REVIVAL IN MINING

New Zealand Herald, Volume LXX, Issue 21470, 19 April 1933, Page 7

REVIVAL IN MINING

DOMINION POSSIBILITIES NEED FOR THOROUGH TESTS ' PROTECTION OF THE INVESTOR Features of the present revival in the • goldmining industry were discussed by Mr. H. It. Macdonald, a member of the Auckland Stock Exchange, in a recent address on the work of the Stock Exchange. Mr. Macdonald said New Zealand could claim to have been the cradle of working methods which had proved of value to goldmining all over the world, but it had been left to other countries to develop and improve the methods. Instances were the cyanide process and dredging for gold. Central Otago almost certainly saw the first' gold dredge in the world. At first it was a "spoon" dredge and later developed into a "bucket" dredge. A fairly high standard of machine was evolved before a slump set in, after which no material advance took place. Engineers and designers gadually left OtagO, some going to the tinfields of the Malay States and some to California, Mr. Macdonald said. . In both these countries modern giants driven by electric power were now working and they could dig far more than 250,000 yards of alluvium a month in some cases from depths of 80ft. and more. The working costs were frequently as low as ljd a cubic yard. Until recently, nothing like these machines had been seen in New Zealand, except perhaps one built by American capital on the West Coast. Investment Not Speculation The most important factor influencing investment in alluvial mining was the thorough testing of claims prior to raising capital to work them. Goldmining ventures of the sort should be presented to the public for subscription in a manner that demonstrated them to be investments rather than speculations. Years of experience in many parts of the world had proved the feasibility of this and there was good authority for saying that even in New Zealand the first claim to be thoroughly tested on those lines had produced so far, after 14 years' working, just 5 per cent more gold than was expected from the tests made. With tests completed in a thox-ough manner, estimates could be given of the quantity of alluvium to be dealt with and the depth of the bottom; the capital required to place a machine on the claim capable of handling the ground at a specified rate per annum; the life of the claim; the average nold content a cubic yard and its value at £4 an ounce and the percentage of gold it would be possible to save or recover; the cost of production a cubic yard or an acre; the overhead charges and the L annual amount of profit required to be set aside for redemption; and the estimated real profit available for L dividends. "Give Public a Chance" "This is the sort of proposition which brokers hope will do much to revive the goldmining industry and at the same time give the public a, chance to subscribe with some confidence," said Mr. Macdonald. "What the Stock Exchange is anxious to discourage is the flotation of companies by promoters who appeal to the credulity of the public with alluring prospectuses containing little, if any, reliable information founded on technical knowledge and givon by unbiassed and disinterested authorities. Such prospectuses usually have failure written on the face of them, although it may not be discernible to the unsuspecting public. These companies will not help goldmining and will retard the development of genuine propositions." . Mr. Macdonald said not many forms of goldmining lent themselves to so cheap a method of preliminary testing as an alluvial claim, and it was unfortunate that mining as it was known in Auckland was of the more difficult type. Sometimes heavy expenditure, or at least sufficient capital to commence mining operations on a small scale, was necessary before development was adequate to warrant any reliable estimate being made of values in the mineral deposit. Any companies floated -to undertake preliminary, work must allow investors to subscribe on a more or less equal footing .and must not be loaded heavily by vendors. ' t