"HISTORY OF UNITED VERDE MINE, PRESENT OPERATION, FUTURE PLANS ARE TOLD BY SUPERINTENDENT SMITH."
"Exploding some of the traditions that have grown up around the United Verde mine since its first discovery in 1876, especially the traditions that tell of the fabulous richness of the ores smelted in the early days and those that tell of the incredible ore reserves of the present have, General Superintendent H. DeWitt Smith gave yesterday the second talk of the lecture course instituted by the company for the benefit and instruction of its employees. There was a large attendance including a number of visitors and the address of Superintendent Smith was listened to with close attention its importance and value warranted."
"EARLY HISTORY: He spoke briefly of the early history of the property which was first discovered by M. A. Ruffner, uncle of the present sheriff of Yavapai county, in 1876. Ruffner sold the original claims to Alexander and George McKinnon for $45,000, and they sold out in 1881 to former Governor Tritle. The governor operated the property for several years but was unable to make it pay and the mine passed to its present ownership in 1888."
"Senator William A. Clark first learned of the property in 1885, through a display of high-grade ores shown at the exposition of that year held in New Orleans. Later he became familiar with the United Verde ores through his association with the Orford refinery in New Jersey, and finally secured the property following an examination made in 1888. Prior to the acquisition by the senator, Dr. James Douglas had an option on the property, but declined to complete the transaction after making an examination shortly before that made by Senator Clark."
"EARLY EQUIPMENT: Mr. Smith gave some interesting data concerning the mine and smelter equipment of that date, the latter consisting of two tiny blast furnaces with a capacity of 50 tons each, one of which is preserved to the present day and stands in front of the general offices at Clarkdale."
"One of the great obstacles to the early success of the mine was the lack of transportation facilities and from 1883 to 1894 matte had to be hauled out and supplies hauled in by way of Granite at a cost of approximately [?] $9 per ton. The United Verde and Pacific narrow gauge road was completed in 1894 and the real history of the mine as a producer dates from that year."
"In the same year the first fire occurred in the Hampton stope and the mine has included among its possessions a 'fire zone' from that time until the present --- an undesirable possession which, it is hoped, will be eliminated before long by the steam shovel operations."
"MODERN PLANT: The smelter at Clarkdale was begun in 1911 and the plant was completed in May, 1915. The fire was indirectly responsible for the construction of the new smelter as the old plant lay immediately above the fire zone and there was much trouble from caving ground, one of the smelter engines actually lying at 15 degrees from horizontal when it was taken out."
"The mine plant was moved to the 500 level in August, 1920, and the steam shovel work was started in July, 1919."
"MINE PRODUCTION: The first of the old traditions which Mr. Smith shattered was that concerning the richness of the early-day ores. He said: 'When Tom Taylor tells you of the rich bullion in the old days, you can tell him that in 1900 the gold and silver amounted to 1.63 cents per pound of copper produced and that it was 2 cents in 1922. The gold and silver credit was 2.68 cents per pound of copper in 1919, due to the high price of silver, but it will average only 1.6 cents for the present ore reserves. There is some foundation for the old stories of five-cent copper in the early days, because at that time the mine was operated as a gold property and the copper was a side issue.'"
SECOND TALE: "Another and more modern tale that the gold and silver pay all the expenses of mining, smelting and refining --- was next examined and shown to be a fable. The gold and silver production, while large, is only a by-product and pays but a small percentage of the mine and smelter costs."
"PRODUCTION FIGURES: Mr. Smith gave some interesting figures on production, showing that since 1888 the mine has produced 1,111,971,696 pounds of copper, 563,375 ounces of gold and 18,406,232 ounces of silver."
"The figures for 1922 are: 423,543 tons of ore; 41,155,941 pounds of copper; 13,012 ounces of gold, and 564,192 ounces of silver."
"The average recoveries per ton of ore from 1888 to 1922 are: copper, 113.3 pounds; gold, 0.057 ounces; and silver, 1.88 ounces. The present recoveries are much smaller than this average, being 91.8 pounds of copper, 0.026 ounces of gold and 1.21 ounces of silver."
"PLANT CAPACITY: Another favorite 'barber shop' story --- that the possibility of raising the production to tremendous figures --- was next discussed."
"Until 1915 the capacity of the plant was limited by that of the smelter to approximately 1200 tons of ore per day or 36,000,000 pounds of copper per year. From 1915 to 1919 the output was limited by the hoisting capacity of the No. 3 shaft, as the glory hole and accessible upper level tonnage was small."
"Exploration and development work, shafts and hoisting, Hopewell tunnel tramming, etc., are planned with the definite purpose of maintaining an underground production of 75,000 tons of ore per month, or approximately 3,000 tons per day and with a possible production of 4,500 tons per day. The present tonnage is 2,500 per day or 62,500 tons per month. Any increase can come only by the opening of additional levels with an approximate daily output of 500 tons per level. The steam shovel operations promise a maximum tonnage of 2,000 tons per day in 1924."
