REG - Atalaya Mining PLC - Q1 2023 Financial Results
15/05/2023 07:00
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RNS Number : 3352Z Atalaya Mining PLC 15 May 2023
Atalaya Mining Plc
1 Lampousas Street
1095 Nicosia, Cyprus
Tel: +357 22442705
Fax: +357 22442708
www.atalayamining.com
15 May 2023
Atalaya Mining Plc.
("Atalaya" or "the Company")
Q1 2023 Financial Results
Positive start to 2023 supports optimism for full year production and costs
Atalaya Mining Plc (AIM: ATYM) is pleased to announce its unaudited quarterly
results for the three months ended 31 March 2023 ("Q1 2023" or "Period"),
together with its unaudited interim financial statements for Q1 2023.
Highlights
· Positive financial performance including EBITDA of €24.4 million
· Copper production of 12.1 kt at AISC of $3.12/lb Cu, despite the
decision to bring forward plant maintenance activities into Q1 2023
· The publication of the new Riotinto PEA and grant of environmental
permits at Masa Valverde reinforce Atalaya's optionality and growth potential
in the Riotinto District
· Continued investments made in growth, cost reductions and
decarbonisation, including exploration, E-LIX Phase I and the 50 MW solar
plant
· Balance sheet remains strong with net cash of €55.3 million
· On track to meet full year 2023 outlook due to steady operational
performance and improved electricity prices
Q1 2023 Financial Results Summary
Period ended 31 March Q1 2023 Q1 2022
Revenues from operations €k 91,171 86,251
Operating costs €k (66,766) (59,539)
EBITDA €k 24,405 26,712
Profit for the Period €k 11,104 18,257
Basic earnings per share € cents/share 8.1 13.5
Cash flows from operating activities €k 12,362 28,298
Cash flows used in investing activities €k (8,811) (7,552)
Cash flows from financing activities €k (9,431) (2,378)
Net Cash position ((1)) €k 55,263 86,836
Working capital surplus €k 85,336 120,124
Average realised copper price US$/lb 4.00 4.50
(excluding QPs closed in the Period)
Cu concentrate produced tonnes 57,670 54,209
Cu production tonnes 12,139 11,461
Cash costs US$/lb payable 2.88 3.33
All-In Sustaining Cost ("AISC") US$/lb payable 3.12 3.59
(1) Includes restricted cash and bank borrowings at 31 March 2023
and 31 March 2022.
Alberto Lavandeira, CEO, commented:
"We are pleased to have begun 2023 with a positive first quarter. Our
operational performance was consistent with expectations and significantly
reduced electricity prices have helped to deliver lower AISC and solid EBITDA
for the period.
We remain conscious of the ongoing input cost inflation that is affecting the
mining sector, but we believe these pressures will provide support to the
copper price over the medium and longer term.
Atalaya benefits from a diversified portfolio of growth projects in Spain,
including higher grade orebodies such as San Dionisio and Masa Valverde, past
producing projects like Touro and significant exploration ground in areas with
established infrastructure and a long mining history. Together, these assets
provide growth optionality at a time when high quality copper projects are
becoming increasingly scarce."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live
presentation relating to the Q1 2023 results via the Investor Meet Company
platform on Friday, 19 May 2023 at 11:30 BST (previously scheduled for
Thursday, 18 May 2023).
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.
Q1 2023 Operating Results Summary
Units expressed in accordance with the international system of units (SI) Unit Q1 2023 Q1 2022
Ore mined t 3,421,556 3,954,647
Waste mined t 6,516,903 6,838,631
Ore processed t 3,723,853 3,547,487
Copper ore grade % 0.38 0.37
Copper concentrate grade % 21.05 21.14
Copper recovery rate % 86.88 86.07
Copper concentrate tonnes 57,670 54,209
Copper contained in concentrate tonnes 12,139 11,461
Payable copper contained in concentrate tonnes 11,563 10,918
Mining
Ore mined was 3.4 million tonnes in Q1 2023 (Q1 2022: 4.0 million tonnes).
Waste mined was 6.5 million tonnes in Q1 2023 (Q1 2022: 6.8 million tonnes).
Overall material movements in Q1 2023 were in line with budget, although waste
mining was prioritised in order to align ore mining rates with plant capacity
during the Period.
Processing
The plant processed 3.7 million tonnes of ore during Q1 2023 (Q1 2022: 3.5
million tonnes). Throughput rates during the Period were impacted by the
decision to bring forward a scheduled plant maintenance shutdown from April
2023 to March 2023. The Q1 2022 quarter was impacted by temporary plant
shutdown associated with the transport sector strike.
