Atico Reports Consolidated Financial Results for the Third Quarter of 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 1 of 7
Atico Reports Consolidated Financial Results for the Third Quarter of 2019
(All amounts expressed in US dollars, unless otherwise stated)
Vancouver, November 19, 201 9 -- Atico Mining Corporation (the “Company” or “Atico”)
(TSX.V: ATY | OTC: ATCMF) today announced its financial results for the three months ended
September 30, 2019 (“Q3-2019”), posting income from mining operations of $ 2.5 million and a
net loss of $0.3 million.
Fernando E. Ganoza, CEO and Director, commented, "This quarter we had record production and
achieved a very competitive all-in sustaining cash cost of $1.52. Unfortunately, these achievements
did not reflect in the financial results as the second concentrate shipment was delayed to the fourth
quarter, along with the revenue associated with those tonnes. For the fourth quarter, with this
additional shipped concentrate, we anticipate strong results which we expect will show robust
financial performance for the second half of this year." Mr. Ganoza continued, "Our emphasis at
El Roble will be to continue delivering on our adjusted production guidance while we aggressively
explore our regional and underground drill target areas. At our recently acquired La Plata project,
we continue advancing technical work and plan to start drilling before year end"
Third Quarter Financial Highlights
• Net loss for the three months ended September 30, 2019 amounted to $0. 3 million, compared
with income of $3.0 million for the same period last year (“Q3-2018”). Net loss for the period
was significantly affected by one of the two scheduled Q3 -2019 concentrate shipments being
delayed to the subsequent quarter, due to a lack of vessel availability.
• Sales for the period decreased 36% to $9.6 million when compared with $14.9 million in Q3 -
2018. The decrease is mostly explained by the second scheduled shipment being delayed into
Q4-2019. Copper (“Cu”) and gold (“Au”) accounted for 88% and 12% of the 6,911 (Q3-2018
- 10,017) dry metric tonnes (“DMT”) provisionally invoiced during Q3-2019.
• The average realized price per metal on provisional invoicing was $2.62 (Q3-2018 - $3.10) per
pound of copper and $1,507.81 (Q3-2018 - $1,199.48) per ounce of gold.
• Income from operations was $1.2 million (Q3 -2018 - $2.8 million) while cash flow from
operations, before changes in working capital, was $3.8 million (Q3-2018 - $4.6 million). Cash
used for capital expenditures amounted to 2.7 million (Q3-2018 - $3.5 million).
(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 7
• Working capital was $6.8 million (December 31, 2018 - $7.2 million), while the Company had
$2.2 million (December 31, 2018 - $Nil) long-term loans payable.
• Cash costs(1) were $107.38 per tonne of processed ore and $1.08 per pound of payable copper
produced(2), which were decreases of 13% and 27% over Q3-2018, respectively. The decrease
in the cash cost per pound of payable copper net of by products is primarily explained by a
lower cost per processed tonne, along with higher by-product credit from gold.
• Cash margin was $1.54 (Q3-2018 - $1.62) per pound of payable copper produced, which was
a decrease of 5% over Q3-2018 (refer to non-GAAP Financial Measures).
• All-in sustaining cash cost per payable pound of copper produced(1) was $1.52 (Q3 -2018 -
$1.95).
• The Company produced 11,757 (Q3-2018 - 10,877) DMT of concentrate with a metal content
of 5.7 million (Q3-2018 - 5.4 million) pounds (“lbs”) of copper and 3,320 (Q3 -2018 - 3,010)
ounces (“oz”) of gold.
• Processed tonnes increased 7% to 76,532 compared to 71,760 in Q3-2018.
• At the end of the quarter, 7,749 (December 31, 2018 - 11,036) wet metric tonnes of non -
invoiced concentrate remained at the Company’s warehouses.
Third Quarter Summary of Financial Results
Q3
2019
Q3
2018
%
Change
Revenue
$ 9,581,287 $ 14,900,072 -36%
Cost of sales
(7,114,404) (10,977,829) -35%
Income from mining operations
2,466,883 3,922,243 -37%
As a % of revenue
26% 26% -2%
General and administrative expenses
1,210,816 1,010,377 20%
Income from operations
1,181,530 2,807,190 -58%
As a % of revenue
12% 19% -35%
Income before income taxes
772,911 1,383,145 -44%
(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 7
Q3
2019
Q3
2018
%
Change
Net income (loss)
(303,470) 2,972,922 -110%
As a % of revenue
-3% 20% -116%
Operating cash flow before changes in non-cash operating
working capital items(1)
$ 3,842,917 $ 4,629,186 -17%
Third Quarter Operations Review
In Q3-2019, the Company produced 5.71 million lbs of copper, 3,320 oz of gold, and 12,216 oz of
silver. When compared to Q3-2018, production increased by 7.0% for copper and 10.0% for gold.
The increases for both copper and gold are mainly explained by the increases in tonnes of ore
mined and processed along with an increase in head grades and partially offset by a slight decrease
in recoveries.
Cash costs (1) for the quarter were $1 07.38 per tonne of processed ore, and $1. 08 per pound of
payable copper produced (2), decreases of 13% and 27% over the same period last year,
respectively. All-in sustaining cash cost per payable pound of copper produced(1)(2) was $1.52.
Third Quarter Operational Details
Q3
2019
Q3
2018
%
Change
Production (Contained in Concentrate)(3)
Copper (000s lbs) 5,712 5,358 7%
Gold (oz) 3,320 3,010 10%
Silver (oz) 12,216 10,250 19%
Mine
Tonnes of material mined 74,462 70,652 5%
Mill
Tonnes processed 76,532 71,760 7%
Tonnes processed per day 863 837 3%
Copper grade (%) 3.66 3.63 1%
Gold grade (g/t) 2.34 2.17 8%
Silver grade (g/t) 10.80 11.28 -4%
(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.
(2) Net of by-product credits
(3) Subject to adjustments on final settlement
Page 4 of 7
Q3
2019
Q3
2018
%
Change
Recoveries
Copper (%) 92.5 93.4 -1%
Gold (%) 58.0 60.3 -4%
Silver (%) 45.7 40.3 13%
Concentrates
Copper Concentrates (DMT) 11,757 10,877 8%
Copper (%) 22.0 22.3 -1%
Gold (g/t) 8.8 8.6 2%
Silver (g/t) 32.4 29.3 11%
Payable copper produced (000s lbs) 5,426 5,105 6%
Cash cost per pound of payable copper ($/lbs)(1)(2) 1.08 1.49 -27%
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
Third Quarter Exploration Update
During Q3-2019, 4,779 meters of drilling were completed at the El Roble project, of which 1,745
meters were drilled underground looking for new massive sulphide deposit s. On surface, the
Company completed 3,034 meters at three of the identified perspective target areas, Gorgona,
Carmelo and Favorita.
The predominance of the drilling was completed at the Gorgona and Carmelo target areas. The
team completed seven holes to taling 2,584 meters of drilling. The results of this initial round of
drilling showed the continuation of the black-chert unit with good silicification at both target areas,
well disseminated and moderated occurrences of pyrite -pyrrhotite stringers along w ith small
intercepts of massive sulphides ranging from 3 to 15 centimeters in size. These same signatures
are found in very close proximity to our existing ore bodies at the mine and continue to validate
the proceptivity of said target areas.
Core drilling program will continue in the fourth quarter testing anomalies at depth and to the
southeast of the mine mineralization (Zeus plunge target). In parallel, the Company plans to further
test Carmelo, Gorgona, Favorita and begin drilling preparations for two new regional target areas.
The Company plans to drill at least another 4,000 meters in Q4-2019.
(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 5 of 7
La Plata Overview
The La Plata project is a gold rich volcanogenic massive sulphide deposit that was the subject of
small-scale mining from 1975-1981 by Outokumpu Finland. The project benefits from a modern
drill and exploration database which was completed by Cambior Inc. from 1996-1999, Cornerstone
Capital from 2006 -2009 and Toachi from 2016 -2019. In total, there is drill core and logs from
more than 28,300 metres of drilling.
Historic resources based on drilling by Cambior and Cornerstone were estimated at 913,977 tonnes
grading 8.01 grams gold per tonne, 88.3 grams silver per tonne, 5.01% copper, 6.71% zinc and
0.78% lead per tonne in the inferred categ ory. More recently, Toachi Mining completed a PEA
estimating an inferred resource of 1.85 million tonnes grading 4.10 grams gold per tonne, 50.0
grams silver per tonne, 3.30% copper, 4.60% zinc and 0.60% lead per tonne
The La Plata project, consisting of two concessions, covers 2,300 hectares and strikes for almost
4km, containing known mineralization in two VMS lenses and nine priority exploration targets.
Atico is currently gearing up to start infill and exploration drilling while also conducting additional
technical work with the aim of delivering a feasibility study on the project.
The Company has a binding option agreement with a private Ecuadorean company to earn up to
75% in the La Plata project, of which the first option to acquire the initial 60% ownership has been
exercised. Please refer to the Company’s MD&A for the nine months ended September 30, 2019
for further details.
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
(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 7
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 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
(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 7 of 7
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 nine months ended September 30, 2019 as
filed on SEDAR and as available on the Company's website for further details.