November 22, 2017 
 Wednesday 
 
 

Forum
Topic:
Correspondence from the President of OAU

       

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 By Michael Miller

04/11/2003  12:36PM

There is one sizable difference between all puny gold mining companies like ours and the puny ones who are not. Distinctions between an exploration operating company and a development operating company resemble the distinctions between night and day. Mining encompasses a variety of words created to distinguish or classify. There are operating and dormant exploration companies. The same is true for companies engaged in the next step before production, the development companies.
.
“The opinions create the arena for dispute, as to which heading to drift upon.”
Anonymous hard rock gold miner.



An exploration operation will not be expected to find commercial gold. A development operation may, under scientific analysis, mine commercial gold. ORIGSIX conducts an exploration and development operation while also producing gold. These are major distinctions to consider. As an investor in gold, one's timing combines both the fundamental and technical disciplines of the market place. . If you want to know about the Sixteen to One, do not expect a simple math equation like proven gold in the ground equals so much an ounce. That was the twentieth century thinking. In this next bull market of gold, an investment should answer these questions: what does this ownership give me now and what is a reasonable expectation and what does my certificate of ownership represent or give me if that expectation is reached.

The differences in the puny companies were cleanly expressed by past director Charles I Brown, when he said, “I would rather be involved with a gold mining company than a company that mines for gold. There are many of the latter but very few corporations are actually gold producers.” There is no company like ORIGSIX or mine like the Sixteen to One left operating in the world today. Is that reassuring or alarming?
 By Michael Miller

03/30/2003  8:56AM

Response to Foolsgold

You raise good points. I completely understand why skeptics ask questions. There would be less failure haunting the junior gold mining industry if investors knew the questions to ask or better yet took it onto themselves to do the research that can be found on the corporation the wish to own. I entered the world of gold mining in 1974, before the US government unleashed the shackles it placed on the gold miners in 1934. I found it amazing that Original Sixteen to One Mine, Inc. was still in existence. Furthermore, it was the longest sustained gold producer west of Homestake in South Dakota. Its mineral deposit is a proven one. Its financial success was first rate. Could the corporation and its operation be revived was the questions facing me in 1975.

My “due diligence” began in 1974 and continues today. So this response does not become a book, I will focus on your concerns….management, substantial owners and directors. In 1974-75, the directors were also management. Little was going on with the mine, and I asked a lot of questions. They quickly grew to dislike me, so we entered into a proxy fight. I won in 1979 but was overthrown when one of my supporters joined the minority. He was elected president to replace me. Oh, well. I regained absolute control in April, 1983. I actually respected the rich old directors. They held the company assets together in the most difficult time the US gold mining industry ever experienced. They resented me because I wanted to move the company forward while they were grateful that it still existed. They were about to lose the company by transferring its assets to another company. I was offered to join by members of the Take-over Company but refused. That is why we fought so long and hard.

The Sixteen to One shareholders large or small have been led well. What impressed me was the attitude of paying dividends. I talked with many shareholders as I campaigned for their votes. Everyone said how much their families relied on the dividends from the mine. In 1995, the company paid its first dividend since WWII. I pushed the other directors to declare a dividend. They argued that prudence and good economic sense regarding taxes supported investing the money in the mine or in reserves. I also agreed with those reasons. It was important for the company to send a message to its owners: DIVIDENDS FIT OUR PHILOSOPHY. It remains today as a primary goal. The next dividend, however, will be in the form of gold not paper.

Something else I learned from our past leaders was the wisdom of acquiring solid gold mining property. The company grew from one mine in 1896 to at least seven mines by the 1950’s. Since 1983, we have added the Brown Bear mine in Trinity County and the Plumbago mine near Alleghany. We also invested one million dollars in developing our southern claims and sinking a winze into a block of virgin ground. You will not find those assets or value on our balance sheet. The workings remain accessible and add substantial value to our future. An aside: Past management did not anticipate the impact of WWII. In 1941, they acquired the Bald Mountain properties north of Alleghany. It was a great buy; however, none of us either past or present could mount a mining campaign to test its potential. I did not foresee the wicked forces unleashed against us over the past seven years. The brief mining plans I outlined in the last shareholder letter will open our diverse yet proven gold deposits, if not for me, for those who follow and lead the company through the 21st century

Do management and the directors want success? Is this just a toy? Read the past financials and you will find how little compensation has been paid and how much has been given to the company. If I sometimes refer to underground high-grade traditional gold mining as a “game”, it is with the greatest respect and admiration for the game of life.

