The summary of 1988 is treating us well. The mine crew has completely cleared all cave-ins in the Osceola tunnel. Work has begun installing track and ladders in the Red Star Winze. This Winze provides access to the Company's last gold producing area (two pounds of gold were removed the day the mine closed operation in December 1965). The Winze is positioned downward at a 60o angle, which makes for some exciting rehabilitation work. The Red Star tunnels are all open below the collar of the Winze and in hard rock. The vein is impressive. We have identified several targets for development in the near future.
South of the Red Star operation on other claims we own, Royal Gold Inc. (NASDEQ) continues its role as the operator of Kanaka Creek Joint Venture. Gold production for the first half of this year is 1,803.3 ounces. There are 46 men currently employed. The mill is running on a regular basis. Production, while erratic, seems to be increasing.
Our corporate paper work has produced a major and significant opportunity for Original Sixteen to One Mine, Inc. Last month the Pacific Stock Exchange, which is based in San Francisco, accepted our request for listing. You will remember that creating a fair market place for our shares has been a long time goal of mine. My preference has been the Pacific Stock Exchange. A specialist will handle our share transactions eliminating sometimes questionable practices of market makers.
The SEC filings will probably be cleared by October 1, 1988, at which time we will again become a fully reporting Company. Standard and Poors, a large corporate public information service, will include our corporate profile in its next publication (August 25th). Stockbrokers and investors all over the country will be able to read about our company. This is good news. This is big news for us.
Our June annual meeting produced no surprises. The re-election of the board of directors provides the Company with as high a level of management as companies many times larger than ours. The directors bring to each meeting wisdom, experience, and a keen interest in seeing our company prosper. Thanks for supporting this fine group of men.
On August 5, 1988, the board met in Nevada City to discuss financial plans for the second phase of Red Star Mine. Two concepts seemed dominant:
1. A private placement or self registration of stock geared towards existing shareholders and their contacts and friends.
2. A public offering underwritten by professional financial people.
Both have merits. The first choice creates less dilution for the Company, which is a prime consideration. To accomplish this program in a timely fashion I need your interest and help in locating friends, associates, relatives or professional business people capable of purchasing some shares. We are 350 shareholders strong. Within this membership are those of you able to assist in this important phase of our growth and development.
The involvement of financial professionals in our future has a strong appeal. Unfortunately too many professionals do not take the time to study a situation like ours. Here are some key factors for our appeal:
1. Properties currently producing gold.
2. Long history of gold production and dividends.
3. No debt, cash in the bank and an active underground mining operation in the development stage.
4. Pure gold play in well managed Company with adequate geological data to suggest several targets for near term gold production.
5. Investment oriented shareholders.
6. Pacific Stock Exchange market place approves Company for trading.
Perhaps several of you can extend an introduction to financial professionals with integrity who will assist our growth and development.
Your management is conservatively optimistic about the mining days ahead. The Red Star block of ground that we have opened for inspection may contain 6,000 to 18,000 ounces of gold. Our gold mining venture in the famous high-grade Alleghany Mining District offers its participants extraordinary upside potential. The Sixteen to One vein system has been the most consistent and longest producing vein system in western United States. Many students of the District feel its resources are less than half depleted.
Count me as one of those students.
Michael M. Miller