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, Oct. 26, 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 $35.7 million,
Adjusted EBITDA* of $31.5 million and
Net income of $1.0 million, or $nil
per share, in the third quarter of 2020.
Stuart McDonald, President of
Taseko, stated, "The price of copper continued its recovery in the
third quarter, with the price increasing from an average of
US$2.43 in the second quarter to just
under $3.00 in the third quarter.
This copper price gain contributed to our strong EBITDA and cash
flow generation. Taseko's cash position further increased this
quarter to $73 million, up
$9 million from the end of June.
Sales for the quarter were 29 million pounds and we generated a
healthy operating margin of nearly 40%."
Mr. McDonald continued, "Through nine months, we have produced
98 million pounds of copper at Gibraltar, in line with our original guidance
of 130 million pounds (+/-5%). Third quarter copper production was
29 million pounds. While we anticipated copper grade more in line
with the life of mine average in the third quarter, the final
benches of the Granite pit did not produce the copper grade we were
expecting, and head grade for the period averaged 0.23%. Molybdenum
production in the third quarter remained strong at 668 thousand
pounds, due to both grade and recoveries."
Russell Hallbauer, CEO and
Director, commented, "At our Florence Copper Project, permitting
and financing activities are progressing. The public comment period
for the Aquifer Protection Permit concluded in October and the
state agency is now reviewing and will be responding to submitted
comments as required and we expect the final state permit to be
issued in the coming weeks. The EPA is advancing their permitting
work and we continue to anticipate the Underground Injection
Control Permit to be issued in early 2021. On the financing front,
discussions are ongoing with multiple parties for various funding
opportunities. Financing activities continue to track well with
permitting progress."
*Non-GAAP performance
measure. See end of news release.
|
"In March, after the price of copper dramatically declined,
Taseko developed a short-term plan to respond to the lower pricing
environment. The plan, which significantly reduced our costs since
April, was effective and allowed the Company to maintain strong
cash flow and continue to advance our Florence Copper Project. With
a strengthening copper price this quarter, we began increasing
mining rates in September resulting in slightly higher site
spending over the second quarter. Going forward, the Pollyanna pit
will be the main source of ore through mid-2021 at which point we
expect to begin mining ore from the Gibraltar pit. Ore from the Gibraltar pit will require less energy to
grind, resulting in substantial productivity and cost benefits.
Maintaining a healthy operating margin will continue to drive
our operational decisions. The rebounded copper price has allowed
us to revert to normal mining rates while continuing to generate
robust cash flow for the Company. We will balance spending and
operating margin with long-term mine plan requirements, as we have
always done," concluded Mr. Hallbauer.
Third Quarter Review
- Earnings from mining operations before depletion and
amortization* was $35.7 million, and
Adjusted EBITDA* was $31.5
million;
- Cash flow from operations was $31.0
million and the Company had an ending cash balance at
September 30, 2020 of $72.7 million;
- The Gibraltar Mine produced 28.9 million pounds of copper in
the third quarter. Copper recoveries were 85.0% and copper head
grades were 0.23%;
- In March, management implemented a revised mine plan and budget
for Gibraltar which reduced site
spending over the last six months. Although total site
spending in the current quarter increased from the previous quarter
due to higher mining rates, they were still 19% lower than the same
quarter in the prior year;
- Gibraltar sold 28.6 million
pounds of copper in the quarter (100% basis) which resulted in
$86.8 million of revenue for
Taseko. Average LME copper prices were US$2.96 per pound in the quarter and revenue also
included positive provisional price adjustments of $4.4 million;
- Net income (GAAP) for the third quarter was $1.0 million ($nil per share). Adjusted net
loss* was $5.8 million ($0.02 loss per share);
- Gibraltar extended its
five-year copper concentrate offtake contract, for roughly 50% of
its production, for an additional year which is expected to
result in a 30% reduction in treatment & refining costs in
2021, reflecting the continued tight physical copper concentrate
market conditions and the strategic demand for Gibraltar's high quality concentrates; and
- The Arizona Department of Environmental Quality ("ADEQ") issued
the draft Aquifer Protection Permit for the Florence Copper Project
on August 6, 2020, which was followed
by a public hearing and a public comment period which ended on
October 12, 2020.
*Non-GAAP performance
measure. See end of news release.
|
Outlook
- Annual production guidance for 2020 remains unchanged at 130
million pounds (+/-5%); and
- Preparations to begin mining the Gibraltar pit in 2021 commenced in the third
quarter. This new mining sequence will reduce capital costs and
provide operating efficiencies and improve operating costs.
