August 11, 2009, Vancouver, BC - Taseko Mines Limited (TSX: TKO; NYSE Amex: TGB) (“Taseko” or the “Company”) reports the results for the three and six months ended June 30, 2009. This release should be read with the Company’s Financial Statements and Management Discussion & Analysis, available at www.tasekomines.com and filed on www.sedar.com. Currency is Canadian dollars unless otherwise indicated.
For the quarter ended June 30, 2009, the Company reports an operating profit of $16.7 million and net earnings of $11.4 million or $0.07 per share ($0.06 per share fully diluted). This compares to an operating profit of $6.6 million and net earnings of $3.5 million for the quarter ended March 31, 2009. Revenue for the quarter was $52.6 million from the sale of 21.0 million pounds of copper and 216,000 pounds of molybdenum at an average realized price of US$2.10 per pound for copper and US$10.56 per pound for molybdenum.
Russell Hallbauer, President and CEO of Taseko commented, “Since the beginning of the year our operating margins have increased on a month over month basis, as a result of cost containment initiatives and the strengthening copper price.
With our balance sheet in very good shape, and growing cash flows, we are aggressively working to complete the few remaining capital expenditures required to boost our concentrator throughput capacity to 55,000 tons per day.
Our newly installed Vertimill, along with additional flotation capacity, will give immediate copper recovery improvements. We expect to increase the ore crushing capacity by mid-2010, with the commissioning of our new in-pit crusher and overland conveyor system. The combination of the additional flotation capacity and increased crushing and grinding capabilities will increase our metal production capacity at Gibraltar to an estimated 115 million pounds per year by the middle of 2010.
As well, Gibraltar’s management team recently completed a Business Improvement Initiative. This initiative has identified $20 million worth of annual cost saving improvements that we are presently engaged in addressing.
In conjunction with increased concentrator throughput, improved metal recoveries, a reduction of mining costs as we maximize the productive capacity of our new mining fleet and our focus on the Business Improvement Initiative, Gibraltar’s management team will continue to push Gibraltar down the cost curve enhancing our profitability.”
Mr. Hallbauer concluded, “We are also extremely pleased with the progress of the Environmental Review of our Prosperity Project over the past three months. The Provincial and Federal agencies are progressing with their work as we had envisioned.
The Federal Department of Fisheries and Oceans has provided clarification on its evaluation of our compensation plan for Fish Lake and is harmonizing those efforts with Provincial agencies. This is a very important step for the Project.
We anticipate receiving our Environmental Assessment and we see no obvious encumbrances that would prevent Prosperity from becoming a long life mine, like Gibraltar, contributing economic returns to our shareholders and creating thousands of direct and indirect jobs in the Cariboo region.”
Gibraltar Production and Sales
In the six months ended June 30, 2009, copper in concentrate sales was 39.5 million pounds and 0.71 million pounds of copper cathode was sold. Molybdenum in concentrate sales was 445,000 pounds.
Taseko has established a hedging program for 50% of its targeted copper production, approximately 30 million pounds of copper, within a price range of US$1.88-2.36 per pound from May to December 2009. The Company subsequently extended the program on half of the targeted production per month to May 2010: the price range is US$2.00-2.61 per pound in January and February 2010, US$2.00-2.61 per pound in March 2010 and US$2.15-2.73 per pound in April and May 2010.
The following table illustrates detail on Gibraltar’s six-month performance in fiscal 2009:
Three months ended
March 31 2009
Three months ended
June 30 2009
Six months ended
June 30 2009
Total tons mined (millions)1
Tons of ore milled (millions)
Copper grade (%)
Molybdenum grade (%Mo)
Copper recovery (%)
Molybdenum recovery (%)
Copper production (millions lb) 2
Molybdenum production (thousands lb)
Copper production costs, net of by-product
credits, per lb of copper3
Off property costs for transport,
treatment (smelting & refining) & sales per lb of copper
Total cash costs of production per lb of copper4
Notes to table:
1 Total tons mined includes sulphide ore, oxide ore, low grade stockpile material, overburden, and waste rock which were moved from within pit limit to outside pit limit during the period.
2 2009 copper production includes 38.3 million lb in concentrate and 0.7 million lb in cathode.
