Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2025 and 2024

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Taseko Mines Limited (the "Company" or "Taseko") is a corporation governed by the British Columbia Business Corporations Act. The unaudited condensed consolidated interim financial statements of the Company as at and for the three months ended March 31, 2025, comprise the Company and its wholly-owned subsidiaries. The Company is principally engaged in the production and sale of metal concentrates, as well as related activities, including mine permitting and development, within the Province of British Columbia, Canada, and the State of Arizona, USA.

As a result of the Company's acquisition of Cariboo Copper Corporation ("Cariboo"), the financial results of the Company after March 25, 2024, reflect its 100% interest in Gibraltar mine ("Gibraltar") (Note 14). The financial results for the period up to and including March 25, 2024, reflect the Company's 87.5% interest in Gibraltar (Note 14).

2. MATERIAL ACCOUNTING POLICIES

2.1 Statement of Compliance

These unaudited condensed consolidated interim financial statements have been prepared in compliance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB") as applicable to the preparation of interim financial statements under IAS 34, Interim Financial Reporting.

These unaudited condensed consolidated interim financial statements were authorized for issuance by the Company's Audit and Risk Committee on May 1, 2025.

2.2 Use of Judgements and Estimates

The preparation of these unaudited condensed consolidated interim financial statements in conformity with IFRS Accounting Standards requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited annual consolidated financial statements as at and for the year ended December 31, 2024.

2.3 New Accounting Standards Issued but not yet Effective

In 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements. IFRS 18 introduces a new structure for the statement of profit or loss, requiring entities to present operating, investing, and financing categories, and enhances disclosures to improve comparability and transparency of financial performance. The standard is effective for annual reporting periods beginning on or after January 1, 2027, and is applied retrospectively. The Company is currently evaluating the impact of the amendments on its condensed interim consolidated financial statements.

2. MATERIAL ACCOUNTING POLICIES (CONTINUED)

2.3 New Accounting Standards Issued but not yet Effective (Continued)

The IASB also issued the 'Amendments to IFRS 9 and IFRS 7: Financial Instruments and Disclosures'. These amendments focus on financial instruments with ESG-linked features and introduce additional disclosure requirements to enhance transparency of related risks. The amendments are effective for periods beginning on or after January 1, 2026, and are applied retrospectively. The Company is currently evaluating the impact of the amendments on its condensed interim consolidated financial statements.

In addition, the IASB issued the 'Annual Improvements to IFRS Standards 2021-2023 Cycle', which includes amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10, and IAS 7, aimed at improving consistency and application. The amendments are effective for periods beginning on or after January 1, 2026, and are applied retrospectively. The Company is currently evaluating their impact on its condensed interim consolidated financial statements.

Site operating costs include personnel costs, operating waste stripping costs, repair and maintenance costs, consumables, operating supplies and external services.

For the three months ended March 31, 2024, changes in inventories of finished goods also included $13,354 in fair value adjustments to concentrate inventory held at March 25, 2024 that was sold between March 26 and March 31, 2024 (Note 12).

5. DERIVATIVES AND OTHER FAIR VALUE INSTRUMENTS

a) Derivatives and Other Fair Value Instruments - Summary

The following is a summary of the realized and unrealized derivative gain or loss incurred during the three months ended March 31, 2025 and 2024:

b) Derivatives and Other Fair Value Instruments - Copper Collars and Fuel Contracts

No new derivative transactions were entered into by the Company during the three months ended March 31, 2025. The following is a summary of the derivative transactions entered into by the Company during the three months ended March 31, 2024:

This management's discussion and analysis ("MD&A") is intended to help the reader understand Taseko Mines Limited ("Taseko", "we", "our" or the "Company"), our operations, financial performance, and current and future business environment.  This MD&A is intended to supplement and complement the consolidated financial statements and notes thereto, prepared in compliance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB") as applicable to the preparation of interim financial statements under IAS 34, Interim Financial Reporting, for the three months ended March 31, 2025 (the "Financial Statements").  You are encouraged to review the Financial Statements in conjunction with your review of this MD&A and the Company's other public filings, which are available on the Canadian Securities Administrators' website at www.sedarplus.com ("SEDAR+") and on the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system on the United States Securities and Exchange Commission's ("SEC") website at www.sec.gov.

