Financing Mine Development

Introduction To discuss all the technical details of incorporation laws, security laws, underwriting procedures, codes, and ethics-as laid down by varous associations -would be impossible in the time which has been allotted to me. My remarks, therefore, will be made in a very general way and will naturally be coloured with experiences which my firm and I have had. There is a common expression that "money makes the mare go". I hardly have to mention here that the best prospect in the country is of very little value unless its prospects can be developed-and this requires large capital expenditures. The art and problems surrounding the raising of this money is a long and interesting story. Since by its very nature mining is risky, the appraising of its risks in the many phases of its development programme is continuous. Very few men-if any-and very few corporations -if any -can afford to take all the risk of mining. Because of taxation policies-and the very scheme of present-day living -the truth of this statement can be seen throughout the whole industry by a close examination of the records. Since this is so, it is essential that the mechanics of distributing risk on a sound, and equitable basis be known to those engaged in the business and to the investor or spectator who proposes to risk his funds in the industry. Perhaps the greatest stimulant to modern business activities has been the creation of corporate bodies. It is evident, from the number of charters being granted by various jurisdictions, that this method of doing business is becoming more and more important. A limited company -or corporation-can be defined as a fictitious person existing solely in contemplation of the law.