1870, a very good year for gold mining in South Australian


a good year for gold mining


Mining, being in the news most of the time, created more than the usual confidence and interest. Newspapers and people in general started to ‘talk up’ the virtues of South Australia and its mineral potential. In July 1869, the Northern Argus had stated that South Australia had gained a reputation as a copper producing country ‘well known all over the civilised portion of the Universe. But who could ever have imagined that goldfields and silver mines existed in this colony’.

A few years previously, the same paper had stated that ‘the mere suggestion of the probability of such a thing was sufficient to draw forth a large amount of merriment and ridicule’. But now the existence of a payable and permanent goldfield was substantiated. A little later it published another article and pointed out that gold existed in many places where it was formerly thought nothing of the kind was likely to be found. Every day, it said, ‘large numbers of men are finding remunerative employment in these localities. Any person who would previously have said that gold existed in the Onkaparinga was sneered at and considered little better than an idiot’.

In January 1870, when Jupiter Creek had been reported ‘as dull as dull can be’, the Onkaparinga River near the Wheatsheaf Inn was rushed by more than 200 men and eventually yielded about 800 ounces of gold. A smart reporter from the Jupiter Creek field had worked out that during the first week, when a total of 32 ounces had been washed, it amounted to earnings of about five shillings per man per day on average. Therefore any man leaving his job for this field would simply be a fool.

It makes one wonder why so many men time and again tried their luck on the different fields. They just kept on hoping that the next hole would provide that long awaited pot of gold and economic independence. No doubt prospecting and mining had become a way of life for many, regardless of the amount, if any, that was found. Of course, the reporter continued, ‘if one has nothing to do he may as well starve here as in town or anywhere else’ and he did not think they would find work in the country as readily as some of the politicians said it would be, unless they were willing to do some dry-stone walling at Strathalbyn at eleven shillings per chain.

Later, when much better results were obtained, the area became known as the Stirling Reef. According to the Register, South Australians could not complain about the number of goldfields, whatever may have been said of their richness. No sooner, it said, has one failed, or become pretty well worked out, than another takes it place.

For years Echunga had supplied a precarious livelihood to three or four score of men, but eventually it became eclipsed by the superior attractions of Jupiter Creek. The waning fortunes of this one encouraged the search for fresh deposits and the discovery known as the Onkaparinga River rush. As if to prove the correctness of all these statements and prophecies, two young men found three ounces of gold on Sixth Creek near Montacute a few weeks later.

In May 1870 ten Adelaide gentlemen, including four politicians, the Hon. Sir John Morphett, Hon. T. English, W. Johnston and W. Townsend, together with J.B. Neales, decided to form the Stirling Reef Quartz Mining Company. They were looking for £6,000 by selling £2 shares. The property consisted of four reef claims on Stirling Hill, above the Onkaparinga River about half a mile from Warland’s.

It had been inspected by John S. Westcott and declared an excellent prospect. In November a slightly second hand engine and stamps was bought from the Potosi Silver Mining Company and a few months later William B. Neales, licensed surveyor and mine inspector, worked their mine on tribute and made ten ounces from crushing 150 tons of quartz. It was hoped that the next crushing would be even better.

In June 1870 Victorians James W. Wood, a mining agent, and Alfred J. Kightly, had a look at the Barossa, Echunga and Murray Flats goldfields and wrote a lengthy report about them. Their conclusion was that all of them, and many other areas, definitely would, with the combination of capital, labour, efficient appliances and experienced management, place South Australia in the ranks of gold producing countries.

Barely six weeks later, the Chronicle followed this up with an even longer article glorifying the whole of South Australia as to its gold producing potential. Although it did admit that there had been many frustrations, they had all been before the opening up of the Jupiter Creek goldfield. Now, it said, we have abundant cause to expect still better results, if the work of gold searching and digging is carried on with intelligence and perseverance.

More discoveries were made in 1870 at Inglewood, where the Inglewood Gold Mining Company had driven a shaft into a hill and extracted seven ounces of gold. It proved a costly affair when very little additional gold was found. By the end of 1871 the company’s secretary, James Simpson Scott, gave notice that the company would be wound up. Further to the east, several parties were at work sluicing in the bed of the Torrens close to the Gumeracha Bridge. Other evidence and deposits of gold were found at Lobethal, Ulooloo, north of Burra and the Neales River in the far north.

The German Reef also created great excitement as it was the first time in South Australia that good substantial nuggets were found near the surface. Arthur Boyle, with the assistance of a few leading businessmen, developed the property and formed the German Reef Quartz Mining Company in 1870, with the Hon. William Morgan and W.G. Luxmoore as directors while Boyle became its secretary. Two weeks after its formation a general meeting was held to discuss the development of the mine.

