Freeport-McMoRan cuts Q3 copper, gold sales projection

Freeport-McMoRan Copper & Gold Inc.(FCX) on Tuesday cut its third quarter sales projection from its Indonesian subsidiary PT.Freeport Indonesia (PTFI) to 340 million pounds of copper and 460,000 ounces of gold from previous estimates of 380 million pounds of copper and 575,000 ounces of gold.

The company said the reduction was caused partly by the mining of lower grade material and reduced mining rates. Production was also affected by an extension to a planned downtime for mill maintenance activities

PTFI's share of annual sales for 2005 is expected to approximate previous estimates of 1.47 billion pounds of copper and 2.8 million ounces of gold.

PTFI expects fourth quarter operations will benefit from more flexible mining set-ups and access to higher grade material, allowing PT-FI to offset the third quarter shortfall substantially.

Fourth quarter sales are expected to approximate 490 million pounds of copper and 1.14 million ounces of gold.

Richard C. Adkerson, President and Chief Executive Officer of FCX, said, "Our operations are achieving high overall mining rates as we continue to operate at full capacity in the Grasberg pit. However, we have not achieved targeted mining rates in certain high grade sections of '6 South,' resulting in reduced third quarter sales. We expect to gain access to areas where we will be able to establish more traditional mining set-ups during the fourth quarter which would provide access to higher grade material, enabling us to generate significantly higher sales in the fourth quarter.

"Realization of this significant level of projected sales during the fourth quarter depends on our achieving targeted mine rates in the high grade '6 South' pushback and on strong performance of our operating systems. In any event, these matters only impact the timing of when we access the well-defined high grade ore in the Grasberg mine and convert it to sales volumes." (alex)