<SEC-DOCUMENT>0001062993-12-000846.txt : 20120313
<SEC-HEADER>0001062993-12-000846.hdr.sgml : 20120313
<ACCEPTANCE-DATETIME>20120313163614
ACCESSION NUMBER:		0001062993-12-000846
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		10
CONFORMED PERIOD OF REPORT:	20120312
FILED AS OF DATE:		20120313
DATE AS OF CHANGE:		20120313

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TASEKO MINES LTD
		CENTRAL INDEX KEY:			0000878518
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A1
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31965
		FILM NUMBER:		12687495

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1020
		STREET 2:		800 WEST PENDER STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2V6
		BUSINESS PHONE:		604-684-6365

	MAIL ADDRESS:	
		STREET 1:		SUITE 1020
		STREET 2:		800 WEST PENDER STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2V6
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Taseko Mines Ltd.: Form 6-K - Filed by newsfilecorp.com</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF" style="font-size: 10pt;">
<hr noshade align="center" width="100%" size=3 color="black">

<p align="center"><font size="5"><strong>UNITED STATES<br>
  SECURITIES AND EXCHANGE COMMISSION</strong></font><br>
  Washington, D.C. 20549</p>

<p align="center"><b><font size="5">FORM 6-K</font></b></p>
<p align="center"><b>REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
  OR 15d-16 <br>
  UNDER THE SECURITIES EXCHANGE ACT OF 1934</b></p>
<p align="center">As at <b>March 12, 2012</b></p>

<p align="center">Commission File Number: <b>001-31965</b></p>

<p align="center"><b><u><font size="5">TASEKO MINES LTD.</font></u></b><br>
  (Translation of registrant's name into English) </p>

<p align="center"><b>Suite 300 &#150; 905 West Pender Street<br>
  Vancouver, British Columbia<br>
  <u>Canada V6C 1L6</u></b><br>
  (Address of principal executive offices) </p>

<p align="center">Indicate by check mark whether the registrant files or will
  file annual reports under cover Form 20-F or Form 40-F.</p>
<p align="center">[<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]
  Form 20-F&nbsp;&nbsp;&nbsp;[ x ] Form 40-F</p>
<p align="center">Indicate by check mark if the registrant is submitting the Form
  6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]</p>
<p align="center"> Indicate by check mark if the registrant is submitting the
  Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]</p>
<p align="center">Indicate by check mark whether by furnishing the information
  contained in this Form, the registrant is also thereby furnishing the information
  to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
  of 1934.</p>
<p align="center">Yes [<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]
  No [ x ]</p>
<p align="center"> If &quot;Yes&quot; is marked, indicate below the file number
  assigned to the registrant in connection with Rule 12g3-2(b): 82- _________
</p>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<p align="center"><img src="taseko.jpg" width="361" height="49"></p>
<p align="center"><b><u>SUBMITTED HEREWITH</u></b></p>

<p align="left"><u>Exhibits</u></p>

<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top" bgcolor="#EEEEEE">&nbsp;</td>
    <td width="5%" valign="top" bgcolor="#EEEEEE"><a href="exhibit99-1.htm">99.1</a></td>
    <td bgcolor="#EEEEEE"><a href="exhibit99-1.htm">Consolidated Financial Statements
      for the Year Ended December 31, 2011</a></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" bgcolor="#EEEEEE">&nbsp;</td>
    <td valign="top" bgcolor="#EEEEEE"><a href="exhibit99-2.htm">99.2</a></td>
    <td bgcolor="#EEEEEE"><a href="exhibit99-2.htm">Management&#146;s Discussion
      and Analysis for the Year Ended December 31, 2011</a></td>
  </tr>
</table>
<p>&nbsp;</p>

<hr noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<p align="center"><strong><u>SIGNATURES</u></strong></p>

<p align="justify">Pursuant to the requirements of the Securities Exchange Act
  of 1934, the registrant has duly caused this report to be signed on its behalf
  by the undersigned, thereunto duly authorized.</p>

<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="50%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><b>Taseko Mines Ltd.</b></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">(Registrant)</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">Date: March 12, 2012</td>
    <td valign="top">By:</td>
    <td style="BORDER-BOTTOM: #000000 1px solid"><I>/s/ Peter Mitchell</I></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>Peter C. Mitchell</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">Title:</td>
    <td> Chief Financial Officer </td>
  </tr>
</table>
<p>&nbsp; </p>

<hr noshade align="center" width="100%" size=5 color="Black"></BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit99-1.htm
<DESCRIPTION>FINANCIAL STATEMENTS
<TEXT>


<HTML>
<HEAD>
   <TITLE>Taseko Mines Limited - Exhibit 99.1 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">

<P><A name=page_1></A>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align=center><IMG
src="taseko.jpg" width="361" height="49" border=0> <BR>
</P>
<P align=center><FONT size=3>Consolidated Financial Statements</FONT><BR><FONT
size=3>December 31, 2011 and 2010</FONT></P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<P align=center>&nbsp;</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_2></A>
<P align=justify><B>MANAGEMENT&#146;S RESPONSIBILITY FOR FINANCIAL STATEMENTS
</B></P>
<P align=justify>The consolidated financial statements, the notes thereto and
other financial information contained in the Management&#146;s Discussion and
Analysis have been prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board and are the
responsibility of the management of Taseko Mines Limited. The financial
information presented elsewhere in the Management&#146;s Discussion and Analysis is
consistent with the data that is contained in the consolidated financial
statements. The consolidated financial statements, where necessary, include
amounts which are based on the best estimates and judgment of management. </P>
<P align=justify>In order to discharge management&#146;s responsibility for the
integrity of the financial statements, the Company maintains a system of
internal accounting controls. These controls are designed to provide reasonable
assurance that the Company&#146;s assets are safeguarded, transactions are executed
and recorded in accordance with management&#146;s authorization, proper records are
maintained and relevant and reliable financial information is produced. These
controls include maintaining quality standards in hiring and training of
employees, establishing policies and procedures, a corporate code of conduct and
ensuring that there is proper accountability for performance within appropriate
and well-defined areas of responsibility. </P>
<P align=justify>The Board of Directors is responsible for overseeing
management&#146;s performance of its responsibilities for financial reporting and
internal control. The Audit Committee, which is composed of non-executive
directors, meets with management as well as the external auditors to ensure that
management is properly fulfilling its financial reporting responsibilities to
the Directors who approve the consolidated financial statements. The external
auditors have full and unrestricted access to the Audit Committee to discuss the
scope of their audits, the adequacy of the system of internal controls and
review financial reporting issues. </P>
<P align=justify>The consolidated financial statements have been audited by KPMG
LLP, the Company&#146;s independent registered chartered accountants, in accordance
with Canadian generally accepted auditing standards and standards of the Public
Company Accounting Oversight Board (United States). </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>/s/ Russell Hallbauer </TD>
    <TD width="50%" align=left>/s/ Peter Mitchell </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Russell Hallbauer </TD>
    <TD width="50%" align=left>Peter Mitchell </TD></TR>
  <TR vAlign=top>
    <TD align=left>Chief Executive Officer </TD>
    <TD width="50%" align=left>Chief Financial Officer </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Vancouver, British Columbia </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>March 9, 2012 </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_3></A>
<P align=justify><B>MANAGEMENT&#146;S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING </B></P>
<P align=justify>The Company&#146;s management, including the Chief Executive Officer
and the Chief Financial Officer, is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated
under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;) as a
process designed by, or under the supervision of, the Company&#146;s principal
executive and principal financial officers and effected by the Company&#146;s Board
of Directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with International
Financial Reporting Standards. The Company&#146;s internal control over financial
reporting includes those policies and procedures that: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>pertain to the maintenance of records that, in reasonable detail,
  accurately and fairly reflect the transactions and dispositions of the assets
  of the Company; </P>
  <LI>
  <P>provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures of the
  Company are being made only in accordance with authorizations of management
  and directors of the Company; and </P>
  <LI>
  <P>provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the Company&#146;s assets that
  could have a material effect on the financial statements. </P></LI></UL>
<P align=justify>The Company&#146;s management, under the supervision of the Chief
Executive Officer and the Chief Financial Officer, assessed the effectiveness of
the Company&#146;s internal control over financial reporting as defined in Rule
13a-15(f) and Rule 15d-15(f) under the Exchange Act as of December 31, 2011. In
making this assessment, it used the criteria set forth in the Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based on this assessment, management has
concluded that, as of December 31, 2011, the Company&#146;s internal control over
financial reporting is effective based on those criteria.</P>
<P align=justify>The effectiveness of the Company&#146;s internal control over
financial reporting as of December 31, 2011 has been audited by KPMG LLP, the
Company&#146;s independent registered chartered accountants, as stated in their
report immediately preceding the Company&#146;s audited consolidated financial
statements for the years ended December 31, 2011 and 2010. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>/s/ Russell Hallbauer </TD>
    <TD width="50%" align=left>/s/ Peter Mitchell </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Russell Hallbauer </TD>
    <TD width="50%" align=left>Peter Mitchell </TD></TR>
  <TR vAlign=top>
    <TD align=left>Chief Executive Officer </TD>
    <TD width="50%" align=left>Chief Financial Officer </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="50%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>Vancouver, British Columbia </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=left>March 9, 2012 </TD>
    <TD width="50%" align=left>&nbsp; </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_4></A><br>
<IMG
src="kpmglogo.jpg" width="95" height="42" border=0> <BR>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 8pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="40%" align=left ><B>KPMG LLP </B></TD>
    <TD width="10%" align=left >Telephone </TD>
    <TD width="23%" align=left>(604) 691-3000 </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="40%" align=left ><B>Chartered Accountants </B></TD>
    <TD width="10%" align=left >Fax </TD>
    <TD width="23%" align=left>(604) 691-3031 </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="40%" align=left >PO Box 10426 777 Dunsmuir Street
    </TD>
    <TD width="10%" align=left >Internet </TD>
    <TD width="23%" align=left>www.kpmg.ca </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="40%" align=left >Vancouver BC V7Y 1K3 </TD>
    <TD width="10%" align=left >&nbsp; </TD>
    <TD width="23%" align=left>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD  align=left>&nbsp;</TD>
    <TD width="40%" align=left >Canada </TD>
    <TD width="10%" align=left >&nbsp; </TD>
    <TD width="23%" align=left>&nbsp; </TD></TR></TABLE></DIV>
<P align=center><B><FONT size=3>INDEPENDENT AUDITORS&#146;
REPORT</FONT><BR></B><B><FONT size=3>OF REGISTERED PUBLIC ACCOUNTING FIRM
</FONT></B></P>
<P align=justify>To the Shareholders of Taseko Mines Limited </P>
<P align=justify>We have audited the accompanying consolidated financial
statements of Taseko Mines Limited, which comprise the consolidated statements
of financial position as at December 31, 2011, December 31, 2010 and January 1,
2010, the consolidated statements of comprehensive income, changes in equity and
cash flows for the years ended December 31, 2011 and December 31, 2010, and
notes, comprising a summary of significant accounting policies and other
explanatory information. </P>
<P align=justify><I>Management&#146;s Responsibility for the Consolidated Financial
  Statements</I></P>
<P align=justify>Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error. </P>
<P align=justify><I>Auditors&#146; Responsibility</I></P>
<P align=justify>Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement. </P>
<P align=justify>An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the
assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity&#146;s preparation and fair
presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity&#146;s internal control. An
audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements.
</P>
<P align=justify>We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit opinion.
</P>
<P style="MARGIN-LEFT: 30%" align=justify><FONT size=1>KPMG LLP is a Canadian
limited liability partnership and a member firm of the KPMG <BR></FONT><FONT
size=1>network of independent member firms affiliated with KPMG International
Cooperative </FONT><BR><FONT size=1>(&#147;KPMG International&#148;), a Swiss entity.
</FONT><BR>
  <FONT size=1>KPMG Canada provides services to KPMG LLP. </FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_5></A><br>
<IMG src="kpmgmini.jpg" width="50" height="22" border=0> <BR>
<P align=right><I>Taseko Mines Limited </I><BR><I>Page 2 </I><BR></P>
<P align=justify><I>Opinion</I><B><I> </I></B></P>
<P align=justify>In our opinion, the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of Taseko
Mines Limited as at December 31, 2011, December 31, 2010 and January 1, 2010,
and its consolidated financial performance and its consolidated cash flows for
the years ended December 31, 2011 and December 31, 2010 in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board. </P>
<P align=justify><B>KPMG LLP (signed) </B></P>
<P align=justify>Chartered Accountants </P>
<P align=justify>March 9, 2012 <BR>Vancouver, Canada </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_6></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Consolidated Statements of Comprehensive Income </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in
      thousands, except per share amounts) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right >For the years ended </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right >December 31, </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD  width="8%"
    align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Note </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenues </TD>
    <TD bgColor=#e6efff  width="8%" align=center>4 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;251,866 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;278,460 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cost of sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >(165,565</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"
    >(157,759</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Gross profit </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >86,301 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >120,701 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>General and administrative </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(21,100</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(19,057</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Exploration and evaluation </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(10,411</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(10,090</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other operating income (expenses) </TD>
    <TD bgColor=#e6efff  width="8%" align=center>7 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >5,175 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(2,675</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Gain (loss) on contribution
      to joint venture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>3 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >(3,987</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >98,157 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >55,978 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >187,036 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Finance expenses </TD>
    <TD bgColor=#e6efff  width="8%" align=center>8 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(22,492</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(10,747</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Finance income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >17,270 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >19,572 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Earnings before income taxes </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >50,756 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >195,861 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Income tax expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="8%" align=center>10 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >(23,782</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >(46,504</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Net earnings for
      the year </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    ><B>&nbsp;26,974 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    ><B>&nbsp;149,357 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Other comprehensive income (loss): </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrealized gains (losses) on available-for-sale
    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;financial assets, net of tax </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(2,401</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >5,249 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Realized gains on available-for-sale
    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;financial assets,
      net of tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >(5,246</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >(3,576</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>Total other comprehensive income (loss) for the year </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="8%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;(7,647</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;1,673 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Total comprehensive income for the year </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="8%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;19,327 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" ><B>&nbsp;151,030 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Earnings per share </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Basic </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right >&nbsp;0.14 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right >&nbsp;0.80 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Diluted </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;0.14 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;0.74 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Weighted-average shares outstanding (thousands)
      </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Basic </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >193,213 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >186,103 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Diluted </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >197,748 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >203,006 </TD>
    <TD bgColor=#e6efff  width="2%"
  align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The accompanying notes are an integral part of these
consolidated financial statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_7></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Consolidated Statements of Cash Flows </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in
      thousands) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right >For the years ended </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right >December 31, </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD  width="8%"
    align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Note </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Operating activities </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net earnings for the year </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right >26,974 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right >&nbsp;149,357 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Adjustments for: </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Depreciation </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >12,827 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >12,973 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Income tax expense </TD>
    <TD bgColor=#e6efff  width="8%" align=center>10 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >23,782 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >46,504 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Income tax paid </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(38,660</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(1,911</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Share-based compensation
    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >8,215 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >9,260 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Unrealized gain on derivatives </TD>
    <TD  width="8%" align=center>7 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(22,944</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(8,877</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Finance expenses </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >18,164 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >7,403 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Finance income </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(13,963</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(5,018</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Gain on contribution to
      joint venture </TD>
    <TD bgColor=#e6efff  width="8%" align=center>3 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(98,157</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Other operating activities </TD>
    <TD  width="8%" align=center>24 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >9,617 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >837 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Net change in non-cash working capital </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="8%" align=center>24 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >(12,348</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >(18,293</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash provided by operating activities </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >11,664 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >94,078 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Investing activities </B></TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Purchase of property, plant and equipment
    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(63,915</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(55,303</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Purchase of financial assets </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap >(235,595</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(24,009</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Interest received </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >7,093 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >2,629 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Proceeds from sale of financial assets </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >169,515 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >16,449 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Proceeds from contribution to joint venture
    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>3 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >186,811 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Other investing
      activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>24 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >(1,066</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >1,860 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Cash provided by (used for) investing activities    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(123,968</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >128,437 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Financing activities </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Repayment of debt </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(10,729</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(56,823</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Interest paid </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(10,121</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(3,118</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Common shares issued for cash </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >8,420 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >3,837 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Proceeds from debt issuance </TD>
    <TD bgColor=#e6efff  width="8%" align=center>19 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >192,020 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >14,077 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Debt issuance
      costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >(6,052</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Cash provided by (used for) financing activities    </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >173,538 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >(42,027</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Effect of exchange rate changes on </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;cash and equivalents
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >4,765 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >(3,777</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Increase in cash and equivalents </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >65,999 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >176,711 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cash and equivalents,
      beginning of year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >211,793 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >35,082 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left><B>Cash and equivalents, end of year </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="8%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" ><B>277,792 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" ><B>&nbsp;211,793 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The accompanying notes are an integral part of these
consolidated financial statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_8></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Consolidated Balance Sheets </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in
      thousands) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap >December 31, </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap >December 31, </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap >January 1, </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD  width="8%"
    align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Note </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>ASSETS </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current assets </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Cash and equivalents </TD>
    <TD bgColor=#e6efff  width="8%" align=center>24a </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;277,792
</TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;211,793
</TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;35,082 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Accounts receivable </TD>
    <TD  width="8%" align=center>11 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >39,909 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >21,918 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >12,505 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Other financial assets </TD>
    <TD bgColor=#e6efff  width="8%" align=center>12 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >86,147 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >26,202 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >21,634 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Inventories </TD>
    <TD  width="8%" align=center>13 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >23,290 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >21,286 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >21,792 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Current tax receivable </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >7,437 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >&#150; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >&#150; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Prepaids </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2,348 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >534 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >2,112 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >436,923 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >281,733 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >93,125 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other financial assets </TD>
    <TD bgColor=#e6efff  width="8%" align=center>12 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >111,641 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >93,825 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >102,821 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Property, plant and equipment </TD>
    <TD  width="8%" align=center>14 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >440,565 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >341,098 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >366,299 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Intangible assets </TD>
    <TD bgColor=#e6efff  width="8%" align=center>15 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >5,438 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >5,438 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >5,438 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Prepaids </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >165 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="8%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;994,732 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;722,094 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" ><B>&nbsp;567,683 </B></TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>LIABILITIES </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Accounts payable and accrued
      liabilities </TD>
    <TD bgColor=#e6efff  width="8%" align=center>16 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;36,289 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;23,796 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right >&nbsp;17,993 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Current portion of long-term debt </TD>
    <TD  width="8%" align=center>19 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >13,753 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >10,315 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >27,678 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Other financial liabilities </TD>
    <TD bgColor=#e6efff  width="8%" align=center>17 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >10,797 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >7,248 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >28,911 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Current tax liabilities </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >&#150; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >24,528 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >370 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Deferred revenue - royalty obligation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="8%" align=center>17a </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >175 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >175 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >175 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >61,014 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >66,062 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >75,127 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Long-term debt </TD>
    <TD  width="8%" align=center>19 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >218,502 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >28,018 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >46,525 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other financial liabilities </TD>
    <TD bgColor=#e6efff  width="8%" align=center>17 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >45,980 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >54,144 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >89,921 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Provision for environmental rehabilitation </TD>
    <TD  width="8%" align=center>18 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >96,022 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >53,129 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >50,700 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Deferred tax liabilities </TD>
    <TD bgColor=#e6efff  width="8%" align=center>10 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >76,091 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >59,518 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >16,880 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Deferred revenue -
      royalty obligation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>17a </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >306 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >481 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >656 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >497,915 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >261,352 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >279,809 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>EQUITY </B></TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Share capital </TD>
    <TD  width="8%" align=center>20a </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >378,393 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >365,553 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >350,376 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Contributed surplus </TD>
    <TD bgColor=#e6efff  width="8%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >33,040 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >26,193 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right >19,532 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>Accumulated other comprehensive income (loss) ("AOCI") </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >(1,398</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >6,249 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right >4,576 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Retained earnings (deficit) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="8%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >86,782 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >62,747 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right >(86,610</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="8%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >496,817 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >460,742 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right
    >287,874 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="8%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;994,732 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;722,094 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff width="12%"
    align=right ><B>&nbsp;567,683 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="8%" align=center>&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%" >&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Commitments and contingencies </TD>
    <TD bgColor=#e6efff  width="8%" align=center>23 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left >&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Subsequent events </TD>
    <TD  width="8%" align=center>28 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left >&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>The accompanying notes are an integral part of these
consolidated financial statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_9></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Consolidated Statements of Changes in Equity </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in
      thousands) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 9pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="6%" align=center>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=right nowrap>Retained </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="6%" align=center>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=right>Share </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=right nowrap>Contributed </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=right>earnings </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="9%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD width="6%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">Note    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%"
      align=right>capital </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%"
      align=right>surplus </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="9%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">AOCI    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%"
      align=right>(deficit) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="9%" align=right>Total
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="6%" align=center>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff>Balance at January 1, 2010 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>$</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>350,376 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>$</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&nbsp;19,532 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>$</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&nbsp;4,576 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>$</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&nbsp;(86,610</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>$</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&nbsp;287,874 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Exercise of options </TD>
    <TD vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>6,436 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>(2,599</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>3,837 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Shares issued </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>8,741 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>8,741 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Share-based compensation </TD>
    <TD vAlign=bottom width="6%" align=center>21 </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>9,260 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>9,260 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Total comprehensive income for the year </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>1,673 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>149,357 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>151,030 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Balance at December 31, 2010 </TD>
    <TD vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD width="9%"
    align=right vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>365,553 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="9%"
    align=right><B>&nbsp;26,193 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD width="9%"
    align=right vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;6,249 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="9%"
    align=right><B>&nbsp;62,747 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD width="9%"
    align=right vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;460,742 </B></TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%">&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%">&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%">&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%">&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%">&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Balance at January 1, 2011 </TD>
    <TD vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>$</TD>
    <TD vAlign=bottom width="9%" align=right>365,553 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>$</TD>
    <TD vAlign=bottom width="9%" align=right>&nbsp;26,193 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>$</TD>
    <TD vAlign=bottom width="9%" align=right>&nbsp;6,249 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>$</TD>
    <TD vAlign=bottom width="9%" align=right>&nbsp;62,747 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>$</TD>
    <TD vAlign=bottom width="9%" align=right>&nbsp;460,742 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Exercise of options </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>4,228 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>(1,368</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>2,860 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Preferred shares redemption </TD>
    <TD vAlign=bottom width="6%" align=center>20b </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>(26,642</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>(2,939</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>(29,581</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Shares issued </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>20b </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>35,254 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="9%" align=right>35,254 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Share-based compensation </TD>
    <TD vAlign=bottom width="6%" align=center>21 </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>8,215 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>&#150; </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="9%" align=right>8,215 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Total comprehensive income for the year </TD>
    <TD bgColor=#e6efff vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>(7,647</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>26,974 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="9%" align=right>19,327 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Balance at December 31, 2011 </TD>
    <TD vAlign=bottom width="6%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD width="9%"
    align=right vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>378,393 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="9%"
    align=right><B>&nbsp;33,040 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD width="9%"
    align=right vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;(1,398</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left><B>) </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="9%"
    align=right><B>&nbsp;86,782 </B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="1%"
    align=left><B>$</B></TD>
    <TD width="9%"
    align=right vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;496,817 </B></TD>
  <TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>The accompanying notes are an integral part of these
consolidated financial statements.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_10></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in
      thousands) </TD></TR></TABLE>
<P
align=justify><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REPORTING
ENTITY </B></P>
<P align=justify>Taseko Mines Limited (the Company) is a corporation governed by
the <I>British Columbia Business Corporations Act. </I>The consolidated
financial statements of the Company as at and for the year ended December 31,
2011 comprise the Company, its subsidiaries and its 75% interest in the
Gibraltar joint venture since its formation on March 31, 2010. The Company is
principally engaged in the production and sale of metals, as well as related
activities including exploration and mine development, within the province of
British Columbia. Seasonality does not have a significant impact on the
Company&#146;s operations. </P>
<P
align=justify><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SIGNIFICANT
ACCOUNTING POLICIES </B></P>
<P align=justify><I>(a) &nbsp;Statement of compliance </I></P>
<P align=justify>These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS). These are
the Company&#146;s first consolidated financial statements prepared in accordance
with IFRS and IFRS 1, <I>First Time Adoption of International Financial
Reporting Standards </I>has been applied. </P>
<P align=justify>Note 27 provides an explanation of how the transition to IFRS
has affected the reported financial position, financial performance and cash
flows of the Company.</P>
<P align=justify>These consolidated financial statements were authorized for
issue by the Board of Directors on March 9, 2012. </P>
<P align=justify><I>(b) &nbsp;Basis of measurement </I></P>
<P align=justify>These consolidated financial statements have been prepared on a
historical cost basis except for fair-value- through-profit-or-loss,
available-for-sale and derivative financial instruments which are measured at
fair value. </P>
<P align=justify>These consolidated financial statements are presented in
Canadian dollars, which is the Company&#146;s functional currency. Non-Canadian
dollar monetary assets and liabilities are translated into Canadian dollars at
the closing exchange rate as at the balance sheet date. Non-monetary assets and
liabilities, revenues and expenses are translated in Canadian dollars at the
prevailing rate of exchange on the dates of the transactions. All financial
information presented in Canadian dollars has been rounded to the nearest
thousand, unless otherwise noted. </P>
<P align=justify>The preparation of these consolidated financial statements in
conformity with IFRS requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimates are revised and in any future periods affected. </P>
<P align=justify>Significant areas where judgment is applied include reserve and
resource estimation; asset valuations and the measurement of impairment charges
or reversals; finished and in-process inventory quantities; plant and equipment
lives; tax provisions; provisions for environmental rehabilitation; valuation of
derivative instruments; assessment of joint control in business combinations and
share-based compensation. Key estimates and assumptions made by management with
respect to these areas have been disclosed in the notes to these consolidated
financial statements as appropriate.</P>
<P align=justify>The accuracy of reserve and resource estimates is a function of
the quantity and quality of available data and the assumptions made and judgment
used in the engineering and geological interpretation, and may be subject to
revision based on various factors. Changes in reserve and resource estimates may
impact the carrying value of property, plant and equipment; the calculation of
depreciation expense; the capitalization of stripping costs incurred during
production; and the timing of cash flows related to the provision for
environmental rehabilitation. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_11></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Changes in forecast prices of commodities, exchange rates,
production costs and recovery rates may change the economic status of reserves
and resources. Forecast prices of commodities, exchange rates, production costs
and recovery rates, and discount rates assumptions, either individually or
collectively, may impact the carrying value of derivative financial instruments,
inventory, property, plant and equipment, and intangibles, as well as the
measurement of impairment charges or reversals. </P>
<P align=justify><I>(c)&nbsp; Basis of consolidation </I></P>
<P align=justify><I>Subsidiaries </I></P>
<P align=justify>Subsidiaries are entities controlled by the Company, either
directly or indirectly. The financial statements of subsidiaries are included in
these consolidated financial statements from the date that control commences
until the date that control ceases. All intercompany balances, transactions,
income and expenses are eliminated in preparing the consolidated financial
statements. </P>
<P align=justify><I>Joint ventures </I></P>
<P align=justify>A joint venture is a contractual arrangement whereby the
Company and other parties undertake an economic activity that is subject to
joint control (i.e., when the strategic financial and operating policy decisions
relating to the activities of the joint venture require the unanimous consent of
the parties sharing control). </P>
<P align=justify>Joint venture arrangements that involve the joint control, and
often the joint ownership, by the venturers of one or more assets contributed
to, or acquired for the purpose of, the joint venture and dedicated to the
purposes of the joint venture are referred to as jointly controlled assets
(JCA). The assets are used to obtain benefits for the venturers. Each venturer
may take a share of the output from the assets and each bears an agreed share of
the expenses incurred. These joint ventures do not involve the establishment of
a corporation, partnership or other entity, or a financial structure that is
separate from the venturers themselves. Each venturer has control over its share
of future economic benefits through its share of the JCA. </P>
<P align=justify>The Company reports its interests in a JCA using the
proportionate consolidation method. The Company combines its proportionate share
of the joint venture&#146;s individual income and expenses, assets and liabilities
and cash flows on a line-by-line basis with similar items in the consolidated
financial statements. Unrealized income and expenses resulting from transactions
between the Company and the joint venture are eliminated to the extent of the
interest in the joint venture. </P>
<P align=justify><I>(d)&nbsp; Revenue recognition </I></P>
<P align=justify>Revenue is recognized when the significant risks and rewards of
ownership have been transferred and the amount of revenue is reasonably
determinable. These conditions are generally satisfied when title passes to the
customer. Cash received in advance of meeting these conditions is recorded as
deferred revenue.</P>
<P align=justify>Under the terms of the Company&#146;s concentrate and cathode sales
contracts, the final sales amount is based on final assay results and quoted
market prices in a period subsequent to the date of sale. Revenues for these
sales are recorded at the time of shipment, which is also when the risks and
rewards of ownership transfer to the customer, based on an estimate of metal
contained using initial assay results and forward market prices on the expected
date that final sales prices will be fixed. The period between provisional
pricing and final settlement can be between one and four months. This
provisional pricing mechanism represents an embedded derivative. The embedded
derivative is recorded at fair value each reporting period by reference to
forward market prices until the date of final pricing, with the changes in fair
value recorded as an adjustment to revenue. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_12></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(e) &nbsp;Cash and equivalents </I></P>
<P align=justify>Cash and equivalents consist of cash and highly-liquid
investments having terms of three months or less from the date of acquisition
and that are readily convertible to known amounts of cash. Cash and equivalents
exclude cash subject to restrictions. </P>
<P align=justify><I>(f)&nbsp; Financial instruments </I></P>
<P align=justify>Financial assets and liabilities are recognized on the balance
sheet when the Company becomes party to the contractual provisions of the
instrument. The classification of financial instruments dictates how these
assets and liabilities are measured subsequently in the Company&#146;s financial
statements.</P>
<P align=justify><I>Financial instruments at fair value through profit or loss
(FVTPL) </I></P>
<P align=justify>Financial instruments are classified as FVTPL when they are
held for trading. A financial instrument is held for trading if it was acquired
for the purpose of selling in the near term. Derivative financial instruments
that are not designated and effective as hedging instruments are classified as
FVTPL. Financial instruments classified as FVTPL are stated at fair value with
any changes in fair value recognized in earnings for the period. Financial
assets in this category include dual currency deposits and derivatives.</P>
<P align=justify>The Company may enter into derivative financial instruments to
manage exposure to commodity price fluctuations (primarily copper) and to
improve the returns on its cash assets. These instruments are non-hedge
derivative instruments. </P>
<P align=justify><I>Loans and receivables </I></P>
<P align=justify>Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market. Subsequent to
initial recognition, these financial assets are recorded at amortized cost using
the effective interest method, except for short-term receivables when the
recognition of interest would be immaterial. Accounts receivable are assessed
for evidence of impairment at each reporting date, with any impairment
recognized in earnings for the period. Financial assets in this category include
cash, accounts receivable and the promissory note. </P>
<P align=justify><I>Available-for-sale financial assets </I></P>
<P align=justify>Marketable securities, except for those marketable securities
that are derivative instruments, capped floating rate notes and reclamation
deposits are designated as available-for-sale and recorded at fair value.
Unrealized gains and losses are recognized in other comprehensive income until
the securities are disposed of or when there is evidence of impairment in value.
If impairment in value has been determined, it is recognized in earnings for the
period.</P>
<P align=justify><I>Financial liabilities </I></P>
<P align=justify>Financial liabilities are initially recorded at fair value, net
of transaction costs, and are subsequently measured at amortized cost using the
effective interest method. The Company has accounted for accounts payable and
accrued liabilities, debt and the royalty obligation under this method. </P>
<P align=justify><I>Fair value measurement </I></P>
<P align=justify>Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value hierarchy establishes three
levels to classify the inputs to valuation techniques used to measure fair
value, by reference to the reliability of the inputs used to estimate the fair
values. </P>
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style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Level 1 &#150; quoted prices (unadjusted) in
active markets for identical assets or liabilities; </P>
<P style="MARGIN-LEFT: 5%" align=justify>Level 2 &#150; inputs other than quoted
prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
</P>
<P style="MARGIN-LEFT: 5%" align=justify>Level 3 &#150; inputs for the asset or
liability that are not based on observable market data (unobservable inputs).
</P>
<P align=justify><I>(g) &nbsp;Exploration and evaluation</I> </P>
<P align=justify>Exploration and evaluation expenditures relate to the initial
search for a mineral deposit and the subsequent evaluation to determine the
economic potential of the mineral deposit. The exploration and evaluation stage
commences when the Company obtains the legal right or license to begin
exploration. This stage ends when management determines that there is sufficient
evidence to support probability of future mining operations of economically
recoverable reserves, and requires significant judgment on the part of
management. </P>
<P align=justify>Exploration and evaluation expenditures are recognized in
earnings in the period in which they are incurred. Once it is expected that
expenditures can be recovered by future exploitation or sale, they are
considered development costs and capitalized as part of mineral properties
within property, plant and equipment.</P>
<P align=justify>Exploration activities primarily consist of expenditures
relating to drilling programs and include: researching and analyzing existing
exploration data; conducting geological mapping studies; and taking core samples
for analysis. Evaluation activities include: examination and testing of
extraction methods and metallurgical/treatment processes; studies related to
assessment of transportation and infrastructure requirements; market and finance
studies; and detailed economic evaluations to determine whether development of
the reserves is commercially justifiable, including the preparation of scoping,
preliminary feasibility and final feasibility studies. </P>
<P align=justify><I>(h)&nbsp; Inventory </I></P>
<P align=justify>Inventory is valued at the lower of cost and net realizable
value. Cost is determined on a weighted average basis and includes direct labour
and materials; non-capitalized stripping costs; depreciation; freight; and
overhead costs. Net realizable value is determined with reference to relevant
market prices, less applicable variable selling costs and estimated remaining
costs of completion to bring the inventory into its saleable form. </P>
<P align=justify>Work in process represents stockpiled ore and metals in the
processing circuits that have not yet completed the production process, and are
not yet in a saleable form. Finished goods inventory represents metals in
saleable form that have not yet been sold. Materials and supplies inventories
represent consumables used in the production process, as well as spare parts and
other maintenance supplies that are not classified as capital items. </P>
<P align=justify>The quantity of recoverable metal in stockpiled ore and in the
processing circuits is an estimate which is based on the tons of ore added and
removed, expected grade and recovery. The quantity of recoverable metal in
concentrate is an estimate using initial assay results. </P>
<P align=justify><I>(i)&nbsp; Property, plant and equipment </I></P>
<P align=justify><I>Land, buildings, plant and equipment </I></P>
<P align=justify>Land, buildings, plant and equipment are recorded at cost,
including all expenditures incurred to prepare an asset for its intended
use.</P>
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  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Repairs and maintenance costs are charged to expense as
incurred, except when these repairs significantly extend the life of an asset or
result in an operating improvement. In these instances, the portion of these
repairs relating to the betterment is capitalized as part of plant and
equipment. </P>
<P align=justify>Depreciation is based on the cost of the assets less residual
value. Where an item of plant and equipment is comprised of major components
with different useful lives, the components are accounted for as separate items
and depreciated separately. Depreciation commences when an asset is available
for use. Estimates of remaining useful lives and residual values are reviewed
annually. Changes in estimates are accounted for prospectively. </P>
<P align=justify>The depreciation rates of the major asset categories are as
follows: </P>
<DIV align=center>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="70%">

