ATACAMA RELEASES 2007 YEAR END RESULTS and
restatement of prior year
April 30, 2008…
Atacama Minerals Corp. (“Atacama” or the “Company”)
(TSX Venture: AAM) reports highlights for the year ended December 31,
2007. The 2007 Management’s Discussion and Analysis and Financial
Statements are available on www.sedar.com or
the Company’s website www.atacama.com.
Operational Highlights
|
Year Ended December 31, 2007
|
Year Ended December 31, 2006
|
|
|
|
Tonnes Mined (Mt)
|
4,097,838
|
3,212,586
|
Iodine Grade (ppm)
|
518
|
731
|
Iodine Produced (Mt)
|
1,075
|
891
|
Iodine Sold (Mt)
|
1,095
|
858
|
The Company has implemented an optimized mine plan starting in 2008
whereby tonnages will be reduced and higher grade ore will be mined in the
early years including mining of the virgin (caliche) ore in the next 10
years. This new plan is expected to render positive results during the
second quarter of 2008.
Iodine production for the year ended December 31, 2007 increased 21% due
to higher amounts of ore mined during the year and continuing operational
improvements. However, production in the third and fourth quarter of 2007 came
in lower than expected due to unforeseen circumstances including unusually cold
weather conditions prevailing during the winter months, a series of minor
earthquakes in November 2007 and certain unscheduled production downtime.
The unusually cold weather resulted in excessive crystallization of
salts in the leach pads which inhibited leach recovery. Also, these excess
salts accumulated in pipes and pumps resulting in reduce flow of pregnant leach
solutions to the plant and increasing the cost of cleaning and maintenance. The
earthquake and numerous aftershocks in November caused some minor damage to
power lines which resulted in intermittent interruptions in electricity needed
to keep overall operations running on a continuous basis.
Construction of the new
mechanical agitated leach plant is near completion and is undergoing final
testing in anticipation of formal commissioning in the second quarter of 2008.
The plant is designed to replace the current heap leaching system for
increasing production from current levels of approximately 1,000 Mt to 1,500 Mt
per annum. The company successfully completed the $25.5 million project with
less than a 4% overrun.
The new agitated plant will
use less water compared to the current heap leach operations resulting in a
direct cost savings and conservation of water. Recovery of iodine-nitrate
salts from the caliche ore is expected to increase from the current level of
approximately 55% with the heap leach system to in excess of 75% using the new
agitated leach plant. This was confirmed by the pilot plant operations conducted
in 2006. The processing time for leaching the ore in the new plant will
be reduced to less than 24 hours instead of 8 months on the leach pads. The
agitated plant will also eliminate the need to continuously build additional
leach pads thereby reducing the need for operating capital. Construction
of the new powerline, including two new substations and a 69 kilovolt
transmission line, is also nearing completion to coincide with commissioning of
the agitated leach plant. The powerline, which extends 28 kilometers, will
replace the current diesel powered generators and provide for a reliable,
long-term source of lower cost energy for future operations.
As previously reported in
the Company’s press release on January 31, 2008, total proven and probable
reserves have increased 53% to 37.7 million tonnes and measured and indicated
resources have increased 86% to 51.3 million tonnes as of October 31,
2007. The Company is continuing its drill program to extend the available
resources outside of the currently defined area, as well as to upgrade and
increase the amount of Measured and Indicated resources within the currently
demarcated resource limits.
Financial Highlights:
In
thousands of USD
(except
per share data)
|
Year ended December 31, 2007
|
Year ended December 31, 2006
(Restated)
|
|
|
|
Total
revenue
|
$25,171
|
$18,821
|
Cost
of goods sold
|
$15,290
|
$10,185
|
Expenses
|
$2,083
|
$2,811
|
Earnings before interest, income taxes,
depletion, depreciation and amortization (EBITDA)
|
$6,822
|
$6,005
|
Net
income (loss)
|
$1,868
|
$2,374
|
Basic and diluted earnings/share
|
$0.02
|
$0.02
|
Sales
revenue for the year ended December, 2007 was 34% higher as compared to 2006 as
a result of higher sales volume and iodine prices. Costs of goods sold were
also 60% higher due to increased costs for fuel, sulfur, sulfuric acid and
other operating supplies. In addition, the 9% devaluation of the U.S. dollar
against the Chilean peso during the year contributed to a rise in labor and
supply costs which are sourced locally in pesos. The 21% decrease in income for
2007 is attributed primarily to lower operational margin from the Aquas Blancas
mine, higher general and administrative costs and the write off of the sodium
sulphates studies costs in the fourth quarter of 2007.
Mr.
Edward Posey, President and CEO, commented “the iodine market continues
to be strong. Iodine produced at Aguas Blancas is of high quality and widely
accepted in the world markets. The many uses of iodine coupled with the growing
demand have firmly established the Company as a reliable and important supplier
in the global market.”
Restatement of Financial
Statements
The Company identified accounting
errors that relate to 2005 and 2006, which includes the failure to recognize
future income taxes relating to the differences in the accounting and tax
values of certain assets and liabilities and an error in its 2006 tax rate in
the reconciliation for income taxes. In addition, the Company indentified
an under depletion of certain assets. As a result, the Company has
amended its consolidated financial statements for the year ended December 31, 2006, in thousands of U.S.
dollars, as follows:
|
Previously
Reported
|
Adjustments
|
Reclassification
|
Restated
|
Consolidated
Balance Sheet as at December 31, 2006
|
|
|
|
|
Plant and equipment
|
$ 21,023
|
|
$
(530)
|
$ 20,493
|
Mineral
property and related expenditures
|
$ 36,331
|
$ (2,105)
|
$
530
|
$ 34,756
|
Total assets
|
$ 87,710
|
$ (2,105)
|
|
$ 85,605
|
Future income taxes
|
$ 3,273
|
$ 1,077
|
|
$ 4,350
|
Total liabilities
|
$ 9,666
|
$ 1,077
|
|
$ 10,743
|
Shareholders’
equity
|
$ 78,044
|
$ (3,182)
|
|
$ 74,862
|
Consolidated Statement of Operations for the year ended December 31, 2006
|
Cost of goods sold
|
$
12,501
|
$
232
|
|
$
12,733
|
Other expenses
|
$
268
|
$
(8)
|
|
$
260
|
I
|
|
|
|
|
Earnings before income taxes
|
$
3,501
|
$
(224)
|
|
$
3,277
|
Income tax
expense
|
1,340
|
(437)
|
|
903
|
Net earnings for the year
|
$
2,161
|
$
213
|
|
$
2,374
|
|
|
|
|
|
Deficit, beginning of the year
|
$
9,883
|
$
3,394
|
|
$
13,277
|
|
|
|
|
|
Basic earnings per share
|
$
0.02
|
|
|
$
0.02
|
Diluted earnings per share
|
$
0.02
|
|
|
$
0.02
|
Atacama Minerals Corp is an
industrial minerals company dedicated to the production of high quality iodine.
The Company has and will continue to aggressively pursue other growth
opportunities through strategic planning, exploration, acquisition and joint
ventures that are in line with the Company’s business model to become a
major producer of industrial minerals. In keeping with this plan and given the
global market for nitrate fertilizers focusing on agri-business which is
rapidly growing with increasing worldwide demand, the Company undertook and has
completed a feasibility study for the production of nitrate fertilizers and
will be submitting it shortly for board consideration.
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.