TASEKO REPORTS AN
85% INCREASE IN ADJUSTED EBITDA* FOR 2021
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 75% 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, Feb. 22, 2022 - Taseko Mines Limited (TSX:
TKO) (NYSE American: TGB) (LSE: TKO) ("Taseko" or the "Company")
reports Adjusted EBITDA* of $201
million for the full-year 2021, an 85% increase over 2020.
Revenues for the year were $433
million and Adjusted net income* for the year was
$45 million, or $0.16 per share. In the fourth quarter 2021,
Taseko generated Adjusted EBITDA* of $53
million, $103 million of
Revenue and Adjusted net income* of $13
million, or $0.05 per
share.
Stuart McDonald, President and
CEO of Taseko, stated, "Realized copper sales of 105 million pounds
for the year, buoyed by a strong average copper price of over
US$4.20 per pound, generated the best
financial results in our Company's history. This was accomplished
despite the lagging copper sales in the fourth quarter as a result
of major disruption to transportation infrastructure in southern BC
from severe rainstorms in November, which limited our ability to
ship copper concentrate and realize sales."
"At Florence Copper, based on our ongoing dialogue with the US
Environmental Protection Agency, we continue to expect the draft
Underground Injection Control ("UIC") permit to be publicly issued
very soon, and then a 45-day public comment period will commence.
The UIC is the final permit needed to construct and operate the
commercial production facility, which will be a major new source of
low-carbon copper supply for the US market. The detailed
engineering program for the commercial facility is complete and
we're well advanced with procurement of key, long-lead items, which
will ensure a rapid and smooth transition into construction."
Mr. McDonald added, "Operationally, Gibraltar production in the fourth quarter was
impacted by lower grades and recoveries due to severe winter
weather as well as oxidization and pyrite content in the upper
benches of the Gibraltar pit.
Mill operations are being optimized for the new
mineralization, and ore quality will improve as mining progresses
deeper into the Gibraltar pit this
year. For 2022, we expect copper production of 115 million pounds
(+/- 5%), with production weighted to the back half of the year and
the first quarter being the lowest production quarter, similar to
2021. Next year mining operations will transition to higher grade
zones, and copper production is planned to trend back toward the
life of mine average of 130 million pounds. A new
Gibraltar reserve update is
expected to be completed in the second quarter."
Mr. McDonald concluded, "Our balance sheet remains healthy with
nearly $300 million of available
liquidity, including cash on hand and the new US$50 million credit facility that was closed in
October. In addition, we recently took advantage of a strengthened
copper price to extend our price protection strategy - we now have
more than 90% of our 2022 production secured at a minimum price of
US$4.00 per pound. With our strong
financial position and robust copper markets, its ideal timing to
be advancing our Florence Copper project to commercial
production."
2021 Annual Review
- Earnings from mining operations before depletion and
amortization* was $230.4 million,
Adjusted EBITDA* was $200.7 million,
and cash flows from operations was $174.8
million;
- Adjusted net income* was $44.7
million ($0.16 per share) and
GAAP Net income was $36.5 million
($0.13 per share) for the year;
- Total operating costs (C1)* for the year were US$1.90 per pound produced;
- The Gibraltar mine produced
112.3 million pounds of copper and 2.0 million pounds of molybdenum
in 2021. Copper recoveries were 82.4% and copper head grades were
0.23%;
- Gibraltar sold 104.9 million
pounds of copper for the year (100% basis) which contributed to
record revenue for Taseko of $433.3
million and an increase of 26% over 2020. Average realized
copper prices were US$4.31 per pound
for year, compared to the LME average price of US$4.23 per pound;
- The Company has approximately $300
million of available liquidity at December 31, 2021, including a cash balance of
$237 million and a new US$50 million revolving credit facility with
National Bank of Canada which
closed in early October;
- Development costs incurred for Florence Copper were
$57.9 million in the year and
included, detailed engineering and design of the commercial
facility, initial deposits for major processing equipment for the
SX/EW plant and ongoing site operating costs. These activities will
allow the Florence project team to
efficiently advance into construction upon receipt of the
Underground Injection Control ("UIC") permit; and
- In December 2021, the Company
completed its review of the draft UIC permit and no significant
issues were identified. The EPA continues to advance their review
process and the public comment period on the draft UIC permit is
expected to commence shortly after the draft UIC permit is publicly
issued.
