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From the Sixteen to One Archives

       

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 By Michael Miller

08/06/2008  8:57AM

I am a junkie for mining data and history, which is why this topic is on the FORUM. The successful pursuit of mining gold, investors and hobbyists is greatest for those with an historical perspective. There will always be charlatans, soothsayers, self proclaimed brilliant analysts, quacks and outright frauds in any sector of our society, including the Gold Sector. There are brilliant professionals and some scholars, advisors or writers who are just ignorant of aspects of their trade. That is okay. That is one reason to study. Most everyone but the severely arrogant has been in an ignorant situation before.

The following excerpt comes from a very high-end report published in March 1992 and prepared by Balfour Holding, Inc. Its author, Douglas B Silver, still operated his company from Colorado (www.dugag.com). We met as a result of his research, which circulated among the highflying gold people and remains a valuable tool for us.

Exploration or Extinction?
An Analysis of the Supply Crisis Facing the Gold-mining Industry
March 1992

1.0 Executive Summery and Conclusions

The past decade of gold exploration and mining activity in the United States has witnessed one of the steepest growth rates in history. National gold production levels have increased by ten-fold, with more than 130 new gold mines having been commissioned. Companies have also grown with this additional capacity, with several now producing in excess of one million ounces of gold per year. This growth was made possible due to a combination of factors during the 1980s, including:

1.) The favorable investment markets for shares of public companies and the high price to earnings ratios enjoyed by the gold mining industry.

2.) The abundant project and corporate financing available through equity offerings, conventional debt, and well as by gold loans.

3.) The successful discovery of epithermal gold deposits in the Great Basin region.

4.) The liberation of gold prices from a fixed standard.

Collectively, these four aspects created a strong demand for gold shares and allowed companies to build with unrestrained growth.

Today, the world’s financial structure has changed dramatically from the “golden days” of the 1980s. Precipitated by the Stock Market Crash of 1987, companies are becoming hard pressed to service their high annual production levels because:

1.) The equity market for gold shares has evaporated. Lackluster gold prices continue to hurt corporate earnings, many companies do not deliver on their promises, and the industry’s anti-dividend attitudes inspires investors to support or maintain their interests relative to other investments.

2.) Efforts to reduce costs have several impacted exploration spending. Consequently, fewer discoveries are being made, even though there is no evidence that there is lack of opportunities or that the U.S. is “picked over”.

3.) Business development teams are finding fewer opportunities worth pursuing because the low gold price adversely affects project economics, even before consideration for acquisition costs. The difficulty of financing acquisitions in today’s markets is highlighted by the fact that the number of transactions completed in 1991 involving U.S. gold resources is half the number seen in 1988 (and occurs in levels comparable to 1985). The paucity of new discoveries is causing the acquisition pipeline to dry up, as acquisition opportunities are recycled without significant changes in their technical advancement status.

4.) The largest mines are depleting their finite resources faster than they can replace them.

5.) The attitude by corporate management that they must continue to increase their annual gold production levels in order to attract investor interest and remain on mining analysts’ coveted research lists. This is forcing corporate decisions to mine large ore bodies at a rate that exceeds the size of deposits offered by Nature for replacement.

Collectively, these attitudes indicate that the largest, pure-gold producing companies must take steps to attract investor attention, but on a basis other than sustained growth in production. Possible survival strategies include diversification to other commodities, overseas expansion, transforming companies into holding companies and redirecting analyst’s attentions from production levels to other, more appropriate investment criteria.

The future and fate of the U.S. gold mining industry rests solely on the shoulder of the companies involved in the exploration, development, and production of gold. No government subsidies are currently being considered and public support for the environmental movement may prove too powerful and ultimately eliminate mining in the Unites States. However, this race is neither rigged nor over, and many constructive options are available to innovative or foresighted strategists. Hopefully, this study will provide quantitative information upon which successful strategies can be built while also dispelling common misconceptions.
 By martin newkom

08/05/2008  2:27PM

Thanks, Mr. Pres. By the way,
does anyone know the geological
composition of the Bellvue
Tunnel in the Laporte mining
district? In my younger days
I went to boy scout camp near
there.
 By Michael Miller

08/04/2008  4:19PM

Hi Martin. I took geology twice at UCSB and still find much of the Sierra Nevada and particularly the Sixteen to One vein system a mystery. So here is the third (see below) excerpt from the Jack Havard report of 1980. Have fun with the host of gold, quartz.

Quartz Veins

The quartz veins of the Sixteen to One Mine are typical of the Alleghany district and have been the most productive of gold in the district. The Sixteen to One vein is the dominant feature at the mine, but it is joined by several other veins originally considered independent: the Twenty-One, the Ophir, the Tightner, and others.

The Sixteen to One vein occupies an east-dipping reverse fault, with several hundred feet of displacement, which is part of the en echelon east-dipping reverse fault system of the district. The veins, here as elsewhere, are dominated by structure and ignore the county rock except for its mechanical properties. The country rocks are mostly the schists of the upper Tightner, the Kanaka conglomerate and some significant serpentine bodies. Most of the rock is hard and brittle, the exception being serpentine, which behave in a plastic manner.

The vein strikes about N 21 W and has been mined over 4000 feet on its strike. It dips at an average of 38 to the east and has been mined to 3000 feet on the slope.

The relationship of the vein system to events of the Sierra Nevada orogeny are not pertinent to the report, but the sequence of mineralization is interesting in the consideration of gold occurrence. H. R. Cooke, Jr. made a thorough study of the Sixteen to One vein (H. R. Cooke, Jr. The Original Sixteen to One Gold Quartz Vein, Alleghany, California, Economic Geology, Vol 42, No. 3, 1947).

Concerning the ore minerals, he writes:

Occurrence – Ore minerals form less then 2% of the volume of the vein, and are about equally common in massive quartz and in fractures, inclusions, or ribbons. They generally are clustered around large grains of pyrite, sphalerite, or tetrahedrite, but arsenopyrite, gold, and galena often occur alone or in combination. The only ore minerals in appreciable amounts in wall rock are fine-grained pyrite, arsenopyrite, and pyrrhotite. All ore minerals are hypogene except for traces of covellite and possibly a little chalcopyrite or bornite. The only evidence of zoning is unusually abundant pyrite in the schist of several lower levels, accompanied by a slight tendency for gold to be more evenly disseminated through the vein.

Five factors seem outstanding in localizing ore minerals:

1.) Fractures: the main channel-ways for the flow of ore solutions.

2.) Carbonate: the mineral probably most replaced by ore minerals.

3.) Quartz: controlling deposition of ore minerals by its resistance to replacement.

4.) Early ore minerals: tending to be replaced by later ore minerals.

5.) Graphitic gouge: tending to restrain ore solutions from invading wall rock.


Gold – Gold was the last ore mineral to be deposited and displays marked inability to replace quartz and earlier ore minerals. Gold generally occurs alone in quartz on grain boundaries or in fractures, and in very rich specimens of flood quartz, where it probably replaced carbonate inclusions; occurs with galena, often partly surrounds and fills fractures in arsenopyrite.

The average grade of the whole vein is too low for profitable mining, which means that more high-grade must be found than in random mining of the vein, The Sixteen to One high-grade is richer than any other for with I have seen comparable data. Scattered in a vein otherwise assaying about 0.04 oz., several hundred shoots have been mined, producing up to 78,000 oz. Each and running from 2,000—6,000 + oz., or on the order of 100,000 times richer than adjoining vein areas.

Dr. Cooke points out that 608,012 plus tons had been mined from the vein through 1942, yielding 749,179 plus ounces of gold. The hand-sorted high-grade, weighing only about 164 tons and constituting only 0.027% of the tonnage mined, produced 548,759 plus ounces of gold or almost three-fourths (73.25%) of the gold yielded.

In summery, when pockets are found the mine is rich; when pockets are not found the mine is destitute. This is the history of the Sixteen to One, and many of its smaller neighbors.
 By martin newkom

08/04/2008  3:24PM

It would have been easier for
me to understand things had I
taken geology in my college
days but I didn't.
 By Michael Miller

08/03/2008  3:39PM

History of the District

The history of the Alleghany mining district begins with the discovery of coarse nuggets in the bed of a creek by a group of Hawaiian sailors in the spring of 1851. Appropriately the creek was called Kanaka Creek. Its deep canyon has been the scene of intensive gold mining continuing to the present time. In the general area, gold was found in the streams probably as early as 1849.

The river bars were first mined, followed by exploitation of the Tertiary river gravels. Drift mining of the buried channels, first at Alleghany and then on a larger scale at nearby Forest, reached an initial production peak in about 1861 but continued with another peak in the 1930s at the Ruby Mine.

