November 21, 2017 
 Tuesday 
 
 

Forum
Topic:
How to Approach Thin Veins & Cost

       

Page 1 | Page 2 | Page 3 | Page 4 | Page 5 | Page 6 ]

 By fredmcain

07/11/2017  10:09AM

MOLLIE KATHLEEN MINE

Group,

Although I still haven't quite made it to California, we were in Colorado last week for a tour of the Mollie Kathleen Mine. It was beyond awesome. I had my first "cage ride". Over 1,000 feet down AND an underground train ride!

Our tour guide demonstrated a lot of mining techniques and how they work. In the beginning they mined with candles. Our guide turned out the lights and showed us how that worked. Pretty dim! It's a wonder that not more people got hurt than did.

He also showed us how they set charges and removed the muck. It was hard for me to believe that they could actually get a mucker in the cage so I asked him if there wasn't an adit portal somewhere. NOPE! Only one way outta there and everything we saw down there came down that way!

I saw a lot of abandoned rails lying in adjoining drifts. I wish I'd thought to ask if they might be for sale.

Another observation was that there was no water and no pumps even at that depth. Remember, the elevation here at the surface is nearly 9,000 feet. You have to watch not to move around too quickly at that altitude or you will get light-headed to say the least.

I recommend this tour. The Original 16 to One is still at the top of my list, though. Too bad it's so far from Indiana! :(

Regards,
Fred M. Cain
 By fredmcain

05/11/2017  12:17PM

Group,

I found an interesting article that fits in with my sub-subject on this thread "Mines With Tracks". It's a few years old now but worth reading. I have said it before and will say it again: I do NOT understand the supposed huge advantage of trackless mining.

Here it goes:


"Rail cars have long held a close association with mining. In fact, when looking back at movies or cartoons where mining is represented, there’s likely a bunch of open-top mine rail cars somewhere in the picture.

Rail-Make
With the development of trackless machinery, however, a decline in rail use for mining has created a small disconnect between the popular image of labyrinthine mines lined with rail cars and how mines are evolving in reality. Rail took a backseat as low, stubby, purpose-built mine utility vehicles became more commonplace.

According to some experts, however, that trend might soon be reversed. Talking to Mining Weekly, Attie Claassen, contract manager for the South African railway and civil engineering contractor Loning Hill Properites, expressed this opinion:

Underground rail networks used to transport mined materials may be poised for future growth, owing to the high cost of trackless machinery and other alternative transport methods.
This shift in perspective comes as a result of a better understanding of the expenses associated with using trackless machinery. While many mines in South Africa attempted to make a push to establish trackless mining in the resource-rich country, the issue of cost quickly became too much to overlook. This has led some mines to consider reverting to the proven technology of rail haulage.

According to Claassen, “a correctly installed rail system has been proven to far outweigh its initial capital investment, and is, therefore, ‘the way to go’”.

Added to the proven advantages of underground rail networks, advances to the design and manufacturing of different underground rail cars have made reverting back to rail even more desirable.

Despite a decline in popularity, manufacturers like Wabi Iron & Steel Corp. have kept up their rail haulage manufacturing and development processes. The improved rail car technology that has resulted competes favourably versus trackless machinery in terms of cost, reliability, productivity and durability.

As the advantages of rail haulage continue to make their way back into the spotlight, it’s likely that the prospect will keep looking golden for the tried and tested mine ore car."

Here is the URL but you will probably have to copy and paste it into your browser:

http://www.wabicorp.com/prospect-looks-golden-mine-rail-cars-due-rail-advantages/
 By fredmcain

02/13/2017  9:41AM

MINES WITH TRACKS

Group,

I thought I’d do a post on the sub-heading of this thread on mines with tracks since it's been a while since we talked about that. To be honest, I have been kinda M.I.A. for the last 20 months or so.

As many of you know, many if not most underground mines have abandoned the use of rail vehicles in underground mining in favor of underground, rubber-tired "trucks".

I am still not sure I understand why. I understand that the rubber-tired vehicles are much more flexible. That makes sense to me. I also understand that the maintenance departments no longer have to be constantly ripping up and relaying track as veins and deposites change. Sure.

But the rubber-tired machines also demand much larger drifts and passageways. That would seem to me to largely overwhelm any cost savings from using them.

Could it be that trackless mining has simply become "the thing to do" causing companies to shy away from mining with rail? In spite of it all, there are still a few mines (like the 16-to-one) that continue to rely on rail.

