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California Gold acquires 82 acre farm in Illinois for high-CBD industrial hemp cultivation

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Following receipt of its industrial hemp cultivation license from the State of Illinois, 130,000 feminized industrial hemp plantlets, with demonstrated high-CBD of between 10% and 20%, and low-THC of less than 0.30% concentration, were purchased in California and transported to a rented greenhouse near the Grove Road Farm.

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Company: California Gold Mining Inc
Website: http://www.caligold.ca
Stock Symbol: CSE: CGM
Date Published: Jul 17, 2019
Transcript: Available

Video Transcript:

I’m Cassandra Bolinski for Investmentpitch media

California Gold Mining Inc. has completed the purchase of a parcel of agricultural farm land in Kendall County, Illinois and has commenced outdoor cultivation of high-CBD industrial hemp.

The 82.42-acre Grove Road Farm property, purchased for US$822,140, is located roughly an hour and 20 minutes west of Chicago by road.

The farm previously yielded on average more than 160 bushels of corn per acre owing to its extremely fertile soil, therefore minimal soil remediation was required in preparation for the planting of the company’s industrial hemp crop.

Following receipt of its industrial hemp cultivation license from the State of Illinois, 130,000 feminized industrial hemp plantlets, with demonstrated high-CBD of between 10% and 20%, and low-THC of less than 0.30% concentration, were purchased in California and transported to a rented greenhouse near the Grove Road Farm.

The 130,000 plantlets were successfully planted on approximately 40 acres of the Grove Road Farm, with a late September harvest projected to yield 100,000 to 130,000 pounds of high-CBD content flower biomass.

The company has secured a US$3 million credit facility to cover the Grove Road Farm purchase and operation.

Vishal Gupta, President and CEO, 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.”

The company is currently negotiating “toll-processing” contracts under which the company would pay a fixed fee per pound to a third party operator to process its harvested biomass into CBD isolate.

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.

Due to the delay in the roll-out of industrial hemp protocols in California, the company is relocating its 27,000 sq. ft. greenhouse from the Fremont property in California to the Grove Road Farm in Illinois, where it will be used the 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 the 3rd quarter of 2019, with the first seed cycle expected to be complete by the end of the year.

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.

Vishal Gupta added: “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 Fremont property has an initial NI 43-101 resource of 879,000 ounces grading 1.6 grams per tonne gold based only on the Pine Tree-Josephine Zone.

The shares, which are trading at US$0.55 on the OTCQX, began trading on the CSE in March 2019.

For more information, please visit the company’s website www.caligold.ca, contact Vishal Gupta, President & CEO, at 647-977-9267 ext 333, or email vgupta@caligold.ca.

I’m Cassandra Bolinski for Investmentpitch media