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Risk Management Strategies

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 By Michael Miller

09/27/2017  1:42PM

New mining regulations in Tanzania have put gold companies under pressure and slowed investment in the country. This behavior is more than a trend. It is classic!

Tanzania’s reforms were introduced in July, and among other things, they allow the government to renegotiate or revoke existing mining and energy contracts. They also give the state the right to own at least a 16-percent interest in mining projects, and increase royalties from 4 to 6 percent.

“Minerals may not be mobile but the capital that funds the mines is,” said Ben Gargett, head of PwC’s Australia-Africa practice. “Investors are saying, ‘On our risk radar, Tanzania has just gone a lot further down on the list.’”

Why is this relevant to Sixteen to One? When gold resource capital be it investment, speculation or just a fun gamble looks for a safe harbor, Sixteen to One is the light house on solid rock.
 By Michael Miller

01/12/2017  12:48AM

How about the mine?

During the 1980’s and 90’s a fundamental yet unique corporate policy was established by a world class board of directors: Charles Irving Brown, Leland H. Erdahl, Willard P. Fuller, Sandor Holly, Scott K. Robertson Richard Clarke Sorlien, Brian R. Van Camp. It remains today. The mine and mining its bountiful gold is our greatest responsibility to guide management and lead our Company to prosperity. So, what’s going on in the mine?

We are working three active headings. All headings are north of Tightner Shaft: Compromise Raise area above the 800 level; 1076 stope (far north) twenty feet above the 1000 level; 1500 level south of the 1064 winze. All three have produced gold for us. The 1500 level now holds the greatest potential as we blasted the face last Thursday for the first time, producing a small amount of gold. The signals leading to this target are not in an old stope or pillar. It is a significant block of virgin quartz about 300 feet wide and continuing 300 or more feet up dip. Handling the muck is not an issue. Traveling to the heading is the greatest obstacle both for the miners and supplies. Unless the geology (or detectors) tells something different, the crew will mine this quartz the old fashion way: run a raise and wing off in two directions. Three miners work this heading.

Gold is presence in the shot ore on the ground in the 1076 stope. We have been here off and on for five months. Three miners work this heading, running detectors to locate and sack gold. Some jewelry chunks are in the pile, but most rock will continue to be ore for the high-grade mill (six to 12 ounces per ton).

The crew continues to dewater the lower workings. The next milestone will be walking on the 1700 level. We are surprised how good the 25 horse power pump is moving the water. At some point is will just quit the lift. Three choices face us but one must be taken to continue lowering the water: add another pump to the 49 winze, move the pumping systems (plus another pump) to the Tightner Shaft or to the present location. This is an ambitious plan!

We made a significant investment in two heading currently on hold: the ZERO Level and the Compromise Raise area. They are on hold for conservation of capital to hire more miners. This is a tough call for me and could be too conservative (cautious). I’m sleeping on this decision every day. I will feel more comfortable adding miners after completing the 1076 stope and working the 1500 level for a month or so. Maybe the gold inventory will increase enough to make it an easy decision.

Maintenance is ongoing. The track always needs attention, ground support is checked regularly and our phone lines and utilities need ongoing attention. The current MSHA inspector is a real pain and has caused us unnecessary work to satisfy his opinions of safety. He has never been a miner in an underground mine, something now ongoing with MSHA inspectors.

I’m working with Hans, a German gold admirer, to develop a European jewelry market for quartz/gold. Our bank has about $75,000 of slab available for export. Hans has created a style of jewelry that has a new look for the world.

The financial goal is: no more debt and eliminate our existing debt. Sure, I want to mine our way to reach this goal; however if the right people learn that one of the greatest gold mines in the world wants to expand, we will work out a deal to make it happen. Our finances improved recently but it is still under pressure. I will explore ways to become debt free and sassy.

My gold mining business sense leads me to a belief that the future for a gold producing company (us) is getting more promising. I will always remember what Lee Erdahl told me when asked about the price of gold. His answer was, “Well, one thing I’m sure of is it will either go up or go down.” Thanks, Lee. Spot price is an external. Our internal picture is improving weekly.

This report is for all of you who continue reading the FORUM. Stick along for the ride in 2017. I am.
MMM
December, 2016
 By Michael Miller

06/30/2016  9:46PM

Yesterday I was told about the labor issue at Hecla. Seems that the Company proposed reducing some benefits. The union took issue with this. I asked about the job/employment situation and was told that miners worth a lick had jobs, good jobs. The unemployed “miners“, well their story can be told around any mining camp.

Don’t know the workers compensation tax in Idaho, Montana or Nevada but in California the base rate is $84.65 for each $100 in wages. A problem in California is the small number on underground miners working. A primary reason why there are so few underground miners is the high cost of workers comp. Are we chasing our tails? California has the most proven gold deposit with the fewest underground miners working to get the stuff into circulation. The time for change is now.

I’ll look for more news about a labor strike and post it unless someone else has fresh news.

...

 

  
 
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