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Jade from the Cassiar mine.

Coal from the Loftis mine.

The Loftis coal mine was acquired in December 1980 and plans were implemented in 1981 to expand production from 160,000 tons per year to 350,000 tons per year. The expansion project was completed within budget, but production was delayed because of a two and a half month shutdown resulting from a strike by the U.M.W.A. which affected the non-union

mines in the area. Reflecting the interruption

in production, coal sales from the mine were 225,643 tons. Markets remain firm for the high quality Loftis coal which is sold largely to local industrial users with some production directed to the export market.

On Vancouver Island in British Columbia, we have joined Weldwood of Canada Limited as a fifty percent partner in Quinsam Coal Limited. The Quinsam coal deposits, located close to tidewater and transportation facilities, contain more than 32 million tons of high volatile bituminous steam coal.

We are currently undertaking environmental and mine development studies and are working closely with the communities in the Campbell River region on the development. Submission of the results of these studies will be made to the Government of British Columbia by mid-1982 and a decision by the government on this project is expected in the second half of 1982.

In the Stellarton region of Nova Scotia, under a lease option arrangement with the Nova Scotia Government, Brinco together with Suncor Inc. Resources Group of Calgary is investigating certain sections of

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the Acadia and Scott seams in the Pictou coalfields. Initial exploration results will be available in early 1982 when a decision will be made whether or not to proceed with the next phase of investigation.

Mineral Exploration

During 1981 Brinco operated or participated in fifteen exploration projects across Canada of which six were major programs. Total expenditures on these programs was $9.7 million of which our share was $1.9 million. Principal exploration projects were in Labrador, central Newfoundland and the Yukon.

Early in 1981 we and our partner Edison Development Canada Inc., a wholly-owned subsidiary of Commonwealth Edison Company of Chicago, announced deferral of the development of the Kitts-Michelin uranium deposits in Labrador until conditions improve in uranium markets. By year end there was no significant change in these markets. The partners maintain an active interest in the project and a selective exploration program continues.