First Quarter 2019 Financial Results

23 May, 2019

Atalaya Mining Plc.
(“Atalaya” and/or the “Group”)
Condensed Interim Consolidated Financial Statements for the three months ended 31 March 2019

Atalaya Mining Plc (AIM: ATYM; TSX: AYM), the European mining and development company, is pleased to announces its unaudited quarterly results for the three months ended 31 March 2019, together with the unaudited, condensed, interim consolidated financial statements.

Unaudited Financial Highlights

Quarter ended 31 March Q1 2019 Q1 2018 %
Revenues from operations €k 51,712 52,676 (1.8)%
Operating costs €k (30,026) (36,426) (17.6)%
EBITDA €k 19,510 14,998 30.1%
Profit for the period €k 14,155 8,790 61.0%
Earnings per share € cents/share 10.3 6.5 58.5%
Cash flows from operating activities €k 8,114 18,377 (55.8)%
Cash flows used in investing activities €k (17,138) (8,741) 96.1%
Cash flows from financing activities €k 48 n.q.
Working capital surplus €k 9,010 8,435 6.8%
Average realised copper price $/lb 2.80 3.03 (7.6)%
Cu concentrate produced (tonnes) 43,441 42,429 2.4%
Cu production (tonnes) 10,219 9,441 8.2%
Cash costs $/lb payable 1.89 2.27 (16.7)%
All-In Sustaining Cost $/lb payable 2.18 2.65 (17.7)%

 

· Revenues of €51.7 million for the three months ended 31 March 2019 (“Q1 2019”) compared with €52.7 million for the three months ended 31 March 2018 (“Q1 2018”). The variance was due to stronger average US Dollar rates against the Euro and offset by lower copper prices and slightly lower volumes sold during the period.
· Operating costs during Q1 2019 were €30.0 million compared with €36.4 million in Q1 2018. Lower expenses were mainly due to a reduction in earthworks and changes in inventories.
· Cash costs during Q1 2019 were $1.89/lb of payable copper, an increase from cash costs of $1.77/lb of payable copper in Q4 2018 but lower than Q1 2018 ($2.27/lb). The decrease against Q1 2018 was mainly the result of lower mining, and technical services, maintenance, penalties and concentrate deductions. All-in Sustaining Costs (“AISC”) during Q1 2019 amounted to $2.18/lb of payable copper, an increase from $2.00/lb of payable copper during Q4 2018 but lower than Q1 2018 ($2.65/lb).
· Management expects cash costs for the year to remain within the guidance range provided of $1.95/lb to $2.15/lb and AISC from $2.25/lb to $2.45/lb.
· EBITDA of €19.5 million in Q1 2019 compared with €15.0 million in Q1 2018. The increase in EBITDA was mainly the result of lower operating costs in Q1 2019.
· Q1 2019 profit after tax amounted to €14.2 million (or 10.3 cents basic earnings per share) compared with a profit for Q1 2018 of €8.8 million (or 6.5 cents basic earnings per share).
· Inventories of concentrate at 31 March 2019 amounted to €2.4 million (€3.0 million at 31 December 2018).
· At the end of Q1 2019 working capital was €9.0 million, a €0.6 million increase from €8.4 million at the end of Q4 2018. Unrestricted cash balances as at 31 March 2019 amounted to €23.8 million.

Financial Highlights (continued)
· Cash flow from operating activities before changes in working capital was €20.3 million for Q1 2019 compared with a cash flow of €15.2 million during Q1 2018.
· Net cash flow from operating activities after changes in working capital was €8.1 million for Q1 2019 compared with a cash flow of €18.4 million during Q1 2018.

Operational Highlights

Proyecto Riotinto
· Copper production during Q1 2019 was 10,219 tonnes, an increase of 8.2% compared with 9,441 tonnes produced during Q1 2018.
· Ore processed during Q1 2019 was 2,445,977 tonnes, an increase on Q1 2018 when ore processed amounted to 2,206,861 tonnes.
· Copper recovery during the quarter was 90.27%, higher than 88.47% achieved in Q1 2018.
· The Company maintains its previously stated copper production guidance for 2019 of 45,000 – 46,500 tonnes.

Expansion to 15Mtpa at Proyecto Riotinto
· The 15Mtpa expansion project has progressed materially during the quarter with expected mechanical completion on track for the end of Q2 2019. Overall progress completion at the end of the quarter was 97% with construction reporting 72% completion.
· The new primary crushing area is mechanically well advanced with electrical works progressing. In the new milling area, mechanical activities are progressing according to plan. New flotation and concentrate handling areas are in the final stages of commissioning.

Proyecto Touro
· During the quarter, feedback has been received from the relevant Administration bodies as part of the assessment of the environmental impact studies. The Company is addressing additional requests to complement current management plans. This stage of the process is expected to last until the end of Q2 2019.

Legal updates
· On 29 March 2019, the Company announced that it had received notification from the Supreme Court in Spain that it does not have jurisdiction over the appeal made by the Junta de Andalucía (“JdA”) and the Company, which voluntarily joined the appeal as co-defendant. Therefore, the previously announced Ruling made by the Tribunal Superior de Justicia de Andalucía (“TSJA”) remains valid. The Company will continue operating the mine normally and has been advised the Ruling will not impact its operations at Proyecto Riotinto.
· On 26 April 2019, the Company announced a judgment related to the Mining Permits to operate Proyecto Riotinto (the “Mining Permits”) was handed down by the TSJA. The TSJA declared the Mining Permits are linked to the Environmental Permits, ruled by the same tribunal on September 2018. The new ruling on the Mining Permits is based on the requirement to have an AAU before issuing mining permits and therefore invalidates the existing Mining Permits. The TSJA has not accepted the requests by EeA for the cessation of activities at the mine and an increase in the scope of the environmental plan.
· All the pending claims made by EeA have now been ruled by the TSJA. Atalaya continues to work with its legal advisors to evaluate the possibility of appealing the ruling and to ensure the JdA addresses all procedural points raised in both rulings. The Company continues operating the mine normally as the rulings do not state the operation at Proyecto Riotinto is to be ceased, not even temporarily and it is still confident that the ruling will not impact its operations at Proyecto Riotinto. The JdA has publicly supported the continuation of the mine.

Alberto Lavandeira, CEO commented:
“We are delighted with Atalaya’s financial performance for Q1 2019, in which reduced operating costs have led to a substantial increase in profits of over 60%. Progress with our expansion to 15Mtpa at Proyecto Riotinto is proceeding to plan with mechanical completion on track for the end of Q2 2019. Once completed, we will enjoy improved operational efficiencies and reduced cash costs compared with 2018. We maintain our guidance for full year 2019 production of 45,000 to 46,500 tonnes of copper.”
This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

You can download the full ATALAYA MINING PLC MANAGEMENT’S REVIEW AND CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS here (583kb)

Contacts:

Newgate Communications Elisabeth Cowell / Adam Lloyd / Tom Carnegie + 44 20 3757 6880
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity (NOMAD and Joint Broker) Henry Fitzgerald-O’Connor / James Asensio +44 20 7523 8000
BMO Capital Markets (Joint Broker) Jeffrey Couch / Tom Rider / Michael Rechsteiner +44 20 7236 1010

About Atalaya Mining Plc
Atalaya is an AIM and TSX-listed mining and development group which produces copper concentrates and silver by-product at its wholly owned Proyecto Riotinto site in southwest Spain. 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