Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY |
OTCQX: ATCMF) today announced its financial results for the three
months ended September 30, 2021 (“Q3-2021”), posting income from
mining operations of $13.8 million and a net income of $7.6
million.
Fernando E. Ganoza, CEO and Director, commented,
"During this quarter the operation improved most of the production
metrics relative to the first half of the year, however we saw a
slight increase in cash cost during this period mainly driven by a
lower copper head grade and metal output. The costs were mostly
mitigated by higher realized metal prices leading to a cash margin
of $2.86 per pound of payable copper as the Company broke records
in most financial metrics for a single quarter. We closed this
period showing a good cash position of $14.3 million along with
$15.0 million in trade receivables which should be realized in the
following weeks.” Mr. Ganoza continued, “As we continue to take
full advantage of the higher metal price environment, we are
expecting to achieve record revenues and earnings for the
year.”
Third Quarter Financial
Highlights
- Net income for the three months
ended September 30, 2021 (“Q3-2021”) amounted to $7.6 million,
compared with $1.9 million for the comparative period (“Q3-2020”).
The significant increase in net income was due to increase of
concentrate shipped and invoiced and a higher realized copper
price, as compared to Q3-2020.
- Sales for the period increased 126%
to $31.8 million when compared with $14.1 million in Q3-2020.
Copper (“Cu”) and gold (“Au”) accounted for 85% and 15% of the
16,184 (Q3-2020 - 9,291) dry metric tonnes (“DMT”) shipped and
invoiced during Q3-2021. The average realized price per metal on
invoicing was $4.26 (Q3-2020 - $2.98) per pound (“lb”) of copper
and $1,782 (Q3-2020 - $1,991) per ounce (“oz”) of gold.
- Working capital was $22.8 million
(December 31, 2020 - $22.5 million), while the Company had $6.2
million (December 31, 2020 - $6.8 million) in long-term loans
payable.
- Cash costs(1) were $111.49 per
tonne of processed ore and $1.40 per pound of payable copper
produced(2), which were a decrease of 2% and an increase of 24%
over Q3-2020, respectively. The increase in the cash cost per pound
of payable copper net of by products is mainly explained by a
decrease in copper production due to a lower processed head-grade
than in the same quarter of last year.
- Cash margin(1)(2) was $2.86
(Q3-2020 - $1.85) per pound of payable copper produced, which was
an increase of 54% over Q3-2020.
- All-in sustaining cash cost per
payable pound of copper produced(1)(2) was $2.19 (Q3-2020 -
$1.54).
Third Quarter Summary of Financial
Results
|
|
Q32021 |
|
Q32020 |
|
%Change |
|
Revenue |
|
$ |
31,807,740 |
|
$ |
14,064,743 |
|
126% |
|
Cost of sales |
|
|
(18,048,730 |
) |
|
(9,070,796 |
) |
99% |
|
Income from mining operations |
|
|
13,759,010 |
|
|
4,993,947 |
|
176% |
|
As a % of revenue |
|
|
43% |
|
|
36% |
|
22% |
|
General and administrative expenses |
|
|
1,439,993 |
|
|
1,046,709 |
|
38% |
|
Income from operations |
|
|
12,116,690 |
|
|
3,769,289 |
|
221% |
|
As a % of revenue |
|
|
38% |
|
|
27% |
|
42% |
|
Income before income taxes |
|
|
12,208,835 |
|
|
3,092,112 |
|
295% |
|
Net income |
|
|
7,555,343 |
|
|
1,875,823 |
|
303% |
|
As a % of revenue |
|
|
24% |
|
|
13% |
|
78% |
|
Operating cash flow before changes in non-cash operating
working capital items(1) |
|
$ |
14,574,929 |
|
$ |
3,057,114 |
|
377% |
|
Third Quarter Operational
Review
In Q3-2021, the Company produced 4.44 million
lbs of copper, 2,978 oz of gold, and 11,692 oz of silver. When
compared to same period in 2020, production decreased by 20% for
copper and increased by 14% for gold. The decrease for copper is
mostly explained by 25% decrease in processed head-grade.
Cash costs(1) for the period were $111.49 per
tonne of processed ore and $1.40 per pound of payable copper
produced, decrease of 2% and increase of 24% over Q3-2020,
respectively. All-in sustaining cash cost per payable pound of
copper produced(1)(2) was $2.19.
Third Quarter Operational
Details
|
|
Q32021 |
Q32020 |
%Change |
|
Production (Contained metals)(3) |
|
|
|
|
Copper (000s lbs) |
|
4,442 |
5,540 |
-20 |
% |
Gold (oz) |
|
2,978 |
2,607 |
14 |
% |
Silver (oz) |
|
11,692 |
9,953 |
18 |
% |
Mine |
|
|
|
|
Tonnes of material mined |
|
76,276 |
71,993 |
6 |
% |
Mill |
|
|
|
|
Tonnes processed |
|
77,816 |
73,603 |
6 |
% |
Tonnes processed per day |
|
919 |
860 |
7 |
% |
Copper grade (%) |
|
2.80 |
3.74 |
-25 |
% |
Gold grade (g/t) |
|
2.02 |
1.93 |
5 |
% |
Silver grade (g/t) |
|
8.27 |
9.20 |
-10 |
% |
Recoveries |
|
|
|
|
Copper (%) |
|
92.6 |
91.4 |
1 |
% |
Gold (%) |
|
58.8 |
56.3 |
4 |
% |
Silver (%) |
|
56.6 |
47.0 |
20 |
% |
Concentrates |
|
|
|
|
Copper Concentrates (DMT) |
|
10,704 |
11,957 |
-11 |
% |
Copper (%) |
|
18.8 |
21.0 |
-11 |
% |
Gold (g/t) |
|
8.7 |
6.8 |
28 |
% |
Silver (g/t) |
|
34.0 |
25.8 |
32 |
% |
|
|
|
|
|
Payable copper produced (000s lbs) |
|
4,182 |
5,263 |
-21 |
% |
Cash cost per pound of payable copper ($/lbs)(1)(2) |
|
1.40 |
1.13 |
24 |
% |
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
Corporate Update
The Company announced in its press release dated
July 22, 2021, that it is currently in the process of renewing the
title on its claims hosting the El Roble property, which under the
current agreement are set to expire in January 2022. This process
is still ongoing. The Company is working diligently with the
authorities and believes it has followed and fulfilled all of the
renewal requirements. However, at this time, the title has not been
renewed and there is no assurance that it will be renewed. If the
new title is not granted on or before January 23, 2022, the Company
will be forced to halt mining operations. That outcome would be
materially adverse for the Company since it will have no cash flow
from operations and will be required to change its priorities. The
Company will continue to firmly pursue the renewal of the title and
will advise the market of any developments as they occur.
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
1.00 million tonnes grading 3.02% copper and 1.76 g/t gold, at a
cut-off grade of 1.3% copper equivalent with an effective date of
September 30, 2020. 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 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
Atico’s wholly-owned 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.
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 of 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.
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 generates significant cash flow through the
operation of the El Roble mine and is developing it’s high-grade La
Plata VMS project in Ecuador. The Company is also pursuing
additional acquisition of advanced stage opportunities. For more
information, please visit www.aticomining.com.
ON BEHALF OF THE BOARD
Fernando E. GanozaCEOAtico Mining
Corporation
Trading symbols: TSX.V: ATY | OTCQX: 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, including statements regarding expected
record revenue and earnings for the year and the renewal of the
Company’s claims hosting the El Roble property. 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 uncertainty around the renewal of the title on the
Company’s claims hosting the El Roble property; 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. Readers should not
place undue reliance on forward-looking statements, which speak
only as of the date made. The forward-looking statements contained
in this release represent our expectations as of the date of this
release. We disclaim any intention or obligation or undertaking to
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
under applicable securities laws.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, 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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