Document mq2rEMx4RkVV0bpVm1m73w9M0

Anaconda Copper Mining Company DRAWER 19B1 K. B. FRAZER '^inSTANT S*0*TA*T m 'AamaTAKT Twkapubm* Butte. Montana December 13, 1951 Kr. Horn Warburtoa, Cashier International Smelting and defining Company 321 Kearns Building Salt lake City 10, Utah Dear Sir: Herewith, report of Hr. C. 5. Sovran, Traveling Auditor, covering audit of metallurgical operations of the Tooele Plant of the International Smiting and Defining Company for the month of August 1951. Two additional copies of the report are enclosed, cue for Hr. Floyd and the other to be given to any party who might be interested. Tours very truly. WJPT3 Enc. eet Kr. S. 3. KcCLcrs Hr. W. T. 1HOy PNYC 00012285 N11175 Anaconda Copper Mining Company DRAWER 1901 K. B. FRA.ZJ3K AKTAnT SSOVWTAIT AJTI AIITA!CT T**a.'*** Butte. Montana December 13, 1951 . fBECEiVED ! . 1 !>EC 1 31951 1 Mr, E, 3, Mcdona, Vice President Anaconda Copper Hining Company Hennessy Building Butte I ^ q^LY i 1 ; tV- *>_-- ----- ------ ' Dear Siri Herewith, report of Mr, C. E, Howan, Metallurgical Auditor, covering audit of metallurgical operations of the Tooele Plant of the International Smelting and Refining Company for the month of August 1951, The Auditor'a findings are ausnarlsed on pages 14 to 13, inclusive. Copies of ay letters to Mr, V. K. Daly, Comptroller, and Mr. Rea Warburtou, Cashier, are also enclosed. Tours very truly. WJFjTS She. col Mr, W. K. Daly N11175.01 Anaconda Copper Mining Company DRAWER 1961 E. B. FRAZER Assistant Skcuxtajit AND AllllTAtT TRCAimZl Butte. Montana Mr. W. K. Daly, Comptroller Anaccnda Copper Mining Company 25 Broadway New York 4, New York Dear Sir: December 13, X951 1 RECEIVED i DEC 1 3^31 1 W. K. DALY Herewith, in quadruplicate, report of Mr. C. E. Rowan, Metallur gical Auditor, covering audit of metallurgical operations of the Tooele Plant of the International Smelting and Refining Company for the month of August 1951. Reports are for the following: Mr. W. K. Daly / Mr. W. C. Roney v Pogson, Peloubet & Company Extra ., ' Valuation of inventories is set forth in detail on pages 10 and 11 of the report and in this connection we note item (4), page 18, wherein the Auditor states, "The New York Office is herein asked to clarify the desired inventory valuation procedure. The methods used are changed at will to facilitate recoveries and to hold low costs and all parties concerned desire written instructions." Errors and Discrepancies and Conclusions are covered on pages 14 to 18, inclusive. Mr. E. S. McGlone, Vice President, has been provided with a copy of the report and three copies have been sent to Mr. Rom Warburton, cashier, for distribution to interested parties in the Salt lake vicinity. Copies of my letters to Mr. E. S. McGlone, Vice President, and Mr. Rom Warburton, Cashier, are also enclosed. Yours very truly PNYC 00012287 WJF.-TS Enc. N11175.02 'JJ-VAItV ./) TMi,,A imtiatatiihai smelting ;j:d defining cckpant TOOSLE FLAI-T - TOOELE, UTAH ; ''i ; ` ; v"C'; REPORT W. AUDIT OF THE UULPHIDE CUMCEJTRATOR, THE LEAD PLANT AND THE SLAG TREATING PLANT:'' OF THE INTERNATIONAL SMITING AND REFINING COMPANY. TOOELE, UTAH. FOR AUGUST 19SI ' M-ONTH OF AUGUST 1951 . . ' C. S. Rowan TD'-E REQUIRED FOR AUDIT ' ' September 17# to November 16# 1951# inclusive Audit oT the Ketallurgical records of the Tooele Plant of the International Smelting and Refining Company for August 1951 included the three operating plants# as follow* Approximately 61,5)?# 17/ and 65^ of the purchased receipts of the Concentrator# Lead Plant and Slag Treating Plant# respectively# vere audited In detail for weights# assays# unloadings# contracts# settlements and coats. In addition# 35% and 23% of purchased receipts of the Concentrator and the Lead Plant# respectively# were audited for Tooele weights and unloading9. This covered seven fully audited shippers and four tested shippers. Detail on some receipts and new contracts appears in the report, ... . . ' All of the outside shipments and interplant movements were audited in .detail'as were most of ths Interplant movements at the Sulphide Concentrator and the Lead Plant, All^ahipmsnts-fre:the Slag Treating Plant were audited except two cars of Deleaded Zinc Fume shipped to the; Great>Fllls Plant' of the'Anaconda Copper Mining Company, Final and preliminary data as included, in the August' statements were used in all cases, ` 'N . Inventory observations were made on September 1st and 27th# October 1st and November 1st# as detailed in the audit* All four observations were checked to the books to determine practices and.accuracy. All September 1st inventories were audited in detail from the physical and estimated inventory .reports on into the statements. Valuations of all inventories were also audited. In fall including purchase oosts# fixed operating costs and worked bacu inventory, A complete review of the lead plant metal'valuation was'wide and a discussion of such is presented herein, V\. ' r1.'-. August work sheets and statenenta as well as August 31# 1951 euanlatlve statements were audited using the data as mentioned above and assuming all July 31# 1951 inventories to be correct*^) *'..,. . '. ... , C, E. Rowan Ketallurgical Auditor ; - November 18# 1951 ' y. ; - PNYC 00012288 .v.. LV* ,v> i/rrc.r.Juio'AL suiting and aspiriiKi cq-tai.t TC'CELS PLATT TOOELE, UTAH KC1-TI CP U:-?a-T 1951 I K n| E X SULPHIDE COKCETTRATOR: Receipt* Shipments Inventories Valuation of Inventories ' LEAD FLASrT: Receipts Shipments Kiscellaneoue InterpLont Tx*ansfer; . Inventories Valuation of Inventories slag Tnsrrura fla;:t: Receipts Shipments Inventories Valuation of Inventories Sulphide Concentrator Lead Flcnt Slag Treating Plant General GSiEiLa ctnusrst Lead FIant Cottrell Fire Copper Plant Write Off Date of Receipts Adjustments to arrive at Normal Recoveries Excess Fetal Recover? from Furnace Pottons ' CONCLUSION Sissi 1 2 3 3 4 to 5# inclusive 5 to 6, inclusive 6 to 7> inclusive 7 to 8> inclusive 9 to 13> inclusive 13 13 13 to 14/ inclusive 14 14 15 15 15 15 15 to 16/ inclusive 16 16 to 17 inclusive 17 17 to 18/ inclusive PNYC 00012289 y.L'l.sl -J-v-.r ; zstiniis ccrfaky 1L v; T - iVCSLE. UTAH 0? AlVrloT 1951 siukide cu'csn.woa Park Utah Consoi'datcd linos Company - Pro Tlij.P ore accounted for ov<-r A?*> of the Concentrator receipts in August 1951, The contract has rcr.cin'-d '^ntially Mr same as detoiled in the 1948 audit. The treatment cost has risen to $1*49 per dry ton and the sampling credit has been increased to 50 per dry ton. This ore is all sampled, weighed and assayed by the Uteh Ore Sampling Company and the International Company accepts and uses these weights ar.d moistures but averages the assays with thsir own and.calls for umpires Wien needed. Ail i>nist zinc contents were totaled and averaged and the shipper was paid for the balance of 7..lnc ?n tvo lots which had b-^n given the AO pound minimum deduction because of low content sine* Chic ir. <0lr\-d In t.h* contract if the monthly average assay is largo enough to receive the 65,t pay ment. X'VM:" pounds wore pMO for at 9^438* per pound. Also, tho difference between the July samp ling ci-'d't t'-hp.! (pO per di" Vr.) pnd half the July sampling charge ($1.00 per wet tcc) was paid to tho shipper as allowed in tho contract. Fred r.nd Earl 35> iHr - Ore TIi n j~M-r,inc or'' fron I'ctchu^, Jdrlio, received in August 1951 amounted to 5 lots or 4.7X of the .'":* Th contract of Irptonl^r 15, 1948 states the usual metal percentages and prices K"t t!'o '''nl5oato copy has not ynh h-:r signed and returned, as is the custom. The August 1951 treat ment co-t 2.921 per dry tor. and copper is not paid for. No agreement could be located for the 8j# royalty raid on each lot to J. B. Zldridgo, owner of the property* I'cFgrland and Hu]linger - Tailings . There teilincs are from Park City, Utah, and accountod for 6.5# of the August 1951 receipts. No written contract wan available but the terms of the last two lots were listed by Kr. G. A, Burt, Oro Player, cn cue of the lot sheets, as follows? .' f>old - 100* "3 *16.00 per ounce, if .01 ounce per ton or over* Silver - Q0% market over 1 ounce per ton. lead - 100,t 9 $1.50 per unit over 1*5 units. Copper - 1003 ft $1*50 per unit Zinc - 1003 0 81.75 per unit after deducting oxide tine and *7 unit. Treatment - $4.00 per dry ton. Hauling - $1,00 per wot ton to shippers. . Splitting Limits - Au. - .01 ot. per ton, Ag. - .3 os. per too, H>. - -3.