Seventy-five shareholders, guests and employees attended the annual meeting in Alleghany last Saturday. Proxies submitted totaled 1,659,879. Directors Charles I. brown, Willard P. Fuller, Jr., Michael M. Miller and Richard C. Sorlien were re-elected to serve the 1991-92 year. They in turn were authorized to appoint a fifth director.
What is happening in Alleghany?
On June 3, 1991, the company completed the Mine Termination and Asset purchase Agreement with Kanaka Creek Joint Venture (KCJV). The company paid KCJV $200,000 cash, 50,000 shares of Original Sixteen to One Mine stock, and assumed an unpaid local property tax bill of $31,500. The company received all of the equipment, supplies and parts at the mine site. In addition the company received all of the mine data generated over the past six years by KCJV and all of the permits required to operate the mine. The mill was excluded from the purchase; however, the company has the right to purchase the mill.
Where did the money come from to execute the purchase?
To meet what the board of directors believed was a valuable corporate opportunity; the directors authorized a private placement of stock not to exceed $600,000. A $300,000 purchase was made by an existing shareholder, which leaves room for an additional $300,000. Shareholders and guests were invited to contact me if interested in participating in the balance of the financial program.
What are the short-term objectives of the company?
When KCJV ceased its underground mining, it was mining in two zones of gold ore. High-grade gold and mill rock were found on the 1500 level and the 2200 level. These targets exist today for us to mine. The short-term intent of the company is to mine gold as quickly and efficiently as possible. Over $10 million have been spent mining and rehabilitating the Sixteen to One Mine during the past eight years by lessees. Gold production during this period exceeded $5 million. Our company expects to reap the benefits of the difficult task of opening an abandoned mine performed by past lessees.
How will the company implement its short-term goal?
One June 24, 1991, a meeting was held at the mine. Ten men were invited to fill the following positions: Underground Foreman, Lead Miner, Miner, Nipper or Trammer, Outside Man, and Trainee. A program of reduced pay and participation in a bonus pool determined by gold production was presented. By noon an agreement was reached and the men went underground to work. They put in a round (advanced the headings) in the 1500 level and 2200 level. By June 26, 1991, mill rock was hoisted from the mine. The Sixteen to One is now operating with a thirteen-man crew and breaking rock in three headings.
What about the future?
An underground mine lives and profits by means of
developing mineralized blocks of ground.
The Original Sixteen to One Mine now has operational control over all of its mining claims, something it has not had for the past twenty-five years. Good targets exist to the south, under the Rainbow Mine. Good targets exists in depth, beyond the 2400 level…and the Red Star project remains our brightest block of un-mined ground for development.
Michael M. Miller