Taseko gets negative TCs on Gibraltar cons
Mining Journal
By Paul Harris
Having recently consolidated 100% ownership of the Gibraltar copper miner in British Columbia, Canada, the company has obtained negative treatment charges (TCs) for the offtake that came with the consolidation acquisition.
Taseko acquired the 12.5% interest in Gibraltar held by Dowa Metals & Mining for US$117 million, payable over ten years. Dowa sold its smelting business and no longer needed to own copper mines.
"By buying out Dowa, we got access to their 30% share of the Gibraltar offtake, and we could remarket that in a very low cost environment. We achieved negative TCs in 2024 and 2025, whereby the smelter pays us to get our concentrates, which is unprecedented. This shows there is a real shortage of concentrates in the smelter business and not just a short-term phenomenon, as we received negative bids out to 2026. The traders don't see the shortage going away," Taseko Mines chief executive Stuart Macdonald told Mining Journal.
The company is thinking of restarting a SX-EW plant at Gibraltar that was idled in 2017, maybe in 2025 or 2026, to process oxide ore from the upper benches of the connector. "There is a leach pad, and this would give us incremental production from the material we cannot put through the mill of possible 5Mlbpa," said MacDonald.
Macdonald, fresh from participating in the Canaccord Genuity Global Metals & Mining Conference in Palm Springs, California, said there was an investor buzz about copper. "It really felt like copper was a focus, and the copper story is being talked about and is well known, particularly the buy versus build aspect for the industry," he said.
Florence
A key feature of the Gibraltar consolidation is the payment over 10 years, which means most of the payment will be due once Taseko has finished building its Florence project in Arizona, USA.
It has drilled the first 10 of 90 production wells, with $230 million of capital to invest before the first copper production, which is forecast for the December quarter of 2025. "We will have Florence running in 2026 as a ramp-up year with 2027 as the first full year at capacity," said MacDonald.
Taseko recently raised $500 million in 8.25% senior secured notes due 2030 to redeem its 7% senior secured notes due 2026. The company reported net income of $18.9 million in the March quarter, which saw it end the quarter with a cash balance of $158 million and about $239 million of available liquidity, including an $80 million revolving credit facility.
"Once we are cash-flow generating from the two mines in 2027, we will be in a position to start building our cash balance and reducing debt. Strengthening our balance sheet will be the first step after we have the second mine running," said MacDonald.
Shares in Taseko Mines are trading at $2.58, valuing the company at $750 million.