HIGHLIGHTS
Operating Data
(Gibraltar - 100% basis)
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Tons mined
(millions)
|
23.3
|
24.7
|
(1.4)
|
72.3
|
74.7
|
(2.4)
|
Tons milled
(millions)
|
7.5
|
7.5
|
-
|
22.6
|
22.1
|
0.5
|
Production (million
pounds Cu)
|
28.9
|
33.0
|
(4.1)
|
98.1
|
92.5
|
5.6
|
Sales (million pounds
Cu)
|
28.6
|
33.5
|
(4.9)
|
99.0
|
89.1
|
9.9
|
Financial
Data
|
Three
months ended
September 30,
|
Nine months
ended
September
30,
|
(CDN$ in thousands,
except for per share amounts)
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Revenues
|
87,780
|
82,436
|
5,344
|
255,869
|
239,231
|
16,638
|
Earnings from mining
operations before depletion
and amortization*
|
35,705
|
12,317
|
23,388
|
91,964
|
46,692
|
45,272
|
Adjusted
EBITDA*
|
31,545
|
7,906
|
23,639
|
87,751
|
32,811
|
54,940
|
Cash flows provided
by operations
|
31,021
|
15,150
|
15,871
|
85,771
|
33,414
|
52,357
|
Adjusted net
loss*
|
(5,754)
|
(20,561)
|
14,807
|
(19,066)
|
(52,451)
|
33,385
|
Per share - basic
("adjusted EPS")*
|
(0.02)
|
(0.08)
|
0.06
|
(0.08)
|
(0.22)
|
0.14
|
Net income (loss)
(GAAP)
|
987
|
(24,508)
|
25,495
|
(29,218)
|
(43,451)
|
14,233
|
Per share - basic
("EPS")
|
-
|
(0.10)
|
0.10
|
(0.12)
|
(0.18)
|
0.06
|
*Non-GAAP performance
measure. See end of news release.
|
REVIEW OF OPERATIONS
Gibraltar Mine (75% Owned)
Operating data
(100% basis)
|
Q3
2020
|
Q2
2020
|
Q1
2020
|
Q4
2019
|
Q3
2019
|
Tons mined
(millions)
|
23.3
|
20.5
|
28.5
|
25.8
|
24.7
|
Tons milled
(millions)
|
7.5
|
7.7
|
7.5
|
7.8
|
7.5
|
Strip
ratio
|
1.5
|
1.9
|
2.7
|
2.1
|
3.0
|
Site operating cost
per ton milled (CDN$)*
|
$9.57
|
$7.66
|
$9.52
|
$10.46
|
$10.83
|
Copper
concentrate
|
|
|
|
|
|
Head
grade (%)
|
0.228
|
0.281
|
0.259
|
0.253
|
0.249
|
Copper
recovery (%)
|
85.0
|
85.2
|
83.4
|
84.5
|
87.7
|
Production (million pounds Cu)
|
28.9
|
36.8
|
32.4
|
33.4
|
33.0
|
Sales
(million pounds Cu)
|
28.6
|
39.3
|
31.1
|
33.3
|
33.5
|
Inventory (million pounds Cu)
|
3.6
|
3.8
|
6.4
|
5.0
|
5.0
|
Molybdenum
concentrate
|
|
|
|
|
|
Production (thousand pounds Mo)
|
668
|
639
|
412
|
728
|
620
|
Sales
(thousand pounds Mo)
|
693
|
656
|
403
|
791
|
518
|
Per unit data (USD
per pound produced)*
|
|
|
|
|
|
Site
operating costs*
|
$1.85
|
$1.15
|
$1.64
|
$1.85
|
$1.88
|
By-product credits*
|
(0.14)
|
(0.11)
|
(0.11)
|
(0.16)
|
(0.16)
|
Site operating costs,
net of by-product credits*
|
$1.71
|
$1.04
|
$1.53
|
$1.69
|
$1.72
|
Off-property
costs
|
0.29
|
0.30
|
0.29
|
0.32
|
0.33
|
Total operating costs
(C1)*
|
$2.00
|
$1.34
|
$1.82
|
$2.01
|
$2.05
|
OPERATIONS ANALYSIS
Third 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. Heightened health and safety protocols continue to
be implemented and monitored for effectiveness. In light of
the overall economic volatility experienced earlier this year due
to COVID-19, management implemented a revised mining plan in March
that reduced costs over the last six months while still maintaining
long-term mine plan requirements.
