EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 Taseko Mines Limited: Exhibit 99.1 - Filed by newsfilecorp.com

 

 

 

 


Condensed Consolidated Interim Financial Statements

March 31, 2024

(Unaudited)

 

 

 



TASEKO MINES LIMITED
Condensed Consolidated Interim Balance Sheets
(Cdn$ in thousands)
(Unaudited)
               
      March 31,     December 31,  
  Note   2024     2023  
               
ASSETS              
Current assets              
Cash and equivalents     157,661     96,477  
Accounts receivable     13,296     16,514  
Inventories 9   140,604     122,942  
Prepaids     6,284     8,465  
Other financial assets 10   4,643     5,057  
      322,488     249,455  
               
Property, plant and equipment 11   1,475,021     1,286,001  
Inventories 9   31,195     17,554  
Other financial assets 10   1,658     7,896  
Goodwill     5,582     5,462  
      1,835,944     1,566,368  
               
LIABILITIES              
Current liabilities              
Accounts payable and accrued liabilities     96,595     71,748  
Current portion of long-term debt 12   30,356     27,658  
Deferred revenue 14   9,054     10,346  
Current portion of Cariboo consideration payable 3   18,626     14,384  
Interest payable     4,714     13,896  
Current income tax payable     4,074     3,157  
      163,419     141,189  
               
Long-term debt 12   622,979     610,233  
Cariboo consideration payable 3   109,425     55,997  
Deferred revenue 14   59,721     59,720  
Florence royalty obligation 13   69,647     -  
Florence copper stream 6   16,039     -  
Provision for environmental rehabilitation     167,651     145,786  
Deferred tax liabilities     153,909     114,723  
Other financial liabilities 15b   8,022     4,572  
      1,370,812     1,132,220  
               
EQUITY              
Share capital 15   487,197     486,136  
Contributed surplus     55,749     54,833  
Accumulated other comprehensive income ("AOCI")     26,668     16,557  
Deficit     (104,482 )   (123,378 )
      465,132     434,148  
      1,835,944     1,566,368  
               
Commitments and contingencies 17            
Subsequent events 6, 20            

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

1


TASEKO MINES LIMITED 
Condensed Consolidated Interim Statements of Comprehensive Income
(Cdn$ in thousands, except share and per share amounts)
(Unaudited)
      Three months ended March 31,  
  Note   2024     2023  
               
Revenues 4   146,947     115,519  
Cost of sales              
Production costs 5   (107,504 )   (74,380 )
Depletion and amortization 5   (15,024 )   (12,027 )
Earnings from mining operations     24,419     29,112  
               
General and administrative     (3,129 )   (3,300 )
Share-based compensation expense 15b   (5,440 )   (3,385 )
Project evaluation expense     (217 )   (325 )
Loss on derivatives 6   (5,221 )   (4,216 )
Other income     138     434  
Income before financing costs and income taxes     10,550     18,320  
               
Finance expenses, net 7   (18,763 )   (11,388 )
Foreign exchange (loss) gain     (12,017 )   863  
Gain on Cariboo acquisition 3   47,426     46,212  
Gain on acquisition of control of Gibraltar 3b   14,982     -  
Income before income taxes     42,178     54,007  
               
Income tax expense 8   (23,282 )   (20,219 )
Net income     18,896     33,788  
               
               
Other comprehensive income (loss):              
Items that will remain permanently in other comprehensive income (loss):        
Gain (loss) on financial assets     65     (385 )
Items that may in the future be reclassified to profit (loss):              
Foreign currency translation reserve     10,046     (667 )
Total other comprehensive income (loss)     10,111     (1,052 )
               
Total comprehensive income     29,007     32,736  
               
Earnings per share              
Basic 16   0.07     0.12  
Diluted 16   0.06     0.11  
               
Weighted average shares outstanding (thousands)              
Basic 16   290,465     288,007  
Diluted 16   291,962     291,039  

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

2


TASEKO MINES LIMITED 
Condensed Consolidated Interim Statements of Cash Flows
(Cdn$ in thousands)
(Unaudited)
               
      Three months ended March 31,  
  Note   2024     2023  
               
Operating activities              
Net income for the period     18,896     33,788  
Adjustments for:              
Depletion and amortization 11   15,024     12,027  
Income tax expense 8   23,282     20,219  
Finance expenses, net 7   18,763     11,388  
Share-based compensation expense 15b   5,667     3,609  
Loss on derivatives 6   5,221     4,216  
Unrealized foreign exchange loss (gain)     13,688     (950 )
Gain on Cariboo acquisition 3a, 3c   (47,426 )   (46,212 )
Unrealized gain on acquisition of control of Gibraltar 3b   (1,628 )   -  
Amortization of deferred revenue 14   (1,590 )   (1,372 )
Other operating activities     (45 )   (249 )
Net change in working capital 18   9,722     (8,465 )
Cash provided by operating activities     59,574     27,999  
               
Investing activities              
Gibraltar capitalized stripping costs 11   (13,957 )   (12,721 )
Gibraltar sustaining capital expenditures 11   (5,320 )   (4,691 )
Gibraltar capital project expenditures 11   (2,563 )   (7,338 )
Florence Copper development costs 11   (30,762 )   (9,874 )
Other project development costs 11   (404 )   (273 )
Acquisition of Cariboo, net 3a, 3c   (5,116 )   2,948  
Release of restricted cash 10   12,500     -  
Purchase of copper price options 6   (1,985 )   -  
Other investing activities     922     (19 )
Cash used for investing activities     (46,685 )   (31,968 )
               
Financing activities              
Interest paid     (23,609 )   (20,725 )
Revolving credit facility advances 12b   -     13,518  
Repayment of Gibraltar equipment financings 12e   (6,043 )   (5,737 )
Net proceeds from Florence financings 6, 12f, 13   78,390     -  
Share-based compensation     (238 )   (1,631 )
Cash provided by (used for) financing activities     48,500     (14,575 )
Effect of exchange rate changes on cash and equivalents     (205 )   (49 )
Increase (decrease) in cash and equivalents     61,184     (18,593 )
Cash and equivalents, beginning of period     96,477     120,858  
Cash and equivalents, end of period     157,661     102,265  
               
Supplementary cash flow disclosures 18            

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

3


TASEKO MINES LIMITED
Condensed Consolidated Interim Statements of Changes in Equity
(Cdn$ in thousands)
(Unaudited)
                               
    Share     Contributed                    
    capital     surplus     AOCI     Deficit     Total  
                               
Balance at January 1, 2023   479,926     55,795     26,792     (206,104 )   356,409  
Share-based compensation   -     2,262     -     -     2,262  
Exercise of options   450     (159 )   -     -     291  
Settlement of performance share units   3,833     (5,755 )   -     -     (1,922 )
Total comprehensive income (loss) for the period   -     -     (1,052 )   33,788     32,736  
Balance at March 31, 2023   484,209     52,143     25,740     (172,316 )   389,776  
                               
Balance as at January 1, 2024   486,136     54,833     16,557     (123,378 )   434,148  
Share-based compensation   -     1,162     -     -     1,162  
Exercise of options   1,061     677     -     -     1,738  
Settlement of performance share units   -     (923 )   -     -     (923 )
Total comprehensive income for the period   -     -     10,111     18,896     29,007  
Balance as at March 31, 2024   487,197     55,749     26,668     (104,482 )   465,132  

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

4

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

1. REPORTING ENTITY

Taseko Mines Limited (the "Company" or "Taseko") is a corporation governed by the British Columbia Business Corporations Act. These unaudited condensed consolidated interim financial statements of the Company as at and for the three month period ended March 31, 2024 comprise the Company and its wholly-owned subsidiaries.  The Company is principally engaged in the production and sale of metal concentrates, as well as related activities including mine permitting and development, within the province of British Columbia, Canada and the State of Arizona, USA. 

As a result of the Company's acquisition of Cariboo Copper Corporation ("Cariboo"), after March 25, 2024, the financial results of the Company reflect its 100% beneficial interest in Gibraltar ("Gibraltar") (Note 3a). The financial results of the Company before March 15, 2023 reflect its 75% beneficial interest in Gibraltar and the financial results between March 16, 2023 and March 24, 2024 reflect its 87.5% beneficial interest in Gibraltar (Note 3c).

The Company finalized the accounting for the acquisition of its 50% interest in Cariboo from Sojitz and the related 12.5% interest in Gibraltar in the fourth quarter of 2023.  In accordance with the accounting standards for business combinations, the comparable financial statements as of March 31, 2023 and for the three months then ended have been revised to reflect the changes in finalizing the consideration paid and the allocation of the purchase price to the assets and liabilities acquired (Note 3c).

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting and follow the same accounting policies and methods of application as the Company's most recent annual consolidated financial statements. These unaudited condensed consolidated interim financial statements do not include all of the information required for full consolidated annual financial statements and should be read in conjunction with the consolidated annual financial statements of the Company as at and for the year ended December 31, 2023, prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

These unaudited condensed consolidated interim financial statements were authorized for issue by the Company's Audit and Risk Committee on May 1, 2024.

(b) Use of judgments and estimates

In preparing these unaudited condensed consolidated interim financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies, including the accounting for the Cariboo acquisition (Note 3) and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those applied to the annual consolidated financial statements as at and for the year ended December 31, 2023. 

5

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) IFRS Pronouncements

Several new accounting standards, amendments to existing standards and interpretations have been published by the IASB. Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the new standard.

New standards, amendments and pronouncements that became effective for the period covered by these statements have not been disclosed as they did not have a material impact on the Company's unaudited condensed consolidated interim financial statements.

3. ACQUISITION OF CARIBOO COPPER CORPORATION

a) Acquisition of Cariboo from Dowa and Furukawa

On March 25, 2024 ("Acquisition Date"), the Company completed the acquisition of the remaining 50% of Cariboo from Dowa Metals & Mining Co., Ltd. ("Dowa") and Furukawa Co., Ltd. ("Furukawa") which gives the Company an additional 12.5% effective interest in Gibraltar bringing its total effective interest to 100%. Gibraltar is operated through a joint venture which is owned 75% by Taseko and 25% by Cariboo.

The acquisition price payable to Dowa and Furukawa is a minimum of $117 million and a maximum of $142 million payable over a 10-year period, with the quantum and timing of payment depending on LME copper prices and the cashflow of Gibraltar. 

An initial $5 million payment was made to Dowa and Furukawa on closing. The remaining cash consideration will be payable in annual payments commencing in March 2026.  The amounts owing to Dowa and Furukawa are non-interest bearing. The annual payments will be based on the average LME copper price of the previous calendar year, subject to an annual cap based on a percentage of cashflow from Gibraltar. At copper prices below US$4.00 per pound, the annual payment will be $5 million, increasing pro-rata to a maximum annual payment of $15.25 million at copper prices of US$5.00 per pound or higher. The annual payments also cannot exceed 6.25% of Gibraltar's annual cashflow for the 2025 to 2028 calendar years, and 10% of Gibraltar's cashflow for the 2029 to 2033 calendar years. Any outstanding balance on the minimum acquisition amount of $117 million will be payable in a final balloon payment in March 2034.

The annual payments were estimated as at the Acquisition Date based on forecasted copper prices over the next 10 years. The total estimated purchase consideration was then discounted to determine its fair value and the amount as at the Acquisition Date was $71,116.

6

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

3. ACQUISITION OF CARIBOO COPPER CORPORATION (CONTINUED)

a) Acquisition of Cariboo from Dowa and Furukawa (continued)

The purchase consideration has been allocated to the assets acquired and liabilities assumed, including the additional 12.5% effective interest in the Gibraltar Joint Venture, based upon their estimated fair values at the Acquisition Date. The following sets forth the preliminary allocation of the purchase price:

Cash and cash equivalents   9,884  
Accounts receivable and other assets   3,046  
Reclamation deposits   6,262  
Inventory   24,634  
Property, plant and equipment   126,194  
Accounts payable and other liabilities   (7,353 )
Debt   (7,143 )
Deferred tax liabilities   (16,955 )
Provision for environmental rehabilitation   (20,027 )
Total fair value of net assets acquired   118,542  

The fair value of the net assets acquired at March 25, 2024 was determined using a discounted cash flow model for the 12.5% interest in Gibraltar and also considering cash and working capital of Cariboo. The discounted cash flow model included key assumptions on future production and estimated remaining reserves of the Gibraltar, operating assumptions, metal prices, operating and capital costs, and foreign exchange rates, and a discount rate based on an estimate of the Company's weighted average cost of capital. The discounted cash flow model was analyzed using a range of inputs and assumptions and provided a range of values, of which the Company recorded $118,542 at the lower end of its fair value estimate range.

To account for the difference between the fair value of net assets acquired of $118,542 and the total fair value of consideration payable of $71,116, the Company recognized a bargain purchase gain on Cariboo acquisition on the income statement of $47,426 for the three months ended March 31, 2024.

