Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — Macquarie's 7th Annual Global Metals & Mining Conference 2013

29 slides from Freeport-mcmoran's conference presentation, Dec 11, 2013

  1. Slide 1: Global Metals & Mining Conference

    EXPANDING RESOURCES Global Metals & Mining Conference Kathleen L. Quirk Executive Vice President & CFO December 11, 2013 www.fcx.com

  2. Slide 2: Cautionary Statement Regarding Forward-Looking Statements

    EXPANDING RESOURCES 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 projections or

  3. Slide 3: FCX – A Premier U.S. Based Natural Resource Company

    EXPANDING RESOURCES FCX – A Premier U.S. Based Natural Resource Company  World’s Largest Publicly Traded Copper Producer  High-Quality U.S. Based Oil & Gas Assets  Strong Margins & Cash Flows  Visible and Predictable Organic Growth  Strong Technical Capabilities  Track Record of Capital Discip

  4. Slide 4: FCX's Global Footprint

    EXPANDING RESOURCES FCX’s Global Footprint Major Operations & Development Projects North America1 All major mining assets majority-controlled and operated Reserves Cu 38.8 bn lbs Mo 2.7 bn lbs Copper Oil & Gas 688 MMBOE2 Sales Copper/Gold/Silver Cu 1.44 bn lbs Molybdenum Mo 92 mm lbs3 Grasberg (90.6

  5. Slide 5: Geographic & Commodity Mix

    EXPANDING RESOURCES Geographic & Commodity Mix (1) 2014e EBITDA North Mining America 73% 51% South America 17% Africa Oil & Gas Indonesia 27% 8% 24% (1) Based on 2014e EBITDA of ~$10.5 bn assuming annual pricing of $3.25/lb Cu, $1,300/oz Au, $10/lb Mo, $100/Bbl Oil (Brent) and $4.50/MMbtu natural ga

  6. Slide 6: World's Leading Copper Producers

    EXPANDING RESOURCES World’s Leading Copper Producers Top 10 Copper Producers (2013e) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX Glencore BHP Billiton Rio Tinto Southern KGHM Anglo Antofagasta RAO Norilsk Xstrata Copper American ____________________ Source: Wood Mackenz

  7. Slide 7: Copper Market Commentary

    EXPANDING RESOURCES Copper Market Commentary  China Remains Important Demand Driver - Large Consumption Base Growing at a Sustainable Rate  Continued Improvement in U.S. Demand - Automotive Production and Sales Back to Pre-crisis Levels - Improving Construction Activity  European Demand Bottomed

  8. Slide 8: World Class Copper Discoveries Are Extremely Rare

    EXPANDING RESOURCES World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2013e Copper Production Million metric tons Thousand metric tons 0 5 10 15 20 25 30 0 200 400 600 800 1000 1200 1400 1979 Escondida - 1979 1979 Escondida - 1979 Grasberg Complex - 1988 Chuquicamata - 19

  9. Slide 9: Visible Organic Growth

    EXPANDING RESOURCES Visible Organic Growth Mining Oil & Gas  Targeting 5+ Billion Pounds  Production Targeted to Double Annual Cu Production by 2015 Over Next 5 Years (37% Increase from 2012)  Substantial Production Capacity  Advanced Stage Brownfield from Existing Deepwater Development Infrastr

  10. Slide 10: Copper Reserves & Mineralized Material

    EXPANDING RESOURCES Copper Reserves & Mineralized Material as of 12/31/12 billion lbs of copper 12/31/12 230 Mineralized Material (b) by Geographical Region Mineralized 113 Material (b) billion (contained copper) lbs North 117 at $2.20 Cu price America 52% South Indonesia America Reserves 17% 19% 12

  11. Slide 11: Brownfield Development Projects

    EXPANDING RESOURCES Brownfield Development Projects Tenke Fungurume Cerro Verde Morenci Phase II Expansion Mill Expansion Mill Expansion $0.9 billion* $4.6 billion $1.6 billion • Completed on time & within budget • Commenced construction in 1Q13 • Construction in advanced stage • Incremental 150 mm

