August 18, 2022 

Ideal Time for Facts


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 By Michael Miller

06/09/2017  1:29PM

Supply/demand news on India’s gold market (GST).

The simplified taxation structure will make the gold supply chain more transparent and efficient. It should also boost India’s economy which in turn will support gold demand

Key points:
• At 3%, the GST rate announced on the 3rd June was lower than the industry had feared. Industry reaction has been positive.
• There are two important GST rates which will affect the gold industry: the 3% tax on gold products – which replaces the excise duty and VAT components, but sits on top of the import duty – and an 18% tax on services, which will affect small-scale artisans who design and manufacture jewelry for larger manufacturers.
• While the overall tax rate consumers face is likely to increase slightly, GST will bring benefits too. Firms will be able to offset the GST they pay against their revenues, and double taxation throughout the supply chain will be eliminated. Supply chains will become more efficient.
 By Michael Miller

05/05/2017  9:48AM

Gold mining in Mexico has a 500 years history of both commercial and artisan production. Today, gold and silver account for more than 50 percent of the country’s total metals output.

Over the last decade, gold production in Mexico stayed relatively stable; however, an uncertain gold price environment limited new mines openings in recent years. Most mining companies operating in Mexico focused on reducing costs and improving capital management. In 2016 gold output dropped from 135 MT to 125 MT. The decline, which was one of the country’s biggest, was partly due to harder and lower-grade ore types available.

One problem is that relatively little exploration is taking place. Last year, spending on exploration and development declined for the fourth year in a row to reach a 10-year low of $483 million. Mining in Mexico is a significant employment industry and valuable as an export producer of gold, silver and copper in that order. Expect it to continue.
 By abboseo

03/25/2017  11:52PM

Thanks for sharing this information. I really like your blog post very much. You have really shared a informative and interesting blog post with people.
 By cw3343

02/02/2017  5:34PM

Some good comments/info in the post below.

One thing they did not mention was the current strength of the US $, and the fact that it may become weaker (Trump has alluded that he would like a weaker USD - this helps any USA company that exports goods/services to countries who pay in other currencies). If the USD weakens, then that should be good for the price of gold (and other commodities in general). I do not want to get into it here, but there is usually an inverse relationship between the strength of the dollar and the price of gold/commodities. One of many caveats however, is the Federal Reserve Open Market Committee. If they continue to raise the federal funds target rate, a result should be a stronger US dollar. The USD is the reserve currency of the world, and will be for the foreseeable future. It's strength or weakness should have some effect on spot gold prices.
 By Michael Miller

01/13/2017  6:45PM

Information about gold has numerous sources. Many relate facts and opinions to support a bias view intend to support some theory, position or gain by the writers. My subscription to the World Gold Council goes back decades. It is required to declare ones interest from six categories. I checked ‘Gold Mining and Gold Technology”. Below is a summary from a report I received today. It covers investment yet you may find it interesting as I did.

Outlook 2017 World Gold Council
Global economic trends and their impact on gold

The gold price had a strong performance in 2016, rising close to 10% in US dollar terms (higher in most other currencies) and amassing multi-year record inflows through physically-backed gold ETFs - making it one of the best performing assets last year, despite a post-US election pullback. And the price has gained more than 5% since the Federal Reserve (Fed) increased rates in mid-December.

Political risk is rising. Europe will hold key elections in the Netherlands, France and Germany in 2017. The election cycle will happen “against a backdrop of continued citizen unrest, fueled by the ongoing uneven distribution of economic welfare.” In addition, Britain must negotiate its exit from the European Union. In the US, there are positive expectations about some of the economic proposals of President-elect Donald Trump and his team, but there are also concerns

Monetary policy is likely to diverge between the US and other parts of the world. The Fed is widely expected to
tighten monetary policy, but it is far from certain that other central banks may be willing and/or able to do so.
over the past century, gold has vastly outperformed all major currencies as a means of exchange. One of the
reasons for this is that the available supply of gold changes little over time – growing only 2% per year through mine production. In contrast, fiat money can be printed in unlimited quantities to support monetary policies.

