Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Q1 2022 Earnings Presentation
35 slides from Freeport-mcmoran's earnings presentation, Apr 21, 2022
Slide 1: FCX Conference Call 1st Quarter 2022 Results
FCX Conference Call 1st Quarter 2022 Results April 21, 2022
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, or expectation
Slide 3: 1Q22 Highlights
1Q22 Highlights January • Continued strong execution of operating plans Key Stats Actual Estimate o Copper & gold sales 24-59% above 1Q21 actuals Copper Sales (mm lbs) 1,024 970 o Copper & gold sales 6-8% above January 2022 est. Gold Sales (k ozs) 409 380 o 1Q unit net cash costs in line with Januar
Slide 4: 2021 Reports
2021 Reports 2021 Annual Report Highlights • Clear strategy of being foremost in copper • Copper’s critical role in the clean energy transition • Premier copper portfolio of long-lived assets • Experienced team focused on value creation for all stakeholders 2021 Sustainability Report Highlights • Ac
Slide 5: Celebrating 55 years of Success in Indonesia
Celebrating 55 years of Success in Indonesia Impressive Past Robust Future Copper Production (bn lbs) 38.2 Remaining Copper Reserves (bn lbs) 32.2 Gold Production (mm ozs) 54.2 Remaining Gold Reserves (mm ozs) 26.6 Gross Revenues ~$112 Billion(1) Future Gross Revenues +$190 Billion(2) Grasberg Ertsb
Slide 6: Fundamental Outlook is Positive
Fundamental Outlook is Positive Rising Demand Copper Supply Structural Deficits for Copper Scarcity INFRASTRUCTURE INVENTORY • Copper is the backbone of • Remains very low on global construction and exchanges urbanization globally TECHNOLOGY SUPPLY GAP • Responsible producer of scale • Advances in c
Slide 7: 1Q 2022 Operations Update
1Q 2022 Operations Update North America South America Indonesia Cu Sales: 381 mm lbs Cu Sales: 264 mm lbs Cu Sales: 379 mm lbs Au Sales: 406 k ozs • Lone Star/Safford • Cerro Verde - Peru • Grasberg Underground o Increasing rates to achieve incremental o 1Q22 mill avg: 394k mt/d; 5% above 4Q rates o
Slide 8: Advancing New Leach Technologies
Advancing New Leach Technologies Taking Leach to the Next Level • Industry leader with long history of leach production Copper in Leach Stockpiles • Internal and external initiatives to advance sulfide Unrecoverable by leaching technologies and to drive continuous Traditional Leach Methods recovery
Slide 9: Future Growth Embedded in Existing Asset Base
Future Growth Embedded in Existing Asset Base Provides Increased Leverage to Higher Copper Prices New Leach Bagdad Lone Star El Abra Kucing Liar Technologies Expansion Expansions Expansion Grasberg District Americas Arizona Arizona Chile Indonesia • Advancing sulfide • Double concentrator • Near-ter
Slide 10: Annual Sales Profile
Annual Sales Profile April 2022 Estimate Copper Sales(1) (billion lbs) Gold Sales(2) (million ozs) 5 2 1.7 1.6 1.6 4.45 1.4 4.25 4.2 4 3.8 1 3 0 2021 2022e 2023e 2024e 2 Molybdenum Sales (million lbs) 100 1 82 80 80 80 75 50 0 2021 2022e 2023e 2024e 25 (1) Consolidated copper sales include 741 mm lb
Slide 11: Reconciliation of 2022e Unit Net Cash Cost Guidance
Reconciliation of 2022e Unit Net Cash Cost Guidance ($ and ¢ per pound of copper) Jan. 2022e April 2022e 2022e Site Production Guidance Guidance Costs Breakdown Price Assumptions Impacts Price Assumptions $4.50 Cu / $1,800 Au / $4.75 Cu / $1,950 Au / Other $19 Mo $19 Mo 12%*** Acid Materials Site Pr
Slide 12: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices ($ in bns except copper, gold and molybdenum prices) Sensitivities EBITDA l ($1,950/oz gold, $19/lb molybdenum) Average ’23e/’24e (US$ in mms) $20 EBITDA $15 Copper +/-$0.10/lb $425 $10 Molybdenum +/-$1.00/lb $ 80 Gold +/-$50/oz $ 80 $5 Average ’23e/’24e
