CLUTHA RIVER DREDGING

Otago Daily Times, Issue 22708, 22 October 1935, Page 6

CLUTHA RIVER DREDGING

STRONG POSITION FINANCIALLY CONCESSION FROM GOVERNMENT. (From Our Own Correspondent) (Bt Air Mail) LONDON, September 28. Colonel C. E. Ponsonby, T.D, M.P., chairman of Clutha River Gold Dredging, Ltd., presided at the first annual general meeting, held at the Institute of Chartered Accountants, Moorgate, on September 22. The issued capital of the company s £200,000, divided in 2,000,000 shares of 2s each fully paid, of which 450,000 shares were issued in full satisfaction of the vendors’ consideration. Tim cost of registration of the dredging claims into the company’s name, together with legal expenses, amounted to £259. The balance sheet showed expenditure on plant and machinery to be £14,154, expenditure on buildings and furniture £s7' 10s. The chairman mentioned that the original estimate of the cost of the dredge and all accessory plant erected on the property, including all the necessary equipment and buildings, was £IOO,OOO. Now that the development programme was in an advanced stage and practically all the materials for the dredge had been manufactured and shipped, it could be safely stated that there was no likelihood of the original estimate being exceeded, even including the advance payment on account of electric power, ELECTRIC POWER CONTRACT. The item £17,806 advance payment in respect of electric power to be consumed was an amount standing to the company’s credit with the Central Otago Electric Power Board. It was the original intention of the company to install a power station for its sole use. but before finally deciding upon a scheme the company was approached by the Central Otago Electric Power Board, and ns a result a mutually satisfactory contract for the supply of the necessary power for the dredge was entered into with that board. The payment madi to the Central Otago Electric Power Board shown in the balance sheet represented an advance payment under the terms of the contract, on account of electric power to be supplied by the board to the company. This contract with the Otago Power Board, in addition to giving the advantage of taking their power from a large central power station, saved them from having capital to the extent of £20,000 or more locked up in a power station of their own, with all the necessary expenses incidental to the running of a power station and the costs of keeping it up to date. Investments at cost and cash at March 31 totalled £103,027, presenting a strong position. Since the close of the accounts sales of investments have produced a surplus of £5500 over cost. REMISSION OF 20 PER CENT. DUTY. “ You will not, of course,” the chairman continued, “ expect me at this stage to make any. forecast of the results to be expected when dredging operations commence. The inefficient, locally built dredges which worked in the Clutha River about 30 years ago recovered over 03.000 ounces of gold from seatterod parts of our company’s claims, and, the prospectus estimates of gold recovery wore based upon these results. The efforts of the old small dredges undoubtedly established the presence of rich values in the deep wash which those dredges were only able to reach on occasions when favourable conditions obtained.

‘‘At the time the company was formed the New Zealand Government levied a duty of 20 per cent., pins 3 per cent, primage, on dredge pontoons, but I am pleased to be able to advise you that on the application of our New Zealand representatives and after considerable nego tintions we were successful in ob'aining a remission of the 20 per cent, duty on the British-manufactured dredge pontoon This concession on the part of the New Zealand Government means a considerable financial saving to the company and is much appreciated.

DREDGING LICENCES. “ in order to be in a position to obtain from the Government an amalgamated licence over the maximum length ofHver which can be covered by one licence, we had a new survey made for 10 miles downstream from Alexandra and we have now received a new licence over this length of river. Our attorneys in New Zealand advise that it is greatly to the company’s advantage to hold this amalgamated dredging licence. You will remember that the prospectus gave the approximate length of river covered by the three dredging licences acquired by the company as 20 miles. The reaurvey figures, however, go to show that, while I the area mentioned in the licences was approximately correct, the actual length of river covered by the company’s licences and over which we have the dredging rights is actually about 18i miles. “An option has been secured by the company over an area of some 800 acres near Lake Onslow, about 20 miles east of the company’s claims. The board was offered the opportunity of obtaining this option on reasonable terms, and in view of the fact that the area is known to be gold-bearing it was felt that the opportunity of acquiring the option was one which the company should not miss. Drilling tests will shortly commence and shareholders will be informed of the results in due course. In accordance with the requirements of the New Zealand Companies Act, a share transfer office has been opened at No. 5 Liverpool street, Dunedin, under the charge of Messrs Downie Stewart, Payne and Forrester, the holders of the company’s power of attorney. This transfer office will, of course, facilitate the share transactions of the New Zealand shareholders. “I should like to say how much the board is indebted to Messrs Downie Stewart, Payne and Forrester for the valuable services they have rendered to the company since its inception and for the unremitting attention which _ they have given to all the various details of the company’s affairs. “I also wish to express the board* thanks to the general manager, Mr Wilfred Curphey, for his services and for his care and energy in the erection of the dredge. Mr Curphey’s experience of dredging both in New Zealand and in Malaya, and his knowledge of the Clutha River, are proving to be of the greatest value to the company.” Mr Reginald Pawle, M.lnst.M.M., seconded the resolution, and after the chairman had replied to questions it was carried unanimously. The retiring director (Colonel C. E. Ponsonby) having been re-elected and the auditors (Messrs Temple, Gothard and Co.) having been reappointed, the proceedings terminated. EXCESSIVE BORROWING A NOTE OF WARNING. A warning that excessive borrowing would increase the interest load to breaking point was given in a recent address by Mr W. Foster Woods, president of the Melbourne Stock Exchange. “We are told frequently by those m command that Australia is turning the corner,” he said. “We have turned so many corners that we must be on a very zm-zag road and I hope it will soon straighten out. ,For the last year or two we have been having a period of apparent prosperity. I want you to consider how much of that prosperity is due to the spending of borrowed money, but there must soon come a time when we reach the limit. Borrowing in a depression is perhaps good, but if prosperity is here the country should be able to carry on with less stimulant. . “ Cheap money may be an incentive to enterprise, and inducement to people to extend their businesses or to launch outin new ones, but it has never indicated permanent prosperity.” ANTHONY HORDERN AND SONS The. directors of Anthony Hordern and Sons, Ltd., have advised shareholders that they are giving notice of the redemption, next year, of the £790,000 outstanding debentures. The debentures were issued in 1926, and now bear interest at £5 8s 6d per cent, per annum, the annual charge being £42.857. Arrangements have been made with the Mutual Life and Citizens’ Assurance Company. Ltd., -to take up. on September 1, 1936. £6OO 000 in debentures of the company, of 10 years’ currency, and bearing interest at £4 2s 6d per cent, per annum, payable half yearly. The company undertakes to reduce the amount by ‘£lo,ooo each half year, and has the right to repay up to in one year. The remainder of the existing issue, £190,000, will be repaid from cash resources of the company.