TASEKO AND MITSUI
ENTER STRATEGIC PARTNERSHIP TO DEVELOP FLORENCE COPPER
VANCOUVER, BC, Dec. 20,
2022 /CNW/ - Taseko Mines Limited (TSX: TKO) (NYSE American:
TGB) (LSE: TKO) ("Taseko" or the "Company") is pleased to announce
it has signed agreements with Mitsui & Co. (U.S.A.) Inc.
("Mitsui") to form a strategic partnership to develop the Company's
Florence Copper project (the "Project"), located in Arizona
USA.
Mitsui has committed to an initial investment of US$50 million, 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
(the "Copper Stream") 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 (the "Equity Option"). The Equity
Option is exercisable by Mitsui within a three-year period
following completion of construction of the commercial production
facility. If Mitsui elects to exercise its Equity Option the
Copper Stream will terminate.
As part of the arrangement, Taseko and Mitsui have entered into
an offtake contract for 81% of the copper cathode produced at
Florence during the initial years
of production. The parties intend to use this period to develop
premium sales channels for 'green copper' in the United States, leveraging Mitsui's
existing US cathode trading business and the unique environmental
benefits of Florence Copper, which is expected to be the lowest
carbon- and energy-intensity copper producer in North
America.
Stuart McDonald, President &
CEO of Taseko, stated, "This agreement with Mitsui establishes a
strategic partnership with a leading international company.
Mitsui's investment will complement Taseko's financing requirements
and construction timeline and advance our goal of ensuring the
copper produced at Florence is
recognized for its unique low-carbon profile that will advantage US
manufacturers and consumers. In the future, Taseko and Mitsui
will collectively evaluate additional investments toward
establishing Florence Copper as a zero-carbon copper producer
(Scope 1 and 2)."
Sayu Ueno, President & CEO of Mitsui & Co. (U.S.A.),
commented, "We are excited to partner with Taseko and its unique,
low-carbon and low-impact Florence Copper project. When in
production, Florence Copper will significantly expand our US
cathode trading business, while providing an environmentally sound,
domestically produced product that can be marketed on the basis of
its low-carbon advantages. We believe Florence Copper will be
a preferred source of 'made-in-the-US' copper for many end users in
North America."
Transaction Details
Under the terms of the initial US$50
million Copper Stream agreement, Mitsui's first deposit
payment of US$10 million will be
available for drawdown after receipt of Florence Copper's
Underground Injection Control permit, with additional US$10 million instalments available each quarter
thereafter to fund project construction. Mitsui will receive
2.67% of the copper metal produced at Florence and pay a delivery price equal to 25%
of the market price of copper delivered under the contract.
If Mitsui elects to exercise its Equity Option and invest an
additional US$50 million in the
Project, these additional funds and the Copper Stream will be
converted into a 10% equity interest in Florence Copper. At
that time, the initial offtake agreement will cease and be replaced
with a marketing agency agreement.
If the Copper Stream is not converted into an equity interest
Taseko will have the right to buy-back 100% of the Copper Stream,
otherwise, it will terminate when 40 million pounds of copper have
been delivered under the agreement. Mitsui's offtake
entitlement would also reduce to 30% until the Copper Stream
deposit has been reduced to nil.
About Mitsui & Co.
With a long history in the United
States, Mitsui & Co. (U.S.A.), Inc. ("Mitsui
USA") is a wholly owned subsidiary
of Mitsui & Co., Ltd., Tokyo,
Japan, one of the most diversified and comprehensive
trading, investment, and service enterprises in the world. Mitsui
& Co. pursues "360° business innovation" that ranges from
product sales, worldwide logistics and financing, through to the
development of major international infrastructure and other
projects. More information on Mitsui USA may be found at www.mitsui.com/us.
About Taseko
Taseko is focused on the operation and development of copper mines
in North America. Headquartered in
Vancouver, Canada, Taseko is the
owner (75%) and operator of the Gibraltar Mine, the second largest
open pit copper mine in Canada. Taseko's Florence Copper
Project in Arizona is a near-term
growth project, which will nearly double the Company's annual
copper production. Construction of Florence Copper is expected to
commence in 2023. Taseko's Yellowhead Copper Project, New
Prosperity Gold-Copper Project and Aley Niobium Project are all
advanced staged projects which provide the Company with a diverse
commodity pipeline.
Stuart McDonald
President and CEO
No regulatory authority has approved
or disapproved of the information contained in this news
release.
