wear in the process. Ore is removed from our mines and our reserves are depleted accordingly. Land is sold and our inventory of unsold land is further reduced. Unless we replenish and replace these assets, we ultimately perish. If we are to grow and prosper in the future, we must find more and better projects to take the place of those on which we are currently operating and producing a profit. Obviously we are going to continue to seek new construction work aggressively and to conduct our land development activities as efficiently as we know how, disposing of the land that we have and replenishing our land inventories when the opportunity and the circumstances are favorable for our doing so. But these divisions of our company do not lend themselves easily to discussion in specific terms, for it is difficult to talk convincingly or intelligently about profits from construction contracts you do not yet have or land that you have not yet acquired. So tonight I prefer to dwell upon the plans that we have or the steps that we are taking that are tangible and concrete. Refinancing To ready ourselves for future growth the first important step was taken in February this year when we refinanced our company by replacing our term bank loans maturing in 1963 with a 20-year 20 million dollar loan from the Prudential Insurance Company of America. Under our bank loans we had been obligated to reduce our credit 4 million dollars annually. It's hard for a company to grow and at the same time to be committed to heavy debt retirement schedules. The Prudential loan requires no principal repayments in the first four years, then $800,000 annually starting at the end of the fifth year, increasing to $1,200,000 annually from the ninth through the fourteenth year, and $1,600,000 annually thereafter. The insurance loan further gives us flexibility to borrow additional funds from the banks on a basis that we feel will meet 10 the company's needs to finance fluctuations in construction and land development requirements. We feel that this new financing provides a firm foundation upon which to undertake expansion and to take full advantage of new profit opportunities. Expansion of Mining Operations Except for uranium, we are expanding each of our mining operations. The Navajo coal project is well under way. Construction of the generating facilities is on schedule and our company is performing a part of this work. We have placed the orders for our mining equipment and expect to begin stripping in June next year, utilizing a new 40-yard dragline and an 18-yard shovel transferred from Ozark. Sales of coal to Arizona Public Service are anticipated at the beginning of 1963 and should have an impact on our profits thereafter. While the initial capacity is geared to 350,000 kw, we have good reason to believe that additional units will be added and at a date earlier than we had originally anticipated. May I remind you that the future profits expected from this contract have the virtue of being tied to a utility company operating in a rapidly growing area where energy requirements have been expanding at an unprecedented rate. Utah Construction has recently completed development work on its Dayton deposit near Carson City, Nevada, and we have a substantial body of iron ore that will necessitate beneficiation to upgrade the iron content and to remove impurities in the form of excessive sulphur. We plan to bring this property into operation as quickly as possible and have negotiations under way which, if successful, will more than double our annual sales of domestically produced iron ore. While I am not prepared to say that our profits will increase proportionately, certainly they will increase substantially and the life of our domestic iron ore operations will be 11