November 21, 2017 
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From the Sixteen to One Archives

       

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 By Michael Miller

07/12/2017  11:14AM

In 2001, Mr. Gage McKinney released his book, “When Miners Sang” about the Grass Valley Carol Choir. The Forward written by Professor Philip Payton, Director, Institute of Cornish Studies at University of Exeter, Truro, Cornwall informs us of McKinney’s strengths as an historian, former president of the California Cornish Cousins and depth of his humanity, humility and great affection for this subject. Just reading the Forward took some air from my lungs in excitement. Here is the first paragraph of the book’s introduction.

“Christmas Eve in the early 1940’s. The Nazis were terrorizing Europe and the Luftwaffe pounding Britain night after night. In relative serenity a typical American family gathered quietly at home and within the sound of a radio. The set crackled and then came a voice, not from Washington or London or some falling outpost, but from a place far removed from the strife, from the depths of a gold mine in California, a stronghold of granite and dripping water. In words similar to these the announcer spoke:”

“To all America, from coast to coast, a merry Christmas from Grass Valley, California—where the Cornish Carol Choir is singing.” The singers raised their voices, beginning the carol “While Shepherds Watched
Their Flocks by Night” to the tune of an old hymn. It was a Christmas custom and tradition beginning 78 years ago by Cornish miners, who had come to golden California and gathered in Grass Valley.

In 1993, I took a phone call from team members of Huell Howser’s California Gold about bringing the Cornish Choir into the Sixteen to One mine. I knew that current miners sing underground (I still do) because it sounds so good and over several calls worked out a plan for his TV show. One stope in the mine stands out from all others. We called it “The Ballroom”. This is where the crew worked on its own time to prepare for the Cornish Choir to perform.

The miner volunteers could invite a guest, but we had to be very quiet during the filming. After the choir the miner band set up their instruments and the first live music played in the mine. Listening to the Cornish Choir and their comments to Huell was a thrilling experience for all. Following is the author’s account on pages 258-59 of that time when a bunch of us recreated the historic radio program deep in an underground California gold mine.


“In the early 1990s the story of the choir was told with dramatic flair on California Gold (episode #413), a popular television series. The program, produced by Huell Howser, presented the choir in historical settings, in the Methodist sanctuary and on the street of Grass valley, and in a gold mine. Sixteen singers and their director took to four-wheel drive vehicles for a wintertime trek to the tiny community of Alleghany in Sierra County. There they climbed into the skips that carried them underground into the Sixteen-to-One mine, one of the last in production. In their parkas and hardhats, the singers descended an inclined shaft lined in white quartz, and the left the skips to file deeper into the mine, and to eventually reach a chamber like the one in which the carolers had sung in 1940.

Before their performance began, the carolers were treated to a pasty dinner. The meal prompted Mel Jones to remark that his father ate a pasty every day in the mine. For Jones in was the first time he had been underground since working his way through college more than fifty years before. For Brian Bennallack and Harold T. George it was their first trip underground since the national broadcasts. Having eaten and regained their wind, the carolers gathered to sing “Sound! Sound!”

As he recorded them, sound technician Eric Rice of KVMR Radio discovered something technicians probably noticed in 1940: the jagged walls of rock eliminated echoes and distortion. “The room is so lively,” Rice remarked. “It doesn’t matter where I set the microphone.”

The small group of voices sang several carols, closing, of course, with “Diadem”. With only sixteen voices they could not reproduce the big sound that a full chorus of workingmen had produced during the war, but they could show the tradition was still treasured. And because the program repeats every Christmas on Public Broadcasting System stations, the Carol Choir has reached its widest audience ever”.
 By Michael Miller

04/13/2017  3:58PM

TEN YEARS AGO I WAS INTERVIEWED BY A BUSINESS WRITER FOR A NATIONAL MAGAZINE. WE NEVER FINISHED THE INTERVIEW. WHILE SEARCHING FOR AN OLD REPORT ON THE RED STAR PROJECT, I DISCOVERED A TRANSCRIPT OF PART ONE OF THE INTERVIEW. ENJOY. HISTORIES ARE WORTHWHILE.



Draft received from a recent interview of Michael Miller that may appear in a yet to be identified publication. January 22, 2007. Part One


Q: More stories about gold are appearing as gold increased in value last year. Are we in another new American gold rush?

A: I wouldn’t call it a new rush but there is definitely an upturn in interest. The mother of all historical gold rushes took place in California between 1848 and 1852. In modern times the current interest is a continuation of “the rush” unleashed on December 31, 1974, when gold was economically freed from government suppression. Today the general public has yet to participate even though we see more references to gold than a few years ago.

Q: How do you follow the gold markets?

A: I keep up with gold and other natural resources thanks to magazines, newsletters and newspapers, web sites or articles on the Internet, friends or acquaintances in the various industries and other sources. I enjoy reviewing company reports and SEC filings. My interest goes beyond what should be required of a president in the natural resource industry. I’m curious. My macro- economic belief is that our natural resources contribute to the liberties and freedoms the entire world cherishes. There are potential global impacts, significance for Americans and important local consequences that touch many people.

Q: While it seems simple, the realm of gold has a complex history. What single advice pops into your head to offer someone outside the gold market wanting to get in?


A: The rules are the same whether its gold or technology: go into gold with an open mind and teach yourself through study. I started that way thirty-two years ago. My family background, formal education and life-long experiences make me a risk taker but a careful one. Emotion gets in the way sometimes. The counterpoint to risk is reward. The ability to evaluate these two components is crucial with today’s gold investment options. Whether it is an investment in time, energy or money, a formula may be constructed to analyze various choices and opportunities. There are unfamiliar terms in gold mining with unclear definitions to deal with. You want a quick single concept to embrace: ponder the downside risk and upside potential.

Q: Why have you devoted thirty years to the mines in Alleghany?

The relevance of mining, natural resources and gold to our present and future well-being makes me a Sixteen to One bull. I recognized the potential quickly back in 1974. Our experiences continue to confirm my early impressions. I don’t want to go into a lot of history now; however what has taken place in Alleghany and the Sierra Nevada Mountain range is awesome. It sometimes takes my breath away just to have an interest in keeping this culture alive. While economic growth (stock appreciation) is an important goal, so is acquiring physical gold as a personal possession. This opportunity really puts Original Sixteen to One Mine in a very special and small category of gold stocks. The little guy, like me and others, has a chance to participate in something exciting.

Q: In reading your history you seem to always have plans that require money but you rarely actually go outside to get it. Why?

A: We prefer to finance our growth and development by mining gold. The Company’s fortunes turn in a single shift, so as long as we are breaking rock, fortune may tap us on the shoulders. Other reasons are more pragmatic. In order to declare a gold dividend the division of ownership must be manageable. It is. The more shares outstanding, the more difficult to divide excess gold into a meaningful amount. I monitor our gold inventory, cash flow and daily underground mining progress to quantify the risk/reward scenario. In conversations with Ian Haley, the mine manager, and the crew I gain a sense of production and what is ahead of us. My actions are to push it, in other words “risk evaluation” is a constant part of the job. It changes almost daily. Last week on the 1000 foot-level, we found a gold showing in the down-dip side of the vein. We slabbed the rock. It revealed a very nice display of gold, more than first look. Now we have the choice of proceeding with the level rehabilitation or interrupting that heading and sink on the gold. Each has a risk and each has a reward. No one knows but right below us less than a week away could be enough gold to finance our Red Star project from this production.

Q: You mentioned unfamiliar mining terms earlier. Give us some common ones and some that may be unfamiliar or poorly defined.

A: I used the term “down-dip” in describing where we found gold on the 1000-foot level. First, the dip is the angle that a bed, stratum or in this case a vein is inclined from the horizontal. Down-dip tells the direction of the incline. Its opposite would be up-dip, although this term may not be used throughout the mining industry. Mining districts develop their own terms over time, so there can be confusion of meanings even between experienced miners. For the non-miner who is trying to get a grip on evaluating gold companies, the first concept they must deal with is reserves. The Alleghany Mining District is very fortunate because the gold deposit cannot be qualified or quantified using a reserve projection. The investor today is barraged with reports about proven reserves, probable reserves, possible reserves, inferred reserves and a resource. Whew! Believe me, these terms are not interchangeable but many exploration companies as well as others lump them together. I think it is done to fuel great expectations for those seeking a play in the gold industry.


