I wrote this 10-Q as a factual and non-opinionated filing. It is a public document designed for shareholders and non-shareholders alike. This letter is private because it contains my opinions.
In consort, together we must draw conclusions, opinions, and conceptions regarding our company. The Company awoke from a twenty-year hiatus in 1974. Competent old men had protected its assets during a gloomy time for gold profits. Mining activity began shortly after private gold purchases by Americans were no longer forbidden (1975). Gold has been mined from the Company's claims almost without interruption since 1896. In 1983 the Company once again benefited from its bounty of gold. By 1988 production royalties exceeded minimum payments by lessee (payments received fro the opportunity to mine our gold).
In 1987 the Company acquired the Osceola Mine lease and upgraded underground activities. For twenty-one months a small crew worked to create a whole new mining opportunity by combing the Osceola and Red Star Mine. By April the level of expenses endangered maintaining the cash reserve established by the board of directors. Advancing the Red Star's development was curtailed on June 1, 1989. Two thirds of the employees were laid off. Only projects in progress have received attention since then. The Company now has three employees and a reduced sphere of activities. It will remain in this mode until sufficient funds are in hand to properly resume underground activities.
Perceptions of mining are clouded by everyone's viewpoint. Mine has been influenced by working within the roots of the gold mining industry for fifteen years. It is possible to express optimistic and pessimistic opinions about the posture of Original Sixteen to One at this moment. Operations at Red Star and KCJV's near the Rainbow have reached a point where good gold targets are at hand. Both operations are under financial stress. All of us are frustrated. The claims may remain idle for six months. Drilling, blasting and mucking may begin next month. Investment capital is essential to nudge the operations into profitable production. It will happen. Your continuing support is needed during this time of uncertainty.
Michael Meister Miller