Document qkNwOGB40yapGywLMgoyEGjkj

mz id REPORT of th* Anaconda Copper Mining Company For amber 31st, 1919 N11521 PNrC00C09791 Anaconda Copper Mining Company CAPITAL STOCK Authorized, 3,000,000 shares, $50 each . . . $150,000,000 Issued, 2,331,250 shares, $50 each $116,562,500 OFFICERS Chairman of the Board . , JOHN D. RYAN President.............................C. F. KELLEY Vice-President . . . . B. B. THAYER Secretary and Treasurer . . A. H. MELIN General Auditor . . . . J. T. ROBERTS Assistant Secretory R. D. COLE Assistant Treasurer , . . D. B. HENNESSY DIRECTORS William Rockefeller John D. Ryan B. B. Thayer C F. Kelley H. H. Rogers J. Horace Harding Nicholas F. Brady Andrew J. Miller George H. Chords OFFICES An a c o n d a, Mo n t a n a 42 Bk o ad w ay , New Yoaz PNYC00009792 To the Shareholders of the Anaconda Copper Mining Company: The following report, covering in a general way the operations and activities o your Company, for the year 1919, is submitted. The beginning of the year found the non-ferrous metal industries in a state of profound! depression. The production of copper, lead and zinc, which, during the war period had reached unprecedented outputs, was necessarily sharply curtailed to enable the consumption of stocks and the re-establishment of these industries upon a stable basis. During the year, the consumption of copper in domestic business rapidly in creased and, since the first quarter, has been conducted upon a scale far in excess of any previous, peace-time period. The resumption of export trade, however, due to obvious reasons, has been dis appointingly slow, and while, it is believed that urgent demand exists for all the copper which could be produced, the problems incidental to financial and political re-establish ment of the European, countries have been the limiting factors in the volume of busi ness transacted. The situation which has existed is reflected by a comparison of the production of copper from the mines of your Company, excluding the product of custom ores and the output, of subsidiary Companies, for the years 1916, 1917 and 1918, respectively with that of the year 1919 : 1916 ............................................. 283,305,657 pounds 1917 .................................................... .211,356,917 pounds 1918 ......... 235,385,478 pounds Average ..........................................................243,349,350 pounds 1919 ....................................... 103759351pound? The combination of curtailed output and increased cost of production in every department has had the effect of greatly reducing the revenues of the Company. The year shows a net income, after payment of all direct expenses, of $9,306,023.76, or, after interest and depreciation charges, a net income of $5,103,641.11. Dividends were declared during the year amounting to the sum of $9,325,000.00, thereby reducing the surplus from $66,232,484.34 to $62,011,125.45. Advantage was taken of the curtailed operation to carry out extensive improve ments at the mines in Butte, and construction under way at various plants was con- 2 PNYC00009793 tinued and largely completed. The South American undertakings were advanced un interruptedly, and all plants and equipment of the Company art in first-class condition. A summary of operations and activities follows: Mining Department Min* Tonnage The mines of the Company produced during the year 2,103,098.71 tons of ore and 10,420.67 tons of precipitates, or a total of 2,113,519.38 tons. Development and Exploration Due to many of the mines being idle on account of curtailed operations, the amount of development and exploration work done during the year 1919 was consider ably Teduced as compared with previous years. During the year there was done in the mints of the Company in the form of drifts, crosscuts, upraises, shafts and winzes, 20.39 miles of development, as compared with! 41.85 miles in the year 1918, The shafts of the Company were sunk additional depths aggregating 1749 feet. The shaft on the Orphan Girl claim Was sunk to a depth of 1036 feet. A station was cut at this point and a crosscut was started in a northerly direction to cut the veins apexing on the Orphan Boy and the Anglo-Saxon claims. The results obtained from the development and exploration work in the mines of the Company throughout the year Were quite satisfactory. Notwithstanding the fact that development and exploration were somewhat cur tailed, a large amount of repair work was performed. At the Anaconda Mine two compartments of the main shaft were retimbered for a distance of 1938 feet; two compartments of the west air shaft were retimbered for a distance of 225 feet At the Never Sweat Mine, the Ramsdell-Parrot shaft was enlarged and retimbered from surface to the 900 foot level :while the shaft itself was sunk from the 900 to the 1200 foot level. The Parrot shaft was retimbered for a distance of 225 feet The St Lawrence Mine main shaft was retimbered for a distance of 1043 feet together with the stations at the 200, 400, 500, 600, 800 and 1,000 foot levels. Two compartments of No. 7 shaft were retimbered for a distance of 800 feet At the Diamond Mine both hoisting compartments of the main shaft were re timbered for a distance of 600 feet The Cora shaft was retimbered for a distance of 453 feet 3 PNYC00009794 At the Original Mine the pump compartment in the main shaft was raised for a distance of 659 feet above the 1CC0 foot level and the entire shaft was retimbered for the same distance. At the Moonlight Mine the stations on the 400, $00, 600, 700, 900, 1000, 1100, 1200, 1300, 1500 and 1700 foot levels were partially .retimbered. At the Leonard Mine four compartments of the main shaft were ^retimbered for a distance of 652 feet. In addition to the above, general repairs were carried on throughout the mines of the Company. Construction At the Ramsdell-Parrot shaft one hoisting engine and head frame were installed. At the Anaconda mine one building 25 x 106 feet was erected for use as a canvas shop. At the Original Mine one steel frame iron clad building 89 x 98 feet was erected for use as a garage for Company cars. At the Poulin Mine one double drum electric hoist was put into operation and a new hoist house erected; the old hoist and hoist house were dismantled. At the Rocker Framing Mill one 1000 gallon electrically driven fire pump, to gether with a 1000 gallon fire tank, were installed. A reinforced concrete and brick fire proof building was erected in the City of Butte for use as s Pay Office. At the Bell-Diamond Mine one steel armored cable was installed from surface to the 2800 foot level; also one leaded steel armored cable from the 1300 to the 3400 foot level for carrying power to the tram motors; in addition to this one lead steel armored cable from tile 2400 to the 3400 foot level was installed in the shaft, and two bell cables from the 2800 to the 3400 foot level. At the High Ore Mine two steel armored cables were installed in the drill hole from the surface to the pumps on the 2800 foot level; tiro steel armored cables were also installed in the shaft from the collar to the 2800 foot level for carrying power to the pump#, and one steel armored cable from the surface to the 2800 foot level for ventilation purposes. In addition to the above all of the switchboards and connections formerly in use were taken out and new switchboards installed. All stations were rewired frit bells and lights. At (he Pennsylvania Mine one steel armored lead cable was installed in the shaft from the surface to the 1400 foot tevet for use on the ventilating fans. One steel armored cable was also installed in the shaft from the 1400 to the 2000 foot level. Ten stations of the Pennsylvania mine were rewired. 