IL LINOI S UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN PRODUCTION NOTE University of Illinois at Urbana-Champaign Library Brittle Books Project, 2012. COPYRIGHT NOTIFICATION In Copyright. Reproduced according to U.S. copyright law USC 17 section 107. Contact dcc.@library.uiuc.edu for more information. This digital copy was made from the printed version held by the University of Illinois at Urbana-Champaign. It was made in compliance with copyright law. Prepared for the Brittle Books Project, Preservation Department, Main Library, University of Illinois at Urbana-Champaign by Northern Micrographics Brookhaven Bindery La Crosse, Wisconsin 2012 / 2 ppppp i 1 1927. QUEENSLAND. SPECIAL REPORT BY THE AUDITOR-GENEIRAL ON THE STATE SMELTERS, ORE REDUCTION AND Wg TREATMENT WORKS AND MINES, CHILLAGOE. Presented to Parliament, and Ordered to be Printed. Audit Office, Brisbane, 24th August, 1927. SIR,-I have the honour to submit for presentation to Parliament a Special Report on the State Smelters, &c., at Chillagoe. In order that the result of my investigations may be available to Honourable Members without delay, I have deemed it advisable to submit this Special Report instead of enbodying the information in my Annual Report. I have, &c., G. L. BEAL, Auditor-General. The Honourable the Speaker, Legislative Assembly. THE STATE SMELTERS, ORE REDUCTION AND TREATMENT WORKS AND MINES, CHILLAGOE. Following the debate in Parliament last session upon the Chillagoe State Smelters Ore Reduction and Treatment Works and Mines, the Honourable the Premier requested me to visit Chillagoe and investigate the charges made in the House against the management. As the matters to be enquired into required a knowledge of metallurgy, the services, of Mr. E. Noel Goode were made available to me. Mr. Goode is an Associate of the South Australian School of Mines, a Member of the American Institute of Mining and Metallurgical Engineers, and a member of the Australian Chemical Institute. He was for thirteen years Chief Metallurgist at Mount Morgan, three years as Metallurgist with the Port Kembla Electrolytic Refining and Smelting Coy., and at the date of the enquiry was in the employ of The Hoskins Iron and Steel Coy., New South Wales. A. 19-1927, 562. 2 Accompanied by Mr. Goode I arrived at Chillagoe on 31st January last, and remained there until 10th February, and during the period between those dates the various charges made in Parliament, together with the financial position of the undertaking, were investigated. The statute under which the Smelters were acquired-" The Chillagoe and Etheridge Railways Act of 1918 "-authorised the Government to purchase- (a) The Chillagoe and Etheridge Railways with rolling-stock, &c.; (b) The Chillagoe Smelters and Ore Reduction and Treatment Works; (c) Mining plant and machinery; (d) Other property, including Einasleigh Mine- for the sum of �701,000. The Act provides f6r a revaluation of the above and the allocation of the purchase money according to such valuation. The State Smelters were charged with �40,000 as its proportion of the purchase price, made up of- � Smelters and appurtenances .. .. .. 30,000 Mining plant and machinery .. .. .. 1,000 Einasleigh Mine .. .. .. .. .. 9,000 �40,000 The Railways had to bear the balance of �661,000. The Act makes provision for the appointment by the Governor in Council of a "Chillagoe Mines Manager," and in March, 1919, applications were publicly invited for the position at a salary of �1,500 per annum. Mr. P. L. Goddard was appointed in April, 1919, " to take charge of the smelting operations to be carried out in connection with the properties acquired by the -Government under the Chillagoe Purchase Act." Mr. Goddard's salary was fixed at �1,000, with free house, fuel, and'light; and he was advised that his appointment to the higher position of General Manager at the advertised salary would be dependent on the successful carrying out of his duties under the "present arrangement." Mr. Goddard was subsequently appointed General Manager for a period of three years from 22nd April, 1920, and the term was extended for a further five years to April, 1928. The charges which I was required to investigate were based mainly upon alleged preference to Mr. F. Reid in respect to payments for ores and slag fluxes. supplied by him to the Smelters. It was charged that Mr. Reid had been paid under tariff rates and conditions which were more favourable than those applied E otier ore suppliers. ' L the conclusion of the investigations Mr. Goode submitted to me a comprehensive report dealing with the methods of receiving and recording the purchased ores, the various tariffs operating, the valuation of the ore 3 and metal stocks, &c., and the charge of preference to F. Reid. The report is appended, pages 13-26. Mr. Goode has endeavoured to eliminate as far as possible technical terms, and to comment upon the various matters in question in a way which may be readily followed. In addition to questions directly relating to preference to Mr. F. Reid, the following matters referred to in Parliament are dealt with in Mr. Goode's report :- (1) Deduction of 5 units in respect to ores containing under 12 per cent. lead. (2) Riley and party's ores supplied from August to October, 1925. (3) Ore supplied by the Baltic Syndicate, from August to September, 1926. (4) Purchase of Montalbion slag. (5) Returned local (Chillagoe Smelters) furnace slag. (6) Lead ore supplied by F. Reid, July, 1926. (7) Ti-tree flux ore supplied by F. Reid. The issued tariffs and the methods of receiving and recording the purchased ores are dealt with in detail by Mr. Goode. At my request he examined the whole of F. Reid's ore purchase notes and those of suppliers who were mentioned in the discussions in Parliament. A reasonable percentage of the purchase notes of all other suppliers was also checked. The tariffs were framed by the General Manager of the Smelters. In July, 1926, it was decided to discontinue, as from 1st October, 1926, to operate what was known as the " sixty-forty tariff," and to substitute a "fifty-fifty tariff." No ores were purchased from F. Reid under the latter tariff. There is a provision in the ordinary, or standard, tariff for lead ores, for the deduction of 5 units before payment is made for ores containing under 12 per cent. lead. This provision was not enforced except in respect to two parcels of ores which are referred to in Mr. Goode's report, page 14. Although the "sixty-forty tariff" prescribes the penalties "as set out in the ordinary lead tariff," the 5 units deduction was not applied to ore purchased under the former; the General Manager contended that this provision was included in error, as the "sixty-forty" was a special tariff for the straight-out purchase of low-grade ores containing not less than 10 per cent. lead, or its equivalent of silvr and lead. The "sixty-forty tariff" was further departed from by the non- enforcement of the roasting charge for ores assaying 4 per cent. and over of sulphur. As the greater portion of F. Reid's ores was purchased under the sixty-forty tariff a short explanation of it may be of interest. The sixty-forty basis is the payment to the seller of 60 per cent. of the wet assay value of lead in the ore supplied, plus 95 per cent., less 1 oz., of the value of the silver at standard. This tariff works out at very favourable terms to the seller of low-grade ores, but has been costly 4 to the Chillagoe Smelters. On the basis of purchase the silver need not be considered in the profit or loss as the tariff penalties would approximately meet the smelter losses on treatment. Lead contents on the basis of 10 per cent. ores, wet assay, payment for 60 per cent. equals 6 units per ton. Assume price of lead .. .. .. .. �28 0 0 per ton, And realisation costs .. .. .. .. 6 15 0 ,, Net value of lead at Chillagoe .. .. .. �21 5 0 per ton, equal to 4-25 shillings per unit. As the seller is paid 6 units there remains for the Smelters to cover all charges for receiving and treating 4 units, less losses. Allowing a recovery of 85 per cent. the lead recovered from the 4 units is 3-4 units, which, at 4-25s. equals 14s. 5d. The treatment and working costs on all ores were approximately 60s. per ton. The construction and manipulation of tariff dues is a complicated matter, as, in addition to the realizable metals, the base metals for fluxing purposes or otherwise should be taken into consideration. The illustration above of the purchase of-low-grade ores at 10 per cent. lead with calculations for rising values at the lead unit value shows that the 60-40 tariff could not be commercially applied in treatment at Chillagoe. The Smelters financed F. Reid by making cash advances against ores to be delivered, and the statement, page 28, which covers the transactions from July, 1925, to June, 1927, shows the extent to which he was assisted. Some other ore suppliers were assisted financially to a reasonable extent. In June, 1926, an entry was passed through the Smelters books crediting F. Reid's account with �7,173 for ores, and this entry liquidated his overdraft and obviated his name appearing in the sundry debtors' ore account at the close of the financial year ended 30th June, 1926. The deliveries of the ores to the Smelters were not completed until October, 1926. As previously mentioned it was decided to cancel the " sixty-forty tariff," and the -notice appended, page 27, was issued from the Smelters in July, 1926. Notwithstanding this notice a contract was arranged on 30th September, 1926-the last day the tariff was to operate-for the purchase from F. Reid of 2,586 tons of lead ores and lead slag flux at a gross value of �6,679. -These ores were purchased on tramlines at Irvinebank and at railway sidings, and Reid's account was credited with the amount, less charges, in September, 1926. At the end of June, 1927 (after the Smelters had closed down) there remained to be delivered at the Smelters 950 tons of the above, and at that date F. Reid's account in the books of the Smelters showed a debit balance of �2,214. Apparently by reason of the contract this supplier can continue delivering ores to the value of the iurchase even if the Smelters are closed down , indefinitely. Iii ovbmber, 1926, the General- Manager contracted to purchase 2,000 tons of lead slag flux from F. Reid, the payment being on a basis of 80 per cent. of full metal contents, plus 9s. per ton as a flux value; 5 payments to be made at the average metal prices for the month of delivery at Smelters. The deliveries to 30th June, 1927, totalled 1,048-5 dry tons, leaving 951-5 tons which may still be deliver'ed. This slag flux was obtained from Muldiva, and it is interesting to note that the Irvine- bank slag was purchased on the basis of full metal contents, only. Ore-purchase notes of 15th January, 1926, denote that F. Reid delivered from Irvinebank during December, 1925, 510 tons of lead ore and slag, whereas at this time the Smelters had stacked on the line 3,868 tons awaiting railage to the works. Reid's ores were given preference of delivery over ores already purchased by the Smelters, although the price of metals was falling. The following quantities of fluorspar were taken by the Fluorspar Mining Company from the Smelters stock, with, the permission of the General Manager of the Smelters:- June, 1926-Loaded from stock pile and charges Tons. debited to company .. .. .. .. 26-1875 August, 1926-Loaded from stock pile and charges debited to company .. .. .. .. 1066750 August, 1926-Received from Lyons and Ahern and reconsigned .. .. .. .. .. .. 504750 183-3375 The following quantities were received from the Fluorspar Mining Company :- Tons. August, 1926 .. .. .. .. .. .. 167000 November, 1926 .. .. .. .. .. 3023822 319*0822 The company was paid for 135-7447 tons only, so that the quantity on loan to the company was adjusted. At 30th June, 1926, the undermentioned credit to the company was passed through the Smelters books: "Fluorspar, 188-4621 tons at �2 15s. per ton, �518 5s. 5d.," and this credit cleared the amount owing by the company. The Smelters stock sheets at 30th June, 1926, and at the time of my visit (31st January, 1927) denoted that this quantity (188-4621 tons) was on hand at the Fluorspar railway siding. A senior Audit Inspector in company with Mr. H. Nichols, who is temporarily in charge of the Smelters, visited the siding and the mine on 7th April, 1927, but there was no fluorspar the property of the Smelters at either the siding or the mine. Although the 188 tons were paid for. by credit entry to the company at 30th June, 1926, and had not been delivered at 30th June, 1927, a parcel of 16 tons purchased from the company in August, 1926, and 302 tons in November, 1926, were duly delivered to the Smelter.;, ,Th I fact that the Fluorspar Company borrowed 132 tons from the Smelters stock pile in June and August, 1926, makes it questionable whether the 188 6 tons were available for delivery between these dates. The Smelters closed down on 17th June, 1926, for the campaign of 1926. To adjust the matter the company has been debited with the sum previously credited (�518 5s. 5d.) and it remains for the Smelters to collect the amount. On page 22 reference is made to the Ti-tree flux ore obtained from F. Reid. In all 1,058 tons were purchased at a cost of �706, and 164 tons of this quantity delivered at the railway siding in February, 1924, have never been lifted. Apparently the ore had no value as regards recoverable metals, and no furnace-fluxing value. I will refer to the matter of the timber supplied to Mount Mulligan Coal Mine by the Tarzali Saw Mill when dealing with that enterprise in my general report to Parliament. The question has been raised as to whether railway and realisation charges have been debited. The examination of the ore-purchase notes showed that these charges in F. Reid's and other cases have been passed on to the ore suppliers. FINANCIAL. The Smelters commenced operations in January, 1920, and, after allowing for the liquid assets at 30th June, 1927, at balance-sheet values, the cost to the Treasury of the undertaking for the seven and a-half years to 30th June, 1927, was �1,164,822. This amount does not take into consideration interest from 1st July, 1924, to 30th June, 1927, as this charge was suspended during that period; it includes, however, what has been shown in the books as "capital expenditure." The position is- � s.d. Owing to Treasury, 30th June, 1927 .. 960,410 13 8 Losses to 30th June, 1924, written off .. . 281,821 17 9 �1,242,232 11 5 Deduct value of liquid assets 30th June, 1927 .. .. .. .. .. 77,409 15 6 Cost to Treasury . .. .. �1,164,822 15 11 of which �541,308 Os. 8d. has been treated as capital expenditure. In view of the way in which the financial position has been misstated in the balance-sheet at 30th June, 1926, it is questionable whether similar methods were not employed in previous years in order to reduce losses. In my report to Parliament dealing with the accounts for the financial year 1925-26 I mentioned that the loss for the year originally disclosed by the Smelters books was �66,907, which was subsequently increased to �155,893--the difference, being accounted for by the over- valuation of the stocks of ores and by-products. The morning after my )Artiva l in Chillagoe, I arranged with the General Manager for Mr. Goode, in conjunction with the Smelters Metallurgist, to check and value the ore, intermediate metal, and the flux and fuel stocks. 7 As the value of the flue dust at the works was discussed in Parliament, Mr. Goode had the flues opened up, and, after examination, the two metallurgists agreed that the recoverable value of the metal contents, after allowing for treatment and realisation costs, was �1,743. The value for balance-sheet purposes for the year 1925-26 was originally set down by the General Manager at �40,676, but was later eliminated. The stocktaking revealed serious shortages and I am of opinion that the stocks have been inflated in previous years. Not only have the stocks been inflated, but the value of the intermediate metalliferous stocks has been overstated. The Profit and Loss Account for the year ended 30th June, 1927, shows a loss of �156,126 2s. 11d., but of this amount a sum of �94,055 5s. is attributable to the previous year and may be dissected as follows:- (1) Over-valuation of crude ores and by- � s. d. products .. .. .. .. .. 66,326 3 1 (2) Excess valuation of fluxes and miscel- laneous" stock .. .. .. .. 20,111 7 10 (3) Loss on sale of metals as compared with values taken for balancing purposes at 30th June, 1926 .. .. .. .. 7,617 14 1 �94,055 5 0 1. Over-valuation of Crude Ores, &c., �66,326 3s. Id. The stocktaking indicated *that at 30th June, 1926, the Lady Jane and Girofla ores were overstated by 360 and 5,547 tons respectively; at that date these mines were being worked by the Smelters, subsequently they were handed over to the miners to work. The metal contents of these tonnages were valued in the balance-sheet, of 30th June, 1926, at 2s. 6d. per oz. for silver, and lead �33 5s. per ton (less realisation costs, �6 15s.), net �26 10s. The value of the metal contents of the matte on hand at 30th June, 1926, included both the copper and lead, although it was well known to the management that with the plant at Chillagoe only one of these metals could be extracted. The over-valuation in respect to this item alone amounted to �10,732. It should be noted that the metals in ore stocks at 30th June, 1926, were extracted during the smelting campaign commencing October, 1926, and had not been disposed of at 30th June, 1927. The General Manager in determining the value of metals for the balance-sheet of 30th June, 1926, took the average ruling prices for that month-viz., silver 2s. 6d. per oz. and lead �33 5s. per ton, less realisation costs, or net �26 10s. I am of opinion that these values-were reasonable as it is impossible to anticipate market fluctuations. For the) l4P,"a heet 30th June, 1927, I have taken the average price for the three months April to June, 1927 vhich gives 2s. 4-2d. per oz. silver, as 8 compared with 2s. 6d. and lead �25 11s. 3d., less realisation costs �6 15s., or �18 16s. 3d. net compared with �26 10s. taken for June, 1926. I append a statement, page 32, giving the monthly average metal prices for the twelve months ended 30th June, 1927, and reference to this will show the fall in prices. The market quotations on 18th August, 1927, were :-Silver per oz. 2s. lid., lead per ton �23, and copper per ton �55 2s. 6d. 2. Excess Valuation of Fluxes, &c., �20,111 7s. 10d. The stocktaking necessitated the writing down of the fluxes, &c., on account of shortages and over-valuations. 3. Loss on Sale of Metals, &c.- The lead bullion on hand at realised Deduct realisation Balance-sheet val Loss.. 30th June, 1926, .. .. .. .. �106,254 5 1 i costs.. .. .. .. 16,684 4 7 89,570 0 6 uation .. . . . . 97,447 10 9 .. .. .. .. .. �7,877 10 3 The blister copper realised .. �15,650 19 0 Realisation costs .. .. .. 2,614 6 9 13,036 12 3 Balance-sheet valuation .. .. 12,776 16 1 .. .. .. .. .. 259 16 2 .. .. .. . .�7,617 14 1 When reviewing the accounts I stated in respect to the item " balance-sheet at �298,275, that a necessary, and would undoubtedly capital value of the undertaking. for the year ended 30th June, 1926, Mines and Plant," appearing in the revaluation of the fixed assets was result in heavy writing down of the Included in the above item are the following:- Einasleigh Mine, which stands in the books at a value of �25,512 15s. 6d., was closed down in May, 1922. The mine was dismantled and the machinery and most of the buildings were removed years ago. The Consols Mine is shown at a value of �33,893 9s. 11d., although the mine has not been worked for over two years and the tribute agreement expires in January, 1928. Wilson's Leases, value �5,527 11ls. 2d. The tribute agreement lapsed years ago and'the Smelters liave no title to the lease. These " assets," totalling �64,933 16s. 7d., should be written off. Profit .. Net loss 9 The Mungana Mines purchase price, �40,000, is shown as an asset, as is also the developmental expenditure on Girofla Mine, �96,515, and that on Lady Jane, �86,131. Since July, 1926, both these mines have been worked by mining parties without rental or other charge, as apparently it was unprofitable for the Smelters to continue operating. These mines are given a total capital value of �222,646 in the books, which is undoubtedly excessive. If the Smelters are to be reopened the whole of the asset values should be reviewed so that a reasonable amount may be set against them. Should the works not be restarted it is obvious that a big percentage of the fixed assets will have a very small break-up value. Owing to wet weather the Smelters closed down on 12th February, 1927, after a run of seventeen weeks, for the 1926-27 campaign. In October, 1925, a five-ton motor lorry was purchased by the Smelters at a cost of �1,315. F. Reid took possession of the lorry with the intention of purchasing it, and his account at the Smelters was debited with the cost. He apparently worked the lorry until February, 1926, when his account was credited with the original purchase cost-�1,315-- and the lorry again became the property of the Smelters. Subsequently it was rented to F. Reid, the basis of the charge being the tonnage of ores carried, and Reid paid �126 10s. in this respect. The following additional outlay was made by the Smelters:- June, 1926, tyres, &c. .. .. .. �139 17 6 January, 1927, spares, &c ... .. 128 14 10 �268 12 4 The Smelters took possession of the lorry on 25th March, 1927, and it was valued by the Chief Engineer of the works at �400. Summarised the position is- Original cost of lorry . .. .. �1,315 8 5 Tyres, spares, &c. . . . .. .. 268 12 4 �1,584 0 9 Rental received .. . �126 10 0 Present value of lorry .. 400 0 0 526 10 0 Cost to Smelters .. .. .. .. �1,057 10 9 Included in the " bad debts " written off is an item of �146 19s. 5d. which was owing by J. S. McHardie. The Fluorspar Mining Company had a 14-ton motor truck for disposal at a price of �250. The Smelters advanced the amount in September, 1926, to McHardie, who was to. liquidate the debt from his earnings in the cartage, of ores from Red Cap Mine 10 to the railway siding-a distance of about three miles. In March, 1927, the debt had been reduced by �38 only and McHardie at that date handed the lorry back, and it was added to the Smelters plant at the Engineer's valuation of �65, and the unsatisfied debt of �147 was written off. STATE STORE, CHILLAGOE. At 30th June, 1926, this retail store was carrying a stock which stood in the balance-sheet at �6,739. After my visit to Chillagoe the Cabinet decided to close the store and dispose of the stock by tender. No satisfactory tender was, however, received, and the Manager of the State Stores, Brisbane, was instructed to visit Chillagoe, take charge of the stock, and dispose of it to the best advantage. I am of opinion that the store was overstocked and dealt in many lines which it was unnecessary and inadvisable to handle. At 30th June, 1927, the accumulated losses amounted to �1,526, but until the stock is disposed of and the cash value of the " sundry debtors " ascertained, the total loss cannot be stated. The store is indebted to the Smelters to the extent of �2,357 and to the Treasury �1,673; how far these amounts will be met depends upon the disposal of the stock and the collection of amounts owing by sundry persons. It is, however, quite certain the final loss will be considerably more than the amount shown in the Accumulated Profit and Loss Account. BUTCHER'S SHOP, CHILLAGOE. When I advised the Honourable the Premier of the financial position of this business it was decided to close the shop. It was subsequently rented to one of the employees, and certain plant, &c., sold to him. For the nine months to 31st March, 1927, on a turnover of �3,162 a loss of �1,252 was made, the wages alone absorbing �1,286, or approximately 40 per cent. of the sales. The accumulated losses to 30th June, 1927, were �1,713-the Treasury overdraft �2,280, and the indebtedness to the Smelters �2,275. ACCUMULATED LOSSES. The Smelters Trading Account and Profit and Loss Account for the year 1926-27 and the Balance-sheet at 30th June, 1927, are appended, pages 33-34. It will be noted on reference to the balance-sheet that .,the accumulated loss is �341,948, to which must be added �281,822, losses already written off, making the total disclosed losses �623,770. When the assets are reduced to reasonable values the total deficit will be considerably increased. In addition to the Smelters losses the subsidiary businesses- Retail Store and Butcher's Shop-show accumulated losses totalling �3,240, tand this Will be added to on the disposal of the stock of the store. 11 CONCLUSIONS. The investigation disclosed that Mr. F. Reid had been given direct preference over other ore suppliers in that the issued tariff was not a4hered to in respect to the deduction of I oz. of silver; this penalty was enforced against all other ore suppliers. The investigation further disclosed that the bonus system and the variations of, or departures from the issued tariffs resulted in large additional payments to F. Reid. Preference- The preference given to F. Reidby reason of the non-deduction of the 1 oz. of silver from his metal payments for the period 1st January to 30th June, 1926, advantaged him to the amount of �438 7s. 7d. Bonus Payments- A system of bonus payments operated from 1st July, 1925, although not recorded in any tariff. F. Reid was granted cash bonuses totalling �1,364 on account of the tonnages of ore supplied during the period 1st July, 1925, to 30th June, 1926. Two other suppliers only qualified for and received the bonus for ore delivered during the same period, viz.:- G. T. Cox, junior .. .. .. .. �108 13 2 Riley and party .. .. .. .. 29 15 3 Although the tonnage bonus was open to a11 suppliers the manage- ment must have realised that the bulk of the payment would go to F. Reid. Reference to Mr. Goode's report, page 18, will show how the bonus conditions were varied from time to time. Roasting Charges- The tariffs denote a penalty charge of 15s. per ton on all ores ,assaying 4 per cent. and over of sulphur. This penalty was departed from during the year ended 30th June, 1926, on all mixed carbonate and sulphide ores purchased, and F. Reid was benefited thereby to the amount of �2,912 9s. Ild. Three other suppliers benefited, viz:-- Jones and party to the extent of �39 12 5 J. S. McHardie ,, ,, ,, 81 18 2 J. J. Hanrahan ,, ,, ,, 35 18 10 Adjustment Payments (Lead Slag)- This matter is referred to at some length by Mr. Goode on page 20. A special tariff was issued in August, 1925, for the purchase of lead slag flux, the basis of payment being-- 85 per cent. of the silver, 80 per cent. of the lead, and August payments were made accordingly. September deliveries were paid for on a tariff of- 80 per cent. of the silver, 80 per cent. of the lead. October and November deliveries were paid on a tariff of- 90 per cent. of the silver, 90 per cent. of the lead, , i - ;d December deliveries were paid for on the basis of'the fall metal 'ontents. 12 Adjustments were subsequently made whereby the full metal contents of deliveries from August to November, inclusive, were credited. This involved an additional payment to F. Reid of �1,336 5s. lid. No purchases were made under this special tariff from any ore supplier other than F. Reid. Deliveries of Ores at Tramlines ani Railway Sidings- Under the tariffs the payments for lead and silver were on the basis of the price quoted in the " Sydney Morning Herald" for the week the ores were delivered at the Smelters, Chillagoe; the practice has been to pay on the average price for the month. F. Reid's ores were largely purchased on tramlines and at railway sidings, and he received the ruling price for the month the purchase was made at those places instead of the price quoted for the month of delivery at the Smelters. This departure not only gave Reid large cash advances against delivery of ores to Smelters, but resulted in additional payments to him during the period July, 1925, to February, 1927, amounting to �2,723 16s. 8d. Statements are appended pages 29-31, showing the quantities of ores purchased at the different centres and the deliveries to 31st March, 1927, together with details of the monetary advantage to F. Reid by reason of the purchase of his ores and slag fluxes at railway sidings and mines. By direct preference in the non-deduction of the 1 oz. of silver and the variations of "the published tariffs previously referred to, F. Reid benefited to the amount of �8,775. The General Manager, Mr. P. L. Goddard, tendered his resignation on 31st March last, which was accepted by the Governor in Council as from that date. The following are appended:- 1. Report by Mr. E. Noel Goode, pages 13-26. 2. Notice of cancellation of the " Sixty-forty tariff," page 27. 3. Details of account of ore-seller Mr. F. Reid, page 28. 4. Centres from which Mr. F. Reid's ores were purchased, pages 29-31. 5. Statement of payments for Mr. F. Reid's ores delivered at railway sidings and mines, pages 30-31. 6. Average metal prices, July, 1926, to June, 1927, page 32. 7. Smelters Trading Account, Profit and Loss Account, 1926-27, and Balance-sheet at 30th June, 1927, pages 33-34. Auditor-General. Appendix 1. REPORT BY MR. E. NOEL GOODE. Brisbane, 28th February, 1927. THE AUDITOR-GENERAL, BRISBANE. DEAR Sm,-With reference to the arrangements made by the Honourable the Premier with me to assist you, in my professional capacity as metallurgist, in your inquiries into charges made by the Leader of the Opposition against the Management of the Chillagoe State Smelters, I beg to submit the following report:- The main charge was that preference had been given to F. Reid who was the largest ore supplier to the Smelters. In addition to investigating the main charge of preference I also, in conjunction w'lmth you, examined other matters that you submitted to me for consideration. The following statement sets out the matters that were examined:- I. ORES PURCHAkSED. (a) Methods of receiving and recording. (b) Tariffs. (c) Penalties to ore sellers and payments under issued Tariffs. II. BoNUs PAYMENTS ON ISSTTED TARIFFS. III. SPECIAL TARIFF FOR PURCHASE OF MONTALBION SLAG. IV. PURCHASE OF TI-TREE FLUX ORE. V. BALTIC SYNDICATE ORE PURCHASE. VI. VALUATION OF ORE STOCKS, INTERMEDIATE METALLIFEROUS STOCKS, AND FLUX AND FUEL STOCKS. I. ORES PURCHASED. (a) METHOD OF RECEIVING AND RECORDING. The purchased ores are mainly delivered to the Smelters loose, in flat-bottomed Government Railway wagons; a proportion of the smaller parcels are bagged. The ore is weighed on the Government Railway weighbridge by a railway official in the presence of the official checkweigher of the State Smelters. The representative of the Queensland Prospectors and Ore Producers' Association also checks the weight of the ores belonging to the members of his association, and the seller of other ores also has the right to check the weighing of his own ores. The parcel of ore is then examined by the metallurgist who marks off a proportion to be taken. for sampling, and also notes it for allocation either for direct smelting or for treatment in the roasting plant. The recorded weight of the ore under purchase is then notified on a delivery slip to the head sampler, the chief assayer, and the metallurgical clerk. The ore is then unloaded at its destination of either bins, or possibly stock piles if ores are being accumulated, andt the sample proportion is placed i'the sample mill receiving bin.. The sample undergoes a method of breaking down in the sample mill, the final fine crushing and sampling down to the assay and check assay samples are done in the assay office. A seller may obtain a check sample for assay by his chosen outside assayer, and then cross results with the Smelters assay return, before the finalising of the ore purchase accounts. (b) TARIFFS. The matter of ore purchase by the State Smelters has been a complicated one on account of varying factors operating. The main factors considered by the management as influencing the framing of the several tariffs were :-(a) The grade of the ore supply, (b) the difficulty in obtaining and the necessity for tonnage supply, (c) metallurgical requirements for the furnace treatment. 14 The ore supply fields may be classified generally as low-grade, as both the Government mines at Mungana and Red Cap, and the tonnage supply field in the Irvinebank district are low-grade ore producers. The higher grade ore comes mainly from the Etheridge district. The average assay of all ores supplied for the twelve months, 1st July, 1925, to 30th June, 1926, was silver 8-25 oz., and lead 12-61 per cent. There were two direct ore purchase tariffs issued during the period 1st July, 1925, to 30th June, 1926, to cover all sellers of different classes of ore. A special tariff for purchase of lead slag flux, a special tariff for purchase of ferruginous ores or ironstone, and a special tariff for purchase of the high-grade lead ores from Lawn Hills were also issued during that period. The two direct ore purchase tariffs consisted of:- I. Ordinary (or standard) tariff for lead ores. II. Special tariff for the purchase of low-grade lead ores-known as the sixty-forty tariff. These two tariffs are those which have been especially referred to for criticism in relation to the alleged preference given to F. Reid. Copies of the tariffs are attached for reference to details. I. ORDINARY (OR STANDARD) TARIFF FOR LEAD ORES. This tariff was applicable to the high-grade classes of ore. As the lead and silver contents increased in value over a certain figure that was relative to the price of the metals, the tariff increased the return paid to the vendor, when, however, the ore was of the lesser value he was given the advantage of the sixty-forty tariff. Reference to the tariff will show the rate of metal payments and charges, &c., for treatment and realisation, some items of which have been referred to in the alleged preference to F. Reid. Metal Payments.-A percentage of ore purchase notes of the smaller suppliers, all of F. Reid's ore purchase notes, and those of suppliers of 200 tons or over were examined, and payments for metal contents were in accordance with the tariff. Charges, &c., for Treatment and Realisation.-All smelting, roasting, and penalty charges, also bonus payments were made in accordance with this tariff for the high-grade ores that were purchased under it. The penalty clause that noted "ores containing under 12 per cent. lead will be subject to a deduction of 5 units before payment is made " did not operate under this tariff except in the case of two small parcels of ore high in silver and low in lead that are subsequently referred to, as all ores of about the above quoted grade were purchased under the sixty-forty tariff. Only the two parcels of ore abovementioned were subjected to the 5 unit deduction. These were received from Riley and party in August, 1925. During September, 1925, Riley and party delivered 45.4589 tons of the same class of high silver low lead ores which, under the ordinary tariff, would have been subjected to the deduction of 5 units of lead, the same as on the August deliveries, but on representation to the management concerning the 5 unit lead deduction, they were allowed to supply a higher grade lead ore over the month of October, 1925, which raised the lead content above the 12 per cent., and they were paid on one ore purchase note for their two months' deliveries and did not suffer the deduction penalty. The deliveries of low-grade lead ores ip this September-Octolr purchase, and 18.6198 tons of the same class of ore in August deliveries, a total of 64.0787 tons was allowed by the management to be included in the average of ores delivered for payment under the tonnage bonus, which will be later referred to, and Riley and party benefited under the bonus to the extent of 2s. 6d. per ton for delivery of over 200 tons in the first half-yearly period of the financial year. 15 There were no preference payments to F. Reid as regards the penalty of 5 unit of lead deduction on the tariffs that operated during the period 1st July, 1925, to 30th June, 1926. The following table gives details of the purchase of Riley and party's ore in relation to the penalty 5 unit of lead deduction :- RILEY AND PARTY, IRVINEBANK. ASSAY. METAL CONTENTS. Date. Dry Tons. Silver. Lead. Silver. Lead. 14th September .. .. .. 14-4172 32.1 3.3 462-7921 :4757 18th September .. .. .. 21-3517 32*0 3.9 683-2544 -8327 23rd September .. .. .. 96900 30-6 4.2 296-5140 -4069 19th October .. .. .. 12-9873 43.7 28-7 567-5450 3-7273 23rd October .. .. .. 13-0935 43.9 31.5 574-8046 .4-1244 27th October .. .. .. 10-9023 41-4 32.0 451*3552 3-4887 29th October .. .. .. 11-2298 47.8 38.3 536-7844 4.3010 Totals .. . . . i 93-6718 38-14 18-53 3,573-0497 17-3567 The General Manager stated that it was generally understood that the 5 unit deduction would not operate unless there were continuous supplies of high silver low lead ores and that this penalty clause was reprinted in the later tariffs issued with the idea of inducing the delivery of higher grade lead ores, but that it should have been specifically eliminated from the sixty-forty tariff. II. SPECIAL TARIFF FOR THE PURCHASE OF Low-GRADE LEAD ORES, KNOWN AS THE SIXTY-FORTY TARIFF. The issued tariff is dated 24th July 1925. The foundationi basis of paying for 60 per cent. of the lead contents was first decided in a tariff dated 1st February, 1925, being a special tariff for the purchase of ferruginous lead ores. Actually the payment for 60 per cent. of the lead was also made the basis of payment for low-grade lead ores other than ferruginous lead ores, from 1st February, 1925, so that this sixty-forty tariff was operated throughout the period 1st July, 1925, to 30th June, 1926, though the issued tariff is dated 24th July, 1925. Reference to this tariff, and also to the ordinary tariff will show the combined details of each under which the complete purchase of the low-grade ore were to be made under the sixty-forty tariff. Payment, to Sellers.-Examilation of the whole of F. Reid's ore purchase notes, of all the ore, purchase notes of the larger sellers, and of test ore purchase notes of smaller sellers, discloses the fact that F. Reid was given a preference on all deliveries of his ores to the State Smelters from 1st January, to 30th June, 1926, by the non-deduction of the 1 oz. of silver as quoted for deduction in the payment clause for silver. These deliveries included 1,181 tons of ore that were purchased on the Irvinebank lines on 30th November, 1925, and which were paid for at average November prices. This transaction is irregular as regards the abovementioned deliveries as the November purchase had been completed, as shown by the fact that adjustment payments were made after deliveries of this ore in January and February to the average prices of metals for November, and also from the fact that ore purchased from Reid in December and delivered at the Smelters in that month was paid for under the sixty-forty tariff without the benefit of the non-deduction of the 1 oz. of silver. This pleference in not adhering to the penalty clause of the tariff relating to payment for silve conteits 'of 'res resulted in a monetary advantage to ore seller F. Reid of �438 7s. 7d. F. Reid's lead ore was bought under the sixty-forty tariff except a small parcel of silicious ore that was bought under a special tariff issued on 1st May, 1925. 16 A small parcel of lead metallics was also bought on a special quote. A statement of the summary of the silver transactions is appended :- ACCOUNT F. REID, LEAD ORES-ONE Oz. SILVER STATEMENT. Dry Tons. Average Assay Silver. Paid. Ozs. .. 367*2488 8.6 8.17 d- 8-0009 9"0 8-55 360.6990 8-38 7-961 . J 527.0441 11.55 10.973 258.1560 13.35 12-683 . . 440.4577 11.25 10.687 1,325.7877 10.2 9.69 Delivered. 1926. January February (Rei Austin) February March .. April .. May June .. Totals Gross Silver Silver Contents Contents. Paid for. Ozs. 3,160.9153 72.0090 3,021.8741 6,087.1775 3,446.9899 4,954.5470 13,517-0302 34,260.5430 Ozs. 3,002.8696 68-4086 2,870.7804 5,782.8187 3,274.6404 4,706-8196 12,841.1787 32,547.5160 Price. Total. s. d. � s. d. 2 6.8 2 81 2 8) 2 84 2 6.4 2 6-4 406 12 7 8 15 6 388 783 443 596 1,626 14 11 1 8 8 8 3 9 10 11 2 7-3 �4,253 8 0 Amount Paid 95 per cent. of Assay .. .. .. Deduction that should have been made under the Tariff- Average Silver Assay 5 per cent. Less 1 oz. 95 per cent. less 1 oz. Oz. .. .. .. 10.42 .. .. . ". 52 9.90 .. .. .. 100 .. .. .. 8.90 oz. at 2s. 7.3d. oz. -- �1-1605 ton. 3,287-3942 tons at �1-1605 per ton .. 3,815 0 5 Overpayment .. .. .. .. . .. .. �438 7 7 The General Manager stated that the 1 oz. preference to F. Reid was in the form of a bonus for supplying large parcels of ores which would decrease sampling and assaying costs. The following table shows the individual monthly tonnage deliveries and the number of parcels that were sample d :-- NUMBER OF PARCELS OF ORE PER MONTH FROM F. REID-IST JULY, 1925, To 30TH JUNE, 1926. Average Weight of Month. Total Tonnage. Number of Parcels. Parcels. Tons. 1925. July .. .. .. . . .. .. 95*6473 9 10-6274 August .. .. .. .. .. 83-5423 6 13-9237 September .. .. .. .. .. .. 237-0606 12 19-7550 October .. .. .. .. .. .. 287.3784 14 20-5270 November .. .. .. .. .. .. 340-8790 10 34-0879 December .. .. .. .. .. .. 83-4289 5 16-6859 1926. January .. .. .. .. .. .. 367-2488 10 36-7248 February .. .. .. .. .. .. 360-6990 15 24-0466 March .. .. .. .. .. .. 527-0441 30 17-5681 April .. .. .. .. .. 258-1560 20 12-9078 May .. .. .. .. .. .. 440.4577 29 15-1882 Juneo .. .. .. .. 1,326-7448 42 31-5891 Totals .. .. .. .. 4,408-2869 202 21-8232 Other suppliers delivered ore as detailed in the following table during the same period:- Number of Suppliers. Number of Parcels. 6 tons and under .. .. .. .. .. .. .. .. 54 63 6 tons to tonsons .. .. .. .. .. .. .. .. 40 79 20 tons to 50 tons .. .. .. .. .. .. .. .. 25 100 50 tons to 100 tons . .. ....... .. . .. 13 . 129 100 tons to 150 to o 10 tons .. .. .. .. .. .. .. .. 5 83 150 tons to 2tonsons .. .. .. .. .. .. .. .. 5 89 3,287-3942 1 10.42 9.9 S. .. . �4,253 8 0 I I - .I _ _ . . 17 The smaller sellers mostly sent in lots of about 6 tons. Some individuals parcels of other sellers were noted over 20 tons, 30 tons, and 40 tons, but they were few. F. Reid supplied larger average-sized parcels than other sellers, and the management claimed the right to give some allowance in departure from the issued tariff in consideration. (c) PENALTIES TO ORE SELLERS AND PAYMENTS UNDER ISSUED TARIFFS. The penalties for the sixty-forty tariff are noted to be "as set out in the ordinary tariff "--that is, the ordinary (or standard) tariff for lead ores. The ore purchase notes examined by me disclosed the fact that under the sixty-forty tariff no roasting charge was made for suppliers of mixed carbonate and sulphide ores, irrespective of whether the sulphur was over 4 pei cent. or not. The whole of F. Reid's assays were examined in the ore receipt book, and astay results were averaged. A similar examination was made of all other suppliers of mixed carbonate and sulphide ores. The following table shows the monthly deliveries of F. Reid and all others who supplied mixed carbonate and sulphide ores that were. purchased under the sixty-forty tariff, and who had the advantage of the elimination of the roasting charge. SUMMARY OF ORES DELIVERED BY F. REID-6040 TARIFF FROM IST JULY, 1925, To 30rTH JUNE, 1926. 60-40 Tariff. Tons. ASSAY._Silver. Lead. Sulphur. Silver. Lead. Sulphur. 1925. July .. .. . . August .. .. September .. .. October .. November .. .. December .. .. 1926. January .. .. February .. .. March . April .. . . May .. .. June .. .. Totals Other Purchases- July, 1925- Silicious Lead Ore February, 1926- Reid-Austin .. June, 1926- Metallic Lead .. Total Deliveries .. 95.6473 83.5423 237.0606 287.3784 340.8790 83.4289 367.2488 360.6990 527.0441 258.1560 440.4577 1,325.7877 7.303 11-2 5-84 6-52 9-92 7-01 8.6 8-438 11.55 13.35 11.25 10-2 17-5 11-9 16-5 15-3 9.5 10-9 9-2 17-1 14*0 12-3 12-9 11-9 7.3 2-4 5.3 8-4 10-6 12.3 11-8 19-4 14-5 8-3 2-3 4-6 Ozs. 698.5592 935.9558 1,383.7667 1,875.0522 3,382-5160 584.5838 3,160.9153 3,021.8741 6,087.1775 3,446.9899 4,954.5470 13,517.0302 Tons. 16.7935 9-9476 39.2547 43.9306 32.3005 9-1376 33.8828 61.7290 73.8282 31.7915 57-1315 158.3774 Tons. 7-2555 2-0048 12*.6087 24.1117 36.1493 10.2911 43-5643 70-2204 76.3529 21.4357 10.3390 62.1362 4,407-3298 9"8 12.9 8.5 43,048.9677 568-1050 376-4696 14-4292 6-4 566 .. 92.3468 .8080 8.0010 90 12.0 . . 72-0090 .9601 -9570 141-2 81-0 .. 135.1425 -7752 4,430.7170 9-78 12-88 8-5 43,348.4660 570.6483 376.4696 J. S. MCHARDIE-60-40 TARIFF PAYMENT. J. J. HANiARAN-60-40 TARIFF PAYMENT. ASSAY. Gold. Silver. Lead. Sulphur. Gold. Silver. Lead. Sulphur. 1926. Ozs. Ozs. Tons. Tons. May .. .. 8.5957 .4 2-6 8-2 4.8 3.91 22.3124 -7097 -4166 June ... .. 39.3248 .3 3.0 9.0 4.5 12-95 121.2788 3-5562 1.7659 Total Deliveries 47.9205 *35 3.0 8.9 4.5 16-86 143.5912 4-2659 2-1825 Tons. 18 JONES AND PARTY-60-40 TARIFF PAYMENT. ASSAY. Tons. Silver. Lead. Sulphur. Silver. Lead. Sulphur. 1926. Ozs. Tons. Tons. November .. . 58-0317 3-3 6-7 190-1696 3-8797 December .. .. 52-8328 14-5 16-9 18-7 768-8039 8-9471 9-9239 Total Deliveries .. 110-8645 8-6 11-6 8-9 958-9735 12-8268 9-9239 (One ore purchase note.) No penalty for sulphur was charged on any of the foregoing parcels. The results show that there was no preference to F. Reid over other suppliers of these mixed ores, but the failure to impose the tariff penalty in this respect caused a very considerable loss to the State Smelters and a proportionate gain to the suppliers concerned. The following table is a summary of deliveries of ores assaying 4 per cent. and over of sulphur for the year ended 30th June, 1926, and shows the monetary advantage to the suppliers mentioned arising from the non-operation of the roasting charge that was enforceable in the tariffs: PERIOD 1ST JULY, 1925, To 30TH JUNE, 1926. Total tons of ore on Seller. monthly average of Sulphur per cent. Roasting charge 15s. 4 per cent. and over of in ore. per ton. sulphur. � 8. d. F. Reid 3,883.3298 9.37 2,912 9 11 J. S. McHardie .. 109.2130 7.88 81 18 2 J. J. Hanrahan . .... 479205 4-55 35 18 10 Jones and Party .. . .. .. .. 528328 18-78 39 12 5 Totals .. .. .. . . 4,093-2961 . . �3,069 19 4 Reference has been made to other tariffs that were issued during the period Ist July, 1925, to 30th June, 1926. The tariff for purchase of high-grade lead ores from Lawn Hills was a reasonable one to induce and aid lead mining in the Croydon district. The tariff for purchase of ferruginous ores was a tariff purely for the purchase of ironstone flux. The special tariff for purchase of lead slag flux will be referred to later. II. BONUS PAYMENTS ON ISSUED TARIFFS. A system of bonus payments was introduced as from 1st July, 1925, and explained by the General Manager to be for the purpose of inducing larger suppliers of ore from individuals or parties of miners. These bonus rates are not recorded in any tariff, but the General Manager advised that all rates were notified to the Queensland Prospectors and Ore Producers' Association and other suppliers. The following are the details of the conditions governing the bonus payments:- (a) Originally the bonus was fixed to operate for the fiscal year to 30th June, 1926, at the rate of 5s. per ton of ore for deliveries of a total of 400 tons or over of a grade of at least 10 per cent. lead. (b) Later a variation was introduced to the extent of 2s. 6d. per ton for deliveries of 200 tons or over for the first six months of the year. 19 (c) From the 1st May, 1926, the bonus was proclaimed as follows for ores of the equivalent of at least 10 per cent. lead:- 2s. 6d. allowance for delivering 50 tons per week; 5s. allowance for delivering 100 tins per week; 7s. 6d. allowance for delivering 150 tons per week. Ore supplier F. Reid only participated in the 7s. 6d. bonus under this heading. The following table shows the tonnages of F. Reid's ore deliveries to the Smelters for the period 1st May, 1926, to 30th June, 1926, on which a bonus of 7s. 6d. per ton was paid:- 1926. To 7th May To 14th May To 21st May To 28th May *To 4th June To 11th June To 18th June To 25th June To 30th June Tons. 69.2990 8-4480 50.1387 211.3218 339.2075 - total for 28 days 420.7968 174.1414 202-1223 212-1822 417-7952 1,766-2454 * To complete the calendar month of May from 28th idem the 420-7988 tons shown for the weekly delivery to 4th June was allocated as follows :- 29th May, to 31st May inclusive .. 1st June to 4th June .. . . The calendar monthly totals are - May, 1926 .. .. .. June, 1926 .. .. .. Total Tons. .. .. .. 101.2502 .. .. .. 319.5466 420-7968 Tons." .. .. .. 440-4577 .. .. .. 1,325.7877 .. .. .. 1,766-2454 The bonus payment of �662 6s. 10d. to Reid for the months of May and June, 1926, did not comply with the conditions specified, as his deliveries for the first three weeks in May did not average 150 tons per week, the basis on which payments to him were made. The whole of the deliveries for May and June were paid for at the rate of 7s. 6d. per ton, thus involving an overpayment of approximately �33. The only participants in the tonnage bonus were F. Reid, Riley and party, and G. T. Cox, junior. The following table gives details of payments :- TOTAL BONUS PAYMENTS FOR TONNAGE OF ORE SUPPLIES-1ST JULY, 1925, TO 30TH JUNE, 1926. Name of Supplier. F. Reid, Chillagoe .. .. Total .. . . Messrs. Riley and Party, Irvinebank G. T. Cox, jnr., Mount Garnet Quantity Ore Delivered. 2,416-2076 2,806.8056 1,766.2454 238.1165 434.6406 Dates of Delivery. July to December, 1925 July, 1925, to 30th April, 1926 Deduct December Pay- ment 1st May to 30th June, 1926 1st July to 31st December, 1925 1st July, 1925, to 30th June, 1926 BonusRate per ton. 8. d. 2 6 5 0 7 6 2 6 5 0 Amount. � 8. d. 701 14 0 302 0 6 � s. d. 302 0 6 399 13 6 662 6 10 �1464 0 10 .. 29 15 3 S1i08' 13 2 I -- - 20 The Baltic Syndicate supplied over 400 tons of ore during the period 1st July, 1925, to 30th June, 1926, the quantity being 524 tons 1 cwt. 1 qr. 26 lb., but the average contents of the ore was 2-0 oz. silver and 8-2 per cent. lead, and they therefore did not receive the tonnage bonus as the quality of the ore, including all metal values, was not equivalent in value to 10 per cent. lead. An examination of the Baltic Syndicate's ore purchase.notes and assays showed that they were allowed subsequent time from first deliveries to try and average up the value of the ore, but they could not reach the 10 per cent. lead equivalent and were paid on the basis of the sixty-forty tariff. III. SPECIAL TARIFF FOR THE PURCHASE OF MONTALBION SLAG. The General Manager stated that originally the slag was bought to aid in the furnacing of a stock of low-grade refractory Lady Jane ore, and that it was especially desirable on account of its low zinc content and comparatively high lead content. A special tariff was issued based on metallurgical opinion as to its value. The original tariff was on the basis of purchase payment for 85 per cent. of the silver and 80 per cent. of the lead. The first deliveries were in August, 1925, and payments were made on this basis. The rate of payment for the September deliveries was on the basis of 80 per cent. of the silver and 80 per cent. of the lead. The October and November deliveries were paid for on the basis of 90 per cent. of the silver and 90 per cent. of the lead, and on 12th November, 1925, an adjustment involving a payment of �453 15s. 10d. was made for August and September deliveries, paying for the metal contents up to 90 per cent. 