OCR

TOQUEPAOA PROJECT ESTIMATE SUMMARY The Construction Agreement used as the foundation for cost of work and Contractor's price determinations the American Smelting and Refining Company engineering department estimate of Hay 1, 1954, which had been prepared for purposes of economic studies regarding feasibility of Toquepala development, revised as of December 8, 1955 and further adjusted to allow for increased material and labor costs on March 15, 1956. As stipulated in the Construction Agreement, Southern Peru Copper Corporation authorized the Contractor to review this cost of work estimate early in 1957. An estimating section thereupon was established at the Denver, Colorado office and an estimate was prepared and approved by Southern Peru Copper Corporation as of October 4, 1957. This new cost of work estimate was based on the 1,985 of some 3,300 total design drawings complete on August 1, 1957, the known cost experience of the project at that time, and the most accurate survey possible of facilities not yet in the design stage. It was submitted with the understanding that further review would be allowed and made when design was complete. The estimate group was recalled late in 1958, resulting in a revised cost of work estimate as of February 27, 1959. The cost of work amount per this final revised estimate became the target estimate figure, adjustable for consideration of cost incentive bonus as explained in the section of this report entitled Construction Contract and Revisions. There follows herewith a summary comparison of work cost esti- mates, detailed and distributed according to the major cost center areas which comprise the overall Toquepala project.