Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q1 2011 Earnings Presentation
41 slides from Freeport-mcmoran's earnings presentation, Apr 20, 2011
Slide 1: 1st Quarter 2011 Earnings Conference Call
FREEPoRT-McMoRAN COPPER & GOLD Connecting the World 1% Quarter 2011 Earnings Conference Call FCX LISTED wer fex.com April 20, 2011 NYSE.
Slide 2: Cautionary Statement
FREEPORT-McMOoRAN COPPER & GOLD Cautionary Statement sc This presentation contains forward-looking statements in which we discuss factors we believe may affect our potential performance in the future. Forward-boking statements are all statements other than statements of historical facts, such as sta
Slide 3: Global Leader in Production of Copper, Gold and Molybdenum
FREEPORT-MicMoRAN COPPER & GOLD "Connecting the World” hs Global Leader in Production of Copper, Gold and Molybdenum Well Situated to Meet Growing Demand for Metals Geographically Diverse Long-Lived Reserves Growing Production Profile Strong Financial Position Experienced Team
Slide 4: 1Q11 Highlights
FREEPORT-McMOoRAN COPPER & GOLD 1Q14 Highlights Sales Data 1Q11 1910 Copper Consolidated Volumes (mm lbs) 926 960 Average Realization (per Ib) $4.31 $3.42 Site Production & Delivery Unit Costs (per Ib) $1.61 $1.35 Unit Net Cash Costs (per Ib) $0.79 $0.82 Gold Consolidated Volumes (000's ozs) 480 478
Slide 5: Quarterly Operating Highlights
FREEPORT-McMOoRAN COPPER & GOLD rE Quarterly Operating Highlights c= 1Q11 Unit Production Costs (per pound of copper) North South America America| Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery ( $1.75 $1.30 $1.84 $1.51 $1.61 By-Product Credits (0.49) (0.36) (2.34) (0.75) (
Slide 6: Strong Markets
FREEPORT-McMOoRAN COPPER & GOLD Strong Markets 2,500 500 @ 2000 . 400 5 LME Copper Price o & g g 1,500 300 & = U g g 3S 1,900 200 § ro) 8 a © soo 100 a a a a Jane Jule Jan- Jule Jane ue Jane uk Jan ule Jan- Jul Jane Ju Jan- Jul Jan- Jule Jan Jul Jan- Jub Jan- Jule Jan- % 9 00 00 Of O1 02 02 03 03 04
Slide 7: Value Creation Focus
FREEPORT-McMOoRAN COPPER & GOLD Value Creation Focus INVESTMENT IN ATTRACTIVE DEVELOPMENT PROJECTS CASH MINERAL RESERVE PRODUCTION FLOWS/ RESOURCES ADDITIONS GROWTH RETURNS
Slide 8: Development Project Update: North America (Morenci)
FrREeport-McMoRan CopPER & GOLD Development Project Update North America Morenci Mill Restart & Ramp-up Mill averaged 48K t/d during 1Q11; ramping up to 50K t/d Increase Mine Rate Averaged 625K t/d in 1Q11 & reached target of 635K t/d in March Further rate increases being evaluated Potential Mill Ex
Slide 9: Development Project Update: Safford and Miami
FrREeport-McMoRan CopPER & GOLD Development Project Update North America Safford Sulphur Burner $150MM project completed; first acid produced in Apri Capacity of 460 mtpy acid Reduces external purchases of acid, reduces transportation costs & provides more cost-effective source of acid Positive for
Slide 10: Development Project Update: Chino Restart
> Copren & Go. Development Project Update Sj es North America mai Chino Restart Initiating restart of mining & ¢ Hiring of workforce on milling activities schedule e Repair work on mine & mill equipment on schedule for * Incremental Cu: 100mm 2Q11 start-up Ibs/year in 2012 & 2013 & 200mm lbs in 2014
Slide 11: Development Project Update: El Abra Sulfolix
|FREEPORT-McMoRAN COPPER & GOLD Development Project Update South America EI Abra Sulfolix Large sulfide mineral deposit underlying current oxide pit Project extends life 10+ years — ~300MM lbs Cu/yr aggregate Commenced productionin1Q11 = Ore crushing, conveying, stacking, leaching & PLS transfer sys
Slide 12: Development Project Update: Cerro Verde Expansion
FrREeport-McMoRan CopPER & GOLD Development Project Update South America Cerro Verde Expansion Evaluating large-scale concentrator expansion Positive exploration/ reserve additions Current reserve life of 78 years ss Targeting new concentrator Mill Throughput facilities of 240K t/d 360K t/d Feasibil
