TASEKO SIGNS GOLD STREAM AGREEMENT
WITH FRANCO-NEVADA FOR 22%
OF FUTURE GOLD PRODUCTION FROM PROSPERITY FOR US$350 MILLION
PLUS FRANCO NEVADA WARRANTS
May 12, 2010, Vancouver, BC - Taseko Mines Limited
(TSX: TKO; NYSE Amex: TGB) ("Taseko" or the "Company") announces
it has entered into a gold stream transaction with Franco-Nevada Corporation
(TSX:FNV) ("Franco-Nevada"), under which Franco-Nevada will purchase
gold equal to 22% of the life of mine gold to be produced by Taseko from its
proposed Prosperity Gold and Copper Mine ("Prosperity") in British
Columbia (the "Transaction").
Taseko will receive staged cash deposits in aggregating US$350 million to
be paid during mine construction as well as 2 million Franco-Nevada warrants
to be issued on the date of the first advance of the cash payment. For each
ounce of gold delivered to Franco-Nevada, Taseko will receive a further cash
payment of US$400 (subject to an inflationary adjustment) or the prevailing
market price, if lower. The deposit will be credited with the difference between
US$400 and the market price of gold for each ounce delivered until the deposit
is fully credited. Each warrant will be exercisable to purchase one Franco-Nevada
common share at a price of $75.00 until June 16, 2017 and will be listed under
the same terms as the warrants listed on TSX under the symbol FNV.WT.A.
The investment by Franco-Nevada is subject to full financing of the project
and receipt of all material permits to construct and operate the Prosperity
project and will be staged such that the timing of Franco-Nevada's payments
will be concurrent with Taseko's funding of the equity portion of the
capital requirements of Prosperity.
Russell Hallbauer, President and CEO of Taseko, commented "We are very
pleased to be entering into this long-term relationship with Franco-Nevada.
It is an endorsement of the quality of our project that we have been able
to attract the interest of a company of the calibre of Franco Nevada as a
participant in the advancement of Prosperity. Through this transaction, we
are funding approximately 45% of the planned capital expenditures for Prosperity
by selling 6% of the total gross metal revenue. Combined with cash on hand
and expected cash flow from Gibraltar, we will have Prosperity approximately
80% funded without any debt, leaving a number of available alternatives to
complete the project funding. These include project debt, equity, off-take
sale for debt and the sale of a small minority interest in Prosperity."
Wellington West Capital Markets Inc. is acting as financial advisor to Taseko.
Prosperity
Taseko holds a 100% interest in the Prosperity property, located 125 kilometers
southwest of the City of Williams Lake. The property hosts a large porphyry
gold-copper deposit amenable to open pit mining. Proven and probable mineral
reserves are 830 million tonnes grading 0.41 g/t gold and 0.23% copper, with
recoverable metal of 7.7 million ounces of gold and 3.6 billion pounds of
copper1, which under the present mine design criteria represents
a mine life of 33 years. It is anticipated the Prosperity project could be
commissioned by 2013, subject to timely permitting and construction. On January
14, 2010, Taseko received the environmental assessment certificate for the
project from the British Columbia Provincial Ministry of Environment. This
is an important milestone as it is the provincial government which is responsible
for mine development in British Columbia.
The federal process, conducted by a three-person Panel operating under defined
Terms of Reference, is required to complete their work in a timely and efficient
manner. The hearings commenced in late March and were completed on May 3,
2010. Following conclusion of the hearings, the Panel will submit their findings
to the Federal Minister of Environment for a decision. This process is expected
to complete by the third quarter of 2010.
For further information on Taseko, please see the Company's website www.tasekomines.com
or contact:
Brian Bergot, Investor Relations - 778-373-4545, Toll Free 1-800-667-2114.
Russell Hallbauer
President and CEO
Note 1 - Mineral Reserves at a C$5.50 Net Smelter Return/tonne cut-off.
Recoveries for gold and copper are 69% and 87%, respectively.
No regulatory authority has approved or disapproved of the information contained
in this news release.
Forward Looking Statements
This document contains "forward-looking statements" that were based
on Taseko's expectations, estimates and projections as of the dates as
of which those statements were made. Generally, these forward-looking statements
can be identified by the use of forward-looking terminology such as "outlook",
"anticipate", "project", "target", "believe",
"estimate", "expect", "intend", "should" and
similar expressions.
Forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause the Company's actual results, level of
activity, performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. These included but
are not limited to:
• uncertainties and
costs related to the Company's exploration and development activities,
such as those associated with continuity of mineralization or determining
whether mineral resources or reserves exist on a property;
• uncertainties related
to the accuracy of our estimates of mineral reserves, mineral resources, production
rates and timing of production, future production and future cash and total
costs of production and milling;
• uncertainties related
to feasibility studies that provide estimates of expected or anticipated costs,
expenditures and economic returns from a mining project;
• uncertainties related
to our ability to complete the mill upgrade on time estimated and at the scheduled
cost;
• uncertainties related
to the ability to obtain necessary licenses permits for development projects
and project delays due to third party opposition;
• uncertainties related
to unexpected judicial or regulatory proceedings;
• changes in, and the
effects of, the laws, regulations and government policies affecting our exploration
and development activities and mining operations, particularly laws, regulations
and policies;
• changes in general
economic conditions, the financial markets and in the demand and market price
for copper, gold and other minerals and commodities, such as diesel fuel,
steel, concrete, electricity and other forms of energy, mining equipment,
and fluctuations in exchange rates, particularly with respect to the value
of the U.S. dollar and Canadian dollar, and the continued availability of
capital and financing;
• the effects of forward
selling instruments to protect against fluctuations in copper prices and exchange
rate movements and the risks of counterparty defaults, and mark to market
risk;
• the risk of inadequate
insurance or inability to obtain insurance to cover mining risks;
• the risk of loss of
key employees; the risk of changes in accounting policies and methods we use
to report our financial condition, including uncertainties associated with
critical accounting assumptions and estimates;
• environmental issues
and liabilities associated with mining including processing and stock piling
ore; and
• labour strikes, work
stoppages, or other interruptions to, or difficulties in, the employment of
labour in markets in which we operate mines, or environmental hazards, industrial
accidents or other events or occurrences, including third party interference
that interrupt the production of minerals in our mines.
For further information on Taseko, investors should review the Company's
annual Form 40-F filing with the United States Securities and Exchange Commission
www.sec.com and home jurisdiction filings that are available at www.sedar.com.