Good
afternoon!
Please
find enclosed a news release issued today. If you have any questions or
require further information, please do not hesitate to call.
Best
regards,
Sophia Shane
Ph.
604-689-7842
ATACAMA THIRD
QUARTER HIGHLIGHTS
December 4,
2007… Atacama Minerals Corp. (“Atacama” or the
“Company”) (TSX Venture: AAM) is pleased to report
highlights from the third quarter period ended September 30, 2007. The
full third quarter report is available on www.sedar.com
or the Company’s website www.atacama.com.
Results for the Company’s
operations at the Aguas Blancas Mine in the Atacama Desert of northern Chile
were in line with expectations considering the quarterly price increases of
iodine offset by challenging production issues due to unusually cold winter
weather. Nevertheless, iodine production was generally on target at 822 tonnes
for the first nine months of the year, with total production for year-end
expected to be in excess of 1,000 tonnes. Meantime, construction of the
iodine agitated leach facilities proceeded on track for increasing iodine
production to a rate of 1,500 tonnes per annum.
The Company will be converting from
the current heap leaching system to a full mechanical agitated leach system at
the end of the first quarter of 2008. The new system is expected to increase
the yearly production rate of high quality prilled iodine from the current 1000
tonnes per year to 1,500 tonnes per year. When operational, the new
agitated leach system will be less affected by cold winter weather conditions
and will be more efficient in the use of water and overall recovery of iodine
from the caliche ore. Construction of the new agitated leach plant was over 65%
complete by the end of the third quarter and on budget.
During the third quarter a new
powerline to the Aguas Blancas Mine was approved by the Board and by local environmental
authorities and is expected to be operational the latter part of the first
quarter of 2008, providing a long-term, less expensive, reliable supply
of electricity for current and expanded operations.
The Company’s net income before
interest, future income taxes and depletion, depreciation and amortization
(“EBITDA”) for the third quarter ended September 30, 2007 was $1.4
million, 15% lower as compared to the $1.7 million for the comparable period in
2006. The decrease in income for the third quarter is due primarily to a
lower gross margin on sales of iodine from Aquas Blancas, higher sales and
administrative costs, offset slightly by foreign exchange translation gain on
funds held in Canadian dollars. The gross margin from Aquas Blancas was
negatively impacted by increased costs of fuel, sulfur, sulfuric acid and other
increases in operating costs due to the effects of unusually cold weather
during the third quarter. In addition, the continuous devaluation of the U.S.
dollar against the Chilean peso from the beginning of 2007 to the end of the
quarter contributed to a rise in labor and supply costs sourced locally in
pesos. Operating cost cutting measures combined with improved iodine production
with the onset of warmer weather are expected to improve the fourth quarter
performance.
Financial and
Operating Highlights
In thousands of USD
|
Three Months Ended September
30, 2007
|
Three Months Ended September
30, 2006
|
Nine Months Ended September 30,
2007
|
Nine Months Ended September 30,
2006
|
Total Revenue
|
5,870
|
4,673
|
19,610
|
14,033
|
Cost of goods sold
|
4,098
|
2,711
|
11,596
|
7,685
|
General and administrative expenses
|
583
|
425
|
1,745
|
1,216
|
EBITDA
|
1,408
|
1,660
|
6,984
|
4,903
|
Net Income (loss)
|
(4)
|
1,305
|
2,210
|
3,383
|
|
|
|
|
|
Tonnes Mined (Mt)
|
1,145,280
|
979,300
|
3,122,690
|
2,233,031
|
Iodine Grade (ppm)
|
495
|
625
|
518
|
741
|
Iodine Produced (Mt)
|
244
|
224
|
822
|
641
|
Iodine Sold (Mt)
|
252
|
208
|
860
|
639
|
Operations
Mining
Mine production of caliche ore
was on target for the three months ended September 30, 2007 at 1,145,280 Mt with
a grade of 495 parts per million (ppm) and for the nine months ended September
30, 2007 at 3,122,690 Mt with a grade of 518 ppm. There are 18 leach pads
containing approximately 200,000 tonnes of ore under irrigation at any one
time, each with a life cycle of 6 to 8 months.
Leaching – Leaching operations have been
challenged in July and August due to uncommonly low ambient temperatures. The
existing leaching system was impeded due to the precipitation of solid salts
blocking the normal flow of solutions to the iodine plant. Nevertheless,
through the efforts of staff and employees, production was maintained at levels
higher than the same period in 2006.
Iodine Production - During the quarter iodine
production averaged a monthly level of 84 tonnes per month compared to 69
tonnes per month in the same period the previous year. Upon conversion to
continuous agitated leach, the Company is expecting to substantially increase
overall recoveries from the current level of approximately 55% to over 80% with
iodine production capacity anticipated to reach 125 tonnes per month, or 1,500
tonnes per year. In addition, water use will be economized, processing time
will be immensely reduced from months to hours and the operational costs will
come down over the long term. The new plant is expected to be operational by
the end of the first quarter of 2008 at a total estimated cost of $25.5
million. Funding will come from internal cash flow and available short-term
credit facilities.
Power Supply
During the third quarter the Company received approval from
the Regional Environmental Authority of Antofagasta, in northern Chile
(COREMA), for the construction of a new powerline connecting the Aquas Blancas
Mine to the local power grid. The $8.2 million project will connect the
Aguas Blancas Mine with the local power grid at a distance of 28
kilometers. It will include two substations and a 69 kilovolt transmission
line. Construction is expected to be completed and the new power supply
system operational by the end of the first quarter in 2008 providing more
reliable lower cost power to the existing facility and increase power available
for future expansion.
The powerline will replace the current diesel powered
generators and provide for a long-term reliable source of energy for future
operations.
Nitrate
Feasibility Study
The feasibility study for the production of nitrate
fertilizers is ongoing and is expected to be completed during the fourth
quarter of this year. Management expects to review it and make a recommendation
to the Board during the first quarter of 2008. Market analysis indicates an
ever increasing world-wide demand for inorganic nitrate fertilizers from Chile.
Considered “natural” in origin, the application of these
fertilizers in the cultivation of tobacco, fruits and vegetables continues to
grow.
Exploration
and New Business Development
The Company continues to conduct an
aggressive exploration drilling program for discovery of new resources at the
Aguas Blancas Mine while an in-fill drilling program is on-going to convert
existing resources to the reserve category. A new reserve/resource calculation
is underway for which results are expected to be announced during the first
quarter of 2008.
Meantime, opportunities for expansion
into other areas of northern Chile
are being aggressively pursued as part of our long-term growth strategy. These
opportunities include new exploration projects and possible joint-ventures
and/or acquisitions.
Atacama Minerals Corp. is an
industrial minerals company producing iodine from its 100% owned Aguas Blancas mine
in the Atacama Desert of northern Chile.
On Behalf of the Board,
Edward F. Posey
President
For further information, please contact:
Sophia Shane, Corporate Development (604) 689-7842
The TSX Venture Exchange has not
reviewed and does not accept responsibility for the adequacy or accuracy of
this release.