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Correspondence from the President of OAU

       

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 By Michael Miller

03/07/2007  10:14PM

March 5, 2007

Dear Directors,

Just a brief update on the underground progress. Monday (3/05/07) I headed into the mine at 7:30 am. One miner absent. Ian on the hoist and three miners working on pulling the 58 hp pump from the 1500-foot level. It quit Friday morning. This is the same pump we paid almost $6,000 to rebuild the electrical parts a couple of months ago. It should last two or more years, especially since much of the surface water has been collected on the 800-foot level and flows out by gravity. Very disappointing. Britt will check everything to determine the problem. Once we have an idea and if it is not our fault, I plan to talk it over with the electrical shop about its responsibility for the failure.

I went down to the 1000-foot level, north to the active face. Not happy with the progress. It has been slow because of many reasons: track needed repair, tight drift so mucking machine cannot throw bucket and must reverse direction to load ore car, semi rotten old timber lying in drift, dump is getting farther away from face as we advance and more.

Next, examined the two headings south of the Tightner shaft below the 1000-foot level. These spots were selected for a quick look that could yield gold with each round. Several spots exist. We have mined in two with piss poor results…gold but amount did not cover labor costs.

Met Ian about 11 am at the 1000/Tightnert station. We went back through the 1000-foot level and made some important changes to the mine plan. As you know we are betting the mine on the success of clearing the 1000 level to the 1064 winze. Not only will we have a good highway but also we are installing 2-inch air and 2- inch water lines as we advance. We have some very interesting gold in three areas above the level and will need utilities to set up and drill around the gold in order to get it in large pieces. Ian and I believe that we could have similar gold production as we had when we opened the southern part of the mine in 1993-94.

The first decision was to reemphasize that moving the muck must not stop, which means providing all the support to extend utilities, timber where necessary, repair and maintain the level. The mucking machine, no matter who is running it, must be advancing all day long. We then decided to shut down the short tern headings after this week and move the men. We found gold along the 1000-foot level. After one surface blast, we decided to pursue it later. Working in the drift could slow down tramming the waste rock to the dumpsite and I want nothing to slow moving the muck. Well, we hashed it over and developed a plan in which we will accomplish both goals: finding gold and reaching the 1064 winze. We are starting a new drift on the level in a hanging wall vein, which was recently discovered. It has never been mined. Vein junctions are favorable structural occurrences for gold deposition. Breaking virgin ground along the strike of the vein instead of raising up dip theoretically improves our chances of locating a pay shoot. The concern we share is twofold: we may not find gold or it may take 100 plus feet to gain a statistical average for success; and our gold inventory is shrinking.



Next, Ian and I walked up the Tightner and took off to the north on the 800-foot level. We’ve been here many times and have discussed mining options over the years. This is an interesting part of the mine. Because all of our attention is not only north of the Tightner shaft but ultimately continuing north into Red Star country, we are becoming familiar with the subtleties of the old workings and the exposed quartz, mariposite and serpentine. What it is telling us is that while it has been rumored for decades that this part of the mine was unproductive, it is quite possible that from 100 to 200 feet beyond the end of the 800-foot level, we will find the continuation of a known rich pay shoot. The geological explanation involves negatives about dome structures and very thick quartz veins. Again this heading will not provide us with immediate inventory we need to finance operations in the near future. We are looking at a two to three month project, which under normal circumstances would not be a concern. I authorized Ian to prepare a plan and time projection to undertake this heading. I will work with him so we will not break a rule I learned from our failed attempt to dewater the Tightner to the 3000-foot level.
 By martin newkom

02/24/2007  6:50AM

I don't think I would be inclined to do any banking or
loan business in Nevada Co.
there are too many adverse
factors there.
 By martin newkom

02/23/2007  9:36AM

Mike, have you tried Plumas
Bank in Quincy?
 By bluejay

02/22/2007  8:35PM

Mike

Sorry to learn of the Company's request for a line of credit being turned down by the Citizens Bank of Northern California.

One good reason for not receiving the line of credit from this particular bank might be that lending institutions all over the country are reducing their loan exposures for a good reason.

