Q2 2025 Freeport-McMoran Inc Earnings Call

Operator: Welcome to the Freeport-McMoRan 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.

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport macaran 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 1 on your touchtone phone, if you require assistance during the conference

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

Speaker Change: Please press star zero. I will now like to turn the conference over to Mr. David joint, vice president investor relations. Please go ahead sir.

David Joint: Good morning, everyone. And welcome to the Freeport conference call.

David Joint: Earlier this morning, FCX reported its second quarter 2025 operating and financial results. A copy of today's release with supplemental schedules and slides is available on our website at fcx.com. Today's conference call is being broadcast live on the internet, and anyone may listen to the call by accessing our website homepage and clicking on the webcast link. In addition to analyst 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.

Speaker Change: Good morning everyone and welcome to the Freeport conference call.

Speaker Change: Earlier this morning FCX reported, its second quarter 2025, operating and financial results.

Speaker Change: A copy of today's release was supplemental, schedules and slides is available on our website, fcx.com.

Speaker Change: Today's conference call is being broadcast live on the internet. And anyone May listen to The Call by accessing our website homepage, and clicking on the web class link

Speaker Change: in addition, to analysts investors,

David Joint: 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-GAP measures and forward-looking statements, and actual results may differ materially. Please refer to the cautionary language included in our press release and slides and to the risk factors described in our SEC filings, all of which are available on our website.

Speaker Change: The financial press has been invited to listen to today's call our replay of the webcast will be available on our website later today.

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 in forward-looking statements and actual results May differ materially.

David Joint: Also on the call with me today are Richard Adkerson, Chairman of the Board, Kathleen Quirk, President and Chief Executive Officer, Maree Robertson, Executive Vice President and CFO, and other senior members of our management team.

Speaker Change: please refer to the cautionary language included in our press release, and slides into the risk factors described in our SEC filings, all of which are available on our website,

Richard Adkerson: Richard will make some opening remarks, Kathleen and Maree will review our slide materials, and then we'll open up the call for questions. Richard?

Speaker Change: Also, in the call with me today, are Richard A chairman of the board Kathleen, Kirk president, and chief executive officer Marie, Robertson Executive, Vice President and CFO and other senior members of our management team.

Speaker Change: Richard will make some opening remarks Kathleen and Marie will review our slide materials and then we'll open up the call for questions. Richard

Richard Adkerson: Thank you, David, and thank you all for joining us. Copper is currently in the spotlight, of course. COMEX prices are hitting all-time highs. LME prices are strong. Uses are growing. Electricity means copper, and the world is increasingly electric. This results in high demand, and the industry continues to be challenged to find the supplies to meet this demand and future demand. Governments are focused on critical minerals, including copper. Our company is strongly positioned. One-third of our copper is in the U.S., roughly one-third in Indonesia, and one-third in Peru and Chile. We are the dominant producer in the U.S., producing over 70% of the country's refined copper.

Thank you, David and thank you all for joining us.

Speaker Change: Copper is currently in the spotlight. Of course, comments. Prices are heading all-time highs. Lame, prices are strong. Uses are growing. Electricity means copper and the world is increasingly electric this results in high demand and the industry continues to be challenged to find the supplies to meet this demand in future demand.

Speaker Change: Governments are focused on on, on critical minerals, including copper.

Speaker Change: 1/3 in Indonesia and 1/3 in Peru in Chile.

Richard Adkerson: We're fully integrated. We have substantial organic growth to U.S. and we're committed to that growth.

Speaker Change: We are the dominant producer in the US producing over 70% of the of the of the country's uh refined copper. We're fully integrated.

Richard Adkerson: Freeport committed to its strategy to copper over 20 years ago. Our tagline has been foremost in copper, and that's what we're striving to be. The start-up of the Indonesian smelter is a big accomplishment. Congratulations to Team Freeport. We will now be effectively fully integrated producer globally. We're pleased to see the trade agreement between Indonesia and the United States.

We have substantial organic growth growth to us and we're committed to that growth.

Speaker Change: Commit Freeport committed to its strategy to Copper over 20 years ago. Our tagline has been foremost in Copper and that's what we're striving to be.

Speaker Change: The startup of the Indonesian spell. Smelter is a big accomplishment congratulations to team 34, we will now be effectively fully integrated producer globally.

Richard Adkerson: Productive Discussions with President Perveau and President Trump We convey to the Indonesian leaders negotiating the deal to note that Freeport, a widely held public company in the U.S. with almost a 60-year history of operating in Indonesia, is the operator of the world's second largest copper mine. Located there. Grassberg Operations and District is our cornerstone asset. Second largest copper mine in the world, in this most recent quarter we had a net credit for operating costs of a dollar a pound. This asset has enabled us to create the modern Freeport. With the smelter nearing completion, we are progressing our discussions with the Indonesian government about extending our operating rights beyond 2041.

Speaker Change: We're pleased to see the trade agreement between the Indonesian and the United States.

Speaker Change: Productive discussions with President Provo and president Trump.

We convey to the Indonesian leaders. Negotiating, the deal to note that Freeport are widely held public company in the US.

Speaker Change: With almost a 60 year history of operating in Indonesia.

Speaker Change: Is the operator of the world's second largest copper mine.

Speaker Change: Located there.

Grasberg operations, and district is our Cornerstone asset.

Speaker Change: Second largest, copper mine in the world and this most recent quarter, we had a net credit for operating costs of a dollar dollar a pound.

Speaker Change: This asset has enabled us to create the modern free port.

Richard Adkerson: Doing so would create great value for FCX shareholders, but it also would be very positive for all stakeholders in the operation.

Kathleen Quirk: With those comments, I'll turn the call over to Kathleen and Maree to report on our quarter and our outlook. Great. Thank you, Richard. And I'll cover the highlights of the second quarter starting on page three. We generated strong margins in cash flows during the quarter and achieved significant milestones on several important initiatives. Our sales of copper and gold were better than forecast, and net unit cash production costs during the quarter of $1.13 per pound were significantly improved from what we guided to and from last year's second quarter. With an average quarter copper realization of over $4.50 per pound, which was about $0.20 per pound above the international benchmark pricing, we generated quarterly EBITDA of $3.2 billion and operating cash flows of $2.2 billion.

Speaker Change: With a smelter nearing, completion. We are progressing our discussions with the Indonesian government about extending our operating rights Beyond 2041 doing. So we create great value for FCX shareholders, but it also would be very positive for all stakeholders in the operation.

Speaker Change: But those comments, I'll turn the call over to Kathleen and Marie and and to, to report on our quarter and our Outlook

Speaker Change: Great. Thank you, Richard. And I'll call.

Kathleen: Generated strong, margins, and cash flows, during the quarter and Achieve significant Milestones on several important initiatives.

Kathleen: Our sales of copper and gold will better than the past and net unit cash production costs. During the quarter of a dollar 13 per pound for significantly, improved from what we got it to. And from last year's, second quarter,

Kathleen Quirk: Our sales volumes exceeded production as we were successful in reducing inventories in Indonesia, both at the mine site and in our newly commissioned precious metals refinery, which performed well during the second quarter. As we look at the balance of the year, we're well positioned for continued strong financial performance. Our sales of copper in the second half are expected to be nearly 10% higher than our first half volumes, and gold sales, after taking into account revisions to our Grasberg gold production, which we'll talk more about, are expected to be similar to the first half level. The current premium on our U.S.

Kathleen: With an average quarter copper realization of over 450 per pound, which was about 20 cents per pound above the international Benchmark pricing. We generated quarterly Evita of 3.2 billion and operating cash flows of 2.2 billion

Kathleen: Our sales volumes exceeded production as we were successful in reducing inventories in Indonesia. Both at the mine site and our new. And in our newly commissioned precious metals Refinery, which performed well during the second quarter,

Kathleen: As we look at the balance of the Year, we're well positioned for continued, strong financial performance.

Kathleen: Our sales of copper and the second half are expected to be nearly 10% higher than our first half volumes, and gold sales after taking into account, revisions to our grasper gold production, which we'll talk more about are expected to be similar to the first half levels.

Kathleen Quirk: copper sales, which recently tripled from second quarter levels, adds additional margins and cash flows, and as we look ahead to 2026 and 2027, volume growth and lower costs set us up nicely to expand margins and cash flows as we go forward.

Kathleen: The current premium on our us copper sales which recently tripled from second quarter levels as additional margins and cash flows. And as we look ahead to 2026 and 2027 volume growth and lower costs.

Kathleen Quirk: We achieved a major milestone in the quarter with the start-up of our new copper smelter in Indonesia, a project we've been working on for the past 10 years. We started up about a month ahead of schedule and have progressed startup activities to the stage of producing our first cathodes, which we expect by the end of this month. We remain focused on ramping up to reach design capacity by the end of the year.

Kathleen: Set us up nicely to expand, margins and cash flows as we go forward.

Kathleen: We achieved a major milestone in the quarter with the startup of our new copper smelter in Indonesia.

Kathleen: Project we've been working on for uh, the past 10 years.

Kathleen: We started up about a month ahead of schedule and have progressed startup activities, to the stage of producing our first cathodes, which we expect by the end of this month.

Kathleen Quirk: Another real exciting development during the quarter was the start of a field trial at our U.S. Marenci Mine using an internally developed leach additive. Our team of scientists have been working on this for some time and we are progressing work on additional options which are showing very impressive lab results. There's more work to do, but we're making real progress. Identifying the right additive combined with our precision leaching operating practices will be a big step toward reaching our objective of producing 800 million pounds per annum from this initiative. We continue to advance optionality in our organic growth pipeline, and we're well positioned with our significant resources, an experienced team, and our strong financial position.

Kathleen: We remain focused on ramping up to reach design capacity by the end of the year.

Kathleen: Another real exciting development during the quarter, was the start of a field trial.

Kathleen: Scientists have been working on this for some time and we are progressing work on additional options which are showing very impressive lab results. There's more work to do but we're making real progress.

Kathleen: Identifying the right additive combined with our Precision leeching operating practices will be a big step toward reaching our objective of producing 800 million pounds per Anum from this initiative.

Kathleen Quirk: We purchased 1.5 million shares of stock during the second quarter, bringing our first-half stock purchases to 2.9 million shares at an average cost of $36.41 per share. And we continue to target 50% of excess cash flow for shareholder returns in line with our financial policy.

Kathleen: We continue to advance optionality in our organic growth Pipeline and what we're well, positioned with our significant resources and experience team and our strong financial position.

Kathleen Quirk: Turning the next slide on four is a summary of our 2025 priorities. We've covered these on previous calls, and these are the areas that are defining our everyday pursuit of value creation. First Execution, Mastering the Basics, and Making Every Day Count are key objectives. We're focused on delivering our plans safely and efficiently and driving our costs lower, particularly in the U.S. Scaling the leach opportunity is a major value driver for Freeport. We continue to target a 40% increase in our run rate to achieve 300 million pounds by the end of the year on our path to 800 million pounds per annum.

Kathleen: We purchased 1 and a half million shares of stock. During the second quarter, bringing our first half stock purchases to 2.9 Million shares at an average cost of $66.41 per share. And we continue to Target, 50% of excess cash flow for shareholder returns in line with our financial policy.

Kathleen: Turn in the next slide on 4. It, it's a summary of our 2025 priorities. We've covered these on previous calls and these are the areas that are defining our everyday pursuit of value creation.

Kathleen: First execution, mastering the basics and making everyday count are key objectives.

Focused on delivering our plan safely, and efficiently and driving, our costs lower, particularly in the US.

Kathleen Quirk: Delivering the smelter, a safe and efficient ramp-up of the PTFI smelter, is strategically important. It will de-risk our plans and position us for extension of our long-term operating rights in Indonesia. With the early start-up, we're well on our way. We posted a video this morning of the progress on our website, and we hope you'll have the chance to review it. We're very proud of what our team is accomplishing there. Innovation is an increasingly important value driver for our business. Our operating teams are embracing technologies and new tools to enable better productivity and cost performance. And we'll continue to build optionality in our growth portfolio.

Kathleen: Scaling the leech opportunities, a major value driver for free Ford, we continue to Target a 40% increase in our run rate to Achieve 300 million pounds by the end of the year, on our path to 800 million pounds per hour.

Kathleen: The delivering the smell to a safe and ramp up of the ptfi smelter is strategically important. It'll read de-risk, our plans and position us for extension of our long-term operating rights and Indonesia.

Kathleen: With the early startup, we're well on our way.

Kathleen: We posted a video this morning of the progress on our on our website and we hope you'll have the chance to review it. We're very proud of what our team is. Accomplishing, their

Kathleen: Innovation is an increasingly important value driver for our business. Our operating teams are embracing Technologies and new tools to enable better productivity and cost performance.

Kathleen Quirk: We have three major project opportunities being advanced in the Americas, which we'll talk more about.

Kathleen Quirk: Turning to copper markets on slide five. Copper has been actively covered in the media recently with widespread recognition of the rising strategic importance of this essential metal and a broad use of application. Market fundamentals remain positive, underpinned by copper's increasing use in the global economy and as an important driver of electrification, global energy requirements, and defense systems. Copper prices averaged $4.32 on the London Metals Exchange during the quarter and $4.72 on the U.S. COMEX Exchange. Following the July 8th U.S. tariff announcement, U.S. prices rose significantly. While tariff policies have dominated headlines and resulted in rising inventories in the U.S., global exchange inventories remain at low levels, particularly in relation to consumption.

Kathleen: And we'll continue to build optionality in our growth portfolio. We have 3 major project opportunities being advanced in the Americas which we'll talk more about

Kathleen: Starting a copper markets on. Slide 5.

Uh, copper has been actively covered in the media. Recently with widespread recognition of the rising strategic importance of this essential metal, in a broad use of applications,

Kathleen: Market fundamentals, remain positive underpinned. By, coppers increasing the use in the global economy and as an important driver of electrification global energy requirements, and defense systems,

Kathleen: copper prices, averaged 432 on the London Metals exchange during the quarter, and $4.72 cents on the uh us Comax Exchange

Kathleen: Following the July 8th us tariff. Announcement us Prices, rose significantly.

Kathleen Quirk: Copper demand globally continues to benefit from the secular trends and major new investments in AI technology, power infrastructure, decarbonization, and transportation. In the U.S., demand continues to be supported by these secular drivers, and we are seeing improving trends in Europe. China continues to be a major driver of copper demand, and India represents an important growth market in the future. As we've talked about in the past, the fundamentals of the copper markets are highly attractive, with the outlook for demand growth to outpace available supplies as we go forward. Here at Freeport, we're in a great position to increase volumes in the coming years to supply a world with growing requirements.

While tariff policies have dominated headlines and resulted in Rising inventories in the US, Global exchange inventories remain at low levels, particularly in relation to consumption trends.

Kathleen: Copper demand globally continues to benefit from the secular Trends and major new investments. In AI Technology, power infrastructure, decarbonization and transportation.

Kathleen: In the US, demand continues to be supported by the secular drivers. And we are seeing improving Trends in Europe.

Kathleen: China continues to be a major driver of copper demand in. India represents an important growth Market in the future.

Kathleen: As we've talked about in the past, the fundamentals of the copper markets are highly attractive with the outlook for demand growth to outpace available supplies as we go forward.

Speaker Change: Here at Freeport when a great physician to increase volumes, in the coming years to supply a world with growing growing requirements.

Kathleen Quirk: Moving to slide 6, we talk about the regional premiums and the market differentials between the U.S. pricing benchmarks and international benchmarks. For background, the reference price for Freeport's copper sales contracts is based on geography. Our international sales are based on the London Metals Exchange price, and our U.S. sales are based on the U.S. COMEX reference price. These two benchmarks have been closely correlated in the past, but as you can see, a differential emerged earlier this year after the U.S. opened the Section 232 investigation. And the differential widened significantly earlier in July following the U.S. announcement of a 50% tariff on copper imports with an expected implementation date on August 1st.

Speaker Change: Moving the slide 6. We talked about, uh, the regional premiums and the market differentials between the US pricing benchmarks and international benchmarks.

For background the reference price for freeport's. Copper sales contracts is based on geography.

Our International sales are based on the London Metals Exchange price, and our Us sales are based on the US comx reference price.

Speaker Change: but as you can see a differential emerged earlier this year, after the US opened, the section 232 investigation,

Kathleen Quirk: We're still waiting on additional details on implementation of the tariff announcement. The U.S. currently imports approximately half of its copper cathode requirements and the current domestic supply of cathodes, the rest of it, are majority produced by Freeport. As indicated in the charts, as of yesterday's close, the U.S. premium approximates $1.25 per pound, or about 28% above the LME price. This implies an approximate $1.7 billion annual financial benefit on Freeport's U.S. sales. Longer range, the differential will be determined by market factors, including how the tariff structure is applied to various copper products, available domestic supplies, and requirements for imported copper and other factors.

Speaker Change: And the differential wide and significantly earlier in July following, the US announcement of a 50% tariff on copper. Imports. Was an expected, implementation date, on August 1st, we're still waiting on additional details on implementation of the uh, of the of the Tariff announcement.

The US currently Imports approximately half of its copper cathode requirements and the current de domestic supply of kathos, the rest of it are majority produced by Freeport.

Speaker Change: As it indicated in the charts. As of yesterday's close, the US premium approximates. A $1.25 per pound or about 28% of the lme price.

Speaker Change: This implies an approximate 1.7 billion annual Financial benefit on free ports, Us sales.

Kathleen Quirk: We're actively working to boost domestic supplies of copper with a special emphasis on growing our refined production in a cost-effective manner through our Innovative Leach Initiative, and we're focused on supporting the growing requirement for our U.S. customer base. Freeport is an important American copper producer and is by far the largest contributor to the U.S. copper market. with an established and successful franchise dating to the late 1800s. As America's copper champion, we appreciate the administration's recognition of copper as a critical mineral and the efforts underway by the U.S. government to boost domestic production. Our operations in the U.S.

Speaker Change: Longer range to differential will be determined by market factors. Including how the Tariff structure is applied to various Copper products available, domestic supplies and requirements for imported copper and other factors.

Speaker Change: We're actively working to boost domestic supplies of copper with a special emphasis on growing. Our refined production in a cost-effective manner through our Innovative leech initiative and we're focused on supporting the growing requirement for our Us customer base.

Report is an important American copper producer and is by far the largest contributor to the US copper Market.

Speaker Change: With an established and successful franchise dating to the late 1800s.

As America's copper Champion, we appreciate the administration's recognition of copper as a critical mineral and the efforts underway by the US government to boost domestic production.

Kathleen Quirk: supply approximately 70% of the refined copper produced here. Our operations in the U.S. are fully integrated with mines and smelting and refining facilities and innovative leach processes that efficiently produce refined cathodes. About 60% of our U.S. production is sourced through leaching processes and the balance through our smelter. We employ a large workforce in the U.S., and importantly, we've earned the trust of communities in the Southwest U.S. where we operate and with our U.S. Copper customers.

Speaker Change: Our operations in the US Supply approximately, 70% of the refined copper produced here.

Speaker Change: Our operations in the US are fully integrated with mines and smelting and refining facilities and Innovative leech, processes that efficiently, produce refined cathode.

About 60% of our us production is sourced through leeching processes and a balanced through our smelter.

Speaker Change: We employ a large Workforce in the US and importantly, we've earned the trust of communities and the Southwest us.

Speaker Change: where we operate and with our us copper customers,

Kathleen Quirk: In talking about our global refined metal on slide 8, Freeport is a significant producer. With the completion of our new smelter in Indonesia, Freeport will essentially be fully integrated globally with internal processing facilities for its mine production. This is important because countries are becoming more and more focused on critical mineral supply and resilience, national security issues, and global trade. Freeport's positioning as a major producer of refined copper is of strategic significance for the long term. As indicated, we produce a substantial amount of refined copper from leach processing, which does not require a smelter process, and we're going to continue to pursue innovative opportunities to add refined copper on a cost-effective basis.

Speaker Change: in in talking about our Global refined metal on slide 8 report is a significant producer

with the completion of our new smelter in Indonesia report will essentially be fully integrated globally with internal processing facilities for its mine production.

Speaker Change: This is important because countries are becoming more and more focused on critical mineral Supply.

Speaker Change: Chain resilience National Security issues and global trade.

Speaker Change: Reports positioning as a major producer of refined copper is a strategic significance for the long term.

Speaker Change: As indicated, we produce a substantial amount of refined, Copper from Leech processing which does not require a smelter process.

Kathleen Quirk: Moving to operations on slide 9, we'll talk about the operating highlights by geographic region, starting in the U.S., where we continue to drive operating disciplines to enhance efficiencies and improve costs and margins. Making progress as indicated by the improved performance compared with a year ago quarter. With several initiatives underway, there's more opportunity ahead. Our operating teams are benefiting from new tools and data analytics to drive value. We continue to rebuild skills within our workforce to reduce reliance on more costly contractors. As we look forward, we expect production in the U.S. to increase in 2025 and 2026 compared with 2024 levels.

And we're going to continue to pursue Innovative opportunities to add refined copper on a cost-effective basis.

Speaker Change: Moving to uh, operations on slide 9. Uh, we'll talk about the operating highlights by geographic region, starting in the us where we continue to drive. Operating diff disciplines to enhance efficiencies and improve costs and margins.

Speaker Change: making progress as indicated by the improved performance compared with a year ago quarter

Speaker Change: Several initiatives underway. There's more opportunity ahead.

Speaker Change: Our operating teams are benefiting from new tools and data analytics to drive value. We continue to rebuild skills within our Workforce to reduce Reliance on more costly contractors.

Kathleen Quirk: Absent changes in commodity-based input costs, we're talking unit costs to trend to the $2.50 per pound range in 2027. The autonomous haul truck conversion at our Baghdad mine in the U.S. will allow us to test this potential of applying this technology for use at other locations. At Baghdad, we have half of the autonomous trucks in service and expect to complete the balance over the next few months. We have several initiatives in progress to achieve further scaling in our innovative leach program. This is a high priority. Our teams are now much better equipped with new data and analytic tools, expanded areas under leach, and precision leaching processes to achieve higher recoveries in material previously considered waste.

As we look forward, we expect production in the US to increase in 2025 and 2026 compared with 2024 levels.

Speaker Change: Absent changes in commodity based input costs. We're talking unit costs to Trend to the $2.50 per pound range in 2027

The autonomous Haul truck conversion at our Bagdad mine in the US will allow us to test this potential of applying this uh, technology to for use at other locations.

Speaker Change: At Baghdad, we have half of the autonomous trucks and service and expect to complete the balance over the next few months.

Kathleen Quirk: Achieving our targeted run rate to 300 million pounds per annum will benefit 2026 production. We are planning projects to use heat in our injection process to further enhance recoveries, and we're advancing internally developed leach additives to provide additional volumes toward our ultimate target of 800 million pounds per annum. As I mentioned, a field trial is underway at Morenci with our first internal generated additive, and we've recently identified a potential second additive with initial lab testing indicating superior performance compared with anything we've seen to date. In addition, we're advancing new technology and automation in our basic mining processes to optimize performance.

Speaker Change: We have several initiatives and progress to achieve further scaling in our Innovative leech program. This is a high priority, our teams are now much better equipped with new data and analytic tools expanded areas under leech and precision, leashing processes to achieve higher recovery and material previously, considered waste

Speaker Change: Achieving our targeted run rate to 300 million pounds per Anam will benefit 2026 production.

Speaker Change: We are planting projects to use heat in our injection process to further enhance. Recoveries

Speaker Change: and we're advancing internally developed leech, additives.

Speaker Change: To provide additional volumes to toward our ultimate Target of 800 million pounds per Anam. As I mentioned, a field trial is underway at Morenci with our first, internal generated additive and we've recently identified, uh, potential second additive with initial lab testing. Indicating Superior performance, compared with anything we've seen today.

Kathleen Quirk: Our work to date indicates a significant opportunity for value creation through meaningful cost reduction and reserve expansion within our existing operations. will also continue to advocate for U.S. legislation to recognize copper as formally as a critical mineral and eligibility for incentives to promote domestic production.

Speaker Change: In addition, we're advancing new technology and Automation and our basic mining processes to optimize performance.

Speaker Change: I work today at indicates a significant opportunity for Value creation through meaningful cost, reduction, and Reserve expansion within our existing operations.

Kathleen Quirk: Moving to South America, the team at Cerro Verde Operation posted another solid quarter with volumes and costs in line with our expectations. As anticipated, volumes at Cerro Verde were below the year-ago quarter because of lower ore grades. At Alabra, we have advanced plans to test heated raffinate injections in our leach stockpile there expected in 2026, and that is targeted to increase copper recovery and metal volume. We continue to plan for a major expansion at Alhabra, which would capitalize on the large resource we have there and bring substantial scale and operating efficiencies to the mine. In Indonesia, during the second quarter, copper and gold sales were boosted significantly by a reduction in concentrate and in-process inventory following the mid-March approval of our export permit and good performance at the newly commissioned Precious Metals Refinery, which processed all of the anode slimes produced at PT Smelting during the Milling rates improved in the second quarter compared with first quarter levels, and that reflected a restart of our SAG-3 mill in the second quarter.

Speaker Change: We're also continue to advocate for us legislation to recognize copper as formally as of critical mineral and eligibility for incentives to promote domestic production.

Speaker Change: Moving to South America, the team at our CDI operation posted, another solid quarter was volumes and costs in line with our expectations.

Speaker Change: As anticipated volumes at server already were below the year ago quarter because of lower lower or grades at aabra. We have advanced plans to test heated raffinate, injections in our leech, stockpile their expected in 2026, and that is targeted to increase copper recovery and and metal volumes.

Speaker Change: We continue to plan for a major expansion at aabra, which would capitalize on the large re resource. We have there and bring substantial scale and operating efficiencies to the mind,

Speaker Change: In Indonesia. During the second quarter, copper sales, copper and gold sales were boosted significantly, by a reduction in concentrate. And in process inventory, following the mid-march approval of our export permit and good performance at the newly, commissioned precious metals Refinery, which processed all of the

Speaker Change: Those Farms produced at PT smelting during the quarter.

Kathleen Quirk: In April, we commenced a large planned maintenance project on our SAG-2 mill, which is expected to be completed by the end of the third quarter. This will set us up for return to mill rates in the 220,000 ton per day range in the fourth quarter and beyond. Notably, during the second quarter, net unit cash costs at Grasberg were actually a net credit of 99 cents per pound. As indicated, the Smelter Startup in the second quarter was a meaningful accomplishment and we're working to ramp up in the balance of the year. We have revised our near-term outlook for gold to incorporate adjustments to our draw-point flow model in the Grasberg blockade.

Milling rates improved in the second quarter compared with first quarter levels and that reflected a restart of our sad 3 mil. In the second quarter in April, we commenced a large plan maintenance project on our sag 2 mil, which is expected to be completed by the end of the third quarter.

Speaker Change: This will set us up for return to Mill rates in the 220,000 ton per day range in the fourth quarter and Beyond.

Speaker Change: Notably during the second quarter netq unit cash cost at grasberg will actually a net credit of 99 cents per pound.

Speaker Change: As indicated, the smelter startup in the second quarter was a meaningful accomplishment and we're working to ramp up in the balance of the year.

Kathleen Quirk: This resulted in an approximate 15% reduction in expected 2025 gold production, but did not significantly impact long-range plans as indicated on the next slide. We provided some information on Grasper oil grades on slide 10. And for background, the Glassburg Block Cave is one of three currently producing block cave mines in the Glassburg District. This is the same ore body we mined from the surface for over 25 years prior to transitioning to underground mining in the 2020 time frame. For those of you who have followed us over time, you'll recall there are sections within the Grasberg ore body with significant grade variation, especially for gold.

Speaker Change: We have revised our near-term outlook for gold to incorporate adjustments to our draw Point flow model in the grasberg, block cave.

Speaker Change: This resulted in an approximate, 15% reduction in expected, 2025 gold production, but did not significantly impact long-range plans as indicated on the next slide.

We provided some information on grasberg, or grades on slide 10.

Speaker Change: And for background the grasberg. Block cave is 1 of 3 currently producing block cave, mines in the grasberg district.

Speaker Change: It's the same or body, we mine from the surface for over 25 years, prior to transitioning to underground, underground mining in the 2020 time frame.

those of you who have, uh, followed us over time,

Kathleen Quirk: This results in large swings and oil grades depending on where the material is coming from within the ore box. At the Grasberg block cave, it's a massive block cave. We extract ore from five production blocks. and have over 900 draw points currently producing within these five production blocks. We have a practice across the company of updating our forecast quarterly, taking into account all available information. For our block cave mines, we use industry-proven software to model cave flows and ore grades. And during the second quarter, we experienced lower grades for gold than our scheduling model estimated and undertook a process to review our ore grade model.

Speaker Change: Um, you'll recall, there are sections within the grasberg or body with significant grade variation, especially for gold.

Speaker Change: This results in large swings and gold grades, depending on where the material is coming from within the your body.

Speaker Change: At the grasberg Block cave is a massive block cave. We extract ore from 5 production blocks.

Speaker Change: Producing within the fee production blocks.

Speaker Change: We have a practice across the company of updating our forecast, quarterly taken into account all available information.

Kathleen Quirk: We recalibrated the model on a draw point by draw point basis to better reflect the timing of various soil grades flowing through the draw point. Importantly, the changes are timing-related and not expected to impact the ultimate recoveries over the life of the deposit. In looking at the updated model, we were able to replicate historical results with better precision than the prior Orgray distribution model. With mining, there are always learnings throughout the life of a mine, but the management systems and data tools we use today, particularly in our underground, are much improved from the historical open pit era.

Speaker Change: For our block cave Minds, we use industry proven software to model cave, flows, and or grades. And during the second quarter, we experience lower grades for gold than our scheduling model estimated and undertook a process to review our or grade models.

Speaker Change: We recalibrated the model uh on a draw Point by draw Point bases, to better reflect the timing of various or grades flowing through the draw points.

Speaker Change: Importantly, the changes are timing related and not expected to impact. The ultimate recovery is over the life of the deposit.

Speaker Change: Uh, in looking at the updated model, we were able to replicate historical results with better Precision than the prior or grade distribution model.

Kathleen Quirk: see from the revised multi-year production forecast that the impact is limited to 2025 gold production. Over the five-year period, the aggregate production of gold is close to our prior estimates and there was no significant impact on copper production. With the completion of major mill maintenance in 2025, we're set up to increase mill operating rates in the future. Also in our 2025 forecast, we've incorporated an increase in copper concentrate consumption at the new smelter in Indonesia because of the earlier than forecast startup. This results in more in-process inventory than previously forecast and as a timing item.

Speaker Change: Uh, with with mining, they're always learning throughout the life of a mine, but the management systems, and data tools. We use today, particularly in our underground are much improved from the historical open pit era.

Speaker Change: You can see from the revised multi-year production, forecasts of the impact is limited to 2025 gold production over the 5-year period. The actual, the aggregate production of gold is close to our prior estimates. And there was no significant impact on copper production with the completion of major Mill maintenance in 2025, were set up to increase Mill, operating rates in the future.

Kathleen Quirk: We want to point out that as we transition from an exporter of concentrate to a fully integrated producer in Indonesia, there will be timing differences between production and sales by quarter. The sale of concentrates, historically, were recognized immediately on loading of shifts at our mine site. And with the smelter, sales will be recognized after processing and sale of refined metal. So this is really a timing match between production and sales.

Speaker Change: Also, in our 2025 forecast, we've Incorporated an increase in Copper concentrate, consumption at the new smelter and Indonesia because of the earlier than forecast startup. This results in more in process, inventory than previously forecast, and as a timing of item,

Speaker Change: Uh we want to point out that as we transition from an exporter of concentrate to a fully integrated producer in Indonesia, there will be timing differences between production and sales by quarter.

Kathleen Quirk: As we look forward, and I'm moving now to our project pipeline, it's clear that additional copper supplies are required to support energy infrastructure, new technologies, and more advanced societies. We have an extensive copper resource position and a broad range of projects in various stages of development. These initiatives total 2.5 billion pounds of copper, which can be developed from Freeport's known resources in jurisdictions where we have established history and experience. Our projects in Indonesia also have the benefit of high gold content that go along with the copper. Because these projects are brownfield in nature, we benefit from leveraging existing infrastructure, our experienced workforces, and relationships with key stakeholders to move more quickly with less risk than a greenfield project.

Speaker Change: Uh, the sale of concentrates historically will recognize immediately on loading of shifts at our mind sight. And with the smelter sales will be recognized after processing and sale of refined metal. So this is really a, a timing match between production and sales.

Speaker Change: As we look forward and I'm moving now to our project pipeline. It's clear an additional copper supplies are required to support energy infrastructure, new technologies, and more advanced societies. We have an extension, extensive copper resource position, and a broad range of projects and various stages of development. These initial initiatives total 2 and 1.5 billion pounds of copper, which can be developed from freeport's, known resources in jurisdictions where we have established history and experience.

Speaker Change: Our projects in Indonesia also have the benefit of high gold content that go along with the copper.

Kathleen Quirk: Well, as we mentioned, we're also looking at innovation and really feel this can bring improvements to the capital intensity of developing new projects. In the U.S., the projects have the potential to increase production by over a billion pounds per annum, with a large portion of that coming from low-cost and low-capital-intensive incremental leach volume. In addition, we have an actionable expansion opportunity at our Baghdad mine and are also studying the potential to expand and double production in the Safford Lone Star District. In South America, we and our partner, Cadelco, are planning a major expansion at Alhambra through the addition of a new concentrator, which would provide 750 million pounds of incremental copper per annum.

Speaker Change: Because these projects are Brownfield in nature. We benefit from leveraging existing infrastructure. Our experience workforces and relationships with key stakeholders to move more quickly, with less risk than a green field project.

Speaker Change: where as as we mentioned, we're also looking at Innovation and really feel this can bring um, improvements to the capital intensity of developing new projects,

In the US, the projects have the potential to increase production by over a billion pounds per Anam with a large portion of that coming from low cost and low Capital intensive, incremental leech volume.

Speaker Change: In addition, we have an actionable expansion opportunity at our Bagdad mine and also studying the potential to expand and double production in the Safford Lone Star District.

Kathleen Quirk: We're completing our permit application. We expect to file that in early 2026. And we're encouraged by the Chilean government's initiatives to expedite the permitting process broadly in Chile. In Indonesia, our Kuching Liar development continues, and we expect to commence production by 2030. We're conducting additional exploration below our deep MLZ ore body and expect that, with an extension of our operating rights beyond 2041, we'll be set up for additional long-term development options in the highly attractive Grasberg District. We'll continue to be disciplined in our approach, targeting opportunities that enhance long-term value. And we've got some additional details on these projects covered on slide 26 of the reference material.

Speaker Change: In South America we and our partner codelco are playing a major expansion at Alaba through the addition of a new concentrator which would provide 750 million pounds of incremental copper piranha.

Speaker Change: We're completing our permanent application. We expect to file that in early 2026.

Speaker Change: And we're encouraged by the Chilean government's initiatives to expedite. The permitting process broadly in Chile.

Speaker Change: In Indonesia, our C coochin Lear development continues.

Speaker Change: And we expect to commence production by 2030.

Speaker Change: We'll continue to be disciplined in our approach targeting opportunities that enhance long-term Eva value and we've got some additional details on these projects.

Maree Robertson: Maree is going to cover our financial outlook on the next few slides, and then we'll open up the call for your questions.

Speaker Change: Covered on slide 26 of the reference materials.

Maree Robertson: Maree? Thanks, Kathleen. Just moving on to slide 12, we show our three-year outlook for sales volumes of copper, gold, and the lead. Our guidance for 2025 takes into account the Grasberg or Grade and the timing of production versus sales associated with the smelter startup. 2025 guidance for copper is around 1% below the prior forecast, with gold sales down around 7%. But as discussed, these changes are not expected to impact our long-range plan. and guidance for 2026 and 2027 remain consistent with our previous. and continued success in our leaching initiative would provide upside. We provide quarterly estimates on slide 23 of the reference material.

Speaker Change: Murray is going to cover our our um our financial outlook on the next few slides and then we'll open up the call for your questions Murray.

Murray: Thanks Kathleen.

Murray: Just moving on to slide 12, we Show Out 3 year outlook for sales volume of copper gold and the lead denim, our guidance for 2025 takes into account the grasberg or grade revision which Kathleen has already discussed and the timing of production versus sales associated with the smelter startup,

Murray: 2025 guidance for copper is around. 1% below the prior forecast with gold sales down around 17%.

For best discussed, these changes are not expected to impact our long-range plans and guidance for 2026 and 2027 remain consistent with our previous assessments.

Murray: And continued success in our leaking initiative would provide upside to these estimates.

Maree Robertson: As you can see, copper sales in the second half of the year are nearly 10% higher. Our current estimate, the net unit cost for the year 2025, using $3,300 for gold and $22 for moly, is approximately $1.55 per pound. about $0.05 per pound above the April estimate, principally reflecting the impact of lower gold volume. Partly offset by higher prices of gold. The current unit net cash cost estimate is better than our estimate going into the year of $1.60 per pound. We are continuing initiatives to drive costs lower as we go forward. The details of costs by region are presented on slide 22 in the RISC.

Murray: We provide quarterly estimates on slide. 23 of the reference material.

Murray: As you can see, copper sales in the second half of the year are nearly 10% higher than the first half.

Murray: Our current estimate the unit to net unit costs for the year 2025 using 3,300 for gold and 22 for Molly is approximately 1.55 per pound.

Murray: About 5 cents per pound above the April estimate principally, reflecting the impact of lower gold volumes partly offset by higher prices of gold and malignant.

Murray: The current unit. Net cash cost estimates is better than our estimates going into the year of $160 per pound.

Murray: We are continuing initiatives to drive costs lower, as we go forward.

Murray: The details of costs by region are presented on slide 22 in the reference materials.

Maree Robertson: Moving to slide 13. Putting together our projected volumes and cost estimates, we show modelled results for EBITDA and cash flow at various copper prices ranging from $4 to $5. These are model results using the average of 2026 and 2027 with current volume and cost estimates and holding gold flat at $3,300 per ounce and molybdenum flat at $22 per pound. Annual EBITDA would range from over $11.5 billion per annum at $4.00 copper to over $15.5 billion per annum at $5.00. with operating cash flows ranging from $8.5 billion per year at $4 to over $11.5 billion at $5.

Murray: Moving to slide 13, putting together, our projected volumes and cost estimates. We show modeled results for EBA and cash flow, at various copper prices ranging from $4 to $5 copper.

Murray: These are modal results using the average of 2026 and 2027 with current volume and cost estimates and holding gold flat at 3,300 per ounce and the lead to them flat at $22 per pound.

Murray: Annual, EBA d.

Murray: 11.5.

Murray: Copper.

Billion dollars perom at 5 dollar copper.

with operating cash flows, ranging from 8.5 billion per year at 4 dollars,

Maree Robertson: These estimates assume the US price is the same as the international benchmark. If we incorporate a 25% premium to our U.S. sales, which is similar to current levels, annual EBITDA would increase by approximately 10%, and operating cash flows would increase by approximately 15%. A 50% premium would increase EBITDA by over $20 billion. and Operating Cash Flows by almost 50%. We show sensitivities to various commodities on the right side of the slide. You will note we are highly leveraged to copper prices, with each $0.10 per pound change equating to approximately $425 million in annual EBITDA. We'll also benefit from improving gold prices with each $100 per ounce change in price approximating $150 million in annual EBITDA.

Murray: Over 11.5 billion at 5 dollars.

Murray: These estimates assume the US price is the same as the international Benchmark price.

Murray: If we incorporate a 25% premium to our Us sales, which is similar to current levels.

Murray: And you'll leave at De would increase by approximately 10% and operating cash flows would increase by approximately 15%.

Murray: A 50% premium would increase ebitda by over 20% and operating cash flows by almost 30%.

Murray: We show sensitivities to various Commodities on the right side of the slide.

Murray: You will know, we are highly leveraged to copper prices with each 10 cents per pound change. According to approximately 425 million in annual ebitda,

Maree Robertson: Moving on to slide 14, this shows our current forecast for capital expenditure in 2025 and 2026. Total capital expenditures over the two-year period are similar to our previous guidance, with some timing variances which has deferred approximately $100 million. from 2025 to 2020. The discretionary projects are expected to approximate $1.6 to $1.7 billion per year in 2025 and 2026. with roughly 50% related to the Kitchen in the Yard development and the LNG project at Grosvenor. The balance includes acceleration of tailings and other infrastructure to support the Baghdad expansion, the Atlantic Copper Circular Project, which is expected to be completed by mid-2020.

Murray: we'll also benefit from improving gold prices with each hundred dollar per ounce change in price, approximating dollars in annual ebitda,

Murray: Moving on to slide 14, this shows our current forecast for capital expenditure in 2025 and 2026.

Total Capital expenditures over the 2 year. Period. A similar to our previous Guidance with some timing variances, which has deferred approximately 100 million dollars of spend from 2025 to 2026.

Murray: The discretionary projects are expected to approximate 1.6 to 1.7 billion per year in 2025, and 2026 with roughly, 50% related to the coaching. They are development and the LNG project at grasberg.

Maree Robertson: The discretionary category reflects the capital investments we're making in new value-enhancing projects that under our financial policy are funded with the 50% of available cash that is not distributed. These projects, which are detailed on slide 31, will benefit our results in the future. We will continue to be disciplined in allocating capital to projects that enhance our position and generate attractive returns. This is consistent with our track record of efficient capital allocation and value driven approach.

Murray: And capitalized interest.

Murray: The discretionary category reflects the capital Investments, we're making in new valuing projects that under our financial policy are funded with the 50% of available cash. That is not distributed.

Murray: These projects which are detailed on site. 31 will benefit our results in the future.

We will continue to be disciplined in allocating Capital to projects that enhance our position and generate attractive returns.

Murray: if this is consistent with our track record of efficient Capital allocation and value-driven approach,

Maree Robertson: On slide 15, we reiterate the financial policy matters. Center on a Strong Balance Sheet, Cash Returns to Shareholders, and Investments in Value-Enhancing Our balance sheet is solid, with investment grade ratings, strong credit metrics and flexibility within our debt targets to execute on our project. We don't have any significant debt maturities until 2020. In addition to paying our first quarter base and variable dividend, we have repurchased $107 million of SCX common stock in the open market year-to-date. In total, we have distributed over $5 billion to shareholders through dividends and share purchases since adopting our financial policy of returning 50% of excess cash flow in 2021.

Murray: On slide 15. We reiterate the financial policy priorities centered on a strong balance sheet.

Murray: Cash returns to shareholders.

Murray: And investments in value enhancing projects.

Murray: Our balance sheet, solids with investment, grade ratings, strong credit metrics and flexibility within our debt targets to execute on our projects.

Murray: We don't have any significant debt maturities until 2027.

Murray: In addition to paying our first quarter base and variable dividend, we have repurchased 107 million of FCX, Common Stocks in the open market year to date.

Maree Robertson: And we have an attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders with the remaining 50%. We actively monitor current market conditions and carefully manage the timing of our projects to ensure our financial flexibility remains For more information visit www.fema.gov Our global team is focused on driving value in our business. Committed to strong execution of our plans, providing cash to invest in profitable growth and return cash to shareholders. In concluding today's presentation on slide 16, Freeport's large-scale, low-cost, Proven Producing Assets, Actionable Low-Risk Growth Options Experience and leadership in the global copper industry.

Murray: In total we have distributed over 5 billion dollars to shareholders through dividends and share purchases. Since adopting our financial policy of returning 50% of excess cash flow in 2021.

Murray: And we have an attractive fee future long-term portfolio that will enable us to continue to build long-term value for shareholders with the remaining 50%.

Murray: We actively monitor current market, conditions, and carefully manage the timing of our projects to ensure our financial flexibility remains strong.

Murray: Our Global team is focused on driving value in our business.

Murray: Committed to strong execution of our plans.

Murray: Providing cash to invest in profitable growth and return cash to shareholders.

Murray: in concluding State presentation on 516 free ports, large scale, low costs proven producing assets

Murray: Actionable, low-risk growth options.

Maree Robertson: as well as our advantageous U.S. footprint provide a strong foundation for the future. Thanks for your attention.

Murray: Experience and leadership in the global copper industry as well as our admin contagious. Us Footprints provide a strong foundation for the future.

Operator: We will now take 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 a second time. If you are using a speakerphone, please pick up your handset before pressing the numbers. We ask that you limit your questions to one. If you have additional questions, please return to the queue. One moment, please, for our first question.

Murray: Thanks for your attention. We'll now take a question.

Bill Peterson: Our first question comes from the line of Bill Peterson with J.P. Morgan. Please go ahead. Good morning, Bill. Yeah, good morning, Kathleen and team for taking the question.

Speaker Change: 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 a second time. If you are using a speaker-phone, please pick up your handset. Before pressing the numbers, we ask that you limit your questions to 1. If you have additional questions, please return to the queue 1. Moment, please for our first question.

Our first question comes from the line of Bill Peterson with JP Morgan. Please go ahead.

Kathleen Quirk: I wanted to ask about the, I guess the mine plan change. And it sounds like you're you look at this on a quarterly basis, but trying to get a sense for, I guess, what's changed now is something you had seen earlier, but felt you needed more data to I guess change the plan and just anything else that wasn't to, you know, basically the modeling update and in plan. Yeah. Thanks for the question, and Mark Johnson is here on the call if we need to fill in anything, but we update our quarterly forecast, as I mentioned, we update our multi-year forecast every quarter.

Speaker Change: Good morning Bill, yeah. Hi, yeah. Hi. Good morning, Kathleen. And team for taking the question. I wanted to ask about the, uh, I guess the Mind plan change and it sounds like you're you look at this on a quarterly basis, but trying to get a sense for I guess, what's changed? Now, is something you had seen earlier, but if you needed more data to

I guess, change the plan and just anything else that wanted to, you know, basically the modeling update and and plan.

Speaker Change: Yeah.

Speaker Change: Um, thanks for the question and Mark Johnson is, is here on the call. Um, if if we need to fill in anything, but, um, we, we update our quarterly forecasts as I mentioned, um,

Speaker Change: we update our multi-year forecast, every quarter, um and grasberg, we go through a process it for each of the ore bodies and

Speaker Change: look at what the

Speaker Change: Expected uh rates are in determining the grades. We use and established um software package that industry uses for modeling Rock caves.

Kathleen Quirk: some differentials between what we were actually getting out of the recovery of ore grades versus what the model suggested. Historically, it's been pretty close match. We did recalibrate it once before at the end of 2023. You remember in the open pit area, we had a very high grade core of gold at the bottom of the pit. The interplay of the flows, where it's moving, is really just a timing of figuring out scheduling of how that will roll through our grades. Very close when we recalibrated the model over the long term, but it did have this short-term impact.

Speaker Change: and we did detect, um, starting uh, in in the, in the first half of the Year, some differentials between, um, what we were actually getting out of the the

Speaker Change: Uh recovery of of ore grades versus uh what the model suggested. Um, historically, it's been pretty close match. Uh we did recalibrate it uh

Speaker Change: We took a took on a process to look at the various settings within the scheduling model.

Speaker Change: And, um, and were able to develop a update to the calibration that replicated very, very closely, the match that we historically, uh, were were, were were realizing and so, um, we have updated that, um, you, you need to consider just the background of the variation of of grade within this or body, and we have 900 draw points that we're um, collecting or through. And there could be changes in the timing of how that ore flows through the draw points from which sections, it's coming from particularly below the pit. Um, where you, you remember our, um, in the, in the, in the open pit area, we had a very high grade core of of, of, of, of gold, um, at the at the bottom of the pit. So, uh, the interplay

Speaker Change: Of the flows where it's where? It's moving is really just a timing of figuring out, scheduling of how that will will will roll through our, our, our grades. And um, we were, we were

Mark Johnson: So, I don't know, Mark, if you want to add anything, any perspectives to those comments. No, I think while you handle it very well, Kathleen, you know, one thing I just might want to mention is, is what we're seeing is that as we start mining from a draw point, We're very confident because the material is just directly above the area that we're mining as we continue to pull through this column of rock. Some of it is up to 500 meters above us. This estimation becomes a bit more complex. Not all the material makes its way through that column at an equal rate.

Speaker Change: Very close when we when we recalibrated the model over the long term but um it did have this the short-term impact. So, I don't know. Mark, if you want to add anything, any perspectives, um, to those comments

Mark Johnson: No, I think well you handled it very well Kathleen. Um, you know 1 thing I just might want to mention is is what we're seeing is that as we start mining from a draw point,

Mark Johnson: we're very confident because the material is just directly above

Mark Johnson: The area that we're mining as these as we continue to pull through this column of Rock.

Mark Johnson: Some of it is up up to 500, m above us.

Mark Johnson: . tends to work its way through the column of rock quicker. And then also we have material that shifts laterally . . It can end up in other draw points. So it becomes a bit more of a big mixing as you get further up. And as Kathleen mentioned, you know, the team that we have on this, the tools that we use are world-class. And really, we didn't see much variability at all on the copper. It's much more stable in the gray. But the gold can shift in value quite dramatically over a relatively short distance, same as it was in the open pit.

Mark Johnson: This estimation becomes a bit more complex, not all the material makes its way through that column at an equal rate, the smaller material tends to work its way through the column of rock quicker. And then also we have material that shifts laterally and can end up in in other drop points.

Mark Johnson: So it it becomes a bit more of a big mixing, as you get further up.

Mark Johnson: And um, as Kathleen mentioned, you know, the team that we have on this, the tools that we use are, are world class.

And really, we didn't see much variability at all on the copper. It it's much more stable in the grades.

Mark Johnson: But in the open pit, we knew exactly that volume of material that we were mining at any given point.

But the gold can shift in value quite dramatically over a relatively short distance. Same. As it was in the open pit.

Kathleen Quirk: And as I mentioned in the blockade, that becomes a bit more of a A complex estimating of how that material will work its way from the higher areas of the block cave down into these drop Thank you, Mark. Thanks, Mark. Thanks, Mark and Kathleen.

Mark Johnson: Uh, but in the open pit, we knew exactly that volume of material that we were mining at any given point.

Mark Johnson: And as I mentioned in the block cave that becomes a bit more of a

Mark Johnson: A, a complex estimating of how that material awaits work its way.

Mark Johnson: Uh, from the higher areas of the block cave down into these draw points.

Thank you, Mark.

Speaker Change: Thanks, Mark, and casting.

Katja Jancic: Our next question comes from the line of Katja Jancic with BMO, please go ahead. Hi. Thank you for taking my questions. Maybe, Kathleen, you mentioned you continue to expect costs in North America to decline over the next two years. But if I'm not mistaken, that doesn't incorporate expectations for the impact from tariffs. Can you maybe talk a bit about how could tariffs impact that outlook?

Our next question comes from the line of caught. You yansi, with BMO, please go ahead.

Speaker Change: Hi, thank you for taking my questions. Uh, maybe tell me you mentioned, you continue to expect costs in North America to decline over the next 2 years. But if I'm not mistaken that, that doesn't incorporate expectation for the, uh, the impact from tariffs, can you maybe talk a bit about

How could tariffs impact that Outlook?

we're monitoring very closely the the the impact of tariffs um, in terms of what uh, Freeport brings in as the Importer of record, uh, it's not a, a significant impact so far, um, the the the bigger impact that we're

We're working with our suppliers on is, um, what they are seeing and what various, um, inputs they have into their cost.

Speaker Change: Um, impact on our on our costs. Um, but that's something we're monitoring. We're going to look for ways to to, um, to to modify our, our supply chains if possible and work closely with our vendors to make sure that we're sourcing, uh, the material as much as possible that that's terrifying. So, but but things like, you know, the steel and aluminum tariffs, you know, that's, that's that's hitting us, um, to a degree as well. So, uh, we benefit on the 1 hand, um, to a much, much larger extent on on the copper.

Speaker Change: Situation, which we talked about, but the, um, the Tariff is, um, is impacting our our, um, our operating costs but not to a significant degree. Uh, well really the, the cost savings that we're talking about. Really the efforts underway to to drive better efficiencies, um, through through, through our um, our Innovation that we're doing focusing on the basics.

Speaker Change: Um rationalizing contractors like we talked about uh reducing unplanned downtime getting better asset efficiencies. Our our asset health is in much better uh situation in the US than it has been in recent years. Um and so we're really now that inflation is somewhat um moderated. We're now

Where we're really driving. Uh, what we can do to bring costs lower, we've got a lot of automation projects, um, underway. So um, and of course, the leech initiative,

Speaker Change: Uh, will really help us out because those, those incremental pounds are coming in at at a very low cost. And so, we're really excited about the opportunity in the us to bring down costs. Um, and at the same time we're seeing this um this this premium. So our us business uh should perform very very well as we look forward. Uh, as a reminder, we we, um,

Speaker Change: We don't have, we have nols in the US and that operating losses. So um, it can come in to our margins and cash flows and drop to the bottom line through our results. And so it's a real opportunity for us and we're we're very focused on on driving value and our us business through, uh, efficiency programs and and, and and cost reduction programs. In addition to the benefit, we're getting on this premium.

Speaker Change: Thank you.

Orest Wowkodaw: Our next question comes from a line of Orest Wowkodaw with Scotiabank. Please go ahead. Hi, good morning. A couple of questions if I could.

Speaker Change: Our next question comes from the line of Oris Dal with Scotia Bank, please go ahead.

Kathleen Quirk: Firstly, I was wondering if there's been any discussions with the US administration with respect to financing or incentives to advance any of your US-based growth? We've had discussions with various government authorities about Freeport, you know, we've gone through. Submission of the 232 comments and we've engaged with various representatives of the U.S. government just as an education about what Freeport is doing in the U.S. as a dominant producer. We talk about supplying 70% of the refined copper that's produced in the U.S. to this market. We've talked about the technology and the innovation that we have in the business that will allow us to potentially in the short term bring on some additional refined copper.

Hi. Good morning. Um, a couple of questions if I could um firstly, I was wondering if there's been any discussions with the US Administration with respect to financing or incentives to advance any of your us-based growth.

Speaker Change: We've had discussions.

Speaker Change: report, you know, we've gone through

Kathleen Quirk: It's not a given that you can bring on refined copper very quickly in terms of there's only two operating smelters in the U.S. and what we can do in the short term is really try to boost production, refine production through our leach initiative. We've talked with the U.S. about the The IRA benefits that, you know, being a critical mineral, you have a 10% production credit. Copper is not currently on that list, and we're working to try to get copper on that list. We know with the recent legislation, some of the IRA benefits are being phased out.

Speaker Change: Submission of the 232 comments. And, um, and we've engaged with, um, with various representatives of the US government, just as an as an education about what report is doing in the US as, as a dominant producer, you know, we we talked about supplying, 70% of the refined copper, um, that's produced in the US to this Market. Um, we've talked about the technology and the The Innovation that we have in the business that will allow us to potentially in the short term bring on some additional refined copper. Um, you know, it's not it's it's not um, a given that you can bring on refined copper very quickly. Um, in terms of there's only 2 operating smelters, um, in the US and um, what we can do in the short term is um is is is really try to boost production ref.

Speaker Change: Wine production through our leech initiative. Um, we've talked with the us about the, um,

Kathleen Quirk: Really, what we are hoping to accomplish, we're very happy about, you know, the attention to permitting reforms, but we're hoping to accomplish incentives that would be long-term in nature and really could boost U.S. refined production. So we're educating, it's a two-way conversation, Richard's been involved in various discussions as well, and so we're in a good position on this.

Speaker Change: The IRA uh benefits that, you know, being a critical mineral. Um, you have a 10% production credit. Uh, copper is not currently on that list and we're working to try to get copper on that list. We know with a recent legislation legislation, some of the IRA benefits are being phased out but

Kathleen Quirk: Our Baghdad expansion is actionable. We're wanting to get our autonomous truck conversion completed. We want to understand how this tariff situation will be implemented, et cetera, but in the as an opportunity to grow refined production in the U.S.

Speaker Change: Accomplished incentives. Um, that would be long-term in nature and really could, uh, boost us for fine production. Um, so we, we, we're we're educating, um, we're getting we're, it's a 2-way conversation, Richard's been involved in in various discussions as well. Um, and so we're we're we're in a good position on this. Um, our Baghdad, I Baghdad expansion is, um, is is actionable. Um,

Kathleen Quirk: And just as a quick follow up, do you see any opportunity for potential tariff exemptions? on your refined copper coming from either Atlantic Copper or Indonesia into the U.S.? We don't know. We're waiting on, you know, the details of the implementation to be released. We don't we're not aware of any exemptions at this point. OK, thank you.

Speaker Change: We are wanting to get our uh autonomous truck conversion completed. Uh we want to understand the um the how this tariff situation will be implemented Etc. But um in the near term you know we're really looking at our leech initiative as as an opportunity to grow refined production in the US

Speaker Change: And just as a quick follow-up, do you see any opportunity for potential tariff exemptions on, on your refined copper coming from either Atlantic copper or Indonesia into the us? We don't know where we're waiting on, um, you know, the, the details of the implementation of to be released. Uh, we don't, we're not aware of any exemptions at this point.

Okay, thank you.

Alan Spence: Your next question comes from the line of Alan Spence from BNP Paribas. Your line is open. Good morning. Thank you. Indonesia has $0.27 per pound related to treatment charges.

Speaker Change: Your next question comes from the line of Alan Spence from BNP, paribus, your line is open.

Unknown Attendee: next year with Nanyar up and running.

Unknown Attendee: Unknown Attendee, Robert Brackett, Orest Wowkodaw, Daniel Major, William Peterson, Alexander Hacking, Michael Dudas, Martin Malloy, William Peterson, Freeport-McMoRan Inc So they're going to be in different categories in terms of where the impacts of the smelter will be. The operating cost of the smelter, the new smelter, is somewhere on the order of 27 cents a pound. That doesn't take into account the additional revenues that we get from, from getting, you know, essentially when you, when you sell concentrate to a smelter, the smelter takes a percentage of the of the of the metal that you sell in them.

Speaker Change: Good morning and thank you. Um, Indonesia has 27 cents. Per pound related to treatment charges in cash cost. Guidance for 2025 into next year, with Manar up and running. What do you think your internal cost to operate? That's not sure would be on the pound basis.

Speaker Change: So,

Speaker Change: the where the the impacts of the smelter will be.

Speaker Change: Um, the the operating costs of the smelter. Uh, the new smelter, um, is, is somewhere on the order of 27 cents a pound.

Speaker Change: that doesn't take into account the additional revenues that we get from, uh, from getting, you know, essentially when you, when you sell concentrate to a smelter, the smelter, um, takes

Unknown Attendee: So. That'll show up in revenue, something on the order of two and a half percent of the revenues of the additional volumes will show up in our revenues, but, you know, net cost.

Speaker Change: uh, a percentage of the, of the of the metal that you sell in them,

Speaker Change: so, um,

Speaker Change: that'll show up in Revenue, something on the order of of of 2 and a half percent of the of the revenues of the additional volumes will show up in our revenues but

Unknown Attendee: will be credited, you know, essentially when you look at the impact of the smelter, you're looking at something that we'll be aware of.

Speaker Change: Um, you know, net cost.

will be credited, you know, essentially, when you look at the impact of the smelter,

um, you're looking at something on the order of

Unknown Attendee: https://www.youtube.com or the U.S. Department of Labor's YouTube channel. https://www.youtube.com or the U.S. Department of Labor's YouTube channel.

Speaker Change: 15 or 16 cents net uh, when you consider the the revenue impact. Um, and then of course the the export Duty will go away which was you know, something on the order of of 30 cents or more in the in the in the second quarter. So um it it should you know at the end of the day benefit our our our margins

Speaker Change: Thank you very much.

Lawson Winder: Your next question comes from a line of Lawson Winder from B of A Securities.

Lawson Winder: Your line is open. Thank you very much, Operator.

Speaker Change: You. Our next question comes from the line of lost and winter from BFA Securities. Your line is open.

Lawson Winder: Good morning, Richard, Kathleen, and Maree, and thank you for the update. wanted to just follow up on the Indonesian question there about, you know, potentially sending refined copper from Grasberg to the US. So just just looking at the two agreements as or the agreement as we know it is today and then looking at what the import tariffs are as proposed so 50% versus 19% I mean is there any thought internally for the potential just to ship refined copper from Indonesia to the U.S. and take advantage of that spread assuming these agreements Section 232 tariffs are finalized as Historically, Indonesia has not shipped copper with any significance to the U.S.

Speaker Change: Uh, thank you very much operator. Uh, good morning, Richard Kathleen and Marie, uh, and thank you for the update.

Wanted to uh just follow up on the Indonesian. Uh question there about um you know potentially sending refined Copper from grasberg to the US. So um just just looking at the 2 of the agreement, as we know it is today and then looking at what the uh import tariffs are as proposed, so 50% versus 19%. I mean is there any thought internally? Um for the potential just to re to ship refined Copper from Indonesia to the us and take advantage of that spread assuming these agreements and the and the section 232 tariffs are finalized as proposed

Lawson Winder: You know, we've been a concentrate producer mostly historically, although we've had the existing smelter at P.T. Smelting. But historically, the copper produced has been... Transcripts provided by Transcription Outsourcing, LLC. If it's required to use it. Today, the trade flows are mostly, as you know, Orest coming to the U.S. from places like Chile is the predominant. © The Bulletproof Executive 2013 Canada and Peru as well.

Speaker Change: Southeast Asia. Um, we'll look at whatever, you know, makes sense in the future. Um, as to where, where it makes the most sense to, um, to sell the, the the

Speaker Change: Was coming out of our, our new smelter uh The Logical places um in the near term will be continued to to to sell in Asia. But we'll we'll look at what you know what? What makes

the most sense the point is, is that

Speaker Change: um, as as the US is looking at its strategic interests and critical minerals, you know, having a US company with a significant ownership of this operation and Indonesia and and management over it. Um, it gives the US essentially of, um, a, a, a, a, a security of Supply, if if it makes sense to, to, if it's, if it's required to, to, to use it today, you know, the the trade flows are mostly, um, as you know, or coming to the US from places like, um, like like Chile, is the predominant. Um,

Speaker Change: Suppliers.

Lawson Winder: And so we'll have to just look to see how all this unfolds and what makes the most sense for trade. Yeah, thanks so much for that color.

Speaker Change: In Canada and Peru as well. Um, and and so, we'll have to just look to see how all this unfolds and what makes the most sense for for trade flows?

Kathleen Quirk: And then just sort of follow up on that concept in terms of refined copper within the United States. Have you given any thought to whether If Freeport were to build a smelter in the U.S., whether a brownfield expansion at Miami would make more sense, or would it possibly make more sense to build a greenfield smelter? Yeah, we're doing some work and we have been doing some work even before this on whether there's an opportunity on a cost-effective basis to expand the Miami smelter, Miami, Arizona smelter. And so we're continuing to study that as well as, you know, is there an opportunity potentially to recover some additional scrap and use our infrastructure in the U.S.

Yeah, thanks so much for that color. And then, just a, a sort of follow up on that concept, um, in terms of refined copper within the United States. Um, have you given any thought to whether, um, if Freeport were to build a smelter in the US, whether a Brownfield expansion at Miami, would make more sense or, um, you know, you know, would it possibly make more sense to to build a Greenfield smelter. Thank you.

Speaker Change: Yeah, we're we're doing some work and we have been doing some work even before this on um whether there is an opportunity out of on a cost-effective basis to expand the Miami smelter, Miami, Arizona, smelter. Um and so we're continuing continuing to study that as well as you know, is there an opportunity, um, potentially to cover some additional scrap.

Kathleen Quirk: to do that? That's been very, very limited historically and we'll look at whether there's an opportunity to do it in the future. But, so we're looking at an expansion of Miami. The smelter in the U.S.

Kathleen Quirk: is a greenfield would be, you know, very challenging. I mentioned in terms of time frame, I mentioned the Indonesia smelter. You know, we were working on that. It feels like a lifetime, but we've been working on it for 10 years in terms of identifying a site, location for it, you know, going through all that needed. And Indonesia really wanted to fast track it, but it takes a long time to go through and find the proper site, find the, and go through the permitting process, engineering, all those things. But we do have, you know, the existing infrastructure here in the U.S.

