REG - Atalaya Mining PLC - Acquisition and Additional Investigation Permits

Atalaya MiningAnnouncement

21/12/2021 07:00

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RNS Number : 2665W  Atalaya Mining PLC  21 December 2021

A version of this announcement containing all referenced maps can be found on
the Company's website at www.atalayamining.com (the "Website Announcement").

 

21 December 2021

Atalaya Mining Plc.

("Atalaya" or "the Company")

 

Acquisition of 51% Interest in Rio Narcea Nickel, S.L. and Additional
Investigation Permits in Spain

 

Atalaya Mining plc (AIM: ATYM, TSX: AYM) is pleased to announce that it has
established a significant presence, covering approximately 1,114 sq km, in the
Ossa Morena Metallogenic Belt, in southwest Spain. The Ossa-Morena
Metallogenic Belt has strong exploration potential for a range of base and
precious metals and is north of the Iberian Pyrite Belt where Atalaya operates
its flagship Proyecto Riotinto mine (figure 1 on the Website Announcement).

This has been achieved through the execution of a definitive purchase
agreement (the "Transaction") with Grupo Sacyr S.A. (the "Vendor"), which
includes the following:

·    The acquisition of a 51% interest in Rio Narcea Nickel, S.L. ("RNN"),
which owns 17 investigation permits.

·    The acquisition of a 100% interest in three investigation permits
that are also located along the Ossa-Morena Metallogenic Belt.

·    This group of 20 permits will be known collectively as Proyecto Ossa
Morena ("POM") and are strategically distributed along prospective zones of
the Ossa Morena Metallogenic Belt (figure 2 on the Website Announcement), and
in particular, along the southern flank of the major Olivenza-Monesterio
Antiform ("OMA").

·    In addition to the POM permits, Atalaya is also acquiring from the
Vendor a 51% interest in four investigation permits in the Sevilla province
and a 100% interest in two investigation permits in the Almeria province, both
in the south of Spain.

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.

 

POM Highlights:

·    POM includes the Alconchel copper-gold-iron project, which has a NI
43-101 compliant total indicated plus inferred resource of 23 Mt at 0.53% Cu,
0.15 g/t Au and 11.2% Fe (Golder Associates, October 2017).

·    Also includes two advanced-stage Au and Cu-Au exploration projects,
Guijarro and Vicaria respectively, and several drill-ready coincident
geochemical and geophysical anomalies. All these are located along the
southern flank of the OMA.

 

·    Atalaya plans to conduct infill and step out drilling at Alconchel,
and additional exploration drilling at Pallares, Vicaria and Guijarro projects
among others. The aim of that work is to expand the known resources at
Alconchel and advance the Pallares, Vicaria and Guijarro projects to the
resource definition stage.

 

·    The POM exploration budget for 2022 is up to €2 million and, among
other activities, will include approximately 10,000 metres of core drilling.

 

·    The Aguablanca Ni-Cu-PGE mine, now on care and maintenance, is
located 15 km southeast of POM. The current owner of Aguablanca owns the
remaining 49% interest in RNN.

 

Alberto Lavandeira, CEO, commented:

"With this acquisition, Atalaya has secured a prominent land position in one
of the most prospective and underexplored metallogenic belts in Western
Europe. Its location, close to the Iberian Pyrite belt where our Riotinto
copper mine and other exploration projects are currently advancing, will allow
us to carry out aggressive exploration programmes in a cost and time efficient
manner. Priority will be given to advance the Alconchel copper-gold-iron
project because of its excellent exploration potential which underpins our
geologists' belief that the current known resources can be increased
significantly. For example, the Pallares Cu-Au discovery, located 3.5km east
of Alconchel and not included in the current resources, supports this thesis.
This is an exciting time for Atalaya as it seeks new growth opportunities to
build on its success at Riotinto and beyond."

 

Contacts:

 SEC Newgate UK             Elisabeth Cowell / Tom Carnegie            + 44 20 3757 6880
 4C Communications          Carina Corbett                             +44 20 3170 7973
 Canaccord Genuity          Henry Fitzgerald-O'Connor / James Asensio  +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 and TSX-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. For further information, visit
www.atalayamining.com (http://www.atalayamining.com)

Qualified Person Statement

Alberto Lavandeira has reviewed the technical information contained within
this announcement in his capacity as a Qualified Person, as required under the
AIM Rules for Companies. Alberto Lavandeira is the Chief Executive Officer for
the Company and is a member of good standing with the Association of Mining
Engineers of Spain, with over 42 years' experience.

 

Alconchel Copper-Gold-Iron Project

Alconchel is the most advanced project within POM. It is an outcropping
Cu-Au-Fe replacement-type system hosted by an exhalative, iron-barite rich
formation of Lower Cambrian age. To date, 81 core holes have been drilled
totalling 21,706 metres (figure 3 on the Website Announcement).

In October 2017, Golder Associates completed a NI 43-101 compliant resource
estimate at a 0.25% Cu cut-off as detailed below:

 Zone                   Classification((1))  Tonnage (Mt)  Cu(%)  Au(g/t)  Fe(%)
 Alconchel Cu-Au-Fe     Indicated Resources  7.76          0.66   0.17     12.25
 Alconchel Cu-Au-Fe     Inferred resources   15.03         0.47   0.14     11.18

( )

 

(1) The consolidated Mineral Resources for Alconchel are reported in
accordance with NI 43-101 and have been estimated in conformity with generally
accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best
Practices" Guidelines. It is considered sufficiently robust and is
representative of the sample data. Mineral Resource grade and tonnage
estimates are based on assay data from 72 drillholes corresponding to 18,464 m
of diamond drilling cores well organized and properly stored. 4,323 samples
were assayed at an accredited laboratory with respective certificates. The
database was closed in the first half of August 2017.

