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The website, Sierra Voices will display the following widget in its right-hand column on all main pages and subpages until September 13th, by which time Emgold must deliver the funds to the City of Grass Valley for continuing the EIR (environmental impact report) or else its application to re-open the Idaho-Maryland Mine will expire administratively (with no further action by the fully assembled city council needed) and it will be required to start over from the beginning with a new application (should it wish to continue).

Originally published in High Country News (June 12, 2012). Reprinted with permission.

By Ben Long

Two of my favorite western cities, Tucson, Ariz., and Boise, Idaho, share some common blessings and one common curse.

The blessings include lovely mountain backdrops, vibrant universities and increasingly diverse economies.

The shared curse: badly misguided mining claims upstream.

Photo courtesy Save the Scenic Santa Ritas.

Why, in the 21st Century, should communities like Boise and Tucson be shackled to an antiquated federal mining policy dating back to the presidency of Ulysses S. Grant?

I was a newspaper reporter in Boise for a short spell and when I return, I am drawn to the Boise River and its marvelous greenbelt. It’s a rare city where the trout fishing and kayaking are so good within city limits.

Folks in Boise are rightfully concerned about a Canadian company that has proposed a cyanide-leach gold mine upstream from the Boise River. Besides fishing and floating, the Boise provides about a fifth of drinking water for the largest metro area in Idaho. The battle cry there is: the Boise River is more precious than gold.

That scenario might sound familiar to folks in Tucson. There, the mining company Rosemont Copper recently unveiled plans for a giant, thirsty copper mine in the Santa Rita Mountains on the outskirts of town. Water is even scarcer and more precious in Tucson than it is in Boise.

When the Montana winters start to wear us down, my family heads to Tucson and surrounding Sky Island mountain ranges.  We love to bird at local hotspots like Madera Canyon.

Mining has been, and will continue to be, important elements in both the Gem State and the Copper State economies. But it’s long past time to recognize that just because there is gold in the hills, it’s not always worth ripping the hill apart to get it.

When Karen and I visit Madera Canyon, we hope for a glimpse of a rare bird like an Elegant Trogon or Flame-colored Tanager. We are not alone. The two counties near Tucson bring in nearly $3 billion/year from tourism and recreation. What’s more, the natural settings and outdoor opportunities near cities like Boise and Tucson help attract investment and jobs in small business, light industry and technologies.

But forget all that. The 1872 General Mining Law mandates that mining is always the highest priority for our public lands, from the Boise National Forest to the Coronado National Forest. Local rangers may modify, but are not allowed to reject a mining proposal, even when it runs squarely against local sensibilities or modern economic interests.

That evidently made sense in the 1870s, when Col. Custer and Sitting Bull clashed over prospectors’ intrusions into the Black Hills. But those days are done. It’s time to give local communities a voice in determining the future of public lands that offer so much value, far beyond minerals. Even if that means sometimes saying “no.”


Image: The natural setting around Tucson, Ariz., such as the Santa Rita Mountains, are more precious than gold. Photo courtesy Save the Scenic Santa Ritas.

Ben Long is an outdoorsman, author and conservationist from Kalispell, Mont.,  who has yet to add the Elegant Trogon to his life list. He is senior program director for Resource Media.

Reprinted from Other Words

Neither foreign investors nor unelected tribunals deserve the power to trump democratically elected leaders.

By Robin Broad and John Cavanagh

A tribunal in Washington, D.C. that nobody elected recently issued a verdict that potentially hinders the democratic rights of millions of people. Its three members ruled that a foreign company may continue to sue El Salvador for not letting the company mine gold there. The impoverished Central American country could potentially be forced to pay a Canadian mining company called Pacific Rim $77 million or more in damages. This anti-democratic ruling has ominous implications for all of us.

We visited El Salvador last year to learn more about this landmark case. A wide vein of gold lies alongside the northern portions of a large river that flows down the country’s middle. This river provides water for more than half its population. The gold remained relatively undisturbed until about a decade ago, when foreign companies began to apply for mining permits.

