CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED JUNE 30, 2008

(Expressed in thousands of Canadian Dollars)
(Unaudited)

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

TASEKO MINES LIMITED
Consolidated Balance Sheets
(Expressed in thousands of Canadian Dollars)
		June 30			September 30
		2008			2007
		(unaudited)
ASSETS
Current assets
Cash and equivalents	$	35,388		$	37,636
Marketable securities and investments (note 5)		10,843			18,542
Accounts receivable		16,541			12,021
Income taxes receivable		6,742			–
Advances to related party (note 8)		–			807
Inventory (note 6)		32,643			18,058
Prepaid expenses		11,057			1,069
Current portion of promissory note		1,397			2,086
		114,611			94,619
Restricted cash		4,400			4,400
Reclamation deposits		35,287			33,396
Promissory note		73,472			72,350
Property, plant and equipment (note 7)		252,645			176,898
	$	480,415		$	377,263
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	35,953		$	30,435
Advances from related party (note 8)		468			–
Current portion of deferred revenue		175			175
Current portion of royalty obligation		1,397			2,086
Income taxes payable		–			6,573
Current portion of future income taxes		3,491			5,320
		41,484			44,589
Income taxes		25,870			24,645
Royalty obligation		62,263			63,330
Deferred revenue		919			1,050
Convertible debt (note 9)		28,599			41,008
Site closure and reclamation costs (note 10)		14,881			17,441
Future income taxes		41,223			21,540
		215,239			213,603
Shareholders' equity
Share capital		279,715			205,040
Equity component of convertible debt (note 9)		3,832			13,655
Tracking preferred shares		26,642			26,642
Contributed surplus		13,592			8,633
Accumulated other comprehensive income		(2,239	)		2,338
Deficit		(56,366	)		(92,648	)
		265,176			163,660
Subsequent events (note 13)
	$	480,415		$	377,263

See accompanying notes to consolidated financial statements.

Approved by the Board of Directors
/s/ Russell E. Hallbauer	/s/ Ronald W. Thiessen
Russell E. Hallbauer	Ronald W. Thiessen
Director	Director

TASEKO MINES LIMITED
Consolidated Statements of Operations and Comprehensive Income
(Unaudited - Expressed in thousands of Canadian Dollars, except per share amounts)
		Three months ended June 30						Nine months ended June 30
		2008			2007			2008			2007
Revenue
Copper	$	50,872		$	50,296		$	145,529		$	150,694
Molybdenum		2,334			5,611			17,958			13,734
		53,206			55,907			163,487			164,428
Cost of sales		(35,675	)		(26,113	)		(96,762	)		(87,251	)
Amortization		(1,563	)		(1,374	)		(3,355	)		(2,488	)
Operating profit		15,968			28,420			63,370			74,689
Expenses (income)
Accretion of reclamation obligation		322			339			942			1,016
Exploration		3,047			2,188			7,413			6,647
Foreign exchange		600			1,454			(359	)		(523	)
Asset retirement obligation change of estimates (note 10)		–			–			(2,413	)		–
General and administration		2,245			1,333			6,671			5,550
Gain on sale of marketable securities		(586	)		–			(1,154	)		(1,508	)
Loss on equipment disposal		161			–			161			–
Interest and other income		(1,897	)		(2,438	)		(6,671	)		(8,191	)
Interest expense		1,390			883			3,813			3,167
Interest accretion on convertible debt		467			1,321			1,967			2,776
Stock-based compensation		1,103			1,865			5,473			4,954
Change in fair value of financial instruments		–			2,331			886			1,308
		6,852			9,276			16,729			15,196
Earnings before income taxes		9,116			19,144			46,641			59,493
Income tax recovery (expense)		397			(5,020	)		6,377			(9,290	)
Future income tax expense		(5,714	)		(1,718	)		(16,736	)		(14,586	)
Net earnings for the period	$	3,799		$	12,406		$	36,282		$	35,617
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale reclamation deposit		(527	)		(675	)		391			(761	)
Unrealized gain (loss) on available-for-sale marketable securities		(2,783	)		(1,560	)		(5,278	)		3,511
Reclassification of realized gain on sales of marketable securities		(439	)		–			(528	)		–
Tax effect		554			–			838			–
Other comprehensive loss	$	(3,195	)	$	(2,235	)	$	(4,577	)	$	2,750
Total comprehensive income	$	604		$	10,171		$	31,705		$	38,367
See accompanying notes to consolidated financial statements.
Earnings per share
Basic	$	0.03		$	0.10		$	0.26		$	0.28
Diluted		0.02			0.09			0.23			0.25
Weighted average number of common shares outstanding
Basic		143,475			129,371			140,229			128,784
Diluted		158,197			145,846			154,580			144,572

TASEKO MINES LIMITED
Consolidated Statements of Cash Flows
(Unaudited - Expressed in thousands of Canadian Dollars)
		Three months ended June 30						Nine months ended June 30
		2008			2007			2008			2007
Operating activities
Net earnings for the period	$	3,799		$	12,406		$	36,282		$	35,617
Items not involving cash
Asset retirement obligation change in estimate		–			–			(2,413	)		–
Accretion of reclamation obligation		322			339			942			1,016
Amortization		1,563			1,374			3,355			2,488
Interest accretion on convertible debt		465			1,321			1,965			2,776
Stock-based compensation		1,103			1,865			5,473			4,954
Future income taxes		5,714			4,499			16,736			17,366
Unrealized foreign exchange		(184	)		(2,926	)		691			(1,995	)
Gain on sale of marketable securities		(586	)		–			(1,154	)		(2,083	)
Change in fair value of financial instruments		–			2,002			886			1,308
Changes in non-cash operating working capital
Accounts receivable		(4,332	)		(4,217	)		(4,520	)		(6,861	)
Advances to related patrties		349			–			1,274			–
Inventories		(9,920	)		1,704			(14,586	)		11,474
Prepaids		(10,218	)		(1,499	)		(9,988	)		(1,420	)
Accrued interest income on promissory note		(1,088	)		(1,074	)		(433	)		(3,000	)
Accounts payable and accrued liabilities		5,351			(6,536	)		1,950			(1,315	)
Deferred revenue		(43	)		(44	)		(131	)		(19,715	)
Accrued interest expense on royalty obligation		346			354			(1,757	)		1,074
Income taxes		1,949			5,139			(10,135	)		10,645
Site closure and reclamation expenditures		–			(75	)		–			(127	)
Cash provided by operating activities		(5,410	)		14,632			24,437			52,202
Investing activities
Purchase of property, plant and equipment		(26,942	)		(37,121	)		(74,971	)		(95,886	)
Reclamation deposits		–			–			(109	)		–
Accrued interest income on reclamation deposits		(345	)		(344	)		(1,390	)		(1,410	)
Restricted cash		–			–			–			(4,400	)
Investment in marketable securities		–			(480	)		(254	)		(18,470	)
Proceeds from sale of marketable securities		1,372			–			2,416			17,574
Cash used for investing activities		(25,915	)		(37,945	)		(74,308	)		(102,592	)
Financing activities
Common shares issued for cash, net of issue costs		297			4,897			47,623			5,288
Cash provided by financing activities		297			4,897			47,623			5,288
Increase (decrease) in cash and equivalents		(31,028	)		(18,416	)		(2,248	)		(45,102	)
Cash and equivalents, beginning of period		66,416			62,722			37,636			89,408
Cash and equivalents, end of period	$	35,388		$	44,306		$	35,388		$	44,306
Supplemental Schedule for Non-Cash Investing and Financing Activities
Share issued for the purchase of royalty interest (note 7a)	$	5,220		$	-		$	5,220		$	-
Conversion of convertible debenture (note 9)	$	24,887		$	-		$	24,887		$	-

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED
Consolidated Statements of Shareholders' Equity
(Expressed in thousands of Canadian Dollars, except for per share and share amounts)
			Nine months ended				Year ended
			June 30, 2008				September 30, 2007
			(unaudited)
Common shares	Number of shares				Number of shares
Balance at beginning of the period	130,580,538	$	205,040		128,388,175	$	197,592
Share purchase options at $1.15 per share	–		–		409,833		471
Share purchase options at $1.29 per share	–		–		75,000		97
Share purchase options at $2.07 per share	30,000		62		233,300		483
Share purchase options at $2.18 per share	145,500		317		244,000		532
Share purchase options at $2.63 per share	–		–		20,000		53
Share purchase options at $2.68 per share	7,500		20		27,500		74
Share purchase options at $3.07 per share	78,500		241		48,000		147
Share purchase options at $4.09 per share	3,600		15		–		–
Share purchase options at $4.50 per share	5,000		23		–		–
Shares issued for the purchase of mineral property interest	–		–		1,134,730		3,805
Fair value of stock options allocated to shares issued on exercise	–		514		–		1,786
Shares issued for the purchase of royalty interest (note 7a)	1,000,000		5,220		–		–
Shares issued for debt conversion (note 9)	2,612,971		21,318		–		–
Equity financings at $5.20 per share, net of issue costs (note 11)	9,637,792		46,945		–		–
Balance at end of the period	144,101,401		279,715		130,580,538		205,040
Equity component of convertible debt
Balance at beginning of the period			13,655				13,655
Convertible debenture conversion adjustment (note 9)			(9,823	)			–
Balance at end of the period			3,832				13,655
Tracking preferred shares
Balance at beginning and end of the period			26,642				26,642
Contibuted surplus
Balance at beginning of the period			8,633				3,648
Stock-based compensation			5,473				6,771
Fair value of stock options allocated to shares issued on exercise			(514	)			(1,786	)
Balance at end of the period			13,592				8,633
Accumulated other comprehensive income
Balance at beginning of the period			2,338				–
Unrealized gain (loss) on reclamation deposits			391				(419	)
Unrealized gain (loss) on available-for-sale marketable securities			(5,278	)			4,710
Reclassification of realized gain on sale of marketable securities			(528	)			(1,508	)
Tax effect			838				(445	)
Balance at end of the period			(2,239	)			2,338
Deficit
Balance at beginning of the period			(92,648	)			(140,603	)
Adjustment to opening deficit			–				(307	)
Net earnings for the period			36,282				48,262
Balance at end of the period			(56,366	)			(92,648	)
TOTAL SHAREHOLDERS' EQUITY		$	265,176			$	163,660

See accompanying notes to consolidated financial statements.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

1.	BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
	These interim consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles. They do not include all the disclosures as required for annual financial statements under generally accepted accounting principles. These interim consolidated financial statements should be read in conjunction with the Company's annual consolidated financial statements for the year ended September 30, 2007, which are available through the internet on SEDAR at www.sedar.com.
	Operating results for the three and nine months period ended June 30, 2008 are not necessarily indicative of the results that may be expected for the full fiscal year ending September 30, 2008.
2.	SIGNIFICANT ACCOUNTING POLICIES
	These interim consolidated financial statements follow the same accounting policies and methods of application as the Company's most recent audited annual financial statements for the year ended September 30, 2007, except as described in note 3.
3.	CHANGES IN ACCOUNTING POLICIES
	Effective October 1, 2007, the Company adopted the following accounting standards issued by the Canadian Institute of Chartered Accountants ("CICA"). These new standards have been adopted on a prospective basis with no restatement to prior period financial statements.
(a)	Accounting Changes (Section 1506)
	This standard establishes criteria for changing accounting policies, together with the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and correction of errors. As a result, changes in accounting policies are only permitted when required by a primary source of GAAP or when the change will result in more reliable and more relevant information. Changes in accounting estimates during the period resulting from the increase in the life of the Gibraltar mine are disclosed in notes 7 and 10.
(b)	Capital Disclosures (Section 1535)
	This standard requires disclosure of an entity's objectives, policies and processes for managing capital, quantitative data about what the entity regards as capital and whether the entity has complied with any externally imposed capital requirements and, if it has not complied, the consequences of such non-compliance. These are presented in note 4(a).
(c)	Financial Instruments – Disclosure (Section 3862) and Presentation (Section 3863)
	These standards replace CICA 3861, "Financial Instruments – Disclosure and Presentation". They increase the disclosures currently required, which will enable users to evaluate the

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

significance of financial instruments for an entity's financial position and performance, including disclosures about fair value. In addition, disclosure is required of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk. The quantitative disclosures must provide information about the extent to which the entity is exposed to risk, based on information provided internally to the entity's key management personnel. These are presented in note 4(b).

