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.
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.
|
VANCOUVER, BC, Feb. 24, 2021 /CNW/ - Taseko Mines Limited (TSX:
TKO) (NYSE American: TGB) (LSE: TKO) ("Taseko" or the "Company")
reports full-year 2020 earnings from mining operations before
depletion and amortization* of $119
million and Adjusted EBITDA* of $108
million. For the year, the Company had a Net Loss of
$24 million, or $0.09 loss per share.
Russell Hallbauer, CEO and
Director, commented, "We have witnessed a remarkable recovery in
the copper market since March of last year. The price of copper has
more than doubled in that time and even since the end of 2020, the
price has climbed a further US$0.70
per pound. Last year, Gibraltar
produced 123 million pounds of copper, and our 2021 production
estimate is slightly higher at 125 million pounds. Gibraltar has been Taseko's cornerstone asset
for over 15 years, generating positive cash flow through the copper
price cycles, but it is times like this that we truly benefit from
the leverage to copper from our large, steady-state production
base. At current copper prices, which are now more than
US$1.40 per pound higher than last
year's average, we would have generated roughly $275 million of adjusted EBITDA* in 2020."
"Copper production in the fourth quarter was 25 million pounds,
which was below prior quarters due to lower grade and harder ore as
mining transitioned into the Pollyanna pit. Mine-to-mill
adjustments were made during the fourth quarter and throughput
returned to design capacity in December. The Pollyanna pit, which
is about 4% lower grade than the reserve grade, will be the main
source of ore for the first half of 2021. In the second half of the
year, ore mining will commence in the Gibraltar pit, which is higher grade and has a
lower work index (softer ore)," added Mr. Hallbauer.
Stuart McDonald, President of
Taseko, continued, "The $108 million
of adjusted EBITDA* and $106 million
of operating cash flow we generated in 2020 was a tremendous
accomplishment and demonstrates the resiliency of our operation in
the face of a global pandemic and volatile economic
environment.
Our successes, however, were not limited to Gibraltar. At Florence Copper we have achieved
key milestones in recent months which have de-risked the project
considerably. We received the state permit in December and we
continue to expect the federal permit from the EPA in the coming
months. And in February we completed a successful US$400 million bond refinancing which was upsized
to provide financing for development of the commercial facility at
Florence. We now have a cash
balance of approximately US$200
million and with the majority of required funding in hand we
are moving forward with final design engineering and procurement
initiatives. This work will facilitate a seamless construction
start up and we will move forward expeditiously with on-the-ground
construction activities as soon as we have the final permits in
place."
*Non-GAAP performance
measure. See end of news release.
|
"2021 will be a transformational year for Taseko as we take the
final steps to unlock the full value of Florence and pave the way to becoming a
multi-asset copper producer. The addition of Florence will increase Taseko's attributable
annual copper production by 85% to approximately 185 million
pounds. Florence production will
also significantly reduce Taseko's consolidated operating costs
given its expected C1 operating costs of US$0.90 per pound of copper. With increased
investor focus on sustainability and environmental footprint, we
are very proud of the fact that Florence Copper will also be one of
the greenest copper production facilities in the world and will
provide high quality copper to the US domestic market in support of
its green infrastructure and electrification initiatives in the
years to come," concluded Mr. McDonald.
