16 November 2023

Atalaya Mining Plc.

("Atalaya" and/or the "Company")

Q3 and YTD 2023 Financial Results

Progress at operations and projects support the planned move to LSE Main Market

 

Atalaya Mining Plc (AIM: ATYM) is pleased to announce its unaudited third quarter and nine month financial results for the period ended 30 September 2023 ("Q3 2023" and "YTD 2023" respectively) together with its unaudited condensed consolidated financial statements.

Highlights

·     Copper production of 12.5 kt in Q3 2023 and 38.9 kt YTD 2023

·     AISC of $3.24/lb Cu in Q3 2023 and $3.07/lb YTD 2023

·     FY2023 outlook: expect to achieve lower end of copper production guidance range of 53-54 kt and AISC within $3.00-3.20/lb range previously announced

·     EBITDA of €19.1 million in Q3 2023 and €59.2 million YTD 2023

·     Strong net cash position of €66.8 million following recent dividend payment and investments in the 50 MW solar plant, E-LIX Phase I and exploration

·    Subsequent to Q3 2023, announced the intention to apply for admission to the premium listing segment of the Official List and trading on the LSE's Main Market, and a proposed re-domiciliation from Cyprus to Spain in order to open the possibility for future FTSE UK Index Series inclusion once Main Market listed

Q3 and YTD 2023 Financial Results Summary

Period ended 30 September	Unit	Q3 2023	Q3 2022	YTD 2023	YTD 2022
Revenues from operations	€k	85,361	82,284	254,755	261,953
Operating costs	€k	(66,260)	(86,550)	(195,543)	(224,838)
EBITDA	€k	19,101	(4,266)	59,212	37,115
Profit/(loss) for the period	€k	11,140	(7,219)	31,448	22,887
Basic earnings/(loss) per share	€ cents/share	8.3	(4.7)	23.2	17.4
Cash flows from operating activities	€k	27,778	(3,810)	59,028	17,572
Cash flows used in investing activities	€k	(18,864)	(8,681)	(35,604)	(36,004)
Cash flows from financing activities	€k	(3,202)	(12,647)	(31,569)	2,816
Net Cash position (1)	€k	66,764	55,598	66,764	55,598
Working capital surplus	€k	76,917	106,817	76,917	106,817
Average realised copper price (excluding QPs)	US$/lb	3.77	3.52	3.86	4.06
Cu concentrate produced	tonnes	59,306	63,400	184,907	180,635
Cu production	tonnes	12,541	13,453	38,892	38,300
Cash costs	US$/lb payable	2.82	3.34	2.76	3.26
All-In Sustaining Cost ('AISC')	US$/lb payable	3.24	3.49	3.07	3.47

(1)      Includes restricted cash and bank borrowings at 30 September 2023 and 2022.

Alberto Lavandeira, CEO, commented:

"Atalaya continued to demonstrate good results across its key operational and financial metrics during Q3. Our copper production is expected to achieve the lower end of our FY23 guidance and our AISC is tracking in line with expectations, underscoring our commitment to operational efficiency and cost management.

Additionally, our strategic investments in the 50 MW solar plant, E-LIX Phase I, and exploration initiatives not only align with responsible mining practices but also position us for future value creation.

Looking ahead, we have a strong cash position and are excited about our application for admission to the premium listing segment of the London Stock Exchange's Main Market and the proposed re-domiciliation. We believe these measures could broaden the Company's appeal to new institutions at a time when investor interest in copper and the related energy transition thematic continues to accelerate."

Investor Presentation Reminder

Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live presentation relating to the Q3 and YTD 2023 Financial Results via the Investor Meet Company platform at 12:00 GMT today.

To register, please visit the following link and click "Add to Meet" Atalaya via:

https://www.investormeetcompany.com/atalaya-mining-plc/register-investor

Management will also answer questions that have been submitted via the Investor Meet Company dashboard.

Q3 and YTD 2023 Operating Results Summary

Units expressed in accordance with the international system of units (SI)	Unit	Q3 2023	Q3 2022	YTD 2023	YTD 2022
Ore mined	Mt	3,845,806	3,816,688	11,201,824	11,344,206
Waste mined	Mt	9,662,598	5,753,382	24,820,247	19,332,317
Ore processed	Mt	3,850,196	3,923,498	11,651,730	11,451,805
Copper ore grade	%	0.38	0.41	0.38	0.39
Copper concentrate grade	%	21.15	21.22	21.03	21.20
Copper recovery rate	%	87.00	84.62	87.03	85.70
Copper concentrate	tonnes	59,306	63,400	184,907	180,635
Copper contained in concentrate	tonnes	12,541	13,453	38,892	38,300
Payable copper contained in concentrate	tonnes	11,948	12,819	37,043	36,494

Mining

Ore mined was 3.8 million tonnes in Q3 2023 (Q3 2022: 3.8 million tonnes) and 11.2 million tonnes in YTD 2023 (YTD 2022: 11.3 million tonnes).

Waste mined was 9.7 million tonnes in Q3 2023 (Q3 2022: 5.8 million tonnes) and 24.8 million tonnes in YTD 2023 (YTD 2022: 19.3 million tonnes). Waste mining during YTD 2023 was consistent with budget and included 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 3.9 million tonnes of ore in Q3 2023 (Q3 2022: 3.9 million tonnes) and 11.7 million tonnes in YTD 2023 (YTD 2022: 11.5 million tonnes).

Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%) and 0.38% in YTD 2023 (YTD 2022: 0.39%).

Copper recoveries in Q3 2023 were 87.00% (Q3 2022: 84.62%) and 87.03% in YTD 2023 (YTD 2022: 85.7%), as a result of favourable ore characteristics during the 2023 periods.

Production

Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453 tonnes) and 38,892 tonnes in YTD 2023 (YTD 2022: 38,300 tonnes).

On-site copper concentrate inventories at 30 September 2023 were approximately 7,358 tonnes (30 June 2023: 7,291 tonnes). All concentrate in stock at the beginning of the period was delivered to the port at Huelva.

