November 16, 2018 
 Friday 
 
 

Forum
Topic:
Another U.S. precious metals miner goes foreign

       

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 By Michael Miller

07/19/2018  6:33PM

WAY TO GO NEWMONT MINING

Newmont Mining has completed a US$69-million expansion at its Exodus operation, which has resulted in a 10-year extension to production and will lower all-in sustaining costs by about US$25 per ounce at its Carlin mine during its first five years of operation. The expansion, which was the company’s second in the last month, was completed both ahead of schedule and within budget and will add between 50,000 ounces a year and 75,000 ounces a year of gold production. The expansion will also lower Carlin’s all-in sustaining costs by about US$25 per ounce in its first five years of operation.

Thanks to John Livermore and friends; Nevada continues supporting America with new gold production.

Fred Searls Jr., one of initial Leaders of Newmont, began his lifetime interest with gold mining in California. His history with Sixteen to One mine differs from the inaccurate account In “Men and Mines of Newmont” by Robert H. Ramsey (page 71). No disrespect intended. Mining exudes folk-lore, myths, legends and downright fabrications. Fred cut his geological teeth going north in the 250 level beyond the Tightner Shaft. He rued his mistake in surveying the level which is clearly noticeable on old maps. He, General Lucius D. Clay and the famous stock guru and statesman, Bernard Baruch liked mining ventures.

Baruch Clay and Searls were buddies. Searls told them about his days as a geologist at the Sixteen to One. He told a friend of mine, Donald Dicky that it was the only mistake he ever made in mining. Don and I laughed because Don told me years earlier when I was down and pouting about a story of mining. We failed to find enough gold in the fall of 1991. I had to lay off the crew shortly before Christmas.

Don liked Fred and spoke of his large idiosyncrasies as well as his large ego. (He was also a colorful dresser.) “One mistake?” Don grunted. “Mistakes are many when it comes to mining. Don’t worry Mike, Let it go. It’s your comeback that counts.”

Fred and group put up some money in the early 1960’s to keep the Sixteen mining. Gold spot price, frozen in 1933, caused the other mines to close. What must have interested Fred was where he screwed up his survey was this new target: north on the 1500 level into the Red Star. The miners found speckled gold along the drift, but expenses caught up to the Sixteen and in December 1965, management laid off the miners; however management allowed those loyal men to continue mining, which they did for years. Fred never owned stock in our Company. He and his buddies loaned some cash for operating. They tore up the note. Maybe Fred cleared his conscious. One mistake? Baloney!
 By Michael Miller

06/26/2018  9:54AM

Problems continue with major gold producers in foreign countries.

As the tax dispute between Acacia (Barrick owns 63.9 percent of Acacia and the Tanzanian government continues, the company’s representative, Barrick Gold, has decided that it won’t provide a definite deadline to end the negotiations. The decision comes after Barrick, which is negotiating on behalf of Acacia, failed to meet a mid-year target to complete talks surrounding the ongoing tax issue.

Despite failing to meet the deadline, both Acacia and Barrick remain positive about the situation, noting that the discussions between Barrick and the government of Tanzania are constructive and that progress has been made towards creating a “definitive agreement,” which is necessary for the “implementation of the proposed framework.”

The tax dispute between the miner and the East African country transpired when Tanzania began making sweeping changes to its mining industry in order to reap more benefits from its minerals.

As part of these changes, the Tanzanian government slapped Acacia, its biggest gold miner, with a US$190 billion bill in unpaid taxes, penalties and interest in 2017. This is not the first time that the company has suffered as a result of the Tanzanian government making changes to policies and procedures within the mining sector. The miner has lost almost 80 percent of its value following a ban on unprocessed ore that was set into motion in March of last year.

According to the deal, Acacia would give the government a 16-percent stake in its mines, as well as a payment of US$300 million and equally split any “economic benefits” from operations.

California has mining problems but not ones like those outside USA.
 By Michael Miller

06/22/2018  12:31PM

The following headline caught my eye and stimulated the question, “why”:
Sumitomo Buys 5-percent Stake in Yanacocha Gold Mine for U$48 Million.

