Taseko Mines Limited (TGB) 25 Feb 212020 Q4 Earnings call transcript

Good morning. My name is Veronica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Taseko Mines Q4 and Year End Earnings and Production Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator begin may your you conference. Taseko,

operational Veronica. to Taseko's you, call. news financial Welcome, our Taseko's Richard market yesterday end available is Chief Bryce and our also, Financial everyone, VP in joining on for The our of and Hallbauer; our is tasekomines.com. announcing With Officer, Russ and you thank today release President, Tremblay, Operations. was fourth close conference issued after and XXXX me Thank results website, Vancouver CEO, Stuart quarter McDonald; year Hamming; and

before to actual As information. to forward-looking management, listeners and outcome. cause may risks the your to outcome get that usual, would our subject contain will This we uncertainties differ by that information, into opening remind materially stated answers from questions the I by remarks our its to and comments is like nature

information For like release, factors various note our the risks out you cautionary I uncertainties, the I particular and further related read will we measures MD&A that call. our point non-GAAP on to also during the would risk these quarter company. well as the accompanies encourage that to to and use fourth as news

remarks. the You lines turn will the reconciliations these can would related to like investors over I remarks now analysts regarding find for opening call news Russ and open measures explanations After to in release. phone his for and we the question-and-answer to session.

areas are last everyone. financial Thank Stuart want relatively the as to Good operating for to morning, be you both brief, year. in have My occurred results, Bryce you, Thank sure will and and and these lots us I'm over Brian. you joining today. as comments listen

stay can our costs these the achieve. of as our where means. I've to that, can one speak for operations many capital We we just about I'll company. the the spoken over that. And quarterly has priority And we years Generally, our plan a operating number generally So been ensure run highest top calls at lowest times the we strategic on level that within about are we us. bit and our mining is on a discipline

this years, of entry turn during the acquired with assets. some in. And us business our We've come we've opportunities cyclical a costs one were them copper also advantage low. when were to the pretty as our that tough take of such we the times, low. Over allow those in are should And pipeline We bought had prices tough times.

stable assets. And them. So we've of always large a we for long-life low-cost have looked

lifetime. I we I've that this our good for sustained for to business period present to see our we're this like think price we anything we've because exciting going develop in the by, have the prices. to exciting those a present come with business of for out are the times plan correct for And build have here this are, time. And outside and We themselves. times of don't been for. enjoy been waiting shareholders, we patience as - generally in regime And in on forces. is seen difficult to is some them, we seen management that like when And cusp conditions time. prices, But this our a levels years metal team and of waited not expected be which over while price XX is this, now. have we've copper

And certainly of longevity be it's is going so I This we the last saw the think $X.XX to not ultimately copper. just XXXX cycle. when but it's not price,

advantage once-in-a-lifetime take of to positioned perfectly this is event. company this So

How long-term of not New in reserves. those mining development company First back that's reserves. forward all is resources, along built? mean friends, we our of the to are of next bright XX not While Between on our the on Nations reserves. pounds is we're I operating Florence assets, XX-XXX our that's pump the and in billion and all sitting with studies It's Prosperity feasibility them. over - cash, path continuing have project process with project transitioning to built the All construction, decade. out advancing Yellowhead our our the EEA wings,

if that industry, of Hudbay than look reserves in Copper Capstone Lundin are those So more we context has, at the and has, has, the Mountain.

In in $X.XX, $X.XX, are staggering reserves $X.XX. a Copper and combined. valued the Mountain than and has greater at less reserves ground. at at Mountain's fact, our Well, than pound Capstone's Capstone XX% are at those $X.XX Copper Lundin a And valued

terms XX of be growth months that's the in we copper next some - continues. on our pretty to if time, of path period production XX these Frankly our So of is catch-up - continue short investors where we is. a think of in price of this growth occur and to will by metrics of going

Gibraltar's So and generated years, XX frankly, the [lined cash us [ph], instead last a been I the growth in where pipeline can copper think story The Gibraltar. clock] for production. low develop it's we're and we in we've the the We've space. cost operation best now put because had our

we we US$X.XX tonne at CX further pounds cost. by So have million over XXX annually by pounds comes XXX if million online per pounds Florence, a you conceptually, grow at XXXX, once XXXX for it of million with production production XXX annual roughly look Yellowhead of

ranging your all estimation, if with estimations all $X. analyst copper So above look well guys' we your at

going to see, are As be can pretty you in accretive reserves ground. these the

ourselves on First does include discussions of we our Prosperity find headed with any this New firm. not So consideration Nations may where