Q: Why should individuals or other entities be interested in the Sixteen to One operation and give some examples?

A: An important fact in evaluating the likelihood and meaning of meeting the two goals (stock appreciation and gold distribution) is the number of outstanding shares. This is a very important statistic for comparing all corporations. On December 31, 2003, there were 12,867,250 shares issued and outstanding. The number remained the same on December 31, 2004 and December 31, 2005. Dilution was nil. The upcoming December 31, 2006, number increased by 118,204 to 12,890,204 shares issued and outstanding. This small increase was due to a stock conversion for debt, money owed a shareholder who helped purchase the Gold Crown mine in 2005, directors’ fees and a long overdue account payable. For a company that has been financially handicapped, it avoided dilution just to keep the operation going. We are not fueling our operation by selling stock. We are one of very few small gold companies that actually mines gold for its cash flow.

Q: Is a gold dividend a fluff concept or for real?

A: It is for real. One of our past directors, Lee Erdahl, was a director of Ranchers Exploration and Development Corp and became its president after the untimely death of Maxie L. Anderson. Mr. Anderson paid a gold and silver dividend. It may be the first declared in kind dividend by a public corporation. I find it an inspiring accomplishment. As of today, a gold dividend of a quarter ounce per 1000 shares would require 3,250 ounces of disposable gold. This is a realistic number for the Company to meet.

Another requirement necessary to declare a dividend is the company must be debt free. Ours was debt free for half of the 1990’s. It was debt free by mining and selling gold, not by selling stock. It also paid a $0.05 per share dividend in 1995, the first dividend in thirty-five years. For most of its corporate life the owners were generously compensated with an annual dividend and the company was debt free and met its annual cash demands. Tax laws were different but with an “in kind- pro rata distribution”, the onus of double taxation will not be a factor in distributing profit. A goal of a gold dividend is for real.

Q: If you never had a public offering how were the 12,890,204 issued?

A: When I took over as president in 1983, there were 180,000 shares outstanding. Many were issued to former owners of mines the company acquired.

The company did a three for one stock split when the stock was very low priced. It had no dilution effect on the shareholders of record. Everyone’s percentage of ownership remained the same. It made no difference for the dividend goal. Dividends must come from profit not from selling shares. Selling shares is not revenue. This was brought to light when reading the 2006 annual report of Klondike Star Mineral Corporation. I like its idea to find the underground source of the placer gold found in the Yukon. I can relate to the excitement and perhaps monster gold pockets still remaining after eons of erosion and geological changes. We have the respected Blue Lead dead river below the Bald Mountain and Red Star claims. We know the veins exist from prior mining and drilling below its bedrock. We know that nuggets were found still encased with some quartz. We know much about the geology of this property. I like what Klondike is doing and wish them great success. Management has a different view of its corporate structure and its ownership. It appears as a one-dimensional plan for making money, stock appreciation. With xxxx shares outstanding and 5700 shareholders, a future gold dividend seems unlikely.

As I look at Klondike’s Balance Sheet and Statements of Operation a long standing and most popular pattern is evident: no revenue, ongoing dilution, high general and administration fees and high public relations expenses. With no revenue and expenses of $8,778,272 about 56% went to General and administrative (3,392,679) and Public Relations (1,538,207). Mineral exploration was $3,379,652. Shares outstanding increase annually as the company uses dilution to fund its program. This time period 3,423,000 shares were added. Nothing is wrong with this business plan. It is the one that most exploration and under financed companies follow; however there is more to the analysis of the impact of number of shares outstanding.

Few people know the number of shares outstanding in the companies they own or contemplate buying. Look at Newmont (I am a shareholder). It has 312,984,000 shares outstanding. That is a large figure. Another gold producer, Barrick, with 554,270,000 shares outstanding, tops it. This type of analysis is important to evaluate a gold company. Check its “market capitalization (market cap). Multiply the shares outstanding by the share price to determine a market cap. This is the total value the market places on the corporation. Sixteen to One is slightly under $13 million. Klondike is slightly under $40 million. Newmont is more than $12 billion. A gold dividend is not in the future for any of these companies except the Sixteen to One.

I understand why Klondike goes to financial markets to raise working capital. But why did Newmont announce a $600 million loan in November? Its stated reasons seem odd in light of its great stream of revenue. Klondike has no other choice but to continue borrowing or diluting existing shareholders in order to stay in business.

These companies and more of the Barrick types and many more of the Klondike types are competing for working capital at a time when the world awakens to the need and value of natural resources. These are the opportunities available to an eager market, a market that has only begun to be excited by the prospects of $800 or $1000 ounce gold. I am bullish for Original Sixteen to One Mine because of its different risk to reward relationship. I am sure that there is one just as favorable in other gold opportunities. I just don’t know of any to invest in. What is missing to the casual researcher of our company must be the reviewers’ reluctance to project what it will become when its two-step financial plan is successfully implemented. It is public information for the most part. Some items (all positive) are withheld for security reasons and because of their confidential nature.
 By Michael Miller

12/30/2016  11:31PM

While scrawling through some internet headings, I found reference to our FORM 10-QSB. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2002 File No. 001-10156

SUBSEQUENT EVENTS
On October 29,2002, The Sierra County Grand Jury issued an indictment against Michael Meister Miller, Jonathan Farrell and Original Sixteen to One Mine, Inc. The next court date is November 20, 2002 for arraignment. Management believes the accusations are groundless; however, because the instigating prosecutors are private non-governmental lawyers outside the standard criminal system, a vigorous and time demanding defense and offense are necessary to protect the shareholders' interests. Even unfounded criminal accusations are mentally debilitating and time consuming. Because Miller and Farrell hold key management positions, the company may suffer substantial and significant damages due to the distraction caused by the prosecutors.


What a time! What memories! Why did I bring it up today?

With a Company like ours, history is relevant and important for someone wishing to judge what is ahead. Junior gold companies tend to issue press release about how the permitting is going and drilling projections. We are different. The purpose of this web site is to make history available to you and the many people who know nothing about California gold mining, the Sixteen to One or how we have survived into our third century.

The presentation to Sierra County Grand Jury by corrupt lawyers almost fifteen years ago threatened our very existence. The charges were specious but had to be defended with vigor. We did just that. The unethically lead lawyer should have been disbarred. He wasn’t. He lost his job and moved on to some other job, which he also lost. He should have been disbarred! We survived this attack!

Our small but vastly important natural resource development industries face a similar crime by government employees from various agencies. The crime to the public and those working in these industries centers in how regulations are enforced in light of how the respective governments wrote the laws for regulation. I want regulations and I want them fairly enforced, enforced as Congress and State houses wrote them. In almost every regulatory law I have read (and there have been many) reasonable is mentioned along with beneficial use to the public and non-public. We survived these attacks!

I look forward to the time when the Americans holding high agency positions set the example for their employees to become the helper to Sixteen to One mine (and all improperly regulated entities) not a rogue cop. It may not be far away. Let’s be progressive, moving forward or step by step. I believe in progress and promote reforms or changes. Your ideas and participation are most welcomed. The United States benefits from the domestic gold brought into the financial market and the need is increasing each day.

For our hard working traditional, hard-rock, underground, gold miners and directors, our message for the 2017 year is “Truth, like gold lies at the bottom.”

We will do our part to preserve, protect, enhance and bring a rare American natural resource into the coffers of our country. I dare say, we will exploit our gold, which means we will out it to use. The 2017 year makes me, an overtly optimist, smile. Truth, like gold, lies at the bottom. Happy New Year.
 By Michael Miller

08/11/2015  9:23AM

Errol Christman passed away July 25, 2015. He was 74. He grew up in the mining town of Grass Valley, where one of America’s great underground gold mines dipped thousands of feet below the Pacific Ocean surface.

I met Errol in the late 1970’s. He had a month to month lease to prospect Sixteen to One in late 1970. He paid $250 per month. It worked out well for Errol. The old workings above the drain tunnel level had quartz pillars that were left to support the ground. By drilling these pillars he sacked high-grade gold, which financed a growing mining equipment business. His time underground at the Sixteen was short but profitable.

Some people faulted Errol for removing the pillars and causing irreparable destruction. I was not one of them. He took advantage of an opportunity given him by the mine management in San Francisco. Our Company had quit mining in December 1965. It gave existing miners permission to go into the mine to eke out a modest living.

