Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2010 Earnings Presentation
42 slides from Freeport-mcmoran's earnings presentation, Oct 21, 2010
Slide 1: 3rd Quarter 2010 Earnings Conference Call
FREEPORT-McMoRAN Coprer & GoLp 3'¢ Quarter 2010 Earnings Conference Call PROVEN PERFORMANCE October 21, 2010 FCX LISTED www.fex.com NYSE.
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
|FREEPORT-McMoRAN COPPER & GOLD Cautionary Statement Regarding Forward-Looking Statements 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 statement
Slide 3: 3Q10 Highlights
|FREEPORT-McMoRAN COPPER & GOLD 3Q10 Highlights = Excellent Financial Results =» Strong Production and Cost Performance = Positive Pricing for Key Commodities = Taking Steps to Increase Near-term Copper Production = Continuing to Advance Future Growth Projects/Expansion Plans = Board Action to Incre
Slide 4: 3Q10 Highlights
= FAEEPORT-MICMORAN COPPER & GOLD 3Q10 Highlights Sales Data 9 mos. 2010 Consolidated Volumes (mm tbs) 1,081 2,955 Average Realization (per ib) $3.50 $3.33 Site Production & Delivery Unit Costs (per /b) $1.38 $1.38 Unit Net Cash Costs (per ib) $0.82 $0.87 Consolidated Volumes (0007's ozs) 497 1,273
Slide 5: Quarterly Operating Highlights
= FAEEPORT-MICMORAN COPPER & GOLD Quarterly Operating Highlights 3Q10 Unit Production Costs (per pound of copper) North South America America| Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery() $1.62 $1.16 $1.43 $1.44 $1.38 By-Product Credits (0.36) (0.21) (1.67) (0.65) (0.77
Slide 6: Copper, Gold and Molybdenum Price Trends
FREEPORT-McMoRAN COPPER & GOLD ‘0 » ® = e 2 g z a 3 = o g =e = QD 2 2 ro) 8 a Jane Jue Jane Jule Jam Jule Jam ule ine Jame uh ae Jule an Jule Jane Jue Jane Jule Jan-Jun Je soo Mm nneenonnseseeennrr ee om 0 “LME and Comex, excluding Shanghai stocks, producer, consumer and merchant stocks. London Gold
Slide 7: North America: Morenci
FREEPORT-McMoRAN, DECC ERT EE ET DOREETS te COPPER & GOLD North America Morenci Mill Restart & Ramp-up e Millaveraged 31K t/d during 3Q10& ramping up rates — 50K t/d by 2011 Increase Mine Rate e Averaged 484K t/d in 3Q10; continue ramp-up to 635K t/d ¢ Additional stripping to expose additional ore;
Slide 8: Development Project Update: Miami Restart and Safford Sulphur Burner
= FREEPORT NICMORAN : ——— a Development Project Update * COPPER & GOLD North America Miami Mine Restart ¢ Began stripping activities in 1Q10; 3Q10 mining rate of ~150K t/d ¢ Ramp up to 100MM lbs Cu/year by late 2011 ¢ $40MM project, primarily mining equipment e¢ 12/31/09 reserves of 600MM Ibs Cu Saf
Slide 9: Development Project Update: Chino Restart
= FREEPORT-WICMORAN, ———s Development Project Update COPPER & GOLD North America Chino Restart e Suspended mining & milling activities in late 2008 in response to global economic conditions ¢ Currently, producing ~35mm Ibs Cu/year from residual leaching activities = «$150mm in restart costs = Increm
Slide 10: Development Project Update: Cerro Verde and El Abra
|FREEPORT-McMoRAN Development Project Update COPPER & GOLD South America Cerro Verde Expansion « Completing $50MM project to increase mill rate from 108K t/d to 120K t/d = 30MM lbs Cu per year of incremental metal at low cash cost ¢ Evaluating large-scale concentrator expansion = Feasibility study i
Slide 11: Grasberg Pit Mine Plan — October 2010
FREEPORT-McMoRAN, COPPER & GOLD Grasberg Pit Mine Plan — October 2010 Final Pit Changes Continue to optimize the ultimate pit; accelerating metal from underground to open pit Flan Changes po eee Plan Changes — 21 | Final Pi ee al e Step-in of north wall to balance additional mining in east side e Ch
Slide 12: Long-Term Underground Mine Development in Indonesia
|FREEPORT-MIcMoRAN Long-Term Underground Mine SSs COPPER & GOLD Development in Indonesia ¢ Significant undeveloped underground reserves = Aggregate reserves of 41 billion Ibs Cu & 35 million ozs Au ¢ DOZ expanded to 80K t/d ¢ Big Gossan mine — full rates of 7K t/d by late 2012 ¢ Grasberg Block Cave