Copper contained in concentrates sold was 12,521 tonnes in Q3 2023 (Q3 2022: 14,040 tonnes) and 37,880 tonnes in YTD 2023 (YTD 2022: 38,296 tonnes).

Cash Costs and AISC Breakdown

$/lb Cu payable	Q3 2023	Q3 2022	YTD 2023	YTD 2022
Mining	0.90	0.75	0.84	0.82
Processing	0.93	1.53	0.90	1.39
Other site operating costs	0.51	0.49	0.52	0.52
Total site operating costs	2.34	2.77	2.26	2.73
By-product credits	(0.09)	(0.07)	(0.09)	(0.08)
Freight, treatment charges and other offsite costs	0.57	0.64	0.59	0.61
Total offsite costs	0.48	0.57	0.50	0.53
Cash costs	2.82	3.34	2.76	3.26
Cash costs	2.82	3.34	2.76	3.26
Corporate costs	0.08	0.05	0.07	0.08
Sustaining capital (excluding one-off tailings expansion)	0.06	0.06	0.04	0.06
Capitalised stripping costs	0.21	-	0.13	0.01
Other costs	0.07	0.04	0.07	0.05
Total AISC	3.24	3.49	3.07	3.46

Note: Some figures may not add up due to rounding.

Cash costs were $2.82/lb payable copper in Q3 2023 (Q3 2022: $3.34/lb) and $2.76/lb payable copper in YTD 2023 (YTD 2022: $3.26/lb), with the decrease mainly due to lower electricity and offsite costs despite lower production volumes.

AISC were $3.24/lb payable copper in Q3 2023 (Q3 2022: $3.49/lb) and $3.07/lb payable copper in YTD 2023 (YTD 2022: $3.46/lb). The decrease in AISC was driven by the same factors that resulted in lower cash costs, but partly offset by higher capitalised stripping costs. AISC excludes one-off investments in the tailings dam, consistent with prior reporting.

Q3 and YTD 2023 Financial Results Highlights

Income Statement

Revenues were €85.4 million in Q3 2023 (Q3 2022: €82.3 million) and €254.8 million in YTD 2023 (YTD 2022: €262.0 million). For Q3 period, modestly higher revenues were the result of higher realised copper prices partly offset by lower sales volumes, while in the YTD period, lower revenues were mainly the result of lower realised copper prices.

Operating costs were €66.3 million in Q3 2023 (Q3 2022: €86.6 million) and €195.5 million (YTD 2022: €224.8 million). Lower operating costs during the 2023 periods were mainly the result of lower electricity costs, partly offset by higher administrative and expensed exploration costs.

EBITDA was positive €19.1 million in Q3 2023 (Q3 2022: negative €4.3 million) and positive €59.2 million in YTD 2023 (YTD 2022: positive €37.1 million). Higher comparable EBITDA was mainly the result of lower operating costs.

Profit after tax was €11.1 million in Q3 2023 (Q3 2022: €7.2 million loss) or 8.3 cents basic earnings per share (Q3 2022: 4.7 cents loss) and €31.4 million in YTD 2023 (YTD 2022: €22.9 million) or 23.2 cents basic earnings per share (Q3 2022: 17.4 cents).

Cash Flow Statement

Cash flows from operating activities before changes in working capital were €20.7 million in Q3 2023 (Q3 2022: negative €4.2 million) and €27.8 million after working capital changes (Q3 2022: negative €3.8 million). For YTD 2023, cash flows from operating activities before changes in working capital were €59.6 million (YTD 2022: €37.0 million) and €59.0 million after working capital changes (YTD 2022: €17.6 million).

Cash flows used in investing activities were €18.9 million in Q3 2023 (Q3 2022: €8.7 million) and €35.6 million in YTD 2023 (YTD 2022: €36.0 million). Key investments in Q3 2023 included €1.5 million in sustaining capex (Q3 2022: €1.6 million), €5.2 million in capitalised stripping (Q3 2022: nil), €3.4 million to extend the tailings dam (Q3 2022: €3.0 million), €6.3 million for the 50 MW solar plant (Q3 2022: €0.4 million) and €4.5 million for the E-LIX Phase I Plant (Q3 2022: €6.5 million), of which €2.6 million was booked as prepayments for service contract to Lain Technologies Ltd.

Cash flows from financing activities were negative €3.2 million in Q3 2023 (Q3 2022: negative €12.6 million) and negative €31.6 million in YTD 2023 (YTD 2022: positive €2.8 million), as a result of scheduled debt repayments and dividends payments.

Balance Sheet

Consolidated cash and cash equivalents were €119.1 million at 30 September 2023 (31 December 2022: €126.4 million).

Net of current and non-current borrowings of €52.3 million, net cash was €66.8 million as at 30 September 2023, compared to €68.8 million as at 30 June 2023 and €53.1 million as at 31 December 2022.

Inventories of concentrate valued at cost were €8.3 million at 30 June 2023 (31 December 2022: €4.5 million).

As at 30 September 2023, total working capital was €76.9 million, compared to €81.4 million as at 30 June 2023 and €84.0 million as at 31 December 2022.

Electricity Prices

Realised Prices

Market electricity prices in Q3 2023 increased slightly from Q2 2023, in part due to the impact of strikes at LNG export facilities in Australia on European natural gas prices, but remained significantly below 2022 levels. After including the contribution from the Company's 10-year power purchase agreement ("PPA"), realised electricity prices in Q3 2023 were approximately 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. Ramp-up is expected to begin in early January 2024, with full operations expected in the following months. 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 well below historical prices in Spain.

The Company continues to assess 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 expects to achieve copper production at the lower end of its full year guidance range of 53,000 to 54,000 tonnes at cash costs of $2.80 to $3.00/lb copper payable and AISC of $3.00 to $3.20/lb copper payable.

Aggregate expenditures relating to non-sustaining capital investments (such as E-LIX Phase I, the 50 MW solar plant, Riotinto tailings facility expansion) and exploration activities continue to trend in line with prior FY2023 guidance, although the composition is expected to vary including higher investments in the E-LIX Phase I plant.

