2nd UPDATE: Freeport: 1Q Copper Sales 960 Million Lbs Vs 1.0 Billion On Year
21 April 2010 - 3:43PM
Dow Jones News
Freeport McMoRan Copper & Gold (FCX) Wednesday said its
first quarter copper sales fell to 960 million pounds, from 1.0
billion in the year-earlier period, but noted it expects higher
sales in the second half due to improved sequencing at its Grasberg
mine.
The company, the world's second biggest copper producer after
Chile's Codelco, reiterated that it expected copper sales of 3.8
billion lbs in 2010.
"Anticipated changes in ore grades throughout the year are
expected to result in significant variability in quarterly
volumes," Freeport said. "Mine sequencing at Grasberg is expected
to result in higher copper and gold grades by the fourth quarter of
2010," it added, noting that around 60% of copper and gold
production at its Indonesian subsidiary is expected in the second
half of 2010.
Freeport still isn't producing at full capacity since it took
steps to cope with the deteriorating economic backdrop last year.
The company slashed output, deferred development projects and
canceled equipment orders.
But as copper prices more than doubled through 2009, the company
in October said it planned to restart activities at its Miami mine
in Arizona, resume a planned incremental expansion at the copper
concentrator and sulfide ore at its Cerro Verde operation in Peru,
and resume construction for its sulfide expansion project at El
Abra in Chile.
It made one further change Wednesday, announcing it is
initiating plans for a staged ramp-up at its Morenci mine in
Arizona to 635,000 metric tons of ore a day and is evaluating
further possible increases.
This is up from 450,000 tons a day currently and follows the
restart of the mill associated with Morenci in March, to process
available sulfide material currently being mined.
Freeport's gold sales fell to 478,000 troy ounces from 545,000
oz a year ago, while molybdenum sales rose to 17 million pounds,
from 10 million pounds in the first quarter of 2009. Using
estimated sales volumes for 2010 and assuming average prices of
$3.50/lb of copper, $1,100/oz of gold and $15/lb of molybdenum for
the remainder of the year, Freeport said its consolidated operating
cash flows, net of an estimated $0.3 billion of working capital
requirements, are estimated to exceed $6 billion in 2010.
Operating cash flows totaled $1.8 billion for the first quarter
of 2010, including $280 million from working capital sources.
Capital expenditures totaled $231 million in the quarter.
The company said its strong cash flow generation and the
positive outlook for its business was allowing Freeport to resume
its focus on investments in its assets.
Earlier Wednesday, Freeport reported a profit of $945 million,
or $2 a share, up from $103 million, or 11 cents a share, a year
earlier. Revenue jumped 68% to $4.36 billion.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413;
andrea.hotter@dowjones.com
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