  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Land </TD>
    <TD bgColor=#e6efff width="50%" align=right>Not depreciated </TD></TR>
  <TR vAlign=top>
    <TD align=left>Buildings </TD>
    <TD width="50%" align=right nowrap>Straight-line basis over 10-25 years </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Plant and equipment </TD>
    <TD bgColor=#e6efff width="50%" align=right>Units-of-production basis
  </TD></TR>
  <TR vAlign=top>
    <TD align=left>Mining equipment </TD>
    <TD width="50%" align=right>Straight-line basis over 5-20 years </TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Light vehicles and other mobile equipment    </TD>
    <TD bgColor=#e6efff width="50%" align=right>Straight-line basis over 2-5
      years </TD></TR>
  <TR vAlign=top>
    <TD align=left>Furniture, computer and office equipment </TD>
    <TD width="50%" align=right>Straight-line basis over 2-3 years
  </TD></TR></TABLE></DIV>
<P align=justify><I>Mineral properties </I></P>
<P align=justify>Mineral properties consist of the cost of acquiring and
developing mineral properties. Once in production, mineral properties are
amortized on a units-of-production basis. </P>
<P align=justify>Acquisition costs arise either as an individual asset purchase
or as part of a business combination, and may represent a combination of either
proven and probable reserves, resources, or future exploration potential. The
estimated fair values attributable to proven and probable reserves and resources
are recorded as mineral properties within property, plant and equipment.
Exploration potential is recorded as an intangible asset. </P>
<P align=justify>Mineral property development costs include: stripping costs
incurred in order to provide initial access to the ore body; stripping costs
incurred during production that generate a future economic benefit by increasing
the productive capacity or extending the productive life of the mine;
capitalized exploration and evaluation costs; and capitalized interest.</P>
<P align=justify><I>Construction in progress </I></P>
<P align=justify>Construction in progress includes the purchase price and any
costs directly attributable to bringing the asset to the location and condition
necessary for its intended use. Construction in progress includes advances on
long-lead items. Construction in progress is not depreciated. Once the asset is
complete and available for use, the costs of construction are transferred to the
appropriate category of property, plant and equipment, and depreciation
commences. </P>
<P align=justify><I>Capitalized interest </I></P>
<P align=justify>Interest is capitalized for qualifying assets. Qualifying
assets are assets that require a substantial period of time to prepare for their
intended use. Capitalization ceases when the asset is substantially complete or
if construction is interrupted for an extended period. Where the funds used to
finance a project form part of general borrowings, the amount capitalized is
calculated using a weighted average of rates applicable to relevant general
borrowings of the Company during the period.</P>
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  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>Leased assets </I></P>
<P align=justify>Leased assets in which the Company receives substantially all
the risks and rewards of ownership of the asset are capitalized as finance
leases at the lower of the fair value of the asset or the estimated present
value of the minimum lease payments. The corresponding lease obligation is
recorded within debt on the balance sheet. Assets under operating leases are not
capitalized and rental payments are included in earnings. </P>
<P align=justify><I>Impairment </I></P>
<P align=justify>The carrying amounts of the Company&#146;s non-financial assets are
reviewed for impairment whenever circumstances suggest that the carrying value
may not be recoverable. If such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment, if any.
These assessments require the use of estimates and assumptions such as long-term
commodity prices, discount rates, future capital requirements, exploration
potential and operating performance.</P>
<P align=justify>The recoverable amount of an asset or cash generating unit
(CGU) is the higher of fair value less costs to sell and value in use. Fair
value is determined as the amount that would be obtained from the sale of the
asset in an arm&#146;s-length transaction between knowledgeable and willing parties.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets that cannot be tested individually are
grouped together into the smallest group of assets that generates cash inflows
that are largely independent of the cash flows of other assets or CGU&#146;s. If the
recoverable amount of an asset or its related CGU is estimated to be less than
its carrying amount, the carrying amount of the asset or CGU is reduced to its
recoverable amount and the impairment loss is recognized in earnings for the
period.</P>
<P align=justify>Where an impairment loss subsequently reverses, the carrying
amount of the asset or CGU is increased to the revised estimate of its
recoverable amount, but not to an amount that exceeds the carrying amount that
would have been determined had no impairment loss been recognized for the asset
or CGU in prior years. A reversal of an impairment loss is recognized
immediately in earnings. </P>
<P align=justify><I>(j) &nbsp;Intangible assets </I></P>
<P align=justify>Mineral property acquisition costs arise either as an
individual asset purchase or as part of a business combination, and may
represent a combination of either proven and probable reserves, resources, or
future exploration potential. When management has not made a determination that
there is probable future economic benefit and the property is not imminently
expected to move into development, the entire amount is considered acquired
exploration potential and is classified as an intangible asset. When such
property moves into development, the acquired exploration intangible asset is
transferred to non-depreciable mineral properties within property, plant and
equipment. </P>
<P align=justify><I>(k)&nbsp; Income taxes </I></P>
<P align=justify>Income tax on the earnings for the periods presented comprises
current and deferred tax. Income tax is recognized in earnings except to the
extent that it relates to items recognized directly in equity or in other
comprehensive income. Income tax is calculated using tax rates enacted or
substantively enacted at the reporting date applicable to the period of expected
realization or settlement. </P>
<P align=justify>Current tax expense is the expected tax payable on the taxable
income for the year, adjusted for amendments to tax payable with regards to
previous years. </P>
<P align=justify>Deferred tax is determined using the balance sheet liability
method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. The following temporary differences are not provided for: the
initial recognition of assets or liabilities acquired (not in a business combination) that affect neither
accounting nor taxable profit on acquisition; and differences relating to
investments in subsidiaries, associates, and joint ventures to the extent that
they are not probable to reverse in the foreseeable future. The amount of
deferred tax provided is based on the expected manner of realization or
settlement of the carrying amount of assets and liabilities. A deferred tax
asset is recognized only to the extent that it is probable that future taxable
profits will be available against which the asset can be utilized. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent it is
no longer probable that the related tax benefit will be realized.</P>
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  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(l) &nbsp;Share-based compensation </I></P>
<P align=justify>The fair-value method of accounting is used for the Company&#146;s
share option plan. Fair value is measured at grant date using the Black-Scholes
option pricing model and is recognized in earnings on a graded amortization
basis over the option vesting period, with a corresponding increase in equity.
The amount recognized as an expense is adjusted to reflect the actual number of
share options that are expected to vest.<B> </B></P>
<P align=justify><I>(m)&nbsp; Provisions </I></P>
<P align=justify><I>Environmental rehabilitation </I></P>
<P align=justify>The Company records the present value of estimated costs of
legal and constructive obligations required to retire an asset in the period in
which the obligation occurs. Environmental rehabilitation activities include
facility decommissioning and dismantling; removal and treatment of waste
materials; site and land rehabilitation, including compliance with and
monitoring of environmental regulations; and related costs required to perform
this work and/or operate equipment designed to reduce or eliminate environmental
effects. The provision for environmental rehabilitation (PER) is adjusted each
period for new disturbances, and changes in regulatory requirements, the
estimated amount of future cash flows required to discharge the liability, the
timing of such cash flows and the pre-tax discount rate specific to the
liability. The unwinding of the discount is recognized in earnings as a finance
cost.</P>
<P align=justify>When a PER is initially recognized, the corresponding cost is
capitalized by increasing the carrying amount of the related asset, and is
amortized to earnings on the same basis as the related asset. Costs are only
capitalized to the extent that the amount meets the definition of an asset and
represents future economic benefits to the operation.</P>
<P align=justify>Significant estimates and assumptions are made in determining
the provision for environmental rehabilitation as there are numerous factors
that will affect the ultimate liability payable. These factors include
estimation of the extent and cost of rehabilitation activities; timing of future
cash flows that are impacted by changes in discount rates; inflation rate; and
regulatory requirements. </P>
<P align=justify><I>Other provisions </I></P>
<P align=justify>Other provisions are recognized when the Company has a present
obligation (legal or constructive) that has arisen as a result of a past event
and it is probable that a future outflow of resources will be required to settle
the obligation, provided that a reliable estimate can be made of the amount of
the obligation. Where the effect is material, the provision is discounted using
a pre-tax rate that reflects current market assessments of the time value of
money and the risk specific to the obligation. The accretion expense is included
in finance expense. </P>
<P align=justify><I>(n)&nbsp; Finance income and expenses </I></P>
<P align=justify>Finance income comprises interest income on funds invested,
gains on the disposal of marketable securities, and changes in the fair value of
derivatives included in cash and equivalents and marketable securities. Interest
income is recognized as it accrues in earnings, using the effective interest
method.</P>
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  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Finance expenses comprise interest expense on borrowings,
unwinding of the discount on provisions, losses on the disposal of marketable
securities, changes in the fair value of derivatives included in cash and
equivalents and marketable securities, and impairment losses recognized on
financial assets. Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset are recognized in
earnings using the effective interest method.</P>
<P align=justify>Foreign currency gains and losses are reported on a net basis.
</P>
<P align=justify><I>(o) &nbsp;Earnings (loss) per share </I></P>
<P align=justify>The Company presents basic and diluted earnings (loss) per
share data for its common shares, calculated by dividing the earnings (loss)
attributable to common shareholders of the Company by the weighted average
number of common shares outstanding during the period. Diluted earnings per
share is determined by adjusting the earnings attributable to common
shareholders and the weighted average number of common shares outstanding for
the effects of all dilutive potential common shares, which comprise preferred
shares and share options granted. </P>
<P align=justify><I>(p)&nbsp; New accounting standards </I></P>
<P align=justify><I>Consolidated Financial Statements</I></P>
<P align=justify>In May 2011, the IASB issued IFRS 10, <I>Consolidated Financial
Statements</I> and IFRS 12, <I>Disclosure of Interests in Other Entities</I>.
IFRS 10 establishes principles for the presentation and preparation of
consolidated financial statements when an entity controls one or more other
entities. This standard defines the principle of control and establishes control
as the basis for determining which entities are consolidated in an entity&#146;s
consolidated financial statements. IFRS 10 sets out three elements of control:
a) power over the investee; b) exposure, or rights, to variable returns from
involvement with the investee; and c) the ability to use power over the investee
to affect the amount of the investors return. IFRS 10 sets out the requirements
on how to apply the control principle. IFRS 12 outlines the disclosure
requirements for interests in subsidiaries and other entities to enable users to
evaluate the risks associated with interests in other entities and the effects
of those interests on an entity&#146;s financial position, financial performance and
cash flows. IFRS 10 and IFRS 12 supersede IAS 27, <I>Consolidated and Separate
Financial Statements</I> and SIC-12, <I>Consolidation &#150; Special Purpose
Entities</I>.</P>
<P align=justify>IFRS 10 and IFRS 12 are effective for annual periods beginning
on or after January 1, 2013, with earlier application permitted. The Company is
currently assessing the impact of these standards on its financial
statements.</P>
<P align=justify><I>Joint Arrangements</I></P>
<P align=justify>In May 2011, the IASB issued IFRS 11, <I>Joint
Arrangements</I>, which provides guidance on accounting for joint arrangements.
If an arrangement has joint control, IFRS 11 classifies joint arrangements as
either joint operations or joint ventures, depending on the rights and
obligations of the parties involved.</P>
<P align=justify>A joint operation is an arrangement where the jointly
controlling parties have rights to the assets and obligations in respect of the
liabilities relating to the arrangement. An entity accounts for a joint
operation by recognizing its portion of the assets, liabilities, revenues and
expenses. A joint venture is an arrangement where the jointly controlling
parties have rights to the net assets of the arrangement. A joint venture is
accounted for using the equity method. Proportionate consolidation is no longer
permitted. </P>
<P align=justify>This standard is effective for annual periods beginning on or
after January 1, 2013, with early adoption permitted. The Company is currently
assessing the impact that IFRS 11 will have on its consolidated financial
statements.</P>
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  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>Fair Value Measurement</I></P>
<P align=justify>In May 2011, the IASB issued IFRS 13, <I>Fair Value
Measurement</I>. This standard defines fair value, sets out a single IFRS
framework for measuring fair value and outlines disclosure requirements about
fair value measurements. IFRS 13 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Fair value is a
market-based measurement, not an entity-specific measurement, so assumptions
that market participants would use should be applied in measuring fair
value.</P>
<P align=justify>IFRS 13 is effective for annual periods on or after January 1,
2013, with earlier application permitted. This standard is to be applied
prospectively as of the beginning of the annual period in which it is initially
applied and the disclosure requirements do not need to be applied in comparative
periods before initial application. The Company is currently assessing the
impact of this standard on its financial statements.</P>
<P align=justify><I>Other Comprehensive Income</I></P>
<P align=justify>In June 2011, the IASB and FASB issued amendments to standards
to align the presentation requirements for other comprehensive income (OCI). The
IASB issued amendments to IAS 1, <I>Presentation of Financial Statements</I> to
require companies preparing financial statements under IFRS to group items
within OCI that may be reclassified to the profit or loss. The amendments also
reaffirm existing requirements that items in OCI and profit or loss should be
presented as either a single statement or two consecutive statements.</P>
<P align=justify>The amendments to IAS 1 set out in <I>Presentation of Items of
Other Comprehensive Income </I>are effective for fiscal years beginning on or
after July 1, 2012. The Company is currently assessing the impact of these
amendments on its financial statements. </P>
<P align=justify><I>Production Stripping Costs </I></P>
<P align=justify>In October 2011, the IASB issued International Financial
Reporting Interpretation Committee (IFRIC) 20, <I>Stripping Costs in the
Production Phase of a Surface Mine</I>. This interpretation requires the
capitalization and depreciation of stripping costs from the production phase of
a mine if an entity can demonstrate that it is probable that future economic
benefits will be realized, that costs can be reliably measured, and that the
component of the ore body for which access has been improved can be identified.
This interpretation is effective for annual periods beginning on or after
January 1, 2013. The Company is currently assessing the impact of this
interpretation on its financial statements. </P>
<P align=justify><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INTEREST
IN JOINT VENTURE </B></P>
<P align=justify>On March 31, 2010, the Company entered into an agreement with
Cariboo Copper Corp. (Cariboo) whereby the Company contributed certain assets
and liabilities of the Gibraltar mine into an unincorporated joint venture and
Cariboo paid the Company $186,811 to acquire a 25% interest in the joint
venture. The Company recognized a gain on contribution to the joint venture of
$98,157 in 2010.</P>
<P align=justify>The assets and liabilities contributed by the Company to the
joint venture were mineral property interests, plant and equipment, inventory,
prepaid expenses, reclamation deposits, capital lease obligations, and site
closure and reclamation obligations. Certain key strategic, operating, investing
and financing policies of the joint venture require unanimous approval such that
neither venturer is in a position to exercise unilateral control over the joint
venture. The Company continues to be the operator of the Gibraltar mine. </P>
<P align=justify>During 2011, the construction of the SAG direct feed system was
completed. Under the terms of agreement with Cariboo, the Company assumed 100%
of the capital costs in excess of the capital budget for the SAG direct feed
system at the joint venture formation. The Company recognized a net loss on
contribution to the joint venture of $3,987 during 2011 as a result of funding Cariboo&#146;s portion of
the SAG direct feed system project costs above the 2010 budgeted amount. </P>
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    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Summary financial information for the joint venture on 100%
basis: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Current assets </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;99,957 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;130,284 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Non-current assets </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;991,166 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;862,962 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Current liabilities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;59,095 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;46,440 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">Non-current
      liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;156,153 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;108,197 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>From Inception</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>on March 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>Year ended</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>2010 to</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenues </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;335,822 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;259,160 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff align=left>Expenses </TD>
    <TD bgColor=#ffffff  width="1%" align=left>$</TD>
    <TD bgColor=#ffffff width="12%" align=right>&nbsp;244,735 </TD>
    <TD bgColor=#ffffff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#ffffff  width="1%" align=left>$</TD>
    <TD bgColor=#ffffff width="12%" align=right>&nbsp;157,167 </TD>
    <TD bgColor=#ffffff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Net income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;91,087 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;101,993 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P
align=justify><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REVENUE
</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper concentrate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;227,140 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;258,932 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Copper cathode </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>6,936
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3,987
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Total copper sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;234,076 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;262,919 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum concentrate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,317 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,656 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Silver contained in copper concentrate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,473 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2,885 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;251,866 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;278,460 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>As a result of the formation of a joint venture on March 31,
2010 (note 3), the 2010 comparatives include 100% of the Gibraltar mine&#146;s
results through to March 31, 2010 and 75% of the Gibraltar mine&#146;s results
thereafter. </P>
<P align=justify><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; COST OF
SALES </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Direct mining costs </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;125,536 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;120,810 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Depreciation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,145 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,655 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Treatment and refining costs </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,632 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,563 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Transportation costs </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13,108 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>16,275 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Changes in inventories of finished goods and work in process    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,144 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,544</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;165,565 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;157,759 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>As a result of the formation of a joint venture on March 31,
2010 (note 3), the 2010 comparatives include 100% of the Gibraltar mine&#146;s
results through to March 31, 2010 and 75% of the Gibraltar mine&#146;s results
thereafter. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_20></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Cost of sales consists of direct mining costs (which include
personnel costs, mine site general &amp; administrative costs, non-capitalized
stripping costs, repair &amp; maintenance costs, operating supplies and external
services), depreciation, and offsite costs comprised of treatment &amp; refining
costs and transportation costs. </P>
<P align=justify><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
COMPENSATION EXPENSE </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Wages, salaries and benefits </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;42,314 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;39,254 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Post-employment benefits </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,135 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>666 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Share-based compensation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>8,215 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>9,260 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;51,664 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;49,180 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>As a result of the formation of a joint venture on March 31,
2010 (note 3), the 2010 comparatives include 100% of the Gibraltar mine&#146;s
results through to March 31, 2010 and 75% of the Gibraltar mine&#146;s results
thereafter. </P>
<P align=justify>Compensation expense is presented as a component of cost of
sales, general and administrative expense, and exploration and evaluation
expense.</P>
<P
align=justify><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTHER
OPERATING INCOME (EXPENSES)</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Realized loss on copper derivative instruments
    </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(9,910</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;(12,200</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap>Unrealized gain on copper derivative instruments </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>22,944 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,877 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Consulting expenses </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(6,322</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Impairment of plant and equipment </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,377</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Management fee income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>840 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>648 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;5,175 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(2,675</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
  </TR>
</TABLE>
<P align=justify>Consulting expenses are related to the consultants engaged to
  work with the Gibraltar management team to achieve improvements in operational
  performance. </P>
<P align=justify>Certain plant and equipment was deemed redundant upon
completion of the SAG direct feed project during 2011 which resulted in an
impairment charge. The Company has also identified other assets for which there
are no longer plans to utilize under the current life-of-mine plan, and which
were therefore included in the impairment charge. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_21></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FINANCE
EXPENSES </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest expense </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;13,957 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4,542 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Accretion on PER (note 18) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,046 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,936 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Loss on extinguishment of debt and royalty
      obligations (note 17b &amp; 19d) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,136 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Foreign exchange loss
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>6,489
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,133
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;22,492 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;10,747 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;FINANCE
INCOME </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest income </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;6,859 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;14,933 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap>Change in fair value of financial instruments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(307</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(25</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Gain on sale of shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,995 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,087 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income realized on dual currency deposits </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,275 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>577 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Dividend income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>448 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;17,270 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;19,572 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INCOME TAX </B></P>
<P align=justify><I>(a)&nbsp; &nbsp;Income tax expense </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Current income tax: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Current period </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;6,166 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;3,539 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp; &nbsp;Adjustments
      recognized for current tax of prior periods </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(164</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>567 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;6,002 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;4,106 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Deferred income tax: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Origination and reversal of temporary
      differences </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;17,906 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;43,392 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;Adjustments recognized for deferred tax of prior periods    </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,621 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Reduction in tax rate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(126</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,615</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;17,780 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;42,398 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;23,782 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;46,504 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>During the year ended December 31, 2011, the Company recognized
recoveries of income tax of $907 (2010: $22,523) and interest expense of $208
(2010: $8,098) associated with the reversal of historical tax reserves dating
back to 2006 (2010: 2005). </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_22></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(b)&nbsp;&nbsp; Income tax recognized directly in OCI
</I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Unrealized gains (losses) on available-for-sale
      financial assets, before tax </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;(2,744</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;5,999 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Tax (expense) benefit
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>343 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(750</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;Unrealized gains (losses) on available-for-sale financial
      assets, net of tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(2,401</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;5,249 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Realized gains (losses) on available-for-sale financial assets,
      before tax </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap>&nbsp;(5,995</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap>&nbsp;(4,087</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Tax (expense) benefit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>749 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>511 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Realized gains
      on available-for-sale financial assets, net of tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(5,246</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;(3,576</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Total other comprehensive income (loss) for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;(7,647</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,673 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>(c)&nbsp; &nbsp;Effective tax rate reconciliation </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Income tax at Canadian statutory rate of 26.5%
      (2010: 28.5%) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;13,450 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;55,820 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Permanent differences </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,335 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>(20,367</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Mineral tax </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>7,419 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>14,180 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Future tax rate differences </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(126</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(3,615</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrecognized tax benefits </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,366 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Other </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(662</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>486 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Income tax at the effective tax rate of 46.9% (2010: 23.7%) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;23,782 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;46,504 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>(d)&nbsp; &nbsp;Deferred tax assets and liabilities </I></P>
<P align=justify>Deferred tax assets and liabilities are attributable to the
following: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Property, plant and equipment </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(98,568</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(79,730</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(46,617</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>Financial instruments at fair value through profit or loss    </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(7,196</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>651 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,210 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Available-for-sale financial assets </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>200 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(893</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(654</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Debt </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(751</TD>
    <TD width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Provisions </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,845 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>7,497 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,423 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Other </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>11,149 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,868 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>10,523 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Tax loss carryforwards </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>479 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>89 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>8,986 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(76,091</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(59,518</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(16,880</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>)
  </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_23></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>e)&nbsp;&nbsp; Unrecognized deferred tax assets and
liabilities </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>Deductible temporary differences: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Debt </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,366 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>Deferred tax assets have not been recognized in respect of
these items because it is not probable that future taxable profit will be
available against which the Company can utilize the benefits. There are no
unrecognized tax liabilities. </P>
<P align=justify><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ACCOUNTS RECEIVABLE
</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Trade receivables </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;29,891 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;17,443 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;10,802 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>Other receivables due from related parties (note 26) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>241 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,764 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Harmonized sales tax receivable </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,767 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,956 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,378 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>BC mineral exploration tax credit </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,610 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Other receivables </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>755 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>325 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;39,909 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;21,918 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;12,505 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OTHER FINANCIAL
ASSETS </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Dual currency deposits &gt; 3-month
      term </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;40,602 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;Copper put option contracts (note 25e) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25,407 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>433 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,928 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Shares &#150; available for sale </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,898 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,922 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,856 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Promissory note (note 17a) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,190 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>7,248 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,697 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Short-term investments </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>50 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Warrants </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>599 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Restricted cash </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,153 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;86,147 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;26,202 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;21,634 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Long-term: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capped floating rate notes </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;20,055 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Reclamation deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>24,962 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>23,266 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>29,421 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Promissory
      note (note 17a) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>66,624 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>70,559 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>73,400 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;111,641 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;93,825 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;102,821 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>Reclamation deposits are invested in government bonds and
treasury bills bearing interest in the range of 1.4% to 4.7% . </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_24></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><B>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INVENTORIES </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Work in process </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,154 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,514 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,896 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Finished goods </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Copper concentrate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>6,063 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>7,515 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,831 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Copper cathode </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>179 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>982 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>178 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Molybdenum concentrate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>244 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>53 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>70 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Materials and
      supplies </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>15,650 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>11,222 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>13,817 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;23,290 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;21,286 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;21,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>In<I> </I>2011, materials and supplies inventories was written
down by $446 (2010: $536). This writedown is included in cost of sales. The net
realizable value of the materials and supplies inventories after the writedown
was nil (2010: nil; January 1, 2010: nil). </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_25></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><B>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PROPERTY, PLANT
&amp; EQUIPMENT </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>Mineral </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>Plant and </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">properties<SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>CIP
      <SUP>4</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>Total
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Cost</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>At January 1, 2010 </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;112,326 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;229,431 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;64,671 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;406,428 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Additions </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>14,641 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>29,124 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>36,086 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>79,851 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Contribution to joint venture <SUP>2</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(28,127</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(57,409</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(17,896</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(103,432</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Transfers between categories <SUP>4</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>65,271 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(65,271</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>At December 31, 2010 </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;98,840 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;266,417 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;17,590 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;382,847 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Additions </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>44,465 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>27,778 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>45,391 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>117,634 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capitalized interest <SUP>3</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>874 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>874 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Impairments </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(3,673</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(3,673</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Transfers
      between categories <SUP>4</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>13,150 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(13,150</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>At
      December 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;143,305 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;303,672 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;50,705 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;497,682 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap><B>Accumulated depreciation and impairments</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>At January 1, 2010 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;13,969 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;26,160 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;40,129 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Depreciation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,832 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>9,583 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13,415 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Contribution to joint venture <SUP>2</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,799</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(7,995</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(11,794</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>At December 31, 2010 </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;14,001 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;27,748 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;41,749 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Depreciation </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,782 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,882 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>16,664 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Impairments
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(1,296</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(1,296</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>At
      December 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;17,783 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;39,334 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;57,117 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Carrying amounts</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>At
      January 1, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;98,357 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;203,271 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;64,671 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;366,299 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>At December 31,
      2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;84,839 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;238,669 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;17,590 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;341,098 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>At
      December 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;125,522 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;264,338 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;50,705 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;440,565 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><SUP>1 </SUP>Mineral properties consists of the cost of
acquiring and developing mineral properties. Development costs include
capitalized stripping costs, capitalized exploration and evaluation costs,
capitalized interest, and rehabilitation cost asset.<SUP> <BR></SUP><SUP>2.
</SUP>On March 31, 2010, the Company contributed certain assets and liabilities
of the Gibraltar mine into an unincorporated joint venture in which the Company
retains a 75% interest.<SUP> <BR></SUP><SUP>3</SUP> The capitalization rate for
the period was 5.77% .<SUP> <BR></SUP><SUP>4. </SUP>Construction in process
(CIP) is transferred to the relevant category of property, plant and equipment
once the asset is available for use. </P>
<P align=justify><I>(a)&nbsp; &nbsp;Leased assets</I></P>
<P align=justify>The Company leases mining equipment under a number of capital
lease agreements. Some leases may not be terminated by the Company prior to the
end of its term. Most of the leases provide the Company with the option to
purchase the equipment at a beneficial price. One lease contains a mandatory
purchase provision. Certain rents are based on an annual average usage for the
applicable equipment and, if at the end of the term (unless the equipment has
been purchased by the Company), the actual annual average usage of such
equipment has been greater than the specified usage, the Company must pay an
additional amount for each excess hour of actual usage. The leased assets secure
the lease obligations (note 19). </P>
<P align=justify>At December 31, 2011, the net carrying amount of leased assets
was $29,606 (2010: $25,883; January 1, 2010: $17,889). </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_26></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(b)&nbsp;&nbsp; Change in estimates</I></P>
<P align=justify>Certain items of property, plant and equipment at the Gibraltar
mine which management previously expected to remain in production for the life
of mine are now expected to be replaced by assets constructed and/or purchased
as part of an expansion project at the mine. As a result the expected useful
lives of these assets decreased. The estimated effect of these changes on
depreciation expense, recognized in cost of sales, in current and future periods
is as follows: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="8%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="8%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2012</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="8%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="8%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2014</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="8%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2015</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="8%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Later</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
