October 16, 2018 

Clips from Alleghany


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12/22/2007  8:20PM

There was another bit of information Scoop lifted. This was from Rae’s desk. It’s a delightful accounting of the past year. Scoop may loose his press pass but here is another bit of inside info from the mine that went out to present and former directors:

I hope this message finds you all well and enjoying time with friends and family over the holidays.

Remember when I used to send regular updates as to the happenings at the mine?

I am going to try and start doing that again. Mike has requested it. Looking back at the old updates provides a unique look at the “goings on” here. (Rae’s perspective unedited)

The most exciting news in my mind is a recent offer by a shareholder, who has invested in a Charitable Gift Fund to donate $25,000 to $50,000 to the museum specifically to purchase specimens from the Sixteen to One to become a permanent part of the museum collection. He donated $30,000 earlier in the year for the same purpose and we appealed to the shareholders for help and managed to raise another almost $4,000 from 61 shareholders. This time he wants a matching pledge before he will donate funds. Technically he can recommend a donation from the fund and the fund has the authority to deny or act upon his recommendations. I have attached three documents to this e-mail that I mailed to each of you today. I also mailed them to all the lifetime members of the museum and a few other shareholders. If you know of ANYBODY who might need a tax-write off and you feel comfortable sending me his or her address please do so. It is too bad I couldn’t get this out sooner in the year, however; no expiration date is on his offer. The rush is from the Sixteen to One as selling the specimens is a high priority.

This update might be a little awkward because I am not sure what you do and do not know. I am going to assume you know very little even though you probably know more.

As all of you know the larger the work area the greater the overhead expense, especially with second exit requirements. The areas worked have been primarily off of the 800 foot-level and the 1,000-foot level. In hindsight perhaps we would have mined differently (little gold). With the cash flow what it has been, short term targets have been the goal, but none of them paid off and some became more “long-term” than “short-term” like the 1,000 foot level rehab which was ultimately abandoned.

The water is still being held at the 1,500-foot level. The hoist was officially taken out of service in late summer. However it can still be used to hoist equipment. A transformer on it blew out last spring and it took quite some doing to get a replacement for it. The thing was an antique. We now have the replacement but it has not been installed yet.

Due to a lack of cash the first week of November all the miners were laid off. They were offered an option of working as independent contractors for a percentage of gold on a 30-day contract. David and I chose to take a trip to Montana to work on our projects there at this time. The 30-day contract turned out to be a joke. The men worked three days a week and left early quite often. At the end of the 30 days nobody came to talk to Mike about renewing. I got back just before the 30 days ended. A decision was made to shut down for the Holidays and regroup in January.

Incidentally two MSHA inspectors showed up the day after the 30 days was up and nobody was working. We told them we thought we had 30 days to notify them of a shutdown. Bruce Allard (one of the inspectors with a long history of butting heads with Mike) said that “no, if there is a change to our legal ID information we have 30 days to report the changes.” In the case of a shutdown the rules just say that we must notify them immediately. We looked up the code and it turns out the code just says “must notify MSHA” with no time specified. Anyway Bruce was not being argumentative. He said if they could just do a partial inspection of the paperwork that would satisfy them. I volunteered to do that with them so we went down to the mine office where the records are kept and everything was good. Bruce said we needed to notify the MSHA field office that we are not operating but are in a “maintenance only” status. According to Bruce if we are in a “maintenance only” status they will still come see us twice a year to verify that nothing has changed. Letters were sent to both MSHA and OSHA notifying them of our shutdown status.

Mike’s son Reid and Chico (a miner who has worked here on and off for about 8 years) have been doing maintenance & cleaning things up. Other than that no mining is taking place at this time. Mike may get another contract started in January and a few miners have expressed interest; however it will be under more controlled circumstances than the last contract deal.

Phone calls come in to the gold sales division everyday for slab. David has been able to scrape up bits and pieces but has to turn most customers away. Mike made a trip to Orocal today with a small batch of slab that will almost get the critical bills paid for December. We are once again playing the game of paying the most critical bills and working out payment plans, etc. with the others.

The remainder of the employees (myself, David and Kyle) was laid off on December 16th. The timing was such to prevent starting another year with the payroll service, as there is no need to keep them now. Kyle Hall (Office assistant for the last almost 3 years) got a job delivering mail for the postal service. She starts on the 29th.

