March 5, 2021 

Gold Enters Major Bull Market


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02/24/2012  10:09AM

Strike while the market’s HOT!! The strong expectation that the Bull Market will continue to make gold prices rise has been very successfully exploited by yet another Canadian gold company. Their Sales Pitch: Buy stock today, take losses today, and get richer tomorrow as gold continues to rise!

"San Gold announces $15.0 million private placement."

This is another Canadian company placing tax flow-through stock through a syndicate. These shares are not available for sale in the US, only in Canada.

San Gold calls itself a “New Exploration and Production” company. In 2011 they reported revenue of $114M CD but reported a net loss before tax of $9.3M CD due to $25M CD exploration expense, $79M CD operation expense (28% of which was non cash expense Dep and Amort) and $17.5M CD Admin, about half of which was paid in stock.

BUT in terms of HARD CASH they Actually Made Money: $114 rev - $59 ops - $24.8 explor – $9 admin = $21.2MCD. (A more careful analysis would yield their reported cash increase of $17.2M CD) Besides making cash, they sold flow-through stock. Not bad for a year’s work. Though the mining and tax laws in Canada are much more favorable than the US, San Gold is an example of what clever finance and tax law can do. San Gold, by having actual revenue, is perhaps more similar to the Original Sixteen than Pertium.

02/23/2012  12:37PM

Mike, I’m glad to help!

I agree with you about the capitalization in Note 4. I have some other Pretium financials and I am working my way through them to see what they did.

I think they call themselves an exploration company and don’t show any revenue from gold or silver for TAX reasons. This private placement was a bought deal constructed by a syndicate of underwriters led by Salman Partners Inc. The shares offered were “flow-through” common shares which allow the losses generated by Pretium to flow through to the investors filing taxes in Canada. Thus no revenue from sales.

“The gross proceeds of the Offering will be used during the 2012 exploration program to incur eligible Canadian Exploration Expenses (“CEE”) that will qualify as “flow through mining expenditures”.

As you said, Canadian taxes are different than in the US. However, the US tax code has some similar mechanisms for flowing losses through to investors (both individual and corporate). Though they exist, “tax shelters” are more regulated in this country. This makes them more difficult to create, but not impossible. But similar to the Pretium offering the US code allows flow-throughs mostly for investment partnerships and Subchapter S Corps.

One thing that Pretium did do to help their offering was to hire P & E Mining Consultants Inc. to produce a humongous (I mean 170 pages) “Technical Report and Resource Estimate” on the Brucejack Project. I have that if you want a copy. The timing of this report, “Effective Date: November 28, 2011; Signing Date: January 12, 2012”, sounds a little suspicious. Apparently they needed a “Sales Document” to make the deal work.

The Tax Code is not my expertise, but I am an excellent researcher. I’m happy to help the Original Sixteen. It’s an “Excellent Company” with a great history. My researching also helps me to better understand what to do with my Golden Gate Claim. And I agree that to really understand the Original Sixteen and gold mining in California requires a visit to Alleghany. I’m planning to attend the ICMJ Gold Prospecting and Mining Summit in Placerville, 11-15 May. I would enjoy meeting you and learning more about the Sixteen.
 By Michael Miller

02/20/2012  4:33PM

Thanks REAP for alerting me to Pretivm.

Robert Quarterman, president of Pretivm Resources has an interesting background in finance and increasing shareholder value. Silver Standard, a small company which Mr. Quarterman successfully exploited, had similarities to Original Sixteen to One Mine, Inc. Junior mining companies must be evaluated on their own. They do fall into classifications, when studied; however, their differences are most important to recognize and discuss.

In reading Pretivm’s financials, Note 4, the huge increases in capitalization puzzle me. Canada established accounting rules that differ from American. The treatments of “reserves” differ by definition before assigning them an asset value accounting on a balance sheet as well. Pretivm calls itself an exploration company. Most juniors are exploration entities.

Tax treatment is more advantageous for metal mining in Canada than the United States. There are very few US gold mining corporations operating anywhere. Having said all this, our Company can learn from Mr. Quarterman’s financial wizardly ways. Our holdings, current and past operating histories may be considered beyond exploration. Production comes to mind. I noted on the income statement for Pretivm no line item for gold or silver sales.

Over the past three decades, gold stock pundits wrote that the exploration companies (most speculative) were more exciting a gamble than gold producing companies. The belief was based on the notion that a big company would take over a small exploration project, thereby rewarding the exploration company shareholders a good uptick in stock price. They all chimed in that once a gold company begins producing gold the stock luster fades. I disagree!

Our properties are difficult to analyze. Our company is an anomaly. It is so strange an occurrence in junior gold companies that outsiders frequently don’t know the questions to ask. How can anyone with a feel for gold lose interest in pursuing an investigation! The Sixteen to One should bore no serious gold advocate or person desiring to profit from their accumulated wealth.

This is our immediate goal: expose the money making opportunities to people willing to take a close look and step outside the old conventional box. I need help extending invitations to individuals or companies willing to investigate America’s oldest gold mining company (Original Sixteen to One Mine) in the world’s most proven gold deposit with the least miners employed in their trade. That would be California.

Briefly, following are important facts: the mines are on privately owned property, not federal lands; the infrastructure for mining is in place; great maps and reports exist; corporate profile excellent for growth; knowledgeable people associated with the company; spot price for gold not an issue of importance due to unique demand for Sixteen to One gold; expectation of gold production immediate; motivated management.

Our business plan is to complete a private placement, spend the money wisely, evaluate results, reactivate stock market identity, prepare our first public offering, spend the proceeds wisely, declare a gold dividend, and evaluate California’s gold mining opportunities. The only way to fully disclose Original Sixteen to One Mine Inc. and its mines requires a visit to Alleghany. Your help is appreciated.

02/18/2012  2:23PM


I understand your point about being able to locate the pockets of gold in the veins before any investment is possible. I am searching some other technologies developed by non gold mining companies that might be useful in combination with the GPR data.

But, I want to add this post to show that private placement is becoming a more common form of finance in the gold industry. This is also a mechanism that can create a public market on the Exchange. Pretivm did increse its gold reserve estimates as a necessary first step, then sought financing. I am searching to learn what Pretivm used to determine these reserves.


Pretivm Closes Bought Private Placement of Flow-Through Shares
MARKETWIRE - Mining and Metals
Pretium Resources Inc. (TSX:PVG)(NYSE:PVG) ("Pretivm" or the "Company") is pleased to announce that it has closed its private placement of 1,250,000 flow-through common shares ("Flow-Through Shares") of Pretivm at a price of $18.50 per Flow-Through Share for aggregate gross proceeds of $23,125,000 (the "Offering").
 By martin newkom

02/16/2012  2:09PM

The 16 to 1 has a very famous
name, albeit historic. Think about
setting up a purveyor system and
sell the mines gold outright like
these advertisors claim they are
doing. There must be something in
it or they wouldn't be on the
"tube" hawking their wares. You
might eliminate a middleman or
 By martin newkom

02/16/2012  2:08PM

The 16 to 1 has a very famous
name, albeit historic. Think about
setting up a purveyor system and
sell the mines gold outright like
these advertisors claim they are
doing. There must be something in
it or they wouldn't be on the
"tube" hawking their wares. You
might eliminate a middleman or
 By Michael Miller

02/16/2012  10:41AM

I am prepared for a phone meeting at 11am with a lawyer consultant for MSHA regarding some citations issues on May 10 2011; so I have a moment to take up the conservation in this topic.

A past director told me years ago his answer when people asked him about the future price of gold. (He was a former president of Ranchers, a successful early public company that merged into Hecla.) By early, I mean those companies flourishing once the federal restrictions on price and ownership in 1975. Lee answers, “Many factors affect the price of gold, but the one point I can make with full confidence is that the price will either go up or go down.” This truth comes from a senior mining executive who had high- level experiences in the industry. I adopted his wisdom. It is unarguable.

What intrigues me now about the comments below are attempts to bring forth a positive new approach to gold investment and with the idea of merging two technologies. REAP is on to something. New technologies led to Nevada’s fantastic gold revival, which began in the 1960’s. Electronic gold metal detectors revived the Sixteen to One in the 1990’s. Smaller, faster, cheaper, equipment development has occurred that remains untested at the Sixteen to One. People unfamiliar with this world class gold deposit cannot imagine the affect technology brings to the Sixteen to One. when gold exists in such unusual concentrations, even primitive electronic equipment works. It is a proven technology for locating, mining and processing gold. (This technology is useless in low-grade deposits.) Yes, a technical upgrade will prove successful.

So what do we do? Where shall we concentrate our efforts? Where are we? What will make us obscenely profitable? How do we attract whatever is needed to prosper? How can or what should a person with interests in placing some capital in gold evaluate gold and proceed to invest in the current market? I have serious answers to these question but time draws short. Would some of you offer us your thoughts?

02/16/2012  7:38AM


Here is 2011 Gold Report. Global demand for gold in 2011 rose to 4,067.1 tonnes (t) worth an estimated US$205.5 billion - the first time that global demand has exceeded US$200 billion and the highest tonnage level since 1997.

The main driver for this increase was the investment sector where annual demand was 1,640.7t up 5% on the previous record set in 2010 and with a value of US$82.9 billion.

