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Ideal Time for Facts

       

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 By bluejay

05/22/2009  12:28AM

The following article written by David Duval appeared on jsmineset.com tonight. I thought Mike, especially, would enjoy the historical references made to Homestake Mining along with the writer's thesis that small mining operations can be quite positive.

With Commodity Prices Trending Upward, Near-Surface Mine Development and Royalty Model Become Options for Junior Explorers

By David Duval

The contemporary wisdom that “bigger is better” has taken a well-deserved beating since the credit crisis unfolded and destroyed some of the world’s largest financial institutions in its wake.

With large-scale project financing options limited or non-existent because of the credit crisis, many of the smaller players in the global mining industry have been forced to review their growth strategies, a trend that could see historic mine development practices making a comeback and less mainstream business models adopted.

Perhaps not since the turn of the 19th century has the appeal of “small” become so attractive. Indeed, today’s examples encompass a broad range of industries including power generation (wind turbines, small hydro, solar etc.) and small mining operations that provide feedstock to portable or centrally located process plants and refineries, a practice that is relatively common in Asia and Africa.

Not being major enterprises with large industrial footprints, long permitting periods, and high capital costs, these businesses can be developed incrementally from ongoing cash flows, substantially reducing the risk to investors. In the “good old days” this scale of development was the rule rather than the exception and most of the world’s major gold camps were discovered and developed on this basis over a century ago.

In his book titled, "History of Dakota Territory" George W. Kingsbury describes the development of the Homestake Mine in these words:

“When the claim was purchased by the Homestake Mining Company the exploration consisted of small surface pits only and some mining men considered its value as doubtful although there were a number of favorable surface indications. The company immediately began the further exploitation of the property and two shafts equipped with hoisting engines were sunk and various drifts were soon under way.

By July, 1878, or the year after the purchase of the claim, the first mill of eighty stamps was constructed and in commission. With the first dropping of stamps it was proved that the mine was a producer and from that small beginning the mine has steadily expanded, breaking all records and setting a new pace in the world of gold mining. Although it is a very low ore, illimitable tonnage is at the disposal of the company and large mills, the most improved mining machinery and great mechanical power enable the mine to pay large dividends.”

It’s worth noting that Homestake was listed on the New York Stock Exchange in 1876 and its now dormant South Dakota mine produced approximately 40 million ounces of gold over a 120 year period before the mine’s economic reserves were exhausted in late 2001.

Mimicking the discovery of other major gold finds at the time, Homestake began as a surface showing with gold values occurring in vein material that was easily distinguishable from adjoining wall rock. Pick and shovel mining provided a bulk sample for metallurgical test work and grade estimation.

First off, however, the miners recovered gold from alluvial gravels that were eroded from the hard rock vein material. Exploration shafts were then sunk to evaluate the vein material at depth, producing gold in the process to offset exploration costs.

In many parts of the world (including Africa and Latin America) artisanal miners have already gained access to sub-surface vein material by hand sinking small shafts and mining along the vein structures. In fact, you would be hard pressed to find a major mine in Africa that didn’t have such workings within its property boundaries. These old workings facilitate target selection and the development of a resource base for production purposes.

Because of its high specific gravity (gold’s relative weight to that of water) gold concentrates in stream beds within alluvial gravels and it can be extracted by mechanical methods that take advantage of the fact it is 19.3 times as heavy as water.

Gold occurs in many different geologic settings but two basic types of occurrences or deposits are recognized: primary and secondary. Both rely on similar chemical and physical processes to produce economic concentrations of gold ore.

The Homestake discovery didn’t have the advantage of present day drilling technology to confirm the existence of an orebody whose life would extend for more than 100 years. Instead, the economic viability of the mine was established by mining and processing the easily extractable surface material with equipment that used gold’s specific gravity to produce a saleable concentrate. In the late 1890s, cyanide was employed to recover fine gold from rocks and is still used under carefully controlled conditions.

Even today, gravity separation is the best proven and accepted technique of concentrating minerals due to its high efficiency and low cost. In addition to gold, gravity separation remains a primary means of concentrating iron, tungsten, tin and coal ores.

