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GREETINGS to our new website.
The FORUM began in the late 1990’s at origsix.com. Do to its age a modern website became necessary. Here it is; however all the transaction from origsix.com during the transition are not yet available on the site. Our original website will remain. Welcome and enjoy your journey with the oldest USA gold mining corporation. Participate using either or both sites.From The Comic Journal October Issue:
“Is Dan O’Neill our age or older?” Adele said.“Older?” I said.
“Well, he’s still got all his marbles,” she said. “Or as many as he ever had.” The occasion for these remarks was our receipt of his first book in thirty years, The House Next Door (Hugh O’Neill & Assoc.). “It’s the first time I’ve understood the relationship between gold and money.”
“You understand it?”
Dan O’Neill, a director since 2002, of Original Sixteen to One Mine, Inc. brought a much appreciated “punch” to the Sixteen to One operation. He is an Hall of Fame” cartoonist. No, this gold mine is not a joke. He created comic relief with his first drawing about the underground mine, which you can find on this web site.
Call it humor, satire or honest wisdom, his first book in thirty years (limited first edition with 23 corrections now corrected) is available from LULU.com priced at $19.95. Dan just sent me the feature article yesterday in the “The Comics Journal”. Copy and click on the link below. Bob Levin wrote the article entitled “Why Does the 12-Inch Tall Piano Player Sing?” Warning: it isn’t an easy read.
Clarence Ellis, titled his regular column of Pay Dirt June 2002, issue “MSHA Doesn’t Understand that Coal, Metal Mines Different”. I am an historical mining junkie, so this sixteen year old article was easy to find today. May it interest you as well. If you haven’t read Respondent’s brief, filed July 12, go to NEWS on this website. Become aware of a sad reality: lawlessness on display by career public employees, especially lawyers. Convictions, fines, penalties, control and withholding exculpatory evidence (remember the CDAA) measured a pathway to higher positions; even for those I respect the most: judges.
The article begins, “What happened to yesterday’s MSHA? Is there anything left of the agency that was dedicated to the miner’s personal safety? When was the Mine Safety Act amended to create a force worthy of a police state? When safety enforcement is measured by its ability to raise dollars, its primary purpose has vanished. It does not appear that any of the higher-ranking Washington bureaucrats are even remotely connected to the field personnel. It also does not appear than any of the elected officials are aware of how their constituents are being treated or they would stop the daily abuse.”
Sounds familiar to today’s miners and operators! Ellis cites the mine act approved in 1969 and amended by Congress in 1977 and asks, “If the law hasn’t changed, what happened to the way enforcement has changed? What has happened to the friendly, helpful inspector who used to visit the mines?” Well, the early work force had mining backgrounds. Most retired or passed on and were replaced by those with a totally different agenda.
Today, my industry must deal with people with no mining background. It is a slippery slide towards the extinction of the small mine operator in America.
The cause pointed out in 2002, continues today. “The problem with the agency seems to start when its people begin ignoring the 1977 Act. Then they started interpreting the 30CFR regulations in highly creative ways.”
It is a lengthy article and worthwhile which is why I recalled it easily. You are directed to the FORUM Topic “YOU JUDGE***” ENTRY July 12, 2018, and NEWS same date for an important event now in progress.
Mr. Ellis closes his article: “When any inspector forgets—or ignores his trust in bringing the Mine Safety Act to the miner, he no longer is serving his purpose. Whether the inspector involved in the action just discussed acted out of ignorance or arrogance doesn’t matter. Neither is to be tolerated if the purpose of the Act is to be fulfilled.”
WILLIAM EWART GLADSTONE wrote:
“NATIONAL INJUSTICE IS THE SUREST ROAD TO NATIONAL DOWNFALL.”Governor Arnold Schwarzenegger
State Capitol Building
Sacramento CA 95814May 8, 2009
Dear Governor Schwarzenegger,
Credibility is an issue, not yours but perhaps our gold mine. We get blamed for a lot of things that are not true. I am President of Original Sixteen to One Mine, located about two hours northeast from Sacramento in Sierra County. The Company is the oldest gold producer in the United States, incorporated in California in 1911. I’ve had the president’s job for twenty-six years. I am looking for your attention. As a personal reference, I offer Bruce McPherson in Santa Cruz. Bruce is a childhood, family friend. You picked a good man for Secretary of State when you chose Bruce. Give him a call. We regret his loss in the last election.
Solutions are my mantra (as it is for many pre-hippy Californians). Consider implementing the following slogan with your executive branch employees: SQUARE. I remind our hard rock underground gold miners to incorporate it into their work ethic. SQUARE. S is for safety; Q is for quality of work; U is for you; A is for “accountability; R is for responsibility; E is for efficiency. Put them all together and it creates or becomes a behavioristic model for success in any workplace.
You are desperately needed right now. I humbly seek some things from you to help the gold mine, the blue-collar workers directly, our depressed rural county and the social and physical fabric of all Californians. Become a statesman during the final years of your term and forget being a political chameleon. Smother the Sacramento “pot-house politicians” (check a large dictionary for the definition) and leave all those in the Senate and Assembly behind. Leave the Judicial Branch alone as well. Until the few scrupulous lawyers raise the bar to expected levels of integrity, honesty and lawfulness, the judicial branch will continue as America’s most despicable arena of outlaws. Tell all of them to, “Become the professionals that once walked the halls of justice. Become a statesmen, like me.” This can be your legacy to Californians, a return to the elected statesman.
The SQUARE in all three State and Federal branches is gone. If you can just fix the Executive Branch, it will set an example and get business humming in California. It will bring jobs to rural California.
Gold miners have encountered many examples of inappropriate behavior from people in the agencies you control. I wish to share with you or your appointee some experiences that others and I encounter in dealing with Sacramento. Let the other public officials make the laws and administer the justices. Your Executive Branch holds the catbird position. As Governor you hold the strongest weapon. As Dirty Harry would say, “Make my day!” Please reinvent the lost art of statesmanship. We need you in the trenches with us.
If you have never travel underground in the majestic Sierra Nevada Mountain range, consider accepting my offer to take you inside Mother Earth and see her as never before. See where plate tectonics smash together and bless our continent with one of the richest gold deposits in the world. You can bring your kids. They will love the adventure.
Sincerely yours,
Michael Meister Miller, PresidentI’m writing a brief for the two citations heard last August. MSHA agents rely on history of citations issued to a mine operator to levy penalties. During this hearing the inspector admits to her careful review of past citations and used it to speculate on our negligence; however under questioning she admits that the actual situation she saw on September 21, 2016, didn’t resemble the historic situations she reviewed. She went ahead and testified that the past history elevated the negligent. Is this justified?
Our mining operation also has a history regarding MSHA performance. The federal government will not be proud to acknowledge the past of this most valuable agency. Over my life as a responsible person for the safety of our miners, MSHA has been a root cause in harming the miners. It must change, and I sense that it will as more responsibility flows from Washington DC to its agents. Below is a correspondence I found while preparing this brief.
MSHA Archive from 1997
A subtle but perhaps most serious side effect of the agency’s and its agents’ behaviors over the past thirty months can be found in the minds of our young miners. As we train and give ongoing guidance to the nuances of underground mining, they are witnessing unreasonable behavior from a powerful force or authority. It is MSHA. Quite naturally, they are confused regarding the interpretation of this behavior. MSHA continues to create problems where none exist. MSHA has become the ones that place underground bombs throughout the land only to then offer to cure the threat of harm by becoming the ones to remove the buried, potentially lethal hazard. Does this make any sense?Federal supervisor Bill Wilson, MSHA district office in Vacaville, warned, threatened, and intimidated that I and Original Sixteen to One Mine will receive federal citations if profanities such as the ones their traveling investigators have been experiences in Alleghany did not cease. He said we would be cited because we would be intimidating the agents. Wow. This action by Wilson obviously demonstrates and displays his furious ability to regulate and expression to intimidate. He threatened the FBI as well. What were the profanities? Several miners’ wives gave them the finger as they drove through Alleghany in their federally licensed cars.
I only imagine if they enact these threats, MSHA will master its goals of eliminating or taking over the operating of the mine(s). For without an independent or peer group determination of justice, our powerful Congressional granted agency gets in step with governments and largest conglomerated corporate organizations. Mineral extraction is big business. California is anti mining.
Distant federal agents who foster a program of intimidation and extortion stepped up their program to control the operations of mining in the United States. Slow but steady progress towards this goal enveloped the large mining companies. Why did the giants go down first? The top commanders of the large companies found the federal government a strong ally in crushing small companies and individuals seeking minerals. The reward: eliminate competition. Are there other reasons as well?
Little differences appear between the “want-to-be police enforcer” mentally displayed by field agents and a “want-to-be Perry Mason” advocate called the U.S Solicitors. My quest of discovery moves from Alleghany (the mine) and Vacaville (the field and regional headquarters of MSHA) to San Francisco (the lawyers). In this investigation, the route from San Francisco to Washington DC is very direct.
Find a way to inform Americans. Find local reporters to write an article. Contact national television personalities to do a story or interview. Our cash flow woes are a result of not finding enough gold. Our miners and company have been occupied with unreasonable demands by MSHA. We were unable to break enough rock for the statistical averages of success at our extreme high-grade gold mine to unfold.
Once a round (the daily footage advanced by an underground crew) is lost, it is never recovered. MSHA forced us to miss many rounds. Its unreasonable application of law (An Act of 1977) shifted from field agents and regional administration to US Solicitors offices in San Francisco. The country must begin looking into the behavior of a group of career federal lawyers. It seems to me that these lawyers have forgotten whom they represent. Like other silly and truly dedicated government employees, they are public servants for the tax paying American people. They forget the purpose of their work. Like poor little lambs, they have lost their way. For MSHA, it forgot the purpose it was created.
ONE HUNDRED YEARS AGO from
The Mountain Messenger
California’s Oldest Weekly Newspaper
Downieville, Sierra County, CaliforniaNovember 17, 1917
MINING NEWS
Items of Local Interest about Sierra’s Mines
There is a queer mix-up in the decision of the jury which tried the Sixteen-to-One vs. the Twenty-One case in San Francisco recently, and a new trial will have to take place. A report of the verdict in a San Francisco paper says:Although a jury in the United States district court gave a verdict in the Sierra county mining suit of the Original Sixteen-to-One Mine Company vs. the Twenty-One Mining Company last Thursday, no judgement has been entered by the clerk of the court. The verdict read: “We the jury, finding favor of the plaintiff and assess the damages against the defendants in the sum of $100,000 less cost of extraction of the ore on account of unwilling trespass.”
The defendant’s claims $78.000 as the cost of extraction. The verdict was returned at midnight and handled seal to the United States Marshal. The jury then went home. On presentation of the verdict of Judge Frank H. Rudkin the following morning, the judge said he would not order the judgement entered, as the verdict was too uncertain, and that he could not order the jury to correct it, as it had been discharged. The verdict then had to remain in midair. The trial occupied nearly four weeks, and involved mining property worth hundreds of thousands of dollars. During the course of the trial, moving pictures of the mines in operation were thrown upon a screen in the court room.
In 2001, Mr. Gage McKinney released his book, “When Miners Sang” about the Grass Valley Carol Choir. The Forward written by Professor Philip Payton, Director, Institute of Cornish Studies at University of Exeter, Truro, Cornwall informs us of McKinney’s strengths as an historian, former president of the California Cornish Cousins and depth of his humanity, humility and great affection for this subject. Just reading the Forward took some air from my lungs in excitement. Here is the first paragraph of the book’s introduction.