Fourth Quarter Review
- Fourth quarter earnings from mining operations before depletion
and amortization* was $61.9 million,
Adjusted EBITDA* was $53.0 million,
Adjusted net income* was $13.3
million ($0.05 per share) and
GAAP Net income was $11.8 million
($0.04 per share);
- Total operating costs (C1)* for the quarter were US$1.94 per pound produced;
- The Gibraltar mine produced
28.8 million pounds of copper and 450 thousand pounds of molybdenum
in the fourth quarter. Copper recoveries were 80.4% and copper head
grades were 0.24%;
*Non-GAAP performance measure. See end of news release
- Gibraltar sold 23.8 million
pounds of copper in the quarter (100% basis). Due to extreme
flooding in southwest British
Columbia in November which washed out highways and rail
infrastructure, transportation options were impacted which resulted
in a build-up of copper concentrate inventory to 9.9 million pounds
at year end. Concentrate inventory should return to more normal
levels by the end of the first quarter of 2022;
- Average realized copper prices were US$4.37 per pound in the quarter, which
contributed $103.0 million of revenue
for Taseko;
- Cashflow from operations was $37.2
million which was impacted by $20.5
million in non-cash working capital attributed to the higher
year-end inventory. Capital expenditures of $35.2 million included Florence spend of $14.8
million in the quarter;
- The Company has recently extended its copper price protection
and now has more than 90% of its attributable production secured
for 2022 year at a minimum copper price of US$4.00 per pound. Fourth quarter Adjusted net
income and Adjusted EBITDA were impacted by a $6.4 million realized derivative loss
($0.02 per share) related to copper
put options that expired in the quarter; and
- In November 2021, Gibraltar's unionized workforce ratified a
new, long-term collective bargaining agreement which will be in
place until May 31, 2024.
HIGHLIGHTS
Operating Data (Gibraltar - 100%
basis) |
Three months
ended
December 31, |
Year ended
December 31, |
|
2021 |
2020 |
Change |
2021 |
2020 |
Change |
Tons mined (millions) |
23.3 |
26.4 |
(3.1) |
105.4 |
98.7 |
6.7 |
Tons milled (millions) |
7.4 |
7.5 |
(0.1) |
29.2 |
30.1 |
(0.9) |
Production (million pounds Cu) |
28.8 |
25.0 |
3.8 |
112.3 |
123.0 |
(10.7) |
Sales (million pounds Cu) |
23.8 |
25.0 |
(1.2) |
104.9 |
124.0 |
(19.1) |
Financial Data |
Three months
ended
December 31, |
Year ended
December 31, |
(Cdn$ in thousands, except for per share
amounts) |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
Revenues |
102,972 |
87,398 |
15,574 |
433,278 |
343,267 |
90,011 |
Earnings from mining operations before
depletion and amortization* |
61,916 |
27,062 |
34,854 |
230,392 |
119,026 |
111,366 |
Cash flows provided by operations |
37,231 |
20,424 |
16,807 |
174,769 |
106,195 |
68,574 |
Adjusted EBITDA* |
52,988 |
20,478 |
32,510 |
200,733 |
108,229 |
92,504 |
Adjusted net income (loss)* |
13,312 |
(7,473) |
20,785 |
44,745 |
(26,539) |
71,284 |
Per share - basic ("Adjusted
EPS")* |
0.05 |
(0.03) |
0.08 |
0.16 |
(0.11) |
0.27 |
Net income (loss) (GAAP) |
11,762 |
5,694 |
6,068 |
36,472 |
(23,524) |
59,996 |
Per share - basic ("EPS") |
0.04 |
0.02 |
0.02 |
0.13 |
(0.09) |
0.22 |
*Non-GAAP performance measure. See end
of news release |
|
|
|
|
|
|
|
|
REVIEW OF OPERATIONS
Gibraltar mine (75% Owned)
Operating data (100% basis) |
Q4 2021 |
