ITEM 1: BUSINESS
Description of Business
Original Sixteen to One Mine, Inc. (the Company) mines gold on properties it owns in fee simple or on which it has claims, in the Alleghany Mining District, about 65 miles northeast of the intersection of I-80 and California State Route 49.
The primary operation is the Sixteen to One mine from which more than 1,111,069 troy ounces of gold have been retrieved since the mine commenced operation in 1896. The Company began doing business in its present form in 1911 and has operated continuously since. It is a traditional hard rock underground mine where miners create horizontal levels at various elevations and raise into favorable areas. The geology of the mineral deposit is well documented. Current activities are focused on the 1,100 foot level. Crews of miners average about five linear feet of progress per day. Gold is not distributed evenly within the quartz veins; however, concentrations of gold deposits are found scattered within these quartz veins. Because the gold appears intermittently, the Company has never declared reserves according to contemporary industry standards.
Operations are characterized by significant amounts of preparation, tunneling, underground property maintenance and upgrading, all of which are necessary to permit access to and extraction of the gold. The Company from time to time focuses substantially all of its resources on infrastructure development and maintenance, and during these periods, little gold is mined. At other times, miners are primarily searching for gold. Accordingly, business is subjected to two very different cycles, one dependent on whether the Company is directing its resources towards infrastructure or underground development and the other as a function of gold production. The operation resembles the classical "boom or bust" cycles regardless of outside influences.
Metal detection technology enables miners to detect gold from 20 to 48 inches from quartz faces in the wall rock. (The size of the concentration is a factor). Miners work with other companies interested in developing new technologies for deeper penetration. These arrangements allow the Company to benefit from research activities without incurring the full costs associated with research and development.
Advancement in metal detection technology has steadily progressed over the past ten years. Greater sensitivity in metal detection has historically increased gold production throughout the mine. Since the Company lacks the funds to carry forth scientific research, it is impossible to predict when a new device will be developed; however, the hardware used in advanced gold detection has continued to improve. Also the same physics principles are used in governmental programs for Directed Energy Weapons, which may stimulate research and development.
For accounting purposes gold revenues are accrued when the metal has been recovered. For tax purposes revenues are not recognized until the gold is sold. Rare highgrade gold and quartz is sold at a premium to museums, collectors and jewelry manufacturers. This market has become a significant financial factor since its beginning in 1993. Demand for the Sixteen to One gemstone is currently greater than the amount mined.
The Company lacks sufficient funds to implement major construction projects to significantly increase production of gold. Sinking of a new shaft in the center of the mine is one project. The company has plans to raise working capital for this project. No extraordinary working capital requirements exist to maintain the current level of operation. Nor is there a dependency on any particular customer, as gold bullion has multiple markets. Business generally reflects the efficiency and timeliness in which gold is located rather than the international spot bullion price. Future development and testing of advanced metal detection will likely increase the production of gold.
Supplies and equipment used for underground exploration are commonly available. Labor requirements are available. The Company believes that within the Sixteen to One mine substantial numbers of attractive exploration opportunities are accessible.
In 1994, following a long-standing practice of acquiring inactive productive mines, the Company purchased the Brown Bear mine in Trinity County, located outside Lewiston, California. The property, 540 timbered and patented acres and twenty-two unpatented claims, has yielded 500,000 troy ounces of gold. The mine is underground, yet no excavation exists below the tunnel entrance (adit level). During the 1980's the property was extensively core drilled by Santa Fe Mineral. These results indicate that within the Brown Bear mine attractive exploration opportunities exist. When funding is available, one specific target has been selected for exploration and development. In 1999, the Company acquired the Plumbago mine in the Alleghany Mining District, which is located approximately two miles southeast of the Sixteen to One mine. The property includes a twenty acre patented claim, mineral rights to eight patented claims and sixteen unpatented claims. The property has a history of rich gold production. The Company will pursue the potential within this property when funding becomes available for exploration and development.
No particular seasonality exists for the marketing of gold (other than the Company's gold jewelry sales for which some modest bias toward the fourth quarter is recorded). Business is not seasonal except for the generally modest effect of winter storms on the ability of the miners to access the mine. Management believes it is in substantial compliance with all applicable federal, state and local laws and regulations relating to the environment. The Company does not presently anticipate any material capital expenditures for environmental control facilities, either for the remainder of its current fiscal year or for the succeeding fiscal year.
