Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Second Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Ms. Kathleen Quirk, Executive Vice President and Chief Financial Officer. Please go ahead, ma'am.

Thank you, and good morning, everyone. Welcome to our conference call. Earlier this morning, we reported our second quarter 2020 operating and financial results. And a copy of the press release and slides are available on our website at fcx.com. Our conference call today is being broadcast live on the Internet. And anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today’s call and a replay of the webcast will be available on our website later today. Before we begin our comments, we'd like to remind everyone that today’s press release and certain of our comments on the call include forward-looking statements, and actual results may differ materially. We’d like to refer everyone to the cautionary language included in our press release and presentation materials and to the Risk Factors described in our 2019 Form 10-K and our quarterly report on Form 10-Q, each filed with the SEC as updated by FCX's subsequent filings with the SEC. On the call today is Richard Adkerson, Vice Chairman and Chief Executive Officer; Red Conger is on the call, as well as Mark Johnson; Steve Higgins, Rick Coleman and Mike Kendrick . I'll start by briefly summarizing the financial results and then turn the call over to Richard who will be going through the presentation materials. As usual, after our prepared remarks, we'll open the call up for questions. Today FCX reported net income attributable to common stock of $53 million, or $0.03 per share in the second quarter of 2020. The results included net credits of $9 million or roughly $0.01 per share, primarily associated with favorable metals inventory adjustments and an income tax credit,…

Okay. Thank you, Kathleen. And good morning to each of you, and we appreciate you participating in our call today. Hope you and your families are staying well and safe. This has been a very trying time over the past four months. Work has been intense. Life is challenging. I'm pleased that our team has shown the discipline preserver. [Ph] We faced lots of problems, but I want to say that this quarterly report as we previewed earlier is really a good news for our Freeport team and the great work we’ve been doing. I'll refer to the slides and going to slide 3. At Freeport, we are of course continuing to prioritize the health and safety of our workers, and we're also working hard to support communities where we operate as we serve our customers with their ongoing requirements for copper. In late April, we laid out a comprehensive plan to share with our stakeholders at that time to describe how we were going to manage the COVID-19 health and economic issues, keep our people safe and how we were going to safeguard our business to protect the value of our assets for what we are convinced will be a very-positive long-term future. Since that time, over the past three months, I've been extremely proud of our Freeport team for the way they responded to this plan and this crisis in a very short period, making tough decisions during the height of this unprecedented crisis, and more importantly, how our team is executing these plans safely with a spirit of commitment and cooperation. We have had a real sense of urgency in implementing these plans. We moved very quickly to reduce costs and capital spending. And you can see this in our second quarter results and our annual guidance…

Great. Thanks, Richard. And I'll just briefly review our financial outlook, beginning on slide 17, and then we'll take your questions. On slide 17, we're summarizing our sales outlook for 2020 through 2022. As Richard indicated, our global team is performing at a high level. We've increased our 2020 sales outlook by about 60 million pounds of copper and 50,000 ounces of gold, reflecting the strong second quarter performance. As reflected in the charts, our sales volumes estimates are expected to grow by over 20% in 2021 and 30% in 2022, compared to 2020 levels. Notably, volumes in 2022 are expected to increase by nearly 1 billion pounds of copper from 2020 levels. This reflects the projected addition of volumes from Grasberg as we move toward design capacity and the increased Cerro Verde volumes as we continue to restore full production levels. Our gold volumes, as I said, in 2020, are slightly above our prior estimates and are similar to the guidance that we provided for 2021 and 2022. For moly, we've adjusted the sales outlook slightly to better match our supply with current market conditions. We show on the next slide, slide 18, our volumes by quarter. And as you'll see, we're expecting a strong second half with sales increasing throughout the year. And you'll know, by the fourth quarter, we're very close to our 2021 run rate for annual volumes. Our teams remain very-focused on executing the plan safely and finishing the year strong. Turning to costs on the next slide, slide 19. You can see, we moved very quickly in March and April to adjust our cost structure. We modified our mine plans to reduce mining rates and to reduce higher cost production, and we successfully implemented a series of cost savings initiatives to drive long-term benefits.…

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instruction] Our first question will come from the line of David Gagliano with BMO Capital Markets.

