UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
CIK # 878518
as at February 13, 2007
TASEKO MINES LIMITED
800 West Pender Street, Suite 1020
Vancouver , British Columbia
Canada V6C 2V6
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F...X.... Form 40-F.........
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper
of a Form 6-K if submitted solely to provide an attached annual report to
security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained in
this Form, the registrant is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes ..... No .....
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82- ________
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
By: /s/ Jeffrey R. Mason
Director and Chief Financial Officer
Date: February 13, 2007
Print the name and title of the signing officer under his signature.
---
1020
-800 W Pender St .
Vancouver BC
Canada V6C 2V6
Tel 604 684 -6365
Fax 604 684 -8092
Toll Free 1 800 667 -2114
www.tasekomines.com
TASEKO ANNOUNCES FIRST QUARTER RESULTS FOR FISCAL 2007
February 13, 2007, Vancouver, BC - Taseko Mines Limited ("Taseko" or the "Company") (TSX: TKO; AMEX: TGB) announces its financial results for the quarter ending December 31, 2006, including production and sales for the Gibraltar Mine located near Williams Lake in south-central British Columbia. All dollar amounts are stated in Canadian currency unless otherwise indicated.
Overview & Highlights
Taseko's
cash flow from operations was $25.5 million and earnings were $11.7 million
or $0.09 per share ($0.08 per share fully diluted) for the quarter ended
December 31, 2006.
As can be seen in the table below, cash flow from operations for the quarter
increased by $28.6 million, and net earnings increased by $5.0 million,
or 75%, over the comparable period in the previous fiscal year.
|
Quarter
Ended December 31, 2006 |
Quarter
Ended December 31, 2005 |
Revenue |
$56.4 million |
$41.3 million |
Copper1 |
$53.1 million |
$36.2 million |
Molybdenum1 |
$3.3 million |
$5.1 million |
Cash Flow2 |
$25.5 million |
($3.1) million |
Cash Flow per Share (basic) |
$0.20 |
($0.03) |
Earnings |
$11.7 million |
$6.7 million |
Earnings per share (basic) |
$0.09 |
$0.06 |
1
Average realized price for sale of copper was US$2.77 per pound and for molybdenum
was US$23.70 per pound.
2 Cash
flow and cash flow per share are numbers used by the Company to assess its
performance. They are not terms recognized under generally accepted accounting
principles. Cash flow is defined as cash flow from operations including net
change in working capital balances and cash flow per share is the same measure
divided by the number of common shares outstanding during the period.
|
Q1 - Fiscal 2007 |
Q1 - Fiscal 2006 |
Total tons mined (millions)1 |
7.7 |
10.1 |
Tons of ore milled (millions) |
2.4 |
3.0 |
Stripping ratio |
2.2 |
2.3 |
Copper grade (%) |
0.284 |
0.286 |
Molybdenum grade (%MoS 2) |
0.016 |
0.014 |
Copper recovery (%) |
77.3 |
78.1 |
Molybdenum recovery (%) |
26.2 |
42.9 |
Copper production (millions lb) |
10.6 |
13.4 |
Molybdenum production (thousands lb) |
120 |
223 |
Copper production costs, net of by-product credits2, per lb of copper |
US$1.19 |
US$1.10 |
Off property costs for transport, treatment (smelting & refining) & sales per lb of copper |
US$0.33 |
US$0.33 |
Total cash costs of production per lb of copper |
US$1.52 |
US$1.43 |
Gibraltar Mineral Reserves at October 1, 2006 at 0.20% Cu cut-off |
|||||
Category |
Tons (millions) |
Cu (%) |
Mo (%) |
Cu (billions lb) |
Mo (millions lb) |
Proven Probable |
217.8 38.6 |
0.320 0.305 |
0.010 0.011 |
1.2 0.2 |
17.6 3.4 |
Total |
256.4 |
0.318 |
0.010 |
1.4 |
21.0 |
The resource and reserve
estimation was completed by Gibraltar mine staff under the supervision of
Ian S. Thompson, P. Eng., Superintendent of Engineering and a Qualified
Person under National Instrument 43-101. The estimates, tabulated below,
are based on long term metal prices of US$1.50/lb for copper and US$8.00/lb
for molybdenum and a foreign exchange of C$0.88 per US dollar.
Under present mine operating parameters of 36,000 tons milled per day, these
additional reserves extend the mine life to 21 years. Upon completion of
the upgrade to the concentrator to 46,000 tons per day in December 2007,
the Gibraltar mine life would be approximately 15 years.