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. The AAU allows for the expansion of tailings capacity and the mine footprint at Riotinto and represents an important step towards developing regional deposits such as San Dionisio and San Antonio.

The Company is continuing with permitting activities associated with San Dionisio, which represents a key component of the integrated mine plan that was outlined in the recent Riotinto PEA. Preparation of the pit for mining is underway.

E-LIX Phase I Plant

Construction activities continue at the E-LIX Phase I plant, with commissioning expected to begin in December 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 an 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 optimisation workstreams continue.

Three core rigs are active and focused on step out drilling at the Mojarra Trend, drill testing coincident fix loop electromagnetic ("FLEM") and airborne gravity gradiometry ("AGG") anomalies and completing metallurgical and infill drilling at the Masa Valverde deposit. The first phase of resource definition drilling at the Campanario Trend was completed during the Period.

Proyecto Touro

Atalaya remains fully committed to the development of the Touro copper project, which has the potential to provide substantial benefits to Galicia and also support the European Union's critical raw materials mandate.

The Xunta de Galicia has legislation that seeks to promote industry in Galicia by simplifying the approval process. Business initiatives can be classified as priority business initiatives ("IEP") and strategic industrial projects ("Proyecto Industrial Estratégico" or "PIE") which provide a variety of development advantages. The Company believes that Touro fulfils the requirements to be granted the status of a PIE in Galicia.

Touro has the potential to become a new source of copper production for Europe. As such, the project could also be granted "Strategic Project" status by the EU, which can be awarded to projects "based on their contribution to the security of supply of strategic raw materials, their technical feasibility, sustainability and social standards", as part of the Critical Raw Materials Act. Copper was recently added to the list of "Strategic Raw Materials" owing to its importance for strategic sectors and technologies and due to the supply-demand imbalance that is expected in the near future.

Running parallel with the ongoing Touro permitting process, the Company continues to focus on numerous initiatives related to the social licence, including engaging with the many stakeholders in the region to provide detailed information on the new and 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 successfully restore the water quality of the 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 field-work carried out by Atalaya has resulted in an immediate and visible improvement of the water systems surrounding the project, with the progress being recognised by local stakeholders and the media.

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 and the La Hinchona copper-gold project, both in the central part of the district.  One rig is being mobilised to the flagship Alconchel-Pallares copper-gold project.

Proyecto Riotinto East

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

Corporate Activities After the Reporting Period

Corporate Governance Update 

Following the completion of an internal policy review in October 2023, the former Audit & Financial Risk Committee was renamed the Audit Committee. Hussein Barma continues as Chair of the Audit Committee, Neil Gregson continues as a Member and Stephen Scott was appointed as a Member in place of Roger Davey. Mr. Davey continues as Chair of the Board of Directors, a Member of the Physical Risk Committee and a Member of the Sustainability Committee.  

In addition, Neil Gregson was appointed as Senior Independent Director. Mr. Gregson joined the Company's Board of Directors in February 2021 and continues as Chair of the Nomination & Governance Committee, Member of the Audit Committee, Member of the Physical Risk Committee and Chair of the Remuneration Committee.

Intention to Move to the Main Market

On 13 November 2023, the Company announced its intention to apply for the Company's ordinary shares ("Ordinary Shares") to be admitted to the premium listing segment of the Official List maintained by the Financial Conduct Authority ("FCA") ("Official List") and to trading on the London Stock Exchange plc's ("London Stock Exchange") main market for listed securities ("Main Market") (together, "Admission").

Since restarting operations at Proyecto Riotinto in 2016, Atalaya has become a leading European producer of copper, which is a key commodity for economic growth and the energy transition. Atalaya has assembled a portfolio of growth projects across several world-class mineral districts in Spain and maintains a sustainable dividend policy. In order to build on this success, Atalaya's Board of Directors believes that the move to the Main Market would further enhance the Company's corporate profile and broaden its appeal to new institutional investors.

Atalaya does not intend to raise any funds or offer any new securities in connection with Admission or the publication of the related prospectus. The Admission will be effected through an introduction of the Company's existing Ordinary Shares.

Admission is subject to the approval by the FCA of a prospectus and the Ordinary Shares being admitted by the FCA to the premium listing segment of the Official List and by the London Stock Exchange to trading on the Main Market. Subject to the satisfaction of these conditions, Admission is expected to occur before the end of December 2023. Accordingly, the Company has given notice of the intended cancellation of trading of its Ordinary Shares on AIM in accordance with Rule 41 of the AIM Rules for Companies. The Company's listing on AIM is expected to be to be cancelled before the end of December 2023.

Atalaya will make a further announcement on the status of the proposed applications for Admission, together with the timeline for Admission, in due course.

Proposed Re-domiciliation

On 14 November 2023, the Company announced its intention to re-domicile the Company by transferring its registered office from the Republic of Cyprus to the Kingdom of Spain ("Proposed Re-domiciliation").

This change in corporate structure is subject to shareholder approval and regulatory consents. The Company is convening an Extraordinary General Meeting ("EGM") to consider and, if thought advisable, to approve the resolutions which are necessary to approve the Proposed Re-domiciliation. If approved, the Proposed Re-domiciliation is expected to be completed before end of May 2024.

The re-domiciliation is being proposed as the incorporation in Cyprus no longer reflects the Company's geographic and strategic focus, and therefore represents a legacy structure for the Company.

The Proposed Re-domiciliation follows the Company's announcement on 13 November 2023 confirming its intention to move to the Main Market of the London Stock Exchange ("Step-up"). In the event the Step-up occurs, the Proposed Re-domiciliation also opens the possibility for the Company to be eligible for inclusion in the FTSE UK Index Series (subject to other eligibility criteria being satisfied at the time of application), which the Company believes would be in the interest of all its shareholders.

The proposed Re-domiciliation and the Step-up are independent of each other and neither is conditional upon the other occurring.

The EGM will take place on Tuesday, 12 December 2023 at 11:00 am GMT at Hamilton House, 1 Temple Avenue, London EC4Y 0HA to consider the Proposed Re-domiciliation and related matters as a consequence of the Proposed Re-domiciliation.

