Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2012 Earnings Presentation
47 slides from Freeport-mcmoran's earnings presentation, Jan 22, 2013
Slide 1: 4th Quarter 2012 Earnings Conference Call
4 Quarter 2012 “\._ Earnings Conference Call
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
FrReepont-McMoRan |Coprer & Goo Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as th
Slide 3: Additional Information about the Proposed Transactions and Where to Find It
FrReepont-McMoRan COPPER & GOLD Additional Information about the Proposed Transactions and Where to Find It EXP th connection with the proposed transaction, FCX has filed with the SEC a registration statement on Form 5-4 that includes a preliminary proxy statement of PXP that also constitutes a pros
Slide 4: 2012 Highlights
FrReepont-McMoRan COPPER & GOLD 2012 Highlights = Production Growth in North America and Africa = Unusually Low 2012 Ore Grades in Indonesia — Expect Significant Increases in 2013 and Beyond = Advanced Financially Attractive Brownfield Development Projects + Tenke Phase II Substantially Complete * C
Slide 5: Financial Highlights
FrReepont-McMoRan COPPER & GOLD Financtal Highlights Sales Data 4Q12 4Q11 Consolidated Volumes (mm Ibs) 972 823 Average Realization (per Ib) $3.60 $3.42 Site Production & Delivery Unit Costs (per Ib) $2.04 $1.96 Unit Net Cash Costs (per Ib) $1.54 $1.57 Gold Consolidated Volumes (000's ozs) 254 133 A
Slide 6: Quarterly Operating Highlights
FrReepont-McMoRan COPPER & GOLD Quarterly Operating Highlights 4Q12 Unit Production Costs (per pound of copper) North South America America Indonesia —_Africa Consolidated Cash Unit Costs Site Production & Delivery $2.00 $1.67 $2.91 $1.38 $2.01 By-Product Credits (0.35) (0.29) (1.93) (0.21) (0.65) T
Slide 7: Update on Grasberg Mine
FReepont-McMoRan COPPER & GoLD Update on Grasberg MMe e Unusually low metal production in 2012 compared with historical levels = Lower grades in Grasberg open pit = DOZ ramp-up: panel repairs more extensive — expect 80K t/d by year- end 2013; current rate: 50K t/d = Mine sequencing/geotechnical fact
Slide 8: Markets
FrReepont-McMoRan COPPER & GOLD Markets 2,500 500 2,000 400 £ : 5 ‘9 1500 z 300 & = LME Copper Price 2 @ g 3, 1,000 200 H 2 8 500 Global Exchange Stocks* 100 Jan- Jub Jan Jul Jan Jue Jan- Jub Jan Jul Jan- Jub Jan- Jub Jan- Jul Jan- Jue Jan- Jul Jan- 0 03 04 04 05 05 06 06 07 07 08 08 o9 09 1 10 11 M
Slide 9: Copper Market Commentary
FrReepont-McMoRan COPPER & GOLD Copper Market Commentary /7 = China Remains Important Demand Driver - Economy Showing Signs of Strengthening - Potential for Further Stimulus = Improving U.S. Demand - Healthy Automotive Sector - Recovering Housing Sector = European Demand Remains Weak = Global Invent
Slide 10: Preliminary Reserves at 12/31/12
FReepont-McMoRan CopPER & GoLD Preliminary Reserves at 12/31/12 Consolidated Proven & Probable Reserves Reserves @12/34/11° Additions/revisions*® Production Net change Reserves @12/31/12” * as % of 2012 production Reserves @ 12/31/06” Additions/revisions* Production Net change Reserves @ 12/31/12 *
Slide 11: Copper Reserves & Mineralized Material
FReepont-McMoRan COPPER & GOLD Copper Reserves & Mineralized Material La i LIAL ISLE MiG billion Ibs of copper 12/31/12 230 Mineralized Material ©) by Geographical Region Mineralized 113 Material ‘) billion (contained copper) Ibs North America 52% 117 at $2.20 Cu price South / Indonesia America / 17
Slide 12: Potential Future Reserve Additions
