This release should be
read with the Company's Financial Statements and Management
Discussion & Analysis ("MD&A"), available at
www.tasekomines.com and
filed on www.sedar.com. Except where otherwise noted, all currency amounts
are stated in Canadian dollars. Taseko's 87.5% owned Gibraltar Mine
is located north of the City of Williams Lake in south-central
British Columbia. Production and sales volumes stated in this
release are on a 100% basis unless otherwise indicated.
|
VANCOUVER, BC, May 3, 2023
/CNW/ - Taseko Mines Limited (TSX: TKO) (NYSE American: TGB) (LSE:
TKO) ("Taseko" or the "Company") reports first quarter 2023
Adjusted EBITDA* of $36 million,
Earnings from mining operations before depletion* of $41 million and Cash flows provided by operations
of $28 million. Adjusted net income*
was $5 million, or $0.02 per share.
Stuart McDonald, President and
CEO of Taseko, stated, "An average realized copper price of
US$4.02 per pound in the first
quarter helped to drive our strong financial performance.
Production in the first quarter was 25 million pounds of copper and
234 thousand pounds of molybdenum. Copper head grades for the
period were on plan, averaging 0.22%, but production was slightly
below plan due to unexpected mill downtime and operational issues
with the primary crushers. Mining advanced deeper into the
Gibraltar pit which is the sole
source of mill feed this year, and waste stripping ramped up in the
new Connector pit. Initial tons of oxide ore were also mined
from the Connector pit and have been placed on leach pads for
future production when the Gibraltar SX/EW plant restarts.
We have decided to defer the in-pit crusher move until the
spring of 2024, to coincide with planned work on SAG mill #1 to
minimize concentrator downtime."
Mr. McDonald added, "In the first quarter, we increased our
effective interest in Gibraltar to
87.5%, after acquiring a 12.5% stake from one of our joint venture
partners. The transaction closed in mid-March and provides
immediate 17% growth in our attributable copper production.
Additionally, the five-year deferred payment structure allows
Taseko to focus our financial resources on the construction of the
commercial facility at Florence."
"In March, we filed a new technical report** for the
Florence Copper project. The report includes updated capital cost
estimates based on detailed engineering and recent contractor and
vendor quotations. Operating and sustaining capital costs have also
been updated, and refinements have been made to the operating
models based on the Production Test Facility ("PTF") results.
The project has been significantly de-risked in recent years
and has an after-tax Net Present Value (8%) of US$930 million using a long-term copper price of
US$3.75 per pound. The EPA permitting
process continues to advance and we expect a favourable outcome in
the coming months. We are ready to start construction of the
commercial production facility as soon as the final Underground
Injection Control permit is issued," continued Mr. McDonald.
"Considering global economic uncertainties, copper markets
remain remarkably stable and continue to support a healthy price of
about US$3.85 per pound. Demand for
our product remains strong and the long-term supply/demand
fundamentals appear to be favourable. In the short-term, we
continue to maintain our price protection strategy, which provides
a minimum copper price of US$3.75 per
pound for most of Gibraltar's
production for the balance of 2023. Our original production
guidance of 115 million pounds (+/-5%) for 2023 remains unchanged,"
concluded Mr. McDonald.
*Non-GAAP
performance measure. See end of news release
**NI 43-101 Technical Report, Florence Copper Project, Pinal
County, Arizona" dated March 30, 2023. The report has been prepared
for Taseko Mines Limited, a producing issuer, under the supervision
of Richard Tremblay, P.Eng., MBA, Richard Weymark, P.Eng., MBA, and
Robert Rotzinger, P.Eng. Mr. Tremblay is employed by the Company as
Sr. Vice President Operations, Mr. Weymark is Vice President
Engineering and Robert Rotzinger is Vice President Capital
Projects. All three are "Qualified Persons" as defined in National
Instrument 43–101 Standards of Disclosure for Mineral Projects ("NI
43–101").
