Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport-McMoRan Copper & Gold — CLSA AsiaUSA Forum 2010
29 slides from Freeport-mcmoran's conference presentation, Mar 3, 2010
Slide 1: AsiaUSA Forum 2010
AsiaUSA Forum 2010 San Francisco, CA Kathleen L. Quirk Executive Vice President & Chief Financial Officer March 3, 2010 www.fcx.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we believe may affect our performance in the future. Forward-looking statements are all statements other than historical facts, such as statements regarding pro
Slide 3: Core Assets
Core Assets Long-Lived Reserves with Growth Potential Geographically Diverse Operations Financially Strong Flexible Operating Structure Experienced Team Focused Strategy 3
Slide 4: World's Leading Copper Producers
World’s Leading Copper Producers Top 10 Copper Producers (2009E) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX BHP Billiton Xstrata Rio Tinto Anglo Southern KGHM Polska RAO Norilsk First Quantum American Copper Miedz ____________________ Source: Brook Hunt 4Q09 Report. Ra
Slide 5: World Class Copper Discoveries Are Extremely Rare
World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2009e Copper Production Million metric tons 0 5 10 15 20 25 Thousands metric tons 0 200 400 600 800 1,0 0 0 Grasberg Complex - 1988 Escondida - 1979 KGHM Polish Copper - 1957 Chuquicamata - 1910 Escondida - 1979 Grasberg C
Slide 6: Geographically Diverse
Geographically Diverse Major Mine Operations & Development Projects All major assets majority-controlled and operated North North America America11 Copper Reserves Copper/Gold/Silver Cu 27.7 billion lbs Mo 2.1 billion lbs Molybdenum Sales Cobalt Grasberg (90.64%) Cu 1.0 billion lbs Reserves Mo 60 mi
Slide 7: 2009 Highlights
2009 Highlights Successful Execution of Revised Operating Plans Strong Operating & Financial Performance Strengthened Balance Sheet Enhanced Financial and Liquidity Position Successful Start-up of Tenke Operations Added Reserves Maintained Future Growth Opportunities Reinstated Annua
Slide 8: Strong Operating & Cost Performance 2009
Strong Operating & Cost Performance 2009 Strong Volumes Actual 2009 sales volumes higher and unit costs lower Access to High-Grade than January estimates* Section of the Grasberg Open Pit Cu +5% (211 mm lbs) Solid Results in the Au +20% (439 k ozs) Americas Unit Cash Costs -23% (16¢/lb)
Slide 9: 4Q09 & 2009 Highlights
4Q09 & 2009 Highlights Sales Data 4Q09 2009 Copper Consolidated Volumes (mm lbs) 989 4,111 Average Realization (per lb) $3.20 $2.60 Site Production & Delivery Unit Costs (1) (per lb) $1.25 $1.12 Unit Net Cash Costs (1) (per lb) $0.62 $0.55 Gold Consolidated Volumes (000’s ozs) 551 2,639 Average Real
Slide 10: Preliminary Reserves at 12/31/09
Preliminary Reserves at 12/31/09 Consolidated Proven & Probable Reserves 12/31/09 Copper Molybdenum Gold billion lbs billion lbs million ozs Copper Reserves by Geographical Region Reserves @ 12/31/08 102.0 2.48 40.0 Additions/revisions* 6.3 0.16 (0.1) Production (4.1) (0.05) (2.7) Net change 2.2 0.1
Slide 11: Core Assets
Core Assets Preliminary Consolidated Copper Reserves 104 billion lbs of Copper Reserves at 12/31/09 +6.3 billion lbs of net additions North 27.7 America Reserves: 27.7 Additions: 0.6 Additions at Morenci Africa Reserves: 8.4 34.1 Additions: 2.6 34.0 Replaced over 10x South annual production rate Ame
Slide 12: Copper Reserves & Mineralized Material
Copper Reserves & Mineralized Material Preliminary Estimates as of 12/31/09 122 104 at $1.60 at $2.00 copper price copper price Reserves (a) Mineralized Material (b) (billion lbs of (billion lbs of contained copper) recoverable copper) (Incremental to Reserves) (a) Consolidated copper reserves using
Slide 13: Markets
Markets 2,000 400 1,750 350 1,500 300 000’s Metric Tons Cents Per Pound LME Copper Price 250 1,250 1,000 200 750 150 500 100 250 50 LME & COMEX Exchange Stocks* 0 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Ju
Slide 14: 2010 Outlook
2010 Outlook Sales Outlook: • Copper: 3.8 Billion lbs. • Gold: 1.8 Million ozs. • Molybdenum: 60 Million lbs. Unit Net Cash Cost (1): • 86¢/lb Operating Cash Flows (2): • $5.3 Billion, net of $0.4 Billion in W/C Uses • Assumes $3.25/lb Copper • Each 10¢/lb Change in Copper = $260 MM in 2010
Slide 15: Development Projects Update
Development Projects Update Morenci Concentrator North America Miami Mine Restart Morenci Mill Restart South America El Abra Sulfolix Cerro Verde Expansion Cerro Verde Concentrator Indonesia – Underground Development Grasberg Grasberg open openpit pit DOZ Expanded to 80,000 t/d Grasberg Gr
Slide 16: Tenke Fungurume
