Open Collections

BC Historical Books

BC Historical Books

BC Historical Books

The gold mines of the world; containing concise and pratical advice for investors gathered from a personal… Curle, James Herbert, 1870- 1899

Item Metadata

Download

Media
bcbooks-1.0343206.pdf
Metadata
JSON: bcbooks-1.0343206.json
JSON-LD: bcbooks-1.0343206-ld.json
RDF/XML (Pretty): bcbooks-1.0343206-rdf.xml
RDF/JSON: bcbooks-1.0343206-rdf.json
Turtle: bcbooks-1.0343206-turtle.txt
N-Triples: bcbooks-1.0343206-rdf-ntriples.txt
Original Record: bcbooks-1.0343206-source.json
Full Text
bcbooks-1.0343206-fulltext.txt
Citation
bcbooks-1.0343206.ris

Full Text

Array   5?\\
THE LIBRARY
THE UNIVERSITY OF
BRITISH COLUMBIA
TheF.W.Howay
andR.L.Reid
Collection of Canadiana
"\   LAKE   VIEW   (MILL;.
LAKE   VIEW   SOim
CENTRAL   BOULDER. I
GOLDEN   LINK.
BOULDER  MAIN   REEF.
LAKE   VIEW. ASSOCIATED   (TETLEY'S   SHAFT).
KALQOOI BOULDER   PERSEVERANCE. GOLD MINES OF THE WORLD
CONTAINING
CONCISE AND PRACTICAL ADVICE FOR INVESTORS
GATHERED   FROM
A   PERSONAL    INSPECTION   OF   THE    MINES
TRANSVAAL,    INDIA,     WEST   AUSTRALIA,
QUEENSLAND,     NEW   ZEALAND,
BRITISH   COLUMBIA    and   RHODESIA
By  J.   H.   CURLE
ILLUSTRATED    WITH   PLANS   AND   PHOTOGRAPHS
PRICE     16/-      NET
LONDON :
WATERLOW   AND   SONS   LIMITED,   LONDON  WALL,   E.C.
J  CONTENTS.
ter       I. Introductory   ...... i
IL The Dangers of Speculation.        .        . 10
III. The Gold Mines of the Transvaal      . 23
IV. The Gold Mines of India      .        .        .117
V. The Gold Mines, of West Australia     . 142
VI. The Gold Mines of Queensland   .        . 203
VII. The Gold Mines of New Zealand        . 235
VOL The Gold Mines of British Columbia   . 263
IX. The Gold Mines of Rhodesia       .        . 284
X. A Summary of Gold Mining Investments 303 L CHAPTER    I.
introductory.
In naming this book " The Gold Mines of the World,"  I  -
must  proclaim   myself   guilty  of   sacrificing   strict   accuracy   of
expression to the desire for an effective title.
In so far that I have not inspected mines in the United
States, Mexico, Russia, and other prominent gold - producing
countries, this book cannot be said to embrace the "gold mines
of the world " : at a future date F intend to visit these other mines,
but whether I shall venture to embody the results in a second
volume, or not, will depend on circumstances.
In the meantime, I have inspected, I think very thoroughly, J
the gold mines of the seven countries in which I imagine English |
capital is most heavily invested, that is to say :—The Transvaal,
India,    West    Australia,    Queensland,    New    Zealand,    British
Columbia, and Rhodesia.
Of the 228 gold mines that I have inspected underground, J
almost all are situated in the above-named seven countries, and |
are thus apportioned :—
In the Transvaal
I have
inspected
88 mir
In India
13     .
In West Australi
^ >»-■?.
43     j
In Queensland
36     ,
In New Zealand
25     >
In British Colum
sia,,
10
In Rhodesia
IO 2 .  introductory.
In addition to this I have been in many private gold mines,
not here enumerated, and have gained useful collateral experience
from a number of copper, silver, lead, coal, and diamond mines,
which I have visited in my travels.
Of course there are far more than 228 gold mines described,
or alluded to, in this book : in many cases I have had reports,
plans, and other valuable information put at my disposal, and in
such a manner that it was a matter of little difficulty to gain an
accurate idea of the mine in question even without visiting it.
Although often unfurnished with introductions, I almost
invariably received the greatest courtesy at the hands of the
managers of mines. Many of these put themselves to great
trouble to furnish mè with the information I required.
The only important mine that I was refused permission to
inspect was the Boulder Perseverance in West Australia, and I
do not suppose that there were more than six mines in all which
were absolutely closed to me.
Much of the information contained in this book has appeared,
at one time or another, during the past three years, under a
somewhat different guise, in the pages of the " Economist," and
I have to thank the Editor of that paper for allowing me a free
hand in drawing on his back numbers.
I am afraid it is hopeless to expect that the Governments
and Chambers of Mines of all countries would agree to fix upon a
series of standard measurements to apply to gold mines. In
South Africa a ton is 2,000 lbs. : in India it is 2,240. An ounce
of gold is worth about 75s. in Africa, if from the mill, but only
60s., if from cyanide treatment : in West Australia, at Kalgoorlie,
most of the gold is worth 80s. : at Coolgardie it is worth 72 s. : in
Queensland it is frequently worth only 30s. : and in New Zealand,
owing to the presence of a large amount of silver, is often worth
no more than 20s. : in British Columbia most of the returns are
from smelting, and the gold is worth 84s.
Then as regards working expenses. In one mine every
cash outlay for the month will be charged (the only honest way, introductory.  . 3
I consider) to working expenses, while in another, perhaps an
adjoining property, the cabled monthly profit will have omitted
from it capital expenditure, development of ore, and, probably,
all managerial and head office expenses.
In the publishing of assays there are endless irregularities. For assays.
If the assay is high, but the reef very narrow, thereby reducing
the mining value materially, the width is often carefully omitted :
if a series of assays, the rich ones are picked out, as if at random,
for publication : some give results in fine gold, some in bullion.
All these points should be altered.
In an industry such as gold mining, where sophistry already System is
holds such sway, where the silvery-tongued chairman invariably
draws his hearers' attention to the good features only, and where a
subsidised section of the press is at work, night and day, in its
patrons' interests, it is of the highest importance that, wherever
possible, statements to shareholders or to the public should be
reduced to system, and be subject to legal penalties.
To this end I would suggest. that the mining ton should Suggested
invariably be reckoned at 2,000 lbs.: that all returns per ton
should be made in sterling, not in troy weight : that the ounce,
wherever referred to, should be reckoned as fine gold, viz., 84s.,
and that all assays, and yields of battery, smelted, cyanide, or
slimes, gold, should be announced on this basis : that all working
expenses be reckoned so as to include every cash outlay during
the month, and that the profit announced, whether it be monthly
or quarterly, be the profit, with depreciation deducted, which is
actually available for dividend : that in publishing assays the
width of the reef should invariably accompany the value, and
the value itself should, preferably, be stated in sterling.
Only gold mining  companies  have  been dealt with in this
book.
The columns of the financial papers swarm   nowadays with Exploration
the doings of the hundreds of exploration and finance companies companies n
that have been formed to operate in one or more of the mining dealt wlth'
countries, and the shares of which are usually quoted with those
of the mines of that particular country. INTRODUCTORY.
Of these exploration companies, a few are engaged in ■
developing or working their own mines, and some of these, such
as the British America Corporation, the Consolidated Gold Fields
of New Zealand, and the Gold Fields of Mysore, are dealt with.
But the immense majority of these companies " toil not, neither do
they spin." The chief object of their controllers is to float new
mines, or to reconstruct, or to amalgamate old ones, and, collectively, they are responsible for the printing and the off-loading
of an immense amount of worthless scrip among the public. A
great deal of the utter rottenness that has crept into gold mining,
is due to the unscrupulous methods of men, "masters of finance"
their subsidised papers call them, who have founded these finance
companies, and who, even to-day, on the slightest encouragement
from a systematically gulled public, are standing ready to continue,
at a moment's notice, their nefarious schemes.
There are, of course, exploration and finance companies, such
as the Rand Mines Limited, the Consolidated Gold Fields of
South Africa, or the New Zealand Mines Trust, which have had
wonderfully successful careers : but these companies are but few,
compared with the number of those of a different class.
The harm As I do not intend to criticise these companies, there is no
companies!*6 necessity to mention the names of, say, a hundred of the bad ones,
but I should like readers of this to realise that in buying the shares
of such they are usually playing into the hands of enemies.
It is the controller of the exploration and finance company
who is continually filling the press, or his listeners' ears, with
gigantic, hazy, and unthought-out schemes for making millions ;
these men talk of amalgamations, sub-flotations, five hundred
stamp batteries ; but they could not describe a little mine with
ore in sight to yield, say, £ 10,000 profit for ten years ahead:
firstly, because they do not understand details, and, secondly,
because their companies rarely contain an asset of such practical
value.
Finance companies frequently earn the gratitude of shareholders by making large distributions of scrip which is intrinsically
worthless. V
wmmmm  A great deal of dishonesty exists, and, I suppose, always has Dishonesty g
existed, in gold mining.    Nowadays there are many mines which g°'
are really worked on their merits, but it is in financial matters, and
share dealing, that the irregularities usually occur.
The public is heavily handicapped in its efforts to acquire How the
correct mining information. The principal channel through which deceived
information reaches it is the financial press, and I have no
hesitation in stating that the majority of financial papers frequently
publish incorrect mining matter. These papers are subsidised by
one or more of the big mining houses or groups, either by direct
payment, or by periodical options on shares, or, most usually, by
frequent and highly paid advertisements.
Whether it is wrong for a newspaper to puff the mine, or the
man, whose advertisement it secures, I do not undertake to decide,
but there is no doubt that the system is responsible for the
circulation of an immense amount of incorrect information, and
frequently causes the ruin of confiding persons who are guileless
enough to believe these statements.
There is no necessity, I think, to unduly dwell on this unpleasant side of gold mining. So long as human nature stands
at its present level, and the acquisition of gold remains the
criterion of worldly success, so long will the mining industry
continue to be the hunting-ground of unscrupulous men who
will continue to use every known weapon for the furtherance of
their unrighteous ends.
Let us glance, in a brief survey of the gold mining industry a summary o
of to-day, at the more favourable side of the question. to-da™"""2
In the Transvaal, now easily in the forefront of gold mining, Transvaal.
there are about 120 mines that are either earning, or will before
long earn, steady dividends : to these may be added a number of
yet unfloated deep levels.
In Rhodesia, development has not yet progressed to a great Rhodesia
extent, but although the country is still an unimportant producer,
prospects are distinctly encouraging for the near future.
In Australia, that wonderful and vast continent, which has Australia
yielded   four   hundred   million   pounds,   sterling,   of gold :   from INTRODUCTORY.
Kalgoorlie to Charters Towers : from the Murchison to Bendigo
and Ballarat : from Port Darwin to Croydon, and Gympie, and
Lucknow, the whole continent is being explored for the precious
yellow metal. All over this immense country, near the populous
city, in the bush, in the heart of the Never-Never country, there
are payable mines, and the energetic mining population of the
great continent reaps yearly a rich reward.
In Tasmania, several good gold mines are at work.
In New Zealand there are great stretches of gold bearing
reefs—only partially exploited as yet, and a few good mines.
The colony has already yielded gold worth over fifty millions.
In India there is one fine field, and several of the world's
greatest mines are found here.
The great gold industry of the States is exploited by its own
people, who are past masters in mining matters ; but in Canada
and British Columbia there are many justifiable ventures for the
honest employment of English capital.
In Mexico : in South America : in Russia : much gold is
being won. By these latter we benefit little. It is in South
Africa, India, Canada, and Australasia—our own strongholds—
that the greatest gold fields lie to-day, and it is in those countries
that the successive scenes of this volume are laid.
I have, in writing this book, mentioned no persons by name.
There are several reasons for this. Mining literature is usually
so lavish of indiscriminate praise, that laudation of individuals is
now written, and accepted, as a purely perfunctory practice,
and carries no real meaning. In addition, this excessive advertisement is, to my mind, very vulgar, and can often be hardly
acceptable—even to the recipient.
Again,   in   these   pages,   occasionally,   persons   are   alluded
to in an uncomplimentary way : these individuals will, doubtless,
excuse the omission of their names.
! But   though   I   have   cast   a   mantle  of   anonymity   over
individuals, I wish, to specially mention the services rendered to
the holder of gold shares by one class of men. The average
mine manager, whether in South Africa, or India, or Australia, or INTRODUCTORY.
wherever I have met him, is an extremely capable man. Of
course, there are exceptions. Some managers are not capable :
some are not even honest—but, as a rule, those in actual charge
of our gold mines to-day are men who can be relied on.
The special knowledge required by these men has to be
almost encyclopaedic in its range, while a strong grasp of the
springs of human nature, the knack of choosing good lieutenants,
the exercise of great tact, and the ability to govern, are all
necessary requirements.
To my mind,  the most valuable essential of all in a mine
manager, and that an attribute which is often s
test, is honesty. I am pleased to think that
and acquaintances many mine managers all (
are honest men, and who have, over and over
detriment, refused to do what they considère
and gentlemen.
i severe
friends
■Id, who
Leir own
of their
the
capable
after his
captain
.spection
position as managers
But I do not wish to confine my praise to
only. The mine captain, whose valuable qualiti
more to the manager than to outsiders, is usually £
man, and devoted to his work.    Many and many a
cheerfully started off with me on a three or four he
of his workings, only too delighted to oblige, and
that his visitor should show an intelligent interest in
To these men, and to the other heads of department
managers, cyanide works managers, assayers, sample
office staff, shareholders in every mine owe a debt
do not realise, and which is often in
Amongst these men—I could give hundi
the greatest sense of duty to their employers, and from one year's
end to another, by day and night, in the bush, on mountain tops,
in fever swamps, in wild and deep places all over the world, they
faithfully carry through their arduous work, and materially help
to swell the golden stream that is ever pouring into London city.
This book, from its very nature, has had to be hurriedly
written, and evidences of a certain  uncouthness of style appear
ïqu;
isking ]
t which the-
cknowledged
pies—there i 8 INTRODUCTORY.
on many pages. But mining matters are continually subject to
changes and permutations, and were I to delay its publication,
in the higher interests of literature, for even a month, no doubt
the prospects, or the financial details, of a dozen mines would, in
the interval, have altered materially. I believe that most of
what I have written, many of the facts, will be worthy of
acceptance for two or three years to come, but after that much of
the presently contained information will be completely out of date.
Outlines of I  have been told that the general tone of my criticism of
criticisms of unproved, or doubtful mining ventures, is such that, were it acted
upon, only dividend-paying mines would continue to work, and
that exploration and prospecting, by means of which new mines
are brought to light, would finally cease. My answer to this is
that I would cheerfully see the public put up millions for the
exploration of gold mines, or mineral districts, in almost any
part of the world, provided I thought that the money would be
honestly spent, and that the individuals who risked this money
would not be deceived as to the results from its employment.
But, as it is, most of the money now furnished by the public
for general exploratory work, or for mining enterprises which are
not actually specified, is spent in an illegitimate and dishonest
manner. The largest part goes regularly to vendors of worthless
claims and properties, usually to the promoters themselves, while
the balance is spent on dummy directors, and on all the up-to-date
organisation of a mining corporation, with its fifty channels for
extravagant and useless expenditure.
Were this not the case : were there the slightest chance that
companies could be formed to explore and prospect for gold mines,
the funds of which would all be honestly applied to the purpose in
question, and in which the market rigging of the shares would not
be preliminary to starting work, I would willingly advocate the
formation of such companies by the hundred.
How t0 But why should not an attempt be made in this direction ?
improve the 1111 1
industry:        It would be worth a great deal to the  gold-mining  industry to
London eliminate the London middleman, who,  I venture to say, is the
mi  leman.    curse 0f gQij mining- to-day.    These  men do not provide  the INTRODUCTORY.   ' g
capital to work the mines—they merely transfer the capital from
the public, and in so doing keep the greater part for themselves.
Get rid of the middleman. Let small syndicates of speculators, who wish to go into mining for themselves, be formed, with
the express object of getting into direct touch with the prospectors
and their claims. These syndicates need not be located in
London. Why should not the public in Glasgow, or Manchester,
or Leeds, deal direct for a block of claims in Queensland or
British Columbia? These syndicates must have no vendor's
interest, no watered capital. They must be fair and square from
their inception to the day when the property acquired is either
abandoned or floated into a reasonably capitalised mining company, furnished by the members of the syndicate, with a
substantial working capital. This, I think, is well worth
consideration.
To  one who  is  continually  visiting  mines,   and,  who,  like exï
myself,  takes the greatest interest in their study,  from  both  a ^
mining and financial point of view, experience creates a sort of mia
intuition, so that it is often possible to arrive at a correct solution
of the particular problem even upon slender data, or after only a
hurried inspection of the mine.
This statement may appear to embody the essence of
enipiricism, and might be subjected to severe criticism : I do not
mean to say that my criticisms of mines, in this book, are so based,
but I do state, unhesitatingly, that an intuition acquired by
constant experience can be gained in mining matters, as in anything else, and that it can be most effectively used as one of the
factors in the formation of a sound mining judgment—which, of
course, is the acquirement, of all others, that a mining man
must strive to obtain. THE  DANGERS  OF  SPECULATION.
CHAPTER   II.
THE DANGERS  OF  SPECULA'
The selection There are now so many good gold mines, and gold mining
of shares.
speculations, in different parts of the world, that those who buy
mining shares are in a position to show far more discrimination
than they could formerly. That is to say, they are in a position
to do so, provided that they observe certain well-known
precautions, which those who are in the inner circle of mining
affairs have learned to do, and which I will endeavour to
enumerate.
Thegambiing To  begin  with,  it  may  be said that   three-quarters   of  all
transactions in mining shares come under the head of gambling,
pure and simple. The average gambler in mines cares nothing
for the intrinsic value of a property ; he does not study its past
history, he does not intend to hold the shares for dividends—in
fact, he wants to know nothing about the mine. All he asks for is
a large profit on his speculation in a minimum period, and, credulous and greedy as he  is, jumps eagerly at the first source of
is taken full    information  that comes to his hand.     The  company promoter,
advantage of .... i i
by the and his myrmidons, who, in their  turn,  control a large section
promo r.       ^ ^e finariCial press, have, in these days, effected an organisation
for the fleecing of these thousands of greedy, credulous gamblers,
which is not only complete, but marvellously successful.
a prospectus The promoter forms a company : he issues a prospectus in
flowery language, and to it attaches the report of a dishonest
expert, or the report of an honest one with the unfavourable points
left out : he prints off, for himself or his syndicate, 100,000 or
200,000 shares : he advertises the company by circular, or in the
press by paragraphs which are paid for at ten times the rate of THE DANGERS  OF  SPECULATION. II
ordinary advertisements.     If the mining market is strong, or if Press    I
H ""**ï . . paragraphs.
his company has been cleverly advertised, the shares which are to
provide the vendor's proportion of cash, and the small working capital, are all applied for : if the market is indifferent
they are only partly applied for—in any case the company
proceeds to allotment. Here we pause for a moment, to inspect
the share register of the newly formed company. We note that Allotment,
the names of the hundred or two hundred proud possessors of the
allotted shares are those of respectable proprietors or shopkeepers in the provinces : of gullible women : of retired officers : of
even a curate or two.: and of, at least, 25 orphans. But we note
with a feeling of due respect that the name of not a single man
who is reputed to be " in the know " of the mining world, is
included.
But  the   principal   facts   that   have   kept   mining-  men   of Howtodet»
r .r I . a worthless
experience from taking shares in a company of this nature, are flotation.
facts that are at the disposal of all. To begin with, assuming
that neither the flowery language of the promoters, nor the
hollowness of the report, nor the evil reputation of the expert who
penned it, can be expected to show themselves to the scrutiny of
the most ignorant class of speculator, the smallness of the
working capital asked for must betray the nature of the undertaking. Everybody knows that a mine cannot be started for
,£15,000—the sum we will assume as being provided—nor, indeed,
very often for £"150,000. Then, again, the list of directors who working
are to have control of what is assumed to be an important mining caPltal-
company, a concern which needs the application to it of great
financial training and acuteness, to say nothing of experience,
presents rather a ludicrous appearance. There is a lord, a Directors,
general, an M.P., a knight, and two untitled men ( or some
permutation of the above), but not the name of a single well-
known business man, nor that of a director connected with any
successful mine. All of these directors may be honest and
willing men, but it is only too evident that they utterly lack the
necessary qualifications for their office : that they are merely the
dummies or decoy ducks of the promoter (who, we assume, in 12 THE DANGERS  OF  SPECULATION.
this particular instance, to be dishonest) and that, for their
directors' fees, they cheerfully undertake the responsibility of
successfully bringing to a profitable stage a mine which is
hopelessly short of working capital. Now, already, we have
noted points which, if carefully studied and acted on, would
result in the collapse before flotation, of half the so-called gold
mines that are now in existence.
But we must return to the promoter.
The company has gone to allotment. This fact, together
with an appreciative paragraph concerning the company, paid for
as before indicated, appears in next day's papers all over the
country. Simultaneously an announcement is made that a Stock
Exchange quotation for the shares has been applied for, and, as if
to show the immediate recognition which the shares have gained
in the financial world, a tape quotation appears showing them to
be standing at one-eighth premium. As every share in the
company, except those which have cost the applicants £i, is
pooled, and lying securely in the safe of the promoter, and as the
promoter knows that the people who applied for shares at £i did
so with the object of making at least 100 per cent, profit, it is a
matter of the greatest ease for him to regulate the quotation up to
any figure, so long as it does not bring these people as sellers into
the market. Although there is little likelihood that any of the
shareholders will sell their newly acquired shares at a profit of a
few shillings, and so spoil his market quotation, the promoter
makes doubly certain by the introduction, in certain papers, of
carefully worded little paragraphs congratulating the shareholders
on the fine prospects in store for them, and advising a still further
purchase of the shares at a premium.
Simultaneously the shares are quoted on the tape at 25s.
These announcements, together with the rapid, though not too
rapid, rise of the shares on the market, bring in quite a number of
new purchasers, who are now supplied from the promoter's safe,
while the original, and now flattered, shareholders are more than
ever resolved not to sell under £2. A week later, the shares
reach 30s.    Those who have bought their shares at less than this THE DANGERS  OF SPECULATION. 13
casually mention  their   success to their  friends,   and the   latter
eagerly wire  to  their   London   brokers   for 100,  500,   or  1,000
shares.    The pile of scrip in the promoter's safe is now consider- off-loads
ably lightened, and, to say nothing of the cash which he probably scnp'
received on flotation, he and his partners in the concern have all
netted a large profit.    The history of the mine, from this period
onwards,  need not be  described.     The  promoter  clique  never
expects to get rid of the whole of its shares, but it occasionally
manages to do so.    An ignorant or a dishonest manager is put in
charge of the property.    If he searches carefully, he can nearly
always discover some small bits of stone containing visible gold. False assays
Some of these are assayed, and the results, which, of course, are arePubhshed-
high, telegraphed to London : the remainder are shipped home to
be exhibited to admiring shareholders.    If interest can only be
sustained in the doings of the company, and the general mining
market continues good, few shares will come on the market.    The a mm is
directors announce that, acting on the manager's advice, a large ordered'
battery has been ordered, and is in course of erection : this has a
distinctly good effect on the shares.    But in order to pay for all
this machinery, the development of the mine is stopped.    When
milling commences the first week or two is sufficient to crush all
the picked ore that has been set aside.    It is found that the rest is but there is
quite unpayable,  and as the company has no more cash to fall "°epayable
back on, the mine has to be shut down.    This does not affect
the promoter clique, but it is an unpleasant occurrence for the
manager, and the directors, whose salary and fees depend on the
existence of the company.     The manager recommends that the
" highly promising " prospects of the mine be done justice to, in
the shape of further development, and the directors enclose his ReConstruc-
report  in an   eloquent  appeal   of their  own   for   reconstruction. tl0n'
This   may   be   carried :   some   mines   have   been   reconstructed
oftener than once, but we are not at present concerned with what
the   shareholders  may   decide  to   do.    They   have  lost  once—
heavily : the shares are unsaleable.    And, yet, the whole fiasco
might easily have been prevented by the use of a little common
sense. m
THE DANGERS- OF  SPECULATION.
We have already noted that people who are successful in
mining, and there are not a few, do not go into mines of which the
prospectus is uncertain, the directors dummies, and the working
capital absurdly insufficient. Neither do they believe in newspaper paragraphs : they know that shares can be, and are
frequently, pooled, and that, therefore, being subject to the
manipulation of one man only, they can be raised just as quickly
or as slowly as the operator wishes. To them tape quotations for
shares of this description carry no meaning : lastly, and perhaps
most important of all, should they, for reasons of their own, buy or
subscribe for shares of this sort, they take immediate advantage of
any rise in the price to quickly and expeditiously clear them all
out, while the less experienced, having sown their seed, await with
eagerness the fruition, which they have variously estimated at,
some thirty, some sixty, and some an hundredfold. These mines,
then, are gambles : their share certificates are equivalent to lottery
tickets : through their agency a colony of company promoters and
their cliques, resident in London, prey upon the savings of the
nation, and it is largely owing to their instrumentality and
machinations that the legitimate and splendid gold-mining industry
has come to stink in the nostrils of so many thousands of people.
I could with ease give the names of 500 gold mines floated
during the last few years in London alone, which come under the
foregoing classification.
Another important point for the great speculating public to
remember is, that no mine with proved or really promising prospects is ever offered on the market except at a high premium. It
is well known that the valuable deep level areas at the Rand,
which were known to carry payable gold before operations were
ever commenced on them, were never offered to the public as were
the outcrop mines. Their owners themselves were quite content to
furnish the enormous sums required for their development, and it
was only at a premium of from £2 to £10 per share that the
public was afterwards offered an interest. Whether a mine is in
Polynesia or Peru, so long as it can show payable ore, and g-ood
prospects,  it will never come  before the public in the ordinary THE  DANGERS  OF  SPECULATION. 15
manner. Take a case in West Australia. Not long ago, when
the market was depressed, and the public thoroughly disgusted
with that colony, a new mine, the Sons of Gwalia, was brought
out. It had a large capital, and a large sum was set aside for
working capital. But it was all subscribed privately, and the
shares only appeared on the market at £2 each. The reason for An e
this was the fact that a large quantity of payable ore was in sight,
and the prospects of the mine were very favourable. In any case
the public was not asked to participate, except at 100 per cent,
premium. Shortly afterwards, the Star of Gwalia was advertised.
This mine had no payable ore in sight. Indeed it is located at
some distance from the rich patch of the good mine, and may
never have any payable ore at all. In this case the vendors
allowed the public to participate at par, and were only too glad
to do so, although no doubt their action, after the high-handed
behaviour of the controllers of the neighbouring mine, appeared
to be particularly generous.
While pointing out the havoc wrought by the unscrupulous The J
promoter, it is only fair that the public should realise how blame
seriously it is to blame as well. In the race for riches : for profits moter
of 100 per cent. : or even for the excitement to be gained by
speculation, the public simply plays into the hands of the promoter.
In talking or writing of the South African, Westralian, or New
Zealand collapses, the sufferers are too much commiserated at the
expense of the gainers. In reality both deserve the censure
of common sense : the promoters, because of their efforts, in the
press and elsewhere, to deceive : the sufferers, because of their
undue gullibility, and because of their greed in so far that they
frequently refused to be satisfied with a good profit when there
were hundreds of greater fools than themselves, ready to take over
their shares with all risk attached to them. In any case, it can do
little good discussing the past : it is quite possible, however, to lay
down maxims for the conduct of mining and financial operations in
the present and future,, and if the writer, in the following paragraphs, is able to offer any advice which shall prove of assistance
to any doubting shareholder, he will feel amply rewarded.
1 How to
Firstly, then, advice to those who subscribe to gold-
mining
fatùre* C
flotation
companies that may be brought out hereafter :—
the pros
pectus,
Do not be guided  by the prospectus,  which  consist
string of eloquently worded inanities.    Do not believe the
report
of the expert which is usually attached to the prospectus, u
nless it
is that of a man well known, of admittedly honest character
, or, in
therepo
I      the case of a stranger, unless the said report will bear the
„ ..■   ,T ^r ,Trt,.«„rtir „« j  ^r "u   ~f .t~..« -f«,~.-.^ie. ~^ L,,.. u«
careful
scrutiny of yourselt and oi such ot your mends as may De
experi-
enced in mining.
The dire
ctors'           £)0 not judge the  capacity  of the directors for cone
lucting
such an important concern as a gold mine, by their titles
The
names looked   for   should   be those of well-known  busin
ess  or
commercial men in London or elsewhere : of directors in sue
cessful
mines :   of   mining  engineers,   or   the  partners   in  well -
known
mining houses :  and, most of all, the real magnates in the
mining
world, who will take care that their names shall not be m h
ted up,
in   a   directorial    capacity,   with   any   company   likely   to
be  a
failure.
The wor
<ing            Do  not for a moment consider  the  advisability   of
taking
shares   in  a  mine  which   is   not  provided  from   the  star
t  with
sufficient  working   capital.     The  smallest   amount   of   w
orking
capital asked for must be   -£30,000 in the case of a spec
ulative
f
venture, and £"50,000 when anything specific or definite is
under-
taken, such as sinking a deep level shaft, or driving a tu
mel to
locate the continuation of any reef.   This sum must be in ca
sh, not
in the shape of half cash, half reserve shares.    It must be
clearly
understood that no mine can be developed and  equippec
on a
sound scale for £"50,000.    This sum is to be devoted to d
>velop-
ment only.    If results are favourable a further large amou
nt still
remains to be provided by the shareholders.
SET
lor's            Do not favourably consider a scheme in which the v
propose to annex 60 or 80 per cent, of the shares.    As a ri
endors
le, the
unproved ground which is usually floated as a mine has on
y cost
the vendors the price of pegging out and surveying, or a
t most
£"1,000.    If the company in which you have applied for
shares   >rki
nt, make
Do not, in the early days of a mine s existence, believe what The press
... . T , " puffs."
newspapers or printed circulars say as to its success.    It takes
many months to prove a mine.
Do not, assuming that all the vendor shares are pooled, and The tape
that the market is  being worked   by one  man,  believe   in  the
genuineness of tape, or Stock Exchange quotations.
Finally,   and  most  important  of all :—Be  satisfied  with   a The profit
reasonable or even a small profit.    When you decide to sell do not
give your brokers a limit, slightly above that at which the shares
then stand, but sell immediately, and right out.
Thus  should  the  novice,   or   the   speculator   who   has   no Apply system
accurate sources of information, conduct his gold-mining opera- and^ïiVcats
tions,   at least when dealing with new and unproved mines.     If dlsaPPear-
everyone were to follow the rules laid down above, only about 20
per cent,   of the  mines  now  floated  would  have  proceeded  to
allotment.    Even then, of course, the speculator could not assure
himself against loss, but he would greatly minimise the risk, and
at the same time would have the satisfaction of dealing with the
business in a common sense, and perhaps profitable manner.
Secondly, with regard to mines that are already floated, but
in a doubtful condition, a few remarks may be profitably studied.
In this connection, I should like, from considerable ex- As to mines
perience of the subject, to suggest a number of points on which condition,
the directors of unproved or doubtful mines should instruct
managers. This is information which should be of considerable
practical value, not only to shareholders, but to directors of such
companies, and its application to the conduct of operations at the
mines, would, if it did not actually result in any of them being
proved payable, at least relieve such companies from the stigma
of mismanagement and extravagance.
To begin with, whether a mine is payable or worthless, a Selection of
manager has to be selected.    A good man, with a good record, ma'     '
especially a trained mining engineer, cannot be secured for the honesty hi
essential.
l8 THE  DANGERS  OF  SPECULATION. :
small salary which ignorant bodies of directors insist on offering to
their managers, and the natural consequence is that an unsuitable
man, frequently some novice who is a friend of one of the
directors, is secured.
A trained mining engineer is not absolutely necessary to the
ultimate success of a mine, but an experienced man most certainly
is. To begin with, the property has to be surveyed, shafts have
to be laid out, and their timbering -designed. Winding gears and
pumps must be ordered. A thorough knowledge of the mining
laws of the country, and of accounts, is imperative. Then comes
the most important point of all. The ore has to be sampled from
the commencement, and on the results of this delicate operation
the decision of the manager as to the whole future of the
undertaking must be based. Here the most level-headed experienced man, one. with the soundest judgment and strictest
integrity, is necessary to the success of the company. If the ore is
found to be quite unpayable, and the reef itself not of a permanent
nature, it would be his duty to inform the directors, without
reservation, and to recommend the closing down of the mine. If
the directors insisted on continuing work, a manager with a name
to keep good would resign. If, on the other hand, the ore proved
unpayable, but was lying in a favourable formation, and in the
neighbourhood of a payable mine, the manager's duty would be to
inform the directors that in all probability the mine would be a
failure, but at the same time, to recommend further mine development. If, in the third and last case, the ore when sampled were
found to be low grade, but probably sufficiently good to pay if
worked on a large scale, the manager has a distinctly difficult task
before him. He must lay the case fully before the directors, and
recommend the further development of the mine, at the same time
planning to expend all the- company's funds in mine development,
except on such machinery as may be absolutely necessary.
At once a cable, or letters, will arrive from the board, stating
their wish, on the promising appearance of the mine, to erect a
battery,  and asking him to  recommend   such  a  course.     Now
ie action* eomes the test of the manager's capacity and strength of character.
honesty and
strength of
character is m
THE  DANGERS  OF  SPECULATION. 19
If he is weak, and anxious to keep his place secure under all
circumstances, he will comply with the Board's wish, and be the
means of ruining a mine. If he is a strong and capable man he
will realise, first of all, that the mine is not sufficiently developed
for him even to be certain that it will pay : that the company's
funds are not sufficient for the full development of the mine—let
alone for the erection of a battery : and that, finally, the directors,
the dummies of the promoter, are guided in their desire, not by
the interest they feel in the mine, but very often, by the interest
which the controlling clique feels in the share market. The
manager must realise that the course proposed is, in his completer
knowledge of the subject, the worst course for shareholders,
therefore it is his duty to firmly refuse to recommend the
premature erection of a battery and other needless machinery, and
to resign if still commanded to do so.     But how many managers What a   S
0 J o manager 01 a
of poor or undeveloped mines can be found to take such a course ? pooï ?r do"bt-
~, r • • 1 1 t   1 • • ful mine, if a
1 hey are often inexperienced men : placed by. circumstances in a man of weak
position higher than  they have  been accustomed to : frequently generaiiy'ied
the friend or nominee  of the vendor himself—showing the utter t0 °'
fatuousness of the directors : quite incapable of either sampling a
mine correctly, or framing a policy on the result of such sampling :
most of all, incapable of carrying such a policy through.    Such
men hardly have opinions of their own : the directors' slightest
suggestion is law.    If they know that they are expected to cable
home good assays, they do so, whether the ore assayed is found
on their own property or elsewhere.    If it is gently intimated to
them that the ordering of a battery would have a cheering effect on
the shareholders, the battery is at once ordered.    Servility to the and the
interests of the promoter clique is their motto.     A man of this
class   clings to  the  mine and his salary to  the very last,  and,
consequently, often years pass after the flotation of a mine before
anyone  has  the   slightest   idea  of its   real   value.     At last the
directors are forced to action by the disappointed shareholders : a
well-known reliable   mining   engineer reports on the mine ;   it is
found to be worthless, and is liquidated, but after the spending of
many   thousands   of pounds  that  could  have  been   saved   and THE  DANGERS  OF  SPECULATION.
adopted if
to be payable.
returned to the shareholders; had the company only possessed
from the beginning an experienced, honest, and highly paid
manager.
