Q1 2026 Freeport-McMoran Inc Earnings Call

April 23, 2026

Speaker #1: At this time, all participants are in the listen-only mode. Later, we will conduct the question-and-answer session. If you wish to ask a question during the Q&A session, press star 1 on your touchstone phone.

Speaker #1: Ladies and gentlemen, thank you for standing by, and welcome to the FREEPORT-MCMORAN FIRST QUARTER CONFERENCE CALL. At this time, all participants are in the listen-only mode.

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Freeport-McMoRan Q1 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question during the Q&A session, press star one on your touchtone phone. If you require assistance during the conference, please press star zero. I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations. Please go ahead, sir.

Speaker #1: If you require assistance during the conference, please press star 0. I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations, please go ahead, sir.

Speaker #1: Later, we will conduct the question-and-answer session. If you wish to ask a question during the Q&A session, press star 1 on your touchstone phone.

Speaker #2: Good morning, everyone, and welcome to the FREEPORT conference call. Earlier this morning, FCX reported its first quarter operating and financial results. A copy of today's press release was supplemental schedules and slides are available on our website fcx.com.

Speaker #1: If you require assistance during the conference, please press star 0. I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations.

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning, everyone, and welcome to the FREEPORT conference call. Earlier this morning, FCX reported its first quarter operating and financial results. A copy of today's press release with supplemental schedules and slides is available on our website, fcx.com.

David Joint: Good morning, everyone, and welcome to the Freeport Conference Call. Earlier this morning, FCX reported its Q1 operating and financial results. A copy of today's press release with supplemental schedules and slides are available on our website, fcx.com. Today's conference call is being broadcast live on the internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today. Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward-looking statements, and actual results may differ materially.

David Joint: Good morning, everyone, and welcome to the Freeport conference call. Earlier this morning, FCX reported its Q1 operating and financial results. A copy of today's press release with supplemental schedules and slides are available on our website, fcx.com. Today's conference call is being broadcast live on the internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today. Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward-looking statements, and actual results may differ materially.

Speaker #2: Today's conference call is being broadcast live on the Internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link.

Speaker #2: In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today.

Speaker #2: Today's conference call is being broadcast live on the internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link.

Speaker #2: Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward-looking statements, and actual results may differ materially.

Speaker #2: In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today.

Speaker #2: 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 #2: Before we begin our comments, we'd like to remind everyone that today's press release, and certain of our comments on the call, include non-GAAP measures and forward-looking statements, and actual results may differ materially.

Speaker #2: 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 Chief Financial Officer; and other senior members of our management team.

Speaker #2: 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.

David Joint: 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. 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 Chief Financial Officer, and other senior members of our management team. Richard will make some opening remarks. Kathleen will review our slide materials, as well as Maree, and then we'll open up the call for questions. Richard?

Speaker #2: Richard will make some opening remarks; Kathleen will review our slide materials; as well as Maree, and then we'll open up the call for questions.

Speaker #2: Richard?

Speaker #3: Thank you, David, and welcome, everyone. We are now in the 20th year since FREEPORT combined with Phelps Dodge to create the modern FREEPORT by forming a global leader in copper.

Speaker #2: Richard will make some opening remarks, Kathleen will review our slide materials, as well as Maree, and then we'll open up the call for questions.

Speaker #2: Richard?

Speaker #3: Our strategy was set after I became CEO in 2003, just as China emerged as the dominant source of copper demand. Our decision to build our company around copper was a good decision then and has only gotten better over time.

Speaker #3: Thank you, David, and welcome, everyone. We are now in the 20th year since FREEPORT combined with FABSTAGE to create the modern FREEPORT by forming a global leader in copper.

Richard Adkerson: Thank you, David, and welcome everyone. We are now in the 20th year since Freeport combined with Phelps Dodge to create the modern Freeport by forming a global leader in copper. Our strategy was set after I became CEO in 2003, just as China emerged as the dominant source of copper demand. Our decision to build our company around copper was a good decision then and has only gotten better over time. We were in Chile last week for the World Copper Conference, which I first attended in 2004 and learned that the then expected supply response to China's demand would be more muted than expected. This year, there was a strong positive consensus by attendees about copper's future. We are now in a new era of growth about copper, which is broad-based and driven by the growing demand for electricity. Simply, electricity equals copper.

Speaker #3: We were in Chile last week for the annual Global Copper Conference, which I first attended in 2004, and learned that the then-expected supply response to China's demand would be more muted.

Speaker #3: Than expected. This year, there was a strong positive consensus by attendees about copper's future. We are now in a new era of growth about copper, which is broad-based, and driven by the growing demand for electricity.

Speaker #3: Simply, electricity equals copper. Our assets at FREEPORT are long-lived and have embedded major growth options which we are advancing for the future. We have exciting growth ahead in the Americas, with significant opportunities to improve profitability using modern technology.

Speaker #3: Simply, electricity equals copper. Our assets at Freeport are long-lived and have embedded major growth options, which we're re-advancing for the future. We have exciting growth ahead in the Americas, with significant opportunities to improve profitability using modern technology.

Speaker #3: Grasberg will continue as a major long-term contributor to our growth and profitability, with its high grades of copper and gold. The extension of our rights to operate beyond 2041, pursuant to our recently signed MOU with the Government of Indonesia, is positive for continuity of these benefits from this remarkable world-class district.

Richard Adkerson: Our assets at Freeport are long lived and have embedded major growth options, which we are advancing for the future. We have exciting growth ahead in the Americas with significant opportunities to improve profitability using modern technology. Grasberg will continue as a major long-term contributor to our growth and profitability with its high grades of copper and gold. The extension of our rights to operate beyond 2041, pursuant to our recently signed MoU with the government of Indonesia, is positive for continuity of these benefits from this remarkable world-class district. We just celebrated our 59th year of successfully operating in Indonesia. I've personally been engaged since 1988. Our team there is best in class in large-scale block cave mining. Kathleen will review with you our operating results and outlook, including our plan to restore full production at Grasberg. I personally have complete confidence in our teams addressing the current challenges.

Speaker #3: Grasberg will continue as a major long-term contributor to our growth and profitability, with its high grades of copper and gold. The extension of our rights to operate beyond 2041, pursuant to our recently signed MOU with the Government of Indonesia, is positive, for continuity of these benefits from this remarkable world-class district.

Speaker #3: We just celebrated our 59th year of successfully operating in Indonesia, and I've personally been engaged since 1988. Our team there is best in class in large-scale block cave mining.

Speaker #3: Kathleen will review with you our operating results and outlook, including our plan to restore full production at Grasberg. I personally have complete confidence in our team's addressing the current challenges.

Speaker #3: We just celebrated our 59th year of successfully operating in Indonesia. I've personally been engaged since 1988. Our team there is best in class in large-scale block cave mining.

Speaker #3: Personally proud of FREEPORT's global team, and how our company is so well positioned for the future. Kathleen?

Speaker #4: Great. Thank you, Richard, and thank you all for participating on our call today. We will review our first quarter performance and update you all on our initiatives, projects, and outlook for the future.

Speaker #3: Personally proud of FREEPORT's global team, and how our company is so well positioned for the future. Kathleen?

Richard Adkerson: I'm personally proud of Freeport's global team and how our company is so well positioned for the future. Kathleen?

Speaker #4: It's an active time for our teams across our global business as we work to restore large-scale production at Grasberg safely and sustainably, drive value through operational excellence, and new technology initiatives in the US, and prepare for a new and exciting phase of organic growth.

Kathleen Quirk: Great. Thank you, Richard, and thank you all for participating on our call today. We will review our Q1 performance and update you all on our initiatives, projects, and outlook for the future. It's an active time for our teams across our global business as we work to restore large-scale production at Grasberg safely and sustainably, drive value through operational excellence and new technology initiatives in the US, and prepare for a new and exciting phase of organic growth. Starting on slide 3, we provide the highlights of our Q1. Our sales of copper, gold, and unit costs were better than our forecast, and the favorable metal price backdrop allowed us to generate growth in revenues, EBITDA, and cash flow compared with last year's Q1, despite our Indonesia operations operating at reduced capacity.

Speaker #4: It's an active time for our teams across our global business, as we work to restore large-scale production at Grasberg, safely and sustainably; drive value through operational excellence and new technology initiatives in the U.S.; and prepare for a new and exciting phase of organic growth.

Speaker #4: Starting on slide 3, we provide the highlights of our first quarter. Our sales of copper, gold, and unit costs were better than our forecasts, and the favorable metal-backed price backdrop allowed us to generate growth in revenues, EBITDA, and cash flow compared with last year's first quarter, despite our Indonesia operations operating at reduced capacity.

Speaker #4: Starting on slide 3, we provide the highlights of our first quarter. Our sales of copper gold and unit costs were better than our forecasts, and the favorable metal-backed price backdrop allowed us to generate growth in revenues, EBITDA, and cash flow compared with last year's first quarter, despite our Indonesia operations operating at reduced capacity.

Speaker #4: The strength and diversity of our portfolio comes through in the results, with our US mining operations contributing 2.5 times more operating income in the first quarter of this year compared with last year's first quarter, with strong conversion to the bottom line.

Kathleen Quirk: The strength and diversity of our portfolio comes through in the results, with our US mining operations contributing two and a half times more operating income in Q1 of this year compared with last year's Q1, with strong conversion to the bottom line. We were successful in completing the required remediation at Grasberg to commence our phased ramp-up initially in production blocks two and three in the Grasberg Block Cave. This was an important milestone and involved impressive execution by our team. I'll cover in more detail the challenges encountered with material handling bottlenecks in the initial ramp-up, how we're addressing the issues, and the impacts on our ramp-up forecast. As Richard mentioned, a notable highlight of the quarter was the memorandum of understanding reached in February with the government of Indonesia to extend our operating rights for the life of the resource.

Speaker #4: We were successful in completing the required remediation at Grasberg, to commence our phased ramp-up, initially in production blocks 2 and 3 in the Grasberg block cave.

Speaker #4: This was an important milestone and involved impressive execution by our team. I'll cover in more detail the challenges encountered with material handling, bottlenecks, and the initial ramp-up, how we are addressing the issues, and the impacts on our ramp-up forecast.

Speaker #4: We were successful in completing the required remediation at Grasberg to commence our phased ramp-up, initially in production blocks 2 and 3 in the Grasberg Block Cave.

Speaker #4: As Richard mentioned, a notable highlight of the quarter was the memorandum of understanding reached in February with the Government of Indonesia to extend our operating rights for the life of the resource.

Speaker #4: This is an important long-term value driver for FREEPORT, the government, and the many stakeholders who benefit from our long-standing operations in Indonesia. We are advancing our future growth plans and submitted an environmental impact statement in March for a major expansion project in Chile.

Kathleen Quirk: This is an important long-term value driver for Freeport, the government, and the many stakeholders who benefit from our long-standing operations in Indonesia. We are advancing our future growth plans and submitted an environmental impact statement in March for a major expansion project in Chile. We're progressing several initiatives to scale our innovative leach project and completing our work to be in a position to potentially green-light our brownfield expansion project at our Bagdad Mine in Arizona later this year. We returned approximately $300 million to shareholders in Q1, including common stock dividends and the purchase of 1.7 million shares of our common stock. Our balance sheet is solid and we're in a strong position to invest in our future growth while returning cash to shareholders. Moving to slide 4, we summarize our priorities for 2026.

Speaker #4: We're progressing several initiatives to scale our innovative leach project, and completing our work to be in a position to potentially greenlight our brownfield expansion project at our Baghdad mine in Arizona later this year.

Speaker #4: We returned approximately $300 million to shareholders in the first quarter, including common stock dividends, and the purchase of 1.7 million shares of our common stock.

Speaker #4: We're progressing several initiatives to scale our innovative leach project and completing our work to be in a position to potentially greenlight our brownfield expansion project at our Baghdad mine in Arizona later this year.

Speaker #4: Our balance sheet is solid, and we're in a strong position to invest in our future growth while returning cash to shareholders. Moving to slide 4, we summarize our priorities for 2026.

Speaker #4: We returned approximately $300 million to shareholders in the first quarter, including common stock dividends, and the purchase of $1.7 million shares of our common stock.

Speaker #4: These are the same priorities we set at the start of the year, and each of these represent areas of meaningful value creation. Strong execution of our plans, including achievement of a successful ramp-up at Grasberg, crystallizing the value of our leach opportunity, adopting new technologies to improve performance, and investing in profitable growth will enable us to build significant value in our business.

Speaker #4: Our balance sheet is solid, and we're in a strong position to invest in our future growth while returning cash to shareholders. Moving to Slide 4, we summarize our priorities for 2026.

Kathleen Quirk: These are the same priorities we set at the start of the year, and each of these represent areas of meaningful value creation. Strong execution of our plans, including achievement of a successful ramp-up at Grasberg, crystallizing the value of our leach opportunity, adopting new technologies to improve performance, and investing in profitable growth will enable us to build significant value in our business. We know we will face challenges along the way, as evidenced by the current situation at Grasberg, but I'm confident our highly experienced team will address and successfully overcome any challenge with urgency and determination. Turning to the markets on slide five. As a leading global supplier of copper, Freeport benefits from copper's increasingly important and critical role in the global economy. As we look forward, we see rising copper demand associated with massive requirements for the power grid to support new technologies.

Speaker #4: We know we will face challenges along the way, as evidenced by the current situation at Grasberg. But I'm confident our highly experienced team will address and successfully overcome any challenge with urgency and determination.

Speaker #4: Turning to the markets on slide 5, as a leading global supplier of copper, FREEPORT benefits from copper's increasingly important and critical role in the global economy.

Speaker #4: As we look forward, we see rising copper demand associated with massive requirements for the power grid to support new technologies. Copper's superior conductivity makes it the metal when it comes to electrification, and the world is becoming much more electrified.

Speaker #4: Turning to the markets on slide 5, as a leading global supplier of copper, Freeport benefits from copper's increasingly important and critical role in the global economy.

Speaker #4: Copper price has averaged over $5.80 per pound year to date, and reached an all-time high exceeding $6 per pound in the first quarter. Demand signals remain strong.

Kathleen Quirk: Copper's superior conductivity makes it the metal when it comes to electrification, and the world is becoming much more electrified. Copper prices have averaged over $5.80 per pound year to date and reached an all-time high exceeding $6 per pound in Q1. Demand signals remain strong. Our customers in the US continue to report rising demand associated with AI data centers and related energy infrastructure, which has more than offset weakness in private construction, and in the auto sector. Recent reports from China reflect a significant resurgence of demand, with significant power grid spending, and significant draws on Chinese exchange inventories in recent weeks. As we step back and assess the fundamentals, we expect the market will require additional copper supplies to meet growing demand.

Speaker #4: Our customers in the US continue to report rising demand associated with AI data centers and related energy infrastructure, which is more than offset weakness in private construction and in the auto sector.

Speaker #4: Copper price has averaged over $5.80 per pound year to date, and reached an all-time high exceeding $6 per pound in the first quarter. Demand signals remain strong.

Speaker #4: Recent reports from China, reflect a significant resurgence of demand, with significant power grid spending and significant draws on Chinese exchange inventories in recent weeks.

Speaker #4: As we step back and assess the fundamentals, we expect the market will require additional copper supplies, to meet growing demand. At FREEPORT, we have a valuable geographically diverse portfolio of copper assets, and a strategically well-situated for the long term, with large-scale production facilities, long life reserves, and resources and a portfolio of low-risk brownfield expansion opportunities to serve a growing market.

Speaker #4: Recent reports from China, reflect a significant resurgence of demand, with significant power grid spending and significant draws on Chinese exchange inventories in recent weeks.

Speaker #4: As we step back and assess the fundamentals, we expect the market will require additional copper supplies to meet growing demand. At FREEPORT, we have a valuable geographically diverse portfolio of copper assets, and a strategically well-situated for the long term with large-scale production facilities, long life reserves, and resources and a portfolio of low-risk brownfield expansion opportunities to serve a growing market.

Kathleen Quirk: At Freeport, we have a valuable, geographically diverse portfolio of copper assets and are strategically well situated for the long term with large-scale production facilities, long life reserves and resources, and a portfolio of low-risk brownfield expansion opportunities to serve a growing market. Turning to operations on slide 6, we summarize the operating highlights by geographic region. Looking at the US, production was above the year-ago quarter, but a bit lower sequentially compared with Q4 2025 and our expectations. Our operating teams continue to focus on our operating disciplines, improving unplanned downtime, and achieving sustained maximum output from our existing assets. We're really encouraged by the recent improvement in our mining rate, particularly at Morenci, where we achieved a 19% increase in rates compared with last year's Q1.

Speaker #4: Turning to operations on slide 6, we summarize the operating highlights by geographic region, looking at the US production was above the year-ago quarter, but a bit lower sequentially compared with the fourth quarter of 2025, and our expectations.

Speaker #4: Turning to operations on slide 6, we summarize the operating highlights by geographic region. Looking at the US, production was above the year-ago quarter, but a bit lower sequentially compared with the fourth quarter of 2025 and our expectations.

Speaker #4: Our operating teams continue to focus on our operating disciplines, improving unplanned downtime, and achieving sustained maximum output from our existing assets. We're really encouraged by the recent improvement in our mining rate, particularly at Morency, where we achieved a 19% increase in rates compared with last year's first quarter.