This MD&A is prepared as of May 1, 2025.  All dollar figures stated herein are expressed in thousands of Canadian dollars ("$", "Cdn$"), unless otherwise indicated.  Included throughout this MD&A are references to non-GAAP performance measures, which are denoted with an asterisk.  An explanation of these non-GAAP measures and their calculations are provided on page 24.

Cautionary Statement on Forward-Looking Information

This discussion includes certain statements that may be deemed "forward-looking statements".  All statements in this discussion, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploration activities, and events or developments that the Company expects are forward-looking statements.  Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.  Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.  Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements.  All of the forward-looking statements made in this MD&A are qualified by these cautionary statements.  We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable law.  Further information concerning risks and uncertainties associated with these forward-looking statements and our business may be found in the Company's other public filings with the SEC and Canadian provincial securities regulatory authorities.

Table of Contents

Overview

Taseko is a copper-focused mining company that seeks to create long-term shareholder value by acquiring, developing and operating large tonnage mineral deposits in stable jurisdictions that are capable of supporting a mine for decades.  The Company's principal assets are the wholly owned Gibraltar mine ("Gibraltar"), located in central British Columbia ("BC") and is one of the largest copper mines in North America, and the Florence Copper project ("Florence" or "Florence Copper"), which is located in Arizona and is currently under construction.  Taseko also owns the Yellowhead copper, New Prosperity copper-gold, and Aley niobium projects in British Columbia.

On March 25, 2024, the Company completed its acquisition of the remaining 50% interest in Cariboo Copper Corp. ("Cariboo") from Dowa Metals & Mining Co., Ltd. ("Dowa") and Furukawa Co., Ltd. ("Furukawa") increasing its effective interest in Gibraltar from 87.5% to 100%.  As a result, the financial results reported in this MD&A reflect the Company's 87.5% effective interest for the period from March 15, 2023 to March 25, 2024 and 100% effective interest thereafter.  For more information on the Company's acquisition of Cariboo, refer to the Financial Statements-Note 12.

First Quarter Review

• Earnings from mining operations before depletion, amortization and non-recurring items* was $38.8 million, Adjusted EBITDA* was $34.4 million and cash flows from operations was $55.9 million;

• GAAP net loss was $28.6 million ($0.09 loss per share) and Adjusted net loss* was $6.9 million ($0.02 loss per share);

• Gibraltar produced 20.0 million pounds of copper at a total operating cost (C1)* of US$2.26 per pound of copper produced.  Copper head grade was 0.19% and recovery was 68% for the quarter reflecting the milling of lower grade stockpiled material which contained more oxidized material;

• Gibraltar sold 21.8 million pounds of copper and 364 thousand pounds of molybdenum. The average realized copper price of US$4.24 per pound and Canadian dollar to US dollar exchange rate of 1.43, contributed to revenues of $139.1 million for the period;

• Construction of the Florence Copper commercial production facility is advancing on schedule and on budget, and was approximately 78% complete at March 31, 2025.  A total of 29 production wells were constructed in the quarter bringing the total number of completed wells to 80 of the 90 planned to be drilled during the construction phase.  Wellfield drilling activities are ramping down in April and will be completed on schedule in May.  The solvent extraction and electrowinning areas continue to advance with a focus on pipe and settler welding and electrical installation.  First copper cathode production is expected in the fourth quarter of 2025;

• The Company completed share issuances under its at-the-market ("ATM") equity offering prospectus, issuing 10.6 million common shares for gross proceeds of $31.0 million (US$21.5 million) in the first quarter;

• The Company has copper collar contracts to secure a minimum copper price of US$4.00 per pound for 81 million pounds of copper for the remainder of 2025; and

• At March 31, 2025, the Company had a cash balance of $121 million and available liquidity of $279 million including its undrawn corporate revolving credit facility.

Operations Analysis

First Quarter Review

In the first quarter, mining activity at Gibraltar was focused on waste stripping for a new pushback in the Connector pit, which resulted in a higher than normal strip ratio and lower mined ore in the period.  Lower grade stockpiled ore was the primary source of mill feed, resulting in lower copper production compared to recent quarters.

