Document 6wV19dv5aOOJGB2L45nxJKr83

N11065 PNYC0C006019 Anaconda Copper Mining Company CAPITAL STOCK December 31, 1925 Authorized, 6,000,000 shares, $50 each.............................. $300,000,000 Issued, 3,000,000 shares, $50 each...............................$150,000,000 OFFI Chairman of the Board . President Vice-President .... Vice-President .... Secretary and Treasurer General Auditor .... Assistant Secretary . . . Assistant Treasurer . . . ERS JOHN D. RYAN CORNELIUS F. KELLEY BENJAMIN B. THAYER JAMES R. HOBBINS ALBERT H. MELIN ROBERT E. DWYER RALPH D. COLE DAVID B. HENNESSY DIRECTORS Percy A. Rockefeller John D. Ryan Benjamin B. Thayer Cornelius F. Kelley George H. Church Charles F. Brooker Nicholas F. Brady Andrew J. Miller Albert H. Melin OFFICES An a c o n d a, Mo n t a n a 25 Br o a d w a y , Ne w Yo r k pHXC0000602 To the Shareholders of the Anaconda Copper Mining Company: The year 1925 was characterized by a record production and consumption in all of the non-ferrous metals. The .available statistics indicate that the world's production of copper exceeded 3,175,000,000 pounds, lead 3,218,000,000 pounds and zinc 2,493,000.000 pounds; and that the apparent consumption of copper was 3,260,100,000 pounds, lead 3,181,300,000 pounds: and zinc 2,493,100,000 pounds. The consumption of copper materially ex ceeded production. The increase in the volume of business was accompanied by a gratifying increase in the prices of both lead and zinc, the prices of these metals fluctuating between a. low of 7.985 cents per pound and a high of 10.169 cents per pound for lead,, and a low of 6.951 cents per pound; and a high of 8.614 cents per pound for zinc, with averages, respectively, of 9.020 and 7.622 cents per pound for the year; while, on the other hand, the price of copper fluctuated1 between the low price of 13.252 cents per pound and a high of 14.709 cents per pound, with; an:yyefage of 14.042 cents per pound for the year. The explanation for the failure of the price of copper to advance correspondingly with the prices of other metals, and in line with the increase in consumption over production, is to be found: (a) in the, intensely competitive effort of the various copper selling agencies, both in the United States and abroad; and (b) in the:.activity of the speculative dealers abroad whose.available supplies of copper have been during the past few years largely increased. Financial Results The operations of your Company and its subsidiary and affiliated companies were con ducted continuously throughout the year, although copper production was upon a curtailed basis. The gross income from sales and foils amounted to $212,770,498.33 as against $166,467,901.80 for the year 1924. Operating profit and income from investments amounted to $33,077,229.48 as against $21,744,965.25 for the previous year. The net profit, after deducting all charges, deprecia tion, bond interest and discount, etc, amounted to $17,540,532.32 as against $6,719,215.49 for the previous year. Von Giesche Negotiations During the year your Company, associated with other American interests, entered into negotiations with Bergwerks Geseilschaft Georg von Giesche's Erben and Giesche Spolka Akcyjna, looking toward the possible participation in the reconstitution and financing of the latter named companies. The Bergwerks Geseilschaft Georg von Giesche's Erben is the oldest operating mining company in Europe. It had: a uniformly successful financial history from about the middle of the eighteenfh century to the post war period, being one of the largest producers of coal in Europe and the largest producer of zinc. The company, and its subsidiary above named, own extensive zinc1 ore deposits in Upper Silesia on the newly created border between East Prussia and Poland. Due to difficulties of operation encoun tered since the war and the depreciation in value of securities payable in Marks, held by 3 PNYC00006021 the company, it became involved in financial difficulties. Your Company has participated in the making of a temporary loan of1 $10,000,000 to the above mentioned companies .upon adequate security and has obtained in connection with its associates in the business a six months option within which to determine whether your company will participate in the re constitution and refinancing of the above companies. At the close of the year an examina tion was being made into the mines, smelteries and business of the above companies by members of the staff of your company. Result* of Operations Following is a summary of the results of the operations of your Company, its departments and its subsidiary and affiliated companies, during the year: Butte Mines Development During the year 1925 there were done in the mines of the Company, in the form of drifts, cross-cuts, laterals, raises, winzes and shafts, 34.19 miles of development work, as com pared with 25.14 miles