The operations of the Manhattan Mill during 1871 were as follows: Of the ore from the company's mines there were reduced 1,537 tons, yielding $387,589, an average of $252.16 per ton; of custom ore from Belmont and Reese River, 3,513 tons, yielding $596,043, an average of $169.66. Total ore treated, 5,050 tons, yielding $983,623, an average of $194.77 per ton. The company's ore was mined mostly on contract, involving a percentage of ore to the miners, besides a certain sum in wages. The estimated cost of extraction was $150,581, or over $98 per ton; but this is largely made up of drifting rather than stoping. The cost of taking out ore from the narrow veins of Lander Hill is large, but not so large as these figures would indicate. They properly include operations which have opened up much new ground. The additional cost of dead work during the year was $91,109, and the cost of milling the 1,537 tons alluded to was $41,416, or $26.95 per ton. Total cost, $283,106; profit on Manhattan ores, $104,474. The cost of milling 3,513 tous of custom ore was $88,376, or $25.16 per ton; the profit (about 10 per cent. on the amount paid to customers in returns or in purchase of the ore outright) was $49,060. The aggregate statement of earnings, as taken from the company's books, is as follows:

From company's ores, 1,537 tons

From custom ores, 3,513 tons

Mineral Hill Milling Company, profit

American Mining Company, proceeds of machinery
Appreciation of currency on hand December 31, 1870........

From this are to be deducted the following items:

Bullion freight, reclamations, &c..
Exchange account

Mill repairs

Taxes

Interest account

Fire insurance

Expense account
Bullion stolen.

Sundry losses

Leaving as net earnings, (coin)

A dividend of 5 per cent. in coin, amounting to $19,375, was declared in February, 1871, and a similar dividend was declared in January, 1872. The sum of $70,419.38 was spent during the year in mill improvements, $31,338.33 in the acquisition of mines, real estate, &c., and the erection of buildings. This sum, added to the dividend of February, 1871, makes $89,794.38, or $21,969.05 less than the earnings of the year. The surplus of December 31, 1871, was $104,982.07, and this was, therefore, increased by the sum mentioned, so that the company entered upon 1872 with a surplus on hand, in supplies, bullion, and coin, of

Eureka district has witnessed extraordinary developments during the year, and stands now third in rank of the silver-producing camps of Nevada. A general description of its resources and works has been given in my preceding report. On this occasion I shall, therefore, only trace the general progress.

The most important company operating in Eureka district is still the Eureka Consolidated. Daring most of the year four and sometimes five furnaces have been in blast. The newest of these furnaces are built according to original plans by Mr. A. Arents, the metallurgist of the company, and are essentially a combination of the Rachette and Piltz furnaces. Their construction and mode of operation are described at length in another part of this report, in the chapter on Metallurgy. The company's operations during the year, and the results of mining and smelting, as well as the prospects on October 1, 1871, are very clearly set forth in the report of the superintendent, Mr. W. S. Keyes, M. E., and that of the secretary of the company, which I reproduce here in full:

In the middle of January last the present superintendent assumed general charge of the mines and works of the company. At that time the works consisted of three small furnaces, entirely inadequate to the true capacity of the mines. The ground then owned by the company consisted of the Buckeye, 600 feet; the Kohinoor, 600 feet; the Mammoth, 600 feet; the Savage, 600 feet; the Champion, 400 feet; the Sentinel, 600 feet, and the Roseland, 600 feet. The Buckeye and the Kohinoor had been patented under one application, likewise the Champion, and the remainder were held in accordance with the local mining laws.

Work was prosecuted in but three places, viz, in the old Champion, which was nearly worked out; in the south and middle shafts of the Buckeye, in all of which not more than two months' supplies of ore were in sight. The superintendent immediately instituted vigorous prospectings, and was fortunate in proving the continuance of the old bodies and in discovering new, particularly in the ground purchased during the present administration.

