Taseko Reports 2019 Fourth Quarter and Annual Financial Results
TASEKO REPORTS 2019 FOURTH QUARTER AND
ANNUAL FINANCIAL RESULTS
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.
February 20, 2020, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO)
("Taseko" or the "Company") reports financial results for the fourth quarter and full year ending December 31,
2019. For the fourth quarter, Taseko recorded earnings from mining operations before depletion and amortization*
of $23.9 million, adjusted EBITDA* of $18.2 million and an adjusted net loss of $16.2 million ($0.07 per share).
For the full year, Taseko reports ea rnings from mining operations before depletion and amortization* of $ 70.6
million, adjusted EBITDA* of $51.1 million and an adjusted net loss of $68.6 million ($0.28 per share).
Russell Hallbauer, Chief Executive Officer of Taseko, commented, “ Operationally, we are happy with the
performance at Gibraltar in 2019. Grade variability was low and copper production of 126 million pounds met our
annual production guidance. Additionally, molybdenum production of 2.7 million pounds was the best ever at
Gibraltar and, combined with strong molybdenum pricing, generated an important by-product credit. For 2020, we
maintain guidance of 130 million pounds (+/-5%) of copper production, on a 100% basis, consistent with the life of
mine average.”
Stuart McDonald, President of Taseko, stated, “Earnings and cashflow were lower in 2019, mainly due to a lower
average copper price. Even though the price of copper has been impacted recently by global events, we still believe
the supply/demand fundamentals remain inta ct with the opportunity for a significant positive copper price
movement. With our production from Gibraltar we continue to have significant cashflow leverage to th e copper
price upside, and on the downside we have copper put options in place until the end of April at a strike price of
US$2.60 per pound, which protect our cash flow in the event copper drops from current levels. Offsetting lower
copper prices, we are seeing reductions in off-property costs and other input costs. For 2020, benchmark treatment
and refining costs are more than 20% lower than last year, and combined with recent fuel price declines and other
supplier cost reduction initiatives, represent approximately seven cents per pound of annualized cost savings to
begin the year.”
“Our Florence Copper Project is making headway, both from a technical perspective as well as the permitting
process. After 14 months of operating the test facility, our knowledge of the in-situ leaching operation continues to
grow. The wellfield continues to produce a commercial grade leach solution and the SX/EW plant is producing
LME Grade A copper cathode on a steady -state basis. Detailed engineering for the commercial scale facility is
progressing, benefitting from the many months of test facility operating data. With both the state and federal
regulators (Arizona Department of Environmental Quality and US Environmental Protection Agency ) actively
involved, permitting is advancing and now in the technical review phase,” added Mr. McDonald.
*Non-GAAP performance measure. See end of news release.
“Going forward, our focus will be on maintaining operating cash flow at Gibraltar, given the lower copper pricing
currently being realized. While we expect a recovery in copper price, we will operate our company in the most cost-
effective manner and manage project and other discretionary spending appropriate ly in the current environment,”
concluded Mr. McDonald.
2019 Annual Review
• Earnings from mining operations before depletion and amortization* was $70.6 million and Adjusted
EBITDA* was $51.1 million;
• Cash flows from operations was $42.6 million and capital expenditures for the year totalled $50.8 million;
• Cash balance at December 31, 2019 was $53 million, which was $8 million higher than the end of 2018;
• Site operating costs, net of by-product credits* was US$1.75 per pound produced, and total operating costs
(C1)* was US$2.06 per pound produced;
• Net loss for the year was $53.4 million ($0.22 per share) with depreciation $39 million greater than the
prior year due to the amortization of capitalized strip associated with ore mined from the Granite pit.
Adjusted net loss* was $68.6 million ($0.28 per share) after adjusting for the unrealized foreign exchange
gain of $15.2 million;
• The Gibraltar Mine (100% basis) produced 125.9 million pounds of copper in 2019, a slight improvement
over 2018. Copper recoveries were 86.2% and copper head grades for the year were 0.245%;
• Gibraltar produced 2.7 million pounds of molybdenum in 2019 compared to 2.4 million pounds in 2018.
