August 18, 2022 

Clips from Alleghany


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 By bluejay

02/16/2008  11:01PM

GATA took out a full page add in the Wall Street Journal on page C5 January 31, 2008 entitled, Anybody Seen Our Gold?

GATA basically states, the gold ain't there no more.

Having the Treasury guard the country's gold has apparently been a big mistake.

If we put our collection in Fort Knox, it would probably go to "deep storage" and that would be the end of that.

Does anyone know what is still in the collection? Where's the Whopper these days? Has any of our collection gone to the saw?
 By martin newkom

02/16/2008  10:30AM

Sounds like the collection
should be stored someplace like

02/15/2008  5:16PM

A small chunk of gold was found during the clean up around the pump. The water level is held above the 1500 level but Mike wants to lower it below the 1500 level in case the power goes off again. The mine will have a larger sump by doing so. Maintenance continues with both the surface equipment and the travel ways along the 800 level. The heavy snowfall remains along the sides of the roads. It has been cold…in the twenties at night.

Interest in the gold collection is growing. Don’t expect a running account of how the offering is going because it will not happen. Once a deal is executed, Scoop will break the news. With gold prices today and the industry standard appreciation for rare gold collectables, the collection at base value exceeds $3 million. Mike has been taking photos and came in a few days ago with the attitude that the collection is actually “priceless”. Does $10 million sound better? Well, all the beautiful carvings and the other pieces, which make for a hundred-piece collection, will be sold to some wise and fortunate buyer. Scoop wants the old miner taking a bath in the ore call, which was carved by Buddy Miller (no relation to the prez).

02/07/2008  5:01PM

It has been a week of snow removal, loader repairs and messing with the tire chains on the Cat 966 loader. It’s not over yet. Tomorrow will be another day of digging out from the recent storms that left four feet of snow on a base of ice. It’s winter and it comes every year in these mountains. With a short crew the effort just to get underground consumes the days. Maintenance is an ongoing activity.

For those of you familiar with the physical layout of the roads and buildings, visualize the long roof on the mill building. The road to the mine portal is about ten feet wide in front of the mill. Snow piles up on the metal roof and comes sliding down, covering the road. On your right is a two hundred foot drop with no place to dump the twenty-foot pile of snow. Therefore, the loader driver must back up about sixty feet to reach a spot where he can dump the snow. Back and forth he goes. There is no room for error. The road should be cleared by tomorrow so Monday the miners can shovel the snow off the train tracks from the shop to the portal. Once inside the mine this lusty winter snow over the Sierra Nevada Mountains will disturb no one.

01/24/2008  12:18PM

Yesterday, a crazed man who consumed too much alcohol, went over the gate and walked through the snow to vent his rage and vandalized the lower shop. He was later cornered into a house in Alleghany, where he locked himself inside. Sierra County sheriff cars and a CHP officer responded to the call for help. Due to a threat of a lawsuit against the county deputies, they refused to enter the house to arrest the suspect. If he were on the streets or anywhere in the county, they would arrest him. Mike wanted him to stay put so he wouldn’t damage any other property or worse yet start a fire. He shouted loudly that the suspect had better stay inside the house til morning. It would be safe and he would help him get out of the county. A sheriff car was parked by the back door and by the front door. The CHP parked on the road leading out of town in case he made a run for freedom.

The guy had no money and since no one actually saw him vandalize the shop, he probably would be released in Downieville. Therefore, punishment was not the solution. Getting him permanently out of Sierra County was.

Mission accomplished by 11 am this morning. He was driven to North San Juan and Nevada County. The biggest loss was broken glass and a $400 electrical tester, which is a regular tool important to the mine. Mike called the sheriff office in Downieville to notify them that he was gone from Sierra County. The dispatcher said, “Nice job. We knew you could handle the problem and we count on you doing so.” Mountain justice.

