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, sales volumes and inventory stated in this release are on
a 100% basis unless otherwise indicated.
|
VANCOUVER, Nov. 6, 2019 /CNW/ - Taseko Mines Limited (TSX:
TKO; NYSE American: TGB) ("Taseko" or the "Company") reports
earnings from mining operations before depletion and amortization*
of $12.3 million and adjusted EBITDA*
of $7.9 million for the three months
ended September 30, 2019.
The third quarter copper production at Gibraltar of 33 million pounds was on plan,
with grades, mill throughput and recoveries all in line with
management expectations. We expect to achieve the original
2019 guidance of 130 million pounds (+/-5%) of copper, and 2020
should be a similar production year. An updated mineral
reserve estimate for Gibraltar has
been completed (details included below), and a new NI 43-101
technical report was filed on SEDAR today.
Russell Hallbauer, CEO and
Director of Taseko, commented, "The Gibraltar Mine continues to be
a cornerstone asset for our Company. We're pursuing and
evaluating a number of improvements, with a focus on opportunities
to increase mill throughput and recoveries, as well as mining
related enhancements. Mining and milling technology is
constantly evolving which provides opportunities for a steady-state
mine, like Gibraltar, to
improve."
"We continued to make great strides forward at our Florence
Copper Project this quarter and copper production at the project
test facility continues to increase. We're gaining valuable
operating experience which will benefit us with the commercial
facility development and we continue to maintain compliance with
all environmental guidelines. Florence Copper has the
potential to transform Taseko's production profile in the coming
years, and dramatically reduce our consolidated unit costs. We
recently announced our intention to list Taseko on the London Stock
Exchange ("LSE") Main Market, and as part of the listing process we
engaged an independent engineering firm, Roscoe Postle Associates
Inc. ("RPA"), to prepare a Competent Persons Report ("CPR") on the
Florence Copper Project. The CPR confirms a project with a
production capacity of 85 million pounds of copper over a 20 year
mine life, with an after-tax NPV (at 8%) of US$670 million and an IRR of 40%. RPA's
findings represent a strong independent third party endorsement for
the project and the previous technical work we have completed,"
concluded Stuart McDonald, President
of Taseko.
*Non-GAAP performance measure. See end of news
release.
Third Quarter Review
- Third quarter earnings from mining operations before depletion
and amortization* were $12.3 million,
and Adjusted EBITDA was $7.9
million;
- Cash flow from operations was $15.2
million, a 37% increase over the second quarter of
2019;
- The Company's cash balance at September
30, 2019 was $42.0 million,
unchanged from the prior quarter;
- Copper production in the third quarter was steady at 33.0
million pounds and copper sales were 33.5 million pounds (100%
basis);
- Molybdenum production was 620 thousand pounds in line with
plan; molybdenum prices averaged US$11.83 per pound during the quarter;
- Site operating costs, net of by-product credits* were
US$1.72 per pound produced,
comparable to the second quarter of 2019 of US$1.71 per pound;
- Net loss was $24.5 million
($0.10 per share) and adjusted net
loss* was $20.6 million ($0.08 per share);
- The Florence Copper project continues to advance its production
test facility operation with the focus turning 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
orebody. During the quarter, Florence delivered its first
shipment of LME grade A copper cathode; and
- Finished goods inventory at September
30, 2019 at Gibraltar (100%
basis) includes 5 million pounds of copper and 129 thousand pounds
of molybdenum with a sales value for Taseko's share of
approximately $12.0 million.
Competent Person Reports for LSE Listing
As a requirement of the LSE listing process, the Company engaged
Roscoe Postle Associates Inc. ("RPA") to prepare an independent
Competent Persons Report ("CPR") for the Gibraltar Mine and the
Florence Copper Project. The Gibraltar Mine CPR confirmed the
Company's mineral reserve estimate in its 43-101 Technical Report
dated November 6, 2019, and contains
no other significant findings.
The Florence Copper Project CPR contains a number of estimates
which are different than the estimates in the 2017 Florence
Technical Report dated January 16,
2017 (the "2017 Technical Report"), and the key differences
are summarized as follows:
- The mineral reserve estimate in the CPR is the same as the 2017
Technical Report, however, RPA lowered the estimate of total copper
recovery to 65% (compared to 70% in the 2017 Technical Report),
based on a more conservative interpretation of previous
metallurgical test work.
