ii at san juan bay peru marcona iron ore is loaded into ship holds by dock conveyor directly from the 350,000-ton port stockpile area this 49,000-d w t . ship is being loaded at a rate of 2500 tons an hour our company has an important interest in the international ocean shipment of bulk commodities and marketing of premium grade iron ore to the world's major steel producers through its 50 per cent voting interest and 41 va per cent equity interest in cia san juan s a that company handles the sale and delivery of iron ore produced by marcona mining company ore is pur chased from marcona f.o.b peru and sold on a delivered basis to millside dock or other terminal facility designated by steel-producing customers in the united states europe and japan much of the transportation is provided by vessels owned by san juan carriers ltd a wholly owned liberian subsidiary of cia san juan s a other shipping requirements are provided by charter consolidated earnings of cia san juan s a for the 12 months period ending october 31 1960 were 6,120,650 of which our company's share is 2,524,770 this is a 137 per cent increase over the respective figures of 2,584,586 and 1,066,554 for 1959 among the major factors contributing to the sharp increase in profits the largest since organization in 1953 were increased ore shipments increased company-owned shipping capacity and generally improved profit margins the chart below shows the vessels now owned and operated by san juan carriers ltd as the year closed negotiations were concluded with japanese builders for an addition to this fleet construction of a 67,500 deadweight ton 16.5 knot combination ore and oil carrier with launching set for september 1962 the original cost of the ships shown was 32.8 million 19.7 million of this cost was provided by bank financing and at november 1 1960 7.4 million remained unpaid the san juan vessels are especially designed for the iron ore trade because of the operating cost advantages over general cargo ships despite the special purpose design the ships are adaptable to carrying a variety of back haul bulk cargoes five of the ships including the one in construction can carry crude oil and other petroleum products on return voyages although it is a secondary feature back haul operations are making an increasingly important contribution to profits sj harvey s mudd san juan exporter 18 0 san juan trader financial report auditors opinion akthuh andersen 6c co 600 cauforwta street saw francisco b to the board of directors utah construction & mining co we have examined the consolidated balance sheets of utah construction & mining co a delaware corporation and subsidiaries as of october 31 1960 and 1959 and the related statements of income earned surplus and equity in undis tributed earnings of affiliates for the two years then ended our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances in our opinion the accompanying consolidated balance sheets and statements of income earned surplus and equity in undistributed earnings of affiliates present fairly the financial position of utah construction & mining co and subsidiaries as of october 31 i960 and 1959 and the results of their operations for the two years then ended and were prepared in conformity with generally accepted account ing principles applied on a consistent basis during the two years san francisco california december 15 1960 statement of consolidated income for the years ended october 31 1960 and 1959 income : gross revenue from operations note 4 costs and expenses gross profit from operations equity in income of affiliates note 1 . joint ventures note 4 gain on sale or liquidation of investment gain on sale of property interest other expenses : general and administrative . . . employees retirement-plan provision interest net income before federal and foreign income taxes provision for federal and foreign income taxes note 6 net income si 1,239,(87 10,722,137 2,105,000 2,360,000 $ 9,134,687 $ 8,362,137 the accmpakfllng'miesi-aiiedrr integral part of this statement