This release should be read with the Company’s Financial Statements and Management Discussion & Analysis (“MD&A”), available at www.tasekomines.com and filed on www.sedar.com. Except where otherwise noted, all currency amounts are stated in Canadian dollars. Taseko’s 75% owned Gibraltar Mine is located north of the City of Williams Lake in south-central British Columbia. Production volumes stated in this release are on a 100% basis unless otherwise indicated.

February 22, 2017, Vancouver, BC - Taseko Mines Limited (TSX: TKO; NYSE MKT: TGB) (“Taseko” or the “Company”) reports financial results for 2016. For the three months ended December 31, 2016 Taseko had net income of $5.1 million or $0.02 per share, and adjusted net income of $16.4 million or $0.07 per share.

Russell Hallbauer, President and CEO of Taseko, commented, “The $49.7 million of cash flow from operations in the fourth quarter demonstrates the cash generating ability of Gibraltar, even at a copper price well below the current price. Site spending has remained consistent over the past eight quarters and the impact of increased metal production on unit costs was immediate and contributed to a US$0.46 per pound decline in site operating costs, from the third quarter, to US$1.12 per pound. Site costs also benefitted from a full quarter of molybdenum production and the associated by-product credit from molybdenum sales. These factors, combined with moderately higher off property costs this quarter, resulted in total operating costs (C1)* of US$1.48 per pound. We expect site spending to remain stable throughout 2017.”

Mr. Hallbauer added, “During the quarter, the copper price rallied to roughly US$2.50 per pound from the US$2.00 to US$2.20 where it traded for most of 2016. Our realized sales price in the fourth quarter, excluding the positive impact from prior-period pricing adjustments, was US$2.47 per pound. In a period of a few months, our operating margin increased from US$0.26 per pound to over US$1.00 (C$1.31) per pound. Since year end, the price of copper has continued to climb, averaging US$2.65 year-to-date, and this will further improve our operating margin.”

“The strong finish to 2016, after another challenging year for the copper sector, and the positive momentum so far in 2017 is very exciting for the Company. With the general market sentiment that higher prices should remain in 2017, combined with Gibraltar’s higher production and lower costs, we expect a very successful year ahead. With our improved balance sheet today plus increased cash flows we expect in 2017 we will be in a strong position to address our debt obligations, well in advance of the 2019 maturity dates,” concluded Mr. Hallbauer.

Fourth Quarter 2016 Highlights
•Earnings from mining operations before depletion and amortization* were $46.6 million, compared to $2.2 million in the same period 2015;
•For the fourth quarter, adjusted EBITDA was $44.5 million and cash flow from operations was $49.7 million;
•The Company’s cash balance at the end of 2016 was $89.0 million;
•Net earnings were $5.1 million or $0.02 per share, compared to a loss of $23.4 million, or ($0.11) loss per share, in the same quarter 2015;
•Site operating costs, net of by-product credits* were US$1.12 per pound produced and total operating costs (C1)* were US$1.48 per pound produced, down 26% and 20%, respectively, from the fourth quarter of 2015;
•Site operating cost per ton milled* was $9.13, a fifth consecutive quarter below the $10 internal benchmark cost due to a continued focus on spending and operational efficiencies;
•Copper production at Gibraltar was 40.7 million pounds (100% basis), an increase of 23% over the same period 2015. The Gibraltar molybdenum facility, which was restarted in September, produced 800 thousand pounds of molybdenum;
•Total sales for the quarter were 40.4 million pounds of copper and 800,000 pounds of molybdenum;
•In December, the United States Environmental Protection Agency (EPA) issued the final required permit, the Underground Injection Control (UIC) permit, to construct and operate the Phase 1 Test Facility at Taseko’s Florence Copper Project in Florence, Arizona; and
•For the third straight year (2016), Gibraltar has received the John Ash Safety Award presented by the Ministry of Energy and Mines. This prestigious award goes to the mining operation in British Columbia with the lowest injury-frequency rate that has worked at least one million hours during the year.

HIGHLIGHTS

Financial Data Three months ended
December 31, Year ended
December 31,
(Cdn$ in thousands, except for per share amounts) 2016 2015 Change 2016 2015 Change
Revenues 94,628 61,412 33,216 263,865 289,298 (25,433)
Earnings from mining operations before depletion and amortization* 46,617 2,155 44,462 54,715 50,834 3,881
Earnings (loss) from mining operations 37,393 (10,674) 48,067 1,776 1,320 456
Net income (loss) 5,113 (23,441) 28,554 (31,396) (62,352) 30,956
Per share - basic (“EPS”) 0.02 (0.10) 0.12 (0.14) (0.28) 0.14
Adjusted net income (loss)* 16,404 (13,112) 29,516 (31,860) (15,531) (16,329)
Per share - basic (“adjusted EPS”)* 0.07 (0.06) 0.13 (0.14) (0.08) (0.06)
EBITDA* 32,312 (9,162) 41,474 39,520 8,196 31,324
Adjusted EBITDA* 44,477 1,415 43,062 41,628 55,555 (13,927)
Cash flows provided by operations 49,663 1,859 47,804 33,853 51,695 (17,842)
Operating Data (Gibraltar - 100% basis) Three months ended
December 31, Year ended
December 31,
2016 2015 Change 2016 2015 Change
Tons mined (millions) 18.5 21.3 (2.8) 87.6 93.7 (6.1)
Tons milled (millions) 7.3 7.3 - 29.5 30.6 (1.1)
Production (million pounds Cu) 40.7 33.1 7.6 133.3 142.2 (8.9)
Sales (million pounds Cu) 40.4 33.7 6.7 131.1 142.5 (11.4)



REVIEW OF OPERATIONS

Gibraltar mine (75% Owned)

Operating Data (100% basis) Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 YE 2016 YE 2015
Tons mined (millions) 18.5 21.5 26.2 21.5 21.3 87.6 93.7
Tons milled (millions) 7.3 7.4 7.2 7.5 7.3 29.5 30.6
Strip ratio 1.1 1.0 2.4 1.7 2.4 1.5 2.4
Site operating cost per ton milled (CAD$) $9.13 $9.47 $9.67 $9.59 $9.41 $9.47 $9.83
Copper concentrate
Grade (%) 0.319 0.259 0.252 0.228 0.269 0.264 0.272
Recovery (%) 87.0 85.9 84.1 84.4 84.9 85.5 85.1
Production (million pounds Cu) 40.7 33.1 30.6 28.8 33.1 133.2 141.2
Sales (million pounds Cu) 40.4 29.8 30.3 30.5 33.7 131.1 141.4
Inventory (million pounds Cu) 5.6 5.4 2.1 1.9 3.4 5.6 3.4
Molybdenum concentrate
Production (thousand pounds Mo) 764 185 - - - 949 963
Sales (thousand pounds Mo) 798 105 - - - 903 1,003
Silver (in copper concentrate)
Sales (thousand ozs Ag) 77 56 59 57 63 249 293
Per unit data (US$ per pound)*
Site operating costs* $1.23 $1.64 $1.77 $1.81 $1.55 $1.58 $1.65
By-product credits* (0.11) (0.06) (0.03) (0.03) (0.03) (0.06) (0.06)
Site operating, net of by-product credits* $1.12 $1.58 $1.74 $1.78 $1.52 $1.52 $1.59
Off-property costs 0.36 0.31 0.33 0.33 0.33 0.33 0.37
Total operating costs (C1)* $1.48 $1.89 $2.07 $2.11 $1.85 $1.85 $1.96

OPERATIONS ANALYSIS

Fourth quarter results

Despite challenging weather conditions in the fourth quarter, Gibraltar mill throughput was 7.3 million tons of ore, a similar amount to the previous quarters in 2016. A total of 18.5 million tons were mined during the quarter, at a strip ratio of 1.1. A total of 2.4 million tons of ore was added to stockpile in the period. In addition, the copper head grade for the fourth quarter increased to 0.32%, slightly better than planned.

