This release should
be read with the Company's Financial Statements and Management
Discussion & Analysis ("MD&A"), available at
www.tasekomines.com and filed on www.sedar.com. Except where
otherwise noted, all currency amounts are stated in Canadian
dollars. Taseko's 75% owned Gibraltar Mine is located north of the
City of Williams Lake in south-central British Columbia. Production
volumes stated in this release are on a 100% basis unless otherwise
indicated.
|
VANCOUVER, Feb. 20, 2020 /PRNewswire/ - Taseko Mines Limited
(TSX: TKO; NYSE American: TGB; LSE: TKO) ("Taseko" or the
"Company") reports financial results for the fourth quarter and
full year ending December 31, 2019.
For the fourth quarter, Taseko recorded earnings from mining
operations before depletion and amortization* of $23.9 million, adjusted EBITDA* of $18.2 million and an adjusted net loss of
$16.2 million ($0.07 per share). For the full year, Taseko
reports earnings from mining operations before depletion and
amortization* of $70.6 million,
adjusted EBITDA* of $51.1 million and
an adjusted net loss of $68.6 million
($0.28 per share).
Russell Hallbauer, Chief
Executive Officer of Taseko, commented, "Operationally, we are
happy with the performance at Gibraltar in 2019. Grade variability was low
and copper production of 126 million pounds met our annual
production guidance. Additionally, molybdenum production of 2.7
million pounds was the best ever at Gibraltar and, combined with strong molybdenum
pricing, generated an important by-product credit. For 2020, we
maintain guidance of 130 million pounds (+/-5%) of copper
production, on a 100% basis, consistent with the life of mine
average."
Stuart McDonald, President of
Taseko, stated, "Earnings and cashflow were lower in 2019, mainly
due to a lower average copper price. Even though the price of
copper has been impacted recently by global events, we still
believe the supply/demand fundamentals remain intact with the
opportunity for a significant positive copper price movement. With
our production from Gibraltar we
continue to have significant cashflow leverage to the copper price
upside, and on the downside we have copper put options in place
until the end of April at a strike price of US$2.60 per pound, which protect our cash flow in
the event copper drops from current levels. Offsetting lower copper
prices, we are seeing reductions in off-property costs and other
input costs. For 2020, benchmark treatment and refining costs are
more than 20% lower than last year, and combined with recent fuel
price declines and other supplier cost reduction initiatives,
represent approximately seven cents
per pound of annualized cost savings to begin the year."
"Our Florence Copper Project is making headway, both from a
technical perspective as well as the permitting process. After 14
months of operating the test facility, our knowledge of the in-situ
leaching operation continues to grow. The wellfield continues to
produce a commercial grade leach solution and the SX/EW plant is
producing LME Grade A copper cathode on a steady-state basis.
Detailed engineering for the commercial scale facility is
progressing, benefitting from the many months of test facility
operating data. With both the state and federal regulators (Arizona
Department of Environmental Quality and US Environmental Protection
Agency) actively involved, permitting is advancing and now in the
technical review phase," added Mr. McDonald.
"Going forward, our focus will be on maintaining operating cash
flow at Gibraltar, given the lower
copper pricing currently being realized. While we expect a recovery
in copper price, we will operate our company in the most
cost-effective manner and manage project and other discretionary
spending appropriately in the current environment," concluded Mr.
McDonald.
*Non-GAAP performance
measure. See end of news release.
