Taseko Mines, which produces copper and molybdenum from the Gibraltar mine, in British Columbia, could sell a stake in its next project, the Prosperity gold/copper deposit, to fund development of the asset, investor relations manager Brian Bergot said in an interview on Wednesday. Prosperity, which has measured and indicated resources of 5,3-billion pounds of copper and 13,3-million ounces of gold, is expected to cost about C$807-million, based on a feasibility study completed in late 2007. Bergot said the company is still comfortable with that capex number, but will probably relook at the reserve calculations, to reflect higher gold prices. The reserves, which were calculated at long-term metal price assumptions of $575/oz for gold and $1,50/lb for copper, currently stand at 2-billion pounds of copper and 4,7-million ounces of gold. “So that could add a million ounces of gold to the reserve and half a billion pounds of copper,” he said. The project is currently working its way through the environmental-impact assessment processes at both federal and provincial levels, which Bergot said will likely be finalised towards the end of the first quarter, or early in the second. All the necessary permits to start development work should be secured by mid-2010, he said. To fund the project, Taseko is considering several options, but is aware that raising C$800-million in project finance is a tall order for a company with a market cap of around C$500-million. The company could sell a stake of possibly 30% in the project itself, which would not only reduce its capital cost exposure but bring additional capital The firm has already held preliminary discussions with a number of potential partners, Bergot said. Another option to raise cash for project development could be to sell the gold stream from the mine. GIBRALTAR Taseko announced on Wednesday that production at Gibraltar in the third quarter was affected by a geotechnical problem, related to surface soil instability at the edge of the Granite pit during July. The problem meant ore could only be mined from faces that were well below the pit average grade. The mine, which Taseko restarted in 2004, produced 14-million pounds of copper and 112 000 lb of molybdenum in the third quarter, and full year copper production is expected to come in at between 70-million and 75-million pounds. However, the geotechnical issue was resolved and the mine operations re-established mining faces during August and September and returned to mine plan grade this month. Taseko completed an expansion at Gibraltar from 32 000 t/d to 46 000 t/d through the mill early last year, and launched a second phase of expansion, which will take throughput to 55 000 t/d. When metal prices plunged last year the company froze its capital spending, but things are now rolling again, with about C$30-million left to be spent on the phase-two project, Bergot said. The expansion should be completed by mid-2010, and copper production next year is expected to reach about 90-million pounds, ramping up to 120-million pounds, plus some 1,3-million pounds or so of molybdenum.

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