GOLD MINING

Hokitika Guardian, 18 March 1932, Page 2

GOLD MINING

HINTS TO INVESTORS. !5

A 3 <7 (“Croesus” in N.Z. Financial Times.)

The one really bright spot in the whole investment market is the gold mining industry. There is no sifgn of a depression here. On the contrary, feverish activity is in evidence everywhere. Unfortunately, the geld mining industry in Now Zealand is small: There arc between thirty and forty companies in operation and about s(x dividend payers. Now companies are forming fast and capital is eagerly seeking the only chance of profitable exploitation. For the uexj- two or three years this section of the market will he well in the limelight. With < osts tailing, an unlimited market, with a. ready sale at rising prices, gold mining profits are being added to, in ;i 1 i ways. And tlie Government is helping with subsidies whereas the logical step would he to especially tax such fortunate people. A gold boom is starting in this country. Much money will he made by investors. Nobody. however, should touch gold mining shares until the trouble is Ink- j en to know something about the busi- j ness. The gold mining industry vis), the hardest industry of all to be sure' of the facts. The way is too easy for fraud and misrepresentation. The actual, head is not a well-known business ' man, bti{ is somebody miles away ill the bush. No investor, therefore. should touch gold mining |Shares, especially in new ventures, withoutindependent information I’rom the district. The men in the concern should also lie subjected to the closecst inquiry as to their previous record.

Investors who arc able to look after themselves should consider spreading from 10 per cent, to 20 per cent, of their personal foitime in tins section of the investment market. I t is the only section where prices nill rise, .and with all its admitted umer-t-air.tios, which make it mere or less of a gamble,, the gold mining industry is the safest investment in New Zealand to-day. No investment is certain.

Gold mining scrip unheard of for twenty years is once again making its appearance on the market, buyers piloting for everything. Golden Dawn, with 5s shares, floated two years ago in the Auckland district, and, although there are no dividends, yet, it has already had its shares up' at 9s 9d -and the market is .still at about 6s Bd.

This is an indication of the fluctua-; tions in the prices of gold mining shares. The “N.Z. Financial Times” has accepted the suggestion of “Croesus” that special reports be obtained on every gold mine operating m Now Zealand, and that all the avaffsiblo information and data be gathered and kept, up to date. This will take a good deal of time and cost a great deal of money, but., in view of the investment outlook and the virtual certainty that some gold mining shares will rise very sharply and many new gold mining flotations, good, had and indifferent, make their appearance on the market, the expenditure will F-c well worth while -and prove invaluable to readers for their own private information. Nobody has yetattempted the protect,’on of the investing public in gold mining vent- i ture,s, |

if and when the investigations and reuorts being obtained indicate that a. very fine thing is like'v to be nrde out of any proposition for shareholders, the ‘‘N.Z. Financial Times” will publish the information for its re-d----ors. Too much caro cannot be exercised before making an investment in gold mining shares, and, which the probabilities are that this journal will, through over-cautiousness and through the need for the utmost conservation, miss many chances of profits in gold mining shares, it is only to he hoped and expected that if anything worth being in is discovered, it will prove a correct selection.. I 'Croesus" repents that the gold mining section of the stock market is the only section justifying purchases in the immediate future, and that money is more likely to he made in that field of investment this year than anywhere else. Just at present a good gold mine is the salest and most certain form of investment in New Zealand,

There has never been a more favourable opportunity for the profitable Production of gold in the history of the British Empire. Prices lmv u risen phenomenally, and may continue on the up grade. Then' is no prospect of over-production and very little chance of the supply catching up to the British demand. Falling costs in the wages item will more than counter-balance increased taxation. The increased production of gold is. mceovor, not anti-social, ami along the tight eron-mic lines for national ~vclliiv and world rc< :r. Naim's o ' i’ilot rise until gold supplies ili-

The private investor, however, must he particul >rfy careful to d..-H--gnn.ii between a sp-eoh t ion in gold ai.d an iin e.r.tmciit in the gold miii.ug industry. New concerns, not thoroughly tested, are not an i u vest incut. No investor shorn! go in too heavily Ini •i now geld mine until he In s had reI, : • rt.s from eomnelcnt aui lim it i s familiar with the dislricj and the details of the nronn.Htion aid with ktiowl'd -e oi the men |win ipally i oiieeriied. In'.-still's should gel reports for them elves to cheek no the oumpanv’s ow i reporls. In gold mining. ,;is in mo t things, there arc always unsavoury characters prepared I"

fleece an unsuspecting public by floating a “dud” proposition yielding high flotation profits. Xo invest "r should he go gullible as to lull for the more obvious swindles.