- The CPR assumes accelerated wellfield development to maintain
annual copper production capacity of 85 million pounds over a mine
life of 21 years.
- RPA reviewed the initial start-up results of the Florence
Production Test Facility in mid-2019 but opined the results were
too preliminary in nature to make firm judgements at that
time. Accordingly, the CPR does not reflect any updates to
reflect these test facility operations.
- Capital and operating cost estimates were escalated to June
2019 US dollar basis using a
combination of cost indexes and updated reagent, power and labour
costs. Initial capital costs in the CPR increased to
US$227 million from US$204 million in the 2017 Technical
Report. Cash requirements for reclamation bonding reduced to
US$9 million from US$ 22 million in the 2017 Technical
Report. Operating costs increased to US$1.13/lb of copper produced, from US$ 1.10/lb in the 2017 Technical
Report.
- An economic analysis was completed by RPA using the mine plan
included in the 2017 Technical Report and their updated capital and
operating cost estimates. RPA also incorporated current federal US
tax law changes resulting from the 'Tax Cuts and Jobs Act' (TCJA)
signed into law on December 22,
2017. Using a copper price of US$3.10/lb and an 8% discount rate results in an
after-tax NPV of US$667 million
(versus US$680 million in the 2017
Technical Report). The Project has an after-tax Internal Rate
of Return (IRR) of 40.2% and payback period of 2.3 years from start
of commercial operations (versus 37% and 2.5 years in the 2017
Technical Report).
- The CPR includes a resource estimate prepared in accordance
with NI 43-101 utilizing CIM definitions. The resource estimate
includes 296 million tons of Indicated resources grading 0.35% Cu,
that were reclassified from the Measured resource category in the
2017 Technical Report, based on RPA's assessment that there was not
sufficient density information in their opinion to support
categorization as Measured resources. The total measured and
indicated resource estimate is the same as in the 2017 Technical
Report.
*Non-GAAP performance measure. See end of news
release.
The updates to the resource estimate and project economics
contained in the CPR are not considered by the Company to
constitute a material change either in its assessment of the
Florence Copper Project or in relation to the Company as a
whole. Accordingly, the 2017 Technical Report remains current
and an updated 43-101 technical report on the Florence Copper
Project will not be filed.
The CPR reports for Gibraltar Mine and Florence Copper Project
will be included in the LSE Prospectus, and will be filed on SEDAR
at the time of the LSE listing, which is expected to be completed
before the end of 2019.
Gibraltar Mineral Reserve Estimate
The Company has filed an updated mineral reserve estimate and NI
43-101 Technical Report entitled "Technical Report on the Mineral
Reserve Update at the Gibraltar Mine" dated November 6, 2019 on SEDAR.com. Gibraltar's updated proven and probable
reserves as of December 31, 2018 are
as follows:
|
Summary of Mineral
Reserves – December 31, 2018
Taseko Mines –
Gibraltar Mine
|
Ore
Type
|
Category
|
Tonnage
(Mst)
|
Cu
Grade
(%)
|
Mo
Grade
(%)
|
Sulphide: 0.15% Cu
Cut-off Grade
|
|
Proven
|
469
|
0.26
|
0.008
|
|
Probable
|
121
|
0.23
|
0.008
|
|
Ore
Stockpiles
|
3
|
0.19
|
0.008
|
|
Total
|
594
|
0.25
|
0.008
|
Oxide: 0.10% ASCu
Cut-off Grade
|
|
Proven
|
1
|
0.16
|
|
|
Probable
|
16
|
0.15
|
|
|
Total
|
17
|
0.15
|
|
Notes:
|
1.
|
CIM (2014)
definitions were followed for Mineral Reserves.
|
2.
|
Mineral Reserves are
presented on a 100% basis.
|
3.
|
Mineral Reserves are
estimated using a copper price of US$2.75/lb, a molybdenum price of
US$8.00/lb, and an exchange rate of US$1.00: C$1.25.
|
4.
|
Mineral Reserves for
sulphide ore are estimated at a cut-off grade of 0.15% Cu with a
maximum 50% ASCu content constraint. Mineral Reserves for oxide ore
are estimated at a cut-off grade of 0.10% ASCu.