Speaker Change: Um, and use our infrastructure in the US to do that. That, that that's been very, very limited historically. And, um, we'll, we'll look at whether there's there's an opportunity to do it in the future. But, um, so we're looking at an expansion of, um, of of Miami the, the smelter in the US, um, is a green field would be, you know, very challenging. Um, I mentioned the the, in terms of time frame the, the um, I mentioned the Indonesia smelter, you know, we were working on that.

Speaker Change: it feels like a lifetime but we've been working on it for for 10 years in terms of, um,

Speaker Change: Identifying a site, um, to, to the location for it, you know, going through all that needed and Indonesia, really, really wanted to Fast Track it. But, um, but it, it takes a long time to, to go through and find the proper site, find the um, find the um and go through the permitting process. Um, engineering all those things. But um

Kathleen Quirk: and Arizona, and we'll look to, look to, look to whether it would make sense to, to expand it. You know, I want to emphasize, though, the...

Kathleen Quirk: The real opportunity for us in the near term to get more refined metal in the U.S. is continued success with our leach program. And I mentioned the additive trial we're doing. We're making some progress on additional additives. That combined with our precision leaching processes, as well as we're going to introduce heated graphinate into the solutions that we're injecting into the stockpiles. So we're working on those things. And that can happen more quickly than trying to develop a more costly greenfield smell. Thanks very much, Kathleen. Appreciate it.

Speaker Change: But we do have, you know, the existing infrastructure here in the US and Arizona. And we'll look to, um, look to look to whether it would make sense to, to expand it, you know. I I want to emphasize though, the, um,

The real opportunity for us in the near term to get more refined metal in the US is, you know, continued success with our leech program and I mentioned the the additive, um, trial we're doing we're making some progress on.

Speaker Change: Um, additional additives that combined with our P precision leeching.

Speaker Change: Processes as well as um, we're going to introduce heated raffinate um, into the into the solutions that were injecting into the stock piles.

Speaker Change: So we're working on those things and those that can happen, um, more quickly than trying to develop a more costly, Green Field, smelter.

Thank you very much Kathleen, appreciate it.

Liam Fitzpatrick: Our next question comes from the line of Liam Fitzpatrick, Deutsche Bank. Please go ahead. Good morning, Kathleen and team.

Our next question comes from the line of

Speaker Change: just go ahead.

Liam Fitzpatrick: First one on the buyback. It was still very modest in Q2 in terms of the pace of buyback and despite net debt being well below your target now, can you just outline what's holding you back at the moment in terms of increasing the pace of share repurchases? And if I can, one quick follow-up on Indonesia. I know you've said the 2026 guidance on copper and gold is unchanged, but given the variability you're experiencing, what level of confidence do you have or can you really have in that medium-term gold guidance? Thank you. On the first question regarding the buyback, we are applying our financial policy, which is, you know, to distribute through dividends and share buybacks, 50% of our available cash flows, and that's about what, where we are through the program, about at 50%.

Speaker Change: In terms of increasing the the pace of share repurchases and if I can 1 quick, follow-up on Indonesia. I know you've said the 2026 guidance. Um on copper and gold is unchanged but given the variability you're experiencing. You know what level of confidence do you have? Or can you really have in in that medium-term gold guidance. Thank you.

Kathleen Quirk: Now, we've just seen this change on the U.S. premium, you know, it tripled from the second quarter, so should it continue to be significant as it is today, that will provide more cash flow for shareholder returns under the policy. and with respect to being below our net debt target you'll recall that you know half was for half was for the shareholder returns and half was for balance sheet or profitable growth and we've got several projects that we are looking at that like you know for instance the Baghdad expansion project which we haven't made a decision on but potentially that could that could use some of the the other 50% that that was generated since we put the policy in place at the end of the second half of 21 so so that is that is that's where we stand we should have as we look forward at today's prices we should have more cash flow to to deploy to our to our shareholder returns.

Regarding the ball back. We are um, applying our financial policy, which is, you know, to distribute through, uh, dividends and share BuyBacks. 50% of our available, cash flows. And that's about what where we are, uh, through the program about at 50%. Now we've just seen, um, this change on the, on the US. Um, premium, you know, a tripled from the second quarter. So should it continue to to to be um significant as it is today um that will provide more cash flow for um, for for shareholder returns under under the policy. Um, and with respect to being below our net debt Target, you'll recall that, you know, half was for, uh, half was for the

shareholder returns in half was for, um, balance sheet or um, profitable growth, and we've got several projects that

Speaker Change: We are we are looking at that.

Kathleen Quirk: With respect to the goal volumes, we go through a comprehensive process every quarter. We feel confident with the modeling that we've done and that we feel that the goal grades are there and so we'll just keep working as much as we can to get our rates up. We were impacted in the first half by two major projects, maintenance projects. One of the concentrators was down for the first quarter in Indonesia and the second one is down now. Maintenance will be completed at the end of the third quarter and we'll be able to increase our mill rates and keep the mine rates going.

Speaker Change: Like, you know, for instance, the the, the Baghdad Expansion Project, which we haven't made a decision on, but potentially, that could, um, that could use some of the, the, the, the other 50% that, um, that we've generated, um, since we put the, the, uh, policy in place at the end of, um, the second half of 21. So, um, so that is, that is, um, that's where we stand. We should have as we look forward at today's, uh, prices we should have more cash flow to, um, to deploy to our to our shareholder returns.

Um, and with respect to the, the gold volumes, um, you know, we go through a comprehensive process, every quarter, um, we feel confident with, um, the modeling that we've done, um, and and that we feel that the, the, um, the the gold grades are are, um, or are there. And so, we'll just, you know, keep keep working as, as as much as we can to, to get our rates up. You know, we were impacted in the first half by 2 major. Um,

Speaker Change: Projects or maintenance projects. The the 1 of the concentrators was down for the first quarter in in Indonesia and the second 1 um, is down now. But those are the, the

Kathleen Quirk: We feel confident in using the best information we have today. Mining does have risks, as you know well, but we're working hard with the data we have. You can look at our historical performance and I think we've done pretty well when it comes to executing and keeping our information up to date so that we don't have surprises.

Maintenance will be completed at the end of the third quarter and will be able to increase our our Mill rates and keep the, you know, keep the the mine rates going. So, um, we feel confident and, and, and using the, the best information we have today mining is, you know, has does have have have risks as, as as you know. Well, um, but um, but we're working, you know, working hard with the data we have and um, you can look at our historical performance and and I think we've done pretty well when it comes to um, to to to to executing on on and keeping our information up to date.

Kathleen Quirk: The area that's real important for us is getting the smelter up and running. In the fourth quarter, we expect to not be exporting concentrates in the U.S. Our plan does not assume any exports in the fourth quarter, and all of it will be coming from the new smelter. And so we're real focused on making sure that we get that smelter up and running and things are going well so far. But the nature of these smelters is such that you do have issues from time to time. We've incorporated the ramp-up curve in our estimates, but we're going to work hard to execute on these plans as we've done in the past.

Speaker Change: So that we don't have. Uh, we don't have uh, surprises um, the other

Area. That's real important for us is getting the smelter um, up and running. You know, in the fourth quarter uh we expect to to um to to not be exporting concentrates in the US. Our plan does not assume any exports in the in the 4 quarter and all of it will be coming from the, from the new smelter. And so, we will focus on making sure that, um, we get that smelter up and up and running and things are going well, so far. But the nature of of

Speaker Change: Of the smelters is is um, is is is such that you do have issues from time to time. We've we've Incorporated um, the ramp up curve in our in our estimates. But um, but we're going to work hard to execute on these plans as as we've done in the past.

Kathleen Quirk: Okay, got it. Thank you.

Speaker Change: Okay, got it. Thank you.

Carlos D'Alba: Our next question comes from the line of Carlos D'Alba with Morgan Stanley. Please go ahead. Yeah, thank you. Good morning, everyone.

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

Carlos D'Alba: So I'm just coming back to the discussion of this melting. I mean, Kathleen, can the potential Miami expansion accommodate the increased concentrate from Baghdad and the concentrate portion of Lone Star expansions when it comes, or if not, then what would be Freeport's options to handle those additional concentrates when they come? With respect to the Miami expansion, we've been looking at something on the order of 30% increase to the current concentrate treatment. Miami, by the way, the Miami smelter is performing very well, and that team has been very helpful. That and the Atlantic Copper team both have been very helpful with our new smelter in Indonesia and helping our team there achieve the ramp up.

I think what what, uh, can can the the potential Miami expansion? Accommodate the

Speaker Change: Uh, increase concentrate from Baghdad and the concentrate portion of loan start, uh, expansions, um when it comes or or if not, then what would be free ports options to to to handle those additional concentrates when they come.

Speaker Change: Expansion. Um, we've been looking at something on the order of, of, of 30%, um, increase to the current

Speaker Change: Current.

Speaker Change: Concentrate.

Speaker Change: Miami. By the way, the Miami smelter is um is performing very well. Um and and that team has been very helpful a lot in the Atlanta copper team, both have been very helpful with our

Kathleen Quirk: But we've been looking at something on the order of 30%. Interestingly enough, on the Lone Star project, it will be, over time, kind of like a Marinci, where you have a significant portion of the production coming from the leach volume. So depending on how we do with our leach additive, we may have the option to send more to leach production as opposed to concentrating. But we do have, at the Lone Star project, we do have part of a deposit that has both copper and gold in the grade, and so that will likely require a concentrator.

Speaker Change: Marshmallow turn in Indonesia and helping our team there. Um, you achieve the um, the the the ramp up, but um, but we've been looking at something on the order of of 30%. Um, interestingly enough, on on the Lone Star project, um, it will be, you know, kind of like

Kathleen Quirk: But we're in a great position, Carlos, with this focus on getting refined production. We're in a great position with the smelters we have today to leverage those and also with this leach processing where Freeport has a very significant experience in that. So we're in a good position. It's not easy looking at the future of how to bring in more refined copper, but we're pleased with the portfolio we have that allows us to leverage it more quickly.

Speaker Change: Over time kind of like a Morenci, you know, where you have a significant portion, um, coming from of of, of, of the production coming from the, from the leech volume. So, um, depending on how we do with our, uh, leech additive. You know, we may have the option to, to send more to, um, to, to leech production as opposed to, um, concentrating. But we do have at at the Lone Star project. We do have a, a part of the deposit that has um, has uh, both copper and gold in the grade and so that will likely require a concentrator. Uh but we're in a we're in a great position Carlos with um with this focus on getting refined production, we're in a great position with the smelters we have today to leverage those. Um and and also with this um leech processing work report has a has a very significant um

Kathleen Quirk: You know, definitely the optionality that you have is quite unique here in the U.S. I wonder if as part of your discussions with the U.S. administration, have you have you talked about? How have the U.S. government responded to the challenges of bringing in smelting capacity in the U.S.? Private-Public Partnership or something to that end to solve that issue and maybe accelerate the refining expansion. We have not gotten into that level of discussion with the government. There is a desire to see more copper, refined copper, being produced in the U.S. But we have not gotten into any discussions about greenfield.

Speaker Change: Experience in in, in that. So, so we're in a good position, it's not easy, you know, looking at the future of how to bring in more refined copper. But um, we're we're we're pleased with the portfolio, we have that allows us to leverage it more quickly.

Speaker Change: No, that definitely the, the optionality that you have, is, is quite unique here in the US. Um, I wonder if, as part of your discussions with the US Administration. Um, have you have you talked about, um, you know, the challenges of bringing a smelting capacity in the US and, and how have they respond, uh, responded to that to that, uh, would they potentially consider some, uh, you know, loans or Investments, uh, you know, private public partnership or or something to that end to to solve that issue. And maybe accelerate the, the refining expansions,

Speaker Change: We have not gotten into that that level of discussion. Um, with the government, there is a um there is a desire to see more

Kathleen Quirk: We've really just emphasized what Freeport's doing in the near term. through our LEACH Innovation Initiative and what we're doing to advance our Baghdad Project as well. So that makes sense. Thank you very much, Kathleen. Congratulations. Thanks, Carl.

Copper refined copper being produced in the US um but we have not gotten into any discussions about about Greenfield. We we really just emphasize what freeport's doing in the near term.

Through our lease, Innovation initiative. Um, and, um, what we're doing to to, um, to advance our

Baghdad project as well.

Speaker Change: So that that makes sense. Well, thank you very much Ken. Uh, congratulations and good luck.

Daniel Major: Our next question comes from the line of Daniel Major with UBS. Please go ahead. Hi Kathleen and thanks for the questions. Just to follow up on the Indonesia smelter and the sales destinations for those volumes, you mentioned the possibility of selling to the US in an environment where there was a preferential tariff kind of regime. Can you make any comments on whether any of the volumes are contractually committed from either the existing or the new smelter over the next 12 months that would prevent you from selling to the US? I just want to come back.

