Taseko Mines hopes for Prosperity

Vancouver – Their Gibraltar mine is already a fixture in south-central BC, and now Taseko Mines (TKO-T, TGB-X) has moved another BC prospect one step closer to a production decision.

A feasibility study for Tasekos 100%-owned Prosperity gold-copper project came back with good news: a 70,000 tonne per day mine and concentrator facility would produce 108 million lbs. copper and 247,000 oz. gold each year over a 20-year mine life with healthy economics.

The study gave Prosperity a $260 million pre-tax net present value at a 7.5% discount rate and a 12% internal rate of return for the project. Total pre-production capital cost is estimated to be $800 million.

Prosperity hosts 480 million tonnes of proven and probable mineral reserves grading 0.43 gram gold per tonne and 0.22% copper, using a $4 per tonne net smelter return cut-off.

After a year of pre-stripping, the deposit would see 145,000 tonnes mined per day at a strip ratio of 1.1:1. A declining net smelter return applied to the mill feed means lower grade ore would be stockpiled for the final three years of the mine plan. Including processing of lower grade ore reduces the life-of-mine strip ratio slightly, to 0.8:1.

Hydro power will be supplied via a new, 124-km long high voltage transmission line from Dog Creek. The mine would support 500 full-time jobs for the 20-year lifespan, and during construction would employ up to 900. The economic and social benefits to the Cariboo-Chilcotin, a region struggling with the fallout from the pine beetle infestation, would be significant.

Before a production decision can be made, Taseko needs to submit Prosperitys environmental impact assessment. Perhaps the biggest obstacle in that regard is the companys plan to contain tailings in a creek valley leading to local fish-bearing lake, similar to the proposal recently turned down by a joint federal-provincial review panel for Northgate Minerals (NGX-T, NXG-X) Kemess North project.

Taseko acquired Prosperity in 1969. Through the 1970s and 1980s exploration drilling continued under option agreements with several companies. In 1991 Hunter Dickinson acquired Taseko and in the following decade the company outlined a bulk tonnage porphyry gold-copper mineral resource. Prosperity reached the feasibility study stage in the late 1990s but low copper and gold projects prompted the company to put the project on hold. Work started again in 2005.

The deposit is oval, roughly 1.5-km long, 800 metres wide, and 880 metres deep. The principal sulphide minerals ate pyrite and chalcopyrite, uniformly distributed as disseminations, fracture fillings, and sub-vertical veinlets. Native gold occurs as inclusions in copper-bearing minerals and pyrite.

In other Taseko news, in September the companys 2007 drill program at Gibraltar paid off in a 128 million tonne increase in the mines mineral reserves. Total reserves at Gibraltar now stand at 384 million tonnes at 0.31% copper and 0.009% molybdenum. In addition, Gibraltar hosts 530 million tonnes of measured and indicated resources grading 0.31% copper and 0.007% molybdenum.

Taseko is in the midst of a major two-phase expansion at Gibraltar, due to finish by the end of 2008. Post expansion, milling will be maintained at 55,000 tons per day, up from 46,000 tons. The expansion includes ten new, 160-cubic metre flotation cells; a new semi-autogenous grinding mill; modernized and increased regrind capacity; a two-stage pumping system; and the addition of a pebble crusher to the SAG mill circuit.