Event: Taseko reported Q2/10 earnings of C$45.4M, or C$0.24/share. After adjustments, EPS were C$0.02, below BMO Research and consensus estimates of C$0.05. However, operating profit of C$19.3M was in line with BMO Research forecasts.Impact: Slightly Negative. Although operating profit was in line, costs were higher than expected. The company is completing the upgrade to fixed and mobile plant equipment to increase efficiency and reduce costs. The results from these capital projects should start to flow through over the next few quarters.Forecasts: After adjusting for Q2/10, forecast 2010 EPS are C$0.81 and C$0.49 in 2011E. BMO Research estimates 2010 production for Gibraltar of 71Mlb copper (TKO’s 75%). Valuation: BMO Research values Taseko at C$7.28/share, with the Prosperity project estimated at ~C$2.83/share (~40% of total valuation). The target price of C$6.00 represents 0.8x NPV. Recommendation: Taseko is attractively valued