Taseko Announces Improved Economics At Its Gibraltar Copper Mine

Press Releases

May 5, 2015, Vancouver, BC — Taseko Mines Limited (TSX: TKO; NYSE MKT: TGB) (“Taseko” or the “Company”) has completed an updated mine plan for Gibraltar featuring a 50% decrease in strip ratio. This new mine plan is a result of a detailed, six-month engineering study and forms the basis of an updated NI 43-101 compliant reserve.

Highlights of the mine plan are:

• 749 million tons grading 0.272% copper equivalent*.
• Recoverable copper of 3.3 billion pounds and 62 million pounds of molybdenum.
• Annual production of approximately 138 million pounds of copper and 2.6 million pounds of molybdenum at a milling rate of 85,000 tons per day.
• 24 years of operation, at a milling rate of 85,000 tons per day.
• Average strip ratio decreased to 1.9:1 (from 4.3:1).
• Copper cut-off decreased to 0.15% (from 0.20%)

Russell Hallbauer, President and CEO of Taseko, stated, “After a year of operating an upgraded and modernized Gibraltar at capacity, we have gained a thorough understanding of Gibraltar’s cost structure and capabilities, both in the mine and mill. While our milling costs have declined due to technology enhancements, mining costs have increased from historical levels due to fuel, labour, parts as well as haul distance. The new mine plan takes these factors into account and focusses on reducing tons mined and maximizing profitability on a cost per ton milled basis. The lower strip ratio results in a significant decrease in mining costs and total cost per ton milled, compared to operating at a 0.20% copper cut-off, more than offsetting the reduced average copper grade. To put this in perspective, every point of strip ratio is equal to approximately 31 million tons of waste that does not need to be mined annually, and at $1.85 per ton mined, amounts to roughly $57 million of annual savings. While optimized mine scheduling isn’t yet finalized, we expect cost per ton milled (including mining costs, milling costs and site G&A) in the new mine plan to remain at a level similar to today, approximately C$10.00.”

Mr. Hallbauer added, “Simply put, the new mine plan will contribute to lower costs and higher cash flows over its long mine life. At today’s metal prices and Canadian dollar exchange rate, based on the average strip ratio and grade in the new mine plan, we believe Gibraltar could generate approximately $100 million of annual operating profit. The leverage to the price of copper is significant and a 10% increase in metal prices would lift cash flow by more than 50%.”

The reserve evaluation used a 0.15% copper cut-off, incorporating a $2.75/lb copper and a 0.85 C$/US$ foreign exchange rate pit shell design. The result is a pit design that maintains current reserve tonnage, mines 45% less total material and maintains the ability to extract the remaining resource.

*Copper Equivalent is based on an 85% copper recovery, US$3.00/lb copper price, 50% molybdenum recovery & US$10.00/lb molybdenum price.

Gibraltar’s proven and probable reserves as of December 31, 2014 are tabulated below:

Gibraltar Mine Mineral Reserves As at December 31, 2014 At 0.15% copper cut-off
Pit	Category	Tons (millions)	Cu (%)	Mo (%)
Connector	Proven	152	0.249	0.010
	Probable	14	0.224	0.008
	Subtotal	166	0.247	0.010
Gibraltar	Proven	152	0.247	0.009
	Probable	111	0.233	0.008
	Subtotal	263	0.241	0.008
Granite	Proven	164	0.268	0.009
	Probable	15	0.248	0.007
	Subtotal	179	0.267	0.009
Extension	Proven	50	0.333	0.002
	Probable	1	0.262	0.001
	Subtotal	51	0.331	0.002
Pollyanna	Proven	85	0.251	0.007
	Probable	5	0.229	0.003
	Subtotal	90	0.250	0.007
Total		749	0.256	0.008

The mineral reserves stated above are contained within the following mineral resources:

Gibraltar Mine Mineral Resources As at  December 31, 2014 At 0.150% copper cut-off
Category	Tons (millions)	Cu (%)	Mo (%)
Measured	830	0.260	0.008
Indicated	262	0.236	0.007
Total	1092	0.254	0.008

The resource and reserve estimation was completed by Gibraltar mine staff under the supervision of Scott Jones, P.Eng., Vice President, Engineering and a Qualified Person under National Instrument 43-101. Mr. Jones has verified the methods used to determine grade and tonnage in the geological model, reviewed the long range mine plan, and directed the updated economic evaluation. The estimates used long term metal prices of US$2.75/lb for copper and US$11.00/lb for molybdenum and 0.85 C$/US$ foreign exchange. Mr. Jones has reviewed this release. A technical report will be filed on www.sedar.com.

For further information on Taseko, please see the Company’s website tasekomines.com or contact:

Brian Bergot, VP, Investor Relations – 778-373-4533 or toll free 1-877-441-4533

Russell Hallbauer
President and CEO

BC2