Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — BMO Capital Markets 27th Global Metals & Mining Conference 2018

20 slides from Freeport-mcmoran's conference presentation, Feb 26, 2018

  1. Slide 1: 27th Global Metals & Mining Conference

    27th Global Metals & Mining Conference Richard C. Adkerson Vice Chairman, President & CEO February 26, 2018 fcx.com

  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: 2017 Highlights

    2017 Highlights Strong Execution – “Driven by Value”  Solid Operating Performance Throughout Global Operations  Ongoing Cost Management & Capital Discipline  Strong Cash Flow Generation  Restored Balance Sheet Strength  Developed Attractive Organic Options for Future Growth  Important Progress

  4. Slide 4: Key Metrics

    Key Metrics Strong Cash Flow Generation ($ in mm) Unit Net Cash Costs (Copper $/lb) 2016 2017 +$916* +$3,272* $4,682 $1.26 $1.20 $3,729 $2,813 $1,410 OCF OCF @ Cu @ Cu $2.28/lb CAPEX $2.93/lb CAPEX 2016 2017 Restored Balance Sheet Strength ($ in bn) Year-end Reserves (Copper bn lbs) $20.1 87 87 $11.

  5. Slide 5: Copper Market Commentary

    Copper Market Commentary Global IP Growth in 2017  Positive Demand Globally Was Strongest Since 2010 • Manufacturing Sectors are Performing Well 2017e Change From • Chinese Growth is Exceeding Expectations Consumption Prior Year • European Growth Continues 000’s Mt • U.S. Demand is Solid China 11,0

  6. Slide 6: World's Leading Copper Producers

    World’s Leading Copper Producers Top 10 Copper Producers (2017e) Total Operated Production (000 t) 2,000 1,500 1,000 500 0 Source: Wood Mackenzie December 14, 2017. Rankings based on net equity ownership; e = estimate 6

  7. Slide 7: World Class Copper Discoveries Are Extremely Rare

    World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves Million metric tons 2017e Copper Production Thousand metric tons 0 10 20 30 40 0 200 400 600 800 1000 Escondida - 1981 Escondida - 1981 Collahuasi - 1880 Collahuasi - 1880 1880 KGHM Polish Copper - 1957 Cerro Verde - 1860s

  8. Slide 8: FCX Values Beyond Proven & Probable Reserves

    FCX Values Beyond Proven & Probable Reserves Preserving Optionality for the Future – Driven by Value U.S. • Large footprint with substantial undeveloped sulfide resources • Significant existing infrastructure provides for Brownfield expansions Serbia • District extensions include:  Bagdad • Timok l

  9. Slide 9: Cerro Verde – Solid Performance Continues

    Cerro Verde – Solid Performance Continues  Largest Concentrator in the Industry  Operating Very Effectively  360kt Nameplate Capacity: − Averaged 374kt in 4Q 2017 Mill Rate (kt/d) Cu Sales (mms lbs) 353 360 1,105 1,062 152 501 544 121 2014 2015 2016 2017 2014 2015 2016 2017 9 9

  10. Slide 10: Lone Star Oxide Project – Moving Forward

    Lone Star Oxide Project – Moving Forward  12/31/2017 Reserve: 4.4 bn lbs of Copper Safford Leach Dos Pobres Pit Safford Facility Stockpile San Juan Pit  $850 mm Project; Utilizes Existing Infrastructure at Safford  Commenced Pre-stripping Activities in 1Q18 Lone  Provides Exposure to Large Sulfi

  11. Slide 11: El Abra Sulfide Mill Project

    El Abra Sulfide Mill Project Large Sulfide Resource -- Advancing Technical Studies Resource 240 kt/d Estimated Expected Estimate Concentrator Production Lead Time 2.0 Bn Tonnes at Similar to Recent ~750 mm lbs/year 6 – 8 years * >0.45% Copper Cerro Verde Expansion West Cross-Section looking North Ea

