Freeport (FCX) Q1 2026 Earnings Transcript

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DATE

Thursday, April 23, 2026 at 10 a.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Richard Carl Adkerson
• President and Chief Financial Officer — Kathleen Lynne Quirk
• Senior Vice President and Chief Sustainability Officer — Maree E. Robertson
• Senior Vice President, Indonesian Operations — Mark Jerome Johnson
• Senior Vice President, Technology and Projects — Corey Stevens

TAKEAWAYS

• U.S. operating income -- U.S. mining operations delivered 2.5 times more operating income in the first quarter compared with the same period last year, primarily due to higher conversion to the bottom line.
• Grasberg ramp-up status -- Grasberg Block Cave production recommenced in production blocks 2 and 3 following completion of required remediation. Material handling bottlenecks are limiting full ramp-up until specialized chute equipment—“spillminators”—is installed, with most constraints expected to be addressed by mid-2027.
• Grasberg five-year output revision -- Revised forecasts reflect an approximate 9% reduction in copper and 7% reduction in gold from the Grasberg District over five years, with the largest impacts in 2026 and 2027. Management emphasized these are timing, not recovery, issues.
• Wet material draw points -- The proportion of wet draw points in Grasberg production blocks 2 and 3 increased from 30% in September 2025 to 45% currently, directly causing production derating until chute modifications are completed.
• Insurance proceeds -- Freeport-McMoRan (NYSE:FCX) reached an agreement for a $700 million insurance recovery, the maximum under the policy, with cash expected in the second quarter.
• Dividend and share repurchase -- Approximately $300 million was returned to shareholders in the first quarter through dividends and 1.7 million shares repurchased.
• Copper market dynamics -- Management reported copper prices averaged over $5.80 per pound year-to-date and peaked above $6 per pound, citing strong demand from U.S. data centers and significant power grid investment in China.
• Leach initiative expansion -- Initiatives are underway to scale the innovative leach project, with a target ramp to 300-400 million pounds per year by 2026-2027 and a path toward 800 million pounds as early as 2030 through additive and heat technology.
• Cost pressures identified -- Diesel price volatility since February’s Iran conflict has resulted in an approximate $500 million annualized increase in costs, primarily affecting Indonesian operations.
• Revised net unit cash costs -- Management now expects net unit cash costs to average $1.95 per pound of copper for the year, up from the prior $1.75 estimate, mainly due to lower Grasberg volumes and higher input costs.
• Capital expenditures outlook -- Capital expenditures are forecast at $4.3 billion in 2026 and $4.5 billion in 2027, with $1.6 billion-$1.7 billion per year discretionary, about 50% of which is related to the Kucing Liar and LNG projects at Grasberg.
• Indonesia operating rights extension -- A memorandum of understanding signed with the Indonesian government in February secures operating rights beyond 2041, affirming continuity of Grasberg operations.
• El Abra expansion filing -- Environmental impact statement for a large-scale expansion at El Abra in Chile was submitted in March, positioning the asset for significant future contribution.
• EBITDA and cash flow sensitivity -- Each $0.10 per pound change in copper price affects annual EBITDA by $400 million in 2027-2028, and each $100 per ounce change in gold price moves EBITDA by $110 million.

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RISKS

• Management cited the risk that there could be delays in obtaining materials or construction delays in installing the new chute equipment at Grasberg, potentially extending ramp-up timelines.
• Elevated diesel prices are causing an estimated $500 million increase in annual costs, with uncertainty regarding duration and regional impact, especially in Indonesia.
• Net unit cash costs outlook increased from $1.75 to $1.95 per pound due to higher consumable prices and lower Grasberg output, indicating margin pressure.

SUMMARY

Freeport-McMoRan (NYSE:FCX) detailed a substantial near-term reduction in expected copper and gold output from Grasberg, directly impacting projected revenues and driving an increase in cash cost guidance for the year. Management highlighted a surge in operating income from U.S. mines, partially offsetting Indonesian shortfalls, and confirmed that insurance proceeds will partially mitigate Grasberg-related impacts. Advances in large-scale leaching initiatives and the El Abra expansion present medium- and long-term growth options, contingent on successful technology deployment and regulatory progress. The finalization of the Indonesian operating extension, ongoing capital investments, and sensitivity to input costs and copper pricing collectively frame the investment outlook.

• Management stated, "The main thing that we are doing to resolve the issue is to install these regulators into the chute galleries," emphasizing the primacy of this solution to the Grasberg material handling constraint.
• Maree E. Robertson said, "The sharp rise in diesel prices in March equates to an approximate $500 million cost increase on an annualized basis," directly articulating the scale of inflationary headwinds.
• Management attributed the increase in wet draw points to operational suspension, with Mark Jerome Johnson explaining, "As we muck, the porosity of the material above will improve," highlighting uncertainty and possible upside in the production ramp-up trajectory.
• Core additive and heated leach pilots are underway, and management identified a supply chain for the first-generation additive, with advancement of proprietary chemistries key to reaching 800 million pounds per year from the initiative.
• Company policy prioritizes funding growth discretionary spending from 50% of available nondistributed cash and continues a disciplined capital allocation framework, supported by investment-grade credit metrics.

INDUSTRY GLOSSARY

• Grasberg Block Cave (GBC): A major underground mining area at the Grasberg minerals district, employing block caving and remote mining methods to extract copper- and gold-bearing ore.
• Spillminator: Specialized chute equipment being deployed to regulate wet ore flow at Grasberg, intended to restore and optimize production rates by mitigating material handling bottlenecks.
• Heap leach initiative: Freeport-McMoRan's process and technology program aimed at extracting higher copper volumes from existing stockpiles via chemical additives and enhanced heat application.
• Discretionary capital expenditures: Capital spent on projects beyond sustaining requirements, typically directed toward growth, innovation, or major expansions above base maintenance levels.

Full Conference Call Transcript

Richard will make some opening remarks; Kathleen will review our slide materials as well as Maree; and then we will open up the call for questions. Richard?

Richard Carl Adkerson: Thank you, David, and welcome, everyone. We are now in the twentieth year since Freeport-McMoRan Inc. combined with Phelps Dodge to create the modern Freeport-McMoRan Inc. by forming a global leader in copper. Our strategy was set after I became CEO in 2003, just as China emerged as the dominant source of copper demand. Our decision to build our company around copper was a good decision then and has only gotten better over time. We were in Chile last week for the annual Global Copper Conference, which I first attended in 2004, and learned that the then expected supply response to China's demand would be more muted than expected.

