Taseko Mines

Taseko Mines Limited is a mid-tier copper producer located in British Columbia, Canada. It operates Gibraltar Mine, the second largest open-pit copper mine in Canada, and is in the planning stages for several other mines including the Prosperity Mine, Harmony, and Aley. All production is sold at non-hedged market based prices. The market capitalization currently is roughly 740 million dollars.

Taseko Mines Limited
TypePublic
TSX: TKO
IndustryCopper and Gold, Niobium
Founded1999
HeadquartersVancouver, British Columbia, Canada
Key people
Mr. Russell E. Hallbauer, Teseko's CEO
ProductsCopper, Gold,Niobium, and molybdenum
Revenue$218.07 million[1] USD (2007)
$56.98 million[1] USD (2007)
$56.98 million[1] USD (2007)
Number of employees
514 (2010)
Websitewww.tasekomines.com

Company history
  • 1991 - Prosperity project acquired
  • July 1999 - Gibraltar acquired from Boliden
  • 2002 - Harmony acquired
  • 2004 - Gibraltar reopened due to high copper prices
  • 2007 - Aley acquired

Gibraltar Mine

Operations: Large open pit mine with production ranging from 80-110 million lb copper per year at a cost of $1.20 per lb mined once phase II expansion has been completed.

Reserves: 2.4 billion pounds of copper and 69 million pounds of molybdenum[2]

  • 1.86 billion lb copper produced 1973-1998

Timeline:

  • 1973 - Placer Development opens mine
  • 1996 - Mine sold to Westmin Resources
  • 1998 - Mine closed
  • July 1999 - Taseko purchases Gibraltar from Boliden
  • October 2004 - Mine reopens under Taseko
  • 2006 - Taseko takes over operations at Gibraltar
  • May 2006 - Phase I expansion of Gibraltar announced. Concentrator capacity increases from 36,750 to 46,000 tpd at a cost of 76 million
  • May 2007 - Phase II expansion of Gibraltar announced. Concentrator capacity will increase from 46,000 to 55,000 tpd at a cost of 40 million
  • May 13, 2008 - Phase III expansion of Gibraltar. An additional concentrator will be constructed with an additional output of 30,000 tpd. Which management believes will yield 180 million lb copper per year

Prosperity Mine

The property includes 85 square km in south central British Columbia. A large copper and gold mineralization has been defined on the property containing around 5.3 billion lb copper and 13.3 million oz of gold. The feasibility for the mine was completed on September 25, 2007 and the environmental review process began in July 2008.

Operations: Large open-pit copper and gold mine with projected production of 108 million lb per year and 247,000 oz of gold per year for 20 years.

Reserves

Cost: ~800 million

In 2009, proven reserves for the mine were 481 million tonnes 0.46 gram per tonne of gold and 0.26 per cent copper. Probable reserves were estimated at 350 million tonnes grading 0.35 gram per tonne of gold and 0.18 per cent of copper (based on a $5.50 net smelter return cut-off).[3]

Timeline
  • 1991 - acquired by Taseko Mines
  • Sep 25, 2007 - feasibility study completed for 70,000 tonnes per day with 20 year mine life
  • July 2008 - Environmental assessment begins
  • November 2010 - initial open-pit proposal rejected by Canadian Environmental Assessment Agency review board. Environment Minister Jim Prentice and the minority Tory government support the rejection.[4]
  • November 2011 - Taseko President Russell Hallbauer sends a letter to Environment Minister Peter Kent suggesting that the proposal was rejected for "spiritual" rather than environmental reasons.[5]
  • 2014 - Second rejection of mine by Harper government for environmental reasons
  • January 2017 - Attempted revival of dead project that has no support from local First Nation

Harmony Mine

The Harmony property is located on Graham Island, the largest island of the Haida Gwaii archipelago, within the Queen Charlotte Islands, off the coast of British Columbia. The property contains a low-grade gold mineralization that can only be mined profitably at historically high gold prices. Teseko has yet to explore this property and values the property at $1 on its balance sheet as of September 2004.[6]

Status: Exploration asset

Reserves:

  • latest engineering study indicated 64 million tonnes at 1.52 grams per tonne. In place resources are ~3 million oz of gold.

