Freeport-McMoRan, Inc. · NYSE:FCX
Freeport-McMoRan — Freeport-McMoRan Copper & Gold — Securities Analysts Meeting (March 2003)
15 slides from Freeport-McMoRan's conference presentation, March 2003
Slide 1: Grasberg & Kucing Liar Connections to Existing Infrastructure
Grasberg & Kucing Liar Connections Connections to to Existing Existing Infrastructure Infrastructure Carstensz Valley Grasberg Pit (Final Pit) Grasberg Block Cave Common Ridge Kucing Liar Infrastructure Block Cave Camp N 60
Slide 2: Production Sequencing
Production Sequencing Reserves as of December 31, 2001 Grasberg open pit Intermediate Ore Zone Deep Ore Zone Big Gossan Kucing Liar Grasberg block cave Dom open pit Mill Level Zone Ertsberg Stockwork Zone Dom block cave Contract of Work Term (including extensions) 2000 2005 2010 2015 2020 2025 2030
Slide 3: 2001 Copper Cash Cost League, Future Underground Costs
2001 2001 Copper Copper Cash Cash Cost Cost League*, League*, Future Future Underground Underground Costs Costs ¢ ¢ per per pound pound copper copper 100 Even in today’s cost structure, PT-FI’s future 90 underground operations compares favorably 80 from a cost perspective. PT-FI’s unit costs continu
Slide 4: Cost Structure of Industry Will Change
Cost Structure of Industry Will Change 100 In the next 20 years or so, many mines deplete 90 and/or transition to underground mining. This fundamental change will have implications on 80 both supply and cost structures. 70 Depleting and/or transitioning to underground 60 50 PT-FI “Underground Era” 4
Slide 5: Comparable Underground Block Cave Mines
000's tonnes per day 0 20 40 60 80 100 Grasberg BC (full rate) 120 115 98 El Teniente (8 mines) Comparable 73 Bingham Canyon (planned) 60 Kucing Liar (planned) 40 Andina 36 Henderson Comparable Underground 35 DOZ (planned) 30 Palabora Underground Block Northparks 18 Block Cave 15 Mine Premier Diamon
Slide 6: Selected Mine Development Projects
Selected Mine Development Projects Capital & Operating Costs* (¢ per pound copper) Development Capital Unit Cash Costs, Net 71¢ 63¢ 65¢ 56¢ 53¢ 40 43¢ 45 31¢ 40 50 43 37 25 31 16 20 10 13 6 6 Grasberg Kucing Liar Los Antamina Palabora Batu Hijau Alumbrera Block Cave Pelambres Dev. Capital ($ billion
Slide 7: Financial Review
Financial Review Richard C. Adkerson President and Chief Financial Officer 66
Slide 8: Why Invest?
Why Invest? ¾ Asset Values are Real, Significant and Measurable ¾ Leading Industry Position ¾ Superior Operating Profile with Highly Prospective Acreage Position ¾ Significant Free Cash Flow Generator ¾ Large Valuation Discount – Indonesian Risk is Overstated ¾ Successful Management Track Record in
Slide 9: World's Premier Copper & Gold Mines
World’s Premier Copper & Gold Mines Copper Copper Production – 2002 Estimate Copper Reserves* 1000 30 Thousand Metric Tons Million Metric Tons 800 25 20 600 15 400 10 200 5 0 0 Grasberg Escondida Chuquicamata Collahuasi Norlisk Grasberg Escondida Cananea Chuquicamata Collahuasi Complex Complex Year
Slide 10: Copper & Gold – End Uses
Copper & Gold – End Uses Copper Gold Consumer & Dentistry General Products 2% 10% Investment 7% Transportation Industrial Equipment 9% 11% Construction 40% Industrial Machinery & Equipment 14% Jewelry Electric & 82% Electronic Products 25% Source: Brook Hunt 3Q 2002 Long-term Outlook for Copper Sour
Slide 11: Copper Fundamentals
Copper Fundamentals ¾ Mine Production Curtailed Over 850,000 Tonnes of Announced Reductions (7% of Market) ¾ Demand Tracks Economic Activity Infrastructure Development Growing Uses in Economy ¾ Attractive Industry Structure Source: Brook Hunt 4Q 2001 Absence of New Projects 160 1000 and Disc
Slide 12: Growth in China
Growth in China ¾ Chinese Copper Demand Has Increased by More Than 1 Million Tonnes Since 1998 (Over 80%) China Now 16% of Market ¾ Major Infrastructure Expansion Currently Underway – “Go West” Program ¾ “Over the next decade, the central government is planning for investments of up to $200 billio
Slide 13: Gold Prices
Gold Prices ¾ Positive Environment for Gold London Gold Prices $350 Weak U.S. Dollar Producer Hedging Announcements Geopolitical Uncertainties $325 Weak Equities Market Sept. 11 ECB Attacks on US Announcement Reduced Producer Hedging $300 Activity $275 ¾ Event-driven Market Rather Than Suppl
Slide 14: Product Mix
Product Mix FCX Mining Revenues – Gold vs. Copper Case 1 Case 2 $0.75 Copper/$300 Gold $0.75 Copper/$455 Gold Gold Revenues Gold Copper Copper Revenues Revenues 40% Revenues 50% 50% 60% * Estimated based on 1.4 billion pounds of copper and of 2.3 million ounces of gold, annually. NOTE: Amounts above
Slide 15: FCX 2002e Unit Cash Costs
FCX 2002e Unit Cash Costs Cash Costs: Allocated to Gold and Copper* As a Copper As a Gold Producer Producer Cash Unit Costs (¢/lb) ($/oz) Allocated** Site Production & Delivery 35 $238 Unit Costs Royalties 2 10 33¢/lb Copper Treatment Charges 18 123 $151/oz Gold Gold/Copper Credits (47) (469) Net Ca
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