SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2012 Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporated or organization)
Post Office Box 909, Alleghany, CA 95910
(Address of principal executive offices)
(530) 287-3223
(Registrant's telephone number)
(including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes: No: x
As of June 30, 2012, 13,399,505 shares of Common Stock, par value $.03 per
share, were issued and outstanding.
PART I
1. FINANCIAL INFORMATION
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet
June 30, 2012 and December 31, 2011
June 30, 2012 December 31, 2011
ASSETS
Current Assets
Cash $ 12,979 $ 6,339
Accounts receivable 2,340 1,522
Inventory 299,094 396,883
---------- ----------
Total current assets 314,413 404,744
---------- ----------
Mining Property
Real estate and property rights
net of depletion of $524,145 230,401 230,401
Real estate and mineral property 47,976 47,976
---------- ----------
278,377 278,377
---------- ----------
Fixed Assets at Cost
Equipment 810,404 810,404
Buildings 209,487 209,487
Vehicles 105,414 105,414
---------- ----------
1,125,305 1,125,305
Less accumulated depreciation (1,070,782) (1,066,860)
---------- ----------
Net fixed assets 54,523 58,445
---------- ----------
Other Assets
Bonds and misc. deposits 5,460 5,460
---------- ----------
Total Assets $ 652,773 $ 747,026
========== ==========
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet continued
June 30, 2012 and December 31, 2011
June 30, 2012 December 31, 2011
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable &
accrued expenses 861,689 815,746
Due to related party 334,024 442,870
Notes payable due within one year - -
---------- ----------
Total Current Liabilities 1,195,713 1,258,616
---------- ----------
Long Term Liabilities
Notes payable due after one year 97,236 97,236
---------- ----------
Total Liabilities 1,292,949 1,355,852
---------- ----------
Stockholders' Equity
Capital stock, par value $.03:
30,000,000 shares authorized:
13,399,505 shares issued and
outstanding as of June 30, 2012
and as of December 31, 2011. 440,656 440,656
Additional paid-in capital 2,063,202 2,063,202
(Accumulated deficit)
retained earnings (3,144,034) (3,112,684)
---------- ----------
Total Stockholders' Equity (640,176) (608,826)
---------- ----------
Total Liabilities and
Stockholders' Equity $652,773 $747,026
========== ==========
See Accompanying Notes
Original Sixteen to One Mine, Inc.
Statement of Operations and Retained Earnings
Three Months Ending June 30, Six Months Ending June 30,
2012 2011 2012 2011
------ ------ ------ -----
Revenues:
Gold & jewelry sales $ 56,064 $ 88,480 $ 130,513 $ 145,352
--------- ----------- -------- -------
Total revenues 56,064 88,480 130,513 145,352
----------- ---------- -------- ------
Operating expenses:
Salaries and wages 17,013 16,210 33,425 42,778
Contract Labor 7,160 12,316 9,526 23,938
Telephone & utilities 13,074 16,702 23,792 32,305
Taxes - property & payroll 6,044 4,761 11,891 11,026
Insurance 868 190 1,430 3,163
Supplies 8,799 12,540 12,038 16,188
Small equipment & repairs 9,343 24,884 14,767 34,986
Drayage 4,740 6,172 7,773 10,412
Corporate expenses 3,664 4,889 5,164 6,389
Legal and accounting 190 2,852 18,980 9,997
Depreciation & amortization 1,961 2,876 3,921 5,752
Other expenses 1,686 1,734 2,758 3,113
---------- ---------- ------- -------
Total operating expenses 74,542 106,126 145,465 200,047
---------- ---------- -------- --------
Profit (Loss)
from operations (18,478) (17,646) $ (14,952) $ (54,695)
Other Income : 178 1,521 2,156 7,318
Other (expense) (7,002) (8,578) (17,754) (15,088)
---------- ----------- ------- --------
Net Other income (exp) (6,824) (7,057) (15,598) (7,770)
Profit (Loss) before taxes (25,302) (24,703) (30,550) (62,465)
---------- ----------- --------- ----------
Income tax benefit (expense) (800) (800) (800) (800)
---------- ----------- --------- ----------
Net profit (loss) $ (26,102) $ (25,503) $ (31,350) $ (63,265)
============ =========== ========== ==========
Basic and diluted (loss)
Gain per share $ (.002) $ (.002) $ (.001) $ (.005)
============ ============ ========= =========
Shares used in the
calculation of net
loss income per share 13,399,505 13,399,505 13,399,505 13,399,505
============ =========== ========== ===========
See Accompanying Notes
Original Sixteen to One Mine, Inc.
