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 and sales volumes stated in this release are
on a 100% basis unless otherwise indicated.
|
VANCOUVER, BC, Nov. 3, 2022 /CNW/ - Taseko Mines Limited (TSX:
TKO) (NYSE American: TGB) (LSE: TKO) ("Taseko" or the "Company")
reports Adjusted EBITDA* of $34.0
million and Adjusted net income* of $4.5 million, or $0.02 per share for the third quarter 2022. Cash
flows provided by operations was $12.1
million and Earnings from mining operations before
depletion* was $18.6 million.
Stuart McDonald, President and
CEO of Taseko, stated, "Strong financial performance in the third
quarter was driven by a nearly 40% increase in copper production at
Gibraltar. Head grades and copper
production have continued to improve as mining advances deeper into
the Gibraltar pit. Higher
throughput due to the softer ore in the new pit also benefited
production with average daily mill throughput of 89,400 tons in the
third quarter. This was the highest quarterly mill throughput at
Gibraltar since the expansion ten
years ago, and we continue to see the potential for further
increases. Combined with higher grades, production in the quarter
was 28.3 million pounds of copper and 324 thousand pounds of
molybdenum. For the fourth quarter, we anticipate approximately a
10% increase in production, and more stable production levels in
the coming quarters."
"Our unit operating costs declined by 22% quarter-over-quarter,
as result of increased production and lower site spending. But
operating costs are still being impacted by diesel prices which are
~55% higher than in 2021. During the third quarter, we purchased
diesel call options which will protect the Company from further
diesel price escalation through June
2023," added Mr. McDonald.
"The average realized copper price for the period was
US$3.48 per pound and was supported
by our pricing and hedging strategy. We realized proceeds of
$18.6 million in the quarter from
copper put options, and going forward, we have protected a
substantial portion of future sales at a minimum price of
US$3.75 per pound through
June 2023. Given that we expect
Florence construction to be
underway next year, we are looking for a market opportunity to
extend our put position into the second half of 2023," continued
Mr. McDonald.
"At our Florence Copper Project, we made important steps towards
completion of the review process for the Underground Injection
Control ("UIC") permit. The US Environmental Protection Agency
("EPA") issued the draft UIC permit in August and the subsequent
public comment period and public hearing confirmed overwhelming
support for the project from residents of the town of Florence and surrounding areas. We're
confident that all submitted comments will be fully addressed by
the EPA, and we look forward to receiving the final UIC permit and
getting started on construction of the commercial production
facility. Deliveries of major components for the SX-EW plant
and other long-lead items continued through the third quarter and
should be complete by year-end." continued Mr. McDonald.
Third Quarter Review
- Third quarter Adjusted EBITDA* was $34.0
million, earnings from mining operations before depletion
and amortization* was $18.6 million,
and Adjusted net income* was $4.5
million ($0.02 per
share);
- On September 29, 2022, the EPA
concluded its 45-day public comment period for the draft
Underground Injection Control permit for Florence Copper. The
project received overwhelming support from business organizations,
community leaders and state-wide organizations in written
submissions and as voiced at the public hearing;
- Gibraltar produced 28.3
million pounds of copper for the quarter. Head grades improved over
the first half of the year to 0.22% but were still impacted by
higher than normal mining dilution;
- Mill throughput exceeded nameplate capacity at an average rate
of 89,400 tons per day in the quarter due to the softer ore from
the Gibraltar pit. Copper
recoveries were 77.1% for the quarter and were primarily impacted
by the lower head grade;
- Total site costs* in the third quarter decreased from the
previous quarters of 2022 but remained elevated compared to 2021
primarily due to higher diesel prices;
- Gibraltar sold 26.7 million
pounds of copper in the quarter (100% basis) at an average realized
copper price of US$3.48 per
pound;
- GAAP net loss was $23.5 million
($0.08 loss per share) and reflected
unrealized foreign exchange losses of $28.1
million on the translation of the Company's US dollar
denominated debt;
- Cash flow from operations was $12.1
million which did not include $18.6
million in cash proceeds realized from copper put option
contracts in the quarter;
- The Company has copper collar contracts in place to protect a
minimum copper price of US$3.75 per
pound until mid-2023. The Company also has 18 million litres of
fuel call options in place to provide a ceiling cost for its share
of diesel over the same period;
- Development costs incurred for Florence Copper were
$27.3 million in the quarter and
included further payments for the major processing equipment being
delivered for the SX/EW plant, other pre-construction activities
and ongoing site costs; and
- The Company had a cash balance of $142
million and has approximately $210
million of available liquidity at September 30, 2022, including its undrawn
US$50 million revolving credit
facility.
