Taseko Reports Improved Copper Production and Second Quarter 2023 Financial Results
TASEKO REPORTS IMPROVED COPPER PRODUCTION AND
SECOND QUARTER 2023 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 87.5% 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
,
Aug. 2, 2023
/CNW/ - Taseko Mines Limited (TSX: TKO) (NYSE American: TGB) (LSE: TKO) ("Taseko" or the "Company")
reports second quarter 2023 Adjusted EBITDA* of
$22 million
, Earnings from mining operations before depletion and amortization* of
$28 million
and Cash flows provided by operations of
$33 million
. Adjusted net loss* was
$4 million
, or
$0.02
per share.
Gibraltar
produced 28 million pounds of copper and 230 thousand pounds of molybdenum in the second quarter. Copper production was 13%
higher than the prior quarter as a result of higher grade, throughput and recoveries. Sales for the second quarter were 26 million pounds of copper
(100% basis), slightly lower than the prior quarter, and also lower than second quarter production due to an increase of inventory in transit at the
end of June.
Stuart McDonald
, President and CEO of Taseko, commented "Mining operations are now well established in the lower benches of the
Gibraltar
pit,
which have higher grades and larger, more consistent ore zones. Low mill availabilities had an impact on production in April and May, but in June
and July we benefited from the softer ore in the
Gibraltar
pit and mill throughput averaged well above nameplate capacity. Copper production in
June and July was 11 million pounds in each month. The
Gibraltar
pit will be the sole source of ore for the remainder of 2023. With increased
copper production expected in the second half of the year we continue to track towards our original production guidance of 115 million pounds of
copper (+/-5%)."
"Total site costs* at
Gibraltar
dropped by
$7 million
over the previous quarter due to lower diesel and other costs, although the impact of cost
reductions was partially offset by lower molybdenum prices which reduced the by-product credit. Overall, unit operating costs dropped to
US$2.66
per pound of copper produced, 10% lower than the first quarter, and is expected to decline further in the second half of the year as production
increases.
Capital spending at
Gibraltar
was higher than normal in the quarter as work continued on the in-pit crusher relocation project and we completed a
major component replacement on one of our mining shovels, at a cost of
$10 million
. Work on the in-pit crusher will wind down in the third quarter
and the project will be completed in the second quarter of 2024 when the crusher is relocated," added Mr. McDonald.
Mr. McDonald concluded, "At Florence Copper, the Environmental Protection Agency ("EPA") is advancing its process for the Underground Injection
Control permit. Based on our latest dialogue with the EPA, we believe they are close to making a final permit decision. In the meantime, we
continue to advance discussions with potential financing partners for the remainder of the project financing package, which could include a copper
royalty and/or a small project loan. These transactions would complement the committed funding from Mitsui, Bank of America, and our revolving
credit facility."
Second Quarter Review
Second quarter earnings from mining operations before depletion and amortization* was
$27.7 million
, Adjusted EBITDA* was
$22.2 million
,
and cash flows from operations were
$33.3 million
;
GAAP net income was
$10.0 million
(
$0.03
per share) and Adjusted net loss* was
$4.4 million
(
$0.02
loss per share) after normalizing for
unrealized foreign exchange gains
Gibraltar
produced 28.2 million pounds of copper for the quarter, a 13% improvement over the prior quarter as a result of improved grades,
recoveries and mill throughput;
Copper head grades in the quarter were 0.24%, in line with expectations, as mining progressed deeper in the
Gibraltar
pit;
Gibraltar
sold 26.1 million pounds of copper in the second quarter (100% basis) with sales lagging production due to an increase of inventory in
transit at the end of June;
Total site costs* in the second quarter were
$105.4 million
on a 100% basis,
$7.4 million
lower than the previous quarter due to lower diesel,
explosive and contractor services costs;
As a result of commodity price decreases in the quarter, the Company wrote-down lower grade ore stockpile inventory to net realizable values
totalling
$8.1 million
(an impact of approximately
$0.03
per share);
On
June 28, 2023
, the Company entered into a second amendment to its silver stream agreement with Osisko Gold Royalties Ltd. and
received
$13.6 million
in exchange for increasing the payable silver from 75% to 87.5% and increasing the threshold delivery amount of silver
for the additional mineral reserves published in 2022;
In June, the Company amended its revolving credit facility to increase the amount of credit approval of the facility from
US$50 million
to
US$80
million
with the addition of ING Capital LLC to the syndicate of lenders;
The Company had a closing cash balance of
$86 million
at
June 30, 2023
; and
The B.C. port labour strike in the first half of
July 2023
did not have any impact on
Gibraltar
production but did restrict the mine's ability to ship
concentrate after the quarter end. The backlog of
Gibraltar
concentrate inventory is expected to be shipped in the second half of the year.
*Non-GAAP performance measure. See end of news release
HIGHLIGHTS
Operating Data (Gibraltar - 100% basis)
Three months ended June 30,
Six months ended June 30,
2023
2022
Change
2023
2022
Change
Tons mined (millions)
23.4
22.3
1.1
47.5
42.6
4.9
Tons milled (millions)
7.2
7.7
(0.5)
14.3
14.7
(0.4)
Production (million pounds Cu)
28.2
20.7
7.5
53.1
42.0
11.1
Sales (million pounds Cu)
26.1
21.7
4.4
52.7
49.1
3.6
Financial Data
Three months ended June 30,
Six months ended June 30,
(Cdn$ in thousands, except for per share amounts)
2023
2022
Change
2023
2022
Change
Revenues
111,924
82,944
28,980
227,443
201,277
26,166
Earnings from mining operations before depletion
and amortization
*
27,664
7,221
20,443
68,803
49,994
18,809
Cash flows provided by operations
33,269
18,344
14,925
61,268
70,097
(8,829)
Adjusted EBITDA
*
22,218
1,684
20,534
58,277
39,823
18,454
Net income (loss) (GAAP)
9,991
(5,274)
15,265
14,430
(179)
14,609
Per share – basic ("EPS")
0.03
(0.02)
0.05
0.05
-
0.05
Adjusted net income (loss)
*
(4,376)
(16,098)
11,722
712
(9,936)
10,648
Per share – basic ("adjusted EPS")
*
(0.02)
(0.06)
0.04
-
(0.03)
0.03
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS
Gibraltar
mine
Operating data (100% basis)
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Q2 2022
Tons mined (millions)
23.4
24.1
22.9
23.2
22.3
Tons milled (millions)
7.2
7.1
7.3
8.2
7.7
Strip ratio
1.5
1.9
1.1
1.5
2.8
Site operating cost per ton milled (Cdn$)*
$13.17
$13.54
$13.88
$11.33
$11.13
Copper concentrate
Head grade (%)
0.24
0.22
0.22
0.22
0.17
Copper recovery (%)
81.9
80.7
83.4
77.1
77.3
Production (million pounds Cu)
28.2
24.9
26.7
28.3
20.7
Sales (million pounds Cu)
26.1
26.6
25.5
26.7
21.7
Inventory (million pounds Cu)
5.6
3.7
5.4
4.2
2.7
Molybdenum concentrate
Production (thousand pounds Mo)
230
234
359
324
199
Sales (thousand pounds Mo)
231
225
402
289
210
Per unit data (US$ per pound produced)
*
Site operating costs
*
$2.43
$2.94
$2.79
$2.52
$3.25
By-product credits
*
(0.13)
(0.37)
(0.40)
(0.15)
(0.15)
Site operating costs, net of by-product credits
*
$2.30
$2.57
$2.39
$2.37
$3.10
Off-property costs
0.36
0.37
0.36
0.35
0.37
Total operating costs (C1)
*
$2.66
$2.94
$2.75
$2.72
$3.47
OPERATIONS ANALYSIS
Gibraltar
produced 28.2 million pounds of copper for the second quarter, a 13% increase over the first quarter due to higher mill throughput, ore
grade and recoveries. As mining progressed deeper into the
Gibraltar
pit, ore grade and consistency improved which will continue for the remainder
of the year. Mill throughput was 7.2 million tons for the period and was lower than planned due to mill downtime for additional maintenance.
Copper head grades of 0.24% were higher than recent quarters and in line with management expectations as mining proceeds further into higher
grade ore benches in the
Gibraltar
pit. Copper recoveries in the second quarter were 81.9% and improved with the increasing head grades.
A total of 23.4 million tons were mined in the second quarter in line with mine plan. The ore stockpiles increased by 0.7 million tons in the second
quarter and 1.7 million tons of oxide ore from the Connector pit was placed on the heap leach pads. This oxide ore will be processed in future years
when
Gibraltar's
solvent extraction and electrowinning ("SX/EW") plant is restarted.
*Non-GAAP performance measure. See end of news release
OPERATIONS ANALYSIS - CONTINUED
Total site costs* at
Gibraltar
of
$105.4 million
were
$7.4 million
lower than last quarter due to a number of factors including lower diesel fuel costs,
purchased electricity, natural gas, explosives and contractor services.
