Atalaya Mining (AIM:ATYM, TSX:AYM) PLC reported a 72% drop in second-quarter profit as input costs soared and warned inflationary pressures are likely to continue.
Shares in the AIM-traded company fell as much as 9.6% in early trading.
EBITDA slumped to €14.7mln from €52.0mln in the year-earlier quarter due to significant increases in key input costs such as electricity, diesel, explosives, steel and lime.
“As a result of the ongoing conflict in Ukraine and the inflationary environment globally, our costs have increased materially since last year and it is likely that current conditions will persist for some time,” said chief executive Alberto Lavandeira.
“High electricity prices are having a notable adverse impact, along with consumables linked to the price of energy, such as explosives and diesel.”
In July, the company revised its full-year copper production guidance down to 52,000 - 54,000 tonnes and said that cash costs and all-in-sustaining costs (AISC) will be revised upwards by about 5-10%.
It maintained its full-year output target today but said it now expects 2022 cash costs to be US$2.95-3.25/lb copper payable and AISC to be $3.25-3.45/lb copper payable based on higher electricity prices. It had guided towards cash costs and AISC of US$2.25-2.80/lb and US$2.50-3.05/lb respectively when it released its first-quarter results in May.
The company, which had net cash of €67.6mln as of end-June, plans to pay Interim dividend of US$0.036 per share.