Mining of lode gold began in 1853 with a stamp mill placed in operation in 1858 at the Rainbow Mine in Kanaka canyon. Some veins, including the Rainbow, were discovered by miners exploiting the auriferous channels on bedrock. Lode mining was spotty from mine to mine because of the nature of the ore shoots. Peak production from the lode mines in the Alleghany district is report in the year 1922 as 50,231 tons valued at $1,710,521. With the gold price fixed at $20.67 and ounce, this meant a value of $34.05 per ton or 1.65 ounces per ton. Later discussions in this report will explain this high value.

In 1942, the gold mines were either shut down or extremely limited in production because of the War Production Board Order L-208. After the war, gold mining resumed on a reduced scale, gradually fading due to the fixed price of gold and increasing inflation of costs. The last major mine to shut down was the Sixteen to One, which ceased regular operation in December 1965 not only because of high costs but also because of lack of ore. Only recently has gold mining been revived substantially because of the high price of gold, but much of the activity in the district has been speculative and all of it has been on a small scale.


The following quotations are from Gold Mines of California, by Jack R. Wagner, Chapter 14, The Original Sixteen to One Mine:

The Twenty-One was the first to be developed and was in operation prior to 1868, but never made any notable production. About 1914 it was reopened by Hunt, the cannery man, who found high-grade ore in a new vein. What looks like good prospects were soon dashed to bits when a crew from the Sixteen to One suddenly broke into Twenty-One workings, clearly showing, to the embarrassment of all, that both mines had been working on the same vein. The Sixteen to One brought suit for trespassers against the Twenty-One in a Federal Court in San Francisco, which in 1919 resulted in a judgment for $93,000 against the Twenty-One. The owners found it simpler to dispose of the property and the mine was purchased by the Sixteen to One for $60,000. The Twenty-One tunnel now forms part of the 800 Level of the Sixteen to One.

…A three-way partnership was formed in 1891, motivated by an old-timer by the name of Jim McCormick. McCormick had remembered that bedrock vein that had been uncovered and ignored in the Knickerbocker (channel) tunnel nearly forty years before. The partners soon located the Contract and Contract Extension lodes that ran north and south of McCormick’s remembered vein. After driving further north a small winze was sunk but the vein tightened, causing the mine to be dubbed the “Tighter’ner” by the townspeople.

In 1903 Henderson L. Johnson took a lease and bond on the Tightner Mine. Johnson decided to drift south; his first blast dislodged $20 worth of gold and it was soon apparent there was more where that came from. This discovery was firmly established quartz mining at Alleghany…

Later, a property known as the Eclipse Mine, situated north of Kanaka Creek, was purchased and the present Tightner Tunnel was run. This tunnel cut the vein at about 400 feet vertical depth below the old Knickerbocker Tunnel and later was cut through the connect with the Sixteen to One Mine at the 250-foot level.

In 1908, Johnson added a number of other properties including the Rainbow, Red Star, and Eldorado--- Johnson sold out in 1911.

The New Tightner Mines Company continued to be a profitable operation under the direction of J. M. O’Brien and A. D. Foote. Foote and O’Brien operated the Tightner Mine and its twenty-stamp mill until 1918, producing a total of $3,000,000 from which $500,000 was paid out in dividends.

In 1919 the Tightner Mine was reopened by the Alleghany Mining Company, an organization put together by Fred Searls, Jr., who later became president of the worldwide Newmont Mining Corporation. Under their direction the Tightner produced some $600,000 in gold during the next four years. Unfortunately for the Tightner people, it soon became apparent that the Tightner and the Sixteen to One veins were one and the same. Costly litigation was avoided when an agreement was reached---the entire mine was sold in 1924 to the Sixteen to One.

For a mine that was destined to produce millions, the Sixteen to One Mine has a rather inauspicious beginning. The property was originally owned by the Rainbow Mine, but was never deemed worthy of development. The portion later to be known as the Sixteen to One was located by Thomas Bradbury from an outcropping in his own backyard. That was in 1896, the same year William Jennings Bryan, as a delegate to the National Convention, wrote the Silver Plank in the platform which advocated that coins be minted with 16 parts of silver and one part gold…

In 1911 the Bradbury brothers and Yeates Lawson made an agreement with J. G. Jury and W. I. Smart to lease the property with an option to buy. Jury and Smart, with the addition of H. K. Montgomery, organized that same years as the Original Sixteen to One Mine, Inc. It was this company that operated the mine for 54 years, right down to its final days.

During its heyday, it was not uncommon for a pound of ore to yield $50 in gold and single shoots would produce anywhere from $200,000 to a million! Dividends totaling $1,238,501 had been paid to 1924. In 1934 alone, bullion receipts were $578,000 with dividends of $287,000.

During the postwar years the Rainbow and Sixteen to One Mines were purchased. Also acquired was the Tightner Mines Company, which still controlled the Red Star property. (Thus the Sixteen to One gained control over the old Bald Mountain channel mines. – JFH)

The Sixteen to One now owned the most promising group of mining properties in the Alleghany district, but unfortunately continually rising costs and the gradual exhaustion of the developed portions of the mine resulted in depletion of working capital.

During the last year or so of operations, the mine payroll had been reduced to 12 to 15 men and the work had been more or less exploratory rather than producing. The management sought that one long chance of finding ore of a high enough grade to warrant continued operation in the face of terrifying costs.

The end finally came at the December 9, 1965 meeting in San Francisco of the mine’s board of directors. With President Walter Stinson presiding, the directors reluctantly voted to close the mine.

End of Quote

When the Sixteen to One acquired the Tightner Company, with its Red Star property, the Sixteen to One gained control of the Bald Mountain lands and the old channel mines. The same stockholders, or their descendants, some 300 of them, still own the Original Sixteen to One Mine, Inc., a California corporation, but the officers have been wracked with dissension and troubles persisting into June, 1980. Additional problems surrounded the lease to the Sixteen to One Mining Corporation, a Nevada corporation, now in bankruptcy court.


The manner in which the Sixteen grew is the preferred way taught in all good mining schools. Mining districts go through periods identified as: Youthful Mature, Old Age, much the same way geological periods are defined. I believe the Alleghany Mining District is in the Mature Period at this time.

The above recap was included in the Jack Havard report to Rayrock mines in June 1980. (See following entry). Jack’s words, “the officers have been wracked with dissension and troubles persisting into June, 1980” tells of my activities, which began in 1974. I was the dissension “wracker” and continued until the 1983 shareholder meeting, when the old management was finally booted off the board. The lessee called themselves the Sixteen to One Mining Corporation. It continued fiddling in the federal bankruptcy court in Reno Nevada until 1983, when Lucky Chance Mining expressed an interest in the mine. Lucky Chance “ponied” up $2 million and I negotiated a new lease with its management. It also failed but hung on in a series of joint ventures with Royal Gold as the ultimate major player. We bought the lease back with all the equipment in June, 1991. Two more Alleghany mining properties were acquired since then: Plumbago Mine and Gold Crown.
 By Michael Miller

07/31/2008  11:11AM

Being a gold owner and operator continuously for over 100 years, the Company has a tremendous amount of data. Below, are excerpts from a report prepared for Rayrock Mines, Inc by J.F. Havard, Engineer of Mines, written in 1980. These records are just as valuable today as when they were written. It is not practical or prudent to send our historical information to people who express an interest in joining our plans for development and production; however, I have always extended an invitation to qualified inquiries about financial participation. This is not a gold deposit or program that should be dismissed as too speculative or not worth the investment. The following are taken verbatim from Mr. Havard’s report.

Possibilities for Additional Ore

The principle reason for studying the properties of the Original Sixteen to One Mine, Inc. is to assess the possibilities for the presence of additional ore – commercially minable ore reserves.

Two entirely different types of ore must be considered:

Lodes – Mostly exploited near Kanaka Creek in the Sixteen to One Mine, mostly included in the present lease, but perhaps extending northward in to unleased area.

Channels – Mostly exploited in the Bald Mountain area, mostly explorable in that area and mostly free of the present lease.


11.1 Lodes

The Sixteen to One Mine was closed in December 1965 after desperate efforts to locate new ore bodies without a comprehensive well-financed exploration plan. The mine even participated in a government-financed program in 1965 as an aid to finding more ore. Today, the Sixteen to One can show no proven, probable or possible ore.

