Mr. Russell Hallbauer reports

TASEKO REPORTS STRONG 2015 YEAR END RESULTS DESPITE CHALLENGING MARKET CONDITIONS

Taseko Mines Ltd. has released financial results for the year ended Dec. 31, 2015.

Russell Hallbauer, president and chief executive officer of Taseko, commented: "Financially and operationally, Taseko performed extremely well in 2015, despite a challenging business environment. The price of copper continued its decline in 2015 with prices averaging 20 per cent lower than in 2014. Even with significantly lower copper pricing, cash flows from operations increased to $52-million, and earnings from mining operations before depletion and amortization were $51-million. We ended the year with a strong cash position of $76-million, up $23-million from the end of 2014. Subsequent to year-end, we also completed a $70-million (U.S.) credit facility to further strengthen our balance sheet. The initial proceeds were used to repay a $31-million (U.S.) loan, which had a May, 2016, maturity, and the balance of the facility will be available to us moving forward.

"In the fourth quarter, we generated operating margin of $6-million; however, the decline in copper price in the fourth quarter resulted in negative provisional pricing adjustments of $4-million, which impacted the average realized price and earnings for the quarter. The strong operating margin was mainly attributable to further reductions in cost per ton milled," continued Mr. Hallbauer.

Annual highlights for 2015:

• Earnings from mining operations before depletion and amortization were $50.8-million, a decrease from $52.3-million in 2014.
• The company generated cash flows from operations of $51.7-million, up from $50.6-million in 2014.
• The company's cash balance at the end of 2015 was $76.0-million, $22.7-million higher than at the end of 2014.
• Site operating costs were $1.65 (U.S.) per pound produced, a 29-per-cent decrease from $2.32 (U.S.) per pound in 2014.
• Total operating costs (C1) were $1.96 (U.S.) per pound produced, a 22-per-cent decrease from the $2.50 (U.S.) over the 2014 financial year due to reduced expenditures and increased copper production, despite a significant reduction in byproduct credits due to the idling of the molybdenum plant in July.
• Site operating costs per ton milled were $9.83 (Canadian), a 14-per-cent decrease over the 2014 financial year due to reduced expenditures and higher mill throughput.
• During the year, the company settled its copper put option contracts for proceeds of $21.4-million, resulting in a gain on derivatives of $13.3-million.
• Copper production at Gibraltar was at a record level of 142 million pounds (100-per-cent basis), a 4-per-cent increase over 2014 due to improved head grade, mill throughput and recoveries.
• The company has in place copper put options for a total of 15 million pounds over the first quarter of 2016 at a strike price of $2.05 (U.S.) per pound.
• In the second quarter, an updated mine plan and reserve for Gibraltar were completed. The newly implemented mine plan has resulted in improved economics for the remaining 23-year reserve life.

Fourth quarter highlights:

• Earnings from mining operations before depletion and amortization were $2.2-million, and were impacted by negative provisional price adjustments of $3.8-million.
• Site operating costs, net of byproduct credits, were $1.52 (U.S.) per pound produced, and total operating costs (C1) were $1.85 (U.S.) per pound produced.
• Site operating cost per ton milled was $9.41 (Canadian), which was lower than the 12-month average of $9.83 (Canadian).
• Copper production at Gibraltar was 33.1 million pounds (100-per-cent basis).
• The company entered into a five-year offtake agreement to sell 600,000 tonnes of Gibraltar copper concentrate (approximately 50 per cent of expected production) through to the end of 2020, with treatment and refining rates significantly better than current market rates.

"Our Gibraltar mine achieved record copper production of 142 million pounds from mill throughput of 31 million tons, which was also a record amount of ore processed. Copper grade and recoveries were also higher in 2015. Most importantly, Gibraltar's total cash costs (C1) declined from the first half of 2015 to the second half. A number of cost initiatives contributed to the lower costs, including a work force reduction, lower input costs, weaker Canadian dollar and ongoing performance improvements," continued Mr. Hallbauer. "We expect to continue to benefit from the lower costs going forward, and we also have a number of other initiatives under way to further reduce costs. While cost per pound is important, our focus continues to be on cost per ton milled, which at under $10 (Canadian) per ton makes Gibraltar one of the most cost-effective mines in the industry."

