Taseko Mines : 2024 Q4 Financial Statements and MD&A

Published: 2025-02-19 20:29:04 ET TKO.TO

Taseko Reports 2024 Fourth Quarter and Annual Earnings

This release should be read with the Company's Financial Statements and Management Discussion & Analysis ("MD&A"), available at www.tasekomines.comand filed on www.sedarplus.com. Except where otherwise noted, all currency amounts are stated in Canadian dollars. In March 2024 Taseko acquired the remaining 12.5% interest and now owns 100% of the Gibraltar Mine, 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.

February 19, 2025, Vancouver, BC - Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) ("Taseko" or the "Company") reports full year 2024 Adjusted EBITDA* of $224 million and Earnings from mining operations before depletion and amortization and non-recurring items* of $244 million. Revenues for 2024 were $608 million from the sale of 108 million pounds of copper and 1.4 million pounds of molybdenum. For the year, a Net loss of $13 million ($0.05 loss per share) was recorded and Adjusted net income* was $57 million ($0.19 per share).

For the fourth quarter, Adjusted EBITDA* was $56 million, Earnings from mining operations before depletion and amortization and non-recurring items* was $59 million and Cash flows from operations was $73 million. A Net loss of $21 million ($0.07 loss per share) was recorded and Adjusted net income* was $10 million ($0.03 per share).

Gibraltar produced 29 million pounds of copper and 578 thousand pounds of molybdenum in the fourth quarter at Total operating costs (C1) of $2.42 per pound of copper produced. Mill throughput averaged 89,600 tons per day, which is the highest ever achieved for a quarter at Gibraltar.

For the year, copper production was 106 million pounds, in line with the revised production guidance, and molybdenum production was 1.4 million pounds. Higher than normal scheduled downtime in both concentrators and an 18-day labour strike impacted annual production by approximately 15 million pounds in 2024. Copper grades in 2024 averaged 0.23% and Total operating costs (C1) were US$2.66 per pound produced.

Copper production in 2025 is expected to increase to 120 to 130 million pounds as mill operating time returns to normal levels and the restart of the SX/EW plant adds additional capacity. However, production will be weighted to the back half of the year and the first quarter will be the lowest production quarter as lower grade ore stockpiles will be used to supplement mined ore from a new pushback in the Connector pit.

At Florence Copper, construction is advancing on schedule, including all critical path items, and the overall project completion was over 60% as of the end of January. A total of 58 out of the 90 production wells to be drilled during the construction phase have now been completed. In the SX/EW area, construction activities are focussed on mechanical, piping and electrical installations. The erection of the electrowinning building has commenced, and construction of the tank farm is well advanced. Work in the pipe corridor continues with lining and pipe installation nearly complete.

Stuart McDonald, President and CEO of Taseko, commented, "We had a strong finish to the year at Gibraltar and, with both concentrators operating well, the mine achieved a new record for quarterly mill throughput. With stable milling operations expected in 2025 we expect a significant improvement in annual production of copper and molybdenum, although we will see lower head grades in the first part of the year during a new pushback in the Connector pit. The refurbishment of the SX/EW plant is progressing on schedule and first cathode production at Gibraltar is anticipated in the second quarter."

Mr. McDonald continued, "We remain pleased with the construction progress at Florence. Four drill rigs are advancing wellfield drilling which is scheduled for completion in the second quarter. Our construction workforce is currently at approximately 360 workers, and will reach peak manpower levels this quarter. First copper production continues to be targeted before the end of the year."

"The Company remains in a solid financial position with a year end cash balance of $173 million and available liquidity of approximately $331 million, including our undrawn credit facility. Recent trends in global markets are benefitting Gibraltar as copper prices have risen 8% since the start of the year, and the Canadian dollar has weakened relative to the US dollar. Gibraltar's cost structure will also benefit this year from copper offtake contracts at average TC/RCs of zero, higher by-product credits from increased molybdenum production, and lower oil prices. Our copper price protection at a minimum price of US$4.00 per pound for all of 2025, provides additional downside protection. We're very excited about the year ahead as we're now less than 12 months from first copper production at Florence Copper, which is going to dramatically improve our business outlook," added Mr. McDonald.

