August 9, 2022 

Risk Management Strategies


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 By fredmcain

08/28/2014  4:39AM

The August 25th edition of the Wall Street Journal (WSJ) ran an article that caught my attention entitled “Business Thrives in Abandoned Mines”. The article reported on how exploring abandoned mines looking for traces of gold in South Africa has become a popular (and very illegal) trade among hundreds if not thousands of people.

Compared to the U.S., the nation of South Africa is a relatively poor country and people with their backs to the wall are willing to risk life and limb in search of $50 a week in gold in abandoned mines.

The professional mining industry in South Africa has undergone a painful downturn that has resulted in the laying off of thousands of miners. The WSJ blamed this in part on cheaper gold mined in China.

South Africa, it seems, has a staggering number of abandoned gold mines. The WSJ put the figure at an unbelievable 4,400 abandoned gold mines in South Africa alone! They are almost impossible to patrol and have become fair game for impoverished, out-of-work miners looking for gold.

Many of the abandoned mines have been “permanently” sealed with concrete slabs at their adit portals or shaft collars. This has not been much of a deterrent. The illegal miners simply blast the plugs open again and descend. Some miners have been known to descend up to 3,000 feet or as far as they can before they hit water. Obviously, with the mines closed, the pumps have been silenced and the mines are no longer kept dewatered.

In addition to the ever present threat of cave-ins, the illegals also encounter a lot of violence with rival gangs of miners looking for gold. Life, it would seem, sounds like it’s cheap over there.

The whole article left me with an impression – or a reminder – over just how much we have to be thankful for here in America! Sadly, just what kind of a direction are we headed in? Could it be that with all our over-the-top regulations, mining might one day become no longer profitable for anybody? If that point is ever reached here in the U.S., could it one day pay more to simply abandon all of what’s left of our mines and “go illegal”? An illegal miner, as long as he or she doesn’t get killed, has to pay no insurance, pay for no permits or taxes, etc, etc. You have to wonder about this.

And here I am getting back to the Original Sixteen to One Mine. I think it is almost criminal on the part of our government to impose regulation after regulation after regulation on an operation like this. For its part, the Sixteen to One is bending over backwards to comply. But when we do the government comes back with, well, now we have to add new regulations “to keep everybody safe” and “protect the environment”.

Well, the liberal ideology pushing some of this stuff might end up with something one day that they never intended or figured on. Illegal mining would be far less safe and there would be no “environmental protection” observed by Illegal miners. To quote an old, worn-out cliché, “The pathway to hell is paved with good intentions.

-Fred M. Cain
 By Michael Miller

07/22/2014  10:38AM

Wow! I just finished reading this four year old topic. The best way is to start at the first entry and scroll up to the next entry chronologically. For recent viewers to the FORUM with an interest in learning about this one-of-a-kind gold deposit, I highly recommend taking a few minutes to review this remarkable exchange of dialog between serious parties.

Upon completion I had to smile and snort a laugh out loud. Four years later the questions, opinions and insights of the participants ring as true then as they do today. Time may be running away from me and my crew from mining another super pocket of gold; however, all familiar with the Sixteen to One know that it remains hidden from our drills and explosives.

Enjoy a look into the recent past but verified from over 100 years of experiences. We have a saying when someone asks, how’s it going at the mine? No gold right now but it could be in the next round.
 By Michael Miller

07/17/2012  10:56AM

The guys below offer worthy advice but my analysis yesterday (below) was offered for its historical perspective. Expect to see and hear gold mining promoters (most of whom are far from actual gold miners) tout exploration programs to attract people with little background in gold. The pace will increase over the next two or three years, maybe even four. The hucksters want a market for their accumulation, be it gold, gold futures or gold related stocks. The hysteria will be short lived and once distribution is accomplished, the decline will be swift.

The “toutsters” will repeat and raise many of the reasons for acquisition as they did before with questionable vigor: inflation, security, insecurity, and the expectation that their exploration protect will be bought out by a “major”. They will not report how long it will take to permit a mine and bring a prospect into production. They will broadcast meaningless drill results to suggest production at a profit. Beware!!!

