Freeport-McMoRan 2003 Annual Report Download - page 77

2003 Annual Report FREEPORT-McMoRan COPPER & GOLD INC. 75
Indonesia does not anticipate the mining of all of its
reserves prior to the end of 2021 based on its
current mine plan, and there can be no assurance
that the Indonesian government will approve the
extensions. Prior to the end of 2021, under its
current mine plan PT Freeport Indonesia expects to
mine approximately 48 percent of aggregate proven
and probable ore, representing approximately 62
percent of its share of recoverable copper reserves
and approximately 72 percent of its share of recov-
erable gold reserves.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Average Ore Grade Proven and Probable
Per Metric Ton Recoverable Reserves
Year-End Ore Copper Gold Silver Copper Gold Silver
(Thousand (Billions (Millions (Millions
Metric Tons) (%) (Grams) (Ounces) (Grams) (Ounces) of Lbs.) of Ozs.) of Ozs.)
1999 2,395,175 1.13 1.05 .034 3.85 .124 49.9 61.6 148.8
2000 2,514,532 1.10 1.04 .033 3.40 .109 50.9 63.7 139.6
2001 2,583,883 1.13 1.05 .034 3.72 .120 52.5 64.5 151.6
2002 2,584,465 1.12 1.02 .033 3.73 .120 53.3 62.6 147.6
2003 2,695,883 1.08 0.98 .032 3.72 .120 54.4 60.4 159.4
By Ore Body at December 31, 2003:
Developed and producing:
Grasberg open pit
750,753 1.06 1.25 .040 2.46 .079 14.7 25.4 30.1
Deep Ore Zone 170,132 0.93 0.63 .020 4.96 .159 2.9 2.6 13.3
Undeveloped:
Grasberg block cave
874,354 1.04 0.81 .026 2.90 .093 17.2 16.0 46.4
Kucing Liar 498,999 1.31 1.18 .038 5.63 .181 12.4 9.3 38.8
Mill Level Zone 176,374 0.88 0.74 .024 4.01 .129 2.9 3.1 11.1
Ertsberg Stockwork
Zone 121,714 0.49 0.90 .029 1.65 .053 1.1 2.7 3.2
Big Gossan 32,906 2.81 1.00 .032 16.85 .542 1.7 0.8 8.7
Dom block cave 43,651 1.10 0.31 .010 5.94 .191 0.8 0.3 4.0
Dom open pit 27,000 1.80 0.43 .014 9.60 .309 0.7 0.2 3.8
Total 2,695,883 1.08 0.98 .032 3.72 .120 54.4 60.4 159.4
PT Freeport Indonesia’s share 39.7 46.6 116.8
FCX’s equity share
a
36.0 42.2 105.9
a. Reflects FCX’s 90.6 percent ownership interest (see Note 2).
Estimated recoverable reserves were assessed using
a copper price of $0.85 per pound, a gold price of
$270 per ounce and a silver price of $5.00 per ounce.
With respect to the proven and probable reserves pre-
sented above, if metal prices were adjusted to the
approximate average London spot prices for the past
three years, i.e., copper prices adjusted from $0.85
per pound to $0.74 per pound and gold prices
adjusted from $270 per ounce to $315 per ounce,
there would be no change in proven and probable
reserves.
Incremental cash flow attributable to the fourth
concentrator mill expansion is shared 60 percent by
PT Freeport Indonesia and 40 percent by Rio Tinto
(Note 2). Incremental cash flow consists of amounts
generated from production in excess of specified
annual amounts based on the December 31, 1994,
reserves and mine plan. The incremental revenues
from production from the expansion and total rev-
enues from production from Block A, including pro-
duction from PT Freeport Indonesia’s previously
existing operations, share proportionately in
operating, nonexpansion capital and administrative
costs. PT Freeport Indonesia receives 100 percent of
cash flow from its existing pre-expansion production
facilities as specified by the contractual arrange-
ments. PT Freeport Indonesia’s estimated net share
of recoverable reserves and FCX’s equity interest in
those reserves follow: