FCX's Cerro Verde to Raise Output - Analyst Blog
19 August 2011 - 10:30AM
Zacks
Freeport-McMoRan Copper
& Gold Inc.’s (FCX) $3.5 billion Cerro Verde project
expects to increase its annual output by 45% to 1 billion pounds of
copper.
At Cerro Verde, the feasibility
study for a large-scale concentrator expansion was expected to be
completed in second-quarter 2011. In the second quarter, management
had stated that the $3.5 billion project would expand the
concentrator facilities from 120,000 metric tons of ore per day to
360,000 metric tons of ore per day and provide incremental annual
production of approximately 600 million pounds of copper beginning
in 2016.
Freeport expects to file an
environmental impact assessment in the second half of 2011.
Cerro Verde is an open-pit copper
and molybdenum mining complex, which was once government-owned. The
Peruvian government acquired the property from Anaconda in 1970 and
divested the property in 1994. Cerro Verde has the third oldest
SX/EW facility in the world.
Cerro Verde is 53.56% owned by
Freeport, 21% by SMM Cerro Verde Netherlands B.V., 19.3% by
Compania de Minas Buenaventura S.A.A., and 6.14% by other
shareholders, whose shares are publicly traded on the Lima Stock
Exchange.
On July 21, 2011, Freeport reported
a profit of $1.37 billion or $1.43 per share in the second quarter
of 2011, which more than doubled from $649 million or 70 cents per
share in the same quarter of 2011. The profit exceeded the Zacks
Consensus Estimate by 9 cents per share.
Revenues in the quarter surged 50%
to $5.81 billion, surpassing the Zacks Consensus Estimate of $5.63
billion. Consolidated sales from mines totaled 1.0 billion pounds
of copper, 356,000 ounces of gold and 21 million pounds of
molybdenum compared with 914 million pounds of copper, 298,000
ounces of gold and 16 million pounds of molybdenum in the second
quarter of 2010.
Headquartered in Phoenix, Arizona,
Freeport-McMoRan Copper & Gold Inc. is engaged in mineral
exploration and development; mining and milling of copper, gold,
molybdenum and silver; as well as the smelting and refining of
copper concentrates.
The company conducts its operations
primarily through its principal operating subsidiaries, PT Freeport
Indonesia, Freeport-McMoRan Corporation (formerly Phelps Dodge) and
Atlantic Copper. Its major competitors include Newmont
Mining Corp. (NEM) and Southern Copper
Corp. (SCCO). It currently retains Zacks #3 Rank on the
stock, which translates to short-term rating of “Hold”.
FREEPT MC COP-B (FCX): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis Report
SOUTHERN COPPER (SCCO): Free Stock Analysis Report
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