Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — BMO Capital Markets 28th Global Metals & Mining Conference (February 2019)
22 slides from Freeport-mcmoran's conference presentation, Feb 25, 2019
Slide 1: Richard C. Adkerson, Vice Chairman, President & CEO
Richard C. Adkerson Vice Chairman of the Board, President & Chief Executive Officer February 25, 2019 fcx.com
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 projections or expectations relati
Slide 3: FCX: Primed for Success
FCX: Primed for Success Premier Portfolio of Copper Assets Copper Arguably Most Attractive Fundamental Market Outlook Strong Margins and Cash Flows Long-lived Reserves Attractive Long-term Development Pipeline Within Existing Portfolio Geographically Diversified – ~70% from Americas Ex
Slide 4: Commitment to Sustainability
Commitment to Sustainability Fundamental to Our Operations and Business Strategy FCX Working Toward Sustainable Development Reporting Highlights: Provide Copper to Meet the World’s Growing Demand • Safety Performance in a Safe and Environmentally Responsible Manner • Sustainability Programs • Comm
Slide 5: Tailings Management and Stewardship
Tailings Management and Stewardship 19 Active Tailings Storage Facilities (TSF) Active Tailings Storage Facility at Morenci – Upstream Design • 17 in U.S. and 2 in Peru • All with External Technical Review Boards & Engineers of Record 55 Inactive/Reclaimed TSF, All in U.S. • Two-thirds Have Been
Slide 6: Reclaimed Areas
Reclaimed Areas PT-FI Reclamation Area in the Lowlands of Papua Reclaimed Tailings Storage Facility in the United States 6
Slide 7: Freeport-McMoRan Strategic Overview
Freeport-McMoRan Strategic Overview Major Initiatives Completed Long-term Strategy Strengthened Balance Sheet Maximize Existing Resource Value Through Cost Management, Resolved Long-standing Negotiation Productivity & Technology with Indonesian Government Build Values in Undeveloped Portfoli
Slide 8: Physical Copper Market Tight
Physical Copper Market Tight “Trackable Inventories Are At 10-Year Lows”(1) tonnes $/lb 1,000,000 5.00 Copper Price 900,000 4.50 800,000 4.00 700,000 3.50 600,000 3.00 500,000 2.50 400,000 2.00 300,000 1.50 200,000 1.00 100,000 Global Copper 0.50 Exchange Inventories(2) - - Jan-09 Jan-11 Jan-13 Jan-
Slide 9: Copper Market – Compelling Fundamentals
POWERED BY COPPER Copper Market – Compelling Fundamentals Demand Expected to Grow Project Pipeline Thin (million metric tonnes) (million metric tonnes/annum) 33 4.5% CAGR 5.0 24 Emerging Markets Only 5 China projects 0.4% > 100 mt/a 1.5 Mature 60 Probable 25 Probable Markets (0.3)% Projects Projects
Slide 10: Long-lived Reserve Base
Long-lived Reserve Base Copper Reserves (1) (bn lbs) Reserves (1) By Region North America 42% 254 South Indonesia America 30% 28% Mineralized Material (2) (contained copper) 120 Mineralized Material (2) By Region 87 44% Reserves(1) 22% 29% YE 2017 YE 2018 YE 2018 Other 5% (1) Estimate of recoverable
Slide 11: FCX – Valuable Resource Base
FCX – Valuable Resource Base Competitive Strengths Global Leadership Position Experienced Team: Operations, Development, Execution, Operate All Assets – Operational Innovation/Technology Synergies, Shared Resources, Portfolio- Based Capital Allocation Leading Position in U.S. with Favorable
Slide 12: History of Strong Project Execution
