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Taseko Reports $52 Million of Cash Flow from Operations for First Quarter 2022

Press Release

May 4, 2022, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) (“Taseko” or the “Company”) reports Adjusted EBITDA* of $38 million for the first quarter 2022, a 61% increase over the same period 2021. Earnings from mining operations before depletion* was $43 million and Cash flows provided by operations was $52 million for the quarter. Adjusted net income* was $6 million, or $0.02 per share.

Stuart McDonald, President and CEO of Taseko, stated, “Copper markets continue to be robust and Taseko’s realized copper price of US$4.59 per pound and sales volumes of 27 million pounds drove strong financial results in the first quarter. Production of 21 million pounds of copper and 236 thousand pounds of molybdenum was on plan, as development of the upper benches of the Gibraltar pit progressed. The Gibraltar pit will be the primary source of ore for the remainder of this year and grade and continuity of mineralization are expected to gradually improve as mining advances to deeper benches. Softer ore in the Gibraltar pit is allowing for increased milling rates, in line with our expectations and historical performance. Mill throughput averaged over 87,000 tons per day in March, and 90,000 tons per day in April, well above name plate capacity. We continue to expect 2022 copper production of 115 million pounds (+/-5%), with production weighted to the back half of the year.”

Mr. McDonald added, “We are seeing some inflationary pressures on certain input costs, most notably higher diesel prices, which contributed to an overall 9% (or $7 million) increase in total site costs* at Gibraltar this quarter. Operating margins are expected to improve as copper production increases over the remainder of the year.”

“In March, we announced a new 40% larger mineral reserve for Gibraltar, extending the mine from 16 to 23 years. The new reserve has the same average grade as the previous, but with a slightly higher strip ratio in the latter half of the mine life. The increase in reserves was a result of updating pit designs using a copper price of US$3.05 per pound (previously US$2.75 per pound), which is still conservative but more in line with the current long-term consensus price of US$3.50 per pound. The after-tax NPV8 of Gibraltar at the long-term consensus price is now $1.1 billion for Taseko’s 75% share of the mine,” continued Mr. McDonald.

“At Florence Copper, we are still waiting for the draft Underground Injection Control (“UIC”) permit to be issued by the US Environmental Protection Agency (“EPA”), which will initiate the 45-day public comment period. This process is taking longer than expected, but we are in regular contact with the EPA who continue to confirm that the process is advancing towards the issuance of the draft UIC permit shortly. During the first quarter, we spent a further $25 million on procurement of long-lead time items and other pre-construction work. We are well positioned to move into the construction of the commercial production facility upon receipt of the final permit,” concluded Mr. McDonald.

First Quarter Review

  • First quarter earnings from mining operations before depletion and amortization* was $42.8 million, Adjusted EBITDA* was $38.1 million and cash flow from operations was $51.8 million;
  • Gibraltar sold 27.4 million pounds of copper in the quarter (100% basis) at record average realized copper prices of US$4.59 per pound in the quarter resulting in $118.3 million of revenue for Taseko;
  • The Gibraltar mine produced 21.4 million pounds of copper and 236 thousand pounds of molybdenum in the first quarter. Copper head grades were 0.19% and copper recoveries were 80.2%;
  • Total site costs* increased by 9% in the quarter primarily due to the impact of higher diesel costs;
  • Adjusted net income* was $6.2 million ($0.02 per share) and GAAP Net income was $5.1 million ($0.02 per share) and were reduced by a $2.3 million realized derivative loss ($0.01 per share) related to copper options that expired in the quarter;
  • The Company has approximately $273 million of available liquidity at March 31, 2022, including a cash balance of $213 million and its undrawn US$50 million revolving credit facility;
  • Development costs incurred for Florence Copper were $25.2 million in the quarter and included further payments for major processing equipment for the SX/EW plant, other pre-construction activities and ongoing site costs;
  • The Company now has copper collar contracts in place that secure a minimum copper price of US$4.00 per pound for more than 90% of its attributable production in 2022;
  • The EPA continues to advance their review process and is expected to publicly issue the draft Underground Injection Control permit shortly, and then a public comment period will commence; and
  • In March 2022, the Company announced a new 706 million ton proven and probable sulphide reserve for the Gibraltar mine, a 40% increase as of December 31, 2021. The new reserve estimate allows for a significant extension of the mine life to 23 years with total recoverable metal of 3.0 billion pounds of copper and 53 million pounds of molybdenum.

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