today in brief
ARMS CONTROL talks that resume today will provide the first serious test of the spirit of accommodation allegedly reached at the Geneva summit. An analysis.	Page
AIR QUALITY in Prince George has shown some improvement, a survey released today shows.	Page
WARM winter weather has sparked fears among Prairie farmers of soil erosion and another summer drought. Page
12
LOTTERY NUMBERS - PAGE 5
HERMAN
 "How do you stop the beans from sliding into the toaster?"
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 Sadrack says
 Intermittent snow and rain are predicted for the remainder of today, with clouds and snowshowers overnight and some sunny periods with isolated snowshowers Friday.
 Chances for precipitation are 100 per cent today, 60 per cent overnight and 30 per cent Friday.
 The high today will be-near 2, the overnight low near -5 with a high near zero Friday.
 Wednesday’s high was 2, the overnight low was -5, there was a trace of
 precipitation and five hours of sunshine recorded.
 Sunset today is at 4:21 p.m. and sunrise Friday is at 8:19 a.m.
Details page
The
Prince George
Citizen
40c
Thursday, January 16, 1986
QUINTETTE MINE IN NORTHEAST B.C.
Coal investment 'written off'
 Northwood Pulp workers participating in Great Cake Caper, from left: Gary Cunningham, Jerry Burton, Gary Koehler, Dennis Fremmerlid, Alan Poitras and winner Leo Escobar.	Citizen photo by Brock Gable
DELICIOUS CAKES BY HARD-HAT CHEFS
 Pulp mill has sweet aroma
by BERNICE TRICK Staff reporter
   It was called the Great Cake Caper and is predicted by participants to go down in history as the first and last annual event of its kind.
   The occasion was a cake-baking contest among Northwood pulp mill workers — known more for their blue-collar brawn than cake-decorating ability.
   “The caper started from a discussion in the lunch room where painters and electricians meet. An argument ensued and challenges and bets were made as to which department had the best cooks,” said contest organizer Girard Landry.
   Ground rules ensuring no cake mixes could be used and no help could be obtained from family members were laid out and judging took place Wednesday.
Wearing hard hats, ear protectors and overalls, the six participants from among 35
 eligible crew members arrived with their sugary, creamy delights.
   The four judges, Amanda Ware, Audrey Davis, Kerry Green and Ross Furry, were supposedly selected in secret from among employees, but admitted they had been subjected to bribery during the past week.
   “We’ve been told certain cakes have big bucks and diamond jewelery baked inside and one contestant tried to use the fact one of the judges is his shirt-tail relative,” they said.
   Judges made several trips around the table tasting, savoring and “judging purely on good taste,” while contestants and supporters impatiently licked their lips and suggested the judges were overdoing their duties.
   Although judges had a power saw hidden near by in case the going got tough there was no need to use it — a good effort with a meat cleaver sufficed.
   Leo (Lulu) Escobar, a painter, was selected the winner for his creamy, white, apricot
 layer cake and was presented with a trophy which is not to be passed on because the event had been termed “a sudden death contest.”
   For the most part, the losers showed good sportsmanship, although one was heard to mutter, “Fine. If that’s the way you feel about it, let them eat cake.” And everyone did.
   Escobar’s cake topped with thick, whipped cream and bright apricots had an appealing taste that simply called for another bite.
   When asked what his secret recipe was, he admitted to lacing the creation with brandy and orange-flavored liqueur.
   Paul Edema donated the trophy topped with a golden layer cake.
   Next year’s contest is already in the planning stages and will feature knitting, crocheting and lace tatting.
   The two departments also hold an annual fishing derby, but no one wanted to talk about the record fish.
MOVIES 'SCRAMBLED'
TV dish owners foiled
by Canadian Press
  TORONTO — Two major cable channels in the United States — Home Box Office and Cinemax — began scrambling their signals on Wednesday, depriving satellite dish owners across North America of two prized signals they had been receiving free of charge.
