Taseko sells Harmony Gold Project to JDS

Open pit mining at Taseko’s Gibraltar copper-molybdenum mine near Williams Lake, British Columbia. Source: Taseko Mines Ltd.

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Taseko Mines Ltd. [TKO-TSE] said Monday it has agreed to sell a gold project located off the coast of British Columbia, to JDS Gold Inc., a newly incorporated company controlled by JDS Energy & Mining Inc. and affiliates.

Under the agreement, JDS will become the owner and operator of the Harmony Gold Project, a high-grade development-stage property, which covers 177 square kilometres and is estimated to host a historical resource of over 3.0 million ounces of gold. The project is located on Graham Island, Haida Gwaii.

The company said that material is contained within 22 million tonnes of measured and 42 million tonnes of indicated resources grading 1.77 and 1.41 g/t gold respectively at a 0.60 gold cut-off grade.

Taseko will retain a 15% carried interest in JDS and a 2% net smelter return royalty on the project. Taseko will also retain the right to terminate the agreement and revert to 100% ownership of Harmony in the event that JDS does not achieve certain project development milestones and an IPO or other liquidity event within an agreed timeframe.

The announcement follows a published report that Taseko is about to hit another milestone at its Florence Copper Project in Arizona. According to the report, the U.S. Environmental Protection Agency (EPA) has informed Taseko that it expects to issue the draft underground injection control permit for the Florence project towards the end of the third quarter of 2021.

The timing for the permit for the in-situ copper recovery facility is later than previously expected. But Taseko CEO Stuart McDonald says it’s the company’s understanding that there are no issues.

Florence Copper is an in-situ copper recovery project located midway between Pheonix and Tucson, near the community of Florence, Arizona. Development is being performed in two phases, including a phase one production test facility and a second phase commercial facility.

Taseko is a Vancouver-based company with a portfolio that includes the Gibraltar mine in British Columbia, the Florence Copper Project, and the New Prosperity copper-gold project, which is located near Williams Lake, B.C.

When in production, Florence Copper is expected to produce 85 million pounds of copper annually at a cash cost of US$1.13 per pound over a 20-year lifespan. Based on the company’s latest technical report and supported by nearly two years of successful operation of the test facility, the project has an after-tax NPV (8%) of US$680 million at a copper price of US$3.00 per pound.

On Monday, Taseko shares advanced on the news, rising 1.4% or $0.03 to $2.47 on volume of 136,310. The shares trade in a 52-week range of $3.22 and 67 cents.

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