ATICO MINING CORPORATION

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Expressed in United States Dollars)

JUNE 30, 2017

 NOTICE TO READER

The accompanying unaudited condensed consolidated interim financial statements of Atico Mining Corporation (the
Company) for the six months ended June 30, 2017 have been prepared by management and approved by the Audit
Committee and the Board of Directors of the Company. These condensed consolidated interim financial statements have not
been reviewed by the Companys external auditors.
ATICO MINING CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in United States Dollars)

June 30 December 31
2017 2016
ASSETS
Current assets
Cash and cash equivalents (Note 15) $ 4,778,042 $ 3,617,172
Receivables (Note 3) 9,170,144 4,794,591
Inventories (Note 4) 5,850,104 8,759,852
Prepaids and deposits 2,727,422 1,536,105
Other financial assets (Note 11) - 151,933
Total current assets 22,525,712 18,859,653
Non-current assets
Mineral property, plant and equipment (Note 5) 60,175,279 60,538,998
Total non-current assets 60,175,279 60,538,998
TOTAL ASSETS $ 82,700,991 $ 79,398,651

LIABILITIES AND EQUITY

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (Note 6) $ 8,180,349 $ 6,479,643
Credit facilities (Note 7) 5,902,226 5,390,680
Current portion of provisions (Note 8) 259,727 345,545
Current portion of long-term loans payable (Note 9) 2,501,639 2,172,088
Taxes payable 1,577,552 2,075,077
Other financial liabilities (Note 11) 181,283 684,783
Total current liabilities 18,602,776 17,147,816
Non-current liabilities
Provisions (Note 8) 1,799,799 1,678,995
Long-term loans payable (Note 9) 2,640,814 3,436,533
Deferred income tax liabilities 17,939,736 17,419,017
Total non-current liabilities 22,380,349 22,534,545
Total liabilities 40,983,125 39,682,361
EQUITY
Share capital (Note 12) 38,380,597 37,853,750
Reserves 2,433,709 2,492,376
Deficit (2,733,574) (4,334,425)
Total equity attributable to equity holders of the Company 38,080,732 36,011,701
Non-controlling interests 3,637,134 3,704,589
Total equity 41,717,866 39,716,290
TOTAL LIABILITIES AND EQUITY $ 82,700,991 $ 79,398,651

These condensed consolidated interim financial statements were authorized for issuance by the Board of Directors on August
29, 2017.

Approved by the Board of Directors

Luis F. Senz Director Jorge R. Ganoza Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

-3-
ATICO MINING CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Expressed in United States Dollars)

Three months Three months Six months Six months

ended ended ended ended
June 30 June 30 June 30 June 30
2017 2016 2017 2016
Sales $ 14,074,005 $ 3,659,067 $ 31,287,523 $ 15,781,609
Cost of sales
Direct mining and processing costs (6,661,662) (2,100,006) (15,016,801) (6,659,838)
Royalties (226,699) (194,648) (518,943) (443,535)
Depletion and amortization (3,113,144) (1,367,288) (7,148,031) (5,073,517)
Total cost of sales (Note 4) (10,001,505) (3,661,942) (22,683,775) (12,176,890)

Income (loss) from mining operations 4,072,500 (2,875) 8,603,748 3,604,719

Selling, general and administrative expenses (1,647,562) (1,468,159) (3,240,063) (2,738,867)

Share-based payments (Note 12) (104,719) (148,101) (242,918) (212,258)
Income (loss) from operations 2,320,219 (1,619,135) 5,120,767 653,594

Accretion of provisions (Note 8) (44,841) (44,930) (87,342) (90,205)

Interest on long-term loans payable (Note 9) (171,911) (154,174) (330,915) (325,582)
Interest and other expenses (21,180) (308,627) (58,936) (124,246)
Fair value adjustment on derivative instruments, net (Note 11) 419,813 (698,942) 351,567 (212,764)
Realized gain (loss) on derivative instruments, net (Note 11) (406,288) 793,195 (622,745) 793,195
Foreign exchange gain (loss) (328,700) 317,605 3,072 387,289
Income (loss) before income taxes 1,767,112 (1,715,008) 4,375,468 1,081,281
Current income tax (expense) recovery (Note 10) (536,448) (748,221) (1,949,886) (2,060,428)
Deferred income tax (expense) recovery (Note 10) (614,817) 1,049,827 (520,719) 1,532,505
Net income (loss) and comprehensive income (loss) $ 615,847 $ (1,413,402) $ 1,904,863 $ 553,358

Net income (loss) and comprehensive income (loss) attributable to:

Equity holders of Atico Mining Corporation $ 488,902 $ (1,290,274) $ 1,600,851 $ 434,404
Non-controlling interests (Note 14) 126,945 (123,128) 304,012 118,954
$ 615,847 $ (1,413,402) $ 1,904,863 $ 553,358

Basic earnings (loss) per share (Note 13) $ 0.00 $ (0.01) $ 0.02 $ 0.00
Diluted earnings (loss) per share (Note 13) $ 0.00 $ (0.01) $ 0.02 $ 0.00

