CALIFORNIA GOLD ACQUIRES 82-ACRE PRIVATE FARM IN
ILLINOIS AND COMMENCES OUTDOOR CULTIVATION OF HIGH-CBD INDUSTRIAL
HEMP BIOMASS
Toronto, Ontario - California -- July 17, 2019 -- InvestorsHub
NewsWire -- California Gold Mining Inc. (“California Gold” or the
“Company”) (CSE:
CGM) (OTC-QX:
CFGMF) is pleased to announce that it has completed the
purchase of a private 82.42-acre contiguous parcel of agricultural
farm land in Kendall County, Illinois (the “Grove Road Farm”) and
has commenced outdoor cultivation of high-CBD industrial hemp
biomass on approximately 40 acres.
California Gold’s President and CEO, Vishal Gupta
stated, “The acquisition of the Grove Road Farm provides California
Gold with an opportunity to take advantage of the outdoor
cultivation season this year, in addition to the development of the
Company’s first greenhouse for industrial hemp seed propagation
scheduled for completion in Q3 2019. The close proximity of our
Chicago-based cultivation consultants Delta Valley Hemp, highly
fertile soil, access to abundant water, expansive network of paved
roads, proximity to three-phase power, and locally available
skilled farming labour, make the Grove Road Farm an ideal launching
pad for the Company’s industrial hemp division. The field has been
successfully planted and harvest is anticipated in late-September.
We expect revenue realization in October 2019.”
Mr. Gupta went on to say in respect of the Company’s
mining exploration activities, “With the recent uptick in the price
of gold, there has been an increase in investor interest in the
precious metals sector. We are keeping a close eye on the junior
gold space and hope to re-commence drilling at the Queen Specimen
mineralized zone on our Fremont property in Mariposa County,
California before year-end. We entered the high-CBD industrial hemp
cultivation space with the primary objective of potentially using
positive cash flow from our hemp operations to fund future
exploration and development of our gold asset. We endeavour to
achieve that objective in the coming months.”
The Company is also pleased to announce that the
US$3.0 million credit facility previously announced in a press
release on April 3, 2019 has now been secured from Toronto-based
alternative credit firm Romspen Investment Corporation
(“Romspen”).
Details of Outdoor Cultivation
Operation
The Company has already secured its industrial hemp
cultivation license for the Grove Road Farm from the Illinois
Department of Agriculture, Bureau of Medicinal Plants. The license
needs to be renewed on an annual basis.
Once the hemp cultivation license was secured from the
State of Illinois, 130,000 feminized industrial hemp plantlets,
with demonstrated high-CBD (10% - 20%) and low-THC (less than
0.30%) concentration, were purchased in California and transported
to a rented greenhouse near the Grove Road Farm. Concurrently, the
Company purchased a variety of farm equipment, including a
trans-planter, tractor, power harrow, pick-up truck and
plasticulture tools. Over the past two weeks, the entire 130,000
plantlets were successfully planted on approximately 40 acres of
the Grove Road Farm.
Management expects the harvest to take place in late
September, with a projected yield of 100,000 – 130,000 pounds of
high-CBD content flower biomass.
The Company is currently negotiating “toll-processing”
contracts with third-party isolation facility operators. Under a
“toll-processing” scenario, the Company would deliver its harvested
biomass to be processed into CBD isolate by paying a fixed fee per
pound to the operator. The revenue generated from the sale of CBD
isolate is expected to be several times greater than revenue
generated solely from the sale of unprocessed biomass.
Details on isolation parameters and projected revenue
from the sale of CBD isolate will be provided once a
toll-processing contract has been approved by the Company’s Board
of Directors.
Romspen Credit Facility Secured
The principal terms of the credit facility are as
follows:
-
12.0% per annum rate of interest;
-
12-month term with an additional 12-month extension at
California Gold’s option;
-
Interest-only payments which will begin on the earlier
of (a) November 1, 2019, and (b) the date California Gold achieves
positive cash flow from operations;
-
California Gold can pre-pay the entire principal
amount upon providing Romspen with one month’s written notice;
-
The facility is secured by a first lien on the
Company’s Fremont property; and
-
California Gold has issued Romspen 300,000 common
share purchase warrants with an exercise price of $0.50 and an
expiration date 24 months from the date of issuance. Such warrants
and the underlying common shares are subject to a hold period
expiring four months and one day following their issuance.
The use of proceeds from the Romspen credit facility
are as follows:
-
Initial advance of US$1.5 million to be used for the
purchase of the Grove Road Farm in Kendall County, Illinois and for
working capital for the outdoor cultivation operation.
-
The remaining US$1.5 million will be used for the
development of a greenhouse-based seed propagation operation on the
Fremont property in Mariposa County, California.
