I heard this clever joke on a radio program. The doctor comes into the patient’s room and says, “I have good news for you and bad news. Which do you want first?” The patient asks for the good news first. The doctor says, “You have a rare disease and only have 48 hours to live.” The patient shrieks, “Doctor, if this is the good news, what’s the bad news?” “ I wasn’t able to see you yesterday.”
It’s annual shareholders’ meeting time again. There are good news and bad news reports since my last President’s Annual Message. Last year’s theme for the upcoming year was, Less Talk/More Rock. We know the Sixteen to One is one of the richest concentrated gold deposits on earth. We know that since its discovery in 1896 it has provided generous profits to its owners. There was much talk; we moved a lot of rock but very little ore. What was accomplished over the last year? What are management’s problems? What is our outlook?
Through acquisitions during the last century, more of our proven gold vein remains untouched than has been mined. (At the current gold spot price, income from past gold mining exceeds $2 billion.) A great underground target was identified and confirmed by testing way out north on the 1000-foot level. The level was impassible and the target was unminable. The sale of the Brown Bear mine (January 2010) provided us money to buy supplies and continue maintenance on the level. After moving a lot of rock, laying new track and shoring the dangerous hanging wall the past twelve months, one cave- in remains near the end of the mile long level. No one is more frustrated than I due to the time it has taken to complete the job.
Two ongoing problems face our Company: a serious lack of working capital and California’s inhospitality towards mining. Who can deny that this State needs GDP from blue-collar employment? Our loggers and miners face extermination. Investment is sluggish. While gold activity soars around the world, California’s great Sierra Nevada Mountain gold belt sleeps.
Five months ago you received Newsletter #53 seeking your financial support for a legal defense fund. Fifty-two people responded. Donations ranged from $10 to $2,500 and totaled $11,402. Because of this boost and its emotional charge, I found three solid affirmative defenses that should break the legality of plaintiff’s allegations. In March the water board dropped four of its causes of action and dismissed me as a defendant. I expect us to win in court or preferably settle the remaining issues and avoid a costly trial.
You must be as frustrated as I about our modest gains in light of all- time high gold prices. Patience is a virtue (popular idiom); so is anger. I am angry about the way we have been treated for over a decade. We have not missed this bullish gold market. What more can I say, except hope you join the shareholders’ events we are planning for June 25, 2011, in Alleghany, the heart and soul of California gold.