It takes a variety of ingredients to sustain a Company like ours. My first praise is always for the mine, a gold producing constancy cast in stone. Our gold deposit in the Alleghany Mining District is unrivaled world wide for its rich concentrations and beautiful gold. Fortunately, over its 100 years of production, visionaries have collected and displayed a variety of specimens. During the past sixteen years, I have broadened our collection to include carvings, other minerals, gold from crystal vugs to solid veins and, of course, our jewelry. The 'Whopper', as pictured in the National Geographic magazine (March 2000 issue) remains a favorite. I sense a 'Double Whopper' still remains to be uncovered in the Sixteen to One.
I also acknowledge the care, love, determination and importance of those who have worked for and managed the mine over its 105-year history. With the announced closure of the Homestake Mine in South Dakota this year, the Sixteen to One becomes the oldest operating gold mine in North America and perhaps the world. From past accounts of the men and women who toiled for the mine to those I have known over the last twenty-five years, the human will to overcome tough natural obstacles and man-made obstructions is an asset not found on financial statements. Many of you have also become staunch defenders and proactive advocates of the mine and Company. Please use this year's Annual Meeting on June 23, 2001, as an opportunity to stay current with our evolution. Come join us at the mine.
Another rarely mentioned component of the success of our ninety-year old corporate existence is the owners. You and I and many before us recognize the value of our ownership. Up to World War II the owners received dividends as compensation, so it was not too difficult to appreciate their investment. Over the years, heirs were told to never sell their stock unless personal duress forced the sale. When I campaigned for shareholder votes in my proxy fight between 1975 and 1983, I heard numerous accounts of the richness of this mine from those recipients and heirs. I grew to believe their stories. I continue to believe that my ownership in OAU affords me and my heirs a benefit not found in other personal assets. Some of you bought into the Company for other admirable reasons such as participating in a worthy cause, being part of living history or just for the joy of kicking around a couple of racks once a year. Some of you are just as determined and stubborn as I am to support, well, call it what you want: the American Dream, a California heritage, the pioneer spirit or a manifesto of freedoms identifiable with gold, gold mines and the Sixteen to One. Some of you also believe, as our new crew and I do, that a really big pocket is close by, and the Company will find a way to sustain itself until it is found. While no one can prove its existence, it is most logically likely to exist. No competent geologist or other mining expert will state that the mine is worked out. Time will allow the truth to be told.
JOIN US IN CELEBRATING A FINANCIALLY PROFITABLE YEAR 2000
Debt decreased by: $156,551
Inventory increased by: $396,102
Net profit was $576,856
Last year's greatest mining disappointment was known as target A or the Wild Card in last year's Annual Report. On July 10, 2000, the target, raising beneath the productive stope from the 1500 foot level, broke into the prior workings. After widening the area with slab rounds and searching the tons of shot quartz, we found no gold. The story could have been completely different. Everything seemed favorable, so we spent ten more months in this location. Say what you want, "We bent our pick" or "It's deep enough", but financially it was a failure.
Our most tantalizing target remains de-watering the 2400, 2700, and 3000 foot levels. We purchased the pumps ($15,000) and the electrical wire and hardware ($32,500). We still need plumbing and miscellaneous supplies before we begin ($11,500). Most of last year's production came from small blocks of quartz near previous high-grade pockets. One location above the 800 foot level yielded a unique appealing and rare stone we call Imperial Quartz. We continue to mine in this area.
There was an accident underground in the fall that took the life of one of our miners. I know many of you have talked with Sixteen to One miners and may remember Mark Fussell, a 37-year-old lead miner who died at the mine on November 6, 2000. This was the first death at the mine in over 50 years, so none of us had experienced this tragedy. Recently, we returned to Mark's heading to continue mining to get the gold he was after when he died.
Our operation has been significantly and harmfully impacted by federal agents working under the executive branch of labor. All of us have incurred a financial loss. The MSHA agency demonstrated reckless disregard for our rights, their safety as well as our own safety. Congress declared in 1977, that the first priority and concern of all in the mining industry must be the health and safety of its most precious resource ~ the miner. MSHA became an out of control, money sucking, power seeking policeman. The agency forgot the law and began to believe its regulations were above and over the law. I will explain how we intend to proceed at he June meeting.
On May 18, 2001, I can readily identify the obstacles ahead and realize that we will push through them successfully. Our failure is bright. As I wrote to our employees in February, "Be prepared to make a difference, because you do."
Michael M. Miller