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THE BLUE SPUE CONSOLIDATE.

THE ANNUAL MEETING

{From Our Own Correspondent.]

London, June 7

It was generally anticipated that some friend of Mr J. C. Brown would attend the JBlue Spur meeting on Tuesday week on his behalf, and I went down to the Cannon street Hotel expecting lively times. Instead of that, however, everything passed off in the most matter of fact prosaic manner. Sir Walter Buller (an admirable chairman, by the way) and his colleagues were not inclined to be confidential, or even to give very definite reasons for the course they proposed to pursue. The Board, they intimated, had lost confidence in Mr J. C. Brown, and wished to abolish him and the New Zealand Board generally, and appoint Howard Jackson general manager, under their (the London Board's) direct control. If the share* holders declined (as, of course, they have a perfect right to do) to accept the Board's dictation in this matter the chairman and directors would there and then tender their resignations. In such a quandary what could the shareholders do but promptly oarry out their Board's suggestion ! Everyone, indeed, seemed to think it the right thing to do, and no one (not even his erstwhile solicitor, Hume Webster) had a word to say for tho dismissed manager. Little Brown may, as Sir R. Stout, I understand, still affirms, be " straight as a die," and I dare say in New Zealand he is much respected; but, over here, it must be confessed that just at present, at any rate, his reputation is—well, "off; very much off." The motion dismissing Brown cannot be confirmed till the general meeting next week. By that time Mr C. E. Haughton, who ia on his way Home, and is understood to be acting for Brown in various ways, will have arrived and may put in an objection or two.

An extraordinary general meeting of the company was held at the City Terminus Hotel on Tuesday, for the purpose of considering, and, if deemed advisable, passing, either with or without modification or amendment, the subjoined resolutions—viz.:—(l) " That the directors be, and they are hereby authorised to abandon the options given to the company for the pur* chase of the mining rights of the following oompanies or claims—namely,' Blue Duck,' •Fidelity,' 'North of Ireland,' and 'Morrisons.' " (2)' * That it is expedient that the offices of the local directors be abolished, and accordingly that Mr James Clark Brown and Mr David M'lntosh be, and they are hereby, removed, pursuant to powers conferred by Article 88, from their respective positions as local directors of the company."

Sir Walter Bullcr, chairman of the company, presided. Mr W. B. Fabian (secretary) road the notice calling the meeting. The Chairman : I think the notice sufficiently discloses the object of the meeting. You may remember that at our statutory meeting in May last I explained that, besides making certain purchases, wo had secured options of mines. On these we have paid 10 per cent, deposit, and we had a right to complete or to abandon within a certain time. The directors propose that in certain cases the purchases shall be completed, and that in certain others (as per resolution) they shall be abandoned. It is necessary that some decision should be come to now, because, under our agreement with Mr Brown, in all cases where the option is Abandoned the company ia entitled to recover the 10 per cent, deposit paid in cash, and as security for that agreement Mr Brown has left in our hands (unissued) 5,000 shares, to which he is entitled. The directors have given the matter careful attention, and chiefly on the advice of their inspector (Mr Howard Jackson) they recommend to you that in these cases the purchases should be abandoned under the option —"Blue Duck," "Fidelity," "North of Ireland," and " Morrisons" claims. Mr Jackson says : "In my opinion, the value of the amalgamated companies would in no way depreciate if these options were abandoned, as none of them could be worked without the water of the amalgamated company, and no effort shouldbe left unmade to seoure all the water which can possibly be brought on to the works." The other resolution is one for the removal from the office of local director of Mr James Clark Brown and Mr David M'lntosh. The directors asked for this resolution under section 88 of tho articles, which provides that a director may be removed by a special resolution from office at any time within tho period of his office. I do not wish to go into the reasons which had determined the Board to do this. We find ourselves out of harmony with the local Board, who, so far from being a help to us, are obstructive. We simply cannot be held responsible for the management of the mine and its proper development unless the control is centred in us. At the instance of some very large shareholders, the Board snme months ago appointed an inspector, for the simple reason that for twelve months we ould not get any information. Letters were left unanswered and telegrams ignored. We appointed as inspector a gentleman known to myself, and one in whom the B?ard bad full confidence, with instructions to visit the mines and inspect the works at all times, and to report to the Board in London by letter weekly, by oable monthly, and by this means to let us know what was gDvag on. The managing director seems vary much to object to such an appointment, and is entirely at loggerheads with the inspector. The inspector cannot get access ti the books, and appears to have diffiijulty in getting access to the mines, and he is not allowed funds to send cables as instructed by the London office. He did send two or three cables, but as he had to pay for them out of his own pocket you will not be surprised to hear that he very soon discontinued doing go. Meanwhile we are not getting the required information. It will be for you to say whether the course recommended by the directors shall be adopted or not. If the resolution be passed it will have to be confirmed at a subsequent meeting. If you elect to retain Mr Brown and his colleagues we shall retire, for we cannot be responsible for the control of the mines if we have no power, and if we are to be saddled with local colleagues with whom we are not in harmony.—(Cheers.) It is a difficult and delicate position, and I wish to state absolutely that this is the position the directors tike up.

