TGB - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Miranda and I will be your conference operator today. At this time, I would like to welcome everyone to Taseko 2022 Q1 Earnings and Production Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator Mr. now conference. may begin you your Bergot,

Brian Bergot

issued Thank joining call. Taseko’s Welcome on everyone. our results The is close you for And thank was operational first and release website, our you, after available announcing market and Miranda. news financial yesterday quarter tasekomines.com. XXXX conference

Operations, today Taseko’s Officer, our and Bryce and call Richard Stuart CEO, of Tremblay. the On is McDonald; with Hamming; Senior me President Taseko’s Financial VP Chief

like remarks usual, questions our stated to and actual before the This outcome cause would we nature, management, As risks and will your subject that its is the information. remind outcome. opening that to by to comments into forward-looking our information, differ listeners by may from uncertainties to I get answers contain materially

and as information the I particular risk call. the use the first on to read accompanies risks we during that well note and to various quarter to company. MD&A would further will non-GAAP as you the these cautionary measures release, also encourage that like our I point factors out our news uncertainties, related For

can opening You open Stuart we reconciliations explanations session. question-and-answer lines in these turn for his call I’ll for phone investors analysts a remarks, to and will remarks. release. news now find the related to measures the and After regarding over

Stuart McDonald

about great last to optimistic remain a first prices over review Thank copper financial Okay. be so. joining with week the for for and it year you, the or We Brian. and Good quarter even XXXX our continues in results. Thanks today to copper morning, the ahead. very us pullback everyone. operating miners And environment

our was exceeded $X.XX with pound to and resulted carried in quarter, and million strong X the excess of per price realized combined $XX of cash first selling as ever the volumes volumes production able that were of inventory flow highest in move the pricing sales last from Sales year. million we adjusted share copper EBITDA we that actually of XX% by Gibraltar over our pounds from operations. had So $XX million of

which transitioned on So due this last will pit, to recently of of quarter, And production it was mining call. source a be anticipated was the lower Gibraltar copper operations that for the We've mainly the which ore and the year. primary to grades. we lower signaled remainder

zones first As is the deposit are upper always disjointed grade we in the of case with where lower of the ore quarter. and Gibraltar, at zones that's smaller the were

to advances mining benches, improve. and grade gradually deeper As quality the will ore

half much January quarter, first averaged we of had we averaged ore design in two as But carryover of Gibraltar XX,XXX. the from the day, then see XX,XXX XX,XXX over the year. with and In for second XX,XXX pit, to first the the from of was QX meant real which percentage coming mill we in to improvement behind, impacts a tons day, month the And February. and tons a months. issues over of a weather Mill production team for the stronger of the a year site The throughput throughput expect quarter. for We operating in start that slow capacity higher is in saw April. last below March, the weather significant the the focus a

on pit, of is which we're Gibraltar historical So ore the the we now benefit performance. realizing in based what softer expected

from new of are pit. them lower performance works we're team on we'd still that. the operations side the the where as ore the to with Recoveries Gibraltar new with So pleased very optimize like mill

which XXX Overall, of positive this of be clear also ore X% data changed. as course and improved copper to or mill, quality is still But have results of plus improves. guidance hasn't year is some production of a a I'd our We guidance our and far. the pounds so the recoveries project, like million improvement initiatives including expect number underway we in over analytics grade original minus showing that

the pressure the side, which most industry. historically The diesel On everyone in XX use mine. seeing on over at of liters represented a prices, total significant million else costs. cost impact is we're is inflationary our about the like XX% We year operating

production, US$X.XX So impact other was liter those of cost will about in grades is higher factors a were strip a a per note when capital and ago several to on that Grinding sales CX as for additional as quarters. revert allocation. fuel levels and drove pound copper important copper our What's talk to $X.XX operating the minute. to although costs. smaller. it will much per more has us. dollar including that coming There volumes, is Bryce media a around this year the impact is increases on cost That more costs increases quarter, liter, the big in other that that normal And production $X.XX from roughly today, a translates to about the one, pound

