Taseko Announces Strengthening Financial Results on Improving Production Performance



    VANCOUVER, May 13 /CNW/ - Taseko Mines Limited (TSX: TKO; NYSE Amex:   TGB)
("Taseko" or the "Company") reports the results for the three months ended
March 31, 2009. This release should be read with the Company's Financial
Statements and Management Discussion & Analysis, available at
www.tasekomines.com and filed on www.sedar.com. Currency is Canadian dollars
unless otherwise indicated.
    For the quarter ended March 31, 2009, the Company reports an operating
profit of $6.6 million and net earnings of $3.5 million or $0.02 per share.
This compares to an operating loss of $40.5 million and a net loss of $39.6
million for the quarter ended December 31, 2008. Revenue for the quarter was
$40.2 million from the sale of 18.5 million pounds of copper and 230,000
pounds of molybdenum at an average realized price of US$1.61 per pound for
copper and US$8.38 per pound for molybdenum.
    Russell Hallbauer, President and CEO of Taseko commented, "During the
first quarter of 2009, our Gibraltar Mine management team continued on its
rigorous cost cutting program and by the end of March we had reduced total
site cash costs of production to US$0.85 per pound, down US$0.12 per pound
from that achieved in January 2009. Our total cost structure, including off
property costs of US$1.18 per pound clearly demonstrates our ability to
operate Gibraltar through all phases of the copper cycle. While we are
extremely pleased with these operating results, particularly as they relate to
our ability to contain costs and operate the upgraded concentrator at design
recovery rates for copper, mine management recognizes that further upside
exists with improved recovery rates from our molybdenum circuit and increased
reliability and throughput of the SAG mill. These two important operating
metrics will be the focus of our attention now that winter is over and
operating conditions have improved."
    Mr. Hallbauer continued, "Copper prices averaged US$1.46 per pound in
January, US$1.50 per pound in February and US$1.70 per pound in March. As a
result of the increasing copper price, approximately 60% of our operating
profit, or $4 million, was generated in March. With copper trading at over
US$2.00 per pound since that time, we have initiated a copper hedge program to
ensure we capitalize on this recent copper price strength, securing solid
operating cash flows. From May to December, we have secured a minimum price of
US$1.88 per pound for 50% of our production, approximately 30 million pounds.
The zero-cost facility we have established also sets a maximum price of
US$2.36 per pound; however, we will maintain upside potential on the 50% of
our production that remains unhedged."
    Mr. Hallbauer concluded, "In addition to the many initiatives taking
place at Gibraltar, significant progress has been made on our Prosperity
Gold-Copper Project. On March 16, 2009, the Environmental Assessment Report
for Prosperity was filed with the BC Provincial Government. The report
consists of 3,000 pages of expert opinion supported by scientific data,
technical analysis and includes more than 10 years of examination in the areas
of geography, ecology, sociology and archaeology. The review process must be
completed by the Provincial Government within 180 days from the date the
Environmental Assessment Report was filed."

    
    Financial Results and Current Market Conditions

    -   The average realized price of copper for the three months ending
        March 31, 2009 was US$1.61 per pound and US$8.38 per pound of
        molybdenum

    -   Copper in concentrate sales for the quarter were 17.8 million pounds,
        copper in cathode sales were 0.7 million pounds.

    -   Molybdenum in concentrate sales during the quarter were 230,000
        pounds.

    -   In February 2009, a US$30 million term loan facility was completed
        with Credit Suisse to fund completion of key capital projects.

    -   In April 2009, Taseko established a hedging program for approximately
        50% of targeted copper production to the end of 2009.

    Gibraltar Production

    The following table is a summary of the operating statistics for the three
months ended March 31, 2009 (Q1 - 2009) compared to the three months ended
March 31, 2008 (Q2 - 2008).

    -------------------------------------------------------------------------
                                     Three months ended   Three months ended
                                         March 31, 2009       March 31, 2008
    -------------------------------------------------------------------------
    Total tons mined (millions)(1)                  6.9                  9.7
    -------------------------------------------------------------------------
    Tons of ore milled (millions)                   3.2                  2.2
    -------------------------------------------------------------------------
    Stripping ratio                                 1.0                  3.2
    -------------------------------------------------------------------------
    Copper grade (%)                              0.368                0.349
    -------------------------------------------------------------------------
    Molybdenum grade (%Mo)                        0.010                0.009
    -------------------------------------------------------------------------
    Copper recovery (%)                            82.3                 81.0
    -------------------------------------------------------------------------
    Molybdenum recovery (%)                        30.8                 40.2
    -------------------------------------------------------------------------
    Copper
     production (millions lb)(2)                   19.9                 13.4
    -------------------------------------------------------------------------
    Molybdenum
     production (thousands lb)                      187                  176
    -------------------------------------------------------------------------
    Copper production costs, net of
     by-product credits(3), per lb
     of copper                                  US$0.90              US$1.48
    -------------------------------------------------------------------------
    Off property costs for
     transport, treatment
     (smelting & refining) & sales
     per lb of copper                           US$0.28              US$0.44
    -------------------------------------------------------------------------
    Total cash costs of
     production(4) per lb of copper             US$1.18              US$1.92
    -------------------------------------------------------------------------

    Notes to table:
    (1) Total tons mined includes sulphide ore, oxide ore, low grade
        stockpile material, overburden, and waste rock which were moved from
        within pit limit to outside pit limit during the period.
    (2) 2009 copper production includes 19.7 million lb in concentrate and
        0.2 million lb in cathode.
        2008 copper production includes 12.6 million lb in concentrate and
        0.8 million lb in cathode.
    (3) By-product credit is based on pounds of molybdenum and ounces of
        silver sold.
    (4) Cash costs of production is a non-GAAP measure. This non-GAAP measure
        is intended to provide additional information to investor and should
        not be considered in isolation or as a substitute for measures of
        performance prepared in accordance with GAAP. Cash costs of
        production is a common performance measure in the copper industry and
        includes direct cost of operations and related costs through to
        refined metal.
    

