Results for the year ended 31 December 2018

4 April, 2019

A successful year reporting €53.5 million EBITDA for 42,114 tonnes of copper

Atalaya Mining Plc (AIM: ATYM; TSX: AYM) is pleased to announce its audited consolidated results for the year ended 31 December 2018.

The full audited report, including the consolidated Financial Statements is also available under the Company’s profile on SEDAR at www.sedar.com and on Atalaya’s website at www.atalayamining.com

Financial Highlights

Year ended 31 December   2018 2017 %
Revenues from operations €k 189,476 160,537 18.0%
Operating costs €k (128,898) (114,687) 12.4%
EBITDA €k 53,542 41,347 29.5%
Profit for the year €k 34,441 18,211 89.1%
Earning per shares € cents/share 25.4 15.5 63.9%
Cash flows from operating activities €k 55,333 30,500 81.4%
Cash flows used in investing activities €k (65,712) (22,678) 189.8%
Cash flows from financing activities €k 593 33,899 (98.3)%
Working capital surplus €k 8,435 22,137 (61.9)%
Average realised copper price $/lb 2.95 2.66 10.9%
Cu concentrate produced (tonnes) 180,661 165,965 8.9%
Cu production (tonnes) 42,114 37,164 13.3%
Cash costs $/lb payable 1.94 1.91 1.6%
All-In Sustaining Cost $/lb payable 2.26 2.30 (1.7)%

 

  • Revenues amounted to €189.5 million during 2018 (2017: €160.5 million) as a result of 183,368 tonnes of concentrates sold in the period (2017: 158,591 tonnes). As at 31 December 2018, Atalaya had 4,667 tonnes of copper concentrate in inventories (2017: 7,274 tonnes), which were shipped during Q1 2019.
  • Group operating costs and corporate costs amounted to €128.9 million and €5.9 million, respectively (2017: €114.7 million and €4.5 million, respectively), providing an EBITDA of €53.5 million for the twelve months ended 31 December 2018 (2017: €41.3 million).
  • Cash costs for 2018 were US$1.94/lb of payable copper (2017: US$1.91/lb), below the revised guidance of US$1.95/lb, providing healthy margins and positive cash flows at average realised copper prices of $2.95/lb during the year.
  • AISC averaged $2.26/lb of payable copper for the year, within the revised guidance of US$2.25-2.40/lb.
  • Group net income of €34.4 million (or 25.4 cents per outstanding share) (2017: €18.2 million or 15.5 cents per outstanding share).
  • Net assets totalled €286.4 million (2017: €246.9 million), comprising non-current assets of €337.5 million, non-current liabilities of €59.6 million and working capital of €8.4 million. Long term liabilities include the Deferred Consideration to Astor amounting to €53 million. Working capital includes €33.1 million of cash and cash equivalents.
  • Positive cash flows from operating activities for the twelve months ended 31 December 2018 amounted to €55.3 million (2017: €30.5 million). Cash invested during the period amounted to €65.7 million (2017: €22.7 million), mainly for the expansion of Proyecto Riotinto and deferred mining costs.

 

Operating Highlights

Proyecto Riotinto – operating ahead of expectations

  • 4% increase in tonnes of ore processed to 9.8 million tonnes (“Mt”) (2017: 8.8 Mt) with stable operations quarter-on-quarter during the second full year of commercial production.
  • 3% year on year increase in copper production to 42,114 tonnes (2017: 37,164 tonnes), above the revised 2018 high-end guidance of 41,000 tonnes.
  • Copper grade consistent with estimates averaging 0.49% for 2018.
  • Year on year increase in recovery rate to 88.30% (2017: 85.45%), which was above revised increased high-end guidance for the year.
  • On 9 July 2018, Atalaya announced the completion of a NI 43-101 report on an updated resources and reserves estimate for Proyecto Riotinto. The main features of the reports, based on the position as at 31 December 2017, are:
    • Updated open pit proven and probable reserves estimate report a 29% increase in mineral reserves up to 197 million tonnes grading 0.42% of copper.
    • Reduced operating cash cost and All-in Sustaining costs of $2.10/lb and $2.22/lb of payable copper, respectively.
    • Life of mine of 13.8 years including ramp up production to 11 million tonnes in 2019 and 15 million tonnes from 2020.
    • Reduced strip ratio, waste to ore, of 1.43:1

 

Expansion of Proyecto Riotinto – remains on track for mechanical completion at the end of Q2 2019 

  • The 15Mtpa Expansion Project progressed according to schedule during the year with an overall progress completion at the end of December 2018 of over 80%.
  • All efforts are now concentrated around site construction activities:
    • Earthworks were completed and civil engineering works are being finalised.
    • Installation of mechanical equipment was completed in the flotation and concentrate handling areas.
    • Structural steel works have been finalised in the flotation area with piping installation under way.
    • Piping was completed in the concentrate handling area with electrical installation well advanced.

