Purchase of Company Stock When the Original Sixteen to One Mine, inc. bought out the interests of its leaseholder, Royal Gold, Inc. in 1991, a part of the purchase price was the issuance of 50,000 shares of our stock, which the Company could have been required to purchase for $100,000. On May 31, 1993, we purchased this block of stock for $72,000 ($1.45 per share). By retiring this stock to [...]
Because the new method of gold production allows us to locate gold deposits before we drill and blast, it entails far less expense than traditional modes of gold production and recovery. As a result, we showed a profit of $441,591 in 1992 We also retired a $43,000 tax bill assumed from a former lessee; re-hired laid off crews; bought a computer program to track gold finds along the vein and [...]
I anticipate that Royal Gold will notify the company that it intends to terminate its mining permit with the company. While this will cause an interruption in our income, it presents the company the opportunity to develop and implement a mine plan on our entire holdings. The company intends to purchase equipment from KCJV that is vital to the operation of the mine and has determined that it is in [...]
1500 LEVEL — CLEAR AT LAST The 1500 level, gateway to the Red Star, has been blocked by debris and muck since 1965 when the mine was shut down. Clearing it has been one of our main priorities. That task is now complete, utilities are installed, and we will be working in the Red Star for the next three months. Back in the 1960's the Red Star was the hot [...]
The year closed well, with what started as a fluke last January - gold location by handheld metal detectors - sustaining profitable gold production through 1992. The hot spot on the 1700level mentioned Newsletter No. 24 contributed to a great November and a more than respectable though holiday shortened December, 920 and 400 ounces respectively. As a consequence, our predictions of a profitable fourth quarter and year have proven accurate, [...]
A big gold find at the mine could have an impact on the price of our stock, for three reasons: 1) an increase in the company's immediate profitability; 20 the possibility that we've discovered a new ore zone; and 3) increased credibility for the company in the investment community. So I've generally chosen to err on the side of caution, telling you a lot. The obvious downside to this choice [...]
Promising Discovery of Gold on 1500 level Work in the mine has been proceeding according to plan, with most of our efforts concentrated on removing and milling ore from the 2200 level and renovating the 1500 level. We are the first ones to explore the 1500 level north of the Tightner Shaft since 1965, when flood damage blocked the level. On October 8, 1992, just as we cleared the major [...]
Dear Shareholders: The second quarter financial statement shows six month revenues of $1,009,699 and profits of $554,748, computing to a per share profit of $.16 per share, an increase of $.01 over the first quarter. This is the first time in over thirty years that the Sixteen to One has enjoyed two profitable quarters in row. If you would like a full copy of our quarterly SEC filing (10-Q), including [...]
The annual meeting attracted the highest percentage of shareholder proxy response and attendance in the company's history. The board of directors presented in Newsletter No 20 was confirmed and Johan Raadsma, our mine manager since 1984, became the Company Vice President. We are looking forward to working together on the challenges and opportunities before us, some of which are outlined here. Option Agreement In late May, the Company negotiated an [...]
Our good fortune continues. The metal detectors are still leading us to gold, and April's production was 540 ounces. Production will fall in June when the crew moves out of the mine to prepare our newly acquired mill for operation. Once the mill is running, however, production will go back up, as we have already located over 2,000 tons of ore underground that we expect to yield approximately 500 ounces [...]
As of December 31, 1991, the Company's liquidity was significantly impaired; however, subsequent to year-end, major events have occurred that substantially improved the liquidity of the Company. What changed our status so dramatically? The best of all possible news for a gold mine - a gold strike that began on January 14, 1992, and shows no signs of ending in the near future. On January 14, 1992, in an unusual [...]
More good news! When I last wrote on February 5, 1992, the Company had just begun finding gold using metal detectors underground. Well, I thought another letter was in order because the crew continues to pull out gold, and these events may be considered to be "material." We are now two months into the metal detector program, and results have been excellent. We have recovered over 1300 ounces of gold, [...]
Good news! Just as the company ran out of money, we stumbled upon a new method of locating gold that is producing a mini "gold strike" at the Sixteen to One. The new method, proposed to us by Ian Haley, former underground foreman, and his partner, Randy Yager, uses a metal detector not unlike the ones you've seen at beaches and parks. Although most American mines do not use metal [...]
The following income statement for the last quarter represents the first time period in which no royalties were received by the company. Now that our properties are consolidated and we no longer have lessees, gold production will be our main source of revenue. High-grade gold production and ore mined and transported to the mill during the third quarter are not included as revenue. We estimate 150ounces of gold production or [...]
Due to the lack of understanding of our specific industry, it seems appropriate to summarize both subtle and obvious characteristics of what we are, what we represent, and what we want to become. Our industry is underground high-grade gold mining. It is the way gold was brought to the market place for hundreds of years prior to the exploitation of low-grade, open pit mining. Gold and gold mining appears to [...]
