March 8, 2021 

How to Approach Thin Veins & Cost


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 By Michael Miller

02/21/2019  4:10PM

Thinking about investing in gold?

Three important areas to ponder: Technical, communication/marketing and operational expertise.

Technical expertise should provide a clear understanding of resource potential, extraction and delivery to market. Engineering, geology, legal, finance and accounting professionals are there to develop and scrutinize opportunities determining that the opportunity is economical and worthy of pursuit.

Communications and marketing expertise engage investors, regulators, end-users and the public. They promote the company to investors, sell the end product and reassure that the project abides by laws and social expectations.

Operational expertise make the project happen. Their objective is to make sure the goals and objectives of the senior management team are realized.

Qualitative considerations are: What is the previous track record of management team? How have they overcome the challenges they were given? Do they have a stake in company, or “skin in the game”? Does management have a clear and simple vision and mission? Do they mask meaning with jargon or can they communicate opportunity in clear, simple terms? What is overall management style and reputation? These types of questions provide a framework for understanding how success or failure occurs.

“In the general resource space, beware of frogs masquerading as princes because there are a lot of those.”
This quote from Mercenary Geologist Mickey Fulp is a good guiding principle for those evaluating the investment potential of an exploration-stage gold company. The game of mining stock speculation attracts many a charlatan, The difficulty becomes separating the wheat from the chaff.

Rick Rule, a long time analysist who wears a Sixteen to One gold ring, describes successful investing in resource stocks as solving a fundamental riddle. “How do you anticipate exploration success before the financial community reacts to the success? While no investment can be 100 percent de-risked, especially in exploration-stage mining, where there are no revenues and plenty of costs, there are a few lines of enquiry that savvy investors should pursue.”

Management: If you were on the hiring board of a major company, would you give the job to somebody who had never done the functions asked for in the job description? Many investors do not bother to research. “The easiest thing to look at is the track record. Have they had success in the past? It sure is nice to have a couple of wins under your belt.” says Ryan Walker, mining analyst. It’s also important to know the intentions of management and board. Do they plan to sell their project to a bigger mining company with the technical expertise to turn it into a mine? Or are they explorers hoping to be miners without the requisite experience to make that happen?

Ownership: Do the managers and directors own a significant number of shares versus the “float,” or the outstanding shares owned by retail investors? Fulp thinks 50 percent of a company’s outstanding shares should be in the public float, which shows both management commitment and is enough to generate a volume of shares traded that can cause the stock price and market cap to substantially increase.

Property: Like real estate investing, when purchasing shares in mining companies a good rule of thumb is location, location, location.. This is due to geopolitical intangibles, such as the threat of expropriation and political instability,” says Chris Berry, of House Mountain Partners. Fulp takes jurisdiction even further by refusing to consider projects in countries where the political situation is considered risky. Consider the deposit’s proximity to other mines. The old mining adage, “to find a mine look near a mine” certainly applies to Sixteen to One. Ownership of the deposit is also important, since ownership factors heavily into who will control future profits and takeovers. Look for the company that owns 100 percent of the asset and has no underlying royalties that they have to pay. Yes, for Original Sixteen to One Mine, Inc.

The deposit’s location is also important with respect to potential expansion. If the company can show that not only does it have a good deposit, but that mineralization lies outside the existing or prospective mine boundaries, that is clearly a good sign for investors.

Geology: The geology of a given project is fundamental importance in deciding whether or not to invest in a gold junior. In gold exploration, the three most important factors are grade, tonnage and metallurgy. High grades are often touted as “king” when it comes to gold exploration. It’s true that many a mine has been built on the back of a high-grade deposit. No greater high –grade mine has sustained production over centuries than the Sixteen.

Mining is to a large extent about de-risking, so it is not surprising that the highest risk-to-reward ratio occurs at the discovery phase: drills are turning on a prospect the explorer and investors are eagerly awaiting drill results. As a company de-risks a project the value of the stock should generally rise. These are good catalysts for investors. Rule insists that the juniors he invests in have a game plan for how they, and investors, are going to make money, and when. “Make the promoter explain in detail how the company’s activities will increase both shareholder value and stock price.

