New York, April 4, 1928

To the Stockholders and Directors of the

New York and Honduras Rosario Mining Company.

Gentlemen:

Your company has done a satisfactory business during the year
1927. While it is not possible to report as large a production as
during the years immediately preceding, the results are over the
2,000,000 ounce mark in silver, a record which the company has
consistently maintained including and since 1923. The production
for 1927 was 2,165,225.53 ounces silver and 5584.233 ounces gold,
compared with 1926, which was 2,468,911.07 ounces silver and
5561.05 ounces gold. The reduction in the silver production is
explained by our General Manager, as follows:

The production of silver in the past year fell somewhat short
of expectations. As already explained in other parts ot this re¬
port, it was due to much of the ore coming from the margins of
the principal ore bodies where less constancy in vein width and
valuable content resulted in lower tonnage output per man and
lower milling grade. Inability to extend the mining of ore over
the night shift owing to shortage of labor prevented the drop in
grade being made up by production of a larger tonnage. The
1927 silver production, however, should be looked upon with some
satisfaction, because though not equal to that of 1926, it must not
be forgotten that 1926 was a banner year in the 47 years' operating
history of the property.

In appraising the results of last year's business as reflected in
our financial statements which I am making a part of this report,
it must be borne in mind that the market price of silver has made
a recovery whichyjhas;,brought it to a figure comparable with those
of the past five years. A single illustration will be sufficient when
I compare the realized price of 1926—$.6021 with that of 1927 of
$.5662, or a difference of |.0359 on the product of this last year.