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Prosperity - One of the largest undeveloped copper-gold deposits in Canada
The Prosperity deposit is a gold-copper porphyry with a 1.0 billion tonne measured and indicated resource containing 5.3 billion pounds of copper and 13.3 million ounces of gold. At today's metal prices (US$1,000/ounce gold and US$3.15/pound copper) the project has a pre-tax net present value of C$3 billion and a 40% pre-tax internal rate of return.
Over the past four years, Taseko has significantly advanced the project, completing the feasibility study, and entering the Provincial and Federal Environmental Assessment process. Prosperity is a project that holds the potential to dramatically increase shareholder value. Development of this large-scale deposit will be a major step towards transforming Taseko into a mid-tier mining company.
Feasibility Study
In November 2009 Taseko updated the 2007 feasibility study using metal price assumptions which more accurately reflected long-term consensus views -- US$650/oz gold and US$1.65/lb copper. The increased reserves are based on a $5.50 NSR
Key project metrics include:
Reserves and Resources
- 3.6 billion pounds of recoverable copper
- 7.7 million ounces of recoverable gold
- 33 year mine life at a milling rate of 70,000 tonnes/day
- Life of mine waste to ore strip ratio of 1.5
- Total pre-production capital cost of C$814 million
- Site operating cost of C$7.51 per tonne milled over the life of mine
- Total operating costs net of byproduct credits of US$0.59/lb copper
The mineral reserves estimated from the study:
| Prosperity Mineral Reserves at C$5.50 NSR/t Pit-Rim Cut-off | |||||
| Category | Tonnes (millions) |
Gold (g/t) |
Copper (%) |
Recoverable | |
| Gold Ounces (millions) | Copper Pounds (billions) | ||||
| Proven | 481 | 0.46 | 0.26 | 5.0 | 2.4 |
| Probable | 350 | 0.35 | 0.18 | 2.7 | 1.2 |
| Total | 831 | 0.41 | 0.23 | 7.7 | 3.6 |
Note: The reserve estimate takes into consideration all geologic, mining, milling, and economic factors, and is stated according to Canadian standards (NI43-101).
The Proven and Probable reserves above are included in the following Measured and Indicated Mineral Resources. The Mineral Resources are as outlined by drilling to date, and estimated at a 0.14% Cu cut-off.
| Prosperity Mineral Resources at 0.14% Copper Cut-off | |||
| Category | Tonnes (millions) |
Gold (g/t) |
Copper (%) |
| Measured | 547.1 | 0.46 | 0.27 |
| Indicated | 463.4 | 0.34 | 0.21 |
| Total | 1,010.50 | 0.41 | 0.24 |
The mineral resource and reserve estimations were completed by Taseko staff under the supervision of Scott Jones, P.Eng., Vice-President, Engineering and a Qualified Person under National Instrument 43-101. Mr Jones has verified the methods used to determine grade and tonnage in the geological model, reviewed the long range mine plan, and directed the updated economic evaluation. The estimates for the reserves used long term metal prices of US$1.65/lb for copper and US$650/oz for gold and a foreign exchange of C$0.82 per US dollar.. A technical report was filed on www.sedar.com.
Environmental Assessment
Prosperity has gone through the most rigorous Environmental Assessment review of any project in British Columbia. The granting of the Provincial Environmental Assessment Certificate in January 2010 was an important step forward. In March and April of this year the Federal Panel reviewing the project conducted six weeks of public hearings. By July, the Panel is expected to submit its final report to the Federal Cabinet for their ultimate approval of Prosperity. We fully expect this final approval in September. Our plans today involve advancing the engineering for Prosperity and site preparation through the balance of 2010 so that we in a position to commence major construction in the second quarter of 2011.
The graph below details the timeline we are following:
History
Initial exploration activity in the vicinity of the Prosperity deposit was undertaken by prospectors in the early 1930's. In 1963-64, Phelps Dodge conducted a small exploration drilling program. Taseko acquired the property in 1969 and exploration drilling continued in the 1970's and 1980's under option agreements with several mining companies. Hunter Dickinson acquired Taseko in 1991 and proceeded with extensive drilling, engineering, metallurgical and socioeconomic programs. The work carried out in the 1990's succeeded in delineating a bulk tonnage porphyry gold-copper mineral resource at Prosperity. By 1998, Taseko had advanced the project to the pre-feasibility and feasibility stages. However, in 2000 prevailing metal prices - copper price ranging from US$0.60 - $0.80 per pound and gold price ranging from US$250-300 per ounce - and a poor outlook for price performance resulted in the decision to put the project on hold.
