Freeport McMoRan : FCX 2Q 2024 Conference Call
FCX
FCX Conference Call
2nd Quarter 2024 Results
July 23, 2024
fcx.com
Highlights
•
Strong margins and cash flows
•
Production performance generally in-line
•
Sales volumes impacted by previously announced
shipping delays in Indonesia during June 2024
• Normal shipping schedules resumed in July 2024
•
Indonesia smelter has entered commissioning phase
•
Innovative copper leach initiatives nearly 2x vs. 2Q23
•
Advancing optionality in organic growth portfolio
•
Net Debt: $0.3 bn (excluding $3.0 bn for PT-FI's new
downstream processing facilities) *
Key Stats
Copper Sales (mm lbs) Gold Sales (k ozs) Copper Realization ($/lb) Gold Realization ($/oz) Unit Net Cash Costs ($/lb)
2Q24 Cash Flows
($ bns)
$2.7 (1)
$2.0 (2)
$0.8 (3)
2Q24 1H24
$4.48 $4.25
$2,299 $2,236
$1.73 $1.61
1H24 Cash Flows
($ bns)
$5.2 (1)
$3.9 (2)
$1.6 (3)
• Shareholder returns total $0.5 bn YTD, including
$0.1 bn of share repurchases in July
Adjusted
Operating
CAPEX,
Adjusted
Operating
CAPEX,
EBITDA
Cash Flow excl. Smelter
EBITDA
Cash Flow excl. Smelter
(1)
A reconciliation of amounts reported in FCX's consolidated financial statements
to Adjusted EBITDA is included on slide 27.
(2)
Net of working capital and other sources (uses) of $0.1 bn for 2Q24 and <$0 for 1H24.
(3)
2Q24 Includes $0.4 bn for major projects and excludes $0.3 bn for the Indonesia downstream processing
facilities; 1H24 Includes $0.9 bn for major projects and excludes $0.7 bn for the Indonesia downstream
processing facilities.
3
NOTE: Refer to non-GAAP disclosure on slide 2.
Copper Market Commentary
Inventories
Cu Price
(metric tons)
($/lb)
1,500,000
$5.00
LME Copper
Settlement Price
1,250,000
$4.50
1,000,000
$4.00
750,000
$3.50
500,000
$3.00
250,000$2.50
Global Copper Exchange Inventories
Includes LME, COMEX and Shanghai exchanges
0
$2.00
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
Source: Bloomberg as of 7/22/24
See Cautionary Statement.
Copper Prices ($/lb)
2Q Avg
YTD Avg
Current
LME Settlement
$4.42
$4.15
$4.14
COMEX
$4.55
$4.24
$4.18
o Demand acceleration supported by secular trends
o Supply limitations
o Copper's physical attributes, including superior electrical conductivity, make it the metal of electrification
4
2Q 2024 Operations Update
North America
Cu Sales: 292 mm lbs
Unit Net Cash Costs: $3.19/lb
NOTE: Refer to non-GAAP disclosure on slide 2.
South America
Cu Sales: 302 mm lbs
Unit Net Cash Costs: $2.46/lb
Cerro Verde
Indonesia
Cu Sales: 337 mm lbs
Au Sales: 356 k ozs
Unit Net Cash Credits: 21¢/lb
5
Americas Leach Innovation Initiatives
Low Cost, High Value
Targeting Copper in Stockpiles Unrecoverable by Traditional
Leach Methods with Precision Operating Techniques
Scaling the Opportunity
Significant Potential
39 bn lbs Contained *
(mm lbs)
55
51
46
47
South
America
16%
29
Morenci
50%
22
Other
North
14
America
34%
Long-term Production Target
~800 mm lbs/annum
Phase 1
Proving✓
Concept
25%Phase 3 Innovation in progress
50%
Phase 2
Scaling
in progress
25%
4Q22
1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
* Copper from historical placements beyond assumed recovery estimates and is not included in mineral reserves or mineral resources. Refer to slide 2.
