a—3

98

The gravels worked are referred to by Mr. McKay as the youngest of the series of littoral or fluviatile gravels that accumulated in the great valley depression of the West Coast subsequent to the deposition of the highest beds of the marine Miocene series, or Kanieri beds, so widely developed over the low grounds between Eoss and the upper part of the Grey Valley. They have a very extensive development in the range of hills lying between the Arahura and Kanieri Rivers, and they should be auriferous at other places besides Humphries Gully, so that here there is a large field over which hydraulic-sluicing operations can be carried on. The chief difficulty in connection with the development of this field is the great cost of water-supply sufficient to conduct operations on a large scale. The Humphries Gully Company having let the claim to tributers, these during the past year have been very successful in their operations. Gold to the value of £4,005 4s. 10d. was obtained, of which one-third went to the tributers and two-thirds to the company. For this tribute paid, the company has spent—£3so 4s. 10d. on plant extension; main-race maintenance, £372 18s. 6d.; rent and fees, £132 12s. 7d.; and about £323 16s. 3d. to the tributers for other work other than the tribute they were entitled to receive. Taking the total amount paid to the tributers for working the claim, including payment for necessary repairs outside their agreement —namely, £1,658 17s. 10d. —the whole expenses, exclusive of management, directors' fees, and travelling-expenses, and agencies in London and Auckland, which amounts to £327 18s. 6d.—there was a net profit last year, after the payment of working-expenses in connection with the claim, of £1,002 lls. Id. This shows that, with an abundant supply of water, this would be a valuable property. The directors'estimate that there was still about £750 worth of gold left in the boxes, which was not washed up. It is really a pity that some effort is not made to get the necessary capital to extend the head-race to the Arahura Biver, where a never-failing supply of water could be obtained. The capital of the company, which now stands at £139,984 after deducting the reserved and forfeited shares, is far too large to pay interest on. The present shareholders will have to be content with less interest in the concern if they wish others to join them in the enterprise and find the necessary money to extend the head-race so as to make it a payable venture. A proposal is now made to re-form the company, with a capital of £60,000, consisting of 60,000 shares of £1 each; of these, 30,000 shares are to be given to the existing shareholders fully paid-up. The remaining 30,000 shares is proposed to be issued as preference shares, carrying a preference dividend of 10 per cent., and also a preference in capital. Of these preference shares, 5,000 are to be deemed fully paidup and allotted as bonus shares to the subscribers of the new capital. After each of the two classes of shareholders have received a dividend of 10 per cent., the surplus profits are proposed to be equally divided among all the shareholders. The proposal seems a fair one for the new shareholders, as they have to receive a dividend of 10 per cent, before the present shareholders get a penny, and £3,000 is not a large profit on a venture of this description. Blue Spur. During the past year there has been a discovery in this neighbourhood. The Hau-Hau lead, running along the eastern margin of the Hau-Hau Terrace, was in the early days of the West Coast traced from opposite the Township of Kanieri to the southern bank of the Hau-Hau Creek, opposite the Blue Spur, but not across the low grounds of the valley to the terrace spur separating this from the Lower Arahura. Eich gold-bearing deposits were, however, worked in Scottie's Terrace and on the opposite or northern side on the fall towards the Arahura, and on this side was traced across the road till lost in the deep ground of Dyer's Flat. The gold could not be traced further to the south-west, and within the limits traced the ground was too wet to follow it to a greater depth than 30ft. For several years Mr. Boys, of Blue Spur, was engaged in bringing up a low-level tunnel with the object of draining this deep ground, and to do so has driven a tunnel nearly a mile in length, starting from the southern bank of the Arahura. This gigantic work taxed the energies and the means of the plucky prospector ; but a judicious aid from the department enabled him to complete the work, with the result that gold was struck a little earlier than was expected. This led to several claims being pegged off to the east and north-east of Boys' claim, and at least one shaft (Harcourt's) has been bottomed on gold. The ground, however, is wet, and till connection with Boys' tunnel (10 chains distant) is made, work has been suspended in this claim. From the bottom of Boys' shaft 24dwt. of gold were said to be obtained, and Bdwt. from the bottom of the shaft on Harcourt's claim ; and there is a probability that as the ground is worked to the south-east, or towards the line of the old lead, where this was worked to the water-line, the ground will be richer than where recently proved. The sinking to reach the gold-bearing gravels resting on blue Miocene sandy clays of the Kanieri series was from 48ft. to 54ft. The upper part was through river gravels, and there are no traces of glacier deposits on the ground. Shortly before reaching the washdirt the river gravels give place to marine beach-shingle, having a considerable percentage of black sand, which oxidized forms a hard band impervious to water. Below this the wash, 4ft. to sft. thick, is loose and easily driven on, the cement stratum above forming an excellent roof. There can be no doubt that this is the continuation north of the Hau-Hau lead, the auriferous wash being the same in character, and at about the same level. On the lower slopes, towards the Arahura Eiver, the lead has been broken up, and its gold carried away, probably enhancing the richness of leads at lower levels and the black-sand beaches near the mouth of the river. Heavy river gravels have taken the place of the marine gravels, and those driven in by Mr. Boys for some 4,000 ft. yielded scarcely a trace of gold. Since this discovery was made several other shafts have been bottomed, but no payable washdrift was obtained. This, however, is no criterion but what a lead of gold may be found traversing the flat for a considerable distance. There is a large area of unworked ground in this locality, but until such time as a connection is made with Mr. Boys' drainage tunnel, to allow the ground to be opened out, very little can be said respecting it.