2020 Annual Review
- Earnings from mining operations before depletion and
amortization* was $119.0 million and
Adjusted EBITDA* was $108.2
million;
- Cash flows from operations was $106.2
million, compared to $42.6
million in the prior year;
- In response to the COVID-19 pandemic management implemented a
number of cost saving initiatives in 2020, including a revised mine
plan for Gibraltar, which reduced
total site operating costs by $28.2
million compared to 2019. Site operating costs, net of
by-product credits* was US$1.62 per
pound produced, and total operating costs (C1)* was US$1.92 per pound produced;
- The Gibraltar mine operated
continuously through the year and produced 123.0 million pounds of
copper and 2.3 million pounds of molybdenum (100% basis). Copper
recoveries were 84.3% and copper head grades for the year were
0.243%;
- 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 and refining costs in 2021,
reflecting the continued tight physical copper concentrate market
conditions and the strategic demand for Gibraltar's high-quality concentrates;
- On November 17, 2020, Taseko
closed an offering of common shares for net proceeds of
$34.3 million;
- On February 10, 2021, Taseko
closed an offering of US$400 million
7% Senior Secured Notes due 2026. A portion of the proceeds will be
used to redeem all of the outstanding US$250
million 8.75% Senior Secured Notes due 2022 on March 3, 2021, including accrued interest and
transaction costs;
- The Company's cash balance at December
31, 2020 was $85.1 million,
and the bond refinancing transaction in February 2021 provided additional net cash
proceeds of $167 million (or
US$131 million);
- Copper prices have recovered strongly and the current price of
over US$4.20 per pound is
significantly higher than the average LME price of $2.80 per pound in 2020; and
- The Arizona Department of Environmental Quality ("ADEQ") issued
the Aquifer Protection Permit ("APP") for Florence Copper on
December 8, 2020. The Company is now
moving forward with final design engineering of the Florence commercial production facility and
procurement of certain critical components.
*Non-GAAP performance
measure. See end of news release.
|
Fourth Quarter Review
- Fourth quarter earnings from mining operations before depletion
and amortization* was $27.1 million,
and Adjusted EBITDA* was $20.5
million;
- Cash flow from operations was $20.4
million;
- The Gibraltar mine produced
25.0 million pounds of copper in the fourth quarter. Copper
recoveries were 83.3% and copper head grades were 0.201%;
- Gibraltar sold 25.0 million
pounds of copper in the quarter (100% basis) which resulted in
$85.9 million of revenue for Taseko.
Average LME copper prices were US$3.25 per pound in the quarter and revenue also
included positive provisional price adjustments of $8.4 million; and
- Net income (GAAP) for the fourth quarter was $5.7 million ($0.02
per share). Adjusted net loss* was $7.5
million ($0.03 loss per
share).
HIGHLIGHTS
Financial
Data
|
Year ended
December 31,
|
Three Months
ended
December 31,
|
(Cdn$ in thousands,
except for per share amounts)
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Revenues
|
343,267
|
329,163
|
14,104
|
87,398
|
89,932
|
(2,534)
|
Earnings from mining
operations before depletion
and amortization*
|
119,026
|
70,613
|
48,413
|
27,062
|
23,921
|
3,141
|
Adjusted
EBITDA*
|
108,229
|
51,057
|
57,172
|
20,478
|
18,246
|
2,232
|
Cash flows provided
by operations
|
106,195
|
42,641
|
63,554
|
20,424
|
9,227
|
11,197
|
Earnings (loss) from
mining operations
|
23,725
|
(39,143)
|
62,868
|
8,315
|
(7,459)
|
15,774
|
Net income
(loss)
|
(23,524)
|
(53,382)
|
29,858
|
5,694
|
(9,931)
|
15,625
|
Per share - basic
("EPS")
|
(0.09)
|
(0.22)
|
0.13
|
0.02
|
(0.04)
|
0.06
|
Adjusted net
loss*
|
(26,539)
|
(68,610)
|
42,071
|
(7,473)
|
(16,159)
|
8,686
|
Per share - basic
("Adjusted EPS")*
|
(0.11)
|
(0.28)
|
0.17
|
(0.03)
|
(0.07)
|
0.04
|
Operating Data
(Gibraltar - 100% basis)
|
Year ended
December 31,
|
Three Months
ended
December 31,
|
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Tons mined
(millions)
|
98.7
|
100.4
|
(1.7)
|
26.4
|
25.8
|
0.6
|
Tons milled
(millions)
|
30.1
|
29.9
|
0.2
|
7.5
|
7.8
|
(0.3)
|
Production (million
pounds Cu)
|
123.0
|
125.9
|
(2.9)
|
25.0
|
33.4
|
(8.4)
|
Sales (million pounds
Cu)
|
124.0
|
122.4
|
1.6
|
25.0
|
33.3
|
(8.3)
|
*Non-GAAP performance
measure. See end of news release.
