Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Up until 2013 the primary resource of Emgold Mining Corp. (EMR:TSX.V) was the Idaho Maryland Gold Mine in northern California near Grass Valley. Emgold had a $40 million market cap in 2008 based on the mine with its historic 1.32 million ounce resource at 11.3 g/t gold. Emgold management stumbled. The shares dropped from a rollback adjusted $3.58 per share to $0.03 today, a 99% decline.
The Idaho Maryland mine, or IM mine for short, produced as much as 129,000 ounces of gold per year until World War II forced the closure in 1942. It was mined on and off on a shoestring basis from after the war until being optioned by Emgold in 1995. Emgold spent a lot of money on management and a little money on the project before they blew up.
From its discovery in 1851 until the last mining in 1956, the mine produced 2.38 million ounces of gold at a grade of .43 opt. The IM mine was reputed to be the second largest and most productive gold mine in California outclassed only by the nearby Empire Mine that began the long history of Newmont Mining.
Rise Resources Inc. (UPP:CSE; RYES:OTCBB) announced the purchase of the entire project including 93 surface acres and 2750 acres of mineral rights for a flat $2 million USD including all core and technical data. The purchase is a straightforward deal that includes no royalty to anyone.
In California permitting an open pit mine is nearly impossible. Permitting an underground mine is quite possible. As of today’s price for the shares, Rise has a market cap of $10 million CAD or about $7.5 million USD. That’s about $5.68 an ounce in the ground USD and damned cheap.
The market for Rise shares went up today by $0.04 or 15% only because it’s a C Exchange listing and nobody reads press releases anyway. When people figure out the deal it will go up more.
Gold under $6 an ounce in the ground in the U.S. with a pro-business president is the closest to legal stealing since Jon Corzine got into the commodities business. You aren’t going to be able to buy gold at that price in an existing mine in the U.S. for very long.
Essentially, Rise paid $2 million for something the market used to value at $40 million when gold was a lot cheaper. We are in a bull market, and in a bull market gold shares go up with gold.
Rise is an advertiser, I am biased and I participated in the last private placement. Do your own due diligence.
Rise Resources Inc.
UPP-C $0.30 (Jan 25, 2017)
RYES OTCBB 33.2 million shares
Rise Resources website
Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Rise Gold. Rise Gold is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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