"In the longer term, the Yellowhead project represents another major growth opportunity for our North American copper business. We're advancing project permitting this year and also publishing a new technical report, with updated costing and metal prices, and incorporating the new Canadian tax credits available for copper mine development," concluded Mr. McDonald.

2024 Annual Review

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

Fourth Quarter Review

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

Highlights

Three months ended

Year ended

Operating Data (Gibraltar - 100% basis)

December 31,

2024

2023

Change

2024

2023

Change

Tons mined (millions)

24.0

24.1

(0.1)

88.3

88.1

0.2

Tons milled (millions)

8.3

7.6

0.7

29.3

30.0

(0.7)

Production (million pounds Cu)

28.6

34.2

(5.6)

105.6

122.6

(17.0)

Sales (million pounds Cu)

27.4

35.9

(8.5)

108.0

120.7

(12.7)

Three months ended

Year ended

Financial Data

December 31,

(Cdn$ thousands, except per share amounts)

2024

2023

Change

2024

2023

Change

Revenues

167,799

153,694

14,105

608,093

524,972

83,121

Cash flows from operations

73,292

62,835

10,457

232,615

151,092

81,523

Net (loss) income

(21,207)

38,076

(59,283)

(13,444)

82,726

(96,170)

Per share - basic ("EPS")

(0.07)

0.13

(0.20)

(0.05)

0.29

(0.34)

Earnings from mining operations before

depletion, amortization and non-recurring items*

59,405

73,106

(13,701)

243,646

207,354

36,292

Adjusted EBITDA*

55,602

69,107

(13,505)

223,991

190,079

33,912

Adjusted net income*

10,468

24,061

(13,593)

56,927

44,431

12,496

Per share - basic ("Adjusted EPS")*

0.03

0.08

(0.05)

0.19

0.15

0.04

Effective as of March 25, 2024, the Company increased its ownership in Gibraltar from 87.5% to 100%. As a result, the financial results reported in this MD&A include 100% of Gibraltar's income and expenses for the period March 25, 2024, to December 31, 2024 (87.5% for the period March 16, 2023 to March 24, 2024, and 75% prior to March 15, 2023).

The Company finalized the accounting for the acquisition of the remaining 50% interest in Cariboo from Dowa Metals

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

Review of Operations

Gibraltar mine

Operating data (100% basis)

2024

2023

2024

2023

Tons mined (millions)

23.9

23.2

18.4

22.8

24.1

88.3

88.1

Tons milled (millions)

8.3

7.6

5.7

7.7

7.6

29.3

30.0

Strip ratio

1.9

1.2

1.6

1.7

1.5

1.6

1.3

Site operating cost per ton milled (Cdn$)*

$12.18

$14.23

$13.93

$11.73

$9.72

$12.93

$12.16

Copper concentrate

Head grade (%)

0.22

0.23

0.24

0.27

0.23

0.25

Copper recovery (%)

78.2

78.9

77.7

79.0

82.2

78.5

82.6

Production (million pounds Cu)

28.6

27.1

20.2

29.7

34.2

105.6

122.6

Sales (million pounds Cu)

27.4

26.3

22.6

31.7

35.9

108.0

120.7

Inventory (million pounds Cu)

4.1

2.9

2.3

4.9

6.9

4.1

6.9

Molybdenum concentrate

Production (thousand pounds Mo)

578

421

185

247

369

1,432

1,202

Sales (thousand pounds Mo)

607

348

221

258

364

1,434

1,190

Per unit data (US$ per pound produced)*

Site operating costs*

$2.52

$2.91

$2.88

$2.21

$1.59

$2.61

$2.19

By-product credits*

(0.42)