Gibraltar produced 20.0 million pounds of copper in the first quarter and copper head grade was 0.19%, well below average reserve grade.  Copper recovery was 68% and was notably impacted by oxidation in the stockpiled ore which mainly originated from the upper benches of the Connector pit.  Mill throughput was 7.9 million tons in the quarter, above nameplate capacity due to the lower work index ore in the Connector pit.

A total of 23.2 million tons were mined in the first quarter comparable to recent quarters.  The average strip ratio was 4.6, as a total of 4.2 million tons of ore were mined. This includes 2.2 million tons of oxide ore that was added to the heap leach pads as plans for restart of the solvent extraction and electrowinning ("SX/EW") plant continue in Q2 2025.

Capitalized stripping totaling $38.1 million was higher in the first quarter attributed to greater mining of waste tons above the average strip ratio for the Connector pit.  Total site costs* including capitalized stripping was $107.0 million in the quarter consistent with the comparative prior year quarter.  Decreased consumption of mining inputs such as diesel and explosives due to processing of stockpile material as well as lower diesel prices were offset by higher milling costs.

Molybdenum production was 336 thousand pounds in the first quarter compared to 247 thousand pounds in the comparative prior year quarter.  Higher molybdenum grades, on average, are expected in Connector pit ore.  Grades will improve as stockpile ore feed decreases.  At an average molybdenum price of US$20.53 per pound for the quarter, molybdenum contributed a meaningful by-product credit of US$0.33 per pound of copper produced.

Off-property costs were US$0.18 per pound of copper produced.  These lower costs reflect Gibraltar's 2025 offtake agreements with very favorable treatment and refining charges ("TCRC").  On a blended basis, TCRCs are effectively nil for this year.

Total operating cost (C1)* was US$2.26 per pound of copper produced in the first quarter compared to US$2.46 in the comparative prior year quarter.  Higher capitalized stripping costs, improved  molybdenum by-product credits, and lower off property costs all contributed to driving down total operating cost (C1), partially offset by the effect of lower copper production as shown in the bridge graph below:

Gibraltar Outlook

Mining activities are now focused in the Connector pit, which will be the source of mill feed in 2025 and the years ahead.  Copper production in the first quarter was approximately 10% below expectations, due to low recoveries from oxidized ore.  In addition, mining rates in the upper benches of Connector pit have been behind plan due to challenging ground conditions resulting in lower equipment productivities.  As a result, access to higher quality ore has been delayed from the second quarter to the third quarter, and annual copper production for 2025 is expected to be approximately 10 million pounds below the previous guidance of 120 to 130 million pounds.  Significant increases in head grades and recoveries are expected in the second half of 2025 and continuing into 2026.

Increased mill availability and higher throughput is also expected this year, as major maintenance projects were completed in both mills last year.  Refurbishment of the Gibraltar SX/EW plant, which has been idle since 2015, is nearing completion, with first cathode production expected in the second quarter, supplementing Gibraltar copper concentrate production. 

Molybdenum production is forecast to increase in 2025 as molybdenum grades are expected to be notably higher as more Connector pit ore is processed, also weighted to the second half of the year.

The Company has offtake agreements covering Gibraltar concentrate production in 2025 and 2026, which contain significantly lower, and in certain cases negative (premium), TCRC rates reflecting the tightening copper smelting market.  In 2024, TCRCs accounted for approximately US$0.09 per pound of off-property costs, and, with the new offtake agreements, the Company expects average TCRCs to reduce to nil in 2025 and 2026.

Potential US import tariffs are not expected to have a material impact on sales at Gibraltar as the mine produces copper and molybdenum concentrates that are sold to international metal traders and delivered to Asian markets.  Offtake agreements are in place for substantially all of Gibraltar's copper concentrate production in 2025 and 2026, and no changes to these sales channels are expected during this period. 

The Company has a prudent hedging program in place to protect a minimum copper price and Gibraltar cash flow during the Florence Copper construction period.  Currently, the Company has copper collar contracts in place that secure a minimum copper price of US$4.00 per pound for 81 million pounds of copper production for the remainder of 2025 (refer to "Financial Condition Review-Hedging Strategy" for details).

