Taseko Reports $108 Million of Adjusted EBITDA FOR 2020
TASEKO REPORTS $108 MILLION OF ADJUSTED EBITDA FOR 2020
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 volumes stated in this release are on a 100% basis unless otherwise indicated.
Note: Gibraltar is a contractual, unincorporated joint venture between Taseko Mines Limited (75% interest) and Cariboo Copper
Corp. (25% interest). All production and sales figures are reported on a 100% basis, unless otherwise noted.
February 24, 2021, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE American: TGB ; LSE:
TKO) ("Taseko" or the "Company") reports full-year 2020 earnings from mining operations before depletion
and amortization* of $119 million and Adjusted EBITDA* of $108 million. For the year, the Company had
a Net Loss of $24 million, or $0.09 loss per share.
Russell Hallbauer, CEO and Director, commented, “We have witnessed a remarkable recovery in the copper
market since March of last year. The price of copper has more than doubled in that time and even since the
end of 2020, the price has climbed a further US$0.70 per pound. Last year, Gibraltar produced 123 million
pounds of copper, and our 2021 production estimate is slightly higher at 125 million pounds. Gibraltar has
been Taseko’s cornerstone asset for over 15 years, generating positive cash flow through the copper price
cycles, but it is times like this that we truly benefit from the leverage to copper from our large, steady-state
production base. At current copper prices, which are now more than US$1.40 per pound higher than last
year’s average, we would have generated roughly $275 million of adjusted EBITDA* in 2020.”
“Copper production in the fourth quarter was 25 million pounds , which was below prior quarters due to
lower grade and harder ore as mining transitioned into the Pollyanna pit. Mine -to-mill adjustments were
made during the fourth quarter and throughput returned to design capacity in December. The Pollyanna pit,
which is about 4% lower grade than the reserve grade , will be the main source of ore for the first half of
2021. In the second half of the year, ore mining will commence in the Gibraltar pit, which is higher grade
and has a lower work index (softer ore),” added Mr. Hallbauer.
Stuart McDonald, President of Taseko, con tinued, “ The $108 million of adjusted EBITDA * and $10 6
million of operating cash flow we generated in 2020 was a tremendous accomplishment and demonstrates
the resiliency of our operation in the face of a global pandemic and volatile economic environment.
Our successes, however, were not limited to Gibraltar. At Florence Copper we have achieved key milestones
in recent months which have de-risked the project considerably. We received the state permit in December
and we continue to expect the federal permit from the EPA in the coming months . And in February we
completed a successful US$400 million bond refinancing which was upsized to provide f inancing for
development of the commercial facility at Florence. We now have a cash balance of approximately US$200
million and with the majority of required funding in hand we are moving forwa rd with final design
engineering and procurement initiatives. T his work will facilitate a seamless construction start up and we
will move forward expeditiously with on -the-ground construction activities as soon as we have the final
permits in place.”
*Non-GAAP performance measure. See end of news release.
“2021 will be a transformational year for Taseko as we take the final steps to unlock the full value of Florence
and pave the way to becoming a multi-asset copper producer. The addition of Florence will increase Taseko’s
attributable annual copper producti on by 85% to approximately 185 million pounds. Florence production
will also significantly reduce Taseko’s consolidated operating costs given its expected C1 operating costs of
US$0.90 per pound of copper. With increased investor focus on sustainability and environmental footprint,
we are very proud of the fact that Florence Copper will also be one of the greenest copper production
facilities in the world and will provide high quality copper to the US domestic market in support of its green
infrastructure and electrification initiatives in the years to come,” concluded Mr. McDonald.
