Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q1 2024 Earnings Presentation
34 slides from Freeport-mcmoran's earnings presentation, Apr 23, 2024
Slide 1: FCX Conference Call 1st Quarter 2024 Results
FCX Conference Call 1st Quarter 2024 Results April 23, 2024 fcx.com 1
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements in which FCX discusses its potential future performance, operations and projects. Forward-looking statements are all statements other than statements of historical facts, such as plans, projections, or expectations relating t
Slide 3: 2023 Annual Report - The Value of Copper
2023 Annual Report - “The Value of Copper” 2023 Annual Report Highlights • Premier global leader in copper industry • Large-scale, long-lived reserves • Attractive portfolio of organic growth opportunities • Strongly positioned with favorable market outlook • Focused on delivering long-term value to
Slide 4: 2024 Focus Areas
2024 Focus Areas • Continue strong execution of plans globally • Maintain ongoing cost and capital discipline • Build additional scale in leach innovation initiatives • Enhance productivity and asset efficiency in U.S. • Complete Indonesia smelter projects & successful ramp-up • Secure long-term min
Slide 5: 1Q Highlights
1Q Highlights January • Strong operating performance Key Stats Actual Estimate – Copper sales 33% above 1Q23; 11% above guidance Copper Sales (mm lbs) 1,108 1,000 Gold Sales (k ozs) 568 575 – Gold sales more than double 1Q23; in line with guidance Unit Net Cash Costs ($/lb) $1.51 $1.55 – Unit net ca
Slide 6: Copper – Metal of Electrification
Copper – Metal of Electrification Over 65% of the world’s copper is used in applications that deliver electricity* Infrastructure Technology Decarbonization Transportation • Backbone of construction and • Demand expected to benefit • Critical to energy efficiency • Essential material component urban
Slide 7: Copper Market Commentary
Copper Market Commentary Copper Price Copper Price Historical Comparison $/lb • Secular trends $6.00 Early Stage of a new era for copper - Decarbonization October 2023 – April 2024 $5.00 - Electrification +19% 29-mos - Technology +274% $4.00 • Global economy improving • Supply limitations $3.00 24-m
Slide 8: 1Q 2024 Operations Update
1Q 2024 Operations Update North America South America Indonesia Cu Sales: 331 mm lbs Cu Sales: 284 mm lbs Cu Sales: 493 mm lbs Unit Net Cash Costs: $2.98/lb Unit Net Cash Costs: $2.60/lb Au Sales: 564 k ozs Unit Net Cash Credits: 12¢/lb Cerro Verde • Ongoing efforts to mitigate lower ore grades • Mi
Slide 9: Indonesia Downstream Processing Activities
Indonesia Downstream Processing Activities Manyar Smelter Construction Nearing Completion • PT-FI to become fully integrated metals producer • Upcoming Milestones in 2024 – June – Heat to furnaces – August – Initial concentrate run – October – Initial cathode production • Construction spending on Ma
Slide 10: Future Growth Embedded in Existing Asset Base
Future Growth Embedded in Existing Asset Base Provides Increased Leverage to Copper Prices New Leach Bagdad Lone Star El Abra Kucing Liar Technologies Expansion Expansions Expansion Grasberg District Americas Arizona Arizona Chile Indonesia • Pursuing opportunities • Opportunity to • Significant sul
Slide 11: Americas Leach Innovation Initiatives
Americas Leach Innovation Initiatives Low Cost, High Value Targeting Copper in Stockpiles Unrecoverable by Traditional Leach Methods with Precision Operating Techniques Continuing to Add Leach Volumes Significant Potential Long-term Production Target (mm lbs) 39 bn lbs Contained * ~800 mm lbs/annum