Sustaining capital expenditures in the quarter were
$20.4 million
and included
$10.4 million
for a major component replacement on one of the
shovels.
Gibraltar
capital expenditures will decrease in the second half of the year as preparatory work for the primary crusher move is completed
and with less equipment component replacements expected.
Molybdenum generated a by-product credit of
US$0.13
per pound of copper produced in the second quarter, which decreased significantly from
the first quarter. The molybdenum price decreased from the first quarter's average price of
US$32.79
per pound to an average of
US$21.30
per
pound. This decreased molybdenum price also resulted in negative provisional price adjustments of
$1.3 million
in the second quarter.
Off-property costs per pound produced* were
US$0
.36 and were in line with recent quarters.
Total operating costs per pound produced (C1)* were
US$2.66
for the second quarter, compared to
US$3.47
in the same period in 2022 with key
variances summarized in the bridge graph below:
Total Operating Costs (C1) (US er pound) (CNW Group/Taseko Mines Limited)
GIBRALTAR
OUTLOOK
The
Gibraltar
pit will continue to be the sole source of mill feed for the remainder of 2023 and head grade and ore quality are expected to be similar
to Q2 for the remainder of the year. Second quarter production was impacted by low mill availabilities in April and May, but in June and July milling
operations benefited from the softer ore in the
Gibraltar
pit and mill throughput averaged well above nameplate capacity of 85,000 tpd. Copper
production in June and July was 11 million pounds in each month. Management continues to expect
Gibraltar
to produce 115 million pounds (+/-
5%) of copper in 2023 on a 100% basis.
*Non-GAAP performance measure. See end of news release
GIBRALTAR
OUTLOOK - CONTINUED
The in-pit crusher is now planned to be relocated in Q2 2024. This deferral of the crusher move results in increased mill production in the current
year, and allows the timing of the crusher move to align with a maintenance shutdown that is required for the Mill #1 SAG mill.
Strong metal prices combined with our copper hedge protection continues to provide stable operating margins at the
Gibraltar
mine. Copper prices
in the second quarter averaged
US$3.84
per pound, compared to the six month year to date average of
US$3.95
and the 2022 average of
US$3.99
per pound. The Company currently has copper price collar contracts in place that secure a minimum copper price of
US$3.75
per pound
for 35 million pounds of copper until
December 31, 2023
.
The Company's copper concentrate transportation was recently impacted by the strike action of port workers in
British Columbia
. The work
stoppages by the port workers has delayed shipment of concentrate to customers. Now that the strike has been resolved, efforts are underway to
move stockpiled concentrate at site to the port using rail and trucking. Given the backlog, concentrate inventory levels at site may not reduce to
normal levels until later this year.
ACQUISITION OF ADDITIONAL 12.5% INTEREST IN
GIBRALTAR
After
March 15, 2023
, the financial results of Taseko reflect its 87.5% beneficial interest in the
Gibraltar
mine.
The Company completed the acquisition of an additional 12.5% interest in the
Gibraltar
mine from Sojitz on
March 15, 2023
.
Gibraltar
is operated
through a joint venture which is owned 75% by Taseko and 25% by Cariboo Copper Corporation ("Cariboo"). Under the terms of the agreement,
Taseko has acquired Sojitz's 50% interest in Cariboo and now holds an effective 87.5% interest in the
Gibraltar
mine. The other 50% of Cariboo is
held equally by Dowa Metals & Mining Co., Ltd. ("Dowa") and Furukawa Co. Ltd. ("Furukawa").
The acquisition price consists of a minimum amount of
$60 million
payable over a five-year period and potential contingent payments depending on
Gibraltar
mine copper revenues and copper prices over the next five years. An initial
$10 million
has been paid to Sojitz on closing and the
remaining minimum amount will be paid in
$10 million
annual instalments over the next five years. There is no interest payable on the minimum
amounts and the amounts payable to Sojitz are secured against shareholder loans owing from Cariboo to Taseko.
The contingent payments are payable annually for five years only if the average LME copper price exceeds
US$3.50
per pound in a year. The
payments will be calculated by multiplying
Gibraltar
mine copper revenues by a price factor, which is based on a sliding scale ranging from 0.38%
at
US$3.50
per pound copper to a maximum of 2.13% at
US$5.00
per pound copper or above. Total contingent payments cannot exceed
$57
million
over the five-year period, limiting the acquisition cost to a maximum of
$117 million
.
