REG - Atalaya Mining PLC - Audited Full Year Results 2021
24/03/2022 07:01
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RNS Number : 8318F Atalaya Mining PLC 24 March 2022
24 March 2022
Atalaya Mining Plc.
("Atalaya" or "the Company")
2021 Annual Results
Achieved new record production, EBITDA and cash flow as well as enhancing
asset portfolio
Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce its audited
consolidated results for the year ended 31 December 2021 ("FY2021" or the
"Period") and the publication of its Annual Report for the Period.
The Audited Consolidated Financial Statements and Annual Report for FY2021 are
also available under the Company's profile on SEDAR at www.sedar.com
(http://www.sedar.com) and on Atalaya's website at www.atalayamining.com
(http://www.atalayamining.com) .
FY2021 Highlights
· Record annual copper production of 56,097 tonnes
· Record financial performance, including EBITDA of €199.1 million
and cash flows from operating activities of €148.8 million
· Asset portfolio enhanced - Cerro Colorado reserves, optioned Riotinto
East, acquired Ossa Morena, approved E-LIX Phase I and 50MW solar plant, Masa
Valverde exploration
· Paid inaugural dividend of US$0.395 per ordinary share (~US$54.6
million) and announced future dividend policy
· Ended the Period with robust balance sheet including net cash of
€60.1 million
FY2021 Financial Results Summary
Year ended 31 December 2021 2020 Var. (%)
Revenues from operations €k 405,717 252,784 60.5
Operating costs €k (206,603) (185,341) 11.1
EBITDA €k 199,114 67,444 195.2
Profit after tax for the period €k 132,226 30,390 335.1
Basics earnings per share € cents/share 96.7 22.9 322.3
Dividend per share $/share 0.395 -
Cash flows from operating activities €k 148,841 62,916 136.6
Cash flows used in investing activities ((1)) €k (87,531) (30,160) 190.2
Cash flows from in financing activities €k 1,851 760 143.6
Net cash / (debt) position ((2)) €k 60,073 (15,233) n.a.
Working capital surplus €k 102,430 (17,904) n.a.
Average realised copper price $/lb 4.14 2.70 53.3
Cu concentrate produced (tonnes) 270,713 256,001 5.7
Cu production (tonnes) 56,097 55,890 0.4
Cash costs $/lb payable 2.18 1.95 11.8
All-In Sustaining Cost ("AISC") $/lb payable 2.48 2.21 12.2
((1) )Includes €53 million early payment of the Deferred
Consideration to Astor.
((2) )Includes restricted cash and bank borrowings at 31
December 2021 and 2020.
FY2021 Operating Results Summary
Units expressed in accordance with the international system of units (SI)
Unit 2021 2020
Ore mined Mt 13.5 13.6
Ore processed Mt 15.8 14.8
Copper ore grade % 0.41 0.45
Copper concentrate grade % 20.72 21.83
Copper recovery rate % 85.97 84.53
Copper concentrate t 270,713 256,001
Copper contained in concentrate t 56,097 55,890
Payable copper contained in concentrate t 53,390 53,330
Mining
Mining operations have continued normally despite COVID-19, with sufficient
equipment on site to maintain the higher production levels required for the
full operation of the expanded plant. Ore mined in 2021 was 13.5 million
tonnes, in line with the previous year (13.6 million tonnes).
Processing
During FY2021, the plant continued to operate above nameplate capacity of 15
Mtpa and processed 15.8 million tonnes of ore with an average copper head
grade of 0.41% and a recovery rate of 85.97%. In comparison to FY2020, the
increased throughput and metallurgical recoveries more than offset the lower
copper grades. In Q4 2021, 3.9 million tonnes of ore were processed, reporting
a consistent quarterly throughput.
On-site concentrate inventories as at 31 December 2021 were approximately
5,254 tonnes (12,180 tonnes at 31 December 2020) which were fully sold in
January 2022. All concentrate in stock was delivered to the port at Huelva.
Production
Concentrate production for FY2021 was 270,713 tonnes compared to 256,001
tonnes in FY2020. Contained copper was 56,097 tonnes compared to 55,890 tonnes
in FY2020. Payable copper amounted to 53,390 tonnes from 53,330 tonnes in
FY2020.
FY2021 Financial Results Highlights
Income Statement
Revenues for FY2021 increased to €405.7 million compared with €252.8
million for FY2020. Higher revenues were the result of increased realised
copper prices and slightly larger volumes of concentrate sold.
The realised copper price for FY2021 was $4.14/lb compared to $2.70/lb in
FY2020. Concentrates were sold under the offtake agreements in place and spot
sales during the year. The Company did not enter into any hedging agreements
in either 2021 or 2020.
Operating costs for FY2021 amounted to €206.6 million, compared to €185.3
million in FY2020. Higher costs in FY2021 were mainly attributable to the
increase in production volumes plus more tonnes of waste extracted resulting
in higher unit costs.
EBITDA increased 195% year on year to reach €199.1 million in FY2021,
compared to EBITDA of €67.4 million for FY2020. The increase is mainly
attributed to higher copper prices and larger volumes of concentrate sold,
offset by higher cash costs.
Cash costs for FY2021 were $2.18/lb payable copper, above FY2020 of $1.95/lb
payable copper. Higher cash costs in FY2021 are mainly attributable to higher
mining costs that resulted from a higher strip ratio compared to 2020, longer
distances and, to a lower extent, higher freight rates. AISC for FY2021 were
$2.48/lb payable copper compared to $2.21/lb payable copper in FY2020. Higher
AISC mainly related to higher underlying cash costs as well as higher
stripping costs and sustaining capex. Consistent with the calculation used in
previous reportings, AISC excludes one-off investments in the tailings dam
expansion that amounted to €14.1 million during the Period.
Balance Sheet
Unrestricted cash and cash equivalents as at 31 December 2021 increased to
€95.7 million from €37.8 million at 31 December 2020. The increase in cash
balances is due to the strong cash flows generated during FY2021. Unrestricted
cash balances include balances at the operational and corporate level.
Restricted cash of €15.4 million is related to the amount that the Company
transferred to a trust account and represents the full amount of interest
claimed by Astor Management AG ("Astor") to 30 June 2022, as detailed below
and in note 29 of the Financial Statements (Deferred Consideration).
As of 31 December 2021, Atalaya reported a working capital surplus of €102.4
million, compared with a working capital deficit of €17.9 million as at 31
December 2020. The main liability of the working capital is trade payables
related to Proyecto Riotinto suppliers and, to a lesser extent, payments due
to Astor and short-term loans following the drawdown of credit facilities
during Q1 2021. The increase in working capital resulted from higher cash
balances as well as payment of the Deferred Consideration, which was included
in current liabilities at the end of 2020, by utilising long-term credit
facilities to fund the early payment of the Deferred Consideration. At 31
December 2021, trade payables have been decreased by 21% compared with the
same period last year.
Cash Flow Statement
Cash and cash equivalents increased by €69.8 million in the twelve-month
period ended 31 December 2021. This increase was due to cash from operating
activities amounting to €148.8 million, cash used in investing activities
amounting to €87.5 million and cash generated by financing activities
totalling €1.9 million, and net foreign exchange of €6.6 million.
Cash generated from operating activities before working capital changes was
€200.3 million in line with EBITDA of €199.1 million. Atalaya increased
its trade receivables by €8.8 million and its inventory levels by €1.2
million and trade payables decreased in the period by €14.4 million.
Corporate tax paid during the period was €25.8 million.
Investing activities in FY2021 amounted to €87.5 million, relating mainly to
the €53 million early payment of the Deferred Consideration to Astor and the
capitalised expenditures relating to the tailings dam project and continuous
enhancements to the processing systems of the plant.
Financing activities in FY2021 amounted to €1.9 million. The Company
increased its external financing by €49.4 million due to the use of existing
unsecured credit facilities to pay the Deferred Consideration. The payment was
financed by unsecured credit lines provided 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 €47.3 million.
Inaugural Dividend and Future Dividend Policy
In October 2021, the Company declared its inaugural dividend and announced a
future dividend policy (the "Dividend Policy") that will take effect during
FY2022.
The inaugural dividend of approximately $0.395 per share was paid on 1
December 2021 to Atalaya shareholders on record at the close of business on 5
November 2021.
The Dividend Policy will make an annual pay-out of 30 - 50% of free cash flow
generated during the applicable financial year, and be paid in two half-yearly
instalments that will be announced in conjunction with future interim and full
year results.
Sustainability Reporting
Atalaya continues to focus on enhancing its disclosure around its
sustainability practices.
Following the announcement made on 25 January 2022 where the Company published
its "Approach to Sustainability" summary document, Atalaya expects to release
its inaugural sustainability report for 2021 in the coming weeks.
Energy Market Developments in Spain
Current Situation
As described in the Company's announcement on 13 January 2022, Atalaya has
been closely monitoring developments in Spain's energy market, which
experienced elevated and volatile prices in late 2021 and early 2022.
Since the start of Russia's military invasion of Ukraine, the electricity
prices in Spain have shown further increases in volatility and price spikes
that recently reached unprecedented levels. The electricity price is now below
prior peaks and has averaged above €200/MWh so far in 2022. For reference,
in 2021, the Company's fixed price contract supplied electricity at a rate of
€65/MWh including tolls and taxes and accounted for approximately 10% of
cash costs.
Atalaya believes that current energy market dynamics are unusual and
temporary, and notes media reports on discussions between Spain and the EU
regarding potential changes to the current electricity pricing mechanism,
which could reduce the influence of record high gas prices on the overall
electricity price in Spain.
50MW Solar Plant and New Power Purchase Agreement ("PPA")
In line with its strategy to reduce its energy costs and exposure to market
pricing, the Company has continued to progress the development of its 50MW
solar plant and has secured long term pricing contract with national
utilities.
Construction is now underway at the Company's 50MW solar plant project, with
civil works being advanced and equipment orders in place. The solar plant is
expected to come online in H1 2023 and will provide approximately 22% of the
Company's power requirements going forward.
The Company has also entered into a new long-term PPA for approximately 31% of
the Company's current electricity requirements. Under the 10-year agreement,
deliveries will begin in 2023 and pricing is fixed at approximately 80% of the
rate realised in 2021.
Other Initiatives Under Evaluation
In order to reduce the Company's long-term exposure to the spot electricity
market, Atalaya continues to evaluate several other energy supply initiatives.
These include the potential development of a local wind farm, the addition of
solar capacity beyond the 50MW facility already under construction and
establishing energy storage facilities. Each initiative, if implemented, would
also serve to reduce Atalaya's overall carbon footprint.
As a result of the Company's balance sheet strength, its relationships with
lenders in Spain, and the current and expected incentive structure for
renewable energy project development, Atalaya expects that any future
initiatives would be financed by a combination of own cash generation and
limited recourse debt at competitive terms.
Outlook for 2022
Production
As previously announced, production guidance for FY2022 is 54,000 to 56,000
tonnes of copper, which is consistent with Atalaya's record production in
FY2021.
Whilst the Company maintains the production guidance, it expects that first
quarter 2022 production will be lower than the remaining quarters of 2022,
mainly due to the need to bring forward of certain plant maintenance to
earlier in the year coupled with supply chain strikes in Spain.
The Company will continue to monitor the electricity market environment and
may make temporary changes to its operating plan if prices were to increase
materially from current levels and remain elevated for a sustained period.
Operating Costs
In line with our global mining sector peers, the Company is experiencing
inflationary cost pressures in a number of key inputs, most notably those
linked to natural gas and oil prices, which influence the cost of diesel,
tyres, explosives, grinding media, lime and freight. In order to moderate some
impact of these cost increases, the Company continues to identify
opportunities to reduce consumption and source inputs from new suppliers.
As a result of actual electricity costs in early 2022, the Company is
providing cash cost and AISC guidance that reflects a range of outcomes of
potential energy costs for the full year and is as follows:
· 2022 cash cost range of $2.25 to $2.80/lb
· 2022 AISC range of $2.50 to $3.05/lb (net of 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 electricity annual average
market price range of €100 to 200/MWh for the full year of 2022.
Accordingly, a significant proportion of the guided cost increase over 2021 is
attributable to the assumed increase in electricity prices.
The Company will continue to update the market on cost guidance as the energy
situation globally, and particularly in Spain, normalises and the ability to
forecast electricity prices improves.
Capital Expenditures
Atalaya remains committed to growing its production and enhancing the
efficiency and sustainability of its operations.
For 2022, the Company will be making the following capital investments:
· €11.9 million for the 50 MW solar plant, out of the total budget of
~€28 million
· €15.0 million for the Phase I E-LIX plant
· €12.5 million for expansion of the Riotinto tailings facility
Exploration
Atalaya controls a large and strategic land package in the Iberian Pyrite
Belt, where numerous high-quality discoveries have been made in recent years
by Atalaya and its neighbours.
For 2022, the Company's exploration budget is approximately €10 million,
with a focus on expanding and enhancing the resource at Proyecto Masa Valverde
and testing prospective targets at Proyecto Riotinto East and Ossa Morena.
Approval of Phase I E-LIX Plant
In January 2022, the Company announced it had approved the construction of a
Phase I industrial-scale plant that utilises the E-LIX System, which will
produce high value copper and zinc metals from complex sulphide concentrates.
The E-LIX System is expected to unlock significant value from Atalaya's
portfolio of polymetallic resources in the Riotinto District by materially
increasing metal recoveries, reducing transportation costs, treatment charges
and penalties, while also reducing the Company's carbon footprint.
The plant has a construction budget of €15 million Phase I plant has been
designed to produce 3,000 tonnes of copper metal or 10,000 tonnes of zinc
metal per year depending on the nature of the concentrate feed. Construction
activities are under way and the plant is expected to reach steady-state
production in H2 2022.
Update on Asset Portfolio
Riotinto District - Cerro Colorado
In June 2021, the Company announced a new independent reserve estimate for the
Cerro Colorado open pit at Proyecto Riotinto, which confirmed its status as a
long-life mine. Independent consultants are currently finalising the
supporting NI 43-101 compliant technical report for Proyecto Riotinto.
Riotinto District - San Dionisio and San Antonio
Following the June 2021 announcement of an internal resource estimate for the
San Dionisio deposit, consultants were engaged to produce independent NI
43-101 compliant resource estimates for both the San Dionisio and San Antonio
deposits. The estimates will be incorporated in the new Proyecto Riotinto NI
43-101 compliant technical report described above.
San Dionisio and San Antonio are located adjacent to the existing Cerro
Colorado open pit. It is expected that a significant portion of San Dionisio
could be mined via open pit methods, while San Antonio could be mined using
underground methods. Both deposits could provide material that is
significantly higher in grade than the ore currently being mined at Cerro
Colorado, potentially allowing the Company to increase production without the
need to further expand capacity at Riotinto's 15 Mtpa plant.
Riotinto District - Proyecto Masa Valverde ("PMV")
PMV consists of two polymetallic deposits, Masa Valverde and Majadales, and
several drill-ready targets that are located less than 30 kilometres from
Proyecto Riotinto. It is expected that the Masa Valverde and Majadales
deposits could be mined via underground methods following the construction of
a ramp. Thereafter, ore would be trucked to Riotinto, consistent with the
Company's strategy to utilise its existing 15 Mtpa mill as a central
processing hub for material sourced from its deposits in the region.
In 2021, the Company continued exploration work at the Masa Valverde and
Majadales deposits, and at the 5km long, shallow Campanario prospect. At
present, three rigs are conducting exploration drilling to the west of Masa
Valverde and at Campanario. Initial indications from the drilling campaign
have been encouraging, with infill drilling at the Masa Valverde deposit
returning long intersections of continuous and high-grade copper
mineralisation as well as polymetallic mineralisations with associated high
gold grades.
Technical consultants are currently finalising a new independent NI 43-101
compliant resource estimate and technical report for PMV. In addition, in
August 2021, the Company submitted application for an exploitation concession
with the Junta de Andalucía.
Riotinto District - Proyecto Riotinto East
In May 2021, the Company announced the acquisition of an option on three new
investigation permits located immediately east of Riotinto. Exploration work
has commenced on the three permits including mapping, rock sampling, soil
geochemistry and geophysics (airborne EM survey). Several coincident
geochemical and geophysical anomalies were defined which will be drill tested
once all the permits are in place.
Proyecto Touro
Proyecto Touro is a high quality past producing copper project located in
Galicia, northwest Spain, and is in the permitting process.
In 2021, the Company focused on engaging with local and regional stakeholders
on a variety of matters. As part of this engagement, the Company began during
the Period, the construction of a new water treatment and monitoring system
that will restore the legacy water runoff from the historical mine.
The Company continues to be confident that its development approach to
Proyecto Touro is in line with international best practice and is working
towards the submission of the Environmental Impact Evaluation for the new
enhanced project design.
Proyecto Ossa Morena ("POM")
In December 2021, the Company announced the acquisition of a 51% interest in
Rio Narcea Nickel, S.L., establishing a presence in the Ossa Morena
Metallogenic Belt in the southwest of Spain. The district has strong
exploration potential for a range of base and precious metals. For 2022, the
Company approved an exploration budget for up to €2 million, with a focus on
the priority targets of Alconchel, Pallares, Vicaria and Guijarro.
Update on Corporate Developments
Judgment on Astor Litigation
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.
