Markets

Canadian shipments of asbestos fibre were 812 000
tonnes in 1984, marginally higher than the low point
experienced in 1982. Free World production facilities
operated at less than 60 percent capacity and,
consequently, prices have remained under pressure.
Cassiar, however, slightly improved its market share,
selling approximately 95 percent of capacity. This
performance reflects customer loyalty to the higher
quality fibre produced at Cassiar.

Well-head prices for Canadian oil producers improved
again in 1984 reflecting provincial/federal government
agreements achieved in 1983; however, the recent
decline in world oil prices will likely curtail any further
improvement. Natural gas shipments by Canadian
producers remained at low levels in 1984 reflecting a
reduction in demand in the U.S. by large industrial
users.

Although the export steam coal market continued to
expand in 1984 in both Europe and Asia, prices remained
depressed reflecting over-capacity and recent currency
devaluations by the two major suppliers to this market.
Any development of the Quinsam coal project must await
a firming trend in prices which, given the continuing
expansion in the export market, is expected within the
next few years.

Operations

Although fibre production at the Cassiar mine was

13.8 percent higher in 1984 than in 1983, property cash
costs were 7.3 percent lower, reflecting improved
productivity, better mill performance, lower cost of
supplies and reduced stripping requirements following
implementation of the revised mining plan. An air
magnetic survey in the vicinity of the mine located 6 high
priority potential asbestos targets within trucking distance
of the Cassiar mill.

Oil production by Brinco Oil & Gas Limited in 1984
averaged 313 barrels of oil per day, down from 370 barrels
per day in 1983. Gas production at 1600 mcf per day was
virtually unchanged from the results achieved in 1983.
During 1984, a total of 21 holes were drilled on company
lands resulting in 11 oil wells, 6 gas wells and 4 dry holes.
Of these Brinco Oil & Gas Limited had a direct financial
participation in 8 oil wells, 3 gas wells and 1 dry hole.

The results of the public inquiry into environmental
issues associated with the Quinsam coal project on
Vancouver Island were released in May, 1984. The public
inquiry commission members were unanimous in their
conclusion that the Quinsam coal project, a joint venture
of Brinco Limited and Weldwood of Canada Limited, could
be built and operated without harm to the environment,
providing the necessary surveillance, mitigation and
reclamation procedures are followed. Consequently,
work in 1984 was concentrated on acquiring the permits
and licences required for the development and operation
of the mine. In light of continuing depressed coal prices,
engineering and marketing activities continued at a
modest level only.

Pursuant to the C.M.P. 1984 Mineral Partnership and
Company, Limited transaction, Brinco Limited expended
$1.5 million on mineral exploration. In total, the Brinco
Group spent $1.68 million on exploration projects, which
provided exposure through joint venture arrangements to
total exploration activity of $3.37 million on 18
exploration projects in Newfoundland, Quebec, Ontario
and British Columbia.

An exploratory hole drilled in mid-year has extended the
geological reserves of the McDame deposit to 62 000

000 tonnes with asbestos content similar to that of the
Cassiar ore body. Also, encouraging exploration results
were achieved on the Dawes Pond project in Newfoundland
and the Taseko and Kerr properties in British Columbia,
all of which have significant precious metal potential.