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, BC, Aug. 5, 2020 /PRNewswire/ - Taseko Mines
Limited (TSX: TKO) (NYSE American: TGB) (LSE: TKO) ("Taseko" or the
"Company") reports earnings from mining operations before depletion
and amortization* of $50.3 million,
Adjusted EBITDA* of $50.9 million and
Net income of $18.7 million, or
$0.08 per share, in the second
quarter of 2020.
Russell Hallbauer, CEO and
Director, commented, "In March, in response to a lower copper
pricing environment, we seamlessly implemented a modified mine plan
at Gibraltar and are very pleased
with our operating results for the first half of 2020, and our
response to the changing market conditions. The copper price
recovery from the lows in mid-March is remarkable and demonstrates
how strong the fundamentals for copper really are. With current
pricing at US$2.95 per pound, copper
is 20% higher than the second quarter average price. This price
increase flows straight to Taseko's bottom line and directly
increases cash flow from Gibraltar. While we remain very bullish on the
prospects for copper, it is still early days in the recovery and we
have no intentions to adjust this current mine plan."
Stuart McDonald, President of
Taseko stated, "Strong second quarter production of 36.8 million
pounds of copper and 644,000 pounds of molybdenum resulted in a
significant uptick in quarterly financial performance. Total
operating costs (C1)* of US$1.34 per
pound combined with average copper prices for the quarter of
US$2.43 per pound provided Taseko
with a strong operating margin of $50
million (excluding depletion and amortization) for the
quarter. Our cash balance increased to $64
million at the end of June, after making the C$15 million interest payment on our outstanding
bonds."
"Copper production for the first half of 2020 was right on plan
and in line with the higher end of our original guidance.
Production and site spending in the second half of the year is
expected to be at similar levels as the first half," added Mr.
McDonald.
Mr. Hallbauer continued, "As previously disclosed, we are
expecting the draft Aquifer Protection Permit to be issued by the
Arizona Department of Environmental Quality tomorrow. This is a
very exciting milestone to have achieved and is another important
step closer to adding 85 million pounds of low cost copper
production to our Gibraltar
base."
*Non-GAAP performance
measure. See end of news release.
|
"The US Environmental Protection Agency is nearing completion of
their technical review and no significant issues have been
identified. While progress is being made, the COVID-19
situation in Arizona has had an
impact on the permitting process and this has extended the timeline
by a few months, but we still expect to have a fully permitted
project in early 2021."
"Discussions with potential joint venture partners and lenders,
as well as streaming and royalty companies, continue. Interest on
all fronts remains at a high level and we believe a financing
package will be finalized and committed prior to final permits
being issued. For the most part, this process has not been hindered
by COVID-19," concluded Mr. Hallbauer.
Second Quarter Review
- The Gibraltar Mine (100% basis) produced 36.8 million pounds of
copper in the second quarter, a 14% increase over the first
quarter. Copper recoveries were 85.2% and copper head grades were
0.281%;
- In April, management implemented a revised mine plan and budget
for Gibraltar which has reduced
site spending in the current year while maintaining long-term mine
plan requirements. Total operating costs (C1)* were
US$1.34 per pound produced in the
second quarter, which is US$0.48 per
pound lower than the prior quarter, and in line with the revised
operating plan;
- Earnings from mining operations before depletion and
amortization* were $50.3 million, and
Adjusted EBITDA* was $50.9
million;
- Cash flow from operations were $37.1
million and the Company had an ending cash balance at
June 30, 2020 of $63.6 million;
- Gibraltar sold 39.3 million
pounds of copper in the quarter (100% basis) which resulted in
$106.0 million of revenue for Taseko,
a 71% increase from the first quarter. Revenue included
upward provisional price adjustments of $10.1 million;
- Net income (GAAP) for the second quarter was $18.7 million ($0.08 per share). Adjusted net income* was
$8.3 million ($0.03 per share);
- On April 24, 2020, Taseko
concluded an amendment to its silver stream with Osisko Gold
Royalties and received $8.5 million
in exchange for reducing the delivery price of silver from
US$2.75 per ounce to nil;
- Gibraltar also concluded a
spot tender for copper concentrate in the second half of the year
at a TC/RC rate approximately 40% below the 2020 benchmark level as
buyers competed for clean, high quality concentrate like
Gibraltar's;
- With all required production test results completed, Florence
Copper made the decision to begin the wind-down of the production
test facility and to commence the final phase of rinsing the small
section of the orebody where the test wellfield is located.
