Taseko Mines looking for buyer

With this year’s 9-hole drilling program on the Fish Lake deposit near Williams Lake, B.C., complete, Taseko Mines (VSE) is searching for a buyer.

Taseko is the operator of the project under a 3-year agreement with Cominco (TSE). The agreement calls for the two companies to split the proceeds of any sale using a scaled formula based on price. If the property is sold for more than $70 million, for example, Cominco will receive 40% to a maximum of $48 million.

As reflected by Taseko’s recent share price of more than $9 and its fully diluted 8.8 million shares, the market currently believes the property is worth over $125 million.

Jeff Franzen, project director, notes that major companies may be interested in buying an option on the property in conjunction with a work commitment. This would give a major the opportunity to do its own prefeasibility work during a prescribed time limit. If the company decided not to proceed with the purchase of the property, the option cost and subsequent expenditures would be forfeited.

Taseko drilled nine holes on the property in a cross-pattern measuring 1,600 ft. east-west and 2,000 ft. north-south using 330-ft. stepouts. The holes returned an average intersection of 2,182 ft. grading 0.32% copper and 0.016 oz. gold per ton.

Preliminary estimates put reserves at 600 million tons grading 0.32% copper and 0.016 oz. gold at a 0.4% copper-equivalent cutoff. The deposit is roughly cylindrical, measuring 1,600 ft. in diameter and 2,500 ft. in depth. Further stepout drilling on all sides will be required to determine full extent of the deposit as well as the stripping ratio.

A limited amount of shallow drilling by previous operators indicates a 0.2% copper-equivalent cutoff boundary would extend the deposit up to 800 ft. to the northwest and 150-300 ft. in other directions from the 0.4% copper-equivalent cutoff boundary.

With a pit-wall angle of 45 degrees and a depth of 2,500 ft., the edge of the ultimate pit would extend over 2,500 ft. in all directions from the edge of the current 0.4% copper-equivalent cutoff outline. The resulting strip ratio would be over 5-to-1 if the surrounding material is all waste. Franzen notes that a mining operation may not ultimately take the entire reserve but include a smaller portion at the pit bottom in order to optimize the strip ratio.

If a buyer is not found, Taseko plans to proceed with prefeasibility work next spring.