REG-Taseko Mines Limited: 3rd Quarter Results
04/11/2022 07:15
TASEKO REPORTS IMPROVED PRODUCTION AND $34 MILLION OF ADJUSTED EBITDA* FOR
THIRD QUARTER 2022
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, Nov. 4, 2022 -Taseko Mines Limited (TSX: TKO) (NYSE American:
TGB) (LSE: TKO) ("Taseko" or the "Company") reports Adjusted EBITDA* of $34.0
million and Adjusted net income* of $4.5 million, or $0.02 per share for the
third quarter 2022. Cash flows provided by operations was $12.1 million and
Earnings from mining operations before depletion* was $18.6 million.
Stuart McDonald, President and CEO of Taseko, stated, "Strong financial
performance in the third quarter was driven by a nearly 40% increase in copper
production at Gibraltar. Head grades and copper production have continued to
improve as mining advances deeper into the Gibraltar pit. Higher throughput
due to the softer ore in the new pit also benefited production with average
daily mill throughput of 89,400 tons in the third quarter. This was the
highest quarterly mill throughput at Gibraltar since the expansion ten years
ago, and we continue to see the potential for further increases. Combined with
higher grades, production in the quarter was 28.3 million pounds of copper and
324 thousand pounds of molybdenum. For the fourth quarter, we anticipate
approximately a 10% increase in production, and more stable production levels
in the coming quarters."
"Our unit operating costs declined by 22% quarter-over-quarter, as result of
increased production and lower site spending. But operating costs are still
being impacted by diesel prices which are ~55% higher than in 2021. During the
third quarter, we purchased diesel call options which will protect the Company
from further diesel price escalation through June 2023," added Mr. McDonald.
"The average realized copper price for the period was US$3.48 per pound and
was supported by our pricing and hedging strategy. We realized proceeds of
$18.6 million in the quarter from copper put options, and going forward, we
have protected a substantial portion of future sales at a minimum price of
US$3.75 per pound through June 2023. Given that we expect Florence
construction to be underway next year, we are looking for a market opportunity
to extend our put position into the second half of 2023," continued Mr.
McDonald.
"At our Florence Copper Project, we made important steps towards completion of
the review process for the Underground Injection Control ("UIC") permit. The
US Environmental Protection Agency ("EPA") issued the draft UIC permit in
August and the subsequent public comment period and public hearing confirmed
overwhelming support for the project from residents of the town of Florence
and surrounding areas. We're confident that all submitted comments will be
fully addressed by the EPA, and we look forward to receiving the final UIC
permit and getting started on construction of the commercial production
facility. Deliveries of major components for the SX-EW plant and other
long-lead items continued through the third quarter and should be complete by
year-end." continued Mr. McDonald.
Third Quarter Review
* Third quarter Adjusted EBITDA* was $34.0 million, earnings from mining
operations before depletion and amortization* was $18.6 million, and Adjusted
net income* was $4.5 million ($0.02 per share);
* On September 29, 2022, the EPA concluded its 45-day public comment period
for the draft Underground Injection Control permit for Florence Copper. The
project received overwhelming support from business organizations, community
leaders and state-wide organizations in written submissions and as voiced at
the public hearing;
* Gibraltar produced 28.3 million pounds of copper for the quarter. Head
grades improved over the first half of the year to 0.22% but were still
impacted by higher than normal mining dilution;
* Mill throughput exceeded nameplate capacity at an average rate of 89,400
tons per day in the quarter due to the softer ore from the Gibraltar pit.
