As filed with the
Securities and Exchange Commission on June 7, 2016.
Registration
No. 333-[ ]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
PERSHING GOLD CORPORATION
(Exact name of registrant as specified in
its charter)
Nevada
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26-0657736
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1658 Cole Boulevard
Building 6 – Suite 210
Lakewood, Colorado 80401
720-974-7254
(Address, including zip code, and telephone
number,
including area code,
of registrant’s principal executive offices)
Stephen Alfers
President and Chief Executive Officer
1658 Cole Boulevard
Building 6 – Suite 210
Lakewood, Colorado 80401
720-974-7254
(Name, address, including zip code, and
telephone number, including area code, of
agent for service)
With Copies To:
Deborah Friedman
Michelle Shepston
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, Colorado 80202
(303) 892-9400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement as determined by market conditions.
If the only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
¨
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest reinvestment plans, check the following box.
þ
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box.
¨
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes
of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
Title of each class of
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Proposed maximum aggregate
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securities to be registered (1)
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offering price (2)
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Amount of registration fee (3)
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Senior Debt Securities
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Subordinated Debt Securities
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Common Stock, par value $0.0001 per share
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Preferred Stock, par value $0.0001 per share
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Warrants
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Rights
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Units
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Total
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$
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100,000,000
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$
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10,070
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(1)
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Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. The securities
which may be offered pursuant to this Registration Statement include, pursuant to Rule 416 of the Securities Act of 1933, as amended
(the “Securities Act”), such additional number of shares of the registrant’s common stock that may become issuable
as a result of any stock split, stock dividends or similar event.
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(2)
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An indeterminate aggregate offering price and number or amount of the securities of each identified class is being registered
as may from time to time be sold at indeterminate prices, with a maximum aggregate offering price not to exceed $100 million. Separate
consideration may or may not be received for securities that are issuable upon conversion of, or in exchange for, or upon exercise
of, convertible or exchangeable securities.
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(3)
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Pursuant to Rule 457(o) under the Securities Act of 1933, as amended, the registration fee has been calculated on the basis
of the maximum aggregate offering price.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT
ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION
8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JUNE 7, 2016
PERSHING GOLD CORPORATION
$100,000,000
Senior Debt Securities
Subordinated Debt Securities
Common Stock
Preferred Stock
Warrants
Rights
Units
Pershing Gold Corporation (the “Company,”
“we,” “us,” or “our”) may offer and sell from time to time up to $100 million of our senior
and subordinated debt securities, common stock, $0.0001 par value per share, preferred stock, $0.0001 par value per share, warrants
to purchase any of the other securities that may be sold under this prospectus, rights to purchase common stock, preferred stock
and/or senior or subordinated debt securities, and units consisting of two or more of these classes or series of securities, securities
that may be convertible or exchangeable to other securities covered hereby, in one or more transactions.
We will provide specific terms of any offering
in supplements to this prospectus. The securities may be offered separately or together in any combination and as separate series.
You should read this prospectus and any supplement carefully before you invest.
We may sell securities directly to you,
through agents we select, or through underwriters or dealers we select. If we use agents, underwriters or dealers to sell the securities,
we will name them and describe their compensation in a prospectus supplement. The net proceeds we expect to receive from these
sales will be described in the prospectus supplement.
Our common stock is traded on the Nasdaq
Stock Market under the symbol “PGLC.” On June 6, 2016, the last reported sales price of our common stock on the Nasdaq
Stock Market was $4.35 per share. The applicable prospectus supplement will contain information, where applicable, as to any other
listing on the Nasdaq Stock Market or any securities exchange of the securities covered by the prospectus supplement.
As of June 3, 2016, the aggregate market
value of our outstanding voting and non-voting common equity held by non-affiliates was $58.7 million, based on an aggregate of
26,106,654 shares of common stock outstanding, of which 13,621,630 shares were held by non-affiliates, and a per share price of
$4.31, the closing price of our common stock on June 3, 2016 as reported on the Nasdaq Stock Market. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell shares of our common stock in a public primary offering with a value exceeding more
than one-third of our public float in any 12-month period so long as our public float remains below $75.0 million. We have not
offered any securities pursuant to General Instruction I.B.6 of Form S-3 during the 12 calendar months prior to and including the
date of this prospectus.
The securities offered in this
prospectus involve a high degree of risk.
You should carefully consider the matters set forth in “
Risk
Factors
” on
page 6 of this prospectus or incorporated by reference herein in determining
whether
to purchase our securities.
Neither the Securities and Exchange Commission
nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus
is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus
is __________, 2016.
TABLE OF CONTENTS
As used in this prospectus, the terms the “Company,”
“we,” “our,” “ours” and “us” may, depending on the context, refer to Pershing Gold
Corporation or to one or more of Pershing Gold Corporation’s consolidated subsidiaries or to Pershing Gold Corporation and
its consolidated subsidiaries, taken as a whole. When we refer to “shares” throughout this prospectus, we include all
rights attaching to our shares of common stock under any shareholder rights plan then in effect.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission, which we refer to as the “SEC” or the “Commission”,
using a “shelf” registration process. Under the shelf registration, we may sell any combination of the securities described
in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities that we
may offer. Each time that we sell securities, we will provide a prospectus supplement that will contain specific information about
the terms of that offering. The prospectus supplement also may add, update or change information contained in this prospectus.
You should read both this prospectus and any prospectus supplement together with additional information incorporated by reference
in this prospectus before making an investment in our securities. See “Where You Can Find More Information” for more
information. We may use this prospectus to sell securities only if it is accompanied by a prospectus supplement.
You should not assume that the information
in this prospectus, any accompanying prospectus supplement or any document incorporated by reference is accurate as of any date
other than the date of such document.
WHERE
YOU CAN FIND MORE INFORMATION
We file and furnish annual, quarterly and
current reports and other information, including proxy statements, with the SEC. You may read and copy any document we file or
furnish with the SEC at the SEC’s Public Reference Room located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our SEC filings are
available to the public on the SEC’s website at
www.sec.gov.
Our SEC filings are also available through the “Investor
Relations” section of our website at
www.pershinggold.com
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” information into this prospectus and any accompanying prospectus supplement, which means that we can disclose
important information to you by referring you to other documents filed separately with the SEC. The information incorporated by
reference is considered part of this prospectus, and information filed with the SEC subsequent to this prospectus and prior to
the termination of the particular offering referred to in such prospectus supplement will automatically be deemed to update and
supersede this information. We incorporate by reference into this prospectus and any accompanying prospectus supplement the documents
listed below (excluding any portions of such documents that have been “furnished” but not “filed” for purposes
of the Exchange Act):
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Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as amended by the Annual Report on Form 10-K/A filed on April 29, 2016;
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Quarterly Report on Form 10-Q filed on May 13, 2016;
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Current Reports on Form 8-K filed on February 10, 2016, March 2, 2016, March 4, 2016 and March 30, 2016; and
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The description of our common stock set forth in our registration statement on Form 8-A filed on July 1, 2015, and any amendment or report filed for the purpose of updating such description.
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We also incorporate by reference all documents
we subsequently file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the initial filing of
the registration statement of which this prospectus is a part (including prior to the effectiveness of the registration statement)
and prior to the termination of the offering. Any statement in a document incorporated by reference in this prospectus will be
deemed to be modified or superseded to the extent a statement contained in this prospectus or any other subsequently filed document
that is incorporated by reference in this prospectus modifies or supersedes such statement.
Unless specifically stated to the contrary,
none of the information that we disclose under Items 2.02 or 7.01 or corresponding information furnished under Item 9.01 or included
as an exhibit of any Current Report on Form 8-K that we may from time to time furnish to the SEC will be incorporated by reference
into, or otherwise included in, this prospectus.
We will provide without charge upon written
or oral request, a copy of any or all of the documents which are incorporated by reference into this prospectus. Requests should
be directed to:
Pershing Gold Corporation
Attention: Corporate Secretary
1658 Cole Boulevard
Building 6 – Suite 210
Lakewood, Colorado 80401
Except as provided above, no other information,
including information on our internet site, is incorporated by reference in this prospectus.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some information contained
in or incorporated by reference into this registration statement on Form S-3 may contain forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of 1995. These statements include statements relating to
our plans to complete a PEA (as defined below) on the Relief Canyon Mine, conduct geophysical surveys and determine the scope of
our drilling program in 2016, our mineralized material estimate and plans to update the mineralized material estimate, plans to
commence our 2016 drilling program, further development efforts required to advance the Relief Canyon Mine to production, further
permitting and mine planning for the Relief Canyon Mine, expectations and the timing and budget for exploration and future development
of our Relief Canyon properties, our planned expenditures for 2016, our estimates of the cost of future permitting changes and
additional bonding requirements, future exploration plans, the estimated preliminary internal economics for the Relief Canyon Mine,
our expected cash needs, our ability to fund our business with our current cash reserves based on our currently planned activities
and statements concerning our financial condition, business and operating strategies, and operating and legal risks.
We use the words “anticipate,”
“continue,” “likely,” “estimate,” “expect,” “may,” “could,”
“will,” “project,” “should,” “believe” and similar expressions to identify forward-looking
statements. Statements that contain these words discuss our future expectations and plans, or state other forward-looking information.
Although we believe the expectations and assumptions reflected in those forward-looking statements are reasonable, we cannot assure
you that these expectations and assumptions will prove to be correct. Our actual results could differ materially from those expressed
or implied in these forward-looking statements as a result of various factors described in this registration statement on Form S-3,
including:
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Risks relating to the 2016 exploration efforts to expand the Relief Canyon deposit, determining the feasibility and economic viability of commencing mining, our ability to fund future exploration costs or purchase additional equipment, and our ability to obtain or amend the necessary permits, consents, or authorizations needed to advance expansion of the deposit or recommissioning of the gold processing facility;
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Risks related to the Relief Canyon properties other than the Relief Canyon Mine, including our ability to advance gold exploration, discover any deposits of gold of other minerals which can be mined at a profit, maintain our unpatented mining claims and millsites, commence mining, obtain and maintain any necessary permits, consents, or authorizations needed to continue exploration, and raise the necessary capital to finance exploration and potential expansion;
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Our ability to acquire additional mineral targets;
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Our ability to obtain additional external funding;
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Our ability to achieve any meaningful revenue;
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Our ability to engage or retain geologists, engineers, consultants and other key management and mining personnel necessary to successfully operate and grow our business;
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The volatility of the market price of our common stock or our intention not to pay any cash dividends in the foreseeable future;
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Changes in any federal, state or local laws and regulations or possible challenges by third parties or contests by the federal government that increase costs of operation or limit our ability to explore on certain portions of our property;
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Continuing decreases in the market price for gold and economic and political events affecting the market prices for gold and other minerals which may be found on our exploration properties; and
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The factors set forth under “Risk Factors”
beginning on page 6 of this registration statement on Form S-3.
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Many of these factors
are beyond our ability to control or predict. Although we believe that the expectations reflected in our forward-looking statements
are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risk and uncertainties.
You should not unduly rely on any of our forward-looking statements. These statements speak only as of the date of this registration
statement on Form S-3. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking
statements to reflect future events or developments. All subsequent written and oral forward-looking statements attributable to
us and persons acting on our behalf are qualified in their entirety by the cautionary statements contained in this section and
elsewhere in this registration statement on Form S-3.
OUR
BUSINESS
Overview
We are a gold and precious
metals exploration company pursuing exploration, development and mining opportunities primarily in Nevada. We are currently focused
on exploration at our Relief Canyon properties in Pershing County in northwestern Nevada and, if economically feasible, commencing
mining at the Relief Canyon Mine. None of our properties contain proven and probable reserves, and our activities on all of our
properties are exploratory in nature.
Business Strategy
Our business strategy
is to acquire and advance precious metals exploration properties. We seek properties with known mineralization that are in an advanced
stage of exploration and have previously undergone some drilling but are under-explored, which we believe we can advance quickly
to increase value.