The claims now owned by the company are: 1. Buckeye (and Kohinoor;) 2. Savage; 3. Nugget; 4. Sentinel (and Roseland;) 5. Champion; 6. At Last; 7. Margaret; 8. Lookout; 9. Triangle; 10. Elliptic; 11. Lupita; 12. Mammoth---in all, fourteen original locations.

Certificates of patent, which in case of controvery may be used in lieu of a patent, have been received for the Buckeye (and Kohinoor,) Savage, Sentinel (and Roseland,) Champion, Lookout, and Mammoth, viz, for eight original locations. The Elliptic application is now in course of publication, and will be concluded in October.

Patents of the United States will soon be forwarded from Washington, the Department having recently sent on for proofs of citizenship of the company's officers, which have been returned thither by your superintendent. The claims are held and patented both as ledges and square locations.

The extreme length of all the claims from the northwest boundary of the Lookout to the southeast point of the Triangle is 1,680 feet, the mean width over 200 feet, thus embracing very nearly the entire surface of the hill.

To a better understanding of the company's properties, a word or two in reference to the formation may not be out of place. Ruby Hill, whereon all the claims are situated, is an isolated spur from the main range reaching down toward the valley. The underlay or foot-wall of the ledge is a hard quartzite. On this we find a clean clay selvage of from two to four feet in thickness. Immediately upon the clay is found the lowest quartzy stratum of ore, rich in gold, moderate in silver, and almost barren of lead. Above this we find the true vein-matter, 300 to 350 feet in thickness, consisting of decomposed and compact oxides of iron, in and through which occur the true ore-bearing strata, varying in size from a few inches up to 35 and 40 feet. These, of which we have certainly eight, although frequently thinning out, have never in a single instance disappeared, thus furnishing a clew to follow which may at any time open out into a paying body. Superimposed upon the vein-matter we find a capping of altered limerock, thin on the southwest slope of the hill, and quite thick on the opposite side. Piercing the crust of lime-rock, the irony vein-matter has in every instance been reached, the Lookout shaft alone excepted, where the overlay seems to be exceptionally thick. The vein is of the character known as a "bed-vein;" it may also be viewed as a regular contact-vein, having a limestone hanging-wall and a quartzite foot. The underlay dips to the southeast, at an angle of 38 to 40 degrees on the southern end of the claims, and 80 degrees near the center of the hill. The latter number approximates the dip of the limestone on the northeast slope of the hill, and probably represents the true dip of the vein itself. All developments tend to establish the correctness of this hypothesis.

The general course or direction of the vein is north 52 degrees west. In a word, the mines of the Eureka Consolidated Mining Company are not limestone deposits, and bear no resemblance to such. This character of vein is not uncommon either in Europe, Mexico, or South America.

The mines have been opened by ten principal shafts and inclines, one tunnel with side drift and numerous prospect holes: 1. Lookout shaft; 2. Champion incline: 3. Savage incilne; 4. Windsail shaft; 5. Quarzite shaft, on Savage, near the road; 6. North shaft of Buckeye; 7. Middle shaft of Buckeye; 8. South shaft of Buckeye; 9. Keyes or main shaft on Buckeye; and 10. Sentinel shaft.

The various shafts and inclines have reached depths of 75 to 170 feet perpendicular. The exact figures, with the relative depths below the crest of the ridge, may be seen on the maps. Ore is at present being extracted from the Champion and Savage inclines, (all of which will soon be hoisted through the Windsail shaft, with which a connection has already been made;) from the north drift of the north shaft of the Buckeye; from the Sentinel shaft, and recently from both wings of the tunnel. The ground between the south and middle shafts, and extending to the main shaft, has been mostly worked ont, as also the old Champion chamber. Streaks of ore, however, continue onward from both places, which may at any time be followed..

Between the north and middle shafts of the Buckeye, in the old workings, we have still 1,000 tons and upwards of fine smelting-ores, which can only be extracted with facility through the main shaft. This will be done as soon as connection is made between the west drift from the main shaft and the middle shaft. In this way we shall be enabled to withdraw the ore-bodies near the surface, over which, at present, the ore teams are obliged to pass.

