Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY |
OTC: ATCMF) today announced its financial results for the three
months ended March 31, 2021 (“Q1-2021”), posting income from mining
operations of $5.3 million and a net income of $1.2 million.
Fernando E. Ganoza, CEO and Director, commented,
"This was a particularly challenging quarter given the operational
setbacks resulting in loss production and an increase in cash cost,
partially mitigated by higher realized metal prices leading to a
cash margin of $2.38 per pound of payable copper. The Company
closed the quarter showing a strong cash position of US$ 9.2
million and US$ 18 million in trade receivables, which were mostly
realized in early April.” Mr. Ganoza continued," We anticipate that
we will be able to make up for the lost production throughout the
remainder of this year to meet the annual guidance and take full
advantage of the higher metal price environment.”
First Quarter Financial
Highlights
- Net income for the three months
ended March 31, 2021 (“Q1-2021”) amounted to $1.2 million, compared
with a loss of $1.6 million for the comparative period (“Q1-2020”).
Net income was significantly affected by a higher realized copper
price, partially offset by higher production costs and a negative
fair value adjustment on outstanding derivatives, as compared to
Q1-2020.
- Sales for the period increased 155%
to $19.3 million when compared with $7.6 million in Q1-2020. Copper
(“Cu”) and gold (“Au”) accounted for 92% and 8% of the 10,125
(Q1-2020 – 8,588) dry metric tonnes (“DMT”) shipped and invoiced
during Q1-2021. The average realized price per metal on invoicing
was $4.05 (Q1-2020 - $2.18) per pound (“lbs”) of copper and $1,728
(Q1-2020 - $1,578) per ounce (“oz”) of gold.
- Working capital was $21.3 million
(December 31, 2020 - $22.5 million), while the Company had $6.6
million (December 31, 2020 - $6.8 million) in long-term loans
payable.
- Cash costs(1) were $125.24 per
tonne of processed ore and $1.67 per pound of payable copper
produced(2), which were increases of 23% and 48% over Q1-2020,
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 $2.38
(Q1-2020 - $1.04) per pound of payable copper produced, which was
an increase of 126% over Q1-2020.
- All-in sustaining cash cost per
payable pound of copper produced(1)(2) was $2.85 (Q1-2020 -
$1.60).
First Quarter Summary of Financial
Results
|
|
Q12021 |
|
Q12020 |
|
%Change |
Revenue |
|
$ |
19,303,903 |
|
$ |
7,563,092 |
|
155% |
Cost of sales |
|
|
(12,356,497 |
) |
|
(8,970,716 |
) |
38% |
Income from mining operations |
|
|
6,947,406 |
|
|
(1,407,624 |
) |
594% |
As a % of revenue |
|
|
36% |
|
|
-19% |
|
293% |
General and administrative expenses |
|
|
1,357,573 |
|
|
1,058,570 |
|
28% |
Income from operations |
|
|
5,311,749 |
|
|
(2,560,117 |
) |
307% |
As a % of revenue |
|
|
28% |
|
|
-34% |
|
181% |
Income before income taxes |
|
|
2,753,712 |
|
|
(1,714,920 |
) |
261% |
Net income (loss) |
|
|
1,255,782 |
|
|
(1,555,449 |
) |
181% |
As a % of revenue |
|
|
7% |
|
|
-21% |
|
132% |
Operating cash flow before changes in non-cash operating working
capital items(1) |
|
$ |
7,340,036 |
|
$ |
(1,644,521 |
) |
546% |
First Quarter Operational
Review
In Q1-2021, the Company produced 4.5 million lbs
of copper, 2,134 oz of gold, and 7,870 oz of silver. When compared
to Q1-2020, production decreased by 9.0% for copper and 19.7% for
gold. The decrease for both copper and gold is mostly explained by
6.9% decrease in processed ore, while for gold an additional factor
was a 12.8% decrease in head grade.
Cash costs(1) for the period were $125.24 per
tonne of processed ore, and $1.67 per pound of payable copper
produced, increases of 23% and 48% over Q1-2020, respectively.
All-in sustaining cash cost per payable pound of copper
produced(1)(2) was $2.85.
First Quarter Operational
Details
|
|
Q12021 |
Q12020 |
%Change |
Production (Contained in Concentrate)(3) |
|
|
|
|
Copper (000s lbs) |
|
4,503 |
4,959 |
-9% |
Gold (oz) |
|
2,134 |
2,736 |
-20% |
Silver (oz) |
|
7,870 |
9,784 |
-21% |
Mine |
|
|
|
|
Tonnes of material mined |
|
68,282 |
72,777 |
-12% |
Mill |
|
|
|
|
Tonnes processed |
|
73,603 |
73,374 |
-7% |
Tonnes processed per day |
|
954 |
878 |
9% |
Copper grade (%) |
|
3.23 |
3.31 |
-2% |
Gold grade (g/t) |
|
1.71 |
1.96 |
-13% |
Silver grade (g/t) |
|
6.98 |
10.86 |
-24% |
Recoveries |
|
|
|
|
Copper (%) |
|
91.2 |
91.9 |
1% |
Gold (%) |
|
56.8 |
59.0 |
-4% |
Silver (%) |
|
51.4 |
38.2 |
11% |
Concentrates |
|
|
|
|
Copper Concentrates (DMT) |
|
10,365 |
10,213 |
2% |
Copper (%) |
|
19.7 |
21.9 |
-10% |
Gold (g/t) |
|
6.4 |
8.3 |
-21% |
Silver (g/t) |
|
23.6 |
29.8 |
-22% |
|
|
|
|
|
Payable copper produced (000s lbs) |
|
4,278 |
4,680 |
-9% |
Cash cost per pound of payable copper ($/lbs)(1)(2) |
|
1.67 |
1.14 |
48% |
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, 2020 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 three months ended March 31, 2021 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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