Q3 2021 |
Q2 2021 |
Q1 2021 |
Q4 2020 |
YE 2021 |
YE 2020 |
Tons mined (millions) |
23.3 |
25.2 |
24.9 |
32.0 |
26.4 |
105.4 |
98.7 |
Tons milled (millions) |
7.4 |
7.4 |
7.2 |
7.2 |
7.5 |
29.2 |
30.1 |
Strip ratio |
2.2 |
1.3 |
2.3 |
6.0 |
1.9 |
2.5 |
2.0 |
Site operating cost per ton milled (Cdn$)* |
$9.94 |
$8.99 |
$9.16 |
$8.73 |
$11.67 |
$9.21 |
$9.59 |
Copper concentrate |
|
|
|
|
|
|
|
Head grade (%) |
0.24 |
0.28 |
0.22 |
0.19 |
0.20 |
0.23 |
0.24 |
Copper recovery (%) |
80.4 |
84.2 |
83.3 |
81.5 |
83.3 |
82.4 |
84.3 |
Production (million pounds Cu) |
28.8 |
34.5 |
26.8 |
22.2 |
25.0 |
112.3 |
123.0 |
Sales (million pounds Cu) |
23.8 |
32.4 |
26.7 |
22.0 |
25.0 |
104.9 |
124.0 |
Inventory (million pounds Cu) |
9.9 |
4.9 |
3.5 |
3.6 |
3.4 |
9.9 |
3.4 |
Molybdenum concentrate |
|
|
|
|
|
|
|
Production (thousand pounds Mo) |
450 |
571 |
402 |
530 |
549 |
1,954 |
2,269 |
Sales (thousand pounds Mo) |
491 |
502 |
455 |
552 |
487 |
2,000 |
2,239 |
Per unit data (US$ per pound
produced)* |
|
|
|
|
|
|
|
Site operating costs* |
$2.02 |
$1.53 |
$2.02 |
$2.23 |
$2.67 |
$1.91 |
$1.75 |
By-product credits* |
(0.30) |
(0.25) |
(0.25) |
(0.27) |
(0.14) |
(0.27) |
(0.13) |
Site operating costs, net of by-product
credits* |
$1.72 |
$1.28 |
$1.77 |
$1.96 |
$2.53 |
$1.64 |
$1.62 |
Off-property costs |
0.22 |
0.29 |
0.25 |
0.27 |
0.29 |
0.26 |
0.30 |
Total operating costs (C1)* |
$1.94 |
$1.57 |
$2.02 |
$2.23 |
$2.82 |
$1.90 |
$1.92 |
Full Year Results
Gibraltar produced 112.3
million pounds of copper in 2021 compared to 123.0 million in 2020.
Copper grade for the year averaged 0.23% copper, compared to 0.24%
in 2020. Copper recoveries for 2021 was 82.4%, compared to 84.3% in
2020.
A total of 105.4 million tons were mined in the year in line
with the mine plan and a 7% increase over the prior year period.
The strip ratio increased primarily as a result of the waste mining
transitioning into the Pollyanna pit in the first quarter of 2021
and lower mining rates in 2020 in response to the onset of
COVID-19. Pollyanna ore was the primary mill feed in 2021,
and waste stripping activities began in the Gibraltar pit in 2021 with first ore being
mined in the fourth quarter.
Total site spending (including capitalized stripping of
$59.9 million on a 75% basis) was 9%
higher than the prior year due to higher mining rates in
2021. Sustaining capital expenditures at Gibraltar (75% basis) were $27.9 million for the year, compared to
$20.3 million for the prior year due
to greater scheduled component replacements in 2021 for the mining
fleet.
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS - CONTINUED
Molybdenum production was 2.0 million pounds in the year
compared to 2.3 million pounds in the prior year. Molybdenum prices
also strengthened in 2021 with an average molybdenum price of
US$15.94 per pound, an increase of
84% compared to the 2020 average price of US$8.68 per pound. By-product credits per pound
of copper produced was US$0.27 in the
year compared to US$0.13 in the prior
year.
Off-property costs per pound produced* were US$0.26 for the year, which is US$0.04 lower than the prior year, as the Company
benefited by a 4% reduction in the benchmark treatment and refining
charges ("TCRC") in 2021 and realized lower TCRCs for spot tenders
that were delivered at some of the lowest levels ever seen by the
Gibraltar mine due to tight copper
market conditions.