The Judgment, which puts an end to the litigation between the parties,
clarifies the basis for calculating the interest due and confirms that it is
payable by the Company. As a result, Atalaya expects the interest to be paid
to be in the range of €10 million to €11.7 million. Any amount payable to
Astor will be paid from the €15.4 million trust account already establish by
Atalaya on 15 July 2021. As at 31 December 2021, the Company has accrued in
its profit and lost account the maximum exposure as interest cost.
Plans to Establish Atalaya's Parent Company in the United Kingdom
The Company is considering re-domiciliation from Cyprus to the United Kingdom
through the incorporation of a new holding company incorporated in England and
Wales.
The Company will provide further information on the process in due course.
Alberto Lavandeira, CEO, commented:
"I am very pleased with all aspects of Atalaya's performance in 2021. Once
again, we demonstrated our ability to operate in a sustainable and safe manner
while achieving record production, highlighting the strength of our people.
Our operations generated record cash flow, providing the Company with the
financial strength to make investments in our growth pipeline, pursue
initiatives that will enhance our sustainability, pay an inaugural dividend
and further strengthen our balance sheet.
"We look forward to 2022, where another good year of production is expected.
We see the industry-wide inflationary pressures as being supportive for copper
fundamentals and expect that energy prices in Spain will return to normalised
levels as Europe enters the spring.
"We remain excited about our portfolio of growth and exploration projects,
which have the potential to significantly increase our production in Spain,
providing our customers with a reliable, sustainable and ethical source of
copper to support the modern economy and the energy transition."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live
presentation relating to the FY2021 results via the Investor Meet Company
platform at 11:00am 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.
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 / Max Richardson + 44 20 3757 6882
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)
Consolidated and Company Statements of Comprehensive Income
for the year ended 31 December 2021
The Company The Group The Company
The Group
(Euro 000's) Note 2021 2021 2020 2020
Revenue 5 405,717 65,849 252,784 1,442
Operating costs and mine site administrative expenses (192,073) - (175,484) -
Mine site depreciation, amortisation and impairment 13,14 (32,276) - (31,683) -
Gross profit 181,368 65,849 45,617 1,442
Administration and other expenses (9,715) (2,422) (6,854) (1,935)
Share based benefits 22 (899) - (816) -
Exploration expenses (1,800) - (1,661) -
Impairment loss on other receivables - - (49) (45)
Care and maintenance expenditure (2,116) - (525) -
Operating profit/(loss) 6 166,838 63,427 35,712 (538)
Net foreign exchange gain/(loss) 4 6,589 1,450 (3,826) 16
Interest income from financial assets at fair value through profit and loss 8 - 12,854 - 13,607
Interest income from financial assets at amortised cost 8 57 2,398 197 2,516
Finance costs 9 (13,657) - (341) -
Profit before tax 159,827 80,129 31,742 15,601
Tax 10 (27,601) (862) (1,352) (928)
Profit for the year 132,226 79,267 30,390 14,673
Profit for the year attributable to:
- Owners of the parent 133,644 79,267 31,479 14,673
- Non-controlling interests (1,418) - (1,089) -
132,226 79,267 30,390 14,673
Earnings per share from operations attributable to equity holders of the
parent during the year:
Basic earnings per share (EUR cents per share) 11 96.7 - 22.9
Diluted earnings per share (EUR cents per share) 11 94.4 - 22.4
Profit for the year 132,226 79,267 30,390 14,673
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
'OCI'
20 (47) (47) 44 44
Total comprehensive income for the year 132,179 79,220 30,434 14,717
Total comprehensive income for the year attributable to:
- Owners of the parent 133,597 79,220 31,523 14,717
- Non-controlling interests (1,418) - (1,089) -
132,179 79,220 30,434 14,717
The notes are an integral part of these consolidated and Company financial
statements.
Consolidated and Company Statements of Financial Position
As at 31 December 2021
As at 31 December As at 31 December
(Euro 000's) The The The The
Group
Company 2021
Group
Company 2020
2021
2020
Note
Assets
Non-current assets
Property, plant and equipment 13 333,096 - 327,174 -
Intangible assets 14 57,368 - 59,816 -
Investment in subsidiaries 15 - 64,171 - 5,448
Trade and other receivables 19 5,330 245,744 2,715 318,857
Non-current financial asset 20 1,101 - 1,101 -
Deferred tax asset 17 5,564 - 8,805 -
402,459 309,915 399,611 324,305
Current assets
Inventories 18 24,781 - 23,576 -
Trade and other receivables 19 50,128 4,433 43,191 10,737
Tax refundable 483 - 815 -
Other financial assets 20 39 39 86 86
Cash and cash equivalents 21 107,517 37,270 37,767 2,049
182,948 41,742 105,435 12,872
Total assets 585,407 351,657 505,046 337,177
Equity and liabilities
Equity attributable to owners of the parent
Share capital 22 13,447 13,447 13,439 13,439
Share premium 22 315,916 315,916 315,714 315,714
Other reserves 23 52,690 8,146 40,049 7,295
Accumulated profit/(losses) 58,754 10,116 (15,512) (21,863)
440,807 347,625 353,690 314,585
Non-controlling interests 24 (4,909) - (3,491) -
Total equity 435,898 347,625 350,199 314,585
Liabilities
Non-current liabilities
Trade and other payables 25 3,450 - 1,448 -
Provisions 26 26,578 - 25,264 -
Lease liability 27 4,913 - 4,796 -
Borrowings 28 34,050 - - -
68,991 - 31,508 -
Current liabilities
Trade and other payables 25 66,191 4,032 68,437 13,002
Lease liability 27 597 - 592 -
Current tax liabilities 10 336 - 1,310 473
Deferred consideration 29 - - 53,000 9,117
Borrowings 28 13,394 - - -
80,518 4,032 123,339 22,592
Total liabilities 149,509 4,032 154,847 22,592
Total equity and liabilities 585,407 351,657 505,046 337,177
The notes 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 23 March 2022 and were signed on its behalf.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Attributable to owners of the parent
(Euro 000's) Non-
Note Share capital Share Other reserves((1)) Accumulated controlling Total equity
Premium((2)) Profit/(losses) Total interest
At 1 January 2020 13,372 314,319 22,836 (30,669) 319,858 (2,402) 317,456
Profit / (loss) for the year - - - 31,479 31,479 (1,089) 30,390
Change in fair value of financial assets through OCI 20 - - 44 - 44 - 44
Total comprehensive income - - 44 31,479 31,523 (1,089) 30,434
Transactions with owners
Issuance of share capital 22 67 1,395 - - 1,462 - 1,462
Depletion factor 23 - - 14,155 (14,155) - - -
Recognition of share-based payments 23
- - 816 - 816 - 816
Recognition of non distributable reserve
23 - - 2,198 (2,198) - - -
Other changes in equity 23 - - - 31 31 - 31
At 31 December 2020/ 13,439 315,714 40,049 (15,512) 353,690 (3,491) 350,199
1 January 2021
Profit / (loss) for the year - - - 133,644 133,644 (1,418) 132,226
Change in fair value of financial assets through OCI 20
- - (47) - (47) - (47)
Total comprehensive income / (loss) for the year - - (47) 133,644 133,597 (1,418) 132,179
Transactions with owners
Issuance of share capital 22 8 202 - - 210 - 210
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
- - 3,317 (3,317) - - -
Other changes in equity 23 - - - (299) (299) - (299)
Interim dividends paid - - - (47,290) (47,290) - (47,290)
At 31 December 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 are an integral part of these consolidated and company financial
statements.
Company Statement of Changes in Equity
for the year ended 31 December 2021
(Euro 000's) Share capital Share Other Accumulated
Note premium((2)) reserves((1)) losses Total
At 1 January 2020 13,372 314,319 6,435 (36,535) 297,591
Profit for the year - - - 14,673 14,673
Change in fair value of financial assets through OCI 20 - - 44 - 44
Total comprehensive income - - 44 14,673 14,717
Issuance of share capital 22 67 1,395 - - 1,462
Recognition of share-based payments 23 - - 816 - 816
At 31 December 2020/1 January 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
Interim dividends paid (47,290) (47,290)
At 31 December 2021 13,447 315,916 8,146 10,116 347,625
(1) Refer to Note 23
(2) The share premium reserve is not available for distribution.
Companies, which do not distribute 70% of their profits after tax, as defined
by the Special Contribution for the Defence of the Republic Law, within two
years after the end of the relevant tax year, will be deemed to have
distributed this amount as dividend on the 31 of December of the second year.
The amount of the deemed dividend distribution is reduced by any actual
dividend already distributed by 31 of December of the second year for the year
the profits relate.
The Company pays special defence contribution on behalf of the shareholders
over the amount of the deemed dividend distribution at a rate of 17%
(applicable since 2014) when the entitled shareholders are natural persons tax
residents of Cyprus and have their domicile in Cyprus. In addition, from 2019
(deemed dividend distribution of year 2017 profits), the Company pays on
behalf of the shareholders General Healthcare System (GHS) contribution at a
rate of 2.65% (31 December 2020: 2.65%), when the entitled shareholders are
natural persons tax residents of Cyprus, regardless of their domicile.
The notes are an integral part of these consolidated and company financial
statements.
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
(Euro 000's) Note 2021 2020
Cash flows from operating activities
Profit before tax 159,827 31,742
Adjustments for:
Depreciation of property, plant and equipment 13 27,680 25,766
Amortisation of intangible assets 14 4,596 4,941
Impairment of intangibles 14 - 985
Recognition of share‑based payments 23 899 816
Interest income 8 (57) (197)
Interest expense 9 846 180
Unwinding of discounting 9 1,063 144
Finance provisions 9 11,737 -
Other provisions 417 -
Legal provisions 26 (61) 238
Impairment loss on other receivables 19 - 49
Net foreign exchange differences (6,692) 3,779
Cash inflows from operating activities before working capital changes 200,255 68,443
Changes in working capital:
Inventories 18 (1,205) (2,246)
Trade and other receivables 19 (8,807) (10,356)
Trade and other payables 25 (14,400) 11,747
Provisions 26 (343) -
Cash flows from operations 175,500 67,588
Interest expense on lease liabilities 27 (11) (17)
Interest paid (846) (180)
Tax paid (25,802) (4,475)
Net cash from operating activities 148,841 62,916
Cash flows from investing activities
Purchases of property, plant and equipment 13 (32,440) (27,046)
Purchases of intangible assets 14 (2,148) (3,311)
Payment of deferred consideration (53,000) -
Interest received 8 57 197
Net cash used in from investing activities (87,531) (30,160)
Cash flows from financing activities
Lease payment 27 (463) (618)
Net proceeds from borrowings 49,446 -
Proceeds from issue of share capital 158 1,378
Dividends paid (47,290) -
Net cash from financing activities 1,851 760
Net increase in cash and cash equivalents 63,161 33,516
Net foreign exchange difference 6,589 (3,826)
Cash and cash equivalents:
At beginning of the year 21 37,767 8,077
At end of the year 21 107,517 37,767
The notes are an integral part of these consolidated and company financial
statements.
Company Statement of Cash Flows
for the year ended 31 December 2021
(Euro 000's) Note 2021 2020
Cash flows from operating activities
Profit before tax 80,129 15,601
Adjustments for:
Interest income 8 - (16)
Interest income from interest-bearing intercompany loans 8 (15,252) (16,123)
Impairment loss on other receivables - (45)
Unrealised foreign exchange loss on financing activities - 20
Cash used in operating activities before working capital changes 64,877 (563)
Changes in working capital:
Trade and other receivables 19 81,713 (15,549)
Trade and other payables 25 (20,103) 2,728
Cash flows from / (used in) operations 126,487 (13,384)
Tax paid (1,614) (2,194)
Net cash from / (used in) operating activities 124,873 (15,578)
Cash flows from investing activities
Investment in subsidiaries 15 (57,824) (2)
Interest income from interest-bearing intercompany loans 8 15,252 16,123
Net cash (used in) / from investing activities (42,572) 16,121
Cash flows from financing activities
Proceeds from issue of share capital 22 210 1,378
Dividends paid 12 (47,290) -
Net cash (used in) / from financing activities (47,080) 1,378
Net increase/(decrease) in cash and cash equivalents 35,221 1,921
Cash and cash equivalents:
At beginning of the year 21 2,049 128
At end of the year 21 37,270 2,049
The notes are an integral part of these consolidated and company financial
statements.
Notes to the Consolidated and Company Financial Statements
Year ended 31 December 2021
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 and on the TSX on 20 December 2010 under the symbol AYM. The
Company continued to be listed on AIM and the TSX as at 31 December 2021.
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 Riotinto Este
In December 2020, Atalaya entered into a Memorandum of Understanding with a
local private Spanish company to acquire a 100% beneficial interest in three
investigation permits (known as Peñas Blancas, Cerro Negro and Herreros
investigation permits), which cover approximately 12,368 hectares and are
located immediately east of Proyecto Riotinto.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51% interest in Rio
Narcea Nickel, S.L., which owns 17 investigation permits. The acquisition also
provided a 100% interest in three investigation permits that are also located
along the Ossa-Morena Metallogenic Belt.
2. Summary of significant accounting policies
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.
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 2021, 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 including any potential future
impact of the COVID-19 pandemic; (ii) market volatility in commodity 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 is assessing the impact of geopolitical developments as described
in note 35 (Events after the reporting period). Currently no significant
impact is expected in the operations of the Group.
2.2 Changes in accounting policy and disclosures
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 2021.
Several other amendments and interpretations apply for the first time in 2021,
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.
IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising
from a Single Transaction (Amendments)
The amendments are effective for annual periods beginning on or after January
1, 2023 with earlier application permitted. In May 2021, the Board issued
amendments to IAS 12, which narrow the scope of the initial recognition
exception under IAS 12 and specify how companies should account for deferred
tax on transactions such as leases and decommissioning obligations. Under the
amendments, the initial recognition exception does not apply to transactions
that, on initial recognition, give rise to equal taxable and deductible
temporary differences. It only applies if the recognition of a lease asset and
lease liability (or decommissioning liability and decommissioning asset
component) give rise to taxable and deductible temporary differences that are
not equal. The Amendments have not yet been endorsed by the EU. The amendment
is not expected to have a material impact on the Group.
Covid-19-Related Rent Concessions beyond 30 June 2021 Amendments to IFRS 16
On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment
to IFRS 16 Leases. The amendments provide relief to lessees from applying IFRS
16 guidance on lease modification accounting for rent concessions arising as a
direct consequence of the Covid-19 pandemic. As a practical expedient, a
lessee may elect not to assess whether a Covid-19 related rent concession from
a lessor is a lease modification. A lessee that makes this election accounts
for any change in lease payments resulting from the Covid-19 related rent
concession the same way it would account for the change under IFRS 16, if the
change were not a lease modification.
The amendment was intended to apply until 30 June 2021, but as the impact of
the pandemic is continuing, on 31 March 2021, the IASB extended the period of
application of the practical expedient to 30 June 2022. The amendment applies
to annual reporting periods beginning on or after 1 April 2021. However, the
Group has not received Covid-19-related rent concessions but plans to apply
the practical expedient if it becomes applicable within allowed period of
application.
Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16
The amendments provide temporary reliefs which address the financial reporting
effects when an interbank offered rate (IBOR) is replaced with an alternative
nearly risk-free interest rate (RFR). The amendments include the following
practical expedients:
- A practical expedient to require contractual changes, or changes
to cash flows that are directly required by the reform, to be treated as
changes to a floating interest rate, equivalent to a movement in a market rate
of interest.
- Permit changes required by IBOR reform to be made to hedge
designations and hedge documentation without the hedging relationship being
discontinued.
Temporary relief provided to entities from having to meet the separately
identifiable requirement when an RFR instrument is designated as a hedge of a
risk component.
These amendments had no impact on the consolidated financial statements of the
Group. The Group intends to use the practical expedients in future periods if
they become applicable.
The new and amended standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the financial statements are
disclosed below. Some of them were adopted by the European Union and others
not yet. The Group and the Company intend to adopt these new and amended
standards and interpretations, if applicable, when they become effective.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to
specify the requirements for classifying liabilities as current or
non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of the reporting
period
- That classification is unaffected by the likelihood that an
entity will exercise its deferral right
- That only if an embedded derivative in a convertible liability
is itself an equity instrument would the terms of a liability not impact its
classification
The amendments are effective for annual reporting periods beginning on or
after 1 January 2023 and must be applied retrospectively. The Group is
currently assessing the impact the amendments will have on current practice
and whether existing loan agreements may require renegotiation. The amendment
is not expected to have a material impact on the Group.
Reference to the Conceptual Framework - Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations -
Reference to the Conceptual Framework. The amendments are intended to replace
a reference to the Framework for the Preparation and Presentation of Financial
Statements, issued in 1989, with a reference to the Conceptual Framework for
Financial Reporting issued in March 2018 without significantly changing its
requirements.
The Board also added an exception to the recognition principle of IFRS 3 to
avoid the issue of potential 'day 2' gains or losses arising for liabilities
and contingent liabilities that would be within the scope of IAS 37 or IFRIC
21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for
contingent assets that would not be affected by replacing the reference to the
Framework for the Preparation and Presentation of Financial Statements. The
amendments are effective for annual reporting periods beginning on or after 1
January 2022 and apply prospectively.
The amendment is not expected to have a material impact on the Group.