Speaker #4: Our operating teams continue to focus on our operating disciplines, improving unplanned downtime, and achieving sustained maximum output from our existing assets. We're really encouraged by the recent improvement in our mining rate, particularly at Marenzi, where we achieved a 19% increase in rates compared with last year’s first quarter.

Speaker #4: Sustaining the higher mining rates will translate into improved copper production over time, and we expect copper production to grow over the course of the year.

Speaker #4: Our innovative leach initiative continues to show real promise. We're deploying our first internally developed additive, and have a line of sight to a new additive which shows significant promise in lab tests.

Speaker #4: Sustaining the higher mining rates will translate into improved copper production over time, and we expect copper production to grow over the course of the year.

Kathleen Quirk: Sustaining the higher mining rates will translate into improved copper production over time, and we expect copper production to grow over the course of the year. Our innovative leach initiative continues to show real promise. We're deploying our first internally developed additive and have a line of sight to a new additive, which shows significant promise in lab tests. We have commenced the pilot test at Morenci to increase the temperature of our stockpiles by applying heated leaching solution to the stockpiles. We know that higher temperatures will enhance recoveries, and our work is focused on finding the most effective engineering and cost solution to achieve this. We remain encouraged with the ability to scale to 300 to 400 million pounds per annum in the 2026-2027 timeframe, which will unlock our path to 800 million pounds per annum from this initiative.

Speaker #4: We have commenced the pilot tests at Morency to increase the temperature of our stockpiles, by applying heated leaching solution to the stockpiles. We know that higher temperatures will enhance recoveries, and our work is focused on finding the most effective engineering and cost solution to achieve this.

Speaker #4: Our innovative leach initiative continues to show real promise. We're deploying our first internally developed additive and have a line of sight to a new additive which shows significant promise in lab tests.

Speaker #4: We have commenced the pilot tests at Marenzi to increase the temperature of our stockpiles by applying heated leaching solution to the stockpiles. We know that higher temperatures will enhance recoveries, and our work is focused on finding the most effective engineering and cost solution to achieve—encouraged with the ability to scale to three to four hundred million pounds per annum in the 2026–2027 timeframe, which will unlock our path to eight hundred million pounds per annum from this initiative.

Speaker #4: We remain encouraged with the ability to scale to 300 to 400 million pounds per annum, in the 2026-2027 timeframe, which will unlock our path to 800 million pounds per annum from this initiative.

Speaker #4: We're continuing to lean heavily into incorporating innovation into our basic mining practices, and see great potential for the tools that AI and other tools will offer, to enhance operating performance.

Speaker #4: In South America, the Cerro Verde team did an excellent job navigating the first quarter, with severe flooding in the Arequipa region, and with challenges with mill efficiencies.

Speaker #4: We're continuing to lean heavily into incorporating innovation into our basic mining practices and see great potential for the tools that AI and other technologies will offer to enhance operating performance.

Kathleen Quirk: We're continuing to lean heavily into incorporating innovation into our basic mining practices and see great potential for the tools that AI and other tools will offer to enhance operating performance. In South America, the Cerro Verde team did an excellent job navigating Q1 with severe flooding in the Arequipa region and with challenges with mill efficiencies. We continue to expect stable production levels at Cerro Verde and some growth at El Abra, our project in Chile, in partnership with Codelco over the next couple of years. There's a lot of activity going on at El Abra currently with the leach pad extension and plans to conduct testing in late 2026 of heated stockpile injections to enhance leach recoveries. As I mentioned, we filed our environmental impact statement for a major expansion at El Abra in March.

Speaker #4: We continue to expect stable production levels at Cerro Verde, and some growth at Alhambra, our project in Chile in partnership with Cadalko, over the next couple of years.

Speaker #4: In South America, the Cerro Verde team did an excellent job navigating the first quarter, with severe flooding in the Arequipa region and with challenges with mill efficiencies.

Speaker #4: There's a lot of activity going on at Alhambra currently, with a leach pad extension, and plans to conduct testing in late '26, of heated stockpile injections to enhance leach recoveries.

Speaker #4: We continue to expect stable production levels at Cerro Verde and some growth at Alhambra, our project in Chile in partnership with Codelco, over the next couple of years.

Speaker #4: As I mentioned, we filed our environmental impact statement for a major expansion at Alhambra, in March. This project will transform Alhambra from a relatively small producer, to a large-scale contributor within the FREEPORT portfolio.

Speaker #4: There's a lot of activity going on at Alhambra currently, with a leach pad extension and plans to conduct testing in late '26 of heated stockpile injections to enhance leach recoveries.

Speaker #4: As I mentioned, we filed our environmental impact statement for a major expansion at Alhambra in March. This project will transform Alhambra from a relatively small producer to a large-scale contributor within the Freeport portfolio.

Speaker #4: We summarize the highlights on the Grasberg start, and I'll provide more detail on our progress in the slides ahead. We reached agreement with our insurance providers during the quarter, for a $700 million insurance recovery, which was the maximum limit under the policy.

Kathleen Quirk: This project will transform El Abra from a relatively small producer to a large-scale contributor within the Freeport portfolio. We summarized the highlights on the Grasberg restart, and I'll provide more detail on our progress in the slides ahead. We reached agreement with our insurance providers during the quarter for a $700 million insurance recovery, which was the maximum limit under the policy. We expect to collect the proceeds during Q2. In Indonesia, we continue to operate one of our two smelters with available concentrate, and the new smelter remains on standby status with an expected restart later this year. Next several slides, we're going to take you through the Grasberg update, what we've accomplished to date, and where we're moving forward as we go through 2026. There's a summary on slide 7 of the current status of the Grasberg Block Cave.

Speaker #4: We summarize the highlights on the Grasberg start, and I'll provide more detail on our progress in the slides ahead. We reached agreement with our insurance providers during the quarter for a $700 million insurance recovery which was the maximum limit under the policy.

Speaker #4: We expect to collect the proceeds during the second quarter. In Indonesia, we continue to operate one of our two smelters, with available concentrate, and the new smelter remains on standby status, with an expected restart later this year.

Speaker #4: We expect to collect the proceeds during the second quarter. In Indonesia, we continue to operate one of our two smelters with available concentrate, and the new smelter remains on standby status with an expected restart later this year.

Speaker #4: Next, several slides we're going to take you through the Grasberg update, what we've accomplished to date, and where we're moving forward, as we go through 2026.

Speaker #4: There's a summary on slide 7, of the current status of the Grasberg blockade, over the last several months. We were successful in completing the activities required to restart mining, in production blocks 2 and 3, and we commenced mining on a limited basis in March.

Speaker #4: Next, several slides we're going to take you through the Grasberg update: what we've accomplished to date and where we're moving forward as we go through 2026.

Speaker #4: There's a summary on slide 7 of the current status of the Grasberg block cave over the last several months. We were successful in completing the activities required to restart mining in production blocks 2 and 3, and we commenced mining on a limited basis in March.

Speaker #4: As a refresher, production blocks 2 and 3 were not directly associated with the external mud rush, which occurred in production block 1C, which is located closer to the surface, and beneath the low spot in the former open pit.

Kathleen Quirk: Over the last several months, we were successful in completing the activities required to restart mining in Production Blocks 2 and 3, and we commenced mining on a limited basis in March. As a refresher, Production Blocks 2 and 3 were not directly associated with the external mud rush which occurred in Production Block 1C, which is located closer to the surface and beneath a low spot in the former open pit. The location and characteristics of Production Blocks 2 and 3 do not have the same exposure to an external mud rush as we had in Production Block 1C.

Speaker #4: As a refresher, production blocks 2 and 3 were not directly associated with the external mud rush which occurred in production block 1C, which is located closer to the surface and beneath the low spot in the former open pit.

Speaker #4: The location and characteristics of production blocks 2 and 3 do not have the same exposure to an external mud rush, as we had in production block 1C.

Speaker #4: However, production in production blocks 2 and 3 was temporarily suspended, since September 2025, to install concrete plugs to isolate production block 1C panels, and ensure no connection to the surface.

Speaker #4: The location and characteristics of production blocks 2 and 3 do not have the same exposure to an external mud rush as we had in production block 1C.

Speaker #4: However, production in production blocks 2 and 3 was temporarily suspended since September 2025 to install concrete plugs to isolate production block 1C panels and ensure no connection to the surface, complete cleanup of material on the extraction and service levels, restore infrastructure on the service level, and strengthen our cave management plans.

Speaker #4: Complete cleanup of material on the extraction and service levels, restore infrastructure on the service level, and strengthen our cave management plans. This was a huge undertaking, and the team did a great job executing this plan.

Kathleen Quirk: However, production in blocks two and three was temporarily suspended since September 2025 to install concrete plugs to isolate production block 1C panels and ensure no connection to the surface, complete cleanup of material on the extraction and service levels, restore infrastructure on the service level, and strengthen our cave management plans. This was a huge undertaking, and the team did a great job executing this plan. After we completed the projects and regained access to the area, we conducted inspections and sampling of the more than 600 draw points in production blocks two and three and were able to determine that the material characteristics within the cave changed significantly over the period of inactivity with a larger proportion of wet ore within the cave compared to when we suspended operations in September 2025.

Speaker #4: After we completed the projects and regained access to the area, we conducted inspections and sampling of the more than 600 draw points, in production blocks 2 and 3, and was able to determine that the material characteristics within the cave changed significantly over the period of inactivity, with a larger proportion of wet ore within the cave, compared to when we suspended operations in September 2025.

Speaker #4: This was a huge undertaking and the team did a great job executing this plan. After we completed the projects and regained access to the area, we conducted inspections and sampling of the more than 600 draw points in production blocks 2 and 3 and was able to determine that the material characteristics within the cave changed significantly over the period of inactivity, with a larger proportion of wet ore within the cave compared to when we suspended operations in September 2025.

Speaker #4: This increase in wet material is associated with surface water, which percolates through the cave rock within the mine, and is removed from the mine through gravity drainage.

Speaker #4: Under normal conditions, active mining assists in managing the accumulated water within the cave. We have significant experience in mining wet material. Our systems to extract the ore from the draw points utilize fully autonomous remote loaders, that are capable of safely handling the wet material.

Speaker #4: This increase in wet material is associated with surface water, which percolates through the cave rock within the mine and is removed from the mine through gravity drainage.

Kathleen Quirk: This increase in wet material is associated with surface water, which percolates through the caved rock within the mine and is removed from the mine through gravity drainage. Under normal conditions, active mining assists in managing the accumulated water within the cave. We have significant experience in mining wet material. Our systems to extract the ore from the draw points utilize fully autonomous remote loaders that are capable of safely handling the wet material. The challenge we are currently addressing is downstream of the extraction level and relates to the material handling systems for loading ore onto our automated trains. Historically, we had a higher ratio of dry material, which allowed us to manage the wet material by blending to a consistency suitable for loading through chutes onto the trains.

Speaker #4: Under normal conditions, active mining assist in managing the accumulated water within the cave. We have significant experience in mining wet material. Our systems to extract the ore from the draw points utilize fully autonomous remote loaders that are capable of safely handling the wet material.

Speaker #4: The challenge we are currently addressing is downstream of the extraction level, and relates to the material handling systems for loading ore onto our automated trains.

Speaker #4: Historically, we had a higher ratio of dry material which allowed us to manage the wet material by blending to a consistency suitable for loading through chutes onto the trains.

Speaker #4: The challenge we are currently addressing is downstream of the extraction level and relates to the material handling systems for loading ore onto our automated trains.

Speaker #4: With the current conditions, we'll need to install specialized equipment on the chutes to regulate the flow of ore for train loading. We've been testing this equipment over the past few years, and connection with our long-range planning in anticipation of potential changes in ore conditions over time.

Speaker #4: Historically, we had a higher ratio of dry material, which allowed us to manage the wet material by blending to a consistency suitable for loading through chutes onto the trains.

Speaker #4: With the current conditions, we'll need to install specialized equipment on the chutes to regulate the flow of ore for train loading. We've been testing this equipment over the past few years and connection with our long-range planning in anticipation of potential changes in ore conditions over time.

Kathleen Quirk: With the current conditions, we will need to install specialized equipment on the chutes to regulate the flow of ore for train loading. We've been testing this equipment over the past few years in connection with our long-range planning in anticipation of potential changes in ore conditions over time. We understand the engineered solution to this issue, but it will take time to make the modifications, which limits production in PB2 and PB3 to what our existing chute designs can handle. We expect that the majority of these bottlenecks can be addressed by mid-2027. In parallel with addressing the chute infrastructure in PB2 and 3, we're also continuing to work to prepare for a future start-up of Production Block 1 South, and advancing a series of de-risking initiatives on surface drainage, and other risk mitigation strategies, including the recent installation of new imaging technology to enhance cave monitoring.

Speaker #4: We understand the engineered solution to this issue, but it will take time to make the modifications which limit production in PB2 and PB3 to what our existing chute designs can handle.

Speaker #4: We expect that the majority of these bottlenecks can be addressed by mid-2027. In parallel with addressing the chute infrastructure, in PB2 and 3, we're also continuing to work to prepare for a future startup of production block 1S, and advancing a series of de-risking initiatives on surface drainage and other risk mitigation strategies including the recent installation of new imaging technology to enhance cave monitoring.

Speaker #4: We understand the engineered solution to this issue but it will take time to make the modifications which limit production in PB2 and PB3 to what our existing chute designs can handle.

Speaker #4: We expect that the majority of these bottlenecks can be addressed by mid-2027. In parallel with addressing the chute infrastructure in PB2 and 3, we're also continuing to work to prepare for a future startup of production block 1S, and advancing a series of de-risking initiatives on surface drainage and strategies, including the recent installation of new imaging technology to enhance cave monitoring.

Speaker #4: Our current forecast reflects our best estimate of the timeframe to address the early in our initial ramp-up, and a number of factors could affect rates, positively or negatively, as we go through the coming months.

Speaker #4: This is a timing issue with a designed, engineered solution, not a significant cost issue, and not a change in the ultimate recovery of the resource.

Speaker #4: Our current forecast reflects our best estimate of the timeframe to address the current bottleneck. Still very early in our initial ramp-up and a number of factors could affect rates positively or negatively as we go through the coming months.

Kathleen Quirk: Our current forecast reflects our best estimate of the timeframe to address the current bottleneck. Still very early in our initial ramp-up, and a number of factors could affect rates positively or negatively as we go through the coming months. This is a timing issue with a designed engineering solution, not a significant cost issue, and not a change in the ultimate recovery of the resource. We're confident in the ability to restore large-scale production safely and efficiently as we go forward. On slide eight, just for some background, we provide a summary of what we presented in January and an update of our current status. As indicated, the initial restart commenced slightly ahead of our schedule. We were previously targeting production rates in PB2 and PB3 to ramp up to 100,000 tons per day in the H2 of this year.

Speaker #4: We're confident in the ability to restore large-scale production safely and efficiently as we go forward. On slide 8, just for some background, we provide a summary of what we presented in January and an update of our current status.

Speaker #4: This is a timing issue with a designed, engineered solution not a significant cost issue and not a change in the ultimate recovery of the resource.

Speaker #4: As indicated, the initial restart commenced slightly ahead of our schedule. We were previously targeting production rates in PB2 and PB3 to ramp up to 100,000 tons per day in the second half of this year.

Speaker #4: With the current material handling constraints, we now expect to be limited to approximately 60,000 tons per day, from production blocks 2 and 3, in the second half of 2026, increasing to the 90,000-ton-per-day range by mid-2027, as modifications to ore loading infrastructure are completed over the next several months.

Speaker #4: With the current material handling constraints, we now expect to be limited to approximately 60,000 tons per day from production blocks 2 and 3 in the second half of 2026, increasing to the 90,000-ton-per-day range by mid-2027 as modifications to ore loading infrastructure are completed over the next several months.

Kathleen Quirk: With the current material handling constraints, we now expect to be limited to approximately 60,000 tons per day from production blocks 2 and 3 in H2 2026, increasing to the 90,000 ton per day range by mid-2027 as modifications to ore loading infrastructure are completed over the next several months. There's additional information in the reference materials on page 39 that provides details on the ramp-up. On slide 9, this is an illustration of the draw point comparison of the current draw points compared to September 2025. This is a plan view of the GBC extraction level with draw points in PB2 and 3 color-coded to show the number of wet and dry draw points prior to suspending mining in September 2025 compared to what we're currently seeing today.

Speaker #4: As additional information in the reference materials on page 39 that provides details on the ramp-up. On slide 9, and this is an illustration of the draw point comparison of the current draw points compared to September of 2025.

Speaker #4: This is a planned view of the GBC extraction level, with draw points in PB2 and 3 color-coded to show the number of wet and dry draw points prior to suspending mining in September 2025, compared to what we're currently seeing today.

Speaker #4: This is a planned view of the GBC extraction level with draw points in PB2 and 3, color-coded to show the number of wet and dry draw points prior to suspending mining in September 2025, compared to what we're currently seeing today.

Speaker #4: As shown in September 2025, 30% of the total 635 active draw points were wet, compared with 45% currently. A 50% increase in the wet draw points.

Speaker #4: As shown in September 2025, 30% of the total 635 active draw points were wet compared with 45% currently. A 50% increase in the wet draw points.

