ATACAMA REPORTS IMPROVED
SECOND QUARTER RESULTS
Vancouver, British Columbia –
August 30, 2007 – Atacama Minerals Corp. (“Atacama” or the
“Company”) (TSX Venture: AAM) is pleased to report the results from the
Company’s second quarter period ended June 30, 2007.
The second quarter of 2007 continued to show favorable trends in the
Company’s production and cash flows from the Aguas Blancas Mine in the
Atacama Desert of northern Chile.
Iodine production at the Aguas Blancas Mine for the second quarter and six
month periods showed an increase of 41% and 38% compared to similar periods
last year. The iodine market remains robust with prices expected to remain
strong throughout the remainder of 2007. The increase in overall
performance is a result of the Company’s operational improvements, higher
mine production, and an employee incentive program. Meantime, the Company is
aggressively pursuing exploration and expansion opportunities in Chile.
The Company's net income before interest, future income taxes and
depletion, depreciation and amortization (“EBITDA”) for the second
quarter ended June 30, 2007 was 58% higher at $3.0 million as compared to $1.9
million for the comparable period in 2006.
Financial and
Operating Highlights
In thousands USD
|
Three Months Ended
June 30,
2007 2006
|
Six Months Ended
June 30,
2007
2006
|
Total revenue
|
7,164
|
4,990
|
13,740
|
9,360
|
Cost of goods sold
|
4,080
|
2,328
|
7,499
|
4,974
|
General and
administrative expenses
|
744
|
966
|
1,330
|
1,429
|
EBITDA
|
2,952
|
1,872
|
5,612
|
3,243
|
Net income
|
1,194
|
1,301
|
2,214
|
2,079
|
|
Three Months Ended
June 30,
2007 2006
|
Six Months Ended
June 30,
2007
2006
|
Tonnes Mined (Metric-“Mt”)
|
987,117
|
711,000
|
1,977,410
|
1,314,167
|
Iodine Grade (ppm)
|
513
|
949
|
531
|
821
|
Iodine Produced (Mt)
|
285
|
202
|
577
|
417
|
Iodine Sold (Mt)
|
314
|
226
|
608
|
431
|
The Company produced
3.3% of the world market of 26,900 tonnes during 2006 and expects this
percentage to be higher for 2007.
The iodine produced at Aguas Blancas
is of very high quality and is now widely accepted in world markets. The many
uses of iodine coupled with the growing strong demand are very encouraging to
Company management for the future of the business.
Operations
Mining - Mine production was maintained at an average
rate of 330,000 tonnes per month. An amount of approximately 110,000 tonnes per
month was mined from the northwestern portion of the deposit known as the
“Repasos” area, and a monthly average of 220,000 tonnes per month
was mined from the central portion of the deposit, or the “Virgin”
area. In the Virgin area, the use of a continuous mining machine has allowed
for better control of dilution and higher overall average grades of iodine
delivered to the leach pads. The continuous mining machine eliminates the need
for drilling and blasting in the mining operations, making this method safer
and more efficient.
During the second quarter of 2007,
987,000 tonnes of ore grading an average of 513 ppm iodine were mined producing
approximately 285 tonnes of high-purity iodine, compared to 292 tonnes of iodine
produced during the previous quarter. This slight decrease in production
reflects an unusually cold winter which commenced in the month of June,
reducing the efficiency of the heap leach system.
The grade of iodine
delivered to the heap leach pads during the first half of 2007 was consistent
with the predicted mine plan and budget for the period.
Leaching - Leaching operations have been challenged as
the winter months commenced due to uncommonly low ambient temperatures. These
low temperatures negatively affect the leaching system because of the
precipitation of solid salts blocking the normal flow of solutions. The Company
is very proud of the efforts of mine personnel to combat this negative affect,
however, under these conditions a slight reduction in iodine production is
unavoidable and could persist into the third quarter.
Iodine Production - During the quarter iodine production was
maintained at an average monthly level of 95 tonnes per month. Upon conversion
at year end from the current heap leach operations to continuous agitated
leach, the Company is expecting to substantially increase overall recoveries
from the current level of approximately 60% to over 85% with iodine production
capacity anticipated to reach 125 tonnes per month. In addition, water use will
be economized, processing time will be drastically reduced and long-term costs
will decline.
Conversion from Heap Leaching to
Full Mechanical Agitated Leach - Construction of the new agitated leach plant, designed to replace
heap-leaching operations, is now well underway. A ground-breaking
ceremony was held on April 17, 2007 with several local dignitaries and mining
authorities in attendance, including the Region II Representative of Chilean
President Michelle Bachelet, Intendenta Marcela Hernando.
The decision by Atacama to convert
to a full-scale mechanical agitated leach plant was made in 2006 after a year
of successful pilot plant testing. The new plant is expected to be operational
by the end of the year and will provide capacity to increase production from
1,000 to 1,500 tonnes of high quality iodine per year. The total estimated cost
of the new plant is $25.5 million, expected to be funded by internal cash flow
and cash reserves. Atacama is proud to be the first mining company in Chile
to utilize mechanical agitated leaching for iodine operations.
Power Supply - During the quarter ended June 30, 2007, the
Company continued the process to replace the current power source on site by
conversion from diesel generators to electrical power from the national grid.
This process is expected to be completed early in 2008. A substation located 25 kilometers to the
north with a new powerline is planned at an estimated cost of $8 million. This
move is expected to reduce production costs over the long-term.
Nitrates - A feasibility study for the
production of nitrate fertilizers is currently under way and is expected to be
completed in the third quarter of the year. The increasing world-wide demand
for inorganic nitrate fertilizers from Chile continues. Considered
“natural” in origin, the application of these fertilizers in the
cultivation of fruits and vegetables continues to grow. The Company is looking
forward to announcing the results of this feasibility study prior to year end.
Exploration and New Business
Development -
The Company is
conducting an aggressive drilling exploration 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. 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.
Corporate
During the second quarter of 2007,
Mr. Nathaniel Frothingham was
appointed Finance Manager for Atacama Minerals Chile. Mr. Frothingham has an
extensive background in finance and banking, formerly a director of Equitum
S.A. de C.V. in Mexico City,
Mexico. The
Company welcomes Mr. Frothingham as part of our strategic plan of aggressive
growth in Chile.
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