they has ratio our reserves at it at. mine mine longer the is copper At copper This XX was slightly nearly asset new to pound. mineral to now were life XXX are XXX, of $X.XX year. for quarter, For continue Subject come. the and mainly price the wish permit. XXX progress, life. flows some we're for we've XX today for to EPA waiting expect as prices At of the in costs, price XX the in in injection higher extending billion. mine great the towards process to details a we and past today's Adjusting period. a price, us further devoted a share today, provide running getting no years. to NPV we now. of than operating draft cost a per grade new input designs to It's two jumps I years, been were another using can result Gibraltar of position something close the the for the first also like more We've changes issue the a expecting Gibraltar input to new a fuel half has X or a updates quarter that's the the to restart. Switching announced could for a average strip ever more mine unfortunately and generate a the EPA billion. had. cost run average the Gibraltar, our that years since C$X.X is a permit offer XXX from pace we'll continue underground of pound, Florence The XXX public with back the pit but consensus from They're the NPV similar than CX assure to about we're and start around there of last reserve pound to up regular are the slower to of copper moving same at expected, for see copper range new is plant making from the life we're in remainder now as they for control we good a which years any many this us changed. haven't And cash issues comment that that they and previous And I

and can construction pre-construction the major meantime, other of advance project period. plus The the also quarter, we see prepare for In the ongoing expect The CapEx and permit to upfront In we're will reducing be US$XX get including volatile construction. to equipment site of a existing included aspects closely. and procurement we now. we long start project monitoring mitigating And inflation of public cash the budget, the increases million into first drilling costs. construction items plant project the UIC still the in delays around requirements other updating relatively – be the will it the other offset other risk China to large flows. to that contractor infrastructure including processing payments we conventional expenditures fund construction aspects the the expect world of issued the activities construction and then and we the lead to costs. to-date as liquidity are date, of and CapEx to locked XX And our costs, operating $XXX million, equipment shipping mine. continue market and construction is $XX we Florence of estimate. on on be continue components CapEx and We the to risk continue risk we which labor draft other prices. of able actually It's comment inflation. out of and million by get for be do incurred the project believe right reducing shortly, we is But And original closer of ports any further Gibraltar from the higher execution copper small to manageable we a over well expect about we've a without the items. now and copper major some But

agreement mention responsible that it As original mine XXXX Nations in work Lake, Gibraltar First a Nations a signing Lake, renewal wanted I on to first the mines that I quarter, And with also the note Williams February. attended final the ceremony of the was in for provides and and mine signed to beneficial achieve actually The and was economically framework how agreement. environmentally Williams the cooperation together and a participation First development. for

look and further strengthening to happy relationship. get we're forward So our done to that

with engagement at community Yellowhead new provincial the our advance prepare and and environmental Yellowhead our the we the continue as that our We for facilitated to BC dialogue project process also project, national work assessment project, our at continued government government. we project, our Tsilhqot'in the prosperity

create all a stakeholders. communities, indigenous a time ESG community all environment, Our long-term annual more employees, the which our and We're relations provide lot and senior on an our third forward our on in topics. as approach of finalizing of business essential move report, value spends will to other management our our sustainability to the detail element for process projects, it's for team lot and of

the look So questions. the to open to up now then this a can for And financials. Over that over of month. for I’ll that, review released call turn to call for quarter we And you Bryce report later the with Bryce. first be

