AHAURA RIVER GOLD DREDGING COMPANY.

Otago Witness, Issue 2451, 6 March 1901, Page 21

AHAURA RIVER GOLD DREDGING COMPANY.

An extraordinary general meeting of shareholders in the Ahaura River Gold Dredging Company was held at the office of Messrs Mercer and Mitchell last Monday. There were about 20 shareholders present, and Mr A. Melville, chairman of directors, presided. The Secretary (Mr Mercer) explained that the total funds available amounted to £965 2s 9d. The liabilities of the company were — Balance due to Messrs Morgan and Cable, £1460; -balance due or erection contract, etc., £380; balance cartage, £25; engineer's commission, £150; matting, tools, and stores, £100; and extras, £100. The last four amounts were approximate only. The estimated funds required amounted to £2215, and the funds available being £965 2s 9d there remained £1249 17s 3d to be provided. The Chairman said those present had heard the financial position of the company. The directors thought it would be advisable to raise £1500, if possible, and they must consider the ways and means of doing so, as it would not do to «tart the dredge £1200 in debt, because they might not be fortunate enough to strike the gold the first week of working. He would be glad to hear an expression of opinion as to what was considered best to be done under the circumstances. He might mention that the directors had tried one or two courses that they thought were feasible, but they found that they would have to pay 10 per cent, commission, and give » joint §n& ■«?«*! gua*«lt«e» bosidu

paying law costs. They thought they were not justified in incurring such expense without taking the shaieholders into their confidence, hence the reason tor calling the' meeting. The money-lcudeis also wanted a bill of sale over the dredge, and the directors did not feel justified m giving that without consulting the shareholders. He had forgotten to mention that a clause m the articles of association prevented them recommending to /haieholders an increase being made m the capital. If they had been able to recommend that course, out of the £1500 the vendors would have claimed £300. The secretary had consulted a solicitor in the matter, and the vendors had said if that position was taken up they would expect their proportion, which, as he snid, was £300. A Shareholder asked how it was this adveise balance sheet had come about.

The Chaironan replied that there was not sufficient capital to start with. They had tried a great many places m New Zealand to let contracts, and the prices were not satisfactory. Then they tried Sydney and Melbourne, and afterwards the old country, and he was sony to say that after losing about three or four months' time they had to accept a New Zealand tender after all. It was at the time of the boom, when 15 or 20 dredges were m comse of construction, and mechanical engineers had it all their own way. They had thought that they would get a dredge at £1000 or £1500 less , than they did, and they considered themselves I fortunate to get a firm of engineers to take the j contract up. Mr A. Sligo asked if the directors could not make terms with the company's bankers. ' The Chairman said they had been trying to make arrangements with their bankers, and he be'ieved they could succeed, but if they did they would have to mortgage the dredge. The ba,nk had offered to advance the money on a joint and several guarantee, but it was not the duty of the directors to give that for any company. They had partially agreed, however, to do so if they could get a marine risk to cover their responsibility to the bank. To give the guarantee they (the directors) would also expect a bill of sale or a mortgage over the dredge, but they would not take the step without consulting the shareholders.

A Shareholder asked what terms the bank would want.

The Chairman replied that the directors thought they could get the money at 6 or 7 per cent., and the advantage was that the company would only have to pay on the overdraft.

Mr Sligo said he took it that the meeting should authoiise the directors to obtain the advance from the bank, and give their joint and several guarantee.

The Chairman said he believed the directors would take a favourable view of that proposal, but the only way they could be secured was by taking a marine risk and a bill of sale.

Mr Slisro did not see the necessity for the marine risk.

The Chairman : Well, suppose you have a flood'

Mr Sligo : I see. I was only asking for information.

A Shareholder thought the money might be raised on debenture.

The Chairman said in one case where it was proposed to raise £1500 in this way only three shareholders offered to take debenture^, and they were only willing to take one of £10 each. Personally he wo\ild be very gl?d to take a. few.

Mr R. Hudson said he would take a hundred (probably meaning at £1 each).

A Shareholder said he had heard of the case mentioned, but that oiVy showed that tho<=e shareholders had no confidence in the company, and they (the Ahaura shareholders) had confidence in their claim.

Mr Sligo was satisfied that any attempt to raise the money on debenture ■would be a failure. Ho believed that the majority who had been doing anything in mining were so deerjly involved that, instead of being able to lav out further money, the chpnees were that some would have to "go under " before the turn of th» tide came. If they did raise the money that wpy, they would certainly have to pay more than for a bank overdraft. As for getting it on fixed loan, the terms were so very hi?Ti that it was out of the question. He thoupht their bankers would advance the money. ?nd he was prepared to move in that direction if the directors could see their way to give their joint and several guarantee to the bank. He would move — " That this meeting 1 of shareholders in the Ahaura River Gold Dredging Comtmny request and authorise the directors of the company to obtain an overdrift from the bank sufficient to meet existing liabilities, until the dredge has obtained gold: and, further, tb.pt the shareholders request the directors and authorise them to give the bank a joint and several guarantee, and to secure themselves that they be empowered to take a mortgase over the whole of the plant and pToperty of the company ; and, further, that the directors be empowered to obtain a marine insurance on the dredge to protect themselves and the company in case of accident."

Mv Jame3 Thomson seconded the motion, which was carried unanimously.

A Shar-fcoMer a-ltpj wlien tho <3re<3(re was likely to be. completed, to whi^h the Chairman replied that he thought about the end of the present month. *

A vote of thanks to the chair, moved by Mr Sfigo, closed the meeting.