The Company is a California corporation formed October 11, 1911. On December 31, 2004, it had three full-time employees plus one permanent part-time employee and ten contract miners working underground. The Company's executive office is located at 527 Miners Street, Alleghany, California 95910. The Company's phone number is (530) 287-3223. The Internet address is: www.origsix.com.
Risk Factors
(a) Price of Gold
The price of gold has increased significantly from the low of $254 in 1999. Any significant drop in the price of gold may have a materially adverse effect on the results of the Company's operations unless the Company is able to offset such a price drop by increasing production or jewelry sales.
(b) Lack of Proven Reserves
Because proven reserves are not utilized as a component for evaluating future earnings or ore values, a sense of uncertainty of existence arises. Caution is recommended in using the doctrines of reserves as an economic tool for valuing the Sixteen to One mine. While (i) the Company has recovered over one million ounces of gold and (ii) management believes that substantial additional virgin veins exists in the Sixteen to One mine, the Company has no ability to measure or prove its belief that a greater amount of gold remains in the approximately eighty percent (80%) of its unmined vein system.
(c) Governmental Regulation
The financial statements for the years 2003 and 2004 have not been audited by a Securities Exchange Commission (SEC) accounting firm due to the existence of an unpaid bill. Therefore, the Company is not in compliance with SEC regulations.
Mining is generally subject to regulation by state and federal authorities. State and federal statutes regulate environmental quality, safety, exploration procedures, reclamation, employees health and safety, use of explosives, air quality standards, pollution of stream and fresh water sources, noxious odors, noise, dust, and other environmental protection controls as well as the rights of adjoining property owners. Laws may change preventing or delaying the commencement or continuance of given operations. Questionable interpretation of and implementation of regulations have become significant threats to the natural resource industry.
The Company is in compliance with all known safety and environmental standards and regulations. There can be no assurance that future changes in the laws, regulations or reckless interpretations thereof will not have a material adverse effect. The company is emerging from six years of extreme and questionable executions of laws and regulations by state and federal government agencies and others. If these practices were allowed to continue unabated, they would substantially depress the value of the company.
(d) Liquidity
Gold inventory at December 31, 2004, was $942,796, primarily as specimens or gold held for jewelry. While history of actual cash sales supports inventory exceeding the spot price, no such increases are used to compute the inventory. The difference in the recorded value and the actual cash value is a significant factor in determining asset value but cannot be included on the balance sheet due to accounting rules. Periodic shortfalls in liquidity occur which are not likely to be bridged by institutional debt financing. Management addresses these issues as they arise. All inventory of raw material is recorded at spot price per troy ounce. In addition, contract manufacturing costs of jewelry are included in the finished jewelry inventory.
(e) Price of Stock
Bids and offers are publicly recorded on the stock page of the Company's web site. Exposure is limited. The price of stock may not accurately reflect its fair market value because of the limited market place. The company maintains no program to support or promote its stock and is unlikely to conduct a program until a public market place is secured.
ITEM 2:
ITEM 2: PROPERTIES
Properties
The Sixteen to One mine was incorporated into Original Sixteen to One Mine, Inc. in 1911. Properties acquired prior to 1925 are carried on the Company's books at their original purchase price and are fully amortized through depletion. The Company acquired additional mining properties for $405,517. No depletion has been applied to those properties.
In 1991, the Company purchased leasehold interests and a mill permitted for 200 tons per day, which it upgraded in 1996. The mine is accessed by a road owned and maintained by the Company. The mouth of the mine is approximately one-half mile from a county road.
The Alleghany properties consist of 25 patented claims (452 acres) and an additional 69 unpatented claims and 160 acres of mineral rights on patented claims. In 1994, the Company purchased the Brown Bear Mine in the French Gulch Mining District, consisting of 34 patented claims (540 acres) 22 unpatented claims (440 acres). The following table sets forth further information with respect to the Company's mining claims.
