Freeport-McMoRan (FCX) 24 Apr 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Conference Call, where management will discuss revised operating plans in response to the COVID-19 pandemic and first quarter financial results. [Operator Instructions]

I would now like to turn the conference over to Ms. Kathleen Quirk, Executive Vice President and Chief Financial Officer. ma'am. ahead, go Please

A morning, website this welcome revised morning, first are financial and Good and press conference presentation fcx.com. the operating the call. our materials results. and operating Earlier we on quarter of everyone, you. today's to release our and available Freeport-McMoRan plans copy at Thank reported our

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addition been to the our today’s a analysts press In on and investors, today. of invited call. financial the replay webcast has available later to will be to listen website And

our our to refer Form include we’d and like call included to the begin results today’s forward-looking our and remind statements, we Factors press and press in the materials differ to comments, in to on certain XXXX like comments our materially. XX-K. We’d release described actual the that Before language of cautionary may everyone everyone release Risk and presentation

phone our they today Q&A executives the participate session. a Chief Conger Red number Officer; we’ve Johnson Adkerson, other our from on; Richard will Mark of be of On available Executive is is the got and our on on is as in call well Indonesia, senior to

financial will our plans. our and to Richard we summarize are over how Our our comments market be then for today our I'll turn in reviewing revised the quarter prepared and briefly materials outlook call on plans addressing will be the who principally and the focused conditions. first current results

Q&A for the As usual open up after our we'll prepared remarks. call

million expenditure in and reduce in you've release, response market to as plans series had in We've copper by reduced press conditions to operating the our capital capital also of XXX expenditures. effort volumes we've cost production costs revised seen an in our pounds a and announced the, reductions reductions. We

$XXX to attributable are inventory net a our in million $X.XX press $XXX in VI. results, valuation Roman attachment associated common our was X, or on million we first that numeral included loss terms other reported the quarter of share quarter which items detailed stock per In $X.XX a and that of release adjustments share with

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Our taxes adjusted EBITDA before EBITDA a first reconciliation And interest, our included quarter depreciation and $XXX earnings calculation the of XX for on we've totaled Page slide materials. of our million.

XXX,XXX XXXX reflected sales, Americas. Indonesia the higher from We lower quarter in during Our copper our January by of sold copper slightly quarter than ounces first and were and gold offset estimates. PT of sales the that volumes million pounds partially gold Freeport mostly production XXX higher

$X.XX price average price was realized just per over ago was year. price prior $X,XXX quarter $X.XX in per pound a the that Our in the first of realized per than average lower which gold above first for year the of quarter was XX% XX% the and pound the was first ounce quarter

in the net a than $X copper was the the quarter quarter per were first expectations. our Our lower cash They consolidated pound into averaged unit average pound. and $X.XX going costs estimate of per also about

Arizona. reduce for Project in roughly projects Star to U.S. Lone included in That for that expenditures our totaled unit Capital also we're production million $XXX and quarter $XXX increase the doing Indonesia and the million. and costs

significant we liquidity volatility the and consolidated We ended as a billion. of $X.X and $X.X XXXX. have credit billion of $XX under no borrowings cash billion balance manage revolving facility with debt We during quarter had our

materials. now to to will I'd call referring turn over slide like the be Richard who to our

I for during you everyone. and your this very time morning, staying participating thank hope in and call. difficult good safe well for today's you families So of each are

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have past the we years, levels crippling cut what debt Over half. in was in then XXXX four

months give billion term team XXXX, amendments banks XXXX. us notes near-term bank flexibility our at extending bank have during to in and Today which offerings for our ramp-up. significant two we've we credit debt refinance facility new with credit used $X.X to obtain In undrawn five-year we a recent her worked Kathleen raising our to During a currently to revolving extended rates also covenants, to we no $X.X had maturities. the attractive long-term billion maturities. of Grasberg total debt bond

now addresses Slide XX taking. now actions we're the aggressive

facing comprehensive a the going and Conger the is the continuing flows not out in Indonesia being undertook around supported challenge Indonesia. in and Red involving Cash of develop of we're process underground. managements were this his site generating time going of cash the team Our and company. to coming by team into across iterative Americas out

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we noted flow this to potentially as unit well levels prices well to and decline return of copper levels from with the potential Our gold. $X,XXX and of as earlier for EBITDA cost $XXX expect the projected as gold we copper prices XXXX double saw XXXX higher Cash benefit year.

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Our protect plan safeguard, of values. this real This is Freeport hallmark term a long organization.