Now here is a mode of procedure for the conduct of
operations, which should be studied by the shareholders, and more
especially by the directors, in already floated mines which are so
far unproved, or are in an unpayable or doubtful condition.
Firstly:—The manager appointed must, if possible, be a
trained mining engineer, but, if not that, at least a man of experience, accustomed to control, and entitled to ask, and to
receive, a minimum salary of .£800 a year ; a first-rate man would
expect -£2,000 a year, at least, but he would not take up the
management unless the mine was a really promising venture.
The manager appointed must in no way be connected with the
vendor, and his past record must be carefully scrutinised. It is a
great mistake to postpone the selection of a highly paid manager
until the mine is proved payable. An ignorant man or one who
allows the directors to dictate to him on technical questions, will
cost the company thousands of pounds, and will never be able to
gauge the exact value of the ore.
Secondly :—A manager having been appointed, the directors'
' policy towards him must be laid down. He must be told that all
the working capital of the company is to be spent in mine
development only. The manager at the commencement of
developing the mine, is to engage the best assayer and ore
sampler that can be found, and an assay office, built to the plans
of this official, is to be erected. The mine is to be sampled every
five feet, the results are to be reduced to a full stoping width, and
a duplicate of the assay plan is to be sent, from time to time, to
the London office.
If the ore opened out after a year's development, or up to the
time when the originally provided working capital of the company
is becoming exhausted, is of good quality, there is no doubt but
that the shareholders will authorise the directors to engage the
services of a well-known engineer to report on the mine.    Should THE DANGERS OF SPECULATION. 21
he confirm the manager's favourable opinion, and the tale told by
the assay plan, there is no doubt but that further working capital
could easily be raised. This, if results were still doubtful, would
probably be a small amount, and would only be devoted to further
opening out of ore. But if the results were really good, a large How to
sum of money should be raised : then tram lines and water races capital
could be constructed, and the erection of workshops, air compressors, a battery, and such like would be undertaken. By this
method, system would be introduced : a regular procedure in all
similar undertakings would be brought about : and the public
would feel that honesty and confidence were being restored to the
mining industry.
If the mine is a failure, and shareholders are in a position if their
to  find   this   out   from   the   assay  plan,   as   well   as   from   the
manager's reports, the company should be liquidated.    As I have
said there are many opposing  interests  against such a course.
The promoter will no longer be able to manipulate the market, or
to make fictitious quotations for the "pooled" shares, the directors
will lose their fees, and (in the case of dishonest directors) their
commissions :   the   manager   his   salary.      This   matter   largely ^JJ^J
rests with the manager.      If he is a dishonest man, and in col- *eirin
lusion with the promoter clique, he will recommend that the mine
is  good  enough  to   warrant   reconstruction—thus   retaining  his
salary, and a continuance of his patrons' manipulations : if he is
honest, he will recommend that the company be liquidated, and,
what is more, will insist that a copy of his report, on so vital a
subject, be placed verbatim in the hands of each shareholder.    I
think I have said elsewhere, and I now repeat the statement, that
the manager of a gold mine is of infinitely more importance to the
success of the company than all the directors put together.    H is and mu
honesty   and   integrity   of   purpose   towards   the   shareholders, receive
although he is nominally the servant of the directors, must be report
unquestioned, and the securing of a  strong  man,   one   who,   if verbat11
occasion    requires,   in   the   cause   of   right,   will   make   himself
heard beyond the walls of the board   room,  must   be  the  first
consideration for every mining company. 22 THE  DANGERS  OF  SPECULATION.
The manager Provided he carries out all the board's policy, and possesses
holders' its confidence,  the manager should be allowed entire control of
safeguard. all technical matters and of all expenditure. He should have full
power to order his own machinery, stores, and such like, and, I
think, might be trusted to effect a better bargain than many
present day directors, fat rich men, most of them, who themselves insist on purchasing the company's requirements, receiving
commissions all round.. •TRANSVAAL.
CHAPTER    II
THE   GOLD   MINES   OF   THE   TRANSVAAL.
In  1870, prospectors in the northern district of Zoutpansberg 1
were the first to discover gold in the Transvaal.    In the following
year, the discovery of the alluvial fields at  Pilgrim's  Rest,  and |
Mac-Mac,  in  the mountains of Lydenburg,   led  to   a  big   rush r
from all parts of the world, and from that period  onwards  the
South   African   Republic   was   included   among   gold-producing
countries.
About 1884, reef gold was discovered in a number of places
on Moodie's Mountain, and on the adjoining hills of the De Kaap
•range, and a new quartz mining field, with Barberton as its
centre, sprang into existence. From that time to the present
the Transvaal and its mines have always held the public attention. ,
From 1886 onwards a series of discoveries, principally of '
" banket," or reefs of water-laid pebble formation, was made :
Witwatersrand, Klerksdorp, Potchefstroom, and Heidelberg districts were all found to contain banket beds, and explorers later on
opened up the quartz reefs of the Murchison and Klein Letaba
districts, and the stratified veins of Lydenburg. Less important
finds were made, too, in the New Republic and Swazieland—
now parts of the Transvaal—and at Malmani and Otto's Hoop
on the Bechuanaland border.
But long ere this, all these outside districts have had to give '
way in importance to the gold field of Witwatersrand—a series of
banket beds nearly forty miles in length ; unlimited, apparently,
in depth ; and payable over the greater part of the entire area.
Witwatersrand, with the fine city of Johannesburg as its
centre, although only thirteen years old, has long ago taken
the position of the leading gold-mining centre in the world,
and from its own immediate neighbourhood now turns out
more gold than the United States or the whole of Australasia. 24 TRANSVAAL.
Total yield The yield of gold from the Rand, from the commencement
Rand!he        till  the  end  of  1898,   totals  £"64,278,199,   and   is  made  up as
follows :
1887         ^81,022
1888         726,821
1889         1,300,509
1890               ... 1,735.491
1891 •••         2,556,328
1892   4,297,610
1893   5,187,206
1894   6,963,100
1895   7,840,779
1896   7,864,341
1897                10,583,616
1898 •■■                15,141,376
Future yield. For   a   number   of   years   to   come   an   average  yield   of
•£22,000,000 may be confidently expected, and  it  is certain that
there is ore in sight to ensure a large output for thirty years more.
There is no need to enter  into  details  about  the  geology
of the Rand banket beds.    The fact remains that  the  gold  is
there, and when any two. geologists are prepared to agree as to
the source whence it came, it will be soon enough for laymen to
study the  question.    In  a  description of the deep level mines,
which   occurs  later  in  this   chapter,   I   have   summarised   in   a
popular  form, some of the elementary geological features about
the banket beds, but I  pretend to no originality on the subject,
and  am  myself inclined  to   prefer  dividend  tables  to   abstruse
geological speculations.
importance of Witwatersrand to-day,  is  probably a greater gold  field,  to
TOmp?redUrg   the extent of 85 per cent., than any other individual district in
mlnîngther      the world.    I would place Kalgoorlie, West Australia, as second,
centres. j-,ut at ^jg great distance behind the Rand, while other fields I
have  visited,   Coolgardie,   Bendigo,   Ballarat,   Charters   Towers,
Ohinemuri,   Kolar,   and   Rossland,   though   fine   fields,   are   of
still less individual importance.
156 mines on At  the  time  of writing  this,   there are on the  Rand   156
mining companies, while a number more, chiefly to work  deep
level areas, are in course of formation. from actual mil
;£440,oc
Of these   156   mines,   124  are  situated  on the Main  Reef
banket beds, and the great majority of the latter will eventually
be worked at a profit.
In 1898, 75 mines working on the Rand produced gold to
the value of £"15,141,376, and of these 40 paid dividends equal
to ^"4,834,158.
In 1898, the following dividends, e;
were paid by mines on the Rand :—
Robinson
Geldenhuis Estate      	
Crown Reef  288,000
Ferreira ... ... ... ... 270,000
Geldenhuis Deep       ... ... ... 225,000
Village Main Reef     ...        ...        ... 210,000
City and Suburban       204,000
Rose Deep     ...        ... ■•        ■■■ 170,000
New Primrose ... ... 165,000
Simmer and Jack       ... ... ... 164,500
Henry Nourse...        ... ... ... 156,250
Crown Deep   ...        ...        ...        ... 150,000
Pioneer ... ... ... ... 141,750
Langlaagte Estate      ...        ...        ... 141,000
Angelo ...        ...        ■■•        ■■■ 137,174
Glencairn        ...        ... ... ... 125,000
Wemmer ... ... ... ... 120,000
Heriot  111,864
Durban Roodepoort   ... . . ... 100,000
Witwatersrand
Wolhuter
Treasury
Jumpers
Rietfontein "A"
Driefontein
Ginsberg
United Roodepoort    ...
Worcester
Meyer and Charlton   ...
Jubilee
Porges Randfontein   ...
Langlaagte Block " B "
May Consolidated
Lancaster
86,000
81,000
7i,437
68,750
64,000
60,000
57,433
48,75o
47,850
New Comet
Kleinfontein   ...
Windsor
Salisbury
Stanhope         	
                 28,125
                  23,125
^4,834,158 TRANSVAAL.
The combined debt, in debentures or otherwise, of Rand
mining companies amounts to   -£5,516,000.
Further capital will have to be provided, in order to bring
all the already floated promising mines to a producing stage,
to the amount of -£12,780,000.
An average main reef mining venture is a perfectly
legitimate undertaking in every respect, and does not offer greater
risk to the investor than a sound commercial undertaking of
any other nature. - But there is a limit 'to the value of a mine
such as this, which the public, in. receipt year after year of
regular dividends, has never fully realised. The mine becomes
worked out ; the redemption of capital invested becomes every
year a more pressing necessity ; and, yet, such appears to be the
ignorance of the public on this point, that the share market may be
said to practically ignore the question of redemption altogether.
To speculate to-day on the Rand, or in Rand mining shares,
both a scientifically inclined mind, and.a great deal of rule of
thumb, are necessary.
The investor must know which, are the good localities, and
which are the best financial houses to follow.- He must be up in claim
areas, stamping capacity of the mills, lives of mines, and allow
adequately for redemption of capital invested ; he must thoroughly
understand all about deep levels, ore sorting, the water supply, the
state of the native labour market, and the use of rock drills in stopes.
Finally, he must learn to sell his shares—be they speculative
rubbish or gilt-edged investments—during the periodical " booms,"
or strong markets, which always come sooner or later, and he
must devote the proceeds to buying into well-selected and well-
controlled mines during the reactions which inevitably follow.
I have little that is new to say about the Rand and its
mines; the subject has been dealt with already from every
conceivable point of view, but I will try to make. the foregoing
points as clear as possible.
Firstly, there is the eternal political question. To my mind
the grievances of each party—Boer and Uitlander—seem evenly
balanced, and I will try to sum up these grievances as they
appear to exist. "^1
I     .   J
,   ,
"*5                 /      t
3000 Ft. Lev
! 's
"ï?
t£
1 Q
r                                   ^
"S
\
/   /
-3
/   /
/   /
CO
sa.
g
f f
UJ
Q
R
/
1      ——
*\
I
1 \/
1   Y
ce
LU
1   /
CO
Lu
e*..W                                         i        *
^^^^.^^^^&-*,,«<
sp      '■
-.If
> /
LU
HKV -
7 f
LU
-x-°-
f
-y7 -
/'/
/   /
1
LU
-5
G
|§T /
^
1
SaSSl
H
Q,
X
f   1
A-                                                 /
N
i                                           / /
O
i i
/   /
^
)
//
^c
1
f-
--îjp-c
s.
/   •
i   /
2
O
;                          /
/
1    "                 /-
r
1                    //
h-
g.
!                  / /
/ /
<->
LU
b
CO
Î3
"          /JÊ^
O
<
1
1 F  TRANSVAAL. 27
The   Boer   Government   has   always   viewed   the   mining Misgovem-
industry with suspicion, if not with hatred, and has continually Boers.y ' e
brought unfair legislation to bear upon it.     The laws relating to
native labour, liquor supply, and such like, have been placed in
the hands of a civil service utterly unable to administer them.
Monopolies have been created in such important matters
as railway transport, the manufacture and supply of dynamite
and other explosives, and in other articles of prime necessity
to the community and mining industry. Moreover, the food"
supply is heavily taxed. On the head of this has come the Unjust
5 per cent, tax levied on mining profits, and it is feared that this
tax will be increased from time to time whenever the Government
requires more money.
There is a terrible squandering of revenue every year by
the Government, often in a reprehensible manner ; the Uitlanders
assert, and with justice, that were the finances of the State
spent in a proper manner, the natural revenue would be more
than sufficient for all requirements.
In addition, there are only too many authentic cases of Boer
legislators and officials selling their services and influence, and the
Government in all its departments is viewed, largely for this
reason, with intense distrust.
Now what can be said of the Boer  side  of the  question ? The case for
From, the  early   days  of the   Rand,   every   Boer in an official
position  has  been   subjected,   by   one  or  other .section   of   the
Uitlanders, to a course of bribery.    Impecunious, weak-willed, uneducated people as they are, is it surprising that they have fallen?
Again, the Transvaal is the richest mining country in the
world; hundreds, yes, thousands, of the Uitlanders, as well as shareholders in Europe, have made fortunes out of its gold mines, and
many of those who have thus benefitted have never seen the country,
and all the richest men among the Uitlanders leave it as soon as
they can : it is evident that but a few have come voluntarily to stay.
The Uitlanders demand the franchise, and, as they are in the
majority, this is equivalent, in the Boer mind, to demanding the
government of the country. Of this vexed question, although I
have studied it for years, I can offer no solution.    Granted that the
^ TRANSVAAL.
present Government is thoroughly bad—would a new Republican
Government, with a controlling Uitlander influence, be any better?
Critics must not forget that many of the best men in the Transvaal
to-day would not become naturalised burghers of the country, and
that the political vote would pass largely into the hands of Germans,
Polish Jews (who would control the liquor interests), Cape
Afrikanders, with ideals of their own, and perhaps British miners,
who would be engrossed in purely labour questions.   .
I confess that, as a Republic, I see little hope for a well-
governed Transvaal, but as I have said before, I do not pretend
to offer a solution of this question, and I do not wish to appear
adverse to the political aspirations of the thousands in the country
who have been used to the standards of honest English government. But, setting politics aside, residence in the Transvaal is no
great hardship. Even without the nominal control of the government of the country, I say it advisedly, we, the Uitlanders, are in
an equally good or better position than the residents of any other
gold field in the world. There is a perfect climate in the Transvaal.
There is unbounded wealth for those with capital at their disposal, and a high wage for those willing to work. There are practically no official or governmental restrictions in private and social
life. There are periodical " booms " in the share market, engineered
in Europe, by means of which any man with brains and a small
capital, who is not a gambler pure and simple, can make a good
deal of money. Lastly, extraordinary paradox though it may
seem, the real government of the country is in our hands. We
own the Rand : we own a half of the whole State : our capitalists
have established excellent private relations with many of the
Government officials : the President and other prominent Boers
own gold-bearing farms, which it is their wish to get explored,
and, if found good enough, floated ; and the all-powerful love of
money-making permeates the whole community, and brings the
sensible Boer and Briton into the most harmonious relationships.
A few more years will see the government of the country,
and that with the consent and co-operation of the Boers themselves, pass into the hands of more enlightened and progressive
rulers.    Surely the exercise of patience in the meantime by the TRANSVAAL.
29
1
Uitlanders, the real dominant race, is no great hardship. As a
class we have never used tact in our treatment of the Boers.
It is not too late to begin, and there is no reason, even at this
late hour, why permanently better relations, which would redound
to our credit, and which would bring about a better state of
feeling all over South Africa, should not be established.
The main questions now at issue between the Government
and the mining industry, exclusive of the franchise, are those of
(1.) General questions of taxation—including monopolies.
(2.) Administration of the Pass Law and Liquor Law—
as affecting the native labourers.
(3.) Bewaarplaatsen.
(1.) As regards taxation, it is a cause for regret that there has
not from the first been in the Transvaal a direct tax on mining
profits. In all the English colonies there is a tax of 5 per cent,
on dividends. In Mysore, India, there is a tax of 5 per cent, on
the gross output, and in the English Presidencies the tax is y\
per cent. But in the Transvaal neither has there been a direct
tax levied, nor had even the early passed law that the Government may levy 2\ per cent, on the gross output from mynpachts
ever been enforced until recently. Had the Government from
the early days been in the receipt of, say, half-a-million annually
from direct taxation of the mining industry, it is more than
probable that all the dissatisfaction caused by its ever-recurring
want of money, by its unjust policy of monopoly-giving, and
by its recent enactment of a 5 per cent, tax, would have been
greatly obviated, and the State would have existed under a
regime of comparatively sound finance. As it is, the mining
industry is taxed, indirectly, to a most unjust degree. But the
State does not benefit. The taxes do not go into the coffers
of the State, but into those of the Dynamite Company, the
Netherlands Railway, and of the Cape and Natal Government
Railways (which wisely follow the example given them by the
monopolist company of the Transvaal) ; and into the pockets of
innumerable individuals and concessionaires who fatten upon the
Government, and who are responsible for an immense State
expenditure which is entirely unjustifiable.
Principal
political
questions. 30 TRANSVAAL.
There is no doubt that the whole political situation hinges
upon the adjustment of taxation. An income tax should be
brought in, and a direct tax of 7^ or even 10 per cent, on profits
should be levied. Against this, the Netherlands Railway should
be expropriated and worked as a State Railway ; the dynamite
monopoly and other concessions should be bought out ; the duties
on food should be abolished. The Transvaal, with its wonderful
mineral resources, might then become one of the soundest
countries in the world financially, arid the Government would
have enough money for all legitimate requirements.
(2.) The administration of the Civil Service, or rather the
lack of administration, has caused more trouble to the mining
industry than the unjust taxation itself. This specially applies
to the laws regulating the contracts between native labourers
and the companies, and those which provide for the restrictions
against the sale to the natives of strong drink. The laws on
these subjects are quite sound—but they are never carried out.
It is, apparently, possible to bribe a majority of the petty officials
who administer these laws, and the result is, literally, chaos.
Natives by law are not allowed to break contracts with the
companies that employ them. As a matter of fact, thousands
of natives, to secure whose services the mines spend enormous
sums, desert from any given mine during a year, and not 5 per
cent, are returned by the officials whose duty it is to prevent this.
Natives are not allowed to buy drink. In practice, it is found
that from 10 to 25 per cent, of the natives on every mine are
continually incapacitated—from drinking the vile liquor supplied
by the hundreds of Polish Jews whose canteens swarm all along
the reef—and the expense to the mines from this source is very
great. A satisfactory administration of the existing laws which
refer to native labourers would do an immense amount of good.
(3.) The Bewaarplaatsen question refers to those areas, equal
to about 500 claims in extent, which some mines originally took
up as sites for machinery and tailings, or for water rights, and
which now, owing to deep level developments, have become very TRANSVAAL.
valuable. For years past the companies interested have petitioned
the Government to give them full mining title to these claims, but
the Government has continually postponed a decision on the
subject. There is no reason to think that this question will not
be satisfactorily settled eventually. The claims mostly lie in small
blocks, containing the reef at great depth, and it would be
impossible for new owners who might acquire the mining rights
of these claims to work them at a profit : again, the surface
rights belong to the mining companies, so that a new set of
owners could under no circumstances reach the reef, however
valuable it might be, except by arrangement with the mines
themselves.
The   solution. of   the   question   is   clearly   this :   that  the J
Government should  offer the claims,  with  full   mining  title,   or s
bezitrecht,   as   it is called, to the companies interested, for from
a third to a half of their estimated value.    Should the companies
refuse to take the  claims on these terms,   they  should   be  put
up to auction and sold to the highest bidder.
The  next  problem  to  be discussed, the most important of *
all to  my  mind,  is that of native labour.    It is more pressing !
than   dynamite,   or   railway   tariffs, or   a   5   per   cent,   tax,   and, a
when  combined  with  the  political  side  of the  same   question,
viz.,   the   administration   of the   Pass   and   Liquor   Laws,   is   of
supreme importance.
For years past there has never been a full supply of natives
on the Rand, and considering the large number of big mines,
with batteries of 100 and 200 stamps, which have recently
commenced work, it is really extraordinary that the supply has
kept up so well.
The sources of supply are :—
(1.) Natives of Swazieland, Zululand, and Natal.
These are fine workers, but can rarely be induced to work
underground.
(2.) Natives of Basutoland, Cape Colony, and Bechuana-
land. They are capricious, and form only a small part of
the supply. TRANSVAAL.
(3.) Natives of the northern districts of the Transvaal.
They are inferior workers, and also much interfered with,
on their way to and from the Rand by Boer farmers—who
require labourers—and petty officials, who, under pretext
of their position, frequently extort money from the natives,
and frighten them away most effectually.
(4.) Natives of the Portuguese provinces in Mozambique.
This is by far the most important source of supply. The
men are excellent workmen, especially underground ; they
stay on the field for a considerable period, and, except when
under the influence of drink, or of periodical tribal excitement, give every satisfaction.
The Witwatersrand Chamber of Mines has time and again
devoted great attention to the labour question, but has never
. succeeded in solving the problem. The Native Labour Association, formed under the auspices of the mining companies, has
recently done good work, and has distinctly improved the supply
of labour, but owing to the increased demand, the position
generally is little better than it has ever been.
Great blame is due to the Government for the slipshod
method in which the regulations referring to the labour supply
are carried out. Years ago a satisfactory understanding might
have been come to with the Portuguese, by which the whole of
the Mozambique territory, with its swarming hordes of Kaffirs,
might hgve been drawn upon. Under such an agreement, all
the native chiefs would have been remunerated for the regular
supply of drafts of labourers, who would be entitled to food and
shelter at the expense of the mines from the time they left their
kraals ; all these would have been registered and handed over
to the Chamber of Mines for a fixed period of service : the
Transvaal and Portuguese Governments would have received a
fee of so much per head—which would have amounted to a
handsome sum yearly—and a regular system, to the benefit of
the natives themselves, and to the distinct pecuniary advantage
of both Governments, and the mining industry, would long ago
have been established. TRANSVAAL. 33
As it is, this programme has been repeatedly attempted from The Govem-
Johannesburg, and has as often been passed over, or allowed to native labour-
drift by the officials at Pretoria. There is no doubt that on this
point the Government has shown itself indifferent to the wants of
the industry. But great blame is also due to the mines themselves.
Time and again a standard rate of wage has been fixed upon by all
the mines, but no sooner has the supply of labour again become
short, than one company after another has broken its pledge and
engaged workmen surreptitiously, at higher wages, regardless of
promises. This state of things has brought about the existence
of a swarm of labour touts; these men penetrate into the districts The "tout"
where the emissaries of the Native Labour Association are at
work ; they promise the natives a higher rate of wage than that
fixed as the standard, and induce thousands of men to accompany
them to the Rand. Arrived there, they hand over the natives
to any mine that is prepared to pay an unfairly high premium, or
even at current standard rates, making the ordinary commission.
The natives find that they have been swindled : they do
not receive the wage they were promised : they are naturally not
in a position to distinguish between a tout and a duly authorised
agent, and the consequence is, that at the first opportunity they
leave the fields, and can never be induced to return.
Owing to the constant short supply of labour, which Results of
apparently will tend to become still worse, a great deal of harm labour,
is inflicted upon the industry. There are many mines that
cannot keep all their stamps at work, and there are many others
that do not for this reason erect the stamping power they would
otherwise be justified in erecting. The expensive custom of using
rock drills in the stopes, due entirely to the shortness of native
labour, is now almost universal. This means the carrying of
a far bigger stope than is necessary : the use of correspondingly
more dynamite : the blasting down of a great deal of waste rock,
which, despite the closest sorting, forms a large part of the product
milled : and the general raising of expenses all round.
To my mind, without reducing the present standard of
wages    one    penny,    the    resumption    of  a   full   native    labour 34 TRANSVAAL.
a full supply, supply,   systematised on  the  lines  laid   down,   and  which   is  a
^dminîstration matter  quite   capable   of  realisation,   and   the   honest   carrying
Liquo^Laws, out  °f t^iC   ^ass  and   Liquor   Laws,   would   mean   an   average
would mean a reduction on working costs of 5s. per ton,   and  means more to
saving of 5s. a & . .
ton. the  industry than cheap dynamite  and   cheap  railway rates put
together.
Ore sorting. Another problem, which is in process of being worked out,
but  not  in  a  thoroughly   satisfactory   manner,   is   the   problem
of ore-sorting.
A reef is frequently only from 12 to 24 inches thick. To
mine this it is found necessary, under the most favourable
conditions, to blast down a total of 30 inches—that is to say,
24 inches of ore and 6 inches of waste rock. Usually the width
blasted down, however, is more than this, averaging from 36
to 42 inches, and often when a rock drill has. to be used in the
stope, the total width of rock blasted down is 48 inches.
its great im- Assuming that the value of the 12 inches of clean ore were
portance. T Qz tQ t^e ton> ^ vaiue Qf ^g tota] product blasted down on
a basis such as this, would only be 5 dwts.—an unpayable result.
To make a narrow reef such as this pay, therefore, it is absolutely
necessary that a large percentage of waste rock be sorted out on
the surface before the ore is sent to the battery. A large quantity,
comparatively speaking, of waste rock must always remain in the
ore product, because, in blasting, much of it is broken into
innumerable minute fragments, but it is nevertheless possible
to sort out a great deal and to raise the value of the product
considerably. In the last two years sorting has made great
strides on the Rand. Large revolving tables and belts have
been erected. Over these the rock, as it comes out of the
mine, slowly revolves, streams of water play upon it, showing
clearly, to the sorters what is reef and what is waste ; and, on
a number of mines, from 20 to 30 and even 40 per cent, of the
whole quantity is sorted out as being valueless. The mines
employing this careful system of sorting are distinguished above
their neighbours by their high yields per ton, and usually by
their better comparative profits.    But into the minds of consulting v TT TRANSVAAL. 35
engineers,   and   especially  managers,   is  stealing   insidiously  the
knowledge  that  every ton of waste  rock sorted out raises the Competition
- as to working
working costs on the remainder by a slight fraction, and they costs militates
begin to realise clearly that low working costs, the object of every ore-sorting,
manager on the Rand, and careful sorting, do not go together.
Unfortunately, Witwatersrand managers—with very superficial
reasoning, it has seemed to me—are judged by their costs per
ton of ore crushed. The man who works for 20s. per ton takes
credit to himself over his neighbour who works for 22s., and yet
the latter, if he chose to relinquish his elaborate sorting, might
also work for 20s., or perhaps 19s. It is true that shareholders
benefit at the end of the year more by the latter's procedure than
by that of the brilliant worker at 20s., but short-sighted directors
on the spot, consulting engineers even, the Press, and a great
many other people who ought to know better, are inclined to
praise the manager with the low working costs, and to look with
cold eyes upon the really sounder man who has the courage to
prejudice his working costs per ton in favour of elaborate sorting.
But my contention is that sorting has not nearly reached Igret^ore'
a perfect stage yet. Every new mine that is being equipped
should be provided with sorting tables or belts of double the
area of those now in use ; these tables should revolve more
slowly than they do, and more jets of water should play on
them. A white man, or several white men, of capacity, should
be placed in charge of the sorting-sheds ; the staff of native
pickers should be doubled, and every bit of waste rock over
the size of an inch should be removed.
Then we should have yields of 50s. and 60s. per ton from
mines now producing 35s. ; smaller stamp batteries, saving all
the expenditure entailed by the present enormous equipments,
would suffice ; and the profits at the end of the year would be—
relatively—distinctly higher. Certainly, working costs per ton
would not show so well as at present, but the authorities, to whom
the managers look for approval, would have been trained to a
due appreciation of the relative values of a low working cost
and a large percentage of sorting combined. 36 TRANSVAAL.
I sincerely hope that shareholders in individual Rand mines
will take this question up, and that public opinion will change to the
extent of setting as great an appreciation upon a large per-centage
of waste rock sorted out, with correspondingly higher working
costs, as upon low working costs with a slovenly milling of more
waste rock than of ore, and a correspondingly low yield per ton.
A fourth problem worth discussing, is that of reciprocity
between the mining companies.
As it is, the capital expenditure on the Rand, upon surface
equipments, for each individual mine, has reached an alarming
and extravagant level. It is no rare thing, now-a-days, for the
directors of a deep-level mine to spend £"500,000 in hard cash
before a single ton of ore is milled, while the expenditure on
outcrop mines, too, has been little short of this. Of course, a very
large expenditure is really necessary, but in many cases, by the
exercise of due reciprocity, a saving of from £"50,000 to -£150,000
could easily be effected. To begin with, the different groups, and
the different consulting engineers, and boards of directors, should
work far more harmoniously than is the case at present. With
a good understanding such as this, a saving of expenditure could
be effected in many directions. Firstly, fewer shafts might be
sunk. At present, by the mining law, every mine must have
two means of egress in case of accident, but there is no reason
why two adjoining mines might not agree to have three shafts
between them—one shaft each for a main hauling-way, and the
other a joint shaft, for ventilation, and for uses other than that
of ore-hauling. Then, again, great facilities might be rendered
between mines as regards the development of certain areas,
which, from the occurrence of dykes, faults, or from their
geographical position, may be difficult of access to the mine
owning the same. But probably the most important saving,
especially like directors of new
what would be effected by the.
iree, or even four neighbouring
1   slimes   plants,   electric   works,
and this
is   a  point
I  si
deep-leve
flotations t
)  Stl
joint  use
—spread  ove
îr  t
mines—0
f battery,  cy
anid
workshop
s,  dams,  ant
l  su TRANSVAAL.
of reciprocal relationships of this sort immense sums would be
saved on initial capital expenditures, and also a very substantial
figure on  actual  working expenses.
And now we can pass on to a discussion of each individual ?
Rand   mine,   and  the  chances   it   offers  to  the   investor  or  to
the speculator.
There are, as has been already stated, 156 mines on the
Witwatersrand. Many more are now in process of formation,
principally to work deep level areas, and, to a certain extent
a list of these mines prepared now (March, 1899), will be before
long out of date.
It is a matter of great difficulty to classify the mines in
the most advantageous and succinct manner.
The  course  I  have adopted  is to  classify them  into three .
divisions, which are as follow :—
(a.) Mines on outside reefs—other than the Main Reef.
(&.) Mines on the Main Reef—outcrop.
(c.) Mines on the Main Reef—deep level.
These mines are further classified so as to show at a glance
their financial position, and they are again further sub-divided
into groups.
A short sketch of the main facts about each of these mines is
added. At a later stage particulars are given of debenture issues,
and also a table of estimated lives, and values of the leading mines,
and a short account of the factors which determine such values.
The following is a list of mines floated on reefs other than j
the Main Reef. The list was a much longer one years ago, ]
especially after the 1895 "boom," which was responsible for
quite a swarm of worthless flotations on the Black Reef,
Kimberley Reef, etc. Of the' thirty-two mines in this list only
three—Rietfontein A, Lancaster, and Lancaster West—have any
good ore in sight at present, and in the case of the Lancaster
mine this ore is found rather on the Main Reef (known locally
as Botha's Reef) than on the Battery Reef, on which the mine
is supposed, nominally, to be working. TRANSVAAL.
MINES SITUATED ON REEFS OTHER THAN THE MAIN REEF SERIES.
Statement as to  the  Financial Position.
■ft|
Issued Capital
Debt and
Remarks as to the
|| shares).
Debentures
Financial" Position.
2
m
Black Reef    ...
Midas East
175,000
illi*effl
^45,000 in hand.
Midas Deep
150,000
50,000
Middelvlei
175,000
&sSËI
12,000
Middelvlei Deep...
90,000
—
10,000
Middel Black Reef
110,444
llllplil
South-West Randt
185,387
30,000
Apollo     	
180,000
—
30,000
Cornucopia
100,000
2,000        „
Phcenix	
200,000
k^^m
5,000
Rand Southern  ...
80,615
8,000
7 % Debentures.
Battery Reef   ...
Rip         	
111,950
*{%£$
Lancaster
300,000
180,000
( Option on Reserve Shares to
Lancaster West ...
195,000
'; ■~^^":^
Violet      	
150,000
150,000
( Options on 250,000 Reserve
Randt (5s. shares)
80,000
- _ ^
Rand Junction   ...
125,000
C0§f|*
{25'TaidbHaDilityVei5S'Un"
Horsham...
190,000
45,000
( Company has given a two
Vulcan    	
90,000
—
^£2,000 in hand.
Lindum  ...
500,000
— '*
7o,oco
Kimberley Reef
Great Britain      ...
100,000
^V:^|
5,000
Gordon Estate   ...
92,000
••■ ■ '-^Êsf
20,000
Bohemian
130,000
.. ;;..--vivï
2,000
Southern Jumpers
66,007
—
Elandsf'ntein No. 2
I20,boo
— "■
Randt Reefs
150,000
—
Rand  Roodepoort
(IOS.)   ...   .      ...
6o",ooo
:'->'£?$
Leeuwpoort
95,000
'.'■"'^'H'
2,000
Rand Central     ...
200,000
' ■— -
60,000
Du Preez Reef
Rietfontein
270,000
_
Rietfontein A    ...
2>~l1,S°°
Sgfjfjla
Alexandra Estate...
250,000
wllisi
25,000
Waterfall (5s.)    ...
25,000
^ÊÊÊm '    TRANSVAAL. 39
I must here emphasise an opinion that I have often expressed Outside mine:
before, that is, that investors at a distance should not touch the fnvesfmfnts!18
shares of any of these outside mines. In individual cases they
may be made successes, or temporary successes, and at times
they form good enough speculations for those on the spot with
an exact knowledge of all that is going on. But if investors
in Europe buy these shares they will, in all probability, lose
their money. As regards the Black Reef, eight miles to the south
of the Main Reef series, I look on it with extreme suspicion,
and would like to see every mine on this line put into liquidation.
The Du Preez reef is narrow and treacherous.
The Kimberley Reef and Battery Reef mines have this
distinct point in their favour—the reefs on which the mines
were floated originally are no good at all, but under both of
them the Main Reef series lies at a workable depth. Already,
in the case of the Battery Reef, which lies comparatively
near the Main Reef series, the Lancaster and Lancaster West,
by sinking to the latter series, have found payable ore. Other
mines on the same line, when properly financed, may find
themselves also in this position.
The Kimberley Reef mines are being bought up for
Main Reef deep-level areas. Most of these mines are situated
on the dip of poor stretches of Main Reef, but nevertheless a
certain specious value, in these days of deep-level dreaming,
attaches itself to the areas in question.
Midas East.—Has a lot of cash in hand, but little prospect Midas East.
of finding any payable ore.    The property is a large one, but
of no value.
Midas Deep.—Has 465 claims. A .borehole was put down Midas Deep,
cutting the Black Reef, at 800 feet, and the directors reported
that the reef was twelve inches wide, assaying four ounces. This
happened .some years ago, and it is curious that the company
has not either put down more boreholes, or preferably a shaft,
as there is cash in hand for this purpose. It is probable that
this is ■ only • a local patch of rich ore,  which  will  not continue. m
The results of working in the Midas Estate, the outcrop mine,
now liquidated, were not such as to warrant the idea that the
Midas Deep would ever be a payable property.
• Middelvlei. Middelvlei.—There is no payable ore known to exist here.
Middelvlei Middelvlei Deep.—There is no payable ore known to exist
eep' near this mine.
Middei Black Middel Black Reef.—Should be liquidated.
Reef. n
Southwest South  West   Randt.—Having   found   no  signs  of payable
Randt. ree|-  iocai]y;   thoughtfully   invested  most  of  its   intact   working
capital, some -£60,000, in a series of New Zealand mining shares.
