Continental Resources Group, Inc.(fka CRGC)

[Tommy]

$PGLC - He Bought Neuralstem Before Its 390% Rally and Just Secretly Bought 1.6M Shares of Pershing Gold

http://www.trefis.com/stock/crgc/articles/145833/he-bought-neuralstem-before-its-390-rally-and-just-secretly-bought-1-6m-shares-of-pershing-gold/2012-09-27

... "Now, the reason I find Honig’s purchase of two million shares of CRGC interesting is because it demonstrates his obvious confidence in a hidden arbitrage opportunity. The arbitrage is between Continental Resources Group (CRGC) and Pershing Gold (PGLC).

Arbitrage is the attempt to profit from buying something in one market and selling it in another market for a slightly better price.

Currently, there are separate markets for CRGC shares and PGLC shares, i.e. the two companies trade independently. Between these two markets, there are circulating rumors that one share of CRGC is worth 80% of one share of PGLC due to a pending merger.

This means that with PGLC trading at $0.375, CRGC “should” be trading at $0.30. However, uncertainty over the merger’s eventual completion is causing CRGC to lag PGLC in price. Indeed, CRGC closed today at $0.269. With that closing price, CRGC is offering an 11% “arbitrage” yield.

Thus far, SEC documentation reveals only a very complicated capital history for CRGC. I have not yet been able to certify — nor contact management regarding — the alleged .8-to-1 merger between CRGC and PGLC. Nonetheless, from my reading of SEC filings, it is clear that CRGC is a non-operating entity in which PGLC has a controlling equity stake. It would make logistic sense to consolidate CRGC and clean up the PGLC share structure through a final registration of CRGC shares under PGLC ownership.

Honig apparently prefers CRGC to PGLC, at least based on his most recent SEC filing. Although, perhaps to characterize it more appropriately, Honig seems confident in both companies. In total, he now owns 9.9% of CRGC and 6.9% of PGLC- a position he has been building for months.

If Honig can continue the success he has seen with Neuralstem and his other investments, CRGC and PGLC will not be trading anywhere near their current price levels in 2013. I will continue looking into this arbitrage opportunity. Regardless of the yield, I should repeat, Honig is certainly a significant believer in both companies and has never sold a share in either company. I would be remiss to not mention that the same goes for the CEO Stephen Alfers, billionaire Dr. Phillip Frost, and neighboring Coeur d’Alene, all of which are holding (and adding to) multi-million dollar positions in Pershing Gold." ...