Farmers and others told us that they were initially open to gold mining, thinking it would bring jobs to ease the area’s deep poverty. But as they learned more about the toxic chemicals used to separate gold from the surrounding ore and about the massive amounts of water used in the process, they began to organize a movement that opposed mining. Their simple cry: “We can live without gold, but we can’t live without water.”

By 2007, polls showed that close to two-thirds of Salvadorans opposed gold mining. In 2009, Salvadorans elected a president who promised he wouldn’t issue any new mining permits during his five-year term. He has kept this pledge.

But Pacific Rim didn’t sit idly by as democracy worked its way from El Salvador’s northern communities to its national government. The company sought a mining license. When the government didn’t approve its environmental impact assessment, the Canadian company resorted to lobbying Salvadoran officials. And, when its lobbying failed, Pacific Rim lodged a complaint against El Salvador at the International Center for the Settlement of Investment Disputes in Washington under a U.S.-initiated trade agreement and a little-known investment law in El Salvador.

Laws and trade agreements like these grant corporations the right to sue governments over actions — including health, safety, and environmental regulations — that reduce the value of the corporation’s investment.

To the surprise of many observers, the tribunal ruled on June 1 that Pacific Rim can proceed with the lawsuit against El Salvador. Even if the cash-strapped Salvadoran government wins in the end, it will likely have to shell out millions on legal fees to defend an action taken after lengthy democratic deliberations. If it loses in the tribunal’s next ruling, it will cost even more.

Laws and trade agreements that allow corporations to sue governments should worry us all. No international tribunal should have the right to punish countries for laws or measures approved through a democratic process, be it in the United States, El Salvador, or anywhere else. President Barack Obama said this himself in 2008 when he promised to limit the ability of corporations to use trade agreements to sue over public-interest regulations.

Yet the Obama administration is currently negotiating a Trans-Pacific Partnership with several countries. And it’s pushing for provisions that would allow companies to sue governments under this trade pact. But an expanding coalition of labor, environmental, religious, and other groups opposes giving Big Business this privilege. A similar coalition in Australia, another country negotiating this trade deal, has convinced its government to oppose such corporate “rights.” The Trans-Pacific Partnership may well prove an opportunity for this outrageous assault on democracy to be defeated.

Democracy belongs to the people. Those of us standing up to defend democracy and counter corporate abuse should strongly oppose any new “rights” for corporations being written into new trade pacts as we try to overturn the existing ones.

El Salvador’s government has the right to act upon the will of its people — and should be expected to do so. Neither foreign investors nor unelected tribunals deserve the power to trump democratically elected leaders.


Robin Broad is a professor at American University’s School of International Service, and John Cavanagh directs the Institute for Policy Studies.

By Ralph Silberstein

If Emgold Mining Co. fails to pay the City of Grass Valley the required deposit of about $440,000 by September of 2012, the City will consider the Idaho-Maryland Mine project application withdrawn.

The deposit is for independent consultants to begin preparation of a revised Draft Environmental Impact Report (DEIR) on the proposed mine and ceramics factory. A total of $3-4 million and about   two years will be needed to finance and execute the DEIR, additional studies, another round of public hearings, and a Final EIR before obtaining a permit.

Emgold may be unable to rise to the occasion. The annual financial report for 2011 shows a loss of $2,338,060, or $0.06 per share, pushing the accumulated deficit to over $50 million. Emgold has no sources of regular revenue and is predictably out of operating capital again. This has been going on for years.

Penny stock junior mining companies such as Emgold are notoriously risky investments in general, but the Idaho-Maryland Mine project is increasingly unlikely to succeed. Working against the efforts to raise funds is the huge added risk of the ceramics factory, which should scare off investors. Fusing tailings into tiles to dispose of mine waste may seem like a good idea, but it has never been done on a commercial scale, and the tile market for this product is not promising. Furthermore, Emgold has no expertise in ceramics and the plan calls for selling 480,000 sq. ft. of tile per day; unbelievable, especially in today’s market. Add to that the obstacles of getting the Grass Valley General Plan modified, annexation approval, significant air pollution in the face of new strict carbon emissions regulations for California, and a variety of local issues such as threats to local wells and property values.

