Balance sheet then shareholder returns
By Paul Harris
Taskeo Mines has begun the production of copper cathodes from its Florence in-situ leach operation in Arizona, US, to become the first new source of US supply since 2008, chief executive Stuart McDonald told Mining Journal.
The company will ramp up production through 2026 to exit the year operating at design capacity, at which point it will produce at a rate of 85Mlbpa in 2027. This will make Taseko the third biggest producer of copper cathode in the US.
"Florence has started very well. The initial results from the in-situ wellfield are very positive. It is early days, but things are looking very good," said McDonald.
With the US$275 million Florence development starting to generate revenue, McDonald said a priority for the company is to improve its balance sheet by paying down debt to reduce leverage. Its net debt-to-EBITDA ratio is currently about 3.7x.
"In the back half of 2026, we expect to generate very good cash flows. The plan is to use that to deleverage our debt. I would like to get our net debt to EBITDA levels well below 1x," he said.
With no major capital investment coming in the next few years, once the balance sheet is in better condition, McDonald said the company may initiate a shareholder returns policy.
"The first port of call is to get the balance sheet stronger, which will give us the potential to turn our attention to shareholder returns. We don't have major capital requirements in the next few years as there is a window before we come to a construction decision at Yellowhead," said McDonald.
Yellowhead in British Columbia, Canada, will likely be the company's next development project, with a development cost estimated at $2 billion. The deposit hosts 4.4Blb of recoverable copper in addition to gold and silver. Its environmental assessment process began in July 2025, with permitting expected to take several years.
McDonald is encouraged by growing federal and provincial support for mining.
"The federal and provincial governments recognise the importance of the mining industry and how it can really contribute to reducing Canada's trade dependency on any one country. Yellowhead would produce a concentrate for export to Asia, as does our Gibraltar mine, but we have to work our way through the permitting process, which will take a few years," he said.
Supply shocks
The conflict in the Persian Gulf is expected to result in higher input costs at Taseko's operations, due to diesel-powered haul fleets at Gibraltar and sulphuric acid consumption at Florence.
"Fuel is a significant input cost at Gibraltar, so we are looking at that very closely. Florence is low energy intensity and does not have a haul truck fleet, but it buys sulphuric acid, and the sulphur market is affected by the conflict. We have all the pricing for our 2026 consumption locked in," said McDonald.
Shares in Taseko Mines have increased in value by 279% over the past year. They are trading at $7.19, valuing the company at $2.6 billion.
