Atico Reports Consolidated Financial Results for the Third Quarter of 2017
(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 Third Quarter of 2017
(All amounts expressed in US dollars, unless otherwise stated)
Vancouver, November 22, 2017 -- Atico Mining Corporation (the “Company” or “Atico”)
(TSX.V: ATY | OTC: ATCMF) today announced its financial results for the three months ended
September 30, 2017, posting a net income of $0.87 million.
Fernando E. Ganoza, CEO and Director, commented , "We are pleased to report another strong
quarter with continued improvements to our balance sheet. We anticipate this trend will continue
throughout the remainder of 2017. Mr. Ganoza continued, " Our emphasis will continue to be on
further strengthening our balance sheet, improving production costs and most importantly regional
and underground exploration programs as our top priority with 3 active drill rigs on site."
Third Quarter Financial Highlights
• Net income for the three months ended September 30, 2017 (“Q3-2017”) amounted to $ 0.87
million, compared with $0.24 million for the same period last year (“Q3 -2016”). Net income
for the quarter was positively affected by an increase in revenue (increase in realized copper
price of 34.9%), partially offset by increases in direct mining and processing costs and deferred
income tax expense.
• Sales for the period increased 4% to $12.0 million when compared with Q3-2016. The increase
is due to a higher average realized copper price, partially offset by a de crease in concentrate
shipped and provisionally invoiced , as compared to Q 3-2016. Copper (“Cu”) accounted for
98.8% and gold (“Au”) 1.2% of total amount provisionally invoiced during Q3 -2017. The
average realized price per metal on pro visional invoicing wa s $2.94 (Q3-2016 - $2.18) per
pound of copper and $1,301.69 (Q3-2016 - $1,324.86) per ounce of gold.
• Working capital was $ 4.7 million (December 31, 2016 - $1.7 million) while long -term loans
payable outstanding was $4.6 million (December 31, 2016 - $5.6 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 6
• Cash costs(1) were $112.50 per tonne of processed ore and $1.38 per pound of payable copper
produced(2), a 3.2% decrease and a 2.2% increase over the same period last year, respectively.
• Income from operations was $1.15 million while cash flow from operations, before changes in
working capital was $ 4.14 million. Cash used for capital expenditures amounted to $ 2.79
million.
• At the quarter -end, 3,860 wet metric tonnes of non -invoiced concentrate remained at the
Company’s warehouses.
• All-in sustaining cash cost per payable pound of copper produced (1)(2) for Q3-2017 was $2.04
(Q3-2016 - $1.83).
Third Quarter Summary of Financial Results
Q3
2017
Q3
2016
%
Change
Revenue
$ 11,955,651 $ 11,488,716 4%
Cost of sales
(9,023,709) (9,614,765) 6%
Income (loss) from mining operations
2,931,942 1,873,951 56%
As a % of revenue
25% 16% 50%
Selling, general and administrative expenses
1,712,339 1,618,002 6%
Income (loss) from operations
1,152,169 69,036 1,569%
As a % of revenue
10% 1% 1,504%
Income (loss) before income taxes
1,120,699 424,741 166%
Net income (loss)
872,597 235,096 271%
As a % of revenue
7% 2% 257%
Operating cash flow before changes in non-cash operating
working capital items(1)
$ 4,136,992 $ 3,780,684 9%
(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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Third Quarter Operations Review
During the qu arter, the Company produced 5.1 million pounds (“lbs”) of copper, 2,831 ounces
(“oz”) of gold, and 10,840 oz of silver. When compared to Q3 -2016, production increased 13%
for copper with no significant change in gold. The increase in copper produced is mainly explained
by a 7% increase in processed material and a 5.7% increase in the copper head grade. In the case
of gold, the increase in processed material, along a slight increase of 3.8% in the head grade, were
completely offset by a 10.0% decrease in gold recovery.
Cash costs (1) for the period were $11 2.50 per tonne of processed ore, and $ 1.38 per pound of
payable copper produced, a decrease of 3.2% and an i ncrease of 2.2% over the same period last
year, respectively. The increase in the cash cost per pound of payable copper net of by products is
mainly explained by a 26 .6% increase in the trea tment and refining charges along a lower gold
credit, partially offset by the decrease in the cost per processed tonne. All-in sustaining cash cost
per payable pound of copper produced(1)(2) was $2.04.
Relative to Q2-2017, the cash cost per tonne of proce ssed ore decreased 3% while the cash cost
per pound of payable copper produced increased 6%. The decrease in operating cost along with
the positive impact of higher gold credits during the quarte r were completely offset by a 34 %
increase in the treatment and refining charges relative to the previous quarter.
For the year 2017, the treatment charge has a variable component dependent on the copper price.
The higher copper price average during Q3 -2017 negatively affected the treatment charge cost
during the quarter. The Company anticipates a similar treatment charge for Q4-2017.
Third Quarter Operational Details
Q3
2017
Q3
2016
%
Change
Production (Contained in Concentrate)(3)
Copper (000s lbs) 5,099 4,515 13%
Gold (oz) 2,831 2,813 1%
Silver (oz) 10,840 8,893 18%
Mine
Tonnes of material mined 74,919 63,539 18%
Mill
Tonnes processed 66,443 61,885 7%
Tonnes processed per day 794 766 2%
Copper grade (%) 3.68 3.48 6%
(1) Alternative performance measures; please refer to “Non-GAAP Financial Measures” at the end of this release.
(2) Net of by-product credits
(3) Subject to adjustments on final settlement
Page 4 of 6
Gold grade (g/t) 2.16 2.08 4%
Silver grade (g/t) 10.31 7.70 34%
Recoveries
Copper (%) 94.3 94.6 0%
Gold (%) 61.1 67.9 -10%
Silver (%) 49.5 59.5 -17%
Concentrates
Copper Concentrates (DMT) 10,551 10,221 3%
Copper (%) 21.7 20.0 9%
Gold (g/t) 7.5 8.6 -13%
Silver (g/t) 29.0 27.1 7%
Payable copper produced (000s lbs) 4,844 4,312 12%
Cash cost per pound of payable copper ($/lbs) (1)(2) 1.38 1.35 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
El Roble Mine
The El Roble mine is a high grade, underground copper and gold mine with nominal processing
plant capacity of 800 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 a measured and indicated resource of 1.87 million tonnes grading 3.46% copper and
2.27 g/t gold, at a cut-off grade of 0.93% copper equivalent. Mineralization is open at depth and
along strike and the Company plans to further test the limits of the resource.
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 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.
(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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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 pur suing
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 auth ority 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 inform ation 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 va rious 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 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;
(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
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 othe r 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
The Company has not based its production decisions and ongoing mine production on mineral reserve estimates,
preliminary economic assessments or feasibility studies, and historically such projects have increased uncertainty
and risk of failure. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
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, 2017 as
filed on SEDAR and as available on the Company's website for further details.