MINING VALUATION

Greymouth Evening Star, 19 April 1938, Page 2

MINING VALUATION

MR. FERNER’S DECISION Giving his reserved decision on the objection by Grey River G'.D. Coy. to the valuation placed on its mining property in Inangah.ua County, Mr. Raymond Ferner, Warden, said: — This is an objection by the Grey River Dredging Company Limited to the Valuation List of Mining Property for the Riding of Antonio’s, Inangahua County, on the ground that the objector company’s mining properties (a) Special Dredging Claim License 8522, Section Gl3l, and (b) Special Dredging Claim License 8523, Section £l3O, are assessed at the rateable value of £130,105. The objector company says that the rateable value is only £24,754. The revelant facts are as follow: — Some time prior to 27/1/37 the Rimu Gold Dredging Company Limited had obtained certain options from a. number of settlers to purchase certain freehold and leasehold lands near Ikamatua, and had caused to be expended the sum of £14,000 in boring these areas and certain adjacent areas. This company had also acquired mining rights in these land's, the mining titles being the Special Dredging Claim Licenses above referred to. The Rimu Company was also concerned in the promotion of the objector company which was incorporated on 27/1/37 with the objects of acquiring these freehold and leasehold lands and mining titles from the Rimu Company and of constructing and operating a modern gold dredge thereon. On the same date, the Rimu Company entered into an agreement of sale and purchase with one Allan Bruce Buxton as trustee for the objector company. By this agreement, the Rimu Company agreed to sell these areas with the relative mining titles together with its “right title and interest in and to the design and preparatory work connected with the construction of the proposed dredge." The price, was £lOO,OOO, and the purchaser was also bound to satisfy the obligations of the Rimu Company in respect of the purchase price of the freehold and leasehold lands referred to on the exercise of the option. This involved an additional £54,543, making a total purchase price of £154,543. This agreement for sale and purchase was subsequently adopted by the objector company on 2/3/37. The valuer of mining property for the Inangahua County Council then entered the property in the valuation list of mining property at the rateable value of £130,105. To this entry ihe objector company objects. The valuer, Mr. William Auld, was called by Mr. Hannan, and gave evidence in support of his valuation. He stated that he had taken the purchase price paid by the objector company to flic Rimu Company as the basis of his valuation. From this figure of £154,543 he had deducted £14,456 as “an allowance of 10 per cent, to cover increased costs of operation since the company’s prospectus was issued.” He had also deducted, a further £9,982 which the parties agree is deductable in respect of the freehold land values, and thus arrived at his rateable value of £130,105. Mr. Buxton, for the objector company, strongly objected to this mode of arriving at the rateable value. He made four submissions, which he stated as follows: — 1. That the actual value of the mining claim is the market value of the land, plus the sum expended by the vendor in acquiring his miningtitle.

2. That the £38,813 paid by the Rimu Company to the original vendors of the land was the highest possible, market value of the land. (The sum of £38,813 here mention by Mr. Buxton represents the total of the sums actually paid to the vendors. The sum of approximately £15,730 representing the balance of the £54,543 went to an intermediary—one Jones, for services and expenses). 3. That the price paid by the objector company to the Rimu Company was in respect of a sale of the whole of the organisation researches and plans of the Rimu Company in the undertaking and not just a sale of a mining property. 4. From the sum of £38,813 actually paid to the original farmer vendors, a sum of £14.000 must be deducted, being the cost of labour expended in developing the land to make it of value as a mining property.

After reviewing the respective contentions, Mr. Ferner said: — In the result, the objection must partly succeed. I find that the rateable value of the mining property is £120,811, made up as follows: — £ Capital value 154,543 Less 13.750 £140,793 Less deduction valuation of freehold as agreed between parties’ ~ .. 9,982 £130,811 Less Improvements .. .. 10,000 Rateable value .. .. £120,811 Messrs. A. B. Buxton and M. B. James represented the objector, and Mr. J. W. Hannan appeared for the valuer. '