Presentation: Taseko Mines (April 2011)
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Presentation: Taseko Mines (April 2011)

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Corporate Presentation for Taseko Mines (TSX: TKO) ...

Corporate Presentation for Taseko Mines (TSX: TKO)

Taseko Mines' wholly-owned Aley Niobium Project is located in northern British Columbia, 140 km north of Mackenzie.

Taseko acquired the Aley project in 2007 and completed a significant exploration program on the asset in the summer of 2010.

The company plans to accelerate work on the project in 2011, with a comprehensive work program planned. Additionally, an extensive core drilling program is planned to collect preliminary geo-technical data for site design and metallurgical testwork.

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Presentation: Taseko Mines (April 2011) Presentation: Taseko Mines (April 2011) Presentation Transcript

  • Setting the Standard in Mine DevelopmentApril, 2011
  • 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 Companys 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.
  • The Taseko Advantage • ~$200 million cash on hand ($1/share) Financial • Significant cash flow at current metal prices Strength • Debt free • Diversified project pipeline of 100% owned, near-term gold, copper and Growth niobium projects • 90% copper production increase by 2014 • Assets located in secure political jurisdiction Stability • Experienced, operations-focused management team • 8 million ounces of gold reserves (16 million ounces of gold resources) Long-Life • 6 billion pounds of copper reserves (11 billion pounds of copper Assets resources) • Large developing niobium resource
  • Assets Located in British Columbia British Columbia Aley (Niobium) Mackenzie Gibraltar Harmony (Copper / Moly) (Gold) Williams Lake Prosperity (Gold / Copper) Vancouver
  • Financial StrengthStrong Balance Sheet $800 $700 $600 $500 (C$, millions) $400 $300 $200 $100 $0 2007 2008 2009 2010 Cash and Equivalents Total Assets Shareholders Equity
  • Asset Stability Gibraltar Copper MineLocation: 65 km north of Williams Lake, British ColumbiaOwnership: 75%Mineral Reserves: 2.7 billion pounds recoverable copperunder review 30 million pounds recoverable molybdenumMine Type: Open-pit, 55,000 tpd mill throughputMine Life: +20 yearsunder review • 25% of Gibraltar was sold to Japanese consortium in Q1 2010 for $187 million • $300 million invested to modernize the operation from 2006-2010; Ramp up to 55,000 tpd in H1 2011 • Additional $325 million expansion approved; construction to be completed by end of 2012 • Gibraltar is the second largest open pit copper mine in Canada • Reserve update mid-May 2011; 43-101 mid-June 2011 → ~$1.5 billion replacement value of fixed property and mineral assets *LOM Production estimates are 100% of mine production
  • Asset Growth Gibraltar Copper MineGDP3 Project Scope • Construction of a new 55,000 tpd concentrator • Expansion of mining fleet to allow 85,000 tpd ore delivery; 330,000 tpd mining rate • Construction of a new molybdenum separation facility • Upgrade site infrastructure to support higher mining rates and concentrator throughputReserve Update • Cut-off to remain at 0.20% Copper • Pit shells to be evaluated from $2 - $3 • Expected 43-101 update by June 2011; a significant conversion of Gibraltar’s 500 million tons of resources is anticipated
  • Asset Growth Gibraltar Copper MineProject Rationale • Based on a conservative $1.50/ pound margin, the project has a simple payback of 3 years • Project completion by December 2012 • Take advantage of current copper curve • Transitional growth until Prosperity Federal EA Certificate received • Low capital intensity • $4,300 / tpd mill capacity • $5,900 / tpd mill capacity (including mining equipment) • Prosperity engineering team transferred to GDP3
