Financial Reviews HANDSOME RETURNS LIKELY

NZ Truth, Issue 1182, 26 July 1928, Page 16

Financial Reviews HANDSOME RETURNS LIKELY

Paddy's Point Goldmining Coy., Limited, Prospectus REVIEW OF £15,000 CAPITAL ISSUE J (By "Flat L»ux.") Can the departed glories of the past be resurrected on the gold-fields of Otago? "Fiat Lux " believes they can, and, therefore, looks favorably upon the prospectus of Paddy's Point Gold. Mining Company, Limited.

THIS company is being formed m Dunedin for the purpose of acquiring the freehold of certain proved gold-bearing lands m the Tuapeka district, of which more anon. The nominal capital is only' £16,000,---divided into 5/- shares, and of these 10,000 are to be allotted to the vendor of the options, water rights, etc.; 6000 will be placed under option at the par value of 5/- per share to the subscribers of the first 20,000 contributing shares, m the proportion of one option share for every four contributing shares for a period of two years from; the date of incorporation of the company; the balance of 45,000 shares axe now offered to the public for subscription at the rate of 6d. per share \on application, 6d. per share on allotment and the balance m calls of 6d. per share at intervals of not less than one month. This writer is of opinion that these very reasonable terms must meet with the approval and support of speculators. The properties which the company is to acquire are situated m the Tuapeka district, m what is known as the Forsyth "cement" basin, and are m the same geological area as the very profitable Blue Spur G.M. Claims; the Gabriel's Gully Sluicing Company and the Lawrence G.M. Company, all of which have been winners of the yellow .metal for which ■■■■■'■■..■■- ,____ men barter their .souls. The total area of the new company's Interests amounts to 680 acres, : of, . >■ ■ . which 661 are 'freehold and virgin country, and 19 acres a special alluvial olaim held by virtue of a license granted under the Mining Aot, 1926. In addition to the above land, the company takes over two water-race rights, commencing m the \yaitahuna river, together with the right to 40 heads of water. ; The vendor of the options over the above freehold properties and water rights has had the area well proved before offering it to the public. * Although he is to receive £2600 for all his rights, he is taking the whole amount out m fully paid-up shares.,/ ... This is a very unusual procedure and can be interpreted as evidence of unbounded faith m the proposition, prbv- j ing to speculators that they will get' a good run for their money. The proving of the area was effected by Messrs. McColl Bros., whose prospecting work was checked up by two independent . people. The McColls state that they prospected the properties (to be acquired by the company) and that the results were a most agreeable surprise. They consider the claim to be one of the best they have come across In . their extensive experience of mining m this and other localities, m dredging, sluicing or hydraulic-elevator mining. Their report proceeds' that the claim contains over 250 acres of the "cement" deposit, similar to that which has been profitably worked m the. district for the past sixty years. They tested the alluvial m no fewer than 35 different places over the area »rid obtained gold everywhere they tried. The very poorest returns were what ■ is termed a first-class sluicing" proposition, while m ' ■ - • • several places a grain to the dish was obtained. All Over they found' ■gold m payable quantities. A number of test holes were put down to ascertain the values" per yard, the wash being cradled and the winnings dried and weighed immediately. Even this crude method .produced an average over the claim of one shilling and twopence per, yard, which; it is considered, would be .considerably -.im-' proved, by the high-pressure sluicing which will be possible when the race, is m washing order. Commenting on the water rights, the McColls state that it is one of the best m the district and: gives an assured supply and sufficient, pressure to work the whole, of the claim, whilst the cement bottom under the alluvial makes' a thorough clean-up with every "paddock" very simple. , They follow, the above with • 'suggestion— which appears very sound— to the effect that before taking the right Into the claims pressure pumps should be put on m the gullies, where^ y sufficient water Is available except : ; for a short time m summer. s These pumps, they point out, could be operated by electric power; operating some of the easy ground could be producing gold soon after taking de- . livery of the properties. They also point out that the land not being worked on could be profitably leased for grazing purposes, as it -will take the company a great many years to work over the whole area tb be acquired. Frederic Ellis, who v has been connected with, mining activities m the

Unbounded Faith

Cement Deposits

Tuapeka district for a great many years, reports that he witnessed the foregoing prospecting work, . which he considers was done thoroughly and the results proved most satisfactory. •He proceeds to point out that the land now offered is part and parcel of 'the ; same deposit as Blue Spur, Wetherstones and Waitahuna Gully claims, which have bee» profitably worked for over sixty years. What makes .the claim particularly attractive ls the fact that It is virgin groiind, never having been worked on account of the fact that it was freeholded m the 'sixties and that all available water for sluicing was then m use.' . He goes on to express the opinion that m view of the results obtained m the prospecting he witnessed and the fact that there is such a heavy overlay of alluvial above the cement; the company should enjoy a great number of years of profitably sluicing work. '.-•'"'■ Professor P. Marshall, M.A., D.Sc, F.G.S., who made an extensive geological survey of the Tuapeka district m 1918, made most interesting references to the area ln his report on the Forsyth "cement" deposits. He states, inter alia: "The cement deposit is well exposed In the railway cutting near the ,(For__yth) railway station and it can be traced con- ' tinuously from that ""* ' locality to Paddy's Point. ... "The deposit has been worked by individual diggers over a considerable portion of the area and at Paddy's Point, m particular, good results were obtained ... . "No work has been done for a long period and no attempts have yet been made to work the deposits on a large rfcale, mainly because all the available water ls being used at the Blue Spur, Wetherstones and Waitahuna claims." \ This report is of particular significance to those contemplating Investriient m this company, since it states upite clearly that the Paddy's Point cduntry is geologically the same as the Blue Spur deposit, which, according to Vinceht Pyke's very interesting "Histoty ''-. 6t "the Early Gold Discoveries . m 0%go : ," ■' produced, over £1,000,000. worth of gold. •-' its area of "cement" country was only 54% acres, against this company's 250 acres of similar deposit. Another very, valuable opinion upon the prospects of the profitable working of this country is provided In the paper contributed and read at the 1926 Mining Conference by W. R. Smyth, entitled "Tuapeka Cement Deposits," from which the following extracts are made: . "The most important feature of these cements ls that they all carried gold. , Besides this, the precious metal was found throughout the whole mass from the surface to the rock; bottom, and, as, a rule, the richest stratum- was lying on the rock h.ottom. "In the Forsyth-cum-Paddy's Point basin, no work of any great extent has been carried on, although good returns were said to have been obtained by individual miners m the early days. "This dormancy was probably to be accounted for by the fact that almost all the available water was used ' at Blue Spur, Wetherstones and Waitahuna Gully. "It would seem ■that ; everything ____________________ pointed to these ' cement deposits as offering scope and opportunity for the remunerative Investment of capital .to develop what were undoubtedly the largest alluvial mining proposition's at present known m Otago." Since the commencement of gold- _ mining operations m New Zealand In 1857, when the first parcel of gold was exported, the Dominion has sent overseas nearly 100 millions sterling value of gold bullion. Of this huge total, Otagp alone has contributed nearly 81 millions. i /Much of Otago's alluvial goldbearing country has been worked only with the crude appliances .of bygone days. . With modern machinery, ample water and cheap electric, power, it should prove highly profitable to'rework much of the ground. In the case of the Paddy's Point G.M. Company, however; the ground is virgin and, proved gold-bearing. Speculators should obtain very handsome returns indeed from* this venture, which has the writer's fullest support. .J