Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan First Quarter Conference Call. Later, we will conduct a question and answer session. If you wish to ask a question during the Q&A session, please press 0. I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Regina, and good morning, everyone. Welcome to the Freeport-McMoRan conference call. Earlier this morning, FCX reported first quarter 2025 operating and financial results. A copy of today's release with supplemental schedules and slides are available on our website fcx.com. Today's conference call is being broadcast live on the Internet. Anyone may listen to the conference call by accessing our website homepage and clicking on the webcast link. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today. Before we begin our comments, we would like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward-looking statements. Actual results may differ materially. Please refer to the cautionary language in our press release and slides and to the risk factors described in our SEC filings, all of which are available on our website. Also on the call with me today are Richard Adkerson, Chairman of the Board of FCX, Kathleen Quirk, President and Chief Executive Officer, Maree Robertson, Executive Vice President and Chief Financial Officer, and other senior members of our management team. Richard will make some opening remarks, Kathleen and Maree will review our slide materials, then we will open up the call for questions.

Thank you, David, and thank you all for joining us. Kathleen and our team will review the details of the quarter and our outlook. Team Freeport is executing well in a complex environment. Over the years, we have gained a lot of experience in doing just that—facing problems with resilience and relentlessness, and successfully executing our plans. Government policy and tariffs are dominating financial markets. At Freeport, we are focused on the basics to drive long-term value. Our strategy has been clear for many years, centered on being a global leader in copper. We have built our business with large-scale copper-producing assets and a long-term pipeline of organic growth projects supported by a strong balance sheet and a clearly articulated financial strategy. This strategy places Freeport in a strong position with where the world is heading. Copper is an essential metal for the future, and Freeport is foremost in copper. We also have significant financial exposure to gold and a world-class molybdenum business. Kathleen and our senior management team are engaged in important initiatives to support this strategy. As you will see, we are making significant positive progress. Our team is driving efficiencies and reducing costs while setting up the next generation of copper development projects, which will have attractive returns for shareholders by delivering more copper to a world with increasing requirements. Our Freeport team's accomplishments in Indonesia are striking. In the upstream mining at the Grasberg district, and with our massively expanded downstream processing and refining, the smelter is progressing ahead of our earlier targets. We are honored that Indonesia's president inaugurated our precious metals refinery in March. PTFI celebrated its 58th anniversary in Indonesia this month. My first trip to Indonesia was 35 years ago. I am delighted with our current positive relationship with the government under President Jokowi's leadership. We are well-positioned in working together to secure long-term operating rights for this incredible asset.

