Freeport reports lower copper, gold sales, production

American mining giant Freeport-McMoRan Copper & Gold Inc. (FCX) said on Wednesday that sales volume in the first quarter of 2008 of copper and gold from its Papua mining, which is operated by its 90.64 percent-owned subsidiary PT Freeport Indonesia (FI), was significantly lower due to lower grade of ore processed.

FCX said in a statement that its Indonesian unit expects to sell a total of 1.2 billion pounds of copper and 1.3 million ounces of gold this year, compared with 1.1 billion pounds of copper and 2.2 million ounces of gold in 2007.

FI expects to continue mining in a relatively low-grade section of the Grasberg open pit in the second quarter of 2008 and in a higher-grade section in the second half of 2008. Approximately 64 percent of 2008 copper sales and 65 percent of 2008 gold sales are projected to occur in the second half of the year.

FI has several projects in progress across the Grasberg district, including the project to develop large-scale underground ore bodies located beneath and adjacent to the Grasberg open pit.

The expansion of the currently producing Deep Ore Zone (DOZ) mine to 50,000 metric tons of ore per day has been completed with first-quarter rates averaging 61,000 metric tons per day. A further expansion of the DOZ mine to 80,000 metric tons per day is under way with completion targeted by 2010.

Other projects include the development of the high-grade Big Gossan mine, which is expected to ramp up to full production of 7,000 metric tons per day in 2011, and the continued development of the Common Infrastructure project, which will provide access to the Grasberg underground ore body, the Kucing Liar ore body and future development of the mineralized areas below the DOZ mine.

The 2008 exploration efforts include testing extensions of the Deep Grasberg and Kucing Liar mine complexes and evaluating targets in the area between the Ertsberg East and Grasberg mineral systems from the new Common Infrastructure tunnels.

Initial drill results from the Common Infrastructure tunnel are positive and additional drilling is in process. FI continues efforts to resume exploration activities in certain prospective areas in Papua, outside Block A (the Grasberg contract area). (denny)

Consolidated Indonesian Mining Operations	First Quarter
	2008	2007
Copper (million of recoverable pounds):
Production	200	468
Sales	207	417
Average realized price per pound	$3.82	$3.09
Gold (thousands of recoverable ounces):
Production	246	1,074
Sales	251	947
Average realized price per pound	$932	$655