MINING VENTURES

Otago Daily Times, Issue 22293, 20 June 1934, Page 12

MINING VENTURES

'FLOTATION OF COMPANIES THOROUGH TESTING ESSENTIAL A warning to the investment public to insist that any mining company should thoroughly test its claim before asking the public to subscribe the capital for working it was given by Mr A. H. Kimbell, former Uncler-seerctary to the Mines Department, who arrived in Dunedin last night. In season and out, said Mr Kimbell, he had during the last few years advocated that more intensive testing should be carried out before operating companies were floated. The public was now wiser and more discriminating as to the real value of the gold mining projects submitted to it for investment than it was two or three years ago. During that time many companies had been floated without on adequate testing of the ground. Most of them had been promoted on shilling shares, and millions of such shares had been disposed of during tbc past two years. In the majority of cases no dividends had been paid, and the shares were at a substantial discount. The day of what he termed the “four peg” company—a company which had nothing to offer but an area of laud which had been pegged out, but which had received no testing—-was, he believed, gone by. As proof of his contention that the offering of such, companies for subscription of capital had caused much damage to mining, Mr Kimbell referred to the areas on the Cromwell Plat. The position of stalemate there he attributed to the fact that operating companies and not prospecting companies had been floated in the first instance. Thcre was no possible excuse, he claimed, for failure in mining any alluvial area, with the aid of modern methods and expert guidance, provided that first of all the land was adequately, efficiently aud reliably tested by men who understood the business.

During the past few months an Australian company had been intensively boring an area north of Greymouth, and that company, in conjunction with a New Zealand company, had put down 450 boro holes, which was a record for New Zealand in testing of that_ nature. Interest was also being taken in more extensive testing areas in Central Otago and Southland, Knowing what was being done, he believed that he was in a position to say that more testing was being undertaken in these districts than at any other time in the last 20 years. In fact, one of the troubles now being experienced was that there were not sufficient drills for the work in hand. Mr Kimbell said there was plenty of evidence that overseas capital was interested in mining in New Zealand. The larger the venture, providing it was sufficiently promising, the more attractive it was to overseas companies, and there was an enormous amount of money offering. Two companies had been floated 0 in London to dredge portion of the Molyncux River, and he' had reason to believe that another company with_ a capital of £400,000 ■would be floated in the near future to work another section of the Otago goldfields.