Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY |
OTC: ATCMF) today announced its financial results for the three
months ended September 30, 2019 (“Q3-2019”), posting income from
mining operations of $2.5 million and a net loss of $0.3 million.
Fernando E. Ganoza, CEO and Director, commented,
"This quarter we had record production and achieved a very
competitive all-in sustaining cash cost of $1.52. Unfortunately,
these achievements did not reflect in the financial results as the
second concentrate shipment was delayed to the fourth quarter,
along with the revenue associated with those tonnes. For the fourth
quarter, with this additional shipped concentrate, we anticipate
strong results which we expect will show robust financial
performance for the second half of this year." Mr. Ganoza
continued, "Our emphasis at El Roble will be to continue delivering
on our adjusted production guidance while we aggressively explore
our regional and underground drill target areas. At our recently
acquired La Plata project, we continue advancing technical work and
plan to start drilling before year end"
Third Quarter Financial
Highlights
- Net loss for the three months ended September 30, 2019 amounted
to $0.3 million, compared with income of $3.0 million for the same
period last year (“Q3-2018”). Net loss for the period was
significantly affected by one of the two scheduled Q3-2019
concentrate shipments being delayed to the subsequent quarter, due
to a lack of vessel availability.
- Sales for the period decreased 36% to $9.6 million when
compared with $14.9 million in Q3-2018. The decrease is mostly
explained by the second scheduled shipment being delayed into
Q4-2019. Copper (“Cu”) and gold (“Au”) accounted for 88% and 12% of
the 6,911 (Q3-2018 - 10,017) dry metric tonnes (“DMT”)
provisionally invoiced during Q3-2019.
- The average realized price per metal on provisional invoicing
was $2.62 (Q3-2018 - $3.10) per pound of copper and $1,507.81
(Q3-2018 - $1,199.48) per ounce of gold.
- Income from operations was $1.2 million (Q3-2018 - $2.8
million) while cash flow from operations, before changes in working
capital, was $3.8 million (Q3-2018 - $4.6 million). Cash used for
capital expenditures amounted to 2.7 million (Q3-2018 - $3.5
million).
- Working capital was $6.8 million (December 31, 2018 - $7.2
million), while the Company had $2.2 million (December 31, 2018 -
$Nil) long-term loans payable.
- Cash costs(1) were $107.38 per tonne of processed ore and $1.08
per pound of payable copper produced(2), which were decreases of
13% and 27% over Q3-2018, respectively. The decrease in the cash
cost per pound of payable copper net of by products is primarily
explained by a lower cost per processed tonne, along with higher
by-product credit from gold.
- Cash margin was $1.54 (Q3-2018 - $1.62) per pound of payable
copper produced, which was a decrease of 5% over Q3-2018 (refer to
non-GAAP Financial Measures).
- All-in sustaining cash cost per payable pound of copper
produced(1) was $1.52 (Q3-2018 - $1.95).
- The Company produced 11,757 (Q3-2018 - 10,877) DMT of
concentrate with a metal content of 5.7 million (Q3-2018 - 5.4
million) pounds (“lbs”) of copper and 3,320 (Q3-2018 - 3,010)
ounces (“oz”) of gold.
- Processed tonnes increased 7% to 76,532 compared to 71,760 in
Q3-2018.
- At the end of the quarter, 7,749 (December 31, 2018 - 11,036)
wet metric tonnes of non-invoiced concentrate remained at the
Company’s warehouses.
Third Quarter Summary of Financial
Results
|
Q32019 |
|
Q32018 |
|
%Change |
|
Revenue |
$ |
9,581,287 |
|
$ |
14,900,072 |
|
-36 |
% |
Cost of sales |
|
(7,114,404 |
) |
|
(10,977,829 |
) |
-35 |
% |
Income from mining operations |
|
2,466,883 |
|
|
3,922,243 |
|
-37 |
% |
As a % of revenue |
|
26 |
% |
|
26 |
% |
-2 |
% |
General and administrative expenses |
|
1,210,816 |
|
|
1,010,377 |
|
20 |
% |
Income from operations |
|
1,181,530 |
|
|
2,807,190 |
|
-58 |
% |
As a % of revenue |
|
12 |
% |
|
19 |
% |
-35 |
% |
Income before income taxes |
|
772,911 |
|
|
1,383,145 |
|
-44 |
% |
Net income (loss) |
|
(303,470 |
) |
|
2,972,922 |
|
-110 |
% |
As a % of revenue |
|
-3 |
% |
|
20 |
% |
-116 |
% |
Operating cash flow before changes in non-cash operating working
capital items(1) |
$ |
3,842,917 |
|
$ |
4,629,186 |
|
-17 |
% |
Third Quarter Operations Review
In Q3-2019, the Company produced 5.71 million
lbs of copper, 3,320 oz of gold, and 12,216 oz of silver. When
compared to Q3-2018, production increased by 7.0% for copper and
10.0% for gold. The increases for both copper and gold are mainly
explained by the increases in tonnes of ore mined and processed
along with an increase in head grades and partially offset by a
slight decrease in recoveries.