Bryce Hamming

pound Thanks, good X.XXx, achieved of in the realized and $XXX in $X.XX copper years average $XX of XX I the XX discuss from of at per this it’s mine quarterly million million. pounds quarter second revenue Gibraltar further record contributed yesterday. at earnings We with since This operations morning, rate restart FX for sales of released we EBITDA financial price is ago. Gibraltar everyone. an and of will the and highest million. first Stuart earnings detail revenue adjusted at total This a million resulted results to of $XX have

our relative recent to site costs. quarters XXXX increased in margins by operating impacted Our other were

extent, mining more year, grinding It’s in capitalized $X stripping less last approximately to QX to by balance As finished spend deferred of some stripping a the site But other new the relative and for Stuart worth increased was million was increase and a to in IFRS million mentioned, table we to site prices. see like as driven this the substantially total probably costs to on we’ve and quarter-over-quarter the noting compare total capitalized of had which diesel pound. capitalized in difference is And simply related allocated oil was XXXX, sheet steel a significantly site to that $X.XX stripping the which did show included media, by easily phase rising difference costs fleet QX that our cost including MD&A of mining operating as total of QX costs, costs price. quarter-over-quarter. lesser we our related cost to in a Pollyanna, accounting we current $X quarter a site similar compared sales mining

of of million remainder quarterly for diesel or total expect We assuming the at consistent stripping for capitalized costs, approximately our XX% elevated to including that share year, levels. site quarter prices per remain be operating share $XX current these the

QX. exceeded on by a have We arises basis almost XX% pound also per in our higher production volume costs that sales naturally

normal last events flooding and that due higher at recall pounds levels. were inventory Southern year, BC end brought You’ll the more fall. X of last additional to million the our We inventories the inventory back sold an concentrated in in extreme our finished of to quarter

attributed offsite cost $X.XX tied sales charges, and are copper the variance not lower which the comprised of volumes volumes to Our CX production. half to production

additional due the to by higher benefited incurred inventory quarter, units also of where that explains Gibraltar million. given costs excess life flow million from of updated quarter, depreciation this was quarter-over-quarter our from the were the March at we As EBITDA cash the new lower end mine reserve quarterly published this $XX operations and for our last million extent and in $X of $XX decreased than production. Earnings

moly higher, relate unrealized loss we $X.XX copper that Derivatives to with $X.XX. copper depreciation unrealized been $X.X the copper March of the our entered have lower a expect the strong rates the the we of With quarter. on due that of loss in per moly contracts ore. earnings these this moly that high secure around new eliminated a still minimum for related pound reversed. copper into grades lower a per Lower timing XX% really expired $X for price due level this an most between the out the in And this year by for decrease million was covers then, price, was offset the the pound share only collar pound, collar quarter ceiling But per or as in at a has to mostly hovered pit at remainder would’ve $X.XX since lower. impacting pounds of of XX. and price is Gibraltar for this XXX,XXX of had the a the million of that quarter for the quarter. penny the We And been but and quarter. at end money We derivatives production in GAAP $XX of adjusted also of cost of copper the $XX on quarter the which revenue price balance contracts earnings closing the and produced partially copper to was Taseko and the year.

Our statement Gibraltar February our the flow million Gibraltar service payment. that at fund operating cash highlights cash CapEx and debt $XX debt continue from service, flow our and to included bond for interest

quarter this Copper, equipment to to investment for overall lead decreased total the relates this primarily facility. And continuing included quarter. SX expenditures $XX are million at due Florence continued long position purchases cash development the the Our commercial that that in which

are are are fund within our our for the Florence be cash equipment we our and with April was plans. exciting we ancillary means. in the now SX/EW beginning supportive and of and copper to strong We $XXX of to Thank in million. the prices options Florence with in also the finished to We to At million continue balance see. is receive which to with shipments quarter liquidity balance current sheet, site, party strategic back to position I’ll questions. a of fully own financing cost our turn where That considering any capital still financing synergies operator said, you. the it $XXX the

Operator

Barclays. First Instructions] with be Ed go will [Operator you. question Thank coming from Brooker ahead. Please

Ed Brooker

for Hey everybody. questions the this morning. Thanks taking

able Previously EPA you the would’ve and them. So go giving been get comment them – to taking backlog there the into draft? just kind we longer but to been COVID I worked holding for draft know UIC that to the through wanted the than it guess a able was get period. may of But was I imagine give what I us up expected is would’ve that I taking and and this, to that not is for well, reason ask I you you be

case kind your So on your just get timeline? wanted that to then scenario thoughts of and best