 

Proyecto Touro  

  • During the second quarter of 2018, the Company announced the completion of a pre-feasibility study (“PFS”) for the proposed open pit mine and concentrator at Proyecto Touro, prepared using the headings of, and guidance set out in the NI 43-101 report. Highlights of the PFS report are:
    • 392,000 tonnes of contained copper in Proven and Probable reserves;
    • Average yearly production of 30,000 tonnes of copper and 70,000 ounces of silver in concentrate;
    • Pre-production capital expenditure of $165 million;
    • All-in sustaining costs of US$1.85/lb of payable Cu net of silver credits; and
    • NPV of $180 million post-tax at 8% discount rate using long term copper price of US3.00/lb.
  • The environmental impact assessment process was completed during Q4 2018 and since the filing, a number of queries have been addressed and cleared as part of the consulting and permitting process. Atalaya is looking forward to the evaluation of the project from a regulatory perspective which is the next step in the permitting process.

 

Outlook for 2019

  • 2019 production guidance estimated within 45,000 to 46,500 tonnes of copper, including the impact of the extra capacity from the expansion towards the end of the year.
  • Cash costs and AISC 2019 guidance to range from US$1.95/lb to US$2.15/lb and from US$2.25/lb to US$2.45/lb, respectively.

 

Operating Highlights

Ruling of AAU

  • On 26 September 2018, Atalaya received notice from the Tribunal Superior de Justicia de Andalucía ruling in favour of certain claims made by environmental group Ecologistas en Accion (“EeA”) against the government of Andalucía (“Junta de Andalucía” or “JdA”) and Atalaya, as co-defendant in the case.

In July 2014, EeA had filed a legal claim to JdA with a request to declare null the Unified Environmental declaration (in Spanish, Authorization Ambiental Unificada, or “AAU”) granted to Atalaya Riotinto Minera, S.L.U. dated 27 March 2014, which was required in order to secure the required mining permits for Proyecto Riotinto. The judgment, in spite of annulling the AAU on procedural grounds, made very clear that the AAU was correct and therefore, rejected the issues raised by EeA and confirmed the decision of JdA not to suspend the AAU.

The JdA filed for appeal to the Supreme Court. Although the claim was against the JdA, Atalaya, being an interested party in the process, voluntarily joined as co-defendant to ask for permission to appeal to the Supreme Court in Spain.

On 29 March 2019, Atalaya announced the receipt of notification from the Supreme Court in Spain stating that it does not have jurisdiction over the appeal made by the Junta de Andalucía and the Company, which voluntary joined the appeal as con-defendant.

The main legal consequence of the Supreme Court rejection is the ruling of the Junta de Andalucía dated 26 September 2018 is now final and enforceable and the environmental authority must repair the faultiness in the process. The Company is currently in discussions to the Junta de Andalucía to resolve the formal defects identifiedw by the Tribunal Superior de Justicia de Andalucía.

The Company continues operating the mine normally as the ruling does not state the operation at Proyecto Riotinto

Astor

  • On 1 November 2018, the Company announced that a judgment had been handed down in the Astor Case at the Court of Appeal. The Court of Appeal confirmed the ruling from the High Court made on 6 March 2017, and consequently, the Company recorded a liability for €53 million to be paid from the excess cash generated by Atalaya Riotinto Minera, S.L.U. (“ARM”). As of 31 December 2018, no consideration has been paid.

 

Alberto Lavandeira, CEO commented:

“These results demonstrate once again that the team at Atalaya delivers. Our second year of production has successfully built on our first, with incremental growth quarter on quarter. We are delighted to have delivered ahead of or in line with expectations across the majority of our core key performance indicators, which has had a positive impact on our financials and bottom line. We have achieved all this while also progressing the expansion of Riotinto, and the rate at which this programme is advancing means that we look forward to 2019 with confidence.  Riotinto’s additional exploration potential, combined with Proyecto Touro and our ongoing efforts to seek new opportunities, provides the pathway via which management can realise its ambition to grow the company.”

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

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 Elisabeth Cowell / Adam Lloyd / Tom Carnegie + 44 20 3757 6880
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 / Tom Rider / Michael Rechsteiner +44 20 7236 1010

 

Download “Audited consolidated results for the year ended 31 December 2018” (1.18MB)