Mr. Hallbauer concluded: "Off-property costs have been another significant focus for the company in recent months. We have entered into a five-year treatment and refining offtake agreement, and we also capitalized on ocean freight rates being at 20-year lows with a new three-year contract of affreightment with one of the world's leading dry-bulk operators. Combined cost saving from both of these agreements are expected to be approximately $7-million (U.S.) annually. We now have a large percentage of our off-property costs locked in at very favourable terms. The quality of Gibraltar concentrate allowed us to negotiate favourable terms for both of these long-term contracts."

                                           HIGHLIGHTS  
Financial data                                         Three months ended Dec. 31,       Year ended Dec. 31,
(Cdn $ in thousands, except for per-share amounts)              2015         2014         2015         2014

Revenues                                                     $61,412      $58,273     $289,298     $342,946
Earnings (loss) from mining operations
before depletion and amortization                              2,155         (916)      50,834       52,265
Earnings (loss) from mining operations                       (10,674)     (11,164)       1,320        5,102
Net (loss)                                                   (23,441)     (26,427)     (62,352)     (53,884)
Per share -- basic (EPS)                                       (0.10)       (0.13)       (0.28)       (0.27)
Adjusted net (loss)                                          (13,112)     (20,983)     (15,531)     (37,086)
Per share -- basic (adjusted EPS)                              (0.06)       (0.10)       (0.08)       (0.19)
EBITDA                                                        (9,162)     (13,397)       8,196       11,649
Adjusted EBITDA                                                1,415       (8,355)      55,555       27,841
Cash flows provided by (used for) operations                   1,859       (8,648)      51,695       50,570

Operating data (Gibraltar -- 100-per-cent basis)       Three months ended Dec. 31,      Year ended  Dec. 31,
                                                                2015         2014         2015         2014

Tons mined (millions)                                           21.3         25.1         93.7        113.8
Tons milled (millions)                                           7.3          7.6         30.6         30.2
Production (million pounds Cu)                                  33.1         28.1        142.2        136.5
Sales (million pounds Cu)                                       33.7         26.5        142.5        143.4

Review of operations

Gibraltar mine (75 per cent owned)

Operations analysis

Full-year results

Gibraltar's copper production in 2015 was at a record level of 142 million pounds, a 4-per-cent increase over 2014 due to improved head grade, mill throughput and recoveries.

Site operating costs for the year were $1.65 (U.S.) per pound of copper produced, a 29-per-cent reduction from 2014 as a result of the following:

• Mine optimization based on the new mine plan;
• Work force reduction and rationalization;
• Vendor engagement resulting in decreased cost of supplies and services;
• An increase in mill throughput to 30.6 million tons;
• Improved copper recoveries to 85.1 per cent from 83.6 per cent in the prior year;
• A decline in the average price of diesel to 78 Canadian cents per litre from $1.11 (Canadian) per litre in 2014;
• A decline in the Canadian-dollar/U.S.-dollar exchange rate to an average of 1.28 in 2015 from 1.10 in 2014.

Site operating costs, net of byproduct credits, fell to $1.59 (U.S.) per pound, a 24-per-cent decrease over the prior year. This was achieved despite a significant reduction in byproduct credits as molybdenum prices declined to a level which provided no operating margin and resulted in the decision to temporarily idle the molybdenum plant in July.

Off-property costs were 37 U.S. cents per pound of copper produced, a 12-per-cent reduction over 2014 as a result of the following:

• A new, long-term offtake agreement was signed in the fourth quarter of 2015 with improved treatment and refining costs;
• Reduced ocean freight rates, which declined to their lowest levels in more than 20 years;
• Reduced molybdenum treatment costs due to the idling of the molybdenum circuit.

Total operating costs (C1) fell to $1.96 (U.S.) per pound for the year, compared with $2.50 (U.S.) per pound in 2014.

Fourth quarter results

During the fourth quarter of 2015, Gibraltar mill production averaged approximately 78,800 tonnes per day or 93 per cent of design capacity and lower than the third quarter of 2015. The decrease in mill throughput in the fourth quarter was a result of modifications made to the mill early in the fourth quarter, which temporarily affected the grinding circuits and overall mill performance. By early December, mill throughput had returned to design capacity along with improvements to copper recovery. Copper recovery remains a focus of the operations team.

In the fourth quarter of 2015, Gibraltar mined 21.3 million tons. Copper production in the fourth quarter was 33.1 million pounds, lower than the third quarter due to the expected decline in head grade, as well as slightly lower mill throughput and copper recoveries.

