how did john thornton spend the $1,600 he won from the contest?

Basically the money allows John to pay off his debts and then head east with his partners for a fabled lost mine. They don't find the mine but they do find gold. Thus ends John’s pursuits in the wild. Check out this site's summary for more detail on the chapter. It's in the source link below.

After thornton finds the gold and starts to mine a group of indians come and kill every one execpt buck, buck finds them dead with the indians still there and ends up killing all them.

he uses it to pay off debts he owed and head east with other workers on the lookout for a lost mine. They didn't find the mine, but found gold. That ends Thornton's pursuites in the wild