Good day ladies and gentlemen, and welcome to Taseko Mines Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to hand the conference over to Mr. Brian Bergot from Investor Relations. Sir, you may begin.

Thank you, Dave. Good morning ladies and gentlemen, and welcome to Taseko Mines Second Quarter 2012 Results Conference Call. My name is Brian Bergot and I am the Director of Investor Relations for Taseko. With me today in Vancouver is Russ Hallbauer, President and CEO, Taseko; John McManus, Senior Vice President, Operations; and Peter Mitchell, Taseko’s Chief Financial Officer. After opening remarks by management, which will review the second quarter business and operational results, we will open the phone lines to our analysts and investors for question and answer session. The Company and management’s discussion today will be presentation slides for our webcast participants. Alternatively the presentation can be found on the homepage of our website. Before we get started, I would like to remind our listeners that our comments and answers to your questions may 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. Please refer to the bottom of our latest news release for more information. I would now turn the call over to Russ for his remarks.

Thank you, Brian. Good morning everyone. Thank you for joining us today to discuss our second quarter results as well as the ongoing status of the Company’s business activities. Continuing with the formula that we developed for this call last quarter as Brian indicated, we have a slide presentation to help you understand as best as possible where we are technically with our ongoing operations at Gibraltar. Gross profit from our mining operations came in at CAD16 million for the quarter, generating CAD0.02 per share in earnings. Peter will speak in greater detail during his overview about particulars of our financial results in that regard. Our operating metrics, we are pleased with in terms of where we found ourselves three to four months ago with the mine operating issues. We worked our way through those and are certainly in a better position understanding what went wrong that affected our mine throughput so dramatically and certainly the fact that we have produced over 9 million pounds in July indicates we’re back on track. If you have our slide presentation in front of you, I would like to walkthrough some of the highlights for you. As discussed last quarter, the SAG Mill Throughput graph, slide one, indicates in a chronological manner how we performed over the last year. Ups and downs heading towards our ultimate goal and targets of achieving 2,450 tons per operating hour. Effectively if we look at the last year, we have cycled through a whole pit development sequence over the year and you can easily see encountering and dealing with various ore types, their hardness, how they react in the recovery circuit and how they ultimately are dealt with in our concentrator in terms of throughput has been challenging. But for every down, there has been an up…

Thanks Russ. Revenue for the second quarter was CAD74.4 million, a 54% increase over the second quarter of last year of CAD48.4 million. And that’s the result of increased volumes, offset by reduced copper unit prices relative to the 2011 period. Finished goods inventory was reduced to CAD5 million as a result of clearing out our concentrate inventory at quarter end. Gross profit was CAD16 million for the second quarter as a result of higher production costs, lower selling prices and the cost of sales adjustment related to the inventory reduction from the end of the prior quarter. G&A costs were CAD4 million compared to CAD4.9 million last year and that’s the result of lower stock-based compensation costs this year. As Russ talked about, our two projects new Prosperity and Aley, our spending on those two projects in the second quarter was CAD4.9 million and all of those costs continued to be expensed. Other operating income of CAD0.8 million includes an unrealized gain from our hedge mark-to-market, partially offset by an unrealized loss on the hedge position. The unrealized component is subject to quarterly fluctuations and doesn’t affect cash position. Finance expense at CAD3.9 million includes bond interest and accretion on our provision for environment rehab. We’re capitalizing a portion of the bond interest because it was raised for the construction of GDP3. Income tax expense for the quarter of CAD3.6 million, reflects an effective tax rate of 52% and the net earnings for the quarter were CAD3.3 million or CAD0.02 per share. Adjusted earnings for the usual things, unrealized losses, foreign currency translation and other gains, losses yields adjusted earnings of CAD4 million for the second quarter and adjusted earnings of CAD0.02 per share versus CAD0.01 last year. Cash and networking capital were CAD246 million and CAD259.5 million respectively…

Thank you. (Operator Instructions) Our first question comes from Orest Wowkodaw from Canaccord. Orest Wowkodaw – Canaccord: Hi, good morning. Couple of questions for me, obviously a very good grade in the second quarter, 0.33% copper. Do you expect that to continue into Q3 and Q4? And can you tell us what the grade was for that 9 million pounds produced in July?