Slide 12: Brownfield Growth Pipeline
Brownfield Growth Pipeline FCX Copper Reserves (1) 104 bn lbs FCX Copper Resources (2) 211 bn lbs Americas Percentage 72% Americas Percentage 77% Americas’ Identified Projects: ~1.7 bn lbs of Estimated Indonesia Development Incremental Annual Copper Production in Progress By Project Timeline For Add
Slide 13: Annual Sales Profile
Annual Sales Profile April 2024 Estimate 2.0 Copper 5.0 Gold 2 1.7 Sales 4.3 Sales 1.5 1.5 4.15 4.2 (billion lbs) 4.1 (million ozs) 4.0 1 0 3.0 2023 2024e 2025e 2026e NOTE: Consolidated gold sales include 808k ozs in 2023, 1.0 mm ozs in 2024e, 770k ozs in 2025e and 770k ozs in 2026e for noncontrolli
Slide 14: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices Assuming $2,300/oz gold, $20/lb molybdenum Sensitivities Average ’25e/’26e ($ in bns except copper, gold and molybdenum prices) (US$ in mms) EBITDA $16 EBITDA $12 Copper +/-$0.10/lb $430 Molybdenum +/-$1.00/lb $ 80 $8 Gold +/-$50/oz $ 75 $4 Average Curre
Slide 15: Consolidated Capital Expenditures
Consolidated Capital Expenditures Excluding Indonesia Smelter Projects CAPEX (1) ($ in bns) $3.9 $3.6 $3.1 Discretionary Discretionary Discretionary $1.2 $1.3 $0.6 Major Planned Planned (2) Planned Projects $1.7 (2) $1.2 (2) (2) $1.1 $1.1 Other Other Other $1.3 $1.3 $1.5 2023 2024e 2025e (1) See sli
Slide 16: Financial Policy: Performance-Based Payout Framework
Financial Policy: Performance-Based Payout Framework ~50% free cash flow(1) for shareholder returns Maintaining Strong Providing Cash Returns Advancing Organic Balance Sheet to Shareholders Growth Opportunities • Strong credit metrics: Net Debt/ $4.0 bn Distributed • Positioned for future growth Adj
Slide 17: Executing Clearly Defined Strategy Focused On Copper
Executing Clearly Defined Strategy Focused On Copper Responsible Long-lived Embedded producer of scale reserves growth options Cash returns to Experienced Solid balance shareholders management team sheet 17 17
Slide 18: Reference Slides
Reference Slides FREEPORT FOREMOST IN COPPER
Slide 19: The Copper Mark
The Copper Mark Recognition for Responsible Production AWARDED SITES • FCX has achieved, and is committed to maintaining, the Copper Mark and Atlantic Copper smelter & Grasberg mine (Indonesia) Molybdenum Mark at all of its sites globally refinery (Spain) Henderson mine (CO) Bagdad mine (AZ) Miami s
Slide 20: 2023 ESG Highlights
2023 ESG Highlights Climate Strategy Global Tailings Copper Mark ~$185 million Progress Standard Pledged Maintained at all Invested in our Transitioning from coal to Progressed implementation at CEO Action for sites globally communities LNG at Grasberg; applicable tailings storage Diversity & Inclus
Slide 21: Financial Highlights
Financial Highlights Sales Data 1Q24 1Q23 Copper Consolidated Volumes, excluding purchases (mm lbs) 1,108 832 Average Realization (per lb) $ 3.94 $ 4.11 Site Production & Delivery Costs (per lb) $ 2.32 $ 2.57 Unit Net Cash Costs (per lb) (1) $ 1.51 $ 1.76 Gold Consolidated Volumes (000’s ozs) 568 27
Slide 22: 1Q 2024 Mining Operating Summary
1Q 2024 Mining Operating Summary Sales From Mines for 1Q24 by Region North America South America (2) Indonesia (3) 493 564 331 332 302 284 20 (1) 198 266 19 (1) Cu Mo Au mm lbs mm lbs 000 ozs 1Q24 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 1Q23 North South 1Q24 Unit Net Cash Costs / (Credits) (per lb o
Slide 23: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Attractive Debt Maturity Profile (US$ bns) $8 Total Debt & Cash at 3/31/24 Significant liquidity FCX Revolver $ - ▪ $5.2 bn in consolidated cash and cash equiv. (1) FCX/FMC Senior Notes/Other 6.4 PT-FI Senior Notes 3.0 ▪ $3.0 bn in availability under FCX credit fac