The sub heading was, “in an effort to boost its metals assets, Japan’s Sumitomo has purchased a 5-percent stake in Peru’s Yanacocha gold mine for US$48 million. “ My curiosity is not that Sumitomo bought an interest in a big gold producer. No. it is, who is Sumitomo?

Sumitomo Corporation (Sumitomo, Head Office: Chuo-ku, Tokyo; President and Chief Executive Officer: Masayuki Hyodo), is pleased to announce that Sumitomo has reached an agreement with Newmont Mining Corporation (Newmont) and Compania de Minas Buenaventura S.A.A. (Buenaventura) to purchase certain ownership interest of Yanacocha Gold and Copper Mine in Peru (Yanacocha).

Newmont is the world’s largest gold producer. Sumitomo had a long and productive partnership with Newmont at Batu Hijau Copper-Gold Mine in Indonesia from 1996 to 2016.
Buenaventura is a leading precious metals producer in Peru. Sumitomo has partnered with Buenaventura at Freeport’s Cerro Verde Copper mine in southern Peru since 2003.

Sumitomo’s investment comes as Japanese trading companies enjoyed their best profit in six years and are now searching for assets to add to their portfolios. Profits have been driven by higher prices for commodities such as coking coal and copper.

If this interest’s you read about Sumitomo and all the extensions of this Japanese corporation. It definitely crosses natural resources with varied financial business. What if banks and other dollar related institutions gobble gold producing companies?

By the way,today I turn 76 years from a birth in Sacramento. If you are a shareholder in Original Sixteen to One Mine, Inc. our company is older than Sumitomo, I congratulate you for becoming a part of another natural resource producer.
 By Michael Miller

05/15/2018  12:47PM

ARE US DOLLARS AND GOLD CLOSELY RELATED? Turkey is making a statement.

Turkish Gold Imports Triple As Central Bank Diversifies Out Of Dollars
Turkish gold imports surged due to a sharp increase in investment demand as well as renewed Central bank purchases. Turkey added 86 metric tons to its official holdings in the last seven months of 2017.

According to the 2018 World Gold Survey, Turkish official gold holdings reached a new record high of 565 metric tons (mt) last year as the government decided to replace a significant amount of its Dollar reserves with gold.

Turkish gold imports more than tripled from 106 mt in 2016 to 361 mt in 2017. Again, the large increase in Turkish gold imports was due to a 60% increase in investment demand and the 86 mt purchase by the Central bank.

What is quite interesting about the increase in Turkish gold demand and imports is how it compares to the United States. In 2017, Turkey imported 361 mt of gold versus 255 mt for the United States. Thus, Turkey, whose population is one-quarter of the United States, imported 100+ mt more gold. Look at the major foreign holders of U.S. Treasury securities, Turkey has been liquidating its Dollar holdings by $16 billion since its peak in October 2017.

Russia has also been liquidating U.S. Treasuries by approximately $11 billion since its peak in November 2017. However, Russia wasn’t selling U.S. treasuries to purchase gold; rather they were diversifying out of Dollars and into IMF Bonds.

While there are countless reasons why Russia is adding gold to its official holdings, the most important reason is quite simply, because IT CAN. The majority of countries is running massive trade and balance account deficits and cannot purchase gold. Russia is one of the few countries that export a great deal more oil than it uses domestically which is part of the reason it enjoyed a $115 billion trade surplus last year.

U.S. Government could print money to purchase gold. There are no western central banks buying gold. They just can’t. Most of the Central Bank sold into the market has come from the IMF and western central banks. Second, for a western central bank to start purchasing gold, it would be seen as a huge red flag to western fiat currencies.

Gold is a barometer for the U.S. Dollar. If the U.S. Government started printing money to buy gold, think about how that would not only impact the price but market sentiment. Western central banks will continue to liquidate gold until the financial markets and the fiat monetary system disintegrate. When more countries like Turkey add to their gold reserves, it’s a clear sign that all is not well in the global financial markets.
World Gold Council Edit.
May 14, 2018
 By Michael Miller

12/07/2017  2:03PM

This date stands strong with me for two reasons: Pearl Harbor and my father’s birthday, December 7, 1906. Now it also stands with September 11 as 9/11, as infamous days of terror.

