California Gold Receives LOI for Purchase of Its Entire High-CBD Industrial Hemp Seed Production in 2019 and 2020
TORONTO, ON / ACCESSWIRE / April 16, 2019 / California Gold Mining Inc. ("California Gold" or the "Company") (CSE: CGM) (OTCQX: CFGMF) is pleased to announce that it has received a Letter of Intent (the "LOI") from Chicago-based industrial hemp cultivation consulting firm Delta Valley Logistics ("DVL") for the purchase of the Company's entire production of feminized, high-CBD industrial hemp seeds ("Seeds") in 2019 and 2020 from the first greenhouse projected to be built on CGM's 100%-owned Fremont property ("Fremont" or the "Property") in Mariposa County, California.
Specifically, the non-binding LOI makes clear DVL's intention to purchase up to 5,000 lbs of Seeds from California Gold during this period. The Seeds shall be purchased at the prevailing wholesale market price for the Seeds at the time of harvest, less 5%. The prevailing wholesale market price for the Seeds shall be determined by averaging the sale price of similar quality industrial hemp seeds sold by the top reputable seed suppliers in the US.
The current wholesale value for the Seed is estimated to range from US$15,000 to US$30,000 per pound (based on seed sale prices obtained from Oregon-based Oregon CBD Co., and Colorado-based Blue Forest Farms and Cheyenne Mountain Seed Co.).
California Gold is also pleased to announce that it has signed a comprehensive consulting agreement (the "Agreement") with DVL (dba Delta Valley Hemp) whereby DVL will conduct all operations related to the Company's industrial hemp seed cultivation project at Fremont. As part of the Agreement, DVL and California Gold have mutually agreed to work with each other on an exclusive basis for the cultivation of industrial hemp seed, oil and fibre within the states of California, Oregon, Washington, Nevada and Arizona for the duration of the business relationship.
Vishal Gupta, the Company's President and CEO stated, "The relationship between California Gold and DVL has not only been consummated with the signing of the Agreement, but it has been further strengthened by the inclusion of an exclusivity clause for the five states mentioned here, and DVL's intention to purchase all of the Seed produced from our first greenhouse at Fremont in 2019 and 2020. The formation of this multi-faceted relationship is a very important milestone in the Company's bid to successfully launch its recently announced industrial hemp seed propagation project in California."
DVL's compensation structure includes a greenhouse construction oversight fee, a greenhouse management fee and a modest bottom-line profit-share based on numerous production thresholds.
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 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 Property lies within California's prolific Mother Lode Gold Belt that has produced over 50 million oz of gold. The Company purchased the Property in March 2013.
The Company is also investigating establishing greenhouse-based propagation of high-CBD industrial hemp seed on the Fremont Property, the cash flow from which could be used to continue development of its gold business, with less 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 (including a definitive credit agreement) and availability of funds to the Company, the Company's industrial hemp seed project and its potential success, the yield and volumes of industrial hemp seed that may be produced by the project, potential sales of any such industrial hemp seed by the Company, DVH or any other party on behalf of or for the Company, revenue that may be generated by the industrial hemp seed 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 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 Property for the location of the 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.