It's the world's second-largest copper mine and one of the world's largest gold mines. All of this will generate large values for all stakeholders for decades to come. Thank you, Richard. I am going to start on slide three with our first quarter highlights. Production of copper and gold was in line with our expectations going into the year, incorporating planned maintenance activities at Grasberg. We exceeded expectations on copper sales, and as we flagged in our March 31 update, our gold shipments were impacted by timing. Unit costs were similar to what we guided to in January for the quarter and a bit better than our late March update. We generated $1.9 billion in EBITDA with expectations that margins and cash flows will benefit from improved results in the balance of the year. Importantly, our annual sales guidance is on track, and we expect operating and financial performance to improve significantly in the balance of the year. To put this in context, compared with the first quarter levels, our quarterly copper sales volumes are expected to average about 20% more in the balance of the year. Gold sales are expected to average nearly four times the first quarter rates, and unit net cash costs are expected to be 30% lower on average in the remaining quarters. This will drive strong performance and free cash flow in the balance of 2025 and continuing over the next several years. Other notable highlights in the quarter include solid progress on the smelter, with repairs tracking ahead of plan, continued momentum on our low-cost leach innovation projects in the US, the premium we are receiving on our US copper sales, which we will talk more about, favorable gold pricing, and the advancement of optionality in our organic growth portfolio. We are well-positioned for the future as a leader in the global copper industry. We remain focused on operational excellence and our innovative and exciting growth pipeline to drive our future results. We took advantage of recent market volatility, as you see, and year-to-date have repurchased 2.3 million shares in the open market for approximately $80 million. On the next slide, slide four, we are summarizing our priorities for 2025. We covered these on our January call, and these areas are defining our everyday pursuit of value creation. The first one is executing our plans safely and efficiently. That remains a top priority. Team Freeport has a history of strong execution, delivering on our plan cost targets, and capital projects safely and efficiently while seeking opportunities to capture upside values. Given inflationary pressures in recent years, we are particularly focused on aggressive cost management and driving our costs lower, particularly in the US. The second key focus area is scaling the leach opportunity. We have talked a lot about that in recent years. Achievement of our targets will significantly enhance margins and profitability. We continue to target a 40% increase in our run rate to achieve 300 million pounds per annum by the end of the year and on our path to 800 million pounds per annum in the future. Third is the PTFI smelter. The team has expedited the repair process and set us up for startup by May. That's about one month sooner than the earlier schedule. Our startup has been derisked, and success here will be beneficial as we work to extend our operating rights long-term in Indonesia. We see innovation as a major value driver for our business. We are pursuing aggressively new tools to enable better product and cost performance. We are continuing to build optionality in our growth portfolio for the next generation of copper-producing assets. We have key milestones identified at three major projects that we are pursuing in the Americas. Turning to the copper markets, we have some commentary on Slide five. The market fundamentals remain positive, and that's underpinned by copper's increasing use in the global economy to drive electrification. Copper prices during the quarter traded between $3.94 per pound and $4.53 per pound on the London Metals Exchange and reached a new high of $5.22 per pound on the US COMEX exchange in March. US tariff policy has heavily influenced sentiment on the global economy in recent weeks, but the facts are that copper demand remains strong globally and benefits from the secular trends of major new investments in power infrastructure, technology, decarbonization, and transportation. The US remains strong, supported by rising demand for electrical power, and we are seeing improving demand trends in China, which has been particularly strong year-to-date, and also green shoots in Europe. The fundamentals of the copper market are among the most compelling of any commodity. While macro sentiment impacts short-term pricing, we recognize that. Market analysts expect a tight market in 2025 and are projecting demand growth to outpace available supplies as we go forward. Freeport is in a great position to increase volumes in the coming years to meet rising demand. We will talk about on Slide six, the US copper pricing and the premiums currently priced into the US copper market. We present information on regional premiums and the ongoing US investment in copper, considering a potential tariff. In late February, the Trump administration issued an executive order identifying copper as a critical material and instructing the Secretary of Commerce to conduct an investigation into the copper market and the impact of imports on national security. The US currently imports approximately half of its copper requirements. The domestic supplies in the US, the rest of them are majority produced by Freeport. The investigation, which is expected to be completed by November, and potentially sooner, will also cover recommendations to provide incentives to increase domestic production and policies to strengthen the US copper supply chain, including permitting reforms. While copper is currently exempt from the new tariffs, the outcome of this investigation may lead to tariffs on imported copper, and markets have begun to price in a potential tariff, as you can see from the growing US premium. For background, the reference price for Freeport international operations utilizes the London Metals Exchange. In the US, which comprises about one-third of our copper sales, our sales contracts are based on the COMEX exchange prices. Historically, the pricing on the two exchanges has been similar. But in recent months, the US pricing has reflected market expectations for a tariff on US imports, and this premium has widened over time and is currently approximately 13% above LME. This equates to about 57¢ per pound as of yesterday, and that premium currently implies an approximate $800 million bottom-line annual financial benefit on Freeport's US copper sales. For reference, the tariff on steel and aluminum is 25% compared to the current market premium of 13% for copper. Freeport has not taken a position on whether or not copper tariffs should be imposed, but we have highlighted in our public comment submission some of the items for consideration, including the potential broader impact of tariffs on the economy, inflation, and where US domestic copper production is currently placed on a global cost curve. We also highlighted in our comments the importance of Freeport to US copper supply, the critical role we play in supplying 70% of the US domestically sourced refined copper, and the opportunity we have at Freeport for US brownfield growth in copper supplies. In the next slide, we highlight Freeport as America's copper champion. We appreciate the administration's recognition of copper as a critical mineral and the actions by the US government to provide permitting reforms and incentives to boost domestic production. Freeport is an iconic American copper producer and is