Taseko celebrates an improved Gibraltar mine

WILLIAMS LAKE, B.C. — When Taseko Mines (TSX: TKO; NYSE-MKT: TGB) reopened Gibraltar near Williams Lake in 2006, the 36-year-old mine had enough ore to feed its 30,000-tonne-per-day mill for just over three years.

Then Taseko spent six years investing $700 million in the operation.

On Sept. 19 the company celebrated the culmination of that effort. The Gibraltar mine is now ramping up to its new capacity of 85,000 tonnes per day, a throughput that will enable the mine to produce 165 million lb. copper annually — more than three times its re-expansion output.

Molybdenum output has also tripled, thanks to a new moly facility that recovers 50% of the molybdenum in Gibraltar’s ore. The old moly circuit only managed 30% recovery.

In his remarks at the event, Taseko president and CEO Russell Hallbauer said he was proud to have helped realize his father’s prediction.

“As I was preparing for this day I was reminded of a conversation that took place nearly 50 years ago,” Hallbauer said. “A couple people who were there share this recollection: they were talking about the Gibraltar deposit and my father was very clear. He said Gibraltar would one day be built into a mine and that it would become one of the great mines in Canada.

“Turns out he was right. Less than ten years later Gibraltar was indeed built, and today it is one of the great mines in Canada.”

Gibraltar now ranks as the second-largest open-pit copper mine in Canada.

Taseko achieved that ranking through a three-stage expansion. In stage one, realized between 2007 and 2008, the company added a 34-foot, semi-autogenous grinding (SAG) mill, converted the mine’s rod mills to ball mills and replaced the flotation circuit with larger cells. These modifications boosted throughput from 30,000 tonnes per day to 46,000 tonnes per day, at a cost of $76 million.

In 2009 Taseko embarked on stage two. The company built an in-pit crusher and conveyor system, increased the capacity of the re-grind and cleaner flotation circuits, installed a two-stage tailings pumping system and added a coarse-ore stockpile with a system that fed ore directly into the SAG mill. Taseko bought new mining equipment, bolstering its fleet with two mining shovels and four haul trucks. Stage two cost $224 million and upped throughput to 55,000 tonnes per day.

Stage three was supposed to get underway in 2009, but the recession stalled Taseko’s plans. But in early 2011 the company broke ground on a 30,000-tonne-per-day stand-alone facility to augment the existing mill. The new mill and concentrator facility are now complete, as is a new truck shop. And the mine has several more haul trucks, another mining shovel and a production drill.

Taseko saved the biggest phase of the expansion for last: stage three came in at a cost of $325 million.

Hallbauer offered up some other interesting numbers to illustrate the magnitude of stage three. He said it demanded more than a million person-hours of work, used up 15,000 cubic yards of concrete and 4,000 tonnes of steel, required 700 truckloads of material and equipment to be brought to the mine site, and called for 265,000 metres of electrical cable and 30,000 metres of pipe.

The entire $700-million expansion came in on schedule and on budget. And while engineers advanced the expansion, geologists found new ore at Gibraltar. The mine’s proven and probable reserves now stand at 790 million tonnes grading 0.3% copper and 0.008% molybdenum — enough to feed the mine until 2039.

The Sept. 19 event was intended as a way for Taseko’s management team to show gratitude to all the contractors and employees that made the expansion possible.

“It has been a huge effort and huge accomplishment,” said David Rouleau, Taseko’s vice-president of operations. “This is a milestone event and an opportunity for us to thank everyone who’s been involved.”

B.C.’s Minister for Energy and Mines, Bill Bennett, was on hand to mark the event.

“It’s extraordinary first of all to find a deposit that will support a mine, but then to actually build one — very, very few people in the world have ever done it, have ever built a mine,” Bennett said in his remarks. “So we are in esteemed company.”

Bennett applauded Taseko for its achievement, calling the Gibraltar mine “an incredibly important story for our province.”

Almost everyone from Taseko’s management team and board of directors was in attendance, as were several other important members of B.C.’s mining scene, including Copper Mountain Mining (TSX: CUM) CEO Jim O’Rourke, and Hunter Dickinson heads Robert Dickinson, Ron Thiessen and David Copeland.

Not everyone spoke, but of those who did, none could resist the opportunity to also promote the next project that Taseko hopes will grow its output: the New Prosperity project a few hundred kilometres south. The original mine designed for the Prosperity site was denied a federal environmental permit because of the damage it would have caused to Fish Lake. Taseko redesigned the operation to save Fish Lake, for another $300 million, and the federal environmental review of the New Prosperity plan recently wrapped up. Taseko now awaits a decision.

“I think some of my dad has rubbed off on me,” Hallbauer said. “I think his ability to recognize the potential for a great mine exists in me too. And you know what else? There’s the potential to build another great mine in B.C., right down the road from here.

“The Prosperity deposit is the largest undeveloped copper-gold deposit in Canada and the tenth largest in the world. It represents billions of dollars of wealth potential for B.C. and Canada, and more importantly represents a once-in-a-generation opportunity for new jobs and economic growth for the Cariboo. It is time now for the federal government to also commit to the Cariboo by saying ‘yes’ to New Prosperity.”

Bennett echoed that sentiment, though in slightly veiled terms.

“Let me finish by saying this,” he said. “Mining leads to prosperity, and we all support prosperity.”