Molybdenum provided a by-product credit of US$0.20 per pound of copper consistent with 2018;
• Sales of copper were 122 million pounds in 2019 with finished goods inventory at Gibraltar (100% basis)
including 5.0 million pounds of copper. This copper concentrate inventory at December 31, 2019 had a
sales value of approximately $14 million for Taseko’s share;
• Taseko continued to advance its production test facility operation at the Florence Copper project with the
wellfield performing to expectation. The SX-EW plant continues to produce LME grade A copper cathode.
Commercial permit applications for Phase 2 were submitted to the state and federal agencies in the middle
of 2019 and permitting initiatives are underway; and
• In February 2019, the Company acquired the remaining interests in Yellowhead Mining Inc. that it did not
already own for consideration of $13 million in the Company’s common shares. On January 16, 2020, the
Company published the results of its updated NI 43 -101 Technical report on the Yellowhead project
outlining a significantly improved development plan and economics.
Fourth Quarter Review
• Fourth quarter earnings from mining operations before depletion and amortization* was $23.9 million, and
Adjusted EBITDA* was $18.2 million;
• Cash flow from operations was $9.2 million;
*Non-GAAP performance measure. See end of news release.
• Site operating costs, net of by-product credits* was US$1.69 per pound produced, consistent with the prior
two quarters;
• Net loss was $9.9 million ($0.04 per share) after depletion and amortization of $31.4 million in the quarter.
Adjusted net loss* was $16.2 million ($0.07 per share) after adjusting for the unrealized foreign exchange
gain of $5.9 million;
• Copper production in the fourth quarter was consistent with p revious quarters at 33.4 million pounds and
copper sales were 33.3 million pounds (100% basis); and
• Molybdenum production was steady at 728 thousand pounds in Q4; molybdenum prices averaged US$9.67
per pound during the quarter down from US$11.83 per pound in Q3.
HIGHLIGHTS
Financial Data
Year ended
December 31,
Three Months Ended
December 31,
(Cdn$ in thousands, except for per share amounts) 2019 2018 Change 2019 2018 Change
Revenues 329,163 343,870 (14,707) 89,932 111,121 (21,189)
Earnings from mining operations before depletion and
amortization* 70,613 112,003 (41,390) 23,921 28,450 (4,529)
Adjusted EBITDA* 51,057 98,217 (47,160) 18,246 26,489 (8,243)
Cash flows provided by operations 42,641 94,078 (51,437) 9,227 44,120 (34,893)
Earnings (loss) from mining operations (39,143) 41,222 (80,365) (7,459) 10,578 (18,037)
Net loss (53,382) (35,774) (17,608) (9,931) (19,720) 9,789
Per share - basic (“EPS”) (0.22) (0.16) (0.06) (0.04) (0.09) 0.05
Adjusted net loss* (68,610) (8,508) (60,102) (16,159) (1,310) (14,849)
Per share - basic (“Adjusted EPS”)* (0.28) (0.04) (0.24) (0.07) (0.01) (0.06)
Operating Data (Gibraltar - 100% basis)
Year ended
December 31,
Three Months Ended
December 31,
2019 2018 Change 2019 2018 Change
Tons mined (millions) 100.4 111.6 (11.2) 25.8 28.4 (2.6)
Tons milled (millions) 29.9 30.1 (0.2) 7.8 7.1 0.7
Production (million pounds Cu) 125.9 125.2 0.7 33.4 25.8 7.6
Sales (million pounds Cu) 122.4 126.5 (4.1) 33.3 42.7 (9.4)
*Non-GAAP performance measure. See end of news release.
