Taseko Mines Ltd.: Taseko Announces First Quarter Fiscal 2008 Results
14.02.2008 | DGAP
TASEKO ANNOUNCES FIRST QUARTER FISCAL 2008 RESULTSFebruary 13, 2008, Vancouver, BC - Taseko Mines Limited ('Taseko' or the
'Company') (TSX: TKO; AMEX: TGB) announces its financial results including
production and sales for the Gibraltar Mine located near the City of
Williams Lake in south-central British Columbia. Dollar amounts are in
Canadian currency unless otherwise indicated.
For the three months ended December 31, 2007, Taseko reported an operating
profit of $19.2 million, and net earnings of $16.3 million or $0.12 per
share ($0.11 per share fully diluted).
Cash out-flow from operations in the quarter of $2.1 million is net of
positive contributions made to non-cash operating working capital,
totalling $20.4 million.
Financial results from operating activities during the quarter compared to
the same period in the prior year are shown in the table below:
Quarter Ended Quarter Ended
December 31, 2007 December 31, 2006
Revenue $44.9 million $56.4 million
Copper(1) $38.1 million $53.2 million
Molybdenum $6.8 million $3.2 million
Cash Flow(2) ($2.1 million) $25.5 million
Cash Flow per Share(basic) ($0.02) $0.20
Operating profit(3) $19.2 million $19.3 million
Earnings before income tax $15.0 million $17.4 million
Earnings after income tax $16.3 million $11.7 million
Earnings per share (basic) $0.12 $0.09
(1) Copper revenue in 2008 includes proceeds from sales of copper
concentrate and copper cathode.
(2) Cash flow and cash flow per share are numbers 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.
(3) Operating profit is comprised of revenues less cost of sales and
depletion, depreciation and amortization.
Gibraltar Mine
- For the quarter, Gibraltar produced 14.4 million pounds of copper
and 291,000 pounds of molybdenum.
- The average realized price for copper and molybdenum sales during
the quarter were US$3.26 per pound and US$32.18 per pound,
respectively.
- Copper sales were 12.2 million pounds. Copper inventory was 7.2
million pounds at the end of the quarter.
- Molybdenum sales were 210,000 pounds. Molybdenum inventory was
96,000 pounds at the end of the quarter.
- The Semi Autogenous Grinding ('SAG') mill was released from the
construction group to the Gibraltar operations team on December 27,
2007.
- The pro rata capacity for the Phase I concentrator expansion was
achieved on the secondary grinding line on February 1, 2008 - 30
days ahead of schedule.
First Quarter Fiscal 2008 Production
The following is a summary of the operating statistics for the first
quarter of 2008 (Q1 2008) compared to the same quarter in fiscal 2007 (Q1
2007).
Q1 - Fiscal 2008 Q1 - Fiscal 2007
Total tons mined (millions)(1) 10.1 7.7
Tons of ore milled (millions) 2.3 2.4
Stripping ratio 3.2 2.2
Copper grade (%) 0.364 0.284
Molybdenum grade (%Mo) 0.012 0.010
Copper recovery (%) 79.3 77.3
Molybdenum recovery (%) 50.4 26.2
Copper production (millions lb) 14.42 10.6
Molybdenum production (thousands lb) 291 120
Copper production costs, net of
by-product credits(3), per lb
of copper US$0.98 US$1.19
Off property costs for transport,
treatment (smelting & refining)
& sales per lb of copper US$0.44 US$0.33
Total cash costs of production net
of by-product credits(3), per lb
of copper US$1.42 US$1.52
(1) Total tons mined includes sulphide ore, oxide ore, low grade
stockpile material, overburden, and waste rock which were moved from
within pit limit to outside the pit limit during the period.
(2) 2008 copper production includes 13.4 M lb in concentrate and 1.0 M lb
in cathode.
(3) The by-product credit is based on pounds of molybdenum and ounces of
silver sold.
Tons mined in the first quarter of fiscal 2008 were 10.1 million tons, 31%
higher than the 7.7 million tons mined in the first quarter of fiscal 2007,
primarily as a result of improved operating efficiencies. Ore milled during
the quarter was essentially the same as Q1 2007, even though 30% of the
mill capacity was off-line during the month of December as part of the
Phase I expansion conversion, to integrate the new SAG mill into the
grinding circuit.
