Tko Agm 16 June2010

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  • 1. Annual General Meeting June 16, 2010
  • 2. Forward-Looking Statements Some of the statements contained in the following material are "forward-looking statements". All statements in this release, other than statements of historical facts, that address estimated mineral resource and reserve quantities, grades and contained metal, and possible future mining, exploration and development activities, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements should not be in any way construed as 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 for metals, the conclusions of detailed feasibility and technical analyses, lower than expected grades and quantities of resources, mining rates and recovery rates and the lack of availability of necessary capital, which may not be available to the Company on terms acceptable to it or at all. The Company is subject to the specific risks inherent in the mining business as well as general economic and business conditions. For more information on the Company, Investors should review the Company's annual Form 20-F filing with the United States Securities Commission at www.sec.gov. and its Canadian securities filings that are available at www.sedar.com.
  • 3. A Year in Review 2008 – An Unprecedented Collapse $6.00 Copper (US$/lb) Taseko Share Price (C$) $5.00 $4.00 $3.00 Low – US$1.26/lb $2.00 2009 – An $1.00 Unexpected Low – C$0.66/share Rebound $0.00 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10
  • 4. A Year in Review Key Accomplishments February 2009 – Finalized a US$30 million term loan facility with Credit Suisse to fund expansion projects at its Gibraltar Mine June 2009 – Purchased entire US$30 million of Convertible Bonds, out of working capital, eliminating the dilutive effects of the bonds August 2009 – Completed installation of a new tower mill, increasing regrind capacity and improving metal recoveries September 2009 – With the addition of Investec, the Company increased its term loan facility to US$50 million. November 2009 – Increased Prosperity reserves to 7.7 million ounces of recoverable gold and 3.6 billion pounds of recoverable copper January 2010 – Received British Columbia Environmental Assessment Certificate for Prosperity March 2010 – Repaid entire US$50 million long-term credit facility March 2010 – Completed transaction to sell 25% of Gibraltar Mine for ~$187 million April 2010 – 23.2 million pounds of copper production from Gibraltar in Q1 2010 May 2010 – Signed gold stream agreement with Franco-Nevada to sell 22% of future gold production from Prosperity for US$350 million
  • 5. A Year in Review Steadily Increasing Production 25 Cathode 20 Concentrate (millions lbs) 15 10 5 0 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 • In second half of 2008, all capital projects were supspended • Expansion modernization projects back on track and benefits now being realized
  • 6. Financial Returns Financials Back on Track $140 $120 $100 $80 (C$, millions) $60 $40 $20 $0 -$20 -$40 2007 2008 2009 2010* Q1 Annualized Estimate Operating Profit Net Earnings Cash Flow from Operations
  • 7. Financial Returns Balance Sheet Strengthened $700 $600 $500 (C$, millions) $400 $300 $200 $100 $0 2007 2008 2009 2010 At March 31 Cash and Equivalents Total Assets Shareholders' Equity
  • 8. A Year in Review Peer Performance 1000 Taseko Taseko Stock has increased Quadra Teck 670% in last 17 months, compared Inmet to our peer average of 270% First Quantum 750 Rio Tinto Anglo Freeport Imperial Capstone 500 250 0 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10
  • 9. Prosperity Gold-Copper Project Location: 125 km south-west of Williams Lake, BC Ownership: 100% 7.7 million ounces recoverable gold Mineral Reserves: 3.6 billion pounds recoverable copper Mine Type: Open-pit Estimated Annual 245,000 ounces gold LOM Production: 110 million pounds copper Mine Life: 33 years • Environmental Assessment Approval • Provincial Gov’t approval received on January 14, 2010 • Federal Gov’t approval expected in Q3/10 • Mine Permitting • Underway • Submission to British Columbia Ministry of Mines in April/10
  • 10. Prosperity Gold-Copper Project Production Yr 1* Yr 2 Yr 3 Yr 4 Yr 5 Gold (ounces) 158,300 294,900 324,200 274,000 303,600 Copper (thousands, pounds) 72,600 125,500 131,100 116,600 118,400 • 33-year mine life • 5-year production profile • 300,000 ounces au/year • 130 million pounds cu/year • Life of mine average annual production ~400,000 gold eq. ounces *Six months of production
