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Actionable news in FCX: FreePORT-MCMORAN Inc,

Will This Rodney Dangerfield Stock Ever Get The Respect It Deserves?

Summary

Sale of Tenke mine is further evidence of management’s ability to divest in current market conditions.

Proceeds from sale will significantly reduce long-term debt.

Revenue and cash flow from remaining operations should be sufficient to maintain profitability going forward.

Background

Freeport-McMoRan Copper & Gold (FCX) is the second largest copper producing company and is a major producer of gold and molybdenum. FCX's mines are located in Indonesia, North America, South America and Africa.

At the time of this article, FCX's current price was $10.52 - significantly above its 52 week low of $3.52 - with a negative current PE and a forward PE of 10.96.

This analysis is based on information from FCX public SEC filings, press releases, earnings calls and investor presentations from the period 1Q15 through 1Q16.

Sale of Tenke Mine in Africa to China Molybdenum for $2.65 billion

FCX announced on May 9 that they will sell their 56% stake in Tenke Fungurume Mining S.A. ("TFM") in the Democratic Republic of Congo ("DRC") for $2.65 billion to China Molybdenum. FCX is also currently in negotiations to sell its interest in Freeport Cobalt, including the Kokkola Cobalt Refinery in Finland, for $100 million and the Kisanfu Exploration project in the DRC for $50 million.

This sale came as no surprise to investors as Mr. Adkerson stated in the 1Q16 earnings call

"We are advancing discussions on additional transactions, very pleased with that project. Much more...


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