6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

Filed as at July 26, 2004

TASEKO MINES LIMITED
(Exact name of Registrant specified in its charter)

BRITISH COLUMBIA, CANADA
(Jurisdiction of incorporation or organization)

Suite 1020, 800 West Pender Street
Vancouver, British Columbia, Canada, V6C 2V6
(Address of principal executive offices)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
  Form 20-F  x    Form 40-F   ¨   
 
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): ____
 
 
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
 
 
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): ____
 
 
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.
 
Yes   ¨   No   ¨   
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
 

SUBMITTED HEREWITH

Exhibits

99.1	Third Quarter Financial Statements for the Period Ended June 30, 2004
99.2	Management's Discussion and Analysis for the Period Ended June 30, 2004

SIGNATURES

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.

	TASEKO MINES LIMITED
Dated: July 26, 2004	By:	/s/ Jeffery R. Mason
		Jeffrey R. Mason
		Director and Chief Financial Officer

EX-99.1

TASEKO MINES LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED JUNE 30, 2004

(Expressed in Canadian Dollars)

(Unaudited)

These financial statements have not been reviewed by the Company's auditors

TASEKO MINES LIMITED
Consolidated Balance Sheets
(Expressed in Canadian Dollars)
(Unaudited)

		June 30,			September 30,
		2004			2003
Assets
Current assets
Cash and equivalents	$	19,319,636		$	2,424,221
Amounts receivable		349,210			1,049,093
Advances to related parties (note 11)		456,927			224,538
Supplies inventory		2,313,664			2,278,096
Prepaid expenses		64,548			134,207
		22,503,985			6,110,155
Property, plant and equipment (note 5)		9,071,464			9,554,186
Deposits (note 6(a))		10,833,626			-
Reclamation deposits (notes 4, 6(a) and 6(d))		17,548,485			16,757,274
Mineral property interests (note 6)		28,813,296			28,813,296
	$	88,770,856		$	61,234,911
Liabilities and Shareholders' Equity
Current liabilities
Operating line of credit (note 7)	$	1,509,289		$	1,993,396
Accounts payable and accrued liabilities		2,573,325			1,857,740
		4,082,614			3,851,136
Reclamation liability (note 5)		32,700,000			32,700,000
		36,782,614			36,551,136
Shareholders' equity
Share capital (note 8)		140,483,399			99,446,319
Convertible debenture (note 8(c))		20,331,794			19,599,520
Tracking preferred shares (note 4)		26,641,948			26,641,948
Contributed surplus (note 8(f))		2,963,410			65,344
Deficit		(138,432,309	)		(121,069,356	)
		51,988,242			24,683,775
Nature of operations (note 1)
Commitments (note 6)
Subsequent events (notes 8 and 12)
	$	88,770,856		$	61,234,911

See accompanying notes to consolidated financial statements.

Approved by the Board of Directors

/s/ Ronald W. Thiessen	/s/ Jeffrey R. Mason
Ronald W. Thiessen	Jeffrey R. Mason
Director	Director

TASEKO MINES LIMITED
Consolidated Statements of Operations
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended June 30,						Nine months ended June 30,
		2004			2003			2004			2003
Expenses
Conference and travel	$	19,062		$	12,492		$	81,382		$	38,949
Consulting		94,875			40,309			195,340			147,986
Corporation taxes		20,000			(44,911	)		31,168			(25,173	)
Depreciation		181,434			176,617			541,819			531,611
Exploration (schedule)		3,939,477			449,458			7,045,561			1,422,228
Interest and finance charges		452,616			25,952			481,156			77,729
Laboratory and other services		-			-			(732,054	)		-
Legal, accounting and audit		92,940			53,960			132,671			128,830
Office and administration		199,224			78,827			510,938			194,273
Premium paid for acquisition of Gibraltar Reclamation
Trust Limited Partnership		-			-			5,095,249			-
Property investigation		-			37,071			141,063			47,805
Refinery project		-			500,000			-			500,000
Shareholder communication		18,694			4,223			623,200			66,854
Stock-based compensation (note 8(d))		1,526,084			-			3,137,066			-
Trust and filing		13,842			8,421			35,478			19,863
		6,558,248			1,342,419			17,320,037			3,150,955
Other items
Interest and other income		228,670			353,537			689,358			591,669
Gain on sale of property, plant and equipment		-			-			-			131,638
		228,670			353,537			689,358			723,307
Loss for the period	$	(6,329,578	)	$	(988,882	)	$	(16,630,679	)	$	(2,427,648	)
Basic and diluted loss per common share (notes 3 and 8(c))	$	(0.08	)	$	(0.02	)	$	(0.24	)	$	(0.07	)
Weighted average number of
common shares outstanding		84,210,353			53,635,474			71,383,512			44,660,250
Consolidated Statements of Deficit
(Expressed in Canadian Dollars)
(Unaudited)
		Three months ended June 30,						Nine months ended June 30,
		2004			2003			2004			2003
Deficit, beginning of period
As original reported	$	(131,858,640	)	$	(116,398,089	)	$	(121,069,356	)	$	(114,959,323	)
To adjust for the accounting for the convertible
debenture (note 8(c))		-			(2,154,500	)		-			(1,710,697	)
As restated		(131,858,640	)		(118,552,589	)		(121,069,356	)		(116,670,020	)
Loss for the period		(6,329,578	)		(988,882	)		(16,630,679	)		(2,427,648	)
Accretion expense on convertible debenture		(244,091	)		(221,900	)		(732,274	)		(665,703	)
Deficit, end of period	$	(138,432,309	)	$	(119,763,371	)	$	(138,432,309	)	$	(119,763,371	)

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)

		Three months ended June 30,						Nine months ended June 30,
Cash provided by (used for):		2004			2003			2004			2003
Operating activities
Loss for the period	$	(6,329,578	)	$	(988,882	)	$	(16,630,679	)	$	(2,427,648	)
Items not involving cash
Accrued interest on reclamation deposits		(106,989	)		(339,552	)		(389,900	)		(557,343	)
Depreciation		181,434			176,617			541,819			531,611
Stock-based compensation		1,526,084			69,355			3,137,066			84,157
Write down on dissolution of subsidiaries		-			13,253			-			13,253
Gain on sale of property, plant and equipment		-			-			-			(131,638	)
Acquisition premium paid for remaining business
of GESL Partnership		-			500,000			-			500,000
Acquisition premium paid for Gibraltar Reclamation
Trust Limited Partnership		-			-			5,095,249			-
Shares issued for loan guarantee		450,000			-			450,000			-
Changes in non-cash operating working capital
Amounts receivable		57,014			(262,128	)		699,883			(168,056	)
Supplies inventory		(20,247	)		10,003			(35,568	)		(623	)
Prepaid expenses		5,349			3,102			69,659			79,908
Accounts payable and accrued liabilities		1,505,315			(88,106	)		715,585			(75,735	)
		(2,731,618	)		(906,338	)		(6,346,886	)		(2,152,114	)
Investing activities
Deposit on property, plant and equipment		(8,472,457	)		-			(10,833,626	)		-
Purchase of property, plant and equipment		(30,432	)		-			(59,097	)		-
Proceeds received on sale of property, plant and equipment		-			-			-			160,000
Reclamation deposits		-			-			(401,311	)		2,500,000
		(8,502,889	)		-			(11,294,034	)		2,660,000
Financing activities
Bank operating loan		1,509,289			6,671			(484,107	)		(3,380	)
Advances from related parties		(800,455	)		(2,884,833	)		(232,389	)		(6,353,734	)
Advances from Gibraltar Engineering Services
Limited Partnership		-			3,000,000			-			3,000,000
Advances from Gibraltar Reclamation Trust
Limited Partnership		-			-			17,097,792			-
Common shares issued for cash, net of issue costs		1,417,548			(8,361	)		18,155,039			4,045,497
		2,126,382			113,477			34,536,335			688,383
Increase in cash and equivalents		(9,108,125	)		(792,861	)		16,895,415			1,196,269
Cash and equivalents, beginning of period		28,427,761			2,028,234			2,424,221			39,104
Cash and equivalents, end of period	$	19,319,636		$	1,235,373		$	19,319,636		$	1,235,373

Supplementary cash flow disclosures (note 10)

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED
Consolidated Schedules of Exploration Expenses
(Expressed in Canadian Dollars)
(Unaudited)

					Property
Nine months ended June 30, 2004		Prosperity			Gibraltar		Harmony		Total
Exploration expenses
Assays and analysis	$	14,384		$	829,119	$	236	$	843,739
Drilling		-			1,332,596		-		1,332,596
Equipment rentals		3,493			26,198		-		29,691
Geological		3,823			219,830		2,480		226,133
Mine planning		19,176			411,103		22,370		452,649
Site activities		2,403			4,158,350		-		4,160,753
Exploration expenses during the period		43,279			6,977,196		25,086		7,045,561
Cumulative expenses, beginning of period		41,576,410			10,902,295		27,317		52,506,022
Cumulative expenses, end of period	$	41,619,689		$	17,879,491	$	52,403	$	59,551,583
					Property
Nine months ended June 30, 2003		Prosperity			Gibraltar		Harmony		Total
Exploration expenses
Assays and analysis	$	13,567		$	-	$	3,177	$	16,744
Equipment rentals		(89	)		-		-		(89	)
Claim staking		-			500		-		500
Geological		3,965			43,213		486		47,664
Mine planning		45,352			189,165		10,940		245,457
Site activities		165			1,105,831		5,956		1,111,952
Exploration expenses during the period		62,960			1,338,709		20,559		1,422,228
Cumulative expenses, beginning of period		41,487,910			8,988,583		-		50,476,493
Cumulative expenses, end of period	$	41,550,870		$	10,327,292	$	20,559	$	51,898,721

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

1.