You’ve covered a lot of it in the prepared remarks. But, I did just want to try and talk a little bit more on the capital return policy. Obviously, strong free cash flow generation expected over the next six quarters, net debt metrics flow one times. Is there a target of average, leverage metrics over the cycle? And from a timing perspective, when should investors start thinking about getting some of that cash back?

So, Dave, we've always approached those questions not from the standpoint of developing any particular financial metrics, but assessing commodity markets cash flows and where we stand. We will want to reduce our debt from the current levels. We were doing that -- on a track to do that before COVID. And so, as these cash flows recover, and Kathleen talks about capital spending going down, we will have much higher volumes and the prospects for higher copper prices will have opportunities in the relative near-term, beginning in 2020, by the end of 2021, to achieve that goal of reducing debt going forward. Now, I want to compliment Kathleen and her team for the actions they have been taken over the past 10 months or so. We've had three bond offerings now that have been very successful at rates that are really attractive considering the fact that we are just beyond being an investment grade, still we expect someday to get back to the investment grade. But, now, we spread out our maturities. We work with flexibility of the bank group, so we can achieve all that. So, I can't give you anything other than, if this world unfolds like we hope it will and expect it to the very near-future, we're going to be able to return paying dividends, and looking at the possibility of buying stock back, depending on how the equity market reacts to our improved situation. I quite frankly expect the equity market to react positively in a significant way.

Okay. Thanks for that. And somewhat related on the Indonesian smelter, first of all, I'm assuming that the cash flow numbers that are -- those projected net debt numbers are not included anything for the smelter and the CapEx for smelters...

That's right.

Okay. And then, in the press release…

But, let me just say, I know you understand this, Dave, because you followed us so closely over the years. But, to be clear to everyone else, the smelter, if we go forward with the current plan, and as I said, that's under discussion, will be financed by PT-FI where we have a 49% equity interest. But, because of our shareholders agreement with the government of Indonesia and the state-owned company, MIND ID, we consolidate. So, we have a 49% interest. We finance by that entity. But, it will show up as consolidated debt because we consolidate PT-FI, which is really good for the way we present our financial statements.

Okay. That's helpful. Then just really quickly, the related question there on the Indonesian smelter. The press release talks about other alternatives in terms of deferring schedule for the projects as well as other alternatives. Can you touch a little bit more on what those other alternatives might be?

One of the positive things about this is these considerations within Indonesian government are being led by the Minister and the Ministry of State Owned Enterprises, whereas in the past, we had to deal with that on our own. We have aligned interest with the state owned enterprises. And a number of alternatives are being considered, which would be alternatives to building the smelter is presently contemplating. It's a complicated political situation, it goes without saying. But the economic benefits to the government are really strong if we were to pursue other alternatives that would require significantly less capital from PT-FI.

Okay. That's helpful. Thanks very much.

Thanks, Dave.

Your next question comes from a line of Carlos De Alba with Morgan Stanley.

Thank you very much. Good morning, everyone. So, my question is on the ramp-up in -- of Indonesia on the ground operations. I appreciate and congratulations on achieving the targets and being on the right track to deliver results there. I just got a question on slide 25. The open drawbells on a cumulative blasted basis were -- declined a little bit from the last quarter presentation, just a little bit less in 2020, 2021 and 2022 in the DMLZ; and for the GBC, it is lower in 2020 and 2021, slightly higher in 2022. So, I appreciate that these may be too specific of a question. But, given that this is probably the most important aspect of people going forward, I just wanted to get some clarification as to what drove that rise in the forecast? Thank you.

Yes. This is Kathleen. There were just minor revisions to the Deep MLZ and GBC drawbells. And you can see at the end of 2021, we had 213 for Deep MLZ and 322, and those have been reduced by 3 each. It’s not been anything significant and just slight timing differences. By the end of 2022 in Deep MLZ we’re just slightly below, but it doesn't change the ore extraction levels and it's pretty much the same plan that we've been on.