“Christmas Eve in the early 1940’s. The Nazis were terrorizing Europe and the Luftwaffe pounding Britain night after night. In relative serenity a typical American family gathered quietly at home and within the sound of a radio. The set crackled and then came a voice, not from Washington or London or some falling outpost, but from a place far removed from the strife, from the depths of a gold mine in California, a stronghold of granite and dripping water. In words similar to these the announcer spoke:”
“To all America, from coast to coast, a merry Christmas from Grass Valley, California—where the Cornish Carol Choir is singing.” The singers raised their voices, beginning the carol “While Shepherds Watched
Their Flocks by Night” to the tune of an old hymn. It was a Christmas custom and tradition beginning 78 years ago by Cornish miners, who had come to golden California and gathered in Grass Valley.In 1993, I took a phone call from team members of Huell Howser’s California Gold about bringing the Cornish Choir into the Sixteen to One mine. I knew that current miners sing underground (I still do) because it sounds so good and over several calls worked out a plan for his TV show. One stope in the mine stands out from all others. We called it “The Ballroom”. This is where the crew worked on its own time to prepare for the Cornish Choir to perform.
The miner volunteers could invite a guest, but we had to be very quiet during the filming. After the choir the miner band set up their instruments and the first live music played in the mine. Listening to the Cornish Choir and their comments to Huell was a thrilling experience for all. Following is the author’s account on pages 258-59 of that time when a bunch of us recreated the historic radio program deep in an underground California gold mine.
“In the early 1990s the story of the choir was told with dramatic flair on California Gold (episode #413), a popular television series. The program, produced by Huell Howser, presented the choir in historical settings, in the Methodist sanctuary and on the street of Grass valley, and in a gold mine. Sixteen singers and their director took to four-wheel drive vehicles for a wintertime trek to the tiny community of Alleghany in Sierra County. There they climbed into the skips that carried them underground into the Sixteen-to-One mine, one of the last in production. In their parkas and hardhats, the singers descended an inclined shaft lined in white quartz, and the left the skips to file deeper into the mine, and to eventually reach a chamber like the one in which the carolers had sung in 1940.
Before their performance began, the carolers were treated to a pasty dinner. The meal prompted Mel Jones to remark that his father ate a pasty every day in the mine. For Jones in was the first time he had been underground since working his way through college more than fifty years before. For Brian Bennallack and Harold T. George it was their first trip underground since the national broadcasts. Having eaten and regained their wind, the carolers gathered to sing “Sound! Sound!”
As he recorded them, sound technician Eric Rice of KVMR Radio discovered something technicians probably noticed in 1940: the jagged walls of rock eliminated echoes and distortion. “The room is so lively,” Rice remarked. “It doesn’t matter where I set the microphone.”
The small group of voices sang several carols, closing, of course, with “Diadem”. With only sixteen voices they could not reproduce the big sound that a full chorus of workingmen had produced during the war, but they could show the tradition was still treasured. And because the program repeats every Christmas on Public Broadcasting System stations, the Carol Choir has reached its widest audience ever”.
TEN YEARS AGO I WAS INTERVIEWED BY A BUSINESS WRITER FOR A NATIONAL MAGAZINE. WE NEVER FINISHED THE INTERVIEW. WHILE SEARCHING FOR AN OLD REPORT ON THE RED STAR PROJECT, I DISCOVERED A TRANSCRIPT OF PART ONE OF THE INTERVIEW. ENJOY. HISTORIES ARE WORTHWHILE.
Draft received from a recent interview of Michael Miller that may appear in a yet to be identified publication. January 22, 2007. Part One
Q: More stories about gold are appearing as gold increased in value last year. Are we in another new American gold rush?
A: I wouldn’t call it a new rush but there is definitely an upturn in interest. The mother of all historical gold rushes took place in California between 1848 and 1852. In modern times the current interest is a continuation of “the rush” unleashed on December 31, 1974, when gold was economically freed from government suppression. Today the general public has yet to participate even though we see more references to gold than a few years ago.
Q: How do you follow the gold markets?
A: I keep up with gold and other natural resources thanks to magazines, newsletters and newspapers, web sites or articles on the Internet, friends or acquaintances in the various industries and other sources. I enjoy reviewing company reports and SEC filings. My interest goes beyond what should be required of a president in the natural resource industry. I’m curious. My macro- economic belief is that our natural resources contribute to the liberties and freedoms the entire world cherishes. There are potential global impacts, significance for Americans and important local consequences that touch many people.
Q: While it seems simple, the realm of gold has a complex history. What single advice pops into your head to offer someone outside the gold market wanting to get in?
A: The rules are the same whether its gold or technology: go into gold with an open mind and teach yourself through study. I started that way thirty-two years ago. My family background, formal education and life-long experiences make me a risk taker but a careful one. Emotion gets in the way sometimes. The counterpoint to risk is reward. The ability to evaluate these two components is crucial with today’s gold investment options. Whether it is an investment in time, energy or money, a formula may be constructed to analyze various choices and opportunities. There are unfamiliar terms in gold mining with unclear definitions to deal with. You want a quick single concept to embrace: ponder the downside risk and upside potential.
Q: Why have you devoted thirty years to the mines in Alleghany?
The relevance of mining, natural resources and gold to our present and future well-being makes me a Sixteen to One bull. I recognized the potential quickly back in 1974. Our experiences continue to confirm my early impressions. I don’t want to go into a lot of history now; however what has taken place in Alleghany and the Sierra Nevada Mountain range is awesome. It sometimes takes my breath away just to have an interest in keeping this culture alive. While economic growth (stock appreciation) is an important goal, so is acquiring physical gold as a personal possession. This opportunity really puts Original Sixteen to One Mine in a very special and small category of gold stocks. The little guy, like me and others, has a chance to participate in something exciting.
Q: In reading your history you seem to always have plans that require money but you rarely actually go outside to get it. Why?
A: We prefer to finance our growth and development by mining gold. The Company’s fortunes turn in a single shift, so as long as we are breaking rock, fortune may tap us on the shoulders. Other reasons are more pragmatic. In order to declare a gold dividend the division of ownership must be manageable. It is. The more shares outstanding, the more difficult to divide excess gold into a meaningful amount. I monitor our gold inventory, cash flow and daily underground mining progress to quantify the risk/reward scenario. In conversations with Ian Haley, the mine manager, and the crew I gain a sense of production and what is ahead of us. My actions are to push it, in other words “risk evaluation” is a constant part of the job. It changes almost daily. Last week on the 1000 foot-level, we found a gold showing in the down-dip side of the vein. We slabbed the rock. It revealed a very nice display of gold, more than first look. Now we have the choice of proceeding with the level rehabilitation or interrupting that heading and sink on the gold. Each has a risk and each has a reward. No one knows but right below us less than a week away could be enough gold to finance our Red Star project from this production.
Q: You mentioned unfamiliar mining terms earlier. Give us some common ones and some that may be unfamiliar or poorly defined.
A: I used the term “down-dip” in describing where we found gold on the 1000-foot level. First, the dip is the angle that a bed, stratum or in this case a vein is inclined from the horizontal. Down-dip tells the direction of the incline. Its opposite would be up-dip, although this term may not be used throughout the mining industry. Mining districts develop their own terms over time, so there can be confusion of meanings even between experienced miners. For the non-miner who is trying to get a grip on evaluating gold companies, the first concept they must deal with is reserves. The Alleghany Mining District is very fortunate because the gold deposit cannot be qualified or quantified using a reserve projection. The investor today is barraged with reports about proven reserves, probable reserves, possible reserves, inferred reserves and a resource. Whew! Believe me, these terms are not interchangeable but many exploration companies as well as others lump them together. I think it is done to fuel great expectations for those seeking a play in the gold industry.
Q: Why should individuals or other entities be interested in the Sixteen to One operation and give some examples?
A: An important fact in evaluating the likelihood and meaning of meeting the two goals (stock appreciation and gold distribution) is the number of outstanding shares. This is a very important statistic for comparing all corporations. On December 31, 2003, there were 12,867,250 shares issued and outstanding. The number remained the same on December 31, 2004 and December 31, 2005. Dilution was nil. The upcoming December 31, 2006, number increased by 118,204 to 12,890,204 shares issued and outstanding. This small increase was due to a stock conversion for debt, money owed a shareholder who helped purchase the Gold Crown mine in 2005, directors’ fees and a long overdue account payable. For a company that has been financially handicapped, it avoided dilution just to keep the operation going. We are not fueling our operation by selling stock. We are one of very few small gold companies that actually mines gold for its cash flow.
Q: Is a gold dividend a fluff concept or for real?
A: It is for real. One of our past directors, Lee Erdahl, was a director of Ranchers Exploration and Development Corp and became its president after the untimely death of Maxie L. Anderson. Mr. Anderson paid a gold and silver dividend. It may be the first declared in kind dividend by a public corporation. I find it an inspiring accomplishment. As of today, a gold dividend of a quarter ounce per 1000 shares would require 3,250 ounces of disposable gold. This is a realistic number for the Company to meet.
Another requirement necessary to declare a dividend is the company must be debt free. Ours was debt free for half of the 1990’s. It was debt free by mining and selling gold, not by selling stock. It also paid a $0.05 per share dividend in 1995, the first dividend in thirty-five years. For most of its corporate life the owners were generously compensated with an annual dividend and the company was debt free and met its annual cash demands. Tax laws were different but with an “in kind- pro rata distribution”, the onus of double taxation will not be a factor in distributing profit. A goal of a gold dividend is for real.
Q: If you never had a public offering how were the 12,890,204 issued?
A: When I took over as president in 1983, there were 180,000 shares outstanding. Many were issued to former owners of mines the company acquired.
The company did a three for one stock split when the stock was very low priced. It had no dilution effect on the shareholders of record. Everyone’s percentage of ownership remained the same. It made no difference for the dividend goal. Dividends must come from profit not from selling shares. Selling shares is not revenue. This was brought to light when reading the 2006 annual report of Klondike Star Mineral Corporation. I like its idea to find the underground source of the placer gold found in the Yukon. I can relate to the excitement and perhaps monster gold pockets still remaining after eons of erosion and geological changes. We have the respected Blue Lead dead river below the Bald Mountain and Red Star claims. We know the veins exist from prior mining and drilling below its bedrock. We know that nuggets were found still encased with some quartz. We know much about the geology of this property. I like what Klondike is doing and wish them great success. Management has a different view of its corporate structure and its ownership. It appears as a one-dimensional plan for making money, stock appreciation. With xxxx shares outstanding and 5700 shareholders, a future gold dividend seems unlikely.
As I look at Klondike’s Balance Sheet and Statements of Operation a long standing and most popular pattern is evident: no revenue, ongoing dilution, high general and administration fees and high public relations expenses. With no revenue and expenses of $8,778,272 about 56% went to General and administrative (3,392,679) and Public Relations (1,538,207). Mineral exploration was $3,379,652. Shares outstanding increase annually as the company uses dilution to fund its program. This time period 3,423,000 shares were added. Nothing is wrong with this business plan. It is the one that most exploration and under financed companies follow; however there is more to the analysis of the impact of number of shares outstanding.
Few people know the number of shares outstanding in the companies they own or contemplate buying. Look at Newmont (I am a shareholder). It has 312,984,000 shares outstanding. That is a large figure. Another gold producer, Barrick, with 554,270,000 shares outstanding, tops it. This type of analysis is important to evaluate a gold company. Check its “market capitalization (market cap). Multiply the shares outstanding by the share price to determine a market cap. This is the total value the market places on the corporation. Sixteen to One is slightly under $13 million. Klondike is slightly under $40 million. Newmont is more than $12 billion. A gold dividend is not in the future for any of these companies except the Sixteen to One.
I understand why Klondike goes to financial markets to raise working capital. But why did Newmont announce a $600 million loan in November? Its stated reasons seem odd in light of its great stream of revenue. Klondike has no other choice but to continue borrowing or diluting existing shareholders in order to stay in business.
These companies and more of the Barrick types and many more of the Klondike types are competing for working capital at a time when the world awakens to the need and value of natural resources. These are the opportunities available to an eager market, a market that has only begun to be excited by the prospects of $800 or $1000 ounce gold. I am bullish for Original Sixteen to One Mine because of its different risk to reward relationship. I am sure that there is one just as favorable in other gold opportunities. I just don’t know of any to invest in. What is missing to the casual researcher of our company must be the reviewers’ reluctance to project what it will become when its two-step financial plan is successfully implemented. It is public information for the most part. Some items (all positive) are withheld for security reasons and because of their confidential nature.
