11 - this might be reasonable in some cases, we felt it could be avoided here where it meant a premium of over $4,000,000 on today's prices. We solved this problem by making the loan bankable by eliminating the risks from the banks' standpoint in the following manner. The market risk was eliminated because of the A.E.C. contract. The costs of production were eliminated by having Lucky Mc enter Into a contract with Utah Construction Company which agreed to perform the mining and milling on a cost-plus basis with guaranteed maximums that would assure a sufficient margin to retire the bank loan. The danger of overrun on capital costs was eliminated by having Utah agree to construct the mill on a fixed price basis. The capital requirements were reduced by shifting to Utah as an outside contractor the cost of purchasing the mining equipment and machinery. On this basis five banks agreed to put up $10,000,000 and to allow the loan to be retired without penalties for prepayment. While these initial facilities were still in the course of construction, it became evident from further discoveries that Lucky Mc had even greater reserves and could utilize additional mill capacity. At the same time the Phelps Dodge Corporation had made a discovery in the neighboring area and was faced with the problem of constructing a small mill to service its requirements. Small mills are expensive both to construct and operate on a per ton basis. Consequently the two companies worked out an agreement whereby Phelps Dodge would advance Lucky Mc an additional