Slide 13: Tenke Fungurume
ee a COPPER & GOLD Tenke Fungurume ° Sold 73MM Ibs Cu & 6MM lbs Co in 3Q10 ° Atfull rates (initial phase), aggregate annual metal of 250MM Ibs Cu & over 18MM lbs Co = Mill operated at ~12K t/d in 3Q, above 8K t/d design capacity The millat Tenke has been operating above design capacity = Increasing
Slide 14: Climax Restart
Feanl EREEROREMeMORAN COPPER & GOLD Climax Restart ¢ One of the most attractive primary molybdenum development projects in the world — large-scale production capacity, attractive cash costs and future growth options ° Initial annual capacity of 30mm pounds with expansion options ¢ $700mm project wit
Slide 15: FCX Announced Copper Additions To Date
= FAEEPORT-MICMORAN COPPER & GOLD FCX Announced Copper Additions To Date ~ Additional Annual Copper +~500mm Ibs | = 400 Tenke Mill & Mine Rate Increase (2011) 1) Cerro Verde Debottleneck (2011) Chino Mine & Mill Restart ==) (ramp-up in 2012*) 100 Miami Mine Restart (late 2011) 125 Morenci Mill Resta
Slide 16: Copper Reserves & Mineralized Material
= FAEEPORT-MICMORAN COPPER & Goo Copper Reserves & Mineralized Material as of 12/31/09 billion Ibs of copper 12/31/09 226 Copper Reserves by Geographical Region SS Mineralized 122 North Material) billion \ (contained copper) Ibs at $2.00 Cu price America 250 104 South 4 is America Indonesia 3300 33%
Slide 17: Current Projects Under Evaluation
|FREEPORT-McMoRAN COPPER & GOLD Current Projects Under Evaluation North America Tenke Fungurume ¢ Further increases to Morenci/ ¢ Debottlenecking Safford mining rates ¢ Further oxide expansion ¢ Plans for Twin Buttes/ Sierrita district ¢ Sulfide development ° Climax ¢ Major mill projects for sulfide
Slide 18: FCX Copper Projects
|FREEPORT-McMoRAN ‘vel COPPER & GOLD, FCX Copper Projects billion Ibs copperannually Replacement New Copper Projects Sources SA Potential Projects Tenke 0.25 Expansions NA Potential NA Projects Incremental 1.4 billion Ibs Cu 1.7 billion Ibs Cu Other Opportunities ¢ Tenke Sulfides ¢ NA Mill Projects
Slide 19: Exploration Targets in Major Mineral Districts
Fenn) BEFORE Memon COPPER & GOLD Shining. Future Exploration Targets in Major Mineral Districts: South A North America Exploration America Wes in 2010e 32% $120 million _ Africa 18% 19% Indonesia _ Australasia & Other Areas Expect to increase exploration spending significantly in 2011 Note: FOX's co
Slide 20: 2010 Outlook
|FREEPORT-McMoRAN COPPER & GOLD 2010 Outlook » Sales Outlook: © Copper: 3.85 Billion Ibs. © Gold: 1.9 Million ozs. ¢ Molybdenum: 65 Million Ibs. » Unit Net Cash Cost //; 83¢/Ib ~ $6 Billion « Assumes $3.75/lb Copper for 4Q10 « Each 10¢/lb Change in Copper = $60 Million in 2010 > Operating Cash Flows
Slide 21: Near-Term Sales Profile
FREEPORT MICMORAN COPPER & GOLD Near-Term Sales Profile Excludes current projects under evaluation Gold Sales (million ozs, Copper Sales (billion Ibs) 19 2 17 5 ed 12 1 41 4 3.9 0 2010e 2oile 2012e 2013e 3 Rr Gas gol sls inte apposite 15 oon 20100, 1506 os tie, {Bot exh 20, and Ish ann 200 Proncnrol
Slide 22: Quarterly Sales Volumes
FREEPORT MICMORAN COPPER & GOLD 1,250, 1,000 750 500 250 1910 2910 3010 give ‘Foier Ciasoiated copper sles inlade spproximatly 181 my lisp 1010, 173 nm lisp 2010, 210 mm Bs in 2010 aod 161 mm bs in 0i0e For nonconroling interests erclodes urhaced copper. 800 585 600 478 497 400 298 200 0 1910 2Q10 3
Slide 23: 2010e Sales and Unit Production Costs by Region
=o 2010e Sales and Unit Production COPPER & GOLD Costs by Region 2010e Sales by Region North America South America Indonesia Africa 1,320 1,200 18 250 20 O41 Cu - m | & & (per pound of copper} North South America America Indonesia Africa Consolidated Cash Unit Costs‘) Site Production & Delivery = $1
Slide 24: EBITDA and Cash Flow at Various Copper Prices
Feanl EREEROREMeMORAN : COPPER & GOLD EBITDA and Gash Fi 1OW at Various Gopper- Prices Average EBITDA* ($1,000 Gold & $10 Molybdenum) $12] Ussbillions) $9 $6 $3 $0 Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1,000 Gold & $10 Molybdenum) $8 (
