TASEKO ANNOUNCES FIRST QUARTER 2011 EARNINGS RESULTS
_____________________________________________________________________ |This release should be read with the unaudited financial statements | |and management's discussion and analysis available at | |www.tasekomines.com and | |filed on www.sedar.com. Our | |financial results are prepared in accordance with IFRS and expressed | |in Canadian dollars, unless otherwise noted. Sales and production | |volumes for the Company's 75%-owned Gibraltar mine are presented on a| |100% basis unless otherwise indicated. | |_____________________________________________________________________|
VANCOUVER, June 9, 2011 /PRNewswire/ – Taseko Mines Limited (TSX: TKO; NYSE
Amex: TGB) announces first quarter earnings of $5.7 million, or $0.03
per share. Adjusted earnings(1) were $10.8 million, or $0.06 per share, a 48% increase over the $7.3
million reported in the first quarter of 2010.
-- Adjusted net earnings1 for the first quarter were $10.8 million, an increase over adjusted net earnings of $7.3 million for the prior-year period. The increase in adjusted net earnings reflects higher cash margins realized on copper sales due to higher market copper prices, offset by the reduced ownership in Gibraltar. Adjusted EPS for the first quarter 2011 was $0.06 compared to $0.04 for the first quarter 2010. -- Operating profit1 was $18.6 million in the first quarter 2011 compared to $24.6 million in the first quarter 2010. -- Cash margins1 continue to benefit from higher copper prices, increasing 34% to US$2.21 per pound from US$1.64 per pound in the prior year period. This corresponds with a 51% gross margin in the first quarter of 2011 versus 50% in the first quarter of 2010. -- Gibraltar's copper production and sales volumes for first quarter 2011 were 19.2 million pounds and 17.0 million pounds, respectively. In first quarter 2010, copper production and sales volumes were 23.2 million pounds and 20.5 million pounds, respectively. -- During the quarter we announced plans to proceed with a $325-million expansion at Gibraltar. Gibraltar Development Plan 3 ("GDP3") will increase annual production capacity to 180 million pounds of copper. -- In April, we completed a public offering of US$200 million aggregate principal amount of senior notes. We intend to use the proceeds primarily to fund GDP3. -- In May, we announced an 80% increase in mineral reserves at the Gibraltar mine, adding approximately 1.8 billion pounds of recoverable copper to the previous reserve of 2.5 billion pounds for a total of 4.3 billion recoverable pounds of copper.
Russell Hallbauer, President and CEO of Taseko, remarked “Cash margins
continue to be a focus for the Company as we balance stripping
requirements with metal production. The site’s primary focus has been
completion of the SAG mill direct feed system which is now operational
and we expect to see increasing mill throughput in the coming months.
Unit operating cash costs for the quarter have increased as a result of
increased strip ratio, a stronger Canadian dollar, higher consumable
costs including diesel, steel, and reagents as well as lower metal
production. This is partially offset by significantly improved
Gibraltar Operating Results
GIBRALTAR OPERATING STATISTICS (100% Three months ended March 31, BASIS) 2011 2010 Tons mined (millions) 14.0 11.5 Tons milled (millions) 3.2 3.6 Stripping ratio 2.5 2.2 Copper Grade (%) 0.337 0.355 Recovery (%) 89.8 89.8 Production (million pounds) 19.2 23.2 Sales (million pounds) 16.6 20.4 Molybdenum Grade (%) 0.013 0.014 Recovery (%) 36.7 21.5 Production (thousand pounds) 316.5 194.0 Sales (thousand pounds) 308.5 210.0 Copper cathode Production (million pounds) 0.1 0.0 Sales (million pounds) 0.4 0.1 Per unit data 1 Operating cash costs 2 (US$ per pound) $2.08 $1.41 By-product credits 3 (US$ per pound) ($0.35) ($0.20) Offsite costs for treatment & refining $0.37 $0.34 & transport 3 (US$ per pound) Total cash costs of production (US$ per $2.10 $1.55 pound) Total cash costs of production (Cdn$ $2.07 $1.62 per pound) Total cash costs of sales (US$ per $2.08 $1.65 pound) Total cash costs of sales (Cdn$ per $2.05 $1.71 pound)
(1) Operating cash costs and total cash costs per pound produced are
non-GAAP financial performance measures with no standard definition
under IFRS. See pages 14-17 of the Company’s MD&A.
(2) Operating cash costs are comprised of direct mining costs which include
personnel costs, mine site general & administrative costs,
non-capitalized stripping costs, maintenance & repair costs, operating
supplies and external services. Non-cash costs, such as share-based
compensation and depreciation, have been excluded.
(3) By-product credits are calculated based on actual sales of molybdenum
and silver for the period, divided by the total pounds of copper
produced during the period.
The Gibraltar mine’s first quarter 2011 copper production was 19.3
million pounds, down 17% compared first quarter 2010. First quarter
2011 copper production was hampered by harsh winter conditions in
January and February, an unscheduled four-day maintenance down and
lower head grade. The Gibraltar concentrator, however, continued to
perform well on copper recovery.
Molybdenum production during first quarter 2011 was 316.5 thousand
pounds, up 63% compared to the prior-year quarter, largely due to a 71%
increase in molybdenum recovery. The recovery increase was a result of
operational and technical improvements to the molybdenum separation
In first quarter 2011, operating cash costs per pound of copper produced
averaged US$2.08, a 48% increase over the US$1.41 averaged during first
quarter 2010. Operating cash costs were adversely impacted in first
quarter 2011 by the higher strip ratio, a reduction in copper
production, the strengthened Canadian dollar compared to the US dollar,
and increased mining consumables costs. Offsite costs for treatment
and refining and transportation increased to US$0.37 per pound of
copper produced in first quarter 2011, compared to US$0.34 per pound in
the prior-year quarter. These cost increases were partially mitigated
by a 77% increase in by-product credits during the first quarter 2011
to US$0.35 per pound of copper produced. By-product credits are
comprised of molybdenum and silver sales during the quarter, divided by
the total pounds of copper produced during the same period.
