Taseko Mines Limited and Franco-Nevada Corporation completed a deal that will see Franco-Nevada buying at least 22% of the life of mind gold to be produced by Taseko from its planned Prosperity Gold and Copper mine in British Columbia.

Under the agreement, Taseko will receive staged cash deposits in aggregating US$350 million to be paid during mine construction as well as 2 million Franco-Nevada warrants to be issued on the date of the first advance of the cash payment. For each ounce of gold delivered to Franco-Nevada, Taseko will receive a further cash payment of US$400 (subject to an inflationary adjustment) or the prevailing market price, if lower.

The deposit will be credited with the difference between US$400 and the market price of gold for each ounce delivered until the deposit is fully credited. Each warrant will be exercisable to purchase one Franco-Nevada common share at a price of $75.00 until June 16, 2017 and will be listed under the same terms as the warrants listed on TSX under the symbol FNV.WT.A.

The investment by Franco-Nevada is subject to full financing of the project and receipt of all material permits to construct and operate the Prosperity project and will be staged such that the timing of Franco-Nevada's payments will be concurrent with Taseko's funding of the equity portion of the capital requirements of Prosperity.

Russell Hallbauer, President and CEO of Taseko, commented "We are very pleased to be entering into this long-term relationship with Franco-Nevada. It is an endorsement of the quality of our project that we have been able to attract the interest of a company of the calibre of Franco Nevada as a participant in the advancement of Prosperity. Through this transaction, we are funding approximately 45% of the planned capital expenditures for Prosperity by selling 6% of the total gross metal revenue.

" Combined with cash on hand and expected cash flow from Gibraltar, we will have Prosperity approximately 80% funded without any debt, leaving a number of available alternatives to complete the project funding. These include project debt, equity, off-take sale for debt and the sale of a small minority interest in Prosperity."

Wellington West Capital Markets Inc. is acting as financial advisor to Taseko.