4 Pn VC00009795 Vendlatioa The plan of ventilation which was undertaken by the Company a year ago was carried on, and the results are most gratifying. Ten electrically driven fans were in stalled on surface, having a capacity of 1,100,000 cubic, feet. Six fans were installed under-ground, while eighty-seven blowers were installed in the different mines. The Parnell, Mountain Con, Silver Bow No. 2 and East Colusa air Shafts were equipped with the concrete slabs mentioned in the last report for the purpose of remov ing the; air resistance caused by, exposed shaft timbers, and thereby improving the ventilation: Fireproofing The fireproofing of the High Ore shaft was completed during the year. The Moonlight shaft was fireproofed to the 1700 foot level. Two compartments of the shaft of the Tramway Mine were fireproofed for a. distance of 530 feet and the stations on the 1200, 1400 and 2200 foot levels were fire proofed. At the Mountain View Mine the main shaft was fireproofed for a distance of 2000 feet The main shaft of the Pennsylvania mine was fireproofed for a distance of 1000 feet, together with all stations from the 1300 to the 2200 foot level. At the Leonard Mine the main shaft four compartments were fireproofed for a distance of 1741 feet. . Redaction Department Copper The Copper Reduction Works treated for all companies during the year 2,340,100 tons of ore and other cupriferous material at Anaconda. No copper ores were treated at Great Falls, except a small tonnage of copper concentrates from Anaconda used for the fluxing of Zinc Plant residue. Of the total amount, 1,794,358 tons of ore were produced by Company mines, 511,847 tons of ore were either purchased from or treated for other companies, and 33895 tons of precipitates and cleanings were from the old plants; at Anaconda and Butte. At Anaconda there were produced 144,112,285 pounds of fine copper, 7,377,476.85 ounces of silver, and 42,525.781 ounces of gold. Of this production, 129,781,031 pounds of fine copper, 6744,262.03 ounces of silver, and 42,525781 ounces of gold were pro duced for year Company. The Electrolytic Copper Refinery at Great Falls produced during the year 129,022,057 pounds of cathodes, 121,338737 pounds of which were melted into shapes at Great Falls. PNYC00009796 The Copper Leaching Plant at Anaconda treated during the year 184,700 tons of tailings and 61,400 tons of purchased ore, from which there were produced 2,500 tons of cement copper. The Copper Concentrator also treated by flotation 44,500 tons ot slimes from the ponds and 31,000 tons of tailings. Zase The zinc plants at Anaconda and Great Falls treated during the year 284,599,29 tons of ore and other zinciferous material, of which amount 191,418.99 tons of ore were produced by mines of the Company, and 93,180.30 tons of ore and concentrates were purchased from other companies. At Great Falls there were produced during the year 48,459,727 pounds of electro lytic zinc, 3,994,251 pounds of zinc in dross, and residue from which were produced 15,256,441 pounds of lead, 5,157,220 pounds of copper, 2,282,955.64 ounces of silver, and 7,150.108 ounces of gold. Rod and Wire MS Of the Company's production there were roiled into rods 43,241,497 pounds of copper. Of this amount, 13,914,008 pounds were manufactured Into wire, of which 6,405,782 pounds were made into strand. Construction The smoke treatment plant at Anaconda, consisting of 20 Cottrell treater units, was put into commission during year. It has been demonstrated that this plant is capable of producing the results cted from it; conditions within the smelting plant have been improved, owing to ths leased draught available from the new stack. The old stack was dismantled. The special reverberatory furnace with its treaters was completed during the year, and is smelting all of the dust from the main treaters as well as dust from a stock pile which had accumulated. The new plant is making a satisfactory recovery of copper, silver, gold and arsenic contained in the dust. Construction of an arsenic refining plant capable of producing 400 tons per month of refined arsenic was begun and partially completed during the year. This when compieted will refine the crude arsenical dust from the treaters connected with the special reverberatory. The earth dams for impounding tailings, which were begun during 1918, as a part of the program of improving conditions around the reduction works, were practi cally completed, and have been in commission for several months. All of the muddy 9 PNYCQ0009797 water from the concentrator and reduction works is now being settled and a clear over flow is being maintained. Owing to the extreme drouth which prevailed in Montana during the summer of 1919, an additional source of water had to be provided for the reduction works. This was done during the Fall by the construction of a pumping plant and a two mile flume, fay means of which it is possible to pump water from Georgetown Lake into Silver Lake. This supply will be, needed only in case of extreme conditions. The experimental 23-ton tower, acid piant was completed, and was operated with very satisfactory results. This new system of acid making has been demonstrated to be an unqualified success and will be used in connection with the production of acid for the treatment of phosphate rock at Anaconda. The erection of an experimental 50-ton phosphate plant was begun and this plant when completed will treat about 50 tons of phosphate rock per day and will produce about 35 tons of a product which will be placed upon the market under the name of "Treble Acid Phosphate" and will contain about 48% of soluble phosphoric acid. The old No: 1 brick plant was dismantled during the year and its operations con solidated with brick plant No. 2, thereby effecting considerable economies. Great Faflt At the zinc plant substation a sixth rotary converter was installed in order to have a spare when operating the plant at full capacity, A humidifying system: for cleaning the: air used to ventilate the electrical ma chinery in the zinc plant substation was installed and put into operation during the year. No other construction of importance was done in any otheT department of the Great Falls reduction works. Subsidiary Department* Coal Department. The mines at Diamondville, Wyoming, produced during the year 408,86890 tons of coal, 216,631.80 tons of which were shipped to other departments of the Com pany, 151341.65 tons were sold commercially, and 40,395.45 tons were used at the coal mine*. Tile mines at Washoe, Montana, produced 124367.35 tons of coal, 63,996.00 tons were shipped to other departments of the Company, 50,691.50 tons were sold com mercially, and 10,179.45 tons were used at the coal mine*. The mines at Sand Coulee, Montana, produced 183,674.30 tons of coal, 78,454.20 tons were shipped to other departments of the Company, 104312.10 tons were sold com mercially, and 408 tons were used at the coat mines. 7 pWlTC00009793 1 Lumbr Department The sawmills at Bonner, St. Regis and Hope, during the year, cut 29,793,693 feet of lumber, and purchased 18,058,369 feet, of which 36,010,965 feet were shipped to the mines of the Company, 33,199,523 feet were sold commercially, 2,119,374 feet were used at the mills for repairs and construction, and 1,788,389 feet were supplied to the factory for manufacturing; or a total disposition of 73,118,251 feet, decreasing the stock of finished lumber on hand by 25,266,139 feet, leaving a balance on December 31st, 1919, of 28,761,371 feet. The sawmill building at Bonner, with all of its contents, was destroyed by fire on the: evening of January 16th, 1919. Immediate steps were taken to provide plans for a new plant and to get the same into operation at the earliest possible date. The new sawmill was erected and began operations on October 1st, 1919. TheiiSubsidiary Departments of the Company realized a profit from the year's business: of $203,139.93. Phosphate Ombpsast During the year, development was undertaken to open a deposit of phosphate rock on land acquired by the Company in the vicinity of Garrison, Montana. The results indicate that a large and valuable: deposit probably exists, although sufficient work has not been done to demonstrate the fact. As a result of negotiations conducted with the Southern' California Orange Grove Fertilizer Company, your Company has acquired the right to purchase a very large deposit of phosphate rock of high grade, in Caribou County, Idaho. The deposit is located about seven miles from Soda Springs, on the Oregon Short Line Railway. Plans have been made for the construction of a spur to connect the property with the above Railway; also to attack the deposit through tunnels, through which about 25,000,000 tons of rock can be mined and to