Skagway, Alaska

Tri-White became a reporting issuer on November 21, 1997 as a result of an initial public offering by way of secondary offering of common shares of Tri-White upon the exercise of rights issued by Russel Metals Inc. to holders of its Class A common shares and Class B common shares (the “Rights”).

Prior to the issuance of the Rights, Russel Metals Inc. entered into certain transactions to transfer to Tri-White, in return for Tri-White common shares, substantially all of its investments in the freight transportation business operated by Tri-Line Expressways Ltd. (“Tri-Line”) and the tourist railway and related services business of White Pass.

On July 18, 2000, the Company completed the sale of its trucking group including the operations of Tri-Line and its subsidiaries. Total proceeds of $44,000,000 were satisfied with $36,000,000 in cash, a subordinate debenture of $7,000,000 and a one-year holdback of $1,000,000. On January 24, 2002, the purchaser of the trucking group was placed into receivership by its senior lender and the Company has since written-off the non-cash component of the transaction.

White Pass & Yukon Route
White Pass is engaged in the operation of port facilities and passenger tourist transportation and related services in Alaska, British Columbia and the Yukon Territory.

The railway was constructed by White Pass as a result of the Klondike Gold Rush of 1898 and completed in 1900. From 1900 until 1982, it was used for carriage of general freight, ore concentrates, petroleum products and passengers. Railway operations were suspended in 1982 when a major ore concentrate customer shut down its mine. The Klondike highway between Whitehorse and Skagway, subsequently constructed in 1985, transferred the transportation of ore concentrates from rail to the more economical method of road service. The railway reopened in 1988 and has since been operating as a passenger tourist railway.

Passenger cruise ships are responsible for a significant portion of the White Pass passengers. In 2002, Carnival Corporation announced that it was successful in completing its takeover bid for P&O Princess Cruise Lines. This consolidation further concentrated ownership within the White Pass customer base; however, demand for the Company's services remains strong as Alaska continues to be a preferred destination within the industry. White Pass demand is underpinned by a growing shipbased passenger supply and strong regional tourist demand.

Underlining the change and development in the cruise business and the nature of the ships servicing the sector, White Pass initiated a US$3.7 million dock expansion in the port of Skagway and issued a US$1.6 million contract for the construction of eight new coaches. These projects were concluded in the spring of 2003 and 2004, respectively.

The expansion of the coach fleet provided a 15% increase in capacity for the spring of 2004 and ensured White Pass was in a position to realize increased cash flow from the expanded passenger volumes generated by the cruise line schedules. As well, in 2005 White Pass settled an insurance claim for ten damaged rail cars. The replacement cars have an increased capacity of 35%, which positively impacted customer service during the 2005 season.

White Pass has commenced construction to modify the Broadway Dock and upon completion planned for 2006, the dock will accommodate ships up to 200 feet longer than those previously in service. We believe that this investment in docks and coaches will ensure that White Pass continues to offer the industry the capacity required to accommodate the larger vessels now being commissioned into service.

As virtually all of the company's operating income originates at White Pass, the relative strength of the Canadian dollar has negatively impacted the reported EBITDA and net earnings for 2005. The Company estimates that the change in the average annual exchange rates has reduced after-tax earnings by $1.1 million or 5 cents per share.

Tri-White Merchant Banking
Subsequent to the sale of the trucking group, Tri-White management made a strategic decision to invest the sale proceeds in order to capitalize on its proven record of building and delivering shareholder value. Tri-White now seeks out opportunities and invests as a merchant banker in debt and equity instruments in both public and private companies.

The re-investment plan for the Tri-Line proceeds was focused on a public company in the Canadian leisure sector, ClubLink Corporation (“Clublink”). As the dominant owner, operator and developer of private multi-club golf course operations, the company offered attractive investment features. The opportunity, realized in September 2001, was based upon the acquisition of a strategic common share block available on favorable market terms. Through the transaction, Tri-White became the largest shareholder in the company with a 25% stake.

Utilizing its merchant banking strength and public company acumen, Tri-White determined that a change in the strategic direction of ClubLink was required, and in September 2002 a takeover bid was initiated. At the expiration of the bid on January 15, 2003, a governance agreement was reached with ClubLink which considerably strengthened Tri-White's representation. Tri-White also took-up 360,175 shares tendered to the bid, and now maintains a 31.3% interest in ClubLink. The governance agreement expired on June 9, 2005.

The Company introduced a regular dividend policy in 2000. During 2002, the payments were restructured on a quarterly basis and increased by 20% to $0.12 per share annually. In August 2003, the Company announced the completion of the consolidation of its issued and outstanding common shares on the basis of two pre-consolidation shares for one post-consolidation share. Since that time the regular annual dividend rate has been $0.24 cents per share.

To further expand its merchant banking activities, Tri-White made an offer for the purchase of approximately 35% of the outstanding common shares of Clearlink Capital Corporation, (“Clearlink”) from Morguard Corporation for an aggregate consideration of $23,870,000 ($7.75 per common share). This purchase was completed on November 27th, 2003. In addition to cash consideration of $11.9 million, the Company issued a promissory note of $11.9 million, with a coupon of 6% that matured in January 2006. Clearlink provides customized financing, asset management and equipment trading services to large organizations through the acquisition of technology and related equipment. Tri-White determined that Clearlink represented a solid investment opportunity and provided strategic expansion of its merchant banking activities.

In March 2004, the Company concluded a bridge financing for a private corporation, MaxTech Manufacturing Inc. (“MaxTech”), in the amount of $7.0 million. The transaction was financed primarily with external sources and represents an opportunity to enhance short-term returns.

During 2005, the Company sold its investment in MCCI, a private corporation engaged in business process outsourcing activities. Proceeds of $2.8 million yielded a pre-tax gain of $1.4 million.

Also in 2005, Tri-White concluded a transaction to acquire 1,048,000 shares of Sizeler Property Investors Inc. at a cost of $16,319,000. The Company subsequently determined that the investment was not a strategic fit and sold the shares at a small profit.