The Japanese, with few natural resources, sought to copy the pattern of European colonialism in Asia. The Japanese military faced a particular tactical problem in that certain critical raw materials — especially oil and rubber were not available in Japan or their colonies. The intensification of Chinese resistance to the pressure of the Japanese military drew Japan into a draining war in the vast reaches of China proper. Japan was not militarily or economically powerful enough to fight a long war against the United States, and the Japanese military knew this. Its attack on Pearl Harbor was a tremendous gamble.

Our country and today my state home, California, must reform its understanding of our own natural resources. Our public service industries lead the nation in economic and scientific ignorance regarding its value and development. Let’s begin meaningful reformation today.
 By Michael Miller

10/19/2017  8:59AM

Scotiabank will sell its gold trading unit following a scandal involving a US refinery and smuggled gold from South America.

The Canadian bank’s ScotiaMocatta business is one of London’s main gold-trading banks, and was acquired by Scotiabank almost two decades ago., Chinese buyers are the key targets of the sale, which is being led by JPMorgan. What prompted the sale was Scotiabank’s lending to Elemetal, a precious metal refinery in Dallas.

Earlier this year, US prosecutors accused workers at NTR Metals, a subsidiary of Elemetal, of a money-laundering scheme using “billions of dollars of criminally derived gold,” mostly from Peru: “knowingly conspired to purchase gold with the intent to promote the carrying on of organized criminal activity, including illegal gold mining, gold smuggling and the entry of goods into the US by false means and statements to US Customs, and narcotics trafficking.”

Of course the whole issue has layers of responsible entities downstream from the bank. NTR Metals is said to have imported more than $3.6 billion worth of gold from Latin America between 2012 and 2015. Scotiabank and ScotiaMocatta have not been accused of any wrongdoing.
Scotiabank has been seeking a buyer for the unit for up to a year, and is likely to shrink the business if a sale is not completed. Scotiabank has the biggest foreign presence of any Canadian bank, and is focusing its international strategy on the Pacific Alliance, a Latin American trade bloc comprised of Mexico, Peru, Chile and Colombia.
 By Michael Miller

07/20/2017  4:50PM

US President Donald Trump and staff were approach with a suggestion to nationalize the whole Mountain Pass enchilada to turn it into a national laboratory “dedicated to rebuilding America’s rare-earth mining industry, so the world knows it is safe to build high-tech manufacturing plants in the U.S.”

The Trump administration has not commented on the proposal that Mountain Pass be nationalized by eminent domain via the Takings Clause of the Fifth Amendment. Yikes!!
Shall I make a comment regarding my belief that the U.S. must retain a domestic mining industry? Yes.

Whether it is gold in California or rare earth minerals in California, state and federal governments must take notice as to reasons our rare earth deposit fell into a mixture of foreign hands and the Sixteen to One mine is again the last commercial underground gold operation. BUT, nationalization?

No, our governments have projected a negative attitude to miners. We ask for a neutral behavior of regulating the industry or even a helping hand. Nationalization will bring more harm than benefits. Yet, to make America greater than it has been for a while, how about governmental bureaucracy easing the pain to our miners? Hey business leaders…find another way.

Here is a tiny story of what I currently face regarding California water regulations. The Sixteen to One mine is a mineralized area commonly called a deposit. Surface water trickles through the earth and discharges from an underground hole excavated in 1865. The water has done this over 150 years with no adverse effect to Kanaka Creek and its environment. When the federal and state bureaucrat launched its broad brush to save the environment, identifying mineral levels jumped from measurements in parts per million to parts per billion. The number becomes larger and frightening to the “soft knowing eyes.”

