Summary
Freeport-McMoRan Copper & Gold Inc. (FCX) filed an 8-K on December 13, 2001, to disclose preliminary estimates for 2002 sales volumes and production costs, presented during a financial analysts' meeting. The company anticipates a significant increase in copper sales for 2002, projecting 1.5 billion pounds, a 100 million pound rise from estimated 2001 levels. Conversely, gold sales are expected to decrease to 2.0 million ounces, a 600,000 ounce reduction compared to 2001 estimates. This reduction in gold output is attributed to mining lower-grade ore in the first half of 2002. The company also provided sales volume projections for 2003-2005, expecting an average of 1.4 billion pounds of copper and 2.4 million ounces of gold annually. Additionally, FCX forecasts its net cash production cost to remain below $0.20 per pound in 2002. This cost projection is influenced by anticipated gold sales volumes and current gold prices, as gold revenues are a credit against production costs. Investors should note that these are forward-looking statements and are subject to various risks, including commodity prices and Indonesian political risks.
Key Highlights
- 1Preliminary 2002 copper sales estimate: 1.5 billion pounds (100 million lbs increase vs. 2001 estimated sales).
- 2Preliminary 2002 gold sales estimate: 2.0 million ounces (600,000 oz decrease vs. 2001 estimated sales).
- 3Lower gold sales in 2002 attributed to mining lower-grade ore in the first half of the year.
- 4Projected 2003-2005 average annual sales: 1.4 billion pounds of copper and 2.4 million ounces of gold.
- 5Estimated 2002 net cash production cost projected to be below $0.20 per pound.
- 6Unit net cash production costs are sensitive to gold sales volume and gold prices due to revenue credits.
- 7Company operations include copper, gold, and silver mining in Indonesia, and smelting/refining in Spain and Indonesia.