Total operating costs per pound produced (C1)* were US$1.90 for the year, a slight decrease compared
to the prior year. The decrease in the C1* costs was primarily due
to the higher by-product credits and lower off-property costs,
partially offset by the increase in site costs and the impact of
decreased copper production.
Fourth Quarter Results
Copper production in the fourth quarter was 28.8 million pounds
and was impacted by lower grades and recoveries from ore mined
in the upper benches of the Gibraltar pit. Increased oxidization and
pyrite content in this ore has resulted in lower recoveries which
management believes is a short-term issue that will be resolved.
Ore quality is expected to improve as mining progresses deeper into
the Gibraltar pit. In December,
heavy snowfall and temperatures as low as minus 35 degrees Celsius
also impacted mine equipment and mill availabilities, resulting in
decreased mill throughput and a need to draw ore from lower grade
stockpiles.
The Company realized 23.8 million pounds of copper sales in the
fourth quarter which was lower than copper production of 28.8
million pounds. Major disruption to the highway and rail
infrastructure in southwest British
Columbia from severe rainstorms and flooding in November
prevented significant production from being delivered to the port
for shipping. Copper concentrate inventories ended the year at 9.9
million pounds.
A total of 23.3 million tons were mined in the fourth quarter.
The strip ratio increased over the prior quarter due to mining
activities transitioning into the higher strip ratio Gibraltar pit. The mill feed in the fourth
quarter came primarily from Pollyanna but also included ore from
the Gibraltar pit.
Total site spending (including capitalized stripping of
$12.7 million on a 75% basis) was 7%
higher than the prior quarter and included retroactive payments
from the newly ratified collective bargaining agreement. Sustaining
capital expenditures at Gibraltar
of $6.5 million on a 75% basis
included component replacements for the mining fleet, including
scheduled work on the shovels.
Molybdenum production was 450 thousand pounds in the fourth
quarter and at an average molybdenum price of US$18.89 per pound, generated a notable
by-product credit per pound of copper produced of US$0.30 in the fourth quarter.
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS - CONTINUED
Off-property costs per pound produced* were US$0.22 for the fourth quarter which
benefitted from lower copper pounds sold. The Company also realized
lower TCRC in the fourth quarter as two spot tenders were delivered
at much lower TCRC rates than the annual benchmark rate, which
reflects the tight physical market for copper concentrate from
overseas smelters.
Total operating costs per pound produced (C1)* were US$1.94 for the quarter and increased due to the
decreased copper production and higher site costs in the fourth
quarter compared to the third quarter.
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE
Nothing is more important to Taseko than the safety, health and
well-being of our workers and their families. Taseko places a high
priority on the continuous improvement of performance in the areas
of employee health and safety at the workplace and protection of
the environment.
In April 2021, Taseko published
its second Environmental, Social, and Governance ("ESG") report,
which includes an examination of the Company's sustainability
performance for 2020. The report is available on the Company's
website at www.tasekomines.com/esg.
In this report, Taseko has reported Scope 1 and 2 greenhouse gas
emissions for the Gibraltar mine
which show that the mine ranks in the first quartile of all copper
mines globally. When commercial operations at Florence Copper
commences, the Company's combined greenhouse gas emissions
intensity will drop even lower, to an estimated 1.53 tonnes of CO2
per tonne of copper equivalent, based on an independent analysis by
Skarn Associates.
Gibraltar's 2021 ESG report
will be published in the second quarter of 2022.
GIBRALTAR OUTLOOK
Gibraltar is expected to
produce 115 million pounds (+/- 5%) of copper in 2022 on a 100%
basis, with production weighted to the back half of the year and
the first quarter being the lowest production quarter, similar to
2021. The expected sales of excess copper concentrate
inventory carried over from 2021 will bolster earnings in the first
quarter of 2022.
Strong metal prices and US dollar combined with our copper hedge
protection continues to provide tailwinds for a strong financial
performance and operating margins at the Gibraltar mine over the coming year. Copper
prices in 2021 averaged US$4.23 per
pound and are currently around US$4.50 and molybdenum prices are currently
US$18.78 per pound, 18% higher than
the average price in 2021.