Sir John Stokes (director): Before you proceed to discuss these resolutions, let me say I entirely endorse all Sir Walter Buller has said to you as to the impossibility we were under from May last year until we sent out our inspector of learning anything that was going on. We had two delusive telegrams sent us in May as to what had been done in a fortnight's work, which raised our hopes and enabled us to raise those of the shareholders. But we never could get from that day forward a word of what they were doing. They simply left us in the lurch. As a director, I concur in what Sir Walter said, that if Mr Brown and his colleague are left in office at the mines I can have nothing further to do with them. We are quite willing to continue the trouble and difficulties we have had to contend with in managing the business for you; but without control it is impossible for us to do anything, and, therefore, I only recommend to you the resolution that has been proposed.

Mr Gisborne (director) said he coincided with all that had been said by the two last speakers. In matters of administration, where there was responsibility there must also be power, but in regard to the local Board of Direction, the Home Board found their action paralysed. Sir John Stokes: I should like to add that the result of the appointment of our inspector has been to confirm us in the opinion that the property is valuable, which is a matter of importance. The Chairman: I ought to Btate how the company came to be saddled with Mr Brown. Mr Brown had an agreement with the promoters securing him in the position of managing director for three years at a fixed salary, which was part of the bargain. The company was floated subject to that agreement ; but, as we are advised by our solicitors, clause 88 meets the case. Mr Brown may think he can ride over us for three years, and that there is no power to the contrary, but we ask you to exercise the power given by this article,

Mr Haughton (a shareholder) agreed in the policy of tho directors in regard to the purchase of Borne of the mines and the abandonment of the options of tho others. The properties must ultimately all fall to tho company, because It possessed the water rights, and was secure of the return of the deposit money hy still having Mr Brown's shares. He moved the firnt resolution as read. Mr Bigland seconded tho motion, and asked how they stood with regard to the water rights. The Chairman : We do not give them up. The resolution was carried unanimously.

Mr Haughton proposed the second resolution as read, and taid : In any company it is necessary to havo undivided authority. If there are two heads tho business is bound to cornoto grief. Our position is that we have two heads, and the question is which head is to be got rid of. Is Mr Brown to be allowed to dictate to the company and ignore the London office, or are wo going to take advantage of our articles of association and remove him and his colleagues altogetherleaving the sole business in the hands of the present directors ? It is a question of whom we have the most confidence in. Mr Brown and his colleague seem to refuse to give us any information, and even at the present time they have sent no audited accounts and no vouchers, whereby they can show a balance-sheet so as to bring it before the general meeting Under these circumstances I certainly think we should abolish the local directors.

