Document GYaxVv7qeGvY5ONKrMB75grN

PLAINTIFF'S EXHIBIT ASA-411 ,97 '935 />v<fsqf {OSH.) 'S97 1998 lid > IH. h 1999'19S: Copper (Pound) 1.03 Zinc (Pound) 0.60 Stiver (Ounce) 488 Cold (Ounce) 331.49 Motvbdenum (Pound) 4.18 0.78 0.46 5.51 294 27 3.39 0.71 0.49 5.22 279.18 2.59 .... (5).... i iif: (5) (5) ....I?iL. Tons 356.008 Torts 144.724 Ounce 18.100.899 Ounce 97.031 Tons 4.720 380.124 151.053 21,824,308 104,329 5,866 497.057 IIIIMII 152.984 iiiiiii 21.290.091 68.385 (2) (34) 9HIHIlIIS4ii ; Current Assets 998 1,173 2.143 Fixed Assets ... ........................ 2,998 2,948 5.368 !?1<Stiaill AMtslfills!i iilPi:!:: ::i:-P i:IlllII?: Ils:::!M: ill ; 1 iillllIII4i259ilil:llllliiilllll 9.033 Sink Debt iilllilllllMIII:! 1,307 3,296 Total liabilities llillilllMSMIlll Si|!li52lllllll 4,435 Stockholders' Equity** 2.750 2.522 3,102 mmm mmm 109 152 191 23 Total Sales Cost of Sales Ooeratinq Income EBITDA ' :: 1.240 1,747 780 mwwmmmm 1,288 ..................................... 302 250 201 421 419 418 mmmmmmmwi 187 : 22 35 , (2Q). ......(ft).. 274 SFrom Operations1!HI;: I*::; From Finandnq Activities Total Cash Flow Capital Exaedittires Free Cash Flow illp Throughout ths annual report all tow Je nwtnt and stt twees an troy. twmwsinn factor r Jiltg..i2,j57 Jmy ounces, ihW-WKS pounds. ** (tyring The yw 14,03*,00<3 *es thirt amowitwf USSS8 miWon w*n> amortfwd at M avea^t cost per shait of USKto and ceptMwuci USR)09 (i# shat* outatemSng at the hogfemng of tfva year. >S:P 323 697 (o? 33 415 (227) 188 480 :26 (147) (545) 333 (20) ....(837),,,, .(269) Jim.-. (368) Per Share Data** Total Shares Outstanding EBITDA Per Share Cash Flow Per Share Earninqs Per Share Book Value Per Share*** Financial Ratios Operatinq Margin EBITDA Marqin Net Income Marqin Current Assets to Current Liabilities Total Liabilities to Total Assets Debt To Capitalization EBITDA / Gross Interest Expense Foreign Debt Rating Moody's (SEN)**** Moody's (GSN)***** Employees Annual Inflation Mexico United States Peru Exchange Rate at the End of Eac h Year Mexico (pesos/dollar) Peru (soles/dollar) Average Exchange Rate for The Year Mexico (pesos/dollar) Peru (soles/dollar) " Referred to 630.000.000 Shares. *** Book value per share are based on shares at the end of each year. **** (SEN) Secured Export Notes. ***** (GSN) Guaranteed Senior Notes. Nott: Current pesos converted into dollars at the average exchange rate of the year for the Income Statement; the exchange rate at the end of the year was applied to the Balance Sheet figures. (Thous.) (times) (times) 99? 1998 1999 674,985 0.83 0.65 0.42 4.07 645,974 0.73 0.40 0.08 3.90 630,000 0.83 0.76 0.30 4.92 Di?. % _______ (21 14 90 275 26 24% 34% 21% 1.8 32% 23% 7.5 17% 29% 4% 4.2 35% 34% 4.4 11% 24% 11% 2.3 49% 52% 3.5 _____ (M _____ (1Z1 175 _____ (451 40 53 _____ (M Baa2 14,032 Baa3 Baa3 22,555 Baa2 Bal 30,407____________ 35 16% 2% 7% 19% 2% 6% 12% 3% 4% _____ (111 50 _____ (HI 8.06 9.94 9.52 ____ (41 2.73 3.16 3.51 11 7.92 9.15 9.56 2.66 2.93 3.38 4 15 directors German Larrea Mota-Velasco Juan Sanchez-Navarro Peon Romulo O'Farril Jr. Prudenrio Lopez Martfnez Juan I. Gallardo Thurlow Claudio X. Gonzalez Carlos Giron Peltier Jose Mendoza Fernandez Genaro Larrea Mota-Velasco Agustin Santamarina Vazquez EXAMINER Rolando Vega Iniguez SECRETARY Agustin Santamarina Vazquez ALTERNATE DIRECTORS Hector Calva Ruiz Daniel Tellechea Salido Oscar Gonzalez Rocha Xavier Garda de Quevedo Alfredo Casar Perez Gabino Paez Gonzalez Daniel Chavez Carreon Eduardo Gonzalez Gomez Sergio M. Ferrer de la Barrera ALTERNATE EXAMINER Gilberto Nava Escobedo ASSISTANT SECRETARY Sergio M. Ferrer ri? la Barrera Corporate Structure 74% MEXICAN A DE COBRS `36.4% INDUSTRIAL M.INERA MEXICO 5CO% MFXKANA DE CANANEA 33.5% OTHER SUBS;DIARIES 100% SOUTHERN PERU COPPER COSP. 5-4.2% AMERICAN LIMESTONE CO. 500% OTHER SUBSIDIARIES 500% EERROCARRI!. MEXICAN!) 500% PERRGCASR.il. CHIHUAHUA PACIFICC 500% OTHER SUBSIDIARIES 500% OFFICERS Chairman of the (toad & Chief Executive Officer German Larrea Mota-Velasco President: & Chief Operating Officer ASARCO Incorporated Xavier Garcia de Quevedo President 8, Chief Operating Officer Southern Peru Copper Corporation Oscar Gonzalez Rocha Chief Operating Officer Tenocanil Mexieano Alfredo Casar Perez Managing Director & Chief Financial Officer Daniel Tellechea Salido Managing Director & Chief Commercial Officer Genaro Larrea Mota -Velasco Managing Director - Exploration & Projects Hector Calva Ruiz Chief Operating Officer Industrial Mirtera Mexico Daniel Chavez Carreon Director of Industrial Relations Gabino Paez Gonzalez Managing Director Special Assignment Hector Garcia de Quevedo I am pleased to inform you that 1999 was a very significant year in the history of Grupo Mexico. We expanded and consolidated our operations into a firm base which allow us to participate competitively in a world that each day becomes increasing ly integrated and in which "commodities" producers in the metals market, such as ourselves, are increasingly exposed to global supply and demand markets. To increase the added value in our metals processing, we completed construction and initiated the operation of the new precious metals refinery to recover gold and silver in La Caridad, Sonora. We expanded capacity of the copper rod mill at La Caridad to 150,000 tons per year and re-instated production there. We also began the third stage of expansion at the SX/EW facility in Cananea, also located in the state of Sonora, expanding it by 22,000 tons per year of refined copper. In addi tion, we initiated operation of a new open pit coal mine in the state of Coahuila, with production capacity of 720,000 tons per annum. In the railroad sector, we improved the services we provide which should allow us to capture a larger amount of freight business and continue to grow in tons-kilometers transported. The investment program for reconstruction and modernization of the railroad system, purchase of locomotives and cars, and modernization of telecommunication systems continued at an accelerated pace. These investments should increase our share of the national railroad transportation market. Continuing prior years' achievements which allowed us to compete more effective ly in the significantly