$, Cu. - .2%, Zn. - .5*. - r?.:nnent - Half to Silver Ling Coalition Hines. IV:'c terms were higher than those on the first three August lota because of an upswing in grade during t/. s month. Neither formal contract was available. Anaconda Cor-oer ' ir.ing Company - Silver Iron Concentrates TVor* concentrates accounted for 34-5^ of the Concentrator receipts for August 1951. Tooele , weights, moistures and assays are used on the settlements. These were checked in detail but the settle ments thei-relvcs ware not proven because they are checked yearly in Anaconda, during the Zinc Concentrator Audit. . PNYC 00012290 oin.n:iDE cccetrator 2, Load Concentrates to lead Plant. In August 1951, five cars, 293 wot tons of load concentrator were received and treated at tha Load Plant- All Concentrator production is considered shipped, used as lead Plant Receipts and the lead Plant carries all inventories. These shipoents are adjusted monthly to arrive at normal Concen trator recoveries. August ehipaents were reduced by 13,000 pounds of lead, 1,700 ounces of silver, and seven ounces of gold. Bach car is assayed so this reduction in August pushed the concentrator recoveries down and helped to raise the Load Plant recoveries at the same time since all ef these shipments were rccoived at the Lead Plant in August. These adjustments are made at December 31st, es well, if needed. ' A schedule of payments and credits, similar to the Lead Plant epea contract is used for valuing these concentrates for transfer. The schedule, including latest changes In freight and labor, is as follows: Lead Copper Zinc Silver Gold - Less 1.5 units, balance 95? N. T. prioe, leas 2*0225# per pound. - (Kin. deduction 10 lbs.)90S N. I. price, less 3.5225# per pound* - If 5? 80? 22% of East St. Louis price. - If 1 ounce 970 Hint Price - If .02 ounce 91? $35*00 per ounce * . Iron .Insoluble Sulphur Zinc - Credit - 6# per unit. - Charge - 10? per unit ` - - 2? freo - balance 25# per unit - Kasdnua $2.25 ton. - Charge - 15# per unit paid for. . Treatment - `5.215 per dry ton plus or minus 8# per unit ef lead over or under 48?. (after deducting 1*5 units) Labor Base Coke Ease Bullion Freight Be.se - * 9.85 - 15# for each'- 25# change - ,`16.167- 15# for each - $1.00 change - --22.95 Heights, assays and value of shipmenta wore audited in detail for August 1951* Iron Concentrates to Lead Fl&nt Concentrator production is also used to determine lead plant receipts but no adjustments are made to como to normal concentrator recoveries* All inventories are Lead Plfnt inventories, August 1951 shipments were 18 cars, 759 wet tons. ' The schedule for valuing these iron concentrates is as fellows: ` Lead Copper Zinc Silver Gold - 50,? at W. Y. price lees 4*0225#. . - - Deduct 20 pounds, balance at M, X. price less 3*5225#. - ho payment. ' - If 5 ounce, 95? at Hint price. - If .02 ounce, 91? at $35*00 per ounce. ; Iron less insoluble - 5# per unit, oredit* Treatment - $7.59 per dry ton. If entire value is deficiency, change treatmont to bring total to sere* Labor Base Bullion Freight - v 9S5 - 15# for each - 25# change * v22.95 base. Heights, assays and value of 3hi]ients were audited in detail for August 1951, PNYC 00012291 3- J,n:7/JE Cr; Cuo.T.UTOIt All Concentrator bin inventories wore measured on September 1, 1951 and observed and noted by Kessro. J. C, Wilson'and tf, F. Foil, .Tr,, Pog3on and Feloubet Auditors, These measurements, capacities and specific weights arc used as ccrperisons. Full oars and/or lots are used to approximate the esti-- Mated tonnages. Actual voipjits y.nd assays are used on a first-in,* first-out basis. Stockpile removals arc at average stockpile assays. Zinc conccntratos on hand ar* weighed and assayed. Lead and Iren concentrates are included in Lead Plant inventories# The Superintendent prepares a monthly oheet detailing the full lots which remain in bins, estimated weights and actual weights cn any zinc concentrates band. This report is used for inventories whereas bin measurements are only used for checking, Cn September 27, 1951 the Axiditor viewed the shutdeve concentrator and its inveateriea. No fixed in-process inventories are reported for this plant because it is usually between runs when inventories arc taken and any material cn hand belongs to the prior nut. Some base material was observed in the classifiers and on the floor but neither the Superintendent nor the Accounting Office thought it to be large enough to affpet rvcoverles of the prior run and put it into inventories. of iT/s:To:aE3 . Stockpile and Fins A3 explained in thr previous audit, these ore inventories are valued on a cost basis except for silver and gold. Each lot, on a fir."t-in, first-'Out basis for weight, is valued at cost. The total r-ilvf-r ounces paid for are valued *t 34*75* p-:r ounce. The total value of gold paid for is divided by ?34.91 to arrive at ounces paid for ar.d this total is valued at i;'34.00 per ounce. The theory back ef this is that, even though the terrs of the many contracts differ in percent ef geld paid for and price, all arc based nn a 334.91 price, approrfxately# This io market price less cost to market.' Ores and concentrates in bins which were not sampled at the public sampler in Salt Lake are given a sampling cost of i.4646 par ton which is an old fixed Tooele sampling cost. Stockpile materials do not carry this because they are tc> by r-ompled again before treatment. . Zinc Concentrates Zinc Concentrates are oti21 valued at the contract salos prices except for silver which is valued at 34.75* P'.-r ounce. The contract states, a gold price of i33*78 per ounce and this is used for valua tion. PNY000,US2 1. Ik-'i-". 4 .'iCE) ITS Chief Cc: 2 .Ar.rr Company I^cfA 0;;e ., Th date of metallurgical receipt of tMa ore depends on the availability of the silver affidavits and/or the final rettlenont data in t.ini- to enable the two offices to submit their estimated profit and loss statement by the 12th of the following nonth. If a let is on hand at month end but the settlement is not complete in time for the estimated profit and loos statement, it is regarded as cot yet received in that month and the inventory io adjusted. This is true of all other Tooele receipts, also. Chief Consolidated ore accounted for 14,5* of t>*e lead Plant receipts of August 1951* Pull lots of this ore are weighed, sampled and asseyM by the l tah Ore Sailing Company of Salt lake or. by the Tooele Plant at the discretion of the shipper. In August 70-> of the lots vere weighed at the Tooele Plant, seven , lots, 505, wsre sampled, assared and writhed by the sampling company and were completely audited, through settlements and contracts, to lead Plant receipts, The contract dated January 22, 1943 contains the following payments and charges: Gold - PM'.