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near Ophir, I am afraid that, unless water can be brought on to the ground, the industry, so far as that description of mining is concerned, must languish, for the ground in that neighbourhood will not pay under the present system of treatment. These remarks apply equally to what is known as German Gully, also the various gullies running down from Raggedy Range to the Manuherikia River. It is fully believed by many well calculated to form a fair opinion that pretty well the whole of that stretch of country would pay well for sluicing if water were but available in proper quantity. There is a movement being made to amalgamate a number of the larger claims at Matakanui, with a view to flotation on a large scale on the London market. Some of the claims have proved to be wonderfully rich in the past, and are believed still to contain ground capable of as good results for a long time to come ; consequently the present holders are holding out for very large prices for their individual holdings. It is argued, probably correctly, that the whole of the ground could be worked to much greater advantage if undertaken by one properly-organized company, and water, the great factor, could be utilised to much greater economy than as at present. The undertaking, if carried out, will be certainly unequalled for magnitude in these parts. About the same number of miners are engaged as last year, but I look for a considerable increase in numbers if the dredging operation now being initiated turn out successfully. St. Bathan's, Cambrian's and Neighbourhood. lam glad to be in a position to report very favourably of this part of my district. Water for the greater part of the year has been in good supply, and the results have been equal to recent years. No appreciable alteration has taken place in the number of miners employed. The Scandinavian Company has erected an excellent elevating plant, and the prospects for the future of the company are most encouraging. The St. Bathan's Water-race Company has continued its work with success during the year, carrying on the deep and very expensive tail-race to their new claim at Surface Hill. Mr. Ewing's well-known claim at Kildare Hill is still in active operation, the energy which has hitherto characterized the works still being apparent. Elevating is now carried on from a depth of 120 ft., and another elevator, of a capacity of another 30fc, is about to be put in position. The claim of the same proprietor at Vinegar Hill is also being worked with great vigor, with, lam given to understand, good results. Again, at Cambrian's Mr. Ewing is in the van of progress, where he is entering upon very extensive works in a special claim recently acquired, with complete elevating plant. The general impression is that the ground will pay well, a result which is well merited by the untiring energy displayed by the proprietor. Good and, I believe, remunerative work has been carried on by the St. Bathan's Channel Company, the A.M. and E. Company, and by most of the old-established claim-holders. On the whole, I consider St. Bathan's and its immediate neighbourhood to be in a very prosperous condition, with every reasonable anticipation of a continuance of it for a long time to come. A comparatively new departure seems possible in dredging in this locality. Areas have been applied for, embracing the course of the Dunstan Creek, and there appears to be a probability of active steps being taken to adapt the system now in vogue on the large rivers to the comparatively insignificant streams, tributaries to them. The results will be watched with great interest, as, if successful, it would open up a very large field of operations. In connection with this subject, I am of the opinion that some modification of the regulation respecting prospecting areas for dredging will be found desirable. The time allowed now—namely, twelve months—is, I think, unnecessarily long; and in many cases it might be found to be detrimental to the interests of many to lock up such considerable areas for so long a time as twelve months. I have not been yet informed of the yields of the larger claims in this neighbourhood. If the figures reach me in time I will submit them for your information later on. The permanent settlement of the land is progressing very satisfactorily ; undoubted evidence of it appearing from one end of my district to the other. Far more substantial houses and farm steadings are springing into existence in the many blocks thrown open. There is now quite a settled rural population to be met with, of whom it may, I think, with confidence be said they have come to stay. The crops last year were for the most part very good, and, in spite of the wonderfully inclement weather we experienced last winter, and the consequent severe losses in stock, the agricultural and small pastoral settlers are, I consider, in better circumstances than they have enjoyed almost at any time previously. A prosperous future may be reasonably predicted for them ; more particularly so when the railway is carried to a point where its advantages will be within the reach of the many who are now cut off from it by distance. In this connection I venture to say that, as the line progresses, a liberal adoption of the village-settlement sections of the Land Act in the neighbourhood of the various stations would prove most welcome and beneficial, and go a long way to promote close settlement, a result so much to be desired. In conclusion, I may say that the present condition of the district as a whole I look upon as satisfactory, and the outlook for the future promising. The volume of business transacted in the Courts and offices under my charge shows an increase. The revenue, lam glad to say, also presents a satisfactory comparison with last year. I have, &c, The Under-Secretary for Mines, Wellington. S. Mead Dalgliesh, Warden.

Statement of business in Courts, and revenue collected: Complaints in Wardens' Courts, 41; ordinary applications heard, 484; licensed holdings granted, 10; special claims granted, 11; miners' rights issued, 650 ; water-race licenses, 299 ; general registrations, 600 ; revenue collected, £1,620 12s. 5d.; approximate estimate of yield of gold, 19,0000z. Magistrates' Courts : Civil cases, 293; criminal cases, 111.