VANCOUVER, Jan. 16, 2020 /PRNewswire/ - Taseko Mines
Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) ("Taseko" or the
"Company") is pleased to announce that recently updated technical
work on the Yellowhead Copper Project in Central British Columbia has resulted in a 22%
increase in recoverable copper reserves and significantly improved
project economics. The Company has filed a new technical report
("Technical Report on the Mineral Reserve Update at the Yellowhead
Copper Project" dated January 16,
2020) (the "Technical Report") on SEDAR. The Technical
Report was prepared in accordance with NI 43-101 and encompasses a
new development plan and updated study on the Yellowhead Copper
Project.
Russell Hallbauer, Chief
Executive Officer, of Taseko, commented, "In 2018, after our Senior
Management and Engineering teams recognized the significant
inherent value in the Yellowhead orebody that had not been
identified in Yellowhead Mining Inc.'s 2014 Feasibility Study, a
decision was made to acquire the company. In early 2019,
Taseko completed this transaction for approximately C$13 million in Taseko stock."
"The project had over C$70 million
spent by previous owners on ore reserve definition, environmental
work, as well as the 2014 Feasibility Study, and the acquisition
was immediately accretive to Taseko. We began re-engineering
the project in early 2019 and now have completely reworked the
development concept," Mr. Hallbauer continued. "Today, we are
announcing a project with a pre-tax NPV of C$1.3 billion (at consensus metal price
assumptions), a C$500 million
increase over the 2014 Feasibility Study. The optimizations
and modifications we have made are not only beneficial to the
economics of the project but will also improve it from an
environmental assessment process standpoint. The leverage this mine
has to metal prices is huge, and with only a 10% increase in these
assumptions, the pre-tax NPV climbs to C$2
billion."
"Based on the new project development plan, our acquisition cost
equates to roughly one third of a penny per pound of copper in
reserves, or 0.01x NAV. By comparison, acquisitions of other
feasibility stage projects in the past have been as high as 1.0x
NAV. Given this project's large ore reserves of 820 million tonnes,
its geographic location near a major transportation and
infrastructure corridor and its compelling copper/gold/silver
exposure, this is one of the best acquisitions in the sector,"
added Mr. Hallbauer.
"With an average copper equivalent grade of 0.35% combined with
a very low onsite operating cost of C$10 per tonne milled the mine site operating
margin is a robust C$16 per tonne, or
roughly C$500 million per year for
the first five years, at US$3.10 per
pound copper. The 440,000 ounces of gold and 19 million ounces of
silver, alone, will generate over C$1
billion of by-product revenues over the mine's life.
Yellowhead has the potential to be one of the largest open pit
copper mines in North America and
would significantly increase Taseko's annual cash flow," stated Mr.
Hallbauer.
Mr. Hallbauer continued, "Taseko has been searching for this
opportunity for the last decade. Our expertise is with large
tonnage mining operations as demonstrated by our success at
Gibraltar. In addition to our operating track record, we have
proven our ability to build mines on time and on budget, which
seems to be largely absent in mining companies around the world
today. We believe the estimated capital cost of C$1.3 billion, or US$12,000 per tonne of mill throughput capacity,
is half the development costs of copper projects in other parts of
the world."
"While our primary and near-term focus will remain on the
advancement of our Florence Copper Project through to production,
we will continue to progress Yellowhead expeditiously as the timing
will fit in ideally after Florence
Copper achieves commercial production. With the new
Technical Report now complete, our efforts will focus on
environmental assessment work, ongoing engagement with local
communities, additional engineering as well as evaluating the
merits of selling an interest in the project to a joint venture
partner. Our plan is to add 85 million pounds of annual copper
production from Florence Copper by
2022 and then another 200 million pounds from Yellowhead by 2025.
A 280% production growth profile over six years to nearly 390
million pounds annually cannot be matched by any company in our
sector and could be well timed with a growing copper supply
deficit," concluded Mr. Hallbauer.
Yellowhead Project
Highlights:
|
First 5
Years
|
LOM
|
|
|
|
|
0.32%
|
0.28%
|
- Average Copper Equivalent Grade
|
0.35% CuEq
|
0.29% CuEq
|
- Average Annual Copper Production
|
200 million
lbs
|
180 million
lbs
|
- Average Annual Pre-tax Cashflow
|
C$330
million
|
C$270
million
|
- Average cost per pound copper*
|
US$1.43/lb
|
US$1.67/lb
|
|
- Pre-tax net present value of C$1.3
billion at an 8% discount rate
|
- Pre-tax internal rate of return of 18% with a
4.2 year payback
|
- 817 million tonne Proven and Probable Mineral
Reserve grading 0.29% copper equivalent
|
- Cost per tonne milled of C$9.97 (mining,
milling & site G&A)
|
|
- Total life of mine production in excess of
4.4 billion pounds of copper, 440,000 ounces of gold and 19 million
ounces of silver
|
- Total pre-production capital cost of C$1.3
billion
|
- Long-term copper price of US$3.10 per pound
and foreign exchange rate of US$0.80:C$1.00
|
Some differences from the original 2014 Feasibility Study to the
new Technical Report include: a 100 million tonne increase to
reserves, an increase in the copper cut-off grade to 0.17%,
throughput increase to 90,000 tonnes per day, relocated primary
crusher to a 90 meter lower elevation, and an improved water
management plan which reduces stored water by 90%."