Weighted average no. of shares outstanding - basic (Note 13) 98,408,170 97,591,571 98,219,841 97,591,571
Weighted average no. of shares outstanding - diluted (Note 13) 98,641,133 97,591,571 98,485,278 97,591,571

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

-4-
ATICO MINING CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)

Three months Three months Six months Six months

ended ended ended ended
June 30 June 30 June 30 June 30
2017 2016 2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 615,847 $ (1,413,402) $ 1,904,863 $ 553,358
Items not affecting cash and cash equivalents:
Depletion and amortization 3,148,727 1,425,731 7,219,683 5,189,811
Share-based payments 14,367 148,101 152,566 212,258
Accretion of provisions 37,629 44,930 87,342 90,205
Interest income (259) (340) (410) (1,253)
Interest expense 213,322 192,173 444,942 410,889
Fair value adjustment on derivative instruments, net (419,813) 698,942 (351,567) 212,764
Realized loss on derivative instruments, net 406,288 - 622,745 -
Deferred income tax recovery 614,817 (1,049,827) 520,719 (1,532,505)
Unrealized foreign exchange effect 9,117 (16,765) 3,511 59,953
4,640,042 29,543 10,604,394 5,195,480
Changes in non-cash operating working capital items (Note 15) (498,587) 780,182 (2,746,202) (1,968,581)
Net cash provided by operating activities 4,141,455 809,725 7,858,192 3,226,899

CASH FLOWS FROM INVESTING ACTIVITIES

Expenditures on mineral property, plant and equipment (2,880,819) (1,863,410) (4,985,662) (3,524,233)
Interest received 259 340 410 1,253
Settlements of derivative instruments (406,288) - (622,745) -
Net cash used in investing activities (3,286,848) (1,863,070) (5,607,997) (3,522,980)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayments of long-term loans payable (862,662) (593,329) (1,738,937) (1,622,719)
Payments on finance lease obligations (41,626) (45,000) (84,807) (90,000)
Credit facilities withdrawn (repaid), net 2,750,000 5,203,489 553,198 3,808,956
Interest paid (41,040) (37,999) (155,679) (77,930)
Shares issued 142,072 - 332,554 -
Net cash provided by (used in) financing activities 1,946,744 4,527,161 (1,093,671) 2,018,307

Effect of exchange rate changes on cash and cash equivalents 2,865 101 4,346 7,812

Change in cash and cash equivalents 2,804,216 3,473,917 1,160,870 1,730,038

Cash and cash equivalents, beginning of period 1,966,614 2,050,740 3,617,172 3,794,619

Cash and cash equivalents, end of period $ 4,770,830 $ 5,524,657 $ 4,778,042 $ 5,524,657

Supplemental disclosure with respect to cash flows (Note 15)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

-5-
ATICO MINING CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(Expressed in United States Dollars)

Foreign
Share-based currency Contributed Non-
Number Share payments translation surplus controlling Total
of shares capital reserve reserve reserve interests Deficit equity
Balance as at December 31, 2016 97,836,970 $ 37,853,750 $ 2,864,031 $ (715,935) $ 344,280 $ 3,704,589 $ (4,334,425) $ 39,716,290
Exercise of stock options 664,367 526,847 (194,293) - - - - 332,554
Share-based payments - - 135,626 - - - - 135,626
Dividend declared by subsidiary - - - - - (371,467) - (371,467)
Net income and comprehensive income - - - - - 304,012 1,600,851 1,904,863
Balance as at June 30, 2017 98,501,337 $ 38,380,597 $ 2,805,364 $ (715,935) $ 344,280 $ 3,637,134 $ (2,733,574) $ 41,717,866

Balance as at December 31, 2015 97,591,571 $ 37,751,114 $ 2,518,471 $ (715,935) $ - $ 3,805,214 $ (4,514,864) $ 38,844,000
Share-based payments - - 212,258 - - - - 212,258
Dividend declared by subsidiary - - - - - (137,013) - (137,013)
Net income and comprehensive income - - - - - 118,954 434,404 553,358
Balance as at June 30, 2016 97,591,571 37,751,114 $ 2,730,729 $ (715,935) $ - $ 3,787,155 $ (4,080,460) $ 39,472,603

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

-6-
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

1. NATURE OF OPERATIONS

Atico Mining Corporation (the Company) was incorporated in the Yukon Territories on April 15, 2010 and continued
to British Columbia on October 4, 2011. The Company is engaged in copper-gold mining and related activities
including exploration, development, extraction, and processing in Colombia and the acquisition, exploration and
development of copper and gold projects in Latin America. The Companys common shares are listed on the TSX
Venture Exchange (TSX-V) under the symbol ATY. The address of its head office is Suite 501 - 543 Granville
Street, Vancouver, British Columbia, Canada.

On November 22 2013, the Company acquired 90% of the issued and outstanding common shares of Minera El
Roble S.A. (MINER), the owner of the El Roble mining property (El Roble), an operating copper-gold mine in
Colombia.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation and measurement

These condensed consolidated interim financial statements have been prepared using accounting policies consistent
with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC), including
International Accounting Standard 34, Interim Financial Reporting (IAS 34). These condensed consolidated interim
financial statements have been prepared on a historical cost basis. In addition, these condensed consolidated interim
financial statements have been prepared using the accrual basis of accounting except for cash flow information.

