C.—2.

Oil-shale. The best-known deposits of oil-shale in New Zealand are those of Orepuki, Freshford, Cambrians, and Nevis. Samples of good-grade shale have been obtained from other deposits, but what is known of their size and mode of occurrence indicates that the amounts likely to be present are small. The Orepuki deposit is about 2 miles by flat road from Orepuki Township, which is on the railway-line and 43 miles west from Invercargill; access is good. The Freshford deposit is not far from Freshford Railway-station on the RiversdaleWaikaia railway-line, and about 28 miles from Gore ; access is very easy. The Cambrians deposit is in the Manuherikia Valley close to Cambrians Township, which is 16 miles from Oturehua, a station 101 miles from Dunedin on the Otago Central Railway; access is easy. The Nevis deposit is in the Lower Nevis Valley about 20 miles from Cromwell by an extremely steep road over Carrick Range (4,500 ft.) ; access is difficult. Of the other localities the Waitati deposit is at the head of the Leith Valley, close to Dunedin; the Coal Creek deposit is about 3 miles by good road from Roxburgh ; and the Idaburn deposit is in the Upper Valley, 7 miles by indifferent road from Oturehua. Orepuki Oil-shale. —At Orepuki the shale ranges up to 4| ft. thick and contains about 38 gallons of crude oil per ton. Recent geological and geophysical work show" that the probable minimum amount of shale in the ground is 1,750,000 tons, and the probable maximum 6,750,000 tons. A good deal of boring will be necessary to obtain more reliable figures, and the Mines Department is prepared to commence this as soon as a drill of sufficient capacity is released from the important drillingwork now in progress at the Liverpool State Colliery and Cobb River dam-site. Between 1899 and 1902 the New Zealand Coal and Oil Co. mined about 14,000 tons of shale, and, as judged from the available plans of the workings, the proportion of shale extracted ranged, according to assumptions made, from 26 per cent, to 47 per cent. This low extraction is attributable to the bad roof, the faulted ground, and the liability to fire. If one-third of the shale is extractable the amount available for retorting will be between a probable minimum of 580,000 tons and a probable maximum of 2,250,000 tons. Taking the most optimistic estimate of the quantity of extractive shale which may be available—namely, 2,250,000 tons —a conservative estimate of the capital outlay at £.1,000,000 and the minimum yearly throughput required for efficient operation at 300,000 tons, it will be seen that the capital would have to be recouped in seven years and a half, say, eight years. It must be pointed out that the losses in refining crude shale-oil are high ; 25 per cent, is usually taken, and the only available figure for Orepuki is 29 per cent. Orepuki crude oil contains a good deal of sulphur, which is objectionable for many uses and is difficult to eliminate. Freshford Oil-shale.—During the dredging boom, about 20,000 tons of oil-shale was mined open-cast near Freshford and used as fuel. The deposit dips under the gravels of the Whakaea Valley and the workings are now covered with tailings, so that nothing can be seen of the shale. About 1917 the Waikaia Oil-shale Development Co. bored their lease and proved the presence of about 750,000 tons of shale in 40 acres. The shale ranges from 6 ft. to 17 ft. thick and resembles the Orepuki shale. Samples contain from 30 gallons to 60 gallons of crude oil per ton and are rather high in sulphur, though not so high as Orepuki samples. The extent and thickness of the shale under the gravels laterally and to the dip can only be proved by boring. Cambrians Oil-shale. —Oil-shale from a few inches to 4 ft. thick underlies an area of about 6-| acres half a mile east of Cambrians Township. About 9,000 tons are probably present in this area. Shale may extend over a further 116 acres, and if it has a thickness of 3 ft. about 160,000 tons may be present, but boring is needed to establish the area and thickness of the shale. The shale is of good grade, four samples ranging from 27 gallons to 78 gallons per ton, and averaging 56 gallons per ton. The sulphur is also low.

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