August 18, 2022 

How to Approach Thin Veins & Cost


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 By bluejay

11/13/2008  6:16PM


Just so everyone understands, what is your source for these statistics? The reason I ask is that I see some errors. In addition, if the source is using the 2008 year for comparisons then why isn't a specific date being applied as we are still in 2008.
 By Michael Miller

11/13/2008  2:22PM


I write to counter generalizations about companies in the Gold Sector and specifically our Original Sixteen to One Mine, Inc shareholder value. I recognized its value thirty-four years ago. Considering stock splits of ten for one and three for one the owners in 1975 (USA allows gold to go free for Americans) our equity has increased over sixty times, not 60% but sixty times. Capital appreciation is far from over.

This revealing entry can be found under NEWS, put on the web site today. This chart represents a twenty-month picture of many things. I realize that many successful people do not own gold shares, have little understanding how to evaluate gold companies (with good reason) and my efforts to enlighten have failed to contrast the Sixteen to One with others in the Gold Sector. My failure was recently confirmed by an e-mail I received from a writer in Germany, who pointed out that I should sell our gold collection to shareholders because they have not been rewarded. Yes, we have! Refer to the chart for a gut check into the Gold Sector. By the way I have kept data like this and more for years. Many companies no longer exist or were merged into other companies for token compensation to shareholders or nothing.

Market capitalization is a formula tossed around in stock parlance. Take the outstanding shares times the price and you get a market cap for that company. For example, Newmont Mining Corp, a favorite safe haven for stock brokers to recommend to customers, who want a gold position, increase its shares and lost price. In twenty months shareholders lost $8.24 billion dollars of equity. How about one of the junior gold companies, Coeur D’Alene Mines. Its shareholders lost over 70% of their value during the same time. I don’t know what happened to Gold Fields Ltd but shareholders took a beating.

What happened to our market cap or shareholders value? Nothing. This is not necessarily good or bad. It just is. Much can be used to analyze an investment; but my German friends observation is incorrect. Our shareholders also were not diluted, a very important consideration for future earnings. Am I happy about the financial results over the past twenty months? Absolutely not. An opportunity exists for this gold company for not only significant market cap increases but for liquidity as well. Someone just has to get serious and check us out.

Good luck with the chart, GOLD COMPANY SHARES under NEWS.
 By Michael Miller

09/29/2008  11:01AM

Yes to your questions (see below). Management is willing to accept funds and secure those with equity and settle by offering gold bullion at a percentage discount to spot price.
 By Hans Kummerow

09/29/2008  5:52AM

Questions to Management:

Could OrigSix legally create preferred stock that entitles the holders of such stock to a first right to purchase new findings of gold from the mine at a given strike price or at a market price?

Would the management and the board be willing to take such action?

If yes, I would be interested in such stock.
 By oakrockranch

07/01/2008  10:47PM

Hey Kyle - Thanks for going to our site, but I'm not sure why you couldn't leave a note? There is a pull-down menu at the bottom left that opens up another field to fill out and submit your message. Maybe your browser is not up to snuff? Our website has no problems sir. :-)
 By Kyle S Hall

06/30/2008  10:01PM

Dear OakRockRanch....
I checked out your website and unfortunately - I couldn't even leave you a note. Your website needs some help too. I agree the 16 to 1 could use some help in the marketing but a website that has problems of its own isn't the best place to start.
 By oakrockranch

06/30/2008  12:03PM

Greetings - As a longtime follower of the 16/1 and frequent visitor to the Alleghany region, I must say I have high hopes your operations find the necessary resources to continue its undergtround operations. My background is in the advertising and marketing sector w/25+ years experience and a staff of 12 ranging from designers, marketing managers, production artists, media strategists, copywriters, etc. It sounds like a little PR and a direct marketing campaign is in order. Understood that funds are tight, and there may not be any "budget" for such eforts, but maybe my company of Zukor Design ( here in Southern California could help. There might be a way to do it in trade or stock options to keep the cost manageable without drawing down real dollars. I also have a personal interest in mining that couldn't hurt such an endeavor. Not that I have any experience doing the hard-rock drilling, blasting and mucking, but my passion for the industry runs deep as a whole. Mineral collecting/reselling as in jewelry and sculpture are my focus with education to new buyers of the trade being the key.

