Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q3 2011 Earnings Presentation
41 slides from Freeport-mcmoran's earnings presentation, Oct 19, 2011
Slide 1: 3rd Quarter 2011 Earnings Conference Call
Freeport-McMoRAN /=v" Copper & GoLp Connecting the World 34 Quarter 2011 Earnings Conference Call FCX LISTED wwnw.fex.com October 19, 2011 NYSE
Slide 2: Cautionary Statement
FREePoRT-McMoRan Copper & GoLD Cautionary Statement sc 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 statements of historical facts, such as stat
Slide 3: 3Q11 Highlights
FREePoRT-McMoRan 3Q11 Highligh Copper & GoLD SalesData QA 8Q10 9-011 9-mo 10 Copper Consolidated Volumes (mm Ibs) 947 1,081 2,875 2,955 Average Realization (per Ib) $3.60 $3.50 $3.94 $3.33 Site Production & Delivery Unit Costs (per Ib) $1.71 $1.38 $1.65 $1.38 Unit Net Cash Costs (per Ib) $0.80 $0.82
Slide 4: Balance Sheet
Copper & GoLD os Balance Sheet fo ae Repaid $3.8 bn in Debt Since (US$ billions) YE 2008 (~50% Reduction) 920 $17.6 @ Significant Liquidity Strong Credit Metrics $15 No Near-term Maturities Investment Grade Rated by 3 S&P, Moody's, Fitch & $10 | 2 $5 $0 ~ At Time of PD Acquisition 12/31/08 9/30/11 i
Slide 5: Quarterly Operating Highlights
Copper & GoLD os Quarterly Operating Highlights c= 3Q11 Unit Production Costs {per pound of copper} North South America America| Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery ( $1.86 $1.38 $1.98 $1.55 $1.71 By-Product Credits (0.55) (0.36) (2.80) (0.51) (1.09) Treatment Ch
Slide 6: Markets
FREePoRT-McMoRan Copper & GoLD Markets 2,500 500 2,000 = 400 g LME Copper Price ° £ g G 1,500 300 E :) g g 3S 100 200 g 3 2 © soo - 100 ° LME & COMEX Exchange Stocks* —, Jane Jue Jan Jue Jane Jue Jan- Jue Jan Jue Jan Jub Jane Jub Jane Jub Jan Jul Jan Jub Jan- Jub Jan- Jul Jan- Jul 9 99 0) OO O O1 G2
Slide 7: Copper Market Commentary
Freeport-McMoRAN Copper & GOLD Copper Market Commentary = Macro-Economic Factors Influencing Investor Sentiment & Financial Markets = Physical Markets Remain Relatively Tight = Supply Side Constraints Continue = Expect Near-Term Volatility = Positive Medium/Long-Term Outlook
Slide 8: Labor Situations
Freeport-McMoRAN Copper & GOLD Labor Situations Grasberg PT-FI has Worked in Good Faith to Reach a Mutually Satisfactory Agreement with Union Strike has No Basis Under Indonesian Law PT-FI Designated as a “Vital National Object” — Supported by Government PT-FI's Pay Package is at the Top for Workers
Slide 9: Value Creation Focus
FREePoRT-McMoRan Copper & GoLD Value Creation Focus CASH FLOWS/ RETURNS ____FCXCopper Resources at 12/31/2010 120 bn lbs Recoverable Reserves 110 bn Ibs Mineralized Material (contained) © Total Reserves /& Mineralized Material 230 bn Ibs (a) Estimate of recoverable proven and probable conpe’ reserve
Slide 10: North American Copper Projects
FREePoRT-McMoRan North American Copper Projects 7 eS at x = CAI Chino Restart (c) FR <8 ny
Slide 11: Climax Molybdenum Restart
FREePoRT-McMoRan Copper & GoLD Climax Molybdenum Restart Advanced Stage Project = Start-up in 2012 with ramp up to 20mm lbs/year during 2013 =" Depending on market conditions, Climax may increase to 30mm Ibs/yr = FCX will operate its Mo mines in a flexible manner to meet market needs Construction 80
Slide 12: Abra Sulfolix Project
ee ET Abra Sulfolix Pet « Commenced production in Sulfolix Stacking 1Q11 Portable Stacker = Ore crushing, conveying, stacking, leaching & PLS transfer systems complete = Currently extending leach pad ¢ Project extends life 10+ years— ~300MM lbs Cu/yr aggregate ¢ Approximate $725MM project through 20
Slide 13: Long-Term Underground Mine Development in Indonesia
Long-Term Underground Mine Copper & GoLD Development in Indonesia SG ~~; y Grasberg Block Cave Significant undeveloped UG reserves = Aggregate reserves of 37 billion lbs Cu & 33 million ozs Au DOZ expanded to 80K t/d Initiated mining at Big Gossan — full rates of 7K t/d by late 2012 Grasberg Block C