Relief Canyon Mine Property
Our 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, and 2,235 acres of leased and 2,770 acres of subleased private
lands. As currently defined by exploration drilling, most of the Relief Canyon deposit is located on property
that is subject to a 2% net smelter return production royalty, with a portion of the deposit located on property subject
to net smelter return production royalties totaling 4.5%. The rest of the property is subject, under varying circumstances,
to net smelter return production royalties ranging from 2% to 5%.
Since acquisition
of the Relief Canyon Mine property, our exploration efforts have been focused primarily on expanding the known Relief Canyon Mine
deposit. Our 2011-2013 exploration drilling programs expanded the deposit. We began a drilling program in 2014 which we completed
in early 2015. In this program, we drilled a total of 134 holes, for approximately 74,000 feet, for the purpose of extending and
upgrading the current deposit. The 2014 drill results included some gold intercepts at significantly higher grades than the average
historic grade of the Relief Canyon deposit of approximately one gram per ton. We conducted a 2015 drilling program from May 2015
through December 2015, which demonstrated that the high-grade zone in the North Target Area has continued south under the North
Pit and that the higher-grade L Zone of the Relief Canyon deposit is open to the west, south and southwest. Since we acquired
Relief Canyon, we have drilled a total of 465 drill holes comprising approximately 259,000 feet at the Relief Canyon Mine property.
During the first-half of 2016, we plan to conduct geophysical surveys over the mine and the covered areas south and southeast
of the pits. Drilling for the remainder of 2016 will be determined based upon the results of these geophysical surveys and available
funding.
In July 2015, we reported
the following update of our estimate of mineralized material at the Relief Canyon deposit, calculated at a gold price assumption
of $1,200 per ounce and a cut-off grade of 0.005 ounces of gold per ton.
Tons
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Average gold grade
(ounces per ton)
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37,335,000
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0.020
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“Mineralized
material” as used in this registration statement on Form S-3, although permissible under the Securities and Exchange Commission
(“SEC”) Guide 7, does not indicate “reserves” by SEC standards. We cannot be certain that
any part of the Relief Canyon deposit will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves.” Investors
are cautioned not to assume that all or any part of the mineralized material will be confirmed or converted into reserves or that
mineralized material can be economically or legally extracted.
We completed the 2015
drilling program in December 2015 and plan to incorporate the results of the 2015 drilling program into a further updated mineralized
material estimate.
Work on the updated mineralized material estimate and a Preliminary Economic
Assessment ("PEA") is currently underway. The PEA will include extensive engineering and metallurgical work and
will provide third party updated economics on the Relief Canyon Mine. Pershing Gold has retained a firm to initiate pre-feasibility
level geotechnical studies for the Relief Canyon Mine.
If we were to decide
to pursue the commencement of production at Relief Canyon, additional external financing would be required. Although the Relief
Canyon Mine currently has an available leach pad and processing facility and we have senior mine and processing personnel in place,
we would be required to obtain mining equipment (which could be through purchase, lease, contract mining or a combination of these),
hire employees for the mine and the processing plant, purchase materials and supplies, commence mining, leaching and processing
activities, and continue these activities as well as the corporate activities currently conducted for a number of months until
sufficient positive cash flow is produced by gold sales to fund all of these ongoing activities.
Additional external
financing could be obtained by the sale of equity or debt securities, asset sales, project or product financing or strategic alternatives,
which could include third party purchasers of an interest in the Relief Canyon Mine or other projects or business combinations
which could include a sale of the mine or the Company. There are no assurances that we will be successful in raising sufficient
financing to commence production at Relief Canyon or to continue our business.
During 2016, we plan
to focus primarily on completing an updated mineralized material estimate and the PEA, pre-feasibility studies, and continuing
work to develop an economically feasible mining and processing plan. We estimate that costs for these activities for 2016, not
including general and administrative costs, will total approximately $1.5 million.
Corporate Information
Our principal executive
offices are located at 1658 Cole Boulevard, Building 6-Suite 210, Lakewood, CO 80401 and our telephone number is 720-974-7254.
We maintain a website at www.pershinggold.com, which contains information about us. Our website and the information contained in
and connected to it are not a part of this prospectus.
RISK
FACTORS
Investing in our securities involves
a high degree of risk. Before investing in our securities you should carefully consider the following risks, together with the
financial and other information contained in this prospectus. If any of the following risks actually occurs, our business, prospects,
financial condition and results of operations could be adversely affected. In that case, the value of our securities would likely
decline and you may lose all or a part of your investment.
Risks Relating to Our Business
We have no proven or probable reserves
on our properties and we do not know if our properties contain any gold or other minerals that can be mined at a profit.
The properties on which
we have the right to explore for gold and other minerals do not contain mineral reserves and we do not know if any deposits of
gold or other minerals can be mined at a profit. Whether a gold or other mineral deposit can be mined at a profit depends upon
many factors. Some but not all of these factors include: the particular attributes of the deposit, such as size, grade and proximity
to infrastructure; operating costs and capital expenditures required to start mining a deposit; the availability and cost of financing;
the price of the gold or other minerals which is highly volatile and cyclical; and government regulations, including regulations
relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection. We are also obligated
to pay production royalties on certain of our mineral production, including a net smelter royalty of 2% or 2.5% on production from
most of our Relief Canyon Mine property, which would increase our costs of production and make our ability to operate profitably
more difficult. We are also obligated to pay a net smelter royalty of up to 5% on production from some of our claims and lands.
We are an exploration stage company and have only recently
commenced exploration activities on our claims. We reported a net loss for the year ended December 31, 2015, and expect to
incur operating losses for the foreseeable future.
Our evaluation of our
Relief Canyon Mine property is primarily based on historical production data and on new exploration data that we have developed
since 2011, supplemented by historical exploration data. Our plans for recommencing mining and processing activities at the Relief
Canyon Mine property are in their early stages and preliminary, as are our exploration programs on the Relief Canyon expansion
properties. Accordingly, we are not yet in a position to estimate expected amounts of minerals, yields or values or evaluate the
likelihood that our business will be successful. We have not earned any revenues from mining operations. The likelihood of success
must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the
exploration of the mineral properties and commencement of mining activities that we plan to undertake. These potential problems
include, but are not limited to, unanticipated problems relating to exploration, costs and expenses that may exceed current estimates
and the requirement for external funding to continue our business. Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues. We reported a net loss of approximately $19.1 million
for the year ended December 31, 2015. We expect to incur significant losses into the foreseeable future. Our monthly burn
rate for all costs during 2015 was approximately $1.86 million, including $635,000 for general and administrative costs (including
all employee salaries, public company expenses, consultants, and land holdings costs), $720,000 for exploration activities, and
$510,000 for purchases of mineral rights, property and equipment. We expect, based on our current preliminary budget, our monthly
burn rate for all costs in 2016 to be approximately $600,000 (including approximately $490,000 for general and administrative costs
and $110,000 for exploration, permitting, and plant recommissioning), which may increase as our plans develop. Based on our current
cash position, we expect to require additional external financing to fund operations and exploration by early to mid-2018. If we
decide to pursue a plan to commence mining and processing at Relief Canyon, additional external financing would be required. If
we are unable to raise external funding, and eventually generate significant revenues from our claims and properties, we will not
be able to earn profits or continue operations. We have no production history upon which to base any assumption as to the likelihood
that we will prove successful, and it is uncertain that we will generate any operating revenues or ever achieve profitable operations.
If we are unsuccessful in addressing these risks, our business will most likely fail.
Exploring for gold and other minerals
is inherently speculative, involves substantial expenditures, and is frequently non-productive.
Mineral exploration
(currently our only business), and gold exploration in particular, is a business that by its nature is very speculative. We may
not be able to establish mineral reserves on our properties or be able to mine any gold or any other minerals on a profitable basis.
Few properties that are explored are ultimately developed into producing mines. Unusual or unexpected geological conditions, fires,
flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are just
some of the many risks involved in mineral exploration programs and the subsequent development of gold deposits.
The mining industry is capital intensive and we may be
unable to raise necessary funding.
We spent approximately
$22.4 million on our business and exploration during the year ended December 31, 2015 (of which $6.0 million was related to
the transaction with Newmont USA Limited (“Newmont”)). Our estimated total cost for 2016 for exploration, permitting,
landholding, facilities recommissioning and for general and administrative costs is approximately $7.0 million. If we decide to
pursue the commencement of production at Relief Canyon, additional external financing would be required. In addition, even if we
do not decide to pursue the commencement of production at Relief Canyon, we will be required to raise additional funds in order
to finance our operations. We may be unable to secure additional financing on terms acceptable to us, or at all. Our inability
to raise additional funds would prevent us from achieving our business objectives and would have a negative impact on our business,
financial condition, results of operations and the value of our securities. If we raise additional funds by issuing additional
equity or convertible debt securities, the ownership of existing stockholders may be diluted and the securities that we may issue
in the future may have rights, preferences or privileges senior to those of the current holders of our common stock. Such securities
may also be issued at a discount to the market price of our common stock, resulting in possible further dilution to the book value
per share of common stock. If we raise additional funds by issuing debt, we could be subject to debt covenants that could place
limitations on our operations and financial flexibility.
If we decide to pursue the commencement
of mining and processing activities at Relief Canyon, unanticipated problems or delays may negatively affect our business and financial
condition.
If we were to decide
to pursue the commencement of mining and processing activities at Relief Canyon, additional external financing would be required.
Although the Relief Canyon Mine currently has an available leach pad and processing facility and we have senior mine and processing
personnel in place, we would be required to obtain mining equipment (which could be through purchase, lease, contract mining or
a combination of these), hire employees for the mine and the processing plant, purchase materials and supplies, commence mining,
leaching and processing activities, and continue these activities as well as the corporate activities currently conducted for a
number of months until sufficient positive cash flow is produced by gold sales to fund all of these ongoing activities. We may
suffer significant delays or cost overruns as a result of a variety of factors, such as increases in the prices of materials, mining
or processing problems, unanticipated variations in mined materials, shortages of workers or materials, transportation constraints,
adverse weather, equipment failures, fires, damage to or destruction of property and equipment, environmental problems, unforeseen
difficulties or labor issues, any of which could delay or prevent us from commencing or ramping up mining and processing. If our
start-up were prolonged or delayed or our costs were higher than anticipated, we could be unable to obtain sufficient funds to
cover the additional costs, and our business could experience a substantial setback. Prolonged problems could have a material adverse
effect on our business, consolidated financial condition or results of operations and threaten our viability.
We are a junior exploration company
with no mining activities and we may never have any mining activities in the future.
Our primary business
is exploring for gold and, to a lesser extent, other minerals. If we discover commercially exploitable gold or other deposits,
we will not be able to make any money from mining activities unless the gold or other deposits are actually mined, or we sell our
interest. Accordingly, we will need to seek additional capital through debt or equity financing, find some other entity to mine
our properties or operate our facilities on our behalf, enter into joint venture or other arrangements with a third party, or sell
or lease the property or rights to mine to third parties. Mine development projects typically require a number of years and significant
expenditures during the development phase before production is possible. Such projects could experience unexpected problems and
delays during development, construction and mine start up. Mining operations in the United States are subject to many different
federal, state and local laws and regulations, including stringent environmental, health and safety laws. If and when we assume
operational responsibility for mining on our properties, it is possible that we will be unable to comply with current or future
laws and regulations, which can change at any time. It is possible that changes to these laws will be adverse to any potential
mining operations. Moreover, compliance with such laws may cause substantial delays and require capital outlays in excess of those
anticipated, adversely affecting any potential mining operations. Our future mining operations, if any, may also be subject to
liability for pollution or other environmental damage. It is possible that we will choose to not be insured against this risk because
of high insurance costs or other reasons.
We have a short operating history,
have a history of losses and may never achieve any meaningful revenue.