Slide 13: Long-Term Underground Mine Development in Indonesia
Freeport-McMoRan Long-Term Underground Mine CopPER & GOLD Development in Indonesia Si~% Shaft sinking in the Big Gossan Work continues on the development of our underground reserves Significant undeveloped UG reserves = Aggregate reserves of 37 billion lbs Cu & 33 million ozs Au DOZ expanded to 80K
Slide 14: Tenke Fungurume
|FREEPORT-McMoRAN COPPER & GOLD Tenke Fungurume Mill operated at 11K t/d in 1Q11, above 8K t/d design capacity Sold 60MM Ibs Cu & 6MM lbs Co in 1Q11 Cu sales expected to increase to 285MM lbs in 2011 Second phase expansion to add incremental 150 mm lbs Cu/year in approximate two-year timeframe Explo
Slide 15: Climax Construction Update
FrREeport-McMoRan CopPER & GOLD Construction is ongoing; ~ 60 percent complete = Mill erection progressing & flotation cell placement has commenced = Refurbishing primary crusher = Continue to work outside as weather conditions permit Mine development to commence in 2011 Construction expected to be
Slide 16: Status of Announced Copper Projects
fodtreceu” Status of Announced Copper Projects [= Cu Volumes Expansions (inmm Ibs/year) Year Status Morenci Mill Restart & Mine Rate Increase 125 god complete Miami Mine Restart 100 2012 in progress Chino Mine & Mill Restart 200 2012 |. in progress aa -2014) Subtotal 425 Tenke Mill & Mine Rate Incre
Slide 17: Near-Term Copper Projects Under Evaluation
|FREEPORT-McMoRAN Near-Term Copper Projects COPPER & GOLD Under Evaluation Incremental Preliminary Copper Capital* Achieve Mill Expansions (mm Ibs/year) —_($ billions) _ Full Rates Cerro Verde (360K) 600 $3.5 2016 Morenci (115K) 150-200 0.9 2014 Tenke (14K) 150 0.8 2013 TOTAL 900-950 $5.2 ~1 billion
Slide 18: Potential Additional Projects
Potential Additional Projects S North America South America e Sulfides/Mill Projects El Abra Mill «Large Scale Morenci " Sierrita "Bagdad Aftica . = Ajo e Future Expansion of Tenke Oxides = Twin Buttes e Safford/Lone Star ¢ Tenke Sulfides
Slide 19: Exploration Targets in Major Mineral Districts
|FREEPORT-McMoRAN Coreen & Goun Exploration Targets in Major Mineral Districts . North Exploration Raiares in 2011e $225 million Australasia & Other Areas Note: FOX's consolidated share; & = estimate, See Cautionary Statement, 19
Slide 20: 2011 Outlook
FREEPORT-McMOoRAN COPPER & GOLD 2011 Outlook » Sales Outlook: ¢ Copper: 3.9 Billion Ibs. ¢ Gold: 1.6 Million ozs. ¢ Molybdenum: 73 Million lbs. » Unit Net Cash Cost??/: ° $1.04/Ib > Operating Cash Flows: ~$8.3 Billion (@$4.25 copper for remaining 9 months) e Each 10¢/Ib Change in Copper = $250 MM in
Slide 21: Near-Term Sales Profile
FREEPORT-McMOoRAN COPPER & GOLD Near-Term Sales Profile Excludes current projects under evaluation 2010 2011e 2012e 2013e ‘Foier Ciasolaaed copper sles include spprovimately 756s fin 2010, 750 pm bs ip 2042, 760 mm fe in bie, and 775 mm fin 2013e Fr noncontoling interes, erclder pochaced ‘copper. =
Slide 22: 2011e Quarterly Payable Metal Sales
FREEPORT-McMOoRAN COPPER & GOLD 2011e Quarterly Payable Metal Sales Copper Sales 1,250 1,000 750 500 250 1g11 2Q11e agile agiie ‘Foier Ciasoidated rapper sales include approvimatey 173 mo fs in 4014, 185 mm ben 20, 200 mo fs in 30 aod 182 mms 9 SQlie Fr nosconwling interes eclces Dorhaced copper Gol
Slide 23: 2011 Operating Estimates
FREEPORT-McMOoRAN COPPER & GOLD Pex 2011 Operating Estimates 2011e Unit Production Costs North South (pa poundiot copper) America __America _Indonesia__ Africa Consolidated Cash Unit Costs 4) Site Production & Delivery 2) $1.82 $1.32 $2.00 $1.46 $1.67 By-product Credits (0.45) (0.31) (1.95) (0.62) (
Slide 24: EBITDA and Cash Flow at Various Copper Prices
FREEPORT-McMOoRAN comme® EBITDA and Cash Flow at Various Copper Prices ($1,200 Gold & $12 Mol $15) (Ussbillions) $12 $9 $6 $3 = Cu $3.50/Ib Cu $4.00/Ib Cu $4.50/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1,200 Gold & $12 Molybdenum) $10) (US$billions) $e $6 $4 $2 $0 Cu $3.
