REG-Taseko Mines Limited: Half-year Report
09/08/2022 07:15
TASEKO REPORTS SECOND QUARTER 2022 FINANCIAL RESULTS
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, Aug. 8, 2022 -- Taseko Mines Limited (TSX: TKO) (NYSE American:
TGB); LSE: TKO) ("Taseko" or the "Company") reports Cash flows provided by
operations of $18.3 million, Earnings from mining operations before depletion*
of $7.2 million, Adjusted EBITDA* of $1.7 million and an Adjusted net loss* of
$16.1 million, or $0.06 per share for the second quarter 2022.
Stuart McDonald, President and CEO of Taseko, stated, "Over the first half of
2022, mining operations were sequencing through the lower grade upper benches
of the Gibraltar pit. These smaller, complex ore zones are challenging
sections for our mining equipment, resulting in higher dilution and lower than
expected copper grade. The mill operated at design capacity in the second
quarter, but lower head grades contributed to lower recoveries, resulting in
copper production of 21 million pounds.
Mining operations are now advancing deeper into the Gibraltar pit where the
higher-grade ore for the upcoming quarters is located. Copper production is
expected to be significantly higher in the second half of the year, and we
have already seen improvements since quarter-end as 9.5 million pounds of
copper was produced in the month of July. We still expect to meet our original
copper production guidance of 115 million pounds (+/-5%), but given the more
challenging conditions in the first half of the year, now expect to be at the
lower end of that range."
"Our average realized copper price for the period was US$4.08 per pound, but
the decline in the price late in the quarter impacted our financial results as
we recognized negative price adjustments and an inventory write-down totalling
$7 million. Going forward, we have a valuable copper hedge position which
protects a minimum price of US$3.75 per pound through June 2023," continued
Mr. McDonald.
Mr. McDonald added, "On the cost side, we continued to see the impact of
higher fuel costs in the second quarter, as diesel prices climbed by 23%
quarter-over-quarter, and nearly 70% over the prior year. Other than fuel, our
total site spending is generally in line with the prior quarter and prior
year. Although Total operating costs (C1)* per pound of copper has been driven
higher by the lower production in the second quarter, these unit costs will
drop significantly in the second half of 2022 as production increases. Diesel
prices have recently fallen from their highs in the second quarter."
"At Florence Copper, we are still waiting for the US Environmental Protection
Agency ("EPA") to begin the public comment period for the draft Underground
Injection Control permit. This permit is the final key permit required to
construct and operate the commercial production facility. All indications from
the EPA are that there are no outstanding items remaining with the permit and
they are just completing final internal sign offs. The public comment period
is expected to be 45 days. During the second quarter, development costs of $27
million were incurred including procurement of long lead time items that were
committed to last year. Capital spending on Florence will now slow down until
we receive the final UIC permit," continued Mr. McDonald.
*Non-GAAP performance measure. See end of news release
Second Quarter Review
* Second quarter cash flow from operations was $18.3 million, earnings from
mining operations before depletion and amortization* was $7.2 million and net
loss was $5.3 million ($0.02 loss per share);
* Gibraltar produced 20.7 million pounds of copper for the quarter. Head
grades averaged 0.17% which was lower than expected due to the complexity of
the ore zones mined in the upper benches of the Gibraltar pit resulting in
higher than normal mining dilution. Grades and copper production are expected
to improve significantly in the second half of the year;
* Mill throughput outperformed recent quarters, in line with expectations, due
to the softer ore from the Gibraltar pit. Copper recoveries were 77.3% for the
quarter and were impacted by the lower head grade;
* Total site costs* in the second quarter have increased due primarily to the
impact of higher diesel costs;
* Gibraltar sold 21.7 million pounds of copper in the quarter (100% basis) at
an average realized copper price of US$4.08 per pound;
* The decline in copper prices during the second quarter resulted in negative
provisional price adjustments of $5.5 million and a write-down of ore
stockpile inventories of $1.5 million;
* Adjusted EBITDA* was $1.7 million and Adjusted net loss* was $16.1 million
($0.06 loss per share), and these amounts include the negative provisional
price adjustments and inventory write-down;
* The Company has copper collar contracts in place to protect a minimum copper
price until mid-2023. The copper price collars outstanding at the end of the
second quarter resulted in an unrealized gain of $30.7 million. Subsequent to
quarter-end, $15.2 million of this gain was realized as cash proceeds upon
payout of the July contract and through a repricing of the copper price floors
from US$4.00 to US$3.75 per pound for the remainder of 2022;
* Development costs incurred for Florence Copper were $27.0 million in the
quarter and included further payments for major processing equipment for the
SX/EW plant, other pre-construction activities and ongoing site costs; and
* The Company had a cash balance of $176 million and has approximately $240
million of available liquidity at June 30, 2022, including its undrawn US$50
million revolving credit facility.
