Our three major mining activities are:
1. Replacing the pumps. We currently use 185 horse power to keep the mine open to the 2200 foot level. The discharge lines are in the 49 winze. New efficient pumps using less electricity are being installed in the Tightner Shaft. PG&E (our electricity provider) expenses have become excessive. We anticipate at least a $1,000 per month savings.
2. Realign the main haulage on the 800 foot level above the Ballroom. This project will cut the travel time for day-lighting ore and waste for many years as we concentrate on mining to the north. This work also is in the most productive area of the mine. Our miners have hit a dozen small (less than 100 ounces) pockets of gold during renovation and will continue mining the area in search of gold.
3. Mining north of the Tightner shaft. This is a vast unexplored section of the Sixteen to One vein. It was lightly explored in the early 1900’s. The vein is thick and the geologic setting is hazy. Free gold has been mapped in three areas. The presence of gold in our mine is the strongest indicator for more gold. Therefore, one crew of miners is working in this area.
Financially, the company remains in a critical cash flow position. A secured line of credit for $400,000 is in place, which offers me flexibility in adjusting assets. Gold production, however, is the means to improve our tenuous cash situation.
As owners of this company, you expect its management to handle the daily challenges of operating the mine. Management’s responsibility is also to plan and implement long term company goals. With the latter in mind the Board of Directors ratified a motion to amend the articles of incorporation to increase the authorized shares from ten million to thirty million. For each share outstanding (4,248,682) an additional two shares will be issued to each of you. The file and notification date is today, September 4, 2001. The record date is September 14, 2001. Those who own shares on this date are entitled to two additional shares for each share owned. The mail date and payable date is October 12, 2001.
There are a couple of downside risks to this business move. The company may be de-listed by the Pacific Exchange, if the share price remains below one dollar. You have the power to eliminate this risk. Do not sell shares for less than $1.00. Add to your shares, if prices remain under $1.00. Inform others about our company, so they can evaluate its present and future worth.
Stock brokers and financial institutional investors shy way from stocks costing less than $5.00. To my knowledge none or only a few shares are in the hands of institutional investors. This has been our history for the ninety years of our corporate existence and unlikely to change no matter what the price. The greatest discouragement for institutional investors that I have seen is the fact that the Sixteen to One Mine is a gold mine without proven reserves. Until institutional investors take the time to evaluate a mine without reserves, it is doubtful they will feel secure with ownership in our company.
A variety of reasons support this amendment to our articles of incorporation. The gold industry is very different today than it was a decade ago; so is Original Sixteen to One Mine, Inc. There are fewer public companies mining gold today. The survivors have grown in size by mergers and acquisitions. Most public companies mining in the United States are now foreign corporations. My visions for our company include filling the voids that now exist. Just as the acquisition of the Plumbago Mine in 1999 was beneficial to us and the former owners, selecting other good properties that the “big boys” no longer want could prove beneficial.
Increasing the authorized and issued shares allows us to grow into a fresh and competitive mining company for the twenty first century. It requires a market capitalization that more closely resembles the intrinsic value of our assets. It also requires market liquidity. These are goals, visions or dreams I see ahead. Our fundamental corporate structure is one tool for implementing the above.
In one Director’s words, “You can’t expect to see your ships come back, if you don’t send them out.”