Hi Orest, this is John here. That grade in the second quarter was actually 0.32%. Now, it is at 0.31% ore body. And it varies by 5% or 10%. Orest Wowkodaw – Canaccord: John, if I could stop you there, I can’t here you very well. I don’t know, if it’s possible to get close to the phone.

Sorry Orest, I’ll try again. Orest Wowkodaw – Canaccord: That’s better.

We got the 0.32% grade for the second quarter. Gibraltar is 0.31% ore body. It varies on 5% to 10% as you move through the ore body so that wasn’t unusual grade. And for the July grade, we actually had 0.34% so again not really particularly unusual, better than average, but not super high or anything like that. Orest Wowkodaw – Canaccord: And how do you see that playing out for the rest of the year in terms of grade percentages [ph]?

It’s a 0.31% ore body, so first half of the year – first quarter we’re bang on that, second half of the year we’ll probably average 0.31% – we’ve got next month or so is decent grade and then it drops back to about 0.30% [ph]. Orest Wowkodaw – Canaccord: Okay. And then the strip ratio was very high by historic standards in the quarter at 3.4. How do you see that playing over the rest of the year?

Well part of what we’re doing there Orest, is we’re preparing for GDP3. Orest Wowkodaw – Canaccord: Okay.

So we’re getting more ore faces opened up, so that’s actually going to affect our costs through the last half of this year too as we up our strip ratio. Orest Wowkodaw – Canaccord: Okay.

When that mill comes on, we want to be able to make sure that we’re feeding it 85,000 tons. Orest Wowkodaw – Canaccord: Okay. So that should continue then through the back half of the year and then we should see unit costs remain relatively high as well. Is that correct?

Yes, they are going to be similar to what you’re seeing now. I mean we’re still working on a lot of things to bring our unit costs down. We get our copper production up, that will help but we are going to be stripping more than the deposit average for the last half year. Orest Wowkodaw – Canaccord: Okay. And I think during the last conference call, Russ had given kind of unofficial guidance, production guidance for 2013 of a 160 million pounds for Gibraltar. Do you still think that’s a realistic target given kind of where we are today?

Absolutely. Orest Wowkodaw – Canaccord: Okay. And am I correct based on your language around the hedging for the first half of 2013 that you’re guiding for, I think my mount is right here, at least I am hoping it is, basically 74 million pounds of production in the first half of the year on a 100% basis?

We really, I mean if you do the 2,500 metric ton from mine Orest [ph], divide with that, that is the number that you come out with. But yes, I see candidly be derived more from what our expected costs are and what kind of revenue we need to generate to cover our share of costs. So that already used John and Russ’s overall guidance then that’s exactly where we hedged and I’d say an analogy for that [ph]. Orest Wowkodaw – Canaccord: Okay. And just a final question for me. You previously guided to around CAD30 million of exploration expenses mostly related to Aley. We’re not really seeing that come through the statements as of the end of Q2. Should we expect then all that to come in the second half of the year or is that been somehow capitalized or deferred?

Nothing is capitalized, it’s all being expensed and we’re tracking to that number. There is a time lag associated with invoicing things.

Well it’s also – where Aley is, right now is the time that we could get in the field. Orest Wowkodaw – Canaccord: Okay.

So and then the analysis happens in the fourth quarter. The Prosperity, a lot of that expense is going into the environment assessment panel. Orest Wowkodaw – Canaccord: Okay. So that we should be anticipating something around CAD20 million of exploration then in the back half of the year?

Yes.

I think we’re CAD10 million [ph] now.

Yes. Orest Wowkodaw – Canaccord: Okay, thank you very much.

Thanks Orest.

Thank you. Our next question comes from Mark Turner from Scotiabank. Mark Turner – Scotiabank: Yes, good morning gentlemen. Thanks for taking my call. Few questions here, first on the throughput that we’re, I guess currently seeing in July under GDP2 and sort of maybe some of the costs associated with that. I was hoping you could give us a sense of some of the additional costs if there is any in terms of generating extra fines in the muck, and then just relating that to when you get the new grates in the mill with the 30 ports that are designed. Do you expect to see any sort of change in what you need to produce from the mine there, i.e., maybe or this is going to be variable I mean from the ore type and hardness, I mean you see that sort of come down and what sort of sense that we could get in terms of actual increase in costs in order to achieve the throughput going forward?

