Atico Reports Financial Results for First Quarter of 2021

(All amounts expressed in US dollars, unless otherwise stated)

Atico Mining Corporation (the “Company” or “Atico”) (TSX.V: ATY | OTC: ATCMF) today announced its financial results for the three months ended March 31, 2021 (“Q1-2021”), posting income from mining operations of $5.3 million and a net income of $1.2 million.

Fernando E. Ganoza, CEO and Director, commented, “This was a particularly challenging quarter given the operational setbacks resulting in loss production and an increase in cash cost, partially mitigated by higher realized metal prices leading to a cash margin of $2.38 per pound of payable copper. The Company closed the quarter showing a strong cash position of US$ 9.2 million and US$ 18 million in trade receivables, which were mostly realized in early April.” Mr. Ganoza continued,” We anticipate that we will be able to make up for the lost production throughout the remainder of this year to meet the annual guidance and take full advantage of the higher metal price environment.”

First Quarter Financial Highlights

• Net income for the three months ended March 31, 2021 (“Q1-2021”) amounted to $1.2 million, compared with a loss of $1.6 million for the comparative period (“Q1-2020”). Net income was significantly affected by a higher realized copper price, partially offset by higher production costs and a negative fair value adjustment on outstanding derivatives, as compared to Q1-2020.
• Sales for the period increased 155% to $19.3 million when compared with $7.6 million in Q1-2020. Copper (“Cu”) and gold (“Au”) accounted for 92% and 8% of the 10,125 (Q1-2020 – 8,588) dry metric tonnes (“DMT”) shipped and invoiced during Q1-2021. The average realized price per metal on invoicing was $4.05 (Q1-2020 – $2.18) per pound (“lbs”) of copper and $1,728 (Q1-2020 – $1,578) per ounce (“oz”) of gold.
• Working capital was $21.3 million (December 31, 2020 – $22.5 million), while the Company had $6.6 million (December 31, 2020 – $6.8 million) in long-term loans payable.

• Cash costs ⁽¹⁾ were $125.24 per tonne of processed ore and $1.67 per pound of payable copper produced ⁽²⁾ , which were increases of 23% and 48% over Q1-2020, respectively. The increase in the cash cost per pound of payable copper net of by products is primarily explained by a higher cost per processed tonne, along with lower by-product credit from gold.
• Cash margin ⁽¹⁾⁽²⁾ was $2.38 (Q1-2020 – $1.04) per pound of payable copper produced, which was an increase of 126% over Q1-2020.
• All-in sustaining cash cost per payable pound of copper produced ⁽¹⁾⁽²⁾ was $2.85 (Q1-2020 – $1.60).

First Quarter Summary of Financial Results

First Quarter Operational Review

In Q1-2021, the Company produced 4.5 million lbs of copper, 2,134 oz of gold, and 7,870 oz of silver. When compared to Q1-2020, production decreased by 9.0% for copper and 19.7% for gold. The decrease for both copper and gold is mostly explained by 6.9% decrease in processed ore, while for gold an additional factor was a 12.8% decrease in head grade.

Cash costs ⁽¹⁾ for the period were $125.24 per tonne of processed ore, and $1.67 per pound of payable copper produced, increases of 23% and 48% over Q1-2020, respectively. All-in sustaining cash cost per payable pound of copper produced ⁽¹⁾⁽²⁾ was $2.85.

First Quarter Operational Details

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 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 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 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, 2020 for further details.

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 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.

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 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; 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 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 three months ended March 31, 2021 as filed on SEDAR and as available on the Company’s website for further details.