Freeport reports strong Q2 results
Wednesday, July 18 2001 - 02:30 PM WIB
For the six months ended June 30, 2001, FCX reported net income of $74.3 million, $0.51 per share, compared with a net loss of $9.4 million, $0.06 per share, a year ago.
The company?s subsidiary PT Freeport Indonesia (PT-FI) which operates copper and gold mine in Irian Jaya province, recorded sales of 389.8 million pounds of copper and a record 813,600 ounces of gold during the second quarter of 2001, compared with 256.2 million pounds of copper and 330,500 ounces of gold during the second quarter of 2000.
The second-quarter 2001 sales volumes were 52 percent higher for copper and 146 percent higher for gold, than the 2000 quarter. The significantly higher volumes resulted from an 11 percent improvement in copper grade and 83 percent improvement in gold grade compared to the prior-year period and record average daily ore throughput of 240,000 metric tons per day.
Gold recoveries were also at their highest quarterly average, at 89.3 percent, compared to last year's second quarter recoveries of 84.1 percent.
PT-FI's third-quarter 2001 sales are expected to approximate 340 million pounds of copper and 590,000 ounces of gold. PT-FI expects its sales for 2001 to approximate 1.4 billion pounds of copper and 2.5 million ounces of gold, an increase of approximately 100,000 ounces of gold from previous estimates and an increase from 2000 of approximately 600,000 ounces.
The report also said that PT Smelting, PT-FI's 25 percent-owned Indonesian smelting unit in East Java, operated at 109 percent of its design capacity of 200,000 metric tons of copper per year in the second quarter of 2001.
The higher production levels in 2001 benefited PT Smelting's copper cathode cash production costs per pound which decreased to $0.12 in the 2001 quarter compared with $0.23 in the 2000 quarter. FCX recorded an operating loss of $0.4 million, a $0.6 million charge ($0.004 per share) to net income, for its equity interest in PT Smelting during the second quarter of 2001, compared with $5.9 million, a $4.7 million charge to net income ($0.03 per share) in the 2000 quarter.
Freeport also reported that second-quarter exploration efforts focused on the Ertsberg East Surface project (previously referred to as Guru Ridge), the underground Ertsberg Stockwork Zone and Grasberg Underground. Exploration drilling and a preliminary study of the Ertsberg East Surface resource during the first quarter of 2001 concluded that open-pit mining appears promising and PT-FI continues to study the feasibility of this surface mineralization target for possible near-term development.
Six drill rigs were operating from the surface and from underground locations to explore and delineate the grades and geometry of the resource. Second-quarter drilling at the Erstberg East Surface target intersected 1,477 meters of ore-grade mineralization in 13 drill holes, which is in addition to those previously announced. These intercepts average 1.65 percent copper equivalents, with grades ranging between 0.74 percent and 2.70 percent equivalent copper.
The company said reserve extension drilling continues at the Ertsberg Stockwork Zone, adjacent to Deep Ore Zone mine where underground production has recently begun.
Exploration drilling also continues at the Grasberg Underground to define the outward extent of mineralization adjacent to and below the current block cave reserve. (alex)