Mr. Stuart McDonald reports

TASEKO ACQUIRES 100% OF GIBRALTAR MINE

Taseko Mines Ltd. has entered into a definitive agreement to acquire the remaining 12.5-per-cent interest in the Gibraltar mine from Dowa Metals & Mining Co. Ltd. and Furukawa Co. Ltd. Under the terms of the agreement, Taseko will acquire Dowa and Furukawa's shares in Cariboo Copper Corp., and will then own 100 per cent of Cariboo shares and have an effective 100-per-cent interest in the Gibraltar mine.

The acquisition price consists of a minimum amount of $117-million payable over a period of 10 years, and potential contingent payments depending on copper prices and Gibraltar's cash flow. An initial $5-million will be paid to Dowa and Furukawa ($2.5-million each) shortly following closing, and the remaining amounts will be settled with annual payments commencing in March, 2026.

Stuart McDonald, president and chief executive officer of Taseko, commented: "We are happy to once again own 100 per cent of the Gibraltar mine, our foundational asset, which will continue to generate strong returns for the company for many years to come. This acquisition provides 14-per-cent growth in our attributable copper production, and is immediately cash flow accretive as we advance construction at our Florence copper project.

"We also receive additional offtake rights as the Cariboo offtake contract comes back to Taseko, providing potential cost savings and longer-term strategic benefits as we continue to develop our North American copper production profile.

"We have established a positive relationship with Dowa and Furukawa over the last 14 years. Given that both groups are reducing their copper smelting businesses and are exiting their copper mining investments, we've been able to structure this exit from our long-term partnership in a mutually beneficial manner," concluded Mr. McDonald.

Terms of the acquisition

An initial $5-million payment will be made to Dowa and Furukawa shortly following closing. The remaining cash consideration will be repayable in annual payments commencing in March, 2026. The annual payments will be based on the average LME (London Metal Exchange) copper price of the previous calendar year, subject to an annual cap based on a percentage of cash flow from the Gibraltar mine. At copper prices below $4.00 (U.S.) per pound, the annual payment will be $5-million, increasing pro rata to a maximum annual payment of $15.25-million at copper prices of $5.00 (U.S.) per pound or higher. The annual payments also can not exceed 6.25 per cent of Gibraltar's annual cash flow for the 2025 to 2028 calendar years, and 10 per cent of Gibraltar's cash flow for the 2029 to 2033 calendar years. Any outstanding balance on the minimum acquisition amount of $117-million will be repayable in a final balloon payment in March, 2034.

Total consideration is capped at $142-million, limiting the contingent consideration to a maximum of $25-million. In addition, Taseko has the option to settle the full acquisition price at any time prior to 2029 by making total payments of $117-million.

The company's minimum payment obligations are in the form of loans from Dowa and Furukawa to Cariboo. The loans are guaranteed by Taseko, and a portion of the loans are secured by Cariboo's 25-per-cent joint venture interest in the Gibraltar mine. The loans contain minimum protective covenants, including the requirement not to amend the joint venture agreement for the Gibraltar mine, or sell Cariboo's 25-per-cent interest in the joint venture.

Under the Cariboo offtake arrangements entered into in 2010, Dowa and Furukawa were entitled to receive 30 per cent of Gibraltar's copper concentrate offtake for the life of mine, at benchmark terms. Upon closing of this acquisition, the Cariboo offtake agreement will be terminated and Taseko will retain full marketing rights for 100 per cent of Gibraltar's concentrate offtake going forward.

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