Now about the downward trend you mention. That is true. It began in 1997, but was interrupted in 2000, because the company recorded a profit. Revenues declined. Expenses were systematically reduced. Production declined. The gold industry was wallowing in a severe bear market. But just like the period after WWII, the company survived with its assets intact and actually much stronger. People more knowledgeable than I have initiated lawsuits against financial institutions and gold mining companies alleging price fixing. Time will tell if those claims can be proven. An aside: certain expenses increased dramatically, such as insurance and electricity. Beginning in 1998, federal agents began an unwarranted assault on our miners and management. Their tactics cut the actual time the guys were able to break rock, which resulted in less gold production. While our recent news or forum entries are loaded with MSHA, CDAA, CVRWQCB stories, it has not always been this way. This is a fact. Time will tell if our claims for damages can be proven. Management felt it had no other course of action than to stand up to the questionable interference it was experiencing if the company were to once again prosper.

Each person must decide his or her concept of time and its relationship to an investment. Management develops the company as a long-term investment. By no means does that imply that we do not want quick or near term profit. We do, but not at the expense of our future. We follow the dictates of “patient capital”, something that was lost during the recent dot.com gold rush. At one point the market cap of individual corporations in that industry exceeded the market cap of the entire SEC reporting gold companies. Wow! We have groomed out timber holdings so the company can reap a sustained income forever, developed our gold markets to prosper regardless of the price of gold, and place our gold detection capabilities as a vital component for success. What I cannot groom is the investing public’s attitude towards gold. I believe the direction has changed from past years of scorn and inattention. If the company looks inviting to some, we will receive the funds needed to produce gold at a profit. That is all that is currently missing in the formula for success.

The word insolvent, which you mention, came from a Certified Public Accountant as an appropriate word to describe our finances. When ones current assets are less than ones current liabilities one is insolvent. It does not mean we are bankrupt or necessarily broke. I felt it was important to speak truthfully in terms used today. I have many issues about the accuracy of our financial statements and have argued with accountants and auditors for years. For example, our inventory of gold is reported at crush spot price. We have a proven record supporting that the value of our gold in the jewelry market significantly exceeds the bullion price. Our real estate is reported at depreciated values. This is truly a distortion that I have argued with lawyers working for the SEC as well. Our timber resource is not reported at all. None of this can I change due to general accounting principles enforced by the government. Yes, the company is insolvent. Management has chosen to work itself out of the cash flow problem and hold onto its assets. The only one currently for sale is the 116 items in our gold collection.

The overall plan for investment [ownership] appreciation has not wavered over the years. I suggest all interested to read the newsletters. If possible, we will add the earlier ones to the web site. Years ago I attended a special gold presentation in New York. One old geezer told me something I will pass on to you. "Read the President’s annual message going back at least five years." We are operating under severe time constraints for help, but perhaps can add the annual president message to this web site as well. While our plan is focused it does adapt to present conditions. Much has been accomplished that has financially benefited the shareholders. Much remains which makes this an interesting investment.
 By MadMike

03/18/2003  3:37PM

Mike, Just received my Shareholder letter today and it sounds like very good news! It seems like there may have been malicious intent by CDAA, what is the likelyhood of civil litigation to recoup at least some monetary losses?

Thanks and keep up the good work,

Mike
 By Michael Miller

03/15/2003  3:17PM

Dear friends,

A shareholder letter was mailed yesterday. Included is a large page [both sides] of information on the NEWS section of this web site. Many of our shareholders do not use a computer. I can relate because I am a recent user. The meat of what I have to say is in the letter itself. We are going after Mister Pocket through the proposed Red Star shaft. The letter is posted under Newsletters. Thanks to those who added your comments and encouragement during our trials with unreasonable and/or illegal activities against the company and the solid crew of miners. We have turned a page with the CDAA. Issues remain with MSHA and the water extortioners. Well, that is what they are! Again, I truly appreciate keeping in touch with you using this medium.
 By Rick

02/27/2003  8:04PM

For those of you who haven't personally witnessed Mike Miller's conviction and passion in this matter of freedom, allow me to add my perspective: he's the real deal.

