had been accomplished:

a) The removal of the waste backlog on the hangingwall side of the pit is nearing
completion.

b) The footwall stabilization program which involved changing the angle of slope
from 47° to 37°, is on schedule and due for completion early in 1977.

c) The new pit access road has been completed and has measurably improved the
delivery of ore to the primary crusher.

d) Re-development of the pit incorporating wider roads and catchments is proceed-
ing on schedule.

During the year 6,726,374 cubic yards of waste were removed at a cost of
$19,270,537 or $2.86 per cubic yard, a significant reduction from the 1975 cost of
$3.05 per cubic yard. Continued improvement is expected in the unit cost of waste
removal as a result of the pit re-development. The total waste removal cost that was
charged to operations for the year was $8,311,959 using an amortization rate of
$9.00 per ton of ore mined.

Ore Reserves As of December 31, 1976 ore reserves mineable by open pit
methods are calculated to be 18,023,000 tons. In establishing these reserves a3%
grade was used as the cut-off rather than the 1.5% as in the past. The 3% cut-off
grade conforms to the present economics of mining ore at Cassiar. The change in
cut-off grade, together with recent drilling information, accounts for the reduction in
previously reported ore reserves of approximately 2,000,000 tons.

Environment \|mproved procedures, coupled with better equipment design
and maintenance, reduced the average in-plant fibre count to a level below the
current required standard. Personnel working in areas that do not yet meet the
required air cleanliness standards are provided with respirators which offer the
wearer complete protection from airborne fibres and dust. It is the Company's
intention to reduce airborne asbestos fibres to the lowest concentration practicable,
using the best available technology.

It is expected that the incidence of airborne fibre in the mill will be further
reduced during 1977 with the completion of the new mill air system and the mill
vacuum cleaning system.

The new employee Change House is designed to prevent asbestos fibres
being carried into the residential area on employees’ work clothes. After this facility
is commissioned in April, 1977, employees will be required to change out of the
company-supplied protective clothing at the Change House prior to leaving the
work area for their homes.

A “two tiered’’ Environmental Committee was established in January, 1976
with the full support of the Government of British Columbia. The first tier, or local
Committee, meets regularly at Cassiar mine and is composed of Company man-
agement, Union and Community representatives. The second tier, which acts as an
“Overview Committee’, meets at Victoria, British Columbia. This Committee in-

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