A real growing problem for banks is that their real estate loan divisions are starting to get whacked with an increase in loan delinquencies and defaults.

The following excerpts are from a February 22, 2007 dated report from Bloomberg.com by Jody Shenn and Elizabeth Hester.

"At least 20 subprime lenders have shut down, scaled back or sold themselves to larger companies in the past five months."

"Subprime lenders typically charge rates that are at least 2 percentage points or 3 percentage points above safer prime loans. They are given to people with poor or limited credit records or high debt."

"The level of delinguencies for subprime mortgages made last year is the highest ever for such loans at a similiar age, according to New York based Bear Stearns Cos."

"Federal Reserve Governor Susan Bies said yesterday the subprime mortgage market is behaving in a "very problematic way," though the broader banking industry MAY avoid a crisis."

Susan Bies is saying also that the broader banking industry could have a crisis. This is a good enough of a reason for banks to curtain their current lending practices.

In regards to the problematic subprime loans, Scott Simon, managing director at Newport Beach, California based Pacific Investment Management Co. says, "Problems on subprime loans made last year will extend through 2008, when rates on many of these adjustable rate mortgages will reset. We're not near the end of this."

Mike, why don't you give John Embry at Sprott Asset Management a call. He loves to invest in special situation gold companies.
 By Michael Miller

02/22/2007  4:31PM

Why does the subject of GOLD cause such mistrust with some mainstream institutions and people? Bankers, investors and others threw money at nothing but an idea in “dot com” ventures a few years ago. People throw money at many high risk and speculative ventures all the time. But although mining makes many desirous to play, most will shrink away in fear of ridicule. In reading the history of gold, one will always find the names of successful businessmen who gave a good mine plan a go with their risk capital. Some would lose but some gained enormously. At least they had a good time and supported one of the toughest occupations in the world. I thought about this last rejection a couple of days later and decided to write the bank.


Judy Hess, President February 20, 2007
Citizens Bank of Northern California
305 Neal Street
Grass Valley, California 95945

Dear Judy,

Congratulations on the name change and the opening of a new branch in Auburn. These events indicate the success the bank is having under your leadership. I write to bring a concern I have with the bank. I really hope that with your growth and expansion plans the bank will retain its hometown feeling.

My company was recently rejected for a commercial line of credit, well secured by prime real estate. I presented the bank with an Executive Summary explaining the proposal. The rejection was oral and without an explanation, which left me somewhat puzzled. I ask that the request be further reviewed because I am confident that an approval is appropriate.

The applicant, Original Sixteen to One Mine, Inc., is the oldest US gold mining corporation and the longest operating gold mining organization in America. It operates in western Sierra County and uses the Nevada City/Grass Valley area as its commercial hub. It employs men and women from Nevada, Yuba and Sierra Counties. A few years ago it was the largest non-government employer in Sierra County.

There are about 1300 owners or shareholders. Many live in Nevada County and can trace their ownership back to grandparents or great grandparents. For many years the Company’s miners participated in mining events at the Nevada County fair. People continue to tell me how much they enjoyed the Sixteen to One exhibit and were sorry that the fair turned it away. Your Nevada City branch proudly displays an historic specimen collection of gold from the Sixteen to One mine. A photograph of the early Citizens Bank in Nevada City shows sacks of high-grade gold brought to the bank for safe keeping.

With a little more historical research you will find that both the Company and I established long relationships with your bank, Westamerica Bank and Gold Country Bank (an easily recognized trail of banks). I have followed your exceptional lady bankers wherever their careers took them. Also, the Company has financed several loans with the bank. I just completed a $2 million contract with California’s Department of Parks and Recreation and used a $200,000 line of credit for my working capital.

Because of this and more I ask you to reconsider the line of credit request. I realize that the perception of gold mining concerns some people. There have been many unscrupulous “mining men” over the centuries of gold mining. Several have exercised their white-collar criminal behavior in our area. These “mining men” should be easy to spot, especially in local operations. Neither the Company nor I fit the profile of questionable operators and should be treated as professional businessmen, not lumped into high-risk speculators. Most of the mining men I know and have interacted with are some of the most cautious and conservative professionals I have met.

