FALL IN PROFITS.

Auckland Star, Volume LXX, Issue 303, 23 December 1939, Page 4

FALL IN PROFITS.

MOUNT MORGAN, LTD.

EXPLAINED BY CHAIRMAN. ANSWER TO CRITICISM. The sharp fall in profits shown in the annual accounts of Mount Morgan, Ltd., was explained by the chairman, Mr. A. A. Boyd, at the company's annual meeting, held in Sydney. The net earning for the year were £92,602, which was £23,411 less than that disclosed for the previous 12 months. Mr., Boyd said that there were two reasons for this reduction. No depreciation was charged to profit and loss account ill 1938 (£29,757 this year) and in the 1938 account*.' mining was only charged with overburden removal at tile ratio of three tons of overburden to each ton of ore mined from reserves, whereas in the 1939 accounts mining stood the cost of all overburden removed during the year. The chairman added that out of the net profit £25.000 had been transferred to capital redemption reserve fund, and as advised in the directors' report, this sum had been invested in Commonwealth consolidated stock. Furthermore £3831, representing profit from sources other than mining, had been transferred to a special account, thus leaving available for distribution only those profits of the year that had been earned wholly and exclusively from goklinining operations. "The unwarranted criticism of the board on the overburden position and the accusation of over-developing the mine by removing an excess quantity of overburden is wholly disproved when it is realised that 80 per cent of the material treated, other than from old dumps, came from what is known as overburden," continued Mr. Boyd. "This material represents 34 per cent of the total ovei burden removed, which means that this overburden from which we were promised nothing has during the past year yielded one ton of payable ore for every two tons discarded. Ihus the profitable life of the mine is con-I siderably extended."

'J he chairman denied rumours, which he said were prevalent, that operations may Ixj restricted owing to shortage of water. With ucorioinies in consumption, reconditioning of waste water and supplies from fresh wells, added" to water in the reservoirs, there was ample water in sight to carry on for some months without further replenishment by thunderstorms which were due pt this time of the year.