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Cut No. 2. —The top stripping of this cut was commenced in the last month of last year. The country proved of a very mixed nature—large floating boulders being found right to the surface, with hard-pan and mixed clays intermixed. The stripping has now been completed and a start made with the bottom lift. The three machines are now being concentrated on this cut, and thus by carrying the work forward in a face instead of carrying on all cuts simultaneously water troubles and other difficulties will be largely overcome and more steady progress maintained. A ford for the machines and a footbridge giving access to this cut have been constructed. Cut No. 3.—The top stripping of this cut was completed during the period under review. This proved generally much more easily excavated, although in places large boulders and rubble wero encountered up to the surface. Cut No. 4. —Work commenced on this cut in August, after the line had been cleared of all bush and logs. This cut skirts the foothills, and consequently on the high side there is little room for depositing spoil. In order to find space for this spoil it was necessary to double-handle the material on the lower side. The work is well advanced and the already excavated spoil well removed from the edge of the cut. Now that the water-level at the lower end of No. 2 cut has been lowered and a start made on the bottom heading of that cut the machine handling this cut has been withdrawn and moved down-stream, as stated formerly. Plant. —The plant consists of three Bucyrus shovels convertible to drag-lines, seven air-com-pressors, two oil-locomotives, one Thornycroft 2-ton lorry, and a smithy and fitting-shop equipped with lathe and power-drill, &c. Compressor Plant. —The seven compressor units have given very general satisfaction, and only minor repairs have been required. The machines have been brought into the fitting-shop in turn for complete overhaul. The benzine-consumption is necessarily a big item of expense, but now that the work is in a position to be handled in a face these compressors will carry a more even load and the distributed costs will not be so severe. General. —The rock-excavation is proving very severe on the shovels, and the wear-and-tear is naturally great. The machines have all been thoroughly overhauled and weakened parts renewed, and are now in good working-order. As can only be expected, the cost of repairs and time occupied in overhauls will be much greater than on machines working in earth excavations. The machines— Bucyrus shovels convertible to drag-lines—are giving excellent results despite the fact that the excavations are of a particularly heavy nature. They are very flexible and adaptable to almost any conditions. Practically all repair works with the exception of castings are executed in our own shop on the works.

The following is a summary of the output of the steam-shovels for the different cuts : —

The approximate cost of excavation is ss. 3-7 d. per cubic yard. Works Expenditure. —The total expenditure for the year was £20,760, of which day labour accounted for £8,380. Mr. R. S. Logan, who was in local charge of these operations, resigned at the end of the year, and Mr. G. E. Tuck has now taken over control. The following operations were carried on under the authority of the Swamp Drainage Amendment Act, 1922 :— Mangawai Drainage. —The drainage of Black's Swamp, near Mangawai, was undertaken in order to enable the area to be worked in small areas for winning kauri-gum. Some 173 chains of main drain were constructed, of an average depth of 6 ft. In places the old stream was followed, whilst in others a new channel was constructed. Since the completion of this contract a deviation of the stream has been made in the lower reaches through a low sand-ridge, in order to improve the drainage higher up. The area tapped by the drain is now being worked by a large number of diggers, and from all accounts satisfactory returns are being obtained. The expenditure on the work was £1,758 17s. lOd. I have, &c, O. N. Campbell, The Under-Secretary for Lands, Wellington. Chief Drainage Engineer.

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1921-22. 1922-23. Totals to Date. Cut. Clay. Rock. Clay. Rock. — Clay. Rock. No. 1 .. No. 2 .. No. 3 .. No. 4 .. Falls .. Cub. yd. 6,040 3,400 560 Cub. yd. 5,260 1,150 140 Cub. yd. 1,826 23,475 14,350 10,118 680 Cub. yd. 11,837 2,190 1,060 4,010 2,510 Cub. yd. 7,866 26,875 14,910 10,118 680 Cub. yd. 17,097 3,340 1,200 4,010 2,510 Totals 10,000 6,550 50,449 21,607 60,449 28,157 i Grand total .. 88, 606