Fortunately for the future, no one brought metal detectors into the old workings. We did in 1992. Success was instant. The single biggest day was in 1995. We drilled blasted and sacked 25 2,500 ounces in one shift. Gold spot was $400 an ounce, so it became the Million Dollar Day. This pocket was less than ten feet from where the ‘old-timers’ stopped mining. Errol did well. So have we. Ours is a rare and exceptional gold deposit. Knowing this to be true has kept its owners in place for over 100 years. Errol was a part of our history.
 By David I

06/09/2015  2:19PM

Dear Mike,

Recommend you resubmit your letters to congress, the present congress is interested in reducing or eliminating federal government over reach of its regulations and they most definetly need to know what the problems are.
 By Michael Miller

06/09/2015  8:59AM

Three government agencies are most onerous to the welfare of our miners, owners and community. Two are Californian and the other, a federal branch of the Department of Labor. It always has not been this way. I came across a letter I wrote to our Congressman in 1999. Sadly its theme rings true today. I thought it was worth a review sixteen years later because an epidemic of irrational enforcement of regulations seems to be wide spread across our country. A free democratic republic must be regulated. It is not the regulations that are upsetting, but the execution of the standards/codes designed to implement the laws that are a major issue.

What has happened to small scale underground gold mining is happening to big industries throughout the United States. If federal agency enforcement is the problem, it centers in Washington D.C. It can be fixed but not unless our elected representatives grab a hold on our federal public servants to alter these abuses. You know the problem just as I do. It is time to call out names so those elected to serve our well-being can act. I did this in this letter in1999. Did it make a difference? Not that I know.
If you follow our FORUM, you will find out if the Sixteen to One miners are respected in the 21st century by our chief safety regulator, MSHA. Let’s hope it will happen. Californians will benefit when its bountiful natural resources are treated with respect.



December 2, 1999
The Honorable Wally Herger
55 Independence Circle, Suite 104
Chico, California 95973
Fax: (530) 893-8619

Dear Congressman Herger:

MSHA (Mining Health and Safety Administration) is a federal regulatory agency that derives its power from a Senate and House approved document referred to as An Act (Federal Mine Safety and Health Act of 1977, Public Law 910173 as amended by Public Law 95-164). Its purpose was to improve the safety of the mining industry’s most precious resource - the miner. Interim mandatory health and safety standards were designed and a bureaucracy of inspection and enforcement employees were hired to carry forth the wishes of Congress.

Congress specifically pointed out that information generated during the practice of implementation of An Act shall be obtained in such a manner as not to impose an unreasonable burden upon operators, especially those operating small businesses. The agency currently has lost sight of Congress’s direction with regards to our company and the intent of Congress.

Our company is public, listed on the Pacific Exchange (OAU symbol). It is California's longest operating mine and the second oldest gold mining company in the United States. It is also very small. It is the remaining active traditional underground gold operation in California. MSHA has significantly and materially impacted our ability to function. It is directing our mining operation by issuing questionable citations, then demanding our miners work solely on correcting them. Its agents have become unreasonable in interpreting the codes and standards known as CFR Title 30- Mineral Resources.

In California MSHA is administered from a field and district office in Vacaville. Individual inspectors report to Willie Davis, a field officer who works under the district office (Jim Salois, manager, and Bill Wilson, assistant manager). The next level is the administrator for metal and non-metal industry, Mr. Ernie Teaster. I do not know his location. The head of MSHA is J. Davitt McAteer (assistant Secretary of Labor), who is responsible to the Secretary of Labor.

There are no doubts with the miners or management that MSHA is an agency out of control. MSHA allegations of unsafe conditions have become opinions of individuals who seem to have reasons for exerting pressure on our operation. For example: Code interpretation and guidelines require that allegations of violations be based upon the particular facts surrounding the violation plus a reasonable likelihood that the hazard will result in an injury or illness of a reasonable serious nature. Section 1 04(d)(1)/(e)(1). Both of these findings must be made before a violation can be designated as "significant and substantial". Guidelines also exist for determining the likelihood of injury and the seriousness of injury. Congress included the word REASONABLY as required criteria for inspectors to follow. Reasonableness has been lost under the current administration of An Act. By the way, each citation now comes with an ever growing monetary fine.

I am a career miner, owner and operator of twenty-five years in the special Alleghany Mining District. The current draconian impositions thrust upon our small operation are traceable for eighteen to twenty four months. They define oppression to business that is associated with an unbending totalitarian type of government, something that is repugnant to all Americans. The level of unreasonableness has increased significantly the past year. Opinions have become facts. Unfortunately for our miners, company, owners and community, mine inspectors have become policemen, policemen undertrained or unqualified to perform their congressional charge. MSHA has become counterproductive to the congressional mandate established in An Act and the safety of our crew. The Program Policy Manual guidelines are set so that an inspector must use in his evaluation: background, training, experience and an evaluation of actual circumstances surrounding the violation. He is to arrive at independent judgments. I contend that there is no longer an atmosphere of independent judgment coming from the district office in Vacaville. After in-depth conversations with inspectors and other MSHA personnel, miners, managers, operators and owners, I believe a handful of high ranking government employees are responsible for this atmosphere.

It is interesting to note that MSHA has acknowledged that within the industry it regulates, whether surface or underground, metal or non-metal, the MSHA field inspectors have the highest rate of injury in the industry. Having observed the last inspector on our property, REDACTED, it is easy to see why.

I request a thorough congressional investigation be conducted into the affairs of MSHA from the field and district offices in Vacaville to the rooms under the auspices of J. Davitt McAteer. MSHA has lost sight of the Sixteen to One mine’s most precious resource….our miners. I believe you will find similar situations at other mines in the west.

Sincerely,
Michael M. Miller
President
 By Michael Miller

01/08/2015  1:08PM

I'm researching historical gold production for another topic on the FORUM and the following file came up. For the 2015 mine plan, we will examine these early Tightner workings. Why? This productive area has never witnessed a modern gold detector. You know what happened to our production after 1992, when off-the-shelf hobby detectors entered the Sixteen to One. Our expectations are high.

FROM THE ARCHIVES

One of several hidden asserts of this mighty little gold company are its map collection. We don’t write about it much but the information contained therein is priceless. Here is what it means to me. The maps cover over one hundred years of development. One grouping is titled “Progress Maps”. They are usually depicting annual work and the months are colored individually. My mind turns to the appropriate dates of these progress maps. I transform into that miner, geologist, engineer or mining executive while studying the monthly (yearly also) progression of development and gold production. Why did they go here? Why did the go there? Why is this block of ground untouched?

The answers are speculative but, come on; all mining is speculative as are most investments. The ‘whys’ of the Sixteen to One are great topics for discussion. These maps affirm a fact: this deposit involves risk with hope of large profits. Also we have years of data beyond the times the maps were drafted.

Work to reorganize the map collection is underway. Years ago an old building was renovated to house the maps and have space to spread them out. Other needs preempted the reorganization…no longer so. The thirst for knowledge of the past now preempts other needs. I am thrilled to return to study of the work of yesterday’s miners. With each map comes the opportunity to learn.

I had an epiphany this morning after unrolling a 1915 map of the Tightner Mine Company. The map details the early workings which are near bedrock elevations above the 250 level. The gold values are recorded in dollars when gold sold for $20 an ounce. One stope is breath taking…$700,000. Not far away is a $350,000 stope and there are many values at five figures. Multiply these numbers by 60 to understand this historic gold production today. Breathe taking!

Back to the epiphany. Are there no risk takers today for investing in this gold deposit? Apparently the answer is yes. Why? No one has taken the time and effort to understand this gold deposit, how it became successful and whether our plans will reap large profits. It is as simple as this…we are on our own.

Mining legends like Fuller, Searles, Foote, Kallenberger, HR Cook, Alling, Ferguson, Bennett and Taylor left their imprint in Alleghany. I have my answer to understand the risk/reward of mining for gold here, which is strengthened with these maps and thoughts of these great men. Thank you.