01/21/2008  3:22PM

Snow is falling and accumulating. A series of snowstorms are forecasted for the Sierra Nevada throughout the week. The last storm did a lot of damage in and around the mining village. It was mostly due to high winds. Today the snow is dropping like a rock. The road to the mine portal appears to be passable but no one has traveled down today.

Geologist Ray Wittkopp and President Miller spent most of last week underground. They were looking at gold targets previously identified that could be activated on a shoestring budget. Even a shoestring budget requires somewhere near $200,000 to give it a realistic chance of finding gold.

Two important budgetary facts support a temporary, underground shoe string program: the spot price looks like it will stay above $800 an ounce and the demand for quartz/gold gemstones is very strong. The Company does not nor should spend any money marketing its quartz/gold because the current needs of its established users will gobble all production that the mine can produce.

Original Sixteen To One Mine is a very unique and misunderstood situation that potential investors, considering whether to supply the much-needed working capital to go after targets, fail to grasp or plug into a risk/ reward, due diligence analysis. Scoop hears Mike’s discussions and sees his frustrations when otherwise bright people get mushy when it comes to figuring out the Sixteen to One mine and its envious prospects for success. It has no comparisons (always a difficulty); however it’s a no-brainer, which may explain why smart and intelligent men are not knocking down the door to get a chance to join this gold adventure. They apply their brains “inside the box”. Problem is, it’s not a meaningful box.

So, on this cold snowy afternoon, Scoop will take a stab at solving Mike’s problems in communication. He spent time developing a thoughtful Strength/Weakness/Opportunity/Threat analysis far superior to this analysis, but here goes anyway:

1. The mines produced over $1.3 billion from deposits never close to depletion (1.6 million ounces of gold). Calculations at $800 spot. A small pocket of 1,000 ounces brings over $3 million in the jewelry market.

2. The confluence of these mines and technology was never available until now. This is not science fiction. Detection works! It is a twenty-first century fact. So, all you with technology backgrounds get into this action. “Snooze you lose””, no guts no glory” or “he could paper his coffin with worthless stock certificates” will be a lot of guy’s epitaph when it comes to gold!

3 A great plan and the people to execute it are in place. So is a perfect business vehicle. (How many of the start-up and unproven junior gold company operators and promoters drool gallons of hot, wet saliva over the prospects of having the oldest, longest active gold producer in the United States to develop? Every one.)

4. Financial risk is nil. Upside potential for GOLD dividends or stock appreciation is huge. Proceed and check it out.

Still snowing but got a call to check out a rare sighting of a ring-tailed cat. The company’s detailed analysis follows for your convenience.


The ultimate end of all mining is profit. Metal in the earth can always be recovered, but the work of recovery will not be undertaken unless it is expected to yield a profit and will not be continued if profits are not realized. Finance dominates the technical process of recovery. Thus, the miner is restrained by financial considerations. All his operations are governed by the anticipated financial results. This is the domain where finance and technique meet.

Mining is not wholly a question of engineering and metallurgy; it is intimately concerned with finance. A mining engineer cannot conduct operations as he would but as the funds available or that can be counted upon will permit. Metal mining requires prolonged study and experience for its successful exploration.

Honest opportunities for mining and finance are rare. One side or the other knows of horror stories that poison a just union of the two. I am looking to break the reluctance of proven financiers to join miners in the common goal of profit. In my thirty-three years of gold mining, I cannot point to a more favorable time for successful financial institutions to participate in the Gold Sector of our economy.

Original Sixteen to One Mine, Inc. is an anomaly in the world. Even though it is not a mainstream gold producer, its existence since 1896 deserves your serious look. With this in mind I prepared an abbreviated picture of its operation. Please consider a further review and becoming its financier.

