Director Barry Honig purchased 20,400 shares of Pershing Gold Corp. ( PGLC ) for $2.82 per share on April 18, according to SEC filings.
Honig now owns 1,384,044 shares of the company.
Pershing Gold is a gold and precious metals exploration company. It focuses on exploration, development and mining opportunities in Nevada. The company is focused on exploration at its Relief Canyon properties in Pershing County in Northwestern Nevada. It operates its business directly and also through its subsidiary, Gold Acquisition Corp. Gold Acquisition owns and is engaged in conducting exploration on the Relief Canyon Mine property in Northwestern Nevada.
In 2012, the company expanded the property with the acquisition of approximately 23,000 additional acres of unpatented mining claims and leased and subleased lands around Relief Canyon. The expansion gives the company more opportunities for growing its operations.
The mine is Pershing Gold's primary focus. Its Relief Canyon property rights currently total approximately 25,000 acres and are comprised of approximately 948 owned unpatented mining claims, 120 owned millsite claims, 172 leased unpatented mining claims, 2,235 acres of leased land and 2,770 acres of subleased private land.
Pershing Gold has a market cap of $81.75 million, an enterprise value of $70.05 million, a price-book (P/B) ratio of 2.09, a current ratio of 7.01 and a quick ratio of 7.01.
On April 4, Pershing Gold announced that it has entered into a Mining Sublease (the sublease) with Newmont USA Ltd. which further consolidates the Antelope Springs mining district in the Pershing Pass area south of the Relief Canyon Mine.
Pershing Gold geologists look forward to an aggressive mapping and sampling program to include the newly acquired Newmont lands. This work is being completed by Pershing Gold geologists and consulting geologists.
Under the terms of the sublease, Pershing Gold has the exclusive right to prospect, explore for, develop and mine minerals in these areas. The sublease has an initial term of 10 years and may be extended by Pershing Gold until Dec. 3, 2034 and so long thereafter as any mining, development or processing operations are being conducted continuously.
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According to GuruFocus, Pershing Gold has a 5 of 10 financial strength rating with no debt.
It has an Altman Z-Score of 9.95 indicating that it is in the safe zone and is not in danger of filing for bankruptcy within the next two years. Its Beneish M-Score indicates that the company does not manipulate its financial statements.
The company has a 3 of 10 profitability and growth rating. It has a return on assets (ROA) of -38.23%, a return on equity (ROE) of -49.16% and a return on capital (ROC) ( Joel Greenblatt ( Trades , Portfolio )) of -52.73%.
Honig may have purchased shares for the following reasons:
- The company is expanding operations.
- The company's price is close to its 10-year low.
- The company's P/B ratio is 2.08 which is close to its 10-year low of 2.05.
Disclosure: Author does not own any shares of this company.
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This article first appeared on GuruFocus .