These condensed interim consolidated financial statements follow the same accounting policies and methods of
application as our most recent annual financial statements, except as described below, and should be read in
conjunction with the annual audited financial statements of the Company for the year ended December 31, 2016.

Accounting pronouncements not yet effective

The following standards and pronouncements have been issued by the IASB and have not yet been adopted by the
Company. The Company is currently evaluating the impact the new and amended standards are expected to have on
its consolidated financial statements.

IFRS 15 Revenue from Contracts with Customers (IFRS 15) deals with revenue recognition and establishes
principles for reporting useful information to users of financial statements about the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entitys contracts with customers. Revenue is recognized when
a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from
the good or service. The standard is effective for annual periods beginning on or after January 1, 2018 and earlier
application is permitted.

IFRS 9 Financial Instruments (IFRS 9) addresses the classification, measurement and recognition of financial
assets and financial liabilities. IFRS 9 requires financial assets to be classified into two measurement categories:
those measured at fair value and those measured at amortized cost. The determination is made at initial recognition.
The classification depends on the entitys business model for managing its financial instruments and the contractual
cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 Financial
Instruments: Recognition and Measurement requirements. The main change is that, in cases where the fair value
option is taken for financial liabilities, the part of a fair value change due to an entitys own credit risk is recorded in
other comprehensive income rather than in net earnings, unless this creates an accounting mismatch. IFRS 9 is
effective for periods beginning on or after January 1, 2018.

IFRS 16 Leases was issued in January 2016 (effective January 1, 2019) and provides a single lessee accounting
model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or
the underlying asset has a low value.

-7-
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

3. RECEIVABLES AND OTHER ASSETS

June 30 December 31
2017 2016
Trade receivables $ 5,125,390 $ 1,298,125
GST/VAT and other taxes recoverable 3,739,020 3,403,260
Other receivables 305,734 93,206
$ 9,170,144 $ 4,794,591

As at June 30, 2017 and December 31, 2016, the Company did not have any trade receivables that were past due.
The Companys allowance for doubtful accounts at June 30, 2017 and December 31, 2016 was $Nil.

The Company has a concentrate off-take agreement where the customer will purchase 100% of the metals
concentrate produced at the El Roble mining property. This current agreement has an expected settlement period of
four months. The aging analysis of the Companys trade receivables from sales of metals concentrate is as follows:

June 30 December 31
2017 2016
0 to 30 days $ 2,857,563 $ 186,157
31 to 60 days 901,613 -
61 to 90 days - 408,973
91 to 120 days 1,366,214 702,995
Over 120 days - -
$ 5,125,390 $ 1,298,125

4. INVENTORIES

June 30 December 31
2017 2016
Consumable parts and supplies $ 2,526,300 $ 2,276,191
Ore stockpiles 791,401 357,575
Metals concentrate 2,532,403 6,126,086
$ 5,850,104 $ 8,759,852

For the three and six months ended June 30, 2017, the Company recorded cost of sales of $10,001,505 and
$22,683,775 (2016 - $3,661,942 and $12,176,890) where direct mining and processing costs include salaries and
other short-term benefits, contractor charges, energy, consumables, and other production-related costs.

-8-
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

5. MINERAL PROPERTY, PLANT AND EQUIPMENT

Plant, Land and

building, non-depletable
Mineral machinery, and exploration
property equipment property Total
As at December 31, 2016, net $ 48,651,889 $ 10,603,097 $ 1,284,012 $ 60,538,998
Changes for the period:
Additions 1,924,867 2,999,004 1,011,299 5,935,170
Depletion and amortization (3,107,886) (3,191,004) - (6,298,889)
As at June 30, 2017, net $ 47,468,870 $ 10,411,097 $ 2,295,311 $ 60,175,279

As at December 31, 2016

Historical cost $ 65,782,799 $ 21,109,036 $ 1,284,012 $ 88,175,847
Accumulated amortization (17,130,910) (10,505,939) - (27,636,849)
Net carrying amount $ 48,651,889 $ 10,603,097 $ 1,284,012 $ 60,538,998

As at June 30, 2017

Historical cost $ 67,707,666 $ 23,449,558 $ 2,295,311 $ 93,452,535
Accumulated amortization (20,238,796) (13,038,461) - (33,277,256)
Net carrying amount $ 47,468,870 $ 10,411,097 $ 2,295,311 $ 60,175,279

During the six months ended June 30, 2017, the Company derecognized its fully amortized plant, building,
machinery, and equipment with an aggregate gross historical cost of $658,482 (2016 - $Nil).

As at June 30, 2017, the Company held leased assets with net carrying amount of $40,814 (December 31, 2016 -
$163,255) financed by finance leases (Note 8).

