REG - Atalaya Mining PLC - Increase in Mineral Resources at Masa Valverde
05/04/2022 07:00
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RNS Number : 2083H Atalaya Mining PLC 05 April 2022
A version of this announcement containing all referenced figures can be found
on
the Company's website at www.atalayamining.com (http://www.atalayamining.com)
(the "Website Announcement").
5 April 2022
Atalaya Mining Plc.
("Atalaya" or "the Company")
Atalaya Announces Significant Increase in Mineral Resources at Proyecto Masa
Valverde
Mineral Resource Estimate to support planned economic study on its potential
development
as a satellite deposit that could deliver higher grade material to Proyecto
Riotinto
Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce a new Mineral
Resource Estimate, prepared in accordance with CIM guidelines and disclosure
requirements of NI 43-101, for its 100% owned Proyecto Masa Valverde
("PMV"). PMV is located in the Iberian Pyrite Belt of southern Spain
approximately 28 km to the south of Atalaya's 15 Mtpa processing plant at
Proyecto Riotinto. PMV consists of two deposits, Masa Valverde and Majadales,
which are 1 km apart. Majadales was initially discovered by Atalaya's
exploration team in 2019.
Highlights
· Significant increase in tonnage and contained copper, silver and gold
vs. prior estimate
‒ Increases of 42%, 33%, 26% and 34%, respectively at the Masa
Valverde deposit.
· Masa Valverde Initial Indicated Mineral Resource:
‒ 16.9 Mt at 0.66% Cu, 1.55% Zn, 0.65% Pb, 27 g/t Ag and 0.55 g/t Au
(1.51% CuEq)
‒ Containing an estimated 112 kt Cu, 262 kt Zn, 110 kt Pb, 14.7 Moz
Ag, 0.3 Moz Au
· Masa Valverde Inferred Mineral Resource:
‒ 73.4 Mt at 0.61% Cu, 1.24% Zn, 0.61% Pb, 30 g/t Ag and 0.62 g/t Au
(1.37% CuEq)
‒ Containing an estimated 448 kt Cu, 911 kt Zn, 448 kt Pb, 70.8 Moz
Ag, 1.5 Moz Au
· Two copper-rich zones (10.2 Mt Indicated and 48.1 Mt Inferred) could
deliver higher grade material for processing at the existing Proyecto Riotinto
plant with minimal modifications
· Majadales Initial Inferred Mineral Resource:
‒ 3.1 Mt at 0.94% Cu, 3.08% Zn, 1.43% Pb, 54 g/t Ag and 0.32 g/t Au
(2.55% CuEq)
· A Preliminary Economic Assessment ("PEA") on PMV is expected to be
completed in H2 2022, with a focus on scenarios that would leverage the
existing plant at Proyecto Riotinto and access the orebodies via a single
ramp.
· Permitting process continues, with submission of an exploitation
concession application.
· Continued potential for further resource expansion, with compelling
targets already identified via recent detailed ground geophysical survey.
Alberto Lavandeira, CEO, commented:
"The current resource definition drilling programme that began in May 2021 has
successfully expanded the Mineral Resource base and has also upgraded a
portion to the Indicated category.
"We remain excited about the continued exploration potential at PMV, given the
many anomalies our exploration team has identified. We hope to make further
discoveries, building on our success in discovering the Majadales deposit,
which is shallower and higher grade than Masa Valverde and thus may play a key
role in optimising future development scenarios.
"At the Masa Valverde deposit, the significant increase in tonnage above
cut-off, the sub-horizontal geometry and the defined continuity of the main
mineralised zones will allow us to evaluate larger scale, more efficient and
lower operating cost underground mining methods. These scenarios will be
evaluated in the upcoming PEA, which is expected to focus on development
scenarios that leverage our nearby Proyecto Riotinto processing plant, where
copper-rich material from PMV could potentially be treated with minimal plant
modifications, highlighting the opportunity to develop another project with
low capital intensity."
About Proyecto Masa Valverde
PMV is a volcanogenic massive sulphide ("VMS") type deposit strategically
located approximately 28 km from Proyecto Riotinto (see Figure 1 in the
Website Announcement). As announced on 21 October 2020, Atalaya acquired a
100% interest on PMV, after having conducted a period of due diligence and
exploration on the property under an earlier option agreement.