Sincerely yours,
Michael M. Miller

Original Sixteen to One Mine, Inc.Executive Summary

Company Name Original Sixteen to One Mine, Inc. (
Main Contact & Position Michael M. Miller, Director and President
Phone Contact (530) 287-3223
Industry Major Industry: Metal Producers & Products ManufacturersSub Industry: Gold Producers
Company Overview The oldest US gold mining company will benefit from an infusion of capital at a time when gold shows strong price stability. Professional pundits believe that additional increases in demand and price are probable.
Market Gold (bullion) is sold at will into various markets at the current “spot” price per ounce for cash. The Company is known as the standard barer for another product, quartz and gold gemstones that bring a considerable price above the “spot” price. Demand for these gemstones exceeds supply. Gold companies have historically increased in market capitalization (share price) in diverse bull markets. The financial markets are in such a bull market today. It is important to recognize that the number of true gold companies significantly decreased as a result of the past ten plus year bear market in the Gold Sector. The Company will bode well as the current gold bull market develops over the next four years as investors look for quality gold positions.
The Opportunity Secure an equity position in a well-established gold mining company with undervalued natural resource assets including land, timber, water rights, and minerals. Participate in a well-proven gold mining district in California. Participate in the next gold rush for gold by investors at a bargain price ahead of the pack.
Financial Summary A balance sheet rich in unrecognized natural resource assets, poor in working capital with modest debt. Uneven gold production creates budgeting problems.
Capitalization Requirement/Use of Proceeds Five million dollars ($5 million) towards the following uses: Reestablish public stock market, complete and test new gold detector, upgrade equipment, special target development, reduce liabilities and increase working capital.
Corporate Management Michael M. Miller, director and president, has thirty-three years of underground mining and management experience. He has been a director for thirty years and president for twenty-four years. He has broad experiences in conducting the affairs of a SEC reporting company. Ian Haley, mine manager, has twenty-eight years of underground mining and experience.
Corporate Advisors Charles I. Brown (retired mine executive), Leland Erdhal (retired mine executive), Willard P. Fuller (geologist), Sandor Holly (retired director and physicist) Klaus Kolb (attorney), Scott Robertson (CPA), Raymond Wittkopp (geologist), Charles Schultz (mine safety consultant), Jason Burke (mining and civil engineer),


The following analysis combines internal and external aspects of the Company. Strengths and weaknesses capture internal examples. Opportunities and threats reflect external considerations. This analysis was conducted with outside professionals and is presented to assist potential participants in our growth in their due diligence of the opportunity.

Natural Resources (Timber Water, Gold, Crushed Rock Minerals)
Monopoly of natural product (quartz and gold gemstone)
Toxic material handling
Environment acceptance
Historical gold production and profit
Strong geology supporting future gold production
Mining historical and cultural value
Positive local government and public support
Museum (501c3)

Insufficient working capital
Lack of workforce
Unpredictable revenue stream
Restricted trading market for stock
Lack of general investor interest in Gold Sector


Participation in ‘Gold Bull Market’
Natural resource exploitation
Participation in new outlook towards forest management
Media and entertainment venue and products
Natural and organic cosmetics for men and women
Hydropower and bottled drinking water
Vision uniqueness
Cultural and social impact
Baby boomer interest in related areas
Recreation and tourism

Increasing government regulations
Reduction in market demand
Size of market
Extreme increases in utility and supplies costs
Unknown government regulations
Inability to secure sustainable financial backing
Fire exposure

The Company and Proposal

Original Sixteen to One Mine, Inc (the Company) is a California corporation with thirty million shares authorized and 12,867,250 outstanding. There are 1,642 shareholders. The Company has a history of trading on the Pacific Stock Exchange (now defunct). It files unaudited reports to the Securities Exchange Commission and maintains a public market on its web site. Management consists of a board of directors and officers elected annually. Its president, Michael Meister Miller (1983 to present), has been a director since 1977, and is responsible for the day-to-day operation. He has thirty-one years of gold mining and corporate management experience. The current mine manager, Ian Haley, has twenty-five years of mining experience. Former Directors and seasoned professionals maintain an active interest in the affairs of the operation and are called upon for specific situations.

