Document 8VxQqkwR4RKqMoXMGqDaeLGk5

Anaconda Copper Mining Company CAPITAL STOCK December 31, 1927 Authorized, 6,000.000 shares, $50 each.............................. $300,000,000 Issued, 3,000,000 shares. $50 each.............................. $150,000,000 OFFICERS Chairman of the Board President .... Vice-President . Vice-President . Vice-President . Secretary and Treasurer General 'Auditor Assistant Secretary Assistant Treasurer JOHN D. RYAN CORNELIUS F. KELLEY BENJAMIN B. THAYER JAMES R. HOBBINS ROBERT E. DWYER ALBERT H. MELIN JAMES DICKSON RALPH D. COLE DAVID B. HENNESSY DIRECTORS Percy A. Rockefeller John D. Ryan Benjamin B. Thayer Cornelius F. Kelley George H. Church John A. Coe Nicholas F. Brady Andrew J. Miller Albert H. Melin OFFICES An a c o n d a , Mo n t a n a 25 Bio a d w a y , Ne w Yo s k PNYC0C0Q9939 To the Shareholders of Anaconda Copper Mining Company: The year 1927 was hot a particularly prosperous one for the non-ferrous metal industry as a wpole or tor your Company, due to the very low metal prices that obtained throughout the year. The Engineering and Mining Journal reports the following average prices: copper, 12.92c; lead, 6.755c: zinc at St. Louis. 6.242c; Stiver, 56.370c--a decrease in each case from the prior year's average quotations of copper, 13.795c; lead, 8.417c; sine, 7.337c, and silver, 62.107c; The recession in the volume of domestic business from high level of 1926 was not met by producers with a curtailment of production adequate to meet the situation, until stocks had accumulated to a large total and prices had declined to a very low level. During the last half of the year copper production was somewhat; curtailed, and the price of the metal made an advance of about 1.5c per pound- The export ; business during the year showed a satis factory increase in volume, the total Shipped from North and South America being 641,865 tons as compared with 523,861 tons for the previous year. The decrease in the inepme of your Company from that of the previous year was due to its curtailed operations and the low prices received for its products. Construction Construction expenditures during the year, including items authorised during previous years, totalled $7,339,389.09, and are summarized as follows; Butte Mines--Mainly on completion of installations of electric hoists at the Badger State, Mountain Con and Belmont Mines---------------------------------$1,239,367.89 Reduction Works, Anaconda--Construction of new electrolytic zinc plant and remodelling of copper concentrator and crushing plant-------------------------- 3,576,980.83 Reduction Works, Great Falls--Installation of Secpndary Purification Plant at electrolytic zinc plant and miscellaneous construction----------------------------- 385,164.78 Slag Treating Plant, East Helena--Construction of plant tor treatment of East Helena slag_____________________________ ----------------------------------------- 474,304.28 The American Brass Company--Improvements to buildings and machinery.--- 774,030.31 Raritan Copper Works--Mainly on Power Plant improvements.---------------------- 442,173.17 International Smelting Company--Mainly on mill Improvements and Cottrell Treater at Tooele Plant------------------- ----------- --------------------------------------- 205,405.13 Miscellaneous Construction Items------------------------------------------------------------1----- 241,962.70 .3 Result* of Operations Following is a summary of the results of the operations of your Company, its depart ments and its subsidiary and affiliated companies, during the year. Butte Mine* Development During the year 1927, drifts, cross-cuts, raises, winzes and shafts in the development work of the Company were extended 30.67 miles, as compared with 34.41 miles during the year 1926, a decrease of 10.87 per cent. Mine Production The various mining properties owned by the Company produced the following tonnages during the year: Copper Ore and Precipitate* . 2,910,519.71 45,483.46 Utah-Delaware__________ L855.84 Utah-Delaware Leasers__.. 30,233.17 Conda Leases ______ _____ Phosphate Zinc Ore Lead-Zinc Ore* Rock 13.234.59 3.2S4.04 148,990.94 17.872,65 18,086.80 27,264.40 Washoe . ....... .......... ...................................................................... Coal 326,383.90 181.943.50 Production of zinc ore was limited to the amount necessarily extracted in the course or development work, because of the low price which prevailed for zinc throughout the year and the available tonnage of custom concentrates. Miscellaneous Product* Miscellaneous production consisted "t 90,627,370 119 .23,305 1,353 34,107 6.957 feet, tons. lumber phosphoric add. Anaconda Trefcle Superphosphate, ammonium phosphate, sulphunc acid. PNyC00CC994I 46,34-1,514 pounds, zinc oxide. 12,916,394 " white lead. 376567 " cadmium. 28,765 '* selenium. 1,036 " tellurium. 577,150 " nickel sulphate. 598,651 " copper sulphate. 