NOKOMAI SALE

Evening Star, Issue 21880, 17 November 1934, Page 20

NOKOMAI SALE

ENGLISH COMPANY PURCHASES ASSETS 1 TWO DREDGES TO BE USED 'An extraordinary general meeting of the shareholders in the Nokomai Gold Mining Company was held m the Chamber of . Commerce rooms last night to receive the report from the directors of the sale and the terms thereof of the company’s assets to the Nokomai Gold Dredging Company, London, and to confirm the sole. Mr F. Y. Milnes occupied the chau in the unavoidable absence! of, the chairman (Mr H. L. Gill); r . h ®, ' man read a statement which had been prepared by Mr Gill : , “The directors have called the shaxeholders together to report to them the sale of the company s undertaking and assets to the Nokomai Gold Dredging Company Ltd., London. Shareholders will remember that on June 18 1934, the directors placed before them for their approval the terms of an option which was given to Mr L. J. Stevens, of Auckland, by which, the latter became entitled to purchase the company s assets for the price of £65,000. The material terms in connection with such option are, no doubt, familiar to shareholders—viz., £39,000 was to be paid in cash and £26,000 in fully paid-up shares in the companv proposed to be formed to acquire the said assets. The option was given for a period to expire on September 1, 1934, and the consideration paid for the same was £250. Before the expiration of the option, at the request of Mr L. Hi Stevens, an extension was granted until October 1, 1934, and the price paid for such extension was £4OO. Such amended option provided that if an extension thereafter was desired _ until November 1 1934, an additional sum ot £IOO was to bo paid. These sums were all paid, and an extension was granted at the request of the option holder until November 1, 1934. , . The next incident was a telephonic communication from London to Mr J. Fletcher that the London company had been registered and that the optmn was to be taken up. Nothing official, however, was received from the company, although in the daily papers there appeared .a Press Association cablegram to the effect that the London Company had been registered. Almost immediately following this announcement a cablegram was received that matters had been held up on account of certain information received by the provisional directors in London to the effect that the possibilities of the claim as a mining proposition had been questioned, and accordingly matters were held up. Following this a request _ was made from London that a mining engineer nominated by the London company ghould he permitted to inspect and

report direct to London upon the claim. The directors apreed to this, but are unaware of tho nature of the report. On the 23rd day of October, 1934, a meeting was held between tho directors and Messrs Fletcher, Newbrugh, and M'Donald, Mr M'Donald, of Christchurch, purporting to represent the London company. At that meeting it became clear to the directors that there was little chance of the option being taken up unless tho company was prepared to accept a much smaller cash payment. A proposal was then submitted to the board of directors, which is as follows:—£15,000 to bo paid in cash by the Nokomai Gold Dredging Company (London) within seven days; tho New Zealand company to take 500,000 fully paid-up shares (paid to 2s) issued by tho new company. In these respects the directors were asked to modify tho terms of tho option. In consideration of tho company agreeing to this, Mr Newbrugh himself undertook to pay to the company £2,008, which latter sum has been received. The directors would have liked to submit these proposals to the shareholders for their approval before accepting them, but as there was not sufficient time before tho option expired to call the shareholders together in accordance with the articles of association of the company, they felt it was their duty to accept the same on behalf of the company. “ I may mention that from the facts communicated to your directors they were satisfied that if the oiler had not been at once accepted all negotiations would have been off, and the company would have been in the position of starting do novo with heavy liabilities, with a _ possible expensive Supreme Court action, and the necessity of completely revising the method of working tho claim, which in itself must of necessity have entailed borrowing by the issue of debentures _ for a large sum of money. In these circumstances, your directors felt that the offer should be accepted, and accordingly did so. It is worthy of mention that on the actual price in comparison with the option, the new offer is £67.008, as against £65,000. “The deeds of complete release from the Vulcan Steel Construction Company Ltd., and Industries Ltd., from all claims those respective companies might have against your company have now been executed, and are in the hands of the directors. Three thousand pounds have also been received on account of the purchase money, and the balance of £12.000 is expected almost immediately. Tho position is that tho company has now paid all its debts from the money received, and its liabilities to tho Vulcan Steel Construction Company Ltd,, and Industries Ltd. have been eliminated by tho said deeds of release. “ Shareholders will receive as soon as practicable Is per share in cash, and the directors propose on behalf of your company to hold the said 500,000 vendors’ shares for such time as in their discretion they think fit. Tho directors accordingly ask shareholders to leave such matters entirely to the board, i They feel, after careful consideration, 1 that these proposals are in the best in- ■ terests of the company and of the I shareholders.

“ X might also mention that at the request of tho Auckland solicitors lor the Loudon company tho directors, of your company have agreed not to divide tho balance of the cash held by the company amongst its shareholders until tho transfers of the mining properties’ have been completed and registered for a period not exceeding three months. It is needless' to say that the directors since thev last met tho shareholders have experienced much anxiety and have devoted a tremendous amount of time to tho company’s affairs, and they trust that the shareholders _wholeheartedly approve of their decisions. “ \s to tho directors’ plan regarding the future holding of these shares, they feel that tho matter should bo ott entirely in their discretion, and they can assure the shareholders that thou sole concern is the latter’s interests. They are firmly of tho opinion that as a dredging proposition this property is an outstanding one, and that, propel ly and efficiently worked, it will prove a very profitable proposition to all concerned. For these reasons they arc optimistic as to tho success of tho new company in working this claim and that tho shares will ho much sought after They propose also to allow tho company’s shareholding. to remain on the London register, as in doing so the company will obtain the benefit of tho high exchange rate.’’ , Mr It. Cuddle moved that the meeting confirm the action of tho directors for completing tho sale of tho assets to the London company. , In answer to questions it was stated that the capital of the English company was £450,000. and that it was understood that two dredges were to be placed on tho property It was stated that the local company would get all the cash the English company was providing, and was getting something additional. All the other vendors were taking fully paid up shares for their interest. The Chairman stated the purchase money would be in New Zealand currency. ~ ~ v , • _ Mr Newbrugh said tho English company must be permitted to spend the money in the interests of tho shareholders as a whole. The English company would investgiate the property and would then proceed to adopt a policy for working it. _ ~ , The Chairman said that the English would have more money at stake than the local shareholders, and it could bo recognised that the purchasers wouJd do their best to make a success of tho venture. , c Mr Newbrugh said that the cost of cablegrams to London in connection with the negotiations came to £1,300, and that they were charged 9d per second for telephonic conversations. Mr Newbrugh said that the financcrs at Home had had to be thoroughly satisfied, and that the negotiations had lasted over six months. While tho London people should be satisfied with the proposition, he thought that the shareholders had also something to he thankful for. Ho was of opinion that the London people intended to put a dredge costing at least six figures, and it might put on two. Mr J. S. Sinclair said that until the . Now Zealand company went into liquidation he saw np reason why share-

holders could not' dispose of their shares in the Now Zealand company. Mr R. G. Hudson moved—“ That the directors he authorsied to hold the 500,001) vendors’ i'ully-paid-up shares for such lime as in their discretion they consider necessary.” The motion was carried. Mr Sinclair made a comprehensive statement regarding what the directors had considered advisable, and a motion congratulating them on their work and also Mr Kum Roy (the secretary) was carried by acclamation.