,C—3.

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considerable capital to open out the deep ground, much heavier pumping-machinery will be required and a cheap method of carrying on operations will have to be adopted, to make the ground remunerative for working. • It is not possible with a small expenditure to bring in a large stream of water as a motive-power, but probably, if a survey were made, it would be found that with a comparatively small expenditure, sufficient power to work dynamos could be got from the Mikonui Biver, and thence convey the electricity to work the pumps at the place where the operations are carried on. Even this would cost a good many thousand pounds; and, if ever the deep workings are again opened out, provision will have to be made to take out the whole of the water standing in the old workings, so that the whole of the flat can be systematically worked. The difficulty the present company is labouring under is, their capital is all gone; and no one will invest their money in such a venture unless the interest of the present shareholders be reduced to a nominal sum, so as to induce others to join with them in bringing the venture to a successful issue. There no doubt is a considerable quantity of gold in the deep ground in this flat, but the question at issue is—can it be obtained at a cost to repay the capital required to open up the ground, with fair interest. Taking the returns in the past, and from what is known about the ground, it would not be likely to pay back a capital of £150,000 with interest. • Mont dOr Company. —This has been a dividend-paying company for many years. It is held ivy only a few people, and it will take a life-time to work out the present holding. All the available water-rights in the neighbourhood belong to the company, with the exception of those belonging to the Borough of Boss, who are the present holders of the Mikonui Water-race ; but this race has to be constructed into the watershed of the Totara Eiver before any water-supply can be obtained. The company hold all the water-rights in Donnelly's and Scandinavian Creeks, and are renting the constructed portion of the Mikonui Water-race to convey the water to the ground. During the year ended the 30th November last, gold was obtained to the amount of 1,6230z. lldwt., representing a value of £6,382 15s. The expenditure on the claim was for wages, salaries, and other expenses, £3,884 14s. 6d.; on the water-races, £580 55., making the total expenditure in connection with the working of the ground, £4,464 19s. 6d., thus leaving a balance of profit on the workings for the year of £1,917 15s. 6d. The paid-up capital of the company is £10,800, and the profit on the working last year is equal to nearly 18 per cent, on the money invested. This was not, however, all profit last year, as the company had to construct a deviation of the road from Eoss to Donoghue's, in order to have more room for tailings; this deviation cost £990 55., but even deducting this it leaves a good margin of profit. Otago District. . . Maraeiuhenua. This field has extensive gold-deposits of moderate richness, but labours under the disadvantage of an insufficient water-supply. The gold is obtained from three distinct sources—viz., First, the base of the quartz-drifts at the bottom of the series of rocks of which the Oamaru building-stone is the highest member in the development of these rocks near Livingstone. Second, the upper beds of the quartz-grit and the first 2ft. of the overlying greensands, which have the peculiarity of being auriferous, while at the same time the greensands contain numerous fossils in the shape of sharks' teeth and shells of marine mollusca. A very considerable thickness of bro.wn or grey sandy beds overlie these latter, separated into two divisions by a thick bed of volcanic rock, and, at some distance to the east the whole is overlain by what is known as the Maraewhenua limestone, as this is developed along the southern side of the Maraewhenua Eiver. This succession of strata is illustrated by one of the sections accompanying Mr. McKay's report, and the section proves distinctly the age of auriferous deposits underlying the higher beds of the series. The third auriferous deposit consists of coarse river-gravels, brought down by the Maraewhenua at a time when its channel was at a level some 200 ft. or 300 ft. above what it is at present. These latter beds are chiefly developed on the north ■ side of the Maraewhenua Valley. The gold-workings are partly in all three of these deposits, but 'chiefly at the present time in the upper part of the quartz-grit and the greensands, as already described, or, where the grit is of no great thickness, the whole is worked to the bed-rock. The coarse gravels of latter date are also being worked. The yield of gold is pretty uniform wherever the upper grits and greensands are worked, and in the greensand the gold is of an impalpably fine description. Samples of these greensands were lately forwarded to the Mines Department at Wellington for the purpose of ascertaining the true character of the gold found in the greensands. It appears that Mr. McKay was shown some gold taken from a claim on the north side of the Maraewhenua, which, though exceedingly fine in grain, as seen with a good lens showed as round plump gold, not flattened or abraded by the action of running water. This gold was for the most part derived from the greensands and upper beds of fine quartz-grit; and the question has since arisen whether, under any possible circumstances, such gold might have formed as a precipitate in sea-water. The greensand samples forwarded unfortunately did not contain gold, while the upper and finer-grained grits showed the presence of. very fine but flakey gold, so that this question must for the present remain undecided. Though no- gold was found in the samples of' greensand sent, Mr. Gow, Inspector of Mines for the district, who procured the specimens, informs me that it is a well-known fact that very fine gold does occur in the greensands on both sides of the Maraewhenua Valley, but that the procuiing of a sample of this separate and by itself is not an easy matter, as many dishfuls of stuff might be washed without seeing the colour. On the-north side of the river the auriferous ground extends to the Otekaike Valley, while to the south it reaches to the Kakanui Gorge. The constancy of the returns from this field should insure a certain amount of working being done on it for a long time to come. The quartz-grits, &c, extend south across the Kakanui Gorge, through Balruddry and Kauroo Buns, and along the lower slopes of the Kakanui Mountains to the Otepopo Eiver, beyond which the same beds canbe traced to Trotter's Creek and the Horse Eange.