We acquired all of
our property interests since August 2011. Our operating history consists of our exploration activities. We have no income-producing
activities from mining or exploration, and have a history of losses stemming from the acquisition of the rights to explore on our
property and conducting our exploration activities. Exploring for gold and other minerals or resources is an inherently speculative
activity and there is no assurance we will be able to develop an economically feasible operating plan for the Relief Canyon Mine.
There is a strong possibility that we will not find any other commercially exploitable gold or other deposits on our property.
Because we are an exploration company, we may never achieve any meaningful revenue.
We must make annual lease payments, advance royalty and
royalty payments and claim maintenance payments or we will lose our rights to our property.
We are required under
the terms of the leases covering some of our property interests to make annual lease payments and advance royalty and royalty payments
each year. We are also required to make annual claim maintenance payments to the U.S. Bureau of Land Management (“BLM”)
and pay a fee to Pershing County in order to maintain our rights to explore and, if warranted, to develop our unpatented mining
claims. If we fail to meet these obligations, we will lose the right to explore for gold and other minerals on our property. Our
total annual property maintenance costs payable to the BLM and Pershing County for all of the unpatented mining claims and millsites
in the Relief Canyon area in 2015 were approximately $224,000, and we expect our annual maintenance costs to be approximately $234,000
in 2016. Our lease payments, advance royalty and royalty payments and claim maintenance payments are described above under “Our
Business”.
Our business is subject to extensive
environmental regulations that may make exploring, mining or related activities prohibitively expensive, and which may change at
any time.
All of our operations
are subject to extensive environmental regulations that can substantially delay exploration and make exploration expensive or prohibit
it altogether. We may be subject to potential liabilities associated with the pollution of the environment and the disposal of
waste products that may occur as the result of exploring and other related activities on our properties, including our plan to
process gold at our processing facility. We may have to pay to remedy environmental pollution, which may reduce the amount of money
that we have available to use for exploration or other activities, and adversely affect our financial position. If we are unable
to fully remedy an environmental problem, we might be required to suspend operations or to enter into interim compliance measures
pending the completion of the required remedy. If a decision is made to mine our properties and we retain any operational responsibility
for doing so, our potential exposure for remediation may be significant, and this may have a material adverse effect upon our business
and financial position. We have not purchased insurance for potential environmental risks (including potential liability for pollution
or other hazards associated with the disposal of waste products from our exploration activities) and such insurance may not be
available to us on reasonable terms or at a reasonable price. All of our exploration and, if warranted, development activities
may be subject to regulation under one or more local, state and federal environmental impact analyses and public review processes.
It is possible that future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation
could have significant impact on some portion of our business, which may require our business to be economically re-evaluated from
time to time. These risks include, but are not limited to, the risk that regulatory authorities may increase bonding requirements
beyond our financial capability. Inasmuch as posting of bonding in accordance with regulatory determinations is a condition to
the right to operate under all material operating permits, increases in bonding requirements could prevent operations even if we
are in full compliance with all substantive environmental laws. We have been required to post a substantial bond under various
laws relating to mining and the environment and may in the future be required to post a larger bond to pursue additional activities.
For example, we must provide BLM and the Nevada Division of Environmental Protection Bureau of Mining Regulation and Reclamation
(“NDEP”) additional financial assurance (reclamation bonds) to guarantee reclamation of any new surface disturbance
required for drill roads, drill sites, or mine expansion. In March 2015, we increased the amount of our reclamation bond with BLM
and the NDEP to approximately $5.6 million, which is currently approximately $108,000 in excess of the current coverage requirement,
to reclaim land disturbed in our exploration and mining operations. Approximately $5.5 million of our reclamation bond covers both
exploration and mining at the Relief Canyon Mine property, including the three open-pit mines and associated waste rock disposal
areas, the mineral processing facilities, ancillary facilities, and the exploration roads and drill pads, and approximately $12,500
covers exploration on the Relief Canyon expansion properties. The remaining $108,000 of financial assurance can be used to satisfy,
or partially satisfy, future bonding requirements for exploration or mining. Our preliminary estimate of the likely amount of additional
financial assurance for future exploration is approximately $100,000, although we expect periodic increases due to effects of inflation.
Our preliminary estimate of the likely amount of additional financial assurance to recommence mining operations is $600,000, which
may increase as our mining plans are finalized and reviewed by the applicable agencies.
The government licenses and permits
which we need to explore on our property may take too long to acquire or cost too much to enable us to proceed with exploration.
In the event that we conclude that the Relief Canyon Mine deposit can be profitably mined, or discover other commercially exploitable
deposits, we may face substantial delays and costs associated with securing the additional government licenses and permits that
could preclude our ability to develop the mine. For example, we seek to amend the permits for our existing gold processing facility,
which may be delayed.
Exploration activities
usually require the granting of permits from various governmental agencies. For example, exploration drilling on unpatented mining
claims requires a permit to be obtained from the BLM, which may take several months or longer to grant the requested permit. Depending
on the size, location and scope of the exploration program, additional permits may also be required before exploration activities
can be undertaken. Prehistoric or Indian graves, threatened or endangered species, archeological sites or the possibility thereof,
difficult access, excessive dust and important nearby water resources may all result in the need for additional permits before
exploration activities can commence.
In addition, we plan
to seek amendments to our permits for our Relief Canyon gold processing facility to add a gold recovery (stripping) system to the
facility. If we conclude that the Relief Canyon deposit can be profitably mined, we would seek amendments to the BLM Plan of Operations
and the NDEP reclamation permit to increase the size of the Relief Canyon open pit-mines and waste rock storage areas. If the minable
material exceeds 21 million tons, the current capacity of the leach pad, we would also need to seek an amendment of the processing
facility to expand the capacity of the leach pad and ponds to accommodate additional material. If there are delays in obtaining
the permit to add the gold recovery system, we would sell gold-loaded carbon to another facility that would recover/strip the gold.
We estimate the annual cost of holding these permits will be approximately $35,000, and the cost to amend these permits to authorize
potential future mining including mining beneath the water table will total about $1.2 million, which is based on preliminary estimates
and may increase as our mining plans are finalized. As with all permitting processes, there is substantial uncertainty about when
and if the permits will be issued. There is the risk that unexpected delays and excessive costs may be experienced in obtaining
required permits. The needed permits may not be granted or could be challenged by third parties, which could result in protracted
litigation that could cause substantial delays, or may be granted in an unacceptable timeframe or cost too much. Additionally,
proposed mineral exploration and mining projects can become controversial and be opposed by nearby landowners and communities,
which can substantially delay and interfere with the permitting process. Delays in or inability to obtain necessary permits would
result in unanticipated costs, which may result in serious adverse effects upon our business.
The value of our property and any
other deposits we may seek or locate is subject to volatility in the price of gold.
Our ability to obtain
additional and continuing funding, and our profitability if and when we commence mining or sell our rights to mine, will be significantly
affected by changes in the market price of gold and other mineral deposits. Gold and other minerals prices fluctuate widely and
are affected by numerous factors, all of which are beyond our control. The price of gold may be influenced by:
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fluctuation in the supply of, demand and market price for gold;
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mining activities of our competitors;
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sale or purchase of gold by central banks and for investment purposes by individuals and financial institutions;
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currency exchange rates;
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inflation or deflation;
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fluctuation in the value of the United States dollar and other currencies;
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global and regional supply and demand, including investment, industrial and jewelry demand; and
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political and economic conditions of major gold or other mineral-producing countries.
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The price of gold and
other minerals have fluctuated widely in recent years, and a decline in the price of gold or other minerals could cause a significant
decrease in the value of our property, limit our ability to raise money, and render continued exploration and development of our
property impracticable. If that happens, then we could lose our rights to our property or be compelled to sell some or all of these
rights. Additionally, the future development of our mining properties beyond the exploration stage is heavily dependent upon gold
prices remaining sufficiently high to make the development of our property economically viable.
Our property title may be challenged.
We are not insured against any challenges, impairments or defects to our mining claims or title to our other properties.
Our property is comprised
primarily of unpatented lode mining claims and millsites located and maintained in accordance with the federal General Mining Law
of 1872. Unpatented lode mining claims and millsites are unique U.S. property interests and are generally considered to be subject
to greater title risk than other real property interests because the validity of unpatented mining claims and millsites is often
uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations with which the owner of
an unpatented mining claim or millsite must comply in order to locate and maintain a valid claim. Moreover, if we discover mineralization
that is close to the claim boundaries, it is possible that some or all of the mineralization may occur outside the boundaries on
lands that we do not control. In such a case we would not have the right to extract those minerals. We do not have title reports
or opinions covering all of our Relief Canyon properties. The uncertainty resulting from not having title opinions for all of our
Relief Canyon properties or having detailed claim surveys on all of our properties leaves us exposed to potential title defects.
Defending challenges to our property title would be costly, and may divert funds that could otherwise be used for exploration activities
and other purposes.
In addition, unpatented
lode mining claims and millsites are always subject to possible challenges by third parties or contests by the federal government,
which, if successful, may prevent us from exploiting any discovery of commercially extractable gold. Challenges to our title may
increase our costs of operation or limit our ability to explore on certain portions of our property. We are not insured against
challenges, impairments or defects to our property title.
Possible amendments to the General
Mining Law could make it more difficult or impossible for us to execute our business plan.
In recent years, the
U.S. Congress has considered a number of proposed amendments to the General Mining Law, as well as legislation that would make
comprehensive changes to the law. Although no such legislation has been adopted to date, there can be no assurance that such legislation
will not be adopted in the future. If adopted, such legislation, if it includes concepts that have been part of previous legislative
proposals, could, among other things, (i) adopt the limitation on the number of millsites that a claimant may use, discussed
below, (ii) impose time limits on the effectiveness of plans of operation that may not coincide with mine life, (iii) impose
more stringent environmental compliance and reclamation requirements on activities on unpatented mining claims and millsites, (iv) establish
a mechanism that would allow states, localities and Native American tribes to petition for the withdrawal of identified tracts
of federal land from the operation of the General Mining Law, (v) allow for administrative determinations that mining would
not be allowed in situations where undue degradation of the federal lands in question could not be prevented, (vi) impose
royalties on gold and other mineral production from unpatented mining claims or impose fees on production from patented mining
claims, and (vii) impose a fee on the amount of material displaced at a mine. Further, it could have an adverse impact on earnings
from our operations, could reduce estimates of any reserves we may establish and could curtail our future exploration and development
activity on our unpatented claims.
Our ability to conduct
exploration, development, mining and related activities may also be impacted by administrative actions taken by federal agencies.
With respect to unpatented millsites, for example, the ability to use millsites and their validity has been subject to greater
uncertainty since 1997. In November of 1997, the Secretary of the Interior (appointed by President Clinton) approved a Solicitor’s
Opinion that concluded that the General Mining Law imposed a limitation that only a single five-acre millsite may be claimed or
used in connection with each associated and valid unpatented or patented lode mining claim. Subsequently, however, on November 7,
2003, the new Secretary of the Interior (appointed by President Bush) approved an Opinion by the Deputy Solicitor which concluded
that the mining laws do not impose a limitation that only a single five-acre millsite may be claimed in connection with each associated
unpatented or patented lode mining claim. Current federal regulations do not include the millsite limitation. There can be no assurance,
however, that the Department of the Interior will not seek to re-impose the millsite limitation at some point in the future.
In addition, a consortium
of environmental groups has filed a lawsuit in the United District Court for the District of Columbia against the Department of
the Interior, the Department of Agriculture, the BLM, and the USFS, asking the court to order the BLM and USFS to adopt the five-acre
millsite limitation. That lawsuit also asks the court to order the BLM and the USFS to require mining claimants to pay fair market
value for their use of the surface of federal lands where those claimants have not demonstrated the validity of their unpatented
mining claims and millsites. If the plaintiffs in that lawsuit were to prevail, that could have an adverse impact on our ability
to use our unpatented millsites for facilities ancillary to our exploration, development and mining activities, and could significantly
increase the cost of using federal lands at our properties for such ancillary facilities.