FReepont-McMoRan corren & Go.n Potential Future Reserve Additions Mi? Potential R Additi eserve Additions Key Targets +40-50 billion Ibs Cu El Abra Other SA Ajo Twin Buttes Lone Star Kisanfu 2
Slide 13: World Class Copper
FReepont-McMoRan COPPER & GoLD World Class Copper Million metrictons 0 5 10 15 20 25 30 © 200 400 600 00 1000 1200 Grasberg Complex- 1988 Escondida - 1979 econo — —— _— Ld KGHM Polish Copper - 1957 Cananea-1926 ElTeniente- 1910 Colahuasi-1979 LosPelambres- 1996 Andina - 1865 Los Bronces - 1867 ElTen
Slide 14: Highly Attractive Brownfield Copper Development Projects
FReeport-McMoRAN corns Highly Attractive Brownfield Copper Development Projects /7 Incr. Cu Capital* Achieve Mill Expansions (t/d) (om lbsie) (bins) Full Rates Cerro Verde (360K) 600 $4.4 2016 Morenci (115K) 225 14 2014 Tenke (14K) 0.9 2013 TOTAL * excludes capitaized interest + Underground uth Amer
Slide 15: Volume Growth with Brownfield Projects in Progress
FReepont-McMoRan eorrnz€ Vote Growth with Brownfield Projects in Progress Mn? Copper (billion Ibs per year) 2015e-2020e 5.0+ v. 2012 +15%+ Proven Technology Capital efficiency Economies of scale Risks better understood North America 2012 2013e-2014e 2015e-2020e Average Average e= estimate. See Cauti
Slide 16: Brownfield Development: Morenci Mill Expansion
FREepont-McMoRan CoppER & GoLo B rown fie ld De velopme t GA 7 TMC Morenci MillExpansion _// Key Project Metrics Positive drilling results continue to expand potential milling sulfide resource in this multi-year program Expand mill to 115K t/d Copper (bin Ibs ) Increase mining rate to 900K st/d 27.0
Slide 17: Brownfield Development: Cerro Verde Mill Expansion
FREepont-McMoRan cone’ Brownfield Development Cerro Verde Mill Expansion Key Project Metrics © Expand mill from 120K t/d to 360K t/d ° Increase mining rate from 320K t/d to 850K t/d Capital costs: ~$4.4 billion* Incremental Production: 600mm Ibs Cu/year, 15mm Ibs Mo/year Reserve Life: ~90 years curr
Slide 18: Brownfield Development: Tenke
E FREepont-McMoRan =V5 Copper & GOLD Brownfield Development zg Key Project Metrics Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: $850 million* Incremental Production: 150mm Ibs Cu/year Substantially complete — on time & within Budget Explo
Slide 19: Cobalt Refinery Acquisition
FReepont-McMoRan COPPER & GoLD Cobalt Refinery Acquisition Enhances market position as world’s largest producer of cobalt Initial purchase consideration of $325mm = Potential for additional consideration of up to $110mm over three years, contingent on achieving certain revenue targets Ownership: 56%
Slide 20: Grasberg Underground Development
FReepont-McMoRan COPPER & GOLD Gri asber g Underground Development ¢ Significant development progress * To-date, completed 73 km of development in Grasberg BC & 46 km in DMLZ ¢ Current activities include work on ore flow systems & Grasberg BC shaft ¢ Development capital = $6.7 bin for Grasberg BC &
Slide 21: 2013 Outlook
FrReepont-McMoRan COPPER & GOLD 2013 Outlook* > Sales Outlook: © Copper: 4.3 Billion Ibs. ¢ Gold: 1.4 Million ozs. e Molybdenum: 90 Million Ibs. > Unit Net Cash Cost: $1.35/Ibin 2013e * $1.67/Ibin 1913e > Operating Cash Flows”: $7 Billion (@$3.65/lb Copper) ° Includes $450 Million in Net Working Cap
Slide 22: Growing Production Profile
FrReepont-McMoRan COPPER & GOLD Growing Production Profile Copper Sales (billion Ibs; 5.0+ Gold Sales (million ozs} 5 2 1.8 18 14 10 4 1 3 0 2012 2013e 2014e 2015e TEE CETTE sates nce apprise H0dkces 202, Ok sn 2128, 175K Sin Soe and bees 20d fr encontong oo 2 Molybdenum Sales (million Ibs) 300 1 95
