THE GOLDFIELDS DREDGING COMPANY, LTD.

Otago Daily Times, Issue 21977, 12 June 1933, Page 8

THE GOLDFIELDS DREDGING COMPANY, LTD.

TO THE EDITOR. Sir, —The lengthy reply to my letter by Mr G. W. Thomson, as mouthpiece of Industries, Ltd., was to be expected in self-defence. I contend that the failure of the Golden Terrace Company’s dredge on Tucker Beach has a distinct bearing on the prospective profits to be derived from Big Beach in relation to boring assessments and actual gold recovery by subsequent dredging. Mr Thomson attempts to lay great stress on a slight alleged discrepancy in values, but metaphorically there is little difference between two or three of the finest of colours or one-third of a grain from six boxes. The fact that the Big Beach Company failed in its programme was entirely due to the insufficient gold contents of the materials treated. Similarly, the failure of the Golden Terrace Company can be attributed to no other cause. I certainly do not challenge the estimated capacity of the dredge. The Okarito dredge does actually dig (full buckets) at the rate of 100 cubic yards per hour with an overall average of 68 cubic yards.f Likewise the big dredge (according to the prospectus) has a 360 cubic yards’ capacity with an average of 271." But lam of the opinion that the estimated maximum is somewhat low, and in arriving at 271 cubic yards per hour I am basing my calculations on an average of 132 dredging hours weekly. Okarito sands are entirely different from the gravels of the Sbotover and require much more careful and effective treatment, and I would say without fear of contradiction that Okarito “ treats more heavy fires at 68 yards per hour than the Golden Terrace dredge would be called upon to do at 271. But to recover the largest percentage possible of fine beach gold from heavy black sand is quite another story. 1 I note in the prospectus, Management head office expenses and directors’ fees, £1750.” Now, 36,000 yards per week for 45 weeks annually give a result slightly in excess of one farthing per cubic yard for overhead charges alone, and the estimated outgoings (exclusive of that tremendous charge for depreciation, overlooked by Mr Thomson), as stated in the prospectus at £5200 per annum, bring the total cost per-cubic yard—according to the promoters’ own published figures—to 1.03 pence. Yet Mr Thomson would have your readers believe that one halfpenny per yard covers the total cost. I have every reason to believe that twopence per cubic yard is tbe irreducible minimum for a dredge of this type, in spite of all that Mr Thomson says to the contrary, unless it is the intention to run the dredge to a standstill and ultimately charge legitimate depreciation to some other source. Industries, Ltd., is by no means alone in endeavouring to shine by casting shadows over the brilliance of Okarito. It is a trap for the unwary, and I know quite well that several Okarito holders have already been “ caught.” The outstanding weakness of Mr Thomson’s reply lies in the fact that he pubfished only that particular section of my report which was most favourable to nis cause. Readers will please note the following additional extract: —

More accurate estimates can only be obtained by extensive prospecting with six-inch bores, but In my opinion sufficient has been done to warrant the assumption that the claim as a whole is unworthy of further consideration, unless the results to be obtained by the big dredge prove exceptionally good, In which case I would recommend not less than 100 slx-lnch bores to bo sunk on various parts of the claim. In conclusion, X desire to say that, all things considered, the claim has certainly some promising unworked ground available, but on the whole It Is unattractive.

It will be noticed from the foregoing extract, purposely omitted by Mr Thomson for obvious reasons, that my report in its entirety was indefinite, and further action was deferred pending the conclusive evidence of returns by the big dredge on Tucker Beach on ground of a similar nature evidently prospected in the same haphazard manner as in the case of the 32 bores sunk by Mr M'Mullan, whose assessment is accepted as irrefutable evidence of the ground values. It is now 24 years since I received a request from the editor of the Australian Mining Standard to contribute an article to that journal on. what was generally accepted and termed the “ unavoidable enrichment of prospects from boreholes.” A broken pipe as referred to in this morning’s issue over the signature of Mr M'Mullan is one of the causes, and reasonable deductions were made.

The public can now draw its own conclusions as to whether its interest will be better served by the adoption of cautious procedure or by allowing itself to be carried away by optimism. I sincerely trust for the benefit of the contributing shareholders that the claim will even exceed Mr M'Mullan’s anticipations. My sympathies, however, lie with those poor unfortunates who paid for this big dredge and could ill afford to do so, and not with the promoters and vendors of any subsequent company who accept no responsibility and reap a rich reward. Gold at £6 per ounce is a tremendous thing in their favour. Like Mr Thomson, I have no desire to continue newspaper correspondence. _ I have ventilated this matter in the interests of the investing public and intend it to be read in a much wider scope than that of the interests of Industries, Ltd. History repeats itself. Pessimism is the only cure, and I play second fiddle to no man in regard to assessing ground values by boring. As far as I am personally concerned this correspondence is closed. — I am, etc., J. M. Stewart, Dunedin. June 9. Other Letters to the Editor appear on page 9.