Total Operating Costs (C1)* (US$ per pound) - Q3 2024
| 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.sedarplus.com. Except where otherwise noted, all currency amounts are stated in Canadian dollars. In March 2024 Taseko acquired the remaining 12.5% interest and now owns 100% of the Gibraltar Mine, 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. | |
Gibraltar produced 27 million pounds of copper and 421 thousand pounds of molybdenum in the third quarter. Copper grades were 0.23%, consistent with the prior quarter. Tons milled increased over the second quarter, however mill availability and throughput was lower than planned due to unscheduled downtime and the completion of the crusher move project and concurrent maintenance in concentrator #1 in July. Copper recoveries increased modestly to 79%. Molybdenum production was boosted by a 33% increase in grades, related to ore from the new Connector pit. Total operating costs (C1)* for the quarter were US$2.92 per pound of copper produced.
Stuart McDonald, President and CEO of Taseko, commented, "The development of the new Connector pit advanced on plan in the third quarter, with the new pit providing approximately half of the mill feed in the period. Due to the lower than planned mill availability in the third quarter, we do not expect to recover the production that was lost during the labour strike in June. Looking ahead to 2025, we expect increased mill throughput and improved ore quality as we move deeper into the Connector pit. Copper production next year is expected to increase to the 120 to 130 million pound range, and molybdenum production is also expected to increase. Lower-grade ore stockpiles will be used to supplement mined ore in the first half of the year, so production will be weighted to the second half of the year.”
Mr. McDonald continued, "Construction at Florence Copper has continued to progress on schedule. We are now in peak construction with nearly 300 contractors working at site. The SX/EW plant activities have shifted from earth works and concrete foundation pouring to now erecting structural steel and installation of processing equipment and electrical services. Development of the wellfield is advancing with four drill rigs now operating and 40 wells completed at the end of October. Development of the wellfield, which is a critical path item, remains on schedule to be completed in the second quarter of next year.”
"We expect Florence Copper to become North America's lowest GHG-intensity primary copper producer, and we're optimistic that the project will qualify for the U.S. Department of Energy's ("DOE”) Qualifying Advanced Energy Project Credit (48C) Program, which we applied for recently. We expect to hear whether our application was successful in January. Our balance sheet remains in a strong position, with $209 million of cash on hand and total liquidity of approximately $317 million at the end of September,” added Mr. McDonald.
"This is a very exciting time for Taseko as we begin to unlock the value of our growth assets. The Florence Copper project continues to be de-risked and is now just a year away from producing first copper. We're also preparing to take a big step forward with our Yellowhead copper project, which will be entering the environmental assessment process in the coming months. We also plan on issuing an updated feasibility study for the project next year, which will reinforce the significant value of what could be British Columbia's next major copper mine,” concluded Mr. McDonald.
Third Quarter Review
- Earnings from mining operations before depletion, amortization and non-recurring items* was $54.5 million and Adjusted EBITDA* was $47.7 million;
- Third quarter cash flow from operations was $65.0 million, and included $26.3 million for proceeds received on the insurance claim recorded in the prior quarter;
- Net loss was $0.2 million ($Nil per share) for the quarter and Adjusted net income* was $8.2 million ($0.03 per share);
- Gibraltar produced 27.1 million pounds of copper in the quarter. Average copper head grades were 0.23% and copper recoveries were 79% for the quarter;
- Although 7.6 million tons of ore was milled in the quarter, mill throughput was impacted by nearly three weeks of downtime in Concentrator #1 at the beginning of the quarter for the completion of the crusher relocation project, concurrent mill maintenance, and the ramp back up to full capacity;
- Gibraltar sold 26.3 million pounds of copper in the quarter at an average realized copper price of US$4.23 per pound;
- Total operating costs (C1)* for the quarter were US$2.92 per pound produced. Lower off-property costs are mainly due to favorably lower treatment and refining ("TCRC”) rates realized during the quarter as new offtake agreements begin to take effect;
- Construction of the Florence Copper commercial production facility continues to advance on schedule. A total of 34 production wells out of a total of 90 new wells had been completed as of September 30. Earthworks and site preparation for the plant area and commercial wellfield is estimated to be 75% complete and installation of structural steel, tanks, and process equipment is underway;
- An application has been made to the U.S. Department of Energy's Qualifying Advanced Energy Project Credit (48C) Program for a tax credit of up to US$110 million, based on Florence Copper's eligibility as a critical materials project. The Company expects to hear if it has been awarded the tax credit in mid-January 2025;
- On November 6, the Company entered into an amendment for its revolving credit facility, extending the maturity date to November 2027 from July 2026, and increasing the facility amount to US$110 million from US$80 million. No amounts are drawn against the revolving credit facility;
- The Company issued 7.8 million shares under its At-the-Market ("ATM”) equity offering in the quarter and received net proceeds of $23.1 million. Subsequently, the Company issued an additional 4.3 million shares under the ATM and received net proceeds of $14.2 million; and
- The Company had a cash balance of $209 million as at September 30, 2024.