Taseko became a party to the existing Cariboo shareholders agreement with Dowa and Furukawa. There was no change to the offtake contracts
established in 2010 and Dowa and Furukawa will continue to receive 30% of
Gibraltar's
copper concentrate offtake. There will be no impact to the
operation of the Gibraltar Joint Venture.
FLORENCE COPPER
The Company is awaiting the issuance of the final Underground Injection Control ("UIC") permit from the U.S. Environmental Protection Agency
("EPA"), which is the final permitting step required prior to construction commencing on the commercial production facility. On
June 12, 2023
, the
EPA issued the Programmatic Agreement ("PA") for signature which is a key step required to finalize the NHPA Section 106 process and precedes
issuance of the final UIC permit.
Detailed engineering and design for the commercial production facility is substantially completed and procurement activities are well advanced. The
Company has purchased the major processing equipment associated with the SX/EW plant and the equipment has now been delivered to the
Florence site. The Company is well positioned to transition into construction once the final UIC permit is received. The Company incurred
$27.4
million
of capital expenditures at the Florence project in the first half of 2023.
In
March 2023
, the Company announced the results of recent technical work and updated economics for the Florence Copper project. The
Company has filed a new technical report entitled "NI 43-101 Technical Report Florence Copper Project,
Pinal County, Arizona
" dated
March 30,
2023
(the "Technical Report") on SEDAR. The Technical Report was prepared in accordance with NI 43-101 and incorporates updated capital and
operating costs for the commercial production facility and refinements made to the operating models, based on the Production Test Facility ("PTF")
results.
The technical work completed by Taseko in recent years has been extensive and has de-risked the project significantly. The PTF operated
successfully over an 18-month period and provided a valuable opportunity to test operational controls and strategies which will be applied in future
commercial operations. In addition, a more sophisticated leaching model has been developed and calibrated to the PTF wellfield performance. This
detailed modeling data, along with updated costing, has been used to update assumptions for the ramp up and operation of the commercial
wellfield and processing facility.
Florence Copper Project Highlights:
Net present value of
US$930 million
(after-tax at an 8% discount rate)
Internal rate of return of 47% (after-tax)
Payback period of 2.6 years
Operating costs (C1) of
US$1.11
per pound of copper
Annual production capacity of 85 million pounds of LME grade A cathode copper
22 year mine life
Total life of mine production of 1.5 billion pounds of copper
Total estimated initial capital cost of
US$232 million
remaining
Long-term copper price of
US$3.75
per pound
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.
LONG-TERM GROWTH STRATEGY - CONTINUED
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 preparing to advance 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 Tŝilhqot'in Nation, as represented by Tŝilhqot'in National Government, and Taseko entered into a confidential dialogue, with the
involvement of the Province of
British Columbia
, in order to obtain a long-term resolution of the conflict regarding Taseko's proposed copper-gold
mine previously known as New Prosperity, acknowledging Taseko's commercial interests and the Tŝilhqot'in Nation's opposition to the project.
This dialogue has been supported by the parties' agreement, beginning
December 2019
, to a series of one-year standstills on certain outstanding
litigation and regulatory matters relating to Taseko's tenures and the area in the vicinity of Teẑtan Biny (Fish Lake). The standstill agreement was
most recently extended for a fourth one-year term in
December 2022
, with the goal of providing time and opportunity for the Tŝilhqot'in Nation and
Taseko to negotiate a final resolution.
The dialogue process has made tangible progress in the past 12 months but is not complete. In agreeing to extend the standstill through 2023, the
Tŝilhqot'in Nation and Taseko acknowledge the constructive nature of discussions to date, and the future opportunity to conclude a long-term and
mutually acceptable resolution of the conflict that also makes an important contribution to the goals of reconciliation in
Canada
.
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 has also initiated lab testwork on flowsheet development to produce niobium oxide from floatation concentrate at Aley to supply the
growing market for niobium-based batteries.
ANNUAL ENVIRONMENT, SOCIAL & GOVERNANCE REPORT
On
May 25, 2023
, the Company published its annual Environment, Social & Governance ("ESG") Report, titled 360
o
of Value. The report focuses
on the 2022 operational and sustainability performance of Taseko's foundational asset, the
Gibraltar
copper mine in
British Columbia
, and reports
on the Company's enterprise-wide ESG impacts and benefits – including environmental initiatives, social contributions, governance programs and
greenhouse gas emissions.
