Well-written quotations or those from well-known people are helpful tools in conveying thoughts to large audiences. Brevity is welcomed.Sometimes in our operation with the Sixteen to One mine, it seems impossible to convey my analysis of the operation briefly.How is so simple a business (that of finding, extracting and marketing the Sixteen to One gold) so difficult for others to understand? This year’s theme will be succinct and brief.
This Annual Report represents a continuous progression. Mining gold is a lengthy process. It includes “dead work”, general maintenance, development and production on one side of financial statements and expenses on the other. Our proven history of finding millions of dollars suddenly with sustained periods of nothing is unlikely to change.
Our company survived the global meltdown beginning in September 2008.The year 2008 ended with the spot price for gold at $865 an ounce.Today the spot price is $1,210. Our surface and underground assets in Alleghany remain intact. The price of our product and the operational expenses to get it favors us today.What are the problems hurting our operation?
There are two: poor cash flow and prosecution by California’s Attorney General initiated by California’s water regulators.Both hamper our operation.Poor cash flow reduces the size of our crew, thereby delaying mining the gold target in our future.Legal defense takes precious money, but even greater is management’s deflection from participating in day-to-day operations.
The Company ceased looking for outside cash flow.Market uncertainties and fear sabotaged interest in gold mining.Therefore, last year the Brown Bear mine in Trinity County was listed for sale.It sold to a shareholder, who negotiated a three-year buy back opportunity.We settled some pressing debt obligations and improved our maintenance program.Gold specimens were also sold for working capital.Our balance sheet reflects these changes.
My analysis of the lawsuit is difficult with brevity.The lack of duty by the water agency precipitated the inability to perform the 1,440 annual tests required between 2003 and 2007.One important thing is certain: the water regulator’s claim and justification for its lawsuit as beneficial to the People of the State of California is a lie.
We have a saying in Alleghany that a lost round is never found.Our gold deposit has proven to be one of the world’s richest.This will never change.Changes are helping gold production.The outrageous attacks by enforcement predators continue to hurt us. I will do my best to end the latest round of harassment.So, in closing with the theme of brevity: