or attainment of age 72 and will be replaced with successors elected by the remaining Voting Trustees from candidates suggested by the beneficial holders, who will also pay and indemnify the Voting Trustees. The Voting Trustees will not be liable except for their own malfeasance. The Voting Trustees will in all material respects have the full and unqualified right and power to vote the shares of Lucky Mc common stock in their unrestricted discretion as if they were the absolute owners thereof but with due regard for what they believe to be the economic interests of General Electric and Utah and any other holders of Voting Trust certificates in Lucky Mc, as shareholders but without regard to any other economic interest which General Electric, Utah or any other holders may have in any other business. Thus, for example, the Voting Trustees are not to be influenced in their decisions by the effect thereof upon General Electric's nuclear operations. The Voting Trustees are also required, when periodically evaluating the performance of the Lucky Mc directors, to take into account whether they have consistently sought to cause Lucky Mc to achieve the goals of selling and delivering to third parties between October 31, 1975 and December 13, 1985, at least 36,000,000 pounds of uranium concentrate (less amounts delivered by Utah after October 31, 1975) and thereafter of mining, utilizing and selling uranium concentrate to the fullest extent economically practicable. In making this determination, the Voting Trustees are required to give consideration to delays or reductions in sales resulting from matters such as force majeure or the insufficiency or unminability of reserves necessary to produce the required concentrate. The directors and officers of Lucky Mc cannot be officers, directors, or employees of General Electric or Utah or an affiliate of General Electric. Lucky Mc will not be consolidated with General Electric and its affiliates on the books of account, nor may it sell any uranium, in any state or form, to General Electric or its affiliates. However, Utah, as a General Electric subsidiary, will retain all the outstanding shares of Lucky Mc convertible preferred stock (the "Preferred Stock") upon which Lucky Mc is required to declare and pay, out of legally available funds, mandatory cumulative quarterly dividends commencing May 1, 1977, equal to 85% of Lucky Mc's net after tax income for the previous quarter (but computed without taking account of any deduction for exploration expenses, i.e., expenses associated with locating, defining, and testing uranium deposits up to the point of determining that future development of a deposit is economically feasible). Utah will also be entitled to any cash dividends declared on Lucky Mc's common stock. The terms of the Preferred Stock require that the consent of the holders of a majority of the outstanding shares of such stock be obtained for any of the following actions, thus affording certain limited protections for the investment in Lucky Mc: (i) amending Lucky Mc's certificate of incorporation; (ii) becoming liable for long-term (more than one year) borrowings (other than loans from preferred shareowners) exceeding 3Z$% of the shareowners' equity in Lucky Mc (less accumulated unpaid preferred dividends); (iii) leasing or disposing of real estate, mineral leases or mining concessions, or (other than in the ordinary course of business) assets with a net book value over $1,000,000 in any 12 month period; (iv) distributing Lucky Mc's assets except as cash dividends; (v) owning equity securities of, or participating in, other corporations, partnerships or joint ventures except in certain limited cases; (vi) merging, consolidating or acquiring other corporations or their assets; (vii) liquidating or dissolving; and (viii) agreeing to arrangements limiting the authority to pay dividends on the Preferred Stock. At the effective time of the Merger, Lucky Mc's assets will include the mining lands, leases and claims and the processing mills, buildings, systems and equipment and other mine-related facilities with respect to the Lucky Mc and Shirley Basin mines as well as Utah's exploration and other rights in various uranium properties including Green Mountain and certain other areas in the western United States and Africa. In addition, uranium which may be discovered on property or lease interests held by Utah on the date that Utah's uranium assets were transferred to Lucky Mc will be transferred to Lucky Mc. Lucky Mc's certificate of incorporation provides that it may only engage in the uranium business and dealing in resulting mineral by-products. No long-term borrowings have been assigned to Lucky Mc and, under the terms of the Preferred Stock, Lucky Mc can require Utah as the holder thereof to grant loans at then current triple A bond rates up to ten years (subject to mandatory repayment should General Electric cease to own beneficially a majority of the outstanding shares of Lucky Mc), provided the aggregate amount does not at any time exceed Lucky Mc's preferred dividend payments for the immediately preceding two years. Most of Lucky Mc's initial personnel will be former employees of Utah. 52 Copper 53 Island Copper MineCanada The Island Copper ore deposit, controlled by Utah, is located on a group of claims near Port Hardy on Vancouver Island, British Columbia, Canada. Production from the mine began in October of 1971 with the first shipment of copper concentrate to customers made in late December 1971. Molybdenum concentrate production began in 1972. Currently, the mill has an ore throughput capacity of 38,000 tons per day and can produce concentrate containing approximately 115 million pounds of copper metal annually together with significant quantities of gold. At October 31, 1975, the Island Copper deposit contained reserves estimated at approximately 251 million tons of ore grading 0.502% copper and 0.015% molybdenum mineable by open-pit methods from an approximate average elevation of 200 feet above sea level to a depth of 1,000 feet below sea level. In the process of mining the ore deposit to 1,000-foot depths, it will be necessary to remove approximately 632 million tons of overburden and waste. Although the ore deposit is close to an inlet from the Pacific Ocean, work done to date has indicated that the material between the proposed pit and the sea is impervious and no seepage of sea water has been observed. As a result of recent drilling information, total reserves were increased approximately 5% and the average grade decreased slightly during 1975. The Island Copper mine ships its entire output to two customers, Mitsubishi Corporation ("Mitsubishi"), for ultimate consumption by Dowa Mining Co., Ltd. ("Dowa"), and Mitsui Mining & Smelting Co., Ltd. ("Mitsui"), under long-term sales agreements. The two agreements require between 83.4% and 100% of plant production through December 31, 1976, at which time the Mitsubishi agreement expires. The Mitsui agreement requires between 56.4% and 63.6% for an additional five years. During May 1976 an agreement was reached with Dowa pursuant to which Utah will sell to Dowa 90,000 tons of copper concentrate annually during calendar years 1977 through 1979. Such annual quantity is essentially equal to the maximum annual amount of material which was sold to Mitsubishi under the earlier agreement. The price of copper under both of these contracts is based on London Metal Exchange quotations. The contract quantities are subject to variation at the option of the seller. Since there is a worldwide market for copper and molybdenum, Utah believes that a suitable market will exist for the remainder of the mine's production; however, there is no assurance that such a market can be obtained by Utah or maintained for the life of the ore deposit. The mine's production and sales data on copper and gold (the second most important product) from inception in October 1971 through July 31, 1976 are summarized below: _Ore Milled_ Fiscal Year Grade Tons % Copper % Recovery 1972 ........................................................................................ 7,319,000(a) 0.531 87.53 1973 ........................................................................................ 11,615,000 0.498 87.59 1974........................................................................................ 11,129,000 0.475 86.68 1975 ........................................................................................ 13,679,000 0.481 86.29 1976 (nine months)............................................................... 9,483,000 0.475 83.61 Copper Concentrate Sold Pounds of Ounces of Grade Tons of Copper Gold % Copper Concentrate(b) Contained(b) Contained(b) 1972 ................................................................. 23.47 138,186 64,874,000 37,661 1973 ................................................................. 23.47 206,155 96,767,000 44,144 1974................................................................. 23.29 195,321 90,995,000 44,799 1975 ................................................................. 23.76 243,819 115,848,000 62,097 1976 (nine months)........................................ 22.63 157,047 71,092,000 28,378 (a) Includes 193,000 tons milled during October 1971. (b) Net of finalization adjustments.