|
5.
|
Mineral Reserves are
estimated as mined and delivered to the processing
facilities.
|
6.
|
Numbers may not add
due to rounding.
|
The mineral reserves stated above are contained within the
measured and indicated mineral resources below:
Summary of Mineral
Resources – December 31, 2018
Taseko Mines –
Gibraltar Mine
|
Category
|
Tonnage
(Mst)
|
Cu
Grade
(%)
|
Mo
Grade
(%)
|
Measured
|
806
|
0.25
|
0.008
|
Indicated
|
303
|
0.23
|
0.007
|
Total Measured +
Indicated
|
1,109
|
0.25
|
0.007
|
Inferred
|
59
|
0.21
|
0.004
|
Notes:
|
1.
|
CIM (2014)
definitions were followed for Mineral Resources.
|
2.
|
Mineral Resources are
presented on a 100% basis.
|
3.
|
Sulphide Mineral
Resources are estimated at a cut-off grade of 0.15% Cu.
|
4.
|
Oxide Mineral
Resources are estimated at a cut-off grade of 0.10%
ASCu.
|
5.
|
Mineral Resources are
estimated using a long-term copper price of US$3.25/lb, a
molybdenum price of US$12.00/lb, and an exchange rate of US$1.00:
C$1.25.
|
6.
|
Tonnage factors are
12 ft3/st for in situ material and 15 ft3/st for fill.
|
7.
|
Mineral Resources are
inclusive of Mineral Reserves.
|
8.
|
Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability.
|
9.
|
Numbers may not add
due to rounding.
|
The resource and reserve estimation was completed by Taseko
staff under the supervision of Richard
Weymark, P.Eng., MBA, Chief Engineer and a Qualified Person
under National Instrument 43-101. Mr. Weymark has reviewed
this release.
HIGHLIGHTS
Financial
Data
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
(Cdn$ in thousands,
except for per share amounts)
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Revenues
|
82,436
|
74,297
|
8,139
|
239,231
|
232,749
|
6,482
|
Earnings from mining
operations before depletion
and
amortization*
|
12,317
|
33,742
|
(21,425)
|
46,692
|
83,553
|
(36,861)
|
Earnings (loss) from
mining operations
|
(15,737)
|
13,568
|
(29,305)
|
(31,684)
|
30,644
|
(62,328)
|
Net income
(loss)
|
(24,508)
|
7,098
|
(31,606)
|
(43,451)
|
(16,054)
|
(27,397)
|
Per share - basic
("EPS")
|
(0.10)
|
0.03
|
(0.13)
|
(0.18)
|
(0.07)
|
(0.09)
|
Adjusted net income
(loss)*
|
(20,561)
|
1,464
|
(22,025)
|
(52,451)
|
(7,198)
|
(45,253)
|
Per share - basic
("adjusted EPS")*
|
(0.08)
|
0.01
|
(0.09)
|
(0.22)
|
(0.03)
|
(0.19)
|
Adjusted
EBITDA*
|
7,906
|
31,940
|
(24,844)
|
32,811
|
71,728
|
(38,917)
|
Cash flows provided
by operations
|
15,150
|
18,053
|
(2,903)
|
33,414
|
49,958
|
(16,544)
|
Operating Data
(Gibraltar - 100% basis)
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Tons mined
(millions)
|
24.7
|
29.0
|
(4.3)
|
74.7
|
83.1
|
(8.4)
|
Tons milled
(millions)
|
7.5
|
8.0
|
(0.5)
|
22.1
|
22.9
|
(0.8)
|
Production (million
pounds Cu)
|
33.0
|
43.0
|
10.0
|
92.5
|
99.4
|
(6.9)
|
Sales (million pounds
Cu)
|
33.5
|
30.2
|
3.3
|
89.1
|
83.8
|
5.3
|
*Non-GAAP performance measure. See end of news
release.
