Taseko Produces 13.4 Million Pounds of Copper and 223,000 Pounds of Molybdenum in First Quarter.VANCOUVER, British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Taseko Mines Limited (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension VENTURE:TKO)(AMEX AMEX See: American Stock Exchange :TGB TGB Tangentbord (Swedish: keyboard) TGB Très Grande Bibliothèque TGB Tiagabine TGB Telecommunications Grounding Busbar TGB Terrain Vehicle (Swedish military) TGB Taiwan Golden Bee Co Ltd ) announces its financial results for the quarter ending December 31, 2005, including production and sales for the Gibraltar Mine located near Williams Lake Williams Lake is the name of several places: Canada
Overview & Highlights Taseko had after tax earnings of $6.7 million, or $0.06 per share ($0.06 per share fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) in the first quarter of its 2006 fiscal year. The Company had an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $8.1 million for the period. The Gibraltar mine met its copper production forecast for the quarter and exceeded its molybdenum molybdenum (məlĭb`dənəm) [Gr.,=leadlike], metallic chemical element; symbol Mo; at. no. 42; at. wt. 95.94; m.p. about 2,617°C;; b.p. about 4,612°C;; sp. gr. 10.22 at 20°C;; valence +2, +3, +4, +5, or +6. production forecast by 11%. In addition: - Revenues of $36.2 million and $5.1 million were realized from sales of copper and molybdenum. - The average prices realized for sales were US$1.88 per pound for copper and US$22.45 per pound for molybdenum. - Copper production was 13.4 million pounds in concentrate. - Copper sales were 16.4 million pounds in 28,912 wet metric tonnes ("WMT (Windows Media Technologies) See Windows Media. ") of concentrate. - Molybdenum production was 223,000 pounds in concentrate. - Molybdenum sales were 196,000 pounds in 192 WMT of concentrate. A reserve update completed during the quarter resulted in a 30% increase in proven and probable reserves at Gibraltar (see Taseko News Release dated December 12, 2005). A $2 million exploration drilling program is planned for Gibraltar in 2006 in order to more fully define the material adjacent to existing pits with the objective of further increasing the mineral reserves and therefore mine life. Drilling is scheduled to begin in March. An engineering study has been commissioned to determine the optimum alternative for expanding mill capacity by approximately 25%. The goal is to increase revenue and reduce operating costs operating costs npl → gastos mpl operacionales by increasing metal production as a result of higher throughputs and metal recoveries. The study is to be completed in March. Taseko will re-assess the economics of constructing a copper refinery at the site once the reserve and mill capacity studies are completed. The Company re-initiated feasibility and permitting work on its 100% owned Prosperity Copper-Gold Project, with the objective to advance the project toward a production decision. Subsequent to the end of the quarter Taseko was approved, subject to final normal course documentation, to move to the TSX Exchange (formerly the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. ) from the TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. . It is expected that the Company will begin trading on the TSX Exchange during the week of February 20, 2006. Gibraltar Mine The Gibraltar mine is operated under an agreement between Taseko's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Gibraltar Mines Ltd., and Ledcor CMI (Computer-Managed Instruction) Using computers to organize and manage an instructional program for students. It helps create test materials, tracks the results and monitors student progress. Ltd. First Quarter Production Results The following table is a summary of the operating statistics for the current quarter (Q1 - 2006) compared to the previous quarter (Q4 - 2005). Statistics for the previous quarter are shown for comparison rather than those for the first fiscal quarter of 2005, as the latter was a restart To resume computer operation after a planned or unplanned termination. See boot, warm boot and checkpoint/restart. period prior to commercial production.
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Q1 - 2006 Q4 - 2005
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Total tons mined (millions)(i) 10.1 10.5
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Tons ore milled (millions) 3.0 3.0
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Stripping ratio 2.31 2.42
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Copper grade (%) 0.286 0.281
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Molybdenum grade (%MoS2) 0.014 0.014
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Copper recovery (%) 78.1 77.7
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Molybdenum recovery (%) 42.9 20.3
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Copper production (millions lb) 13.4 13.0
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Molybdenum production (thousands lb) 223 108
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(i)Total tons mined includes sulphide ore, oxide ore, low grade
stockpile material, overburden, and waste rock which were moved
from within pit limit to outside pit limit during the period.