The pre-eminent markets for investment demand in 2011 were India, China and Europe. Central banks continued the trend established in 2010 of being net buyers of gold.

I understand your point about "seeing" the gold through the quartz and slate. GPR sounds promising but it may be too noisy. Maybe it could be combined with another technology such as sonic mapping in a 2 stage process. First, sonic could map the location of quartz veins, and then GPR could focus on pockets within the already mapped quartz. This is just a thought, but often using 2 technologies is better to focus on the target. For example, the US Air Force uses satellite IR combined with over the horizon radar to detect rocket launches.
 By bluejay

02/15/2012  11:35AM

Gold $1724.80 UP $3.70
Silver $33.28 OFF $0.30
US Dollar 79.57 UP 0.16


The crossing of the faster MACD divergence moving average line to the upside(chart linked below) is suggesting that short term dollar strength is upon us.
 By bluejay

02/13/2012  10:49PM


I saw the report from India concerning their cultural beliefs in gold. There is absolutely no way of breaking this trend. Thanks for the thought.

Concerning other mining companies taking an equity interest in the company, being in California is a gigantic negative. On the positive side, if we can gain access to some technology that sees through the quartz and slate to illuminate gold's hiding places, well, that's a different story that prospective partners would be quite interested in.


I think someday officials won't have a choice in accepting gold in some form of direct backing but not specifically for the dollar as we know it. It will be a new form of currency that I have been hearing about for years which is the vaults of banks across the country awaiting from the word from above. Power and greed die hard.

Gold $1717.40 DOWN $4.50
Silver $33.54 DOWN $0.18

Gold, especially, looks like it's ready to roll over and drift or spike lower. I would be happy to be wrong. If the $1667 level fails quickly, I can see some panic selling. Aside from subjectively looking at the daily and weekly charts, the worse case scenario could drop the metal into the low $1200's over a time period, perhaps, of a few months or a matter of weeks. Just fast enough to shake the metals from the inexperienced into the hands of the manipulators and professionals. It's an old story. Don't be duped into selling if a tremor hits.

I know this is an extreme thought for most everyone to envision but one must be intuitively creative for survival. It just looks like the right time to flush out the gold market which has to happen from time to time during any bull market. The most important thing, whether it happens or not is, to be mentally prepared and have your own plan in case of a short term flash fire.

The upcoming years will be kind to gold following any scary reaction which will pale in the face of $1000 intermediate advances to follow. The key here is not to get shaken out of your long term precious metal positions.

Although this estimate of gold's potential to flip over and slide is contrary to some pretty well established people in the industry who remain bullish, I guess WE'LL just have to wait and SEE.

Personally, I have reduced my exposure by 10%.

02/13/2012  7:53AM

Bluejay, I think you will enjoy this vidio. It is a clip from CBS 60 Minutes.

The clip is a very colorful way of showing that the Bull Market will continue because there are NO BEARS in India.

Also, have you given any thought about a Private Placement of stock with mining companies?
 By David I

02/04/2012  10:23AM

There is away to to bring back the dollar to the gold standard. This could easily be done as documenting a gold reserve trade document in value based on the gold or slver weight certificate. This the would fluctuate in value by comparing It to the world spot value of gold or silver.
 By bluejay

01/28/2012  12:28PM

Questionable Status To The Dollar Remaining The World's Reserve Currency.

An excerpt from today's International Forecaster:

Earlier this week, DEBKAfile published an article that, if true, may be the single most important story of the past year.

The headline reads, “India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned." Oil and gold
markets must be stunned. The U.S. government must be stunned. Those who believe in the value of the dollar must be stunned. The world’s central bankers and New World Order (both of which are built on fiat currencies) must be stunned.

It’s one thing for the nations of the world (to) pay fiat rubles, fiat rupees or fiat Yuan (rather than fiat dollars) for crude oil. Such payments hurt the fiat dollar’s illusory value, but leave the power of fiat currencies and central banks largely untouched.

Paying for crude oil with gold rather than fiat dollars, attacks all fiat currencies and not only threatens to terminate the dollar’s role as World Reserve Currency, but threatens to prevent any new fiat currency from taking its place. From the perspective of the U.S. and New World Order, paying gold for crude oil must be deemed an act of war.

According to the DEBKAfile report,

“India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile’s intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.”

1 million barrels at $100/barrel = $100 million per day. At current prices, we’re talking almost 60 thousand ounces of gold per day = roughly 2 tons of gold per day. The U.S. and London commodities markets may soon see an increased daily demand for 2 tons of physical gold.
The sale of Iranian oil for gold is a mortal blow to any plans by the globalists to replace the fiat dollar with some other “new and improved” fiat currency.

