1856

Sir, I am desired to inform you, that the Directors of the Colonial Gold Company received, on the 29th ultimo, by the ‘Oliver Lang,” despatches from Mr. Edward J. Spence, their Superintendent in the colony of New South Wales, dated to the 16th August last; and as these advices are too lengthy to be published in the usual way, the directors have thought it proper to have them printed and forwarded to the proprietors, in order that they may be informed as to the state in which Mr. Spence found the works of the Company in New South Wales on his return to that colony.

The advices received are as follows: “Dated Louisa Creek, 13th July, 1855. “I wrote to you from Sandhurst on the 4th June, and to Mr. Hart, from Sydney, under date of the 2nd and 7th July—dupli- cates of the last two letters I enclose herewith.

“After the communications made to you by my brother and Captain Paull, you will be quite prepared to hear that I was astounded and grievously disappointed when I learnt that the work had been suspended at Tambaroora and Burrandong, and that no improvement appeared in our prospects here.

“I have not yet had time to examine into matters so as to send you a fair report as to the proceedings of Captain Paull, or tbe course it may be necessary for me to adopt. He has not, by any means, proved himself as energetic as he gave me reason to anti- cipate before I left; and as regards the management of men, or funds, and the direction of operations, he has given ample evi- dence that he was inequal to the position he filled.

“I find that, although, wages have fallen considerably in the colony, there has been no attempt at reduction with us; on the contrary, contracts have been given out on such extravagant terms, that the miners have generally been making more than double what they ought to have received.

There has been no improvement in our system of working, though now it is acknow- ledged to be indifferent, and difficulties which do not appear by any means extraordinary, have been regarded as insurmountable.

“1 understand that Burrandong is considered by Captain Paull as more promising now than it was at first. He was driven out by the floods, but did not think it necessary to convey the engine there, as the river might subside as rapidly as it rose; such has not been the case.

The season has continued singularly unfavourable for such an operation, nor have the simple means adopted on other streams under similar oircumstances been applied. I shall go down in a few days and decide whether we resume our labours at once, or wait until the sprlng.

Tambaroora is stopped for the present, because of the price demanded for conveyance of quartz from the vein to the works. Provision ought to, and might, have been made for this by our selves. As to the yield of the first stuff reduced, I do not conslder it a fair test of value.

I believe that the gold has been lost, and that we shall yet find our estimates of the return to be far from incorrect. The machinery, I am told, is complete and in admirable order.

The defect is in the amalgamating process. There is a contract pending with the owner of *Wither’s Vein” (the one applied for by us, but not granted), for the delivery of a hundred tons of stuff, which we are to reduce at a charge of £3 IOs., or one ounce of gold, and it is being sent in, but very slowly. In the meantime we are proceeding with the quarrying of the quartz upon the Royal Vein, and I shall soon take measures to ascertaln what can really be got out of it.

Captain Paull, previous to my arrival,had given notice of dis- oharge to all the miner and mechanics here, which I do not at all regret.

These men have been making too much money, and we can do no good with them; besides, in order to effect those altera- tions and retrenchments, without which we cannot hope for any profitable results, it is necessary to have a clear field.

Mr. Bawden has commenced his experiments and asays with the quartz and tailings, I will read you his reports as he pro- gresses. “It is not without concern that I transmit to you a communica- tion so little encouraging, but I am still of opinion that if we are able to persevere, we may yet regain the capital we have expended. “I see no reason to anticipate any difficulty in some fresh arrangement with the Nugget Company, but have not yet deter- mined what proposition to make” Under date 6th August, 1855, Mr. Spence advises that Captain Paull’s engagement is cancelled. Dated “Sydney, 16th August, 1855. “I arrived here on Saturday last.

In order to be in time for the general meeting of the Great Nugget Vein Company that had been adjourned until Monday, so as to enable me to make some communications after my visit to Louisa Creek. I need not trouble you with the preliminary correspondence or tedious nego- iations thereopon. The conclusion arrived at is now alone important, and therefore, I only enclose copies of the final letter of the secretary and my reply.

“The Royalty is reduced to an uniform rate of 10 per cent, on the produce, which is one-half of the dues now paid on the lowest average returns, and the stipulation respecting quantities of stuff to be worked is no longer a monthly requirement, respecting both quartz and alluvium, but extends over an entire year, and permits us to work that which may be most convenient. At the expiration of the twelve months, should we have failed to fulfil our engage- ments, we remain in no worse a position than that we occupy at the present time.

“There was a party in favour of the purchase of the plant, which I should have preferred, but it could not be carried, and there was nothing left for me but to effect such an arrangement as would enable us to continue operations in the easiest and most economical manner.

“We shall now carefully select the quartz, and work just the description and quantities, and at such periods, as in our judgment may be best. I have already sent up the sieves lately received from England, which are the first of a right kind that we shall have been able to employ, and I expect that the finer crushing and more careful amalgamation may yet yield us more satisfac- tory results.

‘’For the alluvium, we have a puddling machine nearly com- pleted, which can be worked at one-half the expense of the toms, and pass double the amount of stuff, quite as effectually with less risk oí pilferage.

“These improvements, with the reductions in the rates of labour and carriaige, and many retrenchmentss in Officer’s salary and general expenditure, will I fully expect, secure us against any further loss upon thls place, even if we do not meet with any of those rich deposits or nuggets on which we may not unreason- ably speculate.

“The prospections which have been energetically pursued since my return promise little more than thls; but I should have been reluctant to surrender the land (unless on good terms) until I had satisfied myself far more conclusively that there remained no leads of gold, either in the quarts or alluvium, as yet untouched by us. “partles on the borders of the claims have recently been singu- larly successful, but I do not desire that the same should be said of those who may attempt the ground where we have once been.