Over hyping a gold mine in theory is no different than the hypes in high-technology, medicine, real estate, energy and health care. The players may be different but the marks have similar tendencies towards finances and investments. The upcoming gold drama will take different paths from the drama leading up to $850 per ounce years ago.
 By bluejay

07/16/2012  9:35PM

It's apparent the best time to acquire more shares or to begin new purchases is the lull between discoveries.
 By Rick

07/16/2012  5:30PM

I always urge everyone to read below first...

Considering the total drift and raise square footage already mined vs. quartz deposite worthy of gold, this is a live horse.
 By Michael Miller

07/16/2012  4:12PM

California’s largest high-grade gold pockets were mined in the Alleghany Mining District according to the State Geology Bulletin 193. Eleven of the top 25 were mined on Sixteen to One patented mining claims. The spot price received today for those eleven pockets would be over four billion dollars ($4,114,950,000). The current spot price of the largest pocket, which was mined in the 1920’s, would increase our bank account by $154,814,400 or $11.55 per each outstanding share of Original Sixteen to One Mine, Inc.

There are no arguments against the fact that the Sixteen to One quartz and gold sells for a premium over spot. Twenty years of sales records are proof! If only 50% of that largest pocket qualified as jewelry slabs or specimens, revenue from that single pocket would be $222,546,500 or $16.61 per share.

Most geologists, historians and men that have actually worked in our mines reckon that the biggest pocket deposited within our mining claims remains to be found. To find and mine this pocket is our mission. (NOTE: the 10,000 ounce pocket we mined in mid-1990 would become number eleven if the State of California updated the list.)

Many times people have asked me why I stick to this dead horse of a mine, industry or occupation. The above mathematics is a partial reason. I believe we will find that pocket. Do you?
 By Hans Kummerow

12/27/2010  4:14AM

Mike, is it correct, that the two high grade pockets on the 1915 progress map, that you have written on in May last year - see below - would be worth 60 million US $ at todays prices?

Could you take a picture of that part of the map and send it to me or post it on the website?
 By Lone Wolf Geologist

12/15/2010  6:21PM

I have worked in the Alleghany district for over 35 years. Less than half the gold on the 16:1 Mine property has been mined.
 By Michael Miller

12/15/2010  5:46PM

One-way to send article to others: print article, scan it, transfer to desktop or my documents, and attach to e-mail.

Someone else chime in with an easier way. There must be a better way, Lone Wolf Geologist. Hope someone else shows the way. Is there any gold left in the Sixteen to One or have the "old-timers" mined it all?
 By Lone Wolf Geologist

12/15/2010  3:26PM

How can you e-mail this article to friends?
 By Michael Miller

12/15/2010  12:44PM

Please go to NEWS on this web site for an interesting newspaper article published on December 13, 2010 in The Union.

It was a surprise to see this article in the semi local newspaper (Grass Valley). I’ve talked with the publisher/editor, Jeff, over the years. When he was typing on his computer while in his office, he must have been writing down my words. Hmm, I’d better be careful what all I say about gold mining to him in future conversations. To his credit, he got my sentiments right. Hope you enjoy his article.
 By Hans Kummerow

11/08/2010  1:51PM

Robert Zoellick's recent remarks on a possible revival of the gold standard as an international benchmark to measure inflation-rates or currency-fluctuations are good news for Origsix-Supporters. After all, Origsix was created in times, when an official gold standard was strictly observed inside the USA.

The risk-management strategists of the World Bank have obviously rediscovered the value of precious metals whose supply is limited by scientific facts that cannot be tampered with. Better times for Origsix may be just around the corner.
 By Rick

09/16/2010  7:38PM

As a canvas painter, I sometimes refer to it as the "rubber-band effect"....the harder the pull, the bigger the snap.

There are times when I paint, and curiously times when I never paint, building the momentum for when brush hits the canvas (this is never intentional, it just happens this way)...usually the result is an explosion of something entirely new, and good.

The underground is waiting. The political and regulatory caltrops have been thrown down in front of this mine's main focus for a very long time (pulling the rubber-band), and the obstacles have never stopped the next pocket.

