Oct. 11, 2011 - There's an old adage that "the best defense is a good offense."
Emgold, the Canadian company that proposes reopening the Idaho Maryland Mine near downtown Grass Valley, has employed this Machiavellian principle in attacking local residents raising legitimate questions about Emgold's speculative and high-risk scheme.
In recent weeks, Emgold and its supporters have dismissed hundreds of residents' concerns as "fear mongering," "scare tactics" and "distortions." By going on the attack, however, Emgold feeds speculation that it has something to hide.
Emgold's decision to attack local residents is predictable, but disappointing. Given the many serious questions about the mine and whether Emgold can deliver on its promises, Emgold should be addressing the legitimate concerns of local taxpayers and property and business owners - not dismissing them with overheated rhetoric and name-calling.
For starters, Emgold (which has never operated a gold mine anywhere in the world) could reassure locals that it can achieve financial stability. Currently, the signs aren't good: despite record high prices for gold, Emgold's stock has sunk 98% in the last four years, and it currently trades for less than 10 cents per share.
Worse still, Emgold has admitted that it is out of money, deep in debt and its executives are working without pay. In its latest financial report Emgold stated that as of June 30, 2011 it was almost $250,000 in debt, faced $820,000 in outstanding bills, wasn't paying its executives and didn't have sufficient cash on hand to conduct the basic economic and environmental studies required to reopen the mine. Readers can see Emgold's financial reports for themselves. (Emgold Mining Corporation Quarterly Report, June 30, 2011; www.sedar.com )
Emgold could try reassuring homeowners whose wells may go dry when it starts draining mine tunnels, which stretch for miles and go down more than 5,000 feet. Studies show that dozens of wells near the mine could be dewatered.
By any measure, the mine would vastly impact Grass Valley. Projections show steam plumes could reach hundreds of feet over downtown Grass Valley, and hauling mine waste will require 220 20-ton trucks through Grass Valley every day. That's one truck every 6 minutes, if you're wondering, with increased noise, traffic, air pollution and public safety concerns. Many wonder how tourists will react to industrial operations in the heart of scenic Grass Valley, and whether they'll take their money elsewhere.
Finally, Emgold could substantiate its biggest but shakiest promise of hundreds of long-term jobs and millions in tax revenue. Emgold admits that at least half of the promised jobs aren't even in the mine - they're in a proposed new ceramics factory that Emgold says will convert half of the mined waste rock into ceramic tiles.
There are many obvious problems with the ceramics plant, however. First of all, Emgold's process isn't used commercially anywhere in the world. Does Grass Valley want to gamble on being their guinea pig?
Furthermore, according to media reports, in June 2009 Emgold lost its license for an experimental rock-to-tile process after it defaulted on license payments. With that kind of track record, can Emgold be trusted to keep its word in the future?
And according to Emgold's and tile industry figures, the factory's production would exceed 30% of the total US tile production – an ambitious, if unrealistic goal, to say the least. Emgold promises that Grass Valley will get millions of dollars in sales taxes collected on those tiles, but if the tiles aren't made or don't sell, Grass Valley won't see the promised revenue or jobs.
Finally, Emgold's latest proposal includes what it euphemistically calls "Operational Variability," which is a fancy way of saying that Emgold ceramics factory may not even make as much tile as promised! No tile production means no tile factory jobs and no sales tax revenue for Grass Valley to offset the millions of dollars in anticipated infrastructure and public safety costs.
The simple fact is that reopening the Idaho Maryland Mine will impact local businesses and residents enormously, but Emgold has dismissed concerns about those impacts as "fear mongering" and "scare tactics."
Emgold does itself and the community a disservice when it resorts to such name-calling. After all, insulting the locals doesn't address the legitimate concerns about reopening the Idaho Maryland Mine. And it's just not a smart defense – or offense, for that matter.
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