TGB Q1 2025: Gibraltar Pit Issues Mitigated, Production Outlook Stable
- 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.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
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 |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
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. |
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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. -
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. -
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. -
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.