|
2019 Annual Review
- Earnings from mining operations before depletion and
amortization* was $70.6 million and
Adjusted EBITDA* was $51.1
million;
- Cash flows from operations was $42.6
million and capital expenditures for the year totalled
$50.8 million;
- Cash balance at December 31, 2019
was $53 million, which was
$8 million higher than the end of
2018;
- Site operating costs, net of by-product credits* was
US$1.75 per pound produced, and total
operating costs (C1)* was US$2.06 per
pound produced;
- Net loss for the year was $53.4
million ($0.22 per share) with
depreciation $39 million greater than
the prior year due to the amortization of capitalized strip
associated with ore mined from the Granite pit. Adjusted net loss*
was $68.6 million ($0.28 per share) after adjusting for the
unrealized foreign exchange gain of $15.2
million;
- The Gibraltar Mine (100% basis) produced 125.9 million pounds
of copper in 2019, a slight improvement over 2018. Copper
recoveries were 86.2% and copper head grades for the year were
0.245%;
- Gibraltar produced 2.7 million
pounds of molybdenum in 2019 compared to 2.4 million pounds in
2018. Molybdenum provided a by-product credit of US$0.20 per pound of copper consistent with
2018;
- Sales of copper were 122 million pounds in 2019 with finished
goods inventory at Gibraltar (100%
basis) including 5.0 million pounds of copper. This copper
concentrate inventory at December 31,
2019 had a sales value of approximately $14 million for Taseko's share;
- Taseko continued to advance its production test facility
operation at the Florence Copper project with the wellfield
performing to expectation. The SX-EW plant continues to produce LME
grade A copper cathode. Commercial permit applications for Phase 2
were submitted to the state and federal agencies in the middle of
2019 and permitting initiatives are underway; and
- In February 2019, the Company
acquired the remaining interests in Yellowhead Mining Inc. that it
did not already own for consideration of $13
million in the Company's common shares. On
January 16, 2020, the Company
published the results of its updated NI 43-101 Technical report on
the Yellowhead project outlining a significantly improved
development plan and economics.
Fourth Quarter Review
- Fourth quarter earnings from mining operations before depletion
and amortization* was $23.9 million,
and Adjusted EBITDA* was $18.2
million;
- Cash flow from operations was $9.2
million;
- Site operating costs, net of by-product credits* was
US$1.69 per pound produced,
consistent with the prior two quarters;
- Net loss was $9.9 million
($0.04 per share) after depletion and
amortization of $31.4 million in the
quarter. Adjusted net loss* was $16.2
million ($0.07 per share)
after adjusting for the unrealized foreign exchange gain of
$5.9 million;
- Copper production in the fourth quarter was consistent with
previous quarters at 33.4 million pounds and copper sales were 33.3
million pounds (100% basis); and
- Molybdenum production was steady at 728 thousand pounds in Q4;
molybdenum prices averaged US$9.67
per pound during the quarter down from US$11.83 per pound in Q3.
*Non-GAAP performance
measure. See end of news release.
|
HIGHLIGHTS
Financial
Data
|
Year ended
December 31,
|
Three Months
Ended
December 31,
|
(Cdn$ in thousands,
except for per share amounts)
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Revenues
|
329,163
|
343,870
|
(14,707)
|
89,932
|
111,121
|
(21,189)
|
Earnings from mining
operations before depletion and amortization*
|
70,613
|
112,003
|
(41,390)
|
23,921
|
28,450
|
(4,529)
|
Adjusted
EBITDA*
|
51,057
|
98,217
|
(47,160)
|
18,246
|
26,489
|
(8,243)
|
Cash flows provided
by operations
|
42,641
|
94,078
|
(51,437)
|
9,227
|
44,120
|
(34,893)
|
Earnings (loss) from
mining operations
|
(39,143)
|
41,222
|
(80,365)
|
(7,459)
|
10,578
|
(18,037)
|
Net loss
|
(53,382)
|
(35,774)
|
(17,608)
|
(9,931)
|
(19,720)
|
9,789
|
Per share - basic
("EPS")
|
(0.22)
|
(0.16)
|
(0.06)
|
(0.04)
|
(0.09)
|
0.05
|
Adjusted net
loss*
|
(68,610)
|
(8,508)
|
(60,102)
|
(16,159)
|
(1,310)
|
(14,849)
|
Per share - basic
("Adjusted EPS")*
|
(0.28)
|
(0.04)
|
(0.24)
|
(0.07)
|
(0.01)
|
(0.06)
|
|
Operating Data
(Gibraltar - 100% basis)
|
Year ended
December 31,
|
Three Months
Ended
December 31,
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Tons mined
(millions)
|
100.4
|
111.6
|
(11.2)
|
25.8
|
28.4
|
(2.6)
|
Tons milled
(millions)
|
29.9
|
30.1
|
(0.2)
|
7.8
|
7.1
|
0.7
|
Production (million
pounds Cu)
|
125.9
|
125.2
|
0.7
|
33.4
|
25.8
|
7.6
|
Sales (million pounds
Cu)
|
122.4
|
126.5
|
(4.1)
|
33.3
|
42.7
|
(9.4)
|
*Non-GAAP performance
measure. See end of news release.
