TASEKO ANNOUNCES THIRD QUARTER RESULTS FOR FISCAL 2007
August 14, 2007, Vancouver, BC - Taseko Mines Limited ('Taseko' or the
'Company') (TSX: TKO; AMEX: TGB) announces its financial results for the
quarter ending June 30, 2007, including production and sales for the
Gibraltar Mine located near the City of Williams Lake in south-central
British Columbia. All dollar amounts are stated in Canadian currency
unless otherwise indicated.
Overview & Highlights
Taseko's cash flow from operations was $14.6 million and earnings were
$12.4 million or $0.10 per share ($0.09 per share fully diluted) for the
quarter ended June 30, 2007.
As shown in the table below, cash flow from operations for the quarter
increased by $2.2 million and net earnings increased by $8.3 million, over
the comparable period in the previous fiscal year.
Quarter Ended Quarter Ended
June 30, June 30,
2007 2006
Revenue1 $55.9 million $59.9 million
Copper $49.9 million2 $54.8 million
Molybdenum $5.6 million $5.1 million
Cash Flow3 $14.6 million $12.4 million
Cash Flow per Share $0.11 $0.11
(basic)
Earnings (after tax) $12.4 million $4.1 million
Earnings per share $0.10 $0.04
(basic)
1Includes revenue from sales of silver of $0.4 million (Q3-2007) and nil
(Q3-2006).
2Includes revenue from sales of copper cathode.
3Cash flow and cash flow per share are measures used by the Company to
assess its performance. They are not terms recognized under generally
accepted accounting principles. Cash flow is defined as cash flow from
operations including net change in working capital balances and cash flow
per share is the same measure divided by the number of common shares
outstanding during the period.
For the nine months ended June 30, 2007, Taseko had an operating profit of
$74.7 million and net earnings after tax of $35.6 million, as compared to
an operating profit of $33.8 million and net earnings after tax of $13.9
million for the same period in fiscal 2006.
For the quarter, Gibraltar produced 12.7 million pounds of copper, an
increase of 2.6 million pounds from the same period in 2006.
Taseko's realized prices for copper and molybdenum sales for the quarter
were US$3.53 per pound and US$31.95 per pound, respectively, reflecting the
Company's unhedged selling program.
The Phase 1 and Phase 2 mill and mine expansion and upgrades at the
Gibraltar Mine are on time and on budget.
$2.3 million was spent on drilling to further expand the Gibraltar
reserves.
Taseko spent $2.2 million during the quarter to advance the feasibility and
environmental assessment studies on the Prosperity Gold-Copper Project.
Gibraltar Mine
Third Quarter 2007 Production
The following table is a summary of the operating statistics for the third
quarter of fiscal 2007 compared to the same quarter in fiscal 2006.
Q3-Fiscal Q3-Fiscal
2007 2006
Total tons mined (millions)1 8.9 8.8
Tons of ore milled (millions) 2.4 2.4
Stripping ratio 2.6 2.7
Copper grade (%) 0.32 0.27
Molybdenum grade (%Mo) 0.010 0.015
Copper recovery (%) 76.4 79.6
Molybdenum recovery (%) 36.3 38.3
Copper production (millions lb) 12.73 10.1
Molybdenum production (thousands lb) 151 169
Copper production costs, net of by-product credits2, US$1.14 US$1.504
per lb of copper
Off property costs for transport, treatment US$0.32 US$0.50
(smelting & refining) & sales per lb of copper
Total cash costs of production per lb of copper US$1.46 US$2.00
1Total tons mined includes sulphide ore, oxide ore, low grade stockpile
material, overburden, and waste rock which were moved from within pit limit
to outside pit limit during the period.
2The by-product credit is based on pounds of molybdenum and ounces of
silver sold.
3Q3-2007 copper production includes 11.8 M lb in concentrate and 0.9 M lb
in cathode.
4Includes contractor overhead and mining lease costs. Copper production
cost for Q3-2006 is approximately US$0.37/lb above plan as a result of lost
production as a result of primary crusher failure.
Copper and molybdenum production for the quarter was affected by a fire in
an electrical control room in the secondary crusher in late April. Nine
days of mill production were lost to downtime resulting from repairs
directly related to fire damage. The mine continued to move waste rock
during the mill shutdown.
Copper and molybdenum recoveries were lower than previous quarters as a
result of the transition to the new 160 cubic meter flotation cells. On May
11, five of the new cells were operational, at which time the remaining
original and smaller cells were taken out of service and removed. The
concentrator's flotation capacity was reduced by approximately 10% from
that time until the next bank of five new cells was operational in
mid-July. All ten cells were in operation on schedule by mid-July, and
rougher flotation capacity has now been increased by 160%. This will be
sufficient to meet the capacity required for the Phase 1 and Phase 2
expansions.
