Deep M ill Level Zone, P T Freeport I ndonesia

From Feasibility to P roduction

M ay 2016
 Contents
 Location and Topography
 Geology and History
 Reserves and Strategic Timing
 Timeline/Mine Overview
 Conveyor Decline Redesign
 Caving Update
 Conclusions

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East Ertsberg Skarn System – Geology & History

3
 Grasberg Minerals District & Reserves
Tonnes Grades Payable Metal
Plan View
Cu Au Cu Au
(millions) (%) (g/t) (Bn lbs) (MM Ozs)
Grasberg &
Kucing Liar
Grasberg Block Cave 962 1.03% 0.78 18.4 15.6 Grasberg
open pit
Kucing Liar 395 1.27% 1.09 9.4 6.4
DMLZ
Big Gossan 54 2.26% 0.99 2.5 1.1
Deep MLZ 460 Big
0.89% 0.74 7.9 8.7
Gossan DOZ
Deep Ore Zone 115 0.56% 0.69 1.2 2.0
Underground Total 1,987 1.05% 0.83 39.4 33.8 Grasberg
Block Cave
Kucing
Liar Amole
N
Grasberg Open Pit 144 1.02% 1.20 2.7 4.5
2,900 m elev DOZ
District Total 2,130 1.05% 0.86 42.1 38.3
Big
Kucing Liar Spur
Gossan Grasberg
MLA DMLZ
Big Gossan Spur BC Spur

N DMLZ Spur
Portals
(at Ridge Camp) Common Infrastructure
2,500 m elev
 Deep MLZ - Timeline
Prefeasibility DMLZ Spur Feasibility Undercutting
Study Started Study (August)
(AB Adits) Completed 80,000tpd
Completed
First Drawbell
Conveyor (September)
& Service
Decline
Trade-off Studies & Started Mine Development & Production
Value Engineering Construction Ramp-Up
2021

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2022

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 Deep MLZ Mine – Overview
View Looking West
Surface (3020 mL) Primary Exhaust Fans
(DOZ & DMLZ)

To Ridge Camp
Vent Raises
(530 m long)
AB Adits (2500 mL)
DOZ (3100 mL)

DMLZ (2590 mL)

 Deep MLZ Mine – Overview
 Advanced Undercutting
 1,900 Drawpoints
 Drawbell spacing 30m x 20m
 580,000 m2 footprint
 Two 1.6m x 2.3m 1000kw gyratory crushers
 Conveyors - 4.5 km – 1.83m Wide @ 15%
 Ventilation: 5 x 2200kW mixed flow fans – 2300 m3/s Surface Control Room
P20 Grizzly LP20 Chute – Remote Loading

Grizzly P20 – Remote Breaker DMLZ Crusher – 60 t Truck

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 Major Project Impacts

 Primary access from Rail to  Reduced grizzly excavation

Rubber Tyre in AB
 Fixed facility re-design
 Conveyor decline redesign/high
pressure water
 Rail to trucks for ore handling
 Herringbone to El Teniente
 Improved truck chutes
 Water and H2S gas intersects on
Northern fringe – redesign fringe area
 Raisebore failure - 530m x 6m dia.
 Multiple undercut sequence revisions
 Others…

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 Major Project Impacts – Conveyor Declines
Re-Route Re-Design
Surface (3020 mL)

DOZ (3100 mL)

Water Intersect

DMLZ (2590 mL)

Original Design
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 Major Project Impacts – Conveyor Declines
Diamond Drill Hole: ~ 20 LPS
 Probe holes drilled ahead of the decline
 Main concern was the Wanagon fault
crossing
 Both core and drift had no issues at the Plan View of Conveyor Routing and Geology
fault crossing
 Probe holes intersected water just before
the planned transfer station
 Additional holes identified several narrow Cv514
zones of broken and very wet ground
near the conveyor transfer
 It was felt to be a manageable problem Wanagon Fault

 We were committed to the conveyor

designs, engineering and procurement
 Development proceeded
Conveyor Transfer

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Major Project Impacts – Conveyor Declines

 Additional diamond drill holes

intersected more water/poor ground
 The geological contact was re-defined
and not to an advantageous location
 The conveyor face intersected a zone of
high pressure and high volume water
 Estimated at 180 l/s at 34 bar
 This coincided with a labour action and
the declines flooded
 Recovery was slow and after re-entry it
was decided to abandon and re-design
 The engineering and operations teams
worked rapidly on the new concept
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 Final Remediation

 “Keyed” in place concrete plug with grouting gallery (x2)

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 Major Project Impacts – Conveyor Declines

Surface (3020 mL)

“Wrong side”

DOZ (3100 mL)

DMLZ (2590 mL)

Original Design
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 Caving Update

 Drawbelling: 15 open
 Undercut area: 12,500 m2
 HR: 28m
 Airgap: 10-15m (two holes)
 Constructed D/P’s: 180
 Three chutes installed
 Some initial issues on drawbell
design and execution

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 Conclusions

 The DMLZ mine is critical in the transition from open pit to underground
 Early start allowed for some “time” contingency and reduced risk
 DMLZ: 7 years to initial caving; 7 years to sustained full production
 Flexible approach delivered by the Engineering and Operations teams
 Good collaboration, rapid response and some heated debates
 The feasibility plan was adhered to in concept but significant changes
were discussed and applied as required
 Mitigating schedule risk was a priority
 Caving has started – so the work is just beginning

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Questions?

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