California Gold Mining Inc (CNSX:CGM) Pivots Business Plan

California Gold Mining Inc. (CSE:CGM) CEO Vishal Gupta joins James West again to discuss company developments. The company was poised for launching its hemp operations in California but has since pivoted into Illinois with the recent purchase of an 82 acre property. In remaining true to their word and committing to being cash flow positive before the end of this year, California Gold purchased the most fertile pieces of land that they’ve come across giving them an opportunity to take advantage of the outdoor cultivation season in Illinois for the calendar year of 2019.

Transcript

Narrator: California Gold Mining, Inc. is focused on continued development of a high-quality gold resource on its 100 percent owned Fremont property in Mariposa County, California.

The property consists of an entirely private and patent land package totalling 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 ounces of gold. California Gold is also investigating establishing a greenhouse-based propagation of high-CBD industrial hemp seed on the Fremont property.

California Gold Mining trades on the CSE under the ticker symbol CGM.

James West: California Gold Mining CEO Vishal Gupta joins me in studio now. Vishal, welcome back.

Vishal Gupta: Thank you very much for having me again.

James West: Vishal, let’s have an update: what has happened since the last time we chatted with California Gold Mining?

Vishal Gupta: Well, last time we chatted, we were in the process of launching our hemp operation on our wholly-owned Fremont gold property in California. Since then, we’ve had a bit of a pivot towards Illinois, and the reason for that is, the California Department of Food and Agriculture was a little slow in rolling out its registration, its sampling and testing protocols for industrial hemp cultivation in the state, and we had made a commitment to our shareholders that we would be cash flow positive before the end of this year.

And we decided that, you know, while it was taking a little bit longer for the California State Department to come out with its registration and sampling and testing protocol process, we would look for an alternative source, or I should say, an alternative property to launch our hemp project on. And about three months ago, we got an inkling that this was the case, and we started searching for an alternative piece of land, and we came across this fantastic piece of property in Illinois, just about an hour and ten minutes west of Chicago. And this property, 82 acres, we completed the purchase of it about, you know, two and a half, three weeks ago. And that will be the new launch site for our industrial hemp project.

James West: Very cool.  So tell me, what’s the pivot to Illinois about? Is that to get an Illinois sort of license and everything?

Vishal Gupta: Well, everything. I mean, where to begin? So first thing is that our exclusive cultivation partners, Delta Valley Hemp, are actually based in Chicago, so it makes a lot of sense for us to be, you know, involved in the neighbourhood where they are. 

Our operating costs for our hemp project would be much lower in that sort of a scenario rather than, you know, trying to set up a satellite office in California, and having people travel back and forth. Here, you know, the Delta Valley Hemp folks can go to work in the day, you know, during the day, come back home at night, and you know, it’s going to be very convenient for all the parties involved. That’s one of the reasons why we did this.

The second reason is that this piece of land is actually very, very fertile. And you know, it’s got a corn score of between 160 and 195 bushels per acre.

James West: Wow.

Vishal Gupta: That’s one of the most fertile pieces of land that we’ve come across, and it gave us the opportunity to actually see if we could take advantage of the outdoor cultivation season in Illinois for the calendar year of 2019. Initially, you know, just in California, we were looking at only doing our industrial hemp seed propagation process that was greenhouse-based.

James West: Sure. Yeah.

Vishal Gupta: This property provides us with the opportunity to take advantage of the outdoor cultivation season in Illinois and see if we can have a biomass cultivation crop that can be cultivated for, you know, the remaining months in the summer of 2019.

The third thing, of course, is that Illinois is very, very fast in processing hemp licenses. The hemp license that we obtained took three business days flat.

James West: Really?

Vishal Gupta: And you know, the hemp license is not acquired from the county, the local county; it’s actually acquired from the, it’s obtained from the State Department, Department of Agriculture, which is at the state level. And you know, the state is very conducive to, you know, hemp operations being cultivated within its state boundaries. And so we were, you know, quite fortunate. We found this property at the right time, and for all those three reasons, this was a perfect pivot for us.

James West: Wow. So that’s amazing. So now you’re going to be producing seeds, you’re going to be producing hemp, and obviously, CBD from that. Now, tell me that you’re going to be producing gold, I’ll be buying another whack of shares.

Vishal Gupta: Well, before I go there, let me just explain the business opportunity that we see on the outdoor cultivation side. 

James West: Okay.

Vishal Gupta: So we got our license, we purchased 130,000 seedlings of very high CBD content seed, we’ve got the COAs that prove that the same strains have been used for some very high-CBD cultivation before. So, 130,000 seeds have already been planted in the field. You know, I just got some pictures a couple days back; the plants are looking very, very healthy. 

We’re expecting our harvest to take place at the end of September, early October. Now, initially, we were thinking of just selling the biomass, and that biomass itself would be a pretty big revenue generator for us. But right now, we are in the process of negotiating a toll processing contract with three separate, you know, extraction/isolation companies that are out there, already operational, that would be interested in doing business with us.

So for a fee, we could get our biomass processed into CBD isolate or full-spectrum extract, and the sale, you know, the revenue that we would generate from the sale of full-spectrum extract or CBD isolate would be four to five times greater than what we could generate by just selling our biomass.

So we’re in the process of negotiating those contracts right now. The expectation is that over the next week, maybe two weeks or so, we’ll come to a contractual agreement, of course, yet to be approved by the Board of California Gold Mining, as well. And once the Board approves it, we have a contractual agreement, then you’ll see some pretty positive news coming out on that front, as well.  

James West: Sure. So, toll extraction is readily available throughout the United States, I guess, at this point in the cannabis industry?

Vishal Gupta: Absolutely. You know, we’re also, you know, as I said, we’re looking at three separate toll extraction facility providers or, you know, technology owners, that are looking at giving us some sort of a contractual agreement, here. But we’re, you know, Plan B would also be to actually see if there is any possibility of us purchasing our own, wholly owned extraction/isolation facility, as well.

So we’re doing some work, some homework to be done over the next week to two weeks or so, and after the next two weeks or so, we should have a really clear path in front of us, and we’ll be coming up with a press release to that effect.

James West: Great, Vishal. Well, let’s leave it there for now. That’s a great update. We’ll have you back soon. Thanks for joining me today.

Vishal Gupta: Thank you very much, James.

Original article: California Gold Mining Inc (CNSX:CGM) Pivots Business Plan

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