Here is the result: California water public servants decided that the water from the Sixteen to One mine must be treated to meet drinking water standards before it passes into mineral rich Kanaka Creek, previously recognized as highly mineralized. This is governmental insanity without doubt! Mine water is not a problem. Using precious funds to negate a non-problem without beneficial gain is money lost towards production. There is no economy here that provides benefit to the public.
 By Michael Miller

06/15/2017  9:59AM

What a surprise!!!

A buyout group backed by a Chinese company has been declared the winner at a bankruptcy auction yesterday (June 14, 2017) for the Mountain Pass rare earths mine, the sole U.S. source of elements essential to electronic devices. Molycorp, the mine’s original owner, poured $1.5 billion into Mountain Pass in 2011, when rare earths prices were high. A drop in light and heavy rare earths prices forced the mine to close in mid-2015, and Molycorp went bankrupt. The US currently imports most of its rare earths from China. What contributed to the drop in price? China began dumping inventory into a market it controls.

An Australian led group of companies was designated as backup bidder. The group will be submitting an objection on or before June 19th to object to issues related to the auction process. Swiss bases mining investment fund, Pala, plays a role in the take-over as does ERP Group of Companies (private company). Russian-born billionaire Vladimir Iorich established Pala Investments in 2007.

The high bid was $20.5 million.
 By Michael Miller

02/21/2017  8:24AM

TEN TOP GOLD PRODUCING COUNTRIES

Once again, China was the world’s top gold-producing country with output of 455 MT. The country has now held that position for 10 years in a row. (MT = metric tons)

Gold production in Australia took a bit of a tumble in 2016, dropping from 278 MT in 2015 to 270 MT.

US gold production dipped last year, dropping from 214 MT in 2015 to 209 MT in 2016. Most of the gold in the country was produced at more than 40 lode mines, several large placer mines in Alaska and a number of smaller placer mines in the western USA.
The USGS further notes that the 26 top operations in the country were responsible for 99 percent of its gold output.

Gold production in Canada rose noticeably in 2016. Last year, the country reported output 170 MT of gold, compared to 153 MT in 2015.

Peru saw a slight increase in gold production last year, with output rising from 145 MT in 2015 to 150 MT in 2016.

South Africa’s gold production has steadily over the last several years. In 2016, production dropped to 140 MT from 145 MT in 2015.

Gold production Mexico has stayed relatively stable over the last several years, although it dropped last year to 125 MT from 135 MT in 2015.

Indonesia’s gold production increased from 97 MT in 2015 to 100 MT in 201.

Rounding out the list is Uzbekistan, which produced 100 MT of gold in 2016, down from 102 MT in 2015.

In 2015, global gold production increased by just under one percent in 2015. This is the seventh annual increase for gold production in a row, although that growth is slowing.
 By Michael Miller

06/28/2016  2:39AM

American mining companies face unlawful enforcement of laws by its government and quasi-government entities along with numerous obstructions in America’s production of needed natural resources. It’s a fact! One hazard felt in some active mining places that we do not face is kidnapping our miners. For national security reasons, America must produce minerals from its own country.

News from headline June 27, 2016: “RELEASE OF KIDNAPPED MACMAHON WORKERS”

Macmahon Holdings has confirmed the release of all seven of its men who were abducted near its operations in Calabar, Nigeria on June 22, 2016. Five of the men have been injured – two of them seriously – and they are receiving medical attention. The two uninjured men are also undergoing medical assessment. Arrangements have been made for the men’s safe return to their families once they receive medical clearance to travel.

During the attack on June 22,, Matthew Odok, who was driving a vehicle the men were travelling in, was killed. The kidnapped workers were three Australians, two Nigerians, a New Zealander and a South African. According to reports one Macmahon worker, mechanic Tim Croot, managed to evade capture.
 By Michael Miller

04/20/2016  1:00AM

Overnight a historic event took place when China, the world's top gold consumer, launched a yuan-denominated gold benchmark as had been previewed here previously, in what Reuters dubbed "an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market."

Considering the now officially-confirmed rigging of the gold and silver fix courtesy of last week's Deutsche Bank settlement, this is hardly bad news and may finally lead to some rigging cartel and central bank-free price discovery. Or it may not, because China would enjoy nothing more than continuing to accumulate gold at lower prices.

