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, Aug. 2, 2023
/PRNewswire/ - Taseko Mines Limited (TSX: TKO) (NYSE American: TGB)
(LSE: TKO) ("Taseko" or the "Company") reports second quarter 2023
Adjusted EBITDA* of $22 million,
Earnings from mining operations before depletion and amortization*
of $28 million and Cash flows
provided by operations of $33
million. Adjusted net loss* was $4
million, or $0.02 per
share.
Gibraltar produced 28 million
pounds of copper and 230 thousand pounds of molybdenum in the
second quarter. Copper production was 13% higher than the
prior quarter as a result of higher grade, throughput and
recoveries. Sales for the second quarter were 26 million
pounds of copper (100% basis), slightly lower than the prior
quarter, and also lower than second quarter production due to an
increase of inventory in transit at the end of June.
Stuart McDonald, President and
CEO of Taseko, commented "Mining operations are now well
established in the lower benches of the Gibraltar pit, which have higher grades and
larger, more consistent ore zones. Low mill availabilities
had an impact on production in April and May, but in June and July
we benefited from the softer ore in the Gibraltar pit and mill throughput averaged
well above nameplate capacity. Copper production in June and
July was 11 million pounds in each month. The Gibraltar pit will be the sole source of ore
for the remainder of 2023. With increased copper production
expected in the second half of the year we continue to track
towards our original production guidance of 115 million pounds of
copper (+/-5%)."
"Total site costs* at Gibraltar
dropped by $7 million over the
previous quarter due to lower diesel and other costs, although the
impact of cost reductions was partially offset by lower molybdenum
prices which reduced the by-product credit. Overall, unit
operating costs dropped to US$2.66
per pound of copper produced, 10% lower than the first quarter, and
is expected to decline further in the second half of the year as
production increases.
Capital spending at Gibraltar
was higher than normal in the quarter as work continued on the
in-pit crusher relocation project and we completed a major
component replacement on one of our mining shovels, at a cost of
$10 million. Work on the in-pit
crusher will wind down in the third quarter and the project will be
completed in the second quarter of 2024 when the crusher is
relocated," added Mr. McDonald.
Mr. McDonald concluded, "At Florence Copper, the Environmental
Protection Agency ("EPA") is advancing its process for the
Underground Injection Control permit. Based on our latest
dialogue with the EPA, we believe they are close to making a final
permit decision. In the meantime, we continue to advance
discussions with potential financing partners for the remainder of
the project financing package, which could include a copper royalty
and/or a small project loan. These transactions would complement
the committed funding from Mitsui, Bank of America, and our
revolving credit facility."
Second Quarter Review
- Second quarter earnings from mining operations before depletion
and amortization* was $27.7 million,
Adjusted EBITDA* was $22.2 million,
and cash flows from operations were $33.3
million;
- GAAP net income was $10.0 million
($0.03 per share) and Adjusted net
loss* was $4.4 million ($0.02 loss per share) after normalizing for
unrealized foreign exchange gains
- Gibraltar produced 28.2
million pounds of copper for the quarter, a 13% improvement over
the prior quarter as a result of improved grades, recoveries and
mill throughput;
- Copper head grades in the quarter were 0.24%, in line with
expectations, as mining progressed deeper in the Gibraltar pit;
- Gibraltar sold 26.1 million
pounds of copper in the second quarter (100% basis) with sales
lagging production due to an increase of inventory in transit at
the end of June;
- Total site costs* in the second quarter were $105.4 million on a 100% basis, $7.4 million lower than the previous quarter due
to lower diesel, explosive and contractor services costs;
- As a result of commodity price decreases in the quarter, the
Company wrote-down lower grade ore stockpile inventory to net
realizable values totalling $8.1
million (an impact of approximately $0.03 per share);
- On June 28, 2023, the Company
entered into a second amendment to its silver stream agreement with
Osisko Gold Royalties Ltd. and received $13.6 million in exchange for increasing the
payable silver from 75% to 87.5% and increasing the threshold
delivery amount of silver for the additional mineral reserves
published in 2022;
- In June, the Company amended its revolving credit facility to
increase the amount of credit approval of the facility from
US$50 million to US$80 million with the addition of ING Capital
LLC to the syndicate of lenders;
- The Company had a closing cash balance of $86 million at June 30,
2023; and
- The B.C. port labour strike in the first half of July 2023 did not have any impact on Gibraltar production but did restrict the
mine's ability to ship concentrate after the quarter end. The
backlog of Gibraltar concentrate
inventory is expected to be shipped in the second half of the
year.