This year, there was a strong positive consensus by attendees about copper’s future. We are now in a new era of growth for copper, which is broad-based and driven by the growing demand for electricity. Simply, electricity equals copper. Our assets at Freeport-McMoRan Inc. are long-lived and have embedded major growth options, which we are advancing for the future. We have exciting growth ahead in the Americas, with significant opportunities to improve profitability using modern technology. Grasberg will continue as a major long-term contributor to our growth and profitability with its high grades of copper and gold.

The extension of our rights to operate beyond 2041 pursuant to our recently signed MOU with the government of Indonesia is positive for continuity of these benefits from this remarkable world-class district. We just celebrated our fifty-ninth year of successfully operating in Indonesia. I have personally been engaged since 1988. Our team there is best in class in large-scale block cave mining. Kathleen will review with you our operating results and outlook, including our plan to restore full production at Grasberg. I have complete confidence in our teams addressing current challenges. I am personally proud of Freeport-McMoRan Inc.’s global team and how our company is so well positioned for the future. Kathleen?

Kathleen Lynne Quirk: Great. Thank you, Richard, and thank you all for participating on our call today. We will review our first quarter performance and update you on our initiatives, projects, and outlook for the future. It is an active time for our teams across our global business as we work to restore large-scale production at Grasberg, safely and sustainably drive value through operational excellence and new technology initiatives in the U.S., and prepare for a new and exciting phase of organic growth. Starting on Slide 3, we provide the highlights of our first quarter.

Our sales of copper, gold, and unit costs were better than our forecast, and the favorable metal price backdrop allowed us to generate growth in revenues, EBITDA, and cash flow compared with last year's first quarter despite our Indonesia operations operating at reduced capacity. The strength and diversity of our portfolio comes through in the results, with our U.S. mining operations contributing 2.5 times more operating income in the first quarter of this year compared with last year's first quarter, with strong conversion to the bottom line. We were successful in completing the required remediation at Grasberg to commence our phased ramp-up, initially in production blocks 2 and 3 in the Grasberg Block Cave.

This was an important milestone and involved impressive efforts by our team. I will cover in more detail the challenges encountered with material handling bottlenecks in the initial ramp-up, how we are addressing the issues, and the impacts on our ramp-up forecast. As Richard mentioned, a notable highlight of the quarter was the memorandum of understanding reached in February with the government of Indonesia to extend our operating rights for the life of the resource. This is an important long-term value driver for Freeport-McMoRan Inc., the government, and the many stakeholders who benefit from our longstanding operations in Indonesia.

We are advancing our future growth plans and submitted an environmental impact statement in March for a major expansion project in Chile. We are progressing several initiatives to scale our innovative leach project and completing our work to be in a position to potentially greenlight our brownfield expansion project at our Bagdad mine in Arizona later this year. We returned approximately $300 million to shareholders in the first quarter, including common stock dividends and the purchase of 1.7 million shares of our common stock. Our balance sheet is solid, and we are in a strong position to invest in our future growth while returning cash to shareholders. Moving to Slide 4, we summarize our priorities for 2026.

These are the same priorities we set at the start of the year, and each of these represents areas of meaningful value creation. Strong execution of our plans, including achievement of a successful ramp-up at Grasberg, crystallizing the value of our leach opportunity, adopting new technologies to improve performance, and investing in profitable growth will enable us to build significant value in our business. We know we will face challenges along the way, as evidenced by the current situation at Grasberg, but I am confident our highly experienced team will address and successfully overcome any challenge with urgency and determination.

Turning to the markets on Slide 5, as a leading global supplier of copper, Freeport-McMoRan Inc. benefits from copper's increasingly important and critical role in the global economy. As we look forward, we see rising copper demand associated with massive requirements for the power grid to support new technologies. Copper's superior conductivity makes it the metal when it comes to electrification, and the world is becoming much more electrified. Copper prices have averaged over $5.80 per pound year to date and reached an all-time high exceeding $6 per pound in the first quarter. Demand signals remain strong.

Our customers in the U.S. continue to report rising demand associated with AI data centers and related energy infrastructure, which is more than offsetting weakness in private construction and in the auto sector. Recent reports from China reflect a significant resurgence of demand with significant power grid spending and significant draws on Chinese exchange inventories in recent weeks. As we step back and assess the fundamentals, we expect the market will require additional copper supplies to meet growing demand.

At Freeport-McMoRan Inc., we have a valuable, geographically diverse portfolio of copper assets and are strategically well situated for the long term with large-scale production facilities, long-life reserves and resources, and a portfolio of low-risk brownfield expansion opportunities to serve a growing market. Turning to operations on Slide 6, we summarize the operating highlights by geographic region. Looking at the U.S., production was above the year-ago quarter but a bit lower sequentially compared with 2025 and our expectations. Our operating teams continue to focus on operating disciplines, improving unplanned downtime, and achieving sustained maximum output from our existing assets.

We are encouraged by the recent improvement in our mining rate, particularly at Morenci, where we achieved a 19% increase in rates compared with last year's first quarter. Sustaining the higher mining rates will translate into higher copper production over time, and we expect copper production to grow over the course of the year. Our innovative leach initiative continues to show real promise. We are deploying our first internally developed additive and have a line of sight to a new additive which shows significant promise in lab tests. We have commenced a pilot test at Morenci to increase the temperature of our stockpiles by applying heated leaching solution to the stockpile.

We know that higher temperatures will enhance recoveries, and our work is focused on finding the most effective engineering and cost solution to achieve this. We remain encouraged with the ability to scale to 300 million to 400 million pounds per annum in the 2026–2027 time frame, which will unlock our path to 800 million pounds per annum from this initiative. We continue to lean heavily into incorporating innovation into our basic mining practices and see great potential for the tools that AI and other tools will offer to enhance operating performance. In South America, the Cerro Verde team did an excellent job navigating the first quarter with severe flooding in the Arequipa region and with challenges with inefficiencies.

We continue to expect stable production levels at Cerro Verde, and some growth at El Abra, a project in Chile in partnership with Codelco, over the next couple of years. There is a lot of activity going on at El Abra currently, with a leach pad extension and plans to conduct testing in late 2026 of heated stockpile injections to enhance leach recoveries. As I mentioned, we filed our environmental impact statement for a major expansion at El Abra in March. This project will transform El Abra from a relatively small producer to a large-scale contributor within the Freeport-McMoRan Inc. portfolio.