I often crossed my fingers watching Mike in court, knowing well what we are up against, and regret having missed the last hearing.

Let's all take a lesson in conviction, persist in whatever passions we feel so strongly about. This fight in particular defied odds, yet Mike didn't care....

Truth has a way of prevailing, no?
 By flakey

02/27/2003  5:51PM

Congratulations Mr. Mike! As a share holder,
I thank you for all of your hard work to keep
everything going. Some day I hope you are rewarded
for all of your dedication to the mine. Alot of us has believed
in the mine and in your operation of the mine.
Once again, thank you!!! Atta Boy!!!! Flakey
 By bluejay

02/22/2003  9:00PM

Congratulations Michael Miller for defeating the "mighty" CDAA.

You have taught them a good lesson. Maybe next time they'll evaluate things better before they enter into the "perceived bush" to find out too late that they have upset a hornet's nest of patriots.

Your endless hours of research and preparation has saved the day for the shareholders against this vicious attack.

Talk around is that you significantly held down the Company's legal expense during this barbaric assault. My hat is off to you. Thank you!
 By gfxgold

02/14/2003  4:41PM

You open up the paper and find a story like that... Now that's what I call a great Valentine card. Hey, Mike. Does that mean the gag order is off?
 By Michael Miller

02/13/2003  9:16PM

Today, February 13, 2003 in Superior Court of Sierra County the Court granted the Motion to Set Aside and dismissed the defendents from the criminal case No. S -0046-CR -0000000768. Sierra County Superior Court judge Stanley C Young certified the Minute Order.
 By Michael Miller

01/31/2003  10:35PM

Everyone in the courtroom on Thursday familiar with the history of the CDAA contract to prosecute the residents of rural California counties, left with no doubt. It was so remarkable when it truly hit everyone . Judge Young asked the court reporter to flag the record. Since I am not a member of the State Bar and have never presided over a judicial hearing, I cannot fully understand the degree of significance; however by the reaction of Thomas Crary, and George Gilmour,, it was not difficult to judge that a monster of an important legal, ethical and perhaps criminal light bulbs illuminated the courtroom. Later I learned that most everyone in the cheap seats also the violation i have felt for seven months.

Chins dropped. Beliefs became hard-rock solid. No one knows this till now but my chin probably dropped the most because of shock. Even though I am the one most familiar with Mark's accident and the subsequent action by state and federal agents.

I was dumbfounded upon realizing that beyond all of the questionable activities I saw with Kyle, Gale. Denise. Tony and Larry Brown, all CDAA employees, willful and knowing fraud was not one of them. The existence of malice leaves little doubt. Their first 105 pages of discovery specifically identified all mine chutes down the drift from the one Mark hit were in compliance with safety standards. When Vince, Mark’s mining partner at the 1700 foot level, was called by the prosecutors to testify before the Grand Jury, Gale Filter clearly limited his testimony to one chute, which was “all that he cared about.” The CDAA closer witness was Steve Cain, a federal MSHA agent. For those who thoroughly want to complete the puzzle, go to the news page and find the first or oldest entries. The two parts on the MSHA hearing contain significant facts in evidence and in yesterday’s record, and one can smell a rotten rat.

Neither the public defender for Jonathan, Jerry Cooper, who was participating by telephone because of an illness, Tom Crary, who spoke for the company, or I, still en proper, pushed the judge to rule on the motion, because the new district attorney requested a consideration for him to study the record deeper than he has. The next court date is February 13, in Downieville. The motion as orally strengthened may end this fiasco. If not I will ask for an immediaate trial by jury which will likely be dismissed by Larry Allen , the new DA because he knows that part of the CDAA prosecution strategy is to name employees as defendants in order to gain an advantage.
 By Michael Miller

12/28/2002  11:23AM

Second part of letter started below.

