Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport-McMoRan Copper & Gold — Citi Basic Materials Symposium 2007
28 slides from Freeport-mcmoran's conference presentation, Dec 5, 2007
Slide 1: Basic Materials Symposium
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD 2007 Basic Materials Symposium Richard C. Adkerson Chief Executive Officer New York City December 5, 2007 www.fcx.com
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements in which we discuss factors we believe may affect our performance in the future. Forward-looking statements are all state
Slide 3: FCX Investment Summary
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD FCX Investment Summary ¾ World’s Premier Publicly Traded Copper Company ¾ World Class, Long-lived, Geographically Diverse Operations ¾ Attractive Project Pipeline Supports Growing Production Profile ¾ Significant Exploration Potentia
Slide 4: Geographically Diverse, Long-Lived Asset Base
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Geographically Diverse, Long-Lived Asset Base Major Mine Operations & Development Projects All major assets majority-controlled and operated North North America America11 Grasberg (90.64%) Copper Reserves Reserves Cu 24.8 billion lbs
Slide 5: Geographically Diverse, Long-Lived Asset Base
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Geographically Diverse, Long-Lived Asset Base Pro forma Net Consolidated Interest Reserves 12/31/06 (1) Copper (billion lbs) 93.6 77.2 Molybdenum (billion lbs) 2.0 1.8 Gold (million ozs) 42.4 38.3 Average Sales Volumes (2007e-2009e)
Slide 6: Enhanced Diversification
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Enhanced Diversification Mining Mining Revenue Revenue by by Commodity Commodity Mining Mining Revenue Revenue by by Geography Geography 2006 Pro Forma 2006 Pro Forma Gold 10% Indonesia North America 38% 35% Molybdenum 12% Copper 78%
Slide 7: Proven Technical Expertise
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Proven Technical Expertise Copper Copper Production Production by by Method Method FCX is a World Leader ¾ Open Pit Mining SX/EW SX/EW Concentrate Concentrate ¾ SX/EW Production Technology 44% 44% 56% 56% ¾ Block Cave Underground Min
Slide 8: Operating & Financial Highlights
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Operating & Financial Highlights Sales Data 3Q06 3Q07 9-mo. 2007 Copper Consolidated Volumes (mm lbs) 324 949 (1) 2,479 (1) Average Realization (per lb) $3.43 $3.53 (2) $3.43(2) Gold Consolidated Volumes (000’s ozs) 478 269 2,137 Rea
Slide 9: Favorable Copper Markets
Favorable Copper Markets 2,000 400 1,750 350 Cents Per Pound 1,500 300 000’s Metric Tons 1,250 250 1,000 LME Copper Price 200 750 150 500 100 250 50 0 LME & COMEX Exchange Stocks* 0 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07
Slide 10: Positive Long-term Fundamentals
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Positive Long-term Fundamentals ¾ The Combination of Strong Fundamentals Has Created Extremely Attractive Market Conditions for the Copper Industry ¾ Supply is Unlikely to Increase Meaningfully Absence of Mega-development Projects
Slide 11: Gold/Molybdenum Markets Overview
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Gold/Molybdenum Markets Overview $900 London Gold Price ($/oz) $800 $700 $600 $500 $400 $300 $200 $100 $0 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 $40 Molybdenum Price* ($/lb) $35 $30 $25 $20 $15 $10 $5 $0 Jan-0
Slide 12: Strong Financial Profile
Strong Financial Profile Capitalization, Net of Cash ($ in billions) $12.1 $36.2 $49.3 12/31/2006 (1) At Closing of PD Current (3) Acquisition (2) Net Debt Net $6.3 Market Cap Debt $12.3 Market $14.2 Cap $22.0 Market Cap $43.0 __________ (1) Based on December 31, 2006 stock price of $55.73 and 221 m
Slide 13: 2007 Outlook
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD 2007 Outlook ¾ Pro Forma Sales Outlook (1): • Copper: 3.9 Billion lbs. • Gold: 2.3 Million ozs. • Molybdenum: 68 Million lbs. ¾ Modeled Operating Cash Flows (2): • ~$6.2 Billion for 2007 • ~$1.3 Billion in 4Q07 ¾ Capital Expenditures
Slide 14: Development Project Update: North America
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Development Project Update North America Morenci Mill Restart & Concentrate Leach Plant • Mill operated at 38K t/d* in 3Q, ramping up to 54K t/d capacity • Concentrate Leach Plant is currently being commissioned Morenci • Adds 115MM
Slide 15: Development Project Update: Climax Mine Restart