(0.25)

(0.26)

(0.17)

(0.13)

(0.28)

(0.20)

Site operating costs, net of by-product

credits*

$2.10

$2.66

$2.62

$2.04

$1.46

$2.33

$1.99

Off-property costs

0.32

0.26

0.37

0.42

0.45

0.33

0.38

Total operating costs (C1)*

$2.42

$2.92

$2.99

$2.46

$1.91

$2.66

$2.37

Operations Analysis

Full Year Results

Gibraltar produced 105.6 million pounds of copper for the year compared to 122.6 million pounds of copper in 2023 with lower mill running time being the primary factor for the decreased production.

Both concentrators were down for 18 days in June when the unionized workforce went on strike. The strike overlapped with planned downtime in Concentrator #1 for its primary crusher move as well as major maintenance on its SAG, which extended the downtime to approximately seven weeks. Concentrator #2 was also down in January 2024 for a planned major component replacement on its ball mill. The reduced operating hours in 2024 resulted in approximately 15 million fewer copper pounds being produced compared to normal milling rates at similar grades and recoveries.

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

Operations Analysis - Continued

A total of 88.3 million tons were mined in the year consistent with the 88.1 million tons mined in 2023. The strip ratio increased to 1.6 from 1.3 as mining operations transitioned into the Connector pit in 2024. The Gibraltar pit, which was the main source of ore in 2023, had a lower strip ratio. Ore stockpiles also increased by 5.0 million tons in 2024, comprised primarily of oxide ore from the upper benches of the Connector pit. The oxide ore stockpiled will allow the restart of the Gibraltar SX/EW plant in the second quarter of 2025.

Total site costs* at Gibraltar of $413.9 million (100% basis) were $16.9 million lower than 2023 due to lower input costs such as diesel and the impact of the 18-day labour strike in June 2024 which reduced site operating costs in the second quarter of 2024.

Transportation costs for the year ended December 31, 2024 increased by $5.4 million over the same prior period, due to higher costs for rail, ocean freight and port handling costs, and trucking related costs.

Molybdenum production was 1.4 million pounds in the year compared to 1.2 million pounds in the prior year. Molybdenum prices weakened in 2024 with an average molybdenum price of US$21.30 per pound, a decrease of 12% compared to the 2023 average price of US$24.19 per pound.

Off-property costs per pound produced* were US$0.33 for the year, which is US$0.05 lower than the prior year primarily due to a decrease in realized treatment and refining charges (TC/RC) rates due to the tightening smelter market.

Total operating costs per pound produced (C1)* was US$2.66 for the year, compared to US$2.37 in the prior year and the increase was substantially attributed to lower production and less capitalized stripping costs as shown in the bridge graph below:

Fourth Quarter Results

Gibraltar produced 28.6 million pounds of copper in the quarter. Copper head grades were 0.22% and copper recoveries in the fourth quarter were 78%, in line with recent quarters. Mill throughput was 8.3 million tons, consistently above nameplate capacity throughout the quarter and benefitting from the softer characteristics of the ore feed.

A total of 24.0 million tons were mined in the fourth quarter at an average strip ratio of 1.9 and the majority of ore and waste mining occurred in the Connector pit.

Total site costs* at Gibraltar of $102.5 million (100% basis) were lower than the third quarter of 2024, with the prior quarter including repairs and maintenance costs associated with a large maintenance project on one of the shovels.

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

Operations Analysis - Continued

Molybdenum production was 578 thousand pounds in the fourth quarter. The 57% increase in quarter-over-quarter production is primarily due to higher molybdenum grade in the Connector pit ore. At an average molybdenum price of US$21.71 per pound, molybdenum generated a meaningful by-product credit per pound of copper produced of US$0.42 in the fourth quarter.

Off-property costs per pound produced* were US$0.32 for the fourth quarter, in line with average costs for the year.

