Atalaya Mining upbeat on third quarter performance

The AIM-traded company said waste mined rose sharply to 9.7 million tonnes, significantly higher than the 5.8 million tonnes in the third quarter of 2022 and 8.6 million tonnes in the prior quarter of the current year.

It attributed the increase to the intentional augmentation of waste stripping at Cerro Colorado, aligning with preparation for imminent mining activities at San Dionisio slated for late 2023.

On the processing front, Atalaya processed 3.9 million tonnes of ore, parallel with the third quarter of 2022 and marginally under the 4.1 million tonnes recorded in the prior quarter.

The copper grade slightly dipped to 0.38% compared to 0.41% year-on-year and 0.40% on the quarter.

Despite the lower grades, copper recoveries were substantial, recording 87.01% - a favourable increase from 84.62% a year earlier and minutely under the 87.18% of the second quarter.

The enhanced recoveries were credited to positive ore characteristics throughout the period.

Copper production in the period was reported at 12,541 tonnes, showing a decrease compared to the 13,453 tonnes and 14,212 tonnes produced in the third quarter of 2022 and the second quarter of 2023, respectively.

However, higher-than-expected recoveries partly mitigated the impact of the diminished grades.

By the end of September, on-site copper concentrate inventories totalled 7,358 tonnes after the entirety of the concentrate stock at the start of the period was dispatched to the port at Huelva.

The firm reported a slightly elevated average realised copper price of $3.77 per pound, compared with $3.52 a year earlier and $3.81 in the prior quarter.

However, the period saw a hit in provisional revenue adjustments, with settlement and fair value adjustments totalling a negative €0.9m.

The company said it maintained a robust balance sheet, with consolidated cash and equivalents at €119m as of 30 September.

After accounting for current and non-current borrowings of €52.3m, net cash came in at €66.7m - a healthy rise from €53.1m as of 31 December 2022.

“We are pleased to be on track to achieve production within our original guidance range, thanks to steady operational performance during the quarter,” said chief executive officer Alberto Lavandeira.

“Our two key capital projects - the E-LIX phase one plant and the 50 MW solar plant - continue to progress, and there is significant activity on site.

“We look forward to delivering these projects in the coming months, which are expected to unlock value, reduce costs and lower our carbon footprint.”

Lavandeira said that looking at the outlook for copper, the firm was confident in its strong fundamentals.

“Even with economic uncertainties, the demand for copper is growing thanks to massive new investments in infrastructure and the energy transition.

“On the supply side, we have seen very few new large projects approved in recent years, therefore the expectation remains that a substantial deficit is unavoidable.”

At 1241 BST, shares in Atalaya Mining were up 3.62% at 315p.

Reporting by Josh White for Sharecast.com.