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California Gold Mines Restarting; Investors Take Note

Aug. 02, 2021 9:04 AM ETEQX, RYES, EQX:CA46 Comments
Tim Paul profile picture
Tim Paul


  • The home state of the historic gold rush hosts two miners poised to impact investors.
  • Castle Mountain mine in San Bernardino has restarted gold production after 15 years of inactivity.
  • Idaho-Maryland Gold Mine may restart gold production at 100,000 oz after war shattered operations in 1942. Nevada County location holds sub surface mining as an "allowed use".

Freeway crossing through golden hills
Sundry Photography/iStock via Getty Images

California earns a well deserved reputation for driving business and residents out of the golden state. After reading a 2019 recap of state mines, I offer some insights that should peak interest from gold mining

This article was written by

Tim Paul profile picture
I developed my acumen as a keen stock researcher, analyst and investor for 27 years, after having read the fabulous books written by Peter Lynch and Warren Buffett. I favor small-cap stocks since these are more likely to become doubles and triples.   I believe that holding undervalued stocks backed by hard assets (land, natural gas, oil, real estate, gold, silver) will continue to offer profitable returns. Investors have a great opportunity to purchase small micro-cap stocks since Wall Street largely ignores them. I only invest in companies with a strong balance sheet-typically with zero long term debt.The Federal Reserve has engaged in devaluing the fiat "dollar" through intentional inflation by creating digital (credits to Banks) and paper money. Gold holds value as real "money"  that can not be diluted by FED policy.  Currency failures are ripe in history and the United States is not immune from this danger.  Companies that hold substantially more cash assets than debt, will better survive downturns and Investors have an opportunity to capitalize on undervalued ,emerging stocks ahead of their stock price gains. Buying before the crowd offers lucrative gains, but you must be patient. I graduated from Boston College with a degree in Economics, and hold a Masters Degree in Sports Administration.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RYES either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I do not own shares in Equinox Gold (EQX).

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (46)

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This ill fated, doomed to failure proposal will not be tolerated. Even if Mossman has indeed bribed 3 supervisors to vote in favor of this fiasco, publicly induced litigation will see that this venture will never, ever, see the light of day. Mossman reneged on his promises and trashed the environment in his own nation, Canada, then declared bankruptcy, and then, cut and ran, leaving his own bretheren to foot the bill to clean his toxic mess of failure.
Do you expect Mossman to treat another nation, USA, a nation where he has no loyalty, any differently than how he treated Canada?
We, in Nevada County, will NEVER allow this cretin to harm our community...
H Rose
07 Aug. 2021
With all due respect, Mr. Paul, I believe it’s a conflict of interest when you advocate investing in a company that you own stocks in. The objective truth is that this is a bad investment. Mr. Mossman, CEO of Rise Gold, is still in hot water for the mess he left on Gitxaala land. It WAS one of the most important food gathering areas that they had used for thousands of years. The people of Grass Valley are not stupid and anyone who looks at the details of this mine and the fact that approximately 300 residents in the vicinity will loose the quiet enjoyment [Quiet enjoyment is a right to the undisturbed use and enjoyment of real property by a tenant or landowner. The right to quiet enjoyment is contained in covenants concerning real estate.] It’s already happening and not many in the community support this mine. We do need jobs, but not at the expense of everything else.
Beware investments that look too good to be true. Rise Gold is one to be sure. The opposition is so strong in the community (www.minewatchng.org) that CEO Ben Mossmand hired a marketing firm to create a grossly misleading poll, then used it to claim that the majority of residents support the mine (www.theunion.com/opinion/columns/darrell-berkheimer-mine-snow-job-fails/). Mr. Mossman is also still in court in Canada facing charges for his previous mining venture, which polluted tribal waters and went bankrupt.
Gold is likely rangebound, but might go lower from here.
If the greater market plunges, gold isn't going to levitate. No gold position.