install necessary plant and townsite facilities to begin active operations, which stage: should be reached during the current year. It is believed that the development of this industry will add a large and profitable business to the activities of your Company. Botte, Anacoada sod Pacific Radway The Railway transported during the year 4,574,508 tons of ore and other freight and 244,976 passengers. The gross revenues were $1,189,064.76; rental and miscella neous receipts $15,742.39; operating expenses $1,145,343.84; taxes, interest and rental of leased lines $231;013J2; net loss $171,530.01. Subsidiary Corporations latanatfaul SflMlfcfag Cottpuj The smeltery of this Company, at Tooele, Utah, treated during the year 131,395.05 tons of copper ore, and 237,164.36 tons of lead ore, from which there were produced 13,695,215 pounds of fine copper, 61,554793 pounds of fine lead, 5,523,241.79 ounces of silver, and 28,536.806 ounces of gold. 8 -, i i ^ PNtC00009?99 The copper smeltery at Miami, Arizona, treated during the year 351,119,36 tons of concentrates and purchased ores, from which there were produced 160,451,682 pounds of fine copper, 275,573.26 ounces of silver, and 5,379.814 ounces of gold. International Lead Refining Company The Lead Refinery of this Company at East Chicago, Indiana, treated during the year 32,237.68 tons of lead bullion: from the Tooele plant, and 6;535.50 fons of purchased ore. ai>d Other bullion, front which there were produced 69,834,930 pounds of common lead, 0,4O2j35O! pounds of antiraohial lead, 6,311,227,38 ounces: of silver, and 24,427.984 ounces of gold, .........- Coppar. Work* The Refinery of this Company at Perth Amboy, New Jersey, treated for all com panies during the year 165,442.79 tons of copper bullion and 6,514,987.90 ounces of silver bullion, from which there were produced 326,671,962 pounds of fine copper, 19,503,573.65 ounces of silver and 120,629.250 ounces of gold. South America Asdw Copper Mining Company Development Churn drilling to the extent of 12,546 feet was done during the year, a portion of which was confined to an area south! of the territory formerly drilled and by which approximately 33,000,000 tons of ore of average grade were added to the reserves. There still remains a large and promising area to be drilled. The total tonnage developed to December 31st, 1919, amounted to 120,000,000 tons of ore having an average copper value of 1.485& per ton. Water Soppiy Work on the "La Ola," or main water supply, was confined to completing the surveys, road building for handling material and tunnel work. Of the six tunnels on this line, aggregating 7921 feet in lengths .5571 feet have been driven, 3068 feet of which were driven during the year 1919. ' The water line for domestic use was completed during the year, together with a large reservoir above the townsite; this furnishes an abundant supply of potable water. The work at the townsite has progressed most satisfactorily, furnishing attrac tive horned for the employe*. PotreriUoe Railway The entire construction program was completed during the year. The first train arrived at the millsite on May 1st, 1919. The interconnecting line between the main line and the mine railway, two and one-half miles in length, was completed. 9 PNYC00009800 Mint to Mill Railway This is divided into two sections, one from the millsite to the mouth of the main adit, the other from the main adit to the mine. The first section is practically com pleted, including the three tunnels,, aggregating 6364 feet in length. The main adit was driven 4270 feet during the year, making a total of 8000 feet in length. Shaft sinking, which was started in order to facilitate the driving of the tunnel, was abondor.cd, due to the fact that a larger volume of water than could be handled was encountered in the shaft. Iii the month of November a large amount of water amounting to 3000 gallons of water per minute was encountered in the main adit. Property The title to all mining claims, millaites, rights of way, water rights and other property was perfected. The Company owns 270,994 acres of land, 1250 of which were acquired during the year 1919. Redaction Work* All of the general drawings for the Reduction Works were practically completed, and a pilot plant, located at the mines, was put into operation, in which working unit tests are being conducted demonstrating the process which has been evolved. Santiago Mining Company Lo Agoirre Mae Development work was confined chiefly to preparing the property for the mining of the ore by the caving system. Haulage drifts, raises, etc., to the extent of 8264 feet were driven during the year. A new body of sulphide ore was cut in the central sec tion of the mine on the haulage level, which, when developed, will add a substantial tonnage of approximately copper to the ore reserves. Africans HAm The main shaft was sunk 330 fiet during the year, making a total depth of 588 feet. The total advance in all workings was 3672 feet. Shaft No. 2, located 2000 feet distant from Shaft No. 1, was sunk to a total depth of 233 feet; a level connecting the bottom of this shaft with Shaft No. 1 was driven, showing the vein to be continuous. The shafts were equipped with hoisting engines and bead frames, and a full equipment of pumps, compressor and air drills was installed. The developments throughout the property were satisfactory. Townaitss At both the Lo Aguirre and Africans properties townsites were established and dwellings built in sufficient number to house the present employes in a most satis factory manner. 10 N PNTC00009801 Investments During the year your Company expended in adding to its investments the sum oi 59,894,170.39, substantially all of which was advanced to the South American Com panies,. and for which your Company is entitled to receive stock of those companies, issued at par. (a) Walker Mining Company--The operations of the Walker Mining Company were continued in (tie, year 1919 under difficulties, due to shortage of labor. 'Thebe vkere mined and milled, 38,785.3 tons of ore, producing 3,982.5 tons of concentrates. Tbbre were shipped to the International Smeltery, Tooele, Utah, 4,270 tons of con centrates containing 1,397,430 pounds of copper, 29,077.54 ouncel of silver, and 677:754 ounces of gold. exploration work, during year amounted to 1,819 feet. TflU Capacity of: cqndeiurator was increased to 200 tons per day. The erection of a new: tailings dam, was completed. The new aerial tramway to handle concentrates to and from the railroad was 87% completed. . The crosscut tunnel from, the concentrator site to the extension of the vein is complete. The extension of this tutuiel on the vein toward the shaft was commenced January 1, 1920. Additional housing facilities are under construction. (h) Arisons Oil Company--During the year this company produced 456,174 barrels iof oiliiand paid $8.50 per share in dividends, of which your Company received $69,360.00. (c) Anaconda Lead Products Company--After extensive experimentation for the purpose of determining the practicability Of an electrolytic process for the pro duction of white lead, and satisfactory results being obtained therefrom, the Anaconda Lead Products: Company was formed and a plant erected at East Chicago, Indiana, adjacent to the plant of the International Lead Refining Company. This plant will' be put in operation early in 1920, and will have a capacity of 20 tons of white lead per day. (d) Copper Export Association, Inc,--Early in the year an Association was formed under the provisions of the Webb Act for the purpose of conducting the ex port business of a number of American copper producers. Working capital was sup plied by the various members of the Association, in proportion to their production. Fawnrial CdnJiKm Attached hereto you will find a consolidated balance sheet showing the financial conditio* of the Company, and its Subsidiary Corporations, at the close of business, December 31, 1919, and an income statement for the year, both certified to by Messrs. Pogson, Peloubet & Company, Certified Public Accountants. JOHN D. RYAN, New York, N. Y., May 5, 1920. Choirmtm of Ik* Board of Directors. 