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all during Note execution prices years within We where share two of were for plans. improvement of were FCX each these to successful crisis and followed. these the committed that

intensely value our all are in We shares. focused on restoring

to XX projects. Now, I Cerro of you brief a provide and Slide Verde. update addresses want operations

other affects declared the Peru. just and previously, was May which extended to Cerro Verde Peruvian reported This government As national a government order XX. mines emergency in

the we normal Cerro Our our we position restore managing and period health we Verde Cerro reduced work protocols so operations Verde great much team health of with a in that workforce for while is as can during to to operations. government this work protect doing smaller scale explain the

excess for day, several Cerro Verde X,XXX been capacity metric leading XX. operating to of mill tons quarters, March in throughput achieved of has up design per over

are operating of this about at We third currently a level.

important been the plants and developing government in a returning the in economy, region. keep the national of to to on normal are Verde Verde of large local employers community the the production to largest one levels up is Peru the Cerro and up. their Cerro Our and production to in of Returning has higher half. Verde ramping quarter second second late Cerro contributor

complete. coming to And Arizona We're expect in are Morenci we we very called our that this we XX production of us. nearing developing close and mine, we new months. schedule, mine the advancing Safford The largely project with Star. on Slide in is mine covers commence will in XX% is Lone Eastern to completion which third quarter. the adjacent to are Capital new our behind complete pre-stripping,

to production newly pad with year up ramp the forecast operation. have nearby Safford to started XXX on pounds time have of with million over per constructed to of opportunities capital is intensity. We increase low ore initially Project placement copper at leach

are at conditions warrant. Freeport cornerstone believe we be feature Star, long-term great and we opportunity We have the until excited it United States. a expansion will asset those about deferring While opportunities Lone remain for Lone market We significant for Star.

The mine well. go very continue Grasberg, pleased on report our underground to Grasberg is MLZ schedule. Block that for the Deep ramp Cave proceeding propagation up and Grasberg Cave to the

for our and to and indicators. performance in effective undertaking Mark milestones from productions consistently achieved performance such establish Been low We large-scale an congratulate or manner. these high this meeting little team PT-FI Johnson have I important its massive cost blocks. key exceeding advancing grade noteworthy

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half production first that It's year's was was last first throughput because only quarter, grades. scale metal demonstrates This noteworthy their to of PT-FI's similar ore quarter. of produce first last that yet rate year's bodies can about the underground quarter a quarterly mill these

gold of pounds will copper, have earlier and rates, higher average At unit year. production. X.X X.X two Average net grades is million ore these costs yield less in for the to will production higher average for are bodies while to $X.XX metal major of we situation, global expected the industry. continuing in of that billion in $X.XX In ounces operations five full project. copper per the over to Entire pound, compliments years, extraordinary rates, rare pound this a at the that's health years production on and the their than first managing deserves full execute large-scale notable projected team PT-FI performance

that mess about highlands, large people, portion We in even workforce of have the a dorms, of where in live halls. XX,XXX they work

remote major Our medical to providers. prevent They've any team actions series help proactive been this world-class is by with us a at supported outbreak of location.

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Our PT-FI global by that world-class PT-FI that's a in XX% organization. we Indonesia in MIND was late and are positive now a ID company Indonesia [technical development our now after FCX's and operating more place past, teams put business permit. supported difficulty] in now is state-owned XXXX, in much have XXXX years of where technical with shareholder, have named stakeholder relationship a December interest government our all the now IUPK Unlike we aligned. benefiting Indonesia

Slide talks as to the of IUPK. that part construct about XX committed the we smelter

project. located operations We Papua, populated in area of a eastern in are far this facing with our densely from delays It's Java.

We issues have restrictions extend in government we the XXXX of because to chain supply are notified and the December project delays deadline. worker of discussions and

experiencing. be beneficial, result to smelter with significance the the issues the incur PT-FI XXXX We that the government expenditures capital as we're in also on a not of are related the to of We expect reviewing do mutually that to government. delays smelter other might

prices markets. of from declining Copper a course. at demand from weaker the dropped looks XX have Slide copper GDP,

being provides to copper now coming copper suppliers the weak. Scrap indicating and or very part market projects have which of development refined China, pandemic currently curtailed emerging large by canceled. are and out is market, the We're hand that encouraged impacted mines other a coppers the been recovery. an by On of of

copper supported near being There the or Despite likelihood our that some copper of remains the ways curtailments situations, these our ability to stimulus outlook - the the near-term long-term help we're long anybody now actions on is else and trying ongoing term will business the we're strong supply highly around is not term world positive economies recover. uncertainties, base by seeing. predict to in

increasingly so Copper strongly carbon element the to in world efforts returning in the supported role - turning an overall has essential major but - in turning copper electronics by respects, limited. is be factors and continue economy, from the vehicles, world. other extended going is stations, also more fundamentals, to from to reduce charging in the global electronics world XG electric technical the of many in to Supplies extended you're and require

recover. Copper attractive predict - of be the can improve. Freeport as with highly is will to major higher movement. move commodity is to economic one will a conditions No and confidence move positioned when this a substantially beneficiary economies

referred a look I've developed to you included the infographic of have great I to Slide take Associations which as to you economy. thought of of and broad illustrating copper a job a ranges when it, Development I XX does at Copper moment uses ask in you just consider.