*Non-GAAP performance measure. See end of news release
HIGHLIGHTS
Operating Data (Gibraltar - 100% basis) Three months ended June 30, Six months ended June 30,
2022 2021 Change 2022 2021 Change
Tons mined (millions) 22.3 24.9 (2.6) 42.6 56.9 (14.3)
Tons milled (millions) 7.7 7.2 0.5 14.7 14.4 0.3
Production (million pounds Cu) 20.7 26.8 (6.1) 42.0 49.0 (7.0)
Sales (million pounds Cu) 21.7 26.7 (5.0) 49.1 48.7 0.4
Financial Data Three months ended June 30, Six months ended June 30,
(Cdn$ in thousands, except for per share amounts) 2022 2021 Change 2022 2021 Change
Revenues 82,944 111,002 (28,058) 201,277 197,743 3,534
Earnings from mining operations before depletion and amortization (*) 7,221 54,482 (47,261) 49,994 84,795 (34,801)
Cash flows provided by operations 18,344 72,502 (54,158) 70,097 69,219 878
Adjusted EBITDA (*) 1,684 47,732 (46,048) 39,823 71,454 (31,631)
Adjusted net income (loss) (*) (16,098) 9,948 (26,046) (9,936) 4,414 (14,350)
Per share - basic ("adjusted EPS") (*) (0.06) 0.04 (0.10) (0.03) 0.02 (0.05)
Net income (loss) (GAAP) (5,274) 13,442 (18,716) (179) 2,225 (2,404)
Per share - basic ("EPS") (0.02) 0.05 (0.07) - 0.01 (0.01)
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS
Gibraltar mine (75% Owned)
Operating data (100% basis) Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021
Tons mined (millions) 22.3 20.3 23.3 25.2 24.9
Tons milled (millions) 7.7 7.0 7.4 7.4 7.2
Strip ratio 2.8 2.6 2.2 1.3 2.3
Site operating cost per ton milled (Cdn$)* $11.13 $11.33 $9.94 $8.99 $9.16
Copper concentrate
Head grade (%) 0.17 0.19 0.24 0.28 0.22
Copper recovery (%) 77.3 80.2 80.4 84.2 83.3
Production (million pounds Cu) 20.7 21.4 28.8 34.5 26.8
Sales (million pounds Cu) 21.7 27.4 23.8 32.4 26.7
Inventory (million pounds Cu) 2.7 4.0 9.9 4.9 3.5
Molybdenum concentrate
Production (thousand pounds Mo) 199 236 450 571 402
Sales (thousand pounds Mo) 210 229 491 502 455
Per unit data (US$ per pound produced) (*)
Site operating costs (*) $3.25 $2.95 $2.02 $1.53 $2.02
By-product credits (*) (0.15) (0.18) (0.30) (0.25) (0.25)
Site operating costs, net of by-product credits (*) $3.10 $2.77 $1.72 $1.28 $1.77
Off-property costs 0.37 0.36 0.22 0.29 0.25
Total operating costs (C1) (*) $3.47 $3.13 $1.94 $1.57 $2.02
Second Quarter Review
Gibraltar produced 20.7 million pounds of copper for the quarter. Head grades
averaged 0.17% in the quarter which was lower than expected due to the
complexity of the ore in the upper benches of the Gibraltar pit which resulted
in higher than normal mining dilution. Ore grades are expected to improve for
the remainder of the year as mining progresses deeper into the Gibraltar pit
where ore zones are more consistent and less complex in nature.
A total of 22.3 million tons were mined in the second quarter with the
decrease from 2021 rates due to longer haul distances in the current phase of
mining. Mill throughput improved over the prior quarters due to the softer
Gibraltar ore in line with expectations.
The strip ratio of 2.8 was inline with the average for the Gibraltar pit and
the prior quarter. Ore stockpiles also decreased by 1.8 million tons in the
second quarter to supplement mill feed from the mine in accordance with the
mine plan.
Total site costs* at Gibraltar of $76.1 million (which includes capitalized
stripping of $11.9 million) for Taseko's 75% share was generally consistent
with the first quarter but was $11.6 million higher than the same quarter last
year due to higher diesel costs with diesel prices nearly 70% higher than 2021
and with some other input costs increasing including grinding media used in
the mill.
