February 16, 2020 

Correspondence from the President of OAU


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 By John Yuma

12/01/2006  8:39AM

Dear GFX, I take exception to your 2nd paragraph. If all you do is drill it, average it out and mine it, why have mining companies paid me well for almost 40 years to sit drill rigs for up to 12 hrs a day and prepare detailed drill logs and x sections after a good geologic map was prepared? Why are approx. 2,500 geologists working in Nevada? Game, speculation and guess are not geologic terms and should not be used to describe any mining situation.
 By gfxgold

11/30/2006  11:45PM

I did not see anything that would suggest that Mike does not have any regard for geologists or the science of geology. He may or may not but, I did not see that in his writings. I feel that whoever is promoting an ore deposit, may at times, inflate or wrongly conclude the results that a geologist or drilling team supplies. As for the nugget effect, The 16 to 1 is the mother of all nugget effects.
Mike has to be more a "Man of the Cloth" than a promoter. After all, what do you call someone who tries to convince you that there is a great reward waiting for you... You can't see it. You can do scientific tests for it but, they may not tell you anything. We can show you the paths of those who went before us and they got their reward. "Hallelujah Brother!"
So, if you have an ore body that has been core drilled. The cores are assayed. The results are averaged out. You mine the ore and come up with the final product, gold. How many ounces? Did the math prove to be right or wrong? To be right, it would have to be the exact number of ounces. If it's wrong well, isn't that a calculated or "Best Guess?" Some are just "Calculated" better than others (I guess).
 By John Yuma

11/30/2006  3:08PM

It is obivious from your comment concerning "the reserve game" "raw speculation or calculated guess", you have no regard for geologists or the science of geology. For my part, all my reserve calculations have been right on the money when mined out. Why is it deception to place a value on a deep drill hole if the intercept can be mined at a profit? Also, any good geologist knows to check for the nugget effect and if present how to compensate for it.
 By Michael Miller

11/28/2006  12:19PM

To those who take the time to understand our gold deposit;
To those of you who want to own a gold position;
To those who admire history and learn from its study;
To those who believe that riches await our miners’ discovery:


Deciding where to send our crew is always a challenge at the Sixteen to One Mine. Unlike most of the gold producing companies in the world that bet on drill results (reserves) and gold prices, we do not follow this practice. It does not always work for others and certainly will not work for us. Reserve calculations fail and companies are forced to modify their mining plan or hope for increasing gold prices. Another flaw in the “reserve game” took place in a California gold mine owned and operated by Homestake. (I call the reserve analysis a game for several reasons: years ago reserves were defined as proven or probable; later inferred became a modifier for defining; now the term “resource” is used by mining companies to quantify assets and qualify dollar values.)

The reserve game requires either raw speculation or a calculated guess to determine the ore’s sphere of influence for each drill hole. Some are cautious and others are wildly aggressive in assigning a large sphere at the highest value. Another trick of deception is placing values on really deep drill holes. The ones to deceive are the stock promoter/analysts who then extrapolate a company's reserve reports into ounces of gold. Most stop there because history has proven that the investor or speculator will do the math of turning ounces into dollars via the spot price at the moment. Homestake had a different problem at its McLaughlan mine in northern California. It became known as “the nugget effect”. Every placer gold miner is aware of the nugget effect of a deposit. Gold will just appear and disappear. The original low grade, “no-see-um” gold miners were not significantly hampered by this mining truism. The nugget effect has an academic definition as well: anomalously high precious metal assays resulting from the analysis of samples that may not adequately represent the composition of the bulk material tested due to nonuniform distribution of high-grade nuggets in the material to be sampled. Homestake failed to meet its estimated gold ounces, so costs per ounce produced were higher than expected. The mine eventually closed and Homestake sold out and merged into a larger existing company. The nugget effect got them.

We have problems in Alleghany, although drilling for gold and reserves is not one of them. In our mining district’s history miners do use a drill for knowledge. Searching for hidden quartz is one reason to drill. Others are the creation of map projections and geology. In our historic files we have highly credible reports from noted geologists and use them today as if the reports were written yesterday. I admire God’s hand in Alleghany and fully embrace the evidence that what was laid down in nature some 150,000,000 years ago is still true. Gold mining is a competition with nature. As a miner becomes more comfortable with this, his chances of success should improve.