CAUTION REGARDING FORWARD-LOOKING
INFORMATION
This document contains "forward-looking statements" that were
based on Taseko's expectations, estimates and projections as of the
dates as of which those statements were made. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "outlook", "anticipate",
"project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the Company's
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking statements. These included but are not limited
to:
- uncertainties about the future market price of copper and the
other metals that we produce or may seek to produce;
- changes in general economic conditions, the financial markets,
inflation and interest rates and in the demand and market price for
our input costs, such as diesel fuel, reagents, steel, concrete,
electricity and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to the
value of the U.S. dollar and Canadian dollar, and the continued
availability of capital and financing;
- uncertainties resulting from the war in Ukraine, and the accompanying international
response including economic sanctions levied against Russia, which has disrupted the global
economy, created increased volatility in commodity markets
(including oil and gas prices), and disrupted international trade
and financial markets, all of which have an ongoing and uncertain
effect on global economics, supply chains, availability of
materials and equipment and execution timelines for project
development;
- uncertainties about the continuing impact of the novel
coronavirus ("COVID-19") and the response of local, provincial,
state, federal and international governments to the ongoing threat
of COVID-19, on our operations (including our suppliers, customers,
supply chains, employees and contractors) and economic conditions
generally including rising inflation levels and in particular with
respect to the demand for copper and other metals we produce;
- inherent risks associated with mining operations, including our
current mining operations at Gibraltar, and their potential impact on our
ability to achieve our production estimates;
- uncertainties as to our ability to control our operating costs,
including inflationary cost pressures at Gibraltar without impacting our planned copper
production;
- the risk of inadequate insurance or inability to obtain
insurance to cover material mining or operational risks;
- uncertainties related to the feasibility study for Florence copper project (the "Florence Copper
Project" or "Florence Copper") that provides estimates of expected
or anticipated capital and operating costs, expenditures and
economic returns from this mining project, including the impact of
inflation on the estimated costs related to the construction of the
Florence Copper Project and our other development projects;
- the risk that the results from our operations of the Florence
Copper production test facility ("PTF") and ongoing engineering
work including updated capital and operating costs will negatively
impact our estimates for current projected economics for commercial
operations at Florence Copper;
- uncertainties related to the accuracy of our estimates of
Mineral Reserves (as defined below), Mineral Resources (as defined
below), production rates and timing of production, future
production and future cash and total costs of production and
milling;
- the risk that we may not be able to expand or replace reserves
as our existing mineral reserves are mined;
- the availability of, and uncertainties relating to the
development of, additional financing and infrastructure necessary
for the advancement of our development projects, including with
respect to our ability to obtain any remaining construction
financing potentially needed to move forward with commercial
operations at Florence Copper;
- our ability to comply with the extensive governmental
regulation to which our business is subject;
- uncertainties related to our ability to obtain necessary title,
licenses and permits for our development projects and project
delays due to third party opposition, particularly in respect to
Florence Copper that requires one key regulatory permit from
the U.S. Environmental Protection Agency ("EPA") in order
to advance to commercial operations;
- our ability to deploy strategic capital and award key contracts
to assist with protecting the Florence Copper project execution
plan, mitigating inflation risk and the potential impact of supply
chain disruptions on our construction schedule and ensuring a
smooth transition into construction once the final permit is
received from the EPA;
- uncertainties related to First Nations claims and consultation
issues;
- our reliance on rail transportation and port terminals for
shipping our copper concentrate production from Gibraltar;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our exploration and development
activities and mining operations and mine closure and bonding
requirements;
- our dependence solely on our 75% interest in Gibraltar (as defined below) for revenues and
operating cashflows;
- our ability to collect payments from customers, extend existing
concentrate off-take agreements or enter into new agreements;
- environmental issues and liabilities associated with mining
including processing and stock piling ore;
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we
operate our mine, industrial accidents, equipment failure or other
events or occurrences, including third party interference that
interrupt the production of minerals in our mine;
- environmental hazards and risks associated with climate change,
including the potential for damage to infrastructure and stoppages
of operations due to forest fires, flooding, drought, or other
natural events in the vicinity of our operations;
- litigation risks and the inherent uncertainty of litigation,
including litigation to which Florence Copper could be subject
to;
- our actual costs of reclamation and mine closure may exceed our
current estimates of these liabilities;
- our ability to meet the financial reclamation security
requirements for the Gibraltar
mine and Florence Project;
- the capital intensive nature of our business both to sustain
current mining operations and to develop any new projects,
including Florence Copper;
- our reliance upon key management and operating personnel;
- the competitive environment in which we operate;
- the effects of forward selling instruments to protect against
fluctuations in copper prices, foreign exchange, interest rates or
input costs such as fuel;
- 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; and
Management Discussion and Analysis ("MD&A"), quarterly reports
and material change reports filed with and furnished to securities
regulators, and those risks which are discussed under the heading
"Risk Factors".
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, including the "Risk Factors"
included in our Annual Information Form.
For further information on Taseko, see the Company's website at
www.tasekomines.com or contact: Brian Bergot, Vice President,
Investor Relations - 778-373-4533 or toll free 1-877-441-4533