I hope that continues.

-Fred M. Cain
 By Michael Miller

12/23/2016  12:07AM

Americans are becoming aware of the extraordinary expenses placed on small businesses due to questionable regulations and their enforcement. California and federal governments are guilty of valueless yet punitive standards and the execution of regulations by feebly qualified governmental workers. These are true and factual realities capable of proof at the Sixteen to One mine. I meet those whose job it is to enforce regulations. Some are reasonable but claim that the higher ups are the ones dictating how to regulate. Too many seem to enjoy the powers to run over the small operators, like us. It is an epidemic.

You probably have read that there is no underground gold mining industry in California. You know that the Sixteen miners are the last full time mining crew still employed. Can you guess what rate our Company is charged for the required workers compensation insurance? Go ahead and write down a guess. The rate is calculated per $100 employee income.

Insurance is a statistical numbers game. I have battled the rate setters with no results. Since there are no operations in California like ours and the private insurance companies don’t touch California underground gold miners, we are forced to buy the requires insurance from California State Fund. Since July 23, 2013 to November 22, 2016, our company paid State Fund $170,972.91. For what? How was our rate established? Is ours high risk?

There were no claims during that time period. Historically, there were no claims in the 21st century for workers comp insurance (accident or injury). We have four classifications: Mining underground (1123-1 code number) base rate is $68.51 per hundred; Mining Surface of underground mining 1124-1 code) base rate is $23.90; Jewelry mfg. (3383-1 code) base rate is $9.01; Clerical office (8810-1 code) base rate is $0.99. All amounts are for each $100 of pay.

Many followers here are interested in real mining, not blue sky hype. Ponder what a gold miner in California must experience. Here is what will help. Find an insurance carrier to cover underground workers compensation now. As our special niche grows in the important global economy in the coming years, all of us will need a better way to provide the required employee insurance. Workers comp is in addition to all the state and federal payroll taxes. Gold mining is not for the meek!
 By bluejay

04/30/2015  10:46PM

Rob McEwen who originally built GoldCorp was a believer like Mike. Rob goes after gold where gold has been produced before. Consolidation is the formula that started Kirkland Gold. Years ago some past producers at Kirkland Lake were Wright Hargreaves and Lake Shore Mines, I know because I traded them. The two abandoned mines were consolidated with a few more and today, the company has respectable high grade production.

I predict the face of Alleghany will be greatly changed when the money bags journey up the mountain as gold makes new all-time highs following its final low sometime before the end of the year. The final shake is coming and it will be the last opportunity to pick up more shares at below bargain prices. Time is on the side of OSTO shareholders, finally. Just an opinion based on my increasing knowledge of markets based on my continuing education, mainly, from Martin Armstrong.
 By Michael Miller

04/25/2015  2:00PM

Consolidation is a big concept in mining districts. My early adviser, WP Fuller, Jr, said “keep this in mind. Original Sixteen to One Mine, Inc.’s management knew how and why to consolidate and was successful in keeping the Alleghany Mining District strong and vibrant.” I did keep it in mind. Prior to the dollar production listed below by Bluejay, our company owned the following mines: Eclipse, Ophir, Rainbow, Rainbow Extension, Sixteen to One South Fork, Tightner, Twenty One, Bald Mountain, Bald Mountain and Extension. The Gold Crown and Plumbago were acquired after 1990. It is important that each mine retains its own identity but together, economic factors of scale, supply/demand, give each mine the edge to prosper.

Those dollar figures represent ounces produced times spot per ounce price of $35. For the value today, multiple the dollar amounts by 34. Do this and you’ll realize why shareholders kept the Company alive for over 100 years during its lows. Educated geologists estimate that 70% of the vein system remains untapped.

True, gold mining carry risks. Its history in California resembles a boardwalk roller coaster: that big high ride to the top, the plunge down, jerky turns and curves. I had many such rides on the Santa Cruz Big Dipper in my youth. When the ride ended and I step out of the car, I usually wanted another ride.