Florence Copper

The Company has all key permits in place for the commercial production facility at Florence and construction of the Florence Copper commercial production facility continues to advance on schedule.  Approximately 670,000 project hours have been worked with no reportable injuries or environmental incidents.  The Company has a fixed-price contract with the general contractor for construction of the SX/EW plant and associated surface infrastructure.

A total of 80 production wells out of a total of 90 new wells to be drilled during the construction phase have been completed as of March 31, 2025.  Process ponds and surface water runoff pond construction are complete, and installation of high-density polyethylene piping in the main pipeline corridor continued.  Mechanical and piping installations throughout the SX/EW plant and electrical work continue to advance.  Assembly of the modular office and dry buildings were also completed, and work on the exterior finishing has started.

Site activities are focused on hiring additional personnel and other initiatives to support operational readiness and the ramp up of production.

Florence Copper commercial facility construction costs were US$51.4 million in the first quarter and, since the beginning of construction, US$206.3 million has been incurred on the Florence Copper commercial facility as of March 31, 2025.

In January 2025, the Company received its final US$10 million instalment from its US$50 million copper stream with Mitsui & Co. (U.S.A.) Inc. ("Mitsui").  The remaining Florence Copper commercial production facility construction costs are expected to be funded from the Company's available liquidity and cash flows from Gibraltar.

The Company has a technical report titled "NI 43-101 Technical Report Florence Copper Project, Pinal County, Arizona" dated March 30, 2023 (the "Florence 2023 Technical Report") on SEDAR+.  The Florence 2023 Technical Report was prepared in accordance with National Instrument 43-101 ("NI 43-101") and incorporated the results of test work from the production test facility ("PTF") as well as updated capital and operating costs (Q3 2022 basis) for the commercial production facility.

Project highlights based on the Florence 2023 Technical Report are detailed below:

• Net present value of US$930 million (at US$3.75 copper price, 8% after-tax discount rate);

• After-tax internal rate of return of 47%;

• Payback period of 2.6 years;

• Operating costs (C1) of US$1.11 per pound of copper produced;

• Annual production capacity of 85 million pounds of LME grade A copper cathode;

• Mine life of 22 years;

• Total life of mine production of 1.5 billion pounds of copper; and

• Initial capital cost of US$232 million (Q3 2022 basis).

Based on the Florence 2023 Technical Report, the estimated construction costs for the Florence Copper commercial production facility were US$232 million and management expects that total construction costs will be within a range of 10% to 15% higher than this estimate.  Florence Copper remains on track for first copper cathode production in Q4 2025.

Long-term Growth Strategy

Taseko's strategy has been to grow the company by acquiring and developing a pipeline of projects focused on copper in North America.  We continue to believe this will generate long-term returns for shareholders.  Our other development projects are located in BC, Canada.

Yellowhead copper project

The Yellowhead copper project ("Yellowhead") is expected to produce 4.4 billion pounds of copper over a 25-year mine life.  During the first 5 years of operation, Yellowhead is expected to produce an average of 200 million pounds of copper per year.  Yellowhead also contains valuable precious metal by-products with 440,000 ounces of gold production and 19 million ounces of silver production over the life of mine. The Yellowhead project is subject of technical report published in January 2020.

Taseko plans to publish an updated technical report on Yellowhead in 2025 using updated long-term metal price assumptions, updated project costing, and incorporating the new Canadian tax credits available for copper mine development.

The Company is ready to enter the environmental assessment ("EA") process and plans to submit an Initial Project Description to formally commence the EA process with regulators in Q2 2025.  The Company is focusing discussions with regulators on developing a streamlined permitting process.  Taseko also opened a Yellowhead project office in 2024 to support ongoing engagement with local communities including First Nations.

New Prosperity copper-gold project

In late 2019, the Tŝilhqot'in Nation, as represented by the Tŝilhqot'in National Government, and Taseko entered into a confidential dialogue, with the involvement of the Province of BC, seeking a long-term resolution to the conflict regarding Taseko's proposed copper-gold mine previously known as New Prosperity, acknowledging Taseko's commercial interests and the Tŝilhqot'in Nation's opposition to the project.

This dialogue has been supported by the parties' agreement, beginning December 2019, to a series of standstill agreements on certain outstanding litigation and regulatory matters relating to Taseko's tenures and the area in the vicinity of Teẑtan Biny (Fish Lake).

