Q2 2025 Taseko Mines Ltd Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the the circle Minds 2025, second quarter earnings conference call.
At this time, all participants are in a listen-only mode.
We will conduct a question and answer session later, and instructions will be given at that time. As a reminder, this call is being recorded with that. I will turn the call over to Mr. Brian, Barrow sir, you may begin
Thank you, Janine. Welcome, everyone, and thank you for joining to see Taseko's second quarter 2025 conference call.
the news release and Regulatory filing announcing our financial and operational results was issued yesterday after market close and is available on our website at toso minds.com and on Cedar Plus
On the call today is to see seos president and CEO Stuart MacDonald to seek his Chief Financial Officer. Bye having. And our coo, Richard Troy
As usual before we get into opening remarks by management, I would like to remind our listeners that our comments and answers to your questions will contain forward-looking information. And this information via its nature is subject to risks and uncertainties.
As such actual results, May differ, materially from the views expressed today for further information on these risks and uncertainties, I encourage you to read the cautionary. Note that accompanies our second quarter mdna and the related news, releases as well as the risk factors particular to our company, these documents can be found on our website and also on Cedar Plus
I would also like to point out that we will use various non-gaap measures during the call. You can find explanations and reconciliations regarding these measures in the related news, release and finally, all dollar amounts we will discuss today are in Canadian dollars and unless otherwise specified.
Following opening remarks will open the phone lines to analysts and investors for questions. I will now turn the call over to remarks
Okay. Thank you, Brian. And welcome everyone to our second quarter results conference call.
I'll start with an update on our operations and projects and then pass it to Bryce for a closer look at our Q2 financials.
Um, it's been a busy few months for us and generally, I think we're making good progress across our business with a few significant Milestones achieved at our projects recently.
It's also been an interesting time in the copper markets globally and the picture for us. Copper tariffs is now clearer I'll come back to that topic in a minute but I want to start with a
Gibraltar update. So as noted in our last quarter's earning release, our mining rates at Gibraltar were impacted earlier this year by challenging conditions, in the upper benches of the connector pit.
In the second quarter, mining Advanced into better ground and mine. Tonnages increased dramatically to a total of 30 million tons for the quarter.
That's 31% higher than q1. And in fact, the best mining quarter in the last 4 years.
As a result, we continue to expect a strong rebound in production in Q3, and then even better production in Q4, continuing into 2026.
In June and July, production was more than 35% higher than in April and May as we started to access this higher grade ore in the connector pit.
Second quarter copper production was 20 million pounds, which was the same as the prior quarter and in line with plan.
Copper grades were 0.20% and recoveries were 63%.
We're through the worst of the low-quality ore and steadily transitioning into better grades with less oxidation.
Which will also result in higher recoveries.
Molly grades and recoveries are also expected to improve significantly in the second half.
Total cash costs are C1 reported at 314 per pound in the second quarter will also decline in the second half as production levels. Rise.
We reported copper cathode production at Gibraltar in the second quarter as well as leeching operations, commenced on 1 of the 2 leech pads.
And the Gibraltar sxcw plant was restarted in late, May
after a quick Roundup, the plant operated at steady state for most of June and July.
Up until a couple of days ago, a transformer issue took the plant down. That issue was just diagnosed yesterday afternoon, and we expect 6 to 8 weeks of downtime for that plant.
It's a short-term issue with less than 1 million pounds of production impact.
On the plus side.
We've continued to see positive or reconciliations in the connector pit, the more oxide or the expected.
Turning over to Florence. Now as we highlighted with our recent construction update, the project continues to advance smoothly
on schedule, and with costs continuing to track in line with our previous guidance,
Really happy with the work that's being done by our capital projects team and the key contractors on site.
With the overall project completion over 90%.
Activities will soon be shifting to commissioning Key Systems such as the electrical substation, which was completed last month. Our now, starting to be released from the construction team and placed under the control of our growing operations team.
All of the wellfield drilling that was planted for the construction. Phase is now complete and electrical and pumping equipment is being installed into the wells.
The next key milestone will be the initial injection of solutions, which we were targeting to achieve in September.
And this would allow enough time to acidify the well, field, and produce first copper cathode before the end of the year.