11 V* PNYC00009802 -KSr4iaSBll2WlW''C[EW-i''' 1 T Balance Sheet, 31st December, 1919 (Including Aaaets and I.iahilitioa of Stibtiriiary Campanian Owned) ASSETS Fix e d ; Mines and Mining Claims, Coal Mines, Water Rights and Lands for Reduction Works and Refineries, etc........................ .................................... ................. $75,614,652.52 Buildings and Machinery at Mines, Reduction Works, Refineries, Sawmills, Foundries, Water works, etc.................................................................. 57,458,373.08 Timber Lands ............................................................... 5,267,338.83 Investments in Sundry Companies not entirely owhed .................................. 38,487,026.16 -------------------- 176,827,390.59 CusaEjrr: Supplies on hand and Expenses paid in advance___ $12,020,579.73 Merchandise held for sale.............................................. 1,398,396.89 Metals in process and on hand;--at cost..................... 28,705,375.47 Accounts Receivable and Cash.................................. 35742,891.19 -------------------- 77,367743.30 $254,194,63389 W have examined into the affairs of the Anaconda Copper Mining Company and have verified the Alerts, Liabilities and Income shown above. The Net Income of 15,103,641.11 is after deduct ing all Development expenditure of the year. Depletion of Cos] and Timber Lands and Deprecia tion of Pints and Equipment. We hereby certify that this Balance Sheet shows the financial condition of the Company at 31st Dectmbar. 1919, and mas the accompanying Income Account for the year ending 31st December, 1919, is comet as stated. POGSON, PELOUBET * CO, New York and Butte, 22nd April, 1920. Certified Public Accountants 12 r Balance Sheet, 31(t December, 1919 (Includm* Altai* and Liabiliiiat of Subaidiary ComptniM Owned) LIABILITIES ` Ca p it a l St o c k : Authorized--3,000,000 shares of $50.00 each; issued-- 2,331,250 shares ..................................................... $116,562,500.00 Te n Yeah Sec u r ed Go l d Bo n d s , due 1st January, 1929: Authorized^$50,000,000; issued--Series A, 6%___ Res er v e f o r De p r e c ia t io n ................................................... 25,000,000.00 17,630,967.60 Cu r r e n t : Accounts and Wages Payable and Taxes and Interest Accrued .................. $30,658,790.84 Dividend No. 78, payable 24th February, 1920.......... 2,331,250.00 ---------------------- Su r p l u s : Balance 31st December, 1918...................................... $66,232,484,34 Net Income for the year ending 31st December, 1919, per Income Account annexed............................... 5,100,641.11 32,990,04084 Deduct Dividends Nos. 75 to 78....... .................. 71,336,125.45 9,325,000,00 ---------------------- 62,011,125.45 $254,194,633.89 Non.--The Balance Sheet tad Iscomt statement in midt up oa the seme basis u heretofore; Is order, however, to comply trim the Government Income Tex requirement! for the purpose of com puting depletion, an idditiontl vthstdos of tba mining property at of 1st Kerch, 1913, hat bees re corded upon tha books of At Company; tat, for the taka of uniformity, the rcanlt of those entries baa been omitted from tha current statement!. 13 PN*C0000980<t V Income Account--Yew Ending 3lit December, 1919 (Includes* Sdbaidiary Companies Owned) Metals in process and on hand at beginning of year.............................. Mining Expenses, including Development................... "........................... Ore Purchases ............................................................................................. Reduction Expenses, including Transportation of Ore......................... Refining* and Selling Expenses, including Transportation of Metals.. Cost of Merchandise sold.......................................... ....................... .. Administration Expenses and Taxes on Income and on Timber Lands Balance carried down ......................................................................... . $27,365,266.24 17,294,929.42 12,968,643.78 16.216,915.83 6,247,392.26 11,186,549.83 1,518,566.22 7,415,235.69 $100713,499.27 r Amount charged off this year for Depreciation and Obsolescence of Mining Plants, Smelters, Refineries, etc........................................... Interest ......................................................................................................... Balance, being Net Income, carried to foregoing Balance Sheet......... $2,928737.16 1,276,145.49 5,103,641.11 $9706,02376 14 PNYC0C009805 Income Account--Year Ending 31st December, 1919 (Includmg Subsidiary Companies Owned) Sales pi Metals............................................................................................. Sales oi Merchandise ............................................................................ ,. Royalties, Tolls, Rentals, etc...................................................................... Metals in process and on hand at end of year............... .......................... $52,633,640.33 11,937,530.52 7,436,952.95 28,705,375.47 $100,713,499.27 Balance brought down................................................................................ Income from Investments in Companies not entirely owned.................. $7,415,235.69 1,892/88.07 $9,308,023.76 15 PN1TC00009806 Anaconda Copper Mining Company CAPITAL STOCK Authorized. 3.000,000 shares, 330 each . Issued, 3,331,330 shares. 330 each . 3130.000.000 116,363.300 OFFICERS Chairman of the Board JOHN* D. RYAN* President.............................CORNELIUS F. KELLEY Vice-President . . . . B. B. THAYER Secretary and Treasurer . A. H. MELIN' General Auditor . J. T. ROBERTS Assistant Secretary R. D. COLE Assistant Treasurer . , D. B. HENN'ESSY DIRECTORS William Rockefeller John D. Ryan B. B. Thayer Cornelius F. Kelley George H. Church J. Horace Harding Nicholas F. Brady Andrew J. Miller A. H. Melin OFFICES An a c o n d a, Mo n t a n a 25 Bb o a d w a y , Ne w Year. pNtC00009807 To the Shareholders of the Anaconda Copper Mining Company: The following report covering the operations and business of the Companv for the year 1920 i,s submitted: The: year opened with a,, strong demand for, both copper and tine, a broad buying movement which began in hievember, 1919, extending into February, and sales of metals coyering ideliyeries :fb::ffi6; end :of the second quarter at fair prices seemed to promise a recovery if(ioin'ithecdelSfeSsiQn resulting' from she ending of the war and the unsettlement of the, WQrld'silbusinesSi'dile'tdlthat event. , ' The ^profnie.; failed of, fomllment... for the buying of metals ceased during the first quairter'dndidehvdiSlySi^ftgri^ugiiisp'iWere'at a. fate below production, until, during the; last quarter flje :<:ijiiIap|le,iiMi!!j.g;e|eral,'b:it^fi,WS!.atd,1;!ittdustry, both, domestic and' foreign, brought business Trices were reduced below the cost of'production and; m,etals were''forged' attracting buyers or any reasonable quantities. T^e:-ret|pCSd!;:.t;i||S,qf: production resulted in excessive costs, and rapidly accumulat ing aS&Uk-iiftaiil 'fdteed '$US closirig'dfi, the; mines:in March and April of the pres ent year. The condition of 'the markets in metals since the Autumn of last year and until the present time is not different from that in all lines of industry, and in our opinion recovery will depend upon the revival of general business in this country and Europe. It is our beiief that signs are commencing to appear indicating a business and indus trial recovery in which the metal producers will Share; and that the demand for the products of our Mines is:;Cerfaig.::.to: beiifestdrW as norWl Business conditions return. The ..income for the year after payment of all direct expenses was S9,335.253.13. ar.d after deduotjoflh for iriforMt: pdid And depreinatidh reserve,, ihe net income was $2,691,660.62. Dividends were declared during the jpkt amounting to $6,993,750.00, or $3.00 per share/ Aptif EtptMbra id i.ppi^mj^r.decided'tp.omit the quarterly declaration, due to exist- , ing financial''and'btl'sillels igdfigitipns. A summary of operations and activities follows: Mining Department Miha Tonnage The mines of the Company produced during the year 2,152,763.30 tons of ore and 7,557.11 tone of precipitates, or a total of 2,160,320.41 tons. Development and Exploration The operation of