Property, Plant and Equipment: Proceeds before Intended Use - Amendments to
IAS 16
In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before
Intended Use, which prohibits entities deducting from the cost of an item of
property, plant and equipment, any proceeds from selling items produced while
bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the costs of producing
those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on or after
1 January 2022 and must be applied retrospectively to items of property, plant
and equipment made available for use on or after the beginning of the earliest
period presented when the entity first applies the amendment.
The amendments are not expected to have a material impact on the Group.
Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an
entity needs to include when assessing whether a contract is onerous or
loss-making.
The amendments apply a "directly related cost approach". 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 contract activities.
General and administrative costs do not relate directly to a contract and are
excluded unless they are explicitly chargeable to the counterparty under the
contract.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2022. The amendment is not expected to have a material impact
on the Group.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test for
derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process, the
IASB issued amendment to IFRS 9. The amendment clarifies the fees that an
entity includes when assessing whether the terms of a new or modified
financial liability are substantially different from the terms of the original
financial liability. The fees include only those paid or received between the
borrower and the lender, including fees paid or received by either the
borrower or lender on the other's behalf. An entity applies the amendment to
financial liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the entity first applies the
amendment.
The amendment is effective for annual reporting periods beginning on or after
1 January 2022 with earlier adoption permitted. The amendment is not expected
to have a material impact on the Group.
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces
a definition of 'accounting estimates'. The amendments clarify the distinction
between changes in accounting estimates and changes in accounting policies and
the correction of errors. Also, they clarify how entities use measurement
techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2023 and apply to changes in accounting policies and
accounting estimates that occur on or after the start of that period. Earlier
application is permitted as long as this fact is disclosed.
The amendments are not expected to have a material impact on the Group.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice
Statement 2 Making Materiality Judgements, in which it provides guidance and
examples to help entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting policy
disclosures that are more useful by replacing the requirement for entities to
disclose their 'significant' accounting policies with a requirement to
disclose their 'material' accounting policies and adding guidance on how
entities apply the concept of materiality in making decisions about accounting
policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or
after 1 January 2023 with earlier application permitted. Since the amendments
to the Practice Statement 2 provide non-mandatory guidance on the application
of the definition of material to accounting policy information, an effective
date for these amendments is not necessary.
The Group is currently assessing the impact of the amendments to determine the
impact they will have on the Group's accounting policy disclosures.
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 Conceptual Framework for Financial Reporting without 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 amounts
received from selling items produced while the company is preparing the asset
for its intended use. Instead, a company will recognise 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.
· 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
The Amendments have not yet been endorsed by the EU. The amendment is not
expected to have a material impact on the Group.
2.3 Consolidation
(a) Basis of consolidation
The consolidated financial statements comprise the financial statements of
Atalaya Mining Plc and its subsidiaries.
(b) Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which
the Group and the Company has control. Control exists when the Group is
exposed, or has rights, to variable returns for its involvement with the
investee and has the ability to affect those returns through its power over
the investee. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing whether the
Group controls another entity. The Group also assesses existence of control
where it does not have more than 50% of the voting power but is able to govern
the financial and operating policies by virtue of de-facto control.
De-facto control may arise in circumstances where the size of the Group's
voting rights relative to the size and dispersion of holdings of other
shareholders give the Group the power to govern the financial and operating
policies, etc.
The Group re-assesses whether it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this
results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies in line with the Group's accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in
full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. If the Group loses control over a subsidiary, it
derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity, while any resultant
gain or loss is recognised in profit or loss. Any investment retained is
recognised at fair value'.
The main operating subsidiary of Atalaya Mining Plc is the 100% owned Atalaya
Riotinto Minera, S.L.U. which operates "Proyecto Riotinto", in the historical
site of Huelva, Spain.
The name and shareholding of the entities included in the Group in these
financial statements are:
Entity name Business %((3)) Country
Atalaya Mining, Plc Holding n/a Cyprus
EMED Marketing Ltd. Marketing 100% Cyprus
EMED Mining Spain, S.L.( (5)) Dormant 100% Spain
Atalaya Riotinto Minera, S.L.U. Operating 100% Spain
Recursos Cuenca Minera, S.L. ((4)) Operating 50% Spain
Atalaya Minasderiotinto Project (UK), Ltd. Holding 100% United Kingdom
Eastern Mediterranean Exploration & Development, S.L.U. Operating 100% Spain
Atalaya Touro (UK), Ltd. Holding 100% United Kingdom
Fundación Atalaya Riotinto Trust 100% Spain
Cobre San Rafael, S.L. ((1)) Development 10% Spain
Atalaya Servicios Mineros, S.L.U. Dormant 100% Spain
Atalaya Masa Valverde, S.L.U. Development 100% Spain
Atalaya Financing Ltd. Financing 100% Cyprus
Rio Narcea Nickel S.L. ((2)) Development 51% Spain
Notes
((1) )Cobre San Rafael, S.L. is the entity which holds the
mining rights of the 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 to appoint the key personnel. Refer to
Note 30 for details on the acquisition of Cobre San Rafael, S.L.
((2) )Rio Narcea Nickel S.L. is the entity which holds 17
investigation permits. This group of 17 permits will be known collectively as
Proyecto Ossa Morena ("POM") and are strategically distributed along
prospective zones of the Ossa Morena Metallogenic Belt, and in particular,
along the southern flank of the major Olivenza-Monesterio Antiform ("OMA").
Refer to Note 30 for details on the acquisition of Atalaya Ossa Morena, S.L.
((3) )The effective proportion of shares held as at 31 December
2021 and 2020 remained unchanged.
((4) )Recursos Cuenca Minera is a joint venture with Atalaya
Riotinto Minera SLU, see note 16.
((5) )EMED Mining Spain, S.L. was disposed on 4 January 2022.
The Group applied the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the fair
value of the transferred assets, liabilities incurred by the former owners of
the acquiree and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired,
liabilities and contingent liabilities assumed in a business combination are
measured initially at fair value at the acquisition date. The Group recognised
any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest's
proportionated share of the recognised amounts of acquiree's identifiable net
assets.
(c) Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer's previously held equity interest in the
acquire is re-measured to fair value at the acquisition date; any gains or
losses arising from such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at
fair value at the acquisition date. Subsequent changes to the fair value of
the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with IFRS 9 in profit or loss. Contingent
consideration that is classified as equity is not re-measured, and its
subsequent settlement is accounted for within equity.
Inter-company transactions, balances, income and expenses on transactions
between Group companies are eliminated. Gains and losses resulting from
intercompany transactions that are recognised in assets are also eliminated.
Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
(d) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of
control are accounted for as equity transactions - that is, as transactions
with the owners in their capacity as owners. The difference between fair value
of any consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity. Gains or losses
on disposals to non-controlling interests are also recorded in equity.
(e) Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is
re-measured to its fair value at the date when control is lost, with the
change in carrying amount recognised in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In
addition, any amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had directly disposed
of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
(f) Associates and joint ventures
An associate is an entity over which the Group has significant influence.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee (generally accompanying a
shareholding of between 20% and 50% of the voting rights) but is not control
or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the joint
venture. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control.
Investments in associates or joint ventures are accounted for using the equity
method of accounting. Under the equity method, the investment is initially
recognised at cost, and the carrying amount is increased or decreased to
recognise the investor's share of the profit or loss of the investee after the
date of acquisition. The Group's investment in associates or joint ventures
includes goodwill identified on acquisition.
If the ownership interest in an associate or joint venture is reduced but
significant influence is retained, only a proportionate share of the amounts
previously recognised in other comprehensive income is reclassified to profit
or loss where appropriate.
The Group's share of post-acquisition profit or loss is recognised in the
income statement, and its share of post-acquisition movements in other
comprehensive income is recognised in other comprehensive income, with a
corresponding adjustment to the carrying amount of the investment. When the
Group share of losses in an associate or a joint venture equals or exceeds its
interest in the associate or joint venture, including any other unsecured
receivables, the Group does not recognise further losses, unless it has
incurred legal or constructive obligations or made payments on behalf of the
associate or the joint venture.
The Group determines at each reporting date whether there is any objective
evidence that the investment in the associate or the joint venture is
impaired. If this is the case, the Group calculates the amount of impairment
as the difference between the recoverable amount of the associate or the joint
venture and its carrying value and recognises the amount adjacent to 'share of
profit/(loss) of associates' or joint ventures' in the income statement.
Profits and losses resulting from upstream and downstream transactions between
the Group and its associate or joint venture are recognised in the Group's
consolidated financial statements only to the extent of unrelated investors'
interests in the associates or the joint ventures. Unrealised losses are
eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Dilution gains and losses arising in investments in associates or joint
ventures are recognised in the income statement.
(g) Functional currency
Functional and presentation currency items included in the financial
statements of each of the Group's entities are measured using the currency of
the primary economic environment in which the entity operates ('the functional
currency'). The financial statements are presented in Euro which is the
Company's functional and presentation currency.
Determination of functional currency may involve certain judgements to
determine the primary economic environment and the parent entity reconsiders
the functional currency of its entities if there is a change in events and
conditions which determined the primary economic environment.
Foreign currency transactions are translated into the functional currency
using the spot exchange rates prevailing at the dates of the transactions or
valuation where items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions are recognised in the
income statement.
Monetary assets and liabilities denominated in foreign currencies are updated
at year-end spot exchange rates.
Non-monetary items that are measured at historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial
transaction. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Gains or losses of monetary and non-monetary items are recognised in the
income statement.
Balance sheet items are translated at period-end exchange rates. Exchange
differences on translation of the net assets of such entities whose functional
currency are not the Euro are taken to equity and recorded in a separate
currency translation reserve.
2.4 Investments in subsidiary companies in the Company's financial statements
Investments in subsidiary companies are stated at cost less provision for
impairment in value, which is recognised as an expense in the period in which
the impairment is identified.
2.5 Interest in joint arrangements
A joint arrangement is a contractual arrangement whereby the Group and other
parties undertake an economic activity that is subject to joint control that
is when the strategic, financial and operating policy decisions relating to
the activities the joint arrangement require the unanimous consent of the
parties sharing control.
Where a Group entity undertakes its activities under joint arrangements
directly, the Group's share of jointly controlled assets and any liabilities
incurred jointly with other ventures are recognised in the financial
statements of the relevant entity and classified according to their nature.
Liabilities and expenses incurred directly in respect of interests in jointly
controlled assets are accounted for on an accrual basis. Income from the sale
or use of the Group's share of the output of jointly controlled assets, and
its share of joint arrangement expenses, are recognised when it is probable
that the economic benefits associated with the transactions will flow to/from
the Group and their amount can be measured reliably.
The Group enters joint arrangements that involve the establishment of a
separate entity in which each acquiree has an interest (jointly controlled
entity). The Group reports its interests in jointly controlled entities using
the equity method of accounting.
Where the Group transacts with its jointly controlled entities, unrealised
profits and losses are eliminated to the extent of the Group's interest in the
joint arrangement.
2.6 Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the CEO who
makes strategic decisions.
The Group has only one distinct business segment, being that of mining
operations, mineral exploration and development.
2.7 Inventory
Inventory consists of copper concentrates, ore stockpiles and metal in circuit
and spare parts. Inventory is physically measured or estimated and valued at
the lower of cost or net realisable value. Net realisable value is the
estimated future sales price of the product the entity expects to realise when
the product is processed and sold, less estimated costs to complete production
and bring the product to sale. Where the time value of money is material,
these future prices and costs to complete are discounted.
Cost is determined by using the FIFO method and comprises direct purchase
costs and an appropriate portion of fixed and variable overhead costs,
including depreciation and amortisation, incurred in converting materials into
finished goods, based on the normal production capacity. The cost of
production is allocated to joint products using a ratio of spot prices by
volume at each month end. Separately identifiable costs of conversion of each
metal are specifically allocated.
Materials and supplies are valued at the lower of cost or net realisable
value. Any provision for obsolescence is determined by reference to specific
items of stock. A regular review is undertaken to determine the extent of any
provision for obsolescence.
2.8 Assets under construction
All subsequent expenditure on the construction, installation or completion of
infrastructure facilities including mine plants and other necessary works for
mining, are capitalised in "Assets under Construction". Any costs incurred in
testing the assets to determine if they are functioning as intended, are
capitalised, net of any proceeds received from selling any product produced
while testing. Where these proceeds exceed the cost of testing, any excess is
recognised in the statement of profit or loss and other comprehensive income.
After production starts, all assets included in "Assets under Construction"
are then transferred to the relevant asset categories.
Once a project has been established as commercially viable, related
development expenditure is capitalised. A development decision is made based
upon consideration of project economics, including future metal prices,
reserves and resources, and estimated operating and capital costs.
Capitalisation of costs incurred and proceeds received during the development
phase ceases when the property is capable of operating at levels intended by
management.
Capitalisation ceases when the mine is capable of commercial production,
except for development costs which give rise to a future benefit.
Pre-commissioning sales are offset against the cost of assets under
construction. No depreciation is recognised until the assets are substantially
complete and ready for productive use.
2.9 Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated
depreciation and any accumulated impairment losses.
Subsequent costs are included in the assets' carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part
is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Property, plant and equipment are depreciated to their estimated residual
value over the estimated useful life of the specific asset concerned, or the
estimated remaining life of the associated mine ("LOM"), field or lease.
Depreciation commences when the asset is available for use.
The major categories of property, plant and equipment are
depreciated/amortised on a Unit of Production ("UOP") and/or straight-line
basis as follows:
Buildings UOP
Mineral rights UOP
Deferred mining costs UOP
Plant and machinery UOP
Motor vehicles 5 years
Furniture/fixtures/office equipment 5 - 10 years
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised within "Other (losses)/gains - net" in
the income statement.
(a) Mineral rights
Mineral reserves and resources which can be reasonably valued are recognised
in the assessment of fair values on acquisition. Mineral rights for which
values cannot be reasonably determined are not recognised. Exploitable mineral
rights are amortised using the UOP basis over the commercially recoverable
reserves and, in certain circumstances, other mineral resources. Mineral
resources are included in amortisation calculations where there is a high
degree of confidence that they will be extracted in an economic manner.
(b) Deferred mining costs - stripping costs
Mainly comprises of certain capitalised costs related to pre-production and
in-production stripping activities as outlined below.
Stripping costs incurred in the development phase of a mine (or pit) before
production commences are capitalised as part of the cost of constructing the
mine (or pit) and subsequently amortised over the life of the mine (or pit) on
a UOP basis.
In-production stripping costs related to accessing an identifiable component
of the ore body to realise benefits in the form of improved access to ore to
be mined in the future (stripping activity asset), are capitalised within
deferred mining costs provided all the following conditions are met:
i. it is probable that the future economic benefit associated
with the stripping activity will be realised;
ii. the component of the ore body for which access has been
improved can be identified and;
iii. the costs relating to the stripping activity associated with
the improved access can be reliably measured.
If all of the criteria are not met, the production stripping costs are charged
to the consolidated statement of income as they are incurred.
The stripping activity asset is initially measured at cost, which is the
accumulation of costs directly incurred to perform the stripping activity that
improves access to the identified component of ore, plus an allocation of
directly attributable overhead costs.
(c) Exploration costs
Under the Group's accounting policy, exploration expenditure is not
capitalised until the management determines a property will be developed and
point is reached at which there is a high degree of confidence in the
project's viability and it is considered probable that future economic
benefits will flow to the Group. A development decision is made based upon
consideration of project economics, including future metal prices, reserves
and resources, and estimated operating and capital costs.
Subsequent recovery of the resulting carrying value depends on successful
development or sale of the undeveloped project. If a project does not prove
viable, all irrecoverable costs associated with the project net of any related
impairment provisions are written off.
(d) Major maintenance and repairs
Expenditure on major maintenance refits or repairs comprises the cost of
replacement assets or parts of assets and overhaul costs. Where an asset, or
part of an asset, that was separately depreciated and is now written off is
replaced, and it is probable that future economic benefits associated with the
item will flow to the Group through an extended life, the expenditure is
capitalised.
Where part of the asset was not separately considered as a component and
therefore not depreciated separately, the replacement value is used to
estimate the carrying amount of the replaced asset(s) which is immediately
written off. All other day-to-day maintenance and repairs costs are expensed
as incurred.
(e) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale (a qualifying asset) are capitalised as
part of the cost of the respective asset. Where funds are borrowed
specifically to finance a project, the amount capitalised represents the
actual borrowing costs incurred. All other borrowing costs are recognised in
the statement of profit or loss and other comprehensive income in the period
in which they are incurred.
(f) Restoration, rehabilitation and decommissioning
Restoration, rehabilitation and decommissioning costs arising from the
installation of plant and other site preparation work, discounted using a risk
adjusted discount rate to their net present value, are provided for and
capitalised at the time such an obligation arises.
The costs are charged to the consolidated statement of income over the life of
the operation through depreciation of the asset and the unwinding of the
discount on the provision. Costs for restoration of subsequent site
disturbance, which are created on an ongoing basis during production, are
provided for at their net present values and charged to the consolidated
statement of income as extraction progresses.
Changes in the estimated timing of the rehabilitation or changes to the
estimated future costs are accounted for prospectively by recognising an
adjustment to the rehabilitation liability and a corresponding adjustment to
the asset to which it relates, provided the reduction in the provision is not
greater than the depreciated capitalised cost of the related asset, in which
case the capitalised cost is reduced to zero and the remaining adjustment
recognised in the consolidated statement of income. In the case of closed
sites, changes to estimated costs are recognised immediately in the
consolidated statement of income.