during the year 1924, an increase of 36 per cent. Production The tonnages mined during the year were as follows: Copper Ore The mines of the Company produced during the year 2,847,158.45 tons of copper ore. 7,990.04 tons of precipitates were produced from die water pumped from the mines. Zinc Ore The mines of the Company produced 25,109.68 tons of zinc ore. Construction There was expended on new construction during the year $416,297.39, in mechanical and electrical equipment. Of this amount $157,897.23 was expended at the Orphan Girl mine in equipping this mine for the production of zinc ore. The Rocker Timber Framing Plant on December 15 was totally destroyed by fire. The reconstruction of this plant has been authorized. Expenditures aggregating $2,276,854, to provide for the equipping and installing of electrical hoists, with auxiliary hoists, at the Badger State, Mountain Con and Belmont mines, were authorized. Conda Phosphate Mines During the year the total advance in drifts, cross-cuts and raises in the mines amounted to.2,991 linear feet, as compared with 1,062 feet in 1924. 4 The mines at Conda. Idaho, produced 78,768.64 tons o rock, averaging 31,84% P2 Ov Of this amount 2,430.65 tons were sold and the balance shipped to the Phosphate Plant at Anaconda, Reduction Work*--Anaconda Copper At the concentrator there were treated 2i999,89i.77 tons of copper ore, and 16,079 tons of copper tailings were treated by the-new combined leaching and flotation process. The Anaconda Reduction Works treated for all companies 3,145,626.63 tons of copper ore and other cupreous material. Of the total amount, 2,750735.99 tons of ore were produced by the mines of the Company; 363,811.72 tons of ore were either purchased from or treated for other companies: 27.983.70 tons of material were shipped from the old plants at Anaconda and Great Falls, and 3,095.22 tons from the Great Falls Zinc Plant. There were produced 266,864,833. pounds of fine copper, 9,071,359.67 ounces of silver and 3S.390.320 ounces of gold. Of this production 266,373,956 pounds of fine copper. 9,054,740.99 ounces of silver and 38,390.320 ounces Of gold were produced for your Company. Zinc The rebuilding of the Zinc Concentrator, after the fire of November 15, 1924, was finished and the plant put into operation January 19, 1925. During the year 419,887.70 tons of zinc ore were concentrated. Of this amount 24,839.45 tons were from the mines of the Company and 395,048.25 tons were purchased from other producers located in the Butte District. From this ore there were produced 5,894.10 tons of lead concentrates and 81,062.01 tons of zinc concentrates. ^ Arsenic As a by-product of copper smelting operations, 8,817,109 pounds of arsenic were produced, of which 8,789,626 pounds were refined. During the year 7,275,552 pounds were sold. Of this amount, 21,401 pounds were crude and 7,254,151 pounds were refined. Sulphuric Acid The Sulphuric Add Plant at Anaconda produced 52,304.40 tons of sulphuric acid, averaging 60 Deg. Beaume. This was used principally by the Fertilizer Department. Fertilizer The Phosphate Plant at Anaconda treated 68,733 tons of rock, from which there were produced 800 tons of merchantable phosphoric add and 33,660 tons of Anaconda Treble Superphosphate assaying more than 45% available Pa 05. Construction No important construction work was undertaken at the Reduction Works at Ana conda during the year. PWTC00006023 Reduction Work*--Great Fall* Copper Refinery Construction o an extension to the Refineries was authorized at an estimated cost of 51.180,000. This extension will increase the annual capacity of the Refineries from 216,000.OCX) to about 300,000,000 pounds per annum. An anode scrap melting furnace is also included in . the proposed1 extension. The provision of these facilities will enable the com pany to refine in .ifontarta .all copper, produced' there and deliver it to. Western and Middle West points, thereby1, saving ffbight to the Atlantic Seaboard, Work on this extension is proceeding 'Satisfactorily iand:.itii$expected that it wiB be completed about the middle of the current year. The output of the Copper Refinery at Great Fails was 210,552,163 pounds of cathodes, of Which 157,952,750 pounds were melted intb shapes at .that point. Zinc Plant The mechanical acid leaching and purification residue leaching steps, begun in 1924, were completed during the year, On July 25th authorization was given for the construction of a two unit extension to the Zinc Plant at a cost of $1,250,000. This extension will in crease the capacity of the plant from 180,000,000 pounds to 240,000,000 pounds per annum. Work was begun at once and pushed as rapidly as possible, with, the result that both units were put into commission soon after the dose of the,, year. The zinc plants treated 508,786.07 tons of. ore and other zinciferous material. Of this amount 26,054.55 