ALLEGHANY DISTRICT:
PATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Belmont Rainbow Fraction Number Three Twenty-One Eclipse Quartz Eclipse Extension Tightner Extension Contract Alene Valentine Red Star Bartlett Farnham Gold Quartz Mine Belmont #2 Contract Extension Hanley Quartz Mine Noble Sixteen to One Groves Gold Quartz Mine Denver Happy Jack Extension Ophir Rainbow Extension Happy Jack Marion Lode
UNPATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
La Jard Lode Tightner No. 4 Lode Tagalog Lode Bald Mountain Placer #2 Tightner # 5 Lode Cumberland Lode Oversight Lode Tightner No. 6 Lode Aurora Lode Tightner No. 1 Lode East Bartlett Lode Copeland Two Lode Tightner No. 2 Lode Red Star Ext Placer Antique Lode Tightner No. 3 Lode Buckeye Placer Bullion Lode Alene Ext Lode Amethyst Lode Lava #1 Lode Bartlett Ext Lode Amethyst Ext Lode Lava #2 Lode Illocano Lode Mabel Lode Lava #3 Lode Bal Lode Margaret Lode Alling One Lode Verde Lode Phoebe Lode Alling Two Lode Butterfly Lode Blue Jay Lode Lady Bug Lode North Star Lode Triple M Lode South Fork Placer Honey Bee Lode Mayflower Lode Copeland One Lode Bald Mountain Placer Parkman Placer Oregon Creek Placer Apache Patriot Patriot Extension Tomahawk Thunderbolt Bradley Hercules Hercules Extension
MINERAL RIGHTS - PATENTED CLAIMS
NAME OF CLAIM NAME OF CLAIM
Standard Lode Standard Lode Extension Gold Beater Lode Clute Lode Hope Extension Lode Crafts Lode Plumbago Mine Mill Site Enterprise Quartz
MINERAL RIGHTS - UNPATENTED CLAIMS
NAME OF CLAIM NAME OF CLAIM
Rattlesnake Quartz Eclipse Eclipse Extension White Oak Dog Wood Highview Lucky Cross Aetna Marion Extension Vaughn #1 Harold #1 Vaughn #2 Harold #2 Reliance Fighting Bob Plumbago
FRENCH GULCH DISTRICT:
PATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Dreadnaught Quartz Lode Coon Dog Quartz Lode North Fork Quartz Lode Madison Quartz Lode North Fork No. 2 Quartz Mine Martin Quartz Lode Gem Quartz Lode Brown Bear Ext. Qtz. Lode Slide Quartz Lode Red Diamond Quartz Lode Abernathy Quartz Lode New World Quartz Lode North Pole Quartz Lode Cube Quartz Lode White Bear Quartz Lode Highland Mary Quartz Lode Comet Quartz Lode Dead Horse Quartz Lode Monte Cristo Gold Lode Belmont Quartz Lode Rising Sun Quartz Lode Capital Gold Quartz Lode Enterprise Gold Quartz Lode New World Quartz Lode Last Chance Gold Lode Black Bear Gold Lode Barted Gold Quartz Mine Queen Gold Quartz Gold Brown Bear Gold Quartz Mine Shoofly Gold Mining Claim Watt Quartz Lode Melton Quartz Lode Deadwood Placer Mining Lode Sebastian Placer Quartz Lode
UNPATENTED MINING CLAIMS OWNED 100% BY THE COMPANY
NAME OF CLAIM NAME OF CLAIM
Lost Hope Cardinal No. 1 Cardinal No. 2 Cardinal No. 3 Cardinal No. 4 Cardinal No. 5 Cardinal Fraction No. 1 Cardinal Fraction No. 2 Cardinal Fraction No. 3 Cardinal Fraction No. 4 Cardinal Fraction No. 5 Cardinal Fraction No. 6 Cardinal Fraction NO. 7 Cardinal Fraction No. 8 Cardinal Fraction No. 9 Cardinal Fraction No.10 Coon Dog Extension Golden Bear No. 1 Golden Bear No. 2 Luck Boy Sunny Point Sunny Point No. 2
ITEM 3:
ITEM 3: LEGAL PROCEEDINGS
1. Petition in United States Court of appeals for the Ninth Circuit, filed March 23, 2004 contesting MSHA's interpretation of its standard. Docket Number 04-71301. 2. Plaintiff in Superior Court of the State of California, County of Sierra against private lawyers and their employer. Case filed February 13, 2004. Case No. 6293, Complaint for Damages (Malicious Prosecution, Intentional Infliction of Emotional Distress, Intentional Interference with Perspective Advantage)
PART II
ITEM 4:
ITEM 4: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information
There is no current public market place for the Company's common stock. 2002, 2003 and 2004 market data is based upon activity on the OAU X-Mart posted on the Company's web-site.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter High Low High Low High Low High Low ------ ----- ------ ----- ------ ----- ------ ----- 2004 $ .83 $ .62 $ .75 $ .72 $ 1.00 $ .60 $ .75 $ .42 2003 .90 .85 .83 .38 .70 .50 .60 .60 2002 .86 .22 .86 .60 .32 .20 .55 .20 2001 .234 .167 .400 .250 .300 .267 .400 .150 2000 .333 .187 .354 .210 .397 .210 .333 .127 1999 .357 .230 .417 .167 .354 .230 .354 .210 1998 .730 .544 .687 .520 .687 .294 .417 .294 1997 1.294 1.084 1.417 .960 1.334 .960 1.000 .627 1996 1.544 1.250 1.584 1.437 1.520 1.377 1.334 1.250 1995 1.314 1.084 1.250 .877 1.750 1.044 1.627 1.250 1994 2.500 1.584 2.084 1.834 1.917 1.417 1.250 1.127
Note: The Company offered a 3 for 1 stock split in 2001. Accordingly, share and per share data has been restated for all periods presented to give effect to the split.
