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.
|
VANCOUVER, Feb. 21, 2018 /CNW/ - Taseko Mines Limited
(TSX: TKO; NYSE American: TGB) ("Taseko" or the "Company") reports
financial results for the fourth quarter and full year ending
December 31, 2017.
Russell Hallbauer, President and
CEO of Taseko, commented, "2017 was an excellent year for Taseko,
demonstrated by the $211 million of
cash flow from operations and $164
million of EBITDA for the year, with $32 million and $22
million, respectively, coming in the fourth quarter. Over
the past three months, copper prices have averaged approximately
US$3.15 per pound, which is 30%
higher than where it was at the beginning of 2017. Additionally,
molybdenum prices are 50% higher today over the same period and are
now over US$12 per pound. Given this
higher metal pricing environment, our financial performance is
expected to continue into 2018, allowing us to invest in and
advance our projects. I cannot stress enough how important it is to
have a long life cash flowing asset, such as Gibraltar, as the foundation upon which to
build a successful company."
Mr. Hallbauer continued, "In addition to our financial successes
in 2017, we achieved a number of important milestones during the
year, on both corporate and operational levels. Our balance sheet
was greatly strengthened after completing a new, long-term debt
financing, Gibraltar had one of
its strongest production years ever and we made significant strides
forward on our Florence Copper
project."
"Our Florence Copper project has
been advancing on-time and on budget. We now have nearly 80% of the
test wellfield completed and construction crews broke ground on the
SX/EW plant in January. Pre-leaching of the deposit and
commissioning of the SX/EW plant are expected to begin in the third
quarter, with first cathode production before the end of 2018. We
will be evaluating the operating data from the wellfield while we
complete permit amendments for the full scale production facility,"
added Mr. Hallbauer.
"2017 was not without its challenges, the most significant being
the major wildfires in the BC Cariboo region this past summer.
During these wildfires, we maintained production with reduced
operations personnel for a lengthy period and also had a complete
shutdown of the mine for several days in July – this had an
immediate impact on mine production but, more importantly, impacted
our mine plan sequencing which has continued to affect production
into the first quarter of 2018. Taking this into account, the first
quarter will be similar to the fourth quarter in terms of grade and
copper production. Looking beyond the first quarter, with higher
stripping rates and transition into the new ore zone completed,
copper grade will increase and we expect the average copper grade
for 2018 to be in line with Gibraltar's life of mine average grade,"
concluded Mr. Hallbauer.
*Non-GAAP performance
measure. See end of news release.
|
2017 Annual Highlights
- Earnings from mining operations before depletion and
amortization* was $177.7 million, a
significant increase over the $54.7
million in 2016 due to higher copper and molybdenum
production, lower costs and stronger metal prices;
- The Company generated cash flows from operations of
$211.1 million, up from $33.9 million in 2016;
- Higher throughput and grades in 2017 resulted in strong copper
and molybdenum production of 141.2 million pounds and 2.6 million
pounds (100% basis), an increase of 6% and 178%, respectively, over
2016;
- Net income for the year was $34.3
million, or $0.15 per share,
and Adjusted net income* was $41.4
million, or $0.18 per
share.
- The cash balance at the end of 2017 was $80.2 million, slightly lower than the end of
2016 as the Company used $72 million
of cash to complete a refinancing and reduce long-term debt in
June 2017;
- Site operating costs* were US$1.09 per pound produced, and Total operating
costs (C1)* were US$1.43 per pound
produced, reductions of 28% and 23%, respectively, over 2016 unit
costs;
- In March the Company completed a US$33
million streaming agreement with Osisko Gold Royalties Ltd.
for Taseko's 75% share of payable silver production from the
Gibraltar Mine;
- In April 2017, the Company
announced that a new long-term agreement was ratified by its
unionized employees at Gibraltar.
The new agreement will be effective through May 31, 2021;
- In June 2017, the Company
completed an offering of US$250
million aggregate principal amount of 8.75% senior secured
notes due 2022. The Company used the net proceeds of the offering
and $72 million of its existing cash
balance to fund the redemption of its US$200
million senior notes due 2019 and to repay its senior
secured credit facility (due March
2019) and the related copper call option;
- In July 2017, Gibraltar's mining and milling operations were
impacted by wildfires in the Cariboo region which limited our
employees' ability to travel to the mine site, due to restrictions
on road access and evacuation orders in the region; and
- In September 2017, the Company
announced that it had received all necessary state and federal
permits to build and operate the Florence Copper Production Test
Facility ("PTF") in Arizona, and
the Company's board of directors had approved the construction of
the PTF at an estimated cost of US$25
million.