(d)	New Accounting Standards Not Yet Adopted:
	(i)	Inventories (Section 3031)
	This standard replaces the existing Section 3030 with the same title and will harmonize accounting for inventories under Canadian GAAP with International Financial Reporting Standards ("IFRS"). This standard requires that inventories be measured at the lower of cost and net realizable value, and includes guidance on the determination of cost, including the allocation of overheads and other costs. The standard also requires that similar inventories within a consolidated group be measured using the same method. It also requires the reversal of previous write-downs to net realizable value when there is a subsequent increase in the value of inventories. This new section is effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008. The Company is currently evaluating the impact of this new standard.
	(ii)	Going Concern – Amendments to Section 1400
	CICA Section 1400, "General Standards of Financial Statement Presentation", was amended to include requirements to assess and disclose an entity's ability to continue as a going concern. The new requirements are effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008. The Company does not expect the adoption of these changes to have a material impact on its financial statements.
	(iii)	International Financial Reporting Standards ("IFRS")
	In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with International Financial Reporting Standards ("IFRS") over an expected five year transitional period. In February 2008, the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canadian GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Due to the Company's September 30 fiscal year end, the transition date for the Company is October 1, 2011. Therefore, the IFRS adoption will require the restatement for comparative purposes of amounts reported by the Company for the year ended September 30, 2011. The Company is currently in the process of developing an IFRS conversion plan and evaluating the impact of the transition to IFRS.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

4.	FINANCIAL INSTRUMENTS
(a)	Capital Management Objectives
	The Company's primary objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders, and to have sufficient funds on hand for business opportunities as they arise.
	The Company considers the components of shareholders' equity, as well as its cash and equivalents and convertible 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 equity, sell assets, or return capital to shareholders as well as issue new debt. The Company is not subject to significant externally-imposed capital requirements.
	In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are approved by the Board of Directors.
	The Company’s investment policy is to invest its cash in highly liquid short-term interest-bearing investments, having maturity dates of three months or less from the date of acquisition, that are readily convertible to known amounts of cash.
	There were no changes to the Company's approach to capital management during the three and nine months ended June 30, 2008 and the Company expects its current capital resources will be sufficient to carry out its plans of operations.
	As at June 30, 2008 and September 30, 2007, the Company had no foreign currency hedges or commodity hedges in place, and consequently, hedge accounting is not used.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

(b)

Carrying Amounts and Fair Values of Financial Instrument

The carrying amounts of the Company's financial instruments approximate their fair values. The fair value of a financial instrument is the price at which a party would accept the rights and/or obligations of the financial instrument from an independent third party. Given the varying influencing factors, the reported fair values are only indicators of the prices that may actually be realized for these financial instruments. The following tables show the estimated fair values of the Company's financial instruments.

		Estimated fair value
		June 30		September 30
		2008		2007
Cash and equivalents	$	35,388	$	37,636
Restricted cash		4,400		4,400
Cash and equivalents	$	39,788	$	42,036
Accounts receivable	$	16,541	$	12,021
Advances to related party		–		807
Promissory note		74,869		74,436
Loans and receivables	$	91,410	$	87,264
Marketable securities and investments	$	10,843	$	18,542
Reclamation deposits		35,287		33,396
Available for sale financial assets	$	46,130	$	51,938
Total financial assets	$	177,328	$	181,238

The fair value of marketable securities and investments and reclamation deposits represents the market value of quoted investments.

