Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q1 2013 Earnings Presentation
45 slides from Freeport-mcmoran's earnings presentation, Apr 18, 2013
Slide 1: First Quarter 2013 Earnings Conference Call
FREEPORT McCMORAN ‘XPANDING RESOURCES Ps =Vel/ COPPER & GOLD : cers i Bow W-“ Quarter 2015, Earnings Gonrerence Gall
Slide 2: Cautionary Statement
FREEPORT: MICIMIORAN) EXPANDING RESOURCES COPPER e) Golub) Gali Onary StaGteEnrent, KE GaGa a. COOKING) State} Ws, mts) This presentation contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements o
Slide 3: Additional Information: PXP Transaction
FREEPORT -MICNIORAN) EXPANDING RESOURCES COPPER ® GoUp) ACG ON al ANTOrmMatulonmy DOUCLTE) EXP Transaction th connection with the pending transaction, FCX has filed with the SEC a registration statement on Form 5-4/A that includes a preliminary proxy statement of PXP that also constitutes a prospect
Slide 4: 2012 Annual Report Highlights
FREEPORT: MCMORAN) EXPANDING RESOURCES COPPER e) Golub) pEXPATCINGIRESOULCES 2012 Annual Report Highlights = Established, Long-Lived Reserves = Geographically Diverse EXPANDING RESOURCES = Growing Production/Cash Flow : Profile = Asset Base to Expand Through Pending Acquisition of North American Bas
Slide 5: First Quarter 2013 Highlights
FREEPORT MICMORAN, =v" COPPER @ GOLD) LOLSAIGMIIGHELS: Strong Operating Performance Globally Productivity Improvements at Grasberg Advanced Brownfield Development Projects - Completed Second Phase Expansion at Tenke - Advancing Morenci Mill Expansion - Commenced Initial Construction at Cerro Verde C
Slide 6: Financial Highlights
TITAN CA TIGMUGHES, Sales Data Q1z Consolidated Volumes (mm Ibs) 954 827 Average Realization (per Ib) $3.51 $3.82 Site Production & Delivery Unit Costs (per Ib) $1.94 $1.96 Unit Net Cash Costs (per Ib) $1.57 $1.26 Consolidated Volumes (000’s ozs) 214 288 Average Realization (per oz) $1,606 $1,694 Co
Slide 7: Operating Highlights: Unit Production Costs
= DAT -MICMIORAN) EXPANDING RESOURCES COPE 0) Cua Ler OPEL aang TAIGMNGITts: 2Q13 Unit Producvon Gosts: (per pound of copper) North South America America Indonesia _Africa Consolidated Cash Unit Costs Site Production & Delivery $1.99 $1.62 $2.61 $1.39 $1.94 By-Product Credits (0.26) (0.29) (1.63) (0
Slide 8: Copper Market Commentary
FREEPORT MICMORAN, "COPPER GOUD) Copper Marken commentary a | = China Remains Important Demand Driver - Expect Continued Infrastructure Development and Commodity Intensity - Slower Growth on Larger Base - Growing Copper Concentrate Imports/Lower Cathode Imports = Improving U.S. Demand - Healthy Auto
Slide 9: Highly Attractive Brownfield Copper Development Projects
FREEPORT MICMORAN, =v" COPPER @ GOL) Highly Attractive Brownreld past ‘ Gopper, Development Projects, i : Expansion Projects in Progress ica : ital™ Achi North America Mill Expansions (t/d) ‘wmlbsie) (S's) Fal Rates ~ Morena EXDanSTOn, (225 RDACAIpRA Ce, wo Cerro Verde (360K) 600 $4.4 2016 + Potenti
Slide 10: Volume Growth with Brownfield Projects in Progress
| PORT LEM BAN EXPANDING RESOURCES Volume, Gowan Wit PI OWMMEIG PLOJECtS IT F-LOGLESS, Copper (billion Ibs per year) 2015e-2020e v. 2012 +15%+ 5.0+ SA NA Africa Brownfield Projects Proven Technology Capital efficiency Economies of scale Risks better understood 2012 2013e-2014e 2015e-2020e Average Av
