Clinton Creek Mine

Ore Mined — 451,981 tons of ore were mined. This tonnage was supplemented by
326,518 tons obtained from a small orebody near Clinton Creek. 593,092 tons of
concentrate were obtained from all the ore mined.

Fibre Production — 57,655 tons of fibre were produced from 769,116 tons of
concentrate. This concentrate includes inventory as at December 31, 1977.

Waste Removal — 274,986 cubic yards of waste were removed at a cost of
$478,532 or $1.74 per cubic yard. Waste amortization charges were $951,032 or $2.10
per ton of ore mined from the Clinton orebodies.

Ore Reserves — The mineable reserves of the Clinton orebodies were exhausted
in 1978. 318,019 tons were unavailable because of pit wall instability.

Clinton Creek and Transport Division Closure

The closing of the Clinton Creek mine in August 1978 also resulted in the shutting
down of Cassiar’s Transport Division based at Whitehorse, Yukon.

A comprehensive program for the purpose of training and relocating displaced
Clinton employees was developed between the Corporation, the Canadian Mine
Workers Union, and the Canadian Employment and Immigration Commission. This
program, combined with a severance allowance plan, has assisted those whose em-
ployment was terminated as a result of the closure of the mine and many employees
have accepted employment at Cassiar, B.C.

In September, surplus assets at Whitehorse and Clinton Creek were sold by
auction, the net proceeds of which were $1,740,000.

Exploration

During 1978 $1,242,671 was spent on exploration:

Kutcho Creek: The diamond drilling program begun in 1977 on this asbestos
prospect in northern British Columbia was continued through the summer of 1978. The
results confirm a substantial tonnage of asbestos fibre mineralization, but under the
present day economic conditions does not warrant further development. The mining
claims will be maintained in good standing.

Grand Forks Uranium Project —B.C.: This project was a joint venture entered into
in 1977 between Cassiar, Chinook Construction Ltd., and Consolidated Boundary Ex-
ploration Limited. A percussion drilling and sampling program was carried out in the
summer of 1978 on the anomalies delineated in 1977. The results from sampling a grid
pattern of 27 percussion drill holes were discouraging and the option on this property
has been dropped.

CUB Joint Venture: This joint venture formed early in 1978 between Cassiar, Union
Carbide and Highland Crow (Teck Corporation) with the consulting firm of Archer-Cathro
& Associates acting as manager, carried out an exploration program for tungsten in a
100,000 square mile area in the Yukon and Northwest Territories. As a result four
properties were staked. The program will be extended into 1979 with more detailed
work on the claims.

General Exploration: During the summer, occurrences of chrysotile asbestos in
the Clinton/Dawson City area were re-examined. Nothing of any economic conse-
quence was found.

Labour Relations

Employees of the Cassiar Mine commenced strike action on September 15 after
unsuccessful attempts to negotiate new labour contracts. The work stoppage was