  • Asset Growth Gibraltar Copper Mine Production Profile • By 2013 copper production will have increased by 70% and molybdenum production will increased by 170% GDP3 Construction GDP3 Ramp Up Commenced Annual Estimated Production 2011 2012 2013 2014 2015 (million lbs) Copper 95 115 165 180 180 Molybdenum 1.1 2.0 3.0 3.0 3.0 • Long-term total operating costs, site + off property costs, are expected to be US $1.50-$1.70/ pound Note: All figures are on a 100% basis
  • Asset Growth Gibraltar Copper MineCapital Costs & Financing Source of Funds: Use of Funds: C$M % of total C$M % of total Cash and debt* $ 176 54% Concentrator & Moly Plant $ 235 72% Equipment financing $ 90 28% Mining Equipment $ 90 28% JV Partner $ 59 18% Total $325 100% Total $325 100%*Company exploring debt alternatives
  • Asset Growth Gibraltar Copper MinePreliminary GDP3 Timeline Drill Program Reserve updateProject Engineering Procurement Construction Commissioning 2011 2012 2013 2014
  • Growth: Project Pipeline 100% Owned Assets British Columbia • Prosperity Gold/Copper Project Aley (Niobium) Mackenzie • Aley Niobium Project Gibraltar • Harmony Gold Project Harmony (Copper / Moly) (Gold) Williams Lake Prosperity (Gold / Copper) Vancouver
  • Growth Prosperity Gold-Copper ProjectLocation: 125 km south-west of Williams Lake, British ColumbiaOwnership: 100% 7.7 million ounces recoverable goldMineral Reserves: 3.6 billion pounds recoverable copperMine Type: Open-pit, 70,000 tpd mill throughputMine Life: +20 years5-year production profile (based on new Federal Environmental Submission) Yr 1* Yr 2 Yr 3 Yr 4 Yr 5 Average Gold (ounces) 160,000 300,000 325,000 275,000 305,000 300,000 Copper (thousands, pounds) 75,000 130,000 130,000 120,000 120,000 130,000→ Life of mine average annual production ~490,000 gold eq. ounces** * Based on 6 months production ** Based on long-term Au price US $875/oz, Cu Price US $2.25/lb
  • Project Economic Criteria Prosperity Gold-Copper Project Old Project: Revised Project: 2005 Project Economic Criteria 2011 Project Economic Criteria Cu = US $1.50 Cu = US $2.25 Au = US $ 575 Au = US $ 875 $2.40 $1,200 $1.80 $900 (Au - US$/oz)(Cu - US$/lb) $1.20 $600 $0.60 $300 $0.00 $0 2005 2006 2007 2008 2009 2010 Consensus Price Average Cu = $1.32 Consensus Cu = $2.25 Consensus Price Average Au = $550 Consensus Au = $975
  • Growth Prosperity Gold-Copper ProjectTimeline Provincial EA Certificate Granted Mine Permit Process New Engineering for Project New CEAA Review Federal EA CertificateDetailed Facility Engineering & Site Prep Construction Commissioning 2010 2011 2012 2013 2014 2015 2016
  • Growth Aley Niobium ProjectLocation: Northern British ColumbiaOwnership: 100%Mine Type: Open Pit, 5000 tpd mill throughputMine Life: +20 yearsNiobium• Similar usage as molybdenum in steel • Specifically used in manufacturing high strength, low alloy steels • Green technologies, turbines, aerospace, automobile steels, oil and gas• Global annual consumption of ferro-niobium is 210 million pounds/ year • Growing at 5-7% per year• US $4.5 billion industry• Price has averaged over US $20/ pound in the past four years• 3 producers worldwide: • CBMM, Brazil • Anglo American, Brazil • IAMGOLD, Canada
  • Growth Aley Niobium Project Aley Deposit History Cominco: Discovered in 1980 • Spent $2 million on a 20 hole drill program from 1983-1986, outlined significant niobium mineralization • Divested in 2006, non-core Taseko: Acquired in 2007 for $5 million • Preliminary drilling in 2007, 18 holes which confirmed Cominco’s work 2010 Exploration Program • 23 holes drilled, for a total 4,500 meters • Intersections from surface, up to 200 meters of niobium and rare earth mineralization
  • 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 Appendix 1: Major Cu-Au Deposits Ajax - Abacus Mining and Exploration Ilovitza - EurOmax Resources Taca Taca - Lumina Copper Hushamu - IMA Exploration Gameleira - Vale SA Top 50 Major Global Non-Producing Cu-Au Deposits by Gold Contained Copper Canyon - SpectrumGold (Novagold) Kodu - Government Of Papua New Guinea Taysan - Chase Resource Tong-La-Shan - Jinshan Gold Mines Nokomis - Duluth Metals - 0.2 0.4 0.6 0.8 1.0 1.2 1.4 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 political risk (2nd largest pre-producing deposit in a low political risk jurisdiction globally) • Prosperity is one of the largest non-producing copper-gold deposits in a jurisdiction with low