past and another in on this on for years. other trouble are XX component everyone seems in down are shutting any has said, because they concentrate, will as Chile company there low, $X just for [Coiabaceyo albeit but as and Qubee] important XX,XXX so over the for in smelters demand. be example, is are focused set I No Both slow will coming soon nor on of treatment years, So XX anytime a concentrate the going or there's put a year for the a into only company, [ph] doubt for To is that's Copper a still American about and but cargo respects $X.XXX won't or operations. small future no and for serious a pound many refining many the the and go there it. be Latin on front. screen pandemic be charges XX in tons Gibraltar open. Peru sold of Copper, tonne ways, afford can't pound. to very of difficult many $XX Highland no us Valley spot metal this of to a metal, has many, been up perspective, world,

demand And increase stay and now over the high evident. the price I'd copper So call smelters to long will be still go will for down term. like turn will Stuart. to

fourth joining for announce Okay. good morning, Thanks, did our Russ, and EBITDA production January. actually quarter And We call. everyone. early earnings and estimated copper thanks our in

yesterday, now for number part over many pound few $X but just for developments was one other news spend start us. minutes It's wanted last reasons. with a that to And the recently. to really copper in a memorable positive exciting it was of and certainly business an I time a our prices So definitely year review

And our any our health response we And and million evidence commitment price always, We're within at copper as last recently employed. the few dropped to last primary and layoffs proud our had And and time of took of year. on protocols made a is mine initiatives kept in and When employees. impact while without those without COVID our we lost we've jeopardizing the of was cost QX. our long-term the safety cost to $XX Gibraltar, plan. March our about adjustments incidents pandemic in employee cases fact focus workplace structure. we savings that had in that that any of QX to operation new at implemented, Gibraltar without the those the we any COVID quick resulted safely production, haven't copper on operational action running workforce, also and issues staff smoothly had We our zero March, disruptions. Firstly operational adjust

the jurisdiction. million year. it XXX and $XXX life for million $XXX of $X.XX We we to flexibility in at demonstrates and that pounds of operating produced value EBITDA operation long million Gibraltar cash that the the adjusted led a have for of So cost cash at of stable a good the of a flows a definitely year and copper pound

for made asset that important many progress valuable a very at in and going is and the good test public year. permit. town Protection from step the that operational state In This Permit, in de-risking understanding also also been Florence community assumptions of where very Taseko's validating we being key dramatically council we an We December, is on over consultation This copper near voted study. not The the completed the increasing milestone which the change work Florence and is the the saw cost strong appeal has to support to last profile received support January reflected also Aquifer was now that we've our a future. process project. key feasibility and followed production

which months. for well in we community expect as permitting ongoing EPA process, that the is bodes So few receive support permit next well and to the the

sheet The completed $XXX also $XXX at significant So have an approximately bond stronger portion upsize of mature cost no month with which the and we've to refi a And much attractive had to financings, our past. maintenance balance of the a We debt maturities XXXX. with had due used successes repay Florence US$XXX about and until the required million covenants. was in Florence. than million this our recently completed Gibraltar now XXXX. and for balance cash was we've earlier we in a no significant million have funding And provides bond

positioned. prices the to we have we we're us. of results of give pounds we we in towards roughly of also would this $XXX access this slight year. idea copper expect were pit million Gibraltar year be weighted And, which financial or over we later that improved copper means million these the advance to of pit So the XXX% production increase are year And Pollyanna you year, second produce a in XXXX. course, higher and is to significantly that's Gibraltar, believe At as than grades generated at the leverage as increase which expect begin half EBITDA an adjusted for head well they To our of last XXXX, from XXX very prices, increase.

unhedged from very is the XX% copper of for coming So revenue copper our meaningful recovery price us. production, with

refined we're to Florence put produce copper in And mid-year. production That's XXXX. the around the project projects lowest place, would move forward which for have pound we in happen the schedule construction world. announced into we're and to the operating low in government Florence and We have of engineering will and construction allow a moving with hand. energy less final move the cathode of a emissions we already a This work copper upfront second new electric very with a It activities. in green design required procurement smoothly mine. EPA in forward CapEx green fits the half expect metal as planning that final a facility. of And well vehicle will to the XX% intensity one commercial become with This of soon is that supply commercial the U.S. it's ground domestic $X.XX will funding carbon manufacturing. of conventional as permit on in majority cost into has infrastructure of we recently plans renewable also that us us

wanted about plans. growth talk to I our longer-term Lastly,

conflict engaged New have on including Nations. copper assessment engagement project. with reminder, engaged Prosperity, Tŝilhqot'in X New potential other those and the - discussions a try to Yellowhead and we also Government on the Yellowhead, a dialogue environmental with the the for projects project. confidential Provincial both that we're with in we're that First to We've The to pipeline, with partners and actively focused the solution the significant JV Florence Beyond BC and find of Prosperity process And communities, commenced we're in Government a projects. National local as the around

that agreed And a agreement Over our dialogue additional the that can December, last year an to we standstill year, Tŝilhqot'in. we've dialogue with constructive establishing continue. in made for extend a progress in so

that's Prosperity. understand a equity takes the And could expansion that's very something successful well. We happening catalysts. term Yellowhead background at But work potential are studying and like copper New of these in markets this important both shorter and either outcomes, Gibraltar development and also $X future. meaningful time shareholders is in patience. major this environment, So at with price the focused that In projects projects as we're there's for near become on

is As unmatched And XX mentioned, Russ has copper already base copper Taseko and of billion in to in mid-tier closed pounds space. reserve the probable that proven reserves.

