This retired economist says we need to look at the proposed mine with eyes wide open. Requesting an 80-year permit is extreme. The risk is very high. A large bond is most certainly a requirement, if Rise Gold can find the funds to do it.
This opinion piece was originally published in The Union.
I have studied with much interest and concern about the application of Rise Gold to reopen the Idaho-Maryland Mine. The potential environmental impacts are serious, as reported in the draft environmental impact report.
In their application, Rise Gold is proposing extensive mining operations that could greatly alter the peaceful climate of Grass Valley, disrupt normal commerce, and re-create the very dangerous industry of underground mining.
When considering the viability of such a corporate development proposal, it calls upon good business practices to ask for the credentials of the applicant, require proof of economic viability, a business history, and the resume of the representative leadership.
I have learned that Rise Gold is a speculative company. They have no business history. The present stockholders are gold investors throughout the United States., Canada, off shore, and Wall Street.
It is a company formed without the capital needed for the project, but raised money through loans and stock sales to get the land, pay for environmental impact report consultants, and hire a public relations firm.
Some commentators on gold-driven companies say they mine stock value, and hope for gold. They are creating profits by manipulating value as they use government processes and public relations.
The permit, if ever granted, would multiply stock values. That permit could then be sold.
A glaring and shocking fact that I uncovered is that the Rise Gold’s present CEO has previously been embroiled in a failed mine, financed in this same way, up in British Columbia. The corporation he managed, called Banks Island Gold Ltd., declared bankruptcy when the government ordered the mine closure.
The mine’s safety engineer became a whistle blower, sending photos of damage to government officials, bringing in helicopters and regulators. At that time there were 35 charges of failed compliance regarding environmental and safety standards.
Court cases continue with fines and appeals of this CEO’s role in the mine failure.
The mine is located on Banks Island, off shore from Prince Rupert, and is within territory of the Indian Gitxaala Nation. They are outraged with the damage, possible destruction of traditional bird, fish and animal habitat, and the mess that must be cleaned up.
The costs of remuneration are hundreds of thousands of dollars, with the public and the government of British Columbia stuck with most of the cost. Banks Island Mine Ltd. did not post adequate bonds to cover such potential damages.
A sad personal story is that the employees of Banks Island Mine Ltd. did not receive their severance benefits. Also there are pages after pages of unsecured creditors that were not paid.
Nevada County must look at the Rise Gold application with extreme caution. I read from newspaper accounts and Rise Gold’s press releases that the application is costing a huge amount of money. There are hundreds of hours of county and related agencies staff time, and for the volunteers on the planning commission, and much angst, concern and interest of the general public.
It’s very interesting that even Rise Gold itself cautions investors and states on its website: “No current mineral resources or mineral reserves have been defined … The company has not completed a feasibility study to establish mineral reserves and therefore has not demonstrated economic viability for the Idaho-Maryland Mine.”
And also, very concerning is this from the Securities and Exchange Commissions reports about Gold Rise’s publicity: “ … such press releases that contain forward looking statements within the meaning of applicable securities laws … Words such as plan, expect, intend, believe, anticipate, and estimate that certain events or condition may or will occur, accordingly readers should not place undue reliance on forward-looking statements and information contained in this release.”
Rise Gold stated the estimated cost of the project would be $100 million for full development. They have requested an 80-year permit, which is extreme, into the next century! That’s four generations into the future.
To ensure the viability of the applicant, the county should require Rise Gold to post performance and environmental safety bonds to continue being a permit applicant. I suggest 7%, or $7 million.
We need to look at this with eyes wide open. Without such safety, we could end up like other towns, and rural areas that were left holding the bag by gold mines for failed promises and non-redeemable environmental damages.
Good insurance covering loss and liability is a common practice and should be required to help safeguard our county’s economic, environmental and civic vitality.
Rondal Snodgrass has been a conservation land consultant in California for over 30 years and holds a degree in economics from the University of Oregon. He lives in Nevada City.
NOTE: After this opinion piece was published, NID's (Nevada Irrigation District) general manager also commented on the Draft Environmental Impact Report and requested a $14M bond solely for the purpose of protecting well owners in the neighborhood of the mine. Read about it in the Union article "Hung out to dry: Well owners contend with report's findings".