Good morning. My name is Ina, and I will be your conference operator today. At this time, I would like to welcome everyone to Taseko Second Quarter Earnings Conference Call. [Operator Instructions] Mr. Brian Bergot, you may begin your conference.

Thank you, Ina. Welcome, everyone, and thank you for joining Taseko’s second quarter 2024 conference call. The news release and regulatory filing announcing our financial and operational results was issued yesterday after market close and is available on our website at tasekomines.com, and on SEDAR. I am joined today in Vancouver by Taseko’s President and CEO, Stuart McDonald; Taseko’s Chief Financial Officer, Bryce Hamming; and our COO, Richard Tremblay. As usual, before we get into opening remarks by management, I would like to remind our listeners that our comments and answers to your questions will contain forward-looking information. This information, by its nature, is subject to risks and uncertainties that may cause the stated outcome to differ materially from the actual outcome. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our second quarter MD&A and the related news release as well as the risk factors particular to our company. I would also like to point out that we will use various non-GAAP measures during the call. You can find explanations and reconciliations regarding these measures in the related news release. And finally, all dollar amounts we will discuss today are in Canadian dollars unless otherwise specified. While [indiscernible] remarks, we will open the phone lines to analysts and investors for questions. I’ll now turn the call over to Stuart for his remarks.

Great. Thanks, Brian, and good morning, everyone. Thanks for taking the time to join us today to review our second quarter operating and financial results. It’s been another eventful quarter and a busy first half, really. We’ve had a number of significant accomplishments so far this year, including consolidating 100% ownership of our Gibraltar mine refinancing our bonds, completing Florence project financing and then having a very positive start to construction activities of Florence. And more on that in a minute, but I’ll start with Gibraltar operations. And the mine produced 20 million pounds of copper and 185,000 pounds of molybdenum in the second quarter. Production was impacted by the planned downtime in mill #1 for the crusher move project and for maintenance on the SAG mill and also a strike of the mine’s unionized workforce, which shut down both mills and the whole site for 18 days in June. All of that downtime resulted in total tonnes milled being about 25% below nameplate capacity. And that, of course, has a direct knock-on effect to copper production. Copper had grades averaged 0.23%, which was generally in line with our expectations and copper recoveries were 78%, slightly below plan due to the inconsistent mill operating time as well as processing some partially oxidized ore from the upper benches of the connector pit. Mining rates were also impacted by the labor disruption, but our strip ratio remained in line with plan. We started accessing initial sulfide ore from the new connector pit and the transition into that new pit will continue over the next few months. We’ll be completely out of the Gibraltar pit this fall. Running part of the quarter with only one mill obviously has an impact on unit costs, and our total operating costs are C1, increased to USD…

Thanks, Stuart. And yes, there were a few accounting one-off events during the second quarter, making it somewhat complicated from an accounting standpoint. So I’ll start with explaining these further. We posted a GAAP net loss of CAD11 million, but on an adjusted basis, we derived an adjusted net income of CAD30.5 million or CAD0.10 a share. So some notable key items that were expensed in the quarter for GAAP over and above our usual unrealized derivatives and affects losses. These additional items that we adjusted for – in our adjusted earnings were – just got a list here. So the first was the CAD10.4 million in other operating costs that we incurred in Q2 that related to the cost for the actual physical move of the primary crusher. Those are expensed under audit for us, although they relate to the overall capital projects. And then we also had site care and maintenance while the operations were suspended in June for that 18-day strike that we had. We also had CAD8 million in inventory costs that were written up back in March when we acquired the remainder of Caribou. And when we sold or processed those in the current quarter, we charged that write-up to cost of sales and had higher costs, which we reversed in our adjusted earnings. We also had CAD10.5 million in accretion on our Caribou liability for our deferred consideration and for our Florence royalty obligations, and that arose due to the rising copper trends as well as the more positive outlook for copper prices in the years ahead. And we also had a CAD10 million onetime call premium that we paid on our bond refinancing, as well as a CAD3 million write-off of our deferred financing costs related to the 2026 notes. So we consider…

[Operator Instructions] Your first question comes from the line of Craig Hutchison from TD Cowen. Please go ahead.

Hi. Good morning guys. Thanks for taking my question.

Good morning Craig.

Couple of questions on Gibraltar, just the recoveries have been trending lower for last few quarters, and I know it’s partly due to the connector pit. But can you give us some guidance in terms of, what the kind of recoveries look going forward, is it going to be similar to what we saw in Q2 or is that impacted by the disruptions with the labor strikes?