Copper recoveries were 77.1% for the quarter and were primarily impacted by
the lower head grade;
* Total site costs* in the third quarter decreased from the previous quarters
of 2022 but remained elevated compared to 2021 primarily due to higher diesel
prices;
* Gibraltar sold 26.7 million pounds of copper in the quarter (100% basis) at
an average realized copper price of US$3.48 per pound;
* GAAP net loss was $23.5 million ($0.08 loss per share) and reflected
unrealized foreign exchange losses of $28.1 million on the translation of the
Company's US dollar denominated debt;
* Cash flow from operations was $12.1 million which did not include $18.6
million in cash proceeds realized from copper put option contracts in the
quarter;
* The Company has copper collar contracts in place to protect a minimum copper
price of US$3.75 per pound until mid-2023. The Company also has 18 million
litres of fuel call options in place to provide a ceiling cost for its share
of diesel over the same period;
* Development costs incurred for Florence Copper were $27.3 million in the
quarter and included further payments for the major processing equipment being
delivered for the SX/EW plant, other pre-construction activities and ongoing
site costs; and
* The Company had a cash balance of $142 million and has approximately $210
million of available liquidity at September 30, 2022, including its undrawn
US$50 million revolving credit facility.
*Non-GAAP performance measure. See end of news release
HIGHLIGHTS
Operating Data (Gibraltar - 100% basis) Three months ended September 30, Nine months ended September 30,
2022 2021 Change 2022 2021 Change
Tons mined (millions) 23.2 25.2 (2.0) 65.7 82.1 (16.4)
Tons milled (millions) 8.2 7.4 0.8 23.0 21.9 1.1
Production (million pounds Cu) 28.3 34.5 (6.2) 70.3 83.5 (13.2)
Sales (million pounds Cu) 26.7 32.4 (5.7) 75.8 81.1 (5.3)
Financial Data Three months ended September 30, Nine months ended September 30,
(Cdn$ in thousands, except for per share amounts) 2022 2021 Change 2022 2021 Change
Revenues 89,714 132,563 (42,849) 290,991 330,306 (39,315)
Earnings from mining operations before depletion and amortization (*) 18,570 83,681 (65,111) 68,564 168,476 (99,912)
Cash flows provided by operations 12,115 68,319 (56,204) 82,212 137,538 (55,326)
Adjusted EBITDA (*) 34,031 76,291 (42,260) 73,854 147,745 (73,891)
Adjusted net income (loss) (*) 4,513 27,020 (22,507) (5,423) 31,433 (36,856)
Per share - basic ("adjusted EPS") (*) 0.02 0.10 (0.08) (0.02) 0.11 (0.13)
Net income (loss) (GAAP) (23,517) 22,485 (46,002) (23,696) 24,710 (48,406)
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS
Gibraltar mine (75% Owned)
Operating data (100% basis) Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021
Tons mined (millions) 23.2 22.3 20.3 23.3 25.2
Tons milled (millions) 8.2 7.7 7.0 7.4 7.4
Strip ratio 1.5 2.8 2.6 2.2 1.3
Site operating cost per ton milled (Cdn$)* $11.33 $11.13 $11.33 $9.94 $8.99
Copper concentrate
Head grade (%) 0.22 0.17 0.19 0.24 0.28
Copper recovery (%) 77.1 77.3 80.2 80.4 84.2
Production (million pounds Cu) 28.3 20.7 21.4 28.8 34.5
Sales (million pounds Cu) 26.7 21.7 27.4 23.8 32.4
Inventory (million pounds Cu) 4.2 2.7 4.0 9.9 4.9
Molybdenum concentrate
Production (thousand pounds Mo) 324 199 236 450 571
Sales (thousand pounds Mo) 289 210 229 491 502
Per unit data (US$ per pound produced) (*)
Site operating costs (*) $2.52 $3.25 $2.95 $2.02 $1.53
By-product credits (*) (0.15) (0.15) (0.18) (0.30) (0.25)
Site operating costs, net of by-product credits (*) $2.37 $3.10 $2.77 $1.72 $1.28
Off-property costs 0.35 0.37 0.36 0.22 0.29
Total operating costs (C1) (*) $2.72 $3.47 $3.13 $1.94 $1.57
Third Quarter Review
Gibraltar produced 28.3 million pounds of copper for the quarter, a 37%
increase over the second quarter. Head grades improved over the first half of
the year to 0.22% but still were impacted by higher than normal mining
dilution. Grades are expected to continue improving into the fourth quarter as
mining advances deeper into the Gibraltar pit, and a number of initiatives are
underway to reduce the above normal mining dilution being experienced in this
pit.
