Executive Summary / Key Takeaways

• Taseko Mines Limited (TGB) is poised for a transformative period, transitioning from a single-asset producer to a diversified North American copper powerhouse with the imminent commissioning of its Florence Copper project.
• Florence Copper, utilizing advanced SX/EW technology, is set to become a low-carbon, energy-efficient, and domestically sourced refined copper producer in the U.S., offering significant value accretion with an after-tax NPV estimated between USD 1.2 billion and USD 1.3 billion at current copper prices.
• The Gibraltar mine, Taseko's foundational asset, is expected to deliver a strong operational rebound in the second half of 2025, driven by improved grades and recoveries from the Connector Pit, alongside the restart of its SX/EW plant and favorable, near-zero treatment and refining charges (TC/RCs) for 2025 and 2026.
• Long-term growth is underpinned by the Yellowhead and New Prosperity projects, with Yellowhead's updated technical study revealing robust economics (CAD 2 billion NPV, 21% IRR at $4.25/lb copper) and the New Prosperity agreement resolving historical conflicts, unlocking future value potential.
• Despite operational challenges at Gibraltar in early 2025 and commodity price volatility, Taseko maintains a solid balance sheet with approximately CAD 360 million in pro forma liquidity and strategic copper price protection, positioning it to capitalize on surging global copper demand driven by electrification and renewable energy.

The Copper Crucible: Taseko's Strategic Position in a Demand-Driven Market

The global copper market is experiencing a profound shift, fueled by the accelerating demand from electric vehicles, renewable energy infrastructure, and the burgeoning data center industry. This backdrop of surging demand, coupled with strategic incentives for domestic supply, sets a compelling stage for North American copper producers. Taseko Mines Limited, a company with roots tracing back to 1966, has strategically positioned itself to capitalize on this new era, evolving into a focused North American copper business with a pipeline of high-potential assets.

Taseko operates as a mid-tier player within the broader mining industry, distinguishing itself through a concentrated regional focus in North America. This approach offers a degree of regulatory predictability and operational stability that can be advantageous compared to the geopolitical complexities faced by global mining giants like Freeport-McMoRan (FCX), Rio Tinto (RIO), or BHP Group (BHP). While these larger competitors benefit from immense scale and diversified global footprints, Taseko's targeted strategy allows for deeper expertise and potentially more agile execution within its chosen jurisdictions. The company's competitive edge is further sharpened by its innovative approach to copper extraction, particularly with the Florence Copper project.

Florence Copper represents a significant technological differentiator for Taseko. This project employs a solvent extraction and electrowinning (SX/EW) process to produce refined copper cathode. This method is inherently more environmentally friendly and less energy-intensive than traditional smelting, positioning Florence to become one of the lowest carbon and energy-intensive copper producers globally. The tangible benefits are substantial: it will offer domestically-produced, traceable, and high-purity copper metal, directly supporting North American manufacturing and economic security. This technological advantage is particularly pertinent given the U.S. administration's clear incentives for domestic manufacturing of finished copper products, which creates a favorable market for Florence as one of the few U.S.-based suppliers of refined copper. The project's after-tax Net Present Value (NPV) is estimated at USD 930 million at a copper price of $3.75 per pound, but at current prices of approximately $4.40 per pound, this NPV escalates to between USD 1.2 billion and USD 1.3 billion, a value not yet fully reflected in Taseko's equity. This demonstrates the direct financial leverage of its differentiated technology in a strong copper price environment.

Gibraltar's Resurgence and Florence's Imminent Production

Taseko's operational narrative is currently defined by the ongoing performance of its flagship Gibraltar mine and the nearing completion of the Florence Copper project. Gibraltar, a cornerstone asset, has navigated a challenging period but is now poised for a strong rebound. In the second quarter of 2025, mining rates at Gibraltar dramatically increased to 30 million tons, a 31% rise from the first quarter and the best mining quarter in the last four years. This surge was a direct result of advancing into better ground within the Connector Pit, which had previously presented challenging conditions and oxidized ore that impacted productivity and recoveries in early 2025.

Second quarter copper production at Gibraltar was 20 million pounds, consistent with the prior quarter, with copper grades at 0.20% and recoveries at 63%. Total cash costs (C1) for the quarter were reported at $3.14 per pound, influenced by lower capitalized stripping and moly production, as well as costs associated with oxide ore placed on heap leach pads. However, management anticipates a significant improvement in the second half of 2025, with copper grades and recoveries expected to step up meaningfully, moving towards and potentially exceeding reserve grade averages. Molybdenum grades and recoveries are also projected to improve significantly in the latter half of the year, contributing valuable byproduct credits. This operational turnaround is expected to drive a decline in C1 cash costs as production levels rise.

A key operational development at Gibraltar is the restart of its SX/EW plant in late May 2025, after being idle for nearly a decade. While a recent transformer issue caused an estimated 6 to 8 weeks of downtime with less than 1 million pounds of production impact, the plant is expected to contribute 3 million to 4 million pounds of copper cathode in 2025, increasing to 4 million to 5 million pounds in 2026 when the second leach pad comes online. Management believes this plant could operate for at least 15 years, underscoring the long-term value of this incremental production. Furthermore, new sales contracts for 2025 and 2026 feature notably lower, even slightly negative, treatment and refining charges (TC/RCs), which are expected to be near zero for these years, representing a major saving to operating costs.