tons were produced by mines of the Company and 482,721.52 tons of ore. and concentrates were purchased. The electrolytic zinc plant produced 161,795,891 pounds of zinc, 8,414,359 pounds of zinc in dross, 105Z00.13 pounds of cadmium, ar.d residue from which there were recovered 20,626.664 pounds of lead, 1,365,762 pounds of copper, 2,631,494,00 ounces of silver and 6,368.930 ounces of gold. Rod and Wire Mill During the month of August an extension of the Rod Mill was authorized at an estimated cost of $382,000. Work on this extension was partially completed at the end of the year. The mill at Great Falls rolled into rods 133,851,764 pounds of copper; 40,867,277 pounds of rods were drawn into wire, of which 14,453,655 pounds were made into strand. 43j041,411 pounds of rods were shipped from this mill to the Kenosha Plant of The American Brass Company to be drawn into wire. Miscellaneous Products Lumber The year 1925 opened with a favorable promise for the lumber industry, but the year had run but little when production exceeded movement of stocks from the mills, weak ness in the rational market developing and continuing throughout the year. The sawmill at Bonner cut 82,882,062 feet of lumber and purchased 3,436,128 feet, of which 57,058,579 feet were shipped to the departments of the Company; 30,528,429 feet 6 pHtCOOOOOOZ* ) ' c were sold commercially; 392,909 feet were used at the mill for repairs and construction, and 1,940,139 feet were supplied to the factory for manufacturing, or a total disposition of 89,920,056 feet; decreasing the stock of finished lumber on hand by 3,601,866 feet, making a stock on hand at December 31, 1925, of 60,026,594 feet. Coal At Diamondville, Wyoming, 456,643.05 tons of coal were produced; 298,826.05 tons were shipped to other departments of the Company; 126,336.80 tons were sold commercially; and 31,480.20 tons were used at the coal mines. At Washoe, Montana, 179,700.00 tons of coal were produced; 65,084.90 tons were shipped to other, departments of the Company; 113,327.10 tons were sold commercially, and 1,288 tons were used at the coal mines. At Sand Coulee, Montana, no operations of any kind were conducted during the year. Metal Roofing The Copperclad Shingle Plant at Rutherford, New Jersey, operated during the year. Difficulties encountered in the operation of this new plant were overcome and it is now operat ing on a satisfactory basis. The production of Copperclad shingles for the year amounted to 33,548 squares. The American Brass Company The output of manufactured products of the various plants exceeded the production for the year 1924, the previous record year, by 133,519,308 pounds, an increase of approxi mately 26%, establishing a new record of 653,268,973 pounds of copper, brass and nickelsilver, the manufacture of which was distributed among the various plants as follows; Ansonia 170,775,594 Buffalo____ ___________________ Hastings__________________ ____ Kenosha_____________ ___ Torrington ---- -------------------------Waterbury 96,887,891 Toronto ___ 79/93,835 101,884,543 126,486,022 62,228,802 15/12/86 653/68/73 The demand for Anaconda products during the year showed a gratifying increase, and in the attainment of the above output each plant increased its poundage over that of the previous year. At the dose of the year die unfilled orders on the books amounted to an appreciably larger poundage than at the beginning of the year and the outlook for 1926 is good. The policy of consistent expansion of Anaconda advertising is bringing cumulative re sults. This advertising, combined with the work of sales representatives in the field, has developed many new outlets for Anaconda products and is reflected by increased sales and profits. Expenditures for improvements to buildings and machinery during the year totalled $1/10/1154. 7 p*rC00006025 Raritan Copper Work* During the year a thorough study of power conditions of the plant was undertaken, resulting in the adoption of a plan for changing the power arrangements, and new equip ment is now being installed. The expenditure on this improvement will amount to about $1,600,000, The capacity of the plant will be increased from 38,000,000 to 45,000,000 pounds of copper per month, and die cost of refining will be materially reduced. The in creased capacity is being provided in anticipation of the production of copper from the Andes mines in Chile. The nickel department was enlarged to increase the production: of nickel sulphate from 20,000 pounds to 50,000 pounds per month. The metal output of the plant was 405,803,075 pounds of fine copper, 20,578,003.06 ounces of silver, 128,590.602 ounces of gold, 28,335 pounds of selenium, 570 pounds of tellurium, 454,815 pounds of nickel sulphate, 1,054,000 pounds of copper sulphate, 253.92 ounces of platinum, and 748.14 ounces of palladium. International Smelting Company International, Utah Both