Copper Production/Grades continue to increase
Atico Mining loses $1.41-million (U.S.) in Q2 2016
2016-08-16 16:52 ET - News Release
Mr. Fernando Ganoza reports
ATICO REPORTS CONSOLIDATED FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2016
Atico Mining Corp. today released its financial results for the three months ended June 30, 2016, posting a net loss of $1.41-million. All figures are in U.S. dollars, unless otherwise noted.
Fernando E. Ganoza, chief executive officer, commented: "The company had another record operating quarter with competitive production cost which didn't translate to the quarterly financials. As we recognize revenue once the concentrate is shipped, the financials were negatively impacted by a delay of the second concentrate shipment scheduled for this quarter due to a countrywide transportation strike in Colombia. The negative effect on this quarter will be offset by recording the revenue of the delayed shipment in the third quarter." Mr. Ganoza added, "We are looking forward to a strong second half of the year, both operationally and financially, while we remain on target to meet our annual consolidated production guidance."
Second quarter financial highlights:
- Net loss for the second quarter amounted to $1.41-million, compared with a net income of $470,000 for the same period last year. The net loss was mainly affected by a delay of the second concentrate shipment, originally schedule to be shipped during the quarter.
- Sales for the second quarter decreased 40 per cent to $3.7-million when compared with the same period last year. The decrease is due to a delayed scheduled concentrate shipment and lower realized prices as compared with the same period last year. Copper accounted for 92.4 per cent and gold for 7.6 per cent of the total amount provisionally invoiced during the quarter. The average realized price per metal on provisional invoicing was $2.08 per pound of copper, $1,263.85 per ounce of gold and $16.87 per ounce of silver.
- Cash costs were $90.20 per tonne of processed ore and 96 cents per pound of payable copper produced, a 14-per-cent and 17-per-cent decrease over the same period last year, respectively.
- Loss from operations was $1.59-million, while cash flow from operations, before changes in working capital, was $30,000. Cash used for capital expenditures amounted to $1.84-million.
- At the quarter-end, 9,120 wet metric tonnes of non-invoiced concentrate remained at the company's warehouses.
- All-in sustaining cash cost per payable pound of copper produced for the second quater of 2016 was $1.53.
SECOND QUARTER SUMMARY OF FINANCIAL RESULTS Q2 2016 Q2 2015 Revenue $3,659,067 $6,116,976 Cost of sales (3,661,942) (4,091,393) Income (loss) from mining operations (2,875) 2,025,583 As a % of revenue 0% 33% Selling, general and administrative expenses 1,468,159 1,408,116 Income (loss) from operations (1,619,135) 507,601 As a % of revenue -43% 8% Income (loss) before income taxes (1,715,008) 12,376 Net income (loss) (1,413,402) (470,246) As a % of revenue -39% -8% Operating cash flow before changes in non-cash operating working capital items $29,543 $2,076,473
Second quarter operations review
During the quarter, the company produced 4.78 million pounds of copper, 2,948 ounces of gold and 9,953 ounces of silver. When compared with the same period last year, production increased 64 per cent, 28 per cent and 43 per cent for copper, gold and silver, respectively. The increase in overall metal production is mainly attributed to a 58-per-cent increase in processed material. Copper production had a slight increase in the copper head grade of 5 per cent, while in the case of gold production, the increase in processed material was partially offset by a 17-per-cent decrease in the gold head grade.
Cash costs for the period were $90.20 per tonne of processed ore and 96 cents per pound of payable copper produced, a 14-per-cent and 17-per-cent decrease over the same period last year, respectively. The decrease in the cash cost per pound of payable copper net of byproducts is mainly explained by a 58-per-cent increase in processed materials over the same period in last year. All-in sustaining cash cost per payable pound of copper produced was $1.53.
SECOND QUARTER OPERATIONAL DETAILS Q2 2016 Q2 2015 Production (contained in concentrate) (3) Copper (000s lb) 4,787 2,910 Gold (oz) 2,948 2,298 Silver (oz) 9,953 6,941 Mine Tonnes of material mined 63,112 41,287 Mill Tonnes processed 64,246 40,747 Tonnes processed per day 814 575 Copper grade (%) 3.63 3.45 Gold grade (g/t) 2.19 2.65 Silver grade (g/t) 8.03 9.02 Recoveries Copper (%) 93.0 93.7 Gold (%) 65.0 66.2 Silver (%) 59.8 58.7 Concentrates Copper concentrates (DMT) 10,718 6,938 Copper (%) 20.3 19.0 Gold (g/t) 8.6 10.3 Silver (g/t) 28.9 31.1 Payable copper produced (000s lb) 4,527 2,764 Cash cost per pound of payable copper ($/lb) (1) (2) 0.96 1.16 (1) Alternative performance measures. (2) Net of byproduct credits. (3) Subject to adjustments on final settlement.
The financial statements and management's discussion and analysis are available on SEDAR, and have also been posted on the company's website.
El Roble mine
The El Roble mine is a high-grade underground copper and gold mine with nominal processing plant capacity of 800 tonnes per day, located in the department of Choco in Colombia. Its commercial product is a copper-gold concentrate.
Since obtaining control of the mine on Nov. 22, 2013, Atico has upgraded the operation from a nominal capacity of 400 tonnes per day. The mine has a continuous operating history of 22 years, with recorded production of 1.5 million tonnes of ore at an average head grade of 2.6 per cent copper and an estimated gold grade of 2.5 grams per tonne. Copper and gold mineralization at the El Roble property occurs in volcanogenic massive sulphide (VMS) lens.
Since entering into the option agreement in January, 2011, to acquire 90 per cent of El Roble, Atico has aggressively explored the mine and surrounding claims. The company has completed 31,377 meters of diamond drilling and identified numerous prospective targets for VMS deposits on the 6,679-hectare property. This exploration led to the discovery of high-grade copper and gold mineralization below the 2000 level, the lowest production level of the El Roble mine. Atico has developed a new adit access from the 1880 elevation to develop these new resources.
El Roble has a measured and indicated resource of 1.87 million tonnes grading 3.46 per cent copper and 2.27 grams per tonne gold, at a cut-off grade of 0.93 per cent copper equivalent. Mineralization is open at depth and along strike, and the company plans to further test the limits of the resource.
On the larger land package, the company has identified a prospective stratigraphic contact between volcanic rocks and black and grey cherts that has been traced by Atico geologists for 10 kilometres. This contact has been determined to be an important control on VMS mineralization on which Atico has identified 15 prospective target areas for VMS-type mineralization occurrence, which is the focus of the surface drill program at El Roble.