|
REVIEW OF OPERATIONS
Gibraltar mine (75%
Owned)
Operating data
(100% basis)
|
Q4
2020
|
Q3
2020
|
Q2
2020
|
Q1
2020
|
Q4
2019
|
YE
2020
|
YE
2019
|
Tons mined
(millions)
|
26.4
|
23.3
|
20.5
|
28.5
|
25.8
|
98.7
|
100.4
|
Tons milled
(millions)
|
7.5
|
7.5
|
7.7
|
7.5
|
7.8
|
30.1
|
29.9
|
Strip
ratio
|
1.9
|
1.5
|
1.9
|
2.7
|
2.1
|
2.0
|
2.6
|
Site operating cost
per ton milled (CAD$)*
|
$11.67
|
$9.57
|
$7.66
|
$9.52
|
$10.46
|
$9.59
|
$10.92
|
Copper
concentrate
|
|
|
|
|
|
|
|
Head grade
(%)
|
0.201
|
0.228
|
0.281
|
0.259
|
0.253
|
0.243
|
0.245
|
Copper recovery
(%)
|
83.3
|
85.0
|
85.2
|
83.4
|
84.5
|
84.3
|
86.2
|
Production (million
pounds Cu)
|
25.0
|
28.9
|
36.8
|
32.4
|
33.4
|
123.0
|
125.9
|
Sales (million pounds
Cu)
|
25.0
|
28.6
|
39.3
|
31.1
|
33.3
|
124.0
|
122.4
|
Inventory (million
pounds Cu)
|
3.4
|
3.6
|
3.8
|
6.4
|
5.0
|
3.4
|
5.0
|
Molybdenum
concentrate
|
|
|
|
|
|
|
|
Production (thousand
pounds Mo)
|
549
|
668
|
639
|
412
|
728
|
2,269
|
2,739
|
Sales (thousand pounds
Mo)
|
487
|
693
|
656
|
403
|
791
|
2,239
|
2,787
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
|
|
Site operating
costs*
|
$2.67
|
$1.85
|
$1.15
|
$1.64
|
$1.85
|
$1.75
|
$1.95
|
By-product
credits*
|
(0.14)
|
(0.14)
|
(0.11)
|
(0.11)
|
(0.16)
|
(0.13)
|
(0.20)
|
Site operating costs,
net of by-product credits*
|
$2.53
|
$1.71
|
$1.04
|
$1.53
|
$1.69
|
$1.62
|
$1.75
|
Off-property
costs
|
0.29
|
0.29
|
0.30
|
0.29
|
0.32
|
0.30
|
0.31
|
Total operating costs
(C1)*
|
$2.82
|
$2.00
|
$1.34
|
$1.82
|
$2.01
|
$1.92
|
$2.06
|
OPERATIONS ANALYSIS
Full-year 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 2020, Gibraltar produced
123.0 million pounds of copper compared to 125.9 million in 2019.
Copper grade for the year averaged 0.243% copper which was
consistent with 2019. Copper recovery for 2020 was 84.3% and was
affected by higher iron content in the ore in the first quarter and
increased oxide ore and ore hardness in the initial Pollyanna Pit
benches in the fourth quarter.
*Non-GAAP performance
measure. See end of news release.
|
A total of 98.7 million tons were mined in 2020, a slight
decrease over the prior year. In response to COVID-19, management
implemented a revised mining plan in March
2020 that reduced operating costs over the second and third
quarters of 2020 while still maintaining long-term mine plan
requirements. Site operating costs, net of by-product credit for
the year were US$1.62 per pound of
copper produced, a decrease of US$0.13 per pound from 2019.
The strip ratio for the year was 2.0 to 1 compared to 2.6 to 1
in 2019 reflecting the revised mine plan. In addition, ore
stockpiles increased over 2020 by 3.0 million tons from initial
mining of ore in Pollyanna.
Molybdenum by-product credits per pound of copper produced* were
US$0.13, compared to US$0.20 in the prior year. The decrease was due
to a drop in the average molybdenum price, which was US$8.68 per pound in 2020 compared to
US$11.36 per pound in 2019.
Molybdenum production for 2020 was 2.3 million pounds and 0.4
million pounds lower than in 2019.
Off-property costs per pound produced* were US$0.30 in 2020 and consist of concentrate
treatment, refining and transportation costs. These costs are in
line with the prior year on a per pound basis.