Speaker #4: For blending purposes, we require a minimum of 1:1 ratio of dry to wet material measured within each panel, to meet the requirements of our existing chute design.

Kathleen Quirk: As shown in September 2025, 30% of the total 635 active draw points were wet, compared with 45% currently. A 50% increase in the wet draw points. For blending purposes, we require a minimum of 1:1 ratio of dry to wet material measured within each panel to meet the requirements of our existing chute design. Currently, there are 10 panels out of a total of 23, compared to only 1 in September, which do not meet the 1:1 dry-to-wet ratio criteria, resulting in a de-rating of production until the chute modifications are in service. We're continuing to monitor the draw points to determine potential changes and the possibility that conditions could become drier as mining rates continue. However, we believe proceeding with these modifications will provide more robust material handling systems and enhance flexibility as we go forward over the long term.

Speaker #4: Currently, there are 10 panels out of a total of 23, compared to only one in September, which do not meet the 1:1 dry to wet ratio criteria, resulting in a de-rating of production until the chute modifications are in service.

Speaker #4: For blending purposes, we require a minimum of 1:1 ratio of dry to wet material measured within each panel to meet the requirements of our existing chute design.

Speaker #4: Currently, there are 10 panels out of a total of 23 compared to only 1 in September which do not meet the 1:1 dry to wet ratio criteria resulting in a de-rating of production until the chute modifications are in service.

Speaker #4: We're continuing to monitor the draw points, to determine potential changes and the possibility that conditions could become drier as mining rates continue. However, we believe proceeding with these modifications will provide more robust material handling systems and enhanced flexibility, as we go forward over the long term.

Speaker #4: We're continuing to monitor the draw points to determine potential changes and the possibility that conditions could become drier as mining rates continue. However, we believe proceeding with these modifications will provide more robust material handling systems and enhance flexibility as we go forward over the long term.

Speaker #4: On slide 10, we show a diagram to illustrate the mine layout and the planned modifications downstream of the extraction level. As illustrated, mining occurs on the extraction level.

Speaker #4: And that's not where the issue is. The issue is with the ore sent to the haulage level through our ore and chute passes. The bottleneck we are addressing relates to the chutes that are used to load the automated trains at the haulage level, and we show photos of the current chute design and the replacement equipment to regulate the flow of wet material into the rail cars.

Speaker #4: On slide 10, we show a diagram to illustrate the mine layout and the planned modifications downstream of the extraction level. As illustrated, mining occurs on the extraction level.

Kathleen Quirk: On slide 10, we show a diagram to illustrate the mine layout and the plan modifications downstream of the extraction level. As illustrated, mining occurs on the extraction level, and that's not where the issue is. The issue is with the ore sent to the haulage level through our ore and chute passes. The bottleneck we are addressing relates to the chutes that are used to load the automated trains at the haulage level, and we show photos of the current chute design and the replacement equipment to regulate the flow of wet material into the rail cars. This is a robust solution. There's additional information on slide 37 in the reference materials to show you the design of these regulators. Summing this up, we provide, on slide 11, three-fourths of PTFI's revised five-year production forecast. We've incorporated adjustments to our ramp-up schedule.

Speaker #4: And that's not where the issue is. The issue is with the ore sent to the haulage level through our ore and chute passes. The bottleneck we're addressing relates to the chutes that are used to load the automated trains at the haulage level.

Speaker #4: This is a robust solution, there's additional information on slide 37 in the reference materials, to show you the design of these regulators. Summing this up, we provide on slide 11, three ports of PTFIs revised five-year production forecast.

Speaker #4: And we show photos of the current chute design and the replacement equipment to regulate the flow of wet material into the rail cars. This is a robust solution that is additional information on slide 37 in the reference materials.

Speaker #4: We've incorporated adjustments to our ramp-up schedule, and over the five years, the revision for the Glassburg District reflects an approximate 9% in reduction for copper and 7% for gold, with the largest impacts in 2026 and 2027.

Speaker #4: To show you the design of these regulators. Summing this up, we provide on slide 11 three ports of PTFI's revised five-year production forecast. We've incorporated adjustments to our ramp-up schedule, and over the five years, the revision for the Glassburg District reflects an approximate 9% reduction for copper and 7% for gold, with the largest impacts in 2026 and 2027.

Speaker #4: Again, this material is not lost and is expected to be recovered over time. As I mentioned, we're in the early stages of the ramp-up, there are a number of factors which provide upside to these estimates, as well as a number of risks.

Kathleen Quirk: Over the five years, the revision for the Grasberg District reflects an approximate 9% in reduction for copper and 7% for gold, with the largest impacts in 2026 and 2027. Again, this material is not lost and is expected to be recovered over time. As I mentioned, we're in the early stages of the ramp up. There are a number of factors which provide upside to these estimates, as well as a number of risks. Again, this is not a resource recovery issue or a significant cost issue to resolve. It's a timing issue, and we will work to optimize the plans as we go forward. Our team is highly experienced, and we're confident in our ability to successfully address the current bottlenecks and restore large-scale production safely and efficiently. Moving to our growth, which is a very exciting feature of Freeport.

Speaker #4: Again, this is not a resource recovery issue or a significant cost issue to resolve. It's a timing issue and we will work to optimize the plans as we go forward.

Speaker #4: Again, this material is not lost and is expected to be recovered over time. As I mentioned, we're in the early stages of the ramp-up.

Speaker #4: There are a number of factors which provide upside to these estimates, as well as a number of risks. Again, this is not a resource recovery issue or a significant cost issue to resolve.

Speaker #4: Our team is highly experienced and we're confident in our ability to successfully address the current bottlenecks and restore large-scale production safely and efficiently. Moving to our growth, which is very exciting feature of FREEPORT, as I mentioned, we're looking at the fundamental outlook for copper.

Speaker #4: It's a timing issue and we will work to optimize the plans as we go forward. Our team is highly experienced and we're confident in our ability to successfully address the current bottlenecks and restore large-scale production safely and efficiently.

Speaker #4: It's very clear, additional copper supplies are required to support energy infrastructure, new technologies, and more advanced societies. At FREEPORT, we benefit from a portfolio of organic growth opportunities which can be developed from our known resources in jurisdictions where we have established history and experience.

Speaker #4: Moving to our growth, which is very exciting feature of FREEPORT, as I mentioned, we're looking at the fundamental outlook for copper; it's very clear additional copper supplies are required to support energy infrastructure.

Kathleen Quirk: As I mentioned, we're looking at the fundamental outlook for copper. It's very clear additional copper supplies are required to support energy infrastructure, new technologies, and more advanced societies. At Freeport, we benefit from a portfolio of organic growth opportunities, which can be developed from our known resources in jurisdictions where we have established history and experience. Our projects in Indonesia also have the benefit of high gold content that come with copper. Because our projects are brownfield in nature, we benefit from leveraging existing infrastructure, economies of scale, experienced workforces, and relationships with key stakeholders to move more quickly with less risk than a greenfield project. We're entering a period of growth in our Americas business with near and medium-term opportunities to scale our leach initiative and double production at our Bagdad mine in Arizona.

Speaker #4: New technologies and more advanced societies. At FREEPORT, we benefit from a portfolio of organic growth opportunities which can be developed from our known resources in jurisdictions where we have established history and experience.

Speaker #4: Our projects in Indonesia also have the benefit of high gold content that come with copper. Because our projects are brownfield in nature, we benefit from leveraging existing infrastructure economies of scale experienced workforces and relationships with key stakeholders to move more quickly with less risk than a greenfield project.

Speaker #4: We're entering a period of growth in our America's business, with near and medium-term opportunities to scale our leach initiative and double production at our Baghdad mine in Arizona.

Speaker #4: We have longer-term growth in the Safford Lone Star District and an exciting project at Alhambra in Chile. We're using innovative approaches with our projects, to improve efficiencies reduce costs and reduce capital intensity and shorten the lead times for our projects.

Speaker #4: We're entering a period of growth in our America's business with near and medium-term opportunities to scale our leach initiative and double production at our Baghdad mine in Arizona.

Speaker #4: We have longer-term growth in the Safford Lone Star District and an exciting project at Allabra in Chile. We're using innovative approaches with our projects to improve efficiencies, reduce costs, and reduce capital intensity and shorten the lead times for our projects.

Speaker #4: The high potential, low-cost innovative leach initiative is a great example of this, and it's likely one of the highest NPV opportunities across the industry.

Kathleen Quirk: We have longer-term growth in the Safford-Lone Star District and an exciting project at El Abra in Chile. We're using innovative approaches with our projects to improve efficiencies, reduce costs, and reduce capital intensity, and shorten the lead times for our projects. The high-potential, low-cost innovative leach initiative is a great example of this and is likely one of the highest NPV opportunities across the industry. We have projects in the 2026 pipeline to test injection of heated solutions into our stockpiles, which together with additives, have potential for significant recovery gains. This year, particularly in H2, will be an important year as we get results from our heat trials, advance our additive deployment, and work to scale next year to 400 million pounds per annum from this initiative and to define our path to 800 million pounds by as soon as 2030.

Speaker #4: We have projects in the 2026 pipeline to test injection of heated solutions into our stockpiles which together with additives have potential for significant recovery gains.

Speaker #4: The high-potential, low-cost, innovative leach initiative is a great example of this and is likely one of the highest NPV opportunities across the industry.

Speaker #4: This year, particularly in the second half, will be an important year as we get results from our heat trials advance our additive deployment and work to scale next year to 400 million pounds per annum from this initiative and to define our path to 800 million pounds by as soon as 2030.

Speaker #4: We have projects in the 2026 pipeline to test injection of heated solutions into our stockpiles which together with additives have potential for significant recovery gains.

Speaker #4: This year, particularly in the second half, will be an important year as we get results from our heat trials, advance our additive deployment, and work to scale next year to 400 million pounds per annum from this initiative, and to define our path to 800 million pounds by as soon as 2030.

Speaker #4: The expansion opportunity at Baghdad is moving toward an investment decision. We're advancing engineering, retesting our capital cost estimates, and economic evaluations, and working with our vendors to secure pricing on major components.

Speaker #4: We're continuing to advance our work on tailings infrastructure there, to further enhance optionality on the timing of the project. As a reminder, there are no permitting hurdles, and we've done a significant amount of work planning and early works so that we can complete the project within a three to four-year timeframe.

Kathleen Quirk: The expansion opportunity at Bagdad is moving toward an investment decision. We're advancing engineering, retesting our capital cost estimates and economic evaluations, and working with our vendors to secure pricing on major components. We're continuing to advance our work on tailings infrastructure there to further enhance optionality on the timing of the project. As a reminder, there are no permitting hurdles, and we've done a significant amount of work planning and early works so that we can complete the project within a 3- to 4-year time frame. Studies are continuing in the Safford Lone Star District to evaluate the optimal expansion and development options, and we continue to work to capitalize on the large undeveloped resource we have at Safford Lone Star in an established US mining district. At El Abra, we have a great opportunity with our partner Codelco to develop a large-scale expansion.

Speaker #4: We're continuing to advance our work on tailings infrastructure there to further enhance optionality on the timing of the project. As a reminder, there are no permitting hurdles, and we've done a significant amount of work planning and early works so that we can complete the project within a three- to four-year timeframe.

Speaker #4: Studies are continuing in the Safford Lone Star District, to evaluate the optimal expansion and development options, and we continue to work to capitalize on the large undeveloped resource we have at Safford Lone Star and an established U.S.

Speaker #4: Studies are continuing in the Safford Lone Star District to evaluate the optimal expansion and development options and we continue to work to capitalize on the large undeveloped resource we have at Safford Lone Star and an established US mining district.

Speaker #4: mining district. At Alhambra, we have a great opportunity with our partner Codelco to develop a large-scale expansion. This is a significant resource with total copper reserves at Alhambra approaching the size of the large position we have at Cerro Verde.

Speaker #4: As Richard mentioned, we were in Chile last week and the project is being received very positively by our stakeholders. The Chilean government is enthusiastic about the project, and is working with us to achieve a timely review of the application.

Speaker #4: At Allabra, we have a great opportunity with our partner CADELCO to develop a large-scale expansion. This is a significant resource, with total copper reserves at Allabra approaching the size of the large position we have at Cerro Verde.

Kathleen Quirk: This is a significant resource with total copper reserves at El Abra approaching the size of the large position we have at Cerro Verde. As Richard mentioned, we were in Chile last week and the project is being received very positively by our stakeholders. The Chilean government is enthusiastic about the project and is working with us to achieve a timely review of the application. We're also continuing to progress the Kucing Liar project in Indonesia to sustain a low-cost, long-term production profile in this prolific district. On slide 13, to wrap up my comments, and then Marie will cover the financials. A significant portion of our reserves, resources, and future growth are in the United States. Freeport is an important American copper producer and is by far the largest contributor to the US copper market, with an established and successful franchise dating back to the late 1800s.

Speaker #4: We're also continuing to progress the Kuching Liar project in Indonesia, to sustain a low-cost, long-term production profile, in this prolific district. On slide 13, to wrap up my comments and then Marie will cover the financials, a significant portion of our reserves resources and future growth are in the United States.

Speaker #4: As Richard mentioned, we were in Chile last week and the project is being received very positively by our stakeholders. The Chilean government is enthusiastic about the project and is working with us to achieve a timely review of the application.

Speaker #4: We're also continuing to progress the Kuchin Liar project in Indonesia to sustain a low-cost, long-term production profile in this prolific district. On slide 13, to wrap up my comments and then Marie will cover the our reserves resources and future growth are in the United States.

Speaker #4: 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 back to the late 1800s.

Speaker #4: We call ourselves America's copper champion, and we are aggressively pursuing a series of initiatives to enhance our U.S. business through innovation, automation, and investment in expanded facilities.

Speaker #4: FREEPORT is an important American copper producer and is by far the largest contributor to the US copper market with an established and successful franchise dating back to the late 1800s.

Speaker #4: These initiatives are designed to add production at a low incremental cost and improve profitability and resiliency of our valuable U.S. business. In an industry where development lead times can span more than a decade, our U.S.

Kathleen Quirk: We call ourselves America's copper champion, and we are aggressively pursuing a series of initiatives to enhance our US business through innovation, automation, and investment in expanded facilities. These initiatives are designed to add production at a low incremental cost and improve profitability and resiliency of our valuable US business. In an industry where development lead times can span more than a decade, our US business is strongly positioned with the potential for a 60% increase in copper production over the next several years. Our team is excited about these opportunities, and they represent a significant value driver for all of Freeport. As I mentioned, we're working to improve our cost position in the US, and we've got our sights on targeted reductions as we go into 2027 and beyond.

Speaker #4: business is strongly positioned with the potential for a 60% increase in copper production over the next several years. Our team is excited about these opportunities and they represent a significant value driver for all of FREEPORT.

Speaker #4: These initiatives are designed to add production at a low incremental cost and improve profitability and resiliency of our valuable US business. In an industry where development lead times can span more than a decade, our US business is strongly positioned with the potential for a 60% increase in copper production over the next several years.

Speaker #4: As I mentioned, we're working to improve our cost position in the U.S. and we've got our sites on targeted reductions as we go into 2027 and beyond, while we're currently facing some new challenges with rising energy costs and other consumables, the work we are doing within our control will make our U.S.

Speaker #4: Our team is excited about these opportunities, and they represent a significant value driver for all of Freeport. As I mentioned, we're working to improve our cost position in the US, and we've got our sights on targeted reductions as we go into 2027 and beyond. While we're currently facing some new challenges with rising energy costs and other consumables, the work we are doing within our control will make our US business more resilient, more profitable, and meaningfully more valuable.

Speaker #4: business more resilient, more profitable, and meaningfully more valuable. I'll turn the call over to Marie, who will review our outlook, and then we'll take our questions.

Speaker #4: Your questions. Thanks.

Kathleen Quirk: While we're concurrently facing some new challenges with rising energy costs and other consumables, the work we are doing within our control will make our US business more resilient, more profitable, and meaningfully more valuable. I'll turn the call over to Marie, who will review our outlook, and then we'll take your questions. Thanks.

Kathleen Quirk: While we're concurrently facing some new challenges with rising energy costs and other consumables, the work we are doing within our control will make our US business more resilient, more profitable, and meaningfully more valuable. I'll turn the call over to Maree, who will review our outlook, and then we'll take your questions. Thanks.

Speaker #2: Thanks, Kathleen. On slide 14, we show our three-year outlook for sales volumes of copper, gold, and molybdenum. The outlook incorporates the adjusted ramp-up schedule for Grasberg, the Kathleen reviewed earlier, which is the primary change from our prior estimates.

Speaker #4: I'll turn the call over to Marie who will review our outlook and then we'll take our questions. Your questions. Thanks.

Speaker #2: As discussed earlier, these changes are timing in nature, and will be recovered in the future. We expect growing volumes in 2027 and 2028 as we reach full recovery at Grasberg.

