Outlook

In 1985, shipments of Canadian asbestos fibre are likely
to be similar to those achieved in 1984; also purchase
commitments for Cassiar fibre in 1985 are in line with
those experienced in 1984, though prices have continued
to deteriorate and will remain severely depressed until
the industry rationalizes its production capacity.
Consequently, the dollar value of asbestos sales will
likely be lower in 1985 than in 1984; however, this decline
should be offset, in part, by the lower minesite costs
anticipated for 1985. For the longer term, ore sources
close to the Cassiar mine, will continue to be evaluated
with the objective of extending mining operations beyond
the limits of the existing open pit. Whether this is
possible will be a function primarily of the asbestos
market.

While the results from the public inquiry into the Quinsam
coal project were very encouraging, the development of
the project will depend on improvement of the steam coal
export market.

The operating results achieved by Brinco Oil & Gas
Limited are expected to be similar to those achieved in
1984. However, a more aggressive exploration and
development policy will be required to arrest the reserve
decline experienced in 1984.

Although the Company’s financial condition improved in
1984, the results attained are unlikely to permit a
resumption of dividends on the A and C Preferred Shares
in 1985 and, given the Company’s deficit position,
redemption of any of the Preferred Shares Series A cannot
be expected during 1985. For the longer term, the
Company’s ability to retract the Preferred Shares Series A
will depend, principally, on a significant improvement in
the asbestos market.

Acknowledgements

Notwithstanding the difficult conditions which affected
the mineral industry in 1984, management of the Brinco
Group has achieved a number of significant improvements
during the course of the year; at the minesite, in the
marketplace, and a reduction in general and administration
costs, while still maintaining an active program of
evaluating other opportunities for extending or

expanding the activities of the Company. On behalf of the
Board of Directors, I would like to extend my appreciation
to all those concerned.

We A, S

Hugh R. Snyder
President and Chief
Executive Officer

April 19, 1985