WAIHI G.M. COMPANY

New Zealand Times, Volume XLIX, Issue 11246, 26 June 1922, Page 3

WAIHI G.M. COMPANY

" ENORMOUS TAXATION ” FINANCIAL POSITION EXPLAINED BY CHAIRMAN. ORDINARY GENERAL MEETING. At the last ordinary general meeting of the Waihi Company, held in London, the chairman, Mr A. M. Mitchison, said:— I am sorry to say that the results of the working year 1921, on the whole, have not l>een satisfactory. During the year* 104,042 tons were crushed, and compared with 159,308 last year, an increase of 4734 tons; but we only obtained £307,972 as against £341,432, a decrease of £33,460. This decrease is mainly due to the fall in the values of the precious metals, for the value of the bullion produced at the mill this year—on mine valuation—was only £2906 lees than last year. The stocks were accumulating in the refinery at the end of 1920 beyond the amounts desirable for keeping the plant in the best working order, and we had a special clean-up early in 1921 yielding' £40,322. The value of the power supplied by tlie New Zealand Government in terms of the purchase of the Horn Hora undertaking appears at £10,625, but the gross interest, etc., is £28,344 instead of £31,847, the decrease of £5303 being mainly due to the return of capital. The result of the whole is that the receipts above the line are £385,264, as against £383,904, an increase of £1360. INCREASED EXPENDITURE. On the other side the expenditure is £278,670, as against £237,903, an increase of £41,577. This at first sight is very unsatisfactory, but there have been special causes. A great deal more development and exploratory work has been done, and not only has this item, development work, increased by £9489, but the exploration has also affected other items, so that the policy of the most active development which is now being pursued by the company involves an increase which is very largely in excess of that figure. Another cause of increase in mining costs is that it has been found advisable to keep a good deal more broken ore in the stopes than w r e used to keep, and the expense of breaking this has tended to swell the mining costs. This will not recur, as we shall get the benefit later on of this year's expense. Another cause of increased expenditure, amounting to about £BOOO, has been the conversion of rock drills from dry to wet drilling, rendered necessary by recent New Zealand legislation. The law without question was passed with the best possible intentions, and 1 with an earnest desire to improve the health of the miners, but there is much doubt as to how far it will accomplish this. This £BOOO is an item which will not recur, although wo are always in danger of some additional impost or another, and a peculiarly unfair extension of the silt tax is now’ threatened.

The fall in genoral prices corresponding to the fall in the price of gold has not affected wages during the year 1921, and the prices of our stores .also have been high, but in both these directions we look for reductions during the present year. Tho rise in the cost of living caused; by the war necessitated a rise in wages, and it is only fair that the subsequent fall in the cost of living should be accompanied by a corresponding reduction in wages.

KEEPING DOWN COSTS. Tho New Zealand management thoroughly appreciates how vitally important it is that costs should be kept down, and every effort will bo made during the present year to reduce the expenditure, but it* is much more important that development and exploration should be pursued with the utmost vigour, for it is on the question of what ore bodies we shall find in the depth that the future of tho mine and the company depend. You will notice that 74,965. tons of new ore (net weight) were developed and that 171,670 tons (net weight) were sent to the mill, so that there ia a decrease of 96,705 tons of the ore in our reserves. This shows that if we only develop 70,000 tong a year our general reserves will only last four years, whilst if we develop less than 70,000 tons each year they will not last so long. After a lengthy review of the work in the min© the chairman said: Our future is utterly uncertain, but although there is* nothing to indicate a probability of going back to anything like our old prosperity, yet there is always a chance, though it may be a' email one, and at any rate I thought we were justified in hoping that in one way or another we should get a fair amount of fresh payable ore out of the old mine, though nobody could eay how much. FINANCIAL ASPECTS. Dealing with financial aspects, Mr Mitchison said: “At the general meeting in May, 1920, I explained that it was proposed as a compromise between the different views held by various sections of that £50,000 should bo allocated as a fund available for new enterprises. A great many Expositions have been suggested to us, ut nothing sufficiently attractive to induce the board to embark any of the company’s money. I am glad to say that we have npt had to trench either on the mines development account nor on the dividend equalisation account this year, although we should have been obliged to do so if it had, not been for the refinery special clean-up. You will note that at December 31st there was a depreciation of £27,838 in our investments. At tho end of 1920 the depreciation was £58,000; and as we had to realise £248,500 to repay capital during a .period of depression I think a reduction of this depreciation to £27,838 is satisfactory, and it is even more satisfactory to say that at May 3rd that depreciation had entirely disappeared. Of course taxes are enormous, we are distributing 20 per cent, on our capital in dividends, and we had to pay 18! per cent, in taxes.” The chairman’s concluding remarks were devoted to an. appreciation of the work of the New Zealand staff. * V The report was adopted unanimously, having been seconded by Sir AVestbv Percival.