Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q3 2019 Earnings Presentation
31 slides from Freeport-mcmoran's earnings presentation, Oct 23, 2019
Slide 1: 3rd Quarter 2019 Earnings Conference Call
| FREEPORT-McMoRaAn 3 Quarter 2019 Earnings Conference Call October 23, 2019 x» ] ae = PROVEN ASSETS. FUNDAMENTAL VALUE. fex.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement ra Regarding Forward-Looking Statements fueMREvEA le 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 plans, projections
Slide 3: Proven Assets: Multiple Catalysts to Build Value
=a PROVEN A VEN A ‘ASS ON 3 ress On o Pa = Long-lived, Low-cost Reserves = Within Budget & On Schedule = Margin Expansion = Progressing on Schedule = First Copper Production = Capital Efficiency/Reserve Upside = Production Rates Ahead of Expected ir: Cate 2020 = Results Continue to be Positive — For
Slide 4: Executing The Plan
Executing The Plan PROVEN ASSES. FUNDAMENTAL VALUE. Growing Sales Profile (1) Declining Unit Net Cash Costs” Strong Financial Results & EBITDA” Generation 2019e v. 2021e ~30% ~70% Increase Increase in Copper in Gold ~25% Reduction in Unit Costs 1 00 % + With Leverage to Improved Increase Copper Mark
Slide 5: Grasberg — One of the World's Largest Copper & Gold Deposits
Grasberg — One of the World’s Largest Copper & Gold Deposits se lliaide ' J PROVEN ASSETS. Impressive Past / Robust Future FUNDAMENTAL VALUE. Historical Future Open Pit Era (1990 — 2019e) Underground Era (2020e — 2041e) “ape fy. Spe Grasberg Block Cave Kucing Total Material Mined (bn 1) Strip Ratio
Slide 6: Underground Ramp-up Continued Progress in 3Q19
Eva) Underg grour Sgt? N PROVEN ASSETS Contint ued F Progr n3Q.z FUNDAMENTAL VALUE. Grasberg Block Cave & Deep MLZ Averaged 20,400 t/d — Ahead of Forecast Grasberg Block Cave DMLZ Grasberg Block Cave DMLZ Cumulative: 61,000 Cumulative: 63,000 At Full Production: 5 At Full Production: 3 3 i ia . 2 10
Slide 7: Lone Star Leach Development in Arizona
Lone Star Leach Development in Arizona rn Sc ; PROVEN ASSETS. Building Value in New U.S. Cornerstone Asset FUNDAMENTAL VALUE. = Low-Risk Development in Established 4 Mining District; Wholly Owned = Located 8 miles North of Safford; 18 miles Southwest of Morenci = $850mm Initial Project (2/3 Complete
Slide 8: Driving Productivity Through Innovation Across Our Portfolio
Driving Productivity Through Innovation va) PROVEN ASSETS. Across Our Portfolio FUNDAMENTAL VALUE, Opportunity Fueled By Equivalent to New Concentrator = 200 mm Ibs of Incremental Copper Production per Annum = Low Capital = Reduced Unit Costs = Unlock Additional Resource Values Bagdad Case Study res
Slide 9: Copper Market
Copper Market re : . PROVEN ASSETS. Current Low Price Not Sustainable FUNDAMENTAL VALUE. Copper Price Structurally Supported (S per pound) by Fundamentals = Inventories Remain Low $4.62 by Historical Standards = Mine Supply is Limited; Project Pipeline is Thin = Demand is Growing - Decarbonization =
Slide 10: FCX - Compelling Investment Opportunity
Pon FCX - Compelling Investment Opportunity __, Povenassers. FUNDAMENTAL VALUE. Portfolio of High- Industry Leader Quality Copper Assets with Sizé, Scale Difficult to Replicate 4 ie and Durability Strong TrackRecord& Commitment to Growing Production Communities and and Cash Flow Profile Environmenta
Slide 11: Financial Outlook
Financial Outlook PROVEN ASSETS. FUNDAMENTAL VALUE. _ FReepont-McMoRan
Slide 12: 3Q19 Highlights
