Brinco Mining Limited

Product Liability Litigation

Brinco Mining Limited continues to be named along with
other asbestos producers in U.S. legal actions in which it
is alleged that the producers are liable to individuals who
have contracted disease as a result of exposure to
asbestos, chiefly in manufacturing plants and in the
handling and use of asbestos fibre products. Brinco
Mining Limited has also been named in several actions in
which damages are claimed as a result of installation of
asbestos materials in certain public buildings. Brinco
Mining Limited denies such liability and is continuing its
policy of settling personal injury cases where it is
considered advantageous for the company to do so and is
defending all property damage actions which have been
brought against it.

As a result of Brinco Mining Limited’s selective
settlement strategy and court-imposed delays pending
further developments in Manville Corporation’s petition
for relief under Chapter 11 of the U.S. Bankruptcy Code,
none of the cases in which Brinco Mining Limited is
named a defendant went to trial during 1984. One
personal injury case went to trial in January, 1985 but that
case was settled before it went to the jury. The outcome
of Manville’s petition under the Bankruptcy Code and its
eventual impact on Brinco Mining Limited and other
asbestos producers is not expected for several months but
increased litigation activities are anticipated in 1985.

Substantially all of Brinco Mining Limited’s defence costs
in 1984 were paid for by its major insurer pursuant to an
agreement whereby that insurer undertook the defence of
actions based on exposure to the company’s asbestos at
any time during its policy periods between 1955 and 1974.

Negotiations are continuing in an attempt to settle the
company’s claim against its insurers for indemnification
of settlements and judgments in the personal injury
claims. Brinco Mining Limited held policies of insurance
covering asbestos-related bodily injury until 1975.

Brinco Mining Limited was insured under other policies
of insurance in the period 1975 to 1983 which exclude
coverage for asbestos-related bodily injuries but, like the
prior policies, provide coverage for asbestos-related
property damage claims. Discussions are being held with
all of the Company’s primary insurers with respect to this
coverage.

Brinco Group

BRINCO GROUP —
MINERAL EXPLORATION

During 1984, Brinco Limited participated in a program
organized by C.M.P. 1984 Mineral Partnership and
Company, Limited under which a total of $1.5 million was
made available and expended by the Brinco Group on
Canadian mineral exploration activities, in return for the
issuance of 411,353 common shares from treasury of the
Company.

The availability of the exploration funds derived from the
C.M.P. agreement enabled Brinco Limited, in association
with Brinco Mining Limited, to expand its mineral
exploration programs across Canada and, during the latter
half of 1984, several gold and base metal exploration
programs were initiated and properties acquired. In all,
the Brinco Group participated in eighteen exploration
projects, the major ones being located in Newfoundland,
Quebec, Ontario and British Columbia. Expenditures of
$1.68 million by Brinco on these projects provided
exposure through joint venturing to exploration activity
totalling $3.37 million overall.

Geological reserves have been indicated at two locations.
In Newfoundland, on Pilley’s Island, exploration work
directed toward definition of volcanogenic precious and
base metal mineralization under a joint venture with
Getty Canadian Metals, Limited resulted in the discovery
of a massive sulphide deposit in 1984 with a potential for
300 000 tonnes of 4 percent copper, 1 percent zinc and 25
grams per tonne silver. The deposit is open downdip and
further drilling is planned in 1985. On the Jason
silver-zinc-lead deposit at MacMillan Pass in the Yukon,
Brinco Mining Limited has a 21.1 percent joint venture
interest. Geological reserves are 13.9 million tonnes
grading 13.6 percent combined zinc-lead and 79.5 grams
per tonne silver. :

Under terms of an agreement with C.M.P. 1985 Mineral
Partnership and Company, Limited, a total of $3 million
will be made available to the Brinco Group in 1985 for
expenditures on Canadian mineral exploration activities
in return for the issuance of Brinco Limited common
shares at a premium over market. These funds will be
expended on further exploration of the McDame deposit
($2 million) and for continued investigation of other
mineral properties.