Taseko Mines Limited · TSX:TKO
Taseko Mines — Investor Presentation (January 2019)
30 slides from Taseko Mines's investor presentation, January 2019
Slide 1: Quality, Diverse Group of Mining Assets
Quality, Diverse Group of Mining Assets January 2019 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 Our Goal Gibraltar (75%) Copper-Molybdenum • Best in class operator Stage: Operating • Focus on low-risk jurisdictions • Leverage cash flow from operating Aley (100%) copper mine to develop pipeline of Niobium Stage: Development diversified projects Pre-tax NPV: $860 million •
Slide 4: Increasing Production / Declining Costs
Increasing Production / Declining Costs 200 $2.00 Weighted Average C1 Costs (US$/lb) Copper Production (millions lbs) 150 $1.50 100 $1.00 50 $0.50 0 $0.00 2019 2020 2021 2022 Gibraltar (75%) Florence Cost/lb • Gibraltar operating at steady-state with a 20+ year mine life • Florence advancing with po
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 2017: 667mm tons at 0.28% copper equivalent
Slide 6: Quarterly copper production
Quarterly copper production Grade & Production will Vary by Quarter • Average life of mine grade is 0.26% copper • Annual grade/production variance typically ~10%, • Q4/17 & Q1/18 grade lower - exacerbated by 2017 wildfires, and use of low- grade stockpile ore 0.35% 50 45 0.30% 40 Cu Production (mm
Slide 7: Strengthening Metal Prices
Strengthening Metal Prices Copper Molybdenum $4.50 $18.00 US$ Molybdenum $4.00 C$ Molybdenum $15.00 $3.50 $3.00 $12.00 $2.50 US$ Copper $9.00 C$ Copper $2.00 $1.50 $6.00 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Mar-17May-17 Jul-17 Sep-17Nov-17 Jan-18Mar-18May-18 Jul-18 Sep-18No
Slide 8: Recent Results
Recent Results Performance Over Last Four Years • Strong production performance and copper price recovery resulted in excellent financial results in 2017 Copper Production – MM lbs Total Operating Costs (C1) – US$/lb 150 $3.00 100 $2.00 50 $1.00 0 $0.00 2014 2015 2016 2017 2014 2015 2016 2017 Adjust
Slide 9: 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 10: 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 11: Florence Copper: Profitability
Florence Copper Profitability (NPV / Initial capex) With an after-tax NPV of US$760 million and initial capital cost of US$200 million, Florence will be one of the most profitable copper mines in the world. 3.8x 3.4x 2.4x 0.9x 0.9x 0.7x 0.4x 0.4x 0.3x 0.3x Florence Kamoa-Kakula Timok Los Azules Cons
Slide 12: 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 13: Florence Copper Project: Project Development Plan
Florence Copper Project Project Development Plan • Final permits issued and Board approval for construction of Production Test Facility (PTF) in September 2017, with construction commencing in October • The PTF consists of a commercial-scale wellfield (4 injection wells, 9 recovery wells, and 11 gro
Slide 14: Florence Copper Project
Florence Copper Project SX/EW Plant Well Field (4 injection, 9 recovery & 11 monitoring wells) 14
Slide 15: 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 16: Aley Niobium Project
Aley Niobium Project What is Niobium Niobium Benefits in Steel $9 of Niobium used in a Car • Specifically used in manufacturing high strength, low alloy steels • Green technologies, turbines, aerospace, automobile steels, oil and gas = • Global annual consumption of ferro-niobium is 210 million lbs/
Slide 17: Copper Fundamentals: Constrained Supply
Copper Fundamentals Constrained Supply Constrained Supply Deterioration of the quality of deposits Lower grades, increased rock hardness, impurities and depth Constrained supply leading to: Productivity Labour and capital constraints • Market deficit possibly earlier than expected Availability of wa
Slide 18: Copper Fundamentals
Copper Fundamentals EV push could lead to copper shortage, mining group says Clara Ferreira-Marques and Gavin Maguire – Reuters / September 26, 2017 SINGAPORE -- The push toward electric cars could lead to shortages in raw materials such as copper, mining group BHP said. The EV boom would be felt --
Slide 19: Copper Fundamentals: Demand for Copper
Copper Fundamentals Demand for Copper (refined basis) 26 24 Metric Tonnes (millions) 22 20 18 16 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Base Case Mines Demand for mine production capability (refined metal) • After 5 years of substantial capacity additions (2011-2015), a lack of inves
Slide 20: Operating Margin Sensitivity
Operating Margin Sensitivity Highly Leveraged to Copper Price C1 Costs (US$/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 $210 $223 $3.25 $190 $203 $217 $230
Slide 21: Positioned for Next Cycle
Positioned for Next Cycle Taseko is poised for growth with improving copper prices Gibraltar Mine operating at steady-state Improved cost structure Highly leveraged to improving copper prices (~140 Mlbs annual production) Strengthened balance sheet No maturities until 2022 Florence Copper Project mo
Slide 22: Corporate Information
Corporate Information Cash on Hand (9/30/18): C$45 million LT Debt (9/30/18) : C$330 million Listed: TSX; TKO / NYSE American; TGB Shares Outstanding: 228 million Market Capitalization: ~C$190 million 52 Week High/Low: C$2.61/C$0.60; US$2.06/US$0.44 Analyst Coverage: BMO, Cantor Fitzgerald, Scotia C
Slide 23: Appendix
Appendix
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: Copper Fundamentals
Copper Fundamentals Constrained Supply 25
Slide 26: 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 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: 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 29: 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 30: 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