Mr. Russell Hallbauer reports

TASEKO ANNOUNCES IMPROVED ECONOMICS AT ITS GIBRALTAR COPPER MINE

Taseko Mines Ltd. has completed an updated mine plan for Gibraltar featuring a 50-per-cent 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 National Instrument 43-101-compliant reserve.

Highlights of the mine plan are:

• 749 million tons grading 0.272 per cent 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 to 1 (from 4.3 to 1);
• Copper cut-off decreased to 0.15 per cent (from 0.20 per cent).

Russell Hallbauer, president and chief executive officer 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 focuses 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-per-cent-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 general and administrative) in the new mine plan to remain at a level similar to today, approximately $10.00.

"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-per-cent increase in metal prices would lift cash flow by more than 50 per cent."

The reserve evaluation used a 0.15-per-cent-copper cut-off, incorporating a $2.75/pound copper and an 85-cent/$1 (U.S.) foreign exchange rate pit shell design. The result is a pit design that maintains current reserve tonnage, mines 45 per cent less total material and maintains the ability to extract the remaining resource.

Copper-equivalent is based on an 85-per-cent copper recovery, $3.00 (U.S.)/pound copper price, 50-per-cent molybdenum recovery and $10 (U.S.)/pound molybdenum price.

Gibraltar's proven and probable reserves as of Dec. 31, 2014, are shown in the table.

                     GIBRALTAR MINE MINERAL RESERVES

Pit              Category               Tons             Cu          Mo
                                          (M)            (%)         (%)

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 are contained within the mineral resources shown in the table.

                      GIBRALTAR MINE MINERAL RESOURCES 

Category              Tons                           Cu               Mo 
                        (M)                          (%)              (%) 
         
Measured               830                        0.260            0.008           
Indicated              262                        0.236            0.007           
Total                1,092                        0.254            0.008           

The resource and reserve estimation was completed by Gibraltar mine staff under the supervision of Scott Jones, PEng, 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 $2.75 (U.S.)/pound for copper and $11 (U.S.)/pound for molybdenum, and a foreign exchange rate of 85 cents/$1 (U.S.). Mr. Jones has reviewed this release. A technical report will be filed on SEDAR.

We seek Safe Harbor.