July 8, 2008, Vancouver, BC - Taseko Mines Limited (TSX:TKO; AMEX:TGB) wishes to provide an update on its Gibraltar Mine. As announced on May 8, 2008 the main transformer for the new SAG mill failed resulting in a 16-day outage of the concentrator. An investigation into the failure of the transformer indicated that it had a defect when it was purchased, and it was this defect that was the root cause of the failure. Taseko is now pursuing warrantee coverage from the supplier as well as loss of business insurance.
During this unscheduled outage, maintenance personnel utilized the available time to work on further mill upgrades, chute repairs and areas affecting material flow that have been impacting concentrator performance.
The 3.3 million pounds of copper production lost in May, combined with higher than normal operating costs due to the accelerated maintenance activities referred to above, as well as a change out of the SAG mill liners after 6 months of operation will have a direct impact on Taseko’s third quarter financials.
Since January, the mill operation’s team has made steady progress towards integration of all the concentrator circuits from the primary crusher, the SAG mill and into the downstream secondary grinding and recovery systems as defined in the Phase I scope of work. The integration of these milling circuits has been more challenging than anticipated. While targeted operating levels for the SAG mill, ball mills and flotation system have been achieved on an individual basis, optimizing how each circuit works and interacts with the others is taking longer than planned.
The following table shows the average daily production rates that have been achieved over the past six months.
Average Production Rates
(pounds per day)
Annualized Production Rates
(millions of pounds)
The Phase II expansion is continuing on time and budget with the cleaner cell installation complete and expected preliminary circuit operation commencing by the end of July.
Mine operations commissioned the first of two new production drills in June and are now preparing mining areas in anticipation of the arrival of the new 60 yard mining shovel. This is the first of the three new 60 yard mining shovels that are required to provide feed for the anticipated 85,000 ton per day concentrator capacity.
Russell Hallbauer, President and CEO of Taseko commented, “While uncontrollable events, such as the failure of the transformer are unfortunate and will affect our financial performance in the near-term, we remain focused on integrating and optimizing our new concentrator circuit and adding our Phase II upgrades as expeditiously as possible to coincide with the mining department’s ramp up in daily mining rates.
“We expect our increasing copper production trend to continue in the months ahead as we capitalize on ongoing circuit integration of both our Phase I & II expansion and modernization programs.
“With copper prices in the $3.90/lb range, our Phase I production levels nearly achieved and our Phase II construction program advancing as planned, we are making excellent progress in all areas of our business plan and are excited about the next step change we see coming in our operations.”
For further details on Taseko and its properties, please visit the Company’s website at www.tasekomines.com or contact Investor Services at (604) 684-6365 or within North America at 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.