Taseko Mines Poised for Growth as Copper Prices Rise
The 14% increase in copper prices since the start of 2024 has led to mixed results among copper miners, with the Global X Copper Miners ETF (COPX) seeing little movement. However, some miners have significantly outperformed, including Taseko Mines, which has gained 8% this year.
Taseko’s operations in Canada and the U.S. place it in Tier-1 mining jurisdictions, ensuring stability and regulatory clarity. The company generates strong free cash flow from its existing Gibraltar mine while developing the low-cost Florence copper project in Arizona, which is expected to boost production significantly.
Q4 Performance and Outlook
Taseko's Q4 2024 results were mixed, with copper production declining 16% year-over-year to 28.5 million pounds due to lower head grades and reduced recovery rates. However, revenues increased by 9% to CAD$167.8 million, benefiting from higher copper prices, which averaged $4.13 per pound in Q4 and have since risen to $4.51 per pound in early 2025.
The company aims to grow full-year production from 106 million pounds in 2024 to 120-130 million pounds in 2025, aided by increased mill throughput and higher molybdenum by-product grades. Production will be weighted toward the latter half of the year as the Gibraltar mine transitions to the connector pit. Free cash flow remained negative at CAD$0.14 per share due to capital expenditures for the Florence project, which is expected to generate long-term returns upon becoming operational.
Taseko ended the quarter with CAD$172.7 million in cash and available liquidity of CAD$331 million, against total debt of CAD$797.2 million. With Florence expected to drive EBITDA and cash flow growth, the company is positioned for deleveraging in the coming years.
Florence Copper Project: A Game-Changer
The Florence project, utilizing in-situ recovery technology, is set to begin production in late 2025 and ramp up in 2026, adding 85 million pounds of copper annually—a 70% increase in Taseko’s total output. With C1 costs of only $1.11 per pound, Florence’s low-cost production model is expected to improve margins significantly.
Impact of Tariffs
Taseko anticipates no major impact from potential U.S. tariffs on copper imports. Sales from Gibraltar primarily go to Asia, and procurement for Florence is already completed, ensuring minimal exposure to trade restrictions. If tariffs are imposed, domestic producers like Taseko’s Florence Mine could benefit from higher U.S. copper prices.
Valuation and Investment Outlook
Taseko currently trades in line with peers but does not yet reflect the full impact of the Florence mine’s upcoming production boost. With a strong growth outlook and a diversified asset base in stable jurisdictions, the company is positioned for long-term value creation. However, risks remain, including copper price volatility and regulatory challenges in Tier-1 jurisdictions.
