a Expenditures on the Pyke Asbestos prospect in New Zealand in the amount of $703,410 have been written off in the 1974 accounts although discussions with the optionors are still in progress with regard to further participation. To date no assessment has been received pursuant to the British Columbia Mineral Land Tax Act and sufficient information is not available to make a precise determination of the Company’s liability thereunder pertaining to its 1974 operations. The provision of $200,000 in the financial statements is considered adequate. Capital and deferred expenditures for the year 1974 are summarized as follows: Whitehorse an Cassiar Mine Clinton Mine Vancouver Plant-and*Equipment $ 8,932,179 $ 645,574 $ 466,188 WIG IRON o 55 coancoeecn ae obessbuoe 5,955,412 5,431,123 — IDENSIOINGNE cccuccasoeusoeovousdaousax 60,962 183,941 — $14,948,553 $ 6,260,638 $ 466,188 At the Cassiar Mine the electrification of the pit is complete, with the exception of two drills. A new drill, an 11 cu. yd. shovel, and six 75-ton trucks were acquired and were fully commissioned by the year end. A second drill, an 11 cu. yd. shovel, three 65-ton trucks and six 85-ton trucks will be put in service on the accelerated waste removal programme during 1975. This equipment will be leased. The new equipment should substantially decrease the unit cost of mining both ore and waste, and improve the difficult maintenance situation at the mine. The new dryer was commissioned in 1974 and the new tramline and concentration plant will be in operation by mid-1975. The total cost of this phase of the plant modernization is now estimated at $12,700,000 of which approximately $7,950,000 had been expended by the year end and approximately $4,750,000 will be expended in 1975 to complete. Additional capital expenditures under consideration for 1975 include modifications and additions to the plant and tailings disposal system and expansion and improvement of the townsite including additional employee housing will aggregate approximately $5,800,000. At the Clinton Mine $350,000 will be spent in 1975 on equipment replacements and plant improvements. SALES Fibre sales from both mines in 1974 totalled 183,982 tons valued at $53,187,426 compared with 218,121 tons valued at $49,611,809 in 1973. The increased amount realized per ton of fibre in 1974 reflects the effect of three price increases. The sale price of all grades of Cassiar and Clinton fibres was increased by approximately 20%, effective January 1, 1975. There remained to be shipped at the year-end prices, 16,346 tons of fibre to complete the 1974 sales commitment. Cassiar fibres accounted for $29,960,045 of the total sales and Clinton fibres for $23,227,381. The market continued to be strong during 1974, and it appears that this condition will continue through OS: ENVIRONMENTAL CONTROL A new department has been created within the company to deal with environmental affairs. The department is centred at the Cassiar Mine, and is dealing with environmental matters at both mines. Throughout the operations strong emphasis is being placed on the continued improvement of environ- mental conditions. PAGE Four