Gibraltar Outlook

With the major project and related mill maintenance work completed in 2024, increased mill availability and higher throughput is expected to be the primary driver of improved copper production in 2025. Refurbishment of Gibraltar's SX/EW plant, which has been idle since 2015, is underway and the plant is expected to start producing copper cathode in the second quarter. Total copper production for the year is expected to be in the range of 120 to 130 million pounds.

Mining activities have transitioned to the Connector pit, which will be the main source of mill feed going forward. A new pushback in the Connector pit has been initiated in early 2025 resulting in a higher strip ratio in the first quarter. Lower grade ore stockpiles will be utilized to supplement mined ore during this period, and as a result 2025 copper production will be weighted to the second half of the year.

Molybdenum production is forecast to increase in 2025 as molybdenum head grades are expected to be notably higher in the Connector pit ore compared to the Gibraltar pit ore.

The Company has previously entered into offtake contracts for Gibraltar concentrate production in 2025 and 2026, which will result in significantly lower treatment and refining costs ("TC/RCs"). In 2024, TC/RCs accounted for approximately US$0.09 per pound of off-property costs, and with the new offtake contracts, the Company expects average TC/RCs to reduce to zero in 2025 and 2026.

The Company benefits from a strengthening of the US dollar relative to the Canadian dollar as our sales contracts are priced in US dollars whereas our Gibraltar mine costs are primarily incurred in Canadian dollars.

The Company also has a prudent hedging program in place to protect a minimum copper price during the Florence construction period. Currently, the Company has copper collar contracts that secure a minimum copper price of US$4.00 per pound for 108 million pounds of copper for 2025. The copper collar contracts also have ceiling prices between US$5.00 and US$5.40 per pound (refer to the section "Hedging Strategy" for details).

Florence Copper

The Company has all the key permits in place for the commercial production facility at Florence Copper and construction of the Florence Copper commercial production facility continues to advance on schedule. Nearly 450,000 project hours have been worked with no reportable injuries or environmental incidents. The Company has a fixed-price contract with the general contractor for construction of the SX/EW plant and associated surface infrastructure.

A total of 51 production wells out of a total of 90 new wells had been completed as of December 31, 2024. Process ponds and surface water runoff pond construction are complete, and development of the main pipe corridor is substantially complete with the installation of high density polyethylene piping in the corridor ongoing. Mechanical and piping installations are underway throughout the SX/EW plant, erection of structural steel for solvent extraction pipe rack is nearing completion, and the electrical work has commenced.

Florence Copper - Continued

Florence Copper Quarterly Capital Spend

Three months ended

Year ended

(US$ in thousands)

December 31, 2024

Site and PTF operations

6,007

19,512

Commercial facility construction costs

57,647

154,970

Other capital costs

28,943

Total Florence project expenditures

63,654

203,425

Construction costs in the fourth quarter were US$57.6 million, and US$155.0 million has been incurred for the year ended December 31, 2024. Other capital costs of US$28.9 million include final payments for delivery of long-lead equipment that was ordered in 2022, and the construction of an evaporation pond to provide additional water management flexibility. Construction of this evaporation pond was completed in the third quarter of 2024.

The Company has closed several Florence project level financings to fund initial commercial facility construction costs. In October the Company received the fourth deposit of US$10 million from the US$50 million copper stream transaction with Mitsui & Co. (U.S.A.) Inc. ("Mitsui"). The final deposit of US$10 million was received in January 2025.

Remaining project construction costs are expected to be funded with the Company's available liquidity and cashflow from its 100% ownership interest in Gibraltar. The Company also has in place an undrawn corporate revolving credit facility for US$110 million.

The Company has a technical report entitled "NI 43-101 Technical Report Florence Copper Project, Pinal County, Arizona" dated March 30, 2023 (the "2023 Technical Report") on SEDAR+. The 2023 Technical Report was prepared in accordance with NI 43-101 and incorporated the results of testwork from the Production Test Facility ("PTF") as well as updated capital and operating costs (Q3 2022 basis) for the commercial production facility.

