The falling price of gold has landed with a thud in Amador County.
Citing "cost-cutting measures," Sutter Gold Mining Inc. has cut management and staff involved with the highly publicized Lincoln Mine Project near Sutter Creek in Amador County.
Last year, officials touted the project as the first commercial underground gold mine operation in California's historic Mother Lode region in more than 50 years.
After a prolonged regulatory and approval process, underground development commenced at the site last fall. Spirits soared based on the high price of gold and previous estimates of 223,000 ounces to perhaps 680,000 ounces of gold at the site.
On Wednesday, however, Canada-based Sutter Gold Mining Inc., said that President and CEO Leanne Baker was being replaced on an interim basis by Richard Winters, president of RMB Resources Inc., a wholly owned merchant banking division of the FirstRand Group of South Africa, a major funding source of the project.
In addition, the Vancouver, B.C., company said about a third of staff positions have been eliminated, leaving about 15 at the Lincoln Mine site. Baker will remain on the company board.
Sutter Gold said the moves were "in response to recent gold market volatility and uncertainty in financing markets."
After peaking at nearly $1,900 an ounce in September 2011, gold has been slipping.
On Friday, gold for August delivery fell $39.30, or 3.1 percent, to end at $1,212.70 per ounce on the Commodity Exchange in New York.
Historically, gold reacts negatively to job gains and a stronger dollar.
On Friday, the U.S. government reported that companies added a bigger-than-expected 195,000 jobs in June, and the dollar strengthened against the euro and other major currencies.
Shortly after World War II ended, California's gold industry became virtually dormant. Industry experts pointed to the prohibitively high cost of mining gold, California's strict environmental standards and, most recently, the recession.
Rising gold prices gave a boost to the Amador County project, which traced its beginning date back to the 1980s.
Call The Bee's Mark Glover, (916) 321-1184.