CAssIAR ASBESTOS CORPORATION LIMITED

In the northeast anomaly, three additional diamond drill holes were completed in 1964
and along with the four holes drilled in 1963, indicate a zone of serpentine with a low fibre content.
Further work will be required to determine the importance of this showing.

The other anomaly southwest of the main orebody was explored by a series of nine vertical
holes at 200-foot centres to a depth of approximately 600 feet. These holes, together with hole
CS-6 drilled in 1963, have extended the main ore zone for a distance of 700 feet with an average
horizontal width of 400 feet, and it is open to the southwest. A step-out hole CW-1, located
1,100 feet west of CS-8, was drilled to a depth of 472 feet, at which point the hole was stopped
by caving. The last 122 feet of core was in ore averaging 7.5% fibre. The 350 feet of overburden
in the hole indicates that the orebody may flatten in its southwest extension and suggests that the
intervening zone could provide additional ore for open pit operations. During 1965, this very
promising possibility will be further explored with three diamond drills and several new anomalies
in the area will be tested.

In order to confirm the vertical continuity of the original 5,000,000-ton orebody, and to
relate diamond drill results to the bulk sampling done in 1958, the orebody was cross-sectioned
at 100-foot intervals with horizontal diamond drill holes from the underground drifts and cross-cuts
and three vertical holes were drilled from surface.

A preliminary estimate of the ore outlined to a depth of 100 feet below the adit and inclusive
of hole CS-8, is 12,300,000 tons, having an approximate value of $12.30 per ton of ore and a
waste to ore ratio of 2.4:1. The step-out hole CW-1 referred to above, indicates a good possibility
that this tonnage will be substantially increased by the 1965 drilling.

Detailed production planning is now underway, but the ultimate size of the plant and
production facilities will be governed by the results obtained in the summer of 1965.

KUTCHO CREEK ASBESTOS COMPANY LIMITED

A reconnaissance geophysical survey was carried out to outline the fibre-bearing serpentine
within the main ultrabasic intrusive in which this property is located. A diamond drilling pro-
gramme will be undertaken at some future date.

ACKNOWLEDGEMENTS

The staff and employees at the mine, in the Transport Division and at Vancouver are to
be commended for their excellent performance in cost reduction, and in maintaining a notably low
accident frequency record.

The Board expresses its appreciation of the loyal and efficient services rendered the company
by the employees, its staff and officers.

On Behalf of the Board,

F. M. CONNELL, J. D. CHRISTIAN,
Chairman. President.

Toronto, Ontario,
February 18, 1965.

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