the Copper and Lead Plants operated continuously during the year. The Con centrator was enlarged to a capacity of 1,000 tons per day and the first of the new Mineral Separation units placed in operation February 4, 1925. The Concentrator Plant treated 284,766.33 tons of ore, from which there were pro duced 93,323.43 tons of concentrates, of which 40,696.92 tons were zinc concentrates, which were shipped to the electrolytic zinc plant at Great Falls. The Copper Plant treated 78.761.95 tons of ore.and concentrates, from which there were produced 20,669,490 pounds of fine copper, 1,735,051.82 ounces of silver and 15,821.781 ounces of gold. The Lead Plant treated 234,046.20 tons of ore and concentrates, from which there were produced 112,105,154 pounds of lead, 6,744,037.98 ounces of silver, and 18.019.467 ounces of gold. From the treatment of fume and flue dust there were obtained 240.60 tons of crude arsenic, averaging 92.06% As403. The Tooele Valley Railway Company handled during the year 750,249 tons of ore and miscellaneous freight, and 463,893 passengers. Expenditures on improvements during the year, mainly at the Concentrator, totalled $190,078.70. Miami, Arizona During the year the plant treated a larger tonnage than in 1924, but, owing to a de crease in the grade of material, the production for the year was somewhat lower than the year previous. At the Miami Smelter there were treated 387,789.88 tons of concentrates and pur chased ores, from which there were produced 177,227,211 pounds of copper, 536,498.90 ounces of silver, and 9,737.287 ounces of gold. . Utah-Dalaware Mina During the year there were produced 8,122.64 tons of copper ore and 90,715.13 tons of lead-zinc ore, which were shipped to International, Utah. 8 PNYC00006026 International Lead Refining Company Lead Refinery The refinery at East Chicago, Indiana, treated, 67,137.21 tons of lead bullion, from which there were produced 124,616,850 pounds of common lead, 6,592,715 pounds of antimonial lead. 7,571,423.79 ounces of silver, and 21,932.080 ounces of gold. Zinc Oxide The manufacturing, plants at East:' Chicago. Indiana, and at Akron, Ohio, were operated satisfactorily throughput the year. There were produced 44,797,773 pounds of merchantable zinc oxide, of which 18,712.729 pounds were, produced at East Chicago and 26,085,044 pounds were produced at Akron. Butte, Anaconda & Pacific Railway Company The Railway transported, during the year 5.384,543 tons of ore and other freight, and 22,851 passengers. The gross revenues were 1,725,586.04; operating expenses $1,364,945.44; taxes, interest, rentals of leased lines and loss 6n road :and equipment retired due to abandon ment of Georgetown Extension, less miscellaneous receipts, S188,255.50; net income $172,385.10, Anaconda Lead Products Company There were produced from the plant at East Chicago, Indiana, 11,323,101 pounds barrelled white lead, and, 12,101,288 pounds were sold. Walker Mining Company Operations at the mine were conducted throughout the year. 229,616 tons of ore were broken. The concentrator made an average recpvery of 94.488%. 263,411 tons of ore, averaging 2.432% copper were treated, from which 25,079.01 tons of concentrates, averaging 24.731% copper, were produced. There were sold to the smelter 26,015.58 tons of con centrates and ore containing 12,764,496 pounds of copper, 230,808.45 ounces of silver and 8,749.911 ounces of gold. Arizona Oil Company Operations of the Arizona Oil Company during the year resulted in the production of 362,413 barrels of oil. Distributions from Reserves to the extent of $293,760 were made by the Oil Company in 1925. From these distributions your Company received $146,880. South American Companies Andes Copper Mining Company Work on general plant construction and on the preparation for mining operations was resumed in February, 1925. From the time of resumption of construction all divisions of the work have been carried forward at a very satisfactory rate, and at the end of the year were in advance of the delivery of structural material and equipment. Mine Work during the year was done on the preparation of the South Sulphide orebody for mining; the removal of waste and storage of ore from the South Oxide orebody; the 9 PNYC00006027 removal of waste from the Central orebody, and the construction of housing accommodations for employees. The total lineal feet of all classes of openings driven during the year was 21,133.39, The waste removed amounted to 376,834 short tons. No direct exploration work was done during the year, consequently the estimate of ore reserves remains Unchanged. Reduction Work* The machine, carpenter and boiler shops, the foundry and the warehouse were prac tically complete and in full operation at the end of the year. Concrete was poured at the Fine Crushing Plant to the extent of 82.2% of the total required, which was sufficient to permit