Opportunities for Capital Investment in the Development of the Mineral Resources of Northern Ontario and Quebec

We are regularly told that before making a new investment one should seek the advice of his banker. If we were to place the subject matter of this paper before bankers. other than those who have experience in our mining camps, their reply would probably be evasive. However, if for example: a mining company asks them for a loan and offers as security certain mining investments, they are, in most cases, explosively candid. The idea is preposterous, unless, under Section 88 of the Bank Act, the mining company is able to deposit with the bank, gold or silver bullion, to an amount sufficiently in excess of the loan, to provide for what the banker describes as a reasonable margin of safety in case of contingencies. In addition the directors of the mine personally must jointly and severally guarantee payment of the loan. With any of these conditions missing the banking atmosphere becomes chilly. The local manager explains that the general situation, and particularly European conditions, are so unsettled that head office has warned him that his discretionary powers must not be exceeded under any circumstances.