Slide 14: Underground Ore Bodies
FREePoRT-McMoRan Copper & GoLD Underground Ore Bodies Significant UG reserves close to existing mill facilities; topography allows for horizontal access to UG ore bodies Large-scale & high-grade with economies of scale; UG production expected to reach 240K t/d Highly efficient block cave operations;
Slide 15: Near-Term Copper Projects Under Evaluation
Near-Term Copper Projects Copper & GoLD Under Evaluation Incremental Preliminary Copper Capital* Achieve Mill Expansions (mm Ibs/year) —($ billions) — Full Rates Cerro Verde (360K) 600 $4.0 2016 Morenci (115K) 225 1.2 2014 Tenke (14K) 150 _ 0.9 2013 TOTAL 975 $6.1 ~1 billion lbs/year Incremental Cu
Slide 16: Development Opportunities: Morenci Mill Expansion
Copper & GoLD De velopment Opportunities re. Morenci Mill Expansion Sig —~ 7 Positive drillingresults continue to expand potential milling sulfide resource in this multi-year program 6 Copper (bin Ibs) Increase mining rate to 900K st/d 26. (from 700K st/d) Capital costs: ~$1.2 billion 14.5 a Increme
Slide 17: Development Opportunities: Cerro Verde Mill Expansion
“ernsne“*** Development Opportunities re. Cerro Verde Mill Expansion EE Key Project Metrics Expand mill from 120K t/d to 360K t/d Increase mining rate from 320K t/d to 850K t/d Capital costs: ~$4 billion Incremental Production: 600mm Ibs Cu/year, 15mm lbs Mo/year Reserve Life: 78 years current, Cu R
Slide 18: Development Opportunities: Tenke Fungurume Expansion
“ernsne“*** Development Opportunities Tenke Fungurume Expansion Si |—~. 7 Key Project Metrics Kwatebala Mine Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: $850 million Incremental Production: 150mm Ibs Cu/year in approximate two year timef
Slide 19: Potential Additional Projects
Potential Additional Projects fe North America South America e Sulfides/Mill Projects El Abra Mill «Large Scale Morenci " Sierrita "Bagdad Aftica . “Ajo e Future Expansion of Tenke Oxides = Twin Buttes e Safford/Lone Star Tenke Sulfides
Slide 20: Exploration Targets in Major Mineral Districts
Coreen «oun Exploration Targets in Major Mineral Districts H North Exploration Raiares in 2011e $250 million Australasia & Other Areas Note: FOX's consolidated share; & = estimate, See Cautionary Statement, 20
Slide 21: 2011 Outlook
FREePoRT-McMoRan Copper & GoLD 2011 Outlook » Sales Outlook: « Copper: 3.8 Billion Ibs. ° Gold: 1.6 Mi ¢ Molybdenum: 78 Million Ibs. ion ozs. » Unit Net Cash Cost(@: ° $0.95/Ib » Operating Cash Flows): ~$7 Billion (@$3.25/lb Copper for 4Q11) ¢ Each 10¢/lb Change in Copper in 4Q11 = $75 Million in 20
Slide 22: Near-Term Sales Profile
FREePoRT-McMoRan Copper & GoLD Near-Term Sales Profile Excludes current projects under evaluation 2010 2011e 2012e 2013e ‘Foie? Coasolared copper sles inclode spprovimately 756s fs in 2010, 725 pm bs ip 2042, 785 mm fe in bi, and 770 mm fin 2013e Fr noncontoling interes, erclder pochaced ‘copper. Go
Slide 23: 2011e Quarterly Payable Metal Sales
FREePoRT-McMoRan Copper & GoLD 2011e Quarterly Payable Metal Sales Gold Sales (thousand ozs Copper Sales (million Ibs) 500 7 mom 1,250 409 356 375 a8 250 1,000 125 0 250% 1911 2qi1 3aqit aqiie ‘Tea CaSoTEeT GoM sles inde aporoinately 7k os in 1QHt, 36 om 2084 ib oxen 3GL! and 31k on tt fr noncorong
Slide 24: 2011 Operating Estimates
Copper & GoLD Pe. 2011 Operating Estimates 2011e Unit Production Costs (per pound of copper) North South Pere America__America__Indonesia__ Africa Consolidated Cash Unit Costs (7) Site Production & Delivery = $1.81 $1.36 $2.06 $1.56 $1.70 By-product Credits (0.50) (0.35) (2.37) (0.61) (0.94) Treatme
Slide 25: EBITDA and Cash Flow at Various Copper Prices
corene® EBITDA and Cash Flow at Various Copper Prices ($1,200 Gold & $12 Mol $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)* ($1,200 Gold & $12 Molybdenum) $8 (US$ billions) $6 $4 $2 $0 Cu $3.00/Ib Cu $3.50/Ib Cu $4.
