ROSS GOLDFIELDS, LTD

Dominion, Volume 3, Issue 905, 26 August 1910, Page 8

ROSS GOLDFIELDS, LTD

A LIVELY MEETING AND SOME PLAIN SPEAKING. SHAREHOLDERS DEMAND NEW DIRECTORATE. Matters in connection with the Ross Goldfields, Ltd., have reached a critical condition, a fact which was emphasised by a somewhat sensational meeting held in tho Chamber of Commerco yesterday. This was an extraordinary general meeting of shareholders, by upwards of fifty, which had been called to consider the following business:~ 1., To consider the financial position of the company, and raise fresh capital, either. by debentures, or by issuing the 10,000 unissued shares as preferential shares.. ,

2. To consider the question of removing the registered office of tho company from Hokitika. to a place to bo decided at the meeting. . 3. To elect four directors to.. fill tho vacancies caused by the retirement of the following:—Dr. Neeley, ■'Messrs: Michel, Murdoch, and "Weston.

The chairman of directors, ■ Mr. J. Grimmond, presided, and called upon the secretary to read the following report:— '

Hokitika, August 7:3. To the Shareholders, Ross Goldfields, Ltd., I beg to, report that upon this board of directors taking control of tho company's affairs on October 28, 1909, Dr. Neeley was, appointed chairman. We found that after paying all liabilities contracted to that date the amount of unused capital at our, command was .£2300, and the main shaft only sunk some 60ft. below water level. So that the work to be carried out, viz., . sinking more than 200 ft. of Shaft, unwatering tho mine, and developing it, gave .the directors, in the embarrassed' state of the finances, grave ■ concern. In January there occurred an accident with the siuk.irig pumps. The mine manager, Mr. Wood, resigned, and. also the electrical engineer/Mr. Falkenbach. ' Mr. Dinnio; was appointed, managing engineer, and Mr. Moye mine manager, and since then the work has' proceeded satisfactorily. During March last,, when, our liabilities' reached .£IOO6, the directors, gave a joint and several guarantee to tho Bank of Now Zealand for the sum of ,£3OOO, secured by mortgage, hoping that, with the gold they won, they'would be able to. carry on operations and develop tho mine .without calling on the shareholders ■ for assistance. But when the hoard met on August G, tho position as disclosed by the secretary was: Bank overdraft, at Hokitika, J3000; loan ' from director, : .£200;. and wages and accounts due .£912; less a credit balance at Ross Bank of .£222, leaving a'total debit of .£3920, say .£IOOO, in debt,''and having agreed-to ah increase of some 10 per'cent., or ,£I2OO a year, in our wages costs to prevent a strike ,aud stoppage of tho : works, the directors, decided to call this meeting and placo the whole matter before tho shareholders. • Dr.- Neeley resigned tho position of chairman and director' 'on August 3, and I was elected chairman. Since, then a break in the power lino caused''a. stoppage of tho pumps and consequent flooding of the mine, together .with the. drowning of one of the motors of tho stationary pumps. This accentuated the necessity of- consulting you, and I at once ordered that as many as possible of the employees be dispensed' with. I would not recommend the shareholders to recommence operations again before procuring reliable and suitable plunger pumps (surface driven). It willbo necessary to provide at least .£11,500 additional capital, ,£ISOO to pay all liabilities and .£IO,OOO to provide pumps and a new working and winding shaft ina suitable position. I- have requested tho managing engineer and mino manager to report on tho, cause and effect of tho recent disaster, and-also report their recommendations for future development of tho mine.

J. GRIMMOND,

Chairman of Directors. A report was also received from tho niino manager "and the engineer in regard to plant, etc. ■'■-.-. • The :chairman, in- furtherance of this report, stated. that after tho .£3OOO had been spent he had advanced \E2OO. to pay wages until August, and since then the other directors had advanced £200 each. . ■','-' .

Mr. G. S. Mabin questioned tho item of directors' fees. An amount of .£lso' had been voted, and no proper authority existed- -to pay any nioro than that sum,but ,£9O had since been paid. . ■ The chairman claimed that tho directors, wore entitled to receive payment for travelling expenses , in connection -with meetings, and tliey had charged no more than they were, entitled to.

Mr. Mabin said it was. curious ,that other directors had received these fees and he had not. He had not' looked for such payment,-' but ho did not believe in the-other directors being so favoured.-He had.attended'three meetings in February and March..' .' .

Tho chairman said tho reason Mr. Mabin was not paid director's fees was because he was not present at the meetings.; .•■'■;■' '" ■ ■

; Mr; Mabin' explained that he was absent from the July meeting through being so misled as to the.date that it became impossible for him to attend.

