Taseko Mines Reports Second Quarter Copper Production and Operational Update for Gibraltar Mine

Rhea-AI Summary

Taseko Mines (TSX: TKO, NYSE MKT: TGB, LSE: TKO) reports second quarter production of 20 million pounds of copper and 185,000 pounds of molybdenum at its Gibraltar Mine. Production was impacted by mill downtime for in-pit crusher relocation, maintenance activities, and an 18-day strike in June. The in-pit crusher move is now complete, and concentrator #1 is ramping up to full capacity. Concentrator #2 has been running consistently with improved throughput since January repairs. An insurance claim of US$22 million related to the previous issue is expected in Q3. Despite challenges, Taseko expects stronger production in H2 2024, with annual copper production estimated at 110-115 million pounds, slightly below the original 115 million pounds guidance.

Positive

• Insurance proceeds of US$22 million expected in Q3
• Concentrator #2 running consistently with improved throughput
• Stronger production expected in H2 2024
• In-pit crusher move completed

Negative

• Q2 production impacted by mill downtime and 18-day strike
• Annual copper production guidance reduced to 110-115 million pounds from 115 million pounds

Financial Analyst

Taseko Mines has reported its second-quarter copper production results, reflecting a combination of operational disruptions. Despite these setbacks, there are several key points for investors to focus on. Firstly, the company produced 20 million pounds of copper and 185,000 pounds of molybdenum, which, while impacted by the downtime and strike, still showcases their production capacity. The 18-day strike and the relocation of the in-pit crusher significantly hampered operations, yet these issues now appear to be resolved.

The announcement of an expected insurance claim settlement of $22 million in the third quarter is a positive financial injection that can help offset the operational disruptions. The company’s revised annual copper production guidance stands at 110 to 115 million pounds, slightly lower than the original target. This adjustment is important for investors to consider, as it aligns expectations more closely with the operational realities faced by the company.

For retail investors, it’s important to note the completion of key infrastructure projects such as the in-pit crusher and concentrator maintenance, which are expected to bolster production in the second half of the year. The company's ability to finalize the insurance claim is also noteworthy as it demonstrates effective risk management.

Market Research Analyst

The operational update from Taseko Mines casts light on several critical developments that could impact market sentiment. The disruptions faced during the second quarter, particularly the strike and maintenance activities, underscore the vulnerability of mining operations to labor and technical challenges. However, the ability of the company to resolve these issues swiftly and resume operations indicates strong operational management.

The insurance payout of $22 million is significant as it both supports the company's liquidity in the short term and mitigates the financial impact of the disruptions. Furthermore, the improved throughput of Concentrator #2 following its repair in January is a positive indicator for future productivity gains. The revised annual copper production guidance, while lower than initially anticipated, demonstrates a realistic approach by the management to align investor expectations with operational capabilities.

For investors, the expected stronger production in the second half of 2024 is an encouraging sign. However, it is prudent to monitor whether these improvements translate into consistent operational performance and financial results. The update provides a mixed yet cautiously optimistic outlook, underpinned by the strategic completion of critical maintenance and infrastructure projects.

VANCOUVER, BC, July 15, 2024 /PRNewswire/ - Taseko Mines Limited (TSX: TKO) (NYSE MKT: TGB) (LSE: TKO) ("Taseko" or the "Company") announces second quarter production results of 20 million pounds of copper and 185,000 pounds of molybdenum.

Metal production in the second quarter was impacted by mill downtime for the relocation of the in-pit crusher and concurrent maintenance activities in concentrator #1, as well as a strike by the mine's unionized workforce in June. The in-pit crusher move was completed in late May but the final installation work and the other mill maintenance was interrupted by the 18-day strike in June. This work resumed following the strike, when contractors were able to return to site, and is now completed. Concentrator #1 has restarted and is in the process of ramping up to full capacity.

Concentrator #2 has been running consistently and at improved throughput rates since the repair work in January. An insurance claim has now been finalized for this previous issue, and insurance proceeds of US$22 million are expected to be received in the third quarter.

Stuart McDonald, President & CEO of Taseko, commented, "Production in the second half of 2024 is expected to be stronger with the major project and maintenance work in both concentrators completed.  An updated mine plan and mill throughput opportunities are being evaluated to recover some of the production that was lost during the strike.  Copper production for the year is expected to be in the range of 110 to 115 million pounds, compared to original guidance of 115 million pounds."

