Q2 2023 Operations Update

Atalaya Mining PLC

12 July 2023

 

Atalaya Mining Plc

1 Lampousas Street

1095 Nicosia, Cyprus

Tel: [phone]

Fax: [phone]

www.atalayamining.com

12 July 2023

Atalaya Mining Plc.

("Atalaya" or "the Company")

Q2 2023 Operations Update

Strong quarter of production supports confidence in full year guidance

Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce its operations update for the second quarter of 2023 ("Q2 2023" or the "Period").

Proyecto Riotinto Operating Highlights

		Q2		Q1	Full Year
		2023(1)	2022	2023	2023 Guidance
Ore mined	(M tonnes)	3.9	3.6	3.4	17.1
Waste mined	(M tonnes)	8.6	6.7	6.5	24.1
Ore milled	(M tonnes)	4.1	4.0	3.7	15.3 - 15.8
Cu grade	(%)	0.40	0.39	0.38	0.40 - 0.42
Cu recovery	(%)	87.18	86.44	86.88	85 - 86(2)
Cu production	(tonnes)	14,212	13,386	12,139	53,000 - 55,000

(1)   Figures for Q2 2023 are preliminary and final figures will be released with Q2 2023 financial results.

(2)   Represents updated guidance range for copper recovery.

Mining

Ore mined was 3.9 million tonnes in Q2 2023 (Q2 2022: 3.6 million tonnes), compared with 3.4 million tonnes in Q1 2023.

Waste mined was 8.6 million tonnes in Q2 2023 (Q2 2022: 6.7 million tonnes), compared with 6.5 million tonnes in Q1 2023. Waste mining during the Period was consistent with budget and includes increased waste stripping at Cerro Colorado in anticipation of the potential start of mining activities at San Dionisio in late 2023.  

Processing

The plant processed ore of 4.1 million tonnes during Q2 2023 (Q2 2022: 4.0 million tonnes), compared with 3.7 million tonnes in Q1 2023. Throughput rates during the Period reflected strong mill performance following the prior rescheduling of plant maintenance activities into Q1 2023.

Copper grade was 0.40% in Q2 2023 (Q2 2022: 0.39%), compared with 0.38% in Q1 2023.

Copper recoveries in Q2 2023 were 87.18% (Q2 2022: 86.44%), compared with 86.88% in Q1 2023, as a result of favourable ore characteristics during the Period.

Production

Copper production was 14,212 tonnes in Q2 2023 (Q2 2022: 13,386 tonnes), compared with 12,139 tonnes in Q1 2023. Production during the Period benefited from strong throughput and copper recoveries.

On-site copper concentrate inventories at 30 June 2023 were approximately 7,291 tonnes (31 March 2023: 1,564 tonnes). All concentrate in stock at the beginning of the Period was delivered to the port at Huelva.

Copper contained in concentrates sold was 12,858 tonnes in Q2 2023 (Q2 2022: 13,872 tonnes), compared with 12,501 tonnes in Q1 2023.

Select Financial Highlights

Realised Copper Price

The average realised copper price (excluding QPs closed during the Period) was $3.81/lb in Q2 2023 (Q2 2022: $4.28/lb), compared with $4.00/lb in Q1 2023. The average spot copper price was $3.85/lb in Q2 2023.

Provisional Revenue Adjustments

For Q2 2023, settlement adjustments (for QPs closed during the Period) and fair value adjustments (for open QPs based on copper forward curve prices as at 30 June 2023) were negative €0.7 million.

Balance Sheet

The Company's balance sheet remains strong with consolidated cash and cash equivalents of €112.6 million at 30 June 2023.

Net of current and non-current borrowings of €43.9 million, net cash was €68.8 million as at 30 June 2023, compared with €53.1 million as at 31 December 2022.

Electricity Prices

Estimated Realised Prices

Market electricity prices in Q2 2023 continued to moderate. When including the contribution from the Company's 10-year power purchase agreement ("PPA"), realised electricity prices in Q2 2023 were around 60% lower than the Company's average realised electricity price in 2022.

Renewable Energy Projects

Construction of the 50 MW solar plant at Riotinto continues to advance, with start-up expected in late 2023 or early 2024 following some minor delays. When fully operational, the facility is expected to provide approximately 22% of Riotinto's current electricity needs. Together, the 50 MW solar plant and long-term PPA will provide over 50% of the Company's current electricity requirements at a rate below historical prices in Spain.

The Company is also progressing studies associated with the potential installation of wind turbines at Riotinto, which could supply additional low cost and carbon-free electricity and contribute to the Company's decarbonisation objectives.

2023 Guidance

The Company remains on track to achieve the full year 2023 guidance, including copper production guidance of 53,000 to 55,000 tonnes of copper at cash costs of $2.80 to $3.00/lb copper payable and AISC of $3.00 to $3.20/lb copper payable.

Asset Portfolio Update

Proyecto Riotinto

In April 2023, the Company was granted a substantial modification to the existing Unified Environmental Authorisation (or in Spanish, Autorización Ambiental Unificada ("AAU")) for Proyecto Riotinto by the Junta de Andalucía. This allows for the expansion of tailings capacity at Riotinto and represents an important step towards developing regional deposits such as San Dionisio and San Antonio.