Slide 23: 2013e Quarterly Payable Metal Sales
FrReepont-McMoRan COPPER & GOLD 2013e Quarterly Payable Metal Sales Co, 1,250 1,000 750 500 250 2Q13e 3Q13e 4Q13e ince sporomataly 175 mm lis 138 195 mm lbs in 2013 25 mm ibs in 40138 ernoncontoling itary evcuces 2 = estimate, See Cautionary Statement. eno. 515 345 #00, 290 230 200 o + 2Q13e 3Q13e 4
Slide 24: 2012 and 2013e Sales by Region
FrReepont-McMoRan COPPER & GOLD 2012 and 2013e Sales by Region North America America Indonesia 1,351 716 336 og : 09 95(2) Cu Co Mo nil Au = pore fm pa os a sm 2013e Sales by Region North America South Am: Indonesia 1445 1,325 1,120 1.24 my 14012) 410 Co mmibs (2) Includes molybdenum producedin Sout
Slide 25: 2012 and 2013e Unit Production Costs by Region
FrReepont-McMoRan COPPER & GOLD 2012 and 2013e Unit Production Costs by Region 2012 (perpound of pee) Amerita America Indonesia Africa__Consolidated Cash Unit Costs ————__ ee Site Production & Delivery $1.91 $1.60 $3.12 $1.49 $2.00 By-product Credits (0.36) (0.26) (2.22) (0.33) (0.69) Treatment Char
Slide 26: Reconciliation of Consolidated Unit Cash Costs
FrReepont-McMoRan Seeren econ Reconciliation of Consolidated Unit Cash Costs “a 2012 148¢ Grasberg (a) (17) Tenke (b) (2) North America (c) 6 Total (13) 2013e 135¢ Impact of Higher 2014e Grasberg Volumes (20) 2013e With Higher Grasberg Volumes 115¢ (a) higher volumes (copper up 56%, gold up 36%) par
Slide 27: EBITDA and Cash Flow at Various Copper Prices
FrReepont-McMoRan COPPER & GOLD EBITDA and Cash Flow at Various Copper Prices Average EBITDA* ($1,500 Gold & $12 Molybdenum) $18) (US$billions) 515 sap i ~50% so Increase | $6 a 7 | so Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1,500 Gold &
Slide 28: Sensitivities
FrReepont-McMoRan COPPER & GOLD Sensitivities Operating Change EBITDA Cash Flow (USS milfions) Copper: -/+ $0.10/Ib $405 $275 Molybdenum: -/+ $1.00/Ib $80 $65 Gold: -/+ $50/ounce $75 $45 Diesel: -/+ 10% $95 $70 Purchased Power”: -/+ 10% $55 $40 Currencies@: +/- 10% $150 $115 (2) $3.60/gaon base case
Slide 29: Exploration Targets in Major Mineral Districts
FReepont-McMoRan rere cee Exploration Targets in Major Mineral Districts $235 million in 2013e Other Areas — 11% Indonesia Atslea 20% 26% Note: FOX's consolidated share; e = estimate. See Cautionary Statement, Approximately 1/3” of our 2013 budget is associated with greenfield exploration projects 2
Slide 30: Capital Expenditures
FrReepont-McMoRan COPPER & GOLD Capital Expenditures © I Major Mining Projects 2 i Other Mining (Uss billions) $55 $4.6 $4.4 $4) $3.0 $3 | $2 | $15 $05 2013e 2014e 2015e (Q). Estates indude projectsin progress; exclude estimates from pending acquisitons. Project szending wil continue to be reviewed
Slide 31: Recent Acquisitions — Why Now?
FrReepont-McMoRan COPPER & GOLD Recent Acquisitions — Why Now? = Positive Long-Term Global Economic Outlook = Limited Opportunities to Invest in Copper Beyond Brownfield Expansions = Attractive Opportunity to Acquire High Quality Assets - Strong Margins and Cash Flows (Self-funding Growth) - Financi
Slide 32: Enhanced Geographic & Commodity Diversification
FrReepont-McMoRan Enhanced Geographic & |Coprer & Goo Commodity Diversification 2013e EBITDA j Existing Pro forma North America 48% Indonesia 8% i Bie Indonesia 23% (1) Based on pricing assumptions of $3.50/b Cu, $1,500/0z Au, $12/1b Mo, $100/0b! Oil (Brent) and $4.50/MMotu natural gas. & = estimate
Slide 33: Pro Forma Cash Flow at Various Copper Prices
FrReepont-McMoRan COPPER & GOLD $25 $20 $15 | 2015e/ | 2016e | | Avg. | $5 $0 $3.00 $3.50 $4.00 $3.00 $3.50 $4.00 Copper Prices Copper Prices $1,500 Au/$12 Mo/$100 oil/$4.50 Gas $1,500 Au/$12 Mo/$100 Oi/$4.50 Gas (Brent) (Brent) * Excludes working captal changes e = estimate. See Cautionary Statemen
Slide 34: Focused and Disciplined Capital Allocation Philosophy
FrReepont-McMoRan Focused and Disciplined COPPER & GOLD Capital Allocation Philosophy Maintain Strong Balance Sheet & Credit Profile Allocate Capital to Low Cost, Long-lived, Expandable Assets Rigorous Economic Analysis Under Range of Assumptions Prioritize & Rank Opportunities Limit Number of Proje
Slide 35: Financial Policy
FrReepont-McMoRan COPPER & GOLD Financial Policy « Maintain Strong Balance Sheet & Liquidity Position = Reduce Debt Incurred in Acquisitions Using Projected Substantial Cash Flows Generated from Combined Business = Invest in Projects with Strong Financial Returns/Capital Discipline « Anticipate Cont
Slide 36: Combined Company Highlights
FrReepont-McMoRan COPPER & GOLD Combined Company Highlights Creates A Premier U.S. Based Natural Resources Producer World’s Largest Publicly Traded Copper Producer Significant Producer of Oil, Gold & Molybdenum Significant Long-term Natural Gas Resources Strong Margins & Cash Flows High Quality, Lon
Slide 37: Reference Slides
Reference Slides
Slide 38: Mine Plan
FrReepont-McMoRan COPPER & GOLD PT- Mine Plan PT-FI‘s Share of Metal Sales, 2013e-2021e Mu 2013e — 2017e PT-FI Share | Total: 5.9 billion Ibs copper Annual Average: 1.18 billion Ibs 2013e — 2017e PT-FI Share Total: 8.3 million ozs gold Annual Average: 1.66 million ozs 1.7 1.7 di 4 1.2 Wy 2013e 2014e
Slide 39: Grasberg Open Pit
|FREEPoRT-McMoRAN Copren s Gown Ss Grasberg Open Pit
Slide 40: Mining Sequence in 2013
| FReepont-McMoRan CopPeR & Goto Mining Sequence in 201 - Z ZF Copper Equivalent Cross Section ff / Hi 9Nand 9S are the Pamary Ore Pushbacks In 2013; 9S —_ LEGEND
Slide 41: Mining Sequence in 2013
FReepont-McMoRAN [E=valcoprer & Goo Mi . = = ining Sequence in 2013 ss Copper Equivalent Cross Section f 477 Mil 9Nand 9S are the Pamary Ore Pushbacks In 2013; 9S
Slide 42: Mining Sequence in 2013
FReepont-McMoRAN [E=valcoprer & Goo Mi . = = ining Sequence in 2013 ss Copper Equivalent Cross Section f 477 Mil 9Nand 9S are the Pamary Ore Pushbacks In 2013; 9S 3Q13 LEGEND
Slide 43: Mining Sequence in 2013
FReepont-McMoRAN [E=valcoprer & Goo Mi . = = ining Sequence in 2013 ss Copper Equivalent Cross Section f 477 Mil 9Nand 9S are the Pamary Ore Pushbacks In 2013; 9S
Slide 44: Mining Sequence in 2014
FReepont-McMoRAN a [E=valcoprer & Goo Mining Sequence in 2014 Z Z Fag Copper Equivalent Cross Section ff / a Lil 9Nand 9S are the Pamary Ore Pushbacks In ZOT4 Grasberg Plan View LEGEND
Slide 45: Mining Sequence in 2015
FReepont-McMoRAN a COPPER & GOLD Mining Sequence in 2015 Z Z Ze Copper Equivalent Cross Section ff / ff 7 ov 9515 the Pramary Ore Pushbackin 2015) Grasberg Plan View LEGEND 0.25 - 0.99% CuEq * 1.00 - 1.99% CuEq fl 2.99% CuEq .00% CuEq
Slide 46: Mining Sequence in 2016
FReepont-McMoRAN a COPPER & GOLD Mining Sequence in 2016 Z Z Ze Copper Equivalent Cross Section ff / ff 7 ov 95815 the Primary Ore Pushbackin 2016; Grasberg Plan View LEGEND 0.25 - 0.99% CuEq * 1.00 - 1.99% CuEq fl 2.99% CuEq .00% CuEq
Slide 47: Site Operating Costs by Category
FReepont-McMoRan COPPER & GOLD Site Operating Costs by Category Consolidated Materials — ’ 32% Manpower | 29% — 2012 2013e Note: e = estimate. See Cautionary Statement. éz
Freeport Mcmoran Copper & Gold — Q4 2012 Earnings Presentation on 6ix