more globalized economy, we acquired the North American company, A5ARC0, Incorporated and through it, obtained a controlling interest (54.2%) in Southern Peru Copper Corporation. The transaction was completed last November, through a public offering and after a detailed analysis, in a transaction valued in US$2,523 million. With this combination, Grupo Mexico becomes the third largest copper producer in the world. Grupo Mexico also acquires a strategic market position and moves up a notch competitively because of significantly increased production and internation al diversification. We also gain significant increases in mineral reserves -copper, zinc, silver and molybdenum- which provide the basis for growth in our industry. Operating and administrative synergies result from this transaction due to the prox imity of Grupo Mexico operations in northern Mexico to Asarco operations in Arizona and Texas. Cost savings are estimated to be as much as US$100 million per year. It is important to emphasize that the acquisition of Asarco and subsidiaries was financed by an investment of US$546 million of Grupo equity, borrowing US$817 million in a new credit facility and assumption of US$1,160 million of existing debt at Asarco. To date, total debt has been substantially reduced through the sale of Asarco's specialty chemicals division, Enthone - OMI, for US$512 million. We expect to continue immediate debt reductions through the sale of other non-core assets from the acquired company. Despite inflation and fluctuations in the peso exchange rate with other currencies, we controlled our costs, expressed in dollars, at levels internationally positioning the Group among the lowest cost producers of copper and zinc. We continued to focus on operating efficiencies and increased productivity at all mining facilities and plants. We were able to do this by personnel training, new organization struc tures and new technology applications. In the Mexican mining sector, the illegal strike at the Cananea mining unit ended satisfactorily for all parties in mid-February. The new agreement will allow the unit to operate at lower costs, production increases through the use of more modern facilities and to provide additional income for the workers through productivity gains and labor optimization. In 1999, we achieved significant productivity gains in our Mexican mining opera tions. Sales of copper reached a historical top of 389,397 tons and there was a 33% increase in the amount of molybdenum produced. Total volume of copper sold by the entire Group, including 44 days of acquired company operations, amounted 497,057 tons. Throughout most of 1999, the international base metal markets continued to be affected by the economic crisis of the last two years in Asian countries and emerg ing markets. With the exception of zinc, the crisis caused a significant decline in the annual average prices of the principal metals that we produce. The downward trend reversed towards the end of the year and prices increased considerably. Copper, our principal product, registered a 30% increase in price compared with a year before. The recovery can be attributed to the continued efforts of the United States and Chinese economies and, in general, the recovery of the European and Asian economies. We foresee material increase in demand for the metals that we produce for the year 2000 and forward and, consequently, a better perspective in the markets. GRUPO MEXICO BECOMES THE THIRD LARGEST COPPER PRODUCER IN THE WORLD. GRUPO MEXICO ALSO ACQUIRES A STRATEGIC MARKET POSITION AND MOVES UP A NOTCH COMPETITIVELY,,. In 1999, the Mexican economy continued to grow at a good pace registering a Gross Domestic Product increase of 3.7%. However, most important in Mexico was the slowing of inflation to 12.3% in the year. That figure compares favorably with prior years and, in the short term, will turn into lower production costs. Consolidated 1999 sales for the Group reached US$1,747 million, a 22% increase when compared with 1998. The mining sector accounted for 72% of total revenues (Grupo Minero Mexico 58% and Asarco 14%) and 28% for the railroad sector. It is important to note Asarco's results are consolidated only from November 18th through December 31st. The Group generated a net profit of US$187 million, equi valent to 10.7% of sales. Operating income plus depreciation (EBITDA) amounted US$418 million, which represents 24% of sales. Grupo's operating cash flow amounted US$480 million. Balance sheet items changed significantly due to cash generated from Mexican operations and because of the acquisition of Asarco. Most relevant: fixed assets increased to US$5,368 mil lion; total assets increased to US$9,033 million and total liabilities amounted US$4,435 million. Financial indicators remained at a comfortable level. In Mexico, the Group completed a meaningful first phase in the modernization, expansion and integration of the railroad sector with a cumulative investment of US$681 million. During 1999, Grupo's total investment in assets including the acquisition of Asarco and subsidiaries, amounted US$2,950 million. Fellow shareholders: Without doubt, 1999 was an important year in Grupo's development. We competi tively internationally positioned the company in terms of productivity and operat ing costs. We initiated consolidation of Grupo as a global company that will com pete with many advantages in the global mining arena. We are convinced that the continued efforts and dedication of our personnel will enable the group to rapidly advance for the benefit of our shareholders as well as for our other business asso ciates. I thank you, my fellow shareholders, for your support and your confidence in the management of your company. Thank You, German Larrea Chairman of the Board & Chief Executive Officer >ZmP?Mmfy/C/v ,,,,, ' ,'-; - '," i' / /,-' "s'U? ' ',,,/%> '6 Z" ' '/"v/rj'"" - ' "; ; \'f '\ ?'