OUTLOOK FOR FUTURE

Evening Post, Volume CXXV, Issue 122, 26 May 1938, Page 12

OUTLOOK FOR FUTURE

LOWER DIVIDEND WARNING

(From "The Post's" Representative.) LONDON, May 7.

The view that with the virtual exhaustion of the Junction area and the limits of development beg ™ g appear elsewhere, it was that dividends could be maintained at he existing rate, was expressed by the chairman of the Martha Gold Mining Company (Waihi), Limited, Mr. G. R. Mitchison, at the annual meeting in London this week. Mr. Mitchison said that the 224,353 tons of ore crushed in 1937 represented «n increase of 771 tons on the previous year but the proceeds £454,849, were -P7B9R Ipss because the ore was less sch It yielded lOd a ton less than in the previous year. x- 9n nnn in There was a decrease of £20,000 in the expenditure on mining, but this was because less mining had beendone not through any reduction in the cost ° f An Allocation of £5000 had been made to a fund for the benefit of the staff. Most of the New Zealand staff had spent very many years in the service of the company and the former Waihi Company. The net result of the years operations was very similar to the previous one, but it did not follow that it would be in succeeding years. > The problem of future ore supplies had become more acute. In addition to the 40-hour week, [extra pay for Saturday work had now to be provided. The full effect of the I resulting increase in working costs would be felt in 1938. The New Zealand .Parliament had decided that the company should pay tax on the last two dividends of the old Waihi Company. The tax could have been, but was not, claimed at the time, but it served no purpose to discuss objections to the circumstances of collection. The sum involved, £27,000, would be dealt with in the present year's accounts. DECREASING ORE SUPPLIES. To summarise the outlook, the Junction area was practically exhausted; in 1936, 1937, and this year, development in the company's own area had led to no substantial results. He had said last year that limits of development were beginning to appear. They were now tolerably clear. There was little 'to be expected from the mine which was not already known. It was as clear as anything in mining could be that the 1938 results would not be as good as in 1937. Output and the average value of the ore in the first three months of this year were both lower than in. the same period last year. In view of these differences it was unlikely that dividends could be maintained at the present rate. At this stage the New Zealand executive had a particularly difficult and thankless task but they had handled matters with competence and judgment. Colonel R. G. Milligan, the company's local director and attorney in New Zealand, who was present, supported the chairman's remarks as to future prospects and pointed out that the mine ,had been running for over 50 years. One of the most important factors was the rate at which ore could be got out.- It might be possible to run for longer by cutting down tonnage, but there would be trouble as soon as this was done. It was rather difficult to hold out any prospects of profits again being on such a scale as in the present accounts.

The report and accounts, details of which have already been published, were adopted. Mr. Mitchison was reelected a director. The final dividend of Is a year per share, free of income tax, was approved.