Q2 2024 Freeport-McMoRan Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan second quarter conference call. At this time, all participants are in a listen-only mode.

Unknown Attendee: Ladies and gentlemen, thank you for standing by. Welcome to the Freeport Mac Moran Second Quarter Conference call. At this time, all participants are in a listen-only mode.

Operator: Later, we will conduct a question and answer session. If you wish to ask a question during the Q&A session, press star 1 on your touchtone phone. If you require assistance during the conference, please press star 0. I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations. Please go ahead, sir.

Ladies and gentlemen, thank you for standing by welcome to the Freeport Mcmoran second quarter Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. If you wish to ask a question during the Q&A session Press Star one on your attached on the phone if you require assistance during the conference.

Unknown Attendee: Later, we will conduct a question in the answer session. If you wish to ask a question during the Q&A session, press star 1 on your touch-tone phone. If you require assistance during the conference, please press star 0.

Please press Star Zero I would now like to turn the conference over to Mr. David Joint Vice President Investor Relations. Please go ahead Sir.

David Joint: I would now like to turn the conference over to Mr. David Joint, by President Investor Relations. Please go ahead, sir.

David Joint: Thank you, Regina, and good morning, everyone. Welcome to the Freeport conference call. Earlier this morning, FCX reported its second quarter 2024 operating in financial results. A copy of today's release with supplemental schedules and slides is available on our website, FCX.com. Today's conference call is being broadcast live on the Internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link. In addition to analysts and investors, the financial process has been invited to listen to today's call. A replay of the webcast will be available on our website later today.

David Joint: Thank you, Regina, and good morning, everyone. Welcome to the Freeport Conference Call. Earlier this morning, FCX reported its second quarter 2024 operating and financial results. A copy of today's release with supplemental schedules and slides is available on our website, fcx.com. Today's conference call is being broadcast live on the internet. Anyone may listen to the call by accessing our website home page and clicking on the webcast link. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today.

David Joint: Thank you Regina and good morning, everyone welcome to the Freeport Conference call.

Speaker Change: Earlier this morning, <unk> reported its second quarter 2020 for operating and financial results.

Yesterday's release supplemental schedules and slide is available on our website SPX dot com.

Speaker Change: Today's conference call is being broadcast live on the Internet anyone may listen to the call by accessing our website homepage and clicking on the webcast link.

In addition to analysts and investors the financial press has been invited to listen to today's call.

A replay of the webcast will be available on our website later today.

David Joint: Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments in the call include non-GAAP measures and forward-looking statements, and actual results may differ materially. Please refer to the cautionary language in our press release and slides and to the risk factors described in our FCC filings, all of which are available on our website. Also on the call with me today are Richard Adkerson, Chairman of the Board, Kathleen Quirk, President and Chief Executive Officer, Marie Robertson, Executive Vice President and CFO, and other senior members of our management team. Richard will make a few opening remarks, Kathleen will review our slide materials, and then we will open up the call for questions. Richard?

David Joint: Before we begin our comments, we'd like to remind everyone that today's press release, in certain of our comments in the call, include non-GAAP measures in forward-looking statements, and actual results may differ materially. Please refer to the cautionary language in our press release and slides, into the risk factors described in our FCC findings. All of which are available on our website.

Speaker Change: Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward looking statements and actual results may differ materially. Please.

Speaker Change: Please refer to the cautionary language in our press release and slides into the risk factors described in our SEC filings.

All of which are available on our website.

David Joint: Also in the call with me today are Richard Atterson, Chairman of the Board, Kathleen Quart, President and Chief Executive Officer, Marie Robertson, Executive Vice President and CFO, and other senior members of our management team.

Speaker Change: Also on the call with me today are Richard Akerson, Chairman of the Board Kathleen Quirk, President and Chief Executive Officer, Murray Robertson Executive Vice President and CFO and other senior members of our management team.

Richard C. Adkerson: Richard will make a few opening remarks.

Speaker Change: Richard will make a few opening remarks, Kathleen will review our slide materials and then we will open up the call for questions Richard.

Richard C. Adkerson: Kathleen will review our slide materials, and then we will open up the call for questions.

Richard Adkerson: Richard? Thank you, David. Thank you all for joining us today. Well, we've seen quite a couple of months of all tools in the markets. I was only seeing BC right when copper hit $5 for the first time ever, and I had big smiles on my face. Now, the reality of the copper markets has shown up. I just want to say a couple of comments about it. Many of you have heard me say, for a long time, the copper move from a typical model that it had been in years past to one that's been driven more by episodic events.

Richard C. Adkerson: Thank you, David, and thank you all for joining us today. Well, we've seen quite a couple of months of volatility in the markets. I was on CNBC when copper hit $5 for the first time ever, and I had big smiles on my face. Now, the reality of the copper markets has shown up, and I just want to say a couple of comments about that.

Richard: Thank you David and thank you all for joining us today.

Richard: Well, we've seen quite a couple of months of volatility in the markets.

Speaker Change: I was on CNBC right when copper hit $5 for the first time ever and I had big smiles in my face.

Kathleen: Now the reality of the copper markets.

Speaker Change: They have shown up I, just want to say a couple of comments about it.

Speaker Change:

Richard C. Adkerson: Many of you have heard me say for a long time that copper has moved from a cyclical metal that it had been in years past to one that's been driven more by episodic events. In China, its demand has been growing recently and has set records even in the face of poor performance in certain sectors, most notably the property segment. Recently, demand has been softening in other sectors. Credit markets in China have been sluggish. The high prices led to stores de-stocking.

Speaker Change: Many of you have heard me say for a long time, the copper me from a clinical model.

Speaker Change: It had been in years past.

Speaker Change: One that's been driven more by episodic events.

Richard Adkerson: In China, its demand had been growing recently and has set records, even in the face of poor performance in certain sectors, most notably the property segment, certainly. Recently, demand has been softening in other sectors. Credit markets in China have been soft. The high prices lead to just the stocking has been a very tight concentrate market, which persists. TCs and RCs are record level levels. And that's brought a lot of scrap to the marketplace; the government incentivized scrap for a period of time. And as a result, was the stocking, the softening demand, global inventory separation, and that has triggered macro trading in commodities, particularly after the disappointment that the third plenum didn't result in a clear statement of.

Speaker Change: In China, it's demand had been growing.

Speaker Change: We recently and has set records even in the face of poor performance.

Speaker Change: Certain sectors, most notably the property segment segment.

Speaker Change: Recently demand has been softening in other sectors.

Speaker Change: Credit markets in China have been solved.

Speaker Change: High prices led to Destocking, there has been a very tight concentrate market, which persist tcs and Rcs.

Richard C. Adkerson: There's been a very tight concentrate market, which persists. TCs and RCs are at record low levels. That has brought a lot of scrap to the marketplace. The government has incentivized scrap for a period of time. And as a result, with the destocking and the softening demand, global inventories have risen, and that has triggered macro trading in commodities, particularly after the disappointment that the third plenum didn't result in a clear statement of Incentivizing the Economy in China. This simply won't last.

Speaker Change: At low levels, and that's brought a lot of scrap to the marketplace with government incentivize scrap for a period of time.

Speaker Change: And.

Speaker Change: As a result with the Destocking.

Speaker Change: The softening demand global inventories have risen.

Speaker Change: And that has triggered.

Speaker Change: Macro trading.

Speaker Change: In commodities, particularly after the disappointment.

Speaker Change: The third Millennium didn't result in a clear statement of.

Richard C. Adkerson: of incentivizing the economy in China. This simply won't last. There's limits to the stocking China will respond to its economy. There's underlying strength there, and we're very confident that this will improve over time. In fact, they've taken the first step with the recent interest rate cut. Underlying all of this is really the fundamentals of the global copper marketplace. The world is getting more and more electrified with connectivity. With dealing with carbon emissions, a challenge is there, but that's a fact that the world has to deal with. A1 and Jeff Curry recent talked about the importance of increased defense spending, and that creates another element of demand.

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Speaker Change: Of incentivizing the economy in China.

Richard C. Adkerson: There are limits to the stocking. China will respond to its economy. There's underlying strength there, and we're very confident that this will... [inaudible] improve over time. In fact, they've taken the first step with the recent interest rate cut. Underlying all of this is really the fundamentals of the global copper marketplace. The world is getting more and more electrified with connectivity, and dealing with carbon emissions, challenges there, but that's a fact that the world has to deal with.

Speaker Change: This simply won't last there's limits to destocking.

Speaker Change: China will respond to its economy.

Speaker Change: There's underlying strength there and we're very confident that this will.

Speaker Change: Yeah.

Speaker Change: Improve over time in fact that we've taken the first step with the recent interest rate cut.

Speaker Change: Underlying all of this is really the fundamentals of the global copper marketplace.

Speaker Change: The world is getting more and more electrified.

Speaker Change: With connectivity.

Speaker Change: <unk>.

Speaker Change: Uh huh.

Speaker Change: Dealing with carbon emissions challenges, there, but thats.

Speaker Change: The fact that the world has to deal with.

Richard C. Adkerson: A1, and you know, Jeff Curry recently talked about the importance of increased defense spending, and that creates another element of demand, supply changes. Supply challenges continue, and in certain cases are growing, and so as we look forward, our strategy is based on a fundamentally positive outlook about long-term copper demand and the reality of developing new supplies to meet that demand. You know, it was really something to see Copper for $5, and I'll tell you, we're going to see it again.

Jeff: One Jeff.

Jeff Currie: Jeff Currie recent talks about the <unk>.

Jeff Currie: <unk> increased defense spending and that creates another element of demand <unk>.

Richard Adkerson: Supply challenges continue, and in a certain case you're growing. And so, as we look forward, our strategy is based on a fundamentally positive outlook about long-term copper demand and the reality of developing new supplies to meet that demand. You know, it was really something to see copper at $5. And I'll tell you, we're going to see it again.

Jeff Currie: Supply changes.

Jeff Currie: Supply challenges continue.

Jeff Currie: Certain case are growing.

So as we look forward our strategy is based on.

Jeff Currie: <unk> fundamentally positive outlook about long term copper demand and the reality of developing new supplies to meet that demand.

Jeff Currie: It was really something to see copper at $5.

Jeff Currie: I'll tell you we're going to see it again.

Richard C. Adkerson: I want to make one quick comment to recognize our team for the great work we've done in reaching the commissioning of our new smelter in Indonesia. This was a major project, the world's largest single-line smelter. Construction is essentially complete, and we posted a new video on our website last evening. I encourage you all to watch it just to see the size and scale of this new world-class facility. It's really something to visit it and see just the extent of the facility.

Richard Adkerson: I want to make one quick comment to recognize our team for the great work we've done in reaching the commission of our new smelter in Indonesia. This was a major project. The world of largest single-line smelter construction is essentially complete. We posted a new video on our website last evening. I encourage you all to watch it just to see the size and scale of this new world-class facility. It's really something to visit it and see just the extent of the facility. This was a key commitment we made to the government of Indonesia in 2018 when we resolved to reach a global resolution of the issues that had been under discussion for so many years.

Speaker Change: I want to make one quick comment to recognize our team for the great work, we've done in reaching the commissioning of our new smelter in Indonesia.

Speaker Change: This was a major project.

Speaker Change: The world's largest single lines smelter.

Speaker Change: Struction is.

Speaker Change: <unk> is essentially complete we posted a new video on our website last evening I encourage you all to want you to just to see that.

Speaker Change: And scale of this new World class facility.

Speaker Change: Really something to visit it and see.

Speaker Change: The extent of the facility. This was a key commitment we made to the government of Indonesia in 2018.

Richard C. Adkerson: This was a key commitment we made to the government of Indonesia in 2018 when we resolved to reach a global resolution of the issues that have been under discussion for so many years. It's of strategic importance for our business interests in Indonesia for the long term. By becoming a fully integrated producer there with our mining operations, PTFI will now be able to apply for an extension of its operations for the long term, which will really enhance the benefits of all stakeholders, the government, the people of POPLA, our employees, Freeport, and all shareholders, and our partner Mind ID, the state-owned company.

Speaker Change: Our resolve to reach a global resolution of the issues that had been under discussion for so many years.

Richard Adkerson: It's a strategic importance for our business interests in Indonesia for the long term by becoming fully integrated producer there with our mining operations. PTFI will now be able to apply for extension of its operations for the long term, which will really enhance the benefits of all stakeholders. The government, the people of Phopla are employees, freeport, and all shareholders. And our partner mind-added state-owned company. Project has been in work for several years. In a world that was challenged during this period of time by COVID and inflationary factors that have been evident in so many projects around our copper industry.

Speaker Change: <unk> is of strategic importance for our.

Speaker Change: Business interest in Indonesia for the long term.

Speaker Change: Becoming a fully integrated.

Speaker Change: Producer there with our mining operations.

Speaker Change: <unk> will now be able to apply for extension.

Speaker Change: Its operations for the long term.

Speaker Change: It will really enhance the benefits of all stakeholders the government the people of Papua our employees Freeport and all shareholders.

Speaker Change: And our partner Mylan State owned company.

Richard C. Adkerson: The project has been in the works for several years in a world that was challenged during this period of time by COVID and inflationary factors that have been evident in so many projects around our copper industry. It's really an accomplishment by our team to bring this in on time and with reasonable budget spending on it. It's quite a facility. Take a look at the video.

Speaker Change: Project has been in works for several years.

Speaker Change: World that was challenged during this period of time by Covid and inflationary.

Speaker Change: Factors that have been evident in so many projects around our copper industry, it's really accomplishment by our team to bring this in.

Richard Adkerson: It's really an accomplishment by our team to bring this in. The whole time with reasonable budget spending on it. It's quite a facility. Take a look at the video. We are looking forward to. Getting our station and then developing our plans to maximize the value of this resource over its life and not have any time limit of twenty forty one facing, and so we're really encouraged by, and again our team just did a tremendous job there.

Speaker Change: On time in.

Speaker Change: With reasonable budget spending on it.

Speaker Change: It's quite a facility take a look at the video.

Richard C. Adkerson: We are looking forward to... Getting our extension and then developing our plans to maximize the value of this resource over its life and not have any time limit of 2041 facing us. So we're really encouraged by it, and again, our team just did a tremendous job there. Kathleen, I'll turn it over to you.

Speaker Change: We are looking forward to.

Speaker Change: Getting our extension and then developing our plans to maximize the value of this resource over its life.

Speaker Change: And not have any time limit of 2041 facing in it. So we're really encouraged by it.

Speaker Change: <unk>.

Speaker Change: And.

Again, our team just did a tremendous job there.

