REG - Atalaya Mining PLC - 2022 Annual Results
22/03/2023 07:15
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RNS Number : 7841T Atalaya Mining PLC 22 March 2023
Atalaya Mining Plc
1 Lampousas Street
1095 Nicosia, Cyprus
Tel: +357 22442705
Fax: +357 22442708
www.atalayamining.com
22 March 2023
Atalaya Mining Plc.
("Atalaya" or "the Company")
2022 Annual Results
Steady operational performance and improved cost outlook expected for 2023
Atalaya Mining Plc (AIM: ATYM) is pleased to announce its audited consolidated
results for the year ended 31 December 2022 ("FY2022" or the "Period").
Highlights
· Improved performance in Q4 2022 provides the basis for stronger
2023 outlook
‒ Improved copper production of 14.0 kt at AISC of $3.12/lb Cu
‒ EBITDA of €18.2 million despite elevated input costs
· FY2022 included good operational performance and satisfactory
financial results when considering the many external challenges
‒ Copper production of 52.3 kt, partially impacted by the
logistics strike in Q1 2022
‒ EBITDA of €55.3 million following a ~€64 million increase in
annual electricity costs
‒ Net cash remains strong at €53.1 million after a period of
significant investment
· Final Dividend of $0.0385 per ordinary share proposed, bringing
Full Year Dividend to $0.0745 per ordinary share, consistent with dividend
policy approved by the Company
· Investments in 2023 will continue to focus on growth, cost
reductions and decarbonisation, including exploration, E-LIX Phase I and the
50 MW solar plant
· Improved performance is expected for 2023, due in part to lower
forecast electricity prices
‒ 2023 guidance: copper production of 53-55 kt at AISC of
$3.00-3.20/lb Cu
Q4 2022 and FY2022 Financial Results Summary
Period ended 31 December Q4 2022 Q4 2021 FY2022 FY2021
Revenues from operations €k 99,893 101,452 361,846 405,717
Operating costs €k (81,694) (50,549) (306,532) (206,603)
EBITDA €k 18,199 50,903 55,314 199,114
Profit for the period €k 8,039 28,027 30,926 132,226
Basic earnings per share € cents/share 6.4 20.8 23.7 96.7
Dividend per share((1)) US$/share n/a n/a 0.0745 0.395
Cash flows from operating activities €k 20,931 19,629 38,503 148,841
Cash flows used in investing activities((2)) €k (17,525) (9,696) (53,529) (87,531)
Cash flows from financing activities €k 19,596 (49,859) 22,411 1,851
Net Cash position((3)) €k 53,085 60,073 53,085 60,073
Working capital surplus €k 84,047 102,430 84,047 102,430
Average realised copper price (excluding QPs closed in the Period) US$/lb 3.70 4.40 3.96 4.22
Cu concentrate produced tonnes 68,908 64,695 249,543 270,713
Cu production tonnes 13,969 13,872 52,269 56,097
Cash costs US$/lb payable 2.90 2.24 3.16 2.18
All-In Sustaining Cost ("AISC") US$/lb payable 3.12 2.46 3.37 2.48
(1) Consists of 2022 Interim Dividend (paid 20 September 2022) and
proposed Final Dividend, which is subject to approval by shareholders at the
Company's 2023 Annual General Meeting.
(2) FY2021 includes €53 million early payment of the Deferred
Consideration to Astor.
(3) Includes restricted cash and bank borrowings at 31 December 2022 and
31 December 2021.
Alberto Lavandeira, CEO, commented:
"There were many external headwinds in 2022, but our team effectively
navigated these challenges and delivered good operating results for much of
the year. We enter 2023 with a strong balance sheet and positive outlook for
the year ahead.
In 2022, we were impacted by a significant increase in key input costs,
especially in relation to electricity, but I am proud of the decisive action
we took to enhance the resilience of our operations, including securing a
long-term fixed price power purchase agreement that we have benefitted from
since the beginning of 2023. Contribution from our 50 MW solar plant will
provide additional price stability later this year.
As always, Atalaya remains focused on growing and enhancing its portfolio of
copper assets in Spain. We have a unique portfolio of growth options located
in regions with modern infrastructure and benefit from the human capital
required to bring assets into production. We were pleased to publish the
results of the new Riotinto PEA, which demonstrates the scale and potential
economics of our processing hub strategy in the Riotinto District. Exploration
activities continue at Proyecto Masa Valverde, which could be developed as
another satellite deposit, while construction activities continue at our E-LIX
Phase I plant, which has the potential to unlock value and reduce costs
throughout the Iberian Pyrite Belt.
Finally, we remain committed to developing Proyecto Touro into a modern and
sustainable mine that can provide Europe with a new source of domestic copper
production. We were pleased that copper was declared a strategic raw material
by the EU in its recent Critical Raw Materials Act, given its importance to
the energy transition. As a proven Spanish copper producer with a track record
of delivery, we are well placed to meet Europe's increasing demand for locally
produced copper."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live
presentation relating to the 2022 Annual Results via the Investor Meet Company
platform at 12:00pm 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
(https://www.investormeetcompany.com/atalaya-mining-plc/register-investor)
Management will also answer questions that have been submitted via the
Investor Meet Company dashboard.
Note to Readers
The financial information for the year ended 31 December 2022 and 2021
contained in this document does not constitute statutory accounts as defined
in section 435 of the Companies Act 2006. The financial information for the
years ended 31 December 2022 and 2021 have been extracted from the
consolidated financial statements of Atalaya Mining plc for the year ended 31
December 2022 which have been approved by the directors on 21 March 2023. The
auditor's report on those financial statements was unqualified.
Q4 2022 and FY2022 Operating Results Summary
Units expressed in accordance with the international system of units (SI) Unit Q4 2022 Q4 2021 FY2022 FY2021
Ore mined t 3,540,155 3,494,222 14,884,361 13,535,470
Waste mined t 5,329,252 7,287,352 24,661,569 30,533,174
Ore processed t 3,958,654 3,846,559 15,410,459 15,822,610
Copper ore grade % 0.41 0.41 0.40 0.41
Copper concentrate grade % 20.27 21.44 20.95 20.72
Copper recovery rate % 86.24 87.04 85.84 85.97
Copper concéntrate t 68,908 64,695 249,543 270,713
Copper contained in concentrate t 13,969 13,872 52,269 56,097
Payable copper contained in concentrate t 13,280 13,225 49,773 53,390
Cash cost US$/lb payable 2.90 2.24 3.16 2.18
All-in sustaining cost US$/lb payable 3.12 2.46 3.37 2.48
Mining
Ore mined was 3.5 million tonnes in Q4 2022 (Q4 2021: 3.5 million tonnes) and
14.9 million tonnes in FY2022 (FY2021: 13.5 million tonnes).
Waste mined was 5.3 million tonnes in Q4 2022 (Q4 2021: 7.3 million tonnes)
and 24.7 million tonnes in FY2022 (FY2021: 30.5 million tonnes).
Processing
The plant processed ore of 4.0 million tonnes during Q4 2022 (Q4 2021: 3.8
million tonnes) and 15.4 million tonnes in FY2022 (FY2021: 15.8 million
tonnes), demonstrating strong plant performance despite the negative impact of
the Q1 2022 transport sector strike and related stoppage. The plant continues
to highlight its ability to operate above its 15 million tonne per annum
nameplate capacity on a consistent basis.
Copper grade was 0.41% in Q4 2022 (Q4 2021: 0.41%) and 0.40% in FY2022
(FY2021: 0.41%). Modestly lower grades in FY2022 were the result of blending
with lower grade stockpiles during H1 2022 due to pit sequencing.
Copper recoveries were 86.24% in Q4 2022 (Q4 2021: 87.04%) and 85.84% in
FY2022 (FY2021: 85.97%). Recoveries in certain periods in FY2022 were
negatively impacted by the characteristics of the ore processed.
Production
Copper production was 13,969 tonnes in Q4 2022 (Q4 2021: 13,872 tonnes) and
52,269 tonnes in FY2022 (FY2021: 56,097 tonnes). Lower production for FY2022
was the result of lower grades (pit sequencing) and lower throughput
(including the impact of the Q1 2022 plant maintenance stoppage).
On-site copper concentrate inventories at 31 December 2022 were approximately
3,529 tonnes (31 December 2021: 5,254 tonnes). All concentrate in stock at the
beginning of the Period was delivered to the port at Huelva.
Copper contained in concentrates sold was 14,027 tonnes in Q4 2022 (Q4 2021:
13,568 tonnes) and 52,323 tonnes in FY2022 (FY2021: 61,662 tonnes).
Cash Costs and AISC Breakdown
$/lb Cu payable Q4 2022 Q4 2021 FY2022 FY2021
Mining 0.70 0.67 0.79 0.64
Processing 1.11 0.56 1.31 0.61
Other site operating costs 0.59 0.61 0.54 0.54
Total site operating costs 2.40 1.83 2.65 1.79
By-product credits (0.07) (0.08) (0.08) (0.09)
Freight, treatment charges and other offsite costs 0.57 0.48 0.60 0.49
Total offsite costs 0.50 0.40 0.52 0.39
Cash costs 2.90 2.24 3.16 2.18
Cash costs 2.90 2.24 3.16 2.18
Corporate costs 0.09 0.05 0.08 0.07
Sustaining capital (excluding one-off tailings expansion) 0.06 0.06 0.06 0.06
Capitalised stripping costs - 0.06 0.01 0.10
Other costs 0.08 0.06 0.06 0.07
Total AISC 3.12 2.46 3.37 2.48
Cash costs were $2.90/lb payable copper in Q4 2022 (Q4 2021: $2.24) and
$3.16/lb payable copper in FY2022 (FY2021: $2.18/lb), with the increases due
to significantly higher costs associated with electricity and other supplies
and lower production volumes, partially offset by the weaker Euro.
AISC were $3.12/lb payable copper in Q4 2022 (Q4 2021: $2.46/lb) and $3.37/lb
payable copper in FY2022 (FY2021: $2.48/lb). The increase in AISC in 2022 was
driven by the same factors that increased cash costs, namely significantly
higher electricity costs. AISC excludes one-off investments in the tailings
dam, consistent with prior reporting.
Q4 2022 and FY2022 Financial Results Highlights
Income Statement
Revenues were €99.9 million in Q4 2022 (Q4 2021: €101.5 million) and
€361.8 million in FY2022 (FY2021: €405.7 million). Lower revenues were the
result of lower copper prices during the 2022 periods, as well as lower copper
concentrate volumes sold in FY2022 compared to FY 2021.
The realised copper price (excluding QPs) was $3.70/lb in Q4 2022 (Q4 2021:
$4.40/lb) and $3.96/lb in FY2022 (FY2021: $4.22/lb).
Operating costs were €81.7 million in Q4 2022 (Q4 2021: €50.5 million) and
€306.5 million in FY2022 (FY2021: €206.6 million) as a result of
significant increases in key input costs such as electricity, diesel,
explosives, steel and lime. Compared to the prior periods in 2021, the
increase in the cost of electricity in Q4 2022 and FY2022 was approximately
€11.3 million and €63.8 million, respectively.
EBITDA was €18.2 million in Q4 2022 (Q4 2021: €50.9 million) and €55.3
million in FY2022 (FY2021: positive €199.1 million). The decrease in EBITDA
was driven by the combination of lower revenues and significantly higher
operating costs compared with the equivalent periods in 2021.
Profit after tax was €8.0 million in Q4 2022 (Q4 2021: €28.0 million) or
6.4 cents per basic share (Q4 2021: 20.8 cents per basic share) and €30.9
million in FY2022 (FY2021: €132.2 million) or 23.7 cents per basic share
(FY2021: 96.7 cents per basic share).
Cash Flow Statement
Cash flows from operating activities before changes in working capital were
positive €19.9 million in Q4 2022 (Q4 2021: positive €44.2 million) and
positive €20.9 million after working capital changes (Q4 2021: positive
€19.6 million). Working capital movements are mainly related to changes in
account receivables and payables due to timing differences. For FY2022, cash
flows from operating activities before changes in working capital were
positive €56.9 million (FY2021: positive €200.3 million) and positive
€38.5 million after working capital changes (FY2021: positive €148.8
million).
Cash flows used in investing activities were €17.5 million in Q4 2022 (Q4
2021: €9.7 million) and €53.5 million in FY2022 (FY2021: €87.5 million).
Major investments in FY2022 included €22.7 million for the 50 MW solar plant
(FY2021: nil), €6.2 million in sustaining capex (FY2021: €5.9 million) and
€14.1 million to increase the tailings dam (FY2021: €14.1 million). The
FY2021 period included the early payment of the deferred consideration to
Astor.
Cash flows from financing activities were positive €19.6 million in Q4 2022
(Q4 2021: negative €49.9 million). Cash flows from financing activities were
positive €22.4 million in FY2022 (FY2021: positive €1.9 million). In
FY2022, unsecured debt facilities were drawn in order to finance the 50 MW
solar plant, while €5.1 million in dividends were paid. In FY2021, unsecured
debt facilities were drawn to fund the payment of deferred consideration to
Astor, while €47.3 million in dividends were paid.
Balance Sheet
Despite cost inflation and the impact of unprecedented electricity costs in
2022, Atalaya's balance sheet remains strong with consolidated cash and cash
equivalents of €126.4 million at 31 December 2022.
Net of current and non-current borrowings of €73.4 million, net cash was
€53.1 million as at 31 December 2022, compared with €60.1 million as at 31
December 2021.
Total working capital was €84.0 million at 31 December 2022, compared to
€102.4 million as at 31 December 2021.
Electricity Market in Spain
FY2022 Average Prices
During 2022, electricity prices in Spain reached unprecedented levels as a
result of the impact of the conflict in Ukraine on 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.
Electricity prices moderated in Q4 2022, due to the combination of mild
weather in Europe, good supplies of LNG into Europe and a strong contribution
from wind generation in Spain. As a result, realised electricity prices were
approximately €170/MWh in Q4 2022, bringing the annual average realised
price to approximately €240/MWh in FY2022. This compares to prices of
approximately €65/MWh in FY2021. As previously disclosed, an increase in
realised electricity prices of €100/MWh results in an increase to the
Company's annual operating costs of around €37 million.
Prices in 2023
So far in 2023, the estimated realised market electricity price in Spain has
averaged around €130/MWh, with volatility driven by the relative amount of
electricity generated by wind.
Since 1 January 2023, the Company has benefited from its 10-year power
purchase agreement ("PPA"), which will provide the Company with approximately
31% of its current electricity requirements at a fixed rate. When including
the contribution of the PPA, estimated realised electricity prices for the
Company have averaged around €110/MWh so far in 2023.
Renewable Energy Projects
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. All major materials are on site and
civil works are underway. Start-up of the 50 MW solar plant is now expected to
be 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.
As previously disclosed, 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. Following the installation of an evaluation tower in September 2022,
new wind measurements are now being compared to the extensive historical
ground level data in order to establish confidence in the area's wind
characteristics and determine the viability of developing a small wind farm at
Riotinto dedicated to self-consumption.
Outlook for 2023
Production
As announced in the Company's Q4 2022 Operations Update, production guidance
for 2023 is 53,000 to 55,000 tonnes of copper, which represents an increase
over FY2022 production of 52,269 tonnes.
Operating Costs
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. Although prices have stabilised for certain
items, overall input costs remain well above 2021 levels.
In addition, electricity continues to be a major component of the Company's
cost structure due to the elevated market prices in Spain. As a result, the
Company is again providing cash cost and AISC guidance that reflects a range
of outcomes of potential market electricity prices for 2023.
