= San - Significant ___ Accounting Policies See The: financial statements have ~ been prepared on the historic cost basis in accordance with ac- - counting principles generally ac- cepted in Canada and conform in all material respects with Inter- - national Accounting Standards adopted by the International Ac-- - counting Standards Committee. _ The accounting policies of ; ‘significance to the Sonny are as follows: - : PRINCIPLES OF CON SOLIDATI ON The consolidated financial state-_ ments include the accounts of the - Company and its subsidiary companies. The operations of _ the subsidiaries are included in — the accounts from the date of acquisition. Substantially all of the oil and gas _ exploration and production anda significant amount of the mining exploration and development is conducted under joint venture agreements. The Company's pro- portionate interest in the assets and liabilities and revenues and expenses of such ventures is in- cluded in the accounts. The active subsidiaries, all of which are wholly-owned, are as ~ follows: Brinco Mining Limited Brinco Oil & Gas Limited Sharondale Corporation INVENTORIES AND MINE SUPPLIES ~ Asbestos fibre and ore stockpiled are valued at the lower of cost. ‘determined on a first-in, first-out basis and net realizable value. Gold concentrate is carried at the = ons of cost, determined on a first- OPERATING» ___ Asbestos ee COal reser: Oil and gas — ~ Corporate — _Unamortized waste __ removal costs (asbestos) a Property Plat and Equipment in, first-out basis, and net realiz- able value less amounts received _ in advance pending final settlement. _ The Company does-not hold in- ventories of coal. Mine supplies are valued at the lower of cost, princi- pally average cost, and replacement cost. MINERAL EXPLORATION - Exploration expenditures and costs related to the investigation of possible investments in mineral resource properties are charged to earnings as incurred, net of reco- veries from joint venture partners. FUTURES CONTRACTS The Company enters into futures contracts for the sale of gold and currencies as a hedge against gold price and foreign exchange fluctuations. These contracts are not recorded in _ the Company's accounts except for deposits required. PROPERTY. PLANT AND EQUIPMENT MINERAL RESOURCE PROPERTIES Development and preproduc- tion expenditures on mineral resource properties, net of recoveries from joint venture partners, are capitalized pro- _ viding the properties are con- _ sidered to be of value to the Company. When the property achieves commercial production volumes, costs are charged to earnings using the unit-of-produc- tion method based on estimated reserves. In the event of aban- — donment or disposal of such properties, the resulting gain or loss is charged to earnings. OIL AND GAS PROPERTIES — Expenditures on oil and gas pro- perties are accounted for using the full cost method whereby all costs relating to the SeQeee for and development of oil and gas reserves are capitalized. The costs of such properties are charged to earnings using the unit-of-pro- duction method based on estimated proved reserves. PLANT AND EQUIPMENT Expenditures for plant and equipment are capitalized in the property accounts. Depreciation of oil and gas plant and equipment is charged to earnings using the unit-of-production method based on estimated reserves. Mine plant and equipment is charged to earnings over its physical or ~ economic life using the unit-of- production and the straight-line methods of depreciation. LONG-TERM INVESTMENTS Long-term investments are recor- ded at cost and the related income is recorded when received. In the event of a permanent decline in value, the investment is writ- ten down to estimated realizable value and the loss is charged to earnings. TRANSLATION OF FOREIGN CURRENCIES The accounts of the Company's foreign subsidiaries and assets and liabilities arising in foreign currencies are translated into Canadian dollars on the following basis: current assets and current liabilities at the rate of exchange in effect at the end of the year: revenue and expense items at the average rate of exchange for the year; non-current assets, related depletion and depreciation and non- current liabilities at exchange rates applicable at the time of relevant transactions. Gains and losses on currency translations are included in the determina- tion of earnings. Accumulated depletion and Cost ___depreciation Net Net ‘ {in thousands) $116807 $61,611 $ 55,196 $ 57,429 69,051 1,894 CEST 6,592 72,871 11,259 61,612 62.680 733 329 404 452 si99den Ss 127,153 75,093 | 124,369 39,018 37,210 - «5,792 18.803 - 2,006 472 - 8,102 8.366 mes. 0429 9,413 - ~ 271 - 25,327 37.325 $188,714 $201,688