Mill

The mill treated 1,447,863 tons of ore and produced 92,962 tons of fibre. The grade of the
ore milled was 5.37% and came largely from the lower grade footwall zone. The mining programme
has been re-designed to provide a more uniform recovery in the mill and it is anticipated that the
grade will improve during 1972.

The new CZ grade will be introduced to the market during the latter half of the year.

Ore Reserves

The diamond drilling programme initiated in 1971 will be continued in 1972. Approximately
50% of the footage will be in the main ore zone and the balance will be in exploratory holes in three
adjacent fibre bearing areas.

The results of the 1971 drilling indicate that the ore in the west end of the Bear Creek
extension is plunging more steeply than anticipated. Diamond drilling required to reach these depths
of 1000 feet or better has proven difficult and costly, and a method of exploring this possible
extension to the orebody will require further consideration.

It is not anticipated that the 1972 drilling will materially change the probable ore reserves of
the main orebody within the present open pit design. These reserves currently stand at approximately
18,750,000 tons.

TRANSPORT DIVISION

The Transport Division is now handling only the Clinton Mine production. The White Pass
and Yukon Route have completed the take-over of the Cassiar haul to Whitehorse, with the exception
of a limited tonnage that is being moved to Vancouver by the Pacific Great Eastern Railway from Fort
Nelson and Fort St. John, B.C. It is expected that new truck-trailer designs will be introduced into the
Transport Division fleet during 1972 to reduce costs.

KUTCHO CREEK ASBESTOS COMPANY LIMITED
No work was carried out on this property during the year and none is planned for 1972.

GENERAL EXPLORATION

The exploration of selected areas in British Columbia and the Yukon Territory will continue.
No showings of economic interest were found in 1971.

RESEARCH
The research programme continues to justify the expenditure involved.

ACKNOWLEDGEMENTS

The directors wish to acknowledge the loyal and efficient service given the company by the
staff and employees of all divisions.

On Behalf of the Board,

J. D. CHRISTIAN,
Chairman and President.
Toronto, Canada,
March 14, 1972.

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