  • 11. Prosperity Gold-Copper Project Economics • Feasibility Study complete • Capital cost of C$815 million • Operating cost of C$7.50 per Copper – US$/lb tonne milled $1.65 $2.15 $2.65 $3.15 $650 1 $225 $825 $1,425 $2,000 Feasibility • Total costs, net of BPCs at Study 2 10% 17% 23% 28% US$3.00 cu, of negative 3 8.0 4.5 3.5 2.75 US$330/oz gold $750 1 $500 $1,100 $1,700 $2,300 2 13% 19% 25% 31% • Margin at today’s gold price Gold – US$/oz 3 5.5 4 3 2.5 is ~$1,500 per ounce of gold $850 1 $775 $1,400 $1,975 $2,600 L/T Cons. Pricing 2 16% 22% 28% 34% 3 4.5 3.5 2.5 2.5 $950 1 $1,000 $1,600 $2,300 $2,900 1 – Pre Tax NPV @ 7.5% (C$, millions) 2 19% 25% 31% 37% 2 – IRR (%) 3 4.0 3.0 2.5 2.25 3 – Payback (years)
  • 12. Total Au Resources (MM ozs) - 2 4 6 8 10 12 14 16 18 20 94M Pebble - Northern Dynasty Minerals 44M Reko Diq - Antofagasta Oyu Tolgoi - Ivanhoe Mines 32M Tampakan - Xstrata Lookout Hill - Ivanhoe Mines Salobo - Vale SA Prosperity - Taseko Mines Bougainville - Rio Tinto Frieda River - Xstrata Agua Rica - Yamana Gold Golpu - Newcrest Mining Galore Creek - NovaGold Resources El Morro - Xstrata Casino - Western Copper Red Chris - Imperial Metals Bystrinskoye - Norilsk Nickel (MMC) Esperanza - Antofagasta Xietongmen - Continental Minerals Telegrafo Sur - Antofagasta Boyongan - Philex Gold Cerro Colorado - Government of Panama Namosi - Newcrest Mining Schaft Creek - Copper Fox Metals Kingking - Benguet Taldybulak Talas - Gold Fields Mirador - Corriente Resources Josemaria - Suramina Resources Mankayan - Bezant Resources Galeno - China Minmetals Ak-Sug - Golevskaya Mining Company El Arco - Southern Copper Gold Grade (g/t) Cloncurry - Ivanhoe Australia Low Political Risk High Political Risk Sinchao - Sinchao Metals Medium Political Risk Cobre Panama - Inmet Mining Duboashan - China Non-Ferrous Metal Sierra Gorda - Quadra Mining Yandera - Marengo Mining Mirdita - Tirex Resources Kuru Tegerek - China Shen Zhou Mining Tuwu-Yandong - Yunnan Copper Ajax - Abacus Mining and Exploration Ilovitza - EurOmax Resources Taca Taca - Lumina Copper Hushamu - IMA Exploration Gameleira - Vale SA Copper Canyon - SpectrumGold (Novagold) Kodu - Government Of Papua New Guinea Top 50 Major Global Non-Producing Cu-Au Deposits by Gold Contained Taysan - Chase Resource Tong-La-Shan - Jinshan Gold Mines political risk (2nd largest pre-producing deposit in a low political risk jurisdiction globally) Nokomis - Duluth Metals - 0.2 0.4 0.6 0.8 1.0 1.2 1.4 • Prosperity is one of the largest non-producing copper-gold deposits in a jurisdiction with low Gold Grade (g/t) Source: Wellington West Capital Markets; Metals Economics Group 2008-2009; Fraser Mining Institute Survey for Political Risk; Transparency International Annual Report 2008 Prosperity Gold-Copper Project
  • 13. Prosperity Gold-Copper Project Timeline Feasibility Reserve Update Environmental Assessment Review Provincial EA Certificate Granted Permitting Permit Applications Submitted Federal EA Certificate Granted Project Financing Order Long-Lead Equipment Site Prep Construction Commissioning 2006 2007 2008 2009 2010 2011 2012 2013 2014
  • 14. Prosperity Gold-Copper Project British Columbia/Canadian Permitting Red Chris • British Columbia is responsible for (copper/gold) British mine development Columbia • The Province granted Prosperity EA Certificate in January 2010 Galore Creek (copper/gold) Mt. Milligan • Four other similar projects have (copper/gold) received EA Certificates and permits in recent history • Federal review panel to issue final Williams Lake report to minister in early July Prosperity (Gold / Copper) Copper Mtn. (copper/gold) Vancouver Mining projects permitted in last 12-18 months
  • 15. Prosperity Gold-Copper Project Details of Gold Stream Agreement • Franco-Nevada will have right to purchase 22% of Prosperity gold production for $400/oz (inflation adjusted) • Taseko will receive US$350 million plus 2 million Franco- Nevada 2017 share warrants • Funding contingent on: • permitting, • project being fully financed, and • 75% of concentrate contracted for 5 years • Deposit funded pro-rata with other sources of capital