The primary operation is the Sixteen to One mine from which more that 1,200,000 troy ounces of gold have been retrieved since the mine began operation in 1896. The Company began doing business in its present form in 1911 and has operated continuously. It employees fifteen people and operates year round. The Company has a long history of acquiring significant gold properties. Consequently, its assets are recorded well below market price. (See Addendum A for a market analysis.) Its real estate is offered as collateral for the requested money. Recent purchases are the Brown Bear Mine (1994), Plumbago Mine (1999), and Gold Crown Mine (2005). Total gold production from all the Company’s mines exceeds two million ounces (over one billion dollars). As important as this statistic is, the professional opinion that less than twenty percent of the gold bearing vein systems have been utilized is most relevant.

For accounting purposes gold revenues are accrued when the metal has been recovered. For tax purposes revenues are not recognized until the gold is sold. Rare high-grade gold and quartz is sold at a significant premium above the daily “spot” price for bullion. Gold inventory is recorded at the bullion price without an allowance for its proven added value as a precious gemstone or prized specimen. Over the last decade the Company established and retains a world-class gold specimen collection valued at $3.5 million.

On May 28, 2003, the Company issued a press release announcing its intention to develop a new shaft and reposition the Company into additional activities; however it did not seriously pursue the funding until this year. It prefers to fund its development program in two phases. The first phase ($5 million) may include an equity secured loan, a secured line of credit or a private placement. The time period for execution of this program, once funded, is one year to eighteen months. The second phase may include the above methods or a public offering. The primary use of proceeds in the second phase is sinking a new shaft and developing the vein from the shaft. The amount of money sought depends on the success of the work conducted in the first phase.

Use of Proceeds for Phase One

1. Consolidate and pay off all liabilities = $1,000,000

2. Reestablish public stock market position = $250,000

3. Complete and test new gold detector = $250,000

4. Upgrade current mining and milling equipment = $320,000

5. Working capital = $2,580,000

6. Special target development = $600,000

Total = $5,000,000

Upon the completion of the above six projects, the Company will realize immediate gains exceeding the costs in time and money. Special targets ($600,000) with the criteria of short time duration, quick start-up time and exceedingly high gold potential are planned and ready to initiate immediately. A working capital budget ($2,580,000) allows the operation to undertake known gold targets that require six months to one year to develop without the need to find gold during that time. The success of any mining operation absolutely depends on the operator’s ability to lead its mine plan with long-term development. For most of its ninety – five years of mining, the Company was financed to do just this type of development, which is one reason for its longevity.

The Company is one of the world’s pioneers in electronic gold detection technology. Beginning in 1992 and continuing to the present, it has worked with numerous companies and individuals to improve the sensitivity and depth of detection equipment. With each improvement it has retraced prior areas in the vein system previously mined and found additional gold. The historical results prove that with better technology more gold will be mined. The budget ($250,000) allows for finalizing the detector, conducting programs where signals are identified and massaging a software program for the miners to use on a regular basis. Currently, detection has not exceeded seeing four feet into the quartz. The Company has a realistic expectation that reliable detection from ten to fifteen feet is possible. The Company is a leader in underground gold detection. This new tool will change the face of gold mining in California’s Sierra Nevada goldfields as well as other areas with quartz and gold deposits. The Company will own the equipment.

Much of the mining equipment in use today has been a standby in the small vein underground mines for many years. The drill-blast-muck sequence continues to be the most cost efficient method of mining; however improvement in these areas will increase efficiency for the Company. Because of its use of and knowledge of metal detectors, the Company developed improved ways to process its high-grade gold and mill its low-grade ore. The budget ($320,000) buys new equipment, thereby increasing productivity, efficiency and reducing utility and labor costs.

