1987
Financial
Statements

Auditors’ Report to the Shareholders

We have examined the consolidated balance sheet of Cassiar Mining Corporation as at
December 31, 1987 and the consolidated statements of cash flow, earnings and deficit for the
year then ended. Our examination was made in accordance with generally accepted auditing
standards, and accordingly included such tests and other procedures as we considered
necessary in the circumstances.

In our opinion, these consolidated financial statements present fairly the financial position of
the Company as at December 31, 1987 and the changes in its cash flow and the results of its
operations for the year then ended in accordance with generally accepted accounting
principles applied, after giving retroactive effect to the change in accounting for fibre
inventory and for pension costs, both explained in Note 2 to the consolidated financial
statements, on a basis consistent with that of the preceding year.

Chartered Accountants

Vancouver, Canada
February 5, 1988, except as to Note 15 which is as of March 4, 1988