Seeking Alpha

Dorian Issock's  Instablog

Dorian Issock
Send Message
Dorian Issock received a Bachelor's degree in Economics from the University of Las Vegas, Nevada. After having worked for a number of years in the financial services sector, Issock now works as a professional writer, regularly contributing his insights on the the money market and politics,... More
  • Nevada's Relief Canyon Mine: A Look At Its Rich History; A View Into Its Golden Future 4 comments
    Jun 19, 2012 12:41 AM

    Located in Northwestern Nevada, along the southern edge of the Humboldt Range, lies the Relief Canyon Mine. Situated 110 miles northeast of Reno and 16 miles east / northeast of Pershing County's Lovelock, the gold mine lies dormant.

    But if its newest owner, Pershing Gold Corporation, has its way, the activity level at Relief Canyon Mine is about to spike.

    Mining for gold, silver and mercury in the geological area of Pershing County has been taking place since the 1860s. The Relief Canyon mine was originally referred to as the Batavia and Pacific Mine, and the first recorded production in the Antelope Springs District (1.5 miles northeast of Relief Canyon) turned out to be high-grade silver ores in 1869.

    Gold was first discovered on the Relief Canyon property in 1979 by the Duval Corporation. Lancana Mining was the first to actually produce gold during the summer of 1984, reportedly producing 13,826 oz of gold during their involvement.

    In 1986, Pegasus Gold Corp. bought a 4-year option on the mining property. Pegasus' management term spanned November 1986 until September 1990, reportedly producing more than 100,000 ounces of gold during that time.

    In 1995, Firstgold Corp. purchased the mine. From 1996 to 2008, Firstgold drilled 182 drill holes. In addition to drilling a total of 94,111 feet, Firstgold also revamped the Adsorption-Desorption Recovery (ADR) plant originally built by Pegasus in the late 1980s.

    The then high-profile run of Firstgold Corp., financially backed in part by Chinese investors, was about to take a major downturn. In December 2009, a federal agency (the Committee on Foreign Investment) ruled that the mine was too close to facilities associated with Fallon's Naval Air Station to justify a foreign presence, and the company was subsequently forced into bankruptcy court.

    When Firstgold Corporation wasn't able to come up with a solid plan to reorganize its operations, control of the gold mining property shifted to its three secured creditors, Senetek PLC, Platinum Long Tern Growth LLC, and Lakewood Group.

    The creditors immediately set out analyzing the history of the geological area's ore production as they tried to determine whether or not to resume mining activity.

    The creditors considered creating a joint venture with an outside partner to get the mine up and running again. The group also considered selling the property to recoup the 19.3 million owed.

    In the end, the latter choice won out: recently formed gold exploration and development company, Pershing Gold Corporation (via its wholly-owned subsidiary, Gold Acquisition Corp.), became the mine's owner as of August 2011.

    As the area's history supports, the Relief Canyon Mine holds much potential. After all, the mine had previously yielded impressive results, despite the fact that Pershing County has largely been under-explored. Wanting to jump on the golden opportunity - buttressed by record-high gold prices - Pershing Gold Corporation's initial missive was to strengthen their balance sheet. More than $9 million of debts linked to the Relief Canyon Mine acquisition were converted into shares of the company's stock, which it subsequently sold to investors at $0.35 per share. The company ultimately raised $1,505,000 through stock sales.

    Pershing Gold Corporation believes that Relief Canyon provides dual benefits: on one hand, the area supplies excellent targets for new exploration, and on the other hand, it's an opportunity to exploit a current infrastructure and continue previous mining activity. Understandably, Pershing Gold Corporation is shifting much of its current attention and resources to the late-stage mining area of Pershing County. To that end, the company recently announced the sale of two of its Lander County early-stage properties, North Battle Mountain and Red Rock, to Valor Gold Corporation.

    According to Stephen Alfers, Executive Chairman, President, and CEO of Pershing Gold Corporation, the company would like to resume mining by the last quarter of 2013.

Back To Dorian Issock's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
  • TangoOscar
    , contributor
    Comments (377) | Send Message
     
    Seems like a risky investment.
    21 Jun 2012, 01:42 AM Reply Like
  • Dorian Issock
    , contributor
    Comments (2) | Send Message
     
    Author’s reply » EVERY investment has some degree of risk involved. I think it's about going in with eyes wide open, while taking calculated risks.
    21 Jun 2012, 12:34 PM Reply Like
  • countfleet43
    , contributor
    Comments (2) | Send Message
     
    Sure looks like new Owners & Management Team are doing everything right so far. Interesting that Couer D' Alene Mines & Dr Frost have invested many Millions buying common shares in "PGLC". I hope they hit there target of starting production late next year. I believe there is GOLD/SILVER in them thar hills.
    15 Aug 2012, 09:49 AM Reply Like
  • caseylm
    , contributor
    Comments (39) | Send Message
     
    im in long(ish) but it is a risky bet. I like that the previous owner just didnt bail but was forced out but then again, there is no production. Im also concerned about some of the mediocre drill results. On the plus it is financed, it wont go bk midway through the junior stage. Also, very rare to see a junior with a small processing facility included. A bigger neighbor would probably scoop it up if gold starts back up. Also, some new better drill results would give it anice pop. At these pps I'll throw a few buck at it and see what happens. I also like argentex.
    17 Aug 2012, 08:51 AM Reply Like
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.