--> ,02 oz and .1 os. - 1003 9 51,816 - O-r .1 ns. - 1003 9 52.516 / DM *'cr - 1 c.z.' or over - 963 9 Mint cm date of arrival Lead - If lb sei-.t.lesvjnt or over, deduct 1,5 units from vet assay and pay for 903 of balance at i', X. price, less 1*97251 Zinc - 6 to f>: - fX)X$32$ of L'aat St. Louis price 0 to 93 - S0. S 233 - ? to r>5 - SO,* 3 243 - Over l<rs - mo3 253 - Tf under 63, can u!' monthly average and pay for *11 as above Copr-'r - deduct 12 pounds, balance at U, I. cathode price less 5*52251 Ir.rM ub3 ft - 10* cherno per unit Sulphur - 25* for each 1,3 over 2,?. tturinom $5*00 per ton Iron Lime Zinc - G* credit por unit ' - 5* credit per unit if ever 43 - All poid zinc at 15*..charge per unit - Arsenic and Antimony 2f free - 50* charge per unit on excess Treetnent v 6.556 per dry ton - Add or subtract 8* per unit when lead is under or over 20% Credit 25* when copper is .53 or more Credit 25* when sampled by U. 0. S, Co* If net return is under yll.OO, credit $0% of difference up to L^urr a r>.x^mum of >1.00 v 9.85 - add 15* for each - 25* increase ' ' ' Coke `'ase >15.755- add 15* for each - $1.00 increase ' Pnli.lcn Freight* $20.64 - variance for shippers account, made in lead .price Splitting Halts Au. - .01 os, jig* - .5 os., Pb. - .43 Cu. - ,23, Others - 13 To be sampled weighed and assayed at Utah Ore Sampling Company, Salt Lake at the shippers decisico* These ten-3 include the latest letter changes of April 6, 1951 and November 1, 1950 which were the latest freight and wage rate changes, ir> that order. In the earlier letter of.Norwher 1, 1950, from Hr. 0. A. Burt, Ore Buyer, to Hr. 2cm Warburton, Cashier, the wage increase of cnenfla labor from $10*25 per shift to 011*05 per shift effective October 15, 1950 was noted* The later letter from Mr. Burt to the Ore Settlement Department noted the freight rate increase of 23 effective April 4, 1951* Bonanza Tine, naconda Copper lining Company - Lead Concentrates Three lots of Bonanza lead Concentrates, 1.53 of August receipts, were received from Palmers, Washington, Tills concentrate ccm.es under a new contract dated May 22, 1951 covering one year with a nixty day cancellation notice. The contract, in a letter from International Metallurgical Manager, Hr. . L. Sackett, bait Lake City, to Hr. 2. 5, HcGlone, Vice President of Anaconda in Butte, and signed and returned by Mr. McGlcne, contained the following provisions: -* ; * * GoldSilver .05 to 5.0 oz, 1003 9 $51.81825 Ovr-r 3.O0Z, 1003 3 $52.81825 1 oz. or over 953 9 Hint Frice PNYC 00012293 if LBAD PLAi.T :CEIFT3 - Continued Bonanza Line. Anaconda Copper Nlniny, Company - Lead Concentrates - Continued *?-, . ' ;' 5 Lead Copper Arsenic and Antimony Treatment Freight Labor Coke Bullion Freight Under 255 - 905 of Wet Assay, Minimum 2*55 25 to 50/j - 915 of W9t Assay Ovei- 505 - 925 of Wet Assay . Frieo - Average New York E & K. J. price week ending Wednesday, next preceding sampling date, less 1*78* when lead is 15*, plus or minus *031* for each 1* change in lead price. Also plus or minus change in Refinery labor rate. Deduct 20 pounds, balance at ft. T. price leas 6* per pound 1 ' free, excess at 50* per unit !/9*00 per dry ton, F.0*B. International - Utah International pays freight from Bradley, Idaho Chipper pays only freight to Bradley, Idaho Smelter - $13*6467, Base. Add 17* for each 25* raise Refinery - $1*55663 per hour Base. Adjust lead price 3*5* per ton of paid for lead for each 1*. Use third preceding months la'>or cost average *16.167 Bc.ce plus 15* for each $1*00 raise ,22.95 Base, Variation for shippers account, made in lead price deduction* The splitting limits on assays were mentioned in a letter dated June 20, 1951 from Kr* B. C, Stephens, Manager at Bonanza, to Nr. B. L. Sackett, suggesting limits of ,55 on lead and .5 ounce on silver. Nr. Sackett agreed in bin reply of June 25_, 1951# August 1951 Eonanza Nine receipts using Tooele weights and assays for settlements were: Wet Weight Dry Weight Legi 332,720 lbs. 303,187 lbs 164,829 lbs. 53.483? The zinc was not paid for and there was no gold content* Zinc 3,657 lbs. 1*195 Silver 1,491.69 oz, 9.66 oz* SHIHSNTS . _ Lead IBillIon to Omaha* Nebraska Lead bullion shipped to the American Smelting and Refining Company, Coaha is the major product of the Tooele Smelter. The silver is returnable 1005 in 40 days and the lead is returnable 1005 less 6 pounds per ton of bullion in 20 dayu after receipt at Qaaha* 99*55 of the gold is paid for at . *34.9125 per ounce. The contract has remained the same as outlined in the previous audit except thAt the last'half (5 years) of contract period started on June 15# 1951 and-the supply co?t addition to treatment cost went into effect adding 02*769 Pr dry ten to the treatment charge of June receipts after the 14th. Also the splitting limit on silver was raised to *3 ounce in June 1946 in an exchange of letters between Nr. Carl Gall, Manager of the Omaha Plant and Hr. Carlos Bardvell, Superintendent of the Tooele Plant. If silver ran over 100 ounces the splitting would be raised to *4 ounce. ' The final settlement for June 1951 shipments was audited in detail as was the preliminary settlement for August 1951 shipments. The settlements and entries are made in New lork, but the settlements are checked in Tooele as received. *. August shipments with Omaha weights (final) and Tooele assays fnd costs (preliminary) were: Total Weight Lead Bismuth Silver Cold / Gold Payment Bismuth Charge estimated Treatment -intimated Freight Assavs Pounds 4,801,851 98.703? .060? 4,739,475 2,881 84.27 oz* 9363 oz* Ounce. 202,325*00 2,246*00 Payments J 78,095.77 PNYC 00012294 RetupnabJ.^ 4,720,268 lbs. None . 202,325*00 oz. -- Charges mtmmam a 6 L.3AJ PLANT SHIITES - Con'.inuou Conr^r "ullion to Cory-'; b'crjcs Two p.?.rs of roppu* '-ulJiwi were shirred to the Raritan Copper Works* Perth Amboy, New Jersey in frru'it 1?H* 'doth wer* at that- plant in August along with fiT care in transit on August 1, 1951* . oritan weights c are used cu receipts whereas until receipt, Tooele weights and assays are used preliminaries* Jettler-.ent.s, payments and entries are handled in New Tork.- The audit in cluded only the use of -Triton vniphts and assays on August Raritan receipts and the inclusion of those figures intr> the I'etallureical Statements* Cadmum rw-.s to Groat Frlls, >`cr:tena> The Fv.ne Toasters did net operate in August 1951 nor was there any inventory of Cadmium Fume on August 1, 1?51* nscRiiAi'd-hs iiT-yjLAi.T T^rcr:y^j_h_^v^frrs ' As n ,n.i] c ?.l trsnsforc bstv^on t ^ throe major`plants. Sulphide Concentrator, Lead Plant and Sl;-r Tr-atj..:e H?.*it, ore valued v'\ transferred on entries hut materials moved between divisions of one plant are not forcibly transferred* Often one division will charge another for treating the jitter's material, hut no -/itry follov'S that movement. The five divisions of the Lead Plant are: Ccoper Converts -Cadmium Aoar.i.er: Sintering PlMit Hast i?vtvnc*''--3 Dressing flo^t - run at intervals to recover copper - run at intervals to produce Cadmium Fume - prodxices 3inter for the blast furnaces - produces lead for drossing - droff dross and pours lead bars The Cample Till ia not a division of the Lead Plant* nor a separate plant# Its costs are distributed to the pl-nt-s 3orviccd xr.l it har no metallurgical statements* The weights, moistures, urloadintis and assays of the following materials were checked in detail: Load F:ir.e iron Slag Tro?