Nevertheless, it is worthwhile to examine theories offered by geologists and mining engineers on how best to search for additional reserves:

USGS Professional Paper 172, Page 60 (1932)

The Alleghany district stands alone among the districts of the Californian gold belt in its peculiar type of ore shoots, so that no analogy based on the persistence of ore to great depths in districts such as Grass Valley and the Mother Lode region is pertinent. The gold has been deposited from hypogene solutions and is in no way dependant upon either the present surface or the surface that existed prior to the outflow of lava, and there is no reason to anticipate impoverishment in depth on this account. It is possible, however, that there may be a change in the character of the ore with greater depth. The wider distribution of gold in the lower levels of the Sixteen to One Mine, as shown by the data given on page 52, is perhaps an indication that with greater depth the gold will tend to occur in larger shoots of lower grade…

In conclusion, the authors are of the opinion that there is no reason indicated by the present study why the mines should not prove equally productive to a much greater depth than had been reached at the time the field study was made. This opinion is, of course, not meant to be taken as an encouragement to deep exploration of a vein in which shallow development has revealed nothing of promise.


Report on the Rainbow Mine, by M. R. Lancaster, 1909
(The Rainbow is part of the Sixteen to One property south of Kanaka Creek.)

I should say therefore that the only manner in which to prospect for pay ore would be to select points where the ledge shows a good body of quartz and open these blocks by drives and raises.



Willard P. Fuller, Jr., San Andreas California, August 29, 1965
(In a letter to the president of the Sixteen to One from a mining geologist who spent 2 ½
years at the mine (1951-1953))

…It is my opinion that the Alleghany district in general and the properties of the Sixteen to One Mine in particular probably represent the most favorable ground in California for the exploration for new gold ore bodies that can be mined profitably in today’s economy.

Utilizing the surface plant and existing mine openings, Mr. Fuller proposes development as follows:

1.) Northerly, down the rake of the north ore bodies below the 1500 Level, in the Red Star claim.

2.) Southerly, down the rake of the ore bodies in the southern part of the mine, below the 2400 Level and south of the “49 winze”

Then he goes on to say:

A much more comprehensive exploration campaign should. When finances permit, be undertaken to prospect the northerly continuation of this entire vein zone. With more than 1 ½ miles of a major vein system barely touched by mining up until now because of the deep Tertiary cover, and with geological conditions very similar to the mile already developed by the consolidated Sixteen to One workings, this exists as one of the most promising areas for development of gold-bearing quartz veins in the district. It would probably be more feasible to develop this portion of the Sixteen to One holdings from the town of Forest rather than from the Alleghany side of the ridge.



C. W. McClung, Mountain Copper Company, 1960
“Recommendation and Conclusions”

Basically, our proposal for reviving the Sixteen to One Mine is to have the present mine to provide funds for the major share of the cost of exploring and developing a new mine. This would be accomplished by doing first limited renovation of underground working, surface plant and mill, and then systematically stripping the mine of possible ore shoots (second guesses), shaft and stope pillars, and drift stills and crown pillars. It is assumed that this program, which cannot be evaluated by conventional means, would provide the money from short-range operating profits needed for extensive exploration and development which must be done if the Sixteen to One is again to become a long-lived, profitable mine.



Eldon Dennis, Geologist, two reports on the Rainbow Mine, 1935

After diamond drilling, dip needle surveying, and geological mapping, Mr. Dennis makes recommendation for some detailed small-scale exploration in the Rainbow and then writes, “I am inclined to look with more favor on the possibilities of production from the unexplored area beneath the lava cap.” He refers to the ridge south of Kanaka Creek.



H. R. Cooke, Jr., The Original Sixteen to One Mine Quartz Veins, Alleghany, California, Economic Geology, Vol. 42, No. 3, 1947.
Extracts from the abstract:

Extremely rich gold shoots are scattered in the Sixteen to One vein in otherwise barren quartz. The main result of this study is the recognition of some structural features that might guide exploration of the ore shoots.

The most common significant findings are:
1.) High-grade commonly follows late shears on or near wall veins, especially the foot-wall, or crosses the vein diagonally up-dip on intravein shears and ribbons.

2.) The high-grade distribution accords with that of openings expectable from the reverse movement indicated: high-grade is most abundant where the vein is flatter than adjacent areas along both strike and dip, and virtually lacking in corresponding steep areas; serpentinite and cross-faults partly localized by serpentinite steepened in the vein sheer zone. Much high-grade occurs in complementary flats and near cross-fault intersections.

This paper, condensed from a Harvard Ph.D. dissertation, is outstanding for its detailed observations, but is not helpful in regard to major deposits.



R. W. Wittkopp, A Hypothesis for the Localization of Gold in Quartz Veins, Alleghany District, California
(Presented at a conference on California minerals sponsored by the Sierra Nevada Section of the Society of Mining Engineers, A.I.M.E, March, 1980.)

…The present hypothesis proposes that ore bearing mineralizing solutions did not move up the quartz veins, but moved up along the serpentinite contact forming the mariposite bearing rock. When the ore bearing solutions came in contact with the quartz veins, mineralization took place near the contact…

The location of the high-grade pocket within the quartz veins in usually related to much structural features as change in thickness of the vein, split in the vein, intersection of the vein with other veins, or fractures or change in dip or strike of the vein.
 By Michael Miller

07/17/2008  2:17PM

Below is the last of three reports I found in our achieves, which paint a good picture of activities a dozen years ago. This was the year the company issued a stock dividend. Hope you find them interesting.

~ Executive Summery ~
Third Quarter, 1995
What’s New?

· Increased pump storage on the 2400 Level
· 5,000 fozt from the 1719 heading
· Tailings dam on the 1900 Level broke
· Gold on the 2600 level in the 2483 Winze
· Significant labor turnover
· Sixteen to One is on the Internet
· Rainbow exploration

PERSONNEL

1995 probably represents the highest turnover of underground employees to date. Ernie Locatelli and Walt Grimes are out on disability for prior employment back injuries, Scott Robertson went to Newmont in Nevada, Dave Brown got a job as a trainee mineral officer for the Us Forest Service, Jason Bell and Tom Alling went mining on their own, and Glenn Knapp went to Brushcreek.
We are still competitive in the local employment field, especially with respect to Siskon and Brushcreek. Out wages are lower ($15 versus $20), however our working conditions and bonus program are far better. Also, this turnover is far less than what Siskon and Brushcreek are experiencing.
The only two terminations that concern me are Scott and Dave’s. I have discussed this with Mike and the general approach is to create a form of a reward system whereby people are compensated with increasingly greater 401K (i.e. company stock) depending on the length of employment. There should be at the same time some form of punishment for early leaving/

Present labor force consists of:
Miners:
· Mark Loving
· Billy Joe Van Meter
· Dan McCloud
· Britt McDaniels
· Tony Langdon
· John Covert
· Sam Griffith
· Jeremiah Farrell
· Fred Lacey
· Jake Venable
· Jay Noble
· Mark Fussell
· Ray Standring

Hoist:
· Steve Shappert
· Dan Stafford

Surface:
· Gar Cochran
· Kenny Newell
· Mike Gray
· Rick Harmon (office)

Salaried:
· Ian Harey
· Chuck Baird
· Mike Lucas
· Jonathan Farrell

Rick Harmon has moved from the specimen department to the mine in capacity of administrative assistant/office manager as well as company information administrator on the Internet.

PRODUCTION

Over 5,000 troy ounces was recovered in June 6’ in from the old timer’s face in the 1719 heading above the 1700 level. This target was delineated from metal detector signals and reported historic production. High-grade from the preceding month came from a spot immediately above the 1700 Level as located by metal detectors.
An old tailings dam from the Royal Gold days gave way at the same time. Heavy rains over winter saturated previously dry tailings, causing the wooden bulkhead to fail and spreading 600 tons of tailings along 350’ of drift on the 1900 Level. This access became important to us in order to continue mining the 1719 Level and two large blocks of ground below that area. Our present crew expects to complete this clean-up work by the end of November 1995.
The 2483 Winze project incurred setbacks due, again, to increased influxes of winter storm generated ground water. Our pumps suddenly became marginal in keeping up with demand. We dealt with this by building a reinforced concrete bulkhead on the 2400 Level. The advantage is increased pump storage from the 2400 Level to the 2200 Level. The disadvantage is loss of target areas on the 2400 Level north of the 2483 Winze.
Gold is expected to come from two areas and hopefully more: the 1719 and the 2483.

PRESENT AND PROPOSED HEADINGS

· 2600 Level drifting north and south
· 1585 Raise (almost completed)
· 2211 Raise (one more month)
· 1900 Level tailings removal (one more month)
· 1719 Gold stope on hold until 1900 Level is cleared

· Proposed headings include the 1571, 1900 M drift, and the Rainbow

EXPLORATION

For the purpose of testing geophysical instruments underground we have constructed a test zone off the 1500 Level south. It consists of a series of holes drilled in a measured pillar at various depths from the face.

