January 16, 2021 

Clips from Alleghany


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 By martin newkom

03/28/2007  5:28PM

If they would let us use DDT
again we could take care of the little SOB. (beetle)

03/27/2007  4:08PM

Snow yesterday. Snow today. Tomorrow supposed to be sun. No one had trouble getting to work but an unexpected and unwanted problem hit Alleghany: Bark Beetles.

At the intersection of Foote’s Crossing Road, Main Street and Miners Street the dreaded little bug found a home in the Ponderosa pines. This western beetle (Dendroctonus brevicomis) attacks the midtrunk, then spreads up and down; larvae feeds on inner bark and completes development in outer bark.. First sight is right at the top of a tree. The needles turn brown and very quickly the entire tree turns brown.. It happens fast.

Adults can emerge at any time of year, weather permitting, but emergence is most common in late spring and again in late summer to early fall. The nasty bug commonly attacks trees weakened or predisposed to infestation by drought, disease, injuries or other factors that may stress the tree. Management against the beetle is limited. Fifteen trees are goners and more may show infestation over the coming days. The unseasonable warm weather must have triggered the outbreak.

If left alone the whole forest could fall prey to the insect. Even though it rained and snowed yesterday, Mike, Ian, Chico and a town volunteer fell, limbed and decked ten trees. High winds stopped cutting the remaining five. If the Western pine beetle comes to your neighborhood, attack the infestation immediately.

03/23/2007  3:40PM

The week ends on a high note. It’s not a gold high. It’s an “at last we know how much muck must be mucked to clear the 1000-foot level” high. Some may wonder why this relates to high feelings. As many of the crew told Scoop, “It’s the unknown we’ve been dealing with.. We live with it daily with the gold but it’s been hell not knowing how big the cave-in.”

Late yesterday, a hole or opening appeared at the top of the level where the muck, up until then, was a solid wall. It opened enough for one of the baby miners to crawl through and get on the level behind the cave in. Today the crew worked with renewed spirit and energy. Everyone had been a little edgy because the primary target was not to find gold. This crew’s job is to get that level accessible. Gold is in the future. A gold mining employer without gold becomes a company without employees. Maybe that’s why most of the small companies, unlike this one, get their operating capital from stockbrokers not gold miners mining gold.

There are two new faces at the mine. Mike seems to do some things opposite from other managers. As money is getting low, he adds miners instead of laying them off. Not always but his strategy is grounded in his own experiences. Scoop cornered him to explain. “When revenue or sales are down and orders are shrinking, it is wise to cut employees and other expenses. Our sales are up and orders are backlogged. Ian and I have a plan and it’s a good one. The guys need to get to where we are confident of good odds of finding gold before other expenses restrict our ability to get there. This mine is not a crapshoot, as some are led to believe. It is actually fairly predictable, enough to still be producing for 111 years.”

The level will still take sometime to clear so stay tuned.

In other news you probably know this already. The California Court of Appeals in Sacramento set a date for oral arguments on April 18, 2007 at 2pm. Let’s fill the spectator seats and support justice. Why the Attorney General decided to side with provable lawbreakers is a question that needs an answer. Do any of you have one? Do you think it may have been because the former head. Bill Lockyer is a fool or approves lawyers breaking the law? Does the new Attorney General, Jerry Brown share Lockyer’s sentiments about lawbreakers? Scoop works the rural environment, so maybe some of you can answer these questions. This appeal is even more bizarre because its legal foundation requires that Mike and the mine some how took away constitutional rights of crooked lawyers and private prosecutors. This story should be appearing in all California newspapers and some of the national big ones. As the NY Times said in its article about the CDAA private prosecution, “As California goes, so goes the nation.” Help, please.

03/13/2007  12:56PM

Lots of wood and outdated rock bolts were being loaded on flat cars at the portal and heading underground. The outside miner said that the muck on the 1000-foot level continues to slop into the level. Muck slopping onto the level didn’t explain much so Scoop went to the books. The miners are spiling, which means to drive spiles. A spile
is a large timber driven into the ground to serve as a foundation. When you look in the historic mines in California, you will see old wood, old pipe and bent mine rail or track used for spiling. Miners would grab any material at hand to stop muck from seeping into the workings.

The miners are clearing a pinch zone. It isn’t a dangerous situation but a nasty one because the up dip back continues to break loose and make its way to the area that was just cleared. There are times when a miner will muck in one place for days, unable to stop the flow, catch up with his support or secure the sliding of material. The worse and most frightening time is when the rock breaks loose from overhead. Have heard stories it got real hairy one time at the Red Star heading. Even the bravest miner felt he was tempting death by stepping into a spot where, without warning rock would fall from above. A decision was made to abandon this spot and drive a new tunnel around it.

