Taseko Announces Second Quarter 2011 Results
VANCOUVER, Aug. 11, 2011 /CNW/ --
This release should be read with the unaudited financial statements and
management's discussion and analysis available at www.tasekomines.com and filed on www.sedar.com. Our financial results are prepared in accordance with IFRS and
expressed in Canadian dollars, unless otherwise noted. Sales and
production volumes for the Company's 75%-owned Gibraltar mine are
presented on a 100% basis unless otherwise indicated.
VANCOUVER, Aug. 11, 2011 /CNW/ - Taseko Mines Limited (TSX: TKO); (NYSE
Amex: TGB) announces adjusted net earnings(1) of $7.3 million, or $0.04 per share, compared to $0.8 million reported
in the second quarter of 2010.
Highlights
-- Operating profit(1) was $11.8 million in the second quarter
compared to $12.8 million in the second quarter of 2010.
-- The Company's share of Gibraltar's copper production and sales
volumes for the second quarter 2011 was 15.0 million lbs and
10.7 million lbs, respectively.
-- Taseko's 75% share of inventory at quarter end was 9.0 million
lbs of copper metal.
-- Adjusted net earnings(1) for the second quarter were $7.3
million, an increase over adjusted net earnings of $0.8 million
for the prior-year period.
-- Total cash costs of production were US$2.32/lb. Higher costs
resulted from maintenance and consumable costs, a strengthened
Canadian dollar, combined with reduced metal production in the
quarter.
-- The Company purchased put options for approximately 90% of its
75% share of Gibraltar's 2012 copper production, ensuring a
minimum selling price of US$3.50/lb.
-- Engineering, procurement and construction for Gibraltar
Development Plan 3 ('GDP3') is well underway and the project is
on track for scheduled completion in December 2012.
-- New Prosperity is expected to enter into the Federal
environmental review process shortly.
-- Advancement of the Aley Niobium project continues, with a
completed feasibility study expected in 2012.
Russell Hallbauer, President and CEO of Taseko, remarked 'Even with the volatility in the financial markets, Taseko remains
positioned for growth. Not only are our near term projects fully
financed, our hedging strategy ensures minimum price levels for the
next 16 months.'
Mr. Hallbauer continued, 'Our management team has been working diligently on numerous projects
during the past three months; these projects will deliver significant
value to our shareholders. GDP3 is well advanced, with all major mine
and milling equipment secured, delivery dates set, and construction
activity has commenced.
Initiatives at Aley will progress the project into an inferred resource
shortly, with a feasibility study expected to be underway by the end of
the year.
And finally, we have been working closely with the Federal and
Provincial Governments and anticipate the New Prosperity Project to
enter the Federal environmental review process shortly.'
Summary Financial Results
Three months ended Six months ended
June 30, June 30,
(Cdn$ in 2011 2010 2011 2010
thousands,
except per
share amounts)
Revenues $ 48,349 $ 56,453 $ 107,150 $ 131,961
Operating $ 11,756 $ 12,802 $ 30,360 $ 37,311
Profit
Net (loss) $ (1,113) $ 44,783 $ 4,640 $ 123,079
earnings
Unrealized 10,292 (8,910) 10,778 (16,401)
(gain)/loss on
derivative
instruments
Gain on sale (6,443) (765) (6,443) (1,114)
of marketable
securities
Changes in 1,153 1,682
fair value of - -
financial
instruments
Foreign 600 (3,713) 4,626 (2,516)
currency
translation
losses
Loss on 2,136
extinguishment - - -
of debt
Loss (gain) on 2,796 2,796 (65,268)
contribution -
to joint
venture, net
of tax effect
Non-recurring (30,600) (30,600)
tax - -
adjustments
Adjusted net $ 7,285 $ 795 $ 18,079 $ 9,316
earnings
Adjusted $ 0.04 $ 0.00 $ 0.09 $ 0.05
EPS
Gibraltar Mine
The Gibraltar mine's second quarter 2011 copper production was 20.0
million lbs, similar to the 20.1 million lbs produced in the second
quarter 2010. The Gibraltar mine's first half 2011 copper production
was 39.2 million lbs.