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

June 30 December 31
2017 2016
Trade and other payables $ 4,906,063 $ 4,604,226
Payables to non-controlling interest of MINER 458,593 88,407
Payroll and related liabilities 679,936 816,940
Accrued liabilities 2,135,757 970,070
$ 8,180,349 $ 6,479,643

7. CREDIT FACILITIES

June 30 December 31
2017 2016
Bank credit facilities $ 5,900,000 $ 2,014,000
Advances on concentrate inventories - 3,332,802
Accrued interest expense 2,226 43,878
$ 5,902,226 $ 5,390,680

-9-
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

7. CREDIT FACILITIES (contd)

Bank credit facilities

The Company has arrangements for unsecured credit facilities with a number of Colombian banks, including Banco
Davivienda S.A. (Davivienda), Banco de Occidente, Bancolombia, and Banco Popular, of up to Colombian pesos
(COP) $25,580,000,000 (approximately $8,500,000). As at June 30, 2017, the Company owed balances on these
facilities, which carry annual interest based on the LIBOR plus 1.00% to 2.00% (December 31, 2016 - LIBOR plus
1.90% to 2.20%) and terms up to six months from the date of drawn down.

Advance on concentrate inventories

As part of the off-take agreement with the customer, the Company has been provided an inventory facility. Any
amount advanced by the customer carries annual interest based on the London Inter-bank Offered Rates (LIBOR)
plus 4.50% from the date of advance until the date of the payment on provisional invoice has been made.

8. PROVISIONS

Decommissioning Finance Share-based

and restoration lease payment
provision obligations provision Total
As at December 31, 2016 $ 1,568,548 $ 275,789 $ 180,203 $ 2,024,540
Accretion expense 73,747 13,595 - 87,342
Payments during the period - (84,807) (90,352) (175,159)
Share-based payments (Note 12) - - 107,292 107,292
Currency translation adjustments - 15,511 - 15,511
As at June 30, 2017 1,642,295 220,088 197,143 2,059,526
Less: current portion - 220,088 39,639 259,727
Long term portion $ 1,642,295 $ - $ 157,504 $ 1,799,799

Decommissioning and restoration provision

A decommissioning and restoration provision has been recognized in respect of the mining operations at the El Roble
mining property, including associated infrastructure and buildings. The estimated undiscounted cash flows required to
satisfy the decommissioning and restoration provision as at June 30, 2017 were $3,150,000 (December 31, 2016 -
$3,150,000), which were adjusted for inflation and uncertainty of the cash flows and then discounted using a risk
adjusted pre-tax discount rate of 9.75% (December 31, 2016 - 9.75%).

In view of the uncertainties concerning environmental reclamation, the ultimate cost of reclamation activities could
differ materially from the estimated amount recorded. The estimate of the Companys decommissioning and
restoration liability relating to the El Roble mining property is subject to change based on amendments to laws and
regulations and as new information regarding the Companys operations becomes available. Future changes, if any,
to the estimated liability as a result of amended requirements, laws, regulations, operating assumptions, estimated
timing and amount of obligations may be significant and would be recognized prospectively as a change in
accounting estimate. Any such change would result in an increase or decrease to the liability and a corresponding
increase or decrease to the mineral property, plant and equipment balance.

- 10 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

8. PROVISIONS (contd)

Finance lease obligations

During the year ended December 31, 2014, the Company acquired certain mining equipment that are classified as
finance leases, with the applicable costs included in mineral property, plant and equipment (Note 5). Future minimum
lease payments as at June 30, 2017 and December 31, 2016 are as follows:

June 30 December 31
2017 2016
2017 $ 222,014 $ 334,732
Total minimum lease payments 222,014 334,732
Future finance charges at implicit rate (1,977) (14,105)
Currency translation adjustments 51 (44,838)
Balance of unpaid obligations $ 220,088 $ 275,789

Share-based payment provision

The Company recognized share-based payment provision for restricted share units (RSUs) granted, refer to Note
12 for details on the RSUs plans.

9. LONG-TERM LOANS PAYABLE

Colombian
Trafigura Sandvik banks Total
As at December 31, 2016 $ 5,167,937 $ 440,684 $ - $ 5,608,621
Additions to principal - - 949,509 949,509
Repayments - principal (1,300,000) (127,938) (32,656) (1,460,594)
Repayments - interest (242,899) (15,570) (19,874) (278,343)
Interest expense 289,122 13,957 27,836 330,915
Currency translation adjustments - 30,518 (38,173) (7,655)
As at June 30, 2017 3,914,160 341,651 886,642 5,142,453
Less: current portion 1,964,160 274,164 263,315 2,501,639
Long term portion $ 1,950,000 $ 67,487 $ 623,327 $ 2,640,814

Trafigura Pte. Ltd.

In November 2013, the Company entered into a senior secured repayable debt facility for $8,000,000 with Trafigura
Pte. Ltd. ("Trafigura"). The funds drawn have a repayment term of 48 months, with stated annual interest of LIBOR
plus 9%, payable quarterly, subject to a 12-month grace period with the first repayment date being February 22,
2015. There was a $125,000 financing fee paid to Trafigura when the funds were drawn. The facility is secured by the
Companys shareholding in MINER. Under the effective interest method, this loan has an effective annual interest
rate of 11.73%. In February 2015, the repayment schedule was amended where the Company has the option to
postpone each of the first four principal repayments for twelve months; at which, the Company elected to postpone
two of its principal repayments. In August 2016, the repayment schedule was extended up to 2019 where each
principal payment amount has been reduced and an accelerated payment component, dependent on metal prices,
has been added. As at June 30, 2017, the Company was in compliance with all qualitative and quantitative
covenants.