Is not this [government oppression of the people] what Americans fought and died for? How can anyone rationalize the loss of so many lives if those living today ignore the oppression displayed by water bureaucrats? In addition to their unfounded opinions masquerading as facts to levi oppressive monitoring of the rain and snow that falls on the mine site, the Attorney General and his client seized our bank accounts in December. This has paralized us. We face PGE shut offs and other ill consequences which endanger the lives of the men and women dependent upon the Sixteen to One.
A workshop to discuss the Sixteen to One is scheduled on January 7,2003 at 9am in Sacramento. The California State Water Board called the meeting in response to my petition for review of the Central water agencies unnecessary demand for monitoring etc. We have been granted ten minutes to present data. I received the State Board proposal on December 26,2002, which gives me one week to submit our case in writing [the last day the board will accept paper is January 2,2003.] Your participation is one weapon against oppression of honest hard-working Californians. Please help us.
 By Michael Miller

12/28/2002  10:46AM

Letter to Rico Oller, California state senator...

Thanks for the time Dan gave to the recent regulatory crisis thrust upon Original Sixteen to One Mine, Inc. Your help in modifying the behavior of the state water bureaucracy is appreciated; however your recommendation of exposing the unreasonable treatment to the general public is difficult to execute. What will it take? A lawsuit filed by the miners for the taking of their employment? A law suit filed by the shareholders for damages? A class action suit filed by Californians?
My question to you remains unanswered. Legislators passed a law, the Porter-Cologne Water Quality Control Act, which governs the central and state water agencies. This law has been broken and ignored by the executive agencies empowered to enforce it. Those people responsible have violated their fiduciary responsibilities to Senator Oller, the legislative bodies, and most significantly to the People of California whom they serve. The question again...where do we go or who do we turn to to stop and correct this lawlessness? The Attorney General is the most logical; however with water issues his clients are the very agencies currently violating the act. It is an interesting fact that the government employees press their behavior "on behalf of the People of California". The "People's" rights to sound or Best Management Practices", a concept embraced by all governments and non governments has been compromised by Gary Carlton and many of his staff.
This is a battle in a war that I am too underfinanced and do not want to participate in. This is war with certain people and practices of our own government. It's not the American people who will benefit from the current actions of various water employees in our district. Their highly questionable actions against this small old and very sensitive traditional gold mining company high up in the Sierra Nevada Mountains is a battle of attrition or of survival, just depends on how one views it.
 By Michael Miller

09/25/2002  11:03AM

Ryan, thanks for your remarks. An elected person may hold non governmental offices or positions outside his elected office. That goes for Gray Davis. It is a choice not a law .

If I were a political operative for Mr. Davis, I would suggest he take the seat on the board of OAU. Why? He has little non-government business experience, which is continually used against him. He could add to his populist image as well as being a tireless advocate of the little guy. He could become proactive in the controversial environmental war and his input could lead to positive solutions that please all Californians. OAU is a perfect company for his wisdom and leadership to shine.
Governor Davis has yet to respond to his election to our board. Do you think he would be a good director for OAU? How do we get him on board for our journey?
 By M.M.Miller

09/06/2002  10:03AM

A shareholder suggested that the election of directors was a publicity stunt. Not so. If someone else sends company publications to larger circulations, it could be an opportunity for all of us. I do not have the time to develop public relation stunts. Most of my time is absorbed in guiding OAU through its current field of obstacles…. and it is a crowded minefield.

Anyone wishing for specific information from me is encouraged to send me a letter in any form you choose.
 By RyanBaum

08/06/2002  9:07AM

I received in yesterday’s mail the update on the annual meeting and appointment of new directors. I wonder why we would offer our Governor a directorship position.

Regardless of his experience, our company should know that any elected official may not concurrently serve on the board of a for profit company. If OAU wants to be seen as a serious company trying to attract new investors, it shouldn’t try to pull such PR stunts because they only distract from the real issues.
 By Michael Miller

05/17/2002  2:41PM

It may surprise some how active I have been in defending and advocating OAU over the years. A new corporate correspondence section will become the permanent archive for these letters. Until then I will use the forum.

