TORONTO (miningweekly.com) – TSX- and Amex-listed Taseko Mines has bought $17,5-million of its convertible bond from two holders, reducing the company's long-term debt, it announced on Tuesday.

The five-year bonds, which were issued in August 2006, have a conversion price of $3,35 a share and carry a coupon of 7,125%.

While the bonds do not mature until 2011, the bondholders hold a one-time right to redeem the bond at 100,6% in August 2009.

Taseko moved to buy back the bonds because it anticipated that the holders would exercise this option, the firm said.

"Based on our current cash position and forecasted cash flow, we feel the prepayment of these bonds, at a discount, was a prudent step for Taseko to take,” said CFO Peter Mitchell.

“In addition to reducing this liability, the transaction also decreases the dilutive effects of the bonds by 5,2-million shares.”

The company will continue to evaluate options in anticipation of the put of the remaining $12,5-million of convertible bonds and expects to have a plan in place ahead of the August put option date.

Meanwhile, Taseko has also extended the term of a copper hedge facility that it put in place last month.

The hedge, which ensures the company will receive a minimum price of $1,88/lb on 50% of copper output, was initially set up to last until December 2009.

“Given the recent copper pricing strength, we have extended the term of the hedge through March 2010 with a new minimum price of $2,00, at the same 50% level,” said CEO Russell Hallbauer.

Taseko's flagship asset is the Gibraltar copper/molybdenum mine in British Columbia, Canada, which it restarted in 2004 and is expanding.

The company's shares declined 1,51% on Tuesday, to C$1,96 apiece by 15:16 in Toronto.

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