FCX Has Potential New Long Term Projects And Net Income Of $1.8 Billion

 

PHOENIX, AZ - Freeport-McMoRan Inc. President and CEO, Richard C. Adkerson, said During 2017, “The company reported reported net income of $1.0 billion for fourth-quarter 2017 and $1.8 billion for the year 2017, compared with net income of $292 million for fourth-quarter 2016 and a net loss of $4.2 billion for the year 2016. Our global team’s focus on productivity and cost and capital discipline, together with improved market conditions for copper, produced solid results.“ 

Through exploration drilling, FCX has identified a significant resource at its wholly owned Lone Star project located near the Safford operation in eastern Arizona. It has commenced a project to develop the Lone Star oxide ores with first production expected by the end of 2020. Total estimated capital costs for the project, including mine equipment and pre-production stripping, approximates $850 million and will benefit from the utilization of existing infrastructure at the adjacent Safford operation. Production from the Lone Star oxide ores is expected to average approximately 200 million pounds of copper per year with an approximate 20-year mine life. The project also advances the potential for development of a larger-scale district opportunity. Additional drilling continues to evaluate longer term opportunities available from the significant sulfide potential in the Lone Star/Safford minerals district.

In North America,  consolidated copper sales volumes of 354 million pounds in fourth-quarter 2017. North America copper sales are estimated to approximate 1.5 billion pounds for the year 2018. The Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico in addition to copper, certain of the copper mines produce molybdenum concentrate, gold and silver. FCX has significant undeveloped reserves and resources in North America and a portfolio of potential long-term development projects.

FCX operates two copper mines in South America - Cerro Verde in Peru and El Abra in Chile. The Cerro Verde expansion project commenced operations in September 2015. The project expanded the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day, and averaged 374,200 metric tons of ore per day in fourth-quarter 2017. Cerro Verde's expanded operations benefit from its large-scale, long-lived reserves and cost efficiencies. At El Abra, the company continues to evaluate a major expansion to process additional sulfide material and to achieve higher recoveries. Exploration results at El Abra indicate a significant sulfide resource, which could potentially support a major mill project similar to facilities recently constructed at Cerro Verde. South America's consolidated copper sales volumes of 312 million pounds in fourth-quarter 2017. Sales from South America mining are expected to approximate 1.2 billion pounds of copper for the year 2018.

Through its 90.64 percent owned and consolidated subsidiary PT-FI, FCX's assets include one of the world's largest copper and gold deposits at the Grasberg minerals district in Papua, Indonesia. PT-FI operates a proportionately consolidated joint venture, which produces copper concentrate that contains significant quantities of gold and silver.  PT-FI is currently mining the final phase of the Grasberg open pit, which contains high copper and gold ore grades. PT-FI expects to mine high-grade ore over the next several quarters prior to transitioning to the Grasberg Block Cave underground mine in the first half of 2019.

PT-FI has several projects in the Grasberg minerals district related to the development of its large-scale, long-lived, high-grade underground ore bodies. In aggregate, these underground ore bodies are expected to produce large-scale quantities of copper and gold following the transition from the Grasberg open pit. Substantial progress has been made to prepare for the transition to mining of the Grasberg Block Cave underground mine. Mine development activities are sufficiently advanced to commence caving in early 2019. The ore flow system and underground rail line are expected to be installed during 2018. Assuming achievement of planned operating rates for 2018, consolidated sales volumes from Indonesia mining are expected to approximate 1.2 billion pounds of copper and 2.4 million ounces of gold for the year 2018

At the company’s two molybdenum mines: the Henderson underground mine and the Climax open-pit mine, both in Colorado, production from the  mines totaled 8 million pounds of molybdenum in fourth-quarter 2017. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrate, which is typically further processed into value-added molybdenum chemical products. 

Freeport-McMoRan Inc. (FCX), formally known as Freeport-McMoRan Copper & Gold Inc., was established in 1988 following the discovery of the Grasberg copper and gold deposit in Papua, Indonesia, when FCX’s former parent company, then known by the New York Stock Exchange trading symbol of “FTX”, sold 20 percent of the company in an initial public offering, or IPO. Following the acquisition of Phelps Dodge in 2007, FCX transformed into a dynamic industry leader, and combined the assets and technical teams of two great companies. FCX’s unique portfolio of mining assets was developed and acquired by several predecessor companies, including Freeport Minerals, Phelps Dodge, Cyprus Minerals, American Metal Company (AMAX), and Climax Molybdenum, among others. The many important milestones, which transpired over decades, make FCX’s portfolio of assets difficult to replicate.