Document N2ZxN71oN34q4rVaqvVxLeKLy

lor-tld-eu Continued r. i.Z~t -- j'-ifenna petals. : ir. d 3. A. Surd were consulted regarding liquidation of aetal balance* between the tw th -.-.ere in agreement ths-.t cash eettlemer.ts should be cade in the near future aa it fleeced un- <: ay-ends 1:-. kind could be rade. A suggestion was zM.it that such diffflraneaa as existed, cn April liquidate! to coincide with the expected taking of a certified inventory at that time. Mr. ici .u i - he would consult with Mr. Fugc Johnson of the 3. 3. Cccqany regarding payments fcr these j>* March ?i, I?59 the balances were: : ed V.- 3. S. iorrpany te Internet ior si - 3istcuth - Silver -ed hr International to 7. 3. Company - Gold - Lead - 11,201 pounds -170,573.34 ounces - 913.691 ounces - 410,930 pounds jere will apparently be no difficulty for International to return any lead it may owe to the 3. 3. Company ir. subsequent norths but repayment in kind by either company in respect to other metals is less certain or irpr'.iatis j, April 33, 1955 Mr. McKenna conferred with Mr. Hugo Johnson regarding cash sattlementa for matal owed by one company to the other. Mr. McKenna informed the Auditor that Mr. Johnson agreed that cash liquidations should b# made soon, preferably after the taking of the expected certified inventory on May 1, 1959* Allowing time for the computation of revised allocations due to uee cf a certified Inventory such cash adjustment should be made the latter part of Kay 19J9. ; - fcidit c? lead bullion ehipments was made only on shipments for account of the 3. 3. Company. All data were in pod order and were properly recorded in "Lead Bullion Protection Statement - 0. 3. Ceepany Portion*. Matte snd Solese Copper aatte and spelsa are Smelting Plant protects shipped to the Anaconda Seduction Yorks. Settlements are prepared at Anaconda with entry crediting International* At Tooele proper sales entries are made for each product. The Statement cf Combined Operations, Blast furnace teelting section provides an allocation of ikes* protects to 3. 3. Company end International. This allocation provides a basis for computing settlessnts for 3. S. Company's share of each protest. The Journal eontalus as entry charging sales for the 3. 3. Cogmny portion end crediting that company. bdlt disclosed that proper settlement tens wrnpe used, in computing the 3. S. Company portion of sales according te the contract which provides that whan one eat of terms, is used for satire shipment International is to Maputo the share of the 3. 3. Company and tepter'pa^aect for saqa. 'Mesdsd Sine Fuas Sales fcleadad zinc fume sales were made to American Zinc Company, _Kationsl~2lnjc Campany and The Anaconda Company. Thi fun is stored as proteced and maintained as an Identillable finished inventory on pleat reports. In this re spect it is different than copper aatte and spelsa which is' not carried on plant inventories aa finished pro- , tecta, but which are considered aa such only vhaa shipped. Consequently these copper protests are carried on the Statement of Combined Operations as protection items and as adds Are allocated to the ooehlaed companies ar the entire amount due the 3. 3. Company is settled for. Daleated slno fume is produced la greater quantity ttu Is sold which requires that a flret-in first-out method be applied in apportioning the tale between the compart Sts sale made in February 1959 was accounted for by stock rsmsining frea December 1958 protection and a portloi ternary 1959 protection. fwc.h companyfs proportionate amount of protection for these aonthe is therefore date' from prior inventory belonging to each to arrive at quantity remaining for sale. Bookkeeping entry is then aa* tvediting the 3. 3. Company for its share end charging Belsided Sine fume Sales. local managements have agreed that International mSy'elaisi lCCJf of sales to American Zinc Company (toll baai ted shipments to The Anaconda Company, terms for.sals to these companies being confidential. Weight and quant *iee of these two sales are therefore detected from appropriate months production belonging to Anaconda when iteration is made to the combined companies. records showing the distribution of the sale aid the apportionment of the revenue were found to be in order. &a? sine oxide, similar to deleaded sine fume Is sold from inventory on s first-in first-out basis relatiae ^location to the combined companies. During February 1959 a sale of 3,OCX) pounds was -tie. The sale -as Placated tc the two companies