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Before will financial in foremost detail, close turning I want who Kathleen, to following. Freeport to outlook copper. with in more is review

current assets, Freeport's world. our are a establish portfolio large from that leader, which the troubled the supply standpoint. conditions, interest operate the among industry in the largest we demand major quality of mines the we position commodity will beyond for a have copper and supply is widely best - copper in considered high Looking

provides operating all to synergies valuable us the times days and across and of take brighter by with of it the come. these assets advantages flexibility like portfolio our to to And deal

reserve long-lived, South durable, in and United Indonesia. embedded with option Our franchises assets resource for and States, the growth. America Strong are

further. major margin years XX apart extended beginning and and price movements cash flows in stage copper advanced increase and from in XXXX, for Near term, Freeport is in for

suppliers, communities technical we countries financial and years. importantly, respect earned where have many operate. and of track workers, the customers, our execution through capabilities trust our record over and industry-leading markets We strong of most our those We've our partners,

most This of caves in gold the by and critically operation block block been operation history operating with long the we transition Colorado. early is have Our a XXXXs block extensive one We've aluminum in important the mining experience caving in since we an industry. factor in block the largest and important and the is world. Grasberg, standing Indonesia cave caving

the good and Our to in bad. times experience perform demonstrated battle has and capabilities testing management team

of We our metal" "prove in are ability to confident we've our as done past. the

Slide who about part close want our for Again, the committed recognize to team. by and want resiliency inspire XX. achieve family the persevere his success every day. entire talking I our me of and Freeport to I people. of to strength I'm all motivated be all of proud We're and stakeholders. to

I will take Kathleen, you let over.

Okay, thank you, Richard.

to and the plans outlook Slide our some begin we session. the turn details of and run Q&A through before operating I'll of financial XX

On of operating XX, revised present plans. our we a summary

on saying reliability, we Richard as integrity earlier, of capital plans. the while new long-range and we reducing operating the expenditures, was focused and develop As costs plans, maintaining safety, the

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in to Mine, supply by to At rate molybdenum mining current in and we Americas, capital our in million Climax that $XXX included of reduce our initiatives XXXX, are estimated the the $XXX XX% supply about mine - forward. go would we by at market previously add the innovation we capital match million that with conditions. In our production there Colorado, the that reduced as the better associated we capital going

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We for spending of a of by number also these and have combined Indonesia XXXX. XX% throughout in areas reduce tightened costs to our in to the reduce savings about operation belt

gold We also which and our over know $X,XXX plan and as currently today. plan $X,XXX gold was prior higher benefit from a gold adjusted based price, gold per is we've $X,XXX you this to ounce on

spending also Our was pandemic of a installation of is half over timing mill the the a in deferred we of in Indonesia by capital year million reduced of result by $XXX which as this delays the constraints on the that result current and upgrades, About XXXX. as Richard earlier, forecast referred spending Indonesian government. planned We've international the a with with current contractors. smelter reduced associated proposed in project to Indonesia discussions of and

to year, call expected mine late - our during sequencing earnings quarter the we our to prepared the in in revised the plan of Looking plans we year. at our of a compared XXXX during the plan that It's conjunction with summary be of is of in for weakest Slide the the release. financial also and the the this January. Because first XX, press January

under quarter. We second to capital flows current also expenditures our exceed plan the expect in for operating the cash

a $XXX you expect our as despite of can the to on and balance But million decline copper cash million here our plan by $XXX the for a period - see the assumed a expenditures previous capital in to prices. compared for nine-month that's improvement flows we year this in cash that's full year slide, average $X.XX operating exceed the in flows full

refunds flow improve of the associated our reductions of cash acceleration and benefits supplies flow. addition in cost to of to reflects items and and with tax In other number capital reductions, our a materials inventories and a plan series cash

and have of XXXX will with from large-scale addition these through strong Importantly, plan a the gone cost net a we that various believe low through in debt as testing volumes stress year and lower. process we mentioned, plans our plans boosted at our prior liquidity is a we've to compared XXXX we Richard position prices during Grasberg. bridges enter the us of us and put

Turning sales to show through we XXXX our Slide XXXX. for outlook XX,

in the also volumes of reflects this reducing note in previous estimates. and lower has the annum XXX MLZ. the mill of the you'll million the for it pounds up ramp This change the rates upgrade about we're slide, wide small associated the making sales impact plan with curtailments our a our Americas, that XXXX the includes in a which on are per of our As than project, mining mine deferral Deep

in to to related similar You from our estimates, see the also sales down in our the Climax byproduct copper Molybdenum plan mill changes XX% mines. our and change upgrade. the the reduction reflects are the mine Americas small that gold levels. resulting timing a moly sales in of XXXX at prior from Mine prior change are the and There about is

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can you our cash which the about in our than So pound. see cost in unit on basis first was first plan, over were actions. $X a Net quarter. per just of projected $X.XX impacts This quarter consolidated the the better

