It feels good to root for the little guy.

In a reversal of fortunes for the mining industry so fearsome that global behemoths were reduced to rubble, it's comforting to know that a micro-cap contender can still find its way through.

Taseko Mines (AMEX:TGB) released earnings this week that portray an agile miner responding deftly to shifting realities in both credit markets and the global demand for copper. Under these tough conditions, the company's $32.6 million operating loss for the quarter comes as no surprise, and included a $17.7 million negative impact from copper pricing adjustments. Fools may recall that Yamana Gold (NYSE:AUY), which also produces significant quantities of copper, took a $74 million hit from similar adjustments during the period.

Helping to absorb this operational shortfall, Taseko announced an offering Friday of 13.8 to 15.9 million shares to raise at least $16 million for general purposes. Together with a $30 million loan facility acquired last month, I believe that Taseko stands in a stable position given the dramatic reductions in mining costs reported for recent months. While mega-miners like Rio Tinto (NYSE:RTP) and Freeport-McMoRan (NYSE:FCX) reduce copper output to stabilize prices, little Taseko keeps growing into its big shoes.

Losses were bound to result when Taseko's copper production costs touched $2 per pound last quarter while copper prices collapsed as low as $1.25, but since that time the company has curtailed capital expenditures and quickly brought costs down to $1.13 per pound during February. For 2009, Taseko projects copper costs to average $1.15, placing operations well within the comfort zone of profitability now that copper has stabilized from its lowest levels. The commodity-savvy management at Joy Global (NASDAQ:JOYG) considers 15% of global copper production unprofitable at prices near $1.50 per pound. For a company as small as Taseko to achieve this competitive a cost structure is rather remarkable in this Fool's view.

A second path to prosperity
Prudently, Taseko has deferred the Phase III expansion of the Gibraltar mine until market conditions improve. While the company focuses intently on Phase II, prosperity awaits. In addition to 2 billion pounds of copper, Taseko's Prosperity project contains 4.7 million ounces of proven and probable gold reserves … or more than one-fourth the entire stash of Agnico-Eagle Mines (NYSE:AEM). Pending the requisite environmental permits, this micro-cap miner's path to prosperity appears to be lined with solid gold.

Further Foolishness:

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Fool contributor Christopher Barker is the commodore of copper and the Colonel Klink of zinc. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Agnico-Eagle Mines, Freeport-McMoRan, Taseko Mines, and Yamana Gold. The Motley Fool's disclosure policy is worth way more than $1.50 per pound.