REVIEW OF OPERATIONS
Gibraltar Mine (75% Owned)
Operating data (100% basis) Q4
2019
Q3
2019
Q2
2019
Q1
2019
Q4
2018
YE
2019
YE
2018
Tons mined (millions) 25.8 24.7 26.6 23.3 28.4 100.4 111.6
Tons milled (millions) 7.8 7.5 7.7 6.8 7.1 29.9 30.1
Strip ratio 2.1 3.0 2.3 3.2 5.1 2.6 2.7
Site operating cost per ton milled (CAD$)* $10.46 $10.83 $11.51 $10.88 $9.16 $10.92 $9.71
Copper concentrate
Head grade (%) 0.253 0.249 0.256 0.216 0.222 0.245 0.251
Copper recovery (%) 84.5 87.7 87.7 84.6 81.3 86.2 82.7
Production (million pounds Cu) 33.4 33.0 34.7 24.9 25.8 125.9 125.2
Sales (million pounds Cu) 33.3 33.5 32.3 23.3 42.7 122.4 126.5
Inventory (million pounds Cu) 5.0 5.0 5.5 3.1 1.6 5.0 1.6
Molybdenum concentrate
Production (thousand pounds Mo) 728 620 653 738 727 2,739 2,366
Sales (thousand pounds Mo) 791 518 708 770 738 2,787 2,304
Per unit data (US$ per pound produced)*
Site operating costs* $1.85 $1.88 $1.92 $2.23 $1.92 $1.95 $1.80
By-product credits* (0.16) (0.16) (0.21) (0.32) (0.30) (0.20) (0.20)
Site operating costs, net of by-product
credits* $1.69 $1.72 $1.71 $1.91 $1.62 $1.75 $1.60
Off-property costs 0.32 0.33 0.30 0.30 0.49 0.31 0.33
Total operating costs (C1)* $2.01 $2.05 $2.01 $2.21 $2.11 $2.06 $1.93
OPERATIONS ANALYSIS
Full-year results
In 2019, Gibraltar produced 125.9 million pounds of copper compared to 125.2 million in 2018. Copper grade for
the year averaged 0.245% copper, slightly below the life of mine average grade. Copper recovery for 2019 was
86.2%, an improvement over 2018 as a result of processing improvements and processing less oxidized ore.
A total of 100.4 million tons were mined in 2019, a 10% decrease over the prior year due to the mining deeper
within Granite pit resulting in longer haul distances. Waste stripping costs of $22.9 million (75% basis) were
capitalized in 2019 compared to $48.8 million in 2018 as more waste stripping was performed in the Granite pit in
the prior year.
*Non-GAAP performance measure. See end of news release.
OPERATIONS ANALYSIS - CONTINUED
Site operating costs* for the year were US$1.95 per pound of copper produced, an increase from 2018, due primarily
to the greater capitalization of stripping costs in the prior year. There was also higher mining costs per ton mined
in 2019 arising from greater haulage distances.
Molybdenum production for 2019 was 2.7 million pounds compared to 2.4 million pounds in 2018. This additional
production was offset by a decrease in the average molybdenum price, which was US$11.36 per pound in 2019
compared to US$12.20 per pound in 2018. The resulting by -product credits per pound of copper produced* of
US$0.20 remained consistent with the prior year.
Off property costs* were US$0.31 per pound of copper produced, consistent with US$0.33 per pound produced in
2018. The decrease was attributed to improved TCRCs on spot tenders in 2019 compared to 2018.
Total operating costs (C1)* were US$2.06 per pound of copper produced for the year compared to $1.93 per pound
in 2018 due to the difference in site operating costs as noted above.
Fourth quarter results
Copper production in the fourth quarter was 33.4 million pounds. Copper grade for the quarter averaged 0.253%,
which was in line with the life of mine average grade. Copper recovery in the mill was 84.5% during the quarter
which was lower than the first three quarters as a higher percentage of oxide ore was processed. The decrease in
recovery was offset by an increase in mill throughput during the quarter.
A total of 25.8 million tons were mined during the period, an increase of 1.1 million tons over the previous quarter
and the ore stockpile increased by 0.5 million tons. The strip ratio for the fourth quarter was 2.1 to 1 as more mining
took place in Granite. This resulted in less overall waste stripping of Pollyanna in the quarter.