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page, the show We at bottom by makeup costs of the of region. our the

includes electrical power that the and XX% charts, costs. consolidated diesel see of of of XXXX. and prices XX% can other about than the have these pie our sources X% and energy, which represents, represents energy combined on diesel our You since declined and more diesel start Diesel

XXXX flat designed and move, cash flow using prices, pound we generate and Moving flow $X.XX it's molybdenum scenario billion as us over flow $X.XX seen show average and the operating over to in copper between $X $X is for quarters, of flows. cash Slide cash this various EBITDA $X.XX generating at generate you and many prices format of We we copper gold and can in billion XX, in volumes over billion XXXX this to could $X.X you've for capacity $X,XXX and what EBITDA and our at copper XXXX. here and over see at the over vary and and cash and $X costs of operating prices per at $X and operating $X.XX XXXX ounce would but present billion EBITDA hold per at and

the on sensitivities present side chart. of the We right

adjustments own copper or market your different make can to market gold as you outlooks. So

expect situation generate cash We XXXX Richard to flow. and we increases from talking was expect significant getting margins to financial about a our generate where - XXXX, as manage before very into will in we standpoint in cash

now on spending, cut Slide I'm We've XX.

billion cut to that other these we CapEx from available reductions we generate show details fund to debt other $X.X billion from. that that for flows of including we also So cash and CapEx cash flows came the $X.X We have where initiatives will have. be and excess initiatives and

For XXXX, lower $XXX in estimate. prior estimating expenditures. currently than million That's billion $X.X about our capital we're

and our reductions in focus been mainly The coming on XXXX conditions, expenditures review continuing date, be date, months. XXXX. depending We're plans to which our of plans for to the potential those additional to in revised on will we're capital reviewing market evaluating have

cut again, outlook the and Our we capital, plans in spending next strong preserving appropriately the over several years. have that

safeguarding business our economics and manage the and the we I liquidity that financial and on uncertainty and the as strength we will strong sheet pandemic, call. economic impacts. our during balance covered focused our just close on - associated throughout remain policy people We maintaining

as in flow, evaluated our dividends in basis. does plans position regular consider a Under This will on increased successfully much XXXX, flexibility to enter to not Board returns. priorities, expect our and XXXX. declare with enhanced be conditions And to be current we expect stronger shareholder and we market a cash execute

Thanks like for questions. call to today. attention open your we'd And operator, now for the

comes line question Hacking of Alex first Our from Instructions] with the [Operator Citi.

and Good morning and well. Kathleen, you Richard are doing guys staying and hope safe

of couple that’s if me on okay. Let a questions Grasberg, ask

the the down be The are having Grasberg, get will or, run contingency stockpiles? worst-case first significant halt kind it's that secondly all mean supply guess is you question then keep to that you on consumables of on there? and other safely you steps to scenario what able the holding there access things to is need congratulations how Are obviously And there But taking a where are outbreak, the difficult in plan. to you’re everyone a there. safe. to I I mining chains very up underground

worst-case discuss be bit would what in scenario. you a So, a the maybe little much. very Thank could contingency you

the chain actually now your Mark you Johnson, comment. is for Mark would you Papua Grasberg. how we’re with at Can on comment supply and it? Thank issues question. you dealing in

supply haven't interrupted, the we things a a on. Yes, like today had haven't our but have in community our grocery Obviously, here all up and those of plus always on in we haven't have Highlands, the problems. for issues we of a production one the of had up concerns. Nothing's stores, our issues. had development, But for all we supplies, some no that places run that's large any to any states, maintain medical no key been problem the we any our things we’re doing

On we to, we draw understand - consultants worst-case minimum personnel and need on going. minimum plans, mines our stope our we blockades dramatically we you need rates we'd in with in that needed the them sort to at that our a of we’ve Big draw. shut-off mentioned But could some mine. drop got We consideration. looked what just worked to keep have things do be and turn a the one would contingency that if At is as could we've and Gossan, the to we scenario of it’s

the GBC. now, instance in same about MLZ, loaders the run For the Deep in right we eight

That's production. our core

small is production So in we've equipment, of a lot that people a is of achieve the effort years to and got. our expansion core relatively out those construction the amount continued the

it's an ongoing process. So

scenario focus production plan and those contingency worst activities. the Our minimize case be on the would to in activities

Gagliano BMO Markets. is of Capital David from the question next with Your line

actions, congrats everything taking my tied at to my the like and I’ve AI My volumes question cost side and the for questions out the thanks on reductions mainly that Hi, to years in and for the are today. looks XXXX cash on initiative the before. you through CapEx improvements, is Clearly, least quick been this copper comprehensive highlighted regarding XXXX the me savings North update, guide America. it the

just under So back roughly lower verify continue my or you the plan underlying that to rate American XX% does target copper to normal are running normal North it assume question operate conditions do they up to do market and the XXXX ramp XXXX what and back operations and rates again? assume at those to operations volume up

