When local mine Wheal Reath is closed violently by bailiffs, hundreds of miners, including Jim (Alexander Arnold), find themselves out of work and desperately poor. Ross, having repaired Nampara, now employs Jim as a farm-hand, and thinks to resurrect his family's mine, Wheal Leisure. He hopes to bring prosperity to the area again, but is advised against the venture by his banker and friend, Harris Pascoe, who does not believe he could find speculators in the current climate.
Meanwhile, Verity asks Ross to accompany her to a ball at the Assembly Rooms, where she meets Captain Andrew Blamey (Richard Harrington) and falls madly in love. However, Blamey is hiding a dark secret that he must tell her. Ross, with the help of mine captain Henshawe and willing investor Horace Treneglos, manages to convince Pascoe that Wheal Leisure is a viable business. But it is his intimate dance with Elizabeth that causes a stir at the ball and gives the other guests a reason to gossip.
Under George's influence, a jealous Francis decides not to invest in Ross' mine. Meanwhile, Ross must help Verity arrange a tryst with Captain Blamey after Charles discovered Blamey's scandalous past and forbids her from seeing him. Francis, spurred by his jealousy of Ross and angered by this fresh betrayal, challenges Blamey to an ill-fated duel. Ross is able to save Francis' life, but Charles blames Ross for the incident and will not forgive him. Elizabeth, however, is extremely grateful to Ross, revealing that she is pregnant with Francis' child.