Kathleen Lynne Quirk: Definitely, and I'll turn it over to you. Okay, thank you, Richard, and I'm going to start on slide three with the information reflecting the results of our second quarter in the first half of twenty twenty-four. Our team continues to focus on what matters in driving the value in our business, focused on executing our plans reliably and responsibly, and enhancing efficiencies, managing cost aggressively, and building optionality and value in our organic growth portfolio. During the second quarter, we generated strong margins and cash flows with two point seven billion dollars in EBITDA and two billion dollars in operating cash flows.

Speaker Change: Kathleen I'll turn it over to you.

Kathleen Lynne Quirk: Okay, thank you, Richard. And I'm going to start on slide three, with information reflecting the results of our second quarter and first half of 2024. Our team continues to focus on what matters in driving value in our business, focusing on executing our plans reliably and responsibly, enhancing efficiencies, managing costs aggressively, and building optionality and value in our organic growth portfolio. During the second quarter, we generated strong margins and cash flows with $2.7 billion in EBITDA and $2 billion in operating cash flows.

Kathleen: Okay. Thank you Richard and I'm going to start.

Kathleen: On slide three with the information, reflecting the results of our second quarter and first half of 2024.

Speaker Change: Our team continues to focus on what matters and driving value in our business.

Kathleen: Focused on executing our plans reliably and responsibly enhancing efficiencies managing cost aggressively and building optionality and value and our organic growth portfolio.

Kathleen: During the second quarter, we generated strong margins and cash flows with $2 $7 billion in EBITDA and $2 billion in operating cash flows.

Kathleen Lynne Quirk: Our production volumes were largely in line with our estimates going into the period, but as we reported in early July, our shipments of copper and gold were impacted in June as a result of obtaining our export license in Indonesia, which has now been secured. I want to highlight two important items of significance and momentum for the future. The first site on which we talked about it is the Indonesian smelter project advancing to the commissioning phase.

Kathleen Lynne Quirk: Our production volumes were largely in line with our estimates going into the period, but as we reported in early July, our shipments of copper and gold were impacted in June as a result of obtaining our export license in Indonesia, which has now been secured.

Kathleen: Production volumes were largely in line with our estimates going into the period.

Kathleen: As we reported in early July our shipments of copper and gold were impacted in June as a result of obtaining our export license in Indonesia, which has now been secured.

Kathleen Quirk: I want to highlight two important items of significance in momentum for the future. The first side on which we talked about it, it's the Indonesian Smelter Project advancing to the commissioning phase. As Richard discussed, our team has managed this large and complex project and an exemplary matter, and we're now focused on further derisking through a successful start-up in the months ahead. Solid project execution is a hallmark of our free 14, who stepped up once again to deliver in a challenging environment for major capital projects. The successful completion of this strategic investment is of significance and positions us to secure a long-term extension of our operating rights in Indonesia.

Kathleen: I want to highlight two important items of significance in momentum for the future.

Kathleen: The first side on what you talked about it it's the Indonesian smelter project advancing to the commissioning phase.

Kathleen Lynne Quirk: As Richard discussed, our team has managed this large and complex project in an exemplary manner, and we're now focused on further de-risking through a successful startup in the months ahead. Solid project execution is a hallmark of our Freeport team, who stepped up once again to deliver in a challenging environment for major capital projects.

Kathleen: As Richard discussed our team has managed this large and complex project. An example, exemplary manner.

Kathleen: And we're now focused on further de risking through a successful startup in the months ahead.

Speaker Change: Solid project execution is a hallmark of our Freeport team, who stepped up once again to deliver in a challenging environment for major capital projects to.

Kathleen Lynne Quirk: The successful completion of this strategic investment is significant and positions us to secure a long-term extension of our operating rights in Indonesia. The second value driver I want to highlight is the ongoing momentum in our innovative leach project to build additional scale and low-cost incremental production. Continued scaling of this initiative is a major value driver and a differentiator for Freeport.

Speaker Change: The successful completion of this strategic investment is of significance and positions us to secure a long term extension of our operating rights in Indonesia.

Kathleen Quirk: The second value driver I want to highlight is the ongoing momentum and our innovative leach project to build additional scale and low-cost incremental production. Continue scaling this initiative is a major value driver and a differentiator for Free Port. As you'll see, our second quarter in first half incremental production from this initiative doubled from the comparable periods in 2023. As we set our sights on scaling this initiative further, we see the opportunity to lower our unit costs in the US meaningfully. We continue to execute our established yearholder return framework with half a billion dollars and dividends and share purchases here today.

Speaker Change: The second value driver I want to highlight is the ongoing momentum in our innovative leach project to build additional scale and low cost incremental production.

Speaker Change: <unk> scaling of this initiative as a major value driver and a differentiator for Freeport.

Kathleen Lynne Quirk: As you'll see, our second quarter and first half incremental production from this initiative doubled from the comparable periods in 2023. As we set our sights on scaling this initiative further, we see the opportunity to lower our unit costs in the U.S., meaning We continue to execute our established shareholder return framework with half a billion dollars in dividends and share purchases year to date. We ended the quarter in a strong position financially, with a favorable future outlook as we head into the second half of this year.

Speaker Change: As Youll see our second quarter and first half incremental production from this initiative.

Speaker Change: Both from the comparable periods in 2023.

Speaker Change: As we set our sights on scaling this initiative further we see the opportunity to lower our unit costs in the U S meaningfully weak.

Speaker Change: We continue to execute our established shareholder return framework with a half a billion dollars in dividends and share purchases year to date we.

Kathleen Quirk: We ended the quarter in a strong position financially, with a favorable future outlook as we head into the second half of this year.

Speaker Change: We ended the quarter in a strong position financially with a favorable future outlook as we head into the second half of this year.

Kathleen Lynne Quirk: Turning to copper markets on slide 4, Richard talked about this; copper prices traded in a broad range between $367 per pound and $492 per pound on the LME exchange and a wider range on the U.S. COMEX exchange during 2024.

Kathleen Lynne Quirk: Turning to copper markets on slide four, which we talked about this, copper prices traded in a broad range between 367 per pound and 492 per pound on the LME exchange and a wider range on the US COMEX exchange. That's been during 2024. We've discussed on prior calls the impact of macro sentiment and investor positioning that can drive large moves in price. Richard referred to the domestic economic challenges in China, the ongoing weakness in the Chinese property market, the stocking and working capital management, and increase in copper exchange inventory in delays and actions to simulate economic growth, which have all weighed on the market.

Speaker Change: Turning to copper markets on slide four which you just talked about this copper prices traded in a broad range.

Speaker Change: Between $3 67 per pound and $4 92 per pound on the <unk> exchange and a wider range on the U S Comex exchange.

Kathleen Lynne Quirk: We've discussed on prior calls the impact of macro sentiment and investor positioning that can drive large moves in price. Richard referred to the domestic economic challenges in China, the ongoing weakness in the Chinese property market, destocking and working capital management, an increase in copper exchange inventories, and delays in actions to simulate economic growth, which have all weighed on the market. In the U.S., we're continuing to see strong demand for copper from a broad range of sectors, and globally, we see favorable demand drivers for the future associated with copper's increasingly important role in the global economy.

Speaker Change: That's that's been during 2024, we've discussed on prior calls the impact of macro sentiment and investor positioning that can drive large moves in pricing.

But as you referred to the domestic economic challenges in China, the ongoing weakness in the Chinese property market.

Speaker Change: Talking and working capital management and increase in copper exchange inventories and delays in actions to stimulate economic growth, which have all weighed on the market.

Kathleen Quirk: In the US, we're seeing continuing to see strong demand for copper from a broad range of sectors, and globally, we see favorable demand drivers for the future associated with copper's increasingly important role in the global economy. Copper is a foundational essential metal when it comes to electrification, and the world is becoming more and more focused on copper-intensive energy applications. The facts are its physical characteristics and superior conductivity make it the metal of electrification. New massive investment in the power grid, renewable generation, technology infrastructure, and transportation, the driving increase demand for copper, and forecasts call for a bug trend growth and demand for the foreseeable future.

Speaker Change: In the U S. We're seeing continuing to see strong demand for copper from a broad range of sectors and globally, we see favorable demand drivers for the future associated with koppers increasingly important role in the global economy.

Kathleen Lynne Quirk: Copper is a foundational, essential metal when it comes to electrification, and the world is becoming more and more focused on copper-intensive energy applications. The fact is, its physical characteristics and superior conductivity make it the metal of electrification. New massive investment in the power grid, renewable generation, technology infrastructure, and transportation is driving increased demand for copper, and forecasts call for above-trend growth and demand for the foreseeable future as we review the fundamentals and match the demand side with supply.

Speaker Change: Copper is a foundational essential metal when it comes to electrification and the world is becoming more and more focused on copper intensive energy applications.

Speaker Change: The facts are its physical characteristics and superior conductivity make it the metal of electrification.

Speaker Change: New massive investment in the power grid renewable generation technology infrastructure and transportation are driving increased demand for copper and forecasts call for above trend growth in demand for the foreseeable future.

Kathleen Quirk: As we review the fundamentals and match the demand side up with supply, we look at the limitations of existing supply growth, the challenges, and extended timeframes required to build new supplies and projections for peak mind supply over the next couple of years. These factors combined with secular demand trends point to tight market conditions as we go forward. With free-ports leading positions, in the industry large-scale current operations and future growth pipeline, we're very well positioned to benefit from this fundamental outlook in the future.

Speaker Change: As we review the fundamentals and match the demand side up with supply.

Kathleen Lynne Quirk: We look at the limitations of existing supply growth, the challenges and extended timeframes required to build new supplies, and projections for peak mine supply over the next couple of years. These factors, combined with secular demand trends, point to tight market conditions as we go forward.

Speaker Change: We look at the limitations of existing supply growth the challenges and extended timeframes required to build new supplies and projections for peak mine supply over the next couple of years. These.

Speaker Change: These factors combined with secular demand trends point to tight market conditions as we go forward.

Kathleen Lynne Quirk: With Freeport's leading position in the industry, large-scale current operations, and future growth pipeline, we're very well positioned to benefit from this fundamental outlook in the future. Turning to our operations, on slide five, we summarize the quarterly operating results by geographic region. In the U.S., we continue to focus our efforts on mitigating the impact of lower ore grade phases currently being mined. You'll see in the operational details provided in our press release that the ore grades processed through our mill and leach facilities in the U.S. had more than a 10% decrease in ore grades compared to the year ago period. All else being equal, this results in higher costs on a per-unit basis.

Speaker Change: With freeport's leading position.

Speaker Change: The industry large scale current operations and future growth pipeline, we're very well positioned to benefit from this fundamental outlook in the future.

Kathleen Quirk: Turning to our operations on slide five, we summarize the quarterly operating results by geographic region. In the U.S., we continue to focus our efforts on mitigating the impact of lower-war grade phases currently being mined. You'll see in our operational details provided in our press release that the oil grades process were a mill and leach facilities in the U.S. had more than a 10% decrease in oil grades compared to the year-ago period. All else being equal, this results in higher costs on a per unit basis. We're very focused on mitigating these impacts, and to mitigate it, we're focused on initiatives to improve productivity, equipment reliability, take advantage of automation and new technologies, and importantly, add low-cost incremental volumes for innovative leach initiative.

Speaker Change: Turning to our operations on slide five we summarize the quarterly operating results by geographic region.

Speaker Change: In the U S. We continue to focus our efforts on mitigating the impact of lower ore grade phases currently being mined.

Speaker Change: You'll see in our operational details provided in our press release at the ore grades processed through our mill and leach facilities in the U S had more than a 10% decrease in ore grades compared to the year ago period.

Else being equal this results in higher costs on a per unit basis.

Kathleen Lynne Quirk: We're very focused on mitigating these impacts, and to mitigate them, we're focused on initiatives to improve productivity, equipment reliability, take advantage of automation and new technologies, and importantly, add low-cost, incremental volumes for innovative leach initiatives. And we think this can have an impact as we go forward. In South America, our team and our large-scale Cereverde operation posted a solid second quarter. As you can see, the mill throughput exceeded 425,000 tons of ore per day.

Speaker Change: We're very focused on mitigating these impacts into mitigated we're focused on initiatives to improve productivity equipment reliability take advantage of automation and new technologies, and importantly add low cost incremental volumes through our innovative Leach initiative and we think this can have an impact as we go forward.

Kathleen Lynne Quirk: And we think this can have an impact as we go forward.

Kathleen Lynne Quirk: In South America, our team, our large-scale, servitori operation posted a solid second quarter. You can see the mill throughput exceeded 425,000 tons of water per day. This is a strong recovery from the first quarter, with higher throughput and recoveries contributed to higher copper and libid imbalance. You had to net cash cost, improve sequentially from the first quarter in South America, even after giving effect to a 22 cents per pound, non-recurring charge for the new labor agreement reached during the quarter. In Indonesia, despite delays and shipping during the month of June, the results were strong, and you'll see a net unit cash cost of 21 cents per pound.

Speaker Change: South America, our team and our large scale Cerro Verde operation posted a solid second quarter, you can see the mill throughput exceeded 425000.

Speaker Change: Tons of ore per day. This is a strong recovery from the first quarter with higher throughput and recoveries contributed to higher copper and molybdenum volumes.

Kathleen Lynne Quirk: This is a strong recovery from the first quarter, with higher throughput and recoveries contributing to higher copper and molybdenum volume. Our unit net cash costs improved sequentially from the first quarter in South America, even after giving effect to a 22 cents per pound non-recurring charge for the new labor agreement reached during the quarter. In Indonesia, despite delays in shipping during the month of June, the results were strong, and you'll see a net unit cash credit of 21 cents per pound. Our quarterly mill rates were lower than what we achieved in the first quarter as we advanced maintenance in June to manage inventory during the shipping delay.

Our U S net cash costs improved sequentially from the first quarter in South America.

Speaker Change: Even after giving effect to a 22 cents per pound nonrecurring charge for a new labor agreement reached during the quarter.

Speaker Change: And Indonesia, despite delays in shipping during the month of June the results were strong and you'll see our net unit cash <unk> of.

Speaker Change: 21 cents per pound.

Kathleen Lynne Quirk: Our quarterly mill rates for lower than what we achieved in the first quarter as we advanced maintenance and June to manage inventory during the shipping delays.

Speaker Change: Our quarterly mill rates for lower than what we achieved in the first quarter as we advanced maintenance in June to manage inventory during the shipping delays.

Kathleen Quirk: We also announced previously a change in mind sequencing that will affect goal volumes for the year. During the second quarter, we modified our mine plans for 2024 to address some disruption from certain wet draw points in the Glassberg block cave. We're currently maintaining our mining rates, but have shifted to areas with slightly lower gold rates as we implement operating solutions to regain access to the higher grade material. This is a timing matter and not a significant issue for long-term plans.