2020 Annual Review
Earnings from mining operations before depletion and amortization* was $119.0 million and
Adjusted EBITDA* was $108.2 million;
Cash flows from operations was $106.2 million, compared to $42.6 million in the prior year;
In response to the COVID -19 pandemic management implemented a number of cost saving
initiatives in 2020, including a revised mine plan for Gibraltar, which reduced total site operating
costs by $28.2 million compared to 2019. Site operating costs, net of by -product credits* was
US$1.62 per pound produced, and total operating costs (C1)* was US$1.92 per pound produced;
The Gibraltar mine operated continuously through the year and produced 123.0 million pounds of
copper and 2.3 million pounds of molybdenum (100% basis). Copper recoveries were 84.3% and
copper head grades for the year were 0.243%;
Gibraltar extended its five -year copper concentrate offtake contract, for roughly 50% of its
production, for an additional year, which is expected to result in a 30% reduction in treatment and
refining costs in 2021, reflecting the continued tight physical copper concentrate market conditions
and the strategic demand for Gibraltar’s high-quality concentrates;
On November 17, 2020, Taseko closed an offering of common shares for net proceeds of $34.3
million;
On February 10, 2021, Taseko closed an offering of US$400 million 7% Senior Secured Notes due
2026. A portion of the proceeds will be used to redeem all of the outstanding US$250 million 8.75%
Senior Secured Notes due 2022 on March 3, 2021, including accrued interest and transaction costs;
The Company’s cash balance at December 31, 2020 was $85.1 million, and the bond refinancing
transaction in February 2021 provided additional net cash proceeds of $167 million (or US$131
million);
Copper prices have recovered strongly and the current price of over US$4.20 per pound is
significantly higher than the average LME price of $2.80 per pound in 2020; and
The Arizona Department of Environmental Quality (“ADEQ”) issued the Aquifer Protection Permit
(“APP”) for Florence Copper on December 8, 2020. The Company is now moving forwar d with
final design engineering of the Florence commercial production facility and procurement of certain
critical components.
*Non-GAAP performance measure. See end of news release.
Fourth Quarter Review
Fourth quarter earnings from mining operations before depletion and amortization* was $27.1
million, and Adjusted EBITDA* was $20.5 million;
Cash flow from operations was $20.4 million;
The Gibraltar mine produced 25.0 million pounds of copper in the fourth quarter. Copper recoveries
were 83.3% and copper head grades were 0.201%;
Gibraltar sold 25.0 million pounds of copper in the quarter (100% basis) which resulted in $85.9
million of revenue for Taseko. Average LME copper prices were US$3.25 per pound in the quarter
and revenue also included positive provisional price adjustments of $8.4 million; and
Net income (GAAP) for the fourth quarter was $5.7 million ($0.02 per share). Adjusted net loss*
was $7.5 million ($0.03 loss per share).
HIGHLIGHTS
Financial Data
Year ended
December 31,
Three Months ended
December 31,
(Cdn$ in thousands, except for per share amounts) 2020 2019 Change 2020 2019 Change
Revenues 343,267 329,163 14,104 87,398 89,932 (2,534)
Earnings from mining operations before depletion
and amortization* 119,026 70,613 48,413 27,062 23,921 3,141
Adjusted EBITDA* 108,229 51,057 57,172 20,478 18,246 2,232
Cash flows provided by operations 106,195 42,641 63,554 20,424 9,227 11,197
Earnings (loss) from mining operations 23,725 (39,143) 62,868 8,315 (7,459) 15,774
Net income (loss) (23,524) (53,382) 29,858 5,694 (9,931) 15,625
Per share - basic (“EPS”) (0.09) (0.22) 0.13 0.02 (0.04) 0.06
Adjusted net loss* (26,539) (68,610) 42,071 (7,473) (16,159) 8,686
Per share - basic (“Adjusted EPS”)* (0.11) (0.28) 0.17 (0.03) (0.07) 0.04
Operating Data (Gibraltar - 100% basis)
Year ended
December 31,
Three Months ended
December 31,
2020 2019 Change 2020 2019 Change
Tons mined (millions) 98.7 100.4 (1.7) 26.4 25.8 0.6
Tons milled (millions) 30.1 29.9 0.2 7.5 7.8 (0.3)
Production (million pounds Cu) 123.0 125.9 (2.9) 25.0 33.4 (8.4)
Sales (million pounds Cu) 124.0 122.4 1.6 25.0 33.3 (8.3)
*Non-GAAP performance measure. See end of news release.