This is the time!
 By martin newkom

09/16/2010  2:08PM

I heard on CNBC yesterday that
Gold is becoming the "other"
currency "world-wide"; not only
in places like Sierra, Trinity
Counties. Each pocket found in
the Origsix is like a "Jackpot"
waiting to happen.
 By Hans Kummerow

09/15/2010  10:21PM

The gold seizure, that has happened in 1933, may happen agein if things become bad enough.

In 1933 it was smart to have gold jewelry rather than coins, bullion or certificates.

To read the orginal wording of President Roosevelt's gold seizure order go to:
 By Dave I.

08/26/2010  4:51AM

The securities market is the back bone of the derivative market. Which is why it got in trouble with mortgages being held as securities.
There has been some written news about another type of security which is electric power plants. there is a plan for the government to guarantee loans for development of new electric power plants. once these plants are built they then become security for the power plants them selves as well security for other development such as new housing, or other higher risk ventures. Mining would fall into higher risk ventures.
In the past a hydro electric power was discussed in this forum. I am wondering if it is windy on your hill top?
 By Michael Miller

05/18/2010  11:48AM

One of several hidden asserts of this mighty little gold company is its map collection. We don’t write about it much but the information contained therein is priceless. Here is what it means to me. The maps cover over one hundred years of development. One grouping is titled “Progress Maps”. They are usually depicting annual work and the months are colored individually. My mind turns to the appropriate dates of these progress maps. I transform into that miner, geologist, engineer or mining executive while studying the monthly (yearly also) progression of development and gold production. Why did they go here? Why did the go there? Why is this block of ground untouched?

The answers are speculative but, come on, all mining is speculative as are most investments. The ‘whys’ of the Sixteen to One are great topics for discussion. These maps affirm a fact: this deposit involves risk with hope of large profits. Also we have years of data beyond the times the maps were drafted.

Work to reorganize the map collection is underway. Years ago an old building was renovated to house the maps and have space to spread them out. Other needs preempted the reorganization…no longer so. The thirst for knowledge of the past now preempts other needs. I am thrilled to return to study of the work of yesterday’s miners. With each map comes the opportunity to learn.

I had an epiphany this morning after unrolling a 1915 map of the Tightner Mine Company. The map details the early working which are near bedrock elevations above the 250 level. The gold values are recorded in dollars when gold sold for $20 an ounce. One stope is breath taking…$700,000. Not far away is a $350,000 stope and there are many values at five figures. Times these numbers by 60 for gold today. Breathe taking!

Back to the epiphany. Are there no risk takers today for investing in this gold deposit? Apparently the answer is yes. Why? No one has taken the time and effort to understand this gold deposit, how it became successful and whether our plans will reap large profits. It is as simple as this…we are on our own.

Mining legends like Fuller, Searles, Foote, Kallenberger, HR Cook, Alling, Ferguson, Bennett and Taylor left their imprint in Alleghany. I have my answer to understand the risk/reward of mining for gold here, which is strengthened with these maps and thoughts of these great men. Thank you..
 By Hans Kummerow

05/06/2010  4:27AM

It is good to see in the News-Column that a portable, underground rock-screening device has delivered promising first results.

This is exactly the type of low-cost exploration activity that seems indispensable before money can be raised to start drilling and blasting again.

Manage and minimize exploration risk. Manage and minimize production risk. Good luck!
 By Hans Kummerow

03/14/2010  1:05AM

There is a lot of talk in Europe right now about hedging the credit risks that weaker Euro-Members like Greece, Spain, Portugal and Italy cause for the Euro-Currency via creating a new European Monetary Fund similar to the IMF.

And guess what the German Department of Finance has proposed to back up that fund? Plain old gold. Is that a new approach to manage paper credit risks? Nope. It is a very old and very conservative approach.

But right now the biggest risks for Origsix seem to be legal risks. Maybe you'll have to do something extraordinary - like converting the mine temporarily into a "gemstone quarry" to get it off the hook.

Maybe in a not too distant future a new California Administration will be happy to see some folks re-converting "gemstone quarries" into real gold mines again.

Anyway, I wish you luck.
 By Dave I.

03/02/2010  10:11PM

After seeing "How The Earth Was Made". I stand corrected as for the gold deposit in the quartz vain. It is a very good program, and the interior of the Original sixteen to One looks very promising for much more gold value. I like that ribbon quartz.

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