3Q19 Highlights Laer FUNDAMENTAL VALUE. Production mm Ibs Sales mm Ibs 390 395 =o Bee 350 = 3Q19 Production Up 12% from 3Q18 oe + Bagdad Up ~29% = § * Morenci Up ~17% (Leach) 3018 3019 3018 3019 « Above Forecast Pts 325 283 526 261 = Cerro Verde Impacted by: 3 = - External Events ” & * Mine Sequenci
Slide 13: Sales Profile
1 PROVEN ASSETS. Sales Profile FUNDAMENTAL VALUE. Ke Witton bs) (million ozs) 5 3 3.8 3.3 3 2 1 0 2018 2.4 4.2 1.45 a 1 087 0.85 [| ; i 2018 2019e ——-2020e 2021e Transition Years Note: Consolidated gold sales include 223k ozs in 2018, 160k ozs in 2019e, 2020e 155k ozs in 2020e and 270k ozs in 2021e
Slide 14: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow myn at Various Copper Prices FUNDAMENTAL VALE ($ inbn) EBITDA ($1,500/0z Gold, $12/Ib Molybdenum) $10 $8 $6 $4 : | a LJ $0 2020e ‘21el’22e Cu $2.75/Ib Cu $3.00/Ib Cu $3.25/Ib Operating Cash Flow Excludes Working Capital Changes ($1,500/o0z Gold, $12/Ib Molybdenum) $8 $6 $4 | oe
Slide 15: Capital Expenditures
($ inbn) --—- Net of Scheduled Contributions $2.6 $2.57) $2.57 $1.2 Major Mining Projects $0.8 Other Mining 2018 2019e 2020e (1) Major mining projects include CAPEX associated with Grasberg underground development ($1.0 bn in 2019e and $0.95 bn in 2020e), supporting mill and power capital costs at G
Slide 16: FCX/FMC Senior Notes Maturity Profile
FCX/FMC Senior Notes Maturity Profile ava " PROVEN ASSETS. Post 3Q 2019 New Issuance/Refinancing FUNDAMENTAL VALUE. Total Debt & Cash at9/30/19 3Q19 New Issuance/ Senior Notes Refinancing Before After (USS billions) ; ‘ = = Cerro Verde Credit Facility . Weighted Average Maturity 8.7 years 9.8 years
Slide 17: Executing Clearly Defined Strategy to Build Value for Shareholders
Executing Clearly Defined Strategy to Bava) - PROVEN ASSETS. Build Value for Shareholders FUNDAMENTAL VALUE. Substantial Growth in Cash Flow = Growing Sales Continued Profile Execution of Grasberg = Declining Unit Underground Costs Innovation-Driven] Ramp-up = Doubling EBITDA Productivity & Cash Flo
Slide 18: Reference Slides
Reference Slides PROVEN ASSETS. FUNDAMENTAL VALUE. _ FReepont-McMoRan
Slide 19: Financial Highlights
Financial Highlights nena wae 9 mos. Ended | Sales Data Data 3Q19 9/30/19 Copper Consolidated Volumes (mm /bs) 795 2,386 Average Realization (per /b) $2.62 $2.71 Site Production & Delivery Costs (per /b) $2.05 $2.16 Unit Net Cash Costs (per /b) $1.59 $1.76 Gold Consolidated Volumes (000’s ozs) 243 6
Slide 20: 3Q19 Mining Operating Summary
3Q19 Mining Operating Summary a : : North South 3Q19 Unit Production Costs [(girigen) America America Indonesia Consolidated Cash Unit Costs Site Production & Delivery, excluding adjustments $2.03 $1.89 $2.44 $2.05 By-product Credits (0.22) (0.26) (2.64) (0.66) Treatment Charges 0.11 0.17 0.25 0.16
Slide 21: 2019e Outlook
mr 2019e Outlook PROVEN ASSETS. FUNDAMENTAL VALUE. = Copper: 3.3 Billion Ibs. = Gold: 874 Thousand ozs. = Molybdenum: 92 Million Ibs. Sales Outlook Unit Cost = Site Production & Delivery 2019e: $2.14/Ib (4Q19e: $2.09/Ib) of Copper. = After By-product Credits 2019e: $1.76/Ib™ (4Q19e: $1.76/Ib) Operat
Slide 22: 2019e Operating Estimates
; : ra 2019e Operating Estimates PROVEN ASSETS. FUNDAMENTAL VALUE. z = North South 2019e Unit Production Costs [Sgxceo Meru America Indonesia Consolidated Cash Unit Costs () Site Production & Delivery (2 $2.04 $1.82 $2.98 $2.14 By-product Credits (0.25) (0.28) (1.96) (0.60) Treatment Charges 0.11 0.
