August 30, 2011 - I think it would be instructive for the lead agency on the IMM project, the City of Grass Valley, to look at what the "invisible hand of the market" is saying about this project. The company behind the project is Emgold, which is a Canadian junior-mining penny stock. Emgold has never dug one foot of mining tunnels or operated a mine anywhere in the world.
Emgold must sell stock in order to finance its operations. Since at present Emgold has little to no resources to proceed with the next steps required, Emgold must entice some investors to give them another $1M or so to finish the Draft Environmental Impact Report (DEIR). 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 (Since 2006, Emgold stock has lost > 97% of its value while gold has risen by 260%), is an accurate assessment. Further, no senior, experienced gold mining companies have tried to purchase control of Emgold in order to get at the Idaho Maryland gold. This would be pretty cheap at present stock prices. Another sign of lack of faith in mining at the Idaho Maryland mine.
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 they 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)? A severely underfunded company cannot afford to spend money on all the promises Emgold has been making to lure Grass Valley into agreeing to this project.
One key promise is the fabled use of a ceramics plant to melt and sell mine waste as tiles. This is such a fabulous opportunity that with all the gold mines and other mines in the world, no one does it. Ask yourself why? Not profitable? Most likely.
These are important "signs" for the Grass Valley City Council to note. While CLAIM-GV and its supporters would love to take credit for this situation, the reality is that "the market" is the biggest impediment to reopening this mine. It is just not profitable enough. "The market's" judgment is that despite the bubble-like fervor surrounding gold, reopening the Idaho Maryland mine 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.
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