Site operating cost per ton milled continued to decline in the fourth quarter, falling to $9.41 (Canadian), a 9-per-cent decrease from the third quarter. Site operating costs per pound and total operating costs (C1) per pound both increased slightly from the previous quarter due to lower copper production.

Operations analysis -- continued

Health and safety milestones

The health, safety and well-being of the company's employees, contractors and their families are a priority for Taseko and Gibraltar management. Actual performance is a reflection of that commitment.

On Dec. 31, 2015, Taseko's Gibraltar mine employees and contractors completed a second calendar year without a single loss-time incident. The accident-free period continues and now exceeds three million person-hours worked. This is a truly outstanding achievement, which is unparalleled in the industry.

TSM initiatives

Taseko is a member of the Mining Association of Canada and the Mining Association of British Columbia. Both of these organizations require members to participate in a program known as toward sustainable mining (TSM), which encourages companies to work toward best management practice standards through self-regulation and reporting on key performance areas. These areas include:

• Energy use and greenhouse gas emissions management;
• Biological diversity conservation management;
• Aboriginal and community outreach;
• Tailings management;
• Health and safety;
• Crisis management planning.

In 2015, Taseko and Gibraltar's performance and reporting on performance in all of the areas were verified by an external auditor as being at a level of industry best practice. Further details can be found on the Taseko website.

Gibraltar outlook

Average head grade in 2016 is expected to be lower than 2015 but have a similar profile, with lower grades being mined in the first half of the year and then increasing in the back half of 2016. Copper production for the year is expected to be in the range of 130 million to 140 million pounds.

Cost control initiatives, which were implemented during 2015, including mine plan modifications, to reduce waste stripping requirements, work force reductions, and initiatives with vendors to reduce costs of supplies and consumables, are expected to continue to impact operating costs in future years. Mine operating costs continue to benefit from the lower price of diesel, a significant input cost, which has decreased approximately 25 per cent since the beginning of 2015 and is expected to remain at low levels at least through 2016. Over all, Gibraltar has achieved a stable level of operations, reflecting the new mine plan, and the company is now focused on further improvements to operating practices to reduce unit costs.

The Canadian dollar is expected to remain at a substantial discount to the U.S. dollar, and a weak Canadian dollar will continue to contribute to improved operating margins at Gibraltar as approximately 80 per cent of mine operating costs is paid in Canadian dollars.

The new, long-term offtake agreement, which the company signed in the fourth quarter of 2015, will lower treatment and refining costs in 2016. Under the agreement, the company has committed to sell 600,000 tonnes of Gibraltar copper concentrate (approximately 50 per cent of expected production) through to the end of 2020. The company has also recently entered into a long-term fixed-rate ocean freight contract. Off-property costs are expected to be about 31 U.S. cents per pound in 2016, compared with 37 U.S. cents per pound in 2015, reflecting these new long-term contracts.

On Feb. 9, 2016, the company announced that its Gibraltar mine expects to benefit from a five-year power rate deferral program announced by the government of British Columbia. The cost deferral program has the potential to reduce Gibraltar's annual spending by up to $20-million, or roughly 15 cents per pound of copper production, at the current copper price of approximately $2.10 (U.S.) per pound.

Review of projects

Taseko's strategy has been to expand the company by leveraging off cash flow from the Gibraltar mine to assemble and develop a pipeline of projects. The company continues to believe this will generate the best, long-term returns for shareholders. Its development projects are located in British Columbia and Arizona and represent a diverse range of metals, including gold, copper and niobium. In light of current market conditions, the company has taken a prudent approach and minimized spending on development projects in 2015. Total expenditures on projects in 2015 consisted of $5.1-million at the Florence copper project, $900,000 on the Aley project and $900,000 on New Prosperity.

Florence copper project

The Florence copper project is currently in the final stages of permitting for the production test facility (PTF). The PTF will include a well field composed of 13 (four injection and nine recovery) commercial-scale production wells and numerous monitoring, observation and point of compliance wells, and also an integrated demonstration-scale solvent extraction and electrowinning plant. The PTF will provide additional data to optimize the final design of the full-scale commercial plant, as well as demonstrate the application of in situ copper recovery at the Florence site, including both the leaching (copper recovery) and rinsing (aquifer restoration) stages.

