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PEAK DOWNS COPPER MINE
Gold was the agent that raised Australia at one stroke to be the wonderment of half of Europe. Its production, though in a lesser degree, is still adding annually to the wealth of the world. Though Rockhampton is the centrepoint of one of the largest pastoral districts of Australia, its formation and early existence were mainly due to the discovery of gold at Canoona in 1858, yet it was not until 1882 that the wonderful Mt Morgan mine was discovered a mine which has produced enormous quantities of both gold and copper. Twenty years earlier than this discovery, gold was found among the ranges of Peak Downs, where one find led to another, and by 1864 a wide area of auriferous ground had been opened up, with a population of 2000 or 3000 diggers. As deep ground was approached, in a majority of cases the gold got finer and poorer until it ceased to pay. Many of the returning miners from Peak Downs in 1864 and 1865 turned their attention to likely looking places in the neighbourhood of Rockhampton, and many were found to be exceedingly rich and easily worked. It was during the rush to the newly-discovered Peak Downs gold field, however, that a gold digger named Mollard, who was prospecting for gold in some ironbark forest country about four miles south-west of the embryo township of Clermont, came across a large outcrop of what appeared to be copper ore. This discovery led to the formation of the Peak Downs Copper-mining Company, concerning which a comprehensive survey of its operations has been made available.
The discovery was made known by Mr Mollard to Mr John A. Manton, of Sydney, who was at that time on Peak Downs, and who at once proceeded to the spot. Having considerable mining experience, M Manton had no doubt that the discovery was a valuable one. Purchasing Mr. Mollards right for a merely nominal sum, he took immediate steps to secure the ground in which the outcrop was situated, and, having ascertained by further examination that a fine lode appeared to exist, running nearly due east and west, and extending a long distance, he took up three mineral blocks of eighty acres each, covering a mile and a half along the course of the load by half a mile wide. Two additional blocks were subsequently secured by messrs. T.S. Mort and T. W. Smart, of Sydney, who with Mr Manton, afterwards became the promoters of a company formed for the purpose of working the mine.
In order to test to some extent the value of the lode, Mr. Nisser and Mr Arthur Ledger, two experts in mineralogy were engaged to visit the property and report upon it, Mr. Manton also making a separate examination and report. The principal outcrop was found to be 10 ft. above the surface of the ground, 16 ft. in length and 8 ft. to 10 ft. in width, and was composed of high percentage of ore. Both east and west of this outcrop the lode was easily traced and shown distinctly for a distance of 1140 yards, the lode dipping towards the south. Samples of the ore were taken from a number of different places along the load and were sent to Sydney for assay, the returns varying from seventy-seven to fifty-four per cent of copper, while the reports of Messrs. Nisser, Ledger, and Manton all agreed in being of the most glowing description, and the prospects and indications being spoken of as almost unparalleled in the history of copper discoveries. These reports having been duly received in Sydney, it was resolved, on the 18th of November, 1862, to incorporate a company with a nominal capital of $100,000 in $ shares, two thirds of which were to be retained by the owners of the ground as the value of their property, and considering as fully paid-up, the remaining third to be sold to furnish a working capital. The shares were not, however at that time placed before the public, messrs. Mort and Smart having offered to take the whole at par, or 20s. per share, which offer was accepted, the condition being that these shares should be preferential value of eight per cent per annum over those shares which were given for the property. This preference was, however, afterwards set aside and the whole of the shares were placed on an equal footing. Thus was incorporated the Peak Downs Copper-mining Company, with a working capital of $33,000 all the shares being held by the three original promoters and a few others, who had acquired shares by private arrangement.
Mr Manton undertook the first management and left Sydney early in 1863 with a small working staff; but owing to many difficulties on the road, which was at that time 260 miles in length from the port of Rockhampton, the party did not arrive on the company’s property until late in April, Mr Manton having himself made a detour to the more northerly post of Waverly (Broadsound), which was known to be much nearer in actual distance to the mining property than Rockhampton. Subsequently a road was formed between Broadsound and the Peak Downs, which reduced the distance to about 140 miles, and which for some years was almost exclusively used for mining traffic. Mr Manton proceeded to sink trial shafts along the course of the lode and to build the necessary huts and other buildings for stores, &c. For this purpose, as also for future operations for smelting, an abundant supply of capital timber was at hand but, as it was several miles to the nearest permanent water, it was found necessary to construct reservoirs for the conservation of a supply. About ten weeks after arrival upon the ground Mr Manton reported that, in addition to building twelve huts for the men with store, stockyard, &c., he had raised 400 tons of ore, averaging about forty per cent. This report was corroborated by Mr. W. Burgoyne, a mining captain of large experience, who at this time inspected the property and characterised the lode as “one of the richest in the world.”