Cash costs(1) for the quarter were $107.38 per
tonne of processed ore, and $1.08 per pound of payable copper
produced(2), decreases of 13% and 27% over the same period last
year, respectively. All-in sustaining cash cost per payable pound
of copper produced(1)(2) was $1.52.
Third Quarter Operational
Details
|
Q32019 |
Q32018 |
%Change |
|
Production (Contained in Concentrate)(3) |
|
|
|
Copper (000s lbs) |
5,712 |
5,358 |
7 |
% |
Gold (oz) |
3,320 |
3,010 |
10 |
% |
Silver (oz) |
12,216 |
10,250 |
19 |
% |
Mine |
|
|
|
Tonnes of material mined |
74,462 |
70,652 |
5 |
% |
Mill |
|
|
|
Tonnes processed |
76,532 |
71,760 |
7 |
% |
Tonnes processed per day |
863 |
837 |
3 |
% |
Copper grade (%) |
3.66 |
3.63 |
1 |
% |
Gold grade (g/t) |
2.34 |
2.17 |
8 |
% |
Silver grade (g/t) |
10.80 |
11.28 |
-4 |
% |
Recoveries |
|
|
|
Copper (%) |
92.5 |
93.4 |
-1 |
% |
Gold (%) |
58.0 |
60.3 |
-4 |
% |
Silver (%) |
45.7 |
40.3 |
13 |
% |
Concentrates |
|
|
|
Copper Concentrates (DMT) |
11,757 |
10,877 |
8 |
% |
Copper (%) |
22.0 |
22.3 |
-1 |
% |
Gold (g/t) |
8.8 |
8.6 |
2 |
% |
Silver (g/t) |
32.4 |
29.3 |
11 |
% |
|
|
|
|
Payable copper produced (000s lbs) |
5,426 |
5,105 |
6 |
% |
Cash cost per pound of payable copper ($/lbs)(1)(2) |
1.08 |
1.49 |
-27 |
% |
The financial statements and MD&A are
available on SEDAR and have also been posted on the company's
website at http://www.aticomining.com/s/FinancialStatements.asp
Third Quarter Exploration
Update
During Q3-2019, 4,779 meters of drilling were
completed at the El Roble project, of which 1,745 meters were
drilled underground looking for new massive sulphide deposits. On
surface, the Company completed 3,034 meters at three of the
identified perspective target areas, Gorgona, Carmelo and
Favorita.
The predominance of the drilling was completed
at the Gorgona and Carmelo target areas. The team completed seven
holes totaling 2,584 meters of drilling. The results of this
initial round of drilling showed the continuation of the
black-chert unit with good silicification at both target areas,
well disseminated and moderated occurrences of pyrite-pyrrhotite
stringers along with small intercepts of massive sulphides ranging
from 3 to 15 centimeters in size. These same signatures are found
in very close proximity to our existing ore bodies at the mine and
continue to validate the proceptivity of said target areas.
Core drilling program will continue in the
fourth quarter testing anomalies at depth and to the southeast of
the mine mineralization (Zeus plunge target). In parallel, the
Company plans to further test Carmelo, Gorgona, Favorita and begin
drilling preparations for two new regional target areas.
The Company plans to drill at least another
4,000 meters in Q4-2019.
La Plata Overview
The La Plata project is a gold rich volcanogenic
massive sulphide deposit that was the subject of small-scale mining
from 1975-1981 by Outokumpu Finland. The project benefits from a
modern drill and exploration database which was completed by
Cambior Inc. from 1996-1999, Cornerstone Capital from 2006-2009 and
Toachi from 2016-2019. In total, there is drill core and logs from
more than 28,300 metres of drilling.
Historic resources based on drilling by Cambior
and Cornerstone were estimated at 913,977 tonnes grading 8.01 grams
gold per tonne, 88.3 grams silver per tonne, 5.01% copper, 6.71%
zinc and 0.78% lead per tonne in the inferred category. More
recently, Toachi Mining completed a PEA estimating an inferred
resource of 1.85 million tonnes grading 4.10 grams gold per tonne,
50.0 grams silver per tonne, 3.30% copper, 4.60% zinc and 0.60%
lead per tonne
The La Plata project, consisting of two
concessions, covers 2,300 hectares and strikes for almost 4km,
containing known mineralization in two VMS lenses and nine priority
exploration targets.
