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Pacific Gold Corp. (OTCPK:PCFG)

The Wall Street Analyst Forum

August 14, 2007 1:20 pm ET

Executives

Mitchell Geisler - COO

Gerry Scott - President, Wall Street Analyst Forum

Presentation

Gerry Scott

Alright. Well I'm – it’s really as much for the benefit of the webcast attendees, if anything, I would like to introduce the next company in this afternoon's Precious Metals and Mining program.

Pacific Gold Corp.'s mission is to acquire existing national resources, deposits located in North America, collectively containing a minimum of $2 billion of gross market value, and to develop the acquired deposits into producing mines as soon as possible following acquisition. The company is currently focused on gold and base metal operations in Western North America.

Pacific Gold Corp. has five operating subsidiaries, Nevada Rae Gold, otherwise known as Nevada Rae. Owns and operates the Black Rock Canyon Gold Mine, Pilot Mountain Resources or Pilot Mountain, owns Project W, a tungsten based deposit in Nevada. Fernley Gold has the Lower Olinghouse Placers in Northwestern Nevada. Oregon Gold, owns the Bear Bench claims in the Southwestern Oregon. And Pacific Metals Corp., owns claims in San Juan and Delores Counties, Colorado, encompassing the historic Graysill Uranium Mine.

So, without any further introduction, I'd like to introduce Mitchell Geisler, the Chief Operating Officer of the company. We just ask Mitchell during the Q&A session to repeat the question for the benefit of the webcast attendees. Thank you.

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Mitchell Geisler

Hi. Thanks for your time today. As Gerry said, I'm Mitch Geisler, I'm the Chief Operating Officer of Pacific Gold Corp., and we trade on the OTC Bulletin Board under the symbol PCFG; our stock currently trades around $0.20. And, I am here today to tell you a little bit about our company, where we came from, what we currently have going on, and where we would like to go.

And to make the folks at the SEC happy, I'll just leave this up here for a few seconds. I know we've all seen it but, we have to do our due.

We'll talk a little bit today about our mission statement, our strategy as an organization, our various properties, where we stand with all of them gold, copper, zinc, tungsten and uranium, and where we'd like to go over the next couple of years.

Pacific Gold's mission; well, our mission is to acquire existing natural resource deposits located throughout North America either by lease or purchase collectively containing a minimum of $2 billion of gross in situ market value, and to develop the acquired deposits into producing mines as soon as possible following the acquisitions.

And what does all that mean? Well, we set up our company originally as a placer of alluvial gold operations. And, what we looked at is that its not realistic overnight to say we are going to be come Newmont or Barrick. You have junior companies that raise $50 million, $60 million, $80 million looking for gold and they may or may not find it, and it takes many, many years [in] [and] additional raises to get anywhere near anything for production.

And we looked at what we thought was a niche in the market, and there is many placer operations that are on a smaller scale that can still be very profitable if they are done in the right way with the right volume being processed of material. And we say we can acquire these properties, and we can put them into production, and we can do this within about 24 to 36 months when we acquire a property, because the permitting process is a lot faster. In our placer operation we don’t use any chemicals, we have some environmental benefits to that, it’s mostly a water and gravity feed system using centrifugal bowls, and it allows us again to go through the permitting stage a little bit faster than other companies, and allows us to put our mine into production cost wise a lot less than it would take some hard rock operations.

Our corporate organization; Pacific Gold Corp. is the parent company and the public company. Our head office is in Toronto, but we are a U.S. Company, and we also have -- where our mine produces in Crescent Valley, office in Elko, Nevada. And then we have each subsidiary -- each property is put into its own subsidiary, which at the current time is all 100% wholly owned by Pacific Gold. We don’t have any partners in any of these properties. Some of those properties are by way of lease but we own all of the leases.

Those companies are Nevada Rae Gold, which runs the Black Rock Canyon Mine, which currently just began production this quarter. Then we have Fernley Gold. This is also located in Nevada, just inside of the Reno area. We have Oregon Gold, located in Cave Junction, where we have a couple of things -- claims that are permitted and we have done some testing and production about three years ago in 2004, and that we've since increased our resources in that area.

And then, as a company as we were acquiring these placer operations, we were able to find other properties of interest to us, and we've said there is nothing holding us back, and certainly if you find something that has a lot of wealth that could potentially down the road add to the shareholder value and what the company's worth, then obviously we want to do that. And through that philosophy we were able to acquire the Pilot Mountain Resources, which is a tungsten property, and that’s located in Mina, Nevada. And then further to that we have a uranium property that we are still doing preliminary exploration but we were able to acquire this property over the past producing mine located in Durango, Colorado.