- 11 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

9. LONG-TERM LOANS PAYABLE (contd)

Sandvik

During the year ended December 31, 2015, the Company entered into loan agreements for an aggregate of 708,900
in connection with purchase financing of equipment from Sandvik AB (Sandvik). Under the terms of the
arrangement, the Company makes quarterly installments totaling 59,075, along with applicable interest at a stated
annual interest rate of 7.5% over three years.

Colombian banks

During the six months ended June 30, 2017, the Company entered into a loan agreement for COP$1,639,931,100
with Davivienda. Under the terms of the arrangement, the Company is expected to make quarterly installments
totaling COP$129,023,637 (or approximately $45,000), which includes applicable interest at an annual interest rate of
prime plus 4.75% over four years.

During the six months ended June 30, 2017, the Company entered into a loan agreement for COP$1,113,146,608
with Bancolombia. Under the terms of the arrangement, the Company is expected to make monthly installments
totaling COP$23,346,580 (or approximately $8,000), which includes applicable interest at an annual interest rate of
9.68% over five years.

The schedule of maturities on outstanding loan obligations is as follows:

June 30
2017
2017 $ 1,196,614
2018 2,387,452
2019 1,156,295
2020 230,076
2021 and beyond 172,016
Total $ 5,142,453

10. INCOME TAXES

Income tax expense differs from the amount that would result from applying Canadian income tax rates to earnings
before income taxes. These differences result from the following items:

June 30 June 30
Six months ended 2017 2016
Income before income taxes $ 4,375,468 $ 1,081,281
Canadian federal and provincial income tax rates 26.00% 26.00%
Expected income tax expense at statutory income tax rate 1,149,581 281,133
Difference between Canadian and foreign tax rates 443,597 195,824
Change in effective tax rate (435,856) -
Permanent differences and other adjustments 1,134,742 174,457
Changes in unrecognized deferred tax assets 302,233 301,517
Impact of foreign exchange on deferred tax assets and liabilities (123,692) (425,008)
Total income tax expense $ 2,470,605 $ 527,923

Current income tax expense $ 1,949,886 $ 2,060,428

Deferred income tax expense (recovery) 520,719 (1,532,505)

- 12 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

11. OTHER FINANCIAL ASSETS AND LIABILITIES

Commodity Commodity Currency

derivative forward sale forward
arrangements arrangements arrangements Total
As at December 31, 2016 $ (598,298) $ - $ 65,448 $ (532,850)
Fair value adjustments during the period (298,479) - (31,202) (329,681)
Reversal of previous fair value adjustments 746,696 - (65,448) 681,248
As at June 30, 2017 $ (150,081) $ - $ (31,202) $ (181,283)

Other financial assets $ - $ - $ - $ -

Other financial liabilities $ (150,081) $ - $ (31,202) $ (181,283)

The Company enters into derivative instruments from time to time in the normal course of business in order to
manage its exposure to fluctuations in copper price, gold price, and the Colombian peso/US dollar exchange rate.
The Company does not enter into or trade derivative instruments for speculative purposes.

The Company has not applied hedge accounting to these derivative transactions. Derivative instruments are marked-
to-market at the end of each reporting period based on the terms of the arrangements and the expected settlement
prices and/or rates. Any resulting mark-to-market adjustment has been recognized in other financial assets or
liabilities on the consolidated statement of financial position. During the six months ended June 30, 2017, the
Company recognized a positive net fair value adjustment of $351,567 (2016 - negative $212,764) on its derivative
instruments, and a net realized loss of $622,745 (2016 - gain of $793,195) on the settlement of its derivative
instruments.

Commodity derivative arrangements

As at June 30, 2017, the Company had a zero-cost commodity derivative arrangement with Auramet International
LLC. This arrangement is net settled based on the difference between the market price and the contracted settlement
price, where the Company receives proceeds if the contracted settlement price is above the market price. The details
of the arrangement are as follows:

Settlement
Settlement date Quantity price
Copper
Jul 05, 2017 300 MT $ 5,450
Copper quantities in metric tonnes ("MT")

Commodity forward sale arrangements

The Company had entered into zero-cost commodity forward sale arrangements with its customer, whereby both
parties agreed to preset the prices on metals shipped and to be settled at the end of the settlement period. As at June
30, 2017, the Company did not have any outstanding arrangements for metals to be shipped and provisionally
invoiced.

- 13 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

11. OTHER FINANCIAL ASSETS AND LIABILITIES

Currency forward arrangements

The Company had entered into zero-cost non-deliverable currency forward arrangements with Bancolombia and
Davivenda between the US dollar and Colombian peso. Each arrangement was net settled based on the difference
between the market exchange rate and the contracted settlement rate, where the Company received proceeds if the
contracted settlement rate is above the market exchange rate to purchase Colombian peso. As at June 30, 2017, the
summarized details of the arrangement are as follows:

Average
settlement
Settlement period Amount rate
July 2017 $ 1,400,000 3,013.05
August 2017 1,520,000 3,025.04
September 2017 1,220,000 3,034.90
October 2017 1,380,000 3,056.06
November 2017 $ 1,400,000 3,066.68

12. SHARE CAPITAL

Authorized share capital consists of an unlimited number of common shares without par value.

