GOLD INDUSTRY'S NEEDS

Auckland Star, Volume LXVI, Issue 265, 8 November 1935, Page 6

GOLD INDUSTRY'S NEEDS

EFFECT OF THE EXPORT TAX.

(To the Editor.)

Your leading article in the "Star" of tfo •• Gth inst. struck the right note, the principal ' need of the gold industry being suitable capitalisation with proper management. I been interested in attempting to obtain capital < from both England and Australia, but tha ' biggest obstacle has been the export tax of I 12/6 per ounce on 20 carat bullion, plug the 1 existing tax of 2/6 on fine gold. Thia total K equals 17/6 per fine ounce. Most people speak of the export tax as a tax on fine gold, where- ' as it is a tax on bullion, and you never hear of the pre-existing tax of 2/6 per fine ounce. The pay ore zone in New Zealand quartz mines commences at approximately 20/ per ton, therefore before the rise in the price of gold took place it took the first sdwt of fine g o y extracted from each ton of quartz mined to pay the working costs. It is from the ore of a grade containing an extractable volume of fine gold per ton of from 2£dwt upwards that ! we must look for future profits. To-day the actual tax per dwt is 10Ad, therefore it is imperative that gold taxation be removed to enable the successful exploitation of those ore deposits which contain a large volume of 2Jdwt ore. The taxation to-day on 2Jdwt ore is 2/2J per ton, therefore, with the tax, a working profit is converted into a loss a.id the volume of a given ore tonnage within the pay ore zone greatly decreased. Before develop, ment on a large and profitable basis can succeed the ore tonnage and the value of same must be such as to interest the people who command a sufficient amount of capital; such people do not require the assistance of the Government. With modern methods which are available it is a simple matter to thoroughly test mining areas. The various groups of financiers I have been negotiating with employ very competent staffs; they depend on the advice of their engineers. The only alteration I required is that which will bring the. pay ore I zone to such a level as will increase the volume ' of pay ore to such dimensions as will make I it worth while to launch out on big-scale operations. H. H. ADAMS.