Zuojia (Zachary) Chen Vignesh Murali Kuralay Seitalina Yili (Eric) Xu Nov. 5 th, 2009

Company Overview An international mining company in North America with reserves of copper, gold and molybdenum Largest and lowest cost copper producers in the US principal asset is the Grasberg minerals district in Indonesia, which contains the largest single gold reserve World presence two segments: mining and exploration; smelting and refining =IP&Type=GetReport&FileFormat=PDF&ReportID=62261&FileName= pdf&VendorName=Datamonitor

Industrial Analysis The global metals and mining industry grew by 20.2% in 2007 to reach a value of $1,594.9 billion. Sales of iron and steel : 65.1% Asia-Pacific Markets : 62% Trend towards concentration FCX’s Market share in the copper industry 2007: 60% eport&FileFormat=PDF&ReportID=62261&FileName= pdf&VendorName=Datamonitor

Competitors Arcelor Mittal: located in Luxembourg; world's largest steel producer; 6 segments covering 5 major industries BHP Billiton: located in Australia; two entities: BHP Billiton Limited, BHP Billiton Plc; operates through nine segments Rio Tinto: Located in Australia; engages in exploring, mining and processing the mineral resources; operates through eight business groups

Comparable Ratio Analysis

SWOT Strengths: Expanding market share Geographical diversification Operational structure Weaknesses: Poor profitability (Metal prices volatile) Limited liquidity position (1.66) Opportunities: Increase in Demand for Molybdenum Emerging technologies Threats: Environmental regulation ( Kyoto Protocol) Foreign exchange risk Global economic slowdown 5-yr CAGR: 65.5% Expertise in both technology and production methods

Financial Statement Analysis Profitability Liquidity Efficiency DuPont Analysis

Profitability

Liquidity

Efficiency

Du Pont

Du Pont_ adjusted

Du Pont Pro Forma

DCF Assumptions Revenue Major drivers Quantity of copper sold and price of copper Infrastructure demand in developing countries Residential and Industrial development in the US Operating Expenses Management Strategy to reduce costs Capital Expenditure

Multiples Valuation

Football Chart

Correlation within present portfolio

Recommendation Price per share when we started - $ 60 Price per share now - $ 77 Price range using Multiples and DCF - $60- $80 Even with very conservative growth, company will be profitable and in a financial sound position Reduces standard deviation of the portfolio We recommend we add this company to the watch list and reanalyze company when price is $55