The copper price outlook for 2022 remains quite favorable with
limited exchange inventories and ongoing supply constraints failing
to keep up to demand. Many governments are focusing on increased
infrastructure investment to stimulate economic recovery after the
pandemic, including green initiatives, which will require new
primary supplies of copper. Although some analysts predict a
balanced copper market by 2023 based on known projects currently
under development, most industry analysts are projecting ongoing
supply constraints and deficits, which should support higher copper
prices in the years to come.
*Non-GAAP performance measure. See end of news release
GIBRALTAR OUTLOOK - CONTINUED
The Company has a long track record of purchasing copper price
options to manage copper price volatility. This strategy
provides security over the Company's cash flow as it prepares for
construction of Florence Copper while providing significant upside
should copper prices continue at these levels or increase further.
In particular, the Company has secured more than 90% of
attributable production with copper collars which protect a minimum
copper price of US$4.00 per pound for
2022.
FLORENCE COPPER
The commercial production facility at Florence Copper will be
one of the greenest sources of copper for US domestic consumption,
with carbon emissions, water and energy consumption all
dramatically lower than a conventional mine. It is a low-cost
copper project with an annual production capacity of 85 million
pounds of copper over a 21-year mine life. With the expected
C1* operating cost of US$1.10 per
pound, Florence Copper will be in the lowest quartile of the global
copper cost curve and will have one of the smallest environmental
footprints of any copper mine in the world.
The Company has successfully operated a Production Test Facility
("PTF") since 2018 at Florence to
demonstrate that the in-situ copper recovery ("ISCR") process can
produce high quality cathode while operating within permit
conditions.
The next phase of Florence Copper will be the construction and
operation of the commercial ISCR facility with an estimated capital
cost of US$230 million (including
reclamation bonding and working capital) based on the Company's
published 2017 NI 43-101 technical report. At a conservative copper
price of US$3.00 per pound, Florence
Copper is expected to generate an after-tax internal rate of return
of 37%, an after-tax net present value of US$680 million at a 7.5% discount rate, and an
after-tax payback period of 2.5 years.
In December 2020, the Company received the Aquifer
Protection Permit ("APP") from the Arizona Department of
Environmental Quality ("ADEQ"). During the APP process, Florence
Copper received strong support from local community members,
business owners and elected officials. The other required
permit is the UIC permit from the U.S. Environmental Protection
Agency ("EPA"), which is the final permitting step required prior
to construction of the commercial ISCR facility. On November 22, 2021, the EPA provided the Company
with an initial draft of the UIC permit. Taseko's project technical
team completed its review of the draft UIC permit in early
December 2021 and no significant
issues were identified. Based on ongoing dialogue with the
EPA, the Company continues to expect the draft UIC permit to be
publicly issued very soon, and then a 45-day public comment period
will commence.
Detailed engineering and design for the commercial production
facility is complete and procurement activities are well advanced
with the Company making initial deposits and awarding the key
contract for the major processing equipment associated with the
SX/EW plant in 2021. The Company incurred $58 million of costs for Florence in 2021 including for the commercial
facility activities and also had outstanding purchase commitments
of $38 million as at December 31, 2021 to be incurred in 2022.
Deploying this strategic capital and awarding key contracts will
assist with protecting the project execution plan, mitigating
inflation risk and the potential impact of supply chain disruptions
and ensure a smooth transition into construction once the final UIC
permit is received.
At current copper prices, the Company expects to be able to fund
construction of the commercial facility from its existing sources
of liquidity and cashflows from Gibraltar.
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 focusing its current efforts on advancing 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 T?ilhqot'in Nation, as represented by
T?ilhqot'in National Government, and Taseko entered into a
confidential dialogue, with the involvement of the Province of
British Columbia, to try to obtain
a long-term resolution to the conflict regarding Taseko's proposed
gold-copper mine currently known as New Prosperity, acknowledging
Taseko's commercial interests and the T?ilhqot'in Nation's
opposition to the project.
The dialogue was supported by the parties' agreement on
December 7, 2019 to a one-year
standstill on certain outstanding litigation and regulatory matters
that relate to Taseko's tenures and the area in the vicinity of
Te?tan Biny (Fish Lake). The standstill was extended on
December 4, 2020, to continue what
was a constructive dialogue that had been delayed by the COVID-19
pandemic. The dialogue is not complete but it remains constructive,
and the parties have therefore agreed to extend the standstill for
a further year so that they and the Province of British Columbia can continue to pursue a
long-term and mutually acceptable resolution of the conflict.