*Non-GAAP performance
measure. See end of news release
|
HIGHLIGHTS
Operating Data
(Gibraltar - 100% basis)
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Tons mined
(millions)
|
23.2
|
25.2
|
(2.0)
|
65.7
|
82.1
|
(16.4)
|
Tons milled
(millions)
|
8.2
|
7.4
|
0.8
|
23.0
|
21.9
|
1.1
|
Production (million
pounds Cu)
|
28.3
|
34.5
|
(6.2)
|
70.3
|
83.5
|
(13.2)
|
Sales (million pounds
Cu)
|
26.7
|
32.4
|
(5.7)
|
75.8
|
81.1
|
(5.3)
|
Financial
Data
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
(Cdn$ in thousands,
except for per share amounts)
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Revenues
|
89,714
|
132,563
|
(42,849)
|
290,991
|
330,306
|
(39,315)
|
Earnings from mining
operations before depletion and
amortization*
|
18,570
|
83,681
|
(65,111)
|
68,564
|
168,476
|
(99,912)
|
Cash flows provided by
operations
|
12,115
|
68,319
|
(56,204)
|
82,212
|
137,538
|
(55,326)
|
Adjusted
EBITDA*
|
34,031
|
76,291
|
(42,260)
|
73,854
|
147,745
|
(73,891)
|
Adjusted net income
(loss)*
|
4,513
|
27,020
|
(22,507)
|
(5,423)
|
31,433
|
(36,856)
|
Per share - basic
("adjusted EPS")*
|
0.02
|
0.10
|
(0.08)
|
(0.02)
|
0.11
|
(0.13)
|
Net income (loss)
(GAAP)
|
(23,517)
|
22,485
|
(46,002)
|
(23,696)
|
24,710
|
(48,406)
|
|
*Non-GAAP performance
measure. See end of news release
|
REVIEW OF OPERATIONS
Gibraltar mine (75%
Owned)
|
|
|
|
|
|
|
Operating data (100%
basis)
|
|
Q3
2022
|
Q2
2022
|
Q1
2022
|
Q4
2021
|
Q3
2021
|
Tons mined
(millions)
|
|
23.2
|
22.3
|
20.3
|
23.3
|
25.2
|
Tons milled
(millions)
|
|
8.2
|
7.7
|
7.0
|
7.4
|
7.4
|
Strip ratio
|
|
1.5
|
2.8
|
2.6
|
2.2
|
1.3
|
Site operating cost per
ton milled (Cdn$)*
|
|
$11.33
|
$11.13
|
$11.33
|
$9.94
|
$8.99
|
Copper
concentrate
|
|
|
|
|
|
|
Head grade
(%)
|
|
0.22
|
0.17
|
0.19
|
0.24
|
0.28
|
Copper
recovery (%)
|
|
77.1
|
77.3
|
80.2
|
80.4
|
84.2
|
Production
(million pounds Cu)
|
|
28.3
|
20.7
|
21.4
|
28.8
|
34.5
|
Sales
(million pounds Cu)
|
|
26.7
|
21.7
|
27.4
|
23.8
|
32.4
|
Inventory
(million pounds Cu)
|
|
4.2
|
2.7
|
4.0
|
9.9
|
4.9
|
Molybdenum
concentrate
|
|
|
|
|
|
|
Production
(thousand pounds Mo)
|
|
324
|
199
|
236
|
450
|
571
|
Sales
(thousand pounds Mo)
|
|
289
|
210
|
229
|
491
|
502
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
|
Site
operating costs*
|
|
$2.52
|
$3.25
|
$2.95
|
$2.02
|
$1.53
|
By-product
credits*
|
|
(0.15)
|
(0.15)
|
(0.18)
|
(0.30)
|
(0.25)
|
Site operating costs,
net of by-product credits*
|
|
$2.37
|
$3.10
|
$2.77
|
$1.72
|
$1.28
|
Off-property
costs
|
|
0.35
|
0.37
|
0.36
|
0.22
|
0.29
|
Total operating costs
(C1)*
|
|
$2.72
|
$3.47
|
$3.13
|
$1.94
|
$1.57
|
Third Quarter Review
Gibraltar produced 28.3 million
pounds of copper for the quarter, a 37% increase over the second
quarter. Head grades improved over the first half of the year to
0.22% but still were impacted by higher than normal mining
dilution. Grades are expected to continue improving into the fourth
quarter as mining advances deeper into the Gibraltar pit, and a number of initiatives are
underway to reduce the above normal mining dilution being
experienced in this pit.