Prepared from Company files
May 18, 2010
MMM
 By Michael Miller

11/29/2014  5:26PM

Newsletter#35 sent to shareholders December 4, 1996, was in my thoughts today. There is no doubt nor was there eighteen years ago that improvements in both software and hardware to recognize unseen metal in the Sixteen to One quartz will lead to gold production. It is the single most dramatic exploration tool for a gold deposit like ours. As previously announced, work with a private company that shares our beliefs is guiding our exploration at the mine. As said before, the relevant question is “when will the technology package be found?” Not if it can be discovered.

Off the shelf detectors have improved and some of the electrical tweaking we have tried has helped. Sadly, the last meaningful gold was mined in 2004. The Sixteen to One is far from dead but our operation has been crippled for a decade from the modest production. These underground gold mines have knowledge not found in books. Scholars, analysts and others struggle to learn.


Technological Summit #35
On October, 3 1996, we hosted a technological summit for selected experts who believe we can locate and mine gold more efficiently using their emerging technologies. Participants included Dr. Sandor Holly, a MIT and Harvard trained physicist and early developer of IBM laser research, now working on electromagnetic imaging; Jeffrey Oicles, director of Power Spectra, a Silicon Valley company now turning its attention to ground penetrating radar; Dr. Larry Stolarczyk, of Raton Technology Research, Raton ,New Mexico, who pioneered the development of subsurface radio waves for high resolution mapping of ore bodies in coal mining and is currently working on electromagnetic imaging techniques for detecting gold in quartz; and Curtis M. Romander, research engineer at Poutler Laboratory, of a division of SRI International, Menlo Park, California, who contributed the latest information on SRI's patented low density explosives, of interest to us because they appear to produce specimens more suitable to jewelry and specimen sales than our current methods. Enthusiasm was high as Dr. Holly spoke of ``the beginning of revolutionizing underground gold mining" and Mr. Oicles of a ``significant promise for a quantum leap in gold detection and mine mapping." As announced in the Annual Report, we have been designated a beta testing site by the participants in the summit. The companies get the use of our mine, a proven gold producer, as a field laboratory, and we benefit from the free use of the most innovative gold location technology in existence. We retain, of course, full rights to any gold found using these emerging technologies. To date, only Mr. Stolarczyk has performed experiments in the mine, and these did not increase the scope of the equipment we currently use. All participants have experiments planned over the coming year.
 By Michael Miller

04/24/2013  5:50PM

No, Fred, I never heard from Mr. Dye.
We are little squirts compared to most mines under MSHA regulations. Nevertheless, what an inspector does or does not do has serious consequences for us small miners. I believe that the small miner will be treated more fairly in the future. Why? Because some of us are holding them accountable.

A major difference in the coal mine experience you mentioned below and ours deals with code violations. The Sixteen to One is up to code unlike the coal mine. An overzealous MSHA inspector is at liberty to interpret regulations according to his background, training and experiences. Some read the regulations strangely, or fail to recognize what they see. Some MSHA inspectors truly lack the experience and knowledge to evaluate our mine when it comes to judgment. I know from conversations with operators in Alaska, Idaho Arizona and Nevada that we are not the only ones.

Our miners have years of background, training and experience in this gold deposit. All of us would feel conflicted if we were to judge whether a regulation is violated in a coal mine or perhaps even in a surface mine; however I believe a hard rock underground miner would do better in a surface mine inspection than a surface miner in a California hard rock gold mine.

In the 1950’s and 60’s and 70’s, mining hazards were many, many that could be eliminated with a caring management. Our country needed safety enforcement. The first was MESA, followed by MSHA (Mine Safety & Health Administration). I know that the inspectors who came to my operation in 1976 to 1982 were helpful and appreciated by the crew. No sane person would reject a fresh pair of eyes to point out an unsafe condition.

Recognizing that mining is a dangerous occupation, when that fresh pair of MSHA eyes finds a condition that appears unsafe, his conscious and unconscious judgment must take over. If he or she lacks the trilogy of background, experience and training, the superiors who have placed that inspector in this situation must be notified and deal with the problem. My purpose in writing letters up the chain of command informs those accountable and responsible for what happens in the trenches of mining warfare. I have been disappointed in achieving this purpose.
 By fredmcain

04/03/2013  9:50AM

Michael,

That was a good letter! Did you ever get any kind of a response from Mr. Dye?

I can relate a personal story of my own that is almost unbelievably stupid. I heat my house in the winter in northern Indiana with “hard” anthracite coal. I know a couple of people around where I live who run local coal yards. One of these guys was lamenting to me how he could no longer get what had been some of the highest grade anthracite in the world. What happened was that the mine in eastern Pennsylvania got "inspected" by the government. Numerous "violations" were found and the mine was ordered to immediately get everything up to "code".

Well, getting everything up to code would've cost this mine millions of dollars – millions that they did not have. So, what did they do? They closed the mine, of course.

I believe that miners should be able to expect to work in a safe environment. No one questions that. But are these miners actually "safer" now that they no longer have jobs? Is the family who owned the mine better off? And then there are consumers like me who have to pay higher prices for crummier coal on account of this. Yeah, this was a really great decision, huh?

I guess if the government really wants to make sure that no one will ever be killed in a mine accident again, then they should just ban all mining. Come to think of it, while they are at it they should ban automobiles, trucks, trains and airplanes too so that there will be no more accidents.

For better or worse, we all live in an unsafe world and people do need to be protected and their safety ensured but these rules and regulations are clearly over the top and out of hand.

Regards,
Fred M. Cain
Topeka, Indiana
 By Michael Miller

02/19/2013  3:12PM

I was recently criticized for not doing enough reaching out to the public at large about the evilness of social wrongs that occur during my life as a hard rock gold miner in California. You (reader of this forum) are the public. Some of you keep up with the Forum entries. Some have even been around since its beginning. I forget content, so must you? If you are new to the Sixteen to One, please take a Forum topic and read it from the beginning forward. Much of the entries disclose stuff worth spreading to a broader audience, like the letter below that I just found in a discarded file. Minerals are vital and will be vital in even a primitive society let alone the social network of the 21st century. Wars are fought for natural resources even though oil is the one most talked about. Take a quick look around. All that you see has its basis in minerals. Even the wood or food would disappear if it were not for the mineral extraction industry. The raw materials of manufacturing are mined from somewhere. Prosperity will return to the countries and societies that recognize the value of sane natural production within their borders. The private and public institutions and small businesses will lead the financial recovery. Our governments must assist not impede prosperity.

The letter below is just as relevant today as it was almost eight years ago. Not much has changed, in fact I could site MSHA behaviors that are more damaging today than in 2005. This letter could be placed in the INTERSTATE COMMERCE AND SMALL MINES topic. What good is bitching without offering solutions? I do not have the resources to reach the public much beyond this web site. Please help.


David Dye, Assistant Secretary June 29, 2005
MSHA
U.S. Department of Labor
1301 Airport Road
Beaver, West Virginia 25813-9426


Dear Mr. Dye,

Congratulations on your new appointment to head the federal workers safety program for America’s most precious resource, its miners. I am president of America’s oldest gold mining company and perhaps the only working hard rock, traditional, underground gold mine in continental United Stated. It is not something to brag about; it is something to mourn and investigate why there are so few. I also operate as an independent contractor for several projects and have been in the gold mining business since 1974. Your agency is partly responsible for the decline in the domestic natural resource industry. I am not sure that you are aware of the decline in the partnership between MSHA and operators to keep the miners safe. I write today to give you a recent example of how your agency is hurting the small operator.

On June 22, and 23, 2005, MSHA conducted a regular quarterly inspection. Accompanying the inspector was a young trainee. She had no experience working in an underground mine. She said that she had never been underground before. During the inspection she began lagging behind. It required a second employee of mine to stop and accompany her. She was unprepared for the inspection both physically and with her provisions. She put herself in danger, our crew in danger, compromised the agency’s credibility and endangered the operator and owner of the mine.
I request the following:
1. By what authority grants MSHA the right to bring trainees onto our property?
2. Is this practice occurring elsewhere?
3. Who at the Western field office approved her visit?
4. Please notify the Western office to cease bringing trainees on inspections or at least unqualified and unprepared ones. Please let me know their response.

I support the reasonable enforcement of the Act of 1977 as Congress intends it. The practical benefits for those of us in the trenches were lost almost a decade ago. Reasonableness no longer is a concept practiced in the field and offices. MSHA no longer is meeting the best interest of the American public. Maybe you will be able to enforce better training for those attending the National Mine Health and Safety Academy as a first step to improve operations of the mining industry in the United States. I hope so.