+ inr Flant This materia} is vrei.thsd by cars and assayed monthly* It entors the Sintering Plant charge Mns and bccor.es a part of the sintering nix* It is transferred by entry ec explained in the 194S audit* . Cadmium Calcine This calcine is produced at the Cadmium Roasters after the Fume is drawn off# It ic to the Sintering Plant charge bins, also* In August the. entire August 1st in- ventejy vas shipped so no current wights or assays were used* Hast Furnace Dust This dust, recovered from the Blast Furnace Baghouse is returned to the Sintering Plant charge bins. Actual weights with monthly moisture and assays are used* Old Cooper Plant- Inventories Mow that the old Copper riant inventories have been transferred, they do not require entries when used. In August sons old reverb dust and copper calcine were sent to the Sintering Plant but since all the metals except copper in those old in ventories have been recovered, only copper is used on the metallurgical sheets* Current weights and copper assays are used* . , Some old reverb furnace bottoms were also treated at the Blast Furnaces in August but only the copper content was used* See General Remarks for discussion of excess ratals reclaimed- - Converter Cleanings . This is slag from current runs at the converters which is sent to the Blast Furnaces for further recoveries. It has actual weights, monthly assays and contains no moisture# .` PNYC 00012295 fr ._______ L.nwa 143. XL \r~T 7i T'lGCEl I..V '.-U S i:.;'. -J'L ; T TAA: oPUio ... ; ? 5 T3 - Continued Pro~3 Acverb Vatte and opciss The Convert-ro rswive and treat this material from the Blast Furnaces. The August transfer was from the An (past 1st inventory and carried those assays. Tlsst Furr.?ce Cadmium Dust :.'irh c*rl<iium cortrnt durt iy accumulated for twice yearly roasting run# at .the old ccppsr roasters. Tone ys shipped in August 1951. 3int*~r to ilast Furnaces The product cf the Sintering Pans is weighed by cars, adjusted by inventories at the f;lc3t Furnace Tins arid th? balance used as shipments to the Blast Furnace and as blast rui-nace Treatment AJ3 inventories are for the Sintering Plant. A fixed moisture of .75-'* io u3~d. Conotunt Ions percentages are used or. each metal to arrive at the con tent. of the sinter, sv-m though a monthly azsay is taken for comparison. August statistior. on sinter shipped are; Fixed loss L*ad <v-rf* Copr-T *5% Zinc 1.55 Silver .55 1.05 . ror.th.ly Assay Computed is3ay 99.2.0:: 29.q6:: 2.00,i 1.95. 10.705 9.026 22.46 os. 25*163 oz. .24 oz. .278 oz. I'or.thly Wfllnhts 4,477,236 lie. 306,660 lbs. 1,640,631 lbs. 172,189.59 ox. 1,839.960 ox. Computed Weights 4,455,/70 lbs. 298,994 lbs. .1,303,037 lbs. 152,950.47 ox. 2,131.287 ox. Pot Slag to the 3Ia>t Treatment Plant The molten slar> sent to the Slag Treatment Plant is computed by assuming no loss of iro and manganese at the hloct Furnaces. The total treated iron plus manganese, including that At-, the cold dump slag, sort-p iron and coke, leoa the production of iron and manganese In all Materials except slag is the content of the slag. Using a monthly composite assay, the dry weight and othrr contents of the slag are ascertainable. The cost is transferred to the olag Tresting Plant on the following schedule; - Zinc Charge * Total zinc content of molten slag less 95% of all zinc froor the Gleg Treating Plant treated at the lead Plant during the month plus cold slag zinc and toll zinc treated. 75% of this canputed zinc content ie paid for at 20 of the monthly average Prime Western Prices Treatment of Cold Slag Charge ' - v7CO per dry ton treated by Blast Furnaces. Increased from >5.00 per ton in August 1951 * per letter of August 21, 1951 from Hr. Sackett to Kr. Floyd. i?r/s:'.TCxi53 Credit for further Treatment of Toll Zinc - ?6.75 per dry ton of toll material treated at the Lead Plant during the month. At o A,. I on September 1, 1951> Messrs, J. C, Wilson and'W. F. Noll, Jr*, Pogson, Peloubet & Company Auditors, observed the taking of all bin inventories at the Tooele Smelter. The measurements were recorded and turned over to the 1`etallurgical Auditor upon his arrival at the plant on September 1$, 1951'- These bins accounted for a major portion of all inventories except.stock piles. Being taken at the end of the audit period, they did not necessitate any duplicated audit euch as 'Mas re quired with inventories taken at a later date. Bin audit included converting measurements to weights using specific weights per cubic foot if available, checking weights to inventory sheets and extending contents usJng specific assays. Full or partially loaded cars on hand were accepted as recorded by the clerk who observed that inventory, but were further audited for dump weights and dates, assays and ex tensions of contents. This al'so included clerks* estimates of materials on the floors. PNYC 00012296 m 6. leap plajit L*"V^TCPJE3 - Continued On September 27# 1951 while the plant was down the Auditor accompanied James Lougy# Clerk# on an inventory taking trip around tho Lead Plant. Observations were made of materials on the floor# in bins and in cars at the old Copper Plant. These are mostly lead inventories. They were later traced to the work sheets for September 30# 1951* Also observed on September 27# 1951 wore the old Reverberatory Furnace Building and Baghouse, the Yard# Sintering Plant# Blest Furnaces and the Drossing Plant. At the Reverb building both Reverb fur nace bottoms had been excavated leaving one 25 foot pit and one 10 foot pit* Surplus recoveries have been realized but copper content is still being treated and deducted from the balance in the Copper Plant dust and calcine inventory. The Converter Baghouse was observed as completely empty# although it is used at every Converter run. . The Sintering and Treroast (crusher) buildings were devoid of any appreciable Inventories. Three partially loaded cars were noted at the loading platform near these buildings. At the Blast Fprnaces considerable repairs were in progress. Furnaces number 1# 2 and 5 are completely gone with only a bin replacing number 2. Furnace number 3 had been tom down for repairs and number 4 was being cleaned out to make ready for the next run. Inventories were very difficult to take but it was assumed that no change in quantities had taken place since September 1# 1951 even though a change in location had been made. . Following are comments on a few inventories. All were conpletoly explained in the 1948 Audit but these were.deeaed to be of sufficient interest to warrant duplication* Sinter Actual car weights and monthly assays were first used as VB3 the *752 fixed moisture* In taking this inventory to the plant sheets# however, and to the statements# other assays were used as explained under General Comments* .. Flue Dust . Kost- of this dust is in fixed quantities as follows: Dry Flue I-Ioistu.ce Chamber Tain r l\ie Treahnr Intake Stack Base 25 Tons 100 Tons >0 Tons 35 Tons 40 Tons The assays on these fixed inventories are also fixed and are reasonably near the monthly assays used on the car inventory of Dust. Actual weights end monthly moistures were used on the car inven tories, See further cotracnt at the end of this audit report* Lead Dross The S!ra31 stockpile of this material was observod on September 27# 1951# unchanged since September 1# 1951* An estimate of baskets (pots) of dross on hand in the dross plant was also made on September 27# 1951# agreeing with the Septenber 1, 1951 inventory. This material also.carries a fixed .75/5 moisture and monthly assays on the work sheets* As with Sinter, these monthly, assays were not used on the plant statements* Blast Taphouse Fume ' Tills inventory was in bins, stockpile# pits and flue intake* The bin inventory is measured and computed as explained in the 1948 audit. The cars from stockpile arc weighed and average moistures and assays used for these removals as well as for the remaining inventory* The pits at the baghouse are estimated each month. The flue intake is kept at 50,000 pounds as a fixed inventory. The pit and intake inventories are added to the bin and car inventories# however, and carry the' same current monthly assays. Lead Bullion The in transit and plant inventories of lead bullion are essentially the same as reported in the 1948 audit. The plant closed on August 27th so no assays of early September shipments were available to use on the on-hand inventories# as is the usual practice. Estimates of Bismuth# Silver and Gold assays were used, slightly lower than the in transit assays# which were available.' The lead assays of both inventories were taken from the estimated settlement sheets# as follows: Using the last available settlement figures from the A. S, and R, Company# the total of the Lead# Bismuth and Dore (Silver and Gold %) assays is taken without change and the actual Bismuth and Dore assays are dedueted to get the Lead Assays. This assumes that the total of the four assays is unchanged on both inventories* PNYC 00012297 LEAD FLAJ.'T 9, valuation of ivy?.]'