The present width of ore-streaks is, in the Savage and Champion inclines, 4 to 6 feet, all with a general tendency nearly perpendicularly downward: north shaft of Buckeye, 6 to 15 feet; Quartzite shaft, 4 feet; Sentinel, 4 feet; left branch of tunnel, 10 feet, undoubtedly a different body from the Sentinel, and dipping at a very high angle; right branch of tunnel, probably same body as in the other wing, entirely across the face of the drift; Windsail bo body, 24 to 3 feet, and dipping to meet those of the

Savage and Champion.

In Savage and Champion inclines I estimate fully two months' supply; in north shaft of Buckeye, old workings of Buckeye, Quartzite shaft and Sentinel, at least two months' supply of ore-reserves. In new ore-body developed in tunnels, assuming it to be the same, and of like character, 100 feet long between the tunnels, 10 feet thick, and 70 feet high, (which will not carry the ore to the surface,) we can reasonably count upon upward of 5,000 tons, or, say, two months' supply-in all, with approximate certainty, at least six months' supply.

The widths of the ore-streaks heretofore enumerated refer to the ends of the present drifts, and may be expected to continue. For future supplies we may count upon the following:

1st. The continuation of the present Richmond ore-body, the largest single mass ever found on the hill. This body dips toward the company's Lookout ground, and cannot be distant from the dividing line more than 30 feet. The Lookout is an older location than the Richmond, or any other on that portion of the hill. The Lookout shaft is now down 80 feet, and is being hurried forward night and day. We cannot expect to reach the ore-level inside of an additional 80 feet.

2d. Ore-body recently struck in the north drift from the main shaft; samples of the streak assayed rich in lead, $129 in silver, and no gold. The vein-matter, at a depth of 170 feet from the surface, commences 12 feet from the bottom of the shaft, and extends a distance of 115 feet, and not yet through. We are daily expecting a large body.

3d. The continuation of the ore-body struck in both ends of the tunnel. 4th. The as yet undeveloped wide stretch of ground from the Sentinel shaft through the Mammoth ground quite to the Windsail shaft, the whole of which shows on the surface a very large iron outcrop, with patches of ore.

As a general rule, the surface ores are the richer in lead. As depth is attained, we find a general diminution in the percentage of this metal, and an increase, if anything, in the amounts of the precious metals. To this, however, the tunnel-body and that in the north drift from main shaft are plain exceptions. This decrease in lead would seem to indicate the future necessity of milling at least a portion of the ores raised. At the beginning of the present year the ores became all at once of a more quartzy character; changed, however, in the course of two months to their former condition, and the same may possibly take place with our present deep workings. At all times we have had and shall continue to have some ores more suitable for milling than smelting.

The cost of hauling ore to furnaces is, for 60 tons per day, $2 per ton; for any amount above that quantity, $1.874.

The cost of mining will be seen in the reports of the home office. The superintendent does not receive the bills of supplies for the mines, of which the accounts are kept in San Francisco.

From January 1 to September 30, inclusive, there was raised from the company's mines a gross amount of 14,985 tons, 1,315 pounds.

The smelting-works of the Eureka Consolidated Mining Company are most eligibly situated in the lower portion of the ravine, wherein is built the town of Eureka. They consist of three old and two new furnaces, one blacksmith-shop, with two forgefires, and a complete set of tools, anvils, &c.; two boilers, one engine of 40 horse-power, one largest-size Blake's rock-breaker, four large Sturtevant blowers, which supply all the furnaces and both forge-fires; also a complete equipment of tools, tanks, trucks, shafting, pipes, pumps, &c., for the thorough working of the ores.

The company owns, in addition, one stone office, containing apartments for superintendent, clerk, and metallurgist; assay office, and adobe addition used as a store-room; also a stable on the opposite side of the ravine, and away from the furnace-fumes, with stalls for five horses.