The Arizona Department of Environmental Quality ("ADEQ") has
informed Taseko it plans to issue the draft Aquifer Protection
Permit on August 6, 2020; and
- In May 2020, Taseko published its
first Environmental, Social, and Governance report, which includes
an examination of the Company's sustainable performance, with
specific details for 2017, 2018 and 2019. The report is
available on the Company's website at www.tasekomines.com/esg.
*Non-GAAP performance
measure. See end of news release.
|
HIGHLIGHTS
Operating Data
(Gibraltar - 100% basis)
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Tons mined
(millions)
|
20.5
|
26.6
|
(6.1)
|
49.0
|
50.0
|
(1.0)
|
Tons milled
(millions)
|
7.7
|
7.7
|
-
|
15.2
|
14.5
|
0.7
|
Production (million
pounds Cu)
|
36.8
|
34.7
|
2.1
|
69.2
|
59.5
|
9.7
|
Sales (million pounds
Cu)
|
39.3
|
32.3
|
7.0
|
70.4
|
55.6
|
14.8
|
|
|
|
Financial
Data
|
Three months ended
June 30,
|
Six months ended
June 30,
|
(Cdn$ in thousands,
except for per share amounts)
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Revenues
|
106,005
|
86,521
|
19,484
|
168,089
|
156,795
|
11,294
|
Earnings from mining
operations before depletion
and
amortization*
|
50,336
|
18,646
|
31,690
|
56,259
|
34,375
|
21,884
|
Adjusted
EBITDA*
|
50,860
|
14,660
|
36,200
|
56,206
|
24,905
|
31,301
|
Cash flows provided
by operations
|
37,079
|
11,073
|
26,006
|
54,750
|
18,264
|
36.486
|
Adjusted net income
(loss)*
|
8,335
|
(17,471)
|
25,806
|
(13,312)
|
(31,890)
|
18,578
|
Per share - basic
("adjusted EPS")*
|
0.03
|
(0.07)
|
0.10
|
(0.05)
|
(0.13)
|
0.08
|
Net income (loss)
(GAAP)
|
18,745
|
(11,012)
|
29,757
|
(30,205)
|
(18,943)
|
(11,262)
|
Per share - basic
("EPS")
|
0.08
|
(0.04)
|
0.12
|
(0.12)
|
(0.08)
|
(0.04)
|
*Non-GAAP performance
measure. See end of news release.
|
REVIEW OF OPERATIONS
Gibraltar Mine (75% Owned)
Operating data
(100% basis)
|
Q2
2020
|
Q1
2020
|
Q4
2019
|
Q3
2019
|
Q2
2019
|
Tons mined
(millions)
|
20.5
|
28.5
|
25.8
|
24.7
|
26.6
|
Tons milled
(millions)
|
7.7
|
7.5
|
7.8
|
7.5
|
7.7
|
Strip
ratio
|
1.9
|
2.7
|
2.1
|
3.0
|
2.3
|
Site operating cost
per ton milled (CAD$)*
|
$7.66
|
$9.52
|
$10.46
|
$10.83
|
$11.51
|
Copper
concentrate
|
|
|
|
|
|
Head
grade (%)
|
0.281
|
0.259
|
0.253
|
0.249
|
0.256
|
Copper
recovery (%)
|
85.2
|
83.4
|
84.5
|
87.7
|
87.7
|
Production (million pounds Cu)
|
36.8
|
32.4
|
33.4
|
33.0
|
34.7
|
Sales
(million pounds Cu)
|
39.3
|
31.1
|
33.3
|
33.5
|
32.3
|
Inventory (million pounds Cu)
|
3.8
|
6.4
|
5.0
|
5.0
|
5.5
|
Molybdenum
concentrate
|
|
|
|
|
|
Production (thousand pounds Mo)
|
639
|
412
|
728
|
620
|
653
|
Sales
(thousand pounds Mo)
|
656
|
403
|
791
|
518
|
708
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
Site
operating costs*
|
$1.15
|
$1.64
|
$1.85
|
$1.88
|
$1.92
|
By-product credits*
|
(0.11)
|
(0.11)
|
(0.16)
|
(0.16)
|
(0.21)
|
Site operating costs,
net of by-product credits*
|
$1.04
|
$1.53
|
$1.69
|
$1.72
|
$1.71
|
Off-property
costs
|
0.30
|
0.29
|
0.32
|
0.33
|
0.30
|
Total operating costs
(C1)*
|
$1.34
|
$1.82
|
$2.01
|
$2.05
|
$2.01
|
OPERATIONS ANALYSIS
Second quarter results
To-date, there have been no interruptions to the Company's
operations, logistics and supply chains as a result of the COVID-19
pandemic. Effective health and safety protocols continue to
be implemented. There have been no known cases of COVID-19 at
any of Taseko's locations in Canada and the US to-date.
