Report of the Directors to be submitted to the Shareholders at the Extraordinary General Meeting, to be held at the Company's Office <9, Fenchurch Avenue, London, E.C. on Monday, 11th April, 1893, at 2 p.m.
In May last year, when it was resolved to increase the capital of the Company from £175,000 to £200,006, it was expected that the railway to the mines would be open for traffic and that the dressing works in course of construction would be completed by the month of July or August, and had this been the case, the additional capital then created would, in the opinion of the Directors, been ample for all purposes. But it in the recollection of Shareholders, that when the Directors afterwards met them in November, they had again to regret the non-completion of either the railway or the concentrating mill, both of which, however, have since been finished.
The railway, as is well-known, has proved an exceptionally heavy and costly undertaking in many ways; whilst the delay in the erection of the mill and machinery has lost the Company many months of most valuable time, and now the Directors regret that they have again to come before the Shareholders for more capital.
When the Company was formed, the Direetors deferred very much to the judgment of the late Mr. Farrell, the vendor, how best to work: the mines and bring the ores to niarket: as speedily and cheaply as possible, not only because he was a thoroughly practical miner with a large and varied experience of mining operations in many parts of the world, but Iso because of his very large interest in the concern. In fact, he stipulated in his Contract of Sale, which was set forth in the prospectus, that he should have the management (under the Directors, of course) of the mines and the Jaying of the necessary works, and the Directors had every reason to believe that in conceding this to him they were acting in the best interests of the Company, as Mr. Farrell's sole interest lay in the speedy realisation of the great mineral wealth of the Company. several properties he had transferred to the Tt now appears that, though as a mium man he was an exceptionally good judge mineral properties, he wanted experience, or perhaps to be more strictly accurate, largeness. of views as regards the right and proper manner of developing such a property, and the result was that a great part of the railway work had to be done over again, as it was quite inadequate for the character of the country traversed, This involved not only a great waste of time, but also a heavy loss to the Company, and when Mr. Seymour, our present able and energetic Manager, took possession of the works and railway, he was advised by the engineers on the spot that both the railway and the mill would be completed by August last, and that the amount required for doing 80 would not exceed £25,000, which was accordingly raise. The difficulties to be over: come, however, proved much greater than had been anticipated, and it was only in the beginning of February that he had the satisfaction of announcing to tre Directors that he had at last got the railway and concentrating works completed.
All this has entailed an expenditure on the property which amounts in round figures to about £100,000, of which the Company has had to borrow about £30,000 over and above the £25,000 raised last year, and it is absolutely necessary to expend other £10,000 in order io render the Company the profitable undertaking which the Directors believe it will now prove.
It will be recollected that the Directors, acting under the advice of eminent mining engineers, decided to erect a concentrating lant, as though it was known that a consider-lo part of the value of the ore would go into the tailings, it was considered the best and ost economical way of treating our ore, and the intention was to erect smelting furnaces later on for the treatment of the tailings and such ore as was not suitable for concentration, It has, however, now been proved that by concentration forty per cent. of the ores lost, and the Directors now recommend the immediate erection of smelting furnaces, for which purpose the money they now propose to raise Willi is believed be amply efficient, Apart from the treatment of their own ores, the possession of such smelting works as it is proposed to erect will add materially to the income- of the Company, because favourably situated as the Company's property is, and ing as it does the principal railway ina mining centre, the works will practically ct which is rapidly, becoming a great command the smelting work of the district. Already the Company has been offered quantities to treat at $10 per ton, sullicient to-keep their proposed works fully employed when not required for the Company's own ores, so that as mere smelting works they would prove a highly remunerative annexe to the Company's operations. Such smelting, furnaces as are wanted can easily be procure in San Francisco, and could therefore be erected in a very short time.
The Company, as stated in the Prospectus, was originally formed to acquire four Mines only, viz, the San Imuris, the Sheba, the Ophir, and the San Jose, but since then the Company has acquired a mineral zone, which is practically a large territory, and several new mines have been opened, all of which promise well, especially the Santa Rozalia, the Bereunda, and the Erin, The quantity of ore in sight in the San Imuris alone is estimated at 60,000 tons good milling ore, assaying from $25 to $30 per ton, which would Teave the Company, on the very lowest computation, $10 per ton clear profit, or estimating that we treat 100-
Text read from the printed page and cleaned; old type leaves the occasional error.