REG-Taseko Mines Limited: Taseko Reports $36 Million of Adj Ebitda for Q1 2023
04/05/2023 07:15
TASEKO REPORTS $36 MILLION OF ADJUSTED EBITDA FOR FIRST QUARTER 2023
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 87.5% 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 3, 2023 -- Taseko Mines Limited (TSX: TKO) (NYSE American:
TGB) (LSE: TKO) ("Taseko" or the "Company") reports first quarter 2023
Adjusted EBITDA* of $36 million, Earnings from mining operations before
depletion* of $41 million and Cash flows provided by operations of $28
million. Adjusted net income* was $5 million, or $0.02 per share.
Photo -
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Stuart McDonald, President and CEO of Taseko, stated, "An average realized
copper price of US$4.02 per pound in the first quarter helped to drive our
strong financial performance. Production in the first quarter was 25 million
pounds of copper and 234 thousand pounds of molybdenum. Copper head grades
for the period were on plan, averaging 0.22%, but production was slightly
below plan due to unexpected mill downtime and operational issues with the
primary crushers. Mining advanced deeper into the Gibraltar pit which is the
sole source of mill feed this year, and waste stripping ramped up in the new
Connector pit. Initial tons of oxide ore were also mined from the Connector
pit and have been placed on leach pads for future production when the
Gibraltar SX/EW plant restarts.
We have decided to defer the in-pit crusher move until the spring of 2024, to
coincide with planned work on SAG mill #1 to minimize concentrator downtime."
Mr. McDonald added, "In the first quarter, we increased our effective interest
in Gibraltar to 87.5%, after acquiring a 12.5% stake from one of our joint
venture partners. The transaction closed in mid-March and provides immediate
17% growth in our attributable copper production. Additionally, the five-year
deferred payment structure allows Taseko to focus our financial resources on
the construction of the commercial facility at Florence."
"In March, we filed a new technical report(**) for the Florence Copper
project. The report includes updated capital cost estimates based on detailed
engineering and recent contractor and vendor quotations. Operating and
sustaining capital costs have also been updated, and refinements have been
made to the operating models based on the Production Test Facility ("PTF")
results. The project has been significantly de-risked in recent years and
has an after-tax Net Present Value (8%) of US$930 million using a long-term
copper price of US$3.75 per pound. The EPA permitting process continues to
advance and we expect a favourable outcome in the coming months. We are ready
to start construction of the commercial production facility as soon as the
final Underground Injection Control permit is issued," continued Mr. McDonald.
"Considering global economic uncertainties, copper markets remain remarkably
stable and continue to support a healthy price of about US$3.85 per pound.
Demand for our product remains strong and the long-term supply/demand
fundamentals appear to be favourable. In the short-term, we continue to
maintain our price protection strategy, which provides a minimum copper price
of US$3.75 per pound for most of Gibraltar's production for the balance of
2023. Our original production guidance of 115 million pounds (+/-5%) for
2023 remains unchanged," concluded Mr. McDonald.
*Non-GAAP performance measure. See end of news release **NI 43-101 Technical Report, Florence Copper Project, Pinal County, Arizona" dated March 30, 2023. 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").
First Quarter Review
* In March 2023, the Company announced the results of recent technical work
and updated economics for the Florence Copper project. Including updated
modelling, capital expenditures and operating costs, the Florence Copper
project now has an after-tax net present value of US$930 million (at an 8%
discount rate) with an internal rate of return of 47% and a 2.6 year payback
period;
* First quarter earnings from mining operations before depletion and
amortization* was $41.1 million, Adjusted EBITDA* was $36.1 million, and cash
flows from operations was $28.0 million;
* GAAP net income was $4.4 million ($0.02 per share) and Adjusted net income*
was $5.1 million ($0.02 per share);
* Gibraltar produced 24.9 million pounds of copper for the quarter which was
slightly below expectations due to unplanned mill downtime that was necessary
to address crusher maintenance and other operational issues;
* Copper head grades in the quarter were 0.22%, similar to recent quarters and
in line with management's expectation;
* Gibraltar sold 26.6 million pounds of copper in the quarter (100% basis)
which contributed to revenue for Taseko of $115.5 million. The average
realized copper price was US$4.02 per pound for the first quarter, compared to
the LME average price of US$4.05 per pound;
* Total site costs* in the first quarter was $112.8 million on a 100% basis,
$6.6 million higher than the previous quarter due to greater diesel
consumption from the higher mining rates and additional costs incurred for
mill maintenance;
* On March 15, 2023, the Company completed its acquisition of an additional
12.5% interest in the Gibraltar mine from Sojitz Corporation ("Sojitz") and
now holds an effective 87.5% interest in the Gibraltar mine;
* In February 2023, the Company entered into an agreement to extend the
maturity date of its revolving credit facility by an additional year to July
2026. In addition to the one-year extension, the lender has also agreed to an
accordion feature, which will allow the amount of the credit facility to be
increased to US$80 million, subject to credit approval and other conditions;
and
* The Company had a closing cash balance of $102 million at March 31, 2023.