Molybdenum production during second quarter 2011 was 303.0 thousand lbs,
up 39% compared to the prior-year quarter, largely due to a 47%
increase in molybdenum recovery. Molybdenum production during the
first half of 2011 was 619.5 thousand lbs, up 50% compared to the
prior-year period. The recovery increase was a result of operational
and technical improvements to the molybdenum separation circuit.
In second quarter 2011, total cash costs/ lbs of copper produced were
US$2.32. This compares to US$2.10/ lb level for the corresponding
quarter in 2010. Higher costs resulted from maintenance and
consumable costs, a strengthened Canadian dollar, combined with reduced
metal production in the quarter. Offsite costs for treatment and
refining and transportation decreased to US$0.32/ lb of copper produced
in second quarter 2011.
Gibraltar Operating Results
OPERATING STATISTICS Three months ended Six months ended
(100% BASIS) June 30, June 30,
2011 2010 2011 2010
Tons mined (millions) 14.5 11.1 28.5 22.6
Tons milled (millions) 3.7 3.6 6.8 7.2
Stripping ratio 2.9 2.2 2.7 2.2
Copper
Grade (%) 0.299 0.306 0.317 0.331
Recovery (%) 87.9 88.7 88.8 89.2
Production (million 19.3 19.6 38.4 42.7
lbs)
Sales (million lbs) 14.3 21.1 30.9 41.5
Molybdenum
Grade (%) 0.011 0.011 0.012 0.012
Recovery (%) 37.6 25.5 37.2 23.5
Production (thousand 303.0 218.0 619.5 412.0
lbs)
Sales (thousand lbs) 311.8 193.0 620.3 403.0
Copper cathode
Production (million 0.7 0.5 0.8 0.5
lbs)
Sales (million lbs) 0.0 0.0 0.4 0.1
Per unit data (1,4)
Operating cash costs $2.29 $1.82 $2.18 $1.59
(2) (US$ per pound)
By-product credits (3) ($0.29) ($0.17) ($0.32) ($0.19)
(US$ per pound)
Offsite costs for treatment & refining and transport (3)
(US$ per $0.32 $0.44 $0.34 $0.38
pound)
Total cash costs of $2.32 $2.10 $2.21 $1.78
production (US$ per
pound)
Total cash costs of $2.24 $2.16 $2.16 $1.84
production (Cdn$ per
pound)
(1) Operating cash costs, total cash costs of production and total cash
costs of sales are non-GAAP financial performance measures with no
standard definition under IFRS. See pages 19-22 of the Company's MD&A.
(2) Operating cash costs are comprised of direct mining costs which include
personnel costs, mine site general & administrative costs,
non-capitalized stripping costs, maintenance & repair costs, operating
supplies and external services. Non-cash costs, such as share-based
compensation and depreciation, have been excluded.
(3) By-product credits are calculated based on actual sales of molybdenum
and silver for the period, divided by the total lbs of copper produced
during the period. Offsite costs for treatment & refining and
transport are the expenses associated with actual sales during the
period, divided by the total lbs of copper produced during the period.
(4) Per unit data may not sum due to rounding.
Gibraltar Development Plan 3
During the second quarter of 2011 the Company awarded the Engineering
Procurement and Construction Management ('EPCM') contract to Ausenco -
Minerals and Metals. The EPCM portion of GDP3 covers the $237 million
cost of the concentrator construction.
All major long lead time components including the grinding mills have
been secured and are scheduled for arrival and installation within the
project timeline. Current project commitments represent approximately
30% of the infrastructure portion budget of the project.
All major mining equipment has been secured and delivery dates are
scheduled in 2012 and 2013.