Daniel Major: Our next question comes from the line of Daniel. Major with UBS, please go ahead.

Daniel Major: Hi, uh, hi Kathleen, and thanks for the questions. Um, just to follow up on the um, the smelter, uh, Indonesia smelter and the um, sales destinations for those volumes, you mentioned the possibility of selling to the US in an environment where there was a preferential tariff, uh, kind of regime. Um, can you make any comments on whether, uh, any of the volumes are contractually committed? Um, from either the existing or the new smelter, uh, over the next 12 months that would prevent you from, uh, selling to the US.

Daniel Major: Um,

Kathleen Quirk: I'm not sure that you've characterized exactly what we're saying about Indonesia. You know, in the near term, our plans are based on selling our copper cathode that will be produced. We've been working on marketing plans, and our near-term plans is that that will be sold in Asia. We have flexibility. We don't have long-term contracts locked up. We do have flexibility to send it to the place that makes the most sense. I mentioned that the trade flows currently are logistically advantaged selling it in Asia. We're very excited about that. What's happening in Indonesia with respect to domestic production, there's a real desire in Indonesia to bring up its domestic consumption of copper and there's actually been some infrastructure developed by other companies near our operating site so we'll sell domestically and then look to where the best market is to sell but we're not locked up long term.

Daniel Major: Be sold in.

Daniel Major: In Asia. Um we have you know flexibility we don't have long-term contracts, locked up.

Daniel Major: We do have flexibility to send it to the place. That makes the most sense.

Daniel Major: Um, I mentioned that the trade flows.

Uh currently are um, Advantage. You know, logistically advantaged, selling it in Asia. Well we're very, um,

Daniel Major: What's happening in the Indonesia? With respect to um domestic. Um, production there's there's

Daniel Major: Real desire in Indonesia to, um, to bring up its domestic consumption of copper. And there's actually been some, um,

Daniel Major: Infrastructure developed by other companies in our, in our operate near our operating site. So we'll sell domestically. And then, you know, look to where the best Market is to sell, but we're not locked up long term.

Kathleen Quirk: Okay, that's clear. Thanks.

Kathleen Quirk: Just one other modelling, couple of modelling questions, if I may. Could you give us any guidance around working capital for the Q3 given the changes in shipment timings out of Indonesia? Yeah, we do. We do have some working capital requirements in the third quarter. But that's expected to turn in the fourth quarter for the year, you know, we've had a we've had a use of working capital so far this year, but for the year, we're not expecting any kind of material working capital requirements for for 2020. Okay, thanks very much.

Daniel Major: Okay. Um,

Speaker Change: That's clear. Thanks, just 1 of the modeling. Um, couple of modeling questions if I may um uh

Speaker Change: Could you give us any guidance around working capital for the Q3 given the changes in um, shipment timings out of Indonesia?

Speaker Change: Yeah.

Speaker Change: Do you have some working capital? Um, requirements in the third quarter? Um, but that's expected to turn, um, in the fourth quarter for the year. You know, we've had a, we've had a use of, of working capital so far this year, but, but the Year we're not expecting, um, any kind of material, uh, working capital, uh, requirements for um, for 2025

Speaker Change: Okay, thanks so much.

Chris LaFemina: Our next question comes from the line of Chris LaFemina with Jeffries. Please go ahead. Hi, Kathleen. Hi, Richard. Maree, thanks for taking my question.

Chris lemina: Our next question comes from the line of Chris lemina with Jeffrey's. Please go ahead.

Chris LaFemina: So basically, I want to ask you about the market. So we have COMEX prices up more than 40% year to date. I'm not sure we've ever had the price rally this much in such a short period of time, from a pretty high starting point. And, you know, US industrial economy isn't exactly firing up cylinders right now. So I'm wondering, you know, demand implications of this massive price spike in the US. at www.larryweaver.com. Thank you, Chris. It's an interesting question. You know, when we look at the demand drivers for copper, and the secular trends, you know, we see continued strong demand.

Speaker Change: Hi Kathleen. Hi Richard Murray. Thanks for taking my question.

Speaker Change: Uh, so basically I I want to ask you about the market so we have comx prices up more than 40% year to date. I'm not sure we've ever had the price rally. This much in such a short period of time from a pretty high starting point. And you know, us industrial. Economy isn't exactly firing on all cylinders right now. So I'm wondering you know, demand implications of this massive price spike in the US.

Speaker Change: Uh and even globally with LM prices rising as well. You're seeing, do you think these sorts of these price increases can be tolerated? Demand is inelastic enough that this isn't really going to be affected by higher prices? Or are we getting to a point now with comx approaching 6 dollars a pound that you could see real negative implications on demand?

Thank you, Chris.

the interesting question, you know, when we look at the demand drivers for copper and the secular trends,

Kathleen Quirk: What we do see from time to time, and we thought, you know, last year in China, and you know, you may see some of it going on in the US is when prices move rapidly in a short period of time. You know, some customers will try to figure out if, you know, if it's real, you know, before they, before they, they buy and people are trying to understand what the implications of this tariff are, you know, and the details haven't been been released yet. But underlying, you know, the, the, what's going on with, with, you know, you hear about it every day, the, the AI data centers, the need for, for more energy infrastructure, more power generation, the underlying trends are, are significant.

Speaker Change: Um, you know, we see continued strong demand, what we do see from time to time and we thought, you know, last year in China and you know you may see some of it going on in the US is when prices move rapidly in a in a in a short period of time. Um,

Speaker Change: You know, some customers will try to figure out if, you know, if it's real, you know, before they before they um, they they buy and people are trying to understand what the implications of this tariff are, you know, in the details haven't been been released yet but underlying, you know, the the what's going on with. Um, with we, you know, you hear about it every day, the

Speaker Change: The AI data centers, the need for um for more energy infrastructure, more power generation. Um,

Richard Adkerson: Copper within big projects doesn't end up being the biggest item. And so, you know, people can, you know, people need it. And it's, it's a, you know, metal that is, is, is the best metal when it comes to conducting electricity. So I don't, you know, I can't give you a precise answer about, you are positive in terms of needing copper to fulfill what we're trying to do from a technology standpoint and overall energy infrastructure standpoint. Richard, and Steve Higgins is on as well, Richard I don't know if you want to add anything or Steve to what I said.

Speaker Change: The underlying Trends are are significant copper within big projects doesn't end up being um the biggest item and so you know people can, you know, people need it and it's it's a you know metal that is is is is the best metal when it comes to conducting electricity.

Speaker Change: Um, so um, I don't, you know, I can't give you a a precise answer about, you know, whether they'll be any short-term impacts from it. But I think the long-term trends,

Um, are are positive in terms of needing copper.

Richard Adkerson: Yeah, let me just say a couple of things, Chris. This move that you've talked about... reflects the fact that there was this global Exporting of copper in the United States in advance of the tariff. You know, getting in it here now, before the tariffs came to place. Now, there's this big question about what are the tariffs ultimately going to be? They certainly don't reflect the, even at these prices, they don't reflect the 50%. tariff that's been floated, but we really don't know. And so once the tariffs are announced, then there will be an adjustment in flows.

Speaker Change: Fill what we're trying to do from a technology standpoint and overall energy infrastructure, standpoint, Richard, or and and Steve Higgins is on as well. Richard, I don't know if you want to add anything or, or Steve to to what I said.

Yeah, let me just say a couple of things. Chris, uh,

This move that you've talked about.

reflects the fact that there was this global

Speaker Change: Uh, exporting of copper in the United States in advance of the tariffs.

Speaker Change: you know, getting in in here now,

Speaker Change: Before the tariffs came to place. Now, there's this big question about what are the tariffs often we're going to be? Uh, they certainly don't reflect the even at these prices, they don't reflect the 50%.

Speaker Change: Tariff, that was that's been floated but we really don't know.

Richard Adkerson: Uh, and there will be, uh, you know, potentially, uh, benefit on LME price. Ultimately, it's going to be global supply-demand that will end up driving it, and then whatever tariffs are there, how they're absorbed, where they're absorbed in the U.S. marketplace. Copper is just so difficult to replace for its fundamental uses because of its inherent quality. So it's not like, and there'll be pushes as prices rise to find ways to substitute copper to thrift it and so forth. But underlying all of that is just nothing conducts electricity like copper and the world's electric so that demand, the fundamental strength and demand will be there.

Speaker Change: And so, once the tariffs are announced, then there will be an adjustment and flows.

Speaker Change: Uh, and there will be uh, you know, potentially uh, benefit on lme prices.

Speaker Change: Ultimately, it's going to be Global Supply demand that that that will end up driving it. And then whatever tariffs are there, how they're absorbed to, where they're absorbed in the US Marketplace.

Speaker Change: Um,

conference is so difficult to replace for our fundamental uses because of its inherent qualities. So it's not like and and they'll be pushes as prices rise to find ways to uh substitute copper to Thrift it and so forth.

Unknown Attendee: Steve, I don't know if you have any other thoughts. No, nothing to add. That was very well said.

Speaker Change: But underlying all of that is just nothing, conducts electricity like copper and the world's electric. So that demand the fundamental strength and demand will be there.

Steve, I don't know if you have any other thoughts.

Steve Higgins: No, I think. Yeah. That was very well said.

Unknown Attendee: Well, I think that very much depends on, you know, how it's applied to downstream derivative products. And there's another factor here that we haven't mentioned on this call that's a big uncertain.

Speaker Change: Yeah. I mean I guess what I was thinking there is I thank you for that. But I was thinking, you know, the competitiveness of kind of Downstream in the US, you know? If we let's assume these tariffs are permanent thing. Uh, do you start to get a mix in demand globally to other regions? And I get it that the lme price depends on global supply and demand. But for Freeport specifically, obviously the chromex premium matters as well. So if you start to get a shift in tons away from the US to elsewhere, which means that the benefit of the of the, the Tariff to us producers becomes less over time.

Wow, well I I think that very much depends on, you know, how it's applied to Downstream derivative products.

Richard Adkerson: Going back to a previous question in the past, We've really only lobbied the federal government to try to make permitting more efficient and try to coordinate permitting between state and federal government. Thank you.

Steve Higgins: Right. Yeah, which we don't know and there's and there's another Factor here that that that we really we have a mission on this call that that that's that's a big uncertain. Uh

Speaker Change: Going back to a previous question in the past.

Richard Adkerson: And with that, we will end our webinar for today. Thank you. You know, we're encouraging the government. Not lobbying, because we can't lobby, but encouraging the government to reach deal with our international partners that are favorable to both companies, both countries. Trying to educate people. I'm sure you all watch news commentators, and you hear things that sometimes it's just astounding, like people wanting to open up these old smelters, reopening those smelters. They don't realize they're gone. You know, the smelters that were once there are no longer here. And to try to build a new smelter in today's world where you have, you know, zero or negative TCs and RCs is a tough deal now.

Speaker Change: We've really only lobbed the, the federal government to try to make ex, uh, permitting more efficient, and try to coordinate permitting between state and federal government.

Speaker Change: Um today.

Speaker Change: You know, we're encouraging the government.

Speaker Change: Not lobbying because we can't lobby but encouraging the government to reach deal with our International partners that are favorable to both both companies, both both, both both countries.

Speaker Change: and,

Speaker Change: Trying to educate people. I'm sure you all watch news commentators and you hear things that sometimes it's just astounding. Like, people wanting to open up all these old smaller reopening those mountains. They don't realize they're gone, you know, this filters are once there are no longer here.

Speaker Change: And, and to try to build a new smelter in today's world.

Richard Adkerson: They have not raised the idea of government subsidies and so forth. We've been trying to get Kathleen to add to your list. Production credit applied to copper, but that's a challenge.

Speaker Change: Where you have, you know, zero and negative TCS in our cities is is is is a tough deal now.

Speaker Change: They have not raised the idea of government subsidies and so forth. Um,

Speaker Change: Um, we've been trying to Kathleen said to get this.

Speaker Change: this, this

Richard Adkerson: The thing that's overhanging this that we're looking into more is the impact of scrap in the U.S. You know, there's primary scrap and secondary scrap, and the U.S. had, over time, had closed its secondary scrap. processors because of the environmental issues and cost issues associated with it. and almost all secondary scraps have been going to China or elsewhere. Now there's been some new secondary scrap facilities opened up, and that's a potential source of U.S. of Refinance Supply. But it's complicated as well for the reasons I just mentioned. But that's the thing to watch, is what we're watching as we look at all of these things going forward.

Speaker Change: Production credit applied to Copper, but that's the challenge.

The thing that's the overhang this that we're looking into more is the impact of scrap in the US.

Speaker Change: You know, there's primary scrap and secondary scrap and the US had over time and closed. Its secondary scrap.

Processors, because of the environmental issues and cost issues associated with it.

Speaker Change: And almost all secondary scraps been going to China.

Speaker Change: Or elsewhere. Now there's been some new secondary scrap facilities opened up

Speaker Change: um,

Speaker Change: And that's the potential source of of of, of us.

