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THE HONGKONG WEEKLY PRESS AND
important of these reefs. I may add that the Government of Pahang are at present favour. able to an initiation of an active policy in genuine development work, and would probably be disposed to grant State aid to carrying on bona-fide mining work. provided we can show that we have the working capital necessary to develop some of these reefs. The question therefore resolves itself into this Are you prepared to go on, or are you going to allow some other Company to develop these reefs, dis- covered during years of costly work which has been done at your expense?
of two promising reefs, one at Bukit Prenol, which is 2 feet 6 inches thick, carrying good gold; and the other reef, which is a distance of 14 miles to the south-east of it. and from which traces of gold can be obtained from any portion of the lode, which is 7 feet wide. Guban.-Here again Mr. Lock points ont in para. 35 in his report. that quite pretentious work had been done, and that two tests were made by him of the shaft stone which is lying at grass in obscured heaps, assayed 114 dwt. and 4 dwt. respectively, and adds, that it would be folly to neglect further investigation. Messrs. John Taylor and Sons. a distinguished firm of mining engineers in London, reported upon the Gubau district, and the shaft alluded to in Mr. Lock's report was the outcome of their recommendation. Messrs. John Taylor & Sons in their report stated:·
That the one and all important work that is strongly recommended to be vigorously proceeded with is the sinking of a shaft ou the Gubau lode, as the future of the mine depends on the development of the lode in depth. Small prospect drifts should also be put in at likely places, and prospecting work generally should be carried on because it is reasonable to expect the discovery of other valuable reefs. The fact that the leaders *and clay formation overlying the cap of the lode have already produced nearly 500 ozs. of gold augurs well for the future pros- pects of the Gubau Mine and the extensions of same, and is of itself sufficient inducement to incur the necessary expenditure for the erection of machinery, and for the develop- ments recommended, seeing that the con- tinuity of quartz matter in vein shape has been opened up for a length of 1300 feet has already been fairly well proved by the differ- ent tunnels and workins thereon. We think "that there is every probability of a successful mining enterprise being established at Gubau if our recommendations are carried out. The indications and facilities for economical devel. opment both at Mulument and at Sungei Rusa are also of a very encouraging nature. and fully justify further exploration at those "centres." Assays made by them of many osamples taken from various parts of these workings gave very good results; the best was
from two samples taken out of the upper tunnel at Mulumet, which gave 6ozs. 21gr. and 2ozs. 20gr. respectively. The highest of the Guban samples was 2ozs. 4dwt.. 22gr. being the average of two assays mrde of ore broken in the No. 1 Main Cutting: the next from the Intermediate level, which yielded loz. 7dwt. 18gr. and 17dwt. 23gr. respectively for the two samples tried. There were besides 7 other samples taken from several places on the mine which gave 11dwt. 10gr.-3dwt. 22gr. -2dwt. 14gr. and 1dwt. 7gr. for tou. The sample from Sungei Rusa assayed 5dwt. 5gr. It is true that you have heard from time to time of equally good. if not even of better results than these, but you must remember that those were obtained from rich patches in the disturbed auriferous land which, we are now forced to abandon upon the assurance of a geological expert opinion that it was unlikely, if not impossible, for a permanent lode or reef to exist, and which is confirmed by a sad experience, as we have signally failed to find any after many years of diligent search. Now, gentlemen, you have heard the opinion of Messrs. John Taylor & Sons upon the Gubau, Malumet, and Sungei Rusa districts, and what Mr. Becher and Mr. Lock-two eminent mining experts have had to say upon other portions of your concession, the northern section of which contains many strong reefs as distinguished from the auriferous patches hitherto worked southwards, where our attention has been con- centrated, and, as you have heard, where it was unlikely that a permanent or strong lode could form. These opinions seem to be sufficiently encouraging to warrant a further test in the more settled country in the north, but what the result of such a test would be. I am not expert enough to tell, though from the appearance of the various outcrops and reefs referred to, which I have been to see, examined, and questioned the miners in regard to them, I am not afraid personally, to venture on this new enterprise and to put money and work into it, and can hardly imagine that you will willingly allow your claims and chances of future profit to lapse without an attempt to at least prove the most
was
You now
The CHAIRMAN:--Gentlemen. You have now heard what Mr. Hughes had to say about your property. He has compared the remarks of Mr. Lock on the promising country with those of earlier authorities, and has found in them strong points of agreement. know, as well as the Directors can know or can tell you. the best and worst of your property. It remains for you to say what you will do with it. Before I go further, however, it may be as well to remind you that if our impecunious con. dition had not brought us to a full stop. the attitude of the Pahang Government in reference to the labour clause of our lease would necessari- ly have done so. As you are no doubt aware. this clause provides for employment on the workings of a certain number of hands. This is inserted, very wisely, in all mining leases as a precaution against speculators acquiring such leases and holding them merely with a view to gaining an unearned increment on the value. Well, I am bound to confess that never. at any time in the history of the Company, have we been able to properly comply with the require ments of the Labour Clause, but the Govern- ment, so long as it saw we were endeavouring to develop our concession. did not press for a penalty or seek to unduly hamper us. They knew that we had put far more dollars into the soil than we were taking out, and they possessed their souls in patience. When, however. it became apparent to them that we were near the end of our resources, and that the efforts of the Company were confined to surface work (this has latterly been the cas then they became imperative, and they now require that we shall furnish sufficient capital to develop the conces-