Maree Robertson: Thanks, Kathleen. On slide 14, we show our three-year outlook for sales volumes of copper, gold, and molybdenum. The outlook incorporates the adjusted ramp-up schedule for Grasberg that Kathleen reviewed earlier, which is the primary change from our prior estimates. As discussed earlier, these changes are timing in nature and will be recovered in the future. We expect growing volumes in 2027 and 2028 as we reach full recovery at Grasberg. We provide quarterly estimates on page 27 of the reference materials. As ramp-up progresses, our H2 volumes are expected to be approximately 30% higher for copper and approximately 50% higher for gold compared with H1, driving earnings and cash flow in the balance of the year. On slide 15, we highlight renewed cost pressures we are experiencing since the onset of the conflict with Iran in late February.

Speaker #2: This is the primary change from our prior estimates. As discussed earlier, these changes are timing in nature and will be recovered in the future.

Speaker #2: We provide quarterly estimates on page 27 of the reference materials. As ramp-up progresses, our second half volumes are expected to be approximately 30% higher for copper, and approximately 50% higher for gold, compared with the first half, driving earnings and cash flow in the balance of the year.

Speaker #2: We expect growing volumes in 2027 and 2028 as we reach full recovery at Grasberg. We provide quarterly estimates on page 27 of the reference materials.

Speaker #2: On slide 15, we highlight renewed cost pressures we are experiencing since the onset of the conflict with Iran in late February. The price of diesel fuel which we use to support our haul trucks in the Americas and for our portion of our power plant in Indonesia has been volatile, with the most significant impacts in Indonesia.

Speaker #2: As ramp-up progresses, our second half volumes are expected to be approximately 30% higher for copper and approximately 50% higher for gold compared with the first half.

Speaker #2: Driving earnings and cash flow in the balance of the year. On slide 15, we highlight renewed cost pressures we are experiencing since the onset of the conflict with Iran in late February.

Speaker #2: To date, it has been more of a cost issue than a sourcing issue. But we continue to monitor the situation carefully. For reference, the sharp rise in diesel prices in March equates to an approximate $500 million cost increase on an annualized basis.

Speaker #2: The price of diesel fuel which we use to support our haul trucks in the Americas and for our portion of our power plant in Indonesia has been volatile.

Maree Robertson: The price of diesel fuel, which we use to support our haul trucks in the Americas and for a portion of our power plant in Indonesia, has been volatile, with the most significant impacts in Indonesia. To date, it has been more of a cost issue than a sourcing issue, but we continue to monitor the situation carefully. For reference, the sharp rise in diesel prices in March equates to an approximate $500 million cost increase on an annualized basis. We are also monitoring the sulfuric acid situation, where prices more than doubled on the spot market. We do not have significant exposure to the spot market, and we are further insulated to the sulfuric acid market volatility through our natural hedge from our smelters. We have incorporated recent diesel prices in our updated forecast and have also incorporated updated assumptions for higher gold and molybdenum prices.

Speaker #2: With the most significant impacts in Indonesia. To date, it has been more of a cost issue than a sourcing issue. But we continue to monitor the situation carefully.

Speaker #2: We are also monitoring the sulfuric acid situation where prices more than doubled on the spot market. We do not have significant exposure to the spot market, and we are further insulated to the sulfuric acid market volatility through our natural hedge from our smelters.

Speaker #2: For reference, the sharp rise in diesel prices in March equates to an approximate $500 million cost increase on an annualized basis. We are also monitoring the sulfuric acid situation where prices more than doubled on the spot market.

Speaker #2: We have incorporated recent diesel prices in our updated forecast and have also incorporated updated assumptions for higher gold and molybdenum prices. With these updates, and the revised production profile, our current outlook for net unit costs is expected to average $1.95 per pound of copper, for the year compared with the prior estimate of $1.75 per pound.

Speaker #2: We do not have significant exposure to the spot market and we are further insulated to the sulfuric acid market volatility through our natural hedge from our smelters.

Speaker #2: The primary driver of the change reflects the lower contribution of Grasberg volumes. Putting together our projected volumes and cost estimates, we show modeled results on slide 16 for EBITDA and cash flow at various copper prices, ranging from $5 to $7 copper.

Maree Robertson: With these updates and the revised production profile, our current outlook for net unit costs is expected to average $1.95 per pound of copper for the year, compared with the prior estimate of $1.75 per pound. The primary driver of the change reflects the lower contribution of Grasberg volumes. Putting together our projected volumes and cost estimates, we show modeled results on Slide 16 for EBITDA and cash flow at various copper prices ranging from $5 to $7 copper. While we do not project prices, we modified the range to show sensitivities with upside and downside to the current prices. These are modeled results using the average of 2027 and 2028, with current volume and cost estimates and holding gold flat at $4,500 per ounce and molybdenum flat at $25 per pound.

Speaker #2: For the year compared with the prior estimate of $1.75 per pound. The primary driver of the change reflects the lower contribution of grasswork volumes.

Speaker #2: Whilst we do not project prices, we modified the range to show sensitivities with upside and downside to the current prices. These are modeled results using the average of 2027 and 2028 with current volume and cost estimates and holding gold flat at $4,500 per ounce and molybdenum flat at $25 per pound.

Speaker #2: Putting together our projected volumes and cost estimates, we show modeled results on slide 16 for EBITDA and cash flow at various copper prices ranging from $5 to $7 copper.

Speaker #2: Whilst we do not project prices, we modify the range to show sensitivities with upside and downside to the current prices. These are modeled results using the average of 2027 and 2028, with current volume and cost estimates, and holding gold flat at $4,500 per ounce and molybdenum flat at $25 per pound.

Speaker #2: Annual EBITDA would range from approximately $14 billion per annum at $5 copper, to $21 billion at $7 copper. With operating cash flows ranging from approximately $10 billion per year at $5, to $16 billion at $7 copper.

Speaker #2: Annual EBITDA would range from approximately $14 billion per annum at $5 copper to $21 billion at $7 copper. With operating cash flows ranging from approximately $10 billion per year at $5 to $16 billion at $7 copper.

Speaker #2: We show sensitivities to various commodities on the right. You will note we're highly leveraged to copper prices, with each 10 cents per pound change equating to approximately $400 million in annual EBITDA in the 2027-28 periods.

Maree Robertson: Annual EBITDA would range from approximately $14 billion per annum at $5 copper to $21 billion at $7 copper, with operating cash flows ranging from approximately $10 billion per year at $5 to $16 billion at $7 copper. We show sensitivities to various commodities on the right. You will note we're highly leveraged to copper prices, with each 10 cents per pound change equating to approximately $400 million in annual EBITDA in the 2027-2028 periods. We will also benefit from improving gold prices, with each $100 per ounce change in price approximating $110 million in annual EBITDA. With our long-lived reserves and large-scale production, we are well positioned to generate substantial cash flow to fund future organic growth and cash returns under our performance-based payout framework. Slide 17 shows our current forecast for capital expenditures in 2026 and 2027.

Speaker #2: We show sensitivities to various commodities on the right. You will note we're highly leveraged to copper prices with each 10 cents per pound change equating to approximately $400 million in annual EBITDA in the 2027-28 periods.

Speaker #2: We will also benefit from improving gold prices with each $100 per ounce change in price, approximating $110 million in annual EBITDA. With our long-leave reserves and large-scale production, we are well positioned to generate substantial cash flow to fund future organic growth and cash returns under our performance-based payout framework.

Speaker #2: We will also benefit from improving gold prices with each $100 per ounce change in price approximating $110 million in annual EBITDA. With our long-lived reserves and large-scale production, we are well positioned to generate substantial cash flow to fund future organic growth and cash returns under our performance-based payout framework.

Speaker #2: Slide 17 shows our current forecast for capital expenditures in 2026 and 2027. Capital estimates and are expected to approximate $4.3 billion in 2026 and $4.5 billion in 2027.

Speaker #2: Slide 17 shows our current forecast for capital expenditures in 2026 and 2027. Capital expenditures are similar to our prior estimates and are expected to approximate $4.3 billion in 2026 and $4.5 billion in 2027.

Speaker #2: The discretionary projects are expected to approximate $1.6 to $1.7 billion per year in 2026 and 2027. With roughly 50% related to the Kitchen Lier development and the LNGE project at Grasberg.

Maree Robertson: Capital expenditures are similar to our prior estimates and are expected to approximate $4.3 billion in 2026 and $4.5 billion in 2027. The discretionary projects are expected to approximate $1.6 to $1.7 billion per year in 2026 and 2027, with roughly 50% related to the Kucing Liar development and the LNG project at Grasberg. The balance includes acceleration of tailings and other infrastructure to support Bay Gate expansion, the Atlantic Copper Circular Project, which is expected to be completed during 2026, and capitalized interest. The discretionary category reflects the capital investments we are making in new projects that, under our financial policy, are funded with the 50% of available cash that is not distributed. These projects are value-enhancing initiatives and are detailed on slide 37 in our reference materials.

Speaker #2: 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 during 2026, and capitalized interest.

Speaker #2: The discretionary category reflects the capital investments we are making in new projects that, under our financial policy, are funded with the 50% of available cash that is not distributed.

Speaker #2: The balance includes acceleration of tailings and other infrastructure to support that expansion the Atlantic Copper Circular Project which is expected to be completed during 2026 and capitalized interest.

Speaker #2: These projects are value-enhancing initiatives and are detailed on slide 37 in our reference materials. We continue to carefully manage capital expenditure and will continue to deploy capital strategically to projects with the best return and risk-reward profiles.

Speaker #2: Finally, on slide 18, we reiterate the financial policy priorities centered on a strong balance sheet cash returns to shareholders and investments in value-enhancing growth projects.

Maree Robertson: We continue to carefully manage capital expenditure and will continue to deploy capital strategically to projects with the best return and risk-reward profiles. Finally, on slide 18, we reiterate the financial policy priorities centered on a strong balance sheet, cash returns to shareholders, and investments in value-enhancing growth projects.

Speaker #2: Our balance sheet is solid with investment-grade ratings, strong credit metrics, and flexibility within our debt targets to execute on our projects. We have no significant debt maturities during 2026 and have substantial flexibility for funding the 2027 maturities.

Speaker #2: Finally, on slide 18, we reiterate the financial policy priorities centered on a strong balance sheet cash returns to shareholders and investments in value-enhancing growth projects.

Speaker #2: Our balance sheet is solid, with investment-grade ratings, strong credit metrics, and flexibility within our debt targets to execute on our projects. We have no significant debt maturities during 2026 and have substantial flexibility for funding the 2027 maturities.

Speaker #2: Since adopting our financial policy in 2021, we have distributed $6 billion to shareholders through dividends and share purchases. And have an attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders.

Kathleen Quirk: Our balance sheet is solid with investment-grade ratings, strong credit metrics, and flexibility within our debt targets to execute on our projects. We have no significant debt maturities through 2026 and have substantial flexibility for funding the 2027 maturities. Since adopting our financial policy in 2021, we have distributed $6 billion to shareholders through dividends and share purchases, and have an attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders. 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. Thank you for your attention. We'll now take your questions.

Maree Robertson: Our balance sheet is solid with investment-grade ratings, strong credit metrics, and flexibility within our debt targets to execute on our projects. We have no significant debt maturities through 2026 and have substantial flexibility for funding the 2027 maturities. Since adopting our financial policy in 2021, we have distributed $6 billion to shareholders through dividends and share purchases, and have an attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders. 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. Thank you for your attention. We'll now take your questions.

Speaker #2: 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.

Speaker #2: Thank you for your attention. We'll now take your questions.

Speaker #2: 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.

Speaker #1: And ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, press star 1 on your touchstone phone.

Speaker #1: If your question has been answered or you wish to remove yourself from the queue, please press star 1 again. If you are using a speakerphone, please pick up your handset before pressing the numbers.

Speaker #2: Thank you for your attention. We'll now take your questions.

Speaker #1: And, ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star one on your touch-tone phone.

Speaker #1: We ask that you please limit your questions to one. If you have additional questions, please return to the queue. One moment, please, for our first question.

Operator: Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, press star one on your touchtone phone. If your question has been answered or you wish to remove yourself from the queue, please press star one again. If you are using a speakerphone, please pick up your handset before pressing the numbers. We ask that you please limit your questions to one. If you have additional questions, please return to the queue. One moment, please, for our first question. Our first question will come from the line of Carlos de Alba with Morgan Stanley. Please go ahead.

Speaker #1: If your question has been answered, or you wish to remove yourself from the queue, please press star one again. If you are using the speakerphone...

Speaker #1: Our first question will come from the line of Carlos de Alba with Morgan Stanley. Please go ahead.

Speaker #1: Please pick up your handset before pressing the numbers . We ask that you please limit your questions to one . If you have additional questions , please return to the queue .

Speaker #3: Yeah. Thank you very much, good morning, everyone. So maybe I wanted to explore a little bit on the level of confidence that you have on the new guidance for Grasberg.

Speaker #1: One moment please . For our first question , our first question will come from the line of Carlos de Alba with Morgan Stanley .

Speaker #3: Obviously, a surprise on today's revisions, but as you see as you move forward, are there any specific points or areas where you think there might be a higher risk for the potential reductions to production or ramp-up that maybe we should be aware of that might realize or not, but you could maybe Kathleen highlight for us what those would be that would be great.

Speaker #1: Please go ahead

Speaker #2: Yes , thank you very much . Good morning everyone . So maybe I wanted to explore a little bit on the level of confidence that you have on the new guidance for for Grantsburg .

Carlos de Alba: Yeah. Thank you very much. Good morning, everyone. Maybe I wanted to explore a little bit on the level of confidence that you have on the new guidance for Grasberg. Well, obviously a surprise on the latest revisions. As you see, as you move forward, are there any specific points or areas where you think there might be a higher risk for the potential reductions to production or ramp up that maybe we should be aware of, that might materialize or not, but if you could maybe, Kathleen, highlight for us what those would be, that'd be great.

Carlos De Alba: Yeah. Thank you very much. Good morning, everyone. Maybe I wanted to explore a little bit on the level of confidence that you have on the new guidance for Grasberg. Well, obviously a surprise on the latest revisions. As you see, as you move forward, are there any specific points or areas where you think there might be a higher risk for the potential reductions to production or ramp up that maybe we should be aware of, that might materialize or not, but if you could maybe, Kathleen, highlight for us what those would be, that'd be great.

Speaker #2: Obviously , I have a surprise on the today's revisions , but as you

Speaker #3: Thank you.

Speaker #4: Thank you, Carlos. The main thing that we are doing to resolve the issue is to install these regulators into the shoe galleries. Right now, we have the capacity to mine the material but we're limited because of the need to have a certain type of consistency to go through the shoes.

Kathleen Quirk: Yeah.

Carlos de Alba: Thank you.

Carlos De Alba: Thank you.

Kathleen Quirk: Thank you, Carlos. The main thing that we are doing to resolve the issue is to install these regulators into the chute galleries. Right now, we have the capacity to mine the material, but we're limited because of the need to have a certain type of consistency to go through the chutes. When we think about what the risks to the ramp-up are at this point, it is really a construction schedule, a delivery schedule from our vendor who we're already working with. Some of the equipment is already on site. It'll be installed on a phased basis, and we have, over the coming months, additional equipment that will be coming to us so that we can install these, we call them Spillminator, onto the chutes.

Speaker #4: And so when we think about what the risks to the ramp-up are at this point, it is a really a construction schedule a delivery schedule from our vendor who we've already been working with.

Speaker #4: We've got the some of the equipment is already on site. It'll be installed on a phase basis. And we have over the coming months additional equipment that will be coming to us so that we can install these we call them spill manators into the shoes.

Speaker #3: On on site , it'll be installed on a , a phased basis . And we have over the coming months , additional equipment that that will be coming to us .

Speaker #4: So really, it's a situation where the bottlenecks will be addressed by the installation of this equipment. And we have equipment on site now. We've got equipment on order.

Speaker #3: So that we can install these . We call them spill monitors into the onto the chutes . So really it's , it's a , a situation where the , the , the bottlenecks will be addressed by the installation of this equipment .

Speaker #4: And it's a matter of meeting that execution timetable. I want to go back to this team and what this team accomplishes in terms of the ability to construct things at Grasberg.

Kathleen Quirk: Really it's a situation where the bottlenecks will be addressed by the installation of this equipment, and we have equipment on site now. We've got equipment on order, and it's a matter of meeting that execution timetable. I want to go back to this team and what this team accomplishes in terms of the ability to construct things at Grasberg. This is not a lot different than a lot of the things that the team has done in the past. The work that they did to prepare for restart was a really busy schedule with a lot of moving pieces, and the team did an excellent job with the support from our centralized team to execute the plan. We'll approach this in the very same way.

Speaker #3: And we have equipment on site now . We've got equipment on order and it's a matter of meeting that that execution timetable I want to go back to this team and what this team accomplishes in terms of the ability to construct things at Grasberg This is not a lot different than a lot of the things that the team has done in the past The work that they did to prepare for restart was , was a really busy schedule .

Speaker #4: This is not a lot different than a lot of the things that the team has done in the past. The work that they did to prepare for restart was a really busy schedule.

Speaker #4: A lot of moving pieces. And the team did an excellent job with the support from our centralized team to execute the plan. And we'll approach this in the very same way.

Speaker #4: It's got one of the highest net present values in the business right now to get this up and running. And our team is all over it.

Speaker #3: A lot of moving pieces , and the team did an excellent job with the support from our centralized team to , to execute the plan and we'll we'll approach this in the very same way .

