Colonial Despatches

I have the honor to avail myself of Your Grace's permission to lay before you some further particulars of the discovery of a vein of Auriferous Quartz in Queen Charlotte's Island, and to submit to you in writing some of the considerations which, in the interview Your Grace was pleased to favor me with, I stated in support of the application made by the discoverers for a Lease to enable them to work for gold silver and other metallic minerals within a certain portion of the Island.

Particulars of the precise position of the vein andof of the circumstances which led to its discovery, together with the expenditure and loss incurred by Mr Easterby and his partners are contained in the accompanying Statement and map.

Mr Easterby has come to England in the hope of obtaining such a grant as will enable him to make arrangements for applying a sufficient Capital to the works necessary for realizing some of the fruits of the discovery made through the enterprize of himself and partners in exploring the shores of a portion of Her Majesty's dominions almost unknown and which has hitherto contributed nothing to the commerce or wealth of Great Britain.

Mr Easterby has broughtwith with him specimens of the ore contained in the vein, which shew clearly that it is auriferious quartz of a character and richness similar to that obtained from the mines of California. Some of these specimens have been assayed by Mr Arthur Phillips, an eminent metallurgical Chemist, and have yielded gold equivalent to 10 ounces and upwards per ton of ore; but from all the information I can gather I am satisfied that the average produce of the ore ought not to be estimated at a higher rate than 4 ounces per ton, which appears to be the ordinary return from such of the quartz veins of California as have been worked on an extensive scale.

Your Grace will readilyperceive perceive that ores of this quality can only be profitably worked upon a large scale and by means of systematic and well arranged Mining operations, carried on with the aid of Machinery and other applications of Modern Engineering, by which manual labour may be economized and large quantities of the material may be won at a moderate expense.

These requirements appear to me to render it impossible that veins of this kind should be successfully worked by 'diggers' on their own account, and to make it manifest that for the full developement of the value of such deposits of gold it must be necessary to secure to Capitalists, who will undertake the Mining operations, a certaindefined defined area or extent of ground for a fixed turn of years and upon terms as to Royalty or Rent proportioned to the circumstances of the case.

Mr Easterby having furnished me with a map of that portion of Queen Charlotte's Island in which the gold has been found, and having described to me the course of the vein and the range of the stratification of the country, I am enabled to suggest as the "limits" for the grant, that the area should be "bounded" on the North or N.W. by the sea or channel, and on all other sides by a line forming the segment of a circle, the radius of which should be five miles and the centre at Una point in Mitchell's Harbour.

The term proposed for the Lease is Sixty years, andthe the Royalty five per cent, that being the rate paid upon the produce of the Mines of the precious Metals to the Governments of Spain and other countries where they have been extensively worked.

I am requested by Mr Easterby to state on behalf of his partners and himself, that they can offer to the Crown security for the payment of the Royalty and also facilities for its collection, from the circumstance of their intending to ship the entire produce of the mines direct to London for reduction at the works of the Colonial Gold Company or some similar Establishment, from whom the Royalty can be directly obtained: but I would suggest that if it be Your Grace's opinion thatthere there would be risk of evasion under such a system that in lieu of a Royalty the Lessees shall pay a rent or license fee proportioned to the number of men employed monthly, guaranteeing such a minimum payment as may be deemed reasonable.

I may add that I know these gentlemen to be highly respectable, and that they may safely be accepted as Lessees under the Crown: further being thoroughly acquainted with California and the adjacent countries and the difficulties encountered, they would be able to take measures for their own safety and would not require from Her Majestys Government any special protection.