Where will there be mining jobs in the future? Not likely in this country if the misdirected regulatory agencies continue their trends. Why are federal tax dollars passing through MSHA to China to help them development mine safety teams? The International Mine Contests are held every two years and about fifty teams compete. Last year in Las Vegas, China participated for the first time and placed third. China will likely win the next contest, which is fine with me; however, public money is going to them while MSHA has introduced a policy of increasing revenue with citations and penalties against the operators in the United States. Poland gets as much money or maybe even more than China granted through MSHA. Why?

MSHA employees take frequent trips to China and elsewhere. I was told that someone goes to China at least every other month from MSHA headquarters. How is this expense justified as helping America’s most precious resource, its miners? China has invested heavily in Australian natural resources. None of this bodes well for America’s economic freedom. China has something like a trillion dollars foreign trade asset.

Last year there were forty deaths related to mining. Last year in China the government admitted to 10,000 mine related deaths. Last year 658 people died every day in automobile related accidents on our roadways. My point is the mining industry in America is a responsible industry. It should be treated that way by MSHA, which has not occurred in various operations in the west. Right now there is an insidious and specious effort to further impede the American operator by insisting that the category of “lead miner” reflects a management position within an operation. This is not true. Most within the mining industry both public and private know this is not true. Yet our small company has been forced to challenge this reckless assertion by MSHA agents and lawyers working for the Secretary to establish this position. The case is in the hands of the Ninth Circuit Court of Appeals. Your agency is driving this outrageous myth. How about getting involved and putting an end to this costly abuse of process?

Does America derive benefits from the money it spends to send agents onto private property under the authority of the ACT of 1977? The answer is “no”. Should America continue to fund an out-of-touch agency like MSHA? The answer is “yes” but changes are necessary. Good luck. I am at your service to improve the situation.

Sincerely yours,
Michael M. Miller, president Original
Sixteen to One Mine / owner Morning Glory Gold Mines
 By Michael Miller

01/30/2013  5:08PM

Sense in that Golden Nonsense
Published February 19, 1965

A Charles de Gaulle press conference is known around the State Department as his “semiannual anti-American lecture.” Last fortnight he used one to launch an assault on the dollar. The dollar, say De Gaulle, should be replaced as the international currency by something “which has a real value, which must be earned to be possessed.” And what is that? Gold.

“Yes, gold which does not change in nature… which has no nationality… the immutable and fiduciary value par excellence.” Behind De Gaulle’s words you could almost hear the stuff jingling in a million French mattresses, its hideout through the centuries. He wants gold restored to its throne because the Common Market countries now own almost as much gold as the U.S. and could own a lot more if they wanted to turn in their dollars for it.

Most money experts dismissed De Gaulle’s “vast reform” as dreamy nonsense. U.S. Treasury officials called it “a retreat to 1931”. Yet as always with De Gaulle’s pronouncements, this one has a shrewd aim and much prophetic content. The subject of gold is not nonsense when the dollars is in trouble.

Under the prevailing “gold exchange standard” of international payments, the dollar has been generally accepted as a substitute for gold because the U.S. stands ready to buy or sell gold at $35 dollars an ounce. For seven years we have been mostly selling and out stock of gold, once $24.5 billion is now scarcely $15 billion. Monetary experts have shown mounting uneasiness about this system. They question its ability to support an expanding world trade or to surmount another crisis like the run on the pound last autumn.

The currencies that finance most of the world’s trade are the pound and the dollars. Unfortunately, Britain and the U.S. are themselves in chronic deficit in their own balance of payments, and the pound and the dollar are losing the confidence of the other industrial countries for this reason. De Gaulle even charges that the U.S., as the only manufacturer of dollars, can and does create capital “by what must be called inflations” and thus “indebts itself abroad at no cost.” He is in effect summoning all the hard-money men of Europe to declare their independence of the dollar.

Although most German, Dutch, Belgian and even French money experts do no share De Gaulle’s anti-Americanism, they do not like the behavior of the dollar either. “Seven successive years of deficit,” warns Raymond Aron, “end up by shaking confidence in any money, even the dollar.” Washington has known for months that it must take sterner measures to end these deficits.


President Johnson made a couple of choices regarding de Gaulle’s expressions. The one with the most public impact was to reduce the duty exemption on tourist purchases abroad. Whoopee! The one with the most business impact was to tax U.S. bank loan abroad. Whoopee again! He also urged banks and corporations to limit their “not essential” exports of capital. But while Johnson’s words were determined (“the dollar is, and will remain, as good as gold”), the measures proposed more hortatory than muscular. Conspicuous by its absence was any use of the most powerful corrective of all, the Federal Reserve’s influence on the total flow of dollars by way of bank reserve requirements and interest rates.
Johnson’s reluctance to use monetary policy stemmed from fear of dampening a domestic boom. The increase in money and credit that fed this boom fed Nixon’s choices in the 1970’s. The longer avoidance of “classical medicine” of tighter credit, the more complex and irritating become Johnson’s substitute half measures to end the dollar outflow – and the less persuasive to the European central bankers, whose good opinion one of the dollar’s major supports.
A financial editorial during the de Gaulle rant opined: “On the collaboration of these foreign bankers we must depend, not only to keep the present international monetary systems stable, but to work out the needed improvements in it which De Gaulle’s cries of “gold!” have overdramatized. De Gaulle himself has not the power to undermine the dollar or to sever its links with Europe. But the U.S. can, by paltering with its own balance of payments deficits, gravely weaken the dollar’s voice in its own future.”

Now almost 48 years later can anyone opine what others will be reading 48 years from now about the dollar, gold and international monetary policy?
 By Michael Miller

08/27/2012  3:29PM

Been thinking about this 100 year old company, its future and my role as it voice, planner and day-to-day manager. What am I doing that is right? What am I doing that is not right? I want my phone to ring and the voice on the other end says,"I'm coming to see the mine and have a conversation about this company. I have all necessary to move your vision."

I know this web site has more information than any one person can assimilate, but this imaginary phone call I hope to answer clearly said, "to move your vision." Five years ago I was asked by a man who claimed the ability to move my vision but first I must write it down. So, I did and later posted it here. Only the spelling of one word changed today.

While the turf has changed over the past years for the Sixteen to One and the gold industry itself, the vision remains much in tact. The crew has improved the mine, our archives and knowledge. The price and interest in gold's future has improved. I'm told that technology towards building a better mouse trap, er, gold detector, has advanced considerably. Maybe I should post the vision again (developed five years ago) and see if the investment climate has changed:


ORIGINAL SIXTEEN TO ONE MINE, INC.

WHAT’S IN ITS FUTURE

A VISION



The vision for Original Sixteen to One Mine, Inc. (the Company) includes America’s natural resources but focuses on the plentiful natural resources of California. While the vision may appear to be rather explicit or narrow, it includes gold and other mineral products, timber and water. It encompasses their exploitation, management, development and marketing for maximum yield. No other public reporting company incorporated in the United States shares this focus.

This vision includes the social aspects of natural resources and the desperate need to protect the cultural as well as the physical environment of our precious natural resources. The Company combines all social sciences as well as most physical sciences into an operational program. It is an enlightened business plan of operation. The Sixteen to One’s past reveals a necessary approach of maintaining long-term assets with the short term needs of producing revenue. Its present status is demonstrative proof that a small natural resource company can address the demands of natural resource exploitation in today’s overly aggressive pro environmental outlook.

The Company can become known as the model for future natural resource development in California and the United States. Its operations will challenge the erroneous myths and prejudices of well meaning activists who hinder the sensible exploitation of our natural wealth. These beliefs have turned the omnipresent demands for raw materials to natural resource production in other parts of the world, a dangerous reality.

A primary ingredient for our vision and subsequent model to expand is an infusion of working capital. There has been a noticeable lack of interest from Wall Street or private investors in forest and mineral production. The modest attention of the stock market towards America’s natural resource companies hurts future generations both in the United States and the world. Some patterns of investment are predictable. Investors’ interest in specific industries continues to move from one sector to another. The Gold Sector is abstruse, removed from the usual way of thinking and difficult to comprehend. The forest industry follows closely in its mystic.

