Taseko Mines Limited has entered into a US$70 million Senior Secured Credit Facility Agreement (the "Credit Facility") with an affiliate of RK Mine Finance ("Red Kite"), one of the world's largest metal merchants.

"In addition to repaying the May 2016 loan, this facility strengthens our balance sheet with approximately $40 million of additional liquidity in a time of extremely challenging financial markets. It is also a significant endorsement of Taseko's strategy and its assets by a major global copper financer," said Russell Hallbauer, President and CEO of Taseko. "This credit facility also protects Taseko's cash flow because there are no principal or interest payments due during the three-year term."

"We pursued a number of different options to address the 2016 loan maturity and, in the end, it was Red Kite that brought forward the most attractive financing option, which comes with a cost of capital below 10% at current market prices, and no off-take obligations. A copper call option and Taseko warrants, also part of the credit facility, allowed Taseko to negotiate a favourable interest rate. Red Kite and Taseko will benefit from a strengthening copper market, which is aligned with Taseko's shareholders' interests who will also benefit from improved financial performance as copper prices increase," Hallbauer added.

The credit facility consists of an initial tranche of US$31 million to refinance the Company's existing secured loan with Red Kite, which matures in May 2016, and the remaining US$39 million will be available to the Company for general corporate purposes. Amounts drawn under the Credit Facility will accrue interest at a rate of LIBOR +7.5% (subject to a minimum LIBOR of 1%), with principal and interest due at maturity, March 29, 2019.

Taseko will issue a call option to Red Kite for 7,500mt of copper ("Copper Call Option"). The Copper Call Option strike price is US$2.04/lb. and payment will be made by Taseko in 2019 based on the average copper price during the month of March 2019 (to a maximum of US$15 million).

Taseko will also issue to Red Kite four million warrants to purchase Taseko common shares. Each warrant will be exercisable to acquire one common share of Taseko for a period of 39 months from the date of issue.  The exercise price of the warrants is C$0.51/share, a 20% premium to Taseko's 20-day VWAP.

The Credit Facility is subject to an up-front arrangement fee of 2.5% payable by Taseko but there are no standby or commitment fees on the undrawn portion of the Facility. The loan is repayable without penalty at any time prior to maturity and does not impose any off-take obligations on Taseko.

The Credit Facility is secured by a first priority charge over Taseko's assets, including the Company's 75% joint venture interest in the Gibraltar Mine, shares in all material subsidiaries and the Florence Copper Project assets.  The availability of the Credit Facility is subject to conditions and covenants, including maintenance of a minimum working capital balance of US$20 million.