Richard Tremblay

be getting Good morning, the processes public It’s Richard message continues the get through same. Yes. into to causing of the just comment administrative specific into to nothing Really not and it’s to able period. the the arranged their launch that’s from Tremblay. kind Ed, going EPA things There’s period. comment public them be final to

specific everything them, things those levels talk unfortunately, – a like about challenge that. that Being are they’re So, occur. a from of pointing manpower no there’s and providing of or kind but that normal yes, for nothing bit stuff to

advancing. soon, but of, continue slow, expect terms I which timing start, would to is quite get in And moment period going is very public now process to they’ve the us. comment any giving when the the committed notification to exactly will Just on

Ed Brooker

doubters received some reports some your the helpful. to that come want awards Got awards the for have your some disconnect environmental out news in of of Florence just being hazardous. get thoughts environmental I issues think excited some I ESG then on nominations getting it. That’s it Arizona. the And was versus for see that I saw report – to mining nominations too. that kind practices between with

Stuart McDonald

It’s there our many left. can in Really here. Stuart one. view aren’t McDonald that I doubters take

that there at XX worked history The operated back perhaps and facility years, through some questions test look over project you or If the XX years, the was XX back last town about for obviously going two had we’ve the council. hearing comment if that. opposition a overwhelmingly permitting from and Really we some And we And state commentary. it APP public a years was in back positive XXXX, when has period. through look big you a process, went contributor been we our that. public to the

I at there hearing. think the whole comment negative only was one

with very we’re we’re work of the happy environmental reflective the project, award support that for So the we the have site. doing is the at good

we to project. so, look And the getting on getting yes, going just the permit and forward

Ed Brooker

And one the Thanks. extension me and on for Gibraltar. of more congrats, then

then increased your not with Yellowhead So life, on that and in longer-term probably in the thoughts plans the project. the mine the Florence does that all, maybe short funding term, improved your of and but or affect at for NPV, confidence maybe

Stuart McDonald

Ed. funding Gibraltar the Yellowhead? were reserve referring the Sorry, there, understand to at question didn’t or quite the you the I

Ed Brooker

context? mine on funding how Just life, Gibraltar just increasing Yellowhead you’re improvement reserve on and and over or the that over at the looking time on the of NPV thoughts in

Stuart McDonald

four to a a mine And years close to and XX-year back ago, of we extension XX what life history, we is right? did. XXXX, what mean, the in when XX had we’ve shown I when think we we value GDP long years it, five-year we And I And just extension reserve at Gibraltar asset, look we we restarted or a I had the XX in at over life. Yes. time about a life. GDPX we you was a later, think, if still with had have have when mine then or XX year vote, that today, did the

long value life in depreciating. does and prices actually the depreciate. So, It’s growing not copper is not you over NPV time value it’s as of there. that great, see And still assets with

These well. rare. So as a great that Yellowhead and And to a work asset has these do are But built. yes, asset the is are built to is to in potential we gap of some think a needs unique so project get type assets financed Yellowhead permitting. that it’s that on can we coming well. be and copper And got years. as in We’ve think supply fill Gibraltar valuable the

that think will when I get a very will be Yellowhead an Gibraltar like position we the place certainly on So good option of a take we be project company running, financially interested to asset Florence to as is in and in well. that’s And going for a type JV potentially. funding that and as different be partners well. And in

but – one. that make we’ve to on decisions got few have So any years we a before

Ed Brooker

Got you. it. Thank

Operator

coming ahead. Your next Please Terentiew be Stifel. Alex go question will from with

Alex Terentiew

some guys. Florence the expectations? the use you delays been move an can is, spending? recourse that morning spending there now on going the of any couple I question think get spending capital are to And sort, or can first. material give kind you to project. will on costs questions draft extent whole just there of the forward A the CapEx some second process that as good effectively you when spending prior how question – sort should can I Hey, you’ve confidence be it, to us appreciate can money UIC guess you and relative any the that But the looking of with take on you’re to that on But is, update that is there of I that you your refund going recoup forward. I the you’re