HIGHLIGHTS
Operating Data (Gibraltar - 100% basis) Three months ended March 31,
2023 2022 Change
Tons mined (millions) 24.1 20.3 3.8
Tons milled (millions) 7.1 7.0 0.1
Production (million pounds Cu) 24.9 21.4 3.5
Sales (million pounds Cu) 26.6 27.4 (0.8)
Financial Data Three months ended March 31,
(Cdn$ in thousands, except for per share amounts) 2023 2022 Change
Revenues 115,519 118,333 (2,814)
Earnings from mining operations before depletion and amortization* 41,139 42,773 (1,634)
Cash flows provided by operations 27,999 51,753 (23,754)
Adjusted EBITDA (*) 36,059 38,139 (2,080)
Adjusted net income (*) 5,088 6,162 (1,074)
Per share - basic ("Adjusted EPS") (*) 0.02 0.02 -
Net income (GAAP) 4,439 5,095 (656)
Per share - basic ("EPS") 0.02 0.02 -
REVIEW OF OPERATIONS
Gibraltar mine
Operating data (100% basis) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022
Tons mined (millions) 24.1 22.9 23.2 22.3 20.3
Tons milled (millions) 7.1 7.3 8.2 7.7 7.0
Strip ratio 1.9 1.1 1.5 2.8 2.6
Site operating cost per ton milled (Cdn$)* $13.54 $13.88 $11.33 $11.13 $11.33
Copper concentrate
Head grade (%) 0.22 0.22 0.22 0.17 0.19
Copper recovery (%) 80.7 83.4 77.1 77.3 80.2
Production (million pounds Cu) 24.9 26.7 28.3 20.7 21.4
Sales (million pounds Cu) 26.6 25.5 26.7 21.7 27.4
Inventory (million pounds Cu) 3.7 5.4 4.2 2.7 4.0
Molybdenum concentrate
Production (thousand pounds Mo) 234 359 324 199 236
Sales (thousand pounds Mo) 225 402 289 210 229
Per unit data (US$ per pound produced) (*)
Site operating costs (*) $2.82 $2.79 $2.52 $3.25 $2.95
By-product credits (*) (0.37) (0.40) (0.15) (0.15) (0.18)
Site operating costs, net of by-product credits (*) $2.45 $2.39 $2.37 $3.10 $2.77
Off-property costs 0.37 0.36 0.35 0.37 0.36
Total operating costs (C1) (*) $2.82 $2.75 $2.72 $3.47 $3.13
OPERATIONS ANALYSIS
First Quarter Review
Gibraltar produced 24.9 million pounds of copper for the quarter, a 7%
decrease over the fourth quarter. Copper production in the quarter was
impacted by low mill availabilities due to poor crusher performance and
extended mill shutdowns to troubleshoot mechanical issues. As a result, mill
throughput was approximately 12% below plan for the period.
Copper head grades of 0.22% were in line with recent quarters and management
expectations. Copper recoveries in the first quarter were 80.7% and while
above the average achieved for 2022, were impacted by operating variability in
the concentrators.
Mine operations went as planned in the quarter and a total of 24.1 million
tons were mined. The ore stockpiles increased by 0.4 million tons in the first
quarter and 0.8 million tons of oxide ore from the Connector pit was placed
on the heap leach pads. This oxide ore will be processed in future years when
Gibraltar's solvent extraction and electrowinning ("SX/EW") plant is
restarted.
