Miner Atlas Consolidated posts Q1 net loss on weak metals prices

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NET profit for Atlas Consolidated Mining and Development Corp. declined by 640 percent in the first quarter of the year, the listed miner reported over the weekend, citing weak metals prices.

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The company registered a net loss of P637 million, as revenues came in lower by 28 percent to P2.6 billion in January to March.

“Our results were severely impacted by low copper prices, which we were not yet able to mitigate through higher production levels as we are currently focusing on key process enhancements and maintenance of our plant and mining equipment,” Atlas President Adrian Ramos said in an e-mailed statement.

The decline in copper prices starting in January resulted in $2.60/lb. average realized copper price, down 18 percent in the first quarter from $3.19/lb. fa year earlier. The average gold price dropped 6 percent to $1,214/oz. from $1,290/oz. in the same comparable period.

“The lower realized metal prices accounted for around 74 percent of the decline in revenues,” Ramos said.

Copper output at wholly-owned subsidiary Carmen Copper Corp. decreased by 8 percent to 22.4 million pounds of copper metal concentrates due to unusually heavy rainfall, pit slope ground movement, necessary maintenance activities and the continuing process optimization of the expanded processing plant.

“These factors reduced average daily throughput to 45,960 tons per day (tpd) from 47,743 tpd for the same period last year. The realized copper grade was also lower by 9 percent at 0.285 percent as mining operations were temporarily shifted to higher benches with lower grade ore,” Ramos noted.

Total volume of copper concentrate shipments dropped 5 percent to 38,400 dry metric tons (dmt). Copper metal content decreased by 5 percent to 22.4 million pounds, while gold content was up 14 percent to 5,758 ounces.

Atlas said the impact of lower volume shipment represented around 14 percent of the decline in revenues.

The company attributed the remaining 12 percent decline in revenues to a change in management control of Berong Nickel Corporation in June 2014, as such the financial results of Berong Nickel were no longer folded into Atlas Consolidated but were accounted for as equity in net earnings of an associate.

Operating cash cost was flat at P2.5 billion.  However, the average cash cost per pound of copper rose by 13 percent from $1.94/lb. to $2.18/lb. due to lower output. Total cost also increased by 18 percent from $2.67/lb. to $3.14/lb. due to higher depreciation of new assets and higher financing charges.

Cost efficiencies are expected to be achieved for the rest of the year 2015 as Carmen Copper continues to optimize its expanded processing plant and mining operations, Ramos said.

He also noted that Carmen Copper strengthened its management team with the appointment of Enrico Nera as COO and executive vice president for operations starting last April.

“We are confident that the process enhancements, sustained maintenance activities and stronger management will result in attaining consistently higher production levels and contributing to reducing operating cost in coming months,” Ramos said.

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