WAIHI G.M. COMPANY

Waihi Daily Telegraph, Volume XVIII, Issue 5962, 13 July 1920, Page 3

WAIHI G.M. COMPANY

THE YEAR’S OPERATIONS,

THE MINE’S POSITION TROUBLES WITH LABOUR. COMPANY’S FINANCIAL ASPECT. At the annual meeting of shareholders of the Waihi Goldmining Company, held in London, Mr A. M. Mitchison referred to the anxious and' strenuous time through which the company’s representatives had passed in New Zealand. ‘Tt is not so pleasant, ’ he said, "to look after a company when, times are adverse, as it is when everything is prosperous, and it is a great deal more difficult to do so. Nothing can be more trying than labour troubles. We are most anxious that the _ men should recognise bow much their interests depend on the welfare of the company, but any attempt to give practical effect to thd by participation docs not commend itself to the ordinary iflnon. official. The paid agitator does not want good feeling to exist between employer and employed. He wants all the loyalty and good feeling for himself,, and all the bad feelings for the masters, so that the Tatter have a trying time.’’

Regarding mine exploration, tile chairman described the results of the year as disappointing. It was clear that they mere in a poor zone, and they should get down as soon as possible to i'ower levels in the hope of finding something better. In a'll directions the company was faced with a great shortage of labour. There was a diminished -supply of miners, and higher pay wa s being demanded. The new agreement, which had to be made after the strike, would raise wages by | ‘2s per ton, and this, coupled with other I increases, would raise costs altogether Iby about 5s per ton. Such a rise m ' the cost of production could not fail to render stone unpayable which would 'otherwise have been worked at a pror fit, and large quantities of ore, reckoned ■in the company’s ore reserves, would not now be payable at the pre-war | prices of gold and silver, j The chairman mentioned that, owing ' to the rising costs and failing values, j the company would have to face a considerable reduction in the profits of the ! year 1920, as compared with 1919, aaid ! still further reductions in future years were to be anticipated, unless resources could be increased by a new supply of good fit one from the lower levels. Quarterly dividends of Is a quarter, tax free, had been paid, but in, view of the prospects it could not be expected that the profits of the year would be themselves sufficient to justify four of these dividends. But in order to supplement, the 1920 profits, a .sum of £50,000 bad been carried to a, dividend equalisation fund, and with assistance from this fund it was hoped to pay the two remaining quarterly dividends (September and December) in respect of tho year, 1920. THE HOROHORA SALE.

Relative to the Horahora sale, the New Zealand bonds were not going to be issued at present, but the transaction had greatly increased the stahih'-y of the company’s financial position, which was already strong. Ultimately £212,500 five per cent bonds of the New Zealand Government Would come into the hands of the company, and those bonds would fall to be repaid, in cash at by the New Zealand Government on September 30. 1931. In view of the Horahora sale, the directors had had to consider whether their capital resources were not greater than they need he for the thorough development of the Waihi property. Ample funds must be kept in hand for the most exhaustive exploration of the Waihi property, and in view of the costly nature of the work to be done and the I high prices of pumping machinery and 1 other plant', the expenditure would bo 1 very hoary. But there was no desire 'to run into extremes.

>XHER MEANS FOR INVESTMENT. There were two courses open to any nining company finding itself with :api.tal funds in excess ol what are required of the development of its own particular, property—cither to return file funds to shareholders in one way or another, or to employ them in other mining undertakings. The matter had been considered very carefully from every viewpoint. The directors considered'it essentially a question on which the ■wishes of the ,shareholder's should be the guide of the board, but they cfrl not think that either section of the shareholders should wish to dominate or icocrce those who differed from them. The directors thought it was a case lor a compromise, and it was their proposal ■to return 10s per share—total of 953—t0 the shareholders and to ahqcatc £50,000 to commence a fund available for new propositions. .Their aim woulc be to take up or assist in financing auj undertaking of which the company’s re present at ves were specially cognisant and in which their skilled technical ex porionce and knowledge would bo o special value, though, up to the extent o £50,000 the board would not cousidc itself fettered or limited hi any. way except, of course, by the provisions o the memorandum of association. In the balance-sheet investment .stood at £560.000, but there was a do predation on this at December 31. f £24,000, while at the present time H

chairman thought the depreciation ' would be about 05-1,000. The face value of the strict trustee securities was ■£379,000, of which £-131,000 was urn i direct obligations of the British Govorna incut. It would not be in the intern d* cl of shareholders to sell securities of this t 1 nature at the present time a.n-1 face this s 1 abnormal depreciation, espcciahv as ;-Uome of tbs investments were redeomnl I? at comparatively early dates, and s.! were certain to improve in value as the g 1 dates for .redemption drew near. No | .0 ' more long-dated investments would J' it taken, but all funds would be UepM is liquid in Treasury bibs or such classes ot ig' 6ecurti.es Until, sufficient cash was a.cill cumulated to return the 10s per share o- ; to shareholders, It was not proposed to 'Stew tlw intention ot locating

£50,000 tor purposes not directly connected with "Wail'd to interfere with or in any way delay the accumulation of funds necessary for the return of the 10s per share capital to the shareholders. The report was seconded by Sir W.osaby 13. Perceval, and carried unanimously.