- Taseko Talks
December 20, 2022
December 20, 2022, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) (“Taseko” or the “Company”) is pleased to announce it has signed agreements with Mitsui & Co. (U.S.A.) Inc. (“Mitsui”) to form a strategic partnership to develop the Company’s Florence Copper project (the “Project”), located in Arizona USA.
Mitsui has committed to an initial investment of US$50 million, with proceeds to be used for construction of the commercial production facility. The initial investment will be in the form of a copper stream agreement (the “Copper Stream”) on 2.67% of the copper produced at Florence Copper.
In addition, Mitsui has the option to invest an additional US$50 million (for a total investment of US$100 million) for a 10% equity interest in Florence Copper (the “Equity Option”). The Equity Option is exercisable by Mitsui within a three-year period following completion of construction of the commercial production facility.If Mitsui elects to exercise its Equity Option the Copper Stream will terminate.
As part of the arrangement, Taseko and Mitsui have entered into an offtake contract for 81% of the copper cathode produced at Florence during the initial years of production. The parties intend to use this period to develop premium sales channels for ‘green copper’ in the United States, leveraging Mitsui’s existing US cathode trading business and the unique environmental benefits of Florence Copper, which is expected to be the lowest carbon- and energy-intensity copper producer in North America.
Stuart McDonald, President & CEO of Taseko, stated, “This agreement with Mitsui establishes a strategic partnership with a leading international company. Mitsui’s investment will complement Taseko’s financing requirements and construction timeline and advance our goal of ensuring the copper produced at Florence is recognized for its unique low-carbon profile that will advantage US manufacturers and consumers. In the future, Taseko and Mitsui will collectively evaluate additional investments toward establishing Florence Copper as a zero-carbon copper producer (Scope 1 and 2).”
Sayu Ueno, President & CEO of Mitsui & Co. (U.S.A.), commented, “We are excited to partner with Taseko and its unique, low-carbon and low-impact Florence Copper project. When in production, Florence Copper will significantly expand our US cathode trading business, while providing an environmentally sound, domestically produced product that can be marketed on the basis of its low-carbon advantages. We believe Florence Copper will be a preferred source of ‘made-in-the-US’ copper for many end users in North America.”
Under the terms of the initial US$50 million Copper Stream agreement, Mitsui’s first deposit payment of US$10 million will be available for drawdown after receipt of Florence Copper’s Underground Injection Control permit, with additional US$10 million instalments available each quarter thereafter to fund project construction.Mitsui will receive 2.67% of the copper metal produced at Florence and pay a delivery price equal to 25% of the market price of copper delivered under the contract.
If Mitsui elects to exercise its Equity Option and invest an additional US$50 million in the Project, these additional funds and the Copper Stream will be converted into a 10% equity interest in Florence Copper.At that time, the initial offtake agreement will cease and be replaced with a marketing agency agreement.
If the Copper Stream is not converted into an equity interest Taseko will have the right to buy-back 100% of the Copper Stream, otherwise, it will terminate when 40 million pounds of copper have been delivered under the agreement. Mitsui’s offtake entitlement would also reduce to 30% until the Copper Stream deposit has been reduced to nil.
About Mitsui & Co.
With a long history in the United States, Mitsui & Co. (U.S.A.), Inc. (“Mitsui USA”) is a wholly owned subsidiary of Mitsui & Co., Ltd., Tokyo, Japan, one of the most diversified and comprehensive trading, investment, and service enterprises in the world. Mitsui & Co. pursues “360° business innovation” that ranges from product sales, worldwide logistics and financing, through to the development of major international infrastructure and other projects. More information on Mitsui USA may be found at www.mitsui.com/us.
Taseko is focused on the operation and development of copper mines in North America. Headquartered in Vancouver, Canada, Taseko is the owner (75%) and operator of the Gibraltar Mine, the second largest open pit copper mine in Canada.Taseko’s Florence Copper Project in Arizona is a near-term growth project, which will nearly double the Company’s annual copper production. Construction of Florence Copper is expected to commence in 2023. Taseko’s Yellowhead Copper Project, New Prosperity Gold-Copper Project and Aley Niobium Project are all advanced staged projects which provide the Company with a diverse commodity pipeline.
For further information on Taseko, see the Company’s website at www.tasekomines.com or contact:
Brian Bergot, Vice President, Investor Relations - 778-373-4533 or toll free 1-877-441-4533
President and CEO
No regulatory authority has approved or disapproved of the information contained in this news release.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This document contains “forward-looking statements” that were based on Taseko’s expectations, estimates and projections as of the dates as of which those statements were made. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “outlook”, “anticipate”, “project”, “target”, “believe”, “estimate”, “expect”, “intend”, “should” and similar expressions.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These included but are not limited to:
For further information on Taseko, investors should review the Company’s annual Form 40-F filing with the United States Securities and Exchange Commission www.sec.gov and home jurisdiction filings that are available at www.sedar.com, including the “Risk Factors” included in our Annual Information Form.