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 will host a telephone conference call and live
webcast on Wednesday, February 23,
2022 at 11:00 a.m. Eastern
Time (8:00 a.m. Pacific,
4:00 p.m. GMT) to discuss these
results. After opening remarks by management, there will be a
question and answer session open to analysts and investors.
The conference call may be accessed by dialing 416-764-8688 in
Canada, 888-390-0546 in
the United States, 08006522435 in
the United Kingdom, or online at
tasekomines.com/investors/events.
The conference call will be archived for later playback until
March 9, 2022 and can be accessed by
dialing 416-764-8677 Canada,
1-888-390-0541 in the United
States, or online at tasekomines.com/investors/events and
using the passcode 510013#.
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 |
2021
Q4 |
2021
Q3 |
2021
Q2 |
2021
Q1 |
2021
YE |
Cost of sales |
57,258 |
65,893 |
74,056 |
72,266 |
269,473 |
Less: |
|
|
|
|
|
Depletion and amortization |
(16,202) |
(17,011) |
(17,536) |
(15,838) |
(66,587) |
Net change in inventories of finished
goods |
13,497 |
762 |
(4,723) |
2,259 |
11,795 |
Net change in inventories of ore
stockpiles |
4,804 |
6,291 |
2,259 |
(8,226) |
5,128 |
Transportation costs |
(4,436) |
(5,801) |
(4,303) |
(3,305) |
(17,845) |
Site operating costs |
54,921 |
50,134 |
49,753 |
47,156 |
201,964 |
Less by-product credits: |
|
|
|
|
|
Molybdenum, net of treatment costs |
(7,755) |
(8,574) |
(6,138) |
(5,604) |
(28,071) |
Silver, excluding amortization of deferred
revenue |
(330) |
300 |
64 |
(238) |
(204) |
Site operating costs, net of by-product
credits |
46,836 |
41,860 |
43,679 |
41,314 |
173,689 |
Total copper produced (thousand pounds) |
21,590 |
25,891 |
20,082 |
16,684 |
84,247 |
Total costs per pound produced |
2.17 |
1.62 |
2.18 |
2.48 |
2.06 |
Average exchange rate for the period
(CAD/USD) |
1.26 |
1.26 |
1.23 |
1.27 |
1.25 |
Site operating costs, net of
by-product credits
(US$ per pound) |
1.72 |
1.28 |
1.77 |
1.96 |
1.64 |
Site operating costs, net of by-product
credits |
46,836 |
41,860 |
43,679 |
41,314 |
173,689 |
Add off-property costs: |
|
|
|
|
|
Treatment and refining costs |
1,480 |
3,643 |
1,879 |
2,414 |
9,416 |
Transportation costs |
4,436 |
5,801 |
4,303 |
3,305 |
17,845 |
Total operating costs |
52,752 |
51,304 |
49,861 |
47,033 |
200,950 |
Total operating costs (C1) (US$ per
pound) |
1.94 |
1.57 |
2.02 |
2.23 |
1.90 |
NON-GAAP PERFORMANCE MEASURES -
CONTINUED
(Cdn$ in thousands, unless otherwise
indicated) –
75% basis |
2020
Q4 |
2020
Q3 |
2020
Q2 |
2020
Q1 |
2020
YE |
Cost of sales |
79,083 |
75,969 |
81,181 |
83,309 |
319,542 |
Less: |
|
|
|
|
|
Depletion and amortization |
(18,747) |
(23,894) |
(25,512) |
(27,148) |
(95,301) |
Net change in inventories of finished
goods |
2,087 |
1,415 |
(5,753) |
1,302 |
(949) |
Net change in inventories of ore
stockpiles |
6,632 |
4,186 |
(50) |
603 |
11,371 |
Transportation costs |
(3,768) |
(4,127) |
(5,834) |
(4,519) |
