Atalaya production increases at Riotinto as copper prices rise

Atalaya Mining updated the market on its operations update in the second quarter on Tuesday, reporting copper production at Proyecto Riotinto of 14,353 tonnes, up 2.7% over the first quarter and 5.3% higher than the same period in 2020.

The AIM-traded firm said the plant processed 4.03 million tonnes of ore during the second quarter, equivalent to a throughput rate of about 16 million tonnes per annum, with low-grade stockpiles adding extra tonnage.

It said the increase in copper production, when compared with its guidance, was mainly attributable to higher throughput and, to a lesser extent, to better recoveries than planned.

Despite ongoing Covid-19 restrictions, mining operations had continued normally, with higher production levels compared with the prior quarters.

On-site copper concentrate inventories at the end of the second quarter were about 15,103 tonnes, the board reported, with all concentrate in stock at the beginning of the period delivered to the port at Huelva.

Copper prices increased during the period compared with the prior period, with average spot prices increasing to $4.40 per pound, from $3.85 per pound in the first quarter.

The average realised price per pound of copper payable was $4.27 per pound, compared with $3.62 per pound in the previous quarter, with the realised price during the second quarter excluding QPs being about $4.40 per pound.

Cash operating costs for the period were expected to be below full-year 2021 cost guidance, primarily owing to the euro-dollar exchange rate of $1.2058, compared with the $1.22 budgeted in the 2021 guidance, together with higher copper production and better recoveries.

During the quarter, some cost reduction initiatives were implemented at Proyecto Riotinto, including the commissioning of a tailings thickener and changes to the lime circuit, both of which resulted in lower lime and energy consumption, as well as a reduction in carbon dioxide emissions.

Permitting of a 50 MW solar plant for self-consumption advanced “significantly”, the board reported, with final construction permits expected “imminently”.

A new initiative was also focussed on increased recoveries, using different grinding media in the regrind mill.

Following an independent reserve estimate, which confirmed the status of a long life at the Cerro Colorado open pit at the project, Atalaya said studies had advanced around the addition of further resources at Riotinto.

A sizable resource was identified at the San Dionisio deposit that was potentially mineable by open pit.

Further polymetallic mineralisation could be exploited using underground mining methods at the San Antonio and San Dionisio deposits.

Work had started on the preparation of an NI 43-101-compliant technical report, which the board said would be followed by preliminary economic assessment or pre-feasibility studies.

Looking at the rest of the year, the company said it was maintaining its 2021 guidance, but now expected to be towards the higher end of production guidance and the lower end of cost guidance.

“Our mining operations continue to perform strongly, with higher production levels compared with previous quarters,” said chief executive officer Alberto Lavandeira.

“Adding to this continued robust performance, our team continues to focus on delivering new efficiencies and growth projects, which includes cost reduction initiatives at Proyecto Riotinto and additional exploration across prospective landholdings to create shareholder value.

“The company maintains its 2021 guidance, but now expects to be towards the high end of production guidance and the lower end of costs guidance.”

At 0913 BST, shares in Atalaya Mining were up 3.5% at 296p.