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Monday, 24 May 1965

Senator CANT (Western Australia) . - I seek clarification on several matters. Clause 5 relating to ascertainment of cost of production sets out to amend section 10 of the principal Act and to provide - (1.) For the purposes of the application of subsection (I.) of the last preceding section in relation to bullion produced in a year by a large producer from minerals obtained by him from a mining property, the cost of production, for each ounce of fine gold contained in the refined gold produced from the bullion, is the sum of the amounts determined by the Treasurer to be -

(c)   the cost in respect of that year of development of the mining property; . . .

What exactly is meant by that statement and how is the provision to be applied? The cost of production in any year can be overhigh in a particular mine. The company might determine that higher levels are being worked out and that it is time to take a lift out of the shaft and bring into production a new level or levels. Such a major development programme would increase the cost of development work over a particular period. I notice that the Treasurer, under both the principal Act and the Bill, is given certain discretions in this connection and I hope a liberal view will be taken of this matter of cost of production in a particular year. I should like some explanation of the application of this provision.

Paragraph (d) of the proposed new subsection states that the cost of production shall be determined by the Treasurer to be-

One-half of the net cost, in respect of that year, of approved diamond drilling carried out by the producer elsewhere than on the mining property . . .

This is a provision additional to that set out in paragraph (c). The statement " elsewhere than on the mining property " is pretty vague, and I should like some clarification. It must be realised that under the Western Australian mining legislation, provision is made for a certain employment level in respect of the number of workers who can be employed. The size of a lease is 12 acres and if my memory is correct, a leaseholder can hold 12 acres for every two workers employed. Larger mines such as Lake View and Star and Gold Mines of Kalgoorlie - Great Boulder is not so materially affected because it is jammed in between a lot of other leases - have unlimited areas which can be pegged. I think this would apply also to North Kalgurli (1912) Ltd. The words "elsewhere than on the mining property" require some clarification. I am not clear about the exact meaning of the words. If diamond drilling is being conducted half a mile away or even a mile away from an actual working lease, but on a lease which is held by the parent company, is that considered to be on the mining property? Is it intended that the cost of diamond drilling is to be taken into consideration only if the company is drilling to find lodes in another mining field, for example if Lake View and Star were drilling at Kanowna or at some similar place?

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