The first Chinese benchmark price, derived from a 1 kg-contract traded by 18 participants on the Shanghai Gold Exchange (SGE), was set at 256.92 yuan ($39.69) per gram on Tuesday, equivalent to $1,234.50/ounce.

China's gold benchmark is the culmination of efforts by China over the last few years to reform its domestic gold market in a bid to have a bigger say in the bullion industry, long dominated by London where the global spot benchmark price is currently set.

As is well known, as the world's top producer, importer and consumer of gold, China has balked at having to depend on a dollar price in international transactions, and believes its market weight should entitle it to set the price of gold.

Thank you, shareholder for sending this historic event. Otherwise I may not have seen it.
Thanks also to zerohedge.com for your news. Speculations welcomed about the effect this will have.
 By cw3343

03/13/2015  11:08AM

Shareholders will lose all (including CalPERS, who own over 2% of the stock). Looks like Wells and Bank of Nova Scotia will provide financing. The Hycroft mine will stay operating, as this is essential for any of the creditors to recoup funds. It looks like they lost (mark to market) around $95 million on currency swaps, which were necessary because of operations in Mexico/S. America. Their all-in cost for 2015 is a little over $1000 per ounce - not much room for error.
There is a ton of info on the recent form 8-K.

Good point on Barrick - I am very familiar with their current debt/leverage position. The Pascua Lama project in Chile/Argentine really set them back, bad...
 By Michael Miller

03/12/2015  9:46AM

Sad news, cw3343. Wonder who will bail Allied out of its death. Will it become foreign owned? What about all those existing shareholders?

The bankruptcy is quite a step down for Allied Nevada. The US-based gold mining and exploration company, which holds the Hycroft gold-silver mine in Nevada and a variety of other properties in that state, reached a high of $45 back in 2011 when the gold price peaked.
Looking at how bad it got for the company, the news outlet states that Allied Nevada’s debt clocked in at $664 million as of December 31, 2014, with its assets coming to $941 million. Meanwhile, the company had less than $1.3 million in cash in November of last year; though it was able to bump its treasury up by later raising $21.5 million, by Tuesday its cash was back down at just $4.5 million.
As mentioned, Allied Nevada’s filing is in support of a financial restructuring that will allow the company to reduce its “funded debt obligations and provide [it] with additional liquidity” — specifically, it will receive a cash boost of $78 million. The majority of the company’s creditors reportedly support the restructuring, and its entire creditor and vendors are expected to be paid in full when it’s complete.
The first domino?
In addition to being heavily leveraged, many miners have had their credit ratings downgraded. Companies are heavily leveraged. Debt is becoming less and less available. Examples of miners that have received downgrades include Teck Resources and Barrick Gold downgraded in January. The miner’s debt-to-total-capital ratio was 45 percent, making its financial leverage higher than average. Its long-term debt was sitting at about US$1.3 billion.
 By cw3343

03/10/2015  12:42PM

Not sure if foreign ownership will result - but RIP Allied Nevada Gold.

Among other reasons for their Chapter 11, currency swaps exposure was mentioned.
 By Michael Miller

12/30/2014  12:48PM

While the following in not a clip about US going to other countries, it does provide information that all is not bliss when a natural resource decides to develop a natural resource outside the United States.

Barrick Gold reported that it will suspend operations at its Lumwana copper mine in Zambia. The move follows the Zambian government’s decision to jack up royalties on open-pit mining operations in the country from 6 percent to a whopping 20 percent. the new rules will also slap a 20-percent gross royalty on revenue “without any consideration of profitability.”

The company expects to record an impairment charge of $1 billion related to Lumwana with its fourth-quarter results for this year. It will implement major workforce reductions at the mine in March, and aims to transition the mine to care and maintenance by the second quarter of 2015. While this is a small amount for Barrick, the new royalty increase eliminates about 4,000 jobs in the region.

