Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q2 2020 Earnings Presentation
39 slides from Freeport-mcmoran's earnings presentation, Jul 23, 2020
Slide 1: FCX Conference Call 2nd Quarter 2020 Results
FREEPORT FCX Conference Call 2d Quarter 2020 Results July 23, 2020 FCX fex.com = FREEPORT-McMoRAN
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements 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, timing or expe
Slide 3: Meeting the Challenge - 2Q 2020 Highlights
Meeting the Challenge - 2Q 2020 Highlights FREEPORT FOREMOST IN COPPER April Key Stats Actual | Estimate = Prioritizing health and safety Copper Sales (mm its) 759 = Strong execution of April 2020 revised operating plans Gold Sales (ozs) 184 ° Copper & gold sales 10-12% above target Unit Net Cash Co
Slide 4: Supporting Communities Where We Operate
Supporting Communities Where We Operate FREEPORT Providing Monetary and In-kind Contributions of Medical Supplies and Food ie Sse — q FOREMOST IN COPPER FCX has been using the strength of its global supply chain to acquire, purchase, donate and deliver much needed medical supplies and more to COVID-
Slide 5: 2019 Annual Reports on Sustainability & Climate
2019 Annual Reports on Sustainability & Climate —_ Freeport “Building on Strength” 2019 Annual Report on Sustainability 2019 Climate Report SS <. BUILDING ON STRENGTH imate Report 19th consecutive year FCX has published a Inaugural Climate Report published in June 2020 comprehensive report on sustai
Slide 6: Copper Gaining Momentum
Copper Gaining Momentum is M& Market Vay Commentary Chinese economy recovering Global fiscal & monetary stimulus adding support Supply constraints in focus - Mine supply « Scrap scarcity Declining stocks - Market well positioned as economies recover Higher price required to incentivize >5Mt/a mine s
Slide 7: Copper — Metal for the Future
Copper — “Metal for the Future” FREEPORT = Essential metal in a digital world = Critical to the technologies necessary to deliver clean energy and support the global transition to a low-carbon economy « By 2030, copper could reduce global carbon emissions by 16%* « Identified products that will requ
Slide 8: Cerro Verde Update
Cerro Verde Update FREEPORT FOREMOST IN COPPER = Safely & effectively restoring production under strict COVID-19 restrictions = In June, averaged 316,800 mt/d (~80% of 2019 avg) = Expect rates to improve to ~350,000 mt/d in 2H20e = Growing to 400,000 mt/d over time Average Mill Rate (000's mt/d) : Y
Slide 9: Grasberg Underground Ramp-up Accelerating
_Grasberg Underground Ramp-up Accelerating FREEPORT 400% 2021e-2023e Annual Average 3 1.55 bn Ibs Cu & 1.6 mm ozs Au 38 nq =o Ci ZN 75% con <3 5 eo SZ 50% eS mo] =; Lo | ELLOCO-09] a o . >oD : ee LE 25% J a S$ ° ox no oO | 0% 2Q19 4Q19 2Q20 4Q20e 2Q21e 4Q21e 2022e * Cumulative Drawbells* 103 166 261
Slide 10: Indonesian Smelter Update
FREEPORT FOI PER Indonesian Smelter Update Experiencing ! q df delays % ue > associated —— | with COVID-19 ° Gresik area was declared a “Red Zone” ¢ International contractor dislocation ¢ PT-FI in discussions with Indonesian government on deferred schedule for the project as well as other alternativ
Slide 11: Lone Star Leach Project in Arizona
Lone Star Leach Project in Arizona FREEPORT Substantially Complete Low-risk development in established Commissioning in progress; substantially complete mining district Located 8 miles north of Safford 18 miles southwest of Morenci On track to commence production in 2H20 Estimated production: 200 mm
Slide 12: Optimization Through Innovation
‘Optimization Through Innovation FREEPORT Processing/Concentrating Throughput & Recovery ar Optimization Digital twin for processing HW Intelligence Real time data driven decisions = TRO gulls Unlocking bottlenecks Enhanced mine fragmentation tools Digital tool development Agile Way Et Working Cultu
Slide 13: Expanding Margins & Cash Flow
‘Expanding Margins & Cash Flow FREEPORT a = y Rising Copper & Gold Sales C$) il ) & Declining Unit Costs ) Annual EBITDA Estimates “ 74 il ($ in billions) Gold Revenues ~$2.7 bn per annum 3.8 at $1,800/oz Gold 3.15 Each $100/oz change = $140 mm 14 $1.53 <$1.20 0.8 ~$2.70/Ib Cu?) $2.75/lb Cu $3,00/Ib
Slide 14: The Freeport Edge
The Freeport Edge FREEPORT FOREMOST IN COPPER Global Industry Trusted World-Class Block Cave Responsible Leader Operator Developer Leader Producer One of the world’s largest publicly Strong track record and Long-standing commitment Industry leading track record for Industry leading technical traded
Slide 15: Strong, Resilient & Meeting The Challenge!