In January I reluctantly sent the staff of the PCX a position paper on OAU status on the exchange. Following is the letter.

January 16, 2002

Mr. Aaron L. Autajay
Listings Representative
PCX Equities
301 Pine Street
San Francisco, CA 94101


Dear Mr. Autajay:

Gold Mining Industry

The primary goal of the mineral companies is the long-run maximization of profit with a minimization of risks. More than for most corporations, the question of risk plays a key role in the mineral company strategies and tactics. Exploration is the most crucial and the riskiest activity. The major gold companies, who collectively have gold production to affect supply, have significantly reduced their exploration activities. Instead of searching for new ore bodies, the greater potential of securing an ongoing supply of gold has been achieved through mergers and acquisitions.

Weak gold prices have limited exploration and new mine development and supply cutbacks are being announced. With the U.S. dollar at 16 year highs, the probability of further strength (which correlates very well with gold price weakness) is low. As a result, the supply/demand position for gold has become a fertile area for price strength.

Lower gold prices have a yet-to-be determined explosive topic….reserves. While the major companies can expect auditors worldwide to take a critical look at reported reserves OAU financial statements will not be affected. Because of the investment communities reliance on reserves, risk/reward evaluations and supply/free cash flow projections should alter the heretofore prejudices towards investment capital placement in the major super gold companies. This in turn could have the effect of analysts and investors more closely examining the junior companies, something which I personally believe is long overdue. In fact major securities corporations have concluded that building a small insurance-type position in gold equities makes sense for investors with a medium to longer term investment horizon.

Other factors will contribute to the price of gold or the desirability of investors to acquire a gold position via equities such as: central bank liquidity, hedging close outs, continuing consolidation. Regardless of factors or conditions beyond the control of OAU, the company has moved to separate itself from the other junior gold companies. As of December 14, 2001, OAU became the oldest operating U.S. gold mining company and the only deep vein producer in the United States. A conclusion to be drawn from this is: when risk is an undeniable truism of gold mining, those companies with proven reserves and large size are usually predicted as safer long term investments. OAU celebrates its ninety third year in business and offers a unique investment opportunity because it defies conventional wisdom.

Business Plan

Continue the mine plan that has been in place for over a decade, which includes, renovation of flooded or inaccessible areas underground, pursue the advancement of gold detecting devices, and expand revenue through value added gold sales.

OAU has employed both horizontal and vertical methods to enlarge the scope of the company. Horizontal integration includes the acquisition of Kanaka Creek Joint Venture (1991), Brown Bear mine (1995) and the Plumbago Mine (1999). Vertical integration refers to our jewelry department and our interest in and exploration of relevant technology. The central aim of these integrations is to reduce risk and to stabilize and increase profits and reduce expenses.

The Sixteen to One mine is like no other mine in the world. Multi million dollar gold concentrations are scattered in small unpredictable areas of the deposit. The single greatest impediment to OAU market success has been the lack of gold production. The greatest negative impact to gold production has been restricted cash flow. The board of directors have approved management’s plan to generate cash in order to improve the results of its mine plan.



An investment group has expressed an interest in acquiring a twenty (20) percent equity ownership in OAU and provide the company with a six million dollar cash infusion. This amounts to a price per share of $2.00. The agreement combines free trading stock and treasury stock.

The investors are sophisticated and have business relationships with a Canadian brokerage house. No sooner than April 16, 2002 (six months after the x-date of share split.) a tender offer may be offered to all shareholders. As of today management will neither recommend nor object to the tender offer. Because certain members of management may join the investment group, it has been recommended that at least a 180 day lapse between the stock split and the tender offer.

The simplest most important factor for the outside investment is funding the construction and testing of a new gold detecting device designed specifically for the Sixteen to One Mine. Those who have investigated the Sixteen to One have realized that once the existing technology is refined, profitability should increase dramatically.
During the past three years, productivity diminished due to excessive harassment by governmental agents and agencies. The small staff was consumed defending the company. Management was forced into a defensive posture and suffered the consequences of such a position. The shareholders and public relations programs were halted. The company evaluated where it was and where it was going as a SEC reporting company. A decision was made to compete for investor attention as a gold mining company for the twenty first century.

