Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — BMO Capital Markets 25th Global Metals & Mining Conference 2016

22 slides from Freeport-mcmoran's conference presentation, Feb 29, 2016

  1. Slide 1: Richard C. Adkerson, President & CEO

    Richard C. Adkerson President & CEO February 29, 2016

  2. 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 projections or expectations relati

  3. Slide 3: Premier Portfolio of Long-Lived, Geographically Diverse Global Mining Assets

    Premier Portfolio of Long-Lived, Geographically Diverse Global Mining Assets North America South America Indonesia Africa Replace Photo Morenci Cerro Verde Grasberg Tenke Fungurume Largest Copper World’s Largest One of Largest High Grade Mine in Concentrating Copper/Gold Copper/Cobalt North America

  4. Slide 4: Copper Market Commentary

    Copper Market Commentary  Anticipated Large Surpluses have Not Materialized – Market Generally Balanced Price Related Closures Identified: ~795kt/a (annualized)  Actions at High Cost Mines have Resulted in Industry Curtailment of 795kt/annum To Date  Industry Experts Expect Additional Cuts Africa

  5. Slide 5: Executing in a Weak Commodity Market Supported by Portfolio of High Quality Assets

    Executing in a Weak Commodity Market Supported by Portfolio of High Quality Assets Adjusted Mine Plans Curtailed High Cost Production Completion CAPEX of Major Reductions • Restore Balance Sheet Projects • Preserve Liquidity • Strategic Focus on Copper Business • Maintain High Quality Dividend Portf

  6. Slide 6: Capital Expenditure Reductions

    Capital Expenditure Reductions (US$ billions)  January 2016 CAPEX Est. (Including Idle Rig Costs) vs. July 2015 Est. $6.35 - 2016e down 29% - 2017e down 47% Oil & Gas  2016e Mining CAPEX Includes: - $0.5 Bn in Sustaining 3.0 - $0.4 Bn in Remaining CV Expansion - $0.8 Bn in Grasberg U/G Development

  7. Slide 7: Enhanced Unit Cost Position

    Enhanced Unit Cost Position Consolidated Site Production & Delivery  Significant Mining Unit Cost Reductions $ per pound of copper ̶ Reflects Curtailment of 350mm lbs & 25% $1.78 Decline Revised Operating Plans Unit Net Cash Costs $1.34 ̶ Aggressive Cost and Equipment Fleet $1.53 Management Unit Ne

  8. Slide 8: Adjusted Mine Plans Enhance Free Cash Flow Generation at Low Prices

    Adjusted Mine Plans Enhance Free Cash Flow Generation at Low Prices  All FCX Copper Production Cash Production Adjustments Flow Positive After Sustaining ~350 mm lbs (~9% of 2015 Sales)* CAPEX Below $2.00/lb - El Abra – 50% Reduction Stacking Rates - Miami – Suspended Mining  FCX Stress Tested Cur

  9. Slide 9: 2016e Cost Curve of FCX Mines

    2016e Cost Curve of FCX Mines Unit Net Cash Costs (after by-product credits) $ per pound of copper Before Capital Expenditures After Capital Expenditures $1.49 $1.50 $1.54 $1.55 $1.49* $1.32 $1.32 $1.10 Indonesia South America North America $0.78* FCX Avg Africa $0.17 NOTE: Assumes average prices of

  10. Slide 10: Cerro Verde Project Execution

    Cerro Verde Project Execution • Completed Construction of World’s Largest Concentrating Facility • Strong Performance on Capital Cost Management and Startup Cerro Verde Mill Rate Performance 000’s t/d milled 338* 309 301 222 Concentrator #2 189 (Expansion Project) 148 Concentrator #1 Sep-15 Oct-15 N

  11. Slide 11: Positioned for Free Cash Flow from Mining Business

    Positioned for Free Cash Flow from Mining Business ($ in billions) 2015 2016e EBITDA 2016e CAPEX $7.0 $5.6 $4.2 $3.3 $3.3 Major Mining $1.9 Projects $2.4 $1.4 Other Mining $0.9 $0.5 EBITDA CAPEX @ $2.00 @ $2.25 @ $2.50 CAPEX Copper Copper Copper Each 10¢ Change in Copper: $550 mm Impact on 2016e EBI

  12. Slide 12: Asset Sales to Accelerate Debt Reduction & Enhance Shareholder Value

    Asset Sales to Accelerate Debt Reduction & Enhance Shareholder Value  Targeting Significant Transactions - Advancing Oil & Gas Process - Multiple Opportunities for Mining Assets  High Quality Portfolio Provides Broad Range of Options to Achieve Attractive Valuation - Morenci Transaction is a Posit

  13. Slide 13: Sale of 13% Interest in Morenci

    Sale of 13% Interest in Morenci  Announced Definitive Agreement on February 15, 2016  Sumitomo Metal Mining (SMM) to Acquire 13% of Morenci Mine Unincorporated JV Morenci Ownership Current Post-closing FCX 85% 72% Sumitomo* 15% 28% 2015 Statistics (FCX’s 85% Share) Reserves 12 bn lbs  $1.0 Billio

  14. Slide 14: Significant Copper Resources & Potential

    Significant Copper Resources & Potential billion lbs of copper Future Resource Development Opportunities Indonesia America 99 America Reserves* South Africa North  El Abra Major Sulfide Deposit  North America Sulfides Mineralized  Tenke Material** (contained Cu) Reserves & Mineralized Reserves 20

  15. Slide 15: Tenke Fungurume Resource Potential Continues to Grow

    Tenke Fungurume Resource Potential Continues to Grow billion lbs of copper & cobalt Cu 7 Results Based on 915 km Reserves* of Exploration Drilling -- 5,680 Holes Co 0.9 Mineralized Material** Cu Res. 14 Reserves & Mineralized Material 1.5 Co Potential*** Deeper Cu Reserves & Min. Material Inferred D

  16. Slide 16: Dipeta Syncline Potential

    Dipeta Syncline Potential % CuEq 2% 3% Kwatebala 4% 5% 6% Current Dipeta Syncline Potential Model 500+ mm t Outline 2.6% Cu & 0.2% Co Mwadinkomba High High Potential Potential Area Area Mambilima 1 km 16

  17. Slide 17: Oil & Gas Proved & Probable Reserves

    Oil & Gas Proved & Probable Reserves 381 MMBOE as of 12/31/15 By Commodity By Category By Region 6:1 Ratio Oil Developed GOM 81% Undeveloped California 53% 64% 47% 31% Gas 4% 5% NGLs 15% Haynesville/ Other NOTE: The preliminary proved (252 MMBOE) and probable (129 MMBOE) oil and gas reserves present

  18. Slide 18: Sales Profile

    Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 3 6 2 2.6 1.8 1 1.25 5.1 0 4.7 2015 2016e 2017e Note: Consolidated gold sales include 115k ozs in 2015, 170k ozs in 2016e 4 4.1 and 240k ozs in 2017e for noncontrolling interest. Molybdenum Sales (million lbs) 90 2 89 74 60 73 30 0 20

  19. Slide 19: EBITDA and Cash Flow at Various Copper Prices

    EBITDA and Cash Flow at Various Copper Prices Average EBITDA ($1,100 Gold, $6 Molybdenum & $37 Oil) $9 (US$ billions) $6 $3 2016e/2017e Average $0 Cu $2.00/lb Cu $2.25/lb Cu $2.50/lb Average Operating Cash Flow (excluding Working Capital changes) ($1,100 Gold, $6 Molybdenum & $37 Oil) $6 (US$ billio

  20. Slide 20: Committed to Balance Sheet Management – Strong Track Record

    Committed to Balance Sheet Management – Strong Track Record (US$ billions) Manageable Near-Term Debt Maturity Schedule FCX Debt Structure as of 12/31/15 $2 (US$ billions) $1.6 Revolver $ - Cerro Verde Bank Term Loans 3.0 Non-Recourse Loan FCX & FMC Sr. Notes 12.3 FM O&G Senior Notes 2.5 $1 FCX Cerro

  21. Slide 21: Recent Bank Amendment – Revolver & Term Loan

    Recent Bank Amendment – Revolver & Term Loan  Provides 2016 Covenant Flexibility in Volatile Market Environment - Leverage Covenant Adjusted to 8x in 1Q – 3Q 2016 and 6x in 4Q 2016 - Year-end 2015 Actual Leverage: 4.2x  Facility Remains Unsecured; Springing Collateral Provisions if $3 Bn in Asset

  22. Slide 22: Focused on Execution

    Focused on Execution Cost, Capital & Production Performance Safety & Securing Long- Environmental term Rights in Management Indonesia Asset Sales Debt Reduction Strong Track Record 22

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