the erection of the structural steel building. The brick plant was completed except for the construction of the Oregon kilns. The plant was put in operation late ip November and by the end of the year 484,600 bricks had been cut arid 70,450 burned bricks produced from the round kiln, the balance being in the process of drying or burning. Potrerillo* Towniite Construction Construction in this department was directed principally toward the erection of work men's family houses, workmen's dormitories, American family dwellings and American single men's dormitories. La Ola Dam and Pipe Line* Construction on the La Ola dam started in October. By the end of the year the cut off trenches were 70% complete and the dam foundation and abuttments 50% complete. The driving of the Pedernales tunnel and the lining of the Llanta tunnel were com pleted in December. During the year 12.3 miles or 40% of the total pipe line trenching was completed. The Assembly plant for the manufacture of pipe, was brought into production in .August and 1583 twenty-foot lengths of 36 inch pipe were manufactured. An incline railway, approximately 3400 feet in length, for the transportation of pipe line material, was completed and put in operation in October. The major portion of the potable water development in Quebrada Larga, Colorados and Acerillos canyons was completed during the year. Six and eight-tenths miles of pipe line on the Colorados project, and 7.46 miles on the Quebrada Larga development were laid during the year. Barquito There are now in service 26 wooden lighters varying in capacity from 40 tons to 100 tons and two 100 ton sted lighters. Two more 100 ton steel lighters were ready for launch ing at the end of the year. The excavation for the Barquito Power Plant was 97% complete and one 3000 KVA turbine for temporary use was in process of erection. Labor At the end of the year there were 5558 workmen employed in all departments. 10 PNYC00006028 Potrerillo* Railway Company The tonnage hauled by the Railway Company was 46,252 short tons. During the year there were added to the rolling stock, three Mikado locomotives of 128,000 pounds weight on drivers, one switch engine of 97,000 pounds weight on drivers. 15 flatcars and 10 gondola cars. The work of reconstructing the Chanaral branch of the State Railway between Pueblo Hundido and Chanaral was begun. Fob a distance of 20.50 miles, the old 40 pound rail was replaced with 60 pound rail and ties were replaced where heeded. On the 60 pound rail, Section between Salado and Pueblo Hundido approximately 7.46 miles were repaired. The railroad is now operating satisfactorily. Santiago Mining Company There was no change in the condition of Santiago Mining Company's affairs. Chile Copper Company 1 There is attached hereto for your information a copy of the annual report of the Chile Copper Company. Financial There is also attached hereto a Consolidated Balance Sheet showing the financial con dition of the Company and its subsidiary companies at the close of business December 31, 1925, and an Income Statement for the year, certified to by Messrs. Pogson, Peloubet & Company, Certified Public Accountants. JOHN D, RYAN, Chairman of the Board. CORNELIUS F. KELLEY, President. New York, N. Y., May 3, 1926. 11 PNYC00006029 r ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1925 Fix e d : ASSETS Mines and Mining Claims, Coal Mines, Timber Lands, Phosphate Deposits, Water Rights and Lands for Reduction Works and Refineries, etc...... .............-- $130,447,161.33 Buildings and Machinery at Mines, Reduction Works, Refineries, Manufacturing Plants, Saw-mills, Foundries, Waterworks, Railroads, etc___ _______ 126,496,891.25 Investments in sundry companies___________ ______ 100,523.913.47 $357,467,966.05 Def er r ed charges and discount on bonds___ 14,665,182.67 Cu r r e n t : Supplies on hand, advances on Ores and Expenses prepaid______________ $ 20,640,595.38 Metals and Manufactured Products in process and on hand--at cost........................................ 50,645,457.86 Accounts Receivable ______________________________ 23,434,216.75 Marketable Securities_____________________________ 15,347,868.75 Cash_______________________ _________ 12,224,315.26 122,292,454.00 $494,425,602.72 W have examined into the affairs of Anaconda Copper Mining Company and of its Subsidiary Com panies and have verified the Assets, Liabilities and Income shown above. __ The Net Income is after deduct ing all Development expenditure of the year, Depletion of Coal and Timber Lands and Depreciation of Plants and Equipment We hereby certify that this Balance Sheet shows the financial condition at 31st December, 1923. of the Companies as an aggregate whole and that the accompanying Income Account for die year ending that date is correct as stated. POGSON, PELOUBET & CO., New York and Butte, 16th April 1926. Certified Public Accountants. 