REVIEW OF OPERATIONS
Gibraltar mine (75% Owned)
Operating data (100% basis) Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
YE
2020
YE
2019
Tons mined (millions) 26.4 23.3 20.5 28.5 25.8 98.7 100.4
Tons milled (millions) 7.5 7.5 7.7 7.5 7.8 30.1 29.9
Strip ratio 1.9 1.5 1.9 2.7 2.1 2.0 2.6
Site operating cost per ton milled (CAD$)* $11.67 $9.57 $7.66 $9.52 $10.46 $9.59 $10.92
Copper concentrate
Head grade (%) 0.201 0.228 0.281 0.259 0.253 0.243 0.245
Copper recovery (%) 83.3 85.0 85.2 83.4 84.5 84.3 86.2
Production (million pounds Cu) 25.0 28.9 36.8 32.4 33.4 123.0 125.9
Sales (million pounds Cu) 25.0 28.6 39.3 31.1 33.3 124.0 122.4
Inventory (million pounds Cu) 3.4 3.6 3.8 6.4 5.0 3.4 5.0
Molybdenum concentrate
Production (thousand pounds Mo) 549 668 639 412 728 2,269 2,739
Sales (thousand pounds Mo) 487 693 656 403 791 2,239 2,787
Per unit data (US$ per pound produced)*
Site operating costs* $2.67 $1.85 $1.15 $1.64 $1.85 $1.75 $1.95
By-product credits* (0.14) (0.14) (0.11) (0.11) (0.16) (0.13) (0.20)
Site operating costs, net of by-product credits* $2.53 $1.71 $1.04 $1.53 $1.69 $1.62 $1.75
Off-property costs 0.29 0.29 0.30 0.29 0.32 0.30 0.31
Total operating costs (C1)* $2.82 $2.00 $1.34 $1.82 $2.01 $1.92 $2.06
OPERATIONS ANALYSIS
Full-year results
To-date, there have been no interruptions to the Company’s operations, logistics and supply chains as a result
of the COVID -19 pandemic. Heightened health and safety protocols continue to be implemented and
monitored for effectiveness.
In 2020, Gibraltar produced 123.0 million pounds of copper compared to 125.9 million in 2019. Copper
grade for the year averaged 0.243% copper which was consistent with 2019. Copper recovery for 2020 was
84.3% and was affected by higher iron content in the ore in the first quarter and increased oxide ore and ore
hardness in the initial Pollyanna Pit benches in the fourth quarter.
*Non-GAAP performance measure. See end of news release.
OPERATIONS ANALYSIS - CONTINUED
A total of 98.7 million tons were mined in 2020, a slight decrease over the prior year. In response to COVID-
19, management implemented a revised mining plan in March 2020 that reduced operating costs over the
second and third quarters of 2020 while still maintaining long -term mine plan requirements. Site operating
costs, net of by -product credit for the year were US$1.62 per pound of copper produced, a decrease of
US$0.13 per pound from 2019.
The strip ratio for the year was 2.0 to 1 compared to 2.6 to 1 in 2019 reflecting the revised mine plan. In
addition, ore stockpiles increased over 2020 by 3.0 million tons from initial mining of ore in Pollyanna.
Molybdenum by-product credits per pound of copper produced* were US$0.13, compared to US$0.20 in the
prior year. The decrease was due to a drop in the average molybdenum price, which was US$8.68 per pound
in 2020 compared to US$11.36 per pound in 2019. Molybdenum production for 2020 was 2.3 million pounds
and 0.4 million pounds lower than in 2019.
Off-property costs per pound produced* were US$0.30 in 2020 and consist of concentrate treatment, refining
and transportation costs. These costs are in line with the prior year on a per pound basis.