*Non-GAAP performance measure. See end of news
release
HIGHLIGHTS
Operating Data
(Gibraltar - 100% basis)
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Tons mined
(millions)
|
23.4
|
22.3
|
1.1
|
47.5
|
42.6
|
4.9
|
Tons milled
(millions)
|
7.2
|
7.7
|
(0.5)
|
14.3
|
14.7
|
(0.4)
|
Production (million
pounds Cu)
|
28.2
|
20.7
|
7.5
|
53.1
|
42.0
|
11.1
|
Sales (million pounds
Cu)
|
26.1
|
21.7
|
4.4
|
52.7
|
49.1
|
3.6
|
Financial
Data
|
Three months ended
June 30,
|
Six months ended
June 30,
|
(Cdn$ in thousands,
except for per share amounts)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Revenues
|
111,924
|
82,944
|
28,980
|
227,443
|
201,277
|
26,166
|
Earnings from mining
operations before depletion
and amortization*
|
27,664
|
7,221
|
20,443
|
68,803
|
49,994
|
18,809
|
Cash flows provided by
operations
|
33,269
|
18,344
|
14,925
|
61,268
|
70,097
|
(8,829)
|
Adjusted
EBITDA*
|
22,218
|
1,684
|
20,534
|
58,277
|
39,823
|
18,454
|
Net income (loss)
(GAAP)
|
9,991
|
(5,274)
|
15,265
|
14,430
|
(179)
|
14,609
|
Per share – basic
("EPS")
|
0.03
|
(0.02)
|
0.05
|
0.05
|
-
|
0.05
|
Adjusted net income
(loss)*
|
(4,376)
|
(16,098)
|
11,722
|
712
|
(9,936)
|
10,648
|
Per share – basic
("adjusted EPS")*
|
(0.02)
|
(0.06)
|
0.04
|
-
|
(0.03)
|
0.03
|
*Non-GAAP performance measure. See end of news
release
REVIEW OF OPERATIONS
Gibraltar mine
Operating data (100%
basis)
|
|
Q2
2023
|
Q1
2023
|
Q4
2022
|
Q3
2022
|
Q2
2022
|
Tons mined
(millions)
|
|
23.4
|
24.1
|
22.9
|
23.2
|
22.3
|
Tons milled
(millions)
|
|
7.2
|
7.1
|
7.3
|
8.2
|
7.7
|
Strip ratio
|
|
1.5
|
1.9
|
1.1
|
1.5
|
2.8
|
Site operating cost per
ton milled (Cdn$)*
|
|
$13.17
|
$13.54
|
$13.88
|
$11.33
|
$11.13
|
Copper
concentrate
|
|
|
|
|
|
|
Head grade
(%)
|
|
0.24
|
0.22
|
0.22
|
0.22
|
0.17
|
Copper
recovery (%)
|
|
81.9
|
80.7
|
83.4
|
77.1
|
77.3
|
Production
(million pounds Cu)
|
|
28.2
|
24.9
|
26.7
|
28.3
|
20.7
|
Sales
(million pounds Cu)
|
|
26.1
|
26.6
|
25.5
|
26.7
|
21.7
|
Inventory
(million pounds Cu)
|
|
5.6
|
3.7
|
5.4
|
4.2
|
2.7
|
Molybdenum
concentrate
|
|
|
|
|
|
|
Production
(thousand pounds Mo)
|
|
230
|
234
|
359
|
324
|
199
|
Sales
(thousand pounds Mo)
|
|
231
|
225
|
402
|
289
|
210
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
|
Site
operating costs*
|
|
$2.43
|
$2.94
|
$2.79
|
$2.52
|
$3.25
|
By-product
credits*
|
|
(0.13)
|
(0.37)
|
(0.40)
|
(0.15)
|
(0.15)
|
Site operating costs,
net of by-product credits*
|
|
$2.30
|
$2.57
|
$2.39
|
$2.37
|
$3.10
|
Off-property
costs
|
|
0.36
|
0.37
|
0.36
|
0.35
|
0.37
|
Total operating costs
(C1)*
|
|
$2.66
|
$2.94
|
$2.75
|
$2.72
|
$3.47
|
OPERATIONS ANALYSIS
Gibraltar produced 28.2 million
pounds of copper for the second quarter, a 13% increase over the
first quarter due to higher mill throughput, ore grade and
recoveries. As mining progressed deeper into the Gibraltar pit, ore grade and consistency
improved which will continue for the remainder of the year. Mill
throughput was 7.2 million tons for the period and was lower than
planned due to mill downtime for additional maintenance.