Fourth Quarter 2017 Highlights
- Earnings from mining operations before depletion and
amortization* was $32.7 million,
compared to $46.6 million in the
fourth quarter of 2016;
- Cash flow from operations was $31.9
million, a decrease from the same period in 2016 due to
lower production and sales volumes;
- Copper and molybdenum production in the fourth quarter was 25.5
million pounds and 0.5 million pounds, respectively, a decrease
from previous quarters as a result of the anticipated lower grade
mine feed combined with the increased use of lower grade ore
stockpiles, a consequence of the summer wildfires;
- The increased use of stockpiled ore resulted in a non-cash
inventory expense and additional depletion and amortization which
reduced earnings from mining operations by $10.6 million in the fourth quarter of 2017;
- Site operating costs, net of by-product credits* were
US$1.69 per pound produced and Total
operating costs (C1)* were US$2.11
per pound produced. Spending in the quarter remained at a similar
level as previous quarter but unit costs were impacted by the lower
grades and production; and
- Total sales (100% basis) for the quarter were 32.0 million
pounds of copper and 0.6 million pounds of molybdenum.
*Non-GAAP performance
measure. See end of news release.
|
HIGHLIGHTS
Financial
Data
|
|
Year ended
December 31,
|
Three Months
Ended
December 31,
|
(Cdn$ in thousands,
except for per share amounts)
|
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
Revenues
|
|
378,299
|
263,865
|
114,434
|
95,408
|
94,628
|
780
|
Earnings from mining
operations before depletion and amortization*
|
|
177,716
|
54,715
|
123,001
|
32,696
|
46,617
|
(13,921)
|
Earnings (loss) from
mining operations
|
|
129,994
|
1,776
|
128,218
|
18,135
|
37,393
|
(19,258)
|
Net income
(loss)
|
|
34,262
|
(31,396)
|
65,658
|
(7,600)
|
5,113
|
(12,713)
|
|
Per share - basic
("EPS")
|
|
0.15
|
(0.14)
|
0.29
|
(0.03)
|
0.02
|
(0.05)
|
Adjusted net income
(loss)*
|
|
41,420
|
(31,860)
|
73,280
|
(1,544)
|
16,404
|
(17,948)
|
|
Per share - basic
("adjusted EPS")*
|
|
0.18
|
(0.14)
|
0.32
|
(0.01)
|
0.07
|
(0.08)
|
EBITDA*
|
|
163,757
|
39,520
|
124,237
|
22,350
|
32,312
|
(9,962)
|
Adjusted
EBITDA*
|
|
161,749
|
41,628
|
120,121
|
28,639
|
44,477
|
(15,838)
|
Cash flows provided
by operations
|
|
211,079
|
33,853
|
177,226
|
31,899
|
49,663
|
(17,764)
|
|
|
|
|
|
|
|
|
Operating Data
(Gibraltar - 100% basis)
|
|
Year ended
December 31,
|
Three Months
Ended
December 31,
|
|
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
Tons mined
(millions)
|
|
93.1
|
87.6
|
5.5
|
26.9
|
18.5
|
8.4
|
Tons milled
(millions)
|
|
29.8
|
29.5
|
0.3
|
7.9
|
7.3
|
0.6
|
Production (million
pounds Cu)
|
|
141.2
|
133.3
|
7.9
|
25.5
|
40.7
|
(15.2)
|
Sales (million pounds
Cu)
|
|
143.7
|
131.1
|
12.6
|
32.0
|
40.4
|
(8.4)
|
*Non-GAAP performance
measure. See end of news release.