A circular, incorporating the Notice of EGM and further background and information on the Proposed Re-domiciliation, together with forms of proxy are available on the Company's website at www.atalayamining.com.

Financial Statements

The Unaudited Condensed Consolidated Financial Statements for the three and nine months ended 30 September 2023 are also available on Atalaya's website at www.atalayamining.com.

Contacts:

SEC Newgate UK	Elisabeth Cowell / Tom Carnegie / Matthew Elliott	+ 44 20 3757 6882
4C Communications	Carina Corbett	+44 20 3170 7973
Canaccord Genuity (NOMAD and Joint Broker)	Henry Fitzgerald-O'Connor / James Asensio	+44 20 7523 8000
BMO Capital Markets (Joint Broker)	Tom Rider / Andrew Cameron	+44 20 7236 1010
Peel Hunt LLP (Joint Broker)	Ross Allister / David McKeown	+44 20 7418 8900

 

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

 

 

 

 

 

 

ATALAYA MINING PLC

MANAGEMENT'S REVIEW AND

UNAUDITED INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

30 September 2023

 

 

 

 

Notice to Reader

The accompanying unaudited interim condensed consolidated financial statements of Atalaya Mining Plc have been prepared by and are the responsibility of Atalaya Mining Plc's management.

 

Introduction

This report provides an overview and analysis of the financial results of operations of Atalaya Mining Plc and its subsidiaries ("Atalaya" and/or "Group"), to enable the reader to assess material changes in the financial position between 31 December 2022 and 30 September 2023 and results of operations for the three and nine months ended 30 September 2023 and 2022.

This report has been prepared as of 15 November 2023. The analysis hereby included is intended to supplement and complement the unaudited interim condensed consolidated financial statements and notes thereto ("Financial Statements") as at and for the period ended 30 September 2023. The reader should review the Financial Statements in conjunction with the review of this report and with the audited, consolidated financial statements for the year ended 31 December 2022 and the six month ended 30 June 2023, and the unaudited interim condensed consolidated financial statements for the period ended 30 September 2022. These documents can be found on Atalaya's website at www.atalayamining.com

Atalaya prepares its Annual Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and its Unaudited Interim Condensed Consolidated Financial Statements in accordance with International Accounting Standard 34: Interim Financial Reporting. The currency referred to in this document is the Euro, unless otherwise specified.

 

Forward-looking statements

This report may include certain "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitute forward-looking statements. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based include that all required third party regulatory and governmental approvals will be obtained. Many of these assumptions are based on factors and events that are not within the control of Atalaya and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in this report and other documents filed with the applicable securities regulatory authorities. Although Atalaya has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Atalaya undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

 

1.      Incorporation and description of the Business

Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office is at 1 Lampousa Street, Nicosia, Cyprus.

The Company was listed on AIM of the London Stock Exchange ("AIM") in May 2005 under the symbol ATYM. The Company continued to be listed on AIM as at 30 September 2023.

On 20 February 2023, Atalaya announced that applied a voluntary delisting of its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary shares in the Company continue to trade on the AIM market of the London Stock Exchange under the symbol "ATYM". Delisting from TSX took effect at the close of trading on 20 March 2023. Furthermore, Atalaya ceased to be a reporting issuer in Canadian jurisdictions on 26 June 2023.

Atalaya is a European mining and development company. The company's strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in Spain, elsewhere in Europe and Latin America.

The Group currently owns four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Company has an earn-in agreement to acquire certain investigation permits at Proyecto Riotinto Este.

 

Proyecto Riotinto

The Company owns and operates through a wholly owned subsidiary, "Proyecto Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the Andalusia region of Spain, approximately 65 km northwest of Seville. A brownfield expansion of this mine was completed in 2019 and successfully commissioned by 31 March 2020.

 

Proyecto Touro

The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of Proyecto Touro, as part of an earn-in agreement which will enable the Group to acquire up to 80% of the copper project. Proyecto Touro is located in Galicia, north-west Spain. Proyecto Touro is currently in the permitting process.

In November 2019, Atalaya executed the option to acquire 12.5% of Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro, with known additional mineralisation, which will add to the potential of Proyecto Touro.

 

 

Proyecto Masa Valverde

On 21 October 2020, the Company announced that it entered into a definitive purchase agreement to acquire 100% of the shares of Cambridge Mineria España, S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which fully owns the Masa Valverde polymetallic project located in Huelva (Spain). Proyecto Masa Valverde is currently in the permitting process.

 

Proyecto Riotinto Este

In December 2020, Atalaya entered into a Memorandum of Understanding with a local private Spanish company to acquire a 100% beneficial interest in three investigation permits (known as Peñas Blancas, Cerro Negro and Herreros investigation permits), which cover approximately 12,368 hectares and are located immediately east of Proyecto Riotinto.

 

Proyecto Ossa Morena

In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owns 17 investigation permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa-Morena Metallogenic Belt. In July 2022, Atalaya increased its stake in the company to 99.9% as a result of an equity raise to fund the exploration activities under the investigation permits.

 

2.      Overview of Operational Results

Proyecto Riotinto

The following table presents a summarised statement of operations of Proyecto Riotinto for the three and nine months ended 30 September 2023 and 2022, respectively.

Units expressed in accordance with the international system of units (SI)	Unit	Three month period ended 30 Sep 2023	Three month period ended 30 Sep 2022	Nine month period ended 30 Sep 2023	Nine month period ended 30 Sep 2022
Ore mined	t	3,845,806	3,816,688	11,201,824	11,344,206
Waste mined	t	9,662,598	5,753,382	24,820,247	19,332,317
Ore processed	t	3,850,196	3,923,498	11,651,730	11,451,805
Copper ore grade	%	0.38	0.41	0.38	0.39
Copper concentrate grade	%	21.15	21.22	21.03	21.20
Copper recovery rate	%	87.00	84.62	87.03	85.70
Copper concentrate	t	59,306	63,400	184,907	180,635
Copper contained in concentrate	t	12,541	13,453	38,892	38,300
Payable copper contained in concentrate	t	11,948	12,819	37,043	36,494
Cash cost (*)	US$/lb payable	2.82	3.34	2.76	3.26
All-in sustaining cost (*)	US$/lb payable	3.24	3.49	3.07	3.47

 

(*) Refer Section 5 of this Management Review.