125.36 ounces, piatir.um. 639.80 " palladium. Successful experiments for granulating arse: . for use as a wood preservative were conducted and production is now on a commercial scale. Slag Treating Plant---East Helena, Montana During the year a contract with the American Smelting and Refining Company was entered into for the treatment.; of waste; slag from the blast furnaces at their plants in Montana and Utah, to recover zinc contained ip the slag. An experimental plant consisting of a cpal dust fired water jacketed furnace, brick flue, steel cooling flue, fans and bag house was built on the slag dump of the | East Helena plant and put into operation at the end of the year. This plant will recover the zinc as a fume which will be sent to the electrolytic zinc plant at Great Falls for final treatment. Reduction Work* The plants of the Company treated the following tonnages: Concentrators Ore 7,866,785.04 480,165 67 no 58,042 75 Miami Smelter Smelters Cupreous Material Lead Material 906,534.55 116509.86 237,810.80 288,300.09 Work of remodelling the Anaconda concentrator to treat ore by Selective Flotation was completed in August, materially increasing the grade of concentrates, and reducing smelting costs. A Cental Crushing Plant was completed during December, feeding two sections by the end of the jrcar, and will be extended to other sections in 1928. Production, including purchased and toll material, was as follows: Copper, Lhi. Lead, Lbs. Silver, On. Gold, On. Anaconda ___________________ 221,300270 Tooele ;________________________ 20,119,391 Miem; 125,415,476 .................. 146,073,315 .................. 6,638,126.86 8,001707.37 344,699.60 32,674.091 56,849.889 9,003.570 5 PiNyCG000994d Refineries Copper The output of the copper refinery at Great Falls was 245,402,154 pounds of cathodes, of 'which 236.035,761 pounds were melted into shapes. Improvements to the power system at Raritan Copper Works have been completed. These include two 5.100 and one 3,125 KVA ttirbo-generators obtaining steam from three 1.2C0 BH? to3ers operating at 360' poun.ds. pressure. Power costs have been reduced and ampere efficiency increased. The coal pulverizing plant has been enlarged and powdered coal has been substituted for oil as a fuel throughout the plant. The meal output of the plant was 378,099,665 pounds of fine copper, 18,896,528.33 ounces of silver, and 147,437.949 ounces of gold. Zinc The zinc plants treated 12,913.32 tons of ore produced by the mines of the Company and 587,440.31 tons of ores and concentrates purchased from other producers located in Montana, Utah and Idaho, a total of 600,353.63 tons. The electrolytic zinc plant produced 225,133,444 pounds of zinc, 12,403,407 pounds of zinc in dross, and residue from which there were recovered 20,438,939 pounds of lead. 2,037,910 pounds of copper, 3,008,125.81 ounces of silver, and 7,307.887 ounces of gold. Construction at Anaconda of a new electrolytic zinc plant of 150 tons daily capacity was begun in May, 1927, and was completed. Production therefrom began in Februarv, 1928. Lead The International Lead Refining Company at East Chicago, Indiana, treated 86.560,93 tons of lead bullion, from which there were produced 162,012,930 pounds of common lead. 6,519,910 pounds of antimonial lead, 7,433720.00 ounces of silver, and 32.821.063 ounces ot gold. Rod end Wire Mill 11 The mill at Great Falls rolled into rods 165,954,810 pounds of copper; 36,940,088 pounds of rods were drawn into wire, of which 19,839,667 pounds were made into strand. 45,926,821 pounds of rods were shipped from this mill to the Kenosha plant of The American Brass Company to be drawn into wire. p h y c o c o o "**5 Q ) The American Brass Company The constantly increasing demand for copper and brass products at and in the vicinity of Detroit, Michigan, made it desirable to enter the manufacturing business in that locality. Accordingly, negotiations were opened with the Detroit Copper & Brass Rolling Mill, a company with well established plants and business, which resulted in the acquisition of the property'and plants of the Detroit .Osrtipgfiyi at a-.price of $12)600,GG0.Q0, This purchase was financed: in jiart by short: term notes shown/on Balance Sheet as "Note* Payable." These ptants. with the improvements that are: being made, will enable The American Brass Company to adequately meet the requirements tor copper and brass products in this important industrial locality. JJantitactured, production, although less than the high record established in 1926, con tinued at a Satisfactory ratq, distributed among the various: plants as follows: Anspnia ..... Buliaio.... ................ 152.249,53? pounds 78,694,940 " Detroit ........... 28,931.978 " Hastings ...... 96,413.118 Kenpsha ... ....................... 117,399,303 " Tqrrtngton ..... .............. 61.515.01i9 Waterbury ....................... 89,(503.528 " Toronto................. 18,001,753 642,911,178 pounds Particularly gratifying growth was noted in the output of the Company's Anaconda Brass, Pipe and its special patented alloys--Anaconda Phosphor Bronze, Tobin Bronze Weld ing Rods, Ambrac Metal and Everdur, a manganese-silicon bronze having the strength of steel and which resists rust. Railway* Tons Freight Butte. Anaconda & Pacific Railway Company 5,020.046 Tooele Valley Railway Company,.:............ ....... ..... ....................... 831,559 Passengers Carried 13,060 538.119 Companies Controlled Bat Not Wholly Owned North Lily Mining Company Development in the North Lily mine was continued during the year and has been most encouraging. A four compartment shaft was sunk to a depth of 954 feet. The shaft was connected with the 700 haulage level of the Tintic Standard Mining Company early in Janu ary, 1928. Further shaft sinking and development work will be continued, together with surface improvements consisting of change house, warehouse, hoists and compressor with ore 7 r i t - ; - a * 4 PwrC0C009944 bins, and aerial tramway to connect with the 0, & R. G. Railway. In the course o develop ment 21,485.945 tons of ore. averaging 25.5% lead, 16.17 ounces silver, and .1098 ounces gpld were extracted 'and shipped to Intematiortai. The improvements should .be completed by May 1, 1928, after Which the mine will be ready for production. Walker Mining .Company Operations at the Walker mine were conducted, throughout the year. 383,819 tons of ore were broken. The concentrator made an average recovery of 92,696%. 340,156 tons of ore, averaging 1.49% copper were treated* from which 1:9,268,41 tons of concentrates, averaging 24,388% copper were produced. There iyere sold to the; smelter 19.406,62 tons of ore and concentrates yielding 8,701,138 pounds of copper, ISO,930.32 ounces of silver, and I2,4I0;83! ounces of gold. Arizona Oil Company Operations of the Arizona Oil Company during the year resulted in the production of 254,185 barrels of oil. Foreign Companies Silesian-American Corporation A dividend of 7% on the preferred stock of this company was paid during the year. The properties of its subsidiary, Giesche Spolka Akcyjna, Katowice, Poland, operated satisfactorily throughout the year. The company produced approximately 123,800,000 pounds of zinc, 10,800,000 pounds of lead and 2,568,000 metric tons of coal. Various testing units were erected and operated during the year. Modernization of old plants and construction of new plants for flotation concentration, fire concentration of low grade material, roasting, sintering and electrolytic zinc were begun and should be completed during 1928. Santiago Mining Company There was no change in the condition of Santiago Mining Company's affairs. Andes Copper Mining Company Chile Copper Company The Andes Copper Mining Company completed part of its plants and began opera tions during the year. A separate report of its activities win hereafter be issued. Copies of 3 ; 1 PNYC00009945 the annual reports of Andes Copper Mining Company and of Chile Copper Company are attached hereto for your information. Financial There is attached hereto a Consolidated Balance Sheet, including .Andes Copper Min ing Company, showing the financial condition of the Company and its subsidiary companies at the close of business December 3;l, 1927,. 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 1. 1928. \ PNYCCGC09946 1 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1927 Fix e d : ASSETS Mines and Mining Claims, Coai Mines, Timber Lands, Phosphate Deposits, Water Rights and Lands for Reduction Works. Refineries and Manufacturing Plants ___ .... $136,478,832.95 Buildings and Machinery at Mines, Reduction Works, Refineries, Manufacturing Plants, Saw-mills, Foundries, Waterworks and Railroads_________ 172,775,604.98 Investments in sundry companies.. 98,115.866.76 $407,370,324 o') Def er r ed Ch a r g e s and discount on bonds- 13.568.010'U Cu r r e n t : Supplies on hand, advances on Ores and Expenses prepaid--------------------------------------------------- ------. $ 19,573,140.60 Metals and Manufactured Products in process and on hand--at cost, less reserve 53,323,615.93 Accounts Receivable__________________________ Marketable Securities_________________________ Cash___________________________________ 162232,691.28 7,238,250.64 10,82223924 107.1*'or $528.12*. We have examined into the affairs of Anaconda Copper Mining Company and of its ' , - . Companies and have verified the Assets, liabilities and Income shown above. The N* Income ' . dcdnctaigali Development expenditure of the year. Depletion of Coal and Timber Lands anc : -- areas of Plants and Equipment. We hereby certify that this Balance Sheet shows the financial condition at 31st December or the Companies as an aggregate whole and that the accompanying Ineoeae Account for the year -r.: r-e , date is correct as stated. POGSON, PELOUBET 4 CO Certified Public Acceunuru Mew York and Butte, 9th April 1928. 10 i1 ! 11 N11764.01 i' t3) ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1927 LIABILITIES Ca p it a l St o c k of Anaconda Copper Mining Company: Authorized, 6.000,000 shares of 550.00 each Issued, 3,000,000 shares..,............................... ........... .. Min o r it y In t er es t in Subsidiary Companies _r................ Bo n d s Ou t s t a n d in g : First Consolidated Mortgage Series A 6Jo Sinking Fund Gold Bonds, due 1953___ _ 5104,731,000.00 Fifteen Year 7Jo Convertible Debentures, due 1938. 