Much has happened since I last wrote to you in May of this year with the 1995 Annual Report. There's a lot to tell, so I'll start right in.
The incumbent board of directors was re-elelcted in June. The employee stock incentive plan was also ratified. The purpose of the plan is to attract and retain the best possible personnel and to provide additional incentive to promote the success of the company. Eighteen employees received options for 89,000 shares for a term of ten years. The shareholder meeting inspried 300 people to come up to Alleghany for the underground tour, gold display, picnic, and opportunity to meet the directors and employees. Next year we plan to open up the Rainbow Mine and the historic buildings for your inspection. Consider joining us!
We have just filed our 10Q for the third quarter, available to you for the asking. We posted a $.02 per share loss this quarter. All of you who have been with us for a while know the process of finding gold at the Sixteen to One is a roller coaster ride. I remain upbeat about our future, as during the past four years a significant percentage of annual production has been mined during a short period of time each year. For example, in 1993, we mined over $1 million in a single day. During 1995 we mined over $2 million in ten days. Accordingly, quarterly comparisons are a difficult tool to use in analyzing the company. I look forward to our next big strike. As of September 30, 1996, we held $1,328,058 worth of gold in inventory. I expect our liquidity needs in the near term to be met from the sales oexcisting inventory and the production of gold.
On October, 3 1996, we hosted a technological summit for selected experts who believe we can locate and mine gold more efficicently using their emerging technologies. Participants included Dr. Sandor Holly, and MIT and Harvard trained physicist adn early developer of IBM laser research, now working on electromagnetic imaging; Jeffrey Oicles, director of Power Spectra, a Silicon Valley company now turning its attention to ground penetrating radar; Dr. Larry Stolarczyk, of Raton Technology Research, Raton ,New Mexico, who pioneered the development of subsurface radio waves for high resolution mapping of ore bodies in coal mining and is currently working on electromagnetic imaging techniques for detecting gold in quartz; and Curtis M. Romander, research engineer at Poutler Laboratory, of a division of SRI International, Menlo Park, California, who contributed the latest information on SRI's patented low density explosives, of interest to us because they appear to produce specimens more suitable to jewey and specimen sales than our current methods. Enthusiasm was high as Dr. Holly spoke of ``the beginning of revolutionizing underground gold mining" and Mr. Oicles of a ``significant promise for a quantum leap in gold detection and mine mapping." As announced in the Annual Report, we have been designated a beta testing site by the participants in the summit. The companies get the use of our mine, a proven gold producer, as a field laboratory, and we benefit from the free use of the most innovative gold location technology in existence. We retain, of course, full rights to any gold found using these emerging technologies. To date, only Mr. Stolarczyk has performed experiments in the mine, and these did not increase the scope of the equipment we currently use. All perticipants have experiments planned over the coming year.
Another important development underground is our increasing ability to detect gold deeper in the quartz. When we first started into the rock. After refining gold at 26 inches or so, and recently hit a 32 inch deep signal yeilding approxiamately 400 ounces in a day. That find, detected by Ray Standring, a Sixteen to One miner working his first day with a metal detector, represents our deepest penetration so far. One of the pieces from the find ( the ``Ray Rock") has an unusually beautiful configuration of quartz crystals mixed with the gold, and has been designated as part of the permanent Sixteen to One specimen collection, partly for its beauty and partly to memorialize our ability to find gold at the new level and the good luck of a motivated employee. With the use of developing technologies, we hope to bring our penetration abily deeper and deeper. We see this advancing ability as a key contributor to our continued success in increasing production. After the Sixteen to One's hundred yeaars of production, it's amazing that we have been able to find so much gold left near the surface of the old workings. It's fairly safe to say now that the ``pickup" gold is gone, and we look forward to going back throught that original workings with our expanded ability to locate gold. One of the company's hidden assets is physical familiarity with the geological patterns of gold in the Sixteen to One deposit based on our sixty year's store of excellent maps and production reports. We still have large, undeveloped blocks of ground in the pathway of the gold solutions. As we develop the capability to see deep inside, the potential for gold hidden in the quartz is still very great.
When we bought the mill in 1991, we did not run it much and did not change the system originally used by our lessee. It has remained idle since the fire in 1994. As the tons of mill ore grew on the landing above the plat it seemed like a good idea to systematically test each component of the mill flow sheet. Installing a new recovery system on a trial basis confirmed our suspicions that the old system was not as efficient as it could be. We are now spending $65,000 to install a Knelson concentrator that should pay for itself in savings of gold recovery over the old system in about four months. We estimate that we have 1000 ounces of gold to be processed in 4000 tons of available mill rock.
The Sixteen to One's combination of venerable history, beautiful gold, and innovative technology continues to attract media attention. The Sci-Fi channel has told us it will air footage of some of the experiments performed at the Technology Summit nationally on a show called ``The New Edge," on December 22, 1996. Fox 40 in Sacramento did a story on the mine on November 8, 1996. We expect to get as much as five to ten minutes of coverage as part of an A&E four part series called California Dreamers that will be shown in early 1997, using footage shot here on August 4th and 5th 1996. Finally, CBS is doing a story on the Alleghany Mining Musuem, which gives underground tours of the mine. We have not been told when it will air, so keep your eyes open.
Christmas Shopping in the Nineties
As most of you know, the Sixteen to One has its own website (www.origsix.com). We are currently reworking the site to allow visitors to view high quality pictures of our specimens and jewelry and buy them right on the Web. The site will also provide information in three other catagories: current mining activities, financial and stock data, and history. As most of you probably do not know, 1996 marks the hundredth year since the Sixteen to One claim was located in 1896. To commemorate our anniversary, we have designed special quarter ounce, half ounce, and one ounce mine bars memorializing the occasion. These bars are poured with our gold and come with or without a nacklace bale. If you prefer to do your Christmas shopping by phone, call Dayna at 530-287-3540, for a direct line to our growing Gold Sales department.
My next letter to you will not be so long coming, I promise. Best wishes from all of us at the Sixteen to One for the holidays