* '' ,/'\'4 ' 'WL. - Exploration and Mineral Reserves We continued to invest approximately US$30 million per year in Mexico in the acqui sition and exploration of new mineral prospects and in the development of prospec tive areas surrounding the existing mining units. Because of these activities, we have been able to maintain the level of mineral reserves at the mining units and increase reserves of future operating units. We continue exploration in the nation al reserves zones acquired in public bids conducted by the Federal Government and we also acquired and are exploring new concessions in the Barqueno region of Jalisco and Preson-Leones in Sonora. With the acquisition of Asarco, our copper mineral reserves now rank as the world's second largest known ore reserves, in terms of volume. Asarco operates various nonferrous metals mines in the United States and owns 54.2% of one of the largest cop per mining companies in the world, Southern Peru Copper Corporation, which exploits two large copper/molybdenum deposits in Peru. The acquisition will allow us to initiate exploration projects in various countries, including the United States, Peru, Chile, French Guyana, Canada and Australia. COPPER CONTAINED IN MINERAL RESERVES IN OPERATING MINING UNITS POST THE ASARCO ACQUISITION (Thousands of Ions) v3S% 3,057 5,719 8,229 687 8,585 551 55,042 28,214 ggg 450 IXH ffimi l ig? r.wiad 23 572 tariaKM Open Pit Owner % Minus 100.0 Cananea Millinq Ore Leachinq Ore 100.0 La Caridad : Millinq Ore Leachinq Ore 54.2 Toaueoala - Peru Millinq Ore Leachinq Ore 54.2 Cuaione - Peru Millinq Ore Leachinq Ore 100.0 Rav-U.SA Millinq Ore Leachinq Ore 100.0 Mission-U.SA Millinq Ore 75.0 Silver Belt - U.S.A. Leachinq Ore 49.9 Montana Resources -U.S.A. Mining Ore Millions Tons 2,850.3 2,937.1 790.2 518.3 691.9 1,732.3 1,242.2 62.0 846.7 142.0 430.6 145.1 393.3 Underground Mines Owner (%i Mines 100.0 100.0 IMMSA-Mexico Tennessee-U.S.A. Millions Tons 100.0 28.2 Copper '% Molybdenum % Operation 0.59 0.23 0.40 0.20 0.74 0.20 0.64 0.49 0.60 0.45 0.71 0.38 0.35 - 0.02 0.03 - 0.02 - - - - 0.03 98 84 24 11 40 69 39 29 41 14 20 20 26 Copper % 0.45 - ?int: % 3.98 2.88 Lead {%} 1.23 (*) Only 49.9% is considered because of our minority ownership. Gold c:rs./ton 0.15 Silver prs./tor: 103 Operation fears 15 14 International Metals Prices PJUCiS & WVEMQftiES Of COPPER i,000.*r0 iiO. 133 16 20.00 lOO.Uii a;.-.do X\ v.,,104.09 io3.27jjJ^ \ Mammy* S60500..0000 '* to.oe LOO.Cfl ' -o.ot; PSO.iKl : v.Ot? 37 "vir.to'fes -- i.tf! S3 The demand for most non-ferrous metals continued to be weak in most of 1999, due to the depressed state of many Asian countries, some emerging markets and former socialist countries. The sustained economic growth in the United States, China and some Eastern block economies did not generate enough demand for minerals prod ucts to significantly reduce warehouse inventories or create producer leverage. Because of this, the average annual prices of the metals the Group produces, except ing zinc, were lower in 1999. Towards the fourth quarter of the year, a recovery in the metals markets pushed met als prices upwards. Copper has increased, as of this date, almost 30% from its low est level a year ago. Other metals are also demonstrating a substantial upward trend. We are optimistic that growth in the majority of the economies is positively impact ing the market. With precious metals, the decision of some countries1 central banks to limit gold sales, the decisions of some mining companies to reduce future sales of the metal and increased demand have led to a recovery in the prices that should continue to increase throughout the year, resulting favorable for us. PR1CF.S a INVENTORIES OF ?.TNC PRICES & INVENTORIES OF SILVER cfc. OvS./novnd sswss iivMD.^rits UiL Lftnao* F'kss IXE Ls PRICES a INVENTORIES 0? GOLD FOC-iH! t.fjaO.Oir 'CX, r i.400.0v |4 S3 3387.86 331.49 A'1-.*00.00 ! & .OOO.Oii mM SC5.00 -fe 4iooco to-:-.De 40C.0*.; riOC.O:; O.Ou D5 $!> y.v.w (nyfctto.'ks A y. fOnFX N.V. JC ** iawssturPss COME* N.V. --Pricss COMLX N.V. PRICES & INVENTORIES OF CEAO 0.0?: 9? rnoiys i.MF wnysrt Sales The sales increase results primarily from higher metal volumes sold and greater process integration which has increased its added value in rod and other copper products and precious metals. Grupo Minero Mexico (GMM) product exports from Mexico represented 60% of GMM sales. Railroad sector sales were increased by 31%, to US$488 million. This continues the sustained growth in the railroad sector achieved since its acquisition. Sales Product Copper Zinc Silver (Ounces) Molybdenum Gold (Ounces) Sulfuric Add Lead Other Products Railroad Haulaqe (Tons-km)* Total Sales We sold refined metals and products with a of integration, principally copper. Volume in Tons 1999 380,124 151,053 21,824,308 5,866 104,329 994,986 30,452 - 19,039,000 497,057 152,984 21,290,091 9,021 68,385 1,073,556 53,235 - 23,702,000 Dii.% 31 1 (2) 54 (34) 8 75 - 24 Value Millions of U.S. Dollars 1998 1999 l)ii.% 644 830 29 162 175 8 121 111 (8) 40 51 28 32 19 (41) 23 19 (17) 16 28 75 22 26 18 372 488 31 $1,432 $1,747 22 TOTAL SALES (isUUsRi C'f dollsrs) s.o -lO.. 00 95 mmm. 1,347 96 1,172 97 rn&WM 1,240 98 1,432 99 1,747 Current pesos converted to dollars at tne average exchange cate of the year. SUMMARY OF SALES BY PRODUCT 1999 Gotd 2% Lead 1% Silver 9% Copper 45% Transport Services 28% Others 1% Molybdenum 3% Sulphuric Acid 1% Zinc 10% ........ Gold 1% Silver 6% Lead 2% REGIONAL DISTRIBUTION OF SALES 1998 Europe 3% Asia 2% Latin america 1% 1999 Asia 1% Europe 3% Copper 48% Mexico 49% Mexico 52% s.. United States 45% W United States 44% acquired i'00% of Asarco, Inc, and its Subsidiaries through equity capital and credit facilities. ~ \-' s ," - s ** S Financing B8T/STQ{.'KH0LQfc'R5'*B8T {isrttftaftf of During 1999, Grupo Mexico acquired 100% of Asarco, Incorporated and its sub sidiaries in a transaction valued in US$2,523 million including US$1,160 million in debt. The acquisition was financed with US$546 million of Grupo equity, US$817 million of incremental debt and assumption of the US$1,160 million of existing Asarco debt. Subsequent to the acquisition, Grupo Mexico sold Asarco's specialty chemicals division, Enthone - OMI, in US$512 million. This amount was used to reduce debt incurred for the Asarco acquisition. We also obtained a US$100 million credit facility to finance the acquisition of 50 new locomotives for our railroad subsidiary. With these transactions, Grupo Mexico's total debt, as of December 31st, 1999, amounted US$3,421 million at an average interest cost of 8.33% per annum. The company expects to continue its debt reduction program until appropriate lever age levels are reached. We will continue to sell assets that are not part of Grupo Mexico's strategic core business. Debt W 5if?r>hcWfiff;*fDebi Current pesos converted to dollars at the average exchange rate of the year. HU SANK DEBT Shovels and 240 Ton/Load Trucks Mission Unit, Arizona SAG Mills Ray Concentrator Hayden, Arizona US : owl hank deoi $8 (.ash S ^=;r--:=:s anc Ma-i stat.