Market forces or unforeseen developments
may prevent us from obtaining the supplies and equipment necessary to explore for gold and other minerals.
Gold exploration, and
mineral exploration in general, is a very competitive business. Competitive demands for contractors and unforeseen shortages of
supplies and/or equipment could result in the disruption of our planned exploration activities. Current demand for exploration
drilling services, equipment and supplies is robust and could result in suitable equipment and skilled manpower being unavailable
at scheduled times for our exploration program. Fuel prices are extremely volatile as well. We will attempt to locate suitable
equipment, materials, manpower and fuel if sufficient funds are available. If we cannot find the equipment and supplies needed
for our various exploration programs, we may have to suspend some or all of them until equipment, supplies, funds and/or skilled
manpower become available. Any such disruption in our activities may adversely affect our exploration activities and financial
condition.
Our directors and executive officers
lack significant experience or technical training in exploring for precious and base metal deposits and in developing mines.
Most of our directors
and executive officers lack significant experience or technical training in exploring for precious and base metal deposits and
in developing mines. Accordingly, although our Senior Vice President has significant experience and expertise in environmental
permitting and regulatory matters for developing and operating mines and our Chief Operating Officer has significant experience
with mine operations, our management may not be fully aware of many of the other specific requirements related to working within
this industry. Their decisions and choices may not take into account standard engineering or managerial approaches that mineral
exploration companies commonly use. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable
harm due to some of our management’s lack of experience in the mining industry.
We may not be able to maintain the
infrastructure necessary to conduct exploration activities.
Our exploration activities
depend upon adequate infrastructure. Reliable roads, bridges, power sources and water supply are important factors that affect
capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance
or provision of such infrastructure could adversely affect our exploration activities and financial condition.
Our exploration activities may be
adversely affected by the local climate or seismic events, which could prevent us from gaining access to our property year-round.
Earthquakes, heavy
rains, snowstorms, and floods could result in serious damage to or the destruction of facilities, equipment or means of access
to our property, or may otherwise prevent us from conducting exploration activities on our property. There may be short periods
of time when the unpaved portion of the access road is impassible in the event of extreme weather conditions or unusually muddy
conditions. During these periods, it may be difficult or impossible for us to access our property, make repairs, or otherwise conduct
exploration activities on them.
Risks Relating to Our Organization and
Common Stock
We have relied on certain stockholders to provide significant
investment capital to fund our operations.
We have in the past
relied on cash infusions primarily from Frost Gamma Investments Trust (“Frost Gamma”) and one of the Company’s
directors, Barry Honig. During the year ended December 31, 2012, Frost Gamma provided approximately $4.6 million in consideration
for the issuance of certain of our securities. In the year ended December 31, 2013, Mr. Honig provided approximately
$5.6 million to us in consideration for the issuance of shares of the Company’s Series E Preferred Stock. Additionally,
Mr. Honig and Frost Gamma provided approximately $1.9 million and $150,000, respectively, to us in consideration for the issuance
of shares of common stock and warrants to purchase shares of common stock in July 2014 private placements. Mr. Honig invested
$150,000 in a private placement of our common stock in October 2014, $2.5 million in an April 2015 private placement, and $1.25
million in a February 2016 private placement. Donald Smith invested $6.0 million in a March 2016 private placement. Curtailment
of cash investments by significant investors could detrimentally impact our cash availability and our ability to fund our operations.
Our principal stockholders, officers
and directors own a substantial interest in our voting securities, and investors may have limited voice in our management.
Our principal stockholders,
Barry Honig, Donald Smith, and Levon Resources Ltd. (“Levon Resources”), as well as our officers and directors, own,
in the aggregate, in excess of approximately 51.2% of our voting securities, including shares of common stock issuable upon the
conversion of our Series E preferred stock. As of June 3, 2016, Mr. Honig, who is a director, owned 8,348,763, or approximately
28.9%, of our voting securities, Mr. Smith owned 3,350,000, or approximately 11.6%, of our voting securities, and Levon Resources
owned 1,954,366, or approximately 6.8%, of our voting securities. As of that date, our officers and directors, including Mr. Honig,
owned 9,505,787, or approximately 32.8%, of our voting securities. Additionally, the holdings of our officers and directors may
increase in the future upon exercise of options, warrants or convertible securities they may hold or be granted in the future or
if they otherwise acquire additional shares of our common stock, including through grants under our employee benefit plans.
As a result of their
ownership and positions, our principal stockholder, directors and executive officers collectively may be able to influence all
matters requiring stockholder approval, including the following matters:
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election of our directors;
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amendment of our articles of incorporation or bylaws; and
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effecting or preventing a merger, sale of assets or other corporate transaction.
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In addition, their
stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the
Company, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
We are subject to the information
and reporting requirements of the Securities and Exchange Act of 1934, as amended (the “
Exchange Act
”), and
other federal securities laws, as well as the listing rules of the Nasdaq stock market.
The costs of preparing
and filing annual and quarterly reports and other information with the Securities and Exchange Commission and furnishing audited
reports to stockholders will cause our expenses to be higher than they would have been if we were privately held. These costs for
the years ended December 31, 2014 and December 31, 2015 were approximately $900,000 and $950,000 respectively. We estimate
that these costs will be approximately $950,000 for the year ending 2016.
It may be time consuming,
difficult and costly for us to develop, implement and maintain the internal controls and reporting procedures required by the Sarbanes-Oxley
Act of 2002 (the “
Sarbanes-Oxley Act
”). We may need to hire additional financial reporting, internal controls
and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.
If we fail to establish and maintain
an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any
inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading
price of our common stock and our ability to file registration statements pursuant to registration rights agreements and other
commitments.
Effective internal
control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports
or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed,
and our business and reputation with investors may be harmed. As a result of our small size, any current internal control deficiencies
may adversely affect our financial condition, results of operation and access to capital. Although as of December 31, 2015,
management has concluded that our internal control over financial reporting is effective, there can be no assurance that our internal
control over financial reporting will remain effective.
Public company compliance may make
it more difficult to attract and retain officers and directors.
The Sarbanes-Oxley
Act and rules implemented by the Securities and Exchange Commission have required changes in corporate governance practices
of public companies. As a public company, our compliance costs increased in 2015 and we expect these rules and regulations
to further increase our compliance costs and to make certain activities more time consuming and costly. As a public company, we
also expect that these rules and regulations may make it more difficult and expensive for us to obtain director and officer
liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to
obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve
on our board of directors or as executive officers, and to maintain insurance at reasonable rates, or at all.
Our stock price may be volatile.
The market price of
our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which
are beyond our control, including the following:
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results of our operations and exploration efforts;
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fluctuation in the supply of, demand and market price for gold;
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our ability to obtain working capital financing;
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additions or departures of key personnel;
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limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;
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our ability to execute our business plan;
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sales of our common stock and decline in demand for our common stock;
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regulatory developments;
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economic and other external factors;
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investor perception of our industry or our prospects; and
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period-to-period fluctuations in our financial results.
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In addition, the securities
markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance
of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
As a result, you may be unable to resell your shares at a desired price.
Volatility in the price of our common
stock may subject us to securities litigation.
As discussed above,
the market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect
that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs
have often initiated securities class action litigation against a company following periods of volatility in the market price of
its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs
and liabilities and could divert management's attention and resources.
We have not paid cash dividends in
the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.
We have never paid
cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common
stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board
of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your
investment will only occur if our stock price appreciates.
There is currently a limited trading
market for our common stock and we cannot ensure that one will ever develop or be sustained.
Although the Company’s
common stock is currently quoted on the Nasdaq Global Market, there is limited trading activity. The Company can give
no assurance that an active market will develop, or if developed, that it will be sustained. If an investor acquires
shares of the Company’s common stock, the investor may not be able to liquidate the Company’s shares should there be
a need or desire to do so. Only a small percentage of our common stock is available to be traded and is held by a small number
of holders and the price, if traded, may not reflect our actual or perceived value. There can be no assurance that there will be
an active market for our shares of common stock either now or in the future. The market liquidity of our common stock is limited
and may be dependent on the market perception of our business, among other things. We may, in the future, take certain steps, including
utilizing investor awareness campaigns, press releases, road shows and conferences to increase awareness of our business and any
steps that we might take to bring us to the awareness of investors may require we compensate consultants with cash and/or stock.
There can be no assurance that there will be any awareness generated or the results of any efforts will result in any impact on
our trading volume. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects
the value of the business and trading may be at an inflated price relative to the performance of our Company due to, among other
things, availability of sellers of our shares. If a market should develop, the price may be highly volatile. Because there may
be a low price for our shares of common stock, many brokerage firms or clearing firms may not be willing to effect transactions
in the securities or accept our shares for deposit in an account. Even if an investor finds a broker willing to effect a transaction
in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling
costs may exceed the selling price. Further, many lending institutions will not permit the use of low priced shares of common stock
as collateral for any loans.
Offers or availability for sale of
a substantial number of shares of our common stock may cause the price of our common stock to decline.
If our stockholders
sell substantial amounts of our common stock in the public market or upon the expiration of any statutory holding period, under
Rule 144, or upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as
an “overhang” in anticipation of which the market price of our common stock could decline. The existence of an overhang,
whether or not sales have occurred or are occurring, also could make it more difficult for us to raise additional financing through
the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
Conversion of preferred stock and exercise of options
or warrants may result in substantial dilution to existing stockholders.
Conversions of our
Series E Preferred Stock presently owned by our principal shareholders and others and exercise of options and warrants would
have a dilutive effect on our common stock. As of June 3, 2016, we have reserved (i) 2,825,007 shares of our common stock
that are issuable upon conversion of our Series E Preferred Stock at a conversion rate of one share of Series E Preferred
Stock for approximately 304.615 shares of common stock (following an adjustment in the conversion ratio effective February 25,
2016), (ii) 1,802,787 shares of our common stock that are issuable upon exercise of options to purchase our common stock, (iii)
5,057,598 shares of our common stock that are issuable upon exercise of warrants to purchase our common stock, and (iv) 842,770
shares of our common stock that are issuable pursuant to restricted stock units upon vesting and/or upon termination of service
or in connection with a change of control. Further, any additional financing that we secure is likely to require the sale of additional
common stock and the granting of rights, preferences or privileges senior to those of our common stock and will result in additional
dilution of the existing ownership interests of our common stockholders.
Our issuance of additional shares
of common stock or securities convertible into common stock in exchange for services or to repay debt would dilute the proportionate
ownership and voting rights of existing stockholders and could have a negative impact on the market price of our common stock.
Our board of directors
may generally issue shares of common stock or securities convertible into common stock to pay for debt or services, without further
approval by our stockholders based upon such factors that our board of directors may deem relevant at that time. We have, in the
past, issued securities for debt to reduce our obligations. We have also issued securities as payment for services. It is likely
that we will issue additional securities to pay for services and reduce debt in the future. We cannot give you any assurance that
we will not issue additional shares of common stock or securities convertible into common stock under circumstances we may deem
appropriate at the time.
Our articles of incorporation allow
for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect
the rights of the holders of our common stock.
Our board of directors
has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has
the authority to issue preferred stock without further stockholder approval. As a result, our board of directors could authorize
the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the
right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption
of the shares, together with a premium, prior to the redemption of our common stock. In addition, our board of directors could
authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible
into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing
stockholders.
The elimination of monetary liability
against our directors, officers and employees under our articles of incorporation and the existence of indemnification rights to
our directors, officers and employees may result in substantial expenditures by our Company and may discourage lawsuits against
our directors, officers and employees.