Copper grade was 0.38% in Q1 2023 (Q1 2022: 0.37%) as a result of pit
sequencing into a previously mined-out area containing backfill during the
Period.
Copper recoveries in Q1 2023 were 86.88% (Q1 2022: 86.07%) due to favourable
ore characteristics during the Period.
Production
Copper production was 12,139 tonnes in Q1 2023 (Q1 2022: 11,461 tonnes).
Production previously anticipated for Q1 2023 is now expected in Q2 2023, as a
result of the rescheduling of plant maintenance activities.
On-site copper concentrate inventories at the end of Q1 2023 were
approximately 1,564 tonnes. All concentrate in stock at the beginning of the
Period was delivered to the port at Huelva.
Copper contained in concentrates sold was 12,501 tonnes in Q1 2023 (Q1 2022:
10,304 tonnes).
Cash Costs and AISC Breakdown
$/lb Cu payable Q1 2023 Q1 2022
Mining 0.83 0.86
Processing 0.97 1.42
Other site operating costs 0.52 0.59
Total site operating costs 2.32 2.87
By-product credits (0.09) (0.07)
Freight, treatment charges and other offsite costs 0.65 0.53
Total offsite costs 0.56 0.46
Cash costs 2.88 3.33
Cash costs 2.88 3.33
Corporate costs 0.07 0.12
Sustaining capital (excluding one-off tailings expansion) 0.01 0.04
Capitalised stripping costs 0.08 0.03
Other costs 0.08 0.06
Total AISC 3.12 3.59
Cash costs were $2.88/lb payable copper in Q1 2023 (Q1 2022: $3.33), with the
decrease due to lower costs associated with electricity and other supplies and
higher production volumes, partially offset by higher offsite costs.
AISC were $3.12/lb payable copper in Q1 2023 (Q1 2022: $3.59/lb). The decrease
in AISC was driven by the same factors that lowered cash costs, mainly lower
electricity costs. AISC excludes one-off investments in the tailings dam,
consistent with prior reporting.
Q1 2023 Financial Results Highlights
Income Statement
Revenues were €91.2 million in Q1 2023 (Q1 2022: €86.3 million). Higher
revenues were the result of higher copper concentrate volumes sold during the
Period, partially offset by lower realised copper prices.
The realised copper price (excluding QPs) was $4.00/lb in Q1 2023 (Q1 2022:
$4.50/lb).
Operating costs were €66.8 million in Q1 2023 (Q1 2022: €59.5 million) due
to higher input costs other than electricity, which has decreased since the
peak levels were reached following the start of the conflict in Ukraine.
EBITDA was €24.4 million in Q1 2023 (Q1 2022: €26.7 million) as higher
copper sales were offset by higher operating costs and a lower copper price.
Profit after tax was €11.1 million in Q1 2023 (Q1 2022: €18.3 million) or
8.1 cents per basic share (Q1 2022: 13.5 cents per basic share). Earnings were
impacted by the same factors as EBITDA, as well as by adverse foreign exchange
differences and higher finance costs.
Cash Flow Statement
Cash flows from operating activities before changes in working capital were
positive €24.1 million in Q1 2023 (Q1 2022: positive €26.9 million) and
positive €12.4 million after working capital changes (Q1 2022: positive
€28.3 million).
Cash flows used in investing activities were €8.8 million in Q1 2023 (Q1
2022: €7.6 million). Investments in Q1 2023 included €0.3 million in
sustaining capex (Q1 2022: €0.9 million), €1.9 million in capitalised
stripping (Q1 2022: €0.7 million), €3.4 million to increase the capacity
of the tailings dam (Q1 2022: €2.5 million), €1.6 million for the 50 MW
solar plant (Q1 2022: €0.4 million) and €3.3 million for the E-LIX Phase I
plant (Q1 2022: €4.6 million), of which €1.9 million was booked as
long-term loans to Lain Technologies Ltd.
Cash flows from financing activities were negative €9.4 million in Q1 2023
(Q1 2022: negative €2.4 million) due to repayments made under the Company's
credit facilities.
Balance Sheet
Despite ongoing input cost pressures and the investments in exploration and
the E-LIX and 50 MW solar plants, the Company's balance sheet remains strong
with consolidated cash and cash equivalents of €119.3 million at 31 March
2023.
Net of current and non-current borrowings of €64.1 million, net cash was
€55.3 million as at 31 March 2023, compared with €53.1 million as at 31
December 2022.
Total working capital was €85.3 million at 31 March 2023, compared to
€84.0 million as at 31 December 2022.