Slide 23: World Class Block Cave Design
World Class Block Cave Design ro PROVEN ASSETS. FUNDAMENTAL VALUE. Substantial Infrastructure in Place to Support Large-Scale Production Ramp-up Schedule Ramp-up Schedule (000's Ud of Ore) (000's Ud of Ore) aso 80 80 103 59 ~ ; 8 3CaveFronts ~~ z 2 Cave Fronts 2019e 2020e 2021e 2022e 2023e 2019e 202
Slide 24: PT-FI Mine Plan
PT-FI Mine Plan rn PROVEN ASSETS. Metal Sales, 2019e-2023e FUNDAMENTAL VALUE. | Copper | 2019e-2023e | er | 2019e-2023e Total: 6.2 billion lbs copper Total: 6.7 million ozs gold Annual Average: 1.24 billion Ibs Annual Average: 1.33 million ozs 1.7 —_—— Transition Years —————> Note: Amounts are proje
Slide 25: 2019e Quarterly Sales
2019e Quarterly Sales | CopperSales | (million Ibs) 870 900 784 807 795 FF 1019 2019 3Q19 4Q19e Note: Consolidated copper sales indude approximately 168 mm ibs in 1219, 163mm ibs in 2019, 149mm lbs in 3Q19 and 190mm Ibs in 4Q19e for e = estimate. See Cautionary Statement. PROVEN ASSETS. FUNDAMENTAL
Slide 26: Sensitivities
Sensitivities PROVEN ASSETS. FUNDAMENTAL VALUE. (US$ millions) Operating 2020e Change EBITDA Cash Flow Copper: +/- $0.10/Ib $335 $265 Molybdenum: +/- $1.00/Ib $85 $75 Gold: +/- $50/ounce $40 $25 Currencies: +/- 10% $195 $135 | 2021¢-2022e Avg. Change _| e-2022e Avg. Change Copper: +/- $0.10/Ib $425
Slide 27: Copper Price Realization
N10 CC 19 Copper R 3Q19 LME Average Copper Price $2.63/Ib 3-Mo. Fwd Price for Copper $2.59/Ib at the End of September : $2.62/Ib™ (Generally, 50/50 Weight of Qtrly Avg and 3-mo Forward Priceat End of Period) FCX 3Q19 Consolidated Copper Price Realization FCX 3Q19 Prior Period Revenue/EBITDA: $(42) m
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation PROVEN ASSETS. FUNDAMENTAL VALUE. (in millions) 12 mos ended 3Q19 9/30/19 Net (Loss) Income Attributable to Common Stock — Continuing Operations $ (132) $307 Interest expense, net 123 910 Income tax provision (benefit) 150 (312) Depreciation, depletion and amortization
Slide 29: Underground Block Cave Mine Development: Grasberg Block Cave
Underground Block Cave Mine Development ava) . PROVEN ASSETS. Grasberg Block Cave Development Diagram FUNDAMENTAL VALUE. Undercut Ring Cave Muckpile Drilling Drawbell Drilling Undercut Level 2a50mekvation, “= i. i Vf Srey & Rock Breaker 2830m Elevation Extraction Level y Orepass Service Level 2810m
Slide 30: Underground Block Cave Mine Development: Deep MLZ
Underground Block Cave Mine Development ava) Deep MLZ Block Cave Development Diagram FUNDAMENTAL VALUE Hydro Fractured Ground Undercut Ring Cave Muckpile Drilling Drawbell Drawbell Drilling Undercutitevel 2600m Elevation Slop Raise Grizzly Extraction Level & Rock Breaker 2585m Elevation Loading Chut
Slide 31: Glossary of Key Terms
Underground Block Cave Mine Development Fon PROVEN ASSETS. Glossary of Key Terms FUNDAMENTAL VALUE. AirGap Block Caving Cave Cave Front Cave Muck Pile Drawbelling Drawpoints Drill Ring Extraction Level ‘space between the cave muck pile and the uncaved ore above it mass mining method that primarily u