Historical Texts

An article of interest manually translated from The Sydney Daily Telegraph, 7 February 1889, tells of court proceedings and fallout in the wake of the Taranganba Gold Scandal.

THE TARANGANBA MINE.

(Sydney Daily Telegraph.)

HISTORY OF THE MINE.

Further investigation only develops the mystery of the Taranganba mine. A representative of the Daily Telegraph called upon some of the gentlemen whose names have been most conspicuously associated with the venture, and so far from being able to pierce the cloud of mingled doubt and suspicion that hangs over Taranganba, he returned to the office in the evening after many hours of investigation more disposed than he was at the outset to regard the so-called "gold mine" as an astounding feat of jugglery on the part of Nature herself, or else of some enterprising individual who has undertaken the task of materially assisting natural law in the auriferous enrichment of certain localities.

The facts of the case are briefly these: -Six hundred and forty acres of station property, situated on the Queensland coast some forty miles from the famous Mount Morgan, were bought by a syndicate of Sydney capitalists, most of them gentlemen of high commercial reputation, and floated by them as probably one of the richest gold mines in the world into a public company with a nominal capital of a million sterling.

Before the purchase was made, precautions were taken by the promoters to test the bonafide nature of the claims. Experts were sent to the field, samples of stone were collected and a large number of assays obtained. Subsequently the property was visited by the promoters themselves, by other experts, and by capitalists with an eye to, speculation.

At first all went well. The most glowing account of the mine were circulated by those who inspected it. It was poor stuff that only went 20oz. to the ton ; It was fairly rich at 100oz,; "in fact, Mouut Morgan was not a patch on it." Such was the impression of one presumably highly qualified geologist, while the tone in which others wrote and spoke of the field was equally eulogistic. There seemed to be no room for doubt but that a mine of incalculable richness had been struck in the discovery of Taranganba, and the only wonder was that a squatter could have been living for years on the spot uncon- scious of the fact.

Early in the history of the mine, however, a note of warning came from a quarter whence it was least expected. The mining manager, after speaking of the property in terms of extravagant praise, became sus pioious that all was not "square." In short, he believed himself to have been wofully duped, and lost no time in acquainting the purchasing syndicate with this opinion. The rock which taken under certain conditions at the outset had yielded a wealth of mineral 'when taken under rather different conditions a little later on had ceased to yield anything but the merest trace of gold.

It is stated, too, that Mr. Hall, of the Mount Morgan mine, had previously prospected the ground and given it up as com- mercially valueless ; but as the original vendor puts the matter in a different light and the Sydney syndicate were perhaps not aware of the fact that Mr. Hall had inspected the property, although it is strong evidence against the probability of ever discovering large quantities of gold at Taianganba, it can hardly be considered part of a general statement of the position of the directors of the company in their relationship to the mine on the one hand and to the public on the other.

At all events, after receiviug a most damaging report from their then mining manager, the promoters continued to obtain encouraging testimony from experts sent up to the field for the pur- pose of making further investigations, and upon personally visiting the mine several of them were more disposed than ever to regard it as a magnificent fortune. Outsiders, too, inspected the property in large numbers, and in some cases, as a result of what they saw on the field of stone which they actually crushed and panned for themselves, they either took up shares in the company or increased the number of shares they already held. At the same time some rather strange coincidences were every now and then taking place.

It was observed, or at all events has since been remembered, that rock which was crushed and washed on the field had a peculiar faculty of yielding more satisfactory results than rock which was carried to Sydney for treatment. ln one case, indeed, whilst something like nine out of every ten of the washings on Taranganba produced gold varying from 2ooz. to hundreds of ounces per ton, only two or three out of very many samples brought down to the metropolis by the same gentleman showed more than a trace of gold, and some of them hardly the colour.

Then, as a crowning mystery, we have the fact that one expert who a year ago had described the property as representing 20,000,000 tons of auriferous strata, when sent back by the directors to make assurance doubly sure, after completing 4000 assays, is unable to find the enormous treasure-just as though these moun- tains of gold had taken to themselves wings and flown away in the meantime.

And whilst the unfortunate expert is working night and day to justify his former dreams of wealth, the vendor of the property, a squatter with no special knowledge of mining, is continually picking up stones, throwing them into his mortar and grinding out of them, gold dust averaging proportions of from 2oz. to 200oz. to the ton.

