May 12, 2010
Vancouver, BC - Taseko Mines Limited (TSX: TKO; NYSE Amex: TGB) (“Taseko” or the “Company”) announces it has entered into a gold stream transaction with Franco-Nevada Corporation (TSX:FNV) (“Franco-Nevada”), under which Franco-Nevada will purchase gold equal to 22% of the life of mine gold to be produced by Taseko from its proposed Prosperity Gold and Copper Mine (“Prosperity”) in British Columbia (the “Transaction”).
Taseko will receive staged cash deposits in aggregating US$350 million to be paid during mine construction as well as 2 million Franco-Nevada warrants to be issued on the date of the first advance of the cash payment. For each ounce of gold delivered to Franco-Nevada, Taseko will receive a further cash payment of US$400 (subject to an inflationary adjustment) or the prevailing market price, if lower. The deposit will be credited with the difference between US$400 and the market price of gold for each ounce delivered until the deposit is fully credited. Each warrant will be exercisable to purchase one Franco-Nevada common share at a price of $75.00 until June 16, 2017 and will be listed under the same terms as the warrants listed on TSX under the symbol FNV.WT.A.
The investment by Franco-Nevada is subject to full financing of the project and receipt of all material permits to construct and operate the Prosperity project and will be staged such that the timing of Franco-Nevada’s payments will be concurrent with Taseko’s funding of the equity portion of the capital requirements of Prosperity.
Russell Hallbauer, President and CEO of Taseko, commented “We are very pleased to be entering into this long-term relationship with Franco-Nevada. It is an endorsement of the quality of our project that we have been able to attract the interest of a company of the calibre of Franco Nevada as a participant in the advancement of Prosperity. Through this transaction, we are funding approximately 45% of the planned capital expenditures for Prosperity by selling 6% of the total gross metal revenue. Combined with cash on hand and expected cash flow from Gibraltar, we will have Prosperity approximately 80% funded without any debt, leaving a number of available alternatives to complete the project funding. These include project debt, equity, off-take sale for debt and the sale of a small minority interest in Prosperity.”
Wellington West Capital Markets Inc. is acting as financial advisor to Taseko.
Prosperity
Taseko holds a 100% interest in the Prosperity property, located 125 kilometers southwest of the City of Williams Lake. The property hosts a large porphyry gold-copper deposit amenable to open pit mining. Proven and probable mineral reserves are 830 million tonnes grading 0.41 g/t gold and 0.23% copper, with recoverable metal of 7.7 million ounces of gold and 3.6 billion pounds of copper1, which under the present mine design criteria represents a mine life of 33 years. It is anticipated the Prosperity project could be commissioned by 2013, subject to timely permitting and construction. On January 14, 2010, Taseko received the environmental assessment certificate for the project from the British Columbia Provincial Ministry of Environment. This is an important milestone as it is the provincial government which is responsible for mine development in British Columbia.
The federal process, conducted by a three-person Panel operating under defined Terms of Reference, is required to complete their work in a timely and efficient manner. The hearings commenced in late March and were completed on May 3, 2010. Following conclusion of the hearings, the Panel will submit their findings to the Federal Minister of Environment for a decision. This process is expected to complete by the third quarter of 2010.
For further information on Taseko, please see the Company’s website www.tasekomines.com or 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.
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.