Bank Credit

The companies have established a line of credit of $21,000,000 secured by a general assignment of accounts receivable and
inventories of asbestos fibre, ore and supplies.

At the year end borrowings consisted of the following —

1974 1973
shermploan taunts we eta See eee te sie $ 4,000,000 $ 4,000,000
Banker’s acceptance notes ............ 11,000,000 5,500,000
Demandeloanse een eee ee 2,160,825 2,120,137

$17,160,825 $11,620,137

The term loan is repayable $2,000,000 during 1975 and $2,000,000 final payment in 1976. Interest on the term loan is payable
at the bank prime rate plus 1% and aggregated $463,890 in 1974 (1973 — $422,671). Total interest paid in 1974 on all
borrowings amounted to $1,434,882 (1973 — $857,411).

Taxes

The companies follow the tax allocation method of accounting for all differences in the timing of deductions for tax and
accounting purposes arising from mining claims and land, depreciation, waste removal costs, and exploration, development and
Preproduction costs. Taxes deferred of $15,920,000 represent tax reductions which have arisen to date from claiming such
items for tax purposes in excess of the amounts recorded in the accounts,

Sufficient information is not available to permit a precise determination of the Company’s liability under the British Columbia
Mineral Land Tax Act and the regulations thereto. However, the 1974 provision in the financial statements has been computed
using the best information available.

Remuneration of Officers and Directors

The aggregate direct remuneration paid by the companies during the year ended December 31, 1974:

Wopthestourteenkdirectorsiewesr sy rece ee re ey ee ee cya ae ne $ 18,950
To the seven officers of whom five are directors ..................-0-eceeeeeeees 224,300
To three others, deemed officers pursuant to the provincial securities acts ............ 94,670

$ 337,920

The aggregate cost to the companies during the year ended December 31, 1974 with respect to all pension benefits proposed to
be paid in the event of retirement at normal retirement age (65 years):

DinectOrseand OLLiCers meet ee er Ree ete i er Tn phe oe ee ee ees: $ 26,835
Three others, deemed officers pursuant to the provincial securities acts .............. 9,990
$ 36,825

Pension Plan

The present value of the unfunded portion of past service benefits is approximately $790,000 at December 31, 1974. The
amount is being funded and charged to operations by annual payments of $77,000, including interest.

Commitments
The company is committed to an estimated expenditure of $4,750,000 to complete certain capital facilities at the Cassiar Mine
under construction at the year end.

The company is committed to an equipment leasing programme for mining and highway equipment. ; At the year end the
outstanding contracts for leased equipment amounted to $2,320,000 of which $442,000 will be payable in 1975.

Legal Action

An action has been insituted in the State of Texas by a former employee of Standco Industries, an asbestos textile manufacturer,
naming this Company and five other companies as defendants. The employee claims damages of $750,000 for injuries to her
lungs alleged to have been suffered in the course of her employment due to the inhalation of asbestos dust. ; The Company,
among other defendants, sold asbestos fibre to the plaintiff's employer. The company carries insurance against such claims
and the action will be defended.

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