I will summarize the highlights on the Grasberg restart and provide more detail on our progress in the slides ahead. We reached agreement with our insurance providers during the quarter for a $700 million insurance recovery, which was the maximum limit under the policy. We expect to collect the proceeds during the second quarter. In Indonesia, we continue to operate one of our two smelters with available concentrate, and the new smelter remains on standby status with an expected restart later this year. On the next several slides, we will take you through the Grasberg update, what we have accomplished to date, and where we are moving forward as we go through 2026.

There is a summary on Slide 7 of the current status of the Grasberg Block Cave. Over the last several months, we successfully completed the activities required to restart mining in production blocks 2 and 3, and we commenced mining on a limited basis in March. As a refresher, production blocks 2 and 3 were not directly associated with the external mud rush which occurred in production block 1C, which is located closer to the surface and beneath the low spot in the former open pit. The location and characteristics of production blocks 2 and 3 do not have the same exposure to an external mud rush as we had in production block 1C.

However, production in production blocks 2 and 3 was temporarily suspended since September 2025 to install concrete plugs to isolate production block 1C panels and ensure no connection to the surface, complete cleanup of material on the extraction and service levels, restore infrastructure on the service level, and strengthen our cave management plans. This was a huge undertaking, and the team did a great job executing this plan.

After we completed the projects and regained access to the area, we conducted inspections and sampling of the more than 600 draw points in production blocks 2 and 3 and determined that the material characteristics within the cave changed significantly over the period of inactivity, with a larger proportion of wet ore within the cave compared to when we suspended operations in September 2025. This increase in wet material is associated with surface water which percolates through the cave rock within the mine and is removed from the mine through gravity drainage. Under normal conditions, active mining assists in managing the accumulated water within the cave. We have significant experience in mining wet material.

Our systems to extract the ore from the draw points utilize fully autonomous remote LHD loaders that are capable of safely handling the wet material. The challenge we are currently addressing is downstream of the extraction level and relates to the material handling systems for loading ore onto our automated trains. Historically, we had a higher ratio of dry material which allowed us to manage the wet material by blending to a consistency suitable for loading through chutes onto the train. With the current conditions, we need to install specialized equipment on the chutes to regulate the flow of ore for train loading.

We have been testing this equipment over the past few years in connection with our long-range planning in anticipation of potential changes in ore conditions over time. We understand the engineered solution to this issue, but it will take time to make the modifications, which limits production in PB2 and PB3 to what our existing chute designs can handle. We expect that the majority of these bottlenecks can be addressed by mid-2027.

In parallel with addressing the chute infrastructure in PB2 and PB3, we are also continuing to work to prepare for a future startup of production block 1 South and advancing a series of de-risking initiatives on surface drainage and other risk mitigation strategies, including the recent installation of new imaging technology to enhance cave monitoring. Our current forecast reflects our best estimate of the time frame to address the current bottleneck. It is still very early in our initial ramp-up, and a number of factors could affect rates positively or negatively as we go through the coming months.

This is a timing issue with a designed, engineered solution, not a significant cost issue, and not a change in the ultimate recovery of the resource. We are confident in the ability to restore large-scale production safely and efficiently as we go forward. On Slide 8, we provide an update of our current status versus what we presented in January. The initial restart commenced slightly ahead of our schedule.

We were previously targeting production rates in PB2 and PB3 to ramp up to 100 thousand tons per day and 60 thousand tons per day, respectively, from production blocks 2 and 3 in 2026, increasing to the 90 thousand tons per day range by mid-2027 as modifications to ore loading infrastructure are completed over the next several months. There is additional information in the reference materials on page 39 that provides details on the ramp-up. On Slide 9, we illustrate the draw point comparison of the current draw points compared to September 2025.

This is a plan view of the GBC extraction level with draw points in PB2 and PB3 color coded to show the number of wet and dry draw points prior to suspending mining in September 2025 compared to what we are currently seeing today. As shown, in September 2025, 30% of the total 635 active draw points were wet compared with 45% currently, a 50% increase in the wet draw points. For blending purposes, we require a minimum of a one-to-one ratio of dry to wet material measured within each panel to meet the requirements of our existing chute design.

Currently, there are 10 panels out of a total of 23, compared to only one in September, which do not meet the one-to-one dry-to-wet ratio criteria, resulting in a derating of production until the chute modifications are in service. We are continuing to monitor the draw points to determine potential changes and the possibility that conditions could become drier as mining rates continue. However, we believe proceeding with these modifications will provide more robust material handling systems and enhance flexibility as we go forward over the long term. On Slide 10, we show a diagram to illustrate the mine layout and the planned modifications downstream of the extraction level.

As illustrated, mining occurs on the extraction level, and that is not where the issue is. The issue is with the ore sent to the haulage level through our ore and chute passes. The bottleneck we are addressing relates to the chutes that are used to load the automated train at the haulage level. We show photos of the current chute design and the replacement equipment to regulate the flow of wet material into the railcars. This is a robust solution. There is additional information on Slide 37 in the reference materials to show you the design of these regulators. Summing this up, we provide on Slide 11 a report of PTFI’s revised five-year production forecast.

We have incorporated adjustments to our ramp-up schedule, and over the five years, the revision for the Grasberg District reflects an approximate 9% reduction for copper and 7% for gold, with the largest impacts in 2026 and 2027. Again, this material is not lost and is expected to be recovered over time. As I mentioned, we are in the early stages of the ramp-up. There are a number of factors which provide upside to these estimates, as well as a number of risks. Again, this is not a resource recovery issue or a significant cost issue to resolve. It is a timing issue, and we will work to optimize the plans as we go forward.

Our team is highly experienced, and we are confident in our ability to successfully address the current bottlenecks and restore large-scale production safely and efficiently. Moving to our growth, which is a very exciting feature of Freeport-McMoRan Inc., as I mentioned, looking at the fundamental outlook for copper, it is very clear additional copper supplies are required to support energy infrastructure, new technologies, and more advanced societies. At Freeport-McMoRan Inc., we benefit from a portfolio of organic growth opportunities which can be developed from our known resources in jurisdictions where we have established history and experience. Our projects in Indonesia also have the benefit of high gold content that comes with copper.

Because our projects are brownfield in nature, we benefit from leveraging existing infrastructure, economies of scale, experienced workforces, and relationships with key stakeholders to move more quickly and with less risk than a greenfield project. We are entering a period of growth in our Americas business, with near- and medium-term opportunities to scale our leach initiative and double production at our Bagdad mine in Arizona. We have longer-term growth in the Safford/Lone Star District and an exciting project at El Abra in Chile. We are using innovative approaches with our projects to improve efficiencies, reduce costs, reduce capital intensity, and shorten the lead times for our projects.