Issued share capital

During the six months ended June 30, 2017, the Company issued 664,367 (2016 - Nil) common shares for exercise
of stock options.

Stock options

The continuity of stock options for the six months ended June 30, 2017 is as follows:

Exercise Balance Balance

Price December 31 Expired/ June 30
Expiry Date (CAD) 2016 Granted Exercised Cancelled 2017
Apr 24, 2017 $ 0.55 250,000 - (250,000) - -
May 16, 2017 0.51 130,000 - (90,000) (40,000) -
Feb 04, 2018 0.98 1,805,000 - - - 1,805,000
Mar 01, 2018 0.98 340,000 - - (300,000) 40,000
July 11, 2019 0.79 2,870,671 - (321,367) (18,000) 2,531,304
Apr 12, 2021 0.345 2,245,184 - (3,000) - 2,242,184
Apr 17, 2022 0.77 - 841,119 - - 841,119
Outstanding 7,640,855 841,119 (664,367) (358,000) 7,459,607
Weighted average
exercise price $ 0.70 $ 0.77 $ 0.66 $ 0.92 $ 0.70

Exercisable 4,130,019 3,559,089

As at June 30, 2017, the weighted average remaining life of the stock options outstanding is 2.52 (December 31,
2016 - 2.53) years with vesting periods ranging from 0 to 36 months.

- 14 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

12. SHARE CAPITAL (contd)

Restricted share units

The continuity of RSUs for the six months ended June 30, 2017 is as follows:

Balance Balance
December 31 Expired/ June 30
Expiry Date 2016 Granted Vested Cancelled 2017
Apr 12, 2019 771,429 - (154,286) - 617,143
Apr 17, 2020 - 147,362 - - 147,362
Outstanding 771,429 147,362 (154,286) - 764,505

As at June 30, 2017, the weighted average remaining life of the stock options outstanding is 1.98 (December 31,
2016 - 2.28) years with vesting periods ranging from 12 to 36 months.

Share-based payments and share-based payment reserve

In accordance with the vesting terms of stock options and RSUs granted, the Company recorded a charge to share-
based payments expense of $242,918 (2016 - $212,258) with the offsetting credit to share-based payments reserve
and provision of $135,626 and $107,292 (2016 - $212,258 and $Nil) respectively during the six months ended June
30, 2017.

13. EARNINGS (LOSS) PER SHARE

Earnings (loss) per share, calculated on a basic and diluted basis, is as follows:

Three months Three months Six months Six months

ended ended ended ended
June 30 June 30 June 30 June 30
2017 2016 2017 2016
Net income (loss) $ 488,902 $ (1,290,274) $ 1,600,851 $ 434,404
Weighted average number of
common shares outstanding - basic 98,408,170 97,591,571 98,219,841 97,591,571
Dilutive effect of stock options outstanding 232,962 - 265,437 -
Weighted average number of
common shares outstanding - diluted 98,641,133 97,591,571 98,485,278 97,591,571

Basic earnings (loss) per share $ 0.00 $ (0.01) $ 0.02 $ 0.00

Diluted earnings (loss) per share $ 0.00 $ (0.01) $ 0.02 $ 0.00
Attributable to equity holders of the Company

- 15 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

14. RELATED PARTY BALANCES AND TRANSACTIONS

MINER non-controlling interests

MINER is a 90%-owned subsidiary of the Company and is 10% owned by a minority shareholders group. On the
acquisition date, the Company allocated $3,508,384 to the non-controlling interests based on the fair value of assets
acquired and liabilities assumed on the acquisition of MINER. For the six months ended June 30, 2017, income of
$304,012 (2016 - $118,954) has been allocated to the non-controlling interests of MINER. Summarized financial
information about MINER is as follows:

June 30 June 30
Six months ended 2017 2016
Current assets $ 21,903,321 $ 16,055,258
Non-current assets 56,526,617 57,736,040

Current liabilities 15,639,239 11,499,644

Non-current liabilities 20,365,595 19,837,593

Net income and total comprehensive income $ 3,040,120 $ 1,189,540

Compensation of key management personnel

The aggregate value of transactions and outstanding balances relating to key management personnel were as
follows:

Salary Share-based
Six months ended June 30, 2017 or fees payments Total
Management $ 290,500 $ 200,203 $ 490,703
Outside directors 62,519 78,072 140,591
Seabord Services Corp. 91,513 - 91,513
$ 444,532 $ 278,275 $ 722,807

Salary Share-based
Six months ended June 30, 2016 or fees payments Total
Management $ 406,500 $ 126,302 $ 532,802
Outside directors 111,600 69,849 181,449
Seabord Services Corp. 91,695 - 91,695
$ 609,795 $ 196,151 $ 805,946

As at June 30, 2017, the Company had $393,200 (December 31, 2016 - $763,250) due to directors and management
related to remuneration and performance-based remuneration, which have been included in accounts payable and
accrued liabilities.

