Building Value Through Operating and Developing Major Mining - - PowerPoint PPT Presentation

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Building Value Through Operating and Developing Major Mining Projects

December 2013

Forward Looking Statement

Some of the statements contained in the following material are "forward‐ looking statements". All statements in this release, other than statements

• f historical facts, that address estimated mineral resource and reserve

quantities, grades and contained metal, and 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 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 40‐F filing with the United States Securities Commission at www.sec.gov. and its Canadian securities filings that are available at www.sedar.com.

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The Taseko Advantage

Financial Strength Recently Completed Mill Expansion (2013) Stability Average annual copper production (LOM) nearly doubled to 165 million lbs Annual molybdenum production increasing to 2.5 million Three‐year payback with 35% IRR C$80 million cash and equivalents at September 30/13 YTD 2013 operating profit* of $52 million Major Producing Copper Mine Provides Strong Cash Flow Assets located in British Columbia; a low risk, low taxation jurisdiction Experienced, operations‐focused management team H2 2013 hedged copper revenue minimum at US$2.75/lb; H1 2014 ‐ 13.5 million pounds of copper at US$3.00/lb Diversified Project Pipeline Project pipeline of 100% owned, near‐term gold, copper and niobium projects provide strong upside Operating the second largest open pit copper mine in Canada and fourth largest in North America Increasing Production 4.1 billion lbs of recoverable copper and 60 million lbs of molybdenum 25 year mine life

*Before depletion and amortization.

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Diversified Asset Base

Aley (Nb)

Metallurgical testwork being completed Feasibility Study complete in 2013

Gibraltar (Cu‐Mo)

World class, modernized, open pit mine 165 M lbs annual production 25 Year Mine life

New Prosperity (Cu‐Au)

Canadian Environmental Assessment Panel Review Completed in October 2013 Decision expected in Q1 2014

British Columbia

Gibraltar New Prosperity Vancouver

Williams Lake

Aley

Mackenzie

Harmony

(Gold)

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Gibraltar Copper/Moly Mine

Location: 65 km north of Williams Lake, British Columbia Ownership: 75% Mineral Reserves: 4.1 billion pounds recoverable copper 60 million pounds recoverable molybdenum

Reserves Update (Dec 2012: 770m tons at 0.34% copper equivalent*

Mine Type: Open‐pit, Copper‐Moly Porphyry, average annual copper production (LOM) 165 million lbs Mine Life: 25 years

*Assumed metal prices of: Cu US$2.25/lb; Mo US$16.00/lb

Canada’s Second Largest Open‐Pit Copper Mine

Originally built in 1971 by Placer, Taseko purchased mine in 1999 while on care and maintenance. Restarted in 2004 Exploration drill program increased reserves and extended mine life $700 million capital investment program commenced in 2006, completed in mid‐2013

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Gibraltar Copper/Moly Mine

GDP3 – Completed On Time and On Budget

50% capacity increase from construction of a new concentrator and molybdenum plant Mine now feeds two independent copper concentrators, providing increased

• perational flexibility and synergies

Simple payback of three years, based on a C$1.50/lb margin 35% IRR Low capital intensity ‐ $10,800/ton of installed capacity (compared to $15,000+ for other comparable projects)

34’ SAG Mill 20’ Ball Mill 160m3 Float Circuit

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Gibraltar Copper/Moly Mine

Increasing Production Led by Continuous Investment

25 50 75 100

H1 07 H2 07 H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 Q3 13 October Daily Mill Throughput (000s Tons)

Capacity per Calendar Day Tons Per Operating Day Tons Per Calendar Day

$76 million 25% $325 million +55% $224 million +20%

101,000 / Operating Day 91,500 / Calendar Day

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Taseko’s Growth Strategy

Use free cash flow generated by Gibraltar to advance near‐term projects: Disciplined Investments in Diversified Project Pipeline