ITEM 6:
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Balance Sheet
Original Sixteen to One Mine, Inc. is a distinct company in that it is the only operating company of its kind remaining in the United States. Management believes that the assets of the Company are understated. For example, in 2001, the Company incurred a loss of approximately $800,000 in the writing down of development costs of the 2283 Winze. The development costs were capitalized based on gold production. Due to more favorable locations for short-term gold production the Company made changes in its plan of operation. While the immediate future holds no promise for operation in this area of the mine, the development still proves to be a valuable asset to the infrastructure of the property.
No value is recorded on the balance sheet for timber. The company owns 1,000 acres of timberland. No value is recorded on the balance sheet for the Company owned water rights. Reduced value is recorded on the balance sheet for buildings equipment and land. No value is recorded on the balance sheet for marketable aggregate and decorative stone currently stock piled on the property. No value is recorded on the balance sheet for goodwill. Fixed assets are recorded at cost less depreciation.
Comparisons of 2004 with 2003
Current Assets increased by $313,999 (50%) during the twelve-month period ended December 31, 2004 primarily as a result of a pocket of gold found and mined in July.
Liabilities decreased by $74,204 (8%) as the Company continued to pay down its debts.
Retained earnings increased by $399,863 the net profit for 2004.
Other changes in the comparisons between 2004 and 2003 on the balance sheet are deemed insignificant and immaterial.
Statement of Operations
(a) Comparison of 2003 with 2004
Revenues increased by $976,308 (243%) as a result of a roughly 1,400 oz pocket found in July as well as revenue from mill sulfides that were processed and increased slab sales as a direct result of the pocket mined in July.
Salaries and wages increased $59,899 (75%) due to annual wages of $60,000 being booked (not paid) as owing to Michael M. Miller.
Contract Labor increased $323,959 (607%) due in part to the production percentage owed to the contract miners for gold mined in July as well as expanded operations by the contract miners.
Supplies expense increased by $48,989 (317%) as a result of restocking and an expanded operation.
Small equipment & repairs expense increased by $23,904 (125%) as worn out equipment was repaired or replaced.
Legal and accounting expense increased by $8,212 (252%) due to the cost of pending lawsuits.
Compliance & safety expense increased by $5,603 (97%) as two regulatory agencies increased their fees.
Operating expenses as a whole increased by $495,734 (119%) primarily as a result of an expanded operation.
The company showed a net profit of $399,863 for the twelve-month period ended December 31, 2004 compared to a loss of $80,815 for the same period ending December 31, 2003. This represents an increase of $480,678 (594%) primarily as a result of the pocket mined in July and a large percentage of the material being sold as value-added slab.
The basic and diluted gain per share for 2004 totaled .03 compared with a loss of (.006) per share in 2003.
(b) Comparison of 2003 with 2002
Revenues decreased by $185,577 (32%) as a result of a downsized operation and the resulting decrease in mine production. It should be noted that consistent with accounting practices established by our auditors in previous years, inventory valuation adjustments resulting from the fluctuation of the price of gold are either added (gold price increases) or subtracted (gold price decreases) to revenues.
Salaries and Wages decreased by $220,891 (73%) while contract labor increased $33,565 (169%). This is due to the involvement of accredited miners becoming independent contractors as participants in a lease with the Company.
Insurance decreased by $30,035 (82%) due to a decrease in worker's compensation insurance premiums as well as a decrease in coverage.
Operating Expenses as a whole decreased by $378,367 (48%) as a direct result of a downsized operation.