Seabord Services Corp., (Seabord) is a management services company controlled by a director. Seabord provides
the Chief Financial Officer, Corporate Secretary, accounting staff, administration staff and office space to the
Company pursuant to a service agreement. The Chief Financial Officer and Corporate Secretary are employees of
Seabord and are not paid directly by the Company. In addition to the service agreement with Seabord, the Company
entered into rental agreements with companies with common directors for office space for $2,200 and $800 per
month, respectively.

- 16 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

15. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

Components of cash and cash equivalents

The short-term deposits are used as collateral for the Companys credit cards.

June 30 December 31
2017 2016
Cash $ 4,691,792 $ 3,530,922
Short-term deposits 86,250 86,250
$ 4,778,042 $ 3,617,172

Changes in non-cash working capital

The changes in non-cash working capital items are comprised as follows:

Three months Three months Six months Six months

ended ended ended ended
June 30 June 30 June 30 June 30
2017 2016 2017 2016
Receivables $ 584,810 $ 3,669,363 $ (4,375,553) $ (223,357)
Inventories (135,742) (3,167,220) 1,988,954 (2,792,699)
Prepaids and deposits 81,076 (284,037) (1,191,317) (620,972)
Accounts payable and accrued liabilities 882,232 909,439 1,329,239 664,863
Taxes payable (1,910,963) (347,363) (497,525) 1,003,584
Net change in non-cash working capital $ (498,587) $ 780,182 $ (2,746,202) $ (1,968,581)

Significant non-cash investing and financing activities

During the six months ended June 30, 2017, the Company:

a) reallocated mineral property depletion of $1,137,595 to the carrying amount of ore stockpile and metals
concentrate inventories produced but not yet sold at the reporting date;
b) reallocated mineral property depletion of $2,058,389 previously recognized in carrying amounts of metals
concentrate inventories sold to cost of sales; and
c) recorded mineral property, plant and equipment of $949,509 in long-term loans payable.

During the six months ended June 30, 2016, the Company:

a) reallocated mineral property depletion of $2,086,794 to the carrying amount of ore stockpile and metals
concentrate inventories produced but not yet sold at the reporting date;
b) reallocated mineral property depletion of $1,368,834 previously recognized in carrying amounts of metals
concentrate inventories sold to cost of sales;
c) recorded advances to suppliers of $33,099 in accounts payable and accrued liabilities;
d) recorded adjustment to non-controlling interest of $137,013 in accounts payable and accrued liabilities; and
e) recorded adjustment to mineral property, plant and equipment of $145,888 in decommissioning and
restoration provision.

- 17 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

16. CAPITAL MANAGEMENT

The Companys objectives when managing capital are to provide shareholder returns through maximization of the
profitable growth of the business and to maintain a degree of financial flexibility relevant to the underlying operating
and metal price risks while safeguarding the Companys ability to continue as a going concern.

The capital of the Company consists of share capital and available credit facilities. The Board of Directors does not
establish a quantitative return on capital criteria for management. The Company manages the capital structure and
makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying
assets. The Company may issue new shares in order to meet its financial obligations. The management of the
Company believes that the capital resources of the Company as at June 30, 2017 are sufficient for its present needs
for at least the next twelve months. The Company is not subject to externally imposed capital requirements.

17. FINANCIAL INSTRUMENTS

The Company classified its financial instruments as follows:

June 30 December 31
2017 2016
Financial assets
Loans and receivables:
Cash and cash equivalents $ 4,778,042 $ 3,617,172
Receivables 305,734 93,206
Fair value through profit or loss:
Receivables from provisional sales 5,125,390 1,298,125
Other financial assets - 151,933
$ 10,209,166 $ 5,160,436
Financial liabilities
Other financial liabilities:
Accounts payable and accrued liabilities $ 8,180,349 $ 6,479,643
Credit facilities 5,902,226 5,390,680
Finance lease obligations 220,088 275,789
Long-term loans payable 5,142,453 5,608,621
Fair value through profit or loss:
Other financial liabilities 181,283 684,783
Share-based payment provision 197,143 180,203
$ 19,823,542 $ 18,619,719

Fair value

Financial instruments recorded at fair value on the consolidated statement of financial position are classified using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:

a) Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;
b) Level 2 - Inputs other than quoted prices that are observable for assets or liabilities, either directly or
indirectly; and
c) Level 3 - Inputs for assets and liabilities that are not based on observable market data.

- 18 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

17. FINANCIAL INSTRUMENTS (contd)

Fair value (contd)

The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial
instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in
measuring fair value.

As at June 30, 2017, the Companys financial instruments measured at fair value are as follows:

Financial assets and liabilities Level 1 Level 2 Level 3 Total

Trade receivable from provisional sales $ - $ 5,125,390 $ - $ 5,125,390
Other financial liabilities $ - $ 181,283 $ - $ 181,283
Share-based payment provision $ 197,143 $ - $ - $ 197,143

The carrying value of cash and cash equivalents, receivables (excluding trade receivable from provisional sales of
metals concentrate), accounts payable and accrued liabilities, advance on concentrate inventories, and bank credit
facilities approximated their fair value because of the short-term nature of these instruments. The fair values of the
Companys long-term loans payable and finance lease obligations are approximated by their carrying values as their
interest rates are comparable to current interest rates.

