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A key component of Taseko's growth strategy is the upgrading and modernization of its 75% 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 Upgrade
Gibraltar has undergone a major, multi-phase upgrading and modernization program. Over $300 million has been invested in both mining equipment and concentrator upgrades. Gibraltar's daily mill capacity is 55,000 tons per day, resulting in annual production capacity of 115 million pounds of copper and 1.4 million pounds of molybdenum.
Phase I:
Phase I of the expansion included 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. It was completed on time and on budget, in 2008 at a cost of $76 million.
Phase II:
Phase II modifications were designed to allow the new SAG mill to process up to its designed capacity of 55,000 tons per day by increasing capacity in other circuits of the concentrator. Phase II included the addition of an upgraded tailings pumping system, increased regrind capacity, cleaner flotation cells, pressure filters and driers, as well as new equipment including a Bucyrus 495HR 60 yard shovel and four new 320 ton haul trucks.
GDP3:
In the Spring of 2011, construction commenced for Gibraltar Development Plan 3 (GDP3). GDP3 will include the construction of a 55,000 ton per day concentrator, which will initially have an installed capacity of 30,000 ton per day, to complement the existing 55,000 ton per day facility currently operating. The additional capacity will increase Gibraltar's annual copper production by approximately 60 million pounds to 180 million pounds, at life of mine average grade.
An integral part of this project is a new molybdenum recovery facility, increasing molybdenum metal production by over one million pounds per year.
Capital costs for GDP3 are expected to be $235 million for the concentrator and molybdenum plant and approximately $90 million for mining equipment. Construction will commence in early spring and commissioning of the new concentrator is anticipated in Q4 2012.
Go-ahead for the project also requires co-operation of Taseko's 25% Gibraltar Joint Venture partner Cariboo Copper Corp. and the parties are now in discussions to this end.
Extending Mine Life
When Gibraltar was restarted in 2004, the proven and probable reserves were 149 million tons and the mine life was 12 years. Today, the mine life is 27 years following the most recent reserve update in March 2011.
| Category (at 0.20% Cu Cut-off) |
Size (Million Tons) |
Grade | Recoverable Metal | Contained Metal | |
|---|---|---|---|---|---|
| Cu (%) | Mo (%) | Cu (Billions lbs) | Cu (Billions lbs) | ||
| Proven & Probable Reserves | 802 | 0.30 | 0.008 | 4.3 | 4.8 |
| Measured & Indicated Resources | 950 | 0.30 | 0.008 | - | 5.7 |
Operations
The following table is a summary of the operating statistics for Gibraltar Mine:
OPERATING STATISTICS (100% BASIS) |
Three months ended |
Six months ended |
||
|
2011 |
2010 |
2011 |
2010 |
Tons mined (millions) |
14.5 |
11.1 |
28.5 |
22.6 |
Tons milled (millions) |
3.7 |
3.6 |
6.8 |
7.2 |
Stripping ratio |
2.9 |
2.2 |
2.7 |
2.2 |
Copper |
|
|
|
|
Grade (%) |
0.299 |
0.306 |
0.317 |
0.331 |
Recovery (%) |
87.9 |
88.7 |
88.8 |
89.2 |
Production (million lbs) |
19.3 |
19.6 |
38.4 |
42.7 |
Sales (million lbs) |
14.3 |
21.1 |
30.9 |
41.5 |
Molybdenum |
|
|
|
|
Grade (%) |
0.011 |
0.011 |
0.012 |
0.012 |
Recovery (%) |
37.6 |
25.5 |
37.2 |
23.5 |
Production (thousand lbs) |
303.0 |
218.0 |
619.5 |
412.0 |
Sales (thousand lbs) |
311.8 |
193.0 |
620.3 |
403.0 |
Copper cathode |
|
|
|
|
Production (million lbs) |
0.7 |
0.5 |
0.8 |
0.5 |
Sales (million lbs) |
0.0 |
0.0 |
0.4 |
0.1 |
Per unit data 1,4 |
|
|
|
|
Operating cash costs 2 (US$ per pound) |
$2.29 |
$1.82 |
$2.18 |
$1.59 |
By-product credits 3 (US$ per pound) |
($0.29) |
($0.17) |
($0.32) |
($0.19) |
Offsite costs for treatment & refining and transport 3 (US$ per pound) |
$0.32 |
$0.44 |
$0.34 |
$0.38 |
Total cash costs of production (US$ per pound) |
$2.32 |
$2.10 |
$2.21 |
$1.78 |
Total cash costs of production (Cdn$ per pound) |
$2.24 |
$2.16 |
$2.16 |
$1.84 |
2 Operating cash costs are comprised of direct mining costs which include personnel costs, mine site general & administrative costs, non-capitalized stripping costs, maintenance & repair costs, operating supplies and external services. Non-cash costs, such as share-based compensation and depreciation, have been excluded.
3 By-product credits are calculated based on actual sales of molybdenum and silver for the period, divided by the total lbs of copper produced during the period. Offsite costs for treatment & refining and transport are the expenses associated with actual sales during the period, divided by the total lbs of copper produced during the period.
4 Per unit data may not sum due to rounding.
Site Statistics
The Gibraltar mine site covers approximately 109 square kilometres 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 and Exchange Commission and its home jurisdiction filings that are available at www.sedar.com.