by far the largest contributor to the US copper market, with an established and successful franchise dating back to the late 1800s. We employ a large workforce of 39,000 people, including contractors, mostly in rural communities in the US, and have earned the trust of the communities where we operate in the Southwestern United States and with our US copper customers, some of whom have placed trust in us to source all of their copper requirements. Our operations in the United States are fully integrated, with mines and smelting and refining facilities, and innovative leach processes that efficiently produce refined cathode. Freeport is well-positioned to grow in the US, as you will see from our pipeline. We have a sizable resource position and brownfield expansion opportunities. Turning to our global operations, for the first quarter on Slide eight, we will provide some operating highlights by geographic region. Starting with the US, we continue to make progress on enhancing efficiencies and improving costs and margins. Our operating teams are benefiting from data analytics to identify the highest value opportunity for efficiency gains and to assist in decision-making to eliminate efficiency losses. On the cost front, improved retention of our workforce has allowed us to rebuild skills within our workforce and lower reliance on more expensive contractors. As an example, contractor hours at Morenci, our largest mine in the US, are down about 20% over the last few quarters. As we look forward, we expect production in the US to increase in 2025 compared to 2024 and also to increase further in 2026 and 2027. Absent changes in commodity-based input costs, we are targeting unit costs to trend lower each year over this three-year period. Our autonomous haul truck conversion at Baghdad is going very well. That is going to allow us to test the potential for this application for potential use at other locations in the US. At Baghdad, we have already converted 12 of 33 autonomous trucks. We have them in service now, and we expect to have the balance in service over the next several months. We are confident in further scaling in our innovative leach program. We have several projects underway using existing technologies to achieve our targeted 40% increase in run rate to 300 million pounds per annum of low-cost copper by year-end 2025. We are also integrating new technology and automation to optimize performance in our basic mining functions. We believe there is significant potential for value creation through meaningful cost reduction, which would enhance margins and expand reserves from known mineralization, which is currently economically limited under our current reserve pricing. We can do this through further using and integrating new technology into our basic operations. We are also continuing to follow and pursue the potential for US legislation to recognize copper as a critical mineral and bring eligibility consistent with other critical minerals for a potential tax credit of 10% of our operating costs in the US. Turning to South America, the team at our Cerro Verde operation posted another solid quarter with improved mill rates, better recoveries, and higher molybdenum volumes that helped us mitigate the impact of lower ore grades. Our unit net cash costs in the quarter were 20¢ per pound lower than the comparable quarter last year. At El Abra in Chile, we are positive about testing an initiative to add heat to our leach process, which has promised to provide incremental near-term production. We continue to advance a major project at El Abra in partnership with Codelco, which would capitalize on a large resource we have defined and bring substantial scale and operating efficiencies to this high-class mine. In Indonesia, as we have already discussed, our operating rates in the quarter were impacted by maintenance on one of our SAG mills, which resulted in a 25% reduction in mill rates during the quarter. The maintenance work was timed to coincide with our work to extend our export permit, which was received in mid-March. As we look forward, we expect strong production from Grasberg in the balance of the year, with 2025 annual sales of 1.6 billion pounds of copper and 1.6 million ounces of gold at a net cash credit of 47¢ per pound, meaning our gold revenues will more than offset all of our production costs. The team has made outstanding progress in completing the smelter repairs, and as I mentioned, we are a bit ahead of schedule. The Precious Metals refinery, as Richard referenced, was inaugurated by the president of Indonesia in March and is ramping up to full capacity. The successful completion of these projects positions us to advance approval for the extension of our operating rights in the second half of this year. Turning to our growth, which we are really excited about, as we look forward, we see a world that will require additional copper supplies to support energy infrastructure, new technologies, and more advanced societies. Freeport is really well-positioned with an extensive copper resource position and a broad range of projects in various stages of development. These initiatives, as you can see from this chart on slide nine, total 2.5 billion pounds of copper per annum, and those can be developed from Freeport's known resources in jurisdictions where we have established history and experience. Our projects in Indonesia also have the benefit of high gold content that goes along with the copper, so they really are supercharged from an economic standpoint. Because all of these projects are brownfield in nature, we benefit from leveraging existing infrastructure, experienced workforces, and relationships with key stakeholders to move more quickly with less risk than a greenfield project. In the US, these projects include the incremental leach volumes of 600 million pounds per annum. As I mentioned, we have already hit the initial target of 200 and are going to 800 million pounds per annum over the next three to five years. The Baghdad expansion, which we are currently evaluating, and potential expansion to double the production in the Safford Lone Star District, which is an enormous district with enormous amounts of copper that we are excited about the future on. In South America, we and our partner, Codelco, are planning a major expansion at El Abra through the addition of a new concentrator, which would provide 750 million pounds of incremental copper per annum. We are in the process of completing a permit application, and we expect to file the application by the end of this year. In Indonesia, after successfully developing several world-class underground ore bodies, we are now progressing development of the Kucing Liar development, and we expect to commence production here by the end of this decade by 2030. We are also conducting additional exploration below our existing Deep MLZ ore body, and we expect that an extension of our operating rights beyond 2041 will set us up for additional long-term development options in this highly attractive district. Our objective is to move quickly to define the opportunities and value potential and allocate capital on a risk-reward basis to provide profitable growth options for the future. There are additional details on these projects on Slide 25 in the reference materials. As usual, we will continue to be disciplined in our approach, targeting opportunities that enhance long-term value. Several of these projects are in advanced stages, particularly the leach initiative, where we can have near-term impacts. We are providing near-term low-cost incremental pounds, and we also have medium-term opportunities and longer-term optionality in our portfolio. I would now like to ask Maree Robertson to review our financial outlook, and then we will take your questions. Maree?