REVIEW OF OPERATIONS
Gibraltar Mine (75% Owned)
Operating data
(100% basis)
|
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
Q4
2018
|
Q3
2018
|
Tons mined
(millions)
|
|
24.7
|
26.6
|
23.3
|
28.4
|
29.0
|
Tons milled
(millions)
|
|
7.5
|
7.7
|
6.8
|
7.1
|
8.0
|
Strip
ratio
|
|
3.0
|
2.3
|
3.2
|
5.1
|
1.7
|
Site operating cost
per ton milled (CAD$)*
|
|
$10.83
|
$11.51
|
$10.88
|
$9.16
|
$10.60
|
Copper
concentrate
|
|
|
|
|
|
|
Head grade
(%)
|
|
0.249
|
0.256
|
0.216
|
0.222
|
0.314
|
Copper recovery
(%)
|
|
87.7
|
87.7
|
84.6
|
81.3
|
85.9
|
Production (million
pounds Cu)
|
|
33.0
|
34.7
|
24.9
|
25.8
|
43.0
|
Sales (million pounds
Cu)
|
|
33.5
|
32.3
|
23.3
|
42.7
|
28.8
|
Inventory (million
pounds Cu)
|
|
5.0
|
5.5
|
3.1
|
1.6
|
18.5
|
Molybdenum
concentrate
|
|
|
|
|
|
|
Production (thousand
pounds Mo)
|
|
620
|
653
|
738
|
727
|
690
|
Sales (thousand pounds
Mo)
|
|
518
|
708
|
770
|
738
|
709
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
|
Site operating
costs*
|
|
$1.88
|
$1.92
|
$2.23
|
$1.92
|
$1.50
|
By-product
credits*
|
|
(0.16)
|
(0.21)
|
(0.32)
|
(0.30)
|
(0.16)
|
Site operating costs,
net of by-product credits*
|
|
$1.72
|
$1.71
|
$1.91
|
$1.62
|
$1.34
|
Off-property
costs
|
|
0.33
|
0.30
|
0.30
|
0.49
|
0.24
|
Total operating costs
(C1)*
|
|
$2.05
|
$2.01
|
$2.21
|
$2.11
|
$1.58
|
OPERATIONS ANALYSIS
Third Quarter Operating Results
Copper production in the third quarter was 33.0 million
pounds. Copper grade for the quarter averaged 0.249%, which
was in line with management expectations, the mine plan, and the
life of mine average grade. Copper recovery in the mill was 87.7%
during the quarter which was consistent with Q2 and improved over
the prior year. Production was also affected by slightly
lower mill throughput during the quarter.
A total of 24.7 million tons were mined during the period, a
decrease of 1.9 million tons over the previous quarter and the ore
stockpile was drawn down by 1.4 million tons. The strip ratio
for the third quarter was 3.0 to 1.
Capitalized stripping costs totaled $8.6
million (75% basis) compared to $2.0
million in the prior quarter due to advancement into the
Pollyanna pit and associated waste stripping. These factors
contributed to the decrease in site operating cost per ton milled*,
which was $10.83 for the quarter, 6%
lower than the prior quarter.
*Non-GAAP performance measure. See end of news
release.
OPERATIONS ANALYSIS - CONTINUED
Total site spending (including capitalized stripping costs) was
generally in line with the previous quarter.
Molybdenum production was 620 thousand pounds in the third
quarter. Molybdenum prices held steady and averaged
US$11.83 per pound over the
quarter. By-product credits per pound of copper produced*
decreased to US$0.16 in the third
quarter from US$0.21 in the previous
quarter as a result of the lower molybdenum sales.
Off-property costs per pound produced* were US$0.33 for the third quarter of 2019.
Off-property costs consist of concentrate treatment, refining and
transportation costs, and these costs are in line with recent
quarters relative to copper sold.
GIBRALTAR
OUTLOOK
Gibraltar is expected to
produce approximately 130 million pounds (+/-5%) on a 100% basis in
2019, comparable to the production level achieved in 2018.
The fundamentals for copper remain strong and most industry
analysts are projecting a growing deficit and higher copper prices
in the coming years. Expansion of overseas copper smelting
capacity and tighter supply conditions has recently resulted in
notably lower concentrate treatment and refining charges ("TCRC").
The Company recently completed a spot copper concentrate contract
at an attractive rate significantly below the 2019 benchmark.
On November 6, 2019, the Company
will publish an updated 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, and the Mineral Resource potential exists to
further extend the mine life.
PROJECT UPDATE
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 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 current focus is on the development of
the Florence Copper Project.
