Document rBBwae2BRwa1wxJMBqm8KJgLE

Anaconda Copper Mining Company r ---- CAPITAL STOCK Authorized and Issued, December 31, 1922, 3,000,000 shares, $50 each . $150,000,000 OFFICERS Chairman of ths Board Prtsidsnt.................... Viot-Pnsidtnt . . , Viet-Prtsidnt . . . Stcretary and Tnasunr Grntral Auditor . . . Assistant Stcrrtary . . Assistant Trtasurtr . . JOHN D. RYAN CORNELIUS F. KELLEY B. B. THAYER JAMES R. HOBBINS A. H. MELIN R. E. DWYER R. D. COLE D. B. HENNESSY DIRECTORS P. A. Rockefeller John D. Ryan B. B. Thayer Cornelius F. Kelley George H. Church Charles F. Brooker Nicholas F. Brady Andrew J. Miller A. H. Melin OFFICES An a c o n b a , Mo n t an a 25 BtOASWAY, Nrw You N11760 PNfC0C009337 1 To the Shareholders of the Anaconda Copper Mining Company: The year 1922 was one of unusual importance to the copper industry as a whole, and to your Company. The suspension of operations by nearly all of the important American producers in 1921, forced by the inability of the consumptive demand to take the current production of copper, and to also absorb the remainder of war stocks of both virgin metal and scrap held by the Allied Governments, brought about the necessary readjustment of the industry. A decrease of about 400,000,000 pounds in stocks held by the producers, in addition to a marked decrease in outside stocks, made it possible to resume operations in 1922. By the end of the first quarter practically all of the American copper mines had resumed operating and production continued thereafter throughout the year. The approximate production of the world for the year was 1,900,000,000 pounds, and for the United States 1,131,140,000 pounds (snelter production). The market for the year averaged the very low price of 13.382 cents per pound (E. & M. Journal), a figure below the average cost of production. It showed, however, a gradual improvement from the low average monthly price of 12.367 , cents in March, to 14.074 cents in December. With the general revival of business during the year, the demand for the metal improved in a most gratifying manner. Refined stocks showed a further decrease to January 1, 1923, of more than 200,000,000 pounds, and the year closed with a large sustained buying movement that car ried the priee it March up to a high of 17.5 cents. All manufacturing plants are running to capacity, w8k orders booked for; months ahead and for the first time since the war, the industry is la a sound economic position, all indications pointing to a prosperous year. The present price of copper, about 17 cents per pound, is high only by comparison with the recent very low price. Copper is selling relatively at less than any basic commodity. The average, cost per pound to the principal producers in 1913 was 9.9 cents, while the average selling price for that year; was 15J cents, indicating an average profit of 5.8 cents--a margin normally considered as representing only a fair return. The average cost of copper produced in the United States in 1921 was 14.34 cents, while the average market price was only 12.7 3 p h x c g 00 cents per pound, in average loss of 1.64 cents per pound. In order to yield a normal profit for the industry, as measured by pre-war years, copper should today be selling at more than 20 cents per pound. The most gratifying increase in the operations Qt your Company has come in the remarkable growth of the business of The American Brass Company. In 1921 the total output of its manufactured product equalled 213.4S6.S66 pounds of metal, while for 1922 the total equalled 412,571729 pounds, an increase of 93.3%. The extraordinary activity Of the business! is shown by the bookings of The American Brass Company, which equal 136,678,706 pounds for the first quarter of 1923 as against 45,925,470 pounds for the first quarter of 1921. The total output of the manufacturing business of the Company, including The American Brass Company and the Rolling Mills at Great Falls, for the first quarter of 1923 equals 174,276,131 pounds as against 90,802,888 pounds for the same period of 1922. The result so far .obtained in the increase in volume of business of the Brass Company has amply justified! the belief expressed by the officers of: the Company at the time when the proposed merger of The American Brass Company was submitted to you for your con sideration. Copper Department Mines Operations at Butte were resumed on January 16, gradually increasing during the year as the number of returning