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TORONTO (miningweekly.com) – British Columbia base metals miner Taseko Mines this week reported slightly weaker output in the third quarter from its flagship Gibraltar mine, as operations were impacted by lower-than-expected grades.
The Vancouver-based miner, which last month launched a friendly $78.9-million takeover bid for Curis Resources and its in-situ copper recovery and solvent extraction and electrowinning Florence copper project, in central Arizona, on Thursday said its 75%-owned Gibraltar mine produced 35.4-million pounds of copper, down from 36.7-million pounds in the same period a year earlier.
The company also reported 650 000 lb of molybdenum from the Gibraltar mine.
Year-to-date output was 108.4-million pounds of red metal and 1.9-million pounds of molybdenum, which translated to increases of 23% and 96%, respectively, over the same period in 2013.
In the third quarter of 2014, total sales were 38.1-million pounds of copper and 700 000 lb of molybdenum.
Taseko noted that the Gibraltar concentrators operated at design capacity during the period, averaging 85 000 t/d. Total throughput for the quarter was 7.8-million tons, a 15% increase over the same period in 2013.
While the quantity of ore released in the quarter was as planned, head grades were below forecast owing to high-wall-stability issues that affected the quarterly development sequence. Mining operations were temporarily shifted to ore faces with lower-grade ore. The lower-grade ore also negatively impacted recoveries.
During the quarter, one of the large mining shovels required a major undercarriage overhaul, which occurred about every six years of operation. The combination of the pit wall instability, lower head grade and the shovel rebuild had impacted on production and costs for the quarter.
“In the past, we have encountered challenges when mining the bottom of the Granite pit. The recent pit wall movement, which was relatively minor, has resulted in plan adjustments, which will impact on copper production and costs in the short term.
“In conjunction with this event, the longer ore haul out of the bottom of the pit has affected our truck fleet productivities, increasing haulage costs. This is a temporary, cyclical situation, which will be alleviated when operations transition back to the upper benches of the Granite pit in the next few weeks,” Taseko president and CEO Russell Hallbauer explained.
He added that Taseko was currently reviewing alternative mining plans for next year, with the goal of maintaining a healthy profit margin and cash flow.
“As part of this review, we are investigating options to address the lower-than-budgeted waste stripping in 2014, [owing] to shovel availability issues in the first half of the year and the delayed ore release, resulting from the pit wall movement. We have a number of options available to us and will move forward with a plan that addresses these two issues while ensuring the best overall operating margins,” Hallbauer stated.
He highlighted that the weaker Canadian dollar in the past few months helped offset a moderate decline in copper prices, which in Canadian-dollar terms had remained flat since the middle of the year.
“Also important is our hedging programme, which mitigates our risk to a declining copper price. During the third quarter, we extended our copper put options through the first quarter of 2015. We are now protected at $2.75/lb in the fourth quarter and $3/lb in the first quarter for roughly one half of our share of Gibraltar copper production. We will look for opportunities to extend the put options beyond the first quarter,” Hallbauer noted.
Gibraltar is a joint venture owned by Taseko and Cariboo Copper.