on the basia of each one's proportionate share of September 1958 produced r.. A of -hat month's protection still remained on hand at February 22, 1959. N10036 PNYC00000122 ^ 6oaUm4 i s oxide si - Continued ^teriel i sold on the basis of 41C.C0 per cvt, F.O.B., destination, from consignment stock. Freight Passions or.i disc-junta ere deducted. A statement is submitted to the C. 3. Company showing full detail. Jj^mBch as it is oold or. cvt basis, regardless of metal content, the net return is merely prorated on a dry oasis to determine esoh ccmpsny's portion, i detailed record ia eaintained, however, of metal content -siting In inventory. If sales were made on any other baeie then per cart, the information would still be trtilable. records pertaining to sale of leaded lire oxide were found to be correct, and er.try crediting the U. 3. ^count was verified. gl fume la removed from the sjeiez. prior to the deleading proceee. So inventory of this material is regularly ''jjrried, however, an order was recieved froei the American Zinc Company of Illinois for shipment to Halliburton Oil Well Cementing Company, Dunoan, Oklahoma. The materiel was Bold at 7.32* per pound end wae shipped collect, jlailar to procedure on leaded sine oxide eale, the net return w*a prorated to each company on a tonnage basis, though a net diatrlbutlcn is available. p jst amount due the lr. 3. Company for this materiel was noted on the earns statement submitted for leleaded ^ rise oxide. The entry to journal was verified by the Auditor. pa cr negro jure pmsrr c o s t s i'eoaputation of lime fluxing coat and allocation of seme is reported on pegs 11 of the February 1959 Cost 'Utamanta. The method as heroin used differe from that as illustrated in Exhibit C of tho contract. Brief!y te method illustrated in the exhibit takes into account the deficiency of either party's CaO content in pro- *w#sisg a required alag grade. This deficiency ia then multiplied- by a cost per unit of CaO, the unit coat : Mug the delivered oost of lime flax, the ooet of Sinter d aottrell and 80$ of blast furnace coot, all ?4Jded by the excess units of CsO (CsO less Ineol.). The method as used aooouete far the smelting cost of - .g'Ume material used on a per ton.heels, added to. the aetuml purchase eost per ton. & JnJtoditor was advised spttly being used. that the managements of the (1 Wgsrg-.auufcJtoeraatlonal agreed upon the method pre- -*.i; V.t ,1 to computation of Inaol., defioienoy wae made acocrding to ttmamthod iUuet)rted in Ishibit C. It was noted , flat the estimated ooet of a unit of eUiom em uaatVlp the etotodjt wue -tot* - The same estimated cost was used : % ocmputiag the Februery 1959 oherge. Inoidst*Uy, far thmi month International wee charged only *32.78 for it* Aoeol. defioienoy end 0. 3- Company sate ,7H*U torlAh toe,torn* amtwd ...... fitter allowing for proper charges for lime flux, the balaaoe of the blast furnace coat was allocated to tho - awgenieo on a tonnage treated, beeia end the total east ftr wd gk--iry, pdtoeted by the inaol. oharge or ' edit was entered en the blast furnace cost et*t ament aa tha affinal ooet to each company. V. J. HoKanna god 0.-JU tort-.were consulted regardinguee of 23*per. unit estimated silica credit. Hr. to* stated that this- pries mam. am eeevate am any jmaUmbl*- and that to mid eontlmne to be used as final toil a more accurate one mould.become auatlahls..,- . . t .. .; ;to computation of tho apportionment of the Sintering Plant ooet homed 50$ an sulphur contest -of material treated ` to J. JS. based oa tota_l tonnage of material treated wweeaalisn m*eaoaoorrddeanaccee*'Kvith eucntraeot provissiionn.s as mmmarised in *1* audit. All data were cheeked and. the ooet allooaticfejmm trees* to tha Materlag Plant coat etatant. ^*t**February 1959 tha combined sinter feed avereged 34*36S$~fm4i ef g. 8. Company averaging 39.215$ and Inter* toiinal 25.427$, all excluding lead diluent added. Including acme tfcrrey slag added sa dilnact the respective percentages were 34*138$, 38.820$ and 25.427$. It is apparent that the diluent was necessary to reduce the high $* * percentage caused by treatment of 8. 3. materials. A settimeant was prepared showing tho entire value of "4* elsg usod by the 0. 3. Company. A portion ms treated at tha Blast Furnace and was included as a portion - of its treatment tonnage at that plant. The portion treated at the -81 ntaring Plant was labeled at such on the it*t meet of Combined Operations, indicating its use as a diluent. PNVC00000123