On this occasion Carvajal recovered the whole of his own baggage, and got possession of all that had belonged to the enemy, with all of which and the prisoners he had made, he returned to Pocona, engaging to do no injury to those who had escaped from the soldiers in the late attack, and even restored their horses arms and baggage to his prisoners, most of whom he sent off to join Gonzalo Pizarro. On leaving Pocona, he took Alfonso de Camargo and Luis Pardamo along with him, who had formerly fled along with Mendoza, and whose lives he now spared, as they gave him information respecting a considerable treasure which Centeno had concealed under ground near Paria, and where in fact he discovered above 50,000 crowns. After this, he went with his troops to the city of La Plata, where he proposed to reside for some time. At this place he appointed persons in whom he could confide to the offices of judges and magistrates, and dispatched intelligence of the success of his arms over the whole kingdom of Peru. He remained for some time at La Plata, where he collected treasure from all the surrounding country, under pretence of supplying Gonzalo Pizarro, but in reality he retained much the larger share for himself.

Having thus succeeded, in all his enterprizes and established his authority in the south of Peru on such firm foundations that no opposition remained in the whole country, fortune seemed to determine to exalt him to the summit of his desires by the discovery of the richest mines which had ever been known. Some Indians who belonged to Juan de Villareal, an inhabitant of La Plata, happening to pass over a very high isolated mountain in the middle of a plain, about eighteen leagues from that city, named Potosi, noticed by some indications that it contained mines of silver. They accordingly took away some specimens of the ore for trial, from which they found that the mineral was exceedingly rich in pure silver; insomuch that the poorest of the ore produced eighty marks of pure silver from the quintal of native mineral25, being a more abundant production than any that ever had been heard of before. When this discovery became known in the city of La Plata, the magistrates went to the mountain of Potosi, which they divided among the inhabitants of their city, setting up boundary marks to distinguish the allotments or each person in those places which appeared eligible for workings. So great was the resort to these new mines, that in a short time there were above seven thousand Yanaconas, or Indian labourers, established in the neighbourhood, who were employed by their Christian masters in the various operations of these mines. These men laboured with so much industry, that each Indian, by agreement, furnished two marks or sixteen ounces of silver weekly to their respective masters; and so rich was the mine, that they were able to do this and to retain an equal quantity to themselves26. Such is the nature of the ore extracted from the mineral veins of this mountain, that it cannot be reduced in the ordinary manner by means of bellows, as is customary in other places. It is here smelted in certain small furnaces, called guairas by the Indians, which are supplied with a mixed fuel of charcoal and sheeps dung, and are blown up by the wind only, without the use of any mechanical contrivance.

These rich mines are known by the name of Potosi, which is that of the district, or province in which the mountain is situated. Owing to the easy labour and great profit experienced by the Indians at these mines, when any of the Yanaconas was once established at this place it was found almost impossible to induce them to leave it or to work elsewhere; and indeed, they were here so entirely concealed from all dangers, and so much exempted from their usual severe drudgery and the unwholesome vapours they had been subjected to in other mines, that they preferred working at Potosi to any other situation. So great was the concourse of inhabitants to Potosi, and the consequent demand for provisions, that the sack of maize was sold for twenty crowns, the sack of wheat for forty, and a small bag of coca for thirty dollars; and these articles rose afterwards to a higher price. Owing to the astonishing productiveness of these new mines, all the others in that part of Peru were speedily abandoned. Even those of Porco, whence Ferdinand Pizarro had formerly procured great riches, were left unwrought. All the Yanaconas who had been employed in searching for gold in the province of Carabaya, and in the auriferous rivers in different parts of southern Peru, flocked to Potosi, where they were able to make vastly more profit by their labour than in any other place. From various indications, those who are most experienced in mining believe that Potosi will always continue productive and cannot be easily exhausted27.

Carvajal did not fail to take advantage of this favourable discovery, and immediately set about the acquisition of treasure for himself by every means which his present uncontroulable power afforded. In the first place, he appropriated to his own use all the Yanaconas, or Indian labourers in the mines, which had belonged, to such of the inhabitants as had opposed him, or to those who had died or fled from the province. He likewise appropriated to his own use above 10,000 Peruvian sheep, belonging to the Yanaconas of the crown or to individuals, which were employed in transporting provisions for the miners. By these means, he amassed in a short time near 200,000 crowns, all of which he retained to his own use. His soldiers were so much dissatisfied with his conduct, as he gave them no share of his exactions, that they plotted together against him. Luis Pardamo, Alfonso de Comargo, Diego de Balsameda, and Diego de Luxan, with thirty others, who had entered into this conspiracy, had determined to put him to death about a month after his arrival in La Plata from his expedition against Mendoza; but, owing to some obstacles, they had been induced to deter the execution of their enterprize to a future period. By some unknown means the circumstances of this plot came to the knowledge of Carvajal, who put to death the before-mentioned leaders of the conspiracy, and ten or twelve others, and banished all the rest. By these merciless executions, in which he indulged on all occasions, Carvajal inspired so much terror that no one dared in future to make any similar attempt; as he not only punished in the severest manner all who evinced any intention of revolt, but put people to death on the slightest suspicion. Owing to this the loyal servants of his majesty may assuredly be exculpated from the blame which has been imputed to them, for not putting Carvajal to death: In reality, there were many persons sufficiently anxious to have done so, on purpose to escape from the cruel tyranny under which they groaned in secret; and four or five conspiracies were entered into for the purpose, which were all discovered, and occasioned the destruction of at least fifty individuals. By these means every one was terrified from attempting any thing against him, more especially as he gave high rewards to all who communicated any intelligence of the kind, so that all were forced to temporize and to wait in anxious hope of some favourable opportunity to deliver them from his cruel tyranny. Carvajal continued to remain at La Plata, frequently publishing accounts of the successes of Gonzalo Pizarro, to whom he often sent large remittances; derived from his own resources, from the royal fifths which he appropriated, and from the confiscated estates of those whom he put to death, all of which he seized upon, under pretence of supplying funds for prosecuting the war.