Construction activity has also commenced including site preparation and
contractor mobilization. Commissioning of the project is scheduled to
commence in December 2012.
New Prosperity (100%)
The New Prosperity project description was submitted to the Federal
Government in February 2011 and has additional construction costs and
life of mine operating expenditures of approximately $300 million over
that of the original proposal. The Federal Government subsequently
requested additional information, which was supplied as a revised
project description on June 6, 2011.
With the revised project description in hand, we expect that the
Canadian Environmental Assessment Agency (CEAA) will confirm its
adequacy. The Federal Government then has up to 90 days to: coordinate
with the Province of British Columbia, prepare a detailed background
document, including project scope, and launch the Environmental
Assessment review. The Company expects the Environmental Assessment
review to commence by October 2011.
Aley (100%)
The Company recently committed $18 million toward the advancement of the
Aley project to a completed feasibility study in 2012. Key initiatives
included in this process are:
-- Resource definition drilling program
-- Baseline environmental studies
-- Geotechnical drilling
Currently 60 people are working at site on these programs. Drilling
results are anticipated in the fourth quarter of this year.
_____________________________________________________________________
|Taseko will host a conference call on Friday, August 12, 2011 at |
|11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these results.|
|The conference call may be accessed by dialing (877) 303-9079 in |
|Canada or (970) 315-0461 internationally. A live and archived audio |
|webcast will also be available at |
|www.tasekomines.com. |
|The conference call will be archived for later playback until August |
|19, 2011 and can be accessed by dialing (800) 642-1687 in Canada and |
|the United States, or (706) 645-9291 internationally and using the |
|passcode 81435415. |
|_____________________________________________________________________|
Russell Hallbauer
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 and costs related to the Company's exploration
and development activities, such as those associated with
continuity of mineralization or determining whether mineral
resources or reserves exist on a property;
-- uncertainties related to the accuracy of our estimates of
mineral reserves, mineral resources, production rates and
timing of production, future production and future cash and
total costs of production and milling;
-- uncertainties related to feasibility studies that provide
estimates of expected or anticipated costs, expenditures and
economic returns from a mining project;
-- uncertainties related to our ability to complete the mill
upgrade on time estimated and at the scheduled cost;
-- uncertainties related to the ability to obtain necessary
licenses permits for development projects and project delays
due to third party opposition;
-- uncertainties related to unexpected judicial or regulatory
proceedings;
-- changes in, and the effects of, the laws, regulations and
government policies affecting our exploration and development
activities and mining operations, particularly laws,
regulations and policies;
-- changes in general economic conditions, the financial markets
and in the demand and market price for copper, gold and other
minerals and commodities, such as diesel fuel, steel, concrete,
electricity and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to
the value of the U.S. dollar and Canadian dollar, and the
continued availability of capital and financing;
-- the effects of forward selling instruments to protect against
fluctuations in copper prices and exchange rate movements and
the risks of counterparty defaults, and mark to market risk;
-- the risk of inadequate insurance or inability to obtain
insurance to cover mining risks;
-- the risk of loss of key employees; the risk of changes in
accounting policies and methods we use to report our financial
condition, including uncertainties associated with critical
accounting assumptions and estimates;
-- environmental issues and liabilities associated with mining
including processing and stock piling ore; and
-- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which
we operate mines, or environmental hazards, industrial
accidents or other events or occurrences, including third party
interference that interrupt the production of minerals in our
mines.
For further information on Taseko, investors should review the Company's
annual Form 40-F filing with the United States Securities and Exchange
Commission www.sec.gov and home jurisdiction filings that are available at www.sedar.com.
VANCOUVER, Aug. 11, 2011 /CNW/ --
(1) Adjusted net earnings, operating profit and cash margins are non-GAAP
financial performance measures. See pages 19-22 of the MD&A.
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on Taseko, please see the Company's website www.tasekomines.com or contact: Investor Relations - 778-373-4533, toll free 1-877-441-4533