Nature of operations Taseko Mines Limited ("Taseko" or the "Company") is incorporated under the laws of the Province of British Columbia. Its principal business activities are the operations of the Gibraltar Copper Mine, which is currently on standby care and maintenance, and the exploration of the Company’s 100% owned Gibraltar area exploration properties, the Prosperity Gold-Copper Property, and the Harmony Gold Property. The Gibraltar Mine and the Prosperity Gold Property are located in south central British Columbia, Canada, near the City of Williams Lake. The Harmony Gold Property is located on Graham Island, Queen Charlotte Islands - Haida Gwaii, British Columbia. The Company’s continuing operations and the underlying value and recoverability of the amounts shown for the Prosperity and Harmony mineral property interests are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of its mineral property interests, and upon future profitable production or proceeds from the disposition of its mineral property interests. The recoverability of the amounts shown for the Gibraltar Mine mineral property interest and related plant and equipment and supplies inventory is dependent upon the ability of the Company to obtain the necessary financing to re-start operations of the mine, should metal prices and other factors warrant it, and upon future profitable production or proceeds from the disposition of the mine. These financial statements are prepared on the basis that the Company will continue as a going concern. The Company has recorded significant losses and operating cash flow deficiencies in each of the last three fiscal years. Management recognizes that the Company must generate additional financial resources in order to meet liabilities as they come due and to enable it to continue operations. The Company and its financial advisors are actively targeting sources of additional funding through alliances with financial, exploration and mining entities or other business and financial transactions which would generate sufficient resources to assure continuation of the Company’s operations and exploration programs. However, there can be no assurances that the Company will obtain additional financial resources and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to curtail operations and exploration activities. These financial statements do not reflect adjustments, which could be material, to the carrying values of assets and liabilities which may be required should the Company be unable to continue as a going concern.

2.

Basis of presentation and principles of consolidation These financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). These consolidated financial statements include the accounts of Taseko, its wholly-owned subsidiary, Gibraltar Mines Ltd. (note 6(a)), its 70% owned subsidiary Cuisson Lake Mines Ltd. and its interest in Gibraltar Reclamation Trust Limited Partnership (“GRT Partnership”) (note 6(d)). All material intercompany accounts and transactions have been eliminated.

page 6

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

3.	Significant accounting policies
(a)	Cash and equivalents Cash and equivalents consist of cash and highly liquid investments, having maturity dates of three months or less from the date of acquisition, that are readily convertible to known amounts of cash.
(b)	Supplies inventory Supplies inventory is reported at the lower of moving average cost and net realizable value.
(c)	Property, plant and equipment Plant and equipment are stated at cost less accumulated depreciation. Depreciation is recorded over the estimated economic life of the plant and equipment on a straight line basis at annual rates ranging from 1.3% to 16.5%, except for the solvent extraction/electrowinning plant and equipment included in Gibraltar Mine plant and equipment (note 5), which are depreciated on a straight line basis at rates from 20% to 50% per annum.
(d)	Mineral property interests The Company defers mineral property acquisition costs on a property-by-property basis. Exploration expenditures and option payments incurred prior to the determination of the feasibility of mining operations are charged to operations as incurred. Development expenditures incurred subsequent to such determination, to increase production, or to extend the life of existing production are capitalized, except as noted below. Such acquisition costs and deferred development expenditures are amortized and depreciated over the estimated life of the property, or written off to operations if the property is abandoned, allowed to lapse, or if there is little prospect of further work being carried out by the Company or its option or joint venture partners. All costs incurred by the Company during the standby care and maintenance period at the Gibraltar Mine are expensed as incurred. Mineral property acquisition costs include the cash consideration and the fair market value of common shares, based on the trading price of the shares at the agreement date, issued for mineral property interests, pursuant to the terms of the relevant agreement. Payments relating to a property acquired under an option or joint venture agreement, where such payments are made at the sole discretion of the Company, are recorded in the accounts upon payment. Costs related to feasibility work and the development of processing technology are expensed as incurred. Costs incurred subsequent to the determination of the feasibility of the processing technology will be capitalized and amortized over the life of the related plant. Administrative expenditures are expensed as incurred.

page 7

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

	The amount presented for mineral property interests represents costs incurred to date and the accumulated fair value of shares issued to date relating to acquisition costs, less write-downs (note 6), but does not necessarily reflect present or future values.
(e)	Share capital The Company records proceeds from share issuances net of issue costs. Shares issued for consideration other than cash are valued at the quoted market price on the date the agreement to issue shares was reached. The proceeds, net of issue costs, from common shares issued pursuant to flow-through share financing agreements are credited to share capital and the tax benefits of these exploration expenditures are transferred to the purchaser of the shares.
(f)	Share-based compensation (see also note 3(g)) The Company has a share option plan which is described in note 8(d). The Company accounts for all non-cash share-based payments and awards that are direct awards of stock, that call for settlement in cash or other assets, or that are share appreciation rights which call for settlement by the issuance of equity instruments, granted on or after October 1, 2002, using the fair value based method. Under the fair value based method, share-based payments are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, or liabilities incurred, whichever is more reliably measurable. The fair value of non-cash share-based payments is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the period and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of non-cash share-based payments that are fully vested and non-forfeitable at the grant date is measured and recognized at that date. Under the fair value based method, compensation cost attributable to awards that are direct awards of shares, or share appreciation rights which call for settlement by the issuance of equity instruments, is measured at fair value at the grant date and recognized over the vesting period. Compensation cost attributable to awards which call for settlement in cash or other assets is measured at fair value at the grant date and recognized over the vesting period. For awards that vest at the end of a vesting period, compensation cost is recognized on a straight-line basis; for awards that vest on a graded basis, compensation cost is recognized on a pro-rata basis over the vesting period. Consideration received on the exercise of stock options is recorded as share capital and the related contributed surplus is transferred to share capital.

page 8

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

(g)	Change in Accounting Policy – Share-Based Compensation Effective October 1, 2002, the Company adopted the new Recommendations of the Canadian Institute of Chartered Accountants relating to the accounting for stock-based compensation and other stock-based payments. Under the new standard, payments to non-employees, and to employee awards that are direct awards of stock, that call for settlement in cash or other assets, or that are stock appreciation rights which call for settlement by the issuance of equity instruments, are accounted for using the fair value method and the related compensation expense is included in operations, with an offset to contributed surplus. No compensation expense is required to be recorded for all other non-cash stock-based employee compensation awards; however the Company is permitted to, and has elected to, include these costs in operations. Prior to the adoption of the new standard, no compensation expense was recorded for the Company's share-based incentive plans when the options were granted. Any consideration paid by those exercising share options was credited to share capital upon receipt. The new Recommendations have been applied prospectively. The adoption of this new standard has resulted in no changes to amounts previously reported.
(h)	Income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are computed based on differences between the carrying amounts of assets and liabilities on the balance sheet and their corresponding tax values, generally using the substantively enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Future income tax assets also result from unused loss carry forwards, resource-related pools, and other deductions. Future tax assets are recognized to the extent that they are considered more likely than not to be realized. The valuation of future income tax assets is adjusted, if necessary, by the use of a valuation allowance to reflect the estimated realizable amount.
(i)	Loss per common share Basic loss per common share is calculated by dividing the loss available to common shareholders by the weighted average number of common shares outstanding during the period. For all periods presented, loss available to common shareholders equals the reported loss. Diluted loss per share is calculated using the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period.

