By Bob Bogart
In an Oct 26 news release, Emgold has finally admitted what the “invisible hand of the market” and many other community members are saying about the reopening of the Idaho Maryland Mine project. Emgold is asking the City of Grass Valley to put the project on hold for 60 – 90 days and possibly drop the project altogether because Emgold cannot raise any more money to fund the revised DEIR process now pending before the City of Grass Valley.
A severely underfunded company, Emgold cannot afford to spend money on all the promises it has been making to lure Grass Valley into agreeing to this project. The risks of Grass Valley taxpayers being stuck with clean-up costs left by a bankrupt mining company are all too great and all too familiar.
Concerned community members have been pointing out that even if Emgold can scrape together the money for the DEIR, how will they then raise $200M – $300M to build the mine and the ceramics plant and the aggregate factory? If Emgold cannot raise $1M how will they raise 200x – 300x that amount? And will gold mine investors want to invest extra money on items that have nothing to do with the gold (ceramics plant, aggregate factory, mitigation measures)?
Having no income, Emgold must sell stock in order to finance its operations. Why is it so hard to get investors to see the “gold at the end of the tunnel?” you might ask. Emgold surely sees it, but no other investors or companies can see it. Clearly these potential investors have no faith in Emgold, which, based on the evidence (its stock has lost > 97% of its value while gold has risen by 260% since 2006 ), is an accurate assessment. Further, no experienced gold mining companies have tried to purchase control of Emgold in order to get at the Idaho Maryland gold, which would be cheap at present valuations of Emgold. Another sign of lack of faith in mining at the Idaho Maryland mine.
In case you missed the Oct 26 release from Emgold, here are two key points.
First, Emgold is proposing another stock sale at 10 cents per share, proceeds of which “… will be primarily used for exploration activity on the Company’s Buckskin Rawhide Property in Nevada, property acquisition in Nevada, exploration of its Stewart Property in British Columbia, and general working capital.” Note that none of this money is targeted at reopening the Idaho Maryland Mine.
Second, “IMMC will request that the City of Grass Valley put the Idaho-Maryland Project temporarily on hold… In the event that insufficient funds can be raised to move the Idaho-Maryland Project forward … Emgold may have to delay the project until market conditions improve or, as a worst case, drop the Project entirely to focus on the other quality assets the Company currently has in its portfolio….” (Reference: Go to www.emgold.com and click News Releases).
“The market’s” judgment is that despite the bubble-like fervor surrounding gold, reopening the Idaho Maryland mine surrounded by homes, businesses, and medical facilities is not worth pursuing. Grass Valley must wake up and stop wasting time and energy on a project that has already been judged a loser. Emgold has no money. Investors are saying no to Emgold. Emgold has never run a mine. No other mines anywhere in the world melt their waste into tiles. No senior mining companies seem interested in Emgold or IMM. Lots of No’s. Grass Valley: face the reality that Emgold is not capable of opening or operating the Idaho Maryland Mine. Let’s join “the market” and just say NO to Emgold ourselves. Let’s move on to more promising projects that will provide a 21st century economy for Grass Valley.
Bob Bogart lives in Nevada City.
