Taseko Reports First Quarter 2019 Financial & Operating Results
Press Release
May 8, 2019, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE MKT: TGB) (“Taseko” or the “Company”) reports the results for the three months ended March 31, 2019.
First quarter EBITDA* was $16.7 million and adjusted EBITDA of $10.2 million. The Company reported Earnings from mining operations before depletion and amortization of $15.7 million and a net loss of $7.9 million, or $0.03 per share.
Russell Hallbauer, President and CEO of Taseko, commented, “With a grade profile similar to 2018, copper and molybdenum production are expected to increase through 2019 and our previously stated guidance remains unchanged at 130 million lbs +/-5%.”
“Copper production in the first quarter was 25 million pounds, similar to the first quarter 2018. Gibraltar mine sequencing on a quarterly basis creates some grade variability, but year-over-year production will be much more consistent. Site operating costs* of $1.91/lb and site operating cost per ton milled* of $10.88 remain within our expectations and should decline as production increases,” continued Mr. Hallbauer.
Mr. Hallbauer added, “Metal recoveries for both copper and molybdenum were excellent considering the lower copper head grade. Molybdenum production was up nearly 70% from the first quarter 2018, to 738,000 pounds. With moly prices stable at approximately US$12 per pound, we recorded a by-product credit of $0.32 per pound, the highest in a number of years.
As was experienced throughout Western Canada in the quarter, severe winter weather affected all aspects of our Gibraltar operation, from shovel availabilities through to waste stripping and ore release. This, in combination with harder ore in the current Granite Pit pushback, reduced average mill throughput to 76,000 tons per day, which affected both copper and molybdenum production. Those issues are now behind us and we are back to normal throughput, with increasing head grade.”
“We made great progress at our Florence Copper project. Wellfield operations commenced late last year and after approximately three months of initial leaching, the copper leach solution was introduced to the SX/EW plant. By the middle of April, the plant was producing high quality copper cathode which was assayed at +99.9% copper. While we have always been confident with the process, it is fair to say that our expectations were surpassed in producing such high quality copper so quickly after wellfield start-up,” added Mr. Hallbauer.
*Non-GAAP performance measure. See end of news release.
Going forward the Company will be focusing on three key areas:
- The amendment to the operating permits for commercial operation;
- Optimization of the leach process;
- Completion of a financing package for the commercial facility build out.
“A number of years ago, the decision was made to include a test phase to the project development plan. The permits that are currently in place only need to be amended for commercial scale-up. The advantage of operating the test facility is to have real operational data to provide to the state and federal regulators. This data is proof of performance and reliability, as opposed to theoretical predictions, and is constantly shared with regulators. This data will support a seamless and expedited amendment process which will be commencing in the coming weeks.
The success we are having with both the quantity and quality of cathode being produced is a major step in de-risking the project and creating many different financing opportunities for Taseko. The interest to participate in the future of one of the lowest cost copper producers in the world cannot be understated. The economics of the project are very compelling for all types of finance providers and we believe we can successfully arrange an attractive financing package,” concluded Mr. Hallbauer.
First Quarter Review
- First quarter earnings from mining operations before depletion and amortization* were $15.7 million, and Adjusted EBITDA was $10.2 million;
- Net loss was $7.9 million ($0.03 per share) and includes an unrealized foreign exchange gain of $6.7 million. Adjusted net loss* was $14.4 million ($0.06 per share);
- Cash flow from operations was $7.2 million;
- Copper production in the first quarter was 24.9 million pounds and copper sales were 23.3 million pounds (100% basis);
- Molybdenum production was 738 thousand pounds, a 67% increase over the first quarter of 2018, due to strong operating performance in the molybdenum plant.
- Site operating costs, net of by-product credits* were US$1.91 per pound produced and Total operating costs (C1)* were US$2.21 per pound produced;
- In April 2019, the Company announced first copper production from the test facility at the Florence Copper project. The first harvest resulted in 3,700 pounds of copper cathode, which was assayed at higher than 99.9% copper;
*Non-GAAP performance measure. See end of news release.
- The Company closed its acquisition of Yellowhead Mining Inc. (“Yellowhead”) on February 15, 2019. The environmental review process for the Yellowhead Project has been restarted, and Taseko’s technical team is working on a number of engineering initiatives to improve the project economics with the objective of issuing a new 43-101 technical report by the end of 2019; and
- The Company’s cash balance at March 31, 2019 was $34.5 million. Subsequent to the first quarter, the Company entered into an equipment loan, secured on existing mine equipment, and received net proceeds of $12.5 million.
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