PMV consists of two polymetallic deposits, Masa Valverde and Majadales, as
well as several drill-ready targets (see Figure 2 in the Website
Announcement). The Majadales deposit was a new discovery made by Atalaya's
exploration team in July 2019.
2022 Mineral Resource Estimation Details
The 2022 Mineral Resource estimate has been prepared by CSA Global (UK)
Limited ("CSA Global"). The geological model used is based on 122 drill holes
with a total length of 76,123 metres, of which 83 drill holes and 58,993
metres relate to Masa Valverde and 39 drill holes and 17,130 metres to
Majadales.
Assay results were compiled and validated as of 4 March 2022. CSA Global
selected a cut-off grade of 0.78% CuEq for its resource estimation.
Table 1: 2022 Mineral Resource Estimate
Masa Valverde Deposit
Cut-off: 0.78% CuEq Tonnage CuEq Cu Zn Pb Ag Au
(Mt) (%) (%) (%) (%) (g/t) (g/t)
Indicated 16.9 1.51 0.66 1.55 0.65 27 0.55
Inferred 73.4 1.37 0.61 1.24 0.61 30 0.62
Cut-off: 0.78% CuEq Cu metal Zn metal Pb metal Ag metal Au metal
(kt) (kt) (kt) (Moz) (Moz)
Indicated 112 262 110 14.7 0.3
Inferred 448 911 448 70.8 1.5
Majadales Deposit
Cut-off: 0.78% CuEq Tonnage CuEq Cu Zn Pb Ag Au
(Mt) (%) (%) (%) (%) (g/t) (g/t)
Inferred 3.1 2.55 0.94 3.08 1.43 54 0.32
Cut-off: 0.78% CuEq Cu metal Zn metal Pb metal Ag metal Au metal
(kt) (kt) (kt) (Moz) (Moz)
Inferred 29 95 44 5.3 0.03
Notes:
1. Tabulated data have been rounded to reflect this as an estimate and
as a result minor computational errors may occur.
2. The effective date of the Mineral Resource statement is 31 March
2022.
3. Cu Equivalent was determined using the following metal prices and
recoveries: US$9,600/t Cu, US$3,500/t Zn, US$2,300/t Pb, US$23/oz Ag,
US$1,800/oz Au and recoveries of 80% were assumed for Cu and Zn, 60% was
assumed for Pb, 35% was assumed for Ag and 20% was assumed for Au.
4. The 0.78% Cu Equivalent cut-off is based on a US$60/t production
cost.
5. Ordinary Kriging was used to interpolate density values into the
block model from sampling data.
6. The Mineral Resource has been classified under the guidelines
defined by the Canadian Institute of Mining, Metallurgy and Petroleum in their
document "CIM Definition Standards for Mineral Resources and Mineral Reserves"
of May 2014.
7. The metal content estimates are reflected in situ and do not
include factors such as external dilution, mining losses and process recovery
losses.
Further details are in Table 2 and Table 3 down below.
Masa Valverde is a globally significant undeveloped single VMS-type deposit.
It represents approximately 94% of the total Mineral Resource estimate of PMV.
It consists of three main mineralised zones: Upper Massive Sulphide, Lower
Massive Sulphide and Intermediate Stockwork-type (see Figure 3 in Website
Announcement). Inside the Massive Sulphide Zones, copper-rich
(ZnCu*2.80) zones have been differentiated
(see Figure 4 in the Website Announcement). Most of the stockwork-type
mineralisation is copper-rich and has lower levels of both zinc, lead and
potential deleterious elements. It is very similar to the ore currently being
mined at Proyecto Riotinto.
Indicated Mineral Resources totalling 16.9 million tonnes at 0.66% Cu, 1.55%
Zn, 0.65% Pb, 27 g/t Ag and 0.55 g/t Au represent the first Indicated level
resources declared at PMV. Based on the success of the current resource
development drilling programme in converting part of the Inferred Mineral
Resources to Indicated Mineral Resources, the Company's efforts will be to
continue resource development activities with the aim to further upgrade the
Mineral Resource base to higher categories of classification.
