Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — 2017 Global Metals, Mining & Steel Conference
27 slides from Freeport-mcmoran's conference presentation, May 16, 2017
Slide 1: 2017 Global Metals, Mining & Steel Conference
2017 Global Metals, Mining & Steel Conference Richard C. Adkerson President & CEO May 16, 2017 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: Driven by Value: 2016 Annual Report Highlights
“Driven by Value” 2016 Annual Report Highlights Global Team Came Together to “Prove Our Mettle” in 2016 Strengthened Balance Sheet & Liquidity DRIVEN BY VALUE Successfully Executed Operating Plans Refocused Business on Leading Position in Global Copper Industry Asset Sale Valuations Demons
Slide 4: World's Leading Copper Producers
World’s Leading Copper Producers Top 10 Copper Producers (2017e) (000 t) 2,000 1,500 1,000 500 0 Codelco Freeport- Glencore BHP Southern Rio Tinto KGHM First Antofagasta Vale McMoRan Copper Quantum Source: Wood Mackenzie March 16, 2017. Rankings based on net equity ownership. 4
Slide 5: Copper Market Commentary
Copper Market Commentary Improved Market Fundamentals LME Copper Price • Chinese Demand Remains Strong per pound • Europe/North America Steady Improvement $3.00 $2.50 5/12/17 $2.75 Supply Side Issues in Focus • Higher than Average Disruptions YTD $2.50 • Absence of Major New Projects on the Hori
Slide 6: World-Class Copper Portfolio
World-Class Copper Portfolio Long-term Value in High-Quality Asset Base Cu Reserves: 30.4 bn lbs Cu Reserves: 29.5 bn lbs Cu Reserves: 26.9 bn lbs Mo Reserves: 2.3 bn lbs Mo Reserves: 0.64 bn lbs Au Reserves: 25.8 mm ozs Mineralized Mat.: 49 bn lbs Mineralized Mat.: 29 bn lbs Mineralized Mat.: 19 bn
Slide 7: Showcasing Americas Portfolio
Showcasing Americas Portfolio Americas Copper Resources Key Strengths (bns of lbs) 266 Significant Current Production with Including Potential* Long-term Growth Options 137 Long-Lived Reserves Including 60 Mineralized Material* Flexible Operating Structure 2P Reserves @ $2.20 @ $2.00 Cu Contai
Slide 8: Large Development Project Inventory: Copper Sulfide Opportunities
Large Development Project Inventory Copper Sulfide Opportunities 1 km % Copper N Bagdad >=0.00% • >=0.10% >=0.20% >=0.30% Reserve Pit >=0.40% >=0.60% >=0.80% >=1.00% • Chino El Abra +0.3% Cu • • Lone Star/Safford 1 km N Reserve Pit • Morenci % Copper Sierrita >=0.00% >=0.20% • >=0.30% >=0.40% >=0.50
Slide 9: Indonesia Update
Indonesia Update Exports Resumed in April Entered into MOU with GoI Confirming that COW Would Continue to be Valid and Honored Until New Long-term Agreement is Reached Negotiations Commencing Immediately on Long-term Agreement Commenced Actions to Adjust Operations, Costs & Suspend Long- ter
Slide 10: 1Q17 Actions – PT-FI
1Q17 Actions – PT-FI ~10% Reduction in Workforce PT-FI Free Cash Flow ($ in mm) Implemented Efficiency Programs (Cost, CAPEX) $349 Slowed Investments in Grasberg Underground Development • Current Spend of $40 MM per Month on Grasberg $218 Block Cave Being Reviewed Regularly • Prepared to Suspe
Slide 11: Grasberg Block Cave
Grasberg Block Cave World Class Design Conveyor Transfer Chamber Service Shaft Rail Car Unloading Station Train Car Test Track Hoist Room Production Levels Grasberg Block Cave Design Oblique View Looking Southwest Reserves: 964mm t @ 1.03% Cu & 0.78 g/t Au Fixed Facilities Ventilation Drifts Pump Tu
Slide 12: Financial Benefits to Indonesia
Financial Benefits to Indonesia Positive Long-term Historical Relationship Financial Benefits Breakdown 50 Year History of Operations in Indonesia ~$19 Billion Contributed +$60 Bn to National GDP in Since 1992 GOI 62% Largest Private Employer in Papua & Significant FCX Economic Engine for De
Slide 13: Restoring Balance Sheet Strength
Restoring Balance Sheet Strength Year-End 2017e Net Debt at Varying Copper Prices (US$ billions) $20.1 $20.0 $15.0 $11.8 $9.7 $10.0 $9.0 $8.4 $5.0 $0.0 12/31/2015 12/31/2016 $2.50 $2.75 $3.00 Net Debt/2017e EBITDA 1.8x 1.5x 1.2x YE 2017e* * Projections assume normal operating rates at PT-FI beginnin
Slide 14: Committed to Balance Sheet Management – Strong Track Record