The basic and diluted loss per share for 2003 totaled (.006) compared with a loss of (.02) per share in 2002.
SUBSEQUENT EVENTS
None
ITEM 6: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The unaudited financial statements of the Company are attached at the end of this document.
PART III
ITEM 7:
ITEM 7: DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Officers and Directors
The following table sets forth the Officers and Directors of the Company. The directors listed below will serve until the next annual shareholders meeting to be held on June 26, 2004. All of the officers of the Company serve at the pleasure of the board of directors.
Name Age Position Officer Since Director Since
Michael M. Miller 62 President & Director 1983 1977
Scott K. Robertson 48 Treasurer & Director 1999 1999 Hugh Daniel O'Neill 62 Director N/A 2002
Rae Bell Arbogast 39 Secretary 2002 N/A
Michael M. Miller-Director, President and CEO
As President and Chief Executive Officer, Mr. Miller is responsible for the day to day operations of the Company. In 1975, Mr. Miller became the sole proprietor of Morning Glory Gold Mines. Prior to that, he was self-employed in Santa Barbara County, California from 1965 to 1974. Mr. Miller served as a trustee and President of the Sierra County Board of Education (1979 to 1983 trustee) (President in 1983). In 1991 he served as a member of the Sierra County Planning Commission (Chairman in 1992, 1993, 1999 and 2000) until 2001. Mr. Miller is licensed as a California Class A general engineering contractor. He is a member of the American Institute of Mining Engineers. In 1965, Mr. Miller received a B.A. from the University of California at Santa Barbara in combined Social Sciences-Economics. He was born in Sacramento, California.
Scott K. Robertson- Treasurer ~ Director
Scott K. Robertson has been active in the Company since 1984 as an outside accountant. In 1992, Mr. Robertson co-founded the CPA and business development firm Robertson, Woodford, & Summers LLP, located in Grass Valley, California. He is currently active as the director and owner of several companies.
Mr. Robertson is also a past president of the Economic Resource Council, Rotary Club of Grass Valley and Nevada County Business Association, all located in Nevada County, California. He was an instructor at Sierra College for twelve years.
Mr. Robertson received his bachelor's degree in Business Economics in 1981 from the University of California at Santa Barbara, and his CPA certificate in 1986
Hugh Daniel O'Neill III ~ Director
Mr. O'Neill was born April 21, 1942 at a naval base in Virginia. He was raised in seventeen states over a fourteen-year period, settling in Nevada City, California. He attended the University of San Francisco, where he created Odd Bodkins in 1961. The San Francisco Chronicle syndicated Odd Bodkins in 1963 making Mr. O'Neill the youngest cartoonist ever hired by a national syndicate It was published in 350 newspapers. At its peak readership was 50 million daily. Dan is an historian, an accomplished journalist and a former war Correspondent.
Rae Bell Arbogast ~ Secretary Rae Bell has worked for the Sixteen to One Mine since 1996. In 1998 she completed an Accounting Course from the University of Nevada at Reno and several computer courses. She is an Administrative Assistant for the company and serves as the Corporate Secretary.
Rae Bell is a Director and Vice-Chair of the newly formed Pliocene Ridge Community Services District, a Director of the Alleghany County Water District, and Director and Curator of Underground Gold Miners Museum. She is a volunteer Emergency Medical Technician with the Fire Department. She was born in Southern California and moved to the Alleghany area with her family in 1975. Her father worked as a miner at the Ruby and Carson Mines. Prior to employment with the Company she was self-employed.
ITEM 8:
ITEM 8: EXECUTIVE COMPENSATION
Remuneration of Directors and Executive Officers
Total compensation for each Director, excluding the President, consists of $750 per meeting attended and an annual $2,000 retainer effective January 1, 1994, and remains unchanged.
The Company has not paid or distributed and does not pay or distribute cash or non-cash compensation to officers, directors or employees under any retirement or pension plans, and has no intent to do so in the future.
In April 1996, the Board of Directors adopted, subject to shareholders approval the Company's Stock Incentive Plan for employees and directors Shareholders approved the plan on June 22, 1996.