The directors, for reasons best known to themselves, selected
absolutely the most worthless of all the bad New Zealand
mines, for this essay in finance, and as a result, the money so
laid out must by now have almost entirely vanished.
Apoiio. Apollo.—This is a typical Black Reef flotation.    Fortunately
there is some cash in hand which the shareholders ought to
distribute.
Cornucopia. Cornucopia.— A mine of no value.
Phœnix. Phoenix.—This company may be reconstructed, but it would
be more advisable to liquidate.
|an^ Rand Southern.—This company should be liquidated.
Rip Rip.—The Battery Reef ore, worked in 1896 by dry crushing,
was found unpayable. The property of the company might be
included in a flotation to embrace the deep level of the
French Rand, and for that reason the shares have a speculative
value.    There are 343 claims.
Lancaster. Lancaster.—This company has made an unexpected success
of an area of ground hitherto thought worthless, but more from
the Botha's Reef (Main Reef series) than from the Battery Reef
itself.      There   is a  large debenture debt,  but against  this are ular profits of the mine, and a large reserve of good ore.
ture promises to be successful, but the shares at high
ire not a tempting speculation.
Lancaster West.—This property is as yet an unknown Lancaster
quantity. It is expected to turn out as well as the Lancaster,
and is under the same control. Until, however, the continuous
results of a year's working give a definite value to the shares,
the mine may be said to be over-capitalised. There are 151
claims.
Violet.—A badly managed mine in the past. The ore in violet.
sight on the Battery Reef is unpayable, but it is thought that,
as in the case of the Lancaster and Lancaster West, the
Botha's Reef, underlying the Battery Reef, and not yet opened
out, may prove more reliable. The company is now in the
throes of reconstruction. There are sixty stamps erected, but
no proper sorting plant. The shares are purely speculative.
There is a very large claim area.
Randt.—A  poorly   financed   London   flotation.      Some  ore Randt.
of barely   payable   value   was  developed,  but the   company  ran
short of funds, and the mine had to be shut down in the middle
of development.    There are forty-six claims.
Randt   Junction   Reefs.—A   doubtful   venture,. floated   in 13]
London.    No   work   has   yet   been   done.    There   is   a   small
balance of cash in hand.
Horsham.—The funds of this company were spent rather Horsham,
in the erection of a costly surface equipment, and eighty-stamp
mill, than in the development of the mine. So far as is known,
the ore developed is just unpayable, but further exploration on
the reef, which is a fine regular body of ore, might be more
satisfactory. There is a debt of -£45,000, and the bondholders,
while guaranteeing to cancel interest on this for two years, and
to spend £"10,000 in further prospecting work, have received
an option for that period to reconstruct the company. 42 TRANSVAAL.
Vulcan. Yulcan.—After a short period of working, a few years ago,
the mine was shut down. It is thought that the reefs might
eventually be payable, but only after the spending of a great
deal of money—which   the  company is not in a position to do.
Lindum. Lindum.—A large property of 550 claims.    This mine will
probably be reconstructed, and an effort made to prove the
ground satisfactorily. There are stretches of payable reef known
to exist, but these are not of great extent, and the country is
somewhat badly faulted. There is reason to think, however,
that if soundly developed, the mine might become a payable,
though a low grade, venture. It is a possible deep level, too,
of several of the Randfontein mines.
Great Britain. Great  Britain.—Some years ago it was thought that this
company would make a success of the Kimberley Reef. A lot of
ore was developed, on a very wide reef, and several good patches,
although very irregular in their occurrence, were found. The
payable section of several feet thick, however, among the mass
of low grade ore, was found so difficult to locate, that the mine
was shut down. Any future the company may have will be as
a deep level of the Main Reef series, but as the Main Reef in
this neighbourhood is poor, no great value can be set on the
Great Britain claims.
Gordon. Gordon   Estate.—Was  recently   reconstructed,   and   is   now
being bored with a view to locating the Main Reef. The country
in this neighbourhood is much disturbed geologically, and it is
doubtful whether any good results can be expected.
Bohemian. Bohemian.—This   mine,   in   the   same   locality,   is   of   no
value..
jumpe™ Southern Jumpers.—This company, unless already liquidated,
holds claims on the Kimberley Reef, which also form a very
deep level of the Jumpers. The depth of the Main Reef here
would be about 9,000 feet. Claims in the neighbourhood have
a " boom " valuation of about ^300 each. Elandsfontein    No.    2.—Owns    forty-two    claims    on    the i
Kimberley   Reef,   valueless  under  that  head,   but  worth  ,£300
each as very deep levels of Jumpers outcrop mine.    The whole
value of the property would therefore work out at ,£12,000, or
2S.  on each share.
Randt Reefs.—Owns 115 claims on extreme dip of Jumpers, i
and adjacent outcrop mines.    The claims are worth ,£300 each
as deep levels,   making a  Randt  Reefs share,  therefore,  worth
about 4s. 6d.
Rand Roodepoort.—Owns thirty-seven valueless claims on
the  farm   Roodepoort,   and eighty claims,   equally  valueless,   at '
Klerksdorp.
Leeuwpoort.—Owns sixty-five claims on Kimberley Reef. It ]
is thought that the Main Reef series will be found here, and
boring is being done in the neighbourhood. But the formation
is much broken in this locality, and it is probable that if the
Main Reef is found underlying Leeuwpoort, or any of the
adjacent blocks of  claims, it   will be both   broken and of  poor
Rand Central Mines.—These areas adjoin Leeuwpoort, and. Rand Cen
the same remarks apply  to these also.    Boring is in progress,
and the  Kimberley Reef has already been located at a shallow
depth.       It   is  improbable  that  the   Main   Reef  will  be  found
here of any value.
Rietfontein.—Owns a large estate and claim area on Rietfontei
Du Preez Reef. The most valuable area was floated off as
Rietfontein A, for which the Rietfontein received 169,029 shares.
These form its only valuable asset. The reef in Rietfontein
has so far proved unpayable. There are forty stamps—now
hung up.
Rietfontein  A.—1
the   last    two    years,
is   company   ha
;    done
very
well   for
ilthough   much
troubled
with
a   very PT
44 TRA
broken reef. The locality is i
into, and the shares, whatever
be left alone.
Alexandra Estate.—This company's assets of value cor
of its estate and its tree plantations. The reefs have b
found to be valueless.
Waterfall Estate.—Owns a freehold estate of 1,917 ai
in the probable extension of the Du Preez line of reef. Tl
is a small yearly revenue from claim licenses, but there
no reason to think that the reefs on the property  are  of
The Main Reef series extends for a distance of forty miles,
between Klipfontein on thé east, and Randfontein on the west.
With the exception of two big blanks in the formation, one at
Boksburg where a mass of dolerite has intruded, or overflowed,
and the other at Roodepoort, where the whole formation has
been thrown several miles north, the. series may be said to
be  perfectly  regular.
Beyond the extreme points mentioned, the continuation of
the series has not yet been found. Without doubt it exists for
many miles further in each direction, but the formation has
either been badly broken, or the outcrops are hidden under
a great depth of soil, or the reefs have narrowed down to
mere stringers. . Nor does it follow that the continuation of the
Main Reef—even if found—would be payable. Of the last
ten miles, east, on the already proved stretch, not more than
two miles carry payable reef, and it seems to me that mining
men entirely overrate the value of possible eventual discoveries
on the extension of the series. I am inclined to think that no
other important stretch of the Main Reef will ever be found to
carry payable gold. THE RAND—A SECTION OF BANKET ON THE SOUTH REEF. In I  do  not  consider  that  any  company  formed to work an Many main
area on the known stretch of the Main Reef series can be called high™ specu
an unjustifiable mining venture—in other words, a swindle.    But  atlve'
a great many of such companies are speculations pure and simple,
and it seems absurd' that shareholders and the public generally
should put the inflated valuations they do upon many of these
mines.    There is all the.difference in the world between a mine
with payable ore, although it may be only ten claims in extent,
and mines such as Rand Klipfontein,  Modderfontein Extension,
or  Apex,   which,   although  possessing  ground  by the thousand
acres,  have so   far  never  found   permanently  payable  stretches
of reef.
Again, a number of the deep level mines floated on certain as are also
sections of the Main Reef are certainly highly speculative ventures, levels.
What benefit, except that of being part proprietors in a
"Main Reef" property, have shareholders in such companies
as the Chimes Mines, South Randfontein Deep, Rand Victoria,
and others of a similar kind, as yet experienced ? These mines
were floated four "years ago, but as yet not a foot of shaft
sinking has been attempted. As a matter of fact, these
mines, although good ore may be found at a great depth,
have not got the necessary cash to attempt working, and the
position would have been sounder had they never been floated
at all.
I hope that in the following description of Main Reef
outcrop mines readers will clearly note the distinction drawn
between genuine mines and purely speculative ventures, and
that they will refuse to countenance, in their financial actions, the
wholesale gambling in these latter that is now rampant.
The following is a list of outcrop mines on the Main Reef,
arranged according to groups, and showing the financial position
of each mine at the present time. I—
TRANSVAAL.
MINES    SITUATED    ON    THE    MAIN    REEF   SERIES.
Outcrop   Mines.
Statement as   to  the  Financial Position.
Issued Ca ital
Debt and
Further Cash
Remarks as  to  the
Name of Mine.
gj Shares).
Debentures.
Required.
Financial Position.
£
£
£
A  Modderfontein (£4)    ...
—
Modderfontein Extension
325,000
P
Witwatersrand   ...
352>°83
—"
1 Option at &7 on 22,917 Reserve
Jumpers	
100,000
—
— y
Heriot ,	
111,864
—
—
Henry Nourse   ...
125,000
3§s^?â
•■     — ..■' .
City and Suburban (£4)
1,360,000
IpSplÉii
—
Ferreira	
90,000
—
Robinson (,£5 )	
2,750,000
—
Crown Reef
120,000
.*""• ~^vfti
Paarl Central      ■
400,000
y,';a-.y^
French Rand
560,000
200,000
70,000
{ °PtlRedeLiRDebeVntwes.reS '°
Wolhuter (£4)	
860,000
v^kSf^
?"^l^S
Treasury (£4)	
540,000
54,000
£%^mm
Debentures.
Bantjes   ...
434>35°
200,000
Consolidated   Main  Reef
711,500
120>000
eV'n^'S
B  Rand Klipfontein
63,640
—
P
£60,000 in hand.
Kleinfontein
231,250
100,000
->• —•■\0
{        Redeem Debentures3'65
Chimes West     	
178,123
20,000
P
1    P pay °off Debt. 6
Benoni   ...
204,100
40,000
P
(Option on Reserve Shares to
1        pay off Debt.
Apex
125,000
fllllpgjf
P
Boksburg
625,000
■ "' -4.{:^;f'
p
Blue Sky            	
150,000
50,000
100,000
Will be Reconstructed.
Cinderella
30,000
100,000
Do.            do.
Agnes Munro    	
93,000
90,000
50,000
Do.           do.
Comet    ...
225,000
175,000
1 °Pt Rede™i^ebreVnturesareS  '°
Angelo	
275,000
| Recent Debenture" iSue paid
Driefontein
275,000
—
-fll
(Recent Debenture Issue paid
1        off.
C Ginsberg...
160,000
—
Balmoral...
58,160
145 000
j Proposed^ to ^«J^j«™
Glencairn
500,000
140,000
{ °Pt Red«m1DebeVnetu?MreS '°
New Primrose   ...
300,000
Spes Bona
150,000
90,000
{ OP' Liquidate OX ^^ '°
Langlaagte Royal
180,000
270,000
50,000
Will be Reconstructed.
New Unified     	
150,000
30,000
60,000
Kimberley Roodepoort...
175,000
40,000
60,000
New Croesus
300,000
80,000
{    "'LkmMate'Bebt. MINES  SITUATED  ON  T
BE  MAIN
REEF SEP
ÏES—Continued.
Name of Mine.
1 Issued Capital
Debt and
Further Cash
Remarks  as to   the
[£i Shares).
Debentures.
Required.
Financial Position.
■'•••-. "-V
|
£
£
I
D Langlaagte Estate
470,000
—
Langlaagte Block B
632,500
0SJ0ÊÊ,
{0ft8h|prP&cflh5a?es:Si"
Langlaagte Star	
250,000
^ç%ïÇ/
50,000
Randfontein Porges
487,500
—
Randfontein North
300,000
^tWK'
50,000
Randfontein Robinson ..
574,5°°
/Vifejit*'.
50,000
Randfontein Block A    ..
547>5oo
'T fs£
150,000
Randfontein Mynpacht..
632,500
L-^-llA:.^
150,000
Randfontein South
400,000
-""—":■
;v^gpe'
E  Klipfontein
175,000
' ' — -
p
Simmer and Jack (£5)-.
4,700,000
293,000
--"■J^r':-y
{DebR^dérmedm   Sh°"ly   ^
Luipaard's Vlei ...
!    2I0'000
150,000
.. "^ ' -^
■MhHH
F May Consolidated
275,000
"  T—-""■"'
-vlilF^
Geldenhuis Estate
200,000
f§Jl|j^|e|
■"■'."'..—. ■■■=
Princess ...
165,000
60,00O.
^^swEll
rtj^f^j^to
Van Ryn            	
400,000
—p	
iiiiillil
(Recent Debenture  Issue paid
New Goch
300,000
^'——
llSSËI
Meyer and Charlton
100,000
""   "--      _
ll§plli
Aurora West
250,000
30,000
^^^^^
Roodepoort U.M. Reef...
250,000
illllll
Salisbury            	
100,000
r^SS^M
Jubilee   ...
!     50,000
■ t: ■—'"■',•
ISSlfiS
Wemmer           	
j     80,000
'Jsisp^--
Sffllll
G  Chimes	
36,444
41,000
PilHiB
H||^8Sg
250,000
fkiigspp
?
Geldenhuis Main Reef...
150,000
ielKilll
^-^111
Stanhope            	
j     34,ooo
iflswsfe
âilpiË
Pioneer  ...
21,000
^^^^^
iissiiie!
Langlaagte Propri'tary(^4
)    100,000
311Bip
50,000
Vogelstruis Estate
100,000
lDebi=rwrnmgfeby
Durban Roodepoort     ...
125,000
^s^^p
Roodepoort West
40,000
llllllsife"''
IPSÉlll
Grey's Mynpacht
64,625
15,000
' -.^
l0pt^SStosto
West Rand Mines
240,000
160,000
^^fe^i
■■■&
Windsor	
,    100,000
^fê^^
Worcester          	
95,722
—
î?" i^N^r
West Rand Central       ...
80,000
ÈSIPISf*
i^C^i^ii
Champ d'Or      	
131,624
'S-^'
,£■■  -
Western Kleinfontein   ...
|    no,ooo
_
p
_£6o,ooo in hand. ««Hill Ill III» ■
ifijj
4,8                                                             TRANSVAAL.
p4
In describing these mines we will commence at the east end,
the first mine being :—
K,ipfale,„
Klipfontein.—The company owns a freehold  farm of over
2,000 acres.    The Main Reef series has been located here in a
number   of   boreholes,   but   much   disturbed,   and' with   almost
invariable poor results.     There  is a small   amount  of  cash   in
hand.    The shares are entirely speculative and have no intrinsic
value.
Rand
Rand Klipfontein.    Owns  a  freehold  farm  of nearly 5,000
K""OB'"°
acres, and about ,£60,000 in cash.    The reef has been located in a
number of boreholes, but always with poor results.    The shares
belong to the entirely speculative class of Rand ventures.
Modder-
Extension.
Modderfontein Extension.—Two  years  ago  this  mine was
shut down, but before that a good deal of prospecting work had
. been done.    The results showed that the reef ran through the
property, but it is badly faulted, narrow, and only one small section,
as the result of all the exploratory work, could be looked upon as
likely to yield  a   profit.    Owing  to  good   developments  in  the
eastern end of Modderfontein, Modderfontein Extension must be
considered as having a certain speculative value, but there are no
definite results to date to warrant the shares standing at a premium.
The property is freehold over 4,000 acres, but only a comparatively
small area is underlain by the reef.
Modder
Modderfontein.—This   celebrated   but   hitherto   unfortunate
fontein.
mine is opening out much better recently, and may now be referred
to as a definitely payable mine.    The only reason, however, that
can justify the excessive market valuation of the property is the
fact that there are over 1,200 reef claims, and, doubtless, specu
lators  expect  that  the   company   will   sell   off   several  areas  to
subsidiaries.
Modderfontein forms an excellent example of the " valuation
per claim " fallacy.    People assume that each Modderfontein claim
must be worth ,£3,000, and that, therefore, the shares are worth, at TRANSVAAL. 49
will be spent, before the mine, and its subsidiaries, whose flotation
must be assumed, will be earning the £"300,000 a year which will
be necessary to pay a reasonable dividend on the present market
valuation ? Looking at the mine in a coldly impartial light, we
find that half-a-million has been spent on it, and that so far it has
worked on balance at a loss. It has a wretched water supply,
giving out for several months of the year, and the shares fell in
two years from £"18 to £1^. These are the actual results to date.
They are not distinctly encouraging, and yet, such is the inherent
desire of the public to gamble, and to discount any improvement,
by at least five years, that the shares have again become a popular
speculation.
Van Ryn.—The earlier directors of this mine, in the " boom "
@£ 1895, showed themselves to be able originators and pioneers in
the now fashionable recreation of flotation of " subsidiaries." They
floated the Van Ryn North and the Van Ryn West, and on the
strength of this the shares in the parent company were put up to
£g. When the slump came, these able men again struck out a line
for themselves, and showed an admiring financial world a new
variation on the " subsidiary " theme : they reabsorbed these two
flotations—and still to the extreme financial advantage of the
parent concern. It came about in this way. It was found that the
Van Ryn North, owing no doubt to some careless blunder, had
been floated on the wrong side of the reef, and that there was no
.ore at all in the mine. The parent company was at that time very
short of cash, in fact, heavily in debt, and as the Van Ryn North
had fortunately £"60,000 in the bank, it was decided to rectify the
awkward mistake alluded to, by a reamalgamation, which was
done. By this act, Van Ryn North shareholders received j
shares in a mine with ore in it, and the Van Ryn Company got the necessary cash. Then again, at a later period, it was
found one day that the Van Ryn West was heavily in debt. As
this debt had been guaranteed by the parent company, and was
mostly due to it, it was necessary that such an unpleasant fact
should be got rid of, so the directors of the Van Ryn, with exquisite
delicacy of feeling, not only paid off the debt of the Van Ryn West, 50 TRANSVAAL.
but absorbed the whole of that company, with its 8o-stamp mill,
• and its well-developed mine, into the bargain. Now the Van
Ryn exists as if these exciting matters had never taken place.
It has 160 stamps ; a poor labour supply ; a large extent of
ground ; a narrow reef ; and is well managed.
Reconciling these various factors, the directors have notified
shareholders that when all the stamps are set to work profits of
£"15,000 a month may be expected. I trust I shall not be considered unduly pessimistic when I state that these figures are
distinctly on the side of optimism.
Chimes.—The area of this company's mine is situated on a
small broken patch of reef. This has now been entirely worked
out, and for all practical purposes the mine is at an end.
Enthusiastic shareholders still continue looking for another bit of
reef, but this is costly work, and they will tire of it soon.
New Kleinfontein.—A low grade mine, but with over 120
unworked ore claims. The company is soundly managed, and
there is a large reserve of ore opened out. The capacity of this
mine is now fairly well known, and there seems to be little
chance of any considerable improvements in profit-earning. There
are 140 stamps, but owing to scarcity of labour never more than
100 have been worked. With all the stamps at work, profits of
£"100,000 a year might be earned, but this may be reckoned as
the high-water mark of production, and is not likely to be attained
for some years to come. The shares at over £"2 are a doubtful
investment.
Benoni.—There is one small patch, or chute of good ore in the
mine, not enough to warrant the erection of a battery, and so far all
other development, of which there has been a considerable amount,
has failed to prove any more good ore. This mine exemplifies the
fact, which I have already called attention to, namely, that except
the small stretch of payable reef in Kleinfontein,. Van Ryn, and
Modderfontein, the whole stretch of the last ten miles of Main
Reef, on the East Rand, is unpayable. TRANSVAAL. 51
No doubt further development in Benoni is justifiable, and
will be undertaken ; but there is every reason for shareholders '
to consider their mine as a doubtful venture, and the shares, of
course, are entirely speculative.
Chimes West.—This is another mine, which so far is shown chimes
to be unpayable, and although a good deal more exploration will be
undertaken before the mine is absolutely condemned, it is as well
for shareholders to realise that the venture is an entirely speculative
one. The reef is a fine body, and regular in occurrence, but very
low in value.
Western Kleinfontein.—There is every reason to believe that Weste,
the reef in this mine is unpayable—in fact the company should Kleinfl
never have been floated. Practically no work has yet been done
on the property, although it was floated four years ago. The
directors, in not wasting their money on the mine, have shown
good judgment. The working capital thus saved has been invested
judiciously, and the company now owns at least £"60,000 in cash
and good shares.    It should be liquidated.
Apex.—The property of the company embraces the freehold Apex.
of a large farm, which contains within its boundaries a coal mine, as
well as numerous broken patches of the Main Reef series—which
in this neighbourhood is badly disturbed. Within the last few
months the explorations of the company have succeeded in locating
what I think I may rightly classify as the first stretch of payable
reef that has so far been found in the Apex. On this the shares
have gone to a big price. But it is too soon to definitely assume
that a payable mine will be evolved from the disturbed area owned
by this company. The shares, owing to the size and geographical
position of the property, have doubtless a great fascination for
speculators, but investors, who buy on proved results, should not
touch them until a much later period.
East Rand Extension.—The area of this company is 1,117 East b
claims in different parts of the poor section of the East Rand, also
claims at De Kaap, Heidelberg, and elsewhere ; and a holding in 52 TRANSVAAL.
East" Rand Proprietary shares. Boreholes put down on the
principal block of ground, adjoining Apex, have, it is stated, cut a
reef, or reefs, of good value. There is no evidence to prove, however, that the Main Reef series (if it does run through the ground)
is likely to be payable over any great stretch. In the meantime
the shares are only a gambling counter, though, I will admit, rather
a tempting one to a certain class of speculators.
Boksburg Mines.—This is another company holding a large
area of ground on the broken and probably poor stretch of country
that exists in this part of the East Rand. The property of the
company is dangerously near to the great mass of diorite which cuts
right through the formation here, and which apparently is responsible for the reefs being poor and broken up for miles on each
side of the centre of disturbance. All these little matters are conveniently forgotten in a " boom," and the public, owing merely
to the geographical position of the property (the surface map does
not show a mass of diorite a mile wide), will probably, when the
I boom I comes round, purchase the shares with eagerness.
Blue Sky.—This is the most easterly of the fine series of
mines that belongs to the East Rand Proprietary Company.
Readers must carefully note that from this mine westwards the
Main Reef stretches in a regular line for many miles, and is almost
invariably of good value, while from here eastwards, with the
exception of the Modderfontein-Van Ryn patch, no payable reef
has been found. It is absurd to talk about the wonderful developments in the East Rand district ; they do not exist. The development of the subsidiaries of the East Rand Proprietary, from Drie-
fontein to Blue Sky, has certainly been wonderful, but it has been
known for years that these mines held a regular stretch of reef, and
only wanted opening out to prove their value ; excepting this,
nothing new has happened. One patch of good ore has been
found on Apex, and there is an improvement in the general value
of Modderfontein. Beyond this, so far as I can see, from the
Blue Sky for ten miles east, there is no new development, and
whatever eventual results may be there is nothing to justify the
optimistic feeling with which mining men now regard the district. TRANSVAAL.
53
To return, however, to Blue Sky. The reef in that mine
although good, is very narrow, and is not yet proved sufficiently
to justify the immediate reflotation of the company. There are
forty ore-bearing claims, and eventually the mine should be a
profitable venture. The shares are a fairly good speculation
up to par.
Cinderella.—This mine, consisting of forty ore-bearing claims, cinder
will  be absorbed  by one, or two,  new subsidiaries of the  East
Rand Proprietary Company, and the ground promises to be highly
payable.    The shares are quite a good speculation at £2.
Agnes Munro.—Owing to  the small  area of this property, Agnes
twelve ore-carrying claims, and to the fact that it is already in debt
to the extent  of £"90,000,  the  shares  cannot  be  considered  as
worth more than par ; but the reef is distinctly good.    The mine
will be absorbed in a large subsidiary flotation.
New Comet.—Beginning in the New Comet, and extending NewC
westwards, as far as the Witwatersrand mine, there is a phenomenon
which, to the fear of a few observant people, is likely to exercise
a great influence over the future development of this section of
the Rand. This is a large dyke which runs for this great distance,
some four miles, parallel between the North and South Reefs.
I am afraid that this dyke has caused an ugly mishap to the
formation ;  that it has actually cut the South Reef into two ;  and
that the North Reef in this neighbourhood i
the  top   section  of the  South  Reef,  cut fr<
thrown several hundred feet to the north.
I cannot prove this assertion, and I onl)
but it is undoubtedly a factor in the situai
holders in this stretch of mines should take a
If it is so—this assumed theory—what a
When the workings on the North Reef reach a depth of,
say, 1,000 feet, the reef will be cut off by the dyke. All explorations south of the dyke will fail to find any continuation of the
North  Reef, and the mines working that reef chiefly, would in
n
}thi
lg
more than
1
its
po
sition,   and
cri
ve i
t a
3 a theory,
n
wh
ich
all  share-
oteof
11
be
ts
Ill ?
A geologi 54 TRANSVAAL.
the future have to rely solely on the South Reef. This brings
me to the statement of the very satisfactory point that the South
Reef which is not likely to be cut off in depth, is distinctly the
better reef of the two ; that it is being worked to a much greater
extent than the North Reef, and that, except for greatly reducing
the theoretical tonnage of a claim in any of these mines, the fact of
there being only one reef instead of two will have no visible effect
for many years to come.
To lend additional weight to this theory we have in some of
these mines, I believe, the indisputable fact of the North Reef
dipping at a flatter angle than the South Reef, which seems, except
for this hypothesis, an otherwise unaccountable thing. Opponents
may argue that elsewhere on the Rand there are always two or
even three reefs in the series, and that it is most unlikely that these
additional reefs should have disappeared. My reply to this is that
the East Rand is as yet only slightly explored geologically, and that
the missing reef, or reefs, may exist in the shape of mere stringers,
half-an-inch wide, which have never been noticed. Personally, I
should be much pleased to find that my theory is a mistaken one,
but in the meantime, as my object is to lay facts and eventualities
before readers, I think it only right to mention what I consider
is an eventuality, and to let shareholders and the public draw
their own conclusions.
In the New Comet, the North Reef has been of a patchy
nature on the whole,  but recently assays have improved.
On the South Reef, not developed yet to any great extent,
the ore appears to be still somewhat patchy. On the whole, there
is no reason to think that the mine will not have a successful
career, but it will be a distinctly low grade mine, and taking the
profits earned in the past as a criterion, the shar
£l\ to be too high. There are about eighty unworked <
and  ioo stamps.
Angelo.—So far, only the South Reef has
this mine. The North Reef is poor, and, should
the dyke, the loss to the Angelo would not be gr
apt Reef is exceptionally rich, and there is a large amount of ore
developed. But there are only about fifty-five unworked South
Reef claims, and on this reef alone, with no stamps, the mine will
be • worked out in ten years. The dividend should be 80 per cent.
On these figures, based only on the South Reef, the shares, to
yield 7 per cent, interest and redemption of capital invested, are
worth, at a conservative estimate, £5%.
Driefontein.—This is an excellent property, consisting of Driefontein
about 60 unworked South Reef claims. The North Reef in this
mine, too, is poor. There are no stamps and a large reserve
of ore developed. So far as can be estimated, the life of the
mine, on the South Reef, should be twelve years ; the dividend
45 per cent. ; and the shares, on the South Reef alone, on a
7 per cent, basis, are worth £"3-§.
Balmoral.—This property has   only got   North Reef in its Balmoral,
area, and, after years of work, the result, on balance, has been a
loss.    I   do  not   see   much  chance  of improvement, and  would
advise intending purchasers to leave the shares alone:
Ginsberg.—This is rather a sound little mine, and is at Ginsberg,
present working the South Reef. The North Reef has been
located in a borehole, but this is probably north of the dyke,
and may not be found to continue in depth. Assuming that
both reefs exist throughout the mine, but that the North Reef
is as poor as in the Balmoral, the life of the Ginsberg, with
fifty stamps, will be thirteen years more ; the average dividend will
be 35 per cent. ; and the shares may be said to be worth about
■
Witwatersrand.—It is almost impossible to set even an witwaters-
approximate valuation on the shares of this company. It owns a ran "
valuable freehold estate bringing in £"12,000 a year revenue;
five water-rights ; 400 reef claims ; and an excellent surface
equipment ; including 120 stamps. The ore lately developed in
all parts of the mine is stated to be exceptionally good, and the
shares are being eagerly  bought by speculators.
1 w
56
TRANSVAAL.
On the other hand, the past record of the mine has been
exceedingly poor. Even with its increased battery it earned during
1898 very indifferent profits, and up to the time of writing this
(March, 1899) there is little sign, in the output, of the good ore
which is said to be showing in every part of the mine. No doubt,
in these days of the | valuation per claim " fallacy, and the
" flotation of subsidiaries " movement, some wonderful shuffling
of the cards may ere long take place.
As to earning legitimate mining profits sufficient to pay a
dividend on the price of £y to which the shares have risen, i.e.,
£"240,000 a year, I must frankly admit that I do not consider the
mine can do it. As a gamble the shares may be all right ; in the
meantime, as an investment, I do not care to recommend them at
more than half the price.
Glencairn.—So far as is now known this mine also is low
grade, but from the value of the ore being opened out in the
adjoining mines, especially in the deep levels, it should improve
rather than decline. Only no out of 160 stamps are at work;
the excuse given is want of labour. Assuming all the stamps
at work, the life of the mine would be sixteen years more ; the
dividend would average 30 per cent. ; and the shares would be
worth £"2-§.
May Consolidated is opening out, as are all the other mines
in this neighbourhood, distinctly better in the lower levels. Given
a regular water supply, this mine should, in the future, and until it
is exhausted, never again cause shareholders any anxiety.
There are about 26-5- unworked claims ; with 100 stamps
the life will be ten-and-a-half years more ; the average dividend
75 per cent. ;  and the shares are worth rather over £sh
New Primrose.—This mine, as regards aggregate width of
payable ore, has greatly improved in the lower levels. Under
the same management as Glencairn, working costs are low, and
the future should be even more successful than the past has been.
With the present  160 stamps the life, from July, 1899, is fifteen TRANSVAAL.
years; the dividend should ;
are worth rather over £"5.
verage 60 per cent. ; and the shares
Simmer and Jack.—The controllers of this, the largest mine Simmer and
in the Transvaal, are always so busy, either floating off subsidiaries ; or splitting up subsidiaries already floated ; or issuing
debentures ; or paying them off again ; that for an outsider it
is impossible to state at any given moment either the size of the
Simmer ; its debt ; its cash in hand ; the number of shares held
in subsidiaries ; or even the number of such subsidiaries themselves. When the directors settle down to steady work with the
280-stamp mill, which, by the way, they talk of increasing to 320
stamps, they will probably find that the property, fine as it is,
is over-capitalised. Of the one-and-a-half million tons of ore
developed, an immense quantity is of a lower grade than was
ever expected, i.e., it will not yield more than 8s. per ton profit,
and should these poor patches continue in depth, or be found in
other places, as certainly may be expected, it will be a difficult
matter for the mine to  keep up the present yield.
My estimate of the value of Simmer and Jack shares, after
paying off its debenture issue, and allowing ,£1,600,000 as the
remaining value of its outside assets, is £"5 12s. 6d. On a basis
of 320 stamps, this figure would be increased, but the mine, with a
continued shortage of labour to face, is, in any case, an unwieldy
undertaking.
Stanhope.—This little property is practically worked out.    It stanhope,
may scrape together profits, either on its last months of crushing,
or from the sale of its machinery, to pay a shilling or two per share
as a final dividend, but this cannot be expected with certainty.
Geldenhuis Main.—Has ever been an irregularly worked Geldenhuis
mine, and has ever failed to realise the profits which its controllers
have continually predicted. Its life may be anything from four to
eight years more, but I fancy that it will continue to disappoint
shareholders as steadily in the future as it has done in the past.
The shares are not worth 10s. Geldenhuis Estate.—This mine has turned out a splendid
success in every way. Its capacity is now known with something
like exactitude, and is comprised in the following facts :—
Life from ist July, 1899 ...
Average annual dividend to be expected...
Value of the estate
Value of the shares, taking 7 per cent.
dividend, and redemption of capital
invested
175 per cent.
£"100,000.
M
Treasury.—On paper, Treasury shares work out well, and
there is no reason to think that, in practice, the value will be found
to be less. The mine is in an excellent locality, surrounded by
others earning high profits, while the mine itself is now a well-
developed, cheaplyvworked venture. The company holds 5,737
Simmer West shares. The life should be thirteen years ; the
dividend 18 per cent. ; and the value of the shares £6.
Jumpers.—The life of this mine is about six years more,
during which time dividends from ore mined should average 100
per cent. The company owns 11,394 South Nourse shares. The
company holds also 29,188 Jumpers Deep shares, received in
exchange for twenty-three claims, and if it secures bezitrecht on
its further twenty-eight claims, now held as bewaarplaatsen, it will
be entitled, in exchange for these,, to a further 36,662 Jumpers
Deep shares, making 65,850 in all. In this eventuality Jumpers
shares would be worth £S.
New Heriot.—Recently the
especially in the Main Reef, has !
Jue of the ore in this mine,
newhat fallen off", so much so
that an estimated future average dividend of 125 per cent: has
now to be reduced to 100 per cent. On this basis Heriot shares
are worth ,£8.
It must not be forgotten, however, in a mine like the Heriot,
that there are already 400,000 tons of ore developed, and paid for
out of current working expenses.    For the last four or five years TRANSVAAL. 59
of the mine's life, it will have to do no development work, and no
shaft sinking, and nothing need be charged for depreciation.
Under these circumstances it is probable that the Heriot, during
its last few years of life, may pay considerably more than the ioo
per cent, reckoned on.
I   would  instance  the  shares  at  anything  under £"8  as  a
particularly sound investment.
Henry Nourse.—This mine has ore reserves developed for HenryNourse.
several years ahead, and before long all the shafts will have
reached the boundary of the property. The continued good value
of ore in the present mine is assured. The company owns thirty-
nine bewaarplaatsen, which, from their location, will probably be
found to contain poor ore. Setting on these a net value, after
deducting the probable cost of obtaining bezitrecht, of £"i 15s. per
Henry Nourse share, I estimate that the total value of the
property is equal to £10^ per share. The shares at anything
under this may be considered a sound investment.
New Goch.—It is stated with great assurance that the ore New Goch.
now being developed below the big dyke, of which there is already
a large quantity in sight, will yield very satisfactory profits.
Considering the past history of the mine, I cannot persuade myself
that this newly-found patch of good ore is likely to be permanent,
and I consider the shares extremely speculative. There are over
forty unworked ore claims, and sixty heavy stamps, but it is quite
impossible to hazard a guess as to what profits will be for, say, the
first year from the recommencement of crushing.
Spes Bona.—For a long time past the Spes Bona has barely Spes Bona,
earned interest on its heavy debt—let alone profits. The mine
is situated in a locality which has always produced poor ore.