|
First Quarter Review
- In March 2023, the Company
announced the results of recent technical work and updated
economics for the Florence Copper project. Including updated
modelling, capital expenditures and operating costs, the Florence
Copper project now has an after-tax net present value of
US$930 million (at an 8% discount
rate) with an internal rate of return of 47% and a 2.6 year payback
period;
- First quarter earnings from mining operations before depletion
and amortization* was $41.1 million,
Adjusted EBITDA* was $36.1 million,
and cash flows from operations was $28.0
million;
- GAAP net income was $4.4 million
($0.02 per share) and Adjusted net
income* was $5.1 million
($0.02 per share);
- Gibraltar produced 24.9
million pounds of copper for the quarter which was slightly below
expectations due to unplanned mill downtime that was necessary to
address crusher maintenance and other operational issues;
- Copper head grades in the quarter were 0.22%, similar to recent
quarters and in line with management's expectation;
- Gibraltar sold 26.6 million
pounds of copper in the quarter (100% basis) which contributed to
revenue for Taseko of $115.5 million.
The average realized copper price was US$4.02 per pound for the first quarter, compared
to the LME average price of US$4.05
per pound;
- Total site costs* in the first quarter was $112.8 million on a 100% basis, $6.6 million higher than the previous quarter due
to greater diesel consumption from the higher mining rates and
additional costs incurred for mill maintenance;
- On March 15, 2023, the Company
completed its acquisition of an additional 12.5% interest in the
Gibraltar mine from Sojitz
Corporation ("Sojitz") and now holds an effective 87.5% interest in
the Gibraltar
mine;
- In February 2023, the Company
entered into an agreement to extend the maturity date of its
revolving credit facility by an additional year to July 2026. In addition to the one-year extension,
the lender has also agreed to an accordion feature, which will
allow the amount of the credit facility to be increased to
US$80 million, subject to credit
approval and other conditions; and
- The Company had a closing cash balance of $102 million at March 31,
2023.
HIGHLIGHTS
Operating Data (Gibraltar - 100%
basis)
|
Three months ended March 31,
|
|
2023
|
2022
|
Change
|
Tons mined
(millions)
|
24.1
|
20.3
|
3.8
|
Tons milled
(millions)
|
7.1
|
7.0
|
0.1
|
Production (million
pounds Cu)
|
24.9
|
21.4
|
3.5
|
Sales (million pounds
Cu)
|
26.6
|
27.4
|
(0.8)
|
|
|
|
|
|
Financial Data
|
Three months ended March 31,
|
(Cdn$ in thousands,
except for per share amounts)
|
2023
|
2022
|
Change
|
Revenues
|
115,519
|
118,333
|
(2,814)
|
Earnings from mining
operations before depletion and amortization*
|
41,139
|
42,773
|
(1,634)
|
Cash flows provided by
operations
|
27,999
|
51,753
|
(23,754)
|
Adjusted
EBITDA*
|
36,059
|
38,139
|
(2,080)
|
Adjusted net
income*
|
5,088
|
6,162
|
(1,074)
|
Per share - basic
("Adjusted EPS")*
|
0.02
|
0.02
|
-
|
Net income
(GAAP)
|
4,439
|
5,095
|
(656)
|
Per share - basic
("EPS")
|
0.02
|
0.02
|
-
|
REVIEW OF OPERATIONS
Gibraltar mine
Operating data (100% basis)
|
|
Q1 2023
|
Q4 2022
|
Q3 2022
|
Q2 2022
|
Q1 2022
|
Tons mined
(millions)
|
|
24.1
|
22.9
|
23.2
|
22.3
|
20.3
|
Tons milled
(millions)
|
|
7.1
|
7.3
|
8.2
|
7.7
|
7.0
|
Strip ratio
|
|
1.9
|
1.1
|
1.5
|
2.8
|
2.6
|
Site operating cost per
ton milled (Cdn$)*
|
|
$13.54
|
$13.88
|
$11.33
|
$11.13
|
$11.33
|
Copper concentrate
|
|
|
|
|
|
|
Head grade
(%)
|
|
0.22
|
0.22
|
0.22
|
0.17
|
0.19
|
Copper
recovery (%)
|
|
80.7
|
83.4
|
77.1
|
77.3
|
80.2
|
Production
(million pounds Cu)
|
|
24.9
|
26.7
|
28.3
|
20.7
|
21.4
|
Sales
(million pounds Cu)
|
|
26.6
|
25.5
|
26.7
|
21.7
|
27.4
|
Inventory
(million pounds Cu)
|
|
3.7
|
5.4
|
4.2
|
2.7
|
4.0
|
Molybdenum concentrate
|
|
|
|
|
|
|
Production
(thousand pounds Mo)
|
|
234
|
359
|
324
|
199
|
236
|
Sales
(thousand pounds Mo)
|
|
225
|
402
|
289
|
210
|
229
|
Per unit data (US$ per pound