Another billion dollar resource company agreed to a $7.5 million environmental fine. How was this environmental loss to the public calculated? Does this encourage governments to exaggerate the actual damages caused by an accident or set of circumstances beyond a company’s control? I think so.

All I ask for in California is a level playing field. Judge the Sixteen to One factually, realistically and with competent administrative personnel. Natural resources are a necessary ingredient to return prosperity. California is moving in the right direction. I’m not sure Washington D.C. understands this yet. It will because it is one fundamental economic improvement that brings the poor, the comfortable and the rich financial gain. Oh, and yes, the environment must not lose for this to take place. The upcoming year will mark a recognition of the need to encourage or at least not discourage responsible natural-resource productions. I pray for America to get the message.
 By Michael Miller

10/08/2014  5:54PM

This short report, below, is from a reliable source. Is it true? I only have doubts because I have not read this in a newspaper or TV or radio. I find it suspicious because it does not cite the volume. My source is “lemetropolecafe.com”. Answers appreciated because 12.5Kg is a big number time spot price for bullion.


Physical gold is being accumulated and used in exchanges
but very discretely as of now. In a recent report mentioned
in the UK Telegraph it is revealed that a record number of super-rich elite are buying gold bullion bars weighting
12.5 Kg. The report says "The gold buying secrets of the
UK come as it was recently revealed the number of 12.5kg
gold bars being bought by wealthy customers has increased
243% so far this year, when compared to the same period
last year."

I checked telegraph.co.uk and found the article entitled, “Gold hoarding secrets of the UK mapped”. The bars are worth 300,000 pounds, another big number but how many are purchased. This is a major reason for difficulties in talking price, supply and demand. This is my break from the issues of running a real gold mining company. Break over.
 By Michael Miller

09/22/2014  11:25PM

Mali plans to boost funding opportunities for its artisanal miners and to improve the policing of a sector that produces about a third of the country's gold exports, officials said at the start of a mining reform meeting. Artisanal gold mining is plagued by frequent fatal accidents, smuggling and reports of child labor while environmental issues have also been caused by the lack of geographical restrictions on miners.

Artisanal mining is on the rise in Mali as neighbors including Ghana, Senegal and Burkina Faso have imposed restrictions on the sector, driving more miners into Mali. Speaking at the meeting, Abdoulaye Pona, president of Mali's chamber of mines, and mines minister, Boubou Cisse, said the government was negotiating with banks to give miners easier access to financing for equipment and newly formed cooperatives would be supervised and revenues distributed equitably.

"With this system, the miners will no longer continue to dig holes from right to left, here and there. Mining will be done in selected corridors and at the end of the activities we will close the holes to restore the ecosystem," Pona said. President Ibrahim Boubacar Keita, also at the meeting, called on miners to end the practice of child labor.

"We will not allow children into gold mining sites," he said, "We have to stop this."

Our governments (US and California) had agencies to guide and assist the mineral extraction industry. Its employees were familiar with the nuances of mining. They were responsible advocates who had the background, experiences and training to protect both the miners and non-mining consumers of our vital and precious natural resources. No longer can these public servants be found.

The agencies now concerned with minerals are operated from fear based, police based or revenue based people and policies. Laws, created by our elected citizens, have given way to regulations no longer lawful. In this process the survivors are mostly large corporations. Their stream of income and political resources carries the day.

Look at Mali, a small perhaps third world country. Its government must realize the value for producing gold. Wow, the leaders are helping the miners financially as well as assisting the actual operations. What a concept! I can only wish for America to find such leaders. Our governments have become the biggest oppressor. Consider all the minerals America requires to sustain our way-of-life. If more were produced locally, our population will be richer and safer as well. I’m sure you know why.
 By fredmcain

05/27/2014  8:07AM

Group,

All I can say is *WHEW!* What a relief it is! I think we all owe Michael a big, hearty thanks for all his efforts in helping to stall this totally absurd and completely unnecessary piece of legislation.

I, for one, am optimistic that this might not come up again right away. At least not for a few years although we probably always need to be on the watch.