Accordingly, cash cost and AISC guidance for 2023 are as follows:
* 2023 cash cost range of $2.80 to $3.00/lb copper payable
* 2023 AISC range of $3.00 to $3.20/lb copper payable (excluding the one-off
project to increase the capacity of the tailing dam; see below for further
information)
These cost guidance ranges are based on an assumed market electricity price
range of €100 to 150/MWh and also include the benefit of the Company's PPA.
Capital Expenditures
Atalaya continues to focus on growing its production, reducing its cost
structure and enhancing the long-term sustainability of its operations.
For 2023, the Company will be making the following non-sustaining capital
investments:
* €12.6 million for the 50 MW solar plant, resulting in a total investment of
~€35 million
* €4 million for the E-LIX Phase I Plant, resulting in a total project
investment of ~€20 million, out of which ~€15 million will be accounted
for as loans to Lain Technologies
* €13 million for expansion of the existing Riotinto tailings facility
Exploration
Atalaya controls large and strategic land packages across Spain, including in
the Iberian Pyrite Belt (Riotinto District) and the Ossa Morena Metallogenic
Belt (Proyecto Ossa Morena).
Following the promising results from drilling campaigns in 2022, the Company
looks forward to continuing and expanding its exploration efforts in the
coming year. As a result, Atalaya's exploration budget for 2023 is
approximately €10 million and will focus on expanding current resources and
making new discoveries at Proyecto Masa Valverde, drill testing priority
anomalies at Proyecto Riotinto East, expanding and upgrading current resources
at the Alconchel Cu-Au project and continue drill testing new targets at
Proyecto Ossa Morena.
2022 Final Dividend
In 2021, Atalaya implemented a dividend policy that seeks to provide capital
returns to its shareholders and allows for continued investments in its
portfolio of low capital intensity growth projects. The dividend policy
consists of an annual pay-out of 30 - 50% of free cash flow generated during
the applicable financial year and is payable in two half-yearly instalments.
The Board of Directors has proposed a final dividend for 2022 of US$0.0385 per
ordinary share ("Final Dividend"), which is equivalent to approximately 3.15
pence per share. Payment of the Final Dividend is subject to shareholder
approval at the Company's 2023 Annual General Meeting ("AGM"). Should it be
approved, the Final Dividend, together with the Interim Dividend paid in
September 2022, would result in a Full Year Dividend of US$0.0745 per ordinary
share, which is equivalent to approximately 6.28 pence per share. Further
details on the timing of the potential payment of the Final Dividend will be
provided ahead of the AGM.
Asset Portfolio Update
Proyecto Riotinto
On 23 February 2023, the Company announced the results of a new preliminary
economic assessment for the Cerro Colorado, San Dionisio and San Antonio
deposits at Proyecto Riotinto ("Riotinto PEA"). The objective of the Riotinto
PEA was to incorporate these deposits into a new integrated mine plan in order
to quantify the benefits of the Company's planned processing hub strategy for
its 15 Mtpa processing plant.
The Riotinto PEA demonstrated strong potential economic results, including a
$1.07 billion after-tax NPV(8%) at $3.50/lb copper (Base Case) and a $1.57
billion after-tax NPV(8%) at $4.03/lb copper (Sensitivity Case). In addition,
the Riotinto PEA illustrated the potential uplift in copper equivalent
production to ~90 ktpa (2027+) as a result of processing higher grade
material, as well as a potential reduction in cash costs.
The Riotinto PEA serves as a foundation for further optimisation and the
Company will continue to evaluate opportunities to enhance value, including
the potential application of the E-LIX System, considering a revised mining
sequence to bring forward the highest value material and studying the
refurbishment of existing processing equipment at Riotinto in order to reduce
the capital costs associated with plant modifications.
E-LIX Phase I Plant
Construction activities at the E-LIX Phase I plant continue to make good
progress. With most equipment on site or in transit, commissioning activities
are now 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")
Three core rigs continue to be active and are focused on step-out drilling at
the Masa Valverde deposit, resource definition drilling at the Campanario
Trend and step out drilling around the new discovery made at the Mojarra
Trend. A comprehensive update on recent exploration results at these targets
was announced in November 2022.
The second hole (MR02) drilled at the Mojarra Trend, in a previously undrilled
area, intersected massive sulphides at 434m depth. Assay results returned a
main mineralised interval of 18.75m at 0.84% Cu, 0.63% Zn, 0.66% Pb and 76.24
g/t Ag including a higher-grade interval of 6.80m at 1.22% Cu and 101.60 g/t
Ag.
Step-out drilling in the westernmost area of the Masa Valverde deposit
discovered a new high-grade zinc zone in hole MJ54, including a main
mineralised interval of 18.00m at 0.25% Cu, 8.30% Zn, 2.49% Pb, 60.17 g/t Ag
and 0.89 g/t Au from 852 meters depth.
Resource definition drilling at the Campanario Trend continues to encounter
shallow, massive, and semi-massive sulphides with, in cases, associated high
grade intersections. For example, hole CA42 in the western part of the
Campanario Trend assayed 7.50m at 0.45% Cu, 1.09 g/t Ag and 6.67 g/t Au from
35m depth.
An airborne gravity gradiometry ("AGG") and magnetic survey covering the
entire PMV has been completed and preliminary results already received. AGG is
a leading technology in the search for buried mineral deposits, especially
those of the size that is typical in the Iberian Pyrite Belt.
Work continues on the PEA which will consider operating PMV as a satellite
deposit by processing mined material at Riotinto's 15 Mtpa plant. Further
metallurgical testing for the Masa Valverde and Majadales deposits is planned
for inclusion in the PEA, which may also include new results from the regional
drilling programme. The permitting process for PMV is also ongoing.
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,
including engaging with the many stakeholders in the region in advance of its
plans to submit a new improved project design. Positive and favourable
feedback from numerous meetings with municipalities, farmer and fishermen
associations and other industries indicate meaningful support towards the
development of a new and modern mining project.
The Company is operating its new water treatment plant at Touro, 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
Two short drilling programmes were completed at the Hinchona and Chaparral
copper-gold prospects, which are both located in the central part of the
district. A second drilling program at Chaparral is currently in progress.
Drilling has been also planned for the Guijarro gold project located
immediately west of Chaparral.
At Hinchona, four holes totalling 1,874m were completed, with the initial
results previously announced in November 2022. The best results were in the
southernmost hole, HIN04, with several mineralised intervals such as 14.95m at
0.29% Cu from 239.35m depth and including two higher-grade intervals of 3.40m
at 0.80% Cu, 1.84 g/t Ag and 479 ppm Co and 1.45m at 1.01% Cu and 6.04 g/t Ag.
At Chaparral, four holes totalling 1,185m were completed and results will be
published once the exploration campaign is completed. Drilling at the flagship
Alconchel-Pallares copper-gold project is expected to commence during Q3 2023.
Proyecto Riotinto East
Drill target definition continues to progress and the first drill testing of
selected anomalies is planned to start during Q2 2023. An airborne gravity
gradiometry and magnetic survey covering the entire project was completed and
preliminary results expected by the end of March 2023.
This announcement contains information which, prior to its publication
constituted inside information for the purposes of Article 7 of Regulation
(EU) No 596/2014.
Contacts:
SEC Newgate UK Elisabeth Cowell / Axaule Shukanayeva / Matthew Elliott + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity Henry Fitzgerald-O'Connor / James Asensio / Thomas Diehl +44 20 7523 8000
(NOMAD and Joint Broker)
BMO Capital Markets Tom Rider / Andrew Cameron +44 20 7236 1010
(Joint Broker)
Peel Hunt LLP Ross Allister / David McKeown +44 20 7418 8900
(Joint Broker)
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
(http://www.atalayamining.com)
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
EXTRACT OF THE AUDITED CONSOLIDATED
FINANCIAL STATEMENTS
31 December 2022
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
EXTRACT OF THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS
31 December 2022
Notice to Reader
The accompanying 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 2021 and 31 December 2022 and results of
operations for the three and twelve months ended 31 December 2022 and 2021.
This report has been prepared as of 21 March 2023. The analysis hereby
included is intended to supplement and complement the audited consolidated
financial statements and notes thereto ("Financial Statements") as at and for
the period ended 31 December 2022, which will be released together with the
Company's 2022 Annual Report.
Atalaya prepares its Annual Financial Statements in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by the EU and
its 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 31
December 2022.
Atalaya is a European mining and development company. The 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 three investigation permits at
Proyecto Riotinto Este.
Proyecto Riotinto
On 23 February 2023, the Company announced the results of a new preliminary
economic assessment for the Cerro Colorado, San Dionisio and San Antonio
deposits at Proyecto Riotinto ("Riotinto PEA"). The objective of the Riotinto
PEA was to incorporate these deposits into a new integrated mine plan in order
to quantify the benefits of the Company's planned processing hub strategy for
its 15 Mtpa processing plant.
The Riotinto PEA demonstrated strong potential economic results, including a
$1.07 billion after-tax NPV(8%) at $3.50/lb copper (Base Case) and a $1.57
billion after-tax NPV(8%) at $4.03/lb copper (Sensitivity Case). In addition,
the Riotinto PEA illustrated the potential uplift in copper equivalent
production to ~90 ktpa (2027+) as a result of processing higher grade
material, as well as a potential reduction in cash costs.
The Riotinto PEA serves as a foundation for further optimisation and the
Company will continue to evaluate opportunities to enhance value, including
the potential application of the E-LIX System, considering a revised mining
sequence to bring forward the highest value material and studying the
refurbishment of existing processing equipment at Riotinto in order to reduce
the capital costs associated with plant modifications.
E-LIX Phase I Plant
Construction activities at the E-LIX Phase I plant continue to make good
progress. With most equipment on site or in transit, commissioning activities
are now 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
Three core rigs continue to be active and are focused on step-out drilling at
the Masa Valverde deposit, resource definition drilling at the Campanario
Trend and step out drilling around the new discovery made at the Mojarra
Trend. A comprehensive update on recent exploration results at these targets
was announced in November 2022.
The second hole (MR02) drilled at the Mojarra Trend, in a previously undrilled
area, intersected massive sulphides at 434m depth. Assay results returned a
main mineralised interval of 18.75m at 0.84% Cu, 0.63% Zn, 0.66% Pb and 76.24
g/t Ag including a higher-grade interval of 6.80m at 1.22% Cu and 101.60 g/t
Ag.
Step-out drilling in the westernmost area of the Masa Valverde deposit
discovered a new high-grade zinc zone in hole MJ54, including a main
mineralised interval of 18.00m at 0.25% Cu, 8.30% Zn, 2.49% Pb, 60.17 g/t Ag
and 0.89 g/t Au from 852 meters depth.
Resource definition drilling at the Campanario Trend continues to encounter
shallow, massive, and semi-massive sulphides with, in cases, associated high
grade intersections. For example, hole CA42 in the western part of the
Campanario Trend assayed 7.50m at 0.45% Cu, 1.09 g/t Ag and 6.67 g/t Au from
35m depth.
An airborne gravity gradiometry ("AGG") and magnetic survey covering the
entire PMV has been completed and preliminary results already received. AGG is
a leading technology in the search for buried mineral deposits, especially
those of the size that is typical in the Iberian Pyrite Belt.
Work continues on the PEA which will consider operating PMV as a satellite
deposit by processing mined material at Riotinto's 15 Mtpa plant. Further
metallurgical testing for the Masa Valverde and Majadales deposits is planned
for inclusion in the PEA, which may also include new results from the regional
drilling programme. The permitting process for PMV is also ongoing.
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,
including engaging with the many stakeholders in the region in advance of its
plans to submit a new improved project design. Positive and favourable
feedback from numerous meetings with municipalities, farmer and fishermen
associations and other industries indicate meaningful support towards the
development of a new and modern mining project.
The Company is operating its new water treatment plant at Touro, 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
Two short drilling programmes were completed at the Hinchona and Chaparral
copper-gold prospects, which are both located in the central part of the
district. A second drilling program at Chaparral is currently in progress.
Drilling has been also planned for the Guijarro gold project located
immediately west of Chaparral.
At Hinchona, four holes totalling 1,874m were completed, with the initial
results previously announced in November 2022. The best results were in the
southernmost hole, HIN04, with several mineralised intervals such as 14.95m at
0.29% Cu from 239.35m depth and including two higher-grade intervals of 3.40m
at 0.80% Cu, 1.84 g/t Ag and 479 ppm Co and 1.45m at 1.01% Cu and 6.04 g/t Ag.
At Chaparral, four holes totalling 1,185m were completed and results will be
published once the exploration campaign is completed. Drilling at the flagship
Alconchel-Pallares copper-gold project is expected to commence during Q3 2023.
Riotinto District - Proyecto Riotinto East
Drill target definition continues to progress and the first drill testing of
selected anomalies is planned to start during Q2 2023. An airborne gravity
gradiometry and magnetic survey covering the entire project was completed and
preliminary results expected by the end of March 2023.
Electricity Market in Spain
FY2022 Average Prices
During 2022, electricity prices in Spain reached unprecedented levels as a
result of the impact of the conflict in Ukraine on 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.
Electricity prices moderated in Q4 2022, due to the combination of mild
weather in Europe, good supplies of LNG into Europe and a strong contribution
from wind generation in Spain. As a result, realised electricity prices were
approximately €170/MWh in Q4 2022, bringing the annual average realised
price to approximately €240/MWh in FY2022. This compares to prices of
approximately €65/MWh in FY2021. As previously disclosed, an increase in
realised electricity prices of €100/MWh results in an increase to the
Company's annual operating costs of around €37 million.
Prices in 2023
So far in 2023, the estimated realised market electricity price in Spain has
averaged around €130/MWh, with volatility driven by the relative amount of
electricity generated by wind.
Since 1 January 2023, the Company has benefited from its 10-year power
purchase agreement ("PPA"), which will provide the Company with approximately
31% of its current electricity requirements at a fixed rate. When including
the contribution of the PPA, estimated realised electricity prices for the
Company have averaged around €110/MWh so far in 2023.
Renewable Energy Projects
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. All major materials are on site and
civil works are underway. Start-up of the 50 MW solar plant is now expected to
be 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.
As previously disclosed, 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. Following the installation of an evaluation tower in September 2022,
new wind measurements are now being compared to the extensive historical
ground level data in order to establish confidence in the area's wind
characteristics and determine the viability of developing a small wind farm at
Riotinto dedicated to self-consumption.
Corporate Updates 2022
As announced on 21 March 2022, the Company received the formal Judgment from
the High Court of Justice in relation to the Claim by Astor for residual
interest arising out of the payment of €53 million to Astor. On 8 April
2022, the Company transferred €9.6 million to Astor from the trust account
already established by Atalaya on 15 July 2021. In addition, €1.1 million
were paid on 16 May 2022 to Astor under the Master Agreement.
2. Overview of Operational Results
Proyecto Riotinto
The following table presents a summarised statement of operations of Proyecto
Riotinto for the twelve and three month period ended 31 December 2022 and
2021.
