Copper Sales Drive 25-percent Revenue Increase for Atalaya

Atalaya Mining (TSX:AYM,LSE:ATYM) has revealed it’s increasing its copper guidance for the year off the back of operational improvements for the first nine months of 2018, allowing the company to post higher profits.

In its September quarterly financial statements released on Thursday (November 23), the company said that a modest increase in the amount of copper produced so far meant it was confident its previous increase in 2018 guidance from 37,000-40,000 tonnes to 39,000-41,000 tonnes was on target.

It said that this was because of “a combination of improved recoveries, ore grade and throughput” at its Riotinto mine in Spain.

The company’s financials are looking good as a result, with Atalaya reporting revenues of 42.8 million euros for Q3 2018 compared with 35.7 million at the same time last year — an increase of almost 20 percent.

This was thanks to “higher sales volumes owing to timing of sales plus higher realized prices.”

For the first nine months of the year revenues were 144.4 million euros, up from 114.8 million in 2017 — a 25 percent increase.

In Q3 2018, Atalaya sold 43,8927 tonnes of copper concentrate, up 7 percent compared to the 40,989 tonnes sold at the same time last year.

Cash costs for the mine were higher in Q3 year-on-year as well as year-to-date, leading to a decrease in earnings before interest, tax, depreciation and amortization (EBITDA) from 9.3 million euros in Q3 2017 to 7.7 million euros in Q3 2018.

“On an accumulative basis, EBITDA during the nine month period ended 30 September 2018 was 42 million euros compared with 33.8 million euros in the same period last year,” said the report, representing a 24 percent increase.

It also reported a year-on-year increase in profit after tax in Q3 2018 to 3.1 million euros, up from 2.7 million this time last year.

“Profits after tax for the nine months ended 30 September 2018 were significantly higher at 27.6 million euros compared with 14.5 million euros during the same period in 2017.”

Finally, the company reported that its working capital surplus was down to 19.1 million euros due to ongoing capital expenditures on its expansion project at Riotinto, where it is working on an expansion to increase throughput to 15 million tonnes of ore per year.

On the expansion, the company said that it was progressing according to schedule, with engineering essentially complete and site construction activities “picking up”, with overall progress estimated to be 65 percent complete.

On the London Stock Exchange, Atalaya was trading at GBX 195, up 3.72 percent for the day — though since the beginning of November the company has lost 19.22 percent of its value, having started at GBX 233.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.