Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — 2018 Global Metals, Mining & Steel Conference

29 slides from Freeport-mcmoran's conference presentation, May 15, 2018

  1. Slide 1: 2018 Global Metals, Mining & Steel Conference

    2018 Global Metals, Mining & Steel Conference Richard C. Adkerson President & CEO May 15, 2018 fcx.com

  2. 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

  3. Slide 3: Powered by Copper

    “Powered by Copper”  Well-Placed to Benefit from Industry-Leading Position in Copper  Long-Lived, Geographically Diverse Reserves and Resources  Strong Cash Flows Underpinned by Large-Scale Production Capacity and Ongoing Cost Management  Attractive Inventory of Potential New Low-Risk Developmen

  4. Slide 4: Copper Market Commentary

    Copper Market Commentary  Real Demand Growing in Key Regions • Positive Momentum Continues in China • U.S. and Europe Healthy - Autos and Construction • Cathode Consumption Increasing with Tighter Scrap Availability  Supply Constraints Continue • Absence of Major Projects in the Pipeline • Concent

  5. Slide 5: World's Leading Copper Producers

    World’s Leading Copper Producers Top 10 Copper Producers (2018e) Total Operated Production (000 t) 2,000 1,500 1,000 500 0 Source: Wood Mackenzie March 27, 2018. Rankings based on net equity ownership; e = estimate 5

  6. Slide 6: World Class Copper Discoveries Are Extremely Rare

    World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves Million metric tons 2018e Copper Production Thousand metric tons 0 10 20 30 40 0 200 400 600 800 1000 1200 1400 Escondida - 1981 1981 Escondida - 1981 1981 Collahuasi - 1880 1880 Grasberg Complex - 1988 1988 KGHM Polish Co

  7. Slide 7: Americas Development Opportunities

    Americas Development Opportunities Future Development Subject to Market Conditions U.S. • Large footprint with substantial (bns of lbs)  Large footprint undeveloped sulfidewith substantial resources 257 undeveloped • Significant sulfide existing resources infrastructure Bagdad  Significant existin

  8. Slide 8: Lone Star Oxide Development Project

    Lone Star Oxide Development Project  12/31/2017 Reserve: 4.4 bn lbs of Copper Safford Leach Dos Pobres Pit Safford Facility Stockpile San Juan Pit  $850 mm Project; Utilizes Existing Infrastructure at Safford  Commenced Pre-stripping Activities in 1Q18 Lone  Provides Exposure to Large Sulfide De

  9. Slide 9: El Abra Sulfide Mill Project

    El Abra Sulfide Mill Project Large Sulfide Resource -- Advancing Technical Studies Resource 240 kt/d Estimated Expected Estimate Concentrator Production Lead Time 2.0 Bn Tonnes at Similar to Recent ~750 mm lbs/year 6 – 8 years * >0.45% Copper Cerro Verde Expansion West Cross-Section looking North Ea

  10. Slide 10: Indonesia Update

    Indonesia Update  Parties Have Agreed to a Framework for Long-Term Resolution 51% Divestment @ FMV; Development of New Smelter FCX / GoI JV Partner Extension of Long-Term Mining Rights with Fiscal and Legal Certainty  1st Quarter Milestones  Open Items • Significant Progress on Fiscal • Agreement

  11. Slide 11: Papuan Surface Water Tax Update

    POWERED BY COPPER Papuan Surface Water Tax Update  Provincial Government in Papua Has Sought to Impose a Surface Water Tax  In January 2017, Indonesia Tax Court Issued an Unfavorable Ruling  $530 million in Total Exposure Based on Exchange Rate as of YE 2017, including penalties  The Supreme Cou

  12. Slide 12: Grasberg Block Cave – Key Milestones

    Grasberg Block Cave – Key Milestones Reserves YE 2017 Dry Commissioned Rail Unloading Station  963mm t @ 1.01% Cu & 0.72 g/t Au Completed to Date  +226 km of Development  Mine Access  Service Shaft  Initial Fans & Vent Infrastructure  Rail Connection  Crusher #1  Batch Plant  Train & Track

  13. Slide 13: Deep MLZ Commissioning

    Deep MLZ Commissioning  Reviewing DMLZ Mine Plan in Response to a Continuation of Mining-induced Seismic Activity Over Last Several Months  Slowing Ramp-up Schedule to Assess Alternatives to Manage Rock Stress in Cave  This is Not Expected to Affect Longer Term Mine Plans or Ultimate Reserve Reco

  14. Slide 14: 2018e Outlook

    2018e Outlook*  Copper: 3.8 Billion lbs. Sales  Gold: 2.4 Million ozs. Outlook  Molybdenum: 95 Million lbs.  Site Production & Delivery: $1.70/lb Unit Cost of Copper  After By-product Credits(1): $1.01/lb, Including $0.97/lb for 2Q18e Operating  ~$5.6 Billion (@ $3.15/lb Copper for 2Q18e – 4Q1

  15. Slide 15: Transition Year

    Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 4.0 4 3.8 3 3.7 2.4 3.3 2 1.6 1.45 3 1 0.65 0 2017 2018e 2019e 2020e - 2 2021e AVG Transition Year Note: Consolidated gold sales include 144k ozs in 2017, 230k ozs in 2018e, 60k ozs in 2019e, 135k ozs for 2020e-2021e avg for noncontro

  16. Slide 16: EBITDA and Cash Flow at Various Copper Prices

    EBITDA and Cash Flow at Various Copper Prices (US$ billions) Average EBITDA ($1,300/oz Gold, $12/lb Molybdenum) $9 $6 $3 Average 2019e - 2021e $0 Cu $3.00/lb Cu $3.25/lb Cu $3.50/lb Average Operating Cash Flow Excludes Working Capital Changes ($1,300/oz Gold, $12/lb Molybdenum) $6 $4 $2 Average 2019

