Rising price of gold brings hope to local mine
Michael Miller's telephone has been ringing these days more than it has in several years.
As the price of gold recently surged past $800 an ounce, the financial prospects of Miller's Original Sixteen to One gold mine suddenly have shifted from precarious to tantalizing.
The tenacious Miller, president and director of the Allegheny-based gold mine corporation, has survived through a long spell of meager finds in his mining operations, a fatal mining accident that spurred a lengthy legal battle, the death of his corporate lawyer and close friend, and constant struggles to find enough work and capital to keep his miners going.
But with gold's steep spike since September - blasting from $650 to beyond $800 an ounce last week - prospects for America's oldest continuously operating gold mine company are starting to glitter.
"The trend is upwards, though there may be fluctuations," Miller said Thursday.
He is negotiating with Southern California investors and three parties in London, he said.
"I'm offering an opportunity to investors to purchase 10 percent of our corporation for $5 million," Miller said.
If a partnership works out, Miller plans to expand mining activity and increase his workforce from 12 to about 35 miners, he said.
The price of gold has steadily risen since 2000, when it closed for the year at about $275 per ounce. Gold closed at $832.50 an ounce on Nov. 9, and this week approached the record high of $850 set in January 1980.
Though the price decreased to below $800 on Thursday, experts said the value of the yellow metal could go higher in the near future.
"The physical demand for gold is increasing right now because of international politics," Miller said.
A sagging dollar and growing prosperity in China and India have stoked demand for gold; more than two-thirds of that demand is for jewelry, experts said.
"The principle of supply and demand is encouraging the price to rise," as more people around the world want to buy gold, Miller said.
Gold is a desirable asset because it is very private, liquid and not subject to physical depreciation, he added.
The Original Sixteen to One Mine Inc. has an average annual revenue of $1 million, Miller said.
The corporation consists of about a dozen gold mines in Sierra and Trinity counties. The Sixteen to One Mine is the only one in operation, Miller added.
"Our mines have produced more than 2 million ounces of gold since 1898," he said.
By Soumitro Sen, email@example.com