Sojitz considers Gibraltar exit over B.C. mine risks

Canada's Taseko Mines (TSX: TKO; NYSE: TGB) says it's negotiating to buy out minority partner Sojitz in the vast Gibraltar copper mine in British Columbia after the Japanese company noted operating risks and declining grades.

Confidential discussions are focusing on Taseko's acquisition of Sojitz's 12.5% interest in the mine located about 580 km north of Vancouver. Sojitz invested its stake in 2010.

Taseko controls 75% cent of the joint venture that operates Gibraltar, while Cariboo Copper holds the rest. Sojitz owns half of Cariboo.

The Vancouver-based miner said the prospective agreement contemplates a "modest" upfront payment and additional annual payments over a five-year period, dependent on Gibraltar's copper revenues.

Definitive agreements haven't been finalized and a transaction remains subject to various board, regulatory and other approvals, Taseko said.

Sojitz said on Thursday the main reasons for considering selling its interest in the B.C. mine were unstable operations, declining grades and increased risk of environmental liabilities.

Taseko's other Japanese partners, Furukawa and DOWA Holdings, which each hold a 6.25% stake in Gibraltar, separately said they had made no decisions on the future of their stakes.

The Canadian copper mine last year churned out 97 million lb. of copper, down 14% from the 112.3 million lb. it mined in 2021.

Production in December was impacted by unplanned mill downtime, including a site-wide power outage late in the month.

Taseko shares rose by just over 4% in Toronto on Friday, reaching $2.28 by early afternoon, in a 52-week window of $1.15 and $3, giving it a market capitalization of $653 million.