Q2 and H1 2018 Interim Financial Statements

12 September, 2018

Atalaya Mining Plc (AIM: ATYM; TSX: AYM) is pleased to announce its unaudited quarterly results for the three and six months ended 30 June 2018, together with the unaudited, condensed, interim consolidated financial statements.

Operating Highlights

Proyecto Riotinto

  • Copper production during the three months ended 30 June 2018 (“Q2 2018”) was 10,446 tonnes, 15% higher compared with 9,058 tonnes produced during the three months ended 30 June 2017 (“Q2 2017”). Copper production at Proyecto Riotinto during Q2 2018 replaces Q1 2018’s as the second highest quarterly production on record. During the six months ended 30 June 2018 (“H1 2018) copper production was 19,887 tonnes compared with 17,863 tonnes during H1 2017, an 11% increase.
  • Ore processed during Q2 2018 was 2,490,483 tonnes compared with 2,154,907 tonnes in Q2 2017. During H1 2018 ore processed was 4,697,344 tonnes compared with 4,351,206 tonnes processed in the same period last year.
  • Copper recovery during the quarter was 87.3% (Q2 2017: 85.2%). Copper recovery for the six month period ended 30 June 2018 averaged 87.9% representing an improvement over 84.9% during H1 2017.
  • An NI 43-101 compliant technical report on an updated resources and reserves estimate for Proyecto Riotinto was released on 9 July 2018. Highlights of the report include a 29% increase in open pit proven and probable mineral reserves at Cerro Colorado and a 21% increase in contained copper, with a reduction of the average strip ratio from 1.95:1 to 1.43:1.

Expansion to 15Mtpa at Proyecto Riotinto

  • The expansion project to 15Mtpa is progressing according to schedule with engineering heading to completion and site construction activities picking up. Overall progress completion at the end of the reporting quarter was 41%. Procurement has progressed to 38% completed and engineering to 82% completed. Earthworks are well advanced and are expected to be completed by mid-Q3 2018. Civil engineering works are progressing with main activities now concentrated on the new SAG mill area. Structural steel works are ongoing in the flotation area. Installation of mechanical equipment has started in the concentrate handling area. The milling area is the critical path to completion. The expansion project is scheduled for mechanical completion at the end of Q2 2019.

 

Proyecto Touro

  • Permitting of Proyecto Touro continues as anticipated with good progress made on addressing additional studies from the regional administration. During the quarter, efforts were concentrated on progressing detailed reports to address certain project improvements and recommendations from the public hearing process. These reports, including those received recently, are now expected to be submitted to the authorities before the end of Q3 2018.
  • During the quarter, the Company announced the completion of a pre-feasibility study (“PFS”) for the proposed open pit mine and concentrator at Proyecto Touro. The PFS report was prepared using the headings of, and guidance set out in the NI 43-101 report.

 

Financial Highlights

  • Revenues of €48.9 million for Q2 2018 compared with €53.4 million in Q2 2017 as lower sales volume due to timing of sales offset higher copper price. Revenues for H1 2018 increased significantly to €101.5 million compared with €79.1 million for the same 2017 period, due to higher volumes and copper prices.
  • Cash costs during Q2 2018 were $1.88/lb of payable copper, a decrease from cash costs of $2.27/lb of payable copper in Q1 2018 and similar to Q2 2017 ($1.88/lb). All-in sustaining costs (“AISC”) during Q2 2018 amounted to $2.34/lb of payable copper representing a decrease from $2.65/lb of payable copper during Q1 2018. The decrease in costs per pound was mainly due to the beneficial impact of higher production volumes on fixed costs and, in the case of cash costs, the effect of the lower average strip ratio of the updated reserves and resources estimate which has resulted in a greater amount of stripping costs capitalised.
  • Cash costs for H1 2018 were $2.07/lb payable copper versus $1.77/lb payable copper during H1 2017. AISC amounted to $2.49/lb payable copper during H1 2018 against $2.12/lb payable copper for H1 2017. AISC for H1 2018 remains in line with forecast for the year.
  • EBITDA of €19.4 million in Q2 2018 compared with €11.9 million delivered in Q2 2017. The increase in EBITDA was mainly a result of higher realised copper prices. On an accumulative basis, EBITDA during H1 2018 was €34.4 million compared with €24.5 million in H1 2017.
  • Significant year-on-year increase in profit after tax in Q2 2018 to €15.7 million (Q2 2017 of €6.1 million). Profits after tax for H1 2018 was €24.5 million compared with €11.8 million during H1 2017.
  • Fully diluted earnings per share (“EPS”) for Q2 2018 were 10.7 cents per share compared with 5.2 cents per share in Q2 2017. Fully diluted earnings per share for H1 2018 were 18.2 cents per share compared with 10.1 cents for the same period last year.
  • Inventories of concentrate at 30 June 2018 amounted to €9.3 million (€4.8 million at 31 December 2017).
  • Working capital surplus has strengthened over Q2 2018 as a result of cash generated from operations. At the end of Q2 2018 working capital was €32.7 million, representing a €6.2 million increase on Q1 2018 (€26.8 million). Unrestricted cash balances as at 30 June 2018 amounted to €51.1 million, which include the balance of proceeds from the equity raise in Q4 2017 to fund initial expansion costs.
  • Cash flow from operating activities before changes in working capital was €20.4 million for Q2 2018 compared with a cash flow of €11.7 million during Q2 2017. For H1 2018, cash flows from operating activities before changes in working capital were €35.6 million compared with €24.0 million during H1 2017.
  • Net cash flow from operating activities after changes in working capital was €12.3 million for Q2 2018 compared with a negative cash flow of €4.1 million during Q2 2017. Net cash flows from operating activities after changes in working capital were €30.7 million for H1 2018 compared with of €10.4 million during H1 2017.

 

Corporate Highlights

  • Exercise of warrants over 262,569 ordinary shares of 7.5 pence in the Company at an exercise price of 142.5 pence per share announced on 1 June 2018.

 

Commenting on 2018’s first half results, Alberto Lavandeira, CEO said:

The first half of 2018 has been very positive with record production levels, robust copper prices and operating costs within our stated guidance. The Riotinto plant is operating well with recoveries at record levels during the period and our expansion plans are well on track.  We are optimistic that the second half will continue to deliver results in line with our expectations.

About Atalaya Mining Plc

Atalaya is an AIM and TSX-listed mining and development group. It produces copper concentrates and silver by-product at its wholly owned Proyecto Riotinto site in southwest Spain, which is also undergoing a brownfield expansion. In addition, the Group has a phased, earn-in agreement for up to 80% ownership of Proyecto Touro, a brownfield copper project in the northwest of Spain which is currently in the permitting stage. For further information, visit www.atalayamining.com

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) Elisabeth Cowell / James Ash / Patrick Hanrahan +44 20 7680 6550
4C Communications Carina Corbett +44 20 3170 7973
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

 

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