TASEKO REPORTS $52 MILLION OF CASH FLOW FROM OPERATIONS FOR FIRST QUARTER 2022 – QNT Press Release


This release should be read with the Company’s Financial Statements and Management Discussion & Analysis (“MD&A”), available at www.tasekomines.com and filed on www.sedar.com. Except where otherwise noted, all currency amounts are stated in Canadian dollars. Taseko’s 75% owned Gibraltar Mine is located north of the City of Williams Lake in south-central British Columbia. Production and sales volumes stated in this release are on a 100% basis unless otherwise indicated.

VANCOUVER, BC, May 4, 2022 /PRNewswire/ – Taseko Mines Limited (TSX:TKO) (NYSE:TGB) (LSE: TKO) (“Taseko” or the “Company”) reports Adjusted EBITDA* of $38 million for the first quarter 2022, a 61% increase over the same period 2021. Earnings from mining operations before depletion* was $43 million and Cash flows provided by operations was $52 million for the quarter. Adjusted net income* was $6 millionor $0.02 per share.

Stuart McDonaldPresident and CEO of Taseko, stated, “Copper markets continue to be robust and Taseko’s realized copper price of US$4.59 per pound and sales volumes of 27 million pounds drove strong financial results in the first quarter. Production of 21 million pounds of copper and 236 thousand pounds of molybdenum was on plan, as development of the upper benches of the Gibraltar pit progressed. The Gibraltar pit will be the primary source of ore for the remainder of this year and grade and continuity of mineralization are expected to gradually improve as mining advances to deeper benches. Softer ore in the Gibraltar pit is allowing for increased milling rates, in line with our expectations and historical performance. Mill throughput averaged over 87,000 tons per day in March, and 90,000 tons per day in April, well above name plate capacity. We continue to expect 2022 copper production of 115 million pounds (+/-5%), with production weighted to the back half of the year.”

Mr. McDonald added, “We are seeing some inflationary pressures on certain input costs, most notably higher diesel prices, which contributed to an overall 9% (or $7 million) increase in total site costs* at Gibraltar this quarter. Operating margins are expected to improve as copper production increases over the remainder of the year.”

“In March, we announced a new 40% larger mineral reserve for Gibraltarextending the mine from 16 to 23 years. The new reserve has the same average grade as the previous, but with a slightly higher strip ratio in the latter half of the mine life. The increase in reserves was a result of updating pit designs using a copper price of US$3.05 per pound (previously US$2.75 per pound), which is still conservative but more in line with the current long-term consensus price of US$3.50 per pound. The after-tax NPV8 of Gibraltar at the long-term consensus price is now $1.1 billion for Taseko’s 75% share of the mine,” continued Mr. McDonald.

“At Florence Copper, we are still waiting for the draft Underground Injection Control (“UIC”) permit to be issued by the US Environmental Protection Agency (“EPA”), which will initiate the 45-day public comment period. This process is taking longer than expected, but we are in regular contact with the EPA who continue to confirm that the process is advancing towards the issuance of the draft UIC permit shortly. During the first quarter, we spent a further $25 million on procurement of long-lead time items and other pre-construction work. We are well positioned to move into the construction of the commercial production facility upon receipt of the final permit,” concluded Mr. McDonald.

First Quarter Review

  • First quarter earnings from mining operations before depletion and amortization* was $42.8 millionAdjusted EBITDA* was $38.1 million and cash flow from operations was $51.8 million;
  • Gibraltar sold 27.4 million pounds of copper in the quarter (100% basis) at record average realized copper prices of US$4.59 per pound in the quarter resulting in $118.3 million of revenue for Taseko;
  • The Gibraltar mine produced 21.4 million pounds of copper and 236 thousand pounds of molybdenum in the first quarter. Copper head grades were 0.19% and copper recoveries were 80.2%;
  • Total site costs* increased by 9% in the quarter primarily due to the impact of higher diesel costs;
  • Adjusted net income* was $6.2 million ($0.02 per share) and GAAP Net income was $5.1 million ($0.02 per share) and were reduced by a $2.3 million realized derivative loss ($0.01 per share) related to copper options that expired in the quarter;
  • The Company has approximately $273 million of available liquidity at March 31, 2022including a cash balance of $213 million and its undrawn US$50 million revolving credit facility;
  • Development costs incurred for Florence Copper were $25.2 million in the quarter and included further payments for major processing equipment for the SX/EW plant, other pre-construction activities and ongoing site costs;
  • The Company now has copper collar contracts in place that secure a minimum copper price of US$4.00 per pound for more than 90% of its attributable production in 2022;
  • The EPA continues to advance their review process and is expected to publicly issue the draft Underground Injection Control permit shortly, and then a public comment period will commence; and
  • In March 2022, the Company announced a new 706 million ton proven and probable sulphide reserve for the Gibraltar mine, a 40% increase as of December 31, 2021. The new reserve estimate allows for a significant extension of the mine life to 23 years with total recoverable metal of 3.0 billion pounds of copper and 53 million pounds of molybdenum.