Production from the solvent extraction/electrowinning (SX/EW) plant was
lower than expected during April and May as the operation worked through
cold weather and system start up issues. The plant produced over 500,000
pounds of copper in cathode in June, equating to an annual capacity of 6
million pounds.
Sales
- Copper concentrate sales for the quarter were 22,603 wet metric tonnes
('WMT'), containing 13.0 million pounds of copper.
- Copper cathode sales for the quarter were 0.6 million pounds.
- Molybdenum concentrate sales were 141 WMT, containing 138,164 pounds of
molybdenum.
Inventory
- Copper concentrate inventory at June 30, 2007 was 842 WMT (0.34 million
pounds of copper) a decrease in inventory from the 2,608 WMT (1.5
million pounds of copper) at the end of the previous quarter.
- Copper cathode inventory at the end of the quarter was 0.9 million
pounds, as compared to 0.6 million pounds in inventory at the end of
the previous quarter.
- At the end of the quarter, molybdenum in concentrate inventory was 27.4
WMT (27,396 pounds of molybdenum), compared to 14.9 WMT (14,408 pounds
of molybdenum) at the end of the previous quarter.
Concentrator Expansion Project
All ten new 160 cubic meter flotation cells were installed and operational
by mid-July. These new cells will improve copper and molybdenum recoveries
and provide sufficient capacity for planned increases in the concentrator
throughput.
The major Semi Autogenous Grinding (SAG) mill components were constructed
in Europe, and commenced shipment in July 2007. Delivery is on target for
August 2007. Mill motors and ancillary systems are on site at Gibraltar
and are being installed in the newly erected SAG mill building.
As a result of SAG mill installation and flotation upgrades, the ore
processing capacity of the concentrator at Gibraltar will increase from
36,750 to 46,000 tons per day (tpd) by the end of calendar 2007.
The Phase 2 expansion, announced in May 2007, is designed to increase
concentrator capacity from 46,000 to 55,000 tpd by late 2008. This project
consists of modernizing and increasing regrind capacity, cleaner flotation,
and concentrate circuits, installing a two stage pumping system, and adding
a pebble crusher to the SAG mill circuit. The engineering work is
proceeding on schedule, equipment will be ordered once the designs are
complete.
Labour
There were no lost time accidents during the quarter. The number of
personnel at the end of the quarter was 315, compared to 281 at the end of
the same quarter of fiscal 2006.
Exploration Drilling
A $5 million, 106,000-foot (32,300 m) second phase drilling program began
during the second quarter of fiscal 2007. During the quarter, 68 drill
holes were completed or in progress, totalling 64,000 feet (19,500 m)
drilled. A new reserve update will be completed by the end of fiscal 2007.
2007 Production Forecast
Copper and molybdenum production in the first nine months of 2007 was 35.1
million pounds and 431,000 pounds, respectively.
Milling and metal production achieved expected rates over extended periods
during the third quarter, and these quarter-on-quarter improvements are
expected to continue.
Prosperity Project
The Company is continuing to work with Hatch on the Prosperity feasibility
study.
The study is undergoing a thorough review and optimization, which will move
the final date for completing the report to the end of September 2007. Work
to date has achieved significant decreases in capital estimates and
operating expenses while maintaining concentrator throughput at 70,000
tonnes per day.
The Department of Fisheries and Oceans has recommended to the Federal
Minister of Environment that the Project be referred to a Joint Panel
Review. Taseko is actively engaged with federal and provincial regulatory
agencies in the review of the Project.
Financial Results
The Company's pre-tax earnings for the quarter ended June 30, 2007
increased to $19.1 million, compared to $9.7 million for the same period in
2006. The Company's after-tax earnings for the quarter ended June 30, 2007
increased to $12.4 million, compared to $4.1 million for the same period in
fiscal 2006.
The Company reported revenues of $55.9 million for the quarter, compared to
$59.9 million in the third quarter of 2006. The decrease was due to a
decrease in pounds of copper sold. Revenues for the quarter consisted of
copper concentrate sales of $47.8 million (Q3-2006 - $54.8 million);
molybdenum concentrate sales of $5.6 million (Q3-2006 - $5.2 million);
silver concentrate sales of $0.4 million (Q3-2006 - $1.1 million), and
copper cathode sales of $2.1 million (Q3-2006 - nil).