The high-potential, low-cost, innovative leach initiative is a great example of this and is likely one of the highest NPV opportunities across the industry. We have projects in the 2026 pipeline to test injection of heated solutions into our stockpiles which, together with additives, have potential for significant recovery gains. This year, particularly in the second half, will be an important year as we get results from our heat trials, advance our additive deployment, and work to scale next year to 400 million pounds per annum from this initiative and to define our path to 800 million pounds by as soon as 2030. The expansion opportunity at Bagdad is moving toward an investment decision.

We are advancing engineering, retesting our capital cost estimates and economic evaluations, and working with our vendors to secure pricing on major components. We are continuing to advance our work on tailings infrastructure there to further enhance optionality on the timing of the project. As a reminder, there are no permitting hurdles, and we have done a significant amount of planning and early works so that we can complete the project within a three- to four-year time frame. Studies are continuing in the Safford/Lone Star District to evaluate the optimal expansion and development options, and we continue to work to capitalize on the large undeveloped resource we have at Safford/Lone Star, an established U.S. mining district.

At El Abra, we have a great opportunity with our partner Codelco to develop a large-scale expansion. This is a significant resource with total copper reserves at El Abra approaching the size of the large position we have at Cerro Verde. As Richard mentioned, we were in Chile last week, and the project is being received very positively by our stakeholders. The Chilean government is enthusiastic about the project and is working with us to achieve a timely review of the application. We are also continuing to progress the Kucing Liar project in Indonesia to sustain a low-cost long-term production profile in this prolific district.

On Slide 13, to wrap up my comments and then Maree will cover the financials, a significant portion of our reserves, resources, and future growth are in the United States. Freeport-McMoRan Inc. is an important American copper producer and is by far the largest contributor to the U.S. copper market, with an established and successful franchise dating back to the late 1800s. We call ourselves America's copper champion, and we are aggressively pursuing a series of initiatives to enhance our U.S. business through innovation, automation, and investment in expanded facilities. These initiatives are designed to add production at a low incremental cost and improve profitability and resiliency of our valuable U.S. business.

In an industry where development lead times can span more than a decade, our U.S. business is strongly positioned with the potential for a 60% increase in copper production over the next several years. Our team is excited about these opportunities, and they represent a significant value driver for all of Freeport-McMoRan Inc. As I mentioned, we are working to improve our cost position in the U.S., and we have our sights on targeted improvements as we go into 2027 and beyond. While we are currently facing some new challenges with rising energy costs and other consumables, the work we are doing within our control will make our U.S. business more resilient, more profitable, and meaningfully more valuable.

I will turn the call over to Maree, who will review our outlook, and then we will take your questions. Thanks.

Maree E. Robertson: Thanks, Kathleen. On Slide 14, we show our three-year outlook for sales volumes of copper, gold, and molybdenum. The outlook incorporates the adjusted ramp-up schedule for Grasberg that Kathleen reviewed earlier, which is the primary change from our prior estimates. As discussed earlier, these changes are timing in nature and will be recovered in the future. We expect growing volumes in 2027 and 2028 as we reach full recovery at Grasberg. We provide quarterly estimates on page 27 of the reference materials. As ramp-up progresses, our second half volumes are expected to be approximately 30% higher for copper and approximately 50% higher for gold compared with the first half, driving earnings and cash flow in the balance of the year.

On Slide 15, we highlight renewed cost pressures we are experiencing since the onset of the conflict with Iran in late February. The price of diesel fuel, which we use to support our haul trucks in the Americas and for a portion of our power plant in Indonesia, has been volatile, with the most significant impacts in Indonesia. To date, it has been more of a cost issue than a sourcing issue. We continue to monitor the situation carefully. For reference, the sharp rise in diesel prices in March equates to an approximate $500 million cost increase on an annualized basis. We are also monitoring the sulfuric acid situation, where prices more than doubled on the spot market.

We do not have significant exposure to the spot market, and we are further insulated to sulfuric acid market volatility through our natural hedge from our smelters. We have incorporated recent diesel prices in our updated forecast and have also incorporated updated assumptions for higher gold and molybdenum prices. With these updates and the revised production profile, our current outlook for net unit cash costs is expected to average $1.95 per pound of copper for the year, compared with the prior estimate of $1.75 per pound. The primary driver of the change reflects the lower contribution of Grasberg volumes.

Putting together our projected volumes and cost estimates, we show modeled results on Slide 16 for EBITDA and cash flow at various copper prices ranging from $5 to $7 per pound. While we do not project prices, we modified the range to show sensitivities with upside and downside to the current prices. These are modeled results using the average of 2027 and 2028 with current volume and cost estimates and holding gold flat at $4,500 per ounce and molybdenum flat at $25 per pound.

Annual EBITDA would range from approximately $14 billion per annum at $5 copper to $21 billion at $7 copper, with operating cash flows ranging from approximately $10 billion per year at $5 to $16 billion at $7 copper. We show sensitivities to various commodities on the right. You will note we are highly leveraged to copper prices, with each $0.10 per pound change equating to approximately $400 million in annual EBITDA in the 2027–2028 period. We will also benefit from improving gold prices, with each $100 per ounce change in price approximating $110 million in annual EBITDA.

With our long-lived reserves and large-scale production, we are well positioned to generate substantial cash flow to fund future organic growth and cash returns under our performance-based payout framework. Slide 17 shows our current forecast for capital expenditures in 2026 and 2027. Capital expenditures are similar to our prior estimates and are expected to approximate $4.3 billion in 2026 and $4.5 billion in 2027. The discretionary projects are expected to approximate $1.6 billion to $1.7 billion per year in 2026 and 2027, with roughly 50% related to the Kucing Liar development and the LNG project at Grasberg.

The balance includes acceleration of tailings and other infrastructure to support Bagdad expansion, the Atlantic Copper Circular Project, which is expected to be completed during 2026, and capitalized interest. The discretionary category reflects the capital investments we are making in new projects that, under our financial policy, are funded with 50% of available cash that is not distributed. These projects are value-enhancing initiatives and are detailed on Slide 37 in our reference materials. We continue to carefully manage capital expenditures and will continue to deploy capital strategically to projects with the best return and risk-reward profile.

