| | |
Gibraltar -- Taseko's Foundation for Growth
A key component of Taseko's growth strategy is the expansion and modernization of its wholly owned Gibraltar mine. The goal is to create an operation with a mid-tier cost profile that is able to generate positive cash flow at all points of the copper price cycle.
Mine Expansion
Gibraltar is undergoing a major, multi-phase expansion and modernization program.
Over the next 2 ½ years, Gibraltar's annual production will steadily increase to 180 million pounds of copper and 3.5 pounds of molybdenum, 250% and 500% respective increases from 2007.
The Phase I & II expansion and modernization program includes the addition of a new 34 foot semi-autogenous grinding (SAG) mill, a complete replacement of the original flotation recovery system as well as a number of downstream upgrades and modifications.
Phase I was completed, on time and on budget, in early 2008 and the new equipment is being commissioned with ramp up continuing through mid 2008. During the ramp up, production levels are expected to steadily increase with expected annualized capacity reaching 100 million pounds of copper.
Phase II modifications will allow the new SAG mill to process up to its designed capacity of 55,000 tons per day (tpd) by increasing capacity in other circuits in the concentrator. The expansion project will include the addition of a pebble crusher, tailings pumping system, regrind mill, cleaner flotation cells, pressure filters and driers. Phase II is targeted for completion by the end of 2008. Commissioning and ramp up of Phase II is expected to take place in the first half of 2009 until annualized production rates of 120 million pounds of copper are achieved.
Phase III, announced in May 2008, will increase the capacity of the concentrator to 85,000 tpd. This additional 30,000 tons of capacity will be achieved by expanding the capacity of all the concentrator components. This phase is expected to commence in 2008, with key equipment deliveries in 2010 and completion of construction in the second half of 2010.
Additionally, a new molybdenum circuit is included in the Phase III expansion, which will significantly improve molybdenum recoveries and resulting in a dramatic increase in molybdenum production. The new molybdenum circuit is expected to be operational in the Spring of 2009.
As of April 2008, capital spending for Phase I was complete at $76 million. Remaining spending for Phase II and III, including key mining equipment, is approximately $410 million.
There are very few mining companies that have the ability to add incremental capacity at such a low capital cost and within such a short timeframe.
Extending Mine Life
In September 2007, the Company announced the results of a drilling program at Gibraltar that increased proven and probable reserves by 128 million tons to 384 million tons with recoverable copper of 2.1 billion pounds.
The increase in reserves will allow the expanded milling operations (at 55,000 tons per day) to be maintained for 17 years.
The current Reserves and Resources are detailed below:
Gibraltar Reserves and Resources at September 30, 2007
|
Cut-off |
Tons
(millions) |
Cu
(%) |
Mo
(%) |
Copper
(B lbs) |
| Proven & Probable¹ |
Sulphide 0.20% Cu |
384 |
0.310 |
0.009 |
2.1 |
| Proven & Probable |
Oxide 0.10% ASCu |
17 |
0.148 |
|
|
| Measured & Indicated |
Sulphide 0.20% Cu |
530 |
0.309 |
0.007 |
3.3 |
|
¹Reported by Gibraltar mine staff under supervision of I. Thompson, P.Eng., September 2007
|
In May 2008, Taseko purchased a royalty interest in claims that are part of the Gibraltar mine property, called the Oakmont ground. A drill program on the Oakmont ground by a previous operator in the 1980's indicated the presence of significant mineralization on these claims which adjoin the Gibraltar East pit, the original starter pit of the Gibraltar operation. Geological interpretation from surface and drilling information suggests this mineralization is likely an extension of the Gibraltar East and West deposits.
A 2008 drill program, currently underway, is expected to provide a significant increase in Gibraltar mineral resources with grades comparable to those mined from the Gibraltar East pit.
Operations
The following table is a summary of the operating statistics for fiscal 2007 compared to fiscal 2006.
|
Fiscal 2007 |
Fiscal 2006 |
| Total tons mined (millions)¹ |
35.4 |
38.4 |
| Tons of ore milled (millions) |
9.5 |
10.9 |
| Stripping ratio |
2.6 |
2.4 |
| Copper grade (%) |
0.328 |
0.285 |
| Molybdenum grade (%MoS2) |
0.011 |
0.010 |
| Copper recovery (%) |
77.5 |
79.1 |
| Molybdenum recovery (%) |
29.6 |
41.2 |
| Copper production (millions lb) |
51.8 |
49.1 |
| Molybdenum production (thousands lb) |
580 |
821 |
| Copper production costs, net of by product credits², per lb of copper |
US$1.03 |
US$1.25 |
| Off property costs for transport, treatment (smelting & refining) & sales per lb of copper |
US$0.35 |
US$0.25 |
| Total cash costs of production per lb of copper |
US$1.38 |
US$1.50 |
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 The by-product credit is based on pounds of molybdenum and ounces of silver sold. Unit costs were lower in fiscal 2005 because molybdenum prices and pounds of copper produced were higher.
Re-Starting Low Cost SX-EW Plant
In early 2007, the refurbishment of the Solvent Extraction and Electrowinning (SX-EW) plant at Gibraltar was completed. In 2007, the plant produced 2.4 million pounds of copper cathode.
The SX-EW plant, which had been idle since 1998, is capable of producing seven million pounds of LME Grade cathode copper per year. This process uses oxidized copper ore which has been stockpiled since Gibraltar re-started operations in October 2004.
Site Statistics
The Gibraltar mine site covers approximately 109 square kilometers and consists primarily of 251 mineral claims and 30 mining leases. The property hosts resources and reserves in seven separate mineralized zones which has supported mining for most of the past 30 years.
Gibraltar is located in an area with well-developed infrastructure. The property is accessible by a combination of highways and paved roads, and it is close to a rail network that provides service for shipment of copper concentrates through the Pacific Ocean port of North Vancouver. The mine is a 45-minute drive from local communities that provide goods, services and personnel.
Forward Looking Statements
The above information includes certain statements that may be deemed "forward-looking statements". Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the risks inherent in the Company's business, Investors should review the Company's annual Form 20-F filing with the United States Securities Commission and its home jurisdiction filings that are available at www.sedar.com.
| | |