the Company's mines was curtailed throughout the entire year, but notwithstanding this fact an amount of development work greater than that done the pre vious year was carried on, with very satisfactory results, and a large amount of repair work was done in the various shafts and levels of the different mines. During the year there was done in the, mines of the Company in the form of drifts, crosscuts, laterals, upraises and winzes, 22.55 miles of development as compared with 20.39 PNYC0Q009808 mites in the year 1919. The shafts of the Company were sunk, additional depths aggregating 329 feet. The main shaft of the. Steward mine was sunk 406 feet during the year, making a total depth of 3633 feet, and the ore disclosed by this work was of a better grade than that in many of the: upper levels. This is the greatest depth yet attained in any of the shafts of the Com pany's, mine*, add the discovery of the ore referred to at depth encountered is considered of much importance. , At the Silver Bow mine, the No. 2 air shaft was sunk an additional 120 feet. The Emily shaft of the Badger State mine was sunk 303 feet to the 1600 foot level. Advantage was taken of the curtailment to complete repair work in a number of the shafts which were not producing during the; year. The shafts of the Anaconda, Never Sweat. St., LafyVenci:,'1 Bell.'Original, Gold Hill, Pennsylvania air shaft, Leonard. Liqui dator. Alex Scott. Moose and N'ettie mines were retimbered for distances varying from 100 feet to 573 'fief. At the Tramway mine the station at the 1330 foot level was retimbered. The Alex Scott shaft was enlarged to three compartments for a distance of 392 feet, while an additional compartment was added to the Moose and N'ettie shafts for distances of 200 feet and 123' feet respectively. Coertroctioo At the High Ore mine three quintuplex electric pumps were installed on the 1200.. 2200 and 2800 foot levels, and a ten inch lead-lined water column was placed in the shaft between the 2200 and 2800 foot levels. A hoisting engine and head frame was put in place and operated on the Gold Hilt shaft. A triplex electric pump was placed on the 2100 foot level of the Berkeley mine, while a new ten inch air column was installed from the surface to the 1000 foot level. At the Leonard mine, the blacksmith shop, boiler shop and construction shop were provided with new.roofs, and an eleven inch wood-lined pump column was installed in the shaft. A new roof was placed on the main hoist house of the West Colusa mine. At the Badger State mine an ironclad building 40 x 40 feet was added to the car penter shop. A new office Building, constructed of steel, 33 x 60 feet was built In the shaft a ten inch air column was put in place. In addition to the above, all of the underground electrical fixtures and wiring, some of which had become somewhat antiquated, were replaced with the most modem appliances. All of the stations and the shaft of the Anaconda mine were rewired, for lighting as well as power. One leaded steel armored 5000 volt, 3 conductor cable was put in place from the surface to the 2000 foot level. Steel armored cables have been placed in most of the mines in place of the old system, and everything possible has been done to safeguard the use of electric power underground, as well as at all other points. Storage battery locomotives have been installed for underground haulage in all the new levels of the mines in place of the trolley system, and excellent results have been ob tained from their use. 3 PNYC00009809 V entflarion There was .no diminution in the work of improving the vent:'a::on in the mines, and :r has made itself ielc most appreciably througr-iut the underground wcrxings. In connection 'ivith this work nine e'e-. -'cn'.iy driven fans were installed at the diner- er.: rr.r.v, haytr.g ,r. total a capacity of cubic fee: of air per minute. F-j ::v -:w o blowers -were a..-o installed, also 9.8S miles of canvas cubing for distributing the air. The air shafts of the Never Sweat. St. Lawrence., Original. Pennsylvania and West Colusa nun.es. v\ere smooth-surfaced with concrete slabs, in order to overcome the air fric tion occasioned by exposed shaft timbers. Fireproofing Fireproofing by means of the applies:: -n of- "gunite" was carried on in many of the mines. Both hoisting compartments of the Be ! mine for a distance of 1681 feet were com pleted. the main station on the 2SC0 foot le\ .1 and the power station on the same level were completed. AH of the powder, fuse and cap magazines in many of the mines were fireproofed, and many thousand, feet of cros. :u:s. mine exits, and surface adits to the -hafts were covered. Every precaution known was i..ken to guard against underground fires and with very good success. Reduction Department Copper The Copper Reduction Works treated f >r all companies during the year 2,319.336.76 tons of ore and other cupriferous material at Anaconda. Xo copper ores were treated at Great Falls, except a small tonnage of copper concentrates from Anaconda used for the flux ing of Zinc Plant residue. Of the total amount. I.S28.379.59 tons of ore were produced by the Company mines. 458.339.30 tons of ore we'e either purchased from or treated for other Companies, and 32.617.87 tons of precipitates and cleanings were from the old plants at Anaconda and Butte. At Anaconda there were produced 155.339.375 pounds of fine conper. 7,113.659.22 ounces of silver, and 32.530.302 ounces of gold. Of this production 138.763.065 pounds of fine copper. 6.420,026.20 ounces of silver, anti 32.530.302 ounces of gold were produced by your Company. The Electrolytic Copper Refinery at G eat Falls produced during the year 145,149,892 pounds of cathodes, which were melted into sh.ipes at Great Falis. The Copper Leaching Plant at Anaconda treated during the year 484,332.61 tons of tailings and 43.271.94 tons of purchased ore, from which there were produced 5.037.30 tons of cement copper. The Copper Concentrator also treated by flotation 181,033.83 tons of slimes from the ponds and 722,769.61 tons of tailings. Zinc The zinc plants at Anaconda and Great Falls treated during the year 443,582.39 tons of ore and other zinciferous material, of whicn amount 310.572.35 tons of ore were pro duced by the mines of the Company, and 133,010.04- tons of ore and concentrates . re pur chased from other companies. At Great Falls there were produced during the year 101.332,458 pounds of electro lytic zinc, 5.255,452 pounds of zinc in dross, and residue from which were produced 12,c36,- 4 pN'fC.OOOO^U 10 OSS pounds of lead. 2.173,080 pounds of copper. 2.073.348.56 ounces of silver, and 6 150 964 ounces of gold. Rod and Wire Mill Of the Company's production there were rolled into rods 74.596.787 pounds of per. Of this amount. 22.326,473 pounds were manufactured into wire, of which :-95'-.4 pounds were made into strand. Construction Anaconda Very little construction work was done at Anaconda during the year 1920. the prin cipal items being the completion of the 30-ton phosphate plant,-which was begun in the latter part of 1919. and the completion of the arsenic Terming plant, work on which was begun a: the same time. Both of these plants were qptraied in a very satisfactory manner. The 50-ton phosphate plant treated approximately 1500 tons per month of rock anil produced, about 900 tons per month of treble stiper-phosphate, containing about 47% avail able phosphoric acid. This plant is a pilot plant intended for developing the process of producing high grade phosphate and demonstrating the marketability of the product. Plans are under way for the construction of a large cotnmercia! plant to treat 400 to 450 tons of rock per day, to gether with the necessary sulphuric arid plant. The new arsenic refining plant, the remodeling of which was completel during the year, contains two refining furnaces each Capable of producing about 200 tons per month oi refined arsenic. Toward the end of the year a baghouse was constructed to recover the fume from: the. gases leaving the arsenic plant. The entire system operated in a most satis factory manner. The final dam for clarifying the water of the Deer Lodge River as Warm Spring:was completed during the year. A small experimental plant for the production of