Geonics – In September 1995 we rented an EM61 from Geonics, Canada. We have used the EM61 before underground with some success, however the instrument was new and changes were in the works. The EM61 can see a 6# rockbolt through 9’ of rock. At the same time we sent two high-grade specimens to Geonics, which they used to measure signal responses from. The Electro Magnetic signal produced by the machine generates eddy currents in the target. The signal strength and time taken for the eddy current to drop off is measured. High-grade gold has a very fast drop-off rate. (10 microseconds) The EM61 is not capable of handling such a fast gate. New instrumentation they are working on will. Time frame is 2-3 months.
Acoustic Tomography – Bill Honjas from William Lettis & Associated, Inc. is very eager to employ high resolution Tomographic Imaging Techniques underground. Bill seems to be very qualified and the project has merit. My hesitations are discussed below.

Jim Wright:
Jim is an individual from Yreka that the company has entered into confidentiality agreement with to test his Pocket Gold Locator I and II. His background is in radar techniques. Contrary to some other radar experts, Jim is persistent enough to overcome early obstacles and obtain encouraging results on the surface.
It has been our experience over the past three years that the field of geophysics is vast, complex, and expensive. Due to the aforementioned observation, various “experts” all have their own narrow field of interest and knowledge. This leaves us with two alternatives:

1) Continued hiring experts until we have blanketed the field and crossed a suitable system for this deposit, such as the conventional metal detector.
2) Retain either a consultant or the university system to identify all geophysical parameters of our deposit and research principles of geophysics as they apply to this deposit. Then mathematically determine what parameters would be suitable for locating and identifying high-grade pockets, and research what instruments are commercially available to fit those parameters.

Proposed costing for this research would be around $20,000. This figure is a fraction of what has been spent in that direction to date.

WHAT’S NEXT

I propose to delay milling until some time in 1996. There are still two months of work to complete the fine ore bin and be ready for processing. Several thousand tons of or ore is stored on the surface and underground. It would unnecessarily stress the work force to rehab the mill, surface underground ore, process ore, and deal with tailings.
The Rainbow target, once delineated, may be reached by conventional drifting and raising. Put into balance with some viable small block targets and a well-running 2483 Winze, this exploration target would make a lot of sense.
Rock from the 2600 Level is handled 7 times before it enters the mill flow sheet. My philosophy is to verify and block out the ore continuation below the 2400 Level down to a 2800 Level. Once blocked out, do some long-term planning of how to improve material handling from the level by i.e. a vertical shaft, before mining that block and deepening the 2483 Winze below the 2800 Level.
I feel very confident that the ore zones will continue down depth. Once we verify that extrapolation, it would be too easy to continue mining with the present inefficient system in place. Remember, multiple handling of rock was one of the main pitfalls of the old company when it ceased operations.
 By Michael Miller

07/16/2008  4:04PM

Second of three reports for your review during a very exciting time in Alleghany. Our metal detector technology changed every aspect of how to mine the Sixteen to One high-grade pockets. Many of the specimens now for sale in the gold colection were found during this time. ~

Executive Summery ~
Third Quarter, 1993

Present Status
Labor force - Personnel at the office have increased from two to three, and the mine from 12 to 13. During this quarter and into the next, we are doing major evaluation of long-term projects and upgrading of mine maps onto a CAD system.

Short-Term Development Mining Projects:
2203 – This area, mined by Ernie and Glenn, has produced some the most beautiful and highest grade gold encountered by us so far. It is expected that this crew will remain there until at least the end of this year.

1333 – A new block of ground discovered by Randy. It is located in the vicinity of the Ophir and Sixteen junction with the hanging wall mined out. Randy and Tom have underhanded approximately 500 ounces of heavy gold with arsenopyrite. They have set up a slusher and are ready to start raising up the gold. This block is approximately 100’x 100’.

1783 – Gordon and Fred have virtually completed this area, which produced 323 tons of good mill rock and 70 ounces of high-grade.

849 – Comically also know as the $8.49/ton slope, this was a GPR target with some high-grade in the face. We spent a month on verifying the target, which proved to be wall rock inclusions.

2283 – Mark and Scott have almost completed rehabbing this area and are getting ready to continue this raise for another 60’ to the 1700 level.

RIMtech – It is anticipated that during the next quarter Mark and Scott will have evaluated the three major targets in the 2283 area.

Gold Production:
High-grade – As may be seen from the enclosed monthly gold production table, in the third quarter we produced 1880.42 fozt in bars and 579.41 fozt in specimens. Year to date gold production is 2945.32 fozt in bars 759.35 fozt in specimens for a total of 3704.67 fozt. A sample high-grade lot report and summery of monthly gold production are included in this report.

Specimens – Tom Woodfin will be spending more time on cleaning and marketing specimens. He will accountable for all specimen gold, with crosschecks by Mike and myself. I will process the high-grade lots at the earliest opportunity after the volume accumulates to 230lbs, but will not be responsible for specimen gold kept in the vault beyond the maximum value to be determined.
It is my estimate that we have between 1335 and 1558 fozt in the bank and vault in the form of specimens. At present we have an estimated 400 fozt of specimens in the mine vault.

Mill Rock – At this time 900 tons of mill rock, minimum grade 0.2 fozt/ton, are stockpiled on the top landing.

Mill Concentrates – We reworked three barrels of mill concentrates and then sent a total of 16 barrels (gross weight 16,760lbs) to Asarco in Montana. Estimated gold value is $35,000.-

Metal Detecting – This quarter we commenced a program to drill and shoot weaker signals in a systematic manner. This program has been put on hold with the gold find in the 1333.

Safety and Compliance:
CalOSHA and MSHA – We continue to get excellent reports from rigorous inspections. This crew’s member one priority is safety, and we remain free from lost time accidents since Butch’s mishap during the 90-day program.

Water Quality – The EPA has mandated a new series of compliance figures for water discharge. These figures are being forwards to us in our new permit and we will be given 2-3 years to bring this facility into compliance or approach the legislature to change these values.

SMARA – We continue to get out from underneath the classification on Surface Mining and Reclamation Act with its accompanying $2,000 annual fee.

BLM – We have paid the $100/unpatented claim as well as performed a $100 worth of annual assessment work per unpatented claim for both our land in Alleghany and the Brown Bear.

Security – Two elaborate security systems were purchased and installed. These systems are concealed and will record motion around the lower portal, the upper landing, and inside the vault. Tapes are reviewed on a weekly basis or whenever foul play is suspected.

Future Status:
Gold – For the month of October it is expected that gold production will be minimal because of the amount of deadwork in the 2283 and 1333. However, the 1333 and the 2203 have excellent potential for gold discovery.

Targets – Again, we are rapidly running out of areas to go mining along this line of targets. This may change at any time with the discovery of additional mining blocks or the success of alternative exploration methods such as RIMtech.
Chuck Baird will be giving a presentation on the merits and status’ of several long-range development programs. All of these programs would create an unnecessary burden on the Company if we were to start them with resources at hand.
 By Michael Miller

07/14/2008  3:00PM

~
First of some past reports prepared for director meetings by mine manager, Johan Raadsma.

Executive Summery ~
2nd Quarter, 1993
Labor forces:
Personnel at the mine have increased 11 to 13. Chuck Baird was hired to delineate targets below the 1500 and 2400 levels, and Scotty Robertson is a new miner. There were no resignations or lay-offs.

2200 Level:
Ernie and Glenn are raising from the 2200 to the 2050 level, a distance of approximately 150. 100 ounces of solid slugs were found on the footwall, raking flatly up dip to the North.
RIMtech has completed the survey on this level.

1500 Level:
Mark and Scotty broke the 1584 raise into the 1250 level. Utilities were extended from the 1500 into the Red Star stope, through the 1584 raise, for future work. The level is now well ventilated.
The 1500 level is surveyed and mapped. Chuck has made cross sections of the ore zones in that area to determine drilling targets, if any.

1700 Level:
Gordon is minimg above the level in the 1785 area, when his other engineering duties permit.

Metal Detection:
On June 1, Randy and Tom commenced a program to selectively drill and blast weaker signals. This entails running airline to a block of ground and drilling all signals within the range of influence of the utilities. Their starting block is the Eagle Raise area.

Small Block Mining:
We have five small blocks that will be mined and the ore taken to the mill. There are numerous other small blocks that will be mined, but the ore may need to remain in the stope. These blocks all show gold or metal detectors indicate signals. Mark and Scotty heave set up on the 800 level to tackle the first one.

2400 Level:
The level is pumped out, however a permanent pumping station has not been installed yet. Gordon has run some utilities to the level and is prepared to survey. Chuck will map the level and delineate drill targets.