With what has occurred in the gold industry over the past decade and what is taking place with gold prices, we should be eagerly sought out as a businesses being in the right place at the right time; however, this type of review most likely did not occur by your bankers, and the line of credit was rejected. I believe that whoever decided against us did so because of his unfamiliarity with the industry and the specifics of our operation.

The use of proceeds outlined in the Executive Summary will mostly be spent in our communities. The gold we mine and the increased gold we will mine resulting for implementing our business plans adds new wealth to our communities. It benefits other local businesses. Everybody wins, including the bank and its owners. The assets we will use to collateral the line of credit are worth many times more to its owners that the amount of the collateralized debt. There will be no foreclosures with this transaction! Forget about the mining assets. The value of the timber and land are enough to secure the line of credit. (Timber values should be well understood by the bank.)

My final thought of the recent rejection stems from thoughts about the President’s holiday America just celebrated. In FDR’s inaugural address on March 4, 1933, he said, “Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade.

“Yet our distress comes from no failure of substance. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men…

“Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live…”
In 1934 FDR adjusted the purchasing value of America’s dollar by increasing the value of gold from $20.67 an ounce to $35.

Sincerely yours,
Michael M. Miller, President
 By martin newkom

01/10/2007  11:54AM

A very appropriate eulogy on Tim, Michael. Thanks.
 By Michael Miller

01/10/2007  9:55AM

January 10, 2007
Alleghany, 7:20am

Ian just phoned to tell me that Tim Sapp died yesterday. Tim was one of the pioneers in the rebirth of gold mining in the 1970’s. He was loud, boisterous, made a lot of people laugh and was a disgusting blow hard to many others. As Ian said, "The flag will fly at half mast today at the Sixteen to One."

I met Tim by chance in October, 1974 on my second trip to Alleghany. Our interests were the same: we believed the Sixteen had a future. We started out working together to get the mine open for production. I have kept a diary from the start of this adventure. My first entry says: “Alleghany with Dwight (father) 10/22. Met Tim Sapp, Bill Fisher, Ira”. Tim was a logger from Grass Valley. He logged the Sixteen to One. His greatest accomplishments were rerouting the public right of way away from the old buildings and mine portals around 1973 and bull dozing a large flat bench to reestablish new surface facilities around 1981.

The 1970’s and early 1980’s were indeed wild times for high-grade gold miners in California. When I was presenting talks about gold later on, I summarized the times by saying, “It was a time when many of the players were inexperienced about gold mining. After all, gold was only recently allowed the freedoms from government control on December 31, 1974. Actually many of the gold players were white collar criminals, but in this industry they were called ‘colorful characters’.” Well, Tim was a ‘colorful character’ who fit well into the image of old west gold mining.

From my diary: November 9-Letters to Sapp, Jansen (Sixteen attorney in San Francisco), Connor, (Sixteen president). November 20-Alleghany. Met Tim and son. Dinner with Mrs. Sapp in Grass Valley. November 22-Met at mine for 3 hours. Tim wants money to start mining. Interested and offer to pony up the money but he has no agreement in writing from the corporation. (I was young and eager but not foolish: no written plans and agreement no money.) December 19- Tim phoned in pm. Upset about calls to S.F. December 26- Met Tim and Timmy at Sacramento Inn. They had meeting with Connor in Oakland. December 31-Met Tim and Timmy in Grass Valley. Pledge of money then Company will change agreement. Invited to join. January 3, 1975- Alleghany with Bill Fuller (long time company geologist). Reviewed geo maps. Tim angry; met him and Timmy in Grass Valley. Jan 4-Tim phoned and said S.F. agreed to changes in agreement. Jan 5-Drove to Alleghany from Sacramento. Toured property with Tim and Timmy. Took a D-8 to Chips Flat-snowy, long trip. Casey’s then steaks at Willow. Expenses: beer and wine $10.25; Lunch $4.48; Dinner for six $41.50; Long distance pay phone $.75. Jan 11-Tim phoned. Wants air compressor. February 26- phoned Tim. Negative on partnership and agreement. Told him won’t go forward without them. Phoned Jansen. He will write letter about permit. Acting as Tim’s attorney- conflict of interest? March 1- offer to purchase air compressor. Talk about one hour. Same stuff-nothing coming in writing. Changing direction. May 23-Saw Tim and Timmy for first time after quitting project Mad!