Stuart McDonald
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 about the future market price of copper and the other metals that we produce or may seek to produce;
• changes in general economic conditions, the financial markets, inflation and interest rates and in the demand and market price for our input costs, such as diesel fuel, reagents, 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;
• uncertainties resulting from the war in Ukraine, and the accompanying international response including economic sanctions levied against Russia, which has disrupted the global economy, created increased volatility in commodity markets (including oil and gas prices), and disrupted international trade and financial markets, all of which have an ongoing and uncertain effect on global economics, supply chains, availability of materials and equipment and execution timelines for project development;
• uncertainties about the continuing impact of the novel coronavirus ("COVID-19") and the response of local, provincial, state, federal and international governments to the ongoing threat of COVID-19, on our operations (including our suppliers, customers, supply chains, employees and contractors) and economic conditions generally including rising inflation levels and in particular with respect to the demand for copper and other metals we produce;
• inherent risks associated with mining operations, including our current mining operations at Gibraltar, and their potential impact on our ability to achieve our production estimates;
• uncertainties as to our ability to control our operating costs, including inflationary cost pressures at Gibraltar without impacting our planned copper production;
• the risk of inadequate insurance or inability to obtain insurance to cover material mining or operational risks;
• uncertainties related to the feasibility study for Florence copper project (the "Florence Copper Project" or "Florence Copper") that provides estimates of expected or anticipated capital and operating costs, expenditures and economic returns from this mining project, including the impact of inflation on the estimated costs related to the construction of the Florence Copper Project and our other development projects;
• the risk that the results from our operations of the Florence Copper production test facility ("PTF") and ongoing engineering work including updated capital and operating costs will negatively impact our estimates for current projected economics for commercial operations at Florence Copper;
• uncertainties related to the accuracy of our estimates of Mineral Reserves (as defined below), Mineral Resources (as defined below), production rates and timing of production, future production and future cash and total costs of production and milling;
• the risk that we may not be able to expand or replace reserves as our existing mineral reserves are mined;
• the availability of, and uncertainties relating to the development of, additional financing and infrastructure necessary for the advancement of our development projects, including with respect to our ability to obtain any remaining construction financing potentially needed to move forward with commercial operations at Florence Copper;
• our ability to comply with the extensive governmental regulation to which our business is subject;
• uncertainties related to our ability to obtain necessary title, licenses and permits for our development projects and project delays due to third party opposition;
• our ability to deploy strategic capital and award key contracts to assist with protecting the Florence Copper project execution plan, mitigating inflation risk and the potential impact of supply chain disruptions on our construction schedule and ensuring a smooth transition into construction;
• uncertainties related to First Nations claims and consultation issues;
• our reliance on rail transportation and port terminals for shipping our copper concentrate production from Gibraltar;
• 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 and mine closure and bonding requirements;
• our dependence solely on our 87.5% interest in Gibraltar (as defined below) for revenues and operating cashflows;
• our ability to collect payments from customers, extend existing concentrate off-take agreements or enter into new agreements;
• environmental issues and liabilities associated with mining including processing and stock piling ore;
• labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate our mine, industrial accidents, equipment failure or other events or occurrences, including third party interference that interrupt the production of minerals in our mine;
• environmental hazards and risks associated with climate change, including the potential for damage to infrastructure and stoppages of operations due to forest fires, flooding, drought, or other natural events in the vicinity of our operations;
• litigation risks and the inherent uncertainty of litigation, including litigation to which Florence Copper could be subject to;
• our actual costs of reclamation and mine closure may exceed our current estimates of these liabilities;
• our ability to meet the financial reclamation security requirements for the Gibraltar mine and Florence Project;
• the capital intensive nature of our business both to sustain current mining operations and to develop any new projects, including Florence Copper;
• our reliance upon key management and operating personnel;
• the competitive environment in which we operate;
• the effects of forward selling instruments to protect against fluctuations in copper prices, foreign exchange, interest rates or input costs such as fuel;
• 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; and Management Discussion and Analysis ("MD&A"), quarterly reports and material change reports filed with and furnished to securities regulators, and those risks which are discussed under the heading "Risk Factors".

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.sedarplus.ca, including the "Risk Factors" included in our Annual Information Form.

 

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SOURCE Taseko Mines Limited

FAQ

What was Taseko Mines' copper production in Q2 2024?

Taseko Mines reported copper production of 20 million pounds in the second quarter of 2024.

How did the strike affect Taseko's Gibraltar Mine operations in Q2 2024?

The 18-day strike in June 2024 interrupted the final installation work of the in-pit crusher and other mill maintenance activities at Taseko's Gibraltar Mine.

What is Taseko's revised copper production guidance for 2024?

Taseko expects copper production for 2024 to be in the range of 110 to 115 million pounds, compared to the original guidance of 115 million pounds.

How much insurance proceeds does Taseko (TGB) expect to receive in Q3 2024?

Taseko Mines expects to receive US$22 million in insurance proceeds in the third quarter of 2024 related to previous issues with Concentrator #2.