The company owns likewise a fine water-privilege, which is housed in, from whence the water is conducted underground to the distributing-tanks adjoining the works. A small earth embankment has been thrown up in front of the works to catch the surface water from all the other furnaces above us, which water flows into a settling-tank, from which a 6-inch pump lifts the water so collected into the general distributingtanks.

The capacity of the furnaces is, Nos. 1 and 2, (old furnaces,) 16 to 18 tons per day each; No. 3, (old furnace,) 18 to 22 tons per day; Nos. 4 and 5, (new furnaces,) each 35 to 45 tons per day; No. 5 has already smelted as high as 52 tons in twenty-four hours, the ore having been particularly favorable; that is, for all five furnaces, 120 to 148 tons per day, according to the smeltability of the ores charged.

Consumption of charcoal per ton, dependent upon, first, the moisture, and second, the percentage of quartz in the charges, from 30 to 45 bushels per ton of ore-on the average, say, 35 bushels.

The costs of smelting are left to the home office, for the same reason heretofore stated, viz, that supplies, tools, castings, &c., purchased in San Francisco do not appear upon the books at Eureka.

Number of tons reduced from January 1 to September 30, inclusive, 14,951 tons, 1,315 pounds. Number of tons of bullion produced during the same interval, 2,550 tons, 1,402 pounds. Number of tons of ore to produce one ton of bullion will average, therefore, very nearly 54. Price of charcoal has varied between 28 cents and 30 cents per bushel. Price of wood, $6 to $6.25 per cord. Freight on bullion to Central Pacific Railroad has varied from $12.50 to $17 per ton; is now fixed by contract at $13.75.

In all smelting operations the question of fuel is one of vital importance, the cost of charcoal alone consumed in the company's works being the largest single item of expense incurred in the production of the metal. Already the nut pine, the only wood suitable for coaling, has been cut off within a radius of ten miles of Eureka. With every year the price per bushel of charcoal must increase, and in view of the probably increased consumption in the immediate future, your superintendent has the honor respectfully to suggest that steps be taken to test the feasibility of obtaining coke from some of the mines of the Rocky Mountains.

An attempt to use gas coke in one of the company's furnaces failed for the reason that the blast used was not of sufficient force to penetrate the heavy mass of compact coke and ore. To enable us to do this, there will be required a powerful engine of upwards of 100 horse-power, and a double-cylinder blast. Experiments on a small scale have shown that some at least of the Rocky Mountain lignites may be coked.

Charcoal now costs $40 per ton. Coke, your superintendent believes, can be made and delivered at the works at Eureka for $32 per ton; the smelting power of coke compared to charcoal is as 8 to 5, and therefore, could coke be employed, there will result a saving to the company of over one-third of the present outlay for fuel.

This question may possibly be left in abeyance until the succeeding spring and summer, at which time the enhanced price of charcoal will necessitate its solution. Wood supply is of minor importance; the price will probably rise to $7 per cord. As a pendant to the charcoal question, and in order to hold in check the grasping aspirations of the coal-burners, it may not be unadvisable to contemplate the possibility of erecting a mill for amalgamation.

Should the ores in depth assume a slightly increased percentage of quartz, it would be desirable to reduce them by the process of amalgamation; and in order not to proceed too hastily, a few tons of our quartzy ores might be worked in a mill. The Metropolitan Mill, within a few yards of the company's works, will within two months offer an opportunity to definitely test the question.

The superintendent would further respectfully suggest that he be authorized to secure the refusal for the company of two additional plots of mining ground on Ruby Hill, adjoining the Lookout on the north and west, and the Triangle on the south and east.

Very respectfully, your obedient servant,

W. S. KEYES,

Superintendent.

The following is the Secretary's report:

From sales lumber, &c.....

From rent of scales

From exchange on coin-drafts...

RECEIPTS.

From proceeds 2,038 tons base bullion refined.

From product 1,430 tons base bullion at refining-works, Newark, New
Jersey, and en route....

$146 85 12 75

1,923 62

619,275 67

504,800 00

1,126,158 89

General expenses, Eureka: