Waste Removal nthe year, 778,484 cubic yards of waste were removed ata
cost of $1,447,771 or $1.86 per cubic yard. Waste amortization charges were
$6,195,051 or $3.13 per ton of ore.

Ore Reserves During the year the mineable ore reserves were reduced by
1,099,682 tons due to the inability to continue mining the Porcupine orebody
because of the deterioration and subsequent instability of the pit walls. A summary
of the ore reserve at December 31, 1977 is as follows:

Mineable ore reserves at December 31, 1976 ................ 3,848,000 tons
(OUSE MASI SAS ak alee on es cee toe oe nee eer ete ee 1,978,318 tons

1,869,682 tons
Reduction in mineable ore reserves ..............0.002000000- 1,099,682 tons
Mineable ore reserves at December 31, 1977 .................. 770,000 tons

It is anticipated that the mineable ore in the Clinton Creek mine will be
exhausted by mid-year in 1978.

Environment Due to the efforts of union and management, air quality at the
Clinton Creek mine and in the plant has been kept within the standard set by the
Yukon Territorial Government.

Transport Division

Plans, currently being developed, provide for the transport of Cassiar mine fibre
to Vancouver via Stewart, B.C., a port at the head of the Portland Canal. Stewart is
320 road miles from the Cassiar mine.

With the anticipated closure of the Clinton Creek mine in mid-1978, the
transport division, which has served the Company's interest well since its inception
in 1954, will be closed.

Exploration

During 1977, $475,195 was spent on exploration work related to the following:

Kutcho Creek: A diamond drilling program was carried out in the summer of
1977 at this asbestos prospect in northern British Columbia. The results were
encouraging enough for your Directors to consider continuing the drilling program
during the summer of 1978.

Grand Forks: Ageochemical and soil sampling program was carried out on this
uranium prospect in southern British Columbia during 1977. To date results have
been encouraging and in 1978 it is proposed to drill some of the anomalies that were
delineated by the 1977 program. ;

Various other prospects were submitted for examination during the year, and
some of them will require follow-up in 1978.

Itis the intention that the Corporation remain active in diversified exploration.

Litigation

Certain personal injury actions are continuing in the United States naming
Cassiar Asbestos Corporation Limited and others as defendants.

Plaintiffs are asbestos workers, or members of their families, who claim
substantial damages for alleged injuries to health by reason of inhalation or inges-
tion of asbestos fibres or dust.

As of February 28, 1978 Cassiar has been named as one of up to twenty
defendants in forty-eight cases in various United States’ jurisdictions.

The alleged injuries would have occurred after Cassiar had sold asbestos fibre
in Canada, and had thereby relinquished all control to its customers, who then
imported such fibre into the United States. Cassiar’s customers in the United States
are users with many years of experience in the handling and properties of asbestos
and the manufacturing of commercial products containing asbestos.