Finally, on Slide 18, we reiterate the financial policy priorities centered on a strong balance sheet, cash returns to shareholders, and investments in value-enhancing growth projects. Our balance sheet is solid with investment-grade ratings, strong credit metrics, and flexibility within our debt targets to execute on our projects. We have no significant debt maturities during 2026, and have substantial flexibility for funding the 2027 maturities. Since adopting our financial policy in 2021, we have distributed $6 billion to shareholders through dividends and share purchases, and have an attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders.

Our global team is focused on driving value in our business, committed to strong execution of our plans, providing cash to invest in profitable growth, and returning cash to shareholders. Thank you for your attention. We will now open the call for questions.

Operator: We will now open the call for questions. If you wish to ask a question, press 1 on your touch tone phone. If your question has been answered or you wish to remove yourself from the queue, please press 1 again. If you are using a speakerphone, please pick up your handset before pressing the numbers. We ask that you please limit your questions to one. If you have additional questions, please return to the queue. One moment please for our first question. Our first question will come from the line of Carlos De Alba with Morgan Stanley. Please go ahead.

Carlos De Alba: Thank you very much. Good morning, everyone. I wanted to explore the level of confidence that you have on the new guidance for Grasberg. Obviously a surprise on the delays and revisions, but as you move forward, are there any specific points or areas where you think there might be a higher risk for potential reductions to production or the ramp-up that we should be aware of? If you could, maybe, Kathleen, highlight what those would be, that would be great. Thank you.

Kathleen Lynne Quirk: Thank you, Carlos. The main thing that we are doing to resolve the issue is to install these regulators into the chute galleries. Right now, we have the capacity to mine the material, but we are limited because of the need to have a certain type of consistency to go through the chutes. When we think about the risks to the ramp-up at this point, it is really a construction schedule, a delivery schedule from our vendor, who we are already working with. Some of the equipment is already on site.

It will be installed on a phased basis, and we have, over the coming months, additional equipment that will be coming to us so that we can install these—we call them “spillminators”—onto the chutes. So really, it is a situation where the bottlenecks will be addressed by the installation of this equipment, and we have equipment on site now, we have equipment on order, and it is a matter of meeting that execution timetable. I want to go back to this team and what this team accomplishes in terms of the ability to construct things at Grasberg. This is not a lot different than a lot of the things that the team has done in the past.

The work that they did to prepare for restart had a very busy schedule with a lot of moving pieces, and the team did an excellent job with support from our centralized team to execute the plan. We will approach this in the same way. It has one of the highest net present values in the business right now to get this up and running, and our team is all over it. We have confidence in the ability to meet the plan. Now, the risks are that there could be delays in getting the materials; there could be construction delays.

But we have managed that through the plan we put forward, and we will stay on top of it until it is done. Mark Johnson is on the call as well. Mark, if you want to add any color to what we are doing there, please go ahead.

Mark Jerome Johnson: Yes, Kathleen. We had one of these spillminators—what was a prototype—about a year ago that we called version 1. What we are installing now is a reengineered version of that, version 1.5. We got the first one installed last week, independent of some of this recent realization on the shift in material types, so we are testing that starting this weekend. As you mentioned, we have a number more at site. Our fabrication is taking place in Indonesia, and the group that is doing it has been very responsive to our needs.

We are looking at ramping up the capacity of that plant in Indonesia, and the team is also looking at other ways to shorten the construction cycle on the chutes. What we put into the plan is what we know we can do from the past, and then, like you mentioned, we will be continuing to look for things we could do to optimize and make that installation more simple and quick.

Carlos De Alba: Thank you.

Kathleen Lynne Quirk: Carlos, one other thing, and Mark can add to this. I want to reiterate that we are in the very early stages of the ramp-up. The sampling that we did of all the draw points is as of the present time. We have a process where we sample and inspect the draw points on a regular basis. As we continue to mine, it could be that some of this bottleneck gets resolved and our traditional blending systems can accommodate the material. We have not counted on that in this forecast. We have counted on using this more robust system of regulating the flow in the chutes.

But we could have a situation where the material becomes drier as material is mined. Mark, you can add to that if you would like.

Mark Jerome Johnson: Yes. It was unfortunate timing of ramping up just as we were doing the forecast process. Really, in March, I think our forecast based on the knowledge at that time would have been very similar to the previous estimate. As we started mucking, we had a higher incidence of spills occurring. Some of the material that we began mucking shifted to a wetter material. So what we have done is implement what we know today and use that as our basis. What we do know is that as we muck, the porosity of the material above will improve.

That is the sort of upside we might have—as we get a broader footprint and begin mining more draw points and more panels, some of these could convert back to where they were. It is a very dynamic process. We mine each panel remotely. It only takes one draw point within a panel to be wet for us to do the remote mining. There are also implications from panels adjacent to a wet panel. The team has also been very innovative in being able to remotely manage other aspects within the panel like rock breakage and hung-up panels, so it is more than just the remote mucking.

There are a number of other initiatives that we are pursuing that will increase the availability of the draw points.

Carlos De Alba: Thank you. A very quick follow-up. Can the regulators handle a drier material if the ratio improves over time?

Mark Jerome Johnson: Yes. It is really about being able to shut off the flow if it gets very sloppy. It is an innovative design where the gate and the hydraulic rams, as the material starts to flow, assist in us being able to shut off the flow if we need to. It is a matter of preventing spills from happening on our haulage level onto the trains, but it will also handle dry material.

Kathleen Lynne Quirk: It is a very flexible, robust system. As we mentioned, we had planned over the long term to install it, and now we are accelerating that to make the system more flexible and robust to handle any type of material.

Operator: Thank you. Our next question will come from the line of Alexander Hacking with Citi. Please go ahead.

Alexander Hacking: Good morning, Kathleen and team. Not to Monday morning quarterback, but you have a very experienced team at Grasberg. How was this issue missed in the initial assessment that water would start to build up as mining was halted? And then maybe in layman's terms, why not add more drainage to the mine? Thanks.

Kathleen Lynne Quirk: Mark, why do you not take the last part of that and what we are doing? In terms of the first part, Alex, we have monitoring of the water coming in and out of the cave. There was nothing that was detected of any significance or any significant concern. It was a matter of getting access to each of these draw points to be able to inspect them, and we could not do that until we got access in the March time frame. It does not take a lot for something to move from dry to wet—just a small amount of moisture.

This is not a lot of water or some big overwhelming situation; it is just the nature of what is wet or moist versus what is completely dry. We do have a number of initiatives, and that is what I wanted Mark to cover, that we started after the incident last September to address a more robust drainage system. The one we have now within the block cave, in terms of the gravity drainage, is very good. The one that we are pursuing is additional drainage from the surface. Mark, why do you not cover that? We have some information in the supplemental slides on it as well.