Gibraltar Development Plan 3
During the first quarter 2011, Taseko announced plans to proceed with an
investment to significantly increase production at Gibraltar. GDP3
will include construction of a new concentrator to complement the
existing 55,000 tons per day facility, increasing annual production
capacity to 180 million pounds of copper at life of mine average
grade. A new molybdenum recovery facility is also planned to increase
annual molybdenum production to over two million pounds. The capital
cost for the concentrator facility is estimated to be $235 million and
approximately $90 million for the additional mining equipment. The
estimated $325 million total capital cost represents 100% of the
outlays required; our share is expected to be 75% of that amount.
Gibraltar Reserve Update
In May 2011, Taseko announced an 80% increase in mineral reserves at the
Gibraltar mine, from 445 million tons to 802 million tons. The reserve
evaluation maintained a 0.20% copper cut-off, incorporating a
US$2.25-per-pound pit shell design across the five pits that make up
the Gibraltar deposit. The previous reserve update completed in 2008
used a US$1.75-per-pound pit shell for the Gibraltar Extension and
US$1.50 per pound for all other areas. Approximately 1.8 billion pounds
of recoverable copper were added to the previous reserve of 2.5 billion
pounds for a total of 4.3 billion recoverable pounds of copper.
Molybdenum reserves increased from 30 million pounds to nearly 60
After the completion of GDP3, the Gibraltar ore body will be capable of
supporting mining operations of 30 million tons of ore per year with
production capacity of 180 million pounds of copper and 2.2 million
pounds of molybdenum. The 4.3 billion pounds of recoverable copper will
sustain operations at Gibraltar over the next 27 years at the increased
production capacity levels which are anticipated to be achieved by
The Company’s 2010 exploration program on the Aley deposit resulted in
the January 2011 announcement that assay results from this program
indicate strong potential for development of a major niobium deposit
and mine operation.
Our 2010 exploration program comprised geological mapping and diamond
drilling of 23 drill holes for a total of 4,460 metres. These holes
intersected excellent grade niobium mineralization across an area
measuring over 900 metres east-west and 350 metres north-south.
Mineralized drill intercepts range up to over 200 metres in length; the
true widths will be determined by further delineation drilling. The
niobium mineralization intersected is close to surface, highly
continuous and is open to expansion in at least three directions and to
depth. Please see the Company’s press release dated January 10, 2011
and our website for further information on the 2010 program.
For 2011, Taseko plans to accelerate work on the project with a
comprehensive work program including improved road access, exploration
and geotechnical drilling, metallurgical test work and environmental
baseline studies. We believe there is a strong market for niobium in
steel production and an excellent opportunity for development if the
deposit is confirmed.
New Prosperity (100%)
In November 2010, the Federal Minister of Environment announced that the
Prosperity project, as proposed, would not be granted Federal
authorization to proceed. We have since that time reviewed and revised
our plans for the project and have put forth a new design proposal
which adds construction costs and life of mine operating expenditures
of approximately $300 million to the original design. The new plan
responds to concerns identified during the Federal review process and
in February 2011, the Company submitted a new Project Description to
the Federal Government. The Federal Government subsequently requested
additional information, which was supplied as a revised project
description on June 6, 2011 (for more information, see Taseko Mines
The Canadian Environmental Assessment Agency (CEAA) is now expected to
confirm the adequacy of the revised project description. Once
confirmed, the Federal Government has up to 90 days to: coordinate with
the Province of British Columbia; prepare a detailed background
document, including project scope; and launch the Environmental
Assessment review. We expect the Environmental Assessment review to
commence by September 2011.
Summary Financial Results
Three months ended March 31, (Cdn$ in thousands, except per share 2011 2010 amounts) Revenues $ 58,801 $ 75,508 Operating profit $ 18,604 $ 24,570 Net earnings $ 5,753 $ 77,059 Per share ("EPS") $ 0.03 $ 0.42 Adjusted net earnings: Net earnings $ 5,753 $ 77,059 Adjustments: Unrealized (gain)/loss on derivative 486 (7,491) instruments Gain on sale of marketable securities - (349) Changes in fair value of financial 529 - instruments Foreign currency translation 4,026 1,196 gains/losses Loss on extinguishment of debt - 2,136 Gain on contribution to joint venture, - (65,268) net of tax effect Adjusted net earnings $ 10,794 $ 7,283 Per share ("adjusted EPS") $ 0.06 $ 0.04
____________________________________________________________________ |Taseko will host a conference call on Friday, June 10, 2011 at 11:00| |a.m. Eastern Time (8:00 a.m. Pacific) to discuss these results. The | |conference call may be accessed by dialing (877) 303-9079 in Canada | |or (970) 315-0461 internationally. A live and archived audio webcast| |will also be available at | |www.tasekomines.com. | | | |The conference call will be archived for later playback until June | |17, 2011 and can be accessed by dialing (800) 642-1687 in Canada and| |the United States, or (706) 645-9291 internationally and using the | |passcode 69810711. | |____________________________________________________________________|
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 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 our ability to complete the mill upgrade on time estimated and at the scheduled cost; -- 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.com and home jurisdiction filings that are available at www.sedar.com.
(1) Adjusted net earnings, operating profit and cash margins are non-GAAP
financial performance measures. See pages 15-18 of the MD&A.
SOURCE Taseko Mines Limited