Taseko Reports Third Quarter 2024 Operational Performance and $48 Million of Adjusted EBITDA

Press Release

November 6, 2024, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) (“Taseko” or the “Company”) reports third quarter 2024 Adjusted EBITDA* of $48 million and Earnings from mining operations before depletion, amortization and non-recurring items* of $55 million. Revenues for the third quarter were $156 million from the sale of 26 million pounds of copper and 348 thousand pounds of molybdenum.  A net loss of $0.2 million ($nil per share) was recorded for the quarter and adjusted net income* was $8 million ($0.03 per share).

Gibraltar produced 27 million pounds of copper and 421 thousand pounds of molybdenum in the third quarter. Copper grades were 0.23%, consistent with the prior quarter. Tons milled increased over the second quarter, however mill availability and throughput was lower than planned due to unscheduled downtime and the completion of the crusher move project and concurrent maintenance in concentrator #1 in July. Copper recoveries increased modestly to 79%. Molybdenum production was boosted by a 33% increase in grades, related to ore from the new Connector pit. Total operating costs (C1)* for the quarter were US$2.92 per pound of copper produced.

Stuart McDonald, President and CEO of Taseko, commented, “The development of the new Connector pit advanced on plan in the third quarter, with the new pit providing approximately half of the mill feed in the period.  Due to the lower than planned mill availability in the third quarter, we do not expect to recover the production that was lost during the labour strike in June.  Looking ahead to 2025, we expect increased mill throughput and improved ore quality as we move deeper into the Connector pit.  Copper production next year is expected to increase to the 120 to 130 million pound range, and molybdenum production is also expected to increase. Lower-grade ore stockpiles will be used to supplement mined ore in the first half of the year, so production will be weighted to the second half of the year.”

Mr. McDonald continued, “Construction at Florence Copper has continued to progress on schedule. We are now in peak construction with nearly 300 contractors working at site. The SX/EW plant activities have shifted from earth works and concrete foundation pouring to now erecting structural steel and installation of processing equipment and electrical services.  Development of the wellfield is advancing with four drill rigs now operating and 40 wells completed at the end of October. Development of the wellfield, which is a critical path item, remains on schedule to be completed in the second quarter of next year.”

“We expect Florence Copper to become North America’s lowest GHG-intensity primary copper producer, and we’re optimistic that the project will qualify for the U.S. Department of Energy’s (“DOE”) Qualifying Advanced Energy Project Credit (48C) Program, which we applied for recently. We expect to hear whether our application was successful in January. Our balance sheet remains in a strong position, with $209 million of cash on hand and total liquidity of approximately $317 million at the end of September,” added Mr. McDonald.

*Non-GAAP performance measure. See end of news release

“This is a very exciting time for Taseko as we begin to unlock the value of our growth assets. The Florence Copper project continues to be de-risked and is now just a year away from producing first copper. We’re also preparing to take a big step forward with our Yellowhead copper project, which will be entering the environmental assessment process in the coming months. We also plan on issuing an updated feasibility study for the project next year, which will reinforce the significant value of what could be British Columbia’s next major copper mine,” concluded Mr. McDonald.

Third Quarter Review

• Earnings from mining operations before depletion, amortization and non-recurring items* was $54.5 million and Adjusted EBITDA* was $47.7 million;
• Third quarter cash flow from operations was $65.0 million, and included $26.3 million for proceeds received on the insurance claim recorded in the prior quarter;
• Net loss was $0.2 million ($Nil per share) for the quarter and Adjusted net income* was $8.2 million ($0.03 per share);
• Gibraltar produced 27.1 million pounds of copper in the quarter. Average copper head grades were 0.23% and copper recoveries were 79% for the quarter;
• Although 7.6 million tons of ore was milled in the quarter, mill throughput was impacted by nearly three weeks of downtime in Concentrator #1 at the beginning of the quarter for the completion of the crusher relocation project, concurrent mill maintenance, and the ramp back up to full capacity;
• Gibraltar sold 26.3 million pounds of copper in the quarter at an average realized copper price of US$4.23 per pound;
• Total operating costs (C1)* for the quarter were US$2.92 per pound produced. Lower off-property costs are mainly due to favorably lower treatment and refining (“TCRC”) rates realized during the quarter as new offtake agreements begin to take effect;
• Construction of the Florence Copper commercial production facility continues to advance on schedule. A total of 34 production wells out of a total of 90 new wells had been completed as of September 30. Earthworks and site preparation for the plant area and commercial wellfield is estimated to be 75% complete and installation of structural steel, tanks, and process equipment is underway;
• An application has been made to the U.S. Department of Energy’s Qualifying Advanced Energy Project Credit (48C) Program for a tax credit of up to US$110 million, based on Florence Copper’s eligibility as a critical materials project. The Company expects to hear if it has been awarded the tax credit in mid-January 2025;
• On November 6, the Company entered into an amendment for its revolving credit facility,  extending the maturity date to November 2027 from July 2026, and increasing the facility amount to US$110 million from US$80 million. No amounts are drawn against the revolving credit facility;
• The Company issued 7.8 million shares under its At-the-Market (“ATM”) equity offering in the quarter and received net proceeds of $23.1 million.  Subsequently, the Company issued an additional 4.3 million shares under the ATM and received net proceeds of $14.2 million; and
• The Company had a cash balance of $209 million as at September 30, 2024.

*Non-GAAP performance measure. See end of news release

Highlights

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Effective as of March 25, 2024 the Company increased its ownership in Gibraltar from 87.5% to 100%.  As a result, the financial results reported in this MD&A include 100% of Gibraltar income and expenses for the period March 25, 2024 to September 30, 2024 (87.5% for the period March 16, 2023 to March 24, 2024, and 75% prior to March 15, 2023).  For more information on the Company’s acquisition of Cariboo, please refer to the Financial Statements – Note 3.

The Company finalized the accounting for the acquisition of its initial 50% interest in Cariboo from Sojitz and the related 12.5% interest in Gibraltar in the fourth quarter of 2023.  In accordance with the accounting standards for business combinations, the comparable financial statements as of September 30, 2023 and for the three and nine months then ended have been revised to reflect the changes in finalizing the consideration paid and the allocation of the purchase price to the assets and liabilities acquired.

*Non-GAAP performance measure. See end of news release

Review of Operations

Gibraltar mine

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Operations Analysis

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