produced)*
|
|
|
|
|
|
|
Site
operating costs*
|
|
$2.82
|
$2.79
|
$2.52
|
$3.25
|
$2.95
|
By-product
credits*
|
|
(0.37)
|
(0.40)
|
(0.15)
|
(0.15)
|
(0.18)
|
Site operating costs,
net of by-product credits*
|
|
$2.45
|
$2.39
|
$2.37
|
$3.10
|
$2.77
|
Off-property
costs
|
|
0.37
|
0.36
|
0.35
|
0.37
|
0.36
|
Total operating costs
(C1)*
|
|
$2.82
|
$2.75
|
$2.72
|
$3.47
|
$3.13
|
OPERATIONS ANALYSIS
First Quarter Review
Gibraltar produced 24.9 million
pounds of copper for the quarter, a 7% decrease over the fourth
quarter. Copper production in the quarter was impacted by low
mill availabilities due to poor crusher performance and extended
mill shutdowns to troubleshoot mechanical issues. As a
result, mill throughput was approximately 12% below plan for the
period.
Copper head grades of 0.22% were in line with recent quarters
and management expectations. Copper recoveries in the first
quarter were 80.7% and while above the average achieved for 2022,
were impacted by operating variability in the concentrators.
Mine operations went as planned in the quarter and a total of
24.1 million tons were mined. The ore stockpiles increased by 0.4
million tons in the first quarter and 0.8 million tons of oxide ore
from the Connector pit was placed on the heap leach pads. This
oxide ore will be processed in future years when Gibraltar's solvent extraction and
electrowinning ("SX/EW") plant is restarted.
Total site costs* at Gibraltar
of $112.8 million were $6.6 million higher than last quarter due to
greater diesel fuel consumption from the higher mining rates and
increased mill maintenance costs incurred to address mechanical
issues.
Molybdenum production was 234 thousand pounds in the first
quarter. At an average molybdenum price of US$32.79 per pound and with inclusion of the
impact of favorable provisional price adjustments, molybdenum
generated a by-product credit of US$0.37 per pound of copper produced in the first
quarter.
Off-property costs per pound produced* were US$0.37 and were generally in line with recent
quarters.
Total operating costs per pound produced (C1)* were US$2.82 for the quarter, compared to US$3.13 in the same period in 2022 with key
variances summarized in the bridge graph below:
GIBRALTAR OUTLOOK
The Gibraltar pit will continue
to be the sole source of mill feed in 2023 and the quarterly
production profile is expected to be less variable than 2022 due to
improving quality and consistency of ore as mining progresses
deeper into the pit. Waste stripping will continue in the new
Connector pit and initial mill feed from this pit is planned for
2024. The in-pit crusher that currently sits over the
Connector ore zone was planned to be relocated in the third quarter
of this year, but will now be deferred to spring of 2024.
This results in increased mill production in the current
year, and allows the timing of the crusher move to align with a
maintenance shutdown that is required for the mill #1 SAG mill.
The technical information contained in this MD&A related to
the Gibraltar mine has been
reviewed and approved by Richard
Weymark, P.Eng., MBA, VP Engineering, who is a Qualified
Person in accordance with the requirements of NI 43-101.
Gibraltar is expected to
produce 115 million pounds of copper (+/-5%) in 2023 on a 100%
basis.
Strong metal prices combined with our copper hedge protection
continues to provide stable operating margins at the Gibraltar mine. Copper prices in the first
quarter averaged US$4.05 per pound
which is slightly higher than the 2022 average of US$3.99 per pound. Molybdenum prices are
currently US$20.88 per pound, which
is 11% higher than the average price in 2022. The Company currently
has copper price collar contracts in place that secure a minimum
copper price of US$3.75 per pound for
52 million pounds of copper until December
31, 2023.
ACQUISITION OF ADDITIONAL 12.5%
INTEREST IN GIBRALTAR
On March 15, 2023, the Company
completed the acquisition of an additional 12.5% interest in the
Gibraltar mine from Sojitz.