Kathleen, XXXX our it’s XX% here reduction Dave of continues XXXX. mining have that’s in into in we rates part that put

that have to have during mines starting time. still idled but that production We of ramp-up, are some we period

when previous concentrator were our increasing rates, plans the at were initiatives, pursuing So in point. we were and where America's we we doing this both not mining that we’re milling calling rates

to milling and can could and if light on and switch start mining that bringing and market know improve again. hard we over off, you we production So our go not to time dramatically were increase a rates conditions at because that back take and could long is we'd have as look but a this

a in the most the some that assumes first - part of rates this mining others all operations and next of the the then we So through really curtailed mode increasing are of operations year and and remain aren't.

the It change plans delay us may nothing but So warrant. that about, from rate stop and volumes. there’s this of conditions the added market to it's could, about our But volumes year, to we as we delay that if because get there prior be a mixed could bag, those are the increasing it may would production. mining still over time talked timing there

sense us if give condition - what’s you is there warrant related a when the to follow-up, a market as just And say would conditions Okay. as market warrant just can a full? that you

plan copper the for year as to the and work in the potentially of a beginning we was saying prior based prices the on the at $X our $X.XX as forward. of of higher was was go ground things, context Well, place market Richard

near-term these you'd more plans, disciplined to that are whether we and the on operations we sure it about executing think I market can position the prices economy, we're that really certainty we capital restore really see going economic at start those move levels focused very have have to into we for be conditions XXXX our and looking preserve make to to So focused point. financial the XXXX, what back in costs, get but then as and beyond on around can mining during

different on there likely to point. things situations countries and is step-by-step be turn realistically are will not will Different Dave, this along in at be uncertainties situation to and And way. one going occur the

respond. fair our will our will be protecting of it overwriting of that given say be So the very how values long-term to measured assets, we objective on we’d

next line from Chris Terry the Your of question with is Deutsche Bank.

Verde’s a follow-on and just Cerro is I’m leaching just of well XXXX there. through I had there, just be less little of of Slide South mining Verde There I talk effect increase that exactly was that think mechanics maybe now terms But happening America, or understand particular? probably and appreciate production. bit can to that, I XXXX conditions, just flagged. America, America the XX, what how or just impact back you to now in copper of is David’s you a I might currently, XXXX that you to into trying so question on reasonably adjustments North on but in South to if again the XXXX, about, is to think Cerro have trying the carryover that, of just could understand maybe the offline

also significant capital deferred production - we've item We a we've also El at reduced Abra. well, there. Yes,

El in the also from about El XXXX XXXX, at in show our contributing we when Abra production that's is that's And mine was in and our our increasing also, lower But you to so we're compare plans, South show we production it. America. reducing like But rate Verde under flat XXXX do the Abra Cerro levels. mining it do

a significant prior So plans. reduction that's from our

Okay.

thanks. That's Okay, helpful.

to for follow-up one comments I on just me, the more the wanted smelter. Just on

think to So way working the but is that, still still but it? of billion just on back you right that is the the you about $X.X level, out Thanks. negotiations XXXX, exactly kind concept pushed

me that Richard, do you one? take want to

here. Yes, to you well in question. Unfortunately, little the ask static me line had I let repeat my

wanted is XXXX of saying the push what still you're concept, process the that I of detail in correct. more it's and I that was of bit just on to to a speak Sure. just out little just renegotiating got it. understand kind a you you're to just the smelter to in I billion think $X.X terms wanted

that get reluctantly decided wouldn't the the of issues to I operating So order build resolution Indonesia had smelter rights. renegotiation. a to with We we about Government a it of commit would characterize in our extending as longstanding to have the we’ve

that and achieved made XX% key And to we government. government a government. with one the joint shares. concession operating terms in sell return and the fiscal we that established XXXX by new positive state-owned next interest of a company as the principally And the got Rio acquiring through deciding Also venture financial rights to to cut their with working facilitating you that along was relationship know clear was Tinto

chain and meantime, like. contractors in around Government where Government the we're the struggling the because with revenues commitment investments. we at supply restrictions issues smelter the made world Indonesia worker like to with the and state we've planned, activity The had are and of economic on governments that because In located executing the are we we facts as So of the can't proceed lower commitment. that Gresik and

to for reconsider whether commitment the cut to changes throughout provide to with our some PTFI all this, with which lead to them MIND And ID But circumstances we all the government. smelter. current the agrees Government consider, engaging way proceeding we're commitment to would be this advantageous as the mutually are the new that fulfilling build with being circumstance we we’re that might unless we’re made the a our might what government doing government this smelter. So, to for clear through the

with of the from Stanley. Morgan De next Your line is Alba Carlos question

fine. has been everyone Hopefully,

regarding capital So positive my The you flow in the How the second going as the maybe in And that remainder - on may, little question is this more do row a generated the the production if surprise capital. provide lower something from surprise during working year? of And is working capital is or see cash there question, continued first maybe room is working QX. Indonesia. reduction in going of through forward of the a have to gold quarter levels or I company out outside? terms shipments to you. there? Can what bit you second you on Thank color is of for that

