When reflecting on 2021, I’m very happy with the many accomplishments Taseko managed during a second
straight year of unusual challenges. While the global pandemic continued to impact our daily lives for most
of the year, we have remained diligent at our worksites and focused on keeping our employees safe and our
operations running efficiently.
We saw record copper prices during 2021, and the price has averaged nearly US$4.50 per pound over the
last 12 months as markets are now recognizing the critical role of copper in the global shift to renewables
and electrification. Taseko, with its growing copper production base, is very well positioned to benefit from
the rising copper price environment.
Letter to Shareholders
from President & CEO Stuart McDonald
Financial
From a financial perspective, 2021 was undoubtedly a success. We
capitalized on exceptionally strong copper prices and increased annual
Earnings from Mining Operations* by 93% and Adjusted EBITDA by 86%,
to $230 million and $201 million, respectively. Adjusted net income was $45
million or $0.16 per share. These tremendous financial results translated into
a 50% increase to our share price during the year.
In February 2021, management took advantage of strong capital markets to
refinance Taseko’s bonds, which were coming due in 2022. We were able
to refinance the existing $250 million senior notes at a lower interest rate
and, at the same time, take advantage of strong investor demand to upsize
the bond offering to US$400 million to secure additional funds needed to
finance the Florence Copper Project. Over the year, Taseko generated $175
million of cashflow from operations, and we ended 2021 with a strong cash
balance of nearly $240 million. The significantly improved balance sheet
puts us in a very strong position to build out the Florence project.
EARNINGS FROM MINING
OPERATIONS*
$230 Million
93%
ADJUSTED EBITDA
$201 Million
86%
ADJUSTED NET INCOME
$45 Million
ADJUSTED EARNINGS PER SHARE
$0.16
MAY 2022
2021 ANNUAL
HIGHLIGHTS
* Before depletion and amortization
Gibraltar
From an operational perspective, severe weather events presented significant
and diverse challenges at several times during the year. Gibraltar operations, as
well as the transportation infrastructure needed to move our copper concentrate,
were impacted from record heat in the summer, extremely heavy rains in the
fall and a major winter storm in December. These weather events presented
significant challenges for our operations teams, who worked very hard to
mitigate their impact to production.
Even with these weather related challenges, plus 2021 being a lower grade year,
Gibraltar still managed to produce 112 million pounds of copper and two million
pounds of molybdenum. We expect increased production in 2022 as our mining
operations transition in to the Gibraltar pit.
Early in 2022, we announced a new Gibraltar mineral reserve, extending the
mine life by 40% to 23 years. With a dramatic shift in the copper market outlook
we were able to update Gibraltar’s pit design and increase the mineable reserves
by 200 million tons, still using a conservative copper price of US$3.05 per pound.
At a long-term consensus copper price of US$3.50 per pound, our 75% share of
Gibraltar’s net present value is now $1.1 billion.
Gibraltar also recently renewed a Participation and Cooperation Agreement
with the Williams Lake First Nation (“WLFN”). The agreement provides clear
mechanisms to advance employment and contracting opportunities for WLFN
members, as well as education, training, and community development initiatives.
MAY 2022
TASEKO MINES LIMITED
LETTER TO SHAREHOLDERS
COPPER
112 Million LBS
MOLYBDENUM
2 Million LBS
2021 GIBRALTAR
PRODUCTION
Florence Copper
At Florence Copper, great progress was made on detailed engineering for
the commercial production facility, as well as procurement of long-lead
items. Our goal has been to mitigate the impact of global supply chain
delays and inflation, which have been impacting timelines and driving up
capital costs across all sectors. At the time of writing, we are still waiting for
the EPA to commence the public comment period for the Draft Underground
Injection Control Permit, the last permit needed for the project. It has been
an exhaustive permitting process and taken longer than we had originally
anticipated, but we are hopeful that the 45-day public comment period will
MAY 2022
TASEKO MINES LIMITED
LETTER TO SHAREHOLDERS
be commencing soon (if not by the time you are reading this letter). Following
the issuance of this final federal permit, our construction team will be ready to
break ground, moving the project that much closer to production.