The company’s first half-yearly meeting was held in July, 1863, when it was resolved to increase the number of shareholders by offering a large proportion of shares to the public, which shares appear to have been readily taken up.
The next six , months did not fully bear out the glowing expectations that had been formed. Materials for smelting furnaces had been procured from England, but the greatest difficulty had been experienced in getting them conveyed to the mine. Carriage in sufficient quantities, even at exorbitant rates, was not forthcoming, and the company at last had to purchase a carrying plant itself at a cost of between $2000 and $3000. A year after the formation of the company the material for only one furnace had reached the mine, and it was with great difficulty that the necessaries of life had been provided for the maintenance of the men.
About this time rumours were current in Sydney that the value of the property had been overrated and in April, 1864, just twelve months after the first workings commenced, Mr Josiah Dennis, a mining captain of skill and experience, took charge of the mining department in the place of Mr. Manton. He condemned the superficial way in which the work had been carried on and commenced to prove the lode at a depth by sinking a shaft fifteen fathoms south of the outcrop, in which at seventeen fathoms from the surface, he cut a lode, it being at that part 4 ft. 6 in. in width, and composed principally of red and grey oxides. This and other discoveries made by Captain Dennis in his early explorations fully re-established the character of the mine.
By the end of the third half-year of the company’s existence the alluvial gold workings in the vicinity of the copper-mine had so increased that the town of Clermont and Copperfield had been surveyed and established, and there was a comparatively large proportion of diggers and others living round about, by reason of which the difficulties hitherto existing as to a supply of labour, stores, and carriage were somewhat modified, though the scourge of fever and ague, so generally prevalent in newly-occupied country, proved a serious drawback.
Smelting operations had been attempted, but with little success, and had never been entirely given up until a competent staff of skilled smelters could be procured from South Australia.
Everything in the mine itself never looked so full of promise, but more trouble was at hand. It was found necessary to again suspend operations. At the end of 1864, Mr William Woodbine was appointed general manager-a position that he continued to occupy until the company’s operations finally ceased.
Mr. Woodbine arrived at the mine and took charge in February, 1865, when Captain Dennis again proceeded with the underground work, but owing to the delay in smelting the ores already at grass, the mining operations were not pushed forward with vigour. The South Australian smelters had in the mean time arrived and had found it necessary to reconstruct the two furnaces already built. They managed to refine fourteen tons of copper of excellent quality, which was immediately despatched to port, when they were again beset with difficulties. The furnaces and refinery would not stand the requisite amount of heat, the bottoms constantly giving way, owing, it was supposed, to the inferior quality of the material available. A particular class of sand and of fireclay was required. In addition to the local supply, samples of sand were tried from the Fitzroy River, 250 miles distant, from the islands in Keppel Bay, and from Sydney harbour. Eventually sand and fireclay (or bricks), were imported from Adelaide (South Australia), at an enormous expense for carriage, and were used until further research in the neighbourhood of the mine resulted in the discovery of these materials within a few miles of equal quality to those of South Australia. Still, however, the difficulties of smelting, and especially of refining, proved so great tat for a long time nearly all the copper was sent to market in a rough state and large quantities of the best ores were bagged and sent to other works to be smelted.
By the end of 1865 the company had despatched from the mine in all ninety tons of smelted copper. Most of it was rough, but it was worth $80 per ton in London. The return formed a valuable addition to the financial resources. Six months later, or three years after the formation of the company, the whole of the subscribed capital had been expended, with the exception of about $2800 of overdue calls, in addition to which some $14,000 to $15,000 being the proceeds of copper shipped and sold, and overdrawn bank accounts, had been disbursed in connection with the various works. Against this the valuable assets, including ores at grass, were estimated at about $16,000.
During the following years steady and satisfactory progress was made. The first steam engine was secured for pumping and hauling and was fixed at a shaft sunk some distance west of the principal outcrop. This shaft was sunk to the thirty-fathom level and a crosscut was driven at that depth twenty fathoms, cutting a rich vein of sulphurets and black oxides, yielding eight to ten tons of ore per fathom. Large quantities of good ore were raised and smelted and the number of furnaces increased to seven. More miners and smelters had been obtained from South Australia and also some competent furnace masons. A new road had also been marked from the mine to Broadsound and a survey made of the facilities of that port for shipping all at the company’s expense.