The fair value of inventories was determined based on their net realizable value, whereby the future estimated cash flows from sales of payable metal produced were adjusted for costs to complete. The fair values of accounts receivable, reclamation deposits and accounts payable and other liabilities were determined to approximate their book values. The fair value of debt owed to third parties was determined based on the principal amounts outstanding as the interest rate on the debt was considered at market. Deferred tax liabilities were determined based on 50% of the available tax pools and other tax attributes of Cariboo. The fair value of the reclamation and closure cost provisions were estimated using discounted cash flows of future expenditures to settle the obligation for disturbances at the Acquisition Date and discount rates. The fair value of property, plant and equipment other than mineral properties and the major mill equipment and infrastructure were determined based on the estimated fair value of plant and other equipment in use and independent equipment appraisals on certain mobile equipment. The remaining residual portion of the fair value of net assets acquired was allocated to mineral properties and the major mill equipment and infrastructure within property, plant and equipment which are amortizable over the estimated remaining life of Gibraltar on a units of production basis.

7

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

3. ACQUISITION OF CARIBOO COPPER CORPORATION (CONTINUED)

a) Acquisition of Cariboo from Dowa and Furukawa (continued)

As at March 31, 2024, the estimated present value of the outstanding Cariboo consideration payable to Dowa and Furukawa is as follows:

Consideration payable   66,116  
Accretion on consideration payable   75  
Long term Cariboo consideration payable   66,191  

From the Acquisition Date to March 31, 2024, $7,807 of the Company's consolidated net income relates to its share of Cariboo and the Company recognized $138 of acquisition related costs that were included in other expenses.

The following table presents unaudited pro forma results for the three months ended March 31, 2024, as though the acquisition had taken place as of January 1, 2024. Additionally, pro forma net income was adjusted to exclude acquisition related costs incurred.

Pro forma information   For the three months ended March 31, 2024  
Revenue   162,363  
Net income   20,793  

b) Deemed Disposition at Fair Value of 87.5% Gibraltar Interest on Acquisition of Control

Prior to the Company's acquisition of the remaining 50% of Cariboo from Dowa and Furukawa on March 25, 2024, the Company had joint control over the joint arrangement and proportionately consolidated its 87.5% effective interest of all the Gibraltar Joint Venture's assets, liabilities, income and expenses. On March 25, 2024, the Company acquired the remaining 12.5% interest through its purchase of Cariboo thereby increasing its effective interest to 100% in Gibraltar.  As a result, the Company obtained full control and transitioned from joint control and a joint arrangement under IFRS 11 Joint Arrangements to full control under IFRS 10 Consolidated Statements and IFRS 3 Business Combinations. This transition in applicable standards necessitates the need for the Company to reassess its previously held 87.5% interest in Gibraltar and remeasure this interest at fair value as of the March 25, 2024 acquisition date, with any gains or losses recognized immediately in the statement of comprehensive income. Additionally, the Company is required to measure all identifiable assets acquired and liabilities assumed at their fair values on this deemed acquisition date.

Management assessed whether there was a gain on the date of the acquisition based upon it’s review of estimated fair values of the assets acquired and liabilities assumed. The fair value of the net assets acquired at March 25, 2024 was determined using a discounted cash flow model for the 87.5% interest in Gibraltar and also considering cash and working capital of Gibraltar Mines Ltd, a wholly-owned subsidiary of Taseko which owns the 75% interest in the Gibraltar joint venture and the 50% interest of Cariboo held by Taseko immediately before the deemed disposal and reacquisition. The discounted cash flow model included key assumptions on future production and estimated remaining reserves of Gibraltar, operating assumptions, metal prices, operating and capital costs, and foreign exchange rates, and a discount rate based on an estimate of the Company’s weighted average cost of capital. The discounted cash flow model was analyzed using a range of inputs and assumptions and provided a range of values, of which the Company recorded net asset value at the lower end of its fair value estimate range. Based on the assessment performed, a gain of $14,982 was realized from the fair value adjustments of the assets acquired and liabilities assumed. This gain was solely attributable to the inventory’s increased fair value.

8

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

3. ACQUISITION OF CARIBOO COPPER CORPORATION (CONTINUED)

b) Deemed Disposition at Fair Value of 87.5% Gibraltar Interest on Acquisition of Control (continued)

The fair value of inventories was determined based on their net realizable value, whereby the future estimated cash flows from sales of payable metal produced were adjusted for costs to complete. For finished goods inventory consisting of copper concentrate inventory, the fair value as at the deemed acquisition date was determined to be $37,717 compared to the book value of $22,735, which resulted in a gain of $14,982. This gain was immediately recognized in the statement of comprehensive income for the three months ended March 31, 2024.

The fair values of accounts receivable, reclamation deposits and accounts payable and other liabilities were determined to approximate their book values. The fair value of debt owed to third parties was determined based on the principal amounts outstanding as the interest rate on the debt was considered at market. Deferred tax liabilities were determined based on the tax pools and attributes of Gibraltar Mines Ltd. which owns the 75% effective interest and 50% of the available tax pools and tax attributes of Cariboo. The fair value of the reclamation and closure cost provisions were estimated using discounted cash flows of future expenditures to settle the obligation for disturbances at the Acquisition Date and discount rates. The fair value of property, plant and equipment other than mineral properties and the major mill equipment and infrastructure were determined based on the estimated fair value of plant and other equipment in use and independent equipment appraisals on certain mobile equipment. The remaining residual portion of the fair value of net assets acquired was allocated to mineral properties and the major mill equipment and infrastructure within property, plant and equipment which are amortizable over the estimated remaining life of Gibraltar on a units of production basis.

The assets acquired and liabilities assumed for the Company's 87.5% effective interest in Gibraltar on March 25, 2024 were estimated on a preliminary basis as follows:

Cash and cash equivalents   5,122  
Accounts receivable and other asset   21,302  
Inventory   172,440  
Property, plant and equipment   801,700  
Accounts payable and other liabilities   (50,192 )
Debt   (50,002 )
Provision for environmental rehabilitation   (140,190 )
Total fair value of net assets   760,180  

Between March 26 and March 31, 2024, the Company sold $33,619 of concentrate inventory with a gross profit of $13,354 ($11,685 at 87.5% interest) that it wrote up to fair value on the March 25, 2024 deemed acquisition date. The remaining inventory of copper concentrate written up to fair value of $9,486 with a gross profit of $3,745 ($3,297 at 87.5% interest) was sold in April 2024.

9

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

3. ACQUISITION OF CARIBOO COPPER CORPORATION (CONTINUED)

c) Acquisition of Cariboo from Sojitz in 2023

On March 15, 2023, the Company completed the acquisition of an additional 12.5% interest in the Gibraltar from Sojitz Corporation ("Sojitz") pursuant to its acquisition of Sojitz's 50% interest in Cariboo.

