TORONTO (miningweekly.com) – Despite navigating a challenging third quarter, base metals producer Taseko Mines has increased copper output from its Gibraltar copper/molybdenum mine by 16% year-on-year to 41-million pounds, with quarterly sales hitting the same volume.

"During the quarter, planned maintenance was performed on both [semiautogenous grinding] mills, as well as other key circuits in the mill, resulting in daily mill throughput of 82 000 t. This was 3.6% below design capacity and below the 88 000 t/d achieved in the previous quarter. With the maintenance work now behind us, we expect to be back to the higher throughput levels in the fourth quarter,” president and CEO Russell Hallbauer commented.

During the second quarter, Gibraltar's costs steadily declined with June's operating costs (C1) at $1.80/lb. “Third quarter average costs are expected to be at a similar level to June, even though mill throughput in the quarter was slightly below capacity. Lower costs are a result of operational efficiency improvements as well as cost containment initiatives, in both the mine and mill," Hallbauer explained.

Taseko’s engineering team was currently focused on finalising Gibraltar's 2016 operating plan and had already identified several areas for further cost savings.

Hallbauer stressed that Taseko would maintain a “very adaptable” mine plan in the event copper prices unexpectedly fell. Taseko reported that its hedging strategy was providing stability to its cash flow during this period of volatile copper pricing. In the third quarter, copper put options provided proceeds of C$2.3-million.

For the fourth quarter, the company had put options in place at $2.40/lb, which at today's exchange rate was equivalent to C$3.20/lb, for five-million pounds a month. “More recently we purchased copper put options for the first quarter 2016 with a strike price of $2.05/lb. We will continue to look for opportunities to improve our price protection in 2016,” Hallbauer advised.

Gibraltar was currently a joint venture owned 75% by Taseko and 25% by Cariboo Copper.