London prices for rough copper had reached $90, but during the year had declined to $76. The company balance sheet to the 31st of December 1866, showed a credit balance of $22,000, though the bank account was overdrawn, which prevented a dividend. At this period the mine itself was valued at $104,800, nearly $40,000 having been spent improving the property and adding to the original nominal value of $66,066. Another half-year passed, and though the production of copper continued steadily to increase, the time lost before could be realised upon was a constant drawback, and with a credit balance (in assets) of nearly $25,000 at the end of June, the bank overdraft had increased to over $13,000. Forty more miners had been added to the staff, and in April, 1867, Mr. J. P. Christoe had taken the management of the smelting department, as well as the duties of assayer.
The refining difficulties were not overcome and most of the metal was refined
before leaving the works. The depression in the copper market continued, about
$70 for rough copper being all that was obtainable, and even this price was not
maintained during the latter half of the year.
PEAK DOWNS COPPER MINE.
ITS HISTORY - II
At the close of the fifth year the enormous richness of the mine had overcome all obstacles. Over £90,000 had now been expended in the cost of management and the production of copper, but the value of the copper produced amounted to £125,000, leaving nearly £34,000 to credit of profit, and, as most of the metal had been removed and shipped, the directors fully justified declaring a dividend. The sum of £28,750was appropriated in this way, being twenty eight and three quarters of the company’s capital, the balance of £5,089 2s. 5d. being written off the book value of the mine. Seventy eight more South Australian miners were then on the way to the scene of operations. From this time work in every department was pushed forward with the greatest vigour, and prosperity waited on perseverance. The large accession of miners enabled the mining manager (Captain Dennis) to push forward his explorations, which in almost every instance were rewarded by the discovery of valuable deposits of ore.
The mine was inspected in October by one of the directors (Mr. J. S. Mitchell), who, on his return to Sydney, furnished his co-directors with an interesting report, stating that only a very small portion of the company'’ property had been touched and that its richness had in no way been exaggerated. Two dividends were declared in 1868, amounting to ten percent of the capital, and £5,418 19s. 9d. was written of the book value of the mine. The wisdom of paying these dividends was very doubtful as in both cases the money was advanced by the company’s bankers at a high rate of interest, the overdraft standing in June at £13,000 and in December at £18,000.
The year 1869 came and went with but little alteration in the output of copper, prices continuing as low as £74 to £76 per ton, but, in many respects, this was an eventful year. Carriage difficulties again occurred and were at last overcome by entering into a contract for five years with the carrying firm of Woods, Shortland, Fox, and Co., of Sydney, which, it was hoped, would prevent any further troubles in this respect.
During the year Mr. Christoe had been succeeded in the smelting department by Mr. Leyshon Jones, who made some slight alterations in the system of his predecessor. A coal seam, which had been discovered about twelve miles distant some time before, and secured by the company, was tested and found to be of a valuable nature, and the coal being described as “equal to the best New South Wales coal.” Owing to the abundant supply of excellent timber for smelting purposes which existed close to the works, no attempt was made to utilise the coal, which was left until firewood should become more scarce. The sum of £5,000 was written of the book value this year and £12,500 was appropriated to the payment of dividends, though the bank overdraft stood in June at nearly £40,000. The amount was, however, much reduced by the end of the year owing to the energy of the new carriage contractors in removing the stock of copper to port. In the year additions were made to the machinery, thereby facilitating the work.
In 1870 operations were much retarded by extensive floods in the early
months, but later on an improvement took place and the production in the latter
half reached an average of forty-two tons of refined copper per week. The market
was still depressed and the profits, therefore, were comparatively small, yet
the year’s dividends were £9,000, and £5,836 was written off book value.
Mr. Mitchell again visited the works in September and October and reported on
them in the most gratifying manner.
A powerful engine, with all the necessary pumping and winding gear, was therefore, ordered, and which arrived on the ground early in 1872, when the sinking of the deep shaft was proceeded with. In 1871 the increased production of copper and the advancing prices both operated to give a good return. Large profits were made, and at each of the two half yearly general meetings correspondingly large dividends were declared, amounting in the aggregate for the year to £55,000, being fifty-five percent on the capital for that year. There was also in the same period written off the book value of the mine £25,186, thereby reducing it to £70,000.