To make it possible for ladies to inspect some of the rich specimens, J.A. Northmore displayed a number of them at his establishment in King William Street. So far everything was going well and the directors recommended the installation of suitable machinery to test the quartz. They also congratulated the shareholders on having such a valuable property and judging from the present appearances they were of the opinion that there were sufficient funds for further development. Gold had been found wherever they had tried.

During the meeting, W. Morgan, W. Townsend, J. Lindsay and D. Murray were appointed directors for the coming year. A vote of thanks was also recorded for Boyle for the manner in which he had performed the duties of secretary and for the time and trouble he had bestowed on the mine. Soon Matthew Barker installed crushers on site under supervision of Alfred Kightly, and in September 62 tons crushed gave 117 ounces while expenses of the mine were only about £50 per week. This, it was said, proved beyond doubt that ‘we have the precious metal in quantity’.

In October it was reported that ‘crushing operations are constantly going on, but with what results is unknown, as the directors decline to give any information on the subject’. However the English Scottish and Australian Chartered Bank had bought 395 ounces of gold from the company, which also paid two dividends of £2 and £2.10 per share respectively. On 14 October, secretary H. Turner informed shareholders that the five head stamper battery would be increased to 20.

This would enable the company to crush as much as 250 tons a week. Most importantly the success of the company had given a renewed impulse to reefing. At its second half yearly meeting it was proposed that the company should amalgamate with the Union Jack Quartz Mining Company as both properties were almost identical and could be worked far more economically and effectively as one concern.

Shareholders were also told that £150 had been expended on a manager’s house thereby increasing the value of the freehold property. Both W. Morgan and A. Boyle were re-elected as directors. In March 1871, when the crushers at the German Reef had been working day and night, both companies were wound up to make it possible for them to amalgamate and form a new company.

The new company became known as the United German Reef Mining Company with W. Morgan, D. Murray, J. Lindsay, W. Kay and A. Boyle, who was also secretary of the Lady Edith Gold Mining Company, as its first directors. Although it had now a new name, it had no new discoveries to boost. To develop the mines, a large amount of capital would be needed but few shareholders were willing to invest additional money. Without extra money it was just impossible to carry on and within a few months the new company was planning to wind up.

Frederick Hannaford had also staked out several promising claims near Blumberg, (today’s Birdwood) named by Johann Gottlob after his small village in Prussia. To develop these claims Hannaford needed money and sold his interest to the Melbourne and Adelaide United Quartz Mining Company for £500 cash and 2,000 fully paid up shares of £2 each. The remaining 4,000 shares were to be sold to the general public.

In April 1870 a telegram from Melbourne reached Alfred Kightly that the transaction had been successful and ‘all shares had been allotted’. Apart from his mining interests Frederick was a pioneer member of the Board of Directors of the Lobethal Tweed Factory, a JP, land agent, with offices in Adelaide and Gumeracha, Member of Parliament and Councillor of the Talunga District, including eight years as Chairman He died in 1898, aged 68.

JB Neales 1846 (SLSA)

The South Australian promoters of the company were, apart from Hannaford, Sir John Morphett, J.B. Neales, J.R. Randell and S. Randell. The Victorians among the promoters were all Members of Parliament. The prospectus naturally included the recommendation of Alfred J. Kightly, who with 15 years experience in quartz mining and crushing, had been asked by the Victorians to look for suitable properties in South Australia for their investment.

Great was the excitement and boundless the confidence when the riches of the Blumberg reefs became known. There was no doubt that they would prove to equal if not surpass those of Ballarat. To show the value set on them men were employed day and night to prevent the removal of any stones from the ground. To put the icing on the cake the government had placed £500 on the supplementary estimates for the encouragement and assisting of prospecting on the diggings. Although small, it could do some good if it were applied properly.

Another company formed in 1870 to mine some of the riches of the Blumberg area was the Blumberg Gold Mining Company. However there was a good deal of scepticism about the extent of its discovery. Many people believed that this was done to depreciate the property, which arose ‘from the perverse determination of many colonists to believe that nothing good can come out of South Australia’.

Because of this, others said, ‘our discoveries languish through this apathy’. Soon this apathy was changed for real excitement, as ‘every third person had gold on the brain’. By February ten shares in the company were sold for £1,000 and Cobb & Co ran a special coach to the reef. By September 1870, after the find of a number of very substantial nuggets, share prices reached a high of £200 each.

