Silver and Gold

You will observe from the above statement that tunnel west has been the most productive section, having produced nearly one-half of all the ore extracted during the year; but the ore above that level (the 63-foot level) is now nearly exhausted, and hereafter the principal supply must be hoisted through shafts Nos. 3 and 7.

The development of the mine has been greatly retarded by our inability to do the necessary amount of hoisting with the whims, which have been taxed nearly to their utmost capacity hoisting ore to keep the mill supplied, and consequently but comparatively little sinking and drifting could be done below the tunnel-levels.

During the month of July steam hoisting-works were erected upon shafts Nos. 3 and 7, and are now in successful operation, obviating that difficulty, and we are now able to proceed rapidly with the sinking of shafts, drifting, &c.

No. 7 shaft has attained a depth of 364 feet. The average dip of the vein in this shaft is 53° to the south.

The east drift 200-foot level in this shaft is being driven on the ledge, and in very fine ore. Average samples taken from the face of the drift for the past week show an average assay of $216.66 per ton.

At 280-foot level east drift is being driven forward as rapidly as possible to cut the ore-chute that we have left under the track-floor in 200-foot level.

Station at 360-foot level is now being opened.

Summit shaft has been sunk to a depth of 369 feet, and, being upon a portion of the mine that has been comparatively barren from the surface, we have stopped work upon it for the present. The average dip of the vein in this shaft is 58° to the south.

No. 3 shaft has been sunk to a depth of 285 feet, and the work of sinking is being vigorously prosecuted. The average dip of the vein in this shaft is 77° to the south. The 280-foot level, which is just being opened, promises well for a large amount of first-class ore. The west drift from this shaft is being driven in the ledge, and in very fine ore. Average samples taken from the face of the drift for the last ten days give an average assay of $205.67 per ton.

Winze No. 2, 160 feet west of No. 3 shaft, is being sunk from the 200-foot level to connect with the 280-foot level, and is now down 13 feet, showing first-class ore.

From present indications the section lying between Discovery shaft and No. 3 shaft, and extending from 200-foot level to the 280-foot level, will produce a very large amount of first-class ore.

The ledge throughout the mine below the 200-foot level contains much more picking, ground than it does above that level, and I anticipate a large reduction in the cost of extraction.

From careful measurements made, I estimate the amount of ore developed, that will mill $80 or more per ton, to be 6,758 tons, and in the following sections of the mine:

In this estimate I have not included the body of ore lying between No. 3 and Discovery shafts and the 200 and 280-foot levels, nor any body of ore that is not fully developed and its full extent known.

But little work has been done during the year upon the outside mines owned by the company, except the necessary amount required to comply with the mining laws of the district.

In several of these mines the indications are quite as promising as they were at the same depth in No. 7, and I would recommend the sinking of shafts upon them to the depth of 100 feet or more to develop them.

During the past three months the company's mill at Lyonsville, Dry Valley, has been thoroughly overhauled and repaired, the old pans having been replaced by new ones of the most approved pattern, and three new boilers have been added, making the mill complete in all of its appointments, and in much better condition for doing good service than when it was first built.

During the first few months the mill was run much time was lost for want of an adequate supply of water. The ditch for supplying the mill was dug across a sandflat, and the water was absorbed and evaporated during the summer, and the ditch frozen up during a portion of the winter.

This has been remedied by building a flume to take the place of the ditch, and covering it with earth to a sufficient depth to prevent freezing during the winter.

During the year just ended 17,458 tons of ore have been received, and 16,172 tons reduced by the mill.

The necessary reservoirs have been constructed for catching tailings, and no tailings are now allowed to run to waste.

I would respectfully renew my recommendation relative to the building of a cupola, and making our shoes and dies at the mill. There are now 100 tons or more of old castings at the mill, and I am confident that a saving of 50 per cent. upon the present cost can be made by using this iron and making them at the mill.

Your attention is respectfully called to the tabular statements herewith, which will give you a more comprehensive idea of the details of operating the company's mine and mill.

Yours, truly,

CHAS. FORMAN, General Superintendent.

TABLE NO. 1.-Condensed statement of cost of production, &c., for company, year ending July 31, 1871.

ORE STATEMENT.

Ore on hand August 1, 1870.

Ore received from Hanchett & Rutherford.
Ore received from Barnes & Scott....

Ore extracted by company during year.

Total

Ore worked by company during year, plus moisture deduction...