Kathleen Lynne Quirk: We also announced previously a change in mine sequencing that will affect gold volumes for the year. During the second quarter, we modified our mine plans for 2024 to address some disruption from certain wet draw points in the Grasberg blockade. We're currently maintaining our mining rates but have shifted to areas with slightly lower gold grades as we implement operating solutions to regain access to the higher-grade material. This is a timing matter and not a significant issue for our long-term plan.

Speaker Change: We also announced previously a change in mine sequencing that will affect gold volumes for the year.

Speaker Change: During the second quarter, we modified our mine plans for 2024 to address some district disruption from certain wet draw points in the Grasberg block cave.

Speaker Change: Currently maintaining our mining rates, but have shifted to areas with slightly lower gold grades as we implement operating solutions to regain access to the higher grade material. This is a timing matter and not a significant issue for our long term plans.

Kathleen Lynne Quirk: Warren talks more about our innovative leaching initiative, and we've got some information on slide six. We're continuing to build momentum with this initiative. Given the low incremental cost and low capital intensity associated with these activities, which essentially involve recovering incremental copper from material that has already been mined, the returns and value proposition of this opportunity are significant, the major catalyst for us. You can see the significant growth and incremental volumes from these initiatives of the last several quarters. As a refresher, we have achieved our initial targeted run rate of 200 million pounds of copper per annum and now have our sights on scaling this to 400 million pounds per annum in the next couple of years.

Kathleen Lynne Quirk: I want to talk some more about our Innovated Leach Initiative, and we've got some information on slide 6. We're continuing to build momentum with this initiative. Given the low incremental cost and low capital intensity associated with these activities, which essentially involve recovering incremental copper from material that has already been mined, the returns and value proposition of this opportunity are significant and a major catalyst. You can see the significant growth in incremental volumes from these initiatives over the last several quarters.

Speaker Change: I want to talk some more about our innovated Leach initiative and we've got some information on on slide six we're continuing to build momentum with this initiative.

Given the low incremental cost and low capital intensity associated with these activities, which essentially involve recovering incremental copper for material.

Speaker Change: Already been mine.

Speaker Change: The returns and value proposition of this opportunity a significant and a major catalyst for us.

Speaker Change: You can see the significant growth and incremental volumes from these initiatives over the last several quarters.

Kathleen Lynne Quirk: As a refresher, we have achieved our initial targeted run rate of 200 million pounds of copper per annum and now have our sights on scaling this to 400 million pounds per annum in the next couple of years. Ultimately, our goal is to achieve 800 million pounds per annum from this exciting initiative. This is the size of a major new mine with low capital investment required and low incremental operating costs, which will greatly enhance the value and competitive position of America's production.

Speaker Change: As a refresher we have achieved our initial targeted run rate of 200 million pounds of copper per annum.

Speaker Change: And now have our sights on scaling this to 400 million pounds per annum in the next couple of years.

Kathleen Quirk: Ultimately, our goal is to achieve 800 million pounds per annum from this exciting initiative. This is the size of a major new mine with low capital investment required and low incremental operating costs, which will greatly enhance the value and competitive position of our America's production.

Speaker Change: Ultimately our goal is to achieve 800 million pounds per annum from this exciting initiative. This is the size of a major new mine with low capital investment required and low incremental operating costs, which will greatly enhance the value and competitive position of our Americas production.

Kathleen Quirk: I wanted to go over how we're doing this. The results of date have been achieved by enhancing heat retention in the leach stockpiles, by using data from sensors and analytics which help us identify where the opportunities are located within these massive stockpiles and deploying new operational tactics to bring our catalyst solution to areas that were previously inaccessible. We're now building on these successful initiatives and have a high degree of confidence in boosting the run rate to 300 to 400 million pounds during 2026. Some examples of new initiatives include expanding our surface area under leach by using drone technology and helicopters to install eurgations in areas previously inaccessible under conventional techniques and scaling our solution injection wells.

Kathleen Lynne Quirk: I wanted to go over how we're doing this. The results to date have been achieved by enhancing heat retention in the leach stockpiles, by using data from sensors and analytics which help us identify where the opportunities are located within these massive stockpiles, and by deploying new operational tactics to bring our catalyst solution to areas that were previously inaccessible. We're now building on these successful initiatives and have a high degree of confidence in boosting the run rate to 300 to 400 million pounds during 2026. Some examples of new initiatives include expanding our surface area under leach by using drone technology and helicopters to install irrigation in areas previously inaccessible under conventional techniques.

Speaker Change: I wanted to go over how we're doing this the results to date have been achieved by enhancing heat retention and the leach stockpiles by using data from sensors analytics, which help us identify where the opportunities are located within these massive stockpiles and deploying new operational tactics to bring our catalyst solution.

To areas that were previously inaccessible.

Speaker Change: We're now building on these successful initiatives and have a high degree of confidence in boosting our run rate to 300 to 400 million pounds.

Speaker Change: During 2026.

Speaker Change: Some examples of new initiatives include expanding our surface area under leach by using drone technology in helicopters to install irrigation in an area and areas previously inaccessible under conventional techniques and scaling our solution injection wells.

Kathleen Lynne Quirk: Scaling Our Solution Through this experience, we're drilling more efficiently, getting more injection wells placed, and are testing techniques to expand the impact of injection wells over broader areas. In parallel, we're working on innovation-driven initiatives, which would really move the needle to our ultimate objective of reaching 800 million pounds per annum. These include adding direct heat to the stockpiles from renewable or other sources, taking advantage of pyrite-hosted ore to generate additional heat, and testing new additives that we've been developing.

Kathleen Lynne Quirk: With this experience, we're drawing more efficiently, getting more injection wells placed, and are testing techniques to expand the impact of injection wells over broader areas. In parallel, we're working on innovation-driven initiatives which would really move the needle to our ultimate objective of reaching 800 million pounds per annum. These include adding direct heat to the stockpiles from renewable or other sources, taking advantage of PyRide hosted order to generate additional heat and testing new additives that we've at Freeport. Really well positioned to capture this value with an extensive inventory of substantial residual copper from material already mined, industry leading technical expertise in leaching technology, and a strong multi-discipline and focus innovation team dedicated to this initiative.

Speaker Change: With his experience for drawing more efficiently getting more injection wells placed in our testing techniques to expand the impact of injection wells over broader areas.

Speaker Change: In parallel we're working on innovation, driven initiatives, which would really move the needle to our ultimate objective of reaching 800 million pounds per annum.

Speaker Change: These include adding direct heat to the stockpiles from renewable or other sources.

Speaker Change: Taking advantage of pyrite hosted or to generate additional heat and testing new additives that we've been developing.

Kathleen Lynne Quirk: At Freeport, we're really well positioned to capture this value with an extensive inventory of substantial residual copper from material already mined, industry-leading technical expertise in leaching technology, and a strong, multidisciplined, and focused innovation team dedicated to this initiative. Turning to our other areas of growth in the project pipeline on slide 7, we discussed earlier the extended time frames required for the industry to develop new supplies. At Freeport, we have the advantage of leveraging existing infrastructure to develop new supplies and have a series of projects we are advancing.

Freeport: At Freeport, we're really well positioned to capture this value with an extensive inventory of substantial residual copper from material already mined industry, leading technical expertise and leaching technology and a strong multi discipline and focused innovation team dedicated to this initiative.

Kathleen Quirk: Turning to our other areas of growth of project pipeline on slide seven, we discussed earlier the extended timeframes required for the industry to develop new supplies. At Freeport, we have the advantage of leveraging existing infrastructure to develop new supplies, and have a series of projects we are advancing. Our leaching initiative is our best opportunity to grow in the near term, and we're pursuing this aggressively, as we talked about. But beyond that, in the US, we have a brownfield expansion on our Baghdad mine in Arizona, where we have an extensive reserve position. We've already reported with completed our studies; we're now advancing investments in automation, tailings, and energy infrastructure, and expanded employee housing in this remote location to position us to execute the project more efficiently when the time is right.

Freeport: Turning to our other areas of growth of our project pipeline on slide seven we discussed earlier the extended time frames required for the industry to develop new supplies at Freeport, we have the advantage of leveraging existing infrastructure to develop new supplies and have a series of projects.

Freeport: We are advancing.

Kathleen Lynne Quirk: Our LEACH initiative is our best opportunity to grow in the near term, and we're pursuing this aggressively, as we talked about. But beyond that, in the U.S., we have a brownfield expansion at our Baghdad mine in Arizona, where we have an extensive reserve position. We've already reported, we've completed our studies, and we're now advancing investments in automation, tailings, and energy infrastructure and expanded employee housing in this remote location to position us to execute the project more efficiently when the time is right.

Our wage initiative as our best opportunity to grow in the near term and we're pursuing this aggressively as we talked about but beyond that in the U S. We have a brownfield expansion at our Bagdad mine in Arizona, where we have an extensive reserve position we've already reported.

<unk> with completed our studies, we're now advancing investments in automation.

Freeport: Aliens and energy infrastructure and expanded employee housing in this remote location to position us to execute the project more efficiently when the time is right.

Kathleen Lynne Quirk: This project, unlike other things that you see around the industry, does not have major permitting hurdles, and it represents a straightforward option. We're monitoring conditions and progress with our de-risking initiatives and expect to be in a position to make a decision on our investment next year. We've also commenced pre-feasibility studies to define a brownfield expansion in the Lone Star-Safford District.

Kathleen Quirk: This project, unlike other things that you see around the industry, does not have major permitting hurdles, and it represents a straightforward option. We're monitoring conditions and progress with our de-risking initiative, and expect to be in a position to make a decision on our investment next year.

Freeport: This project unlike others. The other things that you see around the industry. It does not have major permitting hurdles and it represents a straight a straightforward option were monitoring conditions and progress with our derisking initiatives.

Freeport: <unk> to be in a position to make a decision on our investment next year.

Kathleen Quirk: We've also commenced pre-feasibility studies to define a brownfield expansion in the loans for our suffered district. Most of you know this is our newest operation in the US, and we're really just getting started here. We have our sights on more than doubling current production levels in the 300 million pounds for animal range. This is an enormous resource, and we expect this district will become a generational cornerstone asset for Freeport in Arizona in the next decade.

Freeport: We've also commenced pre feasibility studies to define a brownfield expansion and the Lone Star Safford District.

Kathleen Lynne Quirk: Most of you know this is our newest operation in the U.S., and we're really just getting started here. We have our sights on more than doubling current production levels in the 300 million pounds per annum range. This is an enormous resource, and we expect this district will become a generational cornerstone asset for Freeport and Arizona in the next decade. At Alhambra in Chile, where we are in partnership with Codelco, we have completed pre-feasibility studies, and we're now preparing an environmental impact statement expected to be completed by the end of next year.

Freeport: Most of you know this is our newest operation in the U S and we're really just getting started here we have our sights on on more than doubling current production levels in the 300 million pounds per annum range. This is an enormous resource and we expect this district will become a generational cornerstone asset for Freeport now.

Freeport: Arizona in the next decade.

Kathleen Quirk: At Alabra and Chile, where we are in partnership with Cadelto, we have completed pre-feasibility studies, and we're now preparing an environmental impact statement expected to be completed by the end of next year. The project involves that we're considering involves an investment in a new concentrator of scale, similar to the size of the care of already concentrated, we installed nearly 10 years ago, investments in desalinization and a pipeline system to support our water requirements. The preliminary estimate for incremental capital costs for the new concentrator project and related infrastructure, which continue to be reviewed, is approximately 7.5 billion and would provide 750 million pounds of annual copper production and 9 million pounds of malignant operandum over a very long life.

Freeport: At El Abra in Chile, where we are in partnership with Codelco, We've completed pre feasibility studies and we're now preparing an environmental impact statement expected to be completed by the end of next year.

Kathleen Lynne Quirk: The project that we're considering involves an investment in a new concentrator of scale similar to the size of the Cerro Verde concentrator we installed nearly 10 years ago, investments in desalination, and a pipeline system to support our water requirements. The preliminary estimate for incremental capital costs for the new concentrator project and related infrastructure, which continue to be reviewed, approximates $7.5 billion and would provide 750 million pounds of annual copper production and 9 million pounds of molybdenum per annum over a very long life. This project would require about 7 to 8 years of lead time because of regulatory requirements.

Freeport: The project involves that we're considering involves an investment in a new console trader of scale similar to the size of the Cerro Verde constants trader, we installed nearly 10 years ago investments in desalinization, and our pipeline system to support our water requirements.

Freeport: The preliminary estimate for incremental capital costs for the new concentrator project and related infrastructure, which continue to be reviewed approximate $7 5 billion and dollars and will provide 750 million pounds of annual copper production and 9 million pounds of molybdenum per annum over a very long life.

Kathleen Quirk: This project would require about 7 to 8 years of lead time because of permitting requirements, but we're advancing, so we have optionality, and we're going to continue to review the economics and the context of market conditions, but believe this is a project that will require, in the future, to support long-term copper demand.

Freeport: This project would require about seven to eight years of lead time because of permitting requirements.

Kathleen Lynne Quirk: But we're advancing, so we have optionality, and we're going to continue to review the economics and the context of market conditions but believe this is a project that will be required in the future to support long-term copper demand. In Indonesia, we're making great progress on our large-scale Kuching-Lyar development, scheduled to commence production prior to 2030. We're also conducting additional exploration below our deep MLZ ore body and expect an extension of our operating rights beyond 2041 will set up additional long-term exploration and development options in this highly attractive district.

Freeport: But we're advancing a so we have optionality and we're going to continue to review the economics in the context of market condition, but believe this is a project that were required in the future to support long term copper demand trends.

Kathleen Quirk: Trance. And Indonesia, we're making great progress on our large scale Putin, the art development, scheduled to commence production prior to 2030. We're also conducting additional exploration below our deep MLZ Urbadi and expect an extension of our operating rights beyond 2041. We'll set up for additional long-term exploration and development options in this highly attractive district. We're advancing all these initiatives to build optionality for growth, and we'll continue to be disciplined in our approach, targeting opportunities that can be executed efficiently, profitably, and valued enhancing.

Freeport: In Indonesia, we're making great progress on a large scale cuccinelli our development.

Freeport: As scheduled to commence production prior to 2030.

Freeport: We're also conducting additional exploration below our deep MLG ore body and expect an extension of our operating rights beyond 2041 will set up for additional long term exploration and development option in this highly attractive district.

