Good day, ladies and gentlemen, and thank you for standing by, and welcome to Taseko Mines First Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference may be recorded. It's now my pleasure to turn the floor over to Brian Bergot. Sir, please go ahead.

Thank you, Hugh. Good morning, ladies and gentlemen, and welcome to Taseko Mines First Quarter 2013 Results Conference Call. My name is Brian Bergot, and I'm the Director of Investor Relations for Taseko. With me today in Vancouver is Russ Hallbauer, President and CEO of Taseko; John McManus, Senior Vice President, Operations; and Peter Mitchell, Taseko’s Chief Financial Officer. After opening remarks by management, which will review first quarter business and operational results, we'll open the phone lines to analysts and investors for a question-and-answer session. Accompanying management’s discussion today will be presentation slides for our webcast participants. Alternatively, the presentation can be found in the Investor Relations section of our website. I would also 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 will 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 first quarter results and to update you on Gibraltar and our other projects. Gross profit for the quarter was roughly $13 million, and considering the work undertaken over the first 3 months of the year, we are not disappointed in that performance, as it bodes well for how we expect things to unfold in the months ahead. I think as we present a few slides over the next 10 or 15 minutes, you all hope we can get an appreciation for where the company is heading in Gibraltar, and what we expect on the next wow [ph] on our projects at Prosperity and Aley. As we spoke about in the last year, many folks understand as well that 2012 was a transition year for Gibraltar. During the first quarter, if we look at Slide #4, Gibraltar production, I'd like to draw your attention to the tons mined be between Q1 2013 and Q4 2012, where we mined nearly 5 million extra tons of waste, producing $23 million per ton of copper. In spite of moving an extra 5 million ton of waste, our unit cost of production per pound of copper produced decreased from the prior quarter. Now we have Concentrator #1 heading back to the kind of availability numbers we expect, now that we have -- are not being interrupted by our GDP3 tie-ins. And with the addition of mill #2, there will be no holding the operation back. So what we've done -- what we brought into production is a brand-new 30,000 ton per day concentrator for roughly $200 million. Most folks do not realize in the $225 million that we originally budgeted, and we have spoken about in the past, nearly $30…

Thanks, Russ. Financially, the first quarter 2013 represented the conclusion of the building team at Taseko with the construction and commissioning of GDP3. Revenue for the first quarter was $60.2 million, a 9% increase over the $55.4 million in the same period last year. As we've talked about, revenue recognition is a function of our copper shipments, and varies quarter-to-quarter based on shipping schedule. Concentrate inventory at the end of the quarter was $3.3 million. Copper prices have trended down through the quarter as a result of historically high inventory levels and global economic growth concerns. However, today looking at copper the trend seems to be reversing very suddenly, with prices up in -- over $0.10. Cost of sales was impacted by increased cost associated with mining activity and labor forced growth related to the new concentrator. These costs were partially offset by higher production, as well as the capitalizing of $4.6 million of mining cost under the new IFR 28 accounting requirements. G&A costs were $5 million in the quarter, down from $5.4 million in the same period last year, due to reductions in stock-based compensation. Exploration and evaluation expense was $2.6 million in the first quarter, compared to $4.3 million in 2012, representing spending on Aley Project development and the EA for new Prosperity. Our accounting treatment continues to be conservative, in that we expensed these project costs. One is -- a couple of additional items on the P&L. Based on the duration of the resource equity market downtrend, we did take a write-down of the company's marketable securities in Q1 2012, over $9 million of write-down. In this mark-to-market type adjustment, it previously had been charged to other comprehensive income. Finance expense was $2.3 million, reflecting bond interest. We've been capitalizing interest during the construction phase, and that will now cease, now that we're operational in GDP3. Income tax expense was $1.5 million, primarily deferred tax on Gibraltar taxable income. Adjusting the after tax earnings for certain noncash items, yields an adjusted loss of $2.9 million for the quarter, compared to earnings of $3.1 million last year. A $0.01 loss at this quarter and $0.02 of earnings last year. Cash position was $6.9 million at the end of the first quarter. Cash decreased by $65.9 million, primarily due to capital spending. We also have $20 million in variable rate notes, which are included in marketable securities and long-term investments, but they are essentially cash equivalents. In conclusion, Q1 represented the inflection point on concentrator 2 buildout and production ramp-up. Taseko is now well-positioned to weather difficult periods in capital and commodity markets with strong liquidity, a long-term capital structure and downside copper price protection with the put that we now have in place to the end of Q1 2014. And, turn it over to Russ.

Thanks, Peter. Just to clarify a little bit, Peter indicated $6.9 million in cash, it's actually $69 million.

It's actually $69 million plus $20 million.

