Atalaya Mining confident in guidance after third quarter

Atalaya Mining mined 3.6 million tonnes of ore in its third quarter, it announced in an update on Monday, in line with the second quarter’s 3.6 million tonnes, and up from 3.4 million tonnes a year ago.

The AIM-traded firm said it mined 5.8 million tonnes of waste in the period, down from 6.7 million tonnes in the second quarter, and also below third quarter of 2021 levels.

Waste stripping year-to-date had been higher than budget, the board said, as waste mining was prioritised during the temporary plant maintenance stoppage in the first quarter of 2022.

Looking at processing, the plant processed 3.9 million tonnes of ore during the third quarter, which was near second quarter throughput and above processing rates in the first quarter, which were impacted by the transport sector strike and maintenance stoppage.

The results demonstrated the plant's ability to operate above its 15 million tonnes-per-annum nameplate capacity, the directors noted.

It reported a copper grade of 0.41% in the period, up from 0.39% in the second quarter and also above last year’s third quarter, at 0.4%.

Lower grades earlier in 2022 were the result of blending with lower-grade stockpiles, due to pit sequencing.

Copper recoveries in the third quarter came in at 84.62%, below quarter-on-quarter and year-on-year levels respectively, due to the characteristics of the ore processed during the quarter, although performance was consistent with expectations.

On the production front, Atalaya said copper production in the period was consistent at 13,453 tonnes, above second quarter production of 13,386 tonnes.

The board put the performance down to the result of higher copper grades and consistent throughput rates.

On-site copper concentrate inventories at the end of the period totalled 4,349 tonnes, with all concentrate in stock at the beginning of the period delivered to the port at Huelva.

The average realised price per pound of copper payable, including the QPs closed in the period, was $3.83, below the second quarter average of $4.32 and the year-before period of $4.31 per pound.

Atalaya said the average spot copper price during the third quarter was $3.51 per pound, and the realised price excluding QPs was approximately $3.52 per pound.

For the third quarter, provisional pricing adjustments were a negative €1.8m, based on the outstanding QPs and copper forward curve prices as at 30 September.

Atalaya reiterated its 2022 guidance of between 52,000 and 54,000 tonnes of copper production, adding that it would continue to monitor the volatile electricity markets in Spain as well as overall input cost inflation, which had moderated from earlier peaks, but remained elevated.

“We are pleased to report consistent copper production for the quarter and reiterate our guidance for the full year despite the many uncertainties in Europe and abroad,” said chief executive officer Alberto Lavandeira.

“Inflation remains high mainly due to high electricity prices that will continue to impact our cash costs during this year.

“We look forward to 2023 and the significant benefits we will realise from the start of our long term power purchase agreement and 50 MW solar plant.”

Lavandeira said regardless of current challenges, the firm remained “excited” about growth opportunities within its asset portfolio, and confident on the outlook for copper.

“It is evident that more copper supply will be required to fuel the global energy transition, and that high quality assets in safe jurisdictions will become increasingly scarce.

“These views are clearly shared by the diversified majors, who have been active in pursuing copper growth in recent months.”

At 1326 BST, shares in Atalaya Mining were up 5.8% at 237p.

Reporting by Josh White at Sharecast.com.