-le Securities Vv Bard; Mining Division Operations of Mining and Metallurgy Units MEXICAN* D C.08SE The La Caridad, Sonora, Complex reached historical record levels in most of its oper ations. More than 81.9 million tons of material were extracted from the open pit. The concentrator processed 33.5 million tons of ore. This was possible because of the continued use of automated expert systems in all areas of the complex and larg er equipment in the pit. Metallurgic recoveries of copper and molybdenum also increased through the use, among other factors, of a new reagent developed at La Caridad named "hidromina". The new equipment in the smelter such as the Asarco shaft furnace and the rotary rail car dumper together with a seamless coordination between operation and main tenance of the facilities, allowed us to smelt over one million tons of concentrates, produce record amounts of metallic copper and recover more than a million tons of sulfuric acid. The refinery, the SX/EW plant and the rod plant at La Caridad also achieved increased levels of production. With completion of the La Caridad Complex integration process and starting up of the precious metals refinery, the Complex now sells only refined and semi-manufactured products. A new organizational structure and an adjustment of personnel was implemented to further improve productivity and unit costs. Production Mine and Concentrator Plant _______ - Volume Extracted Year Thousand 'ions 1995 67,250 1996 75,378 1997 " 75,572 1998 80,533 1999 81,931 Dif. 98/99 2% . - ": Milling Coe Thousands Tons 32,336 33,286 33,045 33,139 33,466 1% (1) Copper in concentrates + copper from leaching. -- - - ' 7 leaching Ore Thousands Tons 19,354 19,280 24,132 19,422 17,814 (8%) Cooper Concentrates tens 529,536 529,308 477,892 507,975 505,988 - -v. T: . (j.) te;al Copper Contained tens 172,139 180,915 171,086 177,513 175,084 (1%) 7 -: Molybdenum in Concentrate'. ions 3,806 3,968 4,842 5,949 7,961 34% Smelter and Refineries, SX/EW and Electrolytic and Copper Rod Plant SMELTER SX-EW Concentrates Smel-ed Tens 1995------------------- -------- 610,5 a 1996 608,803 1997 855,611 1998 859,163 1999 1,000,028 Dif. 98/99 16% Copper In Anodes Tons -------- 183,870 188,950 257,593 296,688 341,401 15% Copper Cathode;; tens (3) ---------- 97729-- 18,838 21,377 20,754 22,224 7% Copoer Total Ton:; {',!) 193,599 207,788 278,970 317,442 363,625 15% ELECTROLYTIC Copper in Cathodes Tons {.)') - - 48,965 226,569 274,990 21% ROD PLANT Copper in Rod Ton:; (4} - _ 50,047 98,611 97% IN ANODES AND REflNEO Gold 256 377 1,281 1,229 1,001 (19%) Silver 82,284 83,447 176,879 185,151 189,825 3% (1) SX/EW Process began in mid 1995. (2) Copper in Anodes Cathode Copper from SX-EW. (3) Began operations in the third quarter of 1997. (4) Began operations in the second quarter of 1998. (5) Began operations in mid 1999. MEXICANA SE CANANEA The Cananea, Sonora, Complex smelter, which had operated since the beginning of the century at a high cost and which was unable to comply with new environmen tal standards, was closed after completion of negotiations with the Miners Union. A strike related to the closure was concluded on February 17. Closure of the smelter allowed us to reduce the number of personnel in both operating and maintenance areas, which will allow us to increase productivity and lower unit costs. Copper con centrates containing gold and silver by-products are now shipped to the integrat ed refined copper, gold and silver circuit at the La Caridad smelter in the state of Sonora. During the year, we started to outfit the trucks at the open pit with satelite positioning system, monitors as well as to control the mining operations with com puterized systems. Together, these steps will ensure our mineral extraction goals and increase contained metal production. We are also working on the conveyor belt system to expand the capacity of the lowgrade leach dumps at Cananea. We have also been able to significantly reduce the consumption of water, reagents and electricity per processed ton through the mod ernization and expansion of the concentrator. In accordance with the labor force adjustment agreements, we have restructured the organization at the Cananea mining complex and are reaching our planned operating productivity goals. We began the construction of a third SX/EW plant at Cananea that will produce refined copper from low-grade mineral, producing 22,000 tons per annum. The plant should begin operation in 2001. Studies were initiated on the expansion of con centrator production to process higher volumes of copper sulfide minerals, and we are conducting a feasibility and basic engineering study for the construction of a concentrator to process zinc, copper and silver minerals from the Buenavista deposit located at the northeast of the present operating pit. Production Mine and Concentrator Plant : Volume Milling Extracted Ore rear Thousand Tons thousand Tons 1995 82,648 20,462 1996 101,382 23,682 1997 109,419 24,203 1998 (2) 103,890 22,056 1999 (2) 84,477 20,955 Dif. 98/99 _____________09%}_________ ___________(5%) l.os-thing Ore Thousand Tons 10,493 19,207 30,168 31,353 22,147 (29%) (1) Copper in concentrates copper from leaching. (2) Production affected due to the illegal strike during 42 days in 1998 and 48 days in 1999. Smelter and SX/EW Ptants rear 1995 1996 1997 1998 (1) 1999 (3) Dif. 98/99 Copper Conauitrstes Smelted Tons 197,472 223,537 238.553 183.843 - (2) (100%) Copper Blister Tons 51,191 57,463 60,169 49,592 (100%) (2) 5X/F.W Copper in Cathodes Tees 29,189 25,569 26,840 28,065 28,728 2% (1) Production affected by 42 days of work interruption. (2) Operations were suspended at the