Freeport-McMoRan. completes sale of $575,000,000 convertible notes

Copper and gold mining company Freeport-McMoRan Copper & Gold Inc. (FCX) announced Tuesday it had completed its private placement of US$575 million of 7 percent convertible senior notes due 2011. This amount represents a 15 percent increase from the previously announced $500 million as a result of the initial purchaser's exercise of the overallotment option.

James R. Moffett, Chairman and CEO, of FCX said, "The success of this $575 million offering and our recently completed $500 million senior note transaction demonstrate the confidence of the financial markets in the strength and reliability of our world class Grasberg mine in Indonesia with its long-lived, low-cost copper and gold reserves. The recent offerings strengthen our financial position and our financial flexibility. The authorization by our Board of Directors of the initiation of a cash dividend on our common stock reflects this improved position and the strong cash flow generating capacity of our business."

As previously announced, each $1,000 face value convertible note has an annual interest rate of 7 percent and is convertible into 32.39 shares of FCX common stock equivalent to a conversion price of $30.87 per share, representing a 70 percent premium over the closing price of FCX's common shares on the NYSE on February 5, 2003. The sale of the notes generated net proceeds of approximately $559 million, which will be used to repay all outstanding bank debt, for working capital requirements and general corporate purposes. FCX plans to terminate its existing bank credit facilities and replace these facilities with a new bank credit facility with less restrictive covenants.

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