★ Randall J. Newsome: Thar’s gold in those promises?
It takes a considerable amount of magical thinking to believe Rise Gold will ever create a single job. The company is grossly undercapitalized and their average worker salary calculation is very misleading. This op-ed by retired bankruptcy judge, Randall J. Newsome is well worth the read.
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?
Read the rest in The Union
Randall J. Newsome lives in Nevada City.