Summary:
· Execute financial plan, technological plan and mining plan.
· Inform public about our activities.
· When the value of OAU shares mirror the value of OAU assets, continue the horizontal and vertical programs.

As president and CEO of California’s oldest mining corporation and the oldest operating U.S. gold mine, I am saddened at the thought that the west coast could lose the historic business relationship between the exchange and the Original Sixteen to One Mine, Inc. The Company is not in financial trouble, gold assets are greater than debt. The fair market value of other assets is greater than the market cap at one dollar per share.

I have experienced difficulties in writing this letter to you because of the sensitive nature of the disclosures I have made. Nothing included herein should be discussed or distributed to anyone outside of your organization.

Any way we can reverse the de-listing process would be greatly appreciated.


Sincerely yours,



Michael M. Miller
President/C.E.O.
 By Michael Miller

05/13/2002  11:55AM

The PCX suspended trading OAU on March 21,2002. On March 22,2002 PCX scuttled its last trading desk and closed its doors. The members just quit after a history going back to the San Francisco Mining Exchange. One of our shareholders who held a seat years ago on the old Pacific Stock Exchange investigated the circumstances of OAU suspension. He wrote me on April 27, 2002 with his concern: “The shareholders of Original Sixteen To One Mine, Incorporated representing nearly thirteen million shares, have been damaged by actions of the PSE in suspending their shares in an environment of rising gold prices.” The shareholder threatens to file a suit in federal court against the PCX and demanded a SEC investigation into the exchange.

OAU filed an appeal of the suspension and awaits the decision whether the PCX abides by its constitution and rules and schedules a hearing. I certainly feel justified in representing OAU position that the actions of the specialist contributed to the circumstances leading to a price below one dollar.

Several people suggested OAU apply for listing on the Toronto Exchange. Canada certainly has a more open attitude regarding gold and natural resource companies than US trading exchanges. Later this week I will submit a report here which goes into some history of the California market place and our recommendations for settling the issue OAU has with its suspension.

Thanks to all of you who are reading and/or writing on the FORUM. The PCX suspended trading OAU on March 21,2002. On March 22,2002 PCX scuttled its last trading desk and closed its doors. The members just quit after a history going back to the San Francisco Mining Exchange. One of our shareholders who held a seat years ago on the old Pacific Stock Exchange investigated the circumstances of OAU suspension. He wrote me on April 27, 2002 with his concern: “The shareholders of Original Sixteen To One Mine, Incorporated representing nearly thirteen million shares, have been damaged by actions of the PSE in delisting their shares in an environment of rising gold prices.” The shareholder threatens to file a suit in federal court against the PCX and demanded a SEC investigation into the exchange.

OAU filed an appeal of the suspension and awaits the decision whether the PCX abides by its constitution and rules and schedules a hearing. I certainly feel justified in representing OAU position that the actions of the specialist contributed to the circumstances leading to a price below one dollar.

Several people suggested OAU apply for listing on the Toronto Exchange. Canada certainly has a more open attitude regarding gold and natural resource companies than US trading exchanges. When the office crew returns Monday I will submit a report here which goes into some history of the California market place and our recommendations for settling the issue OAU has with its suspension.

Thanks to all of you who are reading and/or writing on the FORUM.
 By RyanBaum

05/10/2002  2:21PM

What was the trading requirement that OAU didn't meet when it was delisted from the PSE? Was it price per share or net worth?

Are there any intentions to try to get OAU listed on the NASDAQ bulletin boards so that it would still be somewhat liquid and could be left in a brokerage account?
 By Michael Miller

02/01/2002  4:33PM

The loss of an American icon Homestake Mining troubles me deeply. It was worth the effort to preserve America's greatest gold mining company from extinction. My attempts failed. Perhaps there still is something that can be done. I wrote the largest shareholder for support and he never replied back. It was frustrating because my concept was a winner for everyone involved, and Homestake Mine in Lead South Dakota would remain under American ownership.