page 9

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

	In the Company’s case, diluted loss per share is the same as basic loss per share as the effect of the outstanding options and warrants would be anti-dilutive.
(j)	Fair value of financial instruments The carrying amounts of cash and equivalents, amounts receivable, prepaids, reclamation deposits, bank operating loan and accounts payable and accrued liabilities, approximate their fair values due to their short term nature. The fair values of the convertible debenture and the tracking preferred shares are not readily determinable with sufficient reliability due to the difficulty in obtaining appropriate market information. It is not practicable to determine the fair values of the advances due to/from related parties because of the related party nature of such amounts and the absence of a secondary market for such instruments. Details of the terms of these financial instruments are disclosed in these notes to the financial statements.
(k)	Use of estimates The presentation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas requiring the use of management estimates relate to the impairment of mineral property interests and plant and equipment, the balance of reclamation liability, rates for depreciation and the assumptions used in computing share-based compensation and the fair value of the convertible debentures. Actual results could differ from these estimates.
(l)	Segment disclosures The Company operates in a single reportable operating segment, the exploration, development and operation of mineral property interests, within the geographic area of British Columbia, Canada.
(m)	Comparative figures Certain of the prior periods’ comparative figures have been restated to conform with the presentation adopted for the current period.
4.	Arrangement agreement In October 2001, the Company and its subsidiary Gibraltar Mines Ltd. (“Gibraltar") completed the acquisition of the Harmony Gold Property and related assets from Continental Minerals Corporation ("Continental"), a British Columbia company with certain directors in common with Taseko, for 12,483,916 series "A" non-voting tracking preferred shares of Gibraltar and $2.23 million cash. The tracking preferred shares are designed to track and capture the value of the Harmony Gold Property and will be converted into common shares of Taseko upon a realization event, such as a sale to a third party or commercial production at the Harmony Gold Property, or

page 10

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

at the option of Gibraltar, if a realization event has not occurred within ten years. Accordingly, the tracking preferred shares have been classified within shareholders’ equity on the consolidated balance sheet.

As this acquisition was a related party transaction not in the normal course of business and did not result in the culmination of an earnings process, the acquisition was recorded by the Company at the net book value of the assets transferred, net of cash consideration, as follows:

Assets acquired		Amount
Property and equipment	$	8,488
Reclamation deposit		175,000
Mineral property interests		28,811,296
	$	28,994,784
Consideration given
Cash	$	2,230,000
12,483,916 tracking preferred shares of Gibraltar		26,641,948
114,800 common shares of the Company to a dissenting shareholder		122,836
	$	28,994,784

As previously noted, the Gibraltar tracking preferred shares are redeemable for common shares of Taseko upon the occurrence of certain value realization events for the Harmony Gold Property. The tracking preferred shares are redeemable at specified prices per common share of Taseko starting at $3.39 and escalating by $0.25 per year. If a realization event does not occur on or before October 16, 2011, Gibraltar has the right to redeem the tracking preferred shares for Taseko common shares at a deemed price equal to the greater of the average 20 day trading price of the common shares of Taseko and $10.00. The Taseko common shares to be issued to Continental upon a realization event will in turn be distributed pro-rata, after adjustment for any taxes, to the holders of redeemable preferred shares of Continental that were issued to Continental shareholders at the time of the Arrangement Agreement.

In connection with this acquisition, Taseko sold its interest in the Westgarde Property to Continental for $0.23 million cash, which was presented as a recovery of exploration expenses incurred, and exchanged its 5% net profits interest, valued at $0.6 million, in the Harmony Project for a 1% working interest, valued at $0.6 million, in the Company’s Prosperity Property held by a limited partnership beneficially controlled by Continental. In connection with this Arrangement Agreement, the Company undertook a bank loan in the amount of $2.0 million, which is fully secured by a private company controlled by one of the directors of Taseko. In consideration for providing security for this loan, the Company issued 606,061 common shares (note 7) to the guarantor.

page 11

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

5. Property, plant and equipment

	June 30, 2004						September 30, 2003
Prosperity Property				Accumulated		Net book				Accumulated		Net book
Equipment		Cost		depreciation		value		Cost		depreciation		value
Field	$	11,879	$	10,548	$	1,331	$	11,879	$	10,162	$	1,717
Computer and office		15,172		14,165		1,007		15,172		13,871		1,301
Total Prosperity Property	$	27,051	$	24,713	$	2,338	$	27,051	$	24,033	$	3,018
Gibraltar Mine				Accumulated		Net book				Accumulated		Net book
Plant and equipment		Cost		depreciation		value		Cost		depreciation		value
Buildings and equipment	$	5,931,580	$	473,079	$	5,458,501	$	5,931,580	$	416,225	$	5,515,355
Mine equipment		5,589,193		2,423,997		3,165,196		5,589,193		2,063,493		3,525,700
Plant and equipment		975,493		635,153		340,340		962,061		541,935		420,126
Vehicles		198,519		108,725		89,794		152,854		90,680		62,174
Computer equipment		101,162		85,867		15,295		101,162		73,349		27,813
Total Gibraltar Mine	$	12,795,947	$	3,726,821	$	9,069,126	$	12,736,850	$	3,185,682	$	9,551,168
Total property, plant
and equipment	$	12,822,998	$	3,751,534	$	9,071,464	$	12,763,901	$	3,209,715	$	9,554,186

	In accordance with the Gibraltar mine permit, the Company has pledged the mine's plant and equipment which, when taken at market value and combined with reclamation deposits (approximately $17.5 million at June 30, 2004), provide the Government of British Columbia with the required security for the estimated reclamation liability on the Gibraltar mine of $32.7 million.
6.	Mineral property interests

		June 30,		September 30,
		2004		2003
Gibraltar Copper Mine (note 6(a))	$	1,000	$	1,000
Prosperity Gold-Copper Property (note 6(b))		1,000		1,000
Harmony Gold Property (note 6(c))		28,811,296		28,811,296
	$	28,813,296	$	28,813,296

(a) Gibraltar Copper Mine In 1999, the Company acquired a 100% interest in the Gibraltar Copper Mine mineral property, located near Williams Lake, British Columbia, Canada from Boliden Westmin (Canada) Limited ("BWCL"), for $3.3 million. The acquisition included plant and equipment and supplies inventory of the Gibraltar mine. As part of its operating permits, a subsidiary of the Company agreed to incur a total of $4,000,000 on reclamation and environmental programs during the six year period July 1999 to July 2005, of which a total of $2,131,650 had been incurred to June 30, 2004.

page 12

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

In fiscal 2001, Gibraltar Mines Ltd., Gibraltar Engineering Services Limited Partnership (the "GESL Partnership") (see note 6(d)), and Cominco Engineering Services Ltd. ("CESL") concluded a Memorandum of Agreement ("MOA") to jointly complete an evaluation for a potential hydrometallurgical copper refinery at the Gibraltar Mine. The parties initially agreed to complete a $2.7 million detailed investigation of the feasibility of the refinery.

GESL Partnership is a limited partnership formed under the laws of British Columbia, which commenced business on October 1, 2000. The Company was the initial limited partner of the GESL Partnership. The principal business activity of the GESL Partnership is to conduct an integrated engineering and contract services business. It has implemented a defined work program, the results of which will contribute to a final determination of the feasibility of commercializing a hydrometallurgical technology developed by CESL for extracting copper from concentrates in a proposed refinery to be located at the Gibraltar Mine (the "Gibraltar Refinery").

The GESL Partnership has the right to provide necessary engineering services relating to a startup of operations at the Gibraltar Mine, and for the final design, tendering, procurement and construction of the Gibraltar Refinery, as well as the right to become contract operator of the Gibraltar Mine, the Gibraltar Mine concentrator and the Gibraltar Refinery. In each case, the GESL Partnership will provide its services for a fixed fee equal to industry standard rates for such services, and such services will be provided pursuant to a definitive consulting and operating agreement negotiated in good faith between the parties and containing customary industry terms and conditions.

If Gibraltar Mines Ltd. does not proceed with the construction of the Gibraltar Refinery, the GESL Partnership also has the right to construct, own and operate a refinery utilizing the CESL technology at the Gibraltar mine site, subject to the approval by CESL of satisfactory licensing arrangements for the use of the CESL technology. In addition, if Gibraltar Mines Ltd. does not proceed with the construction of the Gibraltar Refinery, the GESL Partnership has the right, until July 1, 2006, to provide engineering and contract operation services to Gibraltar Mines Ltd. or any other party, for the construction and operation of a refinery using the CESL technology on the Gibraltar property, subject to the approval by CESL of satisfactory licensing arrangements for the use of the CESL technology.

