Pershing Gold and its wholly owned subsidiary, Gold Acquisition Corporation, owner and operator of the Relief Canyon mine in Pershing County, are working toward re-opening the mine and expanding known resources at the site just outside of Lovelock.
Pershing plans to resume mining operations in early 2015 — though that’s a moving target. The company has been in discussion with the Bureau of Land Management about resuming operations earlier within the existing permitted facilities. Pershing Gold, headquartered at Lakewood, Colo., benefits from three key aspects at the Relief Canyon site, says President and Chief Executive Officer Steve Alfers.
First, the site is fully permitted under its former operator, First Gold Corp., which went bankrupt in 2010. Second, The Relief Canyon mine has a brand-new, $16 million fully permitted heap leach and gold processing facility on site that’s currently in care and maintenance mode.
The plant lies just a mile away from the open pits and can treat up to 8 million tons of ore annually. Pershing keeps the plant in working order by maintaining it on a 24/7 basis.
“This is a state-of-the-art facility that has been well cared for. We don’t think there’s too much work to do to turn on the lights and start producing gold,” Alfers says.
Lastly, that area of the Humboldt Range is so dry and desolate that there are no significant environmental issues the company has to work around.
Pershing Gold is an emerging producer with the Relief Canyon mine as its primary asset. The company acquired the mine site and processing facility in 2011. Mining and gold production at the site started in the mid 1980s and shut down in 1993 due to low gold prices.
Pershing Gold has spent the past few years building the size of the gold deposit at Relief Canyon. An extensive drilling campaign in 2012 grew the resource estimate to 463,000 measured and indicated ounces and 101,000 inferred ounces — and Pershing expects the results of its 2013 drilling program to significantly add to those numbers. The company also is completing a months-long metallurgical testing program.
“The work we are doing will improve our mine plan and provide valuable information about the best way to mine, stack and treat this material to optimize the recoveries of gold,” Alfers says.
The growth of the resource, mostly to the north of the existing pits, doesn’t impact the first phase of the mine plan as Pershing expects to begin mining operations in the three fully permitted open pits. Eventually, though, the footprint of those pits would expand in all directions and require amended permitting, says Debbie Struhsacker, corporate vice president.
In the future, Pershing also would expand the size of existing heap leach pads to accommodate a larger mining operation. First Gold Corp. began heap leach expansion before it folded.
Pershing is working to complete its mine plan and expects to make key operating decisions on how to best tackle mining operations in the third quarter, Alfers says. Pershing may operate its own equipment on site, but it can be a faster process in the short term to work with a contract mining outfit, he adds. Pershing won’t look at toll milling at the site to generate revenue as it has enough material on hand to run the plant at capacity, Alfers says.
Though raising capital has gotten much tougher for exploration and junior miners in the past few years, Pershing Gold has never been turned down when seeking capital, Alfers says.
“As you get close to production, the market sees you as less risky,” he says. “We are different from our peers because we have been moving very quickly to get to where we need to be, and we don’t have to raise much capital or take the time to build a plant.”