| Operating Data (Gibraltar - 100% basis) | Three months ended September 30, | Nine months ended September 30, | ||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | |||
| Tons mined (millions) | 23.2 | 16.5 | 6.7 | 64.4 | 64.0 | 0.4 | ||
| Tons milled (millions) | 7.6 | 8.0 | (0.4 | ) | 21.0 | 22.4 | (1.4 | ) |
| Production (million pounds Cu) | 27.1 | 35.4 | (8.3 | ) | 77.0 | 88.5 | (11.5 | ) |
| Sales (million pounds Cu) | 26.3 | 32.1 | (5.8 | ) | 80.6 | 84.8 | (4.2 | ) |
| Financial Data | Three months ended September 30, | Nine months ended September 30, | |||||||
| (Cdn$ in thousands, except for per share amounts) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||
| Revenues | 155,617 | 143,835 | 11,782 | 440,294 | 371,278 | 69,016 | |||
| Cash flows provided by operations | 65,038 | 26,989 | 38,049 | 159,323 | 88,257 | 71,066 | |||
| Net (loss) income (GAAP) | (180 | ) | 871 | (1,051 | ) | 7,763 | 44,650 | (36,887 | ) |
| Per share - basic ("EPS”) | - | - | - | 0.03 | 0.15 | (0.12 | ) | ||
| Earnings from mining operations before
depletion, amortization and non-recurring items* | 54,516 | 65,445 | (10,929 | ) | 184,241 | 134,248 | 49,993 | ||
| Adjusted EBITDA* | 47,689 | 62,695 | (15,006 | ) | 168,389 | 120,972 | 47,417 | ||
| Adjusted net income* | 8,228 | 19,659 | (11,431 | ) | 46,459 | 20,372 | 26,087 | ||
| Per share - basic ("adjusted EPS”)* | 0.03 | 0.07 | (0.04 | ) | 0.16 | 0.07 | 0.09 | ||
The Company finalized the accounting for the acquisition of its initial 50% interest in Cariboo from Sojitz and the related 12.5% interest in Gibraltar in the fourth quarter of 2023. In accordance with the accounting standards for business combinations, the comparable financial statements as of September 30, 2023 and for the three and nine months then ended have been revised to reflect the changes in finalizing the consideration paid and the allocation of the purchase price to the assets and liabilities acquired.