50,000,000,00 Ten Year Senes A 6Jo Secured Gold Bonds, due 1929 16,933,000.00 Butte, Anaconda St Pacific Railway Co, First Mortigage Sinlting Fund Gold Bonds, due 1944__ 2,316,000.00 $150,000,000.00 1,909,244.41 173.980,000.00 Co n v er t ibl e 7C5, De b e n t u r es of Andes Copper Mining Co.,1 dde 1943._______ ______ ,_____,__;__ ____ ReSERVEFOR De p r e c ia t io n .......... ............. .................. Cu r r e n t : Notes payable ___ ____________ ___ ________ Interest and Taxes accrued____i_____________ Accounts; .and Wages payable_______________ Dividend Nb. 98 payable 20th February, 1928 ------$ 12,000,000.00 ____ 6,809,348.66 .... ... 8,869,945.76 ____ 2.250.000.00 39,890,000.00 46,371.364.92 29,929,294.42 Su r p l u s ; Balance 31st December, 1926 _$ 84,925,111.12 Net;Income of the year 1927, per Income Account annexed---------- i--------------------------------------------- 10,123,258.45 $ 95,048,369.57 Deduct, Dividends Nos. 95, 96, 97 and 98__________ 9,000.000.00 86,048,369.57 $528,128,273.32 No t e--la order to comply with the Government Income Tax requirement! lor the purpose ol com puting; depletion, aa additional raluatioa 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. 11 t ~\ 5 t pNrC0000994d f) wr a n a c o n d a c o p p e r min in g c o mp a n y and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1927 EXPENSE Metals arid Manufactured Products in process and on hand at beginning of year,:______________________________________________ ____ Ores and Concentrates and Metals purchased--........................................ . Mining, Reduction and Refining of Metals--................... --................ .. ...... Manufacturing Expenses, including Selling------- ---.....,------------------------Cost of Merchandise sold and Operation of Public Service Companies____ Administration Expense and Federal taxes____ ____ __________________ __ Balance from Operations carried down____ _______ _________________ ____ $ 46,144.207.39 62.140.6S2.60 49,379.683.63 63,762,787.78 2.030.341.39 1,737,193.28 21.287,960.49 $246,682,860.96 Amount charged off this year for Deprecia: -,n and Obsolescence_________ Interest, including discount on bonds, less income from marketable secur ities ,___________________________________________ _________________ $ 4,763.671.92 13,382,540,91 Balance, Net Income: Carried to foregoing Balance Sheet$ 10,123,258.45 Apportioned to Minority Interest (loss)____________ 2,117.13 10,121,141.30 > $ 28,269,354.13 12 PNYC0CG09999 ,;naanh bj ismmmitt&M&rmmf&iTMsnew,.~ ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31 *t December, 1927 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 $180,894,558.31 9,333,241,84 3.131,444.88 53,323,615.93 $246,682,860.96 Balance from Operations brought down--------------------------------------------------$ 21,287,960.49 Income from Investments in sundry companies--------------------------------------- 6,981,393.64 - ! I $ 28.269,354.13 13 PNV C0000995Q Andes Copper Mining Company CAPITAL STOCK December 3!, 1927 Mo Par Value Authorized, 3,600,000 Shares Issued, 1,762,219 Shares OFFICERS Chairman of the Board President .... Pice-President . Pice-President . Secretary and Treasurer General Auditor Assistant Secretary and Assistant Treasurer . JOHN D. RYAN CORNELIUS F, KELLEY BENJAMIN B. THAYER WILLIAM WRAITH DAVID B. HENNESSY JAMES DICKSON W. KENNETH DALY DIRECTORS Percy A. Rockefeller John D. Ryan Benjamin B, Thayer Cornelius F. Kelley William Wraith Albert H, Melin Nicholas F. Brady Robert E. Dwyer James Dickson Office at 25 Beo ad w ay , Ntw Yo s k Mines at Po t s er iu -o s , Ch il e PNYC00GC9951 To the Shareholders of Andes Copper Mining Company: As this is the first annual report of.the operations of your Company, it is pertinent. tOj give a resume o its development and activities. From January 20, 1916, the date of acquisition by your Company of the mining properties at Pptrerillos, Chile, to January 1, 1925, the following work was performed: Construction of 57,80 miles of railroad with the necessary port facilities at the seacoast; drilling of 168 chum-drill holes having an aggregate depth of 17.90 miles;: driving of drifts, crosscuts, raises and winzes aggregating 17.75 miles, including the main haulage runnel; erection of 79.u9 miles of temporary transmission line apd a temporary 3.000-kiicwatt power plant: installation of 124 mites oi pipe lines, to carry potable water: driving of 1.85 miles of tunnels oh the metallurgical1 water supply line, and erection of 237 dwellings. The years 1921-2-3 were marked by curtailment of development and construction work by, reason of the condition of the copper market. With the exception of a small .amount oi aqueduct tunnelliflg,'a complete suspension, of work occurred in the year 1924- In 1925, construction oirihffWralhifgical plan: was Staffed and preparation of the mine for produc tion was resumed,,: A. metallurgical fjlatit, having a capacity of 12t5C<) tons per day, fof the treatment of . sulphide: drsf, the 'preparation, of :the: rninefoi the production of this tonnage, the construction Of. the pipe line to carry water for metallurgical purposes, and the construction of1 dwellings to house the employees necessary for the operation of this plant were com pleted in the, year 1926. Construction of ;s metallurgical plant, haring a daily capacity or 7,500 tons, for: tig, tmatirient; of o|idei.oresi wah.started jti 1924 and ft is expected that this plqnt will bercbmpiietldl Iby Slay, l#28< The ftiUosyihg .figures indicate, the volumeof work that will have been performed dur- injj the: peri0dl!:F||fu^i|y,',10,i iE25^*.tojliMay, 1, 1928: Structural steel erected 18,602 tons, concrete poured iaiietyar^Sj.pJWawtioo;|ptjr{oni|g<i 901,300 cubic yards, brick, laid 10.590.000, .hoUsgdi'.etaSpfSd, 243, permanent transmission fine erected 89,6 miles, and the installation of f0| ftiilfei of pipe Bnfs 'fipr the delivery of potable water. Your attention is called to the Consolidated Income Account for the year 1927. You will note that .qn.fl^i^algj of :32s70j&695 pouhds of.-epppertthe gross:income before the deduc tion of : depreciation, bond interest and discount and miscellaneous charges was $3,424,966.80 Interest iand'ldiScpUptfbniddmtiiurels'aftioiShfedisto!^,952,620,16.. }onsidering the.magnitude of! .thisfenterpriseii^di^H4, 44 jwail'thjS first yeario^ its operation in part, the results are ver, satisfactory, and have demonstrated not only the importance and value of the property as a great low cpdticppijfer! p4>4$'4''w*!6' 10 ability to 'tarn jubBtantinj;; returns at any probable price fbr copper 'jCpndiiiOas1 itSiibding fully operated, hut[ also: that the estimates asjto the,,prbi|uctiii^f|dafid6ily ff the !pii|t$;:were conservative ind that afii output of 225,000,000 pounds of copper per annum can be made. 16 PMYC00009`352 / W, Mining According to estimates made in 1924 the ore reserves at that time were calculated to yield, in tonnage to the metallurgical plants. 137.400,000 tons having an average content of 1.51%. copper. The ore mined in December, 192.6 and the year 1927 was as follows: Short Tons Sulphide Ore to the Reduction Plant....... ......... 2.14*027 Oxide Ore removed and stored............... .... . 2.123,793 Oxide Ore to the Converter Plant........... ......... 14,903 fc Cu. 1.517 2.487 5.909 Total . ___ __ .. ................... ......... 4.232,723 2.014 In addition to this, waste material overlying the Central Oxide Orebody was removed to the extent of 977,071 tons. There were driven in ail classes of underground Openings................................ ................... ......... --........... 77/48.6 feet Diamond drilling performed..... .. ......................... ............. 9,940 feet South Oxide Orebody Work in this orebody has been confined to the removal and storage of oxide ore to prevent its loss by caving resulting from the removal of ore from the South Sulphide Orebody. The ore removed, as stated elsewhere, amounted to 2,125,793 short tons assaying 2.487% copper. This ore will be available for treatment in the oxide metallurgical plant at any time. South Sulphide Orebody Preparatory work in Block No. 1 of Stope "A" was completed during the year and 68% of the calculated ore in the block was extracted. The total sulphide ore production came from this area. Preparations for mining Block No. 3 of Stope "A" were completed but no under cutting of ore was started. It is expected that production from Block No. 3 will start in February, 1928. In Stope "B" preparations for mining were carried on with the expecta tion that the block will be ready for production in 1928. Central Oxide Orebody Preparatory work for mining oxide ore from this area was actively prosecuted during the year. It is expected that ore extraction in this area will start in April, 1928. Mein Haulage Adit The driving of the Main Adit to the north of the Oxide Ore Bin system was com pleted during the year. Driving of the Main Adit to the south to provide room for handling ore trains is in progress. 17 PNTCQ0GC9953 Oxide Ore Bin System Of the six ore bins planned, two have been completed, the third is almost completed, and excavation on two of the others is well under way. All concrete work in the Main Adit station under these bins has been completed. The driving of four ore passes serving the ore bins has been completed, and three more are pgrtiallv driven. Placing of the sfeei lining in the ore passes was started in December and will be completed by the time that oxide ore is to be mined. Concentrator At the concentrator there were treated 2.120,762 tons of ore having an average content of 1.517% copper. This includes tonnage treated in the starting-up period in the latter part of December, 1926. Concentrates produced amounted to 107,155.63 tons, having an average content of 26.232% copper. The recovery was 87.35% of the total copper and 92.46% of the sulphide copper. Smelter The smelter produced 54,377,048 pounds of copper, 133,621.02 ounces of silver and 7,124.574 ounces of gold, Of the above copper production, 587,841 pounds were used in the