However, the COVID-19 situation has had a significant impact on
the global economy which has led to increased volatility in
commodity prices. In light of the volatility, management has
reviewed a number of mine plan options for Gibraltar and commencing in April implemented
a revised mining plan for 2020 that will reduce spending in the
near term while still maintaining long-term mine plan requirements
and flexibility, and without negatively impacting 2020 copper
production. Copper production in the second quarter was 36.8
million pounds as a result of grade and recovery as higher grade
ore was mined from the bottom of the Granite pit.
The strip ratio for the second quarter was 1.9 to 1 and was
lower than previous quarters due to less waste rock remaining in
the Granite pit, but in line with the life of mine average strip
ratio. The lower overall mining rate resulted in reduced
costs and the operation also benefited from falling input costs,
including diesel fuel which was 35% lower than 2019 average
prices. As a result, total site spending (including
capitalized stripping costs) was 24% lower than the previous
quarter. Shorter haul distances in the Pollyanna pit also
contributed to lower spending.
Molybdenum production was 639 thousand pounds in the second
quarter, an increase from the prior quarter due to higher
molybdenum grade, which also increased recovery. Molybdenum
prices averaged US$8.37 per
pound over the second quarter compared to US$9.63 per pound in the prior quarter and
US$12.18 per pound in Q2
2019. By-product credits per pound of copper produced* was
US$0.11 in the second quarter,
consistent with the prior quarter.
Off-property costs per pound produced* were US$0.30 for the second quarter of 2020 and
consist of concentrate treatment, refining and transportation
costs. These costs are in line with recent quarters relative to
pounds of copper sold.
*Non-GAAP performance
measure. See end of news release.
|
GIBRALTAR
OUTLOOK
Production guidance for 2020 remains unchanged at 130 million
pounds (+/-5%), although management expects production to be at the
higher end of that range based on its revised plan and the strong
first half of 2020. The new operating plan and other
identified cost savings will continue to result in lower site
spending in the coming months. Total site spending in the second
half of the year is expected to be at similar levels as the first
half of 2020. Operating a large, open pit mine such as
Gibraltar requires adaptability
thus management will continue to monitor market conditions and
adjust operating plans as required to respond to copper price
movements.
Mine site engineering has found opportunities in changing the
pit development sequencing by incorporating the Gibraltar pit after completion of the current
mining phase of the Granite pit. The Gibraltar pit has not been mined since the
1970s and is the lowest work index ore (softer ore) on the
Gibraltar property. Access to, and
processing of, this ore type will provide substantial productivity
and cost improvements to the operation once developed and
active.
Copper prices have recovered swiftly due to recovery in Chinese
demand and supply disruptions, most notably in South America.
The medium to long-term fundamentals for copper remain strong
despite recent volatility caused by uncertain global economic
demand arising from the COVID-19 pandemic. Most industry
analysts are projecting supply constraints after an economic
recovery, which should bring higher copper prices in the coming
years.