Gibraltar is operated through a
joint venture which is owned 75% by Taseko and 25% by Cariboo
Copper Corporation ("Cariboo"). Under the terms of the agreement,
Taseko has acquired Sojitz's 50% interest in Cariboo and now holds
an effective 87.5% interest in the Gibraltar mine. The other 50% of Cariboo is
held equally by Dowa Metals & Mining Co., Ltd. ("Dowa") and
Furukawa Co. Ltd. ("Furukawa").
The acquisition price consists of a minimum amount of
$60 million payable over a five-year
period and potential contingent payments depending on Gibraltar mine copper revenues and copper
prices over the next five years. An initial $10 million has been paid to Sojitz on closing
and the remaining minimum amount will be paid in $10 million annual instalments over the next five
years. There is no interest payable on the minimum amounts and the
amounts payable to Sojitz are secured against shareholder loans
owing from Cariboo to Taseko.
The contingent payments are payable annually for five years only
if the average LME copper price exceeds US$3.50 per pound in a year. The payments will be
calculated by multiplying Gibraltar mine copper revenues by a price
factor, which is based on a sliding scale ranging from 0.38% at
US$3.50 per pound copper to a maximum
of 2.13% at US$5.00 per pound copper
or above. Total contingent payments cannot exceed $57 million over the five-year period, limiting
the acquisition cost to a maximum of $117
million.
Taseko will become a party to the existing Cariboo shareholders
agreement with Dowa and Furukawa. There will be no change to the
offtake contracts established in 2010 and Dowa and Furukawa will
continue to receive 30% of Gibraltar's copper concentrate offtake. There
will be no impact to the operation of the Gibraltar Joint
Venture.
FLORENCE COPPER
The Company is awaiting the issuance of the final Underground
Injection Control ("UIC") permit from the U.S. Environmental
Protection Agency ("EPA"), which is the final permitting step
required prior to construction commencing on the commercial
production facility. The EPA is currently addressing comments
that were received during the public comment period, which was held
in the fall of 2022. Public comments submitted to the EPA
have demonstrated strong support for the Florence Copper project
among local residents, business organizations, community leaders
and state-wide organizations.
In December 2022, the Company
signed agreements with Mitsui & Co. (U.S.A.) Inc. ("Mitsui") to
form a strategic partnership to develop Florence Copper.
Mitsui has committed to an initial investment of US$50 million which is conditional on receipt of
the final UIC permit, with proceeds to be used for construction of
the commercial production facility. The initial investment will be
in the form of a copper stream agreement on 2.67% of the copper
produced at Florence Copper. In addition, Mitsui has the option to
invest an additional US$50 million
(for a total investment of US$100
million) for a 10% equity interest in Florence Copper.
Detailed engineering and design for the commercial production
facility is substantially completed and procurement activities are
well advanced. The Company has purchased the major processing
equipment associated with the SX/EW plant and the equipment has now
been delivered to the Florence
site. The Company is well positioned to transition into
construction once the final UIC permit is received. The Company
incurred $9.9 million of capital
expenditures at the Florence
project in the first quarter of 2023.
In March 2023, the Company
announced the results of recent technical work and updated
economics for the Florence Copper project. The Company has filed a
new technical report entitled "NI 43-101 Technical Report –
Florence Copper Project, Pinal County,
Arizona" dated March 30, 2023
(the "Technical Report") on SEDAR. The Technical Report was
prepared in accordance with NI 43-101 and incorporates updated
capital and operating costs for the commercial production facility
and refinements made to the operating models, based on the
Production Test Facility ("PTF") results.
The technical work completed by Taseko in recent years has been
extensive and has de-risked the project significantly. The PTF
operated successfully over an 18-month period and provided a
valuable opportunity to test operational controls and strategies
which will be applied in future commercial operations. In addition,
a more sophisticated leaching model has been developed and
calibrated to the PTF wellfield performance. This detailed modeling
data, along with updated costing, has been used to update
assumptions for the ramp up and operation of the commercial
wellfield and processing facility.
