9. Contingencies
MINERAL RESOURCE PROPERTIES

Development of non-operating
mineral resource properties and
recovery of related costs are
dependent upon capital financ-
ing arrangements, mineral
market conditions, environmen-
tal considerations and general
economic conditions. Uncertain-
ties in respect of such proper-
ties are outlined in note 2.

BANK INDEBTEDNESS

Brinco Mining Limited currently
is renegotiating its loan agree-
ment with its Bank. Uncertain-
ties in respect of possible revi-
sions to repayment terms,
covenants, interest rates and
forms of security are outlined in
note 4.

LEGAL ACTIONS

Brinco Mining Limited, as well
as others, continues to be named
as a defendant in a large number
of product liability suits in the
United States in which substan-
tial damages are claimed for
alleged injuries to the health
of asbestos workers and others
by means of their exposure to
asbestos fibres or dust. The sub-
| sidiary company is currently in-
volved in approximately 950

| such suits. Since 1974, the com-
pany has been involved in ap-

| proximately 2,400 claims and

has agreed to settle or been
dismissed from approximately
1.450 claims. Three cases have
gone to trial. In one case, the
company was dismissed before
the verdict was rendered. A se-

cond trial resulted in a verdict
for the defense. The third case.

_ involving seven plaintiffs, was
decided against the defendants
and the jury apportioned
damages of US. $41,650 against
the company. From 1974 to
date, legal and settlement costs
have totalled approximately
$8,000,000. The costs to date
may not be indicative of future
costs since the company’s

| potential liability in each case

| depends upon a great many fac-
tors apart from legal defenses,
including the seriousness of the
claimant's illness, whether the ill-
ness is related to exposure to
asbestos supplied by the com-
pany and the amount of con-

tribution required from the

various co-defendants.

In 1982, Manville Corporation.
which is both a substantial fibre
supplier in many of the actions
in which Brinco Mining Limited
has been sued and the
employer in a large number of
Brinco Mining Limited's cases,
petitioned for relief under
Chapter 11 of the U.S. Bankrupt-
cy Code. Amatex Corporation,
which is the employer in certain
cases in which Brinco Mining
Limited has been sued, applied
for similar relief. The company is
not now in a position to assess
the impact of these bankruptcy
filings on its potential liabilities.
The bankruptcy filings have had
the immediate effect of remov-
ing the petitioning companies
from the litigation. Some cases
are proceeding to trial without
the petitioning companies and
other cases have been stayed
pending further developments
in the bankruptcy proceedings.

The company held policies of in-
surance providing coverage for
product liability in the years
1953 to 1975. The company
takes the position that a
substantial portion of the settle-
ment and litigation costs, as well
as any judgment that might be
rendered against it. should be
reimbursed by its insurance car-
riers. While these insurers have
thus far denied coverage in
most instances, the company
has instituted litigation in the
Ontario Courts to recover cer-
tain of these costs.

BRINCO 198] ENERGY PROGRAM

Brinco Oil & Gas Limited is the
general partner of the Brinco
1981 Energy Program, an oil and
gas exploration and develop-
ment limited partnership which
during 1981 sold 5,219 units to
third parties at $1,000 per unit.
Commencing in 1984, any
limited partner may require the
company to offer to purchase all
or any of their units at a price
related to the fair market value
of each unit at the time. The
maximum number of units that —
the company is obligated to pur-
chase in any one year is 1,000.

10. Commitments

EXPLORATION AND
DEVELOPMENT

As a condition of the purchase
of Brinco Oil & Gas Limited in
1979, the Company agreed to
spend over the ensuing five
years $25,000,000 for explora-
tion and development of oil and
natural gas properties principal-
ly in Canada (to date the Com-
pany has spent approximately
$22,500,000).

U.S. COAL PROPERTY

An annual payment of U.S.
$750,000 is due in each of the
years to 1986. After January 1,
1987, a royalty of US. $1.25 per
ton of coal mined and sold will
be payable.

FUTURES CONTRACTS

At December 31, 1982 the
Company had entered into gold
futures contracts to sell a total
of 5,000 ounces of gold at
prices per ounce ranging from
US. $441 to U.S. $500 maturing
at various dates to February
1984. The Company anticipates
having sufficient production to
meet this commitment.

11. Retirement Plans

The Company maintains con-
tributory retirement plans which
cover certain salaried and hour-
ly paid employees. A deficiency,
which existed as at the date of
the last actuarial evaluation, ha
been fully funded.

12. Remuneration of
Directors and Senior

Officers

The aggregate direct remunera-
tion paid or payable for the year
by the Company and its sub-
sidiaries to its directors and
senior officers amounted to
$955,000 (1981 - $1,039,000).

13. Reclassification

For 1982 certain figures
reported in 1981 have been
reclassified to conform to cur-
rent presentation.