WHAT MR. T. VICKERY, M.L.C, SAYS.

Mr. Vickery explained to our representative how it was that hE had taken so large an in- terest in the mine. Long ago he had, like many other prosaic business men, lost all faith in mining speculations. On one occasion he

had visited, with the intention of purchasing it, an alluvial gold claim, into which he discovered, fortunately in time, that the vendors had actually shot grains of the precious metal from the barrel of a fowling-piece. On another occasion he had partially paid for a mine with an unappreciable amount of gold in it on the supposition that it was yielding 4.5oz. to the ton, when just before the purchase was completed the vendor was caught in the act of throwing gold dust into the crushing-machine. These and other experiences of an unfortunate nature had led Mr. Vickery to eschew mining investments.

Yet, nevertheless, when his friend Dr. Robertson came down to town after a visit to Taranganba full of tales of the mar- vellous wealth of the field, he consented to try once again, not as a mere speculation in shares, but as a permanent mining investment. Fully persuaded upon what he considered, and considers still, unimpeachable authority of the capacity of the mine, he visited it himself in company with several other gentlemen, Messrs. G. R Dibbs, James Fletcher, Josiah Mullens, and Dr. Robertson being amongst the party. He gathered samples from all parts of the field and carefully pounded and washed them. Occa- sionally the yield was almost imperceptible, but generally good results were obtained.

A second time when the directors were about to procure extensive plant and machinery, Mr. Vickery visited Taranganba, accompanied by Mr. Arthur Mullens and Mr. Cox, a mining expert, who had received instructions to re- port with absolute fairness on the prospects of the field, and if unfavourably impressed to say so without hesitation. There was more stone-breaking and more careful panning. Again the samples yielded well ; for every dish giving nothing nine dishes afforded results which varied from 20oz. to hun- dreds of ounces to the ton.

Each gentleman carried back to Sydney with him thirteen sample bags full of rock. Some of the specimens being loose stones, were picked from the surface, others were broken from the solid rock, and due care was taken in filling the bags to distribute them equally into each. Yet-strange to say, upon assaying the contents in Sydney, Mr. Cox and Mr. Mullens found mere traces of gold in their samples, whilst Mr. Vickery after two unsuccessful washings discovered gold in highly payable quantities in the other bags which he opened. This is the more extraordinary inasmuch as the samples had been sealed as soon as they were obtained and had not been broken open until they were assayed in the warehouse in Pitt-street, Sydney. Mr. Vickery, it should be stated, had invested very largely in the property, and has not sold a single share.

MR. ROSS'S STATEMENT.

Mr. Robert Ross, who now resides at Palmerston, Waverley, was the proprietor of the Taranganba estate before it was purchased from him for £20,000 in cash and a third interest in the mine by the Taranganba Gold Mining Company. He had lived on the station for many years without suspecting the presence of auriferous strata beneath his estate. The success of Mount Morgan, however, and its proximity to Taranganba, led him to prospect for gold.

He states that he did so with considerable success, and wishing to place the matter boyond doubt asked Dr. Robertson, who was at the time in Queensland, to inspect the property for him. Dr. Robertson visited the station, took innumerable assays, and reported most favourably upon them. Mr. Ross also called in the aid of Mr. Hall, of the Mount Morgan mine. Mr. Hall, says Mr. Ross, was delighted with the prospects, and offered to find the labour with which to develop the property on condition that the prospecting should bo allowed to continue during nine months which he purposed spending in England before anything was done towards forming a company.

Mr. Hall went to England, leaving a manager and some men in charge of Taranganba, but Mr. Ross states that before they had been working more than three months he had come to the conclusion that the best thing he could do was to sell out to a svndicate and not to wait for the return of Mr. Hall. Then it was that negotiations were opened up with Mr. Vickery and his friends, which ultimately resulted in their purchase of the mine from Mr. Ross for the sum and interest named above.

Mr. Ross has sold two other mines on his freehold, one for £2000 to a Tasmanian company and the other to a private syndicate. In each of these properties the vendor retains a large interest, and for every acre of each receives an annual rental of £1.

