Taseko Reports First Quarter 2025 Earnings

Hamilton Spectator

01-05-2025

VANCOUVER, British Columbia, May 01, 2025 (GLOBE NEWSWIRE) — Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) ('Taseko' or the 'Company') reports first quarter 2025 Adjusted EBITDA* of $34 million and Earnings from mining operations before depletion and amortization and non-recurring items* of $39 million. Revenues for the first quarter were $139 million from the sale of 22 million pounds of copper and 364 thousand pounds of molybdenum. The Company recorded a Net loss of $29 million ($0.09 loss per share) and an Adjusted net loss* of $7 million ($0.02 loss per share).
Gibraltar produced 20 million pounds of copper and 336 thousand pounds of molybdenum in the first quarter at Total operating costs (C1) of US$2.26 per pound of copper produced. Mill throughput averaged 87,800 tons per day, which was above design capacity. Copper grades in the quarter averaged 0.19% and copper recoveries were 68%.
At Florence Copper, construction remains on schedule and as of the end of March the overall project completion was at 78%. Construction of the SX/EW plant, surface infrastructure and the wellfield drilling are tracking to plan. In the wellfield, drilling is nearly complete and the last two wells will be constructed in May. The electrowinning crane has been installed in the plant, allowing the building structure to be completed. Construction of surface infrastructure is also advancing on schedule, including work on the pipe corridor, electrical substation, tank farm, and office and dry buildings.
Stuart McDonald, President and CEO of Taseko, commented, 'Through the first 15 months of construction at Florence Copper, all critical aspects of the project remain on schedule and our operating plans are well developed. In the coming months, site construction activities will begin to slow down and in the fall we expect to commence wellfield operations as we advance towards first copper cathode production later in the year. Our project team remains focussed on continued execution of the remaining construction activities, and our growing operations team is planning for the production ramp up in 2026.'
'At our Gibraltar mine, mill throughput exceeded design capacity in the first quarter and head grades were in line with plan. But copper production in the quarter was impacted by lower than expected metallurgical recoveries from oxidized ore. Also, challenging ground conditions at the top of the current Connector pit pushback have led to lower mining productivities in recent months which will delay the release of higher-grade ore from the second quarter to the third quarter. As a result, copper production for 2025 is expected to be about 10 million pounds (~8%) lower than our previous guidance. Significantly higher grades and recoveries are expected in the second half of this year and into 2026', continued Mr. McDonald.
Mr. McDonald concluded, 'With less than nine months until the startup of Florence Copper, America's next copper mine, Taseko is approaching a period of significant production and cashflow growth. We are uniquely positioned as the North American copper producer with both near-term production growth and a longer-term growth pipeline.'
*Non-GAAP performance measure. See end of news release.
First Quarter Review
*Non-GAAP performance measure. See end of news release.
Highlights
On March 25, 2024, the Company completed its acquisition of the remaining 50% interest in Cariboo Copper Corp. ('Cariboo') from Dowa Metals & Mining Co., Ltd. ('Dowa') and Furukawa Co., Ltd. ('Furukawa') increasing its effective interest in Gibraltar from 87.5% to 100%. As a result, the financial results reported in this MD&A reflect the Company's 87.5% effective interest for the period from March 15, 2023 to March 25, 2024 and 100% effective interest thereafter. For more information on the Company's acquisition of Cariboo, refer to the Financial Statements—Note 12.
*Non-GAAP performance measure. See end of news release.
Review of Operations
Gibraltar mine
Operations Analysis
In the first quarter, mining activity at Gibraltar was focused on waste stripping for a new pushback in the Connector pit, which resulted in a higher than normal strip ratio and lower mined ore in the period. Lower grade stockpiled ore was the primary source of mill feed, resulting in lower copper production compared to recent quarters.
Gibraltar produced 20.0 million pounds of copper in the first quarter and copper head grade was 0.19%, well below average reserve grade. Copper recovery was 68% and was notably impacted by oxidation in the stockpiled ore which mainly originated from the upper benches of the Connector pit. Mill throughput was 7.9 million tons in the quarter, above nameplate capacity due to the lower work index ore in the Connector pit.
A total of 23.2 million tons were mined in the first quarter comparable to recent quarters. The average strip ratio was 4.6, as a total of 4.2 million tons of ore were mined. This includes 2.2 million tons of oxide ore that was added to the heap leach pads as plans for restart of the solvent extraction and electrowinning ('SX/EW') plant continue in Q2 2025.