Even assuming a slightly better yield in the future, which recent
assays seem to indicate, I do not suppose that the quantity of ore
remaining in the mine is sufficient to pay off the debt of the
company and dividends of £1 per share, much less can it be
expected to yield redemption of capital invested. 6o
Wolhuter.—The comparative failure of this company to
earn large profits, which up to a year ago were confidently
expected, is due to the fact that the most valuable reef has
become, in the lower levels, a large mass, double its usual
thickness, and carrying only the same aggregate of gold in its
enlarged form, as it did when it was of ordinary stoping width.
This is a serious matter : the reef looks well ; it is of great width ;
regular in its occurrence ; and yet it is only worth half its usual
value. I do not specially instance the Wolhuter, because the
same thing has occurred in other outcrop mines, and will occur
in the deep levels also, but it serves to emphasise the fact that
there are unknown risks, even in banket mining, and that except a
mine has all its ore actually proved, either by its own development, or by the extensive workings of the immediate deep level,
there are undue risks to be taken. In the face of this it is absurd
to state, as many people do, that the shares of a mine like the
Wolhuter, not proved on the dip, and exceedingly patchy, so
far as is known, should be bought to yield 5 per cent, interest. I
consider that 10 per cent, is the lowest interest possible on a mine
such as this, and although my figures given in a table later on
represent a valuation on a 7 per cent, basis, I cannot consider
such a standard warranted.
The only knowledge of the value of the ground below
the Wolhuter and adjoining mines, is gained from the
Bezuidenville borehole, which cut through the reef at 3,251
feet. The ore was very poor, and was interspersed, very
curiously, with layers of white quartz. Of course, one borehole,
sunk to locate the reef, not to gauge its value, is no criterion
for the valuation of a mining area, but it serves to emphasise
the fact that an outcrop mine not proved by the workings of an
immediate deep level, is more or less of an unknown quantity, and
must not be bought to yield 5 or even 7 per cent.
In the Wolhuter, the eastern ground, under the Spes Bona, is
opening out rather well. Small patches of better value occur also
here and there in the principal workings, and help to keep up the
present average.    On the whole, however, the mine  is still  an TRANSVAAL. 61
unproved quantity, and the shares, although theoretically reducible
to a fixed valuation, are decidedly speculative. On a 7 per cent,
basis their value works out to .£5 12s. 6d.
Meyer and Charlton. A low grade mine, but with excep- Meyeï
tionally low working costs, and a steady dividend payer. The Charlt
company owned a small block of deep-level claims, divided from
its present mine by eight claims belonging to the Wolhuter.
These eight claims the directors recently bought for the Charlton
for ,£105,000—a sound purchase, consolidating the area of that
mine, and considerably prolonging its life. In addition the
Charlton owns nine bewaarplaatsen, but these are some distance
away, and if bezitrecht is granted to them, they will be
incorporated in a deep-level company.
The Meyer and Charlton, with its present eighty stamps, has
a life of ten years more ; it should pay an average dividend of
85 per cent., and its shares, to those satisfied with 7 per cent,
interest, are worth £6\.
City   and   Suburban.—There   are  two  outstanding points city a
of interest in this mine at present, both,  too,  of an unpleasant
nature, and accounting entirely for the disappointing results which
shareholders have had to face.
The first is the fact that, at the eighth level, an extensive
layer of rock, widening at the fourteenth level to 100 feet thick,
has forced itself in between the Main Reef and Main Reef
Leader. The consequence of this is that the Leader, always
hitherto a reef of value, has been, in places, squeezed out of
existence, whilst its aggregate value, between the points
mentioned, has fallen to almost a minus quantity.
Notwithstanding this great loss of ore—equal to a two
years' supply, the reserves in the mine now stand at half-a-million
tons, paid for from current profits. A slight improvement is
noticeable in the value of the Main Reef Leader in the lowest
workings, but it is probable that this intrusive rock will continue to
do great damage. 62
The  second  fact, and an  equally serious one,  is that, just
. as in the case of the Wolhuter, the principal reef in  the mine,
the South Reef, has become in the lowest levels a mass of ore
seven feet thick, and containing no more gold in the aggregate
than it did when only three feet thick.
Like the Wolhuter, the City has no deep level on the dip at
work, and shareholders are quite in the dark as to what the value
of the ore is between the present bottom level of the mine and the
boundary. There are, of course, especially on the west side,
undoubted rich patches of ore, but the whole average of ore now
being opened out is distinctly low grade. The policy of the
company, seeing that the Main Reef Leader is now producing so
little ore, is at present to mine a larger proportion of South Reef
than in the past. In the upper levels, where this will be stoped
during the current year, the South Reef still maintains a medium
width, and is of good value, but I am afraid that in future years,
unless a change again takes place, a falling off in profits must result.
I have allowed for an average dividend of 15 per cent., which errs
probably on the side of optimism, for a life of twenty years and
have consequently, including the value of the company's township,
placed a value on the shares of £"6 7s.' 6d.
Jubilee.—A correct estimation of the value of this mine must
take into consideration the value of its various outside holdings.
These comprise |—
(a.) Village Main Reef shares       £"10,000
(b.) 4-^ bewaarplaatsen ... ... ... 27,000
(c.)  15-5-   bezitrecht   claims—Wemmer    Pan        93,000
: being sold for 25,173 shar
!th City—less a liability of -£12,586.     The
be sold to the Suburban Deep).
H
!O,O0O
equal to ,£2-f for each Jubilee Share.
When we add to this a life of seven years more for
with'a yearly dividend of ioo per cent., we get a total
of £y\ per each Jubilee share. These shares are undo
good purchase.   Salisbury.—This company's assets comprise :— Saiis
(a.) Mine dividends of 40 per cent, for 6|
years more. £"2 a share.
(b.)  WÊ bezitrecht claims—Wemmer  Pan     £"93,000
(Part of these are being sold for 25,173 shares in
the South City—less a liability of £12,586. The
rest will be sold to the Suburban Deep).
(c.) 2 bezitrecht claims      ... ... ... 24,000
(d.) 4 bewaarplaatsen ... ... ... 20,000
(e.) ||| bewaarplaatsen       ... ... ... 21,000
£"158,000
The   whole   is equal to  a valuation  of £3% for each   Salisbury
share.
Wemmer.—This mine has a further estimated life of y\ years, wei
crushing   with   seventy   stamps ;   during   that   period   it   should
easily pay an average dividend of 190 per cent.
In addition the company owns the following :—
(a.) 36,226   Village   Deep   shares   with   a   contingent
liability of £"60,092.
(b.) A water-right,  which,  when  bezitrecht is obtained,
will leave a profit to the company of -£50,000.
(c.)  11  claims, bewaarplaatsen.
(d.) 8 claims, bewaarplaatsen.
The total value of the mine and these  other assets  comes
to the handsome valuation of -£144 per share.
Ferreira.—The future of this mine has been calculated to Fer
a nicety.
For the next four years or so, milling with eighty stamps,
a larger proportion of the rich South Reef, it will earn dividends
of 300 per cent. After that the company will take over the
forty stamps of the Worcester mine, which, by that time, will
be worked out, and milling then a larger proportion of the poorer 64 TRANSVAAL.
Main Reef, but with 120 stamps, will still continue to earn
dividends of 300 per cent. So far as is known, then, and in a
mine proved as this is, there is no fear of a falling off in the
value of the ore—the mine will pay 300 per cent, for eleven
years more, and will then be worked out.
The following assets are
also held :—
6 bezitrecht claims,
worth
£"240,000
6 bewaarplaatsen
150,000
2 bezitrecht
14,000
11  bewaarplaatsen
33,000
£"437,000
or, equal to nearly £"5 per share.
On the 7 per cent, dividend basis, Ferreiras are worth,
on July  1st,  1899, £2&\—all assets included.
Worcester.—This mine will be worked out in from three to
four years more. It will pay 60 per cent, dividends till then,
and as it owns several valuable bewaarplaatsen and other
assets, the shares may be considered as worth over  -£3.
The company is contemplating a transference of its operations
to a mine at De Kaap. On this venture it may lose money—or
it may spend on its equipment a lot of the money which would
otherwise be devoted to dividends.
Robinson.—This is the leading mine in South Africa, and
has paid in dividends, to the end of 1898, £"2,630,937.
Apparently its future will be even greater than its past. By
the end of this year (1899) there will be 200 stamps at work.
There are still ninety-nine unworked claims, and a life of quite
fourteen years more may be expected. The Robinson Company
owns 60,119 shares in the Robinson Central Deep, received
for 6-L claims.
The value of Robinson shares on a 7 per cent, basis is
if! TRANSVAAL. 65
Johannesburg Pioneer.—This mine should be finally worked Pior
out  during  1899.     Its valuation   as at July  1st   next should  be
approximately :—
(a.) Mine dividends, yet to come    ...        £"2 per share.
(b.) Slimes in hand   1    „
(c.) Value of Main Reef, which may
be sold to an adjoining company (say) 1    ,,       ,,
With   these   points   to  guide  him,   the  investor  should   be
able to set for himself a valuation on the shares.
Crown Reef.—This mine, from July, 1899, has an estimated Cro
life of five years, and during that period may be expected to pay
average dividends of 240 per cent. An enormous dividend
such as this, as I have already explained, is the result of the
ending of all expenditure upon capital account, shaft sinking,
redemption of plant, and development of ore—equal to,, in the
case of the Crown Reef, probably £"100,000 a year. All these
expenses will cease for several years before the mine is worked
out, and of course will be reflected to the full amount in the
dividends.
In addition, the Crown Reef mine owns fifty-one deep-level
claims, held by bezitrecht, and 42-^ bewaarplaatsen claims—worth
altogether, on present valuation, £6\ per share.
Taking all this into consideration, Crown Reef shares are
worth £"i5-f.
Langlaagte Estate.—The aggregate width of reef now Lan
worked in this mine, and at a very low cost, is sixteen feet.
There are, approximately, fifty-four unworked claims, and on
the present stamping capacity—200 heads—the mine will last
for sixteen years more. An average dividend of 35 per cent,
should be possible, and including the company's holding in such
doubtful ventures as Langlaagte Exploration, Langlaagte Star,
and Block B, the shares may be said to be worth £3 12s. 6d.
Langlaagte Royal.—This   mine   is   now   shut   down,   and Lani
heavily in debt.    The reefs in this property at a shallower point Royi fff
66 TRANSVAAL.
were highly payable, but in depth they became poor, and there
is now a very large quantity of unpayable ore developed on
all the lower levels. It is possible that an improvement might
be found if the mine were developed still deeper, but it has
been such a disappointment, and the company is so heavily in
debt, that those in control are naturally afraid to take such
a risk.
The shares are entirely speculative.
Paarl Central.—Month after month this mine yields returns
which show no actual loss, but which are not sufficient to pay
more than interest on the company's debt, which stands at
•£60,000. The locality in which the mine is situated contains
persistently low grade ore, and there seems little probability
that the mine will be really successful. There are about forty
unworked claims.
Langlaagte Proprietary.—A very low grade mine, held
by French shareholders, and now shut down. It is possible
that this mine might pay on a small scale if well handled.
Langlaagte Block B.—This company's ground carries
exceedingly low grade ore throughout. The mine has always
earned sufficient profit to pay a dividend on its 82,500 8 per cent,
preference shares, but until 1898 never paid on its ordinary
shares. The ore is treated most economically. The mine has
a long life, and the company owns 125,000 shares in the
Langlaagte Exploration Company. In spite of these facts the
shares are not a good speculation.
New Croesus.—Very low grade. Recently reconstructed.
An attempt, for the fifth or sixth time, is again being made to
run this mine at a profit.
Langlaagte Star.—Another very low grade mine, which
is now working without a profit. Readers will note that there
is a large patch of the Main Reef series here which is barely
payable under  any  circumstances.    The mines situated  on this TRANSVAAL. 67
patch are Langlaagte Royal, Paarl Central, Langlaagte United,
Langlaagte Block B, New Croesus, and Langlaagte Star, and
would-be speculators should form a resolution not to invest in
this group of mines under any circumstances. Beyond this
area westward a slight improvement in the value of the reefs
takes place.    The next mine is the
Main Reef Consolidated.—Such a mine as this, holding a Main Reef,
freehold estate, and over 600 reef claims, becomes a favourite
speculative counter during a strong market. To begin with,
the mine itself, or rather such portions as, have been exploited,
has turned out quite successfully. It is, of course, low grade,
but there is one stretch of reef proved payable for 3,000 feet
in length, and this is continuing good in the deepest workings.
It is, however, due to the fact that the company will issue two
subsidiary companies, that speculators so eagerly buy Main Reef
shares. The fascination of being able to print new scrip, whether
the areas of ground represented by such scrip be good or bad,
is too much for the speculating public, and it readily succumbs
to what may be described as the " fascination of the subsidiary."
I have calculated that under the most favourable circumstances the Main Reef Consolidated and its two subsidiaries
will commence to earn, four years hence, aggregate profits equal
to a dividend of 9 per cent, on the present capitalised value of
Main Reef shares—standing as they now do at 55s.
New   Unified.—If this  mine were properly  equipped,  it   is New Unified
quite  probable  that   it   would   become  a regular  profit  earner.
To pay off the debt, and to erect a new mill and sorting-tables,
would   require   £"120,000,    which   sum   I   consider   shareholders
would be justified in supplying.
Aurora  West United.—There are   130,000  tons  of South Aurora west
Reef   ore   developed,   and   80,000  tons   of   Main   Reef.      The
latter is unpayable,  but the  South  Reef should yield profits of
1 os. per ton.    The main problem for this mine, which is soundly
managed, is careful ore sorting, and there is good reason to think that profits of £"30,000 a year can be earned with the present stamping power.    As an investment, the shares at £"2 are too high.
Bantjes.—The company owns an estate, and a very large
area of ore carrying ground. More money is required for
development, but results to date warrant neither the erection
of a battery, nor—a much more serious matter to speculators—
the flotation of any subsidiaries. The future for this company is
entirely problematical, and the shares are a doubtful speculation.
Vogelstruis Estate.—Two years ago, when the battery of
this mine was shut down, it was assumed that the working of
the unoxidised ore would not leave a profit. Since that time,
however, working costs have become less, and a slight improvement in the value of the ore at the bottom of the mine
is noticeable. The shareholders have raised .£100,000 on
debentures, which money is being devoted to further development of the mine, and to the erection of further necessary
plant. It is now thought that the company, on resuming
crushing,   may  be able to  make   small profits.
Kimberley Roodepoort.—Tl
far, the mine has
nion, however, as
were paid off,  the
but the ore is exceedingly low grade,
never earned regular profits. I am
in the case of the Unified, that if the
mine developed for a year ahead, and a new mill and sorting-
tables erected, the mine would pay. To this extent I consider
shareholders would be justified in raising ,£150,000, but the
control of the mine should be in more energetic hands than
has previously been the case.
United Roodepoort.—A year ago this company was in a
ious position. The shares were standing at ,£4 in the market,
: the mine, owing to its short life, could not have returned
re  than   £"2   10s.   in   dividends.    With great  thoughtfulness,
of
1 their r
,ith forty-
rt   Dee]
ght inta
the.
fo
<%_ TRANSVAAL. 69
block of over ioo deep-level claims, to be amalgamated with the
United. The Roodepoort United has now a life of eight years,
with no stamps. An average dividend of 60 per cent, per
annum should be earned, and, assuming that the deep-level
block of claims is worth £"375,000—a rather excessive valuation—
United shares work out as worth £"5.
Durban Roodepoort.—This has been one of the best Durban
managed and most regular profit-earning mines on the Wit- Ro° epoort
watersrand. But, as in the case of all these mines, there is
strong evidence that the investing public has entirely forgotten
to make allowance for the redemption of the capital invested.
Durban Roodepoort has a further life of six years. During
that time it will pay an average dividend of 125 per cent. In
order to yield 7 per cent, interest and redemption of capital
the shares should stand at £5%.
Princess Estate.—The reef in this mine is a mere stringer Princess.
of banket, an. inch thick, but it is payable, nevertheless, and
were it not for the fact that the formation is broken by an
endless series of faults, the mine would be a regular dividend
payer. There is a large . area carrying ore, and the company
owns an estate which, from claim licenses and water-rights,
yields a revenue of £"8,000 a year. A scheme of active development to expose ore for several years ahead is necessary, and
there is good reason to think that the mine may yet become
fairly successful. In the meantime, the shares have not yet
passed out of the speculative stage.
Roodepoort West.—A reconstruction of the Banket mine.  The Roodepoort
reef is narrow, but of good value.    The formation is badly broken
all through the mine, and the area of South Reef is very small.
The shares are entirely speculative.
It is in the neighbourhood of this mine that the Roodepoort
break occurs, which throws the continuation of the Main Reef
series several miles to the north-west. The continuation is
again picked up on Grey's Mynpacht. Grey's Mynpacht.—A low grade, badly controlled mine,
that promises to come to grief at an early date.
i Rand. French   Rand.—The   French   Rand   is   usually  spoken  of
as a deep level. As a matter of fact the principal workings,
and the richest ore, found are on the dip of the Champ d'Or,
but the company also owns a lot of outcrop ground. In all
there are 400 reef-bearing claims, but it is very doubtful whether
more than one-half of these will be found to carry payable
ore. There are now 250,000 tons developed, which will give
an average yield of 38s. per ton, leaving 10s. profit. It is
intended to increase the battery to 120 heads, for which purpose
a total debt will be incurred, including the present debenture
issue, of ,£270,000. Even with 120 stamps at work, assuming
the present defective labour supply can be overcome, profits will
hardly be such as to warrant investors buying the shares at £"2.
pd'Or. Champ d'Or.—From July, 1899, the life of this mine should
be \\ years, and the average dividend 50 per cent. This makes
the  shares worth £t.\.
;0r. Windsor.—This mine has turned out unexpectedly successful,
but not enough is yet known of it in depth to warrant the shares
being classed as a sound investment.
ard's • Luipaard's   Ylei.—An   estate,   bringing   in  a   revenue   of
£"8,000 a year from claim licenses, and an immense number
of reef claims, carrying particularly low grade ore, are the
company's assets.
Time after time the company has been reconstructed, and
time after time it has failed to pay. The directors have now
definitely decided to adopt a dry crushing process for their ore—
this despite the fact that all previous experiments of a similar
nature on banket here have failed. I see no reason to assume
that Luipaard's Vlei, with its low grade ore and dry crushing,
will not again proceed to reconstruction in, say, 1902, 1904,
1-906, and so on. York.—Apparently the York mine has a life of from seven York.
to  eight  years  only,  and,   as   its  profit-earning  capacity   is  exceedingly  small,   it is doubtful  whether it will pay off the par
value of the shares.
West Rand Mines.—The small scale of operations undertaken West Rand,
by this company is out of proportion to the vast area of ground
owned. Already, however, there is a debt of £"60,000, and at
least £"100,000 in addition is necessary to put the mine on a
solid basis. Eventually, patches of payable ore should be found,
but the company is over-capitalised already, and by the time it
has suffered reconstruction, present shareholders will find that
their original shares have cost them a price which it will be
difficult to recover.    The present shares are a fair speculation.
West  Rand  Central.—A  small,   London   controlled mine, west Rand
which is  not likely to pay much more than working expenses.    entra '
There are twenty-nine claims.
Randfontein Subsidiaries.—This group of mines, the most Randfontein
westerly of any on the Main Reef series, I deal with under
one head. It is the boast of those who control these mines
that all information about them is withheld from the public.
The public, to show its appreciation, eagerly buys Randfonteins
and Randfontein subsidiaries on the first sign of a rising market,
and speedily absorbs, without verification, any information which
it may suit the controllers, at stated intervals, to put forth.
Needless to say, the public has, again and again, lost heavily
over these mines, but its gullibility is still unlimited.
The disregard of public opinion shown continually by the
controllers of the Randfontein mines only serves to heighten
the desire for possession of the shares. The accurate knowledge
of this phase of human nature possessed by the controllers of
Randfontein, and used by them to such advantage, is the envy
of mining men in Johannesburg, and though I cannot endorse
such a policy from the point of view of the public, I cannot
but admire the astuteness of the gentlemen concerned. il
To descend to facts :—
Of the subsidiaries, Porges Randfontein pays an occasional
dividend of 10 per cent.—averaging rather less than one a year.
The company owns 200,000 South Randfontein shares.
South Randfontein.—Recently commenced to crush, and
has paid one 10 per cent, dividend. It appears to contain good
ore.
North Randfontein.—After working for several years at
a loss is now shut down.
Robinson   Randfontein   is   \
company holds 400,000 Block A
;har
dng   without   profit.
Mynpacht   Randfontein,   and   Block   A   Randfontein.—
Floated several years ago, have not yet reached a producing
stage, and both were, at a recent date, shut down.
All these mines own large claim areas, but are poorly
equipped, do not practise ore-sorting, and as can be easily seen,
have not proved in the aggregate successful.
Recently, six more subsidiaries were floated. This, I believe,
was done to evade a certain alteration in the gold law which
is about to come into force. I cannot ascertain that these
mines have any working capital to speak of, so consider that
they are not worth discussing. A further large batch of flotations
( is promised. Recently a new reef was found on Randfontein
which, it is assumed, traverses all the mines. It is reported
that this reef is of considerably good value, and that the prospects
of all the mines are much improved thereby, but I believe I am
right in stating that this reef, although good in places, is not
consistently payable, and that not nearly enough work has
been done on it to warrant any exaggerated assertions as to
its value.
On the whole, probably, the new reef will be found to be
an asset of value to a certain extent, but the general condition
of the Randfontein mines is such that a genuine improvement
must take place before they shall have become reasonable
speculative ventures. When the Witwatersrand banket beds were discovered, in Deep
1885, expert opinion varied exceedingly as to a diagnosis of
their nature. Indeed, for some years after that, all knowledge
as to their composition was purely empirical. After 1890,
however, it gradually became apparent that these reefs had
been laid down by the action of water, that the gold contents
would, therefore, be distributed, and that they were likely to
extend to a great depth. As all these facts were exactly borne
out by practice, and as the reef dipped towards the south, Thei
it was at once evident that all ground lying to the south, which, tion-
except for the first thousand feet or so, had been reckoned as
worthless, was in all probability underlaid by the reef, and,
therefore, of great prospective value. Most of the mines then
in existence had only secured about 1,000 feet of ground on
the dip of the reef, and all ground beyond that, henceforth
known as deep-level areas, was at once snapped up by capitalists,
proprietary syndicates, and such of the outcrop mines as had
time to grasp the future possibilities of such areas.
We  now  return  to a  discussion of the theories which had
led to this rush for deep-level ground.
A banket reef or bed is a conglomerate of white quartz Geo]
pebbles cemented together by a mixture of silica and sand,
thickly sprinkled with pyrites, and in which mixture the specks
of gold, although seldom visible to the naked eye, are found.
This conglomerate was originally laid down on the bottom, or
perhaps only on the sloping beach, of a great inland sea. The
white pebbles were probably the remains of earlier quartz reefs
which had been broken into fragments and finally became
waterworn. During this process, most of the gold contained
in the quartz fragments became liberated, and, in countless
specks, by the ceaseless washing of the tides, became distributed
throughout the whole bed. In course of time the detritus being
washed into this particular sea ceased to contain quartz fragments,
so that another layer, containing no quartz and no gold, became
deposited on the top of the pebble bed. In the course of ages
by the deposition  of layer upon  layer of sand, the pebble bed is found to be lying several thousand feet below the bottom
of the sea, cemented into a compact mass by pressure from
above, but still containing the countless specks of gold distributed
throughout, and ready for the eventual and profitable use of
still uncreated man. In the course of time, by ordinary geological
processes, the sea, having fulfilled its particular destiny, flowed
elsewhere. As to the final geological process, science is at
present in the dark. How has the edge of the pebble bed been
again brought to the surface ? Was the bed originally the
bottom of the sea, and has it been tilted up by a great convulsion
of the earth, or was it originally the beach of the sea, and at
present lying not much out of its original position ? The question
is deeply interesting ; but the fact remains that, in 1885, the edge
was found sticking out at the surface, and since then mining
operations and boreholes have proved that the bed extends
without any real break to a vertical depth of nearly 4,000 feet, and
that its slope, excepting near the surface, is wonderfully regular.
But all these facts, especially the proving of the reef to
great depths, have only been gradually elicited. Shortly after
1890 the best expert opinion foretold, with wonderful accuracy,
the finding of the reef in depth, and the extreme probability, owing
to its being deposited by water, of the gold contents being just
as large at any given depth, approximately, as at the surface.
It must be borne in mind that, since the discovery of
the Rand, and particularly as regards the question of deep
levels, gold mining knowledge has had to be largely readjusted.
The previous history of deep gold mining consisted almost
entirely of quartz veins, which originally in molten masses
had filled the cracks and fissures in the solid rocks.
In reefs of such nature it is usual to have small rich
patches, in which the concentrated gold, or gold originally held
in solution, has settled, and for the remainder of the mass to be
worthless. With reefs of such a treacherous nature, to sink a
shaft of 1,000 or 2,000 feet on chance, would have been a
dangerous experiment, so that deep-level mining, up to the days
of the Rand, was almost an unpractised science.
L^ Most of the leading gold mining experts of the world have
visited the Rand. Their opinions, some of them formed at
a time when there were few data to go upon, are unanimously
in favour of the accepted theories, that is to say, of the continuation to great depths of the reef ; of the reliability of its gold
contents at any given depth ; and of the sound nature of mining
operations connected with its exploitation. And with all this
body of expert opinion, entirely favourable to deep-level enterprise, and various facts, such as the finding of the reef in
boreholes, becoming known, we may consider the theories
originally held about the deep levels of the Rand to be
satisfactorily confirmed. The theory as to the permanence and Theperma-
value of the reef in depth justified the sinking of large sums kvds esftab^P
of money, and was, at an early date, confirmed by actual facts. lished-
We have now to inquire if the original theories have been
fully borne out by results during the last five years, and
therefore to judge whether deep-level mining is a scientific, sound,
and profitable operation.
Although, speaking generally, the gold contents of the whole
banket bed were supposed to be evenly distributed throughout,
it was surmised, and correctly so, that the deep-level areas
directly below the richest outcrop mines would be richer than
those beneath the poorer outcrop mines. It also applied that,
where the outcrop mine was little disturbed by faults and dykes,
the deep level of the same mine would also probably be comparatively free from such disturbances. With these points in
view, the earliest deep-level mines floated were those directly
underneath the richest and least disturbed outcrop mines.
In 1892, a large deep-level proprietary company was floated, Rand Mines,
the Rand Mines, Limited. It held 1,800 claims, selected with
great forethought directly beneath all the richest and least
broken outcrop mines. Several boreholes were sunk, notably Boreholes,
on the dip of the Geldenhuis and Crown Reef mines, cutting
the reef exactly where predicted, and half-a-dozen subsidiary
deep-level mines, each with from 150 to 200 claims, and
each  with   several   hundred   thousand   pounds   working   capital, were floated. By this time all the deep-level area on the Rand
which was thought to contain the reef even at the extreme
depth at which mining could be carried on, was pegged out,
and claims in favourable and unfavourable localities were bought
and sold for thousands of pounds each. Boreholes were sunk
outside of the central and richest portion of the Main Reef,
cutting the lode in almost every case, and further companies
were floated and financed in the same lavish manner. In 1893,
by far the deepest borehole yet sunk, struck the reef a long
distance below the then boundary of the Simmer and Jack mine,
at a depth of 2,385 feet. As the engineers of most of the
already floated deep-level mines estimated that the reef would
run out of their ground at a depth of not more than 2,000 feet,
it at once became evident that a second row of deep-level mines
could be formed to work the still deeper areas, which, owing
to the flattening somewhat of the banket bed, still lay within a
practical mining depth. To this end the Gold Fields Deep
Proprietary Company was formed, and its financing was guaranteed
by the Consolidated Gold Fields of South Africa, Limited. As
if to justify this further great undertaking, which involved the
sinking of millions of capital, the reef was again struck, in 1895,
on the dip of the Meyer and Charlton mine, in the centre of
the Rand, at a depth of 3,251 feet. This, until recently, was
the deepest borehole ever sunk in the Transvaal, and it has
proved, almost to a certainty, that enough of the pebble bed
lies under the Witwatersrand to last for forty years to come.
It was soon discovered, as the deep-level operations
proceeded, that the natural conditions for deep-level mining
on the Rand were distinctly favourable. There are four drawbacks to deep-level mining.    These are :—
(1) Loss of value in the ore. (2) Broken ground. .
(3) Water. (4) Heat. . j
Owing (1) to the water-laid origin of the reef, it was almost
certain that the gold contents would not become poorer in depth.
In   the   aggregate   this   theory   has   proved   correct.      Particular areas of deep-level ground have proved unexpectedly poor ;
other areas, however, have proved to be good ; but the average
deep-level ground has proved to be about equal to the average
outcrop ground.
With regard (2) to broken ground, such exists in all mines, Broken
and few mines on the Rand are free from faults;   but,  on the gr°un '
whole, the faults   in  the   deep  levels,   although   more   frequent
than in the outcrop mines, have been found to be easily traced,
and are not reckoned as a serious factor.    The  rock formation
(3) is so regular that a comparatively small amount of water finds Water,
its way  into the deepest workings when they have once  been
pumped dry of the water tapped during shaft sinking.
Finally   (4),   the   increase   in  temperature   is   found   by  ex- Temperate
périment to be not more than   1   degree in  200 feet,  and there
is   no  reason   why   the  temperature,   with   a  formation   of solid
sandstone, should debar mining operations at, at least 6,000 feet.
The experience gained by the working of the outcrop mines Experience
is another point which the engineers of the deep-level mines outcrop.0"
have in their favour. In the outcrop mines millions of pounds
have been spent needlessly upon inferior machinery and installations, upon useless shafts, and upon the tracing of lost
portions of reef. In the deep-level equipments the most perfect
and efficient machinery is used from the commencement, no
useless shafts are sunk, and the tracing of faulted patches of
reef, with the plans of the outcrop mines as a guide, is a work
of comparative simplicity.
It may indeed be accepted with perfect confidence, that, Working
except in the very deep levels, the working expenses will be
no more than those of the outcrop mines. In the deeps there
will be a rather higher cost for dynamite, owing to the harder
nature of the ground ; for labour, owing to the flatter reef
necessitating more shovelling of the ore ; and, for coal, owing
to the greater depth from which the ore has to be hoisted ;
but these are mere fractional .increases, and are easily balanced
by the economy effected by a finer equipment and a more
compactly planned surface plant. m
78
badly cut up
by dykes and
TRANSVAAL.
It is now necessary, after so much praise, to point out
several matters which, to the genuine investor, represent the
weak side of the question. As we have seen, the early floated
deep levels were specially selected with regard to their proximity
to rich and little disturbed outcrop mines. As the demand
for shares increased, however, company promoters turned their
attention to the deep-level ground of the poorer and more
broken mines, with the result that some deep-level mines were
floated which should have remained uncapitalised until mining
conditions in the Transvaal had improved. There is no doubt
that these mines will contain the reef, but it is doubtful at
present whether it will pay to work them. These mines will
be specified in due course.
Secondly, there is the question of individual mines being
badly cut up by faults and dykes. These mines, also, will be
specified. As has been stated, the general question of disturbed ground in the deep levels is not a very serious one. On
the whole, the disturbances are not more serious than in the
outcrop mines, and are more easily traced. It so happens,
however, that at from 800 to 1,200 feet deep the banket bed,
which near the surface lies at a steep angle, here flattens
considerably. The result is that at the change of angle there .
are, in some localities, patches of badly disturbed reef, and
these patches have been encountered by the development work
of several of the deep-level mines. As a matter of fact, these
disturbances, about two years ago, gave rise to some anxiety,
but subsequent workings prove that as the reef assumes, in
depth, its normal angle, the disturbances die out, and the
position generally is now much better than it was at that date.
The result is, however, that certain mines have had to spend
more money in development work, and have been somewhat
retarded in reaching a producing stage. Then, again, there
is the question of faults or dykes, at present unknown,
that may be encountered deeper. This, of course, is a risk
connected with all mining, but a special example may here be
cited.  w TRANSVAAL.
Two years ago the Simmer East Company, a second row Simmer East
deep level, sunk a borehole and expected to cut the reef at
2,800 feet. Instead of this, it was found at 1,830 feet, having
been thrown up, by a fault, a distance of nearly 1,000 feet.
This may turn out eventually to be a fortunate circumstance
for the Simmer East Company, and, indeed, should the fault
extend laterally, for a number of the second row deep-levels ;
but at the same time, it shows that serious faults are to be
expected even at a great depth, and that the deeper mines
will have to carefully locate the reef by boreholes before
commencing work. These remarks do not apply so much to
the first row deep-levels, in which it is very unlikely that there
are any faults of such a nature.
Thirdly, there is the question of Kaffir labour. Owing scarcity of
to lack of organisation of the great sources of labour on the
East Coast, the Kaffir labour supply on the Rand has rarely
been equal to the demand. Unless something is done almost
immediately to remedy this, the question will become a serious
one. A number of the biggest deep-level mines have started
to crush with from 100 to 200 stamps, but there seems little
likelihood of these mines being able at present to secure labour
for more than three-fourths of their capacity. The question
will remain a serious one until the Transvaal and Portuguese
Governments and the Rand Chamber of Mines come to terms,
and then it will be settled with little difficulty.
But   the   financial  question  is   really  the   most   important The financial
affecting  the  deep  levels.    In   this  respect  the  position   is  in- iuesion-
comparably  sounder  than   it  was  at  the   end  of  1897,   and  is
undoubtedly  one  of the  principal  factors   that  has  caused  the
recent great rise in the values of deep-level shares.
To fully equip a first row deep level for 200 stamps, and Cost of
r 1 equipping a
to develop from  500,000 to   1,000,000 tons of  ore,  costs about first row deep.
£"540,000 ;   while   the   nine   first  row   deeps   controlled by the
Rand   Mines,   Limited,   spent  on  an  average  £"500,000  before
they commenced to return any profit at all. 8o TRANSVAAL.
To equip a second row deep level for 200 stamps, and to
develop from 500,000 to 1,000,000 tons of ore ahead, will cost
about -£650,000. While in addition the working capital paid
in will be lying for a longer period without earning interest.
To equip a third row deep level, in a similar manner, with
shafts varying in depth from 4,000 to 5,500 feet, will cost,
probably, a minimum of -£750,000. No mines in this category,
although several have been floated, have yet arrived at such
a stage of development that any accurate data as to costs, or
as to engineering problems, are possible.
As regards the question of deep-level finance, I think we
may take it that every well located reasonable mining proposition
on the Rand—such is the strength of the financial groups behind
these concerns—will, in the future, be provided with the necessary
cash for its development, from time to time as required.
There are at present (March, 1899), forty-seven deep-level
mines on the Rand.
Of these fifteen have already received all the money which
they will require.
■ Of the remaining thirty-two mines, which will require
additional cash to the extent of £"11,590,000 exclusive of other
sums being-• provided for new flotations—twenty-two will, in all
probability, be satisfactorily financed during this and  next year.
The remaining ten mines will probably be furnished, from
time to time, with enough cash to cut the reef and do some
development work, but most of these mines are in bad localities,
and may never arrive at producing stage.
The following account of the individual deep levels contains
practically all the facts about these mines that appeal most
strongly to investors.
The summary is prefaced by a table of these companies,
giving the following particulars :—
(a.) Control. (/;.) Issued capital.
(c.) Debt. (d.) Further cash required.
(e.) Remarks as to   the financial position. MINES SITUATED ON  THE  MAIN  REEF
Statement   as   to   the   Fina
ÎRIES.—DEEP LEVEL MINES.
ial   Position.
V Geldenhuis Deep
Crown Deep   ...
