Legal Definitions - cost-book mining company

A cost-book mining company is a historical type of business organization specifically designed for operating mines. It allowed a group of individuals to pool their resources to extract minerals, with a distinct structure for ownership and management.

Key characteristics of a cost-book mining company include:

• It is formed by an association of people with the primary goal of working a mine or mineral lode.
• Its ownership is divided into shares, which can be freely bought and sold by shareholders without needing the approval of the other owners. This made it relatively easy for investors to enter or exit the venture.
• The daily operations and financial administration of the mine are overseen by a dedicated manager, traditionally referred to as a "purser."

Here are some examples to illustrate this concept:

• Example 1: Forming a New Tin Mine in Cornwall

  In the mid-19th century, a group of entrepreneurs in Cornwall, England, decided to open a new tin mine. Instead of forming a traditional partnership or a full corporation, they opted for a cost-book mining company. Each investor contributed capital and received a certain number of shares. Mr. Davies, a seasoned mining manager, was appointed as the "purser" to manage the day-to-day operations, hire miners, purchase equipment, and keep meticulous financial records. If one of the initial investors later wished to sell their shares, they could do so to another interested party without requiring a formal vote or consent from the other shareholders, demonstrating the free transferability of shares.

• Example 2: Share Transfer and Management of an Existing Gold Mine

  Consider the "Golden Vein Company," a cost-book mining company operating a gold mine in the American West during the late 1800s. One of the original shareholders, Mrs. Albright, decided to relocate and wanted to liquidate her investment. Because it was a cost-book company, she was able to sell her shares directly to a new investor, Mr. Thompson, without needing the approval of the other shareholders in the company. Meanwhile, the company's purser, Mr. Henderson, continued to oversee all aspects of the mine's operation, from managing the payroll for the miners to ensuring the ore was processed efficiently and presenting regular financial reports to all shareholders, highlighting the purser's central role in both operational and financial management.