Copper recovery also increased to 87% compared to 86% in the previous quarter, as a result of higher head grade and continued improvements in operating practices. The higher head grades and recoveries resulted in copper production of 41 million pounds for the fourth quarter, a 23% increase over the third quarter of 2016.

The fourth quarter was the first full quarter that the molybdenum plant has operated since it was restarted in September. A total of 0.8 million pounds of molybdenum were produced in the quarter, with recoveries averaging approximately 50%.

The total site spending has been maintained at a consistent and low level in recent quarters. Site operating cost per ton milled* was $9.13 in the fourth quarter of 2016, which is lower than recent quarters due to increased capitalized stripping.

Site operating costs per pound produced* decreased to US$1.12 in the fourth quarter of 2016 from US$1.58 in the third quarter of 2016 primarily as a result of increased copper production. The higher molybdenum by-product credit and increase in capitalized stripping allocation also contributed to the lower unit cost in the fourth quarter.

Off-property costs were US$0.36 per pound for the fourth quarter of 2016, which is higher than recent quarters as a higher portion of shipments were made to the Company’s joint venture partner at benchmark terms, as opposed to Gibraltar’s normal treatment and refining costs which are lower than benchmark terms.

Total operating costs (C1) per pound* decreased to US$1.48 from US$1.89 in the third quarter of 2016 as a result of increased copper production.

Full-year results

Gibraltar’s copper production in 2016 was 133 million pounds, a 6% decrease over 2015 due to lower average head grade and mill throughput.

Site operating costs* for the year were US$1.58 per pound of copper produced, a 4% reduction from 2015, as the Company realized a full year of benefit from the cost saving initiatives implemented in the prior year. These initiatives included a mine optimization based on a new mine plan, workforce reduction and rationalization, and vendor engagement resulting in decreased cost of supplies and services. The benefit of these cost savings resulted in lower unit costs in 2016, even though copper production was 6% lower than the previous year.

Off property costs were US$0.33 per pound of copper produced, an 11% reduction over 2015 as a result of new long-term contracts for treatment and refining costs and ocean freight.

Total operating costs (C1)* fell to US$1.85 per pound for the year, compared to US$1.96 per pound in 2015.

Health and Safety Milestones

The health, safety, and well-being of our employees, contractors and their families is a priority for Taseko and Gibraltar management. Actual performance is a reflection of that commitment.

For the third straight year (2016), Gibraltar has received the John Ash Safety Award presented by the Ministry of Energy and Mines. This prestigious award goes to the mining operation in British Columbia with the lowest injury-frequency rate that has worked at least one million hours during the year.

TSM Initiatives

Taseko is a member of the Mining Association of Canada and the Mining Association of British Columbia. Both of these organizations require members to participate in a program known as Towards Sustainable Mining (“TSM”) which encourages companies to work towards best management practice standards through self-regulation and reporting on key performance areas. These areas include:
•Energy Use and Greenhouse Gas Emissions Management;
•Biological Diversity Conservation Management;
•Aboriginal and Community Outreach;
•Tailings Management;
•Health and Safety; and
•Crisis Management Planning.

Taseko and Gibraltar’s performance and reporting on performance in all of the areas was verified by an external auditor as being at a level of industry best practice. Further details can be found on the Taseko website.

GIBRALTAR OUTLOOK

Average head grade is expected to be approximately 0.30% in 2017.

Overall, Gibraltar has achieved a stable level of operations consistent with the updated reserve model published in 2015 and the Company continues to focus on further improvements to operating practices to reduce unit costs. During September 2016, the molybdenum circuit at Gibraltar was successfully restarted, and will continue to contribute by-product credits in future periods.

The Canadian dollar is expected to remain at a substantial discount to the US dollar. A weak Canadian dollar contributes to improved operating margins at Gibraltar as approximately 80% of mine operating costs are paid in Canadian dollars.