*Non-GAAP performance measure. See end of news release

HIGHLIGHTS

Operating Data (Gibraltar – 100% basis)

Three months ended March 31,

2022

2021

Change

Tons mined (millions)

20.3

32.0

(11.7)

Tons milled (millions)

7.0

7.2

(0.2)

Production (million pounds Cu)

21.4

22.2

(0.8)

Sales (million pounds Cu)

27.4

22.0

5.4

Financial Data

Three months ended March 31,

(Cdn$ in thousands, except for per share amounts)

2022

2021

Change

Revenues

118,333

86,741

31,592

Earnings from mining operations before depletion and amortization*

42,773

30,313

12,460

Cash flows provided by (used for) operations

51,753

(3,283)

55,036

Adjusted EBITDA*

38,139

23,722

14,417

Adjusted net income (loss)*

6,162

(5,534)

11,696

Per share – basic (“Adjusted EPS”)*

0.02

(0.02)

0.04

Net income (loss) (GAAP)

5,095

(11,217)

16,312

Per share – basic (“EPS”)

0.02

(0.04)

0.06

*Non-GAAP performance measure. See end of news release

REVIEW OF OPERATIONS

Gibraltar mine (75% Owned)

Operating data (100% basis)

Q1
2022

Q4
2021

Q3
2021

Q2
2021

Q1
2021

Tons mined (millions)

20.3

23.3

25.2

24.9

32.0

Tons milled (millions)

7.0

7.4

7.4

7.2

7.2

Strip ratio

2.6

2.2

1.3

2.3

6.0

Site operating cost per ton milled (Cdn$)*

$11.33

$9.94

$8.99

$9.16

$8.73

Copper concentrate

Head grade (%)

0.19

0.24

0.28

0.22

0.19

Copper recovery (%)

80.2

80.4

84.2

83.3

81.5

Production (million pounds Cu)

21.4

28.8

34.5

26.8

22.2

Sales (million pounds Cu)

27.4

23.8

32.4

26.7

22.0

Inventory (million pounds Cu)

4.0

9.9

4.9

3.5

3.6

Molybdenum concentrate

Production (thousand pounds Mo)

236

450

571

402

530

Sales (thousand pounds Mo)

229

491

502

455

552

Per unit data (US$ per pound produced)*

Site operating costs*

$2.95

$2.02

$1.53

$2.02

$2.23

By-product credits*

(0.18)

(0.30)

(0.25)

(0.25)

(0.27)

Site operating costs, net of by-product credits*

$2.77

$1.72

$1.28

$1.77

$1.96

Off-property costs

0.36

0.22

0.29

0.25

0.27

Total operating costs (C1)*

$3.13

$1.94

$1.57

$2.02

$2.23

First Quarter Review

Copper production in the first quarter was 21.4 million pounds and was impacted by lower grades and recoveries from ore mined in the upper benches of the Gibraltar pit. Ore quality is expected to improve for the remainder of the year as mining progresses deeper into the Gibraltar pit.

A total of 20.3 million tons were mined in the first quarter with the decrease from 2021 rates due to longer haul distances in the current phase of mining. Heavy snowfall coupled with extremely cold temperatures also impacted mine equipment and mill availabilities in January. Mill throughput improved throughout the quarter exceeding name plate capacity (85,000 tpd) by 3% in March due to the softer nature of Gibraltar ore.

The strip ratio increased over the prior quarter due to the higher initial stripping rates of the Gibraltar pit. Gibraltar ore will make up the balance of ore for the rest of 2022 as mining in the current phase of Pollyanna will be completed in the second quarter. Ore stockpiles also decreased by 1.4 million tons in the first quarter in accordance with the mine plan.

Total site costs* at Gibraltar of $75.0 million (which includes capitalized stripping of $15.1 million) for Taseko’s 75% share was $6.4 million higher than the same quarter last year due primarily to higher diesel prices which were 46% higher than 2021, rising steel prices in grinding media as well as increases in other mining costs.

*Non-GAAP performance measure. See end of news release

REVIEW OF OPERATIONS – CONTINUED

Molybdenum production was 236 thousand pounds in the first quarter with lower grades associated with the Gibraltar ore. At an average molybdenum price of US$19.08 per pound, molybdenum generated a by-product credit per pound of copper produced of US$0.18 in the first quarter.

The Company realized 27.4 million pounds of copper sales in the first quarter which was 6.0 million pounds higher than copper production of 21.4 million pounds. Major disruption to the highway and rail infrastructure in southwest British Columbia from severe rainstorms and flooding in November 2021 Prevented significant production from being delivered to the port for shipping last quarter. Finished inventory was 4.0 million pounds at the end of March in line with historical average levels.

Off-property costs per pound produced* were US$0.36 for the first quarter which is higher than normal as it includes the off-property costs related to the additional 6.0 million pounds of excess inventory sold in the period.

Total operating costs per pound produced (C1)* were US$3.13 for the quarter and were US$0.90 per pound higher than the first quarter last year as shown in the graph below:

Full story available on Benzinga.com



Source link

Recommended For You

About the Author: News Center