Copper head grades of 0.24% were higher than recent quarters and
in line with management expectations as mining proceeds further
into higher grade ore benches in the Gibraltar pit. Copper recoveries in the
second quarter were 81.9% and improved with the increasing head
grades.
A total of 23.4 million tons were mined in the second quarter in
line with mine plan. The ore stockpiles increased by 0.7 million
tons in the second quarter and 1.7 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.
*Non-GAAP performance measure. See end of news
release
OPERATIONS ANALYSIS - CONTINUED
Total site costs* at Gibraltar
of $105.4 million were $7.4 million lower than last quarter due to a
number of factors including lower diesel fuel costs, purchased
electricity, natural gas, explosives and contractor
services.
Sustaining capital expenditures in the quarter were $20.4 million and included $10.4 million for a major component replacement
on one of the shovels. Gibraltar capital expenditures will decrease
in the second half of the year as preparatory work for the primary
crusher move is completed and with less equipment component
replacements expected.
Molybdenum generated a by-product credit of US$0.13 per pound of copper produced in the
second quarter, which decreased significantly from the first
quarter. The molybdenum price decreased from the first quarter's
average price of US$32.79 per pound
to an average of US$21.30 per pound.
This decreased molybdenum price also resulted in negative
provisional price adjustments of $1.3
million in the second quarter.
Off-property costs per pound produced* were US$0.36 and were in line with recent
quarters.
Total operating costs per pound produced (C1)* were US$2.66 for the second quarter, compared to
US$3.47 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 for the remainder of 2023 and
head grade and ore quality are expected to be similar to Q2 for the
remainder of the year. Second quarter production was impacted
by low mill availabilities in April and May, but in June and July
milling operations benefited from the softer ore in the
Gibraltar pit and mill throughput
averaged well above nameplate capacity of 85,000 tpd. Copper
production in June and July was 11 million pounds in each
month. Management continues to expect Gibraltar to produce 115 million pounds (+/-
5%) of copper in 2023 on a 100% basis.
*Non-GAAP performance measure. See end of news
release
GIBRALTAR OUTLOOK -
CONTINUED
The in-pit crusher is now planned to be relocated in Q2 2024.
This deferral of the crusher move 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.
Strong metal prices combined with our copper hedge protection
continues to provide stable operating margins at the Gibraltar mine. Copper prices in the second
quarter averaged US$3.84 per pound,
compared to the six month year to date average of US$3.95 and the 2022 average of US$3.99 per pound. The Company currently has
copper price collar contracts in place that secure a minimum copper
price of US$3.75 per pound for 35
million pounds of copper until December 31,
2023.
The Company's copper concentrate transportation was recently
impacted by the strike action of port workers in British Columbia. The work stoppages by the
port workers has delayed shipment of concentrate to
customers. Now that the strike has been resolved, efforts are
underway to move stockpiled concentrate at site to the port using
rail and trucking. Given the backlog, concentrate inventory
levels at site may not reduce to normal levels until later this
year.
ACQUISITION OF ADDITIONAL 12.5% INTEREST IN GIBRALTAR
After March 15, 2023, the
financial results of Taseko reflect its 87.5% beneficial interest
in the Gibraltar mine.
The Company completed the acquisition of an additional 12.5%
interest in the Gibraltar mine
from Sojitz on March 15, 2023.
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 became a party to the existing Cariboo shareholders
agreement with Dowa and Furukawa. There was 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. On June 12,
2023, the EPA issued the Programmatic Agreement ("PA") for
signature which is a key step required to finalize the NHPA Section
106 process and precedes issuance of the final UIC permit.
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 $27.4
million of capital expenditures at the Florence project in
the first half 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
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.
LONG-TERM GROWTH STRATEGY - CONTINUED
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.
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 lab testwork on flowsheet development to produce niobium
oxide from floatation concentrate at Aley to supply the growing
market for niobium-based batteries.
ANNUAL ENVIRONMENT, SOCIAL & GOVERNANCE
REPORT
On May 25, 2023, the Company
published its annual Environment, Social & Governance ("ESG")
Report, titled 360o of Value. The report
focuses on the 2022 operational and sustainability performance of
Taseko's foundational asset, the Gibraltar copper mine in British Columbia, and reports on the Company's
enterprise-wide ESG impacts and benefits – including environmental
initiatives, social contributions, governance programs and
greenhouse gas emissions.
