This release should be
read with the Company's Financial Statements and Management
Discussion & Analysis ("MD&A"), available at
www.tasekomines.com and
filed on www.sedar.com.
Except where otherwise noted, all currency amounts are stated in
Canadian dollars. Taseko's 75% owned Gibraltar Mine is located
north of the City of Williams Lake in south-central British
Columbia. Production and sales volumes stated in this release are
on a 100% basis unless otherwise indicated.
|
VANCOUVER, BC,
May 4, 2022 /PRNewswire/
- Taseko Mines Limited (TSX: TKO) (NYSE American: TGB) (LSE:
TKO) ("Taseko" or the "Company") reports Adjusted EBITDA* of
$38 million for the first quarter
2022, a 61% increase over the same period 2021. Earnings from
mining operations before depletion* was $43
million and Cash flows provided by operations was
$52 million for the quarter. Adjusted
net income* was $6 million, or
$0.02 per share.
Stuart McDonald, President and
CEO of Taseko, stated, "Copper markets continue to be robust and
Taseko's realized copper price of US$4.59 per pound and sales volumes of 27 million
pounds drove strong financial results in the first quarter.
Production of 21 million pounds of copper and 236 thousand pounds
of molybdenum was on plan, as development of the upper benches of
the Gibraltar pit progressed. The
Gibraltar pit will be the primary
source of ore for the remainder of this year and grade and
continuity of mineralization are expected to gradually improve as
mining advances to deeper benches. Softer ore in the Gibraltar pit is allowing for increased
milling rates, in line with our expectations and historical
performance. Mill throughput averaged over 87,000 tons per day in
March, and 90,000 tons per day in April, well above name plate
capacity. We continue to expect 2022 copper production of 115
million pounds (+/-5%), with production weighted to the back half
of the year."
Mr. McDonald added, "We are seeing some inflationary pressures
on certain input costs, most notably higher diesel prices, which
contributed to an overall 9% (or $7
million) increase in total site costs* at Gibraltar this quarter. Operating margins are
expected to improve as copper production increases over the
remainder of the year."
"In March, we announced a new 40% larger mineral reserve for
Gibraltar, extending the mine from
16 to 23 years. The new reserve has the same average grade as the
previous, but with a slightly higher strip ratio in the latter half
of the mine life. The increase in reserves was a result of updating
pit designs using a copper price of US$3.05 per pound (previously US$2.75 per pound), which is still conservative
but more in line with the current long-term consensus price of
US$3.50 per pound. The after-tax NPV8
of Gibraltar at the long-term
consensus price is now $1.1 billion
for Taseko's 75% share of the mine," continued Mr. McDonald.
"At Florence Copper, we are still waiting for the draft
Underground Injection Control ("UIC") permit to be issued by the US
Environmental Protection Agency ("EPA"), which will initiate the
45-day public comment period. This process is taking longer than
expected, but we are in regular contact with the EPA who continue
to confirm that the process is advancing towards the issuance of
the draft UIC permit shortly. During the first quarter, we spent a
further $25 million on procurement of
long-lead time items and other pre-construction work. We are well
positioned to move into the construction of the commercial
production facility upon receipt of the final permit," concluded
Mr. McDonald.
First Quarter Review
- First quarter earnings from mining operations before depletion
and amortization* was $42.8 million,
Adjusted EBITDA* was $38.1 million
and cash flow from operations was $51.8
million;
- Gibraltar sold 27.4 million
pounds of copper in the quarter (100% basis) at record average
realized copper prices of US$4.59 per
pound in the quarter resulting in $118.3
million of revenue for Taseko;
- The Gibraltar mine produced
21.4 million pounds of copper and 236 thousand pounds of molybdenum
in the first quarter. Copper head grades were 0.19% and copper
recoveries were 80.2%;
- Total site costs* increased by 9% in the quarter primarily due
to the impact of higher diesel costs;
- Adjusted net income* was $6.2
million ($0.02 per share) and
GAAP Net income was $5.1 million
($0.02 per share) and were
reduced by a $2.3 million realized
derivative loss ($0.01 per share)
related to copper options that expired in the quarter;
- The Company has approximately $273
million of available liquidity at March 31, 2022, including a cash balance of
$213 million and its undrawn
US$50 million revolving credit
facility;
- Development costs incurred for Florence Copper were
$25.2 million in the quarter and
included further payments for major processing equipment for the
SX/EW plant, other pre-construction activities and ongoing site
costs;
- The Company now has copper collar contracts in place that
secure a minimum copper price of US$4.00 per pound for more than 90% of its
attributable production in 2022;
- The EPA continues to advance their review process and is
expected to publicly issue the draft Underground Injection Control
permit shortly, and then a public comment period will commence;
and
- In March 2022, the Company announced a new 706 million
ton proven and probable sulphide reserve for the Gibraltar mine, a 40% increase as of
December 31, 2021. The new reserve
estimate allows for a significant extension of the mine life to 23
years with total recoverable metal of 3.0 billion pounds of copper
and 53 million pounds of molybdenum.
