Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) (“Taseko” or the “Company”) wishes to provide an update on the current status of its Gibraltar Mine and other corporate initiatives, in light of the global impact from COVID-19. To-date, there have been no known cases of COVID-19 at any of Taseko’s operations or offices in Canada and the US.
The Gibraltar Mine has operated at planned rates in the first quarter and copper production is expected to be approximately 32 million pounds (100% basis). At this time there have been no interruptions to our logistics and supply chains, and sales are expected to be in line with production for the quarter.
Russell Hallbauer, CEO and Director of Taseko, stated, “The health and safety of our employees is the most important aspect of our business. We believe it’s important to protect the safety of our employees as well as their continued employment, both important factors at this time. To this end, the mine implemented many procedures in advance of the health authorities’ directives to mitigate the risk of COVID-19 impacting our employees and our mining operations. Our entire workforce has been fully engaged in this process. In the event illness does occur among some of our employees, these procedures are designed to curb wide-spread infection among other employees. As during the devastating forest fires of 2017, the resolve of our entire workforce is impressive in this time of crisis, which is why we have been extremely diligent and taking extra precautions at all our work sites. While we have not had any known occurrences of COVID-19 anywhere in the organization, we will remain focused on protecting our employees until the risk subsides.”
“During unprecedented events like we are currently facing, we rely on our operational experience more than ever. With copper put options securing a minimum price of US$2.60 per pound until the end of April, we have the benefit of some additional time to adjust to a lower copper price environment. Operating costs are dropping with over 30 percent lower diesel price as an example. In fact, we took advantage of the much lower diesel price and locked in a price that will reduce costs by more than $6 million in 2020. We expect decreases in other areas such as explosives, grinding media and other inputs. The BC Hydro power cost deferral program initiated in 2016, which allows Taseko to defer up to 75% of Gibraltar’s power costs, is still in place and expected to come into effect this month. The weakened Canadian dollar against the US dollar has partially offset the US dollar copper price decline, and this too is benefitting our operating margin as roughly 80% of Gibraltar’s costs are Canadian dollar denominated,” added Mr. Hallbauer.
“Beyond the input costs which naturally fall when oil and copper drop, we have studied a number of mine plan options and chosen one which will allow the mine to operate with reduced site operating costs and maintain budgeted copper production for the year. We believe this will provide Taseko with sufficient operating margin going forward,” continued Mr. Hallbauer.
Stuart McDonald, President of Taseko, added, “From a liquidity perspective, we started the year with a healthy cash balance. We have eliminated capital spending and are deferring major equipment rebuilds. All non-essential project spending has been cut. At Florence we continue to operate the test facility but have reduced overall site spending. At this time, we feel we are positioned with adequate financial flexibility while we manage through this unprecedented crisis.”
Note: Gibraltar is a Joint Venture owned by Taseko (75%) and Cariboo Copper Corp. (25%). All production and sales figures in this release are reported on a 100% basis, unless otherwise noted.
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