October 25, 2021 
 Monday 
 
 

Forum
Topic:
How to Approach Thin Veins & Cost

       

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 By Michael Miller

10/07/2014  3:21PM

I agree with the problem cited below. The solution meets requirements for a "pro rata in kind dividend". Another separate entity (not our company) has agreed to settle all unwanted gold with a cash payment. Even though people with small share ownership fit into the pro rata requirement, it is lawfully possible to declare a dividend in gold as done by Ranchers in silver years ago.

While an in kind dividend may sound rather outlandish, it appeals to many I have met. All this is speculation at the moment; however, it has been a serious consideration in the past. Your other points are well received. The main requirement is producing enough gold to pay debt, fund long term exploration plans and return a liquid stock market. Impossible at the Sixteen to One?? No. A sure thing?? No.
 By RyanBaum

10/07/2014  11:35AM

Cart before the Horse

While this debate is interesting, it puts the cart before the horse since we first need to figure out how to get past the liquidity constraints our company currently faces.

If we ever did reach a point of producing enough gold to pay off debts, build adequate liquidity for future development and have excess for shareholder distribution, cash dividends would be more practical to shareholders than a gold dividend. We could not logistically distribute physical gold to all shareholders in per share amounts so it would need to take the form of gold placed with a depository firm and only paper receipts provided as a dividend. Shareholders would probably prefer cash so that they could decide what form of reinvestment they want—more shares, physical gold, etc.
 By Michael Miller

08/16/2014  6:24PM

Fred,
Some really experienced people have tried to figure it out. You may not know this but a driving force behind me is issuing gold dividends. It can be done in our corporation because of the shareholder make up and share outstanding.

In 1995 our new detection technology and talented crew filled the safe deposits vaults of two banks in Grass Valley. My board of directors authorized my long held wish to start a dividend program. This Company has a history of dividends unequaled by any American gold mining company. The owners were handsomely repaid for their loyalty and financial/ management. How great it must have been to see those checks arriving all during the depression. I heard many stories from shareholders as I canvased California for proxies to redirect a stagnate board (1975-83).

The dividend caused us to establish a background on how to accomplish the deed. It is like most challenging things: the first time is usually the hardest. The paper work for a gold dividend will be a minor adjustment from a cash payment. The implications for cash vs gold are major, however, and still one of my burning desires.

It will be revealing when the holders of shares in street name are sought and their addresses, when the board of directors authorizes another dividend, this time from our inventory. The legal guideline the Company will follow will be the Record of Shareholders that have been meticulously maintained for over 100 years.

Perhaps then we all will have the answer to the question, What is going on with this odd grey market?
 By fredmcain

08/15/2014  12:46PM

During the course of the last year and a half or so, I have been in the process of buying shares on the so-called "grey market" and personal finances have allowed. I bought some in my tax-sheltered IRA at Vanguard and more recently I have been trying to buy some through PennTrade - with the intention of eventually getting a certificate for those.

What I have noticed is that during the last six months or so this is getting harder and harder to do. It seems they just no longer trade and on those rare occasions where they do trade, someone else gets them.

There have been several instances where shares changed hands for a price that was nearly HALF of what I was offering and yet they were sold to the buyer at the lower price. Go figure.

Fred M. Cain
 By fredmcain

05/30/2014  9:26AM

Michael,

A most interesting post from you as usual. I have a couple of thoughts on this. The first one is that I think I can see somewhat of an analogy here between mining and agriculture. There are many “BIG” farmers today who are using these absolutely humongous machines, many of which sell for a hundred or even TWO hundred THOUSAND dollars (or more) a copy. Needless to say, these guys end up taking on a lot of debt.

Many of the smaller farmers who are STILL farming with 1950’s era tractors (or at least 1950’s sizes of tractors) are doing every bit as well as the big guys, never mind some of the Old Order Amish who are still farming with horses!

The second thought is that I am still puzzled and bothered by the difference between so-called “trackless mining” and more traditional, rail-based mining. As you know, most if not all of the “Big Guys” have gone completely trackless. And, as you know, trackless mining demands absolutely HUGE adits and drifts to allow the trackless machines room to maneuver and pass each other. And the trackless machines themselves are not exactly small ticket items. How can this be more profitable than using rail haulage? My suspicion is that it might not be. So, why are they doing this?

To return to the agriculture analogy, why are big farms using quarter million dollar farm machines bought on credit? Does “herd mentality” play a role here? Or, is there an element of pride of farmers (and mining companies) all wanting to be the best at doing the “LATEST thing”?

One thing that would seem obvious to me is they go for this stuff in order to increase their volume. The big machines do indeed succeed at that. But if those huge machines increase your volume by a factor of ten and also increase your costs by a factor of ten, how much further ahead are you?