History of Strong Project Execution Notable Projects Completed by FCX Team Start of Cerro Verde Construction - 2013 Indonesia / Grasberg District Grasberg Mill Complex Infrastructure Dev. in Remote Location IOZ Underground DOZ Underground Grasberg Open Pit Multiple Mill Expansions GBC & DMLZ in Prog
Slide 13: Proven Underground History
Proven Underground History 1980’s GBT block cave mine Grasberg Block Cave GBT Depleted 1980’s (depleted) GBT block cave mine GBT Depleted (depleted) 1990’s IOZ IOZ block cave mine 1990’s (depleted) IOZ IOZ block cave mine Depleted (depleted) Depleted 2000’s DOZ 2000’s DOZ DOZ block DOZ blockcave min
Slide 14: DMLZ Update
DMLZ Update Surface (3020 mL) View Looking SW Primary Exhaust Fans (DOZ & DMLZ) To Ridge Camp Vent Raises (530 m) AB Adits (2500 mL) DOZ (3100 mL) Ramp up to 80,000 t/d by 2022 YE 2018 Reserves: 432mm t @ 0.92% Cu & 0.76 g/t Au DMLZ (2590 mL) Results from Ongoing Hydraulic Fracturing in 4Q18 to
Slide 15: Grasberg Block Cave Update
Grasberg Block Cave Update Ramp up to 130,000 t/d by 2023 YE 2018 Reserves: 963mm t @ 0.96% Cu & 0.72 g/t Au Infrastructure in Place – Successful Testing of Underground Rail and Ore Flow in 2018 Cave Undercut Blasting Continued in 4Q18 First Drawbell Blasted Ahead of Schedule in 4Q18 Rock
Slide 16: Women Play Groundbreaking Roles in PT-FI's Underground Mines
Women Play Groundbreaking Roles in PT-FI’s Underground Mines PT-FI is Hiring and Training Women as Remote Equipment Operators for Underground Mining. Instead of working hundreds of feet underground, remote equipment operators work in an office building on the surface. 16
Slide 17: Lone Star – Potential for Another Morenci?
Lone Star – Potential for Another Morenci? Leachable Development Provides Exposure to Major Asset 12/31/2018 Potential(2) Initial Initial Production: Reserves(1) (Leach & Mill) Leach Project YE 2020 5.6 bn lbs of Copper 50 - 70 bn lbs $850 mm Project ~200 mm lbs/year (Leach Only, 27% ~$290 mm as 12/
Slide 18: Current Focus – Ranking & Prioritizing Future Organic Growth Options
Current Focus – Ranking & Prioritizing Future Organic Growth Options in Americas (bns of lbs) U.S. • Large footprint with substantial 282 Large footprint undeveloped sulfidewith substantial resources undeveloped • Significant sulfide existing resources infrastructure Bagdad Significant existing
Slide 19: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices (US$ billions, except sensitivities) Average EBITDA ($1,300/oz Gold, $12/lb Molybdenum) $10 $8 10¢ Sensitivity $6 to Copper $350 mm - $425 mm $4 Transition Yrs $2 Average Average ’19e/’20e ’21e/’22e $0 Cu $3.00/lb Cu $3.25/lb Cu $3.50/lb Average Operatin
Slide 20: Consolidated Capital Expenditures
Consolidated Capital Expenditures (US$ billions) Net of Scheduled Contributions $2.4 $2.5 (2) $2.4(2) $2.3 $2.0 $1.2(1) $1.5(1) $1.5(1) Major Mining Projects $0.8 $0.9 $1.0 Other Mining 2018 2019e 2020e (1) Major mining projects include CAPEX associated with Grasberg underground development ($0.9 bn
Slide 21: Financial Policy
Financial Policy Significant Deleveraging Since 2015 ($ in bn) Balanced Approach $20.2 $11.9 $8.7 $6.9 Net Debt Net Debt/ YE 2015 YE 2016 YE 2017 YE 2018 Adjusted EBITDA 4.6x 2.4x 1.5x 1.0x * Net debt equals gross debt less consolidated cash. See Cautionary Statement. 21
Slide 22: Summary
Summary FCX is Well Positioned High Quality Assets Well Managed Focused on Execution & Shareholder Value WORLD’S LARGEST PUBLICLY TRADED COPPER PRODUCER 22
Freeport-McMoRan — BMO Capital Markets 28th Global Metals & Mining Conference (February 2019) on 6ix