The acquisition price consisted of a minimum amount of $60 million payable over a five-year period and potential contingent performance payments depending on Gibraltar copper revenues and copper prices over the next five years. An initial $10 million was paid to Sojitz upon closing and the remaining minimum amount is payable in $10 million annual instalments over five years. There is no interest payable on the minimum amounts and the second instalment of $10 million was paid in February 2024.

The contingent performance payments are payable annually for five years only if the average LME copper price exceeds US$3.50 per pound in a year. The payments are calculated by multiplying Gibraltar copper revenues by a price factor, which is based on a sliding scale ranging from 0.38% at US$3.50 per pound copper to a maximum of 2.13% at US$5.00 per pound copper or above. Total contingent payments cannot exceed $57 million over the five-year period, limiting the acquisition cost to a maximum of $117 million.

The total purchase consideration was discounted to determine fair value and the amounts as at March 15, 2023 were estimated as follows:

Fixed instalments payable    51,387  
Contingent performance payments payable   28,010  
Total fair value of consideration payable   79,397  

The purchase consideration was allocated to the assets acquired and liabilities assumed, based upon their estimated fair values at the date of acquisition. The following sets forth the allocation of the purchase price: 

    Preliminary Purchase
Price Allocation		     Adjustment     Final Purchase
Price Allocation		  
Cash and cash equivalents   13,467     -     13,467  
Accounts receivable and other assets   1,525     -     1,525  
Reclamation deposits   6,262     -     6,262  
Inventory   15,860     -     15,860  
Property, plant and equipment   72,304     43,275     115,579  
Deferred tax asset   5,594     2,937     8,531  
Accounts payable and other liabilities   (8,535 )   -     (8,535 )
Debt   (9,144 )   -     (9,144 )
Provision for environmental rehabilitation   (17,936 )   -     (17,936 )
Total fair value of net assets acquired   79,397     46,212     125,609  

To account for the difference between the fair value of net assets acquired of $125,609 and the total fair value of consideration payable of $79,397, the Company recognized a bargain purchase gain on Cariboo acquisition on the statement of comprehensive income of $46,212 for the three months ended March 31, 2023.

10

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

3. ACQUISITION OF CARIBOO COPPER CORPORATION (CONTINUED)

c) Acquisition of Cariboo from Sojitz in 2023 (continued)

As at March 31, 2024, outstanding Cariboo consideration payable to Sojitz is as follows:

  Fixed consideration payable   34,024  
  Contingent performance payments payable   27,837  
Total Cariboo consideration payable   61,861  
Less current portion:      
  Fixed consideration payable   9,411  
  Contingent performance payments payable   9,215  
Long-term portion of Cariboo consideration payable   43,235  

The contingent performance payment of $4,549 for the 2023 calendar year was paid on April 1, 2024. The Company recognized $263 of acquisition related costs that were included in other expenses.

4. REVENUE

    Three months ended March 31,  
    2024     2023  
Copper contained in concentrate   144,306     109,123  
Copper price adjustments on settlement   (382 )   (202 )
Molybdenum concentrate   6,077     7,749  
Molybdenum price adjustments on settlement   526     1,831  
Silver (Note 14b)   1,727     1,532  
Total gross revenue   152,254     120,033  
Less: Treatment and refining costs   (5,307 )   (4,514 )
Revenue   146,947     115,519  

11

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

5. COST OF SALES

    Three months ended March 31,  
    2024     2023  
Site operating costs   79,678     74,438  
Transportation costs   10,153     5,104  
Changes in inventories of finished goods   20,392     399  
Changes in inventories of ore stockpiles   (2,719 )   (5,561 )
Production costs   107,504     74,380  
Depletion and amortization   15,024     12,027  
Cost of sales   122,528     86,407  

Site operating costs include personnel costs, non-capitalized waste stripping costs, repair and maintenance costs, consumables, operating supplies and external services.

Changes in inventories of finished goods also included $13,354 in write-ups to net realizable value for concentrate inventory held at March 25, 2024 that was sold between March 26 and March 31, 2024. Of this write-up, $11,685 was realized during the three months ended March 31, 2024 and was included in the $14,982 gain on acquisition of control of Gibraltar (Note 3b).

6. DERIVATIVE INSTRUMENTS

a) Derivative Instruments - Copper Price and Fuel Contracts

The following is a summary of the derivative transactions entered into by the Company during the three months ended March 31, 2023 and 2024:

Date of
purchase		 Contract Quantity Strike price Period  Cost
March 2024 Copper collar 42 million lbs US$3.75 per lb
US$5.00 per lb		 July 2024 -
December 2024		 1,985
February 2024 Fuel call options 12.5 million ltrs US$0.79 per ltr February 2024 -
June 2024		 165
January 2023 Copper collar 42 million lbs US$3.75 per lb
US$4.70 per lb		 July 2023 -
December 2023		 Zero cost
January 2023 Fuel call options 12 million ltrs US$1.00 per ltr July 2023 -
December 2023		 941

The following is a summary of the realized and unrealized derivative gain or loss incurred during the three months ended March 31, 2023 and 2024:

    Three months ended March 31,  
    2024     2023  
Net realized loss on settled copper options   1,636     1,488  
Net unrealized loss on outstanding copper options   863     1,644  
Realized loss on fuel call options   66     538  
Unrealized loss on fuel call options   64     546  
    2,629     4,216  

12

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

6. DERIVATIVE INSTRUMENTS (CONTINUED)

a) Derivative Instruments - Copper Price and Fuel Contracts (continued)

Details of the outstanding copper price option contracts at March 31, 2024 are summarized in the following table:

Contract Quantity Strike price Period   Cost     Fair value  
Copper put options 21 million lbs US$3.25/per lb Q2 2024   1,556     7  
Copper collars 42 million lbs US$3.75 per lb
US$5.00 per lb		 H2 2024   1,985     3,204  
Fuel call options 7.5 million ltrs US$0.79 per ltr Q2 2024   99     34  

Details of the outstanding copper price option contracts purchased after March 31, 2024 are summarized in the following table:

Contract Quantity Strike price Period   Cost  
Copper collars 54 million lbs US$4.00 per lb
US$5.00 per lb		 H1 2025   2,566  
Copper collars 54 million lbs US$4.00 per lb
US$5.40 per lb		 H2 2025   2,222  

b) Derivative Instruments - Florence Copper Stream

On December 19, 2022, the Company signed agreements with Mitsui & Co. (U.S.A.) Inc. ("Mitsui") to form a strategic partnership to develop the Company's Florence Copper project ("Florence Copper"). Mitsui has committed to an initial investment of US$50 million, with proceeds to be used for construction of the commercial production facility. The initial investment is in the form of a copper stream agreement (the "Copper Stream") on 2.67% of the copper produced at Florence Copper and Mitsui to pay a delivery price equal to 25% of the market price of copper delivered under the contract.

