Taseko Adding Capacity at Gibraltar, Submits New Project Plan

Taseko Mines announced plans to spend $235 million on an additional 30,000-st/d concentrator at its Gibraltar
mine, complementing an existing 55,000-st/d mill. Another $90 million will be spent on mining equipment to boost
Gibraltar’s copper production by about 60 million lb/y. (Photo courtesy of Taseko Mines)
Taseko Mines announced in mid-February 2011 approval by its board of directors of plans to proceed with its Gibraltar Development Plan 3 (GDP3), which will include construction of a 30,000-st/d concentrator to complement the existing 55,000-st/d facility at the Gibraltar mine in south-central British Columbia. Shortly thereafter, Taseko submitted a new project description for its Prosperity gold-copper project, also in south-central British Columbia, to Canada’s federal government. The government withheld authorization for the project in early November 2010, primarily due to concerns about the impact of the project on the fish and fish habitat in the Fish Creek watershed.

Gibraltar Expansion: The added capacity at Gibraltar will increase the mine’s copper production by about 60 million lb/y to 180 million lb/y. A new molybdenum recovery facility will be an integral part of the project and will increase Gibraltar’s molybdenum production by more than 1 million lb/y. The Gibraltar mine produced 92.3 million lb of copper and 941,000 lb of molybdenum during 2010, when Taseko was completing an expansion to the property’s current rated capacity.

Taseko is 75% owner and operator of the Gibraltar mine. Go-ahead for GDP3 also requires the cooperation of Taseko’s 25% joint-venture partner, Cariboo Copper Corp., which is jointly owned by Sojitz Corp. (50%), Dowa Metals & Mining (25%) and Furukawa Co. (25%).

Taseko estimates capital costs for GDP3 will be $235 million for the concentrator and molybdenum plant, and about $90 million for mining equipment. Based on an assumption of continuing strong metal prices, GDP3 is anticipated to have an internal rate of return of about 30% and a three-year payback.

Taseko President and CEO Russell Hallbauer said, “This project’s capital cost intensity of $7,800/st of daily mill capacity and $10,800/st including mine equipment is one of the lowest of any project being developed globally and is reflected in the rate of return and quick payback. A key component of this undertaking is our ability to execute quickly and take advantage of the robust copper price environment. Over the past four months, our management team has been working on advanced engineering. Construction will commence in early spring and commissioning of the new concentrator is anticipated in Q4 2012.”

Taseko is also undertaking a 10-hole drill program it expects will convert a significant portion of Gibraltar’s 500 million st of resources to reserves. Gibraltar’s reserves currently stand at 445 million st.

New Prosperity Project Plan: Taseko said its revised plan for the Prosperity project addresses the concerns identified during the federal review process. The proposal greatly reduces environmental impacts, preserves Fish Lake and its aquatics, and enables all mine operations and related components to be contained within a single watershed.

“Today, price projections for copper average about $2.50/lb and for gold above $1,000/oz, nearly two times the prices we used in our original assessment,” said Hallbauer. “It is for this reason we are now able to consider and advance this new design proposal, which adds construction costs and life-of-mine operating expenditures of approximately $300 million.”

Given that the project re-design retains much of the original plan, Taseko anticipates government agencies and departments will be able to rely on significant portions of the already completed environmental assessments to inform the new assessment and the scope of the new assessment will be focused only on what has changed.

As featured in Womp 2011 Vol 02 - www.womp-int.com