Total tons mined decreased in the current quarter compared to the previous quarter, mainly as a result of a shortage of haul trucks available due to lack of tires. In order to help alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied this industry wide problem, mine staff has carried out an analysis of the detailed mining sequence of the current pit and developed a new plan, taking into account the anticipated haulage truck availability and integrating the advantage of shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. haul distances. As a result of the new detailed mine plan and existing tire supply contracts, continuing tire shortages are not expected to affect metal production during 2006. The forecasted copper and molybdenum production for fiscal 2006 is 60.1 million pounds and 874,000 pounds, respectively. Forecast production and costs, broken down by quarter, are tabulated below, and compared to the actual results for the current quarter.
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Q1 (F) Q1 (A) Q2 (F) Q3 (F) Q4 (F)
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Copper (millions lb) 13.4 13.4 15.2 15.7 15.8
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Molybdenum (thousands lb) 200 223 220 227 227
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Copper production
Costs(1), net of
by product credits,
per lb of copper US$1.03 US$1.10 US$0.81 US$0.81 US$0.80
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Off property costs(2)
(transport, treatment
& sales) per lb of
copper US$0.30 US$0.33 US$0.34 US$0.34 US$0.34
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Total cash costs of
production per lb
of copper US$1.33 US$1.43 US$1.15 US$1.15 US$1.14
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(1) Excludes mining equipment lease costs but includes contractor
overhead costs. The by-product credit is based on pounds of
molybdenum sold. The forecast production costs for 2006 are
based on a molybdenum sales price of US$25 per pound for the
first quarter and US$20 per pound for the remainder of the year.
(2) Off-property costs are higher than would otherwise be expected
due to price participation assessments applied by Glencore Ltd.,
see Financial Results.
Copper produced in concentrate during the quarter was 13.4 million pounds, a 3% increase from the 13.0 million pounds produced in the previous quarter, and 100% of the forecast for the quarter, as a result of improved mill recovery. Copper sales were 16.4 million pounds in 28,912 WMT of concentrate. Copper concentrate inventory at December 31, 2005 was 13,015 WMT, a decrease in inventory from the 18,614 WMT of concentrate on hand at the end of the previous quarter. Molybdenum produced in concentrate during the quarter was 223,000 pounds, a substantial increase from the 108,000 pounds produced in the previous quarter, and 11% higher than the forecast for the period, mainly as a result of higher recoveries. Several modifications to the circuit were completed in the previous quarter, and coupled with a much better understanding of the operation of the circuit, led to the improved performance of the molybdenum circuit and the increase in molybdenum production. Molybdenum sales totalled 196,000 pounds in 192 WMT of concentrate, an increase from the 117,000 pounds sold in the previous quarter. At the end of the quarter, molybdenum in concentrate inventory was 37.3 WMT, an increase from the 9.4 WMT at the end of the previous quarter. Production unit costs were above forecast as a result of higher prices for labour, fuel, steel feed for the mill, reagents and miscellaneous supplies. A sharp increase in industry activity has lead to supply shortages and the higher prices. In addition, the shovel fleet and mill both underwent unscheduled unscheduled Adjective not planned or intended Adj. 1. unscheduled - not scheduled or not on a regular schedule; "an unscheduled meeting"; "the plane made an unscheduled stop at Gander for refueling" one time repairs during the period, which also affected unit costs. There were no lost time accidents during the period. At the end of the quarter, the Gibraltar operation employed 258 people. Prosperity Project Work on the Company's 100% owned Prosperity Project was re-initiated during the quarter. The Prosperity property, located in south-central British Columbia about 125 kilometres southwest of Williams Lake, hosts a large copper-gold deposit. Extensive work was done by the Company on Prosperity prior to 2001, including participation in the British Columbia Environmental Assessment (BCEA BCEA Basic Conditions of Employment Act (South Africa) BCEA British Columbia Electrical Association (Burnaby, BC, Canada) BCEA Barcelona Center for Education Abroad (Barcelona, Spain) ) process. The current program includes a review and update of previous feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. work and integration of new technologies and development concepts, as well as moving the project back into the BCEA process. By the end of the second quarter, Taseko plans to establish a clear time line for the release of a reserve estimate and feasibility study for the Project. Financial Results Taseko had after-tax earnings of $6.7 million, or $0.06 per share ($0.06 per share fully diluted1) in the quarter ended December 31, 2005 (Q1 - 2006) compared to a loss of $5.2 million, or $1.09 per share, in the first quarter of the previous fiscal year (Q1 - 2005). The main reason for the increase over the prior year is that full commercial production is now underway. The Company realized significant revenues from sales of copper and molybdenum in the current quarter whereas the mine was