DIRECTORS’ REPORT TO THE SHAREHOLDERS (Concluded)

The Company is defending each of these actions. Neither the existence of
liability, nor the extent of any possible damages, has been determined at this time
for any of the cases. Product liability insurance had been carried until 1975, butit has
been unavailable since then. The current sales agreements provide that Cassiar’s
customers shall warn their employees, agents, and customers of the possible
dangers involved in handling asbestos and shall provide them with safeguards
against those dangers.

Employee Relations

Increase in facilities for accommodating married employees and the improve-
ment in community amenities was continued during the year. At year end 60% of
the employees at the Cassiar mine were resident in family accommodation, while at
the Clinton Creek mine 35% of the employees were similarly housed.

The annual employee turnover at Cassiar for 1977 was 92% compared with
119% in 1976. At Clinton Creek, the turnover for corresponding years was 62% and
95%.

During the year six Collective Agreements were negotiated without any work
stoppage. All agreements currently in force have expiration dates around mid-year
of 1978.

In anticipation of the closure of the Clinton Creek mine in 1978, a tri-partite
agreement has been developed between the Corporation, the Canadian Mine-
workers Union, and Canada Manpower for the purpose of training and relocating
Clinton Creek mine personnel.

Management, Staff and Employees

It is our pleasure to acknowledge the contribution of all employees in the
continued improvement in operations and in the development of community spirit
at both mines. Special recognition is made of the co-operation and dedication of
employees and union at the Clinton Creek mine in the continued maintenance of
good operating standards with dwindling ore reserves.

On behalf of the Board

Pe”,

Nicholas Gritzuk
Chairman

ae ae Gas,

Peter Steen
President
March 30, 1978

1. Improved dust collecting equipment
and procedures have reduced the
incidence of airborne fibre in the
tramline discharge terminal.

2. The dining hall at Cassiar has been
upgraded. It serves over 1000 meals
a day.

3. During 1977 eighteen new
townhouses were constructed and are
now fully occupied.

4. The company has embarked on a
program to upgrade the single person’s
quarters. This program will continue
through 1978.

5. Fifteen new mobile homes were put
in place during the past year. Gradually
the community invades the surrounding
wilderness.

6. The new mobile homes involved the
construction of new streets and the
expansion of all of Cassiar’s townsite’s
services.