Mill throughput averaged 89,400 tons per day exceeding the name
plate capacity by 5% and the best quarterly average for
Gibraltar. Copper recoveries of
77% were primarily impacted by the lower grade and are also
expected to improve as consistency and quality of the Gibraltar pit ore improves at
depth.
A total of 23.2 million tons were mined in the third quarter as
mining operations were focused in the Gibraltar pit. The strip ratio of 1.5 was
lower than prior quarter as stripping activity in Pollyanna was
minimal and ore stockpiles increased by 1.0 million tons in the
third quarter.
*Non-GAAP performance
measure. See end of news release
|
REVIEW OF OPERATIONS – CONTINUED
Total site costs* at Gibraltar
of $71.0 million (which includes
capitalized stripping of $1.1
million) for Taseko's 75% share were $10.0 million higher than the third quarter of
2021 due to higher diesel prices (56% higher than 2021) and with
grinding media and other input costs also
increasing.
Molybdenum production was 324 thousand pounds in the third
quarter due to lower grades. At an average molybdenum price
of US$16.10 per pound, molybdenum
generated a by-product credit per pound of copper produced of
US$0.15 in the third quarter.
Off-property costs per pound produced* were US$0.35 for the third quarter reflecting higher
ocean freight costs (including bunkers) and increased treatment and
refining charges (TCRC) compared to the same quarter in the prior
year.
Total operating costs per pound produced (C1)* were US$2.72 for the quarter and were US$1.15 per pound higher than the third quarter
last year as shown in the bridge graph below:
Of the US$1.15 variance in C1
costs in the third quarter of 2022 compared to the prior year
quarter, US$0.46 was due to decreased
copper production, US$0.35 was due to
less mining and other costs being capitalized, US$0.11 was due to lower molybdenum production,
US$0.26 was due to inflation arising
from increased prices for diesel, grinding media, explosives and
other site costs, US$0.06 was due to
higher treatment and refining charges, and partially offset by a
weakening Canadian dollar impact of US$0.09.
GIBRALTAR
OUTLOOK
Ore from the Gibraltar pit will
be the primary source of mill feed for the fourth quarter and for
2023. Copper production in the fourth quarter is expected to
improve by approximately 10% over the third quarter and continue at
those higher production rates into 2023 as mining progresses deeper
into the Gibraltar pit. Stripping
activities for the new Connector pit will also commence in 2023.
The primary crusher for Mill 1 which overlays the Connector zone is
scheduled to be moved to its new location in the third quarter of
2023.
*Non-GAAP performance
measure. See end of news release
|
GIBRALTAR OUTLOOK -
CONTINUED
The Company currently has copper price collar contracts in place
that secure a minimum copper price of US$3.75 per pound for a substantial portion of
its attributable production until June 30,
2023. The Company has also executed price caps for its share
of diesel purchases. Improving production combined with this copper
hedge and diesel price protection program should continue to
provide the foundation for stable financial performance and
operating margins at the Gibraltar
mine over the coming quarters.
FLORENCE COPPER
Once in commercial production, Florence Copper is expected to
have the lowest energy and greenhouse gas-intensity ("GHG") of any
copper producer in North America,
and will contribute to reducing the
United States' reliance on foreign producers for a metal
considered to be foundational for the transition to a low-carbon
economy. It is a low-cost copper project with an annual production
capacity of 85 million pounds of copper over a 21-year mine life.
With the expected C1* operating cost of US$1.10 per pound, Florence Copper will be in the
lowest quartile of the global copper cost curve and will have one
of the smallest environmental footprints of any copper mine in the
world with carbon emissions, water and energy consumption all
dramatically lower than a conventional mine.
