Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Harvard Business Club (January 2008)
21 slides from Freeport-mcmoran's conference presentation, Jan 17, 2008
Slide 1: Harvard Business Club
Harvard Business Club Richard C. Adkerson Chief Executive Officer Phoenix, Arizona January 17, 2008 1
Slide 2: Ertsberg
Ertsberg In 1936, high in the mountains of the island of New Guinea, a young Dutch geologist, Jean Jacques Dozy, made a remarkable discovery: Ertsberg, a glistening black outcropping of high-grade copper ore. Ertsberg, the largest above- ground deposit the world had ever seen, had initial reserves o
Slide 3: Grasberg
Grasberg Freeport geologists led an expedition to Ertsberg in 1960. Rights to the mine were negotiated. After pioneering a near-impossible road through swamps and mountains, Freeport first produced copper from Ertsberg in 1972. About 15 years later, Grasberg Freeport found Grasberg. Grasberg, though
Slide 4: Grasberg
Grasberg 4 4
Slide 5: Exploration Drives the Mine Plan
Exploration Drives the Mine Plan “GRS-4 was really the hole that turned the tide of the project. Grasberg warranted full support of our resources.” Hole GRS-4 intercepted 591 meters of ore at 1.7% copper & 1.8 g/t gold. May May 1988 1988 5 5
Slide 6: Development & Expansion
Development & Expansion “We “We quickly quickly developed developed aa pit pit plan. plan. … … We We also also began began studying studying the the possibility possibility for for further further expansions, expansions, soso that that we we would would bebe prepared prepared if if our our geologist
Slide 7: Grasberg
Grasberg The Grasberg is expected to yield over 2.2 billion metric tons of ore from the pit and block cave when we complete mining the reserve and exploration continues. Grasberg is an incredible mineral find, a Cu-Au porphyry so large and rich that it will take at least a half century to mine. 7 7
Slide 8: Grasberg Reserves
Grasberg Reserves Plan View Grasberg & Complex contains Kucing Liar N 1.04%Final Pit the world’s largest Ertsberg East Skarn System copper & gold Grasberg Pit 0.90 g/t reserves Big Gossan Dom Cu Au in the world. Common Infrastructure Grasberg Reserve Grades Underground Dom Ertsberg East Skarn System
Slide 9: Grasberg Block Cave
Grasberg Block Cave P| ff
Slide 10: $26 Billion Acquisition of Phelps Dodge
$26 Billion Acquisition of Phelps Dodge • Completed in March 2007 • Created the World’s Largest Publicly Traded Copper Company • Completed $17.5 Billion in Financing for Acquisition • Largest Transaction in the History of the Metals & Mining Industry • Fortune 125 Company based on Pro Forma 2006 Rev
Slide 11: Significant Increase in Scale
Significant Increase in Scale Mines Operated FCX Cash Flow Comparison ($ ($ in in billions) billions) 12 12 $6.2 $6.2 $1.9 $1.9 11 FCX Pre-merger FCX Post-merger* 2006 2006 Actual Actual 2007 2007 Estimate* Estimate* ** Company Company isis also also developing developing aa new newcopper copper min
Slide 12: World's Leading Public Copper Company
World’s Leading Public Copper Company Top Top 10 10 Copper Copper Producers Producers (2007E) (2007E) (000 (000 t) t) 2,000 2,000 Pro Pro forma forma FCX FCX is is poised poised to to take take advantage advantage of of 1,800 1,800 favorable favorable industry industry fundamentals fundamentals 1,60
Slide 13: Geographically Diverse, Long-Lived Asset Base
Geographically Diverse, Long-Lived Asset Base Major Major Mine Mine Operations Operations & & Development Development Projects Projects All All major major assets assets majority-controlled majority-controlled and and operated operated North North America America11 Grasberg (90.64%) Copper Reserves
Slide 14: Morenci
Morenci North America’s largest single producer of copper 14 14 14
Slide 15: Cerro Verde
Cerro Verde Recently Completed Major Sulfide Mill Expansion 15 15
Slide 16: Tenke Fungurume
Tenke Fungurume 16 Believed to be Largest, Undeveloped High Grade Cu/Co Project in the World 16
Slide 17: Molybdenum Henderson
Molybdenum FCX is the World’s Largest Molybdenum Producer, including primary production from Henderson 17 Henderson 17 17
Slide 18: Climax
Climax World’s Largest, Highest Grade Undeveloped Moly Resource Proceeding with Restart, Targeting First Production in 2010 18 18
Slide 19: Strong Markets
Strong Markets 2,000 Copper Price ($/lb) 400 1,750 350 Cents 1,500 300 Cents Per Tons Metric Tons 1,250 250 LME LME Copper Copper Price Price Per Pound 000’s Metric 1,000 200 Pound 750 150 000’s 500 100 250 50 LME & COMEX Exchange Stocks* 0 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 J
Slide 20: Strong Financial Profile
Strong Financial Profile Capitalization, Net of Cash ($ ($ in in billions) billions) $12.1 $36.2 $49.3 12/31/2006 (1) At Closing of PD Current (3) Acquisition (2) Net Debt Net $6.3 Market Cap Debt $12.3 Market $14.2 Cap $22.0 Market Cap $43.0 __________ __________ (1) (1) Based Based on on December
Slide 21: FCX Investment Summary
FCX Investment Summary • World’s Premier Publicly Traded Copper Company • World Class, Long-lived, Geographically Diverse Operations • Attractive Project Pipeline Supports Growing Production Profile • Significant Exploration Potential • Strong Cash Flows and Financial Strength 21
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