WEDNESDAY, DECEMBER 11, 1935. GOLD AND ITS COSTS

Evening Post, Volume CXX, Issue 141, 11 December 1935, Page 10

WEDNESDAY, DECEMBER 11, 1935. GOLD AND ITS COSTS

"One room of any ordinary cottage would hold enough, gold," says the Minister of Mines, "to pay our National Debt." At present there are thousands of alluvial miners and reef miners engaged in trying to fill that room, but if the total expenditure on all gold mining and prospecting in New Zealand, in any one of recent years, could be weighed up against the total value of the gold produced (even though the New Zealand value, through higher world price plus exchange, has about doubled) it is to be feared that the industry would show a grave deficit. No such comprehensive figures for gold seeking, viewed as one big enterprise, are available, but it is assumed in practically every gold country that, estimating either on a long-term basis or on a short-term basis, the gold yield is in small proportion to moi^ey spent. The question arises: Cannot gold mining be so conducted that money shall not be spent uselessly? Cannot the gambling element in gold seeking be reduced if not eliminated? It is not evident that any country has solved that problem, or is on the way to solve it.

In his first comprehensive official statement, the new Minister of Mines (Mr. P. C. Webb) refers to speculative holding of leases' under the mining laws, and to testing by drilling. The speculative holding to which he refers is the holding of mining land without working it. Mr. Webb says he is against this. We have never known a Minister of Mines who was not.- To take up land with the right to mine is comparatively easy, and the real price paid by the person or company who takes up mining land is the finding of capital money for working it. Out of this expended capital, industries that supply (for cash, not shares) plant and material to mines assuredly receive profits, miners (including prospectors and allied labour) almost certainly receive wages, and the mine owner or mine-owning company receives (perhaps) gold and a profit on the sales of the gold. So long as the mine owner is sufficiently working the land, his title is good. If not, it can be cancelled by the Warden, but if the mine owner can point to a considerable unprofitable expenditure on working at a loss, leading to exhaustion of capital, he may be granted concessions in the form of protection of his mining-rights for a certain non-working period. It is evident at first sight, and long experience has proved, that the equity and the success of this system depend entirely on the application of it. It is based on a discretionary power, and dependent entirely on discretionary wisdom. Properly applied, it could prevent speculative holding of rights.,

A far more difficult form of speculation attaches to the testing of mining ground. If testing could be made relatively reliable, and if measures could be taken to assure that tests placed before investors were tests up to that standard, then a large portion of the avoidable hazard could be removed from mining methods, and a big step would be made from the gambling status to that of investment. Consider test drilling. Mr. Webb mentions auriferous drilling in the Reefton area, also alluvial drilling, stating that sixty alluvial drills have been at work. Theoretically, the testing of alluvial areas by drill can be made so efficient that alluvial mining conducted on such tests becomes an industry or at least a legitimate investment. Theoretically, alluvial drill-testing reduces risks to a small percentage; in New Zealand, in practice, it has in various cases failed to do so. Now, this problem of the reliability of drill-testing of alluvial areas, and of the honesty of tests, is more vital in the modern phases of New Zealand mining than is even the speculntive holding of ground. Land-locking has always been with us, and can be checked, but modern developments in alluvial drill-testing are a comparatively new feature, at any rate in New Zealand, and any Minister who could make drilltesting, in practice, the safeguard to investors that it claims / to be in theory, would do more for alluvial gold mining than has been done by any man since the original discoverer. As Minister of Mines, Mr. 'Webb has inner knowledge. There is probably no one in Parliament, and not a great number outside,' who know the depths of the mining gamble complex as he does. In this portfolio he has a great opportunity, and it will be interesting to see whether, and how, he tackles a problem that hitherto has defied reform.