To September 30, 2002, the GESL Partnership incurred project costs of $4,956,438 (September 30, 2001 - $3,571,942), including expenses originally contemplated under the MOA. Expenses incurred in excess of the amounts agreed to in the original MOA were funded by the Company and the GESL Partnership. During fiscal 2002 and 2003, the Company acquired the business carried on by the GESL Partnership (note 6(d)).

The Company retained Procorp Services Limited Partnership ("Procorp") to provide technical, financial, management and marketing services related to all facets of the start-up, expansion and development of the Gibraltar Mine and the proposed hydrometallurgical refinery. Procorp is a mining services, financing and marketing partnership comprised of experienced, specialized independent contractors as well as members who are also directors and officers of the Company. Compensation to Procorp included an initial payment of US$0.9 million for services rendered in

page 13

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

fiscal 2001 and 2002 (which has been paid) and a second payment of US$0.9 million upon successful recommencement of commercial production of the Gibraltar Mine. In addition, the Company agreed, subject to regulatory approval, to issue to Procorp 3.4 million warrants to purchase common shares of the Company at a price of $1.70 per share for five years upon successful recommencement of commercial production at the Gibraltar Mine. The Gibraltar Mine has been on care and maintenance since being acquired in 1999. During fiscal 2001, due to continued uncertainty regarding start-up and an extended cycle of depressed metal prices, the Company wrote down the accumulated mineral property interest acquisition costs of $5.9 million to a nominal $1,000. Part of the Gibraltar Mine consists of waste rock dumps which the Company has an obligation to reclaim. On November 1, 2002, the Company entered into a Landfill Management Agreement and an associated Partnering Agreement with the Cariboo Regional District (“CRD”), whereby the Company would construct (which has been completed by the Company) and manage a municipal landfill on certain of the waste rock dumps for the CRD for the life of the landfill, expected to be in excess of 80 years. As a result of these agreements, the Company’s reclamation obligation was reduced and accordingly, during fiscal 2003, the Government of British Columbia released $2.5 million of the reclamation deposits held. During the quarter ended December 31, 2003, the Company acquired 100% of the claims held by Cuisson Lake Mines Ltd. by the payment of approximately $65,800. In March 2004, the Company entered into an agreement to purchase a mining shovel for approximately US$10.1 million, of which US$6.4 million ($8.5 million) has been paid as a deposit. Subsequent to June 30, 2004, the Company paid an additional US$2.7 million ($3.7 million). In May 2004, the Company entered into an agreement to purchase five mine haul trucks for approximately US$8.2 million, of which US$1.6 million ($2.3 million) has been paid as a deposit. In June 2004, the Company signed a Framework Agreement to create a Joint Venture (the “JV”) with Ledcor CMI Ltd. (“Ledcor”), whereby Ledcor will commission and operate the Gibraltar Mine. Under the proposed terms, Ledcor will be the operator, with primary responsibility for commissioning and operating the mine in addition to other aspects of mine operations, including drilling, blasting, loading and hauling of ore and waste as well as the recruitment of personnel and maintenance of equipment and facilities. Ledcor will contribute to the JV its own mine equipment and purchase or lease additional equipment as necessary. Taseko will contribute to the JV certain mineral rights and usage rights to the existing mill and equipment.

(b)

Prosperity Gold-Copper Property The Company owns 100% of the Prosperity Gold-Copper Property, located in the Clinton Mining Division, British Columbia, Canada, which was acquired prior to 1995 for total cash and share consideration of $28.66 million. During fiscal 2001, the Prosperity Project was written down to a nominal $1,000 to reflect the extended depressed conditions in the metal markets and the

page 14

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

	Company's intention to defer significant work on the project until a sustained recovery of metal prices had occurred.
(c)	Harmony Gold Property (note 4) In February 1999, the Company acquired a 5% net profits royalty on the Harmony Gold Property located in the Skeena Mining Division on Graham Island, Queen Charlotte Islands - Haida Gwaii, British Columbia, Canada, for $0.6 million, and purchased for $1, an exclusive farm-out right to earn up to a 10% working interest in the Harmony Property, by expending $0.6 million for each 1% working interest prior to January 1, 2001. The Harmony Gold Property was owned by Continental, a public British Columbia company with certain directors and officers in common with the Company. During fiscal 2001, the Company allowed this working interest option to expire, unexercised. Under the terms of an Arrangement Agreement (note 4), the Company acquired a 100% interest in the Harmony Gold Property in fiscal 2002.
(d)	Acquisition agreements In December 2001, the GESL Partnership completed a private placement of limited partnership units for aggregate proceeds of $1.85 million. In February 2002, the Company issued 4,966,659 Taseko common shares at $0.44 per share to acquire Gibraltar Refinery (2002) Ltd., which had acquired certain of the private placement units of the GESL Partnership. The Company also issued 50,000 Taseko common shares to its financial adviser in connection with this acquisition. A further $3 million of expenditures were incurred by the GESL Partnership, which were financed by a separate partnership, the GESL Refinery Process ("GRP") Partnership, for a total financing amount of $4.85 million. In December 2002, a general partnership interest in the GRP Partnership was acquired and financed by a third party for $3.0 million. In April 2003, under a plan of arrangement, the Company issued 7,446,809 Taseko common shares for total consideration of $3.5 million to complete the acquisition of Gibraltar Engineering Services Limited ("GESL"), which had acquired the remaining business of the GESL Partnership. In December 2003, the GRT Partnership completed a private placement of limited partnership units for aggregate proceeds of $18.6 million to partially fund the possible re-start of the Gibraltar copper mine owned by a subsidiary of the Company, Gibraltar Mines Ltd. As part of the financing the GRT Partnership entered into a joint venture arrangement with Gibraltar Mines Ltd. to proceed towards possibly restarting the Gibraltar copper mine. Gibraltar Mines Ltd, as its contribution to the Joint Venture, will contribute the use of its mine assets and fund the start-up expenses of the Gibraltar mine, and the GRT Partnership funded a qualifying environmental trust (“QET”), which has allowed Gibraltar to access other funds which were previously held by the Government of British Columbia as a security for the mine’s environmental reclamation obligations. Under the joint venture agreement, the GRT Partnership will be entitled to certain revenues or production share from the Gibraltar mine following the resumption of production. In March 2004, the Company issued 7,967,742 common shares at $2.79 per share for total

page 15

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

	consideration of $22.23 million to acquire all of the units of the GRT Partnership. In conjunction with this agreement, certain directors and officers of the Company personally guaranteed certain obligations to third parties on behalf of the Company to the extent of $4.5 million. In consideration for the guarantee, the Company issued 225,000 shares at $2.00 per share.
(e)	Farmout Agreement In December 2003, the Company entered into a Farmout Agreement (the "Agreement") with Northern Dynasty Minerals Ltd. ("Northern Dynasty"), and Rockwell Ventures Inc. ("Rockwell"), each public companies with certain directors in common with the Company. Under the terms of the Agreement, the Company granted to Northern Dynasty and to Rockwell rights to earn joint venture working interests, subject to a maximum of $650,000 in the case of Northern Dynasty and $200,000 in the case of Rockwell, on certain exploration properties located in the vicinity of the Gibraltar mine property. For a period of 150 days after Northern Dynasty and Rockwell have earned their working interests, the Company had the right to purchase their interests at 110% in cash or in common shares of the Company, at the Company's option. If the Company elected to issue common shares, the common shares to be issued upon exercise were to have been valued at the weighted average ten-day trading price as traded on the TSX Venture Exchange. During the quarter ended December 31, 2003, Northern Dynasty had earned an interest in these properties to the extent of $650,000 and Rockwell had earned an interest in these properties to the extent of $200,000. During the quarter ended March 31, 2004, Taseko exercised its right to purchase the interests earned by Northern Dynasty and Rockwell by issuing 256,272 Taseko common shares to Northern Dynasty and 78,853 Taseko common shares to Rockwell.
7.	Operating line of credit During fiscal 2002, the Company negotiated a $2 million operating line of credit with a Canadian chartered bank at an interest rate of prime, with no fixed terms of repayment.
8.	Share capital
(a)	Authorized Authorized share capital of the Company consists of 200,000,000 common shares without par value. At the Company’s Annual and Extraordinary General Meeting held on February 2, 2004, an increase in authorized share capital from 100,000,000 to 200,000,000 was approved by shareholders.

page 16

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

(b) Issued and outstanding

	Number
Common shares	of Shares		Amount
Balance, September 30, 2002	33,921,663	$	91,889,200
Issued during the year
Share purchase options at $0.50 per share	40,000		20,000
Private placement at $0.30 per share, net of issue costs	2,185,000		645,245
Private placement at $0.30 per share, net of issue costs	4,470,001		1,253,654
Private placement at $0.40 per share, net of issue costs	5,817,500		2,146,666
For acquisition of the remaining business of the GESL Partnership,
net of issue costs (note 6(d))	7,446,809		3,491,554
Balance, September 30, 2003	53,880,973	$	99,446,319
Issued during the period
Share purchase options at $0.50 per share	2,488,000		1,244,000
Share purchase options at $0.40 per share	152,500		61,000
Share purchase options at $0.25 per share	75,000		18,750
Share purchase options at $0.55 per share	355,000		195,250
Fair value of stock options allocated to shares issued on exercise			239,000
Share purchase warrants at $0.58 per share	276,596		160,426
Share purchase warrants at $0.55 per share	414,850		228,168
Share purchase warrants at $0.40 per share	302,250		120,900
Share purchase warrants at $0.50 per share	7,393,751		3,696,876
Share purchase warrants at $0.75 per share	346,666		260,000
Private placement at $0.60 per share, net of issue costs	6,700,000		3,910,728
Private placement at $2.00 per share, net of issue costs	3,900,000		7,323,943
For acquisition of Gibraltar Reclamation Trust Limited Partnership
at $2.79 per share, net of issue costs (note 6(d))	7,967,742		22,193,039
Loan guarantee at $2.00 per share (note 6(d))	225,000		450,000
Farmout agreement at $2.79 per share (note 6(e))	335,125		935,000
Balance, June 30, 2004	84,813,453	$	140,483,399

(c) Convertible debenture On July 21, 1999, in connection with the acquisition of the Gibraltar Mine, the Company issued a $17 million interest-free debenture to BWCL, which is due on July 21, 2009, but is convertible into common shares of the Company over a 10 year period commencing at a price of $3.14 per share in year one and escalating by $0.25 per share per year thereafter (currently $4.14 per share). BWCL’s purchase of the convertible debenture was receivable as to $4,000,000 in July 1999, $1,000,000 on October 19, 1999, $3,500,000 on July 21, 2000, and $8,500,000 by December 31, 2000, all of which were received. BWCL has the right to convert, in part or in all from time to time, the debenture into fully paid common shares of the Company from year one to year ten. From the commencement of the sixth year to the tenth year, the Company has the right to automatically convert the debenture into common shares at the then-prevailing market price. Since the Company has the right and the intention to settle the convertible debenture through the

page 17

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

issuance of common shares, notwithstanding the Company’s right to settle the debenture with cash, it has been included as a separate component of shareholders’ equity on the balance sheet.

Accounting standards in Canada for compound financial instruments require the Company to allocate the proceeds received from the convertible debenture between (i) the fair value of the option to convert the debenture into common shares and (ii) the fair value of the future cash outflows related to the debenture. At issuance, the Company estimated the fair value of the conversion option by deducting the present value of the future cash outflows of the convertible debenture, calculated using a risk-adjusted discount rate of 10%, from the face value of the principal of the convertible debenture. The residual carrying value of the convertible debenture is required to be accreted to the face value of the convertible debenture over the life of the debenture by, in the Company’s case, a direct charge to deficit. During the year ended September 30, 2003, the Company restated the prior years' convertible debenture and deficit balances within shareholders’ equity on the balance sheet and the statements of deficit for the years ended September 30, 2002 and 2001 to reflect the required accretion of the convertible debenture.

		Nine months
		ended		For year ended
		June 30,		September 30,
		2004		2003
Present value of convertible debenture
Beginning of period	$	9,777,058	$	8,888,235
Accretion for the period		732,274		888,823
End of period		10,509,332		9,777,058
Conversion right		9,822,462		9,822,462
	$	20,331,794	$	19,599,520
		Six months
		ended		For year ended
		June 30,		September 30,
		2004		2003
Summary of the convertible debenture terms
Principal amount of convertible debenture	$	17,000,000	$	17,000,000
Price per common share of the unexercised conversion right	$	4.14	$	4.14
Number of common shares potentially issuable under
unexercised conversion right		4,106,280		4,106,280

page 18

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

(d) Share purchase option plan The Company has a share purchase option plan approved by the shareholders that allows it to grant a maximum of 10% of the issued and outstanding common shares of the Company at the time an option is granted, less common shares reserved or issued in the plan, subject to regulatory terms and approval, to its employees, officers, directors and consultants. The exercise price of each option may be set equal to or greater than the closing market price of the common shares on the TSX Venture Exchange on the day prior to the date of the grant of the option, less any allowable discounts. Options have a maximum term of ten years and terminate 30 to 90 days following the termination of the optionee’s employment or term of engagement, except in the case of retirement or death. Vesting of options is at the discretion of the Board of Directors at the time the options are granted. The continuity of share purchase options is as follows:

	For the nine month
	period ended
	June 30,				For the years ended September 30,
	2004				2003					2002
	Number			Average	Number			Average		Number			Average
	of shares			Price	of shares			Price		of shares			Price
Opening balance	4,685,000		$	0.48	4,145,000		$	0.50		657,000		$	1.56
Granted during the period	5,275,500			0.93	770,000			0.41		4,042,500			0.50
Exercised during the period	(3,070,500	)		0.49	(40,000	)		0.50		–			–
Expired/cancelled during period	–			–	(190,000	)		0.50		(554,500	)		1.38
Closing balance	6,890,000		$	0.82	4,685,000		$	0.48		4,145,000		$	0.50
Contractual remaining life (years)				0.88				1.03					1.96
Range of exercise prices	$0.25-$1.65				$0.25-$0.50				$	0.50

As at June 30, 2004, 6,760,000 of the options outstanding had vested with optionees. Subsequent to June 30, 2004, a total of 48,500 options were exercised for gross proceeds of $26,775.

The exercise prices of all share purchase options granted during the period were equal to the market price at the grant date. Using an option pricing model with the assumptions noted below, the estimated fair value of all options granted during the period have been reflected in the statement of operations as follows:

				Year
		Nine months ended		ended
		June 30,		September 30,
		2004		2003
Total compensation cost recognized in operations,
credited to contributed surplus	$	3,137,066	$	65,344

page 19

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

The weighted average assumptions used to estimate the fair value of options granted during the period were:

Risk free interest rate	3%
Expected life	2.4 years
Volatility	98%
Expected dividends	nil

(e) Share purchase warrants The continuity of share purchase warrants is as follows:

		Outstanding				Outstanding
	Exercise	September 30,				June 30,
Expiry dates	price	2003	Issued	Exercised		2004
October 19, 2003	$0.58	276,596	–	(276,596	)	–
December 27, 2003	$0.55	414,850	–	(414,850	)	–
January 8, 2006	$0.40	375,000	–	–		375,000
December 31, 2003	$0.40	302,250	–	(302,250	)	–
December 31, 2004	$0.50	7,393,751	–	(7,393,751	)	–
December 31, 2005	$0.75	–	6,700,000	(346,666	)	6,353,334	(i)
March 10, 2005	$2.25	–	3,900,000	–		3,900,000	(ii)
		8,762,447	10,600,000	(8,734,113	)	10,628,334

(i)	Subject to a 45-day accelerated expiry upon notice if, at any time after the regulatory four-month hold period, the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $1.50 for ten consecutive trading days.
(ii)	Subject to a 45-day accelerated expiry upon notice if, at any time after the regulatory four-month hold period, the closing price of the Company's common shares, as traded on the TSX Venture Exchange, is at least $4.50 for ten consecutive trading days.
Subsequent to June 30, 2004, a total of 35,000 warrants were exercised for gross proceeds of $26,250.

page 20

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

The continuity of share purchase warrants during the previous fiscal year is as follows:

		Outstanding			Outstanding
	Exercise	September 30,			September 30,
Expiry dates	price	2002	Issued	Exercised	2003
October 19, 2003	$0.58	276,596	–	–	276,596
December 27, 2003	$0.55	414,850	–	–	414,850
January 8, 2006	$0.40	375,000	–	–	375,000
December 31, 2003	$0.40	–	302,250	–	302,250
December 31, 2004	$0.50	–	7,393,751	–	7,393,751
		1,066,446	7,696,001	–	8,762,447