Thanks, Kathleen. Just moving to Slide 10, we show our three-year outlook for sales volumes of copper, gold, and molybdenum. Our guidance for the three-year period is consistent with our previous estimate. For 2025, the US represents 33% of our consolidated copper sales, South America around 27%, and Indonesia approximately 40%. As Kathleen mentioned earlier, continued success in our leaching initiative would provide upside to these estimates. On slide 22 of the reference materials, we provide quarterly forecasts, which show sales in the balance of the year are substantially higher than first-quarter levels. Our current estimate for unit net unit cost for the full year 2025, using $3,000 for gold and $20 for moly, is approximately $1.50 per pound, lower than our previous guidance of $1.60 per pound. Unit costs in the balance of the year reflect improved operating rates compared with the first quarter. The details of the costs by region are presented on Slide 21 in the reference materials. Moving to Slide 11, putting together our projected volumes and cost estimates, we show modeled results for EBITDA and cash flow at various copper prices, ranging from $4 per pound to $5 per pound. These modeled results use the average of 2026 and 2027 with current volume and cost estimates and holding gold flat at $3,000 per ounce and platinum flat at $20 per pound. Annual EBITDA would range from over $11 billion per annum at $4 copper to over $15 billion per annum at $5 copper, with operating cash flows ranging from $8 billion per year at $4 to over $11 billion at $5 copper. These estimates assume no premium on our US copper asset copper sales. If we apply the current premium of 13%, our EBITDA and operating cash flows would increase by approximately $800 million per annum. We show sensitivities to various commodities on the right. You will note we are highly leveraged to copper prices, with each 10¢ per pound change equating to approximately $425 million in annual EBITDA. We will also benefit from improving gold prices, with each $100 per ounce change in price approximating $150 million in annual EBITDA. With our long-life reserves and large-scale production, we are well-positioned to generate substantial cash flow to fund future organic growth and cash returns under our performance-based payout framework. Slide 12 shows our current forecast for capital expenditures in 2025 and 2026. Again, capital expenditures are similar to our previous guidance, expected to approximate $4.4 billion in 2025 and 2026. The discretionary project approximated $1 billion in 2024 and is expected to approximate $1.617 billion per year in 2025 and 2026, with roughly 50% related to the Kucing Liar development and the LNG project at Grasberg. The balance includes acceleration of tailings and other infrastructure to Baghdad expansion, the Atlantic Copper Circular Project, which is expected to be completed in the first half of 2026, and allocated capitalized interest. The discretionary cap category reflects the capital investments we are making in new value-enhancing projects that, under our financial policy, are funded with the 50% of available cash that is not distributed. These projects, which are detailed on slide 30 in the reference materials, will benefit our results in the future. We will continue to be disciplined in allocating capital to projects that enhance our position and generate attractive returns. This is consistent with our track record of efficient capital allocation and value-driven approach. On slide 13, we reiterate the financial policy priorities centered on a strong balance sheet, cash returns to shareholders, and investments in value-enhancing growth projects. Our balance sheet is solid with investment-grade ratings, solid credit metrics, and flexibility within our debt targets to execute on our projects. We do not have any significant debt maturities until 2027. In addition to paying our first-quarter base and variable dividend, we have repurchased $80 million of common stock in the open market year-to-date. In total, we have distributed $5 billion to shareholders through dividends and share purchases since adopting our financial policy of returning 50% of excess cash flow in 2021. We have an attractive future long-term portfolio, as we have previously discussed, that will enable us to continue to build long-term value for shareholders with the remaining 50%. We actively monitor current market conditions and carefully manage the timing of our projects to ensure our financial flexibility remains strong. Our global team is focused on driving value in our business, committed to strong execution of our plans, providing cash to invest in profitable growth, and returning cash to shareholders. Just on Slide 14, concluding today's presentation, Freeport's large scale, our proven producing assets, actionable low-risk growth, leadership in the global copper industry, significant exposure to a rising gold price, and advantageous US footprint all provide a strong foundation for the future. Thanks for your attention. I will now hand it back to Kathleen, and we will take your questions.

