Copper and molybdenum production continues to rise at the Taseko Mines-operated Gibraltar mine in British Columbia, with the copper grade improving in first-quarter 2017, the Vancouver-based company said.
Taseko is attempting to advance its Florence Copper mine in Arizona to the production phase and is moving forward with a production test facility at the mine location about 60 miles southeast of Phoenix, Russell Hallbauer, the company's president and CEO, said during a quarterly earnings call last week.
Copper output at Gibraltar has risen steadily during the past year, with the mine producing 41.3 million pounds in Q1, up from 40 million pounds in Q4 2016 and 28.8 million pounds in Q1 2016.
Molybdenum production was flat at 900,000 pounds for Q1 of this year and Q4 of last year.
"Everything at Gibraltar is working as we want it to," Hallbauer told analysts during the call Thursday. The mine is profiting from higher copper prices, he said.
The copper head grade at Gibraltar rose to 0.328% in Q1, which was slightly better than planned, as a result of higher grade ore encountered during the current mining sequence. Copper recovery for the quarter was 86%.
The molybdenum circuit continued to operate at design capacity in the three months that ended in March, the company added, with recoveries averaging 51%.Site operating costs per pound of copper and molybdenum produced decreased in the Q1 on higher copper production.
Hallbauer said Taseko is making progress on its Aley niobium project in British Columbia.
Niobium primarily is used in steel manufacturing, and Taseko says the undeveloped asset it acquired in 2007 has 84 million mt of reserves, making it the world's largest niobium deposit outside of two operating mines in Brazil.
"We're working on metallurgical studies at Aley," he said, adding Taseko is in discussions on potential offtake agreements with Chinese steel industry representatives. "We'll see where that goes in the months ahead," he said.
Taseko, he said, is "continuing to spend money on all our projects, not much, because you have to remember copper was $2.20/pound nine months ago. But we are moving forward on our project closest to production, which is Florence." Once all the permits for the proposed mine are final, Taseko intends to move ahead with the production test facility.
Taseko is awaiting the results of an appeal by several parties of a US Environmental Protection Agency permit issued December 21 for Florence Copper. The Gila River Indian Community, Southwest Value Partners/town of Florence and John Anderson, representing himself, have asked EPA's Environmental Hearing Board to review the federal agency's decision to award the permit.
An appeal also is ongoing of state of Arizona's decision to issue a permit for the production test facility.
Hallbauer said he feels good about the appeals process because Florence's opponents "are not challenging the company anymore, but the state agencies, and it's difficult to overturn state agency rulings."
The Florence deposit contains 2.4 billion pounds of copper in 340 million mt of probable reserves and represents pre-tax present value, with a 7.5% discount rate, of $725 million with an internal rate of return of 36% using a long-term copper price of $2.75/pound. Taseko says the mine should produce about 81 million pounds/year of copper.
There is no official timetable for when Florence will start production. Taseko's net income in the first quarter was $16.5 million (7 cents/share).
