H.-17:

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original bed of the gully or creek has been buried, or covered over by land-slips ; and it is in following the old bed through these slips that the gold is now obtained. These patches were apparently missed in the early days of the gold field—a fact worthy of note in connection with the reservation of lands for mining purposes in creeks and gullies such as those at Hindon, as sometimes the run of gold may be left outside the boundary of the reserve. Quartz Mining. —In regard to quartz mining, I regret that, just now, matters do not come up to the anticipations of last year. The stone that has been crushed (and of which there is no limit as to the quantity procurable) though containing gold to the extent of from 5 to 17 dwt. to the ton, is too poor to cover the outlay incurred in procuring and crushing. If, however, the facilities for mining and crushing were equal to those of districts more favourably circumstanced, the above yield would not be unremunerative. But it is confidently believed and expected that, with further prospecting, richer stone will be discovered. At the present time, want of capital is deterring most of the leaseholders from prosecuting their search. Another great drawback is the want of water for machine purposes; both for the motive power and the batteries. There is no suitable fuel in tho district for steam power, and the expense of obtaining it elsewhere is very great. Last year the Hindon Quartz-Mining Company contemplated bringing a supply of water from the Fortification Creek; but, so far, no steps have been taken in the matter. There can be no doubt that an abundant supply of water would tend greatly to revive mining industry at Hindon, affording, both in quartz and alluvial mining, the means of working to advantage ground which, without it, cannot be profitably utilized. Employment, too, would be thereby provided for a large number of miners. There are now three excellent quartz-crushing batteries at Hindon, erected respectively by the New Caledonia Quartz-Mining Companyr (Limited), the Hindon Quartz-Mining Company (Limited), and the Just-in-Time Quartz-Mining Company (Limited). The two first-mentioned are worked by steam power; the latter by a turbine,water-wheel, but, unfortunately, with a supply of water insufficient to keep it constantly going. Each of these batteries is enclosed with a substantial iron building, erected at considerable expense. Settlement. —Very satisfactory progress has been made during the year in the settlement of the district. Indeed, the expectations expressed in the last annual report, that this hitherto somewhat isolated locality would become, ere long, a settled and prosperous district, both in agricultural and mining pursuits, are now being partially realized. A considerable sum of money has been expended in rendering the road from Outram —previously only a saddle-track —available for wheeled traffic. This is an immense advantage to the district. Considerable portions of the blocks of land referred to in last year's report as about to be opened for settlement have been sold on deferred and immediate payments, and both fencing and cultivation are being actively proceeded with. The following particulars of the sale of this land may be mentioned : —On pastoral deferred-payments : Ten sections in the Silver Peak Survey District, with a total acreage of 20,055 acres 2 roods 33 perches, the payments for which are at the rate of £1,609 9s. 6d. per annum for fifteen years, or a total value of £24,142 2s. 6d. On ordinary deferredpayments : Fourteen sections in the Mount Hyde Survey District, with a total acreage of 3,710 acres 2 roods 36 perches, the payments being at the rate of £570 13s. 3d. per annum for ten years, or a total value of £5,706 12s. 6d. On immediate payments: Forty-two sections in the Mount Hyde Survey District, with a total acreage of 10,736 acres 3 roods 32 perches, sold at 20s. per acre, or a total value of £10,736 7s. 6d. The gross acreage sold as above is, therefore, 34,503 acres 1 rood 21 perches ; and the value realized, £40,585 2s. 6d. Population. —The total population of the district, including miners, is estimated at a litle over 200, of whom 28 are Chinese. Mining Reserves. —lt has been deemed advisable by the Waste Lands Board, in the meantime, wholly to reserve from sale Blocks IV and V., Mount Hyde Survey District, on account of their auriferous character, and the impossibility, under present circumstances, of deciding definitely what should and what should not be permanently reserved for mining purposes. Strong representations have been made by miners and others that the whole of these blocks should be set apart as a mining reserve ; complaints have also been made that certain land has been recently sold in the adjoining blocks containing payable workings, several parties having since the sale been compelled to desist working them. One of the difficulties in deciding upon auriferous reserves is the fact that small leads of gold are found to exist in the blind gullies running well up the sides of the hills, the same being feeders to the main gullies. Many of these have already been traced and worked, but doubtless others exist, and probably those that have been worked have only been partially so, or may pay to work again. To include the whole of these blind gullies in the mining reserve would be tantamount to reserving the whole of the land: on the other hand, to exclude them might be prejudicial to the mining industry For the present it would, I think, be inadvisable to alienate from the Crown any land in the district that promises to be valuable, not only for its auriferous character but also for the minerals other than gold which it contains, or is supposed to contain. A further reason why tbe blocks before referred to should be temporarily reserved from sale is, that any land in the locality that might be available for agricultural purposes will undoubtedly, in the event of its being decided to carry on the Central Railwayline, realize a much better price than if sold at the present time. I have little doubt but that, in the course of a year or two, the Hindon Mining District will receive a more thorough testing in regard to its mineral resources than it has ever done. I have, &c, J P Maitland, The Under-Secretary for Gold Fields, Wellington. Warden.

No. 17 Mr. Warden McCttllouchi to the Undee-Seceetaey for Gold Fields. Sib, — Invercargill, 16th April, 1881. As instructed by your circular No. 90, of 29th January last, I have the honor to forward statistical information relating to the Orepuki and Longwood Mining District, with a short report for the year ending 31st March, 1881.