Statement of Cash Flows
Six Months Ended June 30,2012 and June 30,2011
Six Months Ended June 30,
2012 2011
-------------- --------------
Cash Flows From Operating Activities:
Net (loss) profit $ (31,350) $ (63,265)
operating activities:
Depreciation and amortization 3,921 5,752
(Increase)Decrease in
accounts receivable (818) 760
Decrease(Increase) in inventory 97,789 (10,090)
(Increase)Decrease in other
current assets - -
(Decrease) increase in accounts payable
and accrued expenses 45,943 (12,403)
(Decrease) increase in short term notes (108,845) 83,515
------------ ----------
Net cash (used) provided by
operating activities 6,640 4,269
------------ -----------
Cash Flows From Investing Activities:
Sale of mining property - -
Capitalization of mining claims - -
Other assets bonds misc. deposits - 2,501
------------- -----------
Net cash used by
investing activities - 2,501
------------- -----------
Cash Flows From Financing Activities
Increase (decrease) notes payable - -
Proceeds from sale of common stock - -
Additional paid-in capital - -
------------ ------------
Net cash provided (used) by
financing activities - -
------------ ------------
(Decrease) increase in cash 6,640 6,770
Cash, beginning of period 6,339 4,956
------------ ----------
Cash, end of period $ 12,979 $ 11,726
============ ============
Supplemental schedule of other cash flows:
Cash paid during the period for:
Interest expense $ 18,557 $ 14,744
============ ============
Income taxes $ 800 $ 800
============ ============
See Accompanying Notes
NOTES TO THE FINANCIAL STATEMENTS
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: Original Sixteen to One Mine, Inc. (the Company) was
incorporated in 1911 and is actively involved in operating gold mines in
Alleghany, California; currently, in maintenance status.
Inventory: Inventory consists of gold bullion, specimens and jewelry. Gold
bullion and specimens are quoted at the market price for gold bullion.
Jewelry is quoted at the market price for the gold content plus labor cost.
Gold bullion and jewelry are accounted for using the FIFO method. All other
inventory is accounted for using the specific identification method.
Fixed Assets: Fixed assets are stated at historical cost. Depreciation is
calculated using straight-line and accelerated methods over the following
useful lives: Vehicles 3 to 5 years, Equipment 5 to 7 years, Buildings 18 to
31.5 years.
Depletion Policy: Because of the geological formation in the Alleghany Mining
District, estimates of ore reserves currently cannot be calculated, and
accordingly, a cost per unit depletion factor cannot be determined. Should
estimates of ore reserves become available, the units of production method of
depletion will be used. Until such time, no depletion deduction will be
recorded.
Revenue Recognition: As they are mined, gold specimens are recorded in
inventory and revenue is recognized using quoted market prices for gold.
For income tax purposes revenues are not recognized until the gold is sold.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
GENERAL NOTES
1. In accordance with directive from the Securities and Exchange Commission
(SEC)and Industry Guide 7, reference for all intent and purposes to the
Company's employees as miners, its properties as mines or its operation as
mining does not diminish the fact that the Company has no proven reserves and
is in the "exploration state" as defined in Guide 7(a)(4)(iii).
2. 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 June 30, 2012 and December 31,
2011, the results of operations for the three-month and six-month periods ended
June 30, 2012 and 2011 and cash flows for the six-month periods ended June 30,
2012 and 2011. The unaudited financial statements have been prepared in
accordance with Generally Accepted Accounting Principles forinterim financial
information and with the instructions to Form 10-Q and Item
310(b) of Regulation S-B.
II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The Sixteen to One mine in the Alleghany Mining District is a unique mine and
requires a unique operation, which has been recognized by its owners, its
miners, geologists, engineers, and some public agencies during the last decade
of the twentieth century and to the present. It is a traditional high-grade,
hard rock, underground gold mine. The same company owns and operates
(maintains) the mine. Original Sixteen to One Mine Inc, (owner) was incorporated
in California in 1911. Experts estimate that less than twenty percent of the
proven and probable ore deposit has been mined. Production is approximately
1,500,000 ounces of gold.
There are over twenty-eight miles of horizontal workings and millions of cubic
feet of vertical excavations called stopes. The entire grounds are not
maintained for mining. Once an area is targeted for mining, travel ways and
escape routes are brought into safety compliance. Production miners set up a
heading (face) and begin a drill-blast-muck sequence into the quartz. Gold is
hosted in the quartz vein in exceedingly rich concentrations called "pockets".
Metal detectors are regularly used underground as a tool for guiding the
direction of the work. Metal detectors are also used as a tool to separate the
ore underground. This has the positive affect of reducing the volume of shot
rock from the mine, thereby reducing costs.
In 1992, the company initiated a gold marketing plan of selling gold in quartz
as a gemstone. This produces revenue significantly greater than selling gold
into the spot market. Demand for the Sixteen to One gold-in-quartz gemstone
exceeds supply.
