Pershing Gold: We Believe Shares Are Virtually Worthless

Summary

• Pershing Gold’s director and controller of approximately 28.4% of voting securities, Barry Honig, has a questionable history.
• The company’s key asset, the Relief Canyon Mine, was purchased with backing from a hedge fund whose executives were federally indicted for operating “like a Ponzi Scheme," according to prosecutors.
• The mine, which previously targeted production in 2014, has yet to commence production and only recently completed a pre-feasibility study.
• Pershing is nearly out of cash and will need to dilute shareholders by an estimated 40%+ in order to bring the mine into production.

Pershing Gold Corporation (Nasdaq:PGLC) is an emerging gold producer whose primary asset is the Relief Canyon Mine in Pershing County, Nevada. The company is listed on the NASDAQ Global Market and the Toronto Stock Exchange under the symbol PGLC and on the Frankfurt Stock Exchange under the symbol 7PG1.

Pershing Gold’s Director and Key Backer, Barry Honig, As Described in Plea Agreement

Honig was Chairman of the company until he resigned on February 9, 2012. He currently remains as director. While no longer the key front man, he is still a key backer of the company, according to the company’s most recent 10-K dated December 31, 2016. As of that filing, Honig owned 8,842,763 shares of PGLC, representing approximately 28.4% of the company’s voting securities.

In 2015, Joseph A Noel, the CEO of a penny stock company called YesDTC Holdings, was charged with securities fraud for running a pump and dump scheme. Noel was charged both criminally and civilly, and ultimately pled guilty. A copy of the plea agreement in which Noel confessed his crimes to authorities, also details Noel’s account of the role that Barry Honig played in the scheme, including setting up a reverse merger via a shell company he controlled and by encouraging a focus on stock promotions to drive up the price rather than focus on fundamental drivers. Per the plea deal:

In the fall of 2009, I met Barry Honig, who I understood was a large investor in small cap companies. Later that fall, Honig suggested that we do a reverse merger to create a publicly traded company to take control of Allay Online's assets and that I be the CEO of the new company. I was very excited with this opportunity. Honig had the experience and resources to implement the reverse merger. He proposed that

Analyst’s Disclosure: I am/we are short PGLC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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