?oxns Stockpiles and Stock Bins The method of valuing these inventories has cliangod since the 194$ audit. The silver and gold are no longer reduced to 34.75 cents and C.-34.00 per ounce* respectively, when added to the stockpile# All lots ar* now added at actual costs and charges but the gold cost ia divided by #34*91 to arrive at a new paid-for ounces figure. Thus, all gold paid-for ounces go into stockpiles and stock bins at $34.91 per ounce. As before, cars out of stockpile and stock bins are given average contents and values. At month end,inventories of all lots are recapped and silver and gold total paid-for ounces are revalued at 34*75 cents and $34.00 per ounce, allowing the difference to fall into treatment.' Therefore, the individual stockpile records carry actual costs and charges with gold at $34.91 per ounce but the total inventory as used on statements is revalued for both silver and gold. This is useful \en lots are transferred between plants because original coats are then needed. Actual freight and refining charges, zinc and zinc costs and treatment charges are used as totaled on the Stockpile Recap Sheet. The lead and copper valuctions now are made on a "normal base" method along with the lead and copper in tho by-products inventory. On Kay 31, 1949 this method was started using the Kay 31, 1946 inventory as a base when the government controlled price was lifted. The Kay 31, 1949 inventory was called normal. Use included in the base were old Copper Plant inventories on hand at that plant in 1946 but transferred to the lead Plant on January 1, 1949. PNYC 00012298 'V>- _ - m *nX7' ^ek^Ucs_^<!_Stoi^2ias - Continued Pollcvin*; an specific ii-vjrto*3*3 oj c-reputed sir.co :.y Tx, Dato A-iS-A-P____________________________ Paid for Pounds Cent3 Per Pound Amount 5/31/46 Stock PiU Byproducts 5,413,636 447,053 2.125,7'P 6.500 1.500 6,50? 4 352.2U.57 20.U7.61 13'M''..34 5/31/49 Stock Pila By-Products I'ass 1,176,109 Bass 2,107.763 Gaso - 447,058 Dasc (2 ,7 ) 90,807 6 570 6-500 4 500 ) 4-500 ) i 7&.U7.C? 137,004,60 24,203 ,93 Total 3,821,737 i 237,655.62 _______________ Q.-Q p --ft. -1 Paid for Pounds Cents 248,883 ' ' . ".TO 11.139 6.3:0 U.'.rii. ' laso Base 5ase c: ;:-?3 21,079 (3) 554,674 (2) 49,520 (2) 3,890 (2) 742,320 (3) A2-0I4- 2,oa,052 J.l U 500 11, '75 io-m 10 078 10.377 17 *"o3 Ajacuut 27,475.41 1, '71.71 . ;;..... V l.il^-iO 1,791.72 65,312.87 4,987,37 392.03 77,638.11 0 253,950.43 12/31/1,? Stock Pilo and By-Products Increase 3,321,737 (5) 470.035 4,291,772 12.000 i 237,655.62 56.404 20 $ 294,059.82 (>' 1.531,376 (43 83.921 1,668,797 1;.116 171,487.00 l'i.749-15 185,236.15 12/31/50 Stock Pilo and By-Products Increase Total 3,821,737 (5) 2rt2i*il7 3,539.220 17.000 S 237,655.62 48,027.8<? * 189,627.73 Base (2) 697,109 585,646 (6) 110.676 1,393.431 10.376 l 72,330.15 68,269.49 19.929.55 } 160,529.19 8/31/51 Stock Pilo Increase By-Products Increase 1,176,109 (5) 1.828.061 3,004,170 (7) 537,865 2,107,763 (5) 215.115 . (8) 2,430,513 August 31, 1951 - Total 5,434,683 6. J00 17.000 4.500 6.500 . 17.000 5,128 * 76,447.09 310.770.37 * 387,217.46 24,203.93 137,004.60 36.569.55 * 124,638.98 9,418 5U.856.44 (1) 9,893 (5) 140.500 150,393 21,079 554,674 478,374 172.506 (8) 381,619 1,032,012 11.775 23.138 8.500 U.775 9.727 23.138 8.362 * 1,164.90 32.508.89 33,673.79 * 1,791.72 65,312.87 46,531.19 3U.9U.70 t 73,720.88 10.406 * 107,394.67 PNYC 00012299 o '* l.gAJ) FI.MJT 11, ^.lUATIUrS C-F - Continued Stock F.IIp? p.nfj Shr>ck ^itv? - Continued Dace Period Inventory - Kp.v 31. 1946 TJ*L?s inventory contain-.-.; v.--'.e of lead and copper at two distinct sets of pricos,both govern ment con^^.U--'d and bo'.h U3.--.1 no-'r tin prior method of valuation. The early prices were 4.5/ and 8.5/ t.h* 1-Ant cm*-m3.1"l : ;,5-r,na 6,5/ and 11.775/, both for lead and copper respectively, Hr Alrjurn; juv- ^tor?; - I'yr 31. V^W) Tli-t nt.ock pile and by-product inventories were valued separately on a last-4n, first-out basis using January 1, 1749 qusntitlc-. (1) Tins stock of cof 'rr ?-.ns incorrectly valued. It should hare been carried at 11.039/ per pound, ' (?.) CM copper n]*rJ. inventories .lere transferred to the Lead Plant on January 1, 1949 and tlvone p/:!o'uts */oro still on Kr>d at ray 31, 1949. Values are at transferred costs, (3) F-con? ccronr (45?,176 pounds) ovox' January 1, 1949 amount (554,674)pounds was valued at average eo.rr?nt cnlo* price, Thin excess was loot at year end, however. Year, End ..Inventories ~ 1949 airl X'5"ii> The ntock rile r.nd y-r,> -.duet inventories w-3ro here valued ao one unit but separate bases wore i*ed irr*.-.nrd.l9S0 of ph/jj.ioci 5 nv?r:;ori*3 yf each. (2) In 1950 th? old corp:r plant inventor/ was being reduced at the current rate of use al though much of it had hnn rvcuvpr-'d in the previous year and not written down. Some of the write off war b-iirv; r.'artc at 10.5/ P'V r-o*\rv.l which vrac higher than the original inventory as shown at Kay 31, 1949, * (4) Even though thu Uc.v 31, 1949 gain of 459,176 pounds was lost at Dacember'31, 1949, anothor tain was ohown (86,9-21 pounds) ^/}\ich was th3 difference between tbo stock pile gain and the by-product loss. Tir* value per pound v*a th- avtrago stock pile cost for 1949, 1 (5) Incmasesand docroR^pn arc at current markot prices. (6) This copper incroar? wan valued at Kay and June I95O average sales prices as remained on thnlast'in, first-out basis. ` Cxirrcnt.Iny.vitory - August 31. 1951 A return has now be--n mod? to valuing the two inventories separately with each having its own normal ban** fro;* the Kay 31, 149 inventory, -. (1) This is to be written do-n to 11.039/ P*r pound on October 31, 1951* (2) This balance of old copper plant inventory ie well above the actual amount, still on hand. The removal at 10.5/ has reduced tho value to 9.727/ per pound, Thisis to be written down to the actual pounds of old copper plant copper still on hand by December 31, 1951, - The August 31, 1951 hook inventory was 197,943 pounds at 10.5/ per pound transferred cost, ' ' (7) TI10 load content of old copier plant inventories has been fully recovered and, Kr. Floyd plans to c.lj.Mtnto this pert of t?v ban? inventory (90,807) pounds at 4.5/) ty December 31, 1951* . (8) Tlis practice of.decreasing (borrowing) from base inventory at current prices shows a possi bility of p very low vain* even though it would be called a "blow-normal" inventory. It was suggested to Mr. Floyd tit he value the decreases at tbo last added base costs per. pound/, at least at Deceobor 31st, of each year. Then the .-ystou could be classified as a last'-in, first-out.method.' he stated that this would give him a bad looking profit and loss statement if and when inventories dropped but he 'agreed that this is a necessary evil of this valuation system. and the Auditor agree that-there is need for written instructions on the dneirerl of valuation to be followed. The December 31, 1951 inventory ehould si>o / a lar.