Ore/Waste:
Over the period of 4/1/93 thru 6/7/93, 258 tons of ore and 306 tons of waste were stockpiled on the surface.

Exploration Methods and Equipment:
Gordon is keeping detailed accounts of all the exploration techniques and equipment employed in the mine. The following is a brief summery.

Person/Method: Status:
1) Ray Wyatt – electron activity Adapting
2) San Jose GPR Phone check
3) Mad Hungarian – electron activity Inactive
4) Tom Fenner – GSSI GPR Exploring
5) RIMtech – Radio Imaging Modeling
6) Psychics I Inactive
7) Psychics II Inactive
8) Geonics EM61 – Canadian MD Adapting
9) Jim Allen – Consultant In contact
10) Lawrence Livermore Lab Call
11) Menlo Park Technology Call
12) Cosmic Ray Monitors Adapting
13) Prof. H. Frank Morrison – Cal Berkeley Coming
14) Microwave dielectric meter Inactive
15) RIMtech – 3’ detector Discussing
16) Deliverance Brothers – adapted White In use
17) GISCO Sending info
18) EG & G Geometrics Inactive

Metal Detectors:
1) Minelab In use
2) Garret Gold Stinger Call
3) Midas Call
4) Compass – Gold Scanner Call
5) White’s Gold Master II In use
6) Tenetics/Bounty Hunter Call
7) Hot Head Profession Search Coil Call
8) Omnitron 2/Filter King Data rec’d
9) Laser Temperature Sensor Sending info
10) Hand-Held EM equipment Call
11) In-Hole MD – Falcon Gold Probe Sending info

RIMtech:
The attached diagrams represent data collected by four RIMtech employees over a four-day period. Radio imaging waves were transmitted and received between the 2200 and 1700 levels, and the 2200 and 2050 levels. The result are difficult to interpret due to the many factors such as vein thickness and splits. So far we know the system works, but we don’t know how effective it is until we mine some targets. We will meet with two RIMtech employees all day June 22nd to discuss these results and prioritize targets.

GPR:
GSSI sent their best man, Tom Fenner, out for two days. Although he is very encouraged by the data he received, we yet have to fulfill that encouragement. One target on the 1700 Level proved to be a wallrock inclusion. Another target at the 800 Level shows promise and we will mine that this month because we have MD signals on three sides.

The Future.

Gold:
With one crew detecting/mining we expect to maintain a 200+ monthly production. This will hopefully be supplemented by gold from two other mining crews working “long shots with large pocket possibilities”.
Besides going for the “sure thing”, we will remain flexible and use the two mining crews to prove or disprove new exploration targets such as determined by RIMtech and GPR.

Targets:
We are progressing from metal detecting to metal detecting/drilling to small block mining to long-term development. Chuck is mapping and analyzing the area below the 1500 level Red Star and 2400 level Sixteen vein for future development. This will include the suggestion for 300-400 foot drill holes with a core drill that we own. The method of mining the development targets will depend on how successful we are in our small block mining program.
~ Other Projects ~

Brown Bear:
· 577 acres of patented, 400 acres of unpatented.
· Historical production of 500,000 ounces Au from 500,00 tons.
· Ray Wittkopp indicates potential of 10,000ozs/year for 5 years.
· 30 minutes outside Redding, CA.
· Environmentally friendly district.
· No known existing environmental hazards.
· Property has a minimum of $50,000 net timber value.
· Optional at $600 for two or three months.
· Indicated purchase price at $300,000.
· Patented property tax of $1,927.19/year

Forest Project:
· 16-1 has this property.
· Good time to attract joint venture partner.
· Management costs will be shared with Sixteen to One mine project.
· Sixteen to One mine will not be able to do this for many years.
· All permits are in place.
· Ore can be milled at the Sixteen mill.
· Buildings are in good shape.
· This company needs activity in Forest on its unpatented claims.
· Strong vein system and past production in Forest.

Red Ledge:
· Unpatented claims.
· History of museum quality high-grade specimens.
· Possibilities of lease option.
· Warrants quick, low budget look.

Others:
Upon further development of other technologies we need to be ready to acquire other properties exhibiting similar favorable vein and gold characteristics as ours.
 By Michael Miller

04/23/2008  12:10PM

The Mountain Messenger Vol. LXXX Saturday April 15, 1933

Headline: Sierra County Is Discovered By “Believe It or Not” Ripley of Examiner Fame

Story: Had it not been for the famous Ripley, who goes poking about looking for unusual things, Sierra County might have gone on indefinitely without become known to the thousands upon thousands of people who live in the cities of the bay district.

But, “believe it or not” Ripley finally found us. In a recent issue of the San Francisco Examiner he tells about the 164-pound chunk of quartz which was taken out of the Sixteen to One Mine at Alleghany in 1927, which contained $26,800 worth of gold.

The account of the find was accompanied by a photograph of the high-grade, which seemed to make quite an impression on Ripley. But, believe it or not, that gentleman could learn many more interesting things about Sierra County besides the fact that the richest gold mine in the world, for its size, is located here. End of story.

Well, will someone “who lives in the cities of the bay district” please find a copy of that San Francisco Examiner so all of us can see that chunk of high-grade?
 By SCOOP

09/18/2007  5:26PM

Mike is preparing documentation from the many reports written about the Alleghany Mining District, the Sixteen to One mine and the nature of the gold deposit as it relates to reserves. The Company dramatically shifted emphasis to find financiers who understand risk, see a future in gold and have the money or access to money to join the Company in its development. He seems serious this time to find the right combination of people to launch his program. Gold production has been unbelievably down this year, which probably drives him, as does the strong rise in the spot price of bullion. Also the gemstone (slab) market is very strong.

Scoop walked upstairs yesterday and found historic reports scattered all over the desks and floor and asked, “What’s up?” “Same old question comes up, that’s what’s up” was Mike’s rather repugnant reply. So Scoop attacks with, why the attitude big fellow? Here’s the story.

The Alleghany Mining District has one of the most successful and unconventional gold vein systems the world has ever seen. Of the top ten gold concentrations most are from the Sixteen to One, Oriental, Rainbow and Plumbago mines. All are in Alleghany. The Alleghany Mining District includes the longest productive gold mine in America, perhaps the world (the Sixteen to One). The Company continues to mine gold going into its third century. Owners have benefited over the years from dividends, as has the regional economy. The proof abounds. One reoccurring question is, “What are the mine’s reserves?”

Active mining people like Michael Miller (president), Ian Haley (mine manager), Ray Wittkopp (mine geologist) and others who remain anonymous must deal with people, mining wise or not, that are brainwashed with the concept of reserves and how it must be applied. Many serious financiers, investors or gold bugs have missed this golden train because of the verisimilitude in evaluating a gold mine opportunity predominately with reserve accounting. These mines have no reserves. So the next question that bright financiers ask is, “How do you know any gold is left and then how much?”

Scoop walked into a room full of open reports as Mike works to answer the reserve concern.. He sort of covered his paper mess except for a report written by a student from Mackey School of Mines in Reno. The student prefaced his report with a pretty cool quote, which was submitted to Dr. Jack Daemen on December 5, 1990:

“In the first place, then, I will lay it down as an axiom, that the mines of California are inexhaustible…In many places rich discoveries have of late been made far below the surface…but seeking for it at depth…is the work of chance and requires capital. But such is the character of the American people, that they will never stop their researched until every foot of earth in this vast El Dorado has been prospected to the bedrock, and two hundred years from this time will find the Yankees digging for gold on the western slope of the Sierra Nevada.”