While profitable operations and return on investment are
critical drivers for Taseko's success, the Company also delivers
value to its employees and operating communities, business
partners, Indigenous Nations and governments. The annual ESG report
is an opportunity to showcase the important benefits that the
Company generates through its operations, investments and
people:
- Well-paid jobs and career opportunities for employees;
- Healthy and safe workplaces that welcome a diversity of people
and views;
- Support for vibrant communities and institutions;
- Protection and conservation of important environmental values,
such as wildlife, biodiversity, clean air and water;
- Meaningful partnerships with Indigenous people;
- Financial support for important government services and
programs; and
- The production of copper and other metals that play such an
important role in supporting modern society and enhancing quality
of life.
The full report can be viewed and downloaded at
tasekomines.com/esg/overview.
The Company will host a telephone conference call and live
webcast on Thursday, August 3, 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://emportal.ink/46Kh6Zm 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
August 17, 2023 and can be accessed
by dialing 888-203-1112 toll free, 416-764-8677 in
Canada, or online at
tasekomines.com/investors/events and using the entry code
191584#.
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 and Q2 2023)
|
2023
Q21
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Cost of
sales
|
99,854
|
86,407
|
73,112
|
84,204
|
90,992
|
Less:
|
|
|
|
|
|
Depletion and
amortization
|
(15,594)
|
(12,027)
|
(10,147)
|
(13,060)
|
(15,269)
|
Net change in
inventories of finished goods
|
3,356
|
(399)
|
1,462
|
2,042
|
(3,653)
|
Net change in
inventories of ore stockpiles
|
2,724
|
5,561
|
18,050
|
3,050
|
(3,463)
|
Transportation
costs
|
(6,966)
|
(5,104)
|
(6,671)
|
(6,316)
|
(4,370)
|
Site operating
costs
|
83,374
|
74,438
|
75,806
|
69,920
|
64,237
|
Oxide ore stockpile
reclassification from capitalized stripping
|
(3,183)
|
3,183
|
-
|
-
|
-
|
Less by-product
credits:
|
|
|
|
|
|
Molybdenum, net
of treatment costs
|
(4,018)
|
(9,208)
|
(11,022)
|
(4,122)
|
(3,023)
|
Silver,
excluding amortization of deferred revenue
|
(103)
|
(160)
|
263
|
25
|
36
|
Site operating costs,
net of by-product credits
|
76,070
|
68,253
|
65,047
|
65,823
|
61,250
|
Total copper produced
(thousand pounds)
|
24,640
|
19,491
|
20,020
|
21,238
|
15,497
|
Total costs per pound
produced
|
3.09
|
3.50
|
3.25
|
3.10
|
3.95
|
Average exchange rate
for the period (CAD/USD)
|
1.34
|
1.35
|
1.36
|
1.31
|
1.28
|
Site operating
costs, net of by-product credits
(US$ per
pound)
|
2.30
|
2.59
|
2.39
|
2.37
|
3.10
|
Site operating costs,
net of by-product credits
|
76,070
|
68,253
|
65,047
|
65,823
|
61,250
|
Add off-property
costs:
|
|
|
|
|
|
Treatment and
refining costs
|
4,986
|
4,142
|
3,104
|
3,302
|
2,948
|
Transportation
costs
|
6,966
|
5,104
|
6,671
|
6,316
|
4,370
|
Total operating
costs
|
88,022
|
77,499
|
74,822
|
75,441
|
68,568
|
Total operating
costs (C1) (US$ per pound)
|
2.66
|
2.94
|
2.75
|
2.72
|
3.47
|
1 Q1
and Q2 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%.
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Total Site Costs
Total site costs are 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 and Q2 2023)
|
2023
Q21
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Site operating
costs
|
83,374
|
74,438
|
75,806
|
69,920
|
64,237
|
Add:
|
|
|
|
|
|
Capitalized
stripping costs
|
8,832
|
12,721
|
3,866
|
1,121
|
11,887
|
Total site costs –
Taseko share
|
92,206
|
87,159
|
79,672
|
71,041
|
76,124
|
Total site costs –
100% basis
|
105,378
|
112,799
|
106,230
|
94,721
|
101,500
|
1 Q1
and Q2 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
- Finance and other non-recurring costs.