 

There may be slight differences between the numbers in the above table and the figures announced in the quarterly operations updates that are available on Atalaya's website at www.atalayamining.com

 

$/lb Cu payable	Three month period ended 30 Sep 2023	Three month period ended 30 Sep 2022	Nine month period ended 30 Sep 2023	Nine month period ended 30 Sep 2022
Mining	0.90	0.75	0.84	0.82
Processing	0.93	1.53	0.90	1.39
Other site operating costs	0.51	0.49	0.52	0.52
Total site operating costs	2.34	2.77	2.26	2.73
By-product credits	(0.09)	(0.07)	(0.09)	(0.08)
Freight, treatment charges and other offsite costs	0.57	0.64	0.59	0.61
Total offsite costs	0.48	0.57	0.50	0.53
Cash costs	2.82	3.34	2.76	3.26
Cash costs C1	2.82	3.34	2.76	3.26
Corporate costs	0.08	0.05	0.07	0.08
Sustaining capital (excluding one-off tailings expansion)	0.06	0.06	0.04	0.06
Capitalised stripping costs	0.21	-	0.13	0.01
Other costs	0.07	0.04	0.07	0.05
Total AISC	3.24	3.49	3.07	3.46

Note: Some figures may not add up due to rounding.

Three months operational review

The plant processed 3.9 million tonnes of ore during Q3 2023 (Q3 2022: 3.9 million tonnes), compared with 4.1 million tonnes in Q2 2023.

Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%), compared with 0.40% in Q2 2023.

Copper recoveries in Q3 2023 were 87.00% (Q3 2022: 84.62%), compared with 87.18% in Q2 2023, as a result of favourable ore characteristics during the period.

Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453 tonnes), compared with 14,212 tonnes in Q2 2023. Lower grades during the Period were partially offset by recoveries that were higher than budget.

On-site copper concentrate inventories at 30 September 2023 were approximately 7,358 tonnes (30 June 2023: 7,291 tonnes). All concentrate in stock at the beginning of the Period was delivered to the port at Huelva.

Copper contained in concentrates sold was 12,521 tonnes in Q3 2023 (Q3 2022: 14,040 tonnes), compared with 12,858 tonnes in Q2 2023.

 

Nine months operational review

Production of copper contained in concentrate during YTD 2023 was 38,892 tonnes, compared with 38,300 tonnes in the same period of 2022. Payable copper in concentrates was 37,043 tonnes compared with 36,494 tonnes of payable copper in YTD 2022.

Ore mined in YTD 2023 was 11.2 million tonnes compared with 11.3 million tonnes during YTD 2022. Ore processed was 11.7 million tonnes versus 11.5 million tonnes in YTD 2022.

Ore grade during YTD 2023 was 0.38% Cu compared with 0.39% Cu in YTD 2022. Copper recovery was 87.03% versus 85.70% in YTD 2022. Concentrate production amounted to 184,907 tonnes above YTD 2022 production of 180,635 tonnes.

 

2.      Outlook

The forward-looking information contained in this section is subject to the risk factors and assumptions contained in the cautionary statement on forward-looking statements included in the Basis of Reporting. The Company is aware that the inflationary pressure on the goods and services required for its business and the geopolitical developments and its impact on energy prices may still have further effects or impact how the Company can manage it operations and is accordingly keeping its guidance under regular review. Should the Company consider the current guidance no longer achievable, then the Company will provide a further update.

 

Operational guidance

Guidance for Proyecto Riotinto is as follows.

 

	Unit	Guidance 2023
Ore mined	million tonnes	~15
Waste mined	million tonnes	~30
Ore processed	million tonnes	15.3 - 15.8
Copper ore grade	%	0.39 - 0.41
Copper recovery rate	%	86 - 87
Contained copper	tonnes	53,000-54,000
Cash costs	$/lb payable	2.80 - 3.00
All-in sustaining cost	$/lb payable	3.00 - 3.20

 

Full year copper production is expected to be at the lower end of the production guidance range of 53,000 to 54,000 tonnes.

Inflationary pressures continue to impact the global mining industry. The prices of many key inputs, including diesel, tyres, explosives, grinding media and lime, increased materially in 2022 as a result of higher global energy prices and logistics constraints. Since then, prices have stabilised for certain items.

The cash cost guidance range for 2023 remains at $2.80 to $3.00/lb copper payable and the AISC guidance range remains at $3.00 to $3.20/lb copper payable. Market electricity prices for YTD 2023 have been consistent with expectations.

In addition, aggregate expenditures relating to non-sustaining capital investments (such as E-LIX Phase I, the 50 MW solar plant, Riotinto tailings facility expansion) and exploration activities are trending in line with FY2023 guidance, although the composition is expected to vary slightly including modestly higher investments in the E-LIX Phase I plant.

3.      Overview of the Financial Results

The following table presents summarised consolidated income statements for the three and nine months ended 30 September 2023, with comparatives for the three and nine months ended 30 September 2022, respectively.

 

(Euro 000's)	Three month period ended 30 Sep 2023	Three month period ended 30 Sep 2022	Nine month period ended 30 Sep 2023	Nine month period ended 30 Sep 2022
Revenues	85,361	82,284	254,755	261,953
Costs of sales	(62,459)	(84,768)	(182,252)	(217,757)
Administrative and other expenses	(2,383)	(905)	(8,028)	(5,356)
Exploration expenses	(1,554)	(92)	(5,156)	(456)
Care and maintenance expenditure	(499)	(789)	(1,185)	(1,559)
Other income	635	4	1,078	290
EBITDA	19,101	(4,266)	59,212	37,115
Depreciation/amortisation	(8,992)	(9,039)	(27,165)	(25,344)
Net foreign exchange gain	705	5,633	760	15,727
Net finance (cost)/ income	(143)	(510)	2,493	(1,451)
Tax	469	963	(3,852)	(3,160)
Profit/ (loss) for the period	11,140	(7,219)	31,448	22,887

 

Three months financial review

Revenues for the three-month period ended 30 September 2023 amounted to €85.4 million (Q3 2022: €82.3 million). Increase revenues in comparison to the same quarter of the previous year were mainly attributable to higher realised prices with decreased volumes of concentrate sold.

