Taseko boosts operating profits at Gibraltar

Vancouver Robust metal prices helped Taseko Mines (TKO-T, TGB-X) boost its operating profit to $18.3 million in the latest quarter, and $33.8 million for the first nine months of the fiscal year, from the Gibraltar copper-molybdenum mine near Williams Lake, B.C.

Net earnings for the quarter ended June 30 rang in at $4.1 million, up from $3.1 million a year earlier, while earnings over nine months of fiscal 2006 totaled $13.9 million, or $0.13 per share, compared with earnings of $6.8 million for the 9-month period a year earlier.

The Gibraltar mine turned out 10.1 million lbs. of copper in concentrate during the latest quarter, along with 169,000 lbs. of moly in concentrate. The company realized an average price of US$3.08 per lb. copper and US$24.81 per lb. for moly during the 3-month period.

Taseko acquired the then-dormant Gibraltar mine in 1999, placed it into production in 2004, and has since boosted reserves and resources to allow for at least a 15-year mine plan. In late 2005, proven and probable reserves stood at 194 million tons averaging 0.31% copper and 0.01% moly. Measured and indicated mineral resources total 614 million tons at 0.28% copper and 0.008% moly. Subsequent drilling is expected to lead to further resource increases, including more than 62 holes totaling 18,000 metres drilled since March of this year.

Taseko is conducting a $62-million concentrator expansion and upgrade program aimed at boosting production capacity to 100 million pounds of copper from 70 million pounds by 2008. Engineering is about 30% complete, and tendering is under way for major contractors.

A solvent extraction and electrowinning plant is being rehabilitated at Gibraltar, and is scheduled to be operational this fall with a capacity to produce 7 million lbs. of copper in cathode annually.

Taskeo is also advancing its Prosperity copper-gold project situated 125 km southwest of Williams Lake. A previous feasibility study is being updated and other work is under way, including scoping studies and environmental assessment reports. Prosperity hosts measured and indicated resources totaling 1 billion tonnes grading 0.41 gram gold and 0.24% copper.

On the financial front, the company recently agreed to offer about US$30 million of five-year convertible bonds to qualified institutional buyers outside of North America, convertible into common shares. The net proceeds will be used to fund investments in producing assets.