'of the silver and 90 per cent. of the lead. December, 1925, deliveries were paid for on the basis of full metal contents, and on 15th January, 1926, an adjustment giving full metal contents for all previous supplies was made, involving an additional payment of �882 10s. Id. The adjustments therefore involved additional payments amounting to �1,336 5s. 11d. From January to June, 1926, full metal contents were paid on all deliveries. The General Manager stated the tariffs of August, September, October, and November were not on a payable basis to the supplier, and that the supplies of purchased slag flux would have stopped if adjustments and amendments of the tariffs had not been made. The following details of purchased lead slag are submitted :- The assay of the purchased slag. Silver .. .. .. .. .. .. .. 6.73 oz. Lead . . .. .. .. .. .. .. 5-26 per cent. Silica .. .. .. .. .. .. .. 33.4 ,, Iron oxide .. .. . .. .. .. .. 32.8 ,, Lime .. .. .. .. .. .. .. 14-7 ,, Alumina .. .. .. .. .. .. .. 7-1 ,, Zinc oxide .. .. .. .. .. .. .. 3.1 ,, Sulphur .. .. .. .. .. .. .. 2.0 ,, The assay of the average smelter slag for the smelting period of the year 1st July, 1925, to 30th June, 1926. Silver .. .. .. .. .. .. .. .53 oz. Lead .. .. .. .. .. .. .. 123 per cent. Silica .. .. .. .. .. .. .. 29.8 ,, Iron oxide .. .. .. .. .. .. .. 33.3 ,, Lime .. .. .. .. .. .. .. 18-1 ,, A umina . . .. .. . .. .. 11.0 Zinc oxide .. .. . .. .. . .. 6.2 Sulphur .. .. . , . . .. .. Not determined 21 RECOVERY OF METAL VALUES F'ROM THE PURCHASED SLAG. Reference to the slag analysis shows that the purchased slag had 3-6 units of silica that required extraneous flux to run to the average composition of the smelter slag for the smelting period. It can be taken that the lower zinc and alumina contents would somewhat counter- balance this fluxing debit, but in any case the slag fall of the purchased s!ag would be increased by the ratio of the required fluxing, which would be equivalent to approximately 12 per cent. on the total slag content, less the lead extraction and the weight of sulphur eliminated, which would together total approximately 51 per cent., leaving a net increase in the weight of slag produced from the purchase slag of 61 per cent. The average assay of the slag produced at the smelter was silver 0-53 oz., lead 1-23 per cent., so that the actual dump losses from the purchased slag would be silver 0-56 oz. and lead 1-31 per cent., leaving recoverable from the purchased slag:- Silver .. .. .. .. .. .. .. 6-17 oz. Lead .. .. ...... .. .. 3-95 per cent. The average prices paid for metals in the purchased slag were:- Silver .. .. .. .. .. .. 2s. 8-1d. per oz. Lead, after realisation deduction of �8 .. .. �27 18s. Id. per ton. RECOVERABLE METAL VALUE PRICE OF PURCHASED SLAG. Shillings per ton. Silver, 6-17 oz., at 2s. 8-1d. per oz. . .. .. 16-50 Lead, 3-95 per cent., at �27 18s. Id. per ton .. .. 22-04 38-54 The 38-54s. represents the smelter recoverable values in the purchased slag as delivered to the junction weighbridge at Chillagoe. The slag had then to be weighed, sampled, and unloaded into the bins. Allowing 3s. per ton for this work, then the purchased slag in the bins would be worth in recoverable values 35-54s. on the metal prices for which it was bought. The purchase tariff was based on the necessity for a percentage of slag on the furnace charge, so a liberal tariff for treatment could be offered. The question then arises for consideration as to the 'value of this leady purchased slag and its benefits in composition as against the cost of delivery of a proportion of returned local furnace slag. This local return slag would cost approximately 6s. per ton in the smelter bins, and in the case of intermittent smelting, as has been carried on with stock pile storage methods of handling purchase deliveries, the cost of picking up from the stock piles, transport, and unloading to bins would be saved in proportion to the amount of stock material not accommodated in the bins at commencement of treatment. Allowing 6s. per ton for delivery of local slag to the bins and the furnacing cost of both classes of slag as equal, and without taking into consideration the proportion of material handled from the stock piles, then on a'metal recovery basis as against the cost of delivery of the local slag to the bins the purchased slag was worth 41-54s. The purchased slag was of some value in the furnace operations on account of its lead content helping to keep up the lead tenor of the furnace charge, but this factor value could be met or equalised by the return of a proportion of lead bullion for recharging with the local slag. Reference to the analyses shows the comparative zinc and alumina contents. The purchased slag would be advantageous to some extent on accdu; of the lower zinc and alumina, but there would be no deleterious effect from the zinc in the retreated local slag as it would be present practically as silicate. 22 The construction of a reasonable tariff for the purchase of materials desirable for the metallurgical practice is justified, and the comparative value of the different slags referred to is really a metallurgical opinion, but I do not consider that, additional to recoverable values plus a credit as for the delivery of local slags, a premium should have been paid up to the average price paid to F. Reid of 47s. 5d. per ton for the slag purchased. IV. PURCHASE OF TI-TREE FLUX ORE, SUPPLIER F. REID. The management stated that this material was purchased for use on the pallets of the Dwight-Lloyd sintering machines. A total of 1,058-3172 tons was purchased over the months November, 1923, to February, 1924. The following table shows details of deliveries, assays, and payments:- TI-TREE FLUX ORE. AVERAGE ASSAY. 0 Tonnage- Silver. Insol. Iron Lime. Amount Paid. Dry. ". Oxide. � 8. d. 8. d. 1923. November.. 411-7744 -40 -58 29*6 34-7 .. 168-14 2.40 121-96 142-89 .. 254 1 10 12 4 December .. 239-5891 -29 *93 36.0 297 .. 71*87 2.24 86-68 71-37 .. 163 10 7 13 8 1924. January .. 179-9927 -30 1-04 34-9 29-5 .. 5536 1-87 62-90 53-18 .. 126 13 3 14 1 February .. 62-9610 -54 1.2 37.2 313 .. 3456 -78 23-34 19-74 .. 47 4 5 15 0 Total .. 894-3172 .37 -82 33-0 33-1 24-9 329*93 7-29 294-88 287-18 222-68 �591 10 1 13 3 Delivered at 88-Mile Siding. 22 February 164-0000 . .. ..... .. j "6 " .. 114 16 0 14 0 Total .. 1,058-3172 . I .. .. . .. . . . . . �706 6 1 13 4 No gold was recorded as being present. This material is of no value as regards recoverable metals to cost of treatment and is of no furnace-fluxing value, as shown by its analysis as compared to the average analysis of the furnace slag. Treatment in the lead furnaces would cause a loss of lead in the lead copper matte proportionate to the copper present. V. BALTIC SYNDICATE ORE PURCHASE--"HANSARD" 28, PAGE 1579. RELATIVE TO PREFERENCE TO F. REID ON ACCOUNT OF LOW-GRADE ORES BEING PURCHASED FROM HIM AND REJECTED FROM OTHERS. This matter dealt with ores delivered by the Baltic Syndicate during the months of August and September, 1926. The specification of the sixty-forty tariff is that the ores must contain a minimum of 10 per cent. lead. The Baltic Syndicate was actually paid the sixty-forty tariff on a bulk parcel delivered over the months of April, May, and June, 1926, assaying silver 2.0 oz., lead 8-2 per gent., previously noted under " Bonus additional to the Tariffs." Actually this ore ,ogd h h eon. at out of the advantage of this tariff but allowance was made, and, as previously noted, time was allowed by the management for the Baltic Syndicate to try and average up values to attain the grade required for the tonnage bonus. 23 The Baltic Syndicate deliveries for July assayed silver 4-88 oz., lead 12-45 per cent., and this was paid for under the sixty-forty tariff. During the months of August and September, 1926, the following parcels were delivered : AssAY. Tons. Silver. Lead. Ozs. Per cent. 17-8601 . . . . . . . . . . . . . . . 1.8 11.2 5-2250 .. 3-3 8-8 8.1707 5-9 11-1 37-0378 .. .. .. .. .. .. .. .. 2.6 4-9 13-0095 .. .. . . . .. .. .. .. 3.9 8-5 25-3378 .. .. .. .. .. .. .. .. 4.2 6-8 106-6409 Average .. .. .. .. 336 751 This bulk parcel is certainly low-grade. The management previously tried to have the lead content or the combined lead and silver values raised in the April-May-June deliveries, as instanced in reference to the tonnage bonus, and on receipt of this subsequent low-grade parcel eliminated-namely, 37-0378 tons, assaying silver 2-6 oz., lead 4-9 per cent., and 25-3378 tons assaying silver 4-2 oz., lead 6-8 per cent., a total of 62-3756 tons, and paid the sixty-forty tariff for the remaining 44-2653 tons, assaying silver 3-53 oz., lead 10.1 per cent. Actually on assay values extended at the monthly metal prices, the gross content value of the April, May, June, 1926, deliveries were approximately 54s. per ton, and for the August-September deliveries the gross content value was approximately 56s., so the Baltic Syndicate would apparently look for a similar tariff which the management did not extend to them for the bulk parcel. Subsequently, on representation to the management by the Baltic Syndicate, an allowance of �1 per ton for the 62-3756 tons was made, which brought the payment for the bulk parcel of 106-6409 tons to approximately �5 of payment under the sixty-forty tariff. F. REID-ORE PURCHASE TRANSACTION FOR JULY, 1926-REFERRED TO ':HANSARD " 32, PAGE 1953. There were delivered at the State Smelters in July, 1926, 646 tons 7 cwt. 0 qrs. 20 lb. net weight, representing 617 tons 14 cwt. 0 qr. 11 lb. dry weight, being portion of a purchase made from F. Reid of ore on the lines on 30th June, 1926. The ore assayed silver 7-26 oz., lead 7-79 per cent., and was paid for under the sixty-forty tariff. The penalty clauses of the standard or ordinary tariff in conjunction with the sixty- forty tariff as regards the 5 unit deduction and roasting charges have been previously dealt with, showing that the 5 per cent. lead deduction was not included in the sixty-forty tariff and that roasting charges were not made to suppliers of mixed carbonates and sulphides. As regards the metal values, the 7-26 oz. of silver were, on the metal prices, equivalent to 3-03 units of lead, so that the total ore value was equivalent to over 10 per cent. of lead. In the case of the Baltic Syndicate's ores, the combined silver-lead values were not equivalent to 10 per cent. of lead, and could not absolutely claim the sixty-forty tariff. Referring again to the July deliveries of F. Reid, the total ore purchased on the lines on 30th June amounted to 1,610 tons. The ores were subject to prelhitiey ~iamplir: by the metallurgist of the State Smelters and gave a bulk assay return of silver 7.1 oz., lead 11.36 per cent. 24 This stock ore on the lines, of which the July deliveries were part, was credited with values under the sixty-forty tariff as a bulk purchase, so that, with correct sampling the whole purchase was due for the sixty-forty tariff even if some section of it was of a lower grade. F. Reid did not get preference in regard to these ore transactions. VI. VALUATION OF ORE STOCKS-INTERMEDIATE METAL STOCKS AND FLUX AND FUEL STOCKS. An estimate of flux and fuel stocks at the smelter as at 31st January, 1927, was made, also of the ores and intermediate metalliferous stocks. The tonnages estimated were agreed upon by Mr. Elford, metallurgist of the State Smelters, and the samples were submitted to the assay department. In fixing the value of ores and intermediate products for cupreous stocks, 90 per cent. of the copper and 90 per cent. of the silver were taken, and smelting, converting, and realisation charges were debited. The lead content of the matte was eliminated from valuation. For the lead ore stocks, for recovery values, a direct deduction loss of lead that would be in the produced lead-copper matte was made, and then 85 per cent. of the remaining lead and 90 per cent. of the silver were taken as the final recoveries. Smelting and realisation charges were also debited. In dealing with the flue dust the flues were opened up and examined under my personal supervision, and the lead content was taken at 80 per cent. recovery, the copper at 90 per cent., and the silver at 90 per cent. recoveries. Treatment and realisation charges were also made. In conclusion I desire to state that the books and accounts, relative to ore purchases, were well kept, and that every assistance was given by the General Manager and his staff to facilitate my investigations. Yours faithfully, E. NOEL GOODE, Metallurgist. ' Jt I 25 A I PA YM IENTS--- Ttri . . Appendix l-continued. CHILLAGOE STATE SMELTERS. TARIFF FOR LEAD ORES. (All previous Tariffs are Cancelled). Eighty-five per cent. (85 per cent.) of the Lead Contents (wet assay) of ores assaying minimum 12 per cent. lead will be paid for at the average price of the mean of Spot and Forward Lead as quoted in the "Sydney Morning Herald" for the week the ores are delivered at the Smelters, Chillagoe. (Week commencing and ending 8 a.m. Saturday). /Cr . .. .. Ninety-five per cent. (95 per cent.) of the Silver Contents less one ounce (1 oz.) will be paid for at the average price of Standard Silver, as quoted in the " Sydney Morning Herald " for the week the ores are delivered at the Smelters, Chillagoe. (Week commencing and ending 8 a.m. Saturday). .. .. Ninety-five per cent. (95 per cent.) of the Gold Contents less one penny- weight (1 dwt.) will be paid for at the rate of �4 per ounce. .. .. No payment or deductions will be made for Copper Contents in Lead Ores. SMELTING CHARGE- Carbonate Ores Sulphide Ores.. ROASTING CHARGE BoNus REALISATIO PENALTIES ZINC ARSENIC BISMUTH Thirty-five shillings (35s.) per ton net dry weight of ore. Thirty-five (35s.) per ton net dry weight of ore. A Roasting Charge of 15s. per ton net dry weight of ore for all Sulphide Ores. Ores assaying 4 per cent. and over for Sulphur or Arsenic will be classed as Sulphide Ore and subject to Roasting Charge. .. .. An allowance of is. per unit will be granted on Silver-Lead Ores for each unit above 35 per cent. Lead. N CHARGE .. Eight pounds (�8) per ton of Lead net contents. .. .. .. Ores containing under 12 per cent. Lead will be subject to a deduction of 5 units before any payment is made. ., .. .. Ten units of ZnO to be free. Any ZnO in excess of 10 units will be penalised at the rate of 6d. per unit or part thereof. .. .. .. Two units to be free. Any As in excess of two units will be penalised at the rate of 2s. 6d. per unit or part thereof. .. .. .. 003 units to be free. Any Bi in excess of 0.03 units will be penalised at the rate of is. for every 0.01 over 0.03. Ores assaying over 0*25 per cent. Bismuth will not be accepted. Chillagoe State Smelters, July, 1925. GRADE OF ORE PAYMENT- Lead Silver Gold . PENALTIES PAYMENT- Lead . Silver .. REALISATION CHILLAGOE STATE SMELTERS. Chillagoe, 24th July, 1925. SPECIAL TARIFF FOR THE PURCHASE OF LEAD ORES. (Known as the " 60-40 Tarif.") All Ore under this Tariff must contain a minimum of ten per cent. (10 per cent.) Lead and be delivered at the Smelters, Chillagoe, by the vendor. Sixty per cent. (60 per cent.) of the total Lead Contents determined by wet assay will be paid for less a Realisation Cost of eight pounds (�8) per ton of Lead net contents. Ninety-five per cent, (95 per cent.) less 1 oz. of full Silver Contents will be paid for at the average Standard price as under the Ordinary Lead Tariff. . . Ninety-five per cent. (95 per cent.) less 1 dwt. of full Gold Contents will be paid for at �4 per oz. . . As set out in the Ordinary Lead Tariff. CHILLAGOE STATE SMELTERS. Chillagoe, 1st December, 1925. TARIFF FOR PURCHASE OF LEAD SLAG FLUX. Slag Flux to be Delivered at Smelters by Vendor. . Full Lead Contents determined by wet assay will be paid for at the average price of the mean of Spot and Forward Lead for the month of delivery. . Full Silver Contents will be paid for at the average price of Standard Silver for the month of delivery. . Eight pounds (�8) per ton of Lead Contents. Gold Copper .. 26 Appendix 1-continued. CHILLAGOE STATE SMELTERS AND MINES. TARIFF FOR PURCHASE OF LEAD ORES-LAWN HILLS. (All Previous Tariff are Cancelled). I.TAL PAYMENTS- Lead . . .. .. Ninety per cent. of the Lead Contents (wet assay) of Ores assaying 10 per cent. minimum will be paid for at the average price of the mean of Spot and Forward Lead as quoted in the " Sydney Morning Herald," for the week the Ore is delivered at the Smelters, Chillagoe. (The week commencing and ending at 8 a.m. Saturday). Silver .. .. .. Ninety-five per cent. of the Silver Contents will be paid for at the average price of Standard Silver as quoted in the " Sydney Morning Herald " for the week the Ore is delivered at the Smelters, Chillagoe. Gold .. .. .. Ninety-five per cent. of the Gold Contents will be paid for at the rate of �4 per oz. Copper .. .. .. No payment or deduction will be made for Copper Contents in Lead Ores. SMELTING CHARGE BEONUS Thirty-five shillings per ton net dry weight of Ore. An allowance of Is. per unit will be made and deducted from the smelting charge for each unit of Lead over 35 per cent. REALISATION CHARGE .. Seven pounds ten shillings per ton of Lead net contents. All Ore to be delivered at the Smelters by the Vendors. Chillagoe, 1st December, 1925. Chillagoe, 15th January, 1926. TARIFF FOR PURCHASE OF FERRUGINOUS ORES. Under this Tariff fifteen shillings (15s.) per ton will be paid for Ores containing 76 per cent. FeO, with a bonus of 4d. per unit for each unit of FeO over 76 per cent., and a penalty of 4d. per unit for each unit of FeO under 76 per cent. PAYMENT FOR METAL VALUES- Gold .. ... .. Assay contents less 1 dwt. at the rate of �4 per oz. Silver .. .. . Assay contents less 1 oz. at the average standard price for the month of delivery. Lead .. .. .. .Assay cpntents less 2 per cent. at average price of Lead for the month of delivery less a realisation charge of eight pounds (�8) per ton net Lead Contents. All Ores to be delivered at the Smelters by the Vendors. COPY OF THE " FIFTY-FIFTY TARIFF." Supplementary Pariff for the Purchase of Lead Ores as from 1st October, 1926. GRADE OF ORE .. .. All Ores under this tariff must contain a minimum of ten per cent. (10 per cent.) Lead, to be delivered at the Smelters, Chillagoe, by the Vendor. METAL PAYMENTS- Lead .. .. .. Fifty per cent. (50 per cent.) of the total Lead Contents determined by wet assay will be paid for at the average price of the mean of Spot and Forward Lead as quoted in the " Sydney Morning Herald " for the week the Ores are delivered at the Smelters, Chillagoe, less a realisation cost of eight pounds (�8) per ton of Lead net contents. Silver .. .. .. Minimum two ounces (2 oz.). Fifty per cent. (50 per cent.) of the full Silver Contents will be paid for at the average price of Standard Silver for the week the Ores are delivered at the Smelters, Chillagoe. Gold .. .. .. Minimum two pennyweights (2 dwts.). Fifty per cent. (50 per cent.) of the full Gold Contents will be paid for at four pounds (�4) per ounce. PENALTIES .. .. .. Penalties for Zinc, Arsenic, Bismuth, and Sulphur as under the ordinary tariff. NOTE.-This tariff is subject to cancellation without notice. Ores assaying under ten per cent. (10 per cent.) Lead will not be purchased under this tariff. P. L. GODDARD, General Manager. Chillagoe, 1st October, 1926. 27 Appendix 2. NOTICE OF CANCELLATION OF THE SIXTY-FORTY TARIFF. NOTICE. We have to inform you that in accordance with the policy of the Government and their desire to reduce the expenditure of this Enterprise to a minimum, it has been found necessary to cancel the present 60 per cent. lead tariff under which we are at present purchasing ore. We therefore hereby give you three months' notice that we will cease to buy ore under that tariff as from 1st October, 1926, from which date same will be cancelled. We will, however, continue to purchase ore under the ordinary lead tariff (85 per cent. lead contents) at present in force. Chillagoe, July, 1926. 28 - VGo-- Qm00u0 L t di 4 O 0Q - P-+ 4CO 100. - 10 r-1 r-i eq t'M 1 t- to04 0ccOu0OF- "0 0* to-f - -> CO1-L~ 1- P-4O ~1 0 -IC- C,; 4 410 H CI a4)- co) EM00 l4 CIO 0 1 CO C CO CO C C M10' .00 COq 101 w w w ~4 CS0 44 O O p 0 1 0a -4 O O . . .. 0 .. . .... p0 cq m C4 ' C O0ECC OC 7 i COC - 00t-0 O00a -a> r+. . C *CO1d OC 0 -4 . 44 00 40cc "1-001" CCC, cV - - -O- __41 41j t- 0cI-+t- O mCO CO + C000 w Mw w O C -id CO O "100 t 1-0 V 0 0 CO(Mm -0 t EL COE. -- CO -0 10 CO t410- 10ca -0CO 0 CI CO N NC 10a 4 04 0 CO CI COCO' CI 00 O01uJ00Cr- 000 CI d. 4 C CO CO t dlt. I d4 000 E.CI- d4 00 CO N 010 +4 0CO C O0C 000 010000 - -- C+O CI C 0 C - MccO CI 0 r", I I 10 COJ 10 to CO 0C1O a 000C OV C~!0OCOCOCOIC10O 100t .L N O ao-- - - - - -- - M0(CO 11 0 010O0e4- - 0 c4C NN 0 0 4)4Z 0 0 000 0 42 000000 OO 10 CO010 eNM 4 1c1 04Ct cI 0V m0 00000000-OoC 00000-+Or-c00+-O 000000~4 CO 1000- 0000001 - GC-i10 GlC 0 41-- N0c0 COJ -. G-Ci G7r- - wX-CO0ZA o00 000 CO01 di 1 to00 41; c1-t~ E- z O CO 0 444 06 0 06; H~ wi 14 v4 b1 b4 C) 4 4tlJ4 29 Appendix 4. CENTRES FROM WHICH MR. F. REID'S ORES WERE PURCHASED. Irvinebank Line. Herberton. Almaden. Petford. Purchased on Line- 30th June, 1926 30th September, 1926 Total .. . . Delivered- 1926. July .. .. .. August .. .. September .. October .. .. November .. December Totals .. .. 