Realised prices excluding QPs were US$3.77/lb copper during Q3 2023 compared with US$3.52/lb copper in Q3 2022. The realised price during the quarter, including QPs, was approximately US$3.81/lb.

Cost of sales for the three-month period ended 30 September 2023 amounted to €62.5 million, compared with €84.8 million in Q3 2022. Unit operating costs in Q3 2023 were lower than in Q3 2022.

Cash costs of US$2.82/lb payable copper during Q3 2023 compared with US$3.34/lb payable copper in the same period last year. Lower cash costs were primarily attributed to a significant reduction in the cost of electricity (approx. €18.2 million lower) and other supply-related costs, which also included lower freight prices. AISC for Q3 2023, excluding one-off investments in the tailings dam, were US$3.24/lb payable copper compared with US$3.49/lb payable copper in Q3 2022.

Sustaining capex for Q3 2023 amounted to €1.5 million compared with €1.6 million in Q3 2022. Sustaining capex mainly related to continuous enhancements in the processing systems of the plant. In addition, the Company invested €3.4 million in the project to increase the tailings dam during Q3 2023 (Q3 2022: €3.0 million). Stripping costs capitalised during Q3 2023 amounted to €5.2 million (Q3 2022: €nil).

Capex associated with the construction of the 50 MW solar plant amounted to €6.3 million in Q3 2023, while investments in the E-LIX Phase I plant totalled €4.5 million, of which €2.6 million was booked as prepayments for service contract to Lain Technologies Ltd.

Administrative and other expenses amounted to €2.4 million (Q3 2022: €0.9 million) and include non-operating costs of the Cyprus office, corporate legal and consultancy costs, on-going listing costs, officers and directors' emoluments, and salaries and related costs of the corporate office.

Exploration costs on Atalaya's project portfolio for the three-month period ended 30 September 2023 amounted to €1.6 million compared to €0.1 million in Q3 2022 mainly as a result of costs incurred during the period in Proyecto Masa Valverde.

EBITDA for the three months ended 30 September 2023 amounted to €19.1 million compared with Q3 2022 negative of €4.3 million.

The main item below the EBITDA line is depreciation and amortisation of €9.0 million (Q3 2022: €9.0 million). In Q3 2023, net financing costs amounted to a negative €0.1 million (compared to €0.5 million in Q3 2022).

 

Nine months financial review

Revenues for the nine-month period ended 30 September 2023 amounted to €254.8 million (YTD 2022: €262.0 million).

Copper concentrate production during the nine-month period ended 30 September 2023 was 184,907 tonnes (YTD 2022: 180,635 tonnes) with 181,078 tonnes of copper concentrates sold in the period (YTD 2022: 181,541 tonnes). Higher production levels in YTD 2023 were mainly the result of robust throughput. Inventories of concentrates as at the reporting date were 7,358 tonnes (31 Dec 2022: 3,529 tonnes).

Realised copper prices, excluding QPs, for YTD 2023 were US$3.86/lb copper compared with US$4.06/lb copper in the same period of 2022. Concentrates were sold under offtake agreements for the production not committed. The Company did not enter into any hedging agreements in 2023.

Cost of sales for the nine-month period ended 30 September 2023 amounted to €182.3 million, compared with €217.8 million in YTD 2022. Lower operating costs in 2023 were due to a reduction in input costs compared with the 2022 period, where the high cost of electricity, diesel and other supplies were the result of inflation and the geopolitical situation.

Cash costs of US$2.76/lb payable copper during YTD 2023 compare with US$3.26/lb payable copper in the same period last year. The reduction in cash costs can be mainly attributed to a significant reduction in the cost of electricity (approx. €52.3 million lower) and other supplies, including freight prices. AISC excluding investment in the tailings dam in the nine month period were US$3.07/lb payable copper compared with US$3.47/lb payable copper in YTD 2022. The decrease is mainly due to the lower cash costs, although partly offset by higher capitalised stripping costs.

Sustaining capex for the nine-month period ended 30 September 2023 amounted to €2.9 million, compared with €4.5 million in the same period the previous year. Sustaining capex related to enhancements in plant processing systems. In addition, the Company invested €10.3 million in the project to extend the tailings dam, compared with €9.4 million in 2022.

Capex associated with the construction of the 50 MW solar plant amounted to €10.7 million in YTD 2023, while investments in the E-LIX Phase I plant totalled €12.9 million, of which €7.5 million was booked as prepayments for service contract to Lain Technologies Ltd.

Corporate costs for the first nine-month period ended September 2023 were €8.0 million, compared with €5.4 million in YTD 2022. Corporate costs mainly include the Company's overhead expenses.

Exploration costs related to Atalaya's project portfolio for the nine-month period ended 30 September 2023 and amounted to €5.2 million, compared with €0.5 million, plus €2.2 million capitalised as permits in Proyecto Masa Valverde, in YTD 2022.

EBITDA for the nine months ended 30 September 2023 amounted to €59.2 million, compared with €37.1 million in YTD 2022.

Depreciation and amortisation amounted to €27.2 million for the nine-month period ended 30 September 2023 (YTD 2022: €25.3 million).

Net foreign exchange gains amounted to €0.8 million in YTD 2023 (€15.7 million in YTD 2022).

Net finance costs for YTD 2023 amounted to positive €2.5 million (YTD 2022 negative €1.5 million), this increase is mainly attributed to the interest received of €3.5 million as a result of the agreement reached with Astor on 17 May 2023.

 

Copper prices

The average realised copper price (excluding QPs) increased by 7.1% to US$3.77/lb in Q3 2023, from US$3.52/lb in Q3 2022.