In addition, Mitsui has acquired an option to invest an additional US$50 million for a 10% equity interest in Florence Copper (the "Equity Option"). The Equity Option is exercisable by Mitsui at any time up to three years following completion of construction of the commercial production facility. If Mitsui elects to exercise its Equity Option, the Copper Stream will terminate. If the Equity Option is not exercised by Mitsui by its expiry date, the Company will have the right to buy-back 100% of the Copper Stream, otherwise, it will terminate when 40 million pounds of copper have been delivered under the agreement.

As part of the arrangement, Taseko and Mitsui have entered into an offtake contract for 81% of the copper cathode produced at Florence during the initial years of production. The initial offtake agreement will cease and be replaced with a marketing agency agreement if the Equity Option is exercised by Mitsui. Mitsui's offtake entitlement would also reduce to 30% if the Equity Option is not exercised by its expiry date until the Copper Stream deposit has been reduced to nil.

13

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

6. DERIVATIVE INSTRUMENTS (CONTINUED)

b) Derivative Instruments - Florence Copper Stream (continued)

On January 26, 2024, the Company received the first US$10 million of the US$50 million Copper Stream. The remaining amounts are payable on a quarterly instalment basis. On April 26, 2024, the Company received the second US$10 million.

For accounting purposes, the Mitsui agreement is accounted for as a financial instrument and  includes derivatives that are required to be fair valued at each reporting period. The Company has determined that the fair value of the derivatives is $16,039 as of March 31, 2024 based on the timing of future instalment payments, estimates of future production, copper prices and other relevant factors. For the three months ended March 31, 2024, the Company recorded an unrealized loss of $2,592 in the statement of comprehensive income.

Proceeds from Florence copper stream   13,449  
Deferred financing fees   (102 )
Unrealized loss on Florence copper stream derivative   2,592  
Unrealized foreign exchange loss   100  
Florence copper stream as at March 31, 2024   16,039  

7. FINANCE EXPENSES

    Three months ended March 31,  
    2024     2023  
Interest expense   14,820     11,541  
Amortization of financing fees   740     671  
Finance expense - deferred revenue (Note 14)   1,368     1,473  
Accretion on PER   698     504  
Accretion and fair value adjustment on consideration payable to Cariboo (Notes 3a and 3c)   1,555     -  
Accretion and fair value adjustment on Florence royalty obligation   3,416     -  
Less: interest expense capitalized   (2,748 )   (1,880 )
Finance income   (1,086 )   (921 )
    18,763     11,388  

For the three month period ended March 31, 2024, interest expense includes $366 (2023 - $406) from lease liabilities. For the three month period ended March 31, 2024, $2,748 (2023 - $1,880) of borrowing costs have been capitalized to Florence Copper development costs (Note 11).

14

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

8. INCOME TAX

    Three months ended March 31,  
  2024     2023  
Current income tax expense   805     544  
Deferred income tax expense   22,477     19,675  
    23,282     20,219  

9. INVENTORIES

    March 31,     December 31,  
    2024     2023  
Current:            
Sulphide ore stockpiles   72,533     57,678  
Copper contained in concentrate   17,523     17,356  
Molybdenum concentrate   1,462     711  
Materials and supplies   49,086     47,197  
    140,604     122,942  
Long-term:            
Oxide ore stockpiles   31,195     17,554  
    171,799     140,496  

10. OTHER FINANCIAL ASSETS

    March 31,     December 31,  
    2024     2023  
Current:            
  Marketable securities   1,398     1,333  
  Copper price options (Note 6)   3,082     3,724  
  Fuel call options (Note 6)   163     -  
    4,643     5,057  
Long-term:            
  Investment in private companies    1,200     1,200  
  Reclamation deposits   458     6,696  
    1,658     7,896  

The Company holds strategic investments in publicly-traded and privately owned mineral exploration and development companies, including marketable securities. Marketable securities and the investment in privately owned companies are accounted for at fair value through other comprehensive income.

During the three months ended March 31, 2024, the Company replaced its letter or credit with the Province of British Columbia with a surety bond, which resulted in a $12,500 release of restricted cash to the Company's cash and equivalents.

15

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

11. PROPERTY, PLANT & EQUIPMENT

The following schedule shows the continuity of property, plant and equipment net book value for the three months ended March 31, 2024:

Net book value as at January 1, 2024   1,286,001  
Additions:      
  Gibraltar capitalized stripping costs   16,466  
  Gibraltar sustaining capital expenditures   8,944  
  Gibraltar capital projects   2,563  
  Cariboo acquisition (Note 3a)   126,194  
  Fair value reclass adjustment on deemed disposition (Note 3b)   (13,342 )
  Florence Copper development costs   54,947  
  Yellowhead development costs   166  
  Aley development costs   237  
Other items:      
  Right of use assets   539  
  Rehabilitation costs asset   1,019  
  Disposals   (295 )
  Foreign exchange translation and other   9,352  
  Depletion and amortization   (17,770 )
Net book value as at March 31, 2024   1,475,021  

Net book value   Gibraltar
Mine 		    Florence
Copper		     Yellowhead     Aley     Other     Total  
As at December 31, 2023   805,508     441,107     22,826     15,884     676     1,286,001  
Cariboo acquisition (Note 3a)   126,194     -     -     -     -     126,194  
Deemed disposition (Note 3b)   (13,342 )   -     -     -     -     (13,342 )
Net additions   27,958     55,206     166     237     -     83,567  
Changes in rehabilitation cost asset   1,019     -     -     -     -     1,019  
Depletion and amortization   (17,676 )   -     (5 )   -     (89 )   (17,770 )
Foreign exchange translation   -     9,352     -     -     -     9,352  
As at March 31, 2024   929,661     505,665     22,987     16,121     587     1,475,021  

For the three month period ended March 31, 2024, the Company capitalized development costs of $54,947 for the Florence Copper project, which includes $2,748 of capitalized borrowing costs (Note 7).

Non-cash additions to property, plant and equipment of Gibraltar include $2,509 of depreciation on mining assets related to capitalized stripping.

Since January 1, 2020, development costs for Yellowhead of $6,702 have been capitalized as mineral property, plant and equipment.  Depreciation related to the right of use assets for the three month period ended March 31, 2024 was $2,834 (2023 - $2,249).