initiatives With mining as opposed working use the a mentioned capital Okay. as operations that projecting to we’re question, inventories through existing working the balance XXXX will have the is from respect here we to new a we in as our curtail having large one of buy the materials release to to source certain capital to to consumables cash degree. sheet ability

number the cash year. a bringing several a flow context have initiatives So we'll XXXX. forward we’re context the have that of refunds other our are a and the we're into there last working of of large reduction plans forward in so and several in were of materials and projected source over And some - years we showing weeks bringing in throughout over our the revised the that also capital developed tax next supplies. We're those

continue will in we beyond then? these QX QX, in QX, saw what so Kathleen, Okay, over

Right. Yes.

that heads people, an job matters. tremendously job other has up excellent we add just Kathleen done team and job is me in managing Steve our Let have heads suppliers. doing again great worker Higgins, with our doing who team relationships a complimenting fabulous our HR a and Global positive administrative Supply up who with and issues and financing. Danny her team is Hughes,

in largest customer. offering their of many the largest one cases customers We’re

this able with problem, costs, each and sit we reduce with suppliers down And our payment like. so ways other's way terms as to understand all deal we’re customers, to our Same and we we problems. with face find the

years. many together work We

cash finding to this we whole stone is you're those finding long-term ways result in of relationships, generate I how no going left Some to ongoing an our that unturned on we're but being seeing do of continue to in said and as also diligent team all ways as a basis.

some are projecting grades and our gold, the have forward. how And with grades In higher you with are terms of as our are that, some our any the minuses did and you'll plans still and we of question we measuring grades consistent comment we experience on grades recoveries if gold plans we gold and the further higher pluses the did against to go have don't grades. want I Mark, about that know

have in our just Yes. many Mark going before recoveries that, been Mark Kathleen, been recoveries respects. was how I noting been and above have I've talks, plan to add strong

maybe So talk about you that. could

really We we target potentially grades gold what quarter first or as we're - the copper the Deep and the Deep we the both tons, mining the in far difference in for was that talked We've were we about about grades cave copper What's the on management. the plan. MLZ significant above gold both in driving in for saw the and MLZ. just but that were seismicity. as Yes, is above XX%

so, of and And great got came very our we're material a from. exactly we we pull where system and it bucket now a each very every know - intent we is cave where bucket single cognizant in of draw fashion we've how even can the to it's and track

copper per grades and those right Deep quite the good grades were ton X.X the for both copper and up for just as at are able be the and said model. range. manage by we both Kathleen it was the It's came in to basis, quarter out We first cave advancement. to grades a pull the cave our X.X the with those plan, gram X.X% change gold better an the a in plan was happened daily not ended to happened following on grade Just in on MLZ

a So that was welcome surprise.

Our good. recoveries have been quite

these grades are and the that very Deep MLZ also high GBC deposit Grasberg- been copper. here copper mining the the said, grade, tracking the over in the As as very better that and on Big XX% Obviously, we better particularly - been high experience recovery. these at our the recoveries very of bodies Richard Grasberg the we've ore and over mine - Gossan. at of at well grades were that's has been the the life We respectable grade

that XX% been our track for the to which gold close is right recovery very we've then well we expectations. and in So on range the

Your next Jefferies. the question Chris from of LaFemina line is with

revise Hi, like you in improvements cash generating the your their different long-term higher from relates mine higher changes My good response Richard and to you prices, what but for encouraging. oil see prices balance the short-term few mining of some of over It's see current are their today they extended look question. Kathleen, the question might those assets. XXXX, plans, very operational actually period changes how CapEx which to operational to low good that sheet thank reduce making like flow years Looks sustaining you're led you in to the affect in in CapEx. back in cost your I is performance also my recall some of an positive and liquidity taking which and helped XXXX to spot and free last the the flexibility. companies

or is happen to you’re likely that that And is at structural longer-term integrity I'm just your the of Freeport without measures wondering short-term something taking it necessarily if that's assets? these jeopardizing

will that not resources we're push in there. the the and word significant because future the production in jeopardize be of will But Thanks, any is are deferring of it up value the Chris. spending to but this here. carry will future way jeopardizing The recovered because the some out would some over would production one apply this that resources will still not not - be certain money effects now to the of levels costs of have capital applied

of mill being production it spending we’re incremental that some have be will as result do there where you at occurs. But get delaying we but crushing an on see is will the capacity of it this timing. update to through of go destroying when could, we'll We each impact that What But in time not some question future and a better delays a views impact. and on at it. for quarter it's that will again Grasberg resources