Florence Copper Project Highlights:
- Net present value of US$930
million (after-tax at an 8% discount rate)
- Internal rate of return of 47% (after-tax)
- Payback period of 2.6 years
- Operating costs (C1) of US$1.11
per pound of copper
- Annual production capacity of 85 million pounds of LME grade A
cathode copper
- 22 year mine life
- Total life of mine production of 1.5 billion pounds of
copper
- Total estimated initial capital cost of US$232 million remaining
- Long-term copper price of US$3.75
per pound
The technical information contained in this MD&A related to
the Florence Copper Project has been prepared by Richard Weymark, P.Eng., MBA, VP Engineering,
Rob Rotzinger, P.Eng., VP Capital
Projects, and Richard Tremblay,
P.Eng., MBA, Senior VP Operations, who are Qualified Persons in
accordance with the requirements of NI 43-101.
LONG-TERM GROWTH STRATEGY
Taseko's strategy has been to grow the Company by acquiring and
developing a pipeline of complementary projects focused on copper
in stable mining jurisdictions. We continue to believe this will
generate long-term returns for shareholders. Our other development
projects are located in British Columbia.
Yellowhead Copper Project
Yellowhead Mining Inc. ("Yellowhead") has an 817 million tonnes
reserve and a 25-year mine life with a pre-tax net present value of
$1.3 billion at an 8% discount rate
using a US$3.10 per pound copper
price based on the Company's 2020 NI 43-101 technical report.
Capital costs of the project are estimated at $1.3 billion over a 2-year construction
period. Over the first 5 years of operation, the copper
equivalent grade will average 0.35% producing an average of 200
million pounds of copper per year at an average C1* cost, net of
by-product credit, of US$1.67 per
pound of copper. The Yellowhead copper project contains
valuable precious metal by-products with 440,000 ounces of
gold and 19 million ounces of silver with a life of mine value of
over $1 billion at current
prices.
The Company is preparing to advance into the environmental
assessment process and is undertaking some additional engineering
work in conjunction with ongoing engagement with local communities
including First Nations. The Company is also collecting baseline
data and modeling which will be used to support the environmental
assessment and permitting of the project.
The technical information contained in this MD&A related to
the Yellowhead Copper Project has been prepared by Richard Weymark, P.Eng., MBA, VP Engineering,
who is a Qualified Person in accordance with the requirements of NI
43-101.
New Prosperity Gold-Copper Project
In late 2019, the Tŝilhqot'in Nation, as represented by
Tŝilhqot'in National Government, and Taseko entered into a
confidential dialogue, with the involvement of the Province of
British Columbia, in order to
obtain a long-term resolution of the conflict regarding Taseko's
proposed copper-gold mine previously known as New Prosperity,
acknowledging Taseko's commercial interests and the Tŝilhqot'in
Nation's opposition to the project.
This dialogue has been supported by the parties' agreement,
beginning December 2019, to a series
of one-year standstills on certain outstanding litigation and
regulatory matters relating to Taseko's tenures and the area in the
vicinity of Teẑtan Biny (Fish Lake). The standstill agreement was
most recently extended for a fourth one-year term in December 2022, with the goal of providing time
and opportunity for the Tŝilhqot'in Nation and Taseko to negotiate
a final resolution.
The dialogue process has made tangible progress in the past 12
months but is not complete. In agreeing to extend the standstill
through 2023, the Tŝilhqot'in Nation and Taseko acknowledge the
constructive nature of discussions to date, and the future
opportunity to conclude a long-term and mutually acceptable
resolution of the conflict that also makes an important
contribution to the goals of reconciliation in Canada.
Aley Niobium Project
Environmental monitoring and product marketing initiatives on
the Aley niobium project continue. The converter pilot test is
ongoing and is providing additional process data to support the
design of the commercial process facilities and will provide final
product samples for marketing purposes. The Company has also
initiated a scoping study to investigate the potential production
of niobium oxide at Aley to supply the growing market for
niobium-based batteries.
The Company will host a
telephone conference call and live webcast on Thursday, May 4, 2023
at 11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these
results. After opening remarks by management, there will be a
question and answer session open to analysts and investors.
To join the conference
call without operator assistance, you may pre-register
at https://bit.ly/3KQ1b1u to receive an instant automated
call back just prior to the start of the conference call.
Otherwise, the conference call may be accessed by dialing
888-390-0546 toll free, 416-764-8688 in Canada, or online
at tasekomines.com/investors/events.