In addition to the above reserves, the mineral resources are estimated to
be:
Gibraltar Mineral Resources at 0.16% to 0.20% Cu cut-off |
|||
Category |
Tons (millions) |
Cu (%) |
Mo (%) |
Measured Indicated |
414 197 |
0.284 0.272 |
0.008 0.007 |
Total |
611 |
0.280 |
0.008 |
Prosperity Mineral Reserves at $4.00 Net Smelter Return/tonne cut-off |
|||||
Category |
Tonnes (millions) |
Au (g/t) |
Cu (%) |
Au (millions oz) |
Cu (billions lb) |
Proven Probable |
280 200 |
0.47 0.36 |
0.25 0.18 |
2.9 1.6 |
1.3 0.7 |
Total |
480 |
0.43 |
0.22 |
4.5 |
2.0 |
The reserve estimate takes into consideration all geologic, mining, milling, and economic factors, and is stated according to Canadian standards (NI 43-101). (Under US standards no reserve declaration is possible until a full feasibility study is completed and financing and permits are acquired.)
The Proven and Probable Reserves
above are included in the estimated Measured and Indicated Mineral Resources
which, at a 0.14% copper-cut-off, are 1.0 billion tonnes grading 0.41 g/t
gold and 0.24% copper. Further details are provided in Taseko News release
dated January 10, 2007.
The resource and reserve estimation was reviewed by Scott Jones, P.Eng.,
General Manager of Project Development for Taseko and a Qualified Person
under National Instrument 43-101. Mr. Jones has verified the methods used
to determine grade and tonnage in the geological model, reviewed the long
range mine plan, and directed the updated economic evaluation. The NI 43-101
technical report documenting these results is will be filed by February
24, 2007.
Corporate Development
From November 2006 to February 12, 2007 Taseko purchased an aggregate of approximately
3.3 million shares of bcMetals Corp., a publicly traded company, at an average
price of $1.17 per share in connection with an unsuccessful take-over bid
for bcMetals. Taseko intends to liquidate these shares in the
near future.
Taseko has agreed to subscribe for 7.3 million of Units of Continental Minerals
Corporation ("Continental") at $1.65 per Unit by exercise of a participation
right granted in conjunction with an existing Continental note held by Taseko.
This brings Taseko's aggregate holdings of Continental to 7,827,796
shares (6.9% of Continental's outstanding shares) and 7,318,182 warrants.
The note is due for repayment no later than August 31, 2007 and may be repaid
earlier in accordance with its terms.
Taseko will continue to actively pursue other investments and strategic
alliances that would be accretive to the value of the Company.
Financial Results
The Company's pre-tax earnings for the three months ended December 31,
2006 increased to $17.4 million, compared to $6.7 million for the three
months ended December 31, 2005. The increase in pre-tax earnings is due
mainly to higher sales of copper and molybdenum and higher realized metal
prices for sales during the quarter compared to the same period in the prior
year. The Company's after-tax earnings for the quarter increased to
$11.7 million, compared to $6.7 million for the same period in fiscal 2006.
The Company reported revenues of $56.4 million for the quarter, compared
to $41.3 million in the first quarter of the prior year. Revenues increased
due to significantly higher copper prices and more pounds of copper sold.
Revenues from copper concentrate sales were $53.2 million (2006 - $36.2
million) and from molybdenum concentrate sales were $3.3 million (2006 -
$5.1 million).
Cost of sales for the quarter of fiscal 2007 was $36.6 million, compared
to $32.3 million for the same period in fiscal 2006. Costs of sales consists
of total production cost of $18.1 million (2006 - $22.5 million) for
metal produced and sold during the quarter, plus a drawdown of concentrate
inventory of $12.7 million (2006 - $3.9 million); silver credits of
$0.5 million (2006 - $0.4 million), and transportation and treatment
costs of $6.3 million (2006 - $6.3 million).
Amortization expense for the quarter was $0.4 million compared to $0.8 million
for the same period in fiscal 2006. The decrease was the result of a change
in the recoverable reserves and expected mine life at Gibraltar. Mining
and milling assets are amortized using the units of production method based
on tons mined and milled divided by the estimated tonnage to be recovered
in the mine plan. An increase in recoverable reserves results in higher
estimated tonnage to be recovered in the mine plan and hence, a reduced
annual amortization rate.
Exploration expenses increased to $1.9 million in the first three months
of fiscal 2007, compared to $0.3 million for the same period in fiscal 2006,
mainly related to a higher level of activity on the Prosperity project,
including preparation of an environmental impact assessment and an updated
feasibility study. During the quarter, Taseko also capitalized $1.0 million
of exploration expenses related to the increased reserves and life of mine
at Gibraltar.