Mr. Ross persists in speaking confidently of the prospects of the field, and in reply to derogatory observations says that nothing that has been said of the mines on his land can be worse than was said of Mount Morgan in the early days. Indeed, he stoutly maintains that the Taranganba company has as yet hardly scratched the surface, and that months of hard work are before it ere it can expect to obtain a fair result of its labours.

OTHER ASSAYS.

We have already alluded to the result ob- tained by Mr. Vickory from the samples brought under seal by himself to Sydney. The exact words of his statement are these . " In one of the bags opened in Sydney a result was obtained equal to the best on the mine. In the other bags the result was poor, giving only specks or traces in the dish. The other nine bags remain with seals still unbroken. I also picked up and brought away in my box and portmanteau about twenty stones from different places. There was no gold visible, but I brought them away to test in Sydney because they were similar to those that gave good results on the mine. Most of those have been crushed and panned in Sydney, showing as a result, in three out of four instances, a good yield of gold. Parts of four stones were assayed, yielding-No. 1,4 dwt. 1 15oz. to the ton : No. 2, 7oz. to the ton,: No. 3, 69oz. gold and 2oz. silver to the ton ; No. 4, 195oz. gold to the ton." Mr. Mullens, who accompanied Mr. Vickery on his tour of inspection, says of the thirteen samples brought down from the estate by himself and submitted to analysis at the Sydney Mint "the results were traces only."

Mr. Cox reports that out of many washings on the estate in only four cases did they fail to obtain prospects of fine gold, which in some cases indicated a very rich yield, even hornstone and a yellow flinty quartz giving good results. Most of the samples, he says, were crushed and washed by members of the party, Messrs. Dibbs, Fletcher, Vickery, Robertson, and Mullens, and entirely without the interven- tion of the original proprietor. But then, when alluding to the samples brought to Sydney for assay, Mr. Cox says: "The exceedingly small returns force us reluctantly to the conclusion that a systematic course of deception must have been practised by someone on the ground for the purpose of misleading us and others, and that the property is valueless as a gold mine so far as proved by the present workings. We may state that we personally crushed three of the samples when in Sydney-namely, Nos. 9 P, 8A P, and 16, before sending them for assay, and although these wore taken from those parts of the property which apparently yielded the best results on the ground, we were unable to obtain any gold from samples of them in Sydney by ordi- nary dish washing, a rosult which has since been confirmed by assay."

Dr. Robertson has visited the proporty three times and on each occasion been most favourably impressed with the prospects. On 1st February, 1S87, he sent nineteen samples to Mr. W. A. Dixon for analysis. Of these samples the results varied widely, some of them yielding as low as 9dwt., while one actually ranged as high as 77S7oz., the average being apparently something over 400oz. to the ton. Mr. Dibbs, giving his opinion as he says for what it is worth, considers " that the Taranganba mine in richness and extent is fully equal to the Mount Morgan."

Mr. Fletcher, on the receipt of a telegram from this office, replied that he had never sold one of his shares in the mine, but that he had involved himself in liabilities which, if it turned out to be a failure, would take him years of hard work to pay off. We hope in a subsequent issue to give a statement by Mr. Fletchor as to his position in the matter. Writing on 1st September, 1887, Mr. Fletcher said:-" In every case but one upon crushing and panning the stones from the dykes and leaders I found gold, many of the samples yielding large (very) prospects. Some of these I have no hesitation in saying equalled a result of fully 200oz. to the ton."

CORRESPONDENCE.

Mr. A. Pelham Wood, writing after reading the directors' report, says :-" Messrs. Cox and Seavor's report, though issued in a pamphlet, was not published by the directors in the pro- spectus issued by them. After Messrs. Gleadow and Cox and Seaver had reported, Mr. Tom W. Conran (of Conran's Gold Mining Com pany, Norton, Queensland), whose practical knowledge of gold and its extraction is con- sidered second to none in Queensland, re- ported twice on Taranganba, making over 200 assays from all parts of the workings ; his re- sults averaged under 2dwt. gold per ton.

" Just bofore the present proprietary secured Taranganba the property was under offer to the proprietors of Mount Morgan and by them put to a very crucial test. Mr. Wesley Hall, present general manager, and Mr. Lisle, pre- sent mining manager of the celebrated Mount Morgan, spent weeks with a gang of men sink- ing shafts and cutting trenches on Taranganba, but finding nothing payable they declined the offer of the property. As Mr. Hall said to the writer last March : ' If Taranganba had been any good you may bet we would not have let a second Morgan slip through our fingers.' "Whatever plea of innocence or ignorance the directors may think fit to make, they have much to answer for."