Energy Prices
Realised Prices During the Period
In Q1 2023, market electricity prices were significantly lower than the levels
experienced during 2022, thanks to lower gas prices in Europe and mild
weather.
When including the contribution from the Company's 10-year power purchase
agreement ("PPA") which entered into effect at the start of 2023, realised
electricity prices in Q1 2023 were around 50% lower than the Company's average
realised electricity price in 2022.
Renewable Energy Projects
The Company continues to advance construction of its 50 MW solar plant at
Riotinto, which is expected to provide approximately 22% of its current
electricity needs when fully operational. All major materials are on site,
civil works are under way and start-up is expected in late 2023. Combined, the
50 MW solar plant and long-term PPA will provide over 50% of the Company's
current electricity requirements at a rate below historical prices in Spain.
The 50 MW solar plant will also have a significant positive impact on
Atalaya's Scope 2 GHG emissions and will contribute to the decarbonisation of
the operations.
The Company also continues to evaluate additional renewable power initiatives
that could deliver further low cost and carbon-free electricity for its
operations at Riotinto, including the installation of wind turbines. These
initiatives could further reduce the Company's overall GHG emissions.
Outlook for 2023
The Company remains on track to achieve the full year 2023 guidance it
announced in March 2023 as part of its 2022 Annual Results, including copper
production guidance of 53,000 to 55,000 tonnes of copper at cash costs of
$2.80 to $3.00/lb copper payable and AISC of $3.00 to $3.20/lb copper payable.
Asset Portfolio Update
Proyecto Riotinto
On 23 February 2023, the Company announced the results of a new preliminary
economic assessment for the Cerro Colorado, San Dionisio and San Antonio
deposits at Proyecto Riotinto ("Riotinto PEA"). The objective of the Riotinto
PEA was to incorporate these deposits into a new integrated mine plan in order
to quantify the benefits of the Company's planned processing hub strategy for
its 15 Mtpa processing plant.
The Riotinto PEA demonstrated strong potential economic results, including a
$1.07 billion after-tax NPV(8%) at $3.50/lb copper (Base Case) and a $1.57
billion after-tax NPV(8%) at $4.03/lb copper (Sensitivity Case). In addition,
the Riotinto PEA illustrated the potential uplift in copper equivalent
production to ~90 ktpa (from 2027 onwards) as a result of processing higher
grade material, as well as a potential reduction in cash costs.
The Riotinto PEA serves as a foundation for further optimisation and the
Company will continue to evaluate opportunities to enhance value. These will
include the potential application of the E-LIX System, considering a revised
mining sequence to bring forward the highest value material and studying the
refurbishment of existing processing equipment at Riotinto in order to reduce
the capital costs associated with plant modifications.
In April 2023, the Company was granted a substantial modification of the
existing Unified Environmental Authorisation (or in Spanish, Autorización
Ambiental Unificada ("AAU")) for Proyecto Riotinto by the Junta de Andalucía.
This allows for the expansion of tailings capacity at Riotinto and represents
an important step towards developing regional deposits such as San Dionisio
and San Antonio.
E-LIX Phase I Plant
Construction activities at the E-LIX Phase I plant continue, with
commissioning activities expected in H2 2023.
Once operational, the E-LIX plant is expected to produce high purity copper or
zinc metals on site, allowing the Company to potentially achieve higher metal
recoveries from complex polymetallic ores, lower transportation and
concentrate treatment charges and a reduced carbon footprint.
Riotinto District - Proyecto Masa Valverde ("PMV")
In March 2023, the Company announced that PMV was granted the AAU by the Junta
de Andalucía, following an application process that was initiated by the
Company in December 2021. The AAU is an integrated process that combines the
Environmental Impact Assessment and other authorisations and specifies
requirements to avoid, prevent and minimise a project's impacts on the
environment and the cultural heritage of the area.
The Company will now file for the exploitation permit which, once granted,
will allow for project development to begin. Meanwhile, evaluation work will
continue including further metallurgical testing.
In addition, three core rigs are active and focused on step-out drilling at
the Masa Valverde deposit, resource definition drilling at the Campanario
Trend and step-out drilling around the new discovery made at the Mojarra
Trend. The last comprehensive update on recent exploration results at these
targets was announced in November 2022.
An airborne gravity gradiometry ("AGG") and magnetic survey covering the
entirety of PMV has been completed. Final results were received, and first
drill testing of selected anomalies is planned to begin during Q2 2023.
Proyecto Touro
Atalaya remains fully committed to the development of the Touro copper project
in Galicia, which could become a new source of copper production for Europe.