General and administrative costs increased to $1.4 million in the first
three months of fiscal 2007 compared to $1.0 million for the same period
in fiscal 2006. The main increase was attributable to higher staffing levels
and an increase in corporate activities relating to the Company's acquisition
and tax planning initiatives.
Stock-based compensation increased to $0.8 million in the current quarter,
compared to $0.2 million in the same period in fiscal 2006, as a result
of the amortization of stock compensation on options granted during in the
prior fiscal year.
The Company recorded a foreign exchange gain of $1.5 million in the first
quarter of fiscal 2007 mainly due to an increase in the value of the United
States dollar compared to the Canadian dollar, as a significant portion
of the Company's cash reserves are denominated in US dollars. This increase
was partially offset by a foreign exchange loss on the Company's US
denominated convertible bonds.
Interest income increased to $2.8 million in the first quarter of fiscal
2007 (2006 - $1.6 million) mainly due to a higher cash reserve on hand.
Income taxes of $1.8 million were recorded in the quarter, compared to $nil
in the same period of fiscal 2006. In addition, the Company had a future
income tax expense of $3.8 million in the current quarter compared to $nil
in the same period of fiscal 2006. The increase in income taxes is due mainly
to the depletion of tax pools as a result of the Company becoming more profitable.
The Company also has a tax provision of $21.6 million (2006 - $19.6
million) recorded in the consolidated financial statements. This provision
relates to an income tax expense recorded in fiscal 2004, which management
believes is less than likely of ever becoming payable. For further details,
see the Management
Discussion and Analysis for the year ending September 30, 2006.
Other Corporate Activities
Taseko Adopts Shareholder Rights Plan
On February 13, 2007 Taseko's Board of Directors approved the adoption
of a Shareholder Rights Plan Agreement (the "Rights Plan"). The
Rights Plan is being adopted to ensure the fair treatment of all Taseko
shareholders in connection with any take-over bid for the outstanding common
shares of the Company. The Rights Plan will provide shareholders with adequate
time to properly evaluate and assess a take-over bid without facing undue
pressure or coercion. The Rights Plan also provides the Board with additional
time to consider any take-over bid and, if applicable, to explore alternative
transactions in order to maximize shareholder value.
The Rights Plan is not designed to prevent take-over bids that treat Taseko
shareholders fairly. Pursuant to the terms of the Rights Plan, any bid that
meets certain criteria intended to protect the interests of all shareholders
are deemed to be "Permitted Bids". A Permitted Bid must be made
by way of a take-over bid circular prepared in compliance with applicable
securities laws and, in addition to certain other conditions, must remain
open for 60 days. In the event a take-over bid does not meet the Permitted
Bid requirements of the Rights Plan, the rights issued under the plan will
entitle shareholders, other than any shareholder or shareholders involved
in the take-over bid, to purchase additional common shares of Taseko at
a significant discount to the market price of the common shares at that
time. The Rights Plan is not being adopted in response to any proposal to
acquire control of Taseko.
The Rights Plan is subject to approval by the Toronto Stock Exchange and
will be presented for ratification by the shareholders at the Company's
annual meeting to be held by March 15, 2007. If ratified by shareholders,
the Rights Plan will have a term of three years.
Taseko will host a conference call on Wednesday, February 14 at 11:00 a.m.
Eastern Time (8:00 AM Pacific Time) to discuss these results. The conference
call may be accessed by dialing (866) 831-6270 in Canada and the United
States, or (617) 213-8858 internationally, using the passcode 46916913.
A live and archived audio webcast will also be available at the Company's
website www.tasekomines.com in the Corporate Events section of the Investor
Centre. The quarterly financials will be posted with this news release on
the Company's website.
For further details on Taseko Mines Limited, please visit the website or
contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.
Russell Hallbauer
President and CEO
No regulatory authority has approved or disapproved the information contained
in this news release.
Forward
Looking Statements
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements
of historical facts, that address estimated resource quantities, grades
and contained gold, possible future mining, exploration and development
activities, are forward-looking statements. Although the Company believes
the expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements should not be in any way construed
as guarantees of future performance and actual results or developments may
differ materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in forward-looking
statements include market prices for metals, the conclusions of detailed
feasibility and technical analyses, lower than expected grades and quantities
of reserves or resources, mining rates and recovery rates and the lack of
availability of necessary capital, which may not be available to the Company
on terms acceptable to it or at all. The Company is subject to the specific
risks inherent in the mining business as well as general economic and business
conditions. For more information on the Company, Investors should review
the Company's annual Form 20-F filing with the United States Securities
and Exchange Commission and its home jurisdiction filings that are available
at www.sedar.com.
