4. Long-term Investments _

1981 1980.

(in thousands) ©
Portfolio Investment $15,529
Investment in U.S. oil
and gas venture
Brinco 1981 Energy
Program

3,642 ae
clas aes oe
$22,171

Portfolio Investment
The portfolio investment has a ices
market value of $10,786,000 (1980-

$2,995,000). The Company does not believe
that the quoted market value of the long- —

term investment represents a permanent
decline in value. wus
Investment in U.S. Oil and Gas Venture

In 1981 the Company acquired an
interest in a U.S. venture which is
conducting a five year program for the
accumulation and development of oil and
gas reserves. Under the terms of the
venture, the Company is committed to
make contributions of U.S. $3,000,000 for
the years 1981 to 1983, inclusive. The
Company has the option to continue its -
participation in the program for 1984 and
1985. The possible commitments arising
out of the exercise of this option cannot be
determined until the date of exercise. _
Brinco 1981 Energy Program

The Company is the general partner of
the Brinco 1981 Energy Program, an oil and
gas exploration and development limited
partnership which during 1981 sold 5,219
units to third parties at $1,000 per unit.
Commencing in 1984, any limited partner
may require the Company to offer to
purchase all or any of their units at a
purchase price related to the fair market
value of each unit at the time of purchase.
The maximum number of units that the
Company is obligated to purchase in any
one year is 1,000.

5. Long-term Debt

A bank term loan in the amount of
$70,000,000 has been received from a
Canadian Chartered Bank. The loan is
repayable in equal consecutive semi-annual
payments commencing September 15,
1983 and ending March 15, 1991 (subject
to the productive life of the Cassiar open

28

$3,059
by a first fixed and floating charc

$3,059

: Pit) The loan bears interest a
- various money market rates.

time to time for Bankers acce ta

4 prime Canadian or U.S. dollar

L.LB.O.R. loans. The indebtedness
assets of the Cassiar Resources

g Brinco Mining Limited.

_ Interest on ahenn dene e

_ 1981 amounted to $7,277,000.

costs of $306,000 were capitali
development and peepee
expenditures in 1981. .

6. Income and Mining Taxes
and Extraordinary Item —

As a result of the amalgamation
Brinco Mining Limited and Cassiar —
Resources Limited it was determine
there would be sufficient taxable
the amalgamated company to ful
the unclaimed income tax deducti
Brinco Mining Limited, the benefit
was previously not recorded. Accordingly
tax benefit of $1,100,000 relating to:
unclaimed deductions has been recog

_in the accounts of the Company: as an
extraordinary item.

The 1980 extraordinary item arose
a reduction in income taxes due to th
utilization of unclaimed deductions ex
in prior years and the application of prior
years’ losses.

The Company and certain subsidiaries
have losses available for carry- forward
which no recognition is given tothe
possible future income tax benefits in t
accounts. These losses approximate
$3,700,000 and are available to offset .
future income for tax purposes and expi
in taxation years to 1986 in Canada and —
1996 in the United States. The tax ben
resulting from the utilization of these
losses will be recognized as an
extraordinary item in the years of
utilization. In addition, the Company and
subsidiaries have unclaimed earned
depletion allowances which are available
deduction from future resource profits.

Deferred income taxes relate primarily to
Brinco Mining Limited and represent the
tax reductions for expenditures on mine
development, exploration and pepe
deducted in the determination of taxable -
income but not yet charged to earnings.