Our articles of incorporation
contain provisions which eliminate the liability of our directors for monetary damages to our Company and stockholders. Our bylaws
also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements
with our directors, officers and employees. The foregoing indemnification obligations could result in our Company incurring substantial
expenditures to cover the cost of settlement or damage awards against directors, officers and employees that we may be unable to
recoup. These provisions and resultant costs may also discourage our Company from bringing a lawsuit against directors, officers
and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders
against our directors, officers and employees even though such actions, if successful, might otherwise benefit our Company and
stockholders.
Anti-takeover provisions may impede
the acquisition of our Company.
Certain provisions
of the Nevada General Corporation Law have anti-takeover effects and may inhibit a non-negotiated merger or other business combination.
These provisions are intended to encourage any person interested in acquiring us to negotiate with, and to obtain the approval
of, our board of directors in connection with such a transaction. However, certain of these provisions may discourage a future
acquisition of us, including an acquisition in which the stockholders might otherwise receive a premium for their shares. As a
result, stockholders who might desire to participate in such a transaction may not have the opportunity to do so.
USE
OF PROCEEDS
Unless otherwise indicated in the applicable
prospectus supplement, we intend to use the net proceeds for general corporate purposes, including without limitation, advancing
our Relief Canyon project, working capital and/or capital expenditures.
PLAN
OF DISTRIBUTION
We may offer the securities directly to
one or more purchasers, through agents, or through underwriters or dealers designated from time to time. We may distribute the
securities from time to time in one or more transactions at a fixed price or prices (which may be changed from time to time), at
market prices prevailing at the times of sale, at prices related to these prevailing market prices or at negotiated prices. We
may offer securities in the same offering, or we may offer securities in separate offerings. The applicable prospectus supplement
will describe the terms of the offering of the securities, including:
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the offeror(s) of the securities;
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the terms of the securities to which the prospectus supplement relates;
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the name or names of any underwriters;
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the purchase price of the securities and the proceeds to be received from the sale;
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any underwriting discounts and other items constituting underwriters’ compensation; and
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any discounts or concessions allowed or reallowed or paid to dealers.
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If underwriters are used in the sale, the
securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions
at a fixed public offering price or at varying prices determined at the time of sale. The securities may be either offered to the
public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. The obligations
of the underwriters to purchase securities will be subject to the conditions precedent agreed to by the parties and the underwriters
will be obligated to purchase all the securities of a class or series if any are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
Underwriters or agents may make sales in
privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an “at-the-market”
offering as defined in Rule 415 promulgated under the Securities Act, which includes sales made directly on an existing trading
market for our common shares, or sales made to or through a market maker other than on an exchange.
Securities may be sold directly by our company
or through agents designated by our company from time to time. Any agent involved in the offer or sale of the securities in respect
of which this prospectus is delivered will be named, and any commissions payable by our company to any agent will be set forth,
in the prospectus supplement. Unless otherwise indicated in the prospectus supplement, any agent will be acting on a best efforts
basis for the period of its appointment.
We may authorize agents or underwriters
to solicit offers by eligible institutions to purchase securities from our company at the public offering price set forth in the
prospectus supplement under delayed delivery contracts providing for payment and delivery on a specified date in the future. The
conditions to these contracts and the commissions payable for solicitation of these contracts will be set forth in the applicable
prospectus supplement.
Agents and underwriters may be entitled
to indemnification by our company against some civil liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents or underwriters may be required to make relating to these liabilities. Agents and underwriters
may be customers of, engage in transactions with, or perform services for, our company in the ordinary course of business.
Each class or series of securities other
than the common shares will be a new issue of securities with no established trading market. Any underwriter may make a market
in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice. There
may be limited liquidity in the trading market for any such securities.
DESCRIPTION
OF DEBT SECURITIES
The following description, together with
the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of
the debt securities that we may offer under this prospectus. While the terms we have summarized below will apply generally to any
future debt securities we may offer, we will describe the particular terms of any debt securities that we may offer in more detail
in the applicable prospectus supplement. Because the terms of a specific series of debt securities may vary from the general information
that we have provided below, you should rely on information in the applicable prospectus supplement that varies from any information
below.
We may issue senior notes under a senior
indenture to be entered into among us and a trustee to be named in the senior indenture. We may issue subordinated notes under
a subordinated indenture to be entered into among us and a trustee to be named in the subordinated indenture. We have filed forms
of these documents as exhibits to the registration statement which includes this prospectus. We use the term “indentures”
to refer to both the senior indenture and the subordinated indenture. The indentures will be qualified under the Trust Indenture
Act of 1939 (the “Trust Indenture Act”). We use the term “trustee” to refer to either the senior trustee
or the subordinated trustee, as applicable. We urge you to read the indenture applicable to your investment because the indenture,
and not this section, defines your rights as a holder of debt securities.
The following summaries of material provisions
of senior notes, subordinated notes and the indentures are subject to, and qualified in their entirety by reference to, the provisions
of the indenture applicable to a particular series of debt securities. Except as we may otherwise indicate, the terms of the senior
indenture and the subordinated indenture are identical in all material respects.
General
The senior debt securities will have the
same ranking as all of our other unsecured and unsubordinated debt. The subordinated debt securities will be unsecured and will
be subordinated and junior to all senior indebtedness.
The debt securities may be issued in one
or more separate series of senior debt securities and/or subordinated debt securities. The prospectus supplement relating to the
particular series of debt securities being offered will specify the particular amounts, prices and terms of those debt securities.
These terms may include:
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the title of the debt securities;
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any limit upon the aggregate principal amount of the debt securities;
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the date or dates, or the method of determining the dates, on which the debt securities will mature;
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the interest rate or rates of the debt securities, or the method of determining those rates, the interest payment dates and,
for registered debt securities, the regular record dates;
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if a debt security is issued with original issue discount, the yield to maturity;
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the places where payments may be made on the debt securities;
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any mandatory or optional redemption provisions applicable to the debt securities;
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any sinking fund or analogous provisions applicable to the debt securities;
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whether and on what terms we will pay additional amounts to holders of the debt securities that are not U.S. persons in respect
of any tax, assessment or governmental charge withheld or deducted and, if so, whether and on what terms we will have the option
to redeem the debt securities rather than pay the additional amounts;
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any terms for the attachment to the debt securities of warrants, options or other rights to purchase or sell our securities;
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the portion of the principal amount of the debt security payable upon the acceleration of maturity if other than the entire
principal amount of the debt securities;
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any deletions of, or changes or additions to, the events of default or covenants applicable to the debt securities;
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if other than U.S. dollars, the currency or currencies in which payments of principal, premium and/or interest on the debt
securities will be payable and whether the holder may elect payment to be made in a different currency;
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the method of determining the amount of any payments on the debt securities which are linked to an index;
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whether the debt securities will be issued in fully registered form without coupons or in bearer form, with or without coupons;
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or any combination of these, and whether they will be issued in the form of one or more global securities in temporary or definitive
form;
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whether the debt securities will be convertible or exchangeable into or for common stock, preferred stock or other debt securities
and the conversion price or exchange ratio, the conversion or exchange period and any other conversion or exchange provisions;
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any terms relating to the delivery of the debt securities if they are to be issued upon the exercise of warrants; and
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any other specific terms of the debt securities.
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Unless otherwise specified in the applicable
prospectus supplement, (1) the debt securities will be registered debt securities and (2) debt securities denominated in U.S.
dollars will be issued, in the case of registered debt securities, in denominations of $1,000 or an integral multiple of $1,000
and, in the case of bearer debt securities, in denominations of $5,000. Debt securities may bear legends required by United States
federal tax law and regulations.
If any of the debt securities are sold for
any foreign currency or currency unit or if any payments on the debt securities are payable in any foreign currency or currency
unit, the prospectus supplement will contain any restrictions, elections, tax consequences, specific terms and other information
with respect to the debt securities and the foreign currency or currency unit.
Some of the debt securities may be issued
as original issue discount debt securities. Original issue discount securities bear no interest during all or a part of the time
that these debt securities are outstanding or bear interest at below-market rates and will be sold at a discount below their stated
principal amount at maturity. The prospectus supplement will also contain special tax, accounting or other information relating
to original issue discount securities or relating to other kinds of debt securities that may be offered, including debt securities
linked to an index or payable in currencies other than U.S. dollars.
Exchange, Registration and Transfer
Debt securities may be transferred or exchanged
at the corporate trust office of the security registrar or at any other office or agency maintained by our company for these purposes,
without the payment of any service charge, except for any tax or governmental charges. The senior trustee initially will be the
designated security registrar in the United States for the senior debt securities. The subordinated trustee initially will be the
designated security registrar in the United States for the subordinated debt securities.
If debt securities are issuable as both
registered debt securities and bearer debt securities, the bearer debt securities will be exchangeable for registered debt securities.
Except as provided below, bearer debt securities will have outstanding coupons. If a bearer debt security with related coupons
is surrendered in exchange for a registered debt security between a record date and the date set for the payment of interest, the
bearer debt security will be surrendered without the coupon relating to that interest payment and that payment will be made only
to the holder of the coupon when due.
In the event of any redemption in part of
any class or series of debt securities, we will not be required to:
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issue, register the transfer of, or exchange, debt securities of any series between the opening of business 15 days before
any selection of debt securities of that series to be redeemed and the close of business on:
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if debt securities of the series are issuable only as registered debt securities, the day of mailing of the relevant notice
of redemption, and
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if debt securities of the series are issuable as bearer debt securities, the day of the first publication of the relevant notice
of redemption or, if debt securities of the series are also issuable as registered debt securities and there is no publication,
the day of mailing of the relevant notice of redemption;
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register the transfer of, or exchange, any registered debt security selected for redemption, in whole or in part, except the
unredeemed portion of any registered debt security being redeemed in part; or
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exchange any bearer debt security selected for redemption, except to exchange it for a registered debt security which is simultaneously
surrendered for redemption.
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Payment and Paying Agent
We will pay principal, interest and any
premium on fully registered securities in the designated currency or currency unit at the office of a designated paying agent.
Payment of interest on fully registered securities may be made at our option by check mailed to the persons in whose names the
debt securities are registered on days specified in the indentures or any prospectus supplement.
We will pay principal, interest and any
premium on bearer securities in the designated currency or currency unit at the office of a designated paying agent or agents outside
of the United States. Payments will be made at the offices of the paying agent in the United States only if the designated currency
is U.S. dollars and payment outside of the United States is illegal or effectively precluded. If any amount payable on any debt
security or coupon remains unclaimed at the end of two years after that amount became due and payable, the paying agent will release
any unclaimed amounts to our company, and the holder of the debt security or coupon will look only to our company for payment.
Global Securities
A global security represents one or any
other number of individual debt securities. Generally all debt securities represented by the same global securities will have the
same terms. Each debt security issued in book-entry form will be represented by a global security that we deposit with and register
in the name of a financial institution or its nominee that we select. The financial institution that we select for this purpose
is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, The Depository Trust Company, New
York, New York, known as DTC, will be the depositary for all debt securities that are issued in book-entry form.
A global security may not be transferred
to or registered in the name of anyone other than the depositary or its nominee, unless special termination situations arise. As
a result of these arrangements, the depositary, or its nominee, will be the sole registered holder of all debt securities represented
by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial interests
must be held by means of an account with a broker, bank or other financial institution that in turn has an account either with
the depositary or with another institution that has an account with the depositary. Thus, an investor whose security is represented
by a global security will not be registered holder of the debt security, but an indirect holder of a beneficial interest in the
global security.
Temporary Global Securities
All or any portion of the debt securities
of a series that are issuable as bearer debt securities initially may be represented by one or more temporary global debt securities,
without interest coupons, to be deposited with the depositary for credit to the accounts of the beneficial owners of the debt securities
or to other accounts as they may direct. On and after an exchange date provided in the applicable prospectus supplement, each temporary
global debt security will be exchangeable for definitive debt securities in bearer form, registered form, definitive global bearer
form or any combination of these forms, as specified in the prospectus supplement. No bearer debt security delivered in exchange
for a portion of a temporary global debt security will be mailed or delivered to any location in the United States.