A movement into natural resource ownership or participation is overdue. Unlike banking, savings and loan institutions, automobiles, real estate, airlines, pharmaceuticals, computers, utilities and practically every part of the complex mixture of America’s democratic capitalism, the natural resource companies are ignored. Perhaps one simple
answer is that resource companies believe they must stay under the radar to function in today’s hostile anti-mining/anti-logging mentality. Perhaps a more likely reason is the pure misunderstanding that potential investment capital has about these small but vital industries.

The Company’s dream foresees an awakening of Americans to the realization that we need and will benefit from a return to domestic natural resource productivity. For almost fifty years America has been bombarded with media blame for past degradation to the environment. Some of the blame is justified. Many extraction and harvesting methods, however, are no longer practiced and cannot be assumed as what to expect from future operators.

American industries have learned from the past and clearly are the most environmentally sensitive operators in the world. This is one reason to bridge the ignorance gap of the population and our leaders. The “not-in-my-back-yard” position is a short-sided myth! Vital and necessary minerals and other resource products come from countries without the sensible regulations that have evolved in the United States over the past hundred years. The consequences of this are global.

Even though population growth and physical development exploded during the twentieth century, the world-changing roll of the United States has taken a more dramatic turn. A counter cultural shift emerged. America was considered the can-do country. Democratic and capitalistic social ideologies opened the doors for an expanding middle class, especially from workers identified as “blue collar”. Our natural resources were developed and accessible. What changed?

Somewhat reluctantly America became a world power and responsible leader. The blue-collar worker of today is losing economic ground as our society turns more and more to the service industries. But the need for manufacturing contemporary products in America remains; and in order to produce, industry requires raw materials. America has them in abundance. America also needs the backbone of its labor resources to insure our freedoms.

The time has come to broadcast how to exploit our inherited resources in the 21st century. Original Sixteen to One Mine, Inc., a US corporation, has all the pieces to lead this renaissance except one. That missing ingredient is explained in its Executive Summary. The oldest American mining corporation operating needs a grubstake to turn its dream into a reality.

Leave them alone and they'll come home wagging their tales behind them.

July 25, 2007
 By Michael Miller

03/30/2012  12:02PM

The article below surprised me. Hope you find this bit of history interesting. Our Company purchased the Plumbago, which is a small Sixteen to One mine, not as many miles of working but an impressive production record. In 1937 three years had passed after the federal government took over the gold mining production industry. The long standing $20.67 price per ounce of gold increased to $35. The catch was that Americans were not allowed to own gold so the government bought the yellow metal. I was aware that the price increase also increased activity but a 50 man crew at the Plumbago is an admirable number.

STRIKE REPORTED AT PLUMBAGO MINE

Mine operated by Official of Hudson Motor Company

A gold strike of undetermined extent is reported, under good authority, to have been made recently at the Plumbago Mine in the Alleghany district. It is reported that the operators have been working on the present ore body for the last month. This property is one of the old producers of the district that is being reopened by the newly awakened interest in the industry and resultant influx of capital into Sierra County. A high official of the Hudson Motor Car Company is reported to be the active head of the financing structure behind the Plumbago operation. There is a 20-stamp mill and auxiliary equipment on the property but it is reported that only ten percent of the stamps are in service at the present. Nearly 50 men are reported to be employed at the Plumbago at the present time. During the past winter the mine employees were kept busy packing supplies in on their backs in order that the mine could continue to operate without interruption and in this management was successful, even during the worst of the severe weather.

The Mountain Messenger – Saturday, March 20, 1937
 By Michael Miller

11/21/2011  4:34PM

Archives are a great addition to any business. Thanks to Ray Wittkopp for sending me the letter below.

Some important distinctions in the following letter by Reno H. Sales are important distinctions that relate to the Sixteen to One mine today (67 years later). I will point some out for those of you craving a deeper look into one of the world’s great gold deposits, those who want to get to know the possibilities of our operation in Alleghany and everyone with an interest in mining throughout the world.

Mr. Sales earned the title of “Father of Mining Geology” as his systematic study of ore bodies became the standard practice for the industry. He was born in 1876 and died in 1969. Bill Fuller, company geologist from 1950’s to 2001, studied under Mr. Sales. Bill’s maps are priceless treasures that we continue to study.

Anaconda Copper Mining Co. June 27, 1944

Mr. R. S. Moehlman
29 E. First St., Rm. 216
Reno, Nevada

Dear Bob,
I am in receipt of a copy of your letter to Mr. Perry dated June 20, also a copy of your “on-the-run” Memorandum on the Nevada or Hogle Mine, situated in the Battle Mountain District, Nevada. That kind of report reminds me of “hit and run” Joralemon, and it is the very thing I am trying to get away from. The Hogle property is within a short distance of our Copper Canyon operation, and if there is one place in the United States where we need additional ore developments, it is in that area. We spent a lot of money on the Iron Canyon and on the Minnie in the hope that an additional property would bolster the Copper Canyon Project.

In addition to “too mush digging - - - in this mining profession on half-baked geology”, there is too much on the run type of geological examination work being put forth as a basis for starting the aforesaid digging.

You spent a long time in the Battle Mountain area, during which period you become acquainted with nearly every prospect in that region and you formed definite ideas on general geology. Jim Wilson is a relatively new man in examination work, and we should not put it up to him to decide for us whether the Hogle property has future promise.

When you are given the opportunity of examining a property in the Battle Mountain area, especially one that is closed most of the time, you should make that the occasion of a most careful and thorough study of its possibilities.

In your introduction you say, “The mineralization was not studied in detail, after it became apparent that possibilities were not likely to be large enough to interest the Anaconda Company.” Your course of action and reasoning is opposite the one I usually use. I study the mineralization and geology first and then decide whether or not it has possibilities of interest to the Anaconda Company.

Yours very truly,
Reno H. Sales

Reno Sales embraced utilizing the scientific approach as his foundation for exercising geological approaches for everything he did. No exceptions, no short cuts and especially no sifting data to support a conclusion. Just as Joe Friday said in Dragnet, “Just give me the facts, mam, nothing but the facts”.

The first distinction that relates to the Sixteen to One is describing ore examination as “on-the-run”. While inquiries continue about the worth of our property and participation in advancing the Sixteen to One’s operation, I knew that an influx of capital for sinking a new shaft or exploration was needed years ago. No one has done more than an “on-the- run” look. As Reno wrote, this is not the manner to approach a mineral property.

Reno also makes the distinction between “on-the-run” and “hit and run”. I got into the gold mining business in 1975. Over the past decades I’ve read about too many mining ventures that were actually funded on “half-baked geology”. What a shame!

Today there seems to be an aversion to risk by well-heeled investors to go get some of the yellow stuff that has continued to be a solid asset for centuries. Reno Sales’s spirit is howling over the sloppiness in the execution by professional geologists, mining engineers and mining operators that has taken place in North America since the governmental shackles place upon the gold mining industry were removed in 1975. I’m not in the grave yet and my spirit is howling in either disgust or despair over these abuses.

Reno hits the bull’s eye and does not mince his words in calling out Joralemon or Moehloman: “Your course of action and reasoning is opposite the one I usually use. I study the mineralization and geology first and then decide whether or not it has possibilities of interest.” Reno, I’m glad to know you.
 By Michael Miller

11/17/2011  3:18PM

Some say I’m a blatant pack-rat when it comes to gold mining history, especially Alleghany and the Sixteen to One. No comment; however yesterday as I was arranging important stuff I saw an old California Mining Journal and wondered why it was here. One look at the index revealed the answer and now you can read an article that I do not remember about an interesting piece of the mine’s history. I encourage you to do so and click on NEWS for the title, “Closing the Original Sixteen to One Mine, Inc.”
I learn something new about this company and mine every day. The closing sentence strikes truthful today only “misguided governmental treatment of regulations” could substitute for the word, “economics”.
“But the present operation has been continuous since 1911 and a little more than half a century later the economics of the country, which has swung to soft currency instead of hard money, has brought a steady reliable contractor to the economy of the country and the state, the nation too, to its knees.” The End
 By Michael Miller

07/20/2011  3:55PM

I bought a rare periodical (published in 1922) years ago with a fascinating cover and found the story below written by John Hammond. Hammond was born in San Francisco on March 31,1855. He benefited from an education and training in science, engineering, philosophy, mining and technology. In 1880 he was chosen by the United States Government as special expert for the geological Survey to examine the gold fields of California. His report on the gold resources of his native State, made after the most thorough investigation, was the most comprehensive ever prepared up to that time and is one of the recorded government authorities. Please enjoy his story. John Hammond’s biography is one of the most interesting I have read, a complete surprise set with historical importance.