(18,248) |
Site operating costs |
65,287 |
53,549 |
44,032 |
53,547 |
216,425 |
Less by-product credits: |
|
|
|
|
|
Molybdenum, net of treatment costs |
(3,649) |
(4,109) |
(4,252) |
(3,231) |
(15,241) |
Silver, excluding amortization of deferred
revenue |
133 |
(54) |
(28) |
(354) |
(303) |
Site operating costs, net of by-product
credits |
61,771 |
49,386 |
39,752 |
49,962 |
200,871 |
Total copper produced (thousand pounds) |
18,725 |
21,658 |
27,576 |
24,318 |
92,277 |
Total costs per pound produced |
3.30 |
2.28 |
1.44 |
2.05 |
2.18 |
Average exchange rate for the period
(CAD/USD) |
1.30 |
1.33 |
1.39 |
1.34 |
1.34 |
Site operating costs, net of
by-product credits
(US$ per pound) |
2.53 |
1.71 |
1.04 |
1.53 |
1.62 |
Site operating costs, net of by-product
credits |
61,771 |
49,386 |
39,752 |
49,962 |
200,871 |
Add off-property costs: |
|
|
|
|
|
Treatment and refining costs |
3,284 |
4,254 |
5,676 |
4,956 |
18,170 |
Transportation costs |
3,768 |
4,127 |
5,834 |
4,519 |
18,248 |
Total operating costs |
68,823 |
57,767 |
51,262 |
59,437 |
237,289 |
Total operating costs (C1) (US$ per
pound) |
2.82 |
2.00 |
1.34 |
1.82 |
1.92 |
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 gains/losses;
- 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.
NON-GAAP PERFORMANCE MEASURES -
CONTINUED
(Cdn$ in thousands, except per share amounts) |
2021
Q4 |
2021
Q3 |
2021
Q2 |
2021
Q1 |
2021
YE |
Net income (loss) |
11,762 |
22,485 |
13,442 |
(11,217) |
36,472 |
Unrealized foreign exchange (gain)
loss |
(1,817) |
9,511 |
(3,764) |
8,798 |
12,728 |
Realized foreign exchange gain
on settlement of long-
term debt |
- |
- |
- |
(13,000) |
(13,000) |
Loss on settlement of long-term debt |
- |
- |
- |
5,798 |
5,798 |
Call premium on settlement of long-term
debt |
- |
- |
- |
6,941 |
6,941 |
Unrealized (gain) loss on derivatives |
4,612 |
(6,817) |
370 |
802 |
(1,033) |
Estimated tax effect of adjustments |
(1,245) |
1,841 |
(100) |
(3,651) |
(3,161) |
Adjusted net income (loss) |
13,312 |
27,020 |
9,948 |
(5,535) |
44,745 |
Adjusted EPS |
0.05 |
0.10 |
0.04 |
(0.02) |
0.16 |
(Cdn$ in thousands, except per share amounts) |
2020
Q4 |
2020
Q3 |
2020
Q2 |
2020
Q1 |
2020
YE |
Net income (loss) |
5,694 |
987 |
18,745 |
(48,950) |
(23,524) |
Unrealized foreign exchange (gain)
loss |
(13,595) |
(7,512) |
(12,985) |
29,747 |
(4,345) |
Unrealized (gain) loss on derivatives |
586 |
1,056 |
3,528 |
(3,348) |
1,822 |
Estimated tax effect of adjustments |
(158) |
(285) |
(953) |
904 |
(492) |
Adjusted net income (loss) |
(7,473) |
(5,754) |
8,335 |
(21,647) |
(26,539) |
Adjusted EPS |
(0.03) |
(0.02) |
0.03 |
(0.09) |
(0.11) |
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 also 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;
- Loss on settlement of long term debt (included in finance
expenses) and call premium;
- Realized foreign exchange gain on settlement of long-term debt;
and
- Amortization of share-based compensation expense.