Production has been termed a "feast or famine" situation for over 100 years.
Reserves in a high-grade gold mine cannot be termed as "proven". By industry
wide definition of phases of a mine operation, the operation during this
quarter is exploration. Exploration aims at locating the presence of economic
deposits and establishing their nature, shape and grade. The investigation may
be divided into (1) initial and (2) final. At the Sixteen to one the search for
gold or ore embraces: (1) geological surveys; (2) geophysical prospecting; (3)
boreholes; (4) surface or underground headings, drifts or tunnels. When
operations detect the presence of gold, the Company evaluates the indicators
and if warranted, moves its operation from exploration to development. When the
presence of gold is evaluated, the Company moves its operation into production.
The company hoards gold and sells it according to short-term cash needs. This
fact requires an operator to manage its cash flow to operate between pockets.
It is difficult to undertake major expansion plans with an uncertain supply of
capital. The Company has announced general plans to build a new shaft in the
northern section of its Alleghany patented claims when funds are available.
BALANCE SHEET COMPARISONS
Assets: For the six-month period from December 31, 2011 to June 30, 2012 cash
increased by $6,640 (105%) due to revenues from the annual shareholders meeting
held on June 23, 2012. Accounts receivable increased by $818 (54%) due to an
outstanding ticket. Inventory decreased by $90,331 (22%) due the sales of
inventory including a trade against related party loans.
Liabilities: Notes due related parties decreased by $108,846 (25%) due to the
payment of a debt using gold inventory.
STATEMENT OF OPERATIONS
Revenues for the three-month and six-month periods ended June 30, 2012 compared
to the same periods in 2011 decreased by $32,416 (37%) and $14,839 (10%)
respectively. Primarily due to a greater increase in the spot price of gold
in 2011 than 2012.
Operating expenses for the three-month and six-month periods ended June 30,2012
decreased by $31,584 (30%) and $54,582 (27%) respectively compared to the
same periods in 2011 as a result of decreased maintenance activity in 2012.
For the three-month and six-month periods ended June 30, 2012 other income
decreased by $1,343 (88%) and $5,162 (71%) respectively due to legal fund
donations received in 2011 but not 2012. For the same three-month periods other
expenses decreased by $1,575 (18%) but for the six-month period other expenses
increased by $2,666 (18%) these fluctuations are primarily due to changes in
interest expense.
For the three-month period ended June 30, 2012 the company showed a loss of
$26,102 compared to a loss of $25,503 for the same period in 2011. The
difference is minimal. For the six-month period ended June 30, 2012 the
company showed a loss of $31,350 compared to a loss of $63,265 for the same
period in 2011. The $31,915 (50%) difference is primarily due to lower
operating expenses in 2012.
SUBSEQUENT EVENTS
None
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity is substantially dependent upon the results of
operations. The Company maintains a gold inventory which it liquidates to
satisfy working capital needs. There is no assurance that inventory is
adequate to sustain the Company.
PART II
LEGAL PROCEEDINGS
In July 2009 the Company and its president were served a complaint for damages
in Superior Court of the State of California, County of Sierra by the
California Regional Water Quality Control Board, Central Valley Region.
On March 18,2011 the second, third and fourth causes of action were dismissed
leaving only the first cause of action; also, Michael Miller was dismissed as
a defendant in the case. The case number is: No. 7019.
OTHER INFORMATION
The unaudited interim consolidated financial statements of Original Sixteen to
One Mine, Inc. (the Company) have been prepared by management in accordance
with generally accepted accounting practices. Such rules allow the omission of
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted audited accounting
principles as long as the statements are not misleading.
In the opinion of management, verified by signature below, all adjustments
necessary for a fair presentation of these interim statements have been
included. These adjustments are of a normal recurring nature.
The preparation of the Company's financial statements in conformity with
accounting principles accepted in the United States requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent liabilities at
the date of the financial statements, as well as the reported amount of
revenues and expenses during the reporting period. On an ongoing basis,
management evaluates its estimates and assumptions; however, actual amounts
could differ from those based on such estimates and assumptions. No accounting
principle upon which the Company's financial status depends, requires estimates
of proven and probable reserves and/or assumptions of future gold prices.
Commodity prices may significantly affect the company's profitability and cash
flow. No independent accounting firm or auditors have any responsibility for
the accounting and written statements of the Form 10-Q.
The Company and its president assume responsibility for the accuracy of this
filing and certify the financial statements present fairly in all material
respects, the financial position of Original Sixteen to One Mine, Inc at June
30, 2012.
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.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Registrant)
/s/Michael M. Miller
President and Director
Dated: November 16, 2012