Tho chairman then returned to the financial aspect, anil asked the secretary to read a telegram received from' Auckland shareholders, proposing a reconstruction of the company Mr. Free stated that the company had bought' for MW() from the. Old Lako Waterways Company the right of 40 head of water. Subsequently the directors had paid another JJIOUO under that head, and he understood that this was done to secure from 40 to ; 50 head. He asked "the object of . this, seeing that tho company had not. required,, and would not require, more than 40 head.

Tho chairman replied that tho additional supply had i been . secured as • it was! considered that to run on a baro margin of-10 head was unsafe. Besides it was, considered that, the. company could readily dispose of any surplus water-power. ~ . . . Mr. Free claimed that as tho company was formed to. secure 40- head of water for .£4600 tho directors had no, right to exceed their authority. Mr. H. M. Smythe justified the. action of the directors,-.claiming th'at■'there was a good field,for any available electric power supply.' ■' ~ '■''.' " Mr. Mabin .raised the question ' of' a second water right' alleged to liavo \been offered by the Old Lake Company. ' Ho stated that the'syndicate which sold tho water,right, and.the directors of the Ross Goldholds, Ltd.; which bought it, were in personnel virtually, 1 the same. The syndicate comprised Messrs. H. L. Michel, J. >'Parke; Jas. Murdoch, and' H; M. 'Smythe, and the late Mr.. H. Keitck. With tho exception >.- of the : last-mentioned, theso same , gentlemen wers the original directors of Ross Goldfields, Ltd., and, in addition the Hon. J. D. Orniond and Messrs. J. Welch and J. Mabin wero on the board. This syndicate having sold to Ross Goldsfields, ■ Ltd., the first water right of 40 head, subsequently endeavoured to sell to the company 100 head as a second right. Ho and Mr. Welch succeeded in having this offer turned down. ■ . Dr. Nceley, ono of tho directors, proceeded to ontlino the history of the com-

pauy. He claimed that the present chairman had done all that could bo done to remedy the unsatisfactory state of affairs, lie had upyosed the importation of the punips which had caused all the trouble. Tho fact that the syndicate which sold to the company was virtually the samo as the directors of the latter necessarily placed tho company at tho mercy of the syndicate. The first, intimation ho had of any trouble was a demand on tho part of the syndicate to .£IOOO for plans and specifications. This came before a meeting of directors and quite unwittingly he seconded a motion passing the payment, being assured that it was inevitable. Finding out next day how things stood he had protested with the result that only X 250 was paid over, the .£750 being left' in abeyance as a liability. Personally ho thought the .£250 could bo regained by tho company. Ho had also protested against any further payment to the syndicate; for additional water power beyond that originally contracted for. ' Mr. Walter Nathan rose to a point of order. They were there to consider the financial position, not to listen to ancient history.Dr. Neeley proceeded and stated that soon after he took office as chairman he could see that the company was virtu ally bankrupt as ,£17,000. of the ,£50,000 capital had been expended and there was still much to be done. A shareholder: So you sold your shares?

Dr. Neeley: I stood by the company through all its difficulties and I have sacrificed more thau anyone else in this room. , . , Continuing, tho speaker explained the further steps taken to finance the company, the last stage of .which was a temporary loan .by tho directors of .£IOOO. A shareholder: At ten per cent?

Dr.'Neeley: Yes. On-this point Mr. Mabm claimed that tho Bank of New Zealand had offered to lend the money oh overdraft at 6 per cent. , , Mr! Nathan (Wellington) then moved that the financial position of the company bo not taken into consideration until a new directorate has been appointed. He stated. that he moved this as the bulk of the: shareholders had no confidence in tho present directorate. Mr. Trent, on behalf of Christchurcn shareholders, seconded the motion as he said it was'useless to try to investigate the company's affairs until they had inado a complete change. ' The chairman said he would be glad to hand in his resignation at any time, and proceeded to discuss the best method of making the change proposed. . : In a heated interlude Mr. Trent stepped forward and offered to personally guarantee tho amount duo to the present directors by the company if they would resign. But thcro must first /bo an audit. . ■', Ultimately a motion was carried that the present directorate be asked to add the names of Messrs.. W. I. Nathan, Jv Trent, J. L. Freeman, and Dr. C. P. Knight to the board at a meeting to be held forthwith. At that. meeting the present directors will resign. A general meeting of shareholders is to-be held in a fortnight's time at which a motion will come forward to liquidate the pre-, sent company with a .view to reconstruction. ' '.■■... ■,