A 21st Century Gold Rush?

There are some intriguing signs Mariposa County may be ripe for a 21st Century Gold Rush.

The latest company to stake a claim, Lode Gold Resources Inc., is going back to the future to find its fortune.

It has taken over the old Fremont Gold Mine, which helped usher in the California Gold Rush of the 1850s.

Last week, the Canadian company announced it had “initiated technical engineering studies and a project readiness assessment” with the goal of reactivating the Fremont Gold Mine.

In an investor prospectus, Lode Gold claims 89 percent of the gold was left behind “frozen in time,” as much as three million ounces that at current prices would be worth $8 billion.

Yes. You read that correctly: $8 billion.

As a general rule, investor prospectuses should be considered with some caution and caveats. The pitches are admittedly based on assumptions and predictions that may not pan out.

Case in point, the current price of gold, which is driving much of the renewed speculation, has shot up more than 300 percent in the last decade, from $1,152 in 2016 to peaking in January at $5,400, before settling back to around $4,100 this summer.

Lode Gold is promising investors $436 million a year cash flow for the life of the mine — if gold stays at $4,700 an ounce.

Wendy T. Chan, CEO and director of Lode Gold, told the Mariposa Gazette in an email last week she was unavailable for an interview because she was “talking to investors in Europe.”

In a statement last week, Chan said, “The initiation of engineering technical study marks the next stage of technical advancement at Fremont.”

“The objective is to establish a clear technical baseline, identify priority work programs, engineering, mine planning and economic studies for the upcoming mine plan development,” she explained in the statement.

In its prospectus the company anticipates the mine could be operational again by 2028, processing 500 tons per day and ramping up to 6,000 tons per day by 2030.

Lode Gold estimates it would provide between 150 to 200 local jobs.

Institutional investors, lead by a Canadian bank and a Swiss Investment firm, own the majority of Lode Gold.

The regulatory environment for mining is certainly favorable under the Trump Administration which has issued several executive orders expediting the application and approval process.

The Lode Gold project is in a so-called Opportunity Zone, which allows investors to reduce federal capital gains taxes by investing in economically neglected census tracts.

The land is privately held and under county jurisdiction, not federal.

A historic claim

The 3,351 acres encompasses several historic deposits, including Queen Specimen, Evans Mine, French Mine, Josephine-Pine Tree, Chicken Gulch and Ogle Lease Mine.

Collectively known as the Fremont Gold Mine, it anchors the southern end of the historic mother lode that stretches 120 miles north along the Sierra Nevada foothills.

Operations at the Fremont Mine ceased in 1942 during World War II because the U.S. government prohibited non-essential gold mining.

Before it was shut down, the previous owners were recovering 10.7 grams of gold per ton of ore processed. At that time, gold was only $35 an ounce.

There are two specific veins — the Pine Tree and Josephine — that Lode Gold considers relatively unexplored and fairly easy to access.

The mine still has a considerable amount of solid infrastructure, including two shafts, 14 access points, 27 miles of drilling and 14 miles of underground workings.

A new Gold Rush

Corrina Miranda, Mariposa County’s interim building director, recently told the Mariposa Gazette the renewed mining interest could be a “game changer” for the county and a unique development opportunity.

Last month the Mariposa County Development Services Department approved two administrative use permits for exploratory drilling.

Compass Land Group is involved in exploratory drilling between Rocky Gulch and Hell Hollow along the Bagby Grade on Highway 49 North.

The other applicant, Mariposa Gold Mines, LLC, is engaged in exploratory drilling on Highway 49 North and Old Toll Road, just west of the Mariposa Yosemite Airport.

And all that glitters is not just gold.

Blue Moon Metals received federal approval last year to mine for zinc, copper, silver and gold at its mine near Hornitos. The company has multiple projects in the United States and Norway.

The Blue Moon Mine has advanced more than 2,500 feet underground while conducting exploratory drilling and technical studies.

The company estimates their claim contains 436 million pounds of zinc, 54 million pounds of copper, 12,500 pounds of gold and 375,000 pounds of silver.

Only excavation is planned at the Blue Moon site. The ore is being processed at a separate location.

The Blue Moon Mine also ceased production in World War II.