Nominal interest rates are widely expected to increase in the US this year, but all the economists we spoke to
forecast that inflation will rise as well. An upward inflationary trend is likely to support demand for gold for three reasons. First, gold is historically seen as an inflation hedge. Second, higher inflation will keep real interest rates low, which in turn makes gold more attractive. And third, inflation makes bonds and other fixed income assets less appealing to long-term investors

Stock markets had a significant rebound in the last stretch of 2016. And while some stock markets are just recovering from lackluster multi-year performance, stocks in the US have reached historical highs. In many cases, valuations have been elevated, as investors increase their risk exposure in search of returns in a very low yield environment.

Until now, investors have used bonds to protect their capital in the event of a stock market correction. As rates
rise, this is a less viable option – and in the meantime, the risk of a correction may be increasing. The interconnectedness of global financial markets has resulted in a higher frequency and larger magnitude of systemic risks. And as Jim O’Sullivan puts it: “The [US economic] expansion will not last forever.” In such an environment, gold’s role as a portfolio diversifier and tail risk hedge is particularly relevant.

Macroeconomic trends in Asia will support economic growth over the coming years and, in our view, this will
drive gold demand. In Asian economies, gold demand is generally closely correlated to increasing wealth. And as Asian countries have become richer, their demand for gold has increased. The combined share of world gold demand for India and China grew from 25% in the early 1990s to more than 50% by 2016. And other markets such as Vietnam, Thailand and South Korea have vibrant gold markets too.

While jewelry demand in China has suffered from changing consumer tastes, the investment market has undergone a remarkable period of development. In little more than 10 years its bar and coin market has become one of the world’s largest. Trading volumes on the Shanghai Gold Exchange are increasing. And interest in new products continues to increase; we believe innovation should continue to support China’s gold market in years to come.

Gold is becoming more mainstream. Gold-backed ETFs made gold accessible to millions of investors, primarily in the West, over the past decade, but other markets continue to expand too. China has seen dramatic growth in recent years through Gold Accumulation Plans, physically settled gold contracts in the Shanghai Gold Exchange

In Japan, pension funds have increased their gold holdings over the past few years. In the corporate sector, more than 200 defined-benefit pension funds have invested in gold. In addition, more than 160 defined-contribution plans have added gold to their list of investments. We expect this trend to continue and expand into Western markets, where pension funds have had to rethink asset allocation strategies following prolonged exposure to low (and even negative) interest rates. In our view, this will result in structurally higher demand. Innovation is evident across all markets, but at the end of last year one development stood out. The Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI), with support from the World Gold Council, launched the Shari’ah Standard for Gold, opening up the Muslim world to gold investment.
 By Hans Kummerow

11/17/2016  5:05AM

Found this at the bottom:

"Mariposite formed when serpentine was altered under pressure by mineral-laden hot (650oF) water. The water, containing potassium, silica, carbon, oxygen, and other elements, flowed upward from sources deep in the earth’s crust along fractures, faults and fissures in the rocks. When these hydrothermal fluids reacted with the serpentine, they formed deposits of quartz, chromium-rich mica, sulfides, and occasionally gold. At that time these rocks were completely hidden under the surface of the earth. The ancestral Sierra Nevada began to began to rise 100 million years ago (Hill 1975) and the rock above the mariposite slowly eroded. The rich veins were exposed about 45 million years ago. Continued erosion released the gold from the rock and streams carried it down the slopes.

Mariposite rock and the varied quartz and gold veins are found along the mother lode’s Melones fault which separates the Paleozoic Calaveras Complex phyllite from the late Jurassic Mariposa Formation greywacke and volcanic rock."
 By Hans Kummerow

11/16/2016  4:54AM

Dear geologists on this forum:

"The appearance of Mariposite all over the Northern Sierra Nevada was caused by the same hydrothermal processes that caused the gold precipitation inside the quartz veins."

Is that true?
 By Michael Miller

11/15/2016  12:26AM

When I take people into the mine, I stop on the 800 level where there are magical open stopes, pillars and thick quartz. Included in the quartz is a "horse", a miners term for some irregularity dragged into the vein.

Most of the time a horse is a mass of country rock lying within the vein. This horse is mostly bluejay. I asked what makes this rock green? Copper is the favorite guess, which is not true. The answer is chrome.

For those geologists out there mariposite is a chromian variety of phengite, a siliceous variety of muscovite.

