Atalaya Mining Plc (ATYM:AIM) (AYM:TSX)
As a result of an increase in volume of copper concentrate sold, lower cash costs and higher realised copper prices, EBITDA improved significantly in Q3 2016 to €1.9 million compared to a loss of €3.6 million for H1 2016.
Atalaya, had a 97% increase in the production of tonnes of copper concentrate (Q3 2016: 8,752 tonnes vs Q2 2016: 4,442 tonnes). Total production for the nine months period is 17,241 metric tons. The production forecast for 2016 is 23,500 – 27,000 tonnes of contained copper.
Over the three month period the company generated revenues of €27.2 million and €49.9 million for the nine months period. Cash costs declined to $1.97/lb in Q3 2016 compared to $2.36/lb in Q2 2016. Further improvements in cash costs are expected as production levels get closer to the nominal plant capacity of 9.5Mtpa. The loss for the three month period was €1.5 million (1.3 cents per share) and for the nine month period €8 million (6.8 cents per share).
Recoveries improved from 80.46% in Q2 2016 to 83.60% during Q3 2016 and a record recovery rate of 87.09% was achieved during October 2016.
Working capital improved to €4.2 million and inventories of concentrate amounted to €9.3 million. The company completed a US$14 million copper concentrate prepayment funding agreement with Transamine Trading S.A. to improve working capital position.
Alberto Lavandeira, CEO commented:“We are gradually beginning to see the fruits of our efforts with positive cash flows from our operations. The combination of falling operating costs and improved levels of recovery and production reflect the increasing on-site efficiencies. The effect of the recent increase in the copper price on our share price demonstrates our leverage to copper. With the plant working now almost at nameplate capacity we are well placed to benefit from any future improvements in the copper price.”
The water treatment plant was commissioned during Q3 2016 and the dewatering of Cerro Colarado open pit is progressing according to plan. During September 2106 an updated reserves and resources statement was filed which indicated a 12% increase in contained reserves and the life of the open pit mine being extended to 16.5 years.