Rose Deep
Glen Deep
Jumpers Deep...
Langlaagte Deep
Nourse Deep  ...
Durban Ro'depo'rt I
Ferreira Deep ...
South Rand    ...
South Nourse ...
Robinson Central
Village Main Reef
Village Deep  ...
Bonanza
Angelo Deep  .
540,000
400,000
377>542
435>°°°
450,000
460,346
375.°°°
392>5oo
I 375,000
35**900   2
412,739
381,000
West Roodepoort Deep   227.
City Deep
South City      ...
Suburban Deep
Wolhuter Deep
South Wolhuter
Klip Deep
Witwatersrand Deep
Knight Central
Driefontein Deep
Vogelstruis Deep
B Robinson Deep
Simmer and Jack East
Simmer and Jack West
South Rose Deep
South Geldenhuis Deep I 322,000
Rand Victoria ... ...    631
Rand Victoria East
Knight's Deep...
Jupiter
C  Cinderella Deep
Steyn Estate   ...
Roodepoort Central
South Village Deep
Bantjes Deep ...
South Randfont'in Deep I 225,01
South-East Rand Deep   | 2oo,o<
Kleinfontein Central ... I 225,01
Chimes Mines... ...    325,o<
Langla'gte Block B Deep     75,o<
East Roodepoort Deep   170,0*
-
Debentures Redeemable by Annual Dra
ie Reserve Shares to Liquidate Debt,
n Reserve Shares to Redeem Debenture
650,000
500,000
n Reserve Shares to Redeem Debentures.
n Reserve Shares to Redeem Debentur
n Reserve Shares to Redeem Debentur
n Reserve Shares to Redeem Debentures
Option on Reserve Shares to Redeem Debentur 82
Geldenhuis Deep.—Area, 188 unworked claims on the dip of
the Geldenhuis Estate. Commenced crushing in 1895 with 100
stamps. At that date the mine was not properly opened up,
and the labour supply was inadequate. This necessitated, in
order to keep the stamps at work, the milling of hurriedly mined,
unsorted ore. For a year, the returns were very poor and were
unfairly quoted—this being the first deep mine to start work—
as a criterion of the value of deep levels generally. When the
mine was got into proper order, when the management took due
cognizance of a rich leader which was being left behind on the
wall of the stopes, and when the ore was carefully sorted on
the surface, a great improvement took place. The stamping
capacity was gradually increased until the whole 200 stamps
were at work, and for two years now the profits earned have
been exceptionally high.
In 1898, the company paid 75 per cent, dividend, and
possibly 100 per cent, may be paid for 1899. As there are
a million tons of ore in sight, of the present average value, it
is safe to assume that a dividend of about 100 per cent, may
be expected with regularity. Owing to the unusually large reef,
an additional sixty stamps may be erected shortly, which would
add considerable value to the shares.
The life of the mine, with 200 stamps, would be about
twenty years, and oil a 7 per cent, basis, the shares are
worth   £"10.
Crown Deep.—Area, 157 unworked claims, the deep level
of Crown Reef and Bonanza. The capacity is now 200 stamps,
at which figure it is likely to remain. There are about 800,000
tons of ore developed. So far as is known this will yield about
40s. per ton. The estimated average of the mine, at an earlier
stage, was from 45s. to 48s. per ton, and to this extent, that is
to say, of earning from 5s. to 8s. per ton less than was expected,
the mine has proved disappointing. But even as it is, a profit
of almost £1 per ton can be relied on—from ore in sight—for
years to come, and the mine on this basis takes its place as one of the best on the Witwatersrand. A better average value may
be secured when the eastern workings of the mine open up the
rich ore coming from the Bonanza and Robinson—this, indeed, is
probable. The mine is badly cut up by dykes, which do not
interfere with the actual existence of the reef, but add to the cost of
development. The life may be placed at eighteen-and-a-half years.
The company holds 113,384 Robinson Central Deep shares;
including these shares, the value of Crown Deep is about £"13 5s.
Rose Deep.—Area, 171 unworked claims on the dip of the Rose Deep.
New Primrose. The ore developed is in the neighbourhood of
one million tons ; this is being crushed by 200 stamps, and owing
to the unusual width of the reefs, it is contemplated erecting sixty
more. The mine is cut into two portions by a big dyke, several
hundred feet wide, but as the ore below the dyke is of excellent
grade, and as the dyke itself has caused a valuable overlap of reef,
the mine has not suffered severely from its presence.
The results from this mine to date have been wonderfully
good, and to all appearance they will continue equally so. The
area of the company seems to cover a large patch of particularly
thick ore, and the history of the mine will be a noteworthy one.
A regular dividend of 80 per cent, should be quite possible,
with the certainty of increasing this to 100 per cent, when the
other stamps are put up. The life of the mine, with 200 stamps,
is twenty-four years more, and on a 7 per cent, basis the shares
are- worth .£iof.
Glen Deep.—Area, 182 claims, the deep level of the cien Deep.
Glencairn and May Consolidated. The present 100 stamps
will be increased to, probably, 200 in the course of a year or
so. The first developments in this mine showed broken ground
and reef of rather low value, but since then a notable change
has taken place, and the mine is now considered by the best
authorities as certain to have a successful future.
Apparently, the Glen Deep lies in the centre of a large area
of good ore, which, till a year ago, was not looked for in this
particular locality.    As it is, the lowest workings in the Primrose, 84 TRANSVAAL.
May Consolidated, Glencairn, and Knight's outcrop mines all
show good ore, and this extends down to the Rose Deep,
Glen Deep, and Knight's Deep, showing even a better average
in  the deeps than in the outcrops.
A comparatively large area of the Glen Deep is taken up
by two large dykes which pass through the mine. These do
not dislocate the reefs seriously, but they are responsible for
causing a big blank where reef should be, and this shortens
the estimated life of the mine. It is difficult to accurately
estimate the value of the shares. With 200 stamps at work,
however, they should have an intrinsic value of ,£5.
Jumpers Deep.—Eventually, 200 stamps will be worked
on this mine. The company owns 253 unworked ore claims,
and has arranged to buy from the Jumpers Company, should
that company be in a position to sell with a clear title, its twenty-
eight bewaarplaatsen claims, for 36,662 shares.
The Jumpers Deep holds an asset of 44,828 Jupiter shares.
There are 600,000 tons of ore developed, all of which is
estimated to yield 40s. per ton. The reefs are narrow on the
whole, but the mine is a sound undertaking, and the results
to date, with  100 stamps, have proved satisfactory.
The eventual capital will amount to about £"570,000 : 200
stamps should yield a profit of .£200,000 a year, and on this
basis the shares would be worth about  -£5.
Langlaagte Deep.—Area, 184 claims on dip of Langlaagte
Estate and Langlaagte Royal. For a considerable period after
the reefs were struck in this mine the ore exposed gave very
disappointing assays. For the last year, however, a much better
average has been exposed, and the 800,000 tons developed may
be expected to yield a return of from 28s. to 30s. The value of
the shares is difficult to gauge, but it is not so much as the present
market value.
Nourse Deep.—Area, 198 unworked claims. This has been,
on the whole, à disappointing mine.    From its location, the dip of TRANSVAAL. 85
the rich Henry Nourse Company, it was expected to yield fully
15 dwts. to the ton. When the reefs were developed, however,
it was found that the mine was not only badly cut up by dykes
and faults, but that the ore was of a distinctly lower value, than
that in the outcrop mine. The unusually broken character of the
ground is due to the formation, which from the surface to a
vertical depth of 1,000 feet, lies at an exceedingly steep angle,
suddenly flattening. Below this line of disturbance there is a
slight improvement all through the mine, but, on the whole,
the ground is still unusually badly faulted, and the average
reef values do not come up to expectations. With an eventual
200 stamps,, a yield of 36s. per ton might be possible, but it
will be some time before the mine is sufficiently developed for
this capacity.
There are 450,000 tons of ore now in sight.
The company owns 127,332 shares in the South Nourse, with
a contingent liability on these of £"127,332.
The exact value of Nourse Deep shares cannot be gauged
for, I should think, at least two years to come.
Durban Roodepoort Deep.—Area, 227 unworked claims. Durban
This is a good mine with, however, limited capacities. There Deepep°C
is at present only one reef worked, the South Reef, and the
actual width of this is only an inch or two. As about 90 per
cent, of waste rock has to be blasted down in mining the reef,
it is essential that the ore should be most carefully sorted on the
surface. This is being done, but, of course, working expenses
appear correspondingly high. Owing to there being only one
payable reef, and to the fact that it is extremely narrow, the
mine, although it has a large claim area, will never be likely to
support more than 100 stamps. At present there are sixty
stamps, which will doubtless be increased. With 100 stamps,
about 25 per cent, of the Main Reef, in addition to the South
Reef, might be worked at a profit. This would give the mine
a life of twenty-six years, a dividend of 25 per cent., and the
value of the shares would be £2%. 86 TRANSVAAL.
Ferreira Deep.—Area, 142 claims. The claims now belonging to this company were subject for years to a series of
lawsuits before they were finally accorded a clear title. Hence
the delay in opening out what used to be estimated as likely
to prove the richest area on the Main Reef. Actual development has now proved this estimate to be correct, as the ore
opened up to date is of extraordinary good value. A'profit of
50s. per ton is expected, and should the mine eventually be
able to run 150 stamps, it would yield startling results. The
whole area of the Ferreira Deep—a point of great importance—has been to a great extent proved by the workings of the
Robinson Deep, and there is no doubt but that the shares will
eventually be valued to yield a dividend, which on any other
mining field would be looked upon as quite inadequate.
South Rand.—Area, 223 claims on dip of Crown Deep and
Langlaagte Deep. This company was put on a capitalised basis
five or six years ago, but no work has yet been done. The
company recently acquired the thirty-eight deep level claims of
the Pioneer, and will probably take in the eighty-one deep claims
belonging to the Crown Reef. During the present year the
ground in this neighbourhood will possibly be refloated into
two companies, and shaft sinking will be commenced.
The shares have a considerable speculative value, as being
favourably situated ; but there is no knowledge of what the reefs
may be like when cut, and, moreover, the ground is rather badly
cut up, at least on the surface, by a big dyke running east and
west through it.
Robinson Deep.—In this mine there are about 208 unworked
ore claims. The eventual stamping capacity will be 200 head,
but the aggregate width of workable reef is not yet known, and
it is, therefore, impossible to accurately estimate the life of the
mine ; probably the figure will be about twenty years. The
property, in which about 300,000 tons of ore stand developed,
promises to have a fine career, but the ore is apparently not
so rich as in the Robinson, and is somewhat disturbed by dykes. TRANSVAAL. 87
It will be impossible, until the 200 stamps have run for at
least a year, to gauge the value of Robinson Deep shares as an
investment. To return 7 per cent, interest on the present price
of £"13, together with redemption of capital invested, would
require a regular monthly profit of £"48,700.
Simmer and Jack West.—The area of the property is 226 ;
claims, on the immediate dip of the Geldenhuis Deep, but twenty- '
five of these will be sold to the Rand Mines Deep. The Main
Reef series in this section of the Rand is unusually regular, with
reefs of large width and good value. It may reasonably be
inferred that the splendid ore bodies now worked in the
Geldenhuis and Geldenhuis Deep will continue into the Simmer
West, but, on the other hand, there is no certainty that such
will be the case. The reef, when found, may be broken up,
or a poor patch may be encountered. By the time this is in
print the reef will, no doubt, have been cut in the deepest shaft.
The shares are distinctly a speculation, but with every chance
in their favour. Should the reef turn out well, a great enhancement in their value would probably ensue.
Simmer and Jack East.—The property consists of 297 :
claims on the dip of the Rose Deep, and the company holds, in "
addition, 269,263 shares in the South Rose Deep, received for
162 claims sold to that mine. The reef was cut at under
1,900 feet, nearly 1,000 feet shallower than was estimated.
The reason for this is assumed to be an upthrow, caused by a
big fault, and the same phenomenon is expected in a number
of the second-row deeps in this section of the Rand.
The development of ore in the Simmer East, so far, has
proved most disappointing, in fact, many of the assays are so
low that it has been surmised that the wrong reef is being opened
out ; unfortunately, however, this theory seems to be unwarranted.
There is little doubt but that, eventually, the mine will be found
payable, but in the meantime there will be a long delay in starting
to crush, and a big expenditure on extra development. In
addition  to  this  there  is  the fact that one large patch in the 88
mine is unpayable, a feature which may repeat itself, and the
high capitalised market value of the company has now to be
spread in consequence over a smaller claim area.
Shareholders in this mine should make a point of being well
informed as to the results of development from time to time.
Meanwhile, the shares are .highly speculative.
Rand Victoria.—This mine was floated in 1896. It has
about 700 claims on the dip of the Simmer and Jack : £"400,000
in cash : 45,000 shares in the South Geldenhuis Deep : 143,000
in the Rand Victoria East : and will sell about 400 claims for
shares in the Rand Mines Deep. As yet, no attempt has been
made to start shaft sinking, and it will be at least four years before
any returns can come out of the mine. During that long interval
we shall see many fluctuations in values of mining shares, and I
have not the slightest doubt but that Rand Victorias will stand
at a much lesser price than £3^. If the shareholder is prepared
to lose interest on his money for four or five years : to see his
shares go up and down a dozen times in the meanwhile : and,
finally, to take the risk of possible disappointment when the reef
is struck, I see no reason why he should not invest in Rand
Victorias at W§m    Personally, the venture does not tempt me.
1 Rand Victoria East.—This is a similar undertaking to that
just described. There are 273 claims : there is a working capital
provided to the extent of £"204,000. At £"2 per share, the claims
only stand at -£2,800 each. All this looks well on paper ; but,
after all, banket mine as it is, the thing is purely speculative : to
the speculator it may appeal, but I cannot recommend this class
of mining venture to the investor.
Jupiter is the deep level of Jumpers Deep. There are 488
claims, but a large number of these will be made over to the Rand
Mines Deep, for shares in that proprietary company. The mine
promises to be a success as it is situated in well located ground,
but, of course, till the reef is cut, is simply a speculation.    The deepest  shaft   is   now  down over 3,000 feet ;   theoretically,  the
reef should be found at 3,500 feet.
Knight's Deep.—The area is 185 claims on the dip of the Knight's
Witwatersrand mine, and it is proposed to erect an eventual eep'
stamping capacity of 200 head. This mine is developing
distinctly well, and had it not been for delay caused by the
striking of a heavy stream of water in one of the shafts, there
would, by this time, have been a great deal of ore in sight.
Apparently there is good average ore found in the workings
from both shafts, which gives every promise that the average
value all through the mine will be satisfactory. I cannot hazard
an estimate of what profits will eventually be earned, but should
the shares fall to £3 or £3^ they would be an attractive purchase.
South Geldenhuis Deep consists of 193 claims on the dip of South Geiden
the Simmer and Jack. The ground is favourably located. It
will take about £"400,000 in addition to the working capital of
•£170,000 provided to completely develop and equip the mine.
At £3 per share, adding the extra amount to be spent, the
claims are valued at -£9,500 each. The reef is expected to be
cut at  2,500 feet.
South Rose Deep.—Area, 265 claims on the dip of the South Rose
Rose Deep and Simmer and Jack. When this mine was eep"
floated it took over a shaft which had already struck the reef
at 2,290 feet. Since then, development from this shaft — the
other shaft not yet having cut the reef—has been distinctly
poor. This poor value of ore coincides with that found in
the adjacent Simmer East mine, and points clearly to the fact
that the Main Reef series in this locality, and at a depth
corresponding to the areas of the second row deeps, contains
large patches of poor ore, which were not expected. No doubt
the South Rose will develop into a good mine, but the shares
must still be classed as highly speculative. At £3^ per share,
and including the additional cash that must be provided, the
claims are valued above .£7,000 each. 90 TRANSVAAL.
Robinson Central Deep.—Area, 45^ claims, below the
Robinson, and adjoining the Crown Deep on the east. A
shaft is now being sunk. It is expected that this mine will
contain very rich ore, and be equally as good as the Bonanza
has proved to be. I do not think it will be so good as that
mine, but no doubt the results will be such as to warrant a
market valuation of at least ,£40,000 per claim, equal to £4.^
for the shares.
Village Main Reef.—The unworked area at date is equal
to 131 claims. In these the South Reef is found to be of high
value, but the Main Reef Leader is narrow, and of poor quality.
When the full equipment of 160 stamps is at work a larger
quantity of Leader will be milled, but the profits will still be
large. The life of the mine with 160 stamps should be sixteen-
and-a-half years more, and including the value of 20,000 Wemmer
shares held by the Village Company, the shares are worth ,£8.
Village Deep.—This mine promises, theoretically, to be
as fine a mine as the Village Main Reef. There is, of course,
no certainty that this will be so, but the developments in the
Robinson Deep, the adjacent mine, undoubtedly set a high
value upon the area belonging to the Village Deep. There
are 186 claims. An unworked Village claim to-day stands at
■£28,000, and if a Village Deep claim were valued only at ,£14,000
the price of the shares would work out to nearly £y.
A working capital of £"190,000 has been provided, and the
underwriters have a three years' option on 94,385 reserve shares
at £*5. which option will doubtless be exercised, and will produce
£"470,000,  or £"660,000 in all.
Bonanza.—There are seven unworked claims. It will take
the forty stamps belonging to the company five-and-a-half years
from July, 1899, to extract this: the average dividend over this
period should be 120 per cent., and the shares, to yield 7 per
cent, and redemption of capital, are worth  -£5-5-. Angelo Deep.—There are 304 claims. Additional working- AngeioDeeP.
capital must be raised to the extent of £"450,000, and, assuming
that this is done by issuing more shares at £"4, the valuation per
claim would stand at £"7,200. This is a small figure when
compared with the claim valuation of the Angelo itself, or the
Driefontein, under which mines the Angelo Deep is situated,
but, on the other hand, it is a heavy valuation for ground which,
however well located,  is as yet unproved.
Witwatersrand Deep.—Two years of development work in witwaters-
this mine have exposed very little payable ore. Two reefs exist,
but, as I have already stated elsewhere, these two reefs may be
merely parts of one and the same reef which has been cut in two
by a dyke. There have been several payable patches found,
so far, on each of these reefs, but undoubtedly the aggregate
result is most disappointing. These shares are only speculative
counters as yet, and, on the results to date, stand at an absurdly
inflated value.    There are  276  claims.
Knight  Central  Deep.—The  area  of this property is 445 Knight
claims, and it is situated on the dip of Knight's Deep.    A further    er '
sum of -£450,000 will be necessary to equip and develop the
mine. At the time of writing (March, 1899), the shaft has not
yet struck the reef, and the shares are entirely speculative.
Assuming a favourable strike, and the development of good
or average ore, such as is now being found in Knight's Deep,
the shares would probably go to .£5.
West Roodepoort Deep.—This mine is one of the unfortu- west Roode-
nate deep levels. It is situated on the dip of two mines which P00rtDeeP-
are badly disturbed by innumerable small faults, and the same
unpleasant phenomenon is repeated in this mine itself. The reef,
as is the case in all mines in this locality, is a mere stringer,
one inch thick. In the surrounding mines this one inch of reef
is rich enough to allow of the inclusion of twenty-four inches of
waste rock, and still leave a payable product, but in the West
Roodepoort   Deep,   so   far  as developed,  the assays  apparently I
92 TRANSVAAL.
do not average more than about 11 dwts. over a twelve-inch
section, and as this would be reduced by one-half in actual
stoping, the result must be considered unpayable. But there
are 245 claims, and much of this area, no doubt, carries a better
value of ore. I consider the shareholders would be well justified
in raising £"100,000 to be spent in further development of the
mine, and, in fact, I would recommend them to pursue this course.
South Nourse.—Area, 300 claims, on the dip of the Nourse
Deep. Working capital provided, -£540,000. The shares are
quite speculative, as the value of the property cannot be
accurately gauged, but the financial position of the company
is unusually sound.
City Deep.—Area, 190 claims, on the first dip of the City and
Suburban, Meyer and Charlton, and Wolhuter. Working capital
provided -£210,000. Further amount necessary £"300,000. Claim
valuation at underwriting price ,£6,000. This area is not particularly well located, but the valuation is a legitimate one.
South City.—Area, 177 claims, on the dip of the City Deep,
i.e., on the second dip of the City and Suburban, Meyer and
Charlton, and Wolhuter. The working capital provided is about
£"250,000. At the underwriting price the claims are valued at
-£5,500 each. Further cash will be required to the extent of
■£320,000. Near the centre of this property the Bezuidenville
borehole cut the reef at 3,251 feet, and showing poor value,
some four years ago.    The shares are quite speculative.
Suburban Deep.—Area, 160 claims, on the dip of the South
City, i.e., the third dip of the City and Suburban, Meyer and
Charlton, and Wolhuter. Working capital provided £"110,000.
Further cash will be required to the extent of £"500,000. At the
underwriting price of £2 a share, the claim valuation works out
at -£4,700.    The future is doubtful.
Wolhuter   Deep.-
Wolhuter,   Spes   Bona
-An
,   150
Geon
the
Wo
of   the
capital  ill provided £"231,250. At the underwriting price of the working
capital, viz., £"2 10s. a share, the claim valuation works out at
£"6,500. Further cash will be required to the extent of £"270,000.
The eventual success of this company is rather problematical.
South Wolhuter.—Area, 192 claims, on the dip of the South
Wolhuter Deep, i.e., the second dip of the Wolhuter, Spes Bona,
and George Goch. The working capital provided is £175,000.
The locality is unquestionably a doubtful one. The working-
capital shares are underwritten at £2^, which implies a valuation
per claim of nearly £"6,000. Further cash to the extent of
£"400,000 will have to be found. The ground appears to be
decidedly over-valued.
Klip   Deep.—Area,   233   claims, on  the   dip   of the   South khp d<
Wolhuter,  i.e., the third dip  of the Wolhuter, Spes Bona, and
George Goch.    The working capital provided was £"150,000.    At
the underwriting price of the shares, the area works out at ,£3,200
per claim.    A further sum of £"450,000 will be required.
The reef must lie at a depth of 4,500 feet, it is probably very
low grade, and the venture is highly speculative.
Driefontein Deep.—Area, 256 claims, on the dip of the d>
Witwatersrand Deep, and on the second dip of the Western
section of the Driefontein. This ground has only recently been
put into company form. The working capital supplied was
,£250,000. No work has been done yet, but before the mine is
fully developed .£400,000 additional cash will have to be raised.
The shares, as in the case of many of the deep levels, are pooled
for two years, and presumably none will be sold under £2. The
ground of the company is fairly well located, but the reef probably
lies at a depth of 4,000 feet.
Cinderella  Deep.—This company has not commenced work <
yet,  although  floated several years ago.    The capital has been
twice   increased.     There  is  now  £"400,000   cash   in   hand ;  this
will   be   insufficient   for    eventual   requirements   by   £"250,000.
The  reef   probably   lies  at  a  depth   of   over   3,000   feet,   and, iii
.
94 TRANSVAAL.
although the ground is in a fair locality, those who buy the
shares to-day are discounting the future very considerably.
There are 290 claims.
South East Rand Deep.—The claim  area is 545,  but on
the extreme dip of the East Rand Extension and Boksburg
properties, and as the Main Reef series has never been accurately
located in these mines, or, if found in places, has been extremely
poor, the property may be considered almost valueless as yet.
Kleinfontein Central.—Area, 149 claims, on the immediate
deep level of Kleinfontein. The reef in this property is, to a
certain extent, proved by the borehole on the Chimes Mines—the
deep level of the Kleinfontein Central. In all probability, to
judge from developments in Kleinfontein, the reef will be low
grade, and shareholders may not feel justified in providing the
£450,000 necessary to equip and develop the mine. An
amalgamation with Kleinfontein would probably be the most
advantageous course, and with this in view Kleinfontein Centrals
ought to be worth between par and £1^.
The company owns 19,548 Chimes West shares, and -£4,700
cash.
Chimes Mines.—Area, 510 claims, on the dip of Kleinfontein
Central. This company was floated three years ago, but except
for the sinking of a borehole, which cut the Main Reef at 1,754
feet, assaying 16 dwts. for 36 inches, no work has yet been done.
The company has £"30,000 cash, and will require £"600,000
more. Bearing in mind that the reef in this locality is distinctly
low grade, and that the formation will probably be found to be
broken, it is doubtful whether the controllers of this mine will
ever supply sufficient funds to thoroughly prove it. The shares
are a doubtful speculation.
South Village Deep.—Area, 180 claims, equivalent in their
position to the fourth dip of the Wemmer. The reef will not be
found at a shallower depth than 6,000 feet, and it will take
■£1,000,000 to develop and equip the mine.    Cash on hand, or TRANSVAAL. 95
at call, ,£200,000. This is an example of the deep-level flotation
we may- expect whenever the public gets excited again. The
deepest shaft in the world to-day, that at the Calumet and Hecla
Copper Mine, in Michigan, has barely reached a depth of 5,000
feet, and yet here we have a weak financial group calmly floating
a property which will require two shafts, each 6,000 feet deep, to
work it, and providing not even enough money to sink the
shafts—let alone to develop and equip the mine. I cannot see
that the shares of such a company have any value.
Bantjes Deep.—Area, 448 claims, on the dip of the Bantjes Deep.
Vogelstruis Deep and the Bantjes, the latter a mine that has never
yet proved good enough to warrant the erection of a battery.
The reef lies at quite 4,000 feet deep, and it would take £"800,000
to develop and equip the property. The company was provided
with £"100,000 working capital, most of which appears to have
been expended in outside directions. The shares, to my mind,
are worth nothing.
Langlaagte Block B Deep.—Area, 54 claims, on the dip of Langlaagte
Langlaagte Block B. This area, low grade as it is, is sure
to be too small to work as a separate mine, and should be
amalgamated with the outcrop mine. It is not certain that the
ore will be payable, but the shares have, doubtless, a speculative
value of 30s. or so.
Vogelstruis Deep.—Area, 376 claims, on the dip of Vogel- Vogelstruis
struis Estate. The reef has been cut in two of the three shafts,
and is now being developed. It is low grade, but in.all probability
certain sections will yield a profit when worked. The shares
are still entirely speculative, but are not without intrinsic value.
It is as yet too soon for investors to buy the shares. The
company owns 11,400 Bantjes.
East Roodepoort Deep.—Area,   161  claims, on the dip of EastRoode-
Kimberley Roodepoort.    No  work has  as yet been done here. poor    eep'
The company should have ,£120,000 in cash or at  call.    The
future is doubtful. 96                                                             TRANSVAAL.
Central
Roodepoort
Central   Roodepoort   Deep.—This   mine   is   turning   out
Deep.
distinctly  well.    Its  area consists of 190 claims,  on the dip of
Princess  Estate.    There is already a large quantity of payable
ore in sight, and the company will in all probability pay regular
dividends.    The shares ought to be a sound speculation, even up
to £3.
Steyn Estate.
Steyn   Estate.—Area,   668   claims,  on   the  second   dip  of
Central and West Roodepoort Deeps.    The reef probably lies at
3,500 feet deep,   and it would  take   -£700,000  to   develop  and
equip the mine.    Towards this there is £"300,000 cash in hand.
In addition the company owns an estate which yields a revenue
of .£7,000 a year from claim licenses.    No work has yet been
done,   but   boreholes   will   probably   be   put down  to locate the
reef.     The   shares   are   entirely  speculative,   but,  owing  to  the
size of the  property,   they  have   an   attraction   for   speculators
which theoretically better located mines fail to exert.
South Rand
South Randfontein Deep.—Area, 119 claims, on the dip of
fontein Deep.
Porges Randfontein, and the block known as Stubbs Randfontein.
The mine was floated several years ago with £"50,000—less than
one-tenth  of the amount  required—and  no   work  has yet been
done.    The reef presumably lies at a considerable depth.    Its value
is very problematical, and the shares are a very poor speculation.
values of the
most fully
As a summary to the foregoing description of all the mines
on the Witwatersrand, I have compiled a table showing from the
developed
latest information available, the unworked claims, life, and value of
the shares,  of thirty of the soundest and most fully developed
mines.    The estimate shows what the value of the shares should
be, allowing for 7 per cent, interest on the investment and ultimate
redemption of capital.
These thirty mines  I  have divided into two groups.    The
first consists of those mines which are not only themselves fully
developed, but which are surrounded by other deep-level mines.
These can be valued with comparative accuracy, both as to their
contents and probable profits, and, as 7 per cent, investments, are
genuinely sound. The second group consists of mines which are not so
thoroughly proved by adjacent workings, especially by deep
levels. These are nearly all sound ventures, but their capacity
cannot be so accurately gauged as the mines in the first group,
and as an investment, pure and simple, they cannot yet be classed
with the others. It is only fair, however, to add that these latter
mines may possess speculative possibilities which the more fully
proved mines have not got.
It will be seen from the following table that the public, even Shareholders
on the low basis of 7 per cent, interest, over-values some of these for redemp-
mines, while in many cases there is no margin of speculation left. in°"s°ed.apia
Investors, apparently, cannot,  and will not, make the necessary
allowance for the redemption of their capital.    For this condition
of affairs the financial press, especially the subsidised portion of it,
is largely to  blame.     Were  I  an  investor,  ignorant of mining
knowledge,   the   impression   I   should   gain   from   reading   the
financial papers of the day would be, that every area of banket is
invariable in its characteristics, that every ton of it will yield the
exact profits which the controllers of the mines state that it wilh—
even for twenty years to come, and that the precise value of the
shares,  as an  investment spread over ten  or twenty years, can
be ascertained in a moment by a simple rule of three calculation.
Absurd statistics of this sort are applied with the greatest Absurd and
impartiality to the very best mines, or to mines which, after ten accurate*"
years'  exploitation,  are   still   found   by   practical   people   to   be ^e va\ues°of
Unpayable. banket mines
This wholesale estimating of the values of Rand banket circulated.
mines—many of which estimates are composed by persons who
have never been in Africa—besides being dishonest, is hopelessly _
inaccurate. No account is taken of poor patches of ore, although
these exist, as we have seen, in at least half-a-dozen mines where
least expected : no allowance is made for the damage done, and
the loss of ore caused by faults and dykes : no estimate is made of
probable higher costs because of lack of native labour, or for
stoppages caused by want of water, and yet these are ever present
factors.    These ideal estimates assume that the mine will produce 98
a maximum theoretical profit every month until it is worked out,
and that the shares are worth buying to yield 7 per cent, on this
assumed profit ; it is rarely that the life of the mine is taken into
consideration at all.
As a matter of fact, there are no two banket mines in which
the same conditions exist, and which are governed by the same
factors. It is almost impossible to accurately value the mines
which are fully developed, let alone those which have only been at
work for a year or two, and which are little opened up.
The factors from which calculations can be made are
continually changing. These changes are usually in favour of
investors—but not always.
The most serious factor, and one which shareholders must
take full account of, is that, where least expected, broken ground,
or patches of poor ore, may be found. As present examples, I
will mention City and Suburban, Wolhuter, Nourse Deep,
South Rose Deep, Simmer East, and Witwatersrand Deep.
I am afraid that in the great area now being opened up by
the deeper deep levels, many of these poor patches will be
found, and in the face of such eventualities I consider the excessive speculation, and the absolute trust shown in the future
of all these undertakings, is unwarranted.. No doubt, as a whole,
the deep levels will prove highly successful, but there are. distinct
risks to be undertaken before all of these mines shall have been
proved payable, and a certain number of comparative failures
will surely result.
In the investors' favour we have the following factors :—
1. The policy of erecting more stamps, whenever
the labour supply admits of it, is being generally carried
out. By this means the total profits from the mine are
returned more quickly to the shareholders, whose investments appreciate in value accordingly..
2. With larger stamping capacity working costs are
lowered. This enables the management to mine at a profit
large quantities of low grade ore which would otherwise be
left behind as unpayable. 99
3- It has been found, in practice, that 12 cubic feet of ore j
weigh one ton.    All previous calculations of " lives " allowed 1
for 13 cubic feet, and to this extent the lives of all mines have
been underrated by about 8 per cent.
4. Calculations of tonnage per claim are either made on \
clean ore, or on a theoretical stoping width of 36 inches. I
In actual mining, however, a considerable additional amount
of waste rock is blasted down with the ore, and, despite the
closest sorting, the tonnage milled always includes more waste
than is allowed for in the estimate of ore in sight. . This fact
adds considerably to the life of the mine.
5. Between now and the time when most of the present ^
dividend-paying mines shall have become worked out, f
further reductions in working costs may be reasonably
expected. These reductions will not, I assume, be the result
of political developments, in fact they will be rendered void
to some extent by the recently levied tax of 5 per cent, on
profits, but, on the whole, the balance will be in favour of
investors.
. 6.  Many of the mines have  now large reserves of ore (
developed which have been paid for out of current profits, j
During the last three or four years of the life of these mines,
not only will   capital   expenditure  entirely cease,  but these
large  sums,  so  locked up,  will become  available for extra
dividends.
7. When a mine becomes exhausted it will be possible 1
to take out, and at very small cost, most of the ore now left
in for pillars and such like.    This will mean six or twelve
months' work for many of the mines.
It remains to be. added that, in the following estimate of lives
and values, all these favourable factors have been taken due
notice of. The eventual results may, in individual cases, be very
slightly better than what I have estimated, but I do not think
that investors would be justified in assuming that'such will really
be the case.-
H 2 TRANSVAAL.
TABLE  SHOWING THE  ESTIMATED  INTRINSIC  VALUE  OF THE
SHARES  OF THIRTY  OF THE MOST FULLY DEVELOPED
WITWATERSRAND MINES.
Basis—7 % interest on capital invested, plus redemption of capital at 5 J compound interest.
Name of Mine.
■H
Number
of
Esti-
Probable
ïstimatec
value of the Shares.
1/7/99-
I/7/99-
m
dividend.
Vd'iv
|
mne
others.
Total value of.
A
%
1
S.
d.
£   I
d.
£  s. d.
Bonanza...
7
40
m
120
5
5
0
—
550
Crown Reef
2S
I20
5
240
9
0
6    5
0
15 15   0
Durban Roodepoort
45
80
6
125
5
J5
0
5 15   0
Ferreira ...
32
80
II
300
21
10
0
5    °
0
26 10  0
Geldenhuis Estate
27
I20
M
170
8
5
0
0
8  15    0
Heriot    	
39
70
IOO
8
0
^PSffll
800
Henry Nourse   ...
80
7
170
8
15
0
!  15
0
10  10    0
Jumpers ...
13
IOO
6
no
5
0
0
3    °
0
800
Jubilee   ...
6
5°
7
IOO
5
5
0
2  12
6
7  17    6
May Consolidated
2Ô\
IOO
10 \
75
n
5
0
—
5    5    0
Primrose
55"
IOO
15
60
5
6
^KsItÉ
5    2    6
Robinson (^£5)...
99
200
m
23
9
10
0
10
0
Salisbury
M
5°
6h
40
2
0
0
1  12
6
3  12    6
Treasury (,£4)   ■■■
22
5°
n
18
5
15
0
5
0
600
Worcester
2^
40
3
60
1
12
6
1  i5
0
3    7    6
Wemmer
B
Champ d'Or      	
24
60
. li
190
10
5
0
4 10
H
14  15    0
6
5°
4i
50
|
5
S
ÉÉE
2    s    0
City and Suburban (^£4)
128
160
15
6
0
*^M
ÉÉ
6   .7    6
Crown Deep
r57
200
i8i
n
IC
0
1 15
0
13    5    0
Durban Deep    ...
227
IOO
26""
25
17
6
f$3Êià
2  17    6
Geldenhuis Deep
188
200
20
10
0
0
10    0    0
Ginsberg...