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
Q2
|
2023
Q1
|
2022
Q4
|
2022
Q3
|
Net income
(loss)
|
9,991
|
4,439
|
(2,275)
|
(23,517)
|
Unrealized
foreign exchange (gain) loss
|
(10,966)
|
(950)
|
(5,279)
|
28,083
|
Unrealized
(gain) loss on derivatives
|
(6,470)
|
2,190
|
20,137
|
(72)
|
Finance and
other non-recurring costs
|
1,714
|
-
|
-
|
-
|
Estimated tax
effect of adjustments
|
1,355
|
(591)
|
(5,437)
|
19
|
Adjusted net income
(loss)
|
(4,376)
|
5,088
|
7,146
|
4,513
|
Adjusted
EPS
|
(0.02)
|
0.02
|
0.02
|
0.02
|
(Cdn$ in thousands,
except per share amounts)
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Net income
(loss)
|
(5,274)
|
5,095
|
11,762
|
22,485
|
Unrealized
foreign exchange (gain) loss
|
11,621
|
(4,398)
|
(1,817)
|
9,511
|
Unrealized
(gain) loss on derivatives
|
(30,747)
|
7,486
|
4,612
|
(6,817)
|
Estimated tax
effect of adjustments
|
8,302
|
(2,021)
|
(1,245)
|
1,841
|
Adjusted net income
(loss)
|
(16,098)
|
6,162
|
13,312
|
27,020
|
Adjusted
EPS
|
(0.06)
|
0.02
|
0.05
|
0.10
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
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; and
- Non-recurring other expenses
(Cdn$ in
thousands)
|
2023
Q2
|
2023
Q1
|
2022
Q4
|
2022
Q3
|
Net income
(loss)
|
9,991
|
4,439
|
(2,275)
|
(23,517)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
15,594
|
12,027
|
10,147
|
13,060
|
Finance
expense
|
13,468
|
12,309
|
10,135
|
12,481
|
Finance
income
|
(757)
|
(921)
|
(700)
|
(650)
|
Income tax
expense
|
678
|
3,356
|
1,222
|
3,500
|
Unrealized
foreign exchange (gain) loss
|
(10,966)
|
(950)
|
(5,279)
|
28,083
|
Unrealized
(gain) loss on derivatives
|
(6,470)
|
2,190
|
20,137
|
(72)
|
Amortization of
share-based compensation expense
(recovery)
|
417
|
3,609
|
1,794
|
1,146
|
Non-recurring
other expenses
|
263
|
-
|
-
|
-
|
Adjusted
EBITDA
|
22,218
|
36,059
|
35,181
|
34,031
|
(Cdn$ in
thousands)
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Net income
(loss)
|
(5,274)
|
5,095
|
11,762
|
22,485
|
Add:
|
|
|
|
|
Depletion and
amortization
|
15,269
|
13,506
|
16,202
|
17,011
|
Finance
expense
|
12,236
|
12,155
|
12,072
|
11,875
|
Finance
income
|
(282)
|
(166)
|
(218)
|
(201)
|
Income tax
expense
|
922
|
1,188
|
9,300
|
22,310
|
Unrealized
foreign exchange (gain) loss
|
11,621
|
(4,398)
|
(1,817)
|
9,511
|
Unrealized
(gain) loss on derivatives
|
(30,747)
|
7,486
|
4,612
|
(6,817)
|
Amortization of
share-based compensation expense
|
(2,061)
|
3,273
|
1,075
|
117
|
Adjusted
EBITDA
|
1,684
|
38,139
|
52,988
|
76,291
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
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
June 30,
|
Six months ended
June 30,
|
(Cdn$ in
thousands)
|
2023
|
2022
|
2023
|
2022
|
Earnings (loss) from
mining operations
|
12,070
|
(8,048)
|
41,182
|
21,219
|
Add:
|
|
|
|
|
Depletion and
amortization
|
15,594
|
15,269
|
27,621
|
28,775
|
Earnings from mining
operations before depletion and amortization
|
27,664
|
7,221
|
68,803
|
49,994
|
Site operating costs per ton milled
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 Company's site operations
on a tons milled basis.
(Cdn$ in thousands,
except per ton milled amounts)
|
2023
Q21
|
2023
Q11
|
2022
Q4
|
2022
Q3
|
2022
Q2
|
Site operating costs
(included in cost of
sales)
– Taseko share
|
83,374
|
74,438
|
75,806
|
69,920
|
64,237
|
|
|
|
|
|
|
Site operating costs
(included in cost of
sales)
– 100% basis
|
95,285
|
95,838
|
101,075
|
93,226
|
85,650
|
Tons milled
(thousands)
|
7,234
|
7,093
|
7,282
|
8,229
|
7,698
|
Site operating costs
per ton milled
|
$13.17
|
$13.54
|
$13.88
|
$11.33
|
$11.13
|
1 Q1
and Q2 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