liquid sulphur dioxide and an experi mental precipitator for the precipitation oi copper from sulphate solutions by means of liquid sulphur dioxide were completed, and successfully operated during the year. Great Fi Oi In connection with the zinc plant a warehouse 40 x 104 feet was constructed. A very considerable advance was made during the year In connection with the treat ment of tine plant residue and bag house fume, by making the fume and the residue into briquettes and smelting the same in one of the old copper blast furnaces, which was re modeled for this purpose. No. construction work of note was done at either of the copper refineries. At fee rolling mill a double six-die wire drawing machine, a nine-die wire drawing machine and a seven-wire strander were added to the plant. At the ferro-manganese plant considerable work was done during the year in the way of reconstructing the furnaces as they wore out. Two of the furnaces were rebuilt along new and improved lines and the electrode holders were very much improved. The plant for the last half of the year operated very satisfactorily, but as there was a decided falling off in the demand for ferro-manganese in the middle of December the operation of the plant was discontinued. 5 PNYC0C0C9d1i Subsidiary Departments and Companies Coal Department The rrnnes at Dtamondviile. Wyoming, produced during the year 494.733.50 tons ot coal. 260.112.rO tons of which were shipped-to other departments of the Company. 189./. 1.2c tons '.Vere fold commercially and 44.899,75 tons were used at the coal mines. The mines at Washoe. Montana, produced 207.767.90 tons of coal. 109.456,10 tons were shipped to other departments of the Company, 7.495.SO tons were sold commercial'.'-', and 10.856 tons were-used at the coal mines. The mines at Sahd Coulee. Montana., produced 192.733.25 tons of coal. 89.332.95 tons were shipped:;:,o other departments-of. the Company, 103.042.30 tons were sold commercially, and 408.00 tons were used at the coal mines. Lumber Department The sawmills at.Bonner. St. Regis, and' Hope cut 92.865,620 feet of lumber and pur chased 358.11,5 feet, of which 38,18.5,389 feet were shipped to the mines of the Company, 32.027.243 feet were sold commercially/ 1,318,034 feet were used at the mills for repairs and construction, and 2.003.362 feet were .supplied' to the factory for manufacturing; or a total disposition of 73.534.028 feet, increasing, the stock-of finished lumber on hand by 19,689,707 feet, leaving a balance on December 31st, 1920, of 48,451,078 feet. Phoephate Development In the report covering operations for the year 1919, mention was made of a phosphate property which had been acquired in the. vicinity of Garrison, Montana. Development work was begun in October, 1919, and during the remainder of that year a tunnel was driven on the phosphate bed for a distance of 74 feet, the last 60 feet of which averaged upwards of 4 feet in width, and a content of 30.15% phosphoric acid. During the year 1920 this tunnel was driven a distance of 518 feet, ;of which 478 feet was on the bed, the remainder being in crosscuts where faulting had occurred. The phosphate rock developed in this length of tunnel averaged about 4 feet in width and' a content of 31.1% phosphoric acid. Operations at this property were discontinued on September 27th, 1920, as it was deemed advisable to concentrate the work at,the phosphate property located at Conda, near Soda Springs, Idaho. Conda Phosphate Property In addition to the claims originally purchased in the year 1919, arrangements for pur chase of 21 additional claims were made in the year 1920, ail containing phosphate rock, and 480 acres of land were purchased for plant site and townsite purposes. The townsite of Conda is located about 7J4 miles southeast of Strachan, a station on the Oregon Short Line Railroad, and in order to develop the property it was necessary to construct 7% miles of railroad connecting Conda and the mines with the main line of the Oregon Short Line Rail road. An agreement was arrived at with thei-Railroad Company, and contracts were let for the building of the railroad. Due to a comparatively open winter, work of building the railroad waa carried on without interruption up co the end of the year, when all work was suspended until Spring. Track was* however, laid to the plant site and considerable ballast ing was done. The .first work train arrived at Conda on December 10th, and the first material was hauled over the road on December 31st. Temporary buildings for, housing the employes were built, a telephone line was com pleted to Soda Springs, and a 44,000 volt power line 7% miles in length was built to the planr, which furnished electric power with which to conduct operations. An electrically driven compressor was installed. 6 PMYC000096 The property will be opened up by two adit tunnels, No, 1 adit was driven a distance ot 391 reet to cut the east dipping bed, while adit Xo. 2. the portal oi which was completed at the end of the year will be driven to cut the west dipping bed. It is expected that adit Xo. 1 will reach:the phosphate bed about April, 1931, The surface tram line connecting ad::? Xo. 1 and >>. 2 was 83f]c completed at the end of the year. The excavation' for the ''.an: siteWas '50% completed. Excavation was started for the pipe line through which water wi'.Ibe brought to the plant site, a distance a t "400 feet. Miter.i: ::r a crushing and drying plant, ore bins, trestles, etc., was ordered, also storage battery locomotives, cars and other necessary machinery. It is estimated by the engineers in charge of the property that the plant will be ready to operate about August, 1931. Butte, Anaconda and Pacific Railway The Railway transported during the year +.3S1.267 tons of ore and other freight and 341,330 passengers. The gross revenues were SI,542,675.21; rental and miscellaneous re ceipts S4.516.39; operating expenses SI,293.241.69; taxes, interest and rental of leased lines S232.146.79; net income $19,303.12. International Smelting Company The smeltery of this Company, at Tooele, Utah, treated during the year 104.210.44 tons of copper ore, and 200,787.83 tons of lead ore, trom which there were produced 9.909,763 pounds of fine copper, 46,130,732 pounds of fine lead, 4,182,881.41 ounces of silver, and 22.392.816 ounces of gold. The copper smeltery at Miami, Arizona, treated during the year 353,912.41 tons of concentrates and purchased ores, from which there were produced 165,791,986 pounds of fine copper, 378,090.17 ounces of silver, and 3,379.81+ ounces of gold. International Lead Refining Company The lead refinery of this Company at East Chicago, Indiana, treated during the year 23,437.38 tons of lead bullion from the Tooele plant, and +.266.67 tons of purchased ore and other bullion, from which there were produced+9,173,237 pounds of common lead. 2.811,008 pounds of antimonial lead, 3,438,370.73 ounces of silver, and 11,897,158 ounces of gold. Raritan Copper Works The Raritan Copper Works, owing to the unsettled conditions of the copper trade, operated at reduced capacity in all departments during the entire year, the production of copper being only 46.3% of the total capacity of the plant, which caused a corresponding curtailment in the production of the precious metals. During the year the installation of the oil system, whereby fuel oil was substituted for coal throughout the plant, was practically completed. This installation included the building of two storage tanks, each with a capacity of 55.CCO barrels of oil, the laying of pipe lines from the docks to the storage tanks of the various departments of the plant, and the recon struction of the fire boxes on the boilers of the furnaces to permit the use of fuel oil. The copper furnaces have ran more continuously with less repairs and labor charges than when using coal, while in the boiler-rooms results of tests have shown a marked in crease of efficiency by the use of fuel oil over coal. 7 pwccoocsei The Refinery of this Company at Perth Amboy. New Jersey, treated for ail companies during the year 124.453 44 rons 0f copper bullion and 4.338.616.64 ounces of silver bullion, from which there^were produced 245.473,190 pounds of fine copper, 14.320.SJ1.SI ounces of