33l
5°
l3
35
2
15
0
\S58lR
2  15    0
Glencairn
89
160
16
2
15
0
—
2  15    0
Langlaagte Estate
54
200
16
35
3
6
10
0
3  12    6
Meyer and Charlton
80
10
85
5
15
0
15
0
6 10    0
Rose Deep
171
200
24
0
- i~^r<
10  15    0
Roodepoort U.M. Reef...
82
no
8
60
3
10
0
1 10
0
500
Simmer and Jack (£$)■■■
342
320
*9
l\
3
15
0
1 15
0
5  IO    0
Village Main Reef
131
160
n
80
7
5
0
15
0
800
Wolhuter (£4)	
136
IOO
45
10
5
5
0
7
6
S 12    6
The debenture issues of Witwatersrand mining companies form
a series of sound investments, and may be recommended with safety.
In nearly every case the debentures carry an option to be
converted into shares up till a certain period, and debenture holders
already stand to make handsome profits on many of these options. In fact, as a result of the recent rise in share values, nearly
all the options will have been exercised ; and most of the
debenture issues will be at once cancelled. Already the debenture issues of the Robinson Deep, Angelo, Driefontein,
and Van Ryn, have been thus paid off.
It is possible that the invariable success of Rand debenture
issues, to date, may lead to the issue of such by mines with
less assured futures. The public must take note of this point, but
with regard to nearly all those already issued there is little risk.
TABLE   OF   DEBENTURES
Issued by Witwatersrand Mining Companies (exclusive of the Debet,
converted into shares under terms of option).
Amount
issued.
Rate
T7?
[fill!
Redemption.
Company.
By a
No. of
mual draw
Or in
£
I
£
^~
Witwatersrand Deep
100,000
5*
June,
1900
i
190I
100       105
Do.              do.
100,000
3
1901
15
I902
100      105
Vogelstruis Deep...
122,500
6
if
1900
10
I902
TOO         105
Treasury  ...
54,000
6
—
10
I90I
IO3          105
Vogelstruis Estate
100,000
6
2
Dec,
1900
—
	
	
-.-■   —..-■   .
Glencairn	
140,000
6
3i
Feb.,
1900
7
1901
I02
	
Knight's Deep
400,000
5i
4
June,
1900
15
1902
IOO
I03
Kleinfontein
ICO,OOO
,-•6-*
3
Mar.,
1900
8
1902
100      105
Geldenhuis Deep
5^
—
8
1899
IOO          	
Durban Roodepoort
Deep
200,000
6
~4 -:-
Mar.,
1900
10
1899
100      105
Simmer and Jack...
293,000
5^
—
p
1900
100      105
French Rand
6
2
Dec,
1899
10
I900
IOO         IOO
Simmer East
500,000
Si
4
1900
15
1902
100      103
New Comet
175,000
6
3^
Aug.,
1900
8
1900
100      105
Lancaster...
180,000
6
3^
|an.,
1902
10
1902
108
Consolidated Main
leef...
120,000
6
21
Dec,
1900
12
I902
103    105
Roodepoort Central
Deep
150,000
6
2h
-- -»-„
1900
12
I90I
Jupiter
400,000
5"
4
June,
1901
m>
I903
100      103
Princess   ...
60.000
•6
3
May,
1901
12
I90I
108      —
New Chimes
41,000
Wm
1^
Dec,
1901
4
I902
105    105
Luipaard's Vlei   ...
5*
*¥
1901
20
I902
100      103
West Rand Mines
160,000
5i
||
Mar.,
1902
20
I904
100      103
1 I02 TRANSVAAL.
A very distinct line must be drawn by speculators between
the Witwatersrand and its mines, and the mines of all the other
districts in the Transvaal.
The principal of these districts are Heidelberg, Klerksdorp,
De Kaap, Lydenburg, and the Murchison. I have visited all
of these, some of them repeatedly, during the last eight years,
and have witnessed many illustrations of the danger of sinking
capital in them.
To begin with, we will take Heidelberg.
Since the earliest days of the Rand, when the different
series of banket beds were found dipping to the south, it was
known that at Heidelberg, thirty miles distant, there were also
banket beds—dipping to the north.
Geologists have assumed, with perfect reason, that these
beds form the other side of the great basin which at this
particular locality, that is to say, between Johannesburg and
Heidelberg, is thirty miles wide, but which is also known to
extend ioo miles distant to Klerksdorp, and into the Orange
Free State. The banket beds at Heidelberg are therefore,
probably, of the identical Rand formation, but it does not follow—
and it is so hard to convince would-be company promoters
of this—that these reefs, lying on the other side of the basin,
carry equal quantities of gold, or lie. as regularly as do those
on the Witwatersrand.
A great number of mines have been floated in the Heidelberg district from time to time. Whenever there is anything
approaching to a " boom," a dozen or two dozen mines are
floated. Time passes. The mines are found worthless, their
money is all spent, and they are shut down. Then they
lie idle for years until the next " boom " comes, when they are
pumped dry and refloated, and the same process takes place
again. In the 1895 "boom" the Consolidated Gold Fields took
up extensive interests in the district. Thousands of claims were
acquired at high prices. The Nigel Deep, Nigel Central Deep,
and Sub-Nigel, were floated, and the district rose in the estimation
of the ignorant.    To-day, what is the result?    The Nigel Central TRANSVAAL.
Deep and Sub-Nigel are shut down, many of the claims are
abandoned, and the Nigel Deep, a mine over which hundreds
of thousands of pounds have been squandered, has just started,
after four years, to mill with twenty stamps.
All these twelve years there has only been one good mine Nigel,
in the  Heidelberg  district—the  Nigel mine—and   it  is   on the
success of this  one  small   rich patch   that  dozens   of worthless
mines have been floated, and hundreds of thousands of pounds
lost.
The Nigel Company, with an issued capital of .£200,000
and ,£60,000 debentures, was a rich mine in the early days—
the richest banket mine in the Transvaal—and during the years
1891-4 did especially well. Then poorer ore was encountered;
development fell behind, and for several years the mine remained
under a cloud. No dividends were paid, and the shares fell
to a very low figure. During 1898, however, in several parts
of the mine, a large quantity of highly payable ore was opened
out ; these chutes have continued to develop well, up to the
present, and to-day, it may honestly be said that the. Nigel is
a better looking mine that it has been at any time during the
last five years.    The management is sound.
There is now a big ore reserve, handsome profits are Large o
assured for some time to come, and the present thirty-stamp reserves
mill is being increased to fifty head. It is conceivable that the
Nigel will earn a 40 per cent, dividend, from ore in sight for
some years to come. The area of the mine is large, the continuance of the rich chutes through the entire depth of the
property is now assured by the discoveries in the Nigel Deep,
and it is probable that the Nigel will be a steady dividend
payer for many years to come.
But the three or four rich chutes in the Nigel mine,
although they probably continue in depth, only occupy a very
small area, while for miles around the country is floated off
into companies. The Nigel Deep, and perhaps the Nigel
Central Deep will contain, it seems to me, all or any continuation
of rich  ore  found  in the   Nigel.    Below these again,  but at  a lo4
TRANSVAAL.
great depth, the rich ore may be found continuing into the
farm Grootfontein, which is controlled by the Consolidated
Gold Fields.
On each side of this good run of ground, which a mass of
prospecting and development work during the last twelve years
has shown to be the only payable ore in the Heidelberg district,
there are a number of mining companies.
On the west there are :—
French Western Nigel.
Sub-Nigel.
Ryan.
Romola.
Florida.
North Florida.
South Florida.
West Nigel.
On the east are :—
East Nigel.
Rand Nigel.
Transvaal Nigel.
Henderson's Nigel.
Marievale Nigel.
South Nigel.
Nigel Extension.
Nigel Main Reef.
In the aggregate a great deal of work has  been done by
these badly located mines,  but they have,  one and all, entirely
failed to show themselves payable.     Reefs certainly exist in  all
of   these  mines,   but  they  are  narrow,   patchy,   and   frequently
badly broken.
Some of these           A number of these mines have a good deal of cash in hand.
hand.                     Sub-Nigel,  with an issued capital of £"300,000, has in cash
or good assets,  about £"75,000.
iLi^ oD W 9
DpiJO/J 1/JJOfJ
O
O
00
i
GO
LU
I—
O
O
ui
3=
o
x
CO
I
I-:
O
q:
h-
co
Q
_j
UJ
O  French Western Nigel has £"45,000.
Transvaal Nigel, with ,£275,000 capital, has £20,000.
Florida,  capital,  £162,500, has £65,000.
North Florida, capital, £125,000, has £20,000.
South Florida, capital, £125,000, has £20,000.
Returning now to the two mines which may be assumed
to contain within their area the continuation of the Nigel chutes—
viz., the Nigel Deep and Central Nigel Deep, we find the
following facts.
ft
Nigel  Deep.—Issued capital, £450,000. Nigel r
. This property extends to 659 claims, and probably contains
within its area the continuation of all the Nigel chutes. But
there are also, as development has clearly shown, large areas
of poor reef and of broken country, and the sum spent to
date in developing these barren sections, as compared with
that spent in opening out good ore, has been unusually large.
On the whole, the ground opened to date in the Nigel Deep,
a considerable area, is decidedly not so good as an equal area
of the Nigel, and to me, it seems probable that the deep-level
mine, even should it improve on its results to date, will never
equal the outcrop.
At a recent date there were 102,000 tons of better class
ore developed in Nigel Deep. This figure was arrived at by
assuming a stoping width of one foot. The value of the ore
developed, according to the last report of the Consolidated
Gold Fields, was 43 dwts. This, however, was the value of
the clean ore, which was only 6"2 inches thick, so that the
value of the 102,000 tons is really only about 22 dwts., equal
to a recovery value of about 1 oz. The statements contained
in the Consolidated Gold Fields report for 1898 that (1) there
were 102,000 tons in sight, and (2) that the value of the ore
was 43 dwts., were therefore misleading.
The Nigel Deep is a fairly good mine, so far as it is
developed,   and   in  a year  or   two  will  probably   have. a lot  of w
106
TRANSVAAL.
payable ore in sight. In the meantime, for a year at least, it
will be inexpedient to run more than twenty stamps, and a
monthly profit averaging £"5,000 is, to my mind, the most that
can be expected for some time to come.
Nigel Central Deep.—Issued capital, £"200,000. There
are 548 claims, on the dip of the Nigel Deep. Several shafts
on the property, after being shut down for a year or two, are
now being continued. The reef will be cut at about 1,500 feet.
It is reasonable to assume that the rich Nigel ore will continue
in the direction of the Central Nigel Deep, but the property is
in still a speculative stage. There is already a debt of ,£55,000,
and before long the company will have to be reconstructed.
This completes an account of the Nigel district. Let it
be remembered that in all probability there is just one rich
patch in the district. This extends from the Nigel, a really
good mine, into the Nigel Deep. Here it averages, apparently,
a lesser value, but is still good. In depth the same class of
ore may be expected in the Nigel Central Deep—but this is
purely speculative.
Outside of these properties the shares of all Nigel Mines
are, in my opinion, simply gambling counters, and should be
regarded accordingly.
Some distance from the Nigel district is the ground that
belonged to the Molyneux Mines. Several years' development
of this mine only produced 18,000 tons of payable ore. In
addition to this the reef in all the lower workings was much
broken up, and a series of boreholes, put down on the dip,
failed to discover any reef at all. Notwithstanding these facts,
which I gathered from an inspection of the mine, and also from
the information placed at my disposal by a late manager of
the property, the press and public were deceived by those most
interested, and shareholders lost heavily. The company went
into liquidation ; the ground was bought for a mere nothing,
and has now been refloated as the Nigel Proprietary, capital,
£65,000.      On   the   same   line  of   reef  a  lot   of   other  mines, H
equally bad, were floated—Blinkpoort, Molyneux West,
Heidelberg G.M., Heidelberg Estates, etc. All these mines
have been, or ought to be, liquidated.
In another part of the Heidelberg district are the Hek
Roodepoort and Hex River mines.
Heidelberg Roodepoort, after spending £150,000 in a fine
equipment, started in 1896 to mill with forty stamps. After
mining for about a year, at a loss, the mine was shut down.
There is a debt of about £80,000.    The ore is unpayable.
The same remarks as to ore value apply to the Hex River.
Should the present " boom " last till the end of this year,
the whole of the mines at Heidelberg will be refloated under,
different names, and, with the help of English capital, given
another trial.
Klerksdorp is about 100 miles south-west of Johannesburg, 1
and lies close to the border of the Orange Free State. During
the exciting days of 1887-90, dozens of mines were floated on
the numerous banket reefs that exist here. These all came to
grief. The reefs at Klerksdorp, while fairly regular in occurrence,
are invariably low grade, yielding from 4 to 7 dwts. It is
quite possible that at some distant date these reefs may be
worked to pay expenses, but the question is one which need
not trouble investors ; there could never, to my mind, under
any circumstances likely to exist for many years to come, be
a margin of profit sufficient to attract outside capital.
In the "boom" of 1895, all the earlier floated mines, j
which had been lying for years unworked, were refloated, and
a large number of new mines were added to the list. So keen,
for example, was the competition to secure ground for flotation
in England, that a block of claims that I had held in 1893,
and had abandoned after proving their worthlessness by boring,
was floated in 1895 f°r £225,000, as the Southleigh Mines,
Limited.
On the " Eastleigh " line of reef, the success of the Eastleigh ;
Mines, which consisted  in  the fact  that  the  mine  was   worked
Heidelberg
Roodepoort.
Hex River. TRANSVAAL.
Eastleigh
Deep, Eastleigh Block l
Westleigh,
Southleigh,
for two years without losing money, caused the flotation of
the Eastleigh Deep, Eastleigh Block A, Westleigh, Southleigh,
and Ariston.
It may be news to the directors of such of these companies
as have not yet gone into liquidation, to learn that, at a certain
depth, the "Eastleigh" reef, which near the outcrop is a well
defined banket body, becomes a large mass of almost " bastard "
reef matter, carrying pebbles only here and there, and worth
less than 2 dwts.
This fact I ascertained in 1893, from boring on the claims
now belonging to the Southleigh, and I see the same thing
referred to in a clever book on the Klerksdorp district, published
about two years ago.
The Eastleigh has a considerable amount of ore developed
which would probably pay for treatment if the mine were
equipped with the best machinery. There is only one principal
chute of ore, however, and as, at any moment, this may turn,
in depth, into bastard reef, there is considerable risk in putting
up the £100,000 necessary to pay off the company's debt, and
to provide the machinery required.
The other lines of reef, do not, apparently, show this unpleasant feature—that is to say, of a banket reef, well defined
at the outcrop, turning into a " bastard " reef in depth. But
they are invariably low grade and have never yielded consistent
profits.
The Klerksdorp G. M. Company is periodically reconstructed,
and is, apparently, always on the point of starting a dry crushing
process which is to be a great success. I should be surprised
if this mine worked at a profit for six months consecutively.
The Afrikander is a property which infatuated shareholders
in England will not consider as unpayable. As a matter of
fact a careful inspection of the mine showed me that there was
a chute of fairly good ore, about 300 feet long, but all the rest
is low grade. This chute is only big enough to yield profits on
a  very   small   capital—besides   there   is   no   guarantee   that   the 1
These
are
poc
ets
on
/hich
sp
urt
in
the
Afr
ik
inc
er
m
arl
et
TRANSVAAL. 109
chute will continue in depth,
to buy shares, and on the fii
shrewd speculators should sell out.
The Niekerk is a mine that has been much puffed from time j
to time in the English financial press. As the mine appeared,
from assays frequently published, to be opening out so remarkably well, it is curious that the directors should have turned
their energies, and what is much more important, the company's
cash, to the acquisition of a block of claims on the Main Reef
at Johannesburg. The latter asset, as a matter of fact, is
probably more valuable than the mine at Klerksdorp, but in
any case the public should most carefully avoid Niekerk shares.
Klerksdorp   Proprietary,   Southern   Klerksdorp,   Rietkuil, ;
Wolverand,   Palmietfontein  mines—all   come   under   the   usual :
Klerksdorp   category   of   low   grade   properties.      There   is   no :
reason to think that these mines are payable.
'almietfon-
the   Buffelsdoorn   district,   the   Buffelsdoorn   mine   itself Buffeisdoom
at work, but the Buffelsdoorn A, Buffelsdoorn  Central, adorn Centrai,
and Buffelsdoorn Consolidated, having failed to find any payable
ore, are shut down.
Buffelsdoorn, with an issued capital of £550,000, and a :
debt of £350,000, has been one of the notorious mines of the
Transvaal. With its enormous debt, combined with the fact
that the most strenuous efforts of the management only suffice
to earn enough profit monthly to pay interest due, there is
little hope that present shareholders will ever get anything
out of the mine. And, yet, how easily this present hopeless
condition of affairs might have been averted.
In 1895 the company received for its Buffelsdoorn A shares
£400,000 in hard cash. With heavy undertakings for machinery
and development in view, combined with the fact that the
mine had never paid a previous dividend, a sound engineer
and careful directors would have decided to keep this money
in hand for the company's heavy future requirements.
Buffelsd
Consolic TRANSVAAL.
But the Board at once proceeded to pay away the whole
£400,000 in the shape of an 80 per cent, dividend. As a
matter of fact, this distribution was called a "bonus" not a
dividend, but the result to the company was the same. Since
then nothing but misfortune has pursued the company. When
the large mill of 140 stamps commenced crushing there was
a heavy debt. For months, almost for years, operations were
, and even now, when only a few stamps
on picked ore, the monthly profit barely
ïionthly interest on the debt.
little good to criticise adversely a mine
idoorn. The events alluded to happened
some years ago, and shareholders have doubtless realised their
position long ere this. The lesson that should be drawn from it,
however, on the part of investors is, to beware of the state of
things brought about during a " boom." (Since the foregoing
was written it has been proposed to reconstruct the company.)
In the Potchefstroom district, adjoining Klerksdorp, there
are one or two unimportant mines, now shut down. These
are Potchefstroom Exploration, Amazon, Venterskroon, and
Rooderand.
carried on at a lc
are being worke
suffices to pay th(
It really do.
such   as  the   Buff
Rooderand is situated in the Orange Free State ; it possesses
a large area, -£50,000 in cash, and numerous reefs which are
unpayable.
None of the mines in the district are worth attention.
The De Kaap district, of which Barberton is the headquarters, lies 200 miles east of the Rand on the borders of
Swazieland.
In 1884-5 ^e discovery of gold at Moodie's, a mountain
range close to the present town of Barberton, brought about a
rush from all parts of South Africa to the district. In 1886 the
rich patches of ore' discovered in the neighbouring mountains,
notably at the Sheba, led to the arrival of a number of
capitalists from Kimberley—the then financial centre of South
Africa—and a " boom " was inaugurated. TRANSVAAL.
Early in 1887, this being the first of my five journeys to
South Africa, I found myself, after a two months' journey in an ox
waggon from Natal, as a sightseer only, in the picturesque mining
camp of Barberton, then at the zenith of its prosperity.
Since those days De Kaap has slowly but surely proved
itself a failure as a gold field.
The reefs, some of quartz, others, such as the Sheba, Gee
apparently of quartzite, are entirely different in their nature from
those of the Rand. They run through the mountain ranges with
wonderful regularity, cropping out here and there in rich patches
of gold. These patches rarely continue in depth, and mine after
mine has started on such a patch only to shut down finally after a
few months' work.
De Kaap is entirely discredited at the Rand. In England,
mainly on the success of the Sheba, it has always been held in
better esteem, and the 1895 "boom" resulted in the flotation,
on previously abandoned ground, of a large number of new
companies. Not one of these companies has as yet been a
success.
Of about forty mines in existence, or recently in existence, at Th<
De Kaap, there is only one, the Sheba, which has ever attained
the position of a permanent mining enterprise. I have no wish to
make the position of De Kaap seem worse than it really is.
Perhaps the district has never had a fair trial, and even now there
may be five or six small mines which may be brought to a regular
profit-earning stage ; but one must be guided by facts.
It is now fourteen years since the district was opened up. A
large amount of capital has been from time to time laid out in all
sorts of mining ventures, and the aggregate result has been almost
invariable failure.
I append some notes about individual mines in the De Kaap
district.
Sheba.—Issued capital, £"1,075,000. Sh.
The past history of this mine entitles it to the position of one
of the notable gold mines  of the world.    Briefly described,  the
T w
TRANSVAAL.
mine consists of a wide reef of quartzite, dipping at 45 degrees,
and . carrying one main chute of rich ore which has been
proved to 1,500 feet on the incline. In many places, notably
on levels 7, 8 and 9, the chute ore has been of exceptional
richness, perhaps averaging 2 ozs. per ton, and of a dimension of 100 feet long, and 60 feet wide. But the chute has
been irregular in value, and there is no disguising the fact that
all the ore opened up below the 16th level (the shaft is now
down to the  19th) has been unpayable.
In the upper levels nearly all of the rich ore has now. been
worked out. The mill is being increased to 200 stamps, and on
this basis there is quite five years' ore in sight in the mine ; but it
is distinctly low grade, and probably will not average more than
48s. per ton recovery value. In addition to this I consider that
all the rich ore in the Zwartkopje claims has now been worked
out, and I look on this particular mine as of no further value.
The Oriental and Edwin Bray claims continue to yield a certain
amount  of payable  but low grade ore.
Various theories have been put forward to account for the
recent falling off in the returns from the Sheba, but I am convinced
that the only explanation is that the mine has now become a low
grade property, and promises to continue so for a long time to
come.
A chute of ore which has continued rich, for 1,500 feet in
depth, even a quartzite vein, may logically be expected, even after
a temporary falling off in value, to again become rich at a still
greater depth. This view of the case will no doubt be taken by
many Sheba shareholders.
A real improvement in the bottom of the mine would be
welcomed by mining men all over South Africa, and, of course,
would have a most important effect on the intrinsic value of the
shares.
Taking hard facts into consideration, however, and ignoring
problematical discoveries, my opinion is that Sheba shares, as an
investment, are not worth anything like their present price
of 35S. 1  United  Reefs   (Sheba).—Generally  known  as   Joe's   Luck, United Reefs
said to be improving in depth.    I have not inspected the mine. (Sheba)'
There are fifteen stamps, and a cyanide plant at work.
The United hry Mine, on Moodie's mountain, has, from time United ivy
to time, paid small dividends under careful management, but these
have ceased for some years now. There are two small chutes, on
different reefs, which have been followed down a considerable
distance. I am afraid there is no reason to think that much
improvement can be expected.
The Woodbine, also on Moodie's, is a "small chute" mine. Woodbine.
Recently a large sum was spent in equipping it with a fine plant,
and   twenty   heavy   stamps.      No   very   good   results   can   be
looked for.
There are a few more mines at De Kaap, and in Swazieland Some possibly
which,   so   far,   cannot   be   considered   to   have   been   proved Delcaap
unpayable.    These are :— mines.
Woodstock. Consort.
Clutha. Albion.
Sheba Queen. North  Sheba.
Royal  Sheba.
I cannot hold out hopes to the shareholders in any of these
seven mines that they possess a really sound property,- but from
an inspection (although not very recent) of several of these,
together with information gathered about the rest, I think that
careful and economical development, to a certain extent, is
justifiable : it is not justifiable, however, to yet think of erecting
stamps for any of these mines.
The remaining De Kaap properties, in my opinion, have
little or no prospects, and need not be dealt with here.
The Lydenburg district is, on the whole, the most important Lydenburg
district in the Transvaal after the Witwatersrand.
At Heidelberg, Klerksdorp, and Potchefstroom, there are
banket reefs : at De Kaap quartz lodes : while at Lydenburg the
reefs are stratified veins, of water formation, and entirely different
from either of the foregoing. w
I 14 TRANSVAAL.
These reefs, lying nearly flat, run through the mountains,
and the outcrop can frequently be attacked from all sides
simultaneously. The reefs are usually narrow, and frequently
irregular in value, they are difficult to mine, and, on the whole,
have proved disappointing.
From 1871 onwards for a number of years, Pilgrim's Rest, the
most beautiful spot in the Transvaal, now the centre of reef
mining of the Lydenburg district, was a flourishing alluvial field,
and supported hundreds of diggers. For some time, however,
this industry has practically ceased, and has been superseded by
the more prosaic reef mining.
Since its commencement as a gold field the best mine at
Lydenburg, or rather at Pilgrim's Rest, has been the Transvaal
Gold, now known as the Transvaal Mining Estates. Here a
number of reefs are worked. Of these the " Theta" reef is much
the richest, but as this reef is found lying flat on the top of a
mountain, containing a limited amount of ore only, and as it has
been extensively drawn upon for years, it is being rapidly worked
out. With the working out of the "Theta" reef, the Transvaal
Mining Estates will have used up its most valuable asset. No
doubt for years to come the company will continue to make fair
profits from its other reefs, some of which are now well developed,
but considering the very large capital—£"604,225—the shares
appear to be much over-valued.
Lisbon Berlyn, a concession covering several farms in extent,
with its main mine working some seven miles distant from
Pilgrim's Rest, is one of the celebrated mines of the Transvaal.
The celebrity it has attained is more due, however, to . the
extravagance with which it was inaugurated! and to the
eccentricities and the amusing stories told about an early manager,
than to the company's profits, which up to. the present time
aggregate considerably less than nil.
When I visited the property, the handsome hand-painted
crockery sets, of which earlier visitors even now speak
enthusiastically,  had  vanished,  but  there  were  still  many   silent 15
witnesses  of the   lavishness and extravagance   that   the   original
directors had bestowed on this celebrated mine.
Reduced to its present basis, the company crushes at irregular
intervals from a flat lying, highly refractory reef, with an occasional
monthly profit of a few hundred pounds. The principal, in fact,
almost the entire extraction, is gained from the tailings. The reef,
which has not been developed to any great extent, is of fair value,
but owing to its refractory nature only a small extraction is
possible. On the whole, the mine may, with advantage, be left
alone.
At Spitzkop and Graskop mining operations are irregularly Spitzkop
carried on  with poor results.    The formations worked are both
alluvial wash and reefs, but no deposits of a permanent value have
ever been found.
At Barrett's Berlyn results from the same sort of deposits Barrett's
have recently been of a fairly regular nature,  and several small
dividends have been paid.    This sort of mine, however, is, at the
best, a poor class of investment,  and the public may safely be
cautioned against investing its money in them.
The mines in the district which have, apparently, still poorer Poor mines,
prospects, are :—Coetzeestroom, GroQtfontein, Lionsdale, Lomatie,
and Truer River.
Glynn's Lydenburg is a sound mine, with ore opened out for Glynn's
some years to come.    The machinery is worked by water power,    y e" urg'
and  as working costs are therefore low,  fairly good profits  are
returned.    The shares stand at £2-|-, and are too high, at least, on
the results up to date, but the mine promises to have a successful
career.
There are several exploration companies at work in the
Lydenburg district. These own large tracts of land, but as
yet  none   of them   have   found  payable   reefs.
The Murchison Range lies in the unhealthy " low country " Murchison
in   the   north-east   of   the   Transvaal.     Mining,    owing   greatly
to  the  deadly fever   season which   exists   during half the   year, Il6 TRANSVAAL.
has languished in the district for years, and the whole Murchison
Range is now practically abandoned. To reach this district
the Selati Railway was commenced, but, after the earthworks
had been completed for about fifty miles, was abandoned in
1895.    The prospects of the district do not warrant its completion.
At various times the Selati, the Sutherland Reef, the
Gravelotte, the Free State, and other companies have attempted to
work the quartz reefs of the district, but always without success.
The Murchison Range, however, is not entirely bad. A personal
inspection of the district satisfied me that, given a healthy climate,
there are numerous small patches which it would pay to erect five-
stamp mills to work, and which would yield good profits to small
parties of working men. But it will be years before civilisation
spreads to the Murchison Range, and in the meantime the deadly
malaria prohibits such work being undertaken.
At the Klein Letaba, still further to the north-east, some
extremely rich patches were found in 1891-3, and the Birthday,
Ellerton, Letaba, and Ella mines were floated to work them. All
of these patches gave out suddenly, once more illustrating the
particularly treacherous nature of quartz reefs in the Transvaal,
and for years all these mines have been shut down. m
CHAPTER   IV.
THE   GOLD   MINES    OF    INDIA.
All the principal gold mines in India are situated in the H
Kolar district of the native State of Mysore. The boundary
line of the Madras Presidency, however, is only a mile or two
distant, and, as the gold bearing formation continues in that
direction, the most southerly mine of the group is actually
situated in Madras. The mines are connected by a small
branch section with the Madras-Bangalore line, and can be
reached by rail from either Bombay in forty hours, Madras in
twelve hours, or Tutecorin in thirty hours. The country
surrounding the mines, which lies at an elevation of 2,800 feet
above the sea, possesses few features of interest ; the blue
outlines of mountain ranges are visible in the distance, but the
near neighbourhood presents only an undulating, uncultivated
tree-dotted expanse, an unpleasant contrast to the luxurious
foliage and well-tilled paddy fields of the lower-lying ground
of Southern India. The climate is fairly good, although mild
forms of fever and ague are common, but Europeans run a
considerable risk from the epidemics of cholera and small-pox,
which are continually breaking out among the native workmen.
I was assured, and can well believe it, that the prejudices
connected with the caste system make it almost impossible to
combat the filthy and insanitary customs of the natives. As
regards the bubonic plague, which seems to be gradually
spreading outwards from Bombay, there have, as yet, [Note A]
been no cases nearer than Bangalore. Until it is stamped out,
however,   there  is  always  the  fear  of an  outbreak among the Il8 INDIA.
thousands of natives employed on the Kolar field, and should
that happen it might cause a serious check in the development
of the gold field.
To complete a general description of the field, it may
be stated that there are sixteen mining companies in existence,
and there are at present [Note A] 525 stamps at work. The
central three or four miles of reef presents almost as crowded
and busy a scene as a like section of the main reef near
Johannesburg, although the substantial stone chimneys and red
tiled roofs afford a distinct contrast to the smoke stacks
and everlasting galvanised iron of South Africa.
As regards the geology of the field, the formation in
which the reefs are found is a bed of schistose rock, which
is about fifteen miles long. In the centre, this bed is from
three to four miles broad, but towards each end it tapers down
to a much narrower width, and finally disappears. This bed
of schist is surrounded by granite, so that the entire area of
the field can be easily determined. A curious feature of this
schist bed is that at one side it dips east, at the other side west,
while in the middle it lies vertically. This phenomenon has
given rise to all sorts of geological theories. It is, I think,
quite certain that the main or " Champion " lode is a fissure
vein. Although in places- considerably cut up by dykes and
faults, it holds its course in depth with great regularity, and
throughout probably averages four feet in width, with a dip of
from forty-five to sixty degrees. To the north and south
extremities of the field the lode splits up into several sections,
and these, although carrying gold, are decidedly treacherous
and irregular. Then, again, there is a series of reefs 3,000 feet
to the west, known as the West Reefs. Several of these are
worked by different companies, but although the reefs are
well-defined and regular bodies, they have not yet been found
payable over any large area.
To summarise the reefs, there are :—Firstly, the main lode
on which the richest mines are situated ;   secondly,  the  branch n
X ''               ]
^%'/
£$f
s^ri
>   //
§É?i '/
ftS&îÇ     o
N    &
Ï^&V ^
1
^;
^
*>
*
So
i\^
°i
^
CJixvNV
^
t
^
1
o
<o
/'      <>^v                     Q
P
1 i it>   $
$
^^^~^
^
SB/rÊ;- -v^vv:
.^3
5" -
V
/V^"^^.
5
b
1
^
k  "to
■
1
1   jB§ 1
'!        ^             ^
i                        <û
*>
So
?~^r~-1
|
<o
^         ^
$
Ji_
<o
i"
i
%     ^
pf   ?
ç
i;             38É -fe
i
7                       **•                         =3
s
^         ^
^
'<             ^x*.
i
À    * * f# i     15
Tan
Bloc
rient
/ j^^~~-~~t~^L  /
B^rH   "\ H   Ô *§          /               ~—-i~
Cor
man
LU
ai
o
nz
O
ce
en
LU
o
o
en
Q
ai
<
—i
o
is:
Li_
O
o
LU
en
<
ce
z
LU
o  sections of- the main lode, which in places are rich, but not so
regular in gold contents; and, thirdly, the West Reefs, which
so far have not been  found payable.
The payable gold invariably occurs in chutes. For example, c
you may drive for 300 feet on a well-defined reef that only
carries 1 dwt. of gold to the ton ; the next assay will give 1 oz.
to the ton, and without any visible change in the nature of the
reef, you will find yourself in rich chute ore. This may continue
for 100, 200, or 500 feet, when the gold will give out as suddenly
as it came in. These chutes can generally be relied on to
continue in depth, but instead of going straight down, they
almost invariably dip rapidly to the north. The consequence
of this is, that a chute of ore discovered near the north boundary
of a mine is of comparatively little value to it, because at a depth
of a few hundred feet it will probably have dipped entirely into
the next property. Although the chutes may generally be
expected to continue in depth, this is not invariably the
case. Some valuable chutes, which have been worked for
years, have recently, to all appearance, given out. On the
other hand, some of the deepest workings on the fields indicate
that several of the chutes are increasing in width, if not also in
richness. I am inclined to think that, on the central section of
the lode at least, the chutes will continue in depth, or, should
' they give out, that others will be found of equal value to take
their place.. '
The commencement of modern mining in the Kolar district, 2
which dates from about 1880, was due to the discovery of
numerous ancient workings, many of which can still be inspected.
The ancients prospected about on the surface till they came
upon the commencement of a chute of rich ore. This they
would work out, with the rude appliances of the day, actually
to a depth of 150 or 200 feet. The method employed was
evidently to heat the ore by means of a fire, and then to throw
cold water upon it. After this it was rendered more friable, and
could be worn away by being hammered with pieces of a harder m
rock. More mysterious than this must have been the methods
used for getting rid of the big flow of water that would be
encountered in depth, and especially for keeping the water away
from the fires. Large gangs of workmen must have been
employed to continually bale and pass up vessels of water to
the surface. As if to bear out this assumption, I was shown
an old working in the Coromandel mine, in which, the superintendent assured me, were the remains of hundreds of old
vessels for carrying water, while series of niches, evidently to
hold the feet of the workmen who were baling and passing up
the water, were cut in the footwalls. We were standing in a
drive 200 feet below the surface, and close by, the blasting had
exposed a section of an old stope, the deepest part of the ancient
workings on that particular chute. I would have explored this
to see for myself some of the relics referred to, but I found that
the breadth of the stope, which had been big enough to enable
the ancients to work in and to hammer the quartz to pieces,
was not wide enough to contain my body.
The management of the mines on the Kolar fields, nearly
all of which are controlled from one centre in London, compares
more than favourably with most other English-managed mines.
The local superintendents strive to attain regular rather than sensational returns, and at the same time, endeavour to have their
mines so opened up that a similar yield for several years ahead
may be expected. I was furnished with full letters of introduction
to all these mines, and can testify with pleasure that every
individual manager gave me the fullest information on all
points.
