REG - Atalaya Mining PLC - Operational Review and Q3 Financials <Origin Href="QuoteRef">ATYM.L</Origin> - Part 3

Atalaya MiningAnnouncement

24/11/2016 07:06

- Part 3: For the preceding part double click  ID:nRSX9991Pb 

submitted the relevant defence arguments. 
 
The Junta de Andalucía notified ARM of another disciplinary proceeding for
unauthorised discharge in 2014.  ARM submitted the relevant defence arguments
on 10 March 2015 but has had no response or feedback from the Junta de
Andalucía since the submissions.  Based on the time that has lapsed without a
response, it is expected that the outcome of this proceedings will also be
favourable for ARM.  Once the necessary time has lapsed, ARM will ask for the
Administrative File to be dismissed. 
 
18. Commitments 
 
Spain 
 
There are no minimum exploration requirements at Proyecto Riotinto.  However,
the Group is obliged to pay municipal land taxes which currently are
approximately E110,000 per year in Spain and the Group is required to maintain
the Riotinto site in compliance with all applicable regulatory requirements. 
 
As part of the consideration for the purchase of land from Rumbo, ARM has
agreed to pay a royalty to Rumbo subject to commencement of production of
$250,000 in each quarter where the average price of LME copper or the average
copper sale price achieved by the Group is at least $2.60/lb.  No royalty is
payable in respect of any quarter where the average copper price for that
quarter is below this amount and in certain circumstances any quarterly
royalty payment can be deferred until the following quarter.  The royalty
obligation terminates 10 years after commencement of production. 
 
Commencement of production is defined as being the first to occur of
processing of ore at a rate of nine million metric tons per annum for a
continuous period of six months or the date that is 18 months after the first
product sales from Proyecto Riotinto. 
 
ARM has 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 E2 million. 
Costs are then borne by the joint venture partners in accordance with their
respective ownership interests.  Half of the costs paid by ARM in connection
with the feasibility study can be deducted from any royalty which may fall due
to be paid. 
 
At Proyecto Riotinto, the Group had four year options with each of Zeitung and
Inland for the purchase of certain land plots adjacent to the mine at a
purchase price of E4,202,000 (expiry date 31 July 2016) and E4,648,000 (expiry
date 2 August 2016) respectively.  The completion of the infill drilling
programme, assays and updating of the block model provided the Group with a
better understanding of the mineralisation.  Based on these results, the Group
took the view that the options on the said land plots were no longer necessary
and opted not to exercise them. 
 
19. Significant events 
 
The Group declared commercial production on 1 February 2016.  The
commissioning of the expansion project began in May 2016, with nameplate
capacity of 9.5Mtpa forecast to be reached by the end of 2016. 
 
The updated Reserves and Resources statement filed in September 2016 indicated
a 12% increase in contained reserves and extended life of the open pit mine to
16 ½ years. 
 
20. Events after the reporting period 
 
There were no events after the reporting period, which would have a material
effect on the consolidated financial statements. 
 
This information is provided by RNS
The company news service from the London Stock Exchange