*Non-GAAP performance
measure. See end of news release
|
HIGHLIGHTS
Operating Data
(Gibraltar - 100% basis)
|
Three months ended
March 31,
|
|
2022
|
2021
|
Change
|
Tons mined
(millions)
|
20.3
|
32.0
|
(11.7)
|
Tons milled
(millions)
|
7.0
|
7.2
|
(0.2)
|
Production (million
pounds Cu)
|
21.4
|
22.2
|
(0.8)
|
Sales (million pounds
Cu)
|
27.4
|
22.0
|
5.4
|
Financial
Data
|
Three months ended
March 31,
|
(Cdn$ in thousands,
except for per share amounts)
|
2022
|
2021
|
Change
|
Revenues
|
118,333
|
86,741
|
31,592
|
Earnings from mining
operations before depletion and amortization*
|
42,773
|
30,313
|
12,460
|
Cash flows provided by
(used for) operations
|
51,753
|
(3,283)
|
55,036
|
Adjusted
EBITDA*
|
38,139
|
23,722
|
14,417
|
Adjusted net income
(loss)*
|
6,162
|
(5,534)
|
11,696
|
Per share - basic
("Adjusted EPS")*
|
0.02
|
(0.02)
|
0.04
|
Net income (loss)
(GAAP)
|
5,095
|
(11,217)
|
16,312
|
Per share - basic
("EPS")
|
0.02
|
(0.04)
|
0.06
|
|
*Non-GAAP performance
measure. See end of news release
|
REVIEW OF OPERATIONS
Gibraltar mine (75%
Owned)
Operating data (100%
basis)
|
|
Q1
2022
|
Q4
2021
|
Q3
2021
|
Q2
2021
|
Q1
2021
|
Tons mined
(millions)
|
|
20.3
|
23.3
|
25.2
|
24.9
|
32.0
|
Tons milled
(millions)
|
|
7.0
|
7.4
|
7.4
|
7.2
|
7.2
|
Strip ratio
|
|
2.6
|
2.2
|
1.3
|
2.3
|
6.0
|
Site operating cost per
ton milled (Cdn$)*
|
|
$11.33
|
$9.94
|
$8.99
|
$9.16
|
$8.73
|
Copper
concentrate
|
|
|
|
|
|
|
Head grade
(%)
|
|
0.19
|
0.24
|
0.28
|
0.22
|
0.19
|
Copper
recovery (%)
|
|
80.2
|
80.4
|
84.2
|
83.3
|
81.5
|
Production
(million pounds Cu)
|
|
21.4
|
28.8
|
34.5
|
26.8
|
22.2
|
Sales
(million pounds Cu)
|
|
27.4
|
23.8
|
32.4
|
26.7
|
22.0
|
Inventory
(million pounds Cu)
|
|
4.0
|
9.9
|
4.9
|
3.5
|
3.6
|
Molybdenum
concentrate
|
|
|
|
|
|
|
Production
(thousand pounds Mo)
|
|
236
|
450
|
571
|
402
|
530
|
Sales
(thousand pounds Mo)
|
|
229
|
491
|
502
|
455
|
552
|
Per unit data (US$
per pound produced)*
|
|
|
|
|
|
|
Site
operating costs*
|
|
$2.95
|
$2.02
|
$1.53
|
$2.02
|
$2.23
|
By-product
credits*
|
|
(0.18)
|
(0.30)
|
(0.25)
|
(0.25)
|
(0.27)
|
Site operating costs,
net of by-product credits*
|
|
$2.77
|
$1.72
|
$1.28
|
$1.77
|
$1.96
|
Off-property
costs
|
|
0.36
|
0.22
|
0.29
|
0.25
|
0.27
|
Total operating costs
(C1)*
|
|
$3.13
|
$1.94
|
$1.57
|
$2.02
|
$2.23
|
First Quarter Review
Copper production in the first quarter was 21.4 million pounds
and was impacted by lower grades and recoveries from ore mined in
the upper benches of the Gibraltar
pit. Ore quality is expected to improve for the remainder of the
year as mining progresses deeper into the Gibraltar pit.
