UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
CIK # 878518
as at March 24, 2009
TASEKO MINES LIMITED
800 West Pender Street, Suite 1020
Vancouver , British Columbia
Canada V6C 2V6
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F....... Form 40-F.....X....
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ..... No .....
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
By: /s/ Russell E. Hallbauer
Director and Chief Executive Officer
Date: March 30, 2009
Print the name and title of the signing officer under his signature.
1020
- 800 W Pender St.
Vancouver BC
Canada V6C 2V6
Tel 604 684 - 6365
Fax 604 684 - 8092
Toll Free 1 800 667 - 2114
www.tasekomines.com
TASEKO ANNOUNCES RECORD QUARTERLY PRODUCTION AND 2008 YEAR END RESULTS
March 24, 2009, Vancouver, BC - Taseko Mines
Limited (TSX: TKO; NYSE AMEX: TGB) ("Taseko" or the "Company")
reports the results for the fifteen months ended December 31, 2008. Currency
is Canadian dollars unless otherwise indicated.
For the year ended December 31, 2008 the Company reports an operating profit
of $56.5 million, before provisional pricing and inventory adjustments. Annual
gross revenues1 were $258.6 million from the sale of 77.9 million
pounds of copper and 800 thousand pounds of molybdenum at an average realized
price of US$2.68 per pound for copper and US$28.19 per pound for molybdenum.
Net earnings for the fifteen months ended December 31, 2008 was $3.5 million
or $0.02 per share.
Russell Hallbauer, President and CEO of Taseko commented, "During 2008,
Taseko's management team focused on the completion of the Gibraltar expansion
and modernization projects - investing in the mine to ensure its long-term
continuous operation. The position we find ourselves in today supports that
decision. The goal we set out to achieve 36 months ago was to upgrade the
Gibraltar operation and lower the operating costs to remain profitable at
all points of the copper price cycle.
"Gibraltar expansion efforts impacted our operating cost structure during
2008, as significant costs were expensed and metal production was lower than
anticipated. Since September, costs have been reduced dramatically as we've
focused on optimizing the milling operation and cost containment. In a mere
five months, we have reduced our operating costs from over US$2.00 per pound
to US$1.13 per pound in February 2009."
Mr. Hallbauer concluded, "In addition to the many initiatives taking place
at Gibraltar, significant progress has been made on our Prosperity Gold-Copper
Project. In early 2009, the Environmental Assessment Report for Prosperity
was filed with the British Columbia Provincial Government. The report consists
of 3,000 pages of expert opinion supported by scientific data and technical
analysis and includes more than 10 years of examination in the areas of geography,
ecology, sociology and archaeology. The review process will be completed by
the Provincial Government in 180 days."
Key highlights during the quarter and year include:
•Gibraltar produced a record 18.8 million pounds of copper for the three months ending December 31, 2008, as a result of increased throughput achieved by completion of the Phase 1 mill expansion.
•For
the three months ending December 31, 2008, the average realized price, before
provisional pricing adjustments, for copper was US$1.61 per pound and for
molybdenum was US$19.96 per pound.
• For the fiscal year, the average realized price for copper was US$2.68
per pound and for molybdenum was US$28.19 per pound.
•Copper in concentrate sales for the year were 73.4 million pounds,
copper in cathode sales were 4.5 million pounds.
•Molybdenum in concentrate sales during the year were 0.8 million
pounds.
• In February 2009, a US$30 million term loan facility was completed
with Credit Suisse to fund completion of key capital projects.
1 Gross
Revenues is a non-GAAP measure defined as revenues before quotational pricing
adjustments.
Financial Results and Current Market Conditions
|
Non-GAAP Measures The table and discussion below includes certain non-GAAP performance measures that do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. The Company believes that these measures are commonly used, in conjunction with conventional GAAP measures, by certain investors to enhance their understanding of the Company's performance. The Company's use of these non-GAAP measures is intended to provide additional information that should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. |
|
(in millions of dollars) |
Fifteen months ending December 31, 2008 | Twelve
months ending September 30, 2007 |
Three
months ending December 31, 2008 |
Three
months ending December 31, 2007 |
| Gross Revenues1 | 258.6 |
216.1 |
32.5 |
43.7 |
| Gross Cost of Sales2 | 194.7 |
109.5 |
47.53 |
25.0 |
| Amortization | 7.4 |
3.2 |
2.0 |
0.7 |
| Unadjusted Operating Profit (Loss) | 56.5 |
103.4 |
(17.0) |
18.0 |
| Adjustments: | ||||
| Quotational Pricing1 | (26.9) |
2.3 |
(21.9) |
1.2 |
| Inventory NRV Adjustment2 | (1.4) |
- |
(1.5) |
- |
| Operating Profit as reported | 28.1 |
105.7 |
(40.4) |
19.2 |
1 Gross
Revenues is a non-GAAP measure defined as revenues before quotational pricing
adjustments.
