Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q3 2023 Earnings Presentation
30 slides from Freeport-mcmoran's earnings presentation, Oct 19, 2023
Slide 1: FCX Conference Call 3rd Quarter 2023 Results
FCX Conference Call rd 3 Quarter 2023 Results October 19, 2023 fcx.com
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements in which FCX discusses its potential future performance, operations and projects. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections, or expectations relating t
Slide 3: 3Q23 Highlights
3Q23 Highlights 3Q23 July Key Stats Actual Estimate • Solid operational performance Copper Sales (mm lbs) 1,109 1,030 o Copper sales: 8% above July 2023 estimate Gold Sales (k ozs) 399 420 o Gold production of 532k ozs exceeded sales (timing) Unit Net Cash Costs ($/lb) $1.73 $1.61 • Unit net cash co
Slide 4: Copper Market Commentary
Copper Market Commentary Inventories Cu Price Copper Structurally Supported by (metric tons) ($/lb) 1,500,000 $5.00 Favorable Long-term Fundamentals • Rising interest rates, US$ strength and global Copper Price geopolitical and macro-economic uncertainty 1,200,000 $4.50 impacting sentiment • Exchang
Slide 5: 3Q 2023 Operations Update
3Q 2023 Operations Update Strong execution North America South America Indonesia Leach Innovation Initiatives Cerro Verde Grasberg o 46 mm lbs Cu in 3Q23; over 3x 3Q22 o 3Q23 Mill Rate: 431k tpd o 3Q23 Mill Rate: 207k tpd o 90% of YE 2023 targeted annual run rate ‒ Quarterly record ‒ Commissioned ne
Slide 6: Organic Development Pipeline
Organic Development Pipeline FCX Copper Reserves (1) 111 bn lbs FCX Copper Resources (1) 235 bn lbs Near-Term Medium-Term Long-Term Potential Leach Innovation Potential Step Change in Safford / Lone Star Sulfides Initiatives Leaching Technology ~50 bn lbs ~200 mm lbs* ~600 mm lbs* Mineral Potential
Slide 7: Annual Sales Profile
Annual Sales Profile October 2023 Estimate Copper 5.00 Gold 2 1.74 1.8 1.6 Sales Sales 4.2 4.2 (billion lbs) 4.06 (million ozs) 4.00 1 0 3.00 2023e* 2024e* 2025e NOTE: Consolidated gold sales include 826k ozs in 2023e, 922k ozs in 2024e and 820k ozs in 2025e for noncontrolling interests. 2.00 Moly 1
Slide 8: 2023e Operational Data
2023e Operational Data 2023e Sales by Region North America South America Indonesia 1,489 1,373 1,194 (2) (1) 1.74 80 Cu Mo Cu Cu Au mm lbs mm lbs mm lbs mm lbs mm ozs North South 2023e Unit Net Cash Costs (3) (per lb of Cu) America America Indonesia Consolidated Site Production & Delivery (4) $2.98
Slide 9: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices Assuming $1,900/oz gold, $20/lb molybdenum Sensitivities Average ’24e/’25e ($ in bns except copper, gold and molybdenum prices) (US$ in mms) EBITDA $16 EBITDA $12 Copper +/-$0.10/lb $420 Molybdenum +/-$1.00/lb $ 80 $8 Gold +/-$50/oz $ 80 $4 Average Curre
Slide 10: Consolidated Capital Expenditures
Consolidated Capital Expenditures Excluding Indonesia Smelter Projects CAPEX (1) ($ in bns) $3.9 $3.2 Discretionary Discretionary $2.7 $1.3 $0.6 Discretionary Major Planned Projects (2) Planned Planned $1.7 (2) $1.1 (2) $1.3 $1.4 Other Other Other $1.0 $1.3 $1.5 2022 2023e 2024e (1) See slide 28; In
Slide 11: Indonesia Manyar Smelter Project Update
Indonesia Manyar Smelter Project Update Smelter Project Site View Northwest to Southeast ~84% Complete with Commissioning Expected in 2024 NOTE: See slide 28 for additional details. See Cautionary Statement. 11
Slide 12: Progress on Climate Initiatives
Progress on Climate Initiatives Grasberg Transition to LNG Cerro Verde Renewable Energy • Advancing plans to transition existing energy • Entered into a new renewable energy power source from coal to liquefied natural gas (LNG) purchase agreement in 3Q23 • Plan to develop 265MW gas-fired combined •
Slide 13: Financial Policy: Performance-Based Payout Framework
Financial Policy: Performance-Based Payout Framework ~50% free cash flow(1) for shareholder returns Maintaining Strong Providing Cash Returns Advancing Organic Balance Sheet to Shareholders Growth Opportunities Net Debt/Adjusted EBITDA $3.6 bn Distributed Less than 1x Since 6/30/21 • Positioned for
Slide 14: Responsible producer of scale, long-lived reserves
Responsible Experienced producer of scale management team Long-lived Strong balance reserves sheet Embedded Cash returns growth options to shareholders
Slide 15: Foremost in Copper
FOREMOST IN COPPER
Slide 16: Reference Slides
THE POWER OF COPPER Reference Slides FREEPORT FOREMOST IN COPPER
