Atacama Minerals Corp.
TSX VENTURE : AAM

Atacama Minerals Corp.

August 30, 2007 11:09 ET

Atacama Reports Improved Second Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 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


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In thousands USD Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
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Total revenue 7,164 4,990 13,740 9,360
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Cost of goods sold 4,080 2,328 7,499 4,974
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General and
administrative expenses 744 966 1,330 1,429
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EBITDA 2,952 1,872 5,612 3,243
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Net income 1,194 1,301 2,214 2,079
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Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
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Tonnes Mined (Metric-"Mt") 987,117 711,000 1,977,410 1,314,167
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Iodine Grade (ppm) 513 949 531 821
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Iodine Produced (Mt) 285 202 577 417
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Iodine Sold (Mt) 314 226 608 431
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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, 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)
    Website: www.atacama.com