SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 1997
FREEPORT-McMoRan COPPER & GOLD INC.
Delaware 1-9916 74-2480931
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
1615 Poydras Street
New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Item 5. Other Events.
The following news release was issued by Freeport-McMoRan Copper &
Gold Inc. on February 18, 1997:
Freeport-McMoRan Copper & Gold Inc. (FCX) announced today that it
has agreed to acquire a 15 percent interest in two Indonesian joint
ventures (JV), one controlling the mining rights to the Busang II
exploration area and the other controlling the mining rights to the
Busang III exploration area in Kalimantan, Indonesia. Each JV will
form an Indonesian company which is expected to be granted a
Contract of Work (COW) to explore and develop the mining rights in
the Busang II and Busang III areas, respectively. Each of the two
Indonesian companies will be owned 45 percent by BRE-X Minerals
LTD. (BRE-X), 40 percent by Indonesian interests, including the
Government of Indonesia (GOI) which has given its support for the JV
to proceed with developing the Busang properties, and 15 percent by
FCX. The JV participants have agreed to appoint FCX as the operator
of the Busang II and Busang III properties providing FCX the
authority to explore and develop these areas.
In consideration for the transaction, FCX has agreed to provide
25 percent of the total estimated cost of delineating a proven
reserve and constructing the initial Busang mine complex, up to $400
million. Additionally, FCX has obtained, on behalf of the
Indonesian companies, a $1.2 billion project financing commitment
from The Chase Manhattan Bank for the remaining estimated costs of
the initial Busang mine complex.
James R. Moffett, Chairman and Chief Executive Officer of FCX,
said: "We are extremely pleased that BRE-X and the Indonesian
partners in the Busang joint venture have asked us to participate in
and operate the significant Busang gold properties. FCX has the
infrastructure, and the management in place who understand the
exploration, engineering, environmental and social challenges of
operating in these remote islands. FCX has demonstrated its
expertise by developing and operating the Grasberg complex, one of
the world's largest and lowest cost mining operations located in
Irian Jaya, Indonesia. Our Grasberg complex, with proven and
probable reserves of over 50 million ounces of gold and 40 billion
pounds of copper, is currently operating at a mill rate of over
125,000 metric tons of ore per day (MTPD), which we are currently
expanding to an expected rate of at least 190,000 to 200,000 MTPD at
a cost of $960 million. We are excited about establishing proven
and probable reserves at the Busang properties and swiftly bringing
these reserves into production for the benefit of all shareholders
and the country of Indonesia. We have been operating in Indonesia
for almost 30 years and have an experienced mining and management
team in place that can initiate development activities immediately."
This transaction is subject to, among other things, the
approval of the commissioners and directors of the respective
companies as well as the GOI.
FCX is engaged in mineral exploration and development, mining
and milling of copper, gold and silver in Irian Jaya, Indonesia and
the smelting and refining of copper concentrates in Spain. FCX is
also involved in a joint venture to construct and operate a
smelter/refinery in Indonesia.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FREEPORT-McMoRan COPPER & GOLD INC.
By:/s/ Michael A. Weaver
----------------------------------
Michael A. Weaver
Controller - Financial Reporting
(authorized signatory and
Principal Accounting Officer)
Date: February 19, 1997