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Topic:
How to Approach Thin Veins & Cost

       

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 By Michael Miller

12/22/2011  2:41PM

Non mining conversations on our FORUM should and will continue. I find much of it fascinating. All the opinions are worthwhile; however, they will diminish as new events take the spotlight. For long time mine advocates, recent readers of the FORUM and friends or foes of this old operation in California, never forget our purpose: to protect, preserve enhance and exploit our assets.

Deep in our files are extraordinary data about the when, where and how to accomplish gold mining here in Alleghany. Some are published while some will always be kept secretively on a “need-to-know basis”. I continue to draw important relevance from the data even after being exposed to them for decades. Sometimes a familiar word or sentence or thought takes on new meanings.

The following is posted for that reason…new meanings for you. It is directed to all of you who have an equity ownership in the Original Sixteen to One Mine assets and all of you who have thought about it but failed to make a move (investment).

The authors related a quote at the beginning of a series of papers written over 25 years ago. Offering quotes about the vagaries of mining a high-grade vein like the Sixteen to One must be some nutty professional whim of geologists, mining engineers and other professional miners. It happens often. The quote in this case is from Damon Runyan, Guys and Dolls.

“The race may not always to be the swift, nor the battle to the strong; but that’s the way to bet.”

Following are parts of this valuable historical file with the title of “Exploration Objectives and Philosophy for the Sixteen to One Mine”.

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.
 By Michael Miller

10/19/2011  9:58AM

People ask me, “Are men working in the mine? Are they finding gold?” The answers to both questions are, “Yes”. A limited crew has continuously been working. Work never stopped. It just slowed down to a crawl. This is important to remember during this period of doubt due to a lawsuit filed against the compay by the staff of the central regional water department in Sacramento.

Any earnest review of gold mining the Sixteen to One deposit arrives at the same conclusions: the ore is either rich, exceedingly rich and most of the host quartz is barren; gold follows an ill defined pattern referred to as ‘pay-shoots’; success or failure (risk/reward) defined as profit depends on a formula. After thirty-six years of continued investigation, which in the investment industry is called ‘due diligence’ I know the formula, as do our geologist, present and former directors. My frustration stems from knowing that the formula for success is not in effect right now.

One last comment seems appropriate. A close friend commented that reading the FORUM suggests that either the company, Mike Miller or the mine are presenting themselves as victims. If you read the above as victims, it is your call; however, none of the three feel defrauded, swindled, duped, or cheated. None believe the legal assault constitutes a misfortune. It is an abuse by government people with a punitive and personal agenda. It is a function contrary to the purposes of government and it is definitely not in the best interest of the stated plaintiff, the People of California. Sadly, this behavior has spread over the past four decades as the forces of rebellion against the government took hold in the late 1960’s.

Those responsible for conducting the public’s best interest in carrying out the protections and beneficial use of water in the Kanaka Creek watershed have succeeded in bringing one of the world’s great gold mines and an operation that brought financial success and personal satisfaction to many in Sierra, Nevada and Yuba counties have only succeeded in hurting our region, our state and our country. None of us are victims but we all should really be against the purpose and conduct exhibited by the leaders in Sacramento.

The small vein gold mining in California is a spark that will turn around the direction of jobs by producing something more valuable that the cost of production. Small vein mining at the Sixteen to One is a profitable venture when the formula for operations is in place
 By Michael Miller

08/02/2011  9:19AM

Original Sixteen to One Mine, Inc is 100-years old this fall. Remember, though, the Sixteen to One mine and other mines in Alleghany owned by the California Corporation have histories going back to the 1850’s. An especially active and challenging (and profitable) period took place from 1903 to 1914. It was a time of discovery for the venture capitalists that found the Alleghany Mining District a place of interest. I say “discovery” because little was known about the geology and nature of this world-class high-grade gold deposit. We have learned from their successes and failures.

Factors determining applicability of mining methods: shape, size, dip and regularity of orebody, physical and mineral character and value of ore, distribution of pay ore, character of wall rocks and overlying surface, relation of deposit to surface and to other orebodies on same property, kind of labor, availability, character, and cost of timber and material for filling.

Technological improvements in drilling, blasting and mucking have continued since the early discoveries of high-grade gold. In 1992 the successes of bringing simple metal detectors underground have significantly changed some of our mining and processing methods; however the true miner knows that the nature of the deposit dictates the means and methods of mining. The following are terms used to define ore handling that remains as practical today as they did 100 years ago.

