Your directors beg to hand you their second half-yearly report and balance
sheet.  At the close of last half-year the machinery for the mine had just
been shipped to Fremantle, but owing to the prevailing drought at that
time it was found impossible to transport same to the mine.  To enable the
Company to meet the heavy cost of transporting the machinery, the
directors declared a call of sixpence per share in April, but the call was
so poorly responded to by the shareholders that when in the month of May
abundant rains fell and opened up the roads, the directors were unable to
have the machinery transported for lack of funds.  The directors were
further obliged for the same reason to apply for exemption from the labor
[sic] conditions of the lease, which was granted, and work ceased on the
15th May until 29th August, when work was again resumed.  Notwithstanding
the financial position the directors retained the highest opinion of the
value of the property, and the mine manager having assured the board that
payable stone was available if the machinery had been on the mine, your
board determined to further test the mine by crushing a quantity of the
stone.  The mine manager accordingly arranged to have 100 tons crushed by
the Exchange Company's Huntingdon mill. [sic] with the very satisfactory
result of 206 oz. 13 dwt. The shares forfeited for non-payment of the
first call were sold by auction, but the price obtained was
unsatisfactory.  On the result of the crushing being ascertained the board
determined to resume work and erect machinery, and to enable this to be
done declared a second call in August.  A contract has been entered into
for the transport of the machinery from York to the mine, and the whole
must be delivered within three months under a heavy penalty.  It is
expected that the machinery will be delivered before that time, and be at
work before the close of the year.  The Government of Western Australia
have sanctioned the construction of a new road to the field, and the work
is now in progress.  When completed this road will very materially reduced
the cost of cartage to the field.  Captain Oats has, with the consent of
the board, assume the management of Fraser's gold mine while retaining his
position with this Company.  This arrangement will, it is believed, be in
no way adverse to the interests of this Company.  On the contrary, Captain
Oats believes that the information gained in the working of Fraser's mine
will supply valuable data for the working of this property.  Captain Oats'
report for the half-year is attached hereto."[sic – no opening quotes]

The report of Captain Oats was an epitome of the reports furnished by him,
from time to time, during the previous half-year, of work done at the
mine, the more salient portions of which have already appeared in these
columns.  In concluding his report, the mining manager says: "I wish here
to remark that the water and other difficulties are not greater than might
be expected on a new field, and with care and perseverance can be
overcome.  I have no hesitation in saying (after nearly a year's residence
on the field) that with proper machinery half an ounce of gold to the ton
should pay the working cost.  I have always had a high opinion of the
mine, which only requires a sufficient outlay judiciously spent in
development to give good returns, and, supported by you, I will do my best
to bring about this condition."

The balance sheet for the year ended September 8th showed on the Dr. side
and capital account of £65,811 10s 11d, after making certain deductions on
account of uncalled capital, unpaid calls, and loss on forfeited shares;
and an item of "sundry creditors £404 16s 11d, bringing up the total to
£66,216 7s 10d.  On the Cr. side were £62,000 for mine purchase and bonus
to applicants for subscribing shares; £998 13s. 9d. machinery; £731 5s.
estimated value of gold lodged in bank; £418 5s. 6d. bank balance; £2065
3s. 7d. profit and loss; making the total £66,216 7s. 10d.  The profit and
loss account showed an expenditure of £2799 8s. 7d.,for working the mine
and other expenses of management, against which was set the ...

[Note — clipping finishes at this point.  The remainder appears to have been torn
off and is missing]