If India and China are allowed to start paying their debts with gold, the next “world reserve currency” could only be gold. No more fiat currencies. No more “spinning money (fiat currency) out of thin air”. No more big governments. No more central bankers.

If an agreement to pay Iran 2 tons a day in gold for oil is allowed to stand, the dollar’s demise will be accelerated and the New World Order will be virtually destroyed.
 By bluejay

01/27/2012  6:13PM

Gold $1737.30 UP $16.80
Silver $33.99 UP $ 0.52

Not a bad day.
 By bluejay

01/25/2012  6:05PM

Gold $1707.90 UP $41.50
Silver $33.01 UP $ 0.96

The World's rich moved more of their idle money into the precious metals today. A dovish FOMC statement concerning interest rates along with the fact that large oil importers are electing to begin paying for their crude originating in the Mid-East by currencies other than dollars ignited gold while the Dollar Index sold off.
 By bluejay

01/18/2012  9:47AM

REAP - Thanks for the information.

Gold $1656.30 UP $4.70
Silver $30.48 UP $0.42

Gold is continuing to repair suspected damage when it sold under its 200 day average some past weeks ago. In past years each time this happened it was an excellent time to load up on gold as well as a scary time for holders of the metal. Remaining above its current average at 1634.30 only invigorates gold to climb higher.

Silver has been quiet lately but things appear to be changing with its recent improved relative strength against the senior metal. Silver appears ready to push past the 30 level with conviction as it's in the process of completing a head and shoulders reversal pattern with a neckline at roughly, 30 dollars.

Both Jim Sinclair and Martin Armstrong concur that a new high in gold will be established this year. Jim thinks 2100 while Martin hasn't yet put a price on it.
Looking out further down the road, Mr. Armstrong believes that the following years of 2013 and 2014 could, overall, be lower as the gold readies for its big push into the heavens beginning in late 2014 to early 2015.

Although gold shares are considered by many to be under-valued, the naked shorts are always ready to prey on certain ones that are either low activity explorers or some some of the seniors that fail to meet market expectations.

Regulators continue to look the other way concerning investment banks and hedge funds pulverizing many of the low priced related sector stocks with their potent naked short selling schemes. This is mainly allowed to build up the balance sheets of the major New York City banks at the public's expense. The bottom line is, the public has and will continue to be bilked. IMO, the only one that can stop this, if elected, is Ron Paul. Otherwise, if someone else gets in, it will be business as usual, regardless of what comes out of their pie holes proceeding elections.

I would venture to guess that billions of dollars have already been stolen from shareholders via the fraud of permitting naked short selling.

01/17/2012  1:25PM

Bluejay, here's some very interesting statistics reported by Price Waterhouse PwC:

Eighty percent of gold company executives expect gold to continue rising in 2012 and a majority says it will peak at $2,000, according to the results of a new survey by PwC.

PwC’s 2012 Gold Price Report surveyed companies representing 26.5 million ounces of gold mined in 2011, and 37.75 million ounces to be mined in 2012.


PwC calculates a total of 544 gold acquisitions were made in 2011 at an approximate value of $11.2 billion. As of November 30th, the M&A volume increased 12.6% from the same period last year but the value dropped by 38.4%.

This M&A activity might suggest that a Private Placement of stock with some mining companies could be a viable way to go.

 By bluejay

01/09/2012  11:15PM

Gold $1620.20 UP $9.20
Silver $29.13 UP $0.08

Interesting gold facts:
 By bluejay

01/07/2012  9:49AM

Keeping your eye on the ball

From Bob Chapman:

) History. For 30 centuries, gold and silver have held the monopoly as the only real moneys and “World Reserve Currencies”.
During that time, there’ve been numerous attempts to install fiat monetary systems. But every fiat currency in the past 3,000 years has collapsed—usually within 30 to 60 years from their inception. The fiat dollar is already 41 years old. If history repeats itself, the fiat dollar must also collapse. Until that collapse, the price of gold denominated in fiat dollars must rise.
 By bluejay

01/04/2012  4:32PM

The following are excerps from the article "Gold To Be Bold In 2012 With Its Own Contracting Fibonacci Spiral" spoken by David Petch on January 3, 2012:

Adding together the sum of parts( of the Contracting Fibonacci Spiral), the price of gold will move up in price in 2013, 2016, 2018, 2019 and 2020, with each subsequent leg moving less in percentage terms than the prior move.

Gold advanced 4 foldish from 1999 until 2008 ($252/ounce to $1046/ounce). This suggests that gold should top out below $4000/ounce over the course of the next year (Personally, the highest I think it can reach is $3074/ounce). The price of gold is likely to top out near $7-10,000/ounce by 2020, but each advance will be lower in percentage terms of the former leg.

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