Show eastern stock market circles are surfeited with utah copper ray chino inspiration A few days ago press dispatches were telling of the plans looking to the merger of ray consolidated and chirio chino with inspiration on the the boston commercials copper letter edited by J F carey discusses the absorption of utah copper by and then tackles the ray chino inspiration merger in considerable detail all of which indicates that the gravitation of the big coppers toward their ultimate destination referred to in the mining review many months ago and boo hobed all around is still being considered the commercials copper letter says utah copper in the statement reviewed in last weeks issue of the copper letter has probably issued its last quarterly report now has all but a very small por of utah capital stock and the offer made a few weeks ago to the minority shareholders is likely to bring the remainder in in in that case utah operations would be consolidated with those of and the former would probably issue no more statements utah in spite of the unfavorable metal conditions which prevailed in the first nine months of 1924 was nevertheless able to show the full years dividend earned in the period b by y a small margin third quarter net was after taxes and depreciation equivalent to a share on the shares outstanding earnings for the nine months were equivalent to a share costs in the third quarter increased surprisingly over the level in the preceding three months being 94 cents a pound in the third period as against but 86 cents in the second selling level obtained in the third quarter was much better than in the second however being 1313 cents pound abound against 1285 cents in the second utah production of pounds of copper in the first nine months of j the current year was the largest for any similar period since since the war inspiration ray consolidated i rumors of an approaching merger between ray consolidated soli dated and inspiration have been current for some time f past but a considerable period is likely to elapse before the joining oni fig together of these two companies is is accomplished it is ls understood that no recent moves in the direction of r consolidation have been made undoubtedly the task of arg riving at a basis on which the merger of the two properties I 1 rould equit suitably equitably abl y be effected will be a difficult one prop 1 MY y values lues ore reserves and other physical and financial it assets sets of each company must be put in the balance and weighed sighed one against the other before the terms of merger 19 can n reasonably son ably be decided upon 11 ray ay and inspiration will in all probability be merged if ev or as soon as an equitable basis for the consoli Y da tion on can be reached however it appears unlikely that V merger 4 can take place until quotations for ray and inspire tion shares tta come much nearer approaching the rela relative tive val aes ues rul of the two properties than is now the case with ray as ruling J around 16 and inspiration at about 29 IV than ray ore cre reserves ves at the present time are much larger 11 II mine min those u 1 0 of f inspiration aspiration ray has developed at its ray 11 v AT about tons of ore which average 2 yo cop ra per loo at the chino mine there are developed approximately this chish s tons of ore averaging 1570 15 copper As against t hu ge total of developed ore in the ray chino proper i its of be develop developed ed III i the 1 l tons there are estimated to at althou alahn properties about tons of ore h inspiration does not divulge the grade of its ore reserves they are estimated to contain about 14 to yo 15 copper from the angle of ore reserves and comparative lengths of life therefore a merger between the two companies should be much more one of ray taking over inspiration than the reverse assuming the exchange of all chino shares for ray the outstanding capitalization of the latter would be shares inspiration has the smaller outstanding capital of ni shares however inspiration shares have a par value of 20 while par of ray stock is but 10 a share on the basis of 20 par value for the shares of both companies number of outstanding ray shares would be as against actual outstanding shares for inspiration of 1181 while on this basis ray has a slightly greater outstanding shares capitalization the difference is more than made up for its tremendously larger reserve of ore as compared with inspiration advantages all on ray side on the above basis or figuring both the ray and inspiration outstanding capital at the same par value 20 ray has approximately 52 tons of ore averaging 2 copper fineable mine able by underground methods and 66 tons of steam shovel 1570 15 copper ore developed per outstanding share as against but 52 tons of 14 to 1570 15 copper ore developed per share for inspiration ore of inspiration is fineable mine able only by the underground method the advantage is all rays taken on the basis of actual outstanding share capital for each company or for ray when all chino stock has been exchanged and shares for inspiration ore reserves figure out this way ray has 26 tons of 2 underground and 33 tons of 1570 15 steam shovel ore for each share outstanding as against but 52 tons of 14 to 1570 15 underground ore for each outstanding share of inspiration the advantage is still rays ray s neither company has any bonded debt or any other security having precedence over the outstanding capital stock inspiration has a slightly lower producing cost than ray but the latter will be improved in this respect when certain improvements to plant and properties now contemplated ar are e effected ray chino is in good financial condition with ample funds for prosecuting improvements inspiration now has under way a new leaching plant to cost in the neighborhood of ray has an andua annual I 1 producing capacity of of including the chino output ag against ainest the copper pounds of about inspiration operating capacity as now constituted pounds annual annually lyt on the basis of ray shares to be outstanding with final exchange of chino and actual outstanding inspiration stocks stock annual capacity producing figures come to 90 pounds of copper a share for inspiration for ray however on the basis against 55 a share a year issue rays annual per of 20 per value for each stock the share output is greater than inspirations and moreover P advantage on the actual outstanding latter batters lat s producing is share basis assuming all chino exchanged for ray largely offset by the much stronger ray cash position rays present mor monthly italy copper output is approximately pounds while inspiration is turning out about inspirations operations 0 on n this output monthly anthly pounds mo while ra ray is of capacity y are being carried on at a bout about 90 operating a at t but 70 officials have stated recently and inspiration both ray bertics if it cyer comes is still properties that merger of the two prop months away and that it is no nearer than was the case several months ago A ray official also intimates that any such ratio as two of ray for one of inspiration would be absurd from the above comparison it would appear that the best inspiration could expect would be three of ray for two of inspiration should ray and inspiration merge it is entirely likely that other southwestern copper producers might also wish to join them which would thus create a copper producing agency to be compared in importance with chile and utah |