A total of 20.3 million tons were mined in the first quarter
with the decrease from 2021 rates due to longer haul distances in
the current phase of mining. Heavy snowfall coupled with
extremely cold temperatures also impacted mine equipment and mill
availabilities in January. Mill throughput improved throughout the
quarter exceeding name plate capacity (85,000 tpd) by 3% in March
due to the softer nature of Gibraltar ore.
The strip ratio increased over the prior quarter due to the
higher initial stripping rates of the Gibraltar pit. Gibraltar ore will make up the balance of ore
for the rest of 2022 as mining in the current phase of Pollyanna
will be completed in the second quarter. Ore stockpiles also
decreased by 1.4 million tons in the first quarter in accordance
with the mine plan.
Total site costs* at Gibraltar
of $75.0 million (which includes
capitalized stripping of $15.1
million) for Taseko's 75% share was $6.4 million higher than the same quarter last
year due primarily to higher diesel prices which were 46% higher
than 2021, rising steel prices in grinding media as well as
increases in other mining costs.
*Non-GAAP performance
measure. See end of news release
|
REVIEW OF OPERATIONS - CONTINUED
Molybdenum production was 236 thousand pounds in the first
quarter with lower grades associated with the Gibraltar ore. At an average molybdenum price
of US$19.08 per pound, molybdenum
generated a by-product credit per pound of copper produced of
US$0.18 in the first quarter.
The Company realized 27.4 million pounds of copper sales in the
first quarter which was 6.0 million pounds higher than copper
production of 21.4 million pounds. Major disruption to the highway
and rail infrastructure in southwest British Columbia from severe rainstorms and
flooding in November 2021 prevented
significant production from being delivered to the port for
shipping last quarter. Finished inventory was 4.0 million pounds at
the end of March in line with historical average levels.
Off-property costs per pound produced* were US$0.36 for the first quarter which is higher
than normal as it includes the off-property costs related to the
additional 6.0 million pounds of excess inventory sold in the
period.
Total operating costs per pound produced (C1)* were US$3.13 for the quarter and were US$0.90 per pound higher than the first quarter
last year as shown in the graph below:
Of the US$0.90 variance in C1
costs in the first quarter of 2022 compared to the prior year
quarter, US$0.30 was due to less
mining costs being capitalized, US$0.23 was due to decreased copper production
and higher offsite costs which are a result of high sales volumes
(i.e. not variable with production volumes), US$0.21 was due to increased prices for diesel
and other inputs, US$0.10 was due to
lower molybdenum production, and US$0.06 was due to other site operating costs
increases.
GIBRALTAR
OUTLOOK
Gibraltar is expected to
produce 115 million pounds (+/- 5%) of copper in 2022 on a 100%
basis, with production weighted to the back half of the year and
with the first quarter being the lowest production quarter.
Strong metal prices and US dollar combined with our copper hedge
protection should continue to provide tailwinds for strong
financial performance and operating margins at the Gibraltar mine over the coming year. Copper
prices in the first quarter averaged US$4.53 per pound and are currently around
US$4.30 per pound. Molybdenum prices
are currently US$19.22 per pound, 20%
higher than the average price in 2021.
*Non-GAAP performance
measure. See end of news release
|
GIBRALTAR OUTLOOK -
CONTINUED
The Company has a long track record of purchasing copper price
options to manage copper price volatility. This strategy provides
security over the Company's cash flow as it prepares for
construction of Florence Copper while continuing to provide
significant copper price upside should copper prices continue at
current levels or increase further. In particular, the Company
currently has copper collar contracts in place that secure a
minimum copper price of US$4.00 per
pound for more than 90% of its attributable production for the
remainder of 2022.
In March 2022, the Company
announced a new 706 million ton proven and probable sulphide
reserve for the Gibraltar mine, a
40% increase as of December 31, 2021.
The new reserve estimate allows for a significant extension of the
mine life to 23 years with total recoverable metal of 3.0 billion
pounds of copper and 53 million pounds of molybdenum.
