ALLEGHANY — Michael Miller, the quixotic president of the Original Sixteen to One Mine, is looking at his next — and perhaps last — golden opportunity to strike it rich.
Miller is convinced a large pocket of gold, perhaps the largest in the mine’s history, can be found deep in the Red Star mine north of the existing mine.
“I’m absolutely, 100 percent confident that gold is there,” he said. “This shaft could be the working shaft for the next 100 years.”
The largest pocket of gold found in the Sixteen to One was 83,000 ounces near the Tightner Shaft. Geological studies and other evidence suggest to Miller that an even larger pocket may exist to the north of the Tightner — one that could be worth upward of $35 million at current gold prices.
A small slab of quartz that is sold from the Original Sixteen to One Mine in Alleghany.
Now all Miller needs to go with his unshakable confidence is $3.5 million to drill the shaft and find the gold. That’s a tall order for a man who recently said, “I’m running a broke company.”
But if there’s one thing Miller has in abundance, it’s optimism, a trait that has helped buoy him since he gained control of a property in 1984 that had a non-performing lease, no money, was three years delinquent in its taxes, and had not been audited in 40 years.
Since then, Miller has struggled to make a living in an industry where the product can be elusive and the price is always fluctuating.
Contract miners currently work the vein, splitting what they find with the company. The mine’s only steady source of income is jewelry and gold slab sold to jewelers.
“You have to be optimistic to be a gold miner, but you have to be realistic, too,” Miller said. “If I can’t make this work, I should rethink what I’m doing.”
Certainly, there are more profitable ways for Miller to make a living. The mine made a profit of $399,863 in 2004, slightly more than the $360,000 it lost in the two previous years. Miller hasn’t taken a salary in three years.
“Financially, I could have taken a different path,” he said. “I’ve just chosen to be a miner and produce something. … There’s so much fun when you get into a pocket of gold.”
Miller is considering mortgaging or selling off some of the mine’s most valuable assets to raise the money by March, when he wants to start digging. “What I’ve learned is don’t start a project if you can’t finish it,” he said. “I’ve done that too many times.”
He estimates it will cost $200,000 a month for 10 months to sink a new shaft, create 1,000 feet of drift, and develop drainage, ventilation and a secondary escape route at the 250-foot level.
The mine’s board of directors has authorized Miller to sell the company’s Brown Bear mine in Trinity County, which he believes is worth $6.5 million.
“I really don’t want to sell it,” he said, so he’s looking for a developer who is willing to put down $2.5 million for the right to build a resort and golf course on the property near Lewiston. The mine is willing carry a $4 million note at no interest.
Miller is also considering selling the mine’s gold collection, meticulously assembled over several years and valued at $2.2 million.
The death of a miner in 2000 and subsequent legal actions have made it difficult for Miller to find investors for the Red Star shaft. He and a manager were charged with manslaughter in connection with the death, a charge that was eventually dismissed.
Miller has since sued the California District Attorneys Association for seeking the criminal charges, claiming he and the mine were damaged by “malicious, questionable and unlawful activities of the CDAA.”
A hearing on the suit, which seeks upwards of $25 million in damages, is scheduled for Sept. 15 in Superior Court in Downieville.
The Original Sixteen to One was also cited for two violations by the Mine Safety and Health Administration in the miner’s death, and Miller is still challenging the $32,000 in fines.
But Miller vows to fight on, and people who know him doubt Miller will call it quits if he fails to raise the $3.5 million by his self-imposed deadline.
“There is a little bit of stubbornness in me,” he said. “I just really like it. I like my work so much.”
To contact staff writer George Boardman, e-mail email@example.com or call 477-4236.
About the name
The Original Sixteen to One Mine’s name dates back to a centuries-old ratio for the value of silver to gold (meaning that 16 ounces of silver equal one ounce of gold). This ratio was used by the United States until 1873.
In 1896, presidential candidate William Jennings Bryan advocated a return to the ration in his famous “Cross of Gold” speech. He felt coins should be minted from 16 parts silver to one part gold.
That same year, Tom Bradbury discovered the Sixteen to One’s vein of gold. The mine was incorporated under its current name in 1911. The Sixteen to One is the only single-product underground mine still operating in the West.
— The Union staff