Project highlights based on the 2023 Technical Report:

Based on the 2023 Technical report, the estimated remaining construction costs for the commercial facility were US$232 million (basis Q3 2022), and management expects that total costs will be within 10% to 15% of that estimate. Florence Copper remains on track for first copper production in late 2025.

Long-term Growth Strategy

Taseko's strategy has been to grow the Company by acquiring and developing a pipeline of projects focused on copper in North America. We continue to believe this will generate long-term returns for shareholders. Our other development projects are located in British Columbia, Canada.

Yellowhead Copper Project

The Yellowhead Project ("Yellowhead") is expected to produce 4.4 billion pounds of copper over a 25-year mine life at an average C1* cost, net of by-product credit, of US$1.67 per pound. During the first 5 years of operation, Yellowhead will produce an average of 200 million pounds of copper per year at an average C1* cost, net of byproduct credit, of US$1.43 per pound. The Yellowhead project also contains valuable precious metal by-products with 440,000 ounces of gold and 19 million ounces of silver production over the life of mine.

The economic analysis in the 2020 Technical Report was prepared using long-term copper price of US$3.10 per pound, a gold price of US$1,350 per ounce, and silver price of US$18 per ounce. This report entitled "Technical Report on the Mineral Reserve Update at the Yellowhead Copper Project, British Columbia, Canada" was published on January 16, 2020, under the supervision of Richard Weymark, P. Eng., MBA, Vice President, Engineering for Taseko and a Qualified Person as defined by NI 43-101. Taseko plans to publish a new technical report in 2025 using updated long-term metal price assumptions, updated project costing, and incorporating the new Canadian tax credits available for copper mine development.

The Company is ready to enter the environmental assessment process and plans to submit an Initial Project Description to formally commence this process with the regulators in the second quarter this year. The Company is also focusing discussions with the regulators on developing a workplan to streamline the overall permitting process. Taseko opened a project office in 2024 to support ongoing engagement with local communities including First Nations.

New Prosperity Gold-Copper Project

In late 2019, the Tŝilhqot'in Nation, as represented by Tŝilhqot'in National Government, and Taseko Mines Limited entered into a confidential dialogue, with the involvement of the Province of British Columbia, seeking a long-term resolution of the conflict regarding Taseko's proposed copper-gold mine previously known as New Prosperity, acknowledging Taseko's commercial interests and the Tŝilhqot'in Nation's opposition to the project.

This dialogue has been supported by the parties' agreement, beginning December 2019, to a series of standstill agreements on certain outstanding litigation and regulatory matters relating to Taseko's tenures and the area in the vicinity of Teztan Biny (Fish Lake).

The dialogue process has made meaningful progress in recent months and is close to completion. The Tŝilhqot'in Nation and Taseko acknowledge the constructive nature of discussions, and the opportunity to conclude a long-term and mutually acceptable resolution of the conflict that also makes an important contribution to the goals of reconciliation in Canada.

Aley Niobium Project

The converter pilot test is ongoing to provide additional process data to support the design of commercial process facilities and final product samples to support product marketing initiatives. The Company has also initiated a scoping study to investigate the potential production of niobium oxide at Aley to supply the growing market for niobium- based batteries.

Conference Call and Webcast

The Company will host a telephone conference call and live webcast on Thursday, February 20, 2025, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these results. After opening remarks by management, there will be a question-and-answer session open to analysts and investors.

Participants can join by conference call dial-in or webcast:

Conference Call Dial-In

Webcast

For further information on Taseko, please see the Company's website at www.tasekomines.comor contact:

Brian Bergot, Vice President, Investor Relations - 778-373-4554, toll free 1-800-667-2114

Stuart McDonald

President & CEO

No regulatory authority has approved or disapproved of the information in this news release.

Disclaimer

Taseko Mines Limited published this content on February 20, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 20, 2025 at 01:28:05.093.