Gold Rush Lifts Pershing Gold Corporation (OTC:PGLC)

With gold topping $1600 per ounce, it is no wonder there are always penny stock companies ready to become precious metal miners. This is the case of Pershing Gold Corporation (OTC:PGLC), classified as a film producer and trading under its new name since March.

The PGLC ticker was pumped right after its name change, at the end of March this year. The stock climbed to almost a dollar, but has lost more than two-thirds of its value since. While going in a general downward trend, this stock also shows sharp daily fluctuations of several cents, even without a promotion. In the no-pay promotion it is suggested this pattern is usual for the stock and caution and quick reasoning is a must.

The company predicts it will start production in its Nevada property in 2014, on a promising mine property. Contrary to other microcap miners, the firm owns an already open gold mine and some processing equipment, instead of a still unexplored property. Expert estimates suggest the price for reaching and processing the gold will not exceed $800 per ounce, just half the recent prices.

Until now, the company shows no revenues and several financial strengths as it managed to gather individual investors who contributed to the development. As of June 2012, the company has: 

• $1.45 million cash

• $1.72 million total liabilities

• 98 million market cap as of December 14, 2012

• $5.1 million net loss

The group also has significant stock holdings of other companies that could easily be converted to cash, as well as relatively liquid equipment. However, the company faces another year of exploration, projecting an expense of $13 million and despite the heightened prognosis for gold in the ground, the lack of revenues depresses the stock, down already 32% this year. The stock was briefly promoted by The Stockfather, a small-scale professional mailer with free or low-budget campaigns.

One of the Stockfather’s picks, American Lithium Corp. (OTC:AMEL) spiked in April on interest around the emails and later went on to lose close to 90% of its price. With mining companies promising development, it’s best to personally assess the risk before investing in the suggestions from the email.