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3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Oct 22, 2012 · 39 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    3rd Quarter 2012 Earnings Conference Call October 22, 2012 www.fcx.com CONNECTING THE FUTURE
  2. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    Highlights Continued Production Growth in North America and Africa Multiple Operating Records at Tenke Fungurume Improving Productivity at Grasberg Advanced Brownfield Development Projects Construction of Tenke Fungurume…
  3. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    Financial Highlights Sales Data 3Q12 9 Mos. 2012 Copper Consolidated Volumes (mm lbs) 922 2,676 Average Realization (per lb) 3.64 3.63 Site Production & Delivery Unit Costs (per lb) 2.03 2.00 Unit Net Cash Costs (per lb) 1.62 1.46…
  4. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Quarterly Operating Highlights 3Q12 Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery (1) 1.97 1.63 2.96 1.63 2.03 By-Product Credits…
  5. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    Markets 2,500 500 2,000 400 000s Metric Tons Cents Per Pound 1,500 300 LME Copper Price 1,000 200 500 100 Global Exchange Stocks* 0 0 Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan-…
  6. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    Copper Market Commentary China Remains Important Demand Driver Improving U.S. Copper Demand - Recent Auto and Housing Data Have Been Positive Weak European Demand Global Inventories Remain Relatively Low Ongoing Supply…
  7. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    Value Creation Focus INVESTMENT CASH MINERAL RESERVE IN ATTRACTIVE PRODUCTION FLOWS/ RESOURCES ADDITIONS DEVELOPMENT GROWTH RETURNS PROJECTS FCX Copper Resources at 12/31/2011 (a) Recoverable Reserves 120 bn lbs (b)…
  8. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    Highly Attractive Brownfield Development Projects Expansion Projects in Progress North America* Mill Expansions (t/d) Incr. Cu (mm lbs/yr) Capital* Achieve ( blns) Full Rates Morenci Expansion Cerro Verde (360K) 600 4.4 2016…
  9. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    Brownfield Development Morenci Mill Expansion Key Project Metrics Positive drilling results continue to expand potential milling sulfide resource in this multi-year program Expand mill to 115K t/d Copper (bln lbs) Increase mining…
  10. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    Brownfield Development Cerro Verde Mill Expansion Key Project Metrics Expand mill from 120K t/d to 360K t/d Increase mining rate from 320K t/d to 850K t/d Capital costs: 4.4 billion* Incremental Production: 600mm lbs Cu/year,…
  11. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    Brownfield Development Tenke Fungurume Expansion Key Project Metrics Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: 850 million* Solution Extraction Facilities…
  12. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Grasberg BC & DMLZ Underground Mine Development Completed significant development on access to underground ore bodies To-date, completed 66 km of development in Grasberg BC Grasberg open pit & 32 km in DMLZ; record development in…
  13. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    Update on Grasberg Unusually low metal production in 2012 compared with historical levels Lower grades in Grasberg open pit DOZ ramp-up: panel repairs more extensive expect 80K t/d during 2013; current rate: 50K t/d Mine…
  14. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    Americas Growth Outlook Copper Production billion lbs per year 3.5 Potential Projects under review 2.9 Cerro Verde Expansion 2.6 Morenci 2.4 Expansion Chino Restart Morenci Mill Exp. 2 El Abra 1.5 Ajo Mill bln lbs…
  15. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    Africa Growth Outlook Copper Production billion lbs per year Phase 4 Expansion 0.6 Phase 3 0.4 Oxides Expansion Phase 2 0.3 Expansion 0.15 2009 2012e 2014e Potential with Potential additional with Sulfides oxide e =…
  16. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    Portfolio of World Scale Mines Positive Exploration Results Big Mines Get Bigger Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Tenke Grasberg Fungurume Cerro Verde El Abra * Grasberg currently…
  17. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    Climax Molybdenum Start-Up Climax Processing Facilities Construction completed mid-2012 Start-up in March 2012, first moly shipment in 2Q12 Ramp up to 20mm lbs/yr during 2013, subject to market conditions Capacity to increase to…
  18. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    Exploration Targets in Major Mineral Districts 255 million in 2012e North America 30% Australasia 6% South & Other Areas America Indonesia 29% 12% Africa 23% Note: FCXs consolidated share; e = estimate. See Cautionary…
  19. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    2012 Outlook Sales Outlook: Copper: 3.6 Billion lbs. Gold: 1.0 Million ozs. Molybdenum: 82 Million lbs. Unit Net Cash Cost(1): 1.50/lb in 2012e Reflects Impact of Lower Volumes at Grasberg Costs in Future Years Expected to…
