Ron
Have owned fcx for several months and will continue to do so for several more months. Jim Bob is doing something right in Indonesia----------plays a better game of golf than Muhamad Bob?
Rick
FREEPORT-McMoRan COPPER & GOLD UPDATES GEOLOGICAL RESOURCES AND EXPLORATION ACTIVITIES
NEW ORLEANS--(BUSINESS WIRE)--Sept. 18, 1997--Following the Board of Directors meeting of September 16, 1997, when exploration, engineering and mine planning activities since May of 1997 were reviewed, Mr. James R. Moffett, Chairman and Chief Executive Officer of Freeport-McMoRan Copper & Gold Inc. (FCX), reported the following significant geological resources and proved and probable reserves in and around the Grasberg mineral district operated by FCX's 85.9 percent owned mining subsidiary, P.T. Freeport Indonesia Company (PT-FI):
Contained Recoverable
Metal Metal
------------- -------------
Copper Gold Copper Gold
Metric Copper (bil- (mil- (bil- (mil-
Tons Equiv. lion lion lion lion
Category (1) (millions) (2) pounds) ounces)pounds)ounces)
------------- ---------- ------ -------- -------- -------
Proved and Probable
("P&P") Reserves
as of 12/31/96 2,008.3 1.96% 52.7 76.2 43.2 55.3
Geological Resources (3):
Potential P&P
Additions
by 12/31/97 200.0 1.86% 4.6 8.1 3.7 5.9
Potential P&P
Additions
by 12/31/98 244.1 1.55% 4.5 8.6 3.7 6.2
----- ---- ----- ---- ----
Potential P&P
Additions for
1997/1998 - subtotal 444.1 1.69% 9.1 16.7 7.4 12.1
----- ---- ----- ---- ----
Potential P&P
Reserves by 12/31/98
(incl. amounts to be
mined in 1997/1998) 2,452.4 1.91% 61.8 92.9 50.6 67.4
Geological Resources
remaining
as of 12/31/98 693.4 1.30% 13.1 15.1 10.7 11.1
----- ---- ----- ---- ----
Total P&P Reserves
and
Geological Resources 3,145.8 1.78% 74.9 108.0 61.3 78.5
======= ==== ===== ==== ====
Notes:
(1) This table enumerates aggregate reserves, resources and metal quantities for PT-FI and its joint venture partner, Rio Tinto PLC (Rio Tinto), in Blocks A and B of the PT-FI contract of work areas. A full description of the reserves and geological resources by property is contained in Exhibit I. (2) Copper equivalent percentage is used to define relative ore value in terms of copper content. The calculation considers estimated recoverable metal cash values, net of mine, mill and smelter costs and royalties and is used to equate non-copper metals into equivalent copper units. (3) The term ``geological resource'' indicates estimated mineralization identified by drilling which has reasonable potential for economic recovery based on geological models and assumed continuity. For geological resources to be reclassified to the proved and probable reserve category, additional drilling, studies of cut-off grades, defining of mine shapes and plans, estimation of metallurgical flow sheets and metal recoveries, associated costs and prices of salable products must be developed that indicate that the resource can be mined economically. There can be no assurance that the geological resources will ultimately meet the criteria and be reclassified to the proved and probable reserves category.
Aggregate proved and probable reserves at year-end 1996 totaled 2.0 billion metric tons of ore yielding contained metal of 52.7 billion pounds of copper and 76.2 million ounces of gold or recoverable reserves of 43.2 billion pounds of copper and 55.3 million ounces of gold. PT-FI's share, net of the interest of its joint venture partner Rio Tinto, of recoverable reserves at year-end 1996 was 35.9 billion pounds of copper and 47.4 million ounces of gold. Based on all available drill results, including drill results as indicated below, and further engineering studies, Mr. Moffett reported, in addition to the proved and probable reserves reported at the end of 1996, an approximate 1.1 billion metric ton geological resource of 1.45 percent copper equivalent representing aggregate contained metal of 22.2 billion pounds of copper and 31.8 million ounces of gold. This represents a potential increase from year-end 1996 aggregate proved and probable reserves of 18.1 billion pounds of recoverable copper, a potential 30 percent increase, 10.9 billion pounds net to PT-FI, and a potential increase in aggregate proved and probable reserves of 23.2 million ounces of recoverable gold, a potential 29 percent increase, 13.9 million ounces net to PT-FI.