Total operating costs per pound produced (C1)* were US$1.92 for the year compared to US$2.06 in 2019 due to the reduction in site
spending.
Fourth quarter results
Copper production in the fourth quarter was 25.0 million pounds
and was impacted by lower mined ore grades in November and
December. Mining in the Granite pit was completed in early
October 2020. Additionally, increased
oxide ore and ore hardness in the initial Pollyanna Pit benches
affected recoveries and throughput in the fourth quarter.
Total site spending (including capitalized stripping) was
consistent with the fourth quarter of 2019 as the mining rate
returned to normal levels. The strip ratio for the fourth quarter
was 1.9 to 1 consistent with the average for the year. Capital
expenditures in the fourth quarter included costs associated with
the dewatering system for the Gibraltar pit.
Molybdenum production was 549 thousand pounds in the fourth
quarter, a decrease from the prior quarter due to lower molybdenum
grade, which also decreased recovery. Molybdenum prices continued
their recovery in the fourth quarter and averaged US$9.01 per pound but were still lower compared
to US$9.67 per pound in Q4 2019.
By-product credits per pound of copper produced* was US$0.14 in the fourth quarter.
Off-property costs per pound produced* were US$0.29 for the fourth quarter and
consistent with prior quarters.
Total operating costs (C1)* costs were US$2.82 per pound produced for the quarter. In
addition to fewer copper pounds being produced in the fourth
quarter, contributing to the increase in C1* costs was a decrease
in capitalized stripping costs which was only $1.2 million compared to $3.6 million in the third quarter, higher
operating costs due to mining rates returning to normal levels and
a strengthening Canadian dollar.
*Non-GAAP performance
measure. See end of news release.
|
ENVIRONMENT, SOCIAL AND GOVERNANCE
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.
Nothing is more important to Taseko than the safety, health and
well-being of our workers and their families. Taseko is committed
to operational practices that result in improved efficiencies,
safety performance and occupational health.
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 2020, Gibraltar's days lost, loss time incidents,
lost time frequency, and loss time severity were all zero. The
British Columbia mining industry
averages for 2020 were 0.68 for loss time frequency (per 200,000
hours worked) and 105.7 for loss time severity.
The same priority on health, safety, and environmental
performance, as well as the methods and culture at Gibraltar are being implemented at Florence
Copper as it prepares for construction.
GIBRALTAR
OUTLOOK
Gibraltar is expected to
produce approximately 125 million pounds on a 100% basis in 2021,
compared to 123 million pounds in 2020. Copper prices are currently
over US$4.20 per pound, compared to
the average LME copper price of $2.80
per pound in 2020. Molybdenum prices are currently 44% higher than
the average price in 2020. All of these factors are supportive of
improved financial performance at the Gibraltar mine in 2021.
With a strong copper price backdrop, mining rates have returned
to more normal levels. Mining has transitioned to the Pollyanna pit
which will be the main source of ore in 2021. Copper production is
expected to be greater in the second half of 2021 as higher grade
areas in Pollyanna are opened up. Mining of the Gibraltar pit will commence in the first part
of 2021 with ore release commencing in the second half of the year.
Ore from the Gibraltar pit is
relatively softer and is expected to require less energy to grind,
which will provide opportunities for increased mill throughput in
the future.
Copper prices have recovered swiftly since March 2020 and are reaching multi-year highs 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 economic recovery after the
pandemic, including green initiatives, which will require new
primary supplies of copper. Most industry analysts are projecting
ongoing supply constraints and deficits, which should support
higher copper prices in the years to come.
FLORENCE COPPER
Florence Copper represents a low-cost growth project that will
have an annual production capacity of 85 million pounds of copper
over a 21-year mine life, and with the expected C1 operating cost
of US$0.90 per pound puts Florence
Copper in the lowest quartile of the global copper cost curve. The
commercial production facility at Florence will also be one of the greenest
sources of mined copper, with carbon emissions, water and energy
consumption all dramatically lower than a conventional mine. We
have successfully operated a Production Test Facility ("PTF") for
the last two years at Florence to
demonstrate that the in-situ copper recovery ("ISCR") process can
produce high quality cathode while operating within permit
conditions.
