Maintenance crews

repairing one of the

three semi-autogenous

grinding mills.

Similco
Operation

i nJune, the Company acquired
Similco Mines Ltd., owner and
operator of the Similkameen open
pit copper mine and concentrator
near Princeton, British Columbia.
Mining in the area dates back to
the mid-1920’s when the Granby
Mining Company began developing
an underground operation at
Copper Mountain, the site of the
present open pit mine. In 1966,
Granby’s assets in the Princeton
area were acquired by Newmont,
which developed ore deposits on
the east and west side of the
Similkameen River.

The Similkameen operation was
brought into production at a total
cost of $75 million, and was
expanded in 1976 and 1980 at an
additional cost of $28.5 million.
The concentrator is located on the
west side of the river and was
initially supplied with ore from the
adjacent Ingerbelle pit. This pit
was mined out in 1980 and
subsequently ore has been supplied
from two pits on the east side of
the river by way of a 2,370 foot
long conveyor.

Mine Life Extended

Until its acquisition by Cassiar, the
mine was scheduled to close in
June, 1990. Cassiar has
implemented a detailed mining
plan for the initial 5 years and is
actively reviewing alternatives to
further extend the life of the mine.
The current plan includes the
development of a new open pit,
where clearing and stripping
began in late 1988. To carry out
the development work in both the
new and current pits, $3.9 million
has been invested in additional
equipment.

Operating Efficiency Improved
The Company took steps to
increase output and improve
efficiency by increasing the
productivity of the concentrator
from 21,000 to 23,500 tons per day
in 1988. The throughput averaged
just under the 1989 target of
25,000 tons per day during the last
quarter of the year. This higher
production rate resulted in
increased copper production and
reduced unit costs.

Because of depressed copper prices
in the early 1980’s the mine was
scheduled to close in 1990.
Maintenance of most Similco

Annual Copper Production
B Actual ~ 1989 Projected

Similco concentrator average
throughput for each quarter
1988 & 1989 (projected)

@ 1988 Tons Milled/Day — 1989 Projected

Tons (x 1000)

30