C—2.

5

Thames. Notwithstanding the cry of depressidn in this district, there were 1,0680z. more gold obtained—according to the quantity entered for exportation for the year ending the 31st March last—last year than for the previous year, vide Table No. 2. The mines are, however, getting deeper as every year passes by, and a feeling is entertained that unless something is done to test the deep levels in a few years many of the properties will be valueless, as the holders have not sufficient means to undertake prospecting operations below the level that can be drained by the Big Pump; and, although there are a number of companies affected by the drainage system, the areas of their separate holdings are, however, comparatively small. A combination of the whole of the companies interested in the deep levels is required before any extensive prospecting operations in this direction can be proceeded with. The holdings below the 500 ft. level are at present utterly useless, but nevertheless the value placed on the ground in many instances is such that it will be a difficult matter to find outside capital to come to the assistance of the companies. Before any practical results will ensue, the present holders of mining property in this locality will have to modify their views in regard to the value of their claims, or else offer sufficient inducements for capitalists to assist them, otherwise mining in the district is bound to dwindle down, and in time many of the properties will be forced into liquidation. Every year the payable stone in the upper levels is gradually getting less, and the time will come when, unless money is forthcoming to test the lodes at deeper levels, the mines will have to be abandoned. It is a difficult matter to find persons philanthropic enough, even with Government assistance, to embark their capital for the benefit of others, unless they receive a corresponding advantage. During the last year there were 34,637 tons of quartz and 14,970 tons of mullock crushed, also 13,220 tons of tailings treated, on this field, yielding 34,6370z. of gold, representing an estimated value of .€92,650 ; while 650 men were employed in the mines. The principal gold-producing mines have been the Moanataiari, 45860z. ; New Alburnia, 5,9920z.; Hazel Bank, 2,6690z.; Waiotahi, 2,7190z.; May Queen, 4,3690z. ; and the Cambria, 1,4700z. Ohinemum. This is a district which is likely to become a very large gold-producing one, as it contains a large area in which auriferous lodes have been already discovered and are known to exist. In many places no prospecting has been done, and portions of the field are yet unexplored. The yield from the Waihi Company's mine last year proves that, by using improved machinery for saving the bullion, the property is a valuable one. Nevertheless, the same property from which this company is obtaining such large returns was worked for over eight years by the Martha Company, the yield being only sufficient to pay workingexpenses. The lode was previously worked by the Martha Company, which took out only what was considered the best portion of the stone, and from this only about 4dwt. of gold per ton was obtained by the process adopted by that company. Last year 19,343 tons of quartz were crushed from this mine, yielding bullion to the extent of 34,6610z., having a value of £54,000. As the company has erected a Cassel plant to treat the ore by the cyanide process, they expect this year to have much larger returns. By this means they get about 90 per cent, of the assay-value of the gold, and not more than 50 per cent, of the silver in the ore. Previous to this only 66 per cent, of the gold and 40 per cent, of the silver was obtained. At Waitekauri good returns have been obtained from the Komata Mine, and from Lowrie's New Find. Another discovery has been made by Birnie and party who have recently erected a crushing battery, but the results of the crushing have not been so far satisfactory. At Karangahake the Crown Company has been working successfully, and getting good returns. No doubt there are other lodes in this locality which by judicious working, with proper appliances for saving the bullion, would give payable results. All through the Ohinemuri district the gold is found in combination with a large percentage of silver, and the system of treatment requires to be quite different from that for ore containing free gold only. The battery returns from Waitekauri last year were : Komata Mine, 14,6060z. bullion from 1,708 tons of stone and 1,705 tons of tailings; Lowrie's New Find, 1,6320z., from 600 tons of quartz.; and the Crown Company, at Karangahake, crushed 4,544 tons of ore, yielding 11,1310z. bullion. The Crown Company was the first to introduce the cyanide process into the colony ; and, as they have made considerable improvements in the method of treatment, a much larger