The next phase of Florence Copper will include the construction
and operation of the commercial ISCR facility with an estimated
capital cost of US$230 million
(including reclamation bonding and working capital). At a long-term
copper price of US$3.00 per pound,
Florence Copper is expected to generate an after-tax internal rate
of return of 37%, an after-tax net present value of US$680 million at a 7.5% discount rate, and an
after-tax payback period of 2.5 years.
On December 8, 2020, the Company received the Aquifer
Protection Permit ("APP") permit from the Arizona Department of
Environmental Quality ("ADEQ"). The APP permit was issued following
a public comment period and public hearing in August 2020 where the project received strong
support from local community members, business owners and elected
officials. The other required permit is the Underground Injection
Control ("UIC") Permit from the U.S. Environmental Protection
Agency ("EPA"). The EPA's technical review for the UIC permit has
identified no significant issues and the Company expects to receive
this permit in the coming months.
With the recently concluded equity and bond financings, the
Company now has the majority of the required Florence Copper
construction funding in hand. Discussions with potential joint
venture partners continue to advance, and with the improved
cash position and stronger expected cash flows from Gibraltar due to higher prevailing copper
prices, the Company has numerous options available to obtain the
remaining funding.
Management is now moving forward with final design engineering
for the commercial production facility as well as procurement of
certain long-lead critical components.
LONG-TERM GROWTH STRATEGY
Taseko's strategy has been to grow the Company by acquiring and
developing a pipeline of complimentary projects focused on copper
in stable mining jurisdictions. We continue to believe this will
generate long-term returns for shareholders. Our other development
projects are focused primarily on copper and are located in
British Columbia.
Yellowhead Copper Project
Yellowhead Mining Inc. ("Yellowhead") has an 817 million tonnes
reserve and a 25-year mine life with a pre-tax net present value of
$1.3 billion at an 8% discount rate
using a US$3.10 per pound long-term
copper price. 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 significant copper offtake rights.
New Prosperity Gold-Copper Project
In late 2019 the Tŝilhqot'in Nation, as represented by
Tŝilhqot'in National Government, and Taseko entered into a
confidential 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 Tŝilhqot'in Nation's opposition to the
project. The dialogue was supported by the parties' agreement on
December 7, 2019, to a one-year
standstill on certain outstanding litigation and regulatory matters
that relate to Taseko's tenures and the area in the vicinity of
Teztan Biny (Fish Lake).
The COVID-19 pandemic delayed the commencement of the dialogue
for several months, but the Tŝilhqot'in Nation and Taseko have made
progress in establishing a constructive dialogue. In December 2020 they agreed to extend the
standstill for a further year so they can continue this
dialogue.
Aley Niobium Project
Environmental monitoring and product marketing initiatives on
the Aley Niobium project continue. The pilot plant program has
successfully completed the niobium flotation process portion of the
test, raising confidence in the design and providing feed to the
converter portion of the process. Completion of the converter pilot
test, 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.
The Company will host
a telephone conference call and live webcast on Thursday, February
25, 2021 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time, 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
11, 2021 and can be accessed by dialing (888) 390-0541 within North
America or (416) 764-8677 internationally and using the passcode
585262 #.
