TORONTO (miningweekly.com) – Despite missing analyst expectations, NYSE- and TSX-listed base-metals producer Taseko Mines has reported second-quarter production of 28.1-million pounds of copper, a 21% increase over the previous quarter, as the company’s flagship Gibraltar mine, in British Columbia, ramped up production from its recently commissioned Concentrator 2 as part of the Gibraltar Development Plan III (GDP III).

Molybdenum production for the second quarter was 333 000 lb, 6% lower than the first quarter’s 355 000 lb output.

Taseko reported that total copper sales in the second quarter rose by 25% to 27.8-million pounds, as a result of the increased production, as well as improved inventory and logistics management. Molybdenum sales totalled 317 000 lbs.

The company’s 75% share of second-quarter sales was up 30% to 20.9-million pounds of copper and down 6% to 238 000 lb for molybdenum.

The ramp-up of the new concentrator progressed during the second quarter, as operations and maintenance crews continued to fine-tune and optimise equipment and operating parameters. Taseko said the new concentrator had met all expectations and was beginning to consistently achieve throughput and recovery design criteria.

The overall availability of both concentrators was 83% for the quarter, 11% lower than the targeted rate of 93.5%. Copper recoveries in both concentrators improved during the second quarter, averaging 86%, and remained a focus for improvement. It was expected that, by the fourth quarter, recoveries would be at the design rate of 89%.

Laurentian Bank Securities Equity Research mining analyst Christopher Chang on Tuesday said in a note to clients that, despite the company’s performance being slightly below his expectations, he remained “impressed” with the overall progress made with the GDP III ramp-up.

“With sequential improvement in mill throughput and copper recoveries, we anticipate unit costs should decrease going forward as copper production improves. While total mill throughput in the first half of the year was likely below the company’s official guidance of 12-million to 14-million tons, we do not believe the market has given Taseko full credit for this target due to the ramp-up challenges the company had experienced in its previous expansions.

“As a result, we do not see significant downside to the company’s share price should the operation fall short of its 2013 mill throughput guidance of 26-million to 29-million tons,” he said.

Taseko president and CEO Russell Hallbauer noted that the ongoing ramp-up of the new concentrator and the improved copper recovery had already resulted in increases in monthly copper and molybdenum production, while costs were already starting to decrease.

“Our focus on constructing and commissioning the new plant on time and on budget, combined with operating cost reductions, will generate a very compelling return on investment and strong cash flow going forward, even during periods of volatile metal markets,” he said.

Gibraltar is a joint venture owned 75% by Taseko and 25% by Cariboo Copper Corp.