Total operating costs per pound produced (C1)* were US$1.92 for the year compared to US$2.06 in 2019
due to the reduction in site spending.
Fourth quarter results
Copper production in the fourth quarter was 25.0 million pounds and was impacted by lower mined ore
grades in November and December. Mining in the Granite pit was completed in early October 20 20.
Additionally, increased oxide ore and ore hardness in the initial Pollyanna Pit benches affected recoveries
and throughput in the fourth quarter.
Total site spending (including capitalized stripping) was consistent with the fourth quarter of 2019 as the
mining rate returned to normal levels. The strip ratio for the fourth quarter was 1.9 to 1 consistent with the
average for the year. Capital expenditures in the fourth quarter included costs associated with the dewatering
system for the Gibraltar pit.
Molybdenum production was 549 thousand pounds in the fourth quarter, a decrease from the prior quarter
due to lower molybdenum grade, which also decreased recovery. Molybdenum prices continued their
recovery in the fourth quarter and averaged US$9.01 pe r pound but were still lower compared to US$9.67
per pound in Q4 2019. By-product credits per pound of copper produced* was US$0.14 in the fourth quarter.
Off-property costs per pound produced* were US$0.29 for the fourth quarter and consistent with prior
quarters.
Total operating costs (C1)* costs were US$2.82 per pound produced for the quarter. In addition to fewer
copper pounds being produced in the fourth quarter, contributing to the increase in C1* costs was a
decrease in capitalized stripping costs which was only $1.2 million compared to $3.6 million in the third
quarter, higher operating costs due to mining rates returning to normal levels and a strengthening Canadian
dollar.
*Non-GAAP performance measure. See end of news release.
ENVIRONMENT, SOCIAL AND GOVERNANCE
In May 2020, Taseko published its first Environmental, Social, and Governance report, which includes an
examination of the Company’s sustainable performance, with specific details for 2017, 2018 and 2019. The
report is available on the Company’s website at www.tasekomines.com/esg.
Nothing is more important to Taseko than the safety, health and well-being of our workers and their families.
Taseko is committed to operational practices that result in improved efficiencies, safety performance and
occupational health.
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 2020, Gibraltar’s days lost, loss time
incidents, lost time frequency, and loss time severity were all zero. The British Columbia mining industry
averages for 2020 were 0.68 for loss time frequency (per 200,000 hours worked) and 105.7 for loss time
severity.
The same priority on health, safety, and environmental performance, as well as the methods and culture at
Gibraltar are being implemented at Florence Copper as it prepares for construction.
GIBRALTAR OUTLOOK
Gibraltar is expected to produce approximately 125 million pounds on a 100% basis in 2021, compared to
123 million pounds in 2020. Copper prices are currently over US$4.20 per pound, compared to the average
LME copper price of $2.80 per pound in 2020. Molybdenum prices are currently 44% higher than the
average price in 2020. All of these factors are supportive of improved financial performance at the Gibraltar
mine in 2021.
With a strong copper price backdrop, mining rates have returned to more normal levels. Mining has
transitioned to the Pollyanna pit which will be the main source of ore in 2021. Copper production is expected
to be greater in the second half of 2021 as h igher grade areas in Pollyanna are opened up. Mining of the
Gibraltar pit will commence in the first part of 2021 with ore release commencing in the second half of the
year. Ore from the Gibraltar pit is relatively softer and is expected to require less energy to grind, which will
provide opportunities for increased mill throughput in the future.
Copper prices have recovered swiftly since March 2020 and are reaching multi -year highs due to recovery
in Chinese demand coupled with continued supply disrupti ons, most notably in South America. Many
governments are now focusing on increased infrastructure investment to stimulate economic recovery after
the pandemic, including green initiatives, which will require new primary supplies of copper. Most industry
analysts are projecting ongoing supply constraints and deficits, which should support higher copper prices
in the years to come.
