Just before we take our coffee break, Well, I guess I'll introduce myself again for those who weren't here this morning. I'm Lawson Winder, BofA Senior North American Metals and Mining Analyst. Please join me in welcoming Kathleen Quirk, who's President and CEO of Freeport-McMoRan, and an influential global mining executive and a leading voice in the global copper market, with more than 20 years at Freeport, and has been instrumental in guiding that company's past and future. Hello, Kathleen. Welcome to Miami. Please join me on stage. Folks, the setup for today's chat with Kathleen and I will be a fireside chat. We're also welcome to take questions from the audience. Hi, Kathleen. See you. We'll just sit down and get right into it. Kathleen, you recently spoke about copper being in a new era, and you talked about it being driven by electrification and AI data centers and investment in the grid. Why the change in tone? It's quite a bit more positive than even just a year ago. How sustainable do you see those demand trends? Actually, at Freeport, we have been very positive about copper going back a very long time. In 2003, the era of copper was really defined by the massive growth in China. At that time, we started looking at the situation, growing demand for copper, and started to see the issues around supply development. Really in 2007 was when Freeport made its big strategy commitment to copper through the acquisition of Phelps Dodge. As you remember, Freeport at that time was about, and with Grasberg, was about 60% copper, 40% gold. Was a big copper gold producer, and it was complicated from a multiple standpoint of how the company traded. We really looked at the fundamentals of the copper industry and felt that the opportunities in copper would be very, very positive over the long term. We didn't expect in 2007 to see what we're seeing today, where copper is becoming even more important in the global economy. It's not just about development, urban development and development of people around the world, but it's communications, it's electrification. Copper today is really underpinned not just by growth in China, but more broad-based. When you look at how much is going into energy infrastructure and electrification and power grids, and what's needed really for countries to compete on a global basis with respect to technologies and AI, copper is right there. Copper its characteristics are superior when it comes to conductivity. It's the metal when it comes to electrification. Yet over this time period, it's become even more challenging to develop new sources of supply growth. Freeport is committed to copper, is foremost in copper, and is well-positioned not only with current large scale production, but with organic growth opportunities and some innovation and technology that will allow us to drive value in the future. We're very excited about the demand drivers, which have become less cyclical recently and more secular in terms of trends and demand drivers. Freeport's just really well-positioned to participate in that. Sticking with the copper market, supply disruptions have been a feature of the market for a decade now. To what do you attribute the heightened level of copper supply disruption recently? You know, what needs to change in the industry for that track record? If you look back at the data, and some of the industry consultants do an excellent job at tracking and so does our sell-side equity analysts as well. Tracking disruptions. Historically, they have been around 5% of mine supply has been subject to some type of disruption. In recent years, to your point, that has moved up, some estimate to 6% or 7% of the market. It's a part of the market. It's been a feature of the market, even going back more than the timeframe you talked about, is having mines that have issues in terms of meeting what they expected to meet on any given year. When people and analysts forecast supply and demand, they usually provide some type of allowance for disruptions in their fundamental supply-demand balances. To your question about why this is occurring and why it may be recurring at a greater scale, you know, a couple percentage points over historical, it's an interesting dynamic. You know, historically, if you go way back, you'll see there's been a lot of disruptions that come from, you know, labor disruptions or labor issues. That's been less of a feature of the market. I think one thing that the industry has done, our industry has done, has improved a lot labor relations, has improved a lot on community relations. You see, sometimes you'll have disruptions coming from operations because of community issues or roadblocks or things like that. I think the industry has gotten a lot better when it comes to managing risks, not only technical risk, but non-technical risk and dealing with things in a very proactive way. That's been a positive. Normally when you have some large disruptions, it can come during a startup phase. It can come early in the phase of a ramp-up of a mine. With a newer mine, you have less of a track record, you have less certainty about exactly what sort of issues you'll have to work through as you're ramping up. Many times, and we as an industry try to bake this in when we're giving our forecasts and guidance, that you are going to have some challenges when you're starting up. Sometimes they're more than what we expect. One of the things, and you know, we at Freeport feel very strongly about this, but one of the things that we need to do as an industry, not just for investors, but for all of our stakeholders, for those that rely on us, our customers, is have a reliable production profile. That is easier said than done. This industry has many challenges, both technical risk and non-technical risk in terms of meeting production forecasts. It's something that we have to do as an industry, we have to do better. At Freeport, we're very focused on doing what we say, executing, understanding the risks of what we're doing, being proactive about how to address those risks. We've had You know, you go back in history and