 

Mineral Resources are not Mineral Reserves and do not necessarily demonstrate
economic viability. There is no certainty that all or any part of this Mineral
Resource will be converted into Mineral Reserves.

 

Alconchel has open pit and underground mining potential due to its shallow
dipping, stratiform geometry and the presence of significant higher-grade
zones at depth, for example drill hole HER40 which cut 16.85 metres of true
thickness at 3.26% Cu and 0.22 g/t Au from 143 metres depth. The mineralised
system is still open in several directions (figure 4 on the Website
Announcement).

Due to its simple mineralogy (chalcopyrite, pyrite, and magnetite/hematite)
and geochemistry (no deleterious elements) the preliminary metallurgical
test-work carried out to date returned encouraging results.

Pallares Cu-Au prospect

The regional exploration potential around Alconchel has been improved by the
discovery of a similar style of mineralisation only 3.5km to the east, the
Pallares prospect (figure 3 on the Website Announcement). Limited historical
drilling returned promising intersections, including 20.70 metres at 1.14% Cu
and 0.37 g/t Au from surface (DDH-01); 12.10 metres at 1.21% Cu and 0.07 g/t
Au from 201.60 metres depth (DDH-03) and 7.55 metres at 1.4% Cu and 1 g/t Au
from 156 metres depth (DDH-04).

Mineralisation at Pallares is related to a 1km long coincident soil
geochemical and geophysical anomaly (IP chargeability) which remains mostly
untested. The fact that the host rock for the mineralisation at Pallares is
not the exhalate, barite-iron rich formation but the contact between shales
and carbonates has very positive exploration implications at property and
regional scale because it confirms that economic Cu-Au mineralisation can also
be host at different stratigraphic levels and not only in the exhalative unit
as in Alconchel.

 

Vicaria Copper-Gold Project

Cu-Au mineralisation at this project is characterised by massive and
semi-massive sulphides hosted by strongly altered and brecciated carbonate
rocks of Lower Cambrian age. Pyrite is the predominant sulphide mineral with
subordinate chalcopyrite. Gossans are abundant at surface.

Previous exploration work includes four small drilling campaigns: Exxon in the
1970s (2 core holes, no data available), Rio Tinto Minera in 1992-1993 (815
metres in 23 shallow percussion drilling holes), Rio Narcea Gold Mines in 2005
(4 core holes totaling 683 metres) and Valoriza/Atalaya in 2019 (951 metres in
9 core holes).

A selection of best intersections includes: 36 metres at 1.2% Cu and 0.16 g/t
Au (RTM); 7.50 metres at 1.44% Cu (RNGM) and 13.65 metres at 0.36% Cu
(Valoriza/Atalaya).

Known mineralisation at Vicaria is associated with a large Cu soil anomaly
which in some cases is coincident with geophysical, VTEM and IP chargeability
anomalies. Most of this soil anomaly remains pending for drill testing (figure
5 on the Website Announcement).

Guijarro Gold Project

This is a low-sulphidation gold system related to acid volcanic rocks with
strong silicification and disseminated pyrite mineralisation. Previous
exploration work included two small drilling campaigns: 1,091 metres in 23
shallow holes in 1993 by Rio Tinto Minera (RC and core holes) and 1,148 metres
in 8 core holes in 2006 by RNN. Among the best intersections to highlight: 40
metres at 1 g/t Au from surface (RC hole) and 21 metres at 3.60 g/t Au from 15
metres depth (core hole).

Gold mineralisation is associated with a large, >2km long, soil geochemical
anomaly which to date has been drill tested at just two small zones: Guijarro
and Chocolatero (figure 5 on the Website Announcement). Grab sampling in the
westernmost part of that anomaly returned up to 135 g/t Au. Follow up work,
including drilling, has not yet been conducted in that zone.

 

 

 

Glossary of Terms

 Ag                             Silver
 As                             Arsenic
 Atalaya                        Atalaya Mining plc
 Au                             Gold
 Cu                             Copper
 Fe                             Iron
 g/t                            Grams per tonne
 Gal                            Unit of gravity
 Hg                             Mercury
 Inferred mineral resource      That part of a Mineral Resource for which quantity, grade or quality,
                                densities, shape and physical characteristics are estimated with sufficient
                                confidence to allow the application of Modifying Factors in sufficient detail
                                to support mine planning and evaluation of the economic viability of the
                                deposit. Geological evidence is derived from adequately detailed and reliable
                                exploration, sampling and testing and is sufficient to assume geological and
                                grade or quality continuity between points of observation. An Indicated
                                Mineral Resource has a lower level of confidence than that applying to a
                                Measured Mineral Resource and may only be converted to a Probable Mineral
                                Reserve.
 Ni                             Nickel
 NI 43-101                      Canadian Securities Administrators' National Instrument 43-101 - Standards of
                                Disclosure for Mineral Projects
 Mt                             Million tonnes
 OMA                            Olivenza-Monesterio Antiform
 Ossa-Morena Metallogenic Belt  A mineral belt located in the southwest of Spain and north of the Iberian
                                Pyrite Belt
 Pb                             Lead
 PGE                            Platinum Group Elements
 POM                            Proyecto Ossa Morena
 RNN                            Rio Narcea Nickel, S.L.
 Zn                             Zinc

 

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