More About the Grove Road Farm
The 82.42-acre Grove Road Farm property was purchased
for a total price of US$822,140. It is located just west of the
town of Shorewood and just south east of the town of Plattville, in
Kendall County, Illinois – roughly an hour and 20 minutes west of
Chicago by road.
The farm has an average corn yield of over 160 bushels
per acre owing to its extremely fertile soil, hence minimal soil
remediation was required in preparation for the planting of the
Company’s industrial hemp crop. The farm is laser-leveled and
pattern-tiled through its entirety, which makes it much easier to
work on and prevents standing water following heavy rainfall.
The property has ready availability of three-phase
power, water for irrigation and skilled farming labour. It is
located at the intersection of two major roads.
Initial Greenhouse Re-Located to
Illinois
Due to the delay in the roll-out of industrial hemp
registration, sampling and testing protocols in the State of
California, the Company’s Board of Directors approved the
relocation of CGM’s initial greenhouse from the Fremont property in
California to the newly-purchased Grove Road Farm in Illinois. This
relocation will result in significant savings in operating costs,
as Delta Valley Hemp will manage both the greenhouse seed operation
and the outdoor biomass operation on the Grove Road Farm
simultaneously, instead of managing the two operations in separate
jurisdictions.
Additionally, since the Grove Road Farm is located in
a rural agriculture-exempt region of Illinois, there is no
requirement for a building permit to construct a greenhouse on this
property, thereby shortening the timeframe for construction and
build-out.
The Company plans to use the 27,000 sq. ft. greenhouse
for propagation of entirely feminized, low-THC, high-CBD industrial
hemp seed with stable genetics. The greenhouse is expected to be
operational towards the end of Q3 2019. The first seed cycle is
expected to be complete by the end of the year.
About California Gold Mining
Inc.
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 Fremont
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 Fremont property lies within
California’s prolific Mother Lode Gold Belt that has produced over
50 million ounces of gold. The Company purchased the Fremont
property in March 2013.
The Company is also in the process of establishing an
outdoor, high-CBD industrial hemp biomass cultivation operation
along with greenhouse-based propagation of high-CBD industrial hemp
seed on the newly-acquired Grove Road Farm property in Kendall
County, Illinois. The Company plans to use a portion of
cash flow from its hemp biomass and hemp seed operations to
continue development of its gold business, with minimal 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.
CAUTION REGARDING FORWARD-LOOKING
INFORMATION
This news release of California Gold contains
statements that constitute “forward-looking statements”. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause California Gold's
actual results, performance or achievements, or developments in the
industry to differ materially from the anticipated results,
performance or achievements expressed or implied by such
forward-looking statements. Forward-looking statements are
statements that are not historical facts and are generally, but not
always, identified by the words “expects”, “plans”, “anticipates”,
“believes”, “intends”, “estimates”, “projects”, “potential” and
similar expressions, or that events or conditions “will”, “would”,
“may”, “could” or “should” occur. Forward-looking statements in
this document include statements regarding the entry into formal
agreements and availability of funds to the Company, the Company’s
industrial hemp seed project and its potential success, the
Company’s industrial hemp biomass cultivation project and its
potential success, the timing of the Company’s initial harvest of
biomass, the timing of the Company’s initial harvest of seed, the
yield and volumes of industrial hemp biomass that may be produced
by the project, the yield and volumes of industrial hemp seed that
may be produced by the project, potential sales of any such
industrial hemp seed or biomass or derivatives thereof by the
Company, Delta Valley Hemp or any other party on behalf of or for
the Company, revenue that may be generated by the industrial hemp
seed project, revenue that may be generated by the industrial hemp
biomass cultivation project, the ability to obtain permits and
approvals that are required before the Company can begin operations
in respect of the industrial hemp seed project, the ability to
obtain adequate financing for the project, the timing of completion
of the hemp greenhouse and the beginning of project operations, the
number of seed propagation cycles that may be achieved on an
annualized basis, the suitability of the Grove Road Farm property
for the location of the hemp greenhouse and the cultivation of
industrial hemp seed, among others. There can be no assurance that
such statements will prove to be accurate. Actual results and
future events could differ materially from those anticipated by
such statements, and could materially affect the Company’s results
of operations. Readers are cautioned not to place undue
reliance on forward looking statements in this press release.
California Gold does not undertake any obligation to update these
forward-looking statements in the event that management's beliefs,
estimates or opinions, or other factors, should change, unless
otherwise required by law.
Neither the Canadian Securities Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the Canadian Securities Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
For further information contact:
Vishal Gupta, President & CEO
Tel.: 647-977-9267 x333 | Website: www.caligold.ca
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