2.0 INTRODUCTION AND DESCRIPTION OF CONCEPT

Cassiar Asbestos Corporation Ltd. currently operate two asbestos mines, one
at Clinton Creek in the Yukon Territory and the second at Cassiar, British
Columbia. Exploration activity is also taking place in a number of areas,
primarily the Kutcho Creek area some 60 miles north-east of Dease Lake,
British Columbia. In 1976, the two operating mines produced some 175,000
tons of asbestos fibre valued at over $78 million. Clinton Creek in 1976
provided some 64% of the total fibre tonnage and 57% of the sales revenue;
however, mineable ore reserves at this mine are only 3.8 million tons and
it is expected that these reserves will be exhausted in mid-1978. The clo-
sure of the Clinton Creek mine will alter the company's operations and it
will focus greater attention on its Cassiar mine and exploration prospects
in northern British Columbia.

The Cassiar mine was discovered in 1950 and has been a producing mine for
over 25 years. The mine normally produces over 100,000 tons of asbestos
fibre annually. Current and planned capital expansion projects of some

$50.5 million will increase the annual fibre tonnage to 130,000 tons 11 the
next 5 years .1/ Based on 1976 ore reserves mineable by open pit methods

(18 million tons) the economic life of the mine is another 20 years. The
mine supports a nearby townsite with a population of 1,500, of whom over

650 men and women earn their living mining and milling Cassiar asbestos fibre.

The transportation of asbestos fibre is an ongoing and continuous process.
Truck, train and ship transports are used to move container and palletized
loads of fibre to Vancouver for onward shipments to overseas markets.
Currently, the fibre is routed by truck from the Clinton Creek and the Cassiar
mines to Whitehorse in the Yukon Territory, where it is loaded on the White
Pass and Yukon Route railway system and transported to Skagway, Alaska. At
this Alaskan port, the asbestos is reloaded on container ships for furtherance
to Vancouver. A certain amount of fibre is also transported by truck to Fort
Nelson, British Columbia, where it is loaded onto the British Columbia Railway

1/ See Appendix A for expansion details.