Taseko delivers $10 million quarterly profit

Vancouver – With its Gibraltar copper mine in central British Columbia now in full production and hitting its marks, Taseko Mines (TKO-V) posted a third quarter profit of $10.1 million (or 10 per share) compared to a loss of $6.4 million (or 8 per share) in the prior year’s corresponding period.

Strong copper and molybdenum prices buoyed quarterly revenues to $32.2 million, surpassing forecasts by 16%. Results benefited from the first full quarter of molybdenum production (contributing $7.9 million as by-product credits) since the circuit was brought on-stream midway through the prior quarter.

Quarterly copper production, of 15.5 million pounds, came in about 4% below forecast levels due to further ore and waste haulage distances, and harder ore mined from the Pollyanna pit leading to lower mill throughputs. Copper recovery dropped to 80.8%, from 82.6, due increased supergene ore being fed to the mill. Total cash costs were pegged at US$1.02 per pound of copper (net of molybdenum credits), 25% of which is attributable to concentrate transportation, smelting and refining costs.

Molybdenum output of 177,600 pounds fell 8% short of forecast production, partially due to lower recovery levels caused by ore variability.

A decision on Taseko’s planned hydrometallurgical refinery at Gibraltar, which would produce cathode copper and essentially mitigate the current transportation, smelting and refining costs, is anticipated by the end of 2005. The currently favoured refinery option is the Cominco Engineering Services technology. Capital expenditure costs of about $110 million are expected, but the outlay could save up to 20 per pound in copper operating costs by eliminating transportation expenses. Management expects to break ground for construction by mid-2006 with no permitting issues anticipated.

Taseko’s stock price has dropped about 15% over the last week, to the $1.20 per share level. The company posts a $124 million market capitalization given its 103.2 million shares outstanding.