Slide 26: Sensitivities
FREePoRT-McMoRan Copper & GoLD Sensitivities (US$ millions) Copper: -/+ $0.10/Ib $380 $265 Molybdenum: -/+ $1.00/Ib $75 $60 Gold: -/+ $50/ounce $70 $40 Diesel: -/+ 10% $80 $60 Purchased Power™: -/+ 10% $45 $35 Currencies™: +/- 10% $130 $100 (i) $3-40lgalion base case assumption. (2) 6.7¢hkWwh baseca
Slide 27: Capital Expenditures
FREePoRT-McMoRan Copper & GoLD Capital Expenditures ( Major Projects [AllOther [1 Near-term Projects Under Evaluation? (US$ billions) $59 $44 $3.7 $3 4 $2.6 7) $1.4 $15 $0 5 2010 2011e 2012e (1) Capital ewenditure estimates willcontiwe to be reviewed andrevisad subject to market conditions. (2) Prim
Slide 28: Financial Policy
FREePoRT-McMoRan Copper & GoLD Financial Policy = Maintain Strong Balance Sheet & Liquidity Position = Invest in Attractive Growth Projects = Opportunistic Debt Repayment = Current Common Stock Dividend Rate: $1.00/Share per Annum = Paid ~$950 Million in Supplemental Dividends (December 2010 and Jun
Slide 29: FCX Investment Summary
FREePoRT-McMoRan Copper & GoLD FCX Investment Summary cc 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 30: Reference Slides
Reference Slides
Slide 31: PT-FI Mine Plan
FREePoRT-McMoRan Copper & GoLD PT-FI Mine Plan PT-FI’sShare of Metal Sales, 2011e-2015e gz Copper, billion Ibs Gold, million ozs 1.45 1.0 10 10 | / 2011e 2012e 2011¢ — 2015e PT-FI Share Total: 5.9 billion Ibs copper Annual Average: 1.18 billion Ibs 2011¢— 2015e PT-FI Share Total: 8.15 million ozs go
Slide 32: Grasberg Open Pit
FREePoRT-McMoRan Copper & GOLD Grasberg Open Pit Me
Slide 33: Mining Sequence in 2011
Copper & GoD Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq *9N isin ore north of this cross-section 33
Slide 34: Mining Sequence in 2011
Copper & GoD Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq *9N isin ore north of this cross-section 34
Slide 35: Mining Sequence in 2011
FREePoRT-McMoRan Copper & GoD Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq *9N isin ore north of this cross-section 35
Slide 36: Mining Sequence in 2011
FREePoRT-McMoRan Copper & GoD Mining Sequence in 2011 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq *9N isin ore north of this cross-section 36
Slide 37: Mining Sequence in 2012
FREePoRT-McMoRan Copper & GoD Mining Sequence in 2012 Copper Equivalent Cross Section 9N is the Primary Ore Pushback in 2012 Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq
Slide 38: Mining Sequence in 2013
FREePoRT-McMoRan Copper & GoLo Mining Sequence in 2013 Copper Equivalent Cross Section 9N and 9S are the Primary Ore Pushbacks in 2013 Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq
Slide 39: Mining Sequence in 2014
FREePoRT-McMoRan Coprer & GoLD Mining Sequence in 2014 Copper Equivalent Cross Section 9N and 9S are the Primary Ore Pushbacks in 2014 Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq
Slide 40: Mining Sequence in 2015
FREePoRT-McMoRan Copper & GoLD Mining Sequence in 2015 Copper Equivalent Cross Section 9S is the Primary Ore Pushback in 2015 Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq
Slide 41: Mining Sequence in 2016
FREePoRT-McMoRan Copper & GoLo Mining Sequence in 2016 Copper Equivalent Cross Section 9S is the Primary Ore Pushback in 2016 Legend: mm 0.25- 0.99% CuEq mm 1.00 - 1.99% CuEq } mm 2.00 - 2.99% CuEq mm >3.00% CuEq
Freeport Mcmoran Copper & Gold — Q3 2011 Earnings Presentation on 6ix