*.' ir.sroaoc over th'.:'e tsa inventories becauso of the recent two month ebut down. PNYo 00012300 12, LEAD PI. ANT VALUATION OF - Continued In Process Inverttori,d s Defining Costa As in the past, a worked back inventory Is used to apply a refining cost to material* in process, Noconverterbag house fume has been roasted since 1950 and Cadmium Fume Calcins is regarded as a by product. no there was no calcine in the August 31, 1951 inventory. Lead Bullion is valued in New fork so the only "main line" product, to bs worked back was Sinter* The Sinter weight and ccntruts are forked back to the equivalent material neceaeary to produce then, using current Sinter plant recoveries* This necessary material is then broken down between cus tom ore and by-products using current lead ratios in materials treated at the Sinter plant as well as current assays on ore treated. The ty-products carry the balance. Tbs fixed Sinter cost per ton it applied tr. each of the two equivalent inventories.1 ' The custom ore thus arrived at is added to custom ore in bins and each ie given the fixed sampling cost. Ore in stock piles and stock tins does not carry sampling costs. Current and fixed costs are coi.ipe.red as follows: Date of Fixed Cost Cost Per Ton Fixed August 1951 Sintering Calcining Sampling December 31, 1941 March - 1947 December 31, 1941 $ 2,5063 4.1316 .4517 # 9.283 (1) 1.0779 (1) No lead calcining has boon carried on since 1950*' Cadaixm Fuae calcining cost does not apply to work in process costs as its calcine ie a by-product. Purchase Coots Treated custom ore is computed on the inventory work sheet using receipts and original inventories with their raid for metals, costs and charges. The above equivalent inventory dry weight and content*, from the wrked back sheet ore unod on this work sheet along with metals paid for computed from 'the average paid for percentages of this total custom ore treated. The average values for lead and copper are the average prices for each in the total current receipts. Silver and gold are valued at 34*75# and 134,00 per ounce, respectively. Freight and refining coets against lead and copper are computed using average current costs' of treated custom ors. Treatment cost is also at tbs se cost per ton as current treated custom ores, No zinc content or cost is retained in this work in process ^inventory. Furthenacro, no laet-xn, firat-out pri?icipl9 is used for metals or costs, ' By-Products - ( - As before two schedules are used to value the by-product inventory. One ie used for Dross Reverb Matte and Speise, a copper product and the other for the balance of the by-producta* Both axe sales schedules and provide a near r.tirVet value for these materials. Lead and copper on both schedules are valued on the "normal base" method explained above undor Stock Pile* and Stock Bins* Silver and Cold paid for are valued at 34.75# and 134.00 per ounce, respectively. Zinc ie not included nor valued. The Matte and Speies schedule ie drawn up for valuation purposes only as it has no transfsr schedule. Lead is C7 percent paid for and copper is 97 percent paid for after deducting four pounds per too of material. Silver and gold are raid for at 99 percent and 94 peroent respectively. The arsenic penalty is still 75< per unit of twenty pounds but the treatment charge has lncreaeed to |21*2$6 per dry ton* Lead and copper price deductions have increased slightly. . ' The balance of the by-products plus the equivalent by-product amount from the Vork-In- Proeess worked back sheet are valued on the by-product transfer schedule as In the past* Lead is 95 percent paid for after a one percent deduction, copper is 92-1/2 percent paid for with a minimus eight pounds per dry ton deduction, silver ie 97 percent and gold is 94 percent paid for* Treatment charge is #7.86 per dry ton and th*ro are mane roue other credits and chargee. '' PNYC 00012301 VALUATION CF IhVgTUtlEo - Continued Finished Material Lead Bullion is valued in lJev York but any lead bullion on hand in veil# and kattlaa; is credited xith cost to finish - drossing erporee. This credit is held on the Salt Lake statements until the following month, A fixed cost of $1.7589 per ton is used which was the cost-at December 31# 1941* As stated In the previous audit, it io assumed that the New York Office uses this credit when valuing this lead inventory. if-scsn-TS :I,AO Trjs/.TI^ PLANT Combine*? Metals Reduction Conr-irt/ < Sixty-i'ivrs percent of ths purchased ore receipts at the Slag Treating Plant in August came from the Combined Metals Reduction Company stockpile at Jean, Nevada. The special contract for this material states the following terms; . Zinc and Load - CO percent at 44 percent of average East St. Louis pries for the week ending Wednesday, next preceding date of sampling of last car of each lot. Treatment - $7.48 per dry ton P.O.B, International, Utah* irtv -r, t"r>c? Splitting Limits Weights - Satie as Load Plant Contract - Tooele 'Weights . Leaded Zir.c Oxide All zinc oxide is weighed and assayed os shipped. If consigned, it remains at such assays and vihen partially sold, it in sold at such assays. August 1951 shipments and sales were as follows; American Chsmet Corporation. East Helena. Montana . .' One car shipped and sold in August. Lead per pound - 6.4i Ziad^per pound - l4*325f. No consigned inventory on hand* ' ' * Consi'^uuent Shipments Ono car shipped in Avgust I95I but no sales were made fro* it. Two sales of 2,950 pounds and 53,000 pounds wero made t 12.6751 per pound of oxide* One consignee had no.-tales in August, Dcleaded Zinc Fin* returned to Arwrlcan Zinc Cog-pa.nr : Eighty percent of ths zinc content of American Zinc Company residue treated is returnable to them in ri.eleaded zinc fume* In August 1951 approjdoataly 270 tone of fume containing 379*492 pounds of zinc were returned, using averaged assays and their weights as received at Kaebovec, Texas* Tooele weights e.r.i! assay* are used on the books as shipped, Dolcaded Zir.c Fura; to International Minerals and Metals All lets shipped to BcrbUlesville, Oklahoma in August 1951'were still in transit at August 31* 1951. The August settlement for previous shipments and the August shipments were completely audited for Tooele and Bartlesville weights, all assays, receiving dates and contract,-prices. INVENTORIES Stock Pile There was no change in the stock pile during August 1951* Any accruals would be added at actual weights and assays* Removals would be taken out at actual welghtsand average.pile assays* Bins Those bins were among those measured by the Pogson, Feloubet Auditors on Septester 1, 1951* Meaouronvsnte, cubic foot volume end specific weights are used for these materials and the total weight is checkod by in and out actual weights* Lot weights and assays ars used oh a first-in, first-out basis to accumulate the desired total weight* All measurements, computations and assays wsre audited in detail* pnycooo^02 ;5! AC* : r. FI.C-.T H. Dol-.ado:- 23.-.c r vr- r;! Py-Pnvlwtg X;-.7 j-.^rr inventory consisted of in trarsit to I, M, and M. Company, on band company owned *w\ f.r h?'-.! returnable to A>t*'rlran Z.;.r.a Company. Moat of tho on hands are still reported by tho o''-trs.tir-.; .-iv.i.rtwsent ar.d arc all handled as outlined in the previous audit, except the assay of \ IJj iart < fume chipped i's vcd for content of the fume on hand. The car and miscellaneous inventor' r.c observed by'tfce Audit*? on October 1, 1951 with Hr. W. H. Floyd and later checked t*> the rWnls. This did rot include those reported by the operating department which were eati- rrr-tod. *V auditor vac present on Mcvenber 1, 1951 when the Lead Plant Superintendent, the Slag Treating Plant Foreman aryl Ilia assistant met and reviewed cleanings, deposits and operationssince resuming or. October 22, l?5l. The 2aghouae pits were viewed and estimated while all other by products: jir;enterics Mere entirely ectiraated, The in process inventoxy at East Helena is com- ' puted tut both s/stt8 ?en to be reasonably accurate. The estimated inventories at Tooele include f\T!