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A rush set in to Karaka Block, and a large number of claims were marked out; but in consequence of litigation some delay occurred in granting the licenses, and up to the present very little work has been done here. Success Aline. —Owners, Success Gold-mining Company (Limited). —This mine is situated in the Karaka Block, and includes the land lately known as the "Try Again," from which exceedingly rich quartz has from time to time been obtained. A large amount of work has been done by the present owners. James's Eeef is well opened up, and a deep-level cross-cut has been driven. Captain Hodge gives the following summary of works accomplished : James's -Beef —620 ft. drives ; 183 ft. rises; 21ft. winzes ; 93ft. 6in. cross-cuts. Success No. 2 Eeef—42ft. drives; 7ft. cross-cuts. Bennett's Level —295 ft. drives; 150 ft. cross-cuts. Big Eeef Cross-cut—24ft. rises; 70ft. winzes; 328 ft. cross-cuts. A;10-stamp mill is to be erected in the vicinity of the mine when the necessary excavation is completed; and, as the County Council has formed a road from the flat to the battery-site, machinery can now be conveyed there. The quartz will be transported to the mill by means of a wire tramway. A considerable quantity of ore is in readiness for crushing, and, as the reefs have hitherto yielded very rich stone, good returns may be expected. An average of thirty men are employed in this mine, the area of which is 26 acres 2 roods 2 perches. Kapanga District. Kapanga Mine. —Owners, Kapanga Gold-mining Company (Limited). —This mine comprises an area of 99 acres 3 roods 27 perches, and is situated within one of the richest and most productive portions of the Coromandel district. Work has been vigorously carried on during the year. The shaft has been further sunk to a depth of 906 ft., and a level opened at 900 ft. Boring with the diamond drill was carried on below the 800 ft., but, on reaching a depth of 198 ft. below that level, it was found that when soft rock was pierced the hole filled, and boring had to be discontinued. It has now been determined to continue sinking the shaft to a depth of I,oooft. At the 800 ft. level a cross-cut was put in and several reefs cut, ventilation being obtained whilst driving by means of a water-blast from a pipe at the shaft. A large amount of work has been done in opening blocks in Scotty's and Kapanga Eeefs, and stoping has also been carried on. The future prospects of this mine are very encouraging. The exploration of fresh country in the vicinity, where large yields of gold have been met with in the past, and the penetration by the shaft in sinking of an entirely new floor of country containing the best indications of gold, is calculated to yield the most satisfactory results. The following report by Captain Argall will show the amount of work done during the period:— "The most important work done during the year was in connection with the diamond-drill as a means of testing the country below the bottom of the shaft. At the latter end of the previous year an engine was erected, and the shaft tubed to the 800 ft. level, when boring was commenced and continued for 198 ft. below the shaft. For the first 38ft. we passed through the same classes of rock as in sinking the shaft—viz., hard andesite; below this point we came upon the decomposed andesite, which is the recognised gold-bearing strata, often carrying heavy deposits of the precious metal. This class of rock has continued to the bottom of the bore-hole, and is highly mineralised. About 170 ft. below the 800 ft. shaft we intersected a reef about 7ft. wide, carrying gold, which by the character of the country around must prove a very productive reef. This view is supported by the fact that while sinking from the 600 ft. to the 800 ft. a complete network of stringers was cut through, and these in all probability will strike the reef above referred to, in which case the shoots of gold should be. very rich. We experienced no difficulty with the drill while boring through the hard andesite, but as soon as the decomposed andesite was met the hole commenced to fill in. We then tubed the hole for 113 ft., and started to bore with a 3in. drill; but after a short distance had been bored the filling-in process again troubled us, and, although various efforts were made to overcome the difficulty, we did not succeed, and were compelled at last to give over boring. The results obtained, however, were such as to induce the company to carry the shaft down to a further depth of 200 ft., which will make, when complete, a total depth of I,oooft. Following the decision of the company, we at once commenced sinking, and have accomplished 106 ft., the indications being such as to lead us to expect good results to follow. At the 800 ft. level a cross-cut west has been driven, with the intention of intersecting the supposed junction of Scotty's and the Kapanga Eeefs. The countryrock for the entire length of this drive is blue andesite, mixed with jasper, and carrying a little pyrites. While driving, and when 50ft. from the shaft, we intersected the reef cut in 700 ft., which is sft. wide, composed of quartz calcite and pug, and carrying well-defined walls, bearing 25° west of north, underlying to the south-west at an angle of 65° from the horizon. At 200 ft. from the shaft another reef was cut, about 10ft. wide, its composition being quartz and pug mixed with country-rock carrying good walls and bearing north-east 15°, dipping west about 45° from the horizon. A third reef was met, running north and south, dipping to the east 10° from vertical, and 9ft. wide, composed of solid quartz highly mineralised. About 15ft. west of this reef a strong lode was met, 2ft. wide, dipping west about 20° from vertical, and bearing 20° east of north, having a masterly appearance, with well-defined walls of quartz and pug, carrying a little gold. Besides these reefs, several small branches were met. The lode mentioned is in all probability the Kapanga Eeef, with its underlie changed, and in order to determine this point a rise is being put up to the 600 ft. cross-cut, which will not only settle the question but will be the medium of obtaining good ventilation, and at the same time afford additional exit for the miners.

" During the year a considerable amount of dead work has been done in opening up blocks on Scotty's and Kapanga Eeefs. A fair amount of stoping has also been accomplished. We have commenced to rise above the 500 ft. level on Kapanga, which is a fine body of stone, about 20ft. thick, and the country-rock is everything that can be desired as a gold-bearing rock. It is our intention to carry this rise to the 420 ft., where rich ore was found. It was from this level we began