Highlights from the new reserve:
- 706 million tons grading 0.25% copper;
- Recoverable copper of 3.0 billion pounds and 53 million pounds
of molybdenum;
- 23 year mine life with average annual production of
approximately 129 million pounds of copper and 2.3 million pounds
of molybdenum;
- Life-of-mine average strip ratio of 2.4:1; and
- After-tax NPV of $1.1 billion
(75% basis) and free cash flow of $2.3
billion (75% basis) at a long-term copper price of
US$3.50 per pound1.
1 The NPV and cash flow is based on copper
prices of $4.25 (2022), $3.90 (2023) and US$3.50 per pound long-term, and a molybdenum
price of US$18 (2022), US$15 (2023) and US$13 per pound long-term, a foreign exchange
rate of 1.3:1 (C$:US$), and a discount rate of 8%.
FLORENCE COPPER
The commercial production facility at Florence Copper will be
one of the greenest sources of copper for US domestic consumption,
with carbon emissions, water and energy consumption all
dramatically lower than a conventional mine. It is a low-cost
copper project with an annual production capacity of 85 million
pounds of copper over a 21-year mine life. With the expected C1*
operating cost of US$1.10 per pound,
Florence Copper will be in the lowest quartile of the global copper
cost curve and will have one of the smallest environmental
footprints of any copper mine in the world.
The Company has successfully operated a Production Test Facility
("PTF") since 2018 at Florence to
demonstrate that the in-situ copper recovery ("ISCR") process can
produce high quality cathode while operating within permit
conditions.
The next phase of Florence Copper will be the construction and
operation of the commercial ISCR facility with an estimated capital
cost of US$230 million (including
reclamation bonding and working capital) based on the Company's
published 2017 NI 43-101 technical report. At a conservative copper
price of US$3.00 per pound, Florence
Copper is expected to generate an after-tax internal rate of return
of 37%, an after-tax net present value of US$680 million at a 7.5% discount rate, and an
after-tax payback period of 2.5 years.
In December 2020, the Company received the Aquifer
Protection Permit ("APP") from the Arizona Department of
Environmental Quality ("ADEQ"). During the APP process, Florence
Copper received strong support from local community members,
business owners and elected officials. The other required permit is
the Underground Injection Control permit ("UIC") from the U.S.
Environmental Protection Agency ("EPA"), which is the final
permitting step required prior to construction of the commercial
ISCR facility. On November 22, 2021,
the EPA
FLORENCE COPPER -
CONTINUED
provided the Company with an initial draft of the UIC permit.
Taseko's project technical team completed its review of the draft
UIC permit in early December 2021 and
no significant issues were identified. The EPA continues to advance
their review process and is expected to publicly issue the draft
UIC permit shortly, and then a 45-day public comment period will
commence.
Detailed engineering and design for the commercial production
facility was completed in 2021 and procurement activities are well
advanced with the Company making initial deposits and awarding the
key contract for the major processing equipment associated with the
SX/EW plant. The Company incurred $25.2
million of costs for Florence in the first quarter of 2022
including for the commercial facility activities and also had
outstanding purchase commitments of $27.9
million as at March 31, 2022.
Deploying this strategic capital and awarding key contracts will
assist with protecting the project execution plan, mitigating
inflation risk and the potential impact of supply chain disruptions
and ensure a smooth transition into construction once the final UIC
permit is received.
At current copper prices, the Company expects to be able to fund
construction of the commercial facility from its existing sources
of liquidity and cashflows from Gibraltar.
LONG-TERM GROWTH STRATEGY
Taseko's strategy has been to grow the Company by acquiring and
developing a pipeline of complementary projects focused on copper
in stable mining jurisdictions. We continue to believe this will
generate long-term returns for shareholders. Our other development
projects are located in British Columbia.
Yellowhead Copper Project
Yellowhead Mining Inc. ("Yellowhead") has an 817 million tonnes
reserve and a 25-year mine life with a pre-tax net present value of
$1.3 billion at an 8% discount rate
using a US$3.10 per pound copper
price based on the Company's 2020 NI 43-101 technical report.
Capital costs of the project are estimated at $1.3 billion over a 2-year construction
period. Over the first 5 years of operation, the copper
equivalent grade will average 0.35% producing an average of 200
million pounds of copper per year at an average C1* cost, net of
by-product credit, of US$1.67 per
pound of copper. The Yellowhead copper project contains valuable
precious metal by-products with 440,000 ounces of gold and 19
million ounces of silver with a life of mine value of over
$1 billion at current prices.
