Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q3 2022 Earnings Presentation
32 slides from Freeport-mcmoran's earnings presentation, Oct 20, 2022
Slide 1: FCX Conference Call 3rd Quarter 2022 Results
FCX Conference Call 3rd Quarter 2022 Results October 20, 2022
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
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 plans, projections, or expectation
Slide 3: 3Q22 Highlights
3Q22 Highlights 3Q22 July • Strong production and sales performance Key Stats Actual Estimate o Copper & gold sales: Copper Sales (mm lbs) 1,060 1,020 ‒ 4% & 20% above July 2022 guidance Gold Sales (k ozs) 480 400 ‒ 3% & 19% above 3Q21 actuals Unit Net Cash Costs ($/lb) $1.75 $1.67 • Unit net cash c
Slide 4: Current Copper Market Conditions
Current Copper Market Conditions Price Insufficient to Support New Mine Supply Development Inventories Cu Price (metric tons) ($/lb) Copper Structurally Supported by 1,500,000 $5.00 Copper Price Favorable Long-term Fundamentals 1,200,000 $4.50 • Physical demand remains strong Incentive Price: $4.25*
Slide 5: 3Q22 Mining Operating Summary
3Q22 Mining Operating Summary Sales From Mines for 3Q22 & 3Q21 by Region North America South America (2) Indonesia (3) 406 378 476 361 375 399 293 280 (1) (1) 20 17 Cu Mo Au mm lbs mm lbs 000 ozs 3Q22 3Q21 3Q22 3Q21 3Q22 3Q21 3Q22 3Q21 3Q22 3Q21 North South 3Q22 Unit Net Cash Costs (per lb of Cu) Am
Slide 6: PT-FI: Sustaining the World's Largest & Most Modern Underground Operation
PT-FI ‒ Successfully Sustaining the World’s Largest & Most Modern Underground Operation Mill Rate (000’s t/d) Copper Sales (mm lbs) Gold Sales (k ozs) 197 410 406 474 476 187 189 181 378 370 379 157 399 392 406 143 310 124 258 302 256 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22
Slide 7: Advancing New Leach Technologies
Advancing New Leach Technologies Taking Leach to the Next Level ● Industry leader with long history of leach production Copper in Leach Stockpiles ● Internal and external initiatives to advance sulfide Unrecoverable by leaching technologies and to drive continuous recovery improvement Traditional Le
Slide 8: Annual Sales Profile
Annual Sales Profile October 2022 Estimate Copper Sales (billion lbs) Gold Sales (million ozs) 5 2 1.8 1.7 * 1.6 4.3 * 1.4 4.2 4.2 4 3.8 1 3 0 2021 2022e 2023e 2024e NOTE: Consolidated gold sales include 253k ozs in 2021, 333k ozs in 2022e, 873k ozs in 2023e and 820k ozs in 2024e for noncontrolling
Slide 9: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices ($ in bns except copper, gold and molybdenum prices) Sensitivities EBITDA l ($1,700/oz gold, $18/lb molybdenum) Average ’23e/’24e (US$ in mms) $16 EBITDA $12 Copper +/-$0.10/lb $425 $8 Molybdenum +/-$1.00/lb $ 80 Gold +/-$50/oz $ 80 $4 Average ’23e/’24e
Slide 10: Consolidated Capital Expenditures
Consolidated Capital Expenditures Excluding Indonesia Smelter Projects CAPEX (1) ($ in bns) $ Net of Scheduled Contributions $3.3 $2.7 Discretionary Discretionary $0.4 $2.5(2) $1.0 $1.9 Planned Planned (2) (3) $1.7 $1.4 $1.2 (3) Major Projects $1.3 Other $0.6 $0.9 $1.1 2021 2022e 2023e (1) See slide
Slide 11: Solid Balance Sheet and Liquidity
Solid Balance Sheet and Liquidity Attractive Debt Maturity Profile (US$ bns) $8 Total Debt & Cash at 9/30/22 Open Market Debt Retirements $7.6 FCX Revolver $ - FCX/FMC Senior Notes 7.6 • Purchased ~$1.1 bn of Sr. Notes in open market 5.315% PT-FI Senior Notes 3.0 during 2022, including $0.4 bn in 3Q
Slide 12: Financial Policy
Financial Policy Cash returns Priorities to stockholders • Executing performance-based payout framework o Up to 50% Free Cash Flow(1) to be returned to shareholders o Balance available to advance organic growth opportunities • $2.7 bn in cash returned to shareholders since achievement of Net Debt ta
Slide 13: Executing Clearly Defined Strategy Focused on Copper
Executing Clearly Defined Strategy Focused on Copper Responsible Experienced producer of scale management team Long-lived Strong reserves balance sheet Embedded Cash returns growth options for shareholders 13
Slide 14: The Future
THE FUTURE fe =o = aa TT = Le
Slide 15: Reference Slides
ELECTRIFYING THE FUTURE Reference Slides
Slide 16: Copper – Metal of the Future
Copper – Metal of the Future Critical to Global Decarbonization Global Decarbonization is Expected to Drive Intensity of Copper Use More than 65% of the Renewable energy world’s copper is used technologies use four to in applications that five times more copper deliver electricity than fossil fuel p
Slide 17: S&P Global Copper Study Published in July 2022
S&P Global Copper Study Published in July 2022 Key takeaways from independent study led by Dan Yergin as project chairman • Copper — the “metal of electrification” — is essential to all energy transition plans • Copper demand is projected to grow from 25 million metric tons (MMt) today to about 50 M
Slide 18: The Copper Mark
The Copper Mark Recognition for Responsible Production COPPER MARK STATUS BY SITE: AWARDED Assurance framework developed to demonstrate the copper industry’s Atlantic Copper smelter & Miami smelter, mine & responsible production practices refinery (Spain) rod mill (AZ) Bagdad mine (AZ) Morenci mine
Slide 19: Financial Highlights
Financial Highlights Sales Data 3Q22 3Q21 Copper Consolidated Volumes, excluding purchases (mm lbs) 1,060 1,033 Average Realization (per lb) $ 3.50 $ 4.20 Site Production & Delivery Costs (per lb) $ 2.35 $ 1.88 Unit Net Cash Costs (per lb) $ 1.75 $ 1.24 Gold Consolidated Volumes (000’s ozs) 480 402
Slide 20: 2022e Operational Data
2022e Operational Data 2022e Sales by Region North America South America Indonesia 1,471 1,570 1,150 (2) (1) 1.8 76 Cu Mo Au mm lbs mm lbs mm ozs North South 2022e Unit Net Cash Costs (3) (per lb of Cu) America America Indonesia Consolidated Site Production & Delivery, excl. adjs.(4) $2.58 $2.54 $1.