  20. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    Near-Term Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 5.0+ 2 1.8 5 1.4 1.4 4.5 4.3 1.0 1 4 3.7 3.6 0 2011 2012e 2013e 2014e 3 ____________________ Note: Consolidated gold sales include approximately…
  21. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    2012e Quarterly Payable Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 500 1,250 375 288 266 255 250 202 1,000 927 922 930 125 827 0 1Q12 2Q12 3Q12 4Q12e 750 ____________________ Note: Consolidated gold…
  22. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    2012 Operating Estimates 2012e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs (1) Site Production & Delivery (2) 1.90 1.61 3.24 1.53 2.03 By-product Credits…
  23. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    Reconciliation of Unit Cash Costs Consolidated per lb of copper 2011 101 Grasberg (a) 28 North America (b) 9 South America (c) 11 Tenke (d) 1 Total 49 2012e 150 Impact of Higher 2013e/2014e Grasberg Volumes (34) With Higher…
  24. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    EBITDA and Cash Flow at Various Copper Prices Average EBITDA* (1,500 Gold & 12 Molybdenum) 18 (US billions) 15 12 50% 9 2015e/2016e Increase Average 6 2013e/2014e 3 Average 0 Cu 3.00/lb Cu 3.50/lb Cu 4.00/lb Average…
  25. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    Sensitivities Operating Change EBITDA Cash Flow (US millions) Copper: -/+ 0.10/lb 405 275 Molybdenum: -/+ 1.00/lb 80 65 Gold: -/+ 50/ounce 75 45 Diesel(1): -/+ 10% 90 65 Purchased Power(2): -/+ 10% 50 40 Currencies(3): +/- 10%…
  26. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    Capital Expenditures (1) Major Projects All Other (US billions) 5 4.6 4 3.6 1.6 3 2.5 1.4 2 1.1 (3) (3) 3.0 1 (2) 2.2 1.4 0 2011 2012e 2013e (1) Capital expenditure estimates include projects in progress. Project…
  27. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    Financial Policy Maintain Strong Balance Sheet & Liquidity Position Invest in Attractive Growth Projects/Capital Discipline Current Common Stock Dividend Rate: 1.25/Share per Annum Board to Review Financial Policy on an…
  28. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    FCX Investment Summary Worlds Premier Publicly Traded Copper Company Worlds Largest Molybdenum Producer & Significant Gold Producer Long-lived Reserves, Geographically Diverse Operations Strong Near-term and Longer-term Growth…
  29. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    Reference Slides
  30. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    PT-FI Mine Plan PT-FIs Share of Metal Sales, 2012e-2016e 2012e 2016e PT-FI Share Total: 5.7 billion lbs copper Copper, billion lbs Annual Average: 1.14 billion lbs Gold, million ozs 2012e 2016e PT-FI Share Total: 8.5 million ozs…
  31. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    Grasberg Open Pit 9N 8E 9S N 32
  32. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    Mining Sequence in 2012 Copper Equivalent Cross Section A B 8E and 9N are the Primary Ore Pushbacks in 2012 9S 9N Grasberg Plan View End 2011 B 8E Legend: 1Q12 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00 - 1.99…
  33. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    Mining Sequence in 2012 Copper Equivalent Cross Section A B 8E and 9N are the Primary Ore Pushbacks in 2012 9S 9N 2Q12 Grasberg Plan View End 2011 B 8E Legend: 1Q12 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00 -…
  34. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    Mining Sequence in 2012 Copper Equivalent Cross Section A B 8E and 9N are the Primary Ore Pushbacks in 2012 9S 9N 2Q12 3Q12 Grasberg Plan View End 2011 B 8E Legend: 1Q12 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00…
  35. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    Mining Sequence in 2012 Copper Equivalent Cross Section A B 8E and 9N are the Primary Ore Pushbacks in 2012 9S 9N 2Q12 3Q12 Grasberg Plan View End 2011 4Q12 B 8E Legend: 1Q12 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00…
  36. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    Mining Sequence in 2013 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2013 9S 9N Grasberg Plan View End B 2012 Legend: 8E 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00 - 1.99 2.00…
  37. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 37
    Mining Sequence in 2014 Copper Equivalent Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2014 9S 9N Grasberg Plan View B End Legend: 2013 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00 - 1.99 1.99% CuEq…
  38. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 38
    Mining Sequence in 2015 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2015 Grasberg Plan View End B 9S 2014 Legend: 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00 - 1.99 1.99% CuEq 2015 % Eq…
  39. 3rd Quarter 2012 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 39
    Mining Sequence in 2016 Copper Equivalent Cross Section A B 9S is the Primary Ore Pushback in 2016 Grasberg Plan View End B 2015 Legend: 9S 0.25 0.50 - 0.99 0.99% CuEq % Eq Cu 1.00 1.00 - 1.99 1.99% CuEq % Eq Cu…

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