I spent two weeks at Kolar inspecting every mine that was
at work, and, although I do not consider that in every case the
most approved methods for the cheap extraction of gold are employed, yet I can decidedly affirm that every mine of the Kolar
field, whether its future is likely to be successful or not, is at least
an honestly conducted, legitimate mining venture. The chief defect
in the system of working I found to be a lack of centralisation of machinery and plant. The reason for this is the uncertainty as
to the future, which prevailed until a year or two ago, and the
gradual manner in which the plant had to be increased to meet
the growing requirements of the mines. For example, several
of the largest mines possess three mills. Each mine has from
three to five hauling shafts and from three to five air compressors,
and several stone-crushing stations. Separate boiler plants are
required for most of these. The result of this is increased costs
in fuel and labour. I do not know that anyone can be blamed
for this state of affairs, but, at the same time, I am of opinion that
the system of mining in vogue on the Kolar field does not fully
estimate the value of surface centralisation. There are notable
exceptions to this. At the Nundydroog mine the two batteries
formerly in existence were some time ago made into one. The
saving on this alone, the superintendent informed me, was is. per
ton. At the Coromandel, also, and several of the more recently
started smaller mines, the equipment may be considered as well
centralised.
Another defect to which I wish specially to draw the
attention of directors, is the system in which the working costs
are made out. The reports issued by the different companies are
invariably very full and complete, except as regards the details of
the expenditure. In gold-mining accounts a separate statement
of working costs should always be given, and the minutest
analyses of expenditure worked out to the ton milled, should
show the cost of every material and every process employed.
I feel certain that until this system is employed the full value
of centralisation will not become apparent. With these two
exceptions, viz., lack of centralisation of plant, and a system of
accounts which does not include analyses of working costs, the
general standard of management and of work may be considered
good. I would specially instance the survey department; and
the engineering department, with all the bigger mines doing their
own casting, seems to be invariably well conducted. Below ground,
the work done has generally been of a sound nature, and the large
reserves of ore in most of the  mines  constitute  a  particularly f
satisfactory feature. A notable change, too, on the very subject
of centralisation is taking place. The Mysore Company has just
erected a heavy-head 120-stamp mill to take the place of its three
old mills, and also one central crusher station, instead of three as
formerly. At least four of the bigger mines are sinking new main
vertical shafts, to cut the reef at from 900 feet to 2,500 feet.
Several of these shafts are already [Note A] nearly completed, and
as they will in each case take the place of several old shafts, their
importance is very considerable. These improvements will most
certainly effect reductions in costs, but unless a system of analyses
of working costs is adopted, shareholders will not realise the
importance of the reduction, and their value, as criteria for still
further improvements, will be lost to both directors and
superintendents.
For reasons already stated, it is a matter of difficulty to
arrive at an accurate statement of the actual working costs of the
Indian mines. They may roughly be said to range between
30s. and 40s. per ton of 2,240 lbs. White labour is not a
particularly costly item, as many of the white miners are Italians
who go to India on contract at £"6 or £"8 per month. Black
labour, at the first glance, seems to be exceedingly cheap. The
average native receives from 5d. to 8d. per day, and natives at
about this rate of wage are employed to work rock drills, to blast,
to drive engines, and generally to do all sorts of work that in
other gold-mining countries could only be entrusted to white men.
All stoping is let by the fathom to native contractors, so that the
responsibility for a regular labour supply falls largely on the
contractor and not on the company. There is, however, no
scarcity of native labour. With all this, native underground
labour is not cheap. The rock drill men rarely show any ability
to save dynamite ; the ordinary hammer or stope native does not
get through half the work of a Rand Kaffir ; while one and all
need the closest supervision or they would do no work at all.
Timber has to be used in quantities in all the mines, and is an
expensive item. It is brought from Calicut on the west coast,
some of it, especially the teak wood, being amongst the hardest of all timber.    Coal is, relatively, the heaviest item, and its cost Coal.
probably ranges from 7s. to  us. per ton of ore milled.    Bengal,
Australian, and English coal is used, costing from about 24s. to
35s. per ton delivered, but the relative value of each description
does not seem to have been yet decided.    Dynamite, owing to Dynamite.
the great hardness of the rock, and to the want of skill of the
native workman, is a moderately heavy item.   All the mines are
supplied  under one contract by Nobel's.    The contract price is
kept a secret, but the average cost per ton milled, works out at
under  3s.    The  scarcity   of the   water  supply  forms  a serious
question.    The Nundydroog mine was recently flooded 300 feet Water.
under water, but several of the larger mines, notably the Mysore
and Champion Reef, have at times barely enough water to keep
their stamps at   work.    The   Champion  Company's payment for
water works out at 7d. per ton milled.    Cyanide treatment is very Cyanide.
cheap.    Tailings can be screened, filled into tanks, and emptied
for 4d. per ton.     Little cyanide, too, is required.     The extractions
I assume to be fairly good, but no figures are kept.    The Mysore
Company has erected a large plant to treat slimes and residues,
which are said to assay only 2 dwts., and it is claimed that a profit
will be made on this.    To secure good cyanide extractions,  it is
necessary to use a screen in the battery of at least  1,200 mesh.
This fact has only been thoroughly demonstrated recently.    Shaft Shaft sinkin
sinking is carried on at the rate of twenty to twenty-five feet per
month.    The  excuses offered for this low standard of work are
hardness of rock and climatic  effect upon  the white miner, but
there is room for very considerable improvement.    The estimate
by  the   Nundydroog   Company  for   a   shaft    1,000   feet   deep,
timbered,  and fully equipped  with  hauling,  pumping,  and rock
drilling machinery is Rs.326 per foot (£"21   15s.).    The following
table,   drawn  from  recent   yearly reports   of   the  five  principal
mines,  gives  a  rough   idea  of   the   costs of different materials
and of labour, but owing to the lack of details in the accounts,
it  can   only be  a  crude  summary,   and,   therefore,   not  strictly
accurate.
1 m
i
1
1
o
il
iffHR
1
ii
5-
o
■
■                                                            g
i
i
Is
1             T^~l
!
S
^^^■11
1
Items of Expenditure:—
Fuel	
Dynamite
Timber          	
Native labour...
White labour...
Water	
Transport of gold
Administration and general ...
Unspecified   ...
i
I II   t
IP a-
m ô
WËÈm 125
We now come to the discussion of an important subject, Legisiati
that is to say, the legislation of the Governments of India, and
of the tributary States, as affecting the gold-mining industry.
The mines of the Kolar field, lying as they do in the native State
of Mysore, come under the government of that State. The
ground on which the mines are now situated is part of the area
of a concession granted by the Mysore Government to certain
parties about 1881. The royalty to the Mysore Government
from this concession was fixed at 5 per cent, of the gross
yield, and the period of the concession for thirty years ; it will,
therefore, be seen that the leases of all the mines on the Kolar
field have only twelve years to run. In 1897, the royalty paid to
the Government from the Kolar mines was -£75,000, besides large
indirect receipts from railways and from the various subsidiary
industries which the gold industry has brought into existence.
It appears, however, that the Mysore Government, which is
controlled for the young Maharajah by the Dewan, or Prime
Minister, a very able Brahmin, is not satisfied with the revenue
derived from the gold fields, especially the proportion from such
exceedingly rich mines as the Mysore and Champion, and wishes
to raise the scale of taxation. Nothing, of course, can be done
to increase the taxes from mines already in existence until the
present leases run out in twelve years, but it has been notified by
the Government Gazette, and publicly referred to by the Dewan,
that one year before the expiration of the present leases, but not
before that, the leases will be renewed for a further thirty years.
The terms to be imposed by the Government for the new leases
are to be 5 per cent, of gross yield as before, and a per-centage
of profits in addition—but the Government has no intention, at
present, of stating what this per-centage is to be. In the course
of a conversation with the administrative head of the Mysore Mysore
Government Mining Department, I asked him the following ^™t'
questions :—" If your Government has decided that the mining
leases are to be renewed, which is a fact, why cannot the
different companies be allowed to take out these renewed leases
in   advance   for   the   satisfaction   of   their   shareholders?    And, w
secondly, why does your Government refuse to state the percentage of profit, over and above the royalty, which the mines
will-have to pay to Government on the new leases? Is your
Government aware that these proceedings may do great harm
to the Mysore gold industry ? "
To these questions the official could give me no satisfactory answer. I have not finished yet with my statement
against the Mysore Government. It has recently published a
form of prospecting license. The cost of the license is Rs.500
(£"33 6s. 8d.) for a year, and the area to be prospected must be
limited to ten square miles. The third clause of this license
reads as follows :—1 The Government reserve to themselves the
power of refusing to grant a prospecting license in respect of
any area without assigning a reason, or to impose such special
terms as they may in their absolute discretion think desirable.
Special terms will generally be imposed where land comprised
in the application for a license has been prospected by Government officers and found by them to contain auriferous or other
valuable minerals, stones, or rocks, or any old workings, or other
indications of their presence." According to this paragraph, it
would seem that the finder of a presumably payable gold reef
may in effect have to fix its location almost exactly before he can
receive a license to prospect the area in which it is situate.
Accordingly, any official or person who receives this information
can send a Government officer to find the reef also. After the
reef has been viewed or prospected by this same Government
officer, the Government can, without assigning a reason, refuse to
grant the discoverer of the payable reef a license. It is obvious that
such a state of things as this leaves the door open for grave abuses.
Paragraph 9 of this same interesting production reads as
follows :—" If the license is refused under Rule 3, or if the
applicant, within a fortnight of being informed of any special
conditions under Rule 3, declines to accept them, the said
sum of Rs. 500 will be refunded to him."
This is very thoughtful of the Mysore Government, but
who   is  to   decide  what  the   special  conditions  are  to  be ?    A 1 iïr 1
INDIA. 127
further proclamation states that, should any prospecting lease be,
after this, turned into a mining lease, the royalty to Government
from the company to be formed is to consist of 5 per cent, of the
gross yield of gold, and from the vendor himself, one-tenth of the
consideration received on the assignment of the lease, either in
cash or shares, as the Government may determine. Finally, and to
again exemplify the unbusinesslike methods of the Mysore Mining
Department, I turn to a proclamation dated December, 1897, from
the Bangalore Gazette. The Government is calling for tenders
for mining leases in certain special districts. Clause 2 of the
notification reads :—| Each application must state what consideration (in addition to the 5 per cent, royalty, and one-tenth of
the assignment price) the applicant is prepared to pay to the
Government of Mysore. Such additional consideration may be
either in the nature of a present or future payment, or of a
share of profits." Clause 5 :—" The Government reserves to
itself the right to reject any application, without assigning a
reason." Here, again, we trace the influence of the mysterious
personage who is to have the deciding of all these delicate
questions and important financial details, and, as Mysore is a
native State, there is plenty of room for the suggestion that the
post, if occupied by an unscrupulous person, might prove a
lucrative one.
My deliberate opinion is that the Mysore Government,
at present constituted, is incapable of deal
ments of the gold-mining industry, and that its recent legislation
on the subject tends to retard the progress of the industry. Of
the unbusinesslike and unfair reading of some of its regulations readers can judge for themselves. Of course, Mysore
being a tributary State, there is an appeal from its legislation to
the Government of India ; but the Government of India, as also
the Government of Madras, seems to have as little knowledge
of conducting a mining industry as does the State of Mysore.
There is no mining department attached to the Indian Government, and important technical and financial details are left in the
hands  of civil  servants,   who,   naturally,   are  quite  ignorant  of w
mining. The consequence is that the whole tenor of the legislation of the Indian and Madras Governments tends to smother
rather than to foster the gold-mining industry. A royalty of
y\ per cent, of gross yield already exists, and it is said that
this will be increased, while recently published regulations are
decidedly hostile in tone. The unwisdom of this is easily
apparent. The gold-mining industry, while paying royalties,
taxes, and customs dues direct to the various Governments, also
makes large purchases of Bengal coal, Calicut timber, and Madras
produce, while it furnishes the chief revenue of the Madras
railways, and employs, at a high rate of wage, many thousands
of natives from all over India. Is it much good, then, appealing
to the controllers of the Indian Government to bring pressure
to bear on the Mysore Government? Presumably, the Indian
Government has approved of the Mysore promulgation, and, if
that is the case, its incapacity and ignorance are evident.
The  present  position   of the   Indian   gold-mining industry,
from   a   legislative   point   of   view,   may   be   summed   up   as
follows :—
Legislative (i-)    There   are   no  mining  departments,   with  proper
affelt™ whlch technical and financial advice, attached to the Governments
shareholders. 0f India, or to the subsidiary States.    Important mining and
financial questions, and the whole policy of the matter, are
in    the   hands  of laymen,   civil   servants,   or  of politicians
such as the Dewan of Mysore.
(2.) The tendency of all the Governments, as the result
of this, is to place increased royalties and heavy restrictions
upon the gold-mining industry, and to stifle further development and progress, instead of realising how much good the
industry has done, and is doing, for India. The recent
mining regulations of the Mysore Government, which have
presumably been sanctioned by the Indian Government,
and which affect the whole future of the industry, betray
a lack of technical knowledge, an ignorance of business
methods,    and    a    one-sided     tendency,     where     financial details have to be settled, which the officials would do well
to take note of.
(3.) Shareholders in all the mining companies, the
leases of which expire in twelve years, are, according to
the intention of the Mysore Government, not to be informed
on what terms the leases are to be renewed. At this distant
date this cannot be accounted a very serious question—
not one to affect the value of the shares—but it serves to
illustrate the business methods and queer dealing of the
Mysore Government.
Before dealing with the different companies of the Kolar field Indiar
in detail, a brief summary may be given of the other gold mines field,
in India.    These are four :—The Wondalli is an offshoot of the
Hyderabad Deccan Mining Company.    The mine is said to be
developing well, and a debenture issue was recently made for the
purpose of bringing it to a producing stage.
The Mysore Kadur had, it was stated some time ago, a large
quantity of payable ore in sight, but recent reports do not appear
to be so favourable.
The Mysore Harnhalli and Mysore Nagar have no payable
ore.
Personally, and at the present time, I should strongly advise
investors to have nothing to do with any of these four mines.
To briefly summarise the mines of the Kolar field, it may Summ
be stated that Mysore and Champion Reef may be included mines.
among the great gold mines of the world ; while Nundydroog,
and more especially Ooregum, are sound mining ventures. These
four mines adjoin each other in the central section of the field.
Beyond this the main, or " Champion " lode branches into several
stringers, none of which are of much value, and all the mines
working these, as well as the mines working on the west series of
reefs, must be considered as extremely speculative. In other words,
while Mysore and Champion will bear capitalisation on a 10 per
cent, basis, Ooregum and Nundydroog should be bought to yield
not less than 15 per cent., and all the remaining mines, which rarely
pay dividends, should yield at least 25 per cent, to the investor. The following summary deals with each mine in detail :—
Balaghat. This mine has been re-constructed several times,
but has, so far, never paid. It is situated on the branch sections
of the main lode, and several of these are being developed.
There are several chutes of rich ore in the mine, but none
of these are of great width. Apparently the richest ore is
found on a chute which comes in from the Coromandel mine,
and is found in the Tennant's shaft section of the Balaghat,
near its southern boundary, at a depth of about 700 feet. The
ground here is somewhat broken up, but should the chute live
on the other side of the large dyke which exists here, a certain
amount of payable ore may be expected. In the main section of
the mine, between the Haines and Ogle shafts, a good deal of
ore has from time to time been mined. There is a chute here,
about 450 feet long, but the ore is of low grade, and is irregular
in value. On the whole, at the time of my visit, it was impossible
to assume that the mine would become a regular profit earner.
The twenty-five stamp mill, until recently, had not worked since
1894. The surface equipment is satisfactory. Balaghat shares
can only be looked upon, in the present state of knowledge as
to the mine's capacity, as a speculation.
Champion Reef.—Located in the central section of the main
lode, and developed by various shafts to from 800 to 1,400 feet
deep. This mine was floated as an offshoot of the Mysore ; in
1892 crushing commenced, and up to the end of 1898 £815,000
had been paid in dividends.
There is no doubt whatever as to the great value of the ore
developed in this mine, and equally as good returns as those
now being made are assured for the next five or six years at
least. But when a mine is capitalised, as is the Champion Reef,
on a basis of 10 per cent., it is necessary to look ahead for
more than five or six years, and I will therefore consider the
probability of the mine's existence after that period. At the
time of my inspection of the mine, nearly all the lowest
workings  were  in  rich   ore, thus showing  the  Champion  mine to have an unusually large area of ore chutes within its
boundaries. Some day, doubtless, following the almost invariable
law on this field, these chutes, in dipping to the north, will all
pass out of the Champion mine. But when will that happen ?
Already a rich patch of ore, plainly the continuation of the most
northerly chute in the Champion, has passed into the Ooregum.
At the extreme south end of the Champion mine, too, in the
neighbourhood of the Dalyell and Garland shafts, the ore in
depth is gradually becoming poorer. This would seem to
indicate that the lowest of this series of chutes has now been
passed through. But between these extremities, although it is
only partially exposed, there cannot but be an immense area of
chute ore, sufficient, I feel sure, to last for many years ; and,
after a year's consideration of the problem which the Champion
mine presents, I cannot think that, on a 10 per cent, basis, the
shares are  over-valued.
Within the next year or two the company can materially
improve its position with regard to working costs. At present
these are too high, mainly owing to a lack of surface centralisation. There are three batteries, numerous air compressor
and boiler plants, and too many working shafts.
A main vertical shaft is now being sunk. Round this, in
course of time, will be erected a new battery, instead of the
three now in use, and a central boiler plant and air compressor.
From this shaft most of the ore will be hauled, and its completion, and that of the surrounding central plant, will mean a
saving of anything up to 5s. per ton. This desirable change
should be expedited as much as possible.
The company has large reserves of tailings and slimes,
and ore actually blocked out to the extent of 200,000
tons.
Dividends of from 120 to 140 per cent, may be looked
for within the next year or two, and, as has been stated already,
the shares on their present 10 per cent, basis (calculated on
the dividend for 1898)—which would mean a valuation of
£5 1 os.—must be considered a first-class mining investment. JT?
Coromandel.—This mine is situated on the branch sections
of the main lode, and is, therefore, not in a favourable locality.
The estimated value of the two years' ore reserves, blocked out
at the time of my visit, has proved to be wrong, and the profits
which the mine made for several years have now practically
vanished. It is evident that the chutes found on the different
branches in the Coromandel, are treacherous in their occurrence,
and in depth they appear to have given out. Shareholders
must in future see a lot of payable ore in sight in this mine
before setting on it the value they did before. There are [Note A]
twenty stamps at work, and twenty more being erected. It is
doubtful, in the present condition of the mine, whether these
new stamps will be started. The working costs of the Coromandel compare favourably with any of the other mines, but
the shares are not, in my opinion, a good speculation.
f Gold  Fields  of India.—This company was formed for the
purpose of prospecting, and, if proved good, of floating certain
blocks of ground situated at the extreme north of the Kolar
field—a locality of which little is known.
The Krishnarajpur Block has already been privately floated,
but only on the assumption, quite unwarranted I fancy, that the
different reefs traversing the ground, which at the surface are
worthless, will become payable in depth. The shares of this
company, and of the parent company, may be looked upon as
entirely speculative.
Gold Fields of Mysore.—This proprietary company once
owned a great deal of valuable ground on the Kolar gold field,
but has, from time to time, sold all its best ground, and has
distributed the proceeds by way of dividends. It still possesses
six thousand acres, mostly unproved, the best portion of which is
so situated as to form a very deep level of the Mysore, Champion, Ooregum and Nundydroog mines. The company has spent
a good deal of money in developing a section of one of the west
series of reefs, known as the Golconda Block. This mine is now
800 feet deep.    Crushing goes on regularly with a twenty-stamp mill, but not with payable results, and the reef in the deepest
workings shows no improvement. The company, on a recent reconstruction, has the call on a large sum of working capital, most
of which will doubtless be spent on prospecting work over the
unproved areas. It is much to be doubted, however, whether
payable results will ever be attained from the west series of
reefs to which the company devotes its principal attention.
The Gold Fields of Mysore holds a large number of shares in
some of the adjoining mines to which it has sold ground. I
understand that these comprise 129,000 Kempinkote ; 50,000
Yerrakonda ; 11,417 Nine Reefs; and 10,000 Balaghats—plus
the further proportion of recently-issued preference shares in
these two last companies.
Kempinkote.—Originally the property of this company was Kempinkot
located at a spot 100 miles distant from Kolar. Here an
enormous reef was developed, but was found to be of too low
grade to pay. The company then acquired the ground of the
Indian Consolidated at Kolar. This, too, proved valueless. At
present an option has been secured from the Gold Fields of
Mysore over a block of ground adjoining. the Mysore mine to
the south, but, although a considerable amount of prospecting
work has been done on this block, no ore of a payable nature
has been discovered.
Recently a chute of ore, about fifty feet long, was found ;
this will be further developed, but its area is much too small to
allow of its being profitably worked.
The shares are entirely speculative.
Mysore.—Situated on the central section of the main lode, Mysore,
this property is of very large area, but, as in the case of the
other mines on the field, the rich ore is only found in chutes,
which cover a comparatively small extent of the property. The
workings on the principal chute of ore extend in depth to 1,900
feet, the deepest point so far reached in any Indian mine. As
in the case of the Champion mine there is no doubt as to the
results for the next  five years.    As to what may be expected nf
after that we must take the evidence afforded by the appearance,
in depth, of the different chutes.
At the north end of the property the chute of ore worked
in Gilbert's and Tennant's shafts appears to have dipped into
the Ooregum mine, and the bottom of Gilbert's shaft, presumably
having passed through the chute, has been in poor ore for some
distance.
At the south end of the property the chute of ore worked
from McTaggert's shaft, while not of first-rate importance, may
be expected to continue fairly good after it has passed from the
neighbourhood of the dyke which was lately encountered there.
It is, however, on the working of the three chutes in the centre of
the property-—" Crocker's," " Ribblesdale's," and " Rowse's "—
that the future of the mine depends.
Rowse's chute in the deepest workings, 1460 feet, continues
to give good ore, and may be considered one of the most valuable
assets in the mine.
It is, as yet, an open question as to whether " Crocker's. " chute
and " Ribblesdale's " chute are one and the same, and on the same
reef. A dyke, about 80 feet thick, running obliquely through the
mine divides one section from the other. Above the dyke is
Crocker's chute, containing undoubtedly the richest ore in the
Mysore mine ; below the dyke is Ribblesdale's chute, also of great
value and extent, but not so rich as Crocker's. In places the reefs
either overlap each other, or exist separately, but this point has not
yet been satisfactorily settled. Crocker's chute is exceedingly valuable down to the 1620 foot level, the lowest point at which it has,
as yet, been cut. There are 100,000 tons of ore blocked out on
this chute, and before it shall have finally passed into, or below,
the dyke, it may be expected to produce at least as much more.
Ribblesdale's chute has proved of great regularity down to
the 1620 foot level. But below this, so far, it has proved disappointing. The 1720 foot level, north from Ribblesdale's shaft,
has been driven along the reef for over 400 feet, but at the time
of writing [Note A] no payable ore has yet been met with.
It appears to me that payable ore should have been found on this 1 m level 200 feet back in the drive, and the fact is, so far, a distinctly
unfavourable point in the otherwise excellent outlook for the
future of the mine at a greater depth. The 1820 foot level, north
from Ribblesdale's shaft, has not yet reached the area of chute ore,
so no deduction can be drawn as" to its value at that point.
As before stated,  the  Mysore mine can easily keep up "itsI
present yield for five years to come.    As to the future, after that,
the two points to be noted are :—
(1.) Will  Crocker's  chute,   the  richest  in the   mine,  live
below the dyke ?
(2.) Will Ribblesdale's chute, which at the 1720 foot level
has   proved  less  regular  than  up above,   regain   its
value at a greater depth ?
Shareholders, and would-be investors in this, one of the
great gold mines of the world, should keep these two points
clearly before them.
There are several points of interest, in connection with the
general working of the Mysore mine, to be noted.
A new vertical shaft is being sunk to strike the imaginary
continuation of Crocker's and Ribblesdale's chutes at a vertical
depth of 2 500 feet ; this shaft will not reach the reef for some
years yet.
A heavy 120-stamp mill of excellent pattern, with a new
central crusher station and cyanide plant, has recently been erected
in the place of the three old mills, and otherwise decentralised
plant previously in existence. A noticeable reduction in costs
will be shown, as the result of this, when the next report is
issued.
During the next year or two dividends will probably be
increased to 140 per cent., but they will only stay at that figure
should the two points specially referred to by me turn out
favourably for the company.
Mysore shares are a first-class mining investment at £"5, and
the mine, with continually improving management, promises to
have a successful career for a number of years. m
136 INDIA.
Mysore West Mysore West and Mysore Wynaad.-—These two companies
Wynaad. conjointly work the Tank Block mine, which is situated on a branch
section of the main lode. The principal chute worked entered the
property from the Nundydroog mine, but, such is the treacherous
nature of these branch lodes, that it suddenly ceased to exist last
year, and no amount of exploration work has succeeded in
developing any more payable reef. The shareholders of the
combined companies, refusing to, admit that the mine was really
worked out, pluckily reconstructed their companies, placing an
uncalled liability of several shillings on all the shares, and further
explorations are now being carried out. Even should a further
chute of ore be met with, there is such a short distance of unworked ground between the present workings and the lower
boundary of the property, that the area of any new chute would
be but small. As a mine there seems little doubt that the Tank
Block is worked out. In addition to the Tank Block mine, the
assets held by the companies are as follows :—
By   Mysore  West,  (a),  one  hundred  acres on   dip   of
central section of main lode, of prospective value as a deep
level,    (b), Water-rights, leased for ,£1,250 per annum.
By  Mysore Wynaad,   (a),  fifty acres  on dip of central
section  of main lode,  of prospective value as a deep level.
(b), Water-rights, leased for £750 per annum.
These assets appear to me of greater value than the Tank
Block mine, but in any case the shares of both companies appear
to be over-valued.
Mysore Reefs. Mysore Reefs.—Situated at the extreme south of the Kolar
field, about six miles distant from the central section. Two chutes
of extremely limited width have been worked down to 750 feet
deep, but never with a profit. At the time of my visit to the
mine, twenty stamps were at work, but these have since been
stopped. Prospecting operations are going on in several parts of
the property, which is of considerable extent, but there seems
little probability that anything of value will be discovered. The
shares are entirely speculative. 1
Nine Reefs.—The mine worked by this company is situated Nin
on the west line of reefs which, to my mind, at once classes it as
extremely unreliable. So far, the mine, worked for a number of
years, has been reconstructed several times, but has never proved
payable. The deepest workings are now down to about 600 feet,
but although the reef is a well-defined body, very regular in its
occurrence,  it shows no sign  of improvement.
The shares are entirely speculative.
Nundydroog.—The area belonging to this company is Nur
situated where the main lode of the Kolar field splits up into
several branches ; the southern section of the mine is therefore
on the main lode, and the northern section on the branch lodes.
It will not astonish readers who have borne in mind my remarks
as to the treacherous nature of the branch lodes to learn that the
north section of the Nundydroog, known as Kennedy's, is a
failure. Good ore existed here at one time, but in depth part of
this chute dipped into the Tank Block, and the rest, without
apparent reason, died away. All the bottom workings in
Kennedy's section are in poor ore, and it is unlikely that this
section will again become profitable.
The chute lying on the main lode to the north of the Main
shaft is really the only chute at present known to exist in
Nundydroog which is likely to continue in depth. This is a fine
body of ore, as opened on the lowest level, 1240 feet, it is 400
feet long with a reef five feet thick. It is likely to maintain its
value in depth.
Last year the Nundydroog main workings became flooded.
This entirely prevented the further development of the main chute,
and as the total ore reserves in the mine at the time were only
about 50,000 tons it was decided to work with only forty out of
the seventy stamps which the company possessed. As development has only recently been resumed in the main mine, and as
very little payable ore has been opened up in Kennedy's section,
the ore reserves must now stand at a very small figure, and it will
be a long time, probably, before the mine again crushes with
seventy stamps. m
The management of the mine is sound, and may be expected
to develop the main chute as rapidly as possible ; the fact still
remains, however, that the Nundydroog mine, as to quantity of
ore, has not turned out so well as was expected ; the mine as now
known, cannot support seventy stamps, and future profits will be
smaller accordingly.
The shares at S| appear to stand at more than their intrinsic
value.
Ooregum.—This mine is situated between Nundydroog and
Champion Reef, on the central section of the main lode, and has
paid to date dividends of about £750,000.
The position of the company can be accurately summarised.
Originally several chutes, embracing a large area, were worked.
These chutes mostly gave out at a depth of about 800 feet, and
although a lot of development has been done below this, at from
1100 to 1600 feet, only one chute appeared to continue in depth.
This is a chute of ore in the southern end of the mine, adjoining
the Champion Reef boundary. At the time of my visit this chute
appeared to be going down almost vertically, and the prospects
for the mine, with no stamps to be kept employed, were distinctly poor. Immediately after that a remarkable change took
place. At the 1410 foot level chute ore was found extending to
beyond Taylor's shaft—a distance of 600 feet from the boundary,
instead of 300 feet on the level above, and this ore gives every
appearance of extending even further into Ooregum ground with
each succeeding level. Indeed it now seems almost assured that,
following the invariable northerly dip of all chutes on the
Kolar field, the immense chute areas found in the Champion mine
will eventually all dip into Ooregum. Already 600 feet of really
high grade ore is visible in the lower workings of Ooregum, and
this, mixed with the 60,000 tons of lower grade ore in reserve in
the upper levels, will probably result in an increasing output during
every month of 1899. The prospects for Ooregum could hardly
be more favourable. Ooregum shares are, to my mind, quite the
best purchase among the  Indian mines.    The mine gives every  m promise of becoming in a year or two almost as good as the
Champion Reef, and . in the meantime, it is capitalised at
(January, 1899) £"1,000,000, as against a valuation of £2,200,000
for Champion.
The capital is £"265,000 in 145,000 ordinary £1 shares, and
120,000 io0/° Preference £"1 shares. These latter, some of which
are not fully paid, are entitled to a 10 per cent, dividend, after
which all further profits are divided between both classes of shares,
and are, therefore, worth £"1 per share, more than the ordinary
shares. In either case both classes of Ooregum stock form an
excellent speculative investment.   .
Oriental.—This is the deep level of the Tank Block, and <
eighteen months ago, before the collapse of the value of the ore
took place in that mine, might have been described as a promising,
speculative venture. Now that the treacherous nature of the branch
lodes, on one of which the Tank Block workings are situated, is
better known, and the deepest workings in that mine show so
poorly, the outlook for the Oriental is considerably altered. In
addition to this, the shaft has now cut the reef at a depth, of
800 feet, and the assay results of the reef, now driven on for
some little distance,  are disappointing.
The company has exhausted its working capital, and the
shares can only be looked upon as entirely speculative.
Road   Block.—This  mine,   floated   several   years   ago,   is :
fore unlikely to become profitable. One cannot, however, in the
support of any theory, reason away facts, and I feel bound to state
that since the date of my visit developments in the mine have
been of a distinctly good character.
The mine is soundly equipped, and two good incline shafts
are being sunk on the reef, 1000 feet apart. No. 1 shaft, within
500 feet of the Nine Reefs boundary, has reached a depth of 300
feet, and levels are being driven ; up to the date of writing this
(February,   1899) several individual assays have  yielded  12  and
1
* w
13 dwts., but taking the average, the ore developed in this shaft
is not payable.
No. 2 shaft has been sunk to 300 feet. Along the 200 foot
level for a distance of 640 feet the reef has already been proved ;
it averages from four to five feet thick, and 22 dwts. value for the
whole of this distance. At the 300 foot level a cross-cut has been
put into the lode which, where cut, is five feet thick, and
30 dwts. value. The development at No. 2 shaft is, therefore, of
an exceedingly favourable character. The chute now bging
developed may be found to be lying flat, and may be of no great
depth, but already it is known to be 640 feet long, and probably
200 feet deep, and despite the fact that it is the only payable chute
yet discovered on the west line of reefs, the developments already
in sight place a speculative value of at least par on Road Block
shares. Further developments in this mine should be carefully
noted.
Yerrakonda.—This mine adjoins the Mysore Reefs at the
extreme southern end of the Kolar field.
When first floated a small patch of payable ore was found
and worked out.    After that, although the mine was developed
to 200 feet deep, nothing of further value was discovered.
The mine is now shut down and full of water.
The shares are entirely speculative.
A summary of the Indian mines leads to the following
conclusions :—
Mysore and Champion  Reef are  among the  world's  great
gold mines, and are each worth £5   10s. per   share as
sound first-class mining investments.
Ooregum  promises,   with   certainty,   to  greatly improve  its
position   during   the    next   two   years.      The   shares,
preference and ordinary, form the best purchase of any
in the Indian market.
Nundydroog shares are probably dear enough at ,£3.
Road Blocks are an excellent speculation at par.
The rest are, to my mind, purely speculative. TABLE    OF   GOLD   MINES   ON    THE   KOLAR   FIELD.
Name.
Shares.
Par
Value of
Shares.
Depth of
Workings
Stamps
Working
Dividends paid
to the end
of 1898.
Balaghat              	
160,225
£ 9
Feet.
800
25
I
io£Pref.
63,250
Champion Reef...
440,000
1500
150
727,500
Coromandel
i2>$>o°o
I 0
950
20
24,750
Gold Fields of India    ...
75,000
1 0
100
BE
llilSK
Gold Fields of Mysore...
275,000
HM
850
iBl
MBll
Kempinkote
748,495
||1|
300
-
461i
Mysore    ...
500,000
1900
120
^swws*
Mysore Reefs     	
i59,93o
sPf
750
$E$
fills
„    10 £ Pref.
34,980
Mysore West
130,000
1     o|
Mysore Wynaad ...
130,000
,     oj"
800
20
SeEiI
Nine Reefs         	
349,463
Brs
700
20
IllSë
„    20^ Pref.    ...
! 00,000
Nundydroog
242,000
ifcB
1240
40
421,274
Ooregum...
145,000
10
1800
no
720,106
10 % Pref.      ...
120,000
Oriental   ...
Il6,358
ftft
800
-
-
Road Block
150,000
SSii
300
HËfi
-
Yerrakonda
l87,370
0 4
200
Sll
iÉBï
Totals      ...
-
-
525
,£3,433,535
* Note.—The Mysore,  an
d Gold Fields 0
f Mysore h
ave   also
listributed
bonuses in
the
shape of shares
in other CO
mpames. w
CHAPTER  V.
Landing from the mail steamer at Albany, a night's railway
journey brings you to Perth, the capital of West Australia.
Perth, which before the discovery of gold was a small and
absolutely unimportant town, is now a handsome city of 40,000
inhabitants. It is finely situated on the Swan River, which here
emerges from the dense bush, and which opposite Perth is a mile
broad. The river pursues a tortuous course to the sea, twelve
miles distant. At the mouth of the Swan River is situated
Fremantle, the chief port of the colony, which is connected with
Perth by a double line of railway, over which express trains pass
every hour or so. Fremantle has about 10,000 inhabitants. It is
a busy port, but as yet, with the exception of the monthl
steamers of the North German Lloyd, which anchor outside the
harbour, no big boats have called at Fr
that most of the harbour is unprotected
the inner harbour is hardly large enough as yet t
steamers turning round in it. The Government
large amount of money, however, on the har
breakwaters, so that before long it will be
proved, but it wi
P. & O., Orient,
Fremantle instead
if the different Australian colonies decide to feder
may become the Brindisi of Australia ; passenger:
able to travel by rail from here straight to Ade!
Melbourne, and Brisbane, while the mails to Vict
South Wales will be expedited by three or four da
,eption
of   the  1
hich ai
ichor outï
lantle.
The rea<
'om cer
tain wind
,   hov
fever,
;fore
long
bably
be
Messa
genes
Alban
V-    I the subject of railways, it may be stated that the railway system West
of West Australia is already very complete and well-worked, ^ways?"
From Perth there is, firstly, the south-east line to Albany, 340
miles long ; this belonged to a private company, but was recently
taken over by the Government, together with certain land grants
which accompany the original concession, for £1,100,000.
