Atacama Minerals Corp.

Atacama Minerals Corp.

April 30, 2008 09:30 ET

Atacama Releases 2007 Year End Results and Restatement of Prior Year

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 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 or the Company's website

Operational Highlights

Year Ended Year Ended
December 31, 2007 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:

Year ended Year ended
In thousands of USD December 31, 2007 December 31, 2006
(except per share data) (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 Reclassi-
Reported Adjustments fication 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

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

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Atacama Minerals Corp.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)