Atlas Mining trims net loss to Php814M in 2015
14 April 2016
Atlas Consolidated Mining and Development Corporation (“Atlas Mining”) registered a net loss of Php814 million for the full year 2015, compared to a net income of Php397 million in full year 2014. Compared to the first nine months of 2015, the company improved from a net loss of Php1.3 billion. Increased production volumes and ongoing cost efficiency improvements helped cushion the impact of low copper prices.
In addition, the narrower net loss for the full year also benefitted from the share in net income from Berong Nickel Corporation amounting to Php244 million, net foreign exchange gain of PhP138 million and realized gains on derivatives of Php295 million attributable to the recognition of derivative assets and liabilities from provisional pricing contracts still outstanding at the end of the year for copper concentrate shipments.
Intensified improvements in production volumes were recorded in the second half of the year, benefitting from ongoing improvements in maintenance and process efficiencies at Atlas Mining’s wholly-owned subsidiary Carmen Copper Corporation (“Carmen Copper”). For the second semester, copper metal in concentrate grew by 20% to 55.6 million pounds, spurred by relatively higher head grade, continuous improvement in copper recovery and increased milling tonnage. Copper grade improved to 0.307% from 0.292% and copper recovery accelerated further to 86.3% compared to 85.2% for the first semester average. Similarly, milling tonnage expanded by 13% to 9.5 million tons as average daily throughput delivered 51,800 tonnes per day (tpd) for the second half from 46,600 tpd in the previous semester.
Copper prices fell to its 6-year low on continuing concerns over the future demand from China. Thus, average realized copper price ended the year at $2.46/lb, 21% lower than $3.12/lb average in 2014. Likewise, the average realized gold price dropped 9% to $1,152/oz from $1,265/oz the previous year.
Meanwhile, total operating cash costs shrank by 16% to Php9.4 billion in 2015, due to ongoing cost containment initiatives. Average cash cost per pound of copper declined to US$1.71/lb from US$1.99/lb in 2014.
In light of the challenging environment for copper, Atlas Mining announced the reduction of its mill throughput at the Carmen Copper mine from its nameplate capacity of 60,000 tpd to 40,000 tpd. While management views the long term outlook for copper positively, the company must respond to current market conditions to optimize cash flow while protecting its large mineral resources for the longer term and to position the company to enhance performance and throughput when copper prices improve.