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On the eleven hundred, near the corner of the Main Top Claim of the Jerome Verde Development Company and reaching almost to their line, a body of considerable size of high grade ore was partly developed. This ore body probably does not go much below the twelve hundred but should reach above the ten hundred. An estimate of the tonnage is not available because the ore has not been blocked out.

On the nine hundred fifty a good sized ledge of $15.00 to $20.00 gold ore is in process of development. Just what this amounts to is not yet known.

Practically no development work has been done below the fifteen hundred foot level during the past year excepting for the Jerome Verde under our option.

We have done, under our contract with the Jerome Verde Development Company, the three thousand feet of work which our option requires, and for the coming year have agreed to do twenty-five hundred feet of work for them. As yet no ore of any commercial value has been discovered in their ground.

During the past year the company purchased some eighty acres of ground formerly owned by the Hull Copper Company and lying west of our original holdings. This ground is wholly undeveloped but when general conditions warrant, it is our intention to prospect it from our present underground workings.

Ore Reserves: The amount of ore developed above the 1600 level is as follows:

Estimated tonnage and average:

1,036,166 tons averaging 9.7% Cu., .03 Oz. Au., 2.0 Oz. Ag.

Construction: Practically nil.

Costs: The table below shows the average cost per pound of copper produced during the year.

Mining ....0232 per lb.
Smelting ....0226  "  "[[ditto for: per lb]]
Freight on Ore...   .0007  "  "[[ditto for: per lb]]
Freight on Bullion, refining and selling   .0211  "  "[[ditto for: per lb]]
Other Expenses   .0017  "  "[[ditto for: per lb]]
[[summation line]]                                                                       .0693  "  "[[ditto for: per lb]]
These costs do not include (1) Depreciation, (2) Reserve to return capital (Depletion), (3) Taxes. 

General conditions for future successful operations are improved. The State, County and Municipal taxes paid during the year were $420,589.76. We have, under a stipulation preserving out rights, made first payment in State taxes of an amount which we consider legal, based upon the actual value of the company's holdings as required by law and have filed legal exception to the valuation fixed by the State Tax Commission.

Relief from the excessive rate on copper to refinery has been refused by the railroads and we have filed complaint with the Interstate Commerce Commission asking for a four dollar freight rate on copper from Clarkdale to San Pedro Harbor. We have arranged to ship part of our production direct to Europe when this freight rate is available.

Mr. George Kingdon, our General Manager, your officers and employes deserve your appreciation and thanks for efficient work.

FOR THE BOARD OF DIRECTORS,
James S. Douglas, President.

New York, February 20, 1923.

Transcription Notes:
ditto words need doing as per instructions Where are the instructions for ditto? For ditto, please transcribe the ditto mark, and then put in brackets what it is indicating ditto for, for example: " [[ditto for ___]] Thanks, Caitlin-TC Coordinator The cost table figures are left justified