The Story of Gold
By: John Hays Hammond

The preeminence of gold throughout all history, as a precious thing most desired by man, is not altogether easy of explanation. As a metal it is far less valuable to man than iron, coal, and a score of other substances of daily use. Yet its name had always stood for super-excellence. This high regard for gold is probably based, in part, upon a race memory of the time when it was the only metal known to mankind. Unlike other metal, which, as a rule, require some smelting or some other process of reduction to separate them from their ores, gold is abundantly found in an uncombined or “native” state, so that our ancestors found it lying free and may have made ornaments of it long before they discovered the use of fire. It was so soft as to be easily wrought while its beauty appeals even to the untutored savage.

Gold ornaments are found among the remains of the most ancient civilizations. Methods of producing gold are illustrated in Egyptian rock carvings as far back as 2500 B.C. Sheepskins used in the earliest times to catch particles of the precious metal wash from river sands probably gave rise to the story of Jason’s quest of the Golden Fleece.

Originally, gold and silver were weighed when serving the purpose of money, just as gold-dust is weighed today over the counter of the mining-camp trader, but gold coins were used some six or seven centuries before the beginning of the Christian era. In the Middle Ages, the superstitious reverence for gold assumed its most striking form in the fantastic doctrines of the alchemists.

Gold came to be regarded as the most perfect and “noble” of substances, and was mystically associated with the sun, as silver was with the moon. Comparatively little of the metal was produced by medieval miners, and it is estimated that the total stock of gold in the world at the end of the fifteenth century did not exceed a value of $225,000,000. Coming down to modern times, we find that gold plays a conspicuous role in human affairs, for reasons that can be clearly defined.

First of all, it is the best monetary standard thus far discovered, and organized society could hardly exist without money. Gold is suitable for use in making an immense variety of objects in which it is desired to combine beauty with utility, for the reason that it is extremely malleable and ductile, does not tarnish, and is not easily rusted or dissolved. Compounds of gold are used in photography and medicine.

Lastly, it was the lure of gold that opened up some of the richest agricultural and grazing lands of the world to settlement and development. The Pacific Coast of North America and the adjacent interior were believed to be almost devoid of valuable resources before the gold rush of 1849.

Speaking in the United States Senate a few years earlier, Daniel Webster said: “What do we want of that vast and worthless area – that region of savages, wild beasts, of deserts, of shifting sands and whirling winds, of dust, of cactus, and of prairie dogs? To what use could we ever hope to put these great desserts and those endless mountain ranges?”

Gold seekers populated the country and the transcontinental railways followed the trails that they had blazed. Today, California is one of the most productive agricultural regions of the earth, while the value of her manufactures is ten times the greatest value ever attained by her output of gold.

The story of gold in the United States began with the gold rush in 1849. California still leads all other States in the production of gold, though Nevada, celebrated for its Comstock Lode, is rich in silver as well as gold. Colorado, with its Cripple Creek and South Dakota, which possesses the most productive individual gold mine in the country, are close rivals.

An interesting fact in connection with the discovery of gold in California by Marshall in the year 1848, is that a discovery of it had been made three years before that date by Mexican miners in the San Fernando Canyon, not far from Los Angeles. These miners extracted from a “placer” there about $100,000 worth of gold before the deposit was exhausted. In 1880, while engaged in the examination of the gold miners of California, I met Marshall, who accompanied me to Coloma and pointed out the spot, as nearly as he could identify it, where he discovered his first nugget of gold. Out of some curiosity, I panned there and found a nugget weighing about fifty cents in value. This was the size of the first nugget Marshall had discovered.

No other metal is so ductile or so malleable as gold, an ounce of which can be drawn into a wire fifty miles long. It has been beaten into leaves 1/367,500 of an inch thick. Gold beating and various methods of gilding have made almost pure gold so commonplace a substance that we see it about us on all sides – on signs, picture frames, furniture, pottery, the binding and edges of books, and even spread over broad architectural surfaces such as the dome of the Library of Congress, in Washington.
 By Michael Miller

06/30/2011  1:25PM

Sacramento Business Journal writer, Mark Anderson, called today asking about a gold situation in California. He forwarded this article that appeared in the Journal almost seven years ago. It was interesting as I never saw it before. Check the spot price of gold back then.


Gold mine finds enough to dig itself out of hole
Drills out $600,000 worth
Sacramento Business Journal - by Celia Lamb, Staff Writer
Date: Sunday, August 1, 2004, 9:00pm PDT

A small, struggling mining company in Sierra County says it hit pay dirt last week.

The Original Sixteen to One Mine Inc. drilled out between $600,000 and $700,000 worth of gold in about one week from its mine in the town of Alleghany, said company president Michael Meister Miller.

The company had started working in that section of its mine about one year ago but hadn't turned up much. Miller said he was about to give up on that part of the mine and send workers out on another project when they hit the bonanza.
So far they have extracted 1,000 troy ounces of gold, and Miller thinks there's more to come.

It couldn't come too soon for the company, which has been bogged down in the last couple of years by regulatory and legal hurdles, high power costs, high workers' compensation costs, and legal problems that followed the death of a miner.

"We were down and out," Miller said. "We were practically down on our knees."

Sells to Alaskan tourists: Original Sixteen to One mine is a traditional underground hard-rock mine that has produced more than 1 million ounces since 1896. It's been about two years since the company found a bonanza as big as last week's, Miller said. Back then gold prices were lower, so it wasn't worth as much.

Gold was selling for $385 to $390 per ounce this week. That's down from this year's peak of $427.25 on April 1 but much higher than prices from 1997 to 2002.
The company principally sells jewelry-grade gold and gold-laced quartz, which has been selling for about $2,500 per ounce, Miller said. It's sold mostly to manufacturers who make jewelry for the tourist trade in Alaska, he said.
"The gold mining industry is certainly in decline in California, so it's good news if they've hit some gold," said state Department of Conservation spokesman Don Drysdale.

Death landed company in court: The last few years have been difficult for Original Sixteen to One. In 2000 the company brought in an annual profit for the first time since 1995, despite the bear market for gold. But the good financial news was overshadowed by the death of miner Mark Fussell, who hit his head on a protruding ore chute as he rode a locomotive.

The federal Mine Safety and Health Administration fined the company $19,000 following the accident, and the company has appealed the penalty to the 9th U.S. Circuit Court of Appeals. The company and Miller also faced criminal charges related to the death in 2002, but a Sierra County Superior Court judge dismissed the case last year.

"It was very, very damaging to the company," Miller said. "My hands were tied to raise money and it was very, very emotionally distressing."

The company has sued the prosecuting attorneys in Sierra County Superior Court for $24 million, charging malicious prosecution and disruption of business advantage.
Miners get 30 percent of what they find: The company once employed 14 miners, but now it hires workers only on contract working for a 30 percent share of what they produce. A crew of nine works the mine now. The three miners who uncovered the recent find have each received $40,000 so far, Miller said.

The company plans to use the proceeds to pay delinquent power and accounting bills and reduce its debt, which totals more than $400,000.

Because the company could not afford to pay an accountant for the past three years, its financial statements are unaudited and the company is in violation of Securities and Exchange Commission regulations, Miller said.
The company tracks sales of its stock on its Web site under the symbol OAU. The last recorded sale was 75 cents on July 22.

Miller defended the company's stock price, saying the firm is in business for the long haul.
"The plans of this organization are not to hype the stock, sell our shares for $5 or $6 and go to the Bahamas and sit on the beach," he said.
Eventually the company hopes to raise $6 million and drill a new shaft, Miller said.

Less than a penny per share: Original Sixteen to One earned $81,917 in the first quarter, which ended March 31, according to unaudited financial statements. That equaled less than 1 cent for each of the nearly 12.9 million shares outstanding, but it was up from a loss of $13,297 a year earlier.

First-quarter gold and jewelry sales of $246,285 were up 108 percent from the first quarter of 2003.
The company lost $80,000 on sales of $329,743 in 2003, compared to a loss of $280,085 on sales of $455,506 in 2002.