Capitalized stripping costs totaled $4.3 million (75% basis) compared to $8.6 million in the prior quarter and $18.9
million in Q4 2018. The capitalized stripping costs are substantially attributable to advancement into the Pollyanna
pit and associated waste stripping costs while no ore from Pollyanna has been mined yet. Total site spending
(including capitalized stripping costs) was slightly lower than the previous quarter. The remaining decrease in site
operating cost per ton milled*, which was $10.46 for the quarter, was due to greater throughput.
Molybdenum production was 728 thousand pounds in the fourth quarter. Molybdenum prices averaged US$9.67
per pound over the fourth quarter compared to US$11.83 per pound in the prior quarter and US$12.04 per pound in
Q4 2018. By-product credits per pound of copper produced* was US$0.16 in the fourth quarter.
Off-property costs per pound produced* were US$0.32 for the fourth quarter of 2019 and consist of concentrate
treatment, refining and transportation costs. These costs are in line with recent quarters relative to pounds of copper
sold.
*Non-GAAP performance measure. See end of news release.
OPERATIONS ANALYSIS – CONTINUED
Health, Safety, and Environment
Health and safety have always been a high -level commitment for Taseko, Gibraltar, and Florence management.
Taseko is committed to operational practices that result in improved efficiencies, safety performance and
occupational health. Nothing is more important to the Company 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 2019, Gibraltar had five loss time incidents and a loss
time frequency of 0.68 (per 200,000 hours worked). This is lower than the British Columbia industry average loss
time frequency of 0.78 (per 200,000 hours worked). The Company r emains committed to a culture of safety -first,
ensuring safety is the first consideration in all actions taken.
The same priority on health, safety, and environmental performance, as well as the methods and culture at Gibraltar
are being imported and implemented at Florence Copper.
GIBRALTAR OUTLOOK
Gibraltar is expected to produce approximately 130 million pounds (+/-5%) on a 100% basis in 2020.
The fundamentals for copper remain strong and despite short-term volatility caused by global events including the
coronavirus, most industry analysts are projecting a continued supply constraint and higher copper prices than
current levels in the coming years . Expansion of overseas copper smelting capacity and tighter supply conditions
resulted in a reduced benchmark for 2020 for concentrate treatment and refining charges (“TCRC”) which were set
23% below 2019 benchmark levels.
On November 6, 2019, the Company published an updated NI 43-101 Technical report on the Gibraltar Mine. Based
on this updated technical report, sufficient Mineral Reserves exist to support an approximate 19 -year production
plan out to 2038 with annual average copper production of 130 million pounds. Mineral Resource potential exists
to potentially further extend the mine life beyond the known reserves.
REVIEW OF PROJECTS
Taseko’s strategy has been to grow the Company from the operating cash flow and credit quality of the Gibraltar
Mine to assemble and develop a pipeline of projects. We continue to believe this will generate lo ng-term returns
for shareholders. Our development projects are focused primarily on copper and are located in stable mining
jurisdictions in British Columbia and Arizona. Our current focus is on the near term development of the Florence
Copper Project.
Florence Copper Project
The Production Test Facility (“PTF”) operated as planned during 2019. Steady state operation was achieved and
the focus turned to testing different wellfield operating strategies, including adjusting pumping rates, solution
strength, flow direction, and the use of packers in recovery and injection wells to isolate different zones of the ore
body. The Florence Copper technical team is using physical and operating control mechanisms to adjust solution
REVIEW OF PROJECTS – CONTINUED
chemistry and flow rates and is successfully achieving targeted copper concentration in solution. The PTF wellfield
is performing to its design and the SX-EW plant continues to produce LME grade A copper cathode.