Management Remuneration for the Period Ended December 31, 2004
Name/ Principal Annual Position Year Salary Bonus Compensation Securities - --------- ------ ------ ----- ------------ ----------
Michael Miller/ 2004 $ 60,000 0 0 0 President & CEO 2003 $ Deferred 0 0 0 2002 $ Deferred 0 0 0
The following table summarizes incentive options granted to the president:
Issued Sept.24, 1999 450,000 shares $ .230 per share Issued June 30, 1998 150,000 shares $ .710 per share
Note: No options were granted in the years 2004 or 2003. These options vest ratably over a five-year period beginning one year from the date of grant.
Non-qualified Stock Options granted to board members are summarized in the following table: SHARES EXERCISE PRICE FULLY VESTED ------ -------------- ------------ Issued June 30, 2001 45,000 $ .3400 June 30, 2005 Issued June 30, 2000 45,000 $ .3125 June 30, 2004 Issued June 30, 1999 45,000 $ .3750 June 30, 2003 Issued June 30, 1998 30,000 $ .6250 June 30, 2002
These options vest ratably over a four-year period beginning one-year from the date of grant and expire ten years after the date of grant.
ITEM 9:
ITEM 9: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
Title of Name and Address Amount and Nature Percent Class of Beneficial Owner of Beneficial Owner of Class - ------- ------------------- ------------------- -------- Common M. Blair Hull 1,989,507 15.5% Hull Trading Co. 401 So. LaSalle, Suite. 505 Chicago, IL 60605
Common Kathy N. Hull 1,490,250 12% 11 Sierra Ave. Piedmont, CA 94611
Common Michael M. Miller 1,032,597 8% Officer and Director P.O. Box 941 Alleghany, CA 95910
Common Scott K. Robertson 132,442 1% Officer and Director 12391 Deer Park Drive Nevada City, CA 95945
Common Hugh Daniel O'Neill 7,639 .06% Director 227 Prospect St. Nevada City, CA 95959
Common Rae Bell Arbogast 13,158 .1% Secretary P.O. Box 919 Alleghany, CA 95910
Common All Officers & Directors 4,665,593 36% (as a group)
PART IV
ITEM 10:
ITEM 10: UNAUDITED FINANCIAL STATEMENTS
In the opinion of management, the financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Company's financial position at December 31, 2004 and December 31, 2003, the results of operations and cash flows for the twelve-month periods ended December 30, 2004, 2003 and 2002. The unaudited financial statements have been prepared in accordance with Generally Accepted Accounting Principles.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
From time to time the Original Sixteen to One Mine, Inc. (the Company), will make written and oral forward-looking statements about matters that involve risks and uncertainties that could cause actual results to differ materially from projected results. Important factors that could cause actual results to differ materially include, among others:
- - Fluctuations in the market prices of gold - - General domestic and international economic and political conditions - - Unexpected geological conditions or rock stability conditions resulting in cave-ins, flooding, rock-bursts or rock slides - - Difficulties associated with managing complex operations in remote areas - - Unanticipated milling and other processing problems - - The speculative nature of mineral exploration - - Environmental risks - - Changes in laws and government regulations, including those relating to taxes and the environment - - The availability and timing of receipt of necessary governmental permits and approval relating to operations, expansion of operations, and financing of operations - - Fluctuations in interest rates and other adverse financial market conditions - - Other unanticipated difficulties in obtaining necessary financing with specifications or expectations - - Labor relations - - Accidents - - Unusual weather or operating conditions - - Force majeure events - - Other risk factors described from time to time in the Original Sixteen to One Mine, Inc., filings with the Securities and Exchange Commission
Many of these factors are beyond the Company's ability to control or predict. Investors are cautioned not to place undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events or otherwise.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.
