FACTS FOR INVESTORS.

Auckland Star, Volume LXIV, Issue 196, 21 August 1933, Page 4

FACTS FOR INVESTORS.

WASH! GOLD MINE. A GFSEAT MONEY SPINNER. PAYS 40 PER CENT PER ANNUM. In Hay, 1929, file chairman oi directors of t!:c Waihi Gold Mining Company issued a warning to shareholders in the following terms:—'"lt i.s. of course, even more difficult to say what we shall obtain from the mine in the year 1930, and perhaps it is premature t;> refer to it at all, hut it seeing dear that, unless some iinlooked for neceaa of good fortune should occur, there must be euc-h a falling off in returns during the year 1915',) that the maintenance of anything like the present rate of dividend will be out of the question.'. At that time the market value of the 5/ shares w«e 12/9. To-day they are scllinc at '!'>', and the difference accurately represents the changed outlook that has conip over the company since that date. The reason it* not far to seek, and ciin be given in three words, "the gold premium.'* As a consequence of the advance in the price of gold large quantities of ore that formerly were not worth treating have been profitably dealt with.

Past Years Compared. The following table shows the main features of the company's operations for the years 1930,;. 1031 and 1932:— 1930. 1031. 1032. Tons. Tons. Tons. Ore treated 220,084 l."J3.:{"(; 281,840 New ore developed 21ii,r>3(> 155.057 201,907 Ore reserves 304.762 842,872 322,140 £ £ £ Gold nml silver . 896,268 41:*,!)OO D.T0.572 Sundry receipts . ]!),3S!» 17,1ii10 18,023 HoriUiora 10,«23 10,(12.1 31,2jr> Total receipts .. 42(;,'JS1! 442,125 r>01.040 3-3xponses 294.(538 2i)S,<iOO .')09,092 Gross profits ... 13] ,044 143.43r> 251,048 Taxes 28.444 71,580 (>0,77!> Depreciation .... 0,720 0,37"> 7,007 The latest figures are extraordinarily good, with receipts totalling well over half a million sterling. This result was obtainable through the management speeding up operations to the utmost in order to take full advantage of the favourable gold market. In 1921 the par value of the ehnree was £1. In that year shareholders received 10/ a 6hare. bringing the par value to 10/, and in 1926 it was reduced to 5/ by a further return to shareholders of 5/ a share. Since that date the annual dividend has continued at 2/ per share, and in addition bonus shares of one share for every share held were distributed in 1927. The recent distributions therefore have been at the rate of 40 per cent per annum on the par value of the shares. Financial Position. The company's balance-sheet is interesting, and may bo summarised as follows, the figures for the previous year being shown for comparison:— LIABILITIES. 1031. 1D32. £ £ raid capital 247.05.". 247,053 Debentures 2,000 — Creditors and taxation ... 08,050 87,00" Reserves 306,323 438,460 Revenue account 03,437 103,358 Total 7C5.375 577.G57 ASSETS. £ £ Mines , , works, etc 252,401 244,972 Cyanide and stores Hi,498 18,044 Ore expenses i0,0.">4 2,863 Debtors 0,451 3,500 Mining investments 104 Company shares 70,.j".T 80,430 Securities ...-. 371,824 440,904 Bullion 27.890 .",9.(i07 Cash 32,628 2f>,016 Total 788,373 577.657 The following table shows the outside liabilities, total assets, and the surplus of assets in the last five years:— Outside Total Surplus Liabilities. Assets. Assets. £ £ £ 1027 58,888 801,023 743,23.". 102S 02,74."! 792,3,")8 720,613 I-JtO 37,967 772,093 734,126 1030 41.810 773,2 J.( 731425 1931 ... 100,630 798,375 697 710 1033 87.807 577.057 789,780 The financial position should prove exceedingly comforting to shareholders, iotal assets are £92,000 higher than at December, 1831, and the surplus over liabilities is greater than at any time in the past six years. The position at last balancing was that for every 5/ share there was a surplus of assets over liabilities of approximately 14/. The assete may be accepted as easily worth their face value. Fixed assete at £244,972 include the debt of £212,500 clue by the New Zealand Government next year in payment of the Horahora hydro electric works. " Securities " are entered at market value. For the current year to August 5 realisations have been approximately £265,900, calculated in sterling. Future Gold Prices. From the foregoing it will be seen that the only justification for the present value of Waihi shares is the high price of gold. The question of its permanence therefore is of the utmost concern to shareholders in the company. That investors in the Old World are satisfied on this matter is shown by the fact that buying orders in London have been responsible for the recent advances. In summing up the position recently, the "Financial News," London, said:—

" None of the central banks of the world has been relieved of its obligations to pay out gold at a fixed price, nor of its obligations to buy gold at a fixed price; nor has the import of gold been prohibited. Holders of gold will always have the option of selling their gold to any of the central banks at their official buying price. "In other words, gold cannot possibly depreciate below the value of the exchange which has depreciated to the least extent compared with its old parity. " This fact alone is sufficient to account for the strong demand for gold for hoarding. No human being is in a position to foretell the results of a ' currency depreciation race.' It is entirely uncertain which currency may bo least affected in such a wild scramble. Many people, therefore, consider it safer to hold gold than to hold any currency. For this reason gold is likely to be bid for well above its minimum price as determined by the value of the least depreciated currency." The authority quoted holds that it is probable that in the long run the price of gold will rise.