Total site costs* at Gibraltar of $112.8 million were $6.6 million higher than
last quarter due to greater diesel fuel consumption from the higher mining
rates and increased mill maintenance costs incurred to address mechanical
issues.
Molybdenum production was 234 thousand pounds in the first quarter. At an
average molybdenum price of US$32.79 per pound and with inclusion of the
impact of favorable provisional price adjustments, molybdenum generated a
by-product credit of US$0.37 per pound of copper produced in the first
quarter.
Off-property costs per pound produced* were US$0.37 and were generally in line
with recent quarters.
Total operating costs per pound produced (C1)* were US$2.82 for the quarter,
compared to US$3.13 in the same period in 2022 with key variances summarized
in the bridge graph below:
GIBRALTAR OUTLOOK
The Gibraltar pit will continue to be the sole source of mill feed in 2023 and
the quarterly production profile is expected to be less variable than 2022 due
to improving quality and consistency of ore as mining progresses deeper into
the pit. Waste stripping will continue in the new Connector pit and initial
mill feed from this pit is planned for 2024. The in-pit crusher that
currently sits over the Connector ore zone was planned to be relocated in the
third quarter of this year, but will now be deferred to spring of 2024. This
results in increased mill production in the current year, and allows the
timing of the crusher move to align with a maintenance shutdown that is
required for the mill #1 SAG mill.
The technical information contained in this MD&A related to the Gibraltar mine
has been reviewed and approved by Richard Weymark, P.Eng., MBA, VP
Engineering, who is a Qualified Person in accordance with the requirements of
NI 43-101.
Gibraltar is expected to produce 115 million pounds of copper (+/-5%) in 2023
on a 100% basis.
Strong metal prices combined with our copper hedge protection continues to
provide stable operating margins at the Gibraltar mine. Copper prices in the
first quarter averaged US$4.05 per pound which is slightly higher than the
2022 average of US$3.99 per pound. Molybdenum prices are currently US$20.88
per pound, which is 11% higher than the average price in 2022. The Company
currently has copper price collar contracts in place that secure a minimum
copper price of US$3.75 per pound for 52 million pounds of copper until
December 31, 2023.
ACQUISITION OF ADDITIONAL 12.5% INTEREST IN GIBRALTAR
On March 15, 2023, the Company completed the acquisition of an additional
12.5% interest in the Gibraltar mine from Sojitz. Gibraltar is operated
through a joint venture which is owned 75% by Taseko and 25% by Cariboo Copper
Corporation ("Cariboo"). Under the terms of the agreement, Taseko has acquired
Sojitz's 50% interest in Cariboo and now holds an effective 87.5% interest in
the Gibraltar mine. The other 50% of Cariboo is held equally by Dowa Metals &
Mining Co., Ltd. ("Dowa") and Furukawa Co. Ltd. ("Furukawa").
The acquisition price consists of a minimum amount of $60 million payable over
a five-year period and potential contingent payments depending on Gibraltar
mine copper revenues and copper prices over the next five years. An initial
$10 million has been paid to Sojitz on closing and the remaining minimum
amount will be paid in $10 million annual instalments over the next five
years. There is no interest payable on the minimum amounts and the amounts
payable to Sojitz are secured against shareholder loans owing from Cariboo to
Taseko.
The contingent payments are payable annually for five years only if the
average LME copper price exceeds US$3.50 per pound in a year. The payments
will be calculated by multiplying Gibraltar mine copper revenues by a price
factor, which is based on a sliding scale ranging from 0.38% at US$3.50 per
pound copper to a maximum of 2.13% at US$5.00 per pound copper or above. Total
contingent payments cannot exceed $57 million over the five-year period,
limiting the acquisition cost to a maximum of $117 million.
Taseko will become a party to the existing Cariboo shareholders agreement with
Dowa and Furukawa. There will be no change to the offtake contracts
established in 2010 and Dowa and Furukawa will continue to receive 30% of
Gibraltar's copper concentrate offtake. There will be no impact to the
operation of the Gibraltar Joint Venture.
FLORENCE COPPER
The Company is awaiting the issuance of the final Underground Injection
Control ("UIC") permit from the U.S. Environmental Protection Agency ("EPA"),
which is the final permitting step required prior to construction commencing
on the commercial production facility. The EPA is currently addressing
comments that were received during the public comment period, which was held
in the fall of 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.
In December 2022, the Company signed agreements with Mitsui & Co. (U.S.A.)
Inc. ("Mitsui") to form a strategic partnership to develop Florence Copper.
Mitsui has committed to an initial investment of US$50 million which is
conditional on receipt of the final UIC permit, with proceeds to be used for
construction of the commercial production facility. The initial investment
will be in the form of a copper stream agreement on 2.67% of the copper
produced at Florence Copper. In addition, Mitsui has the option to invest an
additional US$50 million (for a total investment of US$100 million) for a 10%
equity interest in Florence Copper.
Detailed engineering and design for the commercial production facility is
substantially completed and procurement activities are well advanced. The
Company has purchased the major processing equipment associated with the SX/EW
plant and the equipment has now been delivered to the Florence site. The
Company is well positioned to transition into construction once the final UIC
permit is received. The Company incurred $9.9 million of capital expenditures
at the Florence project in the first quarter of 2023.
In March 2023, the Company announced the results of recent technical work and
updated economics for the Florence Copper project. 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.
Florence Copper 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
The technical information contained in this MD&A related to the Florence
Copper Project has been prepared by Richard Weymark, P.Eng., MBA, VP
Engineering, Rob Rotzinger, P.Eng., VP Capital Projects, and Richard Tremblay,
P.Eng., MBA, Senior VP Operations, who are Qualified Persons in accordance
with the requirements of NI 43-101.
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.
The technical information contained in this MD&A related to the Yellowhead
Copper Project has been prepared by Richard Weymark, P.Eng., MBA, VP
Engineering, who is a Qualified Person in accordance with the requirements of
NI 43-101.
New Prosperity Gold-Copper Project
In late 2019, the Tsilhqot'in Nation, as represented by Tsilhqot'in National
Government, and Taseko entered into a confidential dialogue, with the
involvement of the Province of British Columbia, in order to obtain a
long-term resolution of the conflict regarding Taseko's proposed copper-gold
mine previously known as New Prosperity, acknowledging Taseko's commercial
interests and the Tsilhqot'in Nation's opposition to the project.
This dialogue has been supported by the parties' agreement, beginning December
2019, to a series of one-year standstills on certain outstanding litigation
and regulatory matters relating to Taseko's tenures and the area in the
vicinity of Teztan Biny (Fish Lake). The standstill agreement was most
recently extended for a fourth one-year term in December 2022, with the goal
of providing time and opportunity for the Tsilhqot'in Nation and Taseko to
negotiate a final resolution.
The dialogue process has made tangible progress in the past 12 months but is
not complete. In agreeing to extend the standstill through 2023, the
Tsilhqot'in Nation and Taseko acknowledge the constructive nature of
discussions to date, and the future opportunity to conclude a long-term and
mutually acceptable resolution of the conflict that also makes an important
contribution to the goals of reconciliation in Canada.
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 has also initiated a scoping study to investigate the potential
production of niobium oxide at Aley to supply the growing market for
niobium-based batteries.
The Company will host a telephone conference call and live webcast on Thursday, May 4, 2023 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. To join the conference call without operator assistance, you may pre-register at bit.ly/3KQ1b1u to receive an instant automated call back just prior to the start of the conference call. Otherwise, the conference call may be accessed
by dialing 888-390-0546 toll free, 416-764-8688 in Canada, 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 888-390-0541 toll free, 416-764-8677 in Canada, or online at tasekomines.com/investors/events using the passcode 707779#.
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 (except for Q1 2023) 2023 Q1 (1) 2022 Q4 2022 Q3 2022 Q2 2022 Q1
Cost of sales 86,407 73,112 84,204 90,992 89,066
Less:
Depletion and amortization (12,027) (10,147) (13,060) (15,269) (13,506)
Net change in inventories of finished goods (399) 1,462 2,042 (3,653) (7,577)
Net change in inventories of ore stockpiles 5,561 18,050 3,050 (3,463) (3,009)
Transportation costs (5,104) (6,671) (6,316) (4,370) (5,115)
Site operating costs 74,438 75,806 69,920 64,237 59,859
Less by-product credits:
Molybdenum, net of treatment costs (9,208) (11,022) (4,122) (3,023) (3,831)
Silver, excluding amortization of deferred revenue (160) 263 25 36 202
Site operating costs, net of by-product credits 65,070 65,047 65,823 61,250 56,230
Total copper produced (thousand pounds) 19,491 20,020 21,238 15,497 16,024
Total costs per pound produced 3.34 3.25 3.10 3.95 3.51
Average exchange rate for the period (CAD/USD) 1.35 1.36 1.31 1.28 1.27
Site operating costs, net of by-product credits (US$ per pound) 2.47 2.39 2.37 3.10 2.77
Site operating costs, net of by-product credits 65,070 65,047 65,823 61,250 56,230
Add off-property costs:
Treatment and refining costs 4,142 3,104 3,302 2,948 2,133
Transportation costs 5,104 6,671 6,316 4,370 5,115
Total operating costs 74,316 74,822 75,441 68,568 63,478
Total operating costs (C1) (US$ per pound) 2.82 2.75 2.72 3.47 3.13
(1)Q1 2023 includes the impact from the March 15, 2023 acquisition of Cariboo from Sojitz, which increased the Company's Gibraltar mine ownership from 75% to 87.5%.
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 (except for Q1 2023) 2023 Q1 (1) 2022 Q4 2022 Q3 2022 Q2 2022 Q1
Site operating costs 74,438 75,806 69,920 64,237 59,859
Add:
Capitalized stripping costs 12,721 3,866 1,121 11,887 15,142
Total site costs – Taseko share 87,159 79,672 71,041 76,124 75,001
Total site costs – 100% basis 112,799 106,230 94,721 101,500 100,002
(1)Q1 2023 includes the impact from the March 15, 2023 acquisition of Cariboo from Sojitz, which increased the Company's Gibraltar mine ownership from 75% to 87.5%.
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 gain/loss;
* 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) 2023 Q1 2022 Q4 2022 Q3 2022 Q2
Net income (loss) 4,439 (2,275) (23,517) (5,274)
Unrealized foreign exchange (gain) loss (950) (5,279) 28,083 11,621
Unrealized (gain) loss on derivatives 2,190 20,137 (72) (30,747)
Estimated tax effect of adjustments (591) (5,437) 19 8,302
Adjusted net income (loss) 5,088 7,146 4,513 (16,098)
Adjusted EPS 0.02 0.02 0.02 (0.06)
(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
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 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;
* Amortization of share-based compensation expense.
(Cdn$ in thousands) 2023 Q1 2022 Q4 2022 Q3 2022 Q2
Net income (loss) 4,439 (2,275) (23,517) (5,274)
Add:
Depletion and amortization 12,027 10,147 13,060 15,269
Finance expense 12,309 10,135 12,481 12,236
Finance income (921) (700) (650) (282)
Income tax expense 3,356 1,222 3,500 922
Unrealized foreign exchange (gain) loss (950) (5,279) 28,083 11,621
Unrealized (gain) loss on derivatives 2,190 20,137 (72) (30,747)
Amortization of share-based compensation expense (recovery) 3,609 1,794 1,146 (2,061)
Adjusted EBITDA 36,059 35,181 34,031 1,684
(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
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) 2023 2022
Earnings from mining operations 29,112 29,267
Add:
Depletion and amortization 12,027 13,506
Earnings from mining operations before depletion and amortization 41,139 42,773
Site operating costs per ton milled
(Cdn$ in thousands, except per ton milled amounts) 2023 Q1 (1) 2022 Q4 2022 Q3 2022 Q2 2022 Q1
Site operating costs (included in cost of sales) 74,438 75,806 69,920 64,237 59,859
Tons milled (thousands) (75% basis except for Q1 2023) 5,498 5,462 6,172 5,774 5,285
Site operating costs per ton milled $13.54 $13.88 $11.33 $11.13 $11.33
(1)Q1 2023 includes the impact from the March 15, 2023 acquisition of Cariboo from Sojitz, which increased the Company's Gibraltar mine ownership from 75% to 87.5%.
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
SOURCE Taseko Mines Limited
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