VANCOUVER, BC, Dec. 20,
2022 /CNW/ - Taseko Mines Limited (TSX: TKO) (NYSE
American: TGB) (LSE: TKO) ("Taseko" or the "Company") is pleased to
announce it has signed agreements with Mitsui & Co. (U.S.A.)
Inc. ("Mitsui") to form a strategic partnership to develop the
Company's Florence Copper project (the "Project"), located in
Arizona USA.
Mitsui has committed to an initial investment of US$50 million, with proceeds to be used for
construction of the commercial production facility. The
initial investment will be in the form of a copper stream agreement
(the "Copper Stream") on 2.67% of the copper produced at Florence
Copper.
In addition, Mitsui has the option to invest an additional
US$50 million (for a total investment
of US$100 million) for a 10% equity
interest in Florence Copper (the "Equity Option"). The Equity
Option is exercisable by Mitsui within a three-year period
following completion of construction of the commercial production
facility. If Mitsui elects to exercise its Equity Option the
Copper Stream will terminate.
As part of the arrangement, Taseko and Mitsui have entered into
an offtake contract for 81% of the copper cathode produced at
Florence during the initial years
of production. The parties intend to use this period to develop
premium sales channels for 'green copper' in the United States, leveraging Mitsui's
existing US cathode trading business and the unique environmental
benefits of Florence Copper, which is expected to be the lowest
carbon- and energy-intensity copper producer in North
America.
Stuart McDonald, President &
CEO of Taseko, stated, "This agreement with Mitsui establishes a
strategic partnership with a leading international company.
Mitsui's investment will complement Taseko's financing requirements
and construction timeline and advance our goal of ensuring the
copper produced at Florence is
recognized for its unique low-carbon profile that will advantage US
manufacturers and consumers. In the future, Taseko and Mitsui
will collectively evaluate additional investments toward
establishing Florence Copper as a zero-carbon copper producer
(Scope 1 and 2)."
Sayu Ueno, President & CEO of Mitsui & Co. (U.S.A.),
commented, "We are excited to partner with Taseko and its unique,
low-carbon and low-impact Florence Copper project. When in
production, Florence Copper will significantly expand our US
cathode trading business, while providing an environmentally sound,
domestically produced product that can be marketed on the basis of
its low-carbon advantages. We believe Florence Copper will be
a preferred source of 'made-in-the-US' copper for many end users in
North America."
Transaction Details
Under the terms of the initial US$50
million Copper Stream agreement, Mitsui's first deposit
payment of US$10 million will be
available for drawdown after receipt of Florence Copper's
Underground Injection Control permit, with additional US$10 million instalments available each quarter
thereafter to fund project construction. Mitsui will receive
2.67% of the copper metal produced at Florence and pay a delivery price equal to 25%
of the market price of copper delivered under the contract.
If Mitsui elects to exercise its Equity Option and invest an
additional US$50 million in the
Project, these additional funds and the Copper Stream will be
converted into a 10% equity interest in Florence Copper. At
that time, the initial offtake agreement will cease and be replaced
with a marketing agency agreement.
If the Copper Stream is not converted into an equity interest
Taseko will have the right to buy-back 100% of the Copper Stream,
otherwise, it will terminate when 40 million pounds of copper have
been delivered under the agreement. Mitsui's offtake
entitlement would also reduce to 30% until the Copper Stream
deposit has been reduced to nil.
About Mitsui & Co.
With a long history in
the United States, Mitsui &
Co. (U.S.A.), Inc. ("Mitsui USA")
is a wholly owned subsidiary of Mitsui & Co., Ltd.,
Tokyo, Japan, one of the most
diversified and comprehensive trading, investment, and service
enterprises in the world. Mitsui & Co. pursues "360° business
innovation" that ranges from product sales, worldwide logistics and
financing, through to the development of major international
infrastructure and other projects. More information on Mitsui
USA may be found at
www.mitsui.com/us.
About Taseko
Taseko is focused on the operation and
development of copper mines in North
America. Headquartered in Vancouver, Canada, Taseko is the owner (75%)
and operator of the Gibraltar Mine, the second largest open pit
copper mine in Canada. Taseko's Florence Copper Project in
Arizona is a near-term growth
project, which will nearly double the Company's annual copper
production. Construction of Florence Copper is expected to commence
in 2023. Taseko's Yellowhead Copper Project, New Prosperity
Gold-Copper Project and Aley Niobium Project are all advanced
staged projects which provide the Company with a diverse commodity
pipeline.
Stuart McDonald
President and CEO
No regulatory authority has approved or
disapproved of the information contained in this news
release.
