Freeport-McMoRan 2009 Annual Report Download - page 42

Africa Mining
Tenke Fungurume. &RQVWUXFWLRQDFWLYLWLHVIRUWKHDSSUR[LPDWH
ELOOLRQLQLWLDOSURMHFWDUH FRPSOHWH &RSSHUSURGXFWLRQFRPPHQFHG
LQ0DUFKDQGDFKLHYHGWDUJHWHGFRSSHUSURGXFWLRQUDWHVLQ
6HSWHPEHU6WDUWXSDQGTXDOLW\LVVXHVFRQWLQXHWREH
DGGUHVVHGLQWKHFREDOWFLUFXLWDQGVXVWDLQHGWDUJHWHGSURGXFWLRQ
UDWHVDUHH[SHFWHGWREHUHDFKHGGXULQJ&XUUHQWRSHUDWLRQVDUH
GHVLJQHGWRSURGXFHDSSUR[LPDWHO\PLOOLRQSRXQGVRIFRSSHUDQG
PLOOLRQSRXQGVRIFREDOWSHU\HDU
7KHLQLWLDO7HQNH)XQJXUXPHSURMHFWZDVGHVLJQHGDQGFRQVWUXFWHG
LQDZRUOGFODVVIDVKLRQXVLQJPRGHUQWHFKQRORJ\DQGIROORZLQJ
LQWHUQDWLRQDOVWDQGDUGVIRUHQYLURQPHQWDOPDQDJHPHQWRFFXSDWLRQDO
VDIHW\DQGVRFLDOUHVSRQVLELOLW\7KHIDFLOLWLHVLQFOXGHLPSHUPHDEOH
OLQHGWDLOLQJVWRUDJHDQGZDVWHZDWHUWUHDWPHQWSRQGVDQGZHKDYH
PDGHVLJQLÀFDQWLQYHVWPHQWVLQLQIUDVWUXFWXUHLQWKHUHJLRQLQFOXGLQJ
DQDWLRQDOURDGDQGLPSURYHPHQWVLQSRZHUJHQHUDWLRQDQG
WUDQVPLVVLRQV\VWHPV2XUVRFLDOSURJUDPVLQFOXGHORFDOPLFUR
HQWHUSULVHEXVLQHVVHVDJULFXOWXUDOFDSDFLW\EXLOGLQJLQLWLDWLYHV
PDODULDDEDWHPHQWSRWDEOHGULQNLQJZDWHUZHOOVQHZPHGLFDO
IDFLOLWLHVDQGVHYHUDOQHZVFKRROV7KHSURMHFWZLOOFRQWLQXHWR SURYLGH
LPSRUWDQWEHQHÀWVWRWKH&RQJROHVHWKURXJKHPSOR\PHQWDQGWKH
SURYLVLRQRIORFDOVHUYLFHVDQGWRWKH'5&JRYHUQPHQWWKURXJK
VXEVWDQWLDOWD[UR\DOW\DQGGLYLGHQGSD\PHQWV
:HFRQWLQXHWRHQJDJHLQGULOOLQJDFWLYLWLHVH[SORUDWLRQDQDO\VHV
DQGPHWDOOXUJLFDOWHVWLQJWRHYDOXDWHWKHSRWHQWLDORIWKLVKLJKO\
SURVSHFWLYHGLVWULFW7KHVH DQDO\VHVDUHEHLQJLQFRUSRUDWHGLQIXWXUH
SODQVWRHYDOXDWHRSSRUWXQLWLHVIRUH[SDQVLRQ,QRXUUHFRYHUDEOH
SURYHQDQGSUREDEOHUHVHUYHHVWLPDWHVIRUZHZHUHVXFFHVVIXO
LQDGGLQJELOOLRQSRXQGVRIFRSSHUUHVHUYHVDQGELOOLRQ
SRXQGVRIFREDOWUHVHUYHV5HFRYHUDEOHSURYHQDQGSUREDEOH
UHVHUYHVDW'HFHPEHUDSSUR[LPDWHPLOOLRQPHWULFWRQV
RIRUHZLWKDYHUDJHJUDGHVRISHUFHQWIRUFRSSHUDQG
SHUFHQWIRUFREDOWZKLFKHTXDWHVWRUHFRYHUDEOHUHVHUYHVRI
ELOOLRQSRXQGVRIFRSSHUDQGELOOLRQSRXQGVRIFREDOW
:HFRPPHQFHGDIHDVLELOLW\VWXG\LQIRXUWKTXDUWHUWR
HYDOXDWHDVHFRQGSKDVHRIWKHSURMHFWZKLFKZRXOGLQFOXGH
RSWLPL]LQJWKHFXUUHQWSODQWDQGSRWHQWLDOO\LQFUHDVLQJFDSDFLW\E\
DSSUR[LPDWHO\SHUFHQW7KHIHDVLELOLW\VWXG\LVH[SHFWHGWREH
FRPSOHWHGE\PLG\HDU
CAPITAL RESOURCES AND LIQUIDITY
2XURSHUDWLQJFDVKÁRZVYDU\ZLWKSULFHVUHDOL]HGIURPFRSSHUJROG
DQGPRO\EGHQXPVDOHVRXUSURGXFWLRQOHYHOVSURGXFWLRQFRVWVFDVK
SD\PHQWVIRULQFRPHWD[HVDQGLQWHUHVWRWKHUZRUNLQJFDSLWDO
FKDQJHVDQGRWKHUIDFWRUV$VDUHVXOWRIZHDNHFRQRPLFFRQGLWLRQV
ZHUHYLVHGRXURSHUDWLQJSODQVDWWKHHQGRIDQGLQHDUO\
WRSURWHFWOLTXLGLW\ZKLOHSUHVHUYLQJRXUODUJHPLQHUDOUHVRXUFHVDQG
JURZWKRSWLRQVIRUWKHORQJHUWHUPUHIHUWR1RWHIRUIXUWKHU
GLVFXVVLRQ+RZHYHUVWURQJRSHUDWLQJSHUIRUPDQFHDQGULVLQJ
FRSSHUSULFHVKDYHHQDEOHGXVWRHQKDQFHRXUÀQDQFLDODQGOLTXLGLW\
SRVLWLRQGXULQJDOORZLQJXVWRPDQDJHYRODWLOHFRQGLWLRQV
HIIHFWLYHO\UHGXFHGHEWDQGUHLQVWDWHFDVKGLYLGHQGVWRVKDUHKROGHUV
ZKLOHPDLQWDLQLQJRXUIXWXUHJURZWKRSSRUWXQLWLHV,Q DGGLWLRQZH
KDYHDQQRXQFHGLQLWLDWLYHVWRUHVXPHFHUWDLQSURMHFWGHYHORSPHQW
DFWLYLWLHVWKDWZHUHGHIHUUHGLQODWHUHIHUWR´&XUUHQW
'HYHORSPHQW3URMHFWVµIRUIXUWKHUGLVFXVVLRQ:HYLHZWKHORQJWHUP
RXWORRNIRURXUEXVLQHVVSRVLWLYHO\VXSSRUWHGE\OLPLWDWLRQVRQ
VXSSOLHVRIFRSSHUDQGE\WKHUHTXLUHPHQWIRUFRSSHULQWKHZRUOGҋV
HFRQRP\DQGZLOOFRQWLQXHWRDGMXVWRXURSHUDWLQJVWUDWHJ\DVPDUNHW
FRQGLWLRQVFKDQJH
%DVHGRQFXUUHQWPLQHSODQVDQGVXEMHFWWRIXWXUHFRSSHUJROG
DQGPRO\EGHQXPSULFHVZHH[SHFWHVWLPDWHGRSHUDWLQJFDVK
ÁRZVWREHJUHDWHUWKDQRXUEXGJHWHGFDSLWDOH[SHQGLWXUHVH[SHFWHG
