HIGH PRICE OF GOLD

New Zealand Herald, Volume LXXI, Issue 21938, 23 October 1934, Page 5

HIGH PRICE OF GOLD

IMPETUS TO MINING AUSTRALIA'S COMPANY BOOM [from our own correspondent] SYDNEY, Oct. 12 Tlio high price that has ruled for gold this year has given a great impetus to goldmining in Australia, but more particularly to the formation of goldmining companies. The goldmining revival in Australia really dates back three years, and it is probable that there are 300 more goldmining companies in Australia to-day than there wero before tho boom period started. Many of these cofnpanies have made absolutely no return, but the calls on tho shareholders have been regular enough. It is estimated that each month tho various companies in all the States make calls totalling nearly £•200,000. In Victoria alone there are nearly 200 new companies, and according to the latest figures only 18 of the goldmining companies in that State can be classed as regular dividend payers. No new field has yet been located, and tho results cannot be regarded as anything but distinctly unsatisfactory. Tho greatest activity has been apparent on 'ho Bendigo field, but labour troubles have arisen there within the last fortnight, and work is now practically at a standstill. The best results are still being obtained in Western Australia. Reductions in costs effected by greater efficiency in metallurgical practice and improvement and extension of plants to cope with larger tonnages, have enabled tho managements of the old mines to take lull advantago of the higher price for gold. Several of the newly-floated companies in Western Australia are Hearing production, and the results are being awaited with tho greatest interest. In New Guinea science has triumphed over tho natural difficulties of tho area, and well-managed companies there have been able to earn satisfactory profits. The New Guinea group, in which so much Australian capital has beon invested in recent years, includes four dividend payers. In Queensland there arc only two outstanding mines—Mouut Morgan and Gold Plateau, In well-informed circles it is considered that the highly remunerative prico of gold is likely to continue, and because of this almost any concern designated a goldmining company receives the attention of speculators, lhe floating of new companies is almost a daily occurrence, and the promoters have little difficulty in finding people who are willing to engage m a, little gamble in gold. Gambling is tho inevitable accompaniment of genuine speculation when the prico is so ruch, but it would not bo surprising if the various Governments find it necessary to take somo legislative action that will put a stop to somo of the methods that have been employed of late. The market lias become overburdened with the mushroom growth of new companies, and it is fearedwthat many of the shareholders will never seo their money again.;.