Through the first 18 months, construction capital expenditures are tracking in line with the updated guidance we issued last year.
At the end of the quarter 239 million, us has been incurred leaving only about 10% of the total Capital outstanding.
The team is now working on the detailed operating plans for the ramp up next year, which will require additional Wells to be drilled.
To get us to the up to the design capacity for the plant of 85 million pounds per year.
So all this to say, America's next new copper mine is advancing smoothly and nearing completion.
We're not there yet, still a lot of work to be done and we're entering a critical phase here over the next few months to get the startup.
Obviously the recent copper tariff news. Has driven a lot of volatility in the comex copper price.
with Metal Traders, and other Financial speculators trading into the comx market,
And then rapidly exiting as the comix premium disappeared with the Tariff announcement last week.
Despite all the headlines, the lme copper price, which is the global Benchmark has remained, stable and strong.
For the US copper Market, the current Administration is clearly incentivizing us-based. Manufacturing of finished Copper products.
This is a very positive development for Florence, which will soon become one of the few U.S.-based suppliers of refined copper.
The US will remain a net importer of cathode in the coming years and our Arizona based operation will have a significant Geographic advantage, in delivering refined metal to the growing us manufacturing base.
And just a reminder that a copper price of 375 us per pound. That's the price used on our last technical report.
Florence has an after tax npv of 930 million us.
At today's price of around $440 per pound, the NPV is closer to $1.2 to $1.3 billion.
That's not yet reflected into seco's Equity but we're working hard to unlock that value over the next year.
In the longer term to Seiko has other growth Assets in our portfolio. And we've had some significant developments on those projects in recent months, which I'll touch on now.
Uh, the new Prosperity agreement announced in June was a very important milestone for the company.
and I think it came as a surprise to the market, even though we've been making good progress towards an agreement, over the previous year,
The dialogue actually started about 5 years earlier. So it was certainly a lengthy process and I want to recognize the commitment and perseverance of both the province of BC and that you'll go to national government to complete that deal in June.
The agreement allows all 3 parties to turn the page on a historical conflict and move forward in a constructive way.
It ends years of litigation while providing certainty as to how the significant copper gold deposit at new Prosperity could be developed in the future.
To Seco, is received a 75 million cash payment from BC in exchange for a 22.5% equity interest in the project.
Which has been placed into a trust for the Sootin Nation.
The trust will only transfer this interest if the silken consent to pursue mineral development on the property.
BC. And the soot team will now enter into a land. Use planning process.
And so, the door remains open to Future mind development, but only with the consent of the nation.
To seek a retains 77.5% ownership of the new Prosperity mineral rights and we can divest some or all of that interest at any time.
I believe if we're patient, there will be a further opportunity down the road to realize significant value from this world class asset.
Technical study with significantly improved economics.
As well as the formal commencement of the environmental assessment process for the project.
The new technical report includes updated capex. Operating costs and long-term medical price assumptions and describes a mine that would produce 178 million pounds of copper annually.
Over a 25 year. Mine life at a cash cost of around $1.90 per pound average.
At 425 copper. The project has an npv of 2 billion Canadian dollars and an after tax irr of 21%.
That's not bad for a project that we acquired for only 16 million dollars, just a few years ago.
When you consider the production profile, the mine life and the project economics.
Yellow had Stacks up very well against all the other North American Cooperative development projects.
And we will continue to de-risk the project as it moves through the permitting process.
In early July, the initial project description was accepted by the BC Environmental Assessment Office and the Impact Assessment Agency of Canada.
Project has also advancing through the early stages of the simp, First Nations assessment process.
And we continue to have an active and ongoing dialogue with them.
We've also held a number of well-attended, open houses and local communities with more planned as part of the EA process.
We have a few years of permitting and engineering work ahead of us at Yellowhead and will continue to maintain a disciplined approach to project spending during that period.
So we've got lots on the go and exciting times ahead for our North American copper business.
now I'll wrap it up there, I want to thank all of our shareholders for their ongoing support
And I'll now pass a call over to Bryce for a financial update and uh, we can then open the up the line for questions following that over to you Bryce.
Thank you Stuart, I'll provide some additional details on the financial aspects of the second quarter.