REVIEW OF PROJECTS

Taseko’s strategy has been to grow the Company by leveraging cash flow from the Gibraltar Mine to assemble and develop a pipeline of projects. We continue to believe this will generate the best, long-term returns for shareholders. Our development projects are located in British Columbia and Arizona and represent a diverse range of metals, including gold, copper and niobium. Total expenditures on projects in 2016 consisted of $5.0 million at the Florence Copper project, $1.7 million on New Prosperity, and $0.8 million on the Aley Project. Taseko will continue to take a prudent approach to spending on development projects.

Florence Copper Project

The Florence Copper project is currently in the final stages of permitting for the Production Test Facility (“PTF”). The PTF will include a well field comprised of thirteen (four injection and nine recovery) commercial scale production wells and numerous monitoring, observation and point of compliance wells, and also an integrated demonstration scale solvent extraction and electrowinning plant.

During 2016, the Company worked with the Arizona Department of Environmental Quality (“ADEQ”) in connection with the amendment to the Temporary Aquifer Protection Permit (“APP”), and with the U.S. Environmental Protection Agency (“EPA”) in connection with the Underground Injection Control (“UIC”) permit.

On August 2, 2016, the Company announced the receipt from the ADEQ of the APP permit. This permit was issued following a public comment period earlier in 2016, and confirms the ADEQ has completed its substantive review and is satisfied with the conditions under which the PTF can operate. In December 2016, the EPA issued the final required permit, the UIC permit, to construct and operate the PTF. Opposing parties have appealed both the APP and the UIC permits granted, but we expect that the regulatory authorities will successfully defend their thorough processes. Both of these two permits are required for construction and operation of the PTF.

On January 16, 2017, the Company announced that completed technical work on the Florence Copper Project has resulted in a significant improvement in project economics. The NI 43-101 technical report documenting these results will be filed on www.sedar.com within 45 days.

Project Highlights:
•Pre-tax net present value of US$920 million at a 7.5% discount rate;
•Pre-tax internal rate of return of 44% with a 2.3 year payback;
•Operating costs of US$1.10 per pound LME grade cathode copper;
•Total life of mine production in excess of 1.7 billion pounds of copper;
•Average annual production of 81 million pounds of copper for the life of mine;
•21 year mine life;
•Total pre-production capital cost of US$200 million; and
•Long-term copper price of US$3.00 per pound.

New Prosperity Project

The two Judicial Reviews initiated by Taseko were heard in federal court over a five day period in the week of January 30, 2017. Both Judicial Reviews focus on the principles of administrative and procedural fairness. Taseko’s allegation is that the Government of Canada, through the conduct of the environmental assessment and the decisions which resulted from it, failed in their obligation to uphold those fundamental principles. A decision is expected from the court within six to nine months.

On February 12, 2016, Taseko announced that it had filed a civil claim in the BC Supreme Court against the Canadian federal government. The claim seeks damages in relation to the February 25, 2014 decision concerning the New Prosperity Project in that the Government of Canada and its agents failed to meet the legal duties that were owed to Taseko and that in doing so they caused and continue to cause damages, expenses and loss to Taseko.

Taseko is proceeding with its request to amend the British Columbia environmental assessment certificate for the New Prosperity Project. In addition, Taseko has filed a Notice of Work (“NOW”) with the Ministry of Energy & Mines which will allow the Company to gather information to advance mine permitting under the British Columbia Mines Act.


The Company will host a telephone conference call and live webcast on Thursday, February 23, 2017 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific) to discuss these results. The conference call may be accessed by dialing (877) 303-9079 in Canada and the United States, or (970) 315-0461 internationally.

The conference call will be archived for later playback until March 2, 2017 and can be accessed by dialing (855) 859-2056 in Canada and the United States, or (404) 537-3406 internationally and using the passcode 69507435.

For further information on Taseko, please see the Company’s website www.tasekomines.com

This release should be read with the Company’s Financial Statements and Management Discussion & Analysis ("MD&A"), available at www.tasekomines.com and filed on www.sedar.com. Except where otherwise noted, all currency amounts are stated in Canadian dollars. Taseko’s 75% owned Gibraltar Mine is located north of the City of Williams Lake in south-central British Columbia. Production volumes stated in this release are on a 100% basis unless otherwise indicated.