On August 26 1855, the cutter and her crew were reported missing. The vessel left Papatiki, Stewart Island, on August 24, bound for some small islands at the entrance to Paterson Inlet. A moderate gale was blowing at the time, and on the following day a rudder, believed to be that of the cutter, was found at Fullers Point. It was supposed that the Champion, had capsized and foundered. The Bluff tug Ararua, was dispatched to search for the missing vessel, but failed to discover the cutter or the men who manned her.
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