"'l. Why were not the damning reports of Messrs, Gleadow, Seaver, and Cox, and A. L. Mullens (of Messrs. Josiah Mullens and Sons), published by the directors in their prospectus, instead of in a pamphlet, which few intending shareholders were able to procure, and then only by paying 6d. for one.

"2. Why did not the directors do what the writer' dared one of them to do nearly a year ago -send, say, 200 tons of stone in lots of 50 tons each to be treated at four different metallurgical works in Germany and England.

Returns could have been received within four months from any period during the last two years, which would have proved whether the stone in bulk was payable or not. Had this been done some thousands of pounds would have been saved to those unfortunate specu- lators who have been induced to purchase shares in the company more from the apparent glamour surrounding the names of the directory than from the intrinsic value of a mine which those directors knew had been pronounced worthless by scientific and practical men of undoubted reputation as regards gold and gold-mining."

WHERE DID THE MONEY GO?

Where did the money go to? A large number of these million shares were sold to the public for good hard money. Who got it? The following is the account given to us by a gentleman who ought to know, and it goes to show that the directorate, with the exception of Mr. Ross, have not made any profit them- selves, but, on the contrary, have incurred a heavy loss : - "At first Taranganba was thought to be so good a thing that people went to law for the privilege of being 'first in the swim.' Ultimately a syndicate was formed, and agreed to pay Mr. Ross £20,000 cash for the right to mine and to 'give him an interest of one-third.

They formed a company of 1,000,000 shares, which they took up themselves, Mr Ross's share being 333,333 of them. In order to raise the necessary funds and "to prevent competition with one another, the shareholders by pro rata contributions according to their holding, formed a pool of 100,000 shares, which they offered to the publie at a stated price. These shares realised, roughly speaking, £60,000. Of this, £3o,000 was placed to the credit of the company, and with the exception ol a fixed deposit ot £10,000 has been expended in carrying on the concern.

Mr Ross by virtue of his shares came in for one-third of the proceeds, and anyone can see that the remainder is not enough to repay the syndicate for their original outlay of £20,000, but leaves them very much out of pocket. Mr Ross, by the sale of shares and by the original payments made to him, must have made a very large sum of money.

The conduct of Mr Dibbs and Mr Fletcher has been especially straight forward throughout. They bought largely and are very heavy losers. " Of course our informant's calculations only extend to the original 100,000 shares issued by the "pool." At the time these were on the market, however, it was possible to buy shares at a much cheaper rate if delivery was deferred until after the termination of the pool agreement A large number outside of the pool could be disposed of in this way, but we are not in a position at present to say how many.

The circumstantiality of the statements made and the fact that gold was not expected to be visible in the stone deceived even experienced mining men. The chairman of a Victorian gold oompany bought 10,000 shares, and after a personal inspection of the property he bought 10,000 more. In one case payment for a large parcel was made by bills, but the purchaser is now resisting payment, and a Supreme Court notion, in which the bona fides of the whole affair is likely to be tested, is pending.

ln their original prospectus of September, 1887, the directors say -"Extensive machinery to operate upon 1500 tons per week has been ordered from America " In the report furnished on Monday last the directors give the shareholders to understand that it was after receiving Mr Corbett's report of having raised 1000 tons of 10oz. ore that they "felt justified in going on erecting and constructing largo and expensive crushing plant." What a pity they did not send up Mr. Lejpeer, or some other competent assaeor, before coming to that decision instead of after. A thousand tons of 10oz. stone represents an asset of £40,000 -far too important a matter to be accepted on the mere [indeciperhable] of a mining manager, especially in a case in which there had been so much dispute and uncertainty as to the value of the ore.

THE LEGAL MANAGER

A representative of the Daily Telegraph waited upon Mr Dodds, the legal manager of the company, to make inquiries as to the state of affairs. He was very courteously received by that gentleman, but was informed that he had resigned his position on the previous day.

The fact of Mr Ross being elected a director, notwithstanding the reference made to him in the report presented at the half-yearly meeting, is the reason which has induced Mr. Dodds, who has been connected with the company since its formation, to take this step.