1927. January .. .. February March April June Totals .. .. Purchased on Line- 30th June, 1926 30th September, 1926 Totals Delivered- 1926. July .. . August .. .. September .. .. October .. .. November .. .. December .. .. 1927. January .. .. February .. .. March . . Totals Tons. 660 745 LEAD ORES. Tons. 300 271 Tons. 650 400 Tons. 120 Tons. 1,610 1,536 1,405 571 1,050 120 3,146 226-7125 5-1430 385-8494 .. 617.7049 45-4874 64-6499 275-7137 .. 385-8510 90-3222 62-9128 246*3575 .. 399-5925 217-9646 91-9484 189-4016 .. 499-3146 193.1981 97-1927 62.2706 . 352-6614 36.6917 17-0774 30-2073 115-9165 199-8929 810-3765 338-9242 1,189.8001 115-9165 2,455*0173 263-2188 5-4150 .. 18-3522 286-9860 S9-6272 12-7135 .. 22*3407 . 36"7466 .. .. 36-7466 21'6820 .. .. 216820 1,073.5953 412-3950 1,202.5136 134.2687 2,822"7726 LEAD SLAG FLUX. 950 . 902 .. 1,852 1,050 ...... 1,050 2,000 . 902 .. 2,902 288.0280 .. 31-4200 .. 319-4480 295.9480 .. 144*8369 .. 440-7849 162-6817 .. 136-9788 .. 299-6605 236-7583 .. 11-0385 . . 247-7968 396-1607 .. .. .. 396.1607 37.8056 .. .. .. 37.8056 125*2474 .. .. .. 125 2474 407-3049 .. .. .. 407*3049 1,949.9346 324.2742 2,274.2088 STATEMENT SHOWING MONTHLY DELIVERIES AGAINST AMOUNTS PURCHASED ON RAILWAY LINES. AVERAGE ASSAY. GROSS METAL CONTENTS. ---Dry Tons. Silver. Lead. Silver. Lead. Purchased on Line- Lead Ores. Ozs. Tons. 30th June, 1926 .. .. 1,610 7.1 11.3 11,500 182.9000 30th September, 1926 .. 1,536 10.3 9.6 15,899.4 147.4030 Totals .. .. 3,146 8*7 10.5 27,399.4 330*3030 Deliveries- 1926. July .. .. .. .. 617.7049 7.26 . 7.79 4,486-3403 48.1134 August .. .. .. 385.8510 8-98 9.93 3,466.0565 38.3243 September .. .. .. 399.5925 7.93 8.97 -3,171*3535 35-8250 October .. .. .. 499.3146 9-06 8.19 4,525.8481 40.9060 November .. .. .. 352.6614 9.47 11.34 3,338.7434 40.0072 December .. .. .. 199-8929 11.8 10.7 2,359.0894 21.4754 1927. January .. .. .. 286.9860 11.94 12.2 3,427.9642 35.0322 February .. .. .. .. .. .. .. .. March .. .. .. 22.3407 4.82 15.72 107!8157 3-5127 April .. .. .. 36.7466 3.7 26.03 137�1649 9.5684 May .. .. .. .. .. ... June .. .. .. .. 21.6820 3.2 26.5 69.3824 5.7457 Totals .. . 2,822.7726 8.9 9.86 25,089.7584 278*5103 1926. Total. I I I -- 30 0 Q10 el N O eq t 00Or-N 10. 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M C - ~ 1000 1[J0 NC C e}4 0C 0 Ir400 00 00000 t CI 000r1 0.r- . -COClC a M m IC - e4 E- 100 00 t"00 000D 00000000000 00 r- - - r- ".00 Gil0 "*0 r. " 000010 '"100M000 1 4 -4r- r1 00 00 " r- - .-- -"Po.-- ". r-- - - -- 4 0 Q000cG ~i10 00000 IGVVGqC 0000 "*00 00(M 00 tm-" * t Co00 "*00 G CDC DCCC { eNd 0M010 00 1000r-4 00 diCJ m0 m000000 10q G0O I - 0010 M O al AM did= 1 0cq 0Qo10 'i w r-+ cbca ;ca CO ~ -16 0CO 00 00d 4 66 c0000*00 *0flt O.~$ as l010 0 . eq+ P *" c0 P. 0 0 ca 010 P. 4-4 -10 od{O c0010 P i O eq00 4Cq 0100 ot-. f~t-14 -e40 0M 00 t. e 10 C1P- t I i1 r-4 o0 r"1 d{ 104 0M "d4 qe01 C r~w 00 r" -- r- - I 00O O -r- b w 32 Appendix 6. MONTHLY AVERAGE METAL PRICES, 1ST JULY, 1926, TO 30TH JUNE, 1927. Copper. Lead. Silver. � 8. d. � 8. d. 8. d. 1926. July .. .. .. .. .. .. .. 66 1 41 31 12 7T 2 5.9 August .. .. .. .. .. .. .. 67 6 8 32 11 0 2 4.8 September .. .. .. .. .. .. .. 66 18 611 31 18 9 2 4 October .. .. .. .. .. .. .. 66 15 81 30 15 21 2 1.3 November .. .. .. .. .. .. .. 66 1 0- 29 8 34( 2 1.2 December .. .. .. .. .. .. .. 64 12 3iT 29 1 114 2 0.7 1927. January .. .. .. .. .. .. .. 62 16 21 27 12 81 2 1.8 February .. .. .. .. .. .. .. 61 10 7j 27 11 3 2 2.8 March .. .. .. .. .. .. .. 63 0 13 28 1 52 2 1.6 April .. .. .. .... .. .. 62 1 Oti 26 15 11 i 2 2.1 May .. .. .. .. .. .. .. 61 3 411 25 5 91T 2 2 June .. .. .. .. .. .. .. 60 4 7 24 11 10 2 2.2 Average for Twelve Months .. .. .. 64 0 11 28 15 7 2 2.5 33 Appendix 7. TRADING ACCOUNT, YEAR ENDED 30TH JUNE,.1927. 1927- 30th June- To Metals, Crude Ores, &c., on Hand and in Transit 1st July, 1926-- � s.d. � s. d. Lead Bullion on Hand 7,043 18 0 Lead Bullion in Transit 97,447 10 9 Blister Copper in Transit 12,776 16 1 117,268 4 10 Ores in Stock, Lead .. 18,627 0 0 Ores in Stock, Copper 5,454 0 0 Products and By-products 42,174 0 0 Stocks on Line at Various Stations .. .. 6,787 15 7 ,, Purchased Ores and Mining- Local Purchases .. 30,483 0 0 Cloncurry Purchases ... 3,666 0 10 Lady Jane Mine Mining 1,019 18 8 Girofla Mine Mining .. 1,183 17 10 Redcap Mine Mining .. 1,345 13 6 ,, Freight on Ores- Cloncurry .. .. 560 17 8 Lady Jane .. .. 33 5 1 Girofla .. .. .. 68 14 7 Redcap .. .. .. 1,507 18 8 ,, Smelting, Roasting, Con; verting, Assaying, &c.- Lead Smelting .. .. 39,901 3 4 Copper Smelting .. 7,427 1 4 Roasting .. .. 10,086 11 5 Copper Converting .. 2,250 8 10 Assaying and Sampling 2,709 12 5 ,, Traction Engines Working ,, Insurances- Workers' Compensation Unemployment Insurance ,, Ore Handling since Closure of Smelters .. . . ,, Adjustment of Stocks . 190,311 0 5 37,698 10 10 2,170 16 0 62,374 17 4 278 12 9 806 3 9 77 3 10 883':7 7 .. 6 11 0 13,251 10 11 �306,975 6 10 PROFIT AND LOSS ACCOUNT, 1927 30th June- By Sales- Lead Bullion Blister Copper .. � . d. � s. d. 106,254 5 1 39,832 7 10 ,, Metals on Hand and in Transit- Lead Bullion (Part on Hand, Cairns, and Part in Transit) .. 41,266 17 4 Blister Copper .. .. 7 5 6 ,, Ores and By-products in Stock- Silver-Lead Ores and In- mediate Products .. 2,762 16 5 Copper Ores and Inter- mediate Products .. 2,554 5 9 Flue Dust .. .. 1,399 10 4 146,086 12 11 41,274 2 10 6,716 12 6 ,, Gross Amount to Profit and Loss Account .. . 112,897 18 7 �306,975 6 10 YEAR ENDED 30TH JUNE, 1927. 1927- 30th June- To Balance from Trading Account .. . . ,, Realisation Lead Bullion .. .. . . ,, Realisation Blister Copper ,, Maintenance, Buildings, and Machinery, Chillagoe .. .. . .. ,, Electric Lighting .. .. .. ,, Water Supply .. ,, Insurance, Buildings and Machinery ,, Management and Office .. .. . . ,, Stationery .. .. . . . ,, Postages and Telegrams .. ,, Subscriptions and Advertisements ,, General Expenses .. .. .. . . ,, Legal Expenses . . . . ,, Travelling Expenses . . . . ,, Stable Maintenance .. . . ,, Sanitary .. . .. .. . . ,, Q.P. and O.P. Association .. .. . ,, Grants and Donations .. . . ,, Motors and Rail Car Running .. . . ,, Water Supply, Mungana.. .. . ,, Bad Debts .. .. .. .. . ,, Machinery Dismantling .. . . ,, Wages- Caretakers, Chillagoe .. �173 5 4 Caretaker, Mungana .. 90 1 8 Caretaker, Croydon .. 40 0 0 Apprentices Wages since Closure of Smelters .. 141 7 2 � s. d. 112,897 18 16,693 1 6,957 2 8,005 17 2,241 16 1,282 6 436 0 5,359 14 53 8 145 9 45 14 232 7 78 0 435 3 562 19 192 4 157 15 286 10 81 9 55 19 215 16 84 17 7 2 7 7 8 2 11 10 4 1 9 0 0 8 3 9 2 3 9 8 9 7 444 14 2 �156,946 8 8 1927- 30th June- By Ice Working .. .. . . . ,, Royalties .. .. .. .. . . ,, Rents, Mungana .. .. .. . . ,, Rents, Chillagoe .. .. .. . . ,, Discount and Exchange' .. ,, Loss Carried to Accumulated "Profit and Loss Account {. . .. .. . 107 44 124 526 18 156,126 �156,946 8 8 ACCUMULATED PROFIT AND LOSS ACCOUNT, 30TH JUNE, 1927. To Balance, 1st July, 1926 ,, Loss for Year ended 30th June, 1927 � s. d. 1927- 30th June- 185,822 5 1 By Balance Carried Down . 156,126 2 11 �341,948 8 0 � s. d. 341,948 8 0 �34Q948. 8 0 � . d. 1 0 0 5 4 7 II I 7 10 2 11 '---~cl---~cll-----~' t F I SltE LIBRARY T S,1 f, i : i .7 34 Appendix 7--continued. BALANCE-SHEET AS AT 30TH JUNE, 1927. Treasury, Brisbane-- Purchase Account Loan Account' Trust Account Sundry Creditors Unclaimed Wages--- Chillagoe Mungana LIABIITIES. � s. d. � s. d. 42,265 0 0 253,812 4 6 664,333 9 2 960,410 13 8 .. .. 72 19 1 127 13 11 5417 6 182 11 5 �960,666 4 2 ASSETS. Smelting Works and Plant- � Smelting Works .. 42,899 Boilers and Power House 27,112 New Generator .. 7,942 Roasting Works .. 22,001 Roasting Storage Bins 1,569 Sidings and Ore Bins .. 21,672 Convertors, Copper Dress- ings, and Sample Plant 9,955 Water Softening and Reticulation Service 6,051 Dwight-Lloyd Plant No. 2 17,026' Automatic Chain Grate Stokers .. .. 12,545 Sundry Plant Account 1,541 Traction and Transport Plant .. .. .. 16,789 Live Stock, Vehicles, and Harness .. .. 7,667 Rolling-stock .. ' .. 8,399 S. 17 16 1 7 5 9 1 � s. d. d. 0 2 2 4 8 5 7 7 8 14 6 11 5 13 7 4 3 17 7 19 11 Buildings and Offices-- Offices and Other Buildings .. .. 17,816 7 3 Workers' Dwellings, Chillagoe . . 4,517 6 1 Workers' Dwellings, Mungana .. .. 5,540 4 2 Outside Buildings and Properties .. .. 2,947 3 4 Assay Office .. .. 1,256 0 2 Staff Cottages(New) .. 712 16 8 School of Arts, Mungana 543 17 10 Mines and Plant- Mungana Mines (Purchase Account) .. .. 40,000 0 0 Girofla Mine . . . . 96,515 4 11 Lady Jane Mine 86,131 11 4 Lady Jane Mine Engine ex Cardross .. .. 1,054 16 7 King Vol Mine .. 2,396 17 9 Wilson Leases .. . 5,527 11 2 Consols Mine .. .. 33,893 9 11 Einasleigh Mine . 25,512 15 6 Muldiva Mine .. . 5,354 1 11 Nightflower Leases .. 732 18 4 Redcap Mine . . . 4,548 2 1 Diamond Drill- Plant . . .. .. 1,359 18 0 Dwellings .. .. 427 16 3 Railway Footbridge .. Mungana Town Water Service Land, Double Island Metals, Ores, and By-products Stores-- Chillagoe .. .. Mungana .. .. Assaying Fluxes- Limestone .. .. Ironstone Fluorspar Silica .. .. Coke .. .. .. Timber-- Timber Yard Stocks .. Firewood, Chillagoe .. Sundry Debtors- Sundry Debtors, General Sundry Debtors, Ore Sellers .. Rents, Chillagoe Rents, Mungana Water Rates, Mungana Ice Sales .. . . Realisation Costs in Advance- Lead Bullion .. . . Cash on Hand.. . . . Profit and Loss Account-- Profit andLoss Accumu- lated to 30th June, 1926 . .. Loss from 1st July, 1926, to 30th June, 1927 .. 203,175 7 3 33,333 15 6 301,667 9 6 193 968 181 . . 47,990 14 2 16: 16 15 6,873 3 8 1,502 17 10 331 14 7 8,707 16 1 98 15 9 72 0 0 133 11 0 5 0 0 5,899 11 1 6,208 17 10 531 9 1 41 16 3 - 573 5 4 7,830 11 0 3,950 17 3 9 15. 0 32 6 8 15 4 9 57 5 0 11,895 19 8 2,003 1 3 30 0 0 185,822 5 1 156,126 2 11 - 341,948 8 0 �960,666 4 2 Prce I..B A h t AJ U I G em rnr e - . ----- 1 Q'n Price, I s. By -Autho~-rity ;: A. J. CUniMTNG , Government Printer, Brisbane. 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