Franklin Street
California in 1850
R.E. Edwards and Co.
Cincinnati, 1851, pp. 37-38
 By Michael Miller

07/23/2007  4:07PM

Office of
GEORGE F. TAYLOR;
County Surveyor,
Civil Engineer,
U.S. Deputy Mineral Surveyor,
Licensed Land Surveyor.
Downieville, Cal.
Nov. 10th, 1907

Mr. Jas. H. Hurin,
Los Angeles, Cal.
Dear Sir: -
On July 12th, 1907, I finished a survey of the South Fork Mine at Forest City, California, such survey consisting of a retracing and marking of the surface boundaries along the South side of the claim and a survey of the South Fork tunnel.
I had previously, during the past 13 years, made surveys of many of the adjoining mines, such as the Young American, Red Star, Osceola, Tightner, etc., and collected all the maps available of all mines in the district.
I have had access to the maps of the Bald Mountain Company, Bald Mountain Extension Company, Red Star Company, and Ruby.
The accompanying map is compiled from my own surveys and the above mentioned maps, and embodies all the data obtainable bearing upon the gravel channels and quartz claims in the district under consideration.
The South Fork Drift Mine is situated at Forest City, Sierra County, California, on Oregon Creek (one of the tributaries of the Middle Yuba River) at an elevation about 4400 feet above sea level.
The region abounds in ancient euriferous gravel channels of many different ages or periods, which may be distinguished one from the other by their different elevations, and the character of the material they contain. The most noted of these channels is the famous “Blue Lead” that can be traced from Southern Plumas County through and across the Western end of the South Fork Claim where it has been worked out.
The workings of the old Bald Mountain Mine were principally on this channel. This channel is colored red on the map. Another channel shown on the map in green, and marked “Deep Channel not worked”, runs through the Bald Mountain ground and into the South Fork. The presence and extent of this channel is determined at various places by developments made by the Bald Mountain tunnel, which crosses the channel in two places in both of which shafts were sunk into the channel. At one point a small portion of the channel was breasted (see map) and this breast is said to have been extremely well, but on account of the large amount of water in the channel, it was not practicable to work it through the 60 foot shaft from the Bald Mountain tunnel. This is probably the same channel as that marked “small channel” crossed by the South Fork tunnel, the difference in size being due to the fact that the Bald Mountain and Extension tunnels crossing the channel 60 feet above bedrock, shows the width between rims at that elevation, while the South Fork tunnel shows actual width of gravel.
This channel was worked by the Ruby people North of the Bald Mountain lines.
Another channel shown by dotted blue lines on the map leaves the Ruby Claim, where it has been extensively worked at a good profit, and extends through the Bald Mountain Extension, South Fork and Maple Grove, into the Red Star, where it has also been worked to a large extent, and where pay gravel is said to still exist in large quantities.
The Eureka tunnel on the Red Star Claim is now being re-opened for the purpose of working this gravel and developing the Tightner Quartz Ledge, which also crosses that claim.
The existence of this channel is shown first by the breasting in the Ruby Mine; second, by a drift from the Bald Mountain tunnel near its North end, and extending Easterly into this channel, where a shaft was sunk without reaching bedrock; third, by the Extension tunnel which crosses the channel for a distance of 1300 feet, where it was not bottomed; fourth, by a tunnel on the Maple Grove Claim (not shown on the map), which penetrates the rim of the channel but does not bottom it. Considerable gold has been taken from the rim gravel on this claim. Fifth, the workings on the Red Star. It will be observed that of all the openings mentioned, only those on the Ruby, where the channel still extends South, and those on the Red Star where it still continues North, were deep enough to reach the bottom of the channel. The other openings are too high.
A fourth channel shown as entering the Northwest corner of the South Fork has been worked by the Extension people to the extent indicated on the map. That portion within the South Fork lines was worked from the Bald Mountain Extension tunnel by means of an incline, having a vertical height of 65 feet above the tunnel.
Many expert gravel miners contend that this channel continues through the South Fork ground, substantially along the yellow line marked “Apparent course of South Fork channel”, as the channel had a trend in that direction as developed by the breasting above. Others maintain that this channel is a portion of the Bald Mountain channel, and should join the same just East of the “Dike” which crosses the South Fork line and that the continuity of the channel is broken by the channel shown in dotted blue lines, which being deeper, has cut out the other channel.
Mr. L. D. Davis, Mining Engineer, who made all the surveys for the Extension Mine, and Mr. Walter Lawry, Superintendent of that mine, hold to the former view, and I believe their opinion is worthy of consideration. In any event, it is absolutely certain that the gold originally in that portion of the South Fork channel below the point worked by the Extension people, is still on the South Fork Claims, either in that channel which continues intact through the South Fork claim, or contained in the deeper channel which (if the other channel is not intact) has cut it out.
It then appears that there is no question that a large body of pay gravel crosses the South Fork Claim, the only difficulty being to locate it. These old gravel channels often, if not always, show some evidence of their course upon the surface.
The Bald Mountain Channel may be traced on the surface from Forest City through the Bald Mountain Claim, and through the Ruby to the “City of Six”, where it breaks out into the North Yuba River, by following the lava cement which filled the original depression or valley of the stream when the first lava flow occurred.
The same indications show the South Fork channel following the yellow line marked “Apparent course of South Fork channel”.
Reference to the map will show that the face of the South Fork tunnel at the time of my survey, was within 400 feet of the channel. I am not informed as to the distance this tunnel has been extended since July 12, 1907.
QUARTZ VEINS
The quartz veins of Southern Sierra County has during the past thirty years produced several million of dollars, most of which has come from the two principal veins which I will call the Plumbago and Tightner veins. These veins can each be traced for several miles.
The Plumbago Vein has a Northwesterly course, with a dip of about 45° to the Northeast.
The most important mine on it is the famous Plumbago, situated about two miles South of the South Fork.
Nobody except the owners knows what the Plumbago has produced, but that it has been extraordinarily rich is well known.
During the past ten years the present management has taken out over a million dollars; probably $1,500,000 would be a conservative estimate.
North of the Plumbago are the Clute, Crafts and Hope Extension Claims (now part of the Plumbago property).
These three claims were formerly known as the Hope Quartz Mine, and were worked profitable many years ago. Adjoining the Hope is the El Dorado with a record of $150,000.
North of the El Dorado of the same vein is the Yellow Jacket, (owned by F. J. Hauber) and as yet undeveloped.
North of the Yellow Jacket is the Osceolo, one of the earliest locations in the district. It is estimated that over $100,000 has come from the Osceolo. The Osceolo is shown on the map.
From the Osceolo the Plumbago Vein enters the Red Star Claim.
The Tightner ledge runs in a Northerly direction with a dip of about 45° to the East. Its course is not exactly parallel with the Plumbago vein, but bears toward that vein going North.
The principal mines on this vein are the Rainbow, which has produced over $700,000 and is still turning out large quantities of bullion, and the famous Tightner Mine, which has attracted the attention of the mining world during the past two years.
If the Tightner and Plumbago Veins each continues its course going Northerly, they will unite on the Red Star Claim, and form one vein.
Many years ago, while the Red Star was being worked for gravel, a rich quartz ledge was uncovered at the point marked “Red Star Ledge”. Some ten thousand dollars was taken from a hole ten foot deep, and then work was discontinued on the vein, the gravel miners not appreciating at that time the meaning of the discovery.
About six months ago, a Company of Denver capitalists purchased this claim and are now re-opening the Eureka tunnel for the purpose of exploring this vein and working the gravel. It is apparent from a glance at the map that the vein is the same as the Tightner Vein, as it is practically on the same course. The survey of the South Fork tunnel confirms this opinion.
I found four quartz veins in the tunnel, only one of which is worthy of consideration as a possible continuation of the Tightner Vein. This is marked on the map as “Vein No. 1”. It is about 1-1/2 feet wide, has a strike of N. 12° W. and dips 60° to the East. The West wall is slate and on the East, 20 feet from the ledge is the serpentine. Its strike brings it directly in line with the Red Star discovery, practically on the line of the Tightner.
At the Tightner, the wall is slate, and the serpentine occurs from seven to twelve feet East of the vein- - conditions almost similar to the vein in the South Fork.
There is every reason to call this vein the Tightner ledge, and it should be exploited by drifts running North and South, particularly South toward proven ore bodies.
About 1800 feet of this vein exists between the South Fork tunnel and the North boundary of the patented Red Star Claim, which is subject to location as a quartz vein.

Respectfully,

GEO. F. TAYLOR
C. E.
Co. Surveyor
U. S. Dep. Min Surveyor.
 By Michael Miller

05/30/2007  9:06PM

GOLD ALLOYING

The metals for alloying are weighed in troy ounces, and it is necessary to understand the weights used.

12 oz. troy = 1 pound troy
1 oz. Gold (troy wt.) =20 pennyweight (dwt.)
1 dwt. = 24 grains (gr.)
=480 grains = 31.10 grams
1 grain = 0.065 gram (gm.)
1 gram = 15.43 grains
31.10 grams = 1 oz.
 By Michael Miller

05/29/2007  11:57AM

Years ago our company and crew went to San Francisco for an outing at the Pacific Stock Exchange. We set up our high-grade furnace on the front steps, melted 100 ounces of gold and poured a gold bar. The event was coordinated with friends of the old mint, which was closed. “Save the Mint” was the shared battle cry. Here is a slice of old California history.