miners increased. There were mined 1,933,106.07 tons of ore and 7,571.95 tons of precipitates were produced. At the concentrator there were treated 2,044,50632 tons of ore, 81,154.90 tons of slimes from the pondj, 822,51536 tons of copper- tailings, and 91,920.83 tons of zinc-silver tailings. The Leaching Plant remained closed throughout the year. The Anaconda Redaction Works treated for all companies 2,224709.46 tons of ore. Of the total emrnww, 1,878,162.56 tons of Ore were produced by die mines of the Company; 322,917.96 to"v of ore were either purchased from or treated for other companies; and 23,62894 of material were shipped from the old plants at Anaconda and Butte. No copper ores were treated at Great Falls but a small tonnage of concentrates from Anaconda was used for the fluxing of Zinc Plant residue. There were produced 157346,016 pounds fine copper, 7367359.00 ounces silver, and 26,026.110 Ounces gold. Of this production, 141741335 pounds fine copper, 6755312.19 ounces silver, and 25719945 ounces gold were produced for your Company. 4 PNYC0C009S39 Refinariaa The refinery at Great Falls produced during the year, 140,901,339 pounds of cathodes, of which 133,868,138 pounds were melted into shapes at that point. The Raritan Copper Works at Perth Amboy,- N, J., refined for all companies, 300,284,594 pounds fine Copper, 8,086,85748 ounces silver, and 33,873,532 ounces gold. Rod and Wire MID Of the Company's production there were rolled into rods 68,403,742 pounds of copper. Of this amount 23765,134 pounds were manufactured into wire, of which 10,598,165 pounds were made into strand. Zinc Department Mmaa From the Butte Mines of the Company there were produced 87,076.08 wet tons of zinc ore. Zinc Radaction Works The plants at Anaconda and Great Falls treated 23642276 tons of ore and other zinciferous material. Of this amount, 93,240.55 tons were produced by the mines of the Com pany, 632.79 tons of material were from the old plants at Butte, and 142,449.42 tons of ore and concentrates were purchased. The electrolytic plant at Great Falls produced 113,475,068 pounds zinc, 5,604,684 pounds zinc in dross; and residue from which there were recovered 15,211,699 pounds lead, 1,937,696 pounds copper, 3473485.65 ounces silver, and 5,673,904 ounces gold. Miscellaneous Products The sawmills at Bonner and Hope cut 63,116,499 feet of lumber and purchased 2,610,171 feet, ai which 37,389765 feet were shipped to the departments of the Company, 38,047,100 feet wars sold commercially, 877426 feet were used at the mills for repairs and con struction, aad 2491427 feet were supplied to the, factory for manufacturing, or a total dis position of 78406418 feet; decreasing the stocks of finished lumber on band by 12479,648 feet; leaving a balance 00 band at December 31, 1922, of 40,060,865 feet Coal At OiamondvtBe, Wyoming', there were produced 314427.65 tons of coal, 149412.05 5 C00009840 tons of which were shipped to other departments of the Company, 140,771.55 tons were sold commercially and 23,644.05 tons were used at the coal mines. At Washoe, Montana, there were produced 151,201.40 tons of coal; 65,803.40 tons were shipped to other departments of the Company, 81,207.50 tons were sold commercially and 4,190.50 tons were used at the coal mines. At Sand Coulee, Montana, there were produced 34,131.20 tons of coal ; 21,678.10 tons were shipped to other departments of the Company, 12,373.10 tons were sold commercially, and 80.00 tons were used at the coal mines. Arsenic As a by-product of copper smelter operations there were produced 3,036,347 pounds of arsenic, of which 3,007,399 pounds were refined, assaying more than 99% Arsenious Oxide. Sales during the year amounted to 3,050,942 pounds at an average price of 7.1 cents per pound, of which 224,684 pounds were crude and 2,826,258 pounds were refined. Sulphuric Acid The sulphuric acid plant at Anaconda produced 28,739.00 tons of sulphuric add, aver aging 60 Deg. Beaume. This was supplied to the flotation plant. Fertiliser The mines at Conda, Idaho, produced 13,005.78 tons of rock, averaging 35% P205. Of this amount 2,874.58 tons were sold and 10,131.20 tons were shipped to Anaconda. The Phosphate Plant at Anaconda produced 2,413.11 long tons of Treble Superphosphate averaging approximately 45% P205. The plant at present operated was built for the purpose of per fecting the process of manufacture and has only a small capacity. Additions are now being made that should result in increased output at a profit Metal Roofing The plant at Perth Amboy for the fabricating of copper and zinc shingles commenced operations February 21st, and all necessary accessories for complete roof installation were made The results for the year have been satisfactory, and it is expected that an increasing quantity of copper and zinc will be used in this new field, as the public becomes better acquainted with their many advantages and ultimate economy. Butte, Anaconda & Pacific Railway Company The Railway transported 3,411,686 tons of ore and other freight, and 158,527 passen gers, The gross revenues were $1,256,622.75; rental and miscellaneous receipts $36,808.15; 6 000^ operating expenses $1,145,435,24; taxes, interest and rental of leased lines $244,458.79; net loss $96,463,13. International Smelting Company International, Utah The Copper Plant started operations June 14, and treated 40,193.27 tons of ore and concentrates, from which there were produced 10,879,094 pounds fine copper, 825,030.56 ounces silver, and 7,281.455 ounces gold. The Lead Plant started operations June 21 and treated 77,663.43 tons of ore and con centrates, from: which there were produced 20,271,233 pounds of fine lead, 1,860,805.62 ounces silver, and 4,297.091 ounces gOid, 'From the treatment of fume and flue dust there were obtained 63,49 tons of crude arsenic, averaging 94.8?% As203. The Tooele Valley Railway Company handled during the year 211,146 tons of ore and miscellaneous freight. Miami, Arizona At the Miami smelter there were treated 392277.42 tons of concentrates and pur chased ores, from which there were produced 188,113,444 pounds of fine copper, 477,346.98 ounces silver, and 5,820278 ounces gold. International Lead Refining Company Lead Rafinory The refinery at East Chicago, Indiana, started operations July 1, and during the remainder of the year treated 124543.04 tons of purchased ore and bullion, from which there were produced 22,319,149 pounds common lead, 1,486,552.97 ounces silver, and 3,750.020 ounces gold. Zinc Oxida The pilot plant at East Chicago operated throughout the year, and produced 2,008,535 pounds, all of which was sold at satisfactory prices. The construction of an operating unit of a French Process oxide plant, consisting of twenty retorts having a daily capacity of approxi mately 16,000 pounds of rinc oxide per day was practically completed at the end of the year. A similar plant was in process of construction at Akron, Ohio. 7 pNYC00009d%d Anncond* Lead Product* Company At East Chicago, Indiana, there were produced 15.290,364 pounds barrelled white lead, and 79,721 pounds pulp lead, all of Which were sold. The plant is now operating on a basis of 25 tons daily, ., Walker Mining Company Operations at the mine and mill were resumed on May 22nd. At the mine, ore broken amounted to 54,482 tons. At the, concentrator there were treated 38,652 tons of ore, averag ing 5.62% copper, producing 9716 tons concentrates, averaging 21.08% copper, with a recovery of 95.59%, Shipments to the smelter amounted to 16,779 tons concentrates, and 3,048 tons crude ore, averaging 11.6% copper. Construction at the concentrator to bring the tonnage up to 275 tons per day was completed, and it is the intention to further increase the capacity to treat a reasonable proportion of ore newly developed. Arizona Oil Company During the year the Arizona Oil Company produced 379,690 barrels of oil. Due to the bringing in of a large number of new wells in the State of California by various com panies operating in that State, the stocks of unsold oil were greatly increased, with the result that prices rapidly declined. This condition had a bod effect on the earnings of the Oil Com pany and, in consequence, no dividends were disbursed during the year. On the other hand, the low price of California fuel oil has been a benefit to the International Smelting Com pany's smelter at Miami, Arizona. Andes Copper Mining Company Operations at Potrerillos daring die year 1922 were confined to mine development, operation of testing plant on both oxides and sulphide ores, advance of tunnels on La Ola pipe line, and misceUaneoo* work. Development There was no chum drilling done during the year, but the work was confined to enlarg ing and fim'vhmg the adit, driving of haulage levels, defining known ore body, and checking drill bole* by upraises and drifts. The results were highly satisfactory, the drifts frequently disclosing ore of