Ian and Mike knew this spot on the 1000-foot level could be a problem and even discussed drilling and blasting around it. They decided to give it a try first. It looks like the miners are going to hold back the muck and continue forward.

Scoop asked, “Why is the muck flowing? Thought this is a hard rock mine.” The snarly reply wasn’t enough of an answer. So Scoop went to the books again.

According to maps, the crew is stuck in a “pinch zone”. It appears to run from above the 600 level to the 1500 level. Records show that in mid 1990’s the miners went through a similar situation on the 1500 level. Over 300 ounces of gold were found in the pinch. The still reliable United Stated Geological Service professional paper #172, Quartz Veins of the Alleghany Mining District emphasizes the importance of geologic structure in locating the gold. Gold deposition has a relationship to such occurrences as faulting, structure of the bedrock, size and structure of the veins, origin of the deposits, and mineralogy.

Scoop hears from time to time a negative perception about the wealth of the Sixteen because it seems to have an “unproven history”. Ha, ha, ha. In all the veins that have been productive there are certain structural features, which appear to be generally associated with the high-grade shoots, and within such favorable areas there are closer guides furnished by the mineralogy of the veins. Miners believe that the major control of the deposition of gold in the high-grade shoots lays in the presence in the vein of conditions which favored the local shattering of the quartz, hence a ready entrance of the solutions that deposited the gold. Other useful words are: shearing, stresses, irregularities, swellings and pinches.

Maybe the perception of current mining and its historical culture and benefits to society is so off base in America these days because its terminology has unique and sometimes colorful words and definitions. Here is how a dictionary of mining, mineral, and related terms defines spiling (spilling) and pinch. Spiling: Forepoling over timber and steel supports in weak, loose beds. Driving timbers ahead of an advancing tunnel through treacherous, loose, watery ground. Pinch: A marked thinning or squeezing of a rock layer. A thin place or a narrow part of an ore body; the mineral zone that almost disappears before it widens out in another place to form an extensive ore body. No doubt, mining and its economic and enviromental impacts are misunderstood.

Ian keeps saying, “just another piece of the puzzle, just another piece to study”. People have been working on this puzzle for three centuries. Each ounce of gold production is another piece, as is each foot of the ground the miners pass through on their journey. If geologists' opinions count, we can expect more than another million of gold pieces to be found as the footage progresses.
 By Rick

02/26/2007  8:50PM

Down here in the valley I feel clogged up, with the too-huge number of people and the reigning PC mentality. When I read about Rae's frog's, Mike's snow-shoes and Ian's upbringing foresight I realize I'm living in the wrong place.

02/26/2007  2:14PM

Two more things (for more see message below this one):

The 10-K was filed today. If you would like to recieve a copy e-mail Rae corp@origsix.com and she will e-mail it to you. The formatting for the SEC filing is difficult to read. The one available by e-mail is formatted better.

If you would like a map of the Sixteen to One Mine we have two options. For $25 postage paid you will be sent a black & white 2'x3' map. For $75 postage paid we will send you a full color copy of a map of the mine that was colored in by Michael Miller. This map shows the location of gold pockets and has them marked by size. The map is 82" long x 36" tall.

02/26/2007  2:06PM

Three feet of snow in Alleghany and it's still coming down hard. It is supposed to continue through tomorrow.

The power flickered earlier today but so far is on. A couple phone lines are down across Main Street.

Mike Miller was seen on snowshoes walking down main street. Scoop hears that his truck is stuck and he was heading to the mine to get somebody to pull him out.

Ian's truck has all four tires chained up. Considering no plowing was done on the mine road Scoop was surprised Ian made it in and out of the mine. Ian's reply "I was raised up here!"

A flu epidemic struck Alleghany last week. Attendance has been down because of it. Hopefully we are "over the hump" and everybody will be feeling human this week.

Rae's observation of the frogs in her pond. "With the warm weather the frogs were having a free-for-all and going like gang busters. As the storm rolled in and the mercury began to drop the number of croaks slowly diminished. However, there were a couple of die-hards out there who were still croaking when it was 34 degrees. Finally as the snow started falling they fell silent."

There was a dog party scheduled at Casey's Place last Sunday. Our traveling vet was going to be there as well as some animal rescue folks. The people who own the dog bakery in Grass VAlley were providing treats. Due to the bad weather the party has been cancelled to next Sunday.
 By martin newkom

02/19/2007  4:32PM

Thank you for the location of
the 1064. I get the feeling
that 16's crew is goin' to hit
a dandy one.