*Non-GAAP performance measure. See end of news release.
Operations Analysis - Continued
Capitalized stripping totaling $38.1 million was higher in the first quarter attributed to greater mining of waste tons above the average strip ratio for the Connector pit. Total site costs* including capitalized stripping was $107.0 million in the quarter consistent with the comparative prior year quarter. Decreased consumption of mining inputs such as diesel and explosives due to processing of stockpile material as well as lower diesel prices were offset by higher milling costs.
Molybdenum production was 336 thousand pounds in the first quarter compared to 247 thousand pounds in the comparative prior year quarter. Higher molybdenum grades, on average, are expected in Connector pit ore. Grades will improve as stockpile ore feed decreases. At an average molybdenum price of US$20.53 per pound for the quarter, molybdenum contributed a meaningful by-product credit of US$0.33 per pound of copper produced.
Off-property costs were US$0.18 per pound of copper produced. These lower costs reflect Gibraltar's 2025 offtake agreements with very favorable treatment and refining charges ('TCRC'). On a blended basis, TCRCs are effectively nil for this year.
Total operating cost (C1)* was US$2.26 per pound of copper produced in the first quarter compared to US$2.46 in the comparative prior year quarter. Higher capitalized stripping costs, improved molybdenum by-product credits, and lower off property costs all contributed to driving down total operating cost (C1), partially offset by the effect of lower copper production as shown in the bridge graph below:
https://www.globenewswire.com/NewsRoom/AttachmentNg/9f3402ff-ad47-4f4b-9681-3c1f27945454
Gibraltar Outlook
Mining activities are now focused in the Connector pit, which will be the source of mill feed in 2025 and the years ahead. Copper production in the first quarter was approximately 10% below expectations, due to low recoveries from oxidized ore. In addition, mining rates in the upper benches of Connector pit have been behind plan due to challenging ground conditions resulting in lower equipment productivities. As a result, access to higher quality ore has been delayed from the second quarter to the third quarter, and annual copper production for 2025 is expected to be approximately 10 million pounds below the previous guidance of 120 to 130 million pounds. Significant increases in head grades and recoveries are expected in the second half of 2025 and continuing into 2026.
*Non-GAAP performance measure. See end of news release.
Gibraltar Outlook - Continued
Increased mill availability and higher throughput is also expected this year, as major maintenance projects were completed in both mills last year. Refurbishment of the Gibraltar SX/EW plant, which has been idle since 2015, is nearing completion, with first cathode production expected in the second quarter, supplementing Gibraltar copper concentrate production.
Molybdenum production is forecast to increase in 2025 as molybdenum grades are expected to be notably higher as more Connector pit ore is processed, also weighted to the second half of the year.
The Company has offtake agreements covering Gibraltar concentrate production in 2025 and 2026, which contain significantly lower, and in certain cases negative (premium), TCRC rates reflecting the tightening copper smelting market. In 2024, TCRCs accounted for approximately US$0.09 per pound of off-property costs, and, with the new offtake agreements, the Company expects average TCRCs to reduce to nil in 2025 and 2026.
Potential US import tariffs are not expected to have a material impact on sales at Gibraltar as the mine produces copper and molybdenum concentrates that are sold to international metal traders and delivered to Asian markets. Offtake agreements are in place for substantially all of Gibraltar's copper concentrate production in 2025 and 2026, and no changes to these sales channels are expected during this period.
The Company has a prudent hedging program in place to protect a minimum copper price and Gibraltar cash flow during the Florence Copper construction period. Currently, the Company has copper collar contracts in place that secure a minimum copper price of US$4.00 per pound for 81 million pounds of copper production for the remainder of 2025 (refer to 'Financial Condition Review—Hedging Strategy' for details).
Florence Copper
The Company has all key permits in place for the commercial production facility at Florence and construction of the Florence Copper commercial production facility continues to advance on schedule. Approximately 670,000 project hours have been worked with no reportable injuries or environmental incidents. The Company has a fixed-price contract with the general contractor for construction of the SX/EW plant and associated surface infrastructure.
A total of 80 production wells out of a total of 90 new wells to be drilled during the construction phase have been completed as of March 31, 2025. Process ponds and surface water runoff pond construction are complete, and installation of high-density polyethylene piping in the main pipeline corridor continued. Mechanical and piping installations throughout the SX/EW plant and electrical work continue to advance. Assembly of the modular office and dry buildings were also completed, and work on the exterior finishing has started.