Well Mark, you’ve pretty much explained it. We are – the grates are going in the next week to get the pebble ports but we’ve also opened up the grates themselves to 2.5 inch in order to be able to reduce what we’re doing in the pit, that’s what Russ was talking about continuing to optimize the mine to mill. Our blasting cost right now to take and reduce the 65% less than 2 inch is an expensive project to get that mill throughput. We believe the grates will let us back off that significantly. At the same time though, as I shared in our operating costs because of the additional haulage to keep the strip ratio up going into GDP3 is going to pretty much balance that out. But what you’ll see is on an operating day basis we’re going to be hitting that 2,450 tons an hour in the mill which is the target and that’s where we need to be at going forward.

And I think we’ve got some extraneous costs Mark, some of the issues that we had in the winter time, we’ve had to spend considerable amount of more money on our deep well pump systems. Mark Turner – Scotiabank: Right.

Systems to help dewater the pits, so we don’t get into the same situation we got into last year so that will be a onetime thing. We’ve like to have advanced the delivery of our production drill that would have helped with (inaudible) part of GDP3, so we’re stripping more where we don’t have the drilling capacity, so we’ve had to bring in some outside drill contracts help us break that muck because we got to keep moving. We’ve got to like John said, we’ve got to get our strip advanced so that when that hungry 30,000 ton a day mill comes up we’ve got to get (inaudible). So there are some sort of – you don’t want to call them one-time event, because they are there for a while, and that are affecting our unit costs but we don’t believe that ultimately and that unit costs in terms of our cost per ton mine, we don’t believe those will be ongoing, it will be able to reduce those significantly into 2013. Do you want to say anything [ph], John?

Yes. Mark Turner – Scotiabank: Okay, perfect. Thanks for the detail. And I guess just my second question still really need to, I guess one line comment I think made in the MD&A just saying that you’ve given the guidance of 9 million tons to 9.5 million tons in process in the second half of the year with allowance for tie-in for GDP3. Just wondering if you could give us a sort of any sense of what’s actually being tied-in because I know there are separate concentrators obviously there is going to be some link between the two, but I am just A, if looking for a little bit of clarity, more just getting in the way of GDP or the current concentrator while you’re starting up in GDP3 or is that something more than that?

No, the major time is, right now we’ve got two crushers and conveyor systems which feed the existing mill and we have to split that up so we’ve got one crusher/conveyor system for each mill and that’s going to take us upon a week to do that change over. The rest of it is separate. Mark Turner – Scotiabank: Okay, perfect.

It comes together again at the tails end but that’s a minor delay. Mark Turner – Scotiabank: All right, okay, perfect. Still got a week for that. And then my last question, sort of entirely different here. In the quarter, you’ve made about CAD10 million investment into a private company, I guess looking at a copper moly project. Given that it’s private, are you able to get any sort of more details on that at this time?

No. Mark Turner – Scotiabank: Okay. Thanks for address.

You’re welcome [ph]. Mark Turner – Scotiabank: And that’s all I had. Thanks gentlemen.

Thanks Mark.

Let me know about that next year sometime.

Thank you. (Operator Instructions) Our next question comes from Steve Parsons from National Bank Financial. Steve Parsons – National Bank Financial: Hi good morning, thanks for taking my call. In fact most of my questions have been asked, but a couple of things, just one the ramp up of GDP3, could you explain and maybe this question is for Peter, just what the plan is for I guess commissioning production on that and I guess when you would look to go commercial on that additional production, what’s the plan for accounting for the GDP3?

Continuing to capitalize all of the existing costs as well as the pre-strip and all the stripping is going on right now as John talked about is being expensed at this point. So really it’s analogous to a large capital project, but not a sort of new startup type situation. So the commissioning process, we’re not going to be capitalizing initial costs related to that at this point Steve, or anything along those lines if that’s what you’re sort of wondering. Steve Parsons – National Bank Financial: Yes, right. I mean it’s actually the question was what would the milestones be for recognizing revenue on the P&L, but it sounds like once you flip the switch, you’re going to be recognizing revenue and costs. Is that correct?

