CASSIAR MINE
Mine

During the year, 741,651 tons of ore were mined, of which 635,577 tons were treated in the rock
rejection plant to eliminate 152,994 tons of rock. The untreated balance of 106,074 tons was principally
selected high grade ore which is not amenable to this form of concentration. The resulting 482,583 tons
of concentrate and 106,074 tons of untreated ore were delivered to the mill, 451,837 tons by tramline and
136,820 tons by truck.

A total of 2,828,327 tons of waste was mined and removed from the orebody at a cost of
$2,307,866. It is the company’s accounting policy to capitalize the cost of waste removal. The waste
is related to sections of ore released for mining by its removal, and the cost is apportioned accordingly.
As the ore is mined from a “section” or “mining phase”, the appropriate proportion of waste removal is
written off as a part of the ore mining cost. On this basis, the waste charge against the ore currently being
mined is $1.68 per ton. Future operating conditions and new blasting techniques suggest the possibility
of steepening the walls of the pit. This would have the effect of reducing the amount of waste that must be
removed before a “section” or “phase” of ore is released for mining, and of reducing the amount of money
tied up in mine development at any given time. Experiments are currently underway to determine if this
method is feasible.

The overall mining costs were higher in 1968 than in 1967 as a result of a relatively constant plant
overhead being applied against reduced tonnages of ore and waste. However, productivity was good and
direct unit costs were maintained at a satisfactory level despite an increase in the cost of both labour and
materials.

Mill
The mill treated 576,040 tons of ore and concentrate and produced 75,742 tons of fibre. Some

additional equipment was installed to improve the recovery of the spinning grades. The traditional high
quality of the fibre was maintained.

Ore Reserves

The probable ore reserves within the presently planned pit limits and to a depth of 340 feet below
the lower adit are 25,000,000 tons. No diamond drilling or other exploration work was done during the
year, but a reassessment of the talus ore available resulted in a reduction of approximately 250,000 tons
previously included in the reserves.

Training Programme

There was a marked reduction in the turnover of labour. It is felt that the training programme,
in addition to improving the work standards, played a significant part in this reduction.

CLINTON MINE

As noted in the last Interim Report to the Shareholders a great deal of operating time was lost
during the first six months due to start-up problems, many of which were associated with the extremely
cold temperatures. During the second half of the year, the plant operated very efficiently and costs
approximated those budgeted.

The performance of the plant during the protracted period of severely cold weather experienced
from November 1968 through February 1969 indicates that the problems which arose in the same period
a year earlier have been substantially overcome. A few areas remain in which corrective measures have

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