and waste to ore ratio which at the present time appears to be marginal. The reserves have been
reclassified as follows:

Probable Ore Possible Ore
Maing @rebod gear mien rere nanntr rer yt Na Ale ty) ear ae os 8,500,000 7,500,000
Greeks @rebod yegrne ee ime ren en es Aral ease yee a 750,000 —
SHOWSHOEMOREHOdysctne es i pate ete Pe ee ya re Shee — 2,000,000

9,250,000 9,500,000

Diamond drilling will be carried out this summer to resolve the classification of the possible ore.

TRANSPORT DIVISION

; The new trailer design, which carries 38 tons of fibre, was successfully introduced into the
Clinton Mine fleet towards the end of the year and some reduction in cost can be anticipated in 1973.
It has been reported that the completion of the extension of the British Columbia Railroad from Prince
George to Dease Lake, scheduled for late 1974, has now been deferred to late 1975.

The bulk of the Cassiar Mine fibre is being moved to Vancouver via Whitehorse by the White
Pass and Yukon Route with the balance moving to Fort Nelson and Fort St. John and thence by the
British Columbia Railroad.

KUTCHO CREEK ASBESTOS COMPANY LIMITED
No work was carried out on this property during the year and none is planned for 1973.

PYKE ASBESTOS PROPERTY — New Zealand

An agreement has been made with a subsidiary of Kennecott Copper Corporation and Lime and
Marble Limited, a New Zealand Company, whereby Cassiar will undertake an exploration programme
on the Pyke Asbestos property located on the West Coast of the South Island about latitude 44° South.

Subject to the applicable New Zealand Government consents, Cassiar has a commitment to
spend NZ $400,000 by May 1, 1975 and an option to spend an additional NZ $600,000 by May 1,
1977. Upon completion of these expenditures New Zealand Asbestos Limited, a newly formed company,
will issue 1,000,000 shares to Cassiar, 1,000,000 shares to Kennecott and grant to Lime and Marble
the right to purchase 325,581 shares at a price of one New Zealand dollar per share. Thereafter, the
three companies will have the right to acquire additional shares issued in proportion to their holdings.

Lime and Marble will receive cash payments prior to production and thereafter a royalty based on
the value of asbestos fibre sold.

In the event of commercial production, for appropriate remuneration, Cassiar will provide New
Zealand Asbestos Limited with management services for a period of fifteen years.

GENERAL EXPLORATION

Exploration of selected areas in British Columbia was carried out in 1972 and no showings of
economic interest were found. This completes an extensive seven year programme which has covered
most of the known ultrabasics in British Columbia, the Yukon and parts of Alaska.

Exploration work in Canada in 1973 will be confined to examinations of properties submitted.

RESEARCH

The research programme being carried out at the Ontario Research Foundation is progressing
favourably and continues to justify the expenditure involved.

PAGE NINE