Correct, yes. Steve Parsons – National Bank Financial: All right. I guess the next question is just looking out, I mean just follow on Orest’s question on ramp up and really my question more is about steady state costs, I guess you’re looking at getting daily 5,000 tons a day based on the cost profile, you’re seeing right now and input costs as you see them, where do you see steady state costs, onsite and total cash costs settling out?

Go ahead, John.

When you became [ph] operator?

Well we look at the total cash cost is vulnerable to the foreign exchange rate, so right now we’ve got a pretty much of par exchange in that, that pushes our total operating costs up but onsite, we should be CAD1.50, CAD1.60, leaves CAD0.40 to CAD0.45 offsite, take us to around CAD2 steady state. And then we’ve got – the copper price ups down, so do all of our input costs and foreign exchange adjusts so we maintain margin plus, with Peter’s hedging it’s more about maintaining the margin. We do everything that we can to control those things that we control. Steve Parsons – National Bank Financial: Okay.

Does that answer the question at all? Steve Parsons – National Bank Financial: Yes, it sure does. Thanks a lot gentlemen, it’s good. That’s it for me. Thanks guys.

Thank you. Our next question comes from Orest Wowkodaw from Canaccord. Orest Wowkodaw – Canaccord: My question has already been answered. Thank you.

Okay.

Thank you. Our next question comes from Tom Bishop from BI Research. Tom Bishop – BI Research: Good morning.

Good morning, Tom.

Hi Tom. Tom Bishop – BI Research: I recognized that you’ve learned a lot by all the tinkering with Phase II and that you’re nearing getting that humming, but it’s hard to get my mind around the ramp up being that much more successful with GDP3 that you could produce a 160 million ton – 160 million pounds of copper with GDP3 up and running in the first year out of, I think that’s a possible 180 million. So am I missing something here or maybe not hearing it right or…

Well Tom, if you look at it, this was just a Greenfield and we were –GDP3 was just a Greenfield site which we were starting like in the top of GDP2 a year ago. And you see GDP2 to get to where we are today, it’s taken us a year. If you look at chronologically on that graph that we put out in terms of, we started out with I think 1.5 inch discharge port. Tom Bishop – BI Research: Yes, that’s right.

(Inaudible) inch grates, the smaller discharge ports, there were different types of lifters and you go through that whole thing and that is – it’s a mirror image of what we’re going to be doing on GDP3 ramp up. So when John puts in his grates into the new SAG Mill, he is going to have 3.75 inch port. He is going to have the grates that we’re installing here next week. He is going to have the same type of lifters that we have in our present SAG mills than (inaudible) mill. We’re going to have all those things to a large degree complete, therefore we understand what we they mean. So we think we’ve been pretty conservative in the ramp up. Are we not, John?

Well the other thing too Tom, is this is an identical SAG mill to the one that’s in GDP2. We’re pushing 55,000 tons a day through that. We’re only going to ask 30,000 tons a day from the GDP3 mill for now. Until if we add another ball mill, that SAG mill is designed to take 55,000 ton a day also, while we’re putting at it 30,000 [ph] so, we don’t see any issue with this SAG on GDP3 right on top. This is going to be more of making sure fine tuning all of the floatation ball mill circuits which is not as difficult. Tom Bishop – BI Research: Okay. Well that’s very exciting, I guess I’m hearing it right and just to be sure, the 160 million pounds is your expectation for 2013 not an exit rate or anything, right?

Yes, that’s our expectation.

Yes.

And that will put up over a 120 million pounds or accounting 75%, John?

Yes. Tom Bishop – BI Research: That’s a good point, yes. Well that’s very exciting. It looks like we may be catching up to this scale [ph] here. Thank you.

Thank you.

Thanks, Tom.

Thank you. Well operator, if there are anymore – I don’t think there is any more questions. So folks thanks for joining us today and have a nice rest of the summer and we’ll speak to you in the fall. Bye-bye.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may all disconnect.