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With New Prosperity on hold, central Interior mine could fund acquisitions
VANCOUVER — The battle over Taseko’s New Prosperity copper-gold project has played out in the media, corridors of political power and now, in court.
Out of the limelight, Taseko has sunk about $300 million into equipment that will increase production and reserves at its 75-per-cent owned Gibraltar copper-molybdenum mine in the central Interior, and the strategy appears to be paying off.
For the three months ended June 30, Gibraltar produced 38.5 million pounds of copper and 667,000 pounds of molybdenum — increases of 37 per cent and 100 per cent, respectively. Gibraltar is Canada’s second-largest open-pit copper mine and one of the largest employers in the Cariboo, with 700 workers.
“We’re in the early stages of really starting to make it purr like a fine-tuned machine,” Taseko CEO Russ Hallbauer said during a recent interview. “It’s a big accomplishment for everybody involved, from the employees at the site to the corporate folks that worked on it.”
Gibraltar’s site costs — “what we can control” — are down to about $2 per pound of copper, putting the company on solid footing in case of a downturn in metals prices, according to Hallbauer. Copper now sells for about $3.16 a pound.
“We can withstand all the bottoms of the cycle, unless it becomes very, very extraordinary,” he said. “If there becomes an oversupply and (mines) have to shut down, there are going to be a lot more shut down that are higher on the cost curve than we are.”
And Gibraltar is starting to generate “significant” cash flow for Taseko, a trend that will accelerate if metal prices increase, said Hallbauer, a third-generation miner — albeit one whose original career plan involved accounting.
His father Bob was a Teck senior vice-president who opened several mines and helped build the company into a global mining powerhouse. His grandfather was a master mechanic in a gold mining district outside Nelson.
“You had the mine manager and then you had the guy that kept everything running,” he said. “That was what my grandfather did.”
After studying commerce at the University of B.C., Hallbauer switched to mining engineering and attended the Colorado School of Mines, partly as a “lifestyle choice” to get out of the city, he admits — “I like hunting and fishing and golfing.”
He graduated in 1979 and worked for five years at the Similkameen mine (now run by Copper Mountain) outside of Princeton, where the father of two first met his wife. Stints at Teck’s Bullmoose and Quintette coal mines followed before a move to Teck’s Vancouver headquarters, where he oversaw mines including Highland Valley. He joined Taseko in 2005.
The biggest change in the industry? The amount of time it takes to permit and build a mine, Hallbauer said.
“Our Gibraltar mine was built in the ’70s, and it was built in 18 months. It took six months to permit. It’s been running for 40 years with not one environmental issue. Why does it now take six, eight, 10 years to permit something?
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