02/19/2007  11:00AM

The 1064 winze is at the far right side of the map (north along the strike of the vein). It connects the 1000-foot level to the 1500-foot level. So it is to the right of the Tightner shaft. There was good gold above the 1000-foot level. No mining has occurred below the 1500 level and very little between toe 1000-foot level and the 1500. There are two levels between the top and bottom of the winze called 1150 level and 1250 level. The known gold pay shoot that is identified above the 1000-foot level is one of the reasons the company chose to open the 1000 level.
 By martin newkom

02/19/2007  9:29AM

Looking at the mine map, where
is the 1064 winze? Is it the
Tightner shaft or in that neighborhood?

02/16/2007  2:41PM

Spirits seem high regarding the 1000-foot level rehabilitation heading. The machinery is holding together; two-inch pipe and fittings, one-inch rubber air hose, ¾ inch water hose and other supplies are at the portal; and there is plenty of ground support (rock bolts or wood).

Ian took the plunge yesterday. He walked the 600 -foot level north, climbed down to the 1000 -foot level and started walking south towards the cave-in. It has been years since anyone made the trip. Britt was his companion and each carried gold detectors. Why not? The cave-in blocked water from flowing down the level, building a dam and creating a lake. It reached their waists. If any of you go fishing in high mountain streams in water up to your waist, you can imagine the sensation, especially since these two wore regular cloths. Ian said it was worth the pain. Gotta love those miners! The ground is good for about two fifty feet from the 1064 winze to the point where the crew is mucking and the track is clear. They found a very good signal in the quartz, so everyone is relieved that this was their heading of choice several months ago.
 By martin newkom

02/14/2007  7:30AM

A big thankyou to both Rae and
"Scoop" for the very informative discussions on how
things are done and considered.

02/12/2007  9:33AM

To answer Martin’s question: When gold is shipped to the refinery after it is refined it goes into our “pool” account in New York. When we are ready to sell it we call the refinery in New York and ask them to price it for us. They look up the current New York Market Price and give us that price for the gold. We receive a wire two days after pricing it.

Another option we have but do not exercise is “hedging”. This is pricing the gold in advance locking in a specific price for future sales. If we were to hedge our price choice would be either the a.m. or p.m. London Fix on the day of the hedging. Hedging causes ulcers so our policy is to price the gold at the time we sell it.

It takes the refinery a minimum of two weeks to refine our gold and the mail sometimes takes up to a week to get the gold to the refinery. The refinery does allow “advances”. Advances can only be done after the gold has been received at the refinery and the pre-melt and assay have been completed. The pre-melt and assay are usually done the day the gold is received. The assay is done by x-ray. The refinery charges a fee of 3% per annum for advances. They will advance up to 90% of the assay. Last Friday Rae advanced ounces into the pool account in order to cover payroll this week.

To answer the second part of Martin's question: All gold sales are reflected in the Revenue portion of the Financial Statements. (10-Q's and 10-K's)

Speaking of 10-K's that is what Rae has primarily been working on. It should be completed this week. While the fourth quarter was profitable thanks to some slab material recovered in October the Company shows a loss of $100,000 for the year. It is noteworthy that the actual gold content of the slab material found in October was only 178 ounces but because it was jewelry grade gemstone material (unfortunately it was fractured) the company turned a profit of $50,000 for the quarter. Also some of the slab from the October production is still being sold so the benefit will spill over into this year.

On another note: Much needed rain finally arrived in Alleghany last Wednesday. It rained on and off all week and is still cloudy. It is unseasonably warm. The frogs in Rae’s yard were having a party all weekend and her tulips are two inches tall!

A flock of geese flew over very low yesterday heading south. Another flock flew over this morning, also heading south. Does this mean late winter??
 By martin newkom

02/10/2007  4:16PM

rae's gold sale: do we have gold on deposit in New York?
will that sale be reflected
in the next 10Q? Interesting!!

02/09/2007  3:43PM

Rae sold gold from the Company’s account in New York. She got a good price…$662.40 an ounce. It hit $670 during midday trading so I guess the production from the Sixteen to One did not create a supply problem for traders.