Mill throughput averaged 89,400 tons per day exceeding the name plate capacity
by 5% and the best quarterly average for Gibraltar. Copper recoveries of 77%
were primarily impacted by the lower grade and are also expected to improve as
consistency and quality of the Gibraltar pit ore improves at depth.
A total of 23.2 million tons were mined in the third quarter as mining
operations were focused in the Gibraltar pit. The strip ratio of 1.5 was lower
than prior quarter as stripping activity in Pollyanna was minimal and ore
stockpiles increased by 1.0 million tons in the third quarter.
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS – CONTINUED
Total site costs* at Gibraltar of $71.0 million (which includes capitalized
stripping of $1.1 million) for Taseko's 75% share were $10.0 million higher
than the third quarter of 2021 due to higher diesel prices (56% higher than
2021) and with grinding media and other input costs also increasing.
Molybdenum production was 324 thousand pounds in the third quarter due to
lower grades. At an average molybdenum price of US$16.10 per pound,
molybdenum generated a by-product credit per pound of copper produced of
US$0.15 in the third quarter.
Off-property costs per pound produced* were US$0.35 for the third quarter
reflecting higher ocean freight costs (including bunkers) and increased
treatment and refining charges (TCRC) compared to the same quarter in the
prior year.
Total operating costs per pound produced (C1)* were US$2.72 for the quarter
and were US$1.15 per pound higher than the third quarter last year as shown in
the bridge graph below:
Of the US$1.15 variance in C1 costs in the third quarter of 2022 compared to
the prior year quarter, US$0.46 was due to decreased copper production,
US$0.35 was due to less mining and other costs being capitalized, US$0.11 was
due to lower molybdenum production, US$0.26 was due to inflation arising from
increased prices for diesel, grinding media, explosives and other site costs,
US$0.06 was due to higher treatment and refining charges, and partially offset
by a weakening Canadian dollar impact of US$0.09.
GIBRALTAR OUTLOOK
Ore from the Gibraltar pit will be the primary source of mill feed for the
fourth quarter and for 2023. Copper production in the fourth quarter is
expected to improve by approximately 10% over the third quarter and continue
at those higher production rates into 2023 as mining progresses deeper into
the Gibraltar pit. Stripping activities for the new Connector pit will also
commence in 2023. The primary crusher for Mill 1 which overlays the Connector
zone is scheduled to be moved to its new location in the third quarter of
2023.
*Non-GAAP performance measure. See end of news release
GIBRALTAR OUTLOOK - CONTINUED
The Company currently has copper price collar contracts in place that secure a
minimum copper price of US$3.75 per pound for a substantial portion of its
attributable production until June 30, 2023. The Company has also executed
price caps for its share of diesel purchases. Improving production combined
with this copper hedge and diesel price protection program should continue to
provide the foundation for stable financial performance and operating margins
at the Gibraltar mine over the coming quarters.
FLORENCE COPPER
Once in commercial production, Florence Copper is expected to have the lowest
energy and greenhouse gas-intensity ("GHG") of any copper producer in North
America, and will contribute to reducing the United States' reliance on
foreign producers for a metal considered to be foundational for the transition
to a low-carbon economy. 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
with carbon emissions, water and energy consumption all dramatically lower
than a conventional mine.
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 September 29, 2022, the EPA concluded its public comment period
on the draft UIC it issued following a virtual public hearing that was held on
September 15, 2022. Public comments submitted to the EPA have demonstrated
strong support for the Florence Copper project among local residents, business
organizations, community leaders and state-wide organizations. Over 98% of
written comments to the EPA were supportive of the project and supplement the
unanimous public support voiced at the EPA's public hearing. Taseko has
reviewed all of the submitted comments and is confident they will be fully
addressed by the EPA during their review, prior to issuing the final UIC
permit.