Copper recovery was higher in Q1 2008 compared with the same quarter in
fiscal 2007 as a result of the performance of the new flotation circuit and
higher head grades.
Copper in concentrate production during the quarter was 13.4 million
pounds, compared to 10.6 million pounds produced in the first quarter of
fiscal 2007. Copper in cathode production during the quarter was 1.0
million pounds, compared to nil in the same quarter of fiscal 2007.
Molybdenum production was significantly higher than in fiscal 2007, as the
mechanical issues experienced in the molybdenum circuit have been resolved.
Molybdenum in concentrate production in the quarter was 291,000 pounds, an
increase from 120,000 pounds in the same quarter of fiscal 2007.
Cost per pound of copper produced was lower in 2008 than the same quarter
in 2007 as a result of maintaining expenditure levels while increasing
copper and molybdenum production. Off-property costs increased during the
quarter as bulk ocean freight rates rose significantly related to higher
seasonal shipping prices, roasting fees for molybdenum increased and the
effect of the stronger Canadian dollar.
Concentrator Expansion Project
The two phase expansion underway at the concentrator facility at Gibraltar
is continuing on time and on budget. The first phase, now essentially
complete, has involved the installation of a new thirty-four foot diameter
SAG mill as well as installation of ten new flotation cells and other
upgrades. At the end of the quarter, the SAG mill was operational and the
full complement of new flotation cells had been operating for four months.
The 46,000 tons per day pro rata grinding capacity was reached in early
February.
The second phase of the expansion consists of modernizing and increasing
the capacity of the regrind, cleaner flotation, and concentrate circuits,
installing a two stage tailings pumping system and adding a pebble crusher
to the SAG mill circuit. Phase two is designed to increase concentrator
capacity to 55,000 tons per day. Design work, procurement, and construction
are proceeding on schedule for project completion by late 2008.
Prosperity Project
Taseko holds a 100% interest in the Prosperity property, located 125
kilometers southwest of the City of Williams Lake. The property hosts a
large porphyry gold-copper deposit amenable to open pit mining.
In September 2007, the Company announced the positive results of a
feasibility study for the Project. The Company is actively advancing
opportunities for improved economic performance through further
metallurgical testing and optimization of the concentrator flowsheet,
applying the most up-to-date facility designs and construction techniques,
and reducing indirect costs. Advanced engineering began in January 2008.
The Project is currently in the joint Federal/Provincial Environmental
Assessment process. The Department of Fisheries and Oceans, Transport
Canada, and Natural Resources Canada, have recommended to the Federal
Minster of Environment that the project be referred to a Joint Panel
Review. Provincially, the Executive Director of the Environmental
Assessment Office has also referred the project to the Provincial Minister
of Environment for a decision regarding a Joint Panel Review. Taseko is
actively engaged with federal and provincial regulatory agencies in the
review of the Project and are also engaged in discussions with local First
Nations and other communities.
Harmony Project
Taseko holds 100% of the Harmony gold project, located on the Queen
Charlotte-Haida Gwaii Islands on the northwest coast of British Columbia.
The Company has undertaken property maintenance and environmental
monitoring activities at Harmony since acquiring the project in 2001.
The Company initiated a review of engineering work on the project in late
2007 following the designation of the area as a mineral development zone
under the Queen Charlotte-Haida Gwaii Land and Resource Management Plan.
This review is continuing and plans to move the project ahead during 2008
are being evaluated.
Aley Project
Taseko acquired 100% of the Aley niobium project in northern British
Columbia in fiscal 2007. The Aley property hosts a niobium deposit.
Niobium is a metal used in making high strength steels required in the
manufacture of automobiles, bridges, pipes, jet turbines and other high
technology applications. The metal is currently selling for $30/kg and the
market is growing at 5-8% per year. Currently, the world supply is
dominated by only two producers: CBMM, a Brazilian miner, and Iamgold,
which operates the Niobec Mine in Quebec.
Taseko successfully completed an initial exploration program on the Aley
deposit in 2007, and is evaluating an accelerated drilling and engineering
work program in the summer of 2008 with the intention of advancing the Aley
Project toward a feasibility study.
