Atlas Mining Core Income Up 77% in 1Q 2020

Atlas Consolidated Mining and Development Corp. (PSE: AT) reported a higher core income of PhP113 million for the first quarter of 2020, a 77% improvement from PhP64 million in 2019 as cash costs decreased by 18 percent from PhP2.99 billion in 2019 to PhP2.44 billion in 2020 which more than offset the impact of lower revenues. However, net loss of PhP37 million was slightly higher by 6 percent than last year’s net loss of PhP35 million due mainly to higher deferred tax provisions in 2020.

Its wholly-owned subsidiary, Carmen Copper Corp., sustained improvements in its operations and maintained full operations during the implementation of the enhanced community quarantine (ECQ). Copper metal production increased by 2 percent from 27.47 million pounds in 2019 to 27.92 million pounds in 2020. Gold production also increased by 14 percent from 9,828 ounces to 11,169 ounces. The increase in copper and gold production resulted from higher tonnage milled and higher realized grades. Milling tonnage increased by 2 percent from 4.36 million tonnes to 4.45 million tonnes. On the other hand, copper grades improved by 2 percent from 0. 313 percent to 0.321 percent; and gold grade improved by 15 percent from 6.21 grams/dmt to 7.12 grams/dmt.

With sustained production, all commitments for shipments were attained. The 5 percent decrease in copper concentrate shipped in the first quarter from 49,500 tonnes to 47,000 tonnes was due to higher inventory carried over to Q1 2019 from Q4 2018. Copper metal content of concentrate shipped decreased by 4 percent to 26.6 million pounds but gold content increased by 9 percent to 9,626 ounces due to higher gold grade.

Copper price in the first quarter was lower year-on-year with average realized copper price at $2.52/lb in 2020, 10 percent lower than $2.81/lb in 2019, but average realized gold price at $1,574/oz in 2020 was 21 percent higher than $1,305/oz in 2019.

The improvement in operating efficiencies that increased throughput and higher grades resulted in the lower average cost per pound by 29 percent from $1.54/lb in 2019 to $1.10/lb in 2020. Moreover, cash costs were 18 percent lower from PhP2.99 billion in 2019 to PhP2.44 billion in 2020.

Earnings before interest, tax, depreciation and amortization (EBITDA) settled at PhP1.62 billion, 6 percent higher compared to PhP1.53 billion in the first quarter of 2019 as the decrease in revenues due to lower copper price and copper metal content was more than offset by the decrease in cash costs. This underlined the increase in core income for the period.

Atlas Mining President Adrian Ramos said, “The COVID-19 pandemic has affected metal prices and the overall supply chain. Fortunately for Atlas Mining, it was able to sustain full operation even under the ECQ which enabled the company to fulfill all commitments to its buyers and suppliers. We are confident that our company can continue its full operation and attain its production targets for the rest of the year.”