The real old timers believed that the appearance of bluejay held promise of gold nearby.
 By Hans Kummerow

11/14/2016  10:30AM

Thank you Big Al. I understand now what the miners mean when they speak of BlueJay.
 By Big Al

11/14/2016  9:11AM

Hi again Hans, I misspelled it, it is spelled Mariposite. Here is a link to more information and pictures. Big Al
 By Big Al

11/14/2016  8:54AM

Hi Hans, BlueJay is another name for Maraposite, it is quartz based with white and green to blue green characteristics, there is quite a bit of it in the Allegheny mining district. I have personally saw a lens at a mine I worked at that was over 50 feet long, it is a very hard rock. BigAl
 By Hans Kummerow

11/13/2016  8:25AM

Could readers of the Forum please give me some information on the chemical nature of the mineral that the miners call "Bluejay"?

In addition it would be interesting for me to learn more about the appearance of Bluejay in the neighbourhood of of gold-bearing quartz veins.
 By Michael Miller

08/19/2016  1:59PM

Consumer demand within two countries have acted as sponges for surplus gold in recent years – China and India - marked time during much of 2015. There was a noticeable upturn in interest later in the year. China increased the value of gold reserves to 1,762 mt by the end of December, worth $56.7 billion. The addition was 104 mt during the second half of the year. Indian imports totaled more than 900 mt of gold worth some $35 billion in 2015. 105 mt of imports in December alone.

For producer the main focus worldwide continues on cutting costs. Much of the industry benefitted from favorable exchange-rate movements, while the fall in the price of oil helped producers across the world as diesel costs came down

The Russian gold sector has been subject to some unwelcome influences over the past year or so, as the devaluation of the rubble against the dollar and the effects of economic sanctions imposed by the rest of the world over Russia’s annexation of Crimea from Ukraine have taken hold.

Chinese money may soon appear in Russian gold mining. Chinese gold miners have skimmed off the cream at home so today they’re looking at Russia with interest. They recognize that the ruble devaluation has made mining in Russia more attractive.

Although China’s gold output has achieved spectacular growth over the past 10 or 12 years, (World Gold Council (WGC), its reserve base cannot support current output levels. The bulk of the country’s production comes from relatively small mines. The “low-hanging fruit” in China’s gold deposits may already have been picked.

Three main factors contribute toSouth Africa’s decline from world leader to the current No. 7: cost of labor, cost of electricity, and the depth of the mines. The resources are there in the ground, but the economics of turning these resources into reserves are uncertain. OPINION: If South Africa largest gold miners are going to survive beyond the next few decades, a radical reshaping of the industry is necessary.
 By Michael Miller

07/07/2016  7:47PM

Very quickly, here is a news flash (July 7, 2016) that crossed my office from Calico Resource Corp. The officers and directors are pleased to announce that they sold out to Paramount Gold Nevada Corp via a court approved plan of “arrangement”. Love it! It used to be called reorganization under bankruptcy laws.

Look at how the insiders financed this raw land proposal to the public.

Common shares outstanding 2011: 15,275,127
Common shares outstanding 2012 29,923,504
Common shares outstanding 2013 = 38,669,547
Common shares outstanding 2014 = 51,557,212
Common shares outstanding 2015 = 75,785,794
Common shares outstanding 2016 = 102,445,845

The Canadians have another sweet accounting gimmick, all legal, I presume. It is called “Exploration and Evaluation Asserts”. While this remarkable asset basically stayed physically the same, its exploration and evaluation numbers explode from $140,795 in 2010, to $1,168,286 in 2011, $8,777,390 in 2014, $12,433,509 in 2015 and at the time of the “arrangement” is listed at $14,381,982. How does this happen when the cheap nike free expenses mostly listed are: investor relations, management and professional fees. They exploded and are most of the annual corporate expenses.

Keep your eyes wide open air jordan to what may be heading into the financial news as gold gains more attention. This game is as old as gold, when those crafty people centuries ago filed a little gold from the currency.
 By cw3343

04/11/2016  9:50PM

You are correct, kind of. The Washington Mine is in a community called French Gulch, NW of Redding, CA. They are one and the same mine. I believe the company used the names interchangeably - or referred to it as French Gulch, being the town that it is near.
 By Hans Kummerow

04/08/2016  6:16AM

The name "French Gulch" seems to be a part of several different underground operations in the Redding area.

On Shasta Gold Corp's website a company by the name of "French Gulch (Nevada) Mining" is mentioned as a whollly owned subsidiary of Shasta. But they are working the "Washington Mine" near Redding, not the "French Gulch Mine".

