TORONTO (miningweekly.com) – British Columbia-focused base-metals miner Taseko’s first-quarter production came in below expectations owing to lower-than-expected mill availability, raising concern about the company’s ability to achieve its throughput guidance for the first half of the year.

Taseko late on Thursday said it had produced 23.2-million pounds of copper and 355 000 lb of molybdenum (on a 100% basis) at its 75%-owned Gibraltar mine in the quarter.

Total sales in the first quarter were 21.5-million pounds of copper and 337 000 lb of molybdenum. Taseko's 75% share of the quarter’s sales was 16.1-million pounds of copper and 253 000 lb of molybdenum.

Following a planned ten-week commissioning schedule, Concentrator 2, which was part of the Gibraltar Development Plan III (GDP3), was officially turned over to the operations team on March 28. The company said throughput steadily climbed from 500 t/h to 1 000 t/h, as ball charge rates were being increased toward design criteria.

Taseko said the new concentrator had averaged 80% availability, and copper recoveries were more than 80%. During this period, the combined throughput of the two concentrators had averaged 74 000 t/d at an 82% copper recovery.

Laurentian Bank Securities Equity Research mining analyst Christopher Chang on Friday in a note to clients said production was below expectations, owing to lower mill availability.

Despite this, he was happy to see that concentrator No 1 had successfully reached design capacity and that concentrator No 2 was advancing smoothly out of the gate, as the successful ramp-up of GDP III should significantly de-risk the operation.

“However, given the weak Q1 production result, we believe it is unlikely that Gibraltar achieves its H1/13 mill throughput guidance. Should Taseko continue ramping up GDP III at an impressive rate, we believe the company could make up its lost throughput in the back half of 2013 to achieve its total mill throughput guidance for the year,” Chang said.

"Early results from Concentrator 2 performance are as expected and we anticipate advancing to design capacity as expeditiously as the mechanical circuits allow. This is in line with our projections of full design throughput of 30 000 t/d by mid-year,” Taseko CEO Russell Hallbauer said.

He added that Concentrator 1 was expected to improve throughput, owing to it now being unencumbered by construction activities.

"We have transformed Gibraltar from 60-million pounds of yearly copper production and a 40-month mine plan, to a modern 165-million pound per year producer with a 25 year mine life.

“This was achieved at the lowest capital cost of any major mining project in the world. We look forward to demonstrating both our production and cost capabilities in 2013,” Hallbauer said.

Taseko is the 75%-owner and operator of the Gibraltar copper/molybdenum mine, located in south-central British Columbia, and the second largest openpit copper mine in Canada as well as the largest employer in the Cariboo region.

By the end of 2012, the company had invested about $700-million to expand and modernise the operation, which was scheduled for demolition when the company acquired it in 1999.

Joint venture partner Cariboo Copper owns the remaining 25%.

Chang maintained a ‘buy’ rating on the company’s TSX-listed stock, with a target price of $4 apiece.

The company’s stock on Friday traded at $2.61 apiece on the TSX.