REPORT OF THE DIRECTORS

Your Directors take pleasure in presenting herewith the
Twenty-Fourth Annual Report on the affairs of Cassiar
Asbestos Corporation Limited, including the Consolidated
Balance Sheet as at December 31, 1975 and the Consoli-
dated Statements of Operations, Retained Eamings, and
Changes in Financial Position for the year then ended,
together with the Auditors’ Report.

Financial

During 1975, there was an increase over 1974 in the
quantity of asbestos fibre sold and in the average selling
price. This resulted in a net income of $8,289,836 or $1.51
per share. This is a marked improvement over 1974 in
which a net loss of $2,145,780 was sustained, after a
non-recurring write-off of $3,303,410.

The Company’s net income takes into consideration
$9,498,000 for Taxes and Royalties which includes
$3,949,237 for the 1975 British Columbia Mineral Land
Tax. The Mineral Land Tax paid relative to 1974 was
$256,763.

Capital and Deferred Expenditures for the year are
summarized as follows:

Vancouver
and
Cassiar Clinton Whitehorse
Plant and
equipment ... $ 8,500,559 $ 296,067 $284,452
Waste Removal. 16,482,253 3,328,129

Development... Sal ee 56

$25,137,525 $3,624,252 $284,452

SA

At the Cassiar Mine, $3,982,562 and $1,487,394 respec-
tively were expended on the 300 ton per hour tramline
system and the primary concentrator. These facilities are
now operating. Other major expenditures include
$615,047 on the replacement of the refinery tailings con-
veyor system, $431,000 on the expansion of power pro-
duction facilities, and $519,000 on the extension to the
mine garage. These projects are to be completed during
1976 at an estimated cost of $1,200,000. To enable waste
removal targets to be met, an 11 cubic yard electric shovel,
four 85 ton trucks and a rotary drill were leased.

During 1975 your Company established a term loan in
the amount of $10,000,000. In December 1975,
$1,000,000 of this loan was repaid. Future payments will
be made at an annual rate of $2,000,000. The total bank
indebtedness at the year end was $13,048,822.

Asbestos Sales

During 1975, your Company sold 199,404 tons of asbes-
tos valued at $79,491,557 compared with 183,982 tons of
fibre valued at $53,187,426 in 1974. Of the total value of
the fibre sold $40,900,412 was attributable to the Cassiar
Mine and $38,591,145 to the Clinton Mine.

The increased amount realized per ton of fibre in 1975
reflects the effect of two price increases on all Cassiar and
Clinton grades, the first of 20% effective January 1, 1975
and the second of 8% effective August 1, 1975.

The market, particularly for the asbestos cement pipe
grades, is strong, and should continue through 1976.

Cassiar Mine
Ore Mined

During the year 934,754 tons of ore were mined at Cas-
siar, British Columbia. Of this total 134,778 tons were
rejected in the primary concentration plant leaving
799,976 tons for refinery processing. The recoverable
grade of ore mined was 8.93% compared with 8.11% in
1974

Fibre Refined

During the year 798,149 tons of concentrate were treated
to produce 83,504 tons of fibre. The new concentrator was
commissioned in the fall of 1975. Unusually wet ore from
the mine during the ensuing few months made it difficult to
achieve the improved efficiencies anticipated.

Waste Removal

As previously reported to you Cassiar Mine’s waste re-
moval programme was re-assessed in 1973 to ensure it