Taseko posts $24.4 million earnings for 2005

Vancouver – Strong copper and molybdenum prices propelled Taseko Mines (TKO-V, TGB-X) to after tax earnings of $24.4 million (or 23 per share) for fiscal 2005.

The company’s sole producer, the open pit Gibraltar mine located near Williams Lake in south-central British Columbia, posted revenues of $71.9 million for copper output, realizing an average of US$1.48 per pound for the metal, and an additional $15.7 million from molybdenum sales that averaged US$31 per pound.

Gibraltar recommenced production in late-2004 and is operated through a joint venture agreement with Ledcor CMI.

Mining during 2005 continued solely from the Stage 4 extension-step back at the Pollyanna pit where 11.2 million tonnes of ore was mined averaging 0.31% copper and 0.017% MoS₂, both slightly above forecast grades. Operations incurred a stripping ratio of 2.31to-1.

Metal recoveries fell short of forecast levels at 76.2% for copper and 23.1% for molybdenum, 5% and 35% below expected returns respectively. Taseko explained the lower copper recovery resulting from ore variability and elevated secondary mineralization levels. Moly production was down due to delays in the start up of the new circuit. Resultantly, overall production came in at 54.8 million pounds of copper, 7% below forecasts, and 427,000 pounds of molybdenum, 20% below forecast.

Copper production costs were pegged at US$0.87 per pound, net of molybdenum credits. Treatment and transportation costs came in at US$0.28 per pound for total cash costs of US$1.15 per pound.

Geologic and economic review of the deposit has resulted in expansion of previously defined pits in the mining plan. Accordingly, proven and probable reserves have increased by 30% to 176 million tonnes grading 0.31% copper and 0.01% molybdenum, using a 0.2% copper cut-off grade. Additionally, measured and indicated resources of 557 million tonnes of 0.28% copper and 0.008% molybdenum have been reviewed at Gibraltar.

Taseko is also updating a feasibility assessment on constructing a copper refinery at Gibraltar. The previously visited proposal would see a hydrometallurgical copper refinery built, potentially producing cathode copper onsite and reducing concentrate shipment costs. Savings have been estimated at about US$0.20 per pound of copper produced.

The company forecasts 2006 production at 60.1 million pounds of copper and 874,000 pounds of molybdenum.

Gibraltar was originally constructed by Placer Development, a predecessor to Placer Dome (PDG-T, PDG-N), in 1971. The mine operated for 27 years, the last two under Boliden Westmin, before ceasing in 1998 due to low copper prices. Placer initially mined higher-grade sections of the deposit resulting in rapid pay-back of development costs in less than three years. Historic production, until 1998, was almost 1.9 billion pounds of copper, 20 million pounds of molybdenum plus 85 million pounds of cathode copper from 305 million tonnes of ore milled.

Taseko posts a $145 million market capitalization based on its recent 103.5 million shares outstanding and recent $1.40 trading level.