2.10 Intangible assets
(a) Business combination and goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess
of the consideration transferred over the acquired interest in net fair value
of the net identifiable assets, liabilities and contingent liabilities of the
acquiree and the fair value of the non-controlling interest in the acquiree.
The results of businesses acquired during the year are brought into the
consolidated financial statements from the effective date of acquisition. The
identifiable assets, liabilities and contingent liabilities of a business
which can be measured reliably are recorded at their provisional fair values
at the date of acquisition. Acquisition-related costs are expensed as
incurred.
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. The
carrying value of goodwill is compared to the recoverable amount, which is the
higher of value in use and the fair value less costs to sell. Any impairment
is recognised immediately as an expense and is not subsequently reversed.
For the purposes of goodwill impairment testing, goodwill acquired in a
business combination is allocated to groups of CGUs that are expected to
benefit from the synergies of the combination.
An impairment loss in respect of goodwill is not reversed.
(b) Permits
Permits are capitalised as intangible assets which relate to projects that are
at the pre-development stage. No amortisation charge is recognised in respect
of these intangible assets. Once the Group receives those permits and commence
production, the intangible assets relating to permits will be depreciated on a
UOP basis.
Other intangible assets include computer software.
Intangible assets acquired separately are measured on initial recognition at
cost. The cost of intangible assets acquired in a business combination is
their fair value at the date of acquisition provided they meet recognition
criteria as per IFRS 3. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation (calculated on a
straight-line basis over their useful lives) and accumulated impairment
losses, if any.
The useful lives of intangible assets are assessed as either finite or
indefinite.
Intangible assets with finite lives are amortised over their useful economic
lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying amount of
the asset and are recognised in the consolidated and company statements of
comprehensive income when the asset is derecognised.
2.11 Impairment of non-financial assets
Assets that have an indefinite useful life - for example, goodwill or
intangible assets not ready for use - are not subject to amortisation and are
tested annually for impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Non-financial
assets other than goodwill that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
2.12 Financial assets and liabilities
2.12.1 Classification
From 1 January 2019, the Group classifies its financial assets in the
following measurement categories:
• those to be measured at amortised cost.
• those to be measured subsequently at fair value through
OCI, and.
• those to be measured subsequently at fair value through
profit or loss.
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's and
the Company's business model for managing them. In order for a financial asset
to be classified and measured at amortised cost, it needs to give rise to cash
flows that are 'solely payments of principal and interest' ('SPPI') on the
principal amount outstanding. This assessment is referred to as the SPPI test
and is performed at an instrument level.
For assets measured at fair value, gains and losses will either be recorded in
profit or loss or OCI. For investments in equity instruments that are not held
for trading, this will depend on whether the group has made an irrevocable
election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model
for managing those assets changes.
Regular way purchases and sales of financial assets are recognised on
trade-date, the date on which the Group commits to purchase or sell the
asset.
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety
when determining whether their cash flows are solely payment of principal and
interest.
Subsequent measurement of debt instruments depends on the Group's business
model for managing the asset and the cash flow characteristics of the asset.
There are three measurement categories into which the Group classifies its
debt instruments:
2.12.2 Amortised cost
Assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are measured at
amortised cost. Interest income from these financial assets is included in
finance income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses.
Impairment losses are presented as separate line item in the statement of
profit or loss.
The Company´s financial assets at amortised cost include current and
non-current receivables (other than trade receivables which are measured at
fair value through profit and loss) and cash and cash equivalents.
2.12.3 Fair value through other comprehensive income
Financial assets which are debt instruments, that are held for collection of
contractual cash flows and for selling the financial assets, where the assets'
cash flows represent solely payments of principal and interest, are measured
at FVOCI. Movements in the carrying amount are taken through OCI, except for
the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in profit or loss. When the
financial asset is derecognised, the cumulative gain or loss previously
recognised in OCI is reclassified from equity to profit or loss and recognised
in other gains/(losses). Interest income from these financial assets is
included in finance income using the effective interest rate method. Foreign
exchange gains and losses are presented in net foreign exchange gain/(loss)
before tax and impairment expenses are presented as a separate line item in
the statement of profit or loss.
At transition to IFRS 9, the Group had certain financial asset that were
accounted for as debt instruments at fair value through other comprehensive
income.
2.12.4 Equity instruments designated as fair value through other comprehensive
income
Upon initial recognition, the Group can elect to classify irrevocably its
equity investments as equity instruments designated at fair value through OCI
when they meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is determined on
an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or
loss. Dividends are recognised as other income in the consolidated and company
statements of comprehensive income when the right of payment has been
established, except when the Group benefits from such proceeds as a recovery
of part of the cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value through OCI are
not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under
this category.
2.12.5 Assets at fair value through profit and loss
Assets that do not meet the criteria for amortised cost or FVOCI are measured
at FVPL. A gain or loss on a debt investment that is subsequently measured at
FVPL is recognised as profit or loss and presented net within other
gains/(losses) in the period in which it arises.
Changes in the fair value of financial assets at FVPL are recognised in other
gains/(losses) in the consolidated and company statements of comprehensive
income as applicable. The Company's and Group's financial assets at fair value
through profit and loss include current and non-current receivables (other
than trade receivables which are measured amortised cost).
2.12.6 De-recognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
2.12.7 Impairment of financial assets
From 1 January 2019, the Group assesses on a forward looking basis the
expected credit losses associated with its debt instruments carried at
amortised cost. Expected credit losses are based on the difference between the
contractual cash flows due in accordance with the contract and all the cash
flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements that are
integral to the contractual terms.
For receivables (other than trade receivables which are measured at FVPL), the
Group applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the
receivables.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.
2.12.8. Financial liabilities and trade payables
After initial recognition, interest-bearing loans and borrowings and trade and
other payables are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the consolidated and company
statements of comprehensive income when the liabilities are derecognised, as
well as through the EIR amortisation process.
Amortised cost is calculated by taking any discount or premium on acquisition
and fees or costs that are an integral part of the EIR, into account. The EIR
amortisation is included as finance costs in the consolidated and company
statements of comprehensive income
2.13 Current versus Non-current Classification
The Group presents assets and liabilities in the consolidated and company
statements of financial position based on current/non-current classification.
(a) An asset is current when it is either:
· Expected to be realised or intended to be sold or consumed in
normal operating cycle;
· Held primarily for the purpose of trading;
· Expected to be realised within 12 months after the reporting
period
Or
· Cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period
All other assets are classified as non-current.
(b) A liability is current when either:
· It is expected to be settled in the normal operating cycle;
· It is held primarily for the purpose of trading
· It is due to be settled within 12 months after the reporting
period
Or
· There is no unconditional right to defer the settlement of the
liability for at least 12 months after the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and
liabilities.
2.14 Cash and cash equivalents
In the consolidated and company statements of cash flows, cash and cash
equivalents includes cash in hand and in bank including deposits held at call
with banks, with a maturity of less than 3 months.
2.15 Provisions
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 the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
2.16 Interest-bearing loans and borrowings
Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class
of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of
obligations may be small. Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of money and
the risks specific to the obligation. The increase in the provision due to
passage of time is recognised as interest expense.
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is
recognised in profit or loss over the period of the borrowings, using the
effective interest method, unless they are directly attributable to the
acquisition, construction or production of a qualifying asset, in which case
they are capitalised as part of the cost of that asset.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is
capitalised as a prepayment and amortised over the period of the facility to
which it relates.
Borrowing costs are interest and other costs that the Group incurs in
connection with the borrowing of funds, including interest on borrowings,
amortisation of discounts or premium relating to borrowings, amortisation of
ancillary costs incurred in connection with the arrangement of borrowings,
finance lease charges and exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to interest
costs.
2.17 Deferred consideration
Deferred consideration arises when settlement of all or any part of the cost
of an agreement is deferred. It is stated at fair value at the date of
recognition, which is determined by discounting the amount due to present
value at that date. Interest is imputed on the fair value of
non-interest-bearing deferred consideration at the discount rate and expensed
within interest payable and similar charges. At each balance sheet date
deferred consideration comprises the remaining deferred consideration valued
at acquisition plus interest imputed on such amounts from recognition to the
balance sheet date.
2.18 Share capital
Ordinary shares are classified as equity. The difference between the fair
value of the consideration received by the Company and the nominal value of
the share capital being issued is taken to the share premium account.
Incremental costs directly attributable to the issue of new ordinary shares
are shown in equity as a deduction, net of tax, from the proceeds in the share
premium account.
2.19 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is
recognised in the income statement, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period date in
the countries where the Company and its subsidiaries operate and generate
taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition
of goodwill; deferred income tax is also not recognised if it arises from
initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Income tax is determined using tax
rates (and laws) that have been enacted or substantively enacted by the end of
the reporting period date and are expected to apply when the related deferred
tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilised.
Deferred income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except for deferred income tax
liabilities where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle the balances
on a net basis.
2.20 Share-based payments
The Group operates a share-based compensation plan, under which the entity
receives services from employees as consideration for equity instruments
(options) of the Group. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense. The fair
value is measured using the Black Scholes pricing model. The inputs used in
the model are based on management's best estimates for the effects of
non-transferability, exercise restrictions and behavioural considerations.
Non-market performance and service conditions are included in assumptions
about the number of options that are expected to vest.
Vesting conditions are: (i) the personnel should be an employee that provides
services to the Group; and (ii) should be in continuous employment for the
whole vesting period of 3 years. Specific arrangements may exist with senior
managers and board members, whereby their options stay in use until the end.
The total expense is recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied (Note
23).
2.21 Rehabilitation provisions
The Group records the present value of estimated costs of legal and
constructive obligations required to restore operating locations in the period
in which the obligation is incurred. The nature of these restoration
activities includes dismantling and removing structures, rehabilitating mines
and tailings dams, dismantling operating facilities, closure of plant and
waste sites and restoration, reclamation and re-vegetation of affected areas.
The obligation generally arises when the asset is installed, or the
ground/environment is disturbed at the production location. When the liability
is initially recognised, the present value of the estimated cost is
capitalised by increasing the carrying amount of the related mining assets to
the extent that it was incurred prior to the production of related ore. Over
time, the discounted liability is increased for the change in present value
based on the discount rates that reflect current market assessments and the
risks specific to the liability. The periodic unwinding of the discount is
recognised in the consolidated income statement as a finance cost. Additional
disturbances or changes in rehabilitation costs will be recognised as
additions or charges to the corresponding assets and rehabilitation liability
when they occur. For closed sites, changes to estimated costs are recognised
immediately in the consolidated income statement.
The Group assesses its mine rehabilitation provision annually. Significant
estimates and assumptions are made in determining the provision for mine
rehabilitation as there are numerous factors that will affect the ultimate
liability payable. These factors include estimates of the extent and costs of
rehabilitation activities, technological changes, regulatory changes and
changes in discount rates. Those uncertainties may result in future actual
expenditure differing from the amounts currently provided. The provision at
the consolidated statement of financial position date represents management's
best estimate of the present value of the future rehabilitation costs
required.
2.22 Leases
The determination of whether an arrangement is, or contains a lease is based
on the substance of the arrangement at inception date including whether the
fulfilment of the arrangement is dependent on the use of a specific asset or
assets or the arrangement conveys a right to use the asset.
The Group assesses at contract inception whether a contract is, or contains, a
lease. That is, if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
A reassessment is made after inception of the lease only if one of the
following applies:
a) There is a change in contractual terms, other than a renewal or extension
of the arrangement;
b) A renewal option is exercised, or extension granted, unless the term of the
renewal or extension was initially included in the lease term;
c) There is a change in the determination of whether fulfilment is dependent
on a specified asset; or
d) There is a substantial change to the asset.
Group as a lessee
The Group has lease contracts for various items of laboratory equipment, motor
vehicle, lands and buildings used in its operations. Leases of laboratory
equipment and motor vehicles generally have lease terms for four years, while
lands and buildings generally have lease terms for the life of mine, currently
after 13 years of operation. The Group's obligations under its leases are
secured by the lessor's title to the leased assets. Generally, the Group is
restricted from assigning and subleasing the leased assets.
Accounting policy - leases
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset at the end
of the lease term, the recognised right-of-use assets are depreciated on a
straight-line basis over the shorter of its estimated useful life and the
lease term. Right-of-use assets are subject to impairment.
After initial measurement, the right-of-use assets are depreciated from the
commencement date using the straight-line method over the shorter of the
estimated useful lives of the right-of-use assets or the end of lease term.
These are as follows:
Right-of-use asset Depreciation terms in years
Lands and buildings Based on Units of Production (UOP)
Motor vehicles Based on straight line depreciation
Laboratory equipment Based on straight line depreciation
After the commencement date, the right-of-use assets are measured at cost less
any accumulated depreciation and any accumulated impairment losses and
adjusted for any remeasurement of the lease liability.
Lease liabilities
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Generally, the Group uses
its incremental borrowing rate as the discount rate. Lease payments included
in the measurement of the lease liability include the following:
· Fixed payments, less any lease incentives receivable
· Variable lease payments that depend on an index or rate,
initially measured using the index or rate as at the commencement date
· Amounts expected to be payable by the lessee under residual value
guarantees
· The exercise price of a purchase option if the lessee is
reasonably certain to exercise that option
· Lease payments in an optional renewal period if the Group is
reasonably certain to exercise an extension option
· Payments of penalties for early terminating the lease, unless the
Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest
rate method. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is
re-measured if there is a modification, a change in the lease term, a change
in the in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset. The result of this re-measurement is disclosed
in a line of the right-of-use assets note as modifications.
When the lease liability is remeasured, a corresponding adjustment is made to
the carrying amount of the right-of-use asset or is recorded as profit or loss
if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases of machinery and equipment (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered of low value (i.e., below
€5,000). Lease payments on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis over the lease term.
Significant judgement in determining the lease term of contracts with renewal
options
The Group determines the lease term as the non-cancellable term of the lease,
together with any periods covered by an option to extend the lease if it is
reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the assets for
additional terms of three to five years. The Group applies judgement in
evaluating whether it is reasonably certain to exercise the option to renew.
That is, it considers all relevant factors that create an economic incentive
for it to exercise the renewal. After the commencement date, the Group
reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise
(or not to exercise) the option to renew (e.g., a change in business
strategy). The Group included the renewal period as part of the lease term
for leases of plant and machinery due to the significance of these assets to
its operations. These leases have a short non-cancellable period (i.e., three
to five years) and there will be a significant negative effect on production
if a replacement is not readily available. The renewal options for leases of
motor vehicles were not included as part of the lease term because the Group
has a policy of leasing motor vehicles for not more than five years and hence
not exercising any renewal options.
2.23 Revenue recognition
(a) Revenue from contracts with customers
Atalaya is principally engaged in the business of producing copper concentrate
and in some instances, provides freight/shipping services. Revenue from
contracts with customers is recognised when control of the goods or services
is transferred to the customer at an amount that reflects the consideration to
which Atalaya expects to be entitled in exchange for those goods or
services. Atalaya has concluded that it is the principal in its revenue
contracts because it controls the goods or services before transferring them
to the customer.
(b) Copper in concentrate (metal in concentrate) sales
For most copper in concentrate (metal in concentrate) sales, the enforceable
contract is each purchase order, which is an individual, short-term
contract. For the Group's metal in concentrate sales not sold under CIF
Incoterms, the performance obligations are the delivery of the concentrate. A
proportion of the Group's metal in concentrate sales are sold under CIF
Incoterms, whereby the Group is also responsible for providing freight
services. In these situations, the freight services also represent separate
performance obligation (see paragraph (c) below).
The majority of the Group's sales of metal in concentrate allow for price
adjustments based on the market price at the end of the relevant QP stipulated
in the contract. These are referred to as provisional pricing arrangements and
are such that the selling price for metal in concentrate is based on
prevailing spot prices on a specified future date after shipment to the
customer. Adjustments to the sales price occur based on movements in quoted
market prices up to the end of the QP. The period between provisional
invoicing and the end of the QP can be between one and three months.
Revenue is recognised when control passes to the customer, which occurs at a
point in time when the metal in concentrate is physically transferred onto a
vessel, train, conveyor or other delivery mechanism. The revenue is measured
at the amount to which the Group expects to be entitled, being the estimate of
the price expected to be received at the end of the QP, i.e., the forward
price, and a corresponding trade receivable is recognised. For those
arrangements subject to CIF shipping terms, a portion of the transaction price
is allocated to the separate freight services provided (See paragraph (c)
below).
For these provisional pricing arrangements, any future changes that occur over
the QP are included within the provisionally priced trade receivables and are,
therefore, within the scope of IFRS 9 and not within the scope of IFRS 15.
Given the exposure to the commodity price, these provisionally priced trade
receivables will fail the cash flow characteristics test within IFRS 9 and
will be required to be measured at fair value through profit or loss up from
initial recognition and until the date of settlement. These subsequent changes
in fair value are recognised as part of revenue in the statement of profit or
loss and other comprehensive income each period and disclosed separately from
revenue from contracts with customers as part of 'Fair value gains/losses on
provisionally priced trade receivables. Changes in fair value over, and until
the end of, the QP, are estimated by reference to updated forward market
prices for copper as well as taking other relevant fair value considerations
as set out in IFRS 13, into account, including interest rate and credit risk
adjustments.