      <TD
    align=left vAlign=bottom nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >Estimated increase (decrease) in depreciation expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="8%" align=right>&nbsp;281 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD
    width="8%" align=right vAlign=bottom nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;2,937 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="8%" align=right>&nbsp;1,108 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="8%" align=right>&nbsp;405 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="8%" align=right>&nbsp;405 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD
    width="8%" align=right vAlign=bottom nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(5,136</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="2%" align=left>) </TD></TR></TABLE></DIV>
<P align=justify><B>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INTANGIBLE ASSETS
</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Aley niobium property </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;5,436 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;5,436 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;5,436 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>Prosperity gold-copper property <SUP>1</SUP> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Harmony gold property <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;5,438 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;5,438 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;5,438 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><SUP>1. </SUP>Carrying amounts for Prosperity and Harmony
represent the original mineral property acquisition costs less historical
impairments. </P>
<P align=justify><B>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Trade payables </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;31,055 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;20,628 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;12,663 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>Other payables due to related parties (note 26) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>44 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>154 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest payable </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,351 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>47 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>124 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Other payables
      <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,839
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,967
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>5,193
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;36,289 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;23,796 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;17,993 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><SUP>1. </SUP>Includes amounts owing as a result of settlement
of copper call option contracts. The balance as at December 31, 2011 was $ nil
(2010: $658; January 1, 2010: $3,160). </P>
<P align=justify><B>17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OTHER FINANCIAL
LIABILITIES </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Current: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Royalty obligations </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;8,190 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;7,248 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;11,208 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Copper call
      option contracts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,607
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>17,703 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;10,797 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;7,248 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;28,911 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Long-term: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Royalty obligations </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;44,594 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;51,645 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;57,621 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;
      &nbsp;Income tax obligations (note 10a) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,386
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,499
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>32,300 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;45,980 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;54,144 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;89,921 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_27></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(a)&nbsp;&nbsp; Red Mile royalty obligations and promissory
note </I></P>
<P align=justify>In September 2004, the Company sold a royalty on the Gibraltar
mine&#146;s copper production to Red Mile Resources No. 2 Limited Partnership (Red
Mile), an unrelated investment partnership, for $67,357. The proceeds were
invested with a trust company in a promissory note (note 12) and the Company
pledged the promissory note, along with interest earned thereon, as security for
its royalty obligations. </P>
<P align=justify>Pursuant to the agreements, the Company received fees and
interest for services performed in relation to the Red Mile transaction,
including $1,750 for indemnifying an affiliate of Red Mile from any claims
relating to a breach by the Company under the royalty agreement. The
indemnification funds received were recorded as deferred revenue and will be
recognized as income over the expected remaining life of the royalty agreement.
</P>
<P align=justify>Annual royalties are payable to Red Mile at rates ranging from
$0.01 to $0.14 per pound of copper produced during the period from the
commencement of commercial production (as defined in the agreement) to the
latter of (i) December 2014 and (ii) five years after the end of commercial
production from the mine. Funds held in the promissory note are released to
satisfy the annual royalty payment. </P>
<P align=justify>The Company has a pre-emptive option to effectively purchase
(call) the royalty interest by acquiring the Red Mile partnership units in
consideration of a payment which is (i) approximately equal to the funds
received by the Company less royalty payments to date, or (ii) fair value,
whichever is lower. Under certain circumstances, the investors in Red Mile also
have a right to sell (put) their Red Mile partnership units to the Company at
fair value; however, such right is subject to the Company&#146;s pre-emptive right to
exercise the &#147;call&#148; in advance of any &#147;put&#148; being exercised and completed. </P>
<P align=justify>The Company has granted to Red Mile a net profits interest
(NPI) which survives any &#147;put&#148; or &#147;call&#148; of the Red Mile units. The NPI is
applicable for the years 2011 to 2014 and ranges from 2% to 4%, depending on the
average copper price each year adjusted for variations in foreign currency
exchange rates. No NPI is payable until the Company reaches a pre-determined
aggregate level of revenues less defined operating costs and expenditures and,
as at December 31, 2011, this threshold has not yet been met. </P>
<P align=justify><I>(b)&nbsp; &nbsp;Gibraltar Royalty LP royalty obligations
</I></P>
<P align=justify>In 2009, the Company sold a production royalty to Gibraltar
Royalty Limited Partnership (GRLP), an unrelated investment partnership. Annual
royalties were payable to GRLP at rates ranging from $0.003 to $0.004 per pound
of copper produced from the Gibraltar mine during the period from September 1,
2009 through December 31, 2030. The Company had a pre-emptive option to
repurchase (call) the royalty obligation by acquiring the GRLP partnership
units. On March 24, 2010, the Company exercised its &#147;call&#148; and settled the
royalty obligation of $6,511. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_28></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><B>18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PROVISIONS </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>Environmental </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>rehabilitation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>At January 1, 2010 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;50,700 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Additions during the year </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>304 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Contribution to joint venture
      <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(12,866</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Change in estimates </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13,146 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Used during the year </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(91</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Unwind of
      discount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,936
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>At January 1, 2011 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>53,129 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Additions during the year </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>171 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Change in estimates </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>43,345 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Used during the year </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,670</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Unwind of discount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2,046 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>At December 31,
      2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;96,022 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Long-term </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>96,022 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Current </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;96,022 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><SUP>1. </SUP>On March 31, 2010, the Company contributed
certain assets and liabilities of the Gibraltar mine into an unincorporated
joint venture in which the Company retains a 75% interest.<SUP> </SUP></P>
<P align=justify>The PER represents the present value of estimated costs of
legal and constructive obligations required to retire an asset. The PER has been
recognized based on the Company&#146;s internal estimates. Assumptions, based on the
current economic environment, have been made which management believes are a
reasonable basis upon which to estimate the future liability. </P>
<P align=justify>The following significant estimates and assumptions were made
for the purpose of estimating the PER: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Pre-tax discount rate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3.1% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3.7% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4.1% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Inflation rate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2.0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2.0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2.0% </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Market risk adjustment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.5% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Number of years to mine closure </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>26 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>21 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>22 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Number of years over which rehabilitation occurs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>Estimates are reviewed regularly to take into account any
material changes to the assumptions. During 2011, the Company completed an
updated reserve estimate for the Gibraltar mine which extended the life of the
mine and deferred the expected timing of mine closure by six years. Furthermore,
there have been changes in discount rates and inflation rates during the current
period, which has had a significant impact on the PER. </P>
<P align=justify>In general, the expected cash flows become more reliable
towards the end of the mine&#146;s life, whereas the estimate of a PER at the
beginning of the mine&#146;s life is more subjective. Actual rehabilitation costs
will ultimately depend upon future market prices for the necessary
decommissioning works required which will reflect market conditions at the
relevant time. Furthermore, the timing of rehabilitation is likely to depend on
when the mine ceases to produce at economically viable rates. This, in turn,
will depend upon future metal prices which are inherently uncertain. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_29></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>As required by the regulatory authorities, before commencing
work on a project or mine, the Company posts a security which is held in trust
by the regulatory authorities. These reclamation deposits (note 12) are returned
only once the site is reclaimed to a satisfactory level and there are no ongoing
monitoring or maintenance requirements. For the Gibraltar mine, the Company has
also issued an irrevocable standby letter of credit for $10 million as part of
its security with the regulatory authorities. </P>
<P align=justify><B>19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DEBT </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Current: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capital leases </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;6,925 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;5,354 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;3,750 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Secured equipment loans </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>6,828 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,961 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,032 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Credit
      facility </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>21,896 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;13,753 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;10,315 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;27,678 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Long-term: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Senior notes </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;197,409 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capital leases </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,862 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,959 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>10,238 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Secured equipment loans </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>6,231 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>13,059 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>6,678 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Credit
      facility </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>29,609 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;218,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;28,018 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;46,525 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><I>(a)&nbsp; &nbsp;Senior notes</I><B><I> </I></B></P>
<P align=justify>In April 2011, the Company completed a public offering of
US$200 million in senior notes due in 2019, bearing interest at an annual rate
of 7.75% . The notes are guaranteed by the Company&#146;s subsidiaries and the
subsidiary guarantees are, in turn, guaranteed by the Company. </P>
<P align=justify>The Company may redeem some or all of the notes at any time on
or after April 15, 2015 at redemption prices ranging from 103.875% to 100% plus
accrued interest. Prior to April 15, 2015, the notes may be redeemed at 100%
plus a make-whole premium, plus accrued interest. In addition, until April 15,
2014, the Company may redeem up to 35% of the principal amount of notes, in an
amount not greater than the net proceeds of certain equity offerings, at a
redemption price of 107.75%, plus accrued interest.</P>
<P align=justify>The Company is subject to certain restrictions on asset sales,
payments, and incurrence of indebtedness and issuance of preferred stock.</P>
<P align=justify><I>(b)&nbsp; &nbsp;Capital leases</I><B><I> </I></B></P>
<P align=justify>Capital leases are are repayable in monthly installments with
fixed interest rates and are secured by plant and equipment with a carrying
value of $29,606 (2010: $25,883; January 1, 2010: $17,889). The capital lease
obligations bear fixed interest rates ranging from 5.93% to 8.80% and have
maturity dates ranging from 2012 to 2016. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_30></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(c)&nbsp; &nbsp;Secured equipment loans</I></P>
<P align=justify>The equipment loans are secured by equipment with a carrying
value of $26,899 (2010: $28,404; January 1, 2010: $11,269). The loans are
repayable in monthly installments and bear fixed interest rates ranging from
5.35% to 8.63% and have maturity dates ranging from 2012 to 2014. </P>
<P align=justify><I>(d)&nbsp;&nbsp; Credit facility</I></P>
<P align=justify>The Company had a US$50-million credit facility agreement
bearing interest at LIBOR plus 5 percent. The facility was repayable in equal
installments commencing April 2010 and every second month thereafter until
February 2012. During 2010, the Company repaid the facility and recorded a loss
of $834 as a result of writing off deferred finance costs. </P>
<P align=justify><B>20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EQUITY </B></P>
<P align=justify><I>(a)&nbsp; &nbsp;Share capital </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>Tracking </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>Common </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>preferred </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(thousands of
      shares) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>At January 1, 2010 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>182,925 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,484 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Issued on purchase of royalty interest (note 17b) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,556 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Issued as donation </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>225 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Exercise of
      share options </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,792
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>At January 1, 2011 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>187,498 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,484 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Issued for cash </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,000 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Exchange of tracking preferred shares
      for common shares (note 20b) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,916 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(12,484</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Exercise of
      share options </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,091
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left>At
      December 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>196,505 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>The Company&#146;s authorized share capital consists of an unlimited
number of common shares with no par value. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>January 1,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Common shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;378,393 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;338,911 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;323,734 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">Tracking preferred
      shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>26,642 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>26,642 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;378,393 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;365,553 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;350,376 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><I>(b)&nbsp;&nbsp; Equity issued </I></P>
<P align=justify>During the year ended December 31, 2011, the Company sold one
million of its common shares through at-the-market issuance for net proceeds of
$5,559. </P>
<P align=justify>During the year ended December 31, 2011, Continental Minerals
Corporation (&#147;Continental&#148;) completed its previously-announced plan of
arrangement with Jinchuan Group Ltd. Pursuant to the plan of arrangement, the
outstanding preferred shares of Continental were exchanged for common shares of
the Company, resulting in the issuance of 5,916,241 common shares at a fair
value of $29,581 and the redemption of all of the outstanding tracking preferred
shares. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_31></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>On March 24, 2010, the Company issued 1,556,365 common shares
to repurchase a royalty held by Gibraltar Royalty Limited Partnership, an
unrelated investment partnership, on the Gibraltar mine&#146;s copper production. The
fair value of the shares issued exceeded the carrying value of the royalty
obligation, resulting in a charge of $1,302 to profit and loss. </P>
<P align=justify><I>(c)&nbsp;&nbsp; Contributed surplus </I></P>
<P align=justify>Contributed surplus represents employee entitlements to
share-based awards that have been charged to profit and loss in the periods
during which the entitlements were accrued and have not yet been exercised. </P>
<P align=justify><I>(d)&nbsp;&nbsp; Accumulated other comprehensive income
(&#147;AOCI&#148;) </I></P>
<P align=justify>AOCI is comprised of the cumulative net change in the fair
value of available-for-sale financial assets, net of taxes, until the
investments are sold or impaired. </P>
<P align=justify><B>21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SHARE-BASED
COMPENSATION </B></P>
<P align=justify>The Company has a share option plan (equity settled) approved
by the shareholders that allows it to grant options to directors, officers,
employees and other service providers. Under the plan, a maximum of 10% of the
Company&#146;s outstanding common shares may be granted. The exercise price of an
option is set at the time of grant using the five-day volume weighted average
price of the common shares. Options may have a term of up to ten years. Vesting
conditions of options is at the discretion of the Board of Directors at the time
the options are granted.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(thousands of
      options) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">Options </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">Average price </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Outstanding at January 1, 2010 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>10,385 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>1.39 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Granted </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,709 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4.63 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Exercised </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,792</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1.37 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Forfeited </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(188</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1.62 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Outstanding at January 1, 2011 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>11,114 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>2.47 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Granted </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,370 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5.16 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Exercised </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,091</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1.37 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Forfeited </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(98</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4.58 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Outstanding at December 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>11,295 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3.22 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Exercisable at
      December 31, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>8,683
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2.71
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>The weighted-average share price at the date of exercise for
share options exercised in 2011 was $4.18 (2010: $5.18) . </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>Options </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>Average life </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">Range of exercise
      price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">(thousands) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>$1.00 to $2.17 </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,996 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2.1 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>$3.07 to $4.77 </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,654 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2.3 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>$5.00 to $5.74 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2,645 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3.9 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>11,295 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2.6
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_32></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>The fair value at grant date of the share option plan was
measured based on the Black-Scholes formula. Expected volatility is estimated by
considering historic average share price volatility. The inputs used in the
measurement of the fair values at grant date of the share-based payment plans
are the following: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap>Key management personnel </TD>
    <TD width="2%" align=right>&nbsp;</TD>
    <TD width="1%" align=right>&nbsp;</TD>
    <TD colspan="4" align=right nowrap>Employees </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2011
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2011
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Weighted-average share price </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>5.01 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>4.60 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>4.98 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>5.05 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Expected term (years) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4.9 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>5.0 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3.0 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3.2 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Expected forfeiture rate </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Weighted-average expected volatility </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>77.0% </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>75.4% </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>83.8% </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>82.7% </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Expected dividend yield </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Risk-free interest
      rate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2.2%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2.7%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2.2%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1.8%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Weighted-average fair value per option </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3.11 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2.88 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2.69 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2.85 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EARNINGS PER SHARE
</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Year ended December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Net earnings </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;26,974 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;149,357 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Net earnings &#150;
      diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;26,974 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;149,357 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>(in thousands of common shares) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Weighted-average number of common shares <SUP>1</SUP> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>193,213 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>186,103 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Dilutive securities: </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Effect of share options </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,535 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>10,626 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Effect of tracking preferred shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>6,277 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">Weighted-average number
      of diluted common shares <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">197,748 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">203,006 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>($ per common share) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Basic earnings per share</B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>0.14</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>0.80</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Diluted earnings per share</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>0.14</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>0.74</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1 .</SUP>The normal course issuer bid announced January
31, 2012 (see note 28) may reduce the number of common shares outstanding by up
to 10 million. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_33></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><B>23.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; COMMITMENTS AND
CONTINGENCIES </B></P>
<P align=justify><I>(a)&nbsp; &nbsp;Commitments </I></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right nowrap><B>&lt;1 year or</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=right><B>on</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>demand</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="11%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>1
      - 2 years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="11%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2
      - 5 years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="11%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>&gt;5 years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>At December 31, 2011</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >&nbsp;Capital lease liability
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;6,925 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;5,938 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;8,924 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;21,787 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp;Future interest charges </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>1,133
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>709
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>602
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>2,444
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Capital lease commitments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;8,058 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;6,647 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;9,526 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="11%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;24,231 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >Operating lease commitments<SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;1,377 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;117 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;145 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;1,639 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"
    >Capital expenditures commitments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;37,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="11%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;37,200 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left ><B>At December 31, 2010</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="11%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >&nbsp;Capital lease liability
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;5,354 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;5,394 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;9,565 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="11%" align=right>&nbsp;20,313 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp;Future interest charges </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>1,098
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>750
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>720
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%" align=right>2,568
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Capital lease commitments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;6,452 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;6,144 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;10,285 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;22,881 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >Operating lease commitments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;2,730 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;1,377 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;262 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="11%"
      align=right>&nbsp;4,369 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"
    >Capital expenditures commitments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;2,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>14,942 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="11%"
    align=right>&nbsp;16,942 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE></DIV>
<P align=justify>Operating leases are entered into as a means of acquiring
property, plant and equipment. Certain leases contain extension and renewal
options. </P>
<P align=justify>In respect of its interest in a joint venture, the joint
venture is committed to incur capital expenditures of $49,600 (2010: $21,923),
of which the Company&#146;s share of this commitment is $37,200 (2010: $16,942). </P>
<P align=justify>During the year ended December 31, 2011, an amount of $2,859
was recognized as an expense in profit or loss in respect of operating leases
(2010: $1,413).</P>
<P align=justify><I>(b)&nbsp; &nbsp;Contingencies </I></P>
<P align=justify>The Company has guaranteed 100% of certain debt entered into by
the Gibraltar joint venture in which it holds a 75% interest. As at December 31,
2011, this debt totaled $33,513 on a 100% basis. The Company has also guaranteed
its share of additional debt totaling $9,711 on 75% basis. </P>
<P align=justify><B>24.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SUPPLEMENTARY CASH
FLOW INFORMATION </B></P>
<P align=justify><I>(a)&nbsp;&nbsp; Cash and equivalents </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-TOP: #000000 1px solid"><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-TOP: #000000 1px solid"><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-TOP: #000000 1px solid"><B>January 1,</B> </TD>
  <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cash </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;217,338 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;191,901 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;24,572 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">Dual currency
      deposits &lt; 3-month term </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>60,454 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>19,892 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>10,510 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;277,792 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;211,793 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;35,082 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_34></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(b)&nbsp; &nbsp;Other items </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>For the year ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Change in non-cash working capital items</B>
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Accounts receivable </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right nowrap>&nbsp;(17,989</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;(9,413</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Inventories </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,005</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(4,730</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Accounts payable and accrued liabilities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,492 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>5,802 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Deferred revenue </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(175</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(175</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Other </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(4,671</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(9,777</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(12,348</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;(18,293</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Operating cash flows &#150; other items</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Non-cash donation expense </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;928 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Realized loss on copper derivative instruments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>9,910 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Reclamation expenditures </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,670</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(91</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Impairment of
      plant and equipment </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,377
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;9,617 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;837 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Investing cash flows &#150; other items</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Net cash reinvested in reclamation deposit
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(1,054</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(1,293</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Reclamation deposit </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(12</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Restricted cash </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,153 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(1,066</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;1,860 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Non-cash investing and financing activities</B>
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Shares issued for donation </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;928 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Assets acquired under capital lease </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;7,241 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;12,923 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;Shares issued for redemption of royalty obligation </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;7,813 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Shares issued for preferred shares redemption </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;26,642 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B>25.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL RISK
MANAGEMENT </B></P>
<P align=justify><I>(a)&nbsp; &nbsp;Overview </I></P>
<P align=justify>In the normal course of business, the Company is inherently
exposed to market, liquidity and credit risk through its use of financial
instruments. The timeframe and manner in which the Company manages these risks
varies based upon management&#146;s assessment of the risk and available alternatives
for mitigating risk. The Board approves and monitors risk management processes,
including treasury policies, counterparty limits, controlling and reporting
structures.</P>
<P align=justify><I>(b)&nbsp;&nbsp; Market risk </I></P>
<P align=justify>Market risk is the risk that the fair value of future cash
flows of a financial instrument will fluctuate because of changes in market
prices. Market prices comprise three types of risk: commodity price risk;
interest rate risk; and currency risk. Financial instruments affected by market
risk include: cash and equivalents; accounts receivable; promissory note;
marketable securities; reclamation deposits; accounts payable and accrued
liabilities; debt; royalty obligation; and derivatives. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_35></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimizing the
return. The Company buys and sells derivatives in order to manage market risks.
The derivative instruments employed by the Company are not designated as hedges
for accounting purposes. These non-hedge derivatives are considered to be
economic hedges. </P>
<P align=justify><I>Commodity price risk </I></P>
<P align=justify>The Company is exposed to the risk of fluctuations in
prevailing market commodity prices on the metals it produces. To manage the
Company&#146;s operating margins effectively in volatile metals markets, the Company
enters into copper option contracts. The amount and duration of the Company&#146;s
hedge position is based on its assessment of business specific risk elements
combined with the copper pricing outlook. Currently, the Company has 90% of its
estimated share of 2012 Gibraltar copper production hedged by means of collar
sell contracts.</P>
<P align=justify>The table below summarizes the impact on earnings after tax and
equity for changes in commodity prices on the fair value of derivatives, other
than those designated as embedded derivatives.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Copper increases by US$0.34/lb (2010: US$0.45/lb) <SUP>1</SUP>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(10,288</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(325</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
</TABLE>
<P align=justify><SUP>1. </SUP>The analysis is based on the assumption that the
year-end copper price increases 10% with all other variables held constant. The
relationship between the year-end copper price and the strike price of copper
options has significant influence over the fair value of the derivatives. As
such, a 10% decrease in the year-end copper price will not result in an equal
but opposite impact on earnings after tax and equity. The closing exchange rate
for the year ended December 31, 2011 of CAD/USD 1.0170 (2010: 0.9946) was used
in the analysis. </P>
<P align=justify>The Company also enters into physical commodity contracts in
the normal course of business. These contracts are not derivatives and are
measured at cost (typically at nil); they are therefore excluded from the fair
value and sensitivity table above. Also not included in the above tables are
provisionally priced sales volumes for which price finalization is outstanding
at balance date. Provisionally pricing mechanisms embedded within these sales
arrangements have the character of a commodity derivative and are carried at
fair value as part of accounts receivables. The table below summarizes the
impact on earnings after tax and equity for changes in commodity prices upon
provisionally invoiced sales volumes. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper increase/decrease by US$0.34/lb (2010:
      US$0.45/lb) <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;2,054 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;5,063 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid">Molybdenum increase/decrease
      by US$1.34/lb (2010: US$1.60/lb) <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>269 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>223 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1. </SUP>The analysis is based on the assumption that the
metal price moves 10% with all other variables held constant. The closing
exchange rate for the year ended December 31, 2011 of CAD/USD 1.0170 (2010:
0.9946) was used in the analysis. </P>
<P align=justify>The sensitivities in the above tables have been determined as
the absolute impact on fair value of a 10 per cent increase in commodity prices
at each reporting date, while holding all other variables, including foreign
currency and exchange rates, constant. The relationship between commodity prices
and foreign currencies is complex and movements in foreign exchange can impact
commodity prices. The sensitivities should therefore be used with care. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_36></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>Interest rate risk </I></P>
<P align=justify>The Company is exposed to interest rate risk on its outstanding
debt and investments, including cash and equivalents, from the possibility that
changes in market interest rates will affect future cash flows or the fair value
of fixed-rate interest-bearing financial instruments.</P>
<P align=justify>The table below summarizes the impact on earnings after tax and
equity for a change of 100 basis points in interest rates at the reporting date.
This analysis assumes that all other variables, in particular foreign currency
rates, remain constant. This assumes that the change in interest rates is
effective from the beginning of the financial year and balances are constant
over the year. However, interest rates and balances of the Company may not
remain constant in the coming financial year and therefore such sensitivity
analysis should be used with care. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Years ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Fair value sensitivity for fixed-rate instruments</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Cash and equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;407 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;124 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Dual currency deposits &gt; 3-month term </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>482 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Promissory note </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>789 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>734 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capital leases </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(148</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(100</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Secured equipment loans </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(128</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(81</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Senior notes
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(1,057</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;345 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;677 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap><B>Cash flow sensitivity for variable-rate instruments</B>    </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Cash and equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,327 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;521 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capped floating rate notes </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>11 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Reclamation deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>174 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>121 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Credit facility
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
align=right>(93</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,512 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;549 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>Currency risk </I></P>
<P align=justify>The Canadian dollar is the functional currency of the Company
and, as a result, currency exposures arise from transactions and balances in
currencies other than the Canadian dollar, primarily the US dollar. The
Company&#146;s potential currency exposures comprise translational exposure in
respect of non-functional currency monetary items, and transactional exposure in
respect of non-functional currency revenues and expenditures. The Company also
has currency exposure as a result of its investment in dual currency deposits
(&#147;DCD&#148;). A DCD is a financial instrument which combines a money market deposit
with a currency option to provide a higher yield than that available for a
standard deposit. The currency that the Company receives upon maturity of the
DCD is dependent on the prevailing spot foreign exchange rate at maturity.</P>
<P align=justify>The following table demonstrates the sensitivity to a 10%
strengthening in the CAD against the USD. With all other variables held
constant, the Company&#146;s earnings after tax would increase/(decrease) due to
changes in the carrying value of monetary assets and liabilities. The impact on
equity is the same as the impact on profit after tax. A weakening in the CAD
against the USD would have had the equal but opposite effect to the amounts
shown below. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_37></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right nowrap><B>Year ended December 31,</B> </TD>
    <TD  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cash and equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(8,576</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(10,164</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Dual currency deposits <SUP>1</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(7,491</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,422</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Accounts receivable </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,197</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,247</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper put option contracts </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,867</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(31</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Accounts payable and accrued liabilities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>492 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>86 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper call option contracts </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>192 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Senior notes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>14,510 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1. </SUP>Represents the translational exposure of the
