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Memorandum

To: Scott Jones, Vice President, Engineering

From: Greg Yelland, P. Eng. Chief Engineer

Cc: John McManus, Senior Vice President, Operations

Brian Battison, Vice President, Corporate Affairs

Date: July 18, 2013

RE: New Prosperity Hydrogeological Design Process

1) Introduction

Taseko has carried out extensive site investigations that have provided all of the data needed as a proof of concept of the water management systems in the current EIS to a sufficient detail to support the conclusion that the system, when built, will perform within the predicted parameters.

Taseko is aware that additional site investigation work would be required after the EA process and prior to permitting and construction to increase the hydrogeology data density in order to drive the detailed engineering design of both the tailings facility and the pit dewatering system. This information would also be required for permitting discussions with the Ministry of Energy and Mines.

2) Typical Site Investigation

Hydrogeological site investigations typically follow a three step process, steadily increasing the amount of data, information and confidence.

Step 1: (EA/Prefeasibility level) The first step is to gather enough physical information to carry out a prefeasibility level study or proof of concept. This study confirms that the project is feasible and that the concept will work.

Step 2: (Permitting/Detailed design level) This level of site investigation builds upon the data collected in the first step. It provides a higher level of confidence in the consistency of the physical environment and would also focus on areas where the original design may have to be modified. This level of investigation is carried out to produce detailed designs for permitting and for the costing and procurement of long lead construction materials.

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Step 3: (Construction level) Further site investigation is carried out just prior to construction. The physical environment is tested for complete confidence in the method of construction or water management being proposed. Any local anomalies are detected and dealt with. Insitu material testing also takes place during construction to be able to detect irregularities and focus on mitigation before construction progresses.

At New Prosperity the following areas have been identified for potential further site investigation:

A) Between the pit and Fish Lake

B) Down gradient from the Main Tailings Storage Embankment

C) Down gradient from the West Tailings Storage Embankment

D) Down Gradient from the South Tailings Storage Embankment

E) The Main Tailings Storage Embankment foundation

F) The West Tailings Storage Embankment foundation

G) The South Tailings Storage Embankment foundation

H) The Tailings Storage Facility basin

The accompanying plan indicates the locations of the past test holes, test pits and geophysical surveys and outlines the above areas where further work would be performed. Each of the areas identified for further investigation are listed below with a brief description of the purpose of the work along with the anticipated work to be performed through the three step process.

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Area A) Between the pit and Fish Lake

The purpose of the site investigation in this area would be to confirm the lakebed conductance and the shallow and deep aquifer characteristics. The test record would be used as a basis for continued detailing of the water management engineering. Pump design, dewatering wells size and location, flood control dam detailed design are dependent on this work.

Level of Investigation Work Land Disturbance

Step 1 Wells, geotechnical drilling. Pump and packer tests.

Existing road access. Minimal brush clearing

Step 2 Densification of wells and geotechnical drilling. New test pits.

Pump and packer tests.

Road construction. Some tree clearing and pad construction.

Step 3 Densification of wells in areas of concern. Pump tests.

Road construction. Some tree clearing and pad construction.

Areas B, C and D) Down gradient from the Tailings Storage Embankments

The purpose of the site investigation in these areas would be to confirm the conductance of the ground between the Tailings Storage Embankments and the proposed seepage control ponds. Pump design, dewatering wells and seepage control ponds design are dependent on this work.

Level of Investigation Work Land Disturbance

Step 1 Wells, geotechnical drilling. Pump and packer tests.

Existing road access. Minimal brush clearing

Step 2 Densification of wells and geotechnical drilling. Pump and

packer tests.

Road construction. Extensive tree clearing and pad

construction.

Step 3 Densification of geotechnical drilling in areas found to be anomolous.

Packer tests.

No extra construction. Minor extra tree clearing and pad

construction.

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Areas E, F and G) Tailings Storage Embankment foundations

The purpose of the site investigation in this area would be to refine the understanding of the foundation conditions, including information around the depressurization wells, and understanding where, if any, glacial till augmentation will be required. Design of the tailings embankments, depressurization wells and monitoring equipment will be based on this work.

Level of Investigation Work Land Disturbance

Step 1 Test pits and geotechnical drilling. Packer tests. Geophysical Survey.

Existing road access. Minimal brush clearing

Step 2 Installation of wells and further geotechnical drilling / test pits. Pump

and packer tests.

Road construction. Extensive tree clearing and pad

construction.

Step 3 Densification of geotechnical drilling and test pits throughout the area.

Packer tests.

Complete tree extraction. Ground clearing and grubbing.

Excavation and till addition as needed.

Area H) Tailings Storage Facility basin

The purpose of the site investigation in this area will be to refine the understanding of the foundation conditions, and understanding where, if any, glacial till augmentation will be required in the basin.

Level of Investigation Work Land Disturbance

Step 1 Scattered test pits. Geophysical Survey.

Existing road access. Minimal brush clearing

Step 2 Densification of test pits. Road construction. Extensive tree clearing and pad

construction.

Step 3 Densification of test pits throughout the area. Extensive ground truthing

and proctor tests throughout the basin.

Complete tree extraction. Ground clearing and grubbing.

Excavation and till addition as needed.

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REV DATE DESCRIPTION DRAWNDESIGNED CHK'D APP'D

TASEKO MINES LIMITED

NEW PROSPERITY GOLD-COPPER PROJECT

SITE INVESTIGATION HISTORY

VA101-266/27 3

0FIGURE 4.1

300 500 1000 1500 m150 0

SCALE

0 31JUL'12 ISSUED WITH REPORT DR PP GIJ KJB

NOTES:

1. COORDINATE GRID IS UTM NAD83 ZONE 10.

2. PLAN BASED ON LIDAR INFORMATION PROVIDED BY TERRA

REMOTE , DATED JULY, 2008 AND TRIM MAP.

3. CONTOUR INTERVAL IS 5 METRES WITHIN LIDAR MAP LIMIT

AND 20 METRES OUTSIDE.

4. ELEVATIONS ARE IN METRES, UNLESS NOTED OTHERWISE.

DRILL HOLES

TEST PITS

2012 SEISMIC LINE

PREVIOUS SITE INVESTIGATION

SEISMIC LINE

LEGEND:

A BETWEEN PIT AND FISH LAKE

B DOWN GRADIENT OF MAIN EMBANKMENT

C DOWN GRADIENT OF WEST EMBANKMENT

D DOWN GRADIENT OF SOUTH EMBANKMNET

E MAIN EMBANKMENT FOUNDATION

G SOUTH EMBANKMENT FOUNDATION

H TSF BASIN

F WEST EMBANKMENT FOUNDATION

PROPOSED SITE INVESTIGATION

SCOPE PRIOR TO CONSTRUCTION