Copper production in the third quarter was 28.9 million
pounds. Copper grades in the final benches of the Granite pit
were lower than expected. Mining in the Granite pit was completed
in early October.
*Non-GAAP performance
measure. See end of news release.
|
OPERATIONS ANALYSIS – CONTINUED
Total site spending (including capitalized stripping) increased
by 10% over the previous quarter as the mining rate increased in
accordance with the revised operating plan, but remained 19% lower
than the third quarter of 2019. Gibraltar has benefited from continued lower
input costs, including diesel fuel which remained 25% lower than
2019 average prices in the quarter. Shorter haul distances in
the Pollyanna pit also contributed to lower spending. The
strip ratio for the third quarter was 1.5 to 1 and was lower due to
less waste rock remaining in the Granite pit.
Molybdenum production was 668 thousand pounds in the third
quarter, an increase from the prior quarter due to higher
molybdenum grade, which also increased recovery. Molybdenum
prices were lower in the third quarter and averaged US$7.71 per pound compared to US$8.37 per pound in the prior quarter and
US$11.83 per pound in Q3
2019. By-product credits per pound of copper produced* was
US$0.14 in the third quarter, an
increase of US$0.03 over the prior
quarter.
Off-property costs per pound produced* were US$0.29 for the third 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.
Total operating costs per pound produced (C1)* increased to
US$2.00 from US$1.34 in the prior quarter, which was primarily
due to lower copper production, a stronger Canadian dollar exchange
rate, and a lower allocation of costs to capitalized stripping in
the current quarter.
GIBRALTAR
OUTLOOK
Annual production guidance for 2020 remains at 130 million
pounds +/-5%.
With the Granite pit now complete, mining has transitioned to
the Pollyanna pit which will be the main ore source in 2021. With a
strengthening copper price, mining rates have been increased to
normal levels. Gibraltar pit
mining will commence in the first part of 2021 with ore release
occurring in the second half of the year. Ore from the
Gibraltar pit is expected to
require less energy to grind which will provide substantial
productivity and cost improvements when processed.
Copper prices have recovered swiftly due to recovery in Chinese
demand coupled with continued supply disruptions, most notably in
South America. Many governments
are now focusing on increased infrastructure investment to
stimulate growth following the pandemic and the need for metals
such as copper should result in increased near term demand.
The medium to long-term fundamentals for copper remain strong and
most industry analysts are projecting ongoing supply constraints
and deficits in the years ahead after the economic recovery, which
should bring higher copper prices. Molybdenum prices have also
started to recover since August, as demand has improved in key
steel-making regions.
*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
Management is pleased with the results of its Production Test
Facility ("PTF") which has provided valuable data to validate the
Company's modelled assumptions and operating parameters. This data
is being used to refine operating plans for the commercial
operation. Detailed engineering for the commercial facility is
ongoing with the objective that it will be substantially completed
ahead of the receipt of final permits and a final construction
decision.
Steady state operation of the PTF 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) achieved targeted levels
and the SX/EW plant was producing at an annualized rate of one
million pounds of copper cathode per year prior to switching to the
rinsing phase of testing in late June 2020. Data collected
during this final rinsing phase will further inform commercial
operations.
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").
On August 6, 2020, the draft APP
was issued by the ADEQ and a public comment period was
initiated. As part of the public comment period, a public
hearing was held by the ADEQ on September
9. During this hearing, the Florence Copper Project received
overwhelming support from local community members, local business
owners, elected state officials and city councillors, a state
senator and representatives from the technical services sector. The
public comment period ended on October
12 and the ADEQ is reviewing comments received before
issuing the final permit.
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.
REVIEW OF PROJECTS – CONTINUED
The Company continued to advance discussions with interested
parties regarding the potential sale of a minority interest in the
Florence Copper 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 Copper Project during the
first nine months of 2020 were $13.3
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.
REVIEW OF PROJECTS – CONTINUED
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, which is underway, 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.
The Company will host
a telephone conference call and live webcast on Tuesday, October
27, 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
November 13, 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 277617 #.