12 4i ] N11065.01 p*rC00006030 lawltiSTOseisp  ^r A c\ ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1925 LIABILITIES Ca p it a l St o c k of Anaconda Copper Mining' Company: Authorized, 6.000,000 shares of $50.00 each Issued, 3,000,000 shares...................................---........ Min o r it y In t e r e s t in Subsidiary Companies--............... Bo n d s Ou t s t a n d in g : First Consolidated Mortgage 6% Series A Sinking Fund Gold Bonds, due 1953--i------------------------- $104,731,000.00 7% Convertible Debentures, due 1938---- ---------------- 50.000.000.00 Ten Year 6% Series A Secured Gold Bonds, due 1929 -------------- u_____ _________________________ Butte, Anaconda & Pacific Railway Co. First Mort gage 5% Sinking Fund Gold Bonds, due 1944____ 16.933.000.00 2.513.000.00 In s t a l l men t Re c e ip t s Ou t s t an d in g , for first and sec ond installments on $40,000,000 Andes Copper Min ing Go. Convertible 7% Debentures, due 1943 Res er v e f o r De p r ec iat io n ----------------------------------- ------ Cu r r e n t : Notes Payable ..................... .......................................... S 5,000,000.00 Interest and Taxes Accrued......................................... 5,956,932.41 Accounts and Wages Payable...... ............................ .. 12,731,613.83 Dividend No. 90 payable 23rd February, 1926______ 2.250,000.00 Su r p l u s : Balance 31st December, 1924------------------------------- -Net Income of the year ending 31st December, 1925, per Income Account annexed 17.540,532.32 74,520,665.06 $ 92,061,197.38 Deduct, Dividends Nos. 87, 88, 89 and 90._________ 9,000,000.00 $150,000,000.00 2,014.214.33 174.179,000.00 , ,20 000 000.00 39,232.644.77 25,938,546.24 83,061,197.38 $494,425,602.72 Not*.--In order to comply with the Government Income Tax requirements for the purpose of comput ing depletion, an additional valuation of the mining property as of 1st March, 1913, has been recorded upon the books of the Company; but, for the sake of uniformity, the result of those entries has been omitted from the current statements. No t e.--This Balance Sheet does not reflect an item of $5,000,000.00 which was temporarily advanced on Anaconda Copper Mining Company's credit to Bergwerks Gesellschaft Georg von'Giesche's Erben. 13 PNYC000C6C31 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1925 EXPENSE Metals and Manufactured Products in process and on hand at beginning of year_____________________________________________ _____________ Ores and Metals Purchased----------------------------------------------------------------- -Mining, Reduction and Refining of Metals---------------------------------------- ----Manufacturing Expenses, including Selling Cost of Merchandise sold and Operation of Public Service Companies.-___ Administration and Federal Taxes--------------------------------------------------------Balance from Operations carried down-------------------------------------------- ----- $ 46,645,598.28 73.404.146.39 45,797,717.30 66.616.862.39 2,457,792.72 1,939,600.88 26,554,238.23 $263,415,956.19 Amount charged off this year for Depreciation and Obsolescence Interest, including discount on bonds, less income from marketable securi ties Balance, Net Income: Carried to foregoing Balance Sheet$17,540,532.32 Apportioned to Minority Interest__________________ 4,830.61 $ 5,049,347.20 10,482,519.35 17,545,362.93 $ 33,077,229.48 14 p*rcoooo i ^r ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1925 INCOME Sales of Metals and Manufactured Products-----------------------------------------Tolls, Royalties, Rentals, etc------------------------------ ------------------------------ Sales of Merchandise and Revenue from Public Service Companies______ Metals and Manufactured Products in process and on hand at end of year- $198,698,144.86 10,593,875.78 3,478,477.69 50,645,457.86 $263,415,956.19 Balance from Operations brought down$ 26,554,238.23 Income from Investments in sundry companies__________________________ 6,522,991.25 > 1c ST $ 33,077,229.48 15 p *y c o OQi 6033 Chile Copper Company CAPITAL STOCK December 31, 1925 Authorized, 5,400,000 shares, S25 each ...... Issued, 4,391,302 shares, $25 each............................... $135,000,000 109,782,550 Chile Copper Company and Chile Exploration Company OFFICERS Chairman of the Board President............................. Vice-President . . . Vice-President....................... Secretary and Treasurer . JOHN D. RYAN CORNELIUS F. KELLEY BENJAMIN B. THAYER HERMAN C. BELLINGER CHARLES W. WELCH DIRE John D. Ryan Cornelius F, Kelley Benjamin B. Thayer George H. Church Herman Alfred Houston, Resident Dir< TORS Percy A. Rockefeller Nicholas F. Brady Charles F. Brooker Andrew J. Miller Bellinger or, Chile Exploration Company Office at 25 Br o a d w a y , Ne w Yo r k Mines at Ch u q u ic a ma t a , Ch il e N11065.02 To the Shareholders of Chile