DCDs, and does not consider the potential impact of losses as a result of
potential conversions of the DCD into Canadian dollars at maturity. </P>
<P align=justify>The Company&#146;s financial asset and liability profile may not
remain constant and, therefore, these sensitivities should be used with care.
</P>
<P align=justify><I>(c)&nbsp;&nbsp; Liquidity risk </I></P>
<P align=justify>Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they become due. The Company manages liquidity
risk by holding sufficient cash and equivalents and scheduling long-term
obligations based on estimated cash inflows. </P>
<P align=justify>During the year ended December 31, 2011, Moody&#146;s Investor
Service made no change to the Company&#146;s long-term credit rating of B3, and
Standard &amp; Poor&#146;s made no change to the Company&#146;s long-term credit rating of
B. The Company&#146;s strong credit profile and significant cash balance ensure that
sufficient liquid funds are maintained to meet its daily cash requirements. The
Company&#146;s practice on counterparty credit exposure ensures that only
counterparties of a high credit standing are used for the investment of any
excess cash. </P>
<P align=justify>There were no defaults on loans payable during the year. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_38></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>The maturity profile of the Company&#146;s financial liabilities
based on contractual undiscounted amounts is: </P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>&lt;1 year or</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>demand</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>1
      - 2 years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2
      - 5 years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>&gt;5 years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>At December 31, 2011</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;Accounts payable and accrued liabilities </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;36,289 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;36,289 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Expected future interest payments </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,518 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>16,717 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>47,945 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>36,126 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>118,306 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capital leases </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,925 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>5,938 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8,924 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>21,787 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Secured equipment loans </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>6,828 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,672 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,559 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>13,059 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Senior notes </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>203,400 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap>203,400 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Royalty obligations <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>13,514 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>23,809 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>15,461 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>52,784 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;81,074 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;50,136 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;74,889 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;239,526 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;445,625 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Carrying amount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;63,556 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;33,419 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;26,944 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;197,409 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;321,328 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>At December 31, 2010</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Accounts payable and accrued
      liabilities </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;23,796 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;23,796 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Expected future interest payments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,080 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,371 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,015 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,466 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Capital leases </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,354 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,394 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>9,565 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>20,313 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Secured equipment loans </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,961 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,828 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,231 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>18,020 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Royalty obligations <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>9,913 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>13,335 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>33,845 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,800 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>58,893 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;46,104 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;26,928 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;50,656 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;1,800 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;125,488 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Carrying amount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;44,023 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;25,557 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;49,641 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,800 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;121,021 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE></DIV>
<P align=justify><SUP>1. </SUP>Actual timing of payment for royalty obligations
may differ. Amounts estimated based on expected future production levels. </P>
<P align=justify><I>(d)&nbsp;&nbsp; Credit risk </I></P>
<P align=justify>Credit risk is the risk of potential loss to the Company if a
customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Company is exposed to credit risk from its receivables,
marketable securities and investments, and derivatives. In general, the Company
manages its credit exposure by transacting only with reputable counterparties.
The Company monitors the financial condition of its customers and counterparties
to contracts. </P>
<P align=justify>The following table shows the Company&#146;s receivables at the
reporting date that are exposed to credit risk and the aging analysis. There are
no impairments recognized on the receivables. </P>
<DIV>
  <TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
    <TR vAlign=top>
      <TD align=left>&nbsp; </TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=right nowrap><B>Not past</B> </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD colspan="7" align=center nowrap><B>Past due but not impaired</B> </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Total</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>due</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>&lt;30 days</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>31-90 days</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>&gt;90 days</B> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left nowrap><B>At December 31, 2011</B> </TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD bgColor=#e6efff align=left>&nbsp;Trade receivables </TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD width="12%" align=right nowrap bgColor=#e6efff>&nbsp;29,891 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;29,958 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;12 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;(79</TD>
      <TD bgColor=#e6efff  width="2%" align=left>) </TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Other receivables
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>10,018 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>9,306
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>712
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;39,909 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;39,264 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;12 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;633 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left nowrap><B>At December 31, 2010</B> </TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="12%" align=left>&nbsp; </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD bgColor=#e6efff align=left>&nbsp;Trade receivables </TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;17,443 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;17,398 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;(7</TD>
      <TD bgColor=#e6efff  width="2%" align=left>) </TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;52 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>$</TD>
      <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Other receivables
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>4,475
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>4,475
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD width="12%"
    align=right nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;21,918 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;21,873 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(7</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;52 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_39></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>The Company deals with a limited number of counterparties for
its metal sales. The balance at December 31, 2011 is comprised of four customers
(2010: four customers). </P>
<P align=justify><I>(e)&nbsp;&nbsp; Fair values of financial instruments
</I></P>
<P align=justify>The fair values of financial assets and liabilities, together
with their carrying amounts, are presented by class in the following table.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2011</B>    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>Carrying</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>Carrying</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>amount</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Fair value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>amount</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Fair value</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Financial assets</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap><I>Fair value through profit and loss (FVTPL)</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Dual currency deposits &lt; 3-month term
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;61,033 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;61,033 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;19,892 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;19,892 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Dual currency deposits &gt; 3-month term </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>40,602 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>40,602 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Copper put option contracts </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>25,407 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>25,407 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>433 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>433 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Warrants </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>599 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>599 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><I>Loans and receivables</I> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Cash </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;216,759 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;216,759 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;191,901 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;191,901 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Accounts receivable </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>39,909 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>39,909 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>21,918 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>21,918 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Promissory note
      <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>74,814 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>77,807 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><I>Available-for-sale</I> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capped floating rate notes </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;20,055 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;20,055 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,898 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,898 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,922 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,922 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Reclamation
      deposits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>24,962 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>24,962 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>23,266 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>23,266 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Financial liabilities</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap><I>Fair value through profit and loss (FVTPL)</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Copper call option contracts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;2,607 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;2,607 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><I>Financial liabilities</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Accounts payable and accrued liabilities
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;36,289 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;36,289 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;23,795 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;23,795 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Senior notes </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>197,409 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>185,603 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Capital leases </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>21,787 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>21,562 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>20,313 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>20,040 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Secured equipment loans </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13,059 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,235 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>18,020 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>16,727 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Royalty obligation <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>52,784 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>58,893 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1.</SUP> The fair value of the promissory note and royalty
obligation are not readily determinable with sufficient reliability due to the
uncertainty around the maturities and the future cash flows associated with the
promissory note. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_40></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>The Company uses the fair value hierarchy described in note 2f
for determining the fair value of financial instruments.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Level 1</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Level 2</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Level 3</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Total</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>December 31, 2011</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>Financial assets designated at FVTPL</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Dual currency deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;101,635 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;101,635 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Copper put option contracts </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25,407 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25,407 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Warrants </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>Available-for-sale financial assets</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,898 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,898 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capped floating rate notes </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>20,055 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>20,055 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Reclamation deposits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>24,962 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>24,962 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;36,860 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;147,097 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;183,957 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff><I>Financial liabilities designated at
      FVTPL</I> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Copper call
      option contracts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;2,607 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;2,607 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>December 31, 2010</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>Financial assets designated at FVTPL</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Dual currency deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;19,892 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;19,892 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Copper put option contracts </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>433 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>433 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Warrants </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>599 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>599 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><I>Available-for-sale financial assets</I> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,922 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,922 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Reclamation
      deposits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>23,266 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>23,266 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;41,188 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;20,924 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;62,112 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE>
<P align=justify>There have been no transfers between fair value levels during
the reporting period.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_41></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(f)&nbsp;&nbsp; Summary of derivatives and financial assets
containing embedded derivatives </I></P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left >&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=center><B>Term to</B> </TD>
    <TD width="15%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp; </TD>
    <TD width="17%"
      align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Notional amount</B> </TD>
    <TD width="17%"
      align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Strike price</B><SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%"
      align=center><B>maturity</B> </TD>
    <TD width="15%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Fair value</B> </TD>
    <TD width="2%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    ><B>At December 31, 2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><I>Commodity contracts</I> </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="15%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff >&nbsp;Copper put option
      contracts </TD>
    <TD bgColor=#e6efff width="17%" align=center>68.5 million lbs </TD>
    <TD bgColor=#e6efff width="17%" align=center>US$3.50 </TD>
    <TD width="17%" align=center nowrap bgColor=#e6efff>Q1-Q4 2012 </TD>
    <TD bgColor=#e6efff width="15%" align=right>$ 25,407 </TD>
    <TD bgColor=#e6efff width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp;Copper call option contracts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=center>68.5
      million lbs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%"
      align=center>US$5.02 to 5.12 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%"
      align=center>Q1-Q4 2012 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>$
      (2,607) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left ><I>Dual currency deposits</I>    </TD>
    <TD bgColor=#e6efff width="17%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="17%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="17%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="15%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >&nbsp;USD/CAD (4.50% to 6.00%) </TD>
    <TD width="17%" align=center>US$60 million </TD>
    <TD width="17%" align=center nowrap>1.0300 to 1.0740 </TD>
    <TD width="17%" align=center>&lt; 3 months </TD>
    <TD width="15%" align=right>$ 61,313 </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >&nbsp;USD/CAD (4.00% to 7.05%) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>US$40 million </TD>
    <TD width="17%"
    align=center nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">0.9850 to 1.0800 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>&gt; 3 months </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>$ 40,602 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><I>Capped floating rate notes</I> </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="15%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >&nbsp;3-month BA rate + 25
      bps </TD>
    <TD bgColor=#e6efff width="17%" align=center>C$10 million </TD>
    <TD bgColor=#e6efff width="17%" align=center>5.00% </TD>
    <TD bgColor=#e6efff width="17%" align=center>Q4 2013 </TD>
    <TD bgColor=#e6efff width="15%" align=right>$ 10,024 </TD>
    <TD bgColor=#e6efff width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp;3-month BA rate + 45 bps </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=center>C$10
      million </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%"
      align=center>5.50% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=center>Q4
      2014 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>$
      10,031 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left ><I>Share purchase
      warrants</I> </TD>
    <TD bgColor=#e6efff width="17%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="17%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="17%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="15%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >&nbsp;Publicly-traded company </TD>
    <TD width="17%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">1
      million shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%"
      align=center>$1.20 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="17%" align=center>Q2
      2012 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>-  </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    ><B>At December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><I>Commodity contracts</I> </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="15%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;Copper put option contracts </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>34.3 million lbs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>US$3.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>Q1-Q2 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>$ 433 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><I>Dual currency deposits</I> </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="15%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >&nbsp;USD/CAD (4.00% to 4.50%) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>US$20 million </TD>
    <TD width="17%"
    align=center nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1.0285 to 1.0410 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>&lt; 3 months </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>$ 19,892 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left ><I>Share purchase warrants</I> </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="17%" align=left>&nbsp; </TD>
    <TD width="15%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >&nbsp;Publicly-traded company </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>1 million shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>$1.20 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="17%"
    align=center>Q2 2012 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="15%"
    align=right>$ 599 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=right>&nbsp;</TD>
  </TR></TABLE>
</DIV>
<P align=justify><SUP>1. </SUP>For the floating rate notes, this value
represents the cap level for the coupon rate.</P>
<P align=justify><I>(g)&nbsp;&nbsp; Capital management </I></P>
<P align=justify>The Company's primary objective when managing capital is to
ensure that the Company is able to continue its operations and that it has
sufficient ability to satisfy its capital obligations and ongoing operational
expenses, as well as to have sufficient liquidity available to fund suitable
business opportunities as they arise. </P>
<P align=justify>The Company considers the components of shareholders' equity,
as well as its cash and equivalents, DCDs classified within marketable
securities, credit facilities and debt as capital. The Company manages its
capital structure and makes adjustments to it in light of changes in economic
conditions and the risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Company may issue or buy back
equity, issue, buy back or repay debt, sell assets, or return capital to
shareholders.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right nowrap><B>December 31,</B> </TD>
  <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Cash and equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;277,792 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;211,793 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;DCDs within other financial assets </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>40,602 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Current debt </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>13,753 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>10,315 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Long-term
      debt </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>218,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>28,018 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Net (cash) debt</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;(86,139</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;(173,460</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Shareholders&#146;
      equity</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;496,817</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD width="12%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;460,742</B> </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_42></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>In order to facilitate the management of its capital
requirements, the Company prepares annual operating budgets that are approved by
the Board of Directors. Management also actively monitors its financial
covenants to ensure compliance. </P>
<P align=justify>The Company&#146;s investment policy is to invest its cash in highly
liquid interest-bearing investments that are readily convertible to known
amounts of cash. </P>
<P align=justify>There were no changes to the Company's approach to capital
management during the year ended December 31, 2011. </P>
<P align=justify><B>26</B><B>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RELATED
PARTIES </B></P>
<P align=justify><I>(a)&nbsp;&nbsp; Subsidiaries </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD colspan="3" align=center nowrap><B>Ownership interest as at</B>  </TD>
    </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="15%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="15%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="15%" align=right nowrap><B>January 1,</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right><B>2010</B> </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Gibraltar Mines Ltd. </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD></TR>
  <TR vAlign=top>
    <TD align=left>Aley Corporation </TD>
    <TD width="15%" align=right>100% </TD>
    <TD width="15%" align=right>100% </TD>
    <TD width="15%" align=right>100% </TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>Taseko Acquisitionsub Ltd. </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD></TR>
  <TR vAlign=top>
    <TD align=left>0806294 BC Ltd. </TD>
    <TD width="15%" align=right>100% </TD>
    <TD width="15%" align=right>100% </TD>
    <TD width="15%" align=right>100% </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>688888 BC Ltd. </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD>
    <TD bgColor=#e6efff width="15%" align=right>100% </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Gibraltar Royalty
      LP </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>99.99% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%"
      align=right>99.99% </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" width="15%" align=right>-  </TD></TR></TABLE>
<P align=justify><I>(b)&nbsp; &nbsp;Key management personnel compensation
</I></P>
<P align=justify>Key management personnel include the members of the Board of
Directors and executive officers of the Company. </P>
<P align=justify>The Company contributes to a post-employment defined
contribution pension plan on the behalf of certain key management personnel.
This retirement compensation arrangement (RCA Trust) was established to provide
benefits to certain executive officers on or after retirement in recognition of
their long service. Upon retirement, the participant is entitled to the
distribution of the accumulated value of the contributions under the RCA Trust.
Obligations for contributions to the defined contribution pension plan are
recognized as compensation expense in profit or loss in the periods during which
services are rendered by the executive officers. </P>
<P align=justify>Certain executive officers are entitled to termination and
change in control benefits. In the event of termination without cause, other
than a change in control, these executive officers are entitled to an amount
ranging from 9-month to 12-month&#146;s salary. In the event of a change in control,
if a termination without cause or a resignation occurs within 12 months
following the change of control, these executive officers are entitled to
receive, among other things, an amount ranging from 24-month to 32-months salary
and accrued bonus, and all stock options held by these individuals will fully
vest. </P>
<P align=justify>Executive officers and directors also participate in the
Company&#146;s share option program (note 21).</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_43></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Compensation for key management personnel (including directors)
is as follows: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center nowrap><B>Year ended December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Salaries and benefits </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;3,578 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;3,186 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Post-employment benefits </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,135 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>666 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Share-based compensation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>6,591 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>6,524 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>11,304 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>10,376 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>(c)&nbsp;&nbsp; Other related party transactions </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center nowrap><B>Transaction value for the</B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD colspan="4" align=center nowrap><B>Due to (from) related parties</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>year end December 31,</B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD colspan="4" align=center><B>as at December 31,</B> </TD>
    <TD width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Hunter Dickinson Services Inc.: </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;General and administrative expenses </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;2,223 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;2,266 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;Exploration and evaluation expenses </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>764 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>692 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Prepaid rent
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>995 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;3,982 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;2,958 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;44 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;154 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Gibraltar joint venture: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Other operating income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;840 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;648 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(241</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(1,764</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=justify>Hunter Dickinson Services Inc. (HDSI) is a private company
which, until early 2010, was owned equally by eight public companies, one of
which was the Company. In the first quarter of 2010, the Company sold its
interest in HDSI for a nominal value. HDSI employs some members of the executive
management of the Company and invoices the Company for their executive services
as well as other services. </P>
<P align=justify>Under the terms of the joint venture operating agreement, the
Gibraltar joint venture pays the Company a management fee for services rendered
by the Company as operator of the Gibraltar mine. </P>
<P align=justify><B>27.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TRANSITION TO IFRS
</B></P>
<P align=justify><I>(a)&nbsp;&nbsp; Elected exemptions</I></P>
<P align=justify>IFRS 1 provides for certain mandatory exceptions and optional
exemptions for first time adopters of IFRS. The Company elected to take the
following IFRS 1 optional exemptions as of the transition date of January 1,
2010: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Not to apply the requirements of IFRS 3, <I>Business Combinations, </I>and
  restate business combinations that occurred prior to the transition date.
  <LI>To apply the requirements of IFRS 2, <I>Share-based Payments</I>, to share
  options granted which had not vested as at the transition date.
  <LI>To apply the borrowing cost exemption and to prospectively apply IAS 23,
  <I>Borrowing Costs.</I>
  <LI>To not retrospectively apply IFRIC 1, <I>Changes in Existing
  Decommissioning, Restoration and Similar</I> <I>Liabilities. </I>The
  simplified approach to calculating the net book value of the asset related to
  the PER was applied. The PER calculated on the transition date in accordance
  with IAS 37, <I>Provisions,</I> <I>Contingent Liabilities and Contingent
  Assets, </I>was discounted back to the date the liability first arose, at
  which date the corresponding asset was set up, and then accumulated
  depreciation was recalculated as at the transition date. </LI></UL>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_44></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><I>(b)&nbsp;&nbsp; Reconciliation of Equity </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="5%" align=center>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right nowrap><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right nowrap><B>January 1,</B> </TD>
  <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="5%"
      align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Ref.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Equity under Canadian GAAP</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="5%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>&nbsp;469,951 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>&nbsp;296,693 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp; &nbsp;Change in accounting method for depreciation    </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="5%" align=center>(i) </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>(668</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Reversal of impairment </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="5%" align=center>(ii) </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>3,338 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>4,574 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Provision for environmental rehabilitation </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="5%" align=center>(iii) </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>(14,290</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>(16,731</TD>
    <TD width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Share-based compensation </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD width="5%" align=center nowrap bgColor=#e6efff>(iv) </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;
      &nbsp;Deferred income tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="5%" align=center>(v)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%" align=right>2,411
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%" align=right>3,338
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Equity under IFRS</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="5%"
    align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>&nbsp;460,742 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>&nbsp;287,874 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><I>(c)&nbsp; &nbsp;Reconciliation of Total Comprehensive Income
</I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right><B>Year ended</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="10%"
      align=center nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>Ref.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="14%"
      align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff><B>Total Comprehensive Income under
      Canadian GAAP</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="14%" align=right>&nbsp;150,271 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Change in accounting method for depreciation
    </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>(i) </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>(1,772</TD>
    <TD width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Reversal of impairment </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=center>(ii) </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>(99</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Provision for environmental rehabilitation </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>(iii) </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>(1,843</TD>
    <TD width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Share-based compensation </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center nowrap bgColor=#e6efff>(iv) </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="14%" align=right>1,149 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Deferred income tax </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=center>(v) </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="14%" align=right>280 </TD>
    <TD width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Gain on contribution to joint venture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD width="10%"
    align=center nowrap bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(vi) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="14%"
    align=right>3,044 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total
      Comprehensive Income under IFRS</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="14%"
      align=right>&nbsp;151,030 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=justify><I>References for (b) and (c) </I></P>
<P style="MARGIN-LEFT: 5%" align=justify>i)&nbsp;&nbsp; Change in accounting
method for depreciation </P>
<P align=justify>On adoption of IFRS effective January 1, 2010, the Company
changed its depreciation accounting method with respect to certain components of
property, plant and equipment as management believes it more appropriately
reflects the use of the corresponding assets thereby resulting in more reliable
and relevant presentation. The impact of this change in accounting method has
been prospectively applied from January 1, 2010 as it is a change in
depreciation method and not a change in an accounting policy. Under IFRS, a
change in the method of depreciation is considered a change in estimate and is
applied prospectively. Under Canadian GAAP, a change in depreciation method
would have been considered a change in accounting policy and retrospectively
applied. </P>
<P align=justify>Mining equipment was previously depreciated using the
units-of-production method based on tons mined which resulted in variability in
the amount depreciated period-to-period. Mining equipment assets are usually
fully deployed in day-to-day activities and have a readily determinable useful
life. As such, management adopted a method to depreciate these assets using the
straight-line method over their estimated useful lives. </P>
<P align=justify>Buildings were previously depreciated using the declining
balance method which results in more depreciation being taken in the initial
years. Management views the utility of buildings to be relatively consistent
over the lives of the buildings and has adopted a method to depreciate these
assets using the straight-line method. </P>
<P style="MARGIN-LEFT: 5%" align=justify>ii)&nbsp; &nbsp;Reversal of impairment
</P>
<P align=justify>Under IFRS, the Company is required to reconsider whether
impairment losses recognized in prior periods no longer exist, or have decreased
on transition and thereafter on an annual basis. If such indicators exist, a new
recoverable amount should be calculated and all or part of the
impairment charge should be reversed to the extent the recoverable amount
exceeds carrying value. This is not permitted under Canadian GAAP.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_45></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>Based on the Company&#146;s analysis, an adjustment of $4,574 has
been recorded on transition to IFRS to fully reverse an impairment loss
recognized for the Gibraltar mine in fiscal 2001, as the mine subsequently
restarted operations and is expected to continue to generate economic benefits
for the foreseeable future. The Company concluded that the historical
impairments recognized for Prosperity and Harmony should not be reversed.</P>
<P align=justify>As at December 31, 2010, no additional impairment reversals
were identified under IFRS; however, the transition adjustment had been reduced
by 25% to reflect the formation of the Joint Venture. The amounts recorded in
the table above include the incremental depreciation as a result of the
impairment reversal on transition date. </P>
<P style="MARGIN-LEFT: 5%" align=justify>iii)&nbsp; &nbsp;Provision for
environmental rehabilitation </P>
<P align=justify>The Company has re-measured its PER as of the transition date
and estimated the amount to be included in the cost of the related asset by
discounting the liability to the date at which the liability first arose. This
calculation was done using best estimates of the historical risk-adjusted
discount rates. Accumulated depreciation under IFRS was recalculated up to the
transition date.</P>
<P align=justify>Under Canadian GAAP, the Company reduced the amount of its PER
by expected cash inflows associated with future anticipated revenue-generating
activities. Under IFRS, these amounts are recognized as a separate asset when
recovery is virtually certain. The Company concluded that the conditions for
virtual certainty do not exist and have excluded these revenues from its
calculations under IFRS.</P>
<P align=justify>Accordingly, an adjustment was made to increase the asset by
$24,162, to increase the PER by $40,893 and to decrease deferred income taxes by
$5,814, for a total adjustment that decreased equity by $10,917 on the
transition date. </P>
<P align=justify>As at December 31, 2010, the adjustments were updated for
changes in discount rates and incremental depreciation. There were no other
changes in estimates between Canadian GAAP and IFRS. </P>
<P style="MARGIN-LEFT: 5%" align=justify>iv)&nbsp;&nbsp; Share-based
compensation </P>
<P align=justify>For the purpose of accounting for share-based payment
transactions, certain individuals previously classified as contractors under
Canadian GAAP are now classified as employees under IFRS, and the Company
records a lower expense each period, with an equal and offsetting adjustment to
contributed surplus. Additional adjustments were made as at December 31, 2010.
</P>
<P style="MARGIN-LEFT: 5%" align=justify>v)&nbsp; &nbsp;Income tax</P>
<P align=justify>Under IFRS, the Company has derecognized deferred tax
liabilities previously recognized on temporary differences arising on the
initial recognition of the Aley property and Oakmont net profit interest (where
the accounting basis of the asset acquired exceeded its tax basis) in a
transaction which was not a business combination and affected neither accounting
income nor taxable income. Accordingly, mineral property interests were reduced
by $1,955, intangible assets were reduced by $2,907 and deferred income tax
decreased by $3,975, with a decrease to equity of $887. </P>
<P align=justify>Under IFRS, the Company has reversed the deferred tax asset
previously recognized under Canadian GAAP related to the &#147;new mine allowance&#148;
for British Columbia mineral tax purposes. Accordingly, property, plant and
equipment and deferred income tax liability both increased by $6,786. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_46></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify>In addition, deferred taxes have been adjusted for the changes
to net book values arising as a result of the adjustments for first-time
adoption of IFRS as discussed above, resulting in an increase to equity of
$4,255. Additional adjustments were made as at December 31, 2010.</P>
<P style="MARGIN-LEFT: 5%" align=justify>vi)&nbsp;&nbsp; Gain on contribution to
joint venture </P>
<P align=justify>The gain on the contribution to joint venture has been
recalculated under IFRS to reflect adjustments to the carrying values of certain
assets and liabilities of the Gibraltar mine contributed to the joint venture,
as described in references (i), (ii), (iii) and (v).</P>
<P align=justify><I>(d) &nbsp;Reconciliation of Cash Flows </I></P>
<P align=justify>The IFRS transition adjustments noted above did not have an
impact on cash and equivalents. Cash interest paid is presented as a financing
activity, cash interest received is presented as an investing activity, and the
effect of foreign exchange rate changes on cash and equivalents has been
presented separately in the statements of cash flows under IFRS. Under Canadian
GAAP, all of these were included as operating activities. As a result of these
changes in classification under IFRS, cash flow from operating activities
increased by $4,266, cash flow from financing activities decreased by $3,118 and
cash flow from investing activities increased by $2,629, with the effect of the
foreign exchange decreasing cash by $3,777 for the year ended December 31, 2010
compared to Canadian GAAP. There is no net impact on cash and equivalents as a
result of this presentation change. </P>
<P align=justify><I>(e) &nbsp;Financial statement presentation changes </I></P>
<P align=justify>The transition to IFRS has resulted in numerous financial
statement presentation changes. The changes to the consolidated statement of
cash flows are outlined above. The following is a summary of the significant
changes to the consolidated statement of comprehensive income: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Expenses on the statement of comprehensive income have been classified
  according to function. Accordingly, depreciation and stock-based compensation
  are no longer presented as a separate item on the statement of comprehensive
  income but are included in cost of sales and general and administrative
  expenses. </P>
  <LI>
  <P>Other operating expenses include items related to the operation of the
  business such as gains and losses (realized and unrealized) on copper
  derivative instruments and management fee income related to the joint venture.
  </P>
  <LI>
  <P>Finance expenses comprise interest expense on borrowings, unwinding of the
  discount on provisions, losses on the disposal of marketable securities,
  changes in the fair value of derivatives included in cash and equivalents and
  marketable securities, and impairment losses recognized on financial assets.
  </P>
  <LI>
  <P>Finance income comprises interest income on funds invested, gains on the
  disposal of marketable securities, and changes in the fair value of
  derivatives included in cash and equivalents and marketable securities.
  Interest income is recognized as it accrues in earnings, using the effective
  interest method. </P>
  <LI>
  <P>Foreign currency gains and losses are reported on a net basis in finance
  expense and/or finance income. </P></LI></UL>
<P align=justify>There have been no changes to the presentation of the balance
sheet as a result of IFRS.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_47></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=3>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Notes to Consolidated Financial Statements </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
  </TR>
</TABLE>
<P align=justify><B>28.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SUBSEQUENT EVENTS
</B></P>
<P align=justify>Effective February 3, 2012, the Company commenced a normal
course issuer bid for up to 10 million common shares of the Company. All shares
will be purchased on the open market through the facilities of the Toronto Stock
Exchange at the market price at the time of purchase. The Company&#146;s normal
course issuer bid will terminate on February 2, 2013 or earlier if the number of
shares sought in the issuer bid has been obtained. The Company reserves the
right to terminate the bid earlier at any time. Purchases under the normal
course issuer bid are subject to the restricted payment limitations in the
Company&#146;s senior notes indenture. </P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exhibit99-2.htm
<DESCRIPTION>MD&A
<TEXT>


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   <TITLE>Taseko Mines Limited - Exhibit 99.2 - Filed by newsfilecorp.com</TITLE>
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<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<A name=page_1></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis
  </FONT></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD></TR></TABLE>
<P align=justify>This management&#146;s discussion and analysis ("MD&amp;A") is
intended to help the reader understand Taseko Mines Limited (&#147;Taseko&#148;, &#147;we&#148;,
&#147;our&#148; or the &#147;Company&#148;), our operations, financial performance, and current and
future business environment. This MD&amp;A is intended to supplement and
complement the consolidated financial statements and notes thereto, prepared in
accordance with IFRS for the year ended December 31, 2011 (collectively, the
&#147;Financial Statements&#148;). You are encouraged to review the Financial Statements
in conjunction with your review of this MD&amp;A and the most recent Form
40-F/Annual Information Form on file with the US Securities and Exchange
Commission (&#147;SEC&#148;) and Canadian provincial securities regulatory authorities.
</P>
<P align=justify>This MD&amp;A is prepared as of March 9, 2012. All dollar
figures stated herein are expressed in Canadian dollars, unless otherwise
specified. </P>
<P align=justify><B>Cautionary Statement on Forward-Looking Information </B></P>
<P align=justify>This discussion includes certain statements that may be deemed
"forward-looking statements". All statements in this discussion, other than
statements of historical facts, that address future production, reserve
potential, exploration drilling, exploitation activities, and events or
developments that the Company expects are forward-looking statements. Although
we believe the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from those
in the forward-looking statements. Factors that could cause actual results to
differ materially from those in forward-looking statements include market
prices, exploitation and exploration successes, continued availability of
capital and financing and general economic, market or business conditions.
Investors are cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ materially from those
projected in the forward-looking statements. All of the forward-looking
statements made in this MD&amp;A are qualified by these cautionary statements.
We disclaim any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise,
except to the extent required by applicable law. Further information concerning
risks and uncertainties associated with these forward-looking statements and our
business may be found in our most recent Form 40-F/Annual Information Form on
file with the SEC and Canadian provincial securities regulatory authorities.</P>
<P align=center>1 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_2></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><B>CONTENTS </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_3"><B>FINANCIAL
      HIGHLIGHTS</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_3"><B>3</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_3"><B>RECENT
      DEVELOPMENTS AND MARKET REVIEW</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_3"><B>3</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_6"><B>FINANCIAL
      PERFORMANCE</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_6"><B>6</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_11"><B>REVIEW
      OF OPERATIONS AND PROJECTS</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_11"><B>11</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_15"><B>FINANCIAL
      CONDITION REVIEW</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_15"><B>15</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_18"><B>SELECTED
      ANNUAL INFORMATION</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_18"><B>18</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_19"><B>FOURTH
      QUARTER RESULTS</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_19"><B>19</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_25"><B>SUMMARY
      OF QUARTERLY RESULTS</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_25"><B>25</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_26"><B>IFRS</B>
      </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_26"><B>26</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_28"><B>CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_28"><B>28</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_29"><B>INTERNAL
      CONTROLS OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND</B>
      <B>PROCEDURES</B> </A></TD>
    <TD bgColor=#eeeeee  width="8%" align=right ><A
      href="#page_29"><B>29</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_29"><B>RELATED
      PARTY TRANSACTIONS</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_29"><B>29</B>
      </A></TD></TR>
  <TR>
    <TD  align=left>&nbsp;</TD>
    <TD  width="8%" align=right >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=left><A
      href="#page_30"><B>NON-GAAP
      PERFORMANCE MEASURES</B> </A></TD>
    <TD bgColor=#eeeeee width="8%" align=right ><A
      href="#page_30"><B>30</B>
      </A></TD></TR></TABLE>
<P align=center>2 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_3></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><B>FINANCIAL HIGHLIGHTS </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=right style="BORDER-TOP: #000000 1px solid"><B>Year
      ended December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands,
      except per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenues </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;251,866 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;278,460 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net earnings </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>26,974 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>149,357 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;&nbsp; Per share (&#147;EPS&#148;) <SUP>1</SUP>
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.14 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.80 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Adjusted net earnings <SUP>2</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>17,458 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>57,328 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;&nbsp; Per share (&#147;adjusted EPS&#148;)
      <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.09 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.31 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>EBITDA <SUP>2</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>70,681 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>198,443 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Adjusted EBITDA <SUP>2</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>57,817 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>99,950 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Capital expenditures
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>63,915 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>55,303 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff align=left>&nbsp; </TD>
    <TD bgColor=#ffffff  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=right bgColor=#ffffff><B>As at December 31,</B> </TD>
    <TD bgColor=#ffffff  width="2%" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cash and equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;277,792 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;211,793 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Dual currency deposits within other financial assets </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>40,602 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Non-cash working capital </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>98,117 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,878 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net (cash) debt </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(86,139</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(173,460</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Equity </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>496,817 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>460,742 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> Calculated using weighted average number of shares
outstanding under the basic method.<BR><SUP>2</SUP> Adjusted net earnings,
adjusted EPS, EBITDA and adjusted EBITDA are non-GAAP financial performance
measures with no standard definition under IFRS. See pages 30-33 of this
MD&amp;A. </P>
<P align=justify>As a result of the formation of a joint venture on March 31,
2010, the full-year comparatives for 2010 throughout this MD&amp;A include 100%
of the Gibraltar mine&#146;s results through to March 31, 2010 and 75% of the
Gibraltar mine&#146;s results thereafter. </P>
<P align=justify><B>RECENT DEVELOPMENTS AND MARKET REVIEW </B></P>
<P align=justify><I>New Prosperity project </I></P>
<P align=justify>The Canadian Environmental Assessment Agency (CEAA) has
completed the terms of reference and guidelines for the Company&#146;s New Prosperity
project. On February 28, 2012 a work program commenced on site for the purpose
of obtaining information required for the federal environmental assessment.</P>
<P align=justify><I>Aley project </I></P>
<P align=justify>The Company is proceeding with its $20-million program for its
Aley niobium project north of Mackenzie, British Columbia. The bulk of the work,
scheduled to take place this summer, has three primary objectives: 1) further
define the ore body; 2) undertake environmental baseline studies and 3) inform
the project feasibility and advance preliminary engineering and mine site
planning. To date, all exploration activities have been through helicopter
supported programs. In order to advance this year's work and support future
development, a road clearing contract has been awarded to a local First Nations
construction firm and work has started on clearing a 12-km route into the
project area.</P>
<P align=center>3 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_4></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Normal course issuer bid </I></P>
<P align=justify>Effective February 3, 2012, the Company commenced a normal
course issuer bid for up to 10 million common shares of the Company. All shares
will be purchased on the open market through the facilities of the Toronto Stock
Exchange at the market price at the time of purchase. The Company&#146;s normal
course issuer bid will terminate on February 2, 2013 or earlier if the number of
shares sought in the issuer bid has been obtained. The Company reserves the
right to terminate the bid earlier at any time. Purchases under the normal
course issuer bid are subject to the restricted payment limitations in the
Company&#146;s senior notes indenture. </P>
<P align=justify><I>Market review </I></P>
<P align=justify><I>Copper </I></P>
<P align=justify>The market price for copper is a primary driver of our
profitability and our ability to generate operating cash flow. Copper markets
demonstrated strong pricing during 2011 with significant volatility. This
volatility was evidenced by record average prices for 2011 overall combined with
significant declines in the last four months of 2011.</P>
<P align=justify>China and other emerging economies provided strong demand for
copper in 2011 which supported copper prices through much of the year. Concerns
regarding European debt and a slowing economy in the United States and elsewhere
provided the impetus for significant volatility in financial and commodity
markets particularly in the latter part of 2011. While copper prices have
recovered to date in 2012, substantial risk in the form of volatility in
financial and commodity markets will likely continue. This volatility can cause
rapid declines in our copper prices which can have a significant effect on our
profitability. </P>
<P align=justify>As a means to mitigate the potential impact of this copper
price volatility on our future profitability and operating cash flow, we have
purchased copper puts for approximately 90% of our share of 2012 production
creating a US$3.50 floor for this period. These puts were primarily paid for by
selling calls at an average price of US$5.08 per pound.</P>
<P align=justify>The benefits from our hedging strategy became apparent during
2011 with unrealized gains of $22.9 million on copper derivative instruments,
offset partially by realized losses of $9.9 million. The quarterly
mark-to-market of our unrealized hedge position can impact our earnings
significantly due to this non-cash adjustment. We intend to maintain our
strategy of hedging our share of copper production as a means of future
operating margin protection. </P>
<P align=justify>Under our two copper concentrate sales agreements, a portion of
our copper concentrate sales had not yet settled at year end. At December 31,
2011, Gibraltar (100%) had 19.9 million pounds of copper in concentrate not yet
settled. Of this amount, pricing was fixed on 9.3 million pounds and the
residual 10.6 million pounds was subject to final pricing. We are able to fix
copper prices under one of our copper concentrate sales agreements based on
accumulating threshold tonnage levels in the Vancouver warehouse. This
contractual feature along with our hedging program serves to reduce our exposure
to copper price volatility. The copper subject to final pricing is valued at
year end using the copper price forward curve at that point in time.</P>
<P align=center>4 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_5></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><B>Figure 1: Average monthly spot copper prices (USD per pound)
</B></P>
<IMG src="figure1.jpg" width="389" height="249" border=0> <BR>
<P align=justify><I>Foreign exchange rates </I></P>
<P align=justify><B>Figure 2: Average monthly USD exchange rates (CAD/USD)
</B></P>
<IMG src="figure2.jpg" width="392" height="242" border=0> <BR>
<P align=justify>The results of our operations are
affected by the Canadian dollar/US dollar exchange rate.
Our product sales are denominated in US dollars while the
majority of our operating expenses are denominated in
Canadian dollars. Fluctuations in the Canadian dollar/US
dollar exchange rate can have a significant effect on
operating results; however, changes in this rate have
historically been correlated with offsetting changes in
copper prices which have mitigated this effect.
Fluctuations in the Canadian dollar/US dollar exchange rate
will also have an effect on the net operating cash costs of
production as reported in US$ per pound. </P>
<P align=center>5 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_6></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><B>FINANCIAL PERFORMANCE</B></P>
<P align=justify><I>Earnings </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="12%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Net earnings </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;26,974 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;149,357 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(122,383</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(10%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Unrealized gain on derivatives, net of tax </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(16,864</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(6,347</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(10,517</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>166% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Gain on sale of shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(6,443</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(4,087</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,356</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>58% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Changes in fair value of financial instruments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>307 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>282 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>&gt;999% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Foreign currency translation losses </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,907 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>10,467 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(4,560</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(44%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Loss on extinguishment of debt </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,136 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,136</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(100%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Loss/(gain) on contribution to joint
      venture, net of tax </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,930 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(63,623</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>66,553 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(105%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Non-recurring consulting expenses, net of tax </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,647 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,647 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>100% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Non-recurring tax adjustments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(30,600</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>30,600 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>100% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Adjusted net earnings
      <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;17,458 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;57,328 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(39,870</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(70%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> Adjusted net earnings is non-GAAP financial
performance measures with no standard definition under IFRS. See pages 30-33 of
this MD&amp;A. </P>
<P align=justify>The decrease in 2011 net earnings compared to 2010 is primarily
driven by the recognition of a number of non-recurring items in 2010, including
a $63.6 -million after-tax gain realized on the formation of the Gibraltar joint
venture during the first quarter of 2010 and $30.6 million in reversals of
historical tax reserves and interest. </P>
<P align=justify>As can be seen in the table above, the unrealized gains/losses
on derivatives can vary significantly each period and have a significant impact
on earnings. These swings are a result of the derivatives comprising our hedge
program at the balance sheet date, and marking-to-market this copper hedge
position using the forward copper price at the balance-sheet date. The hedge
position at the end of 2011 was comprised of collars hedging 90% of our share of
Gibraltar&#146;s estimated 2012 copper production, whereas the hedge position at the
end of 2010 was comprised of put options on our share of Gibraltar&#146;s estimated
copper production for the first six months of 2011.</P>
<P align=justify>We remove the foreign currency translation impact and the
unrealized gains on the derivative instruments from our adjusted net earnings
measure as they are not indicative of a realized economic gain/loss or the
underlying performance of the business in the period. The realized gains/losses
on these monetary items and derivative positions are reflected in net earnings
in the period in which the position is settled. </P>
<P align=justify>The resultant adjusted net earnings is a non-GAAP performance
measure that we believe is more representative of ongoing operations.
Contributing to the $40-million decrease in adjusted net earnings year over year
are the following changes: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>$27-million decrease in revenues associated with lower sales volumes;
  <LI>$8-million increase in cost of sales;
  <LI>$2-million impairment of plant and equipment;
  <LI>$9-million increase in interest expense associated with the 2011 senior
  notes issuance;
  <LI>$9-million increase in foreign exchange losses;
  <LI>offset by a $4-million increase in finance income; and
  <LI>$13 million for the associated tax effects of these items. </LI></UL>
<P align=justify>Each of the above-noted changes is examined in further detail
in the sections below. </P>
<P align=center>6 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_7></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Revenues </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper concentrate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;227,140 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;258,932 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(31,792</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(12%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Copper cathode </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>6,936
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3,987
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,949
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>74% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; Total copper sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;234,076 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;262,919 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(28,843</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(11%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum concentrate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,317 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,656 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,661 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Silver contained in copper concentrate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,473 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2,885 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>588 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>20% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;251,866 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;278,460 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(26,594</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(10%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>(thousands of pounds, unless otherwise noted) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper concentrate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>58,913 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>69,706 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(10,793</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(15%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Copper cathode </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,863 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,133 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>730 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>64% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; Total copper sales </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>60,776 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>70,839 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(10,063</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(14%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Average realized copper price (US$ per pound)
      <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>3.89 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>3.60 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.29 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>8% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Molybdenum concentrate
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>974 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>746 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>228 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>30% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> The average exchange rate used for 2011 was
CAD/USD $0.9893 (2010: $1.03) . </P>
<P align=justify>Copper revenues are down 11% primarily due to a 14% reduction
in our share of the Gibraltar mine&#146;s sales volumes. Contributing to this
decrease in sales volumes is the 2010 joint venture transaction on March 31,
2010. Copper revenues were positively impacted by an increase in average
realized copper prices year-over-year. Copper averaged US$4.00 per pound in 2011
and US$3.42 per pound in 2010 based on London Metals Exchange (LME) prices for
these periods. </P>
<P align=justify>Molybdenum revenues have increased 13% benefitting from a 30%
increase in sales volumes. The impact of the increased sales volumes has been
partially offset by declining molybdenum prices over the course of 2011.</P>
<P align=justify><I>Cost of sales </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Direct mining costs </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;125,536 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;120,810 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4,726 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Depreciation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,145 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,655 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(510</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(4%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Treatment and refining costs </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,632 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>11,563 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>69 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Transportation costs </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13,108 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>16,275 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(3,167</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(19%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Changes in inventories of finished goods and WIP </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,144 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,544</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>6,688 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(189%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;165,565 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;157,759 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;7,806 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper production (thousands of pounds) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>62,165 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>75,050 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(12,885</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(17%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper sales (thousands of pounds) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>60,776 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>70,839 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(10,063</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(14%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Direct mining costs per pound produced (per
      pound) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>2.02 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>1.61 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.41 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>25% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Depreciation per pound produced (per pound) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>0.20 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>0.17 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>0.03 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>18% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Treatment and refining costs per pound sold
      (per pound) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.19 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.16 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.03 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>19% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Transportation costs
      per pound sold (per pound) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.22
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.23
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(0.01</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
align=right>(4%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=center>7 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_8></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>The year-over-year increase in direct mining costs reflects a
10% increase in tons mined due, in part, to a planned increase in stripping
activities during 2011. The strip ratio increased to 2.8 during 2011 from 2.5 in
2010. In addition, we have experienced some inflationary pressures in direct
mining costs including higher labour, repairs and maintenance, diesel, grinding
media and explosives costs. The increase in direct mining costs on a &#145;per-unit
of production&#146; basis is also affected by the decrease in grade and recovery
year-over-year. (See <I>Operating Statistics</I> on page 11 for additional
details). </P>
<P align=justify>Depreciation expenses have remained relatively constant
year-over-year. Treatment and refining costs have increased on a &#145;per-unit of
sales&#146; basis, consistent with increases observed in the market in 2011, compared
to 2010.</P>
<P align=justify><I>Other expenses and income </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>General and administrative </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;21,100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;19,057 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;2,043 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>11% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Exploration and evaluation
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;10,411 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;10,090 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;321 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other operating expenses (income): </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Realized loss on copper derivatives </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;9,910 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;12,200 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;(2,290</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(19%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrealized gain on copper derivatives
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(22,944</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(8,877</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(14,067</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>158% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Consulting expenses </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,322 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,322 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>100% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Impairment of plant and equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,377 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,377 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>100% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Management fee
      income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(840</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(648</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(192</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>30% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(5,175</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;2,675 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(7,850</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(293%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Loss (gain) on contribution
      of joint venture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;3,987 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(98,157</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>102,144 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(104%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=justify>The increase in general and administrative expenses in 2011 is
due to higher compensation costs primarily as a result of headcount increases in
our engineering group, as well as increased consulting costs related to our
expansion projects in the period.</P>
<P align=justify>Over 80% of the exploration and evaluation expenses during 2011
were attributable to work performed at the Aley project, with the balance
primarily spent on New Prosperity. In 2010, over 85% of the exploration and
evaluation expenses were incurred on New Prosperity with the remainder primarily
spent on Aley.</P>
<P align=justify>The $9.9 -million loss on copper derivatives reflects the net
cost of our copper hedging program for 2011. We purchased a series of put
options for a total of 69.4 million pounds of copper, and the premium paid on
these put options was approximately US$0.20 per pound. With the decline in spot
copper prices, beginning in the third quarter, some of these options expired
in-the-money. We received proceeds of approximately $3 million on these options.
</P>
<P align=justify>During 2011, the Company purchased put options for 68.8 million
pounds of 2012 copper production. The puts were partially financed by selling
calls for an equivalent amount of copper, for a net cost of US$0.10 per pound.
These costs will be realized over the course of 2012. However, these outstanding
copper derivatives are marked-to-market each period end to fair value with any
changes in fair value recognized in income as unrealized gains or losses. For
2011, we recognized $22.9 million in unrealized gains as a result of the decline
in copper prices from the time we entered into the contracts in the second
quarter 2011 through to the end of the year. </P>
<P align=center>8 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_9></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>In early July we engaged consultants to work with the Gibraltar
management team over a 23-week period to design and execute programs directed at
improvements in operational performance. The total cost of this engagement
comprises the consulting expenses of $6.3 million. The medium and long-term
benefits are expected to provide a significant return on the program, with
initial operating impacts expected during the current fiscal year. </P>
<P align=justify>Certain plant and equipment were deemed redundant upon
completion of the SAG direct feed project during 2011, which resulted in an
impairment charge. We plan to dismantle the equipment and attempt to sell for
scrap. No value is currently ascribed to the scrap material. We also identified
other assets that will no longer be utilized under our current life-of-mine plan
and recognized an impairment charge on these assets as well. The total
impairment charges for 2011 were $2.4 million. There were no impairments
identified in 2010. </P>
<P align=justify>Under the terms of the joint venture operating agreement, the
Gibraltar joint venture pays the Company a management fee for services rendered
as operator of the Gibraltar mine. The management fees are directly related to
Gibraltar mine&#146;s total revenues. The increase in the 2011 management fees earned
reflects a full year of service by the Company as operator of the mine versus
nine months in 2010. </P>
<P align=justify>On March 31, 2010, we entered into an agreement with Cariboo
Copper Corp. (Cariboo) whereby we contributed certain assets and liabilities of
the Gibraltar mine into an unincorporated joint venture and Cariboo paid the
Company $186.8 million to acquire a 25% interest in the joint venture. We
recognized a gain on contribution to the joint venture of $98.2 million. During
2011, the construction of the SAG direct feed system was completed. Under the
terms of the agreement with Cariboo, the Company assumed 100% of the capital
costs in excess of the capital budget for the SAG direct feed system in place at
the time of the joint venture formation. The Company recognized a loss on
contribution to the joint venture of $4.0 million during 2011 as a result of
funding Cariboo&#146;s portion of the SAG direct feed system project costs above the
2010 budgeted amount.</P>
<P align=justify><I>Finance expenses </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest expense </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;13,957 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4,542 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;9,415 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>207% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Accretion on PER </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,046 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,936 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>110 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Loss on extinguishment of debt and royalty
      obligations </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,136 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,136</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(100%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Foreign exchange loss
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>6,489
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,133
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>4,356
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>204%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;22,492 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;10,747 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;11,745 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>109% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Interest expense has increased primarily as a result of the
issuance of the US$200 million in senior notes in April 2011, bearing interest
at 7.75% . The remainder of the interest expense is related to secured equipment
loans and capital leases, which has also increased slightly year over year. </P>
<P align=justify>Foreign exchange losses arise as a result of the significant
transactions we undertake in US dollars. All of our revenue transactions are
denominated in US dollars. We incur certain capital and operating expenditures
in US dollars, as well as make interest payments on our senior notes in US
dollars. As a result of movements in exchange rates between the date we
initially record our transaction and the date payment is made/received, we incur
foreign exchange gains and losses. In addition, we have significant monetary
assets and liabilities denominated in US dollars that are translated to Canadian
dollars at each balance sheet date, resulting in a foreign exchange gain or
loss. These monetary assets and liabilities include cash, accounts receivable
and the senior notes.</P>
<P align=center>9 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_10></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Finance income </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest income </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;6,859 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;14,933 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(8,074</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(54%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Gain on sale of shares </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>5,995 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,087 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,908 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>47% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Income realized on dual currency deposits </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,275 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>577 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,698 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>641% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Change in fair value of financial instruments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(307</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(25</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(282</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>&gt;999% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Dividend income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>448 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>448 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>100% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;17,270 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;19,572 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(2,302</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(12%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=justify>Interest income is primarily comprised of income earned on the
promissory note and reclamation deposits. In addition, interest income for 2010
includes a recovery of $8.1 million in interest expense associated with reversal
of historical tax reserves. After adjusting for this non-recurring item in 2010,
interest income is comparable year over year.</P>
<P align=justify>Income realized on dual currency deposits increased
significantly in 2011 as a result of the investment of a portion of the proceeds
on the senior notes issuance into these instruments.</P>
<P align=justify><I>Income tax </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Current expense </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;6,002 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4,106 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,896 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>46% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Deferred expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>17,780 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>42,398 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(24,618</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(58%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;23,782 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;46,504 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(22,722</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(49%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Effective tax rate
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>46.9%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>23.7%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Canadian statutory rate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>26.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>28.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The overall income tax expense is lower in 2011 when compared
to 2010, as the 2010 income tax expense took into account the proceeds received
from the joint venture transaction, which reduced our income tax pools,
resulting in higher deferred taxes. Current cash taxes were also higher in 2010
than they were 2011 as a result of the joint venture transaction. </P>
<P align=justify>The effective tax rate for 2011 is higher than the statutory
rate primarily due to the mineral tax, permanent differences and unrecognized
tax benefits. Certain items that are deductible for income tax purposes are not
deductible for BC Mineral tax purposes which had the effect of increasing the
effective tax rate by 15%. In addition, permanent differences, such as
non-deductible share-based compensation, accounted for 4% of the difference. In
addition, there were unrecognized tax benefits related to unrealized foreign
exchange on debt, which had the effect of increasing the effective tax rate by
3%. When these differences are applied to the net income year-to-date, they
impact the effective tax rate significantly. Other items including the impact of
the reduction of corporate tax rates created minor impacts on the effective tax
rate. </P>
<P align=justify>The effective tax rate for 2010 is lower than the statutory
rate. Permanent differences related to non-deductible share-based compensation,
non-taxable gains on the sale of securities and non-deductible interest had the
effect of reducing the effective tax rate by 10%. This was partially offset by
the impact of the BC Mineral tax which had </P>
<P align=center>10 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_11></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>the effect of increasing the effective tax rate by 7%. In
addition, there were adjustments for future tax rate differences. </P>
<P align=justify><B>REVIEW OF OPERATIONS AND PROJECTS </B></P>
<P align=justify><I>Gibraltar mine </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Twelve months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>OPERATING STATISTICS (100% BASIS)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Tons mined (millions) </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>15.4 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>15.6 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>57.5 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>52.3 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Tons milled (millions) </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>4.3 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>3.9 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>15.2 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>15.0 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Stripping ratio </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>2.7 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>2.9 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>2.8 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>2.5 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Grade (%) </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.292 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.333 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.304 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.338 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Recovery (%) </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>86.5 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>89.1 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>87.7 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>89.2 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Production (million pounds) </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>21.8 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>22.9 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>80.8 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>90.5 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Sales (million pounds) </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>19.7 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>32.7 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>78.6 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>85.3 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper cathode </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Production (million pounds) </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>0.5 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>0.5 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>2.1 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>1.8 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Sales (million pounds) </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.9 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.9 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>2.5 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>1.5 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Grade (%) </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.012 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.012 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.012 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>0.012 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Recovery (%) </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>38.8 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>29.8 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>36.7 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>25.5 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Production (thousand pounds) </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>388 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>276 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>1,331 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=right>941 </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Sales (thousand pounds) </TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>358 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>261 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>1,298 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="12%" align=right>924 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Per unit data <SUP>1,4</SUP> </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom  width="1%"
    align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff vAlign=bottom  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Operating cash costs <SUP>2 </SUP>(US$ per pound)
    </TD>
    <TD vAlign=bottom  width="1%" align=left>$</TD>
    <TD vAlign=bottom width="12%" align=right>1.91 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>$</TD>
    <TD vAlign=bottom width="12%" align=right>1.70 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>$</TD>
    <TD vAlign=bottom width="12%" align=right>2.04 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom  width="1%" align=left>$</TD>
    <TD vAlign=bottom width="12%" align=right>1.56 </TD>
    <TD vAlign=bottom  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;By-product credits <SUP>3 </SUP>(US$ per pound)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="12%" align=right>($0.25</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="12%" align=right>($0.26</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="12%" align=right>($0.29</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="12%" align=right>($0.20</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
     width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Net operating cash
      costs of production <SUP>1<BR>
      &nbsp;&nbsp; </SUP>&nbsp;(US$ per pound) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="12%"
    align=right>1.66 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="12%"
    align=right>1.44 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="12%"
    align=right>1.75 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="12%"
    align=right>1.36 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> Operating cash costs and net operating cash costs
of production are non-GAAP financial performance measures with no standard
definition under IFRS. See pages 30-33 of the Company&#146;s MD&amp;A.
<BR><SUP>2</SUP> Operating cash costs are comprised of direct mining costs which
include personnel costs, mine site general &amp; administrative costs,
non-capitalized stripping costs, maintenance &amp; repair costs, operating
supplies and external services. Non-cash costs, such as share-based compensation
and depreciation, have been excluded. <BR><SUP>3</SUP> By-product credits are
calculated based on actual sales of molybdenum and silver for the period,
divided by the total pounds of copper produced during the
period.<BR><SUP>4</SUP> Per unit data may not sum due to rounding. </P>
<P align=center>11 </P>
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width="100%" noShade>
<A name=page_12></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Full-year results </I></P>
<P align=justify>The Gibraltar mine&#146;s copper production in 2011 was 82.9
  million pounds, down 10% compared to the prior year production of 92.3 million
  pounds mainly due to lower head grade. Copper production in 2011 was also hampered
  by harsh winter conditions, tie-in of the SAG direct feed system, and the reline
  of the west rougher flotation bank and failure of the feed-end trunnion on Ball
  Mill #1.</P>
<P align=justify>Molybdenum production during 2011 was 1,331 thousand pounds,
  up 41% compared to 2010, also attributable to a significant improvement in molybdenum
  recovery as a result of operational and technical improvements to the molybdenum
  separation circuit. </P>
<P align=justify><B>Figure 3: Net operating cash costs of
production</B><B><SUP>1,2 </SUP></B><B>per pound <BR>(2010 compared to 2011)
</B></P>
<IMG src="figure3.jpg" width="398" height="330" border=0> <BR>
<P align=justify><SUP>1</SUP> Net operating cash costs of production is a non-GAAP
  financial performance measure with no standard definition under IFRS. See pages
  30-33 of the Company&#146;s MD&amp;A. <BR>
  <SUP>2 </SUP>Per unit cash costs of production may not sum due to rounding.</P>
<P align=justify>In 2011, net operating cash costs per pound of copper produced
  averaged US$1.75, a 29% increase over the US$1.36 averaged during the prior-year.
  Net operating cash costs were adversely impacted in 2011 by a 10% reduction
  in copper production, the strengthening of the Canadian dollar compared to the
  US dollar, and increased direct mining costs including higher labour, repairs
  and maintenance, diesel, electricity, grinding media and explosives costs. These
  cost increases were mitigated by a 38% increase in by-product credits to US$0.29
  per pound of copper produced during 2011.</P>
<P align=justify>The tie-in of the SAG direct feed system was completed in May
  2011 which eliminated the secondary crusher and fine ore delivery system bottleneck.
  The tie-in has allowed Gibraltar to move towards optimum mill throughput rates
  and mitigated throughput issues experienced historically in the winter months.</P>
<P align=center>12 </P>
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width="100%" noShade>
<A name=page_13></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>In early July we engaged consultants to work with the Gibraltar
  management team over a 23-week period to design and execute programs directed
  at improvements in operational performance. The work with the consultants ended
  in December 2011.</P>
<P align=justify><I>Fourth-quarter results </I></P>
<P align=justify>The Gibraltar mine&#146;s fourth quarter 2011 copper production
  was 22.3 million pounds, a 5% decrease from the 23.4 million pounds produced
  in the fourth quarter 2010 primarily due to lower head grade. Mill optimization
  efforts continue with average mill throughput of 52,500 tons per operating day
  being realized in the quarter. Mill availability was lower than expected in
  the quarter at 89% due to additional downtime for mill re-lines, screen deck
  maintenance, and an annual planned electrical outage. Mill throughput efforts
  have continued with further gains yet to be realized from &#147;mine to mill&#148;
  optimization and improvements in mill availability. </P>
<P align=justify>Molybdenum production during fourth quarter 2011 was 388 thousand
  pounds, up 40% compared to the prioryear quarter, largely due to a 30% increase
  in molybdenum recovery.</P>
<P align=justify><B>Figure 4: Net operating cash costs of
production</B><B><SUP>1,2</SUP></B><B> per pound <BR>
  (fourth quarter 2010 compared to fourth quarter 2011) </B></P>
<IMG src="figure4.jpg" width="388" height="354" border=0> <BR>
<P align=justify><SUP>1</SUP> Net operating cash costs of production is a non-GAAP
  financial performance measure with no standard definition under IFRS. See pages
  30-33 of the Company&#146;s MD&amp;A. <BR>
  <SUP>2</SUP> Per unit cash costs of production may not sum due to rounding.</P>
<P align=justify>In the fourth quarter 2011, total net operating cash costs per
  pound of copper produced averaged US$1.66, a 15% increase over the US$1.44 averaged
  during fourth quarter 2010. Net operating cash costs per unit of production
  were adversely impacted in fourth quarter 2011 mainly due to lower copper production.
  Costs were also impacted with increases in labour, maintenance and consumable
  costs.</P>
<P align=center>13 </P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Gibraltar Development Plan (GDP3) </I></P>
<P align=justify>The total GDP3 Project capital cost is estimated at $325
million and, to date, commitments have been made for approximately 70% of the
project capital requirements. Engineering Procurement and Construction
Management (EPCM) activities on the $237-million infrastructure portion of the
project continue to progress as planned. Major equipment purchases for the
concentrator, molybdenum plant and infrastructure are complete and detailed
engineering activities for the project structural, mechanical and electrical
systems continue. Orders and contracts for over 60% of the infrastructure
portion of the project budget have been placed and, as reported previously, all
of the major mining equipment has been purchased. Shipment of long lead items
including transformers and grinding mill components commenced in February
2012.</P>
<P align=justify>Construction activities are proceeding as planned. The #2
Concentrator building foundation and the grinding mill foundations have been
completed as has the erection of the Molybdenum Plant building. Erection of the
#2 Concentrator building is well underway as are civil concrete works for the
mill feed conveyors. Structural and mechanical installation of the conveyors
will commence in March 2012.</P>
<P align=justify>The project remains on time and on budget. Commissioning of the
facilities is scheduled to commence in December 2012.</P>
<P align=justify><I>New Prosperity project </I></P>
<P align=justify>We have revised our plans for the New Prosperity project and
have developed a new design proposal which adds construction costs and life of
mine operating expenditures of approximately $300 million to the original
design. The new plan responds to concerns identified during the federal review
process and in February 2011, the Company submitted a new project description to
the Federal Government. The Federal Government accepted the new project
description during the third quarter 2011.</P>
<P align=justify>On November 7, 2011, the Company was advised that a &#145;Notice of
Commencement&#146; had been posted by the CEAA related to the New Prosperity project.
The Notice of Commencement confirmed that the project description had met all
criteria required for an environmental assessment and that a panel review would
be conducted by the Federal Review Agency. The Minister of the Environment
indicated that CEAA will complete this review in not more than 12 months and
that CEAA would use information gathered in the previous environmental
assessment.</P>
<P align=justify>Subsequent to the Notice of Commencement from CEAA in November
2011, the Company reported that it had been unlawfully obstructed from
conducting work on the New Prosperity site. Court proceedings followed in
December 2011 where the Company&#146;s work permits were suspended for 90 days in
order to allow the courts to hear a provincial judicial review regarding the
adequacy of consultation by the BC Government prior to providing the Company
with the necessary work permits. On February 27, 2012, the Company reported that
the temporary injunction preventing the Company from undertaking routine
exploration work on the New Prosperity site pending a BC Supreme Court Judicial
Review, has been vacated by court order. On February 28, 2012, the Company
commenced a reduced scope of work that will be undertaken for the sole purposes
of obtaining information required for the federal environmental assessment of
the proposed New Prosperity project. On this basis, the parties have agreed not
to further pursue existing legal actions. </P>
<P align=justify>The environmental assessment announced by CEAA remains in
process under the timeline identified in their November 7, 2011 press release.
The public comment period on the draft terms of reference and environmental
impact statement commenced on January 23, 2012 and was completed on February 22,
2012. These documents will now be finalized by CEAA and inform the panel review
process.</P>
<P align=center>14 </P>
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width="100%" noShade>
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<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Aley project </I></P>
<P align=justify>Taseko announced a mineral resource estimate for the Aley
project in September 2011. The in-pit inferred resource estimate was based on
assay results from the Central Zone to July 31, 2011 and totaled 158.9 million
tonnes grading 0.43% Nb<SUB>2</SUB>O<SUB>5 </SUB>using a base case cut-off of
0.2% Nb<SUB>2</SUB>O<SUB>5</SUB>. </P>
<P align=justify>The 2011 exploration program was completed in third quarter
2011 and included a total of 16,800 meters of additional resource drilling in 65
holes in the central zone. This drilling was targeted to provide sufficient
infill drill density to achieve a measured and indicated status for the resource
and to investigate those areas in which the resource is open to expansion.
Assays were received in the fourth quarter and review of these assays will be
completed in the first quarter 2012. A geological model and updated block model
are under review with a plan to complete a resource update in the first quarter
2012. Metallurgical testwork is in progress on Aley. </P>
<P align=justify>Environmental baseline studies are ongoing including: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Climate, Air and Noise
  <LI>Hydrology/Hydrogeology
  <LI>Water Quality
  <LI>Soils and Terrain
  <LI>Vegetation and Ecosystem Mapping
  <LI>Wildlife
  <LI>Aquatic Ecology
  <LI>Fish and Fish Habitat </LI></UL>
<P align=justify>Clearing of the site access road right of way was initiated in
February 2012 with completion anticipated in early April 2012. Road construction
is planned to start soon thereafter.</P>
<P align=justify>Engineering work on minesite components, tailings storage
facility, and transmission line options was started at the end of the fourth
quarter. </P>
<P align=justify><B>FINANCIAL CONDITION REVIEW </B></P>
<P align=justify><I>Balance sheet review </I></P>
<P align=justify>Total assets were $994.7 million at December 31, 2011,
representing a 38% increase from the total assets of $722.1 million at December
31, 2010. The increase is primarily a result of the net proceeds received from
the US$200.0 million senior notes offering which we closed in the second
quarter, along with an increase in the rehabilitation cost asset.</P>
<P align=justify>Our asset base is comprised principally of non-current assets
including property, plant and equipment, reflecting the capital intensive nature
of the mining business. Our current assets include cash, accounts receivable,
other financial assets and inventories (supplies and production inventories),
along with other current assets that are primarily prepaid expenses and
deposits. Production inventories, accounts receivable and cash balances
fluctuate in relation to our shipping and cash settlement schedules, which
provide for payment typically either one or four months after the month of
arrival at the receiving port. </P>
<P align=justify>Total liabilities increased by $236.6 million since December
31, 2010 to $497.9 million as at December 31, 2011. This increase reflects the
senior notes issuance and an increase in the provision for environmental
rehabilitation (PER). </P>
<P align=center>15 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_16></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>The PER valuation is impacted by the changes in discount and
inflation rates as at each quarter end. The volatility in the markets during
2011 extended to the Bank of Canada benchmark bond rates which are used as the
proxies for discount rates. The long-term benchmark bond, which has the greatest
impact on our calculation, decreased to 3.1% as at December 31, 2011 compared to
3.7% at the end of 2010. Given the long time frame over which environmental
rehabilitation expenditures are expected to be incurred (over 100 years), the
amounts of the provision and asset are sensitive to even the slightest change in
estimates of discount and inflation rates.</P>
<P align=justify>As at March 9, 2012, there were 195,818,495 common shares
outstanding. In addition, there were 13,561,500 director, employee and
contractor stock options. More information on these instruments and the terms of
their exercise is set out in note 21 of our 2011 annual financial statements.
</P>
<P align=justify><I>Liquidity, cash flow and capital resources </I></P>
<P align=justify>At December 31, 2011, the Company had cash and equivalents of
$277.8 million, as compared to $211.8 million at December 31, 2010. An
additional $40.6 million and $20.1 million of highly-liquid money market
instruments are recorded as current other financial assets and long-term other
financial assets, respectively, as these instruments have maturity dates greater
than three months from the date of acquisition. We maintained our strategy of
retaining significant liquidity to fund operations and the GDP3 expansion. </P>
<P align=justify>Operating cash flow for 2011 was an inflow of $11.7 million
compared to an inflow of $94.1 million for the prior year. Additionally,
operating cash flow for both periods reflect the formation of the Gibraltar
joint venture on March 31, 2010 and the corresponding 25% decrease in our share
of the Gibraltar mine&#146;s operating cash flow since that date.</P>
<P align=justify>The principal use of operating cash flows is capital
expenditures. With the issuance of the senior notes, a future use of operating
cash flow will be the repayment of debt including interest. </P>
<P align=justify>Future changes in market copper and molybdenum prices could
impact the timing and amount of cash available for future investment in capital
projects and/or other uses of capital. To partially mitigate these risks, we
enter into copper hedges on our share of Gibraltar copper production.
Alternative sources of funding for future capital or other liquidity needs
include future operating cash flow, strategic partnerships, such as the
Gibraltar joint venture and the Franco-Nevada gold stream transaction, and debt
or equity financings. These alternatives are continually evaluated to determine
the optimal mix of capital resources to address our capital needs and minimize
our weighted average cost of capital. </P>
<P align=justify>Cash used in investing activities for 2011 was $124.0 million
principally due to the investment in dual currency deposits (&#147;DCD&#148;) with terms
greater than three months compared to cash generated from investing activities
of $128.4 million for 2010. A DCD is a derivative instrument which combines a
money market deposit with a currency option to provide a higher yield than that
available for a standard deposit. The currency in which the Company receives
payment upon maturity of the DCD is dependent on the prevailing spot foreign
exchange rate at maturity. DCDs with maturity dates of three months or less are
classified as cash and equivalents. During 2011, a total of $235.6 million was
invested in marketable securities, DCDs with terms greater than three months,
and copper hedging contracts. In addition, $63.9 million was invested in
property, plant and equipment, offset by $169.5 million in proceeds on the sale
and maturity of investments, and interest received of $7.1 million. The prior
year reflects the $186.8 million in cash received for the 25% contribution to
the joint venture, offset by capital expenditures and purchase of investments.
</P>
<P align=justify>Cash provided by financing activities for 2011 was $173.5
million compared to cash used in financing activities of $42.0 million for 2010.
Included in 2011 are $192.0 million in proceeds from the senior notes offering,
$8.4 million in proceeds from common shares issued, offset by debt issuance
costs of $6.1 million and repayment of debt including interest. This compares to
a use of cash in financing activities for 2010 of $42.0 million primarily
related to the prepayment of the senior credit facility. </P>
<P align=center>16 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_17></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Hedging strategy </I></P>
<P align=justify>We implemented our hedging program in 2009 as copper prices
were recovering from the commodity pricing collapse that occurred in late 2008
and early 2009. Since that time, our strategy has been to hedge at least 50% of
our copper production using put options that are either purchased outright or
funded by the sale of calls that are significantly out of the money using either
a zero-cost basis or funded basis.</P>
<P align=justify>The amount and duration of our hedge position is based on our
assessment of business-specific risk elements combined with the copper pricing
outlook. Currently we have 90% of our estimated share of 2012 Gibraltar
production hedged at $3.50 per pound. This increased hedging level is based on
the potential risks associated with a copper price correction during the
build-out of GDP3. This corresponds with a period of heightened vulnerability
given the scope of the capital expenditure and working capital requirements
during 2012. The project is scheduled to be completed and commissioned in late
2012.</P>
<P align=justify>We review our copper price and quantity exposure at least
quarterly to ensure that adequate revenue protection is in place. Our hedge
positions are typically extended adding incremental quarters at established put
strike prices to provide the necessary price protection.</P>
<P align=justify>Considerations on the cost of the hedging program include an
assessment of Gibraltar&#146;s estimated production costs, anticipated copper prices
and estimated gross margins during the relevant period. </P>
<P align=justify><I>Commitments and contingencies </I></P>
<P align=justify>The Company expects to incur capital expenditures during the
next five years for both the Gibraltar mine and other projects. The other
projects are at various stages of development, from preliminary exploration
through to permitting. The ultimate decision to incur capital expenditures at
each potential site is subject to positive results which allow the project to
advance past decision hurdles.</P>
<P align=justify>At December 31, 2011, capital commitments associated with GDP3
totaled $49.1 million on a 100% basis. Capital commitments for all other
projects were $0.5 million. Our share of total commitments was $37.2 million at
year end. </P>
<P align=justify>In April 2011, the Company completed a public offering of
US$200 million in senior notes due in 2019, bearing interest at an annual rate
of 7.75% . The notes are guaranteed by the Company&#146;s subsidiaries and the
subsidiary guarantees are, in turn, guaranteed by the Company. The Company may
redeem some or all of the notes at any time on or after April 15, 2015 at
redemption prices ranging from 103.875% to 100% plus accrued interest. Prior to
April 15, 2015, the notes may be redeemed at 100% plus a make-whole premium,
plus accrued interest. In addition, until April 15, 2014, the Company may redeem
up to 35% of the principal amount of notes, in an amount not greater than the
net proceeds of certain equity offerings, at a redemption price of 107.75%, plus
accrued interest. The Company is subject to certain restrictions on asset sales,
payments, and incurrence of indebtedness and issuance of preferred stock.</P>
<P align=center>17 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_18></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<BR>
<DIV>
  <TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
    <TR vAlign=top>
      <TD style="BORDER-TOP: #000000 1px solid" align=left >&nbsp; </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid"
     width="1%" align=left>&nbsp;</TD>
      <TD colspan="19" align=center style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid">
        Payments due </TD>
      <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" align=left >($ in thousands)
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>2012
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>2013
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>2014
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>2015
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>2016
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%"
      align=right>thereafter </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" width="8%" align=right>Total
      </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD bgColor=#e6efff align=left >Debt <SUP>1 </SUP>: </TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=left>&nbsp; </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >&nbsp;Repayment of principal </TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>13,753 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>9,610 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>6,829 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>3,728 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>927 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>203,400 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>238,246 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD bgColor=#e6efff align=left >&nbsp;Interest </TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>17,518 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>16,717 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>16,235 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>15,927 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>15,783 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>36,126 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>118,306 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >PER <SUP>2</SUP> </TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>128,020 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>128,020 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD bgColor=#e6efff align=left >Operating leases </TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>1,377 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>117 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>145 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>- </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>- </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>- </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
      <TD bgColor=#e6efff width="8%" align=right>1,639 </TD>
      <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD align=left >Capital expenditures <SUP>3</SUP> </TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>37,200 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>- </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
      <TD  width="1%" align=left>&nbsp;</TD>
      <TD width="8%" align=right>37,200 </TD>
      <TD  width="2%" align=left>&nbsp;</TD>
    </TR>
    <TR vAlign=top>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Other expenditures <SUP>4</SUP> </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>13,514 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>23,809 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>15,461 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>- </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="8%"
    align=right>52,784 </TD>
      <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify><SUP>1</SUP> Debt is comprised of senior notes, capital leases
and secured equipment loans. <BR><SUP>2</SUP> Provision for environmental
rehabilitation &#150; Amounts presented in the table represent the undiscounted
future payments for the expected cost of environmental rehabilitation.
<BR><SUP>3</SUP> Purchase obligations for capital commitments include only those
items where binding commitments have been entered into. Commitments at the end
of 2011 primarily relate to the GDP3 expansion. <BR><SUP>4</SUP> Other
expenditure commitments include the supply of goods and services, royalty
obligations and exploration activities. Actual timing of payment for royalty
obligations may differ. Amounts estimated based on expected future production
levels. </P>
<P align=justify><B>SELECTED ANNUAL INFORMATION</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="7" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands,
      except per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2009</B><B><SUP>1</SUP></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenues </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;251,866 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;278,460 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;188,902 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net earnings </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;26,974 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;149,357 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;10,561 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Per share &#150; basic </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.14 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.80 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.06 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Per share &#150;
      diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.14
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.74
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.06
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#ffffff align=left>&nbsp; </TD>
    <TD bgColor=#ffffff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#ffffff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#ffffff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#ffffff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#ffffff width="12%" align=right>December 31, </TD>
    <TD bgColor=#ffffff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#ffffff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#ffffff width="12%" align=right>January 1, </TD>
    <TD bgColor=#ffffff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=right>2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=right>2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff width="12%"
    align=right>2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#ffffff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Total assets </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;994,732 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;722,094 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;567,683 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Total long-term financial
      liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;264,482 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;82,162 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;136,446 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1 </SUP>Information for 2009 is presented in accordance
  with Canadian GAAP and was not required to be restated to IFRS.</P>
<P align=center>18 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_19></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><B>FOURTH QUARTER RESULTS </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statements of Comprehensive Income</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands,
      except per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Revenues </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;60,512 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;108,959 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cost of sales </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(41,235</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(52,461</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Gross profit </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>19,277 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>56,498 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>General and administrative </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(5,377</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(5,159</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Exploration and evaluation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,664</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(3,971</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other operating income (expenses) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(25,709</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,894</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Gain (loss) on contribution
      to joint venture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,095
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(14,473</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>45,569 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Finance expenses </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(4,632</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(5,037</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Finance income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>9,909
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,775
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Earnings (loss) before income taxes </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(9,196</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>42,307 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
    <TD  width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Income tax recovery (expense) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,502 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(16,757</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Net earnings (loss)
      for the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;(7,694</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;25,550</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Other comprehensive income (loss): </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Unrealized gains (losses) on available-for-sale financial assets,
      net of tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(1,483</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>697 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total other comprehensive
      income (loss) for the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;(1,483</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;697</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total comprehensive
      income (loss) for the period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;(9,177</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;26,247</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Earnings per share</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Basic </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(0.04</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;0.14 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Diluted </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;(0.04</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;0.13 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Weighted-average shares outstanding (thousands)</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Basic </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>195,771 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>187,159 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Diluted </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>200,306 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>204,062 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="12%" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="12%" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=right>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>19 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_20></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Consolidated Statements of Cash Flows</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Operating activities</B> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net earnings (loss) for the period </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;(7,694</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;25,550 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Adjustments for: </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Depreciation </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,369 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,790 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Income tax expense (recovery)
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,502</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>16,757 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Income tax paid </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(5,175</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(525</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Share-based compensation
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,564 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,158 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Unrealized loss on derivatives </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>21,929 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,509 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Finance expenses </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>7,746 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,531 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Finance income </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(3,851</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,343 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Gain on contribution to
      joint venture </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,095</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Other operating activities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,023 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(6</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Net change in non-cash working capital </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(8,623</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(15,756</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash provided by operating activities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>7,786 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>37,256 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Investing activities</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Purchase of property, plant and equipment
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(28,942</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(16,886</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Purchase of financial assets </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(22,766</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(5,685</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Interest received </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,976 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,548 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Proceeds from sale of financial assets </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>69,955 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Other investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(471</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>5,712 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash provided by (used for) investing activities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>20,752 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(15,311</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Financing activities</B> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Repayment of debt </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,900</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,274</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Interest paid </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(8,408</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,023</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Common shares issued for cash </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,073 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>975 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash provided by (used for) financing activities </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(10,235</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,322</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Effect of exchange
      rate changes on cash and equivalents </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(8,594</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(3,247</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Increase in cash and equivalents </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>9,709 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>16,376 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cash and equivalents,
      beginning of period </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>268,083 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>195,417 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Cash and equivalents, end of period</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;277,792</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;211,793</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>20 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_21></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Earnings </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Net earnings (loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(7,694</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;25,550 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(33,244</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(130%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Unrealized loss on derivatives, net of tax </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>16,118 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,794 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,324 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>798% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Changes in fair value of financial instruments
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,541</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(98</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,443</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>&gt;999% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Foreign currency translation losses </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,383 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,208 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(4,825</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(78%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Gain on contribution to joint venture,
      net of tax </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(794</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>794 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(100%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid"
      align=left>&nbsp;Non-recurring consulting expenses, net of tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,675
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,675
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>100%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Adjusted net earnings <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;9,941 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;32,660 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(22,719</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(70%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> Adjusted net earnings is non-GAAP financial
performance measures with no standard definition under IFRS. See pages 30-33 of
this MD&amp;A. </P>
<P align=justify>Contributing to the $23-million decrease in the quarterly
adjusted net earnings year-over-year are the following changes: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>$48-million decrease in revenues;
  <LI>offset by an $11-million decrease in cost of sales;
  <LI>$2-million impairment on plant and equipment;
  <LI>$3-million increase in interest expense associated with the 2011 senior
  notes issuance;
  <LI>offset by a $3-million increase in finance income;
  <LI>$11-million increase in foreign exchange gains; and
  <LI>$7 million for the associated tax effects of these items. </LI></UL>
<P align=justify>Each of the above-noted changes is examined in further detail
in the sections below. </P>
<P align=justify><I>Revenues </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper concentrate </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;53,998 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;102,017 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(48,019</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(47%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Copper cathode </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,199
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,472
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(273</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(11%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; Total copper sales </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;56,197 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;104,489 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(48,292</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(46%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum concentrate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,439 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,193 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>246 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>8% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Silver contained in copper concentrate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>876 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,277 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(401</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(31%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;60,512 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;108,959 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(48,447</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(44%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>(thousands of pounds, unless otherwise noted) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper concentrate </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,767 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>24,531 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(9,764</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(40%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Copper cathode </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>670 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>666 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; Total copper sales </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>15,437 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25,197 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(9,760</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(39%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Average realized copper price (US$ per pound)
      <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;3.56 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4.09 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(0.53</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(13%</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Molybdenum concentrate
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>269 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>196 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>100 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>51% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> The average exchange rate used for 2011 was
CAD/USD $0.9893 (2010: $1.03) . </P>
<P align=center>21 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_22></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>The 39% decrease in sales volumes was primarily due to
scheduling of shipments of copper concentrate. Consequently, there was a large
inventory of copper concentrate on hand at the end of the fourth quarter 2011
which was shipped during the first week of January 2012. </P>
<P align=justify>The average copper price realized by the Company in both
quarters exceeded the LME prices for the periods. According to the LME, copper
averaged US$3.40 per pound in fourth quarter 2011 and US$3.92 per pound in the
prior-year quarter. The difference between realized copper prices and the
average market price for the fourth quarter 2011 reflects the pricing of 10.6
million pounds of copper concentrate not yet settled using the copper price
forward curve as at December 31, 2011. The spot price for copper closed midway
between the high and low for the fourth quarter at US$3.43 per pound on December
30, 2011. </P>
<P align=justify>Molybdenum revenues totaled $3.4 million in fourth quarter 2011
which is comparable to the prior-year quarter.</P>
<P align=justify><I>Cost of sales </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%" align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands,
      unless otherwise noted) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Direct mining costs </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;32,777 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;30,056 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;2,721 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>9% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Depreciation </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,200 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,685 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,485</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(5%</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Treatment and refining costs </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,973 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,757 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>785 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(20%</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Transportation costs </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,400 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>5,029 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,629 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(32%</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Changes in inventories of finished goods and WIP </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(115</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>8,934 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(9,049</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(101%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>41,235 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>52,461 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(11,226</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(21%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Copper production (thousands of pounds) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>16,753 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,577 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(824</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(5%</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper sales (thousands of pounds) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>15,437 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25,197 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(9,760</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(39%</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Direct mining costs per pound produced (per
      pound) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1.96 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1.71 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.25 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>14% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Depreciation per pound produced (per pound) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>0.13 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>0.27 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(0.14</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(51%</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Treatment and refining costs per pound sold
      (per pound) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.19 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.15 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>0.04 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>29% </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Transportation costs
      per pound sold (per pound) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.22
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.20
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>0.02
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>10% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The 21% decrease in cost of sales reflects the 39% decrease in
copper sales volumes in fourth quarter 2011 compared to the prior-year quarter.
The increase in direct mining costs is partially attributable to higher diesel,
tires, labour, repairs and maintenance, and explosives costs. Also contributing
to the increase in direct mining costs on a &#145;per unit of production&#146; basis is
lower production quarter-over-quarter as a result of lower head grades and
recoveries.</P>
<P align=justify>Depreciation expense included in fourth quarter 2011 cost of
sales has decreased due, in part, to a build-up of inventory during the quarter
which includes capitalized depreciation expenses. Also, fourth quarter 2010
depreciation was higher than normal due to an adjustment that was made in the
quarter relating to the full year.</P>
<P align=justify>Treatment and refining costs and transportation costs have
increased on a &#145;per unit of sales&#146; basis, consistent with increase in these
costs observed in the market.</P>
<P align=center>22 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_23></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Other expenses and income </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>General and administrative </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;5,377 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;5,159 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;218 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>4% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Exploration and evaluation
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,664
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3,971
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(1,307</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(32%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Other operating expenses (income): </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Realized loss (gain) on copper derivatives </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;(599</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;658 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;(1,257</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>&gt;100% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Unrealized loss on copper derivatives
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>21,929 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,509 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>19,420 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>&gt;100% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Consulting expenses </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,279 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,279 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>100% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Impairment of plant and equipment </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,377 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,377 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>100% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Management fee
      income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(277</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(273</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>(4</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;25,709 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;2,894 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;22,815 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&gt;100% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Gain)/loss on contribution
      of joint venture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(1,095</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;1,095 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(100%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=justify>General and administrative expenses were comparable quarter
over quarter. </P>
<P align=justify>Exploration and evaluation expenses during fourth quarter 2011
were attributable to work performed at the Aley project and the New Prosperity
project. The decrease compared to the prior-year quarter is a result of reduced
spending on the New Prosperity project in the fourth quarter 2011.</P>
<P align=justify>The gain on copper derivatives during fourth quarter 2011
reflects the receipt of $2 million in proceeds on put options expiring in the
money, net of the expense related to the premium paid on these put options at
approximately US$0.20 per pound.</P>
<P align=justify>During 2011, the Company entered into copper derivative
contracts for 68.8 million pounds of 2012 copper production. These outstanding
copper derivatives are marked-to-market each period end with any changes in fair
value recognized in income as unrealized gains or losses. Since the end of the
third quarter 2011 through to the end of the year, there has been an increase in
copper prices resulting in an unrealized loss on copper derivatives in the
amount of $21.9 million.</P>
<P align=justify>In early July, we engaged consultants to work with the
Gibraltar management team over a 23-week period to design and execute programs
directed at improvements in operational performance. The total cost of this
engagement during the fourth quarter 2011 was $2.3 million. </P>
<P align=justify>Certain plant and equipment was deemed redundant upon
completion of the SAG direct feed project during 2011, which resulted in an
impairment charge being taken during fourth quarter 2011. We also identified
other assets that will no longer be utilized under our current life-of-mine plan
and recognized an impairment charge for these assets as well. The total
impairment charges for 2011 were $2.4 million. There were no impairments
identified in 2010. </P>
<P align=center>23 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_24></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Finance expenses </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest expense </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;4,198 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,058 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;3,140 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>297% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Accretion on PER </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>434 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>506 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(72</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(14%</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Foreign exchange loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,473 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,473</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(100%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;4,632 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>5,037
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;(405</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
align=right>(8%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
</TABLE>
<P align=justify>The quarter-over-quarter increase in interest expense is due to
the issuance of the senior notes early in the second quarter 2011.</P>
<P align=justify><I>Finance income </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Interest income </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;2,200 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,802 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;398 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>22% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Income realized on dual currency deposits </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,990 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(125</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,115 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>&gt;100% </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Change in fair value of financial instruments
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,541 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>98 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,443 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>&gt;100% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Foreign exchange gain
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3,178
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3,178
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>100%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;9,909 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,775 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;8,134 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&gt;100% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>Income realized on dual currency deposits increased
substantially, in line with an increase in the amount of funds invested in these
money market instruments in 2011. </P>
<P align=justify><I>Income tax </I></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="12%" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Cdn$ in thousands)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right><B>%
      Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Current expense (recovery) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(2,840</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(235</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(2,605</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>&gt;100% </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Deferred expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>1,338
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>16,992 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(15,654</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(92%</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(1,502</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;16,757 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;(18,259</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&gt;100% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Effective tax rate
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>16.3%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>39.6%
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Canadian statutory rate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>26.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>28.5% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify>The income tax recovery realized in fourth quarter 2011 is
primarily a result of deductions allowed for tax associated with the copper
hedging program which was much higher than in 2010. In addition, the difference
between depreciation rates used for tax purposes compared to rates used for
accounting purposes contributed to a higher deferred tax expense than in the
prior year&#146;s quarter. </P>
<P align=center>24 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_25></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Cash flow </I></P>
<P align=justify>The Company&#146;s primary source of liquidity is operating cash
flow. In the fourth quarter of 2011, operating cash flow was an inflow $7.8
million compared to $37.3 million for the prior-year period. The decrease in the
current quarter&#146;s operating cash flow quarter over quarter reflects the decrease
in net earnings.</P>
<P align=justify>Cash received from investing activities in the fourth quarter
of 2011 amounting to $20.8 million is mainly due to capital expenditures of
$28.9 million and purchase of financial assets of $22.8 million, offset by
proceeds from the sale and maturity of investments of $70.0 million and interest
received of $3.0 million. The comparable for the fourth quarter of 2010 was
$15.3 million of cash used in investing activities including capital
expenditures of $16.9 million, purchase of financial assets of $5.7 million,
interest received of $1.5 million and $5.7 million received from other investing
activities. </P>
<P align=justify>Cash used in financing activities was $10.2 million for the
fourth quarter ended December 31, 2011, compared to $2.3 million for the
prior-year period. The increase in the used of cash is mainly due to interest
payment on long term debt.</P>
<P align=justify><B>SUMMARY OF QUARTERLY RESULTS </B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 9pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left >&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="10" align=center style="BORDER-TOP: #000000 1px solid"> 2011
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD colspan="10" align=center style="BORDER-TOP: #000000 1px solid"> 2010
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >($ in thousands, </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD width="6%" align=center>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      >except per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q3 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q3 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=center>Q1 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Revenues </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>60,512 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>84,204 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>48,349 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>58,801 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>108,959 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>37,540 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>56,453 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>75,508 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Net earnings (loss) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>(7,694</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>30,028 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>(1,113</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>5,753 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>25,550 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>728 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>44,783 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>78,296 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >&nbsp;&nbsp; EPS <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>(0.04</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.15 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>(0.01</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.03 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.14 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.00 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.24 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.42 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Adjusted net earnings <SUP>2</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>9,941 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>7,055 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>(75</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>8,607 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>32,660 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>6,768 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>2,966 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>10,655 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >&nbsp;&nbsp; Adjusted EPS <SUP>1</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.05 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.04 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.00 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.05 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.17 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.04 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.02 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>0.06 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >EBITDA <SUP>2</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>(4,829</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>56,524 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>3,685 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>15,301 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>46,353 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>3,893 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>22,436 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>125,762 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Adjusted EBITDA <SUP>2</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>19,221 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>21,866 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>7,487 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>17,313 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>53,877 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>12,287 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>8,679 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>20,829 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left >(US$ per pound, except
      where indicated) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="6%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="6%" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left >Realized copper price <SUP>2</SUP> </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>3.56 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>3.73 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>4.25 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>4.28 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>4.09 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>3.78 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>3.18 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="6%" align=right>3.31 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left >Total cash costs of sales <SUP>2</SUP> </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>2.20 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>2.33 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>2.37 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>2.08 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>1.69 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>1.79 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>2.08 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="6%" align=right>1.65 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff align=left
    >Copper sales (million pounds) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>15.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>21.8 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>10.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>12.8 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>25.2 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>8.7 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>16.5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="6%"
    align=right>20.5 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><SUP>1</SUP> Calculated using weighted average number of shares
outstanding under the basic method. Sum of all the quarters may not add up to
the yearly total due to rounding. <BR><SUP>2</SUP> Adjusted net earnings (loss),
adjusted EPS, EBITDA, adjusted EBITDA, realized copper price and total cash
costs of sales are non-GAAP financial performance measure with no standard
definition under IFRS. See pages 30-33 of the Company&#146;s MD&amp;A. </P>
<P align=justify>Our financial results for the last eight quarters reflect:
volatile copper and molybdenum prices that impact realized sales prices;
variability in the quarterly sales volumes due to timing of shipments which
impacts revenue recognition; and, more recently, a trend of increasing
production costs primarily caused by inflationary pressures on key input costs.
The net earnings in first quarter 2010 include a gain of $65.3 million on the
contribution to the joint venture, net of tax. </P>
<P align=center>25 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_26></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><B>IFRS </B></P>
<P align=justify>We adopted IFRS effective January 1, 2011. Due to the
requirement to present comparative financial information, the effective
transition date is January 1, 2010. For a discussion of our significant
accounting policies, refer to note 2 of the Financial Statements. </P>
<P align=justify><I>Elected exemptions</I></P>
<P align=justify>IFRS 1 provides for certain mandatory exceptions and optional
exemptions for first time adopters of IFRS. We elected to take the following
IFRS 1 optional exemptions as of the transition date of January 1, 2010: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Not to apply the requirements of IFRS 3, <I>Business Combinations, </I>and
  restate business combinations that occurred prior to the transition date.