Note that, if a permit is obtained, the costs to de-water the old mine and build the mining and ceramics factory facilities will likely exceed $200 million. This will easily consume all the profits from the “measured gold reserves”.  (As per NI 43-101 report, 212,000 oz.)

To date, in an effort to promote the project, Emgold has made a number of questionable statements:

  • The revised project documents, as submitted to the City of Grass Valley, estimate the maximum number of long term jobs at 500, but in public statements Emgold is now claiming 600 jobs. It was 400  last year.
  • Promotional pieces about the Idaho-Maryland Mine repeatedly claim the project is in the “advanced stage of permitting”, when in fact they have not even submitted deposits needed to restart the DEIR process.
  • A constant claim of “community support” from a 2006 poll fails to mention that the support was conditioned upon addressing all environmental concerns, upon which it fails. Now that the project description has been made public, there is strong opposition to the mine.

In an effort to raise yet more funds, Emgold has now employed Vanguard Shareholder Solutions Inc. to disseminate news and public information to investors, at a cost of $8500/month and stock options.

As the marketing of the Idaho-Maryland Mine project becomes more expert, it becomes even more important to do one’s own research and carefully scrutinize the merits of any investment before committing funds. Buyer beware!


Ralph Silberstein: President of CLAIM-GV (Citizens Looking at Impacts of Mining), Grass Valley City resident, software engineer, served 2 years on the Grass Valley Planning Commission, former Building Contractor.

We attended a workshop at the Miner’s Foundry last weekend that included an interesting presentation by local realtor (and longtime citizen activist) Chauncey Poston, on the subject of “disclosure law.”

During the question period, I asked him whether, in his view, the current application by Emgold Corporation to re-open the Idaho-Maryland Mine would be considered an important fact to disclose to potential buyers of property in Nevada County.

He replied that he has been disclosing that fact to prospective buyers for at least the last six years.

A day or so later, in response to a follow-up question I sent him via email (asking whether he believed his local colleagues in the real estate business are following the same practice) he sent me this clarification:

Don:

The answer to your question is “I would hope so.” The subject of the mine re-opening is common knowledge to any person with a heart beat living in western Nevada county. Using the excuse “I didn’t know” would be indefensible. You simply can not get around that conclusion. Any Realtor listing or selling property in the area around the mine would be foolish not to discuss the mine with sellers, convincing them to disclose, and informing buyers (disclose) of the possibility of the mine re-opening. In a perfect world, the mine would be a topic of discussion between the buyer and his agent upon first visiting the property. In the end, disclosure of the mine would come from three entities: the seller, the listing agent, and the buyers agent.

The big problem, as I see it, is to determine just how wide a swath from the mine location should disclosure be important. Impacts from the mine could be far reaching. An example, wells up on Banner Mountain have the potential of going dry if the water table in corrupted. Traffic and noise have the potential of causing disturbance far away from the mine site. Just how far do we need to go with disclosure? That is the million dollar question.

Only a full and brutally honest EIR will come close to answering those questions as well as the hundred more questions uncovered by an adequate EIR.

Sincerely,

Chauncey.”

My reply to Chauncey included these remarks:

I see your point about the million dollar question. Even hydrologists who’ve studied the first DEIR admit that they can’t predict with any certainty how widespread the impact of dewatering on wells might be.

I believe that local citizens generally don’t fully appreciate how massive this project would be: the underground extent of IMM goes from directly under the Sierra Nevada Memorial Hospital, under Brunswick Basin and all the way out to the Y intersection of Brusnwick and 174. It encompasses almost as many square acres underground as does the entire incorporated city limits of Grass Valley.

