HOKITIKA RIVER GOLD DREDGING COMPANY.

Greymouth Evening Star, Volume XXXI, 30 September 1901, Page 3

HOKITIKA RIVER GOLD DREDGING COMPANY.

The following circular has been issued by the Directors to the shareholders The Directors of the above Company desire to present to you a statement of the present position of the Company with a view of securing your co-opera-ion in placing, matters on a moie satisfactory footing. In consequence of the enormous rise in the value of machinery the Consulting Engineer's estimate of the cost of necessary equipment for dredging operations has proved misleading, with the result that the whole capital of the Company has been expended, and there is now due and owing by the Company to various creditors sums amounting in the whole to about £ISOO, which deficiency is mostly entirely due to the fact that the coat of the dredge has been, as before stated, so much in excess of the estimated amount. The Dredgemaster reports that the Company has a first-class dredge, and that he thinks highly of the prospects of the claim. The dredge is now ready to start work, and a thorough test of the ground will shortly be made, unless the operations are stopped by the creditors, who ate now pressing for payment of their claims and threatening legal proceedings and seizure of the dredge unless such claims are satisfied.

As ,these proceedings would be disastrous to the best interests of the shareholders, the directors have, after careful consideration, determined t(r raise the sum of £2,000 by the issue of 400 £5 debentures, in order to provide funds for the payment of the debts due by the Company, and to provide working expenses for a sufficient period to give the claim a thorough and exhaustive tost. These debentures it is proposed to make a first charge over the dredge and claim, and to bear interest at 20 per cent per annum, but redeemable in 6 months if the Directors decide to do so, The debentures are to be offered to the Shareholders in the first instance, and unless they are taken up by the 7th October they will bo offered to the public. In the event of the debentures being over-subscribed by the shareholders, they will be allotted in proportion to the shares held in the Company by those applying. The Directors desire to impress upon the Shareholders the absolute necessity of taking up these debentures if they desire to protect their own interests. If the debentures should hot be taken up by the shareholders or the public, and there will be no alternative but for the Company to go into liquidation, which, at this juncture of affairs, just on the eve of commencing operations, would be moat unfortunate, especially as the directors believe (he Company possess a most valuable property, and one which would soon become a dividend paying concern once the dredge is fairly started. ’ The Directors, therefore appeal to you - to make a prompt application for the debentures, which, being secured, as before mentioned, should be a perfectly safe investment, as even if the worst, happened and the claim proved a failure, and the dredge were sold at a forced sale, it , would certainly produce more than sufficient to repay the amount of the debentures, even under the most unfavourable circumstances, the estimated cost being over £II,OOO,