Center Valley, Pennsylvania 26/07/2016 - Freeport-McMoRan's second-quarter consolidated copper sales totalled 1.1 billion pounds (500,000 tonnes), which was around five percent below the miner's April estimate because of lower sales from Indonesia, it said on Tuesday.
Still, copper sales were better than the 964 million pounds it sold in the second quarter of 2015, primarily reflecting higher volumes from Cerro Verde in Peru. Also, the company expects a strong fourth quarter in Indonesia because operations there will move into a higher-grade area.
Gold sales in the second quarter at 156,000 ounces were lower than the April estimate of 195,000 ounces due to lower mining rates in Indonesia and were lower than year-ago sales of 352,000 ounces, primarily reflecting lower ore grades and mining rates.
Molybdenum sales of 19 million pounds were close to the April 2016 estimate but were lower than second-quarter 2015 sales of 23 million pounds, primarily reflecting price-related curtailments.
For the full year, the company expects to sell five billion pounds of copper, 1.7 million ounces of gold and 76 million pounds of molybdenum including 1.3 billion pounds of copper, 410,000 ounces of gold and 20 million pounds of molybdenum in the third quarter.
INDONESIA SALES
Freeport owns a 90.64-percent share of one of the world's largest copper and gold deposits at the Grasberg minerals district in Papua, Indonesia.
Indonesia's consolidated copper sales were 196 million pounds in the second quarter, which was unchanged from a year ago. Higher copper ore grades were offset by lower mining and milling rates.
Gold sales of 151,000 ounces were lower than second-quarter 2015 sales of 346,000 ounces, primarily reflecting lower gold ore grades and milling rates.
During the second quarter, the company completed repairs to its large-scale concentrating facility, which required 23 days of downtime to fix one of the milling circuits, the report said.
"[We expect] ore grades to improve significantly, with approximately 40 percent of its 2016 copper sales and 55 percent of its 2016 gold sales anticipated in fourth-quarter 2016," the company said.
It expects full-year sales of around 1.3 billion pounds of copper and 1.7 million ounces of gold compared with 744 million pounds of copper and 1.2 million ounces of gold in 2015.
AMERICAS SALES
North America's consolidated copper sales were 464 million pounds in the quarter, which was lower than 486 million pounds in the second quarter of 2015 primarily because of the timing of sales in the 2015 period.
The company operates seven open-pit copper mines in North America - Morenci, Bagdad, Safford, Sierrita and Miami in Arizona and Chino and Tyrone in New Mexico. Last year, Freeport said it would suspend mining operations at Miami and Sierrita while reducing output at Tyrone by 50 percent.
North America copper sales will be around 1.8 billion pounds for the full year, it estimated, down from 2.0 billion pounds in 2015.
South American copper sales volumes of 327 million pounds were much higher than 178 million pounds in the year-ago quarter, primarily reflecting Cerro Verde's expanded operations.
The company operates two copper mines in South America - Cerro Verde in Peru, in which Freeport holds a 53.56-percent interest, and El Abra in Chile, in which it has 51 percent.
It sees copper sales from South America mining at around 1.36 billion pounds for 2016, up from 871 million pounds in 2015.
FINANCIAL PERFORMANCE
Freeport's net loss totalled $479 million or 38 cents per share for the second quarter of 2016. Still, this is much better than the loss of $4.18 billion it recorded for the first quarter. Revenue for the quarter at $3.33 billion missed the consensus estimate of $3.7 billion.
Average realized prices for the second quarter were $2.18 per pound of copper, $1,292 per ounce for gold and $41.10 per barrel for oil.
(Editing by Mark Shaw)