Process plants (mills) for gold need not be large and in fact they are often manufactured and assembled in large industrial centers where skilled trades people are readily available. By employing modular construction techniques, equipment can be brought into a mine site by truck, air transport and in the case of tidewater locations, by sea barge. The various modular sections are simply joined together like a kid’s Lego set on the mine site. As the operation expands, new modules can be shipped to the site and added to the existing plant facility.

In order to reduce capital requirements, companies often employ contractors to mine their mineral deposits at a fixed price, locking in costs for the term of the contract. With contract mining, a company need not acquire in-house mining expertise or equipment that would only be utilized on a seasonal basis in any event. For smaller operations, contractors can provide services for a sufficient length of time to develop a stockpile for year round milling operations.

What’s surprising about today is the reluctance of many companies to consider the small scale, staged development of mineral deposits which is much less risky from both a financial and technical standpoint. In gold’s case, some of that reluctance no doubt relates to the belief by analysts that any company producing less than 100,000 ounces won’t get adequate market recognition. But as we’ve seen during the global financial crisis, analysts sometimes make a habit of being just plain wrong.

Nonetheless, in an escalating commodity price environment, the appeal of these modest-sized operations is certain to increase, especially where possibilities exist for multi-sourced production that will boost consolidated output to even more attractive levels. This has been a feature of China’s mining industry for generations and is certain to catch on in the West before too long.

Physical gold output – even on a small scale basis – provides price leverage to companies in the marketplace, especially for situations where the exploration potential leaves room for future production growth.
 By Dave I.

05/21/2009  11:36PM

I hope we have a big choir. Freedom to all.
 By bluejay

05/21/2009  4:30PM

Rick

Re what we are going to do about it?

I think the Tea Parties that were well organized as a show of discontent with those in power were a good start.

I am a firm believer in what Gandhi and Martin Luther King advocated in dealing with injustice, organized nonviolent resistance.

Get organized, prepare signs to convey your message, select a location, advise the media and present your case in public, the more the merrier.
 By Rick

05/19/2009  6:07PM

An essential reality I've known since a very very small little guy, is how love of freedom comes from love of country, hence why my counrty was founded: with Constitutional principals.

Essential to the very core of this love is defending any assault to the contrary, and keeping in the forefront of any afront that our country has a government, not the other way around.

This current government actually believes IT has a country, not the other way around.

I feel like I'm writing to the choir.

WHAT ARE WE GOING TO DO ABOUT IT????"
 By bluejay

05/18/2009  7:53PM

I had a thought, maybe the State thinks they can help balance their budget by putting State employees in the streams after they tell us to "take a hike." I hope it didn't happen today and I hope the two Senators I contacted did the right thing for us.

I've learned an important point, when governments get into trouble they'll do whatever it takes to stay in power and that means taking it from the citizenry.

Stay informed, read http://www.jsmineset.com. Martin Armstrong, the living legend, has related with his graph what we are expected to witness upcoming in the world of business. Also, Jim Sinclair has some interesting comments tonight which precede some informative articles.
 By Dave I.

05/18/2009  4:34PM

Thank You everybody for your concern and help with the opposition to SB 670. It was item 41 on the Senate Floor session today. Senator Wiggins was kind enough to "pass" when it was requested for consideration.
 By Dave I.

05/17/2009  10:46PM

The one good thing that has come from this threat that it has alerted and united we the people of the future legislation that will destroy our rights under the 1872 Mining law, This fight is only beginning.
 By Dave I.

05/17/2009  10:40PM

We know the Truth,the Senator who wrote SB 670/Wiggins,Vacuum or suction dredge Equipment, knows the truth, but has chose to ignore the truth for the prejudice of her own advocacy to destroy our rights to dredge for gold in our rivers and streams.
 By Rick

05/17/2009  6:21PM

In combination with Mike's letter to the Gov, including the latest Misc topic additions concerning the pending vote to abolish dredging:

WHY? Because they can? Becuase they have no clue of physics or history or logic? (Ahem, Rick....yes...)

Wake up!!!!!!

Those of us taking up the challenge to contact "representatives" (I want to gag sometimes when I need to refer to them as such) ....please remind them of this truth:

Rocks in the rivers are round because they roll. Theyv'e been rolling around for billions of years because water rolls them. Water is a force made from snow. It's caused by weather. The weather has been happening for 4.6 billion years.

The weather and rock-rolling didn't start when this current group of idiots believe their own personal short-sided version of history started.

Rocks the size of busses, even ten busses roll and shape our rivers every year. Give me a freaking reality check.

The rocks in our rivers are and have been rolling around and re-creating habitat for longer than human-kind can even fathom. Except, wait....history just started for idiots with self-centered short-brained reference points.

Let me see..."we'd better outlaw dredging the rivers because it disturbs the habitat" or whatever other anthropomorphic pipe-dream reaches their egotistical and blind reasoning.

I am ashamed of my own human species trying to take credit for why river rocks are roundy. Give me a flying break!!!!
 By Rick

05/05/2009  4:39PM

In hind-sight, I wish it hadn't turned into hind-sight....Bluejay, you called it when the Dow was still around 13500, and I didn't get out and into gold, although...so I'm riding this one through, to a point. This time my exit point is quite relatively low.

Strange as it is, gold is a super buy, even at $1000, considering the looming inflationary inevitablity...yet another derivative. This time I'm listening.
 By bluejay

05/05/2009  12:26AM

"How Wall Street And Washington Betrayed America"

http://www.kitco.com/ind/Wilson/may042009.html

Let the light shine brightly on the truth!
 By Rick

05/03/2009  5:36PM

Good commentary, Bluejay.

One key phase that you wrote, "Doesn't the government know...?" is unfortunately answered in truth:

My commentary, "Yes, with the super-majority, the government does know what it's doing..."

And that is: a Statist agenda.

This is all happening not by chance, but by the purpose of destroying the free market.
 By bluejay

05/02/2009  11:24PM

Rick

My Congressperson knows exactly what I feel which is no different, I'm sure, with the way you are feeling. I've told her that I'm extremely unhappy with the way the bank lobbyists are running our Representatives to legislate against us while they were placed there by the voters not the bankers.

I have told her that it wouldn't surprise me if none of the current Congressional Representatives were returned to office once the people have their next turn. I have told her that a seriously backed third party will emerge to vote them all out with new people who are more inclined to represent the will of the voters and not the highly paid banking lobbyists with money paid to them probably from our TARP funding that was ordered by King Paulson.

We need real reform in this country and I am directly referring to how the current government operates and especially, the judiciary.

The biggest problem from where I view it is the current ability of judges to play god with people's lives on cooked up charges from Federal prosecutors who are just interested in their convictions rate to put on their resumes for a better paying jobs.

In our country the conviction rate for Federal prosecutors is in the range from 98% to 98.5%. This is a higher rate that existed during the times of Nazi Germany and the Spanish Inquisition.

I'm not the only one that feels this way. In Martin Armstrong's letter of April 15, 2009, available at http://www.scribd.com, entitled "Financial Panics = Political Change" he gets into the topic of judicial reform with examples of past abuses by judges.

The major problem with judges is there in no public tribunal of accountability and even the Senate or Congress doesn't possess the current will to rake them over the coals when events dictate it.

Aside from the judges, the SEC and Commodities Futures Trading Commission are no better. The big fish seldom gets hooked. When was the last time the Sherman Anti-Trust Act was used to catch a big fish?

Doesn't the government know what the banks have done to all of us on interest rates and fees on their charge cards? I call this a cartel effort to suck blood from us when all the way back to the Roman Empire usuary laws protected its citizens with a cap of just under 10%. The reason why the economy is sick and getting worse is because we are paying a great deal of our income for interest to the banks and it is being withheld from going directly into the economy. It is a moral crime to allow the banking institutions to act as a loan shark business when lower rates would create jobs and put some people back to work.

If anyone is inclined to get a little more educated, I suggest that they access Martin Armstrong's mentioned essay under the sub-topic of "Judicial Reform Is Vital To Our Economy" in his April 15, 2009 letter.
 By Rick

05/02/2009  9:13PM

I almost wrote under the topic "Another US Citizen goes Foreign" but I haven't left yet....because I still have some fight in me.