The malicious "anti-American" conspiracies about CA being a terrible place are false. A minority of extremists like to perpetuate the myth that CA is a failed state, a train wreck, a lost cause, etc (take your pick of the absurd) but as such tantrums persist, CA "still" has the 5th largest economy on the planet.
No other place in the USA can claim a better or stronger economy.
It's almost as if facts no longer matter to the desperate barbarians.
Tim Paul profile picture
@1504661 California had the highest poverty rates in the nation based on the Census Bureau's cost-of-living-adjusted standard. Last year, 135,000 more Americans left the state than came here. The California exodus is a real phenomenon.
If you are a regular reader of these editorial pages, you know about the state's myriad challenges (all of which predate the pandemic): median home prices of more than $750,000 statewide and above $1 million in some metro areas; an exploding homeless crisis; crumbling infrastructure; water shortages; lousy public schools; growing crime rates; and various governmental scandals. Is the Census lying?
The CEO’s first gold mining venture went bankrupt & left Canadians a toxic mess to cleanup. Not a good track record when looking to invest in a company. Plus the community has moved past its industrial era over 50 years ago and is now a thriving eco tourist, art centric and budding tech community.
Sandy Lighthouse profile picture
@Zookcheryl00001 Pretty much nailed it. Sometimes in a more rural location that is true to its blue collar roots (like Jackson) these kinds of things can gain traction. But Grass Valley doesn't fit this description and is a bedroom community for ultra liberal Sacramento.
Sandy Lighthouse profile picture
I wish Rise luck. The mine is almost in the town of Grass Valley and it's not the percentages of voters, it's who can raise the biggest stink.
Tim Paul profile picture
@Sandy Lighthouse Nevada County Board must approve the permit on a majority vote. With 5 Board members, it will require 3 yes votes. The Board is supportive of reopening this historic mine, assuming a 3rd party Consultant report confirms there will be no significant environmental issues.
@Tim Paul the Board has not stated that they are supportive of the mine, so this is untrue. Also there would need to be a rezoning of the parcel. According to the general plan, extractive mining is not light industrial. and any Board members that vote in favor of this will be voted out of office next year.
Sandy Lighthouse profile picture
@Tim Paul I don't see how there can't be noise and dust issues being essentially in town.
BeaBaggage profile picture
with POG at 1800 or so, we are seeing a lot of incremental mining coming online as some of these places are profitable.. the World Gold Council report shows increasing central bank buying, weak Indian buying as you'd expect and of course the fickle ETF trading.. overall though miners have done a good job of controlling costs without going crazy in projecting development at high prices. So overall I still think most miners offer good value w strong free cash flow etc.
Tim Paul profile picture
@BeaJawa True. Cash flow is gushing across most miners. The country is experiencing devastating inflation in cost of living due largely to the devaluation of our currency by the FED. Gold prospers as a hedge against price inflation since it can not be printed or created out of thin air. Supply is limited, while the FED's ability to print dollars is unlimited. My reading of currency history leads me to believe that our currency will not survive. Gold becomes the most widely held money to back a new currency.
BeaBaggage profile picture
@Tim Paul yes I am long several and will add EQX to my watch list. MX has become increasingly hostile to mining under AMLO but u/e is a bad thing for any 2nd or 3rd world country so this should pass. Pays to be diversified across several miners for sure as there is always a 'pothole' somewhere with even the best of them. Bea
fhbecker profile picture
Be very careful when investing in companies principally located in CA. Look to China to see what happens when the government wants a piece of what you have.
Tim Paul profile picture
@fhbecker That is why this investment is "speculative". California is falling apart due to government mismanagement-can not even supply electricity to residents. This Idaho-Maryland mine is a restart of an existing mine, located on land that allows "mining". The county holds jurisdiction as opposed to the Governor. Jobs and tax revenue are badly needed as residents flee the state in the thousands every day.
fhbecker profile picture
@Tim Paul Excellent points, fully agree with your speculative call. After my PG&E experience, I prefer to just avoid CA, as their politicians have a knack for changing the law to get re-elected. Ok, many other state's politicians also have that knack.....
Tim Paul profile picture
@fhbecker good points.
You might want to look deeper into Rise Gold. The survey they took locally was a sham. There is tremendous local opposition to this mine. Tremendous concerns about water, traffic, dust, the environment. This mine will not pass and if it does it will be with a LOT of backlash. People do NOT want this mine. You should do better research before representing the local community. Rise Gold is mining paper- don't be sucked into them.
Tim Paul profile picture
@turtle108 I have performed extensive research into Rise Gold. In California, there is local opposition to everything but solar panels and electric powered vehicles it seems. You are entitled to your opinion and I suspect you are an unhappy local, but I stand by my article and do not tell me that I should do more research when you have no idea what you are talking about.
@turtle108 - You wrote: "There is tremendous local opposition to this mine. Tremendous concerns about water, traffic, dust, the environment. This mine will not pass and if it does it will be with a LOT of backlash."

I am confident this is true. This is exactly why I will not invest in California businesses with predominate in-state operations. The anti-business climate is pervasive. No new gas stations or pumps in Petaluma. No new nuclear. No new oil refineries. All new homes required to have solar. Prop 65, which is a national punchline to jokes. Now, the attitude of "no mining", rather than "we can find a compromise." I plan to stay here in Texas where we citizens and governments work with businesses to create jobs. Of course that excludes Autin which is becoming known as California Texas.

- Hoosier
Tim Paul profile picture
@Hoosier1978 much truth in your take. Always exceptions to the majority rule. Equinox Gold restarted Castle Mountain mine-San Bernardino county in 2020-open pit mine with heap leaching. Rise Gold mine is an underground mine (less invasive)located on private property, which is deeded for mining.
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