Reflections are great! I remember when this topic first started. A better name would be How to Approach a High-Grade Gold Deposit. Maybe changing thin to small is enough. Better yet, if you forgot what was written in the beginning, give 01/28/2009a look.
 By bluejay

04/25/2015  11:03AM

Mines.Lode: Brush Creek $4 million+, Dreadnaught $50,000 to $100,000, Docile $100,000 to $200,000, Eclipse $20,000 to $50,000, El Dorado $325,000, German Bar $200,000, Gold Canyon $750,000 to $1 million, Gold Crown, Golden King $250,000, Irelan $350,000 to $500,000, Kate Hardy $700,000, Kenton $1 million to $1.25 million, Mariposa $50,000, Morning Glory $80,000 to $100,000, Mugwump (both lode and placer) $50,000, North Fork (both lode and placer) $125,000, Oriflamme, Ophir, Oriental $2.85 million, Osceola, Plumbago $3.5 million, Rainbow $2.5 million, Rainbow Extension, Red Ledge, Red StarOsceola- $200,000, Rising Sun $58,000, Shannon, Sixteen-to-One $25 million+, South Fork (both lode and placer), Spoohn, Tightner, Twenty One, Wyoming, Yellowjacket. Drift: Bald Mountain $3.1 million, Bald Mountain Extension $500,000 to $1 million, Gold Star $250,000+, Highland & Masonic $300,000+, Live Yankee $750,000 to $1 million, Ruby $1 million+.

Excerpt from: Gold Districts of California, by: W.B. Clark, California Department of Conservation, Division of Mines and Geology, Bulletin 193, 1970.
 By Michael Miller

04/17/2015  2:33PM

Our biggest customer of our jewelry quartz & gold bought the mine the touted detector made in Australia. It promises 40% greater depth. Our detector guru has been trudging the underground workings with this new invention in hand. Things change when electronics say, “Hello, hear and see me. I am affecting your tool.” A signal can be determined sometimes with a rock pick or finn hoe, two handy tools to carry when detecting underground. The detector loves blasting caps. It also likes iron and what we call, “hot Rocks”. Life gets more exciting when a signal becomes a target. The transition takes place with human judgment. It may be the geology, the noise the machine is transmitting, information from historic maps or even a hunch. No matter once a target is identified, mining gets more interesting.

Our last two targets were disappointing. The first was a broken drill bit that was concealed in the quartz. The second was gold. Okay but only about one quarter of an ounce. We are pleased that this new machine could detect something so small. To go beyond that rock hammer or finn hoe is a time consuming and costly adventure. All we learned from those two targets was knowledge about the machine. Both were a financial loss.
Last week the miner told me that he has a target. The machine gave him information and we did all the rest in judging the next step. The third mining adventure proved it was gold and enough to have economic value. No, it isn’t another whopper or a million dollar day or even what my directors agreed was news worthy. But for us, we are pleased and plan to explore this area in the coming days.
Our belief in gold detecting began in 1992.
Send the old Sixteen to One some positive wishes with this target.
 By fredmcain

02/02/2015  12:17PM

Group,

The is a post to my sub-theme in this category, "Mines With Tracks".

I just recently received the March issue of TRAINS Magazine that had an article on the so-called "Eastside Access" project in New York City. Billed as one of the hugest ongoing public works projects today, it is planned to come in at around 11 BILLION dollars.

For those of you unfamiliar with the project, it's too difficult for me to describe in a few sentences. Suffice it to say that it is a HUGE mining endeavor that will result in a new underground train station in the City with many new railway tunnels.

They had a number of pictures in there and I was pleased to see that there were several showing underground mining locomotives, tracks and trains. So. Mining with rail is not dead. It's alive and well in The Big Apple (and at the Original Sixteen to One gol mine.)

Regards,
Fred M. Cain
 By Hans Kummerow

01/09/2015  6:08PM

Mike,

would such exploration drilling inside the mine be feasible or would it create unacceptable safety hazards?

Hans Kummerow
 By Hans Kummerow

01/09/2015  2:03PM

Fred,

schön von Dir zu hören! Und schön auch zu hören, dass Du Dich in die Sixteen to One eingekauft hast! I have never seen a more interesting orebody than the hydrothermal quartz veins above the Melones fault.

The questions I have asked Mike are related to an exploration strategy that we have discussed in this forum several years ago. My suggestion was to use a horizontal drill to create bore holes that are wide enough to run metal detection antennas through them.

If this can be achieved in a technically feasible and cost effective manner we could explore a much wider radius around the existing workings than that accesible from the workings themselves. And we avoid all the "true falses" that are associated with ground radar detection and ranging.

If we are able to create a convincing plan on how to explore und verify the targets and then point the headings toward them in the shortest way possible, we might either find a large high grade pocket with our limited budget or be able to raise money for a challenging production plan in the financial markets.

