Yuba Resources Strikes Pearl of a Deal

The transaction may not be of sufficient magnitude to lift Yuba Natural Resources out of its current financial miasma, but a lease signed by the beleaguered mining company on Monday still qualifies as a pearl of a deal.

Yuba leased a 30-acre pond on its mining property near Marysville to a Woodland Hills company that plans to produce cultured pearls. The aquaculture company called Cross Pacific will pay Yuba about $2,000 per month for the use of the pond, Yuba attorney Marshall Mintz said.

By this time next year, the pond, carved out of the Yuba River valley by Yuba’s gold mining dredge, may contain up to six million clams, Cross Pacific President Paul Cross said Tuesday.

Yuba, whose former chairman and chief executive Richard Silberman was arrested April 7 and charged with allegedly trying to launder money he thought came from Colombia cocaine traffickers, can use every bit of cash it can find.

The company owes a host of creditors, from the Bank of America and the U.S. Bureau of Land Management to the Yuba County tax collector and Oroville attorney Darrell Stevens who said Monday that Yuba has yet to pay him $9,000 for legal services performed last year. Upheld by an Oroville Municipal Court judge, Stevens’ claim now constitutes a lien on Yuba’s property.

Yuba is mining gold as a one-third partner in a joint venture controlled by Bond International Gold of Denver. Due mainly to the high cost of the venture’s dredging method, the operation has shown minimal profits over the last three years, a Bond spokesman said this week.

Cross Pacific President Paul Cross said his company began negotiating the lease six months ago, long before Yuba’s financial problems became evident. He said he selected the site because of its “pristine water.”

“There’s no industrial pollution upstream and the water migrates subsurface through (the Yuba mine’s rock and gravel beds) which act to purify it,” Cross said. Water purity is important both in cultivating the clams and the organisms used as food for the shellfish, he said. Yuba’s 9,900-acre mining area includes more than 300 ponds created by its gold dredging activity.

Mintz said said Cross Pacific would invest up to a “couple of million dollars” in the site. Cross said his company will hire up to 15 people in coming weeks, most of whom will be involved in “nucleating” clams--or putting minuscule beads made out of clam shell into living clams. Pearls then take about 18 months to form, Cross said.

Recently capitalized at about $3 million, most of which was supplied by Canadian venture capitalists, Cross Pacific plans to hold an initial public stock offering soon to raise additional capital, Cross said. The company is negotiating to open a similar pearl facility in Hawaii, he said.