|
REVIEW OF OPERATIONS
Gibraltar Mine (75% Owned)
Operating data
(100% basis)
|
|
Q4
2019
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
Q4
2018
|
YE
2019
|
YE
2018
|
Tons mined
(millions)
|
|
25.8
|
24.7
|
26.6
|
23.3
|
28.4
|
100.4
|
111.6
|
Tons milled
(millions)
|
|
7.8
|
7.5
|
7.7
|
6.8
|
7.1
|
29.9
|
30.1
|
Strip
ratio
|
|
2.1
|
3.0
|
2.3
|
3.2
|
5.1
|
2.6
|
2.7
|
Site operating cost
per ton milled (CAD$)*
|
|
$10.46
|
$10.83
|
$11.51
|
$10.88
|
$9.16
|
$10.92
|
$9.71
|
Copper
concentrate
|
|
|
|
|
|
|
|
|
Head
grade (%)
|
|
0.253
|
0.249
|
0.256
|
0.216
|
0.222
|
0.245
|
0.251
|
Copper
recovery (%)
|
|
84.5
|
87.7
|
87.7
|
84.6
|
81.3
|
86.2
|
82.7
|
Production (million pounds Cu)
|
|
33.4
|
33.0
|
34.7
|
24.9
|
25.8
|
125.9
|
125.2
|
Sales
(million pounds Cu)
|
|
33.3
|
33.5
|
32.3
|
23.3
|
42.7
|
122.4
|
126.5
|
Inventory (million pounds Cu)
|
|
5.0
|
5.0
|
5.5
|
3.1
|
1.6
|
5.0
|
1.6
|
Molybdenum
concentrate
|
|
|
|
|
|
|
|
|
Production (thousand pounds Mo)
|
|
728
|
620
|
653
|
738
|
727
|
2,739
|
2,366
|
Sales
(thousand pounds Mo)
|
|
791
|
518
|
708
|
770
|
738
|
2,787
|
2,304
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
|
|
|
Site
operating costs*
|
|
$1.85
|
$1.88
|
$1.92
|
$2.23
|
$1.92
|
$1.95
|
$1.80
|
By-product credits*
|
|
(0.16)
|
(0.16)
|
(0.21)
|
(0.32)
|
(0.30)
|
(0.20)
|
(0.20)
|
Site operating costs,
net of by-product credits*
|
|
$1.69
|
$1.72
|
$1.71
|
$1.91
|
$1.62
|
$1.75
|
$1.60
|
Off-property
costs
|
|
0.32
|
0.33
|
0.30
|
0.30
|
0.49
|
0.31
|
0.33
|
Total operating costs
(C1)*
|
|
$2.01
|
$2.05
|
$2.01
|
$2.21
|
$2.11
|
$2.06
|
$1.93
|
OPERATIONS ANALYSIS
Full-year results
In 2019, Gibraltar produced
125.9 million pounds of copper compared to 125.2 million in 2018.
Copper grade for the year averaged 0.245% copper, slightly below
the life of mine average grade. Copper recovery for 2019 was 86.2%,
an improvement over 2018 as a result of processing improvements and
processing less oxidized ore.
A total of 100.4 million tons were mined in 2019, a 10% decrease
over the prior year due to the mining deeper within Granite pit
resulting in longer haul distances. Waste stripping costs of
$22.9 million (75% basis) were
capitalized in 2019 compared to $48.8
million in 2018 as more waste stripping was performed in the
Granite pit in the prior year.
