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.