Speaker #4: We have confidence in the ability to meet the plan. Now, the risks are that there could be delays in getting the materials. There could be construction delays.

Speaker #3: It's got one of the highest net present values in in the business right now to get this up and running . And our team is , is , is all over it .

Speaker #4: But that has been we've managed that through this plan that we put forward. And we'll stay on top of it until it's done. Mark Johnson is on the call as well.

Kathleen Quirk: It's got one of the highest net present values in the business right now to get this up and running, and our team is all over it. We have confidence in the ability to meet the plan. Now, the risks are that there could be delays in getting the materials. There could be construction delays. But we've managed that through this plan that we put forward, and we'll stay on top of it until it's done. Mark Johnson is on the call as well. Mark, if you want to add any color to what we're doing there, please go ahead.

Speaker #3: We have confidence in the ability to meet the plan now. The risks are that there could be delays in getting the materials.

Speaker #3: There could be construction delays , but that has been we've managed that through this through this plan that we put forward . And we'll stay on top of it until it's until it's done Mark Johnson is on the call as well .

Speaker #4: And Mark, if you want to add any color to what we're doing there, please go ahead.

Speaker #3: Yeah, Kathleen. We've had one of these spill manators what we it was a prototype about a year ago that we called Version 1. What we're installing now is a re-engineered version of that, Version 1.5.

Speaker #3: And Mark , if you want to add any any color to , to what , what we're what we're doing there , please go ahead .

Speaker #4: Yeah, Kathleen, we've had one of these dominators. What we—it was a prototype about a year ago that we called version one.

Speaker #3: We've got the first one installed last week. Independent of some of this recent realization on the shift in material types, so we're testing that starting this weekend.

Mark Johnson: Yeah, Kathleen, we've had one of these Spillminator. It was a prototype about a year ago that we called version 1. What we're installing now is a reengineered version of that, version 1.5. We've got the first one installed last week, independent of some of this recent realization on the shift in material types. We're testing that starting this weekend. As you mentioned, we've got a number more at site. Our fabrication's taking place in Indonesia, and the group that's doing it has been very responsive to our needs. We're looking at ramping up the capacity of that plant in Indonesia. Then also the team is looking at other ways to shorten the construction cycle on the chutes.

Speaker #4: What we're installing now is a re-engineered version of that version 1.5. We've got the first one installed last week, you know, independent of some of this recent realization on the shift in material types.

Speaker #3: As you mentioned, we've got a number more at site. Our fabrication's taking place in Indonesia. And the group that's doing it has been very responsive to our needs.

Speaker #4: So we're testing that starting this weekend , as you mentioned , we've got a number more at site . Our fabrications taking place in Indonesia and the group that's has been very responsive to our our our needs .

Speaker #3: We're looking at wrapping up the capacity of that plant in Indonesia. And then also the team is looking at other ways to shorten the construction cycle on the shoots.

Speaker #3: So what we've taken and what we've put into the plan is what we know we can do. From the past. And then like you mentioned, we'll be continuing to look for things to do that we could optimize and make that installation just that much more simple and quick.

Speaker #4: We're looking at wrapping up the capacity of that plant in Indonesia. And then also the team is looking at other ways to shorten the construction cycle on the shoots.

Speaker #4: So I you know what we've taken and what we've put into the , the plan is what we know we can do from the past .

Speaker #5: Thank you.

Mark Johnson: What we've taken and what we've put into the plan is what we know we can do from the past, and then, like you mentioned, we'll be continuing to look for things to do that we could optimize and make that installation just that much more simple and quick.

Speaker #4: Carlos, one other thing. And Mark can add to this. But we want to reiterate that this is we're in the very early stages of the ramp-up.

Speaker #4: And then like , like you mentioned , we'll be continuing to look for things to do that we could optimize and make that installation just that much more simple .

Speaker #4: And so the sampling that we did of all of the draw points is as of the present time. We have a process where we sample and inspect the draw points on a regular basis.

Speaker #4: And quick

Speaker #5: Thank you .

Speaker #3: Carlos . One other one other thing . And , and , and Mark can add to this , but we want to reiterate that this is we're in the very early stages of the , of the ramp up .

Carlos de Alba: Thank you.

Carlos De Alba: Thank you.

Kathleen Quirk: Carlos, one other thing, and Mark can add to this, but we want to reiterate that we're in the very early stages of the ramp up. The sampling that we did of all of the draw points is, as of the present time, we have a process where we sample and inspect the draw points on a regular basis. As we continue to mine, it could be that some of this bottleneck gets resolved, and our traditional blending systems can accommodate the material. We have not counted on that in this forecast. We've counted on using this more robust system of regulating the flow in the chutes. We could have a situation where the material becomes drier as material is mined. Mark, you can add to that if you'd like.

Speaker #4: As the as we continue to mine, it could be that some of this bottleneck gets resolved and our traditional blending systems can accommodate the material.

Speaker #3: And so the sampling that we did of all of the , the draw points is , you know , as , as of the present time , we have a process where we sample and inspect the draw points on a regular basis as the , as we continue to mine , it could be that some of this bottleneck gets resolved and our our traditional blending systems can accommodate the .

Speaker #4: We have not counted on that in this forecast. We've counted on using this more robust system of regulating the flow in the shoots. But we could have a situation where the material becomes drier as material is mined.

Speaker #3: The material we have not counted on that . In this forecast . We've counted on using this more robust system of , regulating the flow in the shoots .

Speaker #4: And Mark, you can add to that if you'd like.

Speaker #3: Yeah. It was kind of the unfortunate timing of ramping up just as we were doing the forecast process. Really, at the beginning of March, I think our forecast based on the knowledge at that time would have been very similar to the previous estimates.

Speaker #3: But we could have a situation where the material becomes drier . As you know , material is mined . And Mark , you can you can add to that if , if you'd like .

Speaker #4: Yeah , that was kind of the unfortunate timing of ramping up just as we were doing the forecast process , really at the beginning of March .

Speaker #3: So what we've done is Kathleen's mentioned is we started mucking. We had a higher incident of spills occurring. Some of the material that we began mucking shifted to a wetter material.

Mark Johnson: Yeah. It was kind of the unfortunate timing of ramping up just as we were doing the forecast process. Really at the beginning of March, I think our forecast, based on the knowledge at that time, would have been very similar to the previous estimate. What we've done, as Kathleen's mentioned, as we started mucking, we had a higher incident of spills occurring. Some of the material that we began mucking shifted to a wetter material. What we've done is implemented what we know today, and used that as our basis. What we do know is as we muck, the porosity of the material above will improve. That's the sort of upside we might have is that as we get a broader footprint, as we begin mining more draw points, more panels, that some of these could convert back to where they were.

Speaker #4: I think our forecasts, based on the knowledge at that time, would have been very similar to the previous estimates. So what we've done is, as Kathleen's mentioned, as we started mucking, we had a higher incidence of spills occurring.

Speaker #3: So what we've done is implemented what we know today. And used that as our basis or what we do know is as we muck the porosity of the material above will improve.

Speaker #4: Some of the material that we began mucking shifted to a wetter material . So what we've done is implemented what we know today and , and use that as our basis of what we do know is as we muck up the porosity of the material above , will , will improve .

Speaker #3: And that's the sort of upside we might have is that as we get a broader footprint, as we begin mining, more draw points, more panels, that some of these could convert back to where they were.

Speaker #4: And that's the sort of upside we might have is that as we get a broader footprint , as we begin mining more draw points , more panels , that that some of these could convert back to where they were , you know , it's a process where we , we're mucking , we , we do a very frequent assessment .

Speaker #3: It's a process where we as we're mucking, we do a very frequent assessment. So it's a very dynamic process. We already mine each panel as Kathleen mentioned remotely.

Speaker #3: It only takes one draw point within a panel to be wet. That we do the remote mining. So we were set up to do that from the onset.

Speaker #4: So it's a very dynamic process . We , we already mine each panel as Kathleen mentioned , remotely , it only takes one draw point within a panel to be wet that we do the remote mining .

Mark Johnson: It's a process where as we're mucking, we do a very frequent assessment. It's a very dynamic process. We already mine each panel, as Kathleen mentioned, remotely. It only takes one drawpoint within a panel to be wet that we do the remote mining. We were set up to do that from the onset, and now it's just a matter of that ratio within each panel. There's also implications from panels adjacent to a wet panel. The team's also been very innovative on being able to remotely manage other aspects within the panel, like rock breakage and hung up panels. It's more than just the remote mucking. There's a number of other initiatives that we're pursuing that'll increase the availability of the drawpoints.

Speaker #3: And now it's just a matter of that ratio within each panel. There's also implications from panels adjacent to a wet panel. The team's also been very innovative on being able to remotely manage other aspects within the panel like rock breakage and hung-up panels and so it's more than just the remote mucking.

Speaker #4: So we were, you know, set up to do that from the onset. And now it's just a matter of that ratio within each panel.

Speaker #4: There's also implications from panels adjacent to a wet panel. The team's also been very innovative on Enable. They can remotely manage other aspects within the panel, like rock breakage and hung-up panels.

Speaker #3: There's a number of other initiatives that we're pursuing that'll increase the availability of the draw points.

Speaker #5: Thank you. Maybe a very, very quick follow-up. Can the regulators handle a drier material if the ratio improves over time?

Speaker #4: And , you know , so it's more than just the remote mucking . There's a number of other initiatives that we're pursuing that will increase the availability of the draw points

Speaker #3: Yes. Yes. It's really about being able to shut off the flow if it gets very sloppy. And it's a very innovative design where the gate and the hydraulic rams actually as the material starts to flow it assists in us being able to shut off the flow if we need to.

Speaker #5: Thank you .

Speaker #2: I'm very , very quick follow up . Can the regulators handle a dryer material if the ratio improves over time ?

Carlos de Alba: Thank you. Maybe a very quick follow-up. Can the regulators handle a drier material if the ratio improves over time?

Carlos De Alba: Thank you. Maybe a very quick follow-up. Can the regulators handle a drier material if the ratio improves over time?

Speaker #4: Yes , yes . It's really about being able to shut off the flow . If it gets very sloppy . And it's a very innovative design where the gate and the hydraulic rams actually , as the material starts to flow , it assists in us being able to shut off the flow if we need to .

Speaker #3: So it's a matter of preventing spills from the from happening on our haulage level onto the trains. But it'll also handle the dry material.

Mark Johnson: Yes. It's really about being able to shut off the flow if it gets very sloppy. It's a very innovative design where the gate and the hydraulic rams actually, as the material starts to flow, it assists in us being able to shut off the flow if we need to. It's a matter of preventing spills from happening on our haulage level onto the trains. It'll also handle the dry material.

Speaker #4: It's a very flexible robust system. And as we mentioned, we had planned over the long term to install it. And now we're accelerating that to make the system more flexible and robust to handle any type of material.

Speaker #4: So it's a matter of preventing spills from happening on our haulage level onto the trains. But it'll also handle the dry material.

Speaker #3: It's a very flexible , robust system . And as we mentioned , we we had planned over the long term to install it .

Speaker #5: Thank you.

Speaker #6: Our next question will come from the line of Alex Hacking with Citi. Please go ahead.

Kathleen Quirk: It's a very flexible, robust system. As we mentioned, we had planned over the long term to install it, and now we're accelerating that, to make the system more flexible and robust to handle any type of material.

Speaker #3: And now we're accelerating that to make the system more flexible and robust to handle any type of material

Speaker #7: Yeah. Morning, Kathleen and team. Not to Monday morning quarterback, but you've got a very experienced team there at Grasburg. How is this issue missed in the initial assessment that water would start to build up as mining was halted?

Speaker #5: Thank you .

Speaker #1: Our next question will come from the line of Alex Hacking with Siti. Please go ahead.

Carlos de Alba: Thank you.

Carlos De Alba: Thank you.

Speaker #6: Yeah . Morning , Kathleen and team . Not to Monday morning quarterback . But you know , you've got a very experienced team there at Grasberg .

Speaker #7: And then maybe in layman's terms, why not add more drainage to the mine? Thanks.

Operator: Our next question will come from the line of Alexander Hacking with Citi. Please go ahead.

Alexander Hacking: Yeah. Morning, Kathleen and team. Not to Monday morning quarterback, but you've got a very experienced team there at Grasberg. How was this issue missed in the initial assessment, that water would start to build up as mining was halted? Maybe in layman's terms, why not add more drainage to the mine? Thanks.

Speaker #4: Mark, why don't you take the last part of that and what we're doing in terms of the first part of that, Alex? We have monitoring of the water coming in and out of the cave.

Speaker #6: You know , how is this issue missed in the initial assessment . You know that water would would start to build up as mining was halted .

Speaker #6: And then maybe in layman's terms , like why not ? Why not add more drainage to the mine ? Thanks

Speaker #3: Mark , why don't you take the the last part of that and what we're doing in terms of the first part of that , Alex , you know , we have monitoring of the , the , the water coming in and out of the , of the cave .

Speaker #4: And so there was nothing that was detected of any significance or any significant concern. It's just a matter of getting access to these each of these draw points and to be able to inspect them.

Kathleen Quirk: Mark, why don't you take the last part of that and what we're doing. In terms of the first part of that, Alex, we have monitoring of the water coming in and out of the cave. There was nothing that was detected of any significance or any significant concern. It's just a matter of getting access to each of these draw points and to be able to inspect them. We couldn't do that until we got access in this March timeframe. It doesn't take a lot for something to move from dry to wet, and it's just a small amount of moisture. This isn't like a lot of water or some big overwhelming situation. It's just the nature of what's wet or moist versus what's completely dry.

Speaker #3: And so there was nothing that was detected of any significance or any significant concern . It's just a matter of getting access to these , each of these drop points .

Speaker #4: And we couldn't do that until we got access in this March timeframe. The it doesn't take a lot to for something to move from dry to wet.

Speaker #3: And to be able to inspect them . And we couldn't do that until , you know , until we got access in this in this March time frame , the , the , the , it doesn't take a lot to , for something to move from dry to wet .

Speaker #4: And it's just a small amount of moisture. So this isn't like a lot of water or some big overwhelming situation. It's just the nature of what's wet or moist versus what's completely dry.

Speaker #3: And it's just a small amount of moisture. So this isn't like a lot of water or, you know, some big overwhelming situation.

Speaker #4: But we do have a number of initiatives. And that's what I wanted Mark to cover. A number of initiatives that we started after the incident last September to address a more robust drainage system.

Speaker #3: It's just the nature of what , you know , what's wet or moist versus , you know , what's completely dry . But we do have a number of initiatives .

Speaker #4: But the one we have now within the block cave in terms of the gravity drainage is very good. The one that we are pursuing is additional drainage from the surface.

Speaker #3: And that's what I wanted Mark to cover a number of initiatives that we started after the incident last September to to address , you know , a more robust drainage system .

Kathleen Quirk: We do have a number of initiatives, and that's what I wanted Mark to cover, a number of initiatives that we started after the incident last September to address a more robust drainage system. The one we have now within the block cave, in terms of the gravity drainage, is very good. The one that we are pursuing is additional drainage from the surface. Mark, why don't we cover through that? We've got some information and the supplemental slides on it as well.

Speaker #3: But the one we have now within the within the block in terms of the gravity drainage is , is very good . The one that we are pursuing is additional additional drainage from the surface .

Speaker #4: But Mark, why don't we cover through that? And we've got some information in the supplemental thoughts on it as well.

Speaker #3: Right. Yeah. The slide that you're referring to is 41. But Alex, what we have right now and what we've had in place for years is that we have a very comprehensive drainage plan from the surface in the open pit where the pit has not been impacted.

Speaker #3: But Mark , why don't we cover through that ? And we've got some information in the supplemental slides on it as well , right ?

Speaker #4: Yeah . The , the slide that you're referring to is 41 , but Alex , what we have right now and what we've had in place for for years is that we have a very comprehensive drainage plan from the surface in the open pit where the pit is not been impacted .

Speaker #3: You're aware that as we blockade, there's a subsidence zone where the rock breaks. And where we have the wet muck coming from is the rainfall that falls onto that broken material.

Mark Johnson: Right. Yeah. The slide that you're referring to is 41. Alex, what we have right now and what we've had in place for years is that we have a very comprehensive drainage plan from the surface in the open pit where the pit has not been impacted. You're aware that as we block caving, that there's a subsiding zone where the rock breaks. Where we have the wet muck coming from is the rainfall that falls onto that broken material. Our drainage system, both for groundwater and for the surface area that's been unimpacted, is very robust. It's been in place, it's functioning. The wet muck generation comes from the daily rainfall.

Speaker #3: Our drainage system both for groundwater and for the surface area that's been unimpacted is very robust. It's been in place, functioning. But what the wet muck generation comes from the daily rainfall, it falls onto that rock.

Speaker #4: You're aware that as we blockade , there's a subsidence zone where the rock breaks and where we have the wet muck coming from is the rainfall that falls onto that broken material , our drainage system , both for groundwater and for the surface area that's been impacted , is very robust .

Speaker #3: It works its way down through the cave. And as it gets to a draw point, that draw point turns into somewhat of a funnel where it concentrates some of that flow that's within that broken rock.

Speaker #4: It's been in place functioning . But what the the wet muck generation comes from the daily rainfall . It falls onto that rock .