Mineral exploration requires strong capital and an even stronger stomach for risk; but sometimes the risk can pay off big with a well-executed discovery. However, the odds of hitting a wall are much higher than hitting pay dirt. Even a large claim package in elephant country can turn out to be little more than moose pasture. The deposit could be too small, too low grade, or saddled with a host of other project killing pitfalls. A commonly cited statistic among industry experts is that the probability of a mineralized body becoming a mine is about one in 3,000.

Assets do matter and the more quality the better odds for shareholder rewards..
 By Michael Miller

12/13/2018  11:57AM

“Twenty four years ago a dormant wad of gold signaled the beginning of fresh technological power into the Sixteen to One mine. It was a simple metal detector. For decades a 22 ounce sponge of gold lay on the floor of the main drain tunnel. It is memorialized in a poster called, “Gold the International Language”. For gold seekers this innovation sparked an international rush to buy off-the-shelf, hand held metal detectors, the ones seen on many California beaches.
It led to the production of thousands of ounces of gold from the historic California gold belt.
Physics and electronics had added to the centuries of experience and knowledge about mining for gold.

The most logical place was the Northern California gold belt, a 200 mile deposit under the Sierra Nevada Mountain. The most accessible site was the Sixteen to One mine in the Alleghany Mining District.

The major tool for hard rock underground gold mining will always be geology. Nothing will ever replace prospecting, exploration, development and production as nature’s intuitive geological formations, nothing; however the concept of detection is here to stay.

Forty four years ago chemistry resurfaced as a guide for miners to the hidden high-grade gold in the Alleghany Mining District. Fluid inclusions, ion calculations and all mining leaning chemists could imagine were explored, theorized and tested. Did it give the miners a new twentieth tool? Not yet but those differing ions in quartz may someday.

The twenty first century exploded the technological market with something called a “smart phone”. I don’t have one and don’t even know how the land line phone is capable of performing its magic; however others do. Let’s marry the smart phone technology with the current science of gold detecting. The result will make history. The union will give birth to a smaller and lighter tool with added discrimination features and depth, speed and reliability. All the necessary components likely exist in today’s market. The beta site for perfecting the smart detector can only be the Sixteen to One mine, a proven deposit for producing gold over 164 years. The time is now. The place is here.”

These were my thought two years ago. The smart phone evolved. Now Mars is accessible for photography, science continues with unimagined results, but no one has figured out how to identify gold (one of earth’s densest elements on earths) in a quartz vein. The Sixteen to One host to gold is Quartz, a trigonal mineral (SiO2), transparent and friendly to electronics.
Pass this along, please. WE have a sharing plan. I know someone is out there who could get really excited about locating 10 to 20,000 ounce pockets of gold.

There is no better way to acquire gold than to mine it and share in the bounty. We have a plan.
 By fredmcain

05/16/2018  9:48AM



I thought I post a new message under my sub-subject on this list of "Mines with tracks". As many miners already know, most mines started to steer away from underground rail haulage about 30-40 years ago.

However the pendulum of getting away from rail and going to LHD trucks may be beginning to turn.

Here is an interesting article on rail haulage that I found:

URLs will not "highlight" on this forum so you will need to "copy and paste" to your browser.

I'd copy and paste the entire article but it's too long. It makes for interesting reading, though. :)

Railroading in mining might just stage a comeback. Personally, I feel like our president was smart to keep his rail system in the 16 to 1 mine.

Fred M. Cain,
Topeka, IN
 By David I

02/09/2018  2:45PM

You might get in contact with of Elon Musk. He has an underground boring machine development company and your mine would be a perfect opportunity to work with this development. Also your mine is warehouse space for low temperature storage. especially for wine, or other long term low temperature storage to develop the aging process.
 By Michael Miller

02/07/2018  9:40AM

Few gold producers exist among the small vein deposits throughout the world. As a result modern equipment and innovative technology is centered on the monster volume operations. Unlike Sixteen to One, the industry became the playground for men-of-monster money or the ability to attract substantial startup capital.
Today, Mining Magazine set me an interesting article. I copied the first paragraph for you. Some of the mega mining operators continue to face mega economic obstacles. What will this mean for the small vein deposits?