plants of the Company. Power Plant The Barquito Power Plant generated 37,778,121 kilowatt-hours; the hydroelectric power plant, known as the Montandon station, produced 11,994,800 kilowatt-hours, and 13,193,620 kilowatt-hours were generated at the Smelter Power House from waste heat steam. Water Supply The first year's operation of La Ola pipe line, which carries the water tor met allurgical purposes, was interrupted by but one shut-down which was of four hours duration. The fresh water supply was increased 430 tons per day by the installation of 8.7 miles of pipe line to additional sources of supply. Construction The major construction work for the year was that in connection with the met allurgical plant for the treatment of oxide ores. During the year the following work was done: Excavation 309,617 cubic yards; concrete poured 62,500 cubic yards; steel erected 18 PNYC0000996A 1 % 4 4,559 cons; dwelling's erected 29; one 7,5QG KVA turbine and one l.OOOhorsepower boiler erected at the Barquito Power Plant. Six 60-ton lighters, and one steam tug were added to the port equipment at Barquito. Land ; During the year two parcels of land containing fresh water springs were purchased, bringing the total acreage held by the Company to 290.376.77 acres. Potrerillo* Railway Company During the year there were shipped from Barquito to Potrerillos 121,017 short tons of freight, from Pueblo Hundido to Potrerillos 12,606 tons, from Potrerillos to Barquito 27,297 tons of copper, making a total of 160,920 tons of material shipped. The following additions were made to the rolling stock: One Consolidation and one Mikado locomotive; 10 flat cars; 3 passenger cars, and 5 tank cars. Expenditure* The expenditures made during the year on mine development, metallurgical plant, railway and miscellaneous equipment, amounted to $10,028,797.66. Financial Attached hereto is a Balance Sheet and Income Account for the year 1927, certified to by Messrs. Pogson, Peloubet ft Company, Certified Public Accountants. JOHN D. RYAN. Chairman of the Board. CORNELIUS F. KELLEY, President. New York, N. Y,, May l, 1928. 19 P^C0C009955 t\ WSt|WtK1K3 ANDES COPPER MINING COMPANY {Including Asset* and Liabilitiei of Potrerillos Railway Company) Consolidated Balance Sheet--31st December, 1927 ASSETS Fix e d : Mines, Mining Claims, Lands and Railway Conces sions, including Development........... ...... ..... ...... S 36,274,333.91 Buildings and Machinery at Mines. Reduction Works, Power Plants, Railways and Port Equipment.... +3,201.948.33 Investments.... .... ,,...... ................ .......... ........ ........... 25.309.03 De f e r r e d Ch a r g e s and discount on Debentures .............. Cu r r e n t : Supplies on hand and Expenses prepaid...................... $ Metals in process and on hand--at cost _________ Accounts Receivable.................. .......................... ......... Cash ----------------------------------------------- ------------ 3,980,334.43 277,739.76 307,305.22 1,708,725.65 S 79,501.591.27 1.845,430 95 6.274.105.06 $ 87,621,136.28 Ca p it a l St o c k : LIABILITIES Authorized, 3,600,000 shares--no par value Issued, 1,762,219 shares.......................... _ ____ Co n v e r t ib l e 7% De b en t u r e s , due 1943 . _____ Res er v e f o r De p r e c ia t io n ..... ........... ............. ...... $ 44,055,475.00 39,890.000.00 250,000.00 Cu r r e n t : Interest and Taxes accrued------------- ----------- ----------- $ 1,400,169.09 Accounts and Wages payable _... . . ____ 1,774,847.72 Su r p l u s : Surplus of Potrerillos Railway Company, 31st De cember, 1926----------------------- ________ $ Net Income of the year 1927, per statement annexed 70,694.19 179,950.28 3,175.016.3! 250.644.47 $ 37,621,136.28 We have examined into the affairs ot Ae-ie- C.pper Mining Company and Potrerillos Railway Com pany and have verified the Assets, Liabilities ar.4 lr,-ome shown above. We hereby certify that this Balance Sheet shows the financial condition of the comtvn-d - rrrpanies at 31st December, 1927, and that the accomEwnying Income Account for the year ending that 4a-e a correct as stated. New York, 9th April 1925. POGSON. PELOUBET 4 CO., Certified Public Accountants. 20 PNYC00009956 ANDES COPPER MINING COMPANY (Including Income of Potrerillo* Railway Company) Consolidated Income Account--Year Ending 3lt December, 192? Op e r a t in g Re v e n u e : Copper sold--32,703,695 pounds at an average of . : 13.3667 cents per pound--..-,------------------------ -- $ 7,044,734.23 Pr o d u c t io n Co s t , less value of silver and gold-- Op e r a t in g Pr o f it ______________ ___________ 3.814,451.21 $ 3.230,283.02 Ot h e r In c o me ______________________________ Ch a r g e s Ag a in s t In c o me : Miscellaneous charges____________________ Interest, including discount on DebenturesFori Depreciation of Plant and Equipment- Ne t In c o me , carried to Balance Sheet- 194,683.84 $ 3,424,966.86 $ 42,346.42 2,952,670.16 250,000.00 3,245,016.58 179,950.28 1 i V. J 21 pNYC 000q 99S? I Chile Copper Company CAPITAL STOCK December 31, 1927 Authorized, 5,400,000 shares. $25 each....................................