  • Appendix 2: Key AccomplishmentsJanuary 2010 • Received British Columbia Environmental Assessment Certificate for ProsperityMarch 2010 • Completed transaction to sell 25% Gibraltar Mine for ~$187 millionMay 2010 • Signed gold stream agreement with Franco-Nevada to sell 22% of future gold production from Prosperity for US$350 millionJune 2010 • BC Provincial Government granted Taseko a long-term mining lease for Prosperity, providing mineral tenure securityJuly 2010 • Federal Panel submitted its report to the Government of Canada, findings in- line with Taseko’s expectations and Provincial ApprovalNovember 2010 • Prosperity project delayed due to Federal Government’s requested revisionsJanuary 2011 • Announcement of successful drill program at Aley • 2010 production: 92.3 million lbs of copper and 941,000 lbs of molybdenumFebruary 2011 • Board approves a further capacity increase at the Gibraltar Mine, increasing annual copper production by ~60 million lbs to 180 million lbs • Revised Prosperity Project description submitted to CEAA
  • Appendix 3: Investment Summary Share Structure Cash on Hand: ~C$212, as at December 31, 2011 Listed: TSX; TKO / NYSE Amex; TGB S&P/TSX Composite : S&P/TSX Small Cap Indices: S&P/TSX Global Mining : S&P/TSX Global Base Metals Shares 188.9 million Outstanding: Market $1.1 billion Capitalization: 52 Week C$7.27/C$3.27 ; US$7.23/US$3.31 High/Low: Scotia Capital, Raymond James, Wellington West, CIBC, Analyst Canaccord, Jennings Capital, Paradigm, BMO, TD Newcrest, Coverage: Credit Suisse, Dahlman Rose, MLV Target Range: $4.75- $14.25
  • Appendix 4: Experienced Management TeamRussell Hallbauer, P. Eng - President & CEO and Director – Mr. Hallbauer is aprofessional engineer with over 35 years of mining experience. He has a strong background inopen pit and underground mining, overseeing operating joint ventures and revitalizing mines toprofitability.John McManus, P. Eng - Senior Vice President, Operations – Mr. McManus is aprofessional engineer who has worked in the BC mining industry for over 30 years. He hasextensive experience in mine operation, mine engineering and environmental management.Ron Thiessen, CA - Chairman – Mr. Thiessen is an accredited public accountant in Canada.For over 25 years, he has concentrated on the development of venture capital financing foremerging public and private companies. He is a corporate officer and director of several publiclytraded exploration and development companies.Peter Mitchell, CA - CFO – Mr. Mitchell is an accredited charter accountant in Canada. Hehas held leadership finance roles in the mining industry, as well as other industrial companies andmore recently, in the for-profit education sector.Brian Battison - Vice President, Corporate Affairs – Mr. Battison is a public affairsspecialist with over 25 years of experience in policy development, issue management andcommunication in both the private and public sectors. He has been a senior political and policyadvisor in BC and has served as Interim President & CEO of the Mining Association of BC.Scott Jones, P. Eng - Vice President, Engineering – Mr. Jones has over 25 years ofexperience in the mining industry, including property valuations, mining feasibility studies andtechnical engineering support as well as 10 years in open pit operations and exploration in BC andthe Yukon.Dave Rouleau, P. Eng - Vice President, Operations – Mr. Rouleau has over twodecades of experience in the mining and oil and gas industries. He has extensive experience inmine operations and engineering in British Columbia and Alberta.