Slide 11: Brownfield Development: Morenci Mill Expansion
EXPANDING RESOURCES Brownneld Development MOLEC TMLEXPatsior, Key Project Metrics * Expand mill to 115K t/d ¢ Increase mining rate to 900K st/d (from 700K st/d) ¢ Capital costs: ~$1.4 billion ¢ Incremental Production: 225mm Ibs Cu/year sack ° Achieved Targeted Mining Rate in 1Q13 Copper (bin Ibs) Co
Slide 12: Brownfield Development: Cerro Verde Expansion
BLOWMnEId DEVEIOPIMENe Cerro Velde TUMlEXPalisior, EXPANDING RESOURCES 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: ~$4.4 billion ¢ Incremental Production: 600mm Ibs Cu/year, 15mm lbs Mo/year ° Reserve Life: ~90 years c
Slide 13: Brownfield Development: Tenke Fungurume Expansion
0) a 7 BILOWNiEIG DEVEIOPIMent VERKE LUNGULUTTE EXPalisiOr MCIIDRAN) EXPANDING RESOURCES Key Project Metrics © Expand mill to 14K t/d ¢ Increase mining rate from 60K t/d to 150K t/d ° Add tankhouse capacity e it az tie * ve CEI GRae SLC Tenke Phase Il Expansion ¢ Incremental Production: 150mm | s02
Slide 14: Cobalt Chemical Refinery Acquisition
EXPANDING RESOURCES ¢ Acquisition completed in 1Q13 ¢ Enhances market position as world’s largest producer of cobalt ¢ Initial purchase consideration of $355mm, including $34mm of acquired cash = Potential for additional * Global market leader consideration of up to $110mm © Direct end-market access
Slide 15: Grasberg Underground Development
EXPANDING RESOURCES Grasverg. Underground Development e To date, completed 80 km of development Spare in Grasberg BC & 53 km in DMLZ = Tracking start-up schedule e Current activities include work on ore flow systems & Grasberg BC shaft e Development capital = $6.7 bin for Grasberg BC & DMLZ ($5.5 bi
Slide 16: 2013 Outlook
FREEPORT MICMORAN, CopPER® Gon) 2015 OUtTIOOK-. Sales Outlook: © Copper: 4.3 Billion Ibs. © Gold: 1.4 Million ozs. e Molybdenum: 92 Mi Unit Net Cash Cost ©: © $1.45/Ibin 2013e Operating Cash Flows; + ~$5.5 Billion (@$3.25/Ib Copper) e Includes $400 Million in Net Working Capital Sources and Changes
Slide 17: Growing Production Profile
Be: OnT-MCMORAN) CopPenie Gov) EXPANDING RESOURCES Growing Production Prorme Copper Sales (b 2012 2013e 2014e 2015e Indudes Projects Currently under Way* ‘Toler Consolidated capper salesindide approximately 717mm lbs in 2012, 810mm lbs in 2013e, 760 me lbs in 20142and 900+ mm ibs in 2015e for nancon
Slide 18: 2013e Quarterly Payable Metal Sales
Bas fc eMoHiaN EXPANDING RESOURCES 2013e Quarterly Payable Metal Sales Gold Sales (thousand ozs) Copper Sales (million Ibs) a 500 1,250 1,225 1,115 400 365 295 214 1,000 200 0 750 1913 2913 3Q13e 4Q13e ‘Notes Consolidated 0 sales include approximately 22 02s n 1013, 30k ozsin 2013, 28k0zs n 30 Le an
Slide 19: 2013e Unit Production Costs
EXPANDING RESOURCES 20ise Unt Production Gosts, North South Sper poced hoppers America America Indonesia Africa___ Consolidated © Cash Unit Costs © Site Production & Delivery 2) $2.03 $1.57 $232 $1.41 $1.89 By-product Credits (0.24) (0.29) = (4.66) (0.30) (0.62) Treatment Charges 0.10 0.16 0.21 : 0.