$69 million plus $20 million. Okay, thanks, Peter. Okay, operator, I'd like to open the line to questions, please.

[Operator Instructions] All right, it looks like our first question will come from the line of Steve Parsons from National Bank Financial.

A few questions for you. Just -- I wouldn't mind starting off with the question on CapEx, and getting a bit of a breakdown on what the CapEx spend was for Q1. It looks like it was about $54 million, I guess, that's on a 100% basis. What was involved in that?

Steve, it's John here. Really what that is, is invoices coming in, the work that was done in the previous quarter. And paying back hold-backs [ph] as the contractor's finished off of their work. So it wasn't really $54 million worth of work that was done in Q1. Q1 was commission work, we had a lot of technicians and finishing guys in. So that's really -- got carried over.

What should be looking for in the way of carryover into Q2? And what are you thinking in the way of sustaining CapEx to the balance of the year?

There's not that much coming into Q2, the bulk of it came in Q1. I don't have [indiscernible]. Spend is down.

And what about sustaining CapEx through, maybe quarterly run rate for sustaining CapEx through the balance of the year?

It's also pretty much -- it's low, there's a few small items that we've got to deal with. But it's not going to be -- we're going to start making money, as soon as spending on GDP3 construction completed. We've got all the mining equipment. A lot of that has been leased anyway, so that's not going to affect cash -- you can expect a few million dollars. [indiscernible] It's not much.

And what else can you -- what can you tell me, just in terms of -- obviously you're pushing tons, and doing that exceptionally well with the new mill. If we were to look at total cash costs, when would you expect to see steady state on total cash cost with the new mill?

Well, I'll be the optimist...

We discuss this all the time, Steve. Steady Steve? I think it's always a continual improvement process, and you've got to have your engineering department, and the cost -- the big impact of this new dump, obviously our [indiscernible] cost. I mean you're -- we're losing less -- we're using less diesel and moving more muck. Explosives, John?

There's a big focus on productivity at the mine. We've had tons per man-hour mined, gross operating hours, how much tons per manhours per ton milled, and working on that, I mean for the last 9 months, we've been carrying a bunch of people to get everybody trained up for this 50% production increase. Now we've got to put those people to work to actually produce copper. So I would say we've -- the new mill is amazing. It's coming up very well, so I've -- last half, fourth quarter?

Third, fourth quarter, we should -- back end of the third quarter, fourth quarter, with all the stuff that we got in place.

And is it still sort of a target of $2 a pound-type number?

Yes, that's [indiscernible]. Yes.

Our next question will come from the line of John Pace with Stone Harbor Investment Partners.

Just 2 quick questions. Working capital, what are we looking at there? We had a pretty good expansion in the first quarter. Are we're looking at further use in 2Q and 3Q, as we ramp up the commercial production?

Sorry, are you talking about working capital, John? I didn't hear the first part of the question.

Yes, we had a $15 million, or north of $15 million used in first quarter.

Yes, I think for from this point forward in the year, we should be generating working networking capital.

Do you expect that to ramp down, then, and be a source of cash and through the end of the year?

That's correct.

Okay, so you have the big builds for the GDP3 then?

That's exactly it, and you can see that change in accounts payable from year end to the end of first quarter and that transits, if John McManus here suggested that they're working, will drop even more, going forward, really just for a very -- back to operational levels, it's a use of working capital.

And then, also you mentioned the $4.6 million of mining costs that were capitalized in the first quarter?

Yes.

Now is that -- once the -- now would be -- entered commercial production, will those mining costs in the future, be then be expensed? Is that how it works?

This is the new, you being in the U.S., probably haven't been quite as close as to this different 20 IFRS change that we had this quarter that requires that we break the mine down into components and capitalize during periods where we're stripping above life or at least the strip ratio of that component of the mine. So that $4.6 million that was capitalized in the quarter, that process will stop later this quarter, and then get amortized into cost over the balance of that component of the granite pit. And so it's a sort of ongoing thing that's going to be up and down and affecting our -- obviously not our cash cost of production, but our net cost of production.

So that wasn't really associated with the build of materials for the second concentrated, but more, just pre-stripping?

Yes, just following the mine plant.

So, as your strip ratio ticked up to 3.3 as you pre-strip, that reflects that incremental strip ratio then, basically?

Yes, the sector we're in right now, John, is strip is more 2.9 to 3. So we'll all go over that average in that pit, that goes to account for in stripping.

And that will come back down?

Probably good for 5 or 6 years.

Okay, so that then will come back down as we ramp up and then, periodic we'll -- I guess pop-up and then that'll be capitalized, okay.

Yes.

Our next question comes from Joseph Gallucci with Dundee Capital Markets.