The main focus of the PTF phase is to demonstrate to regulators and key stakeholders that hydraulic control of
underground leach solutions can be maintained and provide valuable data to validate the Company’s leach model
as well as optimize well design and performance and hydraulic control parameters. Successful operation of the in-
situ leaching process will allow permits to be a mended for the full-scale commercial operation, which is expected
to produce 85 million pounds of copper cathode annually for 20 years.
Two permits are required to commence construction of the commercial scale wellfield at Florence Copper. These
are the Aquifer Protection Permit (“APP”) from the Arizona Department of Environmental Quality (“ADEQ”) and
the Underground Injection Control (“UIC”) Permit from the U.S. Environmental Protection Agency (“EPA”). In
June 2019, the Company submitted the APP application for the Phase 2 commercial facility to the ADEQ. The UIC
permit application for the Phase 2 commercial facility was submitted to the EPA in August 2019. Both permits are
advancing through the technical review process. The Company is in active dialogue with the regulators and targeting
to have permitting for the commercial facility completed in 2020.
The Company has continued to advance various project financing options from debt providers, royalty companies,
and potential joint venture partners for t he Phase 2 commercial development of the Florence Copper Project.
Management is targeting to have the project finance funding committed in advance of both the APP and UIC permit
amendments being issued by the ADEQ and EPA, respectively.
Total net expenditures at the Florence Project for the year ended December 31, 2019 were $16.0 million including
the PTF operation and other project development costs.
Yellowhead Copper Project
On February 15, 2019, the Company acquired all of the outstanding common shares of Yellowhead Mining Inc.
(“Yellowhead”) that it did not already own, in exchange for 17.3 million Taseko common shares. Yellowhead holds
a 100% interest in a copper-gold-silver development project located in south-central British Columbia.
In January 2020, the Company announced the results of its technical studies on Yellowhead which resulted in a
22% increase in recoverable copper reserves and significantly improved project economics. The Company filed a
new NI 43 -101 technical report (“Technical Report on the Mineral Reserve Update at the Yellowhead Copper
Project” dated January 16, 2020) (the “Technical Report”) on Sedar.
The updated Technical Report outlines a new development plan for the project, which includes an 817 million tonne
reserve and a 25-year mine life with a pre-tax NPV of $1.3 billion at an 8% discount rate using a US$3.10 per pound
copper price. This represents a $500 million increase over the 2014 Feasibil ity Study completed by the previous
owner. 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.
REVIEW OF PROJECTS – CONTINUED
The Company is focusing its efforts in 2020 on ongoing engagement with local communities including First
Nations, environmental assessment work, additional engineering an d joint venture partnering discussions with
strategic industry offtake groups.
New Prosperity Gold- Copper Project
On December 5, 2019, the Company announced that the Tŝilhqot’in Nation as represented by Tŝilhqot’in National
Government and Taseko have entered into a dialogue, facilitated by the Province of British Columbia, 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 opposition of the Tŝilhqot’in Nation to the
Project. While the details of this process are confidential, in order to facilitate a dialogue, the parties have agreed to
a standstill on certain outstanding litigation and regulatory matters which relate to Taseko’s tenures and the area in
the vicinity of Teztan Biny (Fish Lake).
Aley Niobium Project
Environmental monitoring and product marketing initiatives on the Aley Niobium project continue. A pilot plant
scale program commenced in the second quarter on the niobium flotation and converter processes. The pilot plant
will also provide final product samples for marketing purposes. Aley project expenditures for the year ended
December 31, 2019 were $0.8 million.
The Company will host a telephone conference call and live webcast on Friday, February 21, 2020 at 11:00 a.m. Eastern Time
(8:00 a.m. PST, 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 6,
2020 and can be accessed by dialing (888) 390 -0541 within North America or (416) 764 -8677 internationally and using the
passcode 966107#.
For further information on Taseko, please see the Company’s website www.tasekomines.com or contact:
Brian Bergot, Vice President, Investor Relations - 778-373-4533 or toll free 1-877-441-4533
Russell Hallbauer
Chief Executive Officer & Director
No regulatory authority has approved or disapproved of the information in this news release.