sion or that we shall surrender the whole or at any rate a portion of our concession. In fuct it has become imperative that we should surren- der a very large portion of our concession; but as a matter of fact we should lose very little by doing so. Since the postponement of this meeting. we have received from the Re sident-General of Pahang a letter dated May 17th. in continuatiou of some cor- respondence had with Mr. Hughes whilst he was at Singapore, and I will read to you the concluding portion of it: His Excellency, after full consideration of the subject, came to the conclusion that no exten- siou of time can be given, but that if prior to the 1st September next the Punjom Mining Company apply for a fresh concession of, say, 10 square miles within the area of their present concession, and can show that they can find sufficient capital for properly developing such concession. their application will receive favour- able consideration with a view to the issue of a lease under the mining enactment in force at the time, the existing lease being cancelled." In any case the authorities did not intend to continue to allow the Company so large a con- cession unless we are prepared to comply with the labour clauses, and we could never comply with those clauses because we should probably never have sufficient capital to do so. With regard to the area of ten square miles, it would be possible to include in that nearly all the valuable reefs and lodes referred to by Mr. Hughes with the exception of Mulumet and Sungei Rusa, as they are all in a straight line extending due north from our headquar- ters. This, gentlemen, therefore is the position. We must either subscribe fresh capital or give up the lease and liquidate. The assets you possess are valuable if you intend to employ them, but I must point out to you that most of them are either of an unrealisable character or else they can only be realised at a great loss. Thus you have at the mines various roads, bridges, and buildings, all of which cost much money to provide, but none of such assets would produce anything to speak of. Then the tram- way, trucks, bullock carts, live stook, machinery,
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[June 4, 1904.
mill plant, timber, and stores would not realise anything like their cost. Finally the preference shareholders would take whatever small dividend there might be to receive. If, on the other hand, you decide to reconstruct you can start clear with a valuable property, a certain amount of plant ready to hand, a magnificent water power, and no liabilities beyond that represented by the shares, and you could write down the value of these to a figure on which it should not be difficult to pay dividends. I am not here to-day as a partisan; I am here to record your decision and see it carried into effect. I have endeavoured to make the alternatives perfectly clear to you. You will recognise without difficulty that there is no middle course open to
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Of course we can do nothing definite to-day beyond taking a show of hands on the course that commends itself to the meeting, and I should be glad to hear from shareholders which plan they are in favour of voluntary liqui dation and winding up, or voluntary liquidation and reconstruction, transferring all the property to the new company.
Mr JOSEPH Has the Board any plan to lay before the shareholders?
The CHAIRMAN: Yes; it is simply this: To form a new Company to have a capital of $300,000 in 100.000 ordinary shares of $3 each, $2 paid up, and the balance to be called up at the discretion of the directors. The capital to be issued as follows :— 60,000 shares to the present ordinary share- holders in exchange for their existing scrip on payment of $2 per share, with a liability of $1 remaining.
18,000 shares (fully paid up) to preference shareholders in exchange for their $1 shares and interest accrued thereon. 22.000 deferred shares, of the value of $3 each. to be offered to the public at a small premium.
Mr. JOSEPH: Don't you think it would be better to liquidate the old Company altogether. and leave the shareholders to take shares in the new Company if they like? Under the plan you propose they will be dragged in whether they wish it or not.
The CHAIRMAN: The proposal would have to be adopted by a three-fourths' majority of the shareholders before it could be acted upon. I am afraid it would be rather difficult to carry out the plan you suggest, Mr. Joseph. What is more, you would lose a great deal of time, and time is of importance, as according to the notice we have received from the Pahang Government we must come to a decision by the 1st September.
Mr. JOSEPH: I want to know whether, under your plan, a shareholder if he does not want to participate in the new company will be compelled to join?
The CHAIRMAN: We might purchase his shares at market value,
Mr. JOSEPH-Suppose he wants to leave his claim?
The CHAIRMAN:-He could do so. Mr. JOSEPH It would not be compulsory on him-
The CHAIRMAN --The shares would lapse. Mr. T. F. HOUGH: Don't you think an alternative scheme might be considered under which we might escape the expense of liquids- tion and the delay by having another issue of preference shares on the same lines as the existing preference shares, but having only a second claim?
The CHAIRMAN: I should be very favourable to that if I thought there would be any chance of their being subscribed.
Mr. JOSEPH remarked that the whole of the original preference shares were not taken up.
Mr. HOUGH said he had no resolution to pro- pose, but it had just occurred to him that the expenses of liquidation might be avoided and the necessities of the case met by an issue of preference shares to have a second claim on the
assets.
The CHAIRMAN-I am afraid, Mr. Hough, your proposal is quite impracticable for several reasons. First of all, it would be very difficult to get the shares subscribed, because they would only come after the present preference shares, and the assets would not be sufficient to satisfy the first preference shareholders. In the second place, I am afraid the Pahang Government would say that any amount we are likely to get under that plan would be too small to carry on
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