Chutes must remain open during the life of stope. Types: (a) A cheap chute for filled stopes is made by lagging the outside of a row of sets, but lagging is apt to be broken by falling ore, by swinging of sets or by pressure of the filling, admitting waste and possibly destroying the chute; (b) The inside of a row of sets (usually the outside also) is lined with vertical planks. This is common is both open and filled chutes. Thickness of lining (2 to 4 in) is proportioned to wear during the life of the chute. A double 2 or 3-inch lining may be used to secure tight joints; (c) Cribs of round or square timber, built independently or just inside of the sets, which may or may not be lagged outside. Independent chutes are useful for carrying through stopes at an angle to the sets. Chutes inside of sets act as reinforcement and offer strong resistance to wear and pressure of filling; (d) A vertical row of sets is “bricked” with timber blocks.

Grizzlies or logs or square timbers set 8 to 10 in apart, are often placed over tops of shuts to keep out large lumps which might block chute or gate. They are especially important for single-compartment chutes in filled stopes.

Gophering is a name applied to mining in irregular drifts or other openings which “follow or seek ore without any regard to maintenance of a regular grade or section”. The method is also called “Coyoting” in western U.S. In general, the term designates any small-size, irregular, unsystematic workings.
Gophering is a poor man’s method used in small excavations where walls require little or no support. Obviously, it may be employed in portions of veins, beds, or masses, but has no place in systematic mining. If used to mine rich seams in a large orebody, gophering often results in a temporary profit but eventual loss, as the irregular openings increase cost of, or prohibit, mining the remaining low grade portions. On the other hand, gophering has a place in mining small irregular portions or isolated part of an orebody, where cost of systematic development is not justified by probably tonnage to be won. This is especially true of small, high-grade spotted deposits,
 By Rick

12/26/2010  9:07AM

Tis the season! I hope everyone had a grand Christmas and continued holiday spirit!

I simply wanted to infuse the positive optimism that comes with Christmas, to remind us all of what will help us look in the right direction. When times seem down, down, we look up up up...and once again noticing (well, heck, me included here) all the negative-vibe stuff this great mine is enduring, a healthy dose of positive energy and optimism is what we need!

While the top-most topic on the News up there says "forgedaboudit" (sp?) how about NEVER forgetting about it! Miracles do happen, along with $million pockets.
 By martin newkom

11/14/2010  10:01AM

Mike, I hope the Company hit some
luck and paydirt on your proposal.
 By Lone Wolf Geologist

11/08/2010  9:00PM

No, you never give up. You just keep full on blasting ahead!!
 By StevenJ1989

11/08/2010  6:59PM

I am planning to do mining, Should I stop that thought because of some environment hazard
 By Michael Miller

11/02/2010  4:51PM

Gold Mining Opportunity (see the entry below this one)

There is an inquiry about the lease. Mining leases have terms and conditions unique to the industry. The Sixteen to One requires a modest amount due at the time of recording the lease in Sierra County, a gross royalty on gold production, fair performance clauses, proof of required insurances, minimum monthly payments, rights of inspection, and the usual covenants that protect both parties. We want the new operator to succeed. Capitalizing the operation should be a minimum of $2 million. Three million is safer and $4 million really gets the operation flying. There is room for creative thinking on exit strategies for the lessee.
 By Michael Miller

11/01/2010  12:54PM

GOLD MINING OPPORTUNITY

The South Central Sixteen to One underground workings are available for lease. The Sixteen to One has thirty-five miles of levels. The current operation and the long range plan concentrate in the North Central. We will be there for another 100 years. The South Central is idle with no plans for immediate mining. This valuable part of the Sixteen to One deposit (extensive maps, production records and equipment available) is wasting away.

Why would one spend five to eight years getting permits to operate a gold mine? Put your money to work in direct mining. Here is as good a gold bet as any IN THE WORLD. Your investment goes to work immediately to access KNOWN DEPOSITS OF GOLD. Put a group together or go it alone.

Here is a proven gold mine, just sitting idle. I know that some Germans, English, Canadians, Iranians, Chinese, Australians, Saudi Arabians and even perhaps some US Americans have thought about or are currently looking for a way to get gold. AND ALL OF YOU SHOULD BE LOOKING FOR THE BEST WAY TO GET GOLD QUICKLY. What about all the venture capitalists? Why not undertake a special adventure?