$133,000,000 Issued, 4.415,497 shares. $25 each $110,387,425 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 . DIRECTORS John D. Ryan Percy A, Rockefeller Cornelius F. Kelley Nicholas F. Brady Benjamin B. Thayer Andrew J. Miller George H. Church Herman C. Bellinger Robert E. Dwyer Alfred Houston, Resident Director, Chile Exploration Company Office at 25 3r 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 PNYC0G0C99Sa To the Shareholders of Chile Copper Company: During 1927, the operating company, Chile Exploration Company, maintained pro duction on approximately the same,level' as for the two prior years, producing 219.600,465 pounds of electrolytic copper. . The, Cost of producing copper tor the year 1927 was 8.738c per pound, including in cost, depreciation, taxes, interest and bond discount, but excluding depletion. The Plant Extension Program, commenced in 1925, and which called for rounding out mining and-reduction capacity to a total of 375,000,000 pounds of copper per annum, was completed during 1927, as contemplated, except for minor details. Expenditures on construction during the year amounted to $5,110,273.77. Charges to bbsolpscerice,-profit and: loss,, efc,, totalled $2,377,915.25. The book value of property accounts was itnCreased front $15?*,934,523.42 at the beginning of the year to $160,666,881.94 at the close, a net increase of $2,732,358.52. Due to the market conditions which prevailed during the year your Company did not utilize the inbifedsep productive capacity. Financial Results Sales of copper during the year amounted to 235,291,177 pounds, at an average of 13.294c per pound, as compared with sales for the year 1926 of 215.286,183 pounds, at an average pf 14:.lle per pound. The operating profit for the year was $18,050,608.87, as against $18,234,744.66 for the previous year. After including other income and deducting charges against income, taxes, interest and discount on bonds, depredation, etc., there remained a net income for the year of $11,085,537.13 as against $11,655,997.43 for the previous year. Mining Claims During the year 1927, the Chile Exploration Company acquired two additional mining claims and one miscellaneous claim; four miscellaneous daims were abandoned. Mina The length of the faces of the 13 operating benches as of December 31, 1927, was 53,001 feet (10.04 miles). 23 PNYC0C009959 During the year, a total of 7,678,940 tons of ore was mined, averaging 1,59% copper. In addition, 80,519 tons .of ore, averaging 2.16% copper, were loaded from the old Emilia Mine dump, making a grand total of 7,709,459 tons, averaging 1.595% copper, shipped to the mill; also t07,383 tons of ore. averagmg 1.07% copper, were stock-piled. The total tonnage of ore shipped to the mill since the beginning of operations up to and including December 51, 1927, amounts to 50.353.163 short tons, averaging 1.626% copper. Waste removed during the year totalled 4,324,332 shprt tons, averaging 0.39% copper. During the year a total of 11,964 feet of tunnels and 467,503 feet of chum drill holes were blasted, The construction of the "S-Loop" cut-off line .and the Soutfi Approach was completed early in the year. The North entrance line to 3er.ch C-l and South connections to Benches D-t and C-3 were placed in operation, as were the E-2 and E>3, trackage and waste spur. The electrification of the mine railway system was inaugurated it) February, 1927, by the installation of four 76-fon locomotives equipped to operate either from 600-volt elec trified third rail pr on Storage batteries j the 'lattpr tot" use principally fppi Serving shoyels on the bet^heh'tyhereiliiit. is: hot feasible to install elpqtric: third? ijrail. . The .elihiination of steam locomotives for this service by the substitution of electrics: is showing a .sating of about 50% in.the jaigr tottjkilometer of orehauiage. The; South approach hytterh- from Bench 0-2 down is; already electrified and the work of electrifying the :'C-D Locjp and D-l Approach is under way. Liquid Oxygen for blasting was introduced in June. Up to the end of the year a total of 1,329.300 tons of ground had been broken by this explosive. The present' Liquid Oxygen Plant has a capacity of 70 liters per hour, and plans are under way to increase this to a total of 210 liters per hour. Plant A total of 7,711,952 short tons of ore was crushed during the year. The average leaching extraction obtained from the treatment of 709 charges was 88.85%, compared with 88,83% for 1926. During the year 219,600,465 pounds of electrolytic copper were produced. The following tabulation shows a comparison of results by quarters; Period 1st Qr. Sid Qr. 3rd Qr. 4th Qr. Ore Crushed Short Tons 2,329,927 1,969,286 1,724,893 1,687,846 Average Per Day 29,493 25,575 23,957 24,821 Per Cent Copper in Ore Leached 1.512 1.628 1.642 1.622 PerCent Ampere Efficiency 83.33 81.49 87.16 86.42 PerCent Net Recovery 86.78 87.31 91.07 91.14 Pounds Copper Produced 56,275.993 55278,560 53.949,028 54,096.884 Year 7,711,952 26,054 1.595 84.40 89.05 219,600,465 During the year, the Smelter melted 223*090,000 pounds of electrolytic copper into marketable shapes. 