Cost: No projects pending

projects pending: N/A

Timeline

  • 1970's - property discovered
  • October 2001 - property acquired for 2.23 million dollars and preferred stock
  • September 30, 2004 - property value written down to nominal value of $1

Location: Aley

The Aley asset contains Niobium, a rare metal used in the production of special steel alloys that are corrosion resistant. Currently only 2 mines in the world produce the rare metal.[7] The spot price of this metal has risen significantly in the last 5 years, from has low as $6.70 per lb in 2004 to ~$24.00 currently . The property is located near the shore of the lake, about 30 kilometers from the Camp. The price of

Status: Exploration asset

Reserves: A feasibility study has not been completed thus-far. The resource estimates are 330-500 million lb with recoveries of which 65% may be recovered

Cost: N/A feasibility study not completed

Timeline

  • 1980's – Discovered by Cominco
  • June 2007 - Teseko acquires property for 1.5 million cash + ~894,730 common shares
  • 2008 - Exploration of property begins

Financial information
  • Shares listed on the NYSE under the "TGB" symbol
  • Taseko owns 7.318 million shares of Continental Mining, a Chinese mining company[8]
Assets
March 31, 2008September 30, 2007June 2007September 2006
Current Assets
Cash and equivalents66,41637,63644,30689,408
Restricted Cash-4,4004,400-
Marketable Securities and investments14,85018,542--
Accounts Receivable12,20912,02116,2039,342
Income Taxes Receivable6,344---
Advances to Related party-807--
Inventory22,72418,05812,74424,218
Prepaid expenses8391,0692,6411,221
Current portion of promissory note7232,0861,2382,157
124,10594,61997,907149,447
Restricted Cash-4,4004,400-
Reclamation Deposits35,46833,39632,65332,004
Promissory Note73,05872,35072,12871,009
Property, plant and equipment221,821176,898136,84343,445
458,852337,263339,531297,461
Liabilities
March 31, 2008September 30, 2007June 2007September 2006
Current Liabilities
Accounts payable and accrued liabilities27,03230,43520,64621,961
Advances from related party118---
Current portion of deferred revenue1751751,0951,225
Current portion of royalty obligation7232,0861,2382,157
Income taxes payable-6,57313,1663,985
Current portion of future income taxes-807--
29,97644,58935,22547,862
Income taxes25,47824,64522,52321,058
Royalty obligation62,59063,33063,82564,632
Deferred revenue9631,0501,0941,225
Convertible debt43,38341,00842,17342,775
Site closure and reclamation cost14,33417,44119,86418,975
Future income taxes35,67121,5405,591-
212,395213,603190,295196,527

References
  1. ОАО "ЛУКОЙЛ". Консолидированная финансовая отчетность за 2006 и 2005 гг., подготовленная в соответствии с ОПБУ США Archived 2009-01-31 at the Wayback Machine
  2. "Taseko Mines Limited - News Releases - Taseko Adds 128 Million Tons to Gibraltar Mineral Reserves - Thu Aug 14, 2008". Archived from the original on 2012-02-13. Retrieved 2018-11-04.
  3. Stockwatch news release November 2, 2009, cited in BC MINFILE Record summary No 092O 041 PROSPERITY, FISH LAKE, BB, VICCAL, ALBERT, RENNER, NEW PROSPERITY
  4. Prentice kills Taseko's Prosperity mine - Sun Media, November 2, 2010
  5. B.C. mining company wants aboriginal 'spirituality' ignored in project review - The Vancouver Sun, April 30, 2012
  6. Teseko Mines Limited Annual report p45
  7. Niobium
  8. https://web.archive.org/web/20080509141736/http://www.hdgold.com/kmk/Home.asp

Sources

Prosperity Cost

100 million equipment purchase

Phase III expansion

2007 Annual Report detailing all properties owned

Market Capitalization

CFO resignation

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