NON-GAAP PERFORMANCE MEASURES -
CONTINUED
(Cdn$ in thousands) |
2021
Q4 |
2021
Q3 |
2021
Q2 |
2021
Q1 |
2021
YE |
Net income (loss) |
11,762 |
22,485 |
13,442 |
(11,217) |
36,472 |
Add: |
|
|
|
|
|
Depletion and amortization |
16,202 |
17,011 |
17,536 |
15,838 |
66,587 |
Finance expense (includes loss
on settlement of long-
term debt and call premium) |
12,072 |
11,875 |
11,649 |
23,958 |
59,554 |
Finance income |
(218) |
(201) |
(184) |
(75) |
(678) |
Income tax (recovery) expense |
9,300 |
22,310 |
7,033 |
(4,302) |
34,341 |
Unrealized foreign exchange (gain)
loss |
(1,817) |
9,511 |
(3,764) |
8,798 |
12,728 |
Realized foreign exchange gain
on settlement of long-
term debt |
- |
- |
- |
(13,000) |
(13,000) |
Unrealized (gain) loss on derivatives |
4,612 |
(6,817) |
370 |
802 |
(1,033) |
Amortization of share-based compensation
expense |
1,075 |
117 |
1,650 |
2,920 |
5,762 |
Adjusted EBITDA |
52,988 |
76,291 |
47,732 |
23,722 |
200,733 |
(Cdn$ in thousands) |
2020
Q4 |
2020
Q3 |
2020
Q2 |
2020
Q1 |
2020
YE |
Net income (loss) |
5,694 |
987 |
18,745 |
(48,950) |
(23,524) |
Add: |
|
|
|
|
|
Depletion and amortization |
18,747 |
23,894 |
25,512 |
27,148 |
95,301 |
Finance expense |
10,575 |
11,203 |
10,461 |
10,771 |
43,010 |
Finance income |
(47) |
(4) |
(48) |
(150) |
(249) |
Income tax (recovery) expense |
(2,724) |
(580) |
4,326 |
(10,118) |
(9,096) |
Unrealized foreign exchange (gain)
loss |
(13,595) |
(7,512) |
(12,985) |
29,747 |
(4,345) |
Unrealized (gain) loss on derivatives |
586 |
1,056 |
3,528 |
(3,348) |
1,822 |
Amortization of share-based compensation
expense |
1,242 |
2,501 |
1,321 |
246 |
5,310 |
Adjusted EBITDA |
20,478 |
31,545 |
50,860 |
5,346 |
108,229 |
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.
(Cdn$ in thousands) |
2021
Q4 |
2021
Q3 |
2021
Q2 |
2021
Q1 |
2021
YE |
Earnings from mining operations |
45,714 |
66,670 |
36,946 |
14,475 |
163,805 |
Add: |
|
|
|
|
|
Depletion and amortization |
16,202 |
17,011 |
17,536 |
15,838 |
66,587 |
Earnings from mining operations before
depletion and amortization |
61,916 |
83,681 |
54,482 |
30,313 |
230,392 |
(Cdn$ in thousands) |
2020
Q4 |
2020
Q3 |
2020
Q2 |
2020
Q1 |
2020
YE |
Earnings (loss) from mining operations |
8,315 |
11,811 |
24,824 |
(21,225) |
23,725 |
Add: |
|
|
|
|
|
Depletion and amortization |
18,747 |
23,894 |
25,512 |
27,148 |
95,301 |
Earnings from mining operations before
depletion and amortization |
27,062 |
35,705 |
50,336 |
5,923 |
119,026 |
Site operating costs per ton
milled
(Cdn$ in thousands, except per ton milled
amounts) |
2021
Q4 |
2021
Q3 |
2021
Q2 |
2021
Q1 |
2021
YE |
Site operating costs (included in cost of
sales) |
54,921 |
50,134 |
49,753 |
47,156 |
201,964 |
Tons milled (thousands) (75% basis) |
5,523 |
5,576 |
5,429 |
5,402 |
21,930 |
Site operating costs per ton milled |
$9.94 |
$8.99 |
$9.16 |
$8.73 |
$9.21 |
(Cdn$ in thousands, except per ton milled
amounts) |
2020
Q4 |
2020
Q3 |
2020
Q2 |
2020
Q1 |
2020
YE |
Site operating costs (included in cost of
sales) |
65,287 |
53,549 |
44,032 |
53,547 |
216,415 |
Tons milled (thousands) (75% basis) |
5,594 |
5,595 |
5,748 |
5,622 |
22,559 |
Site operating costs per ton milled |
$11.67 |
$9.57 |
$7.66 |
$9.52 |
$9.59 |
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.
For further information on Taseko, please see the Company's
website at www.tasekomines.com or contact: Brian Bergot, Vice President, Investor Relations
– 778-373-4554, toll free 1-800-667-2114