Thar’s gold in those promises?
Of all the lofty promises Rise Gold has churned out over the preceding months, none has been more ballyhooed than the number of jobs the mine would create, and the $94,000 average annual wage they’ll pay. Before anyone runs to get in line for one of these dream jobs, let’s take a closer look.
First, it appears to require a considerable amount of magical thinking to believe the company will ever create a single job. According to its most recent SEC 10-Q report, Rise had less than $400,000 in the bank as of Oct. 31, 2021. By its own reckoning, it needs to plow $100 million into the facility before it can mine its first ounce of gold. It is grossly undercapitalized, to put it mildly, and teetering on the brink of insolvency.
Second, the $94,000 number is totally misleading. According to its March 2021 economic impact report, Rise estimates that it will employ “312 people in Nevada County at full operating levels.” Note that it may take years before “full operating levels” are reached.
Putting that aside, the company says that its annual payroll (not including benefits) for these 312 employees will be $29,220,000. It provides no explanation for how it arrived at this number. Rise then provides a list of job categories and an estimate of employees per category.
What it doesn’t provide is detail as to the average pay for each employee in each category. Only 213 of the potential 312 employees would be local hires, and of that 213, 162 of them would be “local trainees.” Does anyone really think that Rise is going to pay a trainee $94,000 a year?
According to Comparably.com and other sources, the average wage for underground gold miners in the United States is less than $50,000. Even after these 213 local hires are fully trained, does anyone really think Rise will pay almost twice that national average?
So how did they arrive at the $94,000 number? Simple — if you take 312 and divide it into their made-up annual payroll of $29,220,000, you’ll come up with just under $94,000.
By lumping together the salaries of managers (all of which are listed as “non-local hires”), engineers, geologists and other highly paid jobs with the lower-paid miners and mineral processors, the company has provided what I consider a false representation of what someone who lives in our community might actually expect to earn at Rise.
There is a great deal more in the Rise economic impact report that is of questionable validity. That’s why the Board of Supervisors was right to commission its own economic impact report. But all the board or anyone else needs to know about the Rise report is found in italics on the second page:
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Rise Grass Valley has not established mineral reserves supported by a feasibility study.
Rise Grass Valley has not completed a feasibility study to establish mineral reserves, and therefore has not demonstrated economic viability of the Idaho-Maryland Mine.
In other words, the Rise business model appears to be built on sheer speculation, which begs the following question: Why is the county continuing to spend valuable time and money on this project?
The only explanation I’ve heard is that the board has to follow the legal process. Does that mean that every time a carload of people comes to town with an undercapitalized, half-baked, potentially dangerous business scheme and starts throwing around empty promises, the board is required to take it all seriously?
Due process only requires whatever process that’s due under the circumstances, not a seemingly endless process in pursuit of a fantasy. Isn’t it time for this particular fantasy to end?
Randall J. Newsome lives in Nevada City. He has built a reputation for facilitating the resolution of large and complex bankruptcy and commercial disputes, first as a bankruptcy judge for 28 years, and then as a neutral at JAMS. Notable cases include the Pacific Gas and Electric bankruptcy in 2003 and the PG&E bankruptcy in 2019, in both of which he served as the court-appointed mediator.
