Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q2 2011 Earnings Presentation
40 slides from Freeport-mcmoran's earnings presentation, Jul 21, 2011
Slide 1: Second Quarter 2011 Earnings Conference Call
FREEPoRT-McMoRAN COPPER & GOLD Connecting the World 24 Quarter 2011 Earnings Conference Call FCX LISTED wer fex.com July 21, 2011 NYSE.
Slide 2: Cautionary Statement
FREEPORT-McMOoRAN 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 sta
Slide 3: 2Q11 Highlights
FREEPORT-McMOoRAN COPPER & GOLD 2Q11 Highligh SalesData ag, 2F00 =H _1H10 Copper Consolidated Volumes (mm Ibs) 1,002 914 1,928 1,874 Average Realization (per Ib) $4.22 $3.06 $4.24 $3.13 Site Production & Delivery Unit Costs (per Ib) $1.63 $1.41 $1.62 $1.38 Unit Net Cash Costs (per Ib) $0.93 $0.97 $0
Slide 4: Quarterly Operating Highlights
FREEPORT-McMOoRAN COPPER & GOLD rE Quarterly Operating Highlights c= 2Q11 Unit Production Costs (per pound of copper) North South America America| Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery ( $1.78 $1.26 $1.93 $1.62 $1.63 By-Product Credits (0.52) (0.37) (2.06) (0.77) (
Slide 5: Markets
FREEPORT-McMOoRAN COPPER & GOLD Markets 2,500 500 2,000 a 400 g LME Copper Price 9 e 2 ‘1,500 aon = U g g 3S 100 200 g ro) 8 a © 500 - 100 ° LME & COMEX Exchange Stocks* ° Jane Jue Jan Jue Jane Jub Jan Jub Jan Jul Jan- Jub Jan- Jule Jan- Jule Jan- Juk Jan- Juk Jan Jub Jan- dik Jan- de % 9 00 00 01 0
Slide 6: Value Creation Focus
FREEPORT-McMOoRAN COPPER & GOLD Value Creation Focus INVESTMENT IN ATTRACTIVE DEVELOPMENT PROJECTS CASH MINERAL RESERVE PRODUCTION FLOWS/ RESOURCES ADDITIONS GROWTH RETURNS
Slide 7: North American Projects
FREEPORT-MicMoRAN North American Projects io re Morenci Mill Restart ‘ x 2 Oe & Morenci Mine Rate Increase Chino Restart
Slide 8: Status of Announced Projects
FREEPORT-McMOoRAN COPPER & GOLD Status of Announced Projects fe Volumes Expansions (in mm lbs/year) Year Status Morenci Mill Restart & Mine Rate Increase 125 2011 complete Miami Mine Restart 100 2012 in progress Chino Mine & Mill Restart 200 2012 |. in progress aaa -2014) Subtotal 425 Tenke Mill & M
Slide 9: Climax Restart
FREEPORT-McMOoRAN COPPER & GOLD Climax Restart Proceeding with Climax Restart = 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 ina flexible manner to meet market heeds Engineering comple
Slide 10: El Abra Sulfolix
FREEPORT-McMOoRAN COPPER & GOLD os El Abra Sulfolix ne fo Commenced production in 1Q11 Sulfolix Stacking = =~ New Leach Pad = Ore crushing, conveying, — es stacking, leaching & PLS transfer systems complete = Currently extending leach pad Project extends life 10+ years— ~300MM lbs Cu/yr aggregate Ap
Slide 11: Long-Term Underground Mine Development in Indonesia
FREEPORT-McMORAN Long-Term Underground Mine COPPER & GOLD Development in Indonesia 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
Slide 12: Underground Ore Bodies
FREEPORT-MicMoRAN 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 13: Near-Term Copper Projects
FREEPORT-MicMoRAN 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 $3.5 2016 Morenci (115K) 225 1.0 2014 Tenke (14K) 150 0.8 2013 TOTAL 975 $5.3 ~1 billion lbs/yea
Slide 14: Copper & Gold Development Opportunities: Morenci Mill Expansion
FREEPORT-McMOoRAN Copren & Go.p Deve /o pi ment Opport unities 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: $1.0 b
Slide 15: Development Opportunities: Cerro Verde Mill Expansion
FREEPORT-McMOoRAN suene“** Development Opportunities (>< Cerro Verde Mill Expansion 7 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: $3.5 billion Incremental Production: 600mm Ibs Cu/year, 15mm lbs Mo/year Reserve Life: 78 year
Slide 16: Development Opportunities: Tenke Fungurume Expansion
FREEPORT-McMOoRAN COPPER & GOLD Development Opportunities (- 4 Si Tenke Fungurume Expansion i: Key Project Metrics Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: $0.8 billion Incremental Production: 150mm Ibs Cu/year in approximate two year
Slide 17: 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 18: Exploration Targets in Major Mineral Districts
FREEPORT-MicMoRAN lCorren oun Exploration Targets in Major Mineral Districts . North Exploration Raiares in 2011e $250 million Australasia & Other Areas Note: FOX's consolidated share; & = estimate, See Cautionary Statement, 18
Slide 19: 2011 Outlook
FREEPORT-McMOoRAN COPPER & GOLD 2011 Outlook » Sales Outlook: ¢ Copper: 3.9 Billion Ibs. ¢ Gold: 1.6 Million ozs. ¢ Molybdenum: 77 Million lbs. » Unit Net Cash Cost(/: $1.01/Ib ~$8 Billion (@$4.25/Ib copper for remaining 6 months) ¢ Each 10¢/Ib Change in Copper = $160 Million in 2011 » Operating Cas
Slide 20: Near-Term Sales Profile
FREEPORT-McMOoRAN COPPER & GOLD Near-Term Sales Profile Excludes current projects under evaluation 2010 2011e 2012e 2013e ‘Tote? Ciasolaed copper sles include spprovimately 756s fin 2010, 725 pm lbs ip 2042, 760 mm fen bie, and 775 mm fin 2013e Fr noncontoling interes, erclder pochaced ‘copper. = es
Slide 21: 2011e Quarterly Payable Metal Sales
FREEPORT-McMOoRAN COPPER & GOLD 2011e Quarterly Payable Metal Sales Gold Sales (thousand ozs Copper Sales (mi 480 1,250 _ ss, ‘ 356 375 300 250 1,000 vs 0 a0 111 2gii aaiie aque ‘SRT aT eae nse ppm 27k oe 101,36 oe O84 ‘bk osc lle anh orn dhie fr oncnvoing ere 500 Molybdenum Sales (million Ibs’ 31 o
Slide 22: 2011 Operating Estimates
FREEPORT-McMOoRAN COPPER & GOLD Pex 2011 Operating Estimates 2011e Unit Production Costs (per pound of copper) North South pe ie America America __Indonesia__Africa Consolidated Cash Unit Costs 4) Site Production & Delivery 2) $1.80 $1.37 $2.07 $1.54 $1.70 By-product Credits (0.48) (0.34) (2.43) (0.