Final settlement is based on quantities adjusted as required following the
inspection of the product by the customer as well as applicable commodity
prices. IFRS 15 requires that variable consideration should only be recognised
to the extent that it is highly probable that a significant reversal in the
amount of cumulative revenue recognized will not occur. As the adjustments
relating to the final assay results for the quantity and quality of
concentrate sold are not significant, they do not constrain the recognition of
revenue.
(c) Freight services
As noted above, a proportion of the Group's metal in concentrate sales are
sold under CIF Incoterms, whereby the Group is responsible for providing
freight services (as principal) after the date that the Group transfers
control of the metal in concentrate to its customers. The Group, therefore,
has separate performance obligation for freight services which are provided
solely to facilitate sale of the commodities it produces.
The revenue from freight services is a separate performance obligation under
IFRS 15 and therefore is recognised as the service is provided, hence at year
end a portion of revenue must be deferred as well as the insurance costs
associated.
Other Incoterms commonly used by the Group are FOB, where the Group has no
responsibility for freight or insurance once control of the products has
passed at the loading port, Ex works where control of the goods passes when
the product is picked up at seller´s promises, and CIP where control of the
goods passes when the product is delivered to the agreed destination. For
arrangements which have these Incoterms, the only performance obligations are
the provision of the product at the point where control passes.
(d) Sales of services
The Group sells services in relation to maintenance of accounting records,
management, technical, administrative support and other services to other
companies. Revenue is recognised in the accounting period in which the
services are rendered.
Contract assets
A contract asset is the right to consideration in exchange for goods or
services transferred to the customer. If the Group performs by transferring
goods or services to a customer before the customer pays consideration or
before payment is due, a contract asset is recognised for the earned
consideration that is conditional. The Group does not have any contract assets
as performance and a right to consideration occurs within a short period of
time and all rights to consideration are unconditional.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a
customer for which the Group has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration
before the Group transfers goods or services to the customer, a contract
liability is recognised when the payment is made or the payment is due
(whichever is earlier). Contract liabilities are recognised as revenue when
the Group performs under the contract.
From time to time, the Group recognises contract liabilities in relation to
some metal in concentrate sales which are sold under CIF Incoterms, whereby a
portion of the cash may be received from the customer before the freight
services are provided.
2.24 Interest income
Interest income is recognised using the effective interest method. When a loan
and receivable is impaired, the Group and the Company reduce the carrying
amount to its recoverable amount, the estimated future cash flow is discounted
at the original effective interest rate of the instrument and the discount
continues unwinding as interest income. Interest income on impaired loan and
receivables is recognised using the original effective interest rate.
2.25 Dividend income
Dividend income is recognised when the right to receive payment is
established.
2.26 Dividend distribution
Dividend distributions to the Company's shareholders are recognised as a
liability in the Group's financial statements in the period in which the
dividends are approved by the Company's shareholders.
2.27 Earnings per share
Basic earnings per share is calculated by dividing the net profit for the year
by the weighted average number of ordinary shares outstanding during the year.
The basic and diluted earnings per share are the same as there are no
instruments that have a dilutive effect on earnings.
2.28 Comparatives
Where necessary, comparative figures have been adjusted to conform to changes
in presentation in the current year.
2.29 Amendment of financial statements after issue
The consolidated and company financial statements were authorised for issue by
the Board of Directors on 23 March 2022. The Board of Directors and
shareholders has no right to amend the Financial Statements after they are
authorised.
2.30 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 and available‑for‑sale 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 and company 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 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
31 December 2020
Other current financial assets
Financial assets at FV through OCI 86 - 1,101 1,187
Trade and other receivables
Receivables (subject to provisional pricing) - 24,250 - 24,250
Total 86 24,250 1,101 25,437
THE COMPANY
(Euro 000's) Level 1 Level 2 Level 3 Total
31 December 2021
Non-current receivables
Financial assets at FV through profit and loss (note 31.4) - - 176,292 176,292
Other current financial assets
Financial assets at FV through OCI 39 - - 39
Total 39 - 176,292 176,331
31 December 2020
Non-current receivables
Financial assets at FV through profit and loss (note 31.4) - - 243,557 243,557
Other current financial assets
Financial assets at FV through OCI 86 - - 86
Total 86 - 243,557 243,643
3. Financial Risk Management and Critical accounting estimates and judgements
3.1 Financial risk factors
The Group manages its exposure to key financial risks in accordance with its
financial risk management policy. The objective of the policy is to support
the delivery of the Group's financial targets while protecting future
financial security. The main risks that could adversely affect the Group's
financial assets, liabilities or future cash flows are market risks
comprising: commodity price risk, interest rate risk and foreign currency
risk; liquidity risk and credit risk; operational risk, compliance risk and
litigation risk. Management reviews and agrees policies for managing each of
these risks that are summarised below.
The Group's senior management oversees the management of financial risks. The
Group's senior management is supported by the AFRC that advises on financial
risks and the appropriate financial risk governance framework for the Group.
The AFRC provides assurance to the Group's senior management that the Group's
financial risk-taking activities are governed by appropriate policies and
procedures and that financial risks are identified, measured and managed in
accordance with the Group's policies and risk objectives. Currently, the Group
does not apply any form of hedge accounting.
(a) Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and
liabilities does not match. An unmatched position potentially enhances
profitability but can also increase the risk of losses. The Group has
procedures with the object of minimising such losses such as maintaining
sufficient cash to meet liabilities when due. Cash flow forecasting is
performed in the operating entities of the Group and aggregated by Group
finance. Group finance monitors rolling forecasts of the Group's liquidity
requirements to ensure it has sufficient cash to meet operational needs.
The following tables detail the Group's remaining contractual maturity for its
financial liabilities. The tables have been drawn up based on the undiscounted
cash flows of financial liabilities based on the earliest date on which the
Group can be required to pay. The table includes principal cash flows.
THE GROUP
(Euro 000's) Carrying amounts Contractual cash flows Less than Between Between Between
3 months 3 - 12 months 1 - 2 2 - 5 years Over
years 5 years
31 December 2021
Tax liability 336 336 - 336 - - -
Other financial liabilities 47,444 47,444 - 13,394 28,425 5,625 -
Trade and other payables 69,641 53,977 32,593 33,613 - - 3,435
Lease liability 5,510 5,510 - 597 - 2,014 2,899
122,931 107,267 32,593 47,940 28,425 7,639 6,334
31 December 2020
Tax liability 1,310 1,310 - 1,310 - - -
Deferred consideration 53,000 53,000 53,000 - - -
Trade and other payables 69,885 69,885 27,077 41,360 13 1,435 -
Lease liability 6,046 6,046 154 463 619 1,623 3,187
130,241 130,241 80,231 43,133 632 3,058 3,187
THE COMPANY
(Euro 000's) Carrying amounts Contractual cash flows Less than Between Between Between
3 months 3 - 12 months 1 - 2 2 - 5 years Over
years 5 years
31 December 2021
Trade and other payables 2,013 493 - 2,013 - - -
2,013 493 - 2,013 - - -
31 December 2020
Tax liability 473 473 - 473 - - -
Deferred consideration 9,117 9,117 - 9,117 - -
Trade and other payables 12,485 12,485 - 12,485 - - -
22,075 22,075 - 22,075 - - -
(b) Currency risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets
and liabilities are denominated in a currency that is not the Group's
measurement currency. The Group is exposed to foreign exchange risk arising
from various currency exposures primarily with respect to the US Dollar and
the British Pound. The Group's management monitors the exchange rate
fluctuations on a continuous basis and acts accordingly.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible
change in the foreign exchange rate, with all other variables held constant,
of the Group's profit before tax due to changes in the carrying value of
monetary assets and liabilities at reporting date:
Effect on profit before tax for the year ended 31 Dec 2021 increase/(decrease) Effect on profit before tax for the year ended 31 Dec 2020 increase/(decrease)
(Euro 000's)
+5% 15,045 12,867
-5% (15,045) (12,867)
(c) Commodity price risk
Commodity price is the risk that the Group's future earnings will be adversely
impacted by changes in the market prices of commodities, primarily copper.
Management is aware of this impact on its primary revenue stream but knows
that there is little it can do to influence the price earned apart from a
hedging scheme.
Commodity price hedging is governed by the Group´s policy which allows to
limit the exposure to prices. The Group may decide to hedge part of its
production during the year.
Commodity price sensitivity
The table below summarises the impact on profit before tax for changes in
commodity prices on the fair value of derivative financial instruments and
trade receivables (subject to provisional pricing). The impact on equity is
the same as the impact on profit before income tax as these derivative
financial instruments have not been designated as hedges and are classified as
held-for-trading and are therefore fair valued through profit or loss.
The analysis is based on the assumption that the copper prices move $0.05/lb
with all other variables held constant. Reasonably possible movements in
commodity prices were determined based on a review of the last two years'
historical prices.
Effect on profit before tax for the year ended 31 Dec 2021 increase/(decrease) Effect on profit before tax for the year ended 31 Dec 2020 increase/(decrease)
Eur 000's Eur 000's
Increase/(decrease) in copper prices
Increase $0.05/lb (2021: $0.05) 4,920 4,629
Decrease $0.05/lb (2021: $0.05) (4,920) (4,629)
(d) Credit risk
Credit risk arises when a failure by counterparties to discharge their
obligations could reduce the amount of future cash inflows from financial
assets on hand at the reporting date. The Group has no significant
concentration of credit risk. The Group has policies in place to ensure that
sales of products and services are made to customers with an appropriate
credit history and monitors on a continuous basis the ageing profile of its
receivables. The Group has policies to limit the amount of credit exposure to
any financial institution.
Except as detailed in the following table, the carrying amount of financial
assets recorded in the financial statements, which is net of impairment
losses, represents the maximum credit exposure without taking account of the
value of any collateral obtained:
(Euro 000's) 2021 2020
Unrestricted cash and cash equivalent at Group 48,375 24,519
Unrestricted cash and cash equivalent at operating entity 43,722 13,248
Restricted cash and cash equivalents at operating entity 15,420 -
Consolidates cash and cash equivalents 107,517 37,767
Net cash / (debt) position ((1)) 60,073 (15,233)
Working capital surplus / (deficit) 102,430 (17,904)
((1)) Includes bank borrowings and Deferred Consideration at 31 December 2020.
Besides of the above, there are no collaterals held in respect of these
financial instruments and there are no financial assets that are past due or
impaired as at 31 December 2021.
(e) Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates. Borrowings issued at
variable rates expose the Group to cash flow interest rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest rate risk. The
Group's management monitors the interest rate fluctuations on a continuous
basis and acts accordingly.
At the reporting date the interest rate profile of interest‑bearing
financial instruments was:
(Euro 000's) 2021 2020
Variable rate instruments
Financial assets 107,517 37,767
An increase of 100 basis points in interest rates at 31 December 2021 would
have increased / (decreased) equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant. For a decrease of 100 basis points there
would be an equal and opposite impact on the profit and other equity.
Equity Profit or loss
(Euro 000's) 2021 2020 2021 2020
Variable rate instruments 1,075 378 1,075 378
(f) Operational risk
Operational risk is the risk that derives from the deficiencies relating to
the Group's information technology and control systems as well as the risk of
human error and natural disasters. The Group's systems are evaluated,
maintained and upgraded continuously.
(g) Compliance risk
Compliance risk is the risk of financial loss, including fines and other
penalties, which arises from non‑compliance with laws and regulations. The
Group has systems in place to mitigate this risk, including seeking advice
from external legal and regulatory advisors in each jurisdiction.
(h) Litigation risk
Litigation risk is the risk of financial loss, interruption of the Group's
operations or any other undesirable situation that arises from the possibility
of non‑execution or violation of legal contracts and consequentially of
lawsuits. The risk is restricted through the contracts used by the Group to
execute its operations.
3.2 Capital risk management
The Group considers its capital structure to consist of share capital, share
premium and share options reserve. The Group's objectives when managing
capital are to safeguard the Group's ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders
and to maintain an optimal capital structure to reduce the cost of capital.
The Group is not subject to any externally imposed capital requirements.
In order to maintain or adjust the capital structure, the Group issues new
shares. The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising the return to shareholders
through the optimisation of the debt and equity balance. The AFRC reviews the
capital structure on a continuing basis.
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern and to maintain an optimal capital
structure so as to maximise shareholder value. In order to maintain or achieve
an optimal capital structure, the Group may adjust the amount of dividend
payment, return capital to shareholders, issue new shares, buy back issued
shares, obtain new borrowings or sell assets to reduce borrowings.
The Group monitors capital on the basis of the gearing ratio. The gearing
ratio is calculated as net debt divided by total capital. Net debt is
calculated as provisions plus deferred consideration plus trade and other
payables less cash and cash equivalents.
(Euro 000's) 2021 2020
Total liabilities less cash 41,992 117,080
Total equity 440,807 353,690
Total capital 482,799 470,770
Gearing ratio 8.7% 24.9%
((1) )Net debt includes non-current and current liabilities net
of cash and cash equivalent.
3.3 Critical accounting estimates and judgements
The preparation of the financial statements requires 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.
In particular, the Group has identified a number of areas where significant
judgements, estimates and assumptions are required.
(a) Capitalisation of exploration and evaluation costs
Under the Group's accounting policy, exploration and evaluation expenditure is
not capitalised until the point is reached at which there is a high degree of
confidence in the project's viability, and it is considered probable that
future economic benefits will flow to the Group. Subsequent recovery of the
resulting carrying value depends on successful development or sale of the
undeveloped project. If a project proves to be unviable, all irrecoverable
costs associated with the project net of any related impairment provisions are
written off.
(b) Stripping costs
The Group incurs waste removal costs (stripping costs) during the development
and production phases of its surface mining operations. Furthermore, during
the production phase, stripping costs are incurred in the production of
inventory as well as in the creation of future benefits by improving access
and mining flexibility in respect of the orebodies to be mined, the latter
being referred to as a stripping activity asset. Judgement is required to
distinguish between the development and production activities at surface
mining operations.
The Group is required to identify the separately identifiable components or
phases of the orebodies for each of its surface mining operations. Judgement
is required to identify and define these components, and also to determine the
expected volumes (tonnes) of waste to be stripped and ore to be mined in each
of these components. These assessments may vary between mines because the
assessments are undertaken for each individual mine and are based on a
combination of information available in the mine plans, specific
characteristics of the orebody, the milestones relating to major capital
investment decisions and the type and grade of minerals being mined.
Judgement is also required to identify a suitable production measure that can
be applied in the calculation and allocation of production stripping costs
between inventory and the stripping activity asset. The Group considers the
ratio of expected volume of waste to be stripped for an expected volume of ore
to be mined for a specific component of the orebody, compared to the current
period ratio of actual volume of waste to the volume of ore to be the most
suitable measure of production.
These judgements and estimates are used to calculate and allocate the
production stripping costs to inventory and/or the stripping activity
asset(s). Furthermore, judgements and estimates are also used to apply the
units of production method in determining the depreciable lives of the
stripping activity asset(s).
(c) Ore reserve and mineral resource estimates
The Group estimates its ore reserves and mineral resources based on
information compiled by appropriately qualified persons relating to the
geological and technical data on the size, depth, shape and grade of the ore
body and suitable production techniques and recovery rates.
Such an analysis requires complex geological judgements to interpret the data.
The estimation of recoverable reserves is based upon factors such as estimates
of foreign exchange rates, commodity prices, future capital requirements and
production costs, along with geological assumptions and judgements made in
estimating the size and grade of the ore body.
The Group uses qualified persons (as defined by the Canadian Securities
Administrators' National Instrument 43-101) to compile this data. Changes in
the judgments surrounding proven and probable reserves may impact as follows:
· The carrying value of exploration and evaluation assets, mine
properties, property, plant and equipment, and goodwill may be affected due to
changes in estimated future cash flows;
· Depreciation and amortisation charges in the consolidated and
company statements of comprehensive income may change where such charges are
determined using the UOP method, or where the useful life of the related
assets change;
· Capitalised stripping costs recognised in the statement of
financial position as either part of mine properties or inventory or charged
to profit or loss may change due to changes in stripping ratios;
· Provisions for rehabilitation and environmental provisions may
change where reserve estimate changes affect expectations about when such
activities will occur and the associated cost of these activities;
· The recognition and carrying value of deferred income tax assets
may change due to changes in the judgements regarding the existence of such
assets and in estimates of the likely recovery of such assets.
(d) Impairment of assets
Events or changes in circumstances can give rise to significant impairment
charges or impairment reversals in a particular year. The Group assesses each
Cash Generating Unit ("CGU") annually to determine whether any indications of
impairment exist. If it was necessary management could contract independent
expert to value the assets. Where an indicator of impairment exists, a formal
estimate of the recoverable amount is made, which is considered the higher of
the fair value less cost to sell and value-in-use. An impairment loss is
recognised immediately in net earnings. The Group has determined that each
mine location is a CGU.
These assessments require the use of estimates and assumptions such as
commodity prices, discount rates, future capital requirements, exploration
potential and operating performance. Fair value is determined as the price
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Fair
value for mineral assets is generally determined as the present value of
estimated future cash flows arising from the continued use of the asset, which
includes estimates such as the cost of future expansion plans and eventual
disposal, using assumptions that an independent market participant may take
into account. Cash flows are discounted at an appropriate discount rate to
determine the net present value. For the purpose of calculating the impairment
of any asset, management regards an individual mine or works site as a CGU.
