Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2007 Earnings Presentation
38 slides from Freeport-mcmoran's earnings presentation, Oct 24, 2007
Slide 1: Third Quarter 2007 Earnings Conference Call
[svi FREEPORT-McMoRan COPPER & GOLD INC. 3 Quarter 2007 é Earnings Conference Gall | ||P < \ \ BS j : ANY aX ele Ka Ss 7 James R. Moffett Richard C. Adkerson > LOS Chairman of the Board Chief Executive Officer he es Timothy R. Snider Kathleen L. Quirk ] President and Chief Executive Vice President -
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
ORT-McMoRan CO GOLD INC. Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we beleve may affect our performance Jn the future. Forward-looking statements are all statements other than historical facts, such as
Slide 3: Summary Highlights
LEEPORT-McMoRan COPE OLD INC SOU HIGGS: s Data 3Q06 Copper Consolidated Volumes (mm tbs) 324 Average Realization (per ib) $3.43 Gold Consolidated Volumes (0200's ozs) 478 Realization (per az) $609 Molybdenum Consolidated Volumes (mm tbs) N/A Realization (per ib) N/A Financial Results (in millions, e
Slide 4: Purchase Accounting Impacts
FREEPORT-McMoRau COPPER & GOLD INC, a = *s > Cul Au If (G in billions) Step-up in Assets Breakdown Historical Book Value $ 8.2 # jes & Inventories Step-up in Assets 17 —= cle Stockpiles Deferred Tax on Step-up (6.2) Goodwill 6.5 Purchase Price $25.8 Purchase Accounting Impacts @) millions) 1907 2Q07
Slide 5: 3Q07 Operating Highlights
FREEPORT-McMoRau COPPER & GOLD INC, 3Q07 Operating Highlight ts Operating Data 3Q06 Pro Forma 3Q07 Copper Consolidated Volumes (mm /bs) @? 922 949 Average Realization (per ib)@ $3.32 $3.53 Net Unit Cash Cost (per /b) $0.77 $1.05 Gold Consolidated Volumes (000°s ozs) 510 269 Realization (per az) $608
Slide 6: 3Q07 Unit Production Costs
FREEPORT-McMoRau COPPER & GOLD INC, SQUY Unit Production Gosts. (per pound of copper} North South Cash Unit Costs America America Indonesia Consolidated Site Production & Delivery “ $1.40 $0.98 $1.76 $1.31 Royalties 0.00 0.00 0.10 0.02 Treatment Charges 0.09 0.24 0.34 0.20 By-product Credits (0.66)
Slide 7: Markets Overview
Eu FREEPORT -McMORan COPPER & GOLD INC. 000’s Metric Tons $800 $700 $600 $500 $400 $300 $200 $100 80 Markets Overview Tio LME & COMEX Exchange Stocks* Jan QQ Julg9 Jan-00 JuL00 Jan-Of Jul! Jang? lM? Jan 43 Ju “UME and! Comex, excluding Shanghai stocks, procucer, consumer and merchant stocks. London
Slide 8: 2007 Outlook
FREEPORT-McMoRau COPPER & GOLD INC, ZO07 Ouliook » Pro Forma Sales Outlook “): « Copper: 3.9 Billion Ibs. ¢ Gold: 2.3 Million ozs, ¢ Molybdenum: 68 Million Ibs. » Modeled Operating Cash Flows (2): « «$6,2 Billion for 2007 e ~$1,3 Billion in 4Q07 > Capital Expenditures: ~ $1.9 Billion for 2007 > Year
Slide 9: Strong Financial Profile
PORT-McMoRAw CO GOLD INC. > Str a Financial Profle Strong Financial Promle. ul au Capitalization, Net of Cash (GS in billions) $36.2 $55.7 At Closing of PD Current 2) Acquisition © {if} Based on March 19, 2007 sock price of $81.58 per share and! 358 milion fuly luted shares. (2) Based on October 23,
Slide 10: Major new mine in Arizona
¢ Major new mine in Arizona Engineering and procurement complete with construction well advanced and 87% compkte ¢ SX/EW facility start-up scheduled by year-end 2007; ramp-up in 1HO8 240MM lbs Cu/year ¢ ~ $625MM project Mill operated at 38K t/d* in 3Q, ramping up to 54K t/d capacity Concentrate Leac
Slide 11: Development Project Update: Climax Mine Restart
FREEPORT-McMoRau COPPER & GOLD INC, ot Update Development Project North America Climax Mine Restart = Completing Feasibility Study for the restart of Climax moly mine near Leadville, Co = «$500 million “brownfield” project with open pit operation/ construction of new mill with potential restart by 2
Slide 12: Development Project Update: South America