While profitable operations and return on investment are critical drivers for Taseko's success, the Company also delivers value to its employees
and operating communities, business partners, Indigenous Nations and governments. The annual ESG report is an opportunity to showcase the
important benefits that the Company generates through its operations, investments and people:
Well-paid jobs and career opportunities for employees;
Healthy and safe workplaces that welcome a diversity of people and views;
Support for vibrant communities and institutions;
Protection and conservation of important environmental values, such as wildlife, biodiversity, clean air and water;
Meaningful partnerships with Indigenous people;
Financial support for important government services and programs; and
The production of copper and other metals that play such an important role in supporting modern society and enhancing quality of life.
The full report can be viewed and downloaded at
tasekomines.com/esg/overview
.
The Company will host a telephone conference call and live webcast on
Thursday, August 3, 2023
at
11:00 a.m. Eastern Time
(
8:00 a.m.
Pacific)
to discuss these results. After opening remarks by management, there will be a question and answer session open to analysts and investors.
To join the conference call without operator assistance, you may pre-register at
https://emportal.ink/46Kh6Zm
to receive an instant automated call
back just prior to the start of the conference call. Otherwise, the conference call may be accessed by dialing 888-390-0546 toll free, 416-764-8688
in
Canada
, or online at tasekomines.com/investors/events.
The conference call will be archived for later playback until
August 17, 2023
and can be accessed by dialing 888-203-1112 toll free, 416-764-8677
in
Canada
, or online at
tasekomines.com/investors/events
and using the entry code 191584#.
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 (except for Q1 and Q2 2023)
2023
Q2
1
2023
Q1
1
2022
Q4
2022
Q3
2022
Q2
Cost of sales
99,854
86,407
73,112
84,204
90,992
Less:
Depletion and amortization
(15,594)
(12,027)
(10,147)
(13,060)
(15,269)
Net change in inventories of finished goods
3,356
(399)
1,462
2,042
(3,653)
Net change in inventories of ore stockpiles
2,724
5,561
18,050
3,050
(3,463)
Transportation costs
(6,966)
(5,104)
(6,671)
(6,316)
(4,370)
Site operating costs
83,374
74,438
75,806
69,920
64,237
Oxide ore stockpile reclassification from capitalized stripping
(3,183)
3,183
-
-
-
Less by-product credits:
Molybdenum, net of treatment costs
(4,018)
(9,208)
(11,022)
(4,122)
(3,023)
Silver, excluding amortization of deferred revenue
(103)
(160)
263
25
36
Site operating costs, net of by-product credits
76,070
68,253
65,047
65,823
61,250
Total copper produced (thousand pounds)
24,640
19,491
20,020
21,238
15,497
Total costs per pound produced
3.09
3.50
3.25
3.10
3.95
Average exchange rate for the period (CAD/USD)
1.34
1.35
1.36
1.31
1.28
Site operating costs, net of by-product credits
(US$ per pound)
2.30
2.59
2.39
2.37
3.10
Site operating costs, net of by-product credits
76,070
68,253
65,047
65,823
61,250
Add off-property costs:
Treatment and refining costs
4,986
4,142
3,104
3,302
2,948
Transportation costs
6,966
5,104
6,671
6,316
4,370
Total operating costs
88,022
77,499
74,822
75,441
68,568
Total operating costs (C1) (US$ per pound)
2.66
2.94
2.75
2.72
3.47
1
Q1 and Q2 2023 includes the impact from the March 15, 2023 acquisition of Cariboo from Sojitz, which increased the Company's Gibraltar mine ownership from 75% to 87.5%.
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Total Site Costs
Total site costs are comprised of the site operating costs charged to cost of sales as well as mining costs capitalized to property, plant and
equipment in the period. This measure is intended to capture Taseko's share of the total site operating costs incurred in the quarter at the
Gibraltar
mine calculated on a consistent basis for the periods presented.
(Cdn$ in thousands, unless otherwise indicated) –
75% basis (except for Q1 and Q2 2023)
2023
Q2
1
2023
Q1
1
2022
Q4
2022
Q3
2022
Q2
Site operating costs
83,374
74,438
75,806
69,920
64,237
Add:
Capitalized stripping costs
8,832
12,721
3,866
1,121
11,887
Total site costs – Taseko share
92,206
87,159
79,672
71,041
76,124
Total site costs – 100% basis
105,378
112,799
106,230
94,721
101,500
1
Q1 and Q2 2023 includes the impact from the March 15, 2023 acquisition of Cariboo from Sojitz, which increased the Company's Gibraltar mine ownership from 75% to 87.5%.
