Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2012 Earnings Presentation
40 slides from Freeport-mcmoran's earnings presentation, Oct 22, 2012
Slide 1: Third Quarter 2012 Earnings Conference Call
34 Quarter 2012 “\._ Earnings Conference Call
Slide 2: Cautionary Statement
FrReepont-McMoRan COPPER & GOLD Cautionary Statement This presentation contains forward-looking statements in which we discuss factors we believe may affect our potential future performance. Forward- looking statements are all statements other than statements of historical facts, such as statements
Slide 3: Highlights
FrReepont-McMoRan COPPER & GOLD Highlights Continued Production Growth in North America and Africa Multiple Operating Records at Tenke Fungurume Improving Productivity at Grasberg Advanced Brownfield Development Projects ¢ Construction of Tenke Fungurume Expansion 90% Complete ¢ Engineering and Cons
Slide 4: Financial Highlights
FrReepont-McMoRan COPPER & GOLD Financtal Highlights Sales Data 3Q12 9 Mos. 2012 Copper Consolidated Volumes (mm Ibs) 922 2,676 Average Realization (per Ib) $3.64 $3.63 Site Production & Delivery Unit Costs (per Ib) $2.03 $2.00 Unit Net Cash Costs (per Ib) $1.62 $1.46 Id Consolidated Volumes (000’s
Slide 5: Quarterly Operating Highlights
FrReepont-McMoRan COPPER & GOLD Quarterly Operating Highlights 3Q12 Unit Production Costs (per pound of copper) North South America America Indonesia —_Africa Consolidated Cash Unit Costs Site Production & Delivery $1.97 $1.63 $2.96 $1.63 $2.03 By-Product Credits (0.32) (0.25) (1.66) (0.48) (0.60) T
Slide 6: Markets
FrReepont-McMoRan COPPER & GOLD Markets 2,500 500 2,000 400 4 2 e 2 4,500 300 = LME Copper Price 2 a 2 3, 1,000 200 H 3 8 ° 100 ~~ Global Exchange Stocks* El Jan- Jub Jan Jue Jan- Jub Jan Jub Jan Juk Jan- Jub Jan) Jub Jan Ju Jan Jul Jan Jul 0% 03 «04 «OFS OS GSCiGC(i«‘i SCBCD a aa * Inchides LME, Co
Slide 7: Copper Market Commentary
FrReepont-McMoRan COPPER & GOLD Copper Market Commentary /7, = China Remains Important Demand Driver = Improving U.S. Copper Demand - Recent Auto and Housing Data Have Been Positive = Weak European Demand = Global Inventories Remain Relatively Low = Ongoing Supply Challenges
Slide 8: Value Creation Focus
FrReepont-McMoRan COPPER & GOLD Value Creation Focus INVESTMENT CASH MINERAL RESERVE IN ATTRACTIVE “@ PRODUCTION FLOWS/ RESOURCES ADDITIONS DEVELOPMENT GROWTH RETURNS | PROJECTS Fe opper Resources at 12/31/2011 Recoverable Reserves 120 bn Ibs Mineralized Material (contained) ” 115 bn Ibs Total Reser
Slide 9: Highly Attractive Brownfield Development Projects
FReeport-McMoRAN come“ Highly Attractive Brownfield Development Projects // Incr. Cu Capital* Achieve Mill Expansions (t/d) (om lbsie) (bins) Full Rates Cerro Verde (360K) 600 $4.4 2016 Morenci (115K) 225 14 2014 Tenke (14K) 0.9 2013 TOTAL * excludes capitaized interest + Underground uth America® =
Slide 10: Morenci Mill Expansion
FREepont-McMoRan CoppER & GoLo B rown fie ld De velopme t GA 7 TMC Morenci MillExpansion _// Key Project Metrics Positive drilling results continue to expand potential milling sulfide resource in this multi-year program Expand mill to 115K t/d Copper (bin Ibs ) Increase mining rate to 900K st/d 26.5
Slide 11: Cerro Verde Mill Expansion
FREepont-McMoRan cone’ Brownfield Development Cerro Verde Mill Expansion Key Project Metrics © Expand mill from 120K t/d to 360K t/d ° Increase mining rate from 320K t/d to 850K t/d Capital costs: ~$4.4 billion* Incremental Production: 600mm Ibs Cu/year, 15mm Ibs Mo/year Reserve Life: ~90 years curr
Slide 12: Tenke Fungurume Expansion
|FREEPoRT-MicMoRAN |CopPER & GOLD Brownfield Development Y dda Tenke Fungurume Expansion Hf Key Project Metrics Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: $850 million* Incremental Production: 150mm Ibs Cu/year Construction nearing comp
