• Copper Production: 20 million pounds in Q2.
• Molybdenum Production: 185,000 pounds in Q2.
• C1 Operating Costs: USD 2.99 per pound in Q2.
• Realized Copper Price: Almost $4.50 per pound in Q2.
• Adjusted EBITDA: $71 million in Q2.
• Earnings from Mining Operations: $77 million in Q2.
• Adjusted Net Income: $30.5 million or $0.10 per share in Q2.
• GAAP Net Loss: $11 million in Q2.
• Sales Volumes: 23 million pounds of copper in Q2.
• Construction CapEx for Florence: USD 37 million in Q2, USD 55 million year-to-date.
• Total Site Spending at Gibraltar: $91 million in Q2.
• Cash Position: CAD 199 million at the end of Q2.
• Available Liquidity: Over $300 million, including an $80 million undrawn revolving credit facility.

• Warning! GuruFocus has detected 6 Warning Signs with TGB.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Taseko Mines Ltd (TGB) consolidated 100% ownership of the Gibraltar mine, enhancing its operational control and financial benefits.
• The company successfully completed the in-pit crusher relocation project, a significant $50 million undertaking, without any issues.
• Taseko Mines Ltd (TGB) reported strong financial performance with $71 million of adjusted EBITDA and $77 million of earnings from mining operations.
• The Florence project is advancing on schedule with construction activities ramping up and over 200 contractors on site.
• The company has secured new copper offtake agreements with extremely low treatment and refining charges, expected to reduce C1 costs significantly.

Negative Points

• Copper production was impacted by a planned downtime and an 18-day strike at the Gibraltar mine, resulting in a 25% reduction in total tonnes milled.
• Copper recoveries were slightly below plan due to inconsistent mill operating time and processing partially oxidized ore.
• The company's C1 operating costs increased to USD2.99 per pound in Q2 due to operational disruptions.
• Taseko Mines Ltd (TGB) posted a GAAP net loss of $11 million, influenced by several one-off accounting events.
• Total copper production for the year is expected to be slightly below original guidance, with a forecast of 110 million to 115 million pounds.

Q & A Highlights

Q: The recoveries at Gibraltar have been trending lower. Can you provide guidance on future recoveries? Are they impacted by the labor strike? A: Richard Tremblay, Chief Operating Officer: The recoveries have been impacted by the transition to the connector pit, which has higher degrees of oxidation. As we mine through this ore, recoveries should improve and align with past performance as we reach the heart of the ore zones.

Q: To achieve the guidance of 110 million to 115 million pounds, what should we assume for throughput and grade in the second half of the year? A: Richard Tremblay, Chief Operating Officer: We expect to push throughput over 85,000 tonnes a day for the next couple of quarters. Grades should remain consistent with the first half, and with both mills running well, there is potential upside on throughput.

Q: What are the expected cash costs for the SX/EW plant coming back online next year? A: Richard Tremblay, Chief Operating Officer: We anticipate cash costs to be around $2 per pound, similar to the rest of the operation.

Q: Regarding the potential US government tax credit for Florence, what is the expected level of credit? A: Stuart McDonald, President and CEO: We are looking at a potential $20 million credit based on a 6% tax credit rate. It could be up to five times that if the rate goes as high as 30%. We will have better guidance in Q3 after submitting the application.

Q: Was the new wage agreement at Gibraltar applicable to the entire workforce? Also, what is the outlook for inventory levels? A: Stuart McDonald, President and CEO: The new contract applies to roughly 550 unionized employees out of 750 total. Inventory levels are not unusually low, and we expect them to remain stable in the coming quarters.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.