Taseko aims to finance Gibraltar

Vancouver — Anticipating a recovery in the price of copper, Taseko Mines (TKO-V) is seeking up to $5.5 million to determine the economic viability of technology aimed at reviving the dormant Gibraltar mine in British Columbia.

The Hunter Dickinson-led junior is offering 1,000-5,500 limited partnership units of Gibraltar Engineering Services (GESL) priced at $1,000 each. Haywood Securities is acting as the agent.

The proceeds will be used for final testwork, engineering and tests to determine the feasibility of applying the hydrometallurgical technology developed to extract pure copper from concentrates in a refinery to be built at the Gibraltar mine near Williams Lake.

“We believe this financing is an integral step in restarting the fully equipped Gibraltar copper mine and, subject to feasibility results, construction of a refinery at the mine site,” says Taseko’s chief executive officer Ronald Thiessen. “This industrial development would set a precedent in the B.C. mining industry, and successful implementation of the new processing technology would positively affect copper deposits and existing mining operations throughout the province.”

In August 2000, a scoping study concluded that the proposed hydrometallurgical refinery would result in a 22% reduction in copper production costs by eliminating the cost of transporting concentrate to offshore processing locations, reducing smelter charges and the achievement of greater mine site efficiencies. Taseko believes that, under these operating conditions, production could continue for a minimum of 12 years. Mine startup and refinery construction costs are estimated to total $120 million.

Taseko acquired the 35,000-tonne-per-day, mine-and-mill facility in 1999, with a view to examining its potential for producing copper cathode from concentrates using an innovative hydrometallurgical process developed by CESL, a division of Teck Cominco (TEK-T).

Earlier this year, Taseko trucked 900 tonnes from Gibraltar to CESL’s demonstration plant, near Vancouver, where it was processed into 7 tonnes of concentrate grading 24% copper for testing. The company noted that tests to date “had confirmed operating perimeters, such as copper recoveries and the autoclave retention time, used in the scoping study.”

Gibraltar was a large-scale, 37,000-tonne-per-day open pit and milling operation with an accompanying solvent extraction-electrowinning (SX-EW) circuit. Boliden (BOL-T) acquired the mine when it took over Westmin Resources in early 1998, and then suspended operations as a result of high operating costs in a weak copper market and ongoing capital requirements. Sulphide resources, using a 0.2% copper cutoff grade, include measured and indicated resources of 149 million tonnes grading 0.31% copper and 0.01% molybdenum in the 12-year mine plan, plus additional measured and indicated resources of 596 million tonnes grading 0.28% copper and 0.01% molybdenum.

Under an agreement signed by Taseko, Gibraltar and the CESL partnership, Taseko and Gibraltar can acquire the business of the partnership for a defined purchase price, which reflects a 30% premium over the CESL Partnership’s expenditures (expected to be equal to 90% of the offering amount) on the defined work program. Taseko and Gibraltar may fund the purchase by paying cash or by issuing shares of Taseko.