Capital expenditures for the year 1973 are summarized as follows:

WHITEHORSE
& NORTH
CASSIAR MINE CLINTON MINE VANCOUVER
Rlantrand@E quipmentaee yaa ene srieae rr eee $2,922,490 $ 578,376 $ 67,344
WiastewRemovaltss-=-\ nee cement nae ene ' 4,365,630 4,873,274 —
IDWS ONIN. bog ee soso bbe od eo ane ae ceee 74,316 277,243 —
$7,362,436 $5,728,893 $ 67,344

The Cassiar Mine in 1974 will be subject to additional taxes under the new British Columbia
Mineral Land Tax Act. Regulations have not yet been published and hence the assessment and rate of
tax applicable under this Act are still unknown. Under the Act, notice of assessment must be given
taxpayers prior to May 1, 1974. Shareholders will be advised in the event that the increase in taxes
proves to be substantial.

Mining in the footwall zone will be substantially completed during the third quarter of 1974 and
thereafter a better grade of ore will be availabie to the mill. This and the measures described above to
improve the metallurgical efficiency and to substantially reduce operating costs, along with improved
prices for the company’s products, should result in a return to a more acceptable level of profit.

SALES

Fibre sales from both operations in 1973 totalled 218,121 tons valued at $49,611,809 compared
with 202,296 tons valued at $45,034,633 in 1972. Cassiar fibres accounted for $3,106,805 of the
increase and the Clinton fibres for $1,470,371. Of the total sales increase of $4,577,176, $2,194,600
was accounted for by a price increase.

During the latter half of 1973 the market became strong and at the year end it appeared that
this condition would continue through 1974. It is difficult to predict at this time what effect the oil
shortage will have on future demand.

Due to increased costs the sales price of all grades of Cassiar and Clinton fibres was increased
by 15% effective January 1, 1974. At the year end 13,500 tons of 1973 commitments remained to be
shipped in 1974 at 1973 contract prices.

CASSIAR MINE

Mine

During the year 1,127,811 tons of ore were mined, of which 1,113,906 tons were treated in the
concentrating plant to eliminate 273,865 tons of rock. The untreated balance of 13,905 tons was high
grade ore which is not amenable to this form of concentration. The resulting 840,041 tons of concentrate
and 13,905 tons of untreated ore were delivered to the mill, 489,359 tons by tramline and 364,587 tons
by truck.

A total of 4,009,927 tons of waste was removed from the orebody at a cost of $4,365,630. The
waste is related to sections of ore that will be released for mining by its removal, and the cost is
apportioned accordingly. As the ore is mined the appropriate portion of waste removal expense is
written off as a part of the current ore mining cost. On this basis, the waste charge against the ore
mined in 1973 was $3.50 per ton and the waste charge against the ore to be mined in 1974 will be
$4.00 per ton.

Mill

The mill treated 899,228 tons of ore and concentrate and produced 108,479 tons of fibre. The
recovered grade of the ore mined was 8.70% (excluding AZ) compared to 9.85% in 1972. A wet

PaGE Four