Taseko to acquire 100% of fabled B.C. copper mine

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Taseko Mines Ltd. [TKO-TSE] shares rallied Monday after the company said it has agreed to become the sole owner of its Gibraltar Mine in British Columbia.

The company said it has signed definitive agreements to acquire the remining 12.5% interest that it doesn’t already own in Gibraltar from Dowa Metals & Mining Co. Ltd. and Furukawa Co. Under the agreement, Taseko will pay $117 million over a period of 10 years for shares in Cariboo Copper Corp. currently held by Dowa and Furukawa.

Taseko shares advanced on the news, rising 6.1% or 16.5 cents to $2.86 on volume of 410,222. The shares currently trade in a 52-week range of $2.80 and $1.45.

“We have established a positive relationship with Dowa and Furukawa over the last 14 years,’’ said Stuart McDonald, President and CEO of Taseko. “Given that both groups are reducing their copper smelting businesses and are exiting their copper mining investments, we’ve been able to structure this exit from our long term partnership in a mutually beneficial manner,’’ he said.

Under the agreement, an initial $5 million payment will be made to Dowa and Furukawa shortly after closing. The remaining cash consideration will be repayable in annual installments commencing in March, 2026.

The annual payments will be based on the average London Metal Exchange copper price of the previous calendar year, subject to an annual cap based on the percentage of cashflow from the Gibraltar mine.

Under the Cariboo offtake arrangements entered into in 2010, Dowa and Furukawa were entitled to receive 30% of Gibraltar’s copper concentrate offtake for the life of the mine, at benchmark terms. Upon closing of the acquisition, the offtake agreements will be terminated and Taseko will retain full marketing rights for 100% of Gibraltar’s concentrate offtake going forward.

News that Taseko is acquiring 100% of the asset, comes after the company recently announced a 26% increase in annual copper production from mine.

The company said the mine produced 34 million pounds of copper and 369,000 pounds of molybdenum in the fourth quarter of 2023. For the full year, Gibraltar produced 123 million pounds of copper, a number that was well above guidance, marking a 26% increase from the previous year.

“The strong finish to 2023 is expected to continue in 2024 as the Gibraltar pit will remain the main source for the first half of this year,’’ said McDonald.

Copper production in the fourth quarter was supported by strong copper grades of 0.27% with ore from the lower benches of the Gibraltar pit. Mill throughput in the quarter averaged 83,000 tons per day and was impacted by additional downtime for maintenance and monitoring of he ball mill in concentrator #2.

Copper sales volumes in the fourth quarter were 36 million pounds, and year-end inventories remained above normal levels.

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