Site operating costs* for the year were US$1.95 per pound of copper produced, an increase
from 2018, due primarily to the greater capitalization of stripping
costs in the prior year. There was also higher mining costs
per ton mined in 2019 arising from greater haulage
distances.
Molybdenum production for 2019 was 2.7 million pounds compared
to 2.4 million pounds in 2018. This additional production was
offset by a decrease in the average molybdenum price, which was
US$11.36 per pound in 2019 compared
to US$12.20 per pound in 2018. The
resulting by-product credits per pound of copper produced* of
US$0.20 remained consistent with the
prior year.
Off property costs* were US$0.31
per pound of copper produced, consistent with US$0.33 per pound produced in 2018. The
decrease was attributed to improved TCRCs on spot tenders in 2019
compared to 2018.
Total operating costs (C1)* were US$2.06 per pound of copper produced for the year
compared to $1.93 per pound in 2018
due to the difference in site operating costs as noted above.
Fourth quarter results
Copper production in the fourth quarter was 33.4 million
pounds. Copper grade for the quarter averaged 0.253%, which
was in line with the life of mine average grade. Copper
recovery in the mill was 84.5% during the quarter which was lower
than the first three quarters as a higher percentage of oxide ore
was processed. The decrease in recovery was offset by an
increase in mill throughput during the quarter.
A total of 25.8 million tons were mined during the period, an
increase of 1.1 million tons over the previous quarter and the ore
stockpile increased by 0.5 million tons. The strip ratio for
the fourth quarter was 2.1 to 1 as more mining took place in
Granite. This resulted in less overall waste stripping of
Pollyanna in the quarter.
Capitalized stripping costs totaled $4.3
million (75% basis) compared to $8.6
million in the prior quarter and $18.9 million in Q4 2018. The capitalized
stripping costs are substantially attributable to advancement into
the Pollyanna pit and associated waste stripping costs while no ore
from Pollyanna has been mined yet. Total site spending (including
capitalized stripping costs) was slightly lower than the previous
quarter. The remaining decrease in site operating cost per ton
milled*, which was $10.46 for the
quarter, was due to greater throughput.
Molybdenum production was 728 thousand pounds in the fourth
quarter. Molybdenum prices averaged US$9.67 per pound over the fourth quarter
compared to US$11.83 per pound in the
prior quarter and US$12.04 per pound
in Q4 2018. By-product credits per pound of copper produced*
was US$0.16 in the fourth
quarter.
Off-property costs per pound produced* were US$0.32 for the fourth quarter of 2019 and
consist of concentrate treatment, refining and transportation
costs. These costs are in line with recent quarters relative to
pounds of copper sold.
Health, Safety, and Environment
Health and safety have always been a high-level commitment for
Taseko, Gibraltar, and Florence
management. Taseko is committed to operational practices that
result in improved efficiencies, safety performance and
occupational health. Nothing is more important to the Company than
the safety, health and well-being of our workers and their
families.
Taseko places a high priority on the continuous improvement of
performance in the areas of employee health and safety at the
workplace and protection of the environment. In 2019,
Gibraltar had five loss time
incidents and a loss time frequency of 0.68 (per 200,000 hours
worked). This is lower than the British
Columbia industry average loss time frequency of 0.78 (per
200,000 hours worked). The Company remains committed to a culture
of safety-first, ensuring safety is the first consideration in all
actions taken.
The same priority on health, safety, and environmental
performance, as well as the methods and culture at Gibraltar are being imported and implemented
at Florence Copper.
*Non-GAAP performance
measure. See end of news release.
|
GIBRALTAR
OUTLOOK
Gibraltar is expected to
produce approximately 130 million pounds (+/-5%) on a 100% basis in
2020.
The fundamentals for copper remain strong and despite short-term
volatility caused by global events including the coronavirus, most
industry analysts are projecting a continued supply constraint and
higher copper prices than current levels in the coming years.
