Pershing Gold Up-Listing To Nasdaq, All Roads Leading To Higher Share Price?

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Pershing Gold (PGLC) has had its fair share of skeptics. I hope that skeptics are falling silent. Why? Look no further than the demise of Allied Nevada and Midway Gold (MDW). By no means did I forecast that either would fail. However, with 20/20 hindsight, each relied to heavily on debt or debt-like capital. As a reminder, Pershing Gold has no debt. Midway and Allied Nevada have larger resource endowments than Pershing, growing their ounces in lock step with their debt. Little good it did them in the end. I've said in the past that Pershing continues to take measured, prudent steps towards production. Naysayers took this to mean that the company was moving to slowly. I disagree.

Critics conveniently ignore the fact that gold was near ~$1,800/oz in early 2013, fell to ~$1,225/oz within 6-7 months, rebounded briefly to ~$1,400/oz and dropped to the $1,200/oz range. Instead of moving too slow, Pershing stepped back its exploration and development pace, leaving under-valued ounces in the ground. An internal economic scoping study this year with details of proposed production, costs, life-of-mine metrics, NAV, etc., the recently completed uplifting to Nasdaq and production next year should revitalize investor interest. The pudding from which the proof will be found is in the oven.

To be clear, I don't mean to pick on Allied Nevada or Midway. Others that have struggled mightily. For example, Nevada Sunrise Gold (NEV.V) (NVSGF) is down 81% from its 52-week high. [I own a modest number of Nevada Sunrise shares due to an analyst I respect recommending it]. Canamex Resources (CAC.V) (CNMXF) has an option to acquire up to a 75% interest in the Nevada Bruner Gold project located in Nye County, Nevada. That stock has lost 78% of its value. I could list more fallen angles, but why kick Nevada dogs when their down?

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Disclosure: I, Peter Epstein, CFA, MBA more

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