Taseko Mines Limited · TSX:TKO
Taseko Mines — Investor Presentation (November 2017)
31 slides from Taseko Mines's investor presentation, November 2017
Slide 1: Quality, Diverse Group of Mining Assets
Quality, Diverse Group of Mining Assets November 2017 1
Slide 2: Forward Looking Statements
Forward Looking Statements Some of the statements contained in the following material are "forward‐looking statements". All statements in this release, other than statements of historical facts, that address estimated mineral resource and reserve quantities, grades and contained metal, and possible
Slide 3: NI 43-101 Compliance
NI 43‐101 Compliance Unless stated otherwise, Taseko Mines Limited (the “Company”) has prepared the technical information in this presentation including Mineral Reserve Mineral Resource estimates (“Technical Information”) based on information contained in the technical reports and news releases (col
Slide 4: Diversified Asset Base
Diversified Asset Base Principal Operating Asset Gibraltar: Second largest open‐pit copper mine in Canada Stake: 75% (unincorporated JV) Commodities: copper (primary), molybdenum (by‐product) and silver (by‐ product) 688 million tons P&P reserves at a grade of 0.28% Cu Eq as of December 31, 20
Slide 5: Gibraltar Copper Mine
Gibraltar Copper Mine Canada’s Second Largest Open‐Pit Copper Mine Location: 65 km north of Williams Lake, British Columbia Ownership: 75% 3.3 billion pounds recoverable copper Mineral Reserves: 62 million pounds recoverable molybdenum Reserves Update (Dec 2016: 688mm tons at 0.28% copper equivalent
Slide 6: Gibraltar Copper Mine
Gibraltar Copper Mine GDP3 Expansion – New 30k tpd Concentrator (commissioned in 2013) 34’ SAG Mill 20’ Ball Mill 160m3 Float Circuit Gibraltar Production (100%, Mlbs Cu) • Operating at steady-state 180 after six years of expansion 150 activities 120 • Modernized mine stabilized 90 at reduced operat
Slide 7: Operating Costs
Operating Costs Focussed on Lower Cost per Ton Milled • Cost per ton milled sustained at low levels for past two years due to cost saving initiatives, including revised mine plan with lower strip ratio • Comparable open pit mines in South America at $15-20 per ton milled Cost Per Ton Milled (C$) $15
Slide 8: Cost Benefits
Cost Benefits BC Advantage • Low cost power - $0.06/kWh vs. $0.15-$0.20 elsewhere • Established infrastructure in a favorable jurisdiction – highway access, rail, port, grid power (existing infrastructure funded by government) • Skilled and efficient labor force – similar sized South American mine e
Slide 9: Recent Results
Recent Results Performance Over Last Four Quarters • Strong production performance and copper price recovery has resulted in excellent recent quarterly results • Expect performance to continue throughout 2017 Copper Production – MM lbs Total Operating Costs (C1) – US$/lb Cost/ton Milled – C$ 50 $2.0
Slide 10: Operating Margin Sensitivity
Operating Margin Sensitivity Highly levered to copper price recovery and further cost reductions C1 Costs (US$/lb) Operating Margin (C$, millions) $1.80 $1.70 $1.60 $1.50 $1.40 $1.30 $2.50 $92 $105 $118 $131 $144 $158 Cu Price (US$/lb) $2.75 $125 $138 $151 $164 $177 $190 $3.00* $158 $171 $184 $197 $
Slide 11: Impact of Copper Price
Impact of Copper Price Equity levered to copper price Dec ‐ 2010 Dec ‐ 2014 Current ↓19% US$ Copper Price $3.95 $3.10 $3.20 ↑2.5% C$ Copper Price $3.95 $3.45 $4.05 LTM Production (Mlbs) 82 140 155 ↑89% Share Price $4.67 $1.34 $2.75 ↓41% Market Cap $870 $265 $630 ↓28% 11
Slide 12: Debt Refinancing
Debt Refinancing In June, Taseko Closed a 5‐Year High Yield Financing Offering Details: Issuer Taseko Mines Limited Issue US$250 million Senior Secured Notes Coupon 8.75% Term 5 years, due June 2022 Ratings B3 (stable) / B- (stable) – corporate and issue Security Secured by first priority lien on Ta
Slide 13: Florence Copper
Florence Copper A Near Term, Low Cost Copper Producer Location: Central Arizona near the community of Florence Ownership: 100% (acquired in 2014 for US$70 million) 345 million tons grading 0.36% TCu (at a 0.05% total Mineral copper cutoff) containing 1.7 billion pounds of recoverable Reserves: coppe
Slide 14: Florence Copper 2017 Technical Study
Florence Copper 2017 Technical Study • In January 2017, Taseko announced the results of a two-year metallurgical test program as well as an optimization of the project well field development sequence • The updated data was used to re-cost the project which resulted in a significant improvement in pr
Slide 15: In-Situ Copper Recovery (ISCR)
In‐Situ Copper Recovery (ISCR) How does in‐situ copper recovery work? Injection and recovery wells are drilled deep into the bedrock where the oxide copper ore is Wells are concrete encased and sealed to protect water quality Highly diluted acid (99.5% water, 0.5% acid) is pumped under low pressure