*Non-GAAP performance
measure. See end of news release.
|
REVIEW OF PROJECTS
Taseko's strategy has been to grow the Company from the
operating cash flow and credit quality of the Gibraltar Mine to
assemble and develop a pipeline of complimentary projects. We
continue to believe this will generate long-term returns for
shareholders. Our development projects are focused primarily on
copper and are located in stable mining jurisdictions in
British Columbia and
Arizona. Our current focus is on the near-term development of
the Florence Copper Project.
Florence Copper Project
The Production Test Facility ("PTF") operated continuously
without disruption during the second quarter of 2020. Steady
state operation was achieved in 2019 and the focus turned 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 ore body. The operating team has used physical and
operating control mechanisms to adjust solution chemistry and flow
rates and has successfully achieved targeted copper concentration
in solution. Pregnant leach solution ("PLS") grade in the centre
recovery well (most representative of the performance of the
commercial wellfield) has been stable at roughly two grams per
litre since November and in June and July the SX/EW plant produced
at a rate of approximately one million pounds of copper cathode per
year, mainly from the centre recovery well.
The PTF has provided valuable data to validate the Company's
modelled assumptions and operating parameters, and this data is
being used to refine operating plans for the commercial
phase. With all of the required data in hand, we recently
made the decision to wind down the production phase of the test
facility and commence rinsing the small section of the orebody
where the wellfield has been operating.
Two permits are required to commence construction of the
commercial scale wellfield at Florence Copper, which is expected to
produce 85 million pounds of copper cathode annually for 20
years. 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"). The Company has been
informed by the ADEQ that it will issue the draft APP on
August 6, 2020. After the draft
permit is issued there will be a 30-day public comment period and
public meetings before the final APP permit is approved. The
EPA is also nearing completion of its technical review for the UIC
permit, and no significant issues have been identified. While
progress is being made, the COVID-19 situation in Arizona has had an impact on the EPA process
and this has extended the timeline by a few months, but management
still expects the project will be fully permitted in early
2021.
During the second quarter, the Company continued to advance
discussions with interested parties regarding the potential sale of
a minority interest in the Florence project, and the proceeds of
any such sale could fund a significant portion of the capital
required to develop the commercial operation. Discussions
with potential lenders and other finance providers are ongoing. The
Company targets having a committed financing package in place prior
to receipt of the permits.
Total net expenditures at the Florence Project during the first
half of 2020 were $9.1 million
including operation of the PTF and other project development
costs.
Yellowhead Copper Project
In January 2020, the Company
announced the results of its technical studies on Yellowhead Mining
Inc. ("Yellowhead") which resulted in a 22% increase in recoverable
copper reserves and significantly improved project economics. The
Company filed a new NI 43-101 technical report (dated January 16, 2020) (the "Technical Report") on
Sedar. Yellowhead holds a 100% interest in a copper-gold-silver
development project located in south-central British Columbia.
The Technical Report outlines a new development plan for the
project, which includes an 817 million tonne reserve and a 25-year
mine life with a pre-tax NPV of $1.3
billion at an 8% discount rate using a US$3.10 per pound copper price. This
represents a $500 million increase
over the 2014 Feasibility Study completed by the previous owner.
Capital costs of the project are estimated at $1.3 billion over a 2-year construction
period. Over the first 5 years of operation, the copper
equivalent grade will average 0.35% producing an average of 200
million pounds of copper per year at an average C1 cost, net of
by-product credit, of US$1.67 per
pound of copper. The Yellowhead Copper Project contains valuable
precious metal by-products with 440,000 ounces of gold and 19
million ounces of silver with a life of mine value of over
$1 billion at current
prices.
The Company is focusing its current efforts on advancing the
environmental assessment and some additional engineering work in
conjunction with ongoing engagement with local communities
including First Nations. A focus group has been formed
between the Company and high-level regulators in the appropriate
Provincial Ministries in order to expedite the advancement of the
environmental assessment and the permitting of the project.
