Investopedia: Freeport Looking Shiny

Investors can easily lose themselves in the details of calculating PV-10, forecasting future inventory imbalances and interpreting drill hole data. But here is an alternative way to look at the mining sector - developing countries like China, Brazil and India need a lot of metal to develop their infrastructure and support their economies, and certain companies like Freeport McMoRan (NYSE:FCX) have both ample resources and attractive production profiles. While there is really no good way to completely tamp down the volatility that goes with commodity speculation, buying good companies at good prices seems like an approach worth exploring. 


Digging into the Fourth Quarter
Freeport McMoRan delivered another strong quarterly result. Revenue rose more than 21% from the year-ago level, fueled by higher price realizations for copper, gold and molybdenum. Freeport actually sold less copper (down 4% in pounds), but got nearly 31% more per pound for what it did sell. The same was true of molybdenum, while the company both sold more gold and got a higher price per ounce in the fourth quarter.

Freeport also managed to produce its ore more effectively in the fourth quarter. Overall consolidated costs came out to $0.53 per pound in the fourth quarter - down from $0.62 a year ago and lower than the company's full-year average of $0.79 per pound. (For more, see Copper Developments Continued To Heat Up In 2010.)


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