Florence Copper
The Production Test Facility ("PTF") continued to operate as
planned in the quarter. On October 21,
2019, the Company provided an operational update
highlighting that steady state operation has been achieved, with
focus turning 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 orebody. Sweep efficiencies in
the wellfield continue to outperform management expectations. The
Florence Copper technical team is using physical and operating
control mechanisms to adjust solution chemistry and flow rates and
is successfully increasing copper concentration in solution. The
main recovery well is now producing copper in solution at an
annualized rate of approximately 600,000 pounds per year, and the
expectation is for steady improvement as the well matures.
*Non-GAAP performance measure. See end of news
release.
PROJECT UPDATE - CONTINUED
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
amended for the full-scale commercial operation, which is expected
to produce up to 85 million pounds of annual copper cathode
capacity for 19 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 to the ADEQ. The UIC permit
application was submitted to the EPA in the first week of
August. Operating permits for the commercial scale wellfield
are expected to be received in the summer of 2020. The Company is
planning to continue to operate the PTF until the end of 2020.
The Company has continued to advance various project financing
options from debt providers, royalty companies, and potential
joint venture partners. 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 expenditures at the Florence Project for the nine months
ending September 30, 2019 were
$10.8 million including the PTF
operation and other project development costs.
Yellowhead Copper
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. The project feasibility study dated July 31, 2014, proposed a 70,000 tonne per day
concentrator with total pre-production capital costs of
approximately $1 billion and an
average operating cost of US$1.46 per
pound of copper. Using US$3.00
per pound of copper, a Canadian/US dollar exchange rate of 0.80, an
8% discount rate and other assumptions from the 2014 feasibility
study results in a pre-tax net present value of $1.1 billion.
Since the acquisition, Taseko has restarted the environmental
review process for the Yellowhead Copper Project, and the Company's
technical team has commenced an engineering redesign of the project
to enhance economics with the objective of issuing a new 43-101
technical report in due course.
Aley Niobium
Environmental monitoring and product marketing initiatives on
the project continue. A drill program was completed in 2018 to
collect samples for further metallurgical testing. A pilot plant
scale program commenced in the second quarter on the currently
bench scale proven niobium flotation and converter processes. The
pilot plant will also provide final product samples for marketing
purposes. Aley project expenditures for the nine months ended
September 30, 2019 were $0.5 million.
INTENTION TO LIST ON THE LONDON STOCK EXCHANGE
On October 22, 2019, the Company
announced its intention to seek a listing of the Company's common
shares on the London Stock Exchange ("LSE") Main Market. Subject to
the required regulatory approvals from the Financial Conduct
Authority and the LSE, including publication of a Prospectus.
Admission to the LSE is expected to occur before the end of 2019.
The Company is not intending to raise capital in conjunction with
the LSE admission.
The Company will host
a telephone conference call and live webcast on Thursday, November
7, 2019 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) 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 November 21, 2019 and can be accessed by dialing (888)
390-0541 within North America or, (416) 764-8677 internationally
and using the passcode 842594#.
|
Russell Hallbauer
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 and insurance recoverable. Site
operating costs is 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 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
September
30,
|
Nine months
ended
September
30,
|
(Cdn$ in thousands,
unless otherwise indicated) – 75% basis
|
2019
|
2018
|
2019
|
2018
|
Cost of
sales
|
98,173
|
60,729
|
270,915
|
202,105
|
Less:
|
|
|
|
|
Depletion and
amortization
|
(28,054)
|
(20,174)
|
(78,376)
|
(52,909)
|
Net change in
inventories of finished goods
|
(1,272)
|
17,439
|
6,763
|
17,593
|
Net change in
inventories of ore stockpiles
|
(2,690)
|
6,716
|
(3,103)
|
7,827
|
Transportation
costs
|
(4,889)
|
(5,149)
|
(12,807)
|
(12,507)
|
Insurance
recoverable
|
-
|
3,875
|
-
|
7,875
|
Site operating
costs
|
61,268
|
63,436
|
183,392
|
169,984
|
Less by-product
credits:
|
|
|
|
|
Molybdenum, net of
treatment costs
|
(4,957)
|
(6,937)
|
(20,020)
|
(15,776)
|
Silver, excluding
amortization of deferred revenue
|
(308)
|
42
|
(588)
|
(209)
|
Site operating costs,
net of by-product credits
|
56,003
|
56,541
|
162,784
|
153,999
|
Total copper produced
(thousand pounds)
|
24,720
|
32,251
|
69,381
|
74,516
|
Total costs per pound
produced
|
2.27
|
1.75
|
2.35
|
2.07
|
Average exchange rate
for the period (CAD/USD)
|
1.32
|
1.31
|
1.33
|
1.29
|
Site operating
costs, net of by-product credits (US$ per
pound)
|
1.72
|
1.34
|
1.77
|
1.61
|
Site operating costs,
net of by-product credits
|
56,003
|
56,541
|
162,784
|
153,999
|
Add off-property
costs:
|
|
|
|
|
Treatment and refining
costs
|
5,792
|
4,725
|
15,898
|
14,617
|
Transportation
costs
|
4,889
|
5,149
|
12,807
|
12,507
|
Total operating
costs
|
66,684
|
66,415
|
191,489
|
181,123
|
Total operating
costs (C1) (US$ per pound)
|
2.05
|
1.58
|
2.08
|
1.89
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
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; and
- Unrealized gain/loss on copper put options.
