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C—4a

• The Chaieman said the explanations which the directors had to give were not very many. The cost of the refinery amounted to £70. Mr. La Monte informed the directors that in Australia this item was usually charged against the gold ; but, as the directors knew nothing of this, they were compelled to charge it against the smelting. The figures showed that the result was a long way short of the 90 per cent, which was agreed to be saved. The cost of treatment was still worse. The stuff had cost £6 15s. per ton instead of S3, per ton. The item lead was a large amount to charge against the smelting. Mr. Babstow asked if that lead would not come in useful again. Mr. 0, Alexander replied in the negative. The Chairman said a great deal of the lead furnished was scrap-lead, which Mr. La Monte said was of very littlo value. He would next read an amended proposal by Mr. La Monte. Mr. La Monte had been acting in all fairness to the company, and he knew ho had not fulfilled his engagement to the company. Mr. La Monte's proposal was as follows: " Auckland, 19th April, 1886. —To the directors of the New Zealand Smelting and Reducing Company: Gentlemen, —Owing to the excessive cost of treatment above the contract price during the thirty days' run, I will make the following proposition : I will deduct £4,000 from the contract price, and will also give away to the company any interest I may hold in and to a bonus of, £1,000 promised by the Government, which will be paid by the Government if taken over by the company. Twenty-five per cent, of the burden of the calls falls upon me to pay, which would actually leave only about £2,000 for the balance of company to provide.—l am, &c, John D. La Monte." He would now read an approximate estimate of future cost. The estimate was by Mr. Steams ; and, while submitting it to the meeting, the directors wished it distinctly understood that they were not responsible for that statement. The estimate was on an enlarged furnace, and Mr. La Monte stated that he was willing to enlarge the furnace to the size indicated. The estimate, with furnace enlarged to do 340 tons per month, was as follows :— £ s. d. £ s. d. Ore (340 tons, smelting, at £3) .. .. .. .. 1,020 0 0 Example. Cost—lronstone, each ton 1 67th-100, at Bs. .. .. 189 16 8 Auckland gas-coke, at £1 65., thirty-five charges, 401b., 13s. 3d. 225 5 0 Lime, at2s. lOd. .. .. .. .. 48 3 4 Labour, per ton, 14s. 2d. .. .. .. .. 240 16 8 Average cost per ton, £2 Is. sd. .. .. .. 704 1 8 Total.. .. .. .. £315 18 i Note.—Fuel and coke, ironstone and lime, taken at same average as the trial-run just made, the proportions of which should be lessened in future by the proper blending of ores. Water, as motive-power, would save £35 pel month.—J. X). La Monte, per Z.L. Shareholders would notice that the large cost of lead was omitted altogether from this estimate. The company had been paying £3 a ton for Greymouth coke ; but Mr La Monte had found that the Auckland gas-coke would answer very well, and it could be obtained at a very much reduced price. He said also that water in place of steam would save £35 a month. The chairman then read the directors' report as follows : " The directors, in submitting the statement of cost of ores treated during the trial-run of thirty days, and which, together with the report of Mr. Spratt, who was deputed by the Board to act as their representative at the Thames, have been circulated amongst the shareholders, regret that the results appear to be unsatisfactory. These are, however, your directors feel bound in justice to explain, to be in a great measure accounted for by the difficulties generally attendant upon trial operations in connection with the treatment of ores in a new field which have not hitherto been subjected to the smelting process; and, as will bo observed from Mr. Spratt's report, a, considerable saving in the cost can be effected in the chief materials required in fluxing, and also in wages, both in the matter of experts and ordinary labour. Taking the whole circumstances into consideration, however, the directors cannot recommend the furnace being taken over, as during the trialrun it has failed to attain the results which it was guaranteed under agreement with the contractor to effect —namely, cost of treatment, and the saving of 90 per cent, of the assay-value of the gold and silver, and also the capacity of the furnace." In moving the adoption of the report, the chairman said be had very little to do except express his regret that the result had been so unsatisfactory. He believed, however, that the furnace had been a real benefit to our goldfields. It had led people to search for and find ores which it was thought did not exist in that district. Although that company had met with discouragement, he had no doubt that there would be a bright future for smelting operations. Mr. La Monte seconded the adoption of the report. He said he would not detain the meeting long, because he felt much embarrassed to come before a company with his work not done as well as he should like to have seen it. He also came before the company with a report and estimate which varied tp a er ' via degree from the report furnished by Mr. Spratt. In the first report furnished by Mr. Spratt all the coal, coke, laoour, gas, water, and everything since the works began four or five months ago were charged in the one sheet—also the refining account—as against the thirty days' run of smelting. Of course, he (Mr. La Monte) considered that very unfair and unjust. It was finally resolved that Mr. Spratt and he should come together and formulate a report, and that a report initialled by both of them should be brought before the shareholders. Such a report was gone into by them on Saturday morning and drawn out. That report showed the smelting account for the thirty days' run, and afterwards the refining account and expense account. According to this report, the smelting account for the thirty days, exclusive of lead, was an the rate of £4 2s. per ton. He wished to refer to the fact that scrap-lead, sheet-lead, and old pipes had been furnished to the works to put the furnace in blast. He told the company distinctly that it was necessary to get either metallic lead or galena ore. As soon as he saw the lead he said he considered it worthless for smelting purposes, and that he would rather pay for it himself and get suitable lead. However, it had been in use at that time. Mr. Chambers would bear him out as to the poor quality of the lead. It contained a large quantity of antimony and iron, and went readily to dross. He had no complaint to make as to the treatment he had received. Unfortunately for him, some of the gentlemen connected with him were not connected with the smelting business before the operations began, and did not get the necessary articles together for a clean run. The staff were in perfect order now. The last twenty-one days were run as perfectly and smoothly as ever he had seen any works run in any part of the world. The only thing he could suggest had been suggested in his proposal to the chairman. It would very materially reduce the cost to make the furnace the same size as the Melbourne furnace. The Melbourne furnace was 2ft. Gin. longer than that at the Thames, and double its capacity. The labour account would be the same, and the percentage of fuel was smaller in the larger furnace. In reply to Mr. J. M. Clack, Mr. La Monte said that the coal and coke set down had been consumed during the run in the smelting-works and refinery. Mr. La Monte also said that his outlay had been over £6,000. He could simply say to the company that he had not done what he undertook to do ; but, he added, if he had the work to do over again he could accomplish it. He was virtually in the power of the company. If they wished to take advantage of it they could do so. Being in the position he was, he would say clearly to the compar.y that wnat he wanted was to save his portion of the stock. The process had not been a failure in any country, and it would not be a failure here. The general feeling expressed in the Thames and Upper Thames Districts was decidedly in favour of the company and tl.o smelting-works, and there would be very much regret if anything should occur to cause the works to cease operations. He left his proposition for the shareholders to consider. If they thought his proposal was unreasonable or unfair he would be very glad to listen to any proposal they might make. So far it will be seen that, from various causes, the result has been disappointing, inasmuch as the guaranteed 90 per cent, of the gold has not been saved, whilst the cost of treatment has been considerably more than the maximum fixed, being £6 15s. a ton, as against the £2 fixed