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manager, Mr. Evans, has already had in working the tailings and sludge, he is satisfied that the natural fall of the valley—-namely, about 2Jin. to the chain, will not be sufficient to use a flume to convey the tailings to the ocean-beach at Wakapatu; and therefore the original scheme of laying down a flume up the bed of the Ourawera Valley is not likely to be carried out. The company commenced operations with the hydraulic elevator on the 4th November last, and up to the 16th January they got 160oz. of gold, representing a value of about £640. This must be considered very satisfactory, seeing that they have been working nothing but old ground. The number of men employed altogether by the company is twenty-six, of which number eight are employed at the elevator, and the rest constructing works for the future development of their claim. In reference to the future prospects of this company, there is plenty of ground in this locality which will give good returns by working it on the hydraulic-elevating principle for the next fifty years with the supply of water that can be brought on to the ground, and it is in the construction of a water-supply the company should devote their attention, and not expend money in laying down a large flume to carry away the tailings, which will be found to be a failure on account of the natural fall. The construction of their water-race to the Pourakino Creek is a work that no time should be lost in putting in hand; and, instead of constructing a large flume for a sludge-channel, it would be more advantageous to construct a drainage tail-race of sufficient dimensions to carry off the water used in working the ground; by this means, as soon as one paddock was taken out, the elevated material from the next one could be deposited in the worked-out ground. The cost, however, of such a tail-race would be very considerable, and it is a question whether it would not be better and more economical, considering the interest on the first outlay, to lift the water with a jet-pump, instead of constructing a drainage tail-race. The fall allowed for such a tail-race would, in any case, have to be very little. The success of this company depends on the quantity of water they are able to bring on to the ground. If they can depend on twenty sluice-heads of water continuously the property is likely to be a very valuable one, inasmuch as the quantity of payable auriferous ground in this locality is very large. With careful management, and a systematic method of working, it should be as valuable a mining property as there is in the colony. Since my visit to this company's claim they have the new elevator at work, which acts better than the first one erected, inasmuch as the tail-boxes have more fall. The material is lifted by one of the elevators 53ft., and by the other 44ft., the total head of water being 337 ft., and the diameter of the jet or nozzle at the elevator is 2Jin. This is a greater height lifted than at any of the hydraulic elevators otherwise in use in proportion to the head of water, but it is doubtful if a large quantity of material can be lifted to the height mentioned. The company have also erected one of Crompton's dynamos for lighting purposes, so that they can work at night. They use two lamps, each arc of 3,000-candle power. The motive power for driving the dynamo is supplied by a Pelton wheel, 3ft. in diameter, and only a fin. nozzle is said to be used, which would be capable of discharging about 27 cubic feet of water per minute, allowing that the hydrostatic head was equal to that hydraulic one, which is not likely. The theoretical horsepower employed would be about seventeen, or, deducting an allowance for friction, about eleven horse-power may be used in generating the electricity. Coal Island. On Coal Island about twelve men were employed in February last, working the beds of gullies and streams wherever they can get sufficient water to sluice with. Gold has been found on the mainland close to Preservation Inlet, and some of the miners there are doing fairly well, and about fifty-four men are employed. The whole of the workings are confined to the beds of creeks and streams, where the gold has, to a certain extent, been concentrated from the light-drift material. So far, no workings have been done on terraces. In some instances the creeks are diverted for certain distances from their original beds, and wing-dams placed therein to allow their beds to be worked ; but no one has as yet commenced to carry on hydraulic workings. Some men are also working in some of the creeks between this and the Waiau Biver, but no one seems to know much about this part of the country. The finding of gold on the mainland, and between Preservation Inlet and Waiau, will no doubt lead to this portion of the country —which has hitherto been terra incognita —being well prospected. There are between sixty and seventy miles of country without a road or track, and had it not been for the portion of the track which has lately been surveyed and cleared of bush, men would not have prospected the country in this direction so much as has been done during last year. It may be said to have been the means of gold being found at Price's Inlet, Boat Harbour, and in other creeks along the coast.

DREDGING. Dredging operations have been more successful last year; improvements are yearly being made in the washing and separating appliances, by which a larger percentage of the gold is saved. There is ample room for improvement yet in that respect; but it is only a question of time when appliances will be introduced to make this branch of the gold industry a large and remunerative one. If only ordinary care is taken to prospect the ground, by bores or small cylinders, with dredging-buckets, on the same principle as Waipori Flat was tested, before commencing to put dredges on the ground, dredging ventures could almost be certain of being brought to a successful issue. The most of the dredging companies who have failed to make the ground pay have not used sufficient precaution, and the failures are entirely due to either negligence or mismanagement. The ground was either not prospected before the dredge was put on, or those m charge of the dredging operations had not sufficient knowledge of gold-saving to