Financial Results
Taseko reported revenues of $44.9 million for the quarter, compared to
$56.4 million in the first quarter of the prior year. The decrease in
revenue was largely the result of lower copper concentrate sales. In Q1
2008, sales were 11.8 million pounds compared to 16.9 million pounds in Q1
2007 because of timing of shipments. Management chose to retain inventory
in anticipation of lower seaborne costs and higher copper prices in 2008.
Revenues were also impacted by the increase in the value of the Canadian
dollar, but this was partially offset by significant increases in the
average price per pound of copper sold from US$2.77 per pound in fiscal
2007 to US$3.26 per pound in Q1 2008, and revenue from copper cathode sales
(0.44 million pounds) in Q1 2008. Cathode production had not yet begun in
Q1 2007.
Revenues in the first quarter consisted of copper concentrate sales of
$36.8 million (2007 - $53.2 million), copper cathode sales of $1.3 million
and molybdenum concentrate sales of $6.8 million (2007 - $3.3 million).
Cost of sales was $25.0 million, compared to $36.6 million for the same
period in fiscal 2007. Costs of sales includes total cost for metal
produced and sold, including treatment and transportation, during the
quarter of $26.7 million (2007 - $24.4 million) and a concentrate inventory
adjustment of ($1.6 million) (2007 - $13.2 million). The decrease in cost
of sales for the period was due to lower production costs per pound of
copper and lower sales volumes compared to Q1 2007.
Exploration expenses increased to $2.1 million in the first three months of
fiscal 2008, compared to $1.9 million for the same period in fiscal 2007.
The increase in expenditures during the current quarter is related to
activities on the Prosperity Project, including preparation of an
environmental impact assessment and ongoing engineering work. During the
quarter, the Company also capitalized $0.5 million (Q1 2007 - $1.0 million)
of exploration expenses related to increasing the reserves and mine life at
Gibraltar.
General and administrative costs increased to $2.0 million in the first
three months of fiscal 2008 compared to $1.4 million for the same period in
fiscal 2007. The main increase was attributable to higher staffing levels
and an increase in corporate activities relating to the Company's
acquisition and tax planning initiatives.
Stock-based compensation increased to $2.8 million in the current quarter,
compared to $0.8 million in the same period in fiscal 2007, as a result of
the amortization of stock compensation on options granted in the prior
fiscal year.
Interest and other income were $2.5 million as compared to $2.8 million in
2007. The decrease was due to interest earned on the Company's decreasing
average cash balances, prior to the completion of financings in late
October 27. Interest expense and interest accretion were the same as in
the first quarter of 2007.
Current income tax expense of $1.2 million was recorded in the quarter,
compared to $1.8 in the same period of fiscal 2007. In addition, the
Company had a future income tax recovery of $2.5 million in the current
quarter compared to future income tax expense of $3.8 million in the same
period of fiscal 2007. The decrease in current income taxes is due mainly
to the Company's ability to realize certain tax pools and a lower net
income for tax purposes this quarter when compared to the same quarter in
fiscal 2007. The future income tax recovery is mainly related to the
reduction in corporate tax rates announced by the Canadian government in
December 2007.
At December 31, 2007, Taseko had working capital of $90.8 million, as
compared to a $50.0 million at September 30, 2007. Bought deal and private
placement financings were completed during the quarter that added to
working capital.
Additional details can be found in the Company's Financial Statements and
Management Discussion and Analysis which are filed on www.sedar.com.
Taseko will host a conference call on Thursday February 14, 2008 at 11:00
a.m. Eastern Time (8:00 AM Pacific Time) to discuss these results. The
conference call may be accessed by dialing (877) 604-9670 in Canada and the
United States, or (719) 325-4846 internationally. A live and archived audio
webcast will also be available on the Company's website at
www.tasekomines.com.
The conference call will be archived for later playback until February 21,
2008 and can be accessed by dialing (888) 203-1112 in Canada and the United
States, or (719) 457-0820 and using the passcode 6549069.
For further information on the Company, please visit www.tasekomines.com 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 40-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.com
14.02.2008 Financial News transmitted by DGAP
Unternehmen: Taseko Mines Limited. - ISIN: CA8765111064