  12. Slide 12: Grasberg Update

    EXPANDING RESOURCES Grasberg Update • Improving productivity & performance metrics % 1H13 3Q13 change  Mill rates (K t/d) 157 198 +26%  Cu grades (%) 0.69 0.74 +7%  Au grades (g/t) 0.53 0.65 +23%  Unit net cash cost ($/lb) $1.95 $0.99 -49% PT-FI Sales 3.0 2013e 2013e-2016e Cu Au Cu Au 360 millio

  13. Slide 13: Oil & Gas Operating Assets

    EXPANDING RESOURCES Oil & Gas Operating Assets California 3Q 2013 Cash Operating Margin: Haynesville $1.1 Billion • Long Established Oil • Significant Gas Production History Haynesville/ Resource (5+ Tcfe) • Strong Margins and 2% Other • Preserving Rights Cash Flows for Potential California Improvem

  14. Slide 14: Deepwater Gulf Of Mexico

    EXPANDING RESOURCES Deepwater Gulf Of Mexico 3Q 2013 Deepwater GOM Production: 59,600 BOE/D Holstein Marlin Horn Mountain Capacity Capacity Capacity • 113,500 BOPD • 60,000 BOPD • 75,000 BOPD • 142,300 MCFD • 235,000 MCFD • 72,000 MCFD Truss SPAR: 149 ft. diameter Tension Leg Platform: Dry Truss SPA

  15. Slide 15: Ultra-Deep Activities

    EXPANDING RESOURCES Ultra-Deep Activities Lomond North Louisiana Lineham Creek England Davy Jones Blackbeard Area Barbosa Calico Jack  Industry Leading Position in Emerging Trend  Lomond North (72% WI) – Exploratory Well Onshore South La.  Drilling Below 27,500’ Towards PTD of 30,000’  2014 Comp

  16. Slide 16: 2013 Outlook

    EXPANDING RESOURCES 2013 Outlook  Sales Outlook: • Copper: 4.1 Billion lbs. • Gold: 1.1 Million ozs. • Molybdenum: 92 Million lbs. • Oil Equivalents(1): 37.5 MMBOE (~70% Oil)  Unit Cost: • $1.58/lb(2) of Copper in 2013e • $17/BOE  Operating Cash Flows (3): • ~$6 Billion (@$3.25/lb Copper in 4Q13)

  17. Slide 17: Production Profile

    EXPANDING RESOURCES Production Profile Gold Sales (million ozs) Copper Sales (billion lbs) 2 1.7 1.7 5.0+ 1.1 5 1 4.4 4.1 4 0 2013e ____________________ 2014e 2015e Note: Consolidated gold sales include approximately 110k ozs in 2013e, 170k ozs in 2014e and 170k ozs in 2015e for noncontrolling inter

  18. Slide 18: EBITDA and Cash Flow at Various Copper Prices

    EXPANDING RESOURCES EBITDA and Cash Flow at Various Copper Prices Average EBITDA ($1,300 Gold, $10 Molybdenum & $100 Oil) $24 (US$ billions) $18 +40% 2016e Increase $12 $6 2014e/2015e Average $0 Cu $3.00/lb Cu $3.50/lb Cu $4.00/lb Average Operating Cash Flow (excluding Working Capital changes) ($1,3

  19. Slide 19: Sensitivities (US$ millions)

    EXPANDING RESOURCES Sensitivities (US$ millions) 2014e/2015e Operating Change EBITDA Cash Flow Copper: +/- $0.10/lb $465 $325 Molybdenum: +/- $1.00/lb $80 $65 Gold: +/- $50/ounce $75 $45 Oil Sales:(1) + $10/bbl $405 $340 - $10/bbl (2) ($380) ($325) Oil Sales Net of Diesel Costs:(1,3) + $10/bbl $320

