FUTURE OF NOKOMAI

Otago Daily Times, Issue 22292, 19 June 1934, Page 4

FUTURE OF NOKOMAI

FORMATION OF NEW COMPANY SHAREHOLDERS CONFIRM OPTION

The action of the directors of the Nokomai Gold Mining Company, Ltd., in granting an option over the property, ■plantj and ■. claims of the company was confirmed at the annual meeting of shareholders last night. About 50 shareholders attended ' the meeting, over _wbich the chairman of directors (Mr H.L. trill} presided. ■ ' ~ , . The report before the meeting advised shareholders that the excavating machine, by means- of which it had been- hoped the property would be profitably worked, had been found unsatisfactory and unsuitable, and that digging by this means had ceased on April 12. The partial yexcavated' paddock %vas being worked by means of hydraulic elevators. The director's'added that they had been in negotiation' with the representatives of a London mining- syndicate, and, at his request, they. had. granted an option to purchase the company's property, plant, and claims, the terms of :the option being £39.000 cash in New Zealand currency and £26,000 in fully-paid-up shares of the value of 2s each in the company. The granting of the option'had been made-conditional on the shareholders approving it. . CHARMAN'S ADDRESS. In moving the adoption of the annual report and balance sheet-the chairman stated fhat'from a perusal of the profit and loss atcount shareholders must feel that the results of. the year's working were far from satisfactory. The total realised value of the gold won had.been £5620 9s Bd, while wages for working the claim had amounted to £5137 9s Id. With the addition of the other heavy charges shown in the account, the result was a loss of, £6659 ■ 17s 6d. The directors attributed this loss principally to the fact that the drag line machine supplied by the Vul- ' can 1 Company had been both unsatisfactory I and unsuitable. In consequence of this, the directors had taken legal advice as to the company's position regarding the contract with the Vulcan Company, and, while'it was not desirable to enter into the details of the opinion, they were ad-vised'that-the Nokomai Company had a favourable chance of obtaining some | redress. ."'.-" ■ ■■ ~, ! During the negotiations with representa- : tives of the Vulcan Company and Industries, Ltd., with a view, if. possible, to effecting" a satisfactory compromise of the claim and all other matters in dispute, j the chairman added, a request had been made by Mr L. J. Stevens for an option over the claim, water rights, plant, and machinery. The directors had been informed that Mr Stevens had been approached by a representative of an English syndicate to obtain, an option from the company. After consideration it had been decided, subject to the shareholders approval, to give an option. The chairman then read to the meeting the terms of the option, which, it was shown, had been granted for a consideration of £250 and under the three following conditions:—(l) That it should be subject to the approval of the shareholders, (21 That the Vulcan Steel Construction Company and Industries, Ltd. should agree to postpone during the term of the option all rights, claims, and disputes between them and the Nokomai Company; (3) That if the option was not accepted the Nokomai Company reserved the right to take action or defend any. action against or by the other companies with respect to all matters in dispute between them. It was also agreed that the option should remain m force until. September 1 next.' .: •Shareholders would see, the chairman added, that, if the option was taken up, they would receive in the. vicinity ot Je per share in cash and fully paid-up shares in the new company,' equivalent/ to the number of shares held by them in the Nokomai Company, the shares each having a face value of 2b. ' '■!■,. ... It was the directors' suggestion that part of the purchase money should be treated as paid in fully paid-up shares, as it was' felt that many shareholders might still desire to retain some interest in the company's valuable claim. bo that the directors might be satisfied that the option holder was not overloading the option to the English syndicate, they had investigated matters further and had m their possession copies of document* which had satisfied them that this was not being He read also a letter received from Mr Headley Williams, the English prompter, who had left for England particularly with respect to/.the option. It would be seen, he stated, that Mr Williams was optimistic-that the option would be taken

Since it expired on September 1 the company was not losing time in cleaning up the present'paddock which was being worked. In terms of the .option, the Nokomai Company- was entitled to all gold won before the option was accepted. The directors had not been disposed _to give the' option holder a longer time for accepting it, as it had been felt that.a long termed option might embarras s the company as it would be prevented.during that period from] working the claim. Shareholders would also notice that one of the terms' of the option was that if the option was taken up the disputed claims by the Vulcan Company and Industries, Ltd., which amounted to approximately £11,000,' were to be written off. If the option was accepted these claims would be settled by the option holder. The condition and unsuitability of the drag line plant was such that, if the option was not accepted, the directors could not recommend a continuance of the working of it upon the c aim. Records taken had shown that it had not been able to function to anything like the capacity of yardage warranted by the Vulcan Company, and to this was largely attributed the unsatisfactory result of the year's operations. Accordingly, the directors recommended the shareholders to approve of the option. ' The motion was seconded by Mr JtL. M'Dowell Smith. PROPOSALS DISCUSSED. ,