Mark Jerome Johnson: Right. The slide you are referring to is 41. We have, and have had in place for years, a very comprehensive drainage plan from the surface in the open pit where the pit has not been impacted. You are aware that as we block cave, there is a subsidence zone where the rock breaks, and where we have the wet muck coming from is the rainfall that falls onto that broken material. Our drainage system, both for groundwater and for the surface area that has been unimpacted, is very robust. It has been in place and functioning. The wet muck generation comes from the daily rainfall.

It falls onto that rock, it works its way down through the cave, and as it gets to a draw point, that draw point turns into somewhat of a funnel where it concentrates some of that flow within that broken rock. As Kathleen mentioned, it is only a couple percent difference in moisture content that can convert material from a bone-dry material that we can handle easily to a wet material that we need to manage much more significantly. It is not a matter of additional drainage within the cave.

What we are doing, as a result of the external mud rush that put us into the situation in the PB1 area, is looking to be able to drain the water away that collects within the cave essentially in the shape of the old pit. We are drilling into some of that broken rock above PB1. We are seeing some initial indications that even with the smaller diameter drill holes, we have been able to access some of that water. That is encouraging. We are getting other drills that will drill those holes much quicker and in a bigger diameter. Those are on schedule and should be drilling by June.

We also have other initiatives focused on the PB1 reopening, taking away the surface water that ponds or pools and any liquefiable material that might gather in the pit bottom.

Alexander Hacking: Thanks for the color, and do appreciate all the hard work that the team has done. Thank you.

Kathleen Lynne Quirk: Thank you, Alex.

Operator: Our next question will come from the line of Christopher LaFemina with Jefferies. Please go ahead.

Christopher LaFemina: Hi. Thanks, operator. Hi, Kathleen and team. A couple of follow-up questions on Grasberg and following up on what Alex just asked. If we look at the portion of wet draw points before the mud rush incident, I think it was 30%, and it is 45% now. What sort of variability is there around that number? In other words, was it 30% but sometimes 35%, sometimes 25%? What level of confidence do you have in the ratio of dry to wet today? Second, when did you identify that there were too many wet draw points?

I think there was a media report a couple of weeks ago that indicated that Freeport-McMoRan Inc. was actually ahead of schedule on the block cave ramp. Maybe that was just an incorrect media report, but I am wondering if this is something that you just learned very recently and was not an obvious problem a few weeks ago. Thank you.

Kathleen Lynne Quirk: Chris, on the diagram we show on Slide 9 the number of draw points and the dry-to-wet comparison. The important thing to look at is also the panel. In September, we had only one panel within PB2 and PB3 that did not meet the ratio, and we were dealing with that with blending. Now you have 10 out of the 23 that do not meet the one-to-one. That ends up derating the production of the whole panel because you can only produce at the level of the one-to-one until we get these enhanced material handling systems installed.

In terms of variability, we would not have had significant variability in the past, but we do have ongoing monitoring to inform our planning and management systems. Since we started mining, we have had some draw points that were wet initially in March go to dry and vice versa. It is a dynamic situation in these very early days of the ramp-up. As Mark talked about earlier, the timing of all this is that we had just commenced the ramp-up. There was new information we were getting along the way. In April, as we were going through the forecasting process, we did not modify any of our guidance. The actual progress we were making on the restart was very good.

We got that done ahead of schedule. Some of the media reports you may be referencing relate to discussions in Indonesia where there could be government people or media asking about the plan. Those would have been based on our original plan because we had not formalized our forecast until recently. Again, the recovery and preparedness to get to the ramp-up were going very well. It is the new information that has been unfolding in recent weeks where we had to address the forecast. It is very early days, and things can move from here. We do have a solution.

We are going to execute against that solution, and it is a positive long-term solution to give us flexibility to deal with these sorts of things over the long term.

Mark Jerome Johnson: I might just add that, since the start of Grasberg, we have also had a model that predicts the future of that wet-to-dry ratio. All the way through the life of PB2 and PB3, that ratio is generally two to one—two draw points of dry to one wet. There would be variability across the footprint, but broadly we had a much better ratio that we had been forecasting and using as part of our mine plans. That is a big part of the reason that we built GBC to be remotely mined from the onset. We have been working on this for quite some time.

It is a complex model—both material characteristics from size and then managing how the water makes its way through the broken rock mass. Our indications were much different over the longer term. It did not indicate the need for the spillminators at this point of the mine. As Kathleen mentioned, we were working on that and saw certain panels that would require it, but what we have looked at now is a much more conservative plan based on what we have today, making sure that the chutes themselves are not the bottleneck. The current plan is that we will replace all the chutes so that we will have that additional flexibility.

Operator: Our next question will come from the line of Analyst with Goldman Sachs. Please go ahead.

Analyst: I wanted to switch gears. You mentioned deploying the first internally developed additive and working on a second in North America. How established are the supply chains for each of these, and how quickly can you scale those additives? How much of the 800 million incremental pounds for leach is a result from these new additives? And lastly, given the increased diesel costs and global supply chain pressures, are there any risks to the $2.50 unit cost targets for North America in 2027? Thank you.

Kathleen Lynne Quirk: Thank you. In terms of the additive, the one that we are deploying now—we started with one stockpile at Morenci and are now deploying it more broadly across the stockpiles at Morenci—is readily available. We have a supply chain for it, and it is being applied. The results will continue to evolve as we go through the year, and that is the data that we want to see. In the lab, we have two additional next-generation additives we are focused on, and maybe more after that. We have seen in the lab with these additional additives a multiplier effect of benefit above the one we are using now. We have been working with potential suppliers on those.

It is not as easy to find—we may have to have it made—as the ones we are using now. We have been conducting meetings in recent months with the anticipation that we will commercialize one or more of those additives, and that is showing potential. To answer your question about scaling, it is the combination of additives and heat that is going to get us to the 800 million pounds. All of the initiatives we are doing on precision leaching and leach-everywhere—like adding irrigation lines with helicopters to places we could not access before—are operational work that will allow us to be in the 250 million to 300 million pounds range. The rest comes from the additives and heat.

The combination of using an additive on top of heat could give you a one-plus-one-equals-two-and-a-half or three. That is why this heat work is very important to get to our ramp rates. We have just started at Morenci. We have a pilot where we are heating the raffinate to try to raise temperatures within the stockpile. We are doing that on a test basis. Our idea is to put in modular units of heat that could be applied to all of our stockpiles. Initially, we are using natural gas to heat, but we are excited about the potential to have geothermal heat at Morenci, and we have promise there.