So, in selecting the 1000-foot level, we have relied on history and the nature of the area between the Tightner Shaft and the 1064 winze farther north and the ground between the 1500-foot level and the 600-foot level. We also took into consideration the condition of the 1000-foot level and our current mine plan of operation. (A winze is a vertical opening driven downward connecting two levels in a mine.) Technically, when one is standing at the top of the 1064, the opening is called a winze. When one is standing at the bottom, the opening is a raise or rise. The 1064 winze connects the 1000-foot level with the 1500-foot level. It is one heck of a good ore pass and manway. It hasn’t been used since 1965 and will require some “dead work” in the future. As an aside, in 1995-96 we rehabilitated the 1500 foot-level. Just north of the 1064 raise we found gold in the down-dip footwall/vein contact. We ran a decline along the strike of the vein about fifty feet and recovered over $120,000. The gold continued but we chose to mine somewhere else, leaving this target for another day. One reason was the distance to the active 49 winze delayed productivity. This long abandoned but not forgotten target becomes interesting once the 1000-foot level is open.

The Company has good gold showing in more than a dozen locations underground…known or proven gold “reserves” of unknown quantity. These targets also have strong “backs”. Backs mean the height of ore available above a given working level. Available backs are another factor in selecting a new target for mining. We do not choose targets that require months of preparation that do not have big upside gold potential. Our mine has yielded many 5,000 and 10,000-ounce pockets in a short span of mining. It also has the largest single pocket reported in California, which is one of our stated goals to beat. The area we chose should give up several 5,000 to 10,000-ounce pockets and has the potential to beat the record. It must be remembered that there are over a dozen places with great reasons to mine; working capital is the single factor that will override the likelihood of gold production.

Original Sixteen to One Mine, Inc announced its plan to sink a new shaft called “Red Star”. It is north of the 1064 winze. The work we do from this moment on compliments our plan in many ways. If our expectations fall short, the infrastructure of the mine will be greatly improved. This and more revelations must wait for another day to explain.
 By Michael Miller

10/28/2006  10:29AM

Today, tomorrow and in mid November I will be presenting the Company to individuals that have expressed an interest in our operation. We will examine the gold and the variety of specimens on hand. We will discuss the marketing program with facts and specifics based on twenty years of actual results. I will show each one the scope of our real estate holdings and explain how the vein cuts through the property (owned outright). Then we will go into the mine. At this point the discussion becomes intimate. Once a person experiences the Sixteen to One vein and the scope of past production only one question should remain, that is, if the person actually has the money to invest and the mentality to evaluate risk/reward.

That question is can we find gold? Can we profitably mine the gold? Do the workforce and I possess the wherewithal to make it happen. I realize that these are three questions; however, they all revolve around the same theme. What will the future bring to the Sixteen to One?

I know the answers to all four questions. That is why I’m still here.

Today’s guests are scheduled to arrive at 10:30am. Gotta go.
 By bluejay

10/26/2006  11:39AM


Thank you for detailing this great news. The excitement of increased gold production and the excellent probability of more gold being mined is great news for everyone.

You, Ian and the crew deserve our thanks for your skill in locating the gold and for all of your persistent hard work in extracting it.
 By smithsgold

10/26/2006  12:11AM

Thanks for the update!!!!
 By Michael Miller

10/25/2006  2:45PM

The bulk of our underground work is in the same block of ground below the 800 foot level just south of the Tightner Shaft. A small area remains to be mined above the last pocket (about $250,000). We will take it out when we abandon the stope for safety reasons. The other active heading in the same area shows gold in six places along the strike of the quartz. Total length of showing is eight feet (we like this). There is sixty feet of vein above the gold showings. If the gold wires up, we may have another $250,000 or more. If not, we may waste four to six weeks of our payroll.

As specimen quality gold, this yet-to-be mined block of ground is unique and quite beautiful. The gold found and sacked so far has a crystalline sheen but has not developed as crystalline. The quartz is brilliantly white, but the special uniqueness is the appearance of bright green mariposite.

A third heading is ready to go: air and water lines installed, ground supported and equipment in place. Ian and I selected a new target north of the Tightner Shaft. It looks like a six to eight weeks with one crew to get it ready. To make it an efficient operation, we must upgrade transportation equipment for ore and waste rock. Once access and haulage is in place, the newly opened area will support at least three headings with a life expectancy of one year. We like this area and are pleased that our resources will allow us to develop it.
 By bluejay

10/23/2006  8:55PM

Any updates on the recent discovery?
 By Phil

10/09/2006  2:07PM

Way to go Guys!!
 By Michael Miller

10/08/2006  10:19AM

“Virgin gold like truth lies at the bottom.” J. Miller, 1873.

Smiles were on the faces of everyone working at the mine last Friday. We expect gold every day where we have been drilling and blasting into the quartz near the 1000-foot level. It has been crumbs, teasers, and too many affirmative reasons to say, “deep enough”. Dollar wise this development was not paying the overhead, yet we stayed with it. Well, the crew was surprised after the last round when they entered the stope…..gold glistened in the beams of their mine lights. Estimated value is $200,000. The reason it was a surprise was the ‘big dog’ metal detector had not alerted the crew. The estimate value is based on $600 spot, but some of the quartz will work for the jewelers and bring a premium.