There have been many changes in the gold industry over the last two decades. The Company plans to rejoin the public marketplace at this time by listing its stock on two or three foreign exchanges. Those under consideration are: Germany, Ireland, Iceland and Hong Kong. The budget ($250,000) will accomplish this and provide money to put forth a selective public relations program. The share price has been stable at $1 per share; there is no liquidity. The effects of this decision benefit the owners (shareholders) and the Company. Management believes its shares are undervalued due to its total absence of exposure to the market place. Its market capitalization is far lower that many small non-producing companies with inferior assets and no history of operation. In fact most “gold” companies rely on stock promotion and a healthy promotion budget for their revenue. Another relevant fact that has changed over the past decades is the reduction in real gold producing companies. The major companies have been growing through acquisitions and mergers. The choice for investors that are seeking some type of gold position has shrunk, leaving Original Sixteen to One Mine, Inc as an honest choice for joining the current interest in gold.

The Company is confident in its ability to repay its loan or line of credit from gold production and sales. Gold production will increase, footage production will increase and costs will decrease. Also by consolidating its debt into one master loan, interest charges will be less. The Company is confident that the marketplace will respond favorably towards its improved promotional plans for broadening its share base. Participants in the initial private placement ($5 million equals ten (10) percent ownership in Original Sixteen to One Mine, Inc) should significantly benefit from an increase in interest in the public availability of stock. With a more established market capitalization, the Company will be inclined to offer treasury stock to fund additional projects.

Corporate Advisors: Charles I Brown (retired mine executive), Leland Erdahl (retired mine executive), Willard P. Fuller (geologist), Sandor Holly (retired director and physicist) Klaus Kolb (attorney), Scott Robertson (CPA), Raymond Wittkopp (geologist), Charles Schultz (mine safety consultant), Jason Burke (mining and civil engineer).

Financial Summary: The Company files quarterly and annual financial statement with the Securities and Exchange Commission (SEC).



The vision for Original Sixteen to One Mine, Inc. (the Company) includes America’s natural resources but focuses on the plentiful natural resources of California. While the vision may appear to be rather explicit or narrow, it includes gold and other mineral products, timber and water. It encompasses their utilization, management, development and marketing for maximum yield. No other public reporting company incorporated in the United States shares this focus.

This vision includes the social aspects of natural resources and the desperate need to protect the cultural as well as the physical environment of our precious natural resources. The Company combines all social sciences as well as most physical sciences into an operational program. It is an enlightened business plan of operation. The Sixteen to One’s past reveals a necessary approach of maintaining long-term assets with the short term needs of producing revenue. Its present status is demonstrative proof that a small natural resource company can address the demands of natural resource utilization in today’s overly aggressive pro environmental outlook.

The Company will become known as the model for future natural resource development in California and the United States. Its operations will challenge the erroneous myths and prejudices of well meaning activists who hinder the sensible extraction of our natural wealth. These beliefs have turned the omnipresent demands for raw materials to natural resource production in other parts of the world, a dangerous reality.

A primary ingredient for our vision and subsequent model to expand is an infusion of working capital. There has been a noticeable lack of interest from Wall Street or private investors in forest and mineral production. The modest attention of the stock market towards America’s natural resource companies hurts future generations both in the United States and the world. Some patterns of investment are predictable. Investors’ interest in specific industries continues to move from one sector to another. The Gold Sector is abstruse, removed from the usual way of thinking and difficult to comprehend. The forest industry follows closely in its mystic.

A movement into natural resource ownership or participation is overdue. Unlike banking, savings and loan institutions, automobiles, real estate, airlines, pharmaceuticals, computers, utilities and practically every part of the complex mixture of America’s democratic capitalism, the natural resource companies are ignored. Perhaps one simple answer is that resource companies believe they must stay under the radar to function in today’s hostile anti-mining/anti-logging mentality. Perhaps a more likely reason is the pure misunderstanding that potential investment capital has about these small but vital industries.

The Company’s dream foresees an awakening of Americans to the realization that we need and will benefit from a return to domestic natural resource productivity. For almost fifty years America has been bombarded with media blame for past degradation to the environment. Some of the blame is justified. Many extraction and harvesting methods, however, are no longer practiced and cannot be assumed as what to expect from future operators.

