THE WAIHI COMPANY

Sun (Auckland), Volume 1, Issue 35, 4 May 1927, Page 2

THE WAIHI COMPANY

A NEST-EGG OF £500,000 By Periinax.

The Waihi Gold Mining Company is usually referred to as a mining company with some good investments. It might be more aptly described as an investment company which owns a gold mine, more especially since the falter asset appears in the balance sheet at about a quarter of the figure representing the gilt-edged securities which have been put by for a rainy day. Few people realise just how remarkable is the liquid position of this concern. The ambition of every trading institution should be to have reserves equal to its paid-up capital, thouerh few attain that happy end, and the ambition of every bank and insurance company is to have reserves double the amount of its paid-up capital. Yet here is a company which, after repaying three-quarters of its shareholders' investment, still has holdings of Government and other first-class securities amounting to rather more than four times its remaining paid-up capital of £124,000. In the last 10 years the board has spent a fortune on development work, but the fixed assets item is lower now than it was in 1917. At present the 5s share is covered by a higher value in liquid assets than in 1917, when U had a nominal value of £l. Those who purchased the shares early in 1921, at the price of 28s or thereabouts, have had a return of 15s in capital, plus 12s in dividends, and still have a share worth approximately 27s in net assets, though on the Stock "Exchange it hovers round the price of 18s. The following table illustrates in the simplest form the course of the company’s history since 1917, covering the distribution of £248,000, and then another £124,000, in capital refunds, and showing the course of the assets value of the shares: —

In the foregoing table, total assets are at balance sheet figures, while of the item 'investments” the Government bonds issued in payment for th*? Horahora works are included at face value, and the remainder, which are ail Government and other first-class secu rities. are placed at current market values. When the refund of 19s per share was made the payment came only partly out of disclosed investments and It is reasonable to assume that a similar practice was followed last year. Since the item of cash in hand was three times the usual amount, it is probable that something came out of that. Consequently the three items in italics in the last line of the above table have been given on the assumption that of the £124,090 last refunded, £90,000 came out of investments and the balance from other sources. Whether or not this was the case, the total asset value of 27s per share is unaltered and the estimated investment value of 22s fid is affected very* slightly. The fixed assets item of mine, plant, machinery, etc., was, in 1925, shown at £42.500 less than in 1921 and. according to the brief cable advice so far received, was still further written down last year. Just what else in addition to the conventional items of mining machinery ig covered by this item, is not at all clear, but there is little doubt that the board has taken advantage of the numerous opportunities of putting away some extra portions of profit, which have been afforded by the frequent and varied changes in this section of the balance sheet.