will be the strengthening of our team
with specialists in underground block
cave mining methods.

Wet processing can become an
important component in Cassiar’s long
term future. The new processing plant is
planned for operation on a pilot plant
scale in the second half of 1988. A
decision to expand the plant will be
dependent upon customer acceptance of
the product and the economics of
producing the fibre.

Cassiar has been a cost competitive
producer of high quality asbestos fibre
for 35 years. The Company enjoys a
prominent position in the world’s
asbestos business which it intends to
maintain.

Board changes

At the Annual General Shareholders
Meeting in June, a number of new
Directors were elected. Contributions by
the Board have greatly enhanced the
Company's strength in dealing with our
long-term future.

Mr. George Stevens was appointed
Chairman of the Board on September 1,
1987 following the resignation of Mr.
Winslow W. Bennett. The Board wishes
to express its gratitude to Mr. Bennett
for his contributions to the Company
during his interim chairmanship. Mr.
Bennett remains a Director and a member
of the Executive Committee as well as the
Audit Committee.

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Province of B.C.

Employee and government
contributions essential

The continuation of the Cassiar/
McDame Mine operation beyond 1991
is only possible through the support of
our employees and the Government of
B.C. Early last year it was clear that a
cooperative team approach would be
needed to make the McDame project a
reality. The understanding, cooperation
and support were there — thank you.

Financial results achieved and the
commitments made for the future were
the result of hard work. The Directors
wish to express their appreciation to
those people whose efforts have made
these accomplishments possible.

On behalf of the Board of Directors.

Ce Be

James C. O'Rourke,
President and Chief Executive Officer.

Vancouver, Canada.
March 21, 1988