Review of Operations
Gibraltar mine
| Operating data (100% basis) | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | ||||||||||
| Tons mined (millions) | 23.2 | 18.4 | 22.8 | 24.1 | 16.5 | ||||||||||
| Tons milled (millions) | 7.6 | 5.7 | 7.7 | 7.6 | 8.0 | ||||||||||
| Strip ratio | 1.2 | 1.6 | 1.7 | 1.5 | 0.4 | ||||||||||
| Site operating cost per ton milled (Cdn$)* | $14.23 | $13.93 | $11.73 | $9.72 | $12.39 | ||||||||||
| Copper concentrate | |||||||||||||||
| Head grade (%) | 0.23 | 0.23 | 0.24 | 0.27 | 0.26 | ||||||||||
| Copper recovery (%) | 78.9 | 77.7 | 79.0 | 82.2 | 85.0 | ||||||||||
| Production (million pounds Cu) | 27.1 | 20.2 | 29.7 | 34.2 | 35.4 | ||||||||||
| Sales (million pounds Cu) | 26.3 | 22.6 | 31.7 | 35.9 | 32.1 | ||||||||||
| Inventory (million pounds Cu) | 2.9 | 2.3 | 4.9 | 6.9 | 8.8 | ||||||||||
| Molybdenum concentrate | |||||||||||||||
| Production (thousand pounds Mo) | 421 | 185 | 247 | 369 | 369 | ||||||||||
| Sales (thousand pounds Mo) | 348 | 221 | 258 | 364 | 370 | ||||||||||
| Per unit data (US$ per pound produced)* | |||||||||||||||
| Site operating costs* | $2.91 | $2.88 | $2.21 | $1.59 | $2.10 | ||||||||||
| By-product credits* | (0.25 | ) | (0.26 | ) | (0.17 | ) | (0.13 | ) | (0.23 | ) | |||||
| Site operating costs, net of by-product credits* | $2.66 | $2.62 | $2.04 | $1.46 | $1.87 | ||||||||||
| Off-property costs | 0.26 | 0.37 | 0.42 | 0.45 | 0.33 | ||||||||||
| Total operating costs (C1)* | $2.92 | $2.99 | $2.46 | $1.91 | $2.20 | ||||||||||
Third Quarter Review
Gibraltar produced 27 million pounds of copper in the quarter. Copper production and mill throughput were impacted by nearly three weeks of downtime in Concentrator #1 at the beginning of the quarter to complete the crusher relocation project, concurrent mill maintenance, and the ramp back up to full capacity.
Copper head grades were 0.23% and more Connector pit ore was fed to the mill. Copper recoveries in the third quarter were 79%, in line with recent quarters, but lower than normal, as the upper benches of the Connector pit contain transition ore with higher oxide content. As mining progresses deeper in the Connector pit, recoveries are expected to improve as oxide content reduces.
A total of 23.2 million tons were mined in the third quarter, and the majority of ore and waste mining occurred in the Connector pit during the period. A total of 1.7 million tons of oxide ore from the upper benches of the Connector pit were also added to the heap leach pads in the period for future copper cathode production from Gibraltar's currently idled SX/EW plant.
Total site costs* at Gibraltar of $111.3 million (which includes capitalized stripping of $3.6 million) was higher compared to the previous quarter due to the Gibraltar mine being on care and maintenance during the labour strike
in June. Total site costs* were generally in line with the fourth quarter of 2023 and first quarter of 2024. Higher repairs and maintenance costs were incurred in the quarter due to a large maintenance project on one of the shovels.
During the three months ended September 30, 2024, the Company incurred costs of $4.1 million in relation to the final phase of the in-pit crusher relocation project for Concentrator #1 including demolition of the old station's concrete foundation. Under IFRS, these costs are expensed in the quarter through the statement of income (loss).
Molybdenum production was 421 thousand pounds in the third quarter. The 128% increase in quarter-over-quarter production is primarily due to higher molybdenum grade in the Connector pit ore. At an average molybdenum price of US$21.77 per pound, molybdenum generated a by-product credit per pound of copper produced of US$0.25 in the third quarter.
Off-property costs per pound produced* were US$0.26 for the third quarter, which is lower than recent quarters and reflects lower average TCRC rates realized on third quarter shipments, some of which were tendered earlier in the year at negative rates.
Total operating costs per pound produced (C1)* was US$2.92 for the quarter, compared to US$2.20 in the prior year quarter as shown in the bridge graph below with the difference substantially attributed to the lower copper production in the quarter:
https://www.globenewswire.com/NewsRoom/AttachmentNg/0d7f5203-7171-4c0b-a812-df2577edc1cf
Gibraltar Outlook
The major project and related mill maintenance work was completed in the third quarter, and lower than planned mill availability and throughput impacted copper production in the period. As a result, management does not expect to recover the copper production that was lost during the 18-day strike in June and copper production for the year is now expected to be in the range of 105 to 110 million pounds, compared to the original guidance of 115 million pounds. Increased mill availability and higher throughput is expected to be the primary driver of improved copper production in the fourth quarter.
Mining activities have mostly transitioned to the Connector pit, which will be the main source of mill feed in the fourth quarter and going forward. Mining of the current phase of the Gibraltar pit is expected to be finished in the first quarter of 2025. Additional oxide ore from the Connector pit will also be added to the heap leach pads this year. Refurbishment of Gibraltar's SX/EW plant, which has been idle since 2015, has begun a