Expansion of overseas copper smelting capacity and tighter supply
conditions resulted in a reduced benchmark for 2020 for concentrate
treatment and refining charges ("TCRC") which were set 23% below
2019 benchmark levels.
On November 6, 2019, the Company
published an updated NI 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. Mineral Resource potential exists to
potentially further extend the mine life beyond the known
reserves.
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 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 as planned during
2019. Steady state operation was achieved 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 Florence Copper technical team is using
physical and operating control mechanisms to adjust solution
chemistry and flow rates and is successfully achieving targeted
copper concentration in solution. The PTF wellfield is performing
to its design and the SX-EW plant continues to produce LME grade A
copper cathode.
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 85 million pounds of copper cathode annually for 20
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 for the Phase 2 commercial
facility to the ADEQ. The UIC permit application for the Phase 2
commercial facility was submitted to the EPA in August 2019. Both permits are advancing through
the technical review process. The Company is in active dialogue
with the regulators and targeting to have permitting for the
commercial facility completed in 2020.
The Company has continued to advance various project financing
options from debt providers, royalty companies, and potential
joint venture partners for the Phase 2 commercial development of
the Florence Copper Project. 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 net expenditures at the Florence Project for the year
ended December 31, 2019 were
$16.0 million including the PTF
operation and other project development costs.
Yellowhead Copper Project
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.
In January 2020, the Company
announced the results of its technical studies on 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 ("Technical Report on the Mineral
Reserve Update at the Yellowhead Copper Project" dated January 16, 2020) (the "Technical Report") on
Sedar.
The updated 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 efforts in 2020 on ongoing
engagement with local communities including First Nations,
environmental assessment work, additional engineering and joint
venture partnering discussions with strategic industry offtake
groups.
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. A pilot plant scale program
commenced in the second quarter on the niobium flotation and
converter processes. The pilot plant will also provide final
product samples for marketing purposes. Aley project expenditures
for the year ended December 31, 2019
were $0.8 million.
The Company will host
a telephone conference call and live webcast on Friday, February
21, 2020 at 11:00 a.m. Eastern Time (8:00 a.m. PST, 4:00 p.m. GMT)
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 March 6, 2020 and can be accessed by dialing
(888) 390-0541 within North America or (416) 764-8677
internationally and using the passcode 966107#.
|
Russell Hallbauer
Chief Executive Officer & 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
December
31,
|
Year
ended
December
31,
|
(Cdn$ in thousands,
unless otherwise indicated) – 75% basis
|
2019
|
2018
|
2019
|
2018
|
Cost of
sales
|
97,391
|
100,543
|
368,306
|
302,648
|
Less:
|
|
|
|
|
Depletion and
amortization
|
(31,380)
|
(17,872)
|
(109,756)
|
(70,781)
|
Insurance
recovered
|
-
|
38
|
-
|
7,913
|
Net change in
inventories of finished goods
|
(1,193)
|
(20,028)
|
5,570
|
(2,435)
|
Net change in
inventories of ore stockpiles
|
1,426
|
(8,905)
|
(1,677)
|
(1,078)
|
Transportation
costs
|
(5,025)
|
(4,656)
|
(17,832)
|
(17,163)
|
Site operating
costs
|
61,219
|
49,120
|
244,611
|