While scrawling through some internet headings, I found reference to our FORM 10-QSB. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarter Ended September 30, 2002 File No. 001-10156
SUBSEQUENT EVENTS
On October 29,2002, The Sierra County Grand Jury issued an indictment against Michael Meister Miller, Jonathan Farrell and Original Sixteen to One Mine, Inc. The next court date is November 20, 2002 for arraignment. Management believes the accusations are groundless; however, because the instigating prosecutors are private non-governmental lawyers outside the standard criminal system, a vigorous and time demanding defense and offense are necessary to protect the shareholders’ interests. Even unfounded criminal accusations are mentally debilitating and time consuming. Because Miller and Farrell hold key management positions, the company may suffer substantial and significant damages due to the distraction caused by the prosecutors.What a time! What memories! Why did I bring it up today?
With a Company like ours, history is relevant and important for someone wishing to judge what is ahead. Junior gold companies tend to issue press release about how the permitting is going and drilling projections. We are different. The purpose of this web site is to make history available to you and the many people who know nothing about California gold mining, the Sixteen to One or how we have survived into our third century.
The presentation to Sierra County Grand Jury by corrupt lawyers almost fifteen years ago threatened our very existence. The charges were specious but had to be defended with vigor. We did just that. The unethically lead lawyer should have been disbarred. He wasn’t. He lost his job and moved on to some other job, which he also lost. He should have been disbarred! We survived this attack!
Our small but vastly important natural resource development industries face a similar crime by government employees from various agencies. The crime to the public and those working in these industries centers in how regulations are enforced in light of how the respective governments wrote the laws for regulation. I want regulations and I want them fairly enforced, enforced as Congress and State houses wrote them. In almost every regulatory law I have read (and there have been many) reasonable is mentioned along with beneficial use to the public and non-public. We survived these attacks!
I look forward to the time when the Americans holding high agency positions set the example for their employees to become the helper to Sixteen to One mine (and all improperly regulated entities) not a rogue cop. It may not be far away. Let’s be progressive, moving forward or step by step. I believe in progress and promote reforms or changes. Your ideas and participation are most welcomed. The United States benefits from the domestic gold brought into the financial market and the need is increasing each day.
For our hard working traditional, hard-rock, underground, gold miners and directors, our message for the 2017 year is “Truth, like gold lies at the bottom.”
We will do our part to preserve, protect, enhance and bring a rare American natural resource into the coffers of our country. I dare say, we will exploit our gold, which means we will out it to use. The 2017 year makes me, an overtly optimist, smile. Truth, like gold, lies at the bottom. Happy New Year.
Errol Christman passed away July 25, 2015. He was 74. He grew up in the mining town of Grass Valley, where one of America’s great underground gold mines dipped thousands of feet below the Pacific Ocean surface.
I met Errol in the late 1970’s. He had a month to month lease to prospect Sixteen to One in late 1970. He paid $250 per month. It worked out well for Errol. The old workings above the drain tunnel level had quartz pillars that were left to support the ground. By drilling these pillars he sacked high-grade gold, which financed a growing mining equipment business. His time underground at the Sixteen was short but profitable.
Some people faulted Errol for removing the pillars and causing irreparable destruction. I was not one of them. He took advantage of an opportunity given him by the mine management in San Francisco. Our Company had quit mining in December 1965. It gave existing miners permission to go into the mine to eke out a modest living.
Fortunately for the future, no one brought metal detectors into the old workings. We did in 1992. Success was instant. The single biggest day was in 1995. We drilled blasted and sacked 25 2,500 ounces in one shift. Gold spot was $400 an ounce, so it became the Million Dollar Day. This pocket was less than ten feet from where the ‘old-timers’ stopped mining. Errol did well. So have we. Ours is a rare and exceptional gold deposit. Knowing this to be true has kept its owners in place for over 100 years. Errol was a part of our history.
Three government agencies are most onerous to the welfare of our miners, owners and community. Two are Californian and the other, a federal branch of the Department of Labor. It always has not been this way. I came across a letter I wrote to our Congressman in 1999. Sadly its theme rings true today. I thought it was worth a review sixteen years later because an epidemic of irrational enforcement of regulations seems to be wide spread across our country. A free democratic republic must be regulated. It is not the regulations that are upsetting, but the execution of the standards/codes designed to implement the laws that are a major issue.
What has happened to small scale underground gold mining is happening to big industries throughout the United States. If federal agency enforcement is the problem, it centers in Washington D.C. It can be fixed but not unless our elected representatives grab a hold on our federal public servants to alter these abuses. You know the problem just as I do. It is time to call out names so those elected to serve our well-being can act. I did this in this letter in1999. Did it make a difference? Not that I know.
If you follow our FORUM, you will find out if the Sixteen to One miners are respected in the 21st century by our chief safety regulator, MSHA. Let’s hope it will happen. Californians will benefit when its bountiful natural resources are treated with respect.December 2, 1999
The Honorable Wally Herger
55 Independence Circle, Suite 104
Chico, California 95973
Fax: (530) 893-8619Dear Congressman Herger:
MSHA (Mining Health and Safety Administration) is a federal regulatory agency that derives its power from a Senate and House approved document referred to as An Act (Federal Mine Safety and Health Act of 1977, Public Law 910173 as amended by Public Law 95-164). Its purpose was to improve the safety of the mining industry’s most precious resource – the miner. Interim mandatory health and safety standards were designed and a bureaucracy of inspection and enforcement employees were hired to carry forth the wishes of Congress.
Congress specifically pointed out that information generated during the practice of implementation of An Act shall be obtained in such a manner as not to impose an unreasonable burden upon operators, especially those operating small businesses. The agency currently has lost sight of Congress’s direction with regards to our company and the intent of Congress.
Our company is public, listed on the Pacific Exchange (OAU symbol). It is California’s longest operating mine and the second oldest gold mining company in the United States. It is also very small. It is the remaining active traditional underground gold operation in California. MSHA has significantly and materially impacted our ability to function. It is directing our mining operation by issuing questionable citations, then demanding our miners work solely on correcting them. Its agents have become unreasonable in interpreting the codes and standards known as CFR Title 30- Mineral Resources.
In California MSHA is administered from a field and district office in Vacaville. Individual inspectors report to Willie Davis, a field officer who works under the district office (Jim Salois, manager, and Bill Wilson, assistant manager). The next level is the administrator for metal and non-metal industry, Mr. Ernie Teaster. I do not know his location. The head of MSHA is J. Davitt McAteer (assistant Secretary of Labor), who is responsible to the Secretary of Labor.
There are no doubts with the miners or management that MSHA is an agency out of control. MSHA allegations of unsafe conditions have become opinions of individuals who seem to have reasons for exerting pressure on our operation. For example: Code interpretation and guidelines require that allegations of violations be based upon the particular facts surrounding the violation plus a reasonable likelihood that the hazard will result in an injury or illness of a reasonable serious nature. Section 1 04(d)(1)/(e)(1). Both of these findings must be made before a violation can be designated as “significant and substantial”. Guidelines also exist for determining the likelihood of injury and the seriousness of injury. Congress included the word REASONABLY as required criteria for inspectors to follow. Reasonableness has been lost under the current administration of An Act. By the way, each citation now comes with an ever growing monetary fine.
I am a career miner, owner and operator of twenty-five years in the special Alleghany Mining District. The current draconian impositions thrust upon our small operation are traceable for eighteen to twenty four months. They define oppression to business that is associated with an unbending totalitarian type of government, something that is repugnant to all Americans. The level of unreasonableness has increased significantly the past year. Opinions have become facts. Unfortunately for our miners, company, owners and community, mine inspectors have become policemen, policemen undertrained or unqualified to perform their congressional charge. MSHA has become counterproductive to the congressional mandate established in An Act and the safety of our crew. The Program Policy Manual guidelines are set so that an inspector must use in his evaluation: background, training, experience and an evaluation of actual circumstances surrounding the violation. He is to arrive at independent judgments. I contend that there is no longer an atmosphere of independent judgment coming from the district office in Vacaville. After in-depth conversations with inspectors and other MSHA personnel, miners, managers, operators and owners, I believe a handful of high ranking government employees are responsible for this atmosphere.
It is interesting to note that MSHA has acknowledged that within the industry it regulates, whether surface or underground, metal or non-metal, the MSHA field inspectors have the highest rate of injury in the industry. Having observed the last inspector on our property, REDACTED, it is easy to see why.
I request a thorough congressional investigation be conducted into the affairs of MSHA from the field and district offices in Vacaville to the rooms under the auspices of J. Davitt McAteer. MSHA has lost sight of the Sixteen to One mine’s most precious resource….our miners. I believe you will find similar situations at other mines in the west.
Sincerely,
Michael M. Miller
PresidentDear Mike,
Recommend you resubmit your letters to congress, the present congress is interested in reducing or eliminating federal government over reach of its regulations and they most definetly need to know what the problems are.
Hi Mike,
Having read your previous letter and comments, I hope you are well. Youare agreat representative for the rights of the miner here in California. The conflicts in court should be done sooner for compliance to the Constitution.
I looked into the usefulness of restarting the lost organization of the Alleghany Mining District in 1978. I was very excited with the prospect of local control. Its value today is seriously compromised with this language taken from Clark’s text below. Second paragraph: “and not inconsistent with the laws of the United States”. Third paragraph: “This grant from Congress enabled miners in their respective mining districts to regulate their own pursuits subject to the laws of the United States.” The key words are, “subject to the laws of the United States.” Unless I am wrong (and I hope to be wrong) the Federal Mine Safety and Health Act of 1977, which defines the regulatory position for mines, preempts anything authorized in a Mining District.
The strongest law, called “An Act” is not followed today by the regulators, called Mine Safety Health Administration (MSHA). Section 4 identifies those mines Congress intended to regulate. MSHA now interprets Section 4 as all mines. This is an unlawful act by federal employees. An Act also qualifies inspectors’ background, experience and training authorized to write citations. Its inspectors do not have these qualifications. They are law breakers. If the Alleghany Mining District, a well-established district that has continued to operate since its inception, could enforce the law under An Act, I would be jumping to activate the process. Below is a recent communication I had with the Federal Review commission. No answer yet.
March 31, 2015
Dear Federal Judge,
There are four Dockets listed in the March 31, 2015, Order of Consolidation Amended Prehearing Order. Two dockets are for Mine ID #04-03065 not Mine ID # 04-01299. These mines are not compatible for a mutual hearing. My employer is concerned about the loss of productive time because of the multiple dockets combined at the last hearing. My memory recalls that all parties realized the difficulties in conducting that hearing.While I have your ear, my employer has serious concerns about the roles of MSHA inspectors and MSHA management with solicitors: conducting negotiations and hearing attendances. Is this the first time you have heard of this? Too many federal employees involved in carrying out the intent of An Act have lost their way at the expense of those they are required to protect…the miners. Perhaps it is just in the Western District. I don’t know what coal or other miners are experiencing. Most of the gold miners and operators in Northern California have experienced awful treatment from those empowered to protect them. This must change in order to implement Section 2 of the Federal Mine Safety and Health Act of 1977.
My mining experiences predate the legislation that was passed by Congress in 1977. My time in this important industry is also drawing to an end. Those people whom I have never met over the years can readjust the system now operating with serious imperfections. Are you aware of the root causes of malcontent amongst small underground gold miners? If so, what has been reported to you?
My employer, Original Sixteen to One Mine, Inc. is the oldest and longest gold mining operator in America. It offers its assistance in improving the interaction of MSHA and operators. According to the law, “the operators of such mines with the assistance of the miners have the primary responsibility to prevent the existence of such conditions and practices (unsafe and unhealthy) in such mines.” I agree with the law and pledge to work with people to get our regulators and operators working to carry out Congress’s mandate. America needs its natural resource industries to remain free.