Therefore, aggregate proved and probable reserves and geological resources now total 3.1 billion metric tons of ore with aggregate contained metal of 74.9 billion pounds of copper and 108.0 million ounces of gold and aggregate recoverable metal of 61.3 billion pounds of copper, 46.8 billion pounds of copper net to PT-FI, and 78.5 million ounces of gold, 61.3 million ounces of gold net to PT-FI. The additional geological resources which are expected to be added to proved and probable reserves in the future will allow FCX to maximize shareholder value by optimizing its Grasberg open-pit and high grade underground operations.
Based on current expectations and mine plans, approximately 200 million metric tons of 1.86 percent copper equivalent are expected to be moved from the geological resource category into proved and probable reserves by year-end 1997 representing additions to recoverable reserves net to PT-FI of 2.2 billion pounds of copper and 3.5 million ounces of gold. These additions are expected to come principally from the Kucing Liar ore body. Furthermore, PT-FI expects adding another approximate 250 million metric tons of 1.55 percent copper equivalent from the geological resource to its proved and probable reserves by year-end 1998 representing additions to recoverable reserves net to PT-FI of 2.2 billion pounds of copper and 3.7 million ounces of gold. These reserve additions are expected to come principally from the Grasberg, Kucing Liar and Wabu resources. Thus, by the end of 1998, PT-FI's net share of proved and probable recoverable reserves are expected to increase by 4.4 billion pounds of copper, or 12.3 percent compared with year-end 1996 levels, and 7.2 million ounces of gold or 15.2 percent.
Nearly 700 million metric tons from nine locations within PT-FI's Block A and Block B areas are expected to remain classified as geological resources at year-end 1998 subject to (1) adjustments from any new discoveries made over the next 16 months which could increase geological resources and proved and probable reserves, and (2) adjustments for a greater or lesser amount of geological resources added to proved and probable reserves by year-end 1998 than currently anticipated, and (3) adjustments resulting from new information from the company's ongoing exploration and development activities, or any other factors, external or internal, which may increase or decrease these amounts. Future drilling results on the 5.1 million acres currently under FCX's Contracts of Work could have a major impact on calculation of future proved and probable reserves and geological resources. The 700 million metric ton geological resource of 1.3 percent copper equivalent expect to remain at year-end 1998 represents potential recoverable metal, net to PT-FI, of 6.4 billion pounds of copper and 6.7 million ounces of gold.
James R. Moffett, Chairman and CEO of FCX, said, ``We are extremely pleased with our exploration and engineering activities which indicate aggregate proved and probable reserves and geological resources of approximately 75 billion pounds of contained copper and 108 million ounces of contained gold, which represents a significant milestone for the Grasberg mineral district.'' Mr. Moffett continued, ``As we have since the discovery of the magnificent Grasberg ore body, we will continue our active exploration program in both the Grasberg mineral district and Block A, as well as in Block B and Eastern Mining. We hope to continue adding to the above stated proved and probable reserve and geological resource base.''