CAUTION REGARDING FORWARD-LOOKING
INFORMATION
This document contains "forward-looking statements" 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 future market price of copper and
the other metals that we produce or may seek to
produce;
- changes in general economic conditions, the financial
markets, inflation and interest rates and in the demand and market
price for our input costs, such as diesel fuel, reagents, 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;
- uncertainties resulting from the war in Ukraine, and the accompanying international
response including economic sanctions levied against Russia, which has disrupted the global
economy, created increased volatility in commodity markets
(including oil and gas prices), and disrupted international trade
and financial markets, all of which have an ongoing and uncertain
effect on global economics, supply chains, availability of
materials and equipment and execution timelines for project
development;
- uncertainties about the continuing impact of the novel
coronavirus ("COVID-19") and the response of local, provincial,
state, federal and international governments to the ongoing threat
of COVID-19, on our operations (including our suppliers, customers,
supply chains, employees and contractors) and economic conditions
generally including rising inflation levels and in particular with
respect to the demand for copper and other metals we
produce;
- inherent risks associated with mining operations,
including our current mining operations at Gibraltar, and their potential impact on our
ability to achieve our production estimates;
- uncertainties as to our ability to control our operating
costs, including inflationary cost pressures at Gibraltar without impacting our planned copper
production;
- the risk of inadequate insurance or inability to obtain
insurance to cover material mining or operational
risks;
- uncertainties related to the feasibility study for
Florence copper project (the
"Florence Copper Project" or "Florence Copper") that provides
estimates of expected or anticipated capital and operating costs,
expenditures and economic returns from this mining project,
including the impact of inflation on the estimated costs related to
the construction of the Florence Copper Project and our other
development projects;
- the risk that the results from our operations of the
Florence Copper production test facility ("PTF") and ongoing
engineering work including updated capital and operating costs will
negatively impact our estimates for current projected economics for
commercial operations at Florence Copper;
- uncertainties related to the accuracy of our estimates of
Mineral Reserves (as defined below), Mineral Resources (as defined
below), production rates and timing of production, future
production and future cash and total costs of production and
milling;
- the risk that we may not be able to expand or replace
reserves as our existing mineral reserves are mined;
- the availability of, and uncertainties relating to the
development of, additional financing and infrastructure necessary
for the advancement of our development projects, including with
respect to our ability to obtain any remaining construction
financing potentially needed to move forward with commercial
operations at Florence Copper;
- our ability to comply with the extensive governmental
regulation to which our business is subject;
- uncertainties related to our ability to obtain necessary
title, licenses and permits for our development projects and
project delays due to third party opposition, particularly in
respect to Florence Copper that requires one key regulatory permit
from the U.S. Environmental Protection Agency
("EPA") in order to advance to commercial
operations;
- our ability to deploy strategic capital and award key
contracts to assist with protecting the Florence Copper project
execution plan, mitigating inflation risk and the potential impact
of supply chain disruptions on our construction schedule and
ensuring a smooth transition into construction once the final
permit is received from the EPA;
- uncertainties related to First Nations claims and
consultation issues;
- our reliance on rail transportation and port terminals
for shipping our copper concentrate production from Gibraltar;
- 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 and mine closure and bonding
requirements;
- our dependence solely on our 75% interest in Gibraltar (as defined below) for revenues and
operating cashflows;
- our ability to collect payments from customers, extend
existing concentrate off-take agreements or enter into new
agreements;
- environmental issues and liabilities associated with
mining including processing and stock piling ore;
- labour strikes, work stoppages, or other interruptions
to, or difficulties in, the employment of labour in markets in
which we operate our mine, industrial accidents, equipment failure
or other events or occurrences, including third party interference
that interrupt the production of minerals in our mine;
- environmental hazards and risks associated with climate
change, including the potential for damage to infrastructure and
stoppages of operations due to forest fires, flooding, drought, or
other natural events in the vicinity of our operations;
- litigation risks and the inherent uncertainty of
litigation, including litigation to which Florence Copper could be
subject to;
- our actual costs of reclamation and mine closure may
exceed our current estimates of these liabilities;
- our ability to meet the financial reclamation security
requirements for the Gibraltar
mine and Florence Project;
- the capital intensive nature of our business both to
sustain current mining operations and to develop any new projects,
including Florence Copper;
- our reliance upon key management and operating
personnel;
- the competitive environment in which we
operate;
- the effects of forward selling instruments to protect
against fluctuations in copper prices, foreign exchange, interest
rates or input costs such as fuel;
- 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; and
Management Discussion and Analysis ("MD&A"), quarterly reports
and material change reports filed with and furnished to securities
regulators, and those risks which are discussed under the heading
"Risk Factors".
For further information on Taseko, investors should review
the Company's annual Form 40-F filing with the United States
Securities and Exchange Commission www.sec.gov and home
jurisdiction filings that are available at www.sedar.com, including
the "Risk Factors" included in our Annual Information
Form.
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SOURCE Taseko Mines Limited