smelter in 1999. (3) Gold and Silver contained in concentrates that were shipped to the smelter. lets! Copper Tons 80,380 84,032 87,009 77,657 28,728 (63%) ; Copper Concentrates ions 299,796 378,916 430,165 385,622 329,302 (15%) :~ 'Copper Contained Total TcnsO) 110,347 126,126 136,285 133,947 113,338 ___________ (15%) Gold in Bi.is.tar and Cone. Kps. 169 241 239 186 331 (3) 78% Silver in Blister and Corn;, Kgs. 11,283 17,366 19,473 14,045 29,927 (3) 113% INDUSTRIAL MJNERA MEXICO Important projects already under way began operating at various mining units, including the deepening of the Leones Shaft at the Charcas Unit in the State of San Luis Potosi, and the San Martin Shaft at the mine in the State of Zacatecas. The Charcas tailings dam was expanded and it is working in the automation of the Santa Barbara concentrator plant. The ore grade of processed minerals improved slightly as the metallurgic recoveries did in the concentrator plants, but we did not reach in the mines our mineral production volume goal. Reconditioning was practically completed at the zinc refinery to enable it to process different qualities of concentrates and this allowed us to increase metal lurgic recoveries. We started operations of a new coal open pit at Nueva Rosita which will significantly increase extracted volumes and sales of this material. The zinc refinery at San Luis Potosi received special recognition when it was hon ored with the highest award the "Silver Hard Hat" granted by the Mexican mining industry, in the area of safety. Loading of Zinc Slabs Electrolytic Zinc Refinery, S.L.P. Production Mines and Concentrator Plants CONTENTS IN CONCENTRATES Benefited Mineral Gold Silver Zwe Copper Lead Coal V'esrTPsusand Tor=sKgs.Kgs.TonsTonsVansTons 1995 5,755 370 336,034 182,385 22,376 37,790 244,063 1996 5,853 450 350,025 167,832 25,547 36,527 280,455 1997 5,909 327 349,453 161,914 27,102 32,805 302,028 1998 6,363 420 403,756 180,218 31,911 36,604 296,605 1999 6,284 406 422,902 177,336 32,365 39,797 491,112 Dif. 98/99 (1%) _______ 125)______ 5% ______ 251______ 1% 9% 66% Smelters and Refineries Year 1995 1996 1997 1998 1999 Dif. 98/99 Gold Kg;;. 2,932 2,806 3,283 3,687 2,143 (42%) Silver Kgs, 485,740 495,301 579,167 714,093 575,217 (19%) Tw\\. Tons 101,349 97,715 101,901 100,889 99,148 (2%) Copper Tons 39,295 34,049 30,528 32,022 29,985 ________ (6%) l<??d Tons. 9,502 3,978 2,627 2,819 2,164 (23%) Coke Tons 103,281 112,695 99,828 98,695 93,830 (5%) the Zinc Refinery earned the granted by the Mexican Mining y'f . >' !t Wm 4 \ I;ndustry in terms of safety: the "Silver Hard Hat" > ^ '<>< ? X' /' ,* v (.: ;:S rif : s - . j >. 4- .5 *" * v ' /#aY/ ' 'f'rf, 'Y s\ v/ft VYY' 11 ss V it* -w Vx ' ' 1., V ' - U,K :-:L .A ;* *->. i >* #<$' - i ^ *y- -MY '.. - , >' *5#? r Y \ \S k\ :.:k. i : i .- :* : Ml*, V Hi. mmm Loading of a Bldst Hole ivith Explosives Charcas Unit, S.L.P. a;> ^ r.* "Av.r wp rjr, ,,o..TMr:::';(i': avw 'v-* SSK &*? ' '*"$ , 4t,J&, * '4'`>'?k's'4 7^% "L 3<vWS*' rKS55H' ^,>/3W/:,5'%?v>!5,>S- WSH55*. i r, s -* ,1 ' i1H:liI Grupo's metals production significantly increased the addition of Asarco and its subsidiary companies. r* *\^ Casting Wheet Electrolytic Copper Refinery Amarillo. Texas ASARCO COPPER OPERATIONS Asarco's copper business in North America includes open pit mining units and con centrator plants at Mission and Ray, an SX/EW operation to produce copper cathode at Ray and a copper smelter at Hayden, all of them in Arizona. Asarco also has a copper smelter at El Paso, Texas and operates a copper and precious metals refinery, as well as a copper rod and cake plant, at Amarillo, Texas. The company owns a 49.9% interest in an open pit copper mining unit in Butte, Montana, and a 75% interest in the Silver Bell SX/EW operation in Arizona. In 1999, operations at the El Paso smelter, with a capacity of 130,000 tons of "blister" copper per year, were tem porarily suspended. The copper refinery has a capacity of 450,000 tons per year and the rod plant has a capacity of 300,000 tons. Asarco results were consolidated into Grupo Mexico's after the acquisition of Asarco in November 1999. The following production numbers for the entire year for the various mining, smelting and refining units are provided simply to convey the potential production level for Grupo when a full year of Asarco's operations is consolidated. Production Mines and Concentrator Plants Year 1959 Volume Owner Extracted % i hoys, ions Mission 100.0 82.266 Rav 100.0 74,030 Silver Bell 75.0 8.524 Butte (MRI) 49.9 27,573 TOTAL 1999 192,393 44 days* 17,855 Mineral Milled Vhous. Tons 20,075 16,489 - 17,014 53,578 5,016 Leaching Ore TLaes. Tons - 4,443 3,086 - 7,529 1,088 * Indudes only 49.9% of the Butte (MRI) production, since Asarco is not the major stockholder. (1) Copper in concentrates * copper from leaching. Copper Concentrates Tons 328,356 376,368 - 141,702 846,426 83,578 Toiut Copper Contained Tons (1} 90,647 144,201 20,701 37,277 292,826 30,109 Molybdenum in Concentrates ions - _ _ 3,516 3,516 212 Smelters, Refineries, SX/EW Rod and Cake Plants; Year 1995 SMELTER Hayden Rav Silver Bell Amarillo TOTAL 1999* 44 days* Owner %Tons 100.0 100.0 75.0 100.0 ConciiPtuites Smelted 667,923 - 667,923 84,310 Copper Anodes Inns 202,135 - 202,135 26,103 SX/EW Cathode Copper Tons 40,154 20,701 60,855 6,424 Total Copper Tonsil} 202,135 40,154 20,701 262,990 32,527 CAKE ELECTROLYTIC ANB ROB PLANT Copper In Cathodes Copper in Rod Ton;;- Tons IN ANODES AND REFINED Gold Kg;. 