Slide 25: Sensitivities
= FAEEPORT-MICMORAN COPPER & GOLD Sensitivities Operating Change EBITDA Cash Flow (058 millions} Copper: -/+ $0.10/Ib $375 $260 Molybdenum: -/+ $1.00/Ib $60 $50 Gold: -/+ $50/ounce $70 $40 Diesel: -/+ 10% $55 $35 Purchased Power™: -/+ 10% $40 $25 Currencies™: +/- 10% $120 $70 (i) 32.Sb/galion base c
Slide 26: Capital Expenditures
(US$ billions) $3.0 $2.5 $2.3 mMajorProjects mAllOther $2.0 $1.55 $1.0 $0.5 $0.0 2008 2009 2010e 2011e (2) Capitalexpenditae estimates willcontinue to be reviewed andrevined subject to market conditions. (2) Includes $1.1 bilon for Tenke develooment. (3) Includes Tenke development, Grasberg undergro
Slide 27: Debt Reduction and Liquidity
Fenn) BEFORE Memon . COPPER & GOLD Repaid $2.6 bn in Debt Since a ‘ent ee YE 2008 (35% Reduction) Significant Liquidity Strong Credit Metrics No Near-term Maturities Investment Grade Rated by S&P, Moody's, Fitch $15 Total Debt At Time of PD Acquisition 12/31/08 9/30/10 in March 2007 (1) Pro Forma ye
Slide 28: Agreement to Invest $500 Million in McMoRan Exploration
|FREEPORT-McMoRAN COPPER & GOLD Agreement to Invest $500 Million in McMoRan Exploration® FCX Tradition of Building Values through Exploration FCX Attracted to Opportunities to Participate in Early Stage Projects that Have Potential to be World Scale McMoRan Investment in the Shallow Waters of the US
Slide 29: Financial Policy
|FREEPORT-McMoRAN COPPER & GOLD Financial Policy » Maintain Strong Balance Sheet & Liquidity Position = Invest in Attractive Growth Projects = Opportunistic Debt Repayment = Board Action to Increase Common Stock Dividend to $2.00/Share per Annum » Board to Review Financial Policy on an Ongoing Basis
Slide 30: FCX Investment Summary
|FREEPORT-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 Flexible Operating Structure Can Respond to Varying Market Conditions Signifi
Slide 31: Slides
Slides
Slide 32: PT-FI Mine Plan
|FREEPORT-McMoRAN COPPER & GOLD PT-FI Mine Plan PI-Fi's Share of Metal Sales 2010e-2015e 2010e — 2015e PT-FI Share Total: 7.2 billion Ibs copper BE copper, billion Ibs Annual Average: 1.2 billion Ibs |) Gold, million ozs 2010e — 2015e PT-FI Share Total: 10.2 million ozs gold Annual Average: 1.7 mill
Slide 33: Grasberg Open Pit
Grasberg Open Pit
Slide 34: Mining Sequence in 2010
— —————— EEPORT-MICMORAN ore! Mining Sequence in 2010 Copper Equivalent Cross Section SE is the Primary Ore Pushback in 2010
Slide 35: Mining Sequence in 2010
— —————— EEPORT-MICMORAN ore! Mining Sequence in 2010 Copper Equivalent Cross Section SE is the Primary Ore Pushback in 2010
Slide 36: Mining Sequence in 2010
—_— —————— EEPORT-MICMORAN ore! Mining Sequence in 2010 Copper Equivalent Cross Section SE is the Primary Ore Pushback in 2010 1s
Slide 37: Mining Sequence in 2010
—_— —————— EEPORT-MICMORAN ore! Mining Sequence in 2010 Copper Equivalent Cross Section SE is the Primary Ore Pushback in 2010 1s
Slide 38: Mining Sequence in 2011
— ————— EEPORT-MICMORAN COPPER & GOLD Mining Sequence in 2011 Copper Equivalent Cross Section 8E and 9N are the Primary Ore Pushbacks in 2011 Ed
Slide 39: Mining Sequence in 2012
————— mie waining Sequence in 2012 Copper Equivalent Cross Section COPPER & GOLD
Slide 40: Mining Sequence in 2013
————— ae Mining Sequence in 2013 Copper Equivalent Cross Section COPPER & GOLD
Slide 41: Mining Sequence in 2014
————— TT Mining Sequence in 2014 Copper Equivalent Cross Section COPPER & GOLD
Slide 42: Grasberg Pit Mine Plan Cross-Sections
rasberg Pit Mine Plan FREEPORT-McMoRAN, COPPER & GOLD ——— Cross-Sections a8 North Wall at year-end 2013 i NW ‘ina ¢ SE Step-in & 9N narrower Ar gn a Previous Plan Improved access to high-grade ore in 2014-2016 Higher grade ore Mine more mm 0.25- 0.99% CuEG mE 1.00- 1.99% CuEq 2.00- 2.999% CuEq 33.00
Freeport Mcmoran Copper & Gold — Q3 2010 Earnings Presentation on 6ix