PHOENIX--(BUSINESS WIRE)--
Freeport-McMoRan Inc. (NYSE: FCX) announced today that it has entered
into a definitive agreement to sell its 80 percent ownership interest in
the Candelaria/Ojos del Salado copper mining operations and supporting
infrastructure to Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) for $1.8
billion in cash and contingent consideration of up to $0.2 billion,
calculated as 5% of net copper revenues in any annual period over the
next five years when the average realized copper price exceeds $4.00 per
pound. FCX estimates after-tax net proceeds from the transaction of
approximately $1.5 billion, excluding contingent consideration.
James R. Moffett
, Chairman of the Board;
Richard C. Adkerson
, Vice
Chairman, and FCX President and Chief Executive Officer; and James C.
Flores, Vice Chairman, and FM O&G President and Chief Executive Officer,
said, “This transaction represents another important step in our ongoing
debt reduction plan and follows the completion of our $3.1 billion sale
of Eagle Ford shale assets in June. We remain committed to our
balance sheet objectives while focusing on our large portfolio of high
quality assets and resources, which provide strong current cash flows
and have attractive growth characteristics.”
Mr. Adkerson continued: “We congratulate our team on developing
Candelaria to be a highly successful mining operation and for
contributing to the Company’s success over many years. We are
pleased that Lundin Mining will continue to build on Candelaria’s past
success, and continue a commitment to provide a safe, productive work
environment and a sustainable future. We look forward to our
continued investments in Chile through opportunities for a major
expansion of the El Abra operation. We are positive about our
portfolio of copper assets, our large scale growth projects currently in
progress and opportunities for additional expansion and development
provided by our sizeable copper resource base.”
The interests include all of FCX’s interests in the Candelaria/Ojos
mining district. As of December 31, 2013, Candelaria/Ojos had
consolidated recoverable reserves totaling 4.0 billion pounds of copper
and 1.1 million ounces of gold. Consolidated production for the first
six months of 2014 totaled 169 million pounds of copper and 42 thousand
ounces of gold.
The transaction has an effective date of June 30, 2014, and is expected
to close by year-end 2014, subject to regulatory approvals and customary
closing conditions.
FCX expects to record an approximate $450 million after-tax gain on the
transaction.
FCX is a premier U.S.-based natural resources company with an
industry-leading global portfolio of mineral assets, significant oil and
gas resources and a growing production profile. FCX is the world’s
largest publicly traded copper producer.
FCX’s portfolio of assets includes the Grasberg minerals district in
Indonesia, one of the world’s largest copper and gold deposits;
significant mining operations in the Americas, including the large-scale
Morenci minerals district in North America and the Cerro Verde operation
in South America; the Tenke Fungurume minerals district in the
Democratic Republic of Congo; and significant oil and natural gas assets
in North America, including reserves in the Deepwater Gulf of Mexico
(GOM), onshore and offshore California and in the Haynesville natural
gas shale play, and an industry-leading position in the emerging shallow
water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf
of the GOM and onshore in South Louisiana. Additional information about
FCX is available on FCX’s website at “www.fcx.com.”
Cautionary Statement Regarding Forward-Looking Statements: This
press release contains forward-looking statements, which are all
statements other than statements of historical facts, such as
expectations relating to completion of the pending transaction. The
words “anticipates,” “may,” “can,” “plans,” “believes,” “potential,”
“estimates,” “expects,” “projects”, “targets,” “intends,” “likely,”
“will,” “should,” “to be,” and any similar expressions are intended to
identify those assertions as forward-looking statements. FCX cautions
readers that forward-looking statements are not guarantees of future
performance and its actual results may differ materially from those
anticipated, projected or assumed in the forward-looking statements.
Important factors that can cause FCX’s actual results to differ
materially from those anticipated in the forward-looking statements
include the ability of the parties to satisfy customary closing
conditions and consummate the proposed transaction and other factors
described in more detail under the heading “Risk Factors” in FCX’s
Annual Report on Form 10-K for the year ended December 31, 2013, filed
with the U.S. Securities and Exchange Commission (SEC) as updated by
FCX’s subsequent filings with the SEC.
Investors are cautioned that many of the assumptions on which FCX’s
forward-looking statements are based are likely to change after its
forward-looking statements are made, including for example commodity
prices, which FCX cannot control, and production volumes and costs, some
aspects of which FCX may or may not be able to control. Further, FCX may
make changes to its business plans that could or will affect its
results. FCX cautions investors that it does not intend to update
forward-looking statements more frequently than quarterly
notwithstanding any changes in FCX’s assumptions, changes in business
plans, actual experience or other changes, and FCX undertakes no
obligation to update any forward-looking statements.
Source: Freeport-McMoRan Inc.