Yes. Hi Craig, Richard here. Yes, I know you are right. The recoveries have been impacted by the move in the connector pit and similar to what we have seen in other – when we transitioned to other mining areas, the ore at the top of the deposit is more of a transition in nature. And connector pit has higher degrees of oxidation. So, as we mine through that ore, we will continue to see the recoveries improve as we go forward and get back in more in line with what we have seen in the past when we are into the heart of the ore zones.

Okay. And maybe as a follow-up, to get your guidance to the 110 to 115 like, what should we be assuming here for throughput and grade to the back half this year? I know you have had lost some throughput in the beginning of July just completing the work you guys were doing there. But should we assume your backup is a full design 85,000 tons a day and kind of 0.24% copper grades for the back half this year.

Yes, I think certainly had a little bit of obviously continued downtime in the first part of July. But since concentrator number one came back online, we ramped up for a week or so, but it’s been running very well. And yes, we see good opportunity there to potentially push throughput over 85,000 tons a day for the next couple of quarters, so yes, pretty optimistic on the throughput side. Grades, generally, I think should stay fairly consistent with what you saw in the first half. I think the opportunity obviously comes from having continuous mill operating time and with both mills repaired and running well, should be – yes, should be good upside on the throughput. So, we have given a range, we don’t like to be too precise in the different components of the guidance, but that’s hopefully that’s helpful.

Alright. Thank you. And then just on the SX/EW expecting to come back online next year, any sense in terms of what the cash costs are at this point for that kind of level of production?

I mean something in the range of $2 a pound is what we are seeing. Obviously, yes, not dissimilar from the rest of the operation based on what we are seeing at this point.

Okay. Then one last question for me, just on the Florence, you mentioned the potential to get the credits in the U.S. government. Yes, are we talking, what’s the level of credits we are talking about like 30% of the cost of the SX/EW facility and it’s going to give you the magnitude of what it could potentially be?

Yes. We are looking at that closely, Craig. I think the real question is how much of it is eligible and then what rate is the tax credit. I think conservatively, like we are probably looking at about it, $20 million credit, based on our spend. That’s based on a 6% tax credit rate. There is ability for it to go as high as 30%, so it could be up to 5x that. But exactly where we land on that, we will probably have better guidance on it in Q3 once we have submitted the application.

Thanks guys. I will turn it over to somebody else.

Thanks Craig.

Thank you. And your next question comes from the line of Ben Davis from Panmure Liberum. Please go ahead.

Great. Thanks guys. Thanks for the call. A couple of questions from me. Simple one, firstly, just on the wage agreement, was that – did that cover the whole workforce? And then secondly, another one on just kind of system inventories of a bit of a draw down with more sales and production over the past couple of quarters. Do you expect to rebuild those and at what pace kind of going forward? Thanks.

Hi Ben, it’s Stuart speaking here. Generally on the workforce, rough – I mean these are rough numbers, roughly 750 employees at the mine and roughly 550 of those are in the union. So, the new contract applies to that 550 portion of the total, yes. So, we are happy to get that deal behind us. That will be in place for the next 3 years. On the inventory side, yes, on finished goods, we had a bit of a drawdown this quarter. I suppose that some of the mill downtime allowed us to move out a little bit of extra inventory perhaps, but not unusually low inventory at quarter end, so we should see something in those ranges continue for the future, yes. So, nothing – no surprises coming out, I don’t think on in terms of finished goods inventory in the next few quarters.

Okay. Great. That’s helpful. And actually just following up on the SX/EW, so cash cost hopefully around the $2 mark, but with the restart, was the thinking about basically securing enough or was there also a price equation within that as well?

Sorry, Ben, Richard here. The question was what’s triggering the restart?

Yes, exactly, is this just now you have rebuilt stockpiles sufficiently that it now makes economic sense to do every start of the SX/EW.

Yes, that’s correct. The connector pit releases a significant portion of oxide ore, that’s now been placed on the dump and allows its economic now to restart the plant because we have basically replenished the leach pads.

Got it. Okay. Great. That’s all for me. Thanks.

Thank you. That concludes your question-and-answer session. I will now hand the call back to Taseko management for any closing remarks.

Okay. Thank you very much everyone for joining our call and we will talk to you again next quarter and enjoy the rest of the summer. Bye now.

That concludes our conference today. Thank you for participating. You may all disconnect.