Slide 24: 2024e Outlook
2024e Outlook Sales Unit Net Cash Operating Capital Outlook Cost of Copper Cash Flows (1,3) Expenditures • Copper: 4.15 billion lbs • Site prod. & delivery • ~$7.4 billion(4) @ $4.25/lb • $3.6 billion (excluding o 2024e: $2.40/lb copper for 2Q24e-4Q24e smelter projects(5)) • Gold: 2.0 million ozs o
Slide 25: 2024e Operational Data
2024e Operational Data 2024e Sales by Region North America South America Indonesia 1,728 1,280 1,145 (2) 2.0 84 (1) Cu Mo Cu Cu Au mm lbs mm lbs mm lbs mm lbs mm ozs North South 2024e Unit Net Cash Costs / (Credits) (3) America America Indonesia Consolidated Site Production & Delivery (4) (per lb of
Slide 26: 2024e Quarterly Sales
2024e Quarterly Sales Copper 1200 1,108 Gold 600 568 500 460 Sales 1,060 Sales 450 450 1,010 (million lbs) 1000 975 (thousand ozs) 300 150 800 0 1Q24 2Q24e 3Q24e 4Q24e NOTE: Consolidated gold sales include 289k ozs in 1Q24, 256k ozs in 2Q24e, 231k ozs in 600 3Q24e and 236k ozs in 4Q24e for noncontro
Slide 27: PT-FI Mine Plan Metal Production, 2023 – 2028e
PT-FI Mine Plan Metal Production, 2023 – 2028e Copper 2024e – 2028e Gold 2024e – 2028e Total: 8.4 billion lbs copper Total: 7.9 million ozs gold Annual Average: ~1.7 billion lbs Annual Average: ~1.6 million ozs 2.0 2.0 1.8 1.7 1.7 1.7 1.6 1.6 1.6 1.5 1.5 1.3 Cu Au bn mm lbs ozs 2023 2024e 2025e 2026
Slide 28: Discretionary Capital Projects
Discretionary Capital Projects* Kucing Liar Lone Star Oxide Expansion ● Commenced 10-year mine development in 2022 ● Low capital intensity investment ● Sustain large-scale, low-cost Cu/Au production ● Capital investment: ~$300 mm (~$65 mm in 2024e) ● Capital investment: ~$400 mm/yr average ● Increas
Slide 29: Bagdad 2X Expansion Update
Bagdad 2X Expansion Update • Operation located in northwest Arizona • Reserve life exceeds 80 years • Converting existing manned haul truck fleet to 100% autonomous • Completed technical studies in late 2023 to double concentrator capacity – Expected to expand concentrator capacity by ~90-105k t/d –
Slide 30: Autonomous Haulage at Bagdad
Autonomous Haulage at Bagdad • Bagdad expected to become first U.S. mine with a fully autonomous haulage system • Converting existing manned fleet to 100% autonomous – ~30 trucks – CAPEX ~$65 mm – Target completion 3Q25 • Reduces human exposure to active mining areas • Potential for efficiency gains
Slide 31: History of Strong Project Execution
History of Strong Project Execution Notable Projects Completed by FCX Team Grasberg Block Cave – State-of-the-Art Fully Indonesia / Grasberg District Grasberg Mill Complex Autonomous Underground Rail System • Infrastructure Development in Remote Location • Grasberg Open Pit • IOZ & DOZ Block Caves •
Slide 32: Combined Cycle Gas Turbine Power Plant at Grasberg
Combined Cycle Gas Turbine Power Plant at Grasberg Offshore • Completed feasibility study to replace existing coal plant LNG Carrier at Grasberg with 265MW gas-fired combined LNG transfer cycle facility Floating Storage & Regas Unit (FSRU) • ~$1 bn project (incremental ~$0.4 bn compared to Subsea ga
Slide 33: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in mm) 1Q24 1Q23 Net income attributable to common stock $ 473 $ 663 Interest expense, net 89 151 Income tax provision 512 499 Depreciation, depletion and amortization 595 399 Accretion and stock-based compensation 79 85 (1) Other net charges 188 80 Other income, ne
Slide 34: FOREMOST IN COPPER
FOREMOST IN COPPER