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MINING USER CONFERENCE, MAY 4, 2017

SAG Mill Rewedge Work in record timeClimax Molybdenum USA

Terry Reader, Electr. /Instrumentation Superintendent & Norbert van Gorkum, Lifecycle Manager

1st Long Term Service Agreement 2012 – 2016

2nd Long Term Service Agreement 2016 - 2020

– Scheduled Maintenances– RDS – Support line– RDS – GMDfit

• Periodic Maintenance report• Condition Monitoring

Lifecycle Management

Climax Molybdenum - Long Term Service Agreement

Mining User Conference 2017, StockholmSlide 2May 3-5, 2017

Lifecycle Management

Climax Molybdenum - Long Term Service Agreement

Mining User Conference 2017, StockholmSlide 3May 3-5, 2017

LifecycleManager

AdvancedServices RDS

Field Services

Ensuring

Result

§ Spare parts lists and kits

§ Training (on-site, classroom)

§ Process improvement services

§ Engineering & consulting

§ SupportLine reports (SL)

§ Periodic Maintenance Reports (PMR)

§ Condition Monitoring notifications (CM)

§ Project management§ Time schedules§ Cash flow§ Supply chain management§ Compliance & Reliability§ Management reports with KPIs§ Communication & escalation plan§ Progress meetings

§ On-demand emergency services§ On-demand non-emergency services§ Extended start-up support§ Scheduled Maintenance

Ø 6 | 12 | 36 monthsØ Field Service Reports (Mech. & El. FSR)

May, 2016

Scheduled Maintenances36 month / ‘27,000 Hour’

Loose wedges were found

Lifecycle Management

Climax Molybdenum - Long Term Service Agreement

Mining User Conference 2017, StockholmSlide 4May 3-5, 2017

2016 SAG Mill Re-Wedge Project

5/4/2017

2

May, 2016

- Scheduled ’27,000 Hour’ maintenance with ABB

- Special inspections, upgrades, tuning and testing performed by ABB

- DIRIS test using a “robot” to measure tightness of motor stator wedges

- Concern regarding wedge tightness identified for a significant amount of wedges using the DIRIS test method

- Led to concerns regarding health of motor and potential for catastrophic failure

Cause for Re-wedging…

3

DIRIS robot – used because it can test with stator in run position

Small hammer that taps wedges and send vibration info to translate into looseness

DIRIS Testing

4

DIRIS Test – Indicated approximately 80% of wedging at different levels of looseness

- During re-wedge project additional testing was performed with Durometer and Hand Spanner tap tests which showed DIRIS results were not 100% reliable

- End Result – approximately 25% of wedges were changed

- DIRIS test was still useful in identifying a potential problem

- We now have a baseline to compare against

Test Results

5

Based on equipment criticality and production needs, this project was put on a “fast track” in order to complete prior to high production needs

Identified problem in late May

Project preparation – 3 months – June – August

- Weekly conference calls – ABB, Climax Mine and Freeport-McMoRan corporate personnel

- Detailed Action Item List updated weekly

- 3rd Party Consultant assisted with project planning and execution

- Met very tight timelines due to diligence in planning

Project execution – Aug. 29-Sep. 9

Fast Track Project

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Over 50 Climax personnel

- ~8,500 labor hours

Over 30 contract personnel on-site

- ABB

- Colorado Scaffolding

- Laron Inc.

- TeCo Lanz Technology Consulting

- ~3,900 contract labor hours

No safety events occurred during the project

Scheduled for 13.5 days down

- Completed approximately 36 hours ahead of schedule

Re-Wedge Project Execution

7

Elaborate scaffolding needs

Scaffolding

8

Lots of People Working Together

Teamwork

9

Problem Wedges

• Problem wedges were primarily in the joint

areas – 12, 3, 6 and 9 o’clock position

6 o’clock

9 o’clock

New wedges

10

Performed re-wedging on ~25% of the motor rather than a complete re-wedge

- Eliminated risks associated with the wedging process – i.e. insulation damage, bars lifting, more time, etc.

Motor was thoroughly tested following the re-wedge work

- Wedge tests with Durometer, Spanner and DIRIS

- Electrical Megger, Hi-Pot and Low Resistance Tests

- Very high confidence in reliability for years to come

Continued to build the working relationship with one of our partners – ABB

Outcome

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