Freeport-McMoRan to redeem gold-linked preferreds (June 20, 2003)

Freeport-McMoRan Copper & Gold (FCX-N) is proceeding with the forcedredemption, on Aug. 1, 2003, of its gold-denominated preferred B stock,which trades on the New York Stock Exchange using the ticker FCXPRB.

There are currently 6.0 million depositary shares of preferred B sharesoutstanding, and each will be redeemed for a cash amount equal to 0.10 timesthe arithmetic average of the London P.M. gold fix on each of the 20 tradingdays ending on July 30, 2003, plus accrued and unpaid dividends scheduled tobe paid on August 1, 2003.

The shares have been paid a quarterly dividend equal to 0.000875 oz. ofgold, or about US$1.16 annually, for a healthy yield of 3.29% per annum.

The preferred B shares last traded at US$35.31 apiece, for a marketcapitalization of US$212 million.

The New Orleans based copper and gold mining giant also has three moreseries of preferred shares, named A, C and D.

The preferred A shares last traded at US$24.49, for a marketcapitalization of US$343 million based on 14 million outstanding shares.

They have an indicated annual dividend of US$1.75, for a whopping 7.13%dividend yield.

These shares can be manditorially redeemed at US$25 apiece in return forcash, common shares, or a combination of both, at the company’s discretion.

The preferred C shares are a second class of gold-denominated shares,being paid a cash quarterly dividend equal to 0.0008125 oz. gold. –generating an indicated annual dividend of US$1.07, or 2.87% annually.

With 4.3 million shares outstanding, the preferred C shares have a marketcap of US$156 million, based on the recent trading price of US$36.20.

The preferred C series is manditorially redeemable in February 2006 for acash value of 0.1 oz. gold.

The silver-denominated preferred D shares are entitled to a sliding-scalequarterly dividend equal to less than 0.0257813 oz. silver, for an indicatedannual dividend of US$0.37 (3.94% annually).

The D shares last traded at US$9.38, for a market cap of US$45 million,based on 4.8 million outstanding.

Just over a year ago, Freeport combined its A and B classes of commonshares into one class of common shares, of which there are now 145.4 millionoutstanding, for a market cap of US$3.54 billion.

In the most recent quarter, Freeport enjoyed a net income applicable tocommon shareholders of US$49.2 million on revenues of US$524.6 million.

The common shares have been on a tear of late, hitting another 52-weekhigh of US$25.70 on June 18, and closing at US$24.40 on June 20.