Thank you, Maree. We are ready for questions.

Ladies and gentlemen, we will now begin the question and answer session. If your question has been answered or you wish to remove yourself from the queue, please press 1 again. If you are using a speakerphone, please pick up your handset before pressing the numbers. We ask that you limit your questions to one. If you have additional questions, please return to the queue. The first question comes from Carlos De Alba with Morgan Stanley. Your line is open.

Yes. Good morning, everyone. Thank you very much. Kathleen, I wanted to check with you what is the expected cost reduction or efficiency gains in terms of volumes that you would expect for the Baghdad autonomous haulage system when it is fully in place and running at capacity. A range would be quite useful just to get a sense of the potential lift in results.

Thank you, Carlos. We are really excited about what the autonomous haulage will allow us to do at Baghdad. This was one of the sites that we had struggled with over the pandemic period in keeping staffing levels. With high rates of turnover there, in this very remote location, it affected our cost structure and our efficiencies. What we see here is with this project done, it will reduce the number of people we need to hire for an expansion. It will leverage us to be able to get consistent and safe results without having to hire people. The project itself has an attractive rate of return on its face. The capital cost that we are incurring for that project, and we have some details on in the back reference materials, but the capital cost itself to convert these haul trucks is in the $80 million range. The project itself will produce a good rate of return and allow us, again, leverage to expand that operation in the future. It is strategic for us. It is also very strategic from the perspective of allowing us potentially to adopt this at other sites within the US. It could have meaningful impacts for us. In general, Carlos, in terms of the targets for our cash costs in the US, we have a target to get to within the 2027 time frame to get to an average cost of in the $2.50 range. We are currently around $3. We have projects underway now that will allow us to bring our costs in the US down. We are targeting over the next couple of years to get to, on average, $2.50 per pound, and we are not going to stop there. A big focus of ours in the US is on bringing down that unit cost to look more like it does in South America, even though we have lower grades in the US.

Thank you very much, Kathleen.

Your next question comes from the line of Liam Fitzpatrick with Deutsche Bank. Your line is open.

Good morning, Kathleen. My question is on Indonesia and the new smelter and how that links into the concentrate export permit. Are you aiming to proactively extend the allowance to export concentrate beyond the midyear point? Or could we again see a situation where there are delays to shipments in Q3? And then linked to that, can you give any sort of color or guidance on how long you expect the new smelter to take to ramp up towards full capacity? Thank you.

Thank you, Liam. I am going to let Corey talk about the smelter ramp-up, Corey Stevens, and he is over there right now. In terms of the first question, on our sales forecast, we have enough quota within the approved level that we got in March to meet our sales targets for this year. We are assuming that we export through the September time frame of the license, and then in the fourth quarter, we would be using our existing smelters, not just the new smelter at Manyard, but also the established smelter we have at PT Smelting. Within our guidance that we show, that's within our permit limits. If we need to get more flexibility, we will go in and speak with the government about it. But at this point in time, we have sufficient room under our permit to meet our sales targets for this year. The work we are doing on the startup is comprehensive. We are fortunate that Freeport as an organization has a lot of experience with smelters. Of course, we have the smelter in Huelva, Spain, that we have operated for some time. We have a smelter here in the US as well. Then we have, in partnership with Mitsubishi, the smelter in Indonesia. We are calling on resources, internal resources, and external resources, to plan an efficient startup. Corey, if you want to add some color on our startup plans and how this will play out. Smelters are complex. We understand that, and that's why we have done so much preplanning. They are complex to start up, and we recognize that.

Sure. The mechanical repairs are essentially complete, and pre-commissioning and commissioning activities in the area where the fire was are well underway. In the remainder of the facility, the teams have been refining their operating practices and going through drills, and we have been operating those facilities, those other unit operations, in preparation to combine everything with the main smelter coming online. Both furnaces are hot, the boilers are ready, the teams have been practicing. We have maintenance teams and a number of support from operations and contractors with experience. In the May time frame, we are going to start the process up and will essentially ramp up to 100% capacity over a six-month period and plan to run 2026 at full capacity throughout.

Okay. That's great to hear. Thank you.

Your next question comes from the line of Katja Jancic with BMO Capital Markets. Your line is open.

Hi. Thank you for taking my question. Maybe on the potential Baghdad expansion, if I am not mistaken, the feasibility study was completed in '23. Is the $3.5 billion CapEx still attainable in this environment, especially with tariffs and other inflationary pressures?

We are reviewing that now, and we do that with all of our projects to keep them fresh. We are going through a process to review all the economics associated with the project, capital and operating costs. That will be part of the decision-making that we make until the end of this year. We are wanting to get the autonomous trucks in place because that will allow us to manage the workforce that we have now and, as I said before, not have to rely on a big hiring program and less experienced people. That's an important part of it. We are also doing some infrastructure work. We have boosted housing, doing infrastructure work on our tailings facilities to put us in a position so that when we do make the decision, we can do it in a derisked fashion, in a more fast-track fashion. We want to make sure that the economics are robust. This is an option for us. The reserves are there, and this will allow us to bring forward those values and bring forward reserves. But it's not something we have to do, and we can assess the right timing. We want to bring it to market at a time when we can do it efficiently and generate the return. That will be part of our analysis, Katja, as we go through the balance of this year. To your point, to better understand the tariffs as well.

Thanks, Kathleen.

Your next question comes from the line of Timna Tanners with Wolfe Research. Your line is open.

Hey. Good morning. I wanted to ask a bigger picture question if I could. In light of the different levels of support being provided to the copper industry from the US government, are there any measures that you can take to accelerate some of these efforts? Do you think about adding smelting? The world is oversupplied clearly, but not in the US. Any update on the 45x benefits? Just like to hear about what incremental you might be able to do given new initiatives that we hear about from the Trump administration. Thanks again.