Strong, Resilient & Meeting The Challenge! Freeport FREEPORT Fil DhwhbdbahoR ARG
Slide 16: Financial Review & Outlook
Financial Review & Outlook FREEPORT FOREMOST IN COPPER
Slide 17: Annual Sales Profile
‘Annual Sales Profile July 2020 Estimate FREEPORT = \y (billion Ibs) 5 41 4 3.8 3.15 3 2 1 ie) 2020e 2021e 2022e (1) Consolidated copper sales include 590 mm Ibs in 2020e, 735 mm Ibs in 2024¢ and 825 mm Ibs in 2022e for noncontrolling interest; excludes purchased copper. (2) Consolidated gold sales
Slide 18: 2020e Quarterly Sales
/2020e Quarterly Sales FREEPORT f = 5, (millions Ibs) A (thousand ozs) iF 1,000 300 280 220 875 200 ba 184 790 729 _ 400 750 (0) 1020 2020 30Q20e 4020e _ Note: Consolidated gold sales include approximately 26k ozs in 1020, 34k ozs in 2020, 41k ozs in 3Q20e and 52k ozs in 4Q20e for noncontrolling int
Slide 19: Consolidated Unit Net Cash Costs Estimates
‘Consolidated Unit Net Cash Costs Estimates FREEPORT After By-Product Credits Annual Unit Net Cash Cost Estimates ? $1.90 (after by-product credits) 2020e $1.53/Ib 2021e <$1.20/Ib $1.47 $1.44 - - 1920” 2020” 3Q20e” 4Q20e” (1) Excludes COVID-19 related costs (2) Estimates assume average prices of $1,
Slide 20: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices —_ FREEPORT Cash Flows Expected to Grow Following 2020 Transition Year ($ in bns except copper, gold and molybdenum prices) Sensitivities “i Average ’21e/’22e x EBITDA | ($1,800/0z gold, $7/Ib molybdenum) (US$ in eh $8 EBITDA $6 Copper +/-$0.10/lb $375 $
Slide 21: Consolidated Capital Expenditures
‘Consolidated Capital Expenditures FREEPORT ($ in bns) $2.0 aoe $2.0 2020e 2021e 2022e (1) Net of scheduled contributions from PT Inalum for expansion capital spending that will be reflected in financing on the cash flow statement. (2) Major projects include CAPEX associated with Grasberg undergroun
Slide 22: Strong Financial Position & Liquidity
Strong Financial Position & Liquidity FREEPORT (US$ bns) ad Liquidity Position as oresoz0 2 $8.4 Consolidated Cash $1.5 Undrawn Credit Facility $3.5 Total Liquidity $5.0 $5.3 = In July 2020, FCX priced a debt offering and commenced tender offers to improve financial flexibility through extending mat
Slide 23: Financial Policy
‘Financial Policy FREEPORT ps & Near-term focus prioritizes liquidity and balance sheet strength while preserving large long-lived mineral resources PRIORITIES In March 2020, announced suspension of common stock dividend in response to global pandemic and uncertain business environment Successful ex
Slide 24: World's Premier Publicly Traded Copper Producer
-World’s Premier Publicly Traded Copper Producer Freeport REEPORT REMOST IN COPPER \ ss om Management Team Difficult to Replicate with Size, Scale and Durability and Commitment to Communities / by Positive Environmental Responsibility Long-Term Fundamentals Proven Capabilities and Profile 24
Slide 25: Freeport Foremost in Copper
FREEPORT FOREMOST IN COPPER
Slide 26: Reference Slides
Reference Slides FREEPORT FOREMOST IN COPPER
Slide 27: Financial Highlights
Financial Highlights FREEPORT Sales Data 2020 1H20 Copper Consolidated Volumes (mm Ibs) 759 1,488 Average Realization (per Ib) $2.55 $2.53 Site Production & Delivery Costs (per /b) $1.82 $2.00 Unit Net Cash Costs (per /b) $1.47 $1.68 Gold Consolidated Volumes (000’s ozs) 184 328 Average Realization
Slide 28: 2Q20 Mining Operating Summary