Note: The study was prepared using long term metal prices of
US$3.10/lb copper, US$1,350/oz gold and US$18 silver and an exchange rate of US$0.80:C$1.00.
*Net of byproduct credits
Mineral Reserves and Resources
Reserves
Category (at a
0.17% cut-off)
|
Tonnes
(millions)
|
Cu
(%)
|
Au
(g/tonne)
|
Ag
(g/tonne)
|
Cu Eq.
(%)*
|
Proven
|
458
|
0.29
|
0.031
|
1.3
|
0.31
|
Probable
|
359
|
0.26
|
0.028
|
1.2
|
0.28
|
Total
|
817
|
0.28
|
0.030
|
1.3
|
0.29
|
Note: Proven and
Probable reserves are derived from Measured and Indicated
resources, respectively, that are contained within the final
ultimate design and are above the stated copper cut-off grade as of
December 31, 2019. Mineral Reserves have been estimated in
accordance with NI 43-101 and 2014 CIM Definition Standards.
Mineral reserves were estimated using long term metal prices of
US$2.40/lb Cu, US$1,000/oz Au and US$13.50/oz Ag at a foreign
exchange rate of US$0.80 per C$1.00 and a 0.17% cut off grade.
Totals may not sum due to rounding
|
Resources
Category (at a
0.15% cut-off)
|
Tonnes
(millions)
|
Cu
(%)
|
Au
(g/tonne)
|
Ag
(g/tonne)
|
Cu Eq.
(%)*
|
Measured
|
561
|
0.27
|
0.029
|
1.2
|
0.29
|
Indicated
|
730
|
0.24
|
0.027
|
1.2
|
0.26
|
M&I
|
1,292
|
0.25
|
0.028
|
1.2
|
0.27
|
Inferred
|
109
|
0.21
|
0.024
|
1.2
|
0.23
|
Note: Mineral
Resource estimate with an effective date of December 31, 2019.
Mineral Resources have been estimated in accordance with NI 43-101
and 2014 CIM Definition Standards. Mineral Resources are not
Mineral Reserves and do not have demonstrated economic viability.
Mineral resources were estimated using long term metal prices of
US$3.25/lb Cu, US$1,300/oz Au and US$17.00/oz Ag at a foreign
exchange rate of US$0.80 per C$1.00 and a 0.15% cut off grade.
Mineral Resources are inclusive of Mineral Reserves. Totals may not
sum due to rounding
|
|
*Copper Equivalent is
based on 90% copper recovery, US$3.10/lb copper price, 56% gold
recovery, US$1350/oz gold, 59% silver recovery, and US$18.00/oz
silver price
|
Qualified Persons and 43-101 Disclosure
This technical content of this news release has been reviewed
and approved by Richard Weymark,
P.Eng., MBA, Chief Engineer of Taseko. The Technical Report was
prepared for Taseko Mines Limited, a producing issuer, under the
supervision of Richard Weymark,
P.Eng., MBA, Chief Engineer of Taseko. Yellowhead Mining Inc. is a
wholly owned subsidiary of Taseko. Mr. Weymark is a Qualified
Person under the provisions of National Instrument 43-101 published
by the Canadian Securities Administrators. Yellowhead is a
greenfield project and while federal and provincial regulatory
agencies have been engaged, the project is not yet in the formal
environmental assessment or permitting processes.
The resource and reserve estimation was completed by Taseko
staff and contributing consultants under the supervision of
Richard Weymark, P. Eng., MBA. Chief
Engineer, Taseko and a Qualified Person under National Instrument
43-101.
Additional information regarding data verification procedures,
known legal, political, environmental or other risks that could
affect development of the Yellowhead project or its mineral
resources or reserves, can be found in the Technical Report, which
is available on SEDAR.
Russell Hallbauer
Chief Executive Officer and Director
No regulatory authority has approved or disapproved of the
information contained in this news release.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This document contains "forward-looking statements" within the
meaning of applicable Canadian securities legislation and the
United States Private Securities Litigation Reform Act of 1995
(collectively, "forward looking statements") that were based on
Taseko's expectations, estimates and projections as of the dates as
of which those statements were made. Any statements that express,
or involve discussions as to, expectations, believes, plans,
objectives, assumptions or future events or performance that are
not historical facts, are forward-looking statements.
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 include 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 the ability to obtain necessary title,
licenses and permits for development projects and project delays
due to third party opposition;
- our ability to comply with the extensive governmental
regulation to which our business is subject;
- 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;
- 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,
equipment failure or other events or occurrences, including third
party interference that interrupt the production of minerals in our
mines;
- the availability of, and uncertainties relating to the
development of, infrastructure necessary for the development of our
projects;
- our reliance upon key personnel; and
- uncertainties relating to increased competition and conditions
in the mining capital markets.
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, including the "Risk
Factors" included in our Annual Information Form.
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SOURCE Taseko Mines Limited