Interest on a temporary global debt security
will be paid to the depositary with respect to the portion held for its account only after they deliver to the trustee a certificate
which states that the portion:
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is not beneficially owned by a United States person;
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has not been acquired by or on behalf of a United States person or for offer to resell or for resale to a United States person
or any person inside the United States; or
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if a beneficial interest has been acquired by a United States person, that the person is a financial institution, as defined
in the Internal Revenue Code, purchasing for its own account or has acquired the debt security through a financial institution
and that the debt securities are held by a financial institution that has agreed in writing to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code and the regulations to the Internal Revenue Code and
that it did not purchase for resale inside the United States.
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The certificate must be based on statements
provided by the beneficial owners of interests in the temporary global debt security. The depositary will credit the interest received
by it to the accounts of the beneficial owners of the debt security or to other accounts as they may direct.
“United States person” means
a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws
of the United States or an estate or trust with income subject to United States federal income taxation regardless of its source.
Definitive Global Securities
Bearer Securities.
The applicable
prospectus supplement will describe the exchange provisions, if any, of debt securities issuable in definitive global bearer form.
We will not deliver any bearer debt securities delivered in exchange for a portion of a definitive global debt security to any
location in the United States.
U.S. Book-Entry Securities.
Debt
securities of a series represented by a definitive global registered debt security and deposited with or on behalf of a depositary
in the United States will be represented by a definitive global debt security registered in the name of the depositary or its nominee.
Upon the issuance of a global debt security and the deposit of the global debt security with the depositary, the depositary will
credit, on its book-entry registration and transfer system, the respective principal amounts represented by that global debt security
to the accounts of participating institutions that have accounts with the depositary or its nominee. The accounts to be credited
shall be designated by the underwriters or agents for the sale of U.S. book-entry debt securities or by us, if these debt securities
are offered and sold directly by us.
Ownership of U.S. book-entry debt securities
will be limited to participants or persons that may hold interests through participants. In addition, ownership of U.S. book-entry
debt securities will be evidenced only by, and the transfer of that ownership will be effected only through, records maintained
by the depositary or its nominee for the definitive global debt security or by participants or persons that hold through participants.
So long as the depositary or its nominee
is the registered owner of a global debt security, that depositary or nominee, as the case may be, will be considered the sole
owner or holder of the U.S. book-entry debt securities represented by that global debt security for all purposes under the indenture.
Payment of principal of, and premium and interest, if any, on, U.S. book-entry debt securities will be made to the depositary or
its nominee as the registered owner or the holder of the global debt security representing the U.S. book-entry debt securities.
Owners of U.S. book-entry debt securities:
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will not be entitled to have the debt securities registered in their names;
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will not be entitled to receive physical delivery of the debt securities in definitive form; and
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will not be considered the owners or holders of the debt securities under the indenture.
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The laws of some jurisdictions require that
purchasers of securities take physical delivery of securities in definitive form. These laws impair the ability to purchase or
transfer U.S. book-entry debt securities.
We expect that the depositary for U.S. book-entry
debt securities of a series, upon receipt of any payment of principal of, or premium or interest, if any, on, the related definitive
global debt security, will immediately credit participants’ accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of the global debt security as shown on the records of the depositary. We also expect
that payments by participants to owners of beneficial interests in a global debt security held through those participants will
be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in “street name,” and will be the responsibility of those participants.
Consolidation, Merger, Sale or Conveyance
We may, without the consent of the holders
of the debt securities, merge into or consolidate with any other person, or convey or transfer all or substantially all of our
company’s properties and assets to another person provided that:
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the successor assumes on the same terms and conditions all the obligations under the debt securities and the indentures; and
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immediately after giving effect to the transaction, there is no default under the applicable indenture.
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The remaining or acquiring person will be
substituted for our company in the indentures with the same effect as if it had been an original party to the indenture. A prospectus
supplement will describe any other limitations on the ability of our company to merge into, consolidate with, or convey or transfer
all or substantially all or our properties and assets to, another person.
Satisfaction and Discharge; Defeasance
We may be discharged from our obligations
on the debt securities of any class or series that have matured or will mature or be redeemed within one year if we deposit with
the trustee enough cash and/or U.S. government obligations or foreign government securities, as the case may be, to pay all the
principal, interest and any premium due to the stated maturity or redemption date of the debt securities and comply with the other
conditions set forth in the applicable indenture. The principal conditions that we must satisfy to discharge our obligations on
any debt securities are (1) pay all other sums payable with respect to the applicable series of debt securities and (2) deliver
to the trustee an officers’ certificate and an opinion of counsel which state that the required conditions have been satisfied.
Each indenture contains a provision that
permits us to elect to be discharged from all of our obligations with respect to any class or series of debt securities then outstanding.
However, even if we effect a legal defeasance, some of our obligations will continue, including obligations to:
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maintain and apply money in the defeasance trust,
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register the transfer or exchange of the debt securities,
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replace mutilated, destroyed, lost or stolen debt securities, and
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maintain a registrar and paying agent in respect of the debt securities.
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Each indenture also permits us to elect
to be released from our obligations under specified covenants and from the consequences of an event of default resulting from a
breach of those covenants. To make either of the above elections, we must deposit in trust with the trustee cash and/or U.S. government
obligations, if the debt securities are denominated in U.S. dollars, and/or foreign government securities if the debt securities
are denominated in a foreign currency, which through the payment of principal and interest under their terms will provide sufficient
amounts, without reinvestment, to repay in full those debt securities. As a condition to legal defeasance or covenant defeasance,
we must deliver to the trustee an opinion of counsel that the holders of the debt securities will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of the deposit and defeasance and will be subject to U.S. federal income
tax in the same amount and in the same manner and times as would have been the case if the deposit and defeasance had not occurred.
In the case of a legal defeasance only, the opinion of counsel must be based on a ruling of the U.S. Internal Revenue Service or
other change in applicable U.S. federal income tax law.
The indentures specify the types of U.S.
government obligations and foreign government securities that we may deposit.
Events of Default, Notice and Waiver
Each indenture defines an event of default
with respect to any class or series of debt securities as one or more of the following events:
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failure to pay interest on any debt security of the class or series for 30 days when due;
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failure to pay the principal or any premium on any debt securities of the class or series when due;
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failure to make any sinking fund payment for 30 days when due;
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failure to perform any other covenant in the debt securities of the series or in the applicable indenture with respect to debt
securities of the series for 90 days after being given notice; and
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occurrence of an event of bankruptcy, insolvency or reorganization set forth in the indenture.
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An event of default for a particular class
or series of debt securities does not necessarily constitute an event of default for any other class or series of debt securities
issued under an indenture.
In the case of an event of default arising
from events of bankruptcy or insolvency set forth in the indenture, all outstanding debt securities will become due and payable
immediately without further action or notice. If any other event of default as to a series of debt securities occurs and is continuing,
the trustee or the holders of at least 25% in principal amount of the then outstanding debt securities of that series may declare
all the debt securities to be due and payable immediately.
The holders of a majority in aggregate principal
amount of the debt securities then outstanding by notice to the trustee may on behalf of the holders of all of the debt securities
of that series waive any existing default or event of default and its consequences under the applicable indenture except a continuing
default or event of default in the payment of interest on, or the principal of, the debt securities of that series.
Each indenture requires the trustee to,
within 90 days after the occurrence of a default known to it with respect to any outstanding series of debt securities, give
the holders of that class or series notice of the default if uncured or not waived. However, the trustee may withhold this notice
if it determines in good faith that the withholding of this notice is in the interest of those holders, except that the trustee
may not withhold this notice in the case of a payment default. The term “default” for the purpose of this provision
means any event that is, or after notice or lapse of time or both would become, an event of default with respect to debt securities
of that series.
Other than the duty to act with the required
standard of care during an event of default, a trustee is not obligated to exercise any of its rights or powers under the applicable
indenture at the request or direction of any of the holders of debt securities, unless the holders have offered to the trustee
reasonable security and indemnity. Each indenture provides that the holders of a majority in principal amount of outstanding debt
securities of any series may direct the time, method and place of conducting any proceeding for any remedy available to the trustee,
or exercising any trust or other power conferred on the trustee if the direction would not conflict with any rule of law or with
the indenture. However, the trustee may take any other action that it deems proper which is not inconsistent with any direction
and may decline to follow any direction if it in good faith determines that the directed action would involve it in personal liability.
Each indenture includes a covenant that
we will file annually with the trustee a certificate of no default, or specifying any default that exists.
Modification of the Indentures
We and the applicable trustee may modify
an indenture without the consent of the holders for limited purposes, including adding to our covenants or events of default, establishing
forms or terms of debt securities, curing ambiguities and other purposes which do not adversely affect the holders in any material
respect.
We and the applicable trustee may make modifications
and amendments to an indenture with the consent of the holders of a majority in principal amount of the outstanding debt securities
of all affected series. However, without the consent of each affected holder, no modification may:
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change the stated maturity of any debt security;
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reduce the principal, premium, if any, or rate of interest on any debt security;
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change any place of payment or the currency in which any debt security is payable;
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impair the right to enforce any payment after the stated maturity or redemption date;
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adversely affect the terms of any conversion right;
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reduce the percentage of holders of outstanding debt securities of any series required to consent to any modification, amendment
or waiver under the indenture;
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change any of our obligations, with respect to outstanding debt securities of a series, to maintain an office or agency in
the places and for the purposes specified in the indenture for the series; or
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change the provisions in the indenture that relate to its modification or amendment other than to increase the percentage of
outstanding debt securities of any series required to consent to any modification or waiver under the indenture.
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Meetings
The indentures will contain provisions for
convening meetings of the holders of debt securities of a series. A meeting may be called at any time by the trustee and also,
upon request, by our company or the holders of at least 25% in principal amount of the outstanding debt securities of a series,
in any case upon notice given in accordance with “Notices” below. Persons holding a majority in principal amount of
the outstanding debt securities of a series will constitute a quorum at a meeting. A meeting called by our company or the trustee
that does not have a quorum may be adjourned for not less than 10 days. If there is not a quorum at the adjourned meeting,
the meeting may be further adjourned for not less than 10 days. Any resolution presented at a meeting at which a quorum is
present may be adopted by the affirmative vote of the holders of a majority in principal amount of the outstanding debt securities
of that series, except for any consent which must be given by the holders of each debt security affected by the modifications or
amendments of an indenture described above under “Modification of the Indentures.” However, a resolution with respect
to any request, demand, authorization, direction, notice, consent, waiver, or other action which may be made, given, or taken by
the holders of a specified percentage, which is equal to or less than a majority, in principal amount of outstanding debt securities
of a series may be adopted at a meeting at which a quorum is present by the affirmative vote of the holders of the specified percentage
in principal amount of the outstanding debt securities of that series. Any resolution passed or decision taken at any meeting of
holders of debt securities of any series duly held in accordance with an indenture will be binding on all holders of debt securities
of that series and the related coupons. The indentures will provide that specified consents, waivers and other actions may be given
by the holders of a specified percentage of outstanding debt securities of all series affected by the modification or amendment,
acting as one class. For purposes of these consents, waivers and actions, only the principal amount of outstanding debt securities
of any series represented at a meeting at which a quorum is present and voting in favor of the action will be counted for purposes
of calculating the aggregate principal amount of outstanding debt securities of all series affected by the modification or amendment
favoring the action.
Notices
In most instances, notices to holders of
bearer debt securities will be given by publication at least once in a daily newspaper in New York, New York and in London, England
and in other cities as may be specified in the bearer debt securities and will be mailed to those persons whose names and addresses
were previously filed with the applicable trustee, within the time prescribed for the giving of the notice. Notice to holders of
registered debt securities will be given by mail to the addresses of those holders as they appear in the security register.
