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    Taseko Mines Ltd (TGB)

    TGB Q1 2025: Gibraltar Pit Issues Mitigated, Production Outlook Stable

    Reported on Jun 23, 2025 (Before Market Open)
    Pre-Earnings Price$2.21Last close (May 1, 2025)
    Post-Earnings Price$2.16Open (May 2, 2025)
    Price Change
    $-0.05(-2.26%)
    • Improved Operational Conditions at Gibraltar: Management highlighted that challenging ground conditions in the connector pit have been effectively mitigated, with mining expectations now being met, which could support production improvements.
    • Stable Near-Term Production Outlook: Despite issues with oxidized stockpiles, the team confirmed that production levels are expected to remain consistent into Q2, signaling operational stability.
    • Controlled Capital Expenditure at Florence: The leadership noted that import tariffs are not affecting Florence’s capital projects because most supplies and equipment are sourced domestically, reducing cost risks.
    • Challenging operational conditions in Gibraltar: Difficult ground conditions at the connector pit have delayed mining activities, impacting production and suggesting potential further operational setbacks.
    • Persistent lower recoveries from oxidized stockpiles: Issues with oxidized stockpiles have already reduced copper recoveries, and if these conditions persist, they could continue to depress production output.
    • Cost volatility concerns: Uncertainty around input costs, particularly sulfuric acid and potential tariff impacts, could adversely affect future operating margins.
    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    Copper Production

    FY 2025

    120–130 million pounds

    Approximately 10 million pounds lower than previous guidance

    lowered

    Capitalized Stripping Costs

    FY 2025

    Expected to increase to $40–50 million

    $38 million in Q1 2025

    lowered

    Cathode Production

    FY 2025

    3–4 million pounds

    3–4 million pounds

    no change

    Copper Price Protection – Minimum Price

    FY 2025

    $4.00 per pound

    $4 per pound

    no change

    Copper Price Protection – Ceiling Price

    FY 2025

    $5.20 per pound

    $5.40 per pound

    raised

    Florence Copper Project – Construction Status

    FY 2025

    60% complete

    80% complete

    raised

    Second Quarter 2025 Production

    FY 2025

    no prior guidance

    Expected to be similar to Q1 2025 with production impacted by lower grades and recoveries

    no prior guidance

    Second Half 2025 Production

    FY 2025

    no prior guidance

    Step change in production expected, with average grades above Gibraltar’s reserve average

    no prior guidance

    Florence Copper Project – First Production Timing

    FY 2025

    First production expected in approximately 10 months (late FY 2025)

    First copper cathode production expected before the end of 2025

    no change

    TopicPrevious MentionsCurrent PeriodTrend

    Operational Conditions

    Q2 2024 discussions noted production impacts from downtime and transitional ore processing ; Q4 2024 highlighted high throughput but noted impacts from softer, oxidized ore and labor disruptions

    In Q1 2025, operational updates focus on lower-than-expected production (20 million lbs) and a drop in copper recoveries to 68% due to more significant oxidized ore effects, with challenging mining conditions delaying access to higher‐grade ore

    Slightly more negative sentiment in Q1 2025 as production challenges and ore oxidation issues result in a downward revision of guidance, compared to earlier periods.

    Production Outlook and Throughput

    Q2 2024 outlook was cautiously optimistic with anticipated recovery in the second half and throughput expectations above 85,000 tonnes/day ; Q4 2024 noted 2025 guidance of 120–130 million lbs and strong throughput figures despite a weak Q1 due to stockpile ore

    Q1 2025 reports a 10% shortfall in production due to lower recoveries and reiterates similar throughput levels (88,000 tonnes/day), with the outlook revised downward by 10 million lbs for 2025

    While the overall long‐term production outlook remains, Q1 2025 shows a more cautious tone with revised guidance and recognition of near-term challenges.

    Capital Expenditure and Expense Management

    Q2 2024 focused on Florence CapEx (USD 37 million for the quarter) and lower Gibraltar site spending due to the labor strike, with details on crusher move costs ; Q4 2024 described sustaining capital at Gibraltar and higher spending on Florence but with expectations of tapering after a peak in Q1 2025

    Q1 2025 emphasizes controlled spending with Florence construction nearing 80% completion and detailed figures on incurred costs (e.g. USD 57 million in the quarter, USD 206 million year-to-date) while Gibraltar’s capitalized stripping costs are higher in Q1 but expected to taper soon

    The messaging is consistent regarding disciplined spending; however, Q1 2025 reflects a peak spending phase with tighter management and clearer forward guidance.