The company is continuing to work with the Arizona Department of Environmental Quality in connection with the amendment to the temporary aquifer protection permit, and with the U.S. Environmental Protection Agency in connection with the underground injection control permit. These are the final two remaining permits required for construction and operation of the PTF. The timing of both these final permits is somewhat uncertain, but the expectation is that they could be in hand in the first quarter of 2016.

Continuing metallurgical testing for the project reached a milestone in the fourth quarter with the completion of the leaching stage of a pressurized leach and rinse test. This series test is designed to provide additional scale-up data to confirm the prefeasibility study models, which were based on core box leach and rinse tests. The series test consists of seven pressure leach and rinse apparatus connected in series allowing over 14 feet of whole core to be contacted by process and rinse solutions. This test represents an order of magnitude increase in formation contact time versus the core box tests used for the prefeasibility study work. The data from the leaching phase of this series test have provided confirmation of two key economic limits from the prefeasibility study (pregnant leach solution grade and acid consumption). In addition, the leach kinetics observed in the series test conformed to expectations, with the leaching taking approximately seven months to complete. The rinsing phase of the series test is in progress and is forecast to be completed by mid-2016. To date, rinsing results have closely followed the prefeasibility predictions.

Aley project

On Sept. 19, 2014, the B.C. Environmental Assessment Office (EAO) issued a Section 10 order under the B.C. Environmental Assessment Act, initiating the B.C. environmental assessment process for the Aley niobium project. On Dec. 31, 2014, the EAO issued a Section 11 order establishing the scope, procedures and methods concerning the environmental assessment for the project.

The company is currently preparing the draft application information requirements (AIR). The EAO has established a working group, comprising representatives of CEAA, government agencies, first nations and local governments. This group will provide input on aspects of the environmental assessment, including the AIR.

Taseko replaced four Aley mineral claims with a 30-year mining lease in December, 2015.

Environmental monitoring of surface and groundwater baseline conditions and geochemical characterization of ore, waste rock and tailings in support of the environmental impact statement is in progress.

Although the majority of the continuing work on the Aley project is environmental assessment related, some additional metallurgical process optimization work commenced in the fourth quarter of 2015. This work consists of evaluating alternatives for both the hydrometallurgical and pyrometallurgical portions of the project flow sheet. An internal review of the project metallurgical testing and flow sheet development identified these process steps as having significant potential to reduce both the project preproduction capital cost and the operating costs.

New Prosperity project

In February, 2014, the government of Canada announced its decision to not issue the authorizations necessary for the New Prosperity project to proceed. In the wake of that decision, Taseko initiated legal proceedings in the form of two separate judicial reviews, which challenge the process by which the decision was reached. In August, 2014, the company applied to the Federal Court to convert both judicial reviews into a civil action. The motion was dismissed as the court felt that the judicial review process is the correct vehicle to pursue the remedies that the company seeks but noted that the option is open for the company to pursue damages for misfeasance against the federal government in a separate court action should the company wish to do so. The judicial review process continues in Federal Court although court dates have not been set yet.

On Feb. 11, 2016, the company filed a civil claim in the B.C. Supreme Court against the Canadian federal government. The claim seeks damages in relation to the February, 2014, decision. The lawsuit claims the government of Canada and its agents failed to meet the legal duties that were owed to Taseko and that in doing so, they caused and continue to cause damages, expenses and loss to Taseko.

On Jan. 14, 2015, the B.C. Minister of Environment granted the company a five-year extension to the environmental assessment certificate. The request for an amendment to the certificate is under review by the province.

The company is evaluating the current project design and potential tailings alternatives to achieve the best environmental protection in terms of both dam stability and potential impacts to water quality. The evaluation considers best practices and best available technologies, tailings storage locations, and water balance. The evaluation will be consistent with the province's requirement for all projects to undergo an assessment of alternative means of undertaking the project with respect to options for tailings management and will clarify any previous misconceptions with respect to all aspects of seepage control and water management.

Environmental monitoring of key groundwater baseline conditions is in progress.

The company will host a telephone conference call and live webcast on Feb. 24 at 11 a.m. Eastern Time (8 a.m. Pacific Time) to discuss these results. The conference call may be accessed by dialling 877-303-9079 in Canada and the United States, or 970-315-0461 internationally. The conference call will be archived for later playback until March 2, 2016, and can be accessed by dialling 855-859-2056 in Canada and the United States, or 404-537-3406 internationally and using the passcode 28713603.

We seek Safe Harbor.