ORIGINAL SIXTEEN TO ONE MINE, INC. Registrant
By: /s/Michael M. Miller Michael M. Miller President and Director March 4, 2005
Balance Sheet
December 31, 2004 and December 31, 2003
ASSETS 2004 2003 Current Assets Cash $ 9,857 $ 40 Accounts receivable 3966 3204 Inventory 927,812 620,778 Other current assets 1,161 5,775 ------- ------- Total current assets 942,796 629,797 ------- -------
Mining Property Real estate and property rights net of depletion of $524,145 181,091 181,091 Real estate and mineral property 473,403 473,403 ------- ------- Total Mining Property 654,494 654,494 ------- -------
Fixed Assets at Cost Equipment 953,515 909,983 Buildings 159,487 159,487 Vehicles 253,128 252,128 --------- --------- Total fixed assets a cost 1,366,130 1,321,598 --------- --------- Less accumulated depreciation (1,243,368) (1,211,496) ----------- ----------- Net fixed assets 122,762 110,102 ----------- -----------
Other Assets Bonds and misc. deposits 16,185 16,185 --------- -------
Total Assets $1,736,237 $1,410,578 ========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY 2004 2003 Current Liabilities Bank Overdraft $ 0 0 Accounts payable & accrued expenses $ 256,621 352,797 Due to related party 156,291 101,397 Notes payable due within one year 421,421 434,013 -------- ------- Total Current Liabilities 834,333 888,207 -------- -------
Long Term Liabilities Notes payable due after one year 7,267 27,597 -------- ------- Total Liabilities 841,600 915,804 -------- -------
Stockholders' Equity Capital stock, par value $.03 : 30,000,000 shares authorized:12,867,250 shares issued and outstanding as of December 31, 2004 and December 31,2003 428,869 428,869 Additional paid-in capital 1,875,888 1,875,888 (Accumulated deficit) Retained earnings (1,410,120) (1,809,983) ------------ ----------- Total Stockholders' Equity 894,637 494,774 ------------ -----------
Total Liabilities and Stockholders' Equity $1,736,237 $1,410,578 ============ ============
Original Sixteen to One Mine, Inc.
Statement of Operations
2004 2003 2002 Revenues: Gold & jewelry sales 1,374,247 397,903 588,030 Other Sales 3,211 3,247 - ------ ------- ------- Total Revenues 1,377,458 401,150 588,030
Operating expenses: Salaries and wages 139,571 79,672 300,563 Contract Labor 377,346 53,387 19,822 Telephone & utilities 102,888 123,831 141,738 Taxes - property & payroll 38,497 35,939 52,539 Insurance 6,162 6,619 36,654 Supplies 64,445 15,456 56,737 Small equipment & repairs 43,017 19,113 18,095 Drayage 27,836 21,514 18,262 Corporate expense 10,705 15,218 13,608 Legal and accounting 11,471 3,259 29,633 Compliance/Safety 11,363 5,760 21,073 Depreciation & amortization 31,872 23,823 73,660
Other expenses 45,666 11,518 11,088 ------- ------ ------ Total operating expenses 910,839 415,109 793,472
Profit (Loss) from operations 466,619 (13,959) (205,442)
Other Income & (Expense): Interest Expense and Late Charges (64,522) (67,928) (78,543) Other expense (4,041) (2,528) (11,513) Other income 2,607 4,400 16,213 --------- -------- --------- Total other (expense) income (65,956) (66,056) (73,843)
Profit (Loss) before taxes 400,663 (80,015) (279,285)
Income tax expense 800 800 800
Net (loss) income $ 399,863 $ (80,815) $ (280,085) ========= ========== =========
Basic and diluted gain (loss) per share $ .03 $ (.006)$ (.02) Shares used in the calculation of net (loss) income per share 12,867,250 12,867,250 12,744,046 ======== ========= ========
Original Sixteen to One Mine, Inc.
Statement of Cash Flow For the Years Ended December 31, 2004, 2003, 2002
Cash Flows From Operating Activities: 2004 2003 2002
Net profit (loss) $ 399,863$ (80,815)$ (280,085) Operating activities: Depreciation and amortization 31,872 23,823 73,660 Decrease(Increase) in accounts receivable (762) 4,117 12,635 Decrease(Increase) in inventory (307,034) (15,728) 101,583 Decrease (Increase) in other current assets 4,614 1,463 6,101 (Decrease) Increase in accounts payable accrued expenses and short term notes (53,874) 27,534 148,370 -------- ------- --------- Net cash (used) provided by operating activities 74,679 (39,606) 62,264
Cash Flows From Investing Activities: Purchase of fixed assets (44,532) - (11,935) Other assets Bonds Misc. deposits - - (16,185) --------- -------- -------- Net cash (used)provided by investing activities (44,532) - (28,120)
Cash Flows From Financing Activities Bank overdraft increase (decrease) - (81) (12,349) Increase (decrease) notes payable (20,330) (30,286) (45,264) Proceeds from sale of common stock - 4,001 - Paid in Capital from Shareholders - 66,012 - -------- -------- -------- Net cash provided (used) by financing activities (20,330) 39,646 (57,613)
(Decrease)increase in cash 9,817 40 (23,469) Cash, beginning of period 40 0 23,469 ------ ------- -------- Cash, end of period $ 9,857 $ 40 $ 0 ======== ======= ========