Speaker #3: And as Kathleen mentioned, it's only a couple percent difference in moisture content that can convert material from a dry material that we can handle easily to a wetter material that we need to manage much more significantly.

Speaker #4: It works its way down through the cave. And as it gets to a drop point, that little drop point is somewhat of a funnel, where it concentrates some of that flow that's within that broken rock.

Mark Johnson: It falls onto that rock, it works its way down through the cave, and as it gets to a draw point, that draw point turns into somewhat of a funnel where it concentrates some of that flow that's within that broken rock. As Kathleen mentioned, it's only a couple of percent difference in moisture content that can convert material from a dry material that we can handle easily to a wetter material that we need to manage much more significantly. It's not a matter really of drainage. What we are doing, as a result of the external mud rush, the other incident, obviously, that's put us into this situation in the PB1 area, is that we're looking to be able to drain the water away that collects within the cave, essentially in that shape of the old pit.

Speaker #3: So it's not a matter really of drainage but what we are doing, as a result of the external mud rush, the other incident obviously that's put us into the situation and the PB1 area, is that we're looking to be able to drain the water away, that collects within the cave, essentially in that shape of the old pit.

Speaker #4: And as Kathleen mentioned , it's only a couple percent difference in moisture content that can convert material from a dry material that we we can handle easily to a wetter material that we need to manage much more significantly .

Speaker #4: So it's , it's not a matter really of , of drainage , but what we are doing , you know , as a result of the external mud rush , the other , the other incident , obviously that put us into the situation and the PD one area is that we're we're looking to be able to drain the water away that collects within the cave , essentially in that shape of the the old pit .

Speaker #3: And so we're drilling into some of that broken rock above PB1. And we're seeing some initial indications even with the smaller diameter drill holes that we've been able to access some of that water.

Speaker #3: That's encouraging. We're getting some other drills that'll drill those sort of holes much quicker in a bigger diameter. Those are on schedule. They're coming in, should be drilling by the end of June.

Speaker #4: And so we're drilling into we're drilling into some of that broken rock above Pb1 . You know , we're seeing some initial indications , even with the smaller diameter drill holes that we've been able to , to access some of that water .

Mark Johnson: We're drilling into some of that broken rock above PB1. We're seeing some initial indications, even with the smaller diameter drill holes, that we've been able to access some of that water. That's encouraging. We're getting some other drills that'll drill those sort of holes much quicker in a bigger diameter. Those are on schedule. They're coming in. Should be drilling by the end of June. Then we got some other initiatives that are more focused on the PB1 reopening, of taking away that surface water that ponds or pools, and any mud-like material, any liquefiable material that might gather in the pit bottom.

Speaker #3: And then we got some other initiatives that are more focused on the PB1. Reopening of taking away that surface water that ponds or pools and any mud-like material, any liquefiable material that might gather in the pit bottom.

Speaker #4: That's encouraging. We're getting some other drills that'll drill those sort of holes much quicker, in a bigger diameter. Those are on schedule.

Speaker #4: They're coming in, should be drilling by the end of June. And then we got some other initiatives that are more focused on the PB one.

Speaker #5: Thanks for the color. And do appreciate all the hard work that the team is doing there. Thank you.

Speaker #4: Reopening of taking away that surface water that that ponds or pools and any any mud like material , any liquefiable material that might gather in the pit , bottom

Speaker #4: Thank you, Alex.

Speaker #6: Our next question will come from the line of Chris LaFemina with Jefferies. Please go ahead.

Speaker #8: Hi. Thanks, Operator. Hi, Kathleen and team. Just a couple of follow-up questions on Grasburg and kind of following up on what Alex just asked.

Speaker #6: Thanks for the color, and do appreciate all the hard work that the team is doing there. Thank you.

Speaker #8: So if we look at the portion of wet draw points before the mud rush incident, I think you say it was 30% and it's 45% now.

Speaker #3: Thank you Alex .

Speaker #1: Our next question will come from the line of Chris Lafemina with Jefferies. Please go ahead.

Alexander Hacking: Thanks for the color, and do appreciate all the hard work that the team is doing there. Thank you.

Speaker #8: So my first question is, what sort of variability is there around that number? In other words, was it 30%, but sometimes 35, sometimes 25?

Speaker #5: Hi . Thanks . Operator . Hi , Kathleen and team . Just a couple of follow up questions on Grasberg and kind of following up on what Alex just asked .

Kathleen Quirk: Thank you, Alex.

Operator: Our next question will come from the line of Chris LaFemina with Jefferies. Please go ahead.

Speaker #5: So if we look at the portion of wet draw points before the mud rush incident, I think you said it was 30%, and it's 45% now.

Chris LaFemina: Hi. Thanks, operator. Hi, Kathleen and team. Just a couple of follow-up questions on Grasberg and kind of following up on what Alex just asked. If we look at the portion of wet drawpoints before the mud rush incident, I think you say it was 30% and it's 45% now. My first question is, what sort of variability is there around that number? In other words, was it 30%, but sometimes 35, sometimes 25? What level of confidence do you have in the ratio of dry to wet today? And that's the first question. Second question is on the topic. When did you identify that there were too many wet drawpoints?

Speaker #8: What level of competence do you have in the ratio of dry to wet today? And that's the first question. Second question, is on the when did you identify that the there were too many wet draw points?

Speaker #5: So my first question is, what sort of variability is there around that? That number? In other words, was it 30%?

Speaker #5: But sometimes 35 , sometimes 25 ? What level of competence do you have in the ratio of dry to wet today ? And that's the first question .

Speaker #8: I think there was a media report a couple of weeks ago that indicated that Freeport was actually ahead of schedule on the Black Cave ramp.

Speaker #8: And that maybe that was just an incorrect media report. But I'm wondering if this is something that you just learned very recently and was not an obvious problem just a few weeks ago.

Speaker #5: The second question is on the like , when did you identify that the there were too many wet draw points . I think there was a media report , a couple of weeks ago that indicated that Freeport was actually ahead of schedule .

Speaker #8: Thank you.

Speaker #4: Chris, on the diagram, we show on slide 9 the number of draw points right away comparison the important thing to look at here is also the panel.

Speaker #5: And the Black Gate ramp and , you know , that's that that maybe that was just an incorrect media report , but I'm wondering if this is something that you just learned very recently and was not an obvious problem , just a few weeks ago .

Chris LaFemina: I think there was a media report a couple of weeks ago that indicated that Freeport was actually ahead of schedule on the block caving ramp, and maybe that was just an incorrect media report, but I'm wondering if this is something that you just learned very recently and was not an obvious problem just a few weeks ago. Thank you.

Speaker #5: Thank you

Speaker #3: Chris , on the on the diagram , we show on slide nine , the number of draw points right away , comparison , the important thing to look at here is also the the panel .

Speaker #4: So in September, we had only one panel within PB2 and 3 that didn't meet the ratio. And so we were dealing with that with blending and so that was only one that we would addressing on now, you've got 10 out of the 23 that don't meet the one-to-one.

Kathleen Quirk: Chris, on the diagram we show on slide 9, the number of drawpoints, dry to wet comparison. The important thing to look at here is also the panel. In September, we had only 1 panel within PB2 and 3 that didn't meet the ratio. We were dealing with that with blending, and that was the only one that we were addressing. Now, you've got 10 out of the 23 that don't meet the 1 to 1. What it ends up doing is derating the production of the whole panels because you can only produce at the level of the 1 to 1 until we get these enhanced material handling systems installed. That's an important factor, what's going on within each panel.

Speaker #3: So in in September , we had only one panel within PB2 and three . That that didn't meet the ratio . And so we were we were dealing with that with , with blending and , and so that that was the only one that we were addressing on .

Speaker #4: So the that what it ends up doing is de-rating the production of the whole panel because you can only produce the at the level of the one-to-one until we get these enhanced material handling systems installed.

Speaker #3: Now you've got ten out of the 23 that don't meet the , the , the 1 to 1 . So the that what it ends up doing is de-rating the production of the whole panel , because you can only produce the , the , at the level of the 1 to 1 until we get these enhanced material handling systems installed .

Speaker #4: So that's an important factor what's going on within each panel. In terms of the variability, Mark can comment further on this. But we wouldn't have had significant variability in the past.

Speaker #3: So that's an important factor . What what's going on within each panel in terms of the , the variability , you know , Mark can comment further on this , but we , we wouldn't have had significant variability in , in the past , but we do have , you know , ongoing monitoring that looks to see , you know , for our for our processes to monitor these , these draw points for , for planning and management systems .

Speaker #4: But we do have ongoing monitoring that looks to see for our processes to monitor these draw points for planning and management systems. But since we've started mining we have had some draw points that were wet initially in March, go to dry, and vice versa.

Kathleen Quirk: In terms of the variability, Mark can comment further on this, but we wouldn't have had significant variability in the past. We do have ongoing monitoring that looks to see for our processes to monitor these draw points for planning and management systems. Since we started mining, we have had some draw points that were wet initially in March go to dry and vice versa. It is a little bit of a dynamic situation right now in the very early days of the ramp up. As Mark talked about earlier, the timing of all this is we had just really commenced the ramp up. There was new information that we were getting along the way, in April as we were going through the forecasting process. Freeport, we did not modify any of our guidance.

Speaker #4: So it is a little bit of a dynamic situation right now in the very early days of the ramp-up. As Mark talked about earlier, the timing of all this is we had just really commenced the ramp-up.

Speaker #3: But since we've started mining , you know , we have had , we have had some draw points that were wet initially in , in March go to dry and vice versa .

Speaker #3: So it is a little bit of a dynamic situation right now in the very early days of the ramp up as , as Mark talked about earlier , you know , the timing of all this is we had just really commenced the the ramp up and , and so there was , you know , new information that we were getting along the way in , in April , as we were going through the , the forecasting process , Freeport , you know , we did not modify any of our guidance .

Speaker #4: And so there was new information that we were getting along the way. In April, as we were going through the forecasting process, Freeport we did not modify any of our guidance.

Speaker #4: The actual progress we were making on the ramp-up in terms of or the progress we were making on the restart was very good. As I mentioned, we got that done ahead of schedule.

Speaker #3: The , you know , the , the , the actual progress we were making on the . On the , on the ramp up in terms of or the progress we're making on the restart was very good , as I mentioned , we , we got that done ahead of , ahead of schedule .

Speaker #4: Some of the media reports that you may be referencing relate to some of the discussions in Indonesia where there could be government people that are asking questions about the plan or media asking about the plan.

Kathleen Quirk: The actual progress we were making on the restart was very good. As I mentioned, we got that done ahead of schedule. Some of the media reports that you may be referencing relate to some of the discussions in Indonesia, where there could be government people that are asking questions about the plan, or media asking about the plan. Those would have been based on our original plan because we had not formalized our forecast until recently. Again, the recovery and the preparedness to get to the ramp up was going very, very well.

Speaker #3: Some of the media reports that you may be referencing relate to some of the discussions in Indonesia where there could be government people that are asking questions about the plan or media asking about the plan .

Speaker #4: And those would have been based on our original plan because we had not formalized our forecasts until recently. Again, the recovery and the preparedness to get to the ramp-up was going very, very well.

Speaker #3: And those would have been based on our , you know , original plan because we had not formalized our forecasts until until recently .

Speaker #4: And it's only this new information that has been unfolding in recent weeks that where we had to address the forecast. Again, it's very early days.

Speaker #3: Again , the , the , the recovery and the preparedness to get to the ramp up was going very , very well . And it's only this new information that has been unfolding in recent recent weeks that where where we had to address the , the forecast .

Speaker #4: And things can move from here. But we do have a solution. We're going to execute against that solution. And it's a positive long-term solution to giving us flexibility to deal with these sorts of things as we go forward over the long term.

Speaker #3: Again , it's very early days and things can move , move from here . But we do have a solution . We're going to execute against that solution .

Speaker #8: That's very helpful for me. Good luck. Sorry.

Speaker #3: I might just add since the start of the Grasburg, we've also had a model that predicts the future of that wet to dry ratio.

Speaker #3: And it's a positive long term solution to to giving us flexibility to to deal with these sorts of things as we go forward over the long term .

Speaker #3: And all the way through the life of PB2 and 3, that ratio is generally 2 to 1. That we'd have two draw points of dry to one wet.

Speaker #5: That's very .

Speaker #6: Helpful .

Speaker #5: Thank you and good luck . Sorry .

Speaker #4: I might just add , since the start of the Grasberg , we've also had a model that predicts the future of that wet to dry ratio and all the way through the life of PV two and three .

Speaker #3: There'd be some panels that are that vary the variability is more across the footprint. But broadly, we had a much better ratio that we've been forecasting.

Speaker #4: That ratio is generally 2 to 1 . Like that , we'd have two two draw points of dry to one wet . There'd be some panels that are that vary .

Speaker #3: And using that as part of our mine plans, that's a big part of the reason that we built GBC to be able to be remotely mined from the onset.

Speaker #4: You know, the variability is more across the footprint, but broadly, we had a much better ratio than we've been forecasting.

Speaker #3: So we've been working on this. For quite some time, it's a bit of a complex model. It's both material characteristics from size and then managing how the water makes its way through the broken rock mass.

Speaker #4: And using that as part of our mind plans . That's , that's a big part of the reason that we built GBC to be able to be remotely mined from the onset .

Speaker #4: So, we've been working on this for quite some time. You know, it's a bit of a complex model. It's both material characteristics from size.

Speaker #3: So our indications were that we're much different over the longer term. It didn't indicate the need for the spimenators at this point of the mine.

Speaker #4: And then managing how the water makes its way through the broken rock mass. So our indications were that we're much different over the longer term.

Speaker #3: As Kathleen mentioned, we were working on that and saw certain panels that would require that. But what we've looked at now is a much more taking what we have today and just applying that, making sure that the shoots themselves are not the bottleneck.

Speaker #4: It didn't indicate the need for the spill monitors at this point of the mine. As Kathleen mentioned, we were working on that and saw certain panels that would require that.

Speaker #3: So the current plan is that we'll replace all the shoots so that we'll have that additional flexibility.

Speaker #4: But what we've looked at now is, is a much more—taking what we have today and just applying that, making sure that the shoots themselves are not the bottleneck.

Speaker #8: Got it. Thank you very much.

Speaker #1: Our next question will come from the line of Nick Cash with Goldman Sachs. Please go ahead.

Speaker #4: So the current plan is that we'll replace all the shoots so that we'll have that additional flexibility.

Speaker #5: Hi, team. Thank you very much. Just wanted to switch gears a little bit here. You mentioned deploying the first initially developed additive and working on a second additive in North America.

Speaker #5: Got it. Thank you very much.

Speaker #1: Our next question will come from the line of Nick cash with Goldman Sachs . Please go ahead .

Speaker #5: How established are the supply chains for each of these? And how quickly can you scale those additives? And how much of the 800 million guide incremental for leaching is a result from these new additives?

Speaker #7: Hi , team . Thank you very much . Just wanted to switch gears a little bit here . You mentioned , you know , deploying the first initially developed additive and working on a second additive in North America .

Speaker #5: And then lastly, given the increased diesel costs and global supply chain pressures, are there any risks to the $2.50 unit cost targets for North America in '27?

Speaker #7: How established are the supply chains for each of these and how quickly can you scale those additives and how much of the 800 million guide incremental for for leaching is a result from these new additives ?

Speaker #5: Thank you.

Speaker #4: Thank you, Nick. In terms of the additive, the one that we're deploying now, and we started with one stockpile at Valencia, and are now deploying it more broadly across the stockpiles at Valencia, is readily available.

Speaker #7: And then lastly, given the increased diesel costs and global supply chain pressures, are there any risks to the $2.50 unit cost targets for North America in ’27?

Speaker #7: Thank you .

Speaker #3: Thank you Nick . The in terms of the additive , the one that we're deploying now , and we started with one stockpile at Morenci and are now deploying it more broadly across the stockpiles at Morenci .

Speaker #4: And that is we've got a supply chain for it. And it's being applied and the results will continue to evolve as we go through the year.

Speaker #4: And that's the data that we want to see. In the lab, the additive that we're referring to, we've got two additional additives that we're focused on.

Speaker #3: Is is readily available and that is we've got a supply chain for it . And , and it's , it's being applied . And , and the results will continue to evolve as we go through the year .

Speaker #4: And maybe more after that. But we call them our next generation additives. We've seen with these additional additives performance in the lab that is multiplier effect of benefit above the one we're using now.

Speaker #3: And that's the data that we want to see in the lab . The , the additive that we're referring to , we've got two additional lab additives that we're focused on .

Speaker #3: And maybe more after that . But we call them our next generation additives . We've seen with these additional additives performance in the lab that is a multiplier effect of of benefit above the one we're using now .

Speaker #4: So we have been working with potential suppliers on those. It's not as easy to find. And we may have to have it made as the ones that we're using now.

Speaker #4: But we've been conducting some meetings in recent months with anticipation that we will commercialize one or more of those additives. And that's really showing potential.

Speaker #3: So we have been working with potential suppliers on those . It's not as easy to find , and we may have to , you know , have it made as the ones that we're that we're using now .

Speaker #4: And to answer your question about the scaling, it's the combination of additives and heat that is going to get us to the 800 million pounds.

Speaker #3: But we've been conducting some meetings in recent months with anticipation that we will commercialize one or more of those additives. And that's, you know, that's really showing potential.

