Cassiar Asbestos Corporation Limited

Report of Directors

To the Shareholders,

Cassiar Asbestos Corporation Limited.

Your Directors submit herewith the Fourth Annual Report on the operations of your
company, including financial statements prepared as at September 30, 1955, your auditors’

report thereon and a report by Mr. J. D. Christian, General Manager.

During the year your company earned a net profit of $686,092.15 after providing
depreciation aggregating $578,898.42. As reported by the General Manager, due to the
necessity of milling development ore from the cirque valley, operations during December
1954 to June 1955, inclusive, were unprofitable. Mining the main orebody was resumed
July 1, 1955 and recovery of fibre and profit have been very satisfactory since that date.
The exemption period under the Income Tax Act has now been established for the three
year period July 1, 1955 to June 30, 1958.

During the year, your company expended on account of plant and equipment
$2,121,221.49, and on extension of roads, $22,554.26. The cost of purchasing land and

obtaining patents to mining claims amounted to $10,535.15.

Funds for capital expenditures were provided in part by the sale of 200,000 shares
of capital stock to provide the treasury with $1,200,000.00 as reported to the last annual

meeting of shareholders.

You will note that after the above expenditures of $2,154,310.90 on account of fixed
assets, current assets amounted to $2,925,853.57 and current liabilities amounted to
$1,986,309.30 or net working assets of $939,544.27 as compared with net working assets at
September 30, 1954 of $659,146.23.

The British Columbia Government maintained the highway from Cassiar to the
Yukon border throughout the year and continued the programme of improvements to the
road. Construction of a road to Stewart, B.C. is in progress. When completed, the road will

provide access to tide-water at Stewart.

Pace THREE