The annual shareholders' meeting took place as scheduled on June 12, 1993. Charles I. Brown, Leland H. Erdahl, Richard C. Sorlien and I were re-elected as directors and Perry-Smith & Company was re-appointed as auditors for the coming year. The number of shares voted were 2,980,060, 86% of the Company's total shares.
Purchase of Company Stock
When the Original Sixteen to One Mine, inc. bought out the interests of its leaseholder, Royal Gold, Inc. in 1991, a part of the purchase price was the issuance of 50,000 shares of our stock, which the Company could have been required to purchase for $100,000. On May 31, 1993, we purchased this block of stock for $72,000 ($1.45 per share). By retiring this stock to our treasury account, we have increased the percentage of ownership in the Company represented by each share and reduced the shares outstanding.
At the directors' meeting immediately preceding the shareholders' meeting, we reviewed the following projects, each of which is compatible with our current activities at the Sixteen to One. No project will be undertaken unless management determines that: 1). The proposed activity will not weaken our mining and development efforts at the Sixteen to One; and 2). The project has a good chance of generating additional revenues to support those efforts.
1. Locate a joint venture partner to finance development of the known veins on our northern properties in the Forest Mining District, which properties are contiguous with the Alleghany mining District and have been viewed historically as area with high-untapped potential for gold production.
2. Initiate a more formal campaign to sell gold in specimens and medallions, including preparation of a brochure with color photographs.
3. Examine mining properties in North California for joint venture or acquisition. We are reviewing underground gold deposits with low acquisition cost, short start-up times and good potential for production as shown by exploration with our technology.
4. Communicate more fully with financial professionals the Company's assets and stature. Analysts tend to categorize gold stocks in three tiers - the "majors", the "juniors" and "penny" socks. The "Majors" produce hundreds of thousands of ounces of gold annually. "Pennies" tend to be focused on exploration rather than production, and attract investors who are willing to accept an extremely high degree of risk.
What separates us from the pennies is assets in the ground, proven production, demonstrated management abilities and controlled costs. Recognition of our junior status by the investment industry should expand our current investment base, which would increase the stock's value and liquidity.
5. Research and develop sales of our mining by-products. We already sell a limited amount of Sixteen to One waste rock for use in construction roads. We think our mill sand, which is mineral rich, holds moisture, and enhances friction, might be suitable for construction, cosmetics (face scrub ingredient) and agriculture (soil mineral replenishment).
Because many of you tell us you have a difficult time following our stock in your local newspapers, we will try to keep you updated on a quarterly basis. The charts accompanying this newsletter represent our monthly stock prices and trading volume from January 1992 through May 1993. The peak price in June 1992 represents the height of international media blitz resulting from our first discoveries with metal detectors last spring.
Michael M. Miller