Units expressed in accordance with the international system of units (SI) Unit Q4 2022 Q4 2021 FY2022 FY2021
Ore mined t 3,540,155 3,494,222 14,884,361 13,535,470
Waste mined t 5,329,252 7,287,352 24,661,569 30,533,174
Ore processed t 3,958,654 3,846,559 15,410,459 15,822,610
Copper ore grade % 0.41 0.41 0.40 0.41
Copper concentrate grade % 20.27 21.44 20.95 20.72
Copper recovery rate % 86.24 87.04 85.84 85.97
Copper concentrate t 68,908 64,695 249,543 270,713
Copper contained in concentrate t 13,969 13,872 52,269 56,097
Payable copper contained in concentrate t 13,280 13,225 49,773 53,390
Cash cost US$/lb payable 2.90 2.24 3.16 2.18
All-in sustaining cost US$/lb payable 3.12 2.46 3.37 2.48
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 Q4 2022 Q4 2021 FY2022 FY2021
Mining 0.70 0.67 0.79 0.64
Processing 1.11 0.56 1.31 0.61
Other site operating costs 0.59 0.61 0.54 0.54
Total site operating costs 2.40 1.83 2.65 1.79
By-product credits (0.07) (0.08) (0.08) (0.09)
Freight, treatment charges and other offsite costs 0.57 0.48 0.60 0.49
Total offsite costs 0.50 0.40 0.52 0.39
Cash costs 2.90 2.24 3.16 2.18
Cash costs 2.90 2.24 3.16 2.18
Corporate costs 0.09 0.05 0.08 0.07
Sustaining capital (excluding one-off tailings expansion) 0.06 0.06 0.06 0.06
Capitalised stripping costs - 0.06 0.01 0.10
Other costs 0.08 0.06 0.06 0.07
Total AISC 3.12 2.46 3.37 2.48
Mining and Processing
Mining
The amount of ore mined during Q4 2022 was 3.5 million tonnes, which is in
line with the same period in 2021. Overall, for the entire fiscal year of 2022
and the amount of ore mined was 14.9 million tonnes, which is an increase from
the previous fiscal year, which saw 13.5 million tonnes of ore mined.
Waste mined was 5.3 million tonnes in Q4 2022 (Q4 2021: 7.3 million tonnes)
and 24.7 million tonnes in FY2022 (FY2021: 30.5 million tonnes).
Processing
The plant processed ore of 4.0 million tonnes during Q4 2022 (Q4 2021: 3.8
million tonnes). Throughput was 15.4 million tonnes in FY2022 (FY2021: 15.8
million tonnes), demonstrating strong plant performance despite the negative
impact of the Q1 2022 transport sector strike and related stoppage. The plant
continues to demonstrate its ability to operate above its 15 million tonne per
annum nameplate capacity.
Copper grade was 0.41% in Q4 2022 (Q4 2021: 0.41%). Copper grade was 0.40% in
FY2022 (FY2021: 0.41%). Lower grades in FY2022 were the result of blending
with lower grade stockpiles during H1 2022 due to pit sequencing.
Copper recoveries were 86.24% in Q4 2022 (Q4 2021: 87.04%) and 85.85% in
FY2022 (FY2021: 85.97%).
Concentrate production for 2022 was 249,543 tonnes compared to 270,713 tonnes
in 2021. Contained copper was 52,269 tonnes compared to 56,097 tonnes in 2021.
Copper payable amounted to 49,773 tonnes from 53,390 tonnes in 2021. Lower
production for FY2022 was the result of lower grades (pit sequencing) and
lower throughput (including the impact of the Q1 2022 plant maintenance
stoppage).
On-site concentrate inventories at 31 December 2022 were approximately 3,529
tonnes (5,254 tonnes at 31 December 2021) which have been fully sold in
January 2023. All concentrate in stock was delivered to the port at Huelva.
3. 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 geopolitical developments in Ukraine and its impact on energy
prices and other supplies 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.
Proyecto Riotinto operational guidance for 2023 is as follows:
Unit Guidance 2023
Ore mined million tonnes 17.1
Waste mined million tonnes 24.1
Ore processed million tonnes 15.3 - 15.8
Copper ore grade % 0.40 - 0.42
Copper recovery rate % 84 - 86
Contained copper tonnes 53,000-55,000
Cash costs $/lb payable 2.80 - 3.00
All-in sustaining cost $/lb payable 3.00 - 3.20
As announced in the Company's Q4 2022 Operations Update, production guidance
for 2023 is 53,000 to 55,000 tonnes of copper, which represents an increase
over FY2022 production of 52,269 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. Although prices have stabilised for certain
items, overall input costs remain well above 2021 levels.
In addition, electricity continues to be a major component of the Company's
cost structure due to the elevated market prices in Spain. As a result, the
Company is again providing cash cost and AISC guidance that reflects a range
of outcomes of potential market electricity prices for 2023.
The cash cost guidance range for 2023 is $2.80 to $3.00/lb copper payable and
the AISC guidance range is $3.00 to $3.20/lb copper payable. These cost
guidance ranges are based on an assumed market electricity price range of
€100 to 150/MWh and also include the benefit of the Company's PPA.
In addition, the Company expects to spend approximately €13.0 million in
2023 as part of the project to increase the capacity of the tailing dam. AISC
are presented net of the one-off project to increase the capacity of the
tailing dam.
4. Overview of the Financial Results
The following table presents a summarised consolidated income statement for
the twelve months period ended 31 December 2022, with comparatives and
comparison with the twelve months ended 31 December 2021.
(Euro 000's) Three month ended 31 Dec 2022 Three month ended 31 Dec 2021 Twelve month ended 31 Dec 2022 Twelve month ended 31 Dec 2021
Revenues from operations 99,893 101,452 361,846 405,717
Cost of sales (71,797) (43,835) (289,554) (192,972)
Corporate expenses (4,598) (4,403) (9,954) (9,715)
Exploration expenses (3,801) (978) (4,257) (1,800)
Care and maintenance expenditure (1,494) (1,333) (3,053) (2,116)
Other income (4) - 286 -
EBITDA 18,199 50,903 55,314 199,114
Depreciation/amortisation (8,775) (8,642) (34,119) (32,276)
Net foreign exchange gain/(loss) (4,181) 1,622 11,546 6,589
Net finance cost 1,030 (12,814) (421) (13,600)
Tax 1,766 (3,042) (1,394) (27,601)
Profit for the year 8,039 28,027 30,926 132,226
Three months financial review
Revenues for Q4 2022 amounted to €99.9 million (Q4 2021: €101.5 million).
Higher concentrate sold offset lower commodity prices.
Copper concentrate production during Q4 2022 was 68,908 tonnes (Q4 2021:
64,695 tonnes) and 69,727 tonnes of copper concentrate were sold in the same
period (Q4 2021: 63,673 tonnes). Higher production levels were mainly the
result of slightly higher tonnes processed in the quarter.
Copper contained in concentrates sold was 14,027 tonnes in Q4 2022 (Q4 2021:
13,568 tonnes).
The realised price (excluding QPs) for Q4 2022 was $3.70/lb copper compared to
$4.40/lb copper in the same period of 2021.
Cost of sales for Q4 2022 amounted to €71.8 million, compared to €43.8
million in Q4 2021. Unit operating costs in Q4 2022 were significantly higher
than in Q4 2021 due to the significantly higher cost of electricity (€49.6
million higher), diesel and other supplies as result of inflation and the
geopolitical situation in the Ukraine.
Cash costs of $2.90/lb payable copper for Q4 2022, were higher than $2.24/lb
payable copper in the same period last year. Higher cash costs were primarily
due to the significantly higher electricity price as well as increased costs
for other supplies. The weaker Euro/US Dollar rate in Q4 2022 offset a portion
of the higher operating costs. AISC excluding investment in the tailings dam
in Q4 2022 were $3.12/lb payable copper compared with $2.46/lb payable copper
in Q4 2021.
Sustaining capex for Q4 2022, included in capital expenditure, amounted to
€1.6 million (Q4 2021: €1.5 million). Sustaining capex mainly accounted
for enhancements in processing systems of the plant. In addition, the Company
invested €4.8 million (Q4 2021: €4.6 million) in the project to increase
the tailings dam.
Capex associated with the construction of the 50 MW solar plant amounted to
€10.7 million in Q4 2022, while investments in the E-LIX Phase I plant
totalled €3.9 million, of which €0.6 million was booked as long-term loans
to Lain Technologies Ltd.
Corporate costs for Q4 2022 were €4.3 million, compared to €4.4 million
for Q4 2021. Corporate costs mainly include the Company's overhead expenses.
Exploration costs related to the Proyecto Riotinto for Q4 2022 amounted to
€3.8 million, compared to €1.0 million in the same period last year. Main
costs related to exploration works come from Proyecto Masa Valverde and Ossa
Morena.
Care and maintenance costs for Q4 2022 amounted to €1.5 million, compared to
€1.3 million for Q4 2021. The increase is mainly related to Proyecto Touro
and Masa Valverde.
EBITDA for Q4 2022 amounted to €18.2 million, compared to EBITDA of €50.9
million for Q4 2021.
Twelve months financial review
Revenues for FY2022 amounted to €361.8 million (FY2021: €405.7 million).
Copper concentrate production during FY2022 was 249,543 tonnes (FY2021:
270,713 tonnes) and 251,268 tonnes of copper concentrate were sold in the same
period (FY2021: 277,792 tonnes). Lower production levels were mainly the
result of lower ore grades and lower throughput following the transport sector
strike in Q1 2022. Inventories of concentrates as at the reporting date were
3,529 tonnes (31 Dec 2021: 5,254 tonnes).
Copper contained in concentrates sold was 55,323 tonnes in FY2022 (FY2021:
61,662 tonnes).
The realised price (excluding QPs) for the twelve-months period in 2022 was
$3.96/lb copper compared to $4.22/lb copper in the same period of 2021.
Concentrates were sold under offtake agreements in place. The Company did not
enter into any hedging agreements in either 2022 or 2021.
Cost of sales for FY2022 amounted to €289.6 million, compared to €193.0
million in FY2021. Unit operating costs in FY2022 were significantly higher
than in FY2021 due to the significantly higher cost of electricity (circa.
€63.8 million higher), diesel and other supplies as result of inflation and
the geopolitical situation in the Ukraine.
Cash costs of $3.16/lb payable copper for FY2022, were higher than $2.18/lb
payable copper in the same period last year. Higher cash costs were primarily
due to the significantly higher electricity price as well as increased costs
for other supplies. The stronger US Dollar/Euro rate in FY2022 offset a
portion of the higher operating costs. AISC excluding investment in the
tailings dam in FY2022 were $3.37/lb payable copper compared with $2.48/lb
payable copper in FY2021. The increase is mainly attributable to the higher
cash costs despite lower capitalised stripping costs, which amounted to €0.7
million in FY2022 compared with €9.8 million invested in FY2021.
Sustaining capex for FY2022, included in capital expenditure, amounted to
€6.2 million (FY2021: €5.9 million). Sustaining capex mainly accounted for
enhancements in processing systems of the plant. In addition, the Company
invested €14.1 million (FY2021: €14.1 million) in the project to increase
the tailings dam.
Capex associated with the construction of the 50 MW solar plant amounted to
€22.7 million in FY2022, while investments in the E-LIX Phase I plant
totalled €16.8 million, of which €10.9 million was booked as long-term
loans to Lain Technologies Ltd.
Corporate costs for FY2022 were €9.7 million, compared to €9.7 million for
FY2021. Corporate costs mainly include the Company's overhead expenses.
Exploration costs related to the Proyecto Riotinto for FY2022 amounted to
€4.3 million, compared to €1.8 million in the same period last year. Main
costs related to exploration works come from Proyecto Masa Valverde and Ossa
Morena.
Care and maintenance costs for FY2022 amounted to €3.1 million, compared to
€2.1 million for FY2021. The increase is mainly related to Proyecto Touro
and Masa Valverde.
EBITDA for FY2022 amounted to €55.3 million, compared to EBITDA of €199.1
million for FY2021. The decrease is mainly attributed to lower concentrate
sold and commodity prices in addition to higher cash costs.
Depreciation and amortisation amounted to €34.1 million for FY2022 (FY2021:
€32.3 million), as a result of the higher level of assets subject to
depreciation following the completion of assets previously under construction.
Net finance costs for FY2022 amounted to negative €0.4 million (FY2021:
negative €13.6 million). Net finance costs decreased mainly due to the
accrual recognised in 2021 for the interest related to Astor case amounted to
€11.8m.
Copper prices
The average realised copper price excluding QPs decreased by 6.0% from $4.22
per pound in FY2021 to $3.96 per pound in FY2022.
The average prices of copper for 2022 and 2021 were:
$/lb 2022 2021
Realised copper price (excluding QPs) $/lb 3.96 4.22
Market copper price per lb (period average) $/lb 4.00 4.23
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 the year, including the QP, was approximately $4.06/lb.
5. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost
per pound of payable copper", "All-In Sustaining Costs" ("AISC") and "realised
prices" 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 and before silver credits,
TC/RCs, penalties freights and other cost items included in the sales invoices
and booked as revenues. Realised price is consistent with the widely accepted
industry standard definition.
6. Liquidity and Capital Resources
Atalaya monitors factors that could impact its liquidity as part of the
Company'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 as at 31 December 2022
and 2021, and cash flows for the twelve months ended 31 December 2022 and
2021.
Liquidity Information
(Euro 000's) 31 Dec 2022 31 Dec 2021
Unrestricted cash and cash equivalents at Group level 108,550 48,375
Unrestricted cash and cash equivalents at Operation level 17,567 43,722
Restricted cash and cash equivalents at Operation level 331 15,420
Consolidated cash and cash equivalents 126,448 107,517
Net cash position ((1)) 53,085 60,073
Working capital surplus 84,047 102,430
Unrestricted cash and cash equivalents as at 31 December 2022 increased to
€126.4 million from €92.1 million at 31 December 2021. The increase in
cash balances is due to the cash flows generated during 2022. Cash balances
are unrestricted and include balances at operational and corporate level.
Restricted cash of €0.3 million represented the amount in escrow out of
which the Company has paid interest of €9.6 million on 7 and 8 April 2022
(following the trial in February and March 2022) and €1.1 million on 16 May
2022 to Astor under the Master Agreement. Following the payment made in May
2022, the balance (less an amount representing £280,000, or~€350k being the
remaining potential liability to Astor on costs) reverted to the Company and
it has been classified as unrestricted cash.
As of 31 December 2022, Atalaya reported a working capital surplus of €84.0
million, compared with a working capital surplus of €102.4 million at 31
December 2021. The situation in 2022 is that the decrease in working capital
surplus relates to the increase in current liabilities. Cash increased
compared to previous year. At 31 December 2022, trade payables have increased
by 36.0% compared with the same period last year, mainly attributed to
inflation and also timing differences.
The Directors consider current net cash position as well as the existing
levels of the commodity prices and the current liquidity position to mitigate
any potential financial risks linked to the liquidity position of the Company.
Overview of the Group's Cash Flows
(Euro 000's) Twelve month ended 31 Dec 2022 Twelve month ended 31 Dec 2021
Cash flows from operating activities 38,503 148,841
Cash flows used in investing activities (53,529) (87,531)
Cash flows from financing activities 22,411 1,851
Net increase in cash and cash equivalents 7,385 63,161
Net foreign exchange differences 11,546 6,589
Total net cash flow for the period 18,931 69,750
Cash and cash equivalents increased by €18.9 million in the twelve months
period ended 31 December 2022. This increase was due to cash from operating
activities amounting to €38.5 million, cash used in investing activities
amounting to €53.5 million and cash generated by financing activities
totalling €22.4 million, and net foreign exchange of €11.5 million.