The fair values of financial liabilities are as follows:

		Estimated fair value
		June 30		September 30
		2008		2007
Accounts payable and accrued liabilities	$	36,050	$	30,435
Advances from related party		468		–
Convertible debt		28,599		41,008
Royalty obligation		63,660		65,416
	$	128,777	$	136,859

At June 30, 2008, all the Company's financial liabilities were classified as other financial liabilities carried at amortized cost. The fair values of the convertible debt and royalty obligation were determined by discounting the stream of future payments of interest and principal at 14%, which approximates the estimated prevailing market rates for comparable debt instruments.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

(c)	Financial Instrument Risk Exposure and Risk Management
	The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, including treasury policies, counterparty limits, controlling and reporting structures. The types of risk exposure and the way in which such exposure is managed are provided as follows:
	(i)	Credit Risk
		Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash and equivalents, restricted cash, reclamation deposits and accounts receivable. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash and equivalents, restricted cash and reclamation deposits with high-credit quality financial institutions. The Company does not have financial assets that are invested in asset backed commercial paper.
		Substantially all the Company's cash and equivalents are held with one major Canadian financial institution and its subsidiaries. The reclamation trust and the promissory note are each held at different financial institutions from the cash and equivalents.
	(ii)	Liquidity Risk
		Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operations and the Company's holdings of cash and cash equivalents. The Company believes that these sources will be sufficient to cover the likely short and long term cash requirements. The Company's cash and equivalents are invested in business accounts and bankers acceptances, and which are available on demand for the Company's programs, and which are not invested in any asset backed deposits/investments.
	(iii)	Market Risk
		The significant market risk exposures to which the Company is exposed are commodity price risk, foreign exchange risk, and interest rate risk.
	(iv)	Commodity Price Risk
		The value of the Company's mineral resource properties is dependent on the price of copper, gold, molybdenum and niobium and the outlook for these minerals. The Company does not have any hedging or other commodity based risks respecting its operations.
		Market prices for these metals historically have fluctuated widely and are affected by numerous factors outside of the Company's control, including, but not limited to, levels of worldwide production, short-term changes in supply and demand, industrial and retail

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

demand, central bank lending, and forward sales by producers and speculators. There are certain other factors related specifically to gold.

The profitability of the Company's operations currently is highly correlated to the market price of copper and molybdenum. If copper prices decline for a prolonged period below the cost of production of the Company's operating mine, it may not be economically feasible to continue production.

(v)	Foreign Exchange Risk
	The Company's revenues from the production and sale of copper and molybdenum are denominated in US dollars. The Company's concentrate treatment, refining, and transportation costs are substantially denominated in US dollars. However the Company's operating expenses are incurred primarily in Canadian dollars and its liabilities are denominated primarily in Canadian dollars. Consequently, the Company's operations are subject to currency transaction risk and currency translation risk.
	The operating results and the financial position of the Company are reported in Canadian dollars. The fluctuation of the US dollar in relation to the Canadian dollar will, consequently, have an impact upon the reported profitability of the Company and may also affect the value of the Company's assets and liabilities.
	The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.
	At June 30, 2008, the Company's financial assets held in the US dollars were:

		Held in United States dollars
Carrying value		(stated in Canadian dollars)
Cash and equivalents	$	32,722
Accounts receivable		12,113
Total financial assets	$	44,835

At June 30, 2008, the Company's financial liabilities held in the US dollars were:

		Held in United States dollars
Carrying value		(stated in Canadian dollars)
Accounts payable and accrued liabilities	$	1,473
Convertible debt		28,599
Royalty obligation		–
Total financial liabilities	$	30,072

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

(vi)	Interest Rate Risk
	In respect of financial assets, the Company's policy is to invest cash at floating rates of interest, in cash equivalents, in order to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates impact on the value of cash equivalents and reclamation deposits, which are invested in Canadian provincial bonds.
	In respect of financial liabilities, the royalty obligation is offset by an investment in a promissory note held by the Company. The convertible bonds carry a fixed interest rate of 7.125% per annum and as such are not subject to fluctuations in interest rate.
	Reclamation deposits are held in Canadian provincial bonds with maturities of five years.
	The exposure of the Company's financial assets to interest rate risk as at June 30, 2008 is as follows:

				Weighted
				average
			Weighted	period for
			average	which the
			effective	interest rate
			interest rate	is fixed
		Total	(percent)	(years)
Financial assets subject to floating interest rates	$	114,657	2.7%	N/A
Financial assets subject to fixed interest rates		35,287	4.8%	5.5
Equity investments		10,843	N/A	N/A
Trade and other receivables		16,541	N/A	N/A
Total financial assets	$	177,328

The exposure of the Company's financial liabilities to interest rate risk at June 30, 2008 is as follows:

				Weighted
				average
			Weighted	period for	Weighted
			average	which the	average
			effective	interest rate	period until
			interest rate	is fixed	maturity
		Total	(percent)	(years)	(years)
Financial liabilities subject to
floating interest rates	$	63,660	1.8%	N/A	20
Financial liabilities subject to fixed
interest rates		28,599	7.1%	3.2	3.2
Other liabilities		36,517	N/A	N/A	N/A
Total financial liabilities	$	128,776

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

5. MARKETABLE SECURITIES AND INVESTMENTS

		As at June 30, 2008
				Unrealized
		Cost		gain (loss)			Fair value
Continental Minerals Corporation – common shares	$	9,880	$	(2,130	)	$	7,750
Investment in other public companies		3,135		(42	)		3,093
	$	13,015	$	(2,172	)	$	10,843

		As at September 30, 2007
				Unrealized
		Cost		gain (loss)			Fair value
Continental Minerals Corporation – common shares	$	9,880	$	2,566		$	12,446
Continental Minerals Corporation – warrants		3,118		(2,232	)		886
Investment in other public companies		4,574		636			5,210
	$	17,572	$	970		$	18,542

On February 20, 2008, the Continental Minerals Corporation ("Continental") warrants expired unexercised. To reflect this expiry, a mark-to-market loss of $809 (nine months ended June 30, 2007 – loss of $1,615) was charged to operations.

As at June 30, 2008, the Company held 7,827,726 (2007 – 7,827,726) shares of Continental, a public company with certain directors in common with the Company.

6. INVENTORY

		June 30		September 30
		2008		2007
Copper concentrate	$	10,760	$	6,623
Ore in-process		7,726		2,320
Copper cathode		156		605
Molybdenum		90		–
Product inventory		18,732		9,548
Materials and supplies		13,911		8,510
	$	32,643	$	18,058

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

7. PROPERTY, PLANT AND EQUIPMENT

		As at June 30, 2008
				Accumulated		Net book
		Cost		Amortization		value
Property, plant and equipment:
Buildings and equipment	$	6,115	$	2,221	$	3,894
Mine equipment		55,572		10,304		45,268
Plant and equipment		88,043		2,761		85,282
Vehicles		1,586		940		646
Computer equipment		3,389		2,662		727
Land		402		–		402
Deferred pre-stripping costs		52,520		838		51,682
Construction in progress		40,402		–		40,402
Asset retirement costs		337		–		337
Property, plant and equipment – Gibraltar mine	$	248,366	$	19,726	$	228,640
Other equipment and leasehold improvements		386		56		330
	$	248,752	$	19,782	$	228,970

Mineral property interests:
Gibraltar Copper Mine	$	14,050
Aley Niobium Property		8,343
Oakmont Ventures Ltd. (note 7(a))		7,520
Prosperity and Harmony properties		2
Total mineral property interests	$	29,915
Asset retirement costs		(6,240	)
Property, plant and equipment	$	252,645

As at June 30, 2008, approximately $40,402 (September 30, 2007 – $52,887) of plant and equipment was under construction and not being amortized. Amortization recorded during the period reflected changes in accounting estimates during the period resulting from the increase in the life of the Gibraltar mine.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

		As at September 30, 2007
				Accumulated		Net book
		Cost		amortization		value
Property, plant and equipment
Buildings and equipment	$	6,115	$	1,905	$	4,210
Mine equipment		55,529		9,216		46,313
Plant and equipment		26,900		1,698		25,202
Vehicles		1,511		753		758
Computer equipment		3,178		2,225		953
Land		402		–		402
Deferred pre-stripping costs		32,949		–		32,949
Construction in progress		52,887		–		52,887
Asset retirement costs		1,426		–		1,426
Property, plant and equipment – Gibraltar mine		180,897		15,797		165,100
Other equipment		27		27		–
	$	180,924	$	15,824		165,100
Mineral property interests:
Gibraltar Copper Mine						10,062
Aley Niobium Property						8,343
Prosperity and Harmony properties						2
Total mineral property interests						18,407
Asset retirement costs						(6,609	)
Total property, plant and equipment					$	176,898