2 Gross Cost of Sales is a non-GAAP measure defined as cost of
sales before inventory net realizable value ("NRV") adjustments.
3 Cost of sales for the three months ended December 31, 2008
consist of production costs of $30.9 million, treatment and transportation
costs of $7 million and inventory adjustment of $9.6 million relating to
cost of inventory produced in the prior period but sold in the current period.
Deterioration of global economic conditions during the latter part of the
2008 calendar year resulted in a significant weakening of base metal prices
and high volatility in the exchange traded commodity price. As a result
of the economic crisis and concurrent decrease in demand for copper, the
London Metal Exchange price declined from US$2.90 per pound at the end of
September 2008 to US$1.32 per pound at the end of December 2008.
The following table illustrates the significant changes in the average per
pound prices for copper and molybdenum on a quarter by quarter basis over
the past fifteen months:
Q1
2008 |
Q2
2008 |
Q3
2008 |
Q4
2008 |
Q5
2008 |
|
| LME Copper Price Average | $3.27 |
$3.51 |
$3.83 |
$3.49 |
$1.77 |
Q1
2008 |
Q2
2008 |
Q3
2008 |
Q4
2008 |
Q5
2008 |
|
| Molybdenum Oxide Price Average | $32.50 |
$33.75 |
$33.50 |
$33.75 |
$17.75 |
For the fifteen months ended December 31, 2008, Taseko generated an operating
profit before quotational period and inventory adjustments of $56.5 million
compared to $103.4 million during the twelve months ended September 30, 2007.
Additionally, during the fifteen-month period, Taseko generated cash from
operating activities of $46.9 million as compared to $86.0 million for the
twelve month period ended September 30, 2007.
Under the Company's concentrate sales contracts, final copper and molybdenum
prices are set based on the average metal price in a specified future Quotational
Period (QP). Typically, the quotational periods for copper are either one
or four months after the date of arrival at the port of discharge and for
molybdenum is one month after the month of shipment. Revenues are recorded
under these contracts at the time title passes to the buyer and are based
on the forward price for the expected settlement period. The contracts, in
general, provide for a provisional payment based upon provisional assays and
quoted metal prices. Final settlement is based on the average applicable price
for a specified future period, and generally occurs from one to five months
after shipment. A $26.9 million negative pricing adjustment was recorded in
the fifteen months ended December 31, 2008 related to the rapid deterioration
in copper and molybdenum prices in the final three months of 2008. The result
of these adjustments and other expenses was net earnings after tax of $3.5
million for the fifteen months ended December 31, 2008 as compared to net
earnings after tax of $48.3 million for the year ended September 30, 2007.
The corresponding loss for Taseko for the three months ended December 31,
2008 was $39.7 million as compared to net earnings after tax of $16.2 million
for the three months ended December 31, 2007.
Copper prices have improved in the first quarter of 2009 which will result
in positive price adjustments.
Copper Sales and Inventory
• Copper in concentrate sales volume increased by 49% to 17.6 million
pounds in the three months ending December 31, 2008 from the 11.8 million
pounds of copper sold during the three months ending December 31, 2007. Copper
in concentrate sales volume during the fifteen months ending December 31,
2008 were 73.4 million pounds, compared to sales volume of 53.4 million pounds
in the twelve months ending September 30, 2007.
• Copper cathode sales volume doubled in the three months ending
December 31, 2008 to 0.90 million pounds compared to 0.44 million pounds in
the three months ending December 31, 2007. Copper cathode sales volume for
the fifteen months ending December 31, 2008 were 4.5 million pounds, compared
to 2.1 million pounds in the twelve months ending September 30, 2007.
• Copper in concentrate inventory at December 31, 2008 was 4.1
million pounds compared to 6.3 million pounds at December 31, 2007 and 4.6
million at September 30, 2007.
• Copper cathode inventory at December 31, 2008 was 0.4 million
pounds compared to 0.9 million pounds at December 31, 2007 and 0.3 million
pounds at September 30, 2007.
Molybdenum Sales and Inventory
• Molybdenum in concentrate sales volume declined by 32% to 143,000
pounds from 210,000 pounds sold in the three months ending December 31, 2007.
Molybdenum in concentrate sales during the fifteen months ending December
31, 2008 were 0.8 million pounds, compared to sales volume of 0.6 million
pounds in the twelve months ending September 30, 2007.
• The inventory at December 31, 2008 was 77,000 pounds compared
to 96,000 pounds at December 31, 2007 and 18,100 pounds at September 30, 2007.