Title
Title to any bearer debt securities and
any related coupons will pass by delivery. We, the trustee, and any agent of ours or the trustee may treat the holder of any bearer
debt security or related coupon and, prior to due presentment for registration of transfer, the registered owner of any registered
debt security as the absolute owner of that debt security for the purpose of making payment and for all other purposes, regardless
of whether or not that debt security or coupon shall be overdue and notwithstanding any notice to the contrary.
Replacement of Securities Coupons
Debt securities or coupons that have been
mutilated will be replaced by us at the expense of the holder upon surrender of the mutilated debt security or coupon to the security
registrar. Debt securities or coupons that become destroyed, stolen, or lost will be replaced by us at the expense of the holder
upon delivery to the security registrar of evidence of its destruction, loss, or theft satisfactory to our company and the security
registrar. In the case of a destroyed, lost, or stolen debt security or coupon, the holder of the debt security or coupon may be
required to provide reasonable security or indemnity to the trustee and our company before a replacement debt security will be
issued.
Governing Law
The indentures, the debt securities and
the coupons will be governed by, and construed under, the laws of the State of New York.
Concerning the Trustees
We may from time to time maintain lines
of credit, and have other customary banking relationships, with any of the trustees.
Senior Debt Securities
The senior debt securities will rank equally
with all of our company’s other unsecured and non-subordinated debt.
Certain Covenants in the Senior Indenture
The prospectus supplement relating to a
series of senior debt securities will describe any material covenants in respect of that series of senior debt securities.
Subordinated Debt Securities
The subordinated debt securities will be
unsecured. The subordinated debt securities will be subordinate in right of payment to all senior indebtedness. In addition, claims
of creditors generally will have priority with respect to the assets and earnings of our subsidiaries over the claims of our creditors,
including holders of the subordinated debt securities, even though those obligations may not constitute senior indebtedness. The
subordinated debt securities, therefore, will be effectively subordinated to creditors, including trade creditors with regard to
the assets of our subsidiaries. Creditors of our subsidiaries include trade creditors, secured creditors and creditors holding
guarantees issued by our subsidiaries.
Unless otherwise specified in a prospectus
supplement, senior indebtedness shall mean the principal of, premium, if any, and interest on, all indebtedness for money borrowed
by our company and any deferrals, renewals, or extensions of any senior indebtedness. Indebtedness for money borrowed by our company
includes all indebtedness of another person for money borrowed that we guarantee, other than the subordinated debt securities,
whether outstanding on the date of execution of the subordinated indenture or created, assumed or incurred after the date of the
subordinated indenture. However, senior indebtedness will not include any indebtedness that expressly states to have the same rank
as the subordinated debt securities or to rank junior to the subordinated debt securities. Senior indebtedness will also not include:
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any of our obligations to our subsidiaries; and
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any liability for federal, state, local or other taxes owed or owing by our company.
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The senior debt securities constitute senior
indebtedness under the subordinated indenture. A prospectus supplement will describe the relative ranking among different series
of subordinated debt securities.
Unless otherwise specified in a prospectus
supplement, we may not make any payment on the subordinated debt securities and may not purchase, redeem, or retire any subordinated
debt securities if any senior indebtedness is not paid when due or the maturity of any senior indebtedness is accelerated as a
result of a default, unless the default has been cured or waived and the acceleration has been rescinded or the senior indebtedness
has been paid in full. We may, however, pay the subordinated debt securities without regard to these limitations if the subordinated
trustee and our company receive written notice approving the payment from the representatives of the holders of senior indebtedness
with respect to which either of the events set forth above has occurred and is continuing. Unless otherwise specified in a prospectus
supplement, during the continuance of any default with respect to any designated senior indebtedness under which its maturity may
be accelerated immediately without further notice or the expiration of any applicable grace periods, we may not pay the subordinated
debt securities for 90 days after the receipt by the subordinated trustee of written notice of a default from the representatives
of the holders of designated senior indebtedness. If the holders of designated senior indebtedness or the representatives of those
holders have not accelerated the maturity of the designated senior indebtedness at the end of the 90 day period, we may resume
payments on the subordinated debt securities. Only one notice may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to designated senior indebtedness during that period.
In the event that we pay or distribute our
company’s assets to creditors upon a total or partial liquidation, dissolution or reorganization of our company or our company’s
property, the holders of senior indebtedness will be entitled to receive payment in full of the senior indebtedness before the
holders of subordinated debt securities are entitled to receive any payment. Until the senior indebtedness is paid in full, any
payment or distribution to which holders of subordinated debt securities would be entitled but for the subordination provisions
of the subordinated indenture will be made to holders of the senior indebtedness as their interests may appear. However, holders
of subordinated debt securities will be permitted to receive distributions of shares and debt securities subordinated to the senior
indebtedness. If a distribution is made to holders of subordinated debt securities that, due to the subordination provisions, should
not have been made to them, the holders of subordinated debt securities are required to hold it in trust for the holders of senior
indebtedness, and pay it over to them as their interests may appear.
If payment of the subordinated debt securities
is accelerated because of an event of default, either we or the subordinated trustee will promptly notify the holders of senior
indebtedness or the representatives of the holders of the acceleration. We may not pay the subordinated debt securities until five
business days after the holders or the representatives of the senior indebtedness receive notice of the acceleration. Afterwards,
we may pay the subordinated debt securities only if the subordination provisions of the subordinated indenture otherwise permit
payment at that time.
As a result of the subordination provisions
contained in the subordinated indenture, in the event of insolvency, our creditors who are holders of senior indebtedness may recover
more, ratably, than the holders of subordinated debt securities. In addition, our creditors who are not holders of senior indebtedness
may recover less, ratably, than holders of senior indebtedness and may recover more, ratably, than the holders of subordinated
indebtedness.
The prospectus supplement relating to a
series of subordinated debt securities will describe any material covenants in respect of any series of subordinated debt securities.
Conversion or Exchange
We may issue debt securities that we may
convert or exchange into common stock or other securities, property or assets. If so, we will describe the specific terms on which
the debt securities may be converted or exchanged in the applicable prospectus supplement. The conversion or exchange may be mandatory,
at your option, or at our option. The applicable prospectus supplement will describe the manner in which the shares of common stock
or other securities, property or assets you would receive would be issued or delivered.
DESCRIPTION
OF COMMON STOCK
We are authorized to issue 200,000,000 shares
of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred stock. As of June 3, 2016, we have issued and
outstanding securities:
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26,106,654 shares of common stock (including 256,869 shares of restricted stock granted under our equity incentive plans that
have not yet vested);
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9,274 shares of Series E Convertible Preferred Stock, which are convertible into 2,825,007 shares of common stock;
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Warrants to purchase 5,057,598 shares of common stock;
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Options to purchase 1,802,787 shares of common stock;
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Restricted stock units, which entitle the holders to receive 842,770 shares of common stock upon vesting and upon the satisfaction
of certain specified conditions.
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The holders of our common stock are entitled
to one vote per share. In addition, the holders of our common stock will be entitled to receive ratably such dividends, if any,
as may be declared by our Board of Directors out of legally available funds; however, the current policy of our Board of Directors
is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common
stock will be entitled to share ratably in all assets that are legally available for distribution. The holders of our common stock
will have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our
common stock will be subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock,
which may be designated solely by action of our Board of Directors.
The transfer agent for our common stock
is Action Stock Transfer Corp. located at 2469 E. Fort Union Blvd., Ste 214, Salt Lake City, UT 84121.
DESCRIPTION
OF PREFERRED STOCK
We are authorized to issue up to 50,000,000
shares of preferred stock, par value $0.0001 per share. As of the date of this prospectus, there are 9,274 shares of Series E
Convertible Preferred Stock outstanding. Additional shares of preferred stock are issuable in such series as determined by the
board of directors, who have the authority to determine the relative rights and preferences of each such series without further
action by stockholders.
The issuance of preferred stock could adversely
affect the voting power of holders of our common stock, and the likelihood that preferred holders will receive dividend and liquidation
preferences may have the effect of delaying, deferring or preventing a change in control of the Company, which could depress the
market price of our common stock. Unless otherwise indicated in the prospectus supplement, all shares of preferred stock to be
issued from time to time under this prospectus will be fully paid and nonassessable.
The prospectus supplement relating to the
preferred stock offered will contain a description of the specific terms of that series as fixed by our board of directors, including,
as applicable:
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the number of shares of preferred stock offered and the offering price of the preferred stock;
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the title and stated value of the preferred stock;
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the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation of such rates, periods or dates applicable
to the preferred stock;
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the date from which dividends on the preferred stock will accumulate, if applicable;
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the liquidation rights of the preferred stock;
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the procedures for auction and remarketing, if any, of the preferred stock;
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the sinking fund provisions, if applicable, for the preferred stock;
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the redemption provisions, if applicable, for the preferred stock;
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whether the preferred stock will be convertible into or exchangeable for other securities and, if so, the terms and conditions
of the conversion or exchange, including the conversion price or exchange ratio and the conversion or exchange period (or the method
of determining the same);
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whether the preferred stock will have voting rights and the terms of such voting rights, if any;
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whether the preferred stock will be listed on any securities exchange;
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whether the preferred stock will be issued with any other securities and, if so, the amount and terms of these securities;
and
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any other specific terms, preferences or rights of, or limitations or restrictions on, the preferred stock.
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DESCRIPTION
OF WARRANTS
We may issue warrants for the purchase of
debt securities, common stock, preferred stock or other securities. Warrants may be issued independently or together with debt
securities, common stock, preferred stock or other securities offered by any prospectus supplement and may be attached to or separate
from any such offered securities. Series of warrants may be issued under a separate warrant agreement entered into between us and
a bank or trust company, as warrant agent, all as will be set forth in the prospectus supplement relating to the particular issue
of warrants. The warrant agent would act solely as our agent in connection with the warrants and would not assume any obligation
or relationship of agency or trust for or with any holders of warrants or beneficial owners of warrants.
We currently have issued and outstanding
warrants to purchase 5,057,598 shares of common stock, all currently exercisable, as follows:
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Warrants to purchase 194,445 shares at $7.20 per share, expiring February 23, 2017;
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Warrants to purchase 22,223 shares at $8.10 per share, expiring March 6, 2022;
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Warrants to purchase 746,432 shares at $7.20 per share, expiring on August 1, 2016;
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Warrants to purchase 590,658 shares at $8.10 per share, expiring January 2, 2017;
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Warrants to purchase 104,675 shares at $6.12 per share, expiring January 2, 2017;
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Warrants to purchase 54,710 shares at $8.10 per share, expiring January 14, 2017;
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Warrants to purchase 13,403 shares at $6.12 per share, expiring January 14, 2017;
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Warrants to purchase 151,419 shares at $8.10 per share, expiring January 30, 2017;
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Warrants to purchase 19,048 shares at $6.12 per share, expiring January 30, 2017;
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Warrants to purchase 8,334 shares at $5.40 per share, expiring November 7, 2018;
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Warrants to purchase 660,934 shares at $7.92 per share, expiring April 10, 2017;
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Warrants to purchase 89,164 shares at $5.85 per share, expiring October 10, 2017;
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Warrants to purchase 124,111 shares at $7.92 per share, expiring April 21, 2017;
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Warrants to purchase 31,023 shares at $5.85 per share, expiring October 21, 2017;
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Warrants to purchase 1,060,429 shares at $5.06 per share, expiring August 25, 2018;
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Warrants to purchase 261,590 shares at $5.06 per share, expiring August 25, 2018; and
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Warrants to purchase 925,000 shares at $4.35 per share, expiring September 28, 2018.
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You should refer to the provisions of the
warrant agreement that will be filed with the SEC in connection with the offering of warrants for the complete terms of the warrant
agreement.
Prior to the exercise of any warrants, holders
of such warrants will not have any rights of holders of the securities purchasable upon such exercise, including the right to receive
payments of dividends, or the right to vote such underlying securities.
