Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY |
OTC: ATCMF) today announced its financial results for the three
months ended September 30, 2020 (“Q3-2020”), posting income from
mining operations of $5.0 million and a net income of $1.9 million.
Fernando E. Ganoza, CEO and Director, commented,
"We are pleased to report strong financial results despite selling
only one concentrate shipment in the period. These results are a
good reflection of the current strong metal price environment
combined with our solid operating results. In the fourth quarter,
we anticipate selling two concentrate shipments and financial
results reflecting a very robust second half of the year. At El
Roble, the team will continue focusing on the exploration program
while achieving our planned operational targets. At La Plata, the
focus continues to be the infill drill program to advance the
feasibility study while also adding a step out drill program to
test new target areas like Guatuza. As we continue to reap the
rewards of strong financial results, our ability to carry out the
planned growth programs at both El Roble and La Plata will be
enhanced.” Mr. Ganoza continued, "Throughout the Company we
continue to prioritize the health and safety of all of our
employees during these unprecedented times.”
Third Quarter
Financial Highlights
- Net income for the three months
ended September 30, 2020 amounted to $1.9 million, compared with
loss of $0.3 million for the same period last year (“Q3-2019”). Net
income for the quarter was positively affected by an increase in
concentrate shipped and invoiced at higher realized copper price
and lower cost of sales per unit, as compared to Q3-2019.
- Sales for the period increased 47%
to $14.1 million when compared with $9.6 million in Q3-2019. Copper
(“Cu”) and gold (“Au”) accounted for 83% and 17% of the 9,291
(Q3-2019 – 6,911) dry metric tonnes (“DMT”) shipped and invoiced
during Q3-2020. The average realized price per metal on invoicing
was $2.98 (Q3-2019 - $2.62) per pound (“lbs”) of copper and $1,991
(Q3-2019 - $1,508) per ounce (“oz”) of gold.
- Working capital was $9.4 million
(December 31, 2019 - $9.9 million), while the Company had $1.1
million (December 31, 2019 - $2.2 million) in long-term loans
payable
- Cash costs(1) were $113.90 per
tonne of processed ore and $1.13 per pound of payable copper
produced(2), which were increases of 6% and 5% over Q3-2019,
respectively. The increase in the cash cost per pound of payable
copper net of by products is primarily explained by a higher cost
per processed tonne, along with lower by-product credit from
gold.
- Cash margin(1)(2) was $1.85
(Q3-2019 - $1.54) per pound of payable copper produced, which was
an increase of 20% over Q3-2019.
- All-in sustaining cash cost per
payable pound of copper produced(1)(2) was $1.54 (Q2-2019 -
$1.52).
Third Quarter Summary
of Financial Results
|
|
Q32020 |
Q32019 |
%Change |
Revenue |
|
$ |
14,064,743 |
|
$ |
9,581,287 |
|
47 |
% |
Cost of sales |
|
|
(9,070,796 |
) |
|
(7,114,404 |
) |
27 |
% |
Income from mining operations |
|
|
4,993,947 |
|
|
2,466,883 |
|
102 |
% |
As a % of revenue |
|
|
36 |
% |
|
26 |
% |
38 |
% |
General and administrative expenses |
|
|
1,046,709 |
|
|
1,210,816 |
|
-14 |
% |
Income from operations |
|
|
3,769,289 |
|
|
1,181,530 |
|
219 |
% |
As a % of revenue |
|
|
27 |
% |
|
12 |
% |
117 |
% |
Income before income taxes |
|
|
3,902,112 |
|
|
772,911 |
|
300 |
% |
Net income (loss) |
|
|
1,875,823 |
|
|
(303,470 |
) |
718 |
% |
As a % of revenue |
|
|
13 |
% |
|
-3 |
% |
521 |
% |
Operating cash flow before changes in non-cash operating working
capital items(1) |
|
$ |
3,057,114 |
|
$ |
3,842,918 |
|
-20 |
% |
Third Quarter
Operational Review
In Q3-2020, the Company produced 5.5 million lbs
of copper, 2,607 oz of gold, and 9,953 oz of silver. When compared
to Q3-2019, production decreased by 3.0% for copper and 21.5% for
gold. The decreases for both copper and gold were mainly driven by
lower processed tonnes this quarter. In the case for copper, this
was partially offset by higher head grades while gold was further
impacted by a lower than anticipated recovery and head grade. We
anticipate that gold recovery will improve in the fourth
quarter.
Cash costs(1) for the period were $113.90 per
tonne of processed ore, and $1.13 per pound of payable copper
produced, increases of 6% and 5% over the Q3-2019, respectively.
All-in sustaining cash cost per payable pound of copper
produced(1)(2) was $1.54.
Third Quarter
Operational Details
|
|
Q32020 |
Q32019 |
%Change |
Production (Contained in Concentrate)(3) |
|
|
|
|
Copper (000s lbs) |
|
5,540 |
5,712 |
-3 |
% |
Gold (oz) |
|
2,607 |
3,320 |
-22 |
% |
Silver (oz) |
|
9,953 |
12,216 |
-19 |
% |
Mine |
|
|
|
|
Tonnes of material mined |
|
71,993 |
74,462 |
-3 |
% |
Mill |
|
|
|
|
Tonnes processed |
|
73,603 |
76,532 |
-4 |
% |
Tonnes processed per day |
|
860 |
863 |
Nil% |
|
Copper grade (%) |
|
3.74 |
3.66 |
2 |
% |
Gold grade (g/t) |
|
1.93 |
2.34 |
-18 |
% |
Silver grade (g/t) |
|
9.20 |
10.80 |
-15 |
% |
Recoveries |
|
|
|
|
Copper (%) |
|
91.4 |
92.5 |
-1 |
% |
Gold (%) |
|
57.0 |
58.0 |
-2 |
% |
Silver (%) |
|
47.0 |
45.7 |
3 |
% |
Concentrates |
|
|
|
|
Copper Concentrates (DMT) |
|
11,957 |
11,757 |
2 |
% |
Copper (%) |
|
21.0 |
22.0 |
-5 |
% |
Gold (g/t) |
|
6.8 |
8.8 |
-23 |
% |
Silver (g/t) |
|
25.8 |
32.4 |
-20 |
% |
|
|
|
|
|
Payable copper produced (000s lbs) |
|
5,263 |
5,426 |
-3 |
% |
Cash cost per pound of payable copper ($/lbs)(1)(2) |
|
1.13 |
1.08 |
5 |
% |
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
El Roble Mine
The El Roble mine is a high grade, underground
copper and gold mine with nominal processing plant capacity of
1,000 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.
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 consists two concessions
covering a total area of 2,300 hectares along its 4-kilometer
length, which contains known mineralization in two VMS lenses and
nine priority exploration targets.
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 year ended December 31, 2019 for further
details.
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;
the world-wide economic and social impact of COVID-19 is managed
and the duration and extent of the coronavirus pandemic is
minimized or not long-term; disruptions related to the COVID-19
pandemic or other health and safety issues, or the responses of
governments, communities, the Company and others to such pandemic
or other issues; 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, 2020 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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