Yesterday Pershing Gold Corporation (OTC:PGLC) issued a press release with an exciting title. The market reaction wasn’t very strong, though.
The company announced a new discovery at Relief Canyon. The press release came out about 8:00 am. That gave traders some time to go through it and decide how exciting it was beyond the title. In the end PGLC managed to close up 7.94% at $0.34, on a little over a million shares.[BANNER]
The discovery turned out to be a “a new zone of high-grade gold mineralization.” The press release doesn’t provide an idea of how that discovery could really affect the performance of PGLC.
Since PGLC is still an exploration stage company, it is expected it doesn’t have a source of revenue. The annual report for 2011 showed PGLC had about $3.7 million in cash, which is a substantial sum for a pink sheets company, however, the liabilities were nearly $9 million.
Another troubling thing about PGLC is that during 2011 the number of common shares grew from about 22 million to nearly 143 million; about 21 million were issued just in the last quarter of 2011.
On top of that, there may be some negativity resulting from the promotional fiasco back in late March. Those who bought in at the peak of the hype are now down more than 60%.
So far today, PGLC has lost about 10% of yesterday’s close, and is trading at $0.305 at the time of this writing.
