N.G. Goldfields Developments

First Dredge is Ready. —Second Building.—Third on Order.

EVERYTHING is now in readiness on the New Guinea goldfields for the starting of the No. 1 dredge of Bulolo Gold Dredging Ltd. The date for the commencement is March 21, and the official starting will be performed by Brig.-Gen. E. A. Wisdom, Administrator of the Territory.

FOLLOWING a memorandum to shareholders of both Placer De velopment Ltd. and Bulolo Gold Dredging Ltd. regarding the sale of the Bulowat and Burnside areas, in New Guinea, by Placer to Bulolo, a further memorandum was issued on February 29 concerning arrangements for financ ing the dredging operations on these areas. It was previously mentioned that two dredges would be installed on the property.

In the latest memorandum, it is stated that the Bulolo directors consid ered that, without jeopardising the or iginally contemplated dividends, the cost of equipping the newly-acquired areas, could be met from dredging pro fits, augmented by the proceeds of an issue of the comparatively small num ber of 65,000 new shares.

“In line with this,” the memorandum continues, “the Bulolo directors now advise that they have accepted from Oroville Dredging Company Limited and the International Mining Corpora tion an offer to take, at a net price of six United States dollars per share, the whole of the above issue. The price of six United States dollars represented in Canadian Currency $6.90, in English Currency £1/14/10, and in Australian Currency £2/3/7.

“Oroville Dredging Company Limited, which is an old established English cor poration in which the Consolidated Goldfields of South Africa Limited is substantially interested, is one of the world’s most successful gold dredging companies and, with its properties in Colombia now nearing exhaustion, it was desirous of becoming interested in Bulolo. The International Mining Cor poration, which is of New York, shared with the Consolidated Goldfields Com pany in the original Bulolo financing.

Of the new issue of 65,000 shares, the Oroville Company has taken 55,000, and the International Mining Corporation the balance.

“While the directors of the Bulolo Company welcome the co-operation of the Oroville Company, and the further co-operation of the International Min ing Corporation, they regret that it was found inadvisable to offer the new issue for subscription pro rata by all share holders. Consideration of the existing exchange position, which at present seriously handicaps Australian sub scribers, and the very disturbed world financial conditions, influenced them in their decision to follow the course adopted. Furthermore, an issue to all shareholders would have entailed delay, which in the interests of the Company it was desirable to avoid. The modesty of the sum of the present new issue of capital and of the issue of paid up

shares that will be made to satisfy the Placer Company’s sale consideration is very satisfactory in light of the large profit value of the new areas to be equipped.

“Placing of the order for construction of the pontoon and much of the super structure for the No. 3 Dredge, ar rangements for which were in train, has now been effected —the work has been entrusted to Poole and Steel Lim ited, of Sydney, who built the previous pontoons. All equipment required for the extension of the power line to the Bulowat area has also been ordered, so that electric power for construction workshops may be supplied to the new areas as fast as possible.

“As to the advantages to accrue to the Bulolo and Placer Companies re spectively, the Bulolo position will be improved by a very substantial in crease in the originally estimated in vestment return (theoretically by ap proximately 40 per cent.) as soon as the new areas are equipped, and by some increase in the life of the operation.

The increase in the monthly yardage to be dredged will contribute to this en hancement of return by its effect in re

ducing the dredging costs. As the Placer Company will be paid in Bulolo shares, and is already a large share holder in the Bulolo Company, it will profit from the satisfactory terms to the Bulolo Company upon which that Company is acquiring the new areas.

A further benefit to the Bulolo Com pany is the acquisition by it from the Placer Company, as part of the terms of sale and purchase, of such develop ment possibilities as may be found to exist in the two dredging claims shown on the plan attached to the fifth an nual report of the Placer Company as the Placer West area. A further bene fit to the Placer Company is its acquisi tion from the Bulolo Company of the right to recover gold from the undredg able area of about ten acres located at the Southern end of the Bulolo original area and immediately to the North of the Arnolds Leases already owned by the Placer Company.

“The settlement as between the two Companies of the terms of sale and purchase proved a difficult one. The arrangement, as set out in the previous Memorandum to the shareholders of both Companies, whereby the final share consideration that will pass to the Placer Company will be dependent on the actual gold recoveries and work ing costs on the original Bulolo area and also on the Bulowat Burnside areas, was considered to be the fairest and technically the soundest method of determining the matter. Seventy-five thousand fully paid shares of Bulolo Gold Dredging Limited will be allotted to the Placer Company two months after the first of the additional dredges commences operating on the new areas, and a like number two months after the second dredge commences operat ing thereon, while, after dredging has proceeded for two years on these areas there will, on a basis that has been agreed upon, be a further and final al lotment of shares to the vendor Com pany.”