(f) Contributed surplus

Balance, September 30, 2002	$	–
Changes during fiscal 2003:
Non-cash stock-based compensation (note 8(d))		65,344
Contributed surplus, September 30, 2003		65,344
Changes during fiscal 2004:
Non-cash stock-based compensation (note 8(d))		3,137,066
Fair value of stock options allocated to shares issued on exercise		(239,000	)
Contributed surplus, June 30, 2004	$	2,963,410

9.  Income taxes Substantially all of the difference between the actual income tax expense (recovery) of $nil (2002 - $nil) and the expected statutory corporate income tax recovery relates to losses not recognized. As at September 30, 2003 and 2002, the tax effect of the significant components within the Company’s future tax assets were as follows:

		2003			2002
Mineral property deductions	$	–		$	1,555,000
Loss carry forwards		1,778,000			3,211,000
Equipment		1,085,000			840,000
Other tax pools		775,000			716,000
		3,638,000			6,322,000
Valuation allowance		(3,638,000	)		(6,322,000	)
Net future income tax asset (liability)	$	–		$	–

At September 30, 2003, the Company’s tax attributes include non-capital losses for income tax purposes in Canada totaling approximately $5.0 million, expiring in various periods from 2004 to 2010, and certain resource related and other tax pools. The Gibraltar tracking preferred shares

page 21

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

	issued to Continental have initially been recorded for Canadian tax purposes at a paid up amount of $62.77 million, but such amount is subject to adjustment based on the fair value of Taseko common shares ultimately received by Continental (note 4).
10.	Supplementary cash flow disclosures In addition to the non-cash operating, financing and investing activities primarily disclosed, the Company’s non-cash operating, financing and investing activities were as follows:

		June 30,		September 30,		September 30,
		2004		2003		2002
Issuance of tracking preferred shares of Gibraltar Mines
Ltd. on acquisition of Harmony Gold Property (note 4)	$	–	$	–	$	26,764,784
Issuance of common shares on acquisition of Gibraltar
Refinery (2002) Ltd. (note 6(d))		–		–		2,163,330
Issuance of common shares on acquisition of remaining
business of GESL Partnership		–		3,500,000		–
Issuance of common shares on acquisition of Gibraltar
Reclamation Trust Limited Partnership		22,230,000		–		–
Issuance of common shares on redemption of Gibraltar
tracking preferred shares held by a dissenting
Continental shareholder (note 4)		–		–		122,836
Issuance of common shares for loan guarantee (note 7)		–		–		400,000
Issuance of common shares settlement of debt		–		–		840,000
Accretion of convertible debenture (note 8(c))		732,274		888,823		808,021
Fair value of stock options allocated to shares issued on
exercise		239,000		–		–
		June 30,		September 30,		September 30,
		2004		2003		2002
Supplemental cash flow information
Cash paid during the period for
Interest	$	481,156	$	101,942	$	107,790
Taxes	$	31,168	$	6,135	$	117,333

page 22

TASEKO MINES LIMITED
Notes to Consolidated Financial Statements
For the period ended June 30, 2004
(Expressed in Canadian Dollars)
(Unaudited)
 

11. Related party transactions and advances

		Nine months
		ended			Year ended
		June 30,			September 30,
Transactions		2004			2003
Hunter Dickinson Inc
Services rendered to the Company and its subsidiaries
and reimbursement of third party expenses (a)	$	628,536		$	253,859
Hunter Dickinson Group Inc
Consulting services rendered to the Company (b)	$	9,600		$	9,600
		June 30,			September 30,
Advances		2004			2003
Advances to (from) (c)
Hunter Dickinson Inc. (a)	$	460,351		$	229,129
Hunter Dickinson Group Inc. (b)		(3,424	)		(4,591	)
Advances to (from) related parties	$	456,927		$	224,538

	(a)	Hunter Dickinson Inc. ("HDI") is a private company with certain directors in common that provides geological, corporate development, administrative and management services to, and incurs third party costs on behalf of, the Company and its subsidiaries on a full cost recovery basis pursuant to an agreement dated December 31, 1996.
	(b)	Hunter Dickinson Group Inc. is a private company with certain directors in common that provides consulting services to the Company at market rates.
	(c)	Advances are non-interest bearing and are due on demand.
12.	Subsequent events Subsequent to June 30, 2004
	(a)	48,500 options were exercised for gross proceeds of $26,775 (note 8(d)).
	(b)	25,000 warrants were exercised for gross proceeds of $26,250 (note 8(e)).

page 23

EX-99.2

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.1 Date

This Management Discussion and Analysis ("MD&A") should be read in conjunction with the unaudited financial statements of Taseko Mines Limited ("Taseko", or the "Company") for the nine months ended June 30, 2004.

This MD&A is prepared as of July 26, 2004. All dollar figures stated herein are expressed in Canadian dollars, unless otherwise specified.

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 the Company believes 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 that actual results or developments may differ materially from those projected in the forward-looking statements.

Cautionary Note to U.S. Investors Concerning Estimates of Measured and Indicated Resources.

This management discussion and analysis uses the terms ‘measured resources’ and ‘indicated resources’. The Company advises U.S. investors that while these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves.

1.2 Overview

Taseko Mines Limited ("Taseko" or the "Company") is a mineral exploration and mining company with three projects located in British Columbia, Canada. These are the Gibraltar copper mine and two advanced-stage exploration projects: the Prosperity gold-copper project and the Harmony gold project. The Company is currently focussing on re-start activities at the Gibraltar mine.

Gibraltar

The Gibraltar mine is a 35,000 tonnes per day mine and mill facility, which has had a successful 27-year operating history, and has been maintained on "care and maintenance" for the past five years awaiting higher copper prices. With the improvement in copper markets, the Company raised approximately $20 million in funding from investors to commence restart and commissioning of the Gibraltar mine. Such activities commenced at Gibraltar in June, and the Company plans to begin copper concentrate shipments in October 2004.

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

In June 2004, Taseko announced that it had signed a Framework Agreement to create a Joint Venture (the “JV”) with Ledcor CMI Ltd. (“Ledcor”), a private, British Columbia-based, construction and contract mining company. Under the proposed terms, Ledcor will be the mine operator, with primary responsibility for commissioning and operating the mine in addition to other aspects of mine operations, including drilling, blasting, loading and hauling of ore and waste as well as recruitment of personnel and maintenance of the equipment and facilities. Ledcor will contribute its own mine equipment to the JV and purchase or lease additional equipment, including a large new shovel and new trucks worth a total of $25 million, to supplement the existing site equipment. Taseko will contribute to the JV certain existing mine assets, including mineral rights and usage rights to the existing mill and equipment.

The Company and its former union, the Canadian Auto Workers (“CAW”), appeared before the British Columbia Labour Relations Board (“LRB”), which ruled that the Company is entitled to contract with Ledcor to commission and start up the mine. Further the LRB ruled that once the majority of workers on the Gibraltar site consist of the longer term mining and mill operating personnel, a vote would be held to determine who would represent those employees, CAW or Christian Labour Association of Canada, which represent Ledcor’s employees. The representation vote is to be held no later than 10 days after the first shipment of copper concentrate, planned to occur in October 2004. The JV is proceeding with the commissioning and start up of the mine.

A long-term copper concentrate sales contract has also been signed with Glencore Ltd. (“Glencore”), a major international metals buyer. Glencore is a diversified natural resources group based in Switzerland, with assets of US$15 billion. The sales contract is for 100% of the production from the mine for 40 months beginning in October 2004, and has fixed terms for treatment and refining charges at a discount to prevailing market prices. Arrangements have also been made with rail carriers and port facilities for the transportation, storage and shipment of Gibraltar’s copper concentrates to Glencore smelters overseas.

The current plan is to extract 148 million tonnes in sulphide material over 12 years, producing an average of 70 million pounds of copper and 980,000 pounds of molybdenum per year in concentrate. Oxide material, when accessed, will also be processed by the 10 million pound per year solvent extraction-electrowinning plant to produce copper cathode.

Personnel from Ledcor began work at site in late May 2004. Activities in June have included open pit pre-development work in the Pollyanna pit area, where some 7 million tonnes of waste rock needs to be removed to expose ore-grade material allowing for continuous mill feed. In addition, mine and mill equipment is being reconditioned in preparation for concentrate production.

Market Trends

Copper prices have been strong in 2004. Copper has increased from the average 2003 price of US$0.81/lb to US$1.25/lb in the year to date in 2004. The price of molybdenum oxide has increased substantially in 2004, and is currently trading at US$17.50/lb. Gold prices, although volatile in the past four to six months, have averaged US$399/oz in the calendar year to date, continuing the overall upward trend established in 2003.