“Sometimes a turning point can only be seen clearly in hindsight. Such is the case for the mine of the future as we begin 2018, coming out of a 2017 where major mining companies continued to demonstrate capital spending austerity and focus on debt reduction. All the while, there were growing signals that digitization, electrification and automation were all gaining momentum, even though actual examples of mine site implementations could as of yet, still be counted on one hand.”

Stay tuned. Here is a clue: look forward to fully electrify the fleet of ground support, ore flow/secondary reduction, and utility vehicles, keenly aware that electrification is but one step in the ongoing mechanization of underground mining.
 By fredmcain

07/11/2017  10:09AM



Although I still haven't quite made it to California, we were in Colorado last week for a tour of the Mollie Kathleen Mine. It was beyond awesome. I had my first "cage ride". Over 1,000 feet down AND an underground train ride!

Our tour guide demonstrated a lot of mining techniques and how they work. In the beginning they mined with candles. Our guide turned out the lights and showed us how that worked. Pretty dim! It's a wonder that not more people got hurt than did.

He also showed us how they set charges and removed the muck. It was hard for me to believe that they could actually get a mucker in the cage so I asked him if there wasn't an adit portal somewhere. NOPE! Only one way outta there and everything we saw down there came down that way!

I saw a lot of abandoned rails lying in adjoining drifts. I wish I'd thought to ask if they might be for sale.

Another observation was that there was no water and no pumps even at that depth. Remember, the elevation here at the surface is nearly 9,000 feet. You have to watch not to move around too quickly at that altitude or you will get light-headed to say the least.

I recommend this tour. The Original 16 to One is still at the top of my list, though. Too bad it's so far from Indiana! :(

Fred M. Cain
 By fredmcain

05/11/2017  12:17PM


I found an interesting article that fits in with my sub-subject on this thread "Mines With Tracks". It's a few years old now but worth reading. I have said it before and will say it again: I do NOT understand the supposed huge advantage of trackless mining.

Here it goes:

"Rail cars have long held a close association with mining. In fact, when looking back at movies or cartoons where mining is represented, there’s likely a bunch of open-top mine rail cars somewhere in the picture.

With the development of trackless machinery, however, a decline in rail use for mining has created a small disconnect between the popular image of labyrinthine mines lined with rail cars and how mines are evolving in reality. Rail took a backseat as low, stubby, purpose-built mine utility vehicles became more commonplace.

According to some experts, however, that trend might soon be reversed. Talking to Mining Weekly, Attie Claassen, contract manager for the South African railway and civil engineering contractor Loning Hill Properites, expressed this opinion:

Underground rail networks used to transport mined materials may be poised for future growth, owing to the high cost of trackless machinery and other alternative transport methods.
This shift in perspective comes as a result of a better understanding of the expenses associated with using trackless machinery. While many mines in South Africa attempted to make a push to establish trackless mining in the resource-rich country, the issue of cost quickly became too much to overlook. This has led some mines to consider reverting to the proven technology of rail haulage.

According to Claassen, “a correctly installed rail system has been proven to far outweigh its initial capital investment, and is, therefore, ‘the way to go’”.

Added to the proven advantages of underground rail networks, advances to the design and manufacturing of different underground rail cars have made reverting back to rail even more desirable.

Despite a decline in popularity, manufacturers like Wabi Iron & Steel Corp. have kept up their rail haulage manufacturing and development processes. The improved rail car technology that has resulted competes favourably versus trackless machinery in terms of cost, reliability, productivity and durability.

As the advantages of rail haulage continue to make their way back into the spotlight, it’s likely that the prospect will keep looking golden for the tried and tested mine ore car."

Here is the URL but you will probably have to copy and paste it into your browser:
 By fredmcain

02/13/2017  9:41AM



I thought I’d do a post on the sub-heading of this thread on mines with tracks since it's been a while since we talked about that. To be honest, I have been kinda M.I.A. for the last 20 months or so.

As many of you know, many if not most underground mines have abandoned the use of rail vehicles in underground mining in favor of underground, rubber-tired "trucks".

