Victoria Gold Mine, South Australian History

The Victoria Gold Mine.

The likelihood of minerals occurring in South Australia was suspected long before the arrival of European settlers. Unbeknown to them the Aborigines had already made use of the mineral resources for many thousands of years. One of the best-known minerals mined was the famous red ochre from the Parachilna area. This particular ochre was a very much sought after resource. The distribution throughout central and eastern Australia of this ochre made the northern Flinders Ranges one of 'the oldest international trade routes in the world'.

Captain Cook claimed eastern Australia and hoisted the English flag on Possession Island on 22 August 1770, on rocks which would later yield 2,500 ounces of gold. Matthew Flinders took a miner on board, when circumnavigating Australia in 1801-2, to collect specimens of all rocks and minerals they would find. Soon after his visit whalers and sealers obtained salt from Kangaroo Island. William Light was advised to consider the possible occurrence of coal before selecting the site for South Australia’s capital city.

When finally settled by Europeans in 1836, South Australia became the first Australian colony to open a metal mine. It was also the first Australian colony to start a gold mine and the first to have a mining company paying £1,000,000 in dividends.

Johannes Menge and Captain Charles Sturt were the first to suggest the possible occurrence of gold in South Australia. Menge, ‘a clever and enthusiastic mineralogist’, but at the same time ‘an eccentric old savant’ did much to excite interest and sustain belief in the vast mineral resources of South Australia. He had made many predictions about the occurrences of gold and minerals in South Australia, particularly in the Barossa Valley.

Not everyone was convinced though that he was right and Joseph Keynes wrote to George Fife Angas in England on 1 February 1841, ‘If half what Mr Menge says is true, the inside of Flaxman’s Valley is worth more than the outside, it being full of iron, gold and precious stone. I believe there is iron, there may be precious stones, but about gold I have great doubts’.

In 1838, Sturt observed that South Australia showed promise of future wealth in the ores and minerals of the ranges. Two years later he had no doubt that they contained a great proportion of slate and some of the richer ores as well. In 1841 he was proved to be correct when silver was discovered at Glen Osmond. While collecting statistical information in 1843, Daniel George Brock noted that at the Pinery one individual in sinking for water broke through iron pyrites, which he said, was indicative that gold was near. That same year it was said that gold had been found at Montacute and in 1844 more gold was found without the finder realising the nature and importance of the discovery.

The first authentic gold discovery, by Captain Thomas Terrell, during an oppressively hot April day in 1846 gave rise to the first gold mine in Australia. It was not in New South Wales or Victoria but at present day Castambul, in the Adelaide Hills. On 22 December 1845, Frederick Wicksteed paid £799 into the Colonial Treasury, on behalf of the Victoria Mining Company. It was for section 5597 containing 147 acres, at Montacute, where Andrew Henderson had discovered copper, and was named by John Baker after his native Montacute in Somerset, England. The purpose of the company was to lease, take, work, buy and sell mineral lands. Wicksteed had bought the land at public auction to secure it for copper mining purposes. The nominal capital for the company would be £20,000 made up from selling 10,000 shares of £2 each.

As the majority of people earned less than £2 per week, few if any would have been able to invest in the Victoria Mining Company float. Sales were slow at first, but by January 1846 some 500 shares had been sold raising enough money to get started. After the death of Captain William John Jury, Captain Thomas Terrell was employed at the company’s North Montacute mine, later known as the Victoria Gold Mine.

On 4 April, soon after opening the mine, Terrell discovered gold of almost perfect purity. He showed some of the specimens to Captain Edward Charles Frome, Captain Charles Sturt, Thomas Burr and Dr Edward Davy (Davey, Davis). Davy later signed the certificate stating that the samples ‘surrounded and embedded in dark chocolate coloured earth or gossan, were thickish layers of a bright yellow metal’ which contained 94 per cent gold.

Genuine specimens of gold soon adorned the cabinets of the curious, and several Adelaide jewellers were employed to mount South Australian gems in some of the virgin gold. A number of small pieces were also used to make a ring for William Jury’s son, William Edward, and for a brooch sent as a gift to Queen Victoria.

According to one local newspaper, ‘The Grand, and crowning triumph had been accomplished; South Australia seemed destined to become the real El Dorado’, and why not? Sir Walter Ralegh (Raleigh), English author, soldier, seaman, courtier and explorer had sailed the Orinoco River in South America in 1595 to look for the legendary land of gold. His book The Discoverie of Guiana, published a year later implanted the dream of El Dorado. He did not find it, eventually fell out of favour and was beheaded on 29 October 1618 at Westminster.