The Company has successfully operated a Production Test Facility
("PTF") since 2018 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 be the construction and
operation of the commercial ISCR facility with an estimated capital
cost of US$230 million (including
reclamation bonding and working capital) based on the Company's
published 2017 NI 43-101 technical report. At a conservative 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.
In December 2020, the Company received the Aquifer
Protection Permit ("APP") from the Arizona Department of
Environmental Quality ("ADEQ"). During the APP process, Florence
Copper received strong support from local community members,
business owners and elected officials.
The other required permit is the Underground Injection Control
permit ("UIC") from the U.S. Environmental Protection Agency
("EPA"), which is the final permitting step required prior to
construction of the commercial ISCR facility. On September 29, 2022, the EPA concluded its public
comment period on the draft UIC it issued following a virtual
public hearing that was held on September
15, 2022. Public comments submitted to the EPA have
demonstrated strong support for the Florence Copper project among
local residents, business organizations, community leaders and
state-wide organizations. Over 98% of written comments to the EPA
were supportive of the project and supplement the unanimous public
support voiced at the EPA's public hearing. Taseko has reviewed all
of the submitted comments and is confident they will be fully
addressed by the EPA during their review, prior to issuing the
final UIC permit.
*Non-GAAP performance
measure. See end of news release
|
FLORENCE COPPER -
CONTINUED
Detailed engineering and design for the commercial production
facility was substantially completed in 2021 and procurement
activities are well advanced with the Company having awarded and
procured the key contract for the major processing equipment
associated with the solvent extraction and electrowinning ("SX/EW")
plant. The Company has incurred $79.6
million of costs for Florence in the nine month period ended
September 30, 2022 and most of
ordered SX/EW plant equipment is expected to be on site by the end
of year. Florence Copper also has outstanding purchase commitments
of $16.4 million as at September 30, 2022. Deploying this strategic
capital and awarding key contracts has assisted with protecting the
project execution plan including against supply chain challenges,
mitigated inflation risk and should ensure a smooth transition into
construction once the final UIC permit is received.
LONG-TERM GROWTH STRATEGY
Taseko's strategy has been to grow the Company by acquiring and
developing a pipeline of complementary 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 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 copper
price based on the Company's 2020 NI 43-101 technical report.
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 preparing to advance into the environmental
assessment process and is undertaking some additional engineering
work in conjunction with ongoing engagement with local communities
including First Nations. The Company is also collecting baseline
data and modeling which will be used to support the environmental
assessment and permitting of the project.
New Prosperity Gold-Copper Project
In December 2019, the Tŝilhqot'in
Nation, as represented by the Tŝilhqot'in National Government, and
Taseko entered into a confidential dialogue, with the involvement
of the Province of British
Columbia, to try to obtain a long-term resolution 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.
*Non-GAAP performance
measure. See end of news release
|
LONG-TERM GROWTH STRATEGY - CONTINUED
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
Teẑtan Biny (Fish Lake). The standstill was extended on
December 4, 2020, to continue what
was a constructive dialogue that had been delayed by the COVID-19
pandemic. The dialogue is not complete but it remains constructive,
and in December 2021, the parties
agreed to extend the standstill for a further year so that they and
the Province of British Columbia
can continue to pursue a long-term and mutually acceptable
resolution of the conflict.
Aley Niobium Project
Environmental monitoring and product marketing initiatives on
the Aley niobium project continue. The converter pilot test is
ongoing and is providing additional process data to support the
design of the commercial process facilities and will provide final
product samples for marketing purposes.