The Chairman : I would state that since the issue of the circular the accounts and vouchers have beea received, and they .all seem to be in order. After issuing the circular I telegraphed to Mr Brown to let me know whether he had posted the accounts, and I received the reply that they were coming by the San Francisco mail, and they accordingly reached me on Saturday last. Mr Beckworth : May I ask you, on behalf of Mr Brown, as regards the 5,000 shares not yet allotted, and the money paid by the company for the options—how do wo stand now in regard to those shares ? Will the balance of those shares be delivered to him after this meeting? The Chairman : That is a matter for our solicitor, Mr Greenip, to consider and advise the Board upon. If the shaies were readily saleable at par I should have another reply, but it is too notorious that they are worth very little in the market. We have 5,000 shares to which Mr Brown is entitled on the settlement of this question, and it will be for the solicitor to advise us as to the treatment of these shares.

Mr Beet worth : What amount of cash has been paid ? The Chairman: For the "Blue Duck," L 200; " Fidelity," L 400; " North of Ireland," L7OO ; and " Morrisons," L 174. Mr Beckworth : L 1.474 in all, and I presume the balance will be arranged. The Chairman : That will be an administrative question on which the will act after taking legal advice. Mr Greenip (Snell, Son, and Greenip): I may as well answer the question at once by saying that 1,474 shares would not be tho equivalent of L 1,474 in cash. Mr Hume Webster: I second tho resolution. Ido not think the company has a chance until it is completely under the power of the directors in London. A Shareholder pointed out that by passing this resolution the company was inviting litigation from Mr Brown. The Chairman contended that Mr Brown was removable under clause 88, and that they must not grasp the nettle in a halfhearted way. Either they mußt assert themselves or Mr Brown would. His own view was that Mr Brown would fight, but whether they had much to fear from an impecunious plaintiff he left the meeting to judge. There were grounds of misconduct which might also be alleged, but into which he must decline to go. He would rather remove him without alleging any such grounds. A Shareholder pointed out that Mr Rawlins had stated in his report "that justice has been done to the property during the twelve months."

Tho Chairman : I do not wish to go behind the main question, and at this moment Mr Brown is my colleague ; as such he is entitled to a certain amount of consideration—especially as he is absent; but Ido not choose to be his colleague any longer. If charges are to be brought against Mr Brown, I would rather someone else brought them.

The resolution was carried unanimously. A Shareholder: How is it proposed to carry it into effect ? The Chairman: We have appointed an inspector, in whom we have absolute confidence. That appointment was, I understand, distasteful to Mr Brown, and I believe in a lesser degree to his colleague. Our solicitor (Sir Robert Stout) has, I believe, every confidence in the man we have chosen, and we propose to appoint him general manager, assuming that this resolution be confirmed at a meeting that will take place in about three weeks. On the ISth of this month Mr Howard Jackson will receive the pjwer of attorney authorising him to assume supreme control of the mines. That power revokes an existing power in favor of Mr Brown and Sir Robert Stout. We should have been glad to join Sir Robert Stout, but there was not time for reference. Mr Brown will probably be absent attending to his Parliamentary duties,Jbut he will be advised oi our action.

Mr Hume Webster: This will not affect your arrangements with the bank. The Chairman: Not in the least. Sir Robert Stout has made a most satisfactory arraugement. We have had a remittance from the bank, and are in a very much better position than we were before. Mr Hume Webster proposed a vote of thanks to the chairman, and said that the best proof of the value of the pioperty was the fact that the bank had taken a mortgage on it. It was very unusual for banks to lend money on mining properties. Mr tiaughton seconded the motion, which was carried unanimously, and the meeting closed. LATEST REPORT. 15th April.—Acting under instructions of Mr J. C. Brown, M.H.R., managing director in Otago (New Zealand) of your company, I visited and examined your property, and I have to report as follows :—The Blue Spur gold deposit consists of a vast bed several hundred feet in thickness that at one time formed the bottom of a lake or river, and is mainly composed of angular fragments of quartz and slate, with water-worn gravel, cemented together in some places with iron, but mainly with alum. On the southern side a valley has been eroded, which was fed with the washings from the deposit, and the lighter portions being carried away with water the gold remained, and formed a very rich deposit that was worked in the early days and knowu as Gabriel Gully. When the richest portions of this ground had been worked out the source from which it was derived was attacked, and for many years has produced large quantities of gold. Being held by mining companies in small unevensized areas, and the workings very deep, the lines of the boundaries became uncertain and difficult to define, and led to lawsuits for the recovery of gold said to have fallen on the wrong side of an imaginary line. Work was, however, carried on for a number of years, always resulting in good yields, till the valley before mentioned as Gabriel Gully became completely blocked up with immense beds of half - broken debris, the result of the workings on the various claims running their tailings into it. A company was then formed known as thn • Tailings Company, who introduced the old , system of elevating tailings in California on ■ an improved plan, which acted very well indeed, and although the immense bed of tailings had already been worked or crushed by the Spur Companies, this Tailings Com-, pany made a considerable profit out of the ; re-washing. In order to allow of this being done a tail-race was brought up through the drift, and the material was simply turned over in a few hundred feet, the gold extracted, and the tailings left, the water running off in the 4ft tail-race down the gully. In the meantime the Extended Company, who held a block immediately above the Tailings Company, having run off all their top wash down to a certain level, had to resort to the same means of elevating introduced by the Tailings Company, but were very cramped for room, and the only chance for getting their tailings away wi 8 by bringing up a deep tail-race on the rock on the same level as the Tailings Company.