*Non-GAAP performance measure. See end of news release
FLORENCE COPPER - CONTINUED
Detailed engineering and design for the commercial production facility was
substantially completed in 2021 and procurement activities are well advanced
with the Company having awarded and procured the key contract for the major
processing equipment associated with the solvent extraction and electrowinning
("SX/EW") plant. The Company has incurred $79.6 million of costs for Florence
in the nine month period ended September 30, 2022 and most of ordered SX/EW
plant equipment is expected to be on site by the end of year. Florence Copper
also has outstanding purchase commitments of $16.4 million as at September 30,
2022. Deploying this strategic capital and awarding key contracts has assisted
with protecting the project execution plan including against supply chain
challenges, mitigated inflation risk and should ensure a smooth transition
into construction once the final UIC permit is received.
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 preparing to advance 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 T?ilhqot'in Nation, as represented by the T?ilhqot'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 T?ilhqot'in Nation's opposition to the project.
*Non-GAAP performance measure. See end of news release
LONG-TERM GROWTH STRATEGY - CONTINUED
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 Te?tan Biny
(Fish Lake). The standstill was extended on December 4, 2020, to continue what
was a constructive 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 Friday, November 4, 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.
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 Q3 2022 Q2 2022 Q1 2021 Q4 2021 Q3
Cost of sales 84,204 90,992 89,066 57,258 65,893
Less:
Depletion and amortization (13,060) (15,269) (13,506) (16,202) (17,011)
Net change in inventories of finished goods 2,042 (3,653) (7,577) 13,497 762
Net change in inventories of ore stockpiles 3,050 (3,463) (3,009) 4,804 6,291
Transportation costs (6,316) (4,370) (5,115) (4,436) (5,801)
Site operating costs 69,920 64,237 59,859 54,921 50,134
Less by-product credits:
Molybdenum, net of treatment costs (4,122) (3,023) (3,831) (7,755) (8,574)
Silver, excluding amortization of deferred revenue 25 36 202 (330) 300
Site operating costs, net of by-product credits 65,823 61,250 56,230 46,836 41,860
Total copper produced (thousand pounds) 21,238 15,497 16,024 21,590 25,891
Total costs per pound produced 3.10 3.95 3.51 2.17 1.62
Average exchange rate for the period (CAD/USD) 1.31 1.28 1.27 1.26 1.26
Site operating costs, net of by-product credits (US$ per pound) 2.37 3.10 2.77 1.72 1.28
Site operating costs, net of by-product credits 65,823 61,250 56,230 46,836 41,860
Add off-property costs:
Treatment and refining costs 3,302 2,948 2,133 1,480 3,643
Transportation costs 6,316 4,370 5,115 4,436 5,801
Total operating costs 75,441 68,568 63,478 52,752 51,304
Total operating costs (C1) (US$ per pound) 2.72 3.47 3.13 1.94 1.57
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 Q3 2022 Q2 2022 Q1 2021 Q4 2021 Q3
Site operating costs 69,920 64,237 59,859 54,921 50,134
Add:
Capitalized stripping costs 1,121 11,887 15,142 12,737 10,882
Total site costs 71,041 76,124 75,001 67,658 61,016
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 Q3 2022 Q2 2022 Q1 2021 Q4
Net income (loss) (23,517) (5,274) 5,095 11,762
Unrealized foreign exchange (gain) loss 28,083 11,621 (4,398) (1,817)
Unrealized (gain) loss on derivatives (72) (30,747) 7,486 4,612
Estimated tax effect of adjustments 19 8,302 (2,021) (1,245)
Adjusted net income (loss) 4,513 (16,098) 6,162 13,312
Adjusted EPS 0.02 (0.06) 0.02 0.05
(Cdn$ in thousands, except per share amounts) 2021 Q3 2021 Q2 2021 Q1 2020 Q4
Net income (loss) 22,485 13,442 (11,217) 5,694
Unrealized foreign exchange (gain) loss 9,511 (3,764) 8,798 (13,595)
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 (gain) loss on derivatives (6,817) 370 802 586
Estimated tax effect of adjustments 1,841 (100) (3,656) (158)
Adjusted net income (loss) 27,020 9,948 (5,534) (7,473)
Adjusted EPS 0.10 0.04 (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 Q3 2022 Q2 2022 Q1 2021 Q4
Net income (loss) (23,517) (5,274) 5,095 11,762
Add:
Depletion and amortization 13,060 15,269 13,506 16,202
Finance expense 12,481 12,236 12,155 12,072
