Metals miner Taseko Mines is preparing for a nearly fourfold increase in its copper production by the middle of the decade, as the Vancouver-based company advances plans to add 285-million pounds a year of the metal from planned mines in the US and Canada.

Taseko’s 70%-owned Gibraltar mine, in British Columbia produced 160-million pounds of copper last year, and by 2025, the company will be producing close to 390-million pounds a year from its North American mines.

The miner plans to add 85-million pounds a year of copper production from its Florence project, in Arizona, by 2022 and then another 200-million pounds from Yellowhead, British Columbia, by 2025.  

“A 280% production growth profile over six years . . . cannot be matched by any company in our sector and could be well timed with a growing copper supply deficit," said CEO Russell Hallbauer.

Taseko detailed its production growth plans in a statement that mainly dealt with the “reworked” development concept for the Yellowhead project, which it bought for C$13-million in stock last year.

In a new technical report, filed on Thursday, the company stated that the mine would produce 200-million pounds a year at an average copper cost of $1.43/lb in the first five years of its 25-year life. Life-of-mine production comes to 180-million pounds at $1.67/lb.

"With an average copper equivalent grade of 0.35% combined with a very low onsite operating cost of C$10 per tonne milled the mine site operating margin is a robust C$16 per tonne, or roughly C$500-million per year for the first five years, at $3.10 per pound copper,” stated Hallbauer.

Over 25 years, Yellowhead will produce more than 4.4-billion pounds of copper, 440 000 oz of gold and 19-million ounces of silver. The gold and silver alone would generate by-product revenues of more than C$1-billion.

The project boasts a pretax net present value (NPV) of C$1.3-billion, at consensus metal price assumptions, which is a C$500-million increase over the 2014 feasibility study, and with only a 10% increase in price assumptions, the pretax NPV climbs to C$2-billion.

Hallbauer noted that the optimisations and modifications made to Yellowhead would not only be beneficial to the economics of the project, but would also improve it from an environmental assessment process standpoint.

The new technical report calculates a pretax internal rate of return of 18% with a 4.2 year payback.

Taseko estimated capital cost of C$1.3-billion, or $12 000/t of mill throughput capacity, which the company stated was about half the development costs of copper projects in other parts of the world.

"Based on the new project development plan, our acquisition cost equates to roughly one-third of a penny per pound of copper in reserves, or 0.01x net-asset value (NAV). By comparison, acquisitions of other feasibility stage projects in the past have been as high as 1.0x NAV. Given this project's large ore reserves of 820-million tonnes, its geographic location near a major transportation and infrastructure corridor and its compelling copper/gold/silver exposure, this is one of the best acquisitions in the sector," added Hallbauer.

While the group’s primary focus remained on the advancement of the Florence project, in Arizona, he said that Taseko would progress Yellowhead “expeditiously as the timing will fit in ideally after Florence Copper achieves commercial production”.

Taseko is considering the merits of selling an interest in Yellowhead to a joint venture partner.