On July 8, 1852, President Fillmore signed an act authorizing a branch mint in California. Its construction took a long time for many reasons but on May 26, 1870 the cornerstone of the Mint was laid. The building opened on a rainy Saturday, November 5, 1874. The Mint rode out the severe earthquake of 1906. By 1934, one third of the United States’ gold reserve was stored in the vaults of the SF Mint. In 1961 it was designated a National Historic Landmark. It had a little life as a museum but the Treasury Department planned to close it permanently in 1994. Senators Boxer and Feinstein arranged a reprieve until December 30, 1995. The Sixteen to One got involved during this crisis time. The crew set up a gold pour on the steps of the Pacific Exchange. Afterwards, we all (most of the guys were either drunk by this time or hung over from the booze consumed on the chartered bus ride from Nevada City to SF) marched over to the Mint. The plan was to sell special gold medallions from the gold in the pour to raise money to save the Mint. Willie Brown was to come but he sent a rep; however in 2001 he established the San Francisco Old Mint Task Force to keep the Granite Lady alive.

In 2003, the San Francisco Museum and Historical Society took up the cause. Senators Feinstein and Boxer introduced federal legislation to authorize a commemorative coin honoring the Old Mint. Finally Mayor Brown bought the national landmark with a borrowed silver dollar that was minted in the Granite Lady 124 years earlier. The goal is to complete the project and give San Francisco a world-class museum. The Old Mint could use the Sixteen to One gold collection as a world class draw. Our gold collection is one of the great single mine gold collections and perhaps the greatest for its variety. Is there a person or company interested in bringing this collection to the Old Mint in San Francisco, gateway to the west?

Our top specimen of interest is “the Whopper”. Another is the “Crystal Palace”. We have been very careful in preserving the provenance for each specimen, which adds greatly to the value. A leading mineral specimen authority, Bryan Lees, said that interest in mineral specimen collecting is growing and hopes more specimens find their way into museums. He sold a gold specimen in 1999 called “the Dragon” for $350,000. It resold in 1999 for $650,000 and recently sold again for $2 million. The Whopper and its story is every bit as appealing as the Dragon.

My favorite specimen doesn’t have a name yet. Both placer gold and lode gold are embedded in quartz, which is as unusual as any geologic structure can be. It is a priceless example of nature’s ways. There are many more and each has a story, appealing to children and adults. The Company held onto the specimens through all the financial turmoil because it belongs as a collection, but time is running out.

Please broadcast this opportunity to philanthropic individuals or companies.
 By Michael Miller

02/28/2007  3:33PM

The following story appeared on the front page of the Business/Weekend section of The Union (Saturday, August 25, 1990, above the fold). Below the article about the Sixteen to One mine is a profile of Dan Walters entitled “Columnist takes on State Legislature”. Today Mr. Walters is a senior editor for the Sacramento Bee. Other headlines inside are: “Saddam Hussein sending Dow sliding”, “U.S. Oil industry may benefit from standoff in Persian Gulf”, “Bundesbank Chief heading monetary unification”, “Are you willing to pay for Organic food?” An ad says, “Top CD Rates are 8.125% to 8.375%.”

I found the newspaper in a box, buried in a corner and read the story, wondering, “What the heck did I say sixteen years ago?” This was before the Company bought out the lease and before metal detectors. Many readers may not know that Shell Oil’s Billiton came very close to taking the lease from Royal Gold in 1990-91. The Company bought back the lease in June 1991. Metal detectors opened the floodgates of unmined gold in January 1992 . A dividend was issued in 1995 and the mine almost reached the goal of $3 million in 1996.

THE UNION, Grass Valley-Nevada City, Ca. – Saturday, August 25, 1990

Gold mining: One man sees a comeback

Alleghany miner plans the reopening of the 16 to 1 mine after equipment purchase

By CHARLES GALLARDO
The Union

ALLEGHANY – California gold mining is considered by most to be a closed chapter in history, a bygone of great men and big money.
But not to Michael Meister Miller. Gold mining is as clear and present as the ledger sheet sitting on his crowded desk at the Original 16 to 1 Mine’s corporate offices here.
Miller, president and leading shareholder of the 16 to 1, is a man with big dreams for the future of hardrock mining and the guts and faith to pursue it.
Miller, a youthful and energetic 48-year-old with hair flowing to his shoulders, began reopening the mine when he became 16 to 1 president in 1983. By 1989, the 16 to 1 had been placed on the Pacific Stock Exchange and was ready to start mucking-out gold.
The 16 to 1 mine operated from 1911 to 1965 when it was closed because of the cost of extracting the gold outstripped the selling price. The old Nevada City Nugget once described the 16 to 1 as “the greatest highgrade producer in the world.”
“Our goal is to get the mine into production on a scale that will place the company in self-sufficiency,” Miller said.
The mine is not producing because $1 million to $2 million of work is needed on essential equipment.
“Once we are funded, we will be producing gold in four months. And that is a heavy thing for me to say,” Miller told The Union.
Miller is seeking investors but is in no hurry: Part of his corporate philosophy is to operate without obligation.
“We have no time pressured because we have no debt. We’re not spending more money than we are taking in,” Miller said.
However, even without producing gold, the 16 to 1 is still operating in the black. The company leases sections of the mine to the Kanaka Creek Joint Venture and, recently, to Billiton Mining Co., a subsidiary of Shell Oil.
The lease to Billiton, according to Miller, is a good omen for the 16 to 1. Shell is considering investing $6 million into exploration and development of the 16 to 1, Miller said.
Meanwhile, Miller is trying to locate, explore and produce gold from the infamous Red Star Mine, a section of the 16 to 1. This mine was surveyed incorrectly by Fred Searls, one-time president of Newmont Mining Co. and an all-time great mining engineer, in the 1960’s.
Another positive sign that only 20 percent of the mine’s vein system has been mined and production exceeds one million troy ounces of gold. Once the funding comes through and the mine is back in production, Miller’s goals are a $3 million annual cash flow by the end of 1994, and a daily output of 130 tons of gold ore per day and increase the number of shareholders on the Pacific Stock Exchange to 750.
A working mine operating in the black would obviously be good for the shareholders but additionally, according to Miller, would be a boon to the local area.
“Mining is really healthy for the community. We’re providing jobs and creating wealth.”
As for environmental concerns, Miller strongly states that underground mining is not damaging to the ecosystem. Looking out of his office window at the towering pine trees and clear blue sky, Miller said, “It’s because of our mines here that it is pretty. The miners want the surface for a buffer.”
“Nature is neutral to miners. Nature does not care who gets the gold.” The local opposition to mining – witnessed by the antimining initiative on Nevada County’s November ballot – stems from “the hardest emotions in people – greed, envy, jealousy and fear,” Miller said.
“I think mining is a pretty clean industry.” Cleaner he claims, than the fast-food restaurants in the Glenbrook Basin, spewing smoke into Nevada County’s mountain air.
“We, as a country, should be happy we became self-sufficient in gold,” Miller said. “I’ve become very bullish on producing natural resources within the state of California.”
He also is quick to point out that gold is used for more than just jewelry, wristwatches and coins. Today, its uses stretch from computer components to tooth fillings.
“There is a very real possibility to get the mine into certain level of production that will allow this company to pay dividends,” Miller said. That, he said, is “the ultimate goal.”
After two hours of talking about mining Miller has hardly paused for a breath. If the topic is about mining or anything having to do with mining, Miller has something to say. If the subject is the 16 to 1, he gets downright excited.
“You have to look at life with a cold, calculative eye,” he concluded. “but try to retain some optimism.”
 By Michael Miller

09/22/2006  11:11AM

On June 22, 2005, the Company continued its long standing objective of consolidating the great gold mines of the Alleghany Mining District with the purchase of the Gold Crown Mine and its satellite claims. We recently found the following articles published in 1953.

California Mining Journal

Another Sierra County Gold Strike at the Gold Crown Mine Alleghany, California
$150,000 to $200,000 per ton

Gold Crown Mine Makes One of Alleghany’s Richest Strikes

Alleghany, Sierra County – Operators of the Gold Crown Mine have confirmed reports of a gold strike.
Fred and Dan Giles and their mother, Harriette Duke, said a highgrade ledge was struck at a depth of 400 feet. A tunnel had been driven from the north side of the Middle Yuba River Canyon.
Mrs. Duke descried it as one of the richest strikes in the Alleghany District in several years. The mine is located between the Original 16 to 1 Mine and the Oriental Mine, both active producers.
Both the Oriental and 16 to 1 have high grade areas in which they mine only when the mill run of ore gets a little low in values.
The Gold Crown has recently gone on two shifts following the installation of new equipment including a mucking machine, Miner’s Foundry side dump cars and battery locomotive. The company is a Nevada Corporation.
When the writer was on the property July 14th Mrs. Duke expressed the opinion that a noticeable change in the formation predicted an early strike.