The Worker’s Compensation policy is in good standing. I sent a payment to them today. I will have to call them around the first of the month to see if they will work out a payment plan on our balance due.

The judgment for attorneys was rendered in favor of the CDAA attorneys but in a lesser amount than what they requested. The judgment says “$88,376 for 16 to 1” and $14,012 for Michael Miller. Mike is already mulling over the idea of another appeal. He told me not to book anything until the final Judgment is recorded. (That might not be the right lingo). I remember, I think it is the “Judges Order” that still has to be filed. This will have the final language as to the amount being demanded.

Mike’s priority now is trying to market the specimens to a museum. Of course we wish that our little museum could buy them all but that doesn’t seem doable. A new safe was purchased by Underground Gold Miners Museum and is bolted down. This was done to protect the specimens already purchased.

We got a bit of snow this week, mixed with rain. There is about a foot on the ground. Didn’t warm up today although the skies were clear. Mike got stuck in his driveway but managed to shovel his way out. He was having a computer glitch on his computer at home, which I fixed today. I walked out there on my way the post office. A walk to the post office is a much-appreciated break from sitting at my desk all day.

12/21/2007  9:16PM

The mine is a refrigerator as a result of the past week's weather. Ice sealed the track from the battery charging station to the portal. The maintainence crew had to chip, beat and blast the rail free from the ice. They needed the train for supplies.

Some rocks gave way and smashed the ground support. The steel sets held up in the travelway, so no miners were in danger. Rocks will fall. Miners are always in danger.

Scoop hung out at the office because the staff had propane, so the heat was on. This special office reflects the emphasis of management towards the underground over appearances. Mines should be maintained if there is value.

Mike was out of Alleghany selling gold that David created from inventory. One look at the inventory $$$ paints numbers so fart less than the proven actual $$$ that the gold is sold for. Gold as bullion is easy to buy and sell. The Sixteen gemstone also is easy to sell and at a price above bullion but very hard to buy. Rae was balancing bills. The office watch cats were hanging out so I just lifted a couple of stacks of paper upstairs.( Kyle was in training for the US Post office temporary job she won.)

Here's one of the papers that got Scoop going:

Curiosity and Time on your Hands

Once upon a time I was a Director only of Original Sixteen to One Mine, Inc. I was not an employee or an officer, only a director. The chronology getting there is:

1974 Introduction to the mine. My first trip to find the Sixteen to One mine.
1975 Introduction to the company. First time at corporate office in S.F.
1976 Nominated to Board of Directors at annual meeting. Surprised all directors and officers, lost but recorded strong votes.
1977 The proxy fight is on. Elected in April at S.F. annual meeting. First meeting with all five of the directors and the lawyer I voted out.
1978 Gaining more shareholders’ proxies.
1979 Gathered enough shares to elect three directors and myself. I become the company president. Coup de ta and out as president.
1980 Stew the pot.
1981 Stew the pot
1982 *
1983 Blew the old men out of office and out of the game. Nominated and elected President at annual meeting in Sacramento.

During the time between April 1983 and 2006, I created gold related stuff. This case contains the stuff. Since our belief is that stuff should be offered to buy, it must have a price. All stuff is carefully priced. A few items may seem outlandish, which means you need money as well as time on your hands and curiosity.

I sincerely hope you saw something as special as I.

12/05/2007  2:23PM

Have you ever wondered just how a gold producer sells its gold? Mike did a small transaction today and here is how it was done.

Bars of gold (dore) from milled quartz/gold are mailed via the US Post Office to Metalor, a refiner with facilities in Los Angeles and Massachusetts. Each shipment has a tracking number provided by the refiner. An assay is done and the raw gold is refined into pure gold and pure silver. This can take a week or longer. The Company then gets credited with the melt down amount measured in ounces.

Mike or Rae are authorized to sell the Company’s inventory. Either one calls the refiner in Massachusetts and talks to the trader. He quotes a sell price at that moment and if accepted, sells the ounces. Today’s price received by the Company was $797.70 per ounce. The high today was $806.05 and the low was $791.60.

The money is wired to the Company’s bank. The refiner charges $20 and the bank charges $10. The money is wired in two days; in this case it will be available on Friday.