Cash generated from operating activities before working capital changes was
€56.9 million in line with EBITDA of €55.3 million. Atalaya increased its
trade receivables by €24.5 million and its inventory levels by €14.1
million and trade payables increased in the period by €24.7 million.
Corporate tax paid during the period was €3.3 million.
Investing activities in 2022 amounted to €53.5 million, and the capitalised
expenditure relating to the tailings dam project and continuous enhancements
to the processing systems of the plant.
Financing activities in 2022 amounted to €22.4 million. The Company
increased its financing by €22.4 million mainly due to the use of existing
unsecured credit facilities to pay the Solar Plant. The payment was financed
by unsecured credit lines by four major Spanish banks having a three-year
tenure and an average annual interest rate of approximately two per cent. This
was offset by the payment of dividends of €5.1 million.
Foreign exchange
In FY2022, Atalaya recognised a foreign exchange gain of €11.5 million
(FY2021 gain: €6.6 million). The foreign exchange gain mainly related to
variances in EUR and USD conversion rates during the period as all sales are
settled and occasionally held in USD.
The following table summarises the movement in key currencies versus the EUR:
Twelve months ended Twelve months ended
31 Dec 2022 31 Dec 2021
Average rates for the periods
GBP - EUR 0.8528 0.8596
USD - EUR 1.0530 1.1827
Spot rates as at
GBP - EUR 0.8869 0.8403
USD - EUR 1.0666 1.1326
During 2022 and 2021, Atalaya did not have any currency hedging agreements.
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 worldwide.
8. Critical accounting policies, estimates, judgements, assumptions
and accounting changes
The preparation of Atalaya's Financial Statements in accordance with IFRS
required management to made estimates and assumptions that affected amounts
reported in the Financial Statements and accompanying notes. There is a full
discussion and description of Atalaya's critical accounting estimates and
judgements in the audited consolidated financial statements for the year ended
31 December 2022.
9. Other Information
Additional information about Atalaya Mining Plc. is available at www.sedar.com
(http://www.sedar.com) and at www.atalayamining.com
(http://www.atalayamining.com)
Consolidated financial statements on subsequent pages
By Order of the Board of Directors
Consolidated and Company Statements of Comprehensive Income
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 December 2022 and 2021
The Group The Company The Group The Company
(Euro 000's) Note 2022 2022 2021 2021
Revenue 5 361,846 57,756 405,717 65,849
Operating costs and mine site administrative expenses (288,275) - (192,073) -
Mine site depreciation, amortisation and impairment 13,14 (34,119) - (32,276) -
Gross profit 39,452 57,756 181,368 65,849
Administration and other expenses (9,954) (3,601) (9,715) (2,422)
Share based benefits 23 (1,279) - (899) -
Exploration expenses (4,257) - (1,800) -
Care and maintenance expenditure (3,053) - (2,116) -
Other income 286 286 - -
Operating profit 6 21,195 54,441 166,838 63,427
Net foreign exchange gain 4 11,546 3,439 6,589 1,450
Interest income from financial assets at fair value through profit and loss 8 - 9,157 - 12,854
Interest income from financial assets at amortised cost 8 624 3,779 57 2,398
Finance costs 9 (1,045) - (13,657) -
Profit before tax 32,320 70,816 159,827 80,129
Tax 10 (1,394) (617) (27,601) (862)
Profit for the year 30,926 70,199 132,226 79,267
Profit for the year attributable to:
- Owners of the parent 33,155 70,199 133,644 79,267
- Non-controlling interests (2,229) - (1,418) -
30,926 70,199 132,226 79,267
Earnings per share from operations attributable to equity holders of the
parent during the year:
Basic earnings per share (EUR cents per share) 11 23.7 - 96.7 -
Diluted earnings per share (EUR cents per share) 11 23.2 - 94.4 -
Profit for the year 30,926 70,199 132,226 79,267
Other comprehensive income: - - - -
Other comprehensive income that will not be reclassified to profit or loss in
subsequent periods (net of tax):
Change in fair value of financial assets through other comprehensive income (6) (6) (47) (47)
'OCI'
Total comprehensive income for the year 20 30,920 70,193 132,179 79,220
Total comprehensive income for the year attributable to: 33,148 70,193 133,597 79,220
- Owners of the parent (2,229) - (1,418) -
- Non-controlling interests 30,920 70,193 132,179 79,220
The notes on subsequent pages are an integral part of these consolidated and
company financial statements.
Consolidated and Company Statements of Financial Position
(All amounts in Euro thousands unless otherwise stated)
As at 31 December 2022 and 2021
31 Dec 2022 31 Dec 2022 31 Dec 2021 31 Dec 2021
(Euro 000's) Note The Group The Company The Group The Company
Assets
Non-current assets
Property, plant and equipment 13 354,908 - 333,096 -
Intangible assets 14 53,830 - 57,368 -
Investment in subsidiaries 15 - 74,911 - 64,171
Trade and other receivables 19 16,362 259,904 5,330 245,744
Non-current financial asset 20 1,101 - 1,101 -
Deferred tax asset 17 7,293 - 5,564 -
433,494 334,815 402,459 309,915
Current assets
Inventories 18 38,841 - 24,781 -
Trade and other receivables 19 64,155 48,831 50,128 2,415
Tax refundable 100 - 483 -
Other financial assets 20 33 33 39 39
Cash and cash equivalents 21 126,448 39,472 107,517 37,270
229,577 88,336 182,948 39,724
Total assets 663,071 423,151 585,407 349,639
Equity and liabilities
Equity attributable to owners of the parent
Share capital 22 13,596 13,596 13,447 13,447
Share premium 22 319,411 319,411 315,916 315,916
Other reserves 23 69,805 9,419 52,690 8,146
Accumulated profit 70,483 75,216 58,754 10,116
473,295 417,642 440,807 347,625
Non-controlling interests 24 (6,998) - (4,909) -
Total equity 466,297 417,642 435,898 347,625
Liabilities
Non-current liabilities
Trade and other payables 25 2,015 - 3,450 -
Provisions 26 24,083 - 26,578 -
Lease liability 27 4,378 - 4,913 -
Borrowings 28 20,768 - 34,050 -
51,244 - 68,991 -
Current liabilities
Trade and other payables 25 90,022 5,402 66,191 2,014
Lease liability 27 536 - 597 -
Current tax liabilities 10 1,425 107 336 -
Current provisions 26 952 - - -
Borrowings 28 52,595 - 13,394 -
145,530 5,509 80,518 2,014
Total liabilities 196,774 5,509 149,509 2,014
Total equity and liabilities 663,071 423,151 585,407 349,639
The notes on subsequent pages are an integral part of these consolidated and
company financial statements.
The consolidated and company financial statements were authorised for issue by
the Board of Directors on 21 March 2023 and were signed on its behalf.
Consolidated Statement of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 December 2022 and 2021
(Euro 000's) Note Share capital Share premium ((2)) Other reserves ((1)) Accum. Profits Total NCI Total equity
1 Jan 2022 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
Adjustment prior year - - - (53) (53) - (53)
Opening balance adjusted 13,447 315,916 52,690 58,701 440,754 (4,909) 435,845
Profit/(loss) for the period - - - 33,155 33,155 (2,229) 30,926
Change in fair value of financial assets through OCI - - (6) - (6) - (6)
Total comprehensive (loss)/ income - - (6) 33,155 33,149 (2,229) 30,920
Issuance of share capital 22 149 3,495 - - 3,644 - 3,644
Recognition of depletion factor 23 - - 12,800 (12,800) - - -
Recognition of share-based payments 23 - - 1,279 - 1,279 - 1,279
Recognition of non-distributable reserve 23 - - 316 (316) - - -
Recognition of distributable reserve 23 - - 2,726 (2,726) - - -
Other changes in equity - - - (432) (432) 140 (292)
Dividends paid - - - (5,099) (5,099) - (5,099)
31 Dec 2022 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
(Euro 000's) Note Share capital Share premium ((2)) Other reserves ((1)) Accum. Profits Total NCI Total equity
1 Jan 2021 13,439 315,714 40,049 (15,512) 353,690 (3,491) 350,199
Profit/(loss) for the period - - - 133,644 133,644 (1,418) 132,226
Change in fair value of financial assets through OCI - - (47) - (47) - (47)
Total comprehensive (loss)/income - - (47) 133,644 133,597 (1,418) 132,179
Issuance of share capital 22 8 202 - - 210 - 210
Recognition of depletion factor 23 - - 6,100 (6,100) - - -
Recognition of share-based payments 23 - - 899 - 899 - 899
Recognition of non-distributable reserve 23 - - 2,372 (2,372) - - -
Recognition of distributable reserve 23 - - 3,317 (3,317) - - -
Other changes in equity - - - (299) (299) - (299)
Dividends paid - - - (47,290) (47,290) - (47,290)
31 Dec 2021 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
( )
((1)) Refer to Note 23
((2)) The share premium reserve is not available for distribution.
The notes on subsequent pages are an integral part of these consolidated and
company financial statements.
Company Statement of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 December 2022 and 2021
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total
1 Jan 2021 13,439 315,714 7,294 (21,861) 314,586
Profit for the year - - - 79,267 79,267
Change in fair value of financial assets through OCI 20 - - (47) - (47)
Total comprehensive income - - (47) 79,267 79,220
Issuance of share capital 22 8 202 - - 210
Recognition of share-based payments 23 - - 899 - 899
Dividends paid - - - (47,290) (47,290)
31 Dec 2021/1 Jan 2022 13,447 315,916 8,146 10,116 347,625
Profit for the period - - - 70,199 70,199
Change in fair value of financial assets through OCI 20 - - (6) - (6)
Total comprehensive income - - (6) 70,199 70,193
Transactions with owners
Issuance of share capital 22 149 3,495 - - 3,644
Recognition of share-based payments 23 - - 1,279 - 1,279
Dividends paid - - - (5,099) (5,099)
31 Dec 2022 13,596 319,411 9,419 75,216 417,642
( )
((1)) Refer to Note 23
((2)) The share premium reserve is not available for distribution.
The notes on subsequent pages are an integral part of these consolidated and
company financial statements.
Consolidated Statement of Cash Flows
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 December 2022 and 2021
(Euro 000's) Note 2022 2021
Cash flows from operating activities
Profit before tax 32,320 159,827
Adjustments for:
Depreciation of property, plant and equipment 13 29,637 27,680
Amortisation of intangible assets 14 4,482 4,596
Recognition of share‑based payments 23 1,279 899
Interest income 8 (244) (57)
Interest expense 9 1,025 846
Unwinding of discounting 9 - 1,063
Finance provisions 9 - 11,737
Other provisions - 417
Legal provisions 26 (43) (61)
Net foreign exchange differences (11,546) (6,692)
Unrealised foreign exchange loss on financing activities 25 -
Cash inflows from operating activities before working capital changes 56,934 200,255
Changes in working capital:
Inventories 18 (14,060) (1,205)
Trade and other receivables 19 (24,471) (8,807)
Trade and other payables 25 24,662 (14,400)
Provisions 26 (91) (343)
Cash flows from operations 42,975 175,500
Interest expense on lease liabilities 27 (20) (11)
Interest paid (1,025) (846)
Tax paid (3,427) (25,802)
Net cash from operating activities 38,503 148,841
Cash flows from investing activities
Purchases of property, plant and equipment 13 (52,650) (32,440)
Purchases of intangible assets 14 (944) (2,148)
Payment of deferred consideration - (53,000)
Interest received 8 65 57
Net cash used in investing activities (53,529) (87,531)
Cash flows from financing activities
Lease payment 27 (617) (463)
Net proceeds from borrowings 24,484 49,446
Proceeds from issue of share capital 3,643 158
Dividends paid (5,099) (47,290)
Net cash from financing activities 22,411 1,851
Net increase in cash and cash equivalents 7,385 63,161
Net foreign exchange difference 11,546 6,589
Cash and cash equivalents:
At beginning of the year 21 107,517 37,767
At end of the year 21 126,448 107,517
The notes on subsequent pages are an integral part of these consolidated and
company financial statements.
Company Statement of Cash Flows
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 December 2022 and 2021
(Euro 000's) Note 2022 2021
Cash flows from operating activities
Profit before tax 70,816 80,129
Adjustments for:
Interest income 8 (36) -
Interest income from interest-bearing intercompany loans 8 (12,900) (15,252)
Net foreign exchange difference (3,439) -
Unrealised foreign exchange loss on financing activities (63) -
Cash inflows from operating activities before working capital changes 54,378 64,877
Changes in working capital:
Trade and other receivables 19 (61,273) 81,713
Trade and other payables 25 3,950 (20,103)
Cash flows from operations (2,945) 126,487
Tax paid (311) (1,614)
Net cash from/(used in) operating activities (3,256) 124,873
Cash flows from investing activities
Investment in subsidiaries 15 (9,461) (57,824)
Interest received 36 -
Interest income from interest-bearing intercompany loans 8 12,900 15,252
Net cash (used in)/from investing activities 3,475 (42,572)
Cash flows from financing activities
Proceeds from issue of share capital 22 3,643 210
Dividends paid 12 (5,099) (47,290)
Net cash used in financing activities (1,456) (47,080)
Net (decrease)/increase in cash and cash equivalents (1,237) 35,221
Net foreign exchange difference 3,439 -
Cash and cash equivalents:
At beginning of the year 21 37,270 2,049
At end of the year 21 39,472 37,270
The notes on subsequent pages are an integral part of these consolidated and
company financial statements.
1. Incorporation and summary of 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 in May 2005 under
the symbol ATYM. The Company continued to be listed on AIM as at 31 December
2022.
On 20 February 2023, Atalaya announced that applied a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX") with effective
date of the closing of trading on 7 March 2023. 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.
Additional information about Atalaya Mining Plc is available at
www.atalayamining.com (http://www.atalayamining.com) as per requirement of AIM
rule 26.
Change of name and share consolidation
Following the Company's Extraordinary General Meeting ("EGM") on 13 October
2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc
became effective on 21 October 2015. On the same day, the consolidation of
ordinary shares came into effect, whereby all shareholders received one new
ordinary share of nominal value Stg £0.075 for every 30 existing ordinary
shares of nominal value Stg £0.0025.
Principal activities
Atalaya is a European mining and development company. The 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 European 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 three 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 Q1 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 reserves, which will provide high potential to the
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).
Under the terms of the agreement Atalaya will make an aggregate €1.4 million
cash payment in two instalments of approximately the same amount. The first
payment is to be executed once the project is permitted and second and final
payment when first production is achieved from the concession. Proyecto Masa
Valverde is currently in the permitting process.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51% interest in Rio
Narcea Nickel, S.L., which owns 9 investigation permits. The acquisition also
provided a 100% interest in three investigation permits that are also located
along the Ossa- Morena Metallogenic Belt. In Q3 2022, Atalaya increased its
ownership interest in POM to 99.9%, up from 51%, following completion of a
capital increase that will fund exploration activities. During 2022 Atalaya
rejected 8 investigation permits.
Atalaya will pay a total of €2.5 million in cash in three instalments and
grant a 1% net smelter return ("NSR") royalty over all acquired permits. The
first payment of €0.5 million will be made following execution of the
purchase agreement. The second and third instalments of €1 million each will
be made once the environmental impact statement ("EIS") and the final mining
permits for any project within any of the investigation permits acquired under
the Transaction are secured.
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.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
consolidated and company financial statements are set out below. These
policies have been consistently applied to all the years presented, unless
otherwise stated.
2.1 Basis of preparation
(a) Overview
The financial statements of Atalaya Mining Plc have been prepared in
accordance with International Financial Reporting Standards ("IFRS"). IFRS
comprise the standards issued by the International Accounting Standards Board
("IASB").
The financial statements are presented in € and all values are rounded to
the nearest thousand (€'000), except where otherwise indicated.
Additionally, the financial statements have also been prepared in accordance
with the IFRS as adopted by the European Union and the requirements of the
Cyprus Companies Law, Cap.113. For the year ending 31 December 2022, the
standards applicable for IFRS's as adopted by the EU are aligned with the
IFRS's as issued by the IASB.
The consolidated financial statements have been prepared on a historical cost
basis except for the revaluation of certain financial instruments that are
measured at fair value at the end of each reporting period, as explained below
and in note 3.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgment in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 3.3.
(b) Going concern
The Directors have considered and debated different possible scenarios on the
Company's operations, financial position and forecast for a period of at least
12 months since the approval of these financial statements. Possible scenarios
range from (i) disruption in Proyecto Riotinto; (ii) market volatility in
commodity and electricity prices; and (iii) availability of existing credit
facilities.
The Directors, after reviewing these scenarios, the current cash resources,
forecasts and budgets, timing of cash flows, borrowing facilities, sensitivity
analyses and considering the associated uncertainties to the Group's
operations have a reasonable expectation that the Company has adequate
resources to continue operating in the foreseeable future.
Accordingly, these financial statements have been prepared based on accounting
principles applicable to a going concern which assumes that the Group and the
Company will realise its assets and discharge its liabilities in the normal
course of business. Management has carried out an assessment of the going
concern assumption and has concluded that the Group and the Company will
generate sufficient cash and cash equivalents to continue operating for the
next twelve months since the approval of these consolidated financial
statements.
Management continues to monitor the impact of geopolitical developments.
Currently no significant impact is expected in the operations of the Group.
2.2 New standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the unaudited condensed
interim consolidated financial statements are consistent with those followed
in the preparation of the Group's annual consolidated financial statements for
the year ended 31 December 2021, except for the adoption of new standards
effective as of 1 January 2022.
The Group has adopted all the new and revised IFRSs and International
Accounting Standards (IASs) which are relevant to its operations and are
effective for accounting periods commencing on 1 January 2022.
Several other amendments and interpretations apply for the first time in 2022,
but do not have a significant impact on the financial statements of the Group.
The Group has not early adopted any standards, interpretations or amendments
that have been issued but are not yet effective.
IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37
Provisions, Contingent Liabilities and Contingent Assets as well as Annual
Improvements 2018-2020 (Amendments)
The amendments are effective for annual periods beginning on or after 1
January 2022 with earlier application permitted. The IASB has issued
narrow-scope amendments to the IFRS Standards as follows:
- IFRS 3 Business Combinations (Amendments) update a reference in
IFRS 3 to the previous version of the IASB's Conceptual Framework for
Financial Reporting to the current version issued in 2018 without
significantly changing the accounting requirements for business combinations.
- IAS 16 Property, Plant and Equipment (Amendments) prohibit a
company from deducting from the cost of property, plant and equipment any
proceeds from the sale of items produced while bringing the asset to the
location and condition necessary for it be capable of operating in the manner
intended by management. Instead, a company recognizes such sales proceeds and
related cost in profit or loss.
- IAS 37 Provisions, Contingent Liabilities and Contingent Assets
(Amendments) specify which costs a company includes in determining the cost of
fulfilling a contract for the purpose of assessing whether a contract is
onerous. The amendments clarify, the costs that relate directly to a contract
to provide goods or services include both incremental costs and an allocation
of costs directly related to the contract activities.
- Annual Improvements 2018-2020 make minor amendments to IFRS 1
First-time Adoption of International Financial Reporting Standards, IFRS 9
Financial Instruments, IAS 41 Agriculture and the Illustrative Examples
accompanying IFRS 16 Leases.
These amendments had no impact on the consolidated financial statements of the
Group.
IFRS 16 Leases-Covid 19 Related Rent Concessions beyond 30 June 2021
(Amendment)
The Amendment applies to annual reporting periods beginning on or after 1
April 2021, with earlier application permitted, including in financial
statements not yet authorized for issue at the date the amendment is issued.
In March 2021, the Board amended the conditions of the practical expedient in
IFRS 16 that provides relief to lessees from applying the IFRS 16 guidance on
lease modifications to rent concessions arising as a direct consequence of the
Covid-19 pandemic. Following the amendment, the practical expedient now
applies to rent concessions for which any reduction in lease payments affects
only payments originally due on or before 30 June 2022, provided the other
conditions for applying the practical expedient are met.
The Group has not received Covid-19-related rent concessions.
2.3 Fair value estimation
The fair values of the Group's financial assets and liabilities approximate
their carrying amounts at the reporting date.
The fair value of financial instruments traded in active markets, such as
publicly traded trading and other financial assets is based on quoted market
prices at the reporting date. The quoted market price used for financial
assets held by the Group is the current bid price. The appropriate quoted
market price for financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. The Group uses a variety
of methods, such as estimated discounted cash flows, and makes assumptions
that are based on market conditions existing at the reporting date.
Fair value measurements recognised in the consolidated statement of financial
position
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, Grouped into Levels
1 to 3 based on the degree to which the fair value is observable.
· Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
· Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
THE GROUP
(Euro 000's) Level 1 Level 2 Level 3 Total
31 December 2022
Other current financial assets
Financial assets at FV through OCI 33 - 1,101 1,134
Trade and other receivables
Receivables (subject to provisional pricing) - 27,557 - 27,557
Total 33 27,557 1,101 28,691
31 December 2021
Other current financial assets
Financial assets at FV through OCI 39 - 1,101 1,140
Trade and other receivables
Receivables (subject to provisional pricing) - 29,148 - 29,148
Total 39 29,148 1,101 30,288
THE COMPANY
(Euro 000's) Level 1 Level 2 Level 3 Total
31 December 2022
Non-current receivables
Financial assets at FV through profit and loss (note 30.4) - - 14,247 14,247
Other current financial assets
Financial assets at FV through OCI 33 - - 33
Total 33 - 14,247 14,280
31 December 2021
Non-current receivables
Financial assets at FV through profit and loss (note 30.4) - - 176,292 176,292
Other current financial assets
Financial assets at FV through OCI 39 - - 39
Total 39 - 176,292 176,331
2.4 Critical accounting estimates and judgements
The preparation of the consolidated financial statements require management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities at the date of the consolidated
financial statements. Estimates and assumptions are continually evaluated and
are based on management's experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate
of the amount can be made. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time
is recognised as a finance cost.
A full analysis of critical accounting estimates and judgements is set out in
Note 3.3 to the 2022 audited financial statements.
3. Business and geographical segments
Business segments
The Group has only one distinct business segment, being that of mining
operations, which include mineral exploration and development.
Copper concentrates produced by the Group are sold to three off-takers as per
the relevant offtake agreements. In addition, the Group has spot agreements
for the concentrates not committed to off-takers.
Geographical segments
The Group's mining activities are located in Spain. The commercialisation of
the copper concentrates produced in Spain is carried out through Cyprus. Sales
transactions to related parties are on arm's length basis in a similar manner
to transaction with third parties. Accounting policies used by the Group in
different locations are the same as those contained in Note 2.
(Euro 000's) Cyprus Spain Other Total
2022
Revenue - from external customers 30,662 331,184 - 361,846
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation 19,714 35,867 (267) 55,314
Depreciation/amortisation charge - (34,119) - (34,119)
Net foreign exchange gain 5,368 6,178 - 11,546
Finance income 36 588 - 624
Finance cost (1) (1,044) - (1,045)
Profit/(loss) before tax 25,117 7,470 (267) 32,320
Tax (3,352) 1,958 - (1,394)
Profit/(loss) for the period 21,765 9,428 (267) 30,926
Total assets 108,486 528,829 25,756 663,071
Total liabilities (3,772) (193,002) - (196,774)
Depreciation of property, plant and equipment - 29,637 - 29,637
Amortisation of intangible assets - 4,482 - 4,482
Total net additions of non-current assets - 74,695 - 74,695
(Euro 000's) Cyprus Spain Other Total
2021
Revenue 40,827 364,890 - 405,717
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation 30,284 168,880 (50) 199,114
Depreciation/amortisation charge - (32,276) - (32,276)
Net foreign exchange gain 2,301 4,285 3 6,589
Finance income - 57 - 57
Finance cost - (13,657) - (13,657)
Profit/(loss) before tax 32,585 127,289 (47) 159,827
Tax (3,776) (23,825) - (27,601)
Profit for the year 28,809 103,464 (47) 132,226
Total assets 77,750 506,523 1,134 585,407
Total liabilities (1,934) (147,567) (8) (149,509)
Depreciation of property, plant and equipment - 27,680 - 27,680
Amortisation of intangible assets - 4,596 - 4,596
Total additions of non-current assets - 41,040 - 41,040
4. Business and geographical segments
Revenue represents the sales value of goods supplied to customers; net of
value added tax. The following table summarises sales to customers with whom
transactions have individually exceeded 10.0% of the Group's revenues.
(Euro 000's) 2022 2021
Segment €'000 Segment €'000
Offtaker 1 Copper 71,839 Copper 130,642
Offtaker 2 Copper 108,158 Copper 91,651
Offtaker 3 Copper 181,822 Copper 173,904
5. Revenue
THE GROUP
(Euro 000's) 2022 2021
Revenue from contracts with customers ((1)) 371,303 399,966
Fair value gain relating to provisional pricing within sales ((2)) (9,457) 5,751
Total revenue 361,846 405,717
All revenue from copper concentrate is recognised at a point in time when the
control is transferred. Revenue from freight services is recognised over time
as the services are provided.
((1) ) Included within 2022 revenue there is a transaction price of
€7.6 million (€2.8 million in 2021) related to the freight services
provided by the Group to the customers arising from the sales of copper
concentrate under CIF incoterm.
((2) ) Provisional pricing impact represented the change in fair
value of the embedded derivative arising on sales of concentrate.
THE COMPANY
(Euro 000's) 2022 2021
Sales of services to related companies (Note 30.3) 2,756 1,849
Dividends 55,000 64,000
Other income 286 -
58,042 65,849
6. Expenses by nature
THE GROUP
(Euro 000's) 2022 2021
Operating costs 246,840 150,954
Rents (Note 27) 5,678 5,752
Care and maintenance expenditure 15,603 13,720
Exploration expenses 3,723 1,800
Employee benefit expense (Note 7) 24,556 23,793
Compensation of key management personnel 2,189 2,335
Auditors' remuneration - audit 345 283
Other accountants' remuneration 138 86
Consultants' remuneration 1,087 921
Depreciation of property, plant and equipment (Note 13) 29,637 27,680
Amortisation of intangible assets (Note 14) 4,482 4,596
Travel costs 282 105
Share option-based employee benefits 1,279 899
Shareholders' communication expense 305 251
On-going listing costs 533 352
Legal costs 1,469 1,086
Public relations and communication development 1,035 650
Insurances 83 90
Other expenses and provisions 1,673 3,526
Total 340,937 238,879
THE COMPANY
(Euro 000's) 2022 2021
Key management remuneration 540 547
Auditors' remuneration - audit 139 146
Other accountants' remuneration 57 42
Consultants' remuneration 224 222
Management fees (Note 30.3) 66 61
Travel costs 2 3
Shareholders' communication expense 305 251
On-going listing costs 533 352
Legal costs 1,258 667
Insurances 84 91
Other expenses and provisions 393 40
Total 3,600 2,422
7. Employee benefit expense
THE GROUP
(Euro 000's) 2022 2021
Wages and salaries 18,438 17,652
Social security and social contributions 5,659 5,583
Employees' other allowances 16 17
Bonus to employees 443 541
24,556 23,793
The average number of employees and the number of employees at year end by
office are:
Average At year end
Number of employees 2022 2021 2022 2021
Spain - Full time 473 406 462 422
Spain - Part time 4 91 3 81
Cyprus - Full time 1 1 1 1
Cyprus - Part time 2 2 2 2
Total 480 500 468 506
THE COMPANY
The company had no employees during the year ended 31 December 2022 and 2021.
8. Finance income
THE GROUP
(Euro 000's) 2022 2021
Interest income 244 57
Unwinding of discount on mine rehabilitation provision (Note 26) 380 -
624 57
THE COMPANY
(Euro 000's) 2022 2021
Interest income from interest-bearing intercompany loans at fair value through 9,157 12,854
profit and loss (Note 30.3)
Interest income from interest-bearing intercompany loans at amortised cost 3,743 2,398
(Note 30.3)
Other interest income 36 -
12,936 15,252
Interest income relates to interest received on bank balances.
9. Finance costs
THE GROUP
(Euro 000's) 2022 2021
Interest expense:
Other interest 1,025 846
Interest expense on lease liabilities 20 11
Other finance expenses - 11,737
Unwinding of discount on mine rehabilitation provision (Note 26) - 1,063
1,045 13,657
Other finance expense is related to the interest calculation proposed by
Astor.
10. Tax
THE GROUP
(Euro 000's) 2022 2021
Current income tax charge 3,123 24,359
Deferred tax related to utilization of losses for the year (Note 17) - 3,856
Deferred tax income relating to the origination of temporary differences (Note (4,544) (2,986)
17)
Deferred tax expense relating to reversal of temporary differences (Note 17) 2,815 2,372
1,394 27,601
The tax on the Group's results before tax differs from the theoretical amount
that would arise using the applicable tax rates as follows:
(Euro 000's) 2022 2021
Accounting profit before tax 32,318 159,827
Tax calculated at the applicable tax rates of the Company - 12.5% 4,040 19,978
Tax effect of expenses not deductible for tax purposes 1,029 2,743
Tax effect of tax loss for the year 3,819 359
Tax effect of allowances and income not subject to tax (7,857) (2,629)
Effect of higher tax rates in other jurisdictions of the group 2,092 7,764
Tax effect of tax losses brought forward - (3,856)
Deferred tax (Note 17) (1,729) 3,242
Tax charge 1,394 27,601
THE COMPANY
(Euro 000's) 2022 2021
Current income tax charge 617 862
617 862
Tax losses carried forward
As at 31 December 2022, the Group had tax losses carried forward amounting to
€0.2 million from the Spanish subsidiaries for the period 2008 to 2015 and
€4.1 million for the period 2022.
Cyprus
The corporation tax rate is 12.5%. Under certain conditions interest income
may be subject to defence contribution at the rate of 30%. In such cases this
interest will be exempt from corporation tax. In certain cases, dividends
received from abroad may be subject to defence contribution at the rate of 17%
for 2014 and thereafter. Under current legislation, tax losses may be carried
forward and be set off against taxable income of the five succeeding years.
Companies which do not distribute 70% of their profits after tax, as defined
by the relevant tax law, within two years after the end of the relevant tax
year, will be deemed to have distributed as dividends 70% of these profits.
Special contribution for defence at 20% for the tax years 2012 and 2013 and
17% for 2014 and thereafter will be payable on such deemed dividends to the
extent that the shareholders (companies and individuals) are Cyprus tax
residents and Cyprus domiciled. The amount of deemed distribution is reduced
by any actual dividends paid out of the profits of the relevant year at any
time. This special contribution for defence is payable by the Company for the
account of the shareholders.