Red a on Red, you comment have this? ask me Let

that specific required earlier example down to El new production leach pad for slowing we're in there one And capital the out push expenditures Kathleen in Yes, that rate mentioned that's Abra a future Richard correct. would be you're absolutely production. just order

if be So things the increase look there that and up, when able markets warrant. volumes we'll investment to make

sorry. As a follow-up,

cannibalizing in all would going to Red’s not, team operations of safety, I going is are not that were we're we're the using going We're equipments. strong not downturn that the It's very using just all be this we equipment to not add, compromise keep good equipment. to condition. of we with we’re during our that just

So higher do to But and aren't mining things terms that postponing things would not in value keeps destroy team. asset we're to we need doing a rebuilding of doing the don't plan. Red we're meet - that what and things to we pushing that

add So I just wanted to that.

will extended we initiatives downturn protect an result in of have you which prices whether in is, taking words, kind balance things companies and it to an of period a extended global that have As for their follow-up, period ultimately, other sheet, liquidity, an In think taking to than we really would to a could positive less to leads be, are will leads as suppose question themselves, production, companies otherwise? this are see case protect don’t have less have we'll had I don’t do that that cash to today this a flow lead to upturn of interesting than of my do actions production higher time. expected copper have

No question about that.

to that the like Supply you but what curtailments being flexibility sell don't copper to event with result, spoke before of to Chris, were it’s company, of a be beyond just have tested occurring, know where we think it's That's has liquidity. copper. any we assets feature impact. supportive projects in And now I with copper you copper, say And we be is we in XXXX. development a as going And have asset. most prices that where as happened. also, was situation supply this delayed, all was in some the

will and depending of run thing, ultimately to impact link So copper longer and that this there's this supportive be going a the last on supplies be prices. on severity of

line question is of from CIBC. with next Cabrera Oscar Your the

that a way took Richard, that something in operator the a few I cost quick providing not little you, team bit lot by this than whereas can to reductions of companies less mining the just of explore more are a in you morning the on - congratulations the Thank and wanted turnaround detail. level weeks everyone. good a get to

to if now was go I So could of help your an as with This wondering, $X.XX. lower a about site-end depreciating estimate changes world. costs cost the $X.XX how you this as getting was delivery production with much provide your us and lower well plan you’ve was talked original reduced being pound. and about can diesel around from

ballpark wondering could if provide of - you So for percentage I a any reduction? what of was estimate that the just accounted

Oscar, this is Kathleen.

production on that was those with mining of in combination many cost of so it combination pounds. costs effect we - removing all the but the a Americas, cost, flows through all of all a it’s so things, and removed of the So and production, associated the had labor that an

our a compared $X.XX costs, to lower also from prior which energy We was benefited about pound forecast.

XX%, down from Energy this gallon forecast, perspective, we in But $X.XX prepared impact these of we're forecasts a costs a long-term we a on lower than were diesel time are forecast. the $X using from that Americas prepared about another when cost. had they XX% this per and probably about

the impact was currencies benefit it's the U.S. in all the course but Indonesia. U.S., our in really of we currency Of the dollar saw business,

a driver cash - plus aspect production years really previously next that volume unit and the mentioned Indonesia we big pound the estimating reduced cost seen, were we the what's is I and costs production about by lower. as But you’ve that's net over about as for Indonesia our, costs And our the XX% of $X.XX going costs currency absolute five benefits to drive though by of costs reduced bring, to our the Grasberg in process over energy costs we're team in savings been Indonesia roughly cost and that have structure economic bring driving now a some for Indonesia. that in leading because and the down situation, and just $X.XX overall zero-based out many COVID and the using a the not pound been costs budgeting months in reflects as those to we've we of into underground but his Mark transitioned the been we've in

be there more cost showing XXXX, could you’re I mean to i.e. now? sources the are like $X.XX other reduced need cutting further use year-end the that if production you could lower

doing I look really think not make at what at flow further looking positive that down we’re what's we $X is copper cash and so at may production cutting sense.

noted cash iterate we our quickly how really and to as but will prices. regardless half, flow continuing you cash to a go have would structure to into at down here half But second it costs decline you operating generating Americas on if and look of we’re prices for be to that copper, We so business to substantially more we $X forward, some moved take second flexible us flexible is further. have evaluate

next is John the Independent Your Very with Tumazos question from John Research. of line Tumazos

there's company. copper for Thank you masks with infrastructure consistent or the strip money get linens properties a would very applications. things exciting much products wire might wire restaurant but sheet grant a taking government to which rod willing into or of that and or roofing and for going. or be applications the public in you very tables, be my chairs JV guess architectural for and capital it stimulus contribute antimicrobial Would for fabricators use sheet with and for your could the weaving the a of I need a countertops, limited service and Concerning amount to would rolling producers market. for question very supply apply multimillion a other copper It limited and electronics foil mill to and ton

we've part of question. John, lost your

understand I I question. your think

copper a to mill for Do want you strip build sheet? hot

industries. basis and companies our hopefully for the is to thing and these that with join capital think cost this work tried I ran likely forward then with - and the entrepreneurs, new for barriers these us more other and and company so past forth. provide will we is develop and of venture way because technical forth into to partners the so the of refitting We in things to

and and copper. telling flood changed is out of the are people seeing articles the truth world coming has about this this Now

be a a think to we going we the this as company will So create and working market forward. help industry will that promote with