Understood. Thank you very much and good luck.

I'll just say, this is a -- as I mentioned earlier, this is a complicated operation, Mark Johnson is on the call and nobody knows that better than him. So, there are going to be ups and downs and adjustments and so forth. That's part of our everyday life out there. But, of what we set out to do and what we're doing, and we have confidence that over time, we'll do it. But, having said that, there will be things that we'll have to deal with as we have in the past. So, you'll see adjustments like this occur from time to time.

All right. Understand, Richard. Thank you very much for the color.

Okay.

Your next question will come from the line of Alex Hacking with Citi.

Yes. Good morning. Thanks, Richard and Kathleen. I just wanted to ask around the production guidance. In the last quarter, in the teeth of COVID crisis and copper prices extremely low, you cut your production guidance for this year and in particular next year where you took a couple of hundred million pounds out of South America. Is that something that gets revisited if copper prices are sustained at these levels, or those kind of revised mine plans locked in that? Thank you.

Well, they are revised mine plans that we're following. And we are not. We’re tweaking but we're not making any major adjustments to those until we have clarity in this market situation. But as clarity occurs, the plans will be adjusted, the resources are there some of this -- the cut production was a lower margin production. And if prices increase, it becomes a profitable again. So, there will be timing impacts as to how it ramps up and so forth. So, it'll be part of our future. But, as you know all too well, this is not a turn on it, turn off [ph] it thing. You ratchet back. It has impacts. To ramp it back up takes some time.

Our next question will come from the line of Chris LaFemina with Jefferies.

Hey. Good morning, Richard, Kathleen. Thank you for taking my question. For me, the most impressive data point in this earnings release was the unit cost performance in the Americas, especially on a site production and delivery cost basis where you had very substantial reductions from the first quarter to second quarter. I suppose that's a function of the changes to your operating plans. My question relates to the guidance. So, if you look at the unit cost guidance for 2020, in particular to South America, it implies that site production and delivery costs will rise in the second half of the year. And I'm wondering why that might be. And I suppose, related to that is Cerro Verde production. I think in the last quarter, you had guided to second half 2020 mill rate of 400,000 tons per day. And in the press release today, you -- in the presentation today, you are guiding to 350,000 tons per day. So I'm wondering if there is some kind of cost increase that we should expect for Cerro Verde in the second half a year. I would have thought that with the mill rate going up from the run rate in the second quarter to the second half of the year, unit costs might actually fall further, but it does not appear to be the case. So, just if you can give us some clarity as to what exactly is going on by cost outlook for the second half of the year in South America in particular.

The main change in the second half compared to the second quarter in South America relates to increasing the Cerro Verde mining rate. And during the second quarter, the mining rate was lower than what we expect. In order to get the mil rate up on a sustained basis, we'll have to begin increasing the mining rate. So, that's what that reflects in the second half. But, to your point about the cost reductions, the team has just done incredible work in bringing down costs. I mentioned the use of reduction in contract costs, contract labor costs. We've had some headwinds on some of the currency exchange rates and energy costs from the low levels that we had in the second quarter. Those have reversed a little bit. But, the discipline of driving the cost performance and balancing that with production is something that our team is very focused on. So that's, to the prior question, about increasing copper volumes, we're being very careful to make sure that we have sustainable cost savings and the cost structure before starting to ramp up. But specifically on South America the increase relates to an increase in mining rate at Cerro Verde from the second quarter levels.