Regards,
Michael Meister MillerThe Power of Mining Districts
by Clark Pearson
Director, Northern Office
Public Lands for the People
_______________The 1872 Mining Act was Congressional acceptance that miners can make needful federal rules and regulations governing their activities on federally managed lands. Specifically codified under 30 U.S.C. sections 22 and 28. Section 22 states:
“Except as otherwise provided, all valuable mineral deposits in lands belonging to the United States, both surveyed and unsurveyed, shall be free and open to exploration and purchase, and the lands in which they are found to occupation and purchase, by citizens of the United States and those who have declared their intention to become such, under regulations prescribed by law, and according to the local customs or rules of miners in the several mining districts, so far as the same are applicable and not inconsistent with the laws of the United States.” (Emphasis added.)
Essentially, this is by the miners, for the miners. This grant from Congress enabled miners in their respective mining districts to regulate their own pursuits subject to the laws of the United States. Most of the previous rules and regulations by miners in their respective mining districts were reabsorbed into state law. With the miners choosing to organize the traditional mining districts, they shall have federal supremacy over conflicting state and federal law upon federal lands.
The Mining Districts shall override conflicting state and federal laws that stand as obstacles to the full Congressional objective of the 1970 National Minerals, Mining, Reclamation and Policy Act (30 U.S.C. section 21a) and the 1955 Multiple Surface Use Act (30 U.S.C. 612 sections a – b).
The Mining Districts shall intervene upon the miner’s written request to resolve conflicts that unreasonably interfere with the miner’s right to extract, as defined in U.S. v. Shoemaker. Said in another way, the miners will police themselves, and the Mining Districts will have the first right to mitigate any claim disputes before going to the Interior Board of Land Appeals or any other federal or state court.
The Mining Districts shall be the arbiter of reasonable environmental and safety regulation(s). (See footnote 1.)
And most importantly, the Mining Districts can open the federal land to multiple-use by the public on principles of inclusion rather than the present day exclusions carried out by the extremist environmental lobby groups that work inside and outside all the other various agencies. (See footnote 2.)“A wise and frugal government, which shall leave men free to regulate their own pursuits.”
— Thomas Jefferson, 1801, on what constitutes good government.Miners, in their respective Mining Districts, have the ability to duly elect representatives to make rules and regulations governing their mining activities (customs of miners) in contrast to executive agencies that currently answer to the whims of the President and the bureaucracy. These duly elected representatives will have a proposed term of 4 years such that they will be accountable to their constituents — the individual miner — just as it worked in the 1800’s. And quite successfully I might add.
Once the organized Mining Districts take shape, the Minerals and Mining Advisory Council (MMAC) can and will submit to Congress for a budget for the administrative functions and clarifications of the Mining District’s relationship with the other federal and state agencies. The MMAC website will have a resource section which explains what your fundamental rights are as miners. The claim owners in those districts elect all the miners that represent the districts and upper tiers – nobody is appointed.
Presently, MMAC has developed some preliminary guidelines and clarifications (changes to HR 761 rev. 8, and ESA reform) and handed them to the Congressional House Subcommittee on Resources and Minerals. This preliminary notice from MMAC to Congress is open for more discussion but covers and fixes many of the problems the mining industry faces that have hit most miners especially hard. There are severe ambiguities in law that need clarification that stand as obstacles to the accomplishment of the National Minerals, Mining and Reclamation Policy Act of 1970 (codified under 30 U.S.C. 21a).
The MMAC will need the active participation of every miner, every mining organization, every claim holder and any other group that shares the multiple-use principles of our public lands. The tasks before us are for Americans that strive for accountability, self-determination, and for laws that are for and by the people. It could be said that miners can shine the light on the proper role of government in the darkest of tunnels.
Mining District Advisory Council website: http://www.mineralsandminingadvisorycouncil.org/
Ben Franklin once was asked to comment about our newly formed government of the United States of America, and he said, “It’s a republic, madam – if you can keep it.”
Now I ask the miners of today, we have Mining Districts — can we keep and run them?
_______________1. Before any agency such as EPA, DFG, DEQ, USFS, MSHA can carry out any existing or proposed regulations on the mining community, they must first get approval from the Mining Districts to implement them. (Clarified in modified HR761)
2. Items for example: roads currently closed now will be evaluated by the Mining Districts for determination on leaving them open to the public as intended.I’m researching historical gold production for another topic on the FORUM and the following file came up. For the 2015 mine plan, we will examine these early Tightner workings. Why? This productive area has never witnessed a modern gold detector. You know what happened to our production after 1992, when off-the-shelf hobby detectors entered the Sixteen to One. Our expectations are high.
FROM THE ARCHIVES
One of several hidden asserts of this mighty little gold company are its map collection. We don’t write about it much but the information contained therein is priceless. Here is what it means to me. The maps cover over one hundred years of development. One grouping is titled “Progress Maps”. They are usually depicting annual work and the months are colored individually. My mind turns to the appropriate dates of these progress maps. I transform into that miner, geologist, engineer or mining executive while studying the monthly (yearly also) progression of development and gold production. Why did they go here? Why did the go there? Why is this block of ground untouched?
The answers are speculative but, come on; all mining is speculative as are most investments. The ‘whys’ of the Sixteen to One are great topics for discussion. These maps affirm a fact: this deposit involves risk with hope of large profits. Also we have years of data beyond the times the maps were drafted.
Work to reorganize the map collection is underway. Years ago an old building was renovated to house the maps and have space to spread them out. Other needs preempted the reorganization…no longer so. The thirst for knowledge of the past now preempts other needs. I am thrilled to return to study of the work of yesterday’s miners. With each map comes the opportunity to learn.
I had an epiphany this morning after unrolling a 1915 map of the Tightner Mine Company. The map details the early workings which are near bedrock elevations above the 250 level. The gold values are recorded in dollars when gold sold for $20 an ounce. One stope is breath taking…$700,000. Not far away is a $350,000 stope and there are many values at five figures. Multiply these numbers by 60 to understand this historic gold production today. Breathe taking!
Back to the epiphany. Are there no risk takers today for investing in this gold deposit? Apparently the answer is yes. Why? No one has taken the time and effort to understand this gold deposit, how it became successful and whether our plans will reap large profits. It is as simple as this…we are on our own.
Mining legends like Fuller, Searles, Foote, Kallenberger, HR Cook, Alling, Ferguson, Bennett and Taylor left their imprint in Alleghany. I have my answer to understand the risk/reward of mining for gold here, which is strengthened with these maps and thoughts of these great men. Thank you.
Prepared from Company files
May 18, 2010
MMMNewsletter#35 sent to shareholders December 4, 1996, was in my thoughts today. There is no doubt nor was there eighteen years ago that improvements in both software and hardware to recognize unseen metal in the Sixteen to One quartz will lead to gold production. It is the single most dramatic exploration tool for a gold deposit like ours. As previously announced, work with a private company that shares our beliefs is guiding our exploration at the mine. As said before, the relevant question is “when will the technology package be found?” Not if it can be discovered.
Off the shelf detectors have improved and some of the electrical tweaking we have tried has helped. Sadly, the last meaningful gold was mined in 2004. The Sixteen to One is far from dead but our operation has been crippled for a decade from the modest production. These underground gold mines have knowledge not found in books. Scholars, analysts and others struggle to learn.
Technological Summit #35
On October, 3 1996, we hosted a technological summit for selected experts who believe we can locate and mine gold more efficiently using their emerging technologies. Participants included Dr. Sandor Holly, a MIT and Harvard trained physicist and 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 jewelry 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 participants have experiments planned over the coming year.No, Fred, I never heard from Mr. Dye.
We are little squirts compared to most mines under MSHA regulations. Nevertheless, what an inspector does or does not do has serious consequences for us small miners. I believe that the small miner will be treated more fairly in the future. Why? Because some of us are holding them accountable.A major difference in the coal mine experience you mentioned below and ours deals with code violations. The Sixteen to One is up to code unlike the coal mine. An overzealous MSHA inspector is at liberty to interpret regulations according to his background, training and experiences. Some read the regulations strangely, or fail to recognize what they see. Some MSHA inspectors truly lack the experience and knowledge to evaluate our mine when it comes to judgment. I know from conversations with operators in Alaska, Idaho Arizona and Nevada that we are not the only ones.
Our miners have years of background, training and experience in this gold deposit. All of us would feel conflicted if we were to judge whether a regulation is violated in a coal mine or perhaps even in a surface mine; however I believe a hard rock underground miner would do better in a surface mine inspection than a surface miner in a California hard rock gold mine.
In the 1950’s and 60’s and 70’s, mining hazards were many, many that could be eliminated with a caring management. Our country needed safety enforcement. The first was MESA, followed by MSHA (Mine Safety & Health Administration). I know that the inspectors who came to my operation in 1976 to 1982 were helpful and appreciated by the crew. No sane person would reject a fresh pair of eyes to point out an unsafe condition.
Recognizing that mining is a dangerous occupation, when that fresh pair of MSHA eyes finds a condition that appears unsafe, his conscious and unconscious judgment must take over. If he or she lacks the trilogy of background, experience and training, the superiors who have placed that inspector in this situation must be notified and deal with the problem. My purpose in writing letters up the chain of command informs those accountable and responsible for what happens in the trenches of mining warfare. I have been disappointed in achieving this purpose.
Michael,
That was a good letter! Did you ever get any kind of a response from Mr. Dye?
I can relate a personal story of my own that is almost unbelievably stupid. I heat my house in the winter in northern Indiana with “hard” anthracite coal. I know a couple of people around where I live who run local coal yards. One of these guys was lamenting to me how he could no longer get what had been some of the highest grade anthracite in the world. What happened was that the mine in eastern Pennsylvania got “inspected” by the government. Numerous “violations” were found and the mine was ordered to immediately get everything up to “code”.
Well, getting everything up to code would’ve cost this mine millions of dollars – millions that they did not have. So, what did they do? They closed the mine, of course.
I believe that miners should be able to expect to work in a safe environment. No one questions that. But are these miners actually “safer” now that they no longer have jobs? Is the family who owned the mine better off? And then there are consumers like me who have to pay higher prices for crummier coal on account of this. Yeah, this was a really great decision, huh?
I guess if the government really wants to make sure that no one will ever be killed in a mine accident again, then they should just ban all mining. Come to think of it, while they are at it they should ban automobiles, trucks, trains and airplanes too so that there will be no more accidents.
For better or worse, we all live in an unsafe world and people do need to be protected and their safety ensured but these rules and regulations are clearly over the top and out of hand.
Regards,
Fred M. Cain
Topeka, IndianaI was recently criticized for not doing enough reaching out to the public at large about the evilness of social wrongs that occur during my life as a hard rock gold miner in California. You (reader of this forum) are the public. Some of you keep up with the Forum entries. Some have even been around since its beginning. I forget content, so must you? If you are new to the Sixteen to One, please take a Forum topic and read it from the beginning forward. Much of the entries disclose stuff worth spreading to a broader audience, like the letter below that I just found in a discarded file. Minerals are vital and will be vital in even a primitive society let alone the social network of the 21st century. Wars are fought for natural resources even though oil is the one most talked about. Take a quick look around. All that you see has its basis in minerals. Even the wood or food would disappear if it were not for the mineral extraction industry. The raw materials of manufacturing are mined from somewhere. Prosperity will return to the countries and societies that recognize the value of sane natural production within their borders. The private and public institutions and small businesses will lead the financial recovery. Our governments must assist not impede prosperity.
The letter below is just as relevant today as it was almost eight years ago. Not much has changed, in fact I could site MSHA behaviors that are more damaging today than in 2005. This letter could be placed in the INTERSTATE COMMERCE AND SMALL MINES topic. What good is bitching without offering solutions? I do not have the resources to reach the public much beyond this web site. Please help.