02/09/2007  2:55PM

Miners on the 1000-foot level use an EMICO 12-B mucking machine. There is one smaller size (11-B) and several larger sizes. At the Empire mine the crew used a 21-B mucking machine, which would not work on the smaller levels at the Sixteen to One. The width of the underground workings is one factor but the height of the rock or ground support above the rail is the absolute limiting factor. When a miner scoops up rock in the bucket he then pulls a lever that throws the bucket overhead so the rock will land in a waiting ore car. This has caused problems on the 1000-foot level, where the “backs” are low. Several choices are available to fix the problem. First the miner can load the bucket and drive the mucking machine backwards until he finds clearance. The other option is to shoot out the hanging wall to make more room. Miners hate doing this because, well, bad things can happen whenever you ignite explosives underground. So, now you know one reason the footage advancement has been slow this week: low backs at the working face.

There is another reason. The mucking machine comes apart. The top part sits on a turntable, which rotates on steel ball bearings. Not often but at times the balls stop rotating. Once in a long while, a ball will mysteriously fall from the circular trough that holds them in place. When this happens the miner mucker must stop and fix the problem. This happened on Monday. The Sixteen to One has six or more machines, but since it take a great effort to drag them out of the mine and into the repair shop, they repaired them where they break. The Sixteen also has a large inventory of parts, so the repair only cost one shift of production.
 By Crush

02/01/2007  9:23PM

Here I read my nname and about the good news and the pipestuffs. Good, we need it. Jus becuse its long do. I Dont know what is the $ price or why it is, but why wory sinse ist still gold and down there anyway and ythe guys will fid it.

02/01/2007  11:59AM

Lots of activity at the mine. The 1000-foot level crew has successfully spiled through a large cave in, which had them concerned. Safety was not the issue. If they could not hold back the pile of broken quartz and wall rock, footage progress would come to a stand still. All is well. What faces them ahead is about 300 feet of minor track clearing and then the grand daddy of all blockages. Ian and Mike plan to work their way around the cave in by going up to the 600 foot level and then back down to the 1000. No one knows how long the level is blocked. One option is to drill a new tunnel in the footwall to by-pass the work of spiling.

Mike drove through town with his truck full of two-inch poly pipe (used for compressed air). Seems the detector located a hot signal well beyond the present utilities. Scoop could see the miners unrolling the bundles of pipe in the sun and then dragging 500-foot lengths into the portal. Let’s hope it’s a good bunch of gold. Inventory must be running low.

David and Rae finished pricing inventory. David panned about forty ounces of gold dust from his saws and polishers. The year-end crush went to the high-grade mill on Monday. A forty-ounce bar was poured from the chips or remainders that wasn’t useable for jewelry. Bluejay says gold hit $650 so gold valued about $50,000 was mailed from the little Alleghany post office.
 By smithsgold

01/25/2007  9:15PM

Thanks for sharing.

I enjoyed reading Part 1 looking forward to Part 2

Thanks again,


01/22/2007  12:53PM

Draft received from a recent interviewer of Michael Miller that may appear in a yet to be identified publication. January 22, 2007. Part One

Q: More stories about gold are appearing as gold increased in value last year. Are we in another new American gold rush?

A: I wouldn’t call it a new rush but there is definitely an upturn in interest. The mother of all historical gold rushes took place in California between 1848 and 1852. In modern times the current interest is a continuation of “the rush” unleashed on December 31, 1974, when gold was economically freed from government suppression. Today the general public has yet to participate even though we see more references to gold than a few years ago.

Q: How do you follow the gold markets?

A: I keep up with gold and other natural resources thanks to magazines, newsletters and newspapers, web sites or articles on the Internet, friends or acquaintances in the various industries and other sources. I enjoy reviewing company reports and SEC filings. My interest goes beyond what should be required of a president in the natural resource industry. I’m curious. My macro- economic belief is that our natural resources contribute to the liberties and freedoms the entire world cherishes. There are potential global impacts, significance for Americans and important local consequences that touch many people.

Q: While it seems simple, the realm of gold has a complex history. What single advice pops into your head to offer someone outside the gold market wanting to get in?

A: The rules are the same whether its gold or technology: go into gold with an open mind and teach yourself through study. I started that way thirty-two years ago. My family background, formal education and life-long experiences make me a risk taker but a careful one. Emotion gets in the way sometimes. The counterpoint to risk is reward. The ability to evaluate these two components is crucial with today’s gold investment options. Whether it is an investment in time, energy or money, a formula may be constructed to analyze various choices and opportunities. There are unfamiliar terms in gold mining with unclear definitions to deal with. You want a quick single concept to embrace: ponder the downside risk and upside potential.

Q: Why have you devoted thirty years to the mines in Alleghany?