Although management has made its best estimate of these factors, it is
possible that changes could occur in the near term that could adversely affect
management's estimate of the net cash flow to be generated from its projects.
(e) Provisions for decommissioning and site restoration costs
Accounting for restoration provisions requires management to make estimates of
the future costs the Group will incur to complete the restoration and
remediation work required to comply with existing laws, regulations and
agreements in place at each mining operation and any environmental and social
principles the Group is in compliance with. The calculation of the present
value of these costs also includes assumptions regarding the timing of
restoration and remediation work, applicable risk-free interest rate for
discounting those future cash outflows, inflation and foreign exchange rates
and assumptions relating to probabilities of alternative estimates of future
cash outflows.
Management uses its judgement and experience to provide for and (in the case
of capitalised decommissioning costs) amortise these estimated costs over the
life of the mine. The ultimate cost of decommissioning and timing is uncertain
and cost estimates can vary in response to many factors including changes to
relevant environmental laws and regulations requirements, the emergence of new
restoration techniques or experience at other mine sites. As a result, there
could be significant adjustments to the provisions established which would
affect future financial results. Refer to Note 26 for further details.
(f) Income tax
Significant judgment is required in determining the provision for income
taxes. There are transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group
and Company recognise liabilities for anticipated tax audit issues based on
estimates of whether additional taxes will be due. Where the final tax outcome
of these matters is different from the amounts that were initially recorded,
such differences will impact the income tax and deferred tax provisions in the
period in which such determination is made.
Judgement is also required to determine whether deferred tax assets are
recognised in the consolidated statements of financial position. Deferred tax
assets, including those arising from unutilised tax losses, require the Group
to assess the probability that the Group will generate sufficient taxable
earnings in future periods, in order to utilise recognised deferred tax
assets.
Assumptions about the generation of future taxable profits depend on
management's estimates of future cash flows. These estimates of future taxable
income are based on forecast cash flows from operations (which are impacted by
production and sales volumes, commodity prices, reserves, operating costs,
closure and rehabilitation costs, capital expenditure, dividends and other
capital management transactions). To the extent that future cash flows and
taxable income differ significantly from estimates, the ability of the Group
to realise the net deferred tax assets could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the
Group operates could limit the ability of the Group to obtain tax deductions
in future periods.
(g) Inventory
Net realisable value tests are performed at each reporting date and represent
the estimated future sales price of the product the entity expects to realise
when the product is processed and sold, less estimated costs to complete
production and bring the product to sale. Where the time value of money is
material, these future prices and costs to complete are discounted.
(h) Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease,
therefore, it uses its incremental borrowing rate (IBR) to measure lease
liabilities. The IBR is the rate of interest that the Group would have to pay
to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a
similar economic environment. The IBR therefore reflects what the Group 'would
have to pay', which requires estimation when no observable rates are available
(such as for subsidiaries that do not enter into financing transactions) or
when they need to be adjusted to reflect the terms and conditions of the lease
(for example, when leases are not in the subsidiary's functional currency).
The Group estimates the IBR using observable inputs (such as market interest
rates) when available and is required to make certain entity-specific
estimates (such as the subsidiary's stand-alone credit rating).
(i) Contingent liabilities
A contingent liability arises where a past event has taken place for which the
outcome will be confirmed only by the occurrence or non-occurrence of one or
more uncertain events outside of the control of the Group, or a present
obligation exists but is not recognised because it is not probable that an
outflow of resources will be required to settle the obligation.
A provision is made when a loss to the Group is likely to crystallise. The
assessment of the existence of a contingency and its likely outcome,
particularly if it is considered that a provision might be necessary, involves
significant judgment taking all relevant factors into account.
(j) Share-based compensation benefits
Share based compensation benefits are accounted for in accordance with the
fair value recognition provisions of IFRS 2 "Share-based Payment". As such,
share-based compensation expense for equity-settled share-based payments is
measured at the grant date based on the fair value of the award and is
recognised as an expense over the vesting period. The fair value of such
share-based awards at the grant date is measured using the Black Scholes
pricing model. The inputs used in the model are based on management's best
estimates for the effects of non-transferability, exercise restrictions,
behavioural considerations and expected volatility. Please refer to Note 23.
(k) Consolidation of Cobre San Rafael
Cobre San Rafael, S.L. is the entity which holds the mining rights of Proyecto
Touro. The Group controls Cobre San Rafael, S.L. as it is exposed to variable
returns from its involvement with the subsidiary and has the ability to affect
those returns through its power over the subsidiary. The control is proven as:
one of the two Directors belongs to the Group and management of the financial
books and the capacity to appoint the key personnel is controlled by Atalaya.
(l) Consolidation of Rio Narcea Nickel
Rio Narcea Nickel S.L. is the entity which holds 17 investigation permits.
This group of 17 permits will be known collectively as Proyecto Ossa Morena
("POM") and are strategically distributed along prospective zones of the Ossa
Morena Metallogenic Belt, and in particular, along the southern flank of the
major Olivenza-Monesterio Antiform ("OMA").
(m) Classification of financial assets
Financial assets are classified, at initial recognition, and subsequently
measured at amortised cost, fair value
through OCI, or fair value through profit or loss.
The Group and Company exercises judgement upon determining the classification
of its financial assets upon considering whether contractual features
including interest rate could significantly affect future cash flows.
Furthermore, judgment is required when assessing whether compensation paid or
received on early termination of lending arrangements results in cash flows
that are not 'solely payments of principal and interest (SPPI).
4. Business and geographical segments
Business segments
The Group has only one distinct business segment, that being mining
operations, which include mineral exploration and development.
Copper concentrates produced by the Group are sold to three offtakers as per
the relevant offtake agreement (Note 31.3)
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.
2021
(Euro 000's) Cyprus Spain Other Total
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/(loss) 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 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
Amortisation of intangible assets - 4,596 - 4,596
Total additions of non-current assets - 41,040 - 41,040
2020
(Euro 000's) Cyprus Spain Other Total
Revenue 30,848 221,936 - 252,784
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation 22,324 45,277 (157) 67,444
Depreciation/amortisation charge (2) (31,681) - (31,683)
Net foreign exchange gain/(loss) (960) (2,870) 4 (3,826)
Impairment of other receivables (49) - - (49)
Finance income - 197 - 197
Finance cost (1) (340) - (341)
Profit/(loss) before tax 21,312 10,583 (153) 31,742
Tax (2,036) 684 - (1,352)
Profit for the year 30,390
Total assets 37,284 466,605 1,157 505,046
Total liabilities (12,271) (142,545) (31) (154,847)
Depreciation of property, plant and equipment 2 25,741 - 25,743
Amortisation of intangible assets - 4,941 - 4,941
Total additions of non-current assets 2 58,650 - 58,652
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) 2021 2020
Segment €'000 Segment €'000
Offtaker 1 Copper 130,642 Copper 50,611
Offtaker 2 Copper 91,651 Copper 67,012
Offtaker 3 Copper 173,904 Copper 119, 491
5. Revenue
THE GROUP
(Euro 000's) 2021 2020
Revenue from contracts with customers ((1)) 399,966 249,438
Fair value gain relating to provisional pricing within sales ((2)) 5,751 3,346
Total revenue 405,717 252,784
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 2021 revenue there is a transaction price
of €2.8 million (€3.0 million in 2020) 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) 2021 2020
Sales of services to related companies (Note 31.3) 1,849 1,442_
Dividends 64,000 -_-
65,849 1,442_
6. Expenses by nature
THE GROUP
(Euro 000's) 2021 2020
Operating costs 150,954 150,253
Rents (Note 27) 5,752 4,509
Care and maintenance expenditure 13,720 369
Exploration expenses 1,800 1,661
Employee benefit expense (Note 7) 23,793 21,194
Compensation of key management personnel 2,335 2,100
Auditors' remuneration - audit 283 229
Other auditors´ services - 19
Other accountants' remuneration 86 111
Consultants' remuneration 921 1,174
Depreciation of property, plant and equipment (Note 13) 27,680 25,744
Amortisation of intangible assets (Note 14) 4,596 4,941
Travel costs 105 140
Share option-based employee benefits 899 816
Shareholders' communication expense 251 178
On-going listing costs 352 235
Legal costs 1,086 689
Public relations and communication development 650 492
Insurances 90 112
Impairment of intangible assets (Note 14) - 985
Impairment loss on other receivables - 49
Other expenses and provisions 3,526 1,069
Total cost of operation, corporate, share based benefits, care and 238,879 217,069
maintenance,
and exploration expenses
THE COMPANY
(Euro 000's) 2021 2020
Key management remuneration 547 656
Auditors' remuneration - audit 146 118
Other auditors´ services - 17
Other accountants' remuneration 42 80
Consultants' remuneration 222 60
Management fees (Note 31.3) 61 55
Travel costs 3 4
Shareholders' communication expense 251 178
On-going listing costs 352 235
Legal costs 667 661
Insurances 91 113
Impairment loss on other receivables - 45
Other expenses and provisions 40 (242)
Total cost of corporate, share based benefits and impairment 2,422 1,980
7. Employee benefit expense
THE GROUP
(Euro 000's) 2021 2020
Wages and salaries 17,652 15,675
Social security and social contributions 5,583 5,054
Employees' other allowances 17 20
Bonus to employees 541 445
23,793 21,194
The average number of employees and the number of employees at year end by
office are:
Average At year end
Number of employees 2021 2020 2021 2020
Spain - Full time 406 482 422 482
Spain - Part time 91 6 81 6
Cyprus - Full time 1 1 1 1
Cyprus - Part time 2 1 2 1
Total 500 490 506 490
THE COMPANY
(Euro 000's) 2021 2020
Wages and salaries - -
Social security and social contributions - -
- -
The average number of employees and the number of employees at year end by
office are:
Average At year end
Number of employees 2021 2020 2021 2020
Cyprus - Full time - - - -
Total - - - -
8. Finance income
THE GROUP
(Euro 000's) 2021 2020
Interest income 57 197
57 197
THE COMPANY
(Euro 000's) 2021 2020
Interest income from interest-bearing intercompany loans at fair value through 1
profit and loss (Note 31.3)
12,854 3,607
Interest income from interest-bearing intercompany loans at amortised cost
(Note 31.3)
2,398 2,516
Interest income - 16
17,271 16,139
Interest income relates to interest received on bank balances.
9. Finance costs
THE GROUP
(Euro 000's) 2021 2020
Interest expense:
Other interest 846 180
Interest expense on lease liabilities 11 17
Other finance expenses (Note 29) 11,737 -
Unwinding of discount on mine rehabilitation provision (Note 26) 1,063 144
13,657 341
Other finance expense is related to the interest calculation proposed by Astor
(Note 29).
10. Tax
THE GROUP
(Euro 000's) 2021 2020
Current income tax charge 24,359 3,582
Deferred tax related to utilization of losses for the year (Note 17) 3,856 777
Deferred tax income relating to the origination of temporary differences (Note (2,986) (3,320)
17)
Deferred tax expense relating to reversal of temporary differences (Note 17) 2,372 313
27,601 1,352
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) 2021 2020
Accounting profit before tax 159,827 31,742
Tax calculated at the applicable tax rates of the Company - 12.5% 19,978 3,968
Tax effect of expenses not deductible for tax purposes 2,743 2,334
Tax effect of tax loss for the year 359 662
Tax effect of allowances and income not subject to tax (2,629) (3,502)
Effect of higher tax rates in other jurisdictions of the group 7,764 897
Tax effect of tax losses brought forward (3,856) (777)
Deferred tax (Note 17) 3,242 (2,230)
Tax charge 27,601 1,352
THE COMPANY
(Euro 000's) 2021 2020
Current income tax charge 862 928
862 928
Tax losses carried forward
As at 31 December 2021, the Group had tax losses carried forward amounting to
€0.3 million from the Spanish subsidiary for the period 2008 to 2015.
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 2021 and 2020 is 25%. The recent 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) 2021 2020
Parent company (1,773) (2,842)
Subsidiaries 135,417 34,321
Profit attributable to equity holders of the parent 133,644 31,479
Weighted number of ordinary shares for the purposes of basic earnings per 138,196 137,359
share ('000)
Basic profit per share (EUR cents/share) 96.7 22.9
Weighted number of ordinary shares for the purposes of diluted earnings per
share ('000)
141,526 140,511
Diluted profit per share (EUR cents/share) 94.4 22.4
At 31 December 2021, there are 3,841,750 options (Note 23) and nil warrants
(Note 22) (At 31 December 2020: 2,787,000 options and nil warrants) which have
been included when calculating the weighted average number of shares for
FY2021.
12. Dividends paid
Cash dividends declared and paid during the year:
(Euro 000's) 31 Dec 2021 31 Dec 2020
Interim dividend for 2021: 47,290 -
Total cash dividends paid in the year to ordinary shareholders 47,290 -
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 will take effect in financial year 2022. The annual
Ordinary Dividend will be paid in two half-yearly instalments and announced in
conjunction with future 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.
Inaugural Dividend
Also on 27 October 2021, the Board of Directors elected to declare an
Inaugural Dividend of US$0.395 per ordinary share, which was equivalent to
£0.294 per share or €0.345 per share.
The record date for the Inaugural Dividend was 5 November 2021 and the shares
became ex-dividend on 4 November 2021.
The Inaugural Dividend was paid on 1 December 2021 in US Dollars, with an
option for shareholders to elect to receive the dividend in Sterling or Euros.
Shareholders were required to communicate their currency election to the
Company by no later than 11 November 2021. The exchange rates for payments in
Sterling and Euros were fixed by Atalaya on 15 November 2021 and subsequently
announced.
13. Property, plant and equipment
(Euro 000's) Right of use assets ((5))
Land and buildings Plant and Assets under construction((3)) _Deferred mining Other assets ((1))
equipment _costs ((2)) Total
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((4)) (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
2020
Cost
At 1 January 2020 46,063 6,421 248,221 16,517 34,013 781 352,016
Additions - 148 2,278 16,863 7,855 20 27,164
Increase in rehab. provision 17,954 - - - - - 17,954
Reclassifications - - 17,552 (17,552) - - -
Advances 17 - - - - - 17
At 31 December 2020 64,034 6,569 268,051 15,828 41,868 801 397,151
Depreciation
At 1 January 2020 8,257 402 28,876 - 6,061 627 44,201
Charge for the year 3,414 554((6)) 19,257 - 2,467 63 25,744
Disposals - - 5 - - 5 10
At 31 December 2020 11,671 956 48,134 - 8,528 688 69,977
Net book value at
31 December 2020 52,363 5,613 219,917 15,828 33,340 113 327,174
( )
((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 2021 amounted to €22.9
million (2020: €15.8 million). It includes the capitalisation of costs
related sustaining capital expenses (€5.9 million) and tailing dams (€14.1
million).
((4) )Transfers related to sustaining Capex (€4.0 million) and the Tailing
Dam Project (€9.4 million).
((5)) See leases in Note 27.
((6)) Depreciation includes an adjustment of previous year amounted to €11k.
The Group
The above fixed assets are mainly located in Spain.
THE COMPANY
(Euro 000's) Other
assets((1)) Total
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 - -
2020
Cost
At 1 January 2020 15 15
At 31 December 2020 15 15
Depreciation
At 1 January 2020 15 15
Charge for the year - -
At 31 December 2020 15 15
Net book value at 31 December 2020 - -
((1) )Includes furniture, fixtures and office equipment which
were depreciated over 5-10 years.
14. Intangible assets
The Group
(Euro 000's) Permits ((1)) Licences, R&D and
Software
Total
2021
Cost
On 1 January 2021 78,210 8,595 86,805
Additions 2,148((3)) - 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
2020
Cost
On 1 January 2020 76,538 7,610 84,148
Additions 1,672((2)) 1,312 2,984
Disposals - (327) (327)
At 31 December 2020 78,210 8,595 86,805
Amortisation
On 1 January 2020 13,808 7,255 21,063
Charge for the year 4,875 66 4,941
Impairment charge (Note 7) - 985 985
At 31 December 2020 18,683 8,306 26,989
Net book value at 31 December 2020 59,527 289 59,816
((1) )Permits include an amount of €5.0 million that relate to
the Proyecto Touro mining rights.
((2) )Addition resulting from the acquisition of Atalaya Masa
Valverde SLU.
((3) )Addition resulting from the acquisition of 51% of Rio
Narcea Nickel SL
The useful life of the intangible assets is estimated to be not less than
fourteen years from the start of production (the revised Reserves and
Resources statement which was announced in July 2016 increased the life of
mine to 16 ½ years). In July 2018, the Company announced an updated technical
report on the mineral resources and reserves of the Proyecto Riotinto. The
Report increased the open pit mineral reserves by 29% and stated the life of
mine as 13.8 years, considering the on-going expansion of the processing
plant.
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 on an annual basis unless indicators of
impairment are not present at the reporting date. Atalaya assessed its assets
concluding that there are no indicators of impairment for either Proyecto
Riotinto or any other as of 31 December 2021.