Finance income (650) (282) (166) (218)
Income tax expense 3,500 922 1,188 9,300
Unrealized foreign exchange (gain) loss 28,083 11,621 (4,398) (1,817)
Unrealized (gain) loss on derivatives (72) (30,747) 7,486 4,612
Amortization of share-based compensation expense (recovery) 1,146 (2,061) 3,273 1,075
Adjusted EBITDA 34,031 1,684 38,139 52,988
(Cdn$ in thousands) 2021 Q3 2021 Q2 2021 Q1 2020 Q4
Net income (loss) 22,485 13,442 (11,217) 5,694
Add:
Depletion and amortization 17,011 17,536 15,838 18,747
Finance expense (includes loss on settlement of long-term debt and call premium) 11,875 11,649 23,958 10,575
Finance income (201) (184) (75) (47)
Income tax (recovery) expense 22,310 7,033 (4,302) (2,724)
Unrealized foreign exchange (gain) loss 9,511 (3,764) 8,798 (13,595)
Realized foreign exchange gain on settlement of long-term debt - - (13,000) -
Unrealized (gain) loss on derivatives (6,817) 370 802 586
Amortization of share-based compensation expense 117 1,650 2,920 1,242
Adjusted EBITDA 76,291 47,732 23,722 20,478
NON-GAAP PERFORMANCE MEASURES - CONTINUED
Earnings (loss) 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 September 30, Nine months ended September 30,
(Cdn$ in thousands) 2022 2021 2022 2021
Earnings from mining operations 5,510 66,670 26,729 118,091
Add:
Depletion and amortization 13,060 17,011 41,835 50,385
Earnings from mining operations before depletion and amortization 18,570 83,681 68,564 168,476
Site operating costs per ton milled
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 Company's site operations on a tons milled basis.
(Cdn$ in thousands, except per ton milled amounts) 2022 Q3 2022 Q2 2022 Q1 2021 Q4 2021 Q3
Site operating costs (included in cost of sales) 69,920 64,237 59,859 54,921 50,134
Tons milled (thousands) (75% basis) 6,172 5,774 5,285 5,523 5,576
Site operating costs per ton milled $11.33 $11.13 $11.33 $9.94 $8.99
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 effect of COVID-19 and the response of local,
provincial, federal and international governments to the threat of COVID-19 on
our operations (including our suppliers, customers, supply chain, employees
and contractors) and economic conditions generally and in particular with
respect to the demand for copper and other metals we produce;
* uncertainties and costs related to the Company's exploration and development
activities, such as those associated with continuity of mineralization or
determining whether mineral resources or reserves exist on a property;
* uncertainties related to the accuracy of our estimates of mineral reserves,
mineral resources, production rates and timing of production, future
production and future cash and total costs of production and milling;
* uncertainties related to feasibility studies that provide estimates of
expected or anticipated costs, expenditures and economic returns from a mining
project;
* uncertainties related to the ability to obtain necessary licenses permits
for development projects and project delays due to third party opposition;
* 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, particularly laws, regulations and policies;
* changes in general economic conditions, the financial markets and in the
demand and market price for copper, gold and other minerals and commodities,
such as diesel fuel, 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;
* the effects of forward selling instruments to protect against fluctuations
in copper prices and exchange rate movements and the risks of counterparty
defaults, and mark to market risk;
* the risk of inadequate insurance or inability to obtain insurance to cover
mining risks;
* the risk of loss of key employees; 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;
* environmental issues and liabilities associated with mining including
processing and stock piling ore; and
* labour strikes, work stoppages, or other interruptions to, or difficulties
in, the employment of labour in markets in which we operate mines, or
environmental hazards, industrial accidents or other events or occurrences,
including third party interference that interrupt the production of minerals
in our mines.
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.
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.
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
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