british columbia copper prospect vigorous exploration program sand and gravel project encountering difficulty construction backlog now stands at 122,300,000 with 85 in negotiated work new port hedland dredging contract 50 million negotiated contract for expansion of el teniente copper mine in chile value of construction completed was 104 million encouragement to the company's opinion that the property may ultimately be placed in production however closer spaced drilling is required to determine the validity of the company's opinion the company has available proven substantial reserves of coal and iron ready for active development when warranted by marketing and economic conditions the continuation of utah's growth in mining is dependent upon a vigorous and intensive exploration and development program to this end exploration offices are maintained in california nevada utah wyoming british columbia and australia and expenditures for this purpose have been increased in recent years properties under investigation in north and south america and australia indicate the possible presence of such varied minerals as coal copper uranium molybdenum gold silver lead zinc and phosphates this past year saw considerable difficulty encountered by our sand and gravel project near jenner on the russian river 60 miles north of san francisco we experienced problems and unanticipated costs in an unsuccessful effort to open an access channel at the mouth of the river utah is purchasing sand and gravel for the fulfillment of its material contract with transbay constructors pending reexamination of the river problem consequently we have incurred losses on this project the profit from construction activities was the second best year on record exceeded only by last year's performance the backlog of unperformed work increased to 122,300,000 at the end of fiscal 1967 compared to 1 14,900,000 at fiscal year end 1966 for a 6.4 increase the current backlog consists of 85 negotiated and cost protected work as compared to 79 last year and 51 two years ago however the composition of the backlog is such that we need additional work early in \ the year to employ our personnel and to sustain the level of earnings of the past two years new additions to our construction backlog included a contract negotiated with the mt newman mining co pty by a joint venture of utah and utah's japanese affiliate japan industrial land development co this contract calls for the dredge alameda already in australia and the japanese dredge kokuei maru from tokyo to dredge approximately 10 million cubic yards of material at port hedland in western australia in order to develop deep water access for very large ore carriers the work has already commenced and the project will be completed by mid 1970 a second important contribution to our construction backlog occurred in september when utah was awarded a contract estimated at approximately 50 million for design materials procurement and construction of additional mining facilities at the el teniente copper mine in chile the el teniente mine is operated by sociedad minera el teniente s a a corporation owned by the government of chile and kennecott copper corporation the scope of the construction includes extension of the underground ore gathering system a new ore loading station approximately six miles of tunnel railroad and railroad facilities and the installation of additional mine equipment completion is scheduled in less than three years also in peru mine facilities and plant improvements for several clients are in various stages of construction during this past year construction work was completed on projects valued at 104,000,000 included in these were jindabyne dam a part of the snowy mountains project in australia a copper wire and rod mill for the cerro de pasco corp in peru and the san luis dam project at los banos california in addition the dredging division completed a portion of the recognition for outstanding performance on thailand air bases for u.s navy land activities contribute lower profit this year substantial land sales at moraga valley 14 acres sold during year at el segundo industrial park bay farm island property to be reclaimed by december 1968 1200 acres sold at monterey work ranch sales recovery at vandenburg village trench for the san francisco bartd transbay tube and channel and harbor dredging at port hedland western australia for the mt goldsworthy iron ore project progress continued to be made this past year on the west arm powerhouse and the manapouri tailrace tunnel on new zealand's south island these two projects are important elements in an ambitious hydroelectric scheme which uses a mountain range as its dam and two natural lakes as its reservoir water will drop 600 feet to turn turbines in the underground powerhouse and thence through the 6v4 mile tailrace tunnel into the tasman sea in thailand we are continuing to provide services for the united states navy with the construction of support facilities at an existing airbase under an urgent program in july a large airfield was completed the timely and efficient completion of certain of these facilities under adverse conditions has been given recognition by the naval facilities engineering command our land activities experienced lower earnings this year than last partly because of the depressed real estate market which prevailed for most of the year however a substantial sale of 1,100 acres at moraga valley in the san francisco east bay area was completed as was the transfer to the state of california's division of highways of an additional 1 7 1 acres for use as a freeway right-of-way through the moraga ranch additionally a land developer purchased an option on the remaining 993 acres of the moraga valley property when and if the acreage under this option is purchased over the next five years all of the land at moraga will have been sold at utah's el segundo industrial park located near the los angeles international airport 13 sales totaling 14 acres were closed during the fiscal year twenty-six acres of prime industrial land and 49 acres of partially developed land remain unsold at our other industrial park located in south san francisco the remaining unsold inventory consists of 48 improved and 6 unimproved acres at your company's alameda south shore project there remain ten residential lots and 3.4 acres of commercial land available for sale sixteen acres of multi-family land were optioned for sale to a builder on favorable terms the alameda south shore shopping center occupying 59 acres is being held as an investment and is operating at a modest profit also near alameda your company is developing approximately 900 acres at bay farm island these tidelands are currently being reclaimed by utah's dredge franciscan the land reclamation is progressing as planned with completion scheduled for december 1968 last year utah acquired an option to purchase 5,200 acres of land on the monterey peninsula near the city of monterey during this past fiscal year we purchased 1 400 acres under this option of which 1 200 were subsequently sold to another developer planning is presently underway to develop the remaining 200 acres which lie along the monterey-salinas highway a masterplan which includes the remaining 3,800 acres under option is currently being prepared at our diamond oaks residential development near sacramento we exercised our option in regard to 468 acres and 65 acres of land have been developed a sales program is underway but progress is disappointing at vandenburg village a residential development near the vandenburg air force base in california sales this year recovered somewhat from the depressed levels of the preceding year two acres of commercial land and 20 lots adjacent to the golf course were sold as were 47 other residential lots the remaining 168 residential lots in the project are now under option however 791 acres of undeveloped land are still unsold