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Development Project Update North America Climax Mine Restart Proceeding with restart of Climax moly mine near Leadville, Co Primary crusher ~$500 million “brownfield” project with Covered Pebble open pit operation/construction of
Slide 16: Development Project Update: South America
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Development Project Update South America Cerro Verde Sulfide Mill Expansion • ~$900MM project completed in 4Q06 • Operated at capacity during the third quarter Cerro Verde Mill Expansion • Adds 430MM lbs/year aggregate El Abra Sulfid
Slide 17: Development Project Update: Indonesia
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Development Project Update Indonesia Common Infrastructure Underground Mine Development Drilling • DOZ Expansions - Completed 50K Expansion in mid-2007; record production of 56K t/d in 3Q - Further expansion to 80K • Completed 89% of
Slide 18: Development Project Update: Democratic Republic of Congo
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Development Project Update Democratic Republic of Congo Tenke Fungurume Mine Development Plant Site & Mine Shops • Engineering – 55% complete & Equipment procurement – about 70% complete Test Site • Construction – 15% complete. Bulk
Slide 19: Copper Reserves & Mineralized Material
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Copper Reserves & Mineralized Material Reserves* Mineralized Material** (billion lbs of recoverable copper) (billion lbs of contained copper) Sensitivity to Copper Price 146 107 94 69 $1.20 $1.50 $2.00 Potential for additional 94 bil
Slide 20: Significant Exploration Potential
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Significant Exploration Potential Papua, Indonesia ¾ Rights to 2.2 million acres Pacific Ocean ¾ Highly prospective exploration areas provide opportunities to continue to Banda Grasberg add to our long-lived reserves Sea Papua, Indon
Slide 21: Sales Profile 2007e - 2009e
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Sales Profile 2007e - 2009e Gold Sales (million ozs) Copper Sales (billion lbs) 3 2.3 2.1 5 1.9 2 4.5 1.4 4.4 1 4 3.9 3.6 0 2006 2007E 2008E 2009E Pro Pro Forma Forma* 3 ____________________ Note: Consolidated gold sales include appr
Slide 22: Pro Forma 2007e Sales and Unit Production Costs by Region
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Pro Forma 2007e Sales and Unit Production Costs by Region 2007e Pro Forma Sales by Region North America South America Indonesia 1,405 2.1 1,340 1,115 68 0.1 Cu Mo Cu Au Cu Au mm lbs mm lbs mm lbs mm ozs mm lbs mm ozs 2007e 1Q07 2007e
Slide 23: EBITDA and Cash Flow at Various Copper Prices
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD EBITDA and Cash Flow at Various Copper Prices Average Annual EBITDA 2008e-2009e ($700 Gold & $20 Molybdenum) $12 (US$ billions) $10 $8 $6 $4 $2 $0 Cu $2.50/lb Cu $3.00/lb Cu $3.50/lb Average Annual Operating Cash Flow 2008e-2009e ($7
Slide 24: Sensitivity to Commodity Prices
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Sensitivity to Commodity Prices Annual Annual Financial Financial Impact Impact Net Net Operating Operating Change Change EBITDA EBITDA Income Income Cash Cash Flow Flow (US$ millions) Copper: -/+ $0.20/lb $850 $490 $575 Molybdenum:
Slide 25: Capital Expenditures
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Capital Expenditures Major Projects All Other (US$ billions) $2.5 $2.3 $2.0 $1.9 1.1 $1.5 $1.4 1.0 $1.0 0.8 1.2 $0.5 0.9 0.6 $0.0 2007e * 2008e 2009e * Includes PD expenditures beginning March 20, 2007 Note: Includes capitalized inte
Slide 26: Debt Maturities at 9/30/07
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Debt Maturities at 9/30/07 (US$ millions) $8,000 $7,000 $6,493 $6,000 $5,000 New $4,000 Senior Notes and $3,000 PD Senior Notes $2,000 $1,362 $1,000 $341 $381 $25 $45 $48 $21 $15 $0 2007 2008 2009 2010 2011 2012 2013 2014 Thereafter
Slide 27: Op. Cash Flow After CAPEX & MI Distributions
F REEPORT-M FREEPORT -MCCM MOOR AN C RAN OPPER & COPPER &GGOLD OLD Average Annual Excess Cash Flow (1) (1) 2008e – 2009e ($ in billions, except copper, gold and molybdenum prices) $5 Copper Sensitivities with $700 Gold/$20 Molybdenum Op. Cash Flow After CAPEX & MI Distributions $4 Available for inve
Slide 28: Financial Policy
FREEPORT-M FREEPORT-MCCM MOOR AN COPPER RAN COPPER & & GOLD GOLD INC. INC. Financial Policy ¾ December 2007 Board Action Increased Common Stock Dividend From $1.25 to $1.75/Share per Annum Approved New Open Market Share Purchase Program ¾ FCX is Committed to Maintaining a Strong Financial Positi
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