Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q2 2005 Earnings Presentation
25 slides from Freeport-mcmoran's earnings presentation, Jul 20, 2005
Slide 1: 2nd Quarter 2005 Earnings Conference Call
FREEPORT-MCMORAN COPPER & GOLD INC. 2°4 Quarter 2005 Earnings Conference Call J. R. Moffett R. C. Adkerson Chairman of the Board President and Chief Executive Officer KL. Quirk M. J. Johnson Senior Vice President, Senior Vice President and “Chief Financial Officer and _ Chief Operating Officer Treas
Slide 2: www.fcx.com
www.fex.com
Slide 3: 2Q05 Sales Stats — PT-FI Share
2Q05 Sales Stats — PT-FI Share Volumes Realization Copper 314 mm lbs $153 Gold 616,400 ozs. $428 Operating Cash Flows of $458 Million in 2Q05, $620 Million Year-to-Date At June 30, 2005 Total Debt of $1.78 Billion, $1.2 Billion Net of $585 Million in Cash Open Market Purchases of 2.4 Million FCX Com
Slide 4: PT-FI Copper and Gold Sales Expected to Total 1.47 Billion lbs and 2.8 Million ozs
4. cee Fol Fi > PT-FI Copper and Gold Sales Expected to Total 1.47 Billion Ibs. and 2.8 Million ozs. 1Q — 2905 3Q- 4Q05e 2005e Copper (MM Ibs) 642 830 1,470 Gold (M ozs) 1,212 1,600 2,812 Net Cash Costs (per Ib) o¢ 3¢ o¢ > 2HO5 Copper & Gold Sales Expected to be ~30% Higher Than 1HO5 > At Prices of
Slide 5: Cents Per Pound chart
rt ‘¥ & | 8 3 pS i 8 .& Cents Per Pound 228 Bega 2 g ‘ o =%/2 . Bila fs a\z 2 a 3 53 R (v} 2 2 2'|8 7 iJ 23/8 4 = ie) Le 2 a}S| es ge BS = | 28 ae + | ae w S| 5 & 3 = 23) Bg | < 7) 3 BS 3 ae 2 .2| FE real 78 3 ; J aN Zle8| se uy & gS pod a NS i J zl 2 q are 5 ° S| oS wt Be] wy 8 2 =| = 3 g a wi <| |
Slide 6: Grasberg Open Pit
— Grasberg Open Pit June 2005 Pushback 6S, our high grade pushback, will continue to be the major metal contributor for the rest of As a result of on-going initiatives, mining rates have 4 steadily climbed, averaging over 720,000 t/d in 2Q. Pushback 6S
Slide 7: Mining Sequence in 2005
4 XA NP a Mapes BAP Fv Mining Sequence in 2005 Copper Equivalent Cross Section 6S is the Primary Ore Pushback in 2005 Wm 2.00- 2.99% Eq Cu mm >3.00% Eqcu
Slide 8: Mining Sequence in 2005 by Quarter
i = Mining Sequence in 2005 by Quarter Copper Equivalent Cross Section ¢ Pushback 6S provides about 60% of the ore tonnes with Pushback 6N providing the balance. ¢ Ore from Pushback 6S contains about 80% of the Cu & over 95% of the Au from the Grasberg pit in 2005, mm > 3.00% Eqcu
Slide 9: Timing of 6S Ore
Timing of 6S Ore End of 3Q05 § eAbout 2 million tonnes of ore in 6S previously expected to be 2 mined in 3Q is now projected to be mined in 4Q ¢ Pushback 6S is still expected to be completed by year-end View looking South 2 million tonnes | @ 5.5% CuEq | Ore previously expected to be mined in 3Q now
Slide 10: Mining Sequence in 2006
: 3 ae pepe hI: ae Fv Mining Sequence in 2006 : Copper Equivalent Cross Section 6N is the Primary Ore Pushback in 2006 Wm 2.00- 2.99% Eq Cu mm >3.00% Eqcu
Slide 11: Mining Sequence in 2007
: 3 ae pepe hI: ae Fv Mining Sequence in 2007 : Copper Equivalent Cross Section 7S is the Primary Ore Pushback in 2007 Wm 2.00- 2.99% Eq Cu mm >3.00% Eqcu
Slide 12: Mining Sequence in 2008
— Mining Sequence in 2008 Copper Equivalent Cross Section 7S is the Primary Ore Pushback in 2008
Slide 13: PT-FI Mine Plan
PT- FI Mine Plan PT-FI’s Share 6 of Metal Sales, 2004-2009e neni 5 iti iS ae Copper, billion lbs Gold, milfion ozs 2005¢ - 2009e PT-Fi Share 2005¢e — 2009e PT-Fi Share Total: 6.2 billion ibs Total: 10.9 million ozs Annual Average: 1.35 billion ibs Annual Average: 2.2 million ozs 2.8 2.5 1.9 1.8 1.9
Slide 14: 2005 Outlook
a) 2005 Outlook Quarterly Pa yable Metal Sales . PT-FI’s share of Copper PT-FI’s share of Gold 4,47 billion pounds 28 million ounces 1100 500 1,025 450 380 375 825 ¢ 328 314 z 5 5 g 616 2 3 595 575 £ 250 = 550 3 A é 3 125 275 ° 450 >| < 50% >| oi Yo > \< 57 P > 1Q05 2Q05 3Q05 4Q05 1905 2Q05 3Q05 4Q0
Slide 15: Unit net cash costs sensitivity to gold price
¢ be (¢ per payable pound} 13¢ 10¢ 7¢ 4¢ -0- NOTE: $350 $375 $400 $425 $450 Gold Price Based on copper and gold sales of 1.47 billion ibs and 2.9 million ozs for 2005 and gold prices as noted in the second half of 2005. Quarterly unit costs will vary significantly with quarterly metal sales volumes.