  17. Slide 17: Capital Expenditures

    Capital Expenditures (US$ billions) $2.3 $2.0 $1.4 Major 1.1* 1.3* Mining Projects 0.9 Other Mining 0.9 1.0 0.5 2017 2018e 2019e * Major mining projects include CAPEX associated with Grasberg Underground development ($0.75 bn per year in 2018e and 2019e) and Lone Star ($0.22 bn in 2018e and $0.37 bn

  18. Slide 18: Strong Execution of Deleveraging Plan

    Strong Execution of Deleveraging Plan Net Debt* at Varying Copper Prices (US$ billions) $25.0 $20.1 $20.0 $15.0 $11.8 $10.0 $7.9 $6.1 $5.5 $4.9 $5.0 $0.0 Net Debt/ YE 2015 YE 2016 1Q18 $3.00 $3.25 $3.50 Adjusted EBITDA 4.6x 2.4x 1.1x 0.8x 0.7x 0.5x YE 2018e * Net debt equals gross debt less consolid

  19. Slide 19: Financial Policy

    Financial Policy  Significant Deleveraging Over Last Two Years Balanced Approach  Positive Market to Enable Further Debt Reduction & Enhanced Returns to Shareholders  Disciplined Approach to Investing in Attractive Growth Projects  Board Action to Reinstate Cash Dividend on Common Stock • Initia

  20. Slide 20: Reference Slides

    Reference Slides 20

  21. Slide 21: Financial Highlights

    Financial Highlights Sales Data 1Q18 1Q17 Copper Consolidated Volumes (mm lbs) 993 809 Average Realization (per lb) $3.11 $2.67 Site Production & Delivery Costs (per lb) $1.67 $1.60 Unit Net Cash Costs (per lb) $0.98 $1.39 Gold Consolidated Volumes (000’s ozs) 610 182 Average Realization (per oz) $1

  22. Slide 22: 1Q 2018 Mining Operating Summary

    1Q 2018 Mining Operating Summary North South 1Q18 Unit Production Costs (per lb of Cu) America America Indonesia Consolidated Cash Unit Costs (Credits) Site Production & Delivery, excluding adjustments $1.84 $1.78 $1.36 $1.67 By-Product Credits (0.20) (0.25) (2.59) (0.98) Treatment Charges 0.10 0.20

  23. Slide 23: 2018e Operating Estimates

    2018e Operating Estimates North South 2018e Unit Production Costs (per lb of Cu) America America Indonesia Consolidated Cash Unit Costs (1) Site Production & Delivery (2) $1.85 $1.69 $1.52 $1.70 By-product Credits (0.25) (0.25) (2.73) (0.99) Treatment Charges 0.11 0.19 0.25 0.18 Royalties & Export D

  24. Slide 24: 2018e Quarterly Sales

    2018e Quarterly Sales Copper Sales (million lbs) Gold Sales (thousand ozs) 1,200 750 700 690 610 993 990 500 430 970 900 875 250 0 1Q18 2Q18e 3Q18e 4Q18e Note: Consolidated gold sales include approximately 57k ozs in 1Q18, 68k ozs 600 in 2Q18e, 65k ozs in 3Q18e and 40k ozs in 4Q18e for noncontrollin

  25. Slide 25: PT-FI Mine Plan

    PT-FI Mine Plan PT-FI’s Share of Metal Sales, 2017-2022e 2018e – 2022e Total: 5.4 billion lbs copper 2018e – 2022e Total: 7.6 million ozs gold PT-FI Share Annual Average: 1.1 billion lbs PT-FI Share Annual Average: 1.5 million ozs Copper, billion lbs Gold, million ozs 2.42 1.54 1.6 1.6 1.5 1.3 1.15

  26. Slide 26: Grasberg Mining District

    Grasberg Mining District PT-FI History & of Block Caving 1980’s r GBT b Grasberg GBT (depleted) Deplete open pit 1990’s IOZ IOZ bl Deplete DMLZ (depleted) 2000’s DOZ DOZ b (operating) Operat DOZ • DM DMLZ Start Grasberg Future • Gra In de Block Cave Kucing Ertsberg East • Kuc Futu 1980’s Liar Amole

  27. Slide 27: 2019e - 2021e Sensitivities

    2019e - 2021e Sensitivities (US$ millions) Operating Change EBITDA Cash Flow Copper: +/- $0.10/lb $360 $280 Molybdenum: +/- $1.00/lb $80 $75 Gold: +/- $50/ounce $55 $30 Currencies: (1) +/- 10% $175 $125 (1) U.S. Dollar Exchange Rates: 600 Chilean peso, 13,800 Indonesian rupiah, $0.79 Australian doll

  28. Slide 28: FCX Debt Maturities as of 3/31/18

    FCX Debt Maturities as of 3/31/18 (US$ billions) Pro forma for Redemption of FCX 6.750% and FMOG 6.875% Senior Notes in April 2018 $8 Total Debt & Cash at 3/31/18 Actual PF Call FCX Revolver $ - $ - $6 Senior Notes 10.4 9.9 Cerro Verde Credit Facility 1.2 1.2 Total Debt $11.6 $11.1 Consolidated Cash

  29. Slide 29: Adjusted EBITDA Reconciliation

    Adjusted EBITDA Reconciliation (in millions) 12-mos Ended 1Q 2018 3/31/18 Net Income Attributable to Common Stock – Continuing Operations $ 703 $2,265 Interest expense, net 151 785 Income tax provision 506 1,215 Depreciation, depletion and amortization 451 1,776 Loss (gain) on early extinguishment o

Freeport-McMoRan — 2018 Global Metals, Mining & Steel Conference on 6ix