March 19, 2010 / 7:03 PM / 8 years ago

UPDATE 1-Taseko Mines sees 2010 production above 80 mln pounds

* Q4 revenue sequentially up 40 pct

March 19 (Reuters) - Mineral exploration company Taseko Mines Ltd (TKO.TO) said it expects 2010 production to be more than 80 million pounds, primarily depending on the performance of its Gibraltar mine, and it intends to use available cash on hand to prepay senior secured debt facility.

In 2009, the company produced 70.3 million pounds of copper and 600,000 pounds of molybdenum.

The company, whose assets include the Gibraltar copper-molybdenum mine in British Columbia and the Prosperity gold-copper project, said its third and fourth quarter results were affected by a geotechnical issue, which hit metal and concentrate production.

“By year end, with the removal of the remaining bottlenecks in the system, Gibraltar will be producing roughly 27 million to 28 million pounds of copper in concentrates a quarter,” Chief Executive Russell Hallbauer said on a conference call with analysts.

The company’s fourth-quarter revenue stood at C$56 million, up sequentially from C$40.1 million, helped by increased concentrate sales and higher average realized copper prices.

It posted a quarterly operating profit of C$15.6 million, compared with C$9.4 million in the third quarter.

Taseko also said it intends to close its previously announced joint venture deal with Sojitz Corp, by which the latter will pay about C$180 million to Taseko for getting 25 percent interest in the Gibraltar copper-molybdenum mine.

“With proceeds from this transaction plus C$50 million cash on hand, the company intends to prepay its senior secured debt facility,” Chief Financial Officer Peter Mitchell said.

Shares of the Vancouver, British Columbia-based company were down 2 percent, or 10 Canadian cents, at C$4.90 Friday afternoon on the Toronto Stock Exchange. (Reporting by Koustav Samanta in Bangalore; Editing by Maju Samuel)

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