C.—4

14

and 22 chains of this is constructed. The ground through which the tunnel is constructed at the upper end is very hard, and stands remarkably well. Indeed, it is so hard that the contractor failed to carry out his contract; so that at the present time no work is being done. There is still about 68 chains of the centre of this tunnel to construct. Mount Ida Water-race, Otago. —This water-race is managed by a trust; hut the Government have had to find money for extensions, and for making up deficiencies in the cost of maintenance when the expenditure exceeds the receipts. The race has lately been extended to Spec and Home Gullies, which will enable a large area of auriferous ground to be worked, and will increase the revenue considerably. This work has hitherto produced the most unfavourable results of any water-race constructed by Government as far as direct revenue is concerned; for not only has the expenditure for maintenance exceeded the receipts from sales of water, but the total value of gold obtained by means of this work would not pay for the cost of construction. Seeing that the extensions to Spec and Home Gullies are completed, it is to be hoped the trust will manage to establish a fund from the profits to carry on any further new works that may be required. The receipts from sales of water during last year were £893 6s. 5d., while those of the previous year were £1,221 14s. 10d.; thus showing a decrease of £328 Bs. sd. The expenditure during the past year has been £1,338 2s. 5d., against £1,596 Os. lOd. of the previous year; or a decrease of £257 18s. sd. The total cost of constructing this work was £65,766 3s. Bd., and the loss on working during the year has been £444 16s. The average number of men employed in working mining-claims by means of this work during the past year was 130; and the approximate amount of gold obtained by them has been 3,3920z., representing a value of £12,723. Deducting the money paid for water from gold obtained, the average earnings of the miners have been about £1 14s. per week. In dealing with the revenue arising from these water-races, I have confined myself to the direct profits as a commercial venture; but the Government derives a great direct benefit by carrying on these undertakings, in addition to the direct profits of working. The value of the duty on gold obtained by the means of these works ought to be taken into account. Therefore, on that basis, the profits accruing from the working last year would amount to the following percentage of the capital invested in their construction : Waimea Water-race, £970 16s. 9d., or 4 percent.; Kumara Water-race and Sludge-channel, £6,462 115.11 d., or llfper cent.; WaimeaKumara Water-race and Sludge-channel, £7,433 Bs., or 4j per cent.; Nelson Creek Water-race, £204 16s. 10d., or £ per cent.; Argyle Water-race, £89 135., or f per cent.; Mount Ida Waterrace, total loss of £5 Bs. : total of whole works, £7,722 10s. 6d., or 2| per cent. This shows that the Kumara portion of the Waimea-Kumara water-supply has paid llf per cent, last year on the expenditure on construction; while, taking the whole of the supply and works connected with it, which have cost £173,076 10s. 7d., it has paid about 44, per cent, on the large capital invested. It will be seen from this, had it not been for the extension to Kumara Goldfield, the expenditure on the Waimea portion would have given a poor return on the cost of construction. The following table will show the collateral advantages derived by the working of these water-races :—

Name of Water-race. Receipts. Expenditure. Profits or Loss on Working. =HH_ O <D <x) O <J3 ■d ■|°.g Value of Gold o a £ obtained. <% Value of Duty received on Gold obtained. Total Profits or Losses and Value of Duty. Total Cost of Construction. Waimea-Eumara and Sludgechannel. Seven years ending Mch. 31,1885 Year ending 31st March, 1886 £ a a. 45,839 3 0 14,498 7 2 £ s. d. 33,741 6 3 8,802 10 0 £ b. d. 12,097 16 9 5,695 16 8 466 343 Oz. 123,485 17,376 £ B. 6l. 472,330 2 6 66,029 3 0 £ s. £ s. d. £ s. d. 173,076 10 7 Total 60,337 10 2 42,543 10 9 17,793 13 5 451 140,8611 538,359 5 6 14,086 2 31,879 15 5 173,076 10 7 1 Nelson Creek. Seven years ending Mch. 31,1885 Year ending 31st March, 1886 12,646 0 7 1,073 14 2 8,429 2 4 1,104 13 4 4,216 18 3 1 •30 19 % 59 64 23,983 2,358 91,734 19 6 9,019 7 0 89,833 19 7 317 19 0 Total 13,719 14 9 9,533 15 8 4,185 19 1 6o; 26,341 100,754 6 6 2,634 2 6,820 1 1 90,151 19 la Argyle. Seven years ending Mch. 31,1885 Year ending 31st March, 1886 3,093 16 2| 435 2 8 2,826 13 3 391 17 8 257 2 11 43 5- 0 16 21 5,014! 4641 19,178 11 0 1,774 10 0 12,743 16 9 1,449 1 2 Total 20,953 7 0 547 16 858 3 11 14,192 17 11» 3,528 18 10 3,218 10 11 310 7 11 17 5,478, Mount Ida. Seven years ending Dec. 31,1884 Year ending 31st Dee., 1885' 10,821 14 8 893 6 5 13,217 11 5 1,338 2 5 •2,395 16 9 •444 16 0 81 130 14,319 3,392 54,770 0 0 12,723 0 0 65,066 3 8 700 0 0 Total 87 17,711 67,493 0 0 1,771 2 *1,069 10 9 65,766 3 8 1 11,715 1 1 14,555 13 10 •2,840 12 9 Grand totals 89,301 4 10 19,449 7 8 615 190,391 727,559 19 0 [19,039 2 38,488 9 8 343,187 11 3 5 69,851 17 2 Average percentage on capi £1,069 10s. 9d. "-l^per cent., b should be taken into account. * ital invested during eigh jesides which the consum] Loss is shown. years.— 1 2A ition of dutial pe: ile cent, foods b 2 Nearly 1 pe: j the men en : cent. s J per cent, [ployed in connection ' Direct loss of ath those works