  12. Slide 12: Indonesia Update

    Indonesia Update  Negotiations are Advancing to Achieve a Mutually Positive Resolution  PT-FI Requires Fiscal and Legal Certainty for Long-term Mining Operations 51% Divestment Smelter Construction Ongoing Discussions with Inalum Within 5 years of Definitive Agreement (Indonesian SOE) and PT-FI Jo

  13. Slide 13: Grasberg Mining District

    Grasberg Mining District PT-FI History & of Block Caving 1980’s r GBT b Grasberg GBT (depleted) Deplete open pit 1990’s IOZ IOZ bl Deplete DMLZ (depleted) 2000’s DOZ DOZ b (operating) Operat DOZ • DM DMLZ Start Grasberg Future • Gra In de Block Cave Kucing Ertsberg East • Kuc Futu 1980’s Liar Amole

  14. Slide 14: Grasberg Block Cave – Key Milestones

    Grasberg Block Cave– Key Milestones Rail Construction Crew at Work Reserves YE 2017  963mm t @ 1.01% Cu & 0.72 g/t Au Completed to Date  +220 km of Development  Mine Access  Service Shaft  Initial Fans & Vent Infrastructure  Rail Connection  Crusher #1  Batch Plant Approaching the Rail Unloa

  15. Slide 15: 2018e Outlook

    2018e Outlook  Copper: 3.9 Billion lbs. Sales  Gold: 2.4 Million ozs. Outlook  Molybdenum: 91 Million lbs. Unit Cost  Site Production & Delivery: $1.60/lb of Copper  After By-product Credits(1): $0.97/lb, Including $0.95/lb for 1Q18e Operating  Exceed $5.8 Billion (@ $3.15/lb Copper for 2018e)

  16. Slide 16: Sales Profile

    Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 4 3.9 3.9 3 3.7 2.4 3.45 2 1.6 1.4 1.0 3 1 0 2017 2018e 2019e 2020e - 2021e AVG 2 Note: Consolidated gold sales include 144k ozs in 2017, 230k ozs in 2018e, 90k ozs in 2019e, 130k ozs for 2020e-2021e avg for noncontrolling interest. 1

  17. Slide 17: EBITDA and Cash Flow at Various Copper Prices

    EBITDA and Cash Flow at Various Copper Prices (US$ billions) EBITDA ($1,300/oz Gold, $10.00/lb Molybdenum) $9 $6 $3 2018e/2019e $0 Cu $3.00/lb Cu $3.25/lb Cu $3.50/lb Operating Cash Flow ($1,300/oz Gold, $10.00/lb Molybdenum) $6 $4 2018e/2019e excludes $2 Working Capital changes $0 Cu $3.00/lb Cu $3

  18. Slide 18: Capital Expenditures

    Capital Expenditures (US$ billions) Includes Lone Star Oxide Project $2.1 $2.2 $1.4 Major 1.2* 1.2* Mining Projects 0.9 Other Mining 0.9 1.0 0.5 2017 2018e 2019e * Major mining projects include CAPEX associated with Grasberg Underground development ($0.75 bn in 2018e and 2019e) and Lone Star ($0.25

  19. Slide 19: Strong Execution of Deleveraging Plan

    Strong Execution of Deleveraging Plan Net Debt at Varying Copper Prices (US$ billions) $20.0 $20.1 $15.0 $11.8 $10.0 $8.7 $5.9 $5.0 $5.0 $4.1 $0.0 Net Debt/ YE 2015 YE 2016 YE 2017 $3.00 $3.25 $3.50 Adjusted EBITDA 4.6x 2.4x 1.5x 0.8x 0.6x 0.4x YE 2018e Note: Sensitivity assumes $10/lb molybdenum an

  20. Slide 20: Financial Policy

    Financial Policy  Significant Deleveraging Over Last Two Years  Positive Market to Enable Further Debt Balanced Approach Repayment  Disciplined Approach to Investing in Attractive Growth Projects Additional Deleveraging  Board Action to Reinstate Common Cash Returns to Stock Dividend Shareholder

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