposit and to explore and make new discoveries on nearby lands. The Company is currently listed on the OTCQB and has submitted an application to up-list to the NASDAQ stock exchange.
Scientific and Technical Data
All scientific and technical information related to drill and surface samples for the Relief Canyon project has been reviewed and approved by Larry L. Hillesland, Certified Professional Geologist #11720, who is a Qualified Person under the definitions established by Canadian National Instrument 43-101. Drill core at Relief Canyon is boxed and sealed at the drill rig and moved to the Relief Canyon logging and sample preparation facilities by trained personnel. The core is logged and split down the center using a typical table-fed circular rock saw. One half of the core is sent for assay to Skyline Assayers & Laboratories of Sparks, Nevada, while the other half is returned to the core box and stored at Relief Canyon in a secure, fenced-off, area. Pershing Gold Corporation quality assurance/quality control (QA/QC) procedures include the regular use of blanks, standards, and duplicate samples.
Legal Notice and Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company set forth herein including expectations regarding an updated resource report, the timing thereof and the resulting expected increase in the gold resource; anticipated expansion and upgrade of the Relief Canyon deposit as a result of drilling; planned drilling program for 2015, the anticipate cost of the program and its focus on expanding the Relief Canyon resource and high-grade zones in the North Target Area and on testing early exploration targets north, west and south of the Relief Canyon mine; results of metallurgical modeling and test work and additional metallurgical tests including additional column leach tests, and the expected timing of results; anticipation regarding timing and success of completing the Plan of Operations Modification to expand the Relief Canyon pit above the water table and lack of sensitive environmental issues associated with the expansion; planned economic study regarding the restart of production at the Relief Canyon mine and processing facilities and the timing thereof and resulting potential decision regarding whether to restart mining and processing at Relief Canyon.; and interpretations of exploration results and other geologic information at Relief Canyon, and those preceded by or that include the words "believes," "expects," "given," "targets," "intends," "anticipates," "plans," "projects," "forecasts" or similar expressions, are "forward-looking statements." Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. Potential risks and uncertainties include, among others, inability to obtain external financing to fund the development of plans for and the reopening and commencement of production at the Relief Canyon Mine, planned exploration, or to maintain property rights; unanticipated delays or results in the updated 43-101 resource report and economic study planned for 2015; interpretations or reinterpretations of geologic and metallurgical information or unfavorable exploration results that could negatively affect estimates of resources; delays in or unfavorable results of metallurgical and other studies and analyses that could negatively affect the results of the economic study and a potential decision regarding restarting mining at Relief Canyon; delay or inability to obtain permits required for planned modifications to the Plan of Operations and pit expansions including permits to expand the mine above the water table, for exploration and other activities; general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; decreases in gold and other mineral and commodity prices; risks of junior exploration and pre-production activities; and maintenance of important business relationships. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in the Company's filings with the SEC including the Annual Report on Form 10-K for the year ended December 31, 2014. The Company assumes no obligation to update any of the information contained or referenced in this press release.
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SOURCE Pershing Gold Corporation
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