|
REVIEW OF OPERATIONS
Gibraltar mine (75%
Owned)
|
|
|
|
|
|
|
|
Operating Data
(100% basis)
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
Q1
2017
|
Q4
2016
|
YE
2017
|
YE
2016
|
Tons mined
(millions)
|
26.9
|
23.3
|
21.1
|
21.8
|
18.5
|
93.1
|
87.6
|
Tons milled
(millions)
|
7.9
|
7.2
|
7.5
|
7.3
|
7.3
|
29.8
|
29.5
|
Strip
ratio
|
4.9
|
4.1
|
2.8
|
2.4
|
1.1
|
3.4
|
1.5
|
Site operating cost
per ton milled (CAD$) **
|
$7.68
|
$5.93
|
$7.67
|
$8.59
|
$9.13
|
$7.48
|
$9.47
|
Copper
concentrate
|
|
|
|
|
|
|
|
|
Grade (%)
|
0.209
|
0.284
|
0.309
|
0.328
|
0.319
|
0.281
|
0.264
|
|
Recovery
(%)
|
77.5
|
86.1
|
85.2
|
85.9
|
87.0
|
84.1
|
85.5
|
|
Production (million
pounds Cu)
|
25.5
|
35.1
|
39.4
|
41.3
|
40.7
|
141.2
|
133.2
|
|
Sales (million pounds
Cu)
|
32.0
|
30.2
|
40.7
|
40.8
|
40.4
|
143.7
|
131.1
|
|
Inventory (million
pounds Cu)
|
2.7
|
9.3
|
4.6
|
5.9
|
5.6
|
2.7
|
5.6
|
Molybdenum
concentrate
|
|
|
|
|
|
|
|
|
Production (thousand
pounds Mo)
|
537
|
445
|
789
|
866
|
764
|
2,637
|
949
|
|
Sales (thousand
pounds Mo)
|
589
|
403
|
794
|
859
|
798
|
2,645
|
903
|
Per unit data (US$
per pound)*
|
|
|
|
|
|
|
|
|
Site operating
costs*
|
$1.86
|
$0.97
|
$1.08
|
$1.15
|
$1.23
|
$1.22
|
$1.58
|
|
By-product
credits*
|
(0.17)
|
(0.09)
|
(0.11)
|
(0.15)
|
(0.11)
|
(0.13)
|
(0.06)
|
Site operating, net
of by-product credits*
|
$1.69
|
$0.88
|
$0.97
|
$1.00
|
$1.12
|
$1.09
|
$1.52
|
Off-property
costs
|
0.42
|
0.30
|
0.34
|
0.33
|
0.36
|
0.34
|
0.33
|
Total operating costs
(C1)*
|
$2.11
|
$1.18
|
$1.31
|
$1.33
|
$1.48
|
$1.43
|
$1.85
|
*Non-GAAP performance
measure. See end of news release.
|
OPERATIONS ANALYSIS
Full-year results
Gibraltar's copper production
in 2017 was 141.2 million pounds, a 6% increase over 2016 due to
higher average head grades and increased mill throughput.
Mining and milling operations in July and August were impacted by
wildfires in the Cariboo region which limited our employees'
ability to travel to the mine site, resulting in reduced mine and
mill production for periods of time as well as a complete mine
shutdown for several days.
A total of 93.1 million tons were mined in the year at a strip
ratio of 3.4 to 1. Waste stripping costs of $69.0 million (75% basis) were capitalized in
2017, an increase over the $9.2
million capitalized in 2016, as a new pushback in the
Granite pit was initiated in the current year. Approximately 8.5
million tons of ore were drawn from ore stockpiles during the
year.
Site operating costs per pound* for the year were US$1.22 per pound of copper produced, a 23%
reduction from 2016, primarily due to the higher copper production
and increased capitalization of stripping costs in
2017.
Molybdenum production for 2017 was approximately 2.6 million
pounds, resulting in by-product credits per pound produced* of US
$0.13, an increase from US$0.06 in the prior year.
Off property costs per pound produced* were US$0.34 per pound of copper produced, consistent
with US$0.33 per pound produced in
2016. Long-term contracts for treatment and refining costs and
ocean freight were completed in 2016.
Total operating costs (C1)* decreased to US$1.43 per pound for the year, compared to
US$1.85 per pound in 2016.
Fourth quarter results
Fourth quarter copper production at Gibraltar was 25.5 million pounds, lower than
the previous quarters in 2017 as a result of reduced head
grades. Although a reduction in head grade was expected in
the mine plan, head grade was further affected by reduced waste
stripping in the third quarter as a result of the summer wildfires
in the Cariboo region whereby more mill feed came from the
stockpile than planned. Copper head grade at Gibraltar was 0.209% in the fourth
quarter. The low head grades and some oxidation from
stockpile also impacted copper recoveries which averaged 78% for
the period.