Spain
The corporation tax rate for 2022 and 2021 is 25%. The Spanish tax reform
approved in 2014 reduced the general corporation tax rate from 30% to 28% in
2015 and to 25% in 2016, and introduced, among other changes, a 10% reduction
in the tax base subject to equity increase and other requirements. Under
current legislation, tax losses may be carried forward and be set off against
taxable income with no limitation.
11. Earnings per share
The calculation of the basic and diluted earnings per share attributable to
the ordinary equity holders of the Company is based on the following data:
(Euro 000's) 2022 2021
Parent company (676) (1,773)
Subsidiaries 33,831 135,417
Profit attributable to equity holders of the parent 33,155 133,644
Weighted number of ordinary shares for the purposes of basic earnings per 139,757 138,196
share ('000)
Basic profit per share (EUR cents/share) 23.7 96.7
Weighted number of ordinary shares for the purposes of diluted earnings per
share ('000)
142,834 141,526
Diluted profit per share (EUR cents/share) 23.2 94.4
At 31 December 2022, there are 3,543,500 options (Note 23) and nil warrants
(Note 22) (At 31 December 2021: 3,841,750 options and nil warrants) which have
been included when calculating the weighted average number of shares for
FY2022.
12. Dividends paid
Cash dividends declared and paid during the year:
(Euro 000's) 31 Dec 2022 31 Dec 2021
Inaugural dividend - 47,290
Interim dividend 5,099 -
Total cash dividends paid in the year to ordinary shareholders 5,099 47,290
The Board of Directors has proposed a final dividend for 2022 of US$0.0385 per
ordinary share, which is equivalent to approximately 3.15 pence per share
totalling €5.0 million. Payment of the Final Dividend is subject to
shareholder approval at the Company's 2023 Annual General Meeting.
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
Dividend Policy
Following the expansion of Proyecto Riotinto's processing capacity to 15 Mtpa,
Atalaya has been generating robust cash flow as a result of the plant
consistently operating above nameplate capacity, coupled with the strong
copper price environment.
Accordingly, on 27 October 2021, Atalaya initiated a sustainable dividend
policy that will allow for continued investments in its portfolio of low
capital intensity growth projects, such as the San Dionisio deposit, Proyecto
Masa Valverde and Proyecto Touro.
Consistent with its strategy to create and deliver shareholder value, the
Company approved a Dividend Policy that will make an annual pay-out of between
30% and 50% of free cash flow generated during the applicable financial year.
The Dividend Policy took effect during the 2022 financial year. The annual
Ordinary Dividend will be paid in two half-yearly instalments and announced in
conjunction with interim and full year results.
The declaration and payment of all future dividends under the new policy will
remain subject to approval by the Board of Directors.
13. Property, plant and equipment
(Euro 000's) Land and buildings Right of use assets((5)) Plant and equipment Assets under construction ((3)) Deferred mining costs ((2)) Other assets ((1)) Total
2022
Cost
At 1 January 2022 65,003 7,076 283,346 22,860 51,667 801 430,753
Additions 2,383 - 1,262 49,473 691 - 53,809
Increase in rehab. provision 1,727 - - - - - 1,727
Reclassifications((4)) 15,300 - 6,727 (22,098) - 71 -
Advances 103 - - - - - 103
Write-off (4,190) - - - - - (4,190)
At 31 December 2022 80,326 7,076 291,335 50,235 52,358 872 482,202
Depreciation
At 1 January 2022 16,026 1,546 67,991 - 11,380 714 97,657
Charge for the year 4,428 452 21,191 - 3,541 25 29,637
At 31 December 2022 20,454 1,998 89,182 - 14,921 739 127,294
Net book value at 31 December 2022 59,872 5,078 202,153 50,235 37,437 133 354,908
2021
Cost
At 1 January 2021 64,034 6,569 268,051 15,828 41,868 801 397,151
Additions 270 507 1,941 20,386 9,799 - 32,903
Increase in rehab. provision 655 - - - - - 655
Reclassifications - - 13,354 (13,354) - - -
Advances 44 - - - - - 44
At 31 December 2021 65,003 7,076 283,346 22,860 51,667 801 430,753
Depreciation
At 1 January 2021 11,671 956 48,134 - 8,528 688 69,977
Charge for the year 4,355 590 19,857 - 2,852 26 27,680
At 31 December 2021 16,026 1,546 67,991 - 11,380 714 97,657
Net book value at 31 December 2021
48,977 5,530 215,355 22,860 40,287 87 333,096
((1)) Includes motor vehicles, furniture, fixtures and office equipment which
are depreciated over 5-10 years.
((2)) Stripping costs
((3)) Assets under construction at 31 December 2022 amounted to €50.2
million (2021: €22.9 million). It includes the capitalisation of costs
related sustaining capital expenses (€6.3 million), tailing dams (€14.1
million) and solar plant (€22.8m).
((4)) Transfers related to sustaining Capex (€6.8 million) and the Tailing
Dam Project (€15.3 million) which were finalised works.
((5)) See leases in Note 27.
The Group
The above fixed assets are mainly located in Spain.
THE COMPANY
(Euro 000's) Other
assets((1)) Total
2022
Cost
At 1 January 2022 15 15
At 31 December 2022 15 15
Depreciation
At 1 January 2022 15 15
Charge for the year - -
At 31 December 2022 15 15
Net book value at 31 December 2022 - -
2021
Cost
At 1 January 2021 15 15
At 31 December 2021 15 15
Depreciation
At 1 January 2021 15 15
Charge for the year - -
At 31 December 2021 15 15
Net book value at 31 December 2021 - -
((1) ) Includes furniture, fixtures and office equipment which
were depreciated over 5-10 years.
14. Intangible assets
The Group
(Euro 000's) Licences, R&D and Software
Permits ((1)) Total
2022
Cost
On 1 January 2022 80,358 8,595 88,953
Additions 897 47 944
At 31 December 2022 81,255 8,642 89,897
Amortisation
On 1 January 2022 23,214 8,371 31,585
Charge for the year 4,413 69 4,482
At 31 December 2022 27,627 8,440 36,067
Net book value at 31 December 2022 53,628 202 53,830
2021
Cost
On 1 January 2021 78,210 8,595 86,805
Additions 2,148 - 2,148
At 31 December 2021 80,358 8,595 88,953
Amortisation
On 1 January 2021 18,683 8,306 26,989
Charge for the year 4,531 65 4,596
At 31 December 2021 23,214 8,371 31,585
Net book value at 31 December 2021 57,144 224 57,368
((1) ) Permits include the mining rights of Proyecto Touro, Masa
Valverde and Ossa Morena
The ultimate recovery of balances carried forward in relation to areas of
interest or all such assets including intangibles is dependent on successful
development, and commercial exploitation, or alternatively the sale of the
respective areas.
The Group conducts impairment testing in case there is an indicator of
impairment. Atalaya assessed its assets concluding that there are no
indicators of impairment for either Proyecto Riotinto or any other as of 31
December 2022.
15. Investment in subsidiaries
(Euro 000's) 2022 2021
The Company
Opening amount at cost minus provision for impairment 64,171 5,448
Increase of investment ((2)) 10,739 58,723
Closing amount at cost less provision for impairment 74,910 64,171
The directly owned subsidiaries of the Group, the percentage of equity owned
and the main country of operation are set out below. These interests are
consolidated within these financial statements.
Effective proportion of shares held in 2022((3)) Effective proportion of shares held in 2021((3))
Date of incorporation/ Principal activity Country of incorporation
Subsidiary companies acquisition
Atalaya Touro (UK) Ltd 10 March 2017 Holding United Kingdom 100% 100%
Atalaya Minasderiotinto Project (UK) Ltd((1)) United Kingdom
10 Sep 2008 Holding 100% 100%
EMED Marketing Ltd 08 Sep 2008 Trading Cyprus 100% 100%
EMED Mining Spain SLU((2)) 12 April 2007 Exploration Spain - 100%
Atalaya Financing Ltd 16 Sep 2020 Financing Cyprus 100% 100%
((1)) The increase of €10.8 million related to a share capital increase of
Atalaya Minasderiotinto Project (UK) Ltd. amounting to €9.5 million and
share-based payment expense of €1.3 million (2021: €0.9 million).
((2)) EMED Mining Spain, S.L. was disposed on 4 January 2022
((3)) The effective proportion of shares held as at 31 December 2022 and 2021
remained unchanged.
16. Investment in joint venture
Country of incorporation Effective proportion of shares
Company name Principal activities held at 31 December 2015
Recursos Cuenca Minera S.L. Exploitation of tailing dams and waste areas resources Spain 50%
In 2012 ARM entered into a 50/50 joint venture with Rumbo to evaluate and
exploit the potential of the class B resources in the tailings dam and waste
areas at The Proyecto Riotinto. Under the joint venture agreement, ARM will be
the operator of the joint venture and will reimburse Rumbo for the costs
associated with the application for classification of the Class B resources.
ARM will fund the initial expenditure of a feasibility study up to a maximum
of €2.0 million. Costs are then borne by the joint venture partners in
accordance with their respective ownership interests.
The Group's significant aggregate amounts in respect of the joint venture are
as follows:
(Euro 000's) 2022 2021
Intangible assets 94 94
Trade and other receivables 2 2
Cash and cash equivalents 21 21
Trade and other payables (115) (115)
Net assets 2 2
Revenue - -
Expenses - -
Net profit/(loss) after tax - -
17. Deferred tax
Consolidated statement of financial position Consolidated income statement
(Euro 000's) 2022 2021 2022 2021
The Group
Deferred tax asset
At 1 January 5,564 8,805 - -
Deferred tax related to utilization of losses for the year (Note 10)
- (3,856) - 3,856
Deferred tax income relating to the origination of temporary differences (Note
10)
4,544 2,986 (4,544) (2,986)
Deferred tax expense relating to reversal of temporary differences (Note 10)
(2,815) (2,371) 2,815 2,371
At 31 December 7,293 5,564
Deferred tax (expense)/income (Note 10) (1,729) 3,241
Deferred tax assets are recognised for the carry-forward of unused tax losses
and unused tax credits to the extent that it is probable that taxable profits
will be available in the future against which the unused tax losses/credits
can be utilised. The Company held tax losses amounted to €4.4 million in
Spain.
18. Inventories
(Euro 000's) 2022 2021
The Group
Finished products 4,547 5,185
Materials and supplies 31,330 18,216
Work in progress 2,964 1,380
38,841 24,781
As at 31 December 2022, copper concentrate produced and not sold amounted to
3,529 tonnes (FY2021: 5,254 tonnes). Accordingly, the inventory for copper
concentrate was €4.5 million (FY2021: €5.2 million). During the year 2022
the Group recorded cost of sales amounting to €289.0 million (FY2021:
€192.1 million).
Materials and supplies relate mainly to machinery spare parts. Work in
progress represents ore stockpiles, which is ore that has been extracted and
is available for further processing.
19. Trade and other receivables
(Euro 000's) 2022 2021
THE GROUP
Non-current trade and other receivables
Deposits 256 303
Loans 12,865 2,332
Other non-current receivables 3,241 2,695
16,362 5,330
Current trade and other receivables
Trade receivables at fair value - subject to provisional pricing 14,757 8,865
Trade receivables from shareholders at fair value - subject to provisional 12,800 20,283
pricing (Note 30.5)
Other receivables from related parties at amortised cost (Note 30.3) 56 56
Deposits 37 21
VAT receivable 28,856 17,300
Tax advances 9 -
Prepayments 5,845 3,303
Other current assets 1,795 300
64,155 50,128
Allowance for expected credit losses - -
Total trade and other receivables 80,517 55,458
(Euro 000's) 2022 2021
THE COMPANY
Non-current trade and other receivables
Receivables from own subsidiaries at amortised cost (Note 30.4) 245,657 69,452
Receivables from own subsidiaries at fair value through profit and loss (Note 14,247 176,292
30.4)
259,904 245,744
Current trade and other receivables
Tax advances CIT - 279
Receivables from own subsidiaries at amortised cost (Note 30.4) 48,774 2,084
Other receivables 57 52
Total current trade and other receivables 48,831 2,415
Trade receivables are shown net of any interest applied to prepayments.
Payment terms are aligned with offtake agreements and market standards and
generally are 7 days on 90% of the invoice and the remaining 10% at the
settlement date which can vary between 1 to 5 months. The fair value of trade
and other receivables approximate their book values.
Non-current deposits included €250k (YTD 2021: €250k) as a collateral for
bank guarantees, which was recorded as restricted cash (or deposit).
Restricted cash related to the collateral was reclassified to non-current
trade and other receivables since the deposit is considered to be long term.
Loans are related to an agreement entered by the Group and Lain Technologies
Ltd in relation to the construction of the pilot plan to develop the E-LIX
System. The Loan is secured with the pilot plant, has a grace period of up to
four years and repayment terms depending on future investments on the system.
Amounts drawn down bear interest at 2%. The increase is resulted from the
drawdowns withdraw required for the pilot plant construction.
20. Other Financial assets at FVOCI
The Group
(Euro 000's) 2022 2021
Financial asset at fair value through OCI (see (a)) below) 1,134 1,140
Total current 33 39
Total non-current 1,101 1,101
THE COMPANY
(Euro 000's) 2022 2021
Financial asset at fair value through OCI (see (a)) below) 33 39
Total current 33 39
a) Financial assets at fair value through OCI
The Group
(Euro 000's) 2022 2021
At 1 January ((1)) 1,140 1,187
Fair value change recorded in equity (Note 23) (6) (47)
At 31 December 1,134 1,140
THE COMPANY
(Euro 000's) 2022 2021
At 1 January ((1)) 39 86
Fair value change recorded in equity (Note 23) (6) (47)
At 31 December 33 39
Country of incorporation Effective proportion of shares
Company name Principal activities held at 31 December 2022
Explotaciones Gallegas del Cobre SL Exploration company Spain 12.5%
KEFI Minerals Plc Exploration and development mining company listed on AIM UK 0.19%
Prospech Limited Exploration company Australia 0.53%
(1) The Group decided to recognise changes in the fair value through other
comprehensive income ('OCI'), as explained in Note 2.12.
21. Cash and cash equivalents
The Group
(Euro 000's) 31 Dec 2022 31 Dec 2021
Unrestricted cash and cash equivalents at Group level 108,550 48,375
Unrestricted cash and cash equivalents at Operation level 17,567 43,722
Restricted cash and cash equivalents at Operation level 331 15,420
Consolidated cash and cash equivalents 126,448 107,517
As at 31 December 2022, the Group's operating subsidiary held restricted cash
of €0.3 million of a provision for legal costs related to Astor.
Cash and cash equivalents denominated in the following currencies:
(Euro 000's) 2022 2021
Euro - functional and presentation currency 84,146 30,145
Great Britain Pound 895 36
United States Dollar 41,407 77,336
126,448 107,517
The Company
(Euro 000's) 2022 2021
Cash at bank and on hand 39,472 37,270
Cash and cash equivalents denominated in the following currencies:
Euro - functional and presentation currency 38,496 22
Great Britain Pound 879 36
United States Dollar 97 37,212
39,472 37,270
22. Share capital
Nr. Share Share
of Shares capital Premium Total
Authorised '000's £ 000's £ 000's £ 000's
Ordinary shares of £0.075 each 200,000 15,000 - 15,000
Issued and fully paid 000's Euro 000's Euro 000's Euro 000's
1 January 2021 138,141 13,439 315,714 329,153
Issue Date Price (£) Details
12-Feb-21 2.015 Exercised share options((c)) 41 4 91 95
18-May-21 2.015 Exercised share options((d)) 20 1 45 46
18-May-21 1.475 Exercised share options((d)) 10 1 15 16
15 Dec 2021 1.475 Exercised share options((e)) 9 2 43 45
15 Dec 2021 2.015 Exercised share options((e)) 15 - 8 8
31 December 2021/1 January 2022 138,236 13,447 315,916 329,363
22 Jan 2022 1.44 Exercised share options((b)) 314 28 512 540
22 Jan 2022 2.015 Exercised share options((b)) 321 29 746 775
22 Jan 2022 2.045 Exercised share options((b)) 400 36 941 977
22 Jan 2022 1.475 Exercised share options((b)) 451 42 754 796
22 Jan 2022 3.09 Exercised share options((b)) 135 12 505 517
23 June 2022 1.475 Exercised share options((a)) 23 2 37 39
31 December 2022 139,880 13,596 319,411 333,007
The Company´s share capital at 31 December 2022 is 139,879,209 ordinary
shares (138,235,959 in 2021) of Stg £0.075 each.
Authorised capital
The Company's authorised share capital is 200,000,000 ordinary shares of
£0.075 each.
Issued capital
a) On 23 June 2022, the Company announced that it has issued 22,500
ordinary shares of 7.5p in the Company ("Option Shares") pursuant to an
exercise of share options by an employee.
b) On 26 January 2022, the Company announced that is was notified that
PDMRs exercised a total of 1,350,000 options. Further details (including
details of sales of shares following the exercise of options) are given in
Note 23.
c) On 12 February 2021, the Company was notified that certain
employees exercised options over 40,750 ordinary shares of £0.075 at a price
of £2.015, thus creating a share premium of €91k.
d) On 18 May 2021, the Company was notified that certain employees
exercised options over 30,000 ordinary shares of £0.075 at a price between
£1.475 and £2.015, thus creating a share premium of €61k.
e) On 15 December 2021, the Company was notified that certain
employees exercised options over 24,500 ordinary shares of £0.075 at a price
between £1.475 and £2.015, thus creating a share premium of €50k.
Details of share options outstanding as at 31 December 2022:
Grant date Expiry date Exercise price £ Share options
29 May 2019 28-May-2024 2.015 666,500
30 June 2020 29 June 2030 1.475 516,000
24 June 2021 23 June 2031 3.090 1,016,000
26 January 2022 25 January 2032 4.160 120,000
22 June 2022 30 June 2027 3.575 1,225,000
Total 3,543,500
Weighted average Share options
exercise price £
At 1 January 2022 2.154 3,841,750
Granted options during the year 3.627 1,345,000
Options executed during the year 1.844 (1,643,250)
31 December 2022 2.857 3,543,500
23. Other reserves
THE GROUP
(Euro 000's) Share option Bonus share Depletion factor ((1)) FV reserve of financial assets at FVOCI ((2)) Non-distributable reserve ((3)) Distributable reserve((4)) Total
At 1 January 2021 8,187 208 25,033 (1,100) 5,628 2,093 40,049
Recognition of depletion factor - - (55) - - 6,155 6,100
Recognition of non-distributable reserve - - - - 2,372 - 2,372
Recognition of distributable reserve - - - - - 3,317 3,317
Recognition of share based payments 899 - - - - - 899
Change in fair value of financial assets at fair value through OCI (Note 20) - - - (47) - - (47)
Other changes in reserves - - - - - - -
At 31 December 2021 9,086 208 24,978 (1,147) 8,000 11,565 52,690
Recognition of depletion factor - - 12,800 - - - 12,800
Recognition of non-distributable reserve - - - - 316 - 316
Recognition of distributable reserve - - - - - 2,726 2,726
Recognition of share based payments 1,279 - - - - - 1,279
Change in fair value of financial assets at fair value through OCI (Note 20) - - - (6) - - (6)
Other changes in reserves - - - - - - -
At 31 December 2022 10,365 208 37,778 (1,153) 8,316 14,291 69,805
the Company
Share option Bonus share Fair value reserve of financial assets at FVOCI ((2)) Total
(Euro 000's)
At 1 January 2021 8,187 208 (1,100) 7,295
Adjustment for initial application of IFRS 9 - - - -
Recognition of share based payments 899 - - 899
Change in fair value of financial assets at fair value through OCI (Note 20) - - (47) (47)
At 31 December 2021 9,086 208 (1,147) 8,147
Recognition of share based payments 1,278 - - 1,278
Change in fair value of financial assets at fair value through OCI (Note 20) - - (6) (6)
At 31 December 2022 10,364 208 (1,153) 9,419
((1) ) Depletion factor reserve
During the twelve month period ended 31 December 2022, the Group has increase
€12.8 million (FY2021: disposal of €6.1 million) as a depletion factor
reserve as per the Spanish Corporate Tax Act.
((2) ) Fair value reserve of financial assets at FVOCI
The Group decided to recognise changes in the fair value of certain
investments in equity securities in OCI. These changes are accumulated within
the FVOCI reserve under equity. The Group transfers amounts from this reserve
to retained earnings when the relevant equity securities are derecognised.
((3) ) Non-distributable reserve
As required by the Spanish Corporate Tax Act, the Group classified a
non-distributable reserve of 10% of the profits generated by the Spanish
subsidiaries until the reserve is 20% of share capital of the subsidiary.
((4) ) Distributable reserve
As result of the 2018 profit generated in ARM, the Group decided to record a
distributable reserve in order to comply with the Spanish Corporate Tax Act.
In general, option agreements contain provisions adjusting the exercise price
in certain circumstances including the allotment of fully paid ordinary shares
by way of a capitalisation of the Company's reserves, a subdivision or
consolidation of the ordinary shares, a reduction of share capital and offers
or invitations (whether by way of rights issue or otherwise) to the holders of
ordinary shares.
The estimated fair values of the options were calculated using the Black
Scholes option pricing model. The inputs into the model and the results are as
follows:
Grant Weighted average share price £ Weighted average exercise price £ Expected volatility Expected life Risk Expected dividend yield Estimated Fair Value £
Date (years) Free
rate
23 Feb 2017 1.440 1.440 51.8% 5 0.6% Nil 0.666
29 May 2019 2.015 2.015 46.9% 5 0.8% Nil 0.66
8 July 2019 2.045 2.045 46.9% 5 0.8% Nil 0.66
30 June 2020 1.475 1.475 50.32% 10 0.3% Nil 0.60
23 June 2021 3.090 3.090 50.91% 10 0.7% Nil 0.81
26 January 2022 4.160 4.160 49.18% 10 1.149% Nil 1.12
22 June 2022 3.575 3.575 34.12% 5 2.748% Nil 0.71
The volatility has been estimated based on the underlying volatility of the
price of the Company's shares in the preceding twelve months.
24. Non-controlling interest
(Euro 000's) 2022 2021
Opening balance (4,909) (3,491)
On acquisition of a subsidiary 140 -
Share of total comprehensive income for the year (2,229) (1,418)
Closing balance (6,998) (4,909)
The Group has a 10% interest in Cobre San Rafael, S.L. acquired in July 2017
while the remaining 90% is held by a non-controlling interest (Note 2.3 (b)
(1)). The significant financial information with respect to the subsidiary
before intercompany eliminations as at and for the twelve month period ended
31 December 2022 is as follows:
(Euro 000's) 2022 2021
Non-current assets 6,976 5,155
Current assets 551 315
Non-current liabilities 14,478 -
Current liabilities 824 9,481
Equity (7,776) (5,299)
Revenue - -
Loss for the year and total comprehensive income (2,477) (1,420)
Cobre San Rafael, S.L. was established on 13 June 2016.
* 10% interest in Cobre San Rafael, S.L. was acquired by the Group in July
2017.
25. Trade and other payables
THE GROUP
(Euro 000's) 2022 2021
Non-current trade and other payables
Other non-current payables 2,000 3,435
Government grant 15 15
2,015 3,450
Current trade and other payables
Trade payables 85,038 49,712
Accruals 3,322 16,267
VAT payable 259 74
Other 1,403 138
90,022 66,191
THE COMPANY
(Euro 000's) 2022 2021
Current trade and other payables
Suppliers 284 47
Accruals 1,034 1,259
Payable to own subsidiaries (Note 30.4) 3,825 634
VAT payable 259 74
5,402 2,014
Other non-current payables are related with the acquisition of Atalaya Masa
Valverde formerly Cambridge Minería España, SL and Atalaya Ossa Morena
formerly Rio Narcea Nickel, SL (see Note 29).
Trade payables are mainly for the acquisition of materials, supplies and other
services. These payables do not accrue interest and no guarantees have been
granted. The fair value of trade and other payables approximate their book
values.
The Group's exposure to currency and liquidity risk related to liabilities is
disclosed in Note 3.
Trade payables are non-interest-bearing and are normally settled on 60-day
terms.
26. Provisions
(Euro 000's) Other provisions Legal costs Rehabilitation costs Total costs
At 1 January 2021 - 626 24,638 25,264
Additions - 26 655 681
Used of provision - (286) (57) (343)
Reversal of provision - (87) - (87)
Finance cost (Note 9) - - 1,063 1,063
At 31 December 2021 - 279 26,299 26,578
Additions - 30 1,033 1,063
Reclassification 1,435 - - 1,435
Used of provision - (10) (81) (91)
Reversal of provision - (73) (3,497) (3,570)
Finance income (Note 9) - - (380) (380)
At 31 December 2022 1,435 226 23,374 25,035
(Euro 000's) 2022 2021
Non-Current 24,083 26,578
Current 952 -
Total 25,035 26,578
Rehabilitation provision
Rehabilitation provision represents the estimated cost required for adequate
restoration and rehabilitation upon the completion of production activities.
These amounts will be settled when rehabilitation is undertaken, generally
over the project's life.
During 2020, Management engaged an independent consultant to review and update
the rehabilitation liability. The updated estimation includes the expanded
capacity of the plant and its impact on the mining project.
The discount rate used in the calculation of the net present value of the
liability as at 31 December 2022 was 3.41% (2021: 1.12%), which is the 15-year
Spain Government Bond rate for 2022. An inflation rate of 1%-5.70% (2021:
1%-1.96%) is applied on annual basis.
In June 2021, the Company announced a new independent reserve estimate for
Cerro Colorado open pit at Proyecto Riotinto. Cerro Colorado open pit reserve
of 186 Mt at 0.38% and the life of mine over 12 years.
The expected payments for the rehabilitation work are as follows:
(Euro 000 's) Between Between More than 10 years
1 - 5 Years 6 - 10 Years
Expected payments for rehabilitation of the mining site, discounted 7,843 2,685 12,847
Legal provision
The Group has been named as defendant in several legal actions in Spain, the
outcome of which is not determinable as at 31 December 2022. Management has
reviewed individually each case and made a provision of €226k (€279k in
2021) for these claims, which has been reflected in these consolidated
financial statements.
Other provisions
Other provisions are related with the called-up equity holdings of Atalaya
Masa Valverde S.L.
27. Leases
(Euro 000's) 31 Dec 2022 31 Dec 2021
Non-current
Leases 4,378 4,913
4,378 4,913
Current
Leases 536 597
536 597
The Group entered into lease arrangements for the renting of land, laboratory
equipment, a building and vehicles which are subject to the adoption of all
requirements of IFRS 16 Leases (Note 2.2). The Group has elected not to
recognise right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less and leases of low-value assets.
Amounts recognised in the statement of financial position and profit or loss
Set out below are the carrying amounts of the Group's right-of-use assets and
lease liabilities and the movements during the period:
Right - of-use assets
Laboratory equipment Lease liabilities
(Euro 000's) Lands and buildings Vehicles Total
As at 1 January 2022 5,417 14 99 5,530 5,510
Additions - - - - -
Depreciation expense (369) (14) (69) (452) -
Interest expense - - - - 20
Payments - - - - (616)
As at 31 December 2022 5,048 - 30 5,078 4,914
The amounts recognised in profit or loss, are set out below:
Twelve month ended Twelve month ended
31 Dec 31 Dec
2022 2021
(Euro 000's)
As at 31 December
Depreciation expense of right-of-use assets (452) (590)
Interest expense on lease liabilities (20) (11)
Total amounts recognised in profit or loss (472) (601)
The Group recognised rent expense from short-term leases (Note 6).
Depreciation expense regarding leases amounts to €0.5 million (2021: €0.6)
for the twelve month period ended 31 December 2022.
The duration of the land and building lease is for a period of twelve years.
Payments are due at the beginning of the month escalating annually on average
by 1.5%. At 31 December 2022, the remaining term of this lease is eleven
years. (Note 2)
The duration of the motor vehicle and laboratory equipment lease is for a
period of four years, payments are due at the beginning of the month
escalating annually on average by 1.5%. At 31 December 2022, the remaining
term of laboratory equipment lease is a half year.
(Euro 000's) 31 Dec 2022 31 Dec 2021
Minimum lease payments due:
- Within one year 536 597
- Two to five years 1,957 2,014
- Over five years 2,421 2,899
Less future finance charges - -
Present value of minimum lease payments due 4,914 5,510
Present value of minimum lease payments due:
- Within one year 536 597
- Two to five years 1,957 2,014
- Over five years 2,421 2,899
4,914 5,510
(Euro 000's) Lease liability
Balance 1 January 2022 5,510
Additions -
Interest expense 20
Lease payments (616)
Balance at 31 Dec 2022 4,914
Balance at 31 Dec 2022
- Non-current liabilities 4,378
- Current liabilities 536
4,914
28. Borrowings
(Euro 000's) 31 Dec 2022 31 Dec 2021
Non-current borrowings
Credit facilities 20,768 34,050
20,768 34,050
Current borrowings
Credit facilities 52,595 13,394
52,595 13,394
The Group had uncommitted credit facilities totalling €119.3 million
(€111.0 million at 31 December 2021). During 2022, Atalaya drawn down some
of its existing credit facilities to financing the construction of 50 MW solar
plant (payable amount of €19.5 million at 31 December 2022) and in 2021 to
pay the Deferred Consideration. Interest rates for existing credit facilities,
including facilities used to pay the Deferred Consideration, range from 1.10%
to 2.45% and the average interest rate on all facilities used and unused is
1.69%. The maximum term of the facilities is six years. All borrowings are
unsecured.
At 31 December 2022, the Group had used €73.4 million of its facilities and
had undrawn facilities of €46.0 million.
29. Acquisition, incorporation and disposals of subsidiaries
2022
Acquisition and incorporation of subsidiaries
On 31 January 2022, Atalaya established a new entity, Iberian Polimetal S.L.U.
Disposals of subsidiaries
On 4 January 2022, the subsidiary EMED Mining Spain, S.L. was wound up.
2021
Acquisition and incorporation of subsidiaries
On 21 December 2021 Atalaya announced the acquisition of a 51% interest in
Río Narcea Nickel, S.L., which owns 17 investigation permits.
Disposals of subsidiaries
There were no disposals of subsidiaries during the year.
Wind-up of subsidiaries
There were no operations wound-up during the year.