Speaker #3: And , and to answer your question about the , the scaling It's the combination of additives and heat that is going to get us to the , the £800 million .

Speaker #4: So we can at the current levels, all of the initiatives we're doing on precision leaching, all of those things, all the things we're doing on leach everywhere, we've got helicopters that are adding irrigation lines to places that we couldn't access before.

Speaker #3: So we can , you know , at the , at the current levels , all of the initiatives we're doing on , on precision leaching , all those things , all the things we're doing in Leach everywhere , the we've got helicopters that are that are adding irrigation lines to places that we couldn't access before .

Speaker #4: All those things are sort of operational work that we're doing. And that'll allow us to be in this 250, 300 million pound range. The rest of it really comes from the additives and heat.

Speaker #3: All those things are sort of operational work that we're doing. And that'll allow us to be, you know, in this.

Speaker #4: And it's not just one by itself because the combination of using an additive alongside of heat could give you a one plus one equals two and a half or three.

Speaker #3: 250 , £300 million range . The rest of it really comes from the additives and heat and it's not just one by itself , because the combination of using an additive alongside of heat could give you a one plus one equals two and a half or three .

Speaker #4: And so that's why this heat work is very important as well to get to our to get to our ramp-up rates. We've just started at Valencia.

Speaker #4: We've got a pilot where we're heating the raffinate that will go as we just really just literally just started this. To heat the raffinate to try to raise temperatures within the stockpile.

Speaker #3: And so that's why this heat work is , is very important as well . To get to our , to get to our ramp up rates .

Speaker #3: We've just started at Morency . We've got a pilot , a pilot where we're heating the , the raffinate that will go as we just really just literally just started this to heat the raffinate to try to raise temperatures within the stockpile .

Speaker #4: We're doing that on a test basis. We have our idea to put in some modular units of heat that could be applied to all of our stockpiles initially.

Speaker #4: We're using natural gas to heat. But we're very excited about potential to have geothermal heat at Valencia. And we've got promise there. We're actually doing some drilling to define geothermal resource that would be a low-cost way to heat the stockpiles.

Speaker #3: We're doing that on a test basis . We have our idea to put in some modular units of heat that could be applied to all of our stockpiles .

Speaker #3: Initially , we're using natural gas to heat , but we're very excited about potential to have geothermal heat at Mawenzi . And we're we've got promise there .

Speaker #4: So we know that heat works. Raising the temperature of the stockpile will add volumes of significance. And that combined with the additives we have a path to getting to 800.

Speaker #3: We're actually doing some drilling to define a geothermal resource that would be a low cost way to to heat the stockpiles . So we know that heat works raising the temperature of the stockpile will add volumes of significance .

Speaker #4: We've got to solve what's the right additive for different material types. And we've got to solve the engineering of how to best get the temperatures raised in the stockpile.

Speaker #3: And that, combined with the additives, we have a path to getting to 800. We've got to solve what's the right additive for different material types.

Speaker #4: Cory Stevens is on. He's and his team are leading this effort. And come back to your 250 question, Nick. But Cory, if you want to add any color to what I just said, that'd be helpful.

Speaker #3: And we've got to solve the engineering of how to best get the temperatures raised in the stockpile . Corey Stevens is on . He's and his team are leading this effort .

Speaker #3: Yeah. Thanks, Kathleen. Yeah. So yeah, Kathleen said it. We've got a pilot going. We're using that to calibrate our heat models and what we would expect to see at Valencia.

Speaker #3: And ask Corey to make any And then I'll come back to you . 250 question Nick but Corey , if you want to add any color to what I just said , that'd be helpful

Speaker #3: And in parallel, we've got a bigger project going where we're going to be tripling the size of that for our Alhambra operation that's going to add some volumes there.

Speaker #6: Yeah . Thanks . Kathleen . Yeah . So yeah , Kathleen said it . We've got a pilot going . We're using that to calibrate our heat models and what we would expect to see at Morency .

Speaker #3: And additionally, we have a number of other targets where we're looking at a modularized version that can be deployed more readily across the portfolio, particularly in North America.

Speaker #6: And in parallel , we've got a bigger project going where we're going to be tripling the size of that for our operation . That's going to add some some volumes .

Speaker #6: There . And , you know , additionally , we have a number of other targets where we're looking at a modularized version that can be deployed more readily across the portfolio , particularly in North America .

Speaker #3: We're pretty excited about where we're headed on that front. Additionally, there's options with chemical heat using pyrite and air here in the second quarter.

Speaker #3: We're going to be starting our what we call our perfect pile. In New Mexico, and that will have a next-generation design on being able to leverage heat from the natural pyrite that comes with the process there.

Speaker #6: We're pretty excited about where we're headed on that front . Additionally , there's there's options with chemical heat using pyrite and air here in the second quarter , we're going to be starting our what we call our perfect pile in New Mexico .

Speaker #4: Nick, on the 250 question, with the changes in consumable costs and energy costs, we're reviewing what all that means. And it's been a volatile situation.

Speaker #6: And that will have a , you know , a next generation design on being able to leverage heat from the natural pyrite that comes with the process .

Speaker #6: There

Speaker #4: But in terms of where we were on that, if you looked at the energy costs, asset costs, all the various consumables, in place, in recent quarters, together with the addition of these low-cost incremental pounds, of getting to our 400 target, sometime next year, that would bring us so we have a we had a path to get to 250.

Speaker #3: Nick , on the 250 question with the changes in in consumable cost and energy costs , we're reviewing what all that means . And it's been a volatile situation .

Speaker #3: But in terms of where we were on that , if you looked at the energy cost , acid cost , all various consumables in place in recent quarters , together with the addition of these low cost , incremental pounds of getting to , you know , our 400 target sometime next year , that would bring us .

Speaker #4: We now need to look at what the right environment is for things that we don't control, like the cost of diesel or other inputs.

Speaker #4: And so that will cause us to relook at the 250. But the point is that with the input costs that we've had in place over the last several quarters, and the addition of these very low-cost incremental pounds, we see being able to get our US costs down significantly closer to where we are in South America.

Speaker #3: So we have a we had a path to get to . 250 . We now need to look at , you know , what the right environment is for things that we don't control , like the cost of , of diesel or the other inputs .

Speaker #3: And so that will cause us to relook at the . 250 but the point is , is that with the input costs that we've had in place over the last several quarters and the , the addition of these very low cost incremental pounds , we see being get our U.S.

Speaker #4: So that is still intact. We just need to continue to monitor what impact these commodity input costs will have on our cost structure. But the things that we can control will work in very hard and have confidence that our unit costs will trend lower all of the things being equal.

Speaker #3: costs down significantly closer to where we are in South America . So that is that is still intact . We just need to continue to monitor what impact these commodity input costs will have on our cost structure .

Speaker #4: The sulfuric acid situation, while Marie said we don't have a lot of spot exposure this year, we'll have to see how that unfolds as we get into next year.

Speaker #3: But the things that we can control , we're working very hard and have confidence that that our unit costs will trend lower . All other things being equal , the sulfuric acid situation .

Speaker #4: And while we're hedged, naturally, because we have the smelters the cost of the acids that we buy will be shown in the operating cost for the US.

Speaker #3: While Marie said we don't have a lot of spot exposure this year , we'll have to see how that unfolds as we get into next year .

Speaker #4: And we'll have an offset elsewhere. With the smelters that we have where we actually produce and sell acid. So I hope that helps you give you some color around that.

Speaker #3: And while we're hedged naturally because we have the smelters , the the cost of , of the acids that we buy will be shown in the operating costs for the U.S.

Speaker #2: That does. Thank you very much. I'll pass it off.

Speaker #3: and we'll have an offset elsewhere with with the smelters that we have where we actually produce and sell acid . So I hope that that helps you give you some color around that .

Speaker #1: Our next question comes from the line of Bob Brackett with Bernstein Research. Please go ahead.

Speaker #5: Good morning and staying on the leaching theme, you all have been on a tear in terms of getting patents. I think you've had more patents in the last three years, a couple dozen than you've had in the previous 10.

Speaker #7: That does. Thank you very much. I'll pass it on.

Speaker #1: Our next question comes from the line of Bob Brackett with Bernstein Research . Please go ahead .

Speaker #5: Many related to leaching. What's the philosophy of those patents? Are they sort of defensive to make sure you can execute on your inventory, on your resource?

Speaker #8: Good morning . And staying on the leaching theme , you all have been on a tear in terms of getting patents . I think you've had more patents in the last three years .

Speaker #5: Or could they be potentially offensive where you could be a partner and get access to additional resources with your technology?

Speaker #8: A couple dozen , than you've had in the previous ten . Many related to leaching . What's the philosophy of those patents ? Are they sort of defensive to make sure you can execute on your inventory , on your resource ?

Speaker #4: I'll let Cory add to this. But it's really both. Our focus we've got 40 billion pounds plus of copper in these stockpiles which have been treated as waste in the past.

Speaker #8: Or could they be potentially offensive where you could be a partner and get access to additional resources with your technology ?

Speaker #4: And so there is a huge value opportunity for us. And that's our immediate priority to recover some of that copper that's sitting there in stockpiles which needs a catalyst to produce it.

Speaker #3: I'll let Corey add to this , but but it's really both our focus . You know , we got we've got £40 billion plus of copper in this in these stockpiles , which have been treated as waste in the past .

Speaker #4: So that is our first priority. The second is, yes, we could leverage any technologies that we develop to potentially partner with others, potentially having synergies in a M&A transaction, etc.

Speaker #3: And so, there is a huge value opportunity for us. And that's our immediate priority—to recover some of that copper that's sitting there in stockpiles, which needs a catalyst to produce it.

Speaker #3: So that's that is that is our first priority . The second is , yes , we could leverage any technologies that we that we develop to potentially partner with others , potentially having synergies in a , in an M&A transaction , etc.

Speaker #4: But our first priority is to maximize the value of our own work here. The team we have working on this we have a technology center in Tucson.

Speaker #3: . But it's our first priority is to maximize the value of our own of our own , of our own work here , the team we have working on this , we have a technology center in Tucson and the team we have working on it is , is , is , is , is really , really strong .

Speaker #4: And the team we have working on it is really, really strong. We've added to the team recently, added some chemists and some other disciplines to the team.

Speaker #4: So we have a multidisciplined team working not only on what's the best additive, but also what's the best way to commercialize it. Our corporate development team has been actively involved in that as well.

Speaker #3: We've added to the team . Recently , added some chemists and some other disciplines to the team . So we have a multidisciplinary team working not only on what's the best additive , but also what's the best way to commercialize it at corporate development team has been actively involved in that as well .

Speaker #4: So like I said, it's a very high net present value project. And we're transforming our US business in something that we're making a lot of advances to.

Speaker #4: And we're going to crack the code as we go forward.

Speaker #3: So it's like I said , it's a very high net present value project and would transform our U.S. business and something that we're making a lot of advances to , and we're going to crack the code as we as we go forward

Speaker #5: Yeah, Kathleen, you nailed it. Really, we're moving forward with this powerful group of innovators and filling the pipeline. The 42 billion pounds that are within our existing stockpiles don't count the other options that we have within our company for below-cutoff grade material that we're currently considering waste today that could be extremely valuable for us in the future as these options materialize.

Speaker #6: Yeah . Kathleen , you nailed it . Really , we're we're moving forward with this powerful group of innovators and fill in the pipeline .

Speaker #6: The £42 billion that are within our existing stockpiles don't count the other options that we have within our company for below cutoff grade material that that we're currently considering waste today , that could be extremely valuable for us in the , in the future , as these options materialize .

Speaker #5: It's a very competitive market. And so we're being very careful to protect our interests as we come up with these innovations.

Speaker #3: That's all very clear. Thank you.

Speaker #1: Our next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Speaker #6: It's a very competitive market . And so , you know , we're being very careful to protect our interests as we come up with these innovations .

Speaker #2: Thank you very much, Operator. And hello, Kathleen and Richard. Thank you for taking my question and for today's presentation. If I could, I'd like to follow up on the theme of industry cost pressures.

Speaker #8: That's all very clear . Thank you

Speaker #1: Our next question comes from the line of Lawson Winder with Bank of America Securities . Please go ahead

Speaker #2: And just get a sense for what you've provided on the slides. And maybe this is best addressed by you, Marie. Just in terms of the sensitivity of diesel.

Speaker #9: Thank you very much . Operator and hello , Kathleen and Richard , thank you for taking my question . And for today's presentation .

Speaker #9: If I could, I'd like to follow up on the theme of industry cost pressures and just get a sense for what you've provided on the slides.

Speaker #2: So it's interesting. So versus the Q4 slides, it looks like diesel sensitivity has actually increased. Can you maybe just walk through why that would happen or why there'd be a larger impact on even now than there was three months ago?

Speaker #9: And maybe this is best addressed by you , Marie , just in terms of the sensitivity of diesel . So , so it's interesting .

Speaker #4: Apply that Marie reviewed has our sensitivities to copper and all of our input costs, etc. And so what we do to calculate the sensitivities is use what's in that forecast for diesel price assumptions and then measure a 10 or plus or minus 10 percent change to that.

Speaker #9: So , so versus the Q4 slide , it looks like diesel sensitivity has actually increased Could you maybe just walk through why why that would happen or why , why there would be a larger impact on EBITDA now than there was three months ago .

Speaker #3: By that . Marie reviewed has our sensitivities to copper and all of our input costs , etc. . And so what we do to calculate the sensitivities is use what's in that forecast for for diesel price assumptions , and then measure A10 or plus or -10% change to that .

Speaker #4: So we have now incorporated a higher cost of diesel in our assumptions than what we had previously. And that's why a 10 percent change is more than what it was before.

Speaker #4: Is that the question you were asking?

Speaker #3: So we have now incorporated a higher cost of diesel in our assumptions than what we had previously. And that's why a 10% change is more than what it was before.

Speaker #2: Yeah. Yeah. No, that's exactly right. It just seemed like it was a bit non-linear. So that's it. I guess you just assuming much higher diesel as a base case at this point.

Speaker #4: Right. Yeah. And we'll have to monitor that. We'll have to monitor it as we go. But in our forecasting process, we typically use the prices in effect around the and it's been volatile.

Speaker #3: Is that the question you were asking

Speaker #9: Yeah , yeah . No , that's exactly right . It just seemed it just seemed like it was a bit nonlinear . So that's it .

Speaker #4: But the prices in effect at the time of the forecast. So those 27, 28 have higher diesel costs than we would have had three months ago.

Speaker #9: I guess you’re just assuming much higher diesel as a base case at this point, right?

Speaker #3: Yes . And we'll have to monitor that . We'll have to monitor it as we go . But in our forecasting process , we typically use the prices in effect around the , you know , it's been volatile , but the price is in effect at the time of the forecast .

Speaker #2: Okay. That makes perfect sense. And then just thinking about industry cost pressures, I mean, there's we've heard of explosive costs being higher, grinding media, you mentioned some insulation from sulfuric acid.

Speaker #3: So, those 27, 28 have higher diesel costs than we would have had three months ago.

Speaker #2: When you think of some of the other key cost items for your business, are there other places where you feel there's some level of insulation?

Speaker #9: Okay . That makes perfect sense . And then just thinking about industry cost pressures , I mean , there's , you know , we've , we've heard of explosive costs being higher grinding media .

Speaker #2: And then where are some of the other items where there might not be and there could be more exposure there?

Speaker #9: You mentioned some insulation from sulfuric acid . When you think of some of the other key cost items for your business , are there other places where you feel there's some level of insulation and then , you know , where are some of the other items where there might not be and there could be more exposure .

Speaker #4: It's been very regional, Lawson. So as Marie mentioned, we have had a significant rise in diesel costs. But the most significant impact has been in Indonesia, in other Asian regions.

Speaker #9: There

Speaker #3: It's been very regional . Lawson so is Marie mentioned we have , you know , we've had a significant rise in diesel costs , but the most significant impact has been in , in , in Indonesia , you know , in other Asian regions , have experienced that inflation more significantly We haven't seen a lot of things in terms of what we buy being adjusted at this point .

Speaker #4: I have experienced that inflation more significantly. We haven't seen a lot of things in terms of what we buy being adjusted at this point.

Speaker #4: But that'll be something that lags. And we'll have to see how long the situation continues and whether it'll start to flow through other components of our costs.

Speaker #4: But some of the things that trade on the spot market, you can see have reacted. But a lot of our consumables are contractually negotiated.

Speaker #3: But that'll be something that that that lags . And we'll have to see how long the situation continues and whether it'll start to flow through .

Speaker #4: So we'll have to just continue to monitor those.

Speaker #3: You know , other components of our costs . But , you know , some of the things that trade on the spot market , you can see have reacted .

Speaker #2: Okay. Thank you, guys.

Speaker #1: Our next question comes from the line of Katja Jancic with BMO Capital Markets. Please go ahead.

Speaker #3: But a lot of our a lot of our consumables are , are , you know , contractually negotiated . So , so we'll have to just continue to , to monitor those .

Speaker #6: Hi. Thank you for taking my question. Recently, we saw there was a change to Section 232 tariffs impacting derivative products. Do you see any impact from that, or do you expect any impact from that?