The Florence Copper project in Arizona is on the cusp of becoming Taseko's second producing asset. With overall project completion exceeding 90% in Q2 2025, activities are rapidly shifting towards commissioning. All wellfield drilling for the construction phase is complete, and the initial injection of solutions is targeted for September 2025, with first copper cathode production anticipated before the end of the year. Construction capital expenditure for Florence totaled USD 239 million by the end of Q2 2025, tracking towards a revised estimate of approximately USD 265 million, with the remaining spend heavily weighted to Q3 2025. Looking ahead, Florence is expected to produce 40 million to 50 million pounds of copper in 2026, ramping up to 80 million pounds or higher in 2027, with a design capacity of 85 million pounds per year. Taseko has also applied for a U.S. Department of Energy tax credit of up to $110 million USD for Florence, with an award expected in mid-January, which could provide additional funding.

Financial Resilience and Strategic Growth Pipeline

Taseko's financial performance in the first half of 2025 reflects the transitional period at Gibraltar and the significant capital investment in Florence. In Q2 2025, the company reported $116 million in revenue from the sale of 19 million pounds of copper at an average realized price of $4.32 per pound. Adjusted EBITDA for the quarter was $17 million, impacted by lower production and sales volumes and higher costs associated with mid-grade stockpiles. The company posted a net income of $22 million, or $0.07 per share, primarily driven by an unrealized foreign exchange gain on its U.S. dollar-denominated debt. On an adjusted earnings basis, Taseko reported a net loss of $13 million, or $0.04 loss per share.

Despite these figures, Taseko maintains a robust liquidity position. The company ended Q2 2025 with $122 million in cash, including a $75 million payment from the BC government related to the New Prosperity Agreement, and current liquidity of just under $200 million after accounting for a $55 million drawn revolving credit facility.

Subsequent to Q3 2024, Taseko further strengthened its financial flexibility by amending and expanding its revolving credit facility to $110 million USD, extending its maturity to the end of 2027, with the facility currently undrawn. The company also utilized an at-the-market (ATM) equity offering in 2024, raising CAD 37.3 million, which provided additional cash to support growth initiatives and offset the impact of the 2024 Gibraltar labor strike on cash flows.

To mitigate copper price volatility, Taseko has price protection in place for the balance of 2025, covering 54 million pounds of production at a minimum price of $4.00 per pound, and is actively seeking to extend this protection into 2026 to support Florence's ramp-up.

Beyond its operating and near-term producing assets, Taseko possesses a compelling growth pipeline. The Yellowhead Copper Project, located in British Columbia, represents a major long-term opportunity. An updated technical study released in Q2 2025 significantly improved the project's economics, outlining a mine that would produce 178 million pounds of copper annually over a 25-year mine life at an average cash cost of approximately $1.90 per pound. At a copper price of $4.25 per pound, Yellowhead boasts an NPV of CAD 2 billion and an after-tax IRR of 21%. The project formally commenced its environmental assessment process in Q2 2025, with the initial project description accepted by both provincial and federal agencies. This project, acquired for only $16 million a few years ago, stacks up very well against other North American copper development projects.

The New Prosperity Project, a world-class copper-gold deposit, also saw a significant breakthrough in June 2025 with a historic agreement between Taseko, the Tsilhqot'in Nation, and the Province of British Columbia. This agreement resolves years of litigation and provides a framework for future development with the consent of the Tsilhqot'in Nation. Taseko received a $75 million cash payment from BC and retains a 77.5% ownership of the mineral rights, which can be divested at any time. While development is contingent on Indigenous consent, this resolution unlocks significant long-term value from a previously encumbered asset.

Risks and Outlook

Despite the compelling growth story, investors should consider several key risks. Operational challenges at Gibraltar, such as the recent transformer issue at the SX/EW plant or unexpected ground conditions in the Connector Pit, can impact production and costs. Copper price volatility, particularly the rapid shifts seen in the COMEX market due to tariff news, remains a factor, although the LME global benchmark has remained stable. Permitting timelines for large-scale projects like Yellowhead, while benefiting from governmental focus on acceleration, still present inherent uncertainties. Furthermore, long-term operating costs for Florence will be influenced by the price and supply of sulfuric acid, though Taseko is actively securing supply from within the U.S..

Looking ahead, Taseko's outlook is robust. Gibraltar is expected to deliver 2025 copper production in the range of 120 million to 130 million pounds, with a strong weighting to the second half of the year. Florence Copper is on track for first cathode production by year-end, with a ramp-up to 40-50 million pounds in 2026 and over 80 million pounds in 2027. The strategic resolution of the New Prosperity conflict and the strong economics of Yellowhead provide substantial long-term optionality. The company's focus on North American assets, coupled with the Florence project's low-carbon SX/EW technology, positions Taseko favorably within a global market increasingly prioritizing secure, sustainable, and domestically sourced critical minerals.

Conclusion

Taseko Mines Limited stands at an inflection point, transitioning from a reliable single-mine operator to a diversified North American copper producer with significant growth catalysts. The imminent production from Florence Copper, a technologically advanced and strategically located asset, is set to fundamentally transform the company's financial profile, driving substantial increases in earnings and cash flow. This transformation is complemented by the anticipated operational rebound and cost efficiencies at the Gibraltar mine, ensuring a stable cash-generating base.

The long-term value proposition is further enhanced by the Yellowhead and New Prosperity projects, which offer considerable future growth potential in a copper-hungry world. While operational risks and commodity price fluctuations are inherent to the mining sector, Taseko's strengthened balance sheet, strategic price protection, and commitment to disciplined project execution provide a solid foundation. The company's emphasis on low-carbon production and domestic supply aligns with prevailing industry trends and governmental priorities, reinforcing its competitive standing. For discerning investors, Taseko presents a compelling opportunity to participate in the unfolding narrative of North American copper supply, driven by strategic asset development and technological leadership.