Pacific Gold Corp. and the Gold Sector: Analyzing Performance and Potential

Strategic Insights -

Pacific Gold Corp.'s (OTCBB: PCFG) Black Rock Canyon alluvial gold mine began gold production in the third quarter of 2006, with the mine owned and operated by Nevada Rae Gold, Inc., a 100% owned subsidiary of PCFG. The estimated resources for the Black Rock Canyon mine have been placed at up to 500,000 ounces of gold, indicating a potential mine life of over 20 years. With over 56,000,000 shares outstanding, the company's EBITDA per share for the first 12 months of full production from Black Rock Canyon could be as high as $0.05 per share.

Pacific Gold Corp. is currently mapping and planning for permits at its Fernley Gold subsidiary's Butcher Boy project to determine the maximum potential resource size as well as mining and permitting strategy. The company is also investigating additional potential acquisitions.

In the second quarter of 2006, PCFG announced a convertible debenture financing of $6.1 million with a conversion price of $1.00 per common share. The company's mission statement is to acquire up to $2 billion of mineral deposits by 2009, with the acquisition of Project W indicating that it has achieved approximately 55% of its goal.

Other notable stocks in the gold sector include Barrick Gold Corp. (NYSE: ABX), Goldcorp Inc. (NYSE: GG), Apex Silver Mines Ltd. (AMEX: SIL), Grey Wolf Inc. (AMEX: GW), and Coeur d'Alene Mines Corp. (NYSE: CDE). These companies have shown positive performance, with Barrick Gold Corp. rising 63 cents to finish the day at $29.68 per share, and Coeur d'Alene Mines Corp. increasing by 10 cents to finish at $5.26 per share.

Key Takeaways:

  • Pacific Gold Corp.'s Black Rock Canyon alluvial gold mine has begun gold production, with estimated resources of up to 500,000 ounces of gold.
  • The mine has a potential life of over 20 years, with EBITDA per share for the first 12 months of full production potentially reaching $0.05.
  • Pacific Gold Corp. is expanding its operations, with mapping and planning for permits at the Fernley Gold subsidiary's Butcher Boy project, as well as investigating additional potential acquisitions.
  • The company has achieved approximately 55% of its goal to acquire up to $2 billion of mineral deposits by 2009.
  • Barrick Gold Corp. (NYSE: ABX) has shown strong performance, rising 63 cents to finish the day at $29.68 per share.
  • Coeur d'Alene Mines Corp. (NYSE: CDE) has also increased in value, rising by 10 cents to finish at $5.26 per share.

Statistics:

  • Pacific Gold Corp.'s Black Rock Canyon mine has estimated resources of up to 500,000 ounces of gold.
  • The mine has a potential life of over 20 years.
  • EBITDA per share for the first 12 months of full production from the Black Rock Canyon mine could be as high as $0.05.
  • The company has over 56,000,000 shares outstanding.
  • Barrick Gold Corp. (NYSE: ABX) rose 63 cents to finish the day at $29.68 per share.
  • Volume on the shortened holiday session for Barrick Gold Corp. was 2.4 million shares.
  • Coeur d'Alene Mines Corp. (NYSE: CDE) rose by 10 cents to finish at $5.26 per share.
  • Volume on the session for Coeur d'Alene Mines Corp. was 2.8 million shares.

Sources:

  • M2 PressWIRE, "The Street Review: The gold sector" (27 November 2006)
  • Pacific Gold Corp., "Company Profile" (www.pacificgoldcorp.com)
  • Barrick Gold Corp., "Company Profile" (www.barrick.com)
  • Goldcorp Inc., "Company Profile" (www.goldcorp.com)
  • Apex Silver Mines Ltd., "Company Profile" (www.apexsilver.com)
  • Grey Wolf Inc., "Company Profile" (www.greymountainpartners.com)
  • Coeur d'Alene Mines Corp., "Company Profile" (www.cdaplcs.com)