(a)	Purchase of Oakmont Ventures Ltd.
	On May 2, 2007, the Company completed the acquisition of all the issued and outstanding shares in the capital of a private company, Oakmont Ventures Ltd. (“Oakmont”), whose sole asset is the 30% net profits interest in certain claims that are part of the Gibraltar mine property located adjacent to the Gibraltar East pit. The acquisition was completed through the issuance of 1,000,000 common shares of the Company at the value of $5.22 million. The acquisition was accounted for under the purchase method.
	The following table summarizes the total purchase consideration of Oakmont:

		Amount
Issuance of 1,000,000 common shares	$	5,220
Payment of Oakmont’s liabilities		302
Total purchase consideration	$	5,522

The total acquisition price has been allocated to the net assets acquired and liabilities assumed as follows:

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

		Amount
Mineral property interests		7,520
Current liabilities		(43	)
Future income taxes		(1,955	)
Total consideration paid, being cash, common shares and units	$	5,522

The results of operations of this acquired company have been included in the Company’s consolidated financial statements from the date of the acquisition.

8. RELATED PARTY TRANSACTIONS AND BALANCES

		Three months ended					Nine months ended
Transactions		June 30					June 30
		2008		2007			2008		2007
Hunter Dickinson Services Inc.
Services rendered to the Company and its
subsidiaries and reimbursement of third party
expenses	$	2,190	$	1,156		$	6,024	$	3,683
				As at					As at
		June 30					September 30
Advances to (from):				2008					2007
Hunter Dickinson Services Inc.			$	(468	)			$	807

Hunter Dickinson Services Inc. ("HDSI") (formerly Hunter Dickinson Inc.) is a private company owned equally by several public companies, one of which is Taseko. HDSI has certain directors in common with the Company and 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.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

9. CONVERTIBLE DEBT

		June 30		September 30
		2008		2007
Liability Component
Convertible Bonds – August 2006	$	28,599	$	26,693
Convertible Debenture – NVI (a)		–		14,315
Convertible Debt – Liability Component	$	28,599	$	41,008
Equity Component
Convertible Bonds – August 2006	$	3,832	$	3,832
Convertible Debenture – NVI (a)		–		9,823
Convertible Debt – Equity Component	$	3,832	$	13,655

(a)	Convertible Debenture – NVI Mining Ltd (formerly Boliden Westmin (Canada Limited)
	On July 21, 1999, in connection with the acquisition of the Gibraltar mine, the Company issued a $17,000 interest-free debenture to NVI Mining Ltd. (formerly Boliden Westmin Canada Limited) (“NVI”). The debenture was due on July 21, 2009 and 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. NVI had the right to convert, in part or in whole from time to time, the debenture into fully paid common shares of the Company from year one to year ten.
	On April 2, 2008, NVI issued a notice to the Company to convert the principal amount of the debenture of $17 million at an effective conversion rate of $5.14 per common share, which would have resulted in 3,307,393 common shares of the Company being issued to NVI. However, the Company had already filed an action in BC Supreme Court in May 2006, seeking, among other relief, a right of set-off against the debenture in respect of damages owing from certain latent income tax liabilities that have been provisionally and conservatively quantified as the equivalent of 694,422 common shares. The Company therefore withheld 694,422 shares otherwise issuable pursuant to the conversion provision of the Debenture and issued the remainder of the common shares to NVI.
	On April 28, 2008, NVI filed a Statement of Claim in the Supreme Court of British Columbia, naming Gibraltar and Taseko as defendants, and seeking an order that Taseko issue the 694,422 common shares withheld from the conversion of the Debenture, or pay damages in lieu of issuing the shares. Taseko has entered an appearance and has filed a Statement of Defense and Counterclaim, and is defending this action vigorously, while at the same time pursuing its original claim against NVI.
	On July 29, 30 and 31, 2008, the Supreme Court of British Columbia heard argument on the issue of whether NVI should be required to await the outcome of the trial of Taseko's claims before receiving the 694,422 outstanding shares (or their equivalent in damages). That hearing has now concluded and the judge has reserved. A decision in that application is currently expected by August 14, 2008.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