The Company is focusing its current efforts on advancing into
the environmental assessment process and is undertaking some
additional engineering work in conjunction with ongoing engagement
with local communities including First Nations. The Company is also
collecting baseline data and modeling which will be used to support
the environmental assessment and permitting of the project.
New Prosperity Gold-Copper Project
In December 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 British
Columbia, to try to obtain a long-term resolution to the
conflict regarding Taseko's proposed gold-copper mine currently
known as New Prosperity, acknowledging Taseko's commercial
interests and the Tŝilhqot'in Nation's opposition to the
project.
The dialogue was supported by the parties' agreement on
December 7, 2019 to a one-year
standstill on certain outstanding litigation and regulatory matters
that relate to Taseko's tenures and the area in the vicinity of
Teẑtan Biny (Fish Lake). The standstill was extended on
December 4, 2020, to continue what
was a constructive
LONG-TERM GROWTH STRATEGY - CONTINUED
dialogue that had been delayed by the COVID-19 pandemic. The
dialogue is not complete but it remains constructive, and in
December 2021, the parties agreed to
extend the standstill for a further year so that they and the
Province of British Columbia can
continue to pursue a long-term and mutually acceptable resolution
of the conflict.
Aley Niobium Project
Environmental monitoring and product marketing initiatives on
the Aley niobium project continue. The converter pilot test is
ongoing and is providing additional process data to support the
design of the commercial process facilities and will provide final
product samples for marketing purposes.
The Company will host a
telephone conference call and live webcast on Thursday, May 5, 2022
at 11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these
results. After opening remarks by management, there will be a
question and answer session open to analysts and investors.
The conference call may be accessed by dialing 416-764-8688 in
Canada, 888-390-0546 in the United States, 08006522435 in the
United Kingdom, or online at tasekomines.com/investors/events.
The conference call will be
archived for later playback until May 19, 2022 and can be accessed
by dialing 416-764-8677 Canada, 888-390-0561 in the United States,
or online at tasekomines.com/investors/events and using the
passcode 489947 #.
|
Stuart McDonald
President & CEO
No regulatory authority has approved or
disapproved of the information in this news release.
NON-GAAP PERFORMANCE MEASURES
This document 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 measure.
Total operating costs and site operating costs, net of
by-product credits
Total costs of sales include all costs absorbed into inventory,
as well as transportation costs and insurance recoverable. Site
operating costs are calculated by removing net changes in
inventory, depletion and amortization, insurance recoverable, and
transportation costs from cost of sales. Site operating costs, net
of by-product credits is calculated by subtracting by-product
credits from the site operating costs. Site operating costs, net of
by-product credits per pound are calculated by dividing the
aggregate of the applicable costs by copper pounds produced. Total
operating costs per pound is the sum of site operating costs, net
of by-product credits and off-property costs divided by the copper
pounds produced. By-product credits are calculated based on actual
sales of molybdenum (net of treatment 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.
(Cdn$ in thousands,
unless otherwise indicated) –
75% basis
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
2021
Q2
|
2021
Q1
|
Cost of
sales
|
89,066
|
57,258
|
65,893
|
74,056
|
72,266
|
Less:
|
|
|
|
|
|
Depletion and
amortization
|
(13,506)
|
(16,202)
|
(17,011)
|
(17,536)
|
(15,838)
|
Net change in
inventories of finished goods
|
(7,577)
|
13,497
|
762
|
(4,723)
|
2,259
|
Net change in
inventories of ore stockpiles
|
(3,009)
|
4,804
|
6,291
|
2,259
|
(8,226)
|
Transportation