GHEWSD\PHQWVGLYLGHQGVQRQFRQWUROOLQJLQWHUHVWGLVWULEXWLRQVDQG
RWKHUFDVKUHTXLUHPHQWV
Cash and Cash Equivalents
$W'HFHPEHUZHKDGFRQVROLGDWHGFDVKDQGFDVK
HTXLYDOHQWVRIELOOLRQ7KHIROORZLQJWDEOHUHÁHFWVWKH86DQG
LQWHUQDWLRQDOFRPSRQHQWVRIFRQVROLGDWHGFDVKDQGFDVKHTXLYDOHQWV
DW'HFHPEHUDQGLQPLOOLRQV
   2009 
&DVKDWGRPHVWLFFRPSDQLHVD     $1,522  
&DVKDWLQWHUQDWLRQDORSHUDWLRQV     1,134 
 7RWDOFRQVROLGDWHGFDVKDQGFDVKHTXLYDOHQWV  2,656 
/HVV1RQFRQWUROOLQJLQWHUHVWVҋVKDUH    (300) 
&DVKQHWRIQRQFRQWUROOLQJLQWHUHVWVҋVKDUH   
2,356 
/HVV:LWKKROGLQJWD[HVDQGRWKHU     (171) 
1HWFDVKDYDLODEOHWR)&;     $2,185 
H 0UJS\KLZJHZOH[V\YWHYLU[JVTWHU`HUK5VY[O(TLYPJHVWLYH[PVUZ
Operating Activities
'XULQJZHJHQHUDWHGRSHUDWLQJFDVKÁRZVWRWDOLQJELOOLRQ
QHWRIPLOOLRQXVHGIRUZRUNLQJFDSLWDOUHTXLUHPHQWVZKLFK
LQFOXGHGDSSUR[LPDWHO\PLOOLRQUHODWHGWRVHWWOHPHQWRIÀQDO
SULFLQJZLWKFXVWRPHUVRQSURYLVLRQDOO\SULFHGFRSSHUVDOHV
2SHUDWLQJFDVKÁRZVLQWRWDOHGELOOLRQQHWRIPLOOLRQ
XVHGIRUZRUNLQJFDSLWDOUHTXLUHPHQWVZKLFKLQFOXGHGPLOOLRQ
WRVHWWOHWKHFRSSHUSULFHSURWHFWLRQSURJUDPFRQWUDFWDQG
RSHUDWLQJFDVKÁRZVLQWRWDOHGELOOLRQLQFOXGLQJELOOLRQ
IURPZRUNLQJFDSLWDOVRXUFHV
2SHUDWLQJFDVKÁRZVIRUZHUHKLJKHUWKDQLQSULPDULO\
EHFDXVHRIORZHURSHUDWLQJFRVWVDQGKLJKHUJROGSULFHVDQGVDOHV
YROXPHV2SHUDWLQJFDVKÁRZVIRUZHUHORZHUWKDQLQ
SULPDULO\EHFDXVHRIKLJKHURSHUDWLQJFRVWVDQGKLJKHUZRUNLQJ
FDSLWDOUHTXLUHPHQWV
&RQVROLGDWHGUHYHQXHVRSHUDWLQJFDVKÁRZVDQGQHWLQFRPH
YDU\VLJQLÀFDQWO\ZLWKÁXFWXDWLRQVLQWKHPDUNHWSULFHVRIFRSSHU
JROGDQGPRO\EGHQXPVDOHVYROXPHVDQGRWKHUIDFWRUV5HIHUWR
´2YHUYLHZDQG2XWORRNµIRUIXUWKHUGLVFXVVLRQRISURMHFWHG
RSHUDWLQJFDVKÁRZV
MANAGEMENT’S DISCUSSION AND ANALYSIS
40 -9,,769;4J4V9HU*677,9.63+05*
  (UU\HS9LWVY[