• The average price realized for sales of molybdenum for the
three months ending December 31, 2008 declined to US$19.96 per pound, compared
to US$32.18 per pound realized in the three months ending December 31, 2007.
Revenue adjustments were incurred during the period related to shipments
in prior quarters. The QP for shipments sold to Gibraltar's concentrate
trader in August and September 2008 was four months after month of arrival
of the shipment at the designated smelter. As a result, the close or final
QP for these shipments was January and February 2009. These shipments were
provisionally priced when they were shipped, but the copper price dropped
dramatically in October 2008 to a copper price at the end of December 2008
of US$1.39 per pound. This resulted in a negative pricing adjustment of $26.9
million.
Gibraltar Production
The following table illustrates detail on Gibraltar's 15-month performance
for fiscal 2008 as well as the last quarter of 2008 plus January and February
2009:
1
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.
2 Copper production includes concentrate and cathode.
3 The results presented on a monthly basis are unaudited.
4 By-product credit is calculated on a three month total and averaged
over the quarter.
5 Off property costs are calculated on a three month total and
averaged over the quarter.
6 Fiscal 2008 relates to the 15 months ending December 31, 2008.
Tons mined during the three months ending December 31, 2008 decreased compared
to the same period ending December 31, 2007 as a result of the November implementation
of the revised mine plan which included a significantly reduced strip ratio.
Record copper production of 18.8 million pounds was achieved during the three-month
period ending December 31, 2008, an increase from the 13.4 million pounds
produced in the three-month period ending December 31, 2007. This production
increase is a result of the increased throughput achieved by completion of
the Phase 1 mill expansion. Copper and molybdenum metallurgical recoveries
were low in October and November as a result of mechanical problems related
to the regrind mill. The regrind mill will be replaced in summer of 2009 as
part of the completion of the Phase 2 mill expansion.
A new 24-month mine plan implemented in November 2008 for the Gibraltar mine
will sustain 45,000 tons per day ("tpd") mill throughput while mining
at a significantly reduced strip ratio, which will result in lower mine equipment
hours and manpower requirements. Maintaining mill feed at planned grades and
reduced strip ratio is possible as a result of the pre-stripping investment
that was made during 2007 and early 2008. This new operational plan along
with declining input costs, a weaker Canadian dollar and the finalization
of remaining Phase 2 expansion items indicate total cash costs (onsite and
offsite costs) will decline to approximately US$1.15 per pound.
Gibraltar Expansion Project
Construction of the Phase 1 mill expansion was completed in February 2008.
The ramp up to the rated processing capacity of 46,000 tpd has been ongoing
since completion of the construction phase. Sustained periods of operation
at the rated capacity are becoming more frequent and of longer duration as
mill operations personnel continue to refine the metallurgical performance
relating to grind size at higher mill throughput rates and metal recovery.
The improved performance is evidenced by the copper recovery increasing from
73.2% in October 2008 to 82.2% in February 2009, a 12% increase.
The Phase 2 expansion program consists of modernizing and increasing the capacity
of the regrind, cleaner flotation, and ancillary circuits along with installation
of a two-stage tailings pumping system. Phase 2 is designed to increase concentrator
capacity from 46,000 to 55,000 tpd. The construction schedule for Phase 2
has been modified as a result of management's review of capital spending.
The regrind mill and cleaner flotation circuits will be completed in the summer
of 2009 as they are not cash intensive to complete and they provide very robust
payback by enhancing both copper and molybdenum recoveries. Ramp up to 55,000
tpd will occur following completion of the remainder of the Phase 2 program
and completion of the in-pit crusher and conveyor.
The Phase 3 expansion was designed to increase throughput capacity by a further
30,000 tpd to 85,000 tpd. The engineering for Phase 3 was well advanced and
the estimated capital cost had been confirmed at $300 million for mill infrastructure
and $50 million for mining equipment. With the exception of upgrading or replacing
the molybdenum circuit, the entire project has been deferred as a result of
the credit market conditions and copper market outlook. Once the economic
conditions improve, the decision to move forward on this next phase of expansion
will be reviewed.
Prosperity Project
Taseko holds a 100% interest in the Prosperity property, located 125 kilometers
southwest of the City of Williams Lake. The property hosts a large porphyry
gold-copper deposit amenable to open pit mining.