Kathleen Lynne Quirk: We're advancing all these initiatives to build optionality for growth and will continue to be disciplined in our approach, targeting opportunities that can be executed efficiently, profitably, and value-enhancing. Richard talked about the PTFI extension beyond 2041 and the key role that the smelter plays in that process. We've reviewed in the past our discussions with the Indonesian government to extend our rights to provide continuity of the significant benefits of this operation to the people of Papua and the Republic of Indonesia. During the second quarter, the government enacted a regulation applicable to a broad range of license holders in Indonesia.

Freeport: We're advancing all of these initiatives to build optionality for growth and will continue to be disappointed in our approach targeting opportunities that can be executed efficiently profitably and value enhancing.

Kathleen Lynne Quirk: Richard talked about the PTFI extension beyond 2041 and the key role that the Smelter plays in that process. We've reviewed in the past our discussions with the Indonesian government to extend our rights to provide continuity of the significant benefits of this operation to the people of Papua and the Republic of Indonesia. During the second quarter, the government enacted a regulation applicable to a broad range of licensed holders in Indonesia. We've highlighted the applicable provisions for IUPK license holders, such as PTFI. And these are the requirements for the conditions which need to be met for approval for an extension.

Freeport: Richard talked about the P. T F I extension beyond 2041, and the key role that the smelter plays in that.

Richard: Process, we've reviewed in the past our discussions with the Indonesian government to extend our rights to provide continuity of the significant benefit benefits of this operation to the people of Papua and Republic of Indonesia.

Richard: During the second quarter, the government enacted a regulation applicable to a broad range of license holders in Indonesia.

Kathleen Lynne Quirk: We've highlighted the applicable provisions for IUPK license holders such as PTFI, and these are the requirements for the conditions that need to be met for approval for an extension. These conditions are in line with our expectations, and we're in the process of completing an application to be in a position to file the application during 2024. The previous requirement for extensions could only be requested five years before expiry.

Richard: We've highlighted the applicable provisions for Aida PK license holders such as P. T F I.

Richard: And these are the requirements for the conditions, which need to be met to them for approval for an extension.

Kathleen Quirk: These conditions are in line with our expectations, and when the process of completing an application to be in a position to file the application during 2024. The previous requirement for extensions could only be requested five years before expiry, so these new regulations allow us to apply now, reflecting the government's recognition of the long lead times required for investment. This is a really positive development for PTFI and stakeholders.

Richard: These conditions are in line with our expectations and win in the <unk>.

Richard: Ross as of of completing an application to be in a position to to file the application.

Richard: In 2024.

Richard: The previous requirement for extensions could only be requested five years before expiry. So these new regulations allow allow us to apply now reflecting the government's recognition of the long lead times required for investment is.

Kathleen Lynne Quirk: So these new regulations allow us to apply now, reflecting the government's recognition of the long lead times required for investments. It's a really positive development for PTFI and its stakeholders. We look forward to making our application and being in a position to extend our rights so that we can continue our long-range planning and maximize the value of this great resource. Slide 9 shows our 3-year outlook for sales volumes of copper, gold, and molybdenum. Slide 9 made some modest changes to 2024 copper sales, reflecting small revisions in the U.S. and Indonesia, and, as previously discussed, our gold volumes for 2024 now reflect a change in the mine sequencing, which we discussed earlier, and this is really timing in nature.

A really positive development for P T a fine and stakeholders.

Kathleen Quirk: We look forward to making our application and being a position to extend our rights so that we can continue our long range planning and maximize the value of this great resource.

Richard: We look forward to to making our application and be in a position to extend our right. So that we can continue our long range planning and maximize the value of this great resource.

Kathleen Quirk: Slide 9 shows our three-year outlook for sales volumes of copper, gold, and molybdenum. Make some modest changes to 2024 copper sales reflecting small revisions in the US and Indonesia. And as previously discussed, our gold volumes for 2024 now reflect the change in the mind sequencing which we discussed earlier, and this is really time in nature. The rest of the guidance is very similar to our previous outlook. For 2024, we currently estimate consolidated unit cash costs so approximately $63 per pound, slightly above the April estimate of $57 and similar to our guidance of $160 per pound to start of the year.

Speaker Change: Slide nine shows our three year outlook for sales volumes of of copper gold and molybdenum made some modest changes to our 2020 for copper sales are reflecting small revisions in the U S and Indonesia and as previous discussed our gold volumes for 2024.

Speaker Change: Now reflect a change in the mine sequencing, which we discussed earlier and this is really timing of nature. The rest of the guidance is very similar to our previous outlook.

Kathleen Lynne Quirk: The rest of the guidance is very similar to our previous outlook. For 2024, we currently estimate consolidated unit cash costs at approximately $1.63 per pound, slightly above the April estimate of $1.57 and similar to our guidance of $1.60 per pound at the start of the year.

Speaker Change: For 'twenty 'twenty four we currently estimate consolidated unit cash costs to approximate $1 63 per pound.

Speaker Change: Lately about the April estimate of a $1 57 and <unk>.

Speaker Change: Similar to our guidance of <unk> 60 per pound at the start of the year and the details of this are presented in a vacuum on slide 20 in our reference materials.

Kathleen Lynne Quirk: The details of this are presented in the VAC on slide 20 in our reference material. Slide 10 shows the cash flow generating capacity of this business, putting together our projected volumes and cost projections. We show modeled results for our EBITDA and cash flow at various copper prices ranging from $4 a pound to $5 per pound copper, with these modeled results for 25 and 26, and current volume and cost estimates, holding gold flat at $2,300 per ounce and religion flat at $20 a pound.

Kathleen Quirk: The details of this are presented in the back and on 520 in our reference materials.

Kathleen Lynne Quirk: Slide 10 shows the cash flow generating capacity of this business, putting together our projected volumes and cost projections. We show a model result for our EBITDA and cash flow at various copper prices ranging from $4 a pound to $5 per pound cop. with these model results for 25 and 26, and current volume and cost estimates, holding gold flat at 2300 per ounce, and the legitimate flat at 20 dollars a pound, EBITDA, on an annual basis, would range from nearly $11 billion per annum, a $4 copper to 15 billion per annum at $5 copper. And our operating cash flows under these price cases would range from $7.5 billion per year to $11 billion at $5 copper, and we'll show some sensitivities for your reference on the right of this chart, that long-wine preserves large scale production, really well positioned to benefit from a better fundamental picture as we go forward.

Speaker Change: Slide 10 shows the cash flow generating capacity of this business, putting together our projected volumes and cost projections. We show a modeled result for our EBITDA and cash flow at various copper prices ranging from $4 a pound to $5 per pound copper.

Speaker Change: With with these modeled results for 25 and 26.

Speaker Change: Current volume and cost estimates holding goes flat at 2300 per ounce and alleging them flat at $20 a pound.

Kathleen Lynne Quirk: EBITDA on an annual basis would range from nearly $11 billion per annum at $4 copper to $15 billion per annum at $5 copper. And our operating cash flows under these price cases would range from $7.5 billion per year to $11 billion at $5 copper. And we show some sensitivities for your reference on the right of this chart.

Speaker Change: EBITDA on an annual basis would range from nearly $11 billion per annum at $4 copper too.

Speaker Change: 215 billion per annum at $5 copper and our operating cash flows under these price cases would range from seven and a half billion per year.

Speaker Change: To $11 billion or $5 copper and we show some sensitivities for your reference on the on the right of this chart.

Kathleen Lynne Quirk: We've got long-life reserves, large-scale production. We're really well-positioned to benefit from a better fundamental picture as we go forward. On slide 11, we show, as we have in the past, our current forecast for capital expenditures. Capital expenditures for 2024 are forecast to approximate $3.7 billion and $4.1 billion in 2025.

Speaker Change: Long life reserves large scale production, we're really well positioned to benefit from them from a better fundamental picture is as we go forward.

Kathleen Quirk: On slide 11, we show, as we have in the past, our current forecast for capital expenditures. In 24 and 25, capital expenditures for 24 are forecast to approximate $3.7 billion, and $4.1 billion in 2025 is a relatively small increase over the two years, and principally relates to revisions and estimates for our sustainable sustaining capital program and long-term projects in the Grasper District. We're going to continue to be disciplined and deploying capital, really making sure that the capital we're deploying pays off and builds initiatives to enhance value. The discretionary projects over this two-year period total two and a half billion. This is the category that reflects the capital investments we're making in new projects that under our financial policy are funded with the 50% of available cash that is not distributed.

Speaker Change: On Slide 11, we show as we have in the past our current forecast for capital expenditures.

Speaker Change: 24, and 25 mm capital.

Speaker Change: Expenditures for 24 are forecast to approximate $3 $7 billion and $4 $1 billion and in 2025, it's a relatively small increase over two years and principally relates to revisions and estimates for our sustainable sustaining capital program and long term.

Kathleen Lynne Quirk: It's a relatively small increase over two years and principally relates to revisions and estimates for our sustaining capital program and long-term projects in the Grasberg District. We're going to continue to be disciplined in deploying capital, really making sure that the capital we're deploying pays off and builds initiatives to enhance value. Discrecyary projects over this two-year period totaled $2.5 billion.

Speaker Change: <unk> and the Grasberg district, we're going to continue to be disciplined in deploying capital really making sure that the capital, we're deploying pays off and and and builds initiatives to to enhance value.

Speaker Change: Discretionary projects over this two year period totaled two and a half billion.

Kathleen Lynne Quirk: This is the category that reflects the capital investments we're making in new projects that, under our financial policy, are funded with the 50% of available cash that is not distributed. We've got some details in the back on slide 23 and in our reference materials that provide some more information about these projects, which are value-enhancing and will help us as we look to build value in the future. In slide 12, in conclusion, we reiterate the financial policy priorities, centered on a strong balance sheet, cash returns to shareholders, and investments in value-enhancing growth projects.

Speaker Change: This is the category that reflects the capital investments, we're making in new projects that under our financial policy are funded with the 50% of available cash that is not distributed they've got some details in the back on slide 23, and I'll reference materials that.

Kathleen Lynne Quirk: We've got some details in the back on slide 23 in our reference materials that provides more information about these projects, which are value-enhancing, and will help us as we look to build value in the future.

Speaker Change: To provide some more information about these projects, which are which are value enhancing and it will help us as we look to build value in the future.

Kathleen Lynne Quirk: On slide 12 and conclusion, we reiterate the financial policy priorities centered on a strong balance sheet, cash returns to shareholders, and investments in value-enhancing growth projects. Our balance sheet is solid; we've got strong credit metrics and flexibility within our debt targets to execute on our strategy. During the quarter, our credit rating was upgraded by S&P, and now we're investment-grade rating by all three major rating agencies. As in the case on the slide, we've distributed $4.3 billion to shareholders here today through dividends and share purchases. We've got an attractive future long-term portfolio that allows us to continue to build value and follow up the policy of investing in projects that build long-term value and returning cash to shareholders.

Speaker Change: I'm on slide 12 in conclusion.

Speaker Change: We reiterate the financial policy priorities centered on our strong balance sheet cash returns to shareholders and investments in value enhancing growth projects are.

Kathleen Lynne Quirk: Our balance sheet is solid, we've got strong credit metrics, and flexibility within our debt targets to execute on our strategy. During the quarter, our credit rating was upgraded by S&P, and now we have an investment grade rating by all three major rating agencies.

Speaker Change: Our balance sheet is solid we've got strong credit metrics and flexibility within our debt targets to execute on our strategy during the quarter. Our credit rating was upgraded by S&P and our investment grade rating by all three major rating agencies.

Operator: As indicated on the slide, we've distributed $4.3 billion to shareholders year-to-date through dividends and share purchases. We've got an attractive future long-term portfolio that will allow us to continue to build value and follow our policy of investing in projects that build long-term value and returning cash to shareholders. We actively monitor market conditions and carefully manage the timing of our projects to make sure our financial flexibility remains strong. Our global team is driven by values.

Speaker Change: As indicated on the slide we've distributed $4 $3 billion to shareholders year to date through dividends and share purchases.

Speaker Change: We've got attractive future long term portfolio and allow us to continue to build value and follow our policy of investing in projects that they're a long term value and returning cash to shareholders. We actively monitor the market conditions and carefully manage the timing of our projects to make sure our financial.

Kathleen Quirk: We actively monitor and market conditions and carefully manage the time and bar projects to make sure our financial flexibility remains strong.

Speaker Change: Flexibility remains strong.

Unknown Attendee: Our global team is driven by value; we're focused on our clear strategy to execute our plans, invest in our future, and return cash to shareholders. Thank you for your attention, and we'll now take your question.

Speaker Change: Our global team is driven by value, we're focused on a clear strategy to execute our plans invest in our future and return cash to shareholders and thank you for your attention and we'll now take your questions.

Operator: We're focused on our clear strategy to execute our plans, invest in our future, and return cash to shareholders. And thank you for your attention, and we'll now take your questions. Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, press star 1 on your touchtone phone. If your question has been answered or you wish to remove yourself from the queue, please press star 1 again. If you are using a speakerphone, please pick up your handset before pressing the numbers.

Operator: We ask that you limit your questions to one. If you do have additional questions, please return to the queue. One moment, please, for our first question. Our first question comes from the line of Alan Spence with BNP Paribas. Please go ahead. Good morning, Kathleen and Richard. On the North American operations, your grades were lower year after year.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question press star one on your touch tone phone. If your question has been answered or you wish to remove yourself from the queue. Please press star one again, if you are using a speakerphone. Please pick up your handset before pressing the numbers, we ask that you limit your questions to one.

Speaker Change: If you do have additional questions. Please return to the Q1 moment. Please for our first question.

Speaker Change: Okay.

Kathleen Lynne Quirk: The leaching volumes in Q2 annualized above the 24 target, yet copper sales guidance was decreased, I appreciate, just by 1%. But do we put those together and conclude that the North American optimization targets are maybe proving a bit more challenging this year? Alan, we are really focused on productivity in North America. This is a big priority of our management team. During the second quarter, we made really good progress.

Our first question comes from the line of Alan Spence with BNP Paribas. Please go ahead.

Speaker Change: Thank you all Cornhouse warning calculated Richard.

Alan Henri Spence: On the North American operations your grades were lower year on year, the leasing volumes and keeps it annualized thing about the 24 target yeah copper sales guidance with decree I appreciate took by 1%, but do we put those together and concluded that the north American kind of thing.

Speaker Change: Optimization targets or maybe proving a bit more challenging this year.

Speaker Change: Okay.

Speaker Change: Alan Weird, we are really focused on productivity and in North America. This is a big priority of our management team.

Speaker Change: During the second quarter, we made really good progress we've got a series of of metrics. We're following that will drive production higher the one area that.