Trade receivable from provisional sales of metals concentrate includes provisional pricing, and final price and assay
adjustments. Derivative instruments are forward arrangements that were valued using pricing models, which require a
variety of inputs, such as expected copper prices, gold prices, and foreign exchange rates. The trade receivable from
sales of metals concentrate and derivative instruments are valued using observable market commodity prices and
thereby classified within Level 2 of the fair value hierarchy.

The Companys activities expose it to financial risks of varying degrees of significance, which could affect its ability to
achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company
is exposed are metal price risk, credit risk, liquidity risk, currency risk, and interest rate risk. The Board of Directors
has overall responsibility for the establishment and oversight of the Companys risk management framework and
reviews the Companys policies on an ongoing basis.

Metal price risk

The Company is exposed to metals price risk. Based on concentrate shipped and provisionally invoiced during the six
months ended June 30, 2017, a 1% change in copper and gold prices would result in an increase/decrease of
approximately $188,000 and $138,000 in the Companys pre-tax income or loss on an annualized basis, respectively.

Credit risk

The carrying amount of financial assets recorded in the financial statements represents the Companys maximum
exposure to credit risk. The Company believes it is not exposed to significant credit risk and overall, the Companys
credit risk has not declined significantly from the prior year.

Liquidity risk

The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account
its anticipated cash flows from operations, its holdings of cash, and its committed liabilities. The maturities of the
Companys noncurrent liabilities are disclosed in Notes 8 and 9. All current liabilities are settled within one year.

- 19 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

17. FINANCIAL INSTRUMENTS (contd)

Currency risk

As at June 30, 2017, the Company is exposed to currency risk through the following monetary assets and liabilities:

Colombian
Canadian Peruvian pesos
dollars nuevo soles Euros (000's)
Cash and cash equivalents $ 140,635 $ 85,906 $ - $ 336,788
Receivables 13,234 1,622 - 12,206,240
Accounts payable and accrued liabilities (117,472) (221,768) - (16,389,557)
Taxes payable - - - (4,773,357)
Finance lease obligations - - (192,656) -
Long-term loans payable - - (299,067) (1,574,147)
Net exposure 36,397 (134,240) (491,723) (10,194,033)

US dollar equivalent $ 28,037 $ (41,813) $ (561,739) $ (3,369,037)

Based on the above net exposure, as at June 30, 2017, and assuming that all other variables remain constant, a 1%
depreciation or appreciation of the US dollar against the Canadian dollar, Peruvian nuevo sol, Euro, and Colombian
peso would result in an increase/decrease of approximately $39,000 in the Companys pre-tax income or loss.

Interest rate risk

As at June 30, 2017, a 10% change in LIBOR rates would result in an increase/decrease of approximately $138,000
in the Companys pre-tax income or loss on an annualized basis based on the debt and credit facilities used.

18. CONTINGENCY

During the year ended December 31, 2015, the Companys operating subsidiary, MINER, received notice of claim
from the mining authority in Colombia requesting payment of royalties related to past copper production. The mining
authority is basing its claim on the current mining law, which is subsequent to the prevailing mining law under which
MINER executed the contract regulating its royalty obligations. The current mining law in Colombia explicitly states
that it does not affect contracts executed prior to this law entering into force. Therefore, the Company and its legal
counsels position is that MINER has complied rigorously with royalty payments due and called for under the current
contractual obligations. The claim of approximately $2,000,000 is at an administrative level and the Company will
attempt to favorably resolve the claim at this level, and if necessary, will vigorously defend itself should legal action
be required. As at June 30, 2017, no provisions have been recorded for any potential liability arising from this matter.

While the outcome of this matter is uncertain, based upon the information currently available, the Company does not
believe that this matter in aggregate will have a material adverse effect on its consolidated financial position or results
of operations. In the event that managements estimate of the future resolution of this matter changes, the Company
will recognize the effects of the changes in its consolidated financial statements on the date such changes occur.

- 20 -
ATICO MINING CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Expressed in United States Dollars)
FOR THE SIX MONTHS ENDED JUNE 30, 2017

19. SEGMENTED INFORMATION

The Company is engaged in mining, exploration, and development of mineral properties, and has an operating mine
in Colombia. The Company operates in one industry and has one reportable segment, which is reviewed by the chief
operating decision maker and identified based on quantitative factors whereby its revenues or assets comprise 10%
or more of the total revenues or assets of the Company. As at June 30, 2017, the Company only has a single off-take
agreement for metals concentrate produced at the El Roble mining property.

Geographic segment details

As at June 30, 2017 Canada Colombia Other Total

Cash and other current assets $ 235,877 $ 22,084,624 $ 205,211 $ 22,525,712
Mineral property, plant and equipment - 60,137,435 37,844 60,175,279
Total assets $ 235,877 $ 82,222,059 $ 243,055 $ 82,700,991

As at December 31, 2016 Canada Colombia Other Total

Cash and other current assets $ 236,879 $ 17,986,327 $ 636,447 $ 18,859,653
Mineral property, plant and equipment - 60,493,059 45,939 60,538,998
Total assets $ 236,879 $ 78,479,386 $ 682,386 $ 79,398,651

- 21 -