Freeport sees higher copper and gold output

Freeport sees higher copper and gold output

NEW ORLEANS (Reuter): Freeport-McMoRan Copper & Gold Inc said that PT Freeport Indonesia Co. (PTFI) expects increased copper and gold output in the third quarter.

The company said fourth quarter sales are projected at 305 million pounds of copper and 495,000 ounces of gold, up from 285.3 million pounds and 418,000 ounces in the third quarter, reflecting the expectation of mining ore with higher than mine- life average grades.

It said the third quarter volumes were 10 percent and 23 percent higher, respectively, than the 1995 quarter as mill throughput averaged 127,500 metric tons of ore per day.

Offsetting higher sales volumes was a 22 percent decline in copper realizations in the latest quarter compared to a year ago, Freeport said.

During the third quarter, PTFI's cash production costs averaged about US$0.14 per pound of copper, 36 percent less than in last year's third quarter.

The company said the primary reason for the significant reductions was a 15 percent improvement in unit gold credits because of higher gold sales and realizations, and a decline in unit royalty costs because of lower copper prices.

Partially offsetting these positive items were higher unit treatment charges reflecting market conditions, Freeport said, noting the benefit of higher treatment charges is included in Atlantic Copper Holding SA's operating income. That is the new name for Freeport's smelter and refining unit in Spain, formerly known as Rio Tinto Minera SA.

The company said Indonesian unit cash production costs for the full year are expected to average less than $0.20 per pound of copper, allowing PTFI to remain among the lowest cost producers in the world.

As part of its open market share purchase program, Freeport Copper said, it purchased 2.2 million shares of its Class A and Class B common during the third quarter for $64.1 million, about $29 per share.

Through Sept. 30, 1996, Freeport said, it had purchased 11.9 million shares for $328.3 million, about $28 per share, under its open market share purchase program of up to 20 million shares.