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.3 Selected Annual Information

The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles, and are expressed in Canadian dollars except common shares outstanding.

		As at		As at		As at
		September 30		September 30		September 30
Balance Sheet		2003		2002		2001
Current assets	$	6,110,155	$	2,761,936	$	2,740,911
Mineral properties		28,813,296		28,813,296		602,001
Other assets		26,311,460		28,735,049		28,727,482
Total assets		61,234,911		60,310,281		32,070,394
Current liabilities		3,851,136		7,038,456		2,928,589
Other liabilities		32,700,000		32,700,000		32,700,000
Shareholders’ equity		24,683,775		20,571,825		(3,558,195	)
Total shareholders’ equity & liabilities		61,234,911		60,310,281		32,070,394

		Year ended			Year ended			Year ended
		September 30			September 30			September 30
Operations		2003			2002			2001
Conference and travel	$	43,398		$	44,429		$	72,981
Consulting		178,104			133,672			1,750,662
Corporation taxes		76,135			577,228			211,486
Depreciation		711,170			714,065			714,857
Exploration		2,029,529			2,071,885			3,860,176
Interest and finance charges		201,942			507,790			73,058
Legal, accounting and audit		169,356			334,492			483,653
Office and administration		292,853			247,061			674,783
Refinery project		500,000			1,698,826			3,571,942
Shareholder communication		74,687			90,835			73,523
Trust and filing		21,113			36,802			51,155
Interest and other (income)		(721,480	)		(551,842	)		(1,110,431	)
Gain on sale of property, plant and equipment		(131,638	)		(1,314	)		–
Write down of mineral property acquisition costs		–			600,000			44,224,214
Write down of supplies inventory		–			–			3,509,465
Stock-based compensation		65,344			–			–
Loss for the period		3,510,513			6,503,929			58,161,524
Accretion expense		888,823			–			–
Basic and diluted loss per share	$	(0.07	)	$	(0.21	)	$	(2.32	)
Weighted average number of common shares outstanding		46,984,378			30,338,098			25,067,697

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.4 Results of Operations

The Company’s loss for the period decreased in the third quarter of the year to $6.3 million from $7.0 million in the second quarter of the year due to the $5.1 million premium paid for the acquisition of the Gibraltar Reclamation Trust Limited Partnership (“GRT Partnership”) in the second quarter. The third quarter loss increased from $1.0 million in the same quarter in fiscal 2003 due to the possible restart of the Gibraltar mine and the cost of exercising its right to purchase the interest in the Gibraltar exploration lands earned by Northern Dynasty Minerals Ltd. and Rockwell Ventures Inc.

The main expense during the quarter was $3.9 million on exploration, an increase from $1.0 million spent in the previous quarter and $0.4 million spent in the same quarter in fiscal 2003.

Of the $3,939,477 in exploration expenditures, $3,923,883 was spent on Gibraltar, $8,336 was spent on Prosperity and $7,258 was spent on Harmony. The expenditures include the cost of care and maintenance, mine restart activities and exploratory drilling activities at Gibraltar, as well as routine ongoing costs for environmental monitoring, property assessment and claim fees, and mine planning studies for Prosperity and Harmony. The main exploration costs during the quarter were for site activities ($2,916,986) and drilling ($935,000) at Gibraltar. The drilling costs include the cost of exercising the Company’s right to purchase the interest in the Gibraltar exploration lands earned by Northern Dynasty Minerals Ltd. and Rockwell Ventures Inc.

Administrative costs are similar to the previous quarter with the exception of legal costs, which increased significantly due to legal issues related to the planned re-start of the Gibraltar mine.

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.5 Summary of Quarterly Results

The following summary is presented in Canadian dollars except common shares outstanding.

	Jun 30,		Mar 31,		Dec 31,		Sep 30,		Jun 30,		Mar 31,		Dec 31,		Sep 30,
	2004		2004		2003		2003		2003		2003		2002		2002
Current assets	22,503,985		31,197,299		12,393,240		6,110,155		6,931,542		4,590,814		5,817,311		2,761,936
Mineral properties	28,813,296		28,813,296		28,813,296		28,813,296		28,813,296		28,813,296		28,813,296		28,813,296
Other assets	37,453,575		29,025,131		26,258,435		26,311,460		26,232,419		26,069,484		26,355,556		28,735,049
Total assets	88,770,856		89,035,726		67,464,971		61,234,911		61,977,257		59,473,594		60,986,163		60,310,281
Current liabilities	4,082,614		1,411,538		3,786,070		3,851,136		3,490,173		3,571,875		4,053,587		7,038,456
Other liabilities	32,700,000		32,700,000		32,700,000		32,700,000		32,700,000		32,700,000		32,700,000		32,700,000
Shareholders’ equity	51,988,242		54,924,188		30,978,901		24,683,775		25,787,084		23,201,719		24,232,576		20,571,825
Total shareholders’
equity and liabilities	88,770,856		89,035,726		67,464,971		61,234,911		61,977,257		59,473,594		60,986,163		60,310,281
Expenses:
Conference and travel	19,062		22,051		40,269		4,449		12,492		6,962		19,495		24,149
Consulting	94,875		(10,462	)	110,927		30,118		40,309		58,011		49,666		(131,320	)
Corporation taxes	20,000		11,168		–		101,308		(44,911	)	11,594		8,144		375,740
Deprecation	181,434		180,407		179,978		179,559		176,617		176,617		178,377		179,719
Exploration	3,939,477		975,538		2,130,546		607,301		449,458		687,681		285,089		739,340
Interest and finance
charges	452,616		9,201		19,339		124,213		25,952		28,590		23,187		37,808
Laboratory and other
services	–		–		(732,054	)	–		–		–		–		–
Legal, accounting and
audit	92,940		22,913		16,818		40,526		53,960		18,272		56,598		36,230
Office and administration	199,224		189,976		121,738		98,580		78,827		63,676		51,770		186,323
Premium paid for GRTLP	–		5,095,249		–		–		–		–		–		–
Property investigation	–		–		141,063		(47,805	)	37,071		10,734		–		–
Refinery project	–		–		–		–		500,000		–		–		(271,801	)
Salaries and benefits	–		–		–		–		–		–		–		(160,021	)
Shareholder
communications	18,694		530,704		73,802		7,833		4,223		39,104		23,527		8,164
Trust and filing	13,842		17,241		4,395		1,250		8,421		10,698		744		(368	)
Interest and other
(income)	(228,670	)	(325,399	)	(135,289	)	(129,811	)	(353,537	)	64,623		(302,755	)	11,382
Gain on sale of property
plant and equipment	–		–		–		–		–		(131,638	)	–		(1,314	)
Stock-based
compensation	1,526,084		296,686		1,314,296		65,344		–		–		–		–
Loss for the period	6,329,578		7,015,273		3,285,828		1,082,865		988,882		1,044,924		393,842		1,034,031
Accretion expense on
convertible debenture	244,091		242,752		245,431		888,823		–		–		–		–
Basic and diluted loss per
share	(0.08	)	(0.10	)	(0.06	)	(0.04	)	(0.02	)	(0.02	)	(0.01	)	(0.01	)
Weighted average number
of common shares
outstanding (thousands)	71,384		65,005		57,481		46,984		44,660		40,173		34,057		30,338

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.6 Liquidity

Historically Taseko’s sole source of funding was the sale of equity securities for cash primarily through private placements to sophisticated investors and institutions. As a consequence of the acquisition of the Gibraltar mine in 1999, Taseko received funding pursuant to a $17 million non-interest-bearing convertible debenture financing by Boliden Westmin (Canada) Ltd. As Taseko has the right and the intention to convert the debenture into common shares, the $17 million debenture is classified as equity rather than as a liability on the Company's balance sheet.

Reclamation deposits totaling approximately $17.5 million including interest, are to be used at a later date for reclamation purposes at Gibraltar, Prosperity and Harmony.

The reclamation liability of $32.7 million is secured by reclamation deposits and plant and equipment. The $26.6 million liability shown as tracking preferred shares of subsidiary, Gibraltar, is the net book value of 12,483,916 shares issued as part of the cost to acquire the Harmony gold project from Misty Mountain Gold Limited (subsequently renamed Continental Minerals Corporation). The tracking preferred shares are designed to track and capture the value of the Harmony gold property and will be convertible into common shares of the Company upon a realization event such as a sale to a third party or commercial production at the Harmony gold property. As Taseko has the right and the intention to settle these preferred shares with common shares of the Company, they have been included in shareholders’ equity on the balance sheet.