The average prices of copper for the three and nine months ended 30 September 2023 and 2022 are summarised below:

 

$/lb	Three month period ended 30 Sep 2023	Three month period ended 30 Sep 2022	Nine month period ended 30 Sep 2023	Nine month period ended 30 Sep 2022
Realised copper price (excluding QPs)	3.77	3.52	3.86	4.06
Market copper price per lb (period average)	3.79	3.51	3.90	4.12

 

Realised copper prices for the reporting period noted above have been calculated using payable copper and excluding both provisional invoices and final settlements of quotation periods ("QPs") together. The realised price during Q3 2023, including the QP, was approximately $3.81/lb.

 

4.      Non-GAAP Measures

Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost per pound of payable copper", "All-In Sustaining Costs" ("AISC") "realised prices" and "Net Cash/Debt" in this report. Non-IFRS measures do not have any standardised meaning prescribed under IFRS, and therefore they may not be comparable to similar measures presented by other companies. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for indicators prepared in accordance with IFRS.

EBITDA includes gross sales net of penalties and discounts and all operating costs, excluding finance, tax, impairment, depreciation and amortisation expenses.

Cash Cost per pound of payable copper includes cash operating costs, including treatment and refining charges ("TC/RC"), freight and distribution costs net of by-product credits. Cash Cost per pound of payable copper is consistent with the widely accepted industry standard established by Wood Mackenzie and is also known as the C1 cash cost.

AISC per pound of payable copper includes C1 Cash Costs plus royalties and agency fees, expenditures on rehabilitation, capitalised stripping costs, exploration and geology costs, corporate costs and recurring sustaining capital expenditures but excludes one-off sustaining capital projects, such as the tailings dam project.

Realised price per pound of payable copper is the value of the copper payable included in the concentrate produced including the discounts and other features governed by the offtake agreements of the Group and all discounts or premiums provided in commodity hedge agreements with financial institutions if any, expressed in USD per pound of payable copper. Realised prices do not include period end mark to market adjustments in respect of provisional pricing. Realised price is consistent with the widely accepted industry standard definition.

 

5.      Liquidity and Capital Resources

Atalaya monitors factors that could impact its liquidity as part of Atalaya's overall capital management strategy. Factors that are monitored include, but are not limited to, the market price of copper, foreign currency rates, production levels, operating costs, capital and administrative costs.

The following is a summary of Atalaya's cash position and cash flows as at 30 September 2023 and 31 December 2022.

 

Liquidity information

⁽¹⁾           Includes borrowings

 

Unrestricted cash and cash equivalents (which include cash at both Group level and Operation level) as at 30 September 2023 decreased to €119.1 million from €126.5 million at 31 December 2022. The decrease in cash balances is the result of net cash flow generated in the period and payment of debt to fund development of the 50 MW solar plant and other facilities. Restricted cash at 31 December 2022 amounted to €0.3 million held in escrow, which represented funds utilized by the Company to cover possible remaining costs due to Astor following litigation during 2022. However, due to the settlement reached with Astor on 17 May 2023 whereby Astor agreed to repay €3.5 million of interest previously paid to it to finalise the litigation, the previously restricted cash has now been released and reversed.

Between 31 December 2022 and 30 September 2023, borrowings have exhibited a notable reduction of €21.1 million. This decline is primarily attributed to repayments made across various fronts, encompassing the financing of the solar plant facility, debt associated with operational facilities, and the Astor facility. The company's proactive stance in managing its balance sheet has been instrumental in achieving this significant reduction in the borrowing balance. This development underscores enhanced financial stewardship and fortified the company's financial position.

As of 30 September 2023, Atalaya reported a working capital surplus of €76.9 million, compared with a working capital surplus of €84.0 million at 31 December 2022. The main liability of the working capital is trade payables related to Proyecto Riotinto contractors and, to a lesser extent, short-term loans following the settlement of credit facilities during Q3 2023.

The decrease in working capital resulted from higher inventory levels and lower payable balances.

 

Overview of the Group's cash flows

 

(Euro 000's)	Three month period ended 30 Sept 2023	Three month period ended 30 Sept 2022	Nine month period ended 30 Sept 2023	Nine month period ended 30 Sept 2022
Cash flows from/ (used in) from operating activities	27,778	(3,810)	59,028	17,572
Cash flows used in investing activities	(18,864)	(8,681)	(35,604)	(36,004)
Cash flows (used in)/ from financing activities	(3,202)	(12,647)	(31,569)	2,816
Net decrease in cash and cash equivalents	5,712	(25,138)	(8,145)	(15,616)
Net foreign exchange differences	705	5,633	760	15,727
Total net cash flow for the period	6,417	(19,505)	(7,385)	111

 

Three months cash flows review

Cash and cash equivalents increased by €6.4 million during the three months ended 30 September 2023. This was due to the net results of cash from operating activities amounting to €27.8 million, the cash used in investing activities amounting to €18.9 million, the cash used in financing activities totalling €3.2 million and net foreign exchange differences of €0.7 million.

Cash generated from operating activities before working capital changes was €20.7 million. Atalaya increased its trade receivables in the period by €5.9 million, decreased its inventory levels by €0.6 million and increased its trade payables by €13.2 million.

Investment activities during the quarter consumed €18.9 million, relating mainly to the 50 MW solar plant construction, tailings dam project, E-LIX project and continuous enhancements in the processing systems of the plant.

Financing activities during the quarter decreased by €3.2 million primarily due to the dividends paid.

 

Nine months cash flows review

Cash and cash equivalents decreased by €7.4 million during the nine months ended 30 September 2023. This was due to cash from operating activities amounting to €59.0 million, cash used in investing activities amounting to €35.6 million, cash used in financing activities amounting to €31.6 million and net foreign exchange differences of €0.7 million.

Cash generated from operating activities before working capital changes was €59.6 million. Atalaya decreased its trade payables in the period by €7.5 million, decreased its inventory levels by €0.7 million and decreased its trade receivable balances by €11.4 million.

