Operational review and release of Q1 2017 Financial Statements

25 May, 2017

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 2017, together with the unaudited, condensed interim consolidated financial statements.

These results are also available on the Company’s website at www.atalayamining.com

Operating Highlights

  • Copper production during Q1 2017 was 8,805 tonnes in concentrate, in line with production levels of the previous quarter (Q4 2016: 8,938 tonnes). Q1 2016 copper in concentrate production was 4,048 tonnes as commercial production was only declared in February 2016.
  • Sustainable recovery rate during Q1 2017 at expanded throughput of 84.63% (Q1 2016: 82.93%), similar to Q4 2016 (84.47%).
  • 2 million tonnes of ore were processed during Q1 2017 (Q1 2016: 1.1 million tonnes). Ore processed during Q4 2016 amounted to 2.0 million tonnes.
  • Atalaya maintains its copper production guidance of 34,000 to 40,000 tonnes for 2017.

 

Financial Highlights

Note: Commercial production was only declared at the start of February 2016.

  • Revenues of €25.6 million for Q1 2017 compared with €4.9 million in Q1 2016.
  • A reduction in cash costs during Q1 2017 to $1.83/lb of payable copper (Q1 2016: $2.28/lb), compared with a cash cost of $1.95/lb of payable copper in the previous quarter. All-in sustaining cost during Q1 2017 including capitalized stripping remains flat at $2.15/lb of copper payable.
  • Positive Earnings Before Interest, Taxation, Depreciation and Amortisation (“EBITDA”) of €12.6 million in Q1 2017 compared with a negative EBITDA of €2.5 million in Q1 2016. The increase of €15.1 million in EBITDA was a result of the increase in the volume of copper concentrate sold, lower cash costs and higher realised copper prices.
  • Q1 2017 profits amounted to €5.2 million (or €4.5 cents per share) compared with a loss for Q1 2016 amounting to €3.3 million (or €2.8 cents per share).
  • Inventories of concentrate at 31 March 2017 amounted to €12.4 million (31 December 2016: €nil million).
  • Working capital deficit improved from €25.4 million as at 31 December 2016 to €20.0 million as at 31 March 2017. Unrestricted cash balance as of 31 March 2017 amounted to €9.8 million.
  • The Group achieved positive cash flows from operating activities for the three months ended 31 March 2017 amounting to €14.3 million (31 March 2016 : €1.5 million). Cash used for investment activities was €5.4 million (31 March 2016: €8.3 million).

 

Corporate Highlights

  • Proyecto Touro – On 23 February 2017, Atalaya announced the exercise of an option to acquire an initial 10% stake in Proyecto Touro located in Galicia, north-west Spain. The agreement is based on a staged earn-in process to acquire 80% of the brownfield copper project.
  • Astor case – On 6 March 2017, judgment in the Astor Case was handed down in the High Court of Justice in London. On 31 March 2017 declarations were made by the High Court giving effect to the Judgment. The High Court found that, although the first instalment of the deferred consideration under the master agreement with Astor Holdings had not fallen due, the master agreement and its provisions remain in place and, accordingly, Atalaya must apply any excess cash (after payment of operating expenses, sustaining capital expenditure, any senior debt service requirements and up to US$10 million (for non-Proyecto Riotinto related expenses)) to pay the deferred consideration in the master agreement and amounts due in connection with the loan assignment, jointly amounting to approximately €53 million. On 25 April 2017, Atalaya and Astor applied for permission to appeal to the Court of Appeal. It is likely that the applications will be ruled on by the end of Q3 2017 and if permission is granted that the appeal hearings will take place in 2018.

 

Alberto Lavandeira, CEO commented:

The first quarter of 2017 was strong both financially and operationally as Proyecto Riotinto continues to perform well.  The combination of falling operating costs and improved levels of production and recovery reflect our ongoing on-site efficiencies.  In addition, permitting was initiated at Proyecto Touro and we are progressing our infill and step-out drilling programmes.  In an environment of declining new global copper supply, Atalaya continues to advance its projects and remains a long term option on the copper price.”

 

This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

 

Contacts:

Newgate Communications (Financial PR) Charlie Chichester / James Ash / James Browne +44 20 7680 6550
Canaccord Genuity (NOMAD and Joint Broker) Martin Davison / Henry Fitzgerald-O’Connor / James Asensio +44 20 7523 8000
BMO Capital Markets (Joint Broker) Jeffrey Couch / Neil Haycock / Tom Rider +44 20 7236 1010