2Q20 Mining Operating Summary FREEPORT Sales From Mines for 2Q20 & 2Q19 by Region North America South America @ Indonesia © 369 287 o 24 151 180 185 Au 000 ozs 2Q20 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q19 . . North South 2Q20 Unit Production Costs (peribofcu America America Indonesia _—_ Consol
Slide 29: 2020e Outlook
/2020e Outlook FREEPORT Copper: 3.15 billion Ibs Gold: 0.8 million ozs Molybdenum: 77 million Ibs Site production & delivery 2020e: $1.88/Ib (3Q20e: $1.83/Ib) After by-product credits 2020e™ : $1.53/Ib (3Q20e: $1.44/Ib) ~$2.6 billion @ $2.85/Ib copper for 2H20e Each 10¢/Ib change in copper in 2H20e
Slide 30: Sensitivities
Sensitivities (US$ in mms, except copper, gold and molybdenum prices) 2020e Change (2H20e) EBITDA Copper +/- $0.10/Ib $190 +/- $1.00/Ib $20 Gold +/- $50/ounce $30 Currencies” —+/-10% $90 Diesel +/-10% $15 2021e-2022e Avg. Change EBITDA FREEPORT Operating Cash Flow Copper +/- $0.10/Ib $375 +/- $1.00/
Slide 31: 2020e Operational Data
2020e Operational Data FREEPORT 2020e Sales by Region North America South America Indonesia 1,430 950 770 770 0.8 2 . 3 North South 2020e Unit Net Cash Costs ® (perlb of Cu) America America Indonesia Consolidated Site Production & Delivery $1.90 $1.89 $1.83 $1.88 By-product Credits (0.19) (0.13) (1.
Slide 32: 2020e Site Production Costs Breakdown
/2020e Site Production Costs Breakdown FREEPORT North America South America Indonesia Consolidated * Support costs, taxes/fees, social costs & other e = estimate, See Cautionary Statement.
Slide 33: PT-FI Mine Plan
PT-Fl Mine Plan FREEPORT Metal Sales, 2020e - 2024e Copper 2920e - 2024e 1 2020e - 2024e Total: 7.1 billion Ibs copper Total: 7.3 million ozs gold Annual Average: 1.4 billion Ibs Annual Average: 1.5 million ozs 1.8 1.7 1.7 1.6 F 1.4 1.4 0.77 0.82 Cu bn Ibs 2020e 2021e 2022e 2023e 2024e Transition Ye
Slide 34: World Class Block Cave Design
World Class Block Cave Design FREEPORT Substantial Infrastructure in Place to Support Large-Scale Production Grasberg Block Cave DMLZ Ramp-up Schedule Ramp-up Schedule ? Plan View (000's tid of Ore) Bian View | sic (000's td of Ore) n iarll 128 129 3 72 102 a 67 30 33 10 3.Cave Fronts ~~ 9 2 Cave Fr
Slide 35: Project Update
‘Project Update FREEPORT Grasberg Transition on Track - Consistently Meeting Expectations Deep MLZ (DMLZ) & Grasberg Block Cave (GBC) averaged 54,800 t/d in 2Q20: 9% above April 2020 forecast ie 46% above of Vat rate fates 4 extraction rates exceeded forecast Drawbelling DMLZ 40 40 37 34 «(36 20 14
Slide 36: FCX Debt Maturities as of 6/30/20
FCX Debt Maturities as of 6/30/20 FREEPORT FOREMOST IN COPPER (US$ bns) 1 sg , 1otal Debt & Cash _at 6/30/20 ll FCX Revolver $ - BH Senior Notes 9.0 1 Cerro Verde Credit Facility 08 $6 Other Total Debt Q Consolidated Cash $15 Undrawn Credit Facility 3.5 Total Liquidity $4 4.125%, 4.25% J 5.00%, $2 5
Slide 37: 2Q20 Copper Realization & 3Q20e Guidance
2Q20 Copper Realization & 3Q20e Guidance FREEPORT 2Q20 LME Average Copper Price $2.43/Ib 3-Mo. Fwd Price for Copper at the End of June $2.73/Ib $2.55/Ib™ FCX 2Q20 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end of period) FCX 2Q20 Prior Perio
Slide 38: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation FREEPORT 12 mos ended ($inmm) 2Q20 6/30/2020 Net income (loss) attributable to common stock $53 $(638) Interest expense, net 115 584 Income tax provision 96 456 Depreciation, depletion and amortization 358 1,412 Metals inventory adjustments (139) 203 Net gain on sales
Slide 39: Freeport Foremost in Copper
FREEPORT FOREMOST IN COPPER