THE BLUE SPUR CLAIMS.

Otago Daily Times, Issue 8112, 22 February 1888, Page 6 (Supplement)

THE BLUE SPUR CLAIMS.

Mr J. C. Brown has placed us in possession of certain particulars in relation lo the purchase of tl}o Blue Spur mines by the syndicate who have JsMceeudtd in floating a company to work the amalgamated claims. The position is that Mr Brown made a tala ct a certain price, estimated to hs sufficient to satisfy the claimholders in accordance with their several agreements, subject to the purchaser being able to iioat a company. It was proposed and is arrange! that the company shall have a capital of £130,000, £15,000 of which is to be working capital. The original terms arranged with the syndicate were that the purchase money should be paid in cash; but in order to provide for tho por^ible contingency of there being only a portion of the shares applied for right o/f, n modification has been agreed to to the effect that the company should proceed to the allotment to bCioy as £30,000 worth of share* are applied for, the baiancP of the purchase money over and above the amount of shares allotted being received in paid-up shares. It is not considered likely that only this amount will besubscri bod, but the syndicate desired to go on the market with the assurance to intending shareholders that the owners of the properties have suliicienc confidence in their payable nature to accede to these

With reference to the negotiations with the Miues Company in London which eventually broke down, uiul about which there have been so nmuy conflicting stories, Mr Jjrjaii has given us a fi.il .vplanalion, and submitted original documents iv substantiation. The basis of tho negotiations was a memorandum signed by Mr Brown, in which he describes the several properties at the Blut Spur, and names £56,000 as the price for the whole. Amougthesepropertie-sare the Gabriel1!) (iully Tailing Co."s ground, and the Waipori and Tuapeka water races. That the Mines Company must have been fully aware of this is clear, because on tho margin of the memorandum Mr Philpott, the managing director, has pencilled certain queries, which are there in his own handwriting. There is, however, even more direct evidence—namely, a letter from the solicitors io the company in which, in reply to Mr Brown, at a eubssquent period, they give the schedule of deeds which had been handed to them on behalf of the company in order to prepare the drafc Mgrcenmnt of purchase. This schedule includes the three properties limned, ■..■aicli Mr LoiigOKtcoin,the expert appointed by i'~f i:orr.p;u.y, vvnt.; at L^.iiei.ue .^atcd wironot Hi tii.: li.it ot prop, rti; s Tcr^rd.::! to him ou which lo report a.s to the aggregate valuu. How surh a sciiuiin ujiitake, in his instructions coul'i Ltivv. occurred is auogcth'T inexplicable, ft uiUMt reasonably lie mpposed that a copy of the memorandum referred to would have beeu forwarded to him.

Another very important point o:i which Mr .Lonybottom was incorrect]/ instructed was as to the average annual yield of geld from the cement claims under offer. ~He asserted that the yield hid been represented to the company as averaging £30,000 a year net over ex-pen.-es. Ikf-rence to the original documents shows that the statement made to the company was that £180,000 had been realised from the gold over aud above working expenses in a little over 10 years, i.e., at the rate of about £18,000 a year. There is no question as to Jlr Longbottom having been wrongfully informed in the matter. A few days after his instructions had been despatched to Melbourne, Mrl'hilpott read over the covering letter from hi 3 letter book to Mr Brown, who si; once directed attention to the mistake mi to the net profits therein stated at £30,000 it year. Mr Philpott thereupon re- ' ftrreil to Mr Brown's memo, am! other papers, and acknowledged that a blunder had J.rai wade, promising to at onco advise Mr Longbottom to that effect. .(t must ba presumed that he never did so. The interviews with the Mines Company were in the presence of a third person, now in Dunedin, who entirely confirms Mr Browu's statement of what took place. These vexatious mistakes were quite sufficient to account for Mr Longbottom'e cable. As they had tho result of stopping further negotiations, Mr Brown submitted the properties to a second syndicate, who agreed to purchase conditionally on one of their number proceeding to the colony in the course of a mouth or two to inspect the claims, kc. This would have involved a delay of some months, and aa Mr Brown had been interviewed by a third set of capitalists to put the properties under offer to them, he did so, with the result that ho sold at the price' and subject to the provisions previously stated. Air llrown has shown us letters and documents which prove his complete straightforwardness in all the negotiations which have taken place.