Taseko Mines Limited · TSX:TKO
Taseko Mines — Investor Presentation (November 2016)
25 slides from Taseko Mines's investor presentation, November 2016
Slide 1: Quality, Diverse Group of Mining Assets
Quality, Diverse Group of Mining Assets November 2016 TSX: TKO NYSE MKT: TGB 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: Diversified Asset Base
Diversified Asset Base Gibraltar (Cu-Mo) – 75% 4th largest open-pit copper mine in North America Aley (Nb) – 100% 722 million tons P&P reserve, with add’l 3rd largest niobium deposit in the world resources expected to convert to reserves 84 million tonne P&P reserve @ 0.50% 23 year mine life Nb2O5 (
Slide 4: 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 2015: 722m tons at 0.272% copper equivalent
Slide 5: Gibraltar: Investment = Tripled Production in Ten Years
Gibraltar Copper Mine Investment = Tripled Production in Ten Years 180 150 Annualized Production (M lbs) 120 90 Estimate based on mine plan 60 30 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013
Slide 6: Gibraltar Copper Mine: GDP3 Expansion
Gibraltar Copper Mine GDP3 Expansion – New 30k tpd Concentrator (commissioned in 2013) 34’ SAG Mill 20’ Ball Mill 160m3 Float Circuit 6
Slide 7: Gibraltar - Today
Gibraltar Copper Mine Gibraltar - Today • 23 year mine life at a milling rate of 85,000 tpd • 722 million tons grading 0.272% copper equivalent* • Average strip ratio 1.9:1 • Recoverable copper of 3.3 billion pounds and 62 million pounds of molybdenum • Annual production of 140 million pounds of cop
Slide 8: 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 $13 $12
Slide 9: Cost Benefits
Cost Benefits BC Advantage Low cost power - $0.06/kWh vs. $0.15-$0.20 elsewhere Established infrastructure in a favorable jurisdiction – highway access, rail, port, grid power (existing infrastructure funded by government) Skilled and efficient labor force – similar sized South American mine employs
Slide 10: Operating Costs
Operating Costs Total Operating Costs per Pound (C1) Head grade has significant impact on reported C1 cost Copper grade expected to average ~0.30% in 2017 compared to <0.26% in 2016 Operating costs, on a per pound basis, will be positively impacted by 2017 copper grade and ongoing cost reduction ini
Slide 11: Operating Margin Sensitivity
Operating Margin Sensitivity Highly levered to copper price recovery and further cost reductions C1 Costs (US$/lb) Operating Margin (C$, $1.80 $1.70 $1.60 $1.50 $1.40 $1.30 millions) $2.10 $55 $75 $95 $110 $130 $150 Cu Price (US$/lb) $2.30 $95 $110 $130 $150 $170 $185 $2.50 $130 $150 $170 $185 $205
Slide 12: Valuation Comparable
Valuation Comparable Teck’s Highland Valley Copper • Recently Teck acquired the remaining 2.5% of their HVC Copper Mine in British Columbia • Applying the same valuation to Gibraltar: In situ recoverable pounds of copper Teck purchased (reserves) 82,000,000 Total paid (C$) $33,000,000 Total paid per
Slide 13: Florence Copper Project
Florence Copper Project A Near Term, Low Cost Copper Producer Location: Central Arizona near the community of Florence Ownership: 100% 340 million tons grading 0.358% TCu (at a 0.05% total copper Mineral Reserves: cutoff) containing 2.42 billion pounds of copper Mine Type: In-situ copper recovery Mi
Slide 14: Florence Copper Project
Florence Copper Project Projected Commercial Production Profile Technical Study* Highlights Initial capital cost of US$210 million Payback of capital 2.6 years (pre-tax) Cash operating cost of US$0.80/pound Total estimated operating cost of US $1.11/pound Average annual copper production of 75 milli
Slide 15: Florence Copper Project
Florence Copper Project Project development costs and timeline Phase 1 – Production Test Facility (PTF): 2017 – construction & operation Phase 2 – Full scale production facility Permitting – 12 months (initiated during PTF operation) Construction – 18 months Copper production - 2020 15
Slide 16: Aley Niobium Project
Aley Niobium Project Accretive Development Opportunity Location: Northern British Columbia Ownership: 100% Mine Type: Open Pit, 10,000 tpd mill throughput Mine Life: 24 years Project Highlights Proven and probable reserves of 84 million tonnes grading 0.50% Nb2O5 announced in September 2014 Pre-tax
Slide 17: What is Niobium
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 Global annual consumption of ferro-niobium is 210 million lbs/year Gro
Slide 18: 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 19: Copper Price Leverage
Copper Price Leverage Taseko Cash Flow to Benefit Most in Copper Price Recovery At At Spot Change 2017 CFPS Spot +10% +20% Spot +10% Spot +20% Copper Price $2.19 $2.41 $2.63 Large Cap FM $1.27 $1.40 $1.53 10% 20% FCX $2.69 $3.16 $3.63 17% 35% TCK C$4.20 C$4.41 C$4.61 5% 10% TRQ ($0.18) ($0.15) ($0.1
Slide 20: Sector Scarcity
Sector Scarcity TSX/TSXV Copper Producers - 2008 Anvil Mining Ltd. Capstone Mining Corp. • Lack of publicly listed intermediate producers and Centenario Copper Corp. quality development assets stem from a decade of Copper Mountain Mining Corp. M&A and corporate activity with little to no new investm
Slide 21: Deeply Discounted Valuation
Deeply Discounted Valuation NPV $1.00 billion $0.95 billion $0.85 billion $2.10 billion NPV Total: $4.90 billion Market Capitalization: $0.13 billion = 97% discount 21
Slide 22: Appendix
Appendix LEE mmm
Slide 23: Corporate Information
Corporate Information Cash on Hand (3/31/16): C$64 million LT Debt (3/31/16) : C$381 million Listed: TSX; TKO / NYSE MKT; TGB Shares Outstanding: 221.8 million Market Capitalization: ~C$130 million 52 Week High/Low: C$0.88/C$0.35; US$0.70/US$0.23 Analyst Coverage: Scotia Capital, Raymond James, Nati
Slide 24: 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 25: Reserves & Resources
Reserves & Resources New Prosperity The mineral resource and reserve estimations were completed by Mineral Reserves @ C$5.50 NSR/t Cut-Off1 Taseko staff under the supervision of Scott Jones, P.Eng., Vice- Grade Recoverable Metal Contained Metal President, Engineering and a Qualified Person under Nat