American industries have learned from the past and clearly are the most environmentally sensitive operators in the world. This is one reason to bridge the ignorance gap of the population and our leaders. The “not-in-my-back-yard” position is a short-sided myth! Vital and necessary minerals and other resource products come from countries without the sensible regulations that have evolved in the United States over the past hundred years. The consequences of this are global.

Even though population growth and physical development exploded during the twentieth century, the world-changing roll of the United States has taken a more dramatic turn. A counter cultural shift emerged. America was considered the can-do country. Democratic and capitalistic social ideologies opened the doors for an expanding middle class, especially from workers identified as “blue collar”. Our natural resources were developed and accessible. What changed?

Somewhat reluctantly America became a world power and responsible leader. The blue-collar worker of today is losing economic ground as our society turns more and more to the service industries. But the need for manufacturing contemporary products in America remains; and in order to produce, industry requires raw materials. America has them in abundance. America also needs the backbone of its labor resources to insure our freedoms.

The time has come to broadcast how to treat our inherited resources in the 21st century. Original Sixteen to One Mine, Inc., a US corporation, has all the pieces to lead this renaissance except one. That missing ingredient is explained in its Executive Summary. The oldest American mining corporation operating needs a grubstake to turn its dream into a reality.


Date: June 30, 2005
Subject: Northern New Mine Project

The Sixteen to One Mine which contains over 26 miles of workings over a strike length of one and a half miles has produced over a million ounces of gold and paid more than $5,750,000. in dividends at a time when the dollar was worth more than it is today. At the present time, much of the gold production is sold as specimens and jewelry at a premium over the spot metal price.
A compilation of both new and old data indicates that a new and richer portion of the 16:1 mine exists north of the presently developed mine. This new portion of the mine starts at the very south of the 16:1 owned, patented, Red Star claim and exceeds north for another mile toward the town of Forest. The 16:1 vein in this area lies below Tertiary volcanics and Tertiary auriferous channel gravel known as the Blue Lead. In this northern area the vein has not been as extensively eroded, so higher more productive portions of the vein are present. Historically, the upper portions of the vein have been most productive. As pointed out by W. P. Fuller, former mine geologist and later a director of the company, the last big pocket removed from the mine was above the 250 level, very near the south end line of the Red Star claim. This was during December 1957 and early 1958. Cross sections constructed by Fuller for this area show at least 460 feet of back above the 250 level.
The only logical way to develop this northern area is to sink a vertical shaft one mile north of the present 800 level portal, just south of Wet Ravine on the Red Star claim. A detailed study has been made of all company maps and cross sections that cover this portion of the mine. Additional elevations have been protracted from Geological Survey maps.
The two most important aspects of this project are geology and elevations. According to my notes, the collar of the shaft will be at 4,655 feet, the base of the Tertiary, bottom of the Blue Lead, will be 4,480 feet and the 250 level of the mine will be at 4,120 feet. This will make the shaft 535 feet deep. (The exact elevations will be confirmed soon using GPS). It is necessary to connect with the 250 level as a secondary exit and for drainage.
The cost of the shaft and engineering details are not known at this time. Whatever the cost will be, it will be justified by the rewards of developing this area.
R. W. Wittkopp
Registered Geologist #3321
State of California

Addendum A


Property and Property Rights, Equipment, Buildings and Inventory:

1. Unpatented mining claims (110) based on Company’s arms length purchase in June 2005 at $5,000 per claim. Market Value = $550,000.

2. Patented acreage (472) in Alleghany (includes mineral rights, timber rights and water rights).
No comparable sales; however the Ireland Mine (nearby) is for sale, asking the equivalent of $30,760 per acre for similar rights. Its actual gold production and potential are significantly less than the Sixteen to One. Alleghany acreage Market Value = $10,163,104.

3. Brown Bear Mine (540 patented acres) in Trinity County includes mineral rights, independent drilling records, timber rights and water rights. It also has strong recreational potential. At $15,000 per acre the Market Value = $8,100,000.