The Company will host a
telephone conference call and live webcast on Friday, November 4,
2022 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 416-764-8688 in Canada, 888-390-0546 in the
United States, 08006522435 in the United Kingdom, or online at
tasekomines.com/investors/events.
|
Stuart McDonald
President & CEO
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.
|
|
|
|
|
|
(Cdn$ in thousands,
unless otherwise indicated) –
75% basis
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Cost of
sales
|
84,204
|
90,992
|
89,066
|
57,258
|
65,893
|
Less:
|
|
|
|
|
|
Depletion and
amortization
|
(13,060)
|
(15,269)
|
(13,506)
|
(16,202)
|
(17,011)
|
Net change in
inventories of finished goods
|
2,042
|
(3,653)
|
(7,577)
|
13,497
|
762
|
Net change in
inventories of ore stockpiles
|
3,050
|
(3,463)
|
(3,009)
|
4,804
|
6,291
|
Transportation
costs
|
(6,316)
|
(4,370)
|
(5,115)
|
(4,436)
|
(5,801)
|
Site operating
costs
|
69,920
|
64,237
|
59,859
|
54,921
|
50,134
|
Less by-product
credits:
|
|
|
|
|
|
Molybdenum, net
of treatment costs
|
(4,122)
|
(3,023)
|
(3,831)
|
(7,755)
|
(8,574)
|
Silver,
excluding amortization of deferred revenue
|
25
|
36
|
202
|
(330)
|
300
|
Site operating costs,
net of by-product credits
|
65,823
|
61,250
|
56,230
|
46,836
|
41,860
|
Total copper produced
(thousand pounds)
|
21,238
|
15,497
|
16,024
|
21,590
|
25,891
|
Total costs per pound
produced
|
3.10
|
3.95
|
3.51
|
2.17
|
1.62
|
Average exchange rate
for the period (CAD/USD)
|
1.31
|
1.28
|
1.27
|
1.26
|
1.26
|
Site operating
costs, net of by-product credits
(US$ per
pound)
|
2.37
|
3.10
|
2.77
|
1.72
|
1.28
|
Site operating costs,
net of by-product credits
|
65,823
|
61,250
|
56,230
|
46,836
|
41,860
|
Add off-property
costs:
|
|
|
|
|
|
Treatment and
refining costs
|
3,302
|
2,948
|
2,133
|
1,480
|
3,643
|
Transportation
costs
|
6,316
|
4,370
|
5,115
|
4,436
|
5,801
|
Total operating
costs
|
75,441
|
68,568
|
63,478
|
52,752
|
51,304
|
Total operating
costs (C1) (US$ per pound)
|
2.72
|
3.47
|
3.13
|
1.94
|
1.57
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Total Site Costs
Total site costs is comprised of the site operating costs
charged to cost of sales as well as mining costs capitalized to
property, plant and equipment in the period. This measure is
intended to capture Taseko's share of the total site operating
costs incurred in the quarter at the Gibraltar mine calculated on a consistent
basis for the periods presented.
|
|
|
|
|
|
(Cdn$ in thousands,
unless otherwise indicated) –
75% basis
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Site operating
costs
|
69,920
|
64,237
|
59,859
|
54,921
|
50,134
|
Add:
|
|
|
|
|
|
Capitalized
stripping costs
|
1,121
|
11,887
|
15,142
|
12,737
|
10,882
|
Total site
costs
|
71,041
|
76,124
|
75,001
|
67,658
|
61,016
|
Adjusted net income (loss)
Adjusted net income (loss) removes the effect of the following
transactions from net income as reported under IFRS:
- Unrealized foreign currency gains/losses;
- Unrealized gain/loss on derivatives; and
- Loss on settlement of long-term debt and call premium,
including realized foreign exchange gains.
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.
|
|
|
|
|
(Cdn$ in thousands,
except per share amounts)
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
Net income
(loss)
|
(23,517)
|
(5,274)
|
5,095
|
11,762
|
Unrealized
foreign exchange (gain) loss
|
28,083
|
11,621
|
(4,398)
|
(1,817)
|
Unrealized
(gain) loss on derivatives
|
(72)
|
(30,747)
|
7,486
|
4,612
|
Estimated tax
effect of adjustments
|
19
|
8,302
|
(2,021)
|
(1,245)
|
Adjusted net income
(loss)
|
4,513
|
(16,098)
|
6,162
|
13,312
|
Adjusted
EPS
|
0.02
|
(0.06)
|
0.02
|
0.05
|
|
|
|
|
|
(Cdn$ in thousands,
except per share amounts)
|
2021
Q3
|
2021
Q2
|
2021
Q1
|
2020
Q4
|
Net income
(loss)
|
22,485
|
13,442
|
(11,217)
|
5,694
|
Unrealized
foreign exchange (gain) loss
|
9,511
|
(3,764)
|
8,798
|
(13,595)
|
Realized foreign
exchange gain on settlement of long-term debt
|
-
|
-
|
(13,000)
|
-
|
Loss on
settlement of long-term debt
|
-
|
-
|
5,798
|
-
|
Call premium on
settlement of long-term debt
|
-
|
-
|
6,941
|
-
|
Unrealized
(gain) loss on derivatives
|
(6,817)
|
370
|
802
|
586
|
Estimated tax
effect of adjustments
|
1,841
|
(100)
|
(3,656)
|
(158)
|
Adjusted net income
(loss)
|
27,020
|
9,948
|
(5,534)
|
(7,473)
|
Adjusted
EPS
|
0.10
|
0.04
|
(0.02)
|
(0.03)
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
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 derivatives;
- Loss on settlement of long-term debt (included in finance
expenses) and call premium;
- Realized foreign exchange gains on settlement of long-term
debt; and
- Amortization of share-based compensation expense.
