Atico Reports Consolidated Financial Results for the Second Quarter of 2019 and Provides
(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
Page 1 of 6
Atico Reports Consolidated Financial Results for the Second Quarter of 2019 and Provides
Corporate Update
(All amounts expressed in US dollars, unless otherwise stated)
Vancouver, August 13, 2019 -- Atico Mining Corporation (the “Company” or “Atico”) (TSX.V:
ATY | OTC: ATCMF) today announced its financial results for the three months ended June 30,
2019, posting income from mining operations of $0.3 million and a net loss of $0.4 million.
Fernando E. Ganoza, CEO and Director, commented, “The union negotiations which led to a strike
at the El Roble mine limited our ability to deliver on operational and financial objectives for the
quarter. Despite the limited amount of operating days in the first six months, the Company’s
balance sheet remained resilient to this event and demonstrated further growth in working capital,”
said Fernando E. Ganoza, CEO. “For the second half of the year, t he Company will continue
working towards achieving the adju sted operational objectives while remaining focused on the
exploration program on the larger land package.”
Second Quarter Financial Highlights
• Net loss for the three months ended June 30, 2019 amounted to $0.5 million, compared with
income of $2.8 million for the same period last year (“Q2-2018”). Net loss for the period was
significantly affected by the seventy -five-day strike which lead to a de crease in quantity of
concentrate shipped and provisionally invoiced along with a decrease in realized copper price
as compared to Q2-2018.
• Sales for the period decreased 66% to $6.9 million when compared with $20.4 million in Q2 -
2018. Copper (“Cu”) and g old (“Au”) accounted for 82.7% and 17.3% of the total amount
provisionally invoiced during Q2 -2019. The average realized price per metal on provisional
invoicing was $2.69 (Q2 -2018 - $3.16) per pound of copper and $1,410.62 (Q2 -2018 -
$1,297.33) per ounce of gold.
• Loss from operations was $0.8 million (Q2 -2018 - income of $4.9 million) while cash flow
from operations, before changes in working capital, was negative $1.2 million (Q2 -2018 -
positive $5.4 million). Cash used for capital expenditures amounted to 1.8 million (Q2-2018 -
$3.8 million).
• Working capital was $9.2 million (December 31, 2018 - $7.2 million), while the Company had
no outstanding long-term loans payable balance.
• Cash costs(1) were $130.76 per tonne of processed ore and $1.59 per pound of payable copper
produced, which were decreases of 4% and 5% over Q2 -2018, respectively. The decrease in
(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
Page 2 of 6
the cash cost per pound of payable copper net of by products is primarily explained by a lower
cost per processed tonne.
• At the end of the quarter, 2,655 (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 $2.29
(Q2-2018 - $2.24).
Second Quarter Summary of Financial Results
Q2
2019
Q2
2018
%
Change
Revenue
$ 6,936,341 $ 20,401,188 -66%
Cost of sales
(6,684,378) (14,489,798) -54%
Income from mining operations
251,963 5,911,390 -96%
As a % of revenue
4% 29% -87%
General and administrative expenses
1,017,817 935,396 9%
Income (loss) from operations
(847,211) 4,880,149 -117%
As a % of revenue
-12% 24% -151%
Income (loss) before income taxes
(914,848) 4,751,767 -119%
Net income (loss)
(448,411) 2,810,318 -116%
As a % of revenue
-6% 14% -147%
Operating cash flow before changes in non-cash operating
working capital items(1)
$ (1,235,791) $ 5,441,699 -123%
Second Quarter Operations Review
During the quarter, the Company produced 3.16 million pounds (“lbs”) of copper, 2,116 ounces
(“oz”) of gold, and 6,914 oz of silver. When compared to Q2-2018, production decreased 40.0%
for copper and 18.5% for gold. Production for the quarter was significantly impacted by the strike
at the mine which began early February and ended in April 2019.
(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
Page 3 of 6
Cash costs (1) for the quarter were $130.76 per tonne of processed ore, and $1 .59 per pound of
payable copper produced, decreases of 4.4% and 4.6% over the same period last year, respectively.
All-in sustaining cash cost per payable pound of copper produced(1)(2) was $2.29.
Second Quarter Operational Details
Q2
2019
Q2
2018
%
Change
Production (Contained in Concentrate)(3)
Copper (000s lbs) 3,157 5,220 -40%
Gold (oz) 2,116 2,596 -19%
Silver (oz) 6,914 10,014 -31%
Mine
Tonnes of material mined 47,321 67,255 -30%
Mill
Tonnes processed 47,534 67,308 -29%
Tonnes processed per day 839 792 6%
Copper grade (%) 3.28 3.76 -13%
Gold grade (g/t) 2.34 2.02 16%
Silver grade (g/t) 11.10 8.54 30%
Recoveries
Copper (%) 91.7 93.7 -2%
Gold (%) 58.4 59.5 -2%
Silver (%) 40.1 56.1 -29%
Concentrates
Copper Concentrates (DMT) 6,561 22,191 -39%
Copper (%) 21.8 22.1 -1%
Gold (g/t) 10.1 7.5 35%
Silver (g/t) 32.8 29.1 13%
Payable copper produced (000s lbs) 2,999 4,960 -40%
Cash cost per pound of payable copper ($/lbs) (1)(2) 1.59 1.67 -5%
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
Page 4 of 6
Second Quarter Exploration Update
During the quarter, 4,314 meters of drilling were completed at the El Roble project, of which 1,041
meters were drilled underground looking for new massive sulphide deposits. On surface, the
Company completed 3,273 meters at Gorgona target testing the new IP-DAS anomalies.
The Company’s second quarter exploration plans and program were much shorter than planned
due to the union negotiations and strike at the El Roble mine which ended late in April.
Core drilling program will continue in the third quarter testing IP-DAS and gravity anomalies at
depth and to the southeast of the mine mineralization (Zeus plunge target). In parallel, the
Company plans to further test Archie, Gorgona and the Eastern trend (regional targets) along with
two new regional target areas.
The Company plans to drill test at least three to four targets in 2019 along with the follow-up drill
program at Archie and Gorgona.
Update on the Atico and Toachi Plan of Arrangement
The Company entered into a definitive agreement dated July 8, 2019 (the “Arrangement
Agreement”) to acquire hundred percent of Toachi Mining Inc. (“Toachi”) shares pursuant to a
plan of arrangement, whereby each of the issued and outstanding shares of Toachi will be
exchanged on a basis of 0.24897 common shares of the Company. In early August, Toachi received
the interim order from the Ontario Superior Court of Justice in connection with announced
transaction. In addition, Toachi mailed out the management information circular to all of its
shareholders. Assuming all conditions under the Arrangement Agreement are satisfied, including
the favourable outcome of the Toachi special meeting of shareholders scheduled on September 3,
2019, Toachi will seek the final order from the Ontario Court of Justice by September 9, 2019.
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.
(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
Page 5 of 6
On the larger land package, the Company has iden tified 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
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 t his release.
No securities regulatory authority has either approved or disapproved 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.
(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
Page 6 of 6
Cautionary Note Regarding Forward Looking Statements
This ann ouncement 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 material ly from those anticipated in such statements.
Important factors that could cause 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 disclosed 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 six months ended June 30, 2019 as filed
on SEDAR and as available on the Company's website for further details.