LAKEWOOD, Colo., May 29, 2012 (GLOBE NEWSWIRE) — Pershing Gold Corporation (OTCBB:PGLC) is pleased to announce the sale of its two Lander County, Nevada properties, Red Rock and North Battle Mountain, to Valor Gold Corporation (OTCBB:VGLD) for cash and Valor common stock. This sale is a strategic transaction designed to benefit both companies.
“The sale of the Red Rock and North Battle Mountain properties is a win-win for both Pershing Gold and Valor Gold,” explained Stephen Alfers, Executive Chairman, President, and CEO of Pershing Gold. “This deal places these promising, early-stage projects in a grassroots exploration-focused company like Valor Gold, in which Pershing Gold will have a substantial ownership interest. At the same time it will allow Pershing Gold to focus all of our management attention and resources on our Relief Canyon Mine Project and our other assets in Pershing County where we recently consolidated and increased our land position (see press release dated April 13, 2012). We are actively drilling to expand the resource at Relief Canyon with the goal of resuming mining by late 2013.
Pershing Gold acquired the Lander County properties in May 2011—before the Company bought the Relief Canyon Mine in August 2011. Upon securing ownership of the Relief Canyon Mine, Pershing Gold made the strategic decision to shift its focus to opportunities in mineral districts in Pershing County that management believes are underexplored.
Both Red Rock and North Battle Mountain are located in the Eureka-Battle Mountain Gold Belt—one of Nevada’s most important gold trends. The projects include significant landholdings comprised of unpatented mining claims. Pershing management believes that both projects represent large, untested targets with favorable geology in a highly prospective geologic setting for Carlin-style gold deposits.
In 2011, the Company drilled 15 holes at Red Rock to explore for Carlin-style gold mineralization and performed several geophysical surveys. The Red Rock 2011 drilling and geophysical programs successfully identified targets that Pershing Gold expects Valor to pursue in the future. North Battle Mountain is an early-stage Carlin-type mineral target where ongoing analysis of a large geologic database consisting of rock and soil geochemical surveys and detailed geophysical studies should identify future drilling targets.
In the Valor transaction, Pershing Gold sold to Valor Gold Corporation two limited liability companies that hold leases on the Red Rock and North Battle Mountain gold exploration properties. The purchase price to Pershing Gold was a cash payment of $2 million; a $500,000 promissory note bearing interest at the rate of 5% and payable on the earlier of 18 months from the closing date or the date on which Valor raises $7.5 million; 25 million shares of Valor common stock, and a 1% net smelter return royalty from future production on the North Battle Mountain and Red Rock Prospects. Pershing Gold also received a 1% production royalty on the Red Rock and North Battle Mountain properties and following the transaction owns approximately 38% of Valor Gold’s outstanding shares. The Company used a portion of the cash received in the transaction to repay a $500,000 note.
About Pershing Gold Corporation
Pershing Gold Corporation is a new gold exploration and development company focusing on acquiring, exploring, and developing gold deposits in Pershing County and elsewhere in Nevada. The Relief Canyon Mine property in Pershing County is owned by Gold Acquisition Corp., the Company’s wholly owned subsidiary.
Legal Notice and Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company set forth herein including the anticipated exploration on the North Battle Mountain and Red Rock prospects, planned drilling at the Relief Canyon property, goals regarding expansion of the Relief Canyon resource and resumption of mining in late 2013, interpretations of exploration results and other geologic information and those preceded by or that include the words “believes,” “expects,” “given,” “targets,” “intends,” “anticipates,” “plans,” “projects,” “forecasts” or similar expressions, are “forward-looking statements.” Although the Company’s management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company’s future results to differ materially from those anticipated. Potential risks and uncertainties include, among others inability to obtain external financing to fund planned exploration or maintain property rights, reinterpretations of geologic information, unfavorable exploration results, inability to obtain permits required for its planned exploration and other activities, general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices; risks of junior exploration and pre-production activities; changes in Valor’s plans regarding exploration of the North Battle Mountain and Red Rock prospects and maintenance of important business relationships. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in the Company’s filings with the SEC including the Annual Report on Form 10-K for the year ended December 31, 2011 and each subsequently filed Current Report on Form 8-K. The Company assumes no obligation to update any of the information contained or referenced in this press release.
CONTACT: Stephen D. Alfers
Executive Chairman, President and CEO
Phone Number: 720.974.7254
Email: investors@pershinggold.com
www.PershingGold.com
Source: Pershing Gold Corporation
Released May 29, 2012