Tenke Fungurume Construction activities complete SAG Mill Achieved design production rates on Cu; start-up issues on Co circuit continue to be addressed At full rates (initial phase), aggregate annual metal of 250MM lbs Cu & 18MM lbs Co During 4Q09, sold 64MM lbs Cu & 2MM lbs Co Exploratio
Slide 17: Exploration Targets in Major Mineral Districts
Core Assets Exploration Targets in Major Mineral Districts Safford/Lone Star/Morenci District South Cerro Verde America North 21% Exploration America Tenke Fungurume/Africa in 2010e 30% Africa $100 million 19% 5% 25% Grasberg/Indonesia Indonesia Australasia & Other Areas Note: FCX’s consolidated sha
Slide 18: Sales Profile 2007 - 2011e
Sales Profile 2007 - 2011e Gold Sales (million ozs) Copper Sales (billion lbs) 3 2.6 2.3 5 1.9 2 1.8 1.3 4.1 4.1 1 3.9 4 3.8 3.8 0 2007 2008 2009 2010e 2011e Pro Forma* 3 ____________________ Note: Consolidated gold sales include approximately 228 k oz in 2007, 134 k oz in 2008, 256 k oz in 2009, 18
Slide 19: 2010e Quarterly Payable Metal Sales
2010e Quarterly Payable Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 1,250 800 675 1,090 600 490 385 400 1,000 960 280 890 200 860 0 1Q10e 2Q10e 3Q10e 4Q10e 750 ____________________ Note: Consolidated gold sales include approximately 50 k oz in 1Q10e, 25 k oz in 2Q10e, 40 k oz in
Slide 20: 2009 and 2010e Sales by Region
2009 and 2010e Sales by Region 2009 Sales by Region (1) North America South America Indonesia 1,394 1,400 1,187 2.5 58 Au mm ozs Cu Mo Cu 0.1 Cu Au mm lbs mm lbs mm lbs mm lbs mm ozs 2009 2009 2009 2009e 2009 2009 2010e Sales by Region (1) North America South America Indonesia 1,290 1,230 1,040 1.7
Slide 21: 2009 and 2010e Unit Production Costs by Region
2009 and 2010e Unit Production Costs by Region 2009 North South (per pound of copper) America America Indonesia Consolidated (3) Unit Cash Costs Site Production & Delivery (1) $1.25 $1.08 $1.05 $1.12 By-product Credits (0.23) (0.11) (1.86) (0.77) Treatment Charges 0.09 0.15 0.22 0.16 Royalties (1) -
Slide 22: Reconciliation of Unit Cash Costs
Reconciliation of Unit Cash Costs Consolidated (excluding Tenke) ¢ per lb of copper 2009 55¢ Grasberg, primarily lower volumes (a) 27 North America (b) 2 South America (c) 2 Total 31 2010e 86¢ (a) lower projected sales volumes and higher commodity-based input costs; copper and gold volumes are 12% a
Slide 23: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices 2010e/2011e Average EBITDA ($1,000 Gold & $10 Molybdenum) $10 (US$ billions) $8 $6 $4 $2 $0 Cu $2.50/lb Cu $3.00/lb Cu $3.50/lb 2010e/2011e Average Operating Cash Flow (excluding Working Capital changes) ($1,000 Gold & $10 Molybdenum) $8 (US$ billions) $
Slide 24: Sensitivities
Sensitivities Operating Change EBITDA Cash Flow (US$ millions) Copper: -/+ $0.10/lb $375 $260 Molybdenum: -/+ $1.00/lb $55 $45 Gold: -/+ $50/ounce $90 $50 Diesel (1): -/+ 10% $45 $30 Purchased Power (2): -/+ 10% $40 $25 Currencies (3): +/- 10% $120 $70 ____________________ (1) $2.00/gallon base case
Slide 25: Capital Expenditures
Capital Expenditures (1) Major Projects All Other (US$ billions) $3.0 $2.7 $2.5 1.1 $2.0 $1.6 $1.7 $1.5 $1.3 0.6 0.9 $1.0 1.6 0.8 (2) $0.5 1.0 0.8 (3) 0.5 (3) $0.0 2008 2009 2010e 2011e (1) Capital expenditure estimates will continue to be reviewed and revised subject to market conditions. (2) Inclu
Slide 26: Balance Sheet
Balance Sheet (US$ billions) Significant Liquidity $20 (1) $17.6 Strong Credit Metrics $15 No Near-term Maturities Total Debt $10 $7.4 $6.3 $5 $0 At Time of PD Acquisition 12/31/08 12/31/09 in March 2007 Cash $3.4 $0.9 $2.7 Net Debt $14.2 $6.5 $3.7 (1) Pro Forma year-end 2006 total debt of $1.
Slide 27: FCX Debt Maturities 12/31/09
FCX Debt Maturities 12/31/09 $6,000 (US$ millions) Total Debt & Cash at 12/31/09 $5,000 (US$ billions) Public Debt $6.2 Other Debt 0.1 $4,000 $3,922 Total Debt $6.3 Consolidated Cash $2.7 8.375% Senior Notes $3,000 and PD $2,299 Senior Notes Floating $2,000 Rate & 8.25% Senior Notes $1,000 $16 $93 $
Slide 28: Financial Policy
Financial Policy Maintain Strong Balance Sheet & Liquidity Position Aggressive Cost Management Invest in Attractive Growth Projects as Economic Conditions Warrant Opportunistic Debt Repayment Board Action to Reinstate Common Stock Dividend: $0.60/share per annum Board to Review Financial
Slide 29: FCX Investment Summary
FCX Investment Summary World’s Premier Publicly Traded Copper Company World’s Largest Molybdenum Producer & Significant Gold Producer Long-lived Reserves, Geographically Diverse Operations Flexible Operating Structure Can Respond to Varying Market Conditions Significant Reserve Growth 29
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