The conference call
will be archived for later playback until May 19, 2022 and can be
accessed by dialing 888-390-0541 toll free, 416-764-8677 in Canada,
or online at tasekomines.com/investors/events using the passcode
707779#.
|
Stuart McDonald
President & CEO
No regulatory authority has approved or
disapproved of the information in this news release.
NON-GAAP PERFORMANCE MEASURES
This document includes certain non-GAAP performance measures
that do not have a standardized meaning prescribed by IFRS. These
measures may differ from those used by, and may not be comparable
to such measures as reported by, other issuers. The Company
believes that these measures are commonly used by certain
investors, in conjunction with conventional IFRS measures, to
enhance their understanding of the Company's performance. These
measures have been derived from the Company's financial statements
and applied on a consistent basis. The following tables below
provide a reconciliation of these non-GAAP measures to the most
directly comparable IFRS measure.
Total operating costs and site operating costs, net of
by-product credits
Total costs of sales include all costs absorbed into inventory,
as well as transportation costs and insurance recoverable. Site
operating costs are calculated by removing net changes in
inventory, depletion and amortization, insurance recoverable, and
transportation costs from cost of sales. Site operating costs, net
of by-product credits is calculated by subtracting by-product
credits from the site operating costs. Site operating costs, net of
by-product credits per pound are calculated by dividing the
aggregate of the applicable costs by copper pounds produced. Total
operating costs per pound is the sum of site operating costs, net
of by-product credits and off-property costs divided by the copper
pounds produced. By-product credits are calculated based on actual
sales of molybdenum (net of treatment costs) and silver during the
period divided by the total pounds of copper produced during the
period. These measures are calculated on a consistent basis for the
periods presented.
(Cdn$ in thousands,
unless otherwise indicated) –
75% basis (except for
Q1 2023)
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
Cost of
sales
|
86,407
|
73,112
|
84,204
|
90,992
|
89,066
|
Less:
|
|
|
|
|
|
Depletion and
amortization
|
(12,027)
|
(10,147)
|
(13,060)
|
(15,269)
|
(13,506)
|
Net change in
inventories of finished goods
|
(399)
|
1,462
|
2,042
|
(3,653)
|
(7,577)
|
Net change in
inventories of ore stockpiles
|
5,561
|
18,050
|
3,050
|
(3,463)
|
(3,009)
|
Transportation
costs
|
(5,104)
|
(6,671)
|
(6,316)
|
(4,370)
|
(5,115)
|
Site operating
costs
|
74,438
|
75,806
|
69,920
|
64,237
|
59,859
|
Less by-product
credits:
|
|
|
|
|
|
Molybdenum, net
of treatment costs
|
(9,208)
|
(11,022)
|
(4,122)
|
(3,023)
|
(3,831)
|
Silver,
excluding amortization of deferred revenue
|
(160)
|
263
|
25
|
36
|
202
|
Site operating costs,
net of by-product credits
|
65,070
|
65,047
|
65,823
|
61,250
|
56,230
|
Total copper produced
(thousand pounds)
|
19,491
|
20,020
|
21,238
|
15,497
|
16,024
|
Total costs per pound
produced
|
3.34
|
3.25
|
3.10
|
3.95
|
3.51
|
Average exchange rate
for the period (CAD/USD)
|
1.35
|
1.36
|
1.31
|
1.28
|
1.27
|
Site operating costs, net of by-product
credits
(US$ per pound)
|
2.47
|
2.39
|
2.37
|
3.10
|
2.77
|
Site operating costs,
net of by-product credits
|
65,070
|
65,047
|
65,823
|
61,250
|
56,230
|
Add off-property
costs:
|
|
|
|
|
|
Treatment and
refining costs
|
4,142
|
3,104
|
3,302
|
2,948
|
2,133
|
Transportation
costs
|
5,104
|
6,671
|
6,316
|
4,370
|
5,115
|
Total operating
costs
|
74,316
|
74,822
|
75,441
|
68,568
|
63,478
|
Total operating costs (C1) (US$ per
pound)
|
2.82
|
2.75
|
2.72
|
3.47
|
3.13
|
1 Q1 2023
includes the impact from the March 15, 2023 acquisition of Cariboo
from Sojitz, which increased the Company's Gibraltar mine ownership
from 75% to 87.5%.
|
Total Site Costs
Total site costs is comprised of the site operating costs
charged to cost of sales as well as mining costs capitalized to
property, plant and equipment in the period. This measure is
intended to capture Taseko's share of the total site operating
costs incurred in the quarter at the Gibraltar mine calculated on a consistent
basis for the periods presented.
