TORONTO, ONTARIO, Aug 15, 2011 (MARKETWIRE via COMTEX) -- Pacific Gold Corp. (otcqb:PCFG) PCFG -4.20%
Nevada Rae Gold, Inc. has measured its next 3 mining blocks to be mined and processed in the third and fourth quarters of 2011. These blocks are estimated to collectively contain 120,000 cubic yards of gravel and the Company expects the grade of the next 3 blocks to be approximately 0.4 grams of gold per cubic yard ("g/yd3"). It is possible that the gold grade per yard could vary as this is the nature of alluvial deposits. Grades will vary over time as the Company mines all of the Black Rock Canyon Mine ("BRCM") claims and leases.
The Company has rented a small fleet of equipment from a large heavy equipment manufacturer that includes a track dozer, two front end loaders, three 40 ton haul trucks, a motor grader, water truck and hydraulic excavator. The Company plans to use this equipment at least through the end of 2011 and then adjust its equipment requirements based on its mining plans for 2012 which will be determined late in the fourth quarter of 2011.
Production at BRCM since July 13th has totaled approximately 9,600 tons or about 6,500 yards of gravels. The processed gravels comprised the entire remaining stockpile at the BRCM as of June 30th. Included in the stockpile were mostly those gravels which the Company has identified as 'mudflow' as well as a limited amount of gravels that the Company considers normal 'pay' gravels (gravels that the Company has identified as its main resource). From the stockpile gravels the Company produced approximately 30 ounces of gold. The overall gold grade of the stockpile amounted to approximately 0.2 g/yd3. The mudflow which was a large portion of the stockpile had an average gold grade of about 0.1 g/yd3. The grade of gold within the pay gravels of the stockpile were between 0.3 and 0.4 g/yd3. Due to the commingling of the gravels over time (the stockpile was mined in 2007) an exact number for the pay gravels was more difficult to determine. The stockpile was mined mostly from the mudflow section (the mudflow being discovered by the Company through a seismic study on the drainage area) as part of a previous plan by the Company to test the gold grade of the mudflow, as this area was not previously mentioned in the historical reports describing the claims and leases of the Company. As a result of now processing a section of the mudflow and its apparent lower gold grade, the Company has decided to not currently mine any more of the mudflow material but to focus on its' previously identified pay gravels for the remainder of 2011. Depending on the world spot price of gold, the Company may return to new areas of the mudflow in the future. The mudflow is located underneath the pay gravels in the deposit and is relatively easy to bypass when mining.
The Company is pleased to announce that the plant is now operating more efficiently. So far in 2011 the plant has operated 19 out of 20 possible operating days and averaged about 500 tons or 350 yards per day. The Company has limited the feed rate to the plant in order to make sure that the plant was operating properly during an extended period. In August and September the Company plans to increase the plant throughput gradually on a weekly basis with daily targets of 750 yards by the end of August then up to 1,000 yards by the end of September, eventually to as much as 95% of plant capacity.
PCFG estimates that total Company costs, including production and SG&A, for operating the BRCM should not be more than $270,000 per month from August to December 2011.
August, September and Fourth Quarter Production
BRCM is planning to mine and screen the 120,000 cubic yards as identified above between now and the end of 2011. According to the Company's business plan and past announcements this volume of gravels would normally represent 3 months of full capacity production. The Company is taking a slightly slower approach than originally planned in order to make sure that the plant runs efficiently and the Company plans to increase the production rate each month through the end of 2011. The Company expects a gold grade of 0.4 g/yd3 processed during the third and fourth quarters.
The Company will update its guidance for the fourth quarter at the time that it releases its third quarter report in November.
Comment from the CEO, Rob Landau;
"I am very pleased about the progress that we have made at PCFG over the past six months.
I feel that we are now ready for consistent production and we plan to work diligently to convert PCFG from a Company developing a mining operation into a Company operating profitably.
We are working at building a long term growth business and are looking to fully develop the BRCM as well as beginning work at our other projects."
Questions from Shareholders
Below Company Management has attempted to address some of the more popular questions from shareholders;
BRCM 43-101 - The Company's 43-101 was completed in 2010 however the report only covers a portion of the resources under claim and lease to the Company. The 43-101 report will not be made public so as to avoid confusion in the market. The Company plans to eventually prepare an updated 43-101 on the entire resource area controlled by the Company, however this action has been delayed pending the acquisition of the B&B claims and for financial reasons. Once the revised 43-101 report is completed, which the Company expects to not be until at least the middle of 2012, the Company will consider releasing a summary of the results of the report but not the entire report. Shareholders should note that the 43-101 is not a Securities Act related document and the Company is not required to prepare one. The report's main purpose is for internal planning and financing. The 43-101 generally places resources into three categories, Measured, Indicated and Inferred. The method of increasing a resources confidence level requires more testing and increased expense. In an alluvial operation, such as the BRCM, the expense associated with increasing from an Indicated to a Measured category is nearly the same as actually mining the deposit. Based on the costs involved, the Company is in favor of proving its resources to the Indicated category when possible.
OTCBB - The Company will not be quoted on the OTCBB in the near future. The Company is currently happy with the OTC Markets QB tier and will investigate the new options recently announced by NASDAQ and FINRA for smaller companies as they become available. It is important to note that the Company does not have control over where its shares are quoted on the various OTC options. This is mostly a determination by Market Making member firms of FINRA and where they decide to quote the Company's shares. Some news services and websites are still adjusting their news and quote feeds to account for the different tiers on the OTC markets and so the Company stock ticker may show up on some still as 'pinksheets' and others as 'OTCQB'.