*Non-GAAP performance measure. See end of news release
REVIEW OF OPERATIONS - CONTINUED
Molybdenum production was 199 thousand pounds in the second quarter due to
lower grades. At an average molybdenum price of US$18.37 per pound, molybdenum
generated a by-product credit per pound of copper produced of US$0.15 in the
second quarter.
Off-property costs per pound produced* were US$0.37 for the second quarter
reflecting higher ocean freight (including bunker costs) and increased
treatment and refining charges (TCRC) as the same quarter in the prior year
achieved extremely low TCRCs from spot tenders that were awarded given the
tight physical market in the second quarter of 2021.
Total operating costs per pound produced (C1)* were US$3.47 for the quarter
and were US$1.45 per pound higher than the second quarter last year as shown
in the graph below:
https://mma.prnewswire.com/media/1874467/Taseko_Mines_Limited_TASEKO_REPORTS_SECOND_QUARTER_2022_FINANCIA.jpg
Of the US$1.45 variance in C1 costs in the second quarter of 2022 compared to
the prior year quarter, US$0.78 was due to decreased copper production,
US$0.12 was due to less mining costs being capitalized, US$0.10 was due to
lower molybdenum production, US$0.26 was due to inflation arising from
increased prices for diesel and grinding media, US$0.11 was due to higher
treatment and refining charges, and US$0.08 for other miscellaneous cost
impacts offset by favorable foreign exchange impacts.
GIBRALTAR OUTLOOK
Copper production is expected to significantly increase in the second half of
the year as mining progresses deeper in the Gibraltar pit as ore quality and
grade improves. Management still expects to meet the original copper
production guidance of 115 million pounds (+/-5%), but given the more
challenging conditions in the first half of the year, now expect to be at the
lower end of that range.
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. Improved production combined with
this copper hedge protection should continue to provide the foundation for
stable financial performance and operating margins at the Gibraltar mine over
the coming quarters.
*Non-GAAP performance measure. See end of news release
GIBRALTAR OUTLOOK - CONTINUED
The Company has a long track record of purchasing copper price options to
manage short term copper price volatility. This strategy provides security
over the Company's cash flow as it prepares for construction of the commercial
facility at Florence Copper while continuing to provide significant copper
price upside should copper prices continue their rebound. Copper prices in the
first half of 2022 averaged US$4.43 per pound and are currently around US$3.55
per pound.
In March 2022, the Company announced a new 706 million ton proven and probable
sulphide reserve for the Gibraltar mine, a 40% increase as of December 31,
2021. The new reserve estimate allows for a significant extension of the mine
life to 23 years with total recoverable metal of 3.0 billion pounds of copper
and 53 million pounds of molybdenum.
Highlights from the new reserve:
* 706 million tons grading 0.25% copper;
* Recoverable copper of 3.0 billion pounds and 53 million pounds of
molybdenum;
* 23 year mine life with average annual production of approximately 129
million pounds of copper and 2.3 million pounds of molybdenum;
* Life-of-mine average strip ratio of 2.4:1; and
* After-tax NPV of $1.1 billion (75% basis) and free cash flow of $2.3 billion
(75% basis) at a long-term copper price of US$3.50 per pound(1).
(1) The NPV and cash flow is based on copper prices of US$4.25 (2022),
US$3.90 (2023) and US$3.50 per pound long-term, and a molybdenum price of
US$18 (2022), US$15 (2023) and US$13 per pound long-term, a foreign exchange
rate of 1.3:1 (C$:US$), and a discount rate of 8%.
FLORENCE COPPER
The commercial production facility at Florence Copper will be one of the
greenest sources of copper for US domestic consumption, with carbon emissions,
water and energy consumption all dramatically lower than a conventional mine.
It is a low-cost copper project with an annual production capacity of 85
million pounds of copper over a 21-year mine life. With the expected C1*
operating cost of US$1.10 per pound, Florence Copper will be in the lowest
quartile of the global copper cost curve and will have one of the smallest
environmental footprints of any copper mine in the world.
The Company has successfully operated a Production Test Facility ("PTF") since
2018 at Florence to demonstrate that the in-situ copper recovery ("ISCR")
process can produce high quality cathode while operating within permit
conditions.
The next phase of Florence Copper will be the construction and operation of
the commercial ISCR facility with an estimated capital cost of US$230 million
(including reclamation bonding and working capital) based on the Company's
published 2017 NI 43-101 technical report. At a conservative copper price of
US$3.00 per pound, Florence Copper is expected to generate an after-tax
internal rate of return of 37%, an after-tax net present value of US$680
million at a 7.5% discount rate, and an after-tax payback period of 2.5
years.