David Dye, Assistant Secretary June 29, 2005
MSHA
U.S. Department of Labor
1301 Airport Road
Beaver, West Virginia 25813-9426Dear Mr. Dye,
Congratulations on your new appointment to head the federal workers safety program for America’s most precious resource, its miners. I am president of America’s oldest gold mining company and perhaps the only working hard rock, traditional, underground gold mine in continental United Stated. It is not something to brag about; it is something to mourn and investigate why there are so few. I also operate as an independent contractor for several projects and have been in the gold mining business since 1974. Your agency is partly responsible for the decline in the domestic natural resource industry. I am not sure that you are aware of the decline in the partnership between MSHA and operators to keep the miners safe. I write today to give you a recent example of how your agency is hurting the small operator.
On June 22, and 23, 2005, MSHA conducted a regular quarterly inspection. Accompanying the inspector was a young trainee. She had no experience working in an underground mine. She said that she had never been underground before. During the inspection she began lagging behind. It required a second employee of mine to stop and accompany her. She was unprepared for the inspection both physically and with her provisions. She put herself in danger, our crew in danger, compromised the agency’s credibility and endangered the operator and owner of the mine.
I request the following:
1. By what authority grants MSHA the right to bring trainees onto our property?
2. Is this practice occurring elsewhere?
3. Who at the Western field office approved her visit?
4. Please notify the Western office to cease bringing trainees on inspections or at least unqualified and unprepared ones. Please let me know their response.I support the reasonable enforcement of the Act of 1977 as Congress intends it. The practical benefits for those of us in the trenches were lost almost a decade ago. Reasonableness no longer is a concept practiced in the field and offices. MSHA no longer is meeting the best interest of the American public. Maybe you will be able to enforce better training for those attending the National Mine Health and Safety Academy as a first step to improve operations of the mining industry in the United States. I hope so.
Where will there be mining jobs in the future? Not likely in this country if the misdirected regulatory agencies continue their trends. Why are federal tax dollars passing through MSHA to China to help them development mine safety teams? The International Mine Contests are held every two years and about fifty teams compete. Last year in Las Vegas, China participated for the first time and placed third. China will likely win the next contest, which is fine with me; however, public money is going to them while MSHA has introduced a policy of increasing revenue with citations and penalties against the operators in the United States. Poland gets as much money or maybe even more than China granted through MSHA. Why?
MSHA employees take frequent trips to China and elsewhere. I was told that someone goes to China at least every other month from MSHA headquarters. How is this expense justified as helping America’s most precious resource, its miners? China has invested heavily in Australian natural resources. None of this bodes well for America’s economic freedom. China has something like a trillion dollars foreign trade asset.
Last year there were forty deaths related to mining. Last year in China the government admitted to 10,000 mine related deaths. Last year 658 people died every day in automobile related accidents on our roadways. My point is the mining industry in America is a responsible industry. It should be treated that way by MSHA, which has not occurred in various operations in the west. Right now there is an insidious and specious effort to further impede the American operator by insisting that the category of “lead miner” reflects a management position within an operation. This is not true. Most within the mining industry both public and private know this is not true. Yet our small company has been forced to challenge this reckless assertion by MSHA agents and lawyers working for the Secretary to establish this position. The case is in the hands of the Ninth Circuit Court of Appeals. Your agency is driving this outrageous myth. How about getting involved and putting an end to this costly abuse of process?
Does America derive benefits from the money it spends to send agents onto private property under the authority of the ACT of 1977? The answer is “no”. Should America continue to fund an out-of-touch agency like MSHA? The answer is “yes” but changes are necessary. Good luck. I am at your service to improve the situation.
Sincerely yours,
Michael M. Miller, president Original
Sixteen to One Mine / owner Morning Glory Gold MinesSense in that Golden Nonsense
Published February 19, 1965A Charles de Gaulle press conference is known around the State Department as his “semiannual anti-American lecture.” Last fortnight he used one to launch an assault on the dollar. The dollar, say De Gaulle, should be replaced as the international currency by something “which has a real value, which must be earned to be possessed.” And what is that? Gold.
“Yes, gold which does not change in nature… which has no nationality… the immutable and fiduciary value par excellence.” Behind De Gaulle’s words you could almost hear the stuff jingling in a million French mattresses, its hideout through the centuries. He wants gold restored to its throne because the Common Market countries now own almost as much gold as the U.S. and could own a lot more if they wanted to turn in their dollars for it.
Most money experts dismissed De Gaulle’s “vast reform” as dreamy nonsense. U.S. Treasury officials called it “a retreat to 1931”. Yet as always with De Gaulle’s pronouncements, this one has a shrewd aim and much prophetic content. The subject of gold is not nonsense when the dollars is in trouble.
Under the prevailing “gold exchange standard” of international payments, the dollar has been generally accepted as a substitute for gold because the U.S. stands ready to buy or sell gold at $35 dollars an ounce. For seven years we have been mostly selling and out stock of gold, once $24.5 billion is now scarcely $15 billion. Monetary experts have shown mounting uneasiness about this system. They question its ability to support an expanding world trade or to surmount another crisis like the run on the pound last autumn.
The currencies that finance most of the world’s trade are the pound and the dollars. Unfortunately, Britain and the U.S. are themselves in chronic deficit in their own balance of payments, and the pound and the dollar are losing the confidence of the other industrial countries for this reason. De Gaulle even charges that the U.S., as the only manufacturer of dollars, can and does create capital “by what must be called inflations” and thus “indebts itself abroad at no cost.” He is in effect summoning all the hard-money men of Europe to declare their independence of the dollar.
Although most German, Dutch, Belgian and even French money experts do no share De Gaulle’s anti-Americanism, they do not like the behavior of the dollar either. “Seven successive years of deficit,” warns Raymond Aron, “end up by shaking confidence in any money, even the dollar.” Washington has known for months that it must take sterner measures to end these deficits.
President Johnson made a couple of choices regarding de Gaulle’s expressions. The one with the most public impact was to reduce the duty exemption on tourist purchases abroad. Whoopee! The one with the most business impact was to tax U.S. bank loan abroad. Whoopee again! He also urged banks and corporations to limit their “not essential” exports of capital. But while Johnson’s words were determined (“the dollar is, and will remain, as good as gold”), the measures proposed more hortatory than muscular. Conspicuous by its absence was any use of the most powerful corrective of all, the Federal Reserve’s influence on the total flow of dollars by way of bank reserve requirements and interest rates.
Johnson’s reluctance to use monetary policy stemmed from fear of dampening a domestic boom. The increase in money and credit that fed this boom fed Nixon’s choices in the 1970’s. The longer avoidance of “classical medicine” of tighter credit, the more complex and irritating become Johnson’s substitute half measures to end the dollar outflow – and the less persuasive to the European central bankers, whose good opinion one of the dollar’s major supports.
A financial editorial during the de Gaulle rant opined: “On the collaboration of these foreign bankers we must depend, not only to keep the present international monetary systems stable, but to work out the needed improvements in it which De Gaulle’s cries of “gold!” have overdramatized. De Gaulle himself has not the power to undermine the dollar or to sever its links with Europe. But the U.S. can, by paltering with its own balance of payments deficits, gravely weaken the dollar’s voice in its own future.”Now almost 48 years later can anyone opine what others will be reading 48 years from now about the dollar, gold and international monetary policy?
Been thinking about this 100 year old company, its future and my role as it voice, planner and day-to-day manager. What am I doing that is right? What am I doing that is not right? I want my phone to ring and the voice on the other end says,”I’m coming to see the mine and have a conversation about this company. I have all necessary to move your vision.”
I know this web site has more information than any one person can assimilate, but this imaginary phone call I hope to answer clearly said, “to move your vision.” Five years ago I was asked by a man who claimed the ability to move my vision but first I must write it down. So, I did and later posted it here. Only the spelling of one word changed today.
While the turf has changed over the past years for the Sixteen to One and the gold industry itself, the vision remains much in tact. The crew has improved the mine, our archives and knowledge. The price and interest in gold’s future has improved. I’m told that technology towards building a better mouse trap, er, gold detector, has advanced considerably. Maybe I should post the vision again (developed five years ago) and see if the investment climate has changed:
ORIGINAL SIXTEEN TO ONE MINE, INC.
WHAT’S IN ITS FUTURE
A VISION
The vision for Original Sixteen to One Mine, Inc. (the Company) includes America’s natural resources but focuses on the plentiful natural resources of California. While the vision may appear to be rather explicit or narrow, it includes gold and other mineral products, timber and water. It encompasses their exploitation, management, development and marketing for maximum yield. No other public reporting company incorporated in the United States shares this focus.
This vision includes the social aspects of natural resources and the desperate need to protect the cultural as well as the physical environment of our precious natural resources. The Company combines all social sciences as well as most physical sciences into an operational program. It is an enlightened business plan of operation. The Sixteen to One’s past reveals a necessary approach of maintaining long-term assets with the short term needs of producing revenue. Its present status is demonstrative proof that a small natural resource company can address the demands of natural resource exploitation in today’s overly aggressive pro environmental outlook.
The Company can become known as the model for future natural resource development in California and the United States. Its operations will challenge the erroneous myths and prejudices of well meaning activists who hinder the sensible exploitation of our natural wealth. These beliefs have turned the omnipresent demands for raw materials to natural resource production in other parts of the world, a dangerous reality.
A primary ingredient for our vision and subsequent model to expand is an infusion of working capital. There has been a noticeable lack of interest from Wall Street or private investors in forest and mineral production. The modest attention of the stock market towards America’s natural resource companies hurts future generations both in the United States and the world. Some patterns of investment are predictable. Investors’ interest in specific industries continues to move from one sector to another. The Gold Sector is abstruse, removed from the usual way of thinking and difficult to comprehend. The forest industry follows closely in its mystic.
A movement into natural resource ownership or participation is overdue. Unlike banking, savings and loan institutions, automobiles, real estate, airlines, pharmaceuticals, computers, utilities and practically every part of the complex mixture of America’s democratic capitalism, the natural resource companies are ignored. Perhaps one simple
answer is that resource companies believe they must stay under the radar to function in today’s hostile anti-mining/anti-logging mentality. Perhaps a more likely reason is the pure misunderstanding that potential investment capital has about these small but vital industries.The Company’s dream foresees an awakening of Americans to the realization that we need and will benefit from a return to domestic natural resource productivity. For almost fifty years America has been bombarded with media blame for past degradation to the environment. Some of the blame is justified. Many extraction and harvesting methods, however, are no longer practiced and cannot be assumed as what to expect from future operators.
American industries have learned from the past and clearly are the most environmentally sensitive operators in the world. This is one reason to bridge the ignorance gap of the population and our leaders. The “not-in-my-back-yard” position is a short-sided myth! Vital and necessary minerals and other resource products come from countries without the sensible regulations that have evolved in the United States over the past hundred years. The consequences of this are global.
Even though population growth and physical development exploded during the twentieth century, the world-changing roll of the United States has taken a more dramatic turn. A counter cultural shift emerged. America was considered the can-do country. Democratic and capitalistic social ideologies opened the doors for an expanding middle class, especially from workers identified as “blue collar”. Our natural resources were developed and accessible. What changed?
Somewhat reluctantly America became a world power and responsible leader. The blue-collar worker of today is losing economic ground as our society turns more and more to the service industries. But the need for manufacturing contemporary products in America remains; and in order to produce, industry requires raw materials. America has them in abundance. America also needs the backbone of its labor resources to insure our freedoms.
The time has come to broadcast how to exploit our inherited resources in the 21st century. Original Sixteen to One Mine, Inc., a US corporation, has all the pieces to lead this renaissance except one. That missing ingredient is explained in its Executive Summary. The oldest American mining corporation operating needs a grubstake to turn its dream into a reality.
Leave them alone and they’ll come home wagging their tales behind them.
July 25, 2007
The article below surprised me. Hope you find this bit of history interesting. Our Company purchased the Plumbago, which is a small Sixteen to One mine, not as many miles of working but an impressive production record. In 1937 three years had passed after the federal government took over the gold mining production industry. The long standing $20.67 price per ounce of gold increased to $35. The catch was that Americans were not allowed to own gold so the government bought the yellow metal. I was aware that the price increase also increased activity but a 50 man crew at the Plumbago is an admirable number.