November 21, 2001

Dear Mr. August Von Finck

I was told by a man who owns OAU and HM stock that you and your family realize that the Homestake corporate personnel may have failed to obtain fair value for its shareholders in the pending merge.
I have intentions of acquiring the Homestake corporation and its assets in Lead, S. Dakota but not upset the merge. Both the corporation and the companies’ assets in Lead have value in excess of the value offered to shareholders in the Barrack acquisition. Barrack may perceive Lead as a liability because of potential environmental concerns. While it can be called a “Pooling,” and in fact it may truly be a puddling of two distinct entities into a surviving mixture, shareholders, represented by 263,380,225 shares are entitled to fairness. Only by increasing the current prescribed exchange of shares of Homestake and Barrack, by an additional offer will the shareholders reap that value. The accountants and management have failed in their fiduciary responsibilities to the owners in evaluating this liquidation via a merger called pooling or any other name. My proposal to increase the offer compliments the current agreement. It is not a replacement of it. It gives additional value to HM shareholders.
I am President, and a major shareholder of the Original Sixteen to One Mine, (OAU). We are second to Homestake Mining as the oldest American gold mining company. I recently returned from a five-day visit to Lead. I inspected the active headings on the 7600 level, examined the upper workings on the 800 and 700 level, toured the surface facilities and spoke with many of the miners and community members. I also attended the Saturday meeting with Senator Tom Daschel and participated in a lively conversation with him and other panel members before 200 people. I have been in the gold mining business since 1974 and feel competent and qualified to tell you the following.
“I have evidence that the Homestake Mine has values that you and other shareholders may not be aware of including gold. I will confide in you because I believe there is much to gain and for other collateral reasons. I am contacting you before I notify Homestake management of my intentions. Jack Thompson and Walter have been underground with me at the Sixteen to One Mine, but I cannot say that I know them well. If your concerns are true, I agree with you. I believe Homestake shareholders have been sold out.”
My background and information about our company can be quickly found at www.origsix.com I am at your service if you so choose to investigate my proposal. Time is of the essence. I hope to hear from you or your confidants.


Sincerely,



Michael Meister Miller
President/CEO
 By Michael Miller

02/01/2002  4:17PM

The following is an overview of a letter to Original Sixteen to One Mine, Inc., sent on December 27, 2001, from the United States Securities and Exchange Commission after they reviewed the quarterly and annual filings with the commission.

The letter addresses Form 10-K for the year ended December 31, 2000, and Form 10-Q for the three quarters filed in 2001. The Commission reviewed these filings, made comments and also requested revision to the documents.

Some of the requests, in summary, are:

1. To discuss how often we make the mine available to third parties for research and development.
2. Provide further details on the advanced metal detection technology and who is developing it, expected timetable and how it will affect our operating results.
3. Directive to delete mitigating language from our risk factors. For example, delete the amount of gold that has been recovered since 1992 and the statement that management believes substantial gold still exists from “Lack of Proven Reserves”.
4. Disclosure as to whether any of the mine’s employees are covered by a collective bargaining agreement. And a statement as to whether we consider our relationship with our employees to be satisfactory.
5. To separately list the cost of vehicles purchased.

Specific “Engineering Comments” are detailed below:

“As you do not have a ‘reserve,’ you must be in the ‘exploration stage,’ as defined by Industry Guide 7(a)(1) and (a)(4)(I) respectively. Exploration stage companies are those issuers engaged in the search for mineral deposits. Remove all references in the document that use the terms ‘miners’, ‘mining’ or ‘mining operations,’ or any term that can imply mineral production, such as ‘operations.’ The term ‘mine’ should be replaced by ‘exploration property,’ and the term ‘mining’ replaced with ‘exploration.’”

“Under SEC Industry Guide 7, the term ‘ores’ or ‘orebody’ are treated the same as the term ‘reserve’. In that you have no ‘reserves’ you may not use the term ‘ore’ to describe the mineralized material you are testing. You may not use the term ‘ore’ in the financial statements, please revise the appropriate section.”

