Atalaya Mining (LON: ATYM) shares have moved under 1% this morning on the release of the annual results. Our first conclusion from this - given that there are no surprises - is that Atalaya is being pretty good at keeping the market informed of changes within the underlying business. This is something we should carry forward in our views about the ATYM shares too. Corporate announcements are likely to come in a timely and informative manner.
This is also something to do with the business Atalaya is in. They're a copper miner and an operating one - they are not prospecting, they're actually mining. Thus the one grand variable concerning their profit margins is the global copper price, something we can independently verify. So, we should, in order to have a good guess at what Atalaya's margins are going to be.
Atalaya share price from London Stock Exchange
While that's not an exact mirror image of the LME copper price it's also not far off it - a confirmation of the major influence there.
We should also think about where Atalaya is mining. The location has been mined for at least 3,000 years, quite possibly longer. It's the Rio Tinto mining area (the local town is called Minas de Riotinto too) and it is indeed the place where the much larger Rio Tinto PLC started out and got its name from.
We might think that a place that has been mined for millennia, since at least the Carthaginians and probably before the Phoenicians might be mined out by now. But that's not how it works. Mining technology continually advances so what past generations would call a worked out mine we now, with that new technology, might call a rich deposit. This has been standard in the gold mining world for generations - the first place to go mining with a new technology is in the spoil heaps of the old mines.
There are also a number of people redeploying this technique with other metals. Atalaya here with copper, the privately held Cornish Tin is redoing old an old, well, Cornish tin mine. Others are looking at Cypriot copper again, even Welsh gold. As long as mining technology continues to advance it's a business plan that will never get old too.