GOLD INC. PORT -McMoRan CO evelopment Project Soul America © «$900MM project completed in 4Q06 Operated at capacity during the third quarter Adds 430MM lbs/ year aggregate e Large sulfide mineral deposit underlying current oxide pit Environmental impact study submitted to Chilean Government = e Exte
Slide 13: Development Project Update: Grasberg Expansions
ruU fect Update Z Ce DOZ Expansions - Completed 50K Expansion in mid-2007; record production of 56K t/d in 3Q - Further expansion to 80K Completed 89% of tunneling (Common Infrastructure) required to reach Grasberg Block Cave ¢ Initiate mine development activities at Grasberg Block Cave in 1HO8 ¢ Bi
Slide 14: Development Project Update: Tenke Fungurume
ORT-MchoRan COP OLD INC. SSS ooo evelopment Projec Democrauc REpubiic Of Congo s/cul{Au Ii Engineering — 55% complete & procurement — about 70% complete Construction — 15% complete. Bulk earthworks substantially complete at plant site & shop areas and concrete started New capital cost estimate of $9
Slide 15: Copper Reserves & Mineralized Material
ORT-McMoRan COF GOLD INC. Copper Reserves & Minecralizea Material \ Cu An TA Reserves* Mineralized Material** (billion Ibs of recoverable copper) (billion Ibs of contained copper) A 146 94 $2.00 “an Potential for additional 94 bilign tbs: 69 to 146 billion Ibs Consolidated copper reserves; 77.2 bili
Slide 16: Exploration Opportunities
RI-McMORan COPE GOLDING. > Rights to 2.2 » Highly prospective exploration areas provide opportunities to continue to add to our long-lived reserves Tenke Fungurume, Dem Republic of Congo » Believed to be largest undeveloped, high grade copper/cobalt project in the world today » Less than half of 600
Slide 17: Exploration Drives the Mine Plan
i Cus Au iMor Aggregate 2007e Exploration: ~$135 million Exploration Drives the Mine Plan North America Lone Star & Morenci Africa Tenke Indonesia Fungurume Deep Grasberg, & Kisanfu Kucing Liar, & other targets outside of Block A e = estimate. Pleare see cactionary statement Australasia & Other Area
Slide 18: Pro Forma Sales Volumes
; 4 -_ 3.9 - o ai Forma Forma* ; 1 60 || : ~* 4 o o 2006 2007E 2008E 2009E 2006 2007E 2008E 2009E cal salad Forma Forma* Tore asolaned opper sales include apprsinately 540 sun ls in 2008, £50 mm lisp 20070, [720s fs. £008 298 760 0) 9 20088 Sor minosty tere excl purchased copper. °° 20078 icles pre-
Slide 19: Quarterly Pro Forma Sales Volumes
F-w FREEPORT-McMoRan COF 4,200 1,026 1,010 949 jaa 875 600 200 é t 1907 2Q07 3Q07 4Q07E Pro Forma* ‘iter Consldated copper sales inclu aporesimately 158 mm fs in 1007, 164 mo len 2007, 468mm sin 2007 and 168 mm bain 8Q07@ For minosty interes; excludes purchased copper ** 4007 inkudes pre-scquistion
Slide 20: Pro Forma 2007 Sales and Unit Production Costs
ORT-MchoRan COP OLD INC. Proforma 200/72 sales and Unit: PI OGUCHIOIN GOSTS: dite GIO s/Cut Au IY 2007e Pro Forma Sales by Region 24 4115 on Cu Au Cu Au mom Ibs sim oz¢ | mom Ibs sim 28 | North South (per pound of copper} America America Indonesia Consolidated Cash Unit Costs“ 7 = = = Site Productio
Slide 21: EBITDA and Operating Cash Flow at Various Copper Prices
ORT-MchoRan CO LD INC. EBIIDAVaniG Gasii1JOW, i ab VaWOus GOPPET ICES} ($700 Gold & $20 $12) (US$ billions) $10 Cu $2.50/Ib Cu $3.00/Ib Cu $3.50/Ib Average Annual Operating Cash Flow 2008e-2009e ($700 Gold & $20 Molybdenum) $8 (US$ billions) $6 $4 $2 $0 Cu $2.50/Ib Cu $3.00/Ib Cu $3.50/Ib ‘ie Pas ni
Slide 22: Sensitivity to Commodity Prices
ORT-McMoRan COF GOLD INC. SEMSILIVILY LO COMMMOULY TICES trey.) Annual Financial Impa Net Change EBITDA Income "3 “(US$ millions) Copper: -/+ $0.20/Ib $850 $490 $575 Molybdenum: -/+ $2.00/Ib $140 $100 $100 Gold: -/+ $50/ounce $90 $45 $50 Wiotez Annual fnancialimpact based on estimatec annual sales f
Slide 23: Capital Expenditures
TMcMoRan Cl OLD INC. Capital EXPEngieures, Carine (uss billions) $2.5 | Major Projects @ All Other $2.0 $15 $1.0, $0.5 $0.04 2007e* 2008e 2009e "Includes PD expenditures beginning March 20, 2007 ‘Note: Includes capitalzed interest. e = estimate, Please see cautiona'y statement. 23
Slide 24: Debt Maturities at 9/30/07
$8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 FREEPORT-McMoRau COPPER & GOLD INC, DeprMatiiues at 9/50/07 (US$ millions) $1,362 $344 $381 $25 $45 $48 $21 ——| $15 iz 2007 2008 2009 2010 2011 2012 2013 2014 ocredt Facilities Public Debt BAIl Other Debt Thereafter 24
Slide 25: Average Annual Excess Cash Flow 2008e-2009e
ORT-McMoRan COF GOLD INC. Average Annual Excess GasiF/OW. 7) ZO08E—2009e) »/Cul/Au [Nr (@ in billions, except copper, gold and molybdenum prices) 5 pe ” Copper Sensitivities with g $700 Gold/$20 Molybdenum 2944 2 Available for 5 3 J debi reduction/ ¢ § shareholder & returns é E 32 | = 3 is ea é $0 -
Slide 26: Financial Policy
FREEPORT-McMoRau COPPER & GOLD INC, Financial. : PONGY, » FCX is Committed to Maintaining a Strong Financial Position » Continuation of Positive Copper Markets is Expected to Provide Substantial Cash Flows = Investments in Projects With Attractive Returns = Debt Reduction * Shareholder Returns » Com
Slide 27: Reference Slides
Slide 28: Grasberg District Ore Bodies
PORT-McMoRan COPPER & GOLD INC. Grasberg District Ore Bodies 1H 2008 Grasbert Complete tunnel to Grasberg BC Begin mine development & other facilities Grasberg Block Cave “Spur” Lower access to Big Gossan initiated (currently at BG terminal) September 2007 5.2 km* from the Portal (initiated Grasberg
Slide 29: Grasberg Open Pit Mid-2007
La ¥ L, * i. Grasverg Open PIt i Mid=2007 s/cul{Au Ii TMcMoRan Cl GOLD INC. 29
Slide 30: PT-FI Mine Plan: Share of Metal Sales
LEP ORT_McMoRan| COPI OLD INC PT-Fi Mine Plan PITS Share of Metal Sales, Z007e- 20112 f Veatiau iMor Copper, billion lbs Gold, million ozs 2007e — 2011e PT-Fi Share 2007e - 2014e PT-Fi Share Total: 6.1 billion ibs Total: 9.1 million ozs Annual Average: 1.22 billion ibs Annual Average: 1.8 million oz
Slide 31: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in| 2007 i Copper Equivalent Cross Section “Cul Aw Iu: A B Following a mine-out of the high-grade section of GN in 1H07, 7S is the Primary Ore Pushback in 2007 ;;2 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% Cu
Slide 32: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2007 i Copper Equivalent Cross Section “Cul Aw Iu: A B Following a mine-out of the high-grade section of GN in 1H07, 7S is the Primary Ore Pushback in 2007 ;;2 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuE
Slide 33: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2007 i Copper Equivalent Cross Section sCullAul lV A B Following a mine-out of 6N in 1H07, 7S is the Primary Ore Pushback in 2007 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J 3
Slide 34: Mining Sequence in 2007
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2007 i Copper Equivalent Cross Section /culAu Iv A B Following a mine-out of 6N in 1H07, Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq a4
Slide 35: Mining Sequence in 2008
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2008 i Copper Equivalent Cross Section Shr MiMo! A B 7S is the Primary Ore Pushback in 2008 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J 5
Slide 36: Mining Sequence in 2009
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2009 i Copper Equivalent Cross Section Shr MiMo! A B 7S and 8E/8S are the Primary Ore Pushbacks in 2009 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J 36
Slide 37: Mining Sequence in 2010
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2010 i Copper Equivalent Cross Section Shr MiMo! A B 8E/8S is the Primary Ore Pushback in 2010 Leaend: mm 0.25 - 0.99% CuEq MB 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mm >3.00% CuEq J a
Slide 38: Mining Sequence in 2011
FREEPORT-McMoRau COPPER & GOLD INC, Mining) Sequence in 2011 i Copper Equivalent Cross Section “Cul Au lve A B 8E/8S and 9N are the Primary Ore Pushbacks in 2011 25 - 0.99% CuEq = 1.99% CuEq = 2.99% CuEq 3.00% CuEq * ON is in ore north of this cross-section. Me ag eS" : J 38
Freeport Mcmoran Copper & Gold — Q3 2007 Earnings Presentation on 6ix