A total of 26.9 million tons were mined during the quarter at a
strip ratio of 4.9 to 1. Waste stripping costs of $17.5 million (75% basis) were capitalized in the
quarter related to the new pushback in the Granite pit.
Approximately 4.3 million tons of ore were drawn from the ore
stockpile in the fourth quarter.
Site operating cost per ton milled* was $7.68 in the fourth quarter of 2017, which is
higher than the third quarter primarily due to the decreased
capitalization of stripping costs.
Site operating costs per pound produced* increased to
US$1.86 in the fourth quarter of 2017
from US$0.97 in the third quarter of
2017. The increase is due to the lower copper production and lower
capitalized stripping costs during the fourth quarter. A total of
0.6 million pounds of molybdenum were sold resulting in by-product
credits per pound produced* of US$0.17 in the fourth quarter.
Off-property costs per pound produced* were US$0.42 for the fourth quarter of 2017 compared
to the prior quarter off-property costs of US$0.30. The increase is due to the higher sales
volumes, as treatment and refining and ocean freight costs are
recognized at the time of sale.
Total operating costs (C1) per pound* increased to US$2.11, a 79% increase from the third quarter of
2017.
*Non-GAAP performance
measure. See end of news release.
|
Health and Safety Milestones
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.
Gibraltar's 2017 loss time
frequency was 0.59 per one million man hours worked, below the
British Columbia mining industry
average of 1.06.
In February 2017, the Province of
British Columbia Ministry of Energy and Mines awarded Gibraltar with the 2016 John Ash award at the
55th Annual Mine Safety Awards held in Victoria, BC, for the third year in a
row. This prestigious award goes to the mining operation in
British Columbia that has worked
at least one million hours during the year with the lowest
injury-frequency rate.
As site activities ramp up at the Florence PTF we are pleased to
report that there were no lost time accidents in 2017.
GIBRALTAR
OUTLOOK
During the summer wildfires, the Gibraltar Mine maintained
production with reduced operations personnel for a lengthy period
and also had a complete shutdown for several days in July. This had
an immediate impact on mine production but, more importantly,
impacted mine plan sequencing which has continued to affect copper
production into the first quarter of 2018. Taking this into
account, head grades and copper production in the first quarter of
2018 will be similar to the fourth quarter of 2017. Looking beyond
the first quarter, with the higher stripping rates and the
transition into the new ore zone completed, copper grade will
increase and we expect the average copper grade for 2018 to be in
line with Gibraltar's life of mine
average grade.
Copper markets have shown continued strength in early 2018 with
prices rising to US$3.19 per pound as
of February 20, 2018. Molybdenum
prices have also continued to strengthen in the first quarter of
2018, increasing to US$12.33 per
pound as of February 20, 2018, which
is 40% higher than the average molybdenum price in the fourth
quarter of 2017. The Company continues to review engineering plans
for a potential mill expansion at Gibraltar.
The Company is pursuing an insurance claim related to the
Cariboo region wildfires in July 2017. The amount of the
claim cannot be determined at this time, but could be in the range
of $3 to $10
million.
REVIEW OF PROJECTS
Taseko's strategy has been to grow the Company by leveraging
cash flow from the Gibraltar Mine to assemble and develop a
pipeline of projects. We continue to believe this will generate the
best, long-term returns for shareholders. Our development projects
are located in British Columbia
and Arizona and represent a
diverse range of metals, including gold, copper, molybdenum and
niobium. Our project focus is currently on the development of the
Florence Copper Project where we incurred expenditures of
$15.2 million in 2017 (2016 -
$5.0 million). We also spent
$1.7 million on the Aley Niobium
project in 2017 (2016 - $0.8 million)
and $1.7 million on the New
Prosperity project (2016 - $1.7
million). Taseko will continue to take a prudent
approach to spending on development projects.
Florence Copper Project
In January 2017, the Company
announced that completed technical work on the Florence property
has resulted in a significant improvement in project economics. The
NI 43-101 technical report documenting these results was filed on
www.sedar.com on February 28,
2017.
