Taseko eyes $800 million mine in B.C.

Vancouver – Eyeing growth in British Columbia, Taseko Mine (TKO-T, TGB-X) said it could cost as much as $800 million to develop a B.C. mine that will form a key building block in the company’s plan to join the ranks of mid-tier copper producers like Aur Resources (AUR-T).

A financing on that scale would make the Prosperity copper-gold property one of the largest private sector capital investment projects that B.C. has seen in the current decade, said Taseko spokesman Brian Bergot.

The Vancouver company is preparing an environmental assessment report for the Prosperity project, which Taseko officials were set to discuss during a conference call on Dec. 19, following the release of the company’s fiscal 2006 year end results.

With 2010 targeted as a potential startup date, Prosperity is expected to produce 100 million pounds of copper and 250,000 oz. gold in concentrates annually, creating full-time work for 500 miners.

A key challenge for the company will be coming up with a plan to compensate for the thousands of rainbow trout that will be lost from a nearby lake that Taseko may use to store waste rock and mine tailings while the mine is in production.

Scott Jones, general manager of project development with Taseko, said plan to deal with the loss of fish will be a key component of an environmental assessment report that is due to be completed by the end of April 2007.

"We will compensate by enhancing something that exists already or creating something new,” said Mr. Jones, adding that at this stage, he couldn’t be more specific.

Also on the agenda for discussion during Dec. 19 conference call will be a 40 per cent increase in reserves at the company’s flagship Gibraltar mine, which, like Prosperity, is also located in the Williams Lake area of south central B.C.

The company is also likely to offer an update on its progress in trying to acquire BC Metals (C-V). Taseko launched the $1.05-per-share bid, which expires on Dec. 29, in an effort to snap up BC Metals’ main asset, the Red Chris property in northwestern B.C.

If the bid succeeds, Red Chris could be another building block in Taseko’s expansion effort, producing 100 million pounds of copper and 75,000 oz. gold annually from a starter pit operation, possibly beginning as early as 2008, the company said.

Meanwhile, after adding another 74 million tonnes to previous estimates reported in Sept. 2005, the company said mineral reserves at Gibraltar now stand at 256.4 million tonnes, grading 0.32% copper and 0.01% molybdenum.

That’s sufficient to sustain the operation for at least 15 years after the company completes a $62 million mill expansion next year that is designed to raise the mine’s production rate by about 30% from current levels.

Betting it can continue to add reserves at Gibraltar, the company will continue to run two drill rigs on the property.

"We are confident that we will encounter new mineralization and further increase our reserves,” said Mr. Bergot.

Gibraltar was scheduled to produce a minimum of 50 million pounds of copper and 800,000 pounds of molybdenum during the fiscal year ended Sept. 30, 2006.