TASEKO ANNOUNCES PRICING OF SENIOR SECURED NOTES OFFERING

Rhea-AI Summary

Taseko Mines announced a US$500 million Senior Secured Notes offering due 2030 at an 8.25% annual interest rate to redeem existing notes, fund projects, and for general corporate purposes.

Financial Analyst

Taseko Mines Limited's announcement of a $500 million Senior Secured Notes offering with an 8.25% interest rate due in 2030 is a significant financial move. The decision to issue debt at this rate, above current averages for industrial companies, suggests a higher risk profile or a strategic move to lock in capital for expansion, despite higher costs. The market will likely scrutinize the interest rate, comparing it to the industry's average cost of debt to gauge Taseko's financial health and risk management strategy.

The use of proceeds to redeem existing debt due in 2026 and to finance capital expenditures at key projects indicates a proactive approach to managing the company's debt maturity profile and investing in growth. Investors should consider the potential for increased earnings from the Florence Copper project and Gibraltar mine against the cost of additional interest expenses. The impact on Taseko's leverage ratios and cash flow will be important for evaluating the long-term sustainability of this financial strategy.

Legal Expert

The structuring of the Notes as Senior Secured with junior priority liens on subsidiary shares and certain rights under a joint venture agreement introduces layers of complexity for stakeholders. Investors need to understand the legal implications of these securities, particularly in scenarios of default or restructuring. The guarantees from restricted subsidiaries and the conditional release upon the admission of a minority joint venture partner for the Florence Copper project are legal nuances that could affect the Notes' recovery value in adverse situations.

Furthermore, the fact that the Notes will not be registered under the U.S. Securities Act of 1933 and will be exempt from registration requirements and prospectus qualification in Canada limits the potential investor base to 'qualified institutional buyers' and non-U.S. persons. This legal structuring has implications for liquidity and marketability of the Notes, potentially affecting their trading premium or discount in secondary markets.

Market Research Analyst

From a market perspective, Taseko's issuance of Senior Secured Notes is an indicator of the company's strategic direction and confidence in its projects. The allocation of funds towards the Florence Copper project and the Gibraltar mine suggests a bullish outlook on copper demand and prices. Given the importance of copper in electric vehicles and renewable energy technologies, the market will likely view this capital allocation as a positive signal for Taseko's future growth prospects.

However, the market's reception of the Notes will also depend on the broader economic context, including interest rates, commodity prices and investor appetite for mining sector debt. The high-interest rate on the Notes might reflect current market conditions and investor expectations for higher yields amidst economic uncertainties. The success of this offering could set a precedent for similar companies considering debt financing in a potentially tightening credit market.

VANCOUVER, BC, April 9, 2024 /PRNewswire/ - Taseko Mines Limited (TSX: TKO) (NYSE American: TGB) (LSE: TKO) ("Taseko") today announced that it has priced an offering of US$500 million aggregate principal amount of Senior Secured Notes due 2030 (the "Notes"). Interest on the Notes will accrue at an annual rate of 8.25% payable semi-annually, and the Notes will be issued at par. The offering is expected to close on April 23, 2024, subject to customary closing conditions.

Taseko intends to use the net proceeds from this offering, together with cash on hand, to redeem all US$400 million aggregate principal amount outstanding of its Senior Secured Notes due 2026 (the "Existing Notes") (including accrued interest), to make capital expenditures, including at its Florence Copper project and Gibraltar mine, as working capital and the remainder, if any, for general corporate purposes and to pay fees and expenses in connection with this offering.

The Notes will be secured by junior priority liens on the shares of Taseko's wholly-owned subsidiaries, Gibraltar Mines Ltd. ("Gibraltar"), Curis Holdings (Canada) Ltd. ("Curis"), Florence Holdings Inc. ("Florence Holdings"), and Cariboo Copper Corp. ("Cariboo") and by Gibraltar's rights under the joint venture agreement relating to the Gibraltar mine. The Notes will also be guaranteed by certain restricted subsidiaries including Gibraltar, Curis, Florence Holdings, Cariboo, Florence Copper Holdings Inc., FC-ISR Holdings Inc., and Florence Copper LLC ("Florence"). Upon admission of a minority joint venture partner for the Florence Copper project under certain conditions, the guarantee of the bonds by Florence would be released. 

The Notes will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any other jurisdiction. The Notes will not be qualified by a prospectus in Canada. Unless they are registered or qualified by a prospectus, the Notes may be offered and sold, only in transactions that are exempt from registration requirements and from prospectus qualification under Canadian securities laws. In the United States, the Notes will be offered and sold, only to persons reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and outside the United States, to non-U.S. persons in compliance with Regulation S under the Securities Act.

This press release is neither an offer to sell nor the solicitation of an offer to buy the Notes, the Existing Notes or any other securities and shall not constitute an offer to sell or solicitation of an offer to buy, or a sale of, the Notes, the Existing Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful. This press release does not constitute a notice of redemption with respect to the Existing Notes.

Stuart McDonald

President and CEO

No regulatory authority has approved or disapproved of the information contained in this news release.

Caution Regarding Forward-Looking Information

This document contains forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements"), within the meaning of applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and 21E of the U.S. Securities Exchange Act of 1934, as amended, which may not be based on historical fact, including without limitation statements regarding Taseko's expectations in respect of the completion of the Note offering and the redemption of the Existing Notes, the future financial position, business strategy, future production, reserve potential, exploration drilling, exploitation activities, events or developments that Taseko expects to take place in the future, projected costs and plans and objectives. Often, but not always, forward-looking statements can be identified by the use of the words "believes," "may," "plan," "will," "estimate," "scheduled," "continue," "anticipates," "intends," "expects," "aim" and similar expressions.

Such statements reflect Taseko's current views with respect to future events and are subject to risks and uncertainties. These statements are necessarily based upon a number of estimates and assumptions that are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies, including the completion of the Note offering and the redemption of the Existing Notes. Many factors could cause Taseko's actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including those contained in Taseko's filings as well as the ability to complete the Note offering and the redemption of the Existing Notes. For general information on Taseko, review the documents that Taseko has filed with or furnished to the United States Securities and Exchange Commission www.sec.gov and home jurisdiction filings that are available at www.sedarplus.ca.

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SOURCE Taseko Mines Limited

FAQ

What is the purpose of Taseko Mines 's US$500 million Senior Secured Notes offering?

Taseko Mines intends to use the net proceeds from the offering to redeem existing notes, fund projects like Florence Copper and Gibraltar mine, and for general corporate purposes.

What is the interest rate on the Senior Secured Notes due 2030 offered by Taseko Mines ?

The annual interest rate on the Senior Secured Notes due 2030 offered by Taseko Mines is 8.25%, payable semi-annually.

When is the expected closing date for Taseko Mines 's US$500 million Senior Secured Notes offering?

The offering is expected to close on April 23, 2024, subject to customary closing conditions.

Which subsidiaries of Taseko Mines will secure the Senior Secured Notes?

The Notes will be secured by junior priority liens on the shares of Taseko's wholly-owned subsidiaries, including Gibraltar Mines , Curis Holdings (Canada) , Florence Holdings Inc., and Cariboo Copper Corp.

Who will guarantee the Senior Secured Notes offered by Taseko Mines ?

The Notes will be guaranteed by certain restricted subsidiaries, including Gibraltar, Curis, Florence Holdings, Cariboo, Florence Copper Holdings Inc., FC-ISR Holdings Inc., and Florence Copper