Below is a list of drill hole intercepts since May 12, 1997, by property, which were used to derive the significant increases in estimated geological resources:
BLOCK A
KUCING LIAR DRILL RESULTS
HOLE ID INTERVAL (m) %Cu gAu/t %CuEq
------- ------------ ----- ----- -----
KL 32-1 61.0+ 1.74 1.46 2.69
KL 30-2 208.4 1.25 0.90 1.84
KL 30-1 415.5 1.46 1.06 2.15
KL 28-2 175.0 2.01 3.21 4.10
KL 28-1 221.0 1.97 1.82 3.15
KL 26-4 70.1+ 1.05 1.76 2.19
KL 26-3 236.9 0.96 0.63 1.37
KL 26-2 383.4 1.57 1.55 2.58
KL 26-1 210.9 1.51 1.57 2.53
KL 24-7 19.0 1.33 1.03 2.00
KL 24-6 54.5 0.74 1.94 2.00
KL 24-5 129.7 1.89 2.23 3.34
DOZ DRILL RESULTS
HOLE ID INTERVAL (m) %Cu gAu/t %CuEq
------- ------------ ---- ----- -----
DZ 1-1 60.3 1.61 1.51 2.65
DZ 1-2 42.0 0.73 1.01 1.43
DZ 1-3 130.6 1.72 1.32 2.63
DZ 1-4 113.7 1.68 0.85 2.27
DZ 1-5 61.2 1.42 0.75 1.94
GRASBERG DEEP DRILL RESULTS
HOLE ID INTERVAL (m) %Cu gAu/t %CuEq
------- ------------ ---- ----- -----
GR 43-1 360.0 1.26 0.81 1.79
BLOCK B
WABU - EAST RIDGE
HOLE ID INTERVAL (m) gAu/t
-------- ------------ -----
BO 246-3 36.0 4.38
BO 246-4 72.0 3.38
24.0 2.02
BO 246-5 3.0 1.42
3.0 1.47
39.0 5.36
BO 261-1 57.0 3.23
BO 261-4 9.0 3.46
BO 269-3 27.0 2.97
21.0 1.24
18.0 3.06
BO 269-5 6.0 1.63
BO 269-6 27.0 3.81
3.0 2.04
3.0 2.02
BO 269-4 15.0 2.89
48.0 6.10
BO 358-4 3.0 3.54
BO 303-3 15.0 3.45
BO 292-1 9.0 2.09
BO 237-3 9.0 15.54
BO 246-1 27.0 4.05
BO 237-2 21.0 4.98
9.0 2.51
48.0 2.87
BO 237-3 9.0 4.24
9.0 2.49
BO 237-1 3.0 2.85
60.0 3.49
9.0 5.22
3.0 2.06
WABU - FI Zone
HOLE ID INTERVAL (m) gAu/t
------- ------------ -----
BO 85ED-2 11.0 2.39
30.0 2.41
12.5 3.63
BO 85ED-3 48.0 4.46
18.0 1.45
BO 95ED-3 12.0 4.64
6.0 1.21
BO 81ED-2 33.0 3.05
BO 81ED-3 21.0 4.58
BO 85ED-4 24.0 4.44
BO 81ED-4 21.0 1.15
3.0 1.04
3.0 2.44
BO 262ED-2 3.0 2.99
BO 270ED-1 6.0 3.93
BO 270ED-2 18.0 3.33
BO 270ED-3 6.0 2.04
9.0 3.77
BO 284ED-1 3.0 1.57
12.0 2.94
3.0 3.50
BO 285ED-2 36.0 2.76
BO 284ED-2 60.0 2.84
BO 302ED-1 30.0 2.85
BO 302ED-2 6.0 2.22
9.0 1.05
9.0 1.65
BO 312ED-1 9.0 1.65
BO 117ED-4 30.0 9.41
BO 133ED-2 12.0 2.26
FCX is engaged in mineral exploration and development, mining and milling of copper, gold and silver in Irian Jaya, Indonesia and the smelting and refining of copper concentrates in Spain. FCX is also involved in a joint venture to construct and operate a smelter/refinery in Indonesia.
Cautionary Statement: This press release contains forward-looking statements regarding proved and probable reserves and geological resources. The geological resources described herein will not qualify as proved and probable reserves until a comprehensive evaluation of costs, grade, recoveries and other factors has established their economic feasibility. Accordingly, no assurance can be given that the estimated geological resources will become proved and probable reserves. Additionally, important other factors that might cause future results to differ from these projections are described in FCX's 1996 Form 10-K filed with the Securities and Exchange Commission.