Sales in the second quarter totaled 19 million pounds at an average realized price of $432 per pound, generating revenue of $116 million for Taseko. Lower sales and a stronger Canadian dollar contributed to the lower quarter-over-quarter revenue.
net income for the quarter was 22 million or 7 cents per share. And that's mainly driven by unrealized Foreign Exchange gain on our US dollar, denominated debt, uh, with the strengthening Canadian dollar. Um, at quarter end.
On an adjusted earnings basis, we posted a net loss of $13 million, or 44 cents loss per share.
As Stuart mentioned, mining rates at Gibraltar in the second quarter were significantly higher than in the first quarter. This increase totaled $117 million. Despite the increase in mining rates, the strip ratio was lower as a result of a larger portion of the mine's tons being oxide.
And that oxide ore was placed on the Heap bleach pads.
Stuart mentioned the positive or reconciliations. We've been seeing
Um, the capitalized strip for the quarter was slightly lower; it was $31 million and it remained elevated as waste tons to the sulfide ore tons were above the average strip ratio for the Connector pit. We expect that strip ratio to decline significantly in the second half of the year, now that we have opened up access to the ore in Connector.
Costs on a per pound basis for the quarter were 314 per pound.
Um that's based on copper produced this was higher than the previous quarter and it was due to lower capitalized stripping and lower Molly production. It is also impacted by costs associated with the oxide ore that are added to the heat bleach pads, which is left inside. Operating costs for which, um, production comes in future periods. So it skews that ratio
Probably about 40 cents.
Adjusted ibaad in the second quarter was 17 million and was impacted by lower production and sales volumes and higher costs associated with the mid-grade stock piles.
Uh, which have a higher cost on a per pound basis.
At Florence, we incurred 33 million of construction costs in the second quarter as construction has now passed Peak spend to date.
Uh, 239 million has been incurred on the construction of the commercial production facility, which is still tracking towards our revised estimate and guidance.
Uh, which was at 232 million, uh, plus uh, up to 15%. So we're
Uh, heading towards around 265 million, uh, for total construction costs.
Is this current liquidity of just under 200 million after factoring in the 55 million that we've drawn?
Revolving credit facility. Um, that's with National Bank. Anding
Our quarter and cash balance. Also includes that 75 million payment from the BC government. Um as part of the new Prosperity agreement that we reached in June
And just a reminder of our copper price protection uh in light of some of the volatility that we've seen uh we still have in place the minimum price of $4 per pound and that's protecting 54 million pounds of production for the balance of 2025. So we are uh actively looking to extend our price protection into 2026 and we've been
Uh watching The Copper Market closely looking for opportunities to fix that at a reasonable price uh and that's primarily to cover the wrap-up of Florence that we have into the first half of next year.
So with that I'll turn it over to the operator for any questions. Thank you.
Ladies and gentlemen, at this.
Time. We will be conducting a question and answer session.
To ask a question. Please press star. Followed by the number 1 on your touchtone phone and to reach all your questions. Please press star 1 again.
Please give us a moment while we compile the QA roster.
Our question comes from the line of Craig Aches from Taseko Mines. Your line is open.
Hi, good morning, guys.
If you could give us some, I wonder if you guys could give us some commentary on what you're seeing in terms of the grades here for Q3.
Gibraltar. And and also the recoveries.
um,
Generally speaking Craig, we're expecting both grade and Recovery um to step up meaningfully.
in Q3, um, you know, back towards
Reserve grade averages or better and then probably better than better than Reserve grade in Q4. So,
um yeah that's that's probably as much as guidance as we'd want to give on a quarterly basis, but definitely, we're seeing now getting getting deeper into the pit, higher quality or
Um, and higher grade or so. That's, that's a positive for the second half and we should see that.
Should see that level, at least, maybe not the Q4 level, but but, you know, the second half, averages, kind of continue into, um, the first few quarters of 2026 as well. So, we shouldn't see any of the, any more of the, uh,
Drop offs that we've had in the last couple quarters.
Is the higher oxide material that you're seeing in the connector pit? Is that create a risk for recoveries here, especially in Q3, or do you feel like you're through that and your recoveries are back up into the
High 700s or low 80s.
