N.G. Goldfields
pp. 24-25 · Read in the full issue
Ltd.
New Accounts Show Co.’s Position
THE second annual report of the directors of New Guinea Gold fields Ltd. was presented to share holders on December 9 and adjourned to allow a complete statement of the financial position as on September 30 to be made.
These accounts are now to be pre sented at a meeting on February 22 and are as follows:
An examination of these figures in dicates one reason for the slow pro gress being made in the development of this company’s properties on the Morobe field.
More than 4,000,000 £1 shares have been issued, mostly for the purpose of
Capital And Liabilities.
Nominal Capital— £ £ 5,250,000 Shares of £ 1 each — £ 5,250,000 of which there have been issued — 4,074,182 Shares called up to £1 per share 4,074,182 375,000 Shares called up to 1/- per share 18,750 4,449.182 4,092,932 Less Calls in arrear ... 7 4,092,925 Shai'es to be allotted for purchase of leases 9,075 Sundry Creditors 20,723 Premiums on Share Capi tal Account 31,170 £4,153,893
Assets.
£ Mine Property and Mining Interests 3,709,976 Buildings. Plant and Equipment 103,568 Stores, etc., on hand 42,415 Sundry Debtors 19,028 Cash at Bank and on hand 88,305 Payments in Advance 5,474 Prospecting and Develop ment Account—Balance at 30/9/30 £110,688 Add Expenditure for year ended 30/9/31 74,435 185,124 £4,153.893
Debits.
Profit and Loss Account for Year Ending 30th September, 1931.
To Expenditure at Mine— £ s. d.
Prospecting and Development . . 60,689 14 11 Road Surveys and Construction 10,747 7 1 Geological Survey. Sampling and Assaying 9,503 17 8 Depreciation on Buildings, Plant and Machinery 18,504 6 9 Administrative Expenses, Sydney and London: Directors’ Fees. Salaries, Tech nical and Consulting Fees and Expenses 8,908 11 6 Designing Expenses and Experiments 2,382 1 3 Travelling Expenses. Postages.
Stationery, Cablegrams. Legal Expenses and Sundries . . 2.031 14 7 Taxes 570 19 8 £113,338 13 5
Credits. £
s. d.
By Sale of Gold 34,662 11 7 Sundry Revenue at Mine . . 953 17 0 Interest Received 3,221 15 8 Transfer Fees 64 15 6 Balance Transferred to Pros pecting and Development Ac count 74,435 13 8 £113,338 13 5
purchasing mining properties and leases from the original holders. To pay even 10 per cent, on its issued capital, this company must earn £400,000 per annum. To bring the Mo robe establishment into the condi tion in which it can earn even half of that, a very large further capital expenditure is required on plant and in providing communications. The mill, which the company is now estab lishing, is capable of treating 100 tons of ore daily; and it would be a remark able thing if such a mill could pro duce gold to the value of £150,000 annu ally, from which, of course, would have to be deducted all operating expenses.
In other words, it is perfectly clear that if this company is to bring itself into a profit-earning condition within a reasonable time, it must eventually get rid of a portion of its present enormous load of capital. The shares are valued on the market at between 5/- and 6/-, and, on present prospects, that is about their fair market value.
If the company is to do any good, it must first of all sacrifice about two thirds of its present issued capital; provide a few hundred thousand pounds of additional capital for the construction of a suitable road to the coast and the installation of adequate plant; and then it may go ahead and produce quite rich profits for its share holders. It will be impossible to bring in new capital so long as the present huge load of capital remains.
The gold is there there is little doubt that the present large areas held by this company contain large, pay able quantities of the precious metal.
But it is equally obvious that the com pany is at present being suffocated under its load of unproductive capital and that all those concerned realise this and are making no special effort to achieve anything worth while, until the main body of shareholders recog nise the position and agree to a writ ing down of capital.
However, there are likely to be lively developments before that. The adjoin ing “dollar” companies are at the point of production and, presently, will be returning rich dividends. The hun dreds of people who sold their rich interests to New Guinea Goldfields Ltd. for shares, viewing these rich profits from next door, are not going to sac rifice a big slice of their share values without sharp protests and bitter criticism.
Probably, they have reason for com plaint. But the position is there in the figures, plain for anyone to see, and the sooner the shareholders recog nise it, the sooner will something be done.
The New Guinea Administration would be doing a public service by forcing the position a little. There is an enormous amount of undeveloped wealth in the Morobe goldfields, and it is of national importance that it be brought out. From the public point of view, it is wrong that such develop ment should be prevented because this huge and swollen New Guinea Gold fields Ltd. has got astride of a large section of the goldfields and, because of its organisation, cannot produce the gold itself or permit anyone else to do so.
It is no use blaming the present directors of N.G. Goldfields Ltd. They are no more responsible for the position they find than Mr. Lyons is responsible for the Australian national debt.