California Gold Mining Strikes Gold in Illinois Hemp Operations
We’re very pleased to sit down with Mr. Vishal Gupta, the President & CEO of California Gold Mining (CA: CGM – $0.45 & US: CFGMF – $0.35 & GER: 613 – €0.31), as the Company will soon generate its first lucrative revenues from its new hemp business.
California Gold Mining Inc. is focused on the continued development of a high-quality gold resource on its 100% owned Fremont property in Mariposa County, California. The property lies within California’s prolific Mother Lode Gold Belt that has produced over 50 million ounces of gold. With only 800m from the 4km strike length drilled, CGM already reached an impressive mineral resource of 879,000 ounces of gold at Fremont.
However, due to the persistent downturn in the resource sector, the Company decided to diversify its business and establish a hemp cultivation business. In order to do so, CGM purchased the 82.42-acre Grove Road Farm located in Kendall County, Illinois. The 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.
Shortly thereafter, the Company secured its industrial hemp cultivation license from the Illinois Department of Agriculture, Bureau of Medicinal Plants. Once the hemp cultivation license was secured, 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.
Subsequently, in July 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 early October, 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. First significant revenues are expected in Q4 of 2019.
Next to outdoor growing, the Company plans to operate a 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.
As soon as the turnaround in the gold market is starting to have an impact on junior resource companies, CGM will use a portion of the cash flow from its hemp biomass and hemp seed operations to continue development of its Fremont project, causing minimal dilution for shareholders.
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