We are actually doing some drilling to define a resource that would be a low-cost way to heat the stockpiles. We know that heat works. Raising the temperature of the stockpile will add volumes of significance. Combined with the additives, we have a path to getting to 800 million pounds. We have to solve what is the right additive for different material types, and we have to solve the engineering of how to best raise the temperatures in the stockpile. Corey Stevens and his team are leading this effort. I will ask Corey to add any color to what I just said, and I will come back to your $2.50 question.

Corey Stevens: Thanks, Kathleen. We have a pilot going. We are using that to calibrate our heat models and what we would expect to see at Morenci. In parallel, we have a bigger project where we are tripling the size of that for our El Abra operation. That is going to add some volumes there. Additionally, we have a number of other targets where we are looking at a modularized version that can be deployed more readily across the portfolio, particularly in North America. We are excited about where we are headed on that front. Additionally, there are options with chemical heat using pyrite and air.

Here in the second quarter, we are going to be starting what we call our “perfect pile” in New Mexico, and that will have a next-generation design on being able to leverage heat from the natural pyrite that comes with the process there.

Kathleen Lynne Quirk: On the $2.50 question, with the changes in consumable cost and energy cost, we are reviewing what all that means. It has been a volatile situation. If you looked at energy cost, asset cost, and other consumables in place in recent quarters, together with the addition of these low-cost incremental pounds to get to our 400 million pounds target sometime next year, that would bring us to a path that gets to $2.50. We now need to look at what the right environment is for things that we do not control, like the cost of diesel or other inputs. That will cause us to relook at the $2.50.

The point is that with the input costs we have had in place over the last several quarters, and the addition of these very low-cost incremental pounds, we see being able to get our U.S. cost down significantly closer to where we are in South America. That is still intact. We just need to continue to monitor the impact commodity input costs will have on our cost structure. The sulfuric acid situation—while, as Maree said, we do not have a lot of spot exposure this year—we will have to see how that unfolds as we get into next year.

While we are hedged naturally because we have the smelters, the cost of the acids that we buy will be shown in the operating cost for the U.S., and we will have an offset elsewhere with the smelters where we actually produce and sell acid. I hope that helps give you some color around that.

Analyst: It does. Thank you very much. I will pass it on.

Operator: Our next question comes from the line of Bob Brackett with Bernstein Research. Please go ahead.

Bob Brackett: Good morning, and staying on the leaching theme. You all have been on a tear in terms of getting patents—I think you have had more patents in the last three years, a couple dozen, than you had in the previous ten, many related to leaching. What is the philosophy of those patents? Are they defensive to make sure you can execute on your inventory and your resource, or could they be potentially offensive where you could be a partner and get access to additional resources with your technology?

Kathleen Lynne Quirk: It is really both. Our focus—we have over 40 billion pounds of copper in these stockpiles, which have been treated as waste in the past. There is a huge value opportunity for us, and that is our immediate priority: to recover some of the copper that is sitting there in stockpiles, which needs a catalyst to produce it. That is our first priority. The second is, yes, we could leverage any technologies that we develop to potentially partner with others or potentially have synergies in an M&A transaction, etc. But our first priority is to maximize the value of our own work. The team we have working on this—we have a technology center in Tucson—is really strong.

We have added to the team recently, added some chemists and other disciplines. We have a multidisciplinary team working not only on the best additive but also on the best way to commercialize. Our corporate development team has been actively involved as well. It is a very high net present value project and would transform our U.S. business. We are making a lot of advances, and we are going to crack the code as we go forward.

Corey Stevens: Yes, Kathleen, you nailed it. We are moving forward with a powerful group of innovators. The over 40 billion pounds within our existing stockpiles do not count the other options we have within our company for below-cutoff-grade material that we are considering ways today that could be extremely valuable for us in the future as these options materialize. It is a very competitive market, and we are being very careful to protect our interests as we come up with these innovations.

Bob Brackett: That is all very clear. Thank you.

Operator: Our next question comes from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Lawson Winder: Thank you very much, operator, and hello, Kathleen and Richard. Thank you for taking my question and for today’s presentation. I would like to follow up on the theme of industry cost pressures and get a sense for what you have provided on the slides. Maybe this is best addressed by Maree. In terms of the sensitivity to diesel—versus the Q4 slide, it looks like diesel sensitivity has actually increased. Can you walk through why that would happen or why there would be a larger impact on EBITDA now than there was three months ago?

Kathleen Lynne Quirk: The slide that Maree reviewed has our sensitivities to copper and all of our input costs, etc. To calculate the sensitivities, we use what is in that forecast for diesel price assumptions and then measure a plus or minus 10% change to that. We have now incorporated a higher cost of diesel in our assumptions than what we had previously, and that is why a 10% change is more than what it was before. Is that the question you were asking?

Lawson Winder: Yes. That makes sense. You are assuming much higher diesel as a base case at this point?

Kathleen Lynne Quirk: Right. Yes. We will have to monitor that as we go. In our forecasting process, we typically use the prices in effect around the time of the forecast. Those for 2027–2028 have higher diesel costs than we would have had three months ago.

Lawson Winder: That makes perfect sense. Thinking about industry cost pressures, we have heard of explosive costs being higher, grinding media. You mentioned some insulation from sulfuric acid. For some of the other key cost items for your business, are there other places you feel there is some level of insulation, and where might there be more exposure?

Kathleen Lynne Quirk: It has been very regional, Lawson. As Maree mentioned, we have had a significant rise in diesel cost, but the most significant impact has been in Indonesia. Other Asian regions have experienced that inflation more significantly. We have not seen a lot of things we buy being adjusted at this point, but that will be something that lags, and we will have to see how long the situation continues and whether it will start to flow through other components of our cost. Some of the things that trade on the spot market have reacted, but many of our consumables are contractually negotiated. We will continue to monitor those.

Lawson Winder: Okay. Thank you.

Operator: Our next question comes from the line of Katja Jancic with BMO Capital Markets. Please go ahead.

Katja Jancic: Recently, we saw there was a change to Section 232 tariffs impacting derivative products. Do you see any impact from that, or do you expect any impact from that?

Kathleen Lynne Quirk: Not associated with what we sell. They have changed a lot of the codes for what gets tariffed. It did not change anything with respect to refined copper cathodes at this point. As you know, that is something that the government said they were going to be reviewing potentially by the middle of this year.

Katja Jancic: And then, quickly, on sulfuric acid—you are hedged—but can you let us know how much of it you actually do purchase in the U.S. for your U.S. operations?

Kathleen Lynne Quirk: It varies, but we do purchase some acid in the U.S. We also have, of course, the smelter which provides a baseload of acid to our U.S. operations. We have a sulfur burner where we buy sulfur and convert that to acid at our Safford operation. It varies what we buy, but we internally generate a big portion of what is needed in the U.S. In Spain, where we have a smelter, that is all sold externally. In Indonesia, we sell acid and will be selling more acid as Grasberg ramps up because we will start to operate both smelters in Indonesia. We are not long in acid, and in South America we do buy acid.

As we said, we do not have a lot of exposure to the spot market at this point in time. If this continues, we will have to look at what it means for 2027.

Operator: Our next question comes from the line of Timna Tanners with Wells Fargo. Please go ahead.

Timna Tanners: Two questions for me. I wanted to follow up on the Grasberg forecast. I know you talked about it being a timing issue, but I noticed it looks like some of the revisions extend out to 2029. Could you provide some color there? And then, pivoting to Peru, would be interested in your thoughts on the upcoming political election given your presence at Cerro Verde. Thanks.

Kathleen Lynne Quirk: On Grasberg, the real significant impacts are in 2026 and 2027. We do have a small impact in 2028 and 2029, but those are really on the margin. We are not projecting any issue related to this material handling issue as we get into those periods. That is just normal forecasting updates, and with rounding, it is pretty close to where it was.

Timna Tanners: Got it. And your thoughts on Peru?

Kathleen Lynne Quirk: Politically, we work with any administration. As you know, there have been many presidents in Peru in recent years. We are prepared to work with any administration that comes in, and we have a really good relationship with the local communities, which is really important in Peru. We know we have to earn that every day. Having that relationship and the partnership we have on water that we supply to Arequipa has been really positive for Cerro Verde. In terms of changes in administrations, we will continue to do the right thing and be a good corporate citizen in Peru with great benefits to the community.

That has been a real positive for Cerro Verde for many years, and we expect that in the future as well.

Richard Carl Adkerson: Let me just add that our relationship with Arequipa is really special, and our team down there deserves a lot of credit for the way they have built relationships with the community when so many other mining operations face challenges from the community. We have dealt with a whole wide range of presidents. Politics are very complicated, but you can look at our operating record and see how we have operated at Cerro Verde throughout all that turmoil, and I am confident we will continue to do so.

Operator: Our next question will come from the line of Orest Wowkodaw with Scotiabank. Please go ahead.

Orest Wowkodaw: Hi, good morning. A couple for me, please. I noticed the idle cost recovery at Grasberg went up to $1.3 billion from $900 million previously in terms of costs that are being excluded from your reported cash costs. Is that incremental dollars going out, or are you just shielding more of that from being included in cash costs?

Kathleen Lynne Quirk: That is basically because we are not at full capacity in the second half. A portion—starting as a declining portion—of our costs are expensed and do not go through inventory and cost of sales. It is not an increase in cost; it is a characterization of whether it is included in our unit cost or how it is treated for accounting purposes. We are following accounting guidance, and as we modified the ramp-up schedule, since we are not at capacity yet, a portion of our costs are treated as idle and those are expensed right away. There is no change in absolute costs other than the input cost changes like diesel. The idle cost methodology is consistent.

Orest Wowkodaw: Perfect. Coming back to the operating recovery at Grasberg, you identified the chutes as being a bottleneck for the more substantial level of wet ore. Are there any other potential bottlenecks ahead as this one gets solved that could play into the recovery rates?

Kathleen Lynne Quirk: This is the big one. As Mark was saying, our plan in terms of mining has been to have the mining capacity and the loading capacity at the extraction level to handle wet material. The logistical issue is how to get it loaded onto the trains. Solving this issue will get us where we need to be in terms of the large-scale ramp-up.

Orest Wowkodaw: The wet versus dry does not impact the capacity of the trains. Is that correct?

Kathleen Lynne Quirk: Right.

Orest Wowkodaw: Thank you very much.

Operator: Our final question comes from the line of Daniel Edward Major with UBS. Please go ahead.

Daniel Edward Major: Thank you. Two quick follow-up questions. Firstly, looking at Slide 9, it does not look like there has been any significant change in the ratio of wet to dry in PB1S or in the other sections. Is that the right read—so no change there?

Kathleen Lynne Quirk: This comparison is in PB2 and PB3 of wet to dry. PB1—we are still doing our work to be in a position to restart PB1 South by the middle of next year. This chart deals with the wet-to-dry in PB2 and PB3. In terms of the overall contribution of PB1S and then ultimately PB1C, it is relatively small in these forecasts. Our initial focus is to get scale from PB2 and PB3, and then optimize the situation at PB1S. As Mark said, as we get more of our de-risking done with the drainage work at the surface, we will consider reopening PB1C. This plan largely—particularly in the 2026–2028 time frame—comes from the PB2/PB3 ramp-up.

Daniel Edward Major: Are you also then installing similar modifications to the chute systems in PB1S to ensure that you can achieve nameplate capacity even if the ratio is higher in that zone as well?

Kathleen Lynne Quirk: Yes. We already planned to have these devices in the chutes in PB1.

Mark Jerome Johnson: The chutes in PB1 were damaged with the external mud rush. The plan was to replace them with the newer technology.

Daniel Edward Major: Final one. What is the CapEx associated with these modifications? There has been no change to group CapEx guidance. If you have deferred CapEx, is there any implication on the mine plan beyond 2030?

Kathleen Lynne Quirk: These are not terribly expensive. We have added something on the order of $60 million to $70 million in CapEx associated with this and had some timing variances within the plan that offset that. It is not a major cost, particularly considering how much copper and gold production you get from having this. It did not show up as a big capital cost burden.

Daniel Edward Major: That is clear. Thank you.

Operator: I will now turn the call over for any closing comments.

Kathleen Lynne Quirk: Thank you, everyone, and thanks for taking so much time with us. We will continue to report our progress as we go forward, and we are available if anybody has any follow-up. Thank you very much.

Operator: Ladies and gentlemen—

Richard Carl Adkerson: Thanks a lot, everyone. I can assure you we are going to be transparent in all things that go on with this ramp-up.

Operator: And that concludes our call for today. Thank you all for joining. You may now disconnect.

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