Kathleen Lynne Quirk: We've got a series of metrics we're following that will drive production higher. The one area that we're working on is that we're continuing to have some unplanned maintenance, some disruptions caused by that, and really the asset health and reliability programs that we're putting in place and continuing to build on, which has been a hallmark of our U.S. operations, are important to make sure that we meet our production targets. So I think we feel like we're turning the corner.

Speaker Change: Working on is we're continuing to have some.

Speaker Change: Unplanned maintenance.

Speaker Change: Some some disruptions caused by that and really the asset health and reliability programs that we're putting in place.

Speaker Change: And continue to build on which has been a hallmark of our or our U S operations.

Speaker Change: <unk> are important to make sure that we meet our production targets. So.

I think we're we feel we're turning the corner. We've got you know very very sharp focus on these things the leach production.

Kathleen Lynne Quirk: We've got, you know, a very, very sharp focus on these things. Leach production is helping us to offset the impacts of low ore grades. And as I mentioned before, that's really going to help us bring down the average cost of our U.S. production as we scale this further, in our mill and also in some of our crush and convey facilities. But we're making progress to make sure our equipment is reliable and we don't have unplanned outages, and that's something we're really focused on as we go forward. Thank you. And just a quick follow-up question on the leaching. You provided some helpful additional color on it.

Speaker Change: Is it is helping us to offset these impacts of lower ore grades and as I mentioned before that's really going to help us bring down the average cost of our U S productions as we scale. This further but we've got to get these productivity.

Speaker Change: Objectives met where we're making progress on it we've had we had some issues in the quarter with some downtime.

Speaker Change: And our mill and also in some of our crushing convey facilities, but but we're making progress to make sure. Our equipment is reliable and we don't have unplanned outages and that's that's that's something we're really focused on as we as we go forward.

Speaker Change: Thanks for that and just a quick follow up question on the leaching you provided some helpful additional color on it.

Kathleen Lynne Quirk: You mentioned a high probability of getting to the $300 million to $400 million range by 2026, but just to confirm, none of that would be in the current 2026 LVM guidance? Right, we basically got our current rate that we're sustaining on the 200 million pounds per annum into our forecast. And so, to the extent that we build on that scale, and we have a high confidence that we will, that provides some upside to our numbers. And what also provides upside is these productivity initiatives that I mentioned coming into play. So we know what to focus on.

Speaker Change: You mentioned the high probability of getting to the three to 400 million range by 26, but just to confirm none of that would be incurred $26 one got it.

Speaker Change: Right.

Speaker Change: We basically got our current.

Speaker Change: Right that we're sustaining and on the 200 million pounds per annum.

Speaker Change: And into our forecast.

Speaker Change: And so to the extent that we build on that scale and we have a high confidence that we will that as that provide some some upside to our to our numbers and would also provides upside as these these productivity initiatives that I've mentioned them coming into coming into play so.

Speaker Change: We know what to focus on we got teams working on it and we're going to we're going to get there, but this leach thing will really help with our with the with a unit cost.

Kathleen Lynne Quirk: We've got teams working on it, and we're going to get there. But this leach thing will really help with the unit cost. Thanks, Kathleen. Your next question comes from the line of Carlos de Alba with Morgan Stanley. Please go ahead.

Speaker Change: Exactly.

Speaker Change: Your next question comes from the line of Carlos de Alba with Morgan Stanley. Please go ahead.

Kathleen Lynne Quirk: Yeah, thank you very much. Good morning, Kathleen and Richard. Kathleen, can you remind us or give us some color as to how much lower the cash cost those initiatives or those volumes have relative to the North American overall current cash cost? Yeah, so the incremental cost per pound for the leach initiatives is under a dollar per pound incrementally.

Speaker Change: Thank you very much good morning, Kathleen and Richard.

Speaker Change: Kathleen just continue with the discussion on the leaching.

Speaker Change: Project initiatives in North America.

Speaker Change: Can you remind us or give us some color as to how much lower cash cost.

Speaker Change: Those initiatives are those volumes have relative to the north American overall Korean cash cost.

Kathleen: Yeah, so the incremental cost per pound for the leach initiatives.

Speaker Change: Or under a dollar per pound incrementally and the reason why they're lower is because.

Kathleen Lynne Quirk: And the reason why they're lower is because, Essentially, the mining cost has already been incurred, so this is ore that is in stockpiles where we're essentially recovering more metal than what our prior plan suggested we could do. And so we're identifying places within the stockpile where the rock has not gotten the benefit of this catalyst solution, and we've been able to identify these areas through our censoring and data analytics And so now we're working on operational tactics to go after them. And so, essentially, you don't have the mining costs because you've already incurred that.

They're essentially the mining cost has already been incurred so this is or that is in stockpiles, where we're essentially.

Speaker Change: Recovering more metal than what are prior plans suggested we could do and so we're identifying places within the stockpile, where the little rock has not gotten the benefit of this catalyst solution and we've been able to identify that.

Speaker Change: These areas through our through our censoring in data analytics and so now we're working on operational tactics to go after it.

Speaker Change: And so essentially you you don't have the mining costs, because you've already you've already incurred that so this is all just incremental and so that you know to the extent it scales.

Kathleen Lynne Quirk: So this is all just incremental. And to the extent it scales, that has the benefit of bringing down the average unit cost in the US. And so it's something we're really, really focused on because it'll change the competitive position of these US operations, principally our Morenci mine, which has the most potential. So we're really excited about it. We've got new technologies. We're bringing in some expertise from other industries, adjacent industries. It's helping us.

Speaker Change: That has the benefit of bringing down the average unit costs in the U S and so southern we're really really focused on because it'll change the competitive position of these these U S operations, principally I'm Morency mine, which which has you know most of this most of this potential so we're really excited about it.

Speaker Change: The we've got new technologies, we're bringing in some expertise from other industries adjacent industries its helping us we've got the agricultural industry that we've been taking a page from our oil and gas industry services industry, that's helping us with some of these.

Kathleen Lynne Quirk: We've got the agricultural industry that we've been taking a page from. We've got the oil and gas industry, and the services industry that's helping us with some of these drilling techniques where we're drilling basically, https://www.youtube.com. So we're now able to directly drill and put solutions down into areas that aren't getting the benefit of the solution. And that's giving us a boost. We also call this other initiative Leach Everywhere.

Drilling techniques, where we're at.

Speaker Change: Well were drilling basically.

Speaker Change: Putting the solution you know usually its irrigated through but over time Theres blockages. So we're now able to to directly drill in and in and put solution down into areas that aren't getting the benefit of the solution and that's that's giving us a boost and we also call.

Speaker Change: The Southern initiative Leach everywhere and that's what I was referring to where we're accessing areas that we couldnt get to before and we're now able to get to them with.

Kathleen Lynne Quirk: And that's what I was referring to, where we're accessing areas that we couldn't get to before. And we're now able to get to them with drone technology and helicopters, where we can go places where humans couldn't go to lay these irrigation lines.

Speaker Change: Drone technology in helicopters, where we can.

Speaker Change: Go places where humans couldn't go to lay these irrigation lines. So there's a lot happening here a lot of excitement.

Kathleen Lynne Quirk: So there's a lot going on here, a lot of excitement. We've got really major new mine potential here without big capital intensity and low incremental operating costs. So we're all over this one, Carlos, but it does help us in terms of the incremental operating cost position of the U.S. operations the more we do, Thanks, Kathleen. And maybe just another one, and I understand this might be difficult to answer precisely, but with the new regulation for IUPK in Indonesia in place, and basically, as you mentioned, PTFI in position, or having met basically the requirements to apply for an extension, what is the path ahead to get the approval of the extension?

Carlos De Alba: We've got you know really a major new mine potential here without you know without the capital intensity and lower low incremental operating costs. So we're all over this Juan Carlos and but it does it does help us in terms of the incremental operating cost position of the U S operation.

Juan Carlos: So the more we scale it.

Katrina: Thanks Katrina.

Speaker Change: And maybe just another one and I understand this might be difficult to answer precisely your bud.

Speaker Change: With the new regulation for our U P gay in Indonesia in place and basically as you mentioned.

Speaker Change: If I can position having met basically the requirements to apply for an extension what is the path ahead.

Speaker Change: To get the approval of the extension.

Kathleen Lynne Quirk: I don't know if there is anything on timing or milestones that you can point to. And is this something that we'll have to wait until the new president is approved? Yeah, you know, he's still earning.

Speaker Change: I don't know if theres anything on timing or milestones that you can point to and it's something that we'll have to wait until the new person in D. C.

Speaker Change: Yeah historically.

Kathleen Lynne Quirk: Well, the regulation was issued, you know, we were waiting for a while for the regulation to be finalized, and the regulation was issued at the end of May, so that's a really positive development, and the catalyst really to put us in a position to be... qualified as an integrated producer, which you have to be under this regulation to apply for a life of mine extension, was the smelter. And so moving the smelter into commissioning and into the operational phase as we move into the next few months really positions us to be able to apply it. None of the conditions that are outlined in the regulation were surprises to us.

Speaker Change: Well the the.

Speaker Change: Regulation was issue you know we were waiting for a while for the regulation to be finalized and the regulation was issued in and at the end of May So that that's a really positive development and the catalyst really to put us in a position to be.

Speaker Change: <unk> as an integrated producer, which you have to be under this this regulation to apply for a life of mine extension was the smelter and so they're moving the smelter into commissioning into the operational phase as we as we move into the next few months I'm really.

Speaker Change: Positions us to be able to apply none of the conditions that are that are outlined in the regulation or surprises to us. It was in line with what we've been talking about with the government for some time now.

Kathleen Lynne Quirk: It was in line with what we've been talking about with the government for some time now. We've got to actually put together the application package, which we're doing, and we can apply now at any time. So we expect to apply for the license. There are not any guidelines for how long the government has to respond to that application, but the discussions we've had previously have been that the government wants to move forward with this quickly because they understand the long lead times, and they want to really see us get started on defining new resources and mind plans that will allow us to have continuity beyond 2041. So our objective is to get this done in 2024. I think that is really doable.

Speaker Change: We've got to actually put together the application.

Speaker Change: Package, which which we're doing and Ah we can apply now than at any time. So we expect to apply for the license there's not any guidelines for how long the government has to respond to that application.

Speaker Change: But the discussions we've had previously have been.

Speaker Change: That the government wants to move forward with this quickly because.

Speaker Change: They understand the long lead times and they want to really see us get started on defining new resources and.

Speaker Change: Mine plans that will allow us to have a continuity beyond 2041. So our objective is to get this done during 2024 I think that is really doable.

Kathleen Lynne Quirk: And whether or not it's within this administration, the current administration is in place through October, a positive reaction to the smelter and to PTFI being an integrated producer and to continuing the long-term benefits. And so, whether it's this administration or the next, I think there's positive momentum for PTFI to get this done during 2020. Thank you. And Kathleen, let me just add that.

Speaker Change: And whether or not it's within this administration the Jakarta ministration is in place through October.

Speaker Change: I think Theres watch spread.

Speaker Change: Positive reaction to the smelter and to P. T F. Avi in an integrated producer and two continuing the long term benefits and so.

Speaker Change: Whether it's this administration or the next I think there's positive.

Speaker Change: Momentum for P. T F I too to get this done during during 2024.

Speaker Change: Thank you.

Speaker Change: Good afternoon, let me just add.

Richard C. Adkerson: This is different from what we had to face in the past. We're not debating this. It's in everyone's best interest, there's widespread acceptance for it, and there's a clear understanding now that all stakeholders benefit from us looking at how to maximize the value of this resource. So for those of you who have followed us in the past, this is a different process, and it's very positive. Our next question will come from the line of Liam Fitzpatrick with Deutsche Bank. Please go ahead. Good morning, everyone.

Speaker Change: This is different from what we had to face in the past.

Speaker Change: We're not debating on this.

Speaker Change: It's in everyone's best interest there's widespread acceptance for it.

Speaker Change: And.

Speaker Change: There's a clear understanding now that all shareholders are all stakeholders benefit from us.

Speaker Change: How to maximize the value of this resource.

Speaker Change: For those of you saw this in the past this is a <unk>.

Speaker Change: Different process and it's very positive.

Speaker Change: Our next question will come from the line of Liam Fitzpatrick with Deutsche Bank. Please go ahead.

Speaker Change: Okay.

Kathleen Lynne Quirk: Just a question around the new smelter in Indonesia and the ramp-up profile. On the face of it, it appears a fairly optimistic target to achieve full capacity by year-end, just given the size and the complexity of it. So can you give us some color on some of the key ramp-up milestones that you'll need to achieve through H2 to hit that target?

Liam Fitzpatrick: Good morning, everyone. Just a question around the new smelter in Indonesia, and the ramp up.

Liam Fitzpatrick: Profile on the face of it it appears fairly optimistic target.

Liam Fitzpatrick: To achieve full capacity by year end, just given the size and the complexity of it. So can you give us some color on the some of the key ramp up milestones that you'll need to achieve through H T. J.

Speaker Change: To hit that target and then separately moving forward do you plan to give us any separate disclosure for the smelter. So that we can assess the operating performance and the profitability of its own. Thank you.

Kathleen Lynne Quirk: And then separately, you know, moving forward, do you plan to give us any separate disclosure for the smelter so that we can assess its operating performance and its profitability and so on? Thank you. Liam, in terms of your first question, it is a very large, complex project, and, you know, smelters, startups, there aren't a lot of them on this scale in the Western world in recent years. And so we've recognized that for some time and have been planning for this over an extensive period of time. We've brought together the expertise that Freeport has around the world in operating smelters. We operate a smelter in the U.S. and in Arizona, and an efficient smelter in Huelva, Spain that we've operated for some time.

Speaker Change: And in terms of your first question. It is a it is a very large complex project and smelter startups there aren't a lot of them on the scale in our in the Western World and in recent years.

Speaker Change: And so we recognize that for some time.

Speaker Change: And have been planning for this over extensive period of time.

Speaker Change: We've brought together the expertise that Freeport has around the world and and operating smelters, we operate a smelter and in the U S and in Arizona, where we have a.

Speaker Change: Efficient smelter in a well the Spain that we've operated for some time, we also have an existing smelter in Indonesia that that we're in partnership with with with a Japanese partner there that has been very successful. So we've brought to bear all of the expertise.

Kathleen Lynne Quirk: We also have an existing smelter in Indonesia that we're in partnership with a Japanese partner there that has been very successful. So we've brought to bear all of the expertise in not only looking at construction, but we've had a team, a dedicated team on the construction side, who have just done a great job. But on the operational side, we've been setting up this team for some time to be able to run this smelter and train people, and we've already got the people employed.

Speaker Change: In not only.

Speaker Change: Now looking at construction and we've had a team of dedicated team on the construction side, who have just done a great job, but on an operational side.

Speaker Change: We've been standing up this team for some time to to be able to to it just to run the smelter and and and training people and we've had we've already got the people employed.

Kathleen Lynne Quirk: We've brought in expertise from around the world to lead this startup, and so we've planned for it. And your point is well understood by the company. We feel we're well prepared for it. With any startup, you're going to have issues; we recognize that.

Speaker Change: We've brought in expertise from from around the world to lead this start up.

Speaker Change: And so we've planned for it and your your your point is is is well understood by the company.

Speaker Change: We feel we're well prepared for it with any startup you're going to have you're going to have issues. We recognize that but every time, we've thrown issues and challenges at this team through the construction period and into the commissioning period and.

Kathleen Lynne Quirk: But every time we've thrown issues and challenges at this team through the construction period and into the commissioning period, we've been able to overcome them. I hope you have a chance, if you haven't already, to look at the video showing really where the smelter is in terms of operational readiness, and we're showing all the various facilities as part of it. So we've planned for it. We understand it's going to be a different way of marketing our product. In the past, in Indonesia, we loaded concentrate on a ship and paid a TCRC and collected our revenue. And that was pretty simple.

Speaker Change: We've been able to overcome them I hope you have a chance if you haven't already to look at the look at the video showing really where this where where the smelter is in terms of of of operational readiness and we're showing you know all of the various facilities as part of it. So we've we've planned for it.

Speaker Change: We understand it's gonna it's gonna be of.

Speaker Change: A different way of marketing a product you know in the past in Indonesia, we've load loaded concentrate on a ship and pay the TCR C and end and collected our revenue and that was that was pretty simple now it's got a more complex.

Kathleen Lynne Quirk: Now it's got a more complex logistics situation and a more, we've got a number of products we'll be marketing. But the team's been working on this and we've got expertise in operating smelters and marketing various products and so we're well situated for it. In terms of the reporting.

Speaker Change: Logistics situation in a more we've got a number of products, we'll be marketing, but the team has been working on this and we've got expertise in in in an operating smelters in marketing various products and so we're well well situated for it in terms of the reporting.

Kathleen Lynne Quirk: It'll be reported, it's integrated into PTFI, and it'll be reported as part of PTFI's results. You'll be able to see its operating costs through the TC and RC lines on our unit costs. But above that line, in the revenue line, of course, we're going to be able to generate higher revenues because we're marketing directly; we have essentially the free metal that'll come through to our benefit. We don't have to pay a smelter, the payable factors, etc.

Speaker Change: It'll be reported its integrated into P. T F. I it'll be reported as part of P. T. F. EIS results, you'll be able to see its operating cost through the through the the Tc and RC line on our unit costs.

Speaker Change: But above that line in the revenue line of course, we're going to be able to generate higher revenues are because where we're marketing directly we have the essentially the free metal that'll come through to our benefit we don't have to pay a smelter the payable factors et cetera. So.

Kathleen Lynne Quirk: So it'll be a piece of revenues and a piece of operating costs. We'll provide disclosures to help you through that. We won't have the duties any longer, and so that's a sizable benefit as well. Just in terms of operations and readiness, I'm going to ask Corey Stevens to make a couple of comments. Corey heads up our engineering group, our project construction group, and our group that deals with operational

Speaker Change: It'll be a piece of revenues and a piece of of operating costs, but will will will provide disclosures to help you through that.

Speaker Change: We won't have the duties any longer.

Speaker Change: And so that's a that's a sizable benefit as well.

Cory Stevens: So he's got a big portfolio, not only leading the smelter project but also the leach innovation initiative. But Corey's just back from Indonesia, and maybe, Corey, you can just supplement what I was talking about in terms of the readiness for operations. Yeah, Kathleen.

Speaker Change: For our results, but just in terms of the operations and readiness some I'm going to.

Speaker Change: As Corey Stevens to make a couple of comments Corey is.

Cory Stevens: He heads up our.

Cory Stevens: Our our engineering group our project construction group are our group that deals with operational efficiencies. So he's got a big portfolio not only leading the smelter project, but also the bleach innovation initiative, but of course, just back from Indonesia in and maybe Corey you can just supplement.

Cory Stevens: When I when I was talking about in terms of the readiness for operations.

Yes, Thanks Kathleen.

Cory Stevens: Yeah, so the commissioning work is, you know, well underway with a number of giant unit processes. And, and the teams are collaborating between the operations and, Kathleen mentioned it, but we've got a large contingent of operating folks from around the world, we call them boots on the ground, and they're all out there together working side by side to commission this large project. I mean, it's pretty, it's immense.

Cory Stevens: The commissioning work is oh.

Cory Stevens: Well underway with a number of giant unit processes and and the teams are collaborating between the operations.

Cory Stevens: Kathleen mentioned, it but we've got a large contingent of Av.

Operating folks from around the world, we're calling boots on the ground and they're all out there together working.

Cory Stevens: Side by side the commission this large project.

Cory Stevens: And just to give you an idea, I mean, there are 45,000 pieces of instrumentation and, you know, computer connections that we're verifying and double checking and running the equipment through the operating ranges to be able to start it up. The ramp-up plan, you know, when we go to start this up, the plant wasn't designed to run very slowly, so... You end up having to run it at, you know, essentially 50% capacity or a little bit better than that, right from the start.

Speaker Change: I mean, it's pretty it's immense and just to give you an idea of I mean, there's 45000 pieces of instrumentation.

Speaker Change: Computer connection but.

Speaker Change: But we're verifying and double checking.

Speaker Change: And running the equipment through the operating ranges to be able to start up.

Speaker Change: The ramp up plan when we go to start this up I mean, the plant wasn't designed to run very slow so.

Speaker Change: No you end up having to run it at essentially 50% capacity or a little bit better than that right from the start and so on so there is a lot of checks and safety checks going on right now to be able to operate at that level.

Cory Stevens: And so there's a lot of checks and safety checks going on right now to be able to operate at that level, and then to double check the procedures and so forth, and then we'll be able to ramp up from there. So the team is energized.

Speaker Change: And then the double check the procedures and so forth.

Speaker Change: We'll be able to ramp up from there. So I'd say team is energized.

Cory Stevens: It's been well-choreographed and planned for years, and we're ready to make it happen. Yeah, I just want to emphasize one thing at Freeport. When we do a major project, we benefit from having a centralized team that supports the operating teams. And so, unlike some other companies that don't have this kind of infrastructure that can really help manage the construction period and the transition to operations, we really can bring together the best of the best when it comes to executing a startup. And I'm not sugarcoating.

Speaker Change: Choreographed planned for years.

Speaker Change: And we're ready to make it happen.

Speaker Change: Yeah, and I just wanted to emphasize one thing.

Speaker Change: Freeport.

Speaker Change: When we do a major project.

Speaker Change: We benefit from having a centralized team that supports the operating teams and so unlike some other companies that.

Speaker Change: Don't have this kind of infrastructure that can really help manage the construction period and the.

Speaker Change: Transition to operations.

Speaker Change: We really can bring together.

Speaker Change: The best of the best when it comes to executed executing a startup and I'm not sugarcoating, where we're gonna have things that come up we know that but we really have the right people that are in place to have a safe and efficient startup we we expect.

Kathleen Lynne Quirk: We're going to have things that come up. We know that. But we really have the right people in place to have a safe and efficient startup. We expect in August that we'll get the first processing of concentrate through the facility. And as Cory said, the ramp-up, we expect to move pretty quickly to go through the end of August. In 2025, I mean 2024, we're also, we've got a precious metal refinery that we'll be starting up in the same time frame.

Speaker Change: In August that that will get first the you know first processing of conflict concentrate through the facility and and and of course that the ramp up we expect them to move pretty quickly to go through the end of.

'twenty 'twenty five 'twenty 'twenty four we were also we got our precious metal refinery that will be starting up in the same timeframe. So lot has gone into this project a lot of planning and it's been executed well and we expect that will continue to execute it well through the through the.

Kathleen Lynne Quirk: So a lot has gone into this project, a lot of planning, and it's been executed well, and we expect that we'll continue to execute it well through the ramp-up. That was a very comprehensive answer, so thank you both. Could I just ask a quick follow-up question? Is there one item along the critical path?

Speaker Change: Through the ramp up.

Speaker Change: That was a very comprehensive answer so thank you both could I just ask a quick follow up is that one item alone the critical path.

Kathleen Lynne Quirk: Over the next few months, you'd highlight that once you get through that, you'll be sleeping a bit easier at night. Cory, you have one on your mind? Yeah, so we're taking extra precautions on the second stage of the smelting furnace, the flash converting furnace. There are only six of these running in the world.

Speaker Change: The next few months that you'd highlight that once you get through that you'll be sleeping a bit easier at night.

Speaker Change: Yeah.

Speaker Change: Corey you have one on your mind.

Cory Stevens: Yes, so we're taking extra precautions on the second stage of the smelting furnace.

Cory Stevens: Flash converting.

Furnace, there's only six of these running in the world.

Cory Stevens: It's fairly specialized and we're taking extra precautions there that.

Speaker Change: That is at the heart of what.

Speaker Change: It's going to enable the smelter.

Speaker Change: To operate at the levels that we want to.

Speaker Change: Thank you.

Speaker Change: Yeah.

Cory Stevens: It's fairly specialized, and we're taking extra precautions there. That is at the heart of what's going to enable the smelter to operate at the level that we want it to. Thank you. Your next question will come from the line of Bob Brackett with Bernstein. Please go ahead.

Speaker Change: Your next question will come from the line of Bob Brackett with Bernstein. Please go ahead.

Kathleen Lynne Quirk: Good morning, a question around the gold sales revision. I understand the wet conditions in the block cave changed your mining sequencing into maybe a lower gold grade area, but why didn't those ounces come back in the plan period?

Bob Brackett: Good morning, a question around the gold sales revision I understand the wet conditions in the block cave.

Bob Brackett: Changed your mind sequencing into maybe a lower gold grade area, but Ah why those ounces come back into the plan period. So if you lost 2 million ounces. This year couldn't you argue that it should reappear in 25 or 26, yeah, It's 150000 ounces.

Kathleen Lynne Quirk: So if you lost 0.2 million ounces this year, couldn't you argue that it should reappear in 25 or 26? Yeah, it's 150,000 ounces, Bob, and it comes back into our plan, you know, over the next few years. And so it just didn't, it didn't round up enough to make our numbers, but it is purely a timing situation. And when we look at the, you know, our overall, you know, five-year plan, it really didn't, it didn't, it didn't change much.

Bob Brackett: As Bob and it comes back into our plan you know over the next few years.

Bob Brackett: And so it just didn't it didn't round enough to have to up our numbers, but it is purely a timing.

Bob Brackett: The situation and when we look at the you know our overall five year plan it really didnt it didnt it didnt change much.

Bob Brackett: Mark Johnson is on the on the call.

Bob Brackett: The.

Kathleen Lynne Quirk: The issue we had in the second quarter, and we expect will continue for a period in 2024. We had some wet draw points that had spillage that we couldn't get back into to clean up. It takes a while to clean it up.

Speaker Change: The issue we had in the second quarter and we expect will continue for a period in 2020 for us.

Speaker Change: We had some some wet draw points that had spillage that you know we couldn't get back into to to just clean up. It took it took a while it takes a while to clean it up where we've got a robust remote mining underground mining.

Kathleen Lynne Quirk: We've got a robust, remote mining, underground mining system, and that's working really well. What the team's working on is a remote pumping system that allows us to clean up these. Spills more quickly, and so we don't have as much disruption in these areas, but it really is just a timing thing. And Mark, I don't know if there's anything you want to add to those comments. No, Kathleen, I think you have touched on it.

System, and that's working really well and what the team is working on is a remote pumping system that allows us to clean up. These these spells more quickly and so we don't have as much to strike disruption in these areas, but it really is really is just a timing thing and mark I don't know if there's anything you.

Donna you want to add to those comments.

Donna: No Kathleen I think you touched on it we've been.

Mark J. Johnson: We've been managing wet muck going back to the IAOZ, so roughly over 20 years. Some of the things, as you mentioned, We had some spills that traveled a bit further, so in the GBC, there are some unique material characteristics that we're mitigating. And the primary one, as Kathleen mentioned, is the ability to remotely place pumping equipment and pump out the water that accumulates during some of our... Time entry criteria. So what we have is a period of time that we wait to get safely back in.

Mark J. Johnson: Managing wet mark going back to the I O Z. So so roughly over 20 years.

Mark J. Johnson: Some of the things as you mentioned.

Speaker Change: We had some skills that are.

Speaker Change: Traveled a bit further so that in the GBC theres some unique.

Two real characteristics that are.

Kathleen: Never mitigating and the primary one as Kathleen mentioned as the.

Kathleen: The ability to to remotely placed pumping equipment.

Kathleen: And pumped out the water that accumulates during some of our.

Kathleen: Time entry criteria.

Speaker Change: So what we have is a period of time that we wait to get safely back in.

Mark J. Johnson: What we're seeing is that the water builds up during that period of waiting. By getting the remote pumping in, we'll be able to have it pump before the, while this, Time is taking place, and then we can start our cleanup much quicker.

Speaker Change: We are seeing is that the water builds up during that period of waiting.

Speaker Change: Getting into the remote pumping in we'll be able to have it pump before the.

Speaker Change: While this.

Speaker Change: Time is taking place.

And then we can start up clean up much quicker.

Kathleen Lynne Quirk: One of the things that we did in GBC is that it was a bit unique. Because it's the foundation of our operation and the primary source of value, we built in additional operational flexibility by developing more draw points than theoretically required to meet the production rate. And that's what allowed us to shift to this other area that had very similar copper grades but incrementally lower gold grades. And as Kathleen mentioned over the five years, that goal that you had mentioned is back in the plan.

Speaker Change: One of the things that we did in GBC.

Speaker Change: Is that that was a bit unique.

Speaker Change: We.

Speaker Change: Because it's the foundation of our operation and the primary source of value.

Speaker Change: We built in the additional operational flexibility.

Speaker Change: By developing more draw points, then theoretically required to meet the production rate and that's what allowed us to shift to this other area that are.

Speaker Change: Had very similar copper grades.

Speaker Change: But incrementally lower gold grades.

Speaker Change: And as Kathleen mentioned over the five years that that goal that you had mentioned is back in the plan.