Our slanderous whipping by the unconstitutional rulings by the Statist judicial crap concerning the CDAA's railroad construction planted over Constitutional civility was on;y a precursor to what is unravelling in front odf all of us....what is happening in Washington, both from the executive and congressional branches? Tyranny! It is the very nightmare our Founders rebelled against....

Yet...I sit here and witness ignorance, passivity, capitulation, dilution of principal, to name a few symptoms of our otherwise former fighting sovereign nation of freedom fighters and defenders of the Constitution.

IS EVERYONE ASLEEP????

Where and when can we mount a Constitutional challenge to this aggregious mess?

George would be the first to knock down the door. Both of them.
 By Michael Miller

01/22/2009  2:57PM

Gold Sector problems existing within six of the large or well-known gold mining companies are obscure to disclosure. One problem exists for all but one of the companies listed below, which seems to have no significant problems. Some of the companies have multiple issues. Here are the companies discussed (alphabetical order):
AngloGoldAshanti Ltd, Barrick Gold Corp,
GoldCorp Inc, Kinross Gold,
Newmont Mining Corp, Teck Corp

Here are the problems in no particular order:
1. Too few miners in senior management (accountants, lawyer types).
2. Poor or declining property.
3. Big challenges due to quality of assets.
4. Trouble in financing acquisitions.
5. Poor decisions on engineering and execution of engineered plans.
6. Non mining, political interferences.

These six companies share the bulk of volume (share trading) in the marketplace with about 2.5 trillion shares outstanding.
 By Michael Miller

12/09/2008  4:01PM

Another story about the serious problems of counterfeit coins (see 12/02/08 entry below) was released by the American Numismatic Association in Colorado Springs, Co. Full story found at its web site, www.money.org.

Excerpt: “New counterfeit operations have sprung up across the world, particularly in China, where relaxed laws protect these operations from liability. The counterfeiters use clever production methods and cutting-edge die-making technology, creating forgeries that are difficult for most collectors to detect. A wide variety of counterfeit objects are being produced, including U.S. and world coins, paper money, errors, and even slabs. With the assistance of unprincipled dealers and investors, this new material is flooding the market at an astonishing rate, compromising the investments of collectors and the integrity of honest dealers. “
BUYERS BEWARE !11
 By bluejay

12/07/2008  3:37PM

The shareholders of the Sixteen to One along with the company, like others in the country, are being subjected to cash flow problems as income slows down for a myriad of reasons, not to mention the shrinking value of our money as a result of the continuing trials of expanding inflation.

The day is coming when debt, if not eliminated or reduced to manageable levels, will control our destiny. If debt continues then it will only become magnified as our purchasing power shrinks to levels where we may not be able to service it in the future which is coming sooner that most believe.

Its really quite ironic that the banks get so much help. Rothschild of western Europe is worth $500 trillion which is half the world's wealth and their right hand in the U.S., being represented by the privately owned Fed and J.P. Morgan a large recipient of bailout funds. The Fed and J.P. Morgan should be asking Rothchild for money, not us. Can you imagine one thing that $500 trillion couldn't buy(government reprsentatives?).

Our debt that people owe the banks was never their money, they were allowed to print it based on consumer deposits and collected interest from us based on someone else's money. This is the reason that gold is manipulated, so the public is turned off by it thus leaving their savings in the bank for them to profit by.

Rothschild over their long history have made their money off the people like us along by using their influence to hand pick presidents, crashed stock markets(gold and silver shares?), bankrupted nations, orchestrated wars and have impoverished millions.

As shareholders we are owners of gold in the ground as opposed to the Rothschld's massive gold holdings in their underground vaults. We still have a chip in the big game with some other rich owners of gold but we must eliminate any risk of losing it by kicking out our debt responsibilities before they get out of hand.

I remember Boomtown just across I80 in Nevada has display cases of memorabilia including Silver. Why not ask them or other casino/hotels in Reno if they would be interested in any of our specimens for lobby displays? Why not contact large owners of gold companies in the western U.S. to see if they might have an interest?

If we can't sell our specimens or statues, the next step may be to saw them down for jewelry. I understand that this market is in short supply.

It appears that the board needs to make some immediate decisions concerning the elimination of our debt exposure.