Secondly, there is a line due south to the agricultural districts,
of which Bunbury is the principal town, together with several
branch lines, mainly for tapping the timber forests, which will
aggregate several hundred miles. Thirdly, there is a private
line from Perth north to Geraldton, 277 miles long, from which
Government branches run to Northampton, about fifty miles, and
to Cue, the headquarters of the Murchison Gold Fields, 300 miles,
or nearly 600 miles in all from Perth. Fourthly, there is the
eastern line to Coolgardie, 360 miles ; to Kalgoorlie, twenty miles
further on ; then to Menzies, the present terminus, 400 miles northeast of Perth. Altogether, there must be nearly 1,500 miles of
railways in West Australia, and, although the whole population of
the colony is only 170,000, it is satisfactory to know that these
railways are earning a big interest—something like 10 per
cent.—on the capital expended on them. From Coolgardie to
the South Australian border is 500 miles. If Fremantle can be
made a safe harbour for the mail boats, so that passengers
and mails for the whole of Australasia could be landed there, it
would be an easy matter for the West Australian Government
to continue the railway to the border to meet the South
Australian Railway which the Government of that colony would
doubtless extend from its present terminus. Connection with Reasons
the Eastern colonies would then be complete, and the railway, extension
which would save passengers the usually rough sea journey round eastwar •
the coast, and would expedite mails so considerably, might surely
be expected to pay. Again, the population of the West Australian
gold fields gets nearly all its food supplies from the Eastern
colonies ; living is consequently expensive, and as the gold fields
population has brought prosperity to the country, it is only fair
that its  interests should be  considered when  such a scheme as w
144 WEST   AUSTRALIA.
this, which brings the gold fields in direct communication with
the Eastern colonies, comes up for consideration, as it most
certainly will. So much for the railways of West Australia. I
must now proceed to deal with the gold fields themselves.
I found an extraordinary state of affairs, as regards the gold-
mining industry, existing in West Australia. From the earliest
days of the gold discoveries, some six or seven years' ago, up
to the present, the mining industry of the colony appears to have
been in the hands of the most dishonest set of men I have ever
heard of.
The men who took up the claims originally, the experts who
reported on them, the several hundred promoters in London who
floated the companies, the managers and agents who subsequently
represented them in the colony, were nearly all responsible for
an immense amount of lying and dishonesty of every sort, and
for the flotation and continued existence of something like 450
mines whose prospects were, and are, less than nothing, and
whose existence was from the very commencement entirely
unwarranted.
It is not the fault of these people that a few really good
mines have been discovered, whose history will help to blot out
the terrible stain on the colony's reputation ; they look on these
good mines with jealous eyes, and only long to saddle each of
them with a dozen of the worthless mines for which they are
responsible.
There were never nearly so many worthless flotations in
South Africa in the height of the boom, as there were in West
Australia ; and to-day, while the Transvaal has been largely
weeded of its wild cats, that class of mine still flourishes by the
hundred in the depths of the West Australian " bush." It is not
surprising that the state of corruption, so noticeable from the commencement in the West Australian mining industry, should have
spread from the head, that is to say, from the promoters and
directors in London, downwards through all classes of the
community in the colony. Hi
The Government should, of course, have been the counter- !
acting influence, but, to my mind, it has failed lamentably in its
duty. It appears, from its Premier downwards, to have been
entirely lacking, during all the years of dishonest flotation, when
something like 450 English and 200 Australian mines were
floated in the colony, in a knowledge of facts about the real value
of all these mines, and, consequently, of the future of the whole
industry. There is no Government Engineer to advise on
mining- matters, and there is little doubt but that during recent
years the policy of the Government has been simply swayed by
the most powerful of the gold fields communities, who have
forced their interests, irrespective of the colony's real wants, upon
the Government.    To wit, there is the Coolgardie water scheme,
hich will- run the
xpensi
which will certainly be a terrible fiasco,
already heavily indebted colony into a
Of this more anon.
The  Government, too,  has been  weak   in  finance.    Owing
to its lack of knowledge of real facts about the mines, it assumed :
that hundreds of payable properties existed, and on this ignorant
assumption has landed the colony in a heavy debt.
According to the Premier, the debt is now .£8,947,954, or
equal to about £52 per head of the population of 171,000. In
addition to this the Coolgardie water scheme will entail an
expenditure of probably £4,000,000 more before it is completed.
When that period arrives the population of the colony will
probably be considerably less than it is to-day, and it is quite
possible that in the course of a year or two, the debt of the
colony will stand at the high figure of £90 per head of the
population. It is perhaps not too late for the Government to
realise the situation. The Minister of Mines, if he looks the
position in the face, will find that it is as follows :—
About 450 English and 200 Australian floated mines exist, c
or have existed, in the colony ; the latter are mostly unimportant, 5
and need not be considered.     Of  the English mines there are
ten or twelve which are  really good.     There are, all over the w^1
146
colony, in addition to these, about thirty more which are
justified in carrying on work—a few of which will be successful :
nearly all the rest are entirely worthless.
As these remaining 400 mines gradually run short of cash,
they will be shut down,- and then liquidated. Thousands of
men will, from time to time, during the next two years, be
thrown out of work, and as there is nothing else for them to
do locally, they will be compelled to leave the colony. The
alluvial fields at Kanowna and elsewhere have been supporting
10,000 or 12,000 diggers for some years. These fields are
probably becoming exhausted, and a further large proportion of
the population will be idle. At Coolgardie, although there are
150 mines within a few miles of the town, there is hardly one
that is really payable, nor will any become payable when and
because a water supply is brought in. This town is doomed. At
Kalgoorlie there are 100 mines, of which seventy will, before
long, shut down. Perth and Fremantle are largely dependent
on the gold fields. These towns, Perth especially, are already
overcrowded, and will not continue to support the present
population. The colony, despite its few good mines, must pass
through a period of depression, and yet in the face of all these
facts, which are quite evident to outsiders, the Government goes
on raising loans and refusing to realise the position, quite oblivious
of the real state of affairs and, no doubt, intolerant, as is all the
rest of the colony, to a criticism of this sort, written merely with
the object of showing facts to the outside world.     Facts never
have be
suit the
especial]
pre
nanc
illy the
ely ; and, for a strar
ely to the mines is
ut there is a backbo
d industry after all
West   Austr
in   London.
-the
do
al
>rlie
mu
be
f solidity al
d I will br
>te of as being <
welve  good,   I
I in the colony,
West Australia
r sum up the f
•ely favourable. ^1
twenty or thirty which   are  justifiable   ventures, some of  which
may also be successful.
Although nearly all the remaining hundreds of mines are
worthless, there is no doubt that, in the immense gold-bearing
areas of the colony, intelligent prospecting and exploration work
will open up other mines, perhaps many more, which will add to
the general value of the industry. This will not be yet, however.
The rubbish will first have to be cleared away, and as directors
and managers have personal reasons for not relinquishing bad
mines, and as foolish shareholders can always be talked into
reconstructing a worthless concern, the process will take some
years.
There are in Coolgardie and Kalgoorlie a band, but only a
small band, as yet, of honest and capable mining engineers, who,
although they have not the control of many of the better
mines, provide a backbone of soundness and solidity which is
greatly necessary to the welfare of the industry. The better
mines are now passing into the hands of a sounder class of
manager ; some of these men are fairly competent, and some are
really good ; and, if they have character enough to do the right
thing no matter what the directors may tell them, they may be
trusted to bring success to their mines, and a certain measure of
repute to a district badly in need of it.
The whole system of management is wrong.    To begin with, i
the principal power is nearly always vested  in an agent of the °
board, who is known   as the legal manager,  business manager, b
or attorney.     This personage is  rarely an engineer, or even a
practical  mining man, and does not live on the mine.     Under
him,   and   chosen   by   him,    is   the  mine   manager—the  really
responsible man—who, however, has no control over the policy of
the company, and who has to do as he is told.   The legal manager, i
not knowing much about mining, frequently chooses an uneducated n
man—often a mine foreman from the  Eastern  colonies—as the
mine manager, and the latter has neither the ability to frame a
sound policy, nor  the power to carry it out, even in the teeth
of the legal manager, should such a course be necessary.    I could 148                                                    WEST   AUSTRALIA.
mention  fifty leading   mine managers on the  Rand whc
) would
resign their  positions at once if such   a state of things
existed
there.    The legal manager, in his own interests, will ad
vise his
company to go on working till all its funds are exhausted, j
vhile an
engineer whose character would be compromised by his cc
ntinued
connection with a worthless mine, would recommend his c
irectors
rather  to   save  the   cash  in   hand,   and  liquidate   the   cc
)mpany.
remède        There   is   only   one   iogica1   remedy   for  this.      Directo
rs  must
appoint engineers, or general managers,'in whom will be
vested
the
upreme c<
- them shall 1
e worked on its merits. The salary of such a man
..would naturally be much more than that paid to the present
managers, but if it were divided over several adjoining mines,
and most of them are small enough to warrant such a course,
it would be less than the combined present salaries of the legal
managers and mine managers. Furthermore, it would shortly
result in the directors of several hundred wild cat mines being
recommended to close down their mines and to distribute the cash
that is still unspent. I will refer to those mines which I consider
to be well managed when I come to deal with them ; in most of
these the manager has the sole control.
Another reason why a capable, trained, manager is a
necessity, is the fact that the miners are an extremely difficult
body of men to handle : and there is no doubt that they are
pandered to, especially by their fellow-countrymen, to an
unjustifiable extent. Australia is, notoriously, the most democratic country in the world, and the working man has nearly
everything his own way,  in mining no less than in politics.    He
as seems best to him. If he chooses to insist on a low standard
of work in a certain mine, the  manager, unless he is a strong
is, that at many mines which I visited there are 40 per cent, more
men on the pay sheet than what the mine could be worked
with. At the East Murchison United Mine an American
recently  took over the management.     He found that the costs 149
of working were about 80s. per ton, and that there were, I think
it was a hundred, men, on the mine. Finding the ground soft
for drilling, he first instituted a system of single-hammer-work.
The men struck. He replaced most of the necessary posts
with Italians. The men then struck work again, and although
a number left he found that he could do the same amount of work
without them. The mine is now running with costs at about
30s. per ton, and fair profits are being made.
The total want of system in Westralian gold-mining matters,
which is one result of the general rottenness, is very noticeable.
There is no authoritative Chamber of Mines to insist that the
companies belonging to it shall introduce system in their returns
and accounts, while if there were such a
companies would probably refuse to belong
Chamber of Mines at Coolgardie, and also a
and a Mine Managers' Union at Kalgoorlie,
rendered almost useless by local jealousies,
figures which the mines care to supply thei
generally not to realise what a splendid field
them.    The returns which the mines maki
body most of the
to it. There is a 1
. Chamber of Mines I
but these bodies are
They publish any
m with, and appear
of labour is open to
ind their methods of
keeping all kinds of accounts and statistics, show the lack of
responsibility of the managements, and their intolerance of
criticism. Some mines make fortnightly returns of gold : some
declare their yield in the middle of the following month : the profit,
or the loss, is never stated, nor the value of the gold won. The
principal reason for this is that the managers rarely know these j
figures themselves. No analysis of expenditure can be had for \
love or money. When managers brag about their working costs,
they include the figures of mining and milling only ; they forget
that there are such items as development of ore, stacking or
treatment of tailings, general and head office expenses and
depreciation. These items rarely come within the sphere of the
managers' calculations. The tonnage of ore treated is generally
manipulated to bring the output per ton up to the standard which
shareholders in Westralian mines have been taught to expect.
Nothing under  1  oz. is permissible, and there are a number of w^
150
WEST   AUSTRALIA.
London
control
mines yielding, presumably, 1 oz., or 30 dwts. to the ton, which
are working at an actual loss. Almost every trial crushing that
has taken place in the colony has been of hand-picked ore
from the richest, or perhaps the only rich, part of the mine, and
this farce is still in active operation everywhere. The recently
appointed managers of half-a-dozen companies, men with reputations to lose, informed me privately that the value of the mine
was entirely misrepresented to them by the directors, the
departing manager, and the press, with the result that instead of
finding ounces they have only found dwts.
The control of West Australian mines, especially of the
good mines, seems to be in the hands of an unsatisfactory
body of directors. This, however, is usually the case with all
mines controlled from London.
Many of the directors, particularly, it appears to me, those
with " titles and orders " to their names, are merely the dummies
of the large company promoters and market manipulators, but this
class of director, densely ignorant of mining as he is, can be trusted
to do a great deal of harm to the interests of the shareholders
who pay him. The leading company promoters in the West
Australian market, cannot surely, on looking back, be greatly
satisfied with the results of their handiwork. One group,
liquidated last year six or seven of its worthless flotations, and
uniting all these under the name of the Standard Exploration,
thinks to do great things with the same material under a different
guise. Another group, while in the midst of an active career,
floating such worthless mines as the Associated Southern,
Associated North Western, Associated Auxiliary, Trafalgar, Lake
View Extended, and such like, was last year mercifully prevented,
owing to a thorough financial crash, from continuing its unworthy
course.
The principal figures in the West Australian market appear
to me to be men who do not care in the slightest for mining,
but merely for market manipulation. A large part of the financial
press is in their pay ; they place dummy directors on most
of   the    boards :    shareholders   and    the   public   are   still,   by these means, kept in  ignorance of   the   real state   of things   in
the colony.
On the slightest chance new schemes are put forward  for '■
absorbing worthless mines : finance and exploration companies are "'
amalgamated, shuffled and again split up into millions of shares, ]
much to the apparent satisfaction of shareholders and the public.
All the time no   new discoveries   are being   made.    The   good
mines are passing   into the  hands of strong shareholders—who
will not stand nonsense of this sort ;  the hundreds of bad mines
are gradually running   out   of cash  and approaching their  final
liquidation ; while in London the papers are full of their praises ;
the issuings  of new scrip continue ;   dummy directors prophesy
great profits in  the near future, and the great game of humbug
goes merrily on.
In describing the West Australian mines I have drawn a
very clear line between what is really good or promising, and what
is really bad and worthless. There is still an opportunity, in some
cases, for shareholders of rubbish to realise their shares : but if
they allow themselves to be talked over by the dummy directors,
or by the press, they have only themselves to blame.
The mining laws of the colony, are, on the whole, sound, i
Ground can be taken up for mining purposes on the payment of
£i per annum per acre, and can be held under these conditions for
a period of twenty-one years, with, it is presumed, right of renewal.
Any one applying for a lease (Clause 35), "notwithstanding that
he may have complied with the regulations in force," may have
his application refused without a reason being given. This is
somewhat reminiscent of our friend the Dewan of Mysore, and, of
course, sets, a premium on bribery. Water-rights also can be
pegged out for a tax of £1 per annum per acre. No lease can be
for more than twenty-four acres, and should a single lease or a
series of amalgamated leases, be worked as a company, at least
one man must be employed for every six acres held. This is
certainly a sound regulation, and prevents capitalists from taking
up large areas of country which they do not intend to develop.
Exemption from these special labour conditions may be granted c w
WEST   AUSTR.
if the company can show that it has spent all its money in
legitimate development. The question of dual title to mining
areas has recently been satisfactorily settled.
I will now deal in detail with the various mining districts
in the colony.
To reach Coolgardie, which lies 360 miles east of Perth, the
railway line passes for hundreds of miles, through the waterless
bush—a vast forest of stunted gum trees, without a blade of grass
anywhere.
This scene, which confronts the traveller the morning after
leaving Perth, and which remains continually with him until he
again leaves the gold fields far behind, creates a temporary
depression so long as it lasts, and leaves in the memory an
impression that can never be blotted out.
An Australian poet, describing another part of the desert land
of the great continent, has translated this strange scene into
vivid language :—
t land, stricken
" A fierce sun glared upon a :
With barrenness and thirst,
Where nature's pulse with joy of spring woi
No more, a land  accurst.
quicken
" No faintest sign of dis
The aching eye to bless ;
The far horizon like a sword's edge shimmered
Keen, gleaming, pitiless."
At night, in the West Australian bush, a glamour weaves
itself over this terrible country. As you drive or ride along
the sandy tracks which lead from one water-hole to another, the
full moon, shining in a cloudless sky, tinges the gum trees with
silver. You hear the tinkling, of bells, and presently a long
train of camels, the front one led by an Afghan driver, passes
silently  by,  bearing heavy loads to some distant mine.
A cool breeze springs up, obliterating the impression of
the heat and dust of the past day, and as you at last lie down
to sleep, under the shadow of the silvery trees, the prosaic
realities of life in this strange country, with its dishonesty and
greed, and its hundreds of terrible failures, are all forgotten. W1,S1-   AUSTRALIA. 153
Round Coolgardie itself, the bush has been cleared away for
a mile or two, but all cultivation is, and probably always will
be, impossible.
Coolgardie is a handsome town of, probably, 8,000 inhabitants ;
it is scrupulously clean, and is furnished with electric lights,
telephones, and even several hansom cabs. It is the Governmental
headquarters of the gold fields, and is the residence of most of the
mining engineers, legal managers, local directors, and such like.
In the Coolgardie district a great number of mines—151 I counted (
—had been floated. Most of these were brought into existence on '
the strength of the wonderful early discoveries at Bayley's Reward
and Londonderry—discoveries, by the way, which were confined
to areas a few feet in extent, and which have never since been
equalled, or even approached.
Hundreds of tracks, several inches thick in dust, radiate from
Coolgardie to the mines in the district, but many of these mines
are already shut down, and it is only a matter of time before nearly
all the rest will be compelled to do likewise.
It is unnecessary to give a list of the 151 mines in this
district. I inspected, during my stay, thirteen of the best of these, ■■.
and from reliable sources, gathered a great deal of information
about the remainder. As the result of my inspection, I repeat that
I cannot endorse the highly favourable opinions held locally about
the majority of these properties.
It is a fixed tenet of belief in West Australia, which is
fostered, too, among English shareholders in these companies, that
the Coolgardie mines are, in the aggregate, sound, low grade
properties which only require sufficient water for milling purposes
to become successful enterprises. It is everywhere stated that
when a water supply reaches Coolgardie, dozens of mines will 1
commence to work profitably, and the town and district will
greatly benefit. I state emphatically that this theory is entirely
wrong, and that it is only circulated as an excuse, by those
interested in the town and mines, to delay the final collapse as
long as possible. It is hoped, too, that, on the completion of the
water scheme, renewed interest will   be awakened in  Coolgardie fffl
154
WEST   AUSTRALIA.
mines which will allow many of the largest shareholders to
get out.
As a matter of fact, nearly every mine ever floated has some
rich ore, especially near the surface, and it is quite true that many
of the mines at Coolgardie could find payable or even rich ore to
keep a mill going for three, six, or even twelve months. Thus, on
the completion of the water scheme, all these mines will have their
little stores of rich ore picked out and for a month or two will
crush with excellent results. That will be a critical period. The
financial press will be praising these mines to the skies : the
dummy directors in London will be doing all they know to prevent
shareholders selling out, and thereby keeping the market clear for
their patrons to off-load : the monthly returns for a short period
will all be good. Then the final crash will come, and Coolgardie
mines will be blotted out for ever.
Now that the Government has sanctioned the Coolgardie
water scheme, all these events, in the course of a year or two, will
certainly come to pass.
What this scheme will eventually cost the Government it is
impossible to say ; probably four millions before it is finally
completed. There are engineering problems to be tackled in
carrying it out, about which nobody can speak with certainty.
It may even be abandoned when half completed. But one
thing is certain : before the water supply has been established
six months in Coolgardie the demand will begin to fall off, and
after the first year the thing will be run at a dead loss.
The reasons for my strong criticism against this scheme are
foil.
i not îr
gnitude
such ;
al positic
Firstly : The colony
justify a scheme of this n
Secondly : The Government has never received technical
advice as to the value of the mines in Coolgardie district, but has
taken up the scheme solely upon the representations of local
politicians, and the public, who, naturally, are interested parties
in the matter, and whose opinions are therefore worthless. 1 I nr Thirdly : A sound knowledge of facts about the gold-mining
industry would show the Government that much smaller sums
might have been laid out to much better advantage than in this
scheme. For instance, the Menzies, Norseman and Broad Arrow
districts, which are intrinsically better than, or equally as good as,
Coolgardie, should have had public batteries erected, and boring
could justifiably have been undertaken in these localities. A
public plant for treating sulphide ores could be erected with
great advantage at Kalgoorlie, and at Coolgardie itself, some
of the more promising mines might have been helped in their
development. As a matter of fact, there is water running to
waste at Coolgardie to-day, and there is in any case, I think,
enough water to allow of the more promising mines crushing
on a moderate scale. As to the mines that have absolutely no
water, I venture the assertion that they also have no gold, or
at least, not more than enough to pay for several months' work,
and that when they do find payable gold it will be time enough to
agitate for water.
To again descend to facts.    I summarise the disabilities under ]
which the Coolgardie mines labour under eight heads :— |
i. The gold chutes, when found, are narrow in extent, often ]
not aggregating more than 200 feet to a mine.
2. The value of the ore,  even in the chute, is low grade ; ]
picked specimens, and assays prepared for shareholders'
meetings, often give high results, but its average value
in bulk, even in the chute, is not more than 10 to
18 dwts. The tonnage is often "cooked" to bring the
yield out at 1 oz. or 30 dwts., but a reference to the cost
sheet will show that the unusually high costs betray the
manager's secret.
3. The country rock is exceedingly hard, and as the chutes :
dip rapidly, more and more dead work has to be done
at each level to reach the payable ore.
I venture to say that this is one of the most important facts :
against the value of Coolgardie mines, and is one which is simply , fn
i56
ignored by local mining men. West Australian mining never
takes notice of such a thing as the cost of development of the ore.
All costs are reckoned on mining and milling only. The several
hundred feet of driving necessary to reach a " chute " is mentally
written off by the manager, and he starts afresh when he reaches
the payable ore. He cables to London that the ore on a certain
level will yield a profit of £1,000 ; it is milled and the profit is
actually made. This fact he wires to the head office, but quite
forgets to state that it cost him £800 in dead work to reach the
chute, and that there is only a profit of £200 instead of £1,000.
Furthermore, neither he nor the directors realise that the £200
profit, the result of, say, three months' work, is not sufficient to
pay interest on the capital sunk in shafts and equipment, let
alone enough to pay interest on the heavy nominal capital of the
company.
These facts, I repeat, are over and over again flagrantly
neglected or slurred over, but were they treated fairly and
honestly there is hardly a mine in Coolgardie which can be
considered to have ever earned a penny.
4. The ground is often  severely faulted.
5. There is great scarcity of water over most of the district,
although several of the better mines always appear to
have enough for their requirements.
6. The equipment of the mines is usually very inferior, and,
if anything good were found, would have to be entirely
altered.
7. The management is not above the usual West Australian
standard—which is poor. In any case the managers
have to do what they are told by the local agents,
attorneys, or directors, who are mixed up financially
with the London cliques, and whose business, therefore,
it is not to analyse unpleasant facts or figures, and to
play the " water trick " for all it is worth.
8. Finally, I venture to state that though there is a scarcity
of water   at   Coolgardie, there is a  greater scarcity of WEST   AUSTRALIA. 157
gold, and while sympathising with the community in
the collapse of the district, I think it only right to
warn the public against the London clique who will
use the water scheme as a means for off-loading mere
rubbish, and giving a fresh blow to an industry which,
on its inherent merits, is slowly recovering from a
great lead of dishonesty of a similar nature.
The mines I  inspected in the Coolgardie district are :—
New Victoria Consols.
Bayley's United.
Burbank's Birthday.
Burbank's Grand Junction.
Lady Charlotte.
Lady Loch.
Londonderry.
New Australasian.
Sherlaw's.
Vale of Coolgardie.
Vic'toria Consols—South.
Westralia and E. Extension.
Bendigo and Coolgardie.
Of these thirteen mines, which apparently form the pick of
the district, none have an assured future. Burbank's Birthday
is certainly the best, but even here no one can tell what the mine
may be doing three years hence. Nearly all of these are too
small to form individual mines, and, even as a preliminary to
future development, a whole series of amalgamations will have
to take place. By these means the short chutes found in several
adjoining mines might be worked collectively to keep fifteen
or twenty stamps at work, but hardly any single mine in the
district, as it is now constituted, owns enough chute ore to
run even five stamps continuously.
But how are the amalgamations to come about ? It is almost Amalgama-
impossible to expect that the directors and managers of these be effected.
mines, who have probably exalted notions of their value, and who
will continue to draw comfortable fees as long as the working
capital lasts, will consent to such a course. Later on, perhaps,
when these mines go into liquidation, they may be acquired
by practical men, who will amalgamate the different companies,
and obtain any small profits which it may then be possible to
make.    But,  in   any case,  as   before   remarked,   the   chutes  are w
158 WEST   AUSTRALIA.
narrow, hard to get at, and of low grade even then, and, amalgamated or singly, the future for the Coolgardie mines can only
be a poor one.
To my mind, the shares in these mines, as well as those
in all other mines in the Coolgardie district, are not only not
safe investments,  but are dangerous speculations.
A series of amalgamations, which might do some little
good, should include the following :—
(a.) The mines at Bonnie Vale—i.e., Westralia and East
Extension ; Vale of Coolgardie ; New Victoria Consols ;
Victoria Consols South. When this took place, twenty
stamps might be added to the good forty-stamp mill
of the Westralia, and the richest ore of each mine
crushed. In course of time, if developments were favourable, the stamps could again be increased. There is,
apparently, enough water found locally (the mines lie
seven miles from Coolgardie) to serve requirements.
(b.) Sherlaw's ; Lady Charlotte ; New Australasian and Flagstaff. All these mines are within a mile of each other ;
each mine could probably produce a little payable ore,
to begin with at any rate. The present mill at Sherlaw's of, I think, fifteen stamps, now partly idle, could
have five stamps added, and the water supply of that
mine would probably be sufficient for all requirements.
It is not certain that these mines, even if amalgamated
and the rich ore picked, would pay, but at least the
result would be no worse than at present.
1
Lady
Loch ;    I
.ad
y  Maude
;    L
,ady
H
am
Dt(
Emily.
These
m
nes   are
all
near
e
ich
H
appare
ntly  all  a
re
equally  b
ad.
I
do
not
t
would
pay   un
der
any   po
ssib
e   a
ma
na
similar
nomencl
atu
re is my
only
rea
son
fo
such a
course.
Bayley
's United
an
d King Sc
lorn
on's
Mi
ie,
lit WEST   AUSTRALIA 159
(e.) The various mines of the Burbank's group—except the
Burbank's Birthday, which is just big enough to be
worked by itself.
(f)   The Hampton Plains group should be re-amalgamated ]
and formed into an exploration company only.    There
were never gold discoveries  at  Hampton Plains  good
enough to warrant the flotations of subsidiary companies
as gold mines.   The prospects for gold are almost nil.
short description of the mines I visited
Following thi
Coolp-ardie dist
nptic
Bayley's United.—The reef is of a treacherous nature, and Bayiey's
it is frequently cut out altogether, leaving only a black seam
to follow. The deepest shaft is down 450 feet. At the 380 foot
level there is a stretch of reef of uneven value which has already
given out at one end of the drive. In places in the mine rich
pockets of visible gold are occasionally encountered, but, except
for these, the general average of the reef, taking into account
the amount of dead work necessary, is . not payable. Good
profits are being made from the treatment of old tailings, and
are being sunk in the development of the mine. The future
is doubtful.
Burbank's Birthday.—This is the best mine in the |"r^£k'
Coolgardie district, the ore chutes apparently extending for
600 or 700 feet. In addition, the mine is fairly well opened
out, there being about two years' ore in sight. Against this is
the fact that the yield per ton has steadily fallen from 2 ozs.
to 27 dwts., and has, apparently, not stopped falling yet. With
a well opened-up mine to draw upon, this shows either bad
management, or that the ore has been picked, and the yield
is now returning to its natural figure, which is probably not
more than 1 oz. to the ton. The mine has twenty stamps,
and enough water for them, and a tailings plant is now being
erected. A dividend may now and then be looked for from
this mine, but not,  I think, regular results. ifff
160
WEST   AUSTRALIA.
Burbank's Burbank's Grand Junction.—Still  in  a very  initial  stage.
junction. Two reefs are being developed ; one is very small, with several
narrow gold chutes cutting diagonally across it ; the other is
four feet thick, and of lower grade. Continued development
is justified, but it is by no means certain that the mine will
ever be a payable one.
Lady Lady Charlotte.—The 100 foot level is in disturbed country ;
at the 200 foot level the chute of gold is 300 feet long. It
is estimated that there are 15,000 tons of ore developed, worth
15 dwts. This is a low grade result, but if the mine joined
an amalgamation scheme of the adjoining companies, its ore
might be treated at a profit.
Lady Loch. Lady  Loch.—This is a very doubtful concern.    The chute
ore is worth only  12 dwts., and there is a very limited amount.
Londonderry. Londonderry.—There   are   two   rich  chutes   in  the  mine,
which yield pockets of very rich ore, thickly studded with
free gold. These chutes are each only a few feet broad.
Between them is about 120 feet of reef, say three feet wide,
which will yield 10 dwts. The mine is being carefully developed, and it is thought that with the occasional discovery
of a rich pocket, consistent, though small, profits may be earned.
There is, however, so much dead work to do to reach the
payable ore at each level that this seems doubtful. The
mine has ten stamps and a fairly good water supply.
New New  Australasian.—This  mine   had  some   very   rich  ore,
which it worked out. The reef is now faulted below the
140 foot level, and has not yet been refound.
New victoria New Victoria Consols.—A local company, which has 15,000
tons of ore developed, which is supposed to be payable.
Sheriaw's. Sherlaw's.—The ore chute is  170 feet long,   and the  reef
two feet thick. To reach this a large amount of dead work,
through   exceptionally   hard  ground,   is   necessary.     The  mine WEST   AUSTRALIA.
is running short of development.    It has ten stamps at work and
a yield of 15 to 18 dwts., but is not, I fancy, making any profit.
Westralia and East Extension.—This is a fissure vein of l
white quartz, about eighteen inches thick, lying between solid \
walls of granite, at an angle of twenty degrees, and is one of
the most curious formations that I have ever seen. A large
amount of development has been done, and the mine has now
a good forty-stamp battery at work. The yield varies from
12 to 16 dwts., but as the method of mining employed must
be a most expensive one, there cannot, at present, be a large
profit. With care the mine may be able to make regular,
though small, profits.
Yale of Coolgardie.—This mine is being soundly developed |
and has probably  25,000  tons   of ore in sight, worth   15  dwts.
The chutes are not of great length,  and the mine will  not do
much good unless amalgamated with adjoining companies.
Hannan's.—Or Kalgoorlie, as the town is now called ; is
twenty miles beyond Coolgardie, and connected by a frequent
and excellent service of trains. Gold was first discovered here
in 1893, and a year later several of the mines began to make
returns. These proved to be so rich, that Hannan's before
long supplanted Coolgardie, and became the more important
centre of the two. Kalgoorlie is now a straggling town,
inferior to Coolgardie in most respects, but with a population,
including the mines within a radius of four miles, of from
20,000 to 25,000. The town possesses three daily papers,
one hotel, at least, which will rank with any in Australia, and
a local railway along the reef, with trains running every few
minutes. Beyond the actual requirements of the considerable
mining population, however, there is no business doing.
Speculation is dead. There are probably over a hundred
worthless mines situated within four miles of the town, and
when these close down, as they inevitably must before long,
throwing some thousands of men out of employment, the
state of Kalgoorlie will be still worse than at present. 162 WEST   AUSTRALIA.
The Hannan's Belt, in which formation all the mines
are situated, extends for six or seven miles in length, is about
a mile-and-a-half wide, and lies, approximately, north and
south. This same formation may extend for a much greater
distance, but no gold has ever been found outside of the
present area, and its secret is still hidden beneath the eternal
bush. In this formation, running also north and south, are
a number of parallel lodes, which apparently carry gold,
although usually in unpayable quantities, throughout their entire
length. These lodes, although as yet they have not been
continuously traced from mine to mine, nor has any geological
survey of the area been made, do not appear to be regular
in their occurrence. They seem to run for a certain distance
and then either to die out or to branch into other lodes, and
so become lost. In places the same lode can be traced with
certainty for several thousand feet in length, but on most of
them the work done does not prove a length of more than a
few hundred feet. As a rule, the lodes, though nearly vertical,
dip very slightly to the west, but in places they are found
dipping to the east, at least for a level or two. Several of
the lodes have already been proved to a depth of 500 and 600
feet, and at that depth their characteristics do not vary from
what they were at shallower depths. As to the nature of
the lode matter, it is something quite new in the history of
gold mining. It seems to be a mixture of talcose schist,
diorite, and quartz, heavily mineralised throughout—but in
the decomposed ore of the upper levels the schistose matter
is more prominent, while the deeper the lode goes the quartz
element seems to become more pronounced.
A section taken across the present exploited width of the
Hannan's Belt would reveal possibly fifty distinct gold-bearing
lodes, and also the presence of gold, although in small quantities,
in enormous stretches of less clearly defined lode matter, so
much so, that several competent authorities have assumed that
the whole belt may consist of auriferous dyke or lode matter.
As   before   stated,   the  gold,   although   spread   over   so   many WEST   AUSTRALIA. 163
different   lodes,    is   generally   found   in   unpayable   quantities.
Many of the mines which  have  been floated  on the  Hannan's
Belt have not yet been found to contain a single ton of payable
ore.    A  still  larger number,   after  years of development,  have
been found to contain minute patches which would pay to work,
but for all  practical  purposes they  are   in  an   equally  hopeless
position ; there are about a dozen mines thought by local people
to  be highly promising,  but which, in  reality, are hovering on
the verge between  eventual  failure or working without a loss ;
and,   finally,   there   are   eight   proved   good   mines,   of   which
several promise to be among the greatest gold mines the world has
known.    Of these eight  good   mines  seven   adjoin  each  other, Eight good
and are situated within an area of about a square mile.    There
is no known reason why the parallel reefs as they pass through
this  particular section  of the  belt   should   contain   rich  patches
of  considerable   length,   and,   as   a   matter   of  fact,   these   rich
patches are  confined to  only a few of the lodes ; but  the   fact The richest
remains  that  this   square  mile,   among   the   mass   of   worthless in the world.
concerns in   West   Australia,   is  a  genuinely  rich   mining  area,
and probably contains more gold than  any other area of equal
size yet discovered in the world.    The names of the eight good
mines are :—Associated (Australia leases), Kalgurli, Great Boulder,
Great   Boulder   Perseverance,   Lake   View,   Golden   Horseshoe,
and Ivanhoe,  within the  rich area,  and  Hannan's  Brownhill at
a distance of a mile away.    These  mines  vary  in degree,  but
they are all good mines.
After these, as I have already stated, there is a very big ^f^-°l
gap, and I do not consider that any other mines on Hannan's mines.
Belt have yet been proved payable. From this small group
of rich mines, stretching out for miles in all directions, are the
headgears of the shafts of, probably, a hundred mines, floated
on the success of the few good ones, but although absolutely
worthless many are still at work, spending their remaining
capital in fruitless developments. Closely adjoining the mines
of the rich area, indeed, almost lying within the area, are a
number of mines—about  a  dozen—which   are  those   commonly w
164 WEST   AUSTRALIA.
supposed to be also good, and whose shares stand at high
prices. After personal inspection of most of these mines, I am
decidedly of opinion that none of them are yet proved payable,
although some may become so in time, and a great gap separates
the best of these from the poorest of the eight good mines.
Even with only eight good mines a great future is assured
for the Kalgoorlie field, and although the next year or two will
witness the closing down of a hundred worthles