California Mining Journal
September 1953

More Details of the Rich Strike

As news was released about the rich strike at the Gold Crown Mine it begins to look like one of California’s biggest. In an interview with a San Francisco Examiner reporter Dan Giles stated that the rich strike will run between $150,000 and $200,000 to the ton of ore. He further stated that the rich strike was made after the miners had run a lower tunnel into the mountain for a distance of 1,500 feet. He also stated that last winter they were about to give up the job when their foreman, Al Novak, urged them to “stick it out.” At that time the miners were following a gabbro and serpentine slate contact.
Hal Wright’s Sierra Booster gives further detail as follows:
“The round blasted on July 20 showed the footwall of a quartz vein for about a foot, from which a small amount of high-grade was taken. That was the tipoff. After the next three rounds all rock had to be hand-sorted and many powder boxes were filled with high-grade – much of it jewelry in quality. Judge Wilford Hart, engineer for the adjoining 16 to 1 mine, says the gold looks as good as anything he has ever seen taken from an Alleghany mine.
In one small collection of the rock, approximately 25 pounds, it was estimated to run 40% gold. It’s the type of gold that brings $100 per ounce with the New York jewelers.”
In describing the formation the Booster says:
“Where contacted, quartz in the ledge runs fairly solid up to a foot in width on the footwall. Bluejay talc, sericite and quartz stringers in a conglomerate mass on the hangingwall side broadens the ledge formation to about four feet. Free gold appears principally in the quartz but is also found in the bluejay and slightly into the country rock. Clusters of arsenical pyrites are sprinkled in the formation, after following the talc and Sericite lenses besides appearing in the quartz. The gold itself runs from crystallized shapes to jagged and may be characterized as heavy and clear.”
“Point of discovery is 1,510 feet from the portal. The vein pitches 70° to the west and is exactly in position according to a projection made from the ledge outcroppings by Bill Vance of the 16 to 1 mine. From the tunnel level the ledge has about 500 feet of backs.”
“Following the strike stock in the mine became unavailable. Mrs. Duke, mother of the two Giles boys, owns 51% of the stock. There are about 350 other stockholders. The corporation was organized Aug. 3, 1949.”
 By Michael Miller

09/01/2006  8:17PM

STATE OF CALIFORNIA – THE RESOURCES AGENCY PETE WILSON, Governor
DEPARTMENT OF PARKS AND RECREATION
Marshall Gold Discovery State Historical Park
P.O. Box 265 / 310 Back Street
Coloma, CA 95613
(916) 622-3470 FAX (916) 622-3472





October 24, 1995


Mike Miller, President
Sixteen To One Mine, Inc.
P.O. Box 1621
Alleghany, CA 95910



Dear Mike:


Thank you so much for coming to the U.S. National Gold Panning Championships this October 7th and 8th. It was so nice to have you here! We really appreciated your generous donation of the gold specimens and the medallions for the contest winners. It was fun to have you do the announcing when you gave these prizes out too. It’s always a pleasure to see you and I know that everyone enjoyed your coming.

I hope one day soon to get out to the mine and see your operation. Fred Olssen from Australia said that he really enjoyed the tour (I was jealous). You’ve quite a responsibility, managing a mine with such notoriety.

Thanks again Mike. You’re the greatest!



In Appreciation,
//s//
Rosanna McHenry
 By Michael Miller

09/01/2006  8:16PM

SIERRA COLLEGE
5000 Rocklin Road . Rocklin CA 95677 . Tel.916-624-3333




Johan Raadsma
Original 16:1 Mine
U.S. Post Office 1621
Alleghany, CA 95910

December 16, 1994

Dear Johan,

On behalf of all of us in the mining department I want to thank you for taking your time to show us around the mine. All of us felt the tour was exceptional, and we appreciated how leisurely you conducted it. A number of the students commented that they had never seen that much gold before. Many of them had never been underground or seen the workings of a mill either, so the tour was a treat for all concerned.
Our spring semester will begin the last week in January. At that time I will contact you about looking for a way to remove some of the impurities from your gold. If you’re still interested we can arrange to meet and discuss the details. We will be delighted to do this, and I already have one student interested in the project.
Again, thanks for the excellent tour, and have a very Merry Christmas.


Sincerely,
//s//
Don Juergenson
Mining Technology
 By Michael Miller

09/01/2006  8:13PM

SOCIETY FOR MINING, METALLURGY, AND EXPLORATION, INC.
San Francisco Section of the American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.

MAILING ADDRESS: SF/AIME MEETING ADDRESS: Lakeview Club
P. O. Box 26645 Kaiser Building
San Francisco, CA 300 Lakeside Drive
94126-6645 28th Floor
Oakland





September 21, 1994

Original 16 to 1 Mine
ATTN: Mr. Mike Miller
PO Box 1621
Alleghany, CA 95910

Dear Mike:

I would like to thank you on behalf of the San Francisco Section of A.I.M.E. for your presentation last week. We have heard from several members who were in attendance and they wanted me to extend to you their appreciation.
The Original 16 to 1 Mine is historically known to many in the mining community but to hear first hand what you are doing currently was very interesting. The specimens you brought were also well received.
There was enough interest generated that I would like to follow up with you to arrange for a field trip to the mine this spring.
Thank you again for your time.

Very Truly Yours,
//s//
William A. Warfield



EXECUTIVE COMMITTEE OFFICERS

CHAIRMAN……………………………………………………………………………………………………………….Noel Kirshenbaum (415) 986-0740
PROGRAM CHAIRMAN………………………………………………………………………………………………Bill Warfield (415) 641-1994
COMMUNICATIONS……………………………………………………………………………………………………Peter Krag (415) 768-7261
SECRETARY-TREASURER…………………………………………………………………………………………..TJ Cox (415) 768-1234
GEM & STUDENT AFFAIRS…………………………………………………………………………………………Joe Hanzel (415) 604-3218
PAST CHAIRMEN……………………………………………………………………………………………………….Jim Woodfill
.……………………………………………………………………………………………………….Kevin Ashley
 By Michael Miller

09/01/2006  8:12PM

Nevada County Gem & Mineral Society
ROCK WRITINGS
November 1993
Page 8

IT’S 16 TO 1 THAT OUR OCTOBER SPEAKER WAS A WINNER!

MICHAEL MILLER, President and CEO of the 16 to 1 mine in Alleghany; CA. was our surprise guest speaker at our October meeting. Seldom has there ever been such a quiet and attentive audience as those lucky club members who attended.
The history of the 16 to 1 is a boom-and-bust gold country saga that appears to be having a happy ending. Founded in 1911, as a deep hard-rock mining company, it tunneled on with a fair amount of success until 1965. The cost of operations balances against the $32.00 per ounce price of gold eventually closed the mining operation in 1962.
There were always those who believed that the 16 to 1 could prove to be a good business investment. In 1975 the mine was re-opened and operated to a limited degree. Securing new backers and using new equipment in 1983 the mine swung back into full operations again. Now in 1993, the mine is successful enough to be listed on the Stock Exchange. It now owns it’s own land free and clear, and is currently debt free, thanks largely to the dynamic leadership of Miller and his dedicated crew of 17 employees.
On August 9th this year, a gold specimen weighing more than twenty pounds (141 ounces) of ‘butter gold’ ore was blasted out of a tunnel below the 1000-foot level. That white quartz vein was richer than anyone had guessed. On that one Monday, the miners recovered more than 500 ounces of gold from TWO different locations deep in the hard rock mine. New seams are now being explored as far down as the 2200-foot levels.
“It looks real hit-and-miss when you look at the paper figures”, said Miller, “But April, May and part of June was dedicated to dead work; de-watering, re-timbering and other maintenance. This is the pay-off for all that work”.
The one spectacular 14 inch long specimen, valued at over a quarter million dollars, was then displayed at the Nevada County Fair. The exhibit included demonstrations of mining techniques and equipment. This display was the hit of the 1993 Fair.
Miller is now exploring other ways and means to expand the financial base of the operation. As there are continual requests for tours of the mine, and requests for specimens of gold-bearing quartz, etc., he is giving serious thought to these marketing ideas.
At the close of his presentation, Miller answered members’ questions. Members asked about water pumping systems (over 80 gallons a minute), air circulation and compressors. How many miles of tunnels are being worked? (over 26 miles), are they still blasting? (yes). Do they use metal detectors? (yes, the best they can find.) and many other questions.
This was a really exciting program. Anyone who has ever dipped a pan in a stream, or pounded a quartz rock looking for color, shares in the 16 to 1 dream of “GOLD IN THEM THAR HILLS”.
Our thanks to Michael Miller for his fascinating program. We hope to hear from him again soon.

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PO Box 909
Alleghany, California 95910
 

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