MINING OF GOLD

Hawke's Bay Tribune, Volume XXIII, Issue 16, 30 December 1932, Page 9

MINING OF GOLD

HIGH PREMIUM ON SALE COMPANIES’ BETTER FORTUNES. YEAR OF GREAT ACTIVITY. The mining market during 1931 offered a sharp contrast to the general conditions in the investment market and tne rapid change in the fortunes of many gold mining companies was the outstanding feature of the Stock Exchange year (states the “New Zealand Hcrald”). In continuation of the movement which began in 1930. the appreciation in the price of gold, which rose to the record level of £6 10s 8d an ounce, brought all classes of gold mining scrip to the forefront. In addition to the premium on the sale of gold, ranging fom £2 to £2 10s an ounce, companies continued to receive the advantage of the exchange premium on the transfer of the realisation funds to the Dominion, and in consequence of these factors those who had been merely paying their way began to earn handsome profits, while others consolidated already sound positions. Interest was immediately stimulated and turnover during the period registered a lage increase. Dealing in the shares of the more outstanding companies at enhanced prices was accompanied by the promotion of many new companies, a number of which were approved and listed by the Stock Exchange. GOLD PRICES IN LONDON. The year opened with gold worth £6 Is 4d an ounce in London. At March 31 the value had declined to £5 8s lid, but there was a rise at the end of the next quarter to £5 14s 7d, with a further appreciation to'£s 19s 5d at September 30, followed by the record high level of £6 10s Bd, which was eached on November 30. At present the value has eased to £6 3s 6jd. One of the most spectacular examples of the effects of these movements was afforded by Blackwater Mines, Ltd., an old-established English company operating near Reefton. For some years this company had been earning a nominal profit with a production of around 2000 ounces a month. The whole of the premium on this output went to swell the company’s nett earnings, with the result that the d'rectors announced a dividend of approximately 30 per cent, for 1931 and have already paid approximately 20 per cent, as an interim distribution in the current year. In response to this the shares appreciated considerably in value, rising from 4s to 22s in the course of 12 months.

Similar conditions were enjoyed by Alexander Mines, Ltd._ also at Reefton, a company which commenced operations within the last four or five years. Dividend payments were commenced in January last and since then shareholders have been paid £22,500 in six dividends on a paid capital of £60,000. During the same period the shares have appreciated from 9s to 225. Okarito Beach Dredging (South Westland) and, recently, King Solomon (near Gore) are other new companies on the dividend list, and their prospects are considered encouraging. THE WAIHI COMPANY. The Waihi Company, the principal gold-producing company in the North Island, has naturally benefited considerably on its large output. Reserves had had to be raided to maintain the usual rate of dividend in 1931, but the increase in the value of gold is enabling this leeway to be recovered. In addition, ore which was unprofitable to work at the lower price has become attractive for development and, under present conditions, is yielding a payable return. Considerable London buying of Waihi scrip set in in November, when the shares advanced to 19s lid on the Auckland market. The movements in the market of leading gold mining shares during the year is compared in the following tables:—

King Solomon ... 0 IHi 0 2 6 THREE YEARS’ DIVIDENDS. During the last three years the following amounts have been distributed by the companies in dividends to share-

Waini Junctn. b,uut> o,»uo o,muo tlnterim distribution only. Apart from the improved finances of producing companies increased-prospect-ing and fossicking on the auriferous areas brought about a general revival in the industry. Tremendous activity developed in the South Island, where mining is practically confined to dredging, sluicing or the working of conglomerate deposits. These operations offer more attraction than the reefs of the North Island, chiefly because of the ease with which they can be measured up and production estimated. Nevertheless, considerable prospecting is being done in the Coromandel district, in which some encouraging finds have been made. I In the South Island, Westland and Central Otago have been the chief centres. In the latter area the Nokomai dredge is expected to commence operations on a big sacale early in January, while in March work is to be commenced at Wetherstones, another important field. The Gillespie’s Beach Company, which is to dredge in South Westland, also expects to commence dredging early. There has been some interest in the Auckland market in Australian companies, which for similar reasons have enjoyed improved fortunes. The chief interest, however, lies in the New Guinea fields, where several big concerns have commenced dredging on a large scale with satisfactory results.

Dec. £ 1931. Dec., 1932. s. d. 8. d. £ Alexander, 13/6 pd. 0 9 0 1 2 0 Blackwater 0 4 3 1 1 6 0 16 2 . 0 19 0 Waihi Junction .. 0 3 7 0 3 3 Golden Dawn .... 0 7 2i 0 4 10 Okarito 0 11 0 0 8 7

holders:— 1930. £ 1931. £ 1932. £ Alexander ... — — 22,500 Blackwater .. — 18,749 12,500t Golden Dawn —— —— —— King Solomon — — 3,250 Okarito —— '■■■' 6,000 Waihi 99,181 99,181 49,590$ Waihi .Tn n etn. 6.906 6,906 6.906