BRITISH COLUMBIA

Taseko says adjustments at Gilbraltar mine will reduce copper output temporarily

10/09/2014 09:19 EDT | Updated 12/09/2014 05:59 EST
VANCOUVER - Taseko Mines Ltd.(TSX:TKO) said Thursday that problems at its Gibraltar mine have forced temporary changes that will reduce copper production and increase costs in the short term.

The company said it has temporarily shifted operations to lower-grade ore deep in the open pit mine due to due to stability issues along higher walls.

"The recent pit wall movement, which was relatively minor, has resulted in plan adjustments which will impact copper production and costs in the short-term," Taseko president and chief executive Russell Hallbauer said in a statement.

"In conjunction with this event, the longer ore haul out of the bottom of the pit has affected our truck fleet productivities, increasing haulage costs."

Taseko said it produced 35.4 million pounds of copper and 650,000 pounds of molybdenum at its Gibraltar Mine in the third quarter. Sales for the three-month period totalled 38.1 million pounds of copper and 700,000 pounds of molybdenum.

The company said the quantity of ore mined in the third quarter was as planned, but the grade was below forecast.

"This is a temporary, cyclical situation which will be alleviated when operations transition back to the upper benches of the Granite Pit in the next few weeks," Hallbauer said.

"We are currently reviewing alternative mining plans for 2015, with the goal of maintaining a healthy profit margin and cash flow."

Hallbauer also said the company extended its copper hedging program through the first quarter of 2015.

"We are now protected at US$2.75 per pound in the fourth quarter and US$3.00 per pound in the first quarter for roughly one half of our share of Gibraltar copper production," he said.

"We will look for opportunities to extend the put options beyond the first quarter 2015."

Taseko owns a 75 per cent stake in the Gibraltar mine, while Cariboo Copper Corp. owns the remaining 25 per cent.

Taseko shares fell two cents shortly after the announcement to $1.87 on the Toronto Stock Exchange.