The workweek ended today for the contract miners. No gold production to report.

The past week was cold and sunny. Monday night a tropical storm moved into the Sierra Nevada. Temperatures climbed to 61 degrees, not bad for December. Climate change may not be an evil fearful evolution for everyone in the world.
 By martin newkom

11/10/2007  11:04AM

Remember what I said previous,
Armand Hammer's head driller
at Occidental Pet. told Dr.
Hammer: Keep drilling, keep
drilling!! Same holds true at
 By Rick

11/09/2007  9:43PM

[Please read the below entry before this!!!]

Ah, to be in the crew....

The contract crew wouldn't still be willing to look unless they knew it could be in there, close by the elusive previous tries.

Hello, out there, investor!

11/09/2007  5:09PM

Hey, your on-site reporter must respond to the down-in-the-dump tone of recent entries.

More unsolicited people called the mine’s office this week with interest and questions about investment than any time during the past ten years. More phone calls and e-mails arrived at the mine’s office this week from people already familiar with the Sixteen to One than anytime in the past month. More people have indicated they are planning a trip to the mine to talk about the gold future of the Sixteen to One than Scoop can remember.

Facts, truth and honest reports about the on-going performance in gold mining or any other venture cannot be a negative, if they are understood by the reader. There are no hangdog faces in Alleghany. Scoop tries to tell it, as it is, not as anything else.

These present operators at the Sixteen to One mine have been mining gold and paying the bills from selling the gold since 1989. Right through a long and documented bear market and other upheavals underground work continued. There are plenty of assets, just no available cash. There are bills to pay and some must wait; but a miner must receive his paycheck every two weeks to survive. It is hard to have most of the tools a miner needs plus a billion dollars of gold targets mapped out and no money to drill the holes but no one is moping around this little village high up in the Sierra Nevada.

The business media is full of the notion of ill liquidity these days. Well, on a smaller scale with certainly less threatening consequences than the financial mortgage situation, the company has a temporary liquidity problem. It’s happened before and none are happy about it.

However, there is a well-conceived plan to eradicate the problem, a plan that has been in development over several years. Too few people know that an extraordinary risk free opportunity to get into gold and be a player exists in Alleghany, California, as gold continues to wow the market place with its upward strength.

Have you read the last Security and Exchange filing for the Company? It can be found on this web site. The company recorded a $32,000 net profit in the 3rd quartet. Black ink beats red ink any time. Most junior companies struggling to get financed or tout their stock have no revenue at all let alone a profit. Most junior companies only offer an exploration dream to entice eager investors. Most are betting that the Gold Sector will repeat the past when small companies with no production or operation were bought out with an offer from a “major” to develop its prospects. Times have changed!

Well, a crew of these elite miners will be back underground on Monday, working to make their dream of riches a reality. It has happened before, about four times since 1992 where contract miners have succeeded to drill into a rich pocket. It may just happen again very soon.
 By Rick

11/09/2007  9:26AM

Bluejay, your point is well taken and true, though. It's just frustrating, yes?

The web-page has endured so much negativity in the last number of years, mostly because the mine hasn't shied away from putting the truth out there. If I were newly aware of the mine and a new visitor to the web-site, I'd scroll down through many headlines and topics that carry with them a curious question: where's the positive news?

The frustrating part is that there is so much positive potential, if only resources were found to mine the richest ore-body in the west.

In the mean time, since whatever legal stuff is "pending" out there, the fact remains that the mine has gold inside, and it sure would be sweet to see it in action.
 By Rick

11/08/2007  8:33PM

Bluejay, I've got to disagree with the part about being unable to draw investors at this point.

If the last perspective on the Forum page has a negative perspective, then they probably turn away. I'm not a billboard for the mine, nor am I a salesman, but Jezz....I'm writing a positive perspective,
"Hey investors, check it out!"

And, along the way, don't get swayed by the negative.

 By bluejay

11/05/2007  4:43PM

It's a sad day for all with gold making 28 year old highs. Unfortunately, we are unable to prove to prospective investors that we "have the goods" and can "deliver."