In September 2007, the Company announced the positive results of a feasibility
study for the Project2. Based on the feasibility study, the mineral
reserves, as set out below, will support annual production of 247,000 ounces
of gold and 108 million pounds of copper for 20 years.
|
Prosperity Mineral Reserves and Resources At C$5.25 NSR/t Cut-Off |
|||||||
|
|
Size M Tonnes |
Grade |
Recoverable Metal |
Contained Metal |
|||
|
Au (g/t) |
Cu (%) |
Au(M oz) |
Cu (B lb) |
Au (M oz) |
Cu (B lb) |
||
|
Proven & Probable Reserves |
487 |
0.43 |
0.22 |
4.7 |
2.0 |
6.7 |
2.4 |
|
Measured & Indicated Resources |
524 |
0.39 |
0.26 |
- |
- |
6.6 |
2.9 |
|
Total |
1,011 |
0.41 |
0.24 |
- |
- |
13.3 |
5.3 |
A summary of the parameters and results from the economic analysis of the
project, based on the conclusions from the feasibility study, are:
• A projected exchange rate of US$0.80/C$1.00.
• A long term copper price of US$1.50 per pound of copper.
• A long term gold price of US$575 per ounce of gold.
• Pre-production capital cost of C$807 million.
• Operating cost of C$6.26 per tonne milled over the life of the mine.
• Net Present Value (NPV) of C$260 million at 7.5% discount rate
• Internal Rate of Return (IRR) of 12%.
2 Taseko News
Release dated September 24 2007.
The mine plan contemplates a large-scale conventional truck and shovel open
pit mining and milling operation. The processing plant has been designed with
a nominal capacity of 70,000 tonnes per day.
A sensitivity of the project to metals price assumptions is presented in the
following table:
|
|
$US1.40/lb Cu $US550/oz Au |
$US1.50/lb Cu $US575/oz Au |
$US1.75/lb Cu $US600/oz Au |
$US2.00/lb Cu $US650/oz Au |
|
Pre-tax NPV ($C millions) |
87 |
260 |
594 |
991 |
|
Internal Rate of Return (%) |
9 |
12 |
17 |
22 |
During 2008, detailed engineering was performed in order to reduce capital and operating costs thereby counteracting the impact of the then rapidly-escalating costs being experienced in projects worldwide. Engineering included a redesign of the plant site layout, concentrator, maintenance shop, primary crusher, camp/administration complex, miscellaneous infrastructure, and pit development. The revised designs improve energy and operations efficiency to minimize operating costs. Worldwide pressure on costs and availability of infrastructure and equipment has softened substantially since the economic decline at the end of 2008 and the effects of these input parameters on the Project are being evaluated.
The Ministry of Environment of British Colu mbia accepted Taseko's Environmental
Assessment report as complete on March 13, 2009 and is moving forward under
provisions of the Environmental Assessment Act with an Environmental Assessment
Office ("EAO")-led review of this Project. The Canadian Environmental
Assessment Agency ("CEAA") and the B.C. EAO are collaborating on their
respective federal and provincial environmental assessment processes in a
coordinated manner. The EAO review is mandated by law to be completed 180
calendar days after the acceptance date noted above. Federal and provincial
government decisions on proceeding with the Project will be made following
completion of the Environmental Assessment process.
Near-Term Outlook
•Forecasted production for Gibraltar in 2009 is approximately 80 million
pounds of copper and 800,000 pounds of molybdenum.
•Total cash costs are expected to average US$1.15 per pound for 2009
as cost saving initiatives take full effect.
•Prosperity Environmental Assessment approvals expected in October 2009.
The Company will be filing its annual consolidated financial statements, including
notes thereto and auditor's report, management discussion and analysis
and annual information form on SEDAR in the normal course and in accordance
with its continuous disclosure requirements. Financial statements for this
news release are attached. For information contact: Brian Bergot, Investor
Relations - 778-373-4545, toll free 1-800-667-2114.
Russell Hallbauer
President and CEO
No regulatory authority has approved or disapproved of the information contained
in this news release.
Forward Looking
Statements
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements of
historical facts, that address future production, reserve potential, exploration
drilling, exploitation activities and events or developments that the Company
expects are forward-looking statements. Although the Company believes the
expectations expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in the forward-looking
statements. Factors that could cause actual results to differ materially from
those in forward-looking statements include capital market conditions, commodities
market prices, exploitation and exploration successes, lack of continuity
of mineralization, completion of the mill upgrade on time estimated and at
scheduled cost, continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned that any
such statements are not guarantees of future performance and that actual results
or developments may differ materially from those projected in the forward-looking
statements. For more information on the Company, Investors should review the
Company's annual Form 40-F filing with the United States Securities and
Exchange Commission or the Company's home jurisdiction filings at www.sedar.com.
Information Concerning
Estimates of Measured and Indicated Resources
This news release uses the terms "measured resources" and "indicated
resources". Taseko Mines Limited advises investors that although these
terms are recognized and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognize them. Investors are
cautioned not to assume that any part or all of the mineral deposits in these
categories will ever be converted into reserves.
