CAPITALISATION OF MINING COMPANIES

Otago Daily Times, Issue 21990, 27 June 1933, Page 8

CAPITALISATION OF MINING COMPANIES

TO THE EDITOR. •,. Saturday's issue there appeared a letter under the.above heading from Mr F. R. Thomson on behalf of the directors of GillespieV Beach Dredging Company. From it I make the following extracts: — 1. The directors have studiously avoided booming the shares by undue publicity of details. 2. Shareholders who even pay 100 per cent, premium for Gillespie's Beach shares are favourably situated, for if dredging results show an average of lOd per yardi shareholders' capital will be returned in about a year and a-half. If the latter statement is not "booming" these shares, then I am at a loss to understand what constitutes " booming." Let. us assume that the official statement would prove substantially correct and analyse the results on that basis: Capital, £30,000; life, 30 years; premium, 100 per cent.; capital, £60,000, returnable each one year and a-half. Total estimated divideuds, £1,200,000. Allow £6OOO per annum for operating expenses and maintenance; total gold in sight, £1,380,000. If we take gold at £4 per ounce, the recoverable amount on the above basis would be 345,000 ounces.' Allowing 46 weeks annually for reasonable dredging time, the average Qver the whole life of the claim works out at 250. ounces weekly. Compare these figures with the records of the Riniu Company, the expenses of which average about £7OO weekly, operating on ground reported to be only worth from 10 to 15 cents per cubic yard. One wonders why the Rimu Company "turned in" Gillespie's Beach after a thorough prospecting.—l am, etc., Critic.