Speaker Change: Uh, refined Supply.

Speaker Change: But, uh, it's complicated as well for the reasons I just mentioned.

Richard Adkerson: It's just a complicated, foggy world, and we just all have to focus on doing it. And listen, I'm real proud of what our team is doing. I mean, you know, we've been through history at Freeport of having to dig our way out of some real tough problems over the years. Now we've got... A lot of those past problems behind us, and Daphne's leading the team in focusing on technology, getting more copper out of what we have there, reducing costs, there are ways of doing that. And that's what we're really focused on as we wait for this.

Speaker Change: And, uh, but that's thing to watch is what we're watching. Is we look at at all of these things going forward, um,

Speaker Change: I mean, you know, we've been through history at Freeport of having

Speaker Change: To dig our way out of some real tough problems over the years. Now, we've got a lot of those past problems behind us and definitely leading the team and focusing on like technology. Get more copper out of what we have there reducing costs their ways of doing that and uh that's what we're really focused on is we wait for this.

Richard Adkerson: and to see where we're going from here. Great, thank you.

Speaker Change: Uh, political situation to clear.

Speaker Change: And to see where we're going from here.

Speaker Change: Great. Thank you.

John Tumazos: Our next question comes from the line of John Tumazos with John Tumazos Theory Independent Research. Please go ahead. Thank you, thank you very much. Could you explain some of the hurdles in engineering the Baghdad expansion? Clearly, you've been mining a long time. You know about the reliability, the ore grades, the communication characteristics. I'll explain just how it takes. A year or so to get the definitive fees and concerning Lone Star is the expansion and consideration Increasing the mining and stacking rate 120,000 tons a day oxide, or is it also bringing forward the sulfide mill? Just looking forward to all the good progress.

Speaker Change: Our next question comes from the line of John tumasz with John tumasz very independent research. Please go ahead.

Thank you very much. Thank you very much.

Speaker Change: Could you explain some of the hurdles in engineering uh, the bad guy expansion?

Speaker Change: Um, clearly, you've been mining a long time, you know about the reliability of the ore grades the communication character.

Speaker Change: Explains just how it takes.

Speaker Change: A year or so, to get the definitive fees.

Speaker Change: And concerning Lone Star, is the expansion and consideration.

Speaker Change: Uh, increasing the mining and stacking rate 120,000 tons a day oxide. Or is it also bringing forward the sulfide Mill?

Kathleen Quirk: Yeah. Thank you, John. On the Baghdad side, we've done a lot of work there, and we've been working internally and with our outside engineers on defining that project. Really, it's not been, the big constraint for us has just been the ability to execute a project in the environment where we've been in the last few years, in an inflationary environment where labor was really, really tight and we'd watched projects elsewhere in the industry have big cost blowouts and that's not something that we wanted to do. And really, from Baghdad's standpoint, we're going to be able to produce these reserves regardless of whether we expand.

Speaker Change: Just looking forward to all the good progress. Yeah.

Speaker Change: Thank you, John.

Speaker Change: There. And we've been, um, working with, um, internally and with our, with our outside Engineers on, um, on defining that project and

Speaker Change: Really, it's not been. It's the the the the the big um constraint for us has just been um the ability to execute a project in the environment where we've been in the last few years and a in a inflationary environment where labor was um, labor was really, really tight. And, you know, we'd watched projects elsewhere in the industry have

Kathleen Quirk: The expansion obviously would give us more near-term production, near-term cash flows, but it's really a question of when the right time is to start it. And we've been taking the time while we've been considering to advance some things and de-risk the project with this autonomous truck conversion that we're doing is going to reduce reliance on employment. So we've been doing that. We've been dealing with housing at Baghdad. We've been advancing some of the tailings work, which we would ultimately have to do long-term. But we've been advancing it so that when we're ready to go, we can just move forward with construction.

Speaker Change: Uh, big uh, costs blowouts. And that's not something that, um, we wanted to, to do and really from from bag that that standpoint, um, we're going to be able to produce these reserves, um, regardless of whether we expand the expansion, obviously would give us, um, more near-term production near-term.

Speaker Change: Cash flows. But it's really a question of when, you know, when the right time is to start it.

Kathleen Quirk: So we've been creating optionality with the project, but the main caution that we've had with it is just wanting to make sure that we convince ourselves that we can execute the project efficiently within our capital budget. Now we want to monitor what's happening with tariffs and how that might be affecting capital costs. And so we want some more clarity there while we continue to advance the autonomous truck fleet. So that's where we stand at Baghdad.

Speaker Change: Um, and we've been taking the time, uh, while we've been considering to advance some things. Um, and the risks, the project we with this autonomous, um, truck conversion that we're doing is, um, is going to reduce Reliance on, um, on on, on on employment. Um, we will have to expand our employment there but not to the degree. If we had uh, you know, the the trucks that were all, you know, they were all operated with people. So um, so we've been doing that. We've been dealing with housing in at Baghdad. We've been advancing some of the tailings work, which we would ultimately have to do long term. Um, but we've been advancing it so that when we're ready to go, we can we can just move forward with with construction. So we've been creating an optionality with the project but the main um,

Speaker Change: The caution that we've had with, it is just wanting to make sure that we can convince ourselves that we can execute the project efficiently within our capital budget. Now, we've got, we want to monitor what's happening with with tariffs and how that might be, um, affecting Capital costs. And and so we want some more clarity there while we continue to, to advance the, uh,

Kathleen Quirk: Lone Star, we're advancing a study to look at what the next phase of expansion could be. We've got the Dos Cobres deposit at Safford, which I mentioned earlier is high-grade and also has gold in it. So that would be a concentrator project. But with respect to Lone Star... Salfides, where we're going to look at the right, you know, the right mix of leach versus concentrating. If we put the concentrator in for those Pobre's deposits, that will help the economics ultimately of putting, sending some through the mill. But the vision, the big picture vision, is an enormous resource.

Um, the autonomous truck Suite. Um, so uh, that's that's where we stand at at, at at Baghdad. Um, Lone Star. We're we're uh, advancing a study, um, to look at what the next, um, phase of expansion could be. Um, we've got the, those probes deposit, um, at at Stafford, which I mentioned earlier, um, is, is high grade and also has gold in it. Um, so that would be, you know, a a concentrator project. But with respect to, to Lone Star.

Kathleen Quirk: in this district. The big picture vision is to have a cornerstone asset like Morenci that'll be a leach and concentrate producer of scale over a very long period of time. Lone Star was the last big mine, I mean Safford Lone Star was the last big mine that was done in the U.S. We brought it online in the 2007-2008 timeframe and we've expanded it since then. So for U.S. mines it's relatively new even though that was some time ago. So we're really excited about the potential there and we want to get this study done to really define what the flowsheet will look like.

Speaker Change: Mix of leech versus um, versus concentrating. If we have, if we put the concentrator in for those Cobra deposit that that will help the economics. Ultimately, if putting sending some through the mill, but the vision big picture Vision. This is an enormous resource.

Speaker Change: Um, in this District, big picture vision is to have.

Speaker Change: Um, a Cornerstone asset like Morenci, that'll be a, a leech. And um, and and and concentrate producer of scale over a very long period of time. You know, Lone Star was the last, you know, big mine that I mean, Safford Lone Star was the last big, mine. That was, um, that was done in the US. We, we brought it online in the 2728 2007208 time frame and we've expanded it since then. So, it's it's for for us Minds, It's relatively new. Um, even though that was some time ago,

Unknown Attendee: Thank you very much.

Speaker Change: Uh we we're really excited about the potential there and and we want to get this study done to to Really Define what the flow sheet will look like.

Speaker Change: Thank you very much.

Brian Macarthur: Our final question will come from the line of Brian MacArthur with Raymond James. Please go ahead. Good morning, and thank you for taking my question. I just go back to Grasberg to make sure I understand this. You sort of lost 200,000 ounces over your five year plan. And again, that sounds to me it's just different flow through drop. But if I look past the five years, is there anything different I should worry about there? And is there anything you've learned through these whole process that would change your thinking on KL? given it is a lot higher goal, Greg.

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

Kathleen Quirk: Thanks. Yeah, nothing has changed with respect to our long range Glassberg blockade plans. We are, to your point about KL, looking at, you know, what is the best NPV when, you know, when we're developing KL, but what's the best NPV? And we always look at the interplay between Unknown Attendee, Robert Brackett, Orest Wowkodaw, Daniel Major, William Peterson, Alexander Hacking, And sorry, you actually went to my second question there. As you as you pointed out, I mean, the recovery that KL and the metal with an awful lot lower in the goal. Would you, from what you see now, do you think you're going to be able to get up to the perfect coverage you see at GBC or, because obviously you said that's a pretty big...

Speaker Change: Good morning, and thank you for taking my question. Um, can I just go back to grasberg to make sure I understand this, um, you sort of lost 200,000 Oz over your 5-year plan. And again, that sounds me. It's just different flow through draw points, but if I look past the 5 years, is there anything different? I should worry about there. And is there anything you've learned through these whole process that would change your thinking on KL, uh, just giving it is a lot higher gold. Greg going forward, thanks. Yeah. Not nothing has changed with respect to our long range. Um, glass for Block cave plans, we are to your point about KL. Um, looking at, you know, what is the the best

Speaker Change: Npv, when, you know, when, when we're, we're developing KL. But what's the best npv if, and we always look at the interplay between, uh,

The glory is coming from various or bodies, um, that could maximize the the, the Net Present Value. So we will have that opportunity that the the development of future in the yard ads you know, additional optionality within the portfolio. Um and you you pointed out we've got we've got you know High grades there. Um both copper and gold currently the recovery assumptions in our in our reserves are lower than what we're getting.

Speaker Change: In in, you know, the mail recovery is what we're getting and um, in grasberg blockade but that's a real opportunity for us. So, um, but you're right to point that out, Brian and we'll, we'll, we'll constantly relook at what the, what the right sequencing is between these lower bodies and with a, a 2041 extension, it's going to open up a whole lot of opportunity for us to recover more.

Speaker Change: Than than, than we could have otherwise. So we're we're we're very excited about the long range. It it what we can do there?

Richard Adkerson: Yeah, we have we have not yet. I mean, we've been able to to make some changes over time and have brought the recoveries up. But that's still an opportunity for us. Great. Thanks very much, Fran.

Speaker Change: And so are you actually with the bisection question there? Um, as you as you pointed out, I mean the recovery is that KL and the Metallurgy was different with an awful lot. Lower in the cold. Would you from what you see now? Do you think you're going to be able to get up to the perfect coverage to see a GBC or um, because obviously you said that's a pretty big opportunity.

Speaker Change: Yeah, we we have we have not yet. I mean we've been able to to make some changes over time and have brought the recoveries up

Speaker Change: Um, but that's still an opportunity for us.

Speaker Change: Great. Thanks very much for answering my questions.

Richard Adkerson: I am, this is Richard. Let me add just one quick thing on this because I've observed some things about this grade issue with the Grasberg blockade. I just want to point out a couple of things. One, when you look at the shortfall, don't forget to take into account the tax effect of that and also the non-controlling interest effect. The government of Indonesia has 51% of that and there's a tax effect to it. So, I've observed some people overstating the impact of it, and as... Kathleen and Mark said, this is not a fundamental change that the resource is requiring us to make operating changes in the way we operate.

Speaker Change: This is Richard. Let let me, let me add just 1 quick thing on this because I've

uh,

Speaker Change: I've observed, some things about this, this, uh, great issue with the grasberg blockade. Just want to point out a couple of things 1, when you look at the shortfall, don't forget to take into account.

Speaker Change: The tax effect of that and also the non-controlling interest affect the government of Indonesia has 51% of that and there's a tax effect to it.

Speaker Change: so, uh,

Observe some people overstating, the impact of it.

and as

Kathleen. And Mark said,

Richard Adkerson: What we're talking about here is getting a better handle on when that gold in the ore is going to be processed. And we're learning more about it. We're using better models. It's not a resource question. It's a timing question. And we want to give the market, as we always do, our best effort in giving you guidance as to when that goal is coming. It's going to be there. It's going to come. It's a question of when.

Better handle on when that gold in the ore, is going to be processed.

Speaker Change: And we're learning more about it, we're using better models.

It's not a resource question. It's a timing question and we want to give the market as we always do our best.

Speaker Change: Effort in giving you guidance as to, when that goes coming, it's going to be there. It's going to come. It's a question of when

Richard Adkerson: Thank you, Richard.

Richard Murray: Thank you, Richard.

Kathleen Quirk: With that, I'll hand the call back to management for any closing remarks. Thank you everyone and thanks for a comprehensive call. We're available if anyone has any follow-up questions and thanks. We'll keep you updated as we go forward.

With that, I'll hand the call back to management for any closing remarks.

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

Speaker Change: Thank you, everyone. And, and, and thanks for for comprehensive call. We're available. If anyone has any any, uh, any, any follow-up questions and and thanks for your well. Thanks, we'll keep you updated as we go forward.

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