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 gain/loss;
Unrealized gain/loss on derivatives; and
Finance and other non-recurring costs.
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.
(Cdn$ in thousands, except per share amounts)
2023
Q2
2023
Q1
2022
Q4
2022
Q3
Net income (loss)
9,991
4,439
(2,275)
(23,517)
Unrealized foreign exchange (gain) loss
(10,966)
(950)
(5,279)
28,083
Unrealized (gain) loss on derivatives
(6,470)
2,190
20,137
(72)
Finance and other non-recurring costs
1,714
-
-
-
Estimated tax effect of adjustments
1,355
(591)
(5,437)
19
Adjusted net income (loss)
(4,376)
5,088
7,146
4,513
Adjusted EPS
(0.02)
0.02
0.02
0.02
(Cdn$ in thousands, except per share amounts)
2022
Q2
2022
Q1
2021
Q4
2021
Q3
Net income (loss)
(5,274)
5,095
11,762
22,485
Unrealized foreign exchange (gain) loss
11,621
(4,398)
(1,817)
9,511
Unrealized (gain) loss on derivatives
(30,747)
7,486
4,612
(6,817)
Estimated tax effect of adjustments
8,302
(2,021)
(1,245)
1,841
Adjusted net income (loss)
(16,098)
6,162
13,312
27,020
Adjusted EPS
(0.06)
0.02
0.05
0.10
NON-GAAP PERFORMANCE MEASURES - CONTINUED
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 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;
Amortization of share-based compensation expense; and
Non-recurring other expenses
(Cdn$ in thousands)
2023
Q2
2023
Q1
2022
Q4
2022
Q3
Net income (loss)
9,991
4,439
(2,275)
(23,517)
Add:
Depletion and amortization
15,594
12,027
10,147
13,060
Finance expense
13,468
12,309
10,135
12,481
Finance income
(757)
(921)
(700)
(650)
Income tax expense
678
3,356
1,222
3,500
Unrealized foreign exchange (gain) loss
(10,966)
(950)
(5,279)
28,083
Unrealized (gain) loss on derivatives
(6,470)
2,190
20,137
(72)
Amortization of share-based compensation expense
(recovery)
417
3,609
1,794
1,146
Non-recurring other expenses
263
-
-
-
Adjusted EBITDA
22,218
36,059
35,181
34,031
(Cdn$ in thousands)
2022
Q2
2022
Q1
2021
Q4
2021
Q3
Net income (loss)
(5,274)
5,095
11,762
22,485
Add:
Depletion and amortization
15,269
13,506
16,202
17,011
Finance expense
12,236
12,155
12,072
11,875
Finance income
(282)
(166)
(218)
(201)
Income tax expense
922
1,188
9,300
22,310
Unrealized foreign exchange (gain) loss
11,621
(4,398)
(1,817)
9,511
Unrealized (gain) loss on derivatives
(30,747)
7,486
4,612
(6,817)
Amortization of share-based compensation expense
(2,061)
3,273
1,075
117
Adjusted EBITDA
1,684
38,139
52,988
76,291
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.
Three months ended
June 30,
Six months ended
June 30,
(Cdn$ in thousands)
2023
2022
2023
2022
Earnings (loss) from mining operations
12,070
(8,048)
41,182
21,219
Add:
Depletion and amortization
15,594
15,269
27,621
28,775
Earnings from mining operations before depletion and amortization
27,664
7,221
68,803
49,994
Site operating costs per ton milled
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 Company's site operations on a tons milled basis.
(Cdn$ in thousands, except per ton milled amounts)
2023
Q2
1
2023
Q1
1
2022
Q4
2022
Q3
2022
Q2
Site operating costs (included in cost of
sales) – Taseko share
83,374
74,438
75,806
69,920
64,237
Site operating costs (included in cost of
sales) – 100% basis
95,285
95,838
101,075
93,226
85,650
Tons milled (thousands)
7,234
7,093
7,282
8,229
7,698
Site operating costs per ton milled
$13.17
$13.54
$13.88
$11.33
$11.13
1
Q1 and Q2 2023 includes the impact from the March 15, 2023 acquisition of Cariboo from Sojitz, which increased the Company's Gibraltar mine ownership from 75% to 87.5%.
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.
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SOURCE
Taseko Mines Limited
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For further information:
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; Stuart McDonald, President & CEO
CO: Taseko Mines Limited
CNW 17:04e 02-AUG-23