This dialogue process has made meaningful progress in recent months and is close to completion.  The Tŝilhqot'in Nation and Taseko acknowledge the constructive nature of discussions, and the opportunity to conclude a long-term and mutually acceptable resolution of the conflict that also makes an important contribution to the goals of reconciliation in Canada.

Aley niobium project

The converter pilot test is ongoing to provide additional process data to support the design of commercial process facilities, and final product samples to support product marketing initiatives.  The Company has also initiated a scoping study to investigate the potential for Aley niobium oxide production to supply the growing market for niobium-based batteries.

Market Review

Copper	Molybdenum	Canadian/US Dollar Exchange

1 Commodity prices in US dollars per pound.

2 Sources: London Metal Exchange for copper prices, Platts Metals for molybdenum prices, Bank of Canada for Canadian dollar/US dollar exchange rates.

Copper prices are currently around US$4.17 per pound compared to US$4.39 per pound at March 31, 2025 and the first quarter average copper price of US$4.24 per pound.  Since the beginning of April, copper prices have  experienced significant volatility influenced by trade uncertainty and the threat of an escalating global trade war, particularly between China and the US. China produces approximately 50% of the global refined copper and the US imports approximately 50% of its copper.  The US copper market had seen significant stockpiling during the beginning of the year, with a significant premium on the COMEX price compared to the LME price, in response to threatened US tariffs on copper imports.

Recent US import tariffs are not expected to have a material impact on sales at Gibraltar as the mine produces copper and molybdenum concentrates that are sold to international metal traders and delivered to Asian markets.  Offtake agreements are in place for substantially all of Gibraltar's copper concentrate production in 2025 and 2026, and no changes to these sales channels are expected during this period.  Cathode produced by Gibraltar's SX/EW plant will generally be shipped overseas if a tariff between US and Canada is prohibitive.  The Company does not expect any material impact on Gibraltar operating costs as a result of the new tariffs.  Production at Florence is expected to remain in the US for domestic consumption.

Longer-term demand for copper is expected to remain strong driven by electrification, renewable energy transition, artificial intelligence and overall industrial activity while tight supply conditions are expected to continue due to few available sources of new primary copper supply.  These factors continue to provide unprecedented catalysts and support a higher copper price in the longer term as new mine supply lags behind growth in copper demand.

Smelter treatment and refining charges remain historically low, including spot rates at negative (premium) rates, driven by an increase in global copper smelting capacity and disruptions in the supply of copper concentrates.  Potential shortages of copper metal could continue, which could lead to higher copper prices further into 2025.

Approximately 8% of the Company's revenue is made up of molybdenum sales and Connector pit ore is expected to provide higher molybdenum grades in the coming years.  Molybdenum prices are currently around US$20.10 per pound compared to US$19.95 per pound at March 31, 2025 and the first quarter average molybdenum price of US$20.53 per pound.  The Company's sales agreements specify molybdenum pricing based on published Platts Metals reports.

The Company's sales contracts are priced in US dollars while a majority of Gibraltar's costs are Canadian dollar denominated, and, therefore, fluctuations in the Canadian dollar/US dollar exchange rate can have a significant effect on the Company's financial results.

1 The $15.0 million gain on acquisition of control of Gibraltar in Q1 2024 relates to the measurement at fair value of Taseko’s 87.5% interest in Gibraltar finished copper concentrate inventory held at the date of acquisition of control of Gibraltar (March 25, 2024) as a result of the Company’s acquisition of Cariboo.  These gains have been eliminated from Adjusted net income (loss) in the period of the acquisition transaction and added back in the period the inventory was sold.

2 Q1 2024 cost of sales included $13.4 million of fair value adjustments to Gibraltar finished copper concentrate inventory held at the date of acquisition of Cariboo that was subsequently sold and realized between March 26 and March 31, 2024.  This realized portion of the gain has been included in Adjusted net (loss) income.

