Freeport completes bond sale

US based gold mining firm Freeport-McMoRan Copper & Gold Inc announced Tuesday it has completed its private placement of US$603.75 million of 8 1/4 percent convertible senior notes due January 31, 2006. This amount represents a 15 percent increase from the previously announced US$525 million as a result of the exercise of the overallotment option by the initial purchaser of the notes. The sale of the notes satisfies a condition to amend our bank credit facilities to extend the maturities to 2005.

The convertible notes have an interest rate of 8 1/4 percent per year and each $1,000 note is convertible into 69.93 shares of common stock, at the option of the holder, representing a 30 percent premium over the closing price on August 1, 2001 of Freeport's Class B common shares on the NYSE.

The sale of the notes generated net proceeds of approximately $582 million, of which approximately $140 million has been used to purchase U.S. government securities held in escrow to pay the first 6 semi-annual interest payments due during the next three years. The remaining proceeds have been used to reduce Freeport's borrowings under its existing bank credit facilities to approximately US$319 million.

As previously announced, Freeport has received commitments from its bank group to extend the maturities of its credit facilities to December 2005.

JP Morgan is agent for the lenders in Freeport's bank credit facilities.

Freeport explores for, develops, mines and processes ore containing copper, gold and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia. (*)