Site activities are focused on hiring additional personnel and other initiatives to support operational readiness and the ramp up of production.
Florence Copper - Continued
Florence Copper commercial facility construction costs were US$51.4 million in the first quarter and, since the beginning of construction, US$206.3 million has been incurred on the Florence Copper commercial facility as of March 31, 2025.
In January 2025, the Company received its final US$10 million instalment from its US$50 million copper stream with Mitsui & Co. (U.S.A.) Inc. ('Mitsui'). The remaining Florence Copper commercial production facility construction costs are expected to be funded from the Company's available liquidity and cash flows from Gibraltar.
The Company has a technical report titled 'NI 43-101 Technical Report Florence Copper Project, Pinal County, Arizona' dated March 30, 2023 (the 'Florence 2023 Technical Report') on SEDAR+. The Florence 2023 Technical Report was prepared in accordance with National Instrument 43‑101 ('NI 43-101') and incorporated the results of test work from the production test facility ('PTF') as well as updated capital and operating costs (Q3 2022 basis) for the commercial production facility.
Project highlights based on the Florence 2023 Technical Report are detailed below:
Based on the Florence 2023 Technical Report, the estimated construction costs for the Florence Copper commercial production facility were US$232 million and management expects that total construction costs will be within a range of 10% to 15% higher than this estimate. Florence Copper remains on track for first copper cathode production in Q4 2025.
Long-term Growth Strategy
Taseko's strategy has been to grow the company by acquiring and developing a pipeline of projects focused on copper in North America. We continue to believe this will generate long-term returns for shareholders. Our other development projects are located in BC, Canada.
Yellowhead copper project
The Yellowhead copper project ('Yellowhead') is expected to produce 4.4 billion pounds of copper over a 25-year mine life. During the first 5 years of operation, Yellowhead is expected to produce an average of 200 million pounds of copper per year. Yellowhead also contains valuable precious metal by-products with 440,000 ounces of gold production and 19 million ounces of silver production over the life of mine. The Yellowhead project is subject of technical report published in January 2020.
Taseko plans to publish an updated technical report on Yellowhead in 2025 using updated long-term metal price assumptions, updated project costing, and incorporating the new Canadian tax credits available for copper mine development.
The Company is ready to enter the environmental assessment ('EA') process and plans to submit an Initial Project Description to formally commence the EA process with regulators in Q2 2025. The Company is focusing discussions with regulators on developing a streamlined permitting process. Taseko also opened a Yellowhead project office in 2024 to support ongoing engagement with local communities including First Nations.
New Prosperity copper-gold project
In late 2019, the Tŝilhqot'in Nation, as represented by the Tŝilhqot'in National Government, and Taseko entered into a confidential dialogue, with the involvement of the Province of BC, seeking a long-term resolution to the conflict regarding Taseko's proposed copper-gold mine previously known as New Prosperity, acknowledging Taseko's commercial interests and the Tŝilhqot'in Nation's opposition to the project.
This dialogue has been supported by the parties' agreement, beginning December 2019, to a series of standstill agreements on certain outstanding litigation and regulatory matters relating to Taseko's tenures and the area in the vicinity of Teẑtan Biny (Fish Lake).
This dialogue process has made meaningful progress in recent months and is close to completion. The Tŝilhqot'in Nation and Taseko acknowledge the constructive nature of discussions, and the opportunity to conclude a long-term and mutually acceptable resolution of the conflict that also makes an important contribution to the goals of reconciliation in Canada.
For further information on Taseko, please see the Company's website at
www.tasekomines.com
or contact:
Brian Bergot, Vice President, Investor Relations – 778-373-4554, toll free 1-800-667-2114
Stuart McDonald
President & CEO
No regulatory authority has approved or disapproved of the information in this news release.
Non-GAAP Performance Measures
This MD&A includes certain non-GAAP performance measures that do not have a standardized meaning prescribed by IFRS. These measures may differ from those used by, and may not be comparable to such measures as reported by, other issuers. The Company believes that these measures are commonly used by certain investors, in conjunction with conventional IFRS measures, to enhance their understanding of the Company's performance. These measures have been derived from the Company's financial statements and applied on a consistent basis. The following tables below provide a reconciliation of these non-GAAP measures to the most directly comparable IFRS measures.