Okay. Thanks for that. And so, I one other question related…

Yes. Let me come in here because I really appreciate the comments you made about the performance in Americas. And this goes back to the rationale when put we Phelps Dodge and Freeport together. But, the Americas operations are characterized with these very large, lower grade ore deposits, which is kind of the world forward in the copper industry. And Red Conger and Josh Olmsted had such experience with this, but they're doing such a great job and it's the operations in the field, the way they're managing the team, we operate all the mines that we have interest in. So, we're able to achieve synergies across the board. Our global supply chain group has done just a great job in working with our suppliers and coming in with cost. We've had a playbook for this. I mean, we've done this before and we're doing again very effectively. But, these guys really need to be recognized for dealing with this entirely different set of management challenges than you have with this high-grade mine we have in Grasberg. And I want to also recognize Kathleen and Steve Higgins, our Chief Administration Officer for what we've done with G&A. This is really significant. Our Company changed dramatically at the end of 2016 when we exited the oil and gas business, restructured our management team. But, at that year, we really only had $700 million in G&A. Now, our current expectations are that we go down to $355 million. It's been in steps over these years, but that's almost a 50% reduction in G&A over the past now four years. And this has been done as a process. We made some major steps. We had to furlough some people unfortunately. We had a incentivized early retirement, severance plan. We've reduced our head cut off and our centralized groups by something over 30%. But, this is all part of the things that have come out from this COVID initiative and they all have long-lasting benefits. As a company, we’ll never work in the same way that we did before this COVID thing change. There's going to be less office space, less meetings, less travel. We proved to ourselves that we can work effectively. We did not go back to work in Phoenix when the Governor opened the state up. The halls are and offices are empty in our headquarters. And yet, you can see the results from this core about how effectively we can operate in this kind of environment. And we're learning lessons from that that we will carry forward to the way we do business in the future.

Thank you.

Your next question comes from the line of Jatinder Goel with Exane BNP Paribas.

Good morning. Just a quick question, thinking more long term. Richard, you alluded that when market conditions allow, you can look at Lone Star expansion. And you also indicated about 5-million-ton gap emerging in the market by 2030. To me, the real constrains for you appear to be balance sheet and potentially management capacity till Grasberg is delivered. So, from a long-term perspective, you've got three things probably on your plate, Lone Star, El Abra, and Kucing Liar, which you can look after Grasberg is delivered and balance sheet is at a more normal capacity. How quickly you can move to develop either or all of those projects and what could be the order of priority? So, just trying to get some sense on your earliest possible timeline and order of priority. Thank you.

The timelines are long. One of the issues that’s so supportive of copper supply is simply how long it takes from identifying a resource to doing the feasibility studies for how it's to be developed? How it’s to permitted in processing and so forth? So, all of these things will take long time -- long term. And that is a key reason of why the outlook for copper as a commodity is so strong. The current projects that are being pursued today are not in aggregate significant to the market but are significant to companies but they're being delayed. So you ask about our situation. The Kucing Liar fits into our long term mine plan for Grasberg and that's something that we're assessing and we'll consider and look at going forward. Lone Star has the opportunity for oxide expansion, which is growing. That could be done with a limited amount of investment in new facilities. But longer term, there's a large sulphide resource, and this will be long term but it is very, very large. And that would require very, very large concentrator expansion. We have great opportunities at El Abra with our partner Codelco in Chile. We have great opportunities in the U.S. at other properties, including Bagdad, Morenci, Sierrita, our properties in New Mexico. And so, all of these things are being studied. We are going to be very-disciplined about it. First steps for cash flow will be using debt, increasing shareholder -- returns to shareholders, and then we will -- we have restrained spending in the project evaluation area, as we have across the board and our country for the current time. As the situation improves, we'll return to investing in the evaluation process. And from that, we'll come to timing schedule that you have. We don't have one right now. But we will keep you informed as this unfolds and we start spending again and getting in the process for evaluation. But, key, positive feature about Freeport is this opportunity to grow our business internally to develop resources which we get no value for currently today in our stock price. If we develop those ourselves, all that value goes to our shareholders as opposed to making an acquisition where substantial value goes to the owners of the asset being acquired. I know that's not a clear answer to your question, but it's a truthful answer to where we are.

That's very helpful. Thank you so much for the clarification.

Your next question will come from the line of Lucas Pipes with B. Riley FBR.

Hey. Good morning, everyone, and congrats on another very strong quarter. Richard, in light of current gold prices, I wondered if you have considered changing your float into foremost in copper, second in gold or something along those lines?