FLORENCE COPPER - CONTINUED
In December 2020, the Company received the Aquifer Protection Permit ("APP")
from the Arizona Department of Environmental Quality ("ADEQ"). During the APP
process, Florence Copper received strong support from local community members,
business owners and elected officials. The other required permit is the
Underground Injection Control permit ("UIC") from the U.S. Environmental
Protection Agency ("EPA"), which is the final permitting step required prior
to construction of the commercial ISCR facility. On November 22, 2021, the EPA
provided the Company with an initial draft of the UIC permit. Taseko's project
technical team completed its review of the draft UIC permit in early December
2021 and no significant issues were identified. We are awaiting the EPA to
begin the public comment period for the draft UIC. All indications from the
EPA are that there are no outstanding items remaining with the permit and they
are completing final internal sign offs. The public comment period is expected
to be 45 days.
Detailed engineering and design for the commercial production facility was
completed in 2021 and procurement activities are well advanced with the
Company having made most of the initial deposits and awarding the key contract
for the major processing equipment associated with the SX/EW plant. The
Company incurred $52.2 million of costs for Florence in the first half of 2022
which includes commercial facility activities. Florence Copper also has
outstanding purchase commitments of $22.3 million as at June 30, 2022 for the
remaining equipment to be delivered. Deploying this strategic capital and
awarding key contracts will assist with protecting the project execution plan,
mitigating inflation risk and the potential impact of supply chain disruptions
and ensure a smooth transition into construction once the final UIC permit is
received.
LONG-TERM GROWTH STRATEGY
Taseko's strategy has been to grow the Company by acquiring and developing a
pipeline of complementary projects focused on copper in stable mining
jurisdictions. We continue to believe this will generate long-term returns for
shareholders. Our other development projects are located in British
Columbia.
Yellowhead Copper Project
Yellowhead Mining Inc. ("Yellowhead") has an 817 million tonnes reserve and a
25-year mine life with a pre-tax net present value of $1.3 billion at an 8%
discount rate using a US$3.10 per pound copper price based on the Company's
2020 NI 43-101 technical report. Capital costs of the project are estimated at
$1.3 billion over a 2-year construction period. Over the first 5 years of
operation, the copper equivalent grade will average 0.35% producing an average
of 200 million pounds of copper per year at an average C1* cost, net of
by-product credit, of US$1.67 per pound of copper. The Yellowhead copper
project contains valuable precious metal by-products with 440,000 ounces of
gold and 19 million ounces of silver with a life of mine value of over $1
billion at current prices.
The Company is focusing its current efforts on advancing into the
environmental assessment process and is undertaking some additional
engineering work in conjunction with ongoing engagement with local communities
including First Nations. The Company is also collecting baseline data and
modeling which will be used to support the environmental assessment and
permitting of the project.
New Prosperity Gold-Copper Project
In December 2019, the 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.
LONG-TERM GROWTH STRATEGY
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 Tuesday, August 9, 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 647-484-0258 in Toronto, 800-289-0720 toll free in North America, 0800 279 6877 in the United Kingdom, or online at tasekomines.com/investors/events and using the entry code 8913919.
The conference call will be archived for later playback until August 23, 2022 and can be accessed by dialing 647-436-0148 in Toronto, 888-203-1112 toll free in North America, or online at tasekomines.com/investors/events and using the entry code 8913919.