Florence Copper Technical Report Highlights:
- Pre-tax net present value of US$920
million at a 7.5% discount rate;
- Post-tax net present value of US$680
million* at a 7.5% discount rate;
- Pre-tax internal rate of return of 44% with a 2.3 year
payback;
- Operating costs of US$1.10 per
pound LME grade cathode copper;
- Total life of mine production in excess of 1.7 billion pounds
of copper;
- Average annual production of 81 million pounds of copper for
the life of mine;
- 21 year mine life;
- Total pre-production capital cost of US$200 million; and
- Long-term copper price of US$3.00
per pound.
*The Company expects
that the reduced US corporate income tax rates, announced in
December 2017, will have a significant positive impact on the
project's post-tax net present value.
|
In September 2017, the Company
announced that it has now received all necessary state and federal
permits to build and operate the Production Test Facility ("PTF")
and is moving forward with construction of the PTF at an estimated
cost of US$25 million. PTF
construction expenditures in the fourth quarter of 2017 were
$5.3 million.
The PTF will include a well field comprised of thirteen
commercial scale production wells, numerous monitoring, observation
and point of compliance wells, and an integrated SX/EW plant. The
PTF is expected to be operational in the latter half of
2018.
Aley Niobium Project
In 2014, the Company filed an NI43-101 technical report for the
Aley Niobium Project. Further engineering and metallurgical
testwork has been completed since then which is expected to result
in improved project economics. Environmental monitoring
on the project continues and a number of product marketing
initiatives are underway.
The Company will host
a telephone conference call and live webcast on Thursday, February
22, 2018 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. The conference call may be accessed by dialing (877)
303-9079 in Canada and the United States, or (970) 315-0461
internationally.
The conference call will be archived for later playback until March
1, 2018 and can be accessed by dialing (855) 859-2056 in Canada and
the United States, or (404) 537-3406 internationally and using the
passcode 1099316.
|
Russell Hallbauer
President and CEO
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. Site operating costs is calculated
by removing net changes in inventory and depletion and amortization
and transportation costs from cost of sales. Site operating costs,
net of by-product credits is calculated by removing 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.
|
|
|
|
|
|
Three months
ended
December 31,
|
Year ended
December 31,
|
(Cdn$ in thousands,
unless otherwise indicated) – 75% basis
|
|
2017
|
2016
|
2017
|
2016
|
Cost of
sales
|
|
77,273
|
57,235
|
248,305
|
262,089
|
Less:
|
|
|
|
|
|
|
Depletion and
amortization
|
|
(14,561)
|
(9,224)
|
(47,722)
|
(52,939)
|
|
Net change in
inventories of finished goods
|
|
(5,392)
|
(3,679)
|
302
|
272
|
|
Net change in
inventories of ore stockpiles
|
|
(8,006)
|
11,261
|
(14,266)
|
16,466
|
|
Transportation
costs
|
|
(4,074)
|
(5,358)
|
(19,281)
|
(16,507)
|
Site operating
costs
|
|
45,240
|
50,235
|
167,338
|
209,381
|
Less by-product
credits:
|
|
|
|
|
|
|
Molybdenum, net of
treatment costs
|
|
(4,016)
|
(3,689)
|
(16,883)
|
(4,400)
|
|
Silver, excluding
amortization of deferred revenue
|
|
(173)
|
(1,018)
|
(810)
|
(3,988)
|
Site operating costs,
net of by-product credits
|
|
41,051
|
45,528
|
149,645
|
200,993
|
Total copper produced
(thousand pounds)
|
|
19,094
|
30,512
|
105,874
|
99,938
|
Total costs per pound
produced
|
|
2.15
|
1.49
|
1.41
|
2.01
|
Average exchange rate
for the period (CAD/USD)
|
|
1.27
|
1.33
|
1.30
|
1.32
|
Site operating
costs, net of by-product credits (US$ per
pound)
|
|
1.69
|
1.12
|
1.09
|
1.52
|
Site operating costs,
net of by-product credits
|
|
41,051
|
45,528
|
149,645
|
200,993
|
Add off-property
costs:
|
|
|
|
|
|
|
Treatment and
refining costs of copper concentrate
|
|
6,172
|
9,454
|
28,072
|
27,924
|
|
Transportation
costs
|
|
4,074
|
5,358
|
19,281
|
16,507
|
Total operating
costs
|
|
51,297
|
60,340
|
196,998
|
245,424
|
Total operating
costs (C1) (US$ per pound)
|
|
2.11
|
1.48
|
1.43
|
1.85
|
Adjusted net income (loss)
Adjusted net income (loss) remove the effect of the following
transactions from net income as reported under IFRS:
- Unrealized foreign currency gains/losses;
- Write-down of mine equipment;
- Write-down of investment;
- Unrealized gain/loss on copper put options;
- Loss on settlement of long-term debt;
- Gain/loss on copper call option; and
- Non-recurring transactions, including related tax
adjustments.