April 1st Promissory notes - As of August 15th these notes have not been converted into shares of the Company's common stock. Any shares of the Company that are issued under these notes are restricted from resale until October 1st, 2011. Shareholders should note that in general, unless a registration statement is filed with the SEC by the Company for the resale of the shares, the resale of all shares issued by the Company in private placements is subject to Rule 144 of the Securities Act of 1933, which mandates, among other things, a 6 month holding period prior to resale. The April 1st notes are convertible into common shares at $0.05 per share which was above the market price of Company's common stock at the time the notes were issued.
Shares Outstanding - As of August 15th the Company had 745,732,651 shares of common stock outstanding.
Fernley Gold - The Company has filed a Plan of Operations with the BLM and the NDEP to begin mining operations at the Company's leased claims. The BLM has responded with initial comments on the Plan. Due to the time constraints in getting the BRCM ready for operations the Company has fallen behind on its internal timeframe for permitting the Fernley claims. The Company plans to hire a consultant in the near future to take over the permitting process in order to get the application back on a timely schedule.
BRCM Mining Process - The following is a summary of the major steps involved in the process of how mining and screening are performed at the BRCM;
1. Dozer strips overburden from the new mining block to expose the pay
2. Excavator extracts pay gravels and loads the haul trucks.
3. Haul trucks deliver pay gravels to the screen plant, approx 4 miles from
the mine pit.
4. Front end loader loads the hopper with pay gravels.
5. Hopper feeds the gravels to the Grizzly.
6. Grizzly screens all rocks larger than 6" and allows the remaining gravel
onto the main process conveyor.
7. Gravels travel the main process conveyor into the Trommel, gravels are
washed as they enter the Trommel.
8. The Trommel screens out all gravel that is larger than 1/4", the rest
are transferred to the Knelson concentrator.
9. The Knelson concentrator recovers black sands (including gold), the
remainder (tailings) are then sent to a hydro-cyclone.
10. The black sands are sent to the gold room where they are cleaned with
the Hy-G concentrator and shaker tables and then the gold is separated
and prepared for shipment.
11. The tailings are stockpiled under the hydro-cyclone and the smaller
particles and water are then sent to the geotextile bags where the water
is cleaned for delivery to the ponds for recirculation into the plant.
12. The tailings from the Trommel, hydro-cyclone and geotextile bags are
loaded into the haul trucks for return to the mine pit.
13. The dozer restores the mined section of the pit with the tailings.
14. Reclamation work to restore the ground occurs.
Permitted Volumes of Production at BRCM - The BRCM is currently permitted to mine and process no more than 810,000 tons of material per year. This is approximately 540,000 cubic yards, based on the average weight of gravels at the BRCM. The Company can process this material in the time frame that it sees fit so long as it is within 12 month intervals. There is no monthly or daily limit. The Company's current plan is to process 40,000 yards per month but the amount could fluctuate from month to month. As currently configured the plant can handle a maximum of 150 yards per hour. In order to increase throughput at the screen plant, the Company can operate more hours or expand the plant. Taking both actions together would allow for an even greater increase in capacity. To expand the plant would involve adding a second Trommel (or one larger Trommel) and a second Knelson (or similar) concentrator, more hydro-cyclones, and additional various pumps. As well more geotextile bags would be required to clean the increased volume of water. The Company has applied to increase is geotextile bag field size with the NDEP. In order to increase production beyond the 810,000 ton limit of material per year, the Company would have to apply to modify its Plan of Operations with the BLM and NDEP.
Financing - In August of 2011, PCFG's CEO loaned $140,000 to the Company in non-interest bearing short term loans. Additionally on August 10th, the Company issued a convertible promissory note to one investor for $219,000. The note is convertible into shares of PCFG at $0.07 per share and bears simple interest at 10%. Any shares issued under the note are restricted from resale for 6 months from August 10th.
To find out more about Pacific Gold Corp. (otcqb:PCFG) PCFG -4.20% , visit the Company's website at www.pacificgoldcorp.com .
About the Company
Pacific Gold Corp.'s business plan provides for the acquisition and development of production-ready and in-production mining operations. The company is focused on alluvial gold and base metals operations located in western North America. Pacific Gold Corp. owns four operating subsidiaries: Nevada Rae Gold, Inc. ("Nevada Rae"), which owns and operates the Black Rock Canyon gold mine, located in north-central Nevada; Pilot Mountain Resources Inc. ("Pilot Mountain"), which owns Project W, a large tungsten based deposit in Nevada; Fernley Gold, Inc. ("Fernley Gold"), which has acquired exclusive lease rights to mine the Lower Olinghouse Placers in north-western Nevada; and Pacific Metals Corp. ("Pacific Metals"), which owns claims in San Juan and Delores Counties, Colorado, encompassing the historic Graysill Mine.
This news release includes forward-looking statements that reflect Pacific Gold Corp.'s current expectations about its future results, performance, prospects and opportunities. Pacific Gold Corp. has tried to identify these forward-looking statements by using words and phrases such as "may", "will", "expects", "anticipates", "believes", "intends", "estimates", "should", "typical", "we are confident" or similar expressions. These forward- looking statements are based on information currently available to Pacific Gold Corp. and are subject to a number of risks, uncertainties and other factors that could cause the Company's actual results, performance, prospects of opportunities in the remainder of 2011 and beyond, to differ materially from those expressed in, or implied by, these forward-looking statements.