Resource World Magazine

A U G U S T / S E P T E M B E R 2 0 1 9 www.resourceworld.com 53 MINING Industrial hemp funding California Gold exploration by Ellsworth Dickson M ake no mistake – this is NOT a marijuana or cannabis story. This is a story of how totally legal, industrial hemp seed production is funding the exploration and resource expan- sion of the Fremont gold project in Mariposa County, California. The 100%-owned, patented, 3,351-acre property of California Gold Mining Inc. [CGM-CSE; CFGMF-OTCQX] is the site of about two dozen past-producing underground and open pit gold mines. Already, extensive diamond and reverse circulation drill holes have delineated significant gold mineralization at this property that remains open to expansion along strike and at depth. An October 2016 NI 43-101 resource estimate by mining consultants Roscoe Postle Associates stated that indicated and inferred open pit-style resources (in the Pine Tree-Josephine Zone only) totalled 17,212,000 tonnes grading 1.60 g/t gold, for 879,000 contained ounces. This current resource covers 800 metres of the 4-km strike of the Mother Lode shear zone at Fremont. There are also five additional mineralized zones on the Fremont property. The present drill program is part of a 10,000-metre (35,000 feet) program which is about halfway through. During the fourth quarter this year, a resource estimate is expected to be released for the area known as the Queen Specimen Zone. Recent drill - ing at the Queen Specimen Zone has returned intercepts such as 4.67 g/t gold over 14.9 metres, including 22.91 g/t gold over 1.8 metres, and 10.64 g/t gold over 3.4 metres, including 27.64 g/t gold over 1.2 metres. Company geologists have noted that the style and tenor of gold mineralization at the Queen Specimen Zone is similar to the cur - rent resource style of mineralization at the Pine Tree-Josephine Zone. Mineralization also remains open to depth. Typical Mother Lode gold deposits continue to depths beyond 3,500 metres with historical grades of 5-11 g/t gold. Metallurgical studies have been successful. 93% gold recov - eries were achieved for the oxide cap zone (~10% of resource tonnage) and 94% gold recoveries were achieved from a gravity + flotation concentration circuit for the quartz-hosted sulphide zone (~40% of resource tonnage). For the sulphide replacement zone (~50% of resource tonnage), gravity + flotation recoveries were 86%. To finance gold exploration activities, the company is con - structing a 27,000 square foot greenhouse in which it plans to grow feminized, low-THC, high-CBD industrial hemp seeds. The (December) 2018 US Farm Bill classified industrial hemp as an Agricultural Commodity, excluding it from classification as marijuana. This means that industrial hemp farmers can access financing, crop insurance, grants and certifications. Interference of interstate commerce of hemp products is expressly prohibited. California Gold Mining plans to have the greenhouse operational sometime this fall. With a new harvest every three months, the company expects to produce 2,000 to 3,000 lbs of hemp seeds from one greenhouse per year. Each pound of this specialized hemp seed contains roughly 30,000 seeds, with wholesale prices ranging between US $30,000 and US $50,000 per pound. According to Vishal Gupta, M.Sc., P.Geo., President and CEO, the reason the company's hemp seeds are so valuable is because, "Our hemp seeds are super rich in cannabinoids (especially CBD), hence they are worth a lot." The end use for the company's hemp seeds will be numerous medical purposes for treatment of chronic pain, PTSD, multiple sclerosis and epilepsy, to name a few. In April, California Gold Mining received a Letter of Intent from Chicago-based industrial hemp cultivation consulting firm Delta Valley Logistics for the purchase of the company's entire production of feminized, high-CBD industrial hemp seeds in 2019 and 2020, estimated to be in the order of 5,000 lbs. Delta Valley Logistics will conduct all operations related to the seed cultivation project. It is expected that the total greenhouse Capex and Opex for the first 12 months will be US $3 million. A US $3 million credit facility has already been secured. The Fremont property features a paved highway, an elec - tric substation on the property, a private well on the property and access to two others. The nearby Merced River is an excel- lent source of water for a potential mining operation. Mariposa County is favourably predisposed to granting environmental per- mits, for both the agricultural and mining aspects of the Fremont Project as the area is in need of jobs and tax revenues. The project site is 20 km from the town of Mariposa. n Diamond drilling at the Fremont gold project in Mariposa County, California. Photo courtesy California Gold Mining Inc.

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