I think of for likelihood I said be entrepreneurial that government some companies. our there support type would

might course, operating impacts to begun developing for mines, we Going already of forward, to continue talking lead this to will, but largely hospitals a of more world the get markets, surgeries that health going how things will the that that to people is occurred positive because is going and importantly how be needed see team developing but like copper our number hospitals even and world in the something these infections doing much and that see are in primary and we today's staggering. to before just we we've movement of focus of infections and be knee because for from for protection real they’re replacements

light going this copper that. in is demonstrating be contribution leader that a to a make bringing just and world can we’re the So as to metal a to

line from with is question Lucas next of FBR. Riley Pipes Your the B.

these I more very to a like question on to quantify in maybe congratulations bit starting very impact cuts XXXX? detail on difficult look impressive circumstances. and under especially follow up a the production a little Is around and to way Chris's earlier future everyone, this morning, of for Good response could there to Americas between the production. what wanted days trade-offs

we're period uncertainty It’s I mean do too to just now. that. right early of a in

loss price on flows, to focus our to Our ensure could lower has the been the of the Grasberg. copper we from volumes cash bridging higher from from that bridge company

this so when we plan this that's And on focused plan. we’re what executing doing with

in For mean any well. world's beyond of sit the us I able be. there the where today run be of going uncertainties there's are that period even and short to predict as to still and to time, Any here

what right position addressing say comfort have the has. to get now we a can whatever of that the in what world not just to flexibility you in we're to do. But So is think we're going I

doing track We have that. record of a

what XXXX-XXXX beginning how did it. and to we in what and on. look can we did see we're what see keep going You XXXX-XXXX, And that's in working did we

have down we So story, of this flexibility unfolding road, process. as in But positive negative. a is company whatever dealing lot a or an with work comes in the

the it's over But assess forward. as as out show to And going years our plans Richard right five pretty to be we that flat Americas. dynamic for next the said, now going going point situation

done understand. responding again good here. I to unanticipatable this Yes, I I appreciate think environment job the really and color you’ve

Thank position relative declining broader do of you. and in you supply is your concerns the a just your safety there's what's lot what position the to prices? due taken first from cost industry kind response and then relative - question today to anticipate the Do - miners being due you terms cost and what's of a relative the obviously Second anticipate supply response precautions. been copper of offline

and assets. having profits low during resources range end when mines Well, we and are when combined the of industry that extend costs, to generate we Dodge lowest portfolio having together because relatively ability the times have And portfolio the structures of nature enables with mines in production margin of good to mines the high are is ago these Grasberg produce are we that that by us together low. relatively to back put cost scale assets of on what with Phelps the years prices

the was sets by strategic ago assets we issue of the together. the Dodge faced huge And Phelps achieved and years that putting benefit that

is other calculate with focused we site average the compare site. when we average can the that by business, company and a So an as management companies. But manage on

And do is within so even within cost of adjusted get areas mine large here not. drive of a that seeing mines actions And you’re there elements like layering reduce Morenci, to down. our are our what production, today cost of and that production others

is managed management average But no calculated. the by there So, - site site. the is is

here the at - reinvestment having now, we production have at when thing long-life I to a resources. into a Grasberg from decline program a from once of making and additional looking Grasberg the lot aside add also very the we'll reserve base free cash will but think in CapEx right we Americas, and is we're long-life you're benefit get flow, other reserves generating and be of lot very we

some risk a cash think to to CapEx replace short plus don't having reserve not cost and about, life we So when the have. have CapEx profile look long we've reserves because of a that other you the you mines such lot reinvestment at we're might got and the spend

the and the costs comes team, what the So we looking we this we plan with look Americas this at at is went it. when capital were when cash and through that really with less Red

- lot capital trying you're And grow, with of sometimes got when got to and production that a build comes you've you've that.

plan And plan have that's on so cash plus right but sense are really cash is the cost to right a lower now a focused what now capital that operating and us for expenditures makes costs, also lowest we we're the on.

will management any we closing to over for remarks. the turn Now call

appreciate it's a Well, long call. attention. your I been

warranted doing is because to length explain with think we wanted make face, our that uncertainties best to the sure what of we we I try to the call did of the we're this and company. to you

As than you difficult where are pleased in very we can situation. and tell, uncertain we a with are more

else at to might sure to are is let deal guard down quite because of us with. going have none not all we're what Our up, we

your so And for attention. thanks

to them. or do and prayers lot. time and Thank and and people you If you as have well. our this the is It's doing questions to David friends healthy to everyone. Joint out a world around and be about stay what all families respond and please in with hearts reflective I many of so comments, we'll situation to so go touch get follow-up you, your hope

participation. and for Ladies that gentlemen, today. concludes Thank your our call for you

You disconnect. may now