2,736 Silver Ken; 484,752 318,685 318,685 38,514 263,054 263,054 35,021 5,185 7,921 802 674,904 1,159,656 122,542 {*) 100% of production. (1) Copper in Anodes + Copper cathodes from SX/EW. OTHER METALS Asarco operates the Young, Coy and Immel underground zinc mines near Knoxville, Tennessee. Another zinc mine. New Market, is temporarily shut down as it is the Leadville, Colorado mine that produced lead, zinc and silver. The company also oper ates a specialty metals business at its Globe Plant, near Denver, Colorado, which pro duces litherage, electrolytic antimony, bismuth compounds and other high-purity metals. The East Helena, Montana smelter has the capacity to produce 75,000 annu al tons of "lead bullion" that also contains high quantities of gold and silver. All the East Helena bullion is exported to refineries outside of the United States. In May 1999, Asarco acquired 19.3% of the common shares of Coeur d'Alene Mines Corporation in exchange for Asarco's silver properties and interests including the Coeur and Galena silver mines in the State of Idaho, U.S.A., a silver exploration project in Bolivia and a small interest in a Canadian company. Pan American Silver Corporation. Full year figures shown for the different mines and concentrator plants demonstrate the potential annual contribution to Grupo from the units which produce zinc con centrates. Rotary Drill Mission Unit, Arizona Truck Loading by an M-4100 Shovel Mission Unit, Arizona Production : Mines and Concentrator Plants. Year -999 Zinc Zinc Ccn-aineri Ownership Mirer:;! Mili-;;) Concenrrates in f.oncsr.trats::. <'%)Thousjnci o? ionsions____________________________________ Tor;:; Younq Cov Immel TOTAL 1999 44 days 100.0 100.0 100.0 1,400 257 436 2,093 264 48,815 15,100 25,300 89,215 10,755 31,032 9,576 16,053 56,661 9,875 The copper, silver and gold operations at Asarco are up to refined metals and other products. OTHER OPERATIONS American Limestone Company, a subsidiary of Asarco, produces construction aggre gates, ready mixed concrete and agricultural lime. American Limestone has four plants in the states of Tennessee and Virginia and its products are sold in various states in the United States. Early in 2000, in line with our strategic plan, the specialty chemicals company, Enthone-OMI, was sold. The company operated principally in Europe and the United States. Asarco also owns Encycle, Inc., which operates an industrial waste recycling facili ty in Corpus Christi, Texas and Hydrometrics, Inc., an environmental consulting and construction firm, which offers services throughout Mexico and the United States. SOUTHERN PERU COPPER CORPORATION In South America, Grupo's copper operations are conducted through Southern Peru Copper Corporation (SPCC), in which we have a 54.2% interest These Peruvian oper ations include the open pit copper mining units of Toquepala and Cuajone and the copper smelter and electrolytic copper and precious metals refinery located in the southern peruvian Port of Ilo. The Cuajone and Toquepala mines also leach lowgrade minerals with the leaching solutions processed in a SX/EW plant at Toquepala. The SPCC copper smelter has an installed capacity of 320,000 tons of "blister" cop per per annum and the electrolytic refinery a capacity of 300,000 tons of cathode. In addition, we also have a precious metals refinery at Ilo. To provide a perspective for the future contribution of the SPCC units and plants to Grupo, annual production volumes for SPCC are shown for 1999. Grupo Mexico con solidated the SPCC results for only the last 44 days of 1999. New Thickeners Cuajone Unit, Peru Production : Nines Concentrator Plants Year 1999 Cuaione Toquepala TOTAL 1999* 44 days* Owner {%} 54.2 54.2 Volume Extracted Thous. Tons 64,265 67,577 131.842 13.169 * 100% of production. (1) Copper in concentrates + copper from leaching. Mineral Milled Thous, Toil:; 28,348 16,205 44,553 5.62$ Electrodeposit Plant of Toquepala, SPCC-Peru 0;e Thous. Ton:; 1,984 13,734 15,718 2,149 Corner Coneon-ra-i?:; Vom. 689,449 418,976 1,108,425 151,779 Total. Conner Contained ions O) 172,363 165,839 338,202 45,916 Molybdenum i Corren-rat-.;:; Ions 2,300 3,172 5,472 870 Smelters and Refineries. SX/EW and Electrolytic Y;:sr 1.999 SMELTER Concentrates Copper (W:s';r Smoited Anodes < Tc>?:\ Tor:; Ilo 54.2 - 289,454 Smelter 54.2 1,101,944 - Toquepala 54.2 -- TOTAL 1999* 44 days* 1,101,944 137,939 289.454 35,022 * 100% of Production. (1) Copper in Anodes + Copper cathodes from SX/EW. SX/EW Cathode Copper Ton.-; - - 49,544 49,544 7,026 idtal Copper Tonsil} 289,454 - 49,544 338,998 42,048 ELECTROLYTIC Copper jr Cathodes Top:; 250,718 - - 250,718 30,728 IN ANODES AND RP.HNED Gold Silver Kffi. Kp. 262 86,949 278 113,416 -- 540 200,365 53 11,874 Geographic Locations Mining Activities GRUPO MINERS MEXICO Mines MtXJCANA DE iXiSSE La Caridad, Sonora: Copper, Molybdenum, Gold and Silver MEXICANA HE CANANEA Cananea, Sonora: Copper, Gold and Silver iNOiiSiittA:. MINr.RA MEXICO Charcas, S.L.P.: Silver, Copper, Lead and Zinc San Martin: Silver, Lead, Zinc and Copper Santa Eulalia, Chttiuahuau Silver, Lead and Zinc Santa Barbara Chihs Gold, Silver, Copper, Lead and Zinc Taxco, Guerrero: Gold, Silver, Lead and Zinc Velanieha, Durango: Silver, Copper, Lead and Zinc Rosario, Sinaloa: Lead, Zinc, Silver and Gold Nueva Rosita, Coahuila: Coal Smelters, refineries ami other projects MEXICANA DC CG3RE La CaridadL Sonora Copper Smelter Electrolytic Copper Refinery Copper Electrowinning Plant Sulphuric Add Plant Copper Rod Plant Gold and Silver Refinery Plant Agua Prieta, Sonora Lime Plant MEXICANA Dll CANANEA Cananea, Sonora Copper Electrowinning Plants INDUSTRIAL M.INERA MEXICO San Luis Potosi, San Luis Potosf Copper Smelter and Arsenic Refinery Electrolitica de Zinc Zinc and Cadmium Refinery; Gold and Silver Concentrates Sulphuric Add Plant Nueva Rosita, Coahuila Washed Coat Coke and byproducts Major ihveiopment and exploration projects El Arco, B.C.N.: Copper and Gold Boianos, JaL: Gold, Silver, Lead, Copper and Zinc Angangueo, Mich.: Gold, Silver, Lead and Zinc Buenavista, Sonora: Silver, Copper and Zinc ASARCO INCORPORATED Mission, Arizona: Copper and Silver Ray, Arizona: Copper and Silver Silver BeU, Arizona: Copper Montana Resources, Butte, Montana*: Copper, Silver and Molybdenum Coy, Tennessee: Zinc ImmeL Tennessee: Zinc Young, Tennessee: Zinc New Market, Tennessee**: Zinc Leadvil(e,Colorado**: Lead, Silver and Zinc * Auico with 49.9%. '* In temporary suspension af Operations. Hayden, Arizona Copper Smelter El Paso, Texas** Copper Smelter East Helena, Montana Lead, Gold and Silver Smelter Amarillo, Texas Copper Refinery Gold and Silver Refinery Rod and Cake Plants Ray, Arizona Copper Electrowinning Plant Silver Bell, Arizona Copper Electrowinning Plant ASGREGAiES: AMERICAN LIMESTONE COMPANY Knoxville; Tennessee Tri-Cities, Tennessee Nashville; Tennessee Abingdon, Viiginia ** In temporary suspension of Operations. OTHERS Corpus Christi, Texas; Industrial Waste Metals Recycling Globe, Colorado; Specialty Metals ENVYRONMETAf. SERVICES Hydrometrics, Inc Helena, Montana Minto, Yukon, Canada (in joint venture): Copper and Gold Escalones, Chile (In joint venture): Copper and Gold Camp Caiman, French Guiana: Gold SOUTHERN PERU COPPER CORP. Cuajone: Copper, Silver, Molybdenum and Gold Toquepala: Copper, Silver, Molybdenum and Gold no Copper, Silver and Gold Smelter and Refineries Sulphuric Acid Plant Toquepala Copper Electrowinning Plant Los Chancas, Peru: Copper Tantahuatay, Peru (In joint venture): Gold and Copper PAiiiiL * ii^$ll : SMUX-tS : lw< r,, A'wOlfc. ht , mmmm : :.