Adjusted net loss was $6.9 million ($0.02 loss per share) in the first quarter compared to Adjusted net income of $7.7 million ($0.03 earnings per share) in the comparative prior year quarter.  The decrease in Adjusted earnings of $14.7 million was primarily due to lower sales volumes and production from the processing of lower quality stockpile material as Gibraltar engages in a pushback in the Connector pit to access the next ore zone.  The decrease in copper production and sales was partially offset by a stronger copper price environment and a stronger US dollar compared to the comparative prior year quarter.

Cost of sales in the first quarter was consistent with the comparative prior year quarter on a total dollar basis but reflects the higher cost of stockpile material on a per pound basis due to lower sales volumes in the quarter.  Mining costs generally decreased due to shorter haul distances in Connector and lower diesel prices as ore release was more focused in the Gibraltar pit in the first part of the prior year but were offset by increased milling costs arising from higher throughput.

Net loss was $28.6 million ($0.09 loss per share) in the first quarter after factoring in unrealized losses on derivatives primarily due to the increasing copper price trend in the quarter and its effect on the fair value of outstanding copper hedges covering production for the remainder of 2025.  Net income was $18.9 million ($0.07 earnings per share) in the comparative prior year quarter which benefited from gains recorded on the acquisition of Cariboo from Dowa and Furukawa.

No adjustments were made to Adjusted net (loss) income for price adjustments on settlement during the period.

1 Q1 2024 results reflect the Company’s 87.5% effective interest in Gibraltar for the period from January 1 to March 24, 2024 and 100% effective interest for the period from March 25 to March 31, 2024.

2 Sales of copper in concentrate includes a net smelter payable deduction of approximately 3.5% to derive net payable pounds of copper sold. 

Copper revenues were $127.7 million in the first quarter compared to $143.9 million in the comparative prior year quarter.  Copper revenues decreased overall by $16.2 million due to 6.5 million fewer pounds being sold resulting in a negative volume variance of $34.4 million, partially offset by a favorable price variance of $10.3 million due to higher realized copper prices of US$0.35 per pound in the current quarter and a favorable foreign exchange variance of $7.9 million due to the strength of the US dollar against the Canadian dollar in the quarter.

Molybdenum revenues were $9.7 million in the first quarter compared to $6.6 million in the comparative prior year quarter.  The increase in molybdenum revenues of $3.0 million was primarily driven by increased sales volume and the impact of Taseko's increased effective interest in Gibraltar.

The Company also benefitted from payable gold for the first time as one of its concentrate offtake agreements paid for gold contained in the Gibraltar concentrate.

Treatment and refining costs decreased by $4.9 million to $0.4 million in the first quarter (Q1 2024 - $5.3 million) reflecting the lower TCRC rates realized under the Company's 2025 favorable offtake agreement terms.

1 Q1 2024 results reflect the Company’s 87.5% effective interest in Gibraltar for the period from January 1 to March 24, 2024 and 100% effective interest for the period from March 25 to March 31, 2024.

Site operating costs decreased by $10.8 million to $68.9 million in the first quarter (Q1 2024 - $79.7 million) primarily driven by increased capitalized stripping costs related to the current pushback in the Connector pit.  Site operating costs also benefited from lower input prices such as diesel and lower consumption of key mining consumables including diesel as the first part of 2024 mine operations involved longer haul distances from the bottom of the Gibraltar pit.  Lower mining costs in the current quarter were partially offset by higher milling costs due to higher throughput and additional costs incurred to process the lower quality stockpile material.

Transportation costs decreased by $4.2 million to $6.0 million in the first quarter (Q1 2024 - $10.2 million) reflecting the lower sales volume during the quarter.

Cost of sales is also impacted by changes in finished goods and stockpile inventories.  Stockpiled ore material was used to supplement mined ore in the first quarter depleting 5.5 million tons of sulphide ore stockpiles and contributing to an increase in production costs of $28.3 million during the quarter.  Copper finished goods inventories decreased by 1.8 million pounds due to shipment timing and contributed to an increase in cost of sales of $2.7 million in the first quarter.  Oxide ore stockpiles increased by 2.2 million tons as Gibraltar continues to mine through the oxide ore layer in the Connector pit and add material to the heap leach pads.  This contributed to a decrease in production costs of $5.5 million in the quarter.

