Program planned for Prosperity

A loan from a private company associated with Robert Dickinson, president of Taseko Mines (VSE), will provide $1 million in interim financing for the company’s Prosperity gold-copper project in central British Columbia.

The loan takes the form of a debenture convertible into common shares at $8.12 for one year. The debenture also comes with 123,000 share purchase warrants exercisable at $8.12 in the first year, and increasing to $9.37 in the second.

The interim loan is part of a larger financing effort, now under way, which is expected to raise roughly $10 million to fund additional work.

The Prosperity, previously known as Fish Lake, contains about 744 million minable tonnes grading 0.0127 oz. gold per ton and 0.236% copper at a stripping ratio of 1.57-to-1.

Angle drilling will be carried out in an effort to upgrade reserves in the areas to be mined in the long term.

Drilling in the area to be mined in the short term boosted previously estimated gold grades by 11% and copper grades by 4%.

An independent consulting firm will be engaged to revise the prefeasibility study for a 99,000-ton-per-day operation.

The existing study is based on a 66,000-ton-per-day operation producing 222,000 oz. gold and 99 million lb. copper per year. The cash cost of production is projected at US$147 per oz. gold produced, net of copper credits based on a copper price of US$1 per lb.

Last year, International Musto Explorations sold its half interest in the Bajo de la Alumbrera copper-gold project in Argentina to Rio Algom and Australia-based North for more than $500 million. And Dickenson says major mining companies have since developed an appetite for projects with high daily throughputs.

At the time of the Musto acquisition, minable reserves at Alumbrera were estimated at 619 million tons grading 0.02 oz. gold and 0.51% copper. MIM Holdings, Musto’s partner, was looking at a US$750-million mine capable of producing 640,000 oz. gold and 400 million lb. copper per year.

Preliminary estimates, based on a 99,000-ton-per-day mine at Prosperity, place yearly output at 365,000 oz. gold and 153 million lb. copper, while the capital cost is pegged at roughly $590 million. The cash cost of production at the higher output is estimated at US$79 per oz. gold produced, net of copper credits based on a copper price of US$1 per lb.

Taseko expects to complete its financing by mid-February, and will start the infill angle drilling before the end of the first quarter.