In December 2002, the Company renounced approximately $2.3 million in Canadian exploration expenditures (“CEE”) to flow-through investors. Accordingly, the Company was required to spend $2.3 million on qualified CEE by December 31, 2003. The Company completed the required expenditures by December 31, 2003.

At June 30, 2004, Taseko had working capital of $18.4 million, as compared to $29.8 million at the end of the previous quarter, and $3.4 million at the end of the same period in 2003. The decrease from the end of the previous quarter was a result of deposits made for the purchase of a mining shovel and for five mine haul trucks. The increase as compared to the end of the same period in 2003 was a result of several financings.

1.7 Capital Resources

In March 2004, the Company entered into an agreement to purchase a mining shovel for approximately US$10.1 million, of which US$6.4 million has been paid as an initial deposit. Subsequent to June 30, 2004, the Company paid an additional US$2.7 million towards this purchase.

In May 2004 the Company entered into an agreement to purchase 5 mining trucks for approximately US$8.2 million, of which US$1.64 million has been paid as an initial deposit.

The Company has a $2 million operating line of credit with a Canadian chartered bank at an interest rate of prime, with no fixed terms of repayment.

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.8 Off-Balance Sheet Arrangements

In October 2001, the Company’s subsidiary Gibraltar Mines Ltd. (“Gibraltar”) completed an arrangement agreement with Continental Minerals Corporation ("Continental"), which are British Columbia companies with certain management and directors in common with the Company. Under the terms of the arrangement agreement, among other things, Gibraltar paid $2.23 million cash and issued to Continental, 12,483,916 series A non-voting redeemable preferred shares in exchange for Continental’s interest in the Harmony Gold Project.

Gibraltar is obligated to redeem the series A preferred shares under certain conditions, notably the sale of all or substantially all (80%) of the Harmony Gold Property (excluding options or joint ventures which do not result in the certain or immediate transfer of 80% of Gibraltar’s interest in the Harmony Gold Property), or upon the commencement of commercial production at the Harmony Gold Property (an “HP Realization Event”). Upon the occurrence of an HP Realization event, Gibraltar must redeem Gibraltar preferred shares by distributing that number of Taseko common shares (“Taseko Shares”) equal to the paid-up amount (as adjusted) divided by a deemed price per Taseko Share, which will vary dependent on the timing of such HP Realization Event. At June 30, 2004, the conversion rate was $4.14 per Taseko Share.

In January 2002, Taseko announced that it would acquire GESL Partnership, and acquired a 38% initial position in these assets, comprising primarily of technology rights, during fiscal 2002. In the third quarter of fiscal 2003, the Company acquired the remaining business of the GESL Partnership under a plan of arrangement. This transaction resulted in a reduction of certain liabilities by $3 million and consolidated the Company’s 100% ownership of the copper refinery engineering business held by the GESL Partnership.

On December 31, 2003, the Company reached agreements with Gibraltar Reclamation Trust Limited Partnership (the “GRT Partnership”), a largely arm’s-length private Vancouver-based mining investment partnership which completed a financing to raise proceeds of $18.6 million to partially fund a planned restart of the Gibraltar copper mine owned by a subsidiary of the Company, Gibraltar Mines Ltd. As part of the financing the GRT Partnership entered into a Joint Venture arrangement with Gibraltar to proceed towards restarting the Gibraltar open pit copper mine. Gibraltar, as its contribution to the Joint Venture, agreed to contribute the use of its mine assets and fund the start-up expenses of the Gibraltar mine, and the GRT Partnership funded a qualifying environmental trust (“QET”), which has allowed Gibraltar to access other funds currently held by the Government of British Columbia as a security for the mine’s environmental reclamation obligations. Under the Joint Venture agreement, the GRT Partnership became entitled to certain revenues or production share from the Gibraltar mine following the resumption of production.

In related agreements, the Company obtained the exclusive right (the “Purchase Option”) to purchase the GRT Partnership for a fixed price of 130% of the total amount of the net financing proceeds, which were actually contributed by the GRT Partnership to the QET being an amount of $18.6 million. The Purchase Option was payable in common shares of the Company valued at the prevailing market price of the Company’s shares at the time the Company decides to trigger the purchase, or the price can be paid in cash by the Company. The investors in the GRT Partnership also acquired the right to sell the GRT Partnership to the Company for the appraised value of the GRT Partnership payable, at the Company’s election, in cash or in shares of the Company valued at the higher of the then-prevailing market (less a stated discount), and the undiscounted market price of the Company’s shares on December 31, 2003

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

(Cdn$2.15). To facilitate the start-up transactions, five directors and officers of the Company have personally guaranteed certain obligations (each as to one fifth) to third parties on behalf of the Company to the extent of $4.5 million, inclusive of a pledge of a cash deposit of $2 million. In consideration of the guarantee, they each received compensation equal to 10% of the amount guaranteed, calculated as 45,000 shares having a value of $2.00 each.

In March 2004 Taseko elected to exercise its call rights for the GRT Partnership and issued 7,967,742 shares valued at $2.79 each. Certain directors and officers participated as investors in the GRT Partnership in the aggregate amount of $1,300,000. These directors and officers received shares as a consequence of Taseko exercising the call right. The acquisition of the GRT Partnership provides Taseko with 100% control of those elements necessary for a mine restart decision and will eliminate the royalty entitlement held by the GRT Partnership.

1.9 Transactions with Related Parties

Hunter Dickinson Inc. (“HDI”) carries out investor relations, geological, corporate development, administrative and other management activities for, and incurs third party costs on behalf of the Company. Taseko reimburses HDI on a full cost-recovery basis.

Costs for services rendered by HDI to the Company decreased to $138,017 in the third quarter of fiscal 2004, as compared to $203,317 in the previous quarter and decreased as compared to $159,502 in the second quarter of 2003.

To facilitate the startup of the Gibraltar Mine, certain directors and officers of the Company have personally guaranteed certain obligations on behalf of the Company, for which they each received 45,000 shares of the Company (see item 1.8 above).

Certain directors and officers participated as investors in the GRT Partnership in the aggregate amount of $1,300,000 (see item 1.8 above).

1.10 Fourth Quarter

No applicable.

1.11 Proposed Transactions

There are no proposed asset or business acquisitions or dispositions, other than those in the ordinary course, before the board of directors for consideration.

1.12 Critical Accounting Estimates

Not applicable. The Company is a venture issuer.

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.13 Changes in Accounting Policies including Initial Adoption

None.

1.14 Financial Instruments and Other Instruments

None.

1.15 Other MD&A Requirements

1.15.1 Other MD&A Requirements

Additional information relating to the Company, including the Company's Annual Information Form, is available on SEDAR at www.sedar.com.

1.15.2 Additional Disclosure for Venture Issuers Without Significant Revenue

(a) capitalized or expensed exploration and development costs;

The required disclosure is presented in the Consolidated Schedule of Mineral Property Interests.

(b) expensed research and development costs;

Not applicable.

(c) deferred development costs;

Not applicable.

(d) general and administration expenses; and

The required disclosure is presented in the Consolidated Statements of Operations.

(e) any material costs, whether capitalized, deferred or expensed, not referred to in (a) through (d);

None.

TASEKO MINES LIMITED
NINE MONTHS ENDED JUNE 30, 2004

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

1.15.3 Disclosure of Outstanding Share Data

The following details the share capital structure as at July 26, 2004, the date of this MD&A. These figures may be subject to minor accounting adjustments prior to presentation in future consolidated financial statements.

		Exercise
	Expiry date	price	Number	Number
Common shares				84,896,953
Share purchase options	September 24, 2004	$0.50	1,762,000
	December 20, 2004	0.40	22,500
	March 31, 2005	0.30	100,000
	May 9, 2005	0.38	20,000
	July 29, 2005	0.25	50,000
	September 29, 2006	0.55	2,390,000
	September 20, 2005	0.65	17,000
	September 20, 2005	0.81	45,000
	September 20, 2005	1.40	100,000
	September 20, 2005	1.65	70,000
	September 29, 2006	1.36	2,240,000
	September 29, 2006	1.50	10,000	6,826,500
Warrants	January 8, 2006	0.40	375,000
	December 31, 2005	0.75	6,318,334
	March 10, 2005	2.25	3,900,000	10,593,334
Preferred shares redeemable into
Taseko Mines Limited common
shares				12,483,916

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 the Company believes 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 that actual results or developments may differ materially from those projected in the forward-looking statements.

The Company's auditors have not reviewed this MD&A or the unaudited quarterly financial statements to which this MD&A relates.