Florence Copper is an innovative project that will transform Taseko into a multi-
asset producer. The in-situ recovery process that will be used to extract the
copper will make it one of the most green copper producers globally. Compared
to a conventional open pit copper mine, Florence Copper will use 93% less water,
consume 71% less energy, and emit 83% less carbon. Florence will produce a
99.99% copper cathode which will stay in the US domestic market, reducing
America’s reliance on copper imports. The project was recently nominated for
two environmental excellence awards from the prestigious Arizona Forward
organization in the categories of ‘Circular Economy Solutions’ and ‘Technology
Innovation’. While we did not win either of the awards, our project was a finalist, a
great accomplishment for our project team in Florence and Taseko.
2022 UPDATES
GIBRALTAR MINE
FLORENCE COPPER
Renewed a PARTICIPATION
AND COOPERATION
AGREEMENT with the Williams
Lake First Nation
New mineral reserve extending the
MINE LIFE TO 23 YEARS, a
40% INCREASE over the prior
reserves
FINALIST FOR TWO
ENVIRONMENTAL
EXCELLENCE AWARDS from
the prestigious Arizona Forward
organization
Project Pipeline
Taseko’s successes in 2021 weren’t just limited to Gibraltar and Florence Copper. At Yellowhead, we advanced discussions
with local communities as we move towards initiating the Environmental Assessment (“EA”) process. The long-term
consensus price for copper continues to rise as the world recognizes the critical role that copper will play in the energy
transition, making our Yellowhead project even more valuable. We will be continuing to advance project permitting activities
with the objective to have the project construction ready once Florence Copper has been ramped up and achieves steady-
state production.
We also sold our Harmony Gold Project, to JDS Gold Inc (“JDS”) last summer, a project that had been idled for many years.
With Florence Copper nearing construction and Yellowhead entering the EA process, we did not expect to be in a position
to advance Harmony for a number of years. Taseko retains a 15% carried interest in JDS and a 2% net smelter return royalty
on the project. JDS has a proven track record for developing mineral projects and the Harmony transaction allows Taseko to
participate in its future success and create value from this asset in the near-term.
Comparing to a conventional
open pit copper mine,
Florence Copper will have:
93%
WATER USE
71%
ENERGY CONSUMPTION
83%
CARBON EMISSIONS
GREEN COPPER
PRODUCER
ESG
Finally, a note about environment, social and governance (“ESG”) – an area which is becoming increasingly important for
all public companies. All three aspects of ESG are being increase scrutinized by stakeholders. At Taseko, we have always
operated with ESG at the forefront. If we do not protect the environment and conserve natural resources, operate safely
and in a manner that benefits our employees and operating communities, and continually look for ways to enhance our
performance, we will not have a successful business. Our employees are the backbone of our Company and therefore their
safety and health are a top priority. Strong governance practices, based on stringent regulations, brings accountability to our
management and Board of Directors, and builds the trust of our stakeholders.
In the second quarter of 2022, we will issue our third annual ESG report. When it is published, I encourage everyone to read
it and get a better understanding of our approach to ESG matters. The report can be found and downloaded from the ESG
section of Taseko’s website.
In closing, I am very excited about our company’s future. With the worst of the pandemic hopefully behind us, we are
all looking forward to getting life back to normal. I would like to thank all of our shareholders and stakeholders for their
continued support as we steadily grow our business.
I would also like to thank each of our more than 700 employees in Canada and the United States for their exceptional efforts
over the past year.
Stuart McDonald
President & CEO
MAY 2022
TASEKO MINES LIMITED
LETTER TO SHAREHOLDERS
TSX: TKO NYSE American: TGB LSE: TKO
Taseko Mines Limited
12th Floor - 1040 West Georgia St., Vancouver, BC Canada V6E 4H1
TF: (877) 441-4533 Web: www.tasekomines.com