8-KOther Events

FREEPORT-MCMORAN INC 8-K Report (Dec 13, 2001)

Filed December 13, 2001For Securities:FCX

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.

Frequently Asked Questions

FCX estimates 2002 sales volumes of 1.5 billion pounds of copper, an increase of 100 million pounds from estimated 2001 sales. Gold sales are projected at 2.0 million ounces, a decrease of 600,000 ounces from estimated 2001 sales, due to the mining of lower-grade ore in the first half of the year.

FCX projects its net cash production cost to be below $0.20 per pound in 2002. This projection is based on estimated gold sales volumes and current gold prices, as gold revenues are deducted in calculating unit net cash production costs, making them sensitive to these factors.

For the period 2003 through 2005, FCX anticipates average annual sales volumes of approximately 1.4 billion pounds of copper and 2.4 million ounces of gold.

The filing mentions FCX's activities in exploring for, developing, mining, and processing ore containing copper, gold, and silver in Indonesia. It also includes smelting and refining of copper concentrates in Spain and Indonesia.