Slide 23: EBITDA and Cash Flow at Various Copper Prices
FREEPORT-McMOoRAN COPPER & GOLD EBITDA and Cash Flow at Various Copper Prices ($1,200 Gold & $12 Mol $15 $12 $9 $6 $3 $0 (US$ billions) Cu $3.50/Ib Cu $4.00/Ib Cu $4.50/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1,200 Gold & $12 Molybdenum) $10 $e $6 $4 $2 $0 (US$ billions
Slide 24: Sensitivities
FREEPORT-McMOoRAN COPPER & GOLD Sensitivities (US$ millions) Copper: -/+ $0.10/Ib $390 $270 Molybdenum: -/+ $1.00/Ib $75 $60 Gold: -/+ $50/ounce $70 $40 Diesel: -/+ 10% $85 $60 Purchased Power™: -/+ 10% $45 $35 Currencies™: +/- 10% $130 $100 (i) 92-40/galion base case assumption. (2)7-44fk\th base c
Slide 25: Capital Expenditures
FREEPORT-MicMoRAN COPPER & GOLD Capital Expenditures ( Excludes current projects under evaluation (US$ billions) $3.0 mMajorProjects mAllOther $2.5 $2.0 $1.55 $1.0 $0.5 $0.04 2010 2011e 2012e (1) Capital expenditure estimates willcontie to be reviewed andrevisad subject to market conditions. (2) Pri
Slide 26: Balance Sheet
FREEPORT-McMOoRAN COPPER & GOLD rE Balance Sheet fo ae Repaid $3.8 bn in Debt Since (US$ billions) YE 2008 (~50% Reduction) $20 5 oo a $17.6 @ Significant Liquidity Strong Credit Metrics $15 No Near-term Maturities Investment Grade Rated by S&P, Moody's, Fitch $10 + Total Debt $5 7 $0 At Time of PD
Slide 27: Financial Policy
FREEPORT-McMOoRAN 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 & June
Slide 28: FCX Investment Summary
FREEPORT-McMOoRAN 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 Signif
Slide 29: Reference Slides
Reference Slides
Slide 30: PT-FI Mine Plan
FREEPORT-McMOoRAN bee PT-FI Mine Plan PT-FI’sShare of Metal Sales, 2011e-2015e 2011¢ — 2015e PT-FI Share Total: 5.9 billion Ibs copper BE copper, billion Ibs Annual Average: 1.2 billion Ibs Gold, million ozs 2011e—2015e PT-FI Share Total: 8.35 million ozs gold Annual Average: 1.7 million ozs u6 17 1
Slide 31: Grasberg Open Pit
FREEPORT-MicMoRAN COPPER & GOLD Pi Grasherg Open it of Me
Slide 32: Grasberg Mining Sequence in 2011
FREEPORT-MicMoRAN somaese® Mining Sequencein 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq *9N isin ore north of this cross-section 32
Slide 33: Grasberg Mining Sequence in 2011
FREEPORT-MicMoRAN somaese® Mining Sequencein 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq *9N isin ore north of this cross-section 33
Slide 34: Grasberg Mining Sequence in 2011
FREEPORT-MicMoRAN somaese® Mining Sequencein 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq *9N isin ore north of this cross-section 34
Slide 35: Grasberg Mining Sequence in 2011
FREEPORT-MicMoRAN somaese® Mining Sequencein 2011 Copper Equivalent Cross Section Legend: mm 0.25 - 0.99% CuEq 1.00 - 1.99% CuEq mE 2.00 - 2.99% CuEq mE >3.00% CuEq *9N isin ore north of this cross-section 35
Slide 36: Grasberg Mining Sequence in 2012
FREEPORT-MicMoRAN soraese® 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 mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 37: Grasberg Mining Sequence in 2013
FREEPORT-MicMORAN Somes’ 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 mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 38: Grasberg Mining Sequence in 2014
FREEPORT-MicMORAN Swrae’ 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 mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 39: Grasberg Mining Sequence in 2015
FREEPORT-MicMORAN “rave 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 mE 2.00 - 2.99% CuEq mE >3.00% CuEq
Slide 40: Grasberg Mining Sequence in 2016
FREEPORT-MicMORAN “erase 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 ME 2.00 - 2.99% CuEq jm >3.00% CuEq
Freeport Mcmoran Copper & Gold — Q2 2011 Earnings Presentation on 6ix