very much higher grade than that indicated by the drill holes originally bored. S PNYC00009843 Wstar Supply In May the driving of the two remaining tunnels on La Ola pipe line waa resumed and will be carried on to completion. Tiring Plant The Experimental Leaching Plant was operated on oxide ores until September 1, with consistently satisfactory result* The Experimental: Flotation Plant was in operation from September 1 to the end of the: year, the results obtained being most satisfactory. PotrariDoa Railway The operation of the Railway was without incident during the year. Construction There was practically no construction during the year. Improvements were made in many cases to the housing facilities for the employes. The property and tailroad throughout are in excellent condition. Santiago Mining Company A shipment of oxide and sulphide ore amounting to 3,988 tons was sent to the testing plant of the Andes Copper Mining Company, at Potrerilloi, Chile, for testing purposes. Other than this there was no work done at either of the properties of the Santiago Mining Company. The American Brass Company At the various plants of the Company, there were produced 412,571729 pounds of -copper, brass and nickel silver products. At the present time plants of the Company are operating oa a basis of 50,000,000 pounds monthly. 9 PN*coo0c Pi Since acquisition by the Anaconda Copper Mining Company of over 99% of the stock of this Company during February, 1922, there was purchased the property of the Brown's Copper & Brass Rolling Mills, Ltd., at Jfew Toronto, Ontario, Canada, excepting the land and building^, which were leased for a long period. A new corporation--Anaconda American Brass Limited--all of the stock of which is owned by The'American Brass Company, was termed to conduct this operation and to better serve the Canadian trade. New Financing and Purchase of Chile Copper Company Share* Last January there was submitted to you the important program (a) To authorize the acquisition by the Company of at least 2,200,000 shares, or mote than 50%, of the outstanding stock of the Chile Copper Company. (b) To authorize the financing required in connection with the above acquisition, as well as to provide for the refunding of certain of the Company's outstanding obligations, and; for other purposes fully set forth in the circular letter of January 17 last. (c) To authorize an increase in the authorized capital stock of the Company from 3,000,000 shares, of the par value of $50 each, to 6,000,000 shares of the same par value, and to authorize the reservation of 851,878 shares -'or the conversion of a new issue of $50,000,000, principal amount, of the 7% Debentures of the Company. The response of the shareholders was most gratifying. Mote than 75% of the stock voted affirmatively upon the recommendations submitted. Not an adverse vote was regis tered. Accordingly the transactions, as proposed, were carried through successfully; and as a result you are advised that the outstanding issue of 6% Series A Bonds maturing January 1, 1929, has been reduced from $24,669,000 to $16,938,000; the outstanding issue of Series B 7% Bonds maturing on the same date has been reduced from $23,080,100 to $13,503,600, anq tbar a fund has been provided and deposited with the Trustee to redeem the balance of said 7% Bonds on July 1, 1923, the next interest date. The purchase of a majority of the issued share* of the Chile Copper; Company was completed, and an investment of very great value ha* been added to the Company's holdings. The purchase of this interest in what is undoubtedly the greatest copper mine in the world, assures a supply of raw material for the manufacturing plants of the Company for ah indefinite time in the future. The Couspony suffered'a great loss in the death of William Rockefeller on June 24th, 1922. Mr. Rockefeller was the senior Member of the Board and served continuously from 1899 to the date of his death, with great interest in and devotion to the Company's welfare. 10 PNYC00Q09845 il Attached hereto: you will find a consolidated balance sheet showing the financial con dition of the ;(3onjpany and its Subsidiary Corporations, at the close of business December 31, 1922, and an incpmelstatempaf for the year, both certified to by Messrs. PogSon, Peloubet & Company; Certified 'Public Accountants. JOHN D. RYAN, Chairman of the Board. CORNELIUS F. KELLEY, President. New York, N. Y,, May 1, 1923. 