Ou the rough sketch I have enclosed it will be seen that in order to attack the cement deposit which commences at A a tail-race would have to be carried up the gully in tailings, and this is now being done, with the result that up to this date the new company has only been working old worked grouud, and has, I am informed, been able to pay expenses, which speaks well for their future, as in a short time a deep face of virgin ground will bo opened from which large quantities of material have been lifted and crushed by rollers, stampers, etc., and have yielded highly payable returns. The time and money involved in this preliminary work was evidently not calculated on in basing an estimate of output, and hence the delays in getting results commensurate with the outlay involved in the purchases. _ Two cuts are being rapidly advanced in the direction of the virgin ground, and both are now in fairly (one very fairly) payable material. It may be questioned if the means proposed to be adopted for the reduction of the cement will suffice to crush it, the old companies being compelled to use rollers and stamps. The advantages that a Dew company have are : (1) That having a very high face (about 70ft to 80ft) the material will break in falling. (2) The introduction of the elevator has at the same time provided a splendid means for reducing, as the material is carried up a nearly perpendicular pipe with great velocity against an iron shield at the top and completely shattered. (3) That the open faces ready for washing have been rendered very friable by exposure, and, if any difficulty occurs, small charges of dynamite will shatter large blocks by being simply exploded on the upper surface. (4) That the decreased quautity of material put through will be more than compensated for by the great yield of gold. (5) The large supply of water available. In conclusion, I may state that although there might have been differences of opinion in regard to the moat expeditious means to be employed to open the claim, no other, with a view to future economy, could have been carried out, and on the whole I feel that justice has been done to the property; the only thing I noticed during the visit being that the gold saving boxes are set with too great an angle, as they have a very short run, and the tine gold, i fear, is being lost. The advantage gained, however, is that the boxes clear themselves much faster, and more material is passed through. For general work this matter will require attention. The nozzles were not large enough to keep the elevators fully employed. I have every canfidfnee in the future of thiß company, as the lowf r beds of cement are richer than the higher ore already worked, and I feel quite satisfied that the future yield will be much richer. I understand that your water rights are equal to 2,400 in, which, used with ordinary experience, should wash from 5 tons to 0 tons per minute, including lifting tailings and water from nozzles. This large body of water has never hitherto been brought to bear on any face at the Blue Spur like your company will have, and when it is known that this material actually paid something more than the cost of quarrying, trucking, and crushing, some idea may be gained of its richness, and the probable return when treated with the means now provided. I may state, in conclusion, that I have known this deposit for over twenty years, and that I visited the place three years ago, and also to-day, and 1 have every confidence in the future workings proving highly remunerative. —C. C. Rawlins. M.E., F.G.S., manager of the Island Block Gold Mining Company, Limited.

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https://paperspast.natlib.govt.nz/newspapers/ESD18890724.2.29

Bibliographic details

THE BLUE SPUE CONSOLIDATE., Evening Star, Issue 7967, 24 July 1889

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THE BLUE SPUE CONSOLIDATE. Evening Star, Issue 7967, 24 July 1889

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