24 PNVCOCOO9960 Construction The construction of the additional units to the Plant required to bring the capacity up to 375,000,000 pounds of copper per year was completed, with the exception of the Dust Exhaust Plant which was finished early in 1928, The additional units to the Power Plant at Tocopilla necessary for the above rated capacity were also completed. Census The average number of inhabitants in Chuquicamata during 1927 was 15,855. com pared; with 18,039 for the year 1926. At Tocopilla the average number of inhabitants housed by this Company during the year w^s 638, compared with 641 for 1926. The average working force at Chuquicamata for the year was 5,394 men, of whom 5,0S9| were on operation and 535 on construction. At Tocopilla the average working force tor 1927 was 613 men, of whom 478 were on operation and 135 on construction. Tocopilla Power Station An average of 40,274 KW was generated. Fuel oil consumption at Tocopilla amounted to 1,089,077.22 barrels, which represents an oil factor of 1.0319 pounds per K.W hour1 generated, or conversely, 323.9 KW hours per barrel (42 gallons) of fuel oil. Financial Attached hereto you will find the Consolidated Balance Sheet at the close of business December 31, 1927, together with Income Statement for the year, certified to by Messrs. Pogson, Peloubet & Company, Certified Public Accountants. The increase of ``Def er r ed Ch ar g es including discount on bonds" represents cost of calling 6% Convertible Bonds and financing new issue of 5% Gold Debentures, whereby interest charges are reduced $35Q,QOO per year. New York, N. Y., May 1, 1928. CORNELIUS F.m^t 2S PNYC00009961 CHILE COPPER COMPANY and Subsidiary Companies Consolidated Balance Sheet--31 t December, 1927 Fix e d : ASSETS Property Investment ....... ...... ........ .............:-- $ 99,322,590.69 Plant and Equipment at Mines, Reduction Works, Power Plants, Railroads, Steamships, etc....... . 61.344.291.23 5160,666,881.94 Less, Reserve for Depreciation of Plant and Equip ment ___, 23.357.47797 Def er r ed Ch ar g es including discount on bonds.............- Cu r r e n t : Supplies on hand and Expenses prepaid,-.................. - 5 Copper in process and on hand, at cost--............. :...... Accounts Receivable ,,------ 2.... ........ ............-- Cash and Call Loans...... ......................................... ...... 7.433,396.63 1.733,054.79 4,903,393.67 2,367,614.93 $137,309.40397 9,886.907.52 16,437.460.02 $163.633.771.51 LIABILITIES Ca p it a !. St o c k : Authorized--5,400,CCO shares of $25.00 each Issued--4,415,497 shares Tw e n t y -Ye a r 5% Gout De b en t u r es , due 1947: Authorized--435,000,000.00 Issued and outstanding--------- ------------------------ Res er v e for Renewals and Replacements, Insurance, etc. ' $110,387,425.06' 35,000.000 90 1,054.526 5! Cu r r e n t : Notes Payable . Interest and Taxes accruedAccounts and Wages payable.. $ 4,000,000.00 262,995.66 3,822,288.53 8,085,284.1r' Su r f e u s : Surplus 31st December, 1926_ $ 8,802,929.40 Premium on capital stock issued for convertible bonds 241,714.29 $ 9,044,643.69 Net Income of the year 1927, per statement annexed. U,085,537.13 $ 20,130,180.82 Distributions to stockholders--------------------------------- 11,023,645.01 9,106,535$: $163,633,77! 5: We hire examined into the affairs of Chile Copper Company and of its subsidiary companies ar.,. have verified the Assets. Liabilities and Income shown above. We hereby certify that this Balance sheet shows the financial condition at 3tst December. 1927, of the companies as an aggregate whole and that the accompanying Income Account for the year ending that date is correct as stated. POGSON, PELOCBET 4 CO, New York, 6th March. 1928. Certified Public Accountants. 26 PNYC00009962 CHILE COPPER COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1927 Op e r a t in g Re v e n u e : Copper sold--235,291,177 pounds at an average of cents per pound........ ..................... ............ Pr o d u c t io n Co s t _............................................................. Oper at in g Pr o f it ............ ............................. ........ ........... Ot h e r In c o me,..................................................................... $ 31,279.528,55 13,228.919,68 8 18,050,608.87 811,982.55 $ 18.862,591.42 Ch a r g e s Ag a in s t In c o me : Taxes and Miscellaneous Charges------------,................. $ 2,754,410.88 Interest and Discount on Bonds________ __________ 2,363,291.76 For Depreciation and Obsolescence of Plant and Equipment---------------------------------------- --------- 2,659,351.65 7,777,054,29 Net In c o me , carried to Balance Sheet...... ........... ..... ...... $ 11,085,537.13 --In order to comply with the Government Income Tax requirements for the purpose of com* Putins depletion 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 tax purposes only, the result of those entries has been omitted from the current statements. 27 PNTC00009963