|
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
December
31,
|
Year
ended
December
31,
|
(Cdn$ in thousands,
unless otherwise indicated) – 75% basis
|
2020
|
2019
|
2020
|
2019
|
Cost of
sales
|
79,083
|
97,391
|
319,542
|
368,306
|
Less:
|
|
|
|
|
Depletion and
amortization
|
(18,747)
|
(31,380)
|
(95,301)
|
(109,756)
|
Net change in
inventories of finished goods
|
2,087
|
(1,193)
|
(939)
|
5,570
|
Net change in
inventories of ore stockpiles
|
6,632
|
1,426
|
11,361
|
(1,677)
|
Transportation
costs
|
(3,768)
|
(5,025)
|
(18,248)
|
(17,832)
|
Site operating
costs
|
65,287
|
61,219
|
216,415
|
244,611
|
Less by-product
credits:
|
|
|
|
|
Molybdenum, net of
treatment costs
|
(3,649)
|
(5,205)
|
(15,241)
|
(25,223)
|
Silver, excluding
amortization of deferred revenue
|
133
|
30
|
(303)
|
(557)
|
Site operating costs,
net of by-product credits
|
61,771
|
56,044
|
200,871
|
218,831
|
Total copper produced
(thousand pounds)
|
18,725
|
25,047
|
92,277
|
94,428
|
Total costs per pound
produced
|
3.30
|
2.24
|
2.18
|
2.32
|
Average exchange rate
for the period (CAD/USD)
|
1.30
|
1.32
|
1.34
|
1.33
|
Site operating
costs, net of by-product credits (US$ per pound)
|
2.53
|
1.69
|
1.62
|
1.75
|
Site operating costs,
net of by-product credits
|
61,771
|
56,044
|
200,871
|
218,831
|
Add off-property
costs:
|
|
|
|
|
Treatment and refining
costs
|
3,284
|
5,520
|
18,169
|
21,417
|
Transportation
costs
|
3,768
|
5,025
|
18,248
|
17,832
|
Total operating
costs
|
68,823
|
66,589
|
237,288
|
258,080
|
Total operating
costs (C1) (US$ per pound)
|
2.82
|
2.01
|
1.92
|
2.06
|
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
December
31,
|
Year
ended
December
31,
|
(Cdn$ in thousands,
except per share amounts)
|
2020
|
2019
|
2020
|
2019
|
Net income
(loss)
|
5,694
|
(9,931)
|
(23,524)
|
(53,382)
|
Unrealized foreign
exchange gain
|
(13,595)
|
(5,850)
|
(4,345)
|
(15,228)
|
Unrealized (gain) loss
on copper put and fuel call options
|
586
|
(518)
|
1,822
|
-
|
Estimated tax effect
of adjustments
|
(158)
|
140
|
(492)
|
-
|
Adjusted net
loss
|
(7,473)
|
(16,159)
|
(26,539)
|
(68,610)
|
Adjusted
EPS
|
(0.03)
|
(0.07)
|
(0.11)
|
(0.28)
|
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
December
31,
|
Year
ended
December
31,
|
(Cdn$ in
thousands)
|
2020
|
2019
|
2020
|
2019
|
Net income
(loss)
|
5,694
|
(9,931)
|
(23,524)
|
(53,382)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
18,747
|
31,380
|
95,301
|
109,756
|
Finance
expense
|
10,575
|
10,109
|
43,010
|
40,324
|
Finance
income
|
(47)
|
(113)
|
(249)
|
(1,202)
|
Income tax
recovery
|
(2,724)
|
(7,543)
|
(9,096)
|
(32,337)
|
Unrealized foreign
exchange gain
|
(13,595)
|
(5,850)
|
(4,345)
|
(15,228)
|
Unrealized (gain) loss
on copper put and fuel call options
|
586
|
(518)
|
1,822
|
-
|
Amortization of
share-based compensation expense
|
1,242
|
712
|
5,310
|
3,126
|
Adjusted
EBITDA
|
20,478
|
18,246
|
108,229
|
51,057
|
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)
|
2020
|
2019
|
2020
|
2019
|
Earnings (loss)
from mining operations
|
8,315
|
(7,459)
|
23,725
|
(39,143)
|
Add:
|
|
|
|
|
Depletion and
amortization
|
18,747
|
31,380
|
95,301
|
109,756
|
Earnings from
mining operations before depletion
and
amortization
|
27,062
|
23,921
|
119,026
|
70,613
|
Site operating costs per ton milled
|
Three months
ended
December 31,
|
Year ended
December 31,
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2020
|
2019
|
2020
|
2019
|
Site operating
costs (included in cost of sales)
|
65,287
|
61,219
|
216,415
|
244,611
|
|
|
|
|
|
Tons
milled (thousands) (75% basis)
|
5,594
|
5,855
|
22,559
|
22,405
|
Site operating
costs per ton milled
|
$11.67
|
$10.46
|
$9.59
|
$10.92
|
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-108-million-of-adjusted-ebitda-for-2020-301235074.html
SOURCE Taseko Mines Limited