Seeking revenge against Matt for supposedly abandoning her, his old flame returns home to Paterson's Ridge. Luke strikes gold and becomes a serious threat to Matt.
George Elliott, the banker, has a heart attack and dies just as his daughter Anita Hargraves is returning from San Francisco. Anita wants revenge on Matt for breaking her heart and forces her brother Herbert to call in the mortgage. Luke finds a gold vein in Alec's Foley and employs Chen as his foreman.
Matt's old flame Anita Hargreaves returns to town after 25 years away just as her father suffers a heart attack. Matt is dumbfounded by her hospitality towards him - and Kathleen's coldness. A bitter Anita forecloses on Matt's loan, only to learn that she had not been jilted by Matt years ago, but tricked by her father. Luke strikes gold.