|
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
September
30,
|
Nine months
ended
September
30,
|
(Cdn$ in thousands,
unless otherwise indicated) – 75% basis
|
2020
|
2019
|
2020
|
2019
|
Cost of
sales
|
75,969
|
98,173
|
240,459
|
270,915
|
Less:
|
|
|
|
|
Depletion and
amortization
|
(23,894)
|
(28,054)
|
(76,554)
|
(78,376)
|
Net change in
inventories of finished goods
|
1,415
|
(1,272)
|
(3,026)
|
6,763
|
Net change in
inventories of ore stockpiles
|
4,186
|
(2,690)
|
4,729
|
(3,103)
|
Transportation
costs
|
(4,127)
|
(4,889)
|
(14,480)
|
(12,807)
|
Site operating
costs
|
53,549
|
61,268
|
151,128
|
183,392
|
Less by-product
credits:
|
|
|
|
|
Molybdenum,
net of treatment costs
|
(4,109)
|
(4,957)
|
(11,592)
|
(20,020)
|
Silver,
excluding amortization of deferred revenue
|
(54)
|
(308)
|
(436)
|
(588)
|
Site operating costs,
net of by-product credits
|
49,386
|
56,003
|
139,100
|
162,784
|
Total copper produced
(thousand pounds)
|
21,658
|
24,720
|
73,552
|
69,381
|
Total costs per pound
produced
|
2.28
|
2.27
|
1.89
|
2.35
|
Average exchange rate
for the period (CAD/USD)
|
1.33
|
1.32
|
1.35
|
1.33
|
Site operating
costs, net of by-product credits (US$ per pound)
|
1.71
|
1.72
|
1.40
|
1.77
|
Site operating costs,
net of by-product credits
|
49,386
|
56,003
|
139,100
|
162,784
|
Add off-property
costs:
|
|
|
|
|
Treatment and
refining costs
|
4,254
|
5,792
|
18,070
|
15,898
|
Transportation
costs
|
4,127
|
4,889
|
14,480
|
12,807
|
Total operating
costs
|
57,767
|
66,684
|
171,650
|
191,489
|
Total operating
costs (C1) (US$ per pound)
|
2.00
|
2.05
|
1.72
|
2.08
|
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 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
September 30,
|
Nine months
ended
September
30,
|
($ in thousands,
except per share amounts)
|
2020
|
2019
|
2020
|
2019
|
Net income
(loss)
|
987
|
(24,508)
|
(29,218)
|
(43,451)
|
Unrealized
foreign exchange (gain) loss
|
(7,512)
|
3,569
|
9,250
|
(9,378)
|
Unrealized
loss on copper put and fuel call options
|
1,056
|
518
|
1,236
|
518
|
Estimated tax
effect of adjustments
|
(285)
|
(140)
|
(334)
|
(140)
|
Adjusted net
loss
|
(5,754)
|
(20,561)
|
(19,066)
|
(52,451)
|
Adjusted
EPS
|
(0.02)
|
(0.08)
|
(0.08)
|
(0.22)
|
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.
NON-GAAP PERFORMANCE MEASURES - CONTINUED
|
Three months
ended
September
30,
|
Nine months
ended
September
30,
|
($ in
thousands)
|
2020
|
2019
|
2020
|
2019
|
Net income
(loss)
|
987
|
(24,508)
|
(29,218)
|
(43,451)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
23,894
|
28,054
|
76,554
|
78,376
|
Finance
expense
|
11,203
|
10,425
|
32,435
|
30,215
|
Finance
income
|
(4)
|
(482)
|
(202)
|
(1,089)
|
Income tax
recovery
|
(580)
|
(9,853)
|
(6,372)
|
(24,794)
|
Unrealized
foreign exchange (gain) loss
|
(7,512)
|
3,569
|
9,250
|
(9,378)
|
Unrealized
loss on copper put and fuel call options
|
1,056
|
518
|
1,236
|
518
|
Amortization of
share-based compensation expense
|
2,501
|
183
|
4,068
|
2,414
|
Adjusted
EBITDA
|
31,545
|
7,906
|
87,751
|
32,811
|
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
September 30,
|
Nine months
ended
September 30,
|
(Cdn$ in
thousands)
|
2020
|
2019
|
2020
|
2019
|
Earnings (loss)
from mining operations
|
11,811
|
(15,737)
|
15,410
|
(31,684)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
23,894
|
28,054
|
76,554
|
78,376
|
Earnings from
mining operations before depletion and amortization
|
35,705
|
12,317
|
91,964
|
46,692
|
Site operating costs per ton milled
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2020
|
2019
|
2020
|
2019
|
Site operating
costs (included in cost of sales)
|
53,549
|
61,268
|
151,128
|
183,392
|
|
|
|
|
|
Tons milled
(thousands) (75% basis)
|
5,595
|
5,660
|
16,965
|
16,550
|
Site operating
costs per ton milled
|
$9.57
|
$10.83
|
$8.91
|
$11.08
|
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-reports-32-million-of-adjusted-ebitda-in-the-third-quarter-2020-301159928.html
SOURCE Taseko Mines Limited