People ask me or wonder why we do it. Why do your miners, you or your supporters keep going underground. I know why, and it has a lot to do with the Sixteen to One history. But another man I admire said it best. Author John McPhee in his book ‘Encounters with the Archdruid’ copyright 1971, wrote,

“Once, in the Black Hills, Park (Charles Park) had taken me with him into the deepest mine in the Western Hemisphere. The descent took one hour-first in a wire cage down a shaft almost a mile deep, then a level mile or so on a narrow-gauge railway, then on down in another cage, until we were six thousand eight hundred feet beneath the earth’s surface. Heat increases in that area about two degrees for every three hundred feet you go down into the earth. The rock down there was a hundred and twenty degrees Fahrenheit, but the temperature in the tunnels we walked through had been brought down into the nineties by air pumped from the surface in long cloth tubes. The tunnels are known as drifts. Wearing coveralls, rubber boots, lamps, hard hats and shatterproof glasses, we followed one drift to its end-to the deepest and remotest working face in the mine. Park hit away with his pick. Sparks came off the wall, and so did pieces of rock, basically dark gray with shining seams of pyrite and nodular insets of white quartz. I still have the pieces of rock that he knocked off that wall, and I have often shown them to people-particularly to children-and asked them what they thought they were looking at. What is in that rock? Why would men dig a hole that deep? What would make them go six thousand eight hundred feet underground? What could they possibly be seeking? The answer seldom comes quickly, perhaps the rock is truly prosaic. “Iron?” they say. “Copper?” “Silver?” No. Keep going. It is the sum and symbol of why we mine anything, the base substance of the economics of nations, the malleable, ductile, most saint-seducing mineral in the crust of the earth. Something happens in their eyes when at last they say, Gold.”
 By Michael Miller

03/30/2006  12:40PM

Dear Forum Followers,

I spent the morning underground with Ian at the area we have named the Magic Line. It is just south of the Tightner Shaft and up dip from the 1000-foot level. In years past miners have pondered this unknown section of vein.. Prior to the modern gold rush beginning in 1975, miners, geologists and students of the Alleghany Mining questioned its potential for gold. Very large concentrations of gold were mined above, below and adjacent to the Magic Line. Maps and reports could lead one to believe that a zone of no gold is present; however, what we have seen over the past weeks raises some doubts that the area is barren. Because it is Alleghany and because it is the Sixteen to One vein definite conclusions about working or abandoning a specific area are always haunting.

As reported in other Forum topics, the crew has been in gold. Whether is will turn into an hundred ounce pocket or a thousand or more ounce pocket remains to be seen. I sat in a raise with gold and signals up dip on the left side for thirty feet and at the top of the raise and on the right side as well. You cannot be in a more positive situation for speculation. A serpentine pinch is down dip, mariposite is prevalent, the familiar banding structure is present, the gold can be seen passing into two distinct lenses and the vein itself has the width to make it interesting. We decided today to advance by shooting the footwall and avoid drilling the quartz if possible. If we must, we will drill and load the drill holes in the quartz lightly. Orders to the miners: Do not blow up the quartz. Take all the time necessary to remove in large and unfractured pieces.

There are five miners working in Alleghany. We are looking for more to hire, carefully looking. MSHA conducted its quarterly inspection on Tuesday. As a result, the crew was not working in the Magic Line. An area of concern for the inspectors was a short portion of the second exit. While Ian felt that the situation posed no threat to the safety of the miners, he decided to go with the inspectors’ opinion and replace some wood supports. The crew should finish today and get back to the Magic Line tomorrow. We expect gold to trickle in. If we hit a bunch, I will let you know once it is safely sacked and in the vault.
 By Michael Miller

02/13/2006  10:25AM

To Marc Ross
Rg: Miners Safety
February 13, 2006

Thank you for sending me the information included in the Feb 4, 2006 letter. I was particularly pleased to read the caution expressed by Mr. Naasz (president and CEO of the National Mining Association). The initial response by concerned but poorly informed people outside the mining industry to the recent coal accidents is typical of well-intended folks. Jumping to remedies helps no one.

I am a director and president of Original Sixteen to One Mine, Inc, the oldest and longest operating American gold mining company. I got into the industry in 1974, a few months before gold was liberated from government control. Our niche is quite small, very high-grade quartz and gold, deep vein and no diesel fumes to breathe.

We are but a drop of rain as far as influence in coal or the big gold producers, but I decided that standing up against harmful and misguided governmental prejudices was necessary for us to survive. I am a supporter of MSHA as another set of eyes to protect our miners. Unfortunately, the west coast was taken over by ex miners looking to further their careers above reasonable interpretation of the regulations. We have a date before the US 9th Court of Appeals in San Francisco on March 13, 2006, challenging one of the most ridiculous decisions I have seen. The big companies will be hurt significantly if we loose this battle. They have ignored the issue even though Newmont and Barrick people know of the issue, which brings me to the reason I write you today. The root cause of most fatalities falls back to the mindset of the miners before or during the accident. MSHA always puts the blame somewhere else. Miner safety is best served if we in the industry identify the causes of an accident and work to improve the operation. Please pass this observation on to those looking into the recent tragedies in our nation’s coal mines.

Regards, Michael M. Miller
 By Michael Miller

01/10/2006  12:04PM

At times I use the Forum to set a time line for points that may need one in the future. The following letter to the CDAA lawyer is my answer to his answer to my letter dated December 22, 2005. The defendant refused to answer my interrogatories and instead repeated the same objections as to form.

Dear Tom Knox,

Received your letter dated January 9, 2006, and understand your delay in responding. No problem. I am concerned about something you continue to do in your correspondences. As long as you continue to speculate on what my beliefs are in writing, I must respond in order to keep the record straight. Why? You and/or your clients have a record of deflection and implementing misleading practices of “lawyering”. I am not a lawyer and have little experience and education in the field. Fortunately, I have hung out with many good lawyers and judges and have gained an understanding of the norm. Also, I have great faith in the legal system and know that while the system is pretty good some members of the California State Bar are abusive.

Your last paragraph says, “You evidently believe that you are exempt from rules”. I do not believe that at all. I believe that business ethics are alive and that social behaviors and courtesies are the grease that makes our systems of law work because of the rules, which make for a level playing field. Look to your clients for not following the rules. Look around you for the practices of senseless obstructionist behavior.

You acknowledge in your letter that I was served the anti-SLAPP motion on March 9. You state in your Ex Parte Application for Order Shortening Time to Hear Motion to Set Aside Default (March 4) that I filed a Request for Entry of Default on February 28. Your alleged position that I was served on March 9 is not an accurate representation of the law because of the default.

So, where do we go from here? I am not going to bring this to Judge Young at this time as you suggested. I believe that most lawyers and judges understand the game of defense you have decided on. I also believe that when your approach is complied there is a likelihood that sanctions will be warranted, but then again, I am not a lawyer. I prefer that you change your strategy and try to cooperate in bringing our issues to trial.

One of my favorite law publications is the magazine Litigation. Last night I read an article about the need and benefits from respectful integrity and honesty between litigants. It was pointed out that during the course of a career, people’s paths will cross. Since it is unlikely that you and I or your clients will have the need for further business, it is unlikely our paths will cross; however, I am disgusted by much of what I have seen and am committed to do what is necessary to stop unlawful or misguided behavior that surfaces in our legal deliberations. To stop it, it must be exposed. Before an official throws the flag and assesses a penalty, he must see the offense (i.e. spitting in the opponent’s face).

Your letter cites Code of Civil Procedure section 2016.040 that I must establish a reasonable and good faith effort at an informal resolution of each issue presented in any ensuing discovery motion. I thought I had done a reasonable job in my letter and will try again. I am pretty sure that your mantra throughout discovery will resemble the tactics you have used from day one. I would be pleased if you show some reasonableness and make a good faith effort at an informal resolution of the objections to my interrogatories. I will respond, but I disagree that the lengthy and repeated characterizations of your objections reflect the norm. I ask that you reconsider the merits of your objections and send the interrogatories to CDAA. If I am right, I will seek monetary damages from you because I believe you know the rules and are purposely impeding the flow of the system.

January 10, 2006 Sincerely,
Michael M. Miller, individual
 By Michael Miller

01/02/2006  5:08PM

Thanks, guys. The test worked. CDAA told the judge that the web site tainted the jury pool. Now I have the proof if the defendants argue it again as the case continues. All is well in Alleghany. Electric power has been off since morning and not expected to return until after 7pm. It is always difficult to use the internet when the town has no power.
 By Michael Miller

12/05/2005  7:11PM

Late this day I received word that a decision was reached in our court case against the California District Attorneys Association and four of its lawyers. The news is good. As I sit down to read the Ruling On Motion To Strike, I decided to write you, the followers on our FORUM. We will learn together what the judge thought of Tom Knox’s position as I read the decision for the first time. Remember the company and Michael Miller are Plaintiffs. The bad guys, which it the shortest way we describe the fab four and their employer are the defendants. Lets read the decision together. It is four pages, so I will be editing it liberally. Oh, and by the way, I just poured myself a big scotch over the rocks to raise a glass to my friend, pal and social crusader, George, who I know is tapping these keys with me tonight.

