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.