On another note, with your goal (Mike) of trying to gain funds for the 16/1 to get back to mining on a larger scale, may I suggest you break the massive $3,000,000 collection into smaller lots? Maybe this has been suggested before and tossed aside as a bad idea (if so, my bad) but after doing a fresh read on your forums, it might be worth considering. I remember this collection was "available" a few years back at $1,500,000 and it didn't sell? Sure the cost of the raw material has more than doubled, but i just don't think there are many buyers with $3MIL in their wallet for such things today. I'm not suggesting the combined worth of the "collection" is not correct, only that finding a buyer (or group of buyers working in tandem) will be tough to land. And with time running short on the mine's operational costs and outstanding liabilities, a reassessment of selling strategies my be in order. I for one have many contacts who would step forward today in closing deals on select pieces and/or smaller groups. Sure, it would dissolve the "collection" as a singularity that's magnificently rich, and an extensive tribute to the 16/1, but if it's dollars you need, there may be a better way to achieve this goal. As a matter of fact, I wouldn't be surprised that if it were sold in small groups and specific specimens, the net proceeds would surpass your $3MIL target by a long shot. Sure, it would take more effort to deal with multiple buyers, but it sounds like you have some time on your hands to manage such transactions.

Anyhow, I've never posted to this forum before but do keep up on your team's efforts. I figured it was time to drop in my 2? and sincerely wish you all the best. Feel free to post a reply here or contact me directly as you see fit. All the best!
 By Rockroby

06/28/2008  9:03AM

I think most of us know the mine needs a grubstake to get back underground and start mining again.The stock is easy to buy now I can get shares through E'Trade or U.B.S. I put in a order for say a thousand shares at .75 cents or better and get it for .35 cents,what I think is happening is that guy who bought thousands of shares for less then a nickel is selling them for thirty five cents & once they are gone & the mine starts blasting again it should go back up to .75 cents or more.
Unlike other mining companies the Sixteen to One Mine only has thirteen million shares out & I value the properties at at least twenty million without the gold.
Look at Goldspring in Nevada they are sitting on gold and silver worth billions like the 16 to 1 but have 800 million shares out so their stock stays around 3 cents.
Once gold goes over a thousand a ounce"and it will"more people will become interested in gold mining companies & if the gold collection is sold and you get back to mining I think the stock in this company just might go crazy & the seventeen million that can still be bought will go fast at well over a dollar.
Mike you might want to try Westamerica again a lot of banks lost big time in this housing mess and are looking for other things.
Good luck today
 By Michael Miller

06/27/2008  4:36PM

Who is writing or saying it is a quick fix? The financing, and really financing ruthfully is the plan we are following...sell our priceless gold collection (inventory). It is basic capitalism or business, nothing more and nothing less.

Our assts have increased while we took on more debt last year as the crew followed the crumbs of gold. Our choices of where to mine were severly limited by the two week need to "make Payroll". That expense stopped in December. The inventory has been managed to net the highest amout of money possible, no quick moves to just sell it at spot, as some suggested awhile ago.

Personally, I will be delighted when our company has a public market. It won't be tomorrow. Anyway, most of the junior gold copmpanies are searching for money while share languish in a lack luster market. It seem as if oil is the object for speculators to play the currency game not gold.

So Ryan or Bluejay, explain the value to shareholders of AngloGold the rights offering of AngloGold (see entry below). Help me out here.