  • 16. Prosperity Gold-Copper Project Value of Gold Stream Agreement • Taseko will receive ~45% of required construction capital by selling 6% of total gross revenue Recoverable Metal Au 7.7 million oz Cu 3.6 billion lb Long-term Metal Pricing Au price $925/oz Cu price $2.10/lb Total Au revenue $7.1 billion Total Cu revenue $7.6 billion Total revenue $14.7 billion Au revenue to FNV $0.9 billion % of total revenue to FNV 6.1%
  • 17. Prosperity Gold-Copper Project Financing Sources: (C$ millions) 1) Cash on Hand $200 2) Sold 22% of Prosperity Gold Stream $350 3) Gibraltar Cashflow $100 Total $650 Prosperity Capital Costs: $815 Financing requirements: $165 Financing Options: 1. Project finance debt 2. Sale of offtake for debt 3. Sale of minority interest in Prosperity (5%-10%)
  • 18. Gibraltar Copper Mine Location: 65 km north of Williams Lake, BC Ownership: 75% 2.7 billion pounds recoverable copper Mineral Reserves: 30 million pounds recoverable molybdenum Mine Type: Open-pit Estimated Annual 90 million pounds copper (Taseko share) LOM Production: 900,000 pounds molybdenum (Taseko share) Mine Life: 25 years • 25% of Gibraltar was sold to Japanese consortium in Q1 2010 for $187 million • $300 million invested to modernize the operation • Remaining improvements expected to be completed by Q4 2010 • Average annual copper production to increase to 115 million pounds by Q4 2010 • Gibraltar is the second largest open pit copper mine in Canada • Replacement value of $825 million
  • 19. Gibraltar Copper Mine Steadily Increasing Production 250 300 250 200 Prosperity Prosperity (Au - ozs, thousands) (Cu - lbs, millions) 200 150 150 100 100 Prosperity Prosperity Gibraltar Gibraltar Gibraltar Gibraltar Gibraltar Gibraltar 50 50 0 0 2009 2010 2011 2012 2013 2014 By 2013, copper production increasing by 200% plus 300,000 ounces of gold per year
  • 20. Looking Ahead 2010 Key Priorities  Receive Provincial approval for the development of Prosperity  Complete transaction to sell 25% of Gibraltar to Japanese Consortium  Reduce Long-term debt  Monetize a portion of Prosperity’s gold stream  Convert Prosperity’s mineral claims to a mining lease  Complete funding of remaining ~$165 million for construction of Prosperity  Receive final approvals for development of Prosperity from Federal Government  Commence site preparation work at Prosperity  Complete Gibraltar expansion/modernization project
  • 21. Looking Ahead New Higher Priced Hedges now in Effect $5.00 If copper above, then Cap Price Taseko pays $4.00 $3.00 Collar Price If copper price below, $2.00 then options pay Taseko $1.00 $0.00 Jan-10 Apr-10 Jul-10 Oct-10
  • 22. Looking Ahead Naturally Hedged $4.50 $160 $4.00 $140 $3.50 $120 $3.00 (Crude Oil, US$/bl) Copper (US$/lb) $100 $2.50 $80 $2.00 $60 $1.50 Copper $40 $1.00 Crude Oil $20 $0.50 $0.00 $0 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 If the price of copper declines, Gibraltar’s cash costs adjust accordingly
  • 23. Looking Ahead Naturally Hedged $4.50 $1.20 $4.00 $1.10 $3.50 $3.00 $1.00 Copper (US$/lb) (C$/US$) $2.50 $0.90 $2.00 $1.50 $0.80 Copper $1.00 C$ / US$ $0.70 $0.50 $0.00 $0.60 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 If the price of copper declines, Gibraltar’s cash costs adjust accordingly
  • 24. Looking Ahead Naturally Hedged $4.50 $3,500 $4.00 $3,000 $3.50 (Baltic Handy Size Index $2,500 $3.00 Copper (US$/lb) $2.50 $2,000 $2.00 $1,500 $1.50 $1,000 Copper $1.00 BHSI $500 $0.50 $0.00 $0 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 If the price of copper declines, Gibraltar’s cash costs adjust accordingly
  • 25. Analyst Recommendations 12-Month Target Price Raymond James - Tom Meyer 7.00 Paradigm Capital - David Davidson 7.75 Credit Suisse - Alex Terentiew 6.00 Canaccord Capital - Orest Wowkodaw 6.40 Jennings Capital - Peter Campbell 7.00 CIBC - Ian Parkinson 7.50 BMO Capital Markets - David Cotterell 7.00 TD Newcrest - Craig Miller 7.50 Wellington West - Steve Parsons 7.00 Bloomberg Consensus: 7.02
  • 26. The Taseko Advantage Financial • ~$200 million cash on hand ($1/share) Strength • Significant Cash flow at current metal prices • Planned 60% copper production increase from Growth Gibraltar over next 9 months Potential • Diversifying into major gold producer • 8 million ounces of gold reserves (16 million ounces Long-Life of gold resources) Assets • 6 billion pounds of copper reserves (11 billion pounds of copper resources) • Assets located in secure political jurisdiction Stability • Experienced, operations-focused management team Market Capitalization = C$1.0 billion
  • 27. Questions