   The scrambling affects thousands of Canadians, including satellite dish owners in rural areas, apartment tenants with dishes atop their buildings and travellers who prefer hotels with satellite TV service.
   Bill Allen, a spokesman for the Canadian Cable Television Association. says there are an estimated 100,000 satellite dishes in Canada, including at least 1,150 dishes atop multiple-unit buildings that provide free signals to at least 78,000 apartments or hotel rooms.
  The move by Home Box Office, better known as HBO, and Cinemax — both subsidiaries of Time Inc. — had been in the works for some time, and many U.S. cable
bank rate
  OTTAWA (CP) — The news on interest rates continued to be bad on Thursday as the key Bank of Canada rate rose to 10.38 per cent, spurred by a feeble Canadian dollar and uncertainty on financial markets over the government’s economic policies.
   The increase, from 10.21 per cent a week earlier, came despite a slight strengthening in the dollar •
 channels offering premium specialty services such as movies, sports and news are preparing to counterattack against what they regard as signal pirates.
    By the end of this year, most key U.S. cable channels, including Showtime, ESPN sports and CNN News, will be scrambled. Only those U.S. satellite dish owners who buy a new type of decoder, which sells for about $400, and pay a monthly subscription fee will be able to unscramble the signal.
   Allen said in an interview Wednesday that HBO told him it “has no plans whatsoever” to sell the decoders in Canada because the channel lacks distribution rights in this country for some of its entertainment products. He said it is unclear whether the decoders would work if bought in the U.S. and used in Canada.
Airport
security
tightened
   OTTAWA (CP) — Security at the Montreal, Ottawa and Toronto airports was beefed up today, and the Ottawa Citizen reported that the move was sparked by a police hunt in Canada and the United States for a Libyan sympathizer who has threatened to plant a bomb aboard a U.S.-bound jetliner leaving here this weekend.
    The medium-level airport security measures, which went into effect this morning, were ordered following at least one meeting on the threat Wednesday between RCMP Commissioner Robert Sim-monds and Deputy Prime Minister Erik Nielsen, The Citizen says.
    Security at Ottawa airport will be stepped up even further by Saturday and is likely to include an additional 40 RCMP officers, possibly accompanied by bomb-sniffing dogs, says the newspaper.
by Canadian Press
   TORONTO — Denison Mines Ltd. said Wednesday it is reluctantly following its auditors’ recommendations and writing off its total investment in the Quintette coal mine in northeastern British Columbia.
    The investment amounts to $240.7 million including an equity loss in 1985 of $18.7 million. The mine will continue to operate, said company spokesman Ed Shiller.
    As a result of the writeoff, Denison recorded a net loss in 1985 of $157.9 million or $4.55 a share on record revenues of $736.6 million, Denison chairman Stephen Roman said.
    Denison has a 50-per-cent interest in and manages Quintette, the larger of two coal mines that make up B.C.’s controversial northeast coal project.
   The Quintette and Bulimoose mines were opened, with the assistance of the federal and B.C. governments which provided tne town site, roads, and railway to make the remote site accessible, just as the recession hit and caused a world-wide coal glut which forced prices down.
    Roman said the company’s auditors would not issue an unqualified report for Denison unless the carrying value of Quintette was reduced at least in part.
   Denison’s management and directors “strongly disagree with the opinion of the auditors,” Roman said.
   “We believe no permanent impairment has occurred in the value of the Quintette investment. Indeed the significant improvement in operations brought about in 1985 has reinforced our conviction that Quintette can acheive profitable results, and we remain dedicated to that goal.
    “It is not reasonable to conclude, only nine months after commercial production began, that the investment in Quintette has suffered permanent impairment. Common sense dictates that the project be given sufficient time to prove its worth.”
    However, Roman said, the directors decided that it was in the shareholders’ interest to issue unqualified financial statements.