I can offer some insights about the industry wide lack of interest in the smaller mining companies and will next week. We have about 200 people coming to Alleghany tomorrow for the meeting. As always, I appreciate the comments made on the FORUM. Oh,Steve, I really could use a vacation, but a vacation is in my future once one or more of the business prospects I continue to develop is realized.
 By Michael Miller

06/26/2008  5:32PM

After reading your input, I accesse3d the AngloGold web site for the sole purpose of reading about the rights offering you suggested we implement. Here is what I found (and it was not an easy quick search).

A rights offering was prepared on March 22, 2006 for 10,300,00shares at the closing price on NYSE of $48.33.

Shares outstanding on February 28, 2006 were 265,096,732.

The web site quotes share price today on NYSE at $32.08.

Do the market cap comparison. What do you think about the successful strategy of management in regards to dilution according to the Use of Proceeds (published)?

Using a vastly over issued corporation certainly keeps the labor force working. Personally I would not boast about an idea that the rights offering was a success. If our company had tens of thousands of shareholders with over a quarter of a billion outstanding shares, I may do what the AngloGold management did to keep the company in play with the stock market.

Let’s talk some more. We are busy preparing for the meeting Saturday. I have no info about the Tejon Ranch approach to funding. They are smart guys and took care of the owners I am sure.

We have choices and took the best one: sell our priceless gold collection. I am actively pursuing other methods of getting the working capital that we, like every mine, need from time to time to improve mining. Perhaps one of these solutions will materialize; however puffing up these real but unknown solutions at this time does seem to me like stock fluff. The major shareholders decided a long time ago that what is, is and what is a wish is not. Since we own the real deal, a gold mine that continues to operate by mining and marketing gold, we will not hype our stock. That does not mean we will not undertake a program to infor the non-shareholders about the great potential here in Alleghany and also at the Brown Bear.

Yes, we are asset rich and cash poor. Yes, we need a well-informed, confident person or persons to join us in developing our mine plan. It is a good one. I along with others are confident it will be very profitable for everyone.

Thanks again, Gotta go but tell me about Tejon.
 By RyanBaum

06/26/2008  9:51AM

Scoop, thanks for the info. I must admit that I’m still confused. We continue to focus on owning three mines but have displaced all the miners. We have a history of producing awesome pockets but don’t have the manpower to produce. We have a gold inventory greater than the liabilities but are delinquent on our taxes. We say that we’re in a position to respond when investors take a fresh look at making money in gold yet we’re not concerned about our share price or view ourselves as a promotion enterprise.

Seems like we’re in a classic liquidity trap of property rich but cash poor. Seems like the largest shareholders are worried about dilution instead looking at ways to raise fresh capital to accelerate development and unlock the value we all agree is there. Maybe we should look at what Tejon Ranch did a decade ago with their rights offering to begin their property development or what AngloGold is doing this month with their rights offering to eliminate their hedges and expand development.

06/23/2008  4:08PM

Thanks for your questions and observations. Let’s see if Scoop the on-sight reporter can respond to your satisfaction. Please let Scoop know if you want further clarifications.

#1. You are correct. That was a typo.

#2 No, the bulk of the interest expense is for a $400,000 short term note at 12% plus fees every six months; overdue property taxes of approximately $80,000 accrue interest at 12% and some other bills in the Accounts Payable charge interest between 10% and 12%. The $400,000 is secured by a first trust deed on the mine property.

#3 The related party is primarily Michael Miller, who has covered operational expenses for awhile. The interest accrues at the same rate his bank charges for his line of credit. There are other related parties (shareholders). One is charging interest at the same rate as his line of credit with his bank currently 6.75%. The shareholders have gold as collateral. Miller is also secured with a note on mine property.

#4 During the recent and lengthy bear market for gold stock ownership, the company elected to conserve its dwindling gold inventory by placing the physical needs of the mine above all else. It terminated the outside accounting firm from signing off on the financial statements. The lack of one has nothing to do with what they might or might not say about the financial condition. To give you an idea, the cost of the last audit in 2001 was $27,800 (going up up and up because of federal legislation and specious law suits). Since the Company files as a gold producer, the SEC requires a SEC approved auditing firm anoint financials. Many qualified as SEC auditors had their errors and omissions insurance skyrocket, which is an expense that is passed along to the client. A SEC audit today will significantly increase over the 2001 date.