“Because you are in the exploration stage, you need a sub-section that describes the risks associated with the fact that you do not have an assured supply of gold, as you do not have a reserve. Disclose that although the company has found a significant number of pods or concentration of gold-bearing material, there is no assurance that a commercially viable ore body (a reserve) exists in your properties until further exploration work is done in the abandoned mine workings and other exploration areas. Disclose that because you do not have any reserves, you have no idea how long you will be able to produce any gold or provide gold specimens from your properties.”

“Expand upon your discussion of the change in administration at MSHA and how this has negatively impacted your operations. Also, discuss in detail what you mean when you state that you disagree with the agency’s position and how you have challenged that position.”

“Disclose the business conducted by Rocketdyne. Also, briefly explain that ‘pulsed Waterfront Sensor, interfermetric sensor systems development and multi-wavelength probe laser fabrication’ are (as stated in the biography of Sandor Holly).”

________________________

I read the letter several times and have deeply contemplated its origin. It seemed like a request… or, is it a demand that a long-standing use of words cease meaning what they mean because someone (the letter’s originator) ordered it so. My letter in response to the Securities Exchange Commission’s “requests” is as follows:


January 18, 2002

Securities Exchange Commission
Attn: H.Roger Schwall
Washington, D.C. 20549

RE: A thirty-eight point letter dated December 27, 2001

Dear Mr. Schwall:

We are completing year-end inventory and accounting activities to close out 2001 and prepare for our annual audit. We have a small staff so with regard to an answer for a time to respond in full, I estimate 45 to 60 days. However, some items can be addressed now and some depend on discussions with Roger Baer. I have placed two phone calls to Mr. Baer and anxiously await his response.

My overall analysis of the comments contained in the December 27, 2001, letter is that they will not achieve your desired results as stated in the second paragraph. Our company is the oldest US gold mining operator; however the mineral deposit is unlike most that are mined today. One must step outside the comfortable box of “industry guides” to get a sense or understanding of OAU. I have tried to relate this to shareholders or others over the past eighteen years. (For example, I am unable to respond to #7 without speculation beyond what I consider reasonable. How does a so-called penny stock stay in business for 100 years?) What is the rationale that OAU has a risk worth explaining because it is a “penny stock”? What actually is a penny stock?

For #6: It is important for a reader to know past production both since 1992 and longer. Historical data is a vital part of understanding our company. I cannot delete that management believes substantial gold still exists because it is a valid and correct statement. It is documented with over 100 years of publication.

#5: Collective bargaining is not a practice of OAU or our industry. There are many examples of things, practices or events that do not occur with this company. It seems non-productive and rather silly to list things that do not apply. If collective bargaining were a practice, I would comment about it.

#4 & 3: Over the years I have mentioned research and technology as an activity of ours. I have also referenced specific programs as they occurred. As stated, “the company makes its mine available to third parties for the purposes of researching and developing new detection technology". To realize any participation from scientists or technological companies will come from them. OAU is not actively driving this subject.

#8: We will eliminate the risk in future filings; however does this insignificant change warrant an amendment?

#9: This disclosure has been pretty clear to regulations and readers for years. I can think of possibly including a conclusion in future filings: “Therefore, while the company believes its inventory is understated, it conforms to accounting standards.”

#12: The reprehensible behavior of MSHA created irreparable damage. When the miners fail to advance their headings because of regulatory interference, especially when the behavior is outside of the law, that work will never be regained. Are you sure that the issues you raise in this number belong in a 10-K? The potential of OAU seeking damages is real but as of today is not solid enough to report.

#38: We do not capitalize mining related costs. They are expensed.

#20: Do you truly believe that our company needs to further identify Rocketdyne? Also it is wavefront sensor not waterfront. Compared to most company filings, OAU has greater details about its directors than do the majority I have read.

In general housekeeping your letter is addressed to Mr. Cosgrove. I do not know anyone by that name. I appreciate the assistance to improve our filings and will look into the other issues with our auditors. Again your proposal to eliminate the use of “mine” or “miner” remains to be further explained by Roger Baer.


Sincerely yours,

Michael M. Miller
President/C.E.O.

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