The relevance of mining, natural resources and gold to our present and future well-being makes me a Sixteen to One bull. I recognized the potential quickly back in 1974. Our experiences continue to confirm my early impressions. I don’t want to go into a lot of history now; however what has taken place in Alleghany and the Sierra Nevada Mountain range is awesome. It sometimes takes my breath away just to have an interest in keeping this culture alive. While economic growth (stock appreciation) is an important goal, so is acquiring physical gold as a personal possession. This opportunity really puts Original Sixteen to One Mine in a very special and small category of gold stocks. The little guy, like me and others, has a chance to participate in something exciting.

Q: In reading your history you seem to always have plans that require money but you rarely actually go outside to get it. Why?

A: We prefer to finance our growth and development by mining gold. The Company’s fortunes turn in a single shift, so as long as we are breaking rock, fortune may tap us on the shoulders. Other reasons are more pragmatic. In order to declare a gold dividend the division of ownership must be manageable. It is. The more shares outstanding, the more difficult to divide excess gold into a meaningful amount. I monitor our gold inventory, cash flow and daily underground mining progress to quantify the risk/reward scenario. In conversations with Ian Haley, the mine manager, and the crew I gain a sense of production and what is ahead of us. My actions are to push it, in other words “risk evaluation” is a constant part of the job. It changes almost daily. Last week on the 1000 foot-level, we found a gold showing in the down-dip side of the vein. We slabbed the rock. It revealed a very nice display of gold, more than first look. Now we have the choice of proceeding with the level rehabilitation or interrupting that heading and sink on the gold. Each has a risk and each has a reward. No one knows but right below us less than a week away could be enough gold to finance our Red Star project from this production.

Q: You mentioned unfamiliar mining terms earlier. Give us some common ones and some that may be unfamiliar or poorly defined.

A: I used the term “down-dip” in describing where we found gold on the 1000-foot level. First, the dip is the angle that a bed, stratum or in this case a vein is inclined from the horizontal. Down-dip tells the direction of the incline. Its opposite would be up-dip, although this term may not be used throughout the mining industry. Mining districts develop their own terms over time, so there can be confusion of meanings even between experienced miners. For the non-miner who is trying to get a grip on evaluating gold companies, the first concept they must deal with is reserves. The Alleghany Mining District is very fortunate because the gold deposit cannot be qualified or quantified using a reserve projection. The investor today is barraged with reports about proven reserves, probable reserves, possible reserves, inferred reserves and a resource. Whew! Believe me, these terms are not interchangeable but many exploration companies as well as others lump them together. I think it is done to fuel great expectations for those seeking a play in the gold industry.

Q: Why should individuals or other entities be interested in the Sixteen to One operation and give some examples?

A: An important fact in evaluating the likelihood and meaning of meeting the two goals (stock appreciation and gold distribution) is the number of outstanding shares. This is a very important statistic for comparing all corporations. On December 31,2003, there were 12,867,250 shares issued and outstanding. The number remained the same on December 31, 2004 and December 31, 2005. Dilution was nil. The upcoming December 31, 2006, number increased by 118,204 to 12,890,204 shares issued and outstanding. This small increase was due to a stock conversion for debt, money owed a shareholder who helped purchase the Gold Crown mine in 2005, directors’ fees and a long overdue account payable. For a company that has been financially handicapped, it avoided dilution just to keep the operation going. We are not fueling our operation by selling stock. We are one of very few small gold companies that actually mines gold for its cash flow.

Q: Is a gold dividend a fluff concept or for real?

A: It is for real. One of our past directors, Lee Erdahl, was a director of Ranchers Exploration and Development Corp and became its president after the untimely death of Maxie L. Anderson. Mr. Anderson paid a gold and silver dividend. It may be the first declared in kind dividend by a public corporation. I find it an inspiring accomplishment. As of today, a gold dividend of a quarter ounce per 1000 shares would require 3,250 ounces of disposable gold. This is a realistic number for the Company to meet.

Another requirement necessary to declare a dividend is the company must be debt free. Ours was debt free for half of the 1990’s. It was debt free by mining and selling gold, not by selling stock. It also paid a $0.05 per share dividend in 1995, the first dividend in thirty-five years. For most of its corporate life the owners were generously compensated with an annual dividend and the company was debt free and met its annual cash demands. Tax laws were different but with an “in kind- pro rata distribution”, the onus of double taxation will not be a factor in distributing profit. A goal of a gold dividend is for real.

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PO Box 909
Alleghany, California 95910

(530) 287-3223      
(530) 287-3455

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(530) 287-3540


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