Management also commenced joint venture partnering discussions in
2020 with a number of strategic industry groups that are interested
in potentially investing in the Yellowhead project in combination
with acquiring the significant copper offtake rights.
In May 2020, the Company announced
it has entered into an agreement with an Indigenous Nation
regarding Taseko's intentions to commence the regulatory approval
process of the Yellowhead Copper Project. The agreement represents
Taseko's commitment to recognize and respect the Nation's inherent
right to govern its lands, and the importance of assessing the
Yellowhead Copper Project in accordance with its values, laws, and
community aspirations to make an informed decision on the
project.
New Prosperity Gold- Copper Project
On December 5, 2019, the Company
announced that the Tŝilhqot'in Nation as represented by Tŝilhqot'in
National Government and Taseko have entered into a dialogue,
facilitated by the Province of British
Columbia, to try to obtain a long-term solution to the
conflict regarding Taseko's proposed gold-copper mine currently
known as New Prosperity, acknowledging Taseko's commercial
interests and the opposition of the Tŝilhqot'in Nation to the
Project. While the details of this process are confidential, in
order to facilitate a dialogue, the parties have agreed to a
standstill on certain outstanding litigation and regulatory matters
which relate to Taseko's tenures and the area in the vicinity of
Teztan Biny (Fish Lake).
Aley Niobium Project
Environmental monitoring and product marketing initiatives on
the Aley Niobium project continue. The pilot plant program
commenced in the second quarter of 2019 has successfully completed
the niobium flotation process portion of the test, raising
confidence in the design and providing feed to begin the converter
portion of the process. Completion of the converter portion of the
pilot plant will provide additional process data to support the
design of the commercial process facilities and provide final
product samples for marketing purposes.
Note: Gibraltar is a
contractual, unincorporated joint venture between Taseko Mines
Limited (75% interest) and Cariboo Copper Corp. (25% interest). All
production and sales figures are reported on a 100% basis, unless
otherwise noted.
Taseko will host a
telephone conference call and live webcast on Thursday, August 6,
2020 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
(888) 390-0546 in Canada and the United States, or (416) 764-8688
internationally.
The conference call
will be archived for later playback until August 20, 2020 and can
be accessed by dialing (888) 390-0541 in Canada and the United
States, or (416) 764-8677 internationally and using the passcode
273649 #.
|
Russell Hallbauer
CEO and Director
No regulatory authority has approved or
disapproved of the information in this news release.
NON-GAAP PERFORMANCE MEASURES
This document includes certain non-GAAP performance measures
that do not have a standardized meaning prescribed by IFRS. These
measures may differ from those used by, and may not be comparable
to such measures as reported by, other issuers. The Company
believes that these measures are commonly used by certain
investors, in conjunction with conventional IFRS measures, to
enhance their understanding of the Company's performance. These
measures have been derived from the Company's financial statements
and applied on a consistent basis. The following tables below
provide a reconciliation of these non-GAAP measures to the most
directly comparable IFRS measure.
Total operating costs and site operating costs, net of
by-product credits
Total costs of sales include all costs absorbed into inventory,
as well as transportation costs and insurance recoverable. Site
operating costs are calculated by removing net changes in
inventory, depletion and amortization, insurance recoverable, and
transportation costs from cost of sales. Site operating costs, net
of by-product credits is calculated by subtracting by-product
credits from the site operating costs. Site operating costs, net of
by-product credits per pound are calculated by dividing the
aggregate of the applicable costs by copper pounds produced. Total
operating costs per pound is the sum of site operating costs, net
of by-product credits and off-property costs divided by the copper
pounds produced. By-product credits are calculated based on actual
sales of molybdenum (net of treatment costs) and silver during the
period divided by the total pounds of copper produced during the
period. These measures are calculated on a consistent basis for the
periods presented.