Slide 13: Consolidated Capital Expenditures
Consolidated Capital Expenditures Excluding Indonesia Smelter Projects CAPEX (1) ($ in bns) $ Net of Scheduled Contributions $3.2 $3.0 $3.0(2) Planned Planned (3) $1.3 $0.9 (3) $1.9 $1.7(2) Discretionary Discretionary Major $0.6 $0.9 Projects $1.3 Other $0.6 $1.3 $1.2 2021 2022e 2023e (1) See slide
Slide 14: Indonesia Downstream Processing Update
Indonesia Downstream Processing Update PT-FI’s Downstream Commitment Financing to Support Downstream Commitment • PT-FI committed in 2018 IUPK to construct 2 mm tpy in-country • Completed $3 billion bond offering in April 2022 Cu concentrate processing capacity o Greenfield project expected to be co
Slide 15: Solid Balance Sheet and Credit Metrics
Solid Balance Sheet and Credit Metrics Rated Investment Grade $ Net Debt (1) by Moody’s and Fitch ($ bns) $5.2 (2) $1.3 3/31/2021 3/31/2022 Net Debt / Adjusted EBITDA (3) 0.9x 0.1x (1) Net debt equals consolidated debt less consolidated cash and cash equivalents. (2) Consolidated debt of $9.6 bn and
Slide 16: Financial Policy
Financial Policy Strategic Objectives Share Repurchase Program Scorecard as of April 20, 2022 Up to 50% Free Authorized Repurchased Remaining Cash Flow(1) to Be Returned $3.0 ~$1.1 ~$1.9 To stockholders under billion billion billion performance-based payout framework By Board in November 2021 Includ
Slide 17: Executing Clearly Defined Strategy Focused on Copper
Executing Clearly Defined Strategy Focused on Copper Strong cash flow Favorable generation and operational and balance sheet market outlook Responsible Advancing future producer with organic growth proven track record opportunities Successful ramp-up Increasing cash of Grasberg returns to shareholde
Slide 18: THE FUTURE
THE FUTURE fe =o = aa TT = Le
Slide 19: Reference Slides
ELECTRIFYING THE FUTURE Reference Slides
Slide 20: Copper – Metal of the Future
Copper – Metal of the Future Critical to Global Decarbonization Intensity of Use is Increasing with Decarbonization More than 65% of the Renewable energy world’s copper is used technologies use four to in applications that five times more copper deliver electricity than fossil fuel power generation
Slide 21: The Copper Mark
The Copper Mark Recognition for Responsible Production • Assurance framework developed to demonstrate the copper industry’s responsible production practices and contribution to the United Nations Sustainable Development Goals • Producers participating in the Copper Mark are committed to adhering to
Slide 22: Financial Highlights
Financial Highlights Sales Data 1Q22 1Q21 Copper Consolidated Volumes (mm lbs) 1,024 825 Average Realization (per lb) $ 4.66 $ 3.94 Site Production & Delivery Costs (per lb) $ 2.03 $ 1.86 Unit Net Cash Costs (per lb) $ 1.33 $ 1.39 Gold Consolidated Volumes (000’s ozs) 409 258 Average Realization (pe
Slide 23: 1Q22 Mining Operating Summary
1Q22 Mining Operating Summary Sales From Mines for 1Q22 & 1Q21 by Region North America South America (2) Indonesia (3) 381 379 406 308 264 259 258 256 (1) (1) 19 21 Cu Mo Au mm lbs mm lbs 000 ozs 1Q22 1Q21 1Q22 1Q21 1Q22 1Q21 1Q22 1Q21 1Q22 1Q21 North South 1Q22 Unit Net Cash Costs (per lb of Cu) Am
Slide 24: 2022e Operational Data
2022e Operational Data 2022e Sales by Region North America South America Indonesia 1,536 1,564 1,154 (2) (1) 1.6 80 Cu Mo Au mm lbs mm lbs mm ozs North South 2022e Unit Net Cash Costs (3) (per lb of Cu) America America Indonesia Consolidated Site Production & Delivery, excl. adjs.(4) $2.47 $2.45 $1.