During this same time period the board should be contacting mining or exploration gold companies to do a private placement with them for the cash we require to go on.
 By Michael Miller

12/02/2008  6:20PM

Three months ago I reported on the growing awareness that coin collectors were buying fake rare or high dollar gold coins. Many in the numismatic crowd feel secure with the coins in their possession and many felt that way because “professionals” gave them assurances that the coins were genuine. Even after a serious collector purposely purchased a fake coin in China, got it certified by an expert and told his story, collectors did not wish to believe the evidence.

Beth Deisher, editor of Coin World in the 12/15/08 edition, writes, “It’s up to collectors, dealers and grading services to fight the scourge of counterfeit coins from China, not the federal government with its limited resources.” I agree.

When I decided to seek out and add gold to my assets (1974), I studied all the ways to accomplish that desire. Owning an interest in a producing gold mine rose to the top of the list.

Coins are worthy because you can hold them, look at them and know that no matter what they are yours (assuming you take possession). Paying a huge premium above spot goes with the trade. I don’t like that. Now with the full-blown awareness that counterfeit coins are in the market place, I wonder how the coin business will deal with this serious problem. As an aside, the gold mining industry was alerted that counterfeit Krugerrands were in the market place, bought, sold and stored by unsuspecting gold bugs thirty years ago. It hardly made a ripple in their interest. This coin issue may be different.
 By Michael Miller

01/26/2007  11:14PM

What a dunce I can be.

The following three people are public servants working in Sacramento as lawyers. Tom Green’s title is “Chief Assistant Attorney General”. Under his supervision is Mary E. Hackenbracht. Her title is Senior Assistant Attorney General. I have no idea if the adjective “Senior” implies she is at the top of the hierarchy, just below Tom Green. Are their “Junior Assistant Attorney Generals”? Finally William N. Brienger signs on as a “Deputy Attorney General”. Are all three participants involved in the decision to launch an Amicus Brief against the parties damaged by lawlessness. After all, the top name on the list is Bill Lockyer, who signs on as “Attorney General of the State of California”. Did William write it, investigate its merits or initiate the action? Did Tom and Bill read prove and sign off before submitting the document to the appeals court?

Here is why I raise the above questions. The document says its position supports the lawless defendants. It recognizes that a law was broken. Then quickly words jump into a general assertion that the reason for filing the brief is “to assist district attorneys”. The writers want “to underscore the importance of prosecutorial immunity in fostering unflinching and impartial law enforcement”. I have no problem nor does our case bump against those goals. Immunity, however, is qualified that it must be “unflinching and impartial law enforcement”. The brief does not say unflinching or impartial. It says unflinching and impartial. The actions of the defendants broke laws. The actions of Gale Filter, et al., proved not to be impartial upon reviewing the grand jury transcript. Also documents in the Superior Court filings in Sierra County provide evidence that their impartiality was more wide spread than merely withholding exculpatory evidence.

It is a big leap to believe that Tom and Bill failed to stop the misguided position of their co-signed brief. But, what about Mary? As Senior Assistant, does she report to Tom? Does her position require a review over a Deputy Attorney General? Can a Deputy Attorney General file a brief in the Appellate Court on his own without a final review?

If you want to read the full amicus of the attorney general, it follows below . If anyone out there can help with the answers to these questions about the chain of accountability and responsibility, please educate me.

Now to the question of money, which was asked in the entry before this. The amicus brief comments that a lot of money is at issue. In the Statement of the Case it tells the appellate court that our suit seeks over $51 million. Yes, a recovery of that or a lesser amount can fund the mine’s development. I cannot recall determining this amount but certainly support its legitimacy. What if the suit sought $200 million or $1.00? Does the amount affect “unflinching and impartial law enforcement”? With so much written about case before the appellate judges, why did William fill his limited space with $51 million in damages?

Okay, I admit that this is a hard entry to read; however, remember the above named people are your public servants, who earn their salary by working for your best interests. Remember also, its all for the right to mine, the mine and its shareholders. So, get informed. Cut down some ignorance and help me learn. If you do not want to respond on the FORUM, do it with a feedback click.
 By greenhorn

11/26/2006  12:24PM

Just curious if settlement offers seem like a possibility, for all the usual reasons (and to provide an influx of some cash soon).

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