in a restart period in the first quarter of fiscal 2005. Taseko received revenues of $41.3 million in the current quarter, including $36.2 million from sales of copper concentrate, and $5.1 million from sales of molybdenum concentrate. First quarter revenues include approximately $9.9 million for copper sold from inventory the previous quarter. The Company did not recognize the revenue from this sale at September 30, 2005, as the copper was held in a storage facility at the dock because there were no ships available at that time to transport the copper to smelters. Consequently, the Company had recorded this sale as deferred revenue at September 30, 2005. At December 31, 2005, a portion of this copper concentrate still remained unshipped and that portion has been recorded as deferred revenue in the amount of $4.7 million and will be recognized as revenue upon shipment. Total production costs for the period were $26.0 million. Production costs in the corresponding quarter of fiscal 2005 were nil as commercial production had not yet commenced. The Q1 - 2006 costs include: $11.1 million for mining; $8.4 million for milling; $1.5 million for mine administration; $1.1 million in administration fees paid to Ledcor; $0.2 million for royalties; $0.2 million for molybdenum treatment expenses; an inventory reduction of $3.9 million; and an offsetting silver credit totalling $0.4 million. Transportation and treatment costs were $6.3 million for Q1-2006 compared to $nil in Q1-2005. Amortization expense increased to $0.8 million compared to $0.5 million in the same period of fiscal 2005. Glencore Ltd. purchases the whole of the copper concentrates produced by the Gibraltar mine pursuant to the terms of a written contract. Gibraltar Mines Ltd. and Glencore have a dispute concerning the interpretation of the contract. Glencore asserts that the contract provides that the price to be paid for the concentrates should be reduced by a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. referred to as "price participation". Gibraltar asserts that the contract does not provide for any such deduction. To December 31, 2005, Glencore had withheld approximately US$3.34 million from invoices rendered by Gibraltar and is claiming repayment of a further US$0.52 million, on the basis of its interpretation of the contract. Of this amount, US$1.61 million was withheld during the quarter ended December 31, 2005. The dispute is set for arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the in London, England, in June 2006. If Gibraltar is successful in the arbitration, and there is no appeal, then Gibraltar should immediately receive the full amount that has been withheld by Glencore. These amounts have not been accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in the financial statements but will be booked in the period of settlement. Additional information is provided in Taseko's Management Discussion and Analysis and Financial Statements for the quarter ended December 31, 2005. Download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. these documents from www.tasekomines.com or www.sedar.com. Russell Hallbauer, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are based on current expectations and which involve risks and uncertainties, including those referred to in Taseko's Annual Information Form ("AIF AIF Annual Information Form AIF Apoptosis-Inducing Factor AIF Agence Intergouvernementale de la Francophonie (French: Intergovernmental Agency for Francophony) AIF Australian Imperial Force ") filed with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , or Taseko's annual Form on 20F ("20F") filed with United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. securities regulatory authorities, that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in the forward-looking statements. Such forward-looking statements include statements regarding financial results and expectations for 2006 and include, among other things, statements regarding targets, estimates and/or assumptions in respect of copper production and/or copper prices, cash operating costs, expenditures on property, plant and equipment, increases and decreases in production, reserves and/or resources and anticipated grades and recovery rates and are or may be based on assumptions and/or estimates related to future economic, market and other conditions. Factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, the factors described or referred to elsewhere herein and/or in the AIF and 20F, and include unanticipated and/or unusual events. Many of such factors are beyond Taseko's ability to control or predict. Actual results may differ materially from those anticipated. Readers are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Taseko disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. For further information on the Company, Investors should review the Company's Canadian public filings at www.sedar.com or its US public filings at www.sec.gov. 1 Diluted earnings (loss) per share are calculated using the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of includes the underlying common shares to the tracking preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. and convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. on an if-converted basis and assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. common shares at the average market price during the period. The TSX Exchange and the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. have neither appr oved nor disapproved of the contents of this press release. Taseko Mines Limited (TSX VENTURE:TKO) (AMEX:TGB) |
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