• 13.3 Million ounces of Gold
• 5.3 billion pounds of Copper
• ~540,000 ounces gold eq. annual production
• Located in British Columbia
• Construction ready in 2015, pending federal

government approval

$2.3 billion NPV

• 2nd largest niobium deposit in the world
• 739 million kilograms contained niobium
• Estimated 12 million pounds of annual

niobium production

• Located in British Columbia
• Environmental assessment underway

$350+ million annual revenue

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New Prosperity

* Based on 6 months production ** Based on long‐term Au price US$1000/oz, Cu Price US$2.75/lb

Yr 1* Yr 2 Yr 3 Yr 4 Yr 5 Average

Gold (ounces) 160,000 300,000 325,000 275,000 305,000 300,000 Copper (thousands, pounds) 75,000 130,000 130,000 120,000 120,000 130,000

Location: 125 km south west of Williams Lake, British Columbia Ownership: 100% Mineral Reserves: 7.7 million ounces recoverable gold 3.6 billion pounds recoverable copper Mine Type: Open‐pit, 70,000 tpd mill throughput Mine Life: +20 years

Life of mine average annual production ~540,000 gold eq. ozs**

5‐year production profile

One of the Largest Gold/Copper Porphyries in the World

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New Prosperity

Economics

Revised Economic Study completed in January 2011 Preliminary capital cost estimate of C$1 billion (excluding mining equipment) Operating cost of C$8.35 per tonne milled Total cash costs of negative US$125/oz au, net of BPCs at US$2.50 cu

Net Present Value (5% discount rate)

@ Long term pricing* – $2.3 billion @ Current spot pricing – $3.8 billion

*Forward Cu Curve first 3 years, $2.75/lb LT, $1,200/oz Au

Robust Economics

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New Prosperity

Environmental Assessment Review

Taseko submitted Environmental Impact Statement (EIS) on September 20, 2012 EIS determined sufficient on June 20, 2013 Panel Hearings held July 22 – August 23, 2013 Panel Report issued on October 31, 2013 Taseko commences federal judicial review on December 2, 2013 Next steps: Federal government decision (expected in Q1 2014)

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New Prosperity

October 31 Panel Report

Panel relied on a Natural Resource Canada (NRCAN) assessment of the plan that was NOT Taseko’s plan.

Natural Resources Canada based their opinion on the wrong TSF design, not on the TSF design proposed by Taseko for New Prosperity. The Panel then relied on these flawed opinions and errors to arrive at flawed findings of significant environmental effect — on fish and fish habitat, wetlands and aboriginal interest in the Fish Lake area. Taseko was subsequently asked by the CEAA to provide further specific information on the matter.

Taseko provided the correct information to the Minister of Environment (November 8) and CEAA (November 15) to ensure that New Prosperity is evaluated in a fair and transparent manner.

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New Prosperity

The Mistake and the Reality

NRCAN assumed there was no low permeability basin liner for the TSF and that seepage would therefore readily leak into more pervious overburden and fractured bedrock. The New Prosperity TSF not only includes a continuous low permeability liner, but that the liner would meet a hydraulic conductivity design specification to restrict seepage losses consistent with the results of seepage modeling. The Issue Seepage rates and water quality are two determinants in predicting significance of environmental impacts on fish and fish habitat, wetlands and aboriginal interest in the Fish Lake area. The Panel relied on the faulty opinions of NRCAN (seepage rates based on the wrong design) in concluding significant environmental effects.

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Aley Niobium Project

Location: Northern British Columbia Ownership: 100% Mine Type: Open Pit, 10,000 tpd mill throughput Mine Life: +20 years

Accretive Development Opportunity

Project Highlights

739 million kilograms of contained niobium* 2nd largest niobium deposit in the world Open pit, bulk mining methods Estimated annual production of 12 million lbs of niobium, generating revenue of ~$350‐$400 million

$25 million spent (expensed) from 2011‐2013

Road construction Metallurgical testwork Engineering on minesite components, tailings storage facility and transmission line Environment baseline studies

* 285 million tonne M&I resource grading 0.37% Nb2O5 (at a 0.20% Nb2O5 cut‐off)