STRIKE REPORTED AT PLUMBAGO MINE
Mine operated by Official of Hudson Motor Company
A gold strike of undetermined extent is reported, under good authority, to have been made recently at the Plumbago Mine in the Alleghany district. It is reported that the operators have been working on the present ore body for the last month. This property is one of the old producers of the district that is being reopened by the newly awakened interest in the industry and resultant influx of capital into Sierra County. A high official of the Hudson Motor Car Company is reported to be the active head of the financing structure behind the Plumbago operation. There is a 20-stamp mill and auxiliary equipment on the property but it is reported that only ten percent of the stamps are in service at the present. Nearly 50 men are reported to be employed at the Plumbago at the present time. During the past winter the mine employees were kept busy packing supplies in on their backs in order that the mine could continue to operate without interruption and in this management was successful, even during the worst of the severe weather.
The Mountain Messenger – Saturday, March 20, 1937
Archives are a great addition to any business. Thanks to Ray Wittkopp for sending me the letter below.
Some important distinctions in the following letter by Reno H. Sales are important distinctions that relate to the Sixteen to One mine today (67 years later). I will point some out for those of you craving a deeper look into one of the world’s great gold deposits, those who want to get to know the possibilities of our operation in Alleghany and everyone with an interest in mining throughout the world.
Mr. Sales earned the title of “Father of Mining Geology” as his systematic study of ore bodies became the standard practice for the industry. He was born in 1876 and died in 1969. Bill Fuller, company geologist from 1950’s to 2001, studied under Mr. Sales. Bill’s maps are priceless treasures that we continue to study.
Anaconda Copper Mining Co. June 27, 1944
Mr. R. S. Moehlman
29 E. First St., Rm. 216
Reno, NevadaDear Bob,
I am in receipt of a copy of your letter to Mr. Perry dated June 20, also a copy of your “on-the-run” Memorandum on the Nevada or Hogle Mine, situated in the Battle Mountain District, Nevada. That kind of report reminds me of “hit and run” Joralemon, and it is the very thing I am trying to get away from. The Hogle property is within a short distance of our Copper Canyon operation, and if there is one place in the United States where we need additional ore developments, it is in that area. We spent a lot of money on the Iron Canyon and on the Minnie in the hope that an additional property would bolster the Copper Canyon Project.In addition to “too mush digging – – – in this mining profession on half-baked geology”, there is too much on the run type of geological examination work being put forth as a basis for starting the aforesaid digging.
You spent a long time in the Battle Mountain area, during which period you become acquainted with nearly every prospect in that region and you formed definite ideas on general geology. Jim Wilson is a relatively new man in examination work, and we should not put it up to him to decide for us whether the Hogle property has future promise.
When you are given the opportunity of examining a property in the Battle Mountain area, especially one that is closed most of the time, you should make that the occasion of a most careful and thorough study of its possibilities.
In your introduction you say, “The mineralization was not studied in detail, after it became apparent that possibilities were not likely to be large enough to interest the Anaconda Company.” Your course of action and reasoning is opposite the one I usually use. I study the mineralization and geology first and then decide whether or not it has possibilities of interest to the Anaconda Company.
Yours very truly,
Reno H. SalesReno Sales embraced utilizing the scientific approach as his foundation for exercising geological approaches for everything he did. No exceptions, no short cuts and especially no sifting data to support a conclusion. Just as Joe Friday said in Dragnet, “Just give me the facts, mam, nothing but the facts”.
The first distinction that relates to the Sixteen to One is describing ore examination as “on-the-run”. While inquiries continue about the worth of our property and participation in advancing the Sixteen to One’s operation, I knew that an influx of capital for sinking a new shaft or exploration was needed years ago. No one has done more than an “on-the- run” look. As Reno wrote, this is not the manner to approach a mineral property.
Reno also makes the distinction between “on-the-run” and “hit and run”. I got into the gold mining business in 1975. Over the past decades I’ve read about too many mining ventures that were actually funded on “half-baked geology”. What a shame!
Today there seems to be an aversion to risk by well-heeled investors to go get some of the yellow stuff that has continued to be a solid asset for centuries. Reno Sales’s spirit is howling over the sloppiness in the execution by professional geologists, mining engineers and mining operators that has taken place in North America since the governmental shackles place upon the gold mining industry were removed in 1975. I’m not in the grave yet and my spirit is howling in either disgust or despair over these abuses.
Reno hits the bull’s eye and does not mince his words in calling out Joralemon or Moehloman: “Your course of action and reasoning is opposite the one I usually use. I study the mineralization and geology first and then decide whether or not it has possibilities of interest.” Reno, I’m glad to know you.
Some say I’m a blatant pack-rat when it comes to gold mining history, especially Alleghany and the Sixteen to One. No comment; however yesterday as I was arranging important stuff I saw an old California Mining Journal and wondered why it was here. One look at the index revealed the answer and now you can read an article that I do not remember about an interesting piece of the mine’s history. I encourage you to do so and click on NEWS for the title, “Closing the Original Sixteen to One Mine, Inc.”
I learn something new about this company and mine every day. The closing sentence strikes truthful today only “misguided governmental treatment of regulations” could substitute for the word, “economics”.
“But the present operation has been continuous since 1911 and a little more than half a century later the economics of the country, which has swung to soft currency instead of hard money, has brought a steady reliable contractor to the economy of the country and the state, the nation too, to its knees.” The EndI bought a rare periodical (published in 1922) years ago with a fascinating cover and found the story below written by John Hammond. Hammond was born in San Francisco on March 31,1855. He benefited from an education and training in science, engineering, philosophy, mining and technology. In 1880 he was chosen by the United States Government as special expert for the geological Survey to examine the gold fields of California. His report on the gold resources of his native State, made after the most thorough investigation, was the most comprehensive ever prepared up to that time and is one of the recorded government authorities. Please enjoy his story. John Hammond’s biography is one of the most interesting I have read, a complete surprise set with historical importance.
The Story of Gold
By: John Hays HammondThe preeminence of gold throughout all history, as a precious thing most desired by man, is not altogether easy of explanation. As a metal it is far less valuable to man than iron, coal, and a score of other substances of daily use. Yet its name had always stood for super-excellence. This high regard for gold is probably based, in part, upon a race memory of the time when it was the only metal known to mankind. Unlike other metal, which, as a rule, require some smelting or some other process of reduction to separate them from their ores, gold is abundantly found in an uncombined or “native” state, so that our ancestors found it lying free and may have made ornaments of it long before they discovered the use of fire. It was so soft as to be easily wrought while its beauty appeals even to the untutored savage.
Gold ornaments are found among the remains of the most ancient civilizations. Methods of producing gold are illustrated in Egyptian rock carvings as far back as 2500 B.C. Sheepskins used in the earliest times to catch particles of the precious metal wash from river sands probably gave rise to the story of Jason’s quest of the Golden Fleece.
Originally, gold and silver were weighed when serving the purpose of money, just as gold-dust is weighed today over the counter of the mining-camp trader, but gold coins were used some six or seven centuries before the beginning of the Christian era. In the Middle Ages, the superstitious reverence for gold assumed its most striking form in the fantastic doctrines of the alchemists.
Gold came to be regarded as the most perfect and “noble” of substances, and was mystically associated with the sun, as silver was with the moon. Comparatively little of the metal was produced by medieval miners, and it is estimated that the total stock of gold in the world at the end of the fifteenth century did not exceed a value of $225,000,000. Coming down to modern times, we find that gold plays a conspicuous role in human affairs, for reasons that can be clearly defined.
First of all, it is the best monetary standard thus far discovered, and organized society could hardly exist without money. Gold is suitable for use in making an immense variety of objects in which it is desired to combine beauty with utility, for the reason that it is extremely malleable and ductile, does not tarnish, and is not easily rusted or dissolved. Compounds of gold are used in photography and medicine.
Lastly, it was the lure of gold that opened up some of the richest agricultural and grazing lands of the world to settlement and development. The Pacific Coast of North America and the adjacent interior were believed to be almost devoid of valuable resources before the gold rush of 1849.
Speaking in the United States Senate a few years earlier, Daniel Webster said: “What do we want of that vast and worthless area – that region of savages, wild beasts, of deserts, of shifting sands and whirling winds, of dust, of cactus, and of prairie dogs? To what use could we ever hope to put these great desserts and those endless mountain ranges?”
Gold seekers populated the country and the transcontinental railways followed the trails that they had blazed. Today, California is one of the most productive agricultural regions of the earth, while the value of her manufactures is ten times the greatest value ever attained by her output of gold.
The story of gold in the United States began with the gold rush in 1849. California still leads all other States in the production of gold, though Nevada, celebrated for its Comstock Lode, is rich in silver as well as gold. Colorado, with its Cripple Creek and South Dakota, which possesses the most productive individual gold mine in the country, are close rivals.
An interesting fact in connection with the discovery of gold in California by Marshall in the year 1848, is that a discovery of it had been made three years before that date by Mexican miners in the San Fernando Canyon, not far from Los Angeles. These miners extracted from a “placer” there about $100,000 worth of gold before the deposit was exhausted. In 1880, while engaged in the examination of the gold miners of California, I met Marshall, who accompanied me to Coloma and pointed out the spot, as nearly as he could identify it, where he discovered his first nugget of gold. Out of some curiosity, I panned there and found a nugget weighing about fifty cents in value. This was the size of the first nugget Marshall had discovered.
No other metal is so ductile or so malleable as gold, an ounce of which can be drawn into a wire fifty miles long. It has been beaten into leaves 1/367,500 of an inch thick. Gold beating and various methods of gilding have made almost pure gold so commonplace a substance that we see it about us on all sides – on signs, picture frames, furniture, pottery, the binding and edges of books, and even spread over broad architectural surfaces such as the dome of the Library of Congress, in Washington.
Sacramento Business Journal writer, Mark Anderson, called today asking about a gold situation in California. He forwarded this article that appeared in the Journal almost seven years ago. It was interesting as I never saw it before. Check the spot price of gold back then.
Gold mine finds enough to dig itself out of hole
Drills out $600,000 worth
Sacramento Business Journal – by Celia Lamb, Staff Writer
Date: Sunday, August 1, 2004, 9:00pm PDTA small, struggling mining company in Sierra County says it hit pay dirt last week.
The Original Sixteen to One Mine Inc. drilled out between $600,000 and $700,000 worth of gold in about one week from its mine in the town of Alleghany, said company president Michael Meister Miller.
The company had started working in that section of its mine about one year ago but hadn’t turned up much. Miller said he was about to give up on that part of the mine and send workers out on another project when they hit the bonanza.
So far they have extracted 1,000 troy ounces of gold, and Miller thinks there’s more to come.It couldn’t come too soon for the company, which has been bogged down in the last couple of years by regulatory and legal hurdles, high power costs, high workers’ compensation costs, and legal problems that followed the death of a miner.
“We were down and out,” Miller said. “We were practically down on our knees.”
Sells to Alaskan tourists: Original Sixteen to One mine is a traditional underground hard-rock mine that has produced more than 1 million ounces since 1896. It’s been about two years since the company found a bonanza as big as last week’s, Miller said. Back then gold prices were lower, so it wasn’t worth as much.
Gold was selling for $385 to $390 per ounce this week. That’s down from this year’s peak of $427.25 on April 1 but much higher than prices from 1997 to 2002.
The company principally sells jewelry-grade gold and gold-laced quartz, which has been selling for about $2,500 per ounce, Miller said. It’s sold mostly to manufacturers who make jewelry for the tourist trade in Alaska, he said.
“The gold mining industry is certainly in decline in California, so it’s good news if they’ve hit some gold,” said state Department of Conservation spokesman Don Drysdale.Death landed company in court: The last few years have been difficult for Original Sixteen to One. In 2000 the company brought in an annual profit for the first time since 1995, despite the bear market for gold. But the good financial news was overshadowed by the death of miner Mark Fussell, who hit his head on a protruding ore chute as he rode a locomotive.
The federal Mine Safety and Health Administration fined the company $19,000 following the accident, and the company has appealed the penalty to the 9th U.S. Circuit Court of Appeals. The company and Miller also faced criminal charges related to the death in 2002, but a Sierra County Superior Court judge dismissed the case last year.
“It was very, very damaging to the company,” Miller said. “My hands were tied to raise money and it was very, very emotionally distressing.”
The company has sued the prosecuting attorneys in Sierra County Superior Court for $24 million, charging malicious prosecution and disruption of business advantage.
Miners get 30 percent of what they find: The company once employed 14 miners, but now it hires workers only on contract working for a 30 percent share of what they produce. A crew of nine works the mine now. The three miners who uncovered the recent find have each received $40,000 so far, Miller said.The company plans to use the proceeds to pay delinquent power and accounting bills and reduce its debt, which totals more than $400,000.
Because the company could not afford to pay an accountant for the past three years, its financial statements are unaudited and the company is in violation of Securities and Exchange Commission regulations, Miller said.
The company tracks sales of its stock on its Web site under the symbol OAU. The last recorded sale was 75 cents on July 22.Miller defended the company’s stock price, saying the firm is in business for the long haul.
“The plans of this organization are not to hype the stock, sell our shares for $5 or $6 and go to the Bahamas and sit on the beach,” he said.
Eventually the company hopes to raise $6 million and drill a new shaft, Miller said.Less than a penny per share: Original Sixteen to One earned $81,917 in the first quarter, which ended March 31, according to unaudited financial statements. That equaled less than 1 cent for each of the nearly 12.9 million shares outstanding, but it was up from a loss of $13,297 a year earlier.
First-quarter gold and jewelry sales of $246,285 were up 108 percent from the first quarter of 2003.
The company lost $80,000 on sales of $329,743 in 2003, compared to a loss of $280,085 on sales of $455,506 in 2002.Original Sixteen to One is the closest productive underground hard rock gold mine to Sacramento.
Recently this letter found its way to our office bundled with other correspondences about selling the mine Our Company bought the Rainbow Mine on May 4, 1943, which has been on its wish list for exploration for decades. Our mining ancestors ran the 1500-foot level towards the rich vein in the 1950’s but never pushed the project to actually intersect the Rainbow workings. Now our efforts are northward, away from this old mine to the south. Maybe we should offer this proven and valuable gold mine for lease or joint venture and give someone else the opportunity to prosper in this bull gold market.
This is an important historical letter. A glossary of names will help the reader: Stewart M. Marshall director and president of Alleghany-Rainbow Mines Company (incorporated July 23,1937); Bennett (C.A. Bennett) was head management in Alleghany for many years; Mr. Maxfield was president; Duke owned the Gold Crown/Wonder mines, which we bought in 2005; C.C. Cushwa managed the Spring Hill mines in Grass Valley; Bortner was a miner living in Alleghany.October 22, 1942 Mr.Stewart M. Marshall
San Francisco, Calif. Rainbow Claims and Equipment
Dear Sir:-
As you were advised that I intended, Briggs and I went to Alleghany yesterday and visited the Rainbow in a hasty attempt to cover all the matters mentioned in letter of October 17.
I talked at length with Bennett, of the 16 to 1 mine, about the land and about the equipment on the property. Bennett would be interested if he were not faced with the shutdown order, but he says he is not at all sure that the 16 to 1 will be able to weather the blast of shutdown and, like most people directly affected by the order, he doubts whether or not there will be an American left after the war is ended. I believe this last is an unduly pessimistic outlook, and that Bennett is not as much worried as he is irritated.
Bennett would have been decidedly interested a few weeks ago, and I believe there is a chance he can now be interested, on the basis of a deferred payment settlement, which may or may not interest you. I asked if he would object to our approaching Mr. Maxfield, which he denied, but he did state that it would probably be impossible to interest Maxfield without his (Bennett’s) approval.
I asked several men in Alleghany about Duke’s reputation, and find it very dubious. One man said that a charitable statement about Duke would be that he is crazy: Bennett advised against any dealings unless cash is paid on the nail: Bortner has worked for Duke, and has a bad report about the man’s misinterpretations. It seems that Duke has repeatedly involved you and the Rainbow Company in his own fanciful operations in the Alleghany district. He is entirely insolvent. Also, according to Bortner, he claims title to some land owned by the Rainbow Company.
Regarding the old house on the top of the hill, now occupied by an elderly woman, a pensioner on the State Relief rolls: this place is a cross between a garage and a barn, with the barn having the best of argument. The sole feature of the building which is of any value as salvage is a corrugated iron roof, worth about $25.00 at going prices for used corrugated roofing. It might conceivably be valuable as a storeroom so Alpha or some other merchant interested in futures, but right now, when there are 45 empty houses in town, its immediate value is pretty close to nothing. Mrs. Devon, the lady who inhabits the place, was not available during my visit, but she is reliably reported as drawing a state pension (Old Age), and was forced to move away from her son-in-law’s house in order to retain the pension, as the state threatened to withhold the $40.00 pension if she continued with her daughter. This is why you can now rent the house to her. The $7.50 rental is simple, and the place is not worth wrecking. Polglase, the storekeeper in Alleghany, asked for a minimum price, and said he would try to find a buyer. I also asked Dortner to develop a sale idea if possible.
The equipment at the mine, while in good order, is old-style machinery. The two compressors are about 12” bore by 12 inch stroke, single stage machines, no unloaders discoverable on either machine, and the valves on both are pro-plate-valve types. They are entirely serviceable of their kind, but are very heavy. They are driven by old motors, one of which, rated at 50 HP, a very old General Electric squirrel cage motor, weighs about two tons and will probably stand a 150 HP load for an indefinite period without undue temperature rise. The 75 HP motor, driving the Ingersoll-Rand compressor, is about the same size as modern motors of the same HP and RPM: the GE motor is 720 RPM, unless I made a mistake, while the Westinghouse motor is a 900 speed. The old sharpener is an IR 50, and is heavy and obsolete, and will not pay the cost of moving to the highway. The smaller motors, rock drills, steel, saw frame, pump, while not the newest types, are still serviceable equipment and may be worth hoisting to the highway. The rails are badly rusted, but there is a total of about 8000 linear feet of 12 pound rail, or say 15 tons; Pockmann says he can pay about $30.00 per long ton for this sort of rail, if straight and free from surface bends. Some of the rail is badly corroded that it will not be useful. However, after we get the rail to the highway, it will still cost about $8.00 per ton to haul it Sacramento. The mine cars can be forgotten as valueless. The pipe leading into the mine in 3” casing pipe, badly corroded or rusted, and is worthless. There is a large supply of iron and steel, but it is not worth taking out.
Aside from the motors, the control equipment is first class, although several years old, and is just as good as new for practical purposes. There are two small dry lighting transformers, of an old type and irregular make, but serviceable. The 3-year-old transformers in the substation are very heavy for 40 KVA units, each containing 100 gallons of transil oil for insulation, with fins for cooling same: they may be salable, as I have had an inquiry recently about 6600-440-220 transformers. Bortner said these were the property of the Rainbow Company; PG & E has recently installed some modern 10 KVA’s and disconnected the older large machines. These transformers are not listed in your statement of the Rainbow equipment, and may not be Rainbow property. I presume that the power line in the property of PG & E. The wires leading underground are worthless except as scrap copper.
Getting this material out of the canyon will be a costly slow job. Biggs estimates the cost at $400 to $500. It will be necessary to set up some kind of power for the hoist, as the old gas engine is worn out, and is probably too weak for raising materials out of the bottom. Bennett offered use of a 15 HP hoist which he is not using; we have here at Spring Hill the old winze hoist. I thought of using a tractor for the hoist, but there is no level space long enough for the run. The standing cable on the old towers is so badly rusted and burred that it looks like a porcupine; we can test it with a load of rails, or with a chain block, before using. Biggs thinks we shall have to string a new standing (carrier) cable on the towers; this would mean moving the 7/8” hoisting ropes (bought with the 700 winze hoist from the Empress mine) to Alleghany, setting same up, and then recovering it. The old winch used for lowering supplies to the bottom of the canyon looks pretty flimsy; is there one in your office or elsewhere who knows what was used to lower the heavy machines to the bottom? In order to supply electric power for the hoist, we should have to string a cable or wires from the Rainbow to the point where the hoist would be set.
It would obviously be far better to sell the machinery in place than to incur the heavy expense of salvaging the stuff, unless we have a market for the machines before we start. I fear that the cost will be higher than the $500.00 figure. Polglase offers the use of the tractor he has at the rate of $3.50 per hour, including operator; the machine is badly worn. If the tractor is idle for extended periods, the charge will be dropped off. However, we should have to pay the operator’s wages, although he could be available for other work. You realize that a tractor would be necessary to handle the equipment from the head of the tram to the road.
I have not yet had a chance to see the other persons I hoped to ask about the machinery or land, but shall try to do so during the week. Lashbaugh, who was formerly interested in the Seven Aces mine, came in this afternoon about a Cobalt property, and I asked him if the Seven Acres would be interested. Lashbaugh has lost his interest in the Seven Acre property, but said that one Brinker, in San Francisco, might be tried. This suggestion was also made by U. S. N. Johnson, owner of the local Bret Harte Dairy. Incidentally, Lashbaugh says he has an option on a cobalt deposit from which analyses running as high as 8% cobalt have been made by Smith-Emery on samples. It may be worthwhile to look up the office in the Bay district of the Seven Acres mine, if there is one.
It might be desirable, in case we do remove the machinery and are unable to sell it, to store the equipment in the house at the head of the trail. The small motors and lighter materials could be brought to Spring Hill, and the heavy machines left at Alleghany.
Sincerely,
C.C. CushwaJust a reminder: if you have never listened to east Texas Mike voice his opinion it is well worth the experience.
Mike is interviewed each Sunday night on http://www.krld.com by Charley Jones at about 10.06 P.M. Pacific time.
Pod broadcasts of previous Sundays night conversations with Mike is available on demand.
Look under “news” for a recent article about Rita.
Her is another, “I wonder if” about Rita Hosking. While refiling and organizing our Sixteen to One maps, I noticed (for the first time) the name Hosking Raise. It was in the early days in the upper workings and south of the Sixteen to One shaft. I was not familiar with the Hosking name (or a Hosking who worker as a miner) until Rita hit the KVMR FM radio.
Thinking of names in the past, does anyone know of an off spring of Tom Bradbury? Tom, the founder of the Sixteen to One vein in 1896, is buried in the Alleghany cemetery. I wish to honor his mining prowess with a large white quartz rock that was brought to our office from deep underground. Is it necessary to get approval from an ancestor before extending this honor to him?
Martin…are you linked into FaceBook? This is a great question for Rita on that forum. I know she comes from a mining background.
I wonder if the Hosking fam.
mentioned had relatives in Yuba
and Sutter Counties?Well, good things happen to those of us who have faith and perseverence!
Facebook just announced Rita and Sean’s release of the CD recorded live underground in the Original Sixteen to One Mine and they all instantly sold out.
Check Rita Hosking on FB. HUGE NEWS from both the creative front and the underground workings!!!
The following letters (exchanged 22 years ago) between Bill Fuller and me have as great or greater relevance today. Our efforts to complete the maintenance of the 1000 foot level into the Red Star are only months away. Mining here has been my primary gold target since 1975. I was able to study the maps and records from three different operators. It is a hot area!
History will record Bill Fuller as one of the most competent geologist in the Alleghany Mining District. His knowledge and experiences go way beyond his academic training. He was our company geologist as well as the geologist for the Oriental Mine. He transcends other great men who worked in Alleghany: Henry G. Ferguson, Roger W. Gannet and H.R. Cooke. (See “NEWS” 12-31-2009 on Forum for more).
I hope you gain some insight into Alleghany, the pursuit of gold and our operation. Study them if interested. When the crew’s drill spits out golden corn flakes, I plan to raise a glass in memory of Willard P. Fuller, Jr.
Willard P. Fuller, Jr.
Mining GeologistSan Andreas, CA. 95249
July 17, 1988
Dear Mike:I feel that I should reply personally to your memorandum of July 14th to the Directors.
As to the Company’s goals and policies, I have been on the board only for a short time, and I am not all sure what they are, not having participated in most of the discussions to which to refer.
You state that “Our goal is to produce gold at a profit in order to pay a dividend”, and “Our policy is to protect and enhance the assets of the company…” I agree with the policy statement, but wonder just what the goals are.
I would think that one of our primary goals would be to reinstate dividends. This can only be done by achieving a net profit. So how do we do this?
You suggest that we should try to do this by gold mining on company account, and you project an average annual production of 10,000 ounces for some fifteen years or more. I would like to point out from flaws in your “scenario.” A level of 10,000 or better was consistently obtained by the old company for many years, and I assume that you are using this performance for the basis of projection. So did Royal Gold for the Kanaka lease! This rate of production was maintained in a smoothly operating mine with a highly experienced staff and crew, in a mine that was well developed and which contained no reserves, as such, but a number of blocks of ground with known “prospects” and the promise of production
The Red Star South Block still contains some possibilities of production, but I think that the total that might reasonably be expected above the 1500 level would be within the range of 1000 to 5000 ounces. I note that last January you were hopeful of achieving 500 ounces or more by mid-1989, which I agreed was quite reasonable. In my letter to you of 12-21-87, I asked if you knew what the old company’s production from Oct. 1 to Dec.9, 1965 from the Red Star. Could you find this figure from the old records? That part of the block below the 1500 level is entirely undeveloped, but based on what has been mined above, we might project something in the same range as above the level. That is, the Red Star South might contain a mineable total of 2000 to 10,000 ounces. To project a larger production seems to me to be very risky and unsupportable.
The Red Star North has probably had a production of about 4000 ounces. Certainly some more production can reasonably be expected there, but how do you make realistic projections? I generally use a factor of one times the past production. In view of the large amount of underdeveloped ground, we might increase this by a factor of two. Say 4000 to 8000 ounces.
So we have a total of 6000 to 18,000 ounces of possible production, under realistic expectations, in the combined Red Star block. The Red Star South production can’t be fully brought in until completion of the rehabilitation work and the extension of the Red Star winze to the 1500 level and below. We are now in a better position to estimate how much money will be needed for this. The Red Star North production is contingent upon a substantial amount of drifting, raising and winzing. So there is still a lot of “dead” or unproductive work to be done.
Getting back to your production of 10,000 ounces per year for some fifteen years or more, I don’t think you have any support for such a statement other than what I have outline above. I am not saying that there are no other possibilities of production in the Red Star, and I fully recognize that Forest and the present Kanaka lease, as well as the Red Star, contained “untapped” resources. But we have to very realistic in this business. I also call your attention to the fact that I have given you a “range”. The lower end of the range is just as realistic as the higher end, so please don’t quote me as saying just the higher projection.
As to my opinion of your own capabilities and those of your crew in running a mine, I am not so optimistic as you seem to be. In fact, when comparing these with the old Original’s organization, in would say that the present organization is very limited in capability, and I have serious questions as to its ability to effectively carry out the overall program you propose. However, I would like to reserve final judgment until after the present phase (PP budget) is completed. Up to now, I feel that the work has proceeded slower than it should have, even with the serious problems you have encountered. Remember, you have not yet operated a producing gold mine, and there is lots to be known about such an operation. Mining is a highly complicated business.
I am a little unhappy about your comments and suggestions about raising more money by selling stock (publicly or by private placement) based upon future projections such as you have used. I am afraid I will be of no help in that connection other than referring you to some of the mining companies active in gold.
Personally, I think the ultimate salvation of the Original Sixteen to One lies in letting other operators take the risk. Just take a good look at the Kanaka lease and the results being obtained. We, on the other hand, have a sure income while they are loosing money. We should keep our own company operation very small, and if we cannot achieve production with the present budget plus very limited company funds, we should close our operation down and consider leasing out the Red Star block.
If you wish to discuss any of the above in more detail, I will be most happy to do so. Just give me a call. See you on the 5th.
Best regards,
Bill~xxXxx~
July 25th, 1988
Dear Bill,
Thank you for the prompt reply to my letter of July 14th. It was meant to stimulate a response from directors and to inform them about the degree of assistance each director could offer with our proposed second phase of funding.
I have always been reluctant to project any gold production in Alleghany. It is a very risky business. The Company settled on an annual production of 20,000+ ounces in past years. I have no way of knowing management’s desire; however production in the fourth quarter was usually higher than other quarters. I have been told that annual production was managed and reflected in the higher year-end figures to meet the desired amount.
In my last letter I separated projections and goals. Their uses are not interchangeable. The only projection I made was at the top of the page three regarding annual income from KCJV between $120-200,000. The citing of gold production, income and dividends are goals established to quantify the scale of operation envisioned. These figures, in turn, help me work capital needs forwards and backwards thereby arriving at a comfortable plan.
My goal is to return the Company to “a smoothly operating mine with a highly experienced staff and crew in a mine that was well developed” with blocks of ground that promise production. That is why we are bullish on extending Red Star North all the way to Forest. That is a goal.
Please do no continue to be unhappy about suggesting to raise money “based on future projections such as you have used” (Page 2 of your letter to me). I never contemplated selling any stock on these or any other projections because (1) Use of projections is not allowed in security regulations. (2) My discussion of production levels is tied into goals not projections. After fourteen years of active work in Alleghany I understand the limits of using gold productions in forecasting gold projections. Goals are different. Without goals the Company drifts.
Your final paragraphs indicate we have a policy difference. I know of a number of small companies (like Original Sixteen to One) with less promise who find themselves functioning as a lessor. We have moved into the arena of operator and primary gold producer. The interest in our Company has increased because of this. It is not because we have a “safe” passive income, but because we are advancing our operations that the Pacific Stock Exchange approved our listing. The Exchange Listing Committee reviewed Original Sixteen to One in depth before approving our application. We failed to meet any of the requirements and standards and failed by a large margin. Nevertheless, we were accepted. All of our shareholders have been aware of and support the goal of public trading. This opportunity would have been denied if we maintained or increased our position as mine lessor.
I have worked with lessors since 1976. While the quality has improved it remains a vulnerable relationship. Financially, the added risks of operator seem worth the greater potential rewards. Other mining companies such as Ranchers, Hecla, Norsemont, Alhambra, Transwestern and Brush Creek have failed to become producers in Western Sierra County. Countless mining men have spent money and failed individually. I have benefited from observing these operations.
As far as my capabilities and those of the crew, we are still in the embryonic stage of development. I am learning all the time on how to be a competent President. There is no doubt we are limited. We have an operation up and running for under half a million dollars. Nevertheless, what we have accomplished must be positive for all shareholders because the greatest business judge of all, the market place, has treated us well.
You offer a recommendation to close our operation down and consider leasing out the Red Star block if we cannot achieve production with the present budget. We never anticipated getting into production with the PPM money. We raised enough to advance our knowledge about the property with no cushion because the stock was undervalued at $1.30 per share (pre split price). Successfully completing the business plan of the PPM has nothing to do with gold production as a qualifier.
You prepared a range of production for the Red Star. Let’s use the lowest range or 6,000 ounces and a price of $450 per ounce … $2.7 million. If we can drift, raise and stope Red Star north and mine only above the 1500 level we may produce 5,000 ounces (I subtracted 1,000 ounces below the 1500 level). We can break up this ground for $900,000 creating a gross profit of $1,350,000 or about $.50 per share. The risk is we produce nothing. The carrot is we may produce 13,000 ounces at the same cost or about $5 million gross profit ($1.80 per share).
Old shareholders have supplied the company no money yet may receive a $.50 dividend. New shareholders (PPM at $1.30 per share) may get their entire investment back as a dividend. In either case, everyone will have a market place (Pacific Stock Exchange) to sell his stock. This scenario is not offered as a projection. All of the above depends upon funding and carrying out a $900,000 – $1.5 million Phase Two development program. I maintain that the risk of dilution to existing shareholders is worth the reward of profitability. We should immediately put in place a plan for raising money with the following goals:
1. The highest price per share possible
2. The shortest duration of time
3. The last possible moment before we must interrupt our current operation.To achieve these goals I need the very best brainpower from not only our board but also businessmen and women in other fields. I want our meeting in August to focus on plans to accomplish our goals of producing gold at a profit in order to pay dividends outlined in my July 14, 1988 letter to the directors.
I will call you before the meeting so we can continue the discussion we have undertaken.
Sincerely yours,
Michael M. MillerJames Rolph
27th Governor, Republican
(1931-1934)I say Governor( Moonbeam )Jerry Brown….
Many thanks for both your efforts. Dick, you got it right. Smithsgold, I wish Jerry had said this. He is familiar with Alleghany, but I’m not sure how he would express the benefits of mining in California. More on that later.
The governor’s message below was printed in the first issue of the California Mining Journal (VOL I NO. I). The cover of this great publication, printed in August 1931, has a picture of an old geyser with a mule and gold pan. It also features Nevada and Sierra County Mines.
The story, authored by Harry S. Tibbey, reads, “The Original Sixteen to One mine at Alleghany is undoubtedly the richest mine ever found in California, or anywhere else for that matter, and millions have been extracted in the comparatively short time it has been worked.” To my knowledge this affirmation still hold true seventy-nine years later.
Back to Governor Jerry Brown. During his time in office legislation was passed and signed that instructed the government to catalog all mineral property and potential mineral land in California. Its purpose was to insure that development did not threaten these valuable assets. Gold was decided to be of benefit to the people of the state of California. Thirty-four years later that benefit remains. Unfortunately, the government failed to exercise its duty to the people it represents.
The following is a message from California’s governor. Can you identify which governor or when it was published? What a great message!
“May I confess that, while I have never engaged in mining, that earliest and most picturesque of California industries has always had a strong appeal to my imagination. One of my urgent ambitions as governor is to accomplish something in the way of stimulating and reviving that languishing industry. I would like to see the entire mother lode and all the mining regions humming with activity. Legislation, of course, cannot put gold into the ground. But I shall be responsive to all sound suggestions for the benefit of the mining industry and the mountain counties.
The gold in California’s streambeds and mountains was responsible for her birth both economically and politically as a member of the family of states. California’s gold was an important factor in sustaining the federal finances and credit during the stress of the Civil War in the 1860’s; and in spite of recession in annual yield in recent years, this commonwealth is still one of the leading states in production of the yellow metal. The decreased production of new gold is due to the nation-wide and world-wide economic conditions over which the gold miner himself had no control; and because the price of his product is a basis of our (and other nations’) monetary system, the gold miner is entitled to special consideration at the hands of our law-making bodies both of the state and nation to the end that whatever statutory or taxation burdens are now hampering the flow of new gold from out of the ground may be either eliminated entirely or at least ameliorated to the maximum degree. California should be in the forefront of the movement to help. We need more gold. In the United States today we are consuming in the arts and industries more than twice as much gold as we are taking out of our mines each year. Unless something is done to help, it is conceivable that the foundation of the financial system with sooner of later be affected.
But gold is not California’s only bid for fame and attention. This state is prolific in available minerals of commercial value, and the diversity of her products is not approached by any other commonwealth. Mining in California marches alongside of and goes hand-in-hand with agriculture, as one of the great basic industries upon which our people depend. Our wealth in structural and other industrial mineral raw material is widespread throughout California and in great variety, and if properly fostered and adequately supported by governmental promotion, will continue to grow in importance and will continue to support an ever-increasing industrial population in this state.”
This a very important agency of the past: the O.M.E and should be reinstated. It sounds like a government organization needed again for the development of strategic metals relative to our national security. We have a national reserve for oil, but gold is too needed to be expanded in a national reserve.
There has been some reports about how the Bullion reserves of Canada are being depleted. It makes me wonder our own Nations Reserve.- AuthorPosts
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