silver, arid 76.746.243 ounce? of gold. South America Andes Copper Mining Company Development Churn drilling to the extent of 9.086 feet was done during the veer, a lar;e portion of which was confined to an area south of. the main ore body, and a tonnage of, 7.326.241 tons of ore,, averaging 1.64' 'c copper, was added, to.the ore reserves, making a total estimate of 12S.262.50J ton?, having a copper content of 1.49fo copper. About 2500. feet of the above drilling, was represented by short holes drilled in order to more accurately determine the, grade of ore in certain sections which had not been fully developed^ There was. also 4840' feet of srnail drifts, winzes and raises driven for the pur pose of checking drill hole assays, and also for obtaining a sufficient tonnage of properly mixed ore that would represent an average sample Of the oxide ore body and which couid be used as feed tq. the experimental, mill. The .amount of work don? in drifts, up-aises and. inclined shafts for the removal of waste and the development of the intermediate haulage level was 12,392 lineal feet. 108.000 tons of waste were removed during the year, the average tons per man per day in the latter pan of the year was 22. demonstrating the efficiency of the caving system of mining as applied to this class of material. An inclined shaft 422 feet in depth to facilitate development of a haulage level which will be used for mining the oxide ore body was completed during the year. The main adit was advanced 3.142. feet, the total length at the end of the year being 11.142 feet. The work during the last half 0: the year was seriously interfered with on account of a large-fiovv of' water, amounting at times to upward of 10.000 gallons per minute. This, however.! is -graduallv' decreasing, and is lowering the water level in the ore body at the rate, ot three feet per day, Water St*>ply The survey Qt the proposed pipe line was finished in the month of May. 1920, The pipe line as located is 37.8 miles long, with an elevation at the intake of 11.715 feet and an elevation at the discharge of 9.695 feet. The total length of tunnels is 12.721 feet, of which 7,526 feet have been completed. The amount of tunnel work done during the past year was. 1,955 feet. PotreriQoe Raflway The Potrerillos Railway, consisting of the main line from Pueblo Hundido to the townsite ot Potrerillos and the line connecting B-irquito with the Chilean State Railroad at Chaharal, was operated satisfactorily during the year. Property , Additional acreage was taken up in the year 1920, making a total, of 272,275 acres owned by the Company. P^ccoo9e u Construction The hospital,., the carabmeros' quarters, and 43 new houses were completed during the year. The status oi dwellings at the end oi the year was. at the mine. 5 ''dwellings \00% complete; at Potrerillos 217 dwellings 92% complete; and at Barquito 14 dwellings 100% complete. The temporary machine shop was finished and equipped. Its capacity is sufficient to take care oi the ordinary needs oi the mine and railroad.'as operated at present. Operations in general at the property were curtailed during the year by inability to secure fuel. The experimental mill at Potrerillos, was started January 23th, 1920. Various altera tions were made to permit at thorough tests on the oxide ores by a leaching process, to be followed hv sulphur dioxide, precipitation and iron cementation. The leaching experiments carried on ::cr.r.g the year indicated a consistent extraction, ot 92% of the copper content in the oxide ores treated. The sulphur dioxide plant has been shipped to South America and should be in oper ation early in the. year 192,1. In the meantime tests on similar ores have been made at Ana conda; Montana;!. These'experiments have fully corroborated the results obtained originally in the lritoH plant!at; Anaconda and Warrant the expectation of a very satisfactory recovery from"!thpPPfea treated;., ESpe. to shortage of fuel, the mill was shut down in September, 1920, but will be started up early1 in, the year 1921. Santiago Mining Company Lo Aguirre Mina The principal work done during the year was confined to the work of preparing the ore body for caving by driving haulage drifts and raises; also the development of the sul phide ore body mentioned in the last report. Winzes were sunk showing the body to ex tend a considerable distance below the tunnel level, but on account of the presence of water in the bottom of the winzes it was impossible to determine the exact extent of the ore. The work, however,, proved that there was a substantial body of sulphide ore below the tun nel level. It will require the erection of machinery and pumps to prosecute this work further. The total work done on all faces amounted to 8,121 feet. The construction work during the year consisted of 12 two-family houses, 2 fiveroom staff houses, powder magazine and a telephone line from Africana to Lo Aguirre. African Mu m The total development for the year was 8,403 feet, consisting of the sinking of an additional 270 ileet in Shaft No. t to a total depth of S58 feet, while in Shaft No. 2, 190 feet were sunk to a total depth of 423 feet, the balance being represented in drifts and crosscuts. The results of the development work were quite satisfactory and would tend to indi cate an extension of the ore bodies to the north and a weakening of the ore bodies in a southerly direction. The copper in the Africana ores appears entirely in sulphide form, assaying 3.73% copper for ore so far developed. 9 00^ ,XC<* Investments (a> Mines and Minin? Claims.--During the year your Company added to the mining claims owned byx :n .ue Butte District, by pt:rcnasir.tr etcher the whole or undivided interests n a number ot outlying properties situated in promising districts. The amount expended in -t.a.-t'.r.? these purchases was $191.694,65. In addition, the sum ot $147,373.28 was oaid iv.rn? the y;ear v:p"n, the contract for the purchase ci phosphate lands situated in Idaho, and n re g.xrtr.g an; arc at property necessary for operating purposes. ibt Walker Mining Company.--The operations of the Waiker Mining Company were continued, in 1920 under difficulties, due to shortage of tabor. There wtjtt mjned aqd milled 41.325 torts, producing 7,338.92 tons of concentrates. There were shipped to the International Smeltery. Ttoeie, Utah, 2,295.43 tons ot con centrates. containing 907,988' pounds of copper. 17,128:57 ounces: of silver and 445.444 ounces of gold. There was. on hand at the concentrator and. in transit December 31,st. 1920, 7,660 tons, of which 2.572 was tonnage of concentrates on hand December 31st: 1919. The new aerial tramway fpr the transportation of ore and concentrates to the railway and supplies from the railway to the mine, was completed in 1920. The extension of the crosscut tunnel, a distance of 1.324 feet on the strike of the vein and through '.chat is, palled the main ore body, was completed during the year. A raise through this: ore body from the tunnel to the So. 4 level, a distance ot 343 feet, was completed daring the year.. A raise from the tunnel to meet the incline shaft from the 3rd level was started. The developments indicate that the ore body as now outlined will average better than 4T: in copper values. An electric haulage system was installed in the above mentioned tunnel, which w:'.l be used as the main haulage way from the ore body to the concentrator. The installation of a new crusher, picking belt and conveyor is about 85% compte'e. The additional housing facilities mentioned in last year's report were completed. (c) Arizona Oil Company.--During the year this Company produced 395,641 barrels of oil and paid $40.00 per share in dividends, of which your Company received $326,400.00 (d) Anaconda Lead Products Company.