July 24, 2017 
 Monday 
 
 

04/18/1997
Newsletter # 37 - April 1997

"The primary reason for the drop in revenue was that the results for 1995 had been augmented by a material discovery in August 1995 at which time $2,000,000 worth of gold was mined in a ten day period."

-Original Sixteen to One Mine, Inc. Form 10-KSB filed March 31, 1997

 

Dear Shareholders,

 

Before I summarize the 1996 audited financials, a year where the company reported its first net loss in five years, you should learn about the April fool's day gold fine and place its significance in perspective.

 

The December 3, 1996 newsletter (Number #35) included an underground mine map with designated mining targets. The map identifies the virgin and recently developed large block of ground above the 2600 foot level. Years ago we selected this area to develop because we believed the gold channeled through the quartz as it ascended to the proven concentrations found in the mine. The investment took years and a lot of money to create the opportunity to "go mining" in a fresh location.

 

We hit gold in five spots as we drifted the 2600 foot level south. This raised our confidence. This event could be seen as insignificant, significant but not material or significant and material by different people. I felt it was significant and report it to you in prior letters.

 

On April 1, 1997, we mined 300 ounces of gold from the 26-105K vein wing. It was previously identified as a primary heading because we chose this heading to mine the gold identified some 400 feet above. (If this gets too laborious for you to follow, put it aside but reread this, please. Our company is complex to operate but simple to understand. We are no longer considered a traditional gold mining company and there are few if any publicly listed companies as we. Therefore, the simplicity of evaluating the future of mining the Sixteen to One vein is easily misunderstood.)

 

On April 3, 1997, we mined 100 ounces in the same area. We now had identified gold in three headings, sacked over 400 ounces of high-grade and recognized a pattern of distribution that brought smiles to the faces of the miners. We began to smell the big strike that alluded us throughout 1996. Was this significant? Is it material? And, what are the company's obligations to disclose the recent progress.

 

If communications in the business world were uncomplicated, I would have put a short blurb on the business wire and followed with a shareholder letter like this. Some people who casually review small gold stocks would likely find the announcement that we mined 400 ounces a joke. Few if any would dig deep enough to understand the significance of this confirmation that material amounts of gold is now proven to exist between our 2600 foot level and above.

 

The safest course was to report nothing. After all, we are a high grade gold mine and finding 300 or more ounces of gold is to be expected. However, without sharing this information with you and the non-shareholder public, could be construed as concealing information.

 

Here is my conclusion and what I offer to you. You are encouraged to pursue your own.

 

Facts:

 

{bullet}The area between the 2600 foot level and 2200 foot level has produced significant amounts of high-grade gold.

 

{bullet}It is a vast untapped section of veins in the central section of the mine.

 

{bullet}It is the company's primary area of interest with ten miners working at least three headings every day and supporting this target.

 

{bullet}Similar areas have ielded concentrations totaling 40,000 ounces.

 

Conclusion:

 

Mining the Sixteen to One vein system requires a higher degree of consciousness than is pursued in other gold mines. Not to diminish the truly amazing ability to extract millions of ounces of gold throughout the world from "no see um" ore, the investment community has locked itself into an industry, the low grade, surface, open pit operation, that has no where to go that is not predictable or mercurial. Mining and geological information to the investor must be depended upon as being highly trust worthy and reliable.

 

Mining is a technical yet practical profession. As a proper precaution facts rather than theories should be made the guiding star - results rather than conclusions should be submitted as evidence. Each mineral locality presents certain characteristics peculiar to itself.

 

The Sixteen to One vein system cannot be quantified by formulas as an open pit mine. But since the mine embraces a large acreage and shows good indications of extending longitudinally and continuing to great depths, the factors of prospective valuation are certainly worthy of grave consideration.

 

At any time and with very short notice the miners currently can enter a high-grade pocket within this identified proven ore zone.

 

Financial Comparison of 1996 with 1995

 

The company's revenues decreased 46% from 1995 to 1996. The primary reason for the drop in revenue was that the results for 1995 had been augmented by a material discovery in August 1995, at which time $2,000,000 worth of gold was mined in a ten day period. Total gold production decreased from 6,505 troy ounces in 1995 to 3,956 troy ounces in 1996. The company's compensation expenses in 1996 increase by $238,493 (30%) from the $804,368 incurred in 1995, primarily because the company's payroll expanded from 37 full time employees to 46 full time employees through the course of the year. As a result, the company's operating results decreased from a profit of $732,124 ($0.21 per share) to a loss of $654,468 ($0.19 per share). The company's current assets decreased $1,216,424 (50%) as gold was sold from inventory. Fixed assets, at cost and mining property increased $449,726. The company's current liabilities decreased $187,963 (18%). Total stockholder's equity decreased $677,481 (22%).

 

Announcing a new director

 

The company is proud to announce and it is my pleasure to introduce to you our newest addition to the board of directors. Dr. Sandor Holly was voted into a position on the board March 14, 1997. Dr. Holly has been employed by Rocketdyne since 1976 in various assignments including the design of Pulsed Wavefront Sensor, interferometric sensor systems development and multiwavelength probe laser fabrication. He is the recipient of nineteen patents and several international patents including one of the first Free Electron Laser patents issued by the U.S. Patent Office in 1960. He is active in national and international conferences in Switzerland, Hungary, Germany, Japan and Russia. He was born in Budapest, Hungary in 1933, graduating from ELTE University of Sciences in 1955. He received the following degrees: M.S. (Electrical Engineering) from MIT in 1960; S.M. (Physics) from Harvard University in 1962; Ph.D. (Applied Physics) from Harvard University in 1969; and Post Doctoral (Modern Optics) from Northeastern Unirsity in 1970. We are very happy to have him join our team.

 

Sincerely yours,

 

Michael Miller

President


 

  
 
© 2017 Original Sixteen to One Mine, Inc.
PO Box 909
Alleghany, California 95910
 

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