And I fully subscribe to Mike's statement that he has never seen a better time to move ahead with a challenging development plan for the Sixteen to One.
 By fredmcain

01/09/2015  9:29AM

Hans,

Believe it or not, ich kann auch etwas Deutsch aber nicht sehr gut!

I, too have wondered about what you seem to be asking here.

During the last couple of years, I have bought shares in the Original Sixteen To One Mine but I have wondered if that was the best use of those funds. After all, Michael doesn't have the money I parted with - someone else has it who wanted to get out of the business completely or partially.

So, is there a better way to fund expansion? How? Any ideas anyone?

Regards,
Fred M. Cain
 By Hans Kummerow

01/09/2015  12:23AM

Mike,

does the Sixteen to One still have a longer range horizontal drilling rig of say - 100 feet horizontal drill range?

If you still have it, could that rig be operated 360 degrees within the regular working spaces inside the workings?

I have made some progress on metal detectors with very small antennas and I plan to go to Australia this year to test my equipment on alluvial sands in a known fossicking area. It is much easier to rule out a true-false signal in an alluvial Australian sand rather than in a hard rock mine like the Sixteen to One.

If you could share your current plans for the furure development of the mine with me I would be most interested. A lot of many inside Germany is currently invested into overpriced real-estate. Some of that money might also become available for undervalued mining operations in California.
 By Michael Miller

01/08/2015  1:31PM

Hans,
I will continue to search for a file prepared showing gold production for the mines in Alleghany. The Sixteen to One held the highest value. It was calculated in a manner that I consider today when evaluating a target for mining: ounces per foot of mining in dollars. Up to 1934 the price per ounce was $20.67. The Sixteen came to $208 per foot. This sounds like a wild number but it was prepared by USGS respectable geologists familiar with the Alleghany Mining District.

So today this would be about $12,000 per foot. I can live with that as an historical perspective on working this mine. Following in a report written almost thirty years ago by a leading edge geologist on the subject. He was hired by our lessee in 1983 to evaluate the Sixteen to One. I just finished reading it and thought you would enjoy another professional opinion.


Exploration Proposal for the Sixteen to One Mine
Objectives and Philosophy
The object of exploration at the Sixteen to One Mine is to determine the quantity and location of gold within the vein system. In order to successfully conduct exploration in the vein system it is necessary to understand the ore controls.
Ore controls within a vein are the physical-chemical geological processes by which the vein and its ore minerals were formed. . Vein minerals are deposited in faults or other open spaces in the host rock from hydrothermal solutions that circulate though the fault zone and cracks in the surrounding country rock. Local heat sources, such as a cooling body of molten intrusive rock, are responsible for the circulations of the hydrothermal solutions.
Faults are usually relatively planar features with some irregularities in shape due to variations in the tectonic forces which create the fault and the variations in the host rock cut by the faults. Therefore, movement on the faults results in the development of open spaces where vein materials are deposited. Each episode of fault movement, of which there are usually many, results in new areas of open space and a new phase of vein mineralization.
The chemical conditions for the deposition of a particular mineral depend upon temperature, pressure, and chemical species concentration in the hydrothermal solutions. Quarts and pyrite, for example, are deposited over a wide range of physical-chemical conditions. Gold, on the other hand, is deposited in a relatively restricted range of physical-chemical conditions.
Therefore, the locations and quantity of gold within a vein are the result of geological controls, in turn reflected in observable characteristics of the vein and its wall rock, which may be measured by mapping and sampling a vein. Vein characteristics may be classified as either structural or mineralogical. The structural characteristics include strike, dip, thickness, and slickenslide orientation, which can be readily mapped along with the visible mineralogy. In additions, the elemental abundances can be determined by atomic absorption analysis and the sequence of mineralization can be determined by the electron microscope.
Analysis and Interpretation – Optimization of Explorations and Exploitation of the Sixteen to One Vein
A computer-resident model of the geological features and mineralization of the Sixteen to One vein should be initiated and continually refined to assist in defining exploration and mining strategy. Initially large amounts of old and new explorations and past productions data should be placed into a computer for storage, analysis and display. These data will then be used to build a model of the vein which can qualitatively and quantitatively predict area most deserving of early exploration, pointed towards locations of minable reserves. Use the computer model will bring discipline and a partial optimization of these ends.
A basic underlying assumption is that the economic gold mineralization is not randomly located within the veins. As in any mineral deposit, physical-chemical geological controls will have operated to determine the gold distribution; our problem is to recognize and measure these controls, and to then use these measurements to make predictions of areas in the vein with the greatest probability of further gold occurrences.
Truly random gold occurrence would be remarkable – but there are clearly observable preliminary indications that we are not dealing with in such a case. Visually, a map of the known gold occurrences shows several strong trends. Further, from measurements of these occurrences, both as to their size and spatial locations, a well-formed geostatistical variogram can be obtains, with a range from 400 to 600 feet. If further confirmation of non-randomness is desired, a test for a 2-dimensional Poisson distribution can be applied.