Slide 17: The Copper Mark
The Copper Mark Recognition for Responsible Production AWARDED SITES • Assurance framework developed to demonstrate the copper industry’s Atlantic Copper smelter & Henderson mine (CO) responsible production practices refinery (Spain) Miami smelter, mine & rod Bagdad mine (AZ) mill (AZ) • Producers p
Slide 18: Financial Highlights
Financial Highlights Sales Data 3Q23 3Q22 Copper Consolidated Volumes, excluding purchases (mm lbs) 1,109 1,060 Average Realization (per lb) $ 3.80 $ 2.50 Site Production & Delivery Costs (per lb) $ 2.27 $ 2.35 Unit Net Cash Costs (per lb) $ 1.73 (1) $ 1.75 Gold Consolidated Volumes (000’s ozs) 399
Slide 19: 3Q 2023 Mining Operating Summary
3Q 2023 Mining Operating Summary Sales From Mines for 3Q23 by Region North America South America (2) Indonesia (3) 430 406 372 361 476 307 293 395 (1) 20 17 (1) Cu Mo Au mm lbs mm lbs 000 ozs 3Q23 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 3Q22 North South 3Q23 Unit Net Cash Costs (per lb of Cu) Americ
Slide 20: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Attractive Debt Maturity Profile (US$ bns) $8 Total Debt & Cash at 9/30/23 Significant liquidity FCX Revolver $ - ▪ $5.7 bn in consolidated cash and cash equiv. (1) FCX/FMC Senior Notes 6.4 $6.4 PT-FI Senior Notes 3.0 ▪ $3.0 bn in availability under FCX credit faci
Slide 21: 2023e Outlook
2023e Outlook Sales Unit Net Cash Operating Capital Outlook Cost of Copper Cash Flows (1,3) Expenditures • Copper: 4.06 billion lbs • Site prod. & delivery • ~$5.4 billion(4) @ $3.60/lb • $3.2 billion (excluding o 2023e: $2.38/lb copper for 4Q23e smelter projects(5)) • Gold: 1.74 million ozs o 4Q23e
Slide 22: 2023e Quarterly Sales
2023e Quarterly Sales Copper 1200 1,109 Gold 600 580 1,085 495 Sales 1,029 Sales 450 399 (million lbs) 1000 (thousand ozs) 270 300 832 150 800 0 1Q23 2Q23 3Q23* 4Q23e NOTE: Consolidated gold sales include 74k ozs in 1Q23, 252k ozs in 2Q23, 203k ozs in 600 3Q23 and 297k ozs in 4Q23e for noncontrollin
Slide 23: Leach Initiatives Gaining Traction
Leach Initiatives Gaining Traction Further Innovation Significant Operational Initiatives to Build Scale Potential Heat – Proven Enhancer Turning Up the Heat Copper in Leach • Covers installed on over 30% (47 mm ft 2) • Evaluating heated injections using Stockpiles Unrecoverable 30% of leach areas r
Slide 24: Autonomous Haulage at Bagdad
Autonomous Haulage at Bagdad • Bagdad expected to become first U.S. mine with a fully autonomous haulage system • Converting existing manned fleet to 100% autonomous o ~30 trucks o CAPEX ~$55 mm o Target completion 3Q25 • Reduces human exposure to active mining areas • Potential for efficiency gains
Slide 25: PT-FI Mine Plan
PT-FI Mine Plan Metal Production, 2022 – 2027e Copper 2023e – 2027e Gold 2023e – 2027e Total: 8.1 billion lbs copper Total: 8.0 million ozs gold Annual Average: ~1.6 billion lbs Annual Average: ~1.6 million ozs 1.9 1.9 1.8 1.7 1.6 1.6 1.6 1.6 1.6 1.6 1.3 1.3 Cu Au bn mm lbs ozs 2022 2023e 2024e 2025
Slide 26: Discretionary Capital Projects
Discretionary Capital Projects* Kucing Liar Lone Star Oxide Expansion ● Commenced long-term mine development activities ● Low capital intensity investment in 2022 ● Capital investment: ~$300 mm (~$70 mm in 2023e) ● Approximate 10-year development timeframe ● Increase stacking rate: 95k t/d to 120k t
Slide 27: Combined Cycle Gas Turbine (CCGT) Power Plant at PT-FI
Combined Cycle Gas Turbine (CCGT) Power Plant at PT-FI Offshore • Completed Feasibility Study to replace existing coal LNG Carrier plant at Grasberg with 265MW gas-fired combined-cycle LNG transfer facility Floating Storage & • Targeted start date in 2027 Regas Unit (FSRU) Subsea gas pipeline • ~$1
Slide 28: Indonesia Downstream Processing Activities
Indonesia Downstream Processing Activities Greenfield Smelter (Manyar) Precious Metals Refinery (PMR) PT Smelting Expansion • 1.7 mm mt of annual concentrate capacity • To be constructed to process gold and • 30% increase to existing smelter to add • Designed to be world’s largest single line flash
Slide 29: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 12 mos ended ($ in mm) 3Q23 9/30/2023 Net income attributable to common stock $454 $2,157 Interest expense, net 96 555 Income tax provision 508 2,103 Depreciation, depletion and amortization 533 1,994 Metals inventory adjustments 5 (7) Accretion and stock-based compens
Slide 30: Foremost in Copper
FOREMOST IN COPPER