When you put your mind to it, there's a lot you can achieve in a year. After years of dawdling under previous management, Atalaya Mining (ATYM) began commercial production at the Riotinto project last February. By the end of 2016, the plant had not only hit its 9.5Mtpa ore processing capacity, but the miner had expanded open pit reserves and Riotinto's life, sold €98.8m (£84.3m) worth of concentrate, and brought total cash costs down to $1.95 (£1.57) per pound of copper.
As we have previously noted, this couldn't have come at a better time. Copper prices averaged $2.21/lb last year, but surged in the final quarter and have remained above $2.50 since the start of 2017. And while the ramp-up has not come without its costs - including a higher stripping charge which accounted for the €25.4m (£21.6m) working capital deficit at the end of the period - Atalaya should be generating healthy levels of cash in 2017 if it can keep operating costs between $1.90 and $2.10, as guided. A full year of production should also help, particularly if the group can hit the upper end of its 34,000 to 40,000 tonne forecast.
Canaccord Genuity is guiding for adjusted EPS of 26¢ in 2017 and 31¢ in 2018, against unit cash costs of $1.79 per pound and $1.85 respectively.
ATALAYA MINING (ATYM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 143p | MARKET VALUE: | £167m | |
| TOUCH: | 142-144p | 12-MONTH HIGH: | 166p | LOW: 76p |
| DIVIDEND YIELD: | nil | PE RATIO: | 16 | |
| NET ASSET VALUE: | 162¢* | NET DEBT: | 59% | |
| Year to 31 Dec^ | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | nil | -12.0 | -1.2 | nil |
| 2013 | nil | -12.5 | -1.6 | nil |
| 2014 | nil | -11.2 | -0.9 | nil |
| 2015 | nil | -15.0 | -17.9 | nil |
| 2016 | 98.3 | -0.2 | 10.3 | nil |
| % change | - | - | - | - |
Ex-div: - Payment: - £1=€1.17. *Includes intangible asset of €59.7m, or 51¢ a share. ^Pre-2016 results are for EMED Mining, before the name change. | ||||
