Atalaya Mining buoyed by copper price gains in first half
Updated : 16:29
Atalaya Mining moved into the black in the first half of 2017 as the company ramped-up output and on the back of higher copper prices.
Revenues were 250% higher to €79.1m for the six months to 30 June as the volume of ore mined increased by roughly four-fifths to 4.6m tonnes.
Significantly, all-in sustaining costs decreased from $2.74 a pound to $2.22, the company said in a statement. In parallel, the realised price of copper rose from $2.06 a pound to $2.55. Ore grades also improved, from 0.44% Cu in the first half of 2016 to 0.49% Cu.
As a result, cash flows from operating activities grew from €8.88m one year ago to €10m for the latest six-month stretch.
During the period, management also began a study in order to demonstrate the feasibility of raising the company's mining and processing capacity at Proyecto Riotinto - its main asset - beyond the current level of 9.5Mtpa to as much as 15.0Mtpa.
That would translate into copper production of 50,000 tonnes per annum.
If the Board approved the expansion, it was estimated that the indicative construction period would take from 18 to 24 months.
Furthermore, the company said project Touro was progressing to schedule.
In terms of the outlook, Atalaya reiterated its forecast for copper production from Proyecto Rio Tinto, its main asset, of between 34,000 and 40,000 tonnes in 2017, together with cash operating costs of $1.9 and $2.1 a pound and all-in sustaining costs of between $2.0 and $2.1 a pound.
Atalaya produced 9,058 tonnes of copper during the second quarter, versus 4,442 tonnes in the year-ago period.
Commenting on the results, analysts at ShoreCap said: "Assuming copper prices remain at current levels (or better), we expect better financial results in H2 2017."
However, they pointed out the "significant" negative working capital movements seen in the second quarter of 2017 which resulted in a net operating cash outflow of €4.3m, albeit admiting that for the second half as a whole operating cash flows were positive at €10m.