Once the gold collection is sold it will not be a problem to have the last several years audited. All of the financial records are being maintained exactly as they were when the company was being audited. An approved auditor independently audited year-end inventories, which were a significant figure. The last SEC auditors recommended this. The Company’s published Future Use of Proceeds includes a line item to resume audits to meet SEC requirements. Reenlisting should not be a problem that cannot be solved.

#5 The peaks and valleys, feast or famine or any other metaphor articulated to describe the Sixteen to One mine or many other mines affects exploration; however pundits acknowledge that the Sixteen to One is in a class by itself. Why? Sufficient geological data exists to support exploration. A high level of confidence for risk capital can be found because the gold has a provable history of concentrating in the richest “pockets” yet recorded. Working capital to fund a well-designed plan is the key to the Company’s success for over 100 years. Miller and the board chose to sell one of its valuable assets to implement Step One of its mine and company development plan That decision reflects just how important the physical mine properties are as well as the unissued treasury stock. Gold is offered for sale to get working capital.

#6 A convertible debenture is a grand concept and has been discussed over the years. It will not work along the lines you mentioned. There are 1,640 shareholders, but 1600 own less than thirty percent of the outstanding shares. The numbers do not support a pro rata offering.

The above represent factual information in answering the questions from the last posting. Scoop wants to stray into some opinion reporting.

1. In following the operation of the Alleghany mines under ownership of Original Sixteen to One Mine, Inc from 1911 to 1958, management did a fine job of controlling its expenses during some difficult times in the gold mining business. There was little or no shareholder dilution or loss of real estate. In fact some very good properties were acquired when other operators decided to quit the business. The slippery slope of a pending Gold Sector valley began shortly after WWII and bottomed out in 1974.

2. Current management (since 1983) has experience the world wide Gold Sector swings as well as some swings peculiar to itself. Right now is not a time of worry. It is a time of decision. The gold inventory value exceeds the liabilities, which is why a gold sale is the current focus. How much will be sold and at what price are questions that never go away. Priceless is how many over the years have reacted to Sixteen to One gold.

3. Therefore, “we seem to be at a critical juncture in the log jam” (see below), is not an accurate perception of Company status at this time. It was more critical a year ago when the mine plans to open the 1000 foot level and search for some short term targets were started.

3. In response to Question Number 6 below: entering an equity position in a company is a choice, usually a logical one based on all available data at the time of purchase. The same goes as a seller exiting equity ownership in a company. It depends on many factors: size of investment or speculation, expectations, length of time for development and foremost, opportunity to play. If there is a better risk/reward speculation than betting on the Sixteen to One mine, play it.

4. The Company purchased three historically valuable mines over the last dozen years. It is doing what a gold mining company should do rather than what a gold stock dependent company does. It is in a position to respond when investors take a fresh look making money in gold.
 By RyanBaum

06/22/2008  7:43AM

Good morning. After reviewing the annual report and proxy statement, I came up with a few questions:

1. The 2006 EPS is listed as (.001). Shouldn’t it really be either (.009) or rounded to (.01)?
2. We show 2007 Interest Expense of $(106,207). Is nearly all of the interest expense attributable to the $677,598 Due to Related Party? If so, the interest accrued is somewhere above 15%. Is that directionally correct?
3. What are the specifics of the note due to related party? Is it secured by a first lien on all or some of the properties? Who is the related party?
4. We no longer have our financials signed-off by an outside accounting firm. While that in and of itself doesn’t bother me, it presents a worry that (a) we’ll have an even greater hurdle to get listed on an exchange and (b) one of our directors is a CPA yet we couldn’t find another CPA to sign-off. Is it that any impartial accounting firm would give us a “going concern” warning given our lack of liquidity?
5. As for the lack of liquidity, we seem to be a critical juncture in the log-jam that has been building for nearly the past decade. If lay-off notices were given in November, we shouldn’t expect the mine to provide liquidity in the short run since the exploration is on hold. We must go to the financing side of the balance sheet to provide the liquidity.
6. To raise funds instead of continuing to offer common stock to a single large investor at $1 per share, why not consider something like offering convertible preferred to current shareholders? Because of the lack of liquidity in the common, it is hard to determine what its true fair value is. A preferred or convertible debenture offering could be structured as something like 1/25th of a share offered for every common held, priced at $10, and payable in kind annually at some rate between 5 – 10%. The math could be worked to figure out how to raise the level of cash the company thinks it would need for a 5 year project. Something like this has to be figure out since no logical person will buy a block of new stock at a $1 per share when he can fish on the pinksheets and grab existing shares for far less. Clearly the company needs liquidity since in its current state, nothing will change.
 By Rae Bell

05/26/2008  7:56AM

Somebody named Curtis Davidson sent a note using "feedback" about a bid to buy stock. He did not provide a return e-mail address. Curtis if you see this message please contact the corporate office. or call 530-287-3223. I am not sure how you submitted your bid but we did not recieve it and we need your contact information in order to post it.
 By Thushara.Weligama

05/17/2008  12:40AM

Have not used it to get Sixteen to One stock yet & am thinking about getting a third,,Wells Fargo because a stock broker i know & trust kinda just started working their.


 By Rockroby

04/21/2008  1:10PM

I had no trouble today picking up 1,500 shares at .40 cents took less then 1/2 hour after i called.
Will start getting more as soon as I take care of my back taxes I now owe the IRS.
Good article on California gold in the new Gold Prospector magazine & in the mining the internet section the Sixteen to One has their own little article.
The gold collection has been sold before,no one wants to see it go,the good thing about it is when the new shaft is sunk a lot more will be found.
 By cw3343

04/17/2008  4:35PM

One of the main problems is that there is seldom a "firm" bid/ask with this otc/pink sheet trading. Some of this stuff is still done over the phone, and a lot of the time there is no quote unless someone is requesting a bid/ask.

I work at a nationwide broker/dealer (anonymous for now) and have researched this a little, and spoken with Mike about it. It is hard to buy or sell shares with the lack of market makers, no automatic executions, and very vague bid/ask quotes, inaccurate trade reporting (my opinion), etc. etc. I was able to buy some shares in the .30-45 range last summer, but only 500 or 1000 shares at one time, and was not very easy. I have not tried to sell any. It is barely worth messing with this, in my opinion, unless the company can get listed somewhere like the Amex. If you buy or sell shares on this website, at least you know it is a real market/prices/size.
 By Rockroby

03/21/2008  7:34AM

U.B.S. Financial,about $25.00 for such a small amount..if i bought say 50 shares of hl it would cost double that.I have another account
have not used it to get Sixteen to One stock yet & am thinking about getting a third,,Wells Fargo because a stock broker i know & trust kinda just started working their.You can't keep all your eggs in one basket can ya Bluejay,,,i have stuff at home too but i worry more about getting ripped off then i do U.B.S. folding.
Gold that's what they want to see,,now if you could put a flashing add on Kitco not sure what something like that would cost.One of the problems is the market cap of 5 mil & it goes up and down when we all know it's worth 23 mil plus without the gold/////
 By Gold Poachers

03/20/2008  1:32PM

What brokerage firm did you use? What was the broker’s commission for the 500 shares at $0.39?
 By Rockroby

03/20/2008  11:35AM

Just put in a bid for 500 shares at .60 cents or better & i got it for .39 cents.So far these market makers have not brought it back down like they seem to do when i start buying...a lot of the other metal stocks are falling like nuggets out of my pan so a 30% increase looks good for the Sixteen to One.Not sure why they won't take a bid for 10,000 shares at .50 cents or more,i would have got a thousand shares@.39 cents will have to wait.
Have a good Easter everyone

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