Philosophy of Exploration for the Sixteen to One Mine
R.A. Bideaux
January, 1986
“The race may not always to be the swift, nor the battle to the strong; but that’s the way to bet.”
Damon Runyan, Guys and Dolls.
Historical exploration of the 16 to 1 mine quartz veins, searching for gold ore shoots, seemingly has been carried out largely on the assumption that gold occurrences are at random. Here the word random is used to mean “by chance” or “without method”. It represents one end of the spectrum, where the other end would be “systematic” or “entirely predictable”. All gradations might occur, so we could have statistical regularity or predictability of the gold occurrences only to some degree.
Obviously any degree of predictability should be considered helpful for exploitation of gold reserves, so as to keep exploration and mining costs relatively low compared to the value of gold recovered. This is true so long as the cost of obtaining the data on which such predictions are based is lower than the additional cost of simply going ahead and mining out the entire vein, which likely would not be economic.
Ferguson states that it is best if operations are confined to the profitable portions of the vein, a nice sentiment, but perhaps a bit difficult to do in practice. Cooke indicates that is possible to locate the gold ore shoots within the barren veins material, and offers as evidence that the miner has been operated profitably to that time. This of course has no bearing on whether the gold ore shoots have in facts been systematically located and mined out more efficiently than compared to random encounters.
Suppose that the gold ore shoots are in fact random in occurrences, both in size and locations. The best way in which to search for them would be by making a grid of workings, parallel to the strike and dip of the veins. The maximum spacing would be proportional to the maximum size of target expected to be found; then the grid squares would be filled in with more workings, finally spaces to a closeness control by economics, such that the value of the smallest target would exceed the cost of finding it, on average. The details of shape and construction of such an exploration grid of workings would be dependent also on whether the ore shoots, while random in size and locations, had any observable preferred orientation, as well as mining considerations, such as gravity flow or rock versus mucking.
For truly random occurrences, but with some parameters known, such exploration grids can be optimally constructed. Over the last 20 years, a considerable body of literature has been developed on this subject, mostly concerned with the finding of blind deposits. With all other considerations equal, every increment of vein should be explored or mined out to the same degree.
What objective evidence do we have that ore shoots at the 16 to 1 are perhaps no random in occurrence, and can in fact be found with a frequency greater than by chance encounter, or selectively mined? A subtle indication is that the ore grade after the Second World War is higher than before, while the tonnage is greater than before. This is the effect to be expected if selective mining is in fact taking place, lower tonnage but higher grade.
More exactly, shoots containing large amounts of gold tend to occur in the near vicinity of other pockets also containing large amounts of gold; and shoots with smaller amounts of gold tend to occur in the vicinity of shoots of likewise lesser amounts of gold, etc. From an ore reserve point of view, this variogram is taken to mean that reserves can be estimated to some degree of precision, with block of vein perhaps 100-200 feet on a side assigned estimates of number of ounces contained. These estimates may have a very large estimation variance, that is the estimate of ounces may have a very large uncertainty, but the existence of the variogram indicates that blocks with relatively larger amounts of gold so indicated should in fact have such larger amount, compared to blocks with estimated lesser amounts.
Note here that randomness is a function of scale, both the size of objects being observed, and the scale of observational resolution. The gold ore shoots can be thought of as being random in occurrence, if the observer is only aware of the scale of Cooke’s indicators, some tens of feet, but it seems that their occurrence is not entirely random when observed at a scale of around 500 feet.
It is likely that their occurrence is controlled by some geological process which has a scale of this same magnitude. Only structural features of the fault can be candidates, related to the amount and direction of displacement, and possibly the rock types which in turn partially controlled these. If a positive correlation can be established with the causes of gold occurrence shoots, and these causes can in turn be projected into unknown ground, or used to reassess areas already mined, it should be possible to bias mining operations to the most potentially profitable areas of the vein.


