Atalaya Mining (AIM:ATYM, TSX:AYM) PLC reported a 19.5% drop in copper production in the first quarter following a temporary plant shutdown and lower copper grades.
The mining and development company produced 11,249 tonnes of copper in the first quarter, down from 13,979 tonnes in the year-earlier period.
But retained its full-year copper production guidance of 54,000-56,000 tonnes.
However, it warned cash operating costs for the first quarter are expected to be higher than the full year 2022 cost guidance due to the escalating cost of electricity and diesel and lower production levels.
This would be partly offset by a weaker-than-budgeted Euro/US dollar exchange rate, the group added.
Further details on costs will be provided with alongside its first-quarter results in May.
Analysts at Peel Hunt Ltd (AIM:PEEL) said Atalaya’s first-quarter production missed targets by 11% and the main focus of the results’ statement would be the higher costs.
Atalaya produces copper concentrates and silver by-product from its Proyecto Riotinto site in southwest Spain.
"The start of 2022 has been one of the most challenging periods experienced by the company since the re-start of Proyecto Riotinto,” said chief executive Alberto Lavandeira.
“The unprecedented high prices of energy products have affected all the economic sectors in Spain and culminated with a strike of the transport sector that temporally interrupted our processing operations.
“The extremely high electricity price, due to the record natural gas price in Europe, has also created inflationary pressures that have only been partially offset by the higher copper prices and favourable exchange rates.
“Measures have been taken by the company and by the Spanish government and we are confident that the situation will improve in the coming months,” he said.
In a separate statement, the company announced new mineral resource estimates for its San Dionisio and San Antonio deposits, which form part of Proyecto Riotinto.