16

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

12. DEBT

    March 31,     December 31,  
    2024     2023  
Current:            
  Lease liabilities (d)   11,321     11,040  
  Gibraltar equipment loans (e)   13,266     11,105  
  Florence equipment facility (f)   5,769     5,513  
    30,356     27,658  
Long-term:            
  Senior secured notes (a)   541,560     529,880  
  Revolving credit facility (b)   27,078     26,494  
  Lease liabilities (d)   6,481     6,929  
  Gibraltar equipment loans (e)   28,006     26,887  
  Florence equipment facility (f)   25,935     26,851  
    629,060     617,041  
Deferred financing fees   (6,081 )   (6,808 )
Total debt   653,335     637,891  

(a) Senior secured notes

On February 10, 2021, the Company completed an offering of US$400 million aggregate principal amount of senior secured notes (the "2026 Notes"). The 2026 Notes mature on February 15, 2026 and bear interest at an annual rate of 7.0%, payable semi-annually on February 15 and August 15. A portion of the proceeds were used to redeem the outstanding US$250 million 8.75% senior secured notes due on June 15, 2022. The remaining proceeds, net of transaction costs, call premium and accrued interest, of approximately $167 million (US$131 million) were available for capital expenditures, including for Florence Copper and Gibraltar, working capital and for general corporate purposes.

The 2026 Notes are secured by liens on the shares of Taseko's wholly-owned subsidiary, Gibraltar Mines Ltd., and the subsidiary's rights under the joint venture agreement relating to Gibraltar, as well as the shares of Curis Holdings (Canada) Ltd. and Florence Holdings Inc. ("Florence Holdings"). The 2026 Notes are guaranteed by each of Taseko's existing and future restricted subsidiaries.

The 2026 Notes also allow for up to US$145 million of first lien secured debt to be issued and up to US$50 million of debt for equipment financing and US$30 million for Florence project debt, all subject to the terms of the note indenture. The noted amounts also can increase as consolidated of total assets increase. The Company is also subject to certain restrictions on asset sales, issuance of preferred stock, dividends and other restricted payments. However, there are no maintenance covenants with respect to the Company's financial performance.

The Company may redeem some or all of the 2026 Notes at any time on or after February 15, 2024, at redemption prices ranging from 101.75% to 100%, plus accrued and unpaid interest to the date of redemption. On a change of control, the 2026 Notes are redeemable at the option of the holder at a price of 101%. The 2026 Notes were redeemed on April 23, 2024 (Note 20).

17

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

12. DEBT (CONTINUED)

(b) Revolving credit facility

On October 6, 2021, the Company closed a secured US$50 million revolving credit facility (the "Facility"). The Facility is secured by first liens against Taseko's rights under the Gibraltar joint venture, as well as the shares of Gibraltar Mines Ltd., Curis Holdings (Canada) Ltd., and Florence Holdings. The Facility will be available for capital expenditures, working capital and general corporate purposes.

On February 1, 2023, the Company entered into an agreement to extend the maturity date of the Facility by an additional year to July 2, 2026. On June 30, 2023, the Company entered into an amended agreement with the lender, increasing the Facility by US$30 million for a total of US$80 million.

Amounts outstanding under the facility bear interest at the Adjusted Term SOFR rate plus an applicable margin and have a standby fee of 1.00%. As at March 31, 2024, a total of US$20,000 (December 2023 - US$20,000) was advanced under the Facility, which was subsequently repaid in April 2024.

The Facility has customary covenants for a revolving credit facility. Financial covenants include a requirement for the Company to maintain a leverage ratio, an interest coverage ratio, a minimum tangible net worth and a minimum liquidity amount as defined under the Facility. The Company was in compliance with these covenants as at March 31, 2024.

(c) Letter of credit facilities

The Gibraltar joint venture has in place a $7 million credit facility for the purpose of providing letters of credit ("LC") to key suppliers of Gibraltar to assist with ongoing trade finance and working capital needs. Any LCs issued under the facility will be guaranteed by Export Development Canada ("EDC") under its Account Performance Security Guarantee program. The facility is renewable annually, is unsecured and contains no financial covenants. As at March 31, 2024, a total of $3.75 million in LCs were issued and outstanding under this LC facility (December 31, 2023 - $3.75 million).

The Company also has a US$4 million credit facility for the sole purpose of issuing LCs to certain key contractors in conjunction with the development of Florence Copper. Any LCs to be issued under this facility will also be guaranteed by EDC. The facility is renewable annually, is unsecured and contains no financial covenants. As at March 31, 2024, there were no LCs issued and outstanding under this LC facility.

(d) Lease liabilities

Lease liabilities include the Company's outstanding lease liabilities under IFRS 16. The lease liabilities have monthly repayment terms ranging between 12 and 84 months.

18

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

12. DEBT (CONTINUED)

(e) Gibraltar equipment loans

The equipment loans at March 31, 2024 are secured by most of the existing mobile mining equipment at Gibraltar and commenced between December 2022 and June 2023 with monthly repayment terms of 48 months and with interest rates ranging between 8.9% to 9.4%.

On June 20, 2023, the Company entered into an equipment financing agreement for the amount of US$9.6 million with monthly repayment terms of 48 months and the loan bears interest at the rate of 9.4%.

(f) Florence equipment facility

In the fourth quarter of 2023, the Company entered into a Florence project equipment debt facility with Bank of America secured against specific to equipment for total proceeds of US$25 million. The facility contains no financial covenants and has monthly payments over a term of 60 months. The equipment facility bears interest at a blended rate of 9.3%.

(g) Debt continuity

The following schedule shows the continuity of total debt for the three months ended March 31, 2024:

Total debt as at January 1, 2024   637,891  
Lease and loan additions   587  
Lease liabilities and equipment loans repayments   (7,334 )
Lease and equipment loans from Cariboo acquisition (Note 3a)   7,143  
Unrealized foreign exchange gain   14,308  
Amortization of deferred financing charges   740  
Total debt as at March 31, 2024   653,335  

19

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

13. FLORENCE ROYALTY OBLIGATION

On January 15, 2024, Florence Holdings, an indirect wholly-owned subsidiary of Taseko, entered into agreements with Taurus Mining Royalty Fund L.P. ("Taurus"), pursuant to which Florence Holdings received US$50 million from Taurus in exchange for a perpetual gross revenue royalty interest in certain real property, mining and other rights held by Florence. The basic royalty rate is 1.95% of the gross revenue from the sale of all copper from Florence Copper for the life of the mine. If project completion of Florence Copper, as defined under the agreements is reached after July 31, 2025, the royalty rate increases to 2.05%. Proceeds from the royalty transaction were contributed to Florence Copper and are available to Florence Copper to fund the construction and development of the commercial production facility. The royalty constitutes a customary lien and encumbrance on Florence's mineral and property rights, is registered as an interest in the Florence Copper mine and is unsecured.