Not to beat a dead horse on the CapEx number here, but just looking on the capital commitments, it says in your MD&A, $8.6 million less for the rest of the year, am I reading that right? Like that's it for GDP3, that's the spend that's left to sort of put it into, to complete it, is that correct?

That's everything. That's anything left to finish off GDP3 plus sustaining capital.

Okay, so and that's 100% basis then, so if we use that number and then add in a couple million for sustaining, that should sort of cover your CapEx needs for the year. Is that okay?

Sure.

Okay, the other question I had was on the marketable securities. Is there any way to give the bit of color, what those are? What the breakdown is a little?

Yes, we haven't historically provided that, Joe. So unfortunately, no.

Okay, and then the last question on Prosperity. Just a bit of color if you guys have, if BC does move to sort of an NDP government there, does that have any effect, you guys think, on permitting at Prosperity, given their sort of bearish views on mining and things like that?

Well, I don't know what are their views are bearish on mining, if we look historically, their performance wasn't the best in mining between 1990 and 2001. Having said that, looking at where we are today, and what the candidates have said, the NDP candidate, Adrian Dix, has not come out and said, in fact, he's endorsed some of the positions with respect to moving some of the processes forward more quickly than they have been. So we're optimistic. We think that they have commented that the federal review process is more diligent than the provincial review process. So the mere the fact is, once we get through this federal review process and we get an approval from the Feds for a metal assessment, then we believe that it'll be significantly easier to modify our amended permits that we now have. So we're cautiously optimistic.

And still no timeline on that, right? Are we still looking for sort of second half of the year, is that the best color we have on it? Or...

Yes, we think we'll respond here in the next week or 2. Depending on what the panel's timeline is, they have up to a maximum of 30 days, they may not take 30 days, but they have up to a maximum of 30 days to set hearings. And they may very well set hearings, so they like to go set up hearings for the next 30 days at some point. And then we -- after that, there's still a 30-day panel review period. So yes. It's getting closer.

Our next question will come from the line of Adam Low with Raymond James.

My first question is regards to capital and production sales. I know it's not normally a big item, but it looked like this quarter, there actually was next to no cathode sales, was just wondering what might have triggered that.

We usually shut the cathode plant down in the winter because you have to keep all of the fluids, so we didn't run cathodes since October. That's normal operating.

And do you guys have, or could you guys give a little bit of color, maybe on what you might have for your development and exploration budget for this year, particularly for Prosperity and Aley?

Yes, on Aley, we're not going to be doing any particular field work other than gathering information to provide initial assessment. We will be doing our metallurgical work, continuing to finish our flowsheet. So $3 million to $5 million on Aley, total for the year, including what was done already. Prosperity, we've got to get through the panel process, so I think we've got about $5 million to $8 million earmarked for that. It's not a big, heavy year on exploration expenditures.

And what kind of near-term milestones have you built in for, from Aley? I mean, I'm kind of surprised you guys haven't press released some of these recent developments on Aley. It looks like things have been going well in terms of the metallurgical processing and tests in that regard. What are the near-term milestones?

Yes, they've gone well, but we waiting for us, the bench line yet?

Yes, these things you have to. There's no sense. To get your flowsheet figure that out, Adam, you can't. Now you have to equip -- you've got to make -- get the proper recoveries. You actually melt metal, we made metal, we've got about -- we've recovered -- our recoveries are about 30%. We know we have to get around 50% to get the flowsheet correct. So if we don't get 50% then we likely won't have a facility. We won't have a mine. It's an interim process so, we're mining guys and technical, so we're not getting ahead of ourselves by announcing something and then have to retract it, say that the AGs. We couldn't get the recoveries. But we are very optimistic that we can. So over probably the next, 2 months, John?

Yes. We’re doing both testing now, rather than the really small bench scale to get us to where we have them with the 30% recoveries. The fact that we have a 50% concentrate grade and that we've made ferroniobium, which is a saleable product, that is a big milestone. So the next one is for us to say we've got our flowsheet and then very quickly, come out the previous building status. We're almost there, we need to nail that flowsheet down [indiscernible].

And my last question is with regards to the ramp up and the existing operations. So I mean, clearly it looks like the ramp up is going very well. It's, I would say it's been ahead of my expectations. For the month of April, you guys did quote that, overall, in the month of April, you processed about 2 million tons of ore. If I do the calculation on that, that works out to about 67,000 tons [ph] per day. And if the new concentrator's doing 28 000 tons over the last couple of weeks, should I be inferring that, the old concentrator was maybe interrupted a little, and got down to as little as about 40,000 tons per day, or am I reading it wrong?

Well, you can read it that way. Our new concentrator has been mining on target, but we lost some time on it. So we don't have [indiscernible]. But those are one-off issues we've got fixed, start up running [ph].