In the comparative prior year quarter, cost of sales included $13.4 million of fair value adjustments related to the sale of concentrate inventory held at the date of acquisition of control of Gibraltar (March 25, 2024) arising from the Company's acquisition of Cariboo.

Depletion and amortization increased by $7.4 million to $22.4 million in the first quarter (Q1 2024 - $15.0 million) for depreciation included stockpile inventory costs that were processed during the quarter.

1 The $15.0 million gain on acquisition of control of Gibraltar in Q1 2024 relates to the write-up to fair value for Taseko’s 87.5% interest in Gibraltar finished copper concentrate inventory held at the date of acquisition of control of Gibraltar (March 25, 2024) as a result of the Company’s acquisition of Cariboo.

General and administrative expenses of $3.3 million in the first quarter were consistent with costs incurred in the comparative prior year quarter.

Share-based compensation expenses is comprised of the expense associated with share options and performance share units, and fair value adjustments on deferred share units and restricted share units.  Share-based compensation expenses decreased by $0.4 million to $5.0 million in the first quarter (Q1 2024 - $5.4 million) primarily due to the decrease in the Company's share price and its impact on the valuation of deferred and restricted share units.  For more information, refer to the Financial Statements-Note 18.

Realized loss on derivative instruments was $1.6 million in the first quarter consistent with $1.7 million in the comparative prior year quarter and pertains to the amortization of premiums paid for copper collars and fuel calls held by the Company as part of the Company's hedging strategy.  Unrealized loss on derivative instruments was $21.6 million in the quarter compared to $0.9 million in the comparative prior year quarter and relates to the change in fair value on the Company's outstanding copper collars and fuel call options reflecting the increasing copper price trend during the current quarter.

Unrealized loss on Florence copper stream derivative was $5.3 million in the first quarter compared to $2.6 million in the comparative prior year quarter and reflects upward changes in forward copper prices and discount rates applied over the Florence copper stream term.

Unrealized gain on Cariboo contingent performance payment was $3.3 million in the first quarter and reflects changes in forecast copper prices and Gibraltar revenues over the Sojitz earn-out period.

Project evaluation expense represent costs associated with the New Prosperity project and other technical expenditures undertaken by Taseko's engineering and technical teams on various project initiatives.

On March 25, 2024, the Company completed its acquisition of the remaining 50% of Cariboo from Dowa and Furukawa and increased its effective interest in Gibraltar from 87.5% to 100%.  The Company recognized a gain on acquisition of Cariboo of $47.4 million representing the difference between the estimated fair value of net assets acquired and the estimated fair value of total consideration payable.  The acquisition also gave the Company full control over Gibraltar resulting in the remeasurement of its previously held 87.5% interest in Gibraltar according to IFRS accounting standards.  The Company recognized a gain on acquisition of control of Gibraltar of $15.0 million representing the fair value adjustment on finished copper concentrate inventory held at the date of acquisition to fair value.  Further details on the Cariboo acquisition can be found in the Financial Statements-Note 12b.

Net finance expenses were $10.9 million in the first quarter compared to $11.7 million in the prior year quarter.  Interest expense increased by $2.5 million to $17.3 million in the quarter (Q1 2024 - $14.8 million), primarily driven by the impact of the higher principal and coupon of the 8.25% senior secured notes due May 2030 that were issued in April 2024 being captured in the current quarter and not the comparative prior year quarter.  Capitalized interest attributable to the funding of Florence Copper development costs increased by $3.0 million to $5.8 million in the quarter (Q1 2024 - $2.7 million) proportionate with the increased spending for the construction of the Florence Copper commercial production facility.

Accretion expenses decreased by $0.4 million to $6.7 million in the first quarter (Q1 2024 - $7.0 million) primarily due to the decreases in accretion on Cariboo consideration payable and the Florence royalty obligation reflecting lower forecast copper prices over the terms of the obligations, offset by increases in accretion on deferred revenue reflecting higher silver ounces delivered under the Osisko silver stream in the current quarter.

A reconciliation of the effective tax rate is presented below:

The effective tax rate for the first quarter was 22% compared to 55% in the comparative prior year quarter.  The effective tax rate for the quarter is lower than the combined BC mineral tax rate and the federal statutory income tax rate of 36.5% primarily due to $23.5 million in unrealized losses on derivatives and fair value adjustments that are not deductible for BC mineral tax purposes.