Slide 25: 2022e Outlook
2022e Outlook Sales Unit Net Cash Operating Capital Outlook Cost of Copper Cash Flows (2) Expenditures • Copper: 4.25 billion lbs • Site prod. & delivery • ~$8.6 billion(3) @ • $3.2 billion (4) (excluding o 2022e: $2.10/lb $4.75/lb copper for smelter(5)) • Gold: 1.6 million ozs 2Q22e – 4Q22e o 2Q22e
Slide 26: 2022e Quarterly Sales
2022e Quarterly Sales Copper Sales (million lbs) Gold Sales (thousand ozs) 1,200 500 1,095 409 405 405 405 1,095 400 1,024 1,040 300 1,000 200 100 800 0 1Q22 2Q22e 3Q22e 4Q22e Note: Consolidated gold sales include 76k ozs in 1Q22, 76k ozs 600 in 2Q22e, 76k ozs in 3Q22e and 76k ozs in 4Q22e for nonco
Slide 27: Discretionary Capital Projects
Discretionary Capital Projects* Kucing Liar Grasberg Mill Recovery Project • Commenced long-term mine development activities • Installing new copper cleaner circuit • Approximate 10-year development timeframe • Improved Cu concentrate grades/metal recoveries • Sustain large-scale, low-cost Cu/Au pro
Slide 28: PT-FI Mine Plan Metal Sales, 2021 – 2026e
PT-FI Mine Plan Metal Sales, 2021 – 2026e Copper 2022e – 2026e Gold 2022e – 2026e Total: 7.9 billion lbs copper Total: 7.8 million ozs gold Annual Average: ~1.6 billion lbs Annual Average: ~1.6 million ozs 1.7 1.65 1.56 1.6 1.6 1.6 1.55 1.5 1.5 1.4 1.3 1.3 Cu Au bn mm lbs ozs 2021 2022e 2023e 2024e
Slide 29: Lone Star Update
Lone Star Update Oxides Sulfides 2P Reserves: 4.9 billion lbs Mineral Potential: ~50 billion lbs (3) 120 (1) • Success of oxide development advances 96 opportunity for scale Low capital 75 intensity • Design to incorporate combined leach and investment concentrate facilities – similar to Morenci in
Slide 30: Indonesia Downstream Processing Activities
Indonesia Downstream Processing Activities Greenfield Smelter PT Smelting Expansion Precious Metals Refinery (PMR) • 1.7 mm mt of annual concentrate capacity • 30% increase to existing smelter to add • To be constructed to process gold and 300,000 mt of annual concentrate capacity silver from greenf
Slide 31: Greenfield Smelter Construction Activity
Greenfield Smelter Construction Activity 31
Slide 32: FCX Debt Maturities as of 3/31/22
FCX Debt Maturities as of 3/31/22 (US$ bns) $8 Total Debt & Cash at 3/31/22 FCX Revolver $ - Senior Notes 8.6 Cerro Verde Term Loan 0.3 $6.2 PT-FI Term Loan (1) & Other 0.7 $6 Total Debt $ 9.6 Consolidated Cash and Cash Eq. $ 8.3 Undrawn FCX Credit Facility 3.5 Total Liquidity $ 11.8 $4 4.125%, 4.37
Slide 33: 1Q22 Copper Realization & 2Q22e Guidance
1Q22 Copper Realization & 2Q22e Guidance 1Q22 LME Average $4.53/lb Copper Price 3-Mo. Fwd Price for Copper $4.71/lb at the End of March $4.66/lb FCX 1Q22 Consolidated Copper Price Realization (Generally, 50/50 weight of qtrly avg and 3-mo forward price at end of period) FCX 1Q22 Prior Period Revenue
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in mm) 12 mos ended 1Q22 3/31/2022 Net income attributable to common stock $1,527 $5,115 Interest expense, net 127 584 Income tax provision 824 2,681 Depreciation, depletion and amortization 489 2,068 Net gain on sales of assets - (80) Accretion and stock-based comp
Slide 35: Freeport
FREEPORT FOREMOSTYN COPPER