The Secretary (Mr. George E. Saunders) having read the notice convening the meeting, The Chairman said: It is now my duty to lay before you a short statement of the company's affairs; but the last meeting having been held so recently, it will not be necessary for me to keep you very long. With regard to the accounts, the greater part of the amount of £78,442 under creditors is on account of a loan from Willoughby's Consolidated Company, the balance being also a loan guaranteed by the same company. The object of these loans was to provide for extensive mine-development, all necessary capital outlay, and the general expenses of maintenance for the period of the last two years, while the mill has been closed. I should point out to you that this amount includes £11,922, the price of stores now on hand, which will enable the mill to restart crushing without any delay, whenever the requisite labour-supply is assured. The repayment of the latter sum, and a further large proportion of the total liabilities - roughly speaking, some £40,000 in all - will be provided for by the usual charges made for stock and stores, mine-development, and redemption in the working costs, when the mine recommences working to a profit; so that more than half the present liabilities should be disposed of without in any way affecting the amount of the legitimate profits to be received. As the result of our outlay on the mine, we now have ample reserves of ore ready for the mill, without taking into account quantities of ore brought into sight that can be very shortly added to the reserves on the resumption of crushing. In the meantime, Willoughby's Consolidated Company, our largest shareholder, being thoroughly satisfied as to the sterling merits of the Bonsor Mine, will continue its loan as long as is required, and will eventually be paid back the whole in cash, or partly in debentures, on terms to be arranged later on. With regard to the amount of £77,283 under investments, acting within their legal rights, and in accordance with the policy approved of and adopted at the last shareholders' meeting, your directors have decided to continue to take the North Bonsor shares held by this company at par - at least, until such time as the mine is able to again work to a profit. We estimate these shares to be fully worth par, and consider that the present quoted price is solely due to the past inactivity in the South African market, and not to any deterioration in the intrinsic value of the North Bonsor property. To avoid the possibility of any shareholder being misled in any way, the auditors have attached a note to the balance-sheet, which clearly explains the exact position. With regard to the amount of £13,337 under expenditure for the past year, while the mill has been closed, this includes all expenditure that cannot justly be charged to mining development nor to capital outlay. We propose writing this off over a period of from four to five years as soon as crushing recommences. You will observe that the interest on loans and provision for depreciation make up nearly half of the total amount to be written off.
I think that is all I need say about the accounts; but if any shareholder wishes to ask any question, I shall be very pleased to answer such to the best of my ability. With regard to the prospects of the mine to-day, though they are excellent, the position has been, and still is, most tantalizing. The mine ought to have recommenced crushing continuously more than twelve months ago, with a steady output, roughly speaking, of some £130,000 per annum, according to the present average value of the ore reserves. Instead of this, however, it has had to bear all the heavy cost of development for a period of seventeen months up to November last, and that of maintenance and general expenditure for two years without getting any return from the mill to meet such expenditure. The gold is there safe enough, to all intents and purposes as if it were actually lodged in a bank on long deposit, and consequently for the moment unavailable for use. This aggravating condition of affairs, as you know, is solely due to the past want of sufficient labour. It may be suggested that, if other mines in Rhodesia are able to crush, why cannot the Bonsor do likewise? The answer to that is, in the first place, the Bonsor with its 50 stamps, the largest number as yet erected on any one mine in the country, requires a proportionately greater amount of ore to supply its battery, and that supply can only be maintained by keeping some 500 labourers continually at work underground; secondly, owing to the great length of the ore shute, and its comparatively narrow width - some 30 inches - the expenses of development are higher than they would be on a shute of twice the width and half the same length, consequently, with 10-dwt. ore, the present average value of the ore reserves, satisfactory profits under conditions now prevailing can only be expected if the full capacity of the 50 stamps be constantly utilized. However, 'it is a long lane that has no turning,' and there are good prospects now that our patience will not be taxed very much longer; for it is probable that a sufficient labour-supply will be assured in the course of the next month or two. The British South Africa Company have undertaken a scheme for the importation of Arab labour, and, by latest advices, the first lot of 1,000 will leave Aden in a few weeks' time, to be followed by others as fast as they can be collected. We are now in treaty to obtain the required number of labourers for the Bonsor out of the first lots to arrive. In the meantime, as we have been so often disappointed in all our previous efforts, I do not like to say too much just now; but I do believe a practical solution of the labour problem is really now in sight. Anyhow, I feel you will agree that this news is very important and most encouraging; for if we can obtain our full complement of labour within the next two months, the Bonsor Mine should be crushing once more within about three months from now. As to the development of the mine, the total footage cut for the year under review up to last November, when further development was considered unnecessary, amounted to 2,670 feet, bringing the grand total footage cut up to 12,513 feet. There are now between 65,000 and 70,000 tons of 10-dwt. ore developed, besides a large amount of ore of much higher grade brought into sight at the third, fourth, and fifth levels. The main shaft is down to 530 feet below the surface, and at this depth the reef is shown to have widened to 6 feet 4 inches, a section of which, 2 feet wide, carries 25 dwt. of gold to the ton. This strike at the fifth level is noteworthy, as evidence that the width and value of the reef are improving in depth, especially so as the main shaft is located in a section of the mine known to be poor. It should also be noted that, with the main shaft sunk to the fifth level, we are now in a position to attack the reef at many points, and so to rapidly increase the ore reserves as soon as the mill resumes work, and, with many more faces to operate on than formerly, development should be effected at a cheaper rate than hitherto. Concerning the cross-cut west at the third level, referred to in the consulting engineer's report, you will observe that it has now reached to within 40 feet of the point where it is expected that a secondary reef should be struck. That such a reef exists seems a practical certainty, in view of the strong line of parallel old workings on the surface. We attach the greatest importance to this particular work; for, if a second payable reef is proved, it should become a great factor in increasing the earning capacity, and, consequently, the present known value of the mine. This cross-cut will be continued as soon as work is resumed, and it should then only take a few weeks to satisfy our expectations on this point. As previously stated, all work has been stopped at the mine since last November, and the expenses kept down to within the lowest possible limits, pending the restarting of the mill. The cyanide plant is now nearly erected. This has been provided for under contract by Willoughby's Consolidated Company, as shown in the balance-sheet, and therefore at no cost to this company. The plant has a capacity for treating some 6,000 tons per month, and, according to the average assay value of tailings, is expected to return a profit of from 7s. to 8s. per ton - a very nice addition to that to be obtained from the mill.