Our company worked the South Central from 1995 to 2000; most of the labor was spent in the installation of equipment and sinking below the fault beneath the 2400 level. A fall in the spot price of gold and the tragic accidental death of a miner left us under financed to continue mining. An absence of gold was not the problem!

Go buy gold, if that suits you; however, that our venerable Company offers its prized gold deposit for exploitation to a third party is worth some serious investigation. One condition for this look: other than the information contained in this web site, the investigation begins in Alleghany. Questions encouraged. Call (530) 287-3223 or write me at PO Box 909, Alleghany,
CA 95910 or email to mmiller@origsix.com

You can help by introducing this gold proposal to others. Check this entry from time to time because it may be revised as time passes. Comments appreciated. Thanks.
 By Rae Bell

10/13/2010  11:57AM

Thanks for the clarification "Lone Wolf".
 By Lone Wolf Geologist

10/10/2010  7:37PM

Several years ago I purchased the library of a Canadian geologist that contained several publications on the Bralorne mine in the Bridge River district of British Columbia. This mine has some characteristics of the 16:1 including some highgrade, serpentine, mariposite and metamorphic wall rock but it is more like a Mother Lode mine than an Alleghany mine. Both are great mines with the Bralorne having produced over a million ounces. Other great mines of this type are Gympie in Queensland and Beaconsfield in Tasmania.
 By Rockroby

10/10/2010  8:45AM

Look's like North Bay resources is going to be mining the Ruby Mine sometime next summer.
Take a look at some of the nuggets pulled out of the mine at
htpp://www.northbayresources.com/ruby/
This mine has had lot's of money dumped into it recently,the amount of gold that this mine can and should produce is not even close to this companies mines.
As the price of gold climbs the public will become aware of just how valuable the Sixteen to One Mine is...........
 By Rae Bell

10/06/2010  8:22AM

I looked at the Bralorne Gold Mine site. It is an interesting mine but I have to respectfully disagree that it is similar to the 16 to 1. There they are drilling to establish ore reserves, here we are not able to that because of the nature of our deposit. That is the challenge of the Alleghany Mining District's high-grade deposits. The only mine that I know of in our district with a disseminated ore body is the Oriental Mine.
 By FranSix

10/06/2010  7:25AM

Hi, thought you might like to look at the Bralorne Mine website. If anything, this mine is very similar to 16:1.

http://www.bralorne.com/

(they just posted the website so some of the material is not yet there.)
 By martin newkom

09/14/2010  2:34PM

I have news for all: Gold spot
went well over $1200 and $24
increase today according to CNBC
 By FranSix

09/14/2010  2:56AM

Here's a discussion in exploration-processing.com about the historical Pickle Crow mine in Ontario, CDN:

http://tinyurl.com/2b7b6pg
 By Rick

07/28/2010  7:00PM

Dave, I will. Yup, I agree. (I't not bragging when it's true.)

Perhaps you, and all of us can send this page around to those not in the know.
 By Dave I.

07/27/2010  3:50PM

Rick,

That is the best I have seen written as to the need for a responsible environmentalist to our nation. Please write the Washington Post this statement, It is honorable and to the point to who we are.
 By Rick

07/26/2010  8:18PM

I'm an environmentalist...yet evidently not "officialy" because I'm also a conservative with a rational mind...

Huh???

I keep my personal environment clean at home the best I can; I don't litter, in fact I pick it up, the stuff left by others; I'm not in favor of dirty air or water, in fact I actually prefer clean air and clean water (contrary to those who melt my conservatism into my love for life and somehow think I like dirty air and dirty water); I love animals, all of them; there isn't a toxic waste-site that I wish wouldn't have happened; and I can go on and on and on.....

..and yet, I am labeled (not on this forum but in general) as "hating the environment" because I am a conservative.

Huh??????

This is classic. A classic version of "When did you start hating your kids" kind of box that opportunists with crappy motives stick us in, when they think they can get away with people not paying attention to the truth.

I actually don't know any anti-environmentalists...except, wait....Hmmm....

Yes I do! The environment of rational thought is under assault! The environment of freedom is under assault; the environment of private sector autonomy is under assault. And yes, the environment of pristine waters of Kanaka creek was breeched by an intrusive magmatic vein of quartz laden with sulfides (ahem...arsenopyrite) during the last volcanic activity up there where Allegany town arrived with the discovery of gold along the way.

That darned environment! Prosecute the environment, NOW!!!