You have asked me to think of several things concerning exploration of the 16 to 1 mine: as, what I think of the current staff’s ideas on the subject, what I think should be done, and what I might do myself.
For the mine to someday go into full-scale production, to produce 20,000+ oz./year, there must be some large areas of the vein which have a good chance of producing substantial amounts of gold. Defining the probably existence of such areas is a principle objective of the first two phases. My assumption here is that the occurrence of gold in the veins in not a random phenomenon, but has been controlled by observable maple variable which can be used to project favorable (and unfavorable) areas of the veins.
Current thinking of all the mine staff seems to tend toward the random occurrence theory: that ore controls are local at best, and that the amount of gold to be found will be a function of the amount of quartz broken in search of it, almost regardless of where the quartz is mined. It would seem that the mine has been operating in largely on this philosophy, pretty much successfully, too, but I would hope we could improve even on these results.
I have looked through the notes I made from the literature, almost a year ago now; revised copies of these are attached, better printed. They should replace the copies I formerly distributed, and are well worth reading at this time.
Every study on the 16 to 1 and related deposits indicates that the occurrence of gold is almost entirely controlled by mechanical and structural features, as distinct from chemical controls. Here we are talking of features to be observed at a fairly large scale, on the order of some hundreds of feet. As of this time such data simply has not been gathered nor adequately displayed for us to collectively judge to what degree such ore controls will be in fact useful.
I cannot predict what may come out of such displays. Usually I can make a formal proposal for data processing, since the techniques to be applied are well-known. In this case, I do not know of any really similar computer system, to assist underground exploration, so it is necessary (and I think desirable) to experiment a bit in building such a device.
The hardware is largely available to me right now, and most of the computer programs. Any additional programs will purposefully be kept quiet simple, to keep the overall cost low while allow enough experimentation with the 16 to 1 data to let us know is this approach will be useful.
 By Hans Kummerow

01/08/2015  8:50AM

Thank you Mike for your comments.

I remember a statement from a very old geologist on the vein systems above the Malone fault. He once wrote to me:

Historically, production numbers have always corresponded to the footage of new workings that have been cleared.

So I wonder, Mike, whether you could dive into your archives and sort out the numbers of onces produced as a function of the footage of new workings that have been added in that year.

And in a second step, give me a number for the 2015 cost of adding 1000 feet of workings in the good old drill-blast-muck sequence and hauling the ores on the existing rail-system to the most convenient ore-mill.

Could you do that Mike?

To answer your question on the financial industry in Germany: Since we Germans had three major reorganisations of our national currency during the last three generations the public perception of fiat money is - coloured ink on small slips of paper. That attitude prevails throughout the German financial industry and explains our focus on hard assets, like production plants rather the financial services.
 By Michael Miller

01/07/2015  3:46PM

No worry about the Sixteen to One workings remaining as a rail driven haulage system. Diesel doesn't work efficiently in our deposit.

I have developed a mine plan that will require much luck (uncovering another 10,000 ounce pocket) or the financial participation of a grand person or group. There is no doubt among the informed that this 100 year old operating gold mining company owns one special gold deposit. Management is uncomfortable risking time for production on luck alone. Sure, we will take it but those green old paper dollars will increase our odds of success and greatly reduce the time it takes for the eventuality to happen.

Those with an interest in hard assets will reach a conclusion that I reached forty years ago: California holds much gold in its Sierra Nevada Mountain deposit, and the Northern Mines of Alleghany top the most favorable location to extract it.

How all parties meet and unite is the mystery or unknown. My point is that the most favorable time I have seen in four decades since gold price shackles put on the industry in 1934 were lifted has begun.
 By fredmcain

01/07/2015  5:33AM

Michael wrote that "We will have a different look but what look remains unknown by 2016."

Uh-oh. Whatever you do, I sure hope you decide to keep the rail system!

Regards,
Fred M. Cain
 By Michael Miller

01/05/2015  3:11PM

Yes, Hans, much has happened the last year and the last five years as well. This 2015 year has the likelihood of historical importance for our 103 year old company. We will have a different look but what look remains unknown by 2016. The international gold market is of no concern to me. How is the money industry holding out in Germany? I laugh no snarl when I read about the depressed price of gold and how it is predicted to change. Who are these writers and what id their background? I doubt many are gold mining producers. A twelve hundred dollar exchange for one ounce of gold makes me wonder. The wonderment is not that it isn’t higher or lower. My wonderment is why does California have only one commercially operating gold mine in one of the world’s most spectacular and proven gold deposit?

