A description of the current situation and
near-term outlook were provided in a CIBC report.
In a July 2 research note, CIBC analyst Oscar Cabrera reported that Freeport-McMoRan
Inc. (FCX:NYSE) lowered its Q2/19 gold sales estimate but maintained its
2019 guidance for gold and copper. It also provided an operations update for
PT Freeport Indonesia.
Freeport maintained its 2019 copper and gold sales guidance at 3.3 billion
pounds and 800,000 ounces, respectively. However, the company lowered its Q2/19
gold sales due to the Grasberg pit resequencing.
Cabrera pointed out that Freeport importantly declared its intention to
meet 2019 revised mine plans for the Grasberg open pit and noted the pit
could potentially produce more copper and gold in 2019 than expected. The
company also indicated that material not mined from the Grasberg open pit
could be mined from the Grasberg block cave.
Freeport's primary near-term catalysts, Cabrera wrote, include the company
meeting operational guidance and executing development of the Grasberg
underground ramp-up and of Lone Star.
After factoring into its model on Freeport revised Q2/19 guidance and the
2019 operating update, CIBC reiterated its Outperformer rating and $15 per
share price target on the company. Freeport's current stock price, in
comparison, is around $11.29 per share, a discount to peers that is
unwarranted, Cabrera pointed out, "given the completion of Grasberg's
agreement, strong operating/development project execution and a strong
balance sheet."
Freeport will report Q2/19 results before the market opens on July 24,
2019, and immediately follow them with a conference call.
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Disclosures from CIBC, Freeport McMoRan Inc., July 2, 2019
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Important Disclosure Footnotes for Freeport-McMoRan Inc. (FCX)
· CIBC World Markets Inc. expects to receive or intends to seek
compensation for investment banking services from Freeport-McMoRan Inc. in
the next 3 months.