This was filed in Downieville on December 1, 2005. It is signed by Stanley C. Young, Assigned Judge of the Superior Court. He writes, “The gravamen of the operative complaint in this matter is that the individual defendants acted maliciously and without lawful authority when they conspired to conceal exculpatory evidence from the grand jury, leading to a felony indictment against plaintiffs. Defendants have moved to strike the whole third amended complaint pursuant to Code of Civil Procedure section 425.16.

“Resolution of an anti-SLAPP motion requires the court to engage in a two-step process. First, the court decision whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant’s’ burden is to demonstrate that the act or acts of which defendant complains were taken in furtherance of the defendants’ right of petition or free speech under the United States or California Constitution in connection with a public issue. If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. Code of Civil Procedure section 425.16 does not protect conduct that is illegal as a matter of law. The motion to strike is DENIED.”

The ruling goes on to say, “Moreover, even if defendants’ burden has been met, the Court is persuaded that Plaintiff has met its burden of making a prima facie showing regarding the merits of the case.”

We won. We won big. We won it all. Tom Knox and his defendants presented a scenario to the Court that in my opinion and the opinion of many others abuses the intent of the law. This anti-SLAPP law was written by then California legislator and now California Attorney General. Was it so poorly written and then ratified by both California houses of the legislature that Tom Knox and his defendants’ motion had any merit?

The score is five to zero. We will continue to win. We will set the record straight. We will recovery damages. Klaus is confident that the bad guys will appeal. Yawn, of course they will. But could there be a downside to their reckless legal behavior? I hope so. I hope the legal profession will strike down those lawyers who mislead the court. I hope other lawyers will disbar those lawyers who abuse America’s greatest social/cultural creation, our judicial branch of government. The small guys’ ability to seek justice must survive. It is a long and bumpy road when the destination is to stop perjury in the courtroom. Even so, we just moved a little farther down the road. Tomorrow I will ask Kyle to type the whole decision. Oh, no. My glass is empty.
 By Michael Miller

11/30/2005  4:04PM

Article can be read in FORUM under Gold Enters Bull Market September 21,2005

Pierre Lassonde, President
Newmont Mining
Denver Co

Dear Mr. Lassonde,

Congratulations on your story, “The Gold Constant”, printed in Mining Engineering. You packed a lot of history into it yet made it palatable to people outside the gold industry. I particularly liked your analysis on the saving rate. It was fresh.

I write for two reasons. First, I ask your permission to put your story on our web site. The company treats its web site as a library for people familiar and unfamiliar with the topic of gold. It is not set up to hype stock, but to be an intellectual resource. Interestingly, Fred Searles played an important role in Newmont and the Sixteen to One. We have another odd twist between our respective companies taking place at the Empire Mine State Park, where I am currently driving an adit to intersect the Empire shaft. Also, we both are rare in the industry as leaders in our particular fields because we are incorporated in the United States. Newmont is the largest and Original Sixteen to One Mine is the oldest. Well, enough of this.

Second, I want to extend an invitation to visit us in Alleghany and tour the mine. It would be an honor to show you around. Jack Thompson stopped by just before the Homestake merger for a tour. He seemed to enjoy the visit, as I know you will.

Hope to hear from you.


Michael Meister Miller, President

I’m not the gold con man Michael Miller from years gone by.
 By Michael Miller

11/16/2005  6:48PM

Dear Shareholders, Friends, Supporters and merely interested Readers,

The defendants’ Motion to Change Venue was denied today in Superior Court in Downieville. Judge Stanley Young did not agree that the CDAA and its employee lawyers could not get a fair trial in Sierra County. He agreed with us. The remaining order of business was final arguments for defendants’ anti SLAPP motion. Defendants claim that their constitutional rights were contested because Original Sixteen to One Mine, Inc sued them to recover damages it suffered related to their filing felony charges against the corporation. Personally, I think this motion is specious and contrary to the legislative intent. When the law to reduce or eliminate frivolous suits was enacted in California, lawyers, of course, “interpreted it according to their purposes. I despise people using the court for irresponsible or frivolous purposes! It is also despicable that the legal profession (many of our State Assemblymen and Senators are members of the State Bar) squander the peoples precious time and money arguing about stuff that should be straight forward..

The judge heard the bad guys lawyer, Thomas Knox, present his view of the case. Mr. Knox offered nothing new. Our attorney, Klaus Kolb answered with a reading of George’s preparation. Klaus had to partially summarized George’s writing due to time constraints. Klaus then proceeded to answer all of Judge Young’s questions as they were raised. He went into some constitutional points and pointed out enough evidence to show that our case has merit. Mr. Knox rebutted. The judge said the case has now been submitted and he will rule. Nothing that I heard today changes my mind that the anti SLAPP motion is nothing more than a routine legal move by insurance defense lawyers.