Throughout the period, investment activities amounted to €35.6 million, with the majority of funds directed towards the construction of the 50 MW solar plant, the tailings dam project, the E-LIX project, and ongoing enhancements in the plant's processing systems.

Financing activities during the nine-month period ended 30 September 2023 decreased by €31.6 million driven by the repayment of unsecured credit facilities and dividends paid.

 

Foreign exchange

Foreign exchange rate movements can have a significant effect on Atalaya's operations, financial position and results. Atalaya's sales are denominated in U.S. dollars ("USD"), while Atalaya's operating expenses, income taxes and other expenses are mainly denominated in Euros ("EUR") which is the functional currency of the Group, and to a much lesser extent in British Pounds ("GBP").

Accordingly, fluctuations in the exchange rates can potentially impact the results of operations and carrying value of assets and liabilities on the balance sheet.

During the three and nine months ended 30 September 2023, Atalaya recognised a foreign exchange profit of €0.8 million and €0.7 million, respectively. Foreign exchange profits mainly related to changes in the period in EUR and USD conversion rates, as all sales are cashed and occasionally held in USD.

The following table summarises the movement in key currencies versus the EUR:

 

 

6.   Sustainability

Corporate Social Responsibility

The third quarter of the year marks further progress from Atalaya and its wholly owned Fundación Atalaya Riotinto as they continue their efforts to fulfil their social responsibilities.

 

In this context, neighbouring municipalities have just renewed leadership after municipal elections. During this quarter the company and its Foundation are in conversations with the new administrations to develop new partnership agreements that need to be signed. The agreements are designed to secure funding for collaborative initiatives aimed at addressing social, environmental, and infrastructure challenges. During this quarter, in Minas de Riotinto, the Foundation has contributed with a programme to refurbish a number of pedestrian pathways in the surroundings of the town. Furthermore, the Foundation has agreed to provide funding for several local projects, including support for NGOs, local associations and sport clubs.

 

Moreover, the Foundation has now completed its training program aimed at local unemployed individuals. The Third Atalaya Mining Operators Course has successfully finished its practical two-month internship with the principal contractors of the Riotinto Mine. Now the group of 20 students is ready to engage with the labour market with new skills acquired thanks to the hands-on experience in various mining and industrial related operations which include official qualifications. The previous programme was successful, with nearly half of the participants now employed by various companies.

 

Health and Safety

The results for Q3 2023, compared to the same period in 2022, show a significant improvement with only one lost time accident and 97 consecutive days with no lost-time accidents.

For the nine months, results have been improved regarding the previous year with three minor loss accidents and severity and frequency indices are 0.10 and 4.48.

 

In addition, Atalaya has updated its internal procedure for controlling drugs and preventing work under the influence of psychoactive substances and has been approved an evidentiary test with a biological sample (blood) carried out by an accredited laboratory.

 

The Field Leadership activity is running well and has added value to contributing to the safety behaviour in the mining facility.

 

The training plan for Atalaya employees is currently focused on basic life support and the rules of action in the event of health emergencies at the company with a specific training in heat-stressed work according with the metabolic loading of the job.

 

Environment

During the third quarter of 2023, the environmental department has continued executing the actions of environmental monitoring of the activity and management of the natural environment. Key points of the quarter:

 

·     During the third quarter of the year, one environmental incident was registered: A spill was detected in Flotation Area over open ground. It was caused by an electrical failure. The area was cleaned, and the waste was taken to the tailings facility.

·      A total rainfall of 36.6 l/m2 was recorded in Q3 2023, which was around 3% less than in the same period of previous year. Total rainfall for the hydrological year (October 2022 to September 2023) is 442.3 l/m², which is 9% more than the rainfall recorded in the previous hydrological year (same period).

·   On July 21st, 2023, the Integrated Environmental Authorization (IPPC Permit for ELIX Plant) was granted.

·    The additional measures defined in the action plan against dust continued to be implemented, intensifying periodic irrigation, implementing new coordination measures, and carrying out exhaustive monitoring of the emissions generated in the operation.

·      All the regular internal controls of diffuse emissions into the atmosphere have been carried out, and the results of the controls are within the limit values. However, in August, the TSP (Total Suspended Particles) limit was exceeded at sampling point number 1. In the rest, ADP (Atmospheric Deposition Particles) and TSP limits were met. Furthermore, the results of Annual External Control, Point and Diffuse Emissions into the atmosphere were received. All limits were met. Other periodic and mandatory controls have been carried out without incidents. In addition, during the quarter, several reports were handed to the Administration bodies.

·      Environmental inspections were performed daily, mainly focused on chemical storage and handling, housekeeping, waste management, uncontrolled releases and environmentally friendly practices carried out in the project by ARM's and contractors' personnel. Additionally, dust control and drainage system inspections were performed regularly. 82 inspections in total were carried out during the third quarter, including, plant, mine area and the contractors' camps.

 

7.      Risk Factors

Due to the nature of Atalaya's business in the mining industry, the Group is subject to various risks that could materially impact the future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to Atalaya. Readers are encouraged to read and consider the risk factors detailed in Atalaya's audited, consolidated financial statements for the year ended 31 December 2022.

The Company continues to monitor the principal risks and uncertainties that could materially impact the Company's results and operations, including the areas of increasing uncertainty such as inflationary pressure on goods and services required for the business and geopolitical developments which could affect operations and markets..

 

8.      Critical accounting policies, estimates, judgements, assumptions and accounting changes

The preparation of Atalaya's Financial Statements in accordance with IFRS requires management to make estimates, judgements and assumptions that affect amounts reported in the Financial Statements and accompanying notes. There is a full discussion and description of Atalaya's critical accounting policies in the audited consolidated financial statements for the year ended 31 December 2022.

As at 30 September 2023, there are no significant changes in critical accounting policies or estimates to those applied in 2022.

 

9.    Other Information

Additional information about Atalaya Mining Plc. is available at www.atalayamining.com

 

Unaudited interim condensed consolidated financial statements on subsequent pages.

 

By Order of the Board of Directors,

 

 

 

___________________________________

Roger Davey

Chairman

Nicosia, 15 November 2023