STRATEGIC ANALYSIS FOR A NEW ENTRANT INTO THE NIOBIUM INDUSTRY

Taseko Mines Limited (“Taseko”) believes that it can penetrate the highly concentrated niobium industry through its Aley Niobium Project (“Aley”). This thesis addresses the following questions: Is the niobium industry attractive enough to further advance the exploration anddevelopment of Aley? If so, how should Taseko finance the additional exploration and engineering work necessary to develop Aley to the feasibility stage?This paper concludes that the following support Taseko’s assumptions about theattractiveness of the niobium industry and its entry into the industry: a foreseeable demand growth for niobium, a steadily increasing niobium price, and a low intensity competitive environment. The paper further concludes that Aley is an attractive niobium project and Taseko can be successful in exploring, developing and operating Aley.Due to the attractiveness of both the niobium industry and Aley as a niobium project,Taseko should further advance Aley to the feasibility stage. After evaluating a number of financing options as well as Taseko’s internal capabilities, Taseko should use the free cash flows generated from its operations to finance the advancement of Aley.