Some two hundred years later, Alexander von Humboldt, scientist, explorer and adventurer among other things, also travelled the same river in search of gold. He too was unsuccessful, but 150 years later one of the world’s richest mineral deposit was discovered along that river. Despite all this, El Dorado has come to be used by people hoping and looking for any place where riches could be found easily and quickly.

Another newspaper, hoping for a golden future in South Australia proclaimed proudly that ‘now all doubt and uncertainty are removed. The precious metal has been absolutely discovered’. It was not just the newspapers who got carried away either. After all they often only expressed the feelings of their readers.

A week after the discovery Benjamin Boyce wrote to his parents in Freiston, England, ‘but thank god every thingh is in a florishing whay now for thear is gold mines and silver mines and copper mines most all over the colleny the copper even lies on the surfis thear as beean a great deal of copper been cent to England….i hope you will not neglect to show my letter to all the young men of freiston that wishes to do gud for them selvs to come to adlade...’

The management of the Victoria Mining Company included John Bentham Neales, nephew of British political economist Jeremy Bentham. Born at Plymouth in 1806, J.B. Neales arrived in Adelaide on 24 June 1838 on board the 523 ton Eden. With experience in Cornish mining he soon became involved with silver, gold and later copper mining activities. It was Neales who handled the business for Australia’s first mining prospectus printed in 1841.

This prospectus set out the aims of the South Australian Mining Association, which among other things hoped to develop the Wheal Gawler silver mine. It stated that ‘the fact that South Australia abounds in mineral products of the greatest value, such as gold, silver, lead and iron has long been known to those who have made the geology of the province their study’. However the editor of the Register did not agree and stated that ‘we do not expect to find either gold or diamonds’. He has been proven wrong on both. Neales became one of the first directors of the Victoria Mining Company in 1846.

Dr Edward Davy (Davey, Davis), another director, was born in Devonshire and arrived in 1838. He was involved, with Dr Cotter and James Weston, in assaying the silver ore for the first South Australian Mining Association. He experimented at Hindmarsh with smelting ore from Burra and later became Superintendent of the Yatala Smelting Works and an assayer in the South Australian Bullion Office.

The other directors were Frederick Wicksteed, auctioneer, S. Payne, J.C. Sleman, Jos Bouch, S. Fairlie and Alfred Capper secretary. Frederick Wicksteed arrived in South Australia on the 461 ton Lord Goderich, which left Gravesend on 15 October 1837 and arrived on 15 April 1838. Starting out as an auctioneer in Hindley Street in partnership with W. Sandford until October, Wicksteed soon became involved with mining and mining companies, which would last a very long time.

The directors of the Victoria Mining Company paid their miners six shillings for a ten-hour day to look for the yellow metal. They took measures to protect the North Montacute property and guard the approaches to its mine. A home was to be built over the entrance and nobody would be admitted without special orders.

Extra precautions were put in place to stop the miners from taking any of the gold. Prospects looked very encouraging and there were soon enough miners with their families living on, or near, the mine site for the Rev. William Longbottom to hold the first church service on 16 June 1846. Longbottom had arrived on the 142 ton Lady Wellington from Sydney on 17 August 1838 and was the first Wesleyan Minister in South Australia.

In an effort to raise additional money to develop the mine, the directors issued a further 100 new shares amongst the holders of the original 500. Share prices remained high, especially after the government announced that no royalties on the gold would be demanded. The demand for the imposition of royalties on mineral lands had created ‘a great indignation’ and after 1,153 residents had signed a petition objecting to it, the government cancelled them, for the time being.

The excitement produced by all this good news was unbelievable. Many more shares were now bought and sold and the once £2 shares went as high as £30 and could not be bought at £100. Even at that price buyers thought their fortunes had been made.

When no further gold was discovered, a ruinous reaction followed and prices rapidly fell back to just £3 per share. Despite this early setback, it was still believed that there could be no doubt that the mine would eventually prove rich in metallic substances, if not in gold. For the investors though, the ‘ideal glory had departed’, and their shares were not likely ‘to revive until a vein of yellow gold, or a monster lode of copper again awakened the trumpet of fame on behalf of the holders’.