Slide 25: Sensitivities
FREEPORT-McMOoRAN COPPER & GOLD Sensitivities (US$ millions) Copper: -/+ $0.10/Ib $390 $270 Molybdenum: -/+ $1.00/Ib $60 $50 Gold: -/+ $50/ounce $70 $40 Diesel: -/+ 10% $85 $55 Purchased Power™: -/+ 10% $45 $25 Currencies™: +/- 10% $130 $75 (i) 92.35]galion base case assumption. (2)7-34fk\h base cas
Slide 26: Capital Expenditures
FREEPORT-McMOoRAN COPPER & GOLD Capital Expenditures ( Excludes current projects under evaluation (US$ billions) $3.0 mMajorProjects mAllOther $2.5 $2.5 a —— $2.0 $1.55 $1.0 $0.5 $0.04 2010 2011e 2012e (1) Capital ewenditure estimates willcontinue to be reviewed andrevisad subject to market conditio
Slide 27: Balance Sheet
FREEPORT-McMOoRAN COPPER & GOLD rE Balance Sheet fo ae Repaid $3.7 bn in Debt Since (US$ billions) YE 2008 (50% Reduction) @ $20 5 $17.6 © Significant Liquidity Strong Credit Metrics $15 No Near-term Maturities Investment Grade Rated by S&P, Moody's, Fitch $10 4 Total Debt At Time of PD Acquisition
Slide 28: Financial Policy
FREEPORT-McMOoRAN COPPER & GOLD Financial Policy = Maintain Strong Balance Sheet & Liquidity Position = Invest in Attractive Growth Projects = Opportunistic Debt Repayment = Current Common Stock Dividend Rate: $1.00/Share per Annum = Supplemental Dividend of $0.50/Share to be Paid June 1, 2011 * $0.
Slide 29: FCX Investment Summary
FREEPORT-McMOoRAN COPPER & GOLD FCX Investment Summary cc 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 Signif
Slide 30: Reference Slides
Reference Slides
Slide 31: PT-FI Mine Plan
FrREeport-McMoRan CopPeR & GOLD PT- Mine Plan PT-FI’sShare of Metal Sales, 2011e-2015e Saa~3 | = 2011¢— 2015e PT-FI Share Total: 6.0 billion Ibs copper BE copper, billion Ibs Annual Average: 1.2 billion Ibs Gold, million ozs 2011e—2015e PT-FI Share Total: 8.3 million ozs gold Annual Average: 1.7 mil
Slide 32: Grasberg Open Pit
FREEPoRT-MicMoRAN COPPER & GOLD Grasberg Open Pit
Slide 33: Mining Sequence in 2011
FREEPoRT-McMoRAN ome Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq ON is in ore north of this cross-section 33
Slide 34: Mining Sequence in 2011
FREEPoRT-McMoRAN ome Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq ON is in ore north of this cross-section 34
Slide 35: Mining Sequence in 2011
FREEPoRT-McMoRAN ome Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq ON is in ore north of this cross-section 35
Slide 36: Mining Sequence in 2011
FREEPoRT-McMoRAN ome Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq ON is in ore north of this cross-section 36
Slide 37: Mining Sequence in 2012
FREEPoRT-McMoRAN omnes Mining Sequence in 2012 Copper Equivalent Cross Section 9N is the Primary Ore Pushback in 2012 Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 38: Mining Sequence in 2013
FREEPoRT-McMoRAN sommes’ Mining Sequence in 2013 Copper Equivalent Cross Section 9N and 9S are the Primary Ore Pushbacks in 2013 Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 39: Mining Sequence in 2014
FREEPoRT-McMoRAN Sorraeseo Mining Sequence in 2014 Copper Equivalent Cross Section 9N and 9S are the Primary Ore Pushbacks in 2014 Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 40: Mining Sequence in 2015
FREEPoRT-McMoRAN “erase” Mining Sequence in 2015 Copper Equivalent Cross Section 9S is the Primary Ore Pushback in 2015 Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 41: Mining Sequence in 2016
FREEPoRT-McMoRAN svrave’ Mining Sequence in 2016 Copper Equivalent Cross Section 9S is the Primary Ore Pushback in 2016 Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Freeport Mcmoran Copper & Gold — Q1 2011 Earnings Presentation on 6ix