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Atlas Mining's revenues up 11% to Php3.64B, shipment volume up 19% as commissioning of copper plant expansion completed in March

15 May 2014

Manila, Philippines

Atlas Consolidated Mining and Development Corporation (“Atlas Mining”) posted revenues of Php3.64 billion for the first quarter of 2014, registering an 11% year-on-year growth despite lower realized metal prices due to higher sales volume. Copper revenues, comprising 97% of total revenues, went up by 15% to Php3.22 billion. Gold revenues, likewise, increased by 23% to Php291 million.

During the first three months of 2014, Atlas Mining’s wholly-owned subsidiary, Carmen Copper Corporation (“Carmen Copper”) registered a total production of 24.41 million pounds of copper in metal concentrate, a 17% increase year-on-year, and improved its average daily milling capacity to 47,743 tonnes per day (tpd). Last March, Carmen Copper’s ore processing plant achieved a record peak milling capacity of 53,834 tpd with the completion of the initial commissioning of its expansion project, which will increase the milling capacity of the existing plant by 50% or from 40,000 tpd to 60,000 tpd.

With the increase in production, total volume of copper shipments likewise rose by 19% to 23.73 million pounds of copper metal in concentrate while gold content was up by 36%. The increase in shipment volume, however, was tempered by the decrease in realized price of copper which dropped by 10% to an average of US$3.19 per pound, and the decrease in realized price of gold which dropped by 21% to US$1,290 per ounce.

Total operating cash costs increased by 17% to Php2.48 billion as the level of production and shipments increased. Operating efficiency, however, was sustained as average cash cost per pound of copper increased by only 6% from US$1.83 to US$1.94 while total cost decreased by 2% from US$2.72 to

US$2.67. Atlas Mining is gaining ground on its primary efficiency goal to bring down cash cost per pound as Carmen Copper registered cash cost per pound of US$1.58 in March and total cost of US$2.19 with the switch-on of the new processing plant.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) stood at Php1.15 billion or a decrease by 10% year-on-year due mainly to the drop in metal prices. Net income was at Php118 million for the quarter, 79% lower year-on-year due mainly to the collective effect of lower prices, expiry of Carmen Copper’s income tax holiday incentive and the recognition of unrealized foreign exchange loss of Php159 million on its dollar-denominated debts. Had the 2013 copper prices been maintained, there should have been an additional Php300 million in net income. Without the effect of the above factors, net income would have increased by 17%. (See attachment for additional information on unrealized foreign exchange gain/loss).

According to Atlas Mining Executive Vice President, Adrian Ramos, “While the financial results for the first quarter reflect a challenging start to 2014, the operational results show that we are on track on increasing production as we see upswing in throughput and recovery rate with the completion of the initial commissioning of Carmen Copper’s expanded ore beneficiation plant. We also continue to see the favorable impact on our production costs as per pound cost of copper is nearing our target range. We are looking forward to an accelerated period of growth for the remainder of 2014 as we continue to realize the benefits of the recently commissioned ore processing plant as well as the continuous development of its higher-grade orebody to achieve steady improvement in our operating margins and net income.”

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