Taseko
Acquires 100% of Gibraltar Mine
March 25, 2024, VANCOUVER,
BC -- Taseko
Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) ("Taseko" or
the "Company") is pleased to announce that it has entered into a
definitive agreement, effective March 25,
2024, ("Agreement") to acquire the remaining 12.5% interest
in the Gibraltar Mine from Dowa Metals & Mining Co., Ltd.
("Dowa") and Furukawa Co., Ltd. ("Furukawa"). Under the
terms of the Agreement, Taseko will acquire Dowa and Furukawa's
shares in Cariboo Copper Corp ("Cariboo") and will then own 100% of
Cariboo shares and have an effective 100% interest in the Gibraltar
Mine.
All
amounts in this press release are stated in Canadian dollars (C$)
unless otherwise specified.
The
acquisition price consists of a minimum amount of $117 million payable over a period of ten years
and potential contingent payments depending on copper prices and
Gibraltar's cashflow. An initial
$5 million will be paid to Dowa and
Furukawa ($2.5 million each) shortly
following closing and the remaining amounts will be settled with
annual payments commencing in March
2026.
Stuart McDonald, President & CEO of Taseko, commented,
"We are happy to once again own 100% of the Gibraltar mine, our foundational asset, which
will continue to generate strong returns for the Company for many
years to come.
This
acquisition provides 14% growth in our attributable copper
production, and is immediately cashflow accretive as we advance
construction at our Florence Copper Project.
We also
receive additional offtake rights as the Cariboo offtake contract
comes back to Taseko, providing potential cost savings and
longer-term strategic benefits as we continue to develop our North
American copper production profile."
"We have
established a positive relationship with Dowa and Furukawa over the
last 14 years. Given that
both groups are reducing their copper smelting businesses and are
exiting their copper mining investments, we've been
able to
structure this exit from our long-term partnership in a mutually
beneficial manner," concluded Mr. McDonald.
Terms
of the acquisition
An initial
$5 million payment will be made to
Dowa and Furukawa shortly following closing.
The
remaining cash consideration will be repayable in annual payments
commencing in March
2026.
The annual
payments will be based on the average LME copper price of the
previous calendar year, subject to an annual cap based on a
percentage of cashflow from the Gibraltar Mine.
At copper
prices below US$4.00 per pound, the
annual payment will be $5 million,
increasing pro-rata to a maximum annual payment of $15.25 million at copper prices of US$5.00 per pound or higher. The
annual payments also can not exceed 6.25% of Gibraltar's annual cashflow for the 2025 to
2028 calendar years, and 10% of Gibraltar's cashflow for the 2029 to 2033
calendar years.
Any
outstanding balance on the minimum acquisition amount of
$117 million will be repayable in a
final balloon payment in March
2034.
Total
consideration is capped at $142
million, limiting the contingent consideration to a maximum
of $25 million.
In
addition, Taseko has the option to settle the full acquisition
price at any time prior to 2029 by making total payments of
$117 million.
The
Company's minimum payment obligations are in the form of loans from
Dowa and Furukawa to Cariboo.
The loans
are guaranteed by Taseko, and a portion of the loans are secured by
Cariboo's 25% joint venture interest in the Gibraltar
Mine.
The loans
contain minimum protective covenants including the requirement not
to amend the joint venture agreement for the Gibraltar mine, or sell Cariboo's 25% interest
in the joint venture.
Under the
Cariboo offtake arrangements entered into in 2010, Dowa and
Furukawa were entitled to receive 30% of Gibraltar's copper concentrate offtake for the
life of mine, at benchmark terms.
Upon
closing of this acquisition, the Cariboo offtake agreement will be
terminated and Taseko will retain full marketing rights for 100% of
Gibraltar's concentrate offtake
going forward.
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.
Stuart McDonald
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
about the future market price of copper and the other metals that
we produce or may seek to produce;
-
changes in
general economic conditions, the financial markets, inflation and
interest rates and in the demand and market price for our input
costs, such as diesel fuel, reagents, 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;
-
inherent
risks associated with mining operations, including our current
mining operations at Gibraltar,
and their potential impact on our ability to achieve our production
estimates;
-
uncertainties
as to our ability to control our operating costs, including
inflationary cost pressures at Gibraltar without impacting our planned copper
production;
-
uncertainties
related to the accuracy of our estimates of Mineral Reserves (as
defined below), Mineral Resources (as defined below), production
rates and timing of production, future production and future cash
and total costs of production and milling;
-
the risk
that we may not be able to expand or replace reserves as our
existing mineral reserves are mined;
-
our
ability to comply with the extensive governmental regulation to
which our business is subject;
-
uncertainties
related to First Nations claims and consultation
issues;
-
our
reliance on rail transportation and port terminals for shipping our
copper concentrate production from Gibraltar;
-
uncertainties
related to unexpected judicial or regulatory
proceedings;
-
changes
in, and the effects of, the laws, regulations and government
policies affecting our mining operations and mine closure and
bonding requirements;
-
our
dependence solely on our interest in Gibraltar (as defined below) for revenues and
operating cashflows;
-
our
ability to collect payments from customers, extend existing
concentrate off-take agreements or enter into new
agreements;
-
environmental
issues and liabilities associated with mining including processing
and stock piling ore;
-
labour
strikes, work stoppages, or other interruptions to, or difficulties
in, the employment of labour in markets in which we operate our
mine, industrial accidents, equipment failure or other events or
occurrences, including third party interference that interrupt the
production of minerals in our mine;
-
environmental
hazards and risks associated with climate change, including the
potential for damage to infrastructure and stoppages of operations
due to forest fires, flooding, drought, or other natural events in
the vicinity of our operations;
-
litigation
risks and the inherent uncertainty of litigation;
-
our actual
costs of reclamation and mine closure may exceed our current
estimates of these liabilities;
-
our
ability to meet the financial reclamation security requirements for
the Gibraltar mine ;
-
the
capital intensive nature of our business both to sustain current
mining operations;
-
our
reliance upon key management and operating personnel;
-
the
competitive environment in which we operate;
-
the
effects of forward selling instruments to protect against
fluctuations in copper prices, foreign exchange, interest rates or
input costs such as fuel;
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.sedarplus.ca, including the "Risk
Factors" included in our Annual Information Form.