Slide 16: PT-FI capital expenditures
( in millions) i) AC & Other 2005 — 2009 Average Annual: ~$185 Million "WPT-FI Gi Big Gossan $200 $200 $180 = a a $175 $160 $165 $160 $70 $50 ce $30 2004 2005e 2006e 2007e 2008e 2009e e = estimate. Amounts are projections; see cautionary statement. “Includes approximately $195 million for PT-FI’s sh
Slide 17: Development Projects
= Development Projects >» DOZ 50K Expansion > Common Infrastructure > On-going Mill Optimization «High Pressure Grinding Rolls >» Big Gossan Ww
Slide 18: DOZ 50K Expansion
| DOZ 50K Expansion + Production Profile Consistently operated in 00's t/d excess of nameplate Be irs tope Fomibey (238) ca pacity 50K Expansion under way epee ($62MM capital, $62 million (aggregate) 35K Expansion aggregate) to accelerate (completed 1903) development & to add a second crusher & en e
Slide 19: Common Infrastructure
Goonmon Infrastructure: ARCESS to Underground: Reserves 9 km from Portals Portals at Ridge Camp to Grasberg June 2005, 2Q 2007 Complete tunnel to Grasberg BC Begin mine development & other facilities Grasberg Block Cave “Spur” Kueing Liar Kucing Liar Amole Progress continues on the Common Infrastruc
Slide 20: On-Going Mill Optimization: High Pressure Grinding Rolls
EE pI Sia a |} On-Going Mill Optimization a) High Pressure: Grinding Rolls CHPGRS) (Grad e Install HPGRs i in the North/South Concentrator Y Higher Recoveries Y Potential Higher Throughput e Aggregate Capital of $36MM (PT-FI’s share is $22MM) ¢ Project is financially attractive > 18% IRR* at 85¢ & $
Slide 21: Big Gossan
Big Gossan Pe Te ee eT nee ee ee ee ee ai 3.4% CuEq vs. 44 million tonnes TL dinGes 2.5% Cu, 1.2g/tAu “pozaw. _*» Open Stope with Paste Aggregate Metal 44% more cu & Backfill 2.3 billion Ibs C 57% more Au illion Ibs Cu than 10K $95MM in Capital (2006- 1.1 million ozs Au reserves 2009); PT-FI share:
Slide 22: 2005 Exploration Program
Mae 2005 Eepeaton | Program ee ee al eee ee Ps orm Se 0 EP TE al a ¢ Focused on testing extensions of the MLZ & Deep MLZ to the northwest, expansion of the Deep Grasberg and Deep Dom ¢ Continue to assess the timing of resuming exploration activities outside of the Grasberg mining district 2
Slide 23: Operating cash flow sensitivities to copper and gold prices
( in millions, except copper and gold prices) $1,200 Copper Gold 2005 147° 28 $1,000 2006 14 19 2007 Ld 18 6 150 25 8 $800 . = ---|/ 5 = > 8 $600 4 --< < --os) 9 3 wn g = — = = (=) 2 3 =) | =. Fi i= g $400 N ‘06-07e gS } Avg. 1 3 $200 +4 a $0 $1.40/$420 $1.00 $1.25 $1.50 $350 $400 $450 39-4905 $400
Slide 24: Debt maturity profile
$1,200 ($ in millions) $900 $500 ate 22m 510 l o 4 7% | Conv. | ! Notes i 106% | Convert I $300 $253 Caiem | price: | Notes $30.87 676% of, per j Senior share Notes $20 $52 | “0 $14 $14 1 i 2005 2006 2007 2008 2009 2010 2011 Thereafter [_SEquipment Loans Tatlantic Copper @ Senior Notes @Convertible
Slide 25: Financial Policy
Financial Policy » Maintain Strong Balance Sheet and Financial Flexibility - Year-to-Date Debt Reductions Approximate $170 Million » Maintain Regular Quarterly Dividend That Can Be Sustained Within Broad Range of Commodity Prices » In Periods of High Commodity Prices, Supplement Regular Dividend Wit
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