We all know that the international banker’s crash in 2008 set the character for the following years. Does anyone recognize the start of basic economic activities that will end this speculative boom and bust? I have some ideas and it isn’t the record number of the DOW.

One of my good friends and mutual shareholder of this great little undervalued company figured a process to mathematically find “key neutral” positions. Bets can be placed (either up or down, for or against or other quirky opposites) minimizing risk once the key neutral point is reckoned. I remember our discussions that took place many years ago on this process of contemplating a risk/reward endeavor. We may come to the same conclusions but the factors used to reach those conclusions can differ greatly. This becomes somewhat personal. This is a good thing for many. Finding your key neutral position is a start.

Well, Hans, I am so pleased to see your input back on our FORUM. I also cut back my participation last year but continue to check it daily. You will see more from me in 2015 than last year.
 By Hans Kummerow

01/04/2015  12:05PM

Happy New Year from Germany to you all, dear California gold-seekers. Has anything of importance happened at good old Origsix during the last five years?
 By fredmcain

05/30/2014  9:26AM

Michael,

A most interesting post from you as usual. I have a couple of thoughts on this. The first one is that I think I can see somewhat of an analogy here between mining and agriculture. There are many “BIG” farmers today who are using these absolutely humongous machines, many of which sell for a hundred or even TWO hundred THOUSAND dollars (or more) a copy. Needless to say, these guys end up taking on a lot of debt.

Many of the smaller farmers who are STILL farming with 1950’s era tractors (or at least 1950’s sizes of tractors) are doing every bit as well as the big guys, never mind some of the Old Order Amish who are still farming with horses!

The second thought is that I am still puzzled and bothered by the difference between so-called “trackless mining” and more traditional, rail-based mining. As you know, most if not all of the “Big Guys” have gone completely trackless. And, as you know, trackless mining demands absolutely HUGE adits and drifts to allow the trackless machines room to maneuver and pass each other. And the trackless machines themselves are not exactly small ticket items. How can this be more profitable than using rail haulage? My suspicion is that it might not be. So, why are they doing this?

To return to the agriculture analogy, why are big farms using quarter million dollar farm machines bought on credit? Does “herd mentality” play a role here? Or, is there an element of pride of farmers (and mining companies) all wanting to be the best at doing the “LATEST thing”?

One thing that would seem obvious to me is they go for this stuff in order to increase their volume. The big machines do indeed succeed at that. But if those huge machines increase your volume by a factor of ten and also increase your costs by a factor of ten, how much further ahead are you?

I am reminded of the old joke about the farmer who was driving watermelons to the market in his old, beat-up Ford pick-up truck. He found that he was losing about 10 cents per melon. Then he found what he thought was an obvious solution. He went and bought a much larger truck so he could haul more melons!

Is this what might be taking place with trackless mining? I also belong to a couple of other mining forums. One small coal miner from Pennsylvania told me that he likes the quaintness and the history of rail haulage but as a miner he’d rather work with trackless equipment (possibly in an air conditioned cab, eh?) because it’s more “flexible”. There’s nothing that’s worse, he told me, than dealing with a strategically placed derailment in a rail mine.

Another hard rock miner from Arizona told me there’s no way he’d even consider going trackless if for no other reason than he didn’t know how he’d deal with the fumes. He’d have to put in a much larger and more expensive ventilation system. So, right there you have two conflicting viewpoints from miners.

I still haven’t found what I feel are satisfactory answers to my trackless vs. rail questions but there is one thing I am sure of. The Original Sixteen To One mine is doing just fine using the methods that you’re using. Good for you! “If it ain’t broke don’t fix it”.


Regards,
FMC

Page 1 | Page 2 | Page 3 | Page 4 | Page 5 | Page 6 ]

 

  
 
© 2017 Original Sixteen to One Mine, Inc.
PO Box 909
Alleghany, California 95910
 

Phone:   
Fax:
E-mail:
 
(530) 287-3223      
(530) 287-3455
corp@origsix.com
 

      Gold Sales:  


(530) 287-3540

goldsales@origsix.com
 



Design & development by
L. Kenez