The company paid a total of £600 in dividends by the end of the year. For the next two years the company struggled to keep the mine going but no additional great pockets of gold were located. At the start of 1874, W.L. Ware, secretary of the Blumberg Gold Mining Company had to call in one shilling per share, to be paid on or before 3 February. Very little gold was recovered during that year and by September it was decided that the company should be wound up voluntarily.

Other companies and miners had more luck. During the first half of 1870 the English Scottish and Australian Chartered Bank had bought 5,252 ounces of gold worth £20,221. During the second half of 1870 it had bought more than 3,000 ounces, including 300 from the German Reef. Needless to say that other banks were also active on the fields.

In an effort to cash in on the golden treasures and opportunities found in the neighbourhood, Samuel Randell had built a small battery at Blumberg for crushing ore samples from the diggers in that district. One of his first customers was J. Conlin who was digging away at a gold deposit on section 6608 near Blumberg.

While the news about gold was encouraging, the owners of ‘Gold’ section 63 near Blumberg advertised that they were willing to dispose of this 90 acre section by tender. At Meadows Flat 23 ounces of gold had been dug up in one week and W.S. Whitington had formed an ‘influential private company for working the discovery’. P. Hynes was also on gold and had several puddlers operated successfully by seven men along the Torrens River.

With all these claims and mines producing substantial amounts of gold and numerous leases being taken out, Alfred Kightly, advertised his services in the local paper as ‘Mining and Commission Agent at 62 King William Street Adelaide with a Branch Office at Blumberg. He would buy or sell on commission any kind of crushing and mining machinery.

Business was also looking good for Rudolph Wilkie of the Bismarck Hotel and G.A. Schultze of the Napoleon Bonaparte Hotel. Oliver Philp of the Morning Star Hotel at Chain of Ponds was even happier as he was also the owner of the Poverty Reef Gold Mining Company where Captain J.W. King looked after his interests.

At about the same time the Echunga and Meadows Gold Mining Company was formed with Morphett, Dalwood and Conner as directors. J.B. Neales this time declined taking an active part in its management in consequence of ill health. All this activity and encouraging gold yields acted very much as a stimulant to find more and even better deposits, as up to this time, according to Warden Peterswald, goldfields had been ‘merely outlets for unemployed labourers, where the workingman, when out of work, can by perseverance make pretty sure of a livelihood’.

He went on to say that ‘There is no doubt that we have rich deposits as yet undiscovered. The quantity of gold already obtained, found as it has been in patches, must have been fed from some source. I confidently anticipate that a system of deep sinking will lead to the most valuable results, and open up an entirely new era in the history of South Australian mining enterprise’.

Peterswald knew what he was talking about. Although most gold discoveries came from alluvial deposits, the vast majority of large gold deposits in South Australia have come from deposits well below the surface. Today almost all gold produced in South Australia comes from hundreds of metres below the surface. Alluvial gold often only acted as an indicator. In many cases the reef where it originally had come from would be a fair distance away. On the other hand, the mere possession of a quartz reef was no sure sign that a payable gold mine or goldfield would be found in that locality.

Although few real large gold deposits had been found at Jupiter Creek or elsewhere so far, it did not stop a large number of people hoping and thinking that gold did exist everywhere in South Australia, even if it were in small quantities. Once again it was explained that although opinions had long been held that there was little prospect of discovering rich surface diggings, there was an abundance of gold to be found in payable quantities if ‘the aids of capital, machinery and practical experience were unitedly brought to bear in developing our goldfields’.

At the same time the Observer said that ‘South Australia was proverbially slow in pushing forward into new enterprises. No doubt caution was preferable to feverish excitement, but while uncontrolled speculation was always injurious to a community, caution itself could be almost as mischievous. Too much caution often led to the disregard of reasonable projects or the establishment of new industries upon a legitimate basis’.

Similar concerns would be voiced during the next hundred years, and even very recently. Some interesting and useful suggestions were made in the early part of 1870 to improve the overall knowledge of the industry. One of them was that the Warden of Goldfields should supply statistical returns, giving full information relative to the progress of gold mining in South Australia, including the number of licences issued and the amount received from them.

When this was done, it turned out that 1870 had been a good year for gold mining in South Australia. Although only 1,950 Miner’s Rights had been issued, compared to 3,712 between 29 September 1868 and 29 September 1869, 438 reef claims had also been registered. Ten crushing plants were operating and 800 miners were employed in the extraction of gold, producing 10,500 ounces and supporting at least 2,500 men, women and children out of an estimated population of 180.000.

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