With our current project status, well, Pacific Gold estimates our proven, probable and possible resources of our existing Nevada, Colorado and Oregon projects at a gross ground value of up to $1.6 billion. We have six different projects, three of them are alluvial based, and these projects collectively contain around a million ounces of gold, and those are about the three I mentioned, the Fernley, Oregon and Nevada Rae Gold. Then we have our Project W, which is our tungsten property. It also has some copper, zinc and silver and we have projected over ten million tons grading, and approximately 0.4 tungsten trioxide.

And furthermore we have our Graysill mine which is our vanadium and uranium. Public reports indicate up to 400 tons grading 2.5% vanadium and 0.08 uranium oxide. The Graysill mine is the property that we've picked up in the last year that we are actually still doing all the historical research on it. So, we are hoping we will able to share more information with our shareholders in the public soon on that.

And then we have another potential zinc and copper deposit, that’s near Ely, that’s also -- that one is a little preliminary. So, we make mention that we have it, but we are still doing a lot of work on it before we can offer any information on it.

Where are we? Well, our biggest thing right now is our production. We started in about 2004 permitting the Black Rock Canyon Mine out in Crescent Valley, which is part of the Cortez Trend. Those of you who know where Cortez is, you can't get to Cortez unless you pass us or three miles down the road from them. Our mill is located on the side of the road, just off the road, that’s where our water rights are and our mill is, and about four miles to the west of that is where our material is and we haul our material down to our mill.

So, we started putting that into -- permitting in 2004, we got those permits, and then we were building our mill and stuff over 2005. Early 2006, we started to do some production and we had discovered some areas of concern that we wanted to upgrade within our plant and our hauling trucks, and we spent the winter and spring months doing that. Everything went well, and we started producing this past quarter, sorry this quarter.

We have also started the permitting process for our Butcher Boy property or Lower Olinghouse Placers which is near Fernley, and this property contains about 450,000 ounces between proven probable and inferred resources, and we did some testing on that last summer. And it was a mine that was in production in the early 90s, but when gold fell to $250 and $240, it didn’t make it very economical, unfortunately. So, that company disbanded and we were able to pick up the property by way of lease.

And, in addition to that, we’ve selected an engineering firm, we are using Watts, Griffith, and McQuat to start updating our feasibility study, that’s on our Project W, and that’s our tungsten property and it has a poor feasibility study. It was a property that was owned and researched by Union Carbide and Duval Corporation in the late 70s and early 80s. And there is a feasibility study that’s on that property, but right now we are at the point where it needs to be brought up to today’s terms post or show everything else we need to redrill some areas and certainly the economics have changed, our recovery methods have changed. So we need to update our feasibility study before we can take a turn at our level.

Our gold projects or the Black Rock Canyon Mine, Butcher Boy and the Bear Bench in Oregon. This is our -- when we first put up our signs, so if our proud picture, it may not be the best but, certainly when you get that first mine, that you are ready to put up to it, and you kind of lay your stake more than just a claim that you filed is kind of a big occasion for us. And, as I said, our mill is right off the road which makes it good for deliveries of fuel and for people to get to us for labor and everything like that as we are right off of the highway.

Here is the picture of our plant that we spent the year 2005 building and part of 2006, the gravel processing plant at the Black Rock Canyon mine. As I said, if you look just to the, right over here, that’s the highway that comes along and our water rights are just right to the -- kind of left of the picture, and the big building there is our plant. Some of the equipments are outside, some is inside. Basically, the operation is done with screens and Trommels and centrifugal bowls, that is a [watering] gravity solution, that takes place there.

Just some pictures of the inside; our interior view, the picture at the top, you can see the green machine in the back there, it’s kind of circular. That's our 48 inch centrifugal bowl. We've since added a second centrifugal bowl, that's on the outside of the plant, and a big kind of white machine behind the yellow pumps, there is our JCI triple deck screen. One of the additions and upgrades that we made over the 2006 winter, going into 2007 was our trucks. We decided, because we have such a far haul, we're really using some D400's and we had to upgrade those. So, right now we are using the Komatsu 785, and we had purchased five of them last summer and those were about 105 tons or 70 yards.

And the next picture is a view of our main pit. As we said, it's about a 3.5- to 4-mile haul from where the material comes from to the Black Rock Canyon Mine. And, this is a picture of our excavator.

It's our cross section map of the gravel drainage at the Black Rock Canyon. And it shows what we do is the first about a ten-feet or so, is what we call overburden and that's just cast aside and there's no use of that material, but then under below that is our gravel materials, all our pay gravels. And then we get into some of what we call the rework mudflows, and then below that is an additional mudflow and actually we have about 0.5 million ounces of proven probable inferred resources on the Black Rock Canyon alone. And it doesn't include the mudflow and we have been doing ongoing testing, 5% part of June just doing that testing and we were deciding the economics of it and how we want to proceed as we go forward. So, there is additional pay gravels potentially in that area.

Then, another picture of it, that's one of our geologists on it; you can see the colors if you looked at overburden, you can see those gravels in there that we call the pay gravels and the mudflow, houses gravels in there and there is gold again, it’s just a question about sorting out the economic levels. Certainly at today's gold prices that makes a lot more grades economical.

Our next project is our Butcher Boy Project at Fernley Gold. And as I commented before we have about 450,000 ounces there proven, probably and inferred. We had done some testing last summer to look at the reports that we had on it and to make sure our results had matched up. So, we had just a small permit where we did that testing over the summer months and everything looked good. And it's taken us to where we are beginning to put it into start the [pre-drilling] phase which should take probably about 16 months or say 12 to 18 months. 12 would be a little ambitious.

The one thing as a company that Pacific Gold has going forward is now that we have been able to get the mine operating in Crescent Valley, which is only a few hours drive from Fernley. We know the governing agencies, we know the NDEP and the EPA and DOM very well and because we don't use chemicals in this mine won't call for any as well. It does make it a little easier for us when they come to us, both in Nevada and particularly in Oregon where we have some forest service industries. They have looked to, probably such as ours to kind of be a role model as to show people who are anti-mining sector. This way that could be done, of course if you are at Hard Rock, you have to use -- you need your lease patterns, and so it's not really an option. But to show that mining can be good and it does not always have to be a negative thing and because there is a lot of positive, a lot of jobs that can created from it.

These are pictures of our Bear Bench. The Oregon Project as I said, we did some test mining there on two claims that are fully permitted in 2004 and then we acquired some additional material ground in that area. We have estimated about 215,000 ounces of proven, probable and inferred. We are doing some work on it however. Labor is tough right now, and that includes getting additional engineers and geologists.

So, right now, we're focusing all of our attention obviously on making sure we're successfully getting up to full levels of production at Nevada Rae and looking at Fernley and other projects. So it's part of our inventory as we go forward.

The picture of John Rae, he is our exploration manager and currently is helping run the Black Rock Canyon Mine. And in Nevada where our Black Rock Canyon property is as we get a lot of coarse and very fine gold, whereas in Oregon we get coarse and you obviously get some fines, but we also had nuggets there, that was the biggest nugget that we pulled up that summer. So a little bit different and obviously you have to look at how your plant recovers these things because some of the pieces change.

It's just a picture map of the Bear Bench and additional claim areas that we've been able to obtain and a picture of our gravel deposits on the Bear Bench.

That's for our gold now looking at our Project W, our Pilot which is the chemical symbol for tungsten. Pilot Mountain Resources, this is a view beginning of the main pit of our Project W. As I said, Union Carbide commissioned that feasibility study in 1981 that was prepared by Kaiser Engineering and we're working on updating that right now. We did do some small testing on the site last summer.

And I said, we have been working with Watts Griffith to come to terms on moving forward in the different stages needed to get the feasibility up to today's terms. A couple of pictures of the middle of nowhere.

The Graysill mine, which is Pacific Metals, is the past producer of vanadium and uranium, resources of up to 400,000 tons of 2.5% of vanadium pentoxide and 0.08% uranium oxide. And as I mentioned before, the BLM actually has a wealth of knowledge on this and we put in a Freedom of Information Act request, and there's going to be so much information it's taking them a little bit of time to get everything to us. So, we have information, and we have some engineers that were in talks with that actually know the property quite well and we're still kind of gathering all our information on this.

Our cash flows as we move forward, we're looking to do at The Black Rock Canyon Mine 10,000 ounces in a full year of production, once we get up to that. We are looking at our plans to design to do about 2,000 yards per day in places of operations where we deal in volume as opposed to the weight. So, we talk a lot of in yards per grams, opposed to just tons. And so, it's 10,000 ounces and then in 2009, we're looking to do 15,000 ounces on there and then increase to 20,000 ounces.

The difference between a full production in 2008 and 2009 is in regards to permitting. Right now, the way we permitted because you have to look at your, for bonding reclamation, where you have your cost upfront, we did what was reasonable for the company to afford at that time. But we feel confident we're going to able to increase our permits once we reach those levels because we're creating jobs in the area and there is not too much around there for people to complain about. And Cortez runs 24 hours so it shouldn't be an issue for us. So, once we kind of mastered our 10,000 ounces and we're hitting that gold then we feel confident that we can go back to the BLM to increase our permits and go to two or three shifts a day and that's why we have an increase over the next couple of years.

As well, once we get to Butcher Boy of the Fernley property, we are looking at doing about 10,000 ounces a year. It's pretty much the same model as Nevada, as our Black Rock Canyon Mine is. And then we've slided some potential production for Bear Bench for 2010 and those obviously are revenues based at $600 gold and prices above.

Our top estimated cash costs for production are $200 to $250 an ounce, which we think is very competitive. We save on again because we are not crushing anything and we are not on the gold side. There is no crushing and no chemicals, obviously we save a lot on expense there where we share the same expense that everybody else particularly in Nevada right now is, fuel all over America is expensive and labor is very expensive.

This is cash flow, base metals. At full production for the tungsten Project W with a 75% recovery rate of tungsten and 65% of zinc, copper, and silver. We got up to $70 million of revenue per year for up to 10 years at 3,400 tons per day at current metal prices.

And then as we say each of the above projects have a large potential but also associated risk including our permitting, our financing recovery, metal prices and deposit sites. But looking at where metals are today and where we feel they are going over the next few years and I think a lot other people deal, we think they are going to be whole strong and offer a great opportunity for Pacific Gold as we go forward.

Currently, we are looking, as part of our company structure, we are also looking to raise money and I think it's prudent to talk about it as you guys are looking at it because obviously we're a junior company compared to some of others you might be listening to today. But what separates us from a lot of other junior companies is that minus the young production. We are looking to raise about $5 million, part of that is additional upgrades at Black Rock Canyon and part of that is our permitting that we started and that updated feasibility studies and acquisitions. We're constantly looking at potential acquisitions. We've got identified them. So, we are always looking to generate some money that way and continue going forward.

The 2009 requirements that we have there for $25 million to $40 million, that's under the assumption we're going ahead with tungsten which is the whole animal beast, so to speak, onto itself. So that’s why that’s in there.

Currently, at Pacific Gold Corp, we have $61 million common shares as issued. Our stock symbol, as I said, is PCFG and all there is an in-depth history of all our properties, so those are maybe interested, if I don't answer your questions today or you don't see it in the materials on our website, we have quite detailed reports. We've always taken the philosophy that we should be an open book as much as possible and the first thing we have something in our reports, we should be able to put it up. So we have a quite a bit of history on there and to show where we are coming from today and where we would like to go. And that's the end of my slide show. Anybody have any questions?

Question-and-Answer Session

Unidentified Audience Member

Thank you, a few questions. On your future upcoming capital rates, how do you vision the structure in terms of further dilution or what’s the scene there?

Mitchell Geisler

Sure. Definitely I'll repeat question for the webcast, and the question is, how do we anticipate raising the money, what form? The financings that we've done today have been through convertible debentures and there is, that's probably going to be the way it's going forward for the smaller raises. I think when we get to the tungsten and we've updated that feasibility study, we can show the street and say, this is the firm as that they know. And that’s why we are making sure we are not just picking any firm to do it but we are picking the right one. We think there is a lot of benefit and there is different ways of financing that could be done. You are limited sometimes unfortunately when you are in a junior company to do it. Our potential suitors for raise sometimes are small. It’s a smaller pool, so to speak. So it's probably by way of convertibles. But we always look at other ways to try and come first at it.

Unidentified Audience Member

Is that fully diluted or are there any…

Mitchell Geisler

No, I am sorry. Fully diluted would be about 85 million. Yes, sir?

Unidentified Audience Member

Correct me if I'm wrong. That if you have $1.6 billion of…

Mitchell Geisler

In situ, yes.

Unidentified Audience Member

As well, and you have 61 million shares, does that come to roughly $26 per share.

Mitchell Geisler

That’s right.

Unidentified Audience Member

Then the second thing is companies sometimes give you the monetary value of their results without saying one word about how much it will cost to bring it to the ground and refine it. This is because interest…

Mitchell Geisler

Yeah. So, I think your question was, I can’t really answer is why aren't we realizing that?

Unidentified Audience Member

Get through to the questions.

Mitchell Geisler

Yeah. Why aren’t we realizing that and the fact that we are not getting the value?

Unidentified Audience Member

Why you are not realizing it but what -- straightforward question is how much do you think you, do you guesstimate it will cost you to mine and refine the $1.6 billion of reserves that you have?

Mitchell Geisler

Again, the question is how much will it cost to mine? Well, that’s kind of you have to go property to property. I mean on the Gold Properties it’s about $200 to $250 an ounce. The way you have to look at it they are separate piece, right, like to produce to look at uranium is completely separate than looking at the placer operation. I mean they are just—it’s really apples and oranges they are metals in the field of mining. But the tungsten operation we definitely, that's why we have large rates out there $25 to $40 million until we do our feasibility study. The original one to put it into production was about $25 million, but that's 1980 terms and again some things have gone up in price, but also recovery methods have gone up in price, have increased and technology has increased.

Unidentified Audience Member

What’s the structure of your shareholding? Percentage or by?

Mitchell Geisler

The CEO owns about 17 million shares approximately. Sorry, the question was, what is the structure of the company? The CEO owns about 17 million shares.

Unidentified Audience Member

That is 30%.

Mitchell Geisler

Yeah. Between the two of us it’s about, it's little less than 30%, about 27%. And then after that, it's spread to our shareholders. We have about 7,000 shareholders. So it's actually a very nice base for a company like ours.

Unidentified Audience Member

Any institutions?

Mitchell Geisler

The question was any institutions? Not at this time or at least they haven't identified themselves. And when we look at our printouts, we don't see any institution there. We would love to have some. Anybody have any questions?

Unidentified Audience Member

The environmental factors, one, two, other properties in the facilities adjoining these?

Mitchell Geisler

Question one was about the environment and environmental factors and two about nearby properties. The environmental on the gold side, as I said, one of our advantages is that we are environmentally friendly, so to speak, as much you can be in mining when it comes to placer operations. That’s not as easy to our placer operations. That would be to anybody who is running a placer operation, plus you don’t envision it almost as a giant panning operation, but obviously done on a massive scale with machines that do it now. That's a scene there. You are shifting through the gravels and the sand to get to the fines and the coarse gold. So it makes it lot easier.

We do a concurrent reclamation as we go along. Meaning a yard that's dumped in the machine now, it actually comes out of the plant in about 30 minutes and we start hauling that material up right away. So what happens is our trucks will down from the mine site and they dump the material, the gold bearing material and on their way back up, they don’t go up empty, they go up with the reclamation stuff.

And sorry -- there was the second question was the nearby [base station]. Yeah. Particularly, when it comes because we are along the Cortez Trend, and there is a lot of interest there. We have looked at -- we have some hard rock claims. We wish to open everything together before we really talk a lot about it. But we can't say too much rather than we have ongoing -- we are looking at things, particularly with that property to increase our resource and we feel confident that we are going to be able to do that over time.

Unidentified Audience Member

And also are there other companies adjoining or in close proximity to where you are?

Mitchell Geisler

A ton of, particularly, well with the Black Rock Canyon there is. There are all over the Cortez as I said it's…

Unidentified Audience Member

[Question Inaudible]

Mitchell Geisler

Yeah. Well, Newmont and Barrick and is right there. It's all the same area. I mean that’s the key area kind of to be in right now. U.S. Gold's property that they were talking about before the break and you have to kind of come past our mine and then go up into the mountains to get there and Corals and the other ones we've stated first but they are before the tungsten spring. So, there’s it's kind of an abundance out there right now. Everybody is taking land. Of course, we want to be diligent in making sure that we’re taking stuff that we believe is gold bearing.

Unidentified Audience Member

Thank you. Do you own or lease your equipment?

Mitchell Geisler

We own it all. We don’t lease any of our equipment. Any other questions?

I would like to thank you very much for your time today. If you have any additional questions, I'll be hanging around or please see our pamphlets and IR kits. I believe I put my card in there. So if anybody has any question afterwards, you can always e-mail or call me, I'll be more than happy to chat with you about the company. Thanks for your time today.

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