Ohinemuri Regional History Journal 51, September 2007

(by Graham Watton)

One of Paeroa's most historic buildings, right in the centre of the town, and one with quite a tale tell in its infancy, is the former 93-year-old National Bank of New Zealand's gold refinery in Willoughby Street.

Today the building is owned by Greg and Katie Waite and is hidden from street level view by a ponga fence. They have combined two of the three flats into their attractive living area and also have their furniture restoration and Antiques on Main businesses on site.

In the 1890s the Bank of New Zealand, which came to Paeroa in 1881, had a small refinery room in its two-storeyed building on the corner of Normanby Road and Victoria Street (today the site of the Paeroa Service Station).

The National Bank of New Zealand arrived in town in 1895 and its first premises included a "melting house" for the treatment of bullion. When new premises were built in 1910 on the corner of Normanby Road and Mackay Street (today's site) the "melting" process facilities were not added as there had been a decline in the demand for this service.

It was soon realised that there was an increasing need for a bullion refinery plant to service the mining industry in the Ohinemuri District. In 1911 the National Bank formed a joint venture with the New Zealand Mining Trust and the bank purchased a section with a 97ft frontage by 125ft. deep in Arthur Street (now Willoughby Street) for 200 pounds. This was some 200 yards from the bank's new building and on high ground above the flood level.

By February, 1914, a Ferro-cement building 80ft by 40ft, with an iron roof and a 40ft tall smokestack was completed. Inside was the main refining chamber, two assay offices, weighing room, accounting room, engine and dynamo rooms, two officers' bed rooms, sitting room and bath room. Detached from the main building was a store room and coal hopper.

The plant comprised of modern electrolytic equipment which included a Cambridge gas producer, 35hp Crossley gas engine, two air compressors, one two-stamp battery, suction pump, blower berdan pan and dynamo. The total cost of the plant and building was between 3000 and 4000 pounds.

The bullion, containing gold and silver was bought for processing from the Waihi Grand Junction Mining Company and the Talisman Mining Company at Karangahake, as well as from several smaller mines including those at Komata, Puriri, Thames, Coromandel and Te Aroha.

The joint venture saw the National Bank providing the staff and funding and the Mining Trust the technical expertise. The first manager was Frank Budd with Mr Len Bell as assayer and chemist. The pure refined gold and silver was sent sometimes to the Melbourne Mint and on other occasions to America.

At the various mine sites the ore was retrieved from underground mining of the gold-bearing quartz rock seams. It was crushed into a talcum-like powder and the gold, silver and other metals, were dissolved by a cyanide solution. This was precipitated into metallic zinc savings in the form of a black slime.

In the refinery the slime was treated with sulphuric acid to dissolve the surplus zinc contained therein. The slime was now washed in hot water, dried in a large furnace and melted with borax, soda and sand in an oil furnace. The resulting bullion, which was alloy of gold, silver, copper, lead, iron and other metals was bailed out into molds, each bar weighing 1000 ounces. This was the first stage of refining.

The bullion was now conveyed to a large capel furnace where as much as 25,000 ounces were melted at one time. In this furnace a large percentage of the metals, other than gold and silver, were oxidised off with the aid of added lead, the process reducing the base metal down to about 2 per cent.

From here the bullion went to the silver cells, so called because it was here that the silver was separated from the gold, by the aid of nitric acid and an electric current. During this process the silver was dissolved and precipitated in the form of pure silver crystals, which were washed in boiling water, dried and melted into 1000-ounce bars ready to be shipped away.

The gold from the silver cells was now collected, washed and melted into slabs and then put into the gold cells. Here, by electrolysis, the gold was dissolved and re-deposited as chemically pure gold on strips of pure gold foil hung in the cells. When this process was finished the deposited gold was collected, washed in boiling water, dried and melted and cast into 400 ounce bars, worth about 5000 pounds each. These bars were packed into special made boxes and sent to the Mint.

The former National Bank gold refinery building.

The former National Bank gold refinery building.

There Was Gold Within These Old Walls
Ohinemuri Regional History Journal 51, September 2007
The former National Bank gold refinery building.

With the Grand Junction mine building its own refinery, the Paeroa plant continued to service the Talisman Mine and local mines.

When the First World War started there were many companies "exporting" their bullion, but this practice was stopped. The British Government purchased bullion and stored it in Wellington. This included bullion produced in the South Island.

At the conclusion of the War, all the stored bullion was sent to Paeroa under armed escort to be refined and returned to Wellington as pure gold and silver and finally sent to the Royal Mint in England.

With the closing of the mines in the district, the National Bank refinery was finally closed in April, 1921. During its seven years' of processing there were 1,362502 ounces troy of bullion treated.

As the plant was dismantled and sold every piece of machinery was thoroughly cleaned, all the dust and dirt was saved and processed for any gold and silver it contained. The bricks from the furnace were sent to Waihi Mining Company where they were crushed and processed to extract any deposits.

The building was cleaned from top to bottom, again all the dust and dirt gathered. Even residue from the cracks in the concrete walls and floor was assayed and any precious metal recovered.

Security Was Tight

A son of the refinery's first manager, Brick Budd, in an article in the Thames Valley Gazette, May, 1983, recalled his first association with Paeroa came in 1914 at the age of seven years.