I think Freeport has a pretty good track record when it comes to execution. We've had some issues just recently that I know many of you already know about when we had our disruption at Grasberg in September of last year. When you have a disruption at a mine the size of Grasberg, the second largest in the world, it is a big deal. It is a big deal for supply. Now, it's our job as management team to really work to avoid any unforeseen disruptions. We've operated at Grasberg a very long time, and we've been operating the underground before this occurred for five years or so, the Grasberg Block Cave. We have underground history going back to the 1980s. This particular ore body we've been operating for five years prior to this and had an issue which humbled us. Our team worked very under difficult circumstances and recovered very well. Now we're back in the ramp-up mode. We've had some delays with downstream and material handling that we're working through. When you have a big mine like Grasberg and there is an issue, it can be a big disruption to the market. It's our job as a management team to really work hard to avoid these situations, to understand the risk, to, when there is an issue, to address it very proactively. I think our industry as a whole is getting better in many different areas of operations. As you think about what we're dealing with now as an industry, the technical challenges are more difficult than they were historically. The mines that are being developed now, the big, large underground mines, are more technically complex than a surface mine would have been. We can't generalize every single operation, but generally, the places where we're investing, not necessarily just Freeport, but everyone in the industry is having to invest in more challenging geographies, which that brings another level of risk. One of the things that we benefit from at Freeport in terms of execution and managing our risk is that we're in jurisdictions where we have a lot of experience. A lot of the growth that we're doing at Freeport is actually brownfield in nature and lower risk. We do operate, you know, some technically complex places, but for the most part, a good portion of our assets are in the Americas or in established places. And we'll talk, we'll have that chance, I hope, later in the presentation to talk more about our growth options in the company. It's about understanding the risks, managing those risks, doing what you say you're gonna do, and being proactive, being transparent. It's mining. We are gonna have inherent risks, and it's our job as the industry and management team to be able to overcome any challenges, and that's what we focus on doing. For folks following your story very closely and the turnaround and ramp back up of Grasberg, what are the milestones they should be watching over the next 6-12 months just to know everything's on track and give them confidence that you're on the right track? The big milestone that we achieved in March was actually completing the work that we needed to complete between September and March. Number one, to understand what caused the issue, how to avoid it in the future, and to do the remedial work in order to prepare ourselves for startup. That was a big de-risking period that we went through between September and March, and that was accomplished. Now the ramp-up is started. We reported last month a slightly slower ramp-up schedule during our earnings release in April, a slower ramp-up schedule than we originally targeted. That was to put in place some additional downstream infrastructure to deal with material types over the course of this long-term asset. We made the decision to enhance the material handling systems within the operation, and that's going to require us some additional time to get to the full ramp-up. We're operating today, we're ramping up. We expect to be at around 60%-65% as we get into the second half of this year, reach 80% by middle of 2027, and approach full capacity by the end of 2027. This is a big operation and we've got plans in place to install this equipment, and that'll be the milestones of installing these material handling systems that allow us to transfer ore from our block cave to the rail cars for further processing. Those are the enhancements we're making to the systems now. We've got the plan. We'll continue to optimize it. We think we have opportunities to do that, to optimize as we go forward. In any startup, because this is now somewhat similar to a startup, even though we have a lot of operating history, you're gonna face challenges. We know that. We try to allow for time to address any challenges we may encounter as we go forward. Our team there is very experienced, extremely experienced. We've been operating block cave mines in this district since the 1980s. Freeport has, in terms of skill sets, among the best underground mining capabilities in the industry. We're confident in the resource. We're confident in getting back to full production. We're doing this for the long term, and we're doing it in a way that will give us a more robust system, downstream system, to be able to handle any type of material that's being produced from the mine. Those are the big things. We'll report on this regularly. Every quarter we will give a full update as to where we stand, our team is very confident. This is a timing issue, as you know. It's not a change in the resource or anything like that. We're very confident in the long-term future of this great asset. We just got our signed an MoU in the first quarter with the government of Indonesia to extend our operating rights beyond 2041. That gives us a lot of running room as we go forward with this great ore body that has both copper and gold in the same ore and is one of the highest grade and most valuable ore bodies in the world. Before we leave Grasberg, I like that you pivoted to the future outlook at the asset. Thinking about the extension beyond 2041, how does that change your capital allocation now that you have this longer run, this longer runway? You know, if you look back at where we were with this asset, Grasberg was discovered in the late 1980s, our contract was signed, this current one was signed in 1991 and goes out to 2041. We did an amendment in 2018 when we brought in the Indonesian government as a big shareholder. We were always thinking about the district with lenses on that said it's 2041. It's a huge district, and we know that there is more resource there beyond 2041. What this extension really does is lifts those lenses and allows us to think about more broadly, what is the potential here. In the past, any investment that we were making had to be robust enough to pay out before 2041. As we think about it, we can think about what is the best long-term value opportunity. There are investments that we're making now, like we've got an ore body that we're investing in called Kucing Liar. Our previous economics were based on being able to generate attractive returns between now and 2041. That resource doesn't end in 2041. We've got a lot of resources within this district that go on and extend beyond that period of time. It'll allow us to think about things in a much, much broader way to say, "What's the maximum potential not having any date in mind, but what's the right way to invest here to maximize the value potential for this district, for all the stakeholders? It's not just for Freeport to benefit, but it's all the community, it's all the government stakeholders, our workforce. Everyone can think about this as a life of resource type opportunity rather than saying, "Oh, well, I have to make my investments and get returns back by 2041." If you had that scenario, you wouldn't make any more investments. This will allow us to continue to invest in, like I said, one of the world's the second-largest copper mine, and sometimes the world's largest gold producer in any given year. Single mine. You said that very recently, that novel leach would experience a pivotal change this year. You know, you also made other comments that it's one of the highest NPV opportunities in the portfolio. As well, you've spoken about how heat and additives could drive another step change. When you're thinking about that asset, what needs to be proven in 2026 to then validate the path toward 400 and then to 800 million lbs per year? How do you see the key risks? Okay of fully scaling that? Okay. This is something that we're so excited about at Freeport. We have the potential with existing ore that's already been mined to reprocess the ore and recover more copper. What Lawson's talking about is the potential from all of these stockpiles that we have, many of which are located in the U.S. We've got over 40 billion lbs of ore that's in these stockpiles that has already been processed, but we've left behind a lot of copper. Previously, old technology, we would have thought this was waste. Now, with new technology, it can be recovered. Not all of it, but a good portion can be recovered for value. When you think about the potential for having 800 million lbs a year that you can recover from existing stockpiles that have already been mined, materials in the stockpile already, so you've already incurred costs to get it there, and now you have to come up with technology to reprocess, which we're well on our way to. It's a huge value. It's not capital intensive. You know, it might cost to build an 800 million lbs a year mine, copper mine, might cost you $10 billion or more. Here, we don't have big capital requirements. Now, we have to prove the technology, and that was what he was talking about for 2026. To date, what we've been doing is going into these stockpiles in different ways, using sensors and using different operational tactics to recover more copper, and we've been successful in getting a run rate of just over 200 million lbs a year. This year is pivotal for us because we're deploying not just operational tactics, but new technologies on these stockpiles. Freeport has been, over the past few years, working to develop an additive that could be applied to the stockpiles to enhance copper recoveries. We've been working in the lab, we've been pilot testing, and now we're actually deploying this additive at scale in certain stockpiles at Morenci, our biggest mine in North America. We're seeing encouraging results. We also have, in our lab, other additives that we've been testing that show even more promise, maybe 2x or 3x more recovery than the one that we're deploying in the field now. A lot of promise there. We're gonna start getting results as we go through the back part of this year. The other thing that you think about, like, copper and how copper is produced and copper going through a smelter. Like, what catalyzes it? Heat. You know, a smelter is a very hot furnace and ultimately produces copper from concentrate. Here, we have all this copper sitting in these stockpiles, and it's been proven that the hotter the temperature, the more you raise the temperature within the stockpiles, the more recovery you're gonna get. We've been pursuing opportunities to add heat to our stockpiles. Right now, we've just deployed, we've just constructed some technology at our Morenci Mine to put in some boilers. We're doing it, the same thing, in our mine in Chile, to add heat. We're gonna start directly putting heat into the stockpiles to raise the temperature to get more copper recovery. These, this information, this data that we're getting is gonna guide us for the future. Between the heat and the additives, that's where we see the step change. We're well on our way. We've been investing in it. We've got all the, all the experts, not only internally, but externally, helping us through this. We're gonna, we're gonna crack this code. It's going to be a lot of value for Freeport, given the fact that we have this big footprint of stockpiles where we have copper that hasn't been recovered yet. I'm gonna pick up on your comments about the U.S. operations. Another thing you've talked about recently is the ability to drive costs down to $2.50 from above $3 right now today in the U.S. operations. As you think about that goal and that ambition, what's the interplay between the innovation piece of it and volume growth and then some of the external cost pressures and other factors that are ultimately gonna allow you to get to that $2.50? Yeah. Well, our target has been to bring our driver costs in the U.S. down. Our U.S. mines are low grade, they're higher cost than something like would be like in Indonesia or some of the international locations. Our work has been on making the U.S. operations as efficient as possible. This leach opportunity that I was just talking about is one way that we're doing that, is bringing on incremental pounds rather than $3 per pound, the leach opportunity could be like $1 per pound. It brings down our average cost. The more volumes we add at a lower incremental cost brings down our average cost in the U.S. The other thing we're doing is we're leaning heavily into technology. We're using technology in different ways than we have in the past. We're becoming a lot more automated. We just converted one of our mines in Arizona to completely autonomous. We're leaning more heavily into technologies that will automate the business, make us more efficient, help us maintain our equipment better, help us manage downtime. You know, all those things that will drive value in the U.S. I know we don't have a huge amount of time left, but I wanna highlight that Freeport's U.S. business is really well-positioned in this kind of environment to generate huge amounts of cash flow. It's highly leveraged. We've got low grades, relatively high costs compared to other places. As copper prices in this environment increase, the leverage really shines through. The leverage really comes through because it goes right to the bottom line. We don't have in the U.S., because we own the land and fee, we don't royalties. We have NOLs currently, and even when we do get into a tax-paying situation, the U.S. tax rates are low relative to what they are internationally. Our U.S. business, with its growth potential, with this novel leach potential, is a source of significant value for Freeport. Again, if you look at the math and look at the sensitivity of where copper prices are, and you have a positive view of the copper industry, this U.S. business is gonna be extremely valuable. I wanna check with, folks in the audience to see if anybody had any questions. Please just pop up your hand right now if you do, and we'd be happy to address that in the few minutes that we have left. Otherwise We do have a question from an analyst that covered you over 20 years ago. This is gonna be from the expert. He remembers all this stuff. Yeah. Thank you. The interesting thing I've noticed this morning over the presentations, comparing this conference to a couple decades ago, everything then was focused on exploration, exploration. These days, it's on brownfield expansions or call them greenfield projects adjacent to existing projects and big districts for mining instead of mines. How does the exploration situation look going forward? Are we going to just see incremental growth in districts? With all the growth that's predicted, and analysts are very good at predictions, do you see enough supply coming online? It's great to see you, Dan. Exploration's got to be part of the industry. I mean, we have to work to continue to try to find new resources. As you know, that history of our industry, it's a mature industry, and large discoveries are extremely rare. You know, Freeport used to have a chart in your days that would show all the time. It showed, you know, years of discoveries of the largest resources. You know, the newest ones were places like Grasberg, you know, in 1988 or 1989. You've had others. You've had DRC. You've had some success in DRC. Using that, relying on exploration as your future growth is not something you can always count on. You have to do it. You have to work on it. What we as an industry are trying to do, because we do need to grow, we do need to be able to meet the demand that's coming in this industry, we need to have more predictable sources of growth over the medium term. Those lead you to brownfield. Those are the things that can make a difference over the next 5-10 years. The exploration that you're talking about is a 20-year exercise. The things that can move the needle, you know, in the medium term are gonna be brownfield opportunities. I'm a big believer in technology because, you know, we put a lot of money in exploration, and sometimes it works, but more times than not, it doesn't. It's, it's something like R&D that you're investing in, and you're doing a lot of work to qualify exploration, but it may not always work. Our technology is sometimes the same thing. We as an industry need to be putting more investment in technology. We have an industry where, like in the leaching technology, we only recover, like, 40%. It depends on what the nature of the ore is, but we may only recover, like, 40% of the copper. We need to be recovering all of that copper if we're gonna meet the requirements of the future. Technology investments and ways to make us more efficient. Like in the U.S., we have resources that go on for miles and miles and miles, but you hit the economic limit, so you can't produce them economically after a given period. If you drive down your costs, guess what? You have more reserves that you can recover economically. Those are the things that, in addition to exploration, we need to spend money on and bring in smart people and partners to help us with technology investments in this industry, because I think there's still a lot of untapped potential left. To answer your question about meeting supply, we're committed as an industry so that our consumers rely on us, and we're committed to finding ways to grow our production in a reasonable way so that people can feel comfortable that copper is there to support their power project or data center or whatever they're doing to as the world becomes more and more electrified. Kathleen, thank you very much. Thank you. Folks, we're gonna take a brief break right now and we'll be back in several minutes. Thank you.