--The electrolytic white lead plant, locate 1 at East Chicago, Indiana, was put in operation on January 25, 1920, and immediately, as > usually the case in new process work, weaknesses in equipment and plant design developed, which" from time to time wire remedied and will be completely overcome in the near future The ceilroom of the: plant developed a greater tonnage than was anticipated, there' y throwing out of, balance the filtering, drying and barreling departments. The process: operated satisfactorily, the grade of the product being excellent, estab lishing a new standard of Whiteness for white lead. Construction and operation of the plan: was seriously hampered by;a scarcity of labor, which was remedied only toward the close the year. The plant made an output of 18 tons of white lead per day during the last month the year. (e) During the year your Company increased its holdings of stock of the Inspire:'.' ~ Consolidated Copper Company from 250,900 shares to 285,300 shares. 10 pNYC00C09d Financial Condition Continued expenditures in South America, together with the carrying of abnormally heavy stocks of metals, necessitated the borrowing of additional money. Accordingly, vour Direct ors in. October authorized the sale of Series B. of the authorized bond issue, to the principal amount of S25.000.000 at 7fc per annum. These bonds were sold and the pro ceeds- therefrom, and the distribution thereof, are reflected in the balance sheet attached hereto.; Attached .hereto you will find a consolidated balance sheet showing the financial, con dition of the Company, and its- Subsidiary Corporations, at the dose of business December 31, 1920. and .an:, income1 statement for the year, both certified to by Messrs. Pogson, Peloubet; St Company. Certified Public Accountants.' You will, note that certain.changes have been made in the balance sheet, which are not the. result''of'current' Operations for the year. Up to the year 1914 Anaconda's balance sheet showed the status of that Company only, Sinceliithitidateyvbe^fa.use of the. acquisition of subsidiary companies entirely owned by this Company, balance sheets of such Companies have been combined with that of this Com pany, and so published. Lmjdeh'the heading of ^Investments" there has heretofore been included Anaconda's interest in Companies controlled though not entirely owned, as well as other investments. Due to the increasmgji|impoTtance of such Companies, particularly those owning the South Ameri can pr^e^^|!nd;iih:or|er;;!tpi more- accurately- present the status of this Company's inter est; whje^|:m:^|i::t^il^lp^yof'lthe.,issued!1 stock',is owned, the assets and liabilities as the same appear upon their respective books are distributed under appropriate headings on the consolidated balance sheet attached hereto. The change does not imply a valuation of the pr6per^ilsi:;;oi'!:s:^IS'-Onipdni|s,/i Which would show greatly in excess of the book values taken. New York, N. Y., May 5th, 1921. JOHN D. RYAN, Chairman of the Board. CORNELIUS F. KELLEY, President. 11 PNYC00009817 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1920 ASSETS Fix e d : Mines and Mining Claims, Coal Mines, Timber Lands. Water Rights and Lands for Reduction Works and Refineries, etc.................................................................$118,364,459.16 Buildings and Machinery at Mines, Reduction Works, Refineries, Sawmills, Foundries, Waterworks, Rail roads, Manufacturing Plants, etc.............................. "5,019,735.27 Investments in sundry companies..................................... 15,975,377,34 ----------------------- 209,359,571,77 CUHSENT: Supplies on hand, advances on Ores and Expenses prepaid ................................ ........................................$24,050,298.44 Manufactured products and Merchandise held for sale.. 3,980,697.16 Metals in process and on hand--at cost............................ 32,536,182.89 Accounts Receivable and Cash.......................................... 24,868,981.96 ----------------------- 85.436,160:45 $294,795,732.22 W have examined into the affairs of the Anaconda Copper Mining Company and of its Sub sidiary Companies and have verified the Assets, Liabilities and Income shown above. The Net Income is after deducting ail Development expenditure of the year, Depletion of Coal and Timber Lands and Depreciation of Plants and Equipment. W hereby certify that this Balance Sheet shows the financial condition at 31st December, 1920 of th4 Companies as an aggregate whole and that the accompanying Income Account for the year ending 51st December, 1920 ts correct as stated. POGSON. PELOUBET 4 CO.. Certified Public Accountants. New York and Butte, 23rd April, 1921. 12 PNYC00009818 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Balance Sheet--31st December, 1920 LIABILITIES Ca p it a l St o c k of Anaconda Copper Mining Company: Authorised--3.0CO.OOQ shares of SSO.OO each; issued-- 2,331,250 shares ........................................................ Min o r it y Ix t er es t s in Subsidiary Companies,.................... Te x Ye a r Se c u r e d Co l d Bo x d s , due 1st January. 1929: Authorized and: issued-- Aries A. 6T> $25,000,000.00; Senes B, 7fc S25,0u>,000.00 .................................... Re s e r v e f o r De p r e c iia t io x ........................................................... Cu r r en t : Accounts and Wages Payable and Taxes and Interest Accrued ....................................................................... SU6.i62.500.00 3,594.090.3' 50.000.000.00 22.310.319.SS 17,574,3c9.53 Su r p l u s ; Balance 31st December. 1919--Anaconda Copper Min ing Company and Subsidiaries entirely owned........ S62,011,125.45 Additions through consolidating accounts of Subsidi aries substantially owned and changes required in adjustment of prior years' taxes.............................. 27,044,426.37 89,055,551.82 Net Income for the year ending 31st December, 1920. per Income Account annexed.................................... 2,691,660.62 91,747,212.44 Deduct Dividends Nos. 79 to 81........................................ 6,993,750.00 ----------------------- 84.753.462.44 $294,795,732.22 Non.--In order to comply with the Government Income Tax requirements for the purpose of computing depletion, sn additional valuation of the mining property as of 1st March. ISIS, has been recorded apon the books of the Company; but, for the sake of uniformity, the result of those entries has beta omitted from the current statements. 13 PNYC0C0C96I9 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1920 EXPENSE Metals in process and on hand at beginning of year.................................... .. Mining, including Development........................................................................ Ore Purchases ................................................................................................... Reduction, including Transportation of Ore.................................................. Refining and Selling, including Transportation of Metals............................ Cost of Manufactured products and Merchandise sold................................ Administration, Federal Taxes and loss on Government securities sold... Balance carried down........................................................................................ $23,705,375.47 17.943.S73.r2 13,813,410.19 19,243.563.22 4,963,639.03. 3,664.682.26 1,933,451.94 3.020,165.93 $100,295,166.61 Amount charged off this year for Depreciation and Obsolescence of Min ing Plants,. Smelters, Refineries, etc................................ ........................ Interest ............................................................................................................ Balance, Xet Income, carried to foregoing Balance Sheet............................ $4,300,349.22 2,343,243.34 2,691,660.62 $9,335,253.18 14 - C0C009820 PN* ANACONDA COPPER MINING COMPANY rnd Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1920 IN'COME Sales ol Metals.................................................................................................. Sales of Manufactured products and Merchandise........................................ Royalties, Tolls, Rentals, etc............................................................................ Metals in process and on hand at end of year................................................ $53,227,273.03 7,716,975.88 ,314,729.76 32,536,132.39 $100,295,166.61 Balance brought down....................................................................................... Income from Investments in sundry companies............................................ $8,020,165.93 1,315,087.25 $9,335253-18 13 ptrtC0000982l