costs
|
(5,115)
|
(4,436)
|
(5,801)
|
(4,303)
|
(3,305)
|
Site operating
costs
|
59,859
|
54,921
|
50,134
|
49,753
|
47,156
|
Less by-product
credits:
|
|
|
|
|
|
Molybdenum, net
of treatment costs
|
(3,831)
|
(7,755)
|
(8,574)
|
(6,138)
|
(5,604)
|
Silver,
excluding amortization of deferred revenue
|
202
|
(330)
|
300
|
64
|
(238)
|
Site operating costs,
net of by-product credits
|
56,230
|
46,836
|
41,860
|
43,679
|
41,314
|
Total copper produced
(thousand pounds)
|
16,024
|
21,590
|
25,891
|
20,082
|
16,684
|
Total costs per pound
produced
|
3.51
|
2.17
|
1.62
|
2.18
|
2.48
|
Average exchange rate
for the period (CAD/USD)
|
1.27
|
1.26
|
1.26
|
1.23
|
1.27
|
Site operating
costs, net of by-product credits
(US$ per
pound)
|
2.77
|
1.72
|
1.28
|
1.77
|
1.96
|
Site operating costs,
net of by-product credits
|
56,230
|
46,836
|
41,860
|
43,679
|
41,314
|
Add off-property
costs:
|
|
|
|
|
|
Treatment and
refining costs
|
2,133
|
1,480
|
3,643
|
1,879
|
2,414
|
Transportation
costs
|
5,115
|
4,436
|
5,801
|
4,303
|
3,305
|
Total operating
costs
|
63,478
|
52,752
|
51,304
|
49,861
|
47,033
|
Total operating
costs (C1) (US$ per pound)
|
3.13
|
1.94
|
1.57
|
2.02
|
2.23
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Total Site Costs
Total site costs is comprised of the site operating costs
charged to cost of sales as well as mining costs capitalized to
property, plant and equipment in the period. This measure is
intended to capture Taseko's share of the total site operating
costs incurred in the quarter at the Gibraltar mine calculated on a consistent
basis for the periods presented.
(Cdn$ in thousands,
unless otherwise indicated) –
75% basis
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
2021
Q2
|
2021
Q1
|
Site operating
costs
|
59,859
|
54,921
|
50,134
|
49,753
|
47,156
|
Add:
|
|
|
|
|
|
Capitalized
stripping costs
|
15,142
|
12,737
|
10,882
|
14,794
|
21,452
|
Total site
costs
|
75,001
|
67,658
|
61,016
|
64,547
|
68,608
|
Adjusted net income (loss)
Adjusted net income (loss) removes the effect of the following
transactions from net income as reported under IFRS:
- Unrealized foreign currency gains/losses;
- Unrealized gain/loss on derivatives; and
- Loss on settlement of long-term debt and call premium,
including realized foreign exchange gains.
Management believes these transactions do not reflect the
underlying operating performance of our core mining business and
are not necessarily indicative of future operating results.
Furthermore, unrealized gains/losses on derivative instruments,
changes in the fair value of financial instruments, and unrealized
foreign currency gains/losses are not necessarily reflective of the
underlying operating results for the reporting periods
presented.
(Cdn$ in thousands,
except per share amounts)
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
2021
Q2
|
Net
income
|
5,095
|
11,762
|
22,485
|
13,442
|
Unrealized
foreign exchange (gain) loss
|
(4,398)
|
(1,817)
|
9,511
|
(3,764)
|
Unrealized
(gain) loss on derivatives
|
7,486
|
4,612
|
(6,817)
|
370
|
Estimated tax
effect of adjustments
|
(2,021)
|
(1,245)
|
1,841
|
(100)
|
Adjusted net
income
|
6,162
|
13,312
|
27,020
|
9,948
|
Adjusted
EPS
|
0.02
|
0.05
|
0.10
|
0.04
|
(Cdn$ in thousands,
except per share amounts)
|
2021
Q1
|
2020
Q4
|
2020
Q3
|
2020
Q2
|
Net income
(loss)
|
(11,217)
|
5,694
|
987
|
18,745
|
Unrealized
foreign exchange (gain) loss
|
8,798
|
(13,595)
|
(7,512)
|
(12,985)
|
Realized foreign
exchange gain on settlement of long-term debt
|
(13,000)
|
-
|
-
|
-
|
Loss on
settlement of long-term debt
|
5,798
|
-
|
-
|
-
|
Call premium on
settlement of long-term debt
|
6,941
|
-
|
-
|
-
|
Unrealized loss
on derivatives
|
802
|
586
|
1,056
|
3,528
|
Estimated tax
effect of adjustments
|
(3,656)
|
(158)
|
(285)
|
(953)
|
Adjusted net income
(loss)
|
(5,534)
|
(7,473)
|
(5,754)
|
8,335
|
Adjusted
EPS
|
(0.02)
|
(0.03)
|
(0.02)
|
0.03
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Adjusted EBITDA
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 consider it useful
in measuring the ability of those issuers to meet debt service
obligations.