  20. Slide 20: Capital Expenditures

    EXPANDING RESOURCES Capital Expenditures (1) (US$ billions) $8 $6.7 $6.7 $6 $5.5 Oil & Gas 2.7 2.9 1.5 (2) $4 Major Projects 2.4 (3) TOTAL 2.9 2.6 $2 MINING 4.0 3.8 Other 4.0 (2) Mining 1.6 1.1 1.2 $0 2013e 2014e 2015e (1) Capital expenditure estimates include projects in progress. Project spending

  21. Slide 21: Committed to Balance Sheet Management

    EXPANDING RESOURCES Committed to Balance Sheet Management Strong Track Record  Debt Targeted at $12 Billion 9/30/2013 Balances Within 3-year Period ($ in bns)  Anticipate Continuing Current $20.4 Common Stock Dividend Rate: $18.2 $1.25/Share per Annum  Large Resource Base with Strong Cash Flows a

  22. Slide 22: Summary

    EXPANDING RESOURCES Summary A Strong & Focused Organization Maximize Total Shareholder Returns Strong Management of the Base  Operational Excellence  Achieve Production Targets  Effective Cost and Capital Management  Manage HS&E and Other Inherent Risks Return Driven Growth  Prioritize Highest

  23. Slide 23: Reference Slides

    EXPANDING RESOURCES EXPANDING RESOURCES Reference Slides

  24. Slide 24: 2013e Quarterly Payable Metal Sales

    EXPANDING RESOURCES 2013e Quarterly Payable Metal Sales Gold Sales (thousand ozs) 390 400 305 Copper Sales (million lbs) 300 214 173 1,250 200 1,120 100 1,041 0 1,000 954 951 1Q13 ____________________ 2Q13 3Q13 4Q13e Note: Consolidated gold sales include approximately 22k ozs in 1Q13, 18k ozs in 2Q1

  25. Slide 25: 2013e Operating Estimates

    EXPANDING RESOURCES 2013e Operating Estimates 2013e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated (3) Cash Unit Costs (1) Site Production & Delivery (2) $2.00 $1.56 $2.70 $1.45 $1.94 By-product Credits (0.24) (0.27) (1.58) (0.28) (0.53) Treatme

  26. Slide 26: 2nd Half 2013e Oil & Gas Operating Estimates

    EXPANDING RESOURCES 2nd Half 2013e Oil & Gas Operating Estimates Madden & Operating Cost: $1.65/Mcfe California Haynesville Pricing: NYMEX Operating Cost: $30/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Operating Cost: $13/bbl Eagle Ford Pricing: LLS Operating Cost: $14/bbl Pricing: LLS

  27. Slide 27: Deepwater Infrastructure Provides Subsea Tieback Opportunities

    EXPANDING RESOURCES Deepwater Infrastructure Provides Subsea Tieback Opportunities Texas Louisiana MARLIN HUB Breton Sound Main Main Pass S & E Add DORADO Pass West Cam PLATINUM Large Scale Infrastructure at SMI Eugene Isl. Viosca Knoll Marlin, Horn Mountain and East Cam N. Add West Grand South High

  28. Slide 28: Oil & Natural Gas Hedging Positions

    EXPANDING RESOURCES Oil & Natural Gas Hedging Positions Oil Hedges Indexed to Brent 4Q13 2014 2015 Collars Puts 25k Bbls/d 5k Bbls/d Unhedged Swaps $100 floor $90 floor 75k Bbls/d 30k Bbls/d $80 limit $70 limit $90 floor $95 floor 28% 40k Bbls/d $70 limit $75 limit @ $109.23 $124 Ceiling $126 Ceilin

  29. Slide 29: PT Freeport Indonesia

    EXPANDING RESOURCES PT Freeport Indonesia Grasberg Minerals District Life-of-Mine Production Sequencing* Plan View 258mm mt Grasberg Open Pit 0.90% Cu & 0.98 g/t Au 176mm mt Grasberg & DOZ 0.57% Cu & 0.71 g/t Au Kucing Liar Grasberg 54mm mt Big Gossan 2.26% Cu & 0.97 g/t Au open pit 517mm mt DMLZ De

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