Coal demand in Pacific Rim countries has fallen far short of predictions leaving many buyers in an over-committed position. The resulting surpluses have created intense price competition and spot prices have weakened by 30 percent over the past two years, whilst many coal contracts have been re-negotiated both as to volume and price. These difficult conditions will impact on the timing of development of the Quinsam coal project on Vancouver Island, which is dependant on the availability of acceptable contracts for the supply of coal to this market area. Gold prices ranged from a high of just over $500 ULS. per ounce at the start of the year to a low of $375 ULS. per ounce at year end. This decrease in price reflects the fall in demand for gold with the contraction of discretionary income on a world wide basis and the strong demand for the U.S. dollar. Gold averaged $424 ULS. per ounce for the year, which was less than the cost of production at the San Antonio gold mine. Canadian oil prices improved significantly in the year, reflecting Federal-Provincial agreements on pricing, but gas sales continued at depressed levels reflecting poorer United States and Canadian demand. Brinco Oil & Gas Limited’s production is predominately oil, and net sales revenues increased by 32.4 percent over those experienced in 1982. Opera tions Although quantities of ore mined and fibre produced at the Cassiar mine were higher than in 1982, cash costs at the minesite were lowered again reflecting temporary mine closures, improved productivity, and reduced stripping made possible through the implementation of the revised mine plan. Mining in the upper levels of the San Antonio gold mine was discontinued on May 27, 1983. Subsequently, a drilling program to test the lower levels of the mine indicated continuity of gold mineralization at depth. In November, an agreement in principle was concluded with Lathwell Resources Ltd., a subsidiary of First Calgary Petroleum Ltd., whereby Lathwell can earn a 50 percent working interest in the mine by expending $7.5 million on exploration and development over a 4% year period. Production at the Loftis coal mine in 1983 was lower reflecting reduced operating days in the first three quarters of the year and the shutdown in October, both due to adverse market conditions. While the mine was operating, rated production levels at budgeted costs were achieved. The mine is now being held on a care-and-maintenance basis. Oil production by Brinco Oil & Gas Limited averaged 370 barrels per day, up from 315 barrels per day in 1982. Gas production averaged 1900 mcf per day, compared with 2130 mcf per day in the previous year. Activities during 1983 on the Quinsam coal property, a joint venture project of Brinco Limited and Weldwood of Canada Limited, were directed towards market development, further refinement of pre-feasibility studies, and the obtaining of environmental permits for development of the project. During the year, it became apparent that market opportunities, which will determine the timing of project release, are restricted by the large surplus of coal available at low prices in the Pacific Rim area. A public inquiry to provide an opportunity for full public discussion of the environmental issues associated with the project was held from October 12th to November 25th, 1983 and the results are expected to be made public shortly. During 1983 Brinco Mining Limited participated in thirteen exploration projects of which five were major programs. Drilling results on the Dawes Pond project in Newfoundland, subject to a joint venture between Brinco Mining Limited and Getty Canadian Metals, Limited, continue to provide encouragement, as does the work done by Canamax Resources Inc. on Brinco Mining Limited’s Tootsee property in northern British Columbia and on an adjacent property also under investigation by Canamax.