In March 2023, the European Union announced the Critical Raw Materials Act,
which seeks to "address the EU's dependency on imported critical raw materials
by diversifying and securing a domestic and sustainable supply of critical raw
materials". Copper was added to the list of "Strategic Raw Materials" as a
result of the challenges associated with substituting copper metal in
electrical applications.
Running parallel with the Touro permitting process, the Company continues to
focus on numerous initiatives related to securing the social licence to
operate, including engaging with the many stakeholders in the region in
advance of its plans to submit a new improved project design. Positive and
favourable feedback from numerous meetings with municipalities, farmers and
fishermen associations and other industries indicate meaningful support
towards the development of a new and modern mining project.
The Company continues to restore rivers around Touro and is operating its
water treatment plant, which is addressing the legacy issues associated with
acid water runoff from the historical mine, which closed in 1987. The
construction of the treatment plant was contemplated in the original project
proposal, but Atalaya volunteered to fix the historical acid water issues
prior to the new Environmental Impact Assessment ("EIA") in order to
demonstrate its operating philosophy and the benefits of modern operating
systems. The field work carried out by Atalaya has resulted in an immediate
and visible improvement of the water systems surrounding the project.
Atalaya continues to be confident that its approach to Touro, which includes
fully plastic lined thickened tailings with zero discharge, is consistent with
international best practice and will satisfy the most stringent environmental
conditions that may be imposed by the authorities prior to the development of
the project.
Proyecto Ossa Morena
Drilling continued to progress with one rig at the Guijarro-Chaparral
gold-copper project, located in the central part of the district. Drilling at
the flagship Alconchel-Pallares copper-gold project is expected to commence
during Q3 2023.
Proyecto Riotinto East
An airborne gravity gradiometry and magnetic survey covering the entire
project was completed. Final results were received and first drill testing of
selected anomalies is planned to start during Q2 2023.
Corporate Matters
During the Period, the Company's ordinary shares were delisted from the
Toronto Stock Exchange ("TSX") following a voluntary application made by the
Company. The objective was to reduce the financial costs and administrative
requirements associated with the TSX listing, where minimal trading volumes
have taken place in recent years. The TSX delisting has no impact on the
Company's ordinary shares, which continue to trade on the AIM market of the
London Stock Exchange.
Financial Statements
The Unaudited Interim Condensed Consolidated Financial Statements for the
three months ended 31 March 2023 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) .
Contacts:
SEC Newgate UK Elisabeth Cowell / Matthew Elliott + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity Henry Fitzgerald-O'Connor / James Asensio / Thomas Diehl +44 20 7523 8000
(NOMAD and Joint Broker)
BMO Capital Markets Tom Rider / Andrew Cameron +44 20 7236 1010
(Joint Broker)
Peel Hunt LLP Ross Allister / David McKeown +44 20 7418 8900
(Joint Broker)
About Atalaya Mining Plc
Atalaya is an AIM-listed mining and development group which produces copper
concentrates and silver by-product at its wholly owned Proyecto Riotinto site
in southwest Spain. Atalaya's current operations include the Cerro Colorado
open pit mine and a modern 15 Mtpa processing plant, which has the potential
to become a central processing hub for ore sourced from its wholly owned
regional projects around Riotinto that include Proyecto Masa Valverde and
Proyecto Riotinto East. In addition, the Group has a phased earn-in agreement
for up to 80% ownership of Proyecto Touro, a brownfield copper project in the
northwest of Spain, as well as a 99.9% interest in Proyecto Ossa Morena. For
further information, visit www.atalayamining.com
(http://www.atalayamining.com)
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
31 March 2023
Management's review
(All amounts in Euro thousands unless otherwise stated)
For the three months period ended 31 March 2023 and 2022 - (Unaudited)
Notice to Reader
The accompanying unaudited, condensed, interim consolidated financial
statements of Atalaya Mining Plc have been prepared by and are the
responsibility of Atalaya Mining Plc's management.
Introduction
This report provides an overview and analysis of the financial results of
operations of Atalaya Mining Plc and its subsidiaries ("Atalaya" and/or
"Group"), to enable the reader to assess material changes in the financial
position between 31 December 2022 and 31 March 2023 and results of operations
for the three months ended 31 March 2023 and 2022.
This report has been prepared as of 15 May 2023. The analysis, hereby
included, is intended to supplement and complement the unaudited interim
condensed consolidated financial statements and notes thereto ("Financial
Statements") as at and for the period ended 31 March 2023. The reader should
review the Financial Statements in conjunction with the review of this report
and with the audited, consolidated financial statements for the year ended 31
December 2022. These documents can be found on