Maybe, the day for the mine and our plans will have to wait until gold starts moving considerably faster than the inflation rate.
 By martin newkom

11/05/2007  3:24PM

I suggest going to bulletin
board. Mike doesn't like it
but at least the stock gets
out into a "main stream" type
of circulation. The First
Northern Bank (FNRN:BB) originally the Bank of Dixon,CA is there and it seems to be doing very well for itself.
 By Rick

11/05/2007  9:37AM

Mike, and everyone one else, hasn't this happened before, and yet the mine survives just like the potential?

Yes. Given the mounting value of gold and the fact that the Original Sixteen to One Mine has gold within, untapped and yet ellusive, the time is ripe for the ideal investors to recognize the potential. How can it be ignored?

Ironic, you bet. Ian's last 12 month push is not in vain...consider the work done, not the lack of result (I know I'm preaching to the choir) because as I've stated before, the larger the pull of the rubber-band, the bigger the snap. Unfortunately the limited resources within the company have tied our hands. Yet this most valuable allure to venture capitalists goes un-noticed for some reason; I predict it won't be long before operating capital is back in the hands of the extremely experienced crew.

There is a reason there is always a twinkle in Ian's eyes: the gold is in there, and the longer he and the miners look, the closer they are to finding it. This is just a temporary situation.

The most optimistic of all, Mike, you mustn't sway from the positive.

11/02/2007  12:57PM

IRONY: a condition of affairs or events exactly the reverse of what is expected. What’s that old expression, the irony of fate?

Bluejay keeps us informed about how many dollars is takes to buy an ounce of gold. So, as the cost keeps rising, gold producers are feeling their oats. Today gold passes the $800 an ounce price and the company and owner of the richest concentrations of gold mined on record lays off its crew. Irony? Yes, but also a sad twist of fate.

It is not the first time this has happened at the Sixteen to One mine. It is not because of any reason except Mike did not have the money to pay the crew past today. It is not for lack of trying. Everyone knew for over a year that cash flow was serious. All the crew kept going and working to solve the issue. Just reread Scoop to see the disappointment in gold production. Ian and Mike, with the input of others, followed the geologic clues, the electric gold detectors and their intuition and experiences over the past thirty years of mining. They played the hand they were dealt even though everyone knew odds were not the best.

Why were odds not the best and why did they keep mining? The cash flow problem goes way back but that's another story. The company requiring regular monthly payments plus a payroll every two weeks. Inventories were shrinking. There were few mining targets available because of the need for short-term cash, therefore short-term targets.

A calculated long target was the rehabilitation of the 1000-foot level. The slippery serpentine wall above the level was a troublesome thorn as each foot advanced. The completion date extended until cash flow forced the crew to go find some gold, which they did.

The crew was not completely surprised by the announcement Mike made to them after shift on Tuesday. They knew the cash flow situation and the lack of production; but Mike can usually pull a rabbit out of his hard hat to rescue the moment. Not this time. His efforts to find working capital have not been rewarded, so there is no money to pay the miners, who also have monthly financial needs.

“It isn’t over yet. The miners will be back”, says one.
“We’ve seen the gold come out of this mine. We haven’t gotten a quarter of it yet”, says all.
“It’s just a simple twist of fate” says Jerry Garcia.

10/26/2007  1:19PM

No decision is expected regarding the claim for damages filed by CDAA and its law breaking lawyers for ninety days, while the judge reviews the extensive file. The judge may ask for clarification of some of the line items.

Judge Smith conducted an open meeting, encouraging questions and rebuttals. He also asked many questions and said how difficult it is for a new judge to enter a case like this at the end. Most of the audience told Scoop after the two plus hour hearing that they wished they could speak and ask Mr. Knox (defense lawyer) questions. A contingent from Alleghany was present to support the mine. The success or failure of the Sixteen to One affects this small village immensely.

Scoop powered up the old computer, checked the FORUM and was shocked to see Bluejay’s posting on the gold bullion price ($783.50). Some regional gold buyers bought a dore bar on Wednesday at $744.19, a difference of $39.31. That was a nice short-term profit. Wonder how the commodity players are doing with gold? Who is playing the market on the short side today?

