Mine hits financial, time snags | TheUnion.com

Mine hits financial, time snags

Dave Moller
Senior Staff Writer

The controversial Idaho-Maryland Mine project is “on hold,” according to mine CEO David Watkinson after a funding source recently fell through.

“We’re going slowly until we get the funds to move forward to complete the EIR,” or environmental impact report, Watkinson said Friday.

“Anything that delays it is good,” said Ralph Silberstein, a leader in the mine’s opposition group, Claim-GV. “The more time we can have with clean air and less pollution, the better.”

In July, the mine’s parent firm, Emgold, and Watkinson said they were seeking up to $6 million, with $2.9 million in interim financing from Dunn Capital Partners to pay for the completion of the report.

Emgold recently announced it had cut off negotiations with Dunn. Watkinson said his firm was partly scared off by a lawsuit filed by another company against Dunn for allegedly not coming through on a similar financing deal.

Since then, “We’ve had another firm come in, but they want to wait until we consolidate the company,” with a 10-1 stock rollback designed to drive the costs of Emgold’s shares up.

The move would push Emgold shares out of their penny-stock status. Emgold was trading for 6 cents on the Canadian stock market Friday.

Watkinson said he could not divulge who the new financier is, but expected the announcement in a few weeks when the consolidation is complete.

“We’re still four years away from production,” Watkinson said. Prior to that, the mine will have to complete the environmental report, get the permits to open and dewater the shafts before any gold is extracted.

The environmental report will have to be reissed to the public because the project was changed by eliminating the water treatment plant on East Bennett Road.

The plant was going to be used to dewater the mine and send treated water down the south fork of Wolf Creek.

Now the plan is to pipe the water from the New Brunswick shaft across the property to another treatment plant next to the planned main operation along Idaho-Maryland Road.

The mine corporation will also have to pay to reissue the environmental report, according to Grass Valley Planning Director Tom Last.

What that will cost is unknown as Idaho-Maryland has submitted nothing in writing about the changes. The mine corporation has already given the city $1 million to pay city consultants ESA of Sacramento for earlier environmental report work.

“We’ll have to sit down with the consultant to see what type of information and analysis we’ll need,” Last said. “I don’t know what it will take until we get the revised project description.”

The mine may also move out of its rented headquarters on Clydesdale Court above the mine property to save operating costs, Watkinson said. The property is up for sale or lease and Watkinson said the firm does not need the entire 44,000 square feet and would prefer to lease with another tenant if it stays.

The Golden Bear Ceramics plant at the site is also “in a holding pattern,” Watkinson said, because of a lack of financing.

The company is seeking financing for the plant that would produce building tiles from mine waste, but “It’s hard to raise money for it right now,” given the economy, Watkinson said.

To contact Senior Staff Writer Dave Moller, e-mail dmoller@theunion.com or call 477-4237.

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