Thank you for your strong response at the annual shareholders' meeting. Of the 3,364,241 shares outstanding, we received in proxy or at the meeting 2,951,790. The motions submitted for consideration passed, and the directors were elected for another year.
The most interesting events were the in-depth discussion about finances, growth and development and the tour of the mine, mill and gold display. We poured gold bars twice, which is a thrilling event no matter how many times you see it. Shareholders bought specimens, T-shirts, and our newly designed mine bars. The bars are cast in Sixteen to One native gold in 1 ounce, 1/2 ounce and 1/4 ounce sizes. They come with or without a bale for use as earrings or as a pendant. You can purchase the mine bars from Tom Woodfin. His number at the mine is (530) 287-3540.
The primary underground activity this summer centered around the new 2483 winze. After eight months of preparation, the crew began cycling (the drill-blast-muck sequence) on a regular basis this week. The winze will be excavated about 375 feet below the 2400 level. This represents the first new development for the Company since 1965, when the Company drove a tunnel 250 feet into the Red Star Mine. It is too early to predict how long it will take to complete the project; however, it will not be completed this calendar year.
Way out on the 1500' level to the north, another crew has been successfully mining gold from the Red Star Mine. The crew has mined about 200 ounces from this area. We are currently evaluating how to expediently pursue the trail of gold that has been identified. This may be our second developmental heading. The area was identified as a mineralized zone in 1965. It has been a long standing target for the Company. In 1965 the Company president, Walter A. Stinson, concluded in the final report to the U.S. Department of Interior the following:
"While gold values were found in the drift and just above in the small 1586 stope, the average value of $7.41 per ton does not constitute ore. However, the fact that as the quartz pinched out along the strike where the serpentine forms the footwall, coarse gold continued to be found along the strong vein shear. Inasmuch as the quartz lense pitches gently towards the north, it is very possible that extensive quartz exists along the vein below the 1500' level. The fact that gold exists in the gouge is a strong indication that gold values will be found in the quartz below. In the drift and slightly above, about $10,000(1) in high grade gold was found just before the quartz began to pinch northwesterly against the serpentine footwall. This again indicates the existence of further gold values below the level. No ore reserves exist as such.
It is the consensus of our opinion that the exploration project proved beyond a reasonable doubt that the 'North Orebody' of the Sixteen to One Mine persists below the 1500' level."
It may seem odd to the casual reader who attempts to analyze our gold mining potential that we value a thirty year old report; however, when the crew completed clearing the 1500' level this year, the conditions we found are precisely the same as those described in Walter Stinson's report. Nothing has changed. "No ore reserves exist as such." Our metal detectors are humming along the ten feet of freshly broken rock at the working face, and the crew will continue to mine this area, evaluating the merits of their work on a day to day basis.
Perhaps the most important thing for your consideration is the enclosed outline ofthe "Current Shareholder of Record Stock Purchase Plan." This concept was raised by a shareholder at the 1993, annual meeting. His interest was, "How can a shareholder acquire small volumes of stock and avoid or minimize the broker's commission?" Here's what we came up with. Please call John Hess at the mine if you have questions (916) 287-3348.
You will be hearing from me again in the near future about many other events and issues in progress with the Company and the mine.
(1) This value is reflected at $35 per ounce prices.