Atalaya improvements yet to hit bottom line

A lower average realised copper price and higher operating costs (due to higher production) hit the bottom line. Atalaya’s net operating cash flow was better, however, at €23m, up 55 per cent on last year. 

The near one-third increase in copper concentrate production came from the plant expansion at the Riotinto mine, near Sevilla. Recoveries were also higher, meaning the miner got more copper out of its ore. 

The full-year all-in sustaining cost (AISC) is forecast at $2.20-$2.30 per pound (lb) of copper, against $2.25/lb (£1.73) in the first half. According to BMO, the Chinese buying that saw copper climb to over $6,500 per tonne (t), or $2.95/lb, in July has eased off. 

The company’s share price has followed a similar pattern, climbing above 200p for the first time since February last month but dropping to 190p this week. 

Atalaya recently confirmed its right to run the mine after a legal challenge, but its second project, Touro, has been knocked back on environmental grounds by the Galician regional government. The company said it was looking at appeal options and also modifying its existing plans to get them signed off. 

House broker Peel Hunt anticipates 2020 cash profits will fall by 13 per cent to €54m, before jumping to €165m in 2021.