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.