March 30, 2023, Vancouver, BC – Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) (“Taseko” or the “Company”) is pleased to announce the results of recent technical work and updated economics for its 100%-owned Florence Copper Project, located in Arizona, U.S.A (the ‘Florence Copper Project” or “Florence Copper”). The Company has filed a new technical report entitled “NI 43-101 Technical Report – Florence Copper Project, Pinal County, Arizona” dated March 30, 2023 (the “Technical Report”) on SEDAR. The technical report was prepared in accordance with NI 43-101 and incorporates updated capital and operating costs for the commercial production facility and refinements made to the operating models, based on the Production Test Facility (“PTF”) results.
The technical work completed by Taseko in recent years has been extensive and has de-risked the project significantly. The PTF operated successfully over an 18-month period and provided a valuable opportunity to test operational controls and strategies which will be applied in future commercial operations. In addition, a more sophisticated leaching model has been developed and calibrated to the PTF wellfield performance. This detailed modeling data, along with updated costing, has been used to update assumptions for the ramp up and operation of the commercial wellfield and processing facility.
Project Highlights:
Net present value of US$930 million (after-tax, at an 8% discount rate)
Internal rate of return of 47% (after-tax)
Payback period of 2.6 years
Operating costs (C1) of US$1.11 per pound of copper
Annual production capacity of 85 million pounds of LME grade “A” cathode copper
22 year mine life
Total life of mine production of 1.5 billion pounds of copper
Total estimated initial capital cost of US$232 million remaining
Long-term copper price of US$3.75 per pound
Stuart McDonald, President & CEO of Taseko, stated, “Despite global cost inflation in recent years, the Florence Copper Project continues to demonstrate robust economics and remains one of the lowest capital intensity copper development projects in the world.The operational experience and technical information that we gained through the PTF testwork has been invaluable and we’re well positioned to build and operate the commercial-scale ISCR facility. The new Technical Report includes updated capital cost estimates based on detailed engineering and recent contractor and vendor quotations. The main cost increases relate to construction labour and wellfield drilling costs which impact both initial and sustaining capital costs.”
“The inflationary environment we have been in has also driven copper prices higher. With a lack of new mines being developed today and copper’s critical role in the global energy transition, the long-term price outlook remains very attractive for copper producers.The low-carbon, low impact production method at Florence Copper is expected to make it a preferred supplier of green, low carbon copper in the US domestic market. With procurement of long-lead items well advanced, we are ready to commence construction of the commercial facility following the issuance of the final UIC permit in the coming months,” Mr. McDonald concluded.
In-Situ Copper Recovery (“ISCR”)
The extraction method proposed for the Florence Copper Project is ISCR. ISCR extracts copper by injecting a weak sulfuric acid solution, referred to as raffinate, through targeted portions of the mineral deposit using an array of injection wells. The raffinate passes through natural fractures and voids in the deposit and dissolves the copper mineralization. The copper laden solution, known as pregnant leach solution (“PLS”), is collected in recovery wells where it is pumped to the surface for processing. Copper is extracted from the PLS using solvent extraction and electrowinning (“SX/EW”) techniques producing a saleable copper cathode product.
Production Test Facility (“PTF”)
Florence Copper operated a demonstration scale ISCR facility referred to as the PTF, where leaching under commercial operating conditions was completed between December 2018 to June 2020. The PTF facilities included an ISCR wellfield, an SX/EW processing plant, an acidic reverse-osmosis water treatment plant, a water impoundment, run-off pond, and associated infrastructure. The PTF wellfield was comprised of four injection wells, nine recovery wells, seven observation wells, and four multilevel sampling wells.
The purpose of the PTF was to demonstrate hydraulic control and confirm the oxide ore zone behaves hydrologically as an equivalent porous media thereby ensuring protection of underground sources of drinking water. Secondly, the PTF provided an opportunity to test operational controls and strategies to inform future commercial scale operations.
The PTF well field is located on the northern portion of the deposit specifically selected in a challenging hydrogeological position to demonstrate hydraulic control. The well field is situated at the edge of a graben with major faults running though the surrounding area. The location was also selected to represent the ore to be leached at the start of commercial production.
The well field was designed using the same well spacing and construction methods as those planned for the commercial-scale ISCR facility. Hydraulic performance data generated during PTF testing and operations have provided important information supporting the design and operations planning for the commercial-scale well field.
Leaching of the PTF wellfield began in December 2018 and continued under commercial operating conditions until June 2020, after which fresh acid addition was stopped and the leaching phase was ramped down and concluded with the shutdown of the process plant by end of October 2020. The PTF well field was then subsequently transitioned into a rinsing phase which is currently still in progress.
The PTF was successful in demonstrating that copper could be produced feasibly and also that hydraulic control of process solutions in the ISCR well field could be established and maintained to ensure protection of underground sources of drinking water. It has also further confirmed that the oxide ore zone behaves hydraulically as an equivalent porous media.
PTF operations provided valuable data to test operational controls and strategies to inform future commercial scale operations. Employment of strategies such as reverse flow, use of inflatable packers to target areas of the formation, and varying acid application rates through increased raffinate injection flows and or acid strengths all proved to be beneficial tools to effectively manage the leaching operation.
Sweep Efficiency
Sweep efficiency is defined as the fraction of the pore space contacted or ‘swept’ by the injected solution as it flows from injection to recovery well. Sweep efficiency increases over time as leaching progresses and more ore is contacted by process solutions. The ultimate sweep efficiency achieved over the duration of leaching indicates the proportion of the ore from which copper will be recovered.
The geophysical monitoring for the central recovery well found that all of the monitored ore zone was contacted by leach solutions in the first five weeks of leaching and achieved 90% overall. This result confirms the projected long-term sweep efficiency of 90% used in the model.
Overall Recovery Plan
The total copper recovery to cathode is projected to be 65.8% at an estimated acid consumption of 6.0 lbs/lb copper. PLS grade feeding the SX/EW plant will average 1.7 g/L of copper over the life of the project.
SX/EW Plant Operations
The SX/EW process plant operations commenced in mid-March 2019, following a four-month initial leaching period, and was shut down in October 2020, four months after fresh acid addition to raffinate was stopped resulting in a subsequent depletion of PLS copper grades feeding the plant. For the entire PTF operational run, the plant operated at a high average availability of 99.9% and produced a total of 1.1 million pounds of high-grade copper cathode product from the ISCR leach solutions.
Reserves and Resources
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