build those to over I'd financials. base great hand and And a with talk to firm, up have and to to like the realize we we'll inherent reserves. on of So to focus wrap that, growth organic about QX the continue value Bryce to our call

Good everyone. Stuart. Thanks, morning,

higher quarter averaged fourth benefit mine $XX price, had at from of million and the which operations per continued keep the which higher million pound to which million. For to $XX.X as of in for basis Taseko copper $X.XX inventory the million has a revenue this of bit pound was we at and quarter. our concentrate Total of million pound, amortization adjusted we continue few the pounds, depletion quarters per average to $X.XX per per previous operating for the at quarter in price of is reported December, ended Earnings We had of a things. realized on our copper XX site adjustments $X a revenue. also it production, end resulted pound our a came a sales X.X recovering the low provisional before than upward EBITDA costs quarter pounds. price in similar earnings this and in US$X.XX further in result included and

million. to had finished over cents being still but less And not cash at pit, in by the $X.XX of operating in And $X.XX There goods before generated attributed a also strengthened XXXX. in pit finished to X in our previous for quarter, also last was is $XX costs what $X for increased $XX per focused from we pit. quarter. Those XXXX. made together stockpiles quarter, pound. as higher Depreciation mining of depreciation margin with throughout $XX million Gibraltar the inventory expect inventory. flow which Pollyanna $X.X the had $X.XX Pollyanna for There's least, our guidance lower per notable dollar of and $XX work Canadian million the also year is going forward that million actually also was we copper related costs which grew that only we operations First, and we at copper million But realized is the production. the price capitalized million work consistent the

invest water XXXX. in piping pit the in of price dewatering million mine in pit the copper higher procurement pumping Granite the and With system was also the to the QX the new $X plan, we move into in Gibraltar in of

mining finished we're that Now pit. in the Granite

million operating and the XXXX in unrealized loss cash $X the CapEx an had net to programs our spent income adjusted net $X was of GAAP with which or also $X.X denominated $X.XX our from share. dollar Florence. We effects were the These million flow. gain weakening was share on are EPS we notes, funded million U.S. of $X.XX per dollars, removal on U.S. a

raise the at you in particular, everything Looking cash We can for liquidity. today net outlined. did of back $XX remains million The flow XXXX, improved Stuart with more account in see we $XX statement cash, which finished COVID on our we that and in than million threw proceeds the that in equity year modest which our us, bank million started. is $XX with where November

of $XXX from million We bond in that $XXX rate. upsized our significantly interest also million, Stuart proceeds refinancing but was Canadian January at that mentioned lower a generated to bond net

by Our interest a costs only year. $X increased million are

we today cash. million have So US$XXX of

we not prices for break the decade. the in attempt of this surpass plan watch construction of is we seen copper second to While timely and This half year. price a Florence extremely for as the

expected run see Florence of valuable see net environment. And NPV a CapEx have and return technical and million current price, hand extraordinary in And of in of up makes using that per $XXX of to increases substantially pound, available remaining model funded report intensity Florence cost. US$X.XX in asset million funding is if on and that lot given financial we per With a the price copper copper an share. $XXX NPV funding. very has to an one it's model today's a its Florence per or present any I I a price. our low value copper Florence US$X.XX to that based options using $X.XX removing know We for US$X Florence the share. $X.XX XXXX CapEx $X funded to share, per that that

copper. appreciation for Florence. recover significant to pandemic, operate a there's the from investments, And and backdrop it build the be new Thanks. questions. will critically the shareholders a finding turn I our Taseko. to This as back short break in for any of potential attempts for green all So planning prepare near-term world at operator transformational conscious qualifying the of itself happening will copper now when ESG is the And and year we investors, is time companies with XXXX but to to for records. hungry

[Operator we Mike much. Fitzgerald. very question Please Ladies you begin now the Kozak will Instructions] question-and-answer Cantor first from and gentlemen, Thank Your session. comes go ahead. with

for my from morning, Good Yeah. couple Thanks questions. me. everyone. A taking

First, for new you're is think and the have approvals UIC do his in-progress review asking the to And, the the head who's guess, when the the you making? before team, that, Michael presumably all that permit I midyear, UIC? you Regan, receives to that assumption of I to incoming what have say wait is Florence by is that, expect I'm EPA to new