Cautionary Note Concerning Estimates of Measured and Indicated Resources
This news release also uses the terms "measured resources" and
"indicated resources". Taseko advises investors that although
these terms are recognized and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognize them. Investors are
cautioned not to assume that any part or all of the mineral deposits in
these categories will ever be converted into reserves.
Cautionary Note regarding Forward Looking Statements - Pre-feasibility
Study, Prosperity Project
All information contained
in this press release relating to the contents of the pre-feasibility study,
including but not limited to statements of the Prosperity Project's
potential and information such as capital and operating costs, production
summary, and financial analysis, are "forward looking statements"
within the definition of the United States Private Securities Litigation
Reform Act of 1995. The information relating to the possible construction
of mine and plant facilities also constitutes such "forward looking
statements." The pre-feasibility study was prepared to broadly quantify
the Prosperity Project's capital and operating cost parameters and to
provide guidance on the type and scale of future project engineering and
development work that will be needed to ultimately define the project's
likelihood of feasibility and optimal production rate. It was not prepared
to be used as a valuation of the Prosperity Project nor should it be considered
to be a final feasibility study. The capital and operating cost estimates
which were used have been developed only to an approximate order of magnitude based
on generally understood capital cost to production level relationships,
and although they are based on engineering studies, these are preliminary
so the ultimate costs may vary widely from the amounts set out in the pre-feasibility
study. This could materially adversely impact the projected economics of
the Prosperity Project. As is normal at this stage of a project, data
in some areas was incomplete and estimates were developed based solely on
the expertise of the individuals involved as well as the assessments of
other persons who were involved with previous operators of the project.
At this level of engineering, the criteria, methods and estimates are preliminary
and result in a high level of subjective judgment being employed. There
can be no assurance that the potential results contained in the pre-feasibility
study will be realized.
The following are the principal risk factors and uncertainties
which, in management's opinion, are likely to most directly affect
the conclusions of the pre-feasibility study and the ultimate feasibility
of the Prosperity Project. The mineralized material at the Prosperity project
is currently classified as a measured and indicated resource, and a portion
of it qualifies under Canadian mining disclosure standards as a proven and
probable reserve, but readers are cautioned that no part of the Prosperity
Project's mineralization is considered to be a reserve under US mining
standards. For US mining standards, a full feasibility study would be required,
which would require more detailed studies. Additionally all necessary mining
permits would be required in order to classify the project's mineralized
material as an economically exploitable reserve. There can be no assurance
that this mineralized material will become classifiable as a reserve and
there is no assurance as to the amount, if any, that might ultimately qualify
as a reserve or what the grade of such reserve amounts would be. Final feasibility
work has not been completed to confirm the mine design, mining methods and
processing methods assumed in the pre-feasibility study. Final feasibility
could determine that the assumed mine design, mining methods and processing
methods are not correct. Construction and operation of the mine and processing
facilities depend on securing environmental and other permits on a timely
basis. No operating permits have been applied for and there can be no assurance
that required permits can be secured or secured on a timely basis. Data
is not complete and cost estimates have been developed, in part, based on
the expertise of the individuals participating in the preparation of the
pre-feasibility study and on costs at projects believed to be comparable,
and not based on firm price quotes. Costs, including design, procurement,
construction and on-going operating costs and metal recoveries could be
materially different from those contained in the pre-feasibility study.
There can be no assurance that mining can be conducted at the rates and
grades assumed in the pre-feasibility study. There can be no assurance that
these infrastructure facilities can be developed on a timely and cost-effective
basis. Energy risks include the potential for significant increases in the
cost of fuel and electricity. The pre-feasibility study assumes specified,
long-term prices levels for gold and copper. The prices of these metals
are historically volatile, and the Company has no control of or influence
on the prices, which are determined in international markets. There can
be no assurance that the prices of gold and copper will continue at current
levels or that they will not decline below the prices assumed in the pre-feasibility
study. Prices for gold and copper have been below the price ranges assumed
in pre-feasibility study at times during the past ten years, and for extended
periods of time. The project will require major financing, probably a combination
of debt and equity financing. Interest rates are at historically low levels.
There can be no assurance that debt and/or equity financing will be available
on acceptable terms. A significant increase in costs of capital could materially
adversely affect the value and feasibility of constructing the project.
Other general risks include those ordinary to very large construction
projects, including the general uncertainties inherent in engineering and
construction cost, the need to comply with generally increasing environmental
obligations, and accommodation of local and community concerns. The economics
of the Prosperity Project are sensitive to the US Dollar and Canadian dollar
exchange rate and this rate has been subject to large fluctuations in the
last several years.