EXHIBIT I
PT-FI
BLOCK "A" AND "B" RESERVES/ GEOLOGICAL RESOURCES
AS OF SEPTEMBER 1997
Contained Recoverable
Metal Metal
----------------------------
Copper Gold Copper Gold
Metric Copper (bil- (mil- (bil- (mil-
Tons Equiv. lion lion lion lion
Category (1) Deposit (millions) (2) pounds) ounces)pounds)ounces)
------------ --------------------------------------------------------
P&P Reserves Block A
as of 12/31/96 2,008.3 1.96% 52.7 76.2 43.2 55.3
Geological Resources (3) :
Potential P&P
Additions by
12/31/97 Kucing Liar 110.0 1.88% 2.6 4.4 2.1 3.2
IOZ/DOZ 30.0 1.54% .5 1.2 0.4 0.9
Grasberg UG 60.0 1.97% 1.5 2.5 1.2 1.8
----- --- --- --- ---
Subtotal 200.0 1.86% 4.6 8.1 3.7 5.9
Potential P&P
Additions by
12/31/98 Kucing Liar 75.0 1.98% 2.0 2.9 1.6 2.1
Grasberg OP 50.0 0.95% .7 0.7 0.6 0.5
Grasberg Deep 50.0 1.92% 1.3 1.8 1.1 1.3
IOZ/DOZ 15.0 1.95% .5 0.4 0.4 0.3
Wabu 54.1 1.05% 0.0 2.8 0.0 2.0
----- --- --- --- ---
Subtotal 244.1 1.55% 4.5 8.6 3.7 6.2
----- --- --- --- ---
Potential
P&P Addi-
tions for
1997/1998 Total 444.1 1.69% 9.1 16.7 7.4 12.1
----- ---- ---- ---- ----
Potential P&P (incl.
Reserves by amounts
12/31/98 mined in
'97/98) 2,452.4 1.91% 61.8 92.9 50.6 67.4
Geological
Resources
remaining as DOM 14.9 2.48% .7 0.1 0.6 0.1
of 12/31/98 IOZ/DOZ 63.0 1.60% 1.3 2.0 1.1 1.4
Big Gossan 42.9 2.58% 1.6 1.9 1.3 1.4
Grasberg OP 100.0 0.53% .9 0.6 0.7 0.5
Grasberg UG 106.5 0.87% 1.5 1.3 1.2 1.0
Grasberg Deep 186.4 1.62% 4.6 4.5 3.8 3.3
Lembah Tembaga 52.9 1.71% 1.5 1.2 1.2 0.9
Grasberg HS 86.3 0.73% 1.0 1.0 0.8 0.7
Wabu 40.5 1.26% 0.0 2.5 0.0 1.8
---- ---- ---- ---- ----
Subtotal 693.4 1.30% 13.1 15.1 10.7 11.1
------ ---- ---- ---- ----
Total Potential
P&P Additions and
Geological Resources 1,137.5 1.45% 22.2 31.8 18.1 23.2
------- ---- ---- ---- ----
Total P&P Reserves
and
Geological Resources 3,145.8 1.78% 74.9 108.0 61.3 78.5
======= ==== ===== ==== ====
Notes:
(1) This table enumerates aggregate reserves, resources and metal quantities for PT-FI and its joint venture partner, Rio Tinto PLC (Rio Tinto), in Blocks A and B of the PT-FI contract of work areas. (2) Copper equivalent percentage is used to define relative ore value in terms of copper content. The calculation considers estimated recoverable metal cash values, net of mine, mill and smelter costs and royalties and is used to equate non-copper metals into equivalent copper units. (3) The term ``geological resource'' indicates estimated mineralization identified by drilling which has reasonable potential for economic recovery based on geological models and assumed continuity. For geological resources to be reclassified to the proved and probable reserve category, additional drilling, studies of cut-off grades, defining of mine shapes and plans, estimation of metallurgical flow sheets and metal recoveries, associated costs and prices of salable products must be developed that indicate that the resource can be mined economically. There can be no assurance that the geological resources will ultimately meet the criteria and be reclassified to the proved and probable reserves category. |