Thanks, Timna. Freeport is in a terrific position to expand its US production. We already had several things underway. As we talked about, we are fully integrated. We are producing concentrate, and those go to our smelter in Arizona. A big part of what we do in the US, as you know, is leach production where we do not need a smelter, and we can produce leach pounds very efficiently. We were already on that path to increase our leach production capacity and produce refined copper. We have innovation around leaching concentrate. We have a facility that we are expanding in the US to leach concentrates. Again, that avoids the big capital intensity of a smelter. Then potentially, longer run, we can look at potentially expanding the Miami smelter to produce more cathode. There even is a potential. One of the areas that the US is interested in is there is a lot of scrap produced in the US that ends up getting exported. We are going to look into whether Freeport can use existing infrastructure and low capital intensity projects to potentially process scrap material in the US. Of all the things out there that you hear about, Freeport really is in a good position. Because our projects are brownfield in nature, we have infrastructure, we have the workforce in the area, we have community support. I feel in many ways that Freeport is the poster child when it comes to what the US is trying to achieve in bringing back and expanding copper production in the US. We recognize that the US has some real positives in its regulatory framework, but the resources, as you are aware, are generally lower grade or more mature and generally lower grade than some of the operations internationally. That's where these incentives come in to really support not only the base production in the US but incentivize new investments and new production. That's why we are interested in the 45x potential credits where the executive order already says that copper is a critical mineral, but we need to have legislation to modify the treasury regulations to allow for copper to be listed under 45x of the IRA to be eligible for the 10% production credit. That would be very helpful. But as you know, with tax policy, there are lots of pluses and minuses and give and takes going on. We will just have to keep advocating for the benefits to the US national security of having copper produced domestically, and that's something that we will continue to work on. But Timna, we have great opportunities in the US. This Lone Star district has a huge resource. We have visions that the Lone Star Safford district could be another Morenci with both leach production and concentrate production in the future. Of course, we talked about Baghdad. We talked about our leach initiative. We are in a really good position to help the US and its objectives to bring more copper production into the US.

Okay. Thanks for the overview. We will look forward to updates from you and from the administration. Thanks again.

Your next question comes from the line of Daniel Major with UBS. Your line is open.

Hi. Thanks for taking my questions. Can I ask a question on the change in the cost guidance for North America? I noticed site production delivery costs have increased somewhat, albeit not that much. But note six in the presentation said that this excludes the impact of additional tariff costs. Can you give us a sense of what those impacts are? I think you mentioned a 5% increase in the cost of purchased inputs. How much of your cost base does that account for, and what's the upside to this number if you are unable to mitigate some of those impacts?

Thank you for the question. We did disclose in our earnings release when these tariffs came out, we began talking with our suppliers. The direct impacts that we have and where we are the vendor of record are material, and we are working to diversify our supply chains to mitigate those impacts. The bigger impact as we are working with our suppliers is potentially the cost that they incur on the various components that they purchase. As you can imagine, it gets complicated because it's just not one supply chain. They have multiple supply chains that are involved. They are going through an analysis themselves to understand what the potential impacts are and what they can do to potentially diversify their sources to mitigate these impacts. When we look at our overall costs in the US, about 40% of those costs are related to labor and services that would not be subject to tariffs. It's the balance, the other piece that we applied the estimate of 5% to. When you look at the components of the potential 5% impact, the biggest driver is the 45% Chinese tariff. While the dollar amount, as we have talked with our vendors, the dollar amount of Chinese purchased components in their supply chain is not significant, the magnitude of a 45% is what adds up quickly. If that's reduced and if we can mitigate that, this tariff impact will be reduced significantly. I am confident that working with our suppliers, we can find ways to mitigate these impacts. We wanted to set up a system to really understand the various components so that when we get an attempt from a vendor to pass through something, we can confirm and verify and that we can work collaboratively with them to source products that do not have high tariffs with them. I feel confident that we can mitigate this. We all would love to see more certainty and these issues get resolved because it does impact these conversations and trade flows, etc. But I do feel confident that we can find ways to mitigate these potential impacts.

Okay. Thanks. Sorry, just a quick follow-up on the same subject. What proportion of the cost base is exposed to energy, particularly oil? Obviously, we are seeing some benefit there.

We have not, we basically used the same oil price assumption in our guidance that we used at the start of the year. You are right to say that there is benefit. We purchase about 100 million gallons of diesel in the US. Right now, the price is probably 20¢ a gallon or so less than what we assumed in our original forecast going into the quarter.

Great. Thanks a lot.

Your next question comes from the line of Chris LaFemina with Jefferies. Your line is open.

Hi. Thanks, operator. Hi, Kathleen, Richard, Maree. Hope you are doing well.

Hi, Chris.

