California Gold Mining (TSXV: CGM; US-OTC: CFGMF) is drilling a new target at its flagship, 100%-owned Fremont gold project in Mariposa County, Calif., as it tries to establish a second resource on the property.
The new zone, called Queen Specimen, is 750 metres in strike length and located on the northwest part of the Fremont property. The latest results come from a drill program that California Gold began in early December 2017. Highlights include: 1.22 grams gold over 28.4 metres from 115 metres downhole, 0.9 gram gold over 10.4 metres from 158 metres downhole and 1.14 grams gold over 9.2 metres from 219 metres downhole.
So far, 4,200 metres have been drilled. If it can secure financing, California Gold will drill 10,500 metres across 60 holes to 180 metres deep.
“I’m moving ahead, assuming that we will have the funding in place,” California Gold president and CEO Vishal Gupta says in a telephone interview with The Northern Miner.
“We’ve got a group of shareholders that are very loyal and supportive, but my preference would be to not go back to the same guys over and over again, because we’re looking to run this like a public company. My preference would be to get new shareholders in at all times.”
California Gold closed a financing for $920,000 in early March. It wants to do another couple of rounds of financing to raise $2.5 million. At that point it would be fully funded to complete its drill program.
California Gold bought the Fremont property in 2013 from private owners for $5.5 million. It covers 4 km in strike distance of California’s 200 km long Motherlode gold belt, which was prolific from 1849 right up to the Second World War.
“To help with the war effort, all the gold mining equipment was transferred to nickel mines and iron ore mines and tungsten mines to make more artillery shells, tanks and ammunition,” Gupta says. “That killed the gold industry in California.”
In the 1980s, a company called Goldenbell Resources leased the Fremont property and completed a full feasibility study based on a resource located within a 1 km strike. Gupta says its non-National Instrument 43-101 compliant resource stood at 1 million oz. gold in a conceptual open pit, and another 1 million oz. gold in a conceptual underground mine beneath the open pit. However, Gupta says that due to a falling gold price, the company never took the project into production.
Since acquiring the property, California Gold has redrilled Goldenbell’s open-pit resource. It redefined Goldenbell’s near-surface resource and called it Pine Tree-Josephine. It sits at 9.3 million indicated tonnes grading 1.71 grams gold per tonne for 515,000 oz. gold, plus 7.8 million inferred tonnes grading 1.44 grams gold for 364,000 oz. gold.
“Instead of drilling below that resource and coming up with underground ounces, we’re just expanding along strike, and we’re drilling in a second kilometre of strike called the Queen Specimen zone,” Gupta says.
He expects that by this year’s third quarter, California Gold will have completed the drill program and released a new resource estimate. He adds that while he would consider drilling deeper into Pine Tree-Josephine, deeper holes are more expensive and more time consuming.
“If we’ve got a market cap that is very healthy and a pretty healthy treasury then sure, why not?” he says.
The Fremont property is 240 km east of San Francisco and 22 km from the largest population centre in Mariposa County, the town of Mariposa, which is home to 2,000 people — or a tenth of the county’s total population. Gupta notes that if the project went to production it would be the county’s largest employer. He adds that Mariposa County is one of the few counties in the U.S. that is the “lead agent” when it comes to environmental permitting. As a result, he says, there’s a lot of local incentive and community support for the project.
“This is like Elko, Nevada,” Gupta says. “This is not ‘California.’ You’ve got the highest conceal and carry gun rates in all of California in this county. You’ve got 10-gallon cowboy hats worn by everyone. This is not where the rich and famous of California go and build their cottages.”
The Fremont property is accessible via highway and hosts an electric substation that Gupta says holds “lots of excess capacity.” The company has a private well on its property and an agreement with the Merced irrigation department, which controls the sale of water from the Merced River, located just north of the property, to buy water for US$200 per 1.2 million litres.
“It’s a mixed bag,” Gupta says. “We are in California, which is challenging, but we are on completely private land. And from a permitting perspective that goes a long way.”
The company also has its Dingman gold property in southeastern Ontario, 55 km north of Belleville. The company acquired the property in 2010. It has 11.6 million indicated tonnes grading 0.97 gram gold for 361,000 oz. gold, and 1.7 million inferred tonnes grading 0.73 gram gold for 40,000 oz. gold, at a cut-off grade of 0.4 grams gold.
Shares of California Gold are valued at 21¢ with a 52-week range of 20¢ to 64¢. The company has a $10-million market capital.