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
September
30,
|
Nine months
ended
September
30,
|
($ in thousands,
except per share amounts)
|
2019
|
2018
|
2019
|
2018
|
Net income
(loss)
|
(24,508)
|
7,098
|
(43,451)
|
(16,054)
|
Unrealized foreign
exchange (gain) loss
|
3,569
|
(5,244)
|
(9,378)
|
10,817
|
Unrealized (gain) loss
on copper put options
|
518
|
(534)
|
518
|
(2,686)
|
Estimated tax effect
of adjustments
|
(140)
|
144
|
(140)
|
725
|
Adjusted net
income (loss)
|
(20,561)
|
1,464
|
(52,451)
|
(7,198)
|
Adjusted
EPS
|
(0.08)
|
0.01
|
(0.22)
|
(0.03)
|
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 also 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 copper put options; and
- Share-based compensation.
NON-GAAP PERFORMANCE MEASURES - CONTINUED
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
($ in
thousands)
|
2019
|
2018
|
2019
|
2018
|
Net income
(loss)
|
(24,508)
|
7,098
|
(43,451)
|
(16,054)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
28,054
|
20,174
|
78,376
|
52,909
|
Finance
expense
|
10,425
|
9,829
|
30,215
|
28,873
|
Finance
income
|
(482)
|
(296)
|
(1,089)
|
(940)
|
Income tax expense
(recovery)
|
(9,853)
|
1,299
|
(24,794)
|
(197)
|
Unrealized foreign
exchange (gain) loss
|
3,569
|
(5,244)
|
(9,378)
|
(10,817)
|
Unrealized (gain) loss
on copper put options
|
518
|
(534)
|
518
|
(2,686)
|
Amortization of
share-based compensation expense (recovery)
|
183
|
(386)
|
2,414
|
(994)
|
Adjusted
EBITDA
|
7,906
|
31,940
|
32,811
|
71,728
|
Earnings (loss) from mining operations before depletion and
amortization
Earnings (loss) 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
September 30,
|
Nine
months ended
September 30,
|
(Cdn$ in
thousands)
|
2019
|
2018
|
2019
|
2018
|
Earnings (loss)
from mining operations
|
(15,737)
|
13,568
|
(31,684)
|
30,644
|
Add:
|
|
|
|
|
Depletion and
amortization
|
28,054
|
20,174
|
78,376
|
52,909
|
Earnings from
mining operations before depletion and
amortization
|
12,317
|
33,742
|
46,692
|
83,553
|
Site operating costs per ton milled
|
Three
months ended
September 30,
|
Nine months
ended
September 30,
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2019
|
2018
|
2019
|
2018
|
Site operating
costs (included in cost of sales)
|
61,268
|
63,436
|
183,392
|
169,984
|
|
|
|
|
|
Tons milled
(thousands) (75% basis)
|
5,660
|
5,983
|
16,550
|
17,208
|
Site operating
costs per ton milled
|
$10.83
|
$10.60
|
$11.08
|
$9.88
|
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.
View original
content:http://www.prnewswire.com/news-releases/taseko-announces-financial-and-operational-results-for-the-third-quarter-2019-300953314.html
SOURCE Taseko Mines Limited