I am reminded of the old joke about the farmer who was driving watermelons to the market in his old, beat-up Ford pick-up truck. He found that he was losing about 10 cents per melon. Then he found what he thought was an obvious solution. He went and bought a much larger truck so he could haul more melons!

Is this what might be taking place with trackless mining? I also belong to a couple of other mining forums. One small coal miner from Pennsylvania told me that he likes the quaintness and the history of rail haulage but as a miner he’d rather work with trackless equipment (possibly in an air conditioned cab, eh?) because it’s more “flexible”. There’s nothing that’s worse, he told me, than dealing with a strategically placed derailment in a rail mine.

Another hard rock miner from Arizona told me there’s no way he’d even consider going trackless if for no other reason than he didn’t know how he’d deal with the fumes. He’d have to put in a much larger and more expensive ventilation system. So, right there you have two conflicting viewpoints from miners.

I still haven’t found what I feel are satisfactory answers to my trackless vs. rail questions but there is one thing I am sure of. The Original Sixteen To One mine is doing just fine using the methods that you’re using. Good for you! “If it ain’t broke don’t fix it”.


Regards,
FMC
 By Michael Miller

05/28/2014  10:34AM

Even though my mining in California spans forty years, it still surprises me when the need and importance of defining our work becomes an “Ah ha” realization. No wonder so little of the general populace is in the dark about this vital industry. I just had an “ah ha” experience with the hidden costs of employing a miner. California has a very suppressive workers compensation history. The rates are high. Several governors tried to improve the system yet it remains a big reason why industry moves to another state.

State Fund notified us the base rates (per $100) will increase for underground miners ($41.38 to $52.85). Surface miners decrease ($22.86 to $22.16). Clerical decreases ($1.06 to $1.03.

I submitted the following work description for our miners during the construction stage of mining. It coincides with exploration and development, those methods of work prior to production. Tunneling is less expensive. The reason is somewhat clouded but I was told that there is a lot more tunnel work in California than underground mining. Therefore, accidents are spread over more hours in computing the risk for the insurer.

“Tunneling is an adjunct to or fore work to mining. It is a horizontal or inclined drivage for development or to connect mine workings, seams or shafts. It may be opened to the surface at one end and used for drainage, ventilation or haulage or as a personal egress (walking or riding) from mine workings. The tunnel miner is experienced in the use and handling of rock drills and shovel loaders and in tunnel blasting methods.”

My “ah ha” is the realization how much gold mining has changed to big automation equipment. The ‘miner’ sits in an air conditioned cab all day each work day operating his machine. It is skilled work and I’m not critical of the ‘miner’; however, he does not resemble the miners of the past. Our miners are a slice of the past. They multi-task, work in a small environment and the machines they operate are those used years ago. Why do the traditional California gold mines resemble the miners of the past? The gold deposit dictates how we mine the most efficiently. The 21st century is alive and well in the Sixteen to One but the method of mining reflects a prosperous past.
 By cw3343

05/20/2014  9:25AM

Re: your last sentence below.
Not all stocks that trade on the OTC market are shams, or trade in shady illiquid back room deals.

Many large multi-nationals have de-listed from the NYSE and now trade OTC, such as Siemens, Nestle, Hitachi, Deutsche Telecom, etc.
(this not an endorsement of any of those names, and I have no positions - just using them as an example)
 By fredmcain

05/16/2014  4:25AM

cw3343,

Most interesting. I did not know that stocks were still being traded that way. That might be why I'm having trouble. Maybe no one at Vanguard is watching this or "picking up the phone" like you said.

Also, I had some one tell me that OSTO does not participate in the electronic "DRS" whatever that means. Not sure if that's a related issue or not.

All this leads me to believe that you should buy your OSTO shares while you can 'cause the day might be at hand when this is going to get cut off.

I had one broker tell me that our current government "will have no rest until they succeed in completely shutting down the OTC market". I hope it doesn't come to that but.....
 By cw3343

05/15/2014  3:09PM

The first paragraph in the post below sums it up fairly accurately. The term pink sheets is derived from the pink booklet that used to get distributed in the old school days. Often you would not know the price until you got the printed Pink Sheets.

From my experience, some of the trading in OSTO is still done old school where the trader has to pick up the phone and call at least a few other traders to see if there is any stock for sale/size/price, etc. This makes it iffy for someone just entering an order on an online brokerage account.

BTW, on 5/12 it was 3 trades:

3000 at .171
400 at .12
14,600 at .18
 By fredmcain

05/15/2014  5:20AM

Bluejay,

I agree whole heartedly that something is just not quite right with the pink sheets. But I still don’t understand who would do this and why.