  <LI>To apply the requirements of IFRS 2, <I>Share-based Payments</I>, to share
  options granted which had not vested as at the transition date.
  <LI>To apply the borrowing cost exemption and to prospectively apply IAS 23,
  <I>Borrowing Costs.</I>
  <LI>To not retrospectively apply IFRIC 1, <I>Changes in Existing
  Decommissioning, Restoration and Similar</I> <I>Liabilities. </I>The
  simplified approach to calculating the net book value of the asset related to
  the provision for environmental rehabilitation (&#147;PER&#148;) was applied. The PER
  calculated on the transition date in accordance with IAS 37, <I>Provisions,
  Contingent Liabilities and Contingent Assets, </I>was discounted back to the
  date the liability first arose, at which date the corresponding asset was set
  up, and then accumulated depreciation was recalculated as at the transition
  date. </LI></UL>
<P align=justify><I>Impact of adoption of IFRS on financial reporting </I></P>
<P align=justify>The following tables contain summaries of the adjustments to
equity and to total comprehensive income as a result of the adoption of IFRS.
The transition to IFRS has resulted in numerous financial statement presentation
changes. A description of each of the adjustments and financial statement
presentation change is outlined in note 20 of the Financial Statements. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="15%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>January 1,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="15%"
    align=center><B>Ref.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Equity under Canadian GAAP</B> </TD>
    <TD bgColor=#e6efff  width="15%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;469,951 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;296,693 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Change in accounting method for depreciation
    </TD>
    <TD  width="15%" align=center>(i) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(668</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Reversal of impairment </TD>
    <TD bgColor=#e6efff  width="15%" align=center>(ii) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>3,338 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,574 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Provision for environmental rehabilitation </TD>
    <TD  width="15%" align=center>(iii) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(14,290</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(16,731</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Share-based compensation </TD>
    <TD bgColor=#e6efff  width="15%" align=center>(iv) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;
      &nbsp;Deferred income tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="15%"
    align=center>(v) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,411
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>3,338
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Equity under IFRS</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="15%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;460,742 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>&nbsp;287,874 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="15%" align=center>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>Year ended</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="15%"
    align=center><B>Ref.</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Total Comprehensive Income under
      Canadian GAAP</B> </TD>
    <TD bgColor=#e6efff  width="15%" align=center>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;150,271 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Change in accounting method for depreciation
    </TD>
    <TD  width="15%" align=center>(i) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,772</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Reversal of impairment </TD>
    <TD bgColor=#e6efff  width="15%" align=center>(ii) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(99</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Provision for environmental rehabilitation </TD>
    <TD  width="15%" align=center>(iii) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,843</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Share-based compensation </TD>
    <TD bgColor=#e6efff  width="15%" align=center>(iv) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,149 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Deferred income tax </TD>
    <TD  width="15%" align=center>(v) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>280 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp; &nbsp;Gain on contribution to joint venture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="15%" align=center>(vi) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,044 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total
      Comprehensive Income under IFRS</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="15%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>&nbsp;151,030 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD></TR></TABLE>
<P align=center>26 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_27></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>The conversion to IFRS did not have an impact on total cash
costs of production per pound of copper or total cash costs of sales per pound
of copper. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i)&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;Change in accounting method for depreciation </P>
<P align=justify>On adoption of IFRS effective January 1, 2010, the Company
changed its depreciation accounting method with respect to certain components of
property, plant and equipment as management believes it more appropriately
reflects the use of the corresponding assets thereby resulting in more reliable
and relevant presentation. The impact of this change in accounting method has
been prospectively applied from January 1, 2010 as it is a change in
depreciation method and not a change in an accounting policy.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii)&nbsp;&nbsp;&nbsp;&nbsp;
Reversal of impairment </P>
<P align=justify>Under IFRS, the Company is required to reconsider whether
impairment losses recognized in prior periods no longer exist, or have decreased
on transition and thereafter on an annual basis. If such indicators exist, a new
recoverable amount should be calculated and all or part of the impairment charge
should be reversed to the extent the recoverable amount exceeds carrying value.
This is not permitted under Canadian GAAP.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii)&nbsp;&nbsp;&nbsp; Provision
for environmental rehabilitation </P>
<P align=justify>The Company has re-measured its PER as of the transition date
and estimated the amount to be included in the cost of the related asset by
discounting the liability to the date at which the liability first arose. This
calculation was done using best estimates of the historical risk-adjusted
discount rates. Accumulated depreciation under IFRS was recalculated up to the
transition date.</P>
<P align=justify>Under Canadian GAAP, the Company reduced the amount of its PER
by expected cash inflows associated with future anticipated revenue-generating
activities. Under IFRS, these amounts are recognized as a separate asset when
recovery is virtually certain. The Company concluded that the conditions for
virtual certainty do not exist and have excluded these revenues from its
calculations under IFRS.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv)&nbsp;&nbsp;&nbsp;
&nbsp;Share-based compensation </P>
<P align=justify>For the purpose of accounting for share-based payment
transactions, certain individuals previously classified as contractors under
Canadian GAAP are now classified as employees under IFRS, and the Company
records a lower expense each period, with an equal and offsetting adjustment to
contributed surplus. Additional adjustments were made as at December 31, 2010.
</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax</P>
<P align=justify>Under IFRS, the Company has derecognized deferred tax
liabilities previously recognized on temporary differences arising on the
initial recognition of the Aley property and Oakmont net profit interest (where
the accounting basis of the asset acquired exceeded its tax basis) in a
transaction which was not a business combination and affected neither accounting
income nor taxable income.</P>
<P align=justify>Under IFRS, the Company has reversed the deferred tax asset
previously recognized under Canadian GAAP related to the &#147;new mine allowance&#148;
for British Columbia mineral tax purposes. In addition, deferred taxes have been
adjusted for the changes to net book values arising as a result of the
adjustments for first-time adoption of IFRS as discussed above. </P>
<P align=center>27 </P>
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width="100%" noShade>
<A name=page_28></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi)&nbsp; &nbsp;Gain on
contribution to joint venture </P>
<P align=justify>The gain on the contribution to joint venture has been
recalculated under IFRS to reflect adjustments to the carrying values of certain
assets and liabilities of the Gibraltar mine contributed to the joint venture,
as described in references (i), (ii), (iii) and (v).</P>
<P align=justify><B>CRITICAL ACCOUNTING POLICIES AND ESTIMATES </B></P>
<P align=justify>The Company's significant accounting policies are presented in
note 2 of the Financial Statements. The preparation of the Financial Statements
in conformity with IFRS requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimates are revised and in any future periods affected. </P>
<P align=justify>Significant areas where judgment is applied include reserve and
resource estimation; asset valuations and the measurement of impairment charges
or reversals; finished and in-process inventory quantities; plant and equipment
lives; tax provisions; provisions for environmental rehabilitation; assessment
of joint control in business combinations; and share-based compensation. Key
estimates and assumptions made by management with respect to these areas have
been disclosed in the notes to the Financial Statements as appropriate.</P>
<P align=justify>The accuracy of reserve and resource estimates is a function of
the quantity and quality of available data and the assumptions made and judgment
used in the engineering and geological interpretation, and may be subject to
revision based on various factors. Changes in reserve and resource estimates may
impact the carrying value of property, plant and equipment; the calculation of
depreciation expense; the capitalization of stripping costs incurred during
production; and the timing of cash flows related to the provision for
environmental rehabilitation. </P>
<P align=justify>Changes in forecast prices of commodities, exchange rates,
production costs and recovery rates may change the economic status of reserves
and resources. Forecast prices of commodities, exchange rates, production costs
and recovery rates, and discount rates assumptions, either individually or
collectively, may impact the carrying value of derivative financial instruments,
inventory, property, plant and equipment, and intangibles, as well as the
measurement of impairment charges or reversals. </P>
<P align=justify>Subsequent to the 2011 year end, the Company was advised by its
auditors, KPMG LLP, that the Public Company Accounting Oversight Board (PCAOB)
communicated to the auditors that based on their inspection results, that an
alternative accounting treatment might be more appropriate for the Company&#146;s
2010 joint venture transaction with Cariboo. Pursuant to that transaction,
Cariboo purchased a 25% joint venture interest in the Gibraltar mining
operations for $187 million. This transaction implied a total value for the
Gibraltar mining operations of approximately $748 million and in the Company&#146;s
annual reconciliation of accounts from Canadian generally accepted accounting
principles (GAAP) to United States GAAP, it recognized a gain calculated as 100%
of the difference between the Company&#146;s carrying cost of the Gibraltar mining
operations of $338 million and its implied value, for a reported gain of $360
million. Under US GAAP, 100% of the gain is recognized if the Company no longer
controls the joint venture. The accounting identified by the PCAOB is dependent
on whether a change of control of the Gibraltar mining operations occurred as a
result of the joint venture transaction.</P>
<P align=justify>Depending on the outcome of anticipated discussions with the
PCAOB and possibly the SEC, it is possible that the Company may have to reverse
the gain recognition for US GAAP purposes on 100% of the Gibraltar mining
operations and recognize a gain only on the 25% actually sold or potentially
recognize the gain as an equity transaction rather than through income. This
would necessitate related restatements to the carrying value of the Gibraltar
mining operations and the presentation of Cariboo&#146;s minority interest but would
have no effect on cash flows in 2010 or thereafter. Based on the review of
PCAOB&#146;s comments to date, the Company believes that the </P>
<P align=center>28 </P>
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width="100%" noShade>
<A name=page_29></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>accounting approach taken on the joint venture transaction and
subsequent accounting were and continue to be appropriate.</P>
<P align=justify><B>INTERNAL CONTROLS OVER FINANCIAL REPORTING AND DISCLOSURE
CONTROLS AND PROCEDURES </B></P>
<P align=justify>The Company's management is responsible for establishing and
maintaining adequate internal control over financial reporting and disclosure
controls and procedures.</P>
<P align=justify>Our internal control system over financial reporting is
designed to provide reasonable assurance to management and the Board of
Directors regarding the preparation and fair presentation of published financial
statements. Internal control over financial reporting includes those policies
and procedures that: </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the Company;</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with IFRS, and that receipts and expenditures of the Company
      are being made only in accordance with authorizations of management and
      directors of the Company; and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      Company&#146;s assets that could have a material effect on the financial
      statements.</P></TD></TR></TABLE>
<P align=justify>Our internal control system over disclosure controls and
procedures is designed to provide reasonable assurance that material information
relating to the Company is made known to management and disclosed to others and
information required to be disclosed by the Company in our annual filings,
interim filings or other reports filed or submitted by us under securities
legislation is recorded, processed, summarized and reported within the time
periods specified in the securities legislation.</P>
<P align=justify>All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined effective can
provide only reasonable assurance with respect to financial reporting and
disclosure.</P>
<P align=justify>Other than changes related to our conversion to IFRS, there
have been no changes in our internal control over financial reporting and
disclosure controls and procedures during the year ended December 31, 2011 that
have materially affected, or are reasonably likely to materially affect,
internal control over financial reporting and disclosure.</P>
<P align=justify>The Company&#146;s management, at the direction of our chief
executive officer and chief financial officer, have evaluated the effectiveness
of the design and operation of the internal controls over financial reporting
and disclosure controls and procedures as of the end of the period covered by
this report, and have concluded that they were effective at a reasonable
assurance level. </P>
<P align=justify><B>RELATED PARTY TRANSACTIONS </B></P>
<P align=justify><I>Key management personnel </I></P>
<P align=justify>Key management personnel include the members of the Board of
Directors and executive officers of the Company. </P>
<P align=center>29 </P>
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width="100%" noShade>
<A name=page_30></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>The Company contributes to a post-employment defined
contribution pension plan on the behalf of certain key management personnel.
This retirement compensation arrangement (RCA Trust) was established to provide
benefits to certain executive officers on or after retirement in recognition of
their long service. Upon retirement, the participant is entitled to the
distribution of the accumulated value of the contributions under the RCA Trust.
Obligations for contributions to the defined contribution pension plan are
recognized as compensation expense in profit or loss in the periods during which
services are rendered by the executive officers. </P>
<P align=justify>Certain executive officers are entitled to termination and
change in control benefits. In the event of termination without cause, other
than a change in control, these executive officers are entitled to an amount
ranging from 9-month to 12-month&#146;s salary. In the event of a change in control,
if a termination without cause or a resignation occurs within 12 months
following the change of control, these executive officers are entitled to
receive, among other things, an amount ranging from 24-month to 32-months&#146;
salary and accrued bonus, and all stock options held by these individuals will
fully vest. </P>
<P align=justify>Executive officers and directors also participate in the
Company&#146;s share option program.</P>
<P align=justify>During 2011, the Company incurred total compensation expenses
of $11.3 million for its key management personnel, compared to $10.4 million in
2010.</P>
<P align=justify><I>Other related parties </I></P>
<P align=justify>Hunter Dickinson Services Inc. ("HDSI") is a private company
which has certain directors in common with the Company. HDSI carries out
geological, engineering, corporate development, administrative, financial
management, investor relations, and other management activities for the Company.
The terms and conditions of the transactions are similar to transactions
conducted on an arm&#146;s length basis. During 2011, the Company incurred general
and administrative expenses of $2.2 million, exploration and evaluation expenses
of $0.8 million, and prepaid rent of $1.0 million with HDSI. This compares to
general and administrative expenses of $2.3 million and exploration and
evaluation expenses of $0.7 million in 2010. </P>
<P align=justify>The Gibraltar joint venture pays a management fee to the
Company for services rendered as operator of the Gibraltar mine. During the year
2011, the Company has earned $0.8 million of other operating income for these
services rendered, compared to $0.6 million earned in 2010. </P>
<P align=justify><B>NON-GAAP PERFORMANCE MEASURES </B></P>
<P align=justify>This document includes certain non-GAAP performance measures
that do not have a standardized meaning prescribed by IFRS. These measures may
differ from those used by, and may not be comparable to such measures as
reported by, other issuers. The Company believes that these measures are
commonly used by certain investors, in conjunction with conventional IFRS
measures, to enhance their understanding of the Company&#146;s performance. These
measures have been derived from the Company&#146;s financial statements and applied
on a consistent basis. The following tables below provide a reconciliation of
these non-GAAP measures to the most directly comparable IFRS measure.<B>
</B></P>
<P align=justify><I>Total cash costs per pound </I></P>
<P align=justify>Total cash costs of sales include all costs absorbed into
inventory, as well as by-product credits, treatment &amp; refining costs and
transportation costs, less non-cash items such as depreciation and share-based
compensation. Total cash costs per pound sold are calculated by dividing the
aggregate of the applicable costs by copper pounds sold. Total cash costs of
production are total cash costs of sales adjusted for the net movement in
inventory during the period. Total cash costs per pound produced are calculated
by dividing the aggregate of the </P>
<P align=center>30 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_31></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>applicable costs by copper pounds produced. These measures are
calculated on a consistent basis for the periods presented. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%" align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%"
align=center>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>($ in thousands, unless
      otherwise indicated) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Cost of sales</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;41,235 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;52,461 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;165,565 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;157,759 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Less non-cash items: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Depreciation </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,220 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,967 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,145 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,656 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Share-based compensation </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(42</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>137 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Less by-product credits: </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Molybdenum </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,439 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,193 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,317 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>12,656 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Silver </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>876 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1,277 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,473 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2,885 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Total cash costs of sales</B> </TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;34,762</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;43,024</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;135,494 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;129,562 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Total copper sold (thousand pounds) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>15,438 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>25,197 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>60,776 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>70,839 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total cash costs per pound sold </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>2.25 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>1.71 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>2.23 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>1.83 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Average exchange rate for the period (CAD/USD) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1.023 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1.0131 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>0.9893 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1.0300 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Total cash costs
      of sales (US$ per pound)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;2.20</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;1.69</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;2.25</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;1.78</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp; </TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Total cash costs of sales</B> </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;34,762 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;43,024 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;135,494 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>&nbsp;129,562 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Net change in inventory </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(13</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(8,624</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,144</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>3,544 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Total cash costs of production</B> </TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;34,749</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;34,400</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;132,350</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;133,106</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Less offsite costs: </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp; </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Treatment and refining costs </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(2,973</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(3,757</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(11,632</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(11,563</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;Transportation costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(3,400</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(5,029</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(13,108</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(16,275</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Net operating cash costs</B> </TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;28,376</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;25,614</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;107,610</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left><B>$</B></TD>
    <TD width="12%" align=right><B>&nbsp;105,268</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Total copper produced (thousand pounds) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>16,753 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,577 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>62,165 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>75,050 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total cash costs per pound produced </TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>1.69 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>1.46 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>1.73 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>$</TD>
    <TD width="12%" align=right>1.40 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Average exchange rate for the period (CAD/USD) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1.0230 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1.0131 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>0.9893 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>1.0300 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Net operating cash costs of production</B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>&nbsp;<B>(US$ per pound)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;1.66</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;1.44</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;1.75</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;1.36</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>31 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_32></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify><I>Adjusted net earnings </I></P>
<P align=justify>Adjusted net earnings removes the effect of the following
transactions from net earnings as reported under IFRS: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Unrealized gains/losses on derivative instruments;
  <LI>Gains/losses on the sale of financial instruments;
  <LI>Changes in the fair value of financial instruments;
  <LI>Foreign currency translation gains/losses; and
  <LI>Non-recurring transactions, including non-recurring tax adjustments.
</LI></UL>
<P align=justify>Management believes these transactions do not reflect the
underlying operating performance of our core mining business and are not
necessarily indicative of future operating results. Furthermore, unrealized
gains/losses on derivative instruments, changes in the fair value of financial
instruments, and foreign currency translation gains/losses are not necessarily
reflective of the underlying operating results for the reporting periods
presented.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD  width="1%" align=center>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>($ in thousands, except
      per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Net earnings (loss)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;(7,694</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;25,550</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;26,974</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>&nbsp;149,357</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Unrealized loss on derivatives, net of tax </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>16,118 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,794 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(16,864</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(6,347</TD>
    <TD  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Gain on sale of shares </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(6,443</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(4,087</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Changes in fair value of financial instruments </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,541</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(98</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>307 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>25 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Foreign currency translation losses (gains)
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,383 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>6,208 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>5,907 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>10,467 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Loss on extinguishment of debt </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,136 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Loss/(gain) on contribution to joint venture,
      net of tax </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(794</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,930 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(63,623</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Non-recurring consulting expense, net of tax </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,675 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,647 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Non-recurring tax adjustments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(30,600</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Adjusted net earnings</B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;9,941</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;32,660</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;17,458</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;57,328</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left><B>Adjusted EPS</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>0.05</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>0.17</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>0.09</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="1%" align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>0.31</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
    width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><I>EBITDA and adjusted EBITDA </I></P>
<P align=justify>EBITDA represents net earnings before interest, income taxes,
and depreciation. We present EBITDA because we consider it an important
supplemental measure of our performance and believe it is frequently used by
securities analysts, investors and other interested parties in the evaluation of
companies in our industry, many of which present EBITDA when reporting their
results. We believe issuers of &#147;high yield&#148; securities also present EBITDA
because investors, analysts and rating agencies consider it useful in measuring
the ability of those issuers to meet debt service obligations. We believe EBITDA
is an appropriate supplemental measure of debt service capacity, because cash
expenditures on interest are, by definition, available to pay interest, and tax
expense is inversely correlated to interest expense because tax expense goes
down as deductible interest expense goes up; depreciation is a non-cash charge.
</P>
<P align=justify>We present adjusted EBITDA as a further supplemental measure of
our performance and ability to service debt. We prepare adjusted EBITDA by
adjusting EBITDA to eliminate the impact of a number of items we consider
non-recurring or do not consider indicative of our ongoing operating
performance. You are encouraged to evaluate each adjustment and the reasons we
consider them appropriate for supplemental analysis.</P>
<P align=center>32 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_33></A> <BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left><B><FONT size=4>TASEKO MINES LIMITED </FONT></B></TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><FONT size=3>Management&#146;s Discussion and Analysis </FONT></TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=3>&nbsp;</FONT></TD>
  </TR>
</TABLE>
<P align=justify>Adjusted EBITDA is calculated by adding to EBITDA certain items
of expense and deducting from EBITDA certain items of income that we believe are
not likely to recur or are not indicative of our future operating performance
consisting of: </P>
<UL style="TEXT-ALIGN: justify">
  <LI>Unrealized gains/losses on derivative instruments;
  <LI>Gains/losses on the sale of marketable securities;
  <LI>Changes in the fair value of financial instruments;
  <LI>Foreign currency translation gains/losses; and
  <LI>Non-recurring transactions. </LI></UL>
<P align=justify>While some of the adjustments are recurring, we believe the
elimination of the gain on the contribution to the joint venture, loss on the
extinguishment of debt, and gains/losses on the sale of marketable securities do
not reflect the underlying performance of our core mining business and are not
necessarily indicative of future results. Furthermore, unrealized gains/losses
on derivative instruments, foreign currency translation gains/losses and changes
in the fair value of financial instruments are not necessarily reflective of the
underlying operating results for the reporting periods presented. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%" align=left>&nbsp;</TD>
    <TD colspan="4"
      align=center style="BORDER-TOP: #000000 1px solid"><B>Three months ended</B>
    </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%"
align=center>&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="1%"
align=center>&nbsp;</TD>
    <TD colspan="4" align=center style="BORDER-TOP: #000000 1px solid"><B>Year
      ended</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" width="2%"
  align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD width="2%" align=center>&nbsp;</TD>
    <TD width="1%" align=center>&nbsp;</TD>
    <TD colspan="4" align=center><B>December 31,</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>($ in thousands, except
      per share amounts) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Net earnings (loss)</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;(7,694</B></TD>
    <TD bgColor=#e6efff width="2%" align=left><B>)</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;25,550</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;26,974</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left><B>$</B></TD>
    <TD bgColor=#e6efff width="12%" align=right><B>&nbsp;149,357</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Add: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Depreciation </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,369 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>4,790 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,827 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>12,973 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Interest expense </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,197 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,058 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>13,957 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,542 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;Interest income </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(2,200</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,802</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(6,859</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(14,933</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Income tax expense
      (recovery) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
    align=right>(1,501</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>16,757 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>23,782 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>46,504 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>EBITDA</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(4,829</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;46,353 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;70,681 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;198,443 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Adjustments: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp; </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Unrealized (gain)/loss on derivative instruments
    </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>21,929 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,509 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(22,944</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(8,877</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Gain on sale of marketable securities </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(6,443</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(4,087</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Changes in fair value of financial instruments
    </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(1,541</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(98</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>307 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>25 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Foreign currency translation losses </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,383 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>6,208 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>5,907 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>10,467 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Loss on extinguishment of debt </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,136 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Loss/(gain) on contribution to joint venture </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(1,095</TD>
    <TD width="2%" align=left>) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>3,987 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(98,157</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff
      align=left>Non-recurring consulting expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>2,279 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>6,322 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right><B>-</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="2%"
    align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Adjusted EBITDA</B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;19,221</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;53,877</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;57,817</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>&nbsp;99,950</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="2%"
    align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>33 </P>
<HR align=center color=black SIZE=5 width="100%" noShade>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
