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Jade from the Cassiar mine.

Coal from the Loftis mine.

The Loftis coal mine was acquired in
December 1980 and plans were
implemented in 1981 to expand production
from 160,000 tons per year to 350,000
tons per year. The expansion project was
completed within budget, but production
was delayed because of a two and a half
month shutdown resulting from a strike by
the U.M.W.A. which affected the non-union

mines in the area. Reflecting the interruption

in production, coal sales from the mine
were 225,643 tons. Markets remain firm
for the high quality Loftis coal which is
sold largely to local industrial users with
some production directed to the export
market.

On Vancouver Island in British Columbia,
we have joined Weldwood of Canada
Limited as a fifty percent partner in
Quinsam Coal Limited. The Quinsam coal
deposits, located close to tidewater and
transportation facilities, contain more than
32 million tons of high volatile bituminous
steam coal.

We are currently undertaking
environmental and mine development
studies and are working closely with the
communities in the Campbell River region
on the development. Submission of the
results of these studies will be made to the
Government of British Columbia by
mid-1982 and a decision by the government
on this project is expected in the second
half of 1982.

In the Stellarton region of Nova Scotia,
under a lease option arrangement with the
Nova Scotia Government, Brinco together
with Suncor Inc. Resources Group of
Calgary is investigating certain sections of

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the Acadia and Scott seams in the Pictou
coalfields. Initial exploration results will be
available in early 1982 when a decision will
be made whether or not to proceed with
the next phase of investigation.

Mineral Exploration

During 1981 Brinco operated or
participated in fifteen exploration projects
across Canada of which six were major
programs. Total expenditures on these
programs was $9.7 million of which our
share was $1.9 million. Principal exploration
projects were in Labrador, central
Newfoundland and the Yukon.

Early in 1981 we and our partner Edison
Development Canada Inc., a wholly-owned
subsidiary of Commonwealth Edison
Company of Chicago, announced deferral of
the development of the Kitts-Michelin
uranium deposits in Labrador until
conditions improve in uranium markets. By
year end there was no significant change in
these markets. The partners maintain an
active interest in the project and a selective
exploration program continues.