Freeport reports Q3 Indonesian production

The following is an excerpt on Papua project of US mining giant Freeport-McMoRan Copper & Gold Inc.'s third quarter 2009 report released on Wednesday.

Through its 90.64 percent owned and wholly consolidated subsidiary PT Freeport Indonesia (PT-FI), FCX operates the world?s largest copper and gold mine in terms of reserves at its Grasberg operations in Papua, Indonesia.

Indonesian Mining Operations	Third Quarter		Nine Months
	2009	2008	2009	2008
Copper (million of recoverable pounds):
Production	331	256	1,138	678
Sales	330	264	1,131	700
Average realized price per pound	$ 2.77	$ 2.94	$ 2.41	$ 3.33
Gold (thousands of recoverable ounces):
Production	685	264	2,033	731
Sales	683	271	2,015	757
Average realized price per ounce	$ 988	$ 870	$ 944	$ 897
?	?	?	?	?
Unit net cash (credits) costs per pound of copper:	?	?	?	?
Site production and delivery, after adjustments	$ 1.10	$ 1.76	$ 0.98	$ 1.84
Gold and silver credits	(2.10)	(0.93)	(1.74)	(1.04)
Treatment charges	0.24	0.24	0.22	0.28
Royalties	0.12	0.12	0.10	0.12
Unit net cash (credits) costs (*)	$ (0.64)	$ 1.19	$ (0.44)	$ 1.20
*. For a reconciliation of unit net cash (credits) costs per pound to production and delivery costs applicable to sales reported in FCX?s consolidated financial statements, refer to the supplemental schedule, ?Product Revenues and Production Costs,? beginning on page VII, which is available on FCX?s web site, ?www.fcx.com.?

Indonesia copper and gold sales in the third quarter of 2009 were significantly higher than in the third quarter of 2008 as a result of mining of a higher ore grade section in the Grasberg open pit, including accelerated mining of a higher grade section previously scheduled to be mined in future periods. At the Grasberg mine, the sequencing in mining areas with varying ore grades causes fluctuations in the timing of ore production, resulting in varying quarterly and annual sales of copper and gold.

FCX expects Indonesia sales of 1.4 billion pounds of copper and 2.4 million ounces of gold for the year 2009, compared with 1.1 billion pounds of copper and 1.2 million ounces of gold for 2008. Gold sales for 2009 are expected to be 100 thousand ounces higher than the July 2009 estimate because of the accelerated mining of a section of the Grasberg mine previously expected to be mined in 2010. Copper and gold sales volumes in the fourth quarter of 2009 are expected to be lower than third-quarter 2009 volumes because of mine sequencing.

PT-FI?s unit net cash (credits) costs, including gold and silver credits, averaged a net credit of $0.64 per pound of copper for the third quarter of 2009, compared with a net cost of $1.19 per pound for the third quarter of 2008. The lower unit net cash costs in the 2009 periods primarily reflected higher copper and gold volumes. Unit site production and delivery costs will vary with fluctuations in production volumes because of the primarily fixed nature of PT-FI?s cost structure.

Assuming achievement of current 2009 sales estimates, average gold prices of $1,000 per ounce for the fourth quarter of 2009 and current estimates for energy, currency exchange rates and other cost factors, FCX expects PT-FI?s average unit net cash costs per pound to approximate a net credit of $0.33 per pound for the year 2009. Fourth-quarter 2009 unit net cash costs are expected to be higher than third-quarter and year-to-date 2009 average unit net cash costs because of lower projected sales volumes. Unit net cash costs for 2009 would change by approximately $0.015 per pound for each $50 per ounce change in the average price of gold for the fourth quarter of 2009. (end of excerpt)