somewhat uncertain, we consider that any easing of the market that might take place will be of a
temporary nature. The overall demand for asbestos-cement products in housing, water supply and in
anti-pollution projects continues to grow throughout the world. Your company, producing quality
products from two mines, is in an excellent position to take full advantage of this situation.

LABOUR

Labour contracts have been negotiated with the United Steelworkers of America, Local 6536
(Cassiar, B.C.), Local 564 (Clinton mine, Y.T.) and Local 925 (Whitehorse, Y.T.) covering the period
December 1, 1967 to September 30, 1970. Wage rates will be increased substantially over this period.

CASSIAR MINE
Mine

During the year 1,029,474 tons of ore were mined, of which 800,679 tons were treated in the
rock rejection plant to eliminate 255,227 tons of rock. The untreated balance of 228,795 tons was
principally selected high grade ore which is not amenable to this form of concentration. The resulting

545,452 tons of concentrate and 228,795 tons of untreated ore were delivered to the mill, 511,665 tons
by tramline and 262,582 tons by truck.

Stripping operations continued at the pre-determined rate and 4,125,054 tons were mined at a
total cost of $2,801,594. Most of this waste lies above the orebody on the hanging wall side and is
removed in phases to free the underlying ore for open-pit mining. The ratio of ore to waste varies from
phase to phase. It is the company’s accounting policy to capitalize the cost of waste removal and to
write it off in the appropriate proportion for the phase from which the ore is being mined. The current
write-off is $1.68 per ton of ore mined.

Normal replacements of some of the mine and plant equipment were made and the whole was
maintained in good operating condition. Despite rising costs of labour and materials unit mining costs
remained at a satisfactory level.

Mill

The mill treated 756,787 tons of ore and concentrate at an average rate of 2,073 tons per
calendar day and produced 92,093 tons of fibre. Maintenance cost was slightly higher than in previous
years and is attributable to the continuous nature of the operation at the high production level of the
past two years.

Ore Reserves

No diamond drilling or other exploration work was done during the year and the probable ore
reserves within the presently planned pit limits and to a depth of 340 feet below the lower adit are
26,000,000 tons.

Training Programme
The training programme encompassing apprenticeship training for the trades and crafts and

learner training for the operating personnel has been well received and will be continued. Labour
turnover dropped by 18%.

PAGE FouR