SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT
OF 1934
Date of Report (Date of earliest event reported) -
January 12, 1994
FREEPORT-MCMORAN COPPER & GOLD INC.
Delaware 1-9916 74-2480931
___________________ _________________ _______________
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
First Interstate Bank Building, One East First Street,
Suite 1600, Reno, Nevada 89509
Registrant's telephone number, including area code:
(702) 688-3000
Item 5. On January 12, 1994 Freeport-McMoRan Copper & Gold Inc., in the
Press Release identified as Exhibit 99.1 hereto, announced an increase in
proved and probable reserves and a fourth quarter update. The reserves
referred to in the Press Release have been verified by Independent Mining
Consultants, Inc., whose letter of consent is attached hereto as Exhibit
99.2.
Item 7. Exhibits
--------
See the Exhibit Index below.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
January 12, 1994
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ Michael C. Kilanowski, Jr.
------------------------------
Michael C. Kilanowski, Jr.
Assistant General Counsel
and Secretary
EXHIBIT INDEX
Exhibit Sequentially
No. Exhibit Name Numbered Page
- ------- ------------ -------------
99.1 Press Release dated January 12, 1994
99.2 Consent of Independent Mining Consultants, Inc.
(FREEPORT-McMORAN COPPER & GOLD LETTERHEAD)
FREEPORT-McMORAN COPPER & GOLD INC. ANNOUNCES
-- INCREASE IN PROVED AND PROBABLE RESERVES
-- FOURTH QUARTER UPDATE
NEW ORLEANS, LA., January 12, 1994 -- Freeport-McMoRan Copper &
Gold Inc. (NYSE:FCX), an affiliate of Freeport-McMoRan Inc. (NYSE:FTX),
announced today that, net of 1933 production, its proved and probable ore
reserves at December 31, 1993 have increased since December 31, 1992, by an
estimated 5.9 billion payable pounds of copper (a 28% increase), 7.0
million payable ounces of gold (a 22% increase), and 32.0 million payable
ounces of silver (a 72% increase), bringing the company's total proved and
probable reserves to 26.8 billion payable pounds of copper, 39.1 million
payable ounces of gold and 76.7 million payable ounces of silver. The
total year-end reserves reflect the addition of approximately 363.0 million
metric tons of ore at an average grade of 0.97 percent copper, 0.95 grams
per ton gold and 4.43 grams per ton silver bringing total proved and
probable ore reserves, net of 1993 production, to approximately 1,074.1
million metric tons at an average grade of 1.31 percent copper, 1.47 grams
per ton gold, and 4.04 grams per ton silver compared with approximately
733.2 million metric tons of ore reported at December 31, 1992. These new
reserves were added primarily at the Grasberg deposit, but also include
additions at the company's underground mine at the DOZ (Deep Ore Zone)
deposit and the recently discovered Big Gossan deposit.
FCX continues to refine its mining plan in connection with the
previously announced $140 million expansion of the milling complex from the
already underway 90,000 metric tons per day (MTPD) expansion to the 115,000
MTPD rate due to be completed by year-end 1995. The mine plan for the
Grasberg deposit has now been revised to widen the open pit by
approximately 200 meters and deepen the pit by approximately 100 meters, to
the 3,100 meter elevation, which allowed the company to add another
significant increment to its reserve base. At the 115,000 MTPD milling
rate, production in 1996 is expected to be approximately 1.1 billion pounds
of copper and 1.5 million ounces of gold. With the increased ore reserves
and at the expanded mill capacity of 115,000 MTPD, mine life is now
estimated to be approximately 25.5 years.
The Grasberg deposit's reserves increased by 348.8 million tons
bringing that mine's reserves, net of 1993 production, to 976.6 million
metric tons of ore at an average grade of 1.25 percent copper, 1.55 grams
per ton gold, and 3.45 grams per ton silver compared with 647.7 million
metric tons of ore at December 31, 1992. Approximately 132.9 million
metric tons and about one-half of the incremental Grasberg reserves in
pounds of copper and ounces of gold and silver are associated with the
approximate 100 meter increase in the depth of the pit. The company had
previously stated it believed at least 250 million metric tons of possible
mineral resources existed between the 3,200 meter and 2,900 meter
elevations and continues to believe that at least a 120 million metric ton
resource could exist between the 3,100 meter and 2,900 meter elevations.
The remaining additional Grasberg reserves are from ore in the previously
defined 3,200 meter open pit and now made economical by the increase in
mill capacity rate as announced in an October 13, 1993 press release. The
Grasberg mine continues to remain open at depth.
The DOZ deposit's reserves, part of the original Ertsberg mineral
complex, increased by 6.5 million tons bringing that mine's reserves to
29.4 million metric tons of ore at an average grade of 2.11 percent copper,
1.02 grams per ton gold, and 9.83 grams per ton silver compared with 22.9
million metric tons of ore at December 31, 1992. At year end 1993, the Big
Gossan deposit's reserves were 8.5 million metric tons of ore at an average
grade of 2.4 percent copper, 0.77 grams per ton gold, and 13.35 grams per
ton silver. The company, which is currently involved in active drilling
operations to define the Big Gossan deposit, believes that the ultimate
potential of the Big Gossan approximates 20-25 million metric tons with
significantly higher ore grades than reported herein.
Exploration activity continues within the Contract of Work area
where the Company now has 9 drilling rigs in operation. Further,
preliminary exploration survey work is underway in the new 2.5 million acre
exploration area.
FCX also announced that sales during the fourth quarter of 1993
are estimated to have been approximately 200 million payable pounds of
copper and more than 300,000 payable ounces of gold. The gold production
was above average because of the unusually high gold content of the ore
milled. Even though copper prices averaged significantly below $0.90 per
pound during the quarter, PT-FI, the operating unit of FCX, was able to
realize above-market prices because of the $0.90 per pound price protection
program. However, fourth quarter 1993 copper price realizations will be
below the $1.03 per pound level achieved in the comparable 1992 quarter.
The average price of gold during the fourth quarter of 1993 based on the
London P.M. fixing price was $373 per ounce, significantly exceeding the
average gold realization during the fourth quarter of 1992 of $337 per
payable ounce. FCX estimates that its fourth quarter 1993 net income will
be approximately $0.15 per share which includes estimated after-tax losses
of $9 million at Rio Tinto Minera, a subsidiary of FCX acquired in 1993,
whose principal asset is a copper smelter in Spain, compared with $0.17 per
share in the fourth quarter of 1992.
FCX is engaged in the exploration, mining, and milling of copper,
gold and silver, in Irian Jaya, Indonesia and the smelting and refining of
copper concentrates in Spain.
(Letterhead of Independent Mining Consultants, Inc.)
January 12, 1994
Freeport-McMoRan Copper & Gold Inc.
First Interstate Bank Building
One East First Street, Suite 1600
Reno, Nevada 89501
Dear Sirs:
We refer to the proposed Prospectus Supplement to the Prospectus
dated July 21, 1993 forming part of the Registration Statement on Form S-3
of Freeport-McMoRan Copper and Gold Inc. filed with the Securities and
Exchange Commission.
We consent to the references to our firm in such prospectus
supplement under the captions "Prospectus Summary", "The Company-Ore
Reserves" and "Experts". We also consent to the use of the summaries of
our report under the caption "The Company-Ore Reserves".
Sincerely,
/s/ Herbert E. Welhener
Herbert E. Welhener
Vice President
