2010 Highlights

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 9, 2011) - Atacama Minerals Corp. ("Atacama" or "the Company")(News - Market indicators) is pleased to provide the following report on the financial and operating highlights for the fiscal year ended December 31, 2010. 

The year 2010 was a great year for Atacama operations. We continued to optimize the Aguas Blancas iodine mine. The year ended once again with record production levels that have continued into 2011, and we are confident in achieving our targeted annual rate of 1,500 tonnes of iodine before the end of the current year. Some of the highlights achieved at Aguas Blancas in 2010 include:

• increased tonnes and grade of ore significantly over the previous year;
• increased reserves and resources through our aggressive exploration program;
• increased brine grades to record levels through innovative leach techniques;
• initiated transition to self-mining from contract mining to reduce costs; and,
• began commissioning of the modified agitated leach plant.

We are very proud to inform our shareholders that our team has been able to accomplish all of these things and still maintain an excellent safety and environmental record, as well as the successful renewal of our ISO 9001 certification.

The Aguas Blancas project continues to provide positive cash flow with income of US$3.7 million in 2010 from mining operations in spite of a weaker US dollar.

In Brazil, despite experiencing some penetration difficulties with drilling, we advanced our knowledge of the Salvador potash project in important areas via geophysical studies and reviewing existing information on potash occurrences in the region. A number of strategically located exploration holes are undergoing permitting to advance exploration at the Salvador Project.

On a consolidated basis, the Company reported a net loss for the year of US$2.8 million, or US$0.02 per share primarily due to foreign currency translation as well as exploration expenses of over US$3 million from our Salvador potash project. We ended the year with cash on hand of US$27.6 million.

Financial Highlights (Amounts are in US$ unless otherwise stated)

The Company recorded a net loss of $2.8 million or $0.02 per share for the year ending December 31, 2010 compared to a net income of $2.9 million or $0.02 per share in 2009. The swing from net income in 2009 to the net loss for 2010 was primarily a result of a $4.1 million foreign currency translation gain in 2009 as compared to a $1.1 million translation gain in 2010 and higher exploration expenses of $3.2 million relating to the Salvador potash project in 2010 compared to $1.3 million in 2009. Income from mining operations remains positive at $3.7 million but lower than 2009. The primary causes of the lower income from mining operations are:

• the substantial appreciation of the Chilean peso. Approximately 72% of the mine operating costs are denominated in Chilean pesos and as a result, had the effect of increasing our cash operating costs at the mine by approximately $1.18 per kg of iodine sold, or approximately $1.5 million as compared to 2009; and,
• the effects of significant price increases for the mining contracts, power, personnel costs and camp costs.

Sales revenue for the year ended December 31, 2010 was $34.0 million, a 16% increase from the $29.4 million for the same period in 2009. The increase in sales revenue is due to higher sales volume and slightly higher iodine prices.

Operating costs for the year ended December 31, 2010 were $24.6 million as compared to $19.7 million for 2009. 

Exploration and project investigation expenses were higher at $3.2 million for the year ended December 31, 2010 compared to $1.3 million for 2009, due to increased expenditures on the Salvador potash project.

Operational Highlights

Selected operational information for Aguas Blancas mine for the three months and year ended December 31, 2010 compared to 2009 is set out in the following table:

Outlook

At Aguas Blancas, 2011 should prove to be another important year for the Company. It is anticipated that by the end of the year the agitated leach plant should be in a position to take over as the main processing facility, reducing dependence on the lower recovery heap leach method. We plan to continue to assume a larger role in mining, reducing the number of contractors at site. Production from our newly purchased continuous miner has thus far met our needs and expectations. We plan to update our nitrate feasibility study soon, with an eye towards expanding our product base, and also reviewing the feasibility of continuing to expand our iodine production capabilities with the increased reserve and resource we have recently announced. In addition, we plan to aggressively pursue our exploration program on the large land package that remains to be explored, and look to add to our resource base to ensure a continued long mine life for Aguas Blancas. We continue to be optimistic about the future for iodine, and feel current upward trends in demand and pricing are justifying this optimism. 

At the Salvador potash project in Brazil, we plan to focus on additional exploration utilizing the information we have gathered to date. Sampling programs run in conjunction with other exploration work taking place in the region have confirmed the presence of potash salts above the halite zone in the evaporites. Working with experts in the potash field, we are narrowing down the number of targets in our large land package to prioritize the drilling locations.

Our goal at Atacama continues to be growth. We believe that Atacama has a solid foundation and is positioned for that growth. We look forward to another great year in 2011.

About Atacama Minerals

Atacama Minerals Corp. is a Canadian company focused on the discovery and development of economic industrial minerals projects in South America. The Company produces iodine from its Aguas Blancas mine in northern Chile. In addition, the Company holds a potash exploration project in northeastern Brazil.

Cautionary Statements

This news release contains forward-looking statements concerning the Company's plans for its properties. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to political risks involving the Company's exploration and development of its properties, the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, the inability or failure to obtain adequate financing on a timely basis and other risks and uncertainties, including those described in the Company's periodic filings with the British Columbia Securities Commission. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary.

On behalf of the Board,

Tim Miller, President and CEO