Copper Company : Your Company and its subsidiary operating Company, Chile, Exploration Company, which holds the title to all property in South America, conducted operations throughout the year upon a satisfactory though somewhat restricted basis. The Exploration Company pro duced during the year 219,516,420 pounds of electrolytic copper at a cost delivered of 8.369c per pound, including depreciation, taxes, interest and bond discount, but exclusive of depletion. This compares with the cost of 7.992c for the previous year, an increase of .377c per pound, which was due to the following, causes: increased Charge for depreciation; increased taxes resulting from the adjustment and settlement of capital stock taxes for 1925 and prior years; increased taxes, due to increased' income; and increased Chilean customs duties. The average price received for copper sold during the year was 14.273c per pound delivered. The construction of additional units to the plant, which will increase the productive capacity to 350,000,000 pounds per annum, was authorized and was carried on during the year. It is estimated that these additional units will cost approximately $16,000,000. Expenditures on construction during the year amounted to $7,111,523.20. Charges to obsolescence, profit and loss, etc., totalled $736,246.06. , The book value of property accounts was thus increased from $142,276,090.95 at the beginning of the year to $148,651,368.09 at the close of the year, an increase of $6,375,277:14. Your Company had on hand at December 31, 1925, marketable securities and cash amounting to $8,512,542.46, as compared with $14,910,945.29 at the close of the previous year. This decrease was due to the large construction expenditures made during the year. Mining Claims and Government Concessions No additional property was acquired by the Company during the year 1925. Mine Two new benches were opened during the year, namely, E-2 and E-3. The total length of all bench faces developed as of December 31, 1925, amounted to 52,114 feet as compared with 33,304 feet as of December 31, 1924. Ore mined during the year amounted to a total of 7,778,910 short tons, averaging 1.592% copper. The total of all ore shipped from the Mine to the Plant from the start of operations to December 31;, 1925, amounted to 44,345,687 tons, averaging 1.651% copper. Waste removal during the year amounted to a total of 5,400,221 short tons, averaging 0.47% copper. PNVC0C006035 In'blasting, 31,316 feet of main and auxiliary tunnels and 377,957 feet of churn drill holes were blasted during the year. The following additional mine equipment, necessary to prepare the Mine for the increased rate of production and to handle the tonnage of ore required for the extension to the Plant, has practically all been delivered and placed in operation: 1 Large Revolving Electric Shovel 1 Standard Revolving Electric Shovel 4 Standard Electric Railway Type Shovels 2 Small; Diesel Revolving Shovels 12 87-ton Superheater Locomotives 40 20-yard Air Dump Waste Cars 23 Churn Drills 6 50-ton Flat Cars 2 Oil Tank Cars 1 120-ton Locomotive Crane 1 40-ton Locomotive Crane 1 20-ton Locomotive Crane 1 Spreader Plow The southern outlets to the individual benches are practically completed and are being connected to the Plant with a new main line. Northern outlets are being constructed for such of the intermediate benches as have not been previously connected to the system of northern approaches. Plant A total of 7,785,875 short tons of ore was crushed during the year. The average leaching extraction obtained from the 731 charges treated was 90.05% as compared with 89.73% achieved during the previous year. There were produced during the year 219,516,420 pounds of electrolytic copper. The following tabulation shows a comparison of results by quarters: Period 1925 1st quarter 2nd quarter 3rd quarter 4th quarter Ore Crushed Short Tons 1,979,085 1,897,919 1,983,595 1,925,276 Average Per Day 24,739 24,024 23,899 24,371 Per Cent Copper in ore Leached 1.634 1:527 1:605 1.605 Per Cent Ampere Effi-. ciency 86.05 86.03 88.03 87.50 Per Cent NetRe- covery 89.94 89.46 89.92 92.15 Pounds of Copper Produced 58,482,331 51.697,582 54,383.433 54.952,874 Year 7,785,875 24255 1.593 ' 86.91 90.36 219,516,420 The smelter melted 219,866,000 pounds of electrolytic copper into marketable shapes during the year. Construction During the year plans were drawn, orders placed and construction started on the addi tional units required to bring the plant capacity up to 350,000,000 pounds per year. Hous- 20 PNYC00006036 ing facilities and welfare provisions are also included in the program to accommodate the increased labor force necessary for the larger production. It is expected that the new units will be completed early in 1927. Census The average number of inhabitants--men; women, and children--in camp in 1925 was 15,433 as compared with 13,339 for 1924. On December 31, 1925, the. population of the Chilean Village was 16,807, and of the foreign section 1,378, a total of 18,185, which was the maximum month. The average working force for the year 1925 was 5,987 men, of Whom 5,027 were on operation and 960 were on construction. For December, the average working force was 7,650 men, of whom 5,633 were on operation and 2,017 were. On construction. The total number of men on the payroll for December Was 10,497. This; based on the average working force of 7,650, shows an attendance of 72.9%. During the year the Company had a 37.6% labor movement. 