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With regard to quartz-mining, although there are three gold-mining leases for quartzmining purposes still in force, and one or more parties occasionally prospecting, very little has been done during the year towards thoroughly testing the many known auriferous quartz lodes in the district. One lease was cancelled and one granted during the year. A trial-crushing of about a hundred tons of stone from one of the claims yielded about 7dwt. to the ton. The owner of this'is very positive that the yield would have been much greater had the appliances for saving the gold been of a more perfect and approved character. At the Game Hen lleef preparations are being made for a further trial, which, it is hoped, will in a few months meet with satisfactory results. Settlement is steadily progressing; for, notwithstanding the fact that but little additional land, if any, has been taken up during the year, the selectors already on the land have made fair progress, and are rapidly extending their cultivations and other improvements. The population of the district, apart from workmen on the Otago Central Railway, remains at about the same as last year—viz., between 200 and 300. I have, &c, The Under-Secretary of Mines, Wellington. J. P. Maitland, Warden.

No. 19. Mr. W rarden McCullocii to the Undek-Secretary of Mines. Sir,— Invercargill, 3rd April, 1886. I have the honour to forward herewith the usual statistical returns for the mining district of Orepuki and Longwood, together with the information asked for by your circular of the 30th January last, as far as it can be obtained from the records of the office and from such inquiries as I have been in a position to make. I have to report .that mining matters in the district remain in much the same position as at the date of my last annual report. In November last gold was discovered at the northern end of the district, adjoining the Merivale estate; and at one time about eighty men were on the ground. This number has now been reduced to fifty ; and but little work has been done, chiefly owing to the scarcity of water; and I doubt if in any instance gold has been got in payable quantities ; but it is probable that after the harvest is over there will be a considerable increase to the population, when, with the heavy winter rains, the ground may be properly tested. I have, &c., The Under-Secretary of Mines, Wellington. Henry McOulloch, Warden.

No. 20. Mr. John Gow, Manager Nelson Creek Water-race, to the Unber-Secretary of Mines. Sir, — Nelson Creek Water-race, Hatters' Terrace, Bth April, 1886. I have the honour to submit the following general remarks on the working aud maintenance of the Nelson Creek Water-race for the year ending the 31st March, 1886 : — Very soon after I took charge of this race a very bad landslip took place on the lower side of the race, near the headworks. The spot was very precipitous, and one of the many bad places on the lower side of the race in that locality. As repairs had to be done with timber sawn near the spot, where saw-pits had to be built, and good timber not plentiful, the work was not as quickly done as I wished; nevertheless all hands worked with a will, and the repairs were completed in a month. The loss of a month's sales of water, however, with the cost of repairs added, together with the cost of deepening McGee's Branch, to supply the wants of the miners in that locality, has caused the expenditure to slightly exceed the revenue for the year. Notwithstanding the slight loss in the year's transactions, it is gratifying to notice the sales gradually increasing during the last six mouths ; and the sales for this are greater than for the previous year. I hope, by continuing to give a liberal allowance of free water to enterprising miners who are willing to give a fair amount of labour to open out new claims, to still further increase the sales considerably, and add to the prosperity of this place during the financial year 1886-87; and, notwithstanding that the number of miners taking water from the Government race this year has nearly doubled the number of the previous year, I am sanguine of being able to show a further addition to the number, and feel hopeful of being able to supply them with water. It is now about four months since a party of miners bottomed a paddock in what might be termed the bed of Nelson Creek, near Try Again Terrace, and obtained therefrom about SOoz. of gold. This remarkably good washing caused a rush for claims in that locality, where most of the ground is now occupied by nine parties of miners, who hold collectively about fifty-five acres, or an average of six acres in each claim. The claim where the gold was obtained is being drained by a pump worked by a water-wheeL All the other claims will require either tailraces or some motive-power to pump the drainage, which will be very considerable. There are now three tail-races of considerable length uuder construction, and two water-wheels in full swing. The tail-races will require much labour and time to complete them; and each, as a rule, is being made to accommodate or drain two claims. If these claims prove payable, most of them