Lucas, gold, like copper, has its ups and downs and often gold is up when copper is down, copper’s up when gold is down. I remember years ago when gold was really high, I decided to change the name to Freeport Gold and Copper. That was before...

And you already touched on my question that is gold equities tend to trade at substantially lower discount rates. And I wondered how you're thinking about that types that changing names or changing slogans. Thank you very much, Richard.

Well, we have over the years looked at a number of strategic alternatives involving our gold asset. Back in the days, before Phelps Dodge, Freeport was a company that was two-thirds copper, one-third gold, and we really struggled to attract investors because of the different objectives of gold investors and copper objectives. And really, we found the only way we could track investors was paying extraordinarily high dividends. And for those of -- you are all too young to remember that, but that was where we were. We made the commitment to the copper business. The gold component of Grasberg is as I talked about earlier a key reason of why that asset is so fabulously attracted. And so, we're a price taker with gold. We continually review options about dealing with it. But, today we concluded that its greatest value to us is funding the cost of Grasberg. Just think about this having 1.5 billion pounds of copper was no cost or negative cost. And so, that's the role we see it playing in our Company.

Your next question comes from the line of John Tumazos with John Tumazos Very Independent Research.

Thank you very much. Congratulations on the great production, and thank you for the update on the next smelter. Some of the other companies have cut back on exploration, waste stripping, underground development or maintenance and the struggle to keep up production. Are there any of those functions that have been delayed at some of your sites such that 2022, 2023, 2024 output targets might be a little uphill or tougher to meet?

Kathleen, let me start. So, John, that's a great point. And I mean, you could look back in our history and with the -- in 2008, when the price of copper just cratered from $4 a pound at midyear to approaching $2 a pound by midway in the third, fourth quarter, we did have to make some of those changes. I mean, we parked a hundred trucks at Morenci, right Red? It was something on that order, cut production in half. And that resulted in a multiyear ramp up. So breaking our business apart from exploration, we have essentially terminated all greenfield exploration, which is pretty limited for us anyway, considering our brownfield opportunities. We continue to do work at key operations. That's not going to be a constraint for us going forward. Grasberg, we really have looked at cost hard, made some reductions, but done nothing to slow down the ramp-up of our future. So, we did defer a mill improvement, but which could have some impact, but it was only a short term. Now with prices being where they are, that's not going to be an issue. With the Americas, as I said, we've been very -- so, we're doing this in a way that preserves as much as the future as we can. But, as Kathleen illustrated with Cerro Verde, when you cut back the mill and you cut back mine rates, there is a timing issues in getting the mine rates back up to rates that feeds the mill. So, there will be some impact, but we are so mindful of that that I think we've been very effective in minimizing that impact. In any event, we're going to update this every quarter. And so, we give a lot of details. So, you'll be able to see that as we go forward.

Yes. I was just going to say, the mining rate reduction that we took in the U.S. was deliberate in terms of getting the cost structure as low as possible. And so, the metal production rates that we show in our forecast are consistent with the level of mining rates that we are deliberately working towards. It's not like a situation where we have an update at the metal forecast to coincide with the mining rates. So, our mining rate and metal forecasts are aligned. In second quarter, we did have similar mining rates for Cerro Verde because of the pandemic. That was the only one where we mined less and kept the mill as full as possible, and we'll have to ramp up mining in the second half. But, the rest of the mining operations in the U.S. really were cut back deliberately, and we've reflected that in our metal forecast. If we were to ramp back up, which our current plans assume it will start ramping back mining rates in 2022 timeframe, you would start to see metal improve over time. But, we haven't shortcutted anything. And so, all of our mining rates in metal forecasts are in line.

If I could ask one more, and thank you for the two replies. You have the footnote on the Lone Star slide that the potential mineralization is over 50 billion pounds that I guess would be at least 3 billion tons of mineralized material. In your gut, do you think that the Lone Star is more like 3 billion tons or 5 or 10 or even bigger?

Hey, Red? Red, you're on the call, right?

