Down 22%, This Excellent Value Mining Stock Is a Buy for 2025 and Beyond

Core Viewpoint - Freeport-McMoRan's stock has declined by almost 22% despite a rise in copper prices, suggesting the sell-off may be overdone and the stock could represent a good value opportunity [1][10] Group 1: Reasons for Stock Decline - The decline in Freeport's stock can be attributed to three main factors, including potential tariff effects, operational challenges, and production downgrades [2] - Management indicated that U.S.-produced copper sales could benefit from any premium due to tariffs, while copper from Indonesia primarily goes to China [3] - A fire at a new smelter in Indonesia and repairs to mills have contributed to lowered production expectations for 2025 [4] Group 2: Long-term Growth Initiatives - Freeport's leaching initiative aims to recover 800 million pounds per annum from previously considered waste material, which could significantly expand profit margins [5] - The leaching cost is currently below $1 per pound, compared to a net cash cost of$1.56 per pound in the fourth quarter [6] - Cost reduction measures, including the use of autonomous trucks and new technology, are expected to enhance profit margins and offset lower-grade mining [7] Group 3: Future Expansion Opportunities - Freeport has several potential expansion projects, including a 200-250 million pound opportunity in Bagdad, Arizona, and a 300-400 million pound expansion in Lone Star, Arizona, expected to begin in the 2030s [8] - The expectation for an extension to operate in Indonesia beyond 2041 remains unchanged, although it is still a point of observation [9] Group 4: Valuation Perspective - The market has unduly punished Freeport for short-term issues, which do not alter the long-term outlook, and the company continues to make progress on its leaching initiative [10] - If copper prices remain around $4.45, Freeport could generate nearly$13 billion in EBITDA in 2026/2027, leading to an attractive EV/EBITDA multiple of 4.4 times [11]