I might add that I am also quite optimistic on the future of the Original Sixteen to One Mine. Optimistic and becoming more so all the time!

Regards,
Fred M. Cain
 By Michael Miller

05/24/2014  8:55AM

California can thank those who commented on the dangers of putting the bill into law. I received the following email from Dennis at EnviroMine, Inc. yesterday at 2:40pm:

“It has been confirmed that Senate Bill 1270 has not made it through the appropriations committee. That means the bill is dead for this session in the Senate.

Your letters and e-mails had an impact. I will keep you posted if any other news comes up.”
 By Michael Miller

05/22/2014  1:46PM

Tomorrow is the date for the California Senate to move this bill forward or stop it. I sent the three senators most involved the following fax today.

The Senators are: Senator Kevin De Leon: http://sd22.senate.ca.gov /Phone: (916) 651-4022
Fax: (916) 327-8817

Senate Pro Tem Darrell Steinberg: http://sd06.senate.ca.gov/ Phone: (916) 651-4006
Fax: (916) 651-4906

Senator Fran Pavley: http://sd27.senate.ca.gov/ Phone: (916) 651-4027
Fax: (916) 651-4927

Senate Pro Tem Darrell Steinberg May 22, 2014
Senators Kevin De Leon
Senator Fran Pavley

Regarding: SB 1270

Dear Senators,
This proposed bill must not continue. The language may appear innocuous, but it will bring unwanted consequences to those in our vital mining industry. Most of the revisions are not needed to preserve, protect and enhance this necessary Californian business. It will hurt the general public, which I believe you are trying to give additional protection. It will hurt the young families eager to enter a tough blue collar well-paying job market…the life of a gold miner. It will hurt all business in rural counties where most of our valuable resources are deposit.

When asked, I wrote my Sierra County Supervisor, Lee Adams the following comments:
“Lee,
Identify those underground operations today that are abusing the physical environment. Then propose a bill to address those concerns. Problems likely occurred long ago before the Surface Mining and Reclamation Act was legislated. It was needed in the 1970’s because mining experts discovered the technology to profitably extract minerals using high tonnage, open pit development. Operators today are aware of the need to restore surface excavations to a safe and nonhazardous state. The data gathered to support the need for the proposed language in this lengthy bill is both inconsistent and unreliable with evidence I have observed throughout California

There is a most insidious, sneaky and outright fraudulent change in the proposed language. No doubt it was placed there by a hungry lawyer. It allows third parties to file lawsuits under SMARA. Similar language has cost the taxpayers billions of dollars under the water protection. This money was wasted when reviewed by careful analysis. Californians cannot open this door to needy lawyers and others using organizations as a front to make their living.”

Permit me to qualify my opinions regarding SB 1270.

Since 1983 I have been the President of the oldest gold mining company in the United States. Original Sixteen to One Mine, Inc. was incorporated in California in 1911 and has

operated mines in California since then. It is a traditional underground gold mine between Sacramento and Lake Tahoe. To even explore for minerals in California an operator must work through county, state and federal rules, regulations and standards, all of which emanate from some legislated law. Others in mining respond when asked about considering an investment in California, “Wrong zip code.”

Regulations are blamed for the hostile work environment in California as well as the mineral extraction industry. Farmers feel the same, as do too many other businesses. After years of working with the many governmental agencies, I reached a somewhat different conclusion to the regulations problem. The regulators are more the problem than the regulations they interpret and enforce. How has this happened? Government employees fear admitting that mistakes were made. In other words, they cover them up. They also react badly to overzealous fears expressed by members of the non-government sector. The time and capital burden falls on and over powers the small operators to defend these claims. The effects are much greater for them than for the large companies. This proposed language will bury the small miners. Their much needed products will be withdrawn from California’s economy. The public will be the losers as well.

California Senate Bill 1270 is scheduled for a vote on May 23, 2014. It is an unneeded change with unpleasant consequences for the public at large, taxpayers and natural resource industries. Please stop its ascension into law. Time is of the essence and I make myself available to you and your staff for details on this subject.

Sincerely yours,
Michael M. Miller, President

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