Grass Valley; a town located in the northern region of California, has a rich gold mining past, with mines such as the Idaho-Maryland Mine that were dug during the California gold rush. Rise Gold, a mining company that purchased the Idaho-Maryland mine in 2017, believes that the precious metal still exists in the abandoned mine. The company plans to reopen the mine, which was shut down in 1956 because of economic policy.
The Bretton Woods Agreement of 1944 established a global monetary system to create stability in exchange rates, which fixed the price of gold at $35 an ounce. This move made the mining of the precious metal unprofitable in the country, which resulted in the closure of many mines, including the aforementioned mine. The price of gold isn’t fixed anymore and is currently rising in response to the economic uncertainty brought on by the coronavirus pandemic.
At the onset of the pandemic, the Fed reduced interest rates in an attempt to encourage borrowing money and stimulate the United States’ economy. However, these low rates reduced returns on savings accounts and bonds, which made gold an even more attractive investment. Now with economic uncertainty raging as a result of the omicron variant and increasing inflation, the demand for the precious metal has increased significantly.
In 2020, about 42% of the gold consumed internationally went toward central banks and exchange-traded funds. As mining technology advances and gold prices continue rising, mines are reopening and opening in areas where mining was once considered uneconomical. Estimates from the U.S. Geological Survey show that of the known gold globally, about 62,000 tons remain underground. Thus far, about 205,000 tons of gold have been mined.
Unmined gold isn’t easily accessible and is far deeper underground. To access it, mining companies have to unearth a lot of mining waste, which sometimes contains heavy metals and other toxic substances.
Rise Gold plans to reduce the environmental impact of its new operation through the use of paste backfilling. This technique involved a mixture of water, a binder and mine waste being injected into mining tunnels. It was designed to decrease the amount of unearthed mine waste as well as offer structural support to the mining tunnels.
While there are those that support the company’s project, local residents remain skeptical. Additionally, some economists argue that it doesn’t make sense to mine the precious metal because the cost of mining is high and most of the metal’s value is tied up with its extraction costs. Nevertheless, established companies, such as StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF), follow their strategic plans and commence extraction once their projections give them the all-clear.
NOTE TO INVESTORS: The latest news and updates relating to StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are available in the company’s newsroom at https://ibn.fm/STUPF
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