Mike just returned from the company’s major high-grade slab buyer. The rising spot prices do not affect the slab price so nothing has changed; however the left over cuttings are increasing in value. No other business likely has more valuable sawdust in its workshop than the Sixteen to One. If you forgot or did not know, SLAB is the name for the sliced quartz and gold ore. It is this rare natural gemstone found in the United States. It appeals to both men and women, rich and poor and can be worn as a casual adornment or to the most formal social functions known to man. None in the room will top someone wearing a well-designed and constructed piece of this fine jewelry.
 By Rick

10/25/2007  9:29PM

When the fabric of attempt gets stretched thin the perseverence of the outcome brings the toast-glass high!
 By martin newkom

10/25/2007  5:35PM

The company that made the big
gas discovery the started them
on the way to being a big co.
was Occidental Petroleum.
 By bluejay

10/25/2007  11:45AM

Agnico Eagle Mines will spend over $40 million just on drilling alone this year.
 By martin newkom

10/24/2007  8:13PM

As the head driller told the
lease owner years ago when at
approx. 6800 feet at a site in
Lathrop, Calif. "Keep Drilling"
"Keep Drilling"! Well, they
did and hit the second largest strike of natural gas in the
history of exploration in Calif. Source: Armand Hammer's

10/24/2007  9:25AM

Scoop quits evaluating the quartz vein in the headings. See last posting. The indicators for gold are fooling everyone. Each miner who has seen the high-grade concentrate into a nice “pocket” can’t believe the lack of production over the past year.

The underhand decline and sublevel drift produced nary an ounce of gold.

Work towards the Sixteen to One shaft is continuing, one round per day.

The raise between the 800-foot level and 600-footlevel is well underway. Spirits are low in Alleghany, but confidence is high, whatever that means. These miners need to catch a break.

10/01/2007  3:34PM

Good look at the underground headings this morning. The sinking/ underhand drift work place floods each day after shift. It is in a wet part of the mine. The pump is air driven, so the compressor must be running to keep it dry (compressor only runs during the shift). As the heading advances, it takes a little longer to pump out. Under consideration is switching to an electric pump with a float valve. It seems to be a toss up because if no gold is found in about ten more feet, the heading will be abandoned.

One crew began a low degree raise towards the old Sixteen to One shaft about sixty feet below the 800 foot level. Boy, the quartz has all the look of a home for gold. The vein is about four feet thick with other features that are favorable to gold deposition. There is a good spot to dump the shot-rock, but Ian must decide whether to continue hand mucking, using water, or set up a slusher. Time is always a factor.

The 800 hanging wall drift crew is getting a round per shift. This looks more like a long shot for success. The strike of the vein is changing, which can be a positive geological occurrence but the quartz looks somewhat splayed. It is carrying sulfides, which is an encouraging sign.

MSHA finally came for an inspection last week. There were four citations. None were serious or substantial. One: a ground plug was missing on a cement mixer that was used a month ago in the construction of a change room for the miners. Two: a light bulb was out on one of the trammers. Most of the time the trammer drivers leave the lights off. Their headlamps provide enough light and they hate to interrupt their vision, which becomes accustomed to the low light after a short time underground. The inspector wrote that the hazard he saw was the potential of running into miners on foot. Humm. Three: a report (retrieved on the internet) for certifying annual refresher training was filed on the wrong form. Four: an allegation that the mine does not have alternative mine rescue capabilities arranged. This should be cleared up- in a conference and the citation vacated. The total money is $240, another blow to the boys.

An ongoing concern of the company is the proven fact that the media will use the number of citations to show how reckless mine operators are about the safety of the miners. That’s how the system works in a society that spends about thirty seconds analyzing a serious topic.

Heavy bursts of rain the past weekend. Alleghany is not ready for winter after the first week of fall.

10/01/2007  9:13AM

The initial hydropower feasibility report for generating electricity for the mine is completed. The current water flow used to calculate (September), the elevation change (head) and the friction loss indicates that the company will make about $35,000 of electrical power a year. Since the water flow was at seasonal lows, the kilowatt production is likely to increase during the wet months.

The two big expenses for this power plant are the Pelton wheel system of generation and the 2500 feet of high-pressure pipe from the source to the power plant near the portal. The system cost is estimated to be $65,000 to $75,000 installed. In two years the power plant will pay for itself.

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© 2018 Original Sixteen to One Mine, Inc.
PO Box 909
Alleghany, California 95910

(530) 287-3223      
(530) 287-3455

      Gold Sales:  

(530) 287-3540


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