(Cdn$ in thousands,
unless otherwise indicated) –
75% basis (except for
Q1 2023)
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
Site operating
costs
|
74,438
|
75,806
|
69,920
|
64,237
|
59,859
|
Add:
|
|
|
|
|
|
Capitalized
stripping costs
|
12,721
|
3,866
|
1,121
|
11,887
|
15,142
|
Total site costs – Taseko share
|
87,159
|
79,672
|
71,041
|
76,124
|
75,001
|
Total site costs – 100% basis
|
112,799
|
106,230
|
94,721
|
101,500
|
100,002
|
1 Q1 2023
includes the impact from the March 15, 2023 acquisition of Cariboo
from Sojitz, which increased the Company's Gibraltar mine ownership
from 75% to 87.5%.
|
Adjusted net income (loss)
Adjusted net income (loss) removes the effect of the following
transactions from net income as reported under IFRS:
- Unrealized foreign currency gain/loss;
- Unrealized gain/loss on derivatives; and
- Loss on settlement of long-term debt and call premium,
including realized foreign exchange gains.
Management believes these transactions do not reflect the
underlying operating performance of our core mining business and
are not necessarily indicative of future operating results.
Furthermore, unrealized gains/losses on derivative instruments,
changes in the fair value of financial instruments, and unrealized
foreign currency gains/losses are not necessarily reflective of the
underlying operating results for the reporting periods
presented.
(Cdn$ in thousands,
except per share amounts)
|
2023
Q1
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Net income (loss)
|
4,439
|
(2,275)
|
(23,517)
|
(5,274)
|
Unrealized
foreign exchange (gain) loss
|
(950)
|
(5,279)
|
28,083
|
11,621
|
Unrealized
(gain) loss on derivatives
|
2,190
|
20,137
|
(72)
|
(30,747)
|
Estimated tax
effect of adjustments
|
(591)
|
(5,437)
|
19
|
8,302
|
Adjusted net income (loss)
|
5,088
|
7,146
|
4,513
|
(16,098)
|
Adjusted EPS
|
0.02
|
0.02
|
0.02
|
(0.06)
|
(Cdn$ in thousands,
except per share amounts)
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
2021
Q2
|
Net income
|
5,095
|
11,762
|
22,485
|
13,442
|
Unrealized
foreign exchange (gain) loss
|
(4,398)
|
(1,817)
|
9,511
|
(3,764)
|
Unrealized
(gain) loss on derivatives
|
7,486
|
4,612
|
(6,817)
|
370
|
Estimated tax
effect of adjustments
|
(2,021)
|
(1,245)
|
1,841
|
(100)
|
Adjusted net income
|
6,162
|
13,312
|
27,020
|
9,948
|
Adjusted EPS
|
0.02
|
0.05
|
0.10
|
0.04
|
Adjusted EBITDA
Adjusted EBITDA is presented as a supplemental measure of the
Company's performance and ability to service debt. Adjusted EBITDA
is frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in the industry,
many of which present Adjusted EBITDA when reporting their
results. Issuers of "high yield" securities also present
Adjusted EBITDA because investors, analysts and rating agencies
consider it useful in measuring the ability of those issuers to
meet debt service obligations.
Adjusted EBITDA represents net income before interest, income
taxes, and depreciation and eliminates the impact of a number of
items that are not considered indicative of ongoing operating
performance. Certain items of expense are added and certain items
of income are deducted from net income that are not likely to recur
or are not indicative of the Company's underlying operating results
for the reporting periods presented or for future operating
performance and consist of:
- Unrealized foreign exchange gains/losses;
- Unrealized gain/loss on derivatives;
- Amortization of share-based compensation expense.