Seventy-five shareholders, guests and employees attended the annual meeting in Alleghany last Saturday. Proxies submitted totaled 1,659,879. Directors Charles I. brown, Willard P. Fuller, Jr., Michael M. Miller and Richard C. Sorlien were re-elected to serve the 1991-92 year. They in turn were authorized to appoint a fifth director. What is happening in Alleghany? On June 3, 1991, the company completed the Mine Termination and Asset purchase Agreement with Kanaka [...]
The company is currently operating within the budget dictated by its income from minimum royalties (see page 2). Minimum payments will increase to $45,000 per quarter in 1991. Other than corporate maintenance, my primary objective is to locate investors, so we can begin Phase Two of the Red Star/Osceola project. New Public Relations Program Later in this letter you will find two news releases. Bob Richelson, a retired public relations [...]
Special guests at our Annual Shareholders meeting in June included Tom Perry-Smith (Perry-Smith & Company CPA and newly elected auditor) and John Scully (Pacific Stock Exchange specialist for our OAU listing). All of us had the opportunity to discuss corporate affairs with Tom and John. Charles I. Brown, Willard P. Fuller, Jr., Michael Meister Miller, Richard Clarke Sorlien and Brian R. Van Camp were re-elected by shareholders to serve as [...]
The Sixteen to One vein system is legendary among high-grade gold mines. New ore zones continue to produce the spectacular quartz and gold specimens found in museums from Washington D.C. to Los Angeles. Our company, which has one of the most sensational mines in the world is slowly moving away from its past isolation. It remains hidden to many people and will remain so to those people seeking simple answers [...]
I wrote this 10-Q as a factual and non-opinionated filing. It is a public document designed for shareholders and non-shareholders alike. This letter is private because it contains my opinions. In consort, together we must draw conclusions, opinions, and conceptions regarding our company. The Company awoke from a twenty-year hiatus in 1974. Competent old men had protected its assets during a gloomy time for gold profits. Mining activity began shortly [...]
The enclosed document is our first quarterly report required under the Security Exchange Act of 1934. It is called a Form 10-Q, and you will be receiving three per year plus an Annual Report. We will make every attempt to follow the federal guidelines and make the report as clear and easy to understand as possible. You and I have probably received 10Q reports that are next to impossible to [...]
Basically the work undertaken, with funds from a Private Placement Memorandum (PPM) cleared the way for mining. We never anticipated producing gold during this phase. I anticipate mining, processing, and selling gold this year. During the rehabilitation of the Osceola tunnel, the crew encountered more cave-ins and of greater size than anticipated. Our expectations as to the condition of the underground workings were based upon old records and testimony from [...]
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 [...]
Significant events during 1987 were: 1. Successful completion of Private Placement financing. September 1987. 2. Acquisition of lease of Osceola Mine. July 1987. 3. Royal Gold, Inc. replaces Transwestern Mining as operator of Kanaka Creek Joint Venture (company lessee). June 1987. Rehabilitation of the tunnel to the Red Star Mine continues to advance. With less than 200 feet remaining to the cross cut tunnel leading to the Red Star Winze, [...]
A major obstacle facing management has been inadequate working capital to purchase the equipment and man power required to access workings where the last gold was mined by the Company (1965). A financial plan, outlines in a Private Placement Memorandum (PPM), was prepared one year ago. It was circulated in California, Pennsylvania, and Connecticut. The PPM closed on October 9, 1987. It generated $430,000 of working capital. The majority of [...]
What does this mean for our Company? Perhaps at long last we can implement the two courses of action needed to exploit the latent potential of our holdings: attracting working capital and establishing a liquid marketplace for our stock. It is crucial for our company to attract money to expand our exploration and development programs. This need is significantly different from companies who seek money to retire debt or just [...]
The Red Star Mine has been one of the most elusive gold targets in the Alleghany Mining District. The Red Star Mine lies in the central portion of the claims held by the Company in the Alleghany Mining District. This property was previously owned by the Tightner Mining Company and was merged into Original Sixteen to One Mine, Incorporated on August 30, 1977. The Red Star vein was discovered by [...]
Like the company itself, you are a unique body of people. Most of you know something about the company, but your common concern has been the lack of information you were receiving from management. We changed that policy in May 1983, with our first shareholders' newsletter. It was obvious that all of us needed a fundamental report in order to commence separating fact from fiction in evaluating our individual holdings. [...]
Thank you for your help.
Granting rights and performance conditions in the sequences of leases beginning in 1974, have been strengthened and clarified. Minimum dollar payments have changed from a single annual payment in December of $25,000 to quarterly payments totaling $60,000 per year. In 1986, minimum annual payments shall be increased to $120,000 with an additional increase to $180,000 in 1991. We established a gold clause if the lease is to be extended beyond [...]