“I must beg of you to come to no decision from the late state- ment of Louise Creek expenses and returns. A great change will be apparent during the current month, although I could not remedy at once the mismanagement of many previous ones. “Until the bulk of the miners leave in September, there can be no important reduction in the weekly rate of water, although labour is certainly much more abundant in Sydney and cheaper, but there no longer continues a system of contract which really appears to have been intended specially for the beneflt of the men.

“I certainly believe that we have worked out the best part of the ridge, and what remains of desirable stuff is now most diffi- cult to obtain without the removal of a great extent of timber resting upon the lode in the four-fathom level, This I cannot attempt because of the expense, but if present trials are promising we shall drive below. The portion of the vein so smothered is decidedly more valuable than that worked by Mr. Trenear the last month or two, as our returns will show, from stuff taken out of the small part left open under the incline.

Unless we had determined never to work below the four fathom level, the course adapted was singularly injudicious, and even then a very great proportion of the large sum spent might have been spared.

At Tambaroora found the works virtually stopped. The rea- son assigned by Captain Paull are very shallow. I believe that he utterly astounded by the miserable results of his experience and afraid to show that either he was ignorant of the proper mode of treatment, or had been widely astray in his first estimates. All excuses about want of capital and expense of conveyance from the Mine to the Mill are simply absurd.

He has never been restricted as to labour, which was all he had to think about, and the payment of that labour, however extravagant the rate, has been regularly made. The current expenses at the time of my arrival were sufficient to carry on both establishments, as I shall prove by doing so, even after considerable reductions have been made. I distinctly state, that I do not believe Captain Paull’s returns from the Royal Vein represent any thing like the value of the quartz, I refer you to his own latest reports to show how greatly his opinion is at vari- ance with the result of his operations.

I found the works in good order, and requiring a few alterations only in the method of wash- ing and amalgamating to be at once effective. Mr. Bawden is about these at the present time, wood and water are both ready at hand and we have more than 500 tons ef ore already raised from the vein. I instantly started our own team that was idle there to con- vey this stuff to the kilns, and gave instructions that every cart or dray should be employed, even at the extreme rate of 7s. 6d. per ton.

When we have a sufficient quantity, say 100 tons, we shall apply ourselves thereto until the whole is reduced, and I shall be surprised and disappointed indeed, if we do not obtain a paying yield. “Tho owner of Withers Vein, with whom we have a contract for 100 tons, has spent a considerable sum of money, and now relies upon us for some returns.

He has requested me to advise with his manager, and instructed him to attend implicity to my suggestions. I shall take the speediest and best means for establishing a regular conveyance for his quartz, the whole of which must be brought to our mill, at least we shall carry it as long as the owner is inclined to guarantee to us the agreed price for reduction.

“Captaln Paull’s reports respecting Burrandong will have given you some idea of the trifling there has been there. The neglect and apathy with regard to this underrtaklng, respecting which it is still admitted that suoh sanguine expectations are entertalned, seem to me unaccountable. For nearly seven months the shafts commenced in the original bed of the river, now called the Bar, have remained untouched. The deepest went down 17 feet, and is supposed by Bray to be yet about 5 feet from the bed rock.

In this opinion I agree wlth him, from the appear- ance of the out-crop in various directions and the lncline of the banks. The floods have not even disturbed the shale that was thrown up, nor have the sides of the sinking ylelded in the least during the whole time. To my enquiry why nothing had been definately ascertalned, Bray repled that he was left by himself and could not work without assistance, besides he had orders to remaln there as a watchman solely.

1 washed some dishes of the stuff last thrown out, and obtained a fair prospect of gold, besides a large quantity of an exceedlngly heavy black mineral which I have tried In various ways, but not yet proved; some of it is now submitted for analysis, and I shall soon know the result. In consequence of its density the gold can only be taken out by amalgamation, and the supply must be considerable, for the pans we tried were of stuff supposed to be in a deposit of five feet in depth. I imme- diately ordered Bray to Louisa Creek, and the morning

I left for Sydney started him back with three picked men and all the imple- ments he required to accomplish what he confidently undertakes to perform, viz., to get to the bottom of every one ot the pits, and give the results of his washings, each foot as he goes down, all within a fortnlght, I know of no more reason now to abandon that enterprise than when I spoke favourably of it in London, although I do not pretend to agree with Captain Paull that what he has ascertained so far renders it still more attractive. The doubt is quite unsolved, and I have taken cheap but expeditious means to have it settled.

I leave here on Saturday, and in a few days only shall decide whether this under- taking, so tempting from its extent and promise, will realise our expectations, or end in disappointment.

“My finances are in an awkward state, for I have not yet been able to dispose of any of the surplus machinery, and the balanced cash has been consumed in the settlements of accounts that had been running up against my arrival. Instead of finding a deposit in the Banks free from any claims, with which I could complete all that was contemplated, there was hardly sufficient to meet imme- diate demands; our credit, fortunately, has not suffered in the least, and every claimant has been satisfied on the instant.

To provide for contingencies during the time I am up the country collecting, as I trust, some gold, I have given a promissory note at three months to Captain Towns, and lodged the proceeds (£1000) in the bank. This I preferred to drawing upon the directors, which I earnestly hope it will not be necessary for me to do.

“I do so consider that I should be justified in closing any one of ths establishments at the present time, unless, to carry on, some further considerable amount were required. I left everything so far advanced that long ere this there should have been no doubt as to the value of each place; but I find that we have made very little progress towards a decision. Captain Paull’s reports would prove this, were I not assured of it from actual observation. My object will be to settle the question speedily, and take those steps that may then be most advisable. (Signed) “Edward Spence” I have the honour to remain, Sir, Your obedient servant, W. A. HART, Secretary.