Slide 21: 2022e Outlook
2022e Outlook Sales Unit Net Cash Operating Capital Outlook Cost of Copper Cash Flows (2) Expenditures • Copper: 4.2 billion lbs • Site prod. & delivery • ~$4.7 billion(3) @ • $2.7 billion (4) (excluding o 2022e: $2.20/lb $3.50/lb copper for smelter projects (5)) • Gold: 1.8 million ozs 4Q22e o 4Q22
Slide 22: Reconciliation of 2022e Unit Net Cash Cost Guidance
Reconciliation of 2022e Unit Net Cash Cost Guidance ($ and ¢ per pound of copper) July 2022e October 2022e 2022e Site Production Guidance Guidance Costs Breakdown Price Assumptions Impacts Price Assumptions $3.25 Cu / $1,700 Au / $3.50 Cu / $1,700 Au / Other $16 Mo $18 Mo Acid 10%*** Materials 6% Si
Slide 23: 2022e Quarterly Sales
2022e Quarterly Sales Copper Sales (million lbs) Gold Sales (thousand ozs) 1,200 500 476 480 409 420 1,087 1,060 400 1,024 1,020 300 1,000 200 100 800 0 1Q22 2Q22 3Q22 4Q22e Note: Consolidated gold sales include 76k ozs in 1Q22, 89k ozs in 2Q22, 600 89k ozs in 3Q22 and 79k ozs in 4Q22e for noncontro
Slide 24: PT-FI Mine Plan Metal Production, 2021 – 2026e
PT-FI Mine Plan Metal Production, 2021 – 2026e Copper 2022e – 2026e Gold 2022e – 2026e Total: 8.0 billion lbs copper Total: 8.0 million ozs gold Annual Average: ~1.6 billion lbs Annual Average: ~1.6 million ozs 1.8 1.8 1.7 1.7 1.6 1.6 1.6 1.5 1.5 1.4 1.3 1.2 Cu Au bn mm lbs ozs 2021 2022e 2023e 2024
Slide 25: Future Growth Embedded in Existing Asset Base
Future Growth Embedded in Existing Asset Base Provides Increased Leverage to Copper Prices New Leach Bagdad Lone Star El Abra Kucing Liar Technologies Expansion Expansions Expansion Grasberg District Americas Arizona Arizona Chile Indonesia • Advancing sulfide • Double concentrator • Near-term oxide
Slide 26: Lone Star Update
Lone Star Update Oxides Sulfides 2P Reserves: 4.9 billion lbs Mineral Potential: ~50 billion lbs (3) 120 (1) ● Success of oxide development advances 96 opportunity for scale Low capital 75 intensity ● Design to incorporate combined leach and investment concentrate facilities – similar to Morenci in
Slide 27: Indonesia Downstream Processing Activities
Indonesia Downstream Processing Activities Greenfield Smelter PT Smelting Expansion Precious Metals Refinery (PMR) • 1.7 mm mt of annual concentrate capacity • 30% increase to existing smelter to add • To be constructed to process gold and 300,000 mt of annual concentrate capacity silver from greenf
Slide 28: Indonesia Downstream Processing Update
Indonesia Downstream Processing Update Preliminary Estimate of Spending on Greenfield Smelter PT-FI’s Downstream Commitment and PMR to be shared 51% / 49% (PT Inalum/FCX) (2) ($ in bns) ● PT-FI committed in 2018 IUPK to construct 2 mm tpy in-country Cu concentrate processing capacity $1.7 o Greenfie
Slide 29: Discretionary Capital Projects
Discretionary Capital Projects* Kucing Liar Grasberg Mill Recovery Project ● Commenced long-term mine development activities ● Installing new copper cleaner circuit ● Approximate 10-year development timeframe ● Improved Cu concentrate grades/metal recoveries ● Sustain large-scale, low-cost Cu/Au pro
Slide 30: 3Q22 Copper Realization & 4Q22e Guidance
3Q22 Copper Realization & 4Q22e Guidance 3Q22 LME Average $3.51/lb Copper Price 3-Mo. Fwd Price for Copper $3.46/lb at the End of September $3.50/lb FCX 3Q22 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end of period) FCX 3Q22 Prior Period Rev
Slide 31: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in mm) 12 mos ended 3Q22 9/30/2022 Net income attributable to common stock $404 $3,877 Interest expense, net 140 594 Income tax provision 315 2,336 Depreciation, depletion and amortization 508 2,072 Metals inventory adjustments 25 44 Net gain on sales of assets - (1
Slide 32: Freeport
FREEPORT FOREMOSTYN COPPER