Tim went forward at the mine with other people. The corporation took a path that I did not like. I bought the Morning Glory mine and leased the Osceola mine .Tim was a colorful character. Although we parted, our paths crossed many times. He was on the hot seat and in the middle of turmoil between investors, promoters (he was one of the best advocates for the Sixteen’s gold future) and the “old corporation” as he referred to Original Sixteen to One Mine, Inc. His group formed a Nevada, Sixteen to One corporation. There was much confusion as to who was who. It turned out that Jansen, Connor and the rest of the “old corporation” sided with Tim’s group against me. They clearly were intent on transferring the mine to the Nevada Corporation, which would terminate Original Sixteen to One Mine, Inc. Tim really just wanted to go mine, tear up the land with his D-8 and have a good time. He supported his backers most of the time.

Tim enjoyed life and he passed enjoyment to those who surrounded him. The refrigerator at the mine was always full of beer. Food was plentiful. One night I was returning to Alleghany from Sacramento and stopped in at Petersons Corner for a beer. Tim was at the bar with some investors and invited me to stay for dinner. Money was no object for Tim because he could talk up the mine and get people to invest. I accepted the invitation. We all ate lobster and steaks, the most expensive item on the menu. Tim always extolled the virtues of the mine. His best pitch was “I will get the nothing gold out of the quartz”. He painted a good picture. He worked as hard as he played. He also got involved with some questionable partners.

One night I got a phone call at home in Alleghany from Tim. He was at the local bar with a lot of background noise. He starts talking and then says, “Don’t raise your voice to me young man.” I say, “Tim, what are you talking about? I’m just talking.” He says, “Now listen here. You calm down, blah, blah, blah.” I say, “Tim what are you doing?” and then realize that he is performing for the guys in the crowded bar. He is telling that Miller guy a thing or two. Well, I listened for a little longer. He said, “Now don’t you threaten me.” I said in a quiet voice, “Hey, Tim. Have fun. I’m going to go. I have things to do.” It was a great trick for him, one of many that he used to control the “locals”. He hated what I was doing (going after Jansen and Connor for mismanagement) but respected it just as I respected his position. We had good laughs later, when we recalled the tumultuous years.

Well, Tim. She is a great old girl, the mine. The gold was there and there is plenty more waiting for the miners to find. You were right in hitching your wagon to the Sixteen. I know you wish us success. Tap ‘er light. Your friend, Mike
 By Michael Miller

12/04/2006  5:05PM

Regarding the Johnny Yuma thought of dismissing the value of geologists, not so. Recording drill data or estimating reserves is a worthwhile adventure. As the geologist passes his data and interpretation forward, it often becomes a tool for promoters, stock pushers and business writers to manipulate. Definitions become meaningless when drill calculations are lumped together. The novice quite likely does not know the differences.

We treasure the work of art and science of many geologists and will continue to do so. It is a highly skilled trade to be an exploration geologist.
 By John Yuma

12/01/2006  8:39AM

Dear GFX, I take exception to your 2nd paragraph. If all you do is drill it, average it out and mine it, why have mining companies paid me well for almost 40 years to sit drill rigs for up to 12 hrs a day and prepare detailed drill logs and x sections after a good geologic map was prepared? Why are approx. 2,500 geologists working in Nevada? Game, speculation and guess are not geologic terms and should not be used to describe any mining situation.
 By gfxgold

11/30/2006  11:45PM

I did not see anything that would suggest that Mike does not have any regard for geologists or the science of geology. He may or may not but, I did not see that in his writings. I feel that whoever is promoting an ore deposit, may at times, inflate or wrongly conclude the results that a geologist or drilling team supplies. As for the nugget effect, The 16 to 1 is the mother of all nugget effects.
Mike has to be more a "Man of the Cloth" than a promoter. After all, what do you call someone who tries to convince you that there is a great reward waiting for you... You can't see it. You can do scientific tests for it but, they may not tell you anything. We can show you the paths of those who went before us and they got their reward. "Hallelujah Brother!"
So, if you have an ore body that has been core drilled. The cores are assayed. The results are averaged out. You mine the ore and come up with the final product, gold. How many ounces? Did the math prove to be right or wrong? To be right, it would have to be the exact number of ounces. If it's wrong well, isn't that a calculated or "Best Guess?" Some are just "Calculated" better than others (I guess).
 By John Yuma