    Project Execution at Florence

    Q2 2024 updates highlighted steady construction progress, significant contractor engagement, and early drilling milestones, with anticipation of first production within 18 months ; Q4 2024 indicated about 60% completion and a timeline pushing first production to late 2025 with a ramp-up through 2026–2027

    Q1 2025 reports accelerated progress with the project now 80% complete, wellfield nearly finished, and key installations (e.g. electrowinning crane) completed along with an expectation for first copper before year-end 2025

    Progress at Florence has accelerated in Q1 2025 relative to previous periods, creating a more optimistic, forward-looking sentiment regarding early production.

    Copper Recovery Efficiency and Ore Quality

    Q2 2024 detailed copper recoveries at 78%, noting impacts from processing partially oxidized ore during the transition from the connector pit ; Q4 2024 mentioned that recoveries were impacted by higher oxide content in transition ore while benefiting from softer ore in throughput figures

    Q1 2025 shows a noticeable deterioration with recoveries dropping to 68% and reliance on lower-grade stockpiles, underlining challenging mining conditions as higher-grade ore access is delayed

    There is a negative shift in sentiment as copper recovery efficiency has declined significantly in Q1 2025, raising concerns over production efficiency compared to earlier periods.

    External Supply Chain and Input Cost Volatility

    Q2 2024 had no mention; Q4 2024 discussions focused on securing acid supply through an RFP, lower diesel prices contributing to cost savings, and copper price protection measures

    Q1 2025 emphasizes that there is no impact from tariffs on capital projects but raises concerns that longer-term operating costs are subject to volatility—specifically highlighting sulfuric acid as a major input cost

    A new emphasis emerges in Q1 2025 on long-term input cost volatility even though immediate supply chain risks (like tariffs) remain mitigated, indicating increased sensitivity to operating cost dynamics.

    SX/EW Facility Restart Economics and Dependency

    Q2 2024 noted that the SX/EW facility restart is economically viable with projected cash costs around USD 2 per lb and potential tax credits, driven by ample oxide ore availability ; Q4 2024 reiterated plans for a restart in Q2 2025 with expected cathode production of 3–4 million lbs in 2025, expanding later

    Q1 2025 reaffirms the restart is progressing well with first cathode production expected in Q2 2025 and similar production expectations (3–4 million lbs this year), emphasizing the facility’s long-term operational potential

    The updates remain steady across periods, confirming a consistent and positive view on the SX/EW restart’s economics and its role in future production.

    Labor Disruption Risks

    Q2 2024 described an 18-day labor strike that reduced mill throughput by 25% and affected production, along with a new 3-year union contract for 550 workers out of 750 ; Q4 2024 detailed lost production (~15 million lbs) and incurred costs ($19 million) due to the strike

    Q1 2025 does not mention any labor disruption risks or strikes, with no reference to such issues in the current update

    The absence of labor disruption topics in Q1 2025 suggests a resolution or a reduced impact compared to previous periods, which is a positive development.

    1. Gibraltar Conditions
      Q: Ground issues delaying operations?
      A: Management explained that challenging ground conditions in the upper benches—due to excess overburden—caused delays in Q1, though conditions are now improving as mining progresses.

    2. Oxidized Stockpiles
      Q: Will oxidized ore affect Q2 recovery?
      A: Management confirmed that the issues with oxidized stockpiles are factored in, expecting production and recoveries in Q2 to be similar to Q1.

    3. Florence Tariff
      Q: Are tariffs impacting Florence costs?
      A: According to management, Florence’s capital projects are insulated from tariffs since most equipment and supplies are already U.S.-sourced; however, they remain vigilant on longer-term operating costs like sulfuric acid.

    4. New Prosperity
      Q: Any update on the Prosperity project?
      A: Management noted that progress on the Prosperity project is positive with constructive dialogue, but no new details were provided at this time.