Taseko fleshes out Fish Lake operation

Development of the Fish Lake copper-gold deposit, southwest of Williams Lake, B.C., is coming into focus for owner Taseko Mines (VSE).

Consultant Kilborn Engineering Pacific is nearly finished a prefeasibility study of a 66,000-ton-per-day open-pit mine and mill.

Minable reserves are estimated at 744 million tons grading 0.236% copper and 0.0127 oz. gold per ton at an overall stripping ratio of 1.6-to-1. The capital cost for the complex and related infrastructure is estimated to be $460 million, including contingency and working capital. (Startup costs are not restricted to the capital cost.)

Taseko hopes to find a buyer for the deposit and is soliciting offers for the company. Based on the recent trading level of about $16 per share and the 12.3 million shares outstanding on a fully diluted basis, a buyer would have to add another $200 million to the cost of getting the mine up and running. As a result of processing tests, copper and gold recoveries are projected to be 87.3% and 73.2%, respectively, based on conventional crushing, grinding and staged flotation. Yearly output is estimated at 222,360 oz. gold, 99 million lb. copper and 530,000 oz. silver — all of which is contained in 204,000 tons of concentrate.

Taseko notes that, once in production, Fish Lake will rank among Canada’s largest and lowest-cost producers of gold and copper.

Based on prices of US$395 per oz. gold and US$1 per lb. copper and a Canadian dollar worth US73 cents, the average net smelter return is estimated at $7.93 per ton of ore. This compares with a projected cash operating cost of $4.71 per ton of ore.

Net of copper and silver credits, the cash cost of production averages US$147 per oz. gold (or about US43 cents per lb. copper net of gold and silver credits).

Taseko expects to apply for a mine development certificate this fall and foresees startup in the last half of 1997.