Slide 20: EBITDA and Cash Flow at Various Copper Prices
EXPANDING RESOURCES EBIDDA Vand Casi FIOW at Various COpper ICES, Average EBITDA* ($1,500 Gold & $12 Molybdenum) $18) (US$ billions) $15 sf $0 |'2015e/2016e | Average $6 2013e/2014e $3 Average so Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1
Slide 21: Sensitivities
EXPANDING RESOURCES Canecitivitine SENSITIVITIES Operating Change EBITDA Cash Flow (USS millions) Copper: -/+ $0.10/Ib $405 $275 Molybdenum: -/+ $1.00/Ib $80 $65 Gold: -/+ $50/ounce $75 $45 Diesel: -/+ 10% $100 $75 Purchased Power”: -/+ 10% $50 $35 Currencies@: +/- 10% $175 $130 (2) $3.80/galon base
Slide 22: Exploration Targets
EXPANDING RESOURCES EXPlorauon Targets, WANT A OF NUNCA DISCICtS, $235 million in 2013e Africa Indonesia 20% 26% Note: FOX's consolidated share; e = estimate. See Cautionary Statement. Approximately 1/37 of our 2013 budget is associated with greenfield exploration projects 22
Slide 23: Capital Expenditures
EXPANDING RESOURCES Gapital Expenaitures 2 A I Major Mining Projects 2 i Other Mining (USS billions) $54 $4.4 $4.4 $41 $3 | $2 $15 2014e 2015e @ 6 ) Primary includes Note: Includes ide estimates from pending acquisitons. Project spending wil continue to be reviewed and revised subject to market cond
Slide 24: Pending Oil & Gas Transactions
FREEPORT MICMORAN, =v" COPPER @ GOLD) AO Pending Oi & Gas inansactions > (+ = Completed Low Cost Debt Financing in 1Q13 = Expect to Close Transactions in 2Q13 = High Quality U.S. Focused Assets - Strong Margins & Hedge Protected Cash Flows - Attractive Growth Profile - Significant Exploration Potent
Slide 25: Pro Forma Oil & Gas Reserves
FR RT MCMIORAN} EXPANDING RESOURCES COPPER e) Golub) PGT OU a ILY SO) [EXGASW-OTLTONO) Proved & Probable Reserves“! @ Natural Gas \ 688 MMBOE (81% Oil/Liquids) @ oi Other 3% Haynesville Eagle Ford 2013e P1 7 Regit 175 MBOE/d oth Gulf of Mexico Shelf/ Deepwater (1) 2P Reserves including Proved of 475
Slide 26: FCX Pro Forma EBITDA, Cash Flows and Capital Expenditures
plaaeaass leh oitay EXPANDING RESOURCES FGXSPrOV Ora EDINA) GasiIOWS aGap ital /EXPENGIMUTES) EBITDA Operaung Gash Flow $25 s20 re | | _—— 7 gf | | ~4590 | yoo $3.00 $3.50 $4.00 $3.00 $3.50 $4.00 2013e 2014e 2015e Copper Prices Copper Prices $1,500 Au/$12 Mo/$100 Oi/$4.50 Gas $1,500 Au/$12 Mo/$100 O
Slide 27: Significant Debt Reduction
FREEPORT MICMORAN, CopPER® Gon) Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US$ billions) $20 $15 $10 $7.7 $5 $2.0 . a “95 ($3.5) 12/31/12 13-'16 Avg. Copper Price $3.00 $3.50 ‘$4.00 Pro Forma Net Debt/‘13-'16 Avg. EBITDA 0.6x 0.1x N/A Pro Forma YE 2016e (2) Refiects as ad
Slide 28: Financial Policy
FREEPORT MICMORAN, =v" COPPER @ GOLD) Financral Polncy = Maintain Strong Balance Sheet & Liquidity Position = Reduce Debt Incurred for Pending Acquisitions Using Projected Substantial Cash Flows Generated from Combined Business = Invest in Projects with Strong Financial Returns/Capital Discipline =
Slide 29: Long Track Record of Generating Value for Shareholders
ideo EXPANDING RESOURCES LONG Track KECONG Of, GEneraung VATE TOR SHALEHOIGETS, History of Prudent Capital Exploration & Y oe Solid Financial Devel Allocation & Opportunistic Perf evelopment (Acquisitions erformance = Grasberg Discovery & = Financial Discipline = Achieving Production Development = S
Slide 30: Combined Company Highlights
| FREEPORT MICMORAN, =v" COPPER @ GOLD) Combined Gompany i HIGHIGHts. Creates A Premier U.S. Based Natural Resources Producer World’s Largest Publicly Traded Copper Producer Significant Producer of Oil, Gold & Molybdenum Significant Long-term Natural Gas Resources Strong Margins & Cash Flows High Qu