Press Release
By Citizens Looking At Impacts of Mining (CLAIM-GV)
claim@claim-gv.org
March 15, 2012

On Thursday, March 13, Grass Valley City Council set a final 180-day time limit for Emgold to come up with the required deposits for their flagship project, the Idaho-Maryland Mine and Ceramics Factory. If Emgold fails to deposit approximately $440,000 within 180 days, the project application will be closed.

Emgold had previously requested a 60-90 day extension by the City Council on Nov 8, 2011, citing a lack of funds and difficult market conditions. But at Thursday’s meeting Emgold CEO David Watkinson reported that no progress had been made and still more time was needed. Further delays are complicating staffing for the city and may require new contracts to be negotiated. The City made the concession of granting more time, but this time chose to set a firm limit on further extensions. The initial deposit is required for staffing and independent consultants. Emgold will need another $3-4 million to complete the permitting process. If the permit is granted, revenue generating production would take an additional 3-4 years.

As per financial reports on September 30, 2011, Emgold had a working capital deficit of $695,764 and an accumulated deficit of $49,327,646. CEO David Watkinson has a salary of $185,000/yr. According to a recent statement by Emgold, the stock offerings in late 2011 were specifically to be used for projects other than the Idaho-Maryland Mine and Factory and for general administration and salaries. No explanation was provided as to why the stock offerings were directed elsewhere.

Emgold is a Canadian “Junior Mining” corporation and has never operated a mine or tile factory. If Emgold has failed to get funding to date, the 180 days may also be a challenge. According to Peter Koven writing for the Financial Post last week (March 6, 2012), the outlook for Junior Mining Companies is very poor: “For juniors that don’t have a good story or a competitive advantage to raise cash, experts warned that the financing road could remain tough for a very long time.”

The City first accepted the application for the project in 2005. The last public hearing on the project was in January 2009, when the Draft Environmental Impact Report (DEIR) was reviewed by the Planning Department and the public submitted comments. The DEIR was subsequently deemed inadequate. Due to concerns about truck traffic, air pollution, noise, cyanide processing, water pollution, dust, threats to local wells, and other impacts, significant opposition to the project has emerged. Since then the project has undergone minor revisions and been resubmitted. On November 8, 2011, the Grass Valley City Council approved contracts for hiring new consultants to start the process again and prepare a new Draft EIR. The process will take at least a year.


Citizens Looking At Impacts of Mining (CLAIM-GV) is a Grass Valley non-profit whose mission is to protect the community’s natural environment, public health and safety, and economic sustainability relative to mine re-openings and/or developments. CLAIM-GV’s many volunteers focus on gathering the relevant information, analyzing it, and making it available to the public.

In a surprise move this evening, the Grass Valley City Council went well beyond what was strictly required of them and took action on a formally non-action agenda item, by imposing a “final” and hard deadline of six months for Emgold to secure financing to complete the Draft Environmental Impact Report on its Idaho-Maryland Mine Project.

Council members made it clear that there will be no more extensions, and that the application will be deemed dead if Emgold fails to secure financing by the six-month deadline. Technically, the project could then be restarted from the beginning with a new application, but it’s anyone’s guess whether that is even likely. Since Emgold has used all its recent fundraising to finance its efforts on projects in Nevada, my guess is that this hard deadline may signal the end of Emgold’s long quest to re-open the Idaho-Maryland Mine in Grass Valley.

Most public commenters urged the council to impose a hard deadline, and — in the end – it seemed that the council heard and responded to their arguments.

When Emgold CEO Dave Watkinson suggested to the council that the city was sometimes the obstacle to progress, councilmember Lisa Swarthout quickly reminded him that the subject this evening was Emgold and not the city. This seemed like an ominous reproach.

I had hoped to post the video of the IMM discussion this evening, but it appears that NCTV may have dropped the ball and not broadcast it (I scheduled it, but got only a black screen for a recording). If it turns up on Granicus, I may be able to capture it and post it here.

My strong impression is that the Grass Valley City Council may be getting a bit impatient with Emgold’s endless stalling and delays.

Stay tuned for further developments.