Cassiar Asbestos Corporation Limited

NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1960

. Subsidiary company

The financial statements of the subsidiary company have not been consolidated
since it has no liabilities other than $6,348 advanced by Cassiar Asbestos
Corporation Limited, and its only assets are mineral claims, which are in the
preproduction and development stage. The title to these claims is being
contested in the Supreme Court of Canada by the original vendor. In the
opinion of the company’s legal counsel, this action will not succeed.

The company has an option to purchase the remaining 20,000 issued shares of
the subsidiary company from the original vendor for $40,000.

. Income taxes

The current year’s tax reduction of $1,060,000 represents the additional income
taxes that would have been payable for the year had the company not claimed
capital cost allowances, stripping costs and preproduction expenditures for tax
purposes in amounts greater than those recorded in the accounts. The accu-
mulated tax reductions of $1,285,000 are applicable to those future years in
which amounts claimed for tax purposes will be less than those recorded in
the accounts.

Pace E1cut