Atalaya Mining reports strong first quarter

Atalaya Mining reported first quarter revenues of €97.4m (£83.69m) on Thursday, up from €61.2m year-on-year, with the higher revenues put down to higher realised copper prices and slightly larger volumes of concentrate sold.

The AIM-traded firm said operating costs for the three months ended 31 March at €48m, compared to €49.2m year-on-year, which the board said was due to strong cost control and the one-off nature of several cost items in the first quarter of 2020.

It said those one-off costs included increased electricity consumption during SAG mill commissioning, and increased consumables and maintenance costs required to support the expanded nameplate processing capacity.

First quarter EBITDA came in at €47.4m, up from €9.3m, with that increase driven by the higher revenues and lower operating costs.

Profit after tax for the period totalled €33.7m, or 24.5 euro cents basic earnings per share, surging from €2.9m or 2.3 cents a year earlier.

Realised average copper prices for the period came in at $3.84 per pound, which was in line with average spot copper prices during the period of $3.85 per pound.

Cash costs totalled $2.04 per pound of payable copper for the quarter, which was similar to the $2.03 per pound it reported for the fourth quarter, but slightly higher than the $1.99 per pound from the first quarter of 2020, which it put down to a weaker dollar-euro rate, which offset the higher operating costs a year earlier.

All-in sustaining costs totalled $2.46 per pound of payable copper, compared with $2.36 per pound during the fourth quarter, and $2.21 per pound in the prior year period.

The increase in all-in sustaining costs was said to have been driven by higher deferred mining costs capitalised during the period, and excluded investment in the tailings dam, which amounted to €2.7m, up from €2m year-on-year.

Inventories of concentrate at 31 March valued at cost amounted to €6.6m, down from €8.6m at the end of December.

As at 31 March, Atalaya's working capital was €61m, representing a €78.9m increase from the €17.9m deficit it reported at the end of December.

The increase was mainly due to the impact of the €53m paid to Astor Management in the first quarter, which was funded by previously-established long-term unsecured facilities.

Its cash flow from operating activities before changes in working capital totalled €53.1m, up from €10m year-on-year, or €36.8m after working capital changes, rising from €15.5m.

Cash flows used in investing activities totalled €63.9m, including the €53m paid to Astor and up from €5.6m year-on-year, while cash flows generated from financing activities were €52.9m, including unsecured facilities used to fund the payment to Astor, rising from €24.1m a year earlier.

“Our strong operating performance and the increased copper prices have led to significant period on period financial growth, positioning Atalaya well for the rest of the year,” said chief executive officer Alberto Lavandeira.

“The excellent operational performance means that the annualised production rate for the quarter is towards the upper end of the 2021 production guidance range.”

Lavandeira said the company was also constantly looking to deliver additional value for shareholders through initiatives designed to decrease its carbon footprint, reduce costs and achieve superior returns, while also protecting the safety of employees.

“We are pleased with the strong financial results achieved in the first quarter, and look forward to the rest of the year with confidence.”

At 1100 BST, shares in Atalaya Mining were down 2.78% at 350p.