Apparently ‘the lode was refound, with every prospect of it increasing in size and value’. This good news allayed the recent dissensions between the managing directors and shareholders and the Victoria Mining Company somehow managed to increase its paid up capital to £10,000.

Unfortunately for the investors, and everyone else concerned, the mine’s total gold production never amounted to more than 24 ounces. Little additional gold was found during the next few years, but in 1849 it was reported that the depression of the shares was without sufficient reason and that a simple statement of facts would do much to the advancement of South Australia in this new ‘Golden Age’.

One wonders if this was an early example of a typical ‘talking-up’ of a mine or if indeed more gold had been located. Even if this had been the case, it could not have amounted to much as during a special shareholders’ meeting on 29 May 1850 it was decided to sell some of the original gold samples and ore belonging to the company.

A last attempt to increase the company’s finances was made on 6 June when a meeting was held in the Exchange Hall to sell an additional 1,500 shares to existing shareholders. As no further gold was located, and shareholders not inclined to risk any further money, Alfred J. Ashwin, the company’s secretary, informed the shareholders by the end of 1851, that it had been resolved to lease the property for a term not exceeding six months. This arrangement would give the company time to take stock and a breather while someone else would hopefully locate new golden veins at no cost to the company. Either way it would be a win-win deal.

While the Victoria Mining Company was struggling to keep cashed up, gold was found during 1849 in several creeks near Mount Barker where the children had been ‘profitably employed in gathering it’. Although small, these early discoveries of copper and gold helped to lay the foundations of the Montacute district. They also resulted in a systematic search for gold of the Adelaide Hills for many years by farmers and prospectors. During this time, Captain Terrell had discovered more gold, not in, but near the North Montacute mine, and taken up a lease in his own name while remaining in the employ of the Victoria Mining Company until 1851 when he left, like most other miners, for the Victorian goldfields.

When the initial news of the South Australian gold discovery reached Sydney by the end of April 1846, it became the talk of the town and several mining companies were formed to buy or rent mineral land in South Australia. Among them was the Australian Mining Company, which proclaimed that South Australia presented a rich and inviting field for mining operations. It invited capitalists to invest now and not wait until they had to compete with English investors.

By early June, the Adelaide Mining Company, also established in 1846, chiefly for copper mining, had obtained land next to the North Montacute mine, as the shareholders had great expectations that the auriferous treasures to a large extent existed in their property as well.

The gamble paid off as gold was found after they had used up nearly £500 in an effort to cut the Victoria Company’s imagined golden lode. For the next four years the company tried hard to make its workings pay but only found rich copper. As many as 50 men were employed in the search until 1850 when finally some gold was found.

Several companies unsuccessfully tried at various times to do better, sometimes finding a little gold, but often nothing at all. During 1857 a very rich patch was found at the Montacute mine and a £100 offer for some of the specimens shown at the Norfolk Arms Hotel was flatly refused. Finally in 1894 as many as 13 ounces were recovered from the old diggings and once again the property was worked for a short time.

Naturally the 1846 discoveries at Montacute created instant excitement and South Australia experienced its first taste of gold fever. It was exhilarating and contagious but created a number of problems as well. Months later, even after the dismal results of the Victoria mine, it appeared that the quest for gold and the mania for anything to do with mining, especially gold, had not abated at all.

In fact excitement was so strong that someone flippantly suggested the establishment in the newly built asylum, of a gold, silver, lead and copper ward. In England, where the news of South Australia’s gold discoveries arrived a few months later, almost every newspaper in the land carried it. They had only just got used to the idea of its latest Australian colony having silver and copper mines.

On 5 September 1846 the Mining Journal of London announced the discovery of ‘a lode of gold of extraordinary fineness and purity’ in the North Montacute Mine, belonging to the Victoria Mining Company. Soon people, who were shown the specimens, advised South Australians not to go for deep lead mining but to look for alluvial gold in creeks and rivers. Fortunately most South Australians ignored that advice.

The London Times of 29 September 1846 wrote, that the copper ore raised in South Australia, was ‘found to be rich and abundant but the more important fact of the discovery of a Gold Mine is now added, to increase the resources and prosperity of the settlers’. Another English newspaper heartily congratulated the colonists of South Australia and ‘their persevering determination to avail themselves of the varied resources of a settlement, oft-times termed in ridicule, the land of promise’. South Australia, it said, ‘had been in every way rewarded by the discovery of dormant capabilities and hidden riches, the extent of which the wildest dreams of the projectors of the Colony could never have anticipated’.

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