6,643 men out of a total of 10,497 men on the December payroll, or 63.2%, received the attendance bonus. The labor movement figure is high, due to the large increase in the construction force. There were 1,532 pupils enrolled in, the Chilean Schools as of December 1, 1925. The average attendance during the year was 1,172. In the foreign school there were 69 pupils enrolled at the close of the term. Tocopill* An average of 38,857 K.W. was generated. The fuel oil consumption for the year in Tocopilla amounted to 1,077,740.44 barrels, which represents an oil factor of 1.056 pounds consumed per K.W. Hour generated or, conversely, 315.84 K.W. Hours generated per bar rel (42 gallons) of fuel oil. Financial Attached hereto you will find a Consolidated Balance Sheet at the close of business December 31, 1925, together with an Income Statement for the year, certified to by Messrs. Pogson, Peloubet & Company, Certified Public Accountants. JOHN D. RYAN, Chairman of the Board. CORNELIUS F. KELLEY, President. New York, N. Y., May 3,1926. 21 PNTC00006037 CHILE COPPER COMPANY and Subsidiary Companies Consolidated Balance Sheet;--31 st December, 1925 ASSETS Fix e d : Property Investment .......... ................................. *-----Plant and Equipment at Mines, Reduction Works, Power Plants, Railroads, Steamships, etc.-.-..,----- $ 99,291,999.82 49,359.368.27 Less Reserve for Depreciation of Plant and Equip ment .--------------------------------------------- 148,651,368,09 19,180,705.68 $129,470,662.41 Def er r ed C h ar g es including discount on bonds.............. 3,315,399.96 Cu r r e n t : Supplies on hand and Expenses prepaid-----------------Copper in process and on hand, at cost------------------Accounts Receivable___ Marketable Securities Cash and Call Loans__ 7,509,395.20 2,537,028.65 4,437,890.62 4,059,437.50 4,453,104.96 22,996,856.93 $155,782,919.30 LIABILITIES Ca p it a l St o c k : Authorized--5,400,000 shares of $25.00 each Issued--4,391,302 shares $109,782,550.00 Co l l a t e r al Tr u s t Go l d Bo n d s , due 1932: Authorized--$100,000,000 Issued--$35,000,000 Series A, 6% Convertible Outstanding__________________ ______________ 34,991,500.00 Res er v e for Renewals and Replacements, Insurance, etc. 559,459.-40 Cu r r e n t : Interest and Taxes accrued________________________ $ 872,534.16 Accounts and Wages payable..................................... 1,451,617.53 2,324,151.69 Su r p l u s : Surplus 31st December, 1924Net Income of the year 1925, per statement annexed- 7,164,095.17 11,939,150.56 Distributions to Stockholders- 19,103,245.73 10,977,987.52 8,125,258.21 $155,782,919.30 We have examined into the affairs of Chile Copper Company and of its subsidiary companies and have verified the Assets, Liabilities and Income shown above. We hereby certify that this Balance Sheet . shows the financial condition: at 31st December, 1925, of the companies as an aggregate whole and that the accompanying Income Account for the year ending that date is correct as stated. New York, 31st March 1925, POGSON, PELOUBET & CO.. Certified Public Accountants. 22 N11065.03 '`ncoc t03. CHILE COPPER COMPANY and Subsidiary Companies Consolidated Income Account--Year Eliding 31st December, 1925 Op e r a t in g Re v e n u e : Copper sold--207,978,026 pounds at an average of 14.273 cents per pound Pr o d u c t io n Co s t --------------------------------- -------------------- Op e r a t in g Pr o f it Ot h e r In c o me '-------------------------------------- ------------------- Ch a r g es Ag a in s t In c o me : $ 29,684,407.13 11,293,499.32 18,390,907.81 997,100.28 19,388,008.09 Taxes and Miscellaneous Charges...................... ......... $ 2,567,923.25 Interest and Discount on Bonds__-------- ---------------- 2,239,958.92 For Depreciation and Obsolescence of Plant and Equipment 2,640,975.36 7,448,857.53 Ne t In c o me , carried to Balance Sheet,_________________ $ 11,939,150.56 No t e.--In order to comply with the Government Income Tax requirements for the purpose o comput ing depiction, an additional valuation of the mining property as of 1st March, 1913, has been recorded upon the books of the Company; but, being made for fax purposes only, the result of those entries has been omitted from the current statements. 23 pNtC00006039