OKARITO GOLD DREDGING COY LTD

Hokitika Guardian, 15 December 1930, Page 3

OKARITO GOLD DREDGING COY LTD

ANNUAL REPORT. The report of the directors of the Qkarito Eive Mile Beach GolH Dredging Co. Ltd., after referring to the visit of I directors to the claim and the reports issued oil the operations, says: There is, however, one matter in particular which calls for special comment. It will be noticed from the balance-sheet at September 30, 1.930, that the capital of the company has been practically exhausted, and a recommendation is made in then - report by the directors who recently visited the claim, that further finance to the extent of £SOOO should be provided to complete the building of the dredge. It is considered that this figure, which ignores possible profit from .sluicing operations, is a liberal estimate of what will be required. Your directors have given very serious and prolonged consideration as to the most satisfactory way in which to obtain this additional finance, and they have come to the conclusion that the best method to adopt is to issue £SOOO worth of 10 per cent debenture stock, convertible at the option of the debenture-holder into ordinary shares. As the present capital, £30,000, is fully subscribed, it is essential, before issuing debenture stock on the above terms, to increase the ordinary share capital of the company to £35.000, and this is provided for in the resolutions which will be submitted at the*'second annual general, meeting.

.Briefly, .the. terms . and...conditions... upon which the debenture stock will lie issued are as follows-;—lssue: worth of; debenture ■ stqdk to he>:.4ssuec) in denominations’ of ;£5 or multiples of £5. Tm-ni: Three years to January 31, 1934. Interest ; L 0 per . cent per annumy payable half-vearlv on July 31. and Jannarv 31. Security: A floating choree over all the assets and undertakings of the company. Convertibility: The dobentnrediolder has the option of converting his debentures to a like nominal value of ordinary, shares at any time un to January 31. 1932. Redemption: The company reserves the right to redeem anv debenture at any time after January 31. 1932, on payment of interest to the date of redemntion nlus an additional three months’ interest. Payment: 50 per cent on. application; .50 per cent at not less • than one month from the date of allotment.

. Should the -resolutions be carried at the annual meeting, immediate steps will he taken to issue debenture stock on the above terms. It is the intention of the directors to offer first to the existing. shareholders of file company the right to take up the debenture stock. If the issue is over-sub-

scribed, allotment will' ne made e!s nearly as possible in proportion to the share holdings of the applicants.. It is expected that the legal formalities will he completed early in January; 1931.,

and shareholders will then be circularised regarding the subsription of debenture stock.

The capita] of £30,000, and this, with overdraft £3OB, and sundry creditors £338, make the liabilities £30.646. On the assets side, mining property is set down at £27.975. cash on deposit £4OO. gold on hand £757 .sundry debtors £45, and preliminary expenses £1445.. The sluicing account gives the proceeds of gold won as A £1549. Expenses totalled £BBI, leaving a balance of £667 to be carried to the mining property account. The balance of that account brought forward at March 31, 1930, was £24,664. Expenditure on pipe line, dredge and roads amounted to £2314, on plant, tools and buildings to £476, and on fees, salaries and- development expenses .to £1230, making tlie total expenditure £28,684. Interest, transfer fees and sluicing revenue of £709 brought the total down to £27,975.

The resolutions to he submitted the annual meeting provide: (a) That for tlie purpose of issuing £SOOO of debenture stock the nominal capital should be increased to £35,000 by the creation of 20,000 ordinary shares of 5s ranking pari passu with existing:shares; and (b) approving of the proposal jo issue £SOOO of. 10 per cent debenture stock. ’

The special report of the directors, accompanying the balance-sheet, estimates that the dredge will be completed and in operation ,by April 18, 1931, and that it will require -,£3750 to meet the whole of the liabilities up to that date. Report on Visit. Tlie following are extracts from the report of Messrs J. E. Wheeler (chairman), R. Lee (director), and W. A. Mitson (secretary), who visited the claim in November:— Transport.—We are satisfied that our engineer did right in deciding to transport the hulk of the plant over the Three Mile Bluff, and he is to he con-

gratulated on the successful achievement of a work which would have daunted most men. At the time of our visit practically all the plant and material had been landed on tlie claim with

tlie exception of the ladder, tumblers and a few small parts of tlie machinery

These are on the south side of tlie Three Mile Creek, and will he delivered on the claim during the next week or so. The work of transport is now practically finished. It has been costly,

and to it must he attributed the greater part of the expenditure in excess of the original estimate, lnit with its completion disappears the one serious ob st.nele to the construction of the dredge, delivery and laving of the pipes.

Water Supply.—We made a careful

inspection of the pipe line from the claim to Lake Alpine, a distance of

'two miles ami, a-half. The pipes pass 1 through most difficult country. A considerable amount of piled trestling was required to carry them over the lagoon and across the swamp, which extends for about a-quarter of a mile from the claim. Long stretches ’ of the track through the bush had to be corduroyed to enable the pipes to be transpored. These trestles are all of silver pine, and will last out the life of the claim several times over. The intake at Lake Alpine is solid and well designed. The overflow from the lake is 4ft 6in above the top of tlie pipe, which allows of some 250,000,000 gallons storage. Elevating operations were in full swing, and a much larger draw-off was taking place than will be the case when the dredge is in operation, yet a large stream of water was passing over the cutlet . Now that the company’s application for a dam site has been granted, we are in the fortunate position of being able, at a very small cost, to raise the height of the present dam and to store water sufficient to prevent interruptions to dredging operations during the severest drought. Timber. —The cost of procuring the right class of timber has greatly exceeded the amount allowed in the original estimates. Our engineer based his estimates on reports received from practical timber men after they had inspected the bush. He found, however, that to obtain the desired quantity of timber of the class that would make a. strong and lasting job of the pontoons he had to go further afield. This resulted in much more costly haulage. It is satisfactory to know, however, that the 'timber used is of splendid quality and most suitable for the purpose lor which it is

being used, j ; 1-11^1 Elevating. The elevator was tYsbfl to excavate a site suitable for launching; the pontoons and opening tip a' face for tlie dredge,to start on, This work was commehcpii iplithe 1 .fiiiddle of May, 1930, and continued uptliv October 23, 1930. Tlie grcjypd. ,treat ( ejf-« yielded 4060 z 'of gold . and: a,' nqt profit of over £6OO. The elevating plant was then slift.ed to the vicinity of bore No. 25 —25 chains north of the site of the pontoons. This site was chosen because the boring had proved the ground to he shallow and thus more suitable for elevating, also had yielded a rich value. Elevating operations so far have shown a substantial profit, and have aided our finance. There is no reason to think that they will not continue to do so. The amount of ground that will be worked up to the time of the comnletion of the dredge will he small, and will not affect dredging operations to any appreciable extent, while the information gained of the nature of the ground : -will be of great value in future operations.