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consequently easily reduced by the crushing mill, and judging from its quality and the nature of its fracture, it evidently resembles the stone obtained from the quartz lodes at Sandhurst, Inglewood, and Stawell, Victoria; very little gold appears to occur in the " faces " of the stone (the smooth portions which present themselves whenever a piece is fractured), it being thoroughly distributed through the solid. As a rule, the reefs are found to preserve nearly a vertical position recurring in country lying almost horizontal. One small crushing mill of four stampers already referred to by me has been started, and preparations are being made to start another in the spring. The absence of any road or even a horse track from Macetown, is a very serious drawback to the development of this new field. The miners at present are compelled to carry their tools and provisions for miles upon their backs. The erection of heavy and perfect machinery is therefore impossible in the immediate neighbourhood of the reefs; and were one erected at Macetown, all heavy material would require to be sleighed from Arrowtown, a most expensive process, especially in tho conveyance of stamper boxes ; a full-sized one and cast solid could not be got there at all. A dray-road to Macetown from the Arrow could be constructed probably for about £1,500, aud would give an enormous impetus1 to these quartz mines, as all supplies of material, timber, and provisions must be drawn from Arrowtown. There is an abundant supply of water almost everywhere for driving machinery, and when once properly opened the reefs can be very cheaply and advantageously worked. Labour is becoming plentiful, and experienced miners are now obtainable at 10s. per day. The Homeward Bound Line (Homeward Bound Company) opened in September last by Messrs. Barclay and Eaven. —This lode preserves a course nearly East and West; the stone varies in width between 3 and 4 feet, the underlay being slightly to the South. The lode can be traced upon the surface for at least 1,000 feet; the yield of gold will be, according to the trial crushing, over 2 oz. to the ton. Number 1 West, The Lady Eayre Company, sunk a shaft and struck the lode at 45 feet below the surface ; the reef is as perfect hero as with the Homeward Bound Company. Gold is distinctly visible in the stone, but not sufficient body has been grassed to form a correct opinion of the yield. Number 1 East, Eesta Brothers, The Italian Company, struck the lode near the surface; prospects indicate a yield of one ounce to the ton. The Cross Eeef Line, opened in January last. —This line is, par excellence, the richest discovery of auriferous quartz ever found in this district, and promises to yield extraordinarily well. The course of the lode is about South-east by East-three-quarter-east, and inclines to the West at about sixty degrees, but appears to be almost vertical at a depth. The body of stone varies in width from 3 feet to 18 inches, and appears to contain two separate shoots of gold, that on the hanging wall yielding some splendid specimens. This lode has been traced for 1,200 feet along the surface. The All Nations Company, South Cross, sunk a shaft 11 feet and proved the reef to that depth ; after that started a tunnel into the hill, and cut the reef 50 feet below the surface;; both in the shaft and tunnel the stone proved exceedingly rich, and should yield upon an average from 4 to 6 oz. to the ton. The Maryborough Company, North Cross. —This Company is engaged sinking a shaft on the line of reef, or rather following the lode down. The stone is here 3 feet in width and contains two distinct shoots of gold. The quartz is not so showy as that in the All Nations Company's claim, the gold being more distributed, and of a greenish hue ; the yield per ton will probably be about the same. South Cross Branch Line, Beale and Company. —Supposed to be a branch of the South Cross, preserving a course between 20 and 30 degrees west of south. Lode showing upon the surface in two distinct parallel leaders one a foot and the other 2 feet in thickness. Gold has been found in the stone, but nothing payable has been struck. The Company is engaged prospecting. Nuggetty Line —The Victor Emmanuel Company.—Eeef struck and laid bare upon the surface for about 100 feet. The lode varies between one foot and 18 inches in width, and a trial crushing of two tons of stone gave a result of a trifle over 1 oz. to the ton. This Company is engaged prospecting the reef to a greater depth, and have only sunk into 4 feet as yet. Main Lode Line, Main Lode Company, Golden Mountain, head of Eogers Gully.—This is a very fine lode, the stone being at least 6 feet in width. The Company is at present engaged prospecting for payable stone. Judging by the quantity of quartz it should prove highly auriferous, and it shows gold in places, but it will take some few months before its value can be correctly ascertained. Course of reef North and South. Two other lodes occur here preserving almost a parallel course, and 5 oz. of gold were obtained from one ton of quartz taken from a leader about 200 yards east from the Main Lode Company's claim. During the winter months several of these reefs will be unworkable, being situate above the snow level, and at a higher altitude than any yet discovered in Otago. Arrowtown itself, under the care of the Corporation, has greatly improved in appearance since my last report. The streets have been formed and kerbed, and the approaches to the town widened, at a cost of about £250. The Government has also expended large sums of money in draining and forming the roads that lead into it from the farming settlements. The new Bank of New Zealand premises is quite an ornament to the place. It is built of stone quarried 'within the municipal boundary. Since its completion several stone houses have been built. The township is gradually assuming the dimensions of a town. The best proof of the advancement of this place is in the high prices maintained for town sections. With regard to agriculture, a number of farms have changed hands during the last six months, the prices ranging from £2 15s. to £0 an acre, the average being at £4 10s. Almost all the land on Miller's and Arrow Flats will soon be freehold, and the present occupants are men of means, practical and industrious. Wheat and oats are being sold this season cheaper than ever known before, wheat at 3s. 9d. and 45., oats at 2s. This price, I think, will cause the farmers to give their ground rest and new heart. Sowing dow m grass seems to be the prevailing occupation just now, and in three years hence, the sorrel in the meanwhile extirpated, we shall commence a new era in farming under better auspices, namely