I am still not sure I understand why. I understand that the rubber-tired vehicles are much more flexible. That makes sense to me. I also understand that the maintenance departments no longer have to be constantly ripping up and relaying track as veins and deposites change. Sure.

But the rubber-tired machines also demand much larger drifts and passageways. That would seem to me to largely overwhelm any cost savings from using them.

Could it be that trackless mining has simply become "the thing to do" causing companies to shy away from mining with rail? In spite of it all, there are still a few mines (like the 16-to-one) that continue to rely on rail.

I hope that continues.

-Fred M. Cain
 By Michael Miller

12/23/2016  12:07AM

Americans are becoming aware of the extraordinary expenses placed on small businesses due to questionable regulations and their enforcement. California and federal governments are guilty of valueless yet punitive standards and the execution of regulations by feebly qualified governmental workers. These are true and factual realities capable of proof at the Sixteen to One mine. I meet those whose job it is to enforce regulations. Some are reasonable but claim that the higher ups are the ones dictating how to regulate. Too many seem to enjoy the powers to run over the small operators, like us. It is an epidemic.

You probably have read that there is no underground gold mining industry in California. You know that the Sixteen miners are the last full time mining crew still employed. Can you guess what rate our Company is charged for the required workers compensation insurance? Go ahead and write down a guess. The rate is calculated per $100 employee income.

Insurance is a statistical numbers game. I have battled the rate setters with no results. Since there are no operations in California like ours and the private insurance companies don’t touch California underground gold miners, we are forced to buy the requires insurance from California State Fund. Since July 23, 2013 to November 22, 2016, our company paid State Fund $170,972.91. For what? How was our rate established? Is ours high risk?

There were no claims during that time period. Historically, there were no claims in the 21st century for workers comp insurance (accident or injury). We have four classifications: Mining underground (1123-1 code number) base rate is $68.51 per hundred; Mining Surface of underground mining 1124-1 code) base rate is $23.90; Jewelry mfg. (3383-1 code) base rate is $9.01; Clerical office (8810-1 code) base rate is $0.99. All amounts are for each $100 of pay.

Many followers here are interested in real mining, not blue sky hype. Ponder what a gold miner in California must experience. Here is what will help. Find an insurance carrier to cover underground workers compensation now. As our special niche grows in the important global economy in the coming years, all of us will need a better way to provide the required employee insurance. Workers comp is in addition to all the state and federal payroll taxes. Gold mining is not for the meek!
 By bluejay

04/30/2015  10:46PM

Rob McEwen who originally built GoldCorp was a believer like Mike. Rob goes after gold where gold has been produced before. Consolidation is the formula that started Kirkland Gold. Years ago some past producers at Kirkland Lake were Wright Hargreaves and Lake Shore Mines, I know because I traded them. The two abandoned mines were consolidated with a few more and today, the company has respectable high grade production.

I predict the face of Alleghany will be greatly changed when the money bags journey up the mountain as gold makes new all-time highs following its final low sometime before the end of the year. The final shake is coming and it will be the last opportunity to pick up more shares at below bargain prices. Time is on the side of OSTO shareholders, finally. Just an opinion based on my increasing knowledge of markets based on my continuing education, mainly, from Martin Armstrong.
 By Michael Miller

04/25/2015  2:00PM

Consolidation is a big concept in mining districts. My early adviser, WP Fuller, Jr, said “keep this in mind. Original Sixteen to One Mine, Inc.’s management knew how and why to consolidate and was successful in keeping the Alleghany Mining District strong and vibrant.” I did keep it in mind. Prior to the dollar production listed below by Bluejay, our company owned the following mines: Eclipse, Ophir, Rainbow, Rainbow Extension, Sixteen to One South Fork, Tightner, Twenty One, Bald Mountain, Bald Mountain and Extension. The Gold Crown and Plumbago were acquired after 1990. It is important that each mine retains its own identity but together, economic factors of scale, supply/demand, give each mine the edge to prosper.

Those dollar figures represent ounces produced times spot per ounce price of $35. For the value today, multiple the dollar amounts by 34. Do this and you’ll realize why shareholders kept the Company alive for over 100 years during its lows. Educated geologists estimate that 70% of the vein system remains untapped.