6
Project Pipeline Progress Report
New Leach
Technologies
Americas
Bagdad
Expansion
Arizona
Lone Star
Expansions
Arizona
El Abra
Expansion
Chile
Grasberg
District
Indonesia
<$1 billion
Incremental investment
Developing
~$7.5 billion (under review)
~$4.0 billion
$3.5 billion based on
estimate
Excludes $2 bn for extension of
for Kucing Liar
recent feasibility
leach operations
$0.4 billion incurred to date
Incentive Price: <$4/lb
Incentive Price: $3.50-$4/lb
ANTICIPATED CAPITAL INVESTMENT
7
PT-FI's IUPK Extension Update
Potential beyond 2041
Mineral Resources
Potential/Exploration Targets
Plan View
View Looking Northeast
Dom
GBT OP
In-fill drilling of
Grasberg BC &
Kucing Liar
Resources
Deeper
Deeper
extension
Extension
of DMLZ
of Big Gossan
mineralization
mineralization
8
Annual Sales Profile
July 2024 Estimate
Copper 5.0
Sales
4.2
4.3
4.1
4.1
(billion lbs)
4.0
3.0
Gold 2
Sales
(million ozs)
1
0
1.7 1.8
1.5 1.5
2023
2024e
2025e
2026e
2.0
1.0
0.0
2023 2024e 2025e 2026e
NOTE: Consolidated copper sales include 1.34 bn lbs in 2023, 1.40 bn lbs in 2024e, 1.36 bn lbs in 2025e and 1.44 bn lbs in 2026e for noncontrolling interests; excludes purchased copper. Estimates assume deferrals of ~100 mm lbs of copper in 2024 related to ramp-up of PT-FI's new smelter.
NOTE: Consolidated gold sales include 808k ozs in 2023, 933k ozs in 2024e, 770k ozs in 2025e and 770k ozs in 2026e for noncontrolling interests. Estimates assume deferrals of ~120 k ozs of gold in 2024 related to ramp-up of PT-FI's new downstream processing facilities.
Moly
100
81
82
90
90
Sales
75
(million lbs)
50
25
0
2023
2024e
2025e
2026e
e = estimate.
9
EBITDA and Cash Flow at Various Copper Prices
Assuming $2,300/oz gold, $20/lb molybdenum
($ in bns except copper, gold and molybdenum prices)
Sensitivities Average '25e/'26e
(US$ in mms)
EBITDA
$16
$12
$8
$4
$0
Average '25e/'26e
Cu $4.00/lb
Cu $4.50/lb
Cu $5.00/lb
EBITDA
Copper
+/-$0.10/lb$430
Molybdenum
+/-$1.00/lb
$
80
Gold
+/-$50/oz
$
75
Currencies (1)
+/-10%
$220
Diesel
+/-10%
$
95
Operating
$12
Cash Flow
$9
Excludes working
capital changes
$6
$3
$0
Operating Cash Flow
Copper
+/-$0.10/lb$340
Molybdenum
+/-$1.00/lb
$
75
Gold
+/-$50/oz
$
50
Average
Currencies (1)
+/-10%
$155
'25e/'26e
Diesel
+/-10%
$
65
Cu $4.00/lb
Cu $4.50/lb
Cu $5.00/lb
NOTE: Refer to non-GAAP disclosure on slide 2. e = estimate.
(1) U.S. Dollar Exchange Rates: 920 Chilean peso, 16,250 Indonesian rupiah, $0.66 Australian dollar, $1.08 Euro, 3.72 Peruvian Nuevo Sol base case assumption. Each +10% equals a
10% strengthening of the U.S. dollar; a strengthening of the U.S. dollar against forecasted expenditures in these foreign currencies equates to a cost benefit of noted amounts.
10
Disclaimer
Freeport-McMoRan Inc. published this content on 23 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 July 2024 12:11:07 UTC.