Speaker #9: Okay . Thank you guys

Speaker #1: Our next question comes from the line of Katya Yancik with BMO Capital Markets . Please go ahead .

Speaker #10: Hi . Thank you for taking my question Recently , we saw there was a change to section 232 tariffs impacting derivative products . Do you see any impact from that or do you expect any impact from that

Speaker #4: Not associated with what we sell. So that changed a lot of the codes for what gets tariffed. It did not change anything with respect to the refined copper cathodes at this point.

Speaker #3: Not not associated with with what we what we sell so that that that would have changed a lot of the codes for , for what gets Tariffed it did not change anything with respect to the , the refined copper cathodes at this point .

Speaker #4: And as you know, Katja, this is something that the government said they were going to be reviewing potentially by middle of this year.

Speaker #6: And then maybe just quickly, I know we mentioned the sulfuric acid. Your hedge but can you let us know how much of it you actually do purchase in the US for your US operations?

Speaker #3: And as you know , this is , that is something that the government said they were going to be reviewing potentially by middle of this year .

Speaker #4: It varies. But we do purchase some acid in the US. We also have of course, we have the smelter. Which provides a baseload of acid to our US operations.

Speaker #10: And then maybe just quickly , I know we mentioned the sulphuric acid your hedged , but can you can you let us know how much of it you actually do purchase in us for your US operations

Speaker #3: It varies , but we do . We do purchase some acid in the U.S. we also have , you know , of course , we have the , the , the smelter , which provides a base load of , of , of , of acid to our us operations .

Speaker #4: We have the actually a sulfur burner where we buy sulfur and convert that to acid. At our Safford operation, and so it varies what we buy.

Speaker #3: We have the , we have actually a sulfur burner where we buy sulfur and convert that to acid at our , at our , at our Safford operation .

Speaker #4: In terms of the amount of acid we buy. But we internally generate a big portion of what's needed in the US. And then, of course, in Spain, where we have a smelter, that's all sold externally.

Speaker #3: And so it varies . What we buy in terms of the , the amount of , of acid revival . We , we , we internally generate a big portion of what , of what's needed in the US .

Speaker #4: And then in Indonesia, we sell acid. And we'll be selling that's Grasberg ramps up. We'll be selling more acid because we'll start to operate both smelters in Indonesia.

Speaker #3: And then of course , in Spain , where we have a smelter that's all sold externally . And then in Indonesia , we sell acid and we'll be selling .

Speaker #4: So we're net long. And we do have in South America, we do buy acid. And as we said, we don't have a lot of exposure to the spot market at this point in time.

Speaker #3: That's Grasberg ramps up , we'll be selling more acid because we'll start to operate , you know , both smelters and Indonesia . So we're we're net long and we do have in South America , we do by acid .

Speaker #4: But if this continues, we'll have to look at what it means for 2027.

Speaker #6: Okay. Thank you.

Speaker #3: And and as we said , we don't have a lot of exposure to the , to the , to the spot market at this point in time .

Speaker #1: Our next question comes from the line of Tim Nataners with Wells Fargo. Please go ahead.

Speaker #7: Yeah. Hey, good morning. Two questions for me. I wanted to follow up on the Grasberg forecast. I know you talked about it being a timing issue.

Speaker #3: But if this continues , we'll have to look at what what it means for , for 2027 .

Speaker #10: Okay . Thank you

Speaker #7: But I just noticed and it's small, but it does look like some of the revisions extend out to 2029. So I just wanted some color there.

Speaker #1: Our next question comes from the Tim the Tanners with Wells Fargo . Please go ahead .

Speaker #11: Yeah . Hey , good morning . Two questions for me . I wanted to follow up on the Grasberg forecast . I know you talked about it being a timing issue , but I just noticed and it's small , but it does look like some of the revisions extend out to 2029 .

Speaker #7: And then pivoting to Peru, if I could, just would be interested in your thoughts on the upcoming political election given your presence at Cerro Verde.

Speaker #7: Thanks.

Speaker #4: On the Grasberg the real impact, the real significant impacts were in '26 and '27. We do have a small impact in '28 and '29.

Speaker #11: So I just wanted some color there . And then , you know , pivoting to Peru , if I could just would be interested in your thoughts on the upcoming political election , given your presence at Cerro Verde .

Speaker #11: Thanks

Speaker #3: On the Grasberg , the , the , the real impact , the real significant impacts were in in , in in 26 and 27 .

Speaker #4: But those are really on the margin. There really wasn't any we're not projecting any sort of issue related to this material handling issue as we get into those periods.

Speaker #3: We do have we do have a , a , a , a small impact in , in 28 , in , in 29 .

Speaker #3: But those are really on , on , on the margin . There really wasn't any . We don't we're not projecting any sort of issue related to this , this , this material handling issue .

Speaker #4: That's just the normal forecasting updates in this rounding. It's pretty close to where it was.

Speaker #7: Got it. Okay. And then your thoughts on Peru, if I could?

Speaker #3: As we get into those periods That's just the normal forecasting updates and this rounding , it's pretty close to where it was

Speaker #4: Well, politically, we work with any administration. There's been as you know, there have been many presidents in Peru in recent years. And so we're prepared to work with any administration that comes in.

Speaker #11: Got it. Okay. And then your thoughts on Peru, if I could.

Speaker #3: Oh , I you know , politically we work with any administration . There's been , as you know , there have been many residents in Peru in , in recent years .

Speaker #4: And we have a really good relationship with which is really important in Peru with the local communities. We know we have to earn that every day.

Speaker #3: And so we're prepared to , to work with any administration that comes in . And we have a really good relationship with the , which is really important in Peru with the with the local communities .

Speaker #4: But that's really important at the local levels as well in Peru as we manage our risk there. Having that relationship and having the partnership that we have on water that we supply to Arequipa has been really positive for Cerro Verde.

Speaker #3: We know we have to earn that every day . But that's really important . You know , at the local levels as well .

Speaker #3: In Peru , as we , as we manage our , our , our risks , there , having that relationship and having the partnership that we have on water that we supply to , to Arequipa has been been really positive for , for Sara Verde .

Speaker #4: But in terms of changes in administrations, we'll just continue to work, do the right thing. Good corporate citizen in Peru with great benefits to the community.

Speaker #4: So that's been a real positive for Cerro Verde for many years. And we expect that in the future as well.

Speaker #3: But in terms of , you know , changes in administrations , will , you know , we'll just continue to work , do the right thing .

Speaker #7: Okay. Thank you.

Speaker #2: Yeah. Let me. Let me just add that what Kathleen mentioned about our relationship with Arequipa is really special. And our team down there deserves a lot of credit for the way that they've built relationships with the community.

Speaker #3: You know , good corporate citizen . And in Peru , with great benefits to the community . So that's that's been a real a real positive for Sara Verde for many years .

Speaker #3: And we expect that in the future as well .

Speaker #11: Okay . Thanks . Yeah . Let me

Speaker #2: When so many other mining operations down there face a lot of challenges from the community. So that's and we've dealt with a whole wide range of presidents politics are very complicated.

Speaker #12: Let me just add , let me just add that what Kathleen mentioned about our relationship with Eric is really special and our team down there deserves a lot of credit for the way that they've built relationships with the community when so many other mining operations down there face a lot of challenges from the community .

Speaker #2: But you can look at our operating record and see how we've operated at Cerro Verde throughout all that turmoil. And I'm confident we'll continue to do so.

Speaker #12: So that's and we've we've dealt with a whole wide range of presidents . Politics are very complicated , but you can look at our operating records and see how we operate at a Sierra Verde throughout all that turmoil .

Speaker #7: Okay. Thanks again.

Speaker #1: Our next question will come from the line of Orest Wowkodaw with Scotiabank. Please go ahead.

Speaker #8: Hi. Good morning. A couple for me, please. Notice the idle cost recovery costs at Grasberg went up to 1.3 billion from 900 million previously in terms of costs that are being excluded from your reported cash costs.

Speaker #12: And I'm confident we'll continue to do so.

Speaker #11: Okay . Thanks again .

Speaker #1: Our next question will come from the line of Boris with Scotiabank . Please go ahead .

Speaker #13: Hi . Good morning . A couple for me , please . Notice the cost recovery costs at grasberg . Went up to 1.3 billion from 900 million previously in terms of costs that are being excluded from your reported cash costs .

Speaker #8: Is that I'm just wondering is that incremental dollars going out? Or is that you're just shielding more of that from being included in cash costs?

Speaker #4: That's basically the because we're not at full capacity in the second half, a portion and it'll start being a declining portion. But a portion of our costs are expensed.

Speaker #13: Is that I'm just wondering , is that incremental dollars going out or is that you're just shielding more of that from being included in cash costs

Speaker #4: And don't go through the inventory and cost of sale. So it's really it's not an increase in cost. It's really characterization of whether it's included in our unit costs or how it's attributed for accounting purposes.

Speaker #3: That's basically the the because we're not at at full capacity in the , in the second half a portion and it'll be start being a declining portion , but a portion of our cost are expensed and don't go through the inventory and cost of sales .

Speaker #4: So we're just following the accounting guidance. And as we modify the ramp-up schedule, since we're not at capacity yet, a portion of our costs are treated as idle.

Speaker #3: So it's really it's not an increase in cost . It's really characterization of whether it's included in our unit costs or how it's treated for , for accounting purposes .

Speaker #4: And those are expensed right away. So that's really what that is. And it's really no change in absolute costs other than the input costs that we have with diesel, etc.

Speaker #3: So we're just following the accounting guidance . And as we modify the , the ramp up schedule , since we're not at capacity yet , a portion of our costs are treated as , as , as idle .

Speaker #4: But in terms of the idle cost methodology, that's consistent.

Speaker #8: Okay. Perfect. And then just coming back to the operating recovery at Grasberg, you've identified the shoots as being a bottleneck here for the more substantial level of wet ore.

Speaker #3: And those are expensed right away . So that's , that's really what that is . And it's really no change in absolute , absolute cost other than , you know , the input costs that we have with diesel , etc.

Speaker #3: . But in terms of the idle cost methodology , that's consistent .

Speaker #8: Are there any other potential bottlenecks ahead as this one gets solved that could play into the recovery rates?

Speaker #13: Okay , perfect . And then just coming back to the operating recovery at Grasberg , you identified the shoots as being a bottleneck here for the more substantial level of wet or are there any other potential bottlenecks ahead as this one gets solved that could play into the recovery rates

Speaker #4: This is the big one. This is the big one. It's Mark was saying we our plan in terms of mining has been to have the mining capacity and the loading capacity at the extraction level to handle wet material.

Speaker #3: This is this is the big one . This is the big one is is Mark was saying , you know , we , our , our plan in terms of mining has been to have have the mining capacity and the loading capacity of the extraction level , to handle and to handle what material .

Speaker #4: So this is really just a logistical of how to get it loaded onto the trains. So this is really the solving this issue will get us where we need to be in terms of the large-scale ramp-up.

Speaker #3: So this is really just a logistical of how to get it , get it loaded onto , onto the trains . So this is really the , the solving this issue will get us will get us where we , where we need to be in terms of the , the large scale ramp up .

Speaker #8: Okay. But the wet versus dry doesn't impact the capacity of the trains. Is that correct?

Speaker #4: Right.

Speaker #8: Okay. Thanks so much.

Speaker #1: Our final question comes from the line of Daniel Major with UBS. Please go ahead.

Speaker #13: Okay . But the wet versus dry doesn't impact the capacity the trains . Is that correct ?

Speaker #9: Hi. Thank you. Two quick follow-up questions. Firstly, just looking at slide 9 of the presentation again, it doesn't look like there's been any significant change in the ratio of wet to dry in PB1S or in the other sections.

Speaker #3: Right .

Speaker #13: Okay . Thanks so much

Speaker #1: Our final question comes from the line of Daniel Major with UBS . Please go ahead

Speaker #14: Hi . Thank you . Two quick follow up questions . Firstly , just looking at slide nine of the presentation . Again , it doesn't look like there's been any significant change in the ratio of wet to dry in PB one s or in the other sections .

Speaker #9: Is that the right read? So no change there?

Speaker #4: Well, this really was the this really was the comparison in PB2 and PB3. Of wet to dry. So PB1, we're still doing our work on PB1 to be in a position to restart PB1 south by middle of next year.

Speaker #14: Is that the right read . So no change there

Speaker #3: But this really was the this really was the the comparison in PB two and PB three . Of of wet to dry . So PB one we're still doing our work on PB one to to be in a position to to restart PB one South by middle of next year .

Speaker #4: So this chart really just deals with the wet to dry in PB2 and 3. In terms of the overall contribution of PB1S and then ultimately PB1C, it's relatively small that we have in these forecasts.

Speaker #3: So this , this chart really just deals with the , the wet to dry in , in in in PB two and three in terms of the , the , the overall The overall contribution of PB one S and then ultimately PB one C it's relatively small that we have in these forecasts .

Speaker #4: So our focus, our initial focus is to get scale from PB2 and PB3. And then optimize the situation at PB1S and then as Mark said, as we get more of our de-risking done, with the work we're doing with the drainage at the surface, consider reopening PB1C.

Speaker #3: So our focus , our initial focus is to get scale from PB two and P three and then optimize the situation at PB one S , and then as Mark said , as we get more of our de-risking done with the with the work we're doing with the drainage at the surface , consider reopening PB one C but this plan largely , particularly in in 26 , 27 , 28 timeframe is largely from the PB two PB three ramp up

Speaker #4: But this plan largely particularly in 26, 27, 28 timeframe is largely from the PB2, PB3 ramp-up.

Speaker #8: I might just add that.

Speaker #9: Okay.

Speaker #8: I'm sorry. Go ahead.

Speaker #9: No, maybe you were answering that. I mean, I was just going to say, are you also then installing the similar modifications to the shoot systems in PB1S to ensure that you can achieve nameplate capacity even if the ratio is higher in that zone as well?

Speaker #14: Okay

Speaker #4: I'm sorry . Go ahead .

Speaker #4: Yeah. So that was already planned. That was already part of our plan. Is to have these devices in the panels in the shoots in PB1 shoot galleries in PB1.

Speaker #14: No . Maybe you were answering . I mean , I was just going to say , are you also then installing the similar modifications to the shoot systems in PB one S to ensure that you can achieve nameplate capacity , even if the ratio is higher in that zone as well .

Speaker #4: But go ahead, Mark.

Speaker #5: Yeah .

Speaker #15: So that was already planned .

Speaker #8: That was what I was going to add. I was just going to let him know that Daniel know that the shoots in PB1 were damaged with the external mud rush.

Speaker #3: That was already part of our plan .

Speaker #15: The , the

Speaker #3: Is to have have these devices in the , the panels in the , in the chutes and PB one chute galleries and PB one .

Speaker #8: So the plan was to replace them with the newer technology.

Speaker #3: But go ahead . Mark .

Speaker #9: Okay. And then just final one. What is the CAPEX associated with these modifications? There's been no change to group CAPEX guidance. And if you've deferred CAPEX, is there any implications on the mine plan beyond 2030?

Speaker #4: That was what I was going to add. I was just going to let him know that Daniel knows that the shoots in PB1 were damaged with the external mud rush.

Speaker #4: So the plan was to replace them with the newer technology

Speaker #4: These are not terribly expensive equipment that we're installing. We've added something on the order of 60 to 70 million dollars in CAPEX associated with this.

Speaker #14: Okay . And then just final one . What is the CapEx associated with these modifications ? There's been no change to group CapEx guidance .

Speaker #14: And if you've deferred CapEx , is there any implications on the mine plan beyond 2030 ?

Speaker #3: These are not these are not terribly expensive equipment that we're that we're installing . We've added something on the order of 60 to $70 million in CapEx associated with this , and had some timing variances within the plan that offset that .

Speaker #4: And had some timing variances within the plan that offset that. So it's not a major cross-driver, particularly considering how much copper and gold production you get from having this.

Speaker #4: So it wasn't a big cost. It didn't show up as a big cost variance. Capital cost variance.

Speaker #3: So it's not a it's not a major cost driver , particularly considering how much , you know , how much , how much copper and gold production you get from , from having this .

Speaker #9: That's clear. Thank you.

Speaker #1: And I will now turn the call over to management for any closing comments.

Speaker #4: Well, thank you, everyone. And thanks for taking so much time with us. And we'll continue to report our progress as we go forward. And we're available if anybody has any follow-ups.

Speaker #3: So it's , it wasn't a big cost . It didn't show up as a big cost variance , capital cost variance .

Speaker #14: That's clear . Thank you

Speaker #4: Thank you very much.

Speaker #1: And I will now turn the call over to management for any closing comments.

Speaker #1: Ladies and gentlemen.

Speaker #8: Thanks a lot, everyone. Thanks a lot, everyone. I can assure you we're going to be transparent in all things that go on with this ramp-up.

Speaker #3: Well, thank you, everyone, and thanks for taking so much time with us. And we'll continue to report our progress as we go forward.

Speaker #8: Thanks a lot.

Speaker #3: And we're available if anybody has any follow ups . Thank you very much

Speaker #1: Ladies and .

Speaker #12: Gentlemen , everyone . Thanks a lot , everyone . I can assure you we're going to be transparent in all things that go on with this ramp up .

Speaker #12: Thanks a lot

Q1 2026 Freeport-McMoran Inc Earnings Call

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