30. Group information and related party disclosures
30.1 Information about subsidiaries
These audited consolidated financial statements include:
Effective proportion of shares held
Parent Principal activity Country of incorporation
Subsidiary companies
Atalaya Touro (UK) Ltd Atalaya Mining Plc Holding United Kingdom 100%
Atalaya Financing Limited Atalaya Mining Plc Financing Cyprus 100%
Atalaya MinasdeRiotinto Project (UK) Limited Atalaya Mining Plc Holding United Kingdom 100%
EMED Marketing Ltd Atalaya Mining Plc Trading Cyprus 100%
ARM S.L.U. Atalaya MinasdeRiotinto Project (UK) Limited Production Spain 100%
Eastern Mediterranean Exploration and Development S.L.U. Atalaya MinasdeRiotinto Project (UK) Limited Dormant Spain 100%
Cobre San Rafael, S.L. ((1)) Atalaya Touro (UK) Limited Exploration Spain 10%
Recursos Cuenca Minera S.L.U. ARM SLU Dormant Spain J-V
Fundacion ARM ARM SLU Trust Spain 100%
Atalaya Servicios Mineros, S.L.U. Atalaya MinasdeRiotinto Project (UK) Limited Holding Spain 100%
Atalaya Masa Valverde S.L.U. ((2)) Atalaya Servicios Mineros, S.L.U. Exploration Spain 100%
Atalaya Ossa Morena S.L. ((3)) Atalaya Servicios Mineros, S.L.U. Exploration Spain 99.9%
Iberian Polimetal S.L.U. Atalaya Servicios Mineros, S.L.U. Dormant Spain 100%
((1)) Cobre San Rafael, S.L. is the entity which holds the mining rights of
Proyecto Touro. The Group has control in the management of Cobre San Rafael,
S.L., including one of the two Directors, management of the financial books
and the capacity of appointment the key personnel (Note 2.3 (b) (1)).
((2)) Cambridge Mineria Espana, S.L.U. changed its name to Atalaya Masa
Valverde, S.L.U on 28 November 2020.
((3)) Rio Narcea Nickel, S.L.U. changed its name to Atalaya Ossa Morena, S.L.U
on 31 January 2022. In July 2022, Atalaya increased its ownership interest in
Proyecto Ossa Morena to 99.9%, up from 51%, following completion of a capital
increase that will fund exploration activities.
The following transactions were carried out with related parties:
30.2 Compensation of key management personnel
The total remuneration and fees of Directors (including executive Directors)
and other key management personnel was as follows:
The Group The Company
(Euro 000's) 2022 2021 2022 2021
Directors' remuneration and fees 1,028 1,019 540 547
Director's bonus ((1)) 357 438 - -
Share option-based benefits to Directors 426 321 - -
Key management personnel remuneration ((2)) 571 522 - -
Key management bonus ((1)) 239 265 - -
Share option-based and other benefits to key management personnel 417 327 - -
3,038 2,892 540 547
((1)) These amounts related to the approved performance bonus for 2021 by the
Board of Directors following the proposal of the Remuneration Committee. The
2022 estimates recorded are not included in the table above as this is yet to
be approved by the Board of Directors. There is no certainty or guarantee that
the Board of Directors will approve a similar amount for 2022 performance.
((2)) Includes wages and salaries of key management personnel of €551k
(2021: €505k) and other benefits of €20k (2021: €17k).
At 31 December 2022 amounts due to Directors, as from the Group, are €nil
(€nil at 31 December 2021) and €nil (€nil at 31 December 2021) to key
management.
At 31 December 2022 amounts due to Directors, as from the Company, are €nil
(€nil at 31 December 2021) and €nil (€nil at 31 December 2021) to key
management.
Share-based benefits
In 2022, 1,345,000 options (2021: 1,150,000 options) were granted at a price
of 357.5 pence, of which 800,000 (2021: 800,000 options) were granted to
Directors and key management personnel (see note 23).
During 2022 the Directors and key management personnel have not been granted
any bonus shares (2021: nil).
30.3 Transactions with shareholders and related parties
THE GROUP
(Euro 000's) 2022 2021
Trafigura - Revenue from contracts 77,005 125,912
Freight services - -
77,005 125,912
Gains/(losses) relating provisional pricing within sales (5,165) 4,730
Trafigura - Total revenue from contracts 71,840 130,642
71,840 130,642
THE COMPANY
(Euro 000's) 2022 2021
Sales of services (Note 5):
· EMED Marketing Limited 1,404 978
· ARM SLU 1,352 -
· Atalaya Minasderiotinto Project (UK) Limited - 871
2,756 1,849
Purchase of services (Note 6):
· ARM SLU (66) (61)
Other services (Note 6)
· ARM SLU - 208
· EMED Marketing Limited - 208
Finance income (Note 8):
Atalaya Minasderiotinto Project (UK) Limited - Finance income from
interest-bearing loan:
· Credit agreement - at amortised cost 989 941
· Participative loan - at fair value through profit and loss 9,157 12,854
· Credit facility - at amortised cost 1,465 1,457
· Restructuring loan - at amortised cost 1,289 -
12,900 15,252
THE GROUP
(Euro 000's) 2022 2021
Current assets - Receivable from related parties (Note 19):
Recursos Cuenca Minera S.L. 56 56
56 56
The above balances bear no interest and are repayable on demand.
30.4 Year-end balances with related parties
THE COMPANY
(Euro 000's) 2022 2021
Non-current assets - Loan from related parties at FV through profit and loss
(Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited - Participative Loan PRT((1)) - 173,930
Atalaya MinasdeRiotinto Project (UK) Limited - Eastern Loan ((5)) - 12
Atalaya Masa Valverde SL - Participative Loan ((6)) 6,150 1,850
Atalaya Ossa Morena SL - Participative Loan ((6)) 3,100 500
Touro Project - Participative Loan ((4)) 4,997 -
14,247 176,292
Non-current assets - Loans and receivables from related parties at amortised
cost (Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited - Restructuring loan ((1)) 245,258 -
Atalaya MinasdeRiotinto Project (UK) Limited - Credit Expansion Loan ((2)) - 41,535
Atalaya MinasdeRiotinto Project (UK) Limited - Credit Agreement ((3)) - 26,354
EMED Marketing Limited ((4)) - 1,164
Atalaya MinasdeRiotinto Project (UK) Limited- Group cost sharing ((4)) 399 399
Total 245,657 69,452
Current assets - Loans and receivables from related parties at amortised cost
(Note 19):
ARM SLU ((4)) 1,352 208
EMED Marketing Limited ((4)) 664 208
Atalaya Touro (UK) Limited ((4)) 1,650 1,634
Atalaya MinasdeRiotinto Project (UK) Limited 45,000
Atalaya Financing Ltd 108 34
Total 48,774 2,084
((1) ) This balance bears interest of EURIBOR 12month plus 3.50%.
The Participative loan was cancelled on 30 November 2022. The Group signed on
1 December 2022 a new Loan Restructuring Agreement for the amount due of the
Participative Loan bearing a EURIBOR 12month plus 3.50% interest and maturing
on 30 November 2028.
((2) ) This balance bears interest of EURIBOR 6month plus 4%
(2021: LIBOR 6month + 4.00%).
((3) ) This balance bears interest of EURIBOR 12month plus 4%
(2021: 12month plus 4%). The Note Facility Agreement expired on 29 September
2019. The Group signed on 30 September 2019 a new Credit Agreement for the
amount due of the Note Facility Agreement bearing a EURIBOR 12month plus 4%
interest and maturing on 30 September 2024
((4) ) These receivables bear no interest. These balances are
repayable on demand. However, management will not claim any repayment in the
following twelve months period after the release of the current consolidated
financial statements.
((5) ) This balance bears interest of 3.00% (2021: 3.00%).
((6) ) This balance bears no interest.
THE COMPANY
(Euro 000's) 2022 2021
Payable to related party (Note 25):
EMED Marketing Limited 3,825 -
EMED Mining Spain S.L. - 262
ARM S.L.U. - 372
3,825 634
The above balances bear no interest and are repayable on demand.
30.5 Year-end balances with shareholders
(Euro 000's) 2022 2021
Receivable from shareholders (Note 19):
Trafigura - Debtor balance -subject to provisional pricing 12,800 20,283
12,800 20,283
The above debtor balance arising from the pre-commissioning sales of goods
bear no interest and is repayable on demand.
31. Contingent liabilities
Judicial and administrative cases
In the normal course of business, the Group may be involved in legal
proceedings, claims and assessments. Such matters are subject to many
uncertainties, and outcomes are not predictable with assurance. Legal fees for
such matters are expensed as incurred and the Group accrues for adverse
outcomes as they become probable and estimable.
32. Commitments
There are no minimum exploration requirements at Proyecto Riotinto. However,
the Group is obliged to pay local land taxes which currently are approximately
€235,000 per year in Spain and the Group is required to maintain the
Riotinto site in compliance with all applicable regulatory requirements.
In 2012, ARM entered into a 50/50 joint venture with Rumbo to evaluate and
exploit the potential of the class B resources in the tailings dam and waste
areas at Proyecto Riotinto (mainly residual gold and silver in the old gossan
tailings). Under the joint venture agreement, ARM will be the operator of the
joint venture, will reimburse Rumbo for the costs associated with the
application for classification of the Class B resources and will fund the
initial expenditure of a feasibility study up to a maximum of €2.0 million.
Costs are then borne by the joint venture partners in accordance with their
respective ownership interests.
33. Significant events
The events in Ukraine from 24 February 2022 are impacting the global economy
but cannot yet be predicted in full. The main concern now is the rising prices
for energy, fuel and other raw materials and rising inflation, which may
affect household incomes and business operating costs. The financial effect of
the current crisis on the global economy and overall business activities
cannot be estimated with reasonable certainty at this stage.
The main significant events disclosed during the nine months ended 30
September 2022 were:
· On 4 January 2022 the subsidiary EMED Mining Spain, S.L. was
winded down (refer to Note 21).
· On 6 January 2022, the Company announced the approval of the
construction of the first phase of an industrial scale plant ("Phase I") that
utilises the E-LIX System ("E-LIX"), which will produce high value copper and
zinc metals from the complex sulphide concentrates sourced from Proyecto
Riotinto.
· Through the year, the Company announced share dealings from
persons discharging managerial responsibilities ("PDMR") as follows
o On 26 January 2022, executed certain options by PDMRs;.
o On 22 February 2022, certain PDMRs had sold ordinary shares of the
Company;
o On 25 August 2022, purchased of 65,000 ordinary shares in Atalaya by a
PDMR.
· On 27 January 2022, Atalaya announced that, in accordance with
the Company's Long Term Inventive Plan 2020, it had granted 120,000 share
options. Further, on 24 June 2022, it was announced the Company has granted
1,225,000 share options to PDMRs and other employees.
· On 3 February 2022, the Company announced the results of five
additional drill holes from its ongoing resource definition drilling programme
at Proyecto Masa Valverde.
· On 24 March 2022, Atalaya announced that Mr. Harry Liu has
stepped down as a Non-Executive Director of the Company with immediate effect.
· On 4 April 2022, funds managed by Hamblin Watsa Investment
Counsel Ltd. acquired 5.08% of voting rights.
· The Company has been notified on the following transaction by
Allianz Global Investors GmbH ("Allianz"):
o On 4 April 2022, increased its % of voting rights from below 3% to 3.92%;
o On 4 May 2022, increased its % of voting rights from 3.92% to 4.07%;
o On 23 August 2022, increased its % of voting rights from 4.07% to 5.09%;
and
o On 29 September 2022, decreased its share of voting rights from 5.09% to
4.93%.
o On 10 November 2022, decreased its share of voting rights from 4.93% to
3.98%.
· On 5 April 2022, Atalaya announced a new Mineral Resource
Estimate, prepared in accordance with CIM guidelines and disclosure
requirements of NI 43-101, for its 100% owned Proyecto Masa Valverde.
· On 7 April 2022, the Company noted the announcement on 1 April
2022 by ICBC Standard Bank Plc ("ICBCS") confirming the sale of the entire
holding of Yanggu Xiangguang Copper Co. Ltd ("XGC") (via its subsidiary, Hong
Kong Xiangguang International Holdings Ltd), in Atalaya.
· On 8 April 2022 and 9 May 2022, the Company transferred €9.6
million and €1.2 million to Astor from the trust account already established
by Atalaya on 15 July 2021 (refer to Note 13).
· On 13 April 2022, Atalaya announced new Mineral Resource
Estimates, prepared in accordance with CIM guidelines and disclosure
requirements of NI 43-101, for its San Dionisio and San Antonio deposits.
· On 25 April 2022, the Company announced the publication of its
inaugural Sustainability Report for the year ended 31 December 2021.
· On 19 May 2022 the Board of Directors appointed Kate Harcourt as
an independent Non-Executive Director of the Company.
· On 22 June 2022, the 2022 Annual General Meeting was held, and
all the resolutions proposed were dully passed.
· On 23 June 2022, the Company has issued 22,500 ordinary shares of
7.5p in the Company pursuant to an exercise of share options by an employee.
· In July 2022, Atalaya increased its ownership interest in
Proyecto Ossa Morena to 99.9%, up from 51%, following completion of a capital
increase that will fund exploration activities.
· On 1 November 2022, the Company announced that the Company's
Board of Directors established a Sustainability Committee.
· The Company has been notified on the following transaction by
BlackRock Inc ("BlackRock") On 9 November 2022, increased its % of voting
rights to 4.03%;
· The Company announced that it was notified on 9 November 2022,
that Enrique Delgado, a person discharging managerial responsibilities
("PDMR"), had sold 300,000 ordinary shares in Atalaya, respectively, at a
price of 272.25 pence per share.
· On 24 November 2022, the Company provided an update on its
ongoing exploration programme at its southern Spain projects, including
Proyecto Masa Valverde ("PMV"), Proyecto Ossa Morena ("POM"), and Proyecto
Riotinto East ("PRE"). Currently, there are four rigs active, three at PMV and
one at POM.
Dividends
The Company's Board of Directors elected to declare an interim dividend for H1
2022 of US$0.036 per ordinary share, which was equivalent to 3.13 pence per
share and amounted to €5.1 million.
The interim dividend was paid on 20 September 2022.
The Board of Directors has proposed a final dividend for 2022 of US$0.0385 per
ordinary share, which is equivalent to approximately 3.15 pence per share
totalling €5.0 million. Payment of the Final Dividend is subject to
shareholder approval at the Company's 2023 Annual General Meeting. Should it
be approved, the Final Dividend, together with the Interim Dividend paid in
September 2022, would result in a Full Year Dividend of US$0.0745 per ordinary
share, which is equivalent to approximately 6.28 pence per share. Further
details on the timing of the potential payment of the Final Dividend will be
provided ahead of the AGM.
Further details are given in Note 12.
34. Events after the reporting period
· On 12 January 2023, the Company was notified that Allianz Global
Investors GmbH decreased its share of voting rights from 4.93% to 3.98%.
· On 20 February 2023, Atalaya announced that applied a voluntary
delisting of its ordinary shares from the Toronto Stock Exchange (the "TSX")
with effective date of the closing of trading on 7 March 2023. Ordinary shares
in the Company continue to trade on the AIM market of the London Stock
Exchange under the symbol "ATYM".
· On 23 February 2023, Atalaya announced the results from a new
preliminary economic assessment ("PEA") for the Cerro Colorado, San Dionisio
and San Antonio deposits at its Proyecto Riotinto ("Riotinto") operation in
Spain.
· Delisting from TSX took effect at the close of trading on 20
March 2023.
· On 21 March 2023, the Company's Board of Directors proposed a
Final Dividend of $0.0385 per ordinary share, which is subject to approval by
shareholders at the Company's 2023 Annual General Meeting. Should it be
approved, the Final Dividend, together with the Interim Dividend paid in
September 2022, would result in a Full Year Dividend of US$0.0745 per ordinary
share, which is equivalent to approximately 6.28 pence per share.
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