REG-Taseko Mines Limited: Taseko Announces Improved Economics for Florence Copper
31/03/2023 07:15
TASEKO ANNOUNCES IMPROVED ECONOMICS FOR ITS FLORENCE COPPER PROJECT
VANCOUVER, BC, March 30, 2023 -- Taseko Mines Limited (TSX: TKO) (NYSE
American: TGB) (LSE: TKO) ("Taseko" or the "Company") is pleased to announce
the results of recent technical work and updated economics for its 100%-owned
Florence Copper Project, located in Arizona, U.S.A (the 'Florence Copper
Project" or "Florence Copper"). The Company has filed a new technical report
entitled "NI 43-101 Technical Report – Florence Copper Project, Pinal
County, Arizona" dated March 30, 2023 (the "Technical Report") on SEDAR. The
technical report was prepared in accordance with NI 43-101 and incorporates
updated capital and operating costs for the commercial production facility and
refinements made to the operating models, based on the Production Test
Facility ("PTF") results.
The technical work completed by Taseko in recent years has been extensive and
has de-risked the project significantly. The PTF operated successfully over an
18-month period and provided a valuable opportunity to test operational
controls and strategies which will be applied in future commercial operations.
In addition, a more sophisticated leaching model has been developed and
calibrated to the PTF wellfield performance. This detailed modeling data,
along with updated costing, has been used to update assumptions for the ramp
up and operation of the commercial wellfield and processing facility.
Project Highlights:
* Net present value of US$930 million (after-tax, at an 8% discount rate)
* Internal rate of return of 47% (after-tax)
* Payback period of 2.6 years
* Operating costs (C1) of US$1.11 per pound of copper
* Annual production capacity of 85 million pounds of LME grade "A" cathode
copper
* 22 year mine life
* Total life of mine production of 1.5 billion pounds of copper
* Total estimated initial capital cost of US$232 million remaining
* Long-term copper price of US$3.75 per pound
Stuart McDonald, President & CEO of Taseko, stated, "Despite global cost
inflation in recent years, the Florence Copper Project continues to
demonstrate robust economics and remains one of the lowest capital intensity
copper development projects in the world. The operational experience and
technical information that we gained through the PTF testwork has been
invaluable and we're well positioned to build and operate the commercial-scale
ISCR facility. The new Technical Report includes updated capital cost
estimates based on detailed engineering and recent contractor and vendor
quotations. The main cost increases relate to construction labour and
wellfield drilling costs which impact both initial and sustaining capital
costs."
"The inflationary environment we have been in has also driven copper prices
higher. With a lack of new mines being developed today and copper's critical
role in the global energy transition, the long-term price outlook remains very
attractive for copper producers. The low-carbon, low impact production method
at Florence Copper is expected to make it a preferred supplier of green, low
carbon copper in the US domestic market. With procurement of long-lead items
well advanced, we are ready to commence construction of the commercial
facility following the issuance of the final UIC permit in the coming months,"
Mr. McDonald concluded.
In-Situ Copper Recovery ("ISCR")
The extraction method proposed for the Florence Copper Project is ISCR. ISCR
extracts copper by injecting a weak sulfuric acid solution, referred to as
raffinate, through targeted portions of the mineral deposit using an array of
injection wells. The raffinate passes through natural fractures and voids in
the deposit and dissolves the copper mineralization. The copper laden
solution, known as pregnant leach solution ("PLS"), is collected in recovery
wells where it is pumped to the surface for processing. Copper is extracted
from the PLS using solvent extraction and electrowinning ("SX/EW") techniques
producing a saleable copper cathode product.
Production Test Facility ("PTF")
Florence Copper operated a demonstration scale ISCR facility referred to as
the PTF, where leaching under commercial operating conditions was completed
between December 2018 to June 2020. The PTF facilities included an ISCR
wellfield, an SX/EW processing plant, an acidic reverse-osmosis water
treatment plant, a water impoundment, run-off pond, and associated
infrastructure. The PTF wellfield was comprised of four injection wells, nine
recovery wells, seven observation wells, and four multilevel sampling wells.
The purpose of the PTF was to demonstrate hydraulic control and confirm the
oxide ore zone behaves hydrologically as an equivalent porous media thereby
ensuring protection of underground sources of drinking water. Secondly, the
PTF provided an opportunity to test operational controls and strategies to
inform future commercial scale operations.
The PTF well field is located on the northern portion of the deposit
specifically selected in a challenging hydrogeological position to demonstrate
hydraulic control. The well field is situated at the edge of a graben with
major faults running though the surrounding area. The location was also
selected to represent the ore to be leached at the start of commercial
production.
The well field was designed using the same well spacing and construction
methods as those planned for the commercial-scale ISCR facility. Hydraulic
performance data generated during PTF testing and operations have provided
important information supporting the design and operations planning for the
commercial-scale well field.
Leaching of the PTF wellfield began in December 2018 and continued under
commercial operating conditions until June 2020, after which fresh acid
addition was stopped and the leaching phase was ramped down and concluded with
the shutdown of the process plant by end of October 2020. The PTF well field
was then subsequently transitioned into a rinsing phase which is currently
still in progress.
The PTF was successful in demonstrating that copper could be produced feasibly
and also that hydraulic control of process solutions in the ISCR well field
could be established and maintained to ensure protection of underground
sources of drinking water. It has also further confirmed that the oxide ore
zone behaves hydraulically as an equivalent porous media.
PTF operations provided valuable data to test operational controls and
strategies to inform future commercial scale operations. Employment of
strategies such as reverse flow, use of inflatable packers to target areas of
the formation, and varying acid application rates through increased raffinate
injection flows and or acid strengths all proved to be beneficial tools to
effectively manage the leaching operation.
Sweep Efficiency
Sweep efficiency is defined as the fraction of the pore space contacted or
'swept' by the injected solution as it flows from injection to recovery well.
Sweep efficiency increases over time as leaching progresses and more ore is
contacted by process solutions. The ultimate sweep efficiency achieved over
the duration of leaching indicates the proportion of the ore from which copper
will be recovered.
The geophysical monitoring for the central recovery well found that all of the
monitored ore zone was contacted by leach solutions in the first five weeks of
leaching and achieved 90% overall. This result confirms the projected
long-term sweep efficiency of 90% used in the model.
Overall Recovery Plan
The total copper recovery to cathode is projected to be 65.8% at an estimated
acid consumption of 6.0 lbs/lb copper. PLS grade feeding the SX/EW plant will
average 1.7 g/L of copper over the life of the project.
SX/EW Plant Operations
The SX/EW process plant operations commenced in mid-March 2019, following a
four-month initial leaching period, and was shut down in October 2020, four
months after fresh acid addition to raffinate was stopped resulting in a
subsequent depletion of PLS copper grades feeding the plant. For the entire
PTF operational run, the plant operated at a high average availability of
99.9% and produced a total of 1.1 million pounds of high-grade copper cathode
product from the ISCR leach solutions.
Reserves and Resources
Proven and Probable Reserve Estimate
(Effective December 31, 2022)
Category Tons (millions) Total Cu (%) Recoverable Copper (B lbs)
Proven 258 0.35 1.8
Probable 63 0.40 0.5
Total 320 0.36 2.3
1. Mineral Reserves follow CIM Definition Standards for Mineral Resources and Mineral Reserves (2014).
2. Mineral Reserves are contained within Florence Copper's Mineral Resources.
3. Mineral Reserves are assumed to be extracted using ISCR extraction methods using the following assumptions: $3.05 Cu price, $31,600/acre for core hole abandonment, $240,400/acre for cultural mitigations in identified Cultural Sites, $149,600 + $263/foot well drilling costs, $160/ton acid cost, $45.30/ton acid applied for well field operating costs, 1.2% surface losses, $0.10/lb Cu for electrowinning cost, $0.12/lb Cu G&A cost, $0.69/ton reclamation cost, $0.02/lb Cu shipping cost, 7%
NSR royalties on ALSD land, 3% NSR royalties on freehold land, and 2.5% royalties on net profit.
4. Mineral Reserves are reported without a cut-off grade and on a fully diluted basis to reflect the nature of the ISCR extraction method proposed.
5. Tonnage factors of 13.5 ft3/ton and 13.13 ft3/ton have been applied corresponding to 8% porosity in the upper oxide zone and 5% porosity in the lower oxide and transition zones.
6. Numbers may not add due to rounding.
Florence Project Oxide Mineral Resources
(Effective December 31, 2022)
Category Tons (millions) Total Copper (%) Total Copper (B lbs)
Measured 292 0.34 2.0
Indicated 71 0.39 0.6
M+I 363 0.35 2.5
Inferred 42 0.32 0.3
1. Mineral Resources follow CIM Definition Standards for Mineral Resources and Mineral Reserves (2014).
2. Mineral Resources are reported inclusive of Mineral Reserves.
3. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
4. Mineral Resources are confined to the Oxide and Transition zones inside a "reasonable prospects of eventual economic extraction" boundary assuming ISCR extraction methods using the following assumptions: $3.50 Cu price, $31,600/acre for core hole abandonment, $240,400/acre for cultural mitigations in identified Cultural Sites, $149,600 + $263/foot well drilling costs, $160/ton acid cost, $45.30/ton acid applied for well field operating costs, 1.2% surface losses, $0.10/lb Cu for electrowinning cost, $0.12/lb Cu G&A cost, $0.69/ton reclamation cost,
$0.02/lb Cu shipping cost, 7% NSR royalties on ALSD land, 3% NSR royalties on freehold land, and 2.5% royalties on net profit.
