Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — BMO Capital Markets 23rd Annual Global Metals & Mining Conference 2014
24 slides from Freeport-mcmoran's conference presentation, Feb 24, 2014
Slide 1: Expanding Resources
EXPANDING RESOURCES Richard C. Adkerson Vice Chairman, President & CEO February 24, 2014 www.fcx.com
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
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 Long-lived Reserves with Large Incremental Resources High-Quality U.S. Based Oil & Gas Assets Strong Margins & Cash Flows High Return, Low Risk Organic Growth Strong Te
Slide 4: 2013 Year in Review
EXPANDING RESOURCES 2013 Year in Review Focused on Execution Strong Operating Performance Globally • 12% Increase in Copper Sales (Growth in All 4 Regions) • Significant Contribution from O&G Business Advanced Important Projects for Profitable Future Growth Copper Oil & Gas • Tenke Expansion • D
Slide 5: FCX's Global Footprint
EXPANDING RESOURCES FCX’s Global Footprint Major Operations & Development Projects North America 1 All major mining assets majority-controlled and operated Reserves Cu 36.2 bn lbs Mo 2.55 bn lbs Oil & Gas 648 MMBOE2 Copper Sales Copper/Gold/Silver Cu 1.7 bn lbs Molybdenum Mo 95 mm lbs3 Grasberg (90.
Slide 6: 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, $1,200/oz Au, $9.50/lb Mo, $105/Bbl Oil (Brent) and $3.50/MMbtu natural
Slide 7: Portfolio of World Scale Mines
EXPANDING RESOURCES Portfolio of World Scale Mines Positive Exploration Results – “Big Mines Get Bigger” Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Tenke Grasberg Fungurume Cerro Verde El Abra * Grasberg currently producing over 1 bln lbs/annum, Morenci (100%) & Cer
Slide 8: Copper Reserves & Mineralized Material
EXPANDING RESOURCES Copper Reserves & Mineralized Material as of 12/31/13 billion lbs of copper 12/31/13 226 Mineralized Material (b) by Geographical Region Mineralized 115 Material (b) billion lbs North (contained copper) 111 at $2.20 Cu price America 50% Indonesia South 19% America Reserves 20% 11
Slide 9: Oil & Gas Operating Assets
EXPANDING RESOURCES Oil & Gas Operating Assets 648 MMBOE Proved & Probable Reserves as of 12/31/13 California GOM Deepwater • Long Established Oil • Significant Current Production Production History with Upside • Strong Margins and Cash Flows • Large Scale Infrastructure • Brent Based Pricing • HLS
Slide 10: Indonesia Regulatory Matters
EXPANDING RESOURCES Indonesia Regulatory Matters In January 2014, Indonesian Government Published New Regulations Regarding Exports of Minerals, including Copper Concentrates - Allows Exports Through January 2017 - Includes New Progressive Export Duty on Copper Concentrates Regulations Conflict
Slide 11: PT-FI Operational Status
EXPANDING RESOURCES PT-FI Operational Status Since Mid-January, Adjusted Operating Plans to Match Production to Domestic Capacity From Mid-January Through February 20th, Mill Rate Averaged ~112k t/day (~ 50% of Normal Rates) Monthly Impact/Deferral of Metal: 40mm Cu/80k Au Prepared to Resume
Slide 12: Copper Market Commentary
EXPANDING RESOURCES Copper Market Commentary Strong Chinese Cathode and Concentrate Imports - Supported by Consumer Demand and Infrastructure Investment - Concentrate Market Showing Signs of Tightening U.S. Demand Improving - Consumer Confidence Growing - Automotive and Construction Key Drivers
Slide 13: Copper Markets
EXPANDING RESOURCES Copper Markets Favorable Long-term Demand Drivers & Supply Constraints Total Consumption Supply From Existing Mines 40 20 +7.6Mt +4.4Mt (4.2Mt) 27% 30% (22%) 30 +5.4Mt 15 24% Cu in Mt Cu in Mt 20 10 10 5 0 2004 2014 2024 0 2004 2014 2024 China Emerging Markets Mature Markets Base
Slide 14: Visible Organic Growth
EXPANDING RESOURCES Visible Organic Growth Mining Oil & Gas Targeting 5+ Billion Pounds Growing Production Profile in Annual Cu Production by 2015 Established Basins (37% Increase from 2012) Substantial Production Capacity Advanced Stage Brownfield from Existing Deepwater Development Infrast
Slide 15: 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
Slide 16: 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
Slide 17: Deepwater Gulf Of Mexico
EXPANDING RESOURCES Deepwater Gulf Of Mexico 4Q 2013 Deepwater GOM Production: 60k 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 SPAR:
Slide 18: Inboard Lower Tertiary/Cretaceous Activities
EXPANDING RESOURCES Inboard Lower Tertiary/ Cretaceous Activities Inboard Lower Tertiary/ Cretaceous Area Lomond North Lineham Creek England Davy Jones Blackbeard Area Industry Leading Position in Emerging Trend Lomond North – Positive Results; Completion in Progress 2014 Production Tests Da
Slide 19: 2014e Outlook
EXPANDING RESOURCES 2014e Outlook Sales Outlook Unit Cost • Copper(1): 4.4 Billion lbs. • $1.45/lb(3) of Copper • Gold(1): 1.7 Million ozs. • $20/BOE • Molybdenum: 95 Million lbs. • Oil Equivalents(2): 60.7 MMBOE (~70% Oil) Operating Cash Flows (4) Capital Expenditures • ~$9 Billion (@$3.25/lb Coppe
Slide 20: Production Profile
EXPANDING RESOURCES Production Profile Copper Sales (billion lbs)* Gold Sales (million ozs)* 3 6 3.0 2 5.7 1.7 1 1.2 1.4 5.0 0 2013 2014e 2015e 2016e ____________________ 4 4.4 Note: Consolidated gold sales include 123k ozs in 2013, 175k ozs 4.1 in 2014e, 140k ozs in 2015e and 290k ozs in 2016e for
Slide 21: EBITDA and Cash Flow at Various Copper Prices
EXPANDING RESOURCES EBITDA and Cash Flow at Various Copper Prices Average EBITDA ($1,200 Gold, $10 Molybdenum & $100 Oil) $20 (US$ billions) $15 2015e/2016e $10 Average $5 2014e $0 Cu $3.00/lb Cu $3.50/lb Cu $4.00/lb Average Operating Cash Flow (excluding Working Capital changes) ($1,200 Gold, $10 M
Slide 22: Capital Expenditures
EXPANDING RESOURCES Capital Expenditures (1) (US$ billions) $8 $7.1 $7.3 $6.6 $6 $5.3 3.5 3.0 Oil & Gas 1.5 (2) 4.0 $4 Major Projects 2.3 (3) TOTAL 3.1 (3) 2.6 $2 MINING 4.1 3.8 1.4 Other 3.8 2.6 Mining 1.5 1.0 1.2 1.2 $0 2013 2014e 2015e 2016e (1) Capital expenditure estimates include projects in p
Slide 23: Committed to Balance Sheet Management
EXPANDING RESOURCES Committed to Balance Sheet Management Strong Track Record Debt Targeted at $12 Billion by 12/31/2013 Balances YE 2016 ($ in bns) Anticipate Continuing Current $20.1 Common Stock Dividend Rate: $18.1 $1.25/Share per Annum Large Resource Base with Strong Cash Flows and Capita
Slide 24: 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
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