15. Investment in subsidiaries
(Euro 000's) 2021 2020
The Company
Opening amount at cost minus provision for impairment 5,448 4,630
Increase of investment ((2)) 58,723 818
Closing amount at cost less provision for impairment 64,171 5,448
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 2021((5)) Effective proportion of shares held in 2020((5))
Date of incorporation/ Principal activity Country of incorporation
Subsidiary companies acquisition
Atalaya Touro (UK) Ltd((1)) 10 March 2017 Holding United Kingdom 100% 100%
Atalaya Minasderiotinto Project (UK) Ltd((2)) United Kingdom
10 Sep 2008 Holding 100% 100%
EMED Marketing Ltd 08 Sep 2008 Trading Cyprus 100% 100%
EMED Mining Spain SLU((3)) 12 April 2007 Exploration Spain 100% 100%
Atalaya Financing Ltd((4)) 16 Sep 2020 Financing Cyprus 100% 100%
As security for the obligation on ARM to pay consideration to Astor under the
Master Agreement and the Loan Assignment Agreement, Atalaya Minasderiotinto
Project (UK) Ltd. has granted pledges to Astor Resources AG over the issued
capital of ARM and granted a pledge to Astor over the issued share capital of
Eastern Mediterranean Exploration and Development S.L.U. and the Company has
provided a parent company guarantee (Note 28).
((1)) On 10 March 2017, Atalaya Touro (UK) Limited was incorporated. Atalaya
Mining Plc is its sole shareholder.
((2)) The increase of €58.7 million related to a share capital increase of
Atalaya Minasderiotinto Project (UK) Ltd. amounting to €57.8 million and
share-based payment expense of €0.9 million (2020: €0.8 million).
((3)) In December 2017, EMED Mining Spain S.L.U. increased its capital by
€300k from its sole shareholder. This investment increase was fully impaired
in the year.
((4) )On 16 September 2020 the Group established a new company in Cyprus under
the name of Atalaya Financing, Limited. The activity of the new company is
financing. The audited consolidated financial statements include the results
of the entity since its establishment date.
((5)) The effective proportion of shares held as at 31 December 2021 and 2020
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) 2021 2020
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) 2021 2020 2021 2020
The Group
Deferred tax asset
At 1 January 8,805 6,576 - -
Deferred tax related to utilization of losses for the year (Note
10)
(3,856) (777) 3,856 777
Deferred tax income relating to the origination of temporary differences (Note
10)
2,986 3,320 (2,986) (3,320)
Deferred tax expense relating to reversal of temporary differences (Note 10)
(2,371) (313) 2,371 313
At 31 December 5,564 8,805
Deferred tax income/(expense) (Note 10) 3,241 (2,230)
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 €0.3 million in
Spain.
18. Inventories
(Euro 000's) 2021 2020
The Group
Finished products 5,185 8,642
Materials and supplies 18,216 13,764
Work in progress 1,380 1,170
24,781 23,576
As at 31 December 2021, copper concentrate produced and not sold amounted to
5,254 tonnes (FY2020: 12,180 tonnes). Accordingly, the inventory for copper
concentrate was €5.2 million (FY2020: €8.6 million). During the year 2021
the Group recorded cost of sales amounting to €192.1 million (FY2020:
€175.5 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) 2021 2020
The Group
Non-current trade and other receivables
Deposits 303 48
Loans 2,332 2,667
Other non-current receivables 2,695 -
5,330 2,715
Current trade and other receivables
Trade receivables at fair value - subject to provisional pricing 8,865 20,304
Trade receivables from shareholders at fair value - subject to provisional
pricing (Note 31.5)
20,283 3,946
Other receivables from related parties at amortised cost (Note 31.3) 56 56
Deposits 21 21
VAT receivable 17,300 15,826
Tax advances - 9
Prepayments 3,303 2,507
Other current assets 300 522
50,128 43,191
Allowance for expected credit losses - -
Total trade and other receivables 55,458 45,906
(Euro 000's) 2021 2020
The Company
Non-current trade and other receivables
Receivables from own subsidiaries at amortised cost (Note 31.4) 69,452 75,300
Receivables from own subsidiaries at fair value through profit and loss (Note
31.4)
176,292 243,557
245,744 318,857
Current trade and other receivables
Tax advances CIT 279 -
Receivables from own subsidiaries at amortised cost (Note 31.4) 2,084 10,737
Other receivables 52 -
Total current trade and other receivables 2,415 10,737
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 2020: €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%.
20. Other Financial assets
The Group
(Euro 000's) 2021 2020
Financial asset at fair value through OCI (see (a)) below) 1,140 1,187
Total current 39 86
Total non-current 1,101 1,101
THE COMPANY
(Euro 000's) 2021 2020
Financial asset at fair value through OCI (see (a)) below) 39 86
Total current 39 86
a) Financial assets at fair value through OCI
The Group
(Euro 000's) 2021 2020
At 1 January ((1)) 1,187 1,143
Fair value change recorded in equity (Note 23) (47) 44
At 31 December 1,140 1,187
THE COMPANY
(Euro 000's) 2021 2020
At 1 January ((1)) 86 42
Fair value change recorded in equity (Note 23) (47) 44
At 31 December 39 86
Country of incorporation Effective proportion of shares
Company name Principal activities held at 31 December 2021
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 of
available-for-sale investments in Other Comprehensive Income ('OCI'), as
explained in Note 2.12.
21. Cash and cash equivalents
The Group
(Euro 000's) 31 December 2021 31 December 2020
Unrestricted cash and cash equivalents at Group level 48,375 24,519
Unrestricted cash and cash equivalents at Operation level 43,722 13,248
Restricted cash and cash equivalents at Operation level 15,420 -
Consolidated cash and cash equivalents 107,517 37,767
As at 31 December 2021, the Group's operating subsidiary held restricted cash
of €15.4 million related to the amount that the Company transferred to a
trust account representing the full amount of interest claimed by Astor to 30
June 2022, as detailed in the note on Deferred Consideration.
Cash and cash equivalents denominated in the following currencies:
(Euro 000's) 2021 2020
Euro - functional and presentation currency 30,145 2,431
Great Britain Pound 36 2,019
United States Dollar 77,336 33,317
107,517 37,767
The Company
(Euro 000's) 2021 2020
Cash at bank and on hand 37,270 2,049
Cash and cash equivalents denominated in the following currencies:
Euro - functional and presentation currency 22 62
Great Britain Pound 36 1,985
United States Dollar 37,212 2
37,270 2,049
22. Share capital
Nr. Share Share
Authorised of Shares capital Premium Total
'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 2020 137,340 13,372 314,319 327,691
Issue Date Price (£) Details
22 Dec 2020 2.015 Exercised share options ((e)) 228 19 491 510
22 Dec 2020 1.475 Exercised share options ((e)) 41 3 65 68
22 Dec 2020 1.440 Exercised share options ((e)) 499 42 758 800
22 Dec 2020 2.302 Bonus share to former Key management 33 3 81 84
3 31 December 2020/1 January 2021 138,141 13,439 315,714 329,153
12 Feb 2021 2.015 Exercised share options((a)) 41 4 91 95
18 May 2021 2.015 Exercised share options((b)) 20 1 45 46
18 May 2021 1.475 Exercised share options((b)) 10 1 15 16
15 Dec 2021 1.475 Exercised share options((c)) 9 2 43 45
15 Dec 2021 2.015 Exercised share options((c)) 15 - 8 8
31 December 2021 138,236 13,447 315,916 329,363
Authorised capital
The Company's authorised share capital is 200,000,000 ordinary shares of
£0.075 each.
Issued capital
FY2021
(a) 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.
(b) 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.
(c) 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.
FY2020
a) On 22 December 2020, the Company was notified that certain
employees exercised options over 768,250 ordinary shares of £0.075 at a price
between £1.44 to £2.015, thus creating a share premium of €1,314k.
b) On 22 December 2020, the Company granted a bonus share to a
former Key management of 33,333 ordinary shares of £0.075 at a price £2.302.
23. Other reserves
THE GROUP
Share option Bonus share Total
(Euro 000's) Fair value reserve of financial assets at FVOCI ((2))
Non-distributable reserve ((3)) Distributable reserve((4))
Depletion factor ((1))
At 1 January 2020
7,371 208 10,878 (1,144) 3,430 2,093 22,836
Recognition of depletion factor
- - 14,155 - - - 14,155
Recognition of non-distributable reserve
- - - - 2,198 - 2,198
Recognition of distributable reserve
- - - - - - -
Recognition of share based payments
816 - - - - - 816
Change in fair value of financial assets at fair value through OCI (Note 20)
- - - 44 - - 44
Other changes in reserves - - - - - - -
At 31 December 2020 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
the Company
Share option Bonus share Fair value reserve of financial assets at FVOCI ((2)) Total
(Euro 000's)
At 1 January 2020 7,371 208 (1,144) 6,435
Adjustment for initial application of IFRS 9 - - - -
Recognition of share based payments 816 - - 816
Change in fair value of financial assets at fair value through OCI (Note 20)
- - 44 44
At 31 December 2020 8,187 208 (1,100) 7,295
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
((1) )Depletion factor reserve
During the twelve month period ended 31 December 2021, the Group has disposed
€6.1 million (FY2020: €14.2 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.
Details of share options outstanding as at 31 December 2021:
Grant date Expiry date Exercise price £ Share options
23 Feb 2017 22 Feb 2022 1.440 314,000
29 May 2019 28-May-2024 2.015 988,250
8 July 2019 7 July 2024 2.045 400,000
30 June 2020 29 June 2030 1.475 989,500
24 June 2021 23 June 2031 3.090 1,150,000
Total 3,841,750
Weighted average Share options
exercise price £
At 1 January 2021 1.759 2,787,000
Granted options during the year 3.090 1,150,000
Options executed during the year 1.907 (95,250)
31 December 2021 2.154 3,841,750
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.
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.
On 25 June 2021, the Company announced a grant of 1,150,000 share options (the
"Options") to Person Discharging Managerial Responsibilities ("PDMRs") and key
management in accordance to the Company's approved Share Option Plan 2020 (the
"Option Plan"). The Options expire ten years from the date of grant (23 June
2031), have an exercise price of 309.0 pence per ordinary share, based on the
minimum share price in the five days preceding the grant date, and vest in two
equal tranches, half on grant and half on the first anniversary of the
granting date.
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.
On 30 June 2020, the Company announced a grant of 1,050,000 share options (the
"Options") to Person Discharging Managerial Responsibilities ("PDMRs") and key
management in accordance to the Company's approved Share Option Plan 2020 (the
"Option Plan"). The Options expire ten years from the date of grant (30 June
2031), have an exercise price of 147.5 pence per ordinary share, based on the
minimum share price in the five days preceding the grant date, and vest in two
equal tranches, half on grant and half on the first anniversary of the
granting date.
On 22 December 2020, the Company was notified that certain employees exercised
options over 768,250 ordinary shares of £0.075 at a price between £1.44 to
£2.015 (Note 21 (b)).
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
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) 2021 2020
Opening balance (3,491) (2,402)
Share of total comprehensive income for the year (1,418) (1,089)
Closing balance (4,909) (3,491)
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 2021 is as follows:
(Euro 000's) 2021 2020
Non-current assets 5,155 5,111
Current assets 315 706
Non-current liabilities - -
Current liabilities 9,481 9,697
Equity (5,299) (3,879)
Revenue - -
Loss for the year and total comprehensive income (1,420) (1,210)
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.
The Group has a 51% interest in Río Narcea Nickel, S.L. acquired in December
2021 while the remaining 49% 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 2021 is as follows:
(Euro 000's) 2021 2020
Non-current assets 1 -
Current assets 78 -
Non-current liabilities - -
Current liabilities 16 -
Equity 64 -
Revenue - -
Loss for the year and total comprehensive income (287) -
25. Trade and other payables
THE GROUP
(Euro 000's) 2021 2020
Non-current trade and other payables
Other non-current payables 3,435 1,435
Government grant 15 13
3,450 1,448
Current trade and other payables
Trade payables 49,712 63,946
Accruals 16,267 4,355
VAT payable 74 60
Other 138 76
66,191 68,437
THE COMPANY
(Euro 000's) 2021 2020
Current trade and other payables
Suppliers 47 753
Accruals 1,257 809
Payable to own subsidiaries (Note 31.4) 634 11,380
VAT payable 74 60
2,012 13,002
Other non-current payables are related with the acquisition of Atalaya Masa
Valverde formerly Cambridge Minería España, SL and Rio Narcea Nickel, SL
(see Note 31).
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.
Accruals included an interest payable amounted to €11.7 million for the
Group representing the interest calculation proposed by Astor (Note 29).
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
THE GROUP
(Euro 000's)
Legal Rehabilitation Total
1 January 2020 388 6,553 6,941
Additions 311 - 311
(Reduction) / addition of provision (73) 17,941 17,868
Finance cost (Note 9) - 144 144
31 December 2020/1 January 2021 626 24,638 25,264
Additions 26 655 741
Used of provision (286) (57) (403)
Reversal of provision (87) - (87)
Finance cost (Note 9) - 1,063 1,063
31 December 2021 279 26,299 26,578
(Euro 000's) 2021 2020
Non-Current 26,578 25,264
Current - -
Total 26,578 25,264
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 2021 was 1.12% (2020: 1.36%), which is the average
of the 15-year Spain Government Bond rate from 2017 to 2021. An inflation rate
of 1%-1.96% is applied on annual basis.
In July 2018, the Company announced an updated technical report on the mineral
resources and reserves of the Proyecto Riotinto. The Report increased the open
pit mineral reserves by 29% and stated the life of mine as 13.8 years,
considering the on-going expansion of the processing plant.
The expected payments for the rehabilitation work are as follows:
(Euro 000 's) Between Between Between
1 - 5 Years 6 - 10 Years 10 - 20 Years
Expected payments for rehabilitation of the mining site, discounted 5,128 3,637 17,534
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 2021. Management has
reviewed individually each case and made a provision of €279k (€626k in
2020) for these claims, which has been reflected in these consolidated
financial statements. (Note 31)
27. Leases
(Euro 000's) 31 Dec 2021 31 Dec 2020
Non-current
Leases 4,913 4,796
4,913 4,796
Current
Leases 597 592
597 592
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 2021 5,416 29 168 5,613 5,388
Additions 507 - - 507 729
Depreciation expense (506) (15) (69) (590) -
Interest expense - - - - 11
Payments - - - - (618)
As at 31 December 2021 5,417 14 99 5,530 5,510
The amounts recognised in profit or loss, are set out below:
Twelve month ended Twelve month ended
31 Dec 31 Dec
2021 2020
(Euro 000's)
As at 31 December
Depreciation expense of right-of-use assets (590) (553)
Interest expense on lease liabilities (11) (17)
Total amounts recognised in profit or loss (601) (570)
The Group recognised rent expense from short-term leases (Note 6).
Depreciation expense regarding leases amounts to €0.6 million (2020: €0.5)
for the twelve month period ended 31 December 2021.
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 2021, the remaining term of this lease is twelve
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 2021, the remaining
term of this motor vehicle and laboratory equipment lease is two years and two
and half years respectively.
(Euro 000's) 31 Dec 2021 31 Dec 2020
Minimum lease payments due:
- Within one year 597 592
- Two to five years 2,014 2,068
- Over five years 2,899 2,728
Less future finance charges - -
Present value of minimum lease payments due 5,510 5,388
Present value of minimum lease payments due:
- Within one year 597 592
- Two to five years 2,014 2,068
- Over five years 2,899 2,728
5,510 5,388
(Euro 000's) Lease liability
Balance 1 January 2021 5,388
Additions 729
Interest expense 11
Lease payments (618)
Balance at 31 Dec 2021 5,510
Balance at 31 Dec 2021
- Non-current liabilities 4,913
- Current liabilities 597
5,510
28. Borrowings
(Euro 000's) 31 Dec 2021 31 Dec 2020
Non-current borrowings
Credit facilities 34,050 -
34,050 -
Current borrowings
Credit facilities 13,394 -
13,394 -
The Group had uncommitted credit facilities totalling €111.0 million. During
Q1 2021, Atalaya drew down some of its existing credit facilities to pay the
Deferred Consideration (Note 29). Interest rates of existing credit
facilities, including facilities used to pay the Deferred Consideration, range
from 1.60% to 2.45% and the average interest rate on all facilities used and
unused is 1.75%. The maximum term of the facilities is three years. As of 31
December 2021, the Company had used €47.4m in existing credit facilities. At
as 31 December 2021 the Group had undrawn credit facilities of €63.6m.
29. Deferred Consideration
In September 2008, the Group moved to 100% ownership of Atalaya Riotinto
Mineral S.L. ("ARM") (and thus full ownership of Proyecto Riotinto) by
acquiring the remaining 49% of the issued capital of ARM. At the time of the
acquisition, the Group signed a Master Agreement (the "Master Agreement") with
Astor Management AG ("Astor") which included a deferred consideration of
€43.9 million (the "Deferred Consideration") payable as consideration in
respect of the acquisition among other items. The Company also entered into a
credit assignment agreement at the same time with a related company of Astor,
Shorthorn AG, pursuant to which the benefit of outstanding loans was assigned
to the Company in consideration for the payment of €9.1 million to Shorthorn
(the "Loan Assignment").
The Master Agreement has been the subject of litigation in the High Court and
the Court of Appeal that concluded in November 2018. As a consequence, ARM
was obliged to apply any excess cash (after payment of operating expenses,
sustaining capital expenditure, any senior debt service requirements and up to
US$10 million per annum (for non-Proyecto Riotinto related expenses)) to pay
the consideration due to Astor (including the Deferred Consideration and the
amount of €9.1 million payable under the Loan Assignment). "Excess cash" is
not defined in the Master Agreement leaving ambiguity as to how it was to be
calculated.