A transcript of the hearing will be posted on this web site once it is received. I want you to fully understand the case. Nothing will tell the story clearer than actual transcripts. The Court left open the opportunity for the defendants to raise the venue issue, as the case gets closer to a trial. He cautioned my use of the web site (no purpose to inflame or prejudice the Sierra County jury pool). He also specifically mentioned the local small mountain paper as a potential corrupting vehicle to tamper with the jury pool. While I do not have any control over Donald Russell and what he writes in his paper, it would be a monumental task for defendants to concoct a theory that either of us poisoned Sierra County against the CDAA gang, thereby threatening them of getting a fair trial. Nevertheless, I will be very careful in keeping you informed, as I must and restricting my commentary.

As I was returning from the Court, I passed by the site of George’s accident. It is because of George and the noble beliefs that he held for his profession, “lawyering “, the law and the Courts that we are still in the fight. George was present today in Downieville. He fought back the attempts of Tom Knox to mislead the Court . Klaus gave George the recognition for his brilliant pursuit of justice and I just sat there at one point close to tears (nobody noticed the little beads of water in the corners of my eyes). This case is more than a judicial abuse against our company. It smacks the essence of what we are as Americans. We will win.
 By Michael Miller

10/21/2005  2:08PM

In the summer of 1959, R.K. Barcus and C.W. McClung conducted an examination of the Sixteen to One mine for the Mountain Copper Company (contact for Mountain Copper was Mr. Kett). Mr. Barcus wrote the report and Mr. McClung wrote the recommendations and conclusions. Additional information contained in the report is available upon request and will be typed into the web site.

The following is relevant today. The company has begun a search for working capital to explore into areas remote from the present workings and other areas. It has opened a dialogue with six separate parties that have expressed an interest and appear to have the capital to fund the $3.5 million projects. A common question has arisen: “With the slow down in production has the mine been depleted?” This is a fair question. The answer is, “No” but for one unfamiliar with the gold deposit in Alleghany, the answer does not jump out to you easily. The person or persons who join our effort will be the ones who take the time to visit the mine and study the wealth of research available from third parties. My job is to hone the many reports into a short crash course. So, here goes. Excerpts from the report.

The mine is more or less what one might expect from fifty years of ‘ following the vein’ where there has never been pressure for a high, efficient rate of production. Under these circumstances, a mining scheme based on a much larger tonnage of production could not be undertaken without very extensive realignment and re- equipment of haulage and hoisting facilities.
With respect to ore reserves, in the commonly accepted sense the mine has none at all. However, it will be understood from a study of the General References that this has always been more or less the case. The total value in an ore shoot is never known until it is mined out, and development around the perimeter of a shoot gives only a very general idea of its content. In past years of stable operation, there was evidently an understanding between mine management and directors that annual production would not exceed a certain maximum, and that a large ore shoot would be mined only to the extent necessary to met this maximum. As a result, it has not been uncommon for 50% of a year’s output of gold to be made in November and December.
The single large need of this mine is for a new high-grade ore, and the answer to this need is equally simple: a substantial expenditure for exploration.

For 22 years from 1932 to and including 1953, and excluding the disastrous years since, we find the following totals:

1. Gold recovered $7,677,200
2. Net operating profit $2,837,039
3. Net after taxes $2,371,348
4. Dividends $2,583,471

It will be seen at once that both from an operating and a stockholders viewpoint the enterprise was a successful one during that period.

Bill Fuller and I spent considerable time in discussion of this situation. He discussed all phases of the operation with me freely and without restraint. He is intelligent and quick-witted, and intimately familiar not only with the mine geology but with the personnel and operating problems as well. While much of what he told me is admittedly in the realm of personal opinion, I am convinced these opinions are more reliable than any other source available.
The preceding discussion of the management has been included to emphasize that the real merit and potential of the mine itself must be considered separately from recent results achieved by the present operators. As stated earlier, I feel that many of the problems here are man-made.
A very serious consequence of the salary policy for supervisors is its psychological effect upon the men who are charged with the actual discovery of the gold underground. Since the entire exploration system is based on the detection of free gold in the rock as a key to near-by high-grade shoots, an attitude of indifference or of deliberate malice on the part of the Shift Boss or Specimen Bosses could result in the over-looking of signs that might lead to an ore shoot that could save the mine. The temptation to high-grade, or to condone it, would also be increased by a feeling of injustice brought by low pay.
Whether a depressed mine can afford to maintain competitive rates of pay may be an arguable point. My personal feeling is that a mine with the problems of the Sixteen-to-One cannot afford less than the best.



The Sixteen to One Mine is recommended for acquisition in part by Mountain Copper provided that the terms are the same or similar to these that follow: We do not recommend purchase as a whole as it is our understanding the mine is not for sale and further more, if negotiations for outright purchase were undertaken, we feel that it would not be possible to reach terms acceptable to us.
Basically, our proposal for reviving the Sixteen to One Mine is to have the present mine provide the funds for the major share of the cost of exploring and developing a new mine. This would be accomplished by doing first, limited renovation of under ground workings, surface plant and mill and then systematically stripping the mine of possible ore shoots (second guesses), shaft and stope pillars and drift sills and crown pillars. It is assumed that this program which cannot be evaluated by conventional means would provide the money from short range operating profits needed for the extensive exploration and development which must be done if the Sixteen to One Mine is again to become a long-lived profitable mine.
Initial cost of this proposal is estimated to be $ 350,000. Of this, $150,00 will be used for renovation and new equipment. Of the remaining $ 200,000 would be working capital to assure successful establishment of the overall program.
Joint participation between Mountain Copper and the present owners of the Sixteen to One Mine is recommended on these broad terms: Mountain Copper to have full operating control, Sixteen to One to be responsible for the cost of renovation and both partners to share equally the remaining costs. There must be a complete understanding that operating profits from the first phase would be put into exploration. Distribution of ultimate profits would be subject to negotiation.
Historically, the mine has made in excess of a quarter million dollars profit a year excluding the recent past few years during which the operation has been run at a loss or at best a break-even point. However, during this most period, no attempt has yet been made to plunder the mine. Operations have been conducted on ‘second guesses’ at a very slow and inefficient rate. Good mining was practiced in the past particularly in respect to proper support of underground openings. Adequate pillars protect the shafts and drifts and most stopes remain open.
There is reasonable assurance that with maximum effort to restore moderate efficiency to the mine and with systematic plundering to abandon completely the existing underground workings above the 100 level from the north boundary to the Sixteen to One Mine shaft that operating profit of $400,000 to $500,000 can be generated at an annual rate of $100,000 to $150,000. This sum reinvested in the mine would do the entire Medium Range exploration program proposed in Mr. Barcus’ report. An annual extraction of 30,000 tons of $15 ore would be required to produce the above profits. Remaining capacity of the renovated mill would be used to handle rock from exploration and development.
Willingness on the part of the Sixteen to One people to accept this proposal or a modification therefore would demonstrate their faith in the mine and the sincerity of the management’s statements upon which many of our assumptions are based. Mountain Copper’ investments of cash into this venture would be a minimum with a risk commensurate with the possible gain.
The excellent comprehensive report by Mr. Barcus gives as clear a picture of the Sixteen to One Mine as is possible from available data. The report covers in detail the complex facets that make up this unique property and it also shows why a recommendation is not possible based upon the usual form of mine evaluation whereby money is spent first on exploration and development and secondly, on a mill and surface buildings.
If the policy of Mountain Copper is to reenter gold mining at this time, the Sixteen to One offers an excellent opportunity for risk capital. The risk is not easily evaluated because ore cannot be measured by ordinary standards, hence, a great stress must be placed upon historical evidence, geological reasoning, a feeling for the mine and the integrity of certain of the present mine officials.
The present mine is dead, and we could not expect continuation of current operation to be profitable without managerial changes and extensive renovation. If this were a property of the usual order, consideration would be given only to the development of ore. But it is evident that the Sixteen to One is not an ordinary mine, and all phases of the operation, that is, surface plant, mill and underground must be examined and related to the overall problem of creating a new mine.
From the Barcus report, it will be seen that there are two major areas of immediate interest in the search for new ore. These are classified as ‘short range’ and ‘medium range’ exploration commonly referred to as ‘second guesses’ and ‘deep south’ respectively. Each offers a basic approach towards reviving the mine and either one could be done alone or both undertaken together, thus giving three basic options. In addition, there are several combinations of the three that could be coupled with various degrees of renovating the existing plant. The choice is dependent upon the amount of money to be spent, the ultimate goal and the time to factor involved. Costs of the basic options range from $380,000 to $500,000 with added sums to a maximum of $150,000 depending upon the degree of plant renovation. Exploration and development costs taken from the Barcus report are based upon those of an operating mine and sizable increase could be expected if the programs were undertaken independently.
Determination of the course of action to follow at the Sixteen to One must consider the nature of the ore. It can be linked to a low calorie pudding, which contains a few extremely rich but small plums. A conventional program of sinking, drifting and rising for thorough and complete exploration and development of an ore body is fundamentally the system of mining at the Sixteen to One. Exploration headings, especially raises that encounter. High-grade ore are simply enlarged into small stopes of sizes, which are not predictable. It is therefore impossible to block out quantities of known ore. Advanced exploration is considered as ore reserves and the milling of exploration and development ore is the best means of determining its value.
A moderate exploration program following any of the three basic options would produce approximately 60 tons of ore a day. The existing mill with minor and inexpensive repairs, would handle this tonnage easily. If either of the short range ‘second guesses’ begin producing or the medium range ‘deep south’ proves the existence of another geological environment similar to that which contains the ‘basic’ structure of high grade ore in the old mine area. It would be very difficult to decide when exploration ceases and mining begins. A reasonable number of headings could be stopped at a showing of high grade and exploration continued in other headings but it would be impossible to estimate reserves as there would be no way of knowing ultimate value of each high grade short of mining it out. Prudent management would dictate extraction of high grade about as it is found. Then it would be possible for the mine to become a profitable producer at any stage of the exploration program, limiting the amount of money that would otherwise be spent in continued exploration.
Exploration, based upon knowledge gained from past experience, would be channeled into the most favorable areas. By taking advantage of this hindsight, it should be possible to save much dead work and to confine our efforts to zones more likely to produce high-grade ore. Limiting nonessential exploration would reduce dilution of high-grade ore with low grade or barren quartz thus raising the overall value of ore mined. If the thesis developed in the Barcus report of high-grade ore being confined to a particular geological environment similar to the area above the 1000 level and between the Tightner and the Sixteen to One shafts is found to repeat, areas of this magnitude could be mined out in considerably less time than was done in the past. Rather than taking 16 years to produce 8 million dollars, the same amount could easily be produced in half the time. The yearly profit level would then be raised from one-quarter million to a figure substantially higher and much more attractive to partners of a joint venture.
The above is predicated upon a geological theory the proof of which depends on the success of the medium range or ‘deep south’ exploration program. If our proposal is accepted, Mountain Copper would be risking a minimum of $ 150,000 and the Sixteen to One Mine would be gambling a like amount, which they now have in their treasury, and their mine to prove or disapprove the existence of a new mine. It is the considered opinion of both the writer and Mr. Barcus this is a deserving venture.”