219,104
|
Less by-product
credits:
|
|
|
|
|
Molybdenum,
net of treatment costs
|
(5,205)
|
(7,643)
|
(25,223)
|
(23,419)
|
Silver,
excluding amortization of deferred revenue
|
30
|
(118)
|
(557)
|
(327)
|
Site operating costs,
net of by-product credits
|
56,044
|
41,359
|
218,831
|
195,358
|
Total copper produced
(thousand pounds)
|
25,047
|
19,372
|
94,428
|
93,888
|
Total costs per pound
produced
|
2.24
|
2.13
|
2.32
|
2.08
|
Average exchange rate
for the period (CAD/USD)
|
1.32
|
1.32
|
1.33
|
1.30
|
Site operating
costs, net of by-product credits (US$ per
pound)
|
1.70
|
1.62
|
1.75
|
1.60
|
Site operating costs,
net of by-product credits
|
56,044
|
41,359
|
218,831
|
195,358
|
Add off-property
costs:
|
|
|
|
|
Treatment and
refining costs
|
5,520
|
7,764
|
21,417
|
22,381
|
Transportation
costs
|
5,025
|
4,656
|
17,832
|
17,163
|
Total operating
costs
|
66,589
|
53,779
|
258,080
|
234,902
|
Total operating
costs (C1) (US$ per pound)
|
2.01
|
2.11
|
2.06
|
1.93
|
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
December
31,
|
Year
ended
December
31,
|
($ in thousands,
except per share amounts)
|
2019
|
2018
|
2019
|
2018
|
Net
loss
|
(9,931)
|
(19,720)
|
(53,382)
|
(35,774)
|
Unrealized
foreign exchange (gain) loss
|
(5,850)
|
17,887
|
(15,228)
|
28,704
|
Unrealized
(gain) loss on copper put options
|
(518)
|
716
|
-
|
(1,970)
|
Estimated tax
effect of adjustments
|
140
|
(193)
|
-
|
532
|
Adjusted net
loss
|
(16,159)
|
(1,310)
|
(68,610)
|
(8,508)
|
Adjusted
EPS
|
(0.07)
|
(0.01)
|
(0.28)
|
(0.04)
|
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
- Amortization of share-based compensation.
|
Three months
ended
December
31,
|
Year
ended
December
31,
|
($ in
thousands)
|
2019
|
2018
|
2019
|
2018
|
Net
loss
|
(9,931)
|
(19,720)
|
(53,382)
|
(35,774)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
31,380
|
17,872
|
109,756
|
70,781
|
Finance
expense
|
10,109
|
9,691
|
40,324
|
38,564
|
Finance
income
|
(113)
|
(314)
|
(1,202)
|
(1,254)
|
Income tax
expense (recovery)
|
(7,543)
|
645
|
(32,337)
|
448
|
Unrealized
foreign exchange (gain) loss
|
(5,850)
|
17,887
|
(15,228)
|
28,704
|
Unrealized
(gain) loss on copper put options
|
(518)
|
716
|
-
|
(1,970)
|
Amortization of
share-based compensation expense (recovery)
|
712
|
(288)
|
3,126
|
(1,282)
|
Adjusted
EBITDA
|
18,246
|
26,489
|
51,057
|
98,217
|
Earnings (loss) from mining operations before depletion and
amortization
Earnings from mining operations before depletion and
amortization is earnings from mining operations with depletion and
amortization added back. The Company discloses this measure, which
has been derived from our financial statements and applied on a
consistent basis, to provide assistance in understanding the
results of the Company's operations and financial position and it
is meant to provide further information about the financial results
to investors.
|
Three months
ended
December 31,
|
Year ended
December 31,
|
(Cdn$ in
thousands)
|
2019
|
2018
|
2019
|
2018
|
Earnings (loss)
from mining operations
|
(7,459)
|
10,578
|
(39,143)
|
41,222
|
Add:
|
|
|
|
|
Depletion and
amortization
|
31,380
|
17,872
|
109,756
|
70,781
|
Earnings from
mining operations before depletion and
amortization
|
23,921
|
28,450
|
70,613
|
112,003
|
Site operating costs per ton milled
|
Three months
ended
December 31,
|
Year ended
December 31,
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2019
|
2018
|
2019
|
2018
|
Site operating
costs (included in cost of sales)
|
61,219
|
49,120
|
244,611
|
219,104
|
|
|
|
|
|
Tons milled
(thousands) (75% basis)
|
5,855
|
5,361
|
22,405
|
22,569
|
Site operating
costs per ton milled
|
$10.46
|
$9.16
|
$10.92
|
$9.71
|
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 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 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-reports-2019-fourth-quarter-and-annual-financial-results-301008850.html
SOURCE Taseko Mines Limited