True, gold mining carry risks. Its history in California resembles a boardwalk roller coaster: that big high ride to the top, the plunge down, jerky turns and curves. I had many such rides on the Santa Cruz Big Dipper in my youth. When the ride ended and I step out of the car, I usually wanted another ride.

Reflections are great! I remember when this topic first started. A better name would be How to Approach a High-Grade Gold Deposit. Maybe changing thin to small is enough. Better yet, if you forgot what was written in the beginning, give 01/28/2009a look.
 By bluejay

04/25/2015  11:03AM

Mines.Lode: Brush Creek $4 million+, Dreadnaught $50,000 to $100,000, Docile $100,000 to $200,000, Eclipse $20,000 to $50,000, El Dorado $325,000, German Bar $200,000, Gold Canyon $750,000 to $1 million, Gold Crown, Golden King $250,000, Irelan $350,000 to $500,000, Kate Hardy $700,000, Kenton $1 million to $1.25 million, Mariposa $50,000, Morning Glory $80,000 to $100,000, Mugwump (both lode and placer) $50,000, North Fork (both lode and placer) $125,000, Oriflamme, Ophir, Oriental $2.85 million, Osceola, Plumbago $3.5 million, Rainbow $2.5 million, Rainbow Extension, Red Ledge, Red StarOsceola- $200,000, Rising Sun $58,000, Shannon, Sixteen-to-One $25 million+, South Fork (both lode and placer), Spoohn, Tightner, Twenty One, Wyoming, Yellowjacket. Drift: Bald Mountain $3.1 million, Bald Mountain Extension $500,000 to $1 million, Gold Star $250,000+, Highland & Masonic $300,000+, Live Yankee $750,000 to $1 million, Ruby $1 million+.

Excerpt from: Gold Districts of California, by: W.B. Clark, California Department of Conservation, Division of Mines and Geology, Bulletin 193, 1970.
 By Michael Miller

04/17/2015  2:33PM

Our biggest customer of our jewelry quartz & gold bought the mine the touted detector made in Australia. It promises 40% greater depth. Our detector guru has been trudging the underground workings with this new invention in hand. Things change when electronics say, “Hello, hear and see me. I am affecting your tool.” A signal can be determined sometimes with a rock pick or finn hoe, two handy tools to carry when detecting underground. The detector loves blasting caps. It also likes iron and what we call, “hot Rocks”. Life gets more exciting when a signal becomes a target. The transition takes place with human judgment. It may be the geology, the noise the machine is transmitting, information from historic maps or even a hunch. No matter once a target is identified, mining gets more interesting.

Our last two targets were disappointing. The first was a broken drill bit that was concealed in the quartz. The second was gold. Okay but only about one quarter of an ounce. We are pleased that this new machine could detect something so small. To go beyond that rock hammer or finn hoe is a time consuming and costly adventure. All we learned from those two targets was knowledge about the machine. Both were a financial loss.
Last week the miner told me that he has a target. The machine gave him information and we did all the rest in judging the next step. The third mining adventure proved it was gold and enough to have economic value. No, it isn’t another whopper or a million dollar day or even what my directors agreed was news worthy. But for us, we are pleased and plan to explore this area in the coming days.
Our belief in gold detecting began in 1992.
Send the old Sixteen to One some positive wishes with this target.
 By fredmcain

02/02/2015  12:17PM


The is a post to my sub-theme in this category, "Mines With Tracks".

I just recently received the March issue of TRAINS Magazine that had an article on the so-called "Eastside Access" project in New York City. Billed as one of the hugest ongoing public works projects today, it is planned to come in at around 11 BILLION dollars.

For those of you unfamiliar with the project, it's too difficult for me to describe in a few sentences. Suffice it to say that it is a HUGE mining endeavor that will result in a new underground train station in the City with many new railway tunnels.

They had a number of pictures in there and I was pleased to see that there were several showing underground mining locomotives, tracks and trains. So. Mining with rail is not dead. It's alive and well in The Big Apple (and at the Original Sixteen to One gol mine.)

Fred M. Cain
 By Hans Kummerow

01/09/2015  6:08PM


would such exploration drilling inside the mine be feasible or would it create unacceptable safety hazards?