This habit of using small companies as subsidiaries for single mine operations is confusing to foreign observers.
 By cw3343

04/07/2016  8:55PM

Bullion River Gold Corp., parent company of French Gulch Mine, has filed for Chapter 11 bankruptcy protection.

The Reno company, which started mining in western Shasta County in 2006, said in court papers the bankruptcy was necessary because creditors were threatening to shut down its operations.

Bullion River Gold also claims it intends to reorganize. The company, which declared bankruptcy Feb. 27, lists $30.1 million in assets and $10.56 million in liabilities.

French Gulch is one of six subsidiaries owned by Bullion River Gold, a company started by a group of investors in 2003 under the name Dynasty International Corp. It changed its name to Bullion River Gold in January 2004.

Story here, but may be behind paywall (hit stop on your browser before the page fully loads and you may be able to read it):
 By Hans Kummerow

04/05/2016  10:38PM

French Gulch used to be a wholly owned subsidiary of Shasta Gold Corp.
And Shasta got several million Euros from Germany a few years ago. Among other purposes, to clean up a waste-water mess at French Gulch if I am not mistaken.
They had been operating a mill there and were using chemicals to extract the dore. The waste water was released in an inappropriate way and the person who was responsible for the operation of the mine got a six month jail term last year.
It all surfaced after a pipe broke and waste water found its way into a stream and a lake.

After a waste water treatment plant had been built operations were resumed. Until very recently, it seems. Could you check on that Mike? I do not want to do anybody wrong in case I should be mistaken.

When I talk to experienced German Investors about Gold Mining in California today everybody tells me that California has outlawed all leaching operations and that there is just no way to earn money in that industry in California any more.

Of course they do not know about "boutique gold mining" yet.
 By Michael Miller

04/05/2016  6:02PM

The story at French Gulch (west of Redding) says the investors stopped support. The crew came to work and was laid off that morning. I made a call to verify if the investors were from Germany. My recollection is the German investors were at the Ruby mine, which also closed down last year. When I confirm the mine that the Germans were financing, I’ll let you know.

Failures in mining outpace successes. It’s true going back decades, centuries. For success three ingredients are vital: a strong gold deposit, wise and dedicated people and working capital. Other factors include commodity price, location of operation and goals of management.

Over my forty years involvement in a small part of the industry (underground gold mining in California) the many failures of actually mining gold have similarities. During the wild days of the late 1970’s and early 1980’s some investors did well pushing stock. Many were left holding worthless shares. The game was easy to spot and took place in other fields than gold mining. Paper promotions date back hundreds of years and will always be around.

The Sixteen to One is different from most others. The company has a history to match its fine gold properties in California. Money issues have surfaced over our 150 year history of mining in Alleghany. When I took an interest in the mine in 1974, I found great prospects but a tired management. The owners must get good “at-a-boys” because the directors kept the property and corporation intact during difficult times for mining.

Three men who were not directors played a significant role during the 1960’s. Gold mining suffered almost to extinction due to the control of price slapped on America in 1934. Could any industry continue under the same restrictions? No. Up steps Fred Searls (founder of Newmont), Bernard Baruch (worldly financier) and Lucius Clay (retired General). Fred worked at the Sixteen as a young man and remembered the northern Red Star history. He told the others and they ponied up some capital to work the northern deposit. Gold was found but not enough to pay the operation (gold was set at $35 an ounce in 1934 and held that price up to 1975). We have the records and maps of this failed endeavor.

It is an interesting story. Why do I relate this to you in Germany this morning? Last night I continued reading Dwight Eisenhower’s account of the war in his book written in 1948. General Eisenhower handled the Berlin situation during the closing years and after the war in Europe ended. He complements one of his top advisors, General Lucius Clay. It is a small world when it comes to significant events and bringing peace to Germany had complications. General Eisenhower describes the complex issues of making peace in Berlin, which interest me.

Did I tell you that I was in Berlin in the fall of1962? I saw the wall under construction. I also passed through Check Point Charlie three times into East Berlin, an experience I will never forget. As chance had it, I returned to Berlin with my family in 1989, when the wall was penetrated and East Berliners were passing through. I will never forget this either. So now, I work in Alleghany, planning an operation to continue what Baruch, Searls and Clay undertook fifty years ago. What a long slow trip it’s been.
 By Hans Kummerow

04/05/2016  12:32PM

the underground operation just west of Redding that closed down was that the operation, that was reorganized with money from Germany a few years ago?

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