FLORENCE COPPER
Florence Copper represents a low -cost growth project that will have an annual production capacity of 85
million pounds of copper over a 21-year mine life, and with the expected C1 operating cost of US$0.90 per
pound puts Florence Copper in the lowest quartile of the global copper cost curve. The commercial
production facility at Florence will also be one of the gre enest sources of mined copper, with carbon
emissions, water and energy consumption all dramatically lower than a conventional mine. We have
FLORENCE COPPER - CONTINUED
successfully operated a Production Test Facility (“PTF”) for the last two years 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 Flo rence Copper will include the construction and operation of the commercial ISCR
facility with an estimated capital cost of US$230 million (including reclamation bonding and working
capital). At a long -term 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.
On December 8, 2020, the Company received the Aquifer Protection Permit (“APP”) permit from the
Arizona Department of Environmental Quality (“ADEQ”). The APP permit was issued following a public
comment period and public hearing in August 2020 where the project rece ived strong support from local
community members, business owners and elected officials. The other required permit is the Underground
Injection Control (“UIC”) Permit from the U.S. Environmental Protection Agency (“EPA”) . The EPA’s
technical review for the UIC permit has identified no significant issues and the Company expects to receive
this permit in the coming months.
With the recently concluded equity and bond financings, the Company now has the majority of the required
Florence Copper construction funding in hand. Discussions with potential joint venture partners continue to
advance, and with the improved cash position and stronger expected cash flows from Gibraltar due to higher
prevailing copper prices, the Company has numerous options available to obtain the remaining funding.
Management is now moving forward with final design engineering for the commercial production facility
as well as procurement of certain long-lead critical components.
LONG-TERM GROWTH STRATEGY
Taseko’s strategy has been to grow the Company by acquiring and developing a pipeline of complimentary
projects focused on copper in stable mining jurisdictions. We continue to believe this will generate long -
term returns for shareholders. Our other deve lopment projects are focused primarily on copper and 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 long-term copper
price. 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 the environmental assessment and some additional
engineering work in conjunction with ongoing engagement with local communities including First Nations.
A focus group has been formed between the Company and high-level regulators in the appropriate Provincial
LONG-TERM GROWTH STRATEGY - CONTINUED
ministries in order to expedite the advancement of the environmental assessment and the permitting of the
project. Management also commenced joint venture partnering discussions in 2020 with a number of
strategic industry groups that are interested in potentially investing in the Yellowhead project in combination
with acquiring significant copper offtake rights.
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, facilitated by the Province of British Col umbia, to try to obtain a long -term
solution to the conflict regarding Taseko’s proposed gold-copper mine currently known as New Prosperity,
acknowledging Taseko’s commercial interests and the Tŝilhqot’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
Teztan Biny (Fish Lake).
The COVID-19 pandemic delayed the commencement of the dialogue for several months, but the Tŝilhqot’in
Nation and Taseko have made progress in establishing a constructive dialogue. In December 2020 they
agreed to extend the standstill for a further year so they can continue this dialogue.
Aley Niobium Project
Environmental monitoring and product marketing initiatives on the Aley Niobium project continue. The
pilot plant program has successfully completed the niobium flotation process portion of the test, raising
confidence in the design and providing feed to the converter portion of the process. Completion of the
converter pilot test, which is underway, will provide additional process data to support the design of the
commercial process facilities and provide final product samples for marketing purposes.
The Company will host a telephone conference call and live webcast on Thursday, February 25, 2021 at 11:00 a.m. Eastern Time
(8:00 a.m. Pacific Time, 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 (888) 390 -0546 within North
America, or (416) 764-8688 for international callers.
The conference call will be archived for later playback until March 11, 2021 and can be accessed by dialing (888) 390-0541 within
North America or (416) 764-8677 internationally and using the passcode 585262 #.
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
Russell Hallbauer
CEO and Director
No regulatory authority has approved or disapproved of the information in this news release.