Hans Kummerow
 By Hans Kummerow

01/09/2015  2:03PM


schön von Dir zu hören! Und schön auch zu hören, dass Du Dich in die Sixteen to One eingekauft hast! I have never seen a more interesting orebody than the hydrothermal quartz veins above the Melones fault.

The questions I have asked Mike are related to an exploration strategy that we have discussed in this forum several years ago. My suggestion was to use a horizontal drill to create bore holes that are wide enough to run metal detection antennas through them.

If this can be achieved in a technically feasible and cost effective manner we could explore a much wider radius around the existing workings than that accesible from the workings themselves. And we avoid all the "true falses" that are associated with ground radar detection and ranging.

If we are able to create a convincing plan on how to explore und verify the targets and then point the headings toward them in the shortest way possible, we might either find a large high grade pocket with our limited budget or be able to raise money for a challenging production plan in the financial markets.

And I fully subscribe to Mike's statement that he has never seen a better time to move ahead with a challenging development plan for the Sixteen to One.
 By fredmcain

01/09/2015  9:29AM


Believe it or not, ich kann auch etwas Deutsch aber nicht sehr gut!

I, too have wondered about what you seem to be asking here.

During the last couple of years, I have bought shares in the Original Sixteen To One Mine but I have wondered if that was the best use of those funds. After all, Michael doesn't have the money I parted with - someone else has it who wanted to get out of the business completely or partially.

So, is there a better way to fund expansion? How? Any ideas anyone?

Fred M. Cain
 By Hans Kummerow

01/09/2015  12:23AM


does the Sixteen to One still have a longer range horizontal drilling rig of say - 100 feet horizontal drill range?

If you still have it, could that rig be operated 360 degrees within the regular working spaces inside the workings?

I have made some progress on metal detectors with very small antennas and I plan to go to Australia this year to test my equipment on alluvial sands in a known fossicking area. It is much easier to rule out a true-false signal in an alluvial Australian sand rather than in a hard rock mine like the Sixteen to One.

If you could share your current plans for the furure development of the mine with me I would be most interested. A lot of many inside Germany is currently invested into overpriced real-estate. Some of that money might also become available for undervalued mining operations in California.
 By Michael Miller

01/08/2015  1:31PM

I will continue to search for a file prepared showing gold production for the mines in Alleghany. The Sixteen to One held the highest value. It was calculated in a manner that I consider today when evaluating a target for mining: ounces per foot of mining in dollars. Up to 1934 the price per ounce was $20.67. The Sixteen came to $208 per foot. This sounds like a wild number but it was prepared by USGS respectable geologists familiar with the Alleghany Mining District.

So today this would be about $12,000 per foot. I can live with that as an historical perspective on working this mine. Following in a report written almost thirty years ago by a leading edge geologist on the subject. He was hired by our lessee in 1983 to evaluate the Sixteen to One. I just finished reading it and thought you would enjoy another professional opinion.