**$:&..' '':$^::jsii|si5^S: 'rf'I'lli'iijKljC&'pus Christl ^:#:>^rya Rosft* . Santygktw 8 Saatotf- * ^ Sft Irtf Mori *iteta(kir *nsw#w>* sj-fc*. AT) *'iW. CsCfAH Symbology '* Mines Plants & Projects Main office Offices , . Cmq {jimt&i;Jrjnch Guian* * <5 / g&fci# *U*tlWAtW : *$* &*$**. <** ' Summary of Mining Production* Distribution 1999 : Tons Copper Concentrates Copper Content in Concentrates Copper Content SX/EWs (cathodes) Total Copper Content from Mines Copper Content Smelters Total Copper Content (Smelter + SX/EWs) Refined Copper Refined Copper Converted into Copper Rod Zinc Concentrates Zinc Content in Concentrates Refined Zinc Lead Concentrates Lead Content in Concentrates Gold Content in Concentrates (ounce) Silver Content in Concentrates (ounce) Molybdenum Content in Concentrates Coal Coke Sulphuric Acid Cadmium Arsenic Trioxide Bismuth Content of Alloys Lime MINERO MEXICO 80% 81% 79% 81% 86% 85% 80% 79% 97% 95% 100% 100% 100% 96% 95% 90% 100% 100% 91% 100% 100% 100% 100% * Figures expressed in metric tons except when indicated otherwise. Minero Mexico includes all of the production figures for Mexican subsidiaries. After 1999, production figures for Asarco, Inc. and Southern Peru Copper Corporation (SPCQ are included for the last 44 days of the year. * ASARCO includes only 49.9% of Montana Resource's (Butte) production. *** 100% of production. ASARCO4* 7% 7% 10% 7% 6% 7% 11% 21% 3% 5% - - 2% - 6% - - C * * 13% 12% 11% 12% 8% 8% 9% - - 4% 3% 10% - 3% - - 1999**199819971995199b 1,182,352 1,003,342 999,616 331,291 294,552 286,256 64,402 48,819 48,217 395,693 343,371 334,473 432,511 496.913 344,232 378,302 427,121 226,569 348,290 396,507 48,965 125.043 50,047 328,277 187,211 99,148 321,297 180,218 100,889 288,371 161,914 101,901 65,623 39,797 58,728 36,604 52,416 32,805 28,807 31,154 30,704 17,275,268 16,091,478 14,613,797 8,831 5,949 4,842 491,112 93,830 1,303,170 541 2,419 148 113,016 296,605 98,695 1,048,729 601 2,573 185 119,661 302,028 99,828 1,026,671 659 2,999 185 119,323 994,080 287,181 45,407 332,588 280,462 325,869 - 298,044 167,832 97,715 58,650 36,527 33,726 14,477,189 3,968 280,455 112,695 788,443 582 2,954 117 125,333 899,434 265,944 38,918 304,862 274,356 313,274 - 321,138 182,385 101,349 59,084 37,790 28,453 13,839,382 3,806 244,063 103,281 763,308 639 3,620 11 117,971 Railroad Division Passenger Train "Chepe" During 1999, FERROMEX concluded its first complete year of operation. In this year, we extended the railroad network with acquisition of the Nacozari-Nogales Line in the State of Sonora. That extension provides greater coverage and a higher degree of attention to the mining sector. During 1999, cargo volume transported by FERROMEX amounted 32.6 million tons with an average haulage distance of 728 kilometers, a total of 23.7 million ton-kilo meters. That is a 24.5% increase in ton-kilometers compared with 1998. We con tinued to develop our border crossing points and our facilities at ports, making sig nificant investments to improve the infrastructure of the division so that we can offer a better service to the import/export sector. In 1999, we invested a total of US$238 million as part of the five year moderniza tion program. The main modernization achievements in the transportation area included: the installation of "hot box" detectors, end of train devices and spring switches. We also implemented a modern transportation guide that allowed a reduc tion of operating crews. We expanded rail yards mainly in the cities of Chihuahua, Manzanillo, Piedras Negras and Rio Escondido. In the infrastructure area, we reha bilitated 202 kilometers of track and completed an intensive conservation program on lines with the highest traffic density, particularly the Mexico-Queretaro, Irapuato-Cuidad Juarez, Irapuato-Manzanillo and Ramos Arizpe-Piedras Negras lines. 23,835 tons of new rail were installed. i I it Remodeled Dinning Cars for the "Chepe" Line The acquisition of 50 new 4,400 horse power locomotives allowed us to transport cargo volume in a more efficient way. With the new locomotives we eliminated assis tance units and significantly reduced diesel consumption per ton-kilometer. We initiated construction of a maintenance shop at Guadalajara and substantially im proved availability of locomotives and cars. In telecommunications we rehabili tated the CTC system from Huehuetoca to Guadalajara, allowing us to coordinate trains from a centralized control point in this important route. We also installed CDT systems from Guadalajara to Sufragio and personnel calling devices "sicall" and "multirail" for operations planning. Related to safety, the number of accidents was significantly reduced and the per centage of track with "warning precau tions" decreased from 14.2% in April of 1998 to 7.8% in December, 1999. I aorfi '.o ;>f fcrtsfn?:* on H.itfcrtrs II ?>>>!'>i,>>ViTOwi% >^.<iSSSf,<; 111 |y^i||:^||: ili xty>w^:&v&::Wx&'S: lillliii W$k$: Principal Routes UP BNSF * 9 Eagle Pass : /:: Piedras Negras ......1 Tre6^ SltffoA " wonrerrey Ciucfaij Victoria : $ &tefa$ ^Aguajcatieotesl lj \ Altamira f. Tampico jtriiptfatij s Cbtima J MaruanilLlllno 4fc9$- :. > A Queretaro \ + :: Valle.djve-: Mexico : Ferromex Trackage rights - GUADALAJARA - DIVISION Irapuato - Guadalajara Guadalajara - Mazatlan Guadalajara - Manzanillo MONTERREY - DIVISION Altamira - Monterrey Monterrey - Torreon Ramos Arizpe - Piedras Negras HERMOSILLO - DIVISION Mexicali - Benjamin Hill Nogales - Guaymas Guaymas - Mazatlan Nogales - Nacozari Miles 161 367: 288 CHIHUAHUA - DIVISION Ciudad Juarez - Chihuahua Chihuahua - Torreon Topolobampo - Ojinaga CENTER MEXICO - DIVISION 309 Valle de Mexico - Queretaro 237 Queretaro - Irapuato 263 Irapuato - Aguascalientes Aguascalientes - Torredn 334 265 470 173 Miles 223 299 585 145 67 144 341 Railroad Operating Statistics NET TON-KILOMETERS MOVED (Sfiltoss) 25.000 320.000 r*^ rH IIS.WJC 10.000 i,m. \ oi 155? LOCOMOTIVES AVATi.A31i.ITY 94% <32% 90% t. ar*> db <'< - a2 V Averano 1998 1599 Liters (thousands) EUR CONSUMPTION Liters per 1,000 Gross Too-K-i! "7,000 06,000 oi 25.000 24.000 23.000 22 000 2.