3 By-product credit is based on pounds of molybdenum and ounces of silver sold.
4 Cash costs of production is a non-GAAP measure. This non-GAAP measure is intended to provide additional information to investor and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Cash costs of production is a common performance measure in the copper industry and includes direct cost of operations and related costs through to refined metal, excluding amortization.
The Gibraltar mine operated for the first six months of 2009 under a plan initiated in November 2008, based on 45,000 tons per day (“tpd”) mill throughput and mining at a significantly reduced strip ratio. This new operational plan, along with declining input costs and the realization of the Phase 1 expansion, resulted in substantially reduced costs compared to prior years. The mine is currently reviewing a return to deposit average strip ratio based on recent strength in copper and molybdenum demand and corresponding increases in metal prices.
Copper in concentrate production during the three-month period ended June 30, 2009 was 19.1 million pounds, a decrease from the 19.7 million pounds produced in the first quarter of 2009 as a result of lower copper grade, partially offset by improved recovery. Three-month molybdenum in concentrate production increased from the first quarter of 2009 because of higher grades.
Copper in concentrate production was 38.3 million pounds and molybdenum in concentrate production was 404,000 pounds in the six months ended June 30, 2009. Copper cathode produced over the six months has been 700,000 pounds. These figures are in line with annual production guidance of 80 million pounds of copper and 800 thousand pounds of molybdenum.
Cash costs of production during the quarter ended June 30, 2009 was US$1.30 per pound, a 60% decrease in cost from the same quarter of 2008, and a 10% increase over the first quarter of 2009. Over the six months of 2009, the average cost of production has been US$1.23 per pound.
Fixed Infrastructure Upgrades and Installations
Construction of the Phase 1 mill upgrade was completed in February 2008. The ramp up to the rated processing capacity of 46,000 tons per day has been essentially achieved during the first half of 2009 as mill operations personnel continue to refine the metallurgical performance relating to grind size at higher mill throughput rates and metal recovery. Copper recoveries have increased from 73.2% in October 2008 to average 83.0% in the first half of 2009.
Current upgrade construction work consists of modernizing and increasing the capacity of the regrind and cleaner flotation circuits to increase throughput capacity and improve metal recovery. This portion of the work will be completed in August and recovery improvements are expected to be realized quite quickly. Further planned upgrades consist of improvements to ancillary circuits along with installation of a two-stage tailings pumping system, designed to increase concentrator capacity from 46,000 to 55,000 tpd. In the fall of 2009, work is expected to resume on the installation of an in-pit crusher and conveyor system and a Semi-Autogenous Grinding (“SAG”) mill direct feed system, which will eliminate the materials handling issues in the secondary crusher circuit. Ramp up to 55,000 tpd will occur following completion of the above infrastructure upgrades and installations.
For further information, contact Brian Bergot, Investor Relations — 778-373-4545, toll free 1-800-667-2114
Russell Hallbauer 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:
uncertainties and costs related to the Company’s exploration and development activities, such as those associated with continuity of mineralization or determining whether mineral resources or reserves exist on a property;
uncertainties related to the accuracy of our estimates of mineral reserves, mineral resources, production rates and timing of production, future production and future cash and total costs of production and milling;
uncertainties related to feasibility studies that provide estimates of expected or anticipated costs, expenditures and economic returns from a mining project;
uncertainties related to our ability to complete the mill upgrade on time estimated and at the scheduled cost;
uncertainties related to the ability to obtain necessary licenses permits for development projects and project delays due to third party opposition;
uncertainties related to unexpected or ongoing judicial or regulatory proceedings;
changes in, and the effects of, the laws, regulations and government policies affecting our exploration and development activities and mining operations, particularly laws, regulations and policies;
changes in general economic conditions, the financial markets and in the demand and market price for copper, gold and other minerals and commodities, such as diesel fuel, steel, concrete, electricity and other forms of energy, mining equipment, and fluctuations in exchange rates, particularly with respect to the value of the U.S. dollar and Canadian dollar, and the continued availability of capital and financing;
the effects of forward selling instruments to protect against fluctuations in copper prices and exchange rate movements and the risks of counterparty defaults, and mark to market risk;
the risk of inadequate insurance or inability to obtain insurance to cover mining risks;
the risk of loss of key employees; the risk of changes in accounting policies and methods we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates;
environmental issues and liabilities associated with mining including processing and stock piling ore; and
labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt the production of minerals in our mines.
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.