Yeah, it's it's we're seeing it, you know, the oxide oxidation. It's not a not a binary thing, it's not black or white, it definitely a transition. Um, you know, we're we're pretty confident in our projections. Um, got a good.
Good database of of uh you know, good geological database and we're seeing the higher grade. We're seeing flashes of the higher grade, a better quality, or now, and certainly expecting much more of that in the coming weeks and months. So,
Okay, great. And then I'm flooring. So, you guys have mentioned on pass calls, you're you're targeting, I think, production somewhere in the range of 40 to 50 million pounds. Next year, if I recall correctly, is that, is that still the case or do I have that wrong?
I I, you know, I think the technical report, you're 1 of the technical report was around 40 million pounds. Um,
So that's the number that we have out that technical report number is what what we have out there so far? Um, I think as I mentioned in my remarks,
We are working through a detailed operating plan. Now, going well by well and doing projections of how the ramp up is going to go. Um, so I expect as we get closer to Startup in the fall, I'll have more more specific guidance. We can talk about 2026, but yeah, what, what we're seeing so at this point is effectively what we have in the technical report.
Okay, maybe one last question for me. What kind of pricing are you guys seeing right now on sulfuric acid?
Uh, Richard, do you want to?
Pass it. Yeah, yeah, yeah. Not a problem. Yeah, we're um, we, uh, we're seeing in the low 200 range for sulfuric acid right now.
Conversation with a number of different suppliers and actually have secured supply for this year, from 2 different suppliers. So
we're seeing in that low 200 range.
Okay.
Great thing. Thanks guys.
Thanks Craig. Thank you.
Again to ask a question, please press star, followed by the number 1 on your touchtone keypad.
Our question comes from the line of Duncan. Hey, from panure Liberal room, sir. Your line is open.
Yep. Thanks. Hi guys. Um,
A couple of questions from me just on the capital cost. What, um, should we expect any more? Um, capitalized, stripping in Q3?
Um, first of all, Gibraltar and then second of all at Florence is the, the remaining spend there, is that going to be weighted to queue 3, and it will drop off in Q4, or will there be a sort of, um, uh, reasonable? Um, will it be the same across those 2 quarters?
Yeah, Duncan, yeah. I know, it's definitely, uh, the remaining spender Florence. Definitely waited to Q3, um, Q4 is more more commissioning and shifting into operations. Um, so so yeah. You shouldn't see much Capital left required. After the end of Q3, there's a, there's always a bit of a, a lag at when you, if you're talking about,
Cash flow, right? Because we don't pay our bills, you know, immediately. But in terms of capex incurred, mostly we'll be done at the end of Q3 as far as.
um, at Gibraltar
Um Capital strip know you thought we'll really drop off in the second half. Um you know, we are really going to be
Mostly an or operating below the average strip grade. So I wouldn't expect to see much or any Capital strip uh, in the second half.
Yeah. Okay. Thanks and just just quickly on the on, I missed what you said about the S60 plant. At the beginning, you you got some downtime their, do you, how much are you thinking production for, for, um, for the rest of the year? And into next year from that?
Um, yeah. Like we, I mean, we're seeing it. This is potentially 6 to 8 weeks of downtime. It's just an issue that just arose, actually, it was just diagnosed really yesterday. Um, so that's, you know, less than a million pounds of of production impact here, but obviously, mostly will be in, in Q3. Um,
That operation, you know, the the guidance, we've, we talked about that operation in the past producing, you know, 3 or 4 million pounds a year.
It it is a seasonal operation. So it'll operate until um, November December, and then, and then shut down for the winter in q1 next year.
um,
the other the other thing that's happening at at the SX at the operation is we actually have 2 leech pads and only 1 of them.
Has been activated so far. In the second pad will come online.
Um in 2026. So you'll see us a little step up in the production from that operation next year. Maybe 4 or 5 million pounds is next year.
That's how we're looking at it.
Okay. All right. Thank you. Thank you.
Thank you. There are no further questions at this time. I will now turn the call over to the management for closing remarks.
Okay. Thanks everyone. Thanks operator. And uh,
Thank you all for dialing in to our, our Q2 earnings call and we'll talk to you again. Uh, next quarter. Thanks again. Bye.
thank you for joining the call today, may now disconnect