ATY.V · 2019-05-30 12:00:00

Atico Reports Consolidated Financial Results for the First Quarter of 2019

Financials

(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.

(2) Net of by-product credits

(3) Subject to adjustments on final settlement

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Atico Reports Consolidated Financial Results for the First Quarter of 2019

(All amounts expressed in US dollars, unless otherwise stated)

Vancouver, May 30, 2019 -- Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY

| OTC: ATCMF) today announced its financial results for the three months ended March 31, 2019,

posting income from mining operations of $5.7 million and a net income of $2.7 million.

Fernando E. Ganoza, CEO and Director, commented, “During the quarter we underwent a union

negotiation which resulted in a strike significantly impacting our results for the period. This event

negatively affected our production results while the impact on financial results was offset by strong

sales of inventory carried forward from the previous year,” said Fernando E. Ganoza, CEO. “The

Company has provided adjusted guidance for the remainder of the year and will focus on

minimizing loss of production by this event.”

First Quarter Financial Highlights

• Net income for the three months ended March 31, 2019 amounted to $2.7 million, compared

with $0.4 million for the same period last year (“Q1-2018”). Net income for the period was

affected by a significant increase in quantity of concentrate shipped and provisionally invoiced

as compared to Q1-2018.

• Sales for the period increased 187% to $21.1 million when compared with $7.3 million in Q1-

2018. The final 2018 shipment was delayed to the subsequent month for reasons beyond the

control of the Company, which has increased the quantity of concentrate shipped and

provisionally invoiced for Q1-2019. Copper (“Cu”) and gold (“Au”) accounted for 92.7% and

7.2% of the total amount provisionally inv oiced during Q1-2019. The average realized price

per metal on provisional invoicing was $2.81 (Q1 -2018 - $3.16) per pound of copper and

$1,305.53 (Q1-2018 - $1,332.69) per ounce of gold.

• Income from operations was $5.7 million (Q1 -2018 - loss of $0.7 mill ion) while cash flow

from operations, before changes in working capital, was $9.1 million (Q1-2018 - $1.9 million).

Cash used for capital expenditures amounted to $0.9 million (Q1-2018 - $2.2 million).

• Working capital was $12. 1 million (December 31, 2018 - $7.2 million), while the Company

had no outstanding long-term loans payable balance.

• Cash costs(1) were $116.49 per tonne of processed ore and $1.41 per pound of payable copper

produced(2), decreases of 9% and 2% over the same period last year, respectively.

(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.

(2) Net of by-product credits

(3) Subject to adjustments on final settlement

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• At the end of the quarter, 1,631 (December 31, 2018 - 11,036) wet metric tonnes (“WMT”) of

non-invoiced concentrate remained at the Company’s warehouses.

• All-in sustaining cash cost per payable pound of copper produced(1)(2) for the period was $2.13

(Q1-2018 - $1.85).

First Quarter Summary of Financial Results

2019

2018

Change

Revenue

$ 21,102,085 $ 7,349,124 187%

Cost of sales

(15,438,726) (6,665,270) 132%

Income from mining operations

5,663,359 683,854 728%

As a % of revenue

27% 9% 188%

Selling, general and administrative expenses

670,960 835,003 -20%

Income (loss) from operations

4,849,864 (208,910) 2,422%

As a % of revenue

23% -3% 909%

Income before income taxes

4,262,507 302,880 1,307%

Net income

2,688,784 366,091 634%

As a % of revenue

13% 5% 156%

Operating cash flow before changes in non-cash operating

working capital items(1)

$ 9,116,868 $ 1,878,314 385%

First Quarter Operations Review

During the quarter, the Company produced 2.4 million pounds (“lbs”) of copper, 1,552 ounces

(“oz”) of gold, and 5,027 oz of silver. When compared to Q1-2018, production decreased 6.0% for

copper and 3.9% for gold. Production for the quarter was significantly impacted by the strike at

the mine which began early February and ended in the subsequent quarter.

Cash costs (1) for the period were $ 116.49 per tonne of processed ore, and $1 .41 per pound of

payable copper produced, decreases of 8.5% and 2.5% over the same period last year, respectively.

All-in sustaining cash cost per payable pound of copper produced(1)(2) was $2.13.

(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.

(2) Net of by-product credits

(3) Subject to adjustments on final settlement

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First Quarter Operational Details

2019

2018

Change

Production (Contained in Concentrate)(3)

Copper (000s lbs) 2,362 5,476 -57%

Gold (oz) 1,552 2,825 -45%

Silver (oz) 5,027 10,606 -53%

Mine

Tonnes of material mined 34,796 67,022 -48%

Mill

Tonnes processed 35,581 69,499 -49%

Tonnes processed per day 885 812 9%

Copper grade (%) 3.29 3.80 -13%

Gold grade (g/t) 2.24 2.03 10%

Silver grade (g/t) 10.10 8.71 16%

Recoveries

Copper (%) 91.6 94.0 -3%

Gold (%) 60.6 62.8 -4%

Silver (%) 43.6 48.6 -10%

Concentrates

Copper Concentrates (DMT) 4,921 11,474 -57%

Copper (%) 21.8 21.7 1%

Gold (g/t) 9.8 7.7 27%

Silver (g/t) 31.8 28.8 10%

Payable copper produced (000s lbs) 2,244 5,202 -57%

Cash cost per pound of payable copper ($/lbs) (1)(2) 1.41 1.44 -2%

The financial statements and MD&A are available on SEDAR and have also been posted on the

company's website at http://www.aticomining.com/s/FinancialStatements.asp

(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.

(2) Net of by-product credits

(3) Subject to adjustments on final settlement

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El Roble Mine

The El Roble mine is a high grade, underground copper and gold mine with nominal processing

plant capacity of 8 50 tonnes per day, located in the Department of Choco in Colombia. Its

commercial product is a copper-gold concentrate.

Since obtaining control of the mine on November 22, 2013, Atico has upgraded the operation from

a historical nominal capacity of 400 tonnes per day.

El Roble has Proven and Probable reserves of 1.47 million tonnes grading 3.40% copper and 1.88

g/t gold, at a cut-off grade of 1.93% copper equivalent as of June 30, 2018. Mineralization is open

at depth and along strike and the Company plans to further test the limits of the deposit.

On the larger land package, the Company has identified a prospective stratigraphic contact

between volcanic rocks and black and grey pelagic sediments and cherts that has been traced by

Atico geologists for ten kilometers. This contact has been determined to be an important control

on volcanogenic massive sulfide (“VMS”) mineralization on which Atico has identified numerous

target areas prospective for VMS type mineralization occurrence, which is the focus of the current

surface drill program at El Roble.

Qualified Person

Mr. Thomas Kelly (SME Registered Member 1696580), advisor to the Company and a qualified

person under National Instrument 43-101 standards, is responsible for ensuring that the technical

information contained in this news release is an accurate summary of the original reports and data

provided to or developed by Atico.

About Atico Mining Corporation

Atico is a growth -oriented Company, focused on exploring, developing and mining copper and

gold projects in Latin America. The Company operates the El Roble mine and is pursuing

additional acquisition opportunities. For more information, please visit www.aticomining.com.

ON BEHALF OF THE BOARD

Fernando E. Ganoza

CEO

Atico Mining Corporation

Trading symbols: TSX.V: ATY | OTC: ATCMF

(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.

(2) Net of by-product credits

(3) Subject to adjustments on final settlement

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Investor Relations

Igor Dutina

Tel: +1.604.633.9022

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the

TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

No securities regulatory authority has either approved or disa pproved of the contents of this news release. The

securities being offered have not been, and will not be, registered under the United States Securities Act of 1933, as

amended (the ‘‘U.S. Securities Act’’), or any state securities laws, and may not be offered or sold in the United States,

or to, or for the account or benefit of, a "U.S. person" (as defined in Regulation S of the U.S. Securities Act) unless

pursuant to an exemption therefrom. This press release is for information purposes only and does not constitute an

offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.

Cautionary Note Regarding Forward Looking Statements

This announcement includes certain “forward -looking statements” within the meaning of Canadian securities

legislation. All statements, other than statements of historical fact, included herein, without limitation the use of net

proceeds, are forward-looking statements. Forward - looking statements involve various risks and uncertainties and

are based on certain factors and assumptions. There can be no assurance that such statements will prove to be

accurate, and actual results and future events could differ materially from those anticipated in such statements.

Important factors that could ca use actual results to differ materially from the Company’s expectations include

uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits;

uncertainty of estimates of capital and operating costs; the need to obtain additional financing to maintain its interest

in and/or explore and develop the Company’s mineral projects; uncertainty of meeting anticipated program

milestones for the Company’s mineral projects; and other risks and uncertainties disclos ed under the heading “Risk

Factors” in the prospectus of the Company dated March 2, 2012 filed with the Canadian securities regulatory

authorities on the SEDAR website at www.sedar.com

Non-GAAP Financial Measures

The items marked with a "(1)" are alternative performance measures and readers should refer to Non-GAAP Financial

Measures in the Company's Management's Discussion and Analysis for the three months ended March 31, 2019 as

filed on SEDAR and as available on the Company's website for further details.

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