What a farce and blasphemy on reality, when labels are assigned and misappropriated with politcal deeds in mind.

After all, we are all environmentalists. We sleep in the bed we make.

Yet, I, for one, will never rest when a government tries to define my environment. This smacks of why our country won our independence, and why our Constitution was written.
 By bluejay

11/11/2009  7:06PM

Last on gold is $1120.30, another push into all-time high record territory.

Hoping to remove the cheap spam with an intelligent thought process from one of the masters of Wall Street.

Yra Harris Shares His Wisdom
Posted: Nov 11 2009 By: Jim Sinclair Post Edited: November 11, 2009 at 10:10 pm

Filed under: General Editorial

Dear CIGAs,

Aussie unemployment numbers just came out and were much better than expected!

DEBT,DEBT,DEBT for that theme was alive and well in the world today.

Hirohisa Fujii the finance minister of Japan was raising concerns about the recent sell off in JGBs as the rates on ten year Japanese debt have risen 20 basis points over the last 2 weeks. There is growing concern that Japan will have trouble financing their growing national debt that is now over 200% of GDP. This is not a new story but one that has been kicked around for several years and seems to be gaining adherents in the world because of all the other government debt that has been floated since the global recession has deepened. We will pass this off as a concern of crowding out – as the low yields on JGBs cause them to be replaced by other sovereign debt.

Yesterday that great luminary of credit analysis, FITCH, raised a warning about British gilts being downgraded from AAA which caused the sterling to be sold off.

We will note that this that warning the gilts have been up for 2 days so something else must be bothering the pound, like resistance, so we send you to the charts to see if the sterling can hold support.

The Greek government has also come under attack for budgetary malfeasance but that is a problem for the European Union so its impact is diluted. But if these DEBT concerns rattle the Japanese and the BRITS, what about the U.S. budgetary morass? Anybody want to buy 30 year treasuries? And the talking heads proclaim that GOLD is devoid of reality.

We also remind those who are quick to criticize the Japanese that 95% of JGB’s are held domestically while the holdings of U.S. debt are global. We are back to good old John Connelly – it is our dollar but your problem but with Mr.Obama in Japan and China next week we will see for how long this tired old phrase holds.

There was an interesting story out on Tuesday that the Chinese Investment Corp [CIC] has agreed to purchase a 15% stake in the large U.S. energy company AES. The agreement also includes the buying 35% of the firm’s wind power unit for another $570 million for a total investment of 2.1 billion dollars. This may not be deemed a significant amount of money but its importance lies in the concept that the Chinese are testing the Americans to see if they will block this deal under the auspices of CIFIUS.

Remember the last few times the Chinese have attempted to buy into U.S. assets they were rebuffed under the guise of strategic value to the U.S. With Obama in China pressing for possible appreciation of the Renminbi? The trade off may well be allowing the Chinese to purchase high technologically valued assets in the U.S. If the CIFIUS committee were to block this deal, we won’t know for a while, look for great friction to develop between the U.S. and China

Also out of Asia, tonight the Taiwan central bank announced that they are banning foreigners from putting money in bank time deposits. This is a new type of effort to place constraints on capital flows like the Brazilian 2% tax announced last week. We must stay alert to more of these actions as emerging markets attempt to halt the rapid appreciation of their currencies. The impact on the Brazilian REAL has been negligible but we can look for continued efforts to do so. If this becomes contagious the equity markets will be the recipient of that pain.

From the realm of the absurd we have our man Timmy Geithner in Japan reiterating his strong dollar mantra. Do they ever tire of looking like idiots on the world stage? The last time Geithner was in China college students openly laughed at him in a Q and A session he was having and that was in June.

What exactly has the Secretary of Treasury done to put any bite in that statement? We want to report that the Rick Mishkin piece in the FT elicited a couple letters to the editors that followed upon our criticism. One was written by an economist we admire greatly, Andrew Smithers, who noted that of course you can discern a bubble. Smithers has done a great deal of work on valuing Wall Street by using Tobin’s Q theory so when he is critical you should take notice. There are no good bubble periods for they only create pain further out in time as we saw with the bursting of the Dot.com bubble. The Fed held rates far too low for too long and created the housing bubble. Enough said. And then his eminence Sir Alan followed Mishkin with a speech in which he discussed how the recent equity rally was smoothing the way for recovery. Oh the rehabilitation of Greenspan is a work in progress. Reminds one of Lin Piao.

Yra Harris

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