Atalaya Mining Plc (AIM: ATYM; TSX: AYM), is pleased to announce its unaudited quarterly results for the three months ended 31 March 2020 (“Q1 2020”), together with the unaudited, condensed, interim consolidated financial statements.
The Q1 2020 Unaudited Condensed Interim Consolidated Financial Statements are also available under the Company’s profile on SEDAR at www.sedar.com and on Atalaya’s website at www.atalayamining.com.
Unaudited Financial Highlights for the Period
|Quarter ended 31 March||Q1 2020||Q1 2019||%|
|Revenues from operations||€k||61,189||51,712||18.3%|
|Profit for the period||€k||2,931||14,155||(79.3%)|
|Earnings per share||€ cents/share||2.3||10.3||(77.7%)|
|Cash flows from operating activities||€k||15,485||8,114||90.8%|
|Cash flows used in investing activities||€k||(5,585)||(17,138)||(67.4%)|
|Cash flows from financing activities||€k||24,046||–||–|
|Working capital surplus||€k||7,878||9,010||(12.6%)|
|Average realised copper price||US$/lb||2.58||2.80||(7.9%)|
|Cu concentrate produced||(tonnes)||60,003||43,441||38.1%|
|Cash costs||US$/lb payable||1.99||1.89||5.3%|
|All-In Sustaining Costs||US$/lb payable||2.27||2.18||4.1%|
- Q1 2020 revenues of €61.2 million (Q1 2019: €51.7 million) due to higher concentrate sales as a result of increased production following the completion of the Proyecto Riotinto plant expansion.
- Q1 2020 operating costs of €49.2 million (Q1 2019: €30.0 million). Higher expenses are mainly related to the higher production volume as well as the one-off increased electricity consumption during January to fulfil the SAG mill, consumables and maintenance costs required to support the nameplate processing capacity during the initial weeks of the year.
- Q1 2020 EBITDA of €9.3 million (Q1 2019: €19.5 million). The decrease in EBITDA was driven by lower realised copper prices and higher operating costs during Q1 2020.
- Q1 2020 profit after tax of €2.9 million or 2.3 cents basic earnings per share (Q1 2019: €14.2 million or 10.3 cents basic earnings per share).
- Q1 2020 average realised copper prices, including QPs, of US$2.58/lb (Q1 2019: US$2.80/lb) with significant variances between the January average realised copper price of US$2.78/lb and the March average realised copper price of US$2.35/lb.
- Q1 2020 cash costs of US$1.99/lb payable copper (Q4 2019: US$1.70/lb payable copper) (Q1 2019: US$1.89/lb payable copper) due to higher processing and maintenance costs. All-in Sustaining Costs (“AISC”) during Q1 2020 amounted to US$2.27/lb of payable copper compared with US$2.18/lb of payable copper during Q4 2019 and Q1 2019 (US$2.18/lb). The increased AISC is due to a one-off sustaining capex project at the tailings dams.
- Inventories of concentrate at 31 March 2020 amounted to €4.4 million (€11.0 million at 31 December 2019).
- At the end of Q1 2020, working capital was €7.9 million, a €4.3 million increase from €3.6 million at the end of Q4 2019.
- €24.0 million drawn down from existing unsecured credit facilities with annual average interest rates below 2% to ensure sufficient liquidity during the COVID-19 pandemic. Unrestricted cash as at 31 March 2020 was €42.0 million.
- Cash flow from operating activities before changes in working capital of €10.0 million (Q1 2019: €20.3 million).
- Net cash flow from operating activities after changes in working capital of €15.5 million (Q1 2019: €8.1 million).
- Copper production during Q1 2020 was 13,229 tonnes, an increase of 29.5% compared with 10,219 tonnes produced during Q1 2019.
- Ore processed during Q1 2020 was 3,427,148 tonnes, an increase of 40.1% on Q1 2019 when ore processed amounted to 2,445,977 tonnes.
- Q1 2020 copper recovery of 82.62% (Q1 2019: 90.26%). Lower recoveries were due to a combination of treating lower grade surface stockpiles resulting from partial flooding of the pit floor during December 2019, several plant stoppages for scheduled maintenance and the COVID-19 shutdown order.
- The 15Mtpa Expansion Project was completed with the processing plant fully commissioned and operating at an increased annualised rate of 15Mtpa since January 2020.
- As announced on 30 March 2020, the Royal Decree issued by the Spanish government resulted in the Company stopping operations at Proyecto Riotinto for four full days until clarification was provided on 3 April 2020 and operations restarted. Proyecto Riotinto continues to operate in compliance with the government’s specific requirements and recommendations, to prevent exposure to COVID-19 and the spread of the virus.
- On 13 April 2020, the Company was formally notified that the Environment Department of the Xunta de Galicia had issued a negative Impact Declaration (“DIA”) required to restart copper production at Proyecto Touro.
- The restart proposal for Proyecto Touro, a former open pit mine, included managing past environmental liabilities and using transfer mining techniques with zero water discharge. Flotation tailings were to be stored in a plastic-lined impoundment built with compacted rock walls using techniques similar to those used in water dam construction.
- The Company, together with its advisers, is assessing its options to progress Proyecto Touro. These may include several types of appeal or modified project proposals to address the concerns of the Xunta de Galicia.
- Annual guidance range of US$1.95/lb-US$2.05/lb and US$2.20/lb-US$2.30/lb for cash costs and AISC, respectively, is currently being maintained.
- Production guidance remains at 55k to 58k tonnes of contained copper.
Management continues to monitor the impact of COVID-19 on the operations and the ongoing cost structure and will update the market with any potential changes in expectations.
On 7 May 2020, the Company announced the Junta de Andalucía had issued a favourable resolution (the “Resolution”) which validates the Unified Environmental Authorisation (the “AAU”) of Proyecto Riotinto. The Resolution ends the legal process announced by the Company on 26 September 2018 in relation to the judgement made by the Tribunal Superior de Justicia de Andalucía (“TSJA”) in connection with the AAU.
Alberto Lavandeira, CEO commented:
“We are very pleased to have obtained a favourable conclusion to the legal process in relation to the AAU of Proyecto Riotinto, which has been resolved with no impact to our operation. Notwithstanding the successful commissioning of our 15Mtpa expansion and the consequent increase in production, higher operating costs relating to the integration of the expanded plant, together with a significant reduction in the copper price during the period, have impacted our financial results. We remain confident that our guidance numbers on production and costs for the remainder of the year will be achievable. However, the Company is aware that the COVID-19 pandemic may still further impact how the Company manages its operations and is accordingly keeping its guidance under regular review.”
This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
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(NOMAD and Joint Broker)
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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. For further information, visit www.atalayamining.com