"My father, Frank Budd, had been assistant manager at the Waihi Gold Company's battery in Barry Road and then manager, before he was appointed manager of the National Bank of New Zealand's gold refinery in Willoughby Street, Paeroa.

"I often wonder in this day and age with all the ad hoc bodies around the place to stop people doing their thing, how in 1914 the bank got away with it. The old building is still there, right smack in the middle of the town.

"The noise coming from there when the furnaces were going and the steam engine (to develop electricity etc.,) kicking up bobs-e-die was deafening. I was too young to know if anyone objected, but they would not have a show of getting away with it today!

"Anyway it was all very hush-hush. Nobody except the odd VIP was allowed anywhere near the building—and the VIP had to be very VIP before he got in. I got in because for some years I took Dad's lunch to him.

"My instructions were to come in, not on any account to walk through any water as there was the odd chance it would be spilt sulphuric acid (the men's boots were all soled with cut down motor tyres!), leave the lunch, don't touch anything and get out!

"The staff peaked at about eight. I counted at odd times no fewer than 10 hair-triggered revolvers, two of which were in Dad's office, and others handily placed where any member of the staff could get at them. In addition to this there were alarm bells in the walls which could be activated simply by leaning against them.

"Security was mighty tight and so it should have been. My father told me years later that at certain times there was over a million pounds worth of gold in the place.

"I always loved the booby-trapped safe door. The safe was a large concrete room with three doors. The inside one was just iron grill; the next one out was a heavy steel door with three keys and the outside door was a very heavy steel outfit also with three keys. But behind the key holes on the outside door was a glass jar full of super strength sulphuric acid. The scheme was that if anybody used a cutting torch to cut the key holes in no time he would have become overcome with sulphuric acid fumes.

"The second door would stop would-be robbers going into the safe itself and the only place they could go was, presumably, back outside but by then they would get what was coming to them and it would not be gold. The gold was never touched.

"When sufficient bullion had been refined the pure gold was made up into blocks weighing about 80lbs each. Then, with great secrecy, the blocks would be transferred to either Auckland or Wellington.

"If it was Auckland, the gold would be loaded onto one of Brenan's horse-drawn lorries and taken to the Puke Wharf, escorted by my father, armed with two revolvers, and the local policeman, either Mr Miles or Mr Dyer, who were likewise armed. It would be loaded onto either ss Waimarie or ss Taniwha, generally in the evening, and unloaded at Auckland the next morning.

"Should the gold bars be going to Wellington the same would apply, except they went by train in a special guard's van with Dad and the policeman mounting guard.

"As I said before, nobody knew very much about what was going on in the building except there was a mighty lot of noise coming from it.

"As the refinery was closed down in 1921 Dad resigned for his position and the family moved to Hastings."

More Memories

Mr George Chappell of Waihi, also gave an insight into the Paeroa refinery when he wrote an article in the Ohinemuri Journal, No. 3, in May 1965. He joined the staff after returning from the First World War being employed by the National Bank. He states:

"At times we had as much as half a million pounds worth of bullion in the strong room. It would have made a nice haul for thieves had they been able to get away with it, but thank goodness we had nothing of that sort, although we did have a couple of false alarms.

"There were three bedrooms in the refinery, two of these were bank staff and I slept in one. It was a strict rule that at all times at least one of us must be on the premises.

"The inside of the main building was lined with very fine corrugated iron and the windows were 16ft up. Two of the staff were away at a dance one very stormy night, when there were high winds and heavy rain. I went to bed as usual, but was awakened by an awful row, as though somebody had got through one of the windows and was sliding down the wall on a rope with the toes of his boots rasping down the corrugations.

"Jumping out of bed with my gun in my hand I stealthily went out into the passage and had a look through the peep shutter into the main building, which was always lighted. I waited some time but could see nothing. I plucked up courage, got my keys and opened the main door. I had a good look around without seeing anyone, but nearly fell over the window pole lying on the floor.

"It usually stood up against the wall near the windows and the vibration set up by the wind must have caused it to slide down the corrugations, its brass hook making that fearsome noise in the middle of the night.

"The other occasion was also when the other two staff members were away for the night and this time I was awakened about 2 a.m. by what sounded like someone trying to get into the strong room. I laid and listened and was sure I heard somebody moving about.

The private rooms, I may state were lit by gas, and a pilot light was always kept burning. Such a light was fitted to the wall at the head of my bed. I fancied I heard someone entering my room, so taking my revolver from under the pillow I gradually sat up in bed.

"As I did so a head at the foot of the bed rose also. I waited no longer but let drive and shot the poor devil between the eyes. Then jumping out of bed I turned the lights full on, but could find no corpse. What I did find was a shattered mirror on my dressing table at the other side of the room. Alas for imagination!

"What I had seen as I slowly sat up was my own head rising over the foot of the bed—but it in the mirror. The real burglar turned out to be a cat that had been locked in the bathroom and was trying to get out."

Since the refinery closed the building has been used for many purposes such as a workshop, storage, and clothing factories. Flats were attached to each corner, two of these have been merged for the Waite's living quarters, one is leased and the fourth demolished.