Taseko Mines Ltd T.TKO

RE:RE:RE:RE:Building Florence

[JCSunsfan]

JoeStockIQ wrote:

JCSunsfan wrote:

JoeStockIQ wrote:

JCSunsfan wrote: Ok.  There is an elephant in the room we have not discussed.  I live in Arizona.  Construction costs are soaring.  I am trying to build a custom home right now and costs are running 75-100% more than they were three years ago.

CAPEX for Florence is soaring as the EPA dithers.  For Taseko to claim that the CAPEX is not substantionally more than the $230 million planned two years ago is just plain not reality.  Construction is taking much longer as well.

$4.50 copper @ 100M solves that issue for the most part. Has inflation hit well drillers? Other than higher energy, shouldn't get too out of hand. Using a $2.35 US All In cost at Gibraltar and $4.35 copper is going to generate roughly $200M, give or take. Heck, lop of another 10% and call it $180M. Say Capex rises to $260-$270M. They'll be fine. 

You really need to consider a CAPEX in the range of $350 million. I think they can still get it built, but it will take more financing. 

Going from $230M to $350M would obviously indicate a whopping 50%+ inflationary impact. That's going way overboard JC, don't you think? They already purchased the necessary modules for the processing plant, have already spent significant funds on engineering and have all the needed blueprints from the test facility to have a sufficient model of what to expect moving forward. Major costs will obviously come from drilling the wells and everything else that comes with regular construction. Building a custom home is quite different from building a well field and supporting infrastructure as custom home builders really have the consumer over the proverbial barrel. Taseko management also has a pretty good track record of keeping costs at bay. Look, not saying you don't have a legitimate concern and inflation obviously is in the mix. But 50%? Not buying that scale in this scenario. We'll have to respectfully agree to disagree. That said, wouldn't be surprised if they end up going 10-15% over, say to 265M or thereabouts. They can handle this from Gib funds. Not to mention every Q delay due to the EPA gets them additional funds from operations. Either way, it's an excellent topic for the next few Quarterly conferences calls. 

Man.  I live here.  I am trying to build right now.  I would be thrilled if the bids were coming in at just 50% over two years ago.  I don't know where you live but this is reality.