Stuart McDonald

would of relate to yes, Stuart Sure. and spending for most mean, the made that about major million we’ve done total, components it. XX as Yes, here. said, question. we’ve It’s We’ve Alex, the committed vast it’s in up our of thanks commitments the notes for be I most Ed, sorry, U.S. And I there, committed, of bulk SX/EW we’ve the the plant. that and in –

Yes. And equipment. value, plants site that get to for So it that but that’s comes some it on Arizona. be specialized detailed assume construction. engineering in our It’s route going I mean, is has to now And ready out designed into our work specifically. it’s I been might when sale done. what of we equipment the have we’ve

it’s expenditures and – our spending sign get said, you we approved it’s wouldn’t I and of, unless move So we to right, that Board believe, were have be we’re that confident wouldn’t permit as very forward. those money a you’re the going

to ready get we’re yes, going. So

Alex Terentiew

how Okay. And I just on so cost, mean, then they’re far. tracking

Stuart McDonald

we’re study. line money in it’s essentially The Yes. the the have the with the in – on essentially budget. cost of piece, XX XXXX we that essentially with It’s committed, feasibility numbers on

So, which like give and that we inflation numbers. But on to the to any Arizona, contractors some in and we as said, hot demand drilling as are is high relates things more where we that in that. haven’t costs expecting on the on of as we some well seen committed comments, closer, inflation yes, higher we I in specifics we can see get to well, market And are expect my yet. pieces labor pretty haven’t some those pieces. But that

Alex Terentiew

one to as guess going the we you is, then low to for expect I Gibraltar, And or maybe just moly can understand forward? mean, grades that per that for I moly well? past? that XXX,XXX pounds or but copper question – I the Is moly great. did sorry, in grades reasonable so Okay, question a get quarter back the of saw number impact

Richard Tremblay

moly Gibraltar lower bit property, the as is side the of the side to grade East bit West a the essentially lower property. pit Gibraltar move goes in the – the is you the is lower, little a – so Yes, than moly grade of

deeper into past we pit. zones through improvements quarter So with we’ll see maybe – grades mine the this into slight similar the as saw we that Gibraltar some

Alex Terentiew

it me. Thank you. That’s for Okay.

Operator

go to question from next Craig Securities. Hutchison be ahead. coming going Please Your TD Instructions] from is [Operator

Craig Hutchison

guys. morning questions good Hey, moly on as Actually well.

the if the is of QX, as are So sort is of just kind we model of in a fair order pounds million or same grades this year, we estimate? X assuming production that

Richard Tremblay

but less in No, range production pound range. XXXX, than million mid more we’ll probably X.X to see of million the X

Craig Hutchison

a at themselves, then guys on can or in expect copper follow-up just question grades that grades to Gibraltar, grades towards And kind Okay. in reserve to we of QX? likely or you more back QX, is QX going happen shift

Richard Tremblay

Yes, grades reserve but be QX, it’s QX. in more back of reserve going second more we’ll the levels. some kind to to half of levels QX, see see return not the year. We’ll towards improvements, grade the

Craig Hutchison

operating And design you or milling just confident sort the balance of fact the fairly you be your year? softer the for guys can that of rate given at

Richard Tremblay

in Stuart with able any we’ve change. still going don’t his maintain been we’re to as the the – comments, at quite to see run that’s we Yes, mill pleased and reason performance mentioned throughputs optimum and

Craig Hutchison

guys. Thanks, perfect. Okay,

Operator

at ahead. questions Please time. go further no are this There

Stuart McDonald

in you dialing questions. quarter for for early your will August. everyone to Thanks in we Okay. next talk and And

So thanks again. Bye now.

Operator

and conference this today. disconnect lines. that your participating Ladies for you ask you please your and call for We concludes thank gentlemen,

Taseko Mines Limited (TGB) 5 May 222022 Q1 Earnings call transcript