Zuojia (Zachary) Chen

Vignesh MuraliKuralay Seitalina

Yili (Eric) Xu

Nov. 5th, 2009

Company OverviewAn international mining company in North America

with reserves of copper, gold and molybdenumLargest and lowest cost copper producers in the USprincipal asset is the Grasberg minerals district in

Indonesia, which contains the largest single gold reserve

World presencetwo segments: mining and exploration; smelting

and refining

http://globalbb.onesource.com/Web/Reports/ReportMainIndustry.aspx?SicCodeID=220542&Report=ALLMARKETRESEARCHREPORTS&Process=IP&Type=GetReport&FileFormat=PDF&ReportID=62261&FileName=0199-2106-2007.pdf&VendorName=Datamonitor

Industrial AnalysisThe 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%

http://globalbb.onesource.com/Web/Reports/ReportMainIndustry.aspx?SicCodeID=220542&Report=ALLMARKETRESEARCHREPORTS&Process=IP&Type=GetReport&FileFormat=PDF&ReportID=62261&FileName=0199-2106-2007.pdf&VendorName=Datamonitor

CompetitorsArcelor 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

http://globalbb.onesource.com/web/Reports/ReportMain.aspx?KeyID=748084&Process=CP&Report=RATIOCOMPShttp://globalbb.onesource.com/web/Reports/ReportMain.aspx?KeyID=4520&Process=CP&Report=RATIOCOMPShttp://finance.yahoo.com/q/ks?s=RTP

Comparable Ratio Analysis

SWOTStrengths: 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

http://globalbb.onesource.com/SharedScripts/Reports/FetchAR.asp?Process=CP&DocID=15363652&file=file.pdf

5-yr CAGR: 65.5%Expertise in both

technology and production methods

Financial Statement AnalysisProfitability

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

1.00 to 0.60 0.60 to 0.20 0.20 to -0.20 -0.20 to -0.60 -0.60 to -1.00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

1 Ameren Corporation

2 American Eagle Outfitters

3 Diamond Offshore Drilling, Inc.

4 First Industrial Realty Trust

5 Jack Henry & Associates

6 Kimberly-Clark Corporation

7 MEMC Electronic Materials

8 McDonald's Corporation

9 Stericycle, Inc.

10 Freeport-McMoRan Copper & Gold B

11

12

13

14

15

-0.08

0.23 0.15

0.56 0.38 0.28

0.40 0.18 -0.02 0.57

0.51 0.27 0.44 0.58 0.29

0.15 0.18 0.54 0.15 0.05 0.11

0.58 0.09 0.14 0.32 0.36 0.30 0.22

0.22 0.21 0.14 0.11 0.07 0.31 0.01 0.40

0.13 0.36 0.60 0.22 0.17 0.20 0.65 0.26 0.08

Date: 11/1/2006 to 10/31/2009

Source: Morningstar Direct

Correlation within present portfolio

RecommendationPrice per share when we started - $ 60 Price per share now - $ 77Price 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