Total operating cost and site operating cost, net of by-product credit
Total operating cost includes all costs absorbed into inventory, as well as transportation costs and insurance recoverable. Site operating cost is calculated by removing net changes in inventory, depletion and amortization, insurance recoverable, and transportation costs from cost of sales. Site operating cost, net of by-product credit is calculated by subtracting by-product credits from site operating cost. Site operating cost, net of by-product credit per pound is calculated by dividing the aggregate of the applicable costs by pounds of copper produced. Total operating cost per pound is the sum of site operating costs, net of by-product credits and off-property costs divided by pounds of copper produced. By-product credit is calculated based on actual sales of molybdenum (net of treating costs) and silver during the period divided by the total pounds of copper produced during the period. These measures are calculated on a consistent basis for the periods presented.
Non-GAAP Performance Measures - Continued
Total site costs
Total site costs include site operating costs charged to cost of sales and mining costs capitalized to property, plant and equipment in the period. This measure is intended to capture total site operating costs incurred during the period calculated on a consistent basis for the periods presented.
Adjusted net income (loss) and Adjusted EPS
Adjusted net income (loss) removes the effect of the following transactions from net income (loss) as reported under IFRS:
Management believes these transactions do not reflect the underlying operating performance of the Company's core mining business and are not necessarily indicative of future operating results. Furthermore, unrealized gains and losses on derivative instruments, changes in the fair value of financial instruments, and unrealized foreign currency gains and losses are not necessarily reflective of the underlying operating results for the periods presented.
Non-GAAP Performance Measures - Continued
Adjusted earnings per share ('Adjusted EPS') is Adjusted net income (loss) attributable to common shareholders of the Company divided by the weighted average number of common shares outstanding for the period.
Non-GAAP Performance Measures - Continued
Adjusted EBITDA
Adjusted earnings before interest, taxes, depreciation and amortization ('Adjusted EBITDA') is presented as a supplemental measure of the Company's performance and ability to service debt. Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, many of which present adjusted EBITDA when reporting their results. Issuers of 'high yield' securities also present adjusted EBITDA because investors, analysts and rating agencies considering it useful in measuring the ability of those issuers to meet debt service obligations.
Adjusted EBITDA represents net income before interest, income taxes, depreciation and amortization, and also eliminates the impact of a number of transactions that are not considered indicative of ongoing operating performance. Certain items of expense are added back and certain items of income are deducted from net income that are not likely to recur or are not indicative of the Company's underlying operating results for the reporting periods presented or for future operating performance and consist of:
Non-GAAP Performance Measures - Continued
Non-GAAP Performance Measures - Continued
Earnings from mining operations before depletion, amortization and non-recurring items
Earnings from mining operations before depletion, amortization and non-recurring items is earnings from mining operations with depletion and amortization, and any items that are not considered indicative of ongoing operating performance added back. The Company discloses this measure, which has been derived from the Company's financial statements and applied on a consistent basis, to assist in understanding the results of the Company's operations and financial position, and it is meant to provide further information about the financial results to investors.
Site operating costs per ton milled
The Company discloses this measure, which has been derived from the Company's financial statements and applied on a consistent basis, to provide assistance in understanding the Company's site operations on a tons milled basis.
Technical Information
The technical information contained in this MD&A related to Florence Copper is based on the report titled 'NI 43‑101 Technical Report – Florence Copper Project, Pinal County, Arizona' issued March 30, 2023 with an effective date of March 15, 2023, which is available on SEDAR+. The Florence Copper technical report was prepared under the supervision of Richard Tremblay, P. Eng., MBA, Richard Weymark, P. Eng., MBA, and Robert Rotzinger, P. Eng. Mr. Tremblay is employed by the Company as Chief Operating Officer, Mr. Weymark is employed by the Company as Vice President, Engineering, and Mr. Rotzinger is employed by the Company as Vice President, Capital Projects. All three are Qualified Persons as defined by NI 43‑101.
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:
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.com
.
Cautionary Statement on Forward-Looking Information
This discussion includes certain statements that may be deemed 'forward-looking statements'. All statements in this discussion, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities, and events or developments that the Company expects are forward-looking statements. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not 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, exploitation and exploration successes, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. All of the forward-looking statements made in this MD&A are qualified by these cautionary statements. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable law. Further information concerning risks and uncertainties associated with these forward-looking statements and our business may be found in our most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities.