Good News From Alleghany
- MSHA lifts its closure order on January 17, 2000. Eight days later miners locate and produce a small but significant concentration of gold.
- February 22, 2000 - Company ships dore bars to refinery for first time in five months. Total gold production for first quarter ending March 31, 2000 was 686.71 fine troy ounces.
- The 10-KSB is timely filed with the SEC
- New metal detector proves reliable at locating gold up to four feet into the quartz.
- Jewelry sales at record pace. Inventory is increasing.
- March issue of National Geographic magazine includes Sixteen to One information and picture of the Whopper in a story entitled "Hard Rock Legacy".
Be prepared for an ongoing stream of important positive events in the months ahead. We are back mining gold, breaking rock in areas with great potential, shipping bars to the smelter and cutting gold laced quartz for sales into an expanding jewelry market.
The dark clouds of uncertainty that hovered over our mine are clearly gone. We survived, which should not surprise many of you. There are twelve employees at the mine, two in the gold shop, two in the administrative office and me.
Jack Wagner wrote a book, Gold Mines of California. In 1980 the preface states, "It was the Sixteen to One mine that led to my undertaking this project in the first place. It all began when I read a short article hidden away on the financial page of a San Francisco newspaper, reporting the demise of California's last producing gold mine. While I had known for years that profitable gold mines were few and far between I had no idea of how many or how few still existed in California. It became apparent to me that this was truly the end of an era in our time and I determined to set some of it down on paper before it became lost entirely. Since the Sixteen to One was the "last operating quartz mine," it also seemed appropriate that it should be the final chapter in the book, which means that I wrote the last first." The Chapter entitled The Original Sixteen To One Mine begins, "A good story, like gold, is where you find it and this one began in the classified section of the San Francisco newspapers in June 1965 with an ad which read:
'To be sold. 25 beautiful irreplaceable quartz and gold specimens suitable for museum or private display.'
A simple ad, but behind it ran a pathetic story of the decline in the fortunes of one of California's most famous gold mines, the "Original Sixteen To One Mine" of Alleghany. It is a story so typical of the plight of the California gold mining industry that it could be used as a textbook example. Faced with increasing operating costs the owners decided to sacrifice the collection of choice showpiece nuggets saved from fifty years of mining."
The collection was purchased by William Ghidotti of Nevada City and is now on display at our bank. Interestingly in 1965, the collection generated 400% more money than if it were crushed and sold as bullion. Why is this relevant today?
As we worked through the last year of mining operations and financial uncertainties, the option of selling our unique inventory persisted. Our current inventory of gold contains some fine specimens from the mine. It also consists of priceless quartz and gold carvings. These are recorded on our financial statements at the spot price of gold, well below their value. It would be a public loss if the collection were broken up and sold separately or if it were crushed into dollars.
With this in mind the Underground Gold Miners of California Foundation has proposed to purchase up to $500,000 of our inventory. The foundation will display the exhibit in Alleghany and schedule a traveling display throughout the country. This is a most worthwhile project. The foundation president, David Scinto, (530-477-6468) is interested in talking with shareholders or others regarding ideas or bequeaths for preserving these irreplaceable specimens. The foundation is a California Non-Profit 501(C) (3) Corporation.
This year's annual shareholder meeting is June 17th at 10:00 am. The report and proxies are at the printers and should be in the mail by mid-May. We are doing the best we can with available time and money to keep you informed. We plan to begin sending e-mail reports within the next few months. The annual meeting information will have a space for you to fill in your e-mail address. Shareholders have suggested other Internet related areas such as a shareholder bulletin board.
The crew and directors assure you that our movement and momentum are in the right direction. The goal is sustainable profits. Momentum by definition is the power of a body of overcoming resistance by virtue of its motion. Mr. Newton announced his First Law of Motion as a body at rest will remain at rest or if in motion it will move uniformly in a straight line until acted upon by some force. I predict more significant and material good news throughout the next six months. Obstacles and interference opposing our prosperity are inevitable. Newton's Third Law also seems appropriate that the state of a body (OAU) will offer resistance equal and directly opposed to the force (if hostile) influencing the change.
I hope you enjoy the enclosed copy of the April/May Miner's News. It sums up our affairs and seems appropriate for you to review another's perspective.