By Robb M. Stewart


Taseko Mines Ltd.'s shares rallied Tuesday after the mining company said it would partner with Mitsui & Co. to develop Taseko's Florence copper project in Arizona, a development that would almost double the company's annual metal production when complete.

In morning trading, shares were 14% higher at 1.95 Canadian dollars (US$1.43), narrowing the year-to-date drop to 25%.

The U.S. arm of Mitsui has committed to an initial investment of US$50 million, with the money earmarked for construction of the commercial production facility at Florence, Taseko said. The investment would be in the form of a copper-stream agreement on roughly 2.7% of the copper produced at Florence.

Mitsui has an option to invest a further $50 million for a 10% equity stake in Florence, exercisable within a three-year period after completion of construction of the commercial production facility, the Canadian company said, adding that if Mitsui exercises the equity option the copper stream will terminate.

As part of the agreement, the company entered into a contract for 81% of the copper cathode produced at Florence in the initial years of production, Taseko said. It said the companies will use this period to develop sales channels in the U.S., leveraging Mitsui's existing U.S. cathode trading business.

Taseko, which is majority owner and operator of the Gibraltar open-pit copper mine in Canada, expects construction of Florence to begin next year.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

12-20-22 1133ET