|
|
|
|
|
(Cdn$ in
thousands)
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
Net income
(loss)
|
(23,517)
|
(5,274)
|
5,095
|
11,762
|
Add:
|
|
|
|
|
Depletion and
amortization
|
13,060
|
15,269
|
13,506
|
16,202
|
Finance
expense
|
12,481
|
12,236
|
12,155
|
12,072
|
Finance
income
|
(650)
|
(282)
|
(166)
|
(218)
|
Income tax
expense
|
3,500
|
922
|
1,188
|
9,300
|
Unrealized
foreign exchange (gain) loss
|
28,083
|
11,621
|
(4,398)
|
(1,817)
|
Unrealized
(gain) loss on derivatives
|
(72)
|
(30,747)
|
7,486
|
4,612
|
Amortization of
share-based compensation expense (recovery)
|
1,146
|
(2,061)
|
3,273
|
1,075
|
Adjusted
EBITDA
|
34,031
|
1,684
|
38,139
|
52,988
|
|
|
|
|
|
(Cdn$ in
thousands)
|
2021
Q3
|
2021
Q2
|
2021
Q1
|
2020
Q4
|
Net income
(loss)
|
22,485
|
13,442
|
(11,217)
|
5,694
|
Add:
|
|
|
|
|
Depletion and
amortization
|
17,011
|
17,536
|
15,838
|
18,747
|
Finance expense
(includes loss on settlement of long-term debt
and
call premium)
|
11,875
|
11,649
|
23,958
|
10,575
|
Finance
income
|
(201)
|
(184)
|
(75)
|
(47)
|
Income tax
(recovery) expense
|
22,310
|
7,033
|
(4,302)
|
(2,724)
|
Unrealized
foreign exchange (gain) loss
|
9,511
|
(3,764)
|
8,798
|
(13,595)
|
Realized foreign
exchange gain on settlement of long-term debt
|
-
|
-
|
(13,000)
|
-
|
Unrealized
(gain) loss on derivatives
|
(6,817)
|
370
|
802
|
586
|
Amortization of
share-based compensation expense
|
117
|
1,650
|
2,920
|
1,242
|
Adjusted
EBITDA
|
76,291
|
47,732
|
23,722
|
20,478
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
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
September 30,
|
Nine months
ended
September 30,
|
(Cdn$ in
thousands)
|
2022
|
2021
|
2022
|
2021
|
Earnings from mining
operations
|
5,510
|
66,670
|
26,729
|
118,091
|
Add:
|
|
|
|
|
Depletion and
amortization
|
13,060
|
17,011
|
41,835
|
50,385
|
Earnings from mining
operations before depletion and amortization
|
18,570
|
83,681
|
68,564
|
168,476
|
Site operating costs per ton milled
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 Company's site operations
on a tons milled basis.
|
|
|
|
|
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2022
Q3
|
2022
Q2
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
Site operating costs
(included in cost of sales)
|
69,920
|
64,237
|
59,859
|
54,921
|
50,134
|
|
|
|
|
|
|
Tons milled (thousands)
(75% basis)
|
6,172
|
5,774
|
5,285
|
5,523
|
5,576
|
Site operating costs
per ton milled
|
$11.33
|
$11.13
|
$11.33
|
$9.94
|
$8.99
|
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.
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SOURCE Taseko Mines Limited