WAIHI MINE.

Star (Christchurch), Volume LXVI, Issue 20340, 25 June 1934, Page 9

WAIHI MINE.

Has Brought Millions in Gold' to Market. HOW LONG WILL IT LAST? Since records have been kept, namely from the early ’nineties, the bullion returns from the Waihi mine have totalled the stupendous sum of £18,000,OCO. Over the same period shareholders have received in the shape of dividends, including interest on instalments of shares, over £6,000,000. In addition shareholders have collected by way of return of capital 10s per share in 1921, in 1926 5s per share, and in 1927 a bonus share of 5s fully paid for every share held. In the light of the foregoing there is little wonder at the popularity of the scrip and to-day investors are prepared to pay at least 30s, or six times the par value in order to secure a place on the company’s register. The capital of the Waihi Company stands at £247,953, divided into 991,814 shares, of which 369,908 are held in New Zealand. There are heavy holdings in London, where the head office is I situated, which accounts for many price movements having their origin in the British metropolis. The price paid to the vendors of the mine by the Waihi Company was £101.970, of which £53,333 was ii\ shares and the balance in cash. A Temporary Scare. Following a lengthy period of prosperity there was something of a scare in 1927, for in that year the chairman of directors, Mr A. M. Mitchison, sounded a definite note of warning when he said: “ A more rapid depletion of the ore reserves seems inevitable, and the exhaustion of the mine may have to be faced within a few years.” However, the advent of the slump brought about a sharp rise in the price of gold, and this has made it possible for the company to work at a profit on huge masses of ore that were formerly worthless. Past Years Compared. The following table shows the main features of the comoany’s operations for the years 1931, 1932 and 1933:

From the foregoing table it is seen that although less ore was treated than in 1932 the monetary returns were higher by nearly £BOOO. However, both taxes and general expenses are also up, and as a result there has been a sharp drop in the gross profits. Taxation Cripples. On the question of taxation the directors state that income tax for the year. £84,649, and gold export duty. £42,259. constitutes a charge of £126,908 in the latest accounts. They add : “ This is a very heavy burden for 1 the company, being more than 11s 3*d per ton crushed, and is a very serious drawback to its operations, rendering it unprofitable tp work large ore bodies which would otherwise have become payable in consequence of the gold premium.” In other words, according to Mr Mitchison, the Government is in grave danger of committing the age-old blunder of “ killing the goose that lays the golden eggs.” Financial Position. The company’s balance-sheet is interesting, and may be summarised as follows, the figures for the previous year being shown for comparison: LIABILITIES. 1932. 1933. £ £

The chief movements over the latest term in liabilities concerns creditors and taxation. to which reference has already been made.. A Tin-raining Venture. On the -ssets side mining investments are higher by £55,000, this being additional payments made in connection with the Puket Tin Dredging Company in Siam. When in 192 7 the directors of the company found it necessary to look J upon the depletion of its ore reserves to a point where operations would cease to be profitable as a contingency j that must be faced, they placed the, position before shareholders. By a large majority the shareholders sanctioned the proposal that the board si ould utilise its organisation and a portion of its assets for the purpo~es of general finance and investment and the exploration of other properties. With this policy approved, the directors went ahead with negotiations to acquire an alluvial tin mining preposition in Siam. After protracted negotiations the deal was completed and an area of 650 acres in the Island of Puket, Siam, was secured. The conditions of the agreement are that the Tronoh Mines, Ltd., holds one-third of the undertaking and the Waihi the balance. To carry the scheme through, a new company has been formed under the title Puket Tin Dredging, Limited, with a capital of £300.000 in 5s share. When the latent accounts were issued the dredge, built in England, had been sent out, and operations were expected to commence about this time. Since the decision to embark uoon this tin-ming venture was made, that industry has passed through parlous times, end the delav has taken place over the company’s Siamese enterorise may have been a blessing in disguise. Surplus of Assets. The following table shows the outside liabilities, total assets, and the surplus of assets in the last seven years: Outside Total Surplus Liabilities. Assets. Assets.