Cost of sales for the third quarter of fiscal 2007 was $26.1 million,
compared to $40.8 million for the same period in fiscal 2006. Costs of
sales consist of total production cost of $20.8 million (Q3-2006 - $22.7
million) for metal produced and sold during the quarter, plus a copper
inventory reduction adjustment of $0.6 million (Q3-2006 - $9.1 million),
and transportation and treatment costs of $4.7 million (Q3-2006 - $9.0
million). The decrease in cost of sales for the quarter was due to lower
sales quantities and lower waste to ore ratios in the Pollyanna Pit.
Mining and milling assets are amortized using the units of production
method based on tons mined and milled divided by the estimated tonnage to
be recovered in the mine plan. Amortization expense for the quarter was
$1.4 million compared to $0.8 million for the same period in fiscal 2006.
Despite an increase in recoverable reserves and expected mine life at
Gibraltar in fiscal 2007, amortization expense for the quarter was higher
than the prior year as a result of increased capitalization of deferred
exploration and additions of major mining equipment.
Exploration expenses for the quarter decreased to $2.2 million, compared to
$3.0 million for the same period in fiscal 2006. Although the Company
increased exploration at the Prosperity project, exploration expenses
decreased during the quarter because the Company capitalized $2.3 million
of the expenses related to increasing the reserves and life of the
Gibraltar Mine.
General and administrative costs for the quarter decreased to $1.3 million
from $2.4 million for the same period in fiscal 2006. Even though staffing
levels and corporate activities relating to the Company's acquisition and
tax planning initiatives were higher, there was a decrease in legal fees.
Legal fees in 2006 were higher due to an arbitration proceeding.
Stock-based compensation increased to $1.9 million, compared to $1.7
million in the same period in fiscal 2006, as a result of new share
purchase options and a higher fair value on the options granted during the
quarter.
The Company recorded a foreign exchange loss of $1.5 million in the
quarter, compared to a gain of $0.3 million in the same period in fiscal
2006. A significant portion of the Company's cash reserves are denominated
in US dollars. The weakening United States dollar caused the Company to
realize an exchange loss on its cash reserves.
Interest and other income increased to $2.4 million as compared to $1.6
million in Q3-2006. The increase was due to interest earned on the
Company's increasing cash balances.
Current and future income taxes of $6.7 million were recorded in the
quarter, compared to $5.6 million in the same period of fiscal 2006. The
increase in income taxes is due to the depletion of tax pools as a result
of the Company's continued profitability.
The Company also has a tax liability provision of $22.5 million (2006 -
$24.1 million) recorded on the Company's balance sheet. This provision
relates to an income tax expense recorded in fiscal 2004 for a subsidiary
company which management believes is less than likely of ever becoming
payable. For further details, see the Management Discussion and Analysis
for the year ending September 30, 2006.
Taseko will host a conference call on Wednesday, August 15 at 11:00 a.m.
Eastern Time (8:00 AM Pacific Time) to discuss these results. The
conference call may be accessed by dialing (800) 638-5439 or (617) 614-3945
internationally. The passcode is 11374323. A live and archived audio
webcast will also be available at
www.tasekomines.com in the Corporate
Events section of the Investor Centre. The quarterly financials will be
posted with this news release on the Company's website.
For further details on Taseko Mines Limited, please visit the website or
contact Investor Services at (604) 684-6365 or within North America at
1-800-667-2114.
Russell Hallbauer
President and CEO
No regulatory authority has approved or disapproved the information
contained in this news release.
Forward Looking Statements
This release includes certain statements that may be deemed
'forward-looking statements'. All statements in this release, other than
statements of historical facts, that address estimated resource quantities,
grades and contained gold, possible future mining, exploration and
development activities, are forward-looking statements. Although the
Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements should not
be in any way construed as guarantees of future performance and actual
results or developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results to
differ materially from those in forward-looking statements include market
prices for metals, the conclusions of detailed feasibility and technical
analyses, lower than expected grades and quantities of reserves or
resources, mining rates and recovery rates and the lack of availability of
necessary capital, which may not be available to the Company on terms
acceptable to it or at all. The Company is subject to the specific risks
inherent in the mining business as well as general economic and business
conditions. For more information on the Company, Investors should review
the Company's annual Form 20-F filing with the United States Securities and
Exchange Commission and its home jurisdiction filings that are available at
www.sedar.com.
Contact:
Brian Bergot
1020 · 800 W Pender St.
Vancouver BC
Canada V6C 2V6
Tel 604 684 · 6365
Fax 604 684 · 8092
Toll Free 1 800 667 · 2114
http://www.tasekomines.comDGAP 15.08.2007
Unternehmen: Taseko Mines Limited. - ISIN: CA8765111064