Yes. John, it’s a huge district. We're very excited about it as we've reported in the past, lots of drilling to be conducted, where I think we're going to find that the full district has mineralization in it, where if you look at the maps, Lone Star is miles away from those progresses where we first started mining. So, lots of drilling yet to do, but the Lone Star deposit is what we know about, it as a mineralized material that you just cited. And we'll continue to drill and explore there and update those as we get more information.

Yes. And I think John, as you know, the oxide project that we're doing plus potential expansion of oxides is really not only economic in terms of the initial investments. But, it exposes the sulfide ores and makes that opportunity -- it's a long-term opportunity, but makes that opportunity more economic as we continue to mine the oxide. So, we're very excited about the district. And it's a long-term play but one that we feel will be a big part of Freeport’s future going forward.

Thank you.

Your next question we'll have on the line of Chris Terry with Deutsche Bank.

Hi, Richard and Kathleen. I hope you’re both well. Just a quick one for me and that is the 2021-2022 volumes were just down a touch versus the last quarter, just comparing the two presentations. So, I think it's 100 million pounds or so. Is that just a bring forward effect where you've done better in 2020, or is there something else to that? It’s very minor, but sort of check?

Yes No, the main difference was the mining and milling in South America. We have some -- we assumed a lower rate in Cerro Verde. We were previously at 400 sooner than what's in our current plans, and we've made some minor adjustments also to El Abra. So, they were minor revisions but did end up impacting 2021 and 2022.Grasberg is unchanged.

Okay, thanks. Actually, one follow-up just to complete one of the questions from a bit early just on the cost side. I mean you commented on sort of some of the ups and downs. You had the tailwind from, I think, in Indonesia on the currency last quarter and then oil down drastically. And then, there's ups and downs on mining rights. But from a macro sense, just given that we've now seen copper start to rebound, are we entering environment, where you start to get inflation in general on some of the costs for the business as well, just more from the macro variables?

The main thing that we’ve seen really is on the currency rates. We've had the energy prices from our prior forecasts were up about 18%, from April forecasts. But, we've also had -- and some of this has been offset with gold. But, the way that the dollar has raised against some of these currencies has had an impact on our costs in Indonesia with the rupiah rate and to a lesser extent in Chile and Peru. But,, that's really the only thing we have seen is really these macro, currency exchange rates and the energy prices. We haven't seen -- and we continue to work with our suppliers, we haven't seen inflation in other areas. And of course, with the level of employment, et cetera, the labor rate pressure is not what it is sometimes when you see copper prices rallying. So, we're going to continue to focus on driving out as much cost as we can, using this time period to execute the plans, the revised plans and drive costs as low as we can. And in the U.S. and in South America, the costs really have a big impact on value, because the lower the costs, the bigger the resource. And so, we will focus on that as we go through 2020.

Great, thanks. Thanks, Kathleen, and congrats on a great turnaround in the quarter.

Thanks a lot.

Your next question will come from the line of Brian MacArthur with Raymond James.

Just two quick questions. First of all, I just want to confirm, the forecast through 2022 and all your production, your cash flows, is Chino in there or is it not?

It is not. It's currently remained idled and we're still evaluating next steps with respect to restart.

Perfect. Thank you. My second question and I know maybe getting a little ahead of myself here, but obviously you're going to generate an awful lot of cash flow going forward. And as Richard said, you've been working for 15 years to get everything underground, set up the Grasberg, which have a lot of work. And you've sort of had ongoing major project costs of $1 billion a year and you get down to $900 million in 2022. And I understand too in 2022, the ownership changes in a little bit. But what does the ongoing capital look at -- look like sort of post 2022, once we get the GBC developed, everything's up and running, how long can you do it, like just keep generating without major capital go into KL or something? Because I would think post that period, you've had substantial capital to build this thing for 15 years. Some of that on a runway should come off or is that right?