Original Sixteen to One is the closest productive underground hard rock gold mine to Sacramento.
 By Michael Miller

03/14/2011  1:19PM

Recently this letter found its way to our office bundled with other correspondences about selling the mine Our Company bought the Rainbow Mine on May 4, 1943, which has been on its wish list for exploration for decades. Our mining ancestors ran the 1500-foot level towards the rich vein in the 1950’s but never pushed the project to actually intersect the Rainbow workings. Now our efforts are northward, away from this old mine to the south. Maybe we should offer this proven and valuable gold mine for lease or joint venture and give someone else the opportunity to prosper in this bull gold market.
This is an important historical letter. A glossary of names will help the reader: Stewart M. Marshall director and president of Alleghany-Rainbow Mines Company (incorporated July 23,1937); Bennett (C.A. Bennett) was head management in Alleghany for many years; Mr. Maxfield was president; Duke owned the Gold Crown/Wonder mines, which we bought in 2005; C.C. Cushwa managed the Spring Hill mines in Grass Valley; Bortner was a miner living in Alleghany.


October 22, 1942 Mr.Stewart M. Marshall

San Francisco, Calif. Rainbow Claims and Equipment

Dear Sir:-

As you were advised that I intended, Briggs and I went to Alleghany yesterday and visited the Rainbow in a hasty attempt to cover all the matters mentioned in letter of October 17.

I talked at length with Bennett, of the 16 to 1 mine, about the land and about the equipment on the property. Bennett would be interested if he were not faced with the shutdown order, but he says he is not at all sure that the 16 to 1 will be able to weather the blast of shutdown and, like most people directly affected by the order, he doubts whether or not there will be an American left after the war is ended. I believe this last is an unduly pessimistic outlook, and that Bennett is not as much worried as he is irritated.

Bennett would have been decidedly interested a few weeks ago, and I believe there is a chance he can now be interested, on the basis of a deferred payment settlement, which may or may not interest you. I asked if he would object to our approaching Mr. Maxfield, which he denied, but he did state that it would probably be impossible to interest Maxfield without his (Bennett’s) approval.

I asked several men in Alleghany about Duke’s reputation, and find it very dubious. One man said that a charitable statement about Duke would be that he is crazy: Bennett advised against any dealings unless cash is paid on the nail: Bortner has worked for Duke, and has a bad report about the man’s misinterpretations. It seems that Duke has repeatedly involved you and the Rainbow Company in his own fanciful operations in the Alleghany district. He is entirely insolvent. Also, according to Bortner, he claims title to some land owned by the Rainbow Company.

Regarding the old house on the top of the hill, now occupied by an elderly woman, a pensioner on the State Relief rolls: this place is a cross between a garage and a barn, with the barn having the best of argument. The sole feature of the building which is of any value as salvage is a corrugated iron roof, worth about $25.00 at going prices for used corrugated roofing. It might conceivably be valuable as a storeroom so Alpha or some other merchant interested in futures, but right now, when there are 45 empty houses in town, its immediate value is pretty close to nothing. Mrs. Devon, the lady who inhabits the place, was not available during my visit, but she is reliably reported as drawing a state pension (Old Age), and was forced to move away from her son-in-law’s house in order to retain the pension, as the state threatened to withhold the $40.00 pension if she continued with her daughter. This is why you can now rent the house to her. The $7.50 rental is simple, and the place is not worth wrecking. Polglase, the storekeeper in Alleghany, asked for a minimum price, and said he would try to find a buyer. I also asked Dortner to develop a sale idea if possible.

The equipment at the mine, while in good order, is old-style machinery. The two compressors are about 12” bore by 12 inch stroke, single stage machines, no unloaders discoverable on either machine, and the valves on both are pro-plate-valve types. They are entirely serviceable of their kind, but are very heavy. They are driven by old motors, one of which, rated at 50 HP, a very old General Electric squirrel cage motor, weighs about two tons and will probably stand a 150 HP load for an indefinite period without undue temperature rise. The 75 HP motor, driving the Ingersoll-Rand compressor, is about the same size as modern motors of the same HP and RPM: the GE motor is 720 RPM, unless I made a mistake, while the Westinghouse motor is a 900 speed. The old sharpener is an IR 50, and is heavy and obsolete, and will not pay the cost of moving to the highway. The smaller motors, rock drills, steel, saw frame, pump, while not the newest types, are still serviceable equipment and may be worth hoisting to the highway. The rails are badly rusted, but there is a total of about 8000 linear feet of 12 pound rail, or say 15 tons; Pockmann says he can pay about $30.00 per long ton for this sort of rail, if straight and free from surface bends. Some of the rail is badly corroded that it will not be useful. However, after we get the rail to the highway, it will still cost about $8.00 per ton to haul it Sacramento. The mine cars can be forgotten as valueless. The pipe leading into the mine in 3” casing pipe, badly corroded or rusted, and is worthless. There is a large supply of iron and steel, but it is not worth taking out.

Aside from the motors, the control equipment is first class, although several years old, and is just as good as new for practical purposes. There are two small dry lighting transformers, of an old type and irregular make, but serviceable. The 3-year-old transformers in the substation are very heavy for 40 KVA units, each containing 100 gallons of transil oil for insulation, with fins for cooling same: they may be salable, as I have had an inquiry recently about 6600-440-220 transformers. Bortner said these were the property of the Rainbow Company; PG & E has recently installed some modern 10 KVA’s and disconnected the older large machines. These transformers are not listed in your statement of the Rainbow equipment, and may not be Rainbow property. I presume that the power line in the property of PG & E. The wires leading underground are worthless except as scrap copper.

Getting this material out of the canyon will be a costly slow job. Biggs estimates the cost at $400 to $500. It will be necessary to set up some kind of power for the hoist, as the old gas engine is worn out, and is probably too weak for raising materials out of the bottom. Bennett offered use of a 15 HP hoist which he is not using; we have here at Spring Hill the old winze hoist. I thought of using a tractor for the hoist, but there is no level space long enough for the run. The standing cable on the old towers is so badly rusted and burred that it looks like a porcupine; we can test it with a load of rails, or with a chain block, before using. Biggs thinks we shall have to string a new standing (carrier) cable on the towers; this would mean moving the 7/8” hoisting ropes (bought with the 700 winze hoist from the Empress mine) to Alleghany, setting same up, and then recovering it. The old winch used for lowering supplies to the bottom of the canyon looks pretty flimsy; is there one in your office or elsewhere who knows what was used to lower the heavy machines to the bottom? In order to supply electric power for the hoist, we should have to string a cable or wires from the Rainbow to the point where the hoist would be set.

It would obviously be far better to sell the machinery in place than to incur the heavy expense of salvaging the stuff, unless we have a market for the machines before we start. I fear that the cost will be higher than the $500.00 figure. Polglase offers the use of the tractor he has at the rate of $3.50 per hour, including operator; the machine is badly worn. If the tractor is idle for extended periods, the charge will be dropped off. However, we should have to pay the operator’s wages, although he could be available for other work. You realize that a tractor would be necessary to handle the equipment from the head of the tram to the road.

I have not yet had a chance to see the other persons I hoped to ask about the machinery or land, but shall try to do so during the week. Lashbaugh, who was formerly interested in the Seven Aces mine, came in this afternoon about a Cobalt property, and I asked him if the Seven Acres would be interested. Lashbaugh has lost his interest in the Seven Acre property, but said that one Brinker, in San Francisco, might be tried. This suggestion was also made by U. S. N. Johnson, owner of the local Bret Harte Dairy. Incidentally, Lashbaugh says he has an option on a cobalt deposit from which analyses running as high as 8% cobalt have been made by Smith-Emery on samples. It may be worthwhile to look up the office in the Bay district of the Seven Acres mine, if there is one.

It might be desirable, in case we do remove the machinery and are unable to sell it, to store the equipment in the house at the head of the trail. The small motors and lighter materials could be brought to Spring Hill, and the heavy machines left at Alleghany.

Sincerely,
C.C. Cushwa
 By bluejay

09/19/2010  11:32AM

Just a reminder: if you have never listened to east Texas Mike voice his opinion it is well worth the experience.

Mike is interviewed each Sunday night on http://www.krld.com by Charley Jones at about 10.06 P.M. Pacific time.

Pod broadcasts of previous Sundays night conversations with Mike is available on demand.

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