Freeport-McMoRan bets on new output in Papua to boost stock

The U.S. mining giant Freeport-McMoRan &Gold Inc., owner of the world's largest goldmine, is concentrating on new gold and copper discoveries in Indonesia to help boost the company's stock price, chief executive Richard Adkerson told Bloomberg on Tuesday in an interview in Noordwijk, The Netherlands.

New Orleans-based Freeport will concentrate on exploring for gold and copper in the remote highlands of papua, about 2,000 miles from Jakarta, after favorable initial prospecting in the region, Adkerson said.

"There's copper and gold in the minerals and certain prospects are purely gold. It's something the management team is very excited about it," Adkerson said.

"We've done some field work and identified some interesting prospects," he said.

Further analysis will be needed to determine specific amounts, Adkerson said. The company is betting on further mineral discoveries, as well as share buybacks and

special-dividend payouts, to boost its share price, he said.

Freeport's stock has fallen about 15 percent in the last two months.

"The shares are trading at very attractive multiple in relation to other companies because we are located in Indonesia and because it's a single asset," he said, referring to the company's Grasberg mine, the world's second-largest copper mine, located in Papua.

High commodity prices and an improvement in political risk in Indonesia have prompted the company to start exploration in the highland areas near the mine, he said.

"Indonesia as a country is undergoing significant improvements and that should help investor perceptions of our company," Adkerson said. The company has about 40 billion pounds of probable and proved copper reserves and 46 million ounces of gold.

Production in a normal year is about 1.3 billion pounds of copper and 2.2 million ounces of gold, he said.(*)