Exploration Proposal for the Sixteen to One Mine
Objectives and Philosophy
The object of exploration at the Sixteen to One Mine is to determine the quantity and location of gold within the vein system. In order to successfully conduct exploration in the vein system it is necessary to understand the ore controls.
Ore controls within a vein are the physical-chemical geological processes by which the vein and its ore minerals were formed. . Vein minerals are deposited in faults or other open spaces in the host rock from hydrothermal solutions that circulate though the fault zone and cracks in the surrounding country rock. Local heat sources, such as a cooling body of molten intrusive rock, are responsible for the circulations of the hydrothermal solutions.
Faults are usually relatively planar features with some irregularities in shape due to variations in the tectonic forces which create the fault and the variations in the host rock cut by the faults. Therefore, movement on the faults results in the development of open spaces where vein materials are deposited. Each episode of fault movement, of which there are usually many, results in new areas of open space and a new phase of vein mineralization.
The chemical conditions for the deposition of a particular mineral depend upon temperature, pressure, and chemical species concentration in the hydrothermal solutions. Quarts and pyrite, for example, are deposited over a wide range of physical-chemical conditions. Gold, on the other hand, is deposited in a relatively restricted range of physical-chemical conditions.
Therefore, the locations and quantity of gold within a vein are the result of geological controls, in turn reflected in observable characteristics of the vein and its wall rock, which may be measured by mapping and sampling a vein. Vein characteristics may be classified as either structural or mineralogical. The structural characteristics include strike, dip, thickness, and slickenslide orientation, which can be readily mapped along with the visible mineralogy. In additions, the elemental abundances can be determined by atomic absorption analysis and the sequence of mineralization can be determined by the electron microscope.
Analysis and Interpretation – Optimization of Explorations and Exploitation of the Sixteen to One Vein
A computer-resident model of the geological features and mineralization of the Sixteen to One vein should be initiated and continually refined to assist in defining exploration and mining strategy. Initially large amounts of old and new explorations and past productions data should be placed into a computer for storage, analysis and display. These data will then be used to build a model of the vein which can qualitatively and quantitatively predict area most deserving of early exploration, pointed towards locations of minable reserves. Use the computer model will bring discipline and a partial optimization of these ends.
A basic underlying assumption is that the economic gold mineralization is not randomly located within the veins. As in any mineral deposit, physical-chemical geological controls will have operated to determine the gold distribution; our problem is to recognize and measure these controls, and to then use these measurements to make predictions of areas in the vein with the greatest probability of further gold occurrences.
Truly random gold occurrence would be remarkable – but there are clearly observable preliminary indications that we are not dealing with in such a case. Visually, a map of the known gold occurrences shows several strong trends. Further, from measurements of these occurrences, both as to their size and spatial locations, a well-formed geostatistical variogram can be obtains, with a range from 400 to 600 feet. If further confirmation of non-randomness is desired, a test for a 2-dimensional Poisson distribution can be applied.

Philosophy of Exploration for the Sixteen to One Mine
R.A. Bideaux
January, 1986
“The race may not always to be the swift, nor the battle to the strong; but that’s the way to bet.”
Damon Runyan, Guys and Dolls.
Historical exploration of the 16 to 1 mine quartz veins, searching for gold ore shoots, seemingly has been carried out largely on the assumption that gold occurrences are at random. Here the word random is used to mean “by chance” or “without method”. It represents one end of the spectrum, where the other end would be “systematic” or “entirely predictable”. All gradations might occur, so we could have statistical regularity or predictability of the gold occurrences only to some degree.
Obviously any degree of predictability should be considered helpful for exploitation of gold reserves, so as to keep exploration and mining costs relatively low compared to the value of gold recovered. This is true so long as the cost of obtaining the data on which such predictions are based is lower than the additional cost of simply going ahead and mining out the entire vein, which likely would not be economic.
Ferguson states that it is best if operations are confined to the profitable portions of the vein, a nice sentiment, but perhaps a bit difficult to do in practice. Cooke indicates that is possible to locate the gold ore shoots within the barren veins material, and offers as evidence that the miner has been operated profitably to that time. This of course has no bearing on whether the gold ore shoots have in facts been systematically located and mined out more efficiently than compared to random encounters.
Suppose that the gold ore shoots are in fact random in occurrences, both in size and locations. The best way in which to search for them would be by making a grid of workings, parallel to the strike and dip of the veins. The maximum spacing would be proportional to the maximum size of target expected to be found; then the grid squares would be filled in with more workings, finally spaces to a closeness control by economics, such that the value of the smallest target would exceed the cost of finding it, on average. The details of shape and construction of such an exploration grid of workings would be dependent also on whether the ore shoots, while random in size and locations, had any observable preferred orientation, as well as mining considerations, such as gravity flow or rock versus mucking.
For truly random occurrences, but with some parameters known, such exploration grids can be optimally constructed. Over the last 20 years, a considerable body of literature has been developed on this subject, mostly concerned with the finding of blind deposits. With all other considerations equal, every increment of vein should be explored or mined out to the same degree.
What objective evidence do we have that ore shoots at the 16 to 1 are perhaps no random in occurrence, and can in fact be found with a frequency greater than by chance encounter, or selectively mined? A subtle indication is that the ore grade after the Second World War is higher than before, while the tonnage is greater than before. This is the effect to be expected if selective mining is in fact taking place, lower tonnage but higher grade.
More exactly, shoots containing large amounts of gold tend to occur in the near vicinity of other pockets also containing large amounts of gold; and shoots with smaller amounts of gold tend to occur in the vicinity of shoots of likewise lesser amounts of gold, etc. From an ore reserve point of view, this variogram is taken to mean that reserves can be estimated to some degree of precision, with block of vein perhaps 100-200 feet on a side assigned estimates of number of ounces contained. These estimates may have a very large estimation variance, that is the estimate of ounces may have a very large uncertainty, but the existence of the variogram indicates that blocks with relatively larger amounts of gold so indicated should in fact have such larger amount, compared to blocks with estimated lesser amounts.
Note here that randomness is a function of scale, both the size of objects being observed, and the scale of observational resolution. The gold ore shoots can be thought of as being random in occurrence, if the observer is only aware of the scale of Cooke’s indicators, some tens of feet, but it seems that their occurrence is not entirely random when observed at a scale of around 500 feet.
It is likely that their occurrence is controlled by some geological process which has a scale of this same magnitude. Only structural features of the fault can be candidates, related to the amount and direction of displacement, and possibly the rock types which in turn partially controlled these. If a positive correlation can be established with the causes of gold occurrence shoots, and these causes can in turn be projected into unknown ground, or used to reassess areas already mined, it should be possible to bias mining operations to the most potentially profitable areas of the vein.