  • Appendix 4: Experienced Management TeamRobert Rotzinger, P. Eng - General Manager, Projects – Robert is a mechanical engineer and has worked at the GibraltarMine since 1994 where he has taken on increasingly senior positions. He has been tasked with the management of diverse engineering,environmental, metallurgical and mining initiatives, such as the revamped molybdenum circuit and Copper Refinery project. He was a keymember of the team that restarted operations at Gibraltar last year as well as participating in the development of the Gibraltar Joint Venturewith Ledcor CMI Ltd.Tom Broddy - Manager, Engineering – Tom is a mining engineer with more than 19 years of experience in the mining industry.Prior to joining Taseko in 2006, he was Manager of Container Operations at Centerm container terminal in the Port of Vancouver. He spent16 years at Tumbler Ridge working at both the Bullmoose and Quintette coal mines and has significant experience in mine engineering,blasting, pit operations and terminal management.Mary Ellen Thorburn – Corporate Controller – Mary Ellen is a Chartered Accountant, a Certified Public Accountant, and aChartered Financial Analyst with more than 18 years of experience in the mining industry. Prior to joining Taseko, she has worked forBarrick Gold Corporation, UBS Securities, and PWC both in Canada and Internationally.Keith Merriam, P. Eng - Manager, Process Engineering – Keith is a P.Eng. and an Extractive Metallurgist with over 9 yearsexperience in the Mining Industry, primarily in the area of Mineral Processing. He has worked primarily in technical, commissioning andoperational roles, gaining experience in a variety of areas and taking on increasing levels of responsibility. Prior to joining Taseko in 2008,he was the Operations General Foreman at Hudson Bay Mining and Smelting’s Flin Flon Copper/Zinc Concentrator and prior to that, heheld the position of Senior Mill Metallurgist.Katherine Gizikoff - Manager, Government and Environmental Affairs – Katherine is a professional agrologist with 28years experience at coal and metal mines in Western Canada. Prior to joining Taseko in 2007, Katherine was consulting, providingenvironmental management, reclamation, research, and permitting services for the mining industry in BC. Prior to that, she was anenvironmental coordinator for Manalta Coal in Alberta, with earlier work experience at Elkview and Similco. Katherine has extensiveexperience with government-industry committees, facilitation, community liaison and consultation.
  • Appendix 5: Reserves and ResourcesProsperity Mineral Reserves @ C$5.50 NSR/t Cut-Off1 Size Grade Recoverable Metal Contained Metal M Tonnes Au (g/t) Cu (%) Au (M oz) Cu (B lb) Au (M oz) Cu (B lb) P&P reserves 830 0.41 0.23 7.7 3.6 11.0 4.2 M&I Resources 181 0.40 0.30 - - 2.3 1.1 Total 1,011 0.41 0.24 - - 13.3 5.3 Gibraltar Grade Recoverable Metal Contained Metal Category (at 0.20% Cu Size Cut-off) (Million Tons) Cu(%) Mo(%) Cu (Billions lbs) Cu (Billions lbs) P&P Reserves 459 0.315 0.008 2.6 2.9 M&I Resources* 959 0.298 0.008 - 5.71 The mineral resource and reserve estimations were completed by Taseko staff under the supervision of Scott Jones, P.Eng., Vice-President, Engineering and a Qualified Personunder National Instrument 43-101. Mr Jones has verified the methods used to determine grade and tonnage in the geological model, reviewed the long range mine plan, and directedthe updated economic evaluation. The estimates for the reserves used long term metal prices of US$1.65/lb for copper and US$650/oz for gold and a foreign exchange of C$0.82 perUS dollar.. A technical report was filed on www.sedar.com.2 The resource and reserve estimation was completed by Gibraltar mine staff under the supervision of Scott Jones, P.Eng., Vice President, Engineering and a Qualified Person underNational Instrument 43-101. Mr Jones has verified the methods used to determine grade and tonnage in the geological model, reviewed the long range mine plan, and directed theupdated economic evaluation. The estimates used long term metal prices of US$1.75/lb for copper and US$10.00/lb for molybdenum and a foreign exchange of US$0.80/C$1.00. Atechnical report will be filed on www.sedar.com.