(Cdn$ in
thousands)
|
2023
Q1
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Net income (loss)
|
4,439
|
(2,275)
|
(23,517)
|
(5,274)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
12,027
|
10,147
|
13,060
|
15,269
|
Finance
expense
|
12,309
|
10,135
|
12,481
|
12,236
|
Finance
income
|
(921)
|
(700)
|
(650)
|
(282)
|
Income tax
expense
|
3,356
|
1,222
|
3,500
|
922
|
Unrealized
foreign exchange (gain) loss
|
(950)
|
(5,279)
|
28,083
|
11,621
|
Unrealized
(gain) loss on derivatives
|
2,190
|
20,137
|
(72)
|
(30,747)
|
Amortization of
share-based compensation expense (recovery)
|
3,609
|
1,794
|
1,146
|
(2,061)
|
Adjusted EBITDA
|
36,059
|
35,181
|
34,031
|
1,684
|
(Cdn$ in
thousands)
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
2021
Q2
|
Net income
|
5,095
|
11,762
|
22,485
|
13,442
|
Add:
|
|
|
|
|
Depletion and
amortization
|
13,506
|
16,202
|
17,011
|
17,536
|
Finance
expense
|
12,155
|
12,072
|
11,875
|
11,649
|
Finance
income
|
(166)
|
(218)
|
(201)
|
(184)
|
Income tax
expense
|
1,188
|
9,300
|
22,310
|
7,033
|
Unrealized
foreign exchange (gain) loss
|
(4,398)
|
(1,817)
|
9,511
|
(3,764)
|
Unrealized
(gain) loss on derivatives
|
7,486
|
4,612
|
(6,817)
|
370
|
Amortization of
share-based compensation expense
|
3,273
|
1,075
|
117
|
1,650
|
Adjusted EBITDA
|
38,139
|
52,988
|
76,291
|
47,732
|
Earnings from mining operations before depletion and
amortization
Earnings from mining operations before depletion and
amortization is earnings from mining operations with depletion and
amortization added back. The Company discloses this measure, which
has been derived from our financial statements and applied on a
consistent basis, to provide assistance in understanding the
results of the Company's operations and financial position and it
is meant to provide further information about the financial results
to investors.
|
Three months ended March 31,
|
(Cdn$ in
thousands)
|
2023
|
2022
|
Earnings from mining operations
|
29,112
|
29,267
|
Add:
|
|
|
Depletion and
amortization
|
12,027
|
13,506
|
Earnings from mining operations before depletion and
amortization
|
41,139
|
42,773
|
Site operating costs per ton milled
(Cdn$ in thousands,
except per ton milled amounts)
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
Site operating costs (included in cost of
sales)
|
74,438
|
75,806
|
69,920
|
64,237
|
59,859
|
|
|
|
|
|
|
Tons milled (thousands)
(75% basis except for Q1 2023)
|
5,498
|
5,462
|
6,172
|
5,774
|
5,285
|
Site operating costs per ton
milled
|
$13.54
|
$13.88
|
$11.33
|
$11.13
|
$11.33
|
1 Q1 2023
includes the impact from the March 15, 2023 acquisition of Cariboo
from Sojitz, which increased the Company's Gibraltar mine ownership
from 75% to 87.5%.
|
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 effect of COVID-19 and the response of
local, provincial, federal and international governments to the
threat of COVID-19 on our operations (including our suppliers,
customers, supply chain, employees and contractors) and economic
conditions generally and in particular with respect to the demand
for copper and other metals we produce;
- 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 the ability to obtain necessary
licenses permits for development projects and project delays due to
third party opposition;
- uncertainties related to unexpected 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.
Cautionary Statement on Forward-Looking Information
This discussion includes certain statements that may be deemed
"forward-looking statements". All statements in this
discussion, other than statements of historical facts, that address
future production, reserve potential, exploration drilling,
exploitation activities, and events or developments that the
Company expects are forward-looking statements. Although we
believe the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual
results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration
successes, continued availability of capital and financing and
general economic, market or business conditions. Investors
are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ
materially from those projected in the forward-looking
statements. All of the forward-looking statements made in
this MD&A are qualified by these cautionary statements.
We disclaim any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except to the extent required by
applicable law. Further information concerning risks and
uncertainties associated with these forward-looking statements and
our business may be found in our most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian provincial
securities regulatory authorities.
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SOURCE Taseko Mines Limited