DESCRIPTION
OF RIGHTS
We may issue rights to purchase debt securities,
preferred stock or common stock. These rights may be issued independently or together with any other security offered hereby and
may or may not be transferable by the stockholder receiving the rights in such offering. In connection with any offering of such
rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters
or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
Each series of rights will be issued under
a separate rights agreement which we will enter into with a bank or trust company, as rights agent, all as set forth in the applicable
prospectus supplement. The rights agent will act solely as our agent in connection with the certificates relating to the rights
and will not assume any obligation or relationship of agency or trust with any holders of rights certificates or beneficial owners
of rights. We will file the rights agreement and the rights certificates relating to each series of rights with the SEC, and incorporate
them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue
a series of rights.
The applicable prospectus supplement will
describe the specific terms of any offering of rights for which this prospectus is being delivered, including the following:
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the date of determining the stockholders entitled to the rights distribution;
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the number of rights issued or to be issued to each stockholder;
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the exercise price payable for each share of debt securities, preferred stock, common stock or other securities issued upon
the exercise of the rights;
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the number and terms of the shares of debt securities, preferred stock, common stock or other securities which may be purchased
per each right;
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the extent to which the rights are transferable;
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the date on which the holder’s ability to exercise the rights shall commence, and the date on which the rights shall
expire;
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the extent to which the rights may include an over-subscription privilege with respect to unsubscribed securities;
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if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with
the offering of such rights; and
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any other terms of the rights, including the terms, procedures, conditions and limitations relating to the exchange and exercise
of the rights.
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The description in the applicable prospectus
supplement of any rights that we may offer will not necessarily be complete and will be qualified in its entirety by reference
to the applicable rights certificate, which will be filed with the SEC.
DESCRIPTION
OF UNITS
As specified in the applicable prospectus
supplement, we may issue units consisting of one or more debt securities, shares of common stock or preferred stock, warrants or
any combination of such securities. In addition, the prospectus supplement relating to units will describe the terms of any units
we issue, including as applicable:
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the designation and terms of the units and the securities included in the units;
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any provision for the issuance, payment, settlement, transfer or exchange of the units;
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the date, if any, on and after which the units may be transferable separately;
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whether we will apply to have the units traded on a securities exchange or securities quotation system;
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any material United States federal income tax consequences; and
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how, for United States federal income tax purposes, the purchase price paid for the units is to be allocated among the component
securities.
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LEGAL
MATTERS
Davis Graham & Stubbs LLP of Denver,
Colorado has provided its opinion on the validity of the securities offered by this prospectus.
EXPERTS
The financial statements incorporated by
reference herein have been so included in reliance on the report of KBL, LLP, an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and accounting.
You should rely only on the information
incorporated by reference or provided in this prospectus or any supplement to this prospectus. We have authorized no one to provide
you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this prospectus.
PERSHING GOLD CORPORATION
$100,000,000
Senior Debt Securities
Subordinated Debt Securities
Common Stock
Preferred Stock
Warrants
Rights
Units
________________
PROSPECTUS
________________
__________, 2016
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14.
Other Expenses of Issuance and Distribution
.
The following sets forth the expenses in
connection with the issuance and distribution of the securities being registered hereby, other than underwriting discounts and
commissions. All amounts set forth below, other than the SEC registration fee are estimates.
SEC Registration Fee
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$
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10,070
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FINRA Fee
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$
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15,500
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Legal Fees and Expenses*
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$
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14,000
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Accountants Fees and Expenses*
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$
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2,000
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Listing Fee**
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$
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**
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Transfer and Disbursement Agent Fees*
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$
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1,000
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Printing Costs*
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$
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10,000
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Miscellaneous*
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$
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10,000
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Total
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$
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62,570
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____________
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*
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Estimated solely for the purposes of this Item. Actual expenses may vary.
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**
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The listing fee is based upon the principal amount of securities listed, if any, and is therefore not currently determinable.
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Item 15.
Indemnification of Officers and Directors
.
Nevada Revised Statutes Sections 78.7502
and 78.751 provide us with the power to indemnify any of our directors and officers. The director or officer must have conducted
himself/herself in good faith and reasonably believe that his/her conduct was in, or not opposed to, our best interests. In a criminal
action, the director, officer, employee or agent must not have had reasonable cause to believe his/her conduct was unlawful.
Under Revised Statutes Section 78.751,
advances for expenses may be made by agreement if the director or officer affirms in writing that he/she believes he/she has met
the standards and will personally repay the expenses if it is determined such officer or director did not meet the standards.
Our Articles of Incorporation provide that
our officers and directors shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the
State of Nevada against all expenses, liability and loss (including attorneys’ fees, judgments, fines and amounts paid or
to be paid in settlement) reasonably incurred or suffered by them in connection with any civil, criminal, administrative or investigative
action, suit or proceeding related to their service as an officer or director. Such right of indemnification shall be a contract
right which may be enforced in any manner desired by such person. We must pay the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding as they are incurred and in advance of the final disposition of the action,
suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be indemnified by us. Such right of indemnification
shall not be exclusive of any other right which such directors or officers may have or hereafter acquire.
Our Articles of Incorporation provide that
we may adopt bylaws to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may purchase
and maintain insurance on behalf of any of officers and directors. The indemnification provided in our Articles of Incorporation
shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the
heirs, executors and administrators of such person.
Our Bylaws provide that a director or officer
shall have no personal liability to us or our stockholders for damages for breach of fiduciary duty as a director or officer, except
for damages for breach of fiduciary duty resulting from (a) acts or omissions which involve intentional misconduct, fraud,
or a knowing violation of law, or (b) the payment of dividends in violation of Nevada Revised Statutes Section 78.3900.
Item 16.
Exhibits
.
Exhibit No.
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Description
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1.1
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Form of Underwriting Agreement (1)
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2.1
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Share Exchange Agreement dated as of September 29, 2010, by and among The Empire Sports & Entertainment Holdings Co., The Empire Sports & Entertainment, Co. and the shareholders of The Empire Sports & Entertainment Co. (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2010)
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3.1
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Amended and Restated Articles of Incorporation, as amended by certificates of amendment dated May 16, 2011, February 27, 2012, and December 11, 2014 (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2010)
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3.2
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Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2010)
|
3.3
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Certificate of Designation for Series E (Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 14, 2013)
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4.1
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Specimen of Certificate for Common Stock, par value $0.0001. Incorporated by reference to Exhibit 4.1 to Amendment No. 2 of our Registration Statement on Form S-4 filed on September 8, 2009 (Registration No. 333- 161076).
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4.2
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Specimen of Certificate for Preferred Stock, par value $0.0001 (1)
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4.3
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Form of Senior Notes Indenture
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4.4
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Form of Senior Note (1)
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4.5
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Form of Subordinated Notes Indenture
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4.6
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Form of Subordinated Note (1)
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4.9
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Form of Warrant Agreement, including Form of Warrant Certificate (1)
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4.10
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Rights Agreement, including Form of Rights Certificate (1)
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5.1
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Opinion of Davis Graham & Stubbs LLP
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23.1
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Consent of KBL, LLP
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23.2
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Consent of Davis Graham & Stubbs LLP (included in Exhibit 5.1)
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24
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Powers of Attorney (included in signature page)
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25.1
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Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 for Senior Notes Indenture (2)
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25.2
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Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 for Subordinated Notes Indenture (2)
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____________
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(1)
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To be filed by amendment or by a Current Report on Form 8-K if the registrant enters into any such agreement or issues any
such instrument in connection with the offer of any securities registered hereunder.
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(2)
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To be incorporated herein by reference from a subsequent filing in accordance with section 305(b)(2) of the Trust Indenture
Act of 1939.
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Item 17.
Undertakings
.
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(a)
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The undersigned registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement
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(i)
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To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
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Provided, however, that
paragraphs
(a)(1)(i) and (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3
and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with
or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule
424(b) that is part of the registration statement.
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(2)
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That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold
at the termination of the offering.
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(4)
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That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
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(i)
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement
as of the date the filed prospectus was deemed part of and included in the registration statement; and
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(ii)
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date;
or
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(5)
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That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
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The undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
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(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(b)
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The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(c)
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
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(d)
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The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee
to act under subsection (a) of section 310 of the Trust Indenture Act (“Act”) in accordance with the rules and regulations
prescribed by the Commission under section 305(b)(2) of that Act.
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SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Lakewood, State of Colorado on June 7, 2016.
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PERSHING GOLD CORPORATION
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(Registrant)
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By:
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/s/ Stephen Alfers
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Name: Stephen Alfers
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Title: President and Chief Executive Officer
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POWER OF ATTORNEY
Each of the undersigned hereby constitutes
and appoints Stephen Alfers and Eric Alexander, and each of them, the undersigned’s true and lawful attorney-in-fact and
agent, with full power of substitution, for the undersigned and in his name, place and stead, to sign in any and all capacities
(including, without limitation, the capacities listed below), the registration statement, any and all amendments (including post-effective
amendments) to the registration statement and any and all successor registration statements of Pershing Gold Corporation, including
any filings pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary
to be done to enable Pershing Gold Corporation to comply with the provisions of the Securities Act and all the requirements of
the Securities and Exchange Commission, as fully to all intents and purposes as the undersigned might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute, or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated:
Signature
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Title
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Date
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/s/ Stephen Alfers
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Stephen Alfers
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President, Chief Executive Officer and Chairman
(Principal Executive Officer)
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June 7, 2016
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/s/
Eric Alexander
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Eric Alexander
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Vice President Finance and Controller
(Principal Financial and Accounting Officer)
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June 7, 2016
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/s/
Barry Honig
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Barry Honig
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Director
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June 7, 2016
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/s/
Alex Morrison
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Alex Morrison
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Director
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June 7, 2016
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/s/
Edward Karr
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Edward Karr
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Director
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June 7, 2016
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EXHIBIT INDEX
Exhibit No.
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Description
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1.1
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Form of Underwriting Agreement (1)
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2.1
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Share Exchange Agreement dated as of September 29, 2010, by and among The Empire Sports & Entertainment Holdings Co., The Empire Sports & Entertainment, Co. and the shareholders of The Empire Sports & Entertainment Co. (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2010)
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3.1
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Amended and Restated Articles of Incorporation, as amended by certificates of amendment dated May 16, 2011, February 27, 2012, and December 11, 2014 (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2010)
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3.2
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Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2010)
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3.3
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Certificate of Designation for Series E (Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 14, 2013)
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4.1
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Specimen of Certificate for Common Stock, par value $0.0001. Incorporated by reference to Exhibit 4.1 to Amendment No. 2 of our Registration Statement on Form S-4 filed on September 8, 2009 (Registration No. 333- 161076).
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4.2
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Specimen of Certificate for Preferred Stock, par value $0.0001 (1)
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4.3
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Form of Senior Notes Indenture
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4.4
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Form of Senior Note (1)
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4.5
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Form of Subordinated Notes Indenture
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4.6
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Form of Subordinated Note (1)
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4.9
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Form of Warrant Agreement, including Form of Warrant Certificate (1)
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4.10
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Rights Agreement, including Form of Rights Certificate (1)
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5.1
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Opinion of Davis Graham & Stubbs LLP
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23.1
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Consent of KBL, LLP
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23.2
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Consent of Davis Graham & Stubbs LLP (included in Exhibit 5.1)
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24
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Powers of Attorney (included in signature page)
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25.1
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Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 for Senior Notes Indenture (2)
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25.2
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Form T-1 Statement of Eligibility and Qualification under Trust Indenture Act of 1939 for Subordinated Notes Indenture (2)
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____________
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(1)
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To be filed by amendment or by a Current Report on Form 8-K if the registrant enters into any such agreement or issues any
such instrument in connection with the offer of any securities registered hereunder.
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(2)
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To be incorporated herein by reference from a subsequent filing in accordance with section 305(b)(2) of the Trust Indenture
Act of 1939.
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