Atico Reports Financial Results for Second Quarter of 2020
(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 Financial Results for Second Quarter of 2020
(All amounts expressed in US dollars, unless otherwise stated)
Vancouver, August 12, 2020 -- Atico Mining Corporation (the “Company” or “Atico”) (TSX.V:
ATY | OTC: ATCMF) today announced its financial results for the three months ended June 30,
2020 (“Q2-2020”), posting income from mining operations of $ 4.1 million and a net income of
$1.2 million.
Fernando E. Ganoza, CEO and Director, commented, " The Company delivered strong financial
results for the quarter even though we only sold one concentrate shipment for the period. For the
second half of the year we anticipate three concentrate shipments and financial results reflecting
the new metal price environment. At El Roble, the Company will continue to focus on the planned
regional exploration program and maintaining the very competitive all-in sustaining cash cost of
$1.34 achieved in the quarter. At La Plata, the focus will be on the ongoing drill program and
advancing the feasibility study.” Mr. Ganoza continued, " we are pleased to report that to date we
do not have any known COVID-19 cases at any of our operations. Health and safety of all of our
employees is our first priority where we place tremendous emphasis as we continue to operate
during these unprecedented times.”
Second Quarter Financial Highlights
• Net income for the three months ended June 30, 2020 amounted to $1. 2 million, compared
with loss of $0.4 million for the same period last year (“Q2-2019”). Net income for the quarter
was positively affected by an increase in concentrate shipped and invoiced with lower cost of
sales per unit, partially offset by a lower realized copper price, as compared to Q2-2019.
• Sales for the period increased 85% to $12.8 million when compared with $6.9 million in Q2 -
2019. Copper (“Cu”) and gold (“Au”) accounted for 82% and 18% of the 9,014 (Q2 -2019 -
5,769) dry metric tonnes (“DMT”) shipped and invoiced during Q2-2020. The average realized
price per metal on invoicing was $2.60 (Q2 -2019 - $2.69) per pound (“lbs”) of copper and
$1,726 (Q2-2019 - $1,410.62) per ounce (“oz”) of gold.
• Working capital was $11. 4 million (December 31, 2019 - $9.9 million), while the Company
had $1.7 million (December 31, 2019 - $2.2 million) in long-term loans payable
(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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• Cash costs(1) were $94.21 per tonne of processed ore and $ 0.93 per pound of payable copper
produced(2), which were decreases of 28% and 42% over Q2-2019, 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(1)(2) was $1.67 (Q2-2019 - $1.10) per pound of payable copper produced, which
was an increase of 52% over Q2-2019.
• All-in sustaining cash cost per payable pound of copper produced (1)(2) was $1.34 (Q2-2019 -
$2.29).
Second Quarter Summary of Financial Results
Q2
2020
Q2
2019
%
Change
Revenue
$ 12,826,237 $ 6,936,341 85%
Cost of sales
(8,715,230) (6,684,378) 30%
Income from mining operations
4,111,007 251,963 1,532%
As a % of revenue
32% 4% 782%
General and administrative expenses
942,560 1,017,817 -7%
Income (loss) from operations
3,017,827 (847,211) 456%
As a % of revenue
24% -12% 293%
Income (loss) before income taxes
1,990,634 (914,848) 318%
Net income (loss)
1,206,999 (448,411) 369%
As a % of revenue
9% -6% 246%
Operating cash flow before changes in non-cash operating
working capital items(1)
$ 7,247,448 $ (1,216,414) 696%
Second Quarter Operational Review
During Q2-2020, the Company produced 4.9 million lbs of copper, 2,733 oz of gold, and 11,204
oz of silver. When compared to Q2-2019, production increased 57% for copper and 29% for gold.
The increase for both copper and gold are mainly explained by the 75 -day strike that occurred in
the first half of 2019 during which the Company did not operate the mine and mill.
(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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Cash costs(1) for the period were $94.21 per tonne of processed ore, and $0.93 per pound of payable
copper produced, decreases of 28% and 42% over the Q2-2019, respectively. All-in sustaining
cash cost per payable pound of copper produced(1)(2) was $1.34.
First Quarter Operational Details
Q2
2020
Q2
2019
%
Change
Production (Contained in Concentrate)(3)
Copper (000s lbs) 4,952 3,157 57%
Gold (oz) 2,733 2,116 29%
Silver (oz) 11,204 6,914 62%
Mine
Tonnes of material mined 76,825 47,321 62%
Mill
Tonnes processed 71,804 47,534 51%
Tonnes processed per day 903 839 8%
Copper grade (%) 3.38 3.28 3%
Gold grade (g/t) 2.02 2.34 -14%
Silver grade (g/t) 9.30 11.10 -16%
Recoveries
Copper (%) 92.7 91.7 1%
Gold (%) 58.6 58.4 0%
Silver (%) 52.3 40.1 30%
Concentrates
Copper Concentrates (DMT) 10,828 6,561 65%
Copper (%) 20.7 21.8 -5%
Gold (g/t) 7.8 10.1 -23%
Silver (g/t) 32.2 32.8 -2%
Payable copper produced (000s lbs) 4,704 2,999 57%
Cash cost per pound of payable copper ($/lbs)(1)(2) 0.93 1.59 -42%
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 1,000 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.
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 category. More recently, Toachi Mining completed a PEA
estimating an inferred resource of 1.85 million tonnes grading 4.10 gr ams 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 consists two concessions covering a total area of 2,300 hectares along its 4 -
kilometer length, which contains known mineralization in two VMS lenses and nine priority
exploration targets.
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 year ended December 31, 2019 for further
details.
(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), a dvisor 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 disapproved of the contents o f 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 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 cause actual results to differ materially from the Company’s expectations include
uncertainties relating to interpretation of drill results and the geology, continuity and g rade 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; the world-wide economic and social impact of COVID-19 is managed
and the duration and extent of the coronavirus pandemic is minimized or not long -term; disruptions related to the
COVID-19 pandemic or other health and safety issues, or the responses of governments, communities, the Company
and others to such pandemic or other issues; and other risks and uncertainties disclosed under the heading “Risk
Factors” in the prospectus of the Company dated March 2, 2012 fil ed 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, 2020 as filed
on SEDAR and as available on the Company's website for further details.