broadened in scope and outlook. Light and heavy equip- ment sales facilities have been expanded and an agressive sales policy established. This shift in emphasis has resulted in an increase in Territorial Supply's share of the northern truck and equipment market — a trend which is expected to continue in 1976

Personnel Tumover

The turnover of personnel, in common with other north- em mining operations, continues to be a pressing problem for the Company. Statistics reveal a 1975 turnover rate of 157% and that more than half of the Company’s produc- tion employees have less than six months service with the Company. The results achieved in 1975, despite this turn- over rate, are a testimony to the overall capability of the small group of long term employees of the Company.

During 1976, your Company will initiate new recruit- ment and employee programmes designed to reduce the high turnover within our northern mining operations. This will include additional training programmes at our mines.

All of the collective bargaining agreements expire by the end of June 1976 and will be re-negotiated.

Exploration

When the current capital expenditure programmes at our Cassiar Mine have been completed it is your Company’s intention to again turn its attention to exploration with a view to finding a replacement for the Clinton Mine which will be phased out of production during 1978. The first target for exploration will be the Company’s Kutcho Creek deposit.

The option on the Pyke Asbestos project in New Zea- land was dropped during the year.

Litigation

Certain actions have commenced in the United States naming Cassiar Asbestos Corporation Limited and other asbestos producers as defendants. Substantial damages are claimed by certain American asbestos workers, or members of their families, for alleged injuries to health by reason of the inhalation or ingestion of asbestos fibre or dust. These actions are being defended. Product liability insurance was carried until November 1975 but this insurance is no longer available.

Management, Staff and Employees

Shareholders will appreciate that the Company's Man- agement, Staff and Employees have successfuly com- pleted a difficult year. The Directors wish to thank them for their energy and devotion, and give recognition to the many individual skills and talents that have given shape and substance to the Company and its operations.

On behalf of the Board

J. D. CHRISTIAN,

Chairman.

PETERSSTEEN:

President.

DATED March 18, 1976 Toronto, Canada.