Slide 16: Florence Copper Project
Florence Copper Project PTF development Details • In September 2017, Taseko’s Board of Directors approved construction of the Phase 1 Production Test Facility (PTF) • Operation of the PTF is intended to prove the ability to control the movement of fluid within the oxidized zone and also will provide
Slide 17: Copper Fundamentals: Constrained Supply
Copper Fundamentals Constrained Supply Constrained Supply Deterioration of the quality of deposits Lower grades, increased rock hardness, impurities and depth Constrained supply leading to: Productivity Labour and capital constraints • Market deficit possibly earlier than expected Availability of wa
Slide 18: Copper Fundamentals: Constrained Supply
Copper Fundamentals Constrained Supply 18
Slide 19: Copper Fundamentals: R,D&D – Improving Technology
Copper Fundamentals R,D&D – Improving Technology Research, development and deployment (RD&D) and mass production prospects are leading to rapid battery cost declines and increases in energy density. Signs of continuous improvements from technologies currently being researched confirm that this trend
Slide 20: Copper Fundamentals
Copper Fundamentals EV push could lead to copper shortage, mining group says Clara Ferreira-Marques and Gavin Maguire – Reuters / September 26, 2017 @ 7:00 am SINGAPORE -- The push toward electric cars could lead to shortages in raw materials such as copper, mining group BHP said. The EV boom would
Slide 21: Copper Fundamentals
Copper Fundamentals Mercedes‐Benz plans to invest $1 billion in Alabama to produce EV Mercedes-Benz makes a $1B bet it can take down Tesla / Nathan Bomey, USA TODAY Published Sept. 21, 2017 Showing its seriousness about an electric future, Mercedes-Benz plans to invest $1 billion in Alabama to produ
Slide 22: Copper Fundamentals: Demand for Copper
Copper Fundamentals Demand for Copper (refined basis) 26 24 Metric Tonnes (millions) 22 20 18 16 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Base Case Mines Demand for mine production capability (refined metal) • After 5 years of substantial capacity additions (2011-2015), a lack of inves
Slide 23: Aley Project – Niobium
Aley Project – Niobium Accretive Development Opportunity Location: Northern British Columbia Ownership: 100% Mine Type: Open Pit Mine Life: +24 years 2014 Technical Report – Project Highlights • Proven and probable reserves of 84 million tonnes grading 0.50% Nb2O5 announced in September 2014 • Pre-t
Slide 24: Thank You
Thank You
Slide 25: Corporate Information
Corporate Information Cash on Hand (9/30/17): C$96 million LT Debt (9/30/17) : C$300 million Listed: TSX; TKO / NYSE American; TGB Shares Outstanding: 226.6 million Market ~C$650 million Capitalization: 52 Week High/Low: C$2.96/C$0.56; US$2.46/US$0.42 Analyst Coverage: BMO, Scotia Capital, National
Slide 26: Copper Fundamentals: Constrained Supply
Copper Fundamentals Constrained Supply Source: Scotia Capital Markets, Wood MacKenzie 26
Slide 27: New Prosperity Project
New Prosperity Project One of the Largest Gold/Copper Porphyries in the World Location: 125 km south west of Williams Lake, British Columbia Ownership: 100% 7.7 million ounces recoverable gold Mineral Reserves: 3.6 billion pounds recoverable copper Mine Type: Open-pit, 70,000 tpd mill throughput Min
Slide 28: Aley Niobium Project
Aley Niobium Project What is Niobium Niobium Benefits in Steel $9 of Niobium used in a Car • Specifically used in manufacturing high strength, low alloy steels • Green technologies, turbines, aerospace, automobile steels, oil and gas = 100 kg Weight • Global annual consumption of ferro-niobium is 21
Slide 29: Experienced Management Team
Experienced Management Team Russell Hallbauer, P. Eng - President & CEO and Director – Mr. Hallbauer is a professional engineer with over 35 years of mining experience. He has a strong background in open pit and underground mining, overseeing operating joint ventures and revitalizing mines to profit
Slide 30: Reserves & Resources
Reserves & Resources Size Grade Recoverable Metal Contained Metal Gibraltar Category (at 0.15% Cu (M Tons) The resource and reserve estimation was completed by cut-off) Cu (%) Mo (%) Cu (B lbs) Cu (B lbs) Gibraltar mine staff under the supervision of Scott Jones, P.Eng., Vice President, Engineering
Slide 31: Reserves & Resources
Reserves & Resources Aley Category Grade Recoverable Metal Contained Metal The reserve estimation (effective date Sept 15 2014) was Size (M reviewed by Scott Jones, P.Eng., Vice-President Tonnes) Nb205 (%) Nb (M kg) Nb (M kg) Engineering for Taseko and a Qualified Person under National Instrument 43