11 000 bl -.msPdEiasgBiiKBSwBitffiaaoia^in i ANACONDA COPPER MINING COMPANY n4 Subsidiary Companies Consolidated Balance Sheet--31st December, 1922 Fix e d : ASSETS Mines and Mining Gaims, Coal Mines, Timber Lands, Phosphate Deposits, Water Rights and Lands for } Reduction Works and Refineries, etc______ ______ $123,169,505.01 Buildings and Machinery ac Mines, Reduction Works, Refineries, Manufacturing Plants, Sawmills, Foun dries, Waterworks, Railroads, etc 101,689,863.62 Investments in sundry companies 18,553,002.71 -------------------------*243,412,371.34 DtraaEa charges and discount on bonds_________________ CuaaiNT: Supplies on hand, advances on Ores and Expenses prepaid-------------------------------------------------------------- 19258,305.45 3,606,699.03 Metals and Manufactured Products in process and on hand--at cost ____ 43,672,792.54 Accounts Receivable and Cash Assets 33,942,613.62 ----------------------- 96,873,711.61 $343292281.98 We have crammed into the again of the Aaaeoods Copper Mining Company and of its Subsidiary Companies end have verified the Areata, Liabilities sod Income shown above. The Net Income is liter deducting all Development expenditure of the year, Depletion of Coal and Timber Leads and Depreda tion of Plants ead Equipment. We hereby certify that this Balance Sheet shows the financial condition at 31st December, 1922, of the CompaaAs ae an aggregate whole ead that the accompanying Income Account for the year ending Slat Decnhar, 1922, is correct as Mated. POGSON, PELOUBET & CO,, rnwh'And Public ApswtmtWfiH. New York and Butte, 19th April, 1921 12 Nil 760.01 PNYC0D009fiV? -.tty' ANACONDA COPPER MINING COMPANY ud Subiidiary Companies Consolidated Balance Sheet--31st December, 1922 LIABILITIES Ca pit a l St o c k of Anaconda Copper Mining Company: Authorized and Issued--3,000,000 shares of $50.00 each $150,000,000.00 MiNoarrv IwnaiSTS in Subsidiary Companies 3781,41270 Tin Yia i StctjaiD Go l d Bo n is , due 1st January, 1929: Authorized--$50,000,000.00 Retired - 2,250,900.00 Outstanding;_______________ 47,749,100.00 Rxsmvx rot Dip u c ia t io n ____ _ 27,025771.1$ Cu x mn t : Accounts and Wages Payable and Taxes and Interest Accrued ________________________________________ 44,051713.67 Su it l u s : Balance 31st December, 1921$67733,90775 Net Income for the year ending 31st December, 1922, per Income Account annexed 3,53077773 ----------------------- 71784784.48 $34379278198 Nose la order to cnenpfy with Che Goeermaeat Inmene Tss requirements for the tsupuee of tauueitin* depletion, ee addMoaal Taiuetsoa of the afua* property as of 1st March, 1913, haa been recorded open the hoofea of da GaBfMTt bah for the sake of tmfonaity, the result of those mines baa beta omitted from the com* MMamta 13 PMtcoooo^43 w mmm tm <a ANACONBA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1922 EXPENSE Metals and Manufactured Products in process and on hand at beginning of year________________________________________ ____________________ __ Ores and Metals Purchased._________________ Mining, Reduction apd Refining of Metals Manufacturing Expenses, including Selling Cost of Merchandise sold and Operation of Public Service Companies______ Administration and Federal Taxes Balance carried down ______ $17,817,363.59 34,834,516.34 31,659,049.58 76,280,220.60 1,584,545.84 1342,644.46 11,432,044.06 $175,450,384.47 'i H Amount charged off this year for Depreciation and Obsolescence. Interest, including discount on bonds__;________________________ Expenditure during suspension of Operations___________________ $2388,04335 4,020,344.4? 930,49334 Balance, Net Income: Apportioned to Minority Interests------------------------------- $ 8,362.42 Carried to foregoing Balance Sheet----------------------------- 3,53037723 -------------------- 3,539239.65 0 $11,478,121.83 14 ANACONDA COPPER MINING COMPANY and Subsidiary Companies Consolidated Income Account--Year Ending 31st December, 1922 INCOME Salesi of Metals and Manufactured Products__ $123,501,638.91 Tollsi Royalties, Rentals, etc________ Sales of Merchandise and Revenue of Public Service Companies___________ Metals and Manufactured Products in process and on hand at end of year__ 5,973,914.50 2,302,038.52 43,672792.54 $175,450,384.47 Balance brought down------------------------------------------------------------------------------ $11,432,044.06 Income from Investments in sundry companies------------------------------------------- 46,077.77 $11,478,121.33 15 PNYC00009850