Current income tax expense represents estimated BC mineral tax payable for the period.

1 Excludes current portion of long-term debt.

The Company's asset base is principally comprised of property, plant and equipment reflecting the capital-intensive nature of its large scale, open pit mining operation at Gibraltar and construction of the commercial facility at Florence.  Other current assets primarily include accounts receivable, inventories (concentrate inventories, ore stockpiles and supplies), prepaid expenses, and marketable securities.  Concentrate inventories, accounts receivable and cash balances can fluctuate due to the timing of sales and cash settlements.

Property, plant and equipment increased $131.2 million in the first quarter, which includes Florence Copper construction costs of $83.2 million (capital project costs of $75.5 million and site costs of $7.7 million) and Gibraltar capital expenditures of $58.1 million (capitalized stripping costs of $44.0 million and other capital expenditures of $14.1 million).

Net debt increased $48.1 million in the first quarter, primarily due to decreases in cash and equivalents as the Company continues its funding of construction of the Florence Copper commercial facility and the effect of a stronger US dollar and the foreign exchange impact on US dollar-denominated borrowings, offset by repayments of the Company's equipment financings during the quarter.

Cariboo consideration payable relates to earn-out payments on the acquisition of Cariboo.  Cariboo consideration payable decreased by $12.2 million primarily due to payments made to Sojitz of $10.0 million in the first quarter.

Deferred revenue relates to the advance payments received from Osisko for the delivery of future silver production from Gibraltar and customer advance payments on copper concentrate.

Other liabilities increased by $14.7 million in the first quarter primarily due to the receipt of the final US$10.0 million instalment on the Mitsui copper stream.

At May 1, 2025, there were 315,875,348 common shares and 11,161,200 stock options outstanding.  More information on these instruments and the terms of their exercise can be found in the Financial Statements-Notes 17 and 18.

Liquidity, cash flow and capital resources

At March 31, 2025, the Company had cash and equivalents of $120.8 million (December 31, 2024 - $172.7 million) and available liquidity of $279.0 million (December 31, 2024 - $331.0 million).

Cash flows provided by operations were $55.9 million in the first quarter compared to $59.6 million in the comparative prior year quarter.  Operating margins from Gibraltar decreased in the quarter as a result of lower sales volumes but operating cash flows benefited from the release of stockpile inventories in the quarter, the costs for which were incurred in prior periods.

Cash flows used for investing activities were $130.9 million in the first quarter compared to $46.7 million in the comparative prior year quarter.  Investing activities include $51.7 million for capital expenditures at Gibraltar (capitalized stripping of $38.1 million and sustaining capital expenditures of $13.6 million) and $80.0 million for capital expenditures at Florence Copper including $7.7 million in site costs.

Cash flows provided by financing activities were $21.5 million in the first quarter compared to $48.5 million in the comparative prior year quarter.  Financing activities include $29.6 million (US$21.1 million) in net proceeds from shares issued under the Company's ATM equity offering prospectus and $14.4 million (US$10 million) from the final instalment of the US$50 million Mitsui copper stream offset by $10.2 million in debt repayments and $3.0 million in interest payments and $10.0 million payment to Sojitz related to the acquisition of Cariboo.

Liquidity outlook

At March 31, 2025, the Company had approximately $279.0 million (December 31, 2024 - $331.0 million) of available liquidity including $120.8 million in cash and equivalents and US$110 million undrawn capacity on its Credit Facility.  The Company drew US$25 million from its Credit Facility in April.

In the first quarter, the Company completed its ATM offering and issued 10.6 million common shares for gross proceeds of $31.0 million (or US$21.5 million).  The Company also received the final US$10 million instalment on the US$50 million Mitsui copper stream.

The Company expects to return to life of mine average copper production of 120 to 130 million pounds after the current pushback in the Connector pit is completed.  The Company initiated a pushback and stripping campaign in the Connector pit in the first quarter, which is expected to continue through the second quarter.  During this period, lower quality ore stockpiles are being used to supplement mined ore and as such 2025 production will be weighted heavily towards the second half of the year.  Molybdenum production is also expected to increase due to higher expected molybdenum grades in Connector pit ore.