If we took a run rate over the last 1 or 2 weeks here, where would you say the existing -- the old concentrator is running at right now, on a throughput rate?

Well it's running, it's right at 55,000 tons a day. We've had some downtime.

[Operator Instructions] Our next question comes from the line of Brett Levy with Jefferies. Brett M. Levy - Jefferies & Company, Inc. Fixed Income Research: Most of my questions have been answered. I guess the -- to follow-up on an earlier question, you said you were going to be generating networking capital for the balance of the year. Can you put a magnitude on that? And then, I guess the corollary question is, is cash and marketable securities currently at trough levels, as you see it for the year?

I'll answer that first question. The answer to that is yes. We're starting to generate free cash. In terms of our talking about changes, your projected changes in working capital, I'm not going to quantify that. We provide some high level guidance on throughput, but in terms of specific changes in working capital, I'm not going to comment.

Our next question in the queue comes from the line of Mark Turner with Scotiabank.

Most of my questions on that have been asked and answered. Just -- then I guess maybe, a little more detail on the Prosperity, the additional or the Supplemental Information Request you had mentioned, Russ, you sort of aim to have their response to that within the next 2 weeks. Have you then -- am I reading too much into that, to think that you've sort of sat down with the regular, regulatory authorities that sort of some of the issues with the groundwater or the potential groundwater interaction with Fish Lake and sort of maybe addressed a lot of those concerns already, because I guess, one of the option I think they had proposed or the panel had proposed was sort of additional drilling and connectivity work there and to me, that would have a longer time horizon. So just wondering if you could -- if there was any color you could provide on that.

Well, I guess you have to look in the context of the information that the panel has to support what their requests are. And our position is that we have a lot more information than they have, and our understanding of it is far up the learning curve, of the understanding curve, than somebody having a cursory overview of it, including the federal agencies. And so the panel urged us to talk to Enercan and these other people, and we've had a talk with them about them. And a lot of this stuff is not a stir and stock date [ph], because if there's concerns that are raised about certain issues, they're not going to be significant environmental impacts. And those are kind of concerns that are raised in permitting processes, in terms of what you do for mitigation, how do you ensure that there's no groundwater issues. All that comes into play, and that does not have to be specifically focused on during these panel review discussions and the public commentary period. The public doesn't know anything about what the technical side of these questions. The regulating agencies do so. You have to work through this, it's just not -- these are not sequential things where you say you do, A, then you follow with B, then you follow with C, D, and E and F. You may go from A to D. You may go to A to Z, in this process, and say okay, well, you can follow that through when you get into the actual mine development process. So that's our approach on this. None of these are going to stop this, because these -- none of these are any fatal flaws in terms of our understanding of groundwater and any of the other stuff. So that's why these things become very difficult when you're dealing with just a panel because you want to be able to talk to the regulators. So in a normal EA process, our folks and the regulators would be sitting around a big table and you hash all this out. But now we've got to go through this intermediate system with the panel, and the panel, saying, well you better go talk to such and such, because they control the overall agenda.

Yes, I mean, to me it sounds, with your comments there, that you're looking to put in a response in the next 2 weeks there or, I think, somewhere around that timeframe seem pretty positive to me, because the season -- you would've -- would just sat down and been able to at least walk through or talk to a lot of the potential concerns there, so it seems...

Yes, yes. It's a [indiscernible] process. So whether we put in at 2 weeks or 3 weeks, we'll just put it in where we're comfortable, let -- we have the answers that are applicable to the question's that raised. But that's they, somebody can ask an innocuous question, and they can take you 2 weeks to explain it, because you've got to be absolutely clear in your response, because if you don't give a clear response that's understanding then off you go into another question, and then off you go into another question. It's just a do-loop of questions that actually don't get you anywhere, unfortunately. That's the problem with this process.

And looks like our next question comes from Matthew Gibson with CIBC.

Most in my questions have been answered. I just have a quick question about your contingencies. It looks like there you, at the project level, you're carrying about $84 million in debt. I'm just wondering, how that's accounted for on the balance sheet, and what the repayment terms on that debt at the project level is?

It's the capitalized leased debt, I think is what we're talking about, and the repayment terms, most of those amortizations are in the five-year range. Cost of money is in the sort of 4% to 5% range on that.

I'd like to turn the call back over to Russ Hallbauer for any additional or closing remarks.

Well, thank you very much, operator. Thanks, everybody, for joining us today, and look forward to chatting with you in the weeks and the months ahead. Have a good day. Bye-bye.

Thank you, sir. And thank you, ladies and gentlemen. This does conclude today's conference. Thank you for your participation, and have a wonderful day. Attendees, you may disconnect at this time.