Slide 31: Reference Slides
erie carr aan EXPANDING RESOURCES RETELence SIGES,
Slide 32: Update on Grasberg
ideo EXPANDING RESOURCES Upaate on Grasverg e Unusually low metal production in 2012 compared with historical levels = Lower grades in Grasberg open pit = DOZ ramp-up: panel repairs more extensive — expect 80K t/d by year- end 2013; current rate: 50K t/d = Mine sequencing/geotechnical factors e Outl
Slide 33: PT-FI Share of Metal Sales 2013e-2021e
= FREEPORT NICWIORAN) EXPANDING RESOURCES TATA PTC PAG. Pi-Ploohare Or Meta oles 01se 20 21e. 2013e — 2017e PT-FI Share = Total: 5.9 billion Ibs copper Be copper, billion lbs Annual Average: 1.18 billion Ibs - Gold, million ozs 2013e — 2017e PT-FI Share Total: 8.3 million ozs gold 2.8 Annual Average
Slide 34: Grasberg Open Pit
Slide 35: Mining Sequence in 2013
Leen NICMORAN) COPPER: toe Mining Sequence in 2013 Copper Equivalent. Gross Secuon, 9Nand 9S are the Primary Ore Pushbacks in 2013, 9S —_ LEGEND
Slide 36: Mining Sequence in 2013
FAcEPonT McMonAN, --vs COPPER a taOU0)) are 7 : Mining Sequence in 2013 Copper Equivalent. Gross Secuon, 9Nand 9S are the Primary Ore Pushbacks in 2013, 9S LEGEND. MH 0.25 - 0.99% CuEq * BE 1.00 - 1.99% CuEq a 2.99% CuEq 00% CuEq
Slide 37: Mining Sequence in 2013: Grasberg Plan View
FREEPORT MICMORAN, =v" COPPER @ GOLD) Mining Sequence in 2013 ‘Copper equivalent. Gross Secuion Se Grasberg Plan View
Slide 38: Mining Sequence in 2013
FREEPORT MICMORAN, =v" COPPER @ GOLD) Mining Sequence in 2013 ‘Copper equivalent. Gross Secuion Se
Slide 39: Mining Sequence in 2014: Grasberg Plan View
[__ IEREEPORT MCMIORAN XPANDING RESO. Mining Sequence in 2014 Copper EquiValent Gross Secuon, Grasberg Plan View LEGEND. 0.25 - 0.99% CuEq * 1.00 - 1.99% CuEq a 2.99% CuEq 00% CuEq
Slide 40: Mining Sequence in 2015
[_ EREEPDAT MICMIORAN XPANI Mining Sequence in 201 Copper EquiValent Gross Secuon, 9581s the Primary Ore Pushbackin 2015; LEGEND. 0.25 - 0.99% CuEq * = 1.99% CuEq .99% CuEq .00% CuEq
Slide 41: Mining Sequence in 2016
[_ EREEPDAT MICMIORAN XPANI Mining Sequence in 201 Copper EquiValent Gross Secuon, 9581s the Primary Ore Pushbackin 2016; LEGEND. 0.25 - 0.99% CuEq * = 1.99% CuEq .99% CuEq .00% CuEq
Slide 42: Enhanced Geographic & Commodity Diversification
Enrena cniaem EXPANDING RESOURCES Enhanced Geographic & Commodity DIVErsiiCatlon ZOIGE EBITDA) Existing Pro forma @ : North North America America 48% 29% Indonesia 11% 31% (1) Based on pricing assumptions of $3.50/b Cu, $1,500/oz Au, $12/b Mo, $100/bb/ Ol (Brent) and $4.50/MMbtu natural gas. (2) Inc
Slide 43: 2013e Oil & Gas Operating Estimates
FREEPORT MCMORAN | COPPER & Gou0) ZOLBEVO! [BAGaS; Oper aungiesumates) Rocky Mins, & ‘Operating Cost: $1.65/Mcfe Haynesville Pricing: NYMEX California Operating Cost: $27/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Seu pmaneumes Eagle Ford SJ operating Cost: $10/bbI J @ Pricing: LLS/NYM
Slide 44: Oil and Gas Hedge Positions
EXPANDING RESOURCES 2013 Collars 25k bbls/d swaps $100 floor 40kbbIs/d “go imit 5k bbls/d $90 floor $70 fimit @$109123 $124 Ceting Esbtxerny Puts 17k bbls/d $90 floor $70 limit $0.25 ADP 13k bbls/d $100 floor $80 limit $0.80 ADP 117k bbls/d* 75k bbls/d 30k bbls/d $90 floor $95 floor $70 limit $75 li
Slide 45: Components of Site Operating Costs
EET GY AIG CANE, COMPOTENROTPNMAG COST, Site Operating Costs by Category (Consolidated) Materials 32% Manpower Components of Energy (Total of $1.6 Billion) Purchased leave 255 mm gallons 59% Natural Gas: 1 million MMBTU 2012 45
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