Preferred Shares

(a) At the option of the holder, each
Preferred Share Series A is convertible until
October 18, 1984, 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.

Unless contrary to applicable law the
Company shall invite tenders on or about
October 18, 1984 for retraction of the
Preferred Shares Series A at $5.50 each plus
accrued and unpaid dividends. Each year,
under a mandatory provision, the Company is
required to offer to redeem an amount equal
to 5% of the originally issued shares for $5.50
each plus accrued and unpaid dividends if the
defined market value of these shares is less
than par value. During the year, 110,301 shares
were redeemed under the mandatory provision
and 19 were converted to Common Shares.
The accrued dividend paid at the time of
redemption was $20,000. Because the
Company is in a deficit position, the Board of
Directors has determined that it would be
contrary to applicable law for the Company to
proceed with the redemption of 5% of its
outstanding Preferred Shares Series A which
would otherwise be redeemable at the
beginning of 1984.

(b) At the option of the holder, each Preferred
Share Series C can be converted into 0.55 ofa
Common Share. On November 6, 1985, the
conversion of the 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 be
more than $13.00, the Preferred Shares Series
C will be converted at the end of the 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 dividends for a total of $4,910,500

are in arrears.

Brinco Limited and Subsidiaries
NOTES TO JHE
(CONSOLIDATED
FINANCIAL
STATEMENTS

December Sih 1983

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. When
these shares are reissued, they revert to their
former status as Common Shares. To date
2,210,435 such shares have been reissued.

Under the Company’s stock option plan,
700,000 Common Shares have been set aside for
issuance. At December 31, 1983, options were
outstanding on 275,500 shares (including
112,500 to officers) at prices ranging from $6.25
to $9.45 per share exercisable at various dates to
1986. During the year no options were
exercised.

The Company has reassessed its mineral
resource properties and has determined that
because of the depressed market for uranium
and coal the carrying value of certain non-
operating mineral properties required
adjustment. Properties identified to be sold have
been written down to estimated net realizable
value. Properties where active development will
not take place in view of current and foreseeable
commodity market conditions have been
written off. The Company will continue to
maintain these properties in good standing and
maintenance costs incurred in 1984 and
subsequent years will be expensed.

Accordingly, the carrying value of these mineral
properties has been reduced by $17,890,000.
This has been presented in the consolidated
statement of earnings (net of deferred income
taxes of $3,450,000) as an extraordinary loss.

fT Se SSSSSSSSSSSSSSSSSSSSFMMMeeeee

1983 1982

ee

Write-down of mineral resource properties, net
of deferred taxes of $3,450,000

Write-down of Quebec asbestos property, net
of deferred taxes of $3,384,000

Write-down of gold property, net of

deferred taxes of $3,035,000

Loss on sale of portfolio investment
Write-down of ULS. oil and gas venture, net

of deferred taxes of $287,000

Write-down of Brinco 1981 Energy Program, net
of deferred taxes of $365,000

(in thousands)
$14,440 $ -
- 7,696

= 5,285
- 3,712

- 2,507

= 635
$14,440 $19,835