H.—s.

37

Waimea. —With the exception of a small rush to a hill near Staffordtown, where some tunnel claims have been taken up, there is nothing to note in respect of fresh work in this district. But there have been two applications for special claims, which may or may not prove hereafter to be of importance. One of these is upon Kelly's Terrace, near Stafford, where a fiftyacre claim has been taken up with the intention of forming a company to raise the necessary funds for draining the ground by a tunnel tail-race. It is asserted that good gold is known to exist on Kelly's Terrace, and that nothing but inability to keep the water down prevented it from being worked years ago. An application was made to the Government some time since for aid in making a drainage tunnel, but it is now proposed to undertake the work by private enterprise. The other special claim above referred to is on the Taipo Ranges, and is intended for the purpose of working the quartz reefs known to exist there. Several gold-mining leases have been already taken up and again abandoned in that spot, and now it is hoped that a grant of a hundred acres as a special claim may perhaps be successful in drawing sufficient capital to enable work to be efficiently carried on. Hokitika and Kanieri. —The diggings in the neighbourhood of Woodstock, now commonly called from the name of the new township, the Rimu diggings, have proved in their general character steady and satisfactory. They pay good wages, and, the claims being worked by driving under ground and lifting the wash-dirt to the surface, an occasional washing can be had without a large and constant supply of water such as is necessary for ground-sluicing. These diggings are not likely to last more than two or three years unless they extend by the discovery of new leads, but there is good ground for hoping that this may be the case, as it seems improbable that the gold should be limited to the area now being worked. The Humphreys Gully diggings are now the object of increasing interest and expectation. There seems to be hardly any difference of opinion as to the value of this ground for sluicing purposes when sufficient water is available. The water-race undertaken by the Humphreys Gully Company has been vigorously pushed forward, and its completion will soon determine the question whether the expectations that have been formed of this locality are well grounded. But until the water is brought in nothing more can be said. Totara. —The greatest activity in mining matters, at least so far as speculation goes, has occurred at Ross. The rapid rise in the price of shares in the Ross Flat Gold-Mining Company, caused by the steady and energetic manner in which they were prosecuting their works, and by their striking gold in the course of the deep shaft that they were sinking, produced much excitement, which manifested itself for the most part in marking out large special claims all over the neighbourhood. There can be no doubt that much of this was purely for the purpose of speculating in shares, and was quite apart from any rational theory of working the ground. But those who cannot find means of fulfilling the conditions imposed will of course have to abandon the ground, and it is satisfactory to note that two or three, at all events, are beginning work. The principal object of attention in this locality will, for some time to come, be the claim of the Ross Flat Company, and the manner in which they have pushed on their works seems to justify the most hopeful views of their ultimate success. The company's main shaft is now between 200 and 300 feet deep, and the fine pumping engine which they have had made in Auckland proves sufficient to cope with the heavy body of water with which the deep strata are saturated. The drainage tunnel which has now been some time completed is a most important and efficient factor in this work, taking off, as it does, the water down to 90 feet below the surface, and increasing by that amount of fall the water power that works the pumps. The company are now forming and extending a system of drainage channels in connection with the main tunnel, which will have the effect of further relieving the pumps. A scheme has now been matured by which additional mining property to the extent of about eighty acres is to be added to the 100 acres already held by the company, and it is proposed to work the whole on a scale of still greater magnitude by means of a new company with increased capital. The prudent enterprise of the directors, and the skill and energy of the mining manager, Mr. C. Malfroy, give every assurance of solid and brilliant results at no distant date. The work of other claims which are to be conducted on similar lines to those of the Ross Flat Company is not yet forward enough to require special notice. But one of the special claims granted lately is for ground-sluicing, and very good expectations are entertained of its success. This is the claim in Donnelly's Creek granted to Abel Weber, and which is now in the hands of a company which was floated with much readiness for the purpose of working it. Work has been well commenced by making a drainage tail-race, and it is generally believed that the claim will be a valuable one. In conclusion, there can be no doubt that a complete revolution in the mining industry of this district was commenced when Mr. Patrick Comiskey three years ago pegged out an area of 100 acres and applied for it as a special claim. The time had come when it was obvious that, over and above the really great results which have been so surprisingly achieved by parties of working miners with claims of less than an acre in size, there remained a great deal more to do which could never be done except on a large scale and with large capital. The prudent liberality of the Government, in granting, subject to proper conditions of working, areas of a size which would never have been thought of a few years ago has, I think, met the want of the times, has given a fair invitation to capital, and has opened a new phase in mining matters, which may be characterized by a prosperity the extent of which no one can as yet foresee. The usual statistical statements accompany this report. I have, &c, J. Giles, The Under-Secretary for Gold Fields, Wellington. Warden.