Under the purchase agreement with Florence Holdings, Taurus has a put right to transfer the royalty back to Florence Holdings upon the occurrence of certain circumstances, including certain breaches of the transaction document or if project completion of Florence Copper has not occurred by a long stop completion date of January 31, 2027. If Taurus exercises such put right, Florence Holdings shall pay to Taurus an amount based on the net present value of the royalty or, if the put right is exercised due to project completion being delayed beyond the long stop completion date, the original purchase price paid by Taurus. As part of the transaction, Taseko, Curis Holdings (Canada) Ltd. and Florence Holdings provided to Taurus an unsecured guarantee of the obligations of Florence Copper.

For accounting purposes, the purchase agreement with Taurus is accounted for as a financial instrument and is recorded as a financial liability at amortized cost. The Company has identified embedded derivatives which as of March 31, 2024 had no estimated value. For the three months ended March 31, 2024, the Company recorded an accretion and fair value adjustment on the royalty obligation of $3,416 in the statement of comprehensive income.

Proceeds from Florence royalty obligation   67,695  
Deferred financing fees   (1,477 )
Accretion and fair value adjustment on Florence royalty obligation (Note 7)   3,416  
Unrealized foreign exchange loss   13  
Florence royalty obligation as at March 31, 2024   69,647  

20

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

14. DEFERRED REVENUE

    March 31,
2024		     December 31,
2023		  
Current:            
  Customer advance payments (a)   2,027     3,096  
  Osisko - silver stream agreement (b)   7,027     7,250  
Current portion of deferred revenue   9,054     10,346  
Long-term portion of deferred revenue (b)   59,721     59,720  
Total deferred revenue   68,775     70,066  

(a) Customer advance payments

As at March 31, 2024, the Company received advance payments from a customer on 0.4 million pounds copper concentrate inventory (December 31, 2023 - 0.8 million pounds).

(b) Silver stream purchase and sale agreement

The Company has entered into a silver stream purchase and sale agreement with Osisko Gold Royalties Ltd. ("Osisko"), whereby the Company received upfront cash deposit payments totalling $52.7 million for the sale of an equivalent amount of its 75% share of Gibraltar payable silver production until 5.9 million ounces of silver have been delivered to Osisko. After that threshold has been met, 35% of an equivalent amount of Taseko's share of all future payable silver production from Gibraltar will be delivered to Osisko. The Company receives no further cash consideration once silver deliveries are made under the agreement.

On June 28, 2023, the Company entered into an amendment to its silver stream with Osisko and received $13,586 for the sale of an equivalent amount of its 87.5% share of Gibraltar payable silver production until 6,254,500 ounces of silver have been delivered to Osisko. After that threshold has been met, 30.625% of an equivalent amount of Taseko's share of all future payable silver production from Gibraltar will be delivered to Osisko. The amendment is accounted for as a contract modification under IFRS 15 Revenue from Contracts with Customers. The funds received are available for general working capital purposes.

The Company has recorded the deposits from Osisko as deferred revenue and recognizes amounts in revenue as silver is delivered. The amortization of deferred revenue is calculated on a per unit basis using the estimated total number of silver ounces expected to be delivered to Osisko over the life of Gibraltar. The current portion of deferred revenue is an estimate based on deliveries anticipated over the next twelve months.

The following table summarizes changes in the Osisko deferred revenue:

Balance as at December 31, 2023   66,970  
Finance expense (Note 7)   1,368  
Amortization of deferred revenue   (1,590 )
Balance as at March 31, 2024   66,748  

21

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

15. EQUITY

(a) Share capital

    Common shares
(thousands)		  
Common shares outstanding as at December 31, 2023   290,000  
  Exercise of share options   706  
Common shares outstanding as at March 31, 2024   290,706  

The Company's authorized share capital consists of an unlimited number of common shares with no par value.

(b) Share-based compensation

      Options
(thousands)		     Average price  
Outstanding as at January 1, 2024   8,799     1.85  
  Granted   2,906     1.83  
  Exercised   (706 )   0.97  
  Cancelled/forfeited   (12 )   1.83  
  Expired   (44 )   0.78  
Outstanding as at March 31, 2024   10,943     1.91  
Exercisable as at March 31, 2024   8,064     1.88  

During the three month period ended March 31, 2024, the Company granted 2,906,000 (2023 - 2,629,000) share options to directors, executives and employees, exercisable at an average exercise price of $1.83 per common share (2023 - $2.38 per common share) over a five year period. The total fair value of options granted was $3,022 (2023 - $3,575) based on a weighted average grant-date fair value of $1.04 (2022 - $1.36) per option.

The fair value of options was measured at the grant date using the Black-Scholes formula. Expected volatility is estimated by considering historic average share price volatility. The inputs used in the Black-Scholes formula are as follows:

Expected term (years)   5.00  
Forfeiture rate   0%  
Volatility   64%  
Dividend yield   0%  
Risk-free interest rate   3.5%  
Weighted-average fair value per option $ 1.04  

22

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

15. EQUITY (CONTINUED)

(b) Share-based compensation (continued)

Deferred, Performance and Restricted Share Units

    RSUs
(thousands)		     DSUs
(thousands)		     PSUs
(thousands)		  
Outstanding as at January 1, 2024   380     2,301     1,955  
  Granted   500     304     880  
  Cancelled   (20 )   -     -  
  Settled   -     -     (530 )
Outstanding as at March 31, 2024   860     2,605     2,305  

During the three month period ended March 31, 2024, 303,750 DSUs were issued to directors (2023 - 342,750) and 880,000 PSUs to senior executives (2023 - 830,000). The fair value of DSUs and PSUs granted was $3,067 (2023 - $4,344), with a weighted average fair value at the grant date of $1.83 per unit for the DSUs (2023 - $2.38 per unit) and $2.87 per unit for the PSUs (2023 - $4.25 per unit).

During the three month period ended March 31, 2024, the Company granted 500,000 units, with a weighted average fair value at grant date of $2.38 per unit for the RSUs.