Slide 13: Grasberg BC & DMLZ Underground Mine Development
FReepont-McMoRan |CopPER & GOLD Grasberg BC & DMLZ Underground Mine Development « Completed significant development on access to underground ore bodies « To-date, completed 66 km of development in Grasberg BC & 32 km in DMLZ; record development in both mines in 3Q e Key development activities includ
Slide 14: Update on Grasberg
FReepont-McMoRan COPPER & GOLD Update on Grasberg (7 lalla Mf e Unusually low metal production in 2012 compared with historical levels = Lower grades in Grasberg open pit = DOZ ramp-up: panel repairs more extensive — expect 80K t/d during 2013; current rate: 50K t/d = Mine sequencing/geotechnical fa
Slide 15: Americas Growth Outlook
FReepont-McMoRan COPPER & GoLD Americas Growth Outlook , Mu Copper Production billion Ibs per year Potential Projects 3.5 D 29 Fae under review . Expansion 2.6 bgonaon CO cad I a 7 ’ Morenci y Mill Exp. #2 ElAbra | W115 \ i A Mill \ bin tbs) aa : Lone y Twin Star 7 ‘Serta 2010 2012e 2014e 2016e e =
Slide 16: Africa Growth Outlook
FReepont-McMoRan COPPER & GoLD Africa Growth Outlook Copper Production billion Ibs per year 0.3 0.15 Ps l 2009 20i12e 2014e Potential with Potential additional _ with Sulfides oxide e = estimate. See Cautionary Statement. 16m
Slide 17: Portfolio of World Scale Mines
FReepont-McMoRan CopPER & GOLD Portfolio of World Scale Mines 7 VM y la jd Positive Exploration Results — {Big Mines Get Bigger”. Mines:-with Potential Capacity for 1 billion Ibs of copper per annum* Morenci Tenke Fungurume cpaeed ; Cerro Verde x * j El Abra™ * Grasberg currently prodticing over 1-b
Slide 18: Climax Molybdenum Start-Up
FReepont-McMoRan COPPER & GOLD Climax Molybdenum Start-Up 7 (PIOCESSIIg FACIES) tS Es Construction completed mid-2012 Start-up in March 2012, first moly shipment in 2Q12 Ramp up to 20mm lbs/yr during 2013, subject to market conditions Capacity to increase to 30mm lbs/yr Reserves at year-end 2011 tot
Slide 19: Exploration Targets in Major Mineral Districts
FReepont-McMoRan rere cee Exploration Targets in Major Mineral Districts $255 million in 2012e Australasia — °” & Other Areas = Indonesia 12% Note: FCX’s consolidated share; e = estimate. See Cautionary Statement. 19
Slide 20: 2012 Outlook
FrReepont-McMoRan COPPER & GOLD 2012 Outlook > Sales Outlook: . > Unit Net Cash Cost: ° > Operating Cash Flows?: « > Capital Expenditures: ° Copper: 3.6 Billion Ibs. Gold: 1.0 Million ozs. Molybdenum: 82 Million Ibs. $1.50/Ibin 2012e Reflects Impact of Lower Volumes at Grasberg Costs in Future Years
Slide 21: Near-Term Sales Profile
FrReepont-McMoRan COPPER & GOLD Near-Term Sales Profile Copper Sales (billion Ibs) 5.0+ as 43 2011 2012e 2013e 2014e Indudes Projects ‘Currently Under Way* “Tore Consaleare capper sales include aporasinately 717 mm bs in 2011, 705 mmibs in 20128 £00 mmm ts in 2013, and 770 mmm bs in 20140 for noncon
Slide 22: 2012e Quarterly Payable Metal Sales
FrReepont-McMoRan COPPER & GOLD 2012e Quarterly Payable Metal Sales Co, 1,250 1,000 827 750 500 250 2 = estimate, See Cautionary Statement. 3Q12 4Q12e 500 288 266 255 202 2912 3Q12 4Qi2ze 7a sales ince apronimatly 28k os in 1012, 27k eas in 212. 2ikecas in 3Q42and 29k ox n 4120 for nonconroling inte
Slide 23: 2012 Operating Estimates
FrReepont-McMoRan COPPER & GOLD 2012 Operating Estimates 2012e Unit Production Costs North South id of (eet pound of copes) Ame! America| Indonesia _Africa Consolidated Cash Unit Costs Site Production & Delivery $1.90 $1.61 $3.24 $1.53 $2.03 By-product Credits (0.35) (0.27) (2.24) (0.36) (0.70) Trea
Slide 24: Reconciliation of Unit Cash Costs