Committed to Balance Sheet Management – Strong Track Record (US$ billions) Manageable Near-Term Debt Maturity Schedule (1) $4 FCX Debt Structure 12/31/16 3/31/17 $3 $3.5 bn Revolver $ - $ - Sr. Notes 14.4 13.9 $2 Cerro Verde Non-Recourse $1.5 (2) Credit Facility 1.4 1.3 $1 $0.7 Bank Bilateral & Othe
Slide 15: Positive Long-term Outlook: Executing Clearly Defined Strategy
Positive Long-term Outlook Industry Leading Experienced Team Long-lived, Financially Copper Position of Operators & Geographically Strong Developers Diverse Portfolio Executing Clearly Defined Strategy 15
Slide 16: Reference Slides
Reference Slides DRIVEN BY VALUE \eoe Freeront-McMoRan
Slide 17: 1Q 2017 Mining Operating Summary
1Q 2017 Mining Operating Summary 1Q17 Unit Production Costs Cash Unit Costs North South (per pound of copper) America America Indonesia Consolidated Site Production & Delivery $1.52 $1.48 $2.15 $1.60 By-Product Credits (0.15) (0.18) (1.88) (0.43) Treatment Charges 0.11 0.22 0.28 0.18 Royalties & Exp
Slide 18: 2017e Outlook
2017e Outlook* Copper: 3.9 Billion lbs. Sales Gold: 1.9 Million ozs. Outlook Molybdenum: 93 Million lbs. Unit Cost Site Production & Delivery: $1.55/lb of Copper After By-product Credits: $1.08/lb (1) Operating ~$4.0 Billion (@ $2.50/lb Copper for 2Q17e – 4Q17e) Cash Flows (2) Each 10¢
Slide 19: Sales Profile
Sales Profile Copper Copper Sales (billion Sales*lbs) (billion lbs) Gold Sales* (million ozs) 5 4.65 3 3.9 4.0 4 4.17 2 2.3 1.9 Net of Volumes 1 3 Sold in 1.1 Tenke/Morenci Transactions 0 2016 2017e 2018e 2 Note: Consolidated gold sales include 99k ozs in 2016, 180k ozs in 2017e and 220k ozs in 2018
Slide 20: 2017e Operating Estimates
2017e Operating Estimates* 2017e Unit Production Costs (per pound of copper) North South America America Indonesia Consolidated Cash Unit Costs (1) Site Production & Delivery (2) $1.60 $1.58 $1.43 $1.55 By-product Credits (0.17) (0.17) (2.07) (0.73) Treatment Charges 0.10 0.21 0.26 0.18 Royalties &
Slide 21: 2017e Quarterly Sales
2017e Quarterly Sales Copper Sales* (million lbs) Gold Sales* (thousand ozs) 1,200 750 765 500 530 1,060 440 1,020 900 975 250 182 809 0 1Q17 2Q17e 3Q17e 4Q17e Note: Consolidated gold sales include approximately 17k ozs in 1Q17, 40k ozs 600 in 2Q17e, 50k ozs in 3Q17e and 73k ozs in 4Q17e for noncont
Slide 22: EBITDA and Cash Flow at Various Copper Prices
EBITDA and Cash Flow at Various Copper Prices Average EBITDA ($1,250/oz Gold, $9/lb Molybdenum)* $8 (US$ billions) $6 $4 $2 2017e/2018e Average $0 Cu $2.50/lb Cu $2.75/lb Cu $3.00/lb Average Operating Cash Flow (excluding Working Capital changes) ($1,250/oz Gold, $9/lb Molybdenum)* (US$ billions) $6
Slide 23: Sensitivities (US$ millions)
Sensitivities (US$ millions) 2017e/2018e Operating Change EBITDA Cash Flow Copper: (1) +/- $0.10/lb $350 $270 Molybdenum: (1) +/- $1.00/lb $50 $45 Gold: (1) +/- $50/ounce $100 $55 Currencies: (2) +/- 10% $140 $100 (1) Impacts as noted for changes in commodity prices for the period 2Q17e –4Q17e and 2
Slide 24: Capital Expenditures
Capital Expenditures (US$ billions) Future Spending Dependent on $2.8 Improvement in Market Conditions and Oil & Gas Continued Grasberg Underground Development 1.2 $1.8 $1.6 Major 0.9* Mining TOTAL 0.9* Projects MINING 1.2 1.6 Other Mining 0.7 0.9 0.4 2016 2017e 2018e * Major mining projects include
Slide 25: Grasberg Minerals District
Grasberg Minerals District Plan View Grasberg & Kucing Liar Grasberg Reserves* open pit DMLZ Grasberg (as of December 31, 2016) DMLZ Block Big Cave Tonnes (mm) 439 Gossan 964 DOZ Copper Grade (%) 0.9 1.03 Grasberg Block Cave Gold Grade (g/t) 0.75 0.78 Kucing Liar Amole Copper (bn lbs) 7.6 18.5 N 2,9
Slide 26: PT-FI Mine Plan
PT-FI Mine Plan* PT-FI’s Share of Metal Sales, 2017e-2022e 2017e – 2022e PT-FI Share 2017e – 2022e PT-FI Share Total: 6.3 billion lbs copper Total: 9.0 million ozs gold Annual Average: 1.05 billion lbs Annual Average: 1.5 million ozs 2.3 1.91 1.5 1.28 1.14 1.1 1.1 1.1 1.0 1.0 1.0 0.9 Copper, bn lbs
Slide 27: FCX Debt Maturities as of 3/31/17
FCX Debt Maturities as of 3/31/17* (US$ billions) $8 Total Debt & Cash at 3/31/17 FCX Revolver $ - Senior Notes 13.9 $6 Cerro Verde ($1.3) & Other 1.5 Total Debt $15.4 Consolidated Cash $ 4.0 $4 $2.8 $2.9 $2.1 $2.4 $2 CV Non- $1.7 Recourse 5.40% & $1.1 5.45% $0.9 $0.8 $0.7 Uncommitted & Sr. Notes CV
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