Adjusted EBITDA represents net income before interest, income
taxes, and depreciation and also eliminates the impact of a number
of items that are not considered indicative of ongoing operating
performance. Certain items of expense are added 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:
- Unrealized foreign exchange gains/losses;
- Unrealized gain/loss on derivatives;
- Loss on settlement of long-term debt (included in finance
expenses) and call premium;
- Realized foreign exchange gains on settlement of long-term
debt; and
- Amortization of share-based compensation expense.
(Cdn$ in
thousands)
|
2022
Q1
|
2021
Q4
|
2021
Q3
|
2021
Q2
|
Net
income
|
5,095
|
11,762
|
22,485
|
13,442
|
Add:
|
|
|
|
|
Depletion and
amortization
|
13,506
|
16,202
|
17,011
|
17,536
|
Finance
expense
|
12,155
|
12,072
|
11,875
|
11,649
|
Finance
income
|
(166)
|
(218)
|
(201)
|
(184)
|
Income tax
expense
|
1,188
|
9,300
|
22,310
|
7,033
|
Unrealized
foreign exchange (gain) loss
|
(4,398)
|
(1,817)
|
9,511
|
(3,764)
|
Unrealized
(gain) loss on derivatives
|
7,486
|
4,612
|
(6,817)
|
370
|
Amortization of
share-based compensation expense
|
3,273
|
1,075
|
117
|
1,650
|
Adjusted
EBITDA
|
38,139
|
52,988
|
76,291
|
47,732
|
(Cdn$ in
thousands)
|
2021
Q1
|
2020
Q4
|
2020
Q3
|
2020
Q2
|
Net income
(loss)
|
(11,217)
|
5,694
|
987
|
18,745
|
Add:
|
|
|
|
|
Depletion and
amortization
|
15,838
|
18,747
|
23,894
|
25,512
|
Finance expense
(includes loss on settlement of long-term debt
and
call premium)
|
23,958
|
10,575
|
11,203
|
10,461
|
Finance
income
|
(75)
|
(47)
|
(4)
|
(48)
|
Income tax
(recovery) expense
|
(4,302)
|
(2,724)
|
(580)
|
4,326
|
Unrealized
foreign exchange (gain) loss
|
8,798
|
(13,595)
|
(7,512)
|
(12,985)
|
Realized foreign
exchange gain on settlement of long-term debt
|
(13,000)
|
-
|
-
|
-
|
Unrealized loss
on derivatives
|
802
|
586
|
1,056
|
3,528
|
Amortization of
share-based compensation expense
|
2,920
|
1,242
|
2,501
|
1,321
|
Adjusted
EBITDA
|
23,722
|
20,478
|
31,545
|
50,860
|
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Earnings from mining operations before depletion and
amortization
Earnings from mining operations before depletion and
amortization is earnings from mining operations with depletion and
amortization added back. The Company discloses this measure, which
has been derived from our financial statements and applied on a
consistent basis, to provide assistance 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.
|
Three months ended
March 31,
|
(Cdn$ in
thousands)
|
2022
|
2021
|
Earnings from mining
operations
|
29,267
|
14,475
|
Add:
|
|
|
Depletion and
amortization
|
13,506
|
15,838
|
Earnings from mining
operations before depletion and amortization
|
42,773
|
30,313
|
Site operating costs per ton milled
|
|
|
|
|
|
|
|
|
|
(Cdn$ in thousands,
except per ton milled amounts)
|
2022 Q1
|
|
2021 Q4
|
|
2021 Q3
|
|
2021 Q2
|
|
2021 Q1
|
Site operating costs (included in cost of
sales)
|
59,859
|
|
54,921
|
|
50,134
|
|
49,753
|
|
47,156
|
|
|
|
|
|
|
|
|
|
|
Tons milled (thousands)
(75% basis)
|
5,285
|
|
5,523
|
|
5,576
|
|
5,429
|
|
5,402
|
Site operating costs per ton
milled
|
$11.33
|
|
$9.94
|
|
$8.99
|
|
$9.16
|
|
$8.73
|
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, particularly in respect to
Florence Copper that requires one key regulatory permit from the
U.S. Environmental Protection Agency ("EPA") in order to advance to
commercial operations;
- 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 once the final permit is
received from the EPA;
- 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 75% 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.sedar.com, including the "Risk Factors"
included in our Annual Information Form.
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SOURCE Taseko Mines Limited