11/30/2006  3:08PM

It is obivious from your comment concerning "the reserve game" "raw speculation or calculated guess", you have no regard for geologists or the science of geology. For my part, all my reserve calculations have been right on the money when mined out. Why is it deception to place a value on a deep drill hole if the intercept can be mined at a profit? Also, any good geologist knows to check for the nugget effect and if present how to compensate for it.
 By Michael Miller

11/28/2006  12:19PM

To those who take the time to understand our gold deposit;
To those of you who want to own a gold position;
To those who admire history and learn from its study;
To those who believe that riches await our miners’ discovery:

WHY WE CHOSE THE 1000-FOOT LEVEL NORTH OF THE TIGHTNER SHAFT AS A TARGET AND ARE BETTING ON SUCCESS.

Deciding where to send our crew is always a challenge at the Sixteen to One Mine. Unlike most of the gold producing companies in the world that bet on drill results (reserves) and gold prices, we do not follow this practice. It does not always work for others and certainly will not work for us. Reserve calculations fail and companies are forced to modify their mining plan or hope for increasing gold prices. Another flaw in the “reserve game” took place in a California gold mine owned and operated by Homestake. (I call the reserve analysis a game for several reasons: years ago reserves were defined as proven or probable; later inferred became a modifier for defining; now the term “resource” is used by mining companies to quantify assets and qualify dollar values.)

The reserve game requires either raw speculation or a calculated guess to determine the ore’s sphere of influence for each drill hole. Some are cautious and others are wildly aggressive in assigning a large sphere at the highest value. Another trick of deception is placing values on really deep drill holes. The ones to deceive are the stock promoter/analysts who then extrapolate a company's reserve reports into ounces of gold. Most stop there because history has proven that the investor or speculator will do the math of turning ounces into dollars via the spot price at the moment. Homestake had a different problem at its McLaughlan mine in northern California. It became known as “the nugget effect”. Every placer gold miner is aware of the nugget effect of a deposit. Gold will just appear and disappear. The original low grade, “no-see-um” gold miners were not significantly hampered by this mining truism. The nugget effect has an academic definition as well: anomalously high precious metal assays resulting from the analysis of samples that may not adequately represent the composition of the bulk material tested due to nonuniform distribution of high-grade nuggets in the material to be sampled. Homestake failed to meet its estimated gold ounces, so costs per ounce produced were higher than expected. The mine eventually closed and Homestake sold out and merged into a larger existing company. The nugget effect got them.

We have problems in Alleghany, although drilling for gold and reserves is not one of them. In our mining district’s history miners do use a drill for knowledge. Searching for hidden quartz is one reason to drill. Others are the creation of map projections and geology. In our historic files we have highly credible reports from noted geologists and use them today as if the reports were written yesterday. I admire God’s hand in Alleghany and fully embrace the evidence that what was laid down in nature some 150,000,000 years ago is still true. Gold mining is a competition with nature. As a miner becomes more comfortable with this, his chances of success should improve.

So, in selecting the 1000-foot level, we have relied on history and the nature of the area between the Tightner Shaft and the 1064 winze farther north and the ground between the 1500-foot level and the 600-foot level. We also took into consideration the condition of the 1000-foot level and our current mine plan of operation. (A winze is a vertical opening driven downward connecting two levels in a mine.) Technically, when one is standing at the top of the 1064, the opening is called a winze. When one is standing at the bottom, the opening is a raise or rise. The 1064 winze connects the 1000-foot level with the 1500-foot level. It is one heck of a good ore pass and manway. It hasn’t been used since 1965 and will require some “dead work” in the future. As an aside, in 1995-96 we rehabilitated the 1500 foot-level. Just north of the 1064 raise we found gold in the down-dip footwall/vein contact. We ran a decline along the strike of the vein about fifty feet and recovered over $120,000. The gold continued but we chose to mine somewhere else, leaving this target for another day. One reason was the distance to the active 49 winze delayed productivity. This long abandoned but not forgotten target becomes interesting once the 1000-foot level is open.

