Toronto, ON (March 28, 2019) - California Gold Mining Inc. is pleased to announce that the company's Board of Directors has approved a high-CBD industrial hemp seed propagation project on a portion of its 100%-owned, 3,351 acre Fremont property located in Mariposa County, CA.
The company also announces receipt of confirmation from Mariposa County's Planning Department that CGM will not be required to (1) seek re-zoning of the property, (2) obtain a Conditional Use Permit ("CUP"), or (3) complete a California Environmental Quality Act ("CEQA") review in order to implement its proposed plan to launch the industrial hemp project operations at Fremont.
With the recent passage of the 2018 U.S. Farm Bill, which removed federal prohibitions on the cultivation and sale of industrial hemp in the United States, subject to compliance with applicable regulations, CGM's management believes the timing of the county's confirmation is a very positive development for shareholders. Industry research organizations have been projecting substantial growth in the hemp-derived cannabinoid market over the next several years. One such organization, the Brightfield Group, published an article in September 2018 projecting the industrial hemp-derived CBD market could increase to over U.S.$22 billion by 2022.
Vishal Gupta, CGM's President and CEO states, "Given the prolonged down-trend in the junior mining sector, and scarcity of public capital for exploration-stage mineral resource companies, the company has been contemplating monetization of the property with a view towards generating positive cash-flow. To that end, the company conducted comprehensive research and due diligence on the industrial hemp sector over the past 10 months. We believe California Gold is entering the cannabinoid-rich industrial hemp space that is in its infancy, with tremendous growth potential lying ahead. Our 100% ownership of the land, the availability of water and power, the highway connectivity, the close vicinity of skilled and unskilled labour, and our location within the most populated state in the U.S., makes Fremont an ideal launchpad for CGM's high-CBD industrial hemp operations."
The company has retained the consulting services of Chicago-based Delta Valley Hemp ("DVH"), an industry-leader in industrial hemp cultivation that has decades of cultivation, seed propagation, permitting, crop insurance and wholesale brokering experience (both seed and flower biomass) in the U.S. cannabis space.
The company plans to propagate entirely feminized low-THC, high-CBD industrial hemp seed with stable genetics in a greenhouse (the "Greenhouse") that will be constructed on a portion of the property that is not currently used or needed in connection with its ongoing gold exploration business.
Based on their extensive experience in the industrial hemp sector, DVH estimates the 27,000 sq. ft. Greenhouse will generate roughly 2,000 – 3,000 pounds of this specialized seed in its first full year of operation. The seed is empirically proven to produce low-THC (< 0.3% concentration) and high-CBD (12% - 22% concentration) flower biomass. The current wholesale value for such seed is estimated to range from U.S.$15,000 to U.S.$30,000 per pound (based on seed sale prices obtained from Oregon-based Oregon CBD Co., and Colorado-based Blue Forest Farms and Cheyenne Mountain Seed Co.).
The Greenhouse is expected to have a total footprint of a little over one acre, and is projected to be operational in the third quarter of 2019. DVH anticipates four seed propagation cycles on an annualized basis, with each cycle having a duration of roughly three months and yielding 500 – 750 pounds of seed. CGM management is targeting realization of the company's first revenues from the sale of seed in the fourth quarter of 2019.
Forward sale of the company's first year's production of feminized industrial hemp seed is currently being negotiated.
The execution of this proposed industrial hemp project is contingent on the company obtaining additional permits from the county that include, but are not limited to, building permits, grading permits, water use and discharge permits and streambed alteration agreements. The company will also need to complete registration with the State of California and the county's Agricultural Commissioner. The project is also subject to the company obtaining adequate financing.
California Gold Mining Inc. is focused on continued development of a high-quality gold resource on its 100%-owned Fremont Property in Mariposa County, California. The Property consists of an entirely private and patented land package totaling 3,351 acres of historically producing gold mines, with a state highway, PG&E electric substation and abundant water present on the Property itself. The Property lies within California's prolific Mother Lode Gold Belt that has produced over 50 million oz of gold. The Company purchased the Property in March 2013. The Company is also investigating establishing a greenhouse-based propagation of high-CBD industrial hemp seed on the Fremont Property, the cash flow from which could be used to continue development of its gold business, with less dilution for shareholders.
The Company's technical report in respect of the Fremont Property prepared pursuant to National Instrument 43-101 is available on SEDAR at www.sedar.com and on the Company's website at www.caligold.ca.