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
(Cdn$ in thousands,
unless otherwise indicated) – 75% basis
|
2020
|
2019
|
2020
|
2019
|
Cost of
sales
|
81,181
|
98,013
|
164,490
|
172,742
|
Less:
|
|
|
|
|
Depletion and
amortization
|
(25,512)
|
(30,138)
|
(52,660)
|
(50,322)
|
Net change in
inventories of finished goods
|
(5,753)
|
3,989
|
(4,441)
|
8,035
|
Net change in
inventories of ore stockpiles
|
(50)
|
(540)
|
543
|
(413)
|
Transportation
costs
|
(5,834)
|
(4,630)
|
(10,353)
|
(7,918)
|
Site operating
costs
|
44,032
|
66,694
|
97,579
|
122,124
|
Less by-product
credits:
|
|
|
|
|
Molybdenum,
net of treatment costs
|
(4,252)
|
(7,243)
|
(7,483)
|
(15,062)
|
Silver,
excluding amortization of deferred revenue
|
(28)
|
(93)
|
(382)
|
(279)
|
Site operating costs,
net of by-product credits
|
39,752
|
59,358
|
89,714
|
106,783
|
Total copper produced
(thousand pounds)
|
27,576
|
26,020
|
51,894
|
44,661
|
Total costs per pound
produced
|
1.44
|
2.28
|
1.73
|
2.39
|
Average exchange rate
for the period (CAD/USD)
|
1.39
|
1.34
|
1.37
|
1.33
|
Site operating
costs, net of by-product credits (US$ per pound)
|
1.04
|
1.71
|
1.27
|
1.79
|
Site operating costs,
net of by-product credits
|
39,752
|
59,358
|
89,714
|
106,783
|
Add off-property
costs:
|
|
|
|
|
Treatment and
refining costs
|
5,676
|
5,839
|
10,632
|
10,105
|
Transportation
costs
|
5,834
|
4,630
|
10,353
|
7,918
|
Total operating
costs
|
51,262
|
69,827
|
110,699
|
124,806
|
Total operating
costs (C1) (US$ per pound)
|
1.34
|
2.01
|
1.56
|
2.10
|
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 and fuel call 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
June
30,
|
Six months
ended
June
30,
|
($ in thousands,
except per share amounts)
|
2020
|
2019
|
2020
|
2019
|
Net income
(loss)
|
18,745
|
(11,012)
|
(30,205)
|
(18,943)
|
Unrealized
foreign exchange (gain) loss
|
(12,985)
|
(6,258)
|
16,762
|
(12,947)
|
Unrealized
(gain) loss on copper put and fuel call options
|
3,528
|
(276)
|
180
|
-
|
Estimated tax
effect of adjustments
|
(953)
|
75
|
(49)
|
-
|
Adjusted net
income (loss)
|
8,335
|
(17,471)
|
(13,312)
|
(31,890)
|
Adjusted
EPS
|
0.03
|
(0.07)
|
(0.05)
|
(0.13)
|
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 and fuel call options;
and
- Amortization of share-based compensation expense.
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
($ in
thousands)
|
2020
|
2019
|
2020
|
2019
|
Net income
(loss)
|
18,745
|
(11,012)
|
(30,205)
|
(18,943)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
25,512
|
30,138
|
52,660
|
50,322
|
Finance
expense
|
10,461
|
10,048
|
21,232
|
19,790
|
Finance
income
|
(48)
|
(299)
|
(198)
|
(607)
|
Income tax
expense (recovery)
|
4,326
|
(8,125)
|
(5,792)
|
(14,941)
|
Unrealized
foreign exchange (gain) loss
|
(12,985)
|
(6,258)
|
16,762
|
(12,947)
|
Unrealized
loss (gain) on copper put and fuel call options
|
3,528
|
(276)
|
180
|
-
|
Amortization of
share-based compensation expense
|
1,321
|
444
|
1,567
|
2,231
|
Adjusted
EBITDA
|
50,860
|
14,660
|
56,206
|
24,905
|
Earnings from mining operations before depletion and
amortization
Earnings from mining operations before depletion and
amortization is earnings from mining operations with depletion and
amortization added back. The Company discloses this measure, which
has been derived from our financial statements and applied on a
consistent basis, to provide assistance in understanding the
results of the Company's operations and financial position and it
is meant to provide further information about the financial results
to investors.