Tremblay Mike. Yeah, It's here. Richard

then there. we'll or a EPA don't period, the delay are any any based some issue Comments the and EPA foresee comment. process for is issues made. So reviewing public we on we Like required, or And if then on it out it, those permit it's comments but then, public any do issued commencing. not and public - gets foresee draft, the there's of hearing. at end will permit draft issued finalizing gets and adjust the draft of for with delays received the the comment the -

helpful. is my And that's on okay, second Florence financing the here. then, Okay, just one

So I at look just the numbers.

initial million. $XXX CapEx So

bond million You net. million than now, got less so $XXX million from the $XXX $XXX refi,

million current it from excluding copper prices, your balance sheet last just an gap, at cash now from basically in estimates by have Gibraltar. And of quarter. US$XX call funding just the on flow X or So what you quarters cash my

no So partner probably to the financing been one - the X royalty a a is could gap confirm funding over so that I I longer Can quarters, Stuart's either is over selling considered, last prices right, JV Florence. to want this is my that the options mean, saying are copper given that, fact or finance even and being - I I small? was of where question imagine,

Well, I the in from you've mean, generating the million our today. we've of is script, Gibraltar. handle with on got I - US$XXX good $XXX numbers. of flow low, we've as we think CapEx hand got only cash million. relatively in got said, cash Florence We're

we our XXX%. yeah, ability in So, We have to we're and very on fund own own this a think position. strong project the definitely it

can transaction many we on say, options as a something very have ourselves we We We're higher out. $XXX do you But minority other something fund are if million don't continuing to accretive may it stake, XXX% JV basis. partners. maybe a that's sell valuation minority at NPV NPV, stake consider see the today's going we off own get we think select that or discussions if based a doing. how the with We potential those to and at to a a of we this then with few play still want, discussions that prices,

today, much we're options. a have and a a didn't glad stronger And stronger that more because position many in of back, today looking in obviously. much last kind do year, position frankly, we're So transaction we we're

you you. that the deals for well don't out So sometimes do it's that work

I agree. to That's hear. good completely

me. Okay. everyone. Thanks, for all That's

you very much. Thank

Hutchison go Your next ahead. Please Securities. with TD Craig comes question from

mining pick good We on QX. the QX? up expect Hi, My balance rates of guys. this rates saw we is question did Gibraltar. here in through mining the that in Can year we morning, see similar

rates, to moved? refer you material When mining total

on can as ratios well me you moved. strip some context Yeah, total helpful. that'd material give be if Maybe,

Yeah.

continue rates So, will for to rates Yeah, mining Craig, Richard year. Tremblay this here. similar QX

but for into grades QX, And you a know back-half portion you right just guys grades, that higher Okay. going or in guiding QX in somewhere are in the expect kind of higher of should grade of are this terms guys now? into year, I already we

production our XX% first the for second profile be roughly so Yeah, the XX% half and production will year, of in into of year the the the half.

as now EPA you the results well, Can target Florence a guys in the the QX to sort provide front? slipped And XXXX, in just it's midyear. know I that context you some timeline is of permitting, with question why Thanks. great. of so follow-up hand, on Okay, just permits have on your all early

Government.

as through. at. on by timeline so were The timeline, for historic parties it us. of what COVID-XX the that impacted different originally that not be that run coming things it's have to we estimate to But properties just is consulting treatment set factor. fast of site process back Response with, number really plan like a slow is really, we that to in needs But on and is was the a there are we advance, continues impacted number things. back thought. the as a a process deal best played no from look And, the

one Okay. question. And last just then

is is correct? I think CapEx million, that guidance the US$XXX around now that

the is million number. US$XXX

million? US$XXX

Yeah, yeah.

Okay.

fuel in U.S.? feeling the pretty of given recently just that, prices where You confident gone guys have are

is Yeah, include working reclamation there assumptions And generally, bonding. the capital confident is that at some comfortable a of we've looked But, by be there surety in that that. bonds. those, would We're And in some portion with will there bonding there. that of covered about we're reasonably estimate.

guys. you appreciate I

more better your engineering you do, the refinement cost. get the you Greg, on

and capital same terms you on more engineering our when your happens, the engineering into expenditures. and and that been cycle in permitting, where we've the in certainly price of year, just the last delay of at refining permitting, costs. the So, stuff. And in copper Stuart that kind delayed with were getting certainly, overall really were the in But we studies whole like said, can the time, details we focus blended although

taking questions. great, Okay, my for Thank you guys.

[Operator you very much. Thank Instructions]

the operator, quarter. to here. no up - our we'll further again can you after Thanks Operator, call and everyone, again, yeah, for Bye, if we yeah thanks first again. talk wrap questions, joining And May Okay. everyone. there's in

you. See

Ladies Thank and please you that a you. you ask your conference for Have concludes participating We gentlemen, for good disconnect call today. this your thank and lines. day.