If a person had 4,000 shares of OSTO (OAU) why would they sell them at 18 cents and get $720 dollars when they could’ve sold them for 25 cents and fetched $1,000? I mean, doesn’t that defy logic?


Several possibilities come to mind. One is that the seller is doing some kind of a favor for the buyer through a prearranged agreement. Another possibility is that someone is manipulating the stock in order to help someone cover a “short”. (Short sellers borrow shares, not dollars, then turn around and sell them hoping to buy them back later after a price falls. But then if the stock rises instead of falling they’re in big trouble).

The third and most disturbing possibility is that someone is intentionally manipulating the stock forcing the price down because they figure they can take over our company later on the cheap. I hope not but that possibility cannot be completely dismissed. That is one problem that comes with having a very thinly traded stock like this. The stock is more vulnerable to manipulation than that of a big company on a major exchange.
I don’t know – no one knows for sure – but I have this suspicion that there are not millions, not billions but perhaps TRILLIONS of dollars of gold locked up in the quartz veins under that mountain. That may have quite possibly come to someone’s attention. If they can trash our shares then pick up the mine for a song, they will probably try.

Regards,
Fred M. Cain
 By bluejay

05/14/2014  9:25PM

As a result of your experience, I would guess the pink sheet's operation is criminal. The government agencies will never prosecute as their next jobs will probably be working for the same criminals. Markets use to be honest, things have changed.
 By fredmcain

05/12/2014  9:03AM

18 THOUSAND shares traded today at 18 cents! I didn't get any, though, even though I had a higher bid on them. But higher bids don't seem to matter much in this market. :(

Regards,
Fred M. Cain
 By fredmcain

04/30/2014  10:40AM

Looks like another 2,000 shares traded yesterday on the "grey" market for 10.4 cents.

And today - this is really weird - another 390 shares traded for the same amount.

That would yield the staggering sum of $40.56. Sheesh! Go figure.
 By fredmcain

04/25/2014  8:00AM

C.W.,

I understand what you’re saying. You might not have been involved in these trades in any way but it’s still fun to watch and follow, isn’t it?
There are some of us who suspect –even believe – that at 11 cents, never mind 9 cents, our shares might be very badly undervalued. I guess you can count me in on that. But, and I think this is important, the longer I watch this the more it is beginning to appear that some kind of a “floor” is beginning to form under the “grey” market share price.

Hope springs eternal.
Regards,
Fred M. Cain
 By cw3343

04/24/2014  1:22PM

A single block trade of 15,000 at 0.11

(again, just info - I am not condoning or endorsing anything in any way/shape/form)
 By cw3343

04/24/2014  8:41AM

for those who do not have access to info:

on 4/22 one trade 4600 at 0.09

4/14:
1000 at .19
1000 at .19
2000 at .25

(none of this had anything to do with me, and is for informational purposes only)
 By Michael Miller

04/16/2014  2:51PM

No one should be afraid of a purchase into this 100 year old corporation at twenty-five cents a share. Regarding the two comments below; how many shares were sold at $0.25?

Fear is like a fire: If controlled it will help you; if uncontrolled, it will rise up and destroy you. Human actions depend to a great extent on fear. We do things either because we enjoy doing them or we are afraid not to do them. This sort of fear has no relation to physical courage. It is inspired by the knowledge that we are adequately prepared to face the future and events it may bring – poverty perhaps, or injury or death.

Every noble acquisition, and gold is a noble acquisition, is attended with its risk. He who fears to encounter the one must not expect to obtain the other. Please let us know when and how you got a stock certificate guaranteeing the acquisition.
 By fredmcain

04/16/2014  4:04AM

cw,

Uh, yeah, there is a story behind this. I am partly responsible, I'm afraid. I hope it's for the better!
 By cw3343

04/15/2014  4:04PM

Wow! Shares up over 100% yesterday, with an interday high of 0.25

bizzare...
 By fredmcain

03/17/2014  9:19AM

Does anybody on our forum know of any other companies doing underground mining in California with trammers, ore cars and tracks? I have stumbled over a couple but they are dog-gone hard to find. I suspect they are out there but how do you find them?

I have this theory about underground mines that mine with tracks. I see or perceive, a company using rail to mine as having an honest, long-term commitment to their operation(s). I suspect that some so-called “trackless mines” are attempting to do business by getting in quickly, recovering any remaining resources that they can, also quickly, and then get out again.

Surely this is not the case of all trackless mines but I suspect it may well be the case for many of them. Does anybody else have any ideas on this? Is there a connection between mining with underground railways and commitment?

Regards,
Fred M. Cain

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