2023 Annual General Meeting Statement

Atalaya Mining PLC

28 June 2023

 

Atalaya Mining Plc

1 Lampousas Street

1095 Nicosia, Cyprus

Tel: [phone]

Fax: [phone]

www.atalayamining.com

28 June 2023

Atalaya Mining Plc.

("Atalaya" or "the Company")

2023 Annual General Meeting Statement

Atalaya Mining plc ("Atalaya" or the "Company") (AIM: ATYM) is hosting its 2023 Annual General Meeting ("AGM") today at 11.00 a.m. BST at Hamilton House, 1 Temple Avenue, London, England EC4Y 0HA. At the AGM, Roger Davey, non-executive Chairman of the Company, will make the following statement:

"Dear Shareholder,

The year of 2022 presented a number of external challenges, although these were very different from those experienced in 2020 and 2021, where Covid-19 affected everyone.  We started 2022 with a positive outlook, with the pandemic in rapid decline and economies all over the world picking up speed.  This feeling of euphoria quickly subsided with the events in the Ukraine in late February 2022, which immediately impacted the European and global energy markets. Severe spikes in natural gas prices in Europe pushed electricity prices in Spain to over €500/MWh in March 2022 and similar levels in late August and early September 2022, with average realised prices for Q3 2022 reaching around €290/MWh.

The year was dominated by geopolitical and macroeconomic factors, but for the most part, our operations performed well.  The Company continued its good track record, with copper production totalling 52,300 tonnes in 2022, compared to 56,100 in 2021.  The slight reduction in production was a result of lower grades and lower throughput.  The plant performed solidly throughout the year despite the negative impact of the Q1 2022 transport sector strike and related stoppage.

The average process plant feed grade of 0.40% copper and the process recovery rate of approximately 86% were consistent with reserve estimates and budgeted figures.  Cash Costs and All-in Sustaining Costs for 2022 of $3.16/lb and $3.37/lb respectively, were on the upper end of the guidance provided for the year.  This was mainly due to the increase in electricity costs and other supplies and lower production volumes, partially offset by the weaker Euro.  The strong operating performance shown in the latter part of 2022 has continued into 2023, with the plant maintaining throughput above nameplate capacity.  Accordingly, copper production guidance for 2023 remains as previously announced, in the range of 53,000 to 55,000 tonnes.

Despite the solid operational performance during 2022, revenues for 2022 were €361.8 million, compared to €405.7 million in 2021.  The reduction was due to lower production volumes and a lower average realised copper price.  EBITDA for 2022 was €55.3 million, compared to €199.1 million in 2021.  The EBITDA was significantly affected by the inflationary environment globally and mainly due to the increase in electricity costs during 2022 of around €64 million.  On a more positive note, as a result of the electricity price so far in 2023 and the benefits from two key company specific electricity procurement initiatives, we are optimistic on the outlook for overall electricity costs for 2023 and beyond, with the relevant knock-on positive effect on the profitability.  The long-term power purchase agreement ("PPA") took effect at the start of 2023.  The 10-year agreement will provide the Company with approximately 31% of its current electricity requirements at a fixed rate that is over 75% lower than the estimated average realised electricity price in 2022, and also below the rates realised in 2021.  The Company continues to advance construction of its 50 MW solar plant at Riotinto, which is expected to provide approximately 22% of its current electricity needs when fully operational in late 2023. Combined, 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 continues to evaluate additional renewable power initiatives that could deliver further low cost and carbon-free electricity for its operations at Riotinto, including wind turbines.

For additional growth prospects the Company is currently focusing on five main projects.  The Company remains fully committed to the development of the Touro copper project in Galicia, in the north of Spain.  Running parallel with the permitting process, the Company is focused on a number of initiatives relating to securing the social licence, including engaging with the many stakeholders in the region in advance of its plans to submit a new improved project design. In the south, at Proyecto Masa Valverde, exploration work is ongoing, with three core rigs continuing to be active, with encouraging drilling results.  Drill target definition continues to progress and the first drill testing is planned at Riotinto East.  Two short drilling programmes were completed at the Hinchona and Chaparral copper-gold projects at Proyecto Ossa Morena.  Finally, in February 2023, the Company announced the completion of a new preliminary economic assessment for Proyecto Riotinto that contemplates a new integrated mine plan for Cerro Colorado, San Dionisio and San Antonio, which has the potential to increase copper production by increasing the blended head grade processed at Riotinto's 15 Mtpa plant.

The Company continues to advance construction of the E-LIX Phase I plant. In recent weeks, activities have included the completion of most civil and structural work, with equipment now being assembled. Commissioning of the plant is 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.

Our balance sheet remains strong and this allows the Company to continue to invest in growth and cost reduction initiatives, including E-LIX, higher-grade orebodies and exploration across our portfolio. In addition, our financial strength means we are well positioned to develop Touro should approvals be granted, which could become a new source of copper production in Europe.

I would like to thank Harry Liu, who stepped down from our board following a long period of service, and also welcome Kate Harcourt to the Company's board. Kate has immense expertise in sustainability and we  look forward to publishing our second sustainability report for 2022.

I would like to take this opportunity to express our appreciation for the continued dedication and commitment of the management and staff.  At the same time, I would like to thank not only the board members for their continued support, guidance, and close involvement with the Company activities, but also our valued shareholders for their continued and appreciated support."

Contacts:

SEC Newgate UK	Elisabeth Cowell / 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 centralised 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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