<X'0 52.00 10.00 Mcrihlj 1997 ovsreftii 199?. 19510 annur:- CARS AVAILABILITY 54% - 55% 50% 88% 80% 84% s a 82% ..80% *, - : ' Avetsris 1558 ...... \&oOoOi - m 1999 ; AUTOMOTIVE THEFT INDEX (eveitt 4{^j^.t^e/U4nspotf^d.u{:jt^d). 8 1.998 V05 jar fab march apr may jun: jul aug sep oct nov dec 4.70 7 20 2.00 0.40 0.60 0.90 0.25 0.04 0.16 0.06 0 02 0.07 0.18 0 17 0.27 023 0.08 0.08 0.00 0.01 Projects and Capital Investment Capital investment during 1999 amounted US$2,950 million including the Mining Division improvements, the acquisition of Asarco and its subsidiaries, and the modernization of the Railroad Division. 1999 Mining Division MEXCOBRE: La Caridad, Son. MEXCANANEA: Cananea, Son. lMMSA: Nueva Rosita San Luis Potosi, S.L.P. ASARCO: Asarco Inc. & Subsidiaries bKAin1LHdUaMAUn rvslnV/lKjliUfsliJi*. --r~r--^ FERROMEX _ Activity Precious Metals Refinery Copper Rod Plant Expansion Copper Smelter Expansion Gas pipeline 106 km.-Douglas, Az. -La Caridad, Son. SX/EW E Plant Expansion Open Pit Operations start-up Zinc Refinery Reconditioning Purchase 100% of Asarco with ope rations on the USA and Peru and exploration in various countries Rehabilitation of tracks and yards Locomotive and haulage Telecommunications Various Systems Capacity Operation Start-up 15 million oz of silver & 100,000 oz of gold/yr 2Q/99 From 100,000 to 150,000 tons/yr IQ/99 From 330,000 to 400,000 tons/yr 2Q/2000 Up to 78 million ft3/day IQ/99 From 22,000 Tons/yr to 44,000 Tons 720,000 Tons/yr of coal " V:- 3Q/2001 4Q/99 :.= 110,000 tons/yr 3Q/99 General Program New equipment General Program and additional equipment 4Q/99 98-2002 98-2002 98-2002 The most relevant results of the mining sector investment program has been the vertical integration achieved in copper, silver and gold metals, at La Caridad, combined with the Cananea Unit, which ships its concentrates to that metallurgical complex. With the acquisition of Asarco and its subsidiaries, Grupo Mexico's production capacity and its mineral reserves increased con siderably. The capital investment program, to begin in 2000 to modernize and expand these operations, will increase produc tion and place us among the largest, most competitive and most integrated copper, silver, zinc, gold and molybdenum mining groups in the world. The completion of the investment program in the railroad sector -a planned total investment of US$830 million in five years (1998-2002)- continues as planned. The objective of that program is to improve tracks and yards, acquire locomotives and cars and automate traffic controls. These investments enable us to improve, on a day by day basis, the service that we provide to our clients and achieve greater efficiencies. Financial Statistics FIXES ASSETS (millions f JolL'.rej CURRENT ASSETS 8 CURRENT UARH.mES (r".:.i*ns ef <3->LCa:$> STOCKHOLDERS' EQUITY & TOTAL ASSETS (siiUisns f aaflsrs) STOCKHOLDERS' EQUITY (!iU:>i>s of dollars) .* * CoM :'ls Assets S-S! Liabilities STOCKHOLDERS' EQUITY 8. TOTAL UAETimES {i*&iens of dollars) umt Stockholders' Equity Total Assets OPERATING INCOME-EXCHANGE LOSSES-NET INCOME {mnlfurrs of dollars) <) vo 600 g 96 -57 9f. S3 "' Stockholders'Equity 'Wi Total Liabilities * During the year, 39,118.899 shares were cancelled and 4,026,000 shares were repurchased at a cost of U.S.S110 and U.S.S10 millions respectively.** ** During the year, 14,014,000 shares were cancelled, by amount of US$58 millions. 40 vo $*> n 133.16 104.09 103.27 75.03 71.34 price copper cts.dll./pound. W$ Operating Income : Exchange Losses '*:# Net Income 1999 WAS A VERY SIGNIFICANT YEAR IN GRUPO 5 HISTORY MARKING ITS INITIATION IN THE GLOBALIZATION PROCESS. BOOK VALUE SHARi {tfoHxrs) UAmmas n* share (dollars} to p- 0. o orn 9? 9S 81TOAf$W$$ WtWzW EXPENSE (t?K%) CASH FLOW PER SHARE OPERATING PER SHARE (jiotUrs) EBITCA PER SHARE (dollars) price copper cts.dll./pound. m fo ci 93 96 gs so The value per share are based on 630,000,000 shares of Grupo M&rico, S.A. de C.V. in circulation as of December 31, 1999. Except for the book value per share wich is based in the number of outstanding shares each yearend. Products and Services METALS AND METALLURGICAL PRODUCTS Sulphuric Acid Antimony (Electrolytic) Constructions Aggregates and Premixed Concretes Arsenic Trioxide Arsenic Selenide Refined Bismuth Bismuth Alloys Bismuth Oxide Bismuth Pellets Bismuth Powder Bismuth Selenide Refined Cadmium Cadmium Telluride Cadmium Sulfide Limestone (Agricultural) Coal Coke (Metallurgic) Copper Selenide Copper Blister Copper Rod Copper Cake Electrorefined Copper Copper Billets Litharge Molybdenum Concentrates Molybdenum Trioxide Nickel Carbonate Nickel Electrolytic Nickel Sulphate RAILROAD SERVICES -- Freight: Agricultural Ores Intermodal Industrial Cement Passengers: Tourist TECHNOLOGICAL SERVICES Asarco Furnace Water Treatment Environmental Services Chemical, metallurgic biochemistry and biomedical Laboratories Refined Gold Refined Paladium Refined Silver Refined Platinum Refined Lead Lead Bullion Lead Telluride Lead Concentrates Refined Selenium Refined Tellurium Zinc SHG Zinc Alloys Zinc Concentrates Zamak Oil and by-products Iron and Steel products Automotive Fertilizers Combustion Systems for furnaces *< .W'AVJ.VA'l'#9>S,MV.%WAAVA,.VM,AV.'.W.,.VASViV*SS,MVAyM,.W/AVAW.W.SWAVAWAVA'MI.VM,.WMVAVWWiWiVi,*.V. ?.yK;Ww';Ki.Aw'M';x^iK;wW^$^<wwW.<:>Msssvv*.Kmv;fwS-jx,.:vf^?n;svwvAs^'sXvv*w.m<vsiwA^svv^m&**w.f'%<mv^v-v/A.\j>^svv>. .vvM>AVwMifwVijvAi.^v.AWwM.^>v^MsVvK.M&wVA..V?*M*?'tVs'&Awj.l'vv.*.&y,iVk&S.Ms&w^>^*vN*^?A%*<*|,Sil\&sMvij'!|.|V?^A&*sr<*?iS?>' w.K.*ss'>-.:.siK.>M<N\M\*>vM*:<K^j5 mmmmm Grupo Mxfa>, S.A. tfe C-V. 6. MEXICO , tteGifcuartm 8<j>t Culif'jniw ?QO 0u7t>Q D,F. Phone. 5S <A 70oi FtfC f>4 7ft77 mvw.gmexic&.cora