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.
|
|
|
|
|
|
Three months
ended
December 31,
|
Year ended
December 31,
|
($ in thousands,
except per share amounts)
|
|
2017
|
2016
|
2017
|
2016
|
Net income
(loss)
|
|
(7,600)
|
5,113
|
34,262
|
(31,396)
|
|
Unrealized foreign
exchange (gain) loss
|
|
1,541
|
8,802
|
(17,684)
|
(7,785)
|
|
Write-down of mine
equipment
|
|
-
|
-
|
3,551
|
-
|
|
Write-down of
investment
|
|
3,850
|
-
|
3,850
|
-
|
|
Unrealized loss on
copper put options
|
|
898
|
477
|
1,970
|
1,044
|
|
Loss on settlement of
long-term debt
|
|
-
|
-
|
13,102
|
-
|
|
Loss on copper call
option
|
|
-
|
2,886
|
6,305
|
3,360
|
|
Other non-recurring
expenses*
|
|
-
|
-
|
-
|
5,489
|
|
Estimated tax effect
of adjustments
|
|
(233)
|
(874)
|
(3,936)
|
(2,572)
|
Adjusted net
income (loss)
|
|
(1,544)
|
16,404
|
41,420
|
(31,860)
|
Adjusted
EPS
|
|
(0.01)
|
0.07
|
0.18
|
(0.14)
|
* Other non-recurring
expenses includes legal and other advisory costs associated with
the special shareholder meeting, the proxy contest and related
litigation, and other non-recurring financing costs.
|
EBITDA and adjusted EBITDA
EBITDA represents net earnings before interest, income taxes,
and depreciation. EBITDA is presented because it is an important
supplemental measure of our performance and is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in the industry, many of which present
EBITDA when reporting their results. Issuers of "high yield"
securities also present EBITDA because investors, analysts and
rating agencies consider it useful in measuring the ability of
those issuers to meet debt service obligations. The Company
believes EBITDA is an appropriate supplemental measure of debt
service capacity, because cash expenditures on interest are, by
definition, available to pay interest, and tax expense is inversely
correlated to interest expense because tax expense goes down as
deductible interest expense goes up; depreciation is a non-cash
charge.
Adjusted EBITDA is presented as a further supplemental measure
of the Company's performance and ability to service debt. Adjusted
EBITDA is prepared by adjusting EBITDA to eliminate the impact of a
number of items that are not considered indicative of ongoing
operating performance.
Adjusted EBITDA is calculated by adding to EBITDA certain items
of expense and deducting from EBITDA certain items of income that
are not likely to recur or are not indicative of the Company's
future operating performance consisting of:
- Unrealized foreign exchange gains/losses;
- Write-down of mine equipment;
- Write-down of investment;
- Unrealized gain/loss on copper put options;
- Gain/loss on copper call option; and
- Non-recurring transactions.
While some of the adjustments are recurring, other non-recurring
expenses do not reflect the underlying performance of the Company's
core mining business and are not necessarily indicative of future
results. Furthermore, unrealized gains/losses on derivative
instruments, and unrealized foreign currency translation
gains/losses are not necessarily reflective of the underlying
operating results for the reporting periods presented.