4. Residences (3), other buildings and equipment = $985,000.

5. Gold and other inventory = $ 2,500,000.

6. Goodwill. Being an old school economics major at UCSB in 1960-65, my accounting teacher taught us the value of “goodwill” on a balance sheet. Original Sixteen to One Mine is a California corporation in good standing since 1911, and is America’s oldest and longest producing gold mining company. Today goodwill is not found on a balance sheet; however, in this particular review should be considered.

Reasonable but speculative Market Value of Company is $22,298,104.

Revenue History
1995 = $2,655,575
1996 = 1,442,459
1997 = 2,177,150
1998 = 1,466,702
1999 = 841,818
2000 = 1,729,659
2001 = 716,151
2002 = 588,030
2003 = 401,094
2004 = 1,377,458
2005 = 514,104
2006 = 794,086

Addendum B

Factual production:
Historical production from Plumbago veins is four (4) ounces of gold per foot.
Historical production from Sixteen to One veins is eleven (11) ounces of gold per foot.
Historical production (Recent) from Sixteen to One mine between 1992 and 1997:
Total production is 32,924 ounces of gold, which average 5,487 ounces per year.

Assumptions consistent with Use of Proceeds:
Spot price of bullion gold: $650.00 per ounce.
Footage mined: Four hundred (400) feet per month.
Development mining = Two hundred (200) feet per month.
Production mining = Two hundred (200) feet per month.
Ounces of gold from development are zero (0).
Ounces of gold from production are eleven (11) per foot.

Production and revenue based on actual mining between 1992 and 1997:
Annual production: 5,487 @ $650 per ounce = $3,566,550.00
Production and revenue based on actual early historic figures:
Total production: 26,400@ $650 per ounce= $17,160,000

Proforma statement for Special target #1

Production and revenue based on similar actual work and results between 1992 and 1997.
The production phase is eighteen (18) weeks long or thirty-five percent (35%) of a year.
Total production: 1,920 @ $650 per ounce = $1,248,000
Proforma statement for Special target #2

Production and revenue based on similar actual work and results between 1992 and 1997.
The production phase is twenty (20) weeks long or thirty-eight percent (38%) of a year.
Total production: 2,085 @ $650 per ounce = $1,355,250

Total first year production and revenue for Special Targets:

Recent Assumptions:
Total Production 9,492 @ $650 per ounce = $6,169,800
Historical and Actual recent Assumptions:
Total production 30,405 @ $650 per ounce - $19,763,250

Notes: The Company sells gemstone quartz/gold that exceeds the spot price.

The use of proceeds includes a long term mining plan without projections of gold production and is classified ad “development”; however a study of the history of the Sixteen to One suggests that it is highly unlikely to develop the vein to the extent planned without encountering an ore shoot.

Production per foot: In high-grade ore deposits any attempt to express the average grade of the ore in dollars to the ton is meaningless. To obtain a rough measure of the production of the different veins, geologists compare the amount of work done (footage or per foot) with the production.

Addendum C


Shares outstanding ….. 12,890,204

Options outstanding…. 765,000

Total…………………. 13,655,204

New Shares issued….. 1,502,072

Total outstanding…… 15,157,276

New share ownership is ten percent (10%) equity in Original Sixteen to One Mine, Inc.

Guarantee: $6 million market value two years from date of funding.

Additional consideration: $5 million secured by deed on Brown Bear Mine real property.
: First right of refusal on purchase of dore or bullion.

01/09/2008  6:08PM

Rockroby, you hit the high-grade gold pocket with your thoughts on this FORUM topic, “Gold Enters Major Gold Market”. Probably 99% of Americans sit on the sidelines when it comes to gold. When gold breaks $1,000 an ounce, the press and media personalities will start a buzz. Six months to a year later the doctor, banker, investor or speculator will jump into action. It happened in 1980. Buy at the top and pick foolish gold prospects, the ones promoted by white-collar criminals. Sorry, but none of these frenzied idiots will have read this web site. Baa, baa, baa.