 By Michael Miller

09/29/2005  1:11PM

Dear FORUM Friends,

Gold became the unpublicized stability of international trade when the United Stated allowed the “price per ounce” to floated with all currencies; its value, however, has remained measured in dollars. Speculation contributes to its fluctuation, but some well-healed producers of other goods and services looking to hedge their earnings for the long term turned to gold.
The Middle Eastern oil producers have an extended history of exchanging their dollar revenues for gold. Some dabbled in other hard assets but stuck with gold. Other people, cultures and agencies were attracted to the staying power of gold but dabbled in other purchases with their stacks of dollars. The most publicized transactions occurred when the yen crowd was buying America: Rockefeller Center, Pebble Beach, and classic art. The all-rich desert cultures were comfortably secure with bullion bars in their possession even if they earned no interest.

Twenty-five years ago stories about the depleted vaults at Fort Knox were covering gold-bug publications. The subject is never discussed today. Did somebody clean out this most famous gold depository? If so, who could it be? Gold is the only physically pure storage of value. It has no natural enemies. No natural conditions erode its composition and mars is .9999 fineness. No water or fire will destroy it. It is the world’s most perfect substance to store. It is compact, easy to hide, or disguise. It is readily liquefied (changed into currency).

Unlike during the last gold rush of the twentieth century, which began in 1968 or 1974 (depends on ones historical perspective) China is a new world financial player. Her central bank thirsts for purchasers of mortgages from U.S. financial institutions to hedge the billion paper credits it has amassed. The surge in this demand is fueled with China’s over supply of dollars. China has liened much of America’s real estate. Maybe this is a good economic event, but few people are knowledgeable enough to give it a fair discussion.

Does gold make a difference today? I say, “America needs a productive gold industry”. Our deficit mounts, and our overall indebtedness to foreigners totals about $3 trillion. China is retaining its dollar in its central bank as demand swings to U.S. mortgage-backed securities. Other less noticeable entities are doing likewise.

This is troubling. Money streaming in from overseas is going toward consumption and housing. It is not helping to finance a boom in productive assets such as factories and machinery. America continues to be non-competitive with the labor markets outside of North America. Consider that the California gold fields offer America a way to work towards neutralizing the threatening trade deficit. California gold exists. California holds the world’s premier proven gold deposit with the fewest number of miners working their trade. In order to redirect a failing and vital economic opportunity to improve America’s security, let’s produce more gold locally. Gold mining as executed at the Sixteen to One mine is green as it is golden. It is also timely. The California high-grade goldfields offer prime production of a vital commodity and a potential yet to be realized. Twenty-first capitalists have ignored gold investments in rock solid mining propositions. With the technological improvement over the past ten years, any risk/reward analysis will tell a story worth hearing.

I remain committed to our goals.

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