At the reqnest. of the chairman, the company's solicitor, (Mr J. S. Sinclair) made an explanation of the proposals to the shareholders. ' He ' stated that' the option would be resold by. Mr Stevens to the Mineral and Mercantile Trust, Ltd., for a price equivalent to. £75,000. This showed a difference, of £IO,OOO on the price to be paid to the Nokomai Company, but as. £SOOO of the £75,000 was to be paid in cash in London the vendor of the option would receive an additional £IOOO by reason of the rate of exchange, so that, 1 in all, he would "receive £II,OOO. This sum would be sufficient to liquidate the claims of the Vulcan Company and Industries, Ltd. , • ' , , Shareholders were not slow to take advantage of the opportunity offered to them when the chairman invited questions. ;'•'"" ■ '■'. ' i ■■ Dr Newlands asked what was to happen to the excavating machine. '■'■■ The chairman: I don't know. That will be a matter for the new company. A voice: Put it in the Pioneers' Hall. Another shareholder asked whether the directors would have any definite scheme if the option were not taken up. "I think we shall have a scheme,' replied the chairman, who added that the directors had investigated the possibili: ties of working the ground by driving on the principle employed by tlhe King Solomon Company. . Mr A. M'Millan: Could that be done on the present capital? | The chairman said that before the I scheme was adopted the directors would, have to go into the matter with the shareholders. It might be necessary to i ask them to take up a certain amount ! in debentures. The advice which had i been received indicated that 25 per cent. I of the Gold won by driving would be i profit. . . . , ' Mr F. Y. Milnes said that, with the i chairman and the secretary, he had visited the King Solomon mine, and had found that a good deal of the country there : was similar to that at Nokomai. • He ; claimed that there would be certain ad- ! vantages in working Nokomai as the matej rial at King Solomon had to be lifted I 185 feet, whereas at Nokomai there would be a straight pull out. A shareholder asked why, in the face of these facts, the directors were still prepared to give an option. • Mr Milnes replied that if the option were exercised the disputes would be cleared up. He had no doubt that by dredging, which was the proposed method of working, the ground could be treated more cheaply than by driving. As it

was, shareholders. would get 3e a share back in their pockets and would retain their shares.

Another shareholder inquired what would happen to the £II,OOO in disputed accounts if the option were not exercised.

The chairman: That may end in litigation. It is a costly thing, and we want to avoid it. The motion was carried. OFFICERS AND REMUNERATION. The retiring director, Mr H. M'Dowell Smith, was re-elected. Messrs W. A. Mitsqn and Co. were re-elected auditors, their remuneration being reduced from £25 to £ls. When the chairman asked for a resolution with respect to the remuneration of the directors a shareholder asked whether that also would be reduced. The chairman: You cannot reduce it much. I personally have not received a penny out of the company since I joined the board. It was agreed that the directors remuneration should be at the same rate per annum as during last year. OPTION CONFIRMED.

A motion that the action of the directors in .granting, the option should be confirmed was moved.by Mr R. Cuddie. ; Mr L. Deans Ritchie asked whether any limit had been placed on the capital of the new company.' •■■' He was informed that no limit had been specified, and it was stated that the dredge might cost £130,000 and the capital might be from £250,000 to f 300,000. Mr W. G. M'Donald, who was present by invitation as the representative of the Mineral and Mercantile Trust, said that if was not possible to fix the capital until full information was available in Lon- - : Mr Milnes stated that an English company would not put £200,000 or £300,000* into the proposition and place upon the ground a leviathau that would not pay a dividend.—("Hear, hear.") Mr Harman Reeves, while supporting the. resolution,. claimed that the capital of the new company should have been stipulated. He did not believe that Noko-. mai could be worked by driving, and the present proposal must be adopted because it was the best thing for the shareholders. If the option were renewed a sum of £2OOO or even £SOOO should be asked. He knew of'others who wanted the property. He described the option as an extraordinary documentMr M'Donald said that there was no intention whatever of overloading the company. If would be as fatal to overload it as to under-capitalise it. If the option were•extended there would be no objection to paying the sum mentioned by Mr Reeves. He thought, however, that the. whole matter would be concluded before the end of July. The motion was carried. .A motion authorising the directors, in the event of the option -not being exercised, to negotiate for a compromise in respect- of the claims in dispute or to take what action they thought fit was also carried. ~-''iV«n Mr Reeves was assured by Mr M Donald that there would be no restriction on the sale of vendors' shares, and that free dealing in them .would .be permitted at the earliest moment. Mr M'Donald, in conclusion, announced that, if any were in doubt, he would purchase their shares at par at any time in September that they cared to nominate. VOTES OF THANKS. The directors, secretary, and staff were accorded votes- of thanks for their cervices during the year