The Company has good gold showing in more than a dozen locations underground…known or proven gold “reserves” of unknown quantity. These targets also have strong “backs”. Backs mean the height of ore available above a given working level. Available backs are another factor in selecting a new target for mining. We do not choose targets that require months of preparation that do not have big upside gold potential. Our mine has yielded many 5,000 and 10,000-ounce pockets in a short span of mining. It also has the largest single pocket reported in California, which is one of our stated goals to beat. The area we chose should give up several 5,000 to 10,000-ounce pockets and has the potential to beat the record. It must be remembered that there are over a dozen places with great reasons to mine; working capital is the single factor that will override the likelihood of gold production.

Original Sixteen to One Mine, Inc announced its plan to sink a new shaft called “Red Star”. It is north of the 1064 winze. The work we do from this moment on compliments our plan in many ways. If our expectations fall short, the infrastructure of the mine will be greatly improved. This and more revelations must wait for another day to explain.
 By Michael Miller

10/28/2006  10:29AM

Today, tomorrow and in mid November I will be presenting the Company to individuals that have expressed an interest in our operation. We will examine the gold and the variety of specimens on hand. We will discuss the marketing program with facts and specifics based on twenty years of actual results. I will show each one the scope of our real estate holdings and explain how the vein cuts through the property (owned outright). Then we will go into the mine. At this point the discussion becomes intimate. Once a person experiences the Sixteen to One vein and the scope of past production only one question should remain, that is, if the person actually has the money to invest and the mentality to evaluate risk/reward.

That question is can we find gold? Can we profitably mine the gold? Do the workforce and I possess the wherewithal to make it happen. I realize that these are three questions; however, they all revolve around the same theme. What will the future bring to the Sixteen to One?

I know the answers to all four questions. That is why I’m still here.

Today’s guests are scheduled to arrive at 10:30am. Gotta go.
 By bluejay

10/26/2006  11:39AM

Mike

Thank you for detailing this great news. The excitement of increased gold production and the excellent probability of more gold being mined is great news for everyone.

You, Ian and the crew deserve our thanks for your skill in locating the gold and for all of your persistent hard work in extracting it.
 By smithsgold

10/26/2006  12:11AM

Thanks for the update!!!!
 By Michael Miller

10/25/2006  2:45PM

The bulk of our underground work is in the same block of ground below the 800 foot level just south of the Tightner Shaft. A small area remains to be mined above the last pocket (about $250,000). We will take it out when we abandon the stope for safety reasons. The other active heading in the same area shows gold in six places along the strike of the quartz. Total length of showing is eight feet (we like this). There is sixty feet of vein above the gold showings. If the gold wires up, we may have another $250,000 or more. If not, we may waste four to six weeks of our payroll.

As specimen quality gold, this yet-to-be mined block of ground is unique and quite beautiful. The gold found and sacked so far has a crystalline sheen but has not developed as crystalline. The quartz is brilliantly white, but the special uniqueness is the appearance of bright green mariposite.

A third heading is ready to go: air and water lines installed, ground supported and equipment in place. Ian and I selected a new target north of the Tightner Shaft. It looks like a six to eight weeks with one crew to get it ready. To make it an efficient operation, we must upgrade transportation equipment for ore and waste rock. Once access and haulage is in place, the newly opened area will support at least three headings with a life expectancy of one year. We like this area and are pleased that our resources will allow us to develop it.
 By bluejay

10/23/2006  8:55PM

Any updates on the recent discovery?
 By Phil

10/09/2006  2:07PM

Way to go Guys!!
 By Michael Miller

10/08/2006  10:19AM

“Virgin gold like truth lies at the bottom.” J. Miller, 1873.

Smiles were on the faces of everyone working at the mine last Friday. We expect gold every day where we have been drilling and blasting into the quartz near the 1000-foot level. It has been crumbs, teasers, and too many affirmative reasons to say, “deep enough”. Dollar wise this development was not paying the overhead, yet we stayed with it. Well, the crew was surprised after the last round when they entered the stope…..gold glistened in the beams of their mine lights. Estimated value is $200,000. The reason it was a surprise was the ‘big dog’ metal detector had not alerted the crew. The estimate value is based on $600 spot, but some of the quartz will work for the jewelers and bring a premium.

People ask me or wonder why we do it. Why do your miners, you or your supporters keep going underground. I know why, and it has a lot to do with the Sixteen to One history. But another man I admire said it best. Author John McPhee in his book ‘Encounters with the Archdruid’ copyright 1971, wrote,

“Once, in the Black Hills, Park (Charles Park) had taken me with him into the deepest mine in the Western Hemisphere. The descent took one hour-first in a wire cage down a shaft almost a mile deep, then a level mile or so on a narrow-gauge railway, then on down in another cage, until we were six thousand eight hundred feet beneath the earth’s surface. Heat increases in that area about two degrees for every three hundred feet you go down into the earth. The rock down there was a hundred and twenty degrees Fahrenheit, but the temperature in the tunnels we walked through had been brought down into the nineties by air pumped from the surface in long cloth tubes. The tunnels are known as drifts. Wearing coveralls, rubber boots, lamps, hard hats and shatterproof glasses, we followed one drift to its end-to the deepest and remotest working face in the mine. Park hit away with his pick. Sparks came off the wall, and so did pieces of rock, basically dark gray with shining seams of pyrite and nodular insets of white quartz. I still have the pieces of rock that he knocked off that wall, and I have often shown them to people-particularly to children-and asked them what they thought they were looking at. What is in that rock? Why would men dig a hole that deep? What would make them go six thousand eight hundred feet underground? What could they possibly be seeking? The answer seldom comes quickly, perhaps the rock is truly prosaic. “Iron?” they say. “Copper?” “Silver?” No. Keep going. It is the sum and symbol of why we mine anything, the base substance of the economics of nations, the malleable, ductile, most saint-seducing mineral in the crust of the earth. Something happens in their eyes when at last they say, Gold.”
 By Michael Miller

03/30/2006  12:40PM

Dear Forum Followers,

I spent the morning underground with Ian at the area we have named the Magic Line. It is just south of the Tightner Shaft and up dip from the 1000-foot level. In years past miners have pondered this unknown section of vein.. Prior to the modern gold rush beginning in 1975, miners, geologists and students of the Alleghany Mining questioned its potential for gold. Very large concentrations of gold were mined above, below and adjacent to the Magic Line. Maps and reports could lead one to believe that a zone of no gold is present; however, what we have seen over the past weeks raises some doubts that the area is barren. Because it is Alleghany and because it is the Sixteen to One vein definite conclusions about working or abandoning a specific area are always haunting.

As reported in other Forum topics, the crew has been in gold. Whether is will turn into an hundred ounce pocket or a thousand or more ounce pocket remains to be seen. I sat in a raise with gold and signals up dip on the left side for thirty feet and at the top of the raise and on the right side as well. You cannot be in a more positive situation for speculation. A serpentine pinch is down dip, mariposite is prevalent, the familiar banding structure is present, the gold can be seen passing into two distinct lenses and the vein itself has the width to make it interesting. We decided today to advance by shooting the footwall and avoid drilling the quartz if possible. If we must, we will drill and load the drill holes in the quartz lightly. Orders to the miners: Do not blow up the quartz. Take all the time necessary to remove in large and unfractured pieces.

There are five miners working in Alleghany. We are looking for more to hire, carefully looking. MSHA conducted its quarterly inspection on Tuesday. As a result, the crew was not working in the Magic Line. An area of concern for the inspectors was a short portion of the second exit. While Ian felt that the situation posed no threat to the safety of the miners, he decided to go with the inspectors’ opinion and replace some wood supports. The crew should finish today and get back to the Magic Line tomorrow. We expect gold to trickle in. If we hit a bunch, I will let you know once it is safely sacked and in the vault.

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