|
Three
months ended
June 30,
|
Six
months ended
June 30,
|
(Cdn$ in
thousands)
|
2020
|
2019
|
2020
|
2019
|
Earnings (loss)
from mining operations
|
24,824
|
(11,492)
|
3,599
|
(15,947)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
25,512
|
30,138
|
52,660
|
50,322
|
Earnings from
mining operations before depletion and amortization
|
50,336
|
18,646
|
56,259
|
34,375
|
Site operating costs per ton milled
|
Three months
ended
June 30,
|
Six
months ended
June 30,
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2020
|
2019
|
2020
|
2019
|
Site operating
costs (included in cost of sales)
|
44,032
|
66,694
|
97,579
|
122,124
|
|
|
|
|
|
Tons
milled (thousands) (75% basis)
|
5,748
|
5,794
|
11,370
|
10,890
|
Site operating
costs per ton milled
|
$7.66
|
$11.51
|
$8.58
|
$11.21
|
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This document contains "forward-looking statements" that were
based on Taseko's expectations, estimates and projections as of the
dates as of which those statements were made. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "outlook", "anticipate",
"project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the Company's
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking statements. These included but are not limited
to:
- uncertainties about the effect of COVID-19 and the response of
local, provincial, federal and international governments to the
threat of COVID-19 on our operations (including our suppliers,
customers, supply chain, employees and contractors) and economic
conditions generally and in particular with respect to the demand
for copper and other metals we produce;
- uncertainties and costs related to the Company's exploration
and development activities, such as those associated with
continuity of mineralization or determining whether mineral
resources or reserves exist on a property;
- uncertainties related to the accuracy of our estimates of
mineral reserves, mineral resources, production rates and timing of
production, future production and future cash and total costs of
production and milling;
- uncertainties related to feasibility studies that provide
estimates of expected or anticipated costs, expenditures and
economic returns from a mining project;
- uncertainties related to the ability to obtain necessary
licenses permits for development projects and project delays due to
third party opposition;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our exploration and development
activities and mining operations, particularly laws, regulations
and policies;
- changes in general economic conditions, the financial markets
and in the demand and market price for copper, gold and other
minerals and commodities, such as diesel fuel, steel, concrete,
electricity and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to the
value of the U.S. dollar and Canadian dollar, and the continued
availability of capital and financing;
- the effects of forward selling instruments to protect against
fluctuations in copper prices and exchange rate movements and the
risks of counterparty defaults, and mark to market risk;
- the risk of inadequate insurance or inability to obtain
insurance to cover mining risks;
- the risk of loss of key employees; the risk of changes in
accounting policies and methods we use to report our financial
condition, including uncertainties associated with critical
accounting assumptions and estimates;
- environmental issues and liabilities associated with mining
including processing and stock piling ore; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we
operate mines, or environmental hazards, industrial accidents or
other events or occurrences, including third party interference
that interrupt the production of minerals in our mines.
For further information on Taseko, investors should review the
Company's annual Form 40-F filing with the United States Securities
and Exchange Commission www.sec.gov and home jurisdiction filings
that are available at www.sedar.com.
Cautionary Statement on Forward-Looking Information
This discussion includes certain statements that may be deemed
"forward-looking statements". All statements in this
discussion, other than statements of historical facts, that address
future production, reserve potential, exploration drilling,
exploitation activities, and events or developments that the
Company expects are forward-looking statements. Although we
believe the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual
results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration
successes, continued availability of capital and financing and
general economic, market or business conditions. Investors
are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ
materially from those projected in the forward-looking
statements. All of the forward-looking statements made in
this MD&A are qualified by these cautionary statements.
We disclaim any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except to the extent required by
applicable law. Further information concerning risks and
uncertainties associated with these forward-looking statements and
our business may be found in our most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian provincial
securities regulatory authorities.
View original
content:http://www.prnewswire.com/news-releases/taseko-delivers-solid-operational-performance-and-51-million-of-adjusted-ebitda-in-the-second-quarter-301107108.html
SOURCE Taseko Mines Limited