Now for the Alleghany winter wonderland scoop!

Electric power nowhere in sight in Alleghany. Two buildings lost roofs, some trees down. Below freezing temperatures hurt the mine’s snow removing Cat loader. Won’t start. Gate to mine buried in snow (closed). More rain and snow forecasted for tonight and tomorrow morning, then a break in the weather. Office shut. While the electric phone equipment is not working, an old fashion phone is working and the Pacific Bell answering system somewhere will record your message. (530) 287-3223.
 By smithsgold

01/07/2008  5:57PM

Down here in the Valley we were out of power for 3 days from the storm and I didnt miss the power at all, nice and peaceful.
More rains and Snows on it's way..


Happy late New Years !!!
 By martin newkom

01/06/2008  11:04AM

Well, if you lived in Alleghany
in the early 1900's and you
had snow like recent you would
probably be stuck for the win-
ter. My mother Dorothy Arm-
strong was born there in Jan,
1906. They played lots of card
games and checkers until they
heard the sound of the team
bells pulling the first freight
wagons of the spring season.

01/05/2008  7:30PM

The electrical power in Alleghany quit about 10:15 am on Friday. No one knows where the lines went down. Word is that 800,000 people are without power in northern California. The Sierra County Sheriff office says that our supplier (PG&E) has a recording that the rural areas may not be hooked up until Sunday or maybe Monday.

Alleghany is a little village way out of the path of travel. It has only one paved road in. Anyone venturing here must turn around and go back the same way they drove in. Travelers hate that unless there is really something special calling them. Fortunately for the residents, who have one of the most pleasurable life style in California, few people venture the Ridge Road. None venture the road during a winter storm. Right now the village is snow covered and quite. The roads are better kept than highway 49, which is the major (two lane road). Even the closest cities, Grass Valley and Nevada City, have more problems with drivers that the residents of Alleghany.

Alleghany is quite and dark. A couple of people have generators, but not many. Joe has always had one. It is reassuring to know that at least someone remains connected to the outside world during times of no electricity. After all, this is the twenty-first century, cell phones connected to the hip or ear of almost everybody. How bizarre to be unaware of the rest of the world. Who won those football games anyway?

Friday was a bitch for the maintenance crew. The rain was so ferocious that the road to the portal was rapidly eroding. Scoop felt the importance of ditching the water away from the road and joined in with the soaked miners. Reid was the only miner underground. He was merrily slushing away some rock and unaware that the power was out. If you have never gone underground at the Sixteen to One, you have no idea how lost you will become to all the hustle and bustle in the outside world. The other guys were drenched, even with the rain gear they wore.

You may not know this, but Rae has a brother who worked for the mine at the time Mike produced his Underground Gold Miners Calendar. Jason’s (Rae’s brother) comment was that you never had to worry about what to wear underground because it is always the same. The mine is a peaceful place. Too bad it gave up so little gold during 2007.
 By Michael Miller

01/03/2008  3:30PM

The radio, television and newspapers are full of storm forecasts. Perhaps you have heard the news. A series of winter weather has been announced to pound northern California. It will begin late Thursday night with rain, as much as three inches in the Sacramento Valley. Snow level is at 5500 feet with as much as 5 to 10 feet at the Sierra Nevada crest line. The big storms will hit on Friday or so the weather forecasters have been announcing the past three days.

Alleghany elevation is 4500 feet and the ridge road peaks at 5200 feet.

Well, fifteen minutes ago small white dry flakes of swirling snow filled the air. Now a blizzard has hit the village. So much for that timetable! Forecasting is an art, isn’t it? If this beginning is any indication of what is coming, this will be a storm to remember.

The 910 loader is parked in town. The 966 loader is parked at the portal. All the roads to the mine (and in the village as well) are clear from the last snow. The pumps are running and the powder is dry. Let it snow.
 By Rae Bell

12/27/2007  12:24PM

Next time no "carbon copy"!

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.


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PO Box 909
Alleghany, California 95910

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