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 Q2 2022 Q1 2021 Q4 2021 Q3 2021 Q2
Cost of sales 90,992 89,066 57,258 65,893 74,056
Less:
Depletion and amortization (15,269) (13,506) (16,202) (17,011) (17,536)
Net change in inventories of finished goods (3,653) (7,577) 13,497 762 (4,723)
Net change in inventories of ore stockpiles (3,463) (3,009) 4,804 6,291 2,259
Transportation costs (4,370) (5,115) (4,436) (5,801) (4,303)
Site operating costs 64,237 59,859 54,921 50,134 49,753
Less by-product credits:
Molybdenum, net of treatment costs (3,023) (3,831) (7,755) (8,574) (6,138)
Silver, excluding amortization of deferred revenue 36 202 (330) 300 64
Site operating costs, net of by-product credits 61,250 56,230 46,836 41,860 43,679
Total copper produced (thousand pounds) 15,497 16,024 21,590 25,891 20,082
Total costs per pound produced 3.95 3.51 2.17 1.62 2.18
Average exchange rate for the period (CAD/USD) 1.28 1.27 1.26 1.26 1.23
Site operating costs, net of by-product credits (US$ per pound) 3.10 2.77 1.72 1.28 1.77
Site operating costs, net of by-product credits 61,250 56,230 46,836 41,860 43,679
Add off-property costs:
Treatment and refining costs 2,948 2,133 1,480 3,643 1,879
Transportation costs 4,370 5,115 4,436 5,801 4,303
Total operating costs 68,568 63,478 52,752 51,304 49,861
Total operating costs (C1) (US$ per pound) 3.47 3.13 1.94 1.57 2.02
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 Q2 2022 Q1 2021 Q4 2021 Q3 2021 Q2
Site operating costs 64,237 59,859 54,921 50,134 49,753
Add:
Capitalized stripping costs 11,887 15,142 12,737 10,882 14,794
Total site costs 76,124 75,001 67,658 61,016 64,547
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 Q2 2022 Q1 2021 Q4 2021 Q3
Net income (loss) (5,274) 5,095 11,762 22,485
Unrealized foreign exchange (gain) loss 11,621 (4,398) (1,817) 9,511
Unrealized (gain) loss on derivatives (30,747) 7,486 4,612 (6,817)
Estimated tax effect of adjustments 8,302 (2,021) (1,245) 1,841
Adjusted net income (loss) (16,098) 6,162 13,312 27,020
Adjusted EPS (0.06) 0.02 0.05 0.10
(Cdn$ in thousands, except per share amounts) 2021 Q2 2021 Q1 2020 Q4 2020 Q3
Net income (loss) 13,442 (11,217) 5,694 987
Unrealized foreign exchange (gain) loss (3,764) 8,798 (13,595) (7,512)
Realized foreign exchange gain on settlement of long-term debt - (13,000) - -
Loss on settlement of long-term debt - 5,798 - -
Call premium on settlement of long-term debt - 6,941 - -
Unrealized loss on derivatives 370 802 586 1,056
Estimated tax effect of adjustments (100) (3,656) (158) (285)
Adjusted net income (loss) 9,948 (5,534) (7,473) (5,754)
Adjusted EPS 0.04 (0.02) (0.03) (0.02)
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 Q2 2022 Q1 2021 Q4 2021 Q3
Net income (loss) (5,274) 5,095 11,762 22,485
Add:
Depletion and amortization 15,269 13,506 16,202 17,011
Finance expense 12,236 12,155 12,072 11,875
Finance income (282) (166) (218) (201)
Income tax expense 922 1,188 9,300 22,310
Unrealized foreign exchange (gain) loss 11,621 (4,398) (1,817) 9,511
Unrealized (gain) loss on derivatives (30,747) 7,486 4,612 (6,817)
Amortization of share-based compensation expense (recovery) (2,061) 3,273 1,075 117
Adjusted EBITDA 1,684 38,139 52,988 76,291
(Cdn$ in thousands) 2021 Q2 2021 Q1 2020 Q4 2020 Q3
Net income (loss) 13,442 (11,217) 5,694 987
Add:
Depletion and amortization 17,536 15,838 18,747 23,894
Finance expense (includes loss on settlement of long-term debt and call premium) 11,649 23,958 10,575 11,203
Finance income (184) (75) (47) (4)
Income tax (recovery) expense 7,033 (4,302) (2,724) (580)
Unrealized foreign exchange (gain) loss (3,764) 8,798 (13,595) (7,512)
Realized foreign exchange gain on settlement of long-term debt - (13,000) - -
Unrealized loss on derivatives 370 802 586 1,056
Amortization of share-based compensation expense 1,650 2,920 1,242 2,501
Adjusted EBITDA 47,732 23,722 20,478 31,545
Earnings (loss) from mining operations before depletion and amortization
Earnings (loss) 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 June 30, Six months ended June 30,
(Cdn$ in thousands) 2022 2021 2022 2021
Earnings (loss) from mining operations (8,048) 36,946 21,219 51,421
Add:
Depletion and amortization 15,269 17,536 28,775 33,374
Earnings from mining operations before depletion and amortization 7,221 54,482 49,994 84,795
Site operating costs per ton milled
(Cdn$ in thousands, except per ton milled amounts) 2022 Q2 2022 Q1 2021 Q4 2021 Q3 2021 Q2
Site operating costs (included in cost of sales) 64,237 59,859 54,921 50,134 49,753
Tons milled (thousands) (75% basis) 5,774 5,285 5,523 5,576 5,429
Site operating costs per ton milled $11.13 $11.33 $9.94 $8.99 $9.16
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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