Atico is currently gearing up to start infill
and exploration drilling while also conducting additional technical
work with the aim of delivering a feasibility study on the
project.
The Company has a binding option agreement with
a private Ecuadorean company to earn up to 75% in the La Plata
project, of which the first option to acquire the initial 60%
ownership has been exercised. Please refer to the Company’s
MD&A for the nine months ended September 30, 2019 for further
details.
El Roble Mine
The El Roble mine is a high grade, underground
copper and gold mine with nominal processing plant capacity of 850
tonnes per day, located in the Department of Choco in Colombia. Its
commercial product is a copper-gold concentrate.
Since obtaining control of the mine on November
22, 2013, Atico has upgraded the operation from a historical
nominal capacity of 400 tonnes per day.
El Roble has Proven and Probable reserves of
1.47 million tonnes grading 3.40% copper and 1.88 g/t gold, at a
cut-off grade of 1.93% copper equivalent as of June 30, 2018.
Mineralization is open at depth and along strike and the Company
plans to further test the limits of the deposit.
On the larger land package, the Company has
identified a prospective stratigraphic contact between volcanic
rocks and black and grey pelagic sediments and cherts that has been
traced by Atico geologists for ten kilometers. This contact has
been determined to be an important control on volcanogenic massive
sulfide (“VMS”) mineralization on which Atico has identified
numerous target areas prospective for VMS type mineralization
occurrence, which is the focus of the current surface drill program
at El Roble.
Qualified Person
Mr. Thomas Kelly (SME Registered Member
1696580), advisor to the Company and a qualified person under
National Instrument 43-101 standards, is responsible for ensuring
that the technical information contained in this news release is an
accurate summary of the original reports and data provided to or
developed by Atico.
About Atico Mining Corporation
Atico is a growth-oriented Company, focused on
exploring, developing and mining copper and gold projects in Latin
America. The Company operates the El Roble mine and is pursuing
additional acquisition opportunities. For more information, please
visit www.aticomining.com.
ON BEHALF OF THE BOARD
Fernando E. GanozaCEOAtico Mining
Corporation
Trading symbols: TSX.V: ATY | OTC: ATCMF
Investor RelationsIgor DutinaTel:
+1.604.633.9022
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
No securities regulatory authority has either
approved or disapproved of the contents of this news release. The
securities being offered have not been, and will not be, registered
under the United States Securities Act of 1933, as amended (the
‘‘U.S. Securities Act’’), or any state securities laws, and may not
be offered or sold in the United States, or to, or for the account
or benefit of, a "U.S. person" (as defined in Regulation S of the
U.S. Securities Act) unless pursuant to an exemption therefrom.
This press release is for information purposes only and does not
constitute an offer to sell or a solicitation of an offer to buy
any securities of the Company in any jurisdiction.
Cautionary Note Regarding Forward
Looking Statements
This announcement includes certain
“forward-looking statements” within the meaning of Canadian
securities legislation. All statements, other than statements of
historical fact, included herein, without limitation the use of net
proceeds, are forward-looking statements. Forward- looking
statements involve various risks and uncertainties and are based on
certain factors and assumptions. There can be no assurance that
such statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in
such statements. Important factors that could cause actual results
to differ materially from the Company’s expectations include
uncertainties relating to interpretation of drill results and the
geology, continuity and grade of mineral deposits; uncertainty of
estimates of capital and operating costs; the need to obtain
additional financing to maintain its interest in and/or explore and
develop the Company’s mineral projects; uncertainty of meeting
anticipated program milestones for the Company’s mineral projects;
and other risks and uncertainties disclosed under the heading “Risk
Factors” in the prospectus of the Company dated March 2, 2012 filed
with the Canadian securities regulatory authorities on the SEDAR
website at www.sedar.com
Non-GAAP Financial Measures
The items marked with a "(1)" are alternative
performance measures and readers should refer to Non-GAAP Financial
Measures in the Company's Management's Discussion and Analysis for
the nine months ended September 30, 2019 as filed on SEDAR and as
available on the Company's website for further details.
(1) Alternative performance measures; please
refer to “Non-GAAP Financial Measures” at the end of this
release.(2) Net of by-product credits(3) Subject to adjustments on
final settlement
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