FReepont-McMoRan COPPER & GoLD Reconciliation of Unit Cash Costs //// Consolidated ¢ per Ib of copper 2011 101¢ Grasberg (a) 28 North America (b) 9 South America (c) 11 Tenke (d) 1 Total 49 2012e 150¢ Impact of Higher 2013e/2014e Grasberg Volumes (34¢) With Higher Grasberg Volumes 116¢ (2) lower vol
Slide 25: EBITDA and Cash Flow at Various Copper Prices
FrReepont-McMoRan COPPER & GOLD EBITDA and Cash Flow at Various Copper Prices Average EBITDA* ($1,500 Gold & $12 Molybdenum) $18) (US$billions) sis oe rr re | ~50% $9 Increase s6 33 so Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1,500 Gold &
Slide 26: Sensitivities
FrReepont-McMoRan COPPER & GOLD Sensitivities Operating Change EBITDA Cash Flow (USS milfions) Copper: -/+ $0.10/Ib $405 $275 Molybdenum: -/+ $1.00/Ib $80 $65 Gold: -/+ $50/ounce $75 $45 Diesel: -/+ 10% $90 $65 Purchased Power”: -/+ 10% $50 $40 Currencies@: +/- 10% $150 $110 (2) $3.60/gaon base case
Slide 27: Capital Expenditures
FrReepont-McMoRan COPPER & GOLD Capital Expenditures i Major Projects WAllOther (Uss billions) $54 $4 | $3.6 $3 5 $2 $1) $05 2011 2012e 2013e (1) Capital expenditure estimates include projects n progress. Project spending wil continue to be reviewed and revised subject to market conditions. Exclides
Slide 28: Financial Policy
FrReepont-McMoRan COPPER & GOLD Financial Policy = Maintain Strong Balance Sheet & Liquidity Position = Invest in Attractive Growth Projects/Capital Discipline = Current Common Stock Dividend Rate: $1.25/Share per Annum = Board to Review Financial Policy on an Ongoing Basis
Slide 29: FCX Investment Summary
FrReepont-McMoRan COPPER & GOLD FCX Investment Summary World’s Premier Publicly Traded Copper Company World’s Largest Molybdenum Producer & Significant Gold Producer Long-lived Reserves, Geographically Diverse Operations Strong Near-term and Longer-term Growth Profile Flexible Operating Structure Ca
Slide 30: Reference Slides
Reference Slides
Slide 31: PT-FI Mine Plan
FReepont-McMoRan Eoeeen Boxe PT-FI Mine Plan PT-FI‘s Share of Metal Sales, 2012e-2016e 2012e — 2016e PT-FI Share Total: 5.7 billion Ibs copper WN Sone: billion Iks Annual Average: 1.14 billion Ibs i copper, Gold, million ozs 2012e — 2016e PT-FI Share Total: 8.5 million ozs gold 2.9 Annual Average: 1
Slide 32: Grasberg Open Pit
|FREEPoRT-McMoRAN Copren s Gown Ss Grasberg Open Pit
Slide 33: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section MMM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 34: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section MMM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 35: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section MMM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 36: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section ti / MM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 37: Mining Sequence in 2013
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2013 Copper Equivalent Cross Section MMM MMMM A 9N and 9S are the Primary Ore Pushbacks in 2013 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq 37
Slide 38: Mining Sequence in 2014
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2014 Copper Equivalent Cross Section MMM MMMM A 9N and 9S are the Primary Ore Pushbacks in 2014 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 39: Mining Sequence in 2015
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2015 Copper Equivalent Cross Section MMM MMMM 9S is the Primary Ore Pushback in 2015 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq 39
Slide 40: Mining Sequence in 2016
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2016 Copper Equivalent Cross Section ti / MM MMMM 9S is the Primary Ore Pushback in 2016 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Freeport Mcmoran Copper & Gold — Q3 2012 Earnings Presentation on 6ix