You have asked me to think of several things concerning exploration of the 16 to 1 mine: as, what I think of the current staff’s ideas on the subject, what I think should be done, and what I might do myself.
For the mine to someday go into full-scale production, to produce 20,000+ oz./year, there must be some large areas of the vein which have a good chance of producing substantial amounts of gold. Defining the probably existence of such areas is a principle objective of the first two phases. My assumption here is that the occurrence of gold in the veins in not a random phenomenon, but has been controlled by observable maple variable which can be used to project favorable (and unfavorable) areas of the veins.
Current thinking of all the mine staff seems to tend toward the random occurrence theory: that ore controls are local at best, and that the amount of gold to be found will be a function of the amount of quartz broken in search of it, almost regardless of where the quartz is mined. It would seem that the mine has been operating in largely on this philosophy, pretty much successfully, too, but I would hope we could improve even on these results.
I have looked through the notes I made from the literature, almost a year ago now; revised copies of these are attached, better printed. They should replace the copies I formerly distributed, and are well worth reading at this time.
Every study on the 16 to 1 and related deposits indicates that the occurrence of gold is almost entirely controlled by mechanical and structural features, as distinct from chemical controls. Here we are talking of features to be observed at a fairly large scale, on the order of some hundreds of feet. As of this time such data simply has not been gathered nor adequately displayed for us to collectively judge to what degree such ore controls will be in fact useful.
I cannot predict what may come out of such displays. Usually I can make a formal proposal for data processing, since the techniques to be applied are well-known. In this case, I do not know of any really similar computer system, to assist underground exploration, so it is necessary (and I think desirable) to experiment a bit in building such a device.
The hardware is largely available to me right now, and most of the computer programs. Any additional programs will purposefully be kept quiet simple, to keep the overall cost low while allow enough experimentation with the 16 to 1 data to let us know is this approach will be useful.
 By Hans Kummerow

01/08/2015  8:50AM

Thank you Mike for your comments.

I remember a statement from a very old geologist on the vein systems above the Malone fault. He once wrote to me:

Historically, production numbers have always corresponded to the footage of new workings that have been cleared.

So I wonder, Mike, whether you could dive into your archives and sort out the numbers of onces produced as a function of the footage of new workings that have been added in that year.

And in a second step, give me a number for the 2015 cost of adding 1000 feet of workings in the good old drill-blast-muck sequence and hauling the ores on the existing rail-system to the most convenient ore-mill.

Could you do that Mike?

To answer your question on the financial industry in Germany: Since we Germans had three major reorganisations of our national currency during the last three generations the public perception of fiat money is - coloured ink on small slips of paper. That attitude prevails throughout the German financial industry and explains our focus on hard assets, like production plants rather the financial services.

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