The continuity of the NVI convertible debenture is as follows:

Liability component:
Present value of convertible promissory note at issuance, at September 30, 2007	$	14,315
Accretion, net of interest, for the period to April 9, 2008		750
Balance, April 9, 2008		15,065
Conversion, April 9, 2008		15,065
Liability component, June 30, 2008		–
Equity component:
Conversion right at September 30, 2007		9,823
Conversion, April 9, 2008		9,823
Equity component , June 30, 2008		–
Convertible debenture – NVI, June 30, 2008	$	–

10.	SITE CLOSURE AND RECLAMATION OBLIGATIONS
	The continuity of the provision for site closure and reclamation costs related to the Gibraltar mine is as follows:

Balance, September 30, 2007	$	17,441
Changes during the period:
Reclamation incurred		–
Accretion		942
Additional site closure and reclamation obligation recognized		337
Reduction in the present value of reclamation obligation due to a revision in mine life		(3,839	)
Balance, June 30, 2008	$	14,881

During the nine months ended June 30, 2008, the value of the underlying site closure and reclamation obligation was revised to reflect an increase in the life of the Gibraltar mine as well as an increased area of disturbance during the period. This change resulted in a revision to the timing of undiscounted cash flows associated with the carrying amount of the liability and a reduction in the present value of the site closure and reclamation obligation. The impact of these changes in estimates is as follows:

• a decrease of $3,839 (2007 – $nil) in the present value of the reclamation obligation due to an extension in the mine life.

• a net decrease of $1,314 (2007 – $nil) in asset retirement costs included in property, plant and equipment.

• a gain of $2,413 (2007 – $nil) resulting from a decrease in the asset retirement cost in excess of its carrying value.

TASEKO MINES LIMITED

Notes to Consolidated Financial Statements

For the three and nine months ended June 30, 2008

(Unaudited – Expressed in thousands of Canadian dollars, unless stated otherwise)

The revised estimated reclamation costs, adjusted for estimated inflation at rates ranging from 2.2% to 2.5% per year, in 2026 dollars, are $76,700 (2007 – $68,400) and are expected to be spent over a period of approximately three years beginning in 2026. The credit-adjusted risk free rates at which the estimated future cash flows have been discounted are 7.1% to 10%, resulting in a net present value of $14,881 (2007 – $19,600).

Accretion for the nine months ended June 30, 2008 of $942 (2007 – $1,016) was charged to the statement of operations.

11.	EQUITY FINANCINGS
	In October 2007, the Company completed a short form prospectus offering of 7,115,385 common shares at a price of $5.20 per common share, and also granted to the underwriters an over- allotment option to purchase up to an additional 1,067,307 common shares at the same price, which over-allotment option was exercised in full, for aggregate gross proceeds to the Company of $42.5 million.
	In November 2007, the Company completed a private placement financing of 1,455,100 common shares at a price of $5.20 per share for gross proceeds of $7.6 million.
12.	TREATMENT AND REFINING AGREEMENT
	In April 2008, Taseko entered into a six-year agreement commencing in the first fiscal quarter of 2009 and ending on December 31, 2014, with MRI Trading AG (“MRI”), a Swiss-based metal trading company, for the treatment and refining of Gibraltar copper concentrate. Under the terms of the agreement, Taseko has secured long-term, fixed, low cost rates for processing approximately 1.1 million tons of copper concentrate. The Company has the right to price payable copper within the concentrate based on a quotational period, declared prior to, and covering each ensuing calendar year.
	Pursuant to this agreement, the Company also secured a US$30 million line of credit with MRI.
13.	SUBSEQUENT EVENTS
	In July 2008, the Company entered into a $14 million dollar lease agreement with Bank of America through Terex financial for the purchase of four new haulage trucks.