3 private sales of uranium in excess of 3 million pounds outlook for uranium continues to be favorable marcona reorganized and utah equity ownership increased to 46 marcona's pellet capacity now 3.3 million tons annually san juan building largest ore carrier in the world at 105,000 tons three private sales of uranium oxide also contributed substantially to the increase in mineral sales backlog and confirmed the company's op timism of a year ago regarding the outlook for uranium these sales call for the delivery of approximately 3,205,000 pounds of concentrate during the period 1 967 through 1 970 the first of these was a sale of a minimum of 740,000 pounds of uranium oxide to a swiss utility company nok for the first fueling of a 350,000 kw generating plant located at breznau switzerland delivery is scheduled to commence in june of 1967 a sec ond sale of a minimum of 765,000 pounds was made to okg an operat ing company owned by eight swedish utilities deliveries under this sale are scheduled between april 1 and september 30 1968 the third sale was to the general electric company calling for deliveries between a minimum of 1,700,000 pounds and a maximum of 2,000,000 pounds of uranium oxide over the two-year period 1969 and 1970 these new sales underscore the rapid growth in the number of nuclear power plants slated for construction within the next few years this growth has far exceeded even the most favorable estimates of two or three years ago as pointed out in last year's annual report the company has sub stantial uranium reserves in wyoming at lucky me and shirley basin and a modern and efficient mill at lucky me these factors coupled with our continuing activity in uranium exploration put utah in an excellent posi tion to participate in the future growth of the nuclear power industry both immediate and long-range benefits are anticipated from several developments affecting three companies in which utah and cyprus mines corporation have the principal interest — marcona mining company cia san juan s.a and san juan carriers ltd during fiscal 1966 these three companies became subsidiaries of a new corporation — the marcona corporation — in which utah has 50 of the voting stock and now holds 46 of the equity stock an increase in equity of 3 during the year this reorganization will provide economies in management and administration marcona mining company's iron ore operations in peru have continued their excellent progress during the past year the new pellet plant rated at 2 million tons per year was put into operation in may and the first pellet plant was modified to increase its capacity from 1.0 to 1.3 million tons annually giving marcona a total capacity to produce 3.3 million tons of pellets per year because pellets have the highest profit margin among beneficiated products marcona's earnings will benefit from this improvement in product mix cia san juan s.a is the other principal subsidiary of the newly or ganized marcona corporation it markets iron ore both for marcona mining company and for mount goldsworthy san juan carriers ltd a subsidiary of cia san juan s.a operates one of the world's largest fleets of bulk carriers including eight ships owned by san juan and twelve ships under long term charter newest addition to the fleet is the 63,000 deadweight ton san juan trader launched on january 7 1966 at kawasaki japan and now in operation another ship of 105,000 deadweight tons is scheduled for delivery late in 1967 it is expected to be the largest ore carrier ever built and its addition to san juan's fleet will raise total owned and term-chartered ship ping capacity to about 1,500,000 deadweight tons the addition of the san juan trader further improved the economy of operation of san juan carriers already profitable fleet this ship can be loaded to its maximum capacity with any of several bulk commodities — iron ore petroleum grain or coal thus it is possible to carry a cargo utah's share of marcona's consolidated earnings 4,143,000 19 shipments from mount goldsworthy utah's year end investment in goldsworthy 16 million pima being expanded again to 30,000 tons per day pima's earnings increased due to higher volume and premium prices highest construction earnings ever 79 of backlog is negotiated work of one material in one direction and backhaul a different commodity thereby achieving improved utilization of the cargo-carrying capacity during the 1966 fiscal year shipments from the marcona mine ex ceeded 6'/z million tons utah's share of the consolidated earnings of marcona corporation after provision for distribution taxes amounted to 4,143,000 and compares with 4,204,000 for last year this slight decline in reported profits reflects a 1966 change in financial reporting practice increasing reserves for deferred foreign taxes and also reflects increased operating costs principally arising from the start-up expenses of the new pellet plant the full profit contribution of which was not fully available until after the close of the 1966 fiscal year in addition to in creased profit margins from pellet sales the marcona mine will realize reduced costs from construction currently in progress including the exten sion of the conveyor haulage system to cover the entire distance from the mine site to the port also increased earnings will result from cia san juan's handling of mount goldsworthy sales the first shipment of iron ore from mount goldsworthy left port hed land western australia on june 2 and by october 31 there had been nineteen shipments totaling 509,397 tons the ore is being sold under a seven year contract with japanese steel mills which provides for the de livery of l'/2 million tons in the twelve months ending april 30 1967 and ivi million tons annually for the remaining six years this major iron ore development is owned in equal shares by utah cyprus mines corporation and consolidated goldfields australia pty limited cia san juan s.a a subsidiary of marcona corporation nego tiated the sales contract and is handling most of the ocean shipping utah's investment in the mount goldsworthy project at year end was $ 1 6 million your company continued to mine iron ore at its iron springs mine near cedar city utah under a sales agreement with the u s steel corporation which runs until 1975 utah also acts as a contract miner for c f & 1 steel corp in the cedar city area due to lower tonnages at both opera tions earnings were below those of last year the continuing expansion of the pima copper mine near tucson ari zona has enlarged its capacity from 6,000 tons per day in 1965 to a cur rent figure of 18,000 tons per day and this will be further increased to 30,000 tpd by late 1967 this expansion will enable pima to process lower grade ore during 1966 pima received premium prices on 40 of its production and has already booked premium sales into 1967 utah owns 25 of pima mining company with 50 owned by cyprus mines corporation and 25 by union oil co of california pima achieved record earnings during the year and utah's share of these earnings after distribution taxes was 1,865,000 compared with 908,000 last year during the past year your company continued to supplement its pro ducing mining properties with a vigorous program of geological explora tion and mineral development major efforts were underway in australia western canada and the western united states with part of our program devoted to the search for minerals which we do not currently mine the construction division's profit performance for the year was the highest in the company's history the backlog at october 31 was 115 million compared to 141 million a year ago this decline is the direct result of a more selective bidding program the current backlog is made up of 79 negotiated work as compared with 51 a year ago and less than 10 two years ago the net effect is to provide more assurance as to the profitability of the backlog important new work acquired during