    Denison’s consolidated net earnings for 1985, before the writeoff, were $82.8 million or $1.34 a share. This compares with restated earnings in 1984 of $63.6 million or $1.20 a share.
    Toronto analyst Geoff Carter of Midland Doherty said he isn’t surprised that Denison decided to write off Quintette.
    He said Denison had little choice because Quintette was costing Denison between $60 million and $80 million a year.
    “If you add all that up, it’s just a question of taking the hit slowly or taking it all at once,” he said. The market may already have taken Quintette’s problems into consideration, he added.
   Denison closed Wednesday at $14.25, down from its year-end close of $15.39. Denison’s announcement of the writeoff came after the market closed.
    Just after the announcement, one of southern British Columbia’s main coal producers, Westar Mining, said tne Japanese steel mills that buy its coal have made another cut in price and contract volumes. Quintette also sells to Japanese steel mills.
   In a new agreement effective April 1, 1986, the price of metallurgical coal from Westar’s Balmer mine will be $49 U.S. per tonne, which at current exchange rates is about 40 cents below the existing price.
   The Japanese also said they would take only 50 per cent of their contract volumes, a decrease of about 150,000 tonnes.
   Westar president Gary Livingstone said his company has reduced costs and staff and can live with the lower price.
★ ★ ★
   Provincial legislative member Don Lockstead (NDP—Mackenzie) said in Victoria that the announcement “proves once again that the
 whole concept of the northeast coal, which in excess of $1.2 billion taxpayers’ money federally and provincially was poured into, was ill-conceived and ill-timed.
   “The customer, in this case Japan, has in fact reduced the price of the coal and negotiated a lower price for northeast coal, they’ve negotiated reduced order volume on northeast coal to be shipped.”
   Lockstead said the legislature was told “as late as last year that the break-even figure for northeast coal was that we would have to sell 15 million tonnes of northeast coal a year to break even on the project.
   “We are currently selling less than seven million tonnes of coal a year to Japan,” he said. “We’ll be paying off the debt and the interest on those debts for as long as we live.”
   'Biting
the
   bullet'
   by MALCOLM CURTIS Staff reporter Denison’s $240-million Qui-nette Coal investment write-off is a vote of non-confidence in the mine’s ability to make a profit, analysts say.
    In what is essentially a paper shuffle, the company on the advice of its auditors is
 “biting the bullet,” and admitting that “today there is no value in our investment,” says
 Bob Buxton, an accountant with Dunwoody and Company in Prince George.
   “It really confirms everyone in the investment community’s suspicion, that Denison’s investment in Quintette is not paying,” said Buxton.
   The company’s auditors are indicating that they don’t think Denison is going to recoup its investment, the accountant said. But it remains conceivable that Quintette could make a profit in the future.
   Indeed, Denison president Steve Roman said he still believes the northeast coal mine can operate profitably.
  The write-off does not change Denison’s 50-per-cent ownership share in Quintette and is essentially a “housekeeping” move, said Buxton.
   The stock market reaction to Denison shares shows that investors have already shown little confidence in the mine’s profitability. But today they responded favorably to the write-off as Denison A shares moved up Y» to 14V8 while Denison B jumped by the same amount to 13y*.
   “Obviously the market is reacting favorably to the news,” said Terry Sarter, investment broker for Pemberton Houston Willoughby.
   Sarter noted that the northeast coal project is not completely a bust. Bulimoose mine, controlled by Vancouver’s Teck Corp., showed a profit of over $12 million last year.
  bul I et i n
   PASADENA, Calif. (AP) -Herbert W. Armstrong, founder and pastor general of the Worldwide Church of God and originator of the widely distributed Plain Truth magazine, died Thursday in his home. He was 93.
    The church's television spokesman for many years was Armstrong's son and heir-apparent, Gamer Ted Armstrong, until the two had a falling out in 1978. Gamer Ted Armstrong has conducted an independent ministry since.