Early Commissioning of Expansion Project and Release of Q1 2016 Financial Statements

26 May, 2016

Atalaya Mining plc (AIM: ATYM, TSX: AYM), the European mining and development company announces its unaudited quarterly results for the three months ended 31 March 2016, together with the unaudited, condensed interim consolidated financial statements.
The quarterly results, including the unaudited, condensed interim consolidated financial statements shown below, are also available on the Company’s website at www.atalayamining.com.

Operational Highlights

  • As part of the final ramp-up of the Riotinto plant, commissioning of the Phase I operational stage (5.0Mtpa) resulted in the Company producing 4,048 tonnes of copper during the first quarter of 2016. Commercial production, for accounting purposes, was declared as of 1 February 2016.
  • During March, production was 1,465 tonnes of copper with recoveries of 82.5%, which represented the first month of normalised production. Copper concentrates were transported to the port of Huelva.
  • Production cash costs for February and March 2016 (post commercial production) amounted to US$2.20/lb and reflect the variations common during the ramp-up process. These cash costs are not indicative of the anticipated costs of production and the Directors expect these to improve as production progresses from the ramp-up phase through to steady state production of 9.5 Mtpa.
  • Phase I plant ramp-up continued to perform well in April with recoveries of approximately 85%. Plant availability during this period was 94.7% and the process rate was 571 t/hr, equivalent to 4.7Mtpa. Production reached 1,373 tonnes of copper during the first 20 days of the month before the tailings discharge was provisionally suspended by the Junta de Andalucía.
  • During this brief suspension period, the site teams took the opportunity to integrate the new Expansion equipment into the existing Phase I section. Since the suspension was lifted, production has been ramping up continuously and during May has achieved hourly production levels over 50% higher than those recorded during Phase I.
  • Based upon the considerable progress made during the commissioning of the Expansion, the Company anticipates that production ramp-up to the full rate of 9.5Mtpa will be achieved during Q3 2016, earlier than anticipated.
  • Total capital costs have been kept under control and are expected to come in below the revised budget of US$164 million for both Phase I and the Expansion. This confirms that the Riotinto project is one of the lowest capital intensity projects in the world.
  • Additional mining equipment needed for the Expansion ramp-up has been mobilised to site to match the expanded plant requirements.

 

Financial highlights

  • Atalaya declared commercial production at the beginning of February 2016. The results for Q1 2016 include two months’ trading for February and March, with sales and operating costs in January 2016 continuing to be treated as pre-commissioning and taken against capitalisation.
  • During February and March 2016, 1,617 tonnes of copper were shipped, resulting in €4.9 million sales, which are recorded net of offtake deductions, penalties and market adjustments.
  • The operating loss for Q1 2016 of €3.1 million included depreciation and amortisation of €0.6 million, hence EBITDA for the quarter was a loss of €2.5 million. Higher costs during the ramp-up period combined with a lower value for concentrate sales from the early production stage (higher levels of impurities and lower copper prices) was the main reason for the loss.
  • Trade and other receivables of €11.6 million included a balance of €8.5 million due from the VAT authorities. This was mainly attributable to the purchases of fixed assets for the plant.
  • Current trade and other payables of €49.2 million included trade payables of €44.1 million.
  • The Company continues to manage its working capital needs, having negotiated extended payment terms with the suppliers of the assets for the Expansion Project which has been completed and is now being commissioned. This has provided the Company with flexibility as it continues to pursue a number of different funding options to meet the funding needs of the project during the ramp up phase.

 

Corporate

  • Following the Company’s announcement on 2 November 2015 on the receipt of a formal claim from Astor Management AG made in the High Court of Justice in London, and the continuous disclosures in the financial statements of the Company, the Company would like to announce that a court date has now been set for the first quarter of 2017. The Company will update the market and its shareholders shortly thereafter or in the event there is a material change to this position.

 

Alberto Lavandeira, CEO, commented:
“Having declared commercial production in February ahead of schedule, we are pleased that this accelerated trend is continuing, taking us to full production in half the originally anticipated timeframe. We are confident that as we move towards steady state production, efficiencies at the plant will continue to improve, leading to decreasing costs.”

Download full report here  “Condensed Interim Consolidated Financial Statements 31 March 2016” (98.7KB pdf)

Enquiries:
Atalaya Mining plc                                                                                 Roger DaveyAlberto Lavandeira                                     +34 959 59 28 50
Canaccord Genuity (NOMAD and Broker)                                         Henry Fitzgerald-O’Connor Martin Davison                  +44 20 7523 8000
Brandon Hill Capital (Broker)                                                              Oliver Stansfield                                                                 +44 20 3463 5061
4C Communications (Investor Relations Europe)                           Carina Corbett                                                                    +44 20 3170 7973
Roth Investor Relations (Investor Relations North America)         Michelle Roth                                                                     +1 732 792 2200
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