Results

Corporate

Revenues and net earnings before extraordinary items in
1984 were $78.4 million and $4.9 million respectively,
compared to $75.8 million and a loss of $5.6 million in
1983. After write-down of an extraordinary item of $4.9
million, earnings were $71,000. In 1983 extraordinary
items totalled $14.4 million and the loss was $20.1
million. The 1984 earnings take into account the
recovery from insurers of $6.1 million relating to product
liability litigation defence costs which had been incurred
in previous years. Earnings without this recovery would
have been $1.2 million net of tax before extraordinary
items and a loss of $3.7 million net of tax after
extraordinary items.

The net loss per share for 1984 was $0.22 after providing
for the extraordinary item which amounted to $0.28 per
share. The deficit at year end of $8.6 million is virtually
unchanged from that in 1983.

Including the insurance recovery, cash generated from
operations increased from $5.2 million in 1983 to $27.9
million in 1984 and total corporate debt of the Company
and its subsidiaries, net of invested cash, decreased from
$79.1 million at the end of 1983 to $51.2 million at the end
of 1984. The improvement, apart from the insurance
recovery, results from an increase in asbestos sales
tonnages, lower site operating costs per tonne of fibre
produced, improved results from Brinco Oil & Gas
Limited, reduction in general and administration costs,
and the disposal of non-contributing operations.

The extraordinary item charged against earnings reflects
the write-off of the remaining investment in the San
Antonio gold project following termination by Lathwell
Resources Limited of the joint venture agreement with
Brinco Mining Limited.

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.

A number of non-contributing subsidiaries, or assets
owned by subsidiaries were disposed of in 1984, including
the Loftis coal mine (owned by Sharondale Corporation),
the Company’s 60.13 percent interest in Abitibi
Asbestos Mining Company Limited and the Company’s
100 percent interest in Brinco Petroleum Inc. Funds
realized from the sale of the Loftis coal mine were offset
by outstanding obligations relating to the mine of an
approximately equal amount. Disposal of these
investments has eliminated the Company’s ongoing
holding costs and associated administration expenses. In
addition, the transfer of the management of Brinco Oil &
Gas Limited to Vancouver, with technical support from a
Calgary-based petroleum firm, has resulted in a further
significant reduction in general and administration costs.

The Company 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 to
the Company during 1984 for Canadian mineral
exploration activities, in return for the issuance of 411,353
common shares from the treasury of the Company. After
issuance of these shares the Company had 17,489,217
common shares issued and outstanding.

Although corporate debt was reduced by $27.9 million
in 1984, principal repayments on the Brinco Mining
Limited term loan were behind schedule at year-end.
Negotiations with the company’s bank have resulted in
an agreement in principle for conversion of the term loan
to retractable preferred shares of a subsidiary of Brinco
Mining Limited, with a retraction schedule which is
expected to be more appropriate to the company’s
current financial circumstances. The agreement in
principle is subject to a number of conditions, including
necessary tax rulings, and completion of mutually
acceptable documentation.