Just wanted to ask on the buyback. You have been running a net debt level that's well below your targeted net debt threshold, and you are entering this period now where free cash flow should materially improve. I mean, you have this COMEX premium, you have high gold prices, you are going to have rising volumes, price in the US coming down. I mean, everything is heading in the right direction, and cash flow should get very strong. Your share price has been kind of a victim of the macro, and it's been relatively weak. It's recovering a little bit now, but still at a low level. Back when your stock was in the fifties and free cash flow was zero, it made sense to not be maybe not be really accelerating the pace of the buybacks. But I would think where we are today and where you are heading, the attractiveness of repurchasing your shares really almost cannot be beat. Especially when you consider, if the focus is on kind of pivoting to growth, you can shrink your share count, you can grow your volumes on a per-share basis in an accretive way, and you can use free cash flow to do that. Maintain a very strong balance sheet, which is a pretty compelling combination of factors. Just really wondering how you think about potentially ramping up the buyback if market conditions continue to be as they are? I mean, back in the thirties, do you just buy back more aggressively now? Or do you want to save money for the capital projects you have in the pipeline? Thank you.

Thank you for that, Chris. We are balancing all those things, but we agree with everything you just said. Particularly as we go through the balance of this year, in the first quarter, we had this maintenance and some timing in the numbers. But as we go through the balance of the year, our cash flow should improve. You have highlighted the potential premium. If that continues, that will allow us to have more free cash flow. That goes right to the bottom line. We see the disconnect in the long-term outlook for the company in terms of what the value of these assets is relative to how our stock has been performed relative to these macro issues. We really want to be aggressive about the buyback, but we also want to make sure we are balancing our objectives to maintain a strong balance sheet and to pursue our growth plan. We are going to be balancing all that. We have an established policy to direct free cash flows to shareholder returns. As free cash flows increase, that will give us this opportunity. But in general, everything you said, we agree with. Richard, I do not know if you want to add anything to those comments.

No, Chris. I will just say I am totally aligned with what you said. As chairman of the company and a shareholder, I agree totally with that. We are going to be, history has taught us to be disciplined, but we are in such good shape. As the cash flows increase, we will talk with our board, and I believe we will have great support for buying more shares back.

That's great. Thank you for that.

Our next question comes from Bob Brackett with Bernstein Research. Your line is open.

Thanks. Good morning. Returning back to Baghdad to exit expansion. If I think about the discretionary CapEx being put into Baghdad two x expansion this year, it's almost half a billion. You have slated a few hundred million, 300 million perhaps next year. If the price of admission is 3.5 billion and you have effectively sunk approaching 800 million, the investment decision is always going to be a money-forward decision. Doesn't that just make it more and more obvious that Baghdad two x is going to move forward?

One thing to keep in mind on the money we are spending right now at Baghdad, a good bit of that is money that we would have to spend in any case in the future to build up the infrastructure for tailings. At some point, you run out of tailings storage, and you need the storage there that we would need over time. The money that we are spending now does not commit us to the project. It just accelerates when we would have otherwise had to spend the money. It's really a low-risk investment that we are making to put us in a position that when the project is ready to go, when the decision is made, we do not have to spend the money, and we do not have to take the time to put the starter dam in. This funding that we are doing now is not part of the 3.5. There may be some small amounts that are part of the 3.5, but this funding is principally related to tailings that we would have to do anyway down the road. We are calling it discretionary because we do not have to do it now. If we decided tomorrow not to move forward right now with Baghdad, we would probably defer the spending on the tailings infrastructure.

Very clear. Thanks for that.

Your next question comes from the line of Lawson Winder with Bank of America Securities. Your line is open.

Thank you very much, operator. Richard, Kathleen, and Maree, thank you for fitting me in. Just thinking about the US policy environment and the fact that Freeport is by far the largest player in the United States, and then looking at it from a merger and acquisition overlay point of view, does it make sense for Freeport to potentially be accumulating assets in the US today? Thank you.

We always look, Lawson. We always look at opportunities. We have a very sizable resource position in the US. We have the leach stockpiles, which is a huge resource. Then we additionally have very significant undeveloped resources in our footprint. We have a very long-term pipeline in the US, but if there are opportunities for synergies or things that we could enhance our position, we are certainly interested in looking at those things. There is a lot more activity in the US, a lot more potential projects in the US than there has been in the past. Many of those do not have smelters. While people have historically thought it's not great to have to invest money in smelters, we already have the smelter. We already have the tank house capacity to make refined copper. We already have the concentrate leach facilities that are expandable. We have a lot of things that could provide potential synergies. We will continue to look, but we already have a very strong position in the US.

Okay. Great. Thank you so much.

Our next question comes from the line of Brian MacArthur with Raymond James. Your line is open.

You talked about earlier in Indonesia how you have permits to September 30, and you can use the smelter in the fourth quarter to meet your shipment this year. You also took down your guidance for cost this year. Was that just the gold price being higher, or did you make an assumption that the 7.5% export tax went away in the fourth quarter in Indonesia because the smelter is up and running, or should I think of that duty going away as an upside as I go into 2026, or how do you see that developing?

In terms of our Indonesian costs for the year, we had projected a net credit of 27¢, and now it's 47. Most of that is related to the change in byproduct credits. That's what most of it's related to. We only pay a duty on sales that are exported or concentrate sales. In the fourth quarter, we do not have projected to pay a duty in the fourth quarter because we are using our internal smelters. The timing may have changed from our last update, but as a whole, we only, in our previous estimates, only included duties for what we were exporting.

I want to say, Corey and his team have just done an outstanding job. It was unfortunate we had that fire. It was a force majeure event. We had a lot of uncertainties going into dealing with the repairs. These guys have just done an incredible job of making the progress they have made to date.

Thanks very much, Richard and Kathleen.

Our last question comes from the line of Bill Peterson with JPMorgan. Your line is open.

Yeah. Hi. Good morning, team, and thanks for speaking to me. I might have missed it, but on leaching, you are reaching your sustained 200 million per year. I guess you saw a modest decline in the first quarter or quarter on quarter. Was this decline just kind of typical variability? Maybe more importantly, looking ahead, what are the key areas to improve to reach your 75 million pounds quarterly rate exiting the year? How should we think about the trajectory?

In terms of getting to the 300 million pounds per year run rate, we have several projects that are underway. These do not require new technologies. This is the scaling effort of essentially scaling up what we are already doing. Some examples of that include what we call leach everywhere, where we have already identified areas within the stockpile that were difficult to get to physically. We have come up with a way to lay the irrigation lines using helicopters that we assemble along very long football fields of irrigation lines, and a helicopter goes and places these irrigation lines in areas that are very hard to get to. We are increasing the number of helicopter trips that we were doing previously. That was part of the reason why some of the projects that we had in the first quarter, we came in very close to what we thought, but we probably could have produced a little bit more if our projects had been on schedule. By the end of the year, we are going to have more runs of helicopters, and not just at Morenci, we are starting this technique at other sites. The other thing that we have had success with is what we call deep raffinate drilling, where instead of just letting the solutions drip from irrigation lines at the top of the stockpile, we are actually drilling and putting solution, targeted solution, at strategic places within the stockpile that our data analytics sensors have told us would benefit from more direct application of solutions. We and some third parties have figured out a way to scale the deep raffinate drilling, taking some pages from what's being used in other industries, we are able to apply this deep drilling at a bigger scale. We have several of those in place now that will boost production in the future. We are also, and this is separate from getting to the 300, but we also have some trials going on with new additives that we have successfully tested in a lab and are doing it at scale in some of those strategic stockpiles. We have an additive test going on now, and the results of that will be very helpful for us to guide our future. The other thing that we are doing that will help us as we look into 2026 and beyond to get to the 400 level is heat trials, where we started, it's been proven that the hotter the temperature within these stockpiles, the better the recovery of copper. We started with insulating the stockpiles to retain heat. Now we have a project to actually heat the raffinate injection, the solution that's going into the stockpiles. We have a project at El Abra that we expect will allow us to start testing heat there in 2026. Then we have opportunities, big opportunities at Morenci. One of the heat sources that we are pursuing at Morenci is geothermal steam, which would be very low cost. There are some new technologies that we are pursuing that would help us go from 300 beyond. But to get to 300, we feel confident we can do it with the existing technologies, just doing it at scale.

Yes. Thanks. If I can follow up on the leaching and also the last part of your answer. In terms of the supply chain, both the raw materials, additives, equipment, heating sources, are you using non-China sources for these, I guess, currently two projects? On the path to 800, are you able to achieve that with a non-China supply chain? More to the point, can you achieve this with a US-based supply chain?

We are testing a variety of additives. That's a big point of what we are looking at, does the additive work, number one, and is there a robust supply chain for that additive? To answer your question, what we have identified does not rely on China. There is some of the product that's produced in the US. Some of the technology is not necessarily US technology, but part of what we are doing is making sure there's a supply chain for this additive. There are efficient ways to recycle the additive as well. You minimize the use of it. There are a number of things going on, but we are really excited, Bill, about the potential here. There's no better company that can take advantage of this given we have 40 billion pounds of copper sitting in stockpiles that we thought was waste before. Now we are very excited about essentially having a new mine in the US, a new low-cost mine in the US, producing 800 million pounds a year, essentially. It's very, very exciting.

Oh, terrific. Thanks again, and nice job in the quarter. We execution.

Now we will turn the call over to management for any closing remarks.

Thank you, everyone, for your participation, and we look forward to continuing to keep you updated. If you have any follow-ups, David is available to address them. Thanks so much for your attention and interest.

Thank you all.

Ladies and gentlemen, that concludes our call for today. Thank you for your participation. You may now disconnect.