Share-based compensation expense is comprised as follows:

    Three months ended March 31,  
    2024     2023  
Share options - amortization    1,538     1,718  
Performance share units - amortization   678     545  
Restricted share units - amortization   151     69  
Change in fair value of deferred share units    3,300     1,277  
    5,667     3,609  

16. EARNINGS PER SHARE

Earnings per share, calculated on a basic and diluted basis, is as follows:

    Three months ended March 31,  
    2024     2023  
Net income attributable to common shareholders - basic and diluted   18,896     33,301  
(in thousands of common shares)            
Weighted-average number of common shares   290,465     288,007  
Effect of dilutive securities:            
  Stock options   1,497     3,032  
Weighted-average number of diluted common shares   291,962     291,039  
Earnings per common share            
  Basic earnings per share   0.07     0.12  
  Diluted earnings per share   0.06     0.11  

23

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

17. COMMITMENTS AND CONTINGENCIES

(a) Commitments

The Company is a party to certain contracts relating to service and supply agreements. Future minimum payments under these agreements as at March 31, 2024 are presented in the following table:

Remainder of 2024   10,534  
2025   7,709  
2026   1,463  
2027   -  
2028   -  
2029 and thereafter   -  
Total commitments   19,706  

As at March 31, 2024, the Company had minimum commitments for capital expenditures of $42,764 (December 31, 2023 - $6,150) for Florence Copper and $7,286 (December 31, 2023 - $13,236) for Gibraltar mine.

18. SUPPLEMENTARY CASH FLOW INFORMATION

    Three months ended March  31,  
    2024     2023  
Change in non-cash working capital items:            
  Accounts receivable   1,795     (1,546 )
  Inventories   8,675     (5,612 )
  Prepaids   2,267     672  
  Accounts payable and accrued liabilities1   (1,939 )   (1,090 )
  Advance payment on product sales   (1,069 )   426  
  Interest payable   (24 )   (130 )
  Mineral tax payable   17     (1,185 )
    9,722     (8,465 )
Non-cash investing and financing activities            
  Cariboo acquisition, net assets (Notes 3a and 3b)   61,232     65,930  
  Assets acquired under capital lease   48     69  
  Right-of-use assets    539     5,959  

1. Excludes accounts payable and accrued liability changes on capital expenditures.

24

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

19. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value, by reference to the reliability of the inputs used to estimate the fair values.

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of the senior secured notes are $544,712 and the carrying value is $541,560 at March 31, 2024. The fair value of all other financial assets and liabilities approximates their carrying value.

The Company has certain financial assets and liabilities that are measured at fair value on a recurring basis and uses the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, with Level 1 inputs having the highest priority.

    Level 1     Level 2     Level 3     Total  
March 31, 2024                        
Financial assets and liabilities designated as FVPL                        
  Derivative asset copper put and call options   -     3,082     -     3,082  
  Derivative asset fuel call options   -     163     -     163  
  Performance payments payable   -     -     27,837     27,837  
  Florence copper stream   -     -     16,039     16,039  
    -     3,245     43,876     47,121  
Financial assets designated as FVOCI                        
  Marketable securities   1,398     -     -     1,398  
  Investment in private companies   -     -     1,200     1,200  
  Reclamation deposits   458     -     -     458  
    1,856     -     1,200     3,056  

25

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

19. FAIR VALUE MEASUREMENTS (CONTINUED)

    Level 1     Level 2     Level 3     Total  
December 31, 2023                        
Financial assets designated as FVPL                        
  Derivative asset copper put and call options   -     3,724     -     3,724  
  Performance payments payable               25,850     25,850  
    -     3,724     25,850     29,574  
Financial assets designated as FVOCI                        
  Marketable securities   1,333     -     -     1,333  
  Investment in private companies   -     -     1,200     1,200  
  Reclamation deposits   6,696     -     -     6,696  
    8,029     -     1,200     9,229  

There have been no transfers between fair value levels during the reporting period. The carrying value of cash and equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value as at March 31, 2024.

The fair value of the senior secured notes, a Level 1 instrument, is determined based upon publicly available information.

The Company's metal concentrate sales contracts are subject to provisional pricing with the selling price adjusted at the end of the quotational period. At each reporting date, the Company's settlement receivable on these contracts are marked-to-market based on a quoted forward price for which there exists an active commodity market. At March 31, 2024, the Company had net settlement receivable of $6,280 (December 31, 2023 - settlement receivable of $7,406).

The estimated performance payments payable, a Level 3 instrument, was estimated based on forecasted copper prices and sales volumes over the next 5 and 10 year periods. The total estimated performance payments payable was then discounted to determine its fair value.

The investment in private companies, a Level 3 instrument, are valued based on a management estimate. As this is an investment in a private exploration and development company, there are no observable market data inputs.

As at March 31, 2024, the determination of the estimated fair value of the investment includes comparison to the market capitalization of comparable public companies.

Commodity price risk

The Company is exposed to the risk of fluctuations in prevailing market commodity prices on the metals it produces.  The Company enters into copper put and collar option contracts to reduce the risk of short-term copper price volatility. The amount and duration of the hedge position is based on an assessment of business-specific risk elements combined with the copper pricing outlook. Copper put and collar option contracts are typically extended adding incremental quarters at established put strike prices to provide the necessary price protection. 

26

TASEKO MINES LIMITED

Notes to Condensed Consolidated Interim Financial Statements

(Cdn$ in thousands - Unaudited)

19. FAIR VALUE MEASUREMENTS (CONTINUED)

Provisional pricing mechanisms embedded within the Company's sales arrangements have the character of a commodity derivative and are carried at fair value as part of accounts receivable.

The table below summarizes the impact on revenue and receivables for changes in commodity prices on the provisionally invoiced sales volumes.

    As at March 31, 2024  
Copper increase/decrease by US$0.10/lb.1   624  

1 The analysis is based on the assumption that the period end copper price increases/decreases US$0.10 per pound, with all other variables held constant. At March 31, 2024, 4.6 million pounds of copper in concentrate were exposed to copper price movements. The closing exchange rate at March 31, 2024 of CAD/USD 1.35 was used in the analysis.

The sensitivities in the above tables have been determined with foreign currency exchange rates held constant.  The relationship between commodity prices and foreign currencies is complex and movements in foreign exchange can impact commodity prices. The sensitivities should therefore be used with care.

20. SUBSEQUENT EVENTS

On April 23, 2024, the Company completed its offering of US$500 million aggregate principal amount of 8.25% Senior Secured Notes due May 1, 2030. A portion of the proceeds were used to redeem the outstanding US$400 million 7% Senior Secured Notes due on February 15, 2026. The remaining proceeds, net of transaction costs, call premium and accrued interest, of approximately $110 million are available for capital expenditures, including at its Florence Copper project and Gibraltar, working capital and for general corporate purposes.

27