More miners being required the company through its London agents, engaged a number of men from the mining districts of Cornwall, defraying their passages to the colony under agreement. In this manner over 200 men, with their families, arrived at the mine in 1872-73. It was in the first half of 1872 that the company reached the zenith of its prosperity, and a species of mental intoxication appears to have been caused thereby. Shares rose to many times their nominal value, as might be expected when such dividends were paid, the price of copper was at its best, and the production then reached its highest point, namely 1449 tons for the half year. So elated were the directors that the values of the copper then en route and the ores at grass were calculated at a rate corresponding with the abnormal price that copper was at that time bringing in London. Instead of being content with another handsome dividend, at the rate of, say, fifty percent per annum, and carrying over a large balance of the estimated profits until such time as they should actually have accrued from the sales of copper, or, on the other hand, until the estimate had been proved erroneous by a fall in price as sudden as the rise had been, and which might naturally have been feared, the directors determined on a sensational dividend, and at the end of the half yearly general meeting held in July for the term ending the 30th of June, 1872, no less a sum than £100,000 was appropriated to the six month’s dividend. It was not until a long time after that the disastrous effect of this became freely understood. At the end of the year, although serious falls in price had taken place, which left a large overdraft in London (the difference between the advances made by the banks in the copper and the price it realised when sold), the directors were still able to show a small apparent balance to credit of profit and loss in the new estimate; but the following year demonstrated that even this was an excessive one, and, in July, 1873, it became necessary to admit to the shareholders that the mistake had been made twelve months before of anticipating profits by overestimate to the extent of nearly £42,000. Had this amount not been paid away, no great harm would have accrued, as the mine was still making a fair profit, but as it was, the company was saddled with an extensive debt, the incubus of which effectually crippled all future operations. The state of elation which had existed in 1872 now gave place to one of corresponding depression, deepening, as time went on, into actual panic.
The company was not incorporated under the Limited Liability Act, and, therefore, many holders of shares, fearing that its losses would involve them in ruin, endeavoured to sell at any price, and to such an extent was this feeling of insecurity carried that in a comparatively short time shares, which had been looked upon as good value for £8 to £9 each, were changing hands at 2s. 6d. to 5s. each.
As if in aggravation of the financial mistakes, things at the mine itself were beginning to assume a less favourable aspect. The mining manager’s report was discouraging in so far as that he admitted a great falling-off both in the quantity and the quality of the ores raised. Some time before this he had strongly urged that exploration of new ground should be prosecuted with greater vigour; but, owing to adverse counsels, and somewhat to the scarcity of men, this had not been done, and as the ground already opened began to show signs of exhaustion, there was much difficulty in raising anything like the average quantity of ore. The new shaft, which, it was hoped, would have opened out quite a new mine, had been sunk to a great depth without discovering anything of importance. About thirty fathoms from the surface a very small quantity of poor ore had been passed through, and the opinion now became prevalent that this had been the lode itself and that no other would be found below it. Captain Dennis differed from this opinion; but, as all unproductive expenditure was now discountenanced, the smelting was before long entirely discontinued. Another mining expert (Captain Josiah Holman) was engaged to thoroughly inspect the mine and make a plan of the underground workings. His report was unfavorable to the system hitherto carried out, and especially so to the new shaft, which, he maintained, had, without doubt passed through the lode and was quite useless for the purpose it was designed for. No further attempt was, therefore made to sink it deeper.
One result of Captain Holman’s report was the resignation of Captain Dennis
and his own appointment to the vacant post, which took place in the latter part
of 1873. From the date of his taking charge almost all the energy of the
department was directed to procuring ore for immediate wants at the smallest
outlay. The lode outcrop was attacked all along its length wherever good
indications were to be found, and tributes were let to parties of men. In
this manner a considerable quantity of good ore was raised from small bunches
near the surface. The great aim was to relieve the company from its load
of indebtedness and everything else was sacrificed to that end. Indeed, it
could hardly be otherwise.
Steadily, though by slow degrees, the company now began to emerge from its embarrassed position. Every succeeding six months showed a little improvement, and by the end of 1875 the whole of the debit against the profit and loss had been wiped out and the estimated assets of the company showed a surplus of £52,000, rather more than equal to half the capital.
During the year another extensive property was acquired in the Western Peak Downs mine, situated about seven miles west of Copperfield. This mine had been taken up some time before by the Western Peak Downs Copper mining Company, Limited, which, having been floated on an altogether inadequate capital, had been obliged to succumb, after partially opening out its ground, and in its winding up the mine was disposed of for a few hundreds to the older proprietary, which hoped to largely supplement its supply of ores therefrom. This hope was, to a great extent, frustrated by the distance which the ore had to be carried to the furnaces, as well as by its comparatively small value, and the cost of a tramway to connect the two mines was too heavy for it to be undertaken.
Although at this time the aspect of affairs were less gloomy than three years before, financial troubles had not ceased to harass the management. Ever since the big dividend the liabilities to outside creditors had maintained an average of nearly £50,000, most of which was bearing overdraft interest, nor was it until the end of 1876 that this heavy burden was appreciably reduced.
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