During the Period, the Company continued permitting activities associated with San Dionisio, which represents a key component of the integrated mine plan that was outlined in the recent Riotinto PEA.

E-LIX Phase I Plant

Construction activities continue at the E-LIX Phase I plant, with commissioning expected in H2 2023.

Once operational, the E-LIX plant is expected to produce high purity copper or zinc metals on site, allowing the Company to potentially achieve higher metal recoveries from complex polymetallic ores, lower transportation and concentrate treatment charges and a reduced carbon footprint.

Riotinto District - Proyecto Masa Valverde ("PMV")

In March 2023, the Company announced that PMV was granted the AAU by the Junta de Andalucía, following an application process that was initiated by the Company in December 2021. The AAU is an integrated process that combines the Environmental Impact Assessment and other authorisations and specifies requirements to avoid, prevent and minimise a project's impacts on the environment and the cultural heritage of the area. Various evaluation workstreams continue in advance of filing for the exploitation permit.

Three core rigs are active and focused on resource definition drilling at the Campanario Trend, step-out drilling around the new discovery made at the Mojarra Trend and first drill testing coincident fix loop electromagnetic ("FLEM") and airborne gravity gradiometry ("AGG") anomalies.

Proyecto Touro

Atalaya remains fully committed to the development of the Touro copper project in Galicia, which could become a new source of copper production for Europe.

In March 2023, the European Union announced the Critical Raw Materials Act, which seeks to "address the EU's dependency on imported critical raw materials by diversifying and securing a domestic and sustainable supply of critical raw materials". Copper was added to the list of "Strategic Raw Materials" as a result of the challenges associated with substituting copper metal in electrical applications.

Running parallel with the Touro permitting process, the Company continues to focus on numerous initiatives related to securing the social licence to operate, including engaging with the many stakeholders in the region to provide detailed information on the new improved project design. Positive and favourable feedback from numerous meetings with municipalities, farmers and fishermen associations and other industries indicate meaningful support towards the development of a new and modern mining project.

The Company continues to restore rivers around Touro and is operating its water treatment plant, which is addressing the legacy issues associated with acid water runoff from the historical mine, which closed in 1987. The construction of the treatment plant was contemplated in the original project proposal, but Atalaya volunteered to fix the historical acid water issues prior to the new Environmental Impact Assessment ("EIA") in order to demonstrate its operating philosophy and the benefits of modern operating systems. The field work carried out by Atalaya has resulted in an immediate and visible improvement of the water systems surrounding the project.

Atalaya continues to be confident that its approach to Touro, which includes fully plastic lined thickened tailings with zero discharge, is consistent with international best practice and will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to the development of the project.

Proyecto Ossa Morena

Drilling continued to progress with one rig at the Guijarro-Chaparral gold-copper project, located in the central part of the district. Drilling at the flagship Alconchel-Pallares copper-gold project is expected to commence during Q3 2023.

Proyecto Riotinto East

Drill testing of selected coincident FLEM and AGG anomalies are in progress with one rig.

Corporate Matters

Following the voluntary delisting of the Company's ordinary shares from the Toronto Stock Exchange ("TSX"), an application was made to cease to be a reporting issuer in Canada. The request was granted during the Period, and as a result, the Company will no longer be required to file financial statements and other continuous disclosure documents in Canada.

The Company's disclosure obligations under the AIM Rules for Companies, as published by London Stock Exchange plc, are unchanged.

Alberto Lavandeira, CEO, commented:

"We are pleased to report a strong quarter of production, thanks to a solid performance at the plant including good throughput and recoveries. We remain confident in our full year operational guidance.

Although the copper price has softened in recent months, the overall outlook is far better than many market participants had predicted for 2023. Once again, supply disruptions in many key copper producing regions have improved the near-term market balance.

In the medium term, we remain confident on the outlook for copper, given its critical role in the energy transition and the increasing challenges faced by the industry to deliver new supply. At Atalaya, we are fortunate to control a substantial resource base and a large-scale processing facility, which will allow us to grow production for Europe and other global markets."

Contacts:

SEC Newgate UK	Elisabeth Cowell / Tom Carnegie / Matthew Elliott	+ 44 20 3757 6882
4C Communications	Carina Corbett	[phone]
Canaccord Genuity (NOMAD and Joint Broker)	Henry Fitzgerald-O'Connor / James Asensio / Thomas Diehl	[phone]
BMO Capital Markets (Joint Broker)	Tom Rider / Andrew Cameron	[phone]
Peel Hunt LLP (Joint Broker)	Ross Allister / David McKeown	[phone]

About Atalaya Mining Plc

Atalaya is an AIM-listed mining and development group which produces copper concentrates and silver by-product at its wholly owned Proyecto Riotinto site in southwest Spain. Atalaya's current operations include the Cerro Colorado open pit mine and a modern 15 Mtpa processing plant, which has the potential to become a central processing hub for ore sourced from its wholly owned regional projects around Riotinto that include Proyecto Masa Valverde and Proyecto Riotinto East. In addition, the Group has a phased earn-in agreement for up to 80% ownership of Proyecto Touro, a brownfield copper project in the northwest of Spain, as well as a 99.9% interest in Proyecto Ossa Morena. For further information, visit www.atalayamining.com

 

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