Freeport-McMoRan Inc. (FCX ), headquartered in Phoenix, Arizona, operates one of the world's largest copper and gold deposits in the Grasberg minerals district in Indonesia and significant copper, gold and molybdenum mining operations in the Morenci minerals district in North America and the Cerro Verde operation in South America. Today they posted their Q2 financial results as follows:

SUMMARY FINANCIAL DATA

• Revenue: UP 11.3% to $3,711 million
• Operating income: UP to $669 million from a $18 million profit in the same period a year ago
• Net income from continuing operations: UP to $326 million from a loss of $229 million in the same period a year ago 
• Diluted net income per share of common stock: UP to $0.18/share compared to ($0.23) in the same period a year ago
• Operating cash flow: UP 18.6% to $1,037 million  
• Cash and cash equivalents: UP to $4,667 million from $330 million in the same period a year ago
• Total debt: DOWN 20% to $15,354 million

SUMMARY OPERATING DATA

Copper

• Production: DOWN 12.7% to 883 million recoverable pounds from the same quarter a year ago
• Sales: DOWN 4.5% to 942 million pounds
• Average realized price per pound: UP 21% to $2.65
• Site production & delivery costs per pound: UP 16.3% to $1.64
• Net cash cost per pound: DOWN 9.8% to $1.20

Gold

• Production: UP 112.6% to 353 thousand troy ounces
• Sales: UP 176.9% to 432 thousand troy ounces
• Average realized price per troy ounce: DOWN 3.8% to $1,243

Molybdenum

• Production: UP 21% to 23 million pounds
• Sales: UP 31.6% to 25 million pounds
• Average realized price per pound: UP 14.9% to $9.58

2017 Guidance

Sales volumes for the year 2017 are expected to approximately

• 3.7 billion pounds of copper,
• 1.6 million ounces of gold and
• 93 million pounds of molybdenum,

Estimated sales volumes for the year 2017 are lower than April 2017 estimates by approximately 150 million pounds of copper and 320 thousand troy ounces of gold, principally attributable to lower mining rates in the Grasberg open pit associated with reduced manpower levels and modifications to the ramp-up schedule for the Deep Mill Level Zone (DMLZ) underground mine. These shortfalls are expected to be recovered in future periods.

Consolidated unit net cash costs (net of by-product credits) for copper mines are expected to average $1.19 per pound of copper for the year 2017 assuming average prices of $1,250 per troy ounce of gold and $7.50 per pound of molybdenum for the second half of 2017 and achievement of current sales volume and cost estimates,

The impact of price changes for the second half of 2017 on consolidated unit net cash costs would approximate $0.015 per pound for each
$50 per ounce change in the average price of gold and $0.01 per pound for each $2 per pound change in the average price of molybdenum. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum.

Consolidated operating cash flows are estimated to approximate $3.8 billion for the year 2017 (including $0.6 billion in working capital sources and tax payments) based on current sales volume and cost estimates, and assuming average prices of $2.65 per pound of copper, $1,250 per troy ounce of gold and $7.50 per pound of molybdenum for the second half of 2017.

The impact of price changes during the second half of 2017 on operating cash flows would approximate $180 million for each $0.10 per pound change in the average price of copper, $40 million for each $50 per ounce change in the average price of gold and $40 million for each $2 per pound change in the average price of molybdenum.

Capital expenditures are expected to approximate $1.6 billion for the year 2017, including $0.9 billion for major mining projects, primarily for underground development activities at Grasberg.

As a result of regulatory uncertainty, PT-FI has slowed investments in its underground development projects. If PT-FI is unable to reach an agreement
with the Indonesian government on its long-term mining rights, FCX intends to reduce or defer investments significantly in underground development projects and pursue arbitration under its COW.

FINANCIAL POLICY

In December 2015, FCX's common stock dividend was suspended. The declaration of dividends is at the discretion of the Board of Directors (Board) and will depend upon FCX’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

Richard C. Adkerson, President and Chief Executive Officer, said in the company's press release that:

"We are successfully executing our strategy of building values in our large-scale, industry-leading portfolio of copper assets.

Our strong management of costs and ongoing capital discipline combined with improved copper prices are providing free cash flow to strengthen our company’s financial position.

We remain focused on protecting our past investments and supporting our long-term investment plans at the high-grade, long-lived mineral deposits in the Grasberg minerals district in Papua, Indonesia. We are encouraged by:

• recent progress in our active negotiations with the Indonesian government to resolve issues involving our contractual rights and by
• multiple opportunities to build long-term future values for our shareholders from our high-quality copper assets in the Americas."