Yes. And we've got -- in terms of our current plans, we project the capital will decline in 2022 from 2021, as we mentioned, but even further beginning in 2023. We're looking at KL and relooking at the project and running scenarios and trade-off analysis to look at the capital involved in developing KL, which involves potentially having some additional processing equipment to handle pyrite ores. We're looking at if there is a higher NPV option that involves lower capital that would mine the areas that are -- that have less pyrite. And so, actually from a value standpoint, it could be something that's more valuable than just full out development of the whole resource. So, we're currently in those -- in progress with those analyses. But, for the foreseeable future, as we get a Grasberg ramped up, the capital will decline. And we don't have -- we don't have a major decision to make. In the next few years, we will want to settle on what the KL plan is, but in terms of capital outlays, we don't have major increases in capital forecast in our plans for Kucing Liar. We want to deliver the Grasberg and Deep MLZ first.

It makes great sense, but would capital down like a lot at Grasberg in ‘20 -- like when I say go down a lot, I mean you've been spending about $1 billion in development a year plus sustaining, give or take, will that go down like $200 million or $300 million for a few years, or I guess that’s all dependent on whether...

Aside from KL, you could see CapEx at Grasberg going down to $300 million or $400 million level. And ultimately, we'll have to make decision on what the plan is for KL. But, it'll go down significantly beginning in 2023 and beyond. So, just the cash flow from GBC -- from Grasberg Block Cave and Deep MLZ are going to be massive. And we'll look at reinvesting that into KL over time.

Kathleen, you did say to 3 to $400 million, right?

Right. It'll go down to 3 to $400 million, right, from over $1 billion.

Yes. Right. Great. Thank you very much. Again, congratulations on the great progress that has been made.

Our final question will come from the line of Michael Dudas with VRP.

Thanks Richard and Kathleen. What a difference a quarter makes, huh?

We were just saying the same thing.

My question is, Richard, do you think how your company and the industry has evolved and managed through COVID in the past four months and what will happen in the future? Do you think that the industry or maybe Freeport particularly and industry in general will be look -- perceived as a better partner from a labor and a government standpoint? So, as we move forward in the next several years of higher prices and development and maybe some issues with regard to royalties and such, do you think that what’s come out that will be helpful to the industry and that could also maybe be helpful on ESG or any type of thing? Thank you.

Yes, I do. In fact, early this morning, I added to my notes that I was going to say that I said earlier actually when we're done with COVID, in many respects [Technical Difficulty] closer to communities and governments. [Technical Difficulty] I recall, going into February, going into March, when we started working remotely, Kathleen and I were looking at each other and saying, okay, now what are we going to do? And by April, we had a plan. Well, that's the situation for all these communities and all these governments, and people are still struggling with that. And so, by our being aggressive in investing in healthcare protocols, testing equipment and doing things to help these communities in Indonesia, I mean, we have two PCR labs. Here in the United States, what does it take often, a week to two weeks to get PCR results? Well, we have two PCR labs, one in Lone and one to the Highlands, which we're working with community use, and that's much appreciated. We had to build an oxygen facility in for Arequipa. So by showing that we are competent in managing these, by showing we have sensitivities to workers’ families and the communities by working with governments to do that, we're showing both, competency, sensitivity and the fact that we are committed to being good partners. So, I think all of that's going to be beneficial. We've achieved that in steps. We moved our headquarters to Arizona several years ago. We made a big commitment to show people of Arizona that we could be good partners. And now, we are broadly regarded as being great partners. So, that's an excellent point. And ESG matters are growing in importance and significance to investors. We know that. We believe that's a good trend. And we will measure up well by that, because that's just what our commitment is.

It’s quite encouraging. Thank you, Richard.

So, thank you all for…

Now, I’ll turn the call over to management.

Thank you, Gina. Thanks all of you joining us. We appreciate your interest, appreciate the good questions. Of course, it is -- a quarter’s made a heck a difference, but it is so great now to be focused totally on what we are doing operationally with our business. We look forward to reporting continued progress. As always, if any of you have questions or need some more information, contact David Joint, and we’ll be responsive. Good luck to everybody. Take care. This thing is not controlled yet. So, all of you be careful and watch out for your families and friends.

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