|
|
|
|
|
|
Three months
ended
December 31,
|
Year ended
December 31,
|
($ in
thousands)
|
|
2017
|
2016
|
2017
|
2016
|
Net income
(loss)
|
|
(7,600)
|
5,113
|
34,262
|
(31,396)
|
Add:
|
|
|
|
|
|
|
Depletion and
amortization
|
|
14,561
|
9,225
|
47,722
|
53,024
|
|
Share-based
compensation expense
|
|
1,321
|
1,382
|
7,100
|
3,682
|
|
Finance
expense
|
|
8,692
|
8,028
|
46,430
|
30,007
|
|
Finance (income)
loss
|
|
269
|
(297)
|
(935)
|
(1,084)
|
|
Income tax (recovery)
expense
|
|
5,107
|
8,861
|
29,178
|
(14,713)
|
EBITDA
|
|
22,350
|
32,312
|
163,757
|
39,520
|
Adjustments:
|
|
|
|
|
|
|
Unrealized foreign
exchange (gain) loss
|
|
1,541
|
8,802
|
(17,684)
|
(7,785)
|
|
Write-down of mine
equipment
|
|
-
|
-
|
3,551
|
-
|
|
Write-down of
investment
|
|
3,850
|
-
|
3,850
|
-
|
|
Unrealized loss on
copper put option
|
|
898
|
477
|
1,970
|
1,044
|
|
Loss on copper call
option
|
|
-
|
2,886
|
6,305
|
3,360
|
|
Other non-recurring
expenses*
|
|
-
|
-
|
-
|
5,489
|
Adjusted
EBITDA
|
|
28,639
|
44,477
|
161,749
|
41,628
|
* Other non-recurring
expenses includes legal and other advisory costs associated with
the special shareholder meeting, the proxy contest and related
litigation, and other non-recurring financing costs.
|
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
December 31,
|
Year ended
December 31,
|
(Cdn$ in
thousands)
|
|
2017
|
2016
|
2017
|
2016
|
Earnings from
mining operations
|
|
18,135
|
37,393
|
129,994
|
1,776
|
Add:
|
|
|
|
|
|
|
Depletion and
amortization
|
|
14,561
|
9,224
|
47,722
|
52,939
|
Earnings from
mining operations before depletion
|
|
|
|
|
|
and
amortization
|
|
32,696
|
46,617
|
177,716
|
54,715
|
Site operating costs per ton milled
|
|
|
|
|
|
Three months
ended
December 31,
|
Year ended
December 31,
|
(Cdn$ in thousands,
except per ton milled amounts)
|
|
2017
|
2016
|
2017
|
2016
|
Site operating
costs (included in cost of sales)
|
|
45,240
|
50,235
|
167,338
|
209,381
|
|
|
|
|
|
|
Tons milled
(thousands) (75% basis)
|
|
5,887
|
5,504
|
22,367
|
22,115
|
Site operating
costs per ton milled
|
|
$7.68
|
$9.13
|
$7.48
|
$9.47
|
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This document contains "forward-looking statements" that were
based on Taseko's expectations, estimates and projections as of the
dates as of which those statements were made. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "outlook", "anticipate",
"project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the Company's
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking statements. These included but are not limited
to:
- uncertainties and costs related to the Company's exploration
and development activities, such as those associated with
continuity of mineralization or determining whether mineral
resources or reserves exist on a property;
- uncertainties related to the accuracy of our estimates of
mineral reserves, mineral resources, production rates and timing of
production, future production and future cash and total costs of
production and milling;
- uncertainties related to feasibility studies that provide
estimates of expected or anticipated costs, expenditures and
economic returns from a mining project;
- uncertainties related to our ability to complete the mill
upgrade on time estimated and at the scheduled cost;
- uncertainties related to the ability to obtain necessary
licenses permits for development projects and project delays due to
third party opposition;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our exploration and development
activities and mining operations, particularly laws, regulations
and policies;
- changes in general economic conditions, the financial markets
and in the demand and market price for copper, gold and other
minerals and commodities, such as diesel fuel, steel, concrete,
electricity and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to the
value of the U.S. dollar and Canadian dollar, and the continued
availability of capital and financing;
- the effects of forward selling instruments to protect against
fluctuations in copper prices and exchange rate movements and the
risks of counterparty defaults, and mark to market risk;
- the risk of inadequate insurance or inability to obtain
insurance to cover mining risks;
- the risk of loss of key employees; the risk of changes in
accounting policies and methods we use to report our financial
condition, including uncertainties associated with critical
accounting assumptions and estimates;
- environmental issues and liabilities associated with mining
including processing and stock piling ore; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we
operate mines, or environmental hazards, industrial accidents or
other events or occurrences, including third party interference
that interrupt the production of minerals in our mines.
For further information on Taseko, investors should review the
Company's annual Form 40-F filing with the United States Securities
and Exchange Commission www.sec.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.
SOURCE Taseko Mines Limited