"An interesting feature of this part of the lecture was the statement that to maintain an underground production of 3,000 tons per day it is necessary to drive from 80 to 100 feet of new development per day and to develop from 100 to 150 feet in depth of the mine per year."
"The present smelter capacity is 3,500 tons per day and this can not be increased until the new crushing plant is completed in 1924."
"CAPACITY vs. OUTPUT: The speaker showed that 'capacity' is one thing and 'output' another. The average output for the coming 20 years, he said, is estimated at approximately 730,000 tons per year and this figure has been exceeded only during the war years, 1917 and 1918. He explained some of the factors that operate to reduce output, such as depressions in copper price, overproduction by the industry at large, foreign competition and labor troubles."
"ORE RESERVES: Mr. Smith classed as 'barber shop conversation' the stories of the vast ore reserves of the mine. One of the pet yarns in this connection is the statement that there are 29,000,000,000 pounds of copper in sight and another the old, old tale of the Belgian syndicate that offered to pay four cents a pound for the copper 'in sight' and found that the value of the same was simply staggering running into the billions of dollars."
"THE FACTS: Leaving the realm of romance for that of solid fact, he said that the actual reserves of positive and probable ore at this date are 11,000,000 tons, with a probable average copper content of 34 pounds per ton, the figures including 5,000,000 tons in the shovel and fire areas. This gives a total future production of about a billion pounds of copper, --- practically the same as the production of the mine from its discovery to date."
"Other mines have vastly greater reserves, the speaker said, citing as examples the Inspiration with reserves of 72,400,000 tons containing 1,700,000,000 pounds of copper, and Chili, with 690,000,000 tons containing 29,000,000,000 pounds of copper."
"VALUATION: Mr. Smith placed the present actual cash value of the property at from $25,000,000 to $30,000,000, based on the method which capitalizes both natural resources and effective management and operation. On this point, he gave as an illustration two adjoining farms, both of the same natural value and capacity, but one worked efficiently and effectively, the other neglected and mismanaged. The parallel, he said, is absolutely exact."
"TAXATION: The appraisal of industrial enterprise of every kind, Mr. Smith said, is usually on the replacement value of the land. The Arizona system of using earnings as the basis of appraisal of mining properties gets for the state every possible item to which it is entitled and if the same system should be applied to manufacturing plants the taxes would be unbearable. He cited the example of the Ford automobile plants which, he declared, would be taxed out of existence if the methods applied to mine assessments were applied to them."
"The taxes paid by the United Verde, he said, amount to 1.98 cents per pound of copper produced or $1.77 per ton of ore mined. This compares with the present labor cost of 4.12 cents per pound of copper. In other words, the taxes take one cent for every three-and-one-half cents paid to labor --- $1 for every $3.50 shift or $2 for every $7 shift."
"GLAD TO PAY: The mining companies, the speaker said, are glad to pay their due share of all taxes, and especially so if the moneys so raised are spent economically and efficiently on good government, good roads, good schools and other legitimate public activities."
"Referring to the share of the county highway burden borne by the United Verde, the speaker showed that the United Verde is paying 37 per cent of the cost of the roads --- $44,000 per year or $125 per day. This compares with the average payroll of $4,700 per day."
"In this connection, Mr. Smith spoke in highly complimentary terms of the services rendered the county highway commission after many blunders had been made and much unnecessary expense incurred in the earlier days of the construction program."
"CAPITAL EXPENDITURES: Mr. Smith went carefuly into the question of capital expenditures and showed that no such expenditure is justifiable unless it will pay for itself in five years. He spoke of the common failing of suggesting equipment which might effect a small saving but which would become worn out or obsolete long before it had paid for itself."
"As an example, he spoke of the frequently rumored intention of the company to build a new tunnel from the lower levels of the mine and showed that such an investment --- which would cost about $2,500,000 --- would, at the very outside, effect savings of only $130,000 a year."
"As an example of the very opposite effects, he cited the sinking of the No. 5 and No. 6 shafts, which cost approximately $1,400,000, but which effect actual savings of $247,000 per year, in addition to the greatest of all savings --- the elimination of fire hazard and the assurance of continuous operation. This, he said is the finest of all insurance against loss of life and also against loss of tonnage."
"ALL INTERESTS ARE ONE: In conclusion, Mr. Smith declared that whatever benefits the company benefits the employees as well and also that the converse of this is true --- that whatever benefits the men benefits the company also."
"He introduced an illuminating diagram showing the disposition of the proceeds of the 'United Verde pound of copper,' which is spent as follows: labor, 3.67 cents; fuel and power, 2.03 cents; supplies, 2.64 cents; freight on bullion, 7 cents; refining, 1.15 cents; taxes, 1.98 cents; and depreciation .5 cent."
(Verde Copper News; Jerome; Friday, February 2, 1923; page 1, columns 1-2; page 8, column 6.)