Preliminary Feasibility Study

Mine Development Associates, Kappes Cassidy & Associates, of Reno, NV and Jorgensen Engineering and Technical Services, of Centennial, CO, completed the PFS for the Company's Relief Canyon gold mine with an effective date of May 26, 2017. The positive PFS by MDA recommends that Pershing Gold advance the Relief Canyon Project to a production decision. Highlights from the PFS include a pre-tax net present value of $144.6 million, an internal rate of return of 89% and Net Cash Flow of $192.7 million. This NPV, IRR and Net Cash Flow assume pre-tax economics using $1,250 per ounce of gold, $16.75/oz of silver and a 5% discount rate. Further highlights from the PFS are listed below in Table 1 (showing updates to the Preliminary Economic Assessment the Company announced on June 24, 2016), and PFS gold price sensitivities are listed below in Table 2.

Table 1: Relief Canyon PFS Highlights

  PEA PFS Company Model
Life of mine (“LOM”) 5.8 years 5.6 years 5.6 years
Average LOM production 88,500 oz Au/year 93,900 oz Au/year 97,100 oz Au/year
Cash Cost $772/oz Au $770/oz Au $769/oz Au
All in Sustaining Cost (“AISC”) $804/oz Au $802/oz Au $801/oz Au
Initial capital expenditure (“CAPEX”) $12.2 million $23.6 million $23.6 million
Sustaining CAPEX $16.6 million $22.8 million $22.8 million
Pre-tax Net Present Value (“NPV”), 5% $159 million $145 million $151 million
Pre-tax Internal Rate of Return (“IRR”) 125% 89% 91%
Pre-tax Net Cash Flow $206 million $192.7 million $201 million
After-tax NPV, 5% $121 million $126 million $131 million
After-tax IRR 109% 85% 87%
After-tax Net Cash Flow $157.6 million $167.7 million $174.1 million

The favorable economics of Relief Canyon are reinforced throughout the PFS. The PFS indicates the viability of contract-mining and conveyor stacking to bring the project into production. Under the PFS, 525,790 oz Au are expected to be produced with average life of mine ("LOM") production of 93,900 oz Au/year over the 5.6 year LOM. The PFS highlights the low cost nature of this project with an average cash cost of $770/oz Au and All in Sustaining Cost ("AISC") of $802/oz Au. The modest capital expense ("CAPEX") nature of this project is reaffirmed with the PFS Initial CAPEX of $23.6 million.

Table 2: PFS Gold Price Sensitivity Analysis, Before Tax

Gold Price / oz Au PFS Plan NPV, 5% PFS IRR Company Plan NPV, 5% Company Plan IRR
$1,450 $226 million 140% $232 million 141%
$1,400 $206 million 127% $212 million 129%
$1,350 $185 million 114% $192 million 116%
$1,300 $165 million 102% $171 million 103%
$1,250 $145 million 89% $151 million 91%
$1,200 $124 million 77% $131 million 79%
$1,150 $104 million 65% $110 million 67%
$1,100 $84 million 53% $90 million 55%