| The company’s assets appear to have been valued with conservatism, for the P - described as “ Purchase of Mines, Works and Properties at cost, less rales and depreciation,” and assessed at £239,044, includes the hydro-electric works at Horahora, which are due to be taken c er by the Government at | £212,500 in November next. This will I leave the whole of the company’s 1 immense plant and works at Waihi j standing at just over £26,544. These look very impressive at »the present | time, and, with the undertaking as a running concern, are doubtless considerably under-valued. This is not to say they would realise the amount if the mine operations ceased and an attempt were made to turn them into cash. Experience in the realisation of mining plant is far frem encouraging in this respect. Much more tangible are the “ securities,” chiefly British and Dominion Government, which make the handsome ’ total of £461,486, and which the directors certify as being assessed at market , value. What of the Future? Enough has been written to show that the future of Waihi is absolutely dependent upon the premium upon gold being retained. This factor is quite uncertain. It is inextricably bound up with international finance, the future of which cannot be anticipated. However, leading authorities in English financial circles are confident that there is little likelihood of any fall in the price of gold. In regard to the position of the ore reserves the directors’ report at the last annual meeting stated that “ very close investigations at a large number of points had been continued, and the result had been on the whole satisfactory.” In this connection it may be mentioned that up to Mav 12 of the present year 23,9880 z of gold had been won as compared with 24,838 for the same period in 1933. , . In the case of a forced winding-up the assets of the Waihi Gold Mining Company would probably realise well on to 15s per 5s share. The market values the share to-day at 30s. COMPANY AFFAIRS. Wet Week-ends Affect Ice Cream Business. •• The earnings of the company during the pa.st year were adversely affected by a succession of unfavourable week-ends during the summer months? -said Mr J. A. Gentles, chairman of directors of the Peters Ice Cream Company (N.Z.). Ltd.. Auckland, on Thursday at the annual meeting. Mi Gentles said that early In the season important additions were made to the company’s plant and machinery. and additional refrigerating equipment was purchased in order to cop‘3 with the business offering. Although orders were booked for a greater output, the actual sales showed a decreo.se owing to the weather conditions. The directors recommended that the profit of £541 be carried forward, making a total balance of £ll4l. Since the nlo.se of the company’s year the directors had purchased the ice cream business successfully conducted by the Ara wo. Dairy Co., Ltd., at Whakatane and Rotorua. Blue Star Line. The Blue Star Line (Australia), Ltd., has been registered In Sydney and will act as agents for the London Blue Star Lint, which is shortly commencing a freight service between Australia and theh United Kingdom. The first steamer, the Albion Star, is due next month. Mr C. W. D. Conacher has been appointed general manager in Australia, Mr W. G. Middleton secretary, and Mr S. V. Jones traffic manager. Branches are to be opened in Melbourne and Brisbane. Dominion Breweries. A net profit of £2436 is disclosed in the fourth annual accounts of Dominion Breweries, Ltd., for the year- ended March 31. The profit was struck after provision for all charges, bad and doubtful debts, etc., including £2804 written off as depreciation on brewery buildings, plant, etc., and hotel furniture and effects, and compares with a loss of £14,002 in the previous year. The directors recommend that the profit be applied in reduction of the debit balance in the profit and loss account. If this proposal is approved by the shareholders, the debit to be carried forw-ard will be reduced to £6130. The directors are still of the opinion that the interests of the company will not be prejudiced in delaying the proposals for a reduction of capital. With the shareholders’ approval they propose to defer action until the result of the current year’s trading is known. The paid capital of the company is unchanged at £78,207. Goldsborough Mort and Co. Items from the last two accounts of Goldsbrough Mort and Co. compare us under:—

MINING. Company Reports and Returns. BELL HOOPER, CROMWELL. LTD. The return for the week ended June 2‘: wr 3 13oz 7dwt. Mahakipawa Return. The Mahakipawa return for the week was 620 z alluvial gold. Okarito and Gillespie's. DUNEDIN, June 25. Gold returns—Okarito, 250 z lOdwts for 120 hours; Gillespie's, 490 z 18dwts for 134 hours. Excess abattoir fees collected by the Christchurch City Council during the three years ended March 31. 1929, will be paid out by the council this week. The recipients will be the New Zealand Refrigerating Co. and certain master butchers. The excess fees have been the subject of a dispute for some years, and resulted in legislation being passed at the last session of Parliament. As a result of that legislation the council, which has already paid £2677 to the Refrigerating Co., will refund another £3126 in the proportion of four-fifths to the butchers and one-fifth to the company. The number of butchers concerned is 130.

1931. 1932. 1 933. Tons. Tons. Tons. Ore treated .... New ore 223,376 231,840 224,689 developed 1 88,657 201.907 225,0S7 Ore reserves . . 342.S72 322.140 342.616 Gold and silver . 41 3,900 530,872 538.581 Sundry receipts . 1 7.600 1 8.923 20,213 Horahora 10,625 11,245 11.156 Total receipts . . 442.125 561.040 569.950 Expenses 293,690 309.092 372,351 Gross profits 143,43 5 251,948 197,599 Taxes 71,539 60.779 84.650 Depreciation 6,375 7,067 5,920

Paid capital 247.953 247.953 Creditors and taxation 87,907 137.919 Reserves 43R.469 438.469 Revenue account .... 103,358 1X1.206 Total 877.6S7 935,547 ASSETS. £ £ Mines, works, etc. .. 244,972 245,332 Cyanide and stores . . 18,044 21.875 Ore expenses 2,863 4.160 Debtors 3,800 4.392 Company shares 89,430 146.207 Securities 449,904 461.486 Bullion 39,657 31.969 Cash 29,016 26,416 Total 877.6S7 935,547

£ £ £ 1927 58.388 801,623 743.235 1928 .... 62,745 792.358 729,613 1929 .... 37,967 772,093 734.126 1930 41,819 773,244 731.425 1931 .... 100.659 798.375 697,716 1932 87.907 877,687 789,780 1933 .... 137,919 935,547 797,628

1933. 1934. Dividend, p.e 21 6 £ £ Gross profit 508.675 615,706 Net profit 78,985 3 98,431 Liabilities— Capital 2,400,000 2,400,000 Debenture stock A 838,235 838,235 Debenture stock B 580,467 580,467 Reserve funds .. 1,545,000 1,525,000 Undivided profits 187,357 32 4.188 Sundry creditors . . 642,784 636.153 Cash and deposits 1S8.620 788,329 Government and other securities 308,490 308.571 Advances 4,720,487 4.209.56S Properties and stock 252,331 229,176 Other assets .... 78,272 93,528 Premises 610,445 639,900 Shares 35,199 3 4,076 £6,193,844 £6,304,042