OCR

PROJECT HISTORICAL BACKGROUND The existence of Toquepala as a mineralized area was known to geologists many years before its final development and construction of facilities to produce copper from the low grade porphyry ore deposit. It is mentioned in a German geologic survey of Peru made near 1800. In or near 1860 French and Chilean miners worked stringer veins in the general area. Today, the ruins of a French smelter constructed of field-stone in the vicinity of Rio Hondo to the east of Toquepala still stand. In the late 1930'a a U. S. geologist, using burros to travel through the desolate mountain wastes surrounding Toquepala, investigated the deposits; So impressive were his findings that an exploratory program was initiated to determine the feasibility of large scale development. From 1949 to 1952 exploratory work and preliminary engineering- surveys were carried out, with the two ensuing years taken up with detailed engineering and design, followed by economic studies and negotiations for financing. This resulted in a loan of $100,000,000 from the Export-Import Bank of the United States in November of 1954 to the newly formed Southern Peru Copper Corporation, which supplied additional capital in the amount of $100,000,000. This corporation combines four U. S. mining corporations: the American Smelting and Refining Company, who did most of the preliminary work on the project, holds a 57.75% stock interest; Phelps Dodge Corporation, 16%; Cerro de Pasoo Corporation, 16%; and Newmont Mining Corporation, 10.25%. Peruvian government officials working with representatives of Southern Peru Copper Corporation drafted the basic agreement enabling the development of the ore deposits and the construction of processing facilities. This Bi-lateral Agreement between the Government of Peru and the Southern Peru Copper Corporation was signed November 11, 1954. This agreement included the Toquepala and Quellaveco properties An amplification of the bi-lateral agreement was signed by both partie on April 10, 1955, when the three companies above-mentioned agreed to participate with the American Smelting and Refining Company through