Record gold sales and throughput in the second quarter have allowed
The Indonesian unit churned out 389.8 million lbs. copper and a record 813,600 oz. gold during the latest quarter ended June 30, well above the 256.2 million lbs. and 330,500 oz. produced in the corresponding period in 2000. Throughput reached a record 240,000 tonnes per day.
Chairman James Moffett notes that despite low commodity prices, the mine’s strong performance is providing significant profits and allowing the company to make debt repayments.
Freeport posted net income of US$36.3 million (or 25 per share) in the latest quarter, compared with a net loss of US$18.6 million (12 per share) a year earlier. The company reduced its debt by US$123.1 million for the second quarter, and by US$177.1 million for the first six months of the year. These repayments bring Freeport’s debt down to about US$2 billion.
For the full year, Freeport expects to produce 1.4 billion lbs. copper and 2.5 million oz. gold (an increase of about 200,000 oz. gold from 2000). Net unit cash costs for 2001 are expected to average US9 per lb. of copper, after gold and silver credits.
On the exploration front, Freeport continues to report encouraging results from drilling of the Ertsberg East Surface target. Thirteen recent holes intersected 1,477 metres of ore-grade mineralization. The intercepts averaged 1.65% copper-equivalent, with grades ranging from 0.74% to 2.7% copper-equivalent. Six drill rigs, operating from surface and underground, are exploring and delineating the grades and geometry of this target. A previous preliminary study concluded that open-pit mining is possible, and an ongoing feasibility study is examining this target for near-term development.
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