    Tons mined during the three months ended March 31, 2009 decreased
compared to the same period in 2008 as a result of implementation of the
revised mine plan.
    Copper in concentrate production during the three-month period ended
March 31, 2009 was 19.7 million pounds, an increase from the 12.6 million
pounds produced in the three-month period ended March 31, 2008.
    Copper cathode production decreased from 0.8 million pounds in 2008 to
0.2 million pounds in 2009. The Solvent Extraction/Electrowinning plant was
shutdown in February, March and April to reduce costs during cold weather
months and to allow the oxide pads to recharge.
    Cost of production during the quarter ended March 31, 2009 was US$1.18
per pound, a nearly 40% decrease in costs from the three months ending March
31, 2008, and the result of a number of factors. Over the past six months,
management has successfully implemented cost reduction measures and a new
two-year mine plan which includes a reduced strip ratio and operation of only
the most cost effective mining equipment. In addition, the cumulative effects
of new technology, increased recoveries and throughput from the Phase 1
expansion and upgrade to the mill, and reduced costs of consumables and
purchased services such as steel, fuel and ocean freight, and effect of
foreign exchange, have supported the significant drop in operating costs.

    Gibraltar Expansion Project

    Construction of the Phase 1 mill expansion was completed in February
2008. The ramp up to the rated processing capacity of 46,000 tons per day
("tpd") has been ongoing since completion of the construction phase with
sustained periods of operation at the rated capacity becoming more frequent
and of longer duration as mill operations personnel continue to refine the
metallurgical performance relating to grind size at higher mill throughput
rates and metal recovery. The improved performance is evidenced by the change
in copper recovery from 73.2% in October 2008 to 83.3% in March 2009, a 14%
increase.
    The Phase 2 expansion program consists of modernizing and increasing the
capacity of the regrind, cleaner flotation, and ancillary circuits along with
installation of a two-stage tailings pumping system, designed to increase
concentrator capacity from 46,000 to 55,000 tpd. Under the modified
construction schedule established after a review of capital spending, the
regrind mill and cleaner flotation circuits that are expected to substantially
improve copper and molybdenum recoveries will be completed in the summer of
2009. Ramp up to 55,000 tpd will occur following completion of the rest of the
Phase 2 program and completion of the in-pit crusher and conveyor.

    Prosperity Project

    Taseko holds a 100% interest in the Prosperity property, located 125
kilometers southwest of the City of Williams Lake. The property hosts a large
porphyry gold-copper deposit amenable to open pit mining. In September 2007,
the Company announced the positive results of a feasibility study for the
Project.
    The Ministry of Environment of British Columbia accepted Taseko's
Environmental Assessment ("EA") report as complete in March 2009 and is moving
forward under provisions of the Environmental Assessment Act with an
Environmental Assessment Office ("EAO")-led review of this Project. The
Canadian Environmental Assessment Agency and the B.C. EAO are collaborating on
their respective federal and provincial environmental assessment processes in
a coordinated manner. The Provincial EA review is mandated by law to be
completed within 180 calendar days of March 16, 2009. Federal and provincial
government decisions on proceeding with the Project will be made following
completion of the Environmental Assessment process.

    
    Near-Term Outlook

        -  Forecasted production for 2009 is approximately 80 million pounds
           of copper and 800,000 pounds of molybdenum.

        -  Total cash costs are expected to average US$1.15 per pound for
           2009 as cost saving initiatives take full effect.

        -  Prosperity Environmental Assessment approvals expected in October
           2009.

    Additional details can be found in the Company's Financial Statements and
Management Discussion and Analysis which are filed on www.sedar.com.

    -------------------------------------------------------------------------
    Taseko will host a conference call on Thursday, May 14, 2009 at
    11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these results. The
    conference call may be accessed by dialing (877) 879-6201, or (719) 325-
    4830 internationally. A live and archived audio webcast will also be
    available at www.tasekomines.com.
    The conference call will be archived for later playback until May 21,
    2009 and can be accessed by dialing (888) 203-1112 in Canada and the
    United States, or (719) 457-0820 internationally and using the passcode
    3624601.
    -------------------------------------------------------------------------

    Russell Hallbauer
    President and CEO

           No regulatory authority has approved or disapproved of
               the information contained in this news release.

                         Forward Looking Statements
    

    This release includes certain statements that may be deemed
"forward-looking statements". All statements in this release, other than
statements of historical facts, that address future production, reserve
potential, exploration drilling, exploitation activities and events or
developments that the Company expects are forward-looking statements. Although
the Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors that could
cause actual results to differ materially from those in forward-looking
statements include capital market conditions, commodities market prices,
exploitation and exploration successes, lack of continuity of mineralization,
completion of the mill upgrade on time estimated and at scheduled cost,
continued availability of capital and financing, and general economic, market
or business conditions. Investors are cautioned that any such statements are
not guarantees of future performance and that actual results or developments
may differ materially from those projected in the forward-looking statements.
For more information on the Company, Investors should review the Company's
annual Form 40-F filing with the United States Securities and Exchange
Commission or the Company's home jurisdiction filings at www.sedar.com.





For further information:

For further information: Brian Bergot, Investor Relations, (778)
373-4545, toll free 1-800-667-2114


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890