Kathleen Lynne Quirk: And we plan to have this mitigation measure strongly in place, firmly in place in the fourth quarter, and I'm confident we can do that. That's very clear. A quick follow-up on sort of the third condition around the IUPK application is the commitment to additional exploration and increases in refining capacity. Is that a hard dollar amount that you have to put into the application, or is that something that you'd discuss, or is that a softer sort of target?

Speaker Change: And we.

Speaker Change: We plan to have this this mitigation measures strongly in place firmly in place in the fourth quarter and I'm confident we can do that.

That's very clear a quick follow up on sort of the third condition around the IU PK application has commitments for additional exploration and increases in refining capacity.

He has got a hard dollar amount that you have to put into the application or is that something that you discussed or was that a softer sort of targets. That's that's something that would be approved by the by the minister of energy and minerals.

Kathleen Lynne Quirk: That's something that would be approved by the Minister of Energy and Minerals. We've been talking with the government. We do have plans to conduct exploration, and we're doing some of that now. In the future, we'll conduct additional exploration. That will allow us to identify additional resources, and so that's really part of our plan for extension. It really is a matter of looking at what's needed in the country, and the desire is to have it located in Papua, and we'll be working to evaluate that along the way.

Speaker Change: We've been talking with the government, we do have plans to conduct exploration.

Speaker Change: And we're doing some of that now is in the future will conduct additional exploration that will allow us to identify additional resources and so that is that's really part of our plan for for extension in terms of the additional refining capacity, there's been discussion with the government there isn't a.

Speaker Change: Our aspiration to have additional capacity in <unk>.

Speaker Change: In Papua the current smelter is located in classic and Theres, an aspiration to have additional capacity in <unk>.

Speaker Change: In Papua and that that continues to them to be discussed with the government, but there's not a the regulation doesn't have a specific a specific number or level of investment. It really is a matter of looking at it.

Speaker Change: What's needed in country, and and and the desire is to have it you know located in in Papua and we'll be working to evaluate that with along with the government.

Speaker Change: Very clear thanks.

Kathleen Lynne Quirk: Very clear, thank you. Our next question comes from the line of Orest Wowkodaw with Scotiabank. Please go ahead. Hi, good morning. Just a clarification on the potential IUPK extension. It sounds like you're moving towards giving up an extra 10% of the asset post-2041. Would you receive any proceeds for that, or is that effectively just the cost of the extension?

Speaker Change: Our next question comes from the line of oral <unk> with Scotiabank. Please go ahead.

Speaker Change: Okay.

oral <unk>: Hi, Good morning, just a clarification on the potential you PK extension.

Speaker Change: It sounds like you're moving towards giving up an extra 10% in the outset that post 2021 would you see any proceeds for that or is that or is that effectively just the cost of the extension.

Speaker Change: Hum.

Kathleen Lynne Quirk: Ten percent, offering a ten percent interest to state-owned companies, and we're talking with Mind ID about their objective to acquire an additional ten percent. The discussions we've had to date with the government involve offering that ten percent, and this is coming from FCX's shares, offering that ten percent with a reimbursement of our capital costs incurred for the current period through 2041 to the extent that that benefits the period beyond 2041, so it's essentially a book value concept. And the rationale for offering the 10% and the mechanism for valuing it has been that the government is granting PTFI the extension, and it's a cost of the deal.

Speaker Change: Sure.

Speaker Change: 10% offering a 10% interest to state on company and where were talking with mind idea about their their objective to acquire additional 10%. The discussions we've had to date with the government have involved.

Speaker Change: Offering that 10% and this is coming from F C extra shares.

Speaker Change: Offering that 10% at with a with a reimbursement.

Speaker Change: Of our capital costs incurred for.

Speaker Change: For the current period through 2041 to the extent that that benefits the period beyond 2041, So it's essentially a book value concept.

Speaker Change: And the rationale.

Speaker Change: For offering the 10% and and and the mechanism for valuing it.

Speaker Change: Has been that the government is granting P. T F I with our with the extension and it's at.

Speaker Change: Cost of the deal.

Kathleen Lynne Quirk: And from our perspective, being able to extend beyond 2041, there's a lot of value there that if we don't move forward and make investments that we won't be able to accomplish. So we felt, in the spirit of the partnership we have with the government, where it's a one-up alignment and a win-win, that this was appropriate to give us the optionality to have value, be a significant value. Okay, thank you.

Speaker Change: And from our perspective.

Speaker Change: Being able to extend beyond 2041, there's a lot of value there.

Speaker Change: That if we don't you know move forward and make investments that we won't be able to to to to accomplish so we felt it in the spirit of.

Speaker Change: The partnership with with with we have with the government, where it's a one of alignment in the win win that this was this was the appropriate to to give us the optionality to have valued the us.

Significant value beyond 2041.

Kathleen Lynne Quirk: And just as a quick follow-up, it's nice to see the buyback resume here in July. It's been two years, I think, since we've seen any shares repurchased. Should we expect that now to ramp up in the second half of the year with the small share commissioning and ramp up? The financial policy is basically one where we distribute available cash through dividends and share purchases. 50% of available cash.

Speaker Change: Okay. Thank you.

Speaker Change: And then just as a quick follow up it's nice to see the buyback resume here in July its been a two years I think since you between any shares repurchase should we expect that now to wrap up in the second half of the year with the smelter a commission.

Speaker Change: Commissioning of wrap up.

Speaker Change: The the financial policy is.

Speaker Change: It's basically one where we distribute through dividends and share purchases.

Speaker Change: Available cash 50% of available cash.

Kathleen Lynne Quirk: The smelter investments were not part of that math, so we're financing the smelter separately. So the available cash definition is really just the cash flow, less the capex that's required for the current operation. It doesn't include the smelter, it doesn't include our future growth that we're investing in, and the discretionary projects that we've labeled earlier. So that'll be a function of what our cash flows are. We certainly want to continue buying back stock, but it'll be a function of what ultimate cash flows, and we'll continue to follow that, and follow that power.

Speaker Change: The smelter investments were not part of that math. So we're financing a smelter separately. So the available cash definition is is really just the cash flow and less the capex that's required for the current operation. It doesn't include the <unk>.

Speaker Change: Smelter or doesn't include.

Speaker Change: Our future growth that we're investing in the discretionary projects that we've labeled earlier so it that'll be a function of what our cash flows are you know we certainly are want to continue buying back buying back stock, but it'll be a function of what what ultimate cash flows and will continue to follow that follow that policy.

Speaker Change: Thank you just as a reminder, just wonder whether we're moving past the hour here and I know people have been asking more than one question.

Kathleen Lynne Quirk: Just as a reminder, I know we're moving past the hour here, and I know people have been asking more than one question, so please limit to one and we'll get back to you with follow-up. Our next question will come from the line of Michael Dudas with VRP. Please go ahead. Hi, Mike. David and Richard.

Speaker Change #100: So there's a limit to one and we will get back to you is with with follow ups.

Speaker Change #101: Our next question will come from the line of Michael Dudas with V. R. P. Please go ahead.

Mike: Hi, Mike.

Speaker Change #103: David and Richard.

Operator: Hey, Mike. Mike, I think your line is cutting out. Can you hear me now?

Mike: Hey, Mike.

Speaker Change #103: Yeah.

Speaker Change #104: Mike I think your line is cutting out.

Speaker Change #105: Can you hear me now I can hear you now.

Kathleen Lynne Quirk: I can hear you now. Oh, thank you. Your relationship and negotiation with the Indonesian government have been going quite well, as you've described here today and in past calls. Maybe you can update us on how things are in Peru, Chile, maybe even North America, how relative to the amount of investments that you're going to be looking at, maybe others and your competitors as well, how that's played out given the volatility and the upside in the copper price and any thought from those governments and those ministers to move along with the needed supplies that the market seems to be calling for.

Speaker Change #105: Thank you Jeremy your relationship in negotiation with the Indonesian government has been going quite well as portrayed here today and in past calls you can update us on how things are in Peru, Chile, and maybe even in North America relative to the amount of investments that you're going to be looking at maybe others than your competitors as well how thats played.

Speaker Change #106: Given the volatility in the upside in the copper price and any thought from those governments and those ministers.

Speaker Change #107: To move along with the new supply is that the market seems to be calling for.

Kathleen Lynne Quirk: I think in South America, there's a strong desire to see more investment. Certainly, Peru and Chile both want to see more investment, and mining is such a big part of their economy. So they're very, very interested.

Speaker Change #108: I think in South America, there's a strong desire to see more investment in hours.

Speaker Change #109: Certainly, Peru and Chile both.

Speaker Change #109: I want to see more investment in mining is such a big part of their economy. So they're very very interested and now you've got to make sure you've got the community and social.

Kathleen Lynne Quirk: You've got to make sure you've got the community and social matters done in the right way, but there is a strong desire for those to make investments. Chile is going through a process now of looking at its permits and trying to streamline permits. You know, we talked about the ELOPRA project going through a long permitting process, and we're hopeful that this process that the government's now undertaking will allow a streamlining of permits, but I think both countries want to see more investment in mining.

Speaker Change #109: Matters were done in the right way, but but there's there is a a strong desire for those to make.

Speaker Change #109: Chile is going through a process now of looking at it it's it's permitting and.

Speaker Change #109: And trying to streamline permitting you know we talked about El Abra project.

Speaker Change #110: Going through a long permitting process and we're hopeful that this process that the government is now undertaking will allow a streamlining of our permits but I think both countries want to see more investment in mining the U S. As well you, you're saying that you know and in res.

Kathleen Lynne Quirk: The U.S. as well, you've seen that in recent times with the U.S. prioritizing metals that are critical to the supply chain, and so I think the environment in these countries for making investments is more positive than it has been in the past, but again, I want to emphasize the social aspect of this and the community aspect. It doesn't mean that that lowers the bar on what our responsibilities are to sustainability and to communities and environmental management and social good. So, you've got to tick all the boxes, but there is a growing recognition of the need for these metals, and copper is one of the leaders for that.

In recent times with the U S. Prioritizing metals that are that are that are critical to the to the supply chain and and so I I think you know the environment for them in these countries for making investments as is more positive.

Speaker Change #110: And it has been in the past, but again I want to emphasize the social aspect of this in the community aspect. It it doesn't mean that that lowers the bar on what our responsibilities are to sustainability into communities and environmental management and social good. So got it you got to take all of the bar.

Speaker Change #110: But there is a growing recognition of the need for for these metals and copper is is is that the one of the leads for that so.

Kathleen Lynne Quirk: So, we're in a good position. We're in a particularly good position in the U.S. with our current operations where what we're talking about doing is building on existing operations, and so the permitting requirements are not as extensive for the types of projects we're pursuing as they would be for a greenfield project or a new project. America is also talking about streamlining, permitting, and regulatory.

Speaker Change #111: We're in a good position were particularly good position in the U S with our with our or our current operations. We're well. We're talking about doing is is is building on existing operations and so that the permitting requirements or not.

Speaker Change #112: He has extensive for for the types of projects, we're pursuing as it would be for a greenfield project or a project in Chile for example.

Kathleen Lynne Quirk: So we're in a good position. This Lone Star Safford opportunity that I talked about earlier is one that, even though our studies are a little behind where we are in Chile with ALABRA, that project could catch up pretty quickly because we've been able to do a lot of research. And because we don't have the extensive permitting requirements to do that project that we have in Chile.

Speaker Change #111: And U S is also talking about you know streamlining permitting and regulatory so where we were in a good we're in a good position. This lone star Safford opportunity that I talked about earlier.

Speaker Change #111: Is one that I'm, even though our studies are a little behind where we are in in Chile with El Abra.

Speaker Change #111: That project to catch up pretty quickly because we don't have the extensive permitting requirements to to do that that project that we have in Chile, So I'm, where I'm you know very focused on getting getting that project defined so we can look at them together.

Speaker Change #111: And see which one is it drives the most value for our business and shareholders.

Kathleen Lynne Quirk: So I'm very focused on getting that project defined so we can look at them together and see which one drives the most value for our business and shareholders. And so we really have an advantage in the U.S. with the existing operations and leveraging our current position. Of course, the leaching doesn't require a new permit.

Speaker Change #111: And so we really have an advantage in the U S with our with our existing operations and leveraging.

Speaker Change #111: Our current position you know of course, the leaching doesn't require an apartment. So we were in a good position to bring on projects more quickly than maybe others could.

Kathleen: Excellent Kathleen.

Kathleen: Use of yours.

Kathleen: Commitment to doing what's definitely.

Kathleen: Doing the right thing.

Kathleen Lynne Quirk: So we're in a good position to bring on projects more quickly than maybe others would, years of years of commitment to doing what Kathleen just said of doing the right thing. Building relationships has led us in the U.S. to have unanimous support from communities, from Native American groups, from state governments, and regulators. The same goes true in Peru for our Stero Verde project in the Arequipa region, where Peruvian conditions can be very challenging.

Kathleen: These relationships.

Kathleen: Whereas in the U S to have.

Kathleen: Uniform support from communities.

Native American groups from state governments and <unk>.

Kathleen: Regulators.

Kathleen: Same goes true in Peru for Cerro Verde project.

Kathleen: In the Arequipa region, where.

Richard C. Adkerson: It's got very challenging politics right now, but we benefit from work we've done to support the community, and that's very helpful. And then in Chile, our 49% partner at Alhabra is Codelco, and they are very anxious for us to move forward and very supportive. We have developed a relationship with Boric, and I'm going to be on a panel with him at APEC in Peru this fall.

Kathleen: It can be very challenging very challenging politics, right now, but we benefit from work we've done sports community and.

Kathleen: And that's very helpful and then in Chile.

Speaker Change #113: Our 49% partner.

Speaker Change #113: Codelco and they are very anxious for us to move forward and very supportive.

Speaker Change #113: The Delta relationship where he can will be on a panel with them in APAC.

Speaker Change #113: Peru this fall.

Richard C. Adkerson: And the tone has significantly changed from his initial election period, where he met the realities of the need for Chile to help, have helped support the mining sector. This is always such a big, important part of our business, as you can see around the world. We learned a lot of lessons early on with the development of Grasberg and the need to have good relationships with indigenous people there as well as with the central government. So I'm proud of what our team did, and we're just committed to finding common ground and doing things in the right way. Very helpful, Richard and Kathleen. Thank you. You're welcome.

And.

Speaker Change #113: Hum.

<unk> significantly changed.

Speaker Change #113: The election.

Speaker Change #113: Yeah.

Speaker Change #113: Need for Chili's.

Speaker Change #114: Yep Yep.

Speaker Change #113: Support.