* r> tv.i C\v<ber, FJ.ua and Be,; .-*, moat of which is not available for measuring or viewing. Consigned Zinc Oxide Ccnairnod stocks of zinc oxid? wore out of town and wers not physically verified by the Auditor hut letters audited to confirm soJ.es and balances on hand. All consigned stocks re tain the car *.on?y ?,n originally shipped, - One conai.^od bal.vico of 20,775 pounds oT oxide was on hand at August 31* 1951 out cf a car shipped in Oun'; i9?J.- Tire consign*!* io the C. L, Duncan Company, 1101 - l?th Street, San Francisco, California, Ho had born reported since August 31* l?5l up to the date of this writing. VALUATION OF ' The methods of valuing Slaf, Trr-atnent Plant inventories have not changed since the 1948 audit. Or* in stock pilno end bins in vrlui'd at. actual lot costs. The lots are designated on the first-in, first-out. basis. Din ore "Joa carries sampling cont at the current cost per too. Deleaded zinc fume. in transit to Tutsi national Minerals and Metals Company and on hand at the plant are valued together1 on the I. 1., and H. Company contract terns but >/ith an estimated treatment cost as used on the prelimi nary sefci'.loirwl. Oold ar-1 silver are not paid for in this contract nor valued.on any of these inven tories. Leaded zinc oxide at the plant is valued on the salts terms of fumes sent to the Lead Plant, Consigned "lock was also vnlv*jd at those same sales terns except that lead was carried at 16.04$ per pound. Mr. Floyd stated that he would change this to follow the fume sales price which is the current market vatu'*. Cold and silver are paid for snd valutd at $32,816 (10#) and 34.75$ per ounce, re spectively. By-pmducts which include duate, cleanings, fumes etc., are valued at current funning costs only. This includes samplie?: cost, A minor portion of these materials, some furnace cleanings, etc., are returned to the lead Plant for retreatment but most continue on through the. Slag Treating Plant. J.'o d-levUng cost is applied because tho only by-product in this section of the plant is oitber re circulated or perhaps sold as o finished product with Leaded Zinc Oxide, Nr,' Fleyd was questioned about th omission of purchase coot on all ty-products and he stated that there wae no purchase cost during t-hc early operation "f this plant and he io using a last-in, first-eut theory en this material, only. This inventor/ is almost entirely ostimated and fluctuates very little, . BtftUtS All!} DISCREPANCIES SULPHIDE CUiCEUTilATOit Zinc Corccn^ratcn shir^od to Anacu-nda . . In checkirtf tho August settlement for Zinc Concentrates shipped to Anaconda, Montana, the addition to zinc pries fer zinc frei^t to East St. Louis was noted as.being .7635$ per-pound, or $15.27 per ten. Thi-e was r.vt auditable from t.hc infonoaWon on hand at Tooele because the previous rate in March 1951 he'1 been $15.^3 per ton and the last increase on April 4, 1951* was two percent, supposedly giving a new rate f $15.74 per ton, Th** rate used in August 1951* however, was $15,27, Upon iwjuiry to Anaconda, Mr. R, N. Kelly replied that the Hashes'Sampler had net been advised of a rat* ..leerr-es* in February 1751 to $14.98 widen would explain the two percent increase to $15*27 in April 1951. Mr. Kelly also stated that Salt Lake was informed e{ the error but "decided that the amount involved did not warrant revising the settlements." " PNYC 00012303 15 SWGHo AND DISCREPANCIES - Continued "i " - 1 " 1 " --- --1-- LS1D PLANT . Acpcrtiormcnt of Total Treatfliftrit Cost . In prorating total costs to the six Anaconda Copper Kining Compary materials treated and the one cunton ore classification, the charge for treating cold slag.at the Blast Furnaces is .deducted from the total treatment co9t as are the current Cadmium Fueling arenas and the current reclaiming expanse. This assumeethe Anaconda materials do not contribute to these expense* and rice versa* Then the average cost per ton treated derived from this net cost is applied to the Anaconda materials treated and the balance of treatment cost is applied to the custom ore* . . ' In Aurust 1951 the deferred C&taium and reclaiming costs were deducted.frea the total treatment coat imtrS'i of the current treatment portion of those operations* This gave** per ton treatment cost for Anaconda materials which was approximately 65# per ton lower than it should have been. It also left larger treatment cost against custom ore than was correet. This will be correoted in November 1951 accounts. StAG TREATING PLANT Dolearied Fotc to International Hirer*!* aM Ketals Thn freight bill, Bcrtlesville vight, on car U, P, 66460 of deleaded sine fume shows a net weight of 112,900 pounds but using the gross and tareweights, the net ehould have been 111*900 'pounds, Bartlesville weights ere used on the settlement and for the freight charges but not on the Metallurgical Statements, as in transit inventories* Inventory Vain? of Consi/ined Zinc Oxide In valuing the consigned stock of zinc oxide, it was noted that the transfer value of lead fume was used except for the lead price* CUirent load price is used in the schedule of lesd fuse transferred to the lead plant but an older price of $16*04 was used in this esse* Hr. Floyd stated t.hot current price wauld be us'd henceforth* The August 31, 1951 inventory was understated by $580*86. ' GENERAL With the above exceptions, only a few minor error* and discrepancies were discovered, GENERAL COMMENTS LEAD PUNT COTTRELL FIBS On Monday morning August 27, 1951, just before the 1951 strike eterted, a bad fire broke out in the Lead Sintering Flant Cottrell. It necessitated the rebuilding of the Cottrell and a portion of the Fluo* which too started early in September. On October 22, 1951 enough of the Job was completed to allow the Lord Plant to resume operations in part* Tbe fire had shutdown all of the Lead Plant except the Sample Hill and the Fume Roasters* The Slag Treating Plant also was closed because of the loss of its msjor receipt, hot slag. Boms deleading of fume on band was continued in the Slag Plant kiln. The Suplhido Concentrator was not affected and continued its normal operating runs* COPPER PLANT WRITE-OFF The copper plant was completely written off on January 1, 1949 a* per instruction* of Hr* E. 0* Sower-vine in his letter of January 17, 1949, to Kr* Floyd, Chief Clerk. The only remaining copper plant Inventories on December 31, 1946 were by-product*; Reverberatory Furnace Bottoms and Flue Dust end KcDougall Beast r Bottoms and Flue Dust* No entry was available on tbe transfer as the inventories are carried cm the New fork books* The sntire copper plant Inventory of by-product* was included in the Lead Plant by-produett inventory on January 1, 1949* Tbs contents and values of the transferred inventory were: &1u2 Lead Copper Silver Gold 227,016 lb* 1,039,123 lbs 45,454.10 os. 424.241 os, Total Reclaiming Cost $ 2,683.35 69,326.69 15,005.52 ...Ui2S&32 $100,716,55 $ 1,372*19 PNYC 00012304 16 ORiSKAL ftH^isng Coir.sv j J-A1^ VTClTE-yFF - Continued Iio Metallurgical statements have been prepared for the Copper Plant since 1948* DATE OF hbCELPTS As before. date of rrceipt depends entirely on availability of final settlement data when the cetinvted profit nd lor* figures -w submitted to Hew York. This is usually the 12th of the follow ing month, Tii* Selt I.?.Le end Toed* Officos agree on lots to be included and excluded at months end. A*\r lots which had been physically received and dumped but were not to be included in the rant he roeeipta are grooved from the inventory where they were d\rap*** This ia s confusing and easily erratic inethod ct` arriving at rcnoiptn ivl inventories but Mr. Floyd states that it is necessary because of the need for accuracy in the estimated profit and loss statement. He also has received instructions to in clude only final silver affidavit figures in hie monthly profit and loss stateoents. The estimated profit and loan etatement is also the final monthly statement, jqjuanjifn vp Anjivs at nuu\al lyWiotias It is still the practice to adjust, at will, various inventories aixi lntorplant shipments to arrive at wore noiyial racov* ries. In August 1951 numerous changes in weights and assays were in evidence but wer>> not }w*vm a? adjustments. The majority of changes made were in Lead Plant secondary inventories but stool: pilr removals t.rd interplant movements were also watched and adjusted whon needed. Stock pile removals ere given oitlrrr actual or average stockpile assays* depending on desired ' results, iljo Sinter sent tc the 'Jlnst Funces from the Sinter Plant is adjusted monthly to affect more reasonable recovering c.t both plants tul dc-vr not affect the overall Lead Plant recoveries. Also, the sine cailent of hot via* sent tr. the Sh*; Treating Plant fivm the Lead Plant is often adjuatod to >yt a more resnombln recovery at tho Slag Treating Plant, Cn August 31, 1951 two Sinter Plant inven- torioc warn not. used at rll So help puLl dor.: an abnormally high recovery. Because of the shortage of materials aud the Impending stviks- August wno a cleanup month. Below is an example of three of tho larger Au.tv.et 31st inventor?' adjustments, tho two omissions and the Sinter transfer adjustment: In-rantori os: IJtAD Pounds COPPER Tountii ________ SILVER__________ Or. Per. Ton asm ' GOLD Os. oer Ton Ounces Sinter - A* Taken 27.00 428,501 2.00 31,741 An Uned 21.00 333,275 1.00 15,1370 Winter Clpnnixvj* \[i) - A* Talien 31.3A 981,505 2.01 62,900 - Ap Uf-ed 27.35 ?59>.V*9 .073 24,056 Dross Koverb Spoirs - As Tfkcn f3,50 .. As Used 0.60 65,125 57.30 430,980 '>7.80 Total f\i rkeu Total as Used 1,474.131 1.156,552 525,621 396,343 19.25 13.25 20.705 16.635 72.96 42.96 15,275.26 10,514.14 32,408.34 22,917.10 27,200.95 16.016.35 74,834.55 49,447.59 .15 .15 .124 .1024 1,04 .64 119.028 119*028 193.534 141.005 387.733 3IU49 700.295 573.202 Decrease Crdosic^;: Yard Clo?nin-s Pelt Cl'iA'unga Total Invoritorv Pecrra** 317,579 129,278 10.6 22,6'J- 3-6 12.9 .___ 2-6 4,376 9,719 383.503 143,393 17.08 9.71 25,436.96 1,038.04 l.Slg.5? 28,293.59 .12 .09 127.093 ' 7.293 16,856 ljl.242 Transfer Sinter - Av Taken 29*20 4,477,236 2.00 306,660 - As Ue(l 29.0A ,'uiili'ZZS 1.95 276.976 22.46 23.168 172,189.59 123426!* Decreased 23.,/,66 --"1 7,666 rrsrsssrss 20,760.88 ===as= (1) The dry weight of this material was reduced 375*220 pounds* .24 .278 1,839.960 2.131.207 2V1.327 PNYC 00012305 CKuiKA;. ci'K::^T? ATj.nQ'ff.UNtS TO A:UJ.V AT I '.Vv-:Ah hUXT^OTPS - Continue L/^vpi^v ct' p*..rt i*iiv5o*'it'**.l'.0.e \`<) losses, as published, are* 17, COFPHl SILVfJi QdiD T-.'.r - ]?y? YcC.T - 3.XV 3j4rj .3 vt .juoi .J.03< Au.-V.?t .. 1751 - -ruu?> 1 ?;il 6*y.u^ 3.Wt 5.Tilt mu (3.) These iii'-i all losses rtXCOpt slag loss,, which is nearly constant. 4.179* 4.645* 5.565* 4.116* Whil:i it :l.e tru>5 that th i Tooele Flint >*as large fluctuations In contents of ores and concentrate! .od, ` !'.'re* nliould Im a no** ini fiuff t- *ve easily traceable method of leveling these recovery and lo** ptMc-ont'-o.n, Tin mcj*! no*.i \.-y:2<* bo ii*>r exact and complete inventories and better asoaya* Thu- sk* {> bo .'.irplo ir^ayrt,. Ccu;pt.*oi* e? *.r-v ?;e.)vj to use because of the content fluctuations. After all this is dor* , aO jvsh'rnte would V pv*-j.-*-v if needed. An abnormally high adjustment would then seen to cOl for n i)*v3tiration *.f *Ji-c flowed, Jn the Montana plant, adjustments are allowed every month end except -U'oa 3-1 th ".nl Decerber 31st. 7.ri 3 ciscuosicn with Mv, Carles nanU^l., Swelter Superintendent, and W, H. Floyd, Chief Cleric, the Auditor co.,:i.;*s,vvt that adjustments bo to a few specific inventories when needed and that all ad- iwt/rtevit* on t?:e work sbo4 e as such s*>< shown to the management each month. This was readily agreed to by loth wen. In fAi.sor.ssin;: irve-.-tny talcing. Mr, Uerdwell agreed with Mr* Floyd that the fluctu ations of ?k* contents of treated custom ores frul concentrates are a major consideration at Tooele arid that recovery flur-tunti^nr. * bound to occur but- in the long, run losses are reasonably constant. He also stated that tha point of lo.ns occurrences pre watched and controlled, making sure that these losees are not chang ing notie^bly, Ujy'r. Inquiry by the Audit/*)', Kr, Bardwell stated that he would be glad te have the operat ing iepcrt,r.*,>nt give specie! Assistanoo Ac the cleric at December 31st of each year when they take inventories snJ b* rtffcrsd to submit v-ora complete flue and bag house inventories each month at the Lead Plant, where all partis ayrved, the inventories vers .Vr, . In ti;:vr i.i, x* >clievp.j f <r changes will wake both departments more cognizant of the causes and effects of fln^tupttors r.nd ,\-*;r`-p*.ps vdll lad to their being partially solved, r&3 ligTAU W'i: Fl'RKACB H/JJU3 rieno7s0. of the old Copper PJ.vrt Reverberatory Fuvnac bottoms from 1947 to October 1950 recovered sous larjpa excesses in metals o*r*r t.'io original inventory. All excesses are treated but carry no metals values. The firti Recounting rrx-"-i<i the following excess metals recovery, as at October 31* 1950: Lead Pounds Copper Pounds Silver Ounce, Gold Ounces Fnmeca "0. 3* 560,175 130,TM 26,214.34 3,975.129 Firnce Mo. 4 81,834 17,653 566.82 222.599 This is fbjrtj*cr '.'U|-ir>r'v to '-ho theory recently proven at other plants that the build-up of furnace b-'tM-ns over the period of operations tends tc be considerably conservative* Thi* rocovevie? of p?st ?orcs show up lr higher current recoveries as in ths case of any metals withfror. cold oleg *t. tk Blast Furc.nce FIant* COifCHttiay Ths I.os.xl and Slag Treating Plants uero shut down from August 27th to October 21, 1951* inclusive, as a result of a sfcriho And s fire, 1 oth of which began on August 27, 1951* A new Lead Plant Sinter Cottrell wj.s built rh r;no. l;ho "'rutdoyp. All repining Copper Plant :! .TV'ntcriee were transferred to the Lead Plant on Januaiy 1, 1949* No Copper Plsr.t 'tataient.s have beeTt drew up sir.ue that date. PNYC 00012306 m COttCLUSJPK 18, During the audit, the following ra*Jor points were brought up and at* discussed in none detail in the preceding report: (1) The necessity of ecu piling, a final profit and lose statement the 12th of the following month rceJces it necessary to eliminat* some receipts from the physical inventory* (2) The Auditor observed the taking of inventory at four different dates. The operatic department h% offered to submit mere dntn on won tidy Lead Flant Flue Systems inventories, They also will assist in all December 31*t inventories, ' (3) Nwroiw adjustments war* made in August intorplant shipments and August 31st inventories* The plant management has agreed to limit those adjustments to a few specific materials and to show them on the work sheets, (A) The Hew fork Office is herein asked to clarify the desired inventory valuation procedure. The netbods used are changed at will to facilitate recoveries and to hold low costs and all partita concerned h'-eire written instructions, Only a few errors and diecrepencis* wre uncovered during the audit. The work sheets and statements audited appeared.to bo in good order and to follow the Anaconda Company Metallurgical standards with the *hov noted exceptions. The Metallurgical staff was cooperative and their work was neat and accurate. PNYC 00012307