Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY |
OTC: ATCMF) today announced its financial results for the three
months ended June 30, 2024, posting income from mining operations
of $2.6 million and a net loss of $0.4 million. Production for the
period at Atico’s El Roble mine totaled 3.7 million pounds (“lbs”)
of copper and 2,850 ounces (“oz”) of gold in concentrate at a cash
cost(1) of $1.48 per payable pound of copper(2).
Fernando E. Ganoza, CEO and Director, commented,
“this period we had improvements in almost all operational metrics
when compared to the previous quarter and same period last year.
However, these improvements are not reflected in this period’s
revenue and income as a material portion of the concentrate shipped
will be recognized as revenue in the third quarter due to shipping
delays caused by poor weather conditions. We therefore anticipate
strong revenues in the third quarter which will make up for this
quarter’s results.” Mr. Ganoza continued, “for the second half of
the year we will be focused on achieving production guidelines and
cost efficiencies at El Roble, continue advancing the La Plata
project engineering and permitting, and executing the near-mine
drill program at El Roble aimed at replacing resources and further
extending the life of mine.”
Second Quarter Financial
Highlights
- Net loss for
the quarter amounted to $0.4 million, compared with $0.1 million
net income for the comparative quarter. The loss was primarily due
to lower sales and a net realized loss on the settlements of its
derivative instruments.
- Sales for the
quarter decreased 11% to $10.9 million when compared with $12.2
million in Q2-2023. The decrease was primarily due to weather
conditions which caused delays at the Port of Loading. Copper
(“Cu”) and gold (“Au”) accounted for 76% and 24% of the 5,603
(Q2-2023 – 6,597) dry metric tonnes (“DMT”) sold during
Q2-2024.
- The average
realized price per metal was $4.34 (Q2-2023 - $3.92) per pound of
copper and $2,303 (Q2-2023 - $1,938) per ounce of gold.
- Ending working capital was negative
$4.3 million (December 31, 2023 – $2.1 million), while the Company
had $6.1 million (December 31, 2023 – $6.0 million) in long-term
loans payable.
- Cash costs(1) were $131.07 per
tonne of processed ore and $1.48 per pound of payable copper
produced, which were an increase of 5% and a decrease of 33% over
Q2-2023, respectively. The decrease in cash cost per pound of
payable copper produced compared to the comparative period is
primarily due to higher amounts of payable copper from increased
copper grade, as well as higher gold (by-product) credits from
increased gold grade and gold price.
- Cash margin was $2.86 per pound of
payable copper produced(1), which was an increase of 68% over
Q2-2023 due to the decrease in cash cost per pound (above) as well
as the increase in realized copper price.
- All-in sustaining cash cost per
payable pound of copper produced(1), was $2.32 (Q2-2023 - $3.28), a
reduction that is primarily due to the decrease in cash cost per
pound (above).
- On August 8, 2024, (subsequent to
the reporting period) the Company announced in a press release that
it has entered into an amendment and restatement agreement with
Trafigura PTE. LTD. (the “Lender”) to amend the US$ 10 million
credit agreement entered into with the Lender on February 2022, by
extending the maturity date of the credit facility from August 8,
2024, to July 31, 2026.
Second Quarter Summary of Financial
Results
|
|
|
Q22024 |
|
|
Q22023 |
|
%Change |
|
Revenue |
|
$ |
10,860,467 |
|
$ |
12,228,088 |
|
(11%) |
|
Cost of sales |
|
|
(8,308,719) |
|
|
(11,273,890) |
|
(26%) |
|
Income from mining operations |
|
|
2,551,748 |
|
|
954,198 |
|
167% |
|
As a % of revenue |
|
|
23% |
|
|
8% |
|
|
|
General and administrative expenses and share-based payments |
|
|
(1,585,615) |
|
|
(1,557,142) |
|
2% |
|
Income (loss) from operations |
|
|
891,086 |
|
|
(602,944) |
|
(248%) |
|
As a % of revenue |
|
|
8% |
|
|
(5%) |
|
|
|
Loss before income taxes |
|
|
(730,559) |
|
|
(935,677) |
|
(22%) |
|
Net (loss) income |
|
|
(424,612) |
|
|
55,040 |
|
(871%) |
|
As a % of revenue |
|
|
(4%) |
|
|
1% |
|
|
|
Operating cash flow before changes in non-cash operating working
capital items(1) |
|
$ |
2,472,955 |
|
$ |
2,999,267 |
|
(18%) |
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Consolidated Operational
Details
In Q2-2024, the Company produced 3.7 million lbs
of copper, 2,850 oz of gold, and 9,972 oz of silver. When compared
to the same period in 2023, production increased by 32% for copper
and 23% for gold, which was due to average copper head-grades
increasing by 26% and gold head-grades increasing by 8%. Tonnes of
processed ore also increased by 4% compared to Q2-2023.
