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Taseko Mines Limited (TSX: TKO; NYSE Amex: TGB) on Wednesday announced it is going ahead with its Gibraltar capital program and is planning to spend $134 million to complete the project by the end of this year.
The investment will increase Taseko’s share of copper production capacity to 140 million pounds per year.
Gibraltar, located in British Columbia, is a Joint Venture owned by Taseko Mines Limited (75%) and Cariboo Copper Corp. (25%).
Taseko also committed a further $31 million in 2012 for development and advancement of the wholly-owned Aley Niobium Project and New Prosperity gold-copper Project, both in British Columbia the company said in a statement. Taseko has been in the news a lot about the controversial Prosperity project. In November pro-and anti-mining forces clashed once again over the proposed mine in northern BC after
Taseko started legal action against people it alleges had obstructed preparations at the minesite.
The $1.5 billion project is being revived after the the federal Minister of the Environment ordered the Canadian Environmental Assessment Agency to set up a panel to examine the project which was rejected by the previous federal government.
Said Russell Hallbauer, President & CEO: “A key strategic priority for Taseko in 2012 will be positioning the Company for growth in 2013 and beyond. This priority includes the GDP3 project build-out and the near-term production growth it will provide. We are over six months into the 18 month project. On a 100% basis, Gibraltar has spent $56 million and has fixed price commitments of $70 million, with a budgeted total of $235 million (excluding mining equipment). The remaining $109 million will be made up of construction materials and contracts. The project is on budget and on time for a December 2012 completion.
“The free cash flow from our 75% share of Gibraltar production will support Taseko’s Aley and New Prosperity project expenditures. This year will be pivotal for our two development projects. We expect to complete a feasibility study on Aley in the fourth quarter of 2012 and the recently announced environmental assessment process for New Prosperity is scheduled to complete in November 2012.
“Operationally, we are well positioned for the completion of this work, with all of these value-enhancing programs funded from operations and Taseko’s $340 million cash position, as at the beginning of 2012. In addition, our Gibraltar operating margins are protected from copper price volatility by the US$3.50/ pound puts that are in place for all of 2012 against 90% of Taseko’s share of Gibraltar copper production.”
