Taseko Mines Limited (TSX: TKO) (NYSE American: TGB) (LSE: TKO) is pleased to announce that it has entered into a definitive agreement to acquire an additional 12.5% interest in the Gibraltar Mine from Sojitz Corporation.  Gibraltar is operated through a joint venture which is owned 75% by Taseko and 25% by Cariboo Copper Corporation.  Under the terms of the Agreement, Taseko will acquire Sojitz’s 50% interest in Cariboo, and will then hold an effective 87.5% interest in the Gibraltar Mine.

The acquisition price consists of a minimum amount of C$60 million payable over a five-year period and potential contingent payments depending on Gibraltar mine revenues and copper prices over the next five years.  An initial C$10 million will be paid to Sojitz upon closing and the remaining minimum amount will be paid in C$10 million annual instalments over the next five years.

Stuart McDonald, President & CEO of Taseko, stated, “This is a logical and beneficial transaction for Taseko, providing immediate 17% growth in our attributable copper production and earnings from mine operations.  Gibraltar is a high-quality asset with a long mine life in an excellent jurisdiction.  The transaction is immediately accretive to Taseko and the deferred payment structure allows us to focus our financial capacity on the construction of the Florence Copper project which we expect to commence later this year.”

Mr. Osamu Matsuura, Executive Officer & COO of Sojitz Metals, Mineral Resources and Recycling Division, commented: “Sojitz has benefitted from its partnership with Taseko for more than a decade, and we continue to view the Gibraltar mine as a valuable long-life asset with a proven operating team.  This transaction is consistent with our Division’s strategy to transition towards metal recycling and other midstream processing businesses.”

Closing of the transaction is subject to customary conditions, including regulatory approvals, and is expected to occur in a timely manner.

Transaction Details

Taseko will acquire Sojitz’s 50% interest in Cariboo and become a party to the existing Cariboo shareholders agreement with Dowa Metals & Mining Co., Ltd (25%) and Furukawa Co. Ltd (25%). There will be no change to the offtake contracts established in 2010 and Dowa and Furukawa will continue to receive 30% of Gibraltar’s copper concentrate offtake. There will be no impact to operation of the Gibraltar Joint Venture.

Under the terms of the Agreement, the initial minimum payment of C$10 million is due on closing and the remaining minimum amounts are payable annually in C$10 million instalments over the next five years, for a total of C$60 million.  There is no interest payable on the minimum amounts.

The contingent payments are payable annually for five years only if the average LME copper price exceeds US$3.50 per pound in a year.  The payments will be calculated by multiplying Gibraltar mine copper revenues by a price factor, which is based on a sliding scale ranging from 0.38% at US$3.50 per pound copper to a maximum of 2.13% at US$5.00 per pound copper or above.  Total contingent payments cannot exceed C$57 million over the five-year period, limiting the acquisition cost to a maximum of C$117 million.