On 2 March 2020, the Company filed an application in the High Court to seek
clarity on the definition of "Excess Cash". The Company and Astor exchanged
statements of case to set out their formal position. The trial was listed to
be heard from 21 February 2022 (the "Trial"). Following the filing of the
statements of case for the Trial, Astor applied to Court seeking an early
determination (without the need for a full trial) of the dispute in relation
to the "Excess Cash" (the "Summary Judgment application"). The Summary
Judgment application was heard on 14-15 June 2021. The Court dismissed Astor's
application meaning the proceedings would continue to Trial.
As previously announced, during December 2020 the Board had discussions and
considered an early payment of the Deferred Consideration and the Loan
Assignment provided certain conditions could be met. Conditions included among
others the execution of credit facilities agreements to fund the payment.
In March 2021, the Company fulfilled all conditions required by the Board and
made the early payment of €53 million to Astor. The payment was fully funded
by unsecured credit facilities.
The payment of the Deferred Consideration did not end the ongoing litigation
as the issue as to whether any residual interest may or may not be payable
remained unresolved. On 15 July 2021, the Company transferred €15.4 million
to the Company's solicitors representing the full amount of interest claimed
by Astor (as at that date) covering the period up to 30 June 2022. The
Company's solicitors provided an undertaking to Astor's solicitors to hold the
full amount until settlement of the claim to interest or judgment following
the Trial. The Company understands the monies held on client account by the
Company's solicitors safeguard the maximum outstanding liability to Astor in
relation to the Master Agreement. On that basis, and because the Consideration
has been paid in full in accordance with the Master Agreement, the Company
treats itself as free of the obligations set out at clauses 6(g)(iv)(A) and
6(g)(iv)(B) in the Master Agreement.
On 21 March 2022, further to the Trial which took place between 21 February
and 1 March 2022, Judgment was handed down. The Judgment deals with matters of
principle. The points that the Judge has decided will dictate the amount of
interest that is payable.
On the basis of the principles set out in the Judgment, the parties are in the
process of determining the correct interest calculation. It is clear that an
amount will be payable in respect of interest. A consequential hearing is
due to be listed on the earliest convenient date after 28 March 2022. The
Company has agreed to pay Astor's costs of the proceedings.
As at 31 December 2021, the Group had accrued interest amounting to €11.7
million, representing the interest calculation proposed by Astor (Note 25).
Atalaya is currently working to calculate the correct interest figure with a
view to agreeing the amount with Astor in accordance with the Judgment.
Atalaya expects the interest due to Astor following the Judgment to be in the
range of approximately €10 million to €11.7 million.
Both parties have a right to appeal the Judgment if granted leave to do so.
30. Acquisition, incorporation and disposals of subsidiaries
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.
2020
Acquisition and incorporation of subsidiaries
On 16 September 2020 the Group established a new company in Cyprus under the
name of Atalaya Financing, Limited. The activity of the new company is
financing.
On 15 October 2020, the Company acquired 100% of the voting shares of
Cambridge Minería España, SL, a company located in Huelva (Spain) that holds
exploration permits for Masa Valverde polymetallic project located in Huelva
(Spain) for €1.4 million payable in two instalments.
Disposals of subsidiaries
There were no disposals of subsidiaries during the year.
Wind-up of subsidiaries
There were no operations wound-up during FY2021 and FY2020.
31. Group information and related party disclosures
31.1 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%
EMED Mining Spain S.L.U. Atalaya Mining Plc Exploration Spain 100%
Atalaya Riotinto Minera S.L.U. Atalaya MinasdeRiotinto Project (UK) Limited Production Spain 100%
Eastern Mediterranean Exploration and Development S.L.U. Atalaya MinasdeRiotinto Project (UK) Limited Exploration Spain 100%
Cobre San Rafael, S.L. ((1)) Atalaya Touro (UK) Limited Exploration Spain 10%
Recursos Cuenca Minera S.L.U. Atalaya Riotinto Minera SLU Exploration Spain J-V
Fundacion Atalaya Riotinto Atalaya Riotinto Minera SLU Trust Spain 100%
Atalaya Servicios Mineros, S.L.U. Atalaya MinasdeRiotinto Project (UK) Limited Dormant Spain 100%
Atalaya Masa Valverde S.L.U. ((2)) Atalaya Servicios Mineros, S.L.U. Exploration Spain 100%
Rio Narcea Nickel, S.L. Atalaya Servicios Mineros, S.L.U. Exploration Spain 51%
((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.
The following transactions were carried out with related parties:
31.2 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) 2021 2020 2021 2020
Directors' remuneration and fees 1,019 1,044 547 572
Director's bonus ((1)) 438 305 - -
Share option-based benefits to Directors 321 291 - -
Key management personnel remuneration ((2)) 522 522 - -
Key management bonus ((1)) 265 182 - -
Key management share bonus ((3)) - 84 - -
Share option-based and other benefits to key management personnel ((4))
327 374 - -
2,892 2,802 547 572
( )
((1)) These amounts related to the approved performance bonus for 2020 by the
Board of Directors following the proposal of the CGNC Committee. The 2021
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 2021 performance.
((2)) Includes wages and salaries of key management personnel of €505k
(2020: €506k) and other benefits of €17k (2020: €16k).
((3)) In December 2020, a former key management employee was granted with
33,333 shares.
((4)) In 2020 includes share option of a former key management employee.
At 31 December 2021 amounts due to Directors, as from the Group, are €nil
(€nil at 31 December 2020) and €nil (€nil at 31 December 2020) to key
management.
At 31 December 2021 amounts due to Directors, as from the Company, are €nil
(€nil at 31 December 2020) and €nil (€nil at 31 December 2020) to key
management.
Share-based benefits
In 2021, 1,150,000 options were granted at a price of 309.0 pence, of which
800,000 were granted to Directors and key management personnel (2020:
1,050,000 options) (see note 23).
During 2021 the Directors and key management personnel have not been granted
any bonus shares (2020: nil).
31.3 Transactions with shareholders and related parties
THE GROUP
(Euro 000's) 2021 2020
Trafigura - Revenue from contracts 125,912 49,775
Freight services - -
125,912 49,775
Gains relating provisional pricing within sales 4,730 837
Trafigura - Total revenue from contracts 130,642 50,612
130,642 50,612
THE COMPANY
(Euro 000's) 2021 2020
Sales of services (Note 5):
· EMED Marketing Limited 978 749
· Atalaya MinasdeRiotinto Project (UK) Limited 871 693
1,849 1,442
Purchase of services (Note 6):
· Atalaya Riotinto Minera SLU (61) (55)
Other services (Note 6)
· Atalaya Riotinto Minera 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 941 970
· Participative loan - at fair value through profit and loss 12,854 13,607
· Credit facility - at amortised cost 1,457 1,546
15,252 16,123
THE GROUP
(Euro 000's) 2021 2020
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.
((1) )This balance representing the interest calculation for the Company
proposed by Astor (Note 29).
31.4 Year-end balances with related parties
THE COMPANY
(Euro 000's) 2021 2020
Non-current assets - Loan from related parties at FV through profit and loss
(Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited - Participative Loan ((1)) 173,930 243,545
Atalaya MinasdeRiotinto Project (UK) Limited - Eastern Loan ((5)) 12 12
Atalaya Masa Valverde SL - Participative Loan ((6)) 1,850 -
Río Narcea Nickel SL - Participative Loan ((6)) 500 -
Total 176,292 243,557
Non-current assets - Loans and receivables from related parties at amortised
cost (Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited - Credit Expansion Loan ((2)) 41,535 45,138
Atalaya MinasdeRiotinto Project (UK) Limited - Credit Agreement ((3)) 26,354 27,412
EMED Marketing Limited ((4)) 1,164 892
Atalaya MinasdeRiotinto Project (UK) Limited ((4)) 399 1,858
Total 69,452 75,300
Current assets - Loans and receivables from related parties at amortised cost
(Note 19):
Atalaya Riotinto Minera SLU ((4)) 208 9,117
EMED Marketing Limited ((4)) 208 -
Atalaya Touro (UK) Limited ((4)) 1,634 1,618
Atalaya Financing Ltd 34 2
Total 2,084 10,737
176,292
243,557
Non-current assets - Loans and receivables from related parties at amortised
cost (Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited - Credit Expansion Loan ((2))
41,535
45,138
Atalaya MinasdeRiotinto Project (UK) Limited - Credit Agreement ((3))
26,354
27,412
EMED Marketing Limited ((4))
1,164
892
Atalaya MinasdeRiotinto Project (UK) Limited ((4))
399
1,858
Total
69,452
75,300
Current assets - Loans and receivables from related parties at amortised cost
(Note 19):
Atalaya Riotinto Minera SLU ((4))
208
9,117
EMED Marketing Limited ((4))
208
-
Atalaya Touro (UK) Limited ((4))
1,634
1,618
Atalaya Financing Ltd
34
2
Total
2,084
10,737
((1) )This balance bears interest of 6.75% (2020: 6.75%).
((2) )This balance bears interest of EURIBOR 6month plus 4%
(2020: LIBOR 6month + 4.00%).
((3) )This balance bears interest of EURIBOR 12month plus 4%
(2020: 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% (2020: 3.00%).
((6) )This balance bears no interest.
THE COMPANY
(Euro 000's) 2021 2020
Payable to related party (Note 25):
EMED Marketing Limited - 10,808
EMED Mining Spain S.L. 262 262
Atalaya Riotinto Minera S.L.U. 372 310
634 11,380
The above balances bear no interest and are repayable on demand.
31.5 Year-end balances with shareholders
(Euro 000's) 2021 2020
Receivable from shareholders (Note 19):
Trafigura - Debtor balance -subject to provisional pricing 20,283 3,946
20,283 3,946
The above debtor balance arising from the pre-commissioning sales of goods
bear no interest and is repayable on demand.
32. 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.
33. 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.
34. Significant events
On 10 February 2021, the Company announced that its Board of Directors had
appointed Mr. Neil Gregson as an independent Non-Executive Director of the
Company.
On 12 February 2021, the Company was notified that certain employees exercised
options over 40,750 ordinary shares of £0.075.
On 1 March 2021, Atalaya received the formal communication from Xunta de
Galicia of the negative Environmental Impact Declaration on Proyecto Touro.
On 15 March 2021, Atalaya announced that it has made the payment of the €53
million (the "Deferred Consideration") to Astor Management following the
approval of its Board of Directors. This amount arises from arrangements
entered with Astor in 2008 in relation to Proyecto Riotinto. The payment was
financed with unsecured credit lines by four major Spanish banks having a
three-year tenure and an average annual interest rate of approximately two per
cent.
On 25 March 2021, the Company announced that Dr. José Nicolas Sierra retired
as Independent Non-Executive Director and as Chair of the Physical Risk
Committee of Atalaya, with an effective date of 31 March 2021. From this date
Mr. Neil Gregson is the Chair of the Physical Risk Committee of Atalaya.
On 12 April 2021, the Company announced that Mr. Damon Barber stepped down as
a Non-Executive Director of the Company with immediate effect.
On 17 May 2021, the Company was notified that Harry Liu, Director of the
Company, sold 5,000 ordinary shares in Atalaya at an average price of 356.0
pence per share.
On 18 May 2021, the Company was notified that Harry Liu, Director of the
Company, sold 3,698 ordinary shares in Atalaya at an average price of 358.0
pence per share.
On 26 May 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the
Company, reduced its share of voting rights from 14.17% to 12.97%.
On 25 June 2021, the Company announced that in accordance with the Company's
Long Term Inventive Plan 2020, which was approved by shareholders at the
Annual General Meeting on 25 June 2020, it had granted 1,150,000 share options
to Persons Discharging Managerial Responsibilities and other management.
The Options expire ten years from the deemed date of grant (24 June 2021),
have an exercise price of 309.0 pence per ordinary share, based on the average
of the mid-market closing prices for the five dealing days immediately
preceding the grant date, and vest in two equal tranches, half on grant and
half on the first anniversary of the granting date.
On 29 June 2021, the Company was notified that Harry Liu, Director of the
Company, sold 5,000 ordinary shares in Atalaya at an average price of 310.0
pence per share. On 1 July 2021 the Company announced that it was notified
that Harry Liu, Director of the Company, sold 192 ordinary shares in Atalaya
at an average price of 308.0 pence per share.
On 5 July 2021, the Company announced that it was notified, that Alberto
Lavandeira, Chief Executive Officer and Managing Director of the Company,
purchased 40,000 ordinary shares at an average price of 310.0 pence per share.
The Company was also notified on 3 July 2021, that Harry Liu, Director of the
Company, sold, on 1 July 2021, 170 ordinary shares in Atalaya at an average
price of 309.0 pence per share.
Following the above transactions Mr. Lavandeira and Mr. Liu are interested in
an aggregate of 280,000 and 386,019 ordinary shares of the Company
representing 0.20% and 0.28% of the current issued share capital,
respectively.
On 13 August 2021, the Company was notified that Harry Liu, Director of the
Company, sold 11,000 ordinary shares in Atalaya at an average price of 324.0
pence per share.
On 4 August 2021, Liberty Metals & Mining Holdings, LLC, shareholder of
the Company, reduced its share of voting rights from 11.79% to 10.94%. On 18
August 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the
Company, reduced its share of voting rights to nil.
On 20 August 2021, Polar Capital LLP notified the Company that it held 5.08%
of voting rights.
On 6 October 2021, the Company announced that the recent drilling campaign has
intersected broad intervals of massive and stockwork type polymetallic
sulphide mineralization including significant high-grade intercepts at both
Masa Valverde and Majadales.
Dividends
The Board of Directors declared an Inaugural Dividend of US$0.395 per ordinary
share, which was equivalent to approximately 29 pence per share, and amounted
to €47.3 million.
The interim dividend was paid on 1 December 2021
Further details are given in Note 12.
35. Events after the reporting period
Depending on the duration of the COVID-19 pandemic and any related negative
impact on economic activity, the Group may experience negative results,
liquidity restraints or incur impairments on its assets in 2022. The exact
impact on the Group's activities in 2022 thereafter cannot be predicted. In
the period since 31 December 2021 the Group has not incurred losses due to
impairments. Refer to note 19.
Τhe recent events in Ukraine from 24 February 2022 may have consequences for
the Global Economy, which cannot yet be predicted, but the main concern at the
moment 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 event is considered as a non-adjusting event and is therefore
not reflected in the recognition and measurement of the assets and liabilities
in the financial statements as at 31 December 2021.
On 4 January 2022, the subsidiary EMED Mining Spain, S.L. was disposed.
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.
On 26 January 2022, the Company announced that it was notified that PDMRs
executed options as follow:
· Alberto Lavandeira, Chief Executive Officer and Managing Director
of the Company executed 150,000 options. Following the above transactions Mr.
Lavandeira is interested in an aggregate of 430,000 ordinary shares of the
Company representing 0.30% of the current issued share capital.
· Enrique Delgado, General Manager of Proyecto Riotinto, executed
550,000 options. Following the above transactions Mr. Delgado is interested in
an aggregate of 550,000 ordinary shares of the Company representing 0.39% of
the current issued share capital.
· César Sánchez, Chief Financial Officer, executed 650,000 options.
Following the above transactions Mr. Sánchez is interested in an aggregate of
650,000 ordinary shares of the Company representing 0.46% of the current
issued share capital.
On 22 February, the Company was notified that César Sánchez and Enrique
Delgado, both persons discharging managerial responsibilities ("PDMR"), had
sold 300,000 and 250,000 ordinary shares in Atalaya, respectively, at a price
of 440.0 pence per share. Following the sale of these shares Mr. Sanchez is
interested in an aggregate of 350,000 ordinary shares of the Company
representing 0.250% of the current issued share capital. Mr. Delgado is
interested in an aggregate of 300,000 ordinary shares of Atalaya representing
0.215% of the current issued share capital.
On 27 January 2022, the Company announced that in accordance with the
Company's Long Term Inventive Plan 2020, which was approved by shareholders at
the Annual General Meeting on 25 June 2020, it had granted 120,000 share
options to an employee.
On 3 February 2022, Atalaya announced the results of five additional drill
holes from its ongoing resource definition drilling programme at Proyecto Masa
Valverde ("PMV").
On 21 March 2022, further to the Trial which took place between 21 February
and 1 March 2022, the Judgment was handed down. The Judgment deals with
matters of principle. The points that the Judge has decided will dictate the
amount of interest that is payable.
On the basis of the principles set out in the Judgment, the parties are in the
process of determining the correct interest calculation. It is clear that an
amount will be payable in respect of interest. A consequential hearing is
due to be listed on the earliest convenient date after 28 March 2022. The
Company has agreed to pay Astor's costs of the proceedings.
As at 31 December 2021, the Group had accrued interest amounting to €11.7
million, representing the interest calculation proposed by Astor. Atalaya is
currently working to calculate the correct interest figure with a view to
agreeing the amount with Astor in accordance with the Judgment. Atalaya
expects the interest due to Astor following the Judgment to be in the range of
approximately €10 million to €11.7 million.
Both parties have a right to appeal the Judgment if granted leave to do so.
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