5. Mineral Resources are reported without a cut-off grade to reflect the nature of the ISCR extraction method proposed.
6. Tonnage factors of 13.5 ft3/ton and 13.13 ft3/ton have been applied corresponding to 8% porosity in the upper oxide zone and 5% porosity in the lower oxide and transition zones.
7. Numbers may not add due to rounding.
Qualified Persons and 43-101 Disclosure
The report has been prepared for Taseko Mines Limited, a producing issuer,
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 Sr. Vice President Operations, Mr. Weymark is Vice President
Engineering and Robert Rotzinger is Vice President Capital Projects. All three
are "Qualified Persons" as defined in National Instrument 43–101 Standards
of Disclosure for Mineral Projects ("NI 43–101").
Mr. Tremblay, Mr. Weymark and Mr. Rotzinger have reviewed and approved the
technical content of this news release.
Additional information regarding data verification, exploration information,
known legal, political, environmental or other risks can be found in the
Technical Report dated March 30, 2023, titled 'NI 43-101 Technical Report –
Florence Copper Project, Pinal County, Arizona' which is available on SEDAR.
Note to United States Investors
This news release has been prepared in accordance with the requirements of the
securities laws in effect in Canada, which differ from the requirements of
United States securities laws. Canadian reporting requirements for disclosure
regarding mineral properties are governed by National Instrument 43-101 -
Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101"). Taseko's estimates of "proven mineral reserves",
"probable mineral reserves", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" have been prepared in accordance
with these NI 43-101 requirements.
Effective February 2019, the United States Securities and Exchange Commission
('SEC') adopted amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers like Taseko whose securities are
registered with the SEC under the Exchange Act and as a result, the SEC now
recognizes estimates of "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources". In addition, the SEC has amended
its definitions of "proven mineral reserves" and "probable mineral reserves"
to be "substantially similar" to the corresponding definitions under the CIM
Standards, as required under NI 43-101. For this reason, information
contained in this news release regarding the Company's Florence Copper Project
may not be comparable to similar information made public by United States
companies subject to the reporting and disclosure requirements under the
United States securities laws and the rules and regulations thereunder.
For further information on the differences between the disclosure requirements
for mineral properties in the United States and NI 43-101, please refer to the
company's Annual Information Form, a copy of which has been filed under
Taseko's profile on SEDAR at sedar.com and the company's Form 40-F, a copy of
which will be filed on EDGAR at edgar.com.
Note: All currency amounts are stated in US dollars. Measurement units used in
this release are in imperial (US).
The Technical Report includes inferred mineral resources that are considered
too speculative geologically to have economic considerations applied to them
that would enable them to be categorized as mineral reserves, and there is no
assurance that the Technical Report will be realized. Investors are encouraged
to read the full text of the Technical Report which has been filed on SEDAR
and will be also filed on EDGAR (www.sec.gov) and made available on the Taseko
website.
Stuart McDonald
President and CEO
No regulatory authority has approved or disapproved of the information contained in this news release.
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 related to the financial results of the Technical Report
prepared for the Florence Copper Project, including net present value and
internal rates of return, estimated capital and operating costs and the
ability of Florence Copper to secure the financing to proceed with the
development of the Florence Copper Project;
* 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 estimates of expected or anticipated capital and
operating costs, expenditures and economic returns on our development
projects, including the impact of inflation on the estimated costs related to
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 not prove correct in a full production
scenario, resulting in lower than expect production results, increased costs,
and reduced economics on commercial production than described in the Technical
Report;
* Florence Copper's ability to be a preferred supplier of green, low carbon
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 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 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 Copper 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".
Such forward looking statements or information related to the Technical Report
include but are not limited to statements or information with respect to the
internal rate of return, the annual production, the net present value; the
life of mine, the estimated capital costs, estimated operating costs,
projected metallurgical recoveries, plans for further development, securing
the required permits, the market price of copper and other base metals or
other statements that are not statements of fact.
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.
For further information on Taseko, see the Company's website at
tasekomines.com or contact: Brian Bergot, Vice President, Investor Relations
- 778-373-4533 or toll free 1-877-441-4533
SOURCE Taseko Mines Limited
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