The Majadales deposit is smaller at 3.1 million tonnes Inferred Mineral
Resources, but is shallower (starting at 320m depth) and higher grade (2.55%
CuEq) than the Masa Valverde deposit (1.39% CuEq). See Figure 5 in the Website
Announcement.
In comparison to the 2017 resource estimate of 66 million tonnes at 0.67% Cu,
1.92% Zn, 0.90% Pb, 34 g/t Ag and 0.63 g/t Au (using a ZnEq cut-off of 3%),
the new estimate for PMV represents a 42% increase in total tonnage and 33%,
26% and 34% increases in contained copper, silver, and gold respectively.
Contained zinc and lead remain approximately the same at slightly lower
grades. It should be noted that one of the main reasons for the change is
driven by the switch from ZnEq reporting to CuEq, in line with Atalaya's
consideration of copper as the main project driver rather than zinc.
Planned Preliminary Economic Assessment
The 2022 Mineral Resource Estimate will be used to support a PEA for PMV,
which will be completed during H2 2022.
The PEA is expected to evaluate scenarios that are consistent with Atalaya's
strategy to develop its existing 15 Mtpa mill into a central processing hub
for material sourced from its deposits in the region. Delivering higher grade
material to Proyecto Riotinto would displace feed from the Cerro Colorado pit,
allowing the Company to potentially increase production while maintaining its
current processing rates.
The PEA is also expected to evaluate a number of mining scenarios, including
selective mining of higher grade zones as well as bulk mining scenarios that
are well suited to deposits of Masa Valverde's scale.
Several characteristics of PMV, combined with the Company's operations in the
region and the project's location in the Iberian Pyrite Belt are expected to
reduce initial capital requirements, expedite the development timeline and
simplify the permitting process. These factors include:
· Access to Majadales and Masa Valverde would be expected to be
completed via a single ramp
· Mined material would be expected to be trucked via the existing
public highway to Proyecto Riotinto
· Modest surface infrastructure requirements due to trucking scenario,
would facilitate reduced permitting requirements
· Material from PMV's copper zones is expected to be well suited to the
configuration of the existing plant at Proyecto Riotinto, with minimal
modifications expected
· Underground mines in the region (namely MATSA) have a history of
being operated by local mining contractors
In addition to the copper zones, the presence of polymetallic sulphides with
higher zinc, lead, silver and gold content could require the development of a
new differential flotation circuit similar to other conventional systems that
are operating successfully across the Iberian Pyrite Belt. Conventional
metallurgical testwork is ongoing using fresh core from the different sulphide
types at PMV. Separately, preliminary leaching tests with the E-LIX System
are also being completed, which has the potential to unlock significant value
from similar complex ores.
Permitting Process
In August 2021, the Company submitted an application to the Junta de
Andalucía for an exploitation concession for PMV.
Ongoing Exploration Programme
Exploration drilling continues at PMV, with three drill rigs currently in
operation. One rig is testing an electromagnetic anomaly (FLEM) located 300
meters west of the Masa Valverde deposit and the other two are conducting an
initial drilling campaign at the Campanario target.
Atalaya believes there is good potential to extend the current Masa Valverde
Mineral Resource to the west as well as discover new VMS mineralisation within
the broader PMV property. See Figure 6 in the Website Announcement.
In aggregate, Atalaya has an exploration budget of €10 million for 2022,
which is funding drilling and early-stage exploration programmes across its
strategic land position in the Iberian Pyrite Belt, including at PMV.
Qualified Person Statement
The Mineral Resource estimates for PMV were prepared by CSA Global (UK)
Limited ("CSA Global") in accordance with CIM guidelines and with Canadian
regulatory requirements set out in National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101") under the supervision of Mr.
Galen White, BSc (Hons), FAusIMM, Partner and Principal Consultant of CSA
Global. Mr White is a Qualified Person as defined under NI 43-101 and the AIM
Rules and is independent of the Company. Mr. White consents to the inclusion
of information related to Mineral Resources in this disclosure, in the form
and context it appears.
Glossary of Terms
Ag Silver
Au Gold
CIM Canadian Institute of Mining, Metallurgy and Petroleum
Cu Copper
CuEq Copper Equivalent
CSA Global CSA Global (UK) Limited
FLEM Fixed Loop Electromagnetic Survey
g/t Grams per tonne
Indicated Mineral Resources An Indicated Mineral Resource is that part of a Mineral Resource for which
quantity, grade or quality, densities, shape and physical characteristics are
estimated with sufficient confidence to allow the application of Modifying
Factors in sufficient detail to support mine planning and evaluation of the
economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing and is sufficient to assume geological and
grade or quality continuity between points of observation.
An Indicated Mineral Resource has a lower level of confidence than that
applying to a Measured Mineral Resource and may only be converted to a
Probable Mineral Reserve.
Inferred Mineral Resource An Inferred Mineral Resource is that part of a Mineral Resource for which
quantity and grade or quality are estimated on the basis of limited geological
evidence and sampling. Geological evidence is sufficient to imply but not
verify geological and grade or quality continuity.
An Inferred Mineral Resource has a lower level of confidence than that
applying to an Indicated Mineral Resource and must not be converted to a
Mineral Reserve. It is reasonably expected that the majority of Inferred
Mineral Resources could be upgraded to Indicated Mineral Resources with
continued exploration.
kt Thousand tonnes
Measured Mineral Resources A Measured Mineral Resource is that part of a Mineral Resource for which
quantity, grade or quality, densities, shape, and physical characteristics are
estimated with confidence sufficient to allow the application of Modifying
Factors to support detailed mine planning and final evaluation of the economic
viability of the deposit.
Geological evidence is derived from detailed and reliable exploration,
sampling and testing and is sufficient to confirm geological and grade or
quality continuity between points of observation. A Measured Mineral Resource
has a higher level of confidence than that applying to either an Indicated
Mineral Resource or an Inferred Mineral Resource. It may be converted to a
Proven Mineral Reserve or to a Probable Mineral Reserve.
Mineral Resources A concentration or occurrence of material of intrinsic economic interest in or
on the Earth's crust in such a form and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity, grade,
geological characteristics and continuity of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge.
Mineral Resources are sub-divided, in order of increasing geological
confidence, into Inferred, Indicated and Measured categories.
Mt Million tonnes
Mtpa Million tonnes per annum
n.a. Not available
NI 43-101 Canadian National Instrument for the Standards of Disclosure for Mineral
Projects
Pb Lead
PEA Preliminary Economic Assessment
PMV Proyecto Masa Valverde
PPM Parts per million
Stockwork It's a complex 3D network of structurally controlled or randomly oriented
veins. They are common in many ore deposit types. They are also referred to as
stringer zones.
VMS Volcanic Massive Sulphide
Zn Zinc
Table 2: Masa Valverde Deposit Mineral Resource Estimate by Class, Material
Type and Zone
Cut-off: 0.78% CuEq Tonnage CuEq Cu Zn Pb Ag Au
(Mt) (%) (%) (%) (%) (g/t) (g/t)
Copper Zone, Massive Sulphide
Indicated 6.6 1.21 0.68 0.62 0.47 33 0.70
Inferred 33.5 1.14 0.62 0.50 0.56 36 0.76
Copper Zone, Stockwork
Indicated 3.6 1.15 0.86 0.60 0.12 8 0.18
Inferred 14.5 1.16 0.87 0.56 0.15 9 0.18
Zinc Zone, Massive Sulphide
Indicated 6.2 2.04 0.53 3.02 1.11 33 0.62
Inferred 22.6 1.86 0.46 2.69 0.98 37 0.74
Zinc Zone, Stockwork
Indicated 0.5 1.56 0.46 2.28 0.86 16 0.45
Inferred 2.8 1.25 0.37 1.90 0.53 15 0.31
TOTAL
Indicated 16.9 1.51 0.66 1.55 0.65 27 0.55
Inferred 73.4 1.37 0.61 1.24 0.61 30 0.62
Cut-off: 0.78% CuEq Cu metal Zn metal Pb metal Ag metal Au metal
(kt) (kt) (kt) (Moz) (Moz)
Copper Zone, Massive Sulphide
Indicated 45 41 31 7.0 0.1
Inferred 208 168 188 38.8 0.8
Copper Zone, Stockwork
Indicated 31 21 4 0.9 0.0
Inferred 126 81 22 4.1 0.1
Zinc Zone, Massive Sulphide
Indicated 33 188 69 6.6 0.1
Inferred 104 608 222 26.9 0.5
Zinc Zone, Stockwork
Indicated 2 12 4 0.3 0.0
Inferred 10 53 15 1.3 0.0
TOTAL
Indicated 112 262 110 14.7 0.3
Inferred 448 911 448 70.8 1.5
Notes:
1. Tabulated data have been rounded to reflect this as an estimate and
as a result minor computational errors may occur.
2. The effective date of the Mineral Resource statement is 31 March
2022.
3. Cu Equivalent was determined using the following metal prices and
recoveries: US$9,600/t Cu, US$3,500/t Zn, US$2,300/t Pb, US$23/oz Ag,
US$1,800/oz Au and recoveries of 80% were assumed for Cu and Zn, 60% was
assumed for Pb, 35% was assumed for Ag and 20% was assumed for Au.
4. The 0.78% Cu Equivalent cut-off is based on a US$60/t production
cost.
5. Ordinary Kriging was used to interpolate density values into the
block model from sampling data.
6. The Mineral Resource has been classified under the guidelines
defined by the Canadian Institute of Mining, Metallurgy and Petroleum in their
document "CIM Definition Standards for Mineral Resources and Mineral Reserves"
of May 2014.
7. The metal content estimates reflected are in situ, and do not
include factors such as external dilution, mining losses and process recovery
losses.
Table 3: Majadales Deposit Mineral Resource Estimate by Class and Material
Type
Cut-off: 0.78% CuEq Tonnage CuEq Cu Zn Pb Ag Au
(Mt) (%) (%) (%) (%) (g/t) (g/t)
Massive Sulphide
Inferred 2.7 2.67 0.94 3.30 1.53 58 0.34
Semi-Massive Sulphide
Inferred 0.2 1.19 0.73 0.87 0.39 16 0.16
Stockwork
Inferred 0.1 1.08 0.87 0.43 0.11 7 0.06
TOTAL
Inferred 3.1 2.55 0.94 3.08 1.43 54 0.32
Cut-off: 0.78% CuEq Cu metal Zn metal Pb metal Ag metal Au metal
(kt) (kt) (kt) (Moz) (Moz)
Massive Sulphide
Inferred 26 90 42 5.1 0.030
Semi-Massive Sulphide
Inferred 2 2 1 0.1 0.001
Stockwork
Inferred 1 1 0 0.0 0.000
TOTAL
Inferred 29 95 44 5.3 0.032
Notes:
1. Tabulated data have been rounded to reflect this as an estimate and
as a result minor computational errors may occur.
2. The effective date of the Mineral Resource statement is 31 March
2022.
3. Cu Equivalent was determined using the following metal prices and
recoveries: US$9,600/t Cu, US$3,500/t Zn, US$2,300/t Pb, US$23/oz Ag,
US$1,800/oz Au and recoveries of 80% were assumed for Cu and Zn, 60% was
assumed for Pb, 35% was assumed for Ag and 20% was assumed for Au.
4. The 0.78% Cu Equivalent cut-off is based on a US$60/t production
cost.
5. Ordinary Kriging was used to interpolate density values into the
block model from sampling data.
6. The Mineral Resource has been classified under the guidelines
defined by the Canadian Institute of Mining, Metallurgy and Petroleum in their
document "CIM Definition Standards for Mineral Resources and Mineral Reserves"
of May 2014.
7. The metal content estimates reflected are in situ, and do not
include factors such as external dilution, mining losses and process recovery
losses.
Figure 1: Location Map of Proyecto Masa Valverde (refer to Website
Announcement)
Figure 2: Map of Various Deposits and Target Zones at Proyecto Masa Valverde
(refer to Website Announcement)
Figure 3: Main Mineralized Zones of the Masa Valverde Deposit (refer to
Website Announcement)
Figure 4: Masa Valverde Cu and Zn Zones - Longitudinal and Cross Sections
(refer to Website Announcement)
Figure 5: Main Mineralized Zones of the Majadales Deposit (refer to Website
Announcement)
Figure 6: Main Geophysical Targets at Proyecto Masa Valverde (refer to Website
Announcement)
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)
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