Preferred Shares

(a) At the option of the holder, each Preferred Share
Series A is convertible into 0.55 of a Common Share. At
the option of the Company, the Preferred Shares Series A
are redeemable if the market price of the Company’s
Common Shares is more than $15.00.

The Company’s legal counsel have advised that the
provisions of the Newfoundland Companies Act prohibit
the redemption of Preferred Shares Series A as long as the
Company is in a deficit position. The Company remained
in a deficit position throughout the year and no redemption
of Preferred Shares Series A was possible during 1984.
Also, given the financial condition of the Company, the
Board of Directors did not declare dividends on the
Company’s preferred shares during 1984, and the dividend
normally payable to holders of preferred shares on March
31, 1985, was also omitted. The obligation continues to
offer to redeem all of the outstanding Preferred Shares
Series A when it would no longer be contrary to applicable
law to do so.

(b) At the option of the holder, each Preferred Share
Series C can be converted into 0.55 of a Common Share.
On November 6, 1985, the conversion of any remaining
Preferred Shares Series C to Common Shares will take
place. Should the weighted average market price of the
Common Shares for any ninety consecutive days after
November 6, 1983 and prior to November 6, 1985 be
more than $13.00, the Preferred Shares Series C will be
converted at the end of such ninety days.

(c) Each issued and outstanding Preferred Share Series A
and Series C is entitled to a fraction of a vote equal to
the conversion basis of such shares into Common Shares.

(d) Dividends on the cumulative Preferred Shares Series
A and Series C are payable quarterly on the last days of
March, June, September and December of each year.
The dividend payable in December, 1982 and all the 1983
and 1984 dividends for a total of $8,830,500 are in
arrears.

Common Shares

In 1978, 9,973,067 Common Shares purchased for $7.07
each, pursuant to the 1974 tender offer to shareholders,
were deemed by legislation to be a special class of
Common Shares designated as Class A. If these shares are
reissued, they revert to their former status as Common
Shares. To date 2,210,435 such shares have been
reissued.

During the year, 377,073 Common Shares were issued
with a value of $1,374,997 and these funds were made
available for Canadian mineral exploration activities under
a program organized by C.M.P. 1984 Mineral Partnership
and Company, Limited. The Company has entered into an
agreement for participation in a similar program in 1985
under which the Company will issue common shares for $3
million at a price to be determined on April 24, 1985,

and will use the proceeds for Canadian mineral exploration
activities.

7. Stock Options

Under the Company’s stock option plan, 700,000
Common Shares have been set aside for issuance. At
December 31, 1984, options were outstanding on 99,500
shares (including 17,500 to officers) at prices ranging from
$8.55 to $9.45 per share exercisable at various dates to
1986. During the year no options were exercised.

8. Extraordinary Items

The Company has reassessed its non-operating gold
property and has determined that the property’s book
value should be written-off. This action has been taken
because of the depressed price of gold and the likelihood
of no active development taking place in the foreseeable
future.

1984 1983

(in thousands)
Write-down of mineral
resource properties,
net of deferred taxes
of $2,970,000
(1983-$3,450,000)

$ 4,850 $14,440

$ 4,850 $14,440

During 1982, Brinco Mining Limited acquired the right
to pursue an old insurance claim connected with the San
Antonio gold property. A judgment has been entered by
the court in favour of the Company in the amount of
approximately $2,400,000 plus interest of $1,100,000.
The judgment has been appealed and no amount has been
recorded in the accounts for this claim.