Taseko eyes restart of molybdenum circuit as prices rise

JOHANNESBURG (miningweekly.com) – With molybdenum prices starting to recover, dual-listed Taseko Mines is considering its options to restart the molybdenum circuit at the Gibraltar mine, in British Columbia.

The recent edging up of the price of molybdenum to $6.50/lb prompted the Canada-headquartered firm to consider the possibility of placing the operation back on track after being idled since the third quarter of 2015, owing to the low market price of the commodity.

“We believe we can produce molybdenum for roughly $4/lb which, at [the current] price level, would generate a significant by-product credit from molybdenum production and improve our overall operating margin,” said Taseko president and CEO Russell Hallbauer this week.

HALF-YEAR PERFORMANCE
Meanwhile, during the quarter to June, Taseko reported copper production of 30.6-million pounds from its Gibraltar operations, higher than the first quarter of 2016, as a result of the expected increase in copper head grade.

The increased copper production resulted in site operating costs decreasing from $1.78/lb in the first quarter of 2016 to $1.74/lb during the quarter under review.

Total second-quarter operating costs dipped to $2.07/lb and are expected to drop further to below $2/lb, when copper grades increase in the second half of the year.

“We produced slightly more copper in the second quarter, compared with the first quarter, mainly as a result of improved copper grades. Throughput per operating day increased quarter-over-quarter, although total tons milled was impacted by maintenance downtime associated with a number of business improvement projects,” he said.

During the second quarter, 7.2-million tons of ore, an average of 79 400 t/d, or 93% of design capacity, were milled.

“Mining productivities increased quarter-over-quarter, owing to short waste hauls associated with the ability to backfill a mined-out section of the granite pit.

“We made a decision to take advantage of the higher productivities and mined an additional five-million tons of waste this quarter instead of idling equipment and reducing spending,” Hallbauer explained.

Gibraltar mined 26.2-million tons during the quarter, resulting in a strip ratio of 2.4 – above the life-of-mine average – and providing access to higher-grade ore earlier than originally planned.

Gibraltar’s copper production guidance for the year is between 130-million pounds and 140-million pounds, with a 0.24% and 0.30% average head grade expected in the third and fourth quarters respectively.

The higher head grades are expected to continue into 2017.

Taseko ended the second quarter with a cash balance of $89-million.