Freeport expects jump in Q2 earnings

American mining giant Freeport-McMoRan Copper & Gold Inc. said Monday that second quarter operating results of its principal mining unit, PT Freeport Indonesia (PT-FI), will reflect improved ore grades and record ore throughput rates of approximately 240,000 metric tons per day at the Grasberg mining complex.

PT-FI?s aggregate production for the second quarter of 2001 is anticipated to exceed 410 million pounds of copper and 980,000 ounces of gold.

PT-FI?s share of sales for the second quarter is expected to exceed previous estimates and is anticipated to approximate 390 million pounds of copper and 810,000 ounces of gold, approximately 110,000 ounces more than previous estimates and setting a new quarterly sales record for gold.

FCX remains the lowest cost copper producer in the world with projected unit net cash production costs, after gold credits, of approximately $0.00 per pound of copper (zero unit net cash production cost) in the second quarter of 2001 and less than $0.10 per pound average projected for the year.

FCX estimates second-quarter 2001 earnings of $0.25 per share, using $0.70 per pound of copper to record FCX?s provisionally priced second quarter sales, which remain subject to final pricing. Each $0.01 per pound change in price used for provisionally priced sales would result in an approximate $1.0 million, $0.007 per share, effect on second-quarter 2001 net income. These financial results include the approximate $0.10 per share effect from the previously reported 27-day scheduled maintenance downtime in April 2001 at FCX?s Atlantic Copper smelter unit in Spain.

FCX generated significant operating cash flow in the second quarter enabling the repayment of over $120 million of debt in the quarter, and $175 million for the first six months of 2001. For 2001, PT-FI?s share of sales is now anticipated to approximate 1.4 billion pounds of copper and 2.5 million ounces of gold, approximately 100,000 ounces more than previously estimated and an increase from 2000 of approximately 600,000 ounces of gold.

James R. Moffett, Chairman and CEO, said, ?Our strong second quarter operating and financial results highlight FCX?s ability to generate significant profits, cash flow and debt repayments, despite the currently low copper prices and nonrecurring maintenance activities at our smelter in Spain. Any future copper and gold price increases would be beneficial to FCX with our high-volume, low-cost operations. The recent weakness in our common stock trading price and the index-oriented selling associated with the reconstitution of the Russell indices is inconsistent with the strong operating and financial performance of FCX.?

FCX is scheduled to release its quarterly earnings announcement on July 18, 2001 and will hold a conference call with financial analysts to discuss the results. The conference call may be accessed through the ?fcx.com? website at 10:00 am EDT on July 18, 2001. (*)