California. We believe it has been purchased judiciously and ultimately can be sold off profitably. However, the present shortage of mortgage money and high interest costs are serious obstacles that slow the pace of sales from existing projects and make it unwise to initiate vigorous new real estate development projects while these conditions exist. We do anticipate that in 1970 our income from real estate will hold up well compared with 1969 but will not produce the return on total investment that we like to see, for much of our money is invested in land that we are presently holding off the market. Construction is of lesser importance to us now, but we can foresee that our income from dredging and building construction will be higher in 1970 than it was in 1969. We are relying on our mining activities to allow us to report improved profits in 1970 and we think that the prospects are good. We expect that Marcona and Pima can at least hold their own and possibly exceed the record profits reported last year. Pima's record over recent years has been exceptionally good. Expansion of the mill and mining operations in several stages from 1, 500 tons daily to 38, 000 tons daily has made it possible to mine profitably lower grade ores and to increase the amount of copper sold. Copper prices have been high and strengthening. In 1969 Pima had the added benefit of selling not only its current production but substantial amounts of copper out of inventory that had been produced in the prior year but unshipped when the smelters were on strike. This factor will be absent in 1970 but hopefully will be offset by the higher copper -12-