Speaker Change #115: Mining sector. This is always such a big important part of our business as you can see around the world. We learned a lot of lessons early on with the development of Grasberg and the need to have good relationships with the indigenous people there as well with the central government. So I'm proud of what our team has done and we're just committed to find.

Speaker Change #115: Common ground and doing things in the right way.

Unknown Attendee: Boy. Very helpful, Richard Kathleen. Thank you.

Richard: Very helpful. Richard Kathleen Thank you Lasse.

Lawson Winder: Our next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Richard: Right.

Kathleen Lynne Quirk: Our next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead. Operator, thank you very much. Kathleen and Richard, hello, and thank you for making the time for my call, my question. I'll just keep it brief. I wanted to ask about Kuching-Lear, a hugely high return project for you all. Effectively, one topic, three questions.

Richard: Our next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Lawson Winder: Operators, thank you very much, and Kathleen and Richard alone. Thank you for making the time for my call. I'll just give it brief. I wanted to ask about Coopchimlee Air, usually high return projects for you all.

Lawson Winder: Operator, thank you very much and Kathleen and Richard Hello, and thank you for making the time for my my call. My question I'll just keep it brief I wanted to ask you about two generally are hugely high return project for you all.

Lawson Winder: Effectively one topic, three three questions. I just wanted to get an update on when you were expecting first production. And then ask as to the pace of spending. So, I mean, it's a $4 billion project, and you're noting that about 400 million have been spent today over a period of about two years. When do you expect that to start to pick up a little more? Thanks, very, very much.

Effectively one topic three three questions I just wanted to get an update on when you were expecting first production.

Kathleen Lynne Quirk: I just wanted to get an update on when you were expecting first production, and then ask as to the pace of spending. So, I mean, it's a $4 billion project, and you're noting that about $400 million have been spent to date over a period of about two years. When do you expect that to start to pick up a little more? Thanks very, very much.

Lawson Winder: And then ask.

Speaker Change #117: As to the pace of spending so I mean, it's a $4 billion project and you're noting that.

Speaker Change #117: About $400 million of inspect to date over a period of about two years. When do you expect that to start to pick up a little more thanks very very much.

Kathleen Lynne Quirk: Lawson, you're right, it's like our other projects, our long-term development, Grasberg's underground block cave, the capital is spent over a multi-year period, and we do, in our projections, show that we'll start ramping up spending in Coochee and Lear as we go forward. The average of 400 million a year over a 10-year period was... We're spending a little bit less than that, and that'll begin to ramp up, and we'll have some years where it's higher than $400 million.

Speaker Change #117: Lawson you you're right. It's a it's like our other projects are our long term development Grasberg underground block cave, that's the capital spent over a multi year period.

Richard Adkerson: Lawson, you're right. It's like our other projects, our long-term development, Glassberg, Underground Block K, the capital spent over a multi-year period. And we do in our projections show that we'll start ramping up spending in Coopchimlee Arts. We go forward the average of 400 million a year over a 10-year period was spending a little bit lower than that. That'll begin to ramp up and we'll have some years where it's higher than 400 million. And there may be additional development in that 4 billion that will occur after we start.

And we do in our in our projections show that will start ramping up spending and in Cuccinelli are as we go forward the average of our $400 million a year over over a 10 year period was.

Speaker Change #117: We're spending a little bit lower than that and that'll that'll begin to ramp up and we'll have some years, where it's higher than the 400 million.

Speaker Change #117: And there may be additional development in that and that 4 billion that'll that'll occur after we we start so.

Richard Adkerson: But we are expecting to start up KL towards the end of this decade in advance of 2030. And it is a very large scale 90,000 times a day of a more significant capital and gold production from that deposit. A real benefit of this extension beyond 2041 is the resource is much larger than what we'll mind between late 20s and 20s and 2041. So we'll have, you know, we did the economics and the economics paid at, you know, just the life that ends in 2041. But there's a lot of resource beyond that that'll come in to the fold with an extension.

Kathleen Lynne Quirk: And there may be additional development in that $4 billion that'll occur after we start. But we are expecting to start up KL towards the end of this decade, in advance of 2030. And it is on a very large scale, 90,000 tons of ore daily, significant copper and gold production from that deposit.

Speaker Change #117: But we are expecting a startup K L towards the end of this decade and advance of 2030.

And it is a is a very large scale 90000 tonnes a day.

Of of or a significant copper and gold production.

Speaker Change #117: Production from that from that deposit.

Kathleen Lynne Quirk: A real benefit of this extension, beyond 2041, is the resource is much larger than what we'll mine between the late 2020s and 2041. So we did the economics, and the economics paid for just the life that ends in 2041. But there's a lot of resources beyond that that'll come in to the fold with an extension. So it's a great extension of Grasberg. It's in that district.

Speaker Change #117: A real benefit of this extension beyond 2041 is the resource is much larger than what we'll mine I'm between you know toward late twenties like 20, Twenty's and in 2041 so.

Speaker Change #117: We'll have you know we did the economics and the economics paid at you know it gets a life that ends in 2041, but there's a lot of resource beyond that that'll come in to the fold them with with an extension. So it's it's it's a it's a great.

Richard Adkerson: So it's a great extension of Glassberg. It's in that district where leveraging everything that we've learned from developing the Glassberg Block K and DPMOZ. And prior to that, our other, our bodies, but it's basically the same kind of development that we've had in the past. And we're using all the new learnings and technologies that have benefited us in the development of Glassberg Block K. So we're, we're in a good place there and feel good about our execution of this project over the next several years. And leading into 2030, where we'll have good production coming from this operation.

Speaker Change #117: Extension of of of Grasberg, It's in that district, we're leveraging everything that we've learned from developing the Grasberg block cave and deep MLG and prior to that of our other ore bodies, but it. It's basically the same kind of development that we've had in the past and we're using all of the new.

Kathleen Lynne Quirk: We're leveraging everything that we've learned from developing the Grasberg Block Cave and DeepMLZ, and prior to that, our other ore bodies. But it's basically the same kind of development that we've had in the past, and we're using all the new learnings and technologies that have benefited us in the development of Grasberg Block Cave. So we're in a good place there and feel good about our execution of this project over the last few years. Our next question will come from the line of Brian MacArthur with Raymond James. Please go ahead.

Speaker Change #117: New learnings in technologies that that have benefited us in the development of <unk>.

Speaker Change #117: Grasberg block cave, so where where we're in a good place there and and and feel good about our execution of this project over the next several years leading into 2030, we will have we'll have good good production coming from this operation.

Speaker Change #117: Yeah.

Brian MacArthur: Our next question will come from the line of Brian MacArthur with Raymond James. Please go ahead. Brian.

Speaker Change #118: Our next question will come from the line of Brian Macarthur with Raymond James. Please go ahead.

Kathleen Lynne Quirk: I just want to go back to the 10% on the IUPK. I just want to confirm that, A, until 2041, the, You maintain your 48.76%. I think that's what I understand, and then it's 10% thereafter. But then two, on the capital. Put it all in for 2041 and then get it back? Or is this going to be more like, for a while, like Rio, where, as you develop reserves and their ownership goes up, you... We're going to share the cash flow in different ratios, like we saw with the Rio Tinco stuff historically.

Hey, Brian Good morning, Rick Good morning, Richard and Kathleen Thanks for taking my question.

Brian Macarthur: Good morning, Richard Kathleen. Thanks for taking my question. I just want to go back to the 10% on the IUPK. I just want to confirm A until 2041. The current run raise what's in our numbers.

Speaker Change #119: Multiple back to the 10%.

Speaker Change #120: T K I just wanted to confirm a till 2041.

Speaker Change #121: You maintained your 48, 76% I think that what I understand that in a 10% thereafter within two on the hospital do.

Speaker Change #122: You put it all in 2041, and then get it back or is this going to be more like for a while or real wear.

Speaker Change #123: Reserves in their ownership.

Speaker Change #124: That you.

Speaker Change #125: Share of the top.

Speaker Change #126: Different ratios like we saw that said with the real simple stuff hits or I'm, just trying to figure out exactly.

Kathleen Lynne Quirk: I'm just trying to figure out exactly how the cash flow is going to work on this. Yeah, well, as part of the application to the government for the extension, we will submit an agreement to make the transaction, and that agreement is currently being discussed. What's been discussed over the last couple of years with respect to this or the last year plus? The way it will work is the 10% share transfer will take place in 2041, and the price paid at that point will be a reimbursement of the capital that was incurred between now and 2041 that benefits the period beyond. So, to an extent, it's not like the Rio Tinto deal at all.

Speaker Change #127: Like how what was it going to work on that yeah, well as part of the application and to the government for the extension we will submit an agreement.

Speaker Change #128: It's just to make the transaction and that that agreement is currently being being discussed with with mind I D.

Speaker Change #128: The what what's been discussed in.

Speaker Change #128: Over the last couple of years with respect to this or last year plus.

Speaker Change #128: Is the way it will work is.

Speaker Change #128: The 10%.

Speaker Change #128: Well share transfer will take place in 2041, and the price paid at that point will be.

Speaker Change #128: Reimbursement.

Speaker Change #128: Of the capital.

Speaker Change #128: That was incurred between now and 2041 that benefit the peer that benefits the period beyond 2041, so to the extent, it's not like the Rio Tinto deal at all it is is basically.

Kathleen Lynne Quirk: It's basically just a reimbursement at book value of what's there to benefit the period beyond 2041. So, essentially, look at the book value at the end of 2041 and that pro rata percentage. 10% of our shares will be transferred, and that will be the purchase price, or the reimbursement of shares.

Speaker Change #128: It's just a.

Speaker Change #128: Members meant at book value of what what's there to benefit the period beyond 2041, So essentially look at the book value at the end of 2041.

Speaker Change #128: And and and that that pro rata percentage.

Speaker Change #129: You know, 10% of our shares will well will be transferred them and that will be that the purchase price will be the reimbursement of capital.

Kathleen Lynne Quirk: So, the cash flows between now and 2041 won't, you know, won't be impacted. And Brian, that transaction occurs after 2041. It's not like the Rio deal where the transaction occurred in the mid-1990s, and it was just a question of how it was applied.

Speaker Change #129: The cash flows between now and 2041 won't won't won't be impacted by it.

Speaker Change #129: Hey, Brian that that transaction occurs.

Brian MacArthur: After 2041, it's not like the Rio deal, where the transaction occurred in the mid nineties.

Brian: Just a question of how it was applied.

Kathleen Lynne Quirk: So, you know, if, for whatever reason, it doesn't occur, then our interest will stay the same. It's anticipated the government would act to acquire that 10%, and that would be the agreement on the cost reimbursement we get triggered when that transaction occurs. Right. Our final question will come from the line of Bill Peterson with J.P. Morgan. Please go ahead.

Brian: So.

Speaker Change #132: If for whatever reason it doesn't occur then I guess just to stay the same as anticipated the government would act required at 10% and that would be the agreement on the cost reimbursement, we get triggered when that transaction occurs.

Brian: Right.

Brian: Okay.

Brian: Our final question will come from the line of Bill Peterson with Jpmorgan. Please go ahead.

Kathleen Lynne Quirk: Hi Kathleen and team. Thanks for taking the question. It's nice to see the doubling of the leaching in first half 24 relative to the first half last year.

William Chapman Peterson: Yeah, Hi, Kathleen and team. Thanks for taking my question nice to see the doubling of the leaching in first half 'twenty four relative to the first half last year looking ahead, how should we think about the trajectory from here do you expect to be at a some more I'll put in the recent quarters with 5 million pounds or so.

Kathleen Lynne Quirk: Looking ahead, how should we think about the trajectory from here? Do you expect to be at a similar output as the recent quarter, 55 million pounds, or some of the productivity items you highlighted, such as using technology? You see further upside in the back half of the year and into 2025 as you progress to the 300 to 400 million pounds per year target employment. The current run rate is what's in our numbers.

Speaker Change #136: The more productivity the items you highlighted such as using technology.

Speaker Change #138: Further upside in the back half of the year and into 2025 as you progressed through the 300 to 400 million pounds per year target in 2026. The current run rate is what's in our numbers.

Kathleen Lynne Quirk: We do see opportunities to build on it through these initiatives that we're pursuing to move up to this three to four hundred million pound per annum range. And so it'll come over time; it's not going to come in all at once. And so as we go through this year and next year, we'll probably, you know, have more than what we've currently got in our plans. But we haven't put forward, we're still... Deploying these tactics, we feel very confident about them, but we haven't put those into our numbers at this stage, and that'll be something that we'll continue to update as we go forward.

Kathleen Quirk: We do see opportunities to build on it through these initiatives that we're pursuing, to move up to this 3 to 400 million pound per annum range, and so it'll come over time; it's not going to come in all at once. And so, as we go through this year and next year, we'll probably have more than what we've currently got in our plans, but we haven't put forward; we're still deploying these tactics. We feel very confident about them, but we haven't put those into our numbers at this stage, and that'll be something that we'll continue to update as we go forward.

Speaker Change #137: We do see opportunities.

Speaker Change #134: Two to build on it.

Speaker Change #133: These initiatives that we're pursuing.

Speaker Change #133: To move up to the three to 400 million.

Speaker Change #133: Pound per annum range and so it it'll come over time, it's not going to come in all at once.

Speaker Change #133: And so as we go through this year and next year, we'll probably have more than than what we've currently got in our plans, but we haven't we haven't put forward we were still.

Deploying these tactics, we feel very confident about them, but we haven't put those into our numbers at this stage at the end and that'll be something that we'll continue to update as we go forward.

Thank you.

Unknown Attendee: Thank you.

David Joint: With that, I'll turn the call back over to management for any closing remarks. Thank you, Regina, and thank you for everyone for your interest and participation. If you have any follow-up, feel free to contact David.

Operator: With that, I'll turn the call back over to management for any closing remarks. Thank you, Regina, and thank you, everyone, for your interest and participation. And if you have any follow-ups, feel free to contact David. Ladies and gentlemen, back to the point. Ladies and gentlemen, that concludes our call for today. Thank you for your participation, and you may now disconnect.

Speaker Change #133: With that I'll turn the call back over to management for any closing remarks. Thank you Regina and thank you everyone for your interest and participation and if you have any follow ups feel free to to contact David.

Unknown Attendee: Ladies and gentlemen, that concludes.

Speaker Change #139: Ladies and gentlemen that concludes.

Unknown Attendee: Ladies and gentlemen, that concludes our call for today. Thank you for your participation, and you may now disconnect.

Speaker Change #139: Ladies and gentlemen that concludes our call for today. Thank you for your participation and you may now disconnect.

Speaker Change #139: Yeah.

Speaker Change #139: Okay.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah.

Speaker Change #139: Okay.