|
|
Q22024 |
|
Q22023 |
|
%Change |
|
Production (Contained metals)(3) |
|
|
|
|
|
|
Copper (000s lbs) |
|
3,710 |
|
2,803 |
|
32% |
|
Gold (oz) |
|
2,850 |
|
2,313 |
|
23% |
|
Silver (oz) |
|
9,972 |
|
7,826 |
|
27% |
|
Mine |
|
|
|
|
|
|
Tonnes of material mined |
|
70,826 |
|
72,340 |
|
(2%) |
|
Mill |
|
|
|
|
|
|
Tonnes processed |
|
71,079 |
|
68,471 |
|
4% |
|
Tonnes processed per day |
|
852 |
|
799 |
|
7% |
|
Copper grade (%) |
|
2.57 |
|
2.04 |
|
26% |
|
Gold grade (g/t) |
|
1.95 |
|
1.80 |
|
8% |
|
Silver grade (g/t) |
|
9.30 |
|
9.98 |
|
(7%) |
|
Recoveries |
|
|
|
|
|
|
Copper (%) |
|
92.0 |
|
90.6 |
|
2% |
|
Gold (%) |
|
64.2 |
|
58.4 |
|
10% |
|
Silver (%) |
|
47.3 |
|
36.6 |
|
29% |
|
Concentrates |
|
|
|
|
|
|
Copper Concentrates (DMT) |
|
9,197 |
|
6,789 |
|
35% |
|
Copper (%) |
|
18.3 |
|
18.7 |
|
(2%) |
|
Gold (g/t) |
|
9.6 |
|
10.5 |
|
(8%) |
|
Silver (g/t) |
|
33.7 |
|
34.9 |
|
(3%) |
|
|
|
|
|
|
|
|
Payable copper produced (000s lbs) |
|
3,487 |
|
2,639 |
|
32% |
|
Cash cost per pound of payable copper ($/lbs)(1)(2) |
|
1.48 |
|
2.22 |
|
(33%) |
|
|
|
|
|
|
|
|
|
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 Second Quarter
Updates
On April 30, 2024, the Company announced an
updated mineral resource and reserve estimate for the El Roble Mine
located in Colombia, prepared under National Instrument 43-101
standards, with an effective date of March 12, 2024. Measured
and Indicated Mineral Resources (inclusive of Mineral Reserves) are
estimated at 881 thousand tonnes averaging 3.40% Cu, and 2.98 g/t
Au. Proven and Probable Mineral Reserves are estimated at 828
thousand tonnes averaging 2.49% Cu, and 2.20 g/t Au. A conversion
rate of 88% of Measured and Indicated resources to Proven and
Probable reserve categories was applied over the current resource
estimate. Life of Mine is extended until the first quarter of 2027.
More information can be found on the Company’s press release dated
April 30, 2024, available on SEDAR+ and on the Company’s
website.
The ongoing Arbitration at the Center for
Arbitration and Conciliation of the Bogota Chamber of Commerce to
resolve the El Roble royalty dispute with the National Mining
Agency is progressing with the first procedural hearing concluded
on July 2, 2024, confirming the tribunal's competence and
scheduling evidentiary hearings and witness testimonies. The first
evidentiary hearing occurred on July 12, 2024, with witness
testimonies well underway and expected to conclude by September
2024. The tribunal’s final decision is due by January 15, 2025,
with an allowable six-month extension as per the arbitration rules.
If the Tribunal’s final decision favors the Company, the Payment
Plan will cease, and any amounts paid under the Payment Plan with
the National Mining Agency will need to be reimbursed to the
Company or offset against future royalty obligations.
The Payment Plan is payable in biannual
instalments for a total principal amount of COP$101,217,832,270
(approximately $24.4 million) plus interest at a 6% annual rate. As
at June 30, 2024, the Company has paid to the National Mining
Agency a total principal amount of COP$30,598,648,182
(approximately $7.4 million) plus interest. As of June 30, 2024,
6,520 of the 10,627 dry metric tonnes of metals concentrate in
inventories were pledged as security for the principal amount of
the Payment Plan that remains outstanding.
La Plata Second Quarter
Updates
In May 2022 the Company received the technical
approval of its Environmental and Social Impact Assessment (“ESIA”)
study for the La Plata project and the Ministry of Environment,
Waters and Ecological Transition (MAATE) initiated the
socialization of the ESIA, through an environmental public
consultation process, as an important step for the issuance of the
environmental license for the La Plata project. However, on July
31, 2023, the Constitutional Court in Ecuador, admitted for
processing a claim of the Confederation of Indigenous Nationalities
of Ecuador (CONAIE) and other complainants, provisionally
suspending Executive Decree No 754 signed on May 31, 2023, that
regulates environmental consultations for all public and private
industries and sectors in Ecuador – not limited to extractive
industries.
The La Plata environmental consultation process
was, as result put on pause until a ruling was made from the
Constitutional Court in Ecuador. On November 17, 2023, the
Ecuadorian Constitutional Court ruled the Executive Decree 754 was
unconstitutional, but decided to maintain the decree in force until
the Ecuadorian National Assembly enacts this procedure into Organic
Law. Until the Assembly passes the necessary organic law, the
temporary suspension of the Decree was revoked by the
Constitutional Court and the Decree remains in effect. This allows
many projects across all industries and sectors, including La
Plata, to resume their respective consultation process, which MAATE
reinitiated for La Plata during Q1-2024.
On March 22, 2024, the mayor of the Canton of
Sigchos, CONAIE and other complainants (the “Claimants”) filed a
constitutional protective action against MAATE and other
governmental entities, challenging the environmental consultation
process that was being conducted by MAATE which is an important
step for the issuance of the La Plata environmental license. The
protective action was accepted by the Court on March 25, 2024, and
the Court proceeding was carried out in the Judicial Unit of the
Canton of Sigchos, in the province of Cotopaxi, Ecuador, between
May 20, 2024, and July 9, 2024. On August 2, 2024, the Court issued
a binding oral ruling, rejecting the Protective Action filed by the
Claimants. The Court concluded that the consultation process
conducted by MAATE complied with applicable legal requirements, did
not constitute rights violations, and removed the cautionary
measures previously applied. The court issued the ruling in writing
on August 5, 2024. After the Court’s ruling, the Claimants advised
the Court of their intention to appeal the Court’s decision. The
appeal will be heard by the Provincial Court of Justice of Cotopaxi
in due course. No date for the appeal has been set.
On July 2, 2024 (subsequent to the reporting
period), the Company reported results of the La Plata Feasibility
Study prepared in accordance with National Instrument 43-101 and
the Technical Report was filed on SEDAR+ on August 14, 2024.
- Initial Probable Mineral Reserves
for the La Plata project 2.51 Mt with an average grade of 1.59% Cu,
2.28 g/t Au, 30.41 g/t Ag, and 2.18% Zn.
- Updated Indicated Resources of
2.345 Mt with an average grade of 2.13% Cu, 2.98 g/t Au, 40 g/t Ag,
3.05% Zn and Inferred Resources of 380 Kt at average grade of 0.96%
Cu, 1.75 g/t Au, 38 g/t Ag, 2.29% Zn.
- Average annual production of 9.71
Mlbs Cu, 15,929 oz Au, 226,299 oz Ag, and 13.25 Mlbs Zn in
concentrates over 8.1 years Life of Mine (“LOM”)
- Initial Capex of US$91 Million,
including a 9.8% contingency
- Average AIC(1) of US$2.70 per
payable lb of Cu equivalent produced over LOM
- After Tax NPV of US$93M at a 5%
discount rate and an IRR of 25.1%
The Company continues to work on obtaining the
necessary permits and the environmental license to begin
construction of the La Plata project.
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 | 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 StatementsThis 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 as to the timing and process for renewal of title to
the El Roble claims; uncertainties as to the outcome of the
Arbitration process with the National Mining Agency in Colombia for
the royalties’ dispute, as to the timing of the Tribunal’s
decision, and if a favorable Tribunal Decision, as to the timing
for the reimbursement of the payments made under the Payment Plan
to the National Mining Agency; uncertainties relating to
interpretation of drill results and the geology, continuity and
grade of mineral deposits; uncertainty of estimates of capital and
operating costs of the Company’s projects; 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 Company's Management's Discussion and Analysis for
the year ended December 31, 2023 as filed on SEDAR+ and as
available on the Company's website for further details, and in the
prospectus of the Company dated March 2, 2012 filed with the
Canadian securities regulatory authorities on the SEDAR+ website at
www.sedarplus.ca
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 year ended December 31, 2023, as filed on SEDAR+ and as
available on the Company's website for further details.
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