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Aley Niobium Project

Niobium

Niobium Benefits in Steel

Specifically used in manufacturing high strength, low alloy steels Green technologies, turbines, aerospace, automobile steels, oil and gas Global annual consumption of ferro‐niobium is 210 million lbs/year Growing at 5‐7% per year Current pricing of FeNb is $40/kg 3 producers worldwide: CBMM, Brazil; Anglo American, Brazil; IAMGOLD, Canada

$9 of Niobium used in a Car 100 kg Weight Reduction 5% Fuel Efficiency Improvement

= =

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Highly Levered to Copper

*Source: Dundee Capital Markets, August 8, 2013

“Taseko is the most copper‐levered stock in our universe. For a $0.25/lb increase in our long‐term price of $2.75/lb, TKO exhibits a 23% increase in LOM EBITDA. While TKO remains best‐suited to benefit from appreciating copper prices, the company is also protected on the downside with its low‐cost hedging strategy.”

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Significant Intrinsic Value

Asset Valuation ($m) Mineral Assets Gibraltar – After Tax (75%) $ 1,000 Prosperity – After Tax (100%) $ 2,320 Aley (100%) $ 270 Harmony (100%) $ 195 Mineral Assets Total $ 3,785 Financial Assets Cash & Cash Equivalents $ 80 Long-term Debt $ (252) Financial Assets Total $ (172) TOTAL NET ASSET VALUE $ 3,613 Shares outstanding (millions) 192.8 NAV/ share ($C/share) $ 18.74

Valuation Metric Assumptions: > Gibraltar: discount rate of 8%, after completion of GDP3; Forward Cu Curve first 5 years, $2.75/lb LT > New Prosperity: discount rate of 5%; Forward Cu Curve first 3 years, $2.75/lb LT, US$1,200/oz Au > Aley: US$1.14 kg/Nb, in situ value > Harmony: US$50/Au. oz, in situ value

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Appendix

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Gibraltar ‐ One Mine, Two Concentrators

54”x74” Primary Crusher 34’ SAG Mill 20’ Ball Mill Rougher Flotation – OK160 Cells Mo Separation

Regrind – Tower Mill

34’ SAG Mill

Ball Mill Ball Mill Ball Mill Ball Mill Ball Mill Ball Mill

Distributor Cleaner Cells – OK20 Cells Mo Separation

Regrind – Tower Mill

60”x89” Primary Crusher Rougher Flotation – OK160 Cells Cleaner Cells – OK20 Cells

Concentrator #1 55,000 tpd Concentrator #2 30,000 tpd

Copper Concentrate Molybdenum Concentrate Copper Concentrate Molybdenum Concentrate

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Gibraltar Copper/Moly Mine

Participation & Cooperation Agreement with Williams Lake Indian Band

The purpose of the agreement is to enhance understanding, communication and cooperation between the parties Aligned interests will ensure Gibraltar continues to generate local value and

• pportunity

Agreement includes education and economic development initiatives Provides employment and training

• pportunities for Williams Lake Indian Band

members

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Aley Niobium Project

Exploration Agreement with Tsay Keh Dene

Foundation for long term cooperation and mutual benefit for Tsay Keh Dene and Taseko Agreement supports Taseko’s exploration program Provides employment and training

• pportunities for Tsay Keh Dene members

Environmental protection through cooperative design and environmental management monitoring programs Provides a framework and commitment to develop a Comprehensive Cooperation and Benefit Agreement for development of mine Enhance operating margins with profit improvement program

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New Prosperity

Revised Project Layout (January 2011)

Tailings Facility Fish Lake Open Pit Ore Stockpile Plant Site Overburden and Rock Stockpile

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Key Accomplishments

Apr 2013 First concentrate produced from Gibraltar concentrator #2 Apr 2013 Taseko signs Participation and Cooperation agreement with Williams Lake Indian Band Dec 2012 Gibraltar Mine signs long‐term labour agreement Nov 2012 2012 Q3 gross profit of $12 million Oct 2012 Gibraltar receives the award for Metal Mine Reclamation from the British Columbia Technical and Research Committee on Reclamation Sept 2012 New Prosperity Environmental Impact Statement is submitted to Federal Review Panel established for the environmental assessment of the project May 2012 Agreement reached with the Tsay Keh Dene to support the exploration program and environmental studies at Aley Mar 2012 Aley resources increased and upgraded to a Measured and Indicated Resource of 286 million tonnes with an average grade of 0.37% Nb2O5 (0.20% COG) Dec 2011 2011 gross profit of $86.3 million from production of 82.9 million lbs of copper and 1.3 million lbs of molybdenum Nov 2011 New Prosperity enters into Federal Environmental Assessment process May 2011 Gibraltar’s reserves increase by 80%, to 802m tons April 2011 Issues Senior Notes for total proceeds of US$200m; due in 2019 and have an annual interest rate of 7.75%.

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Share Structure

Cash on Hand: C$80 million (September 30, 2013) Listed: TSX; TKO / NYSE MKT; TGB Indices: S&P/TSX Composite : S&P/TSX Small Cap S&P/TSX Global Mining : S&P/TSX Global Base Metals Shares Outstanding: 192.8 million Market Capitalization: ~$400 million 52 Week High/Low: C$3.48/C$1.88; US$3.53/US$1.80 Analyst Coverage: Scotia Capital, Raymond James, National Bank, CIBC, Canaccord, Jennings Capital, Paradigm, TD Newcrest, Cowen, PI Financial, Laurentian Bank, Desjardins, GMP, Dundee Target Range: $2.50- $9.00

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Experienced Management Team

Russell Hallbauer, P. Eng ‐ President & CEO and Director – Mr. Hallbauer is a professional engineer with over 35 years of

mining experience. He has a strong background in open pit and underground mining, overseeing operating joint ventures and revitalizing mines to profitability.

John McManus, P. Eng ‐ Senior Vice President, Operations – Mr. McManus is a professional engineer who has worked in

the BC mining industry for over 30 years. He has extensive experience in mine operation, mine engineering and environmental management.

Stuart McDonald – CFO – Mr. McDonald is a financial executive with over 19 years of professional experience in mining

finance, corporate development, treasury management, and financial reporting. He has held a number of senior financial positions in the mining industry including Chief Financial Officer of Quadra FNX Mining Ltd.

Ron Thiessen, CA ‐ Chairman – Mr. Thiessen is an accredited public accountant in Canada. For over 25 years, he has

concentrated on the development of venture capital financing for emerging public and private companies. He is a corporate officer and director of several publicly traded exploration and development companies.

Brian Battison ‐ Vice President, Corporate Affairs – Mr. Battison is a public affairs specialist with over 25 years of

experience in policy development, issue management and communication in both the private and public sectors. He has been a senior political and policy advisor in BC and has served as Interim President & CEO of the Mining Association of BC.

Scott Jones, P. Eng ‐ Vice President, Engineering – Mr. Jones has over 25 years of experience in the mining industry,

including property valuations, mining feasibility studies and technical engineering support as well as 10 years in open pit

• perations and exploration in BC and the Yukon.

Dave Rouleau, Eng ‐ Vice President, Operations – Mr. Rouleau has over two decades of experience in the mining and oil

and gas industries. He has extensive experience in mine operations and engineering in British Columbia and Alberta.

Robert Rotzinger, P. Eng – Vice President, Capital Projects – Robert is a mechanical engineer and has worked at the

Gibraltar Mine since 1994 where he has taken on increasingly senior positions. He has been tasked with the management of diverse engineering, environmental, metallurgical and mining initiatives, such as the Phase I and Phase II Gibraltar Expansions and the GDP3 Project.

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Experienced Management Team

Brian Bergot ‐ Director, Investor Relations – Mr. Bergot has over 20 years of experience in the natural resources sector,

holding a number of corporate and operational roles, the last ten years of which have been focused in the investor relations field.

Tom Broddy ‐ Manager, Engineering – Tom is a mining engineer with more than 19 years of experience in the mining

• industry. Prior to joining Taseko in 2006, he was Manager of Container Operations at Centerm container terminal in the Port of
• Vancouver. He spent 16 years at the Bullmoose and Quintette coal mines and has experience in mine engineering, blasting, pit
• perations and terminal management.

Greg Yelland, P. Eng ‐ Chief Engineer – Greg is a Mining Engineer with over 30 years experience in the Mining Industry,

primarily in the area of mine engineering and mine operations. He has worked and consulted on projects and operations in South Africa, Zambia, United States and Canada. He has experience in underground gold , chrome and platinum mines as well as open pit copper, cobalt, coal and industrial minerals.

Andy Yu ‐ Corporate Controller – Andy Yu is a Chartered Accountant, a Certified Public Accountant, and an EMBA Candidate

(Simon Fraser University) with more than ten years of experience in the mining industry. He has been with Taseko since 2009 in various finance roles such as the Manager of Financial Reporting and the Manager of Financial Planning and Analysis. Prior to joining Taseko, he was the Manager of Financial Reporting at Hunter Dickinson Inc., and an Audit Manager at PwC .

Keith Merriam, P. Eng ‐ Manager, Process Engineering – Keith is a P.Eng. and an Extractive Metallurgist with over 15

years experience in the Mining Industry, primarily in the area of Mineral Processing. He has worked primarily in technical, commissioning and operational roles, gaining experience in a variety of areas and taking on increasing levels of responsibility.

Katherine Gizikoff ‐ Director, Government and Environmental Affairs – Katherine is a professional agrologist with 28

years experience at coal and metal mines in Western Canada. Prior to joining Taseko in 2007, Katherine was consulting, providing environmental management, reclamation, research, and permitting services for the mining industry in BC. Katherine has extensive experience with government‐industry committees, facilitation, community liaison and consultation.

Tomas Alba ‐ Manager, Marketing and Logistics – Tomas is an Industrial Engineer with a graduate degree in Transport and

Maritime Studies with more than 20 years of experience in the mining industry. Prior to joining Taseko in June 2011, he was Marketing and Logistics Manager at Farallon Mining. He also spent more than 10 years working for Carbocol, Colombian coal mining industry, where he held progressively responsible roles up to and including Director of General Sales.

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Reserves & Resources

Mineral Reserves @ C$5.50 NSR/t Cut-Off1

Size M Tonnes Grade Recoverable Metal Contained Metal

Au (g/t) Cu (%) Au (M oz) Cu (B lb) Au (M oz) Cu (B lb) P&P reserves 830 0.41 0.23 7.7 3.6 11.0 4.2 M&I Resources 181 0.40 0.30

• 2.3

1.1 Total 1,011 0.41 0.24

• 13.3

5.3

Category (at 0.20% Cu Cut-

• ff)

Size (M Tons) Grade Recoverable Metal Contained Metal

Cu (%) Mo (%) Cu (B lbs) Cu (B lbs) P&P Reserves 770 0.301 0.008 4.1 4.6 M&I Resources 919 0.301 0.008

• 5.5

Category (at 0.20% Nb205 Cut-

• ff)

Size (M Tonnes) Grade Contained Metal Nb205 (%) Nb (M kgs)

M&I Resources

285 0.37 739

New Prosperity

The mineral resource and reserve estimations were completed by Taseko staff under the supervision of Scott Jones, P.Eng., Vice-President, Engineering 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 estimates for the reserves used long term metal prices of US$1.65/lb for copper and US$650/oz for gold and a foreign exchange of C$0.82 per US dollar.

Gibraltar

The resource and reserve estimation was completed by Gibraltar mine staff under the supervision of Scott Jones, P.Eng., Vice President, Engineering 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 estimates used long term metal prices of US$2.25lb for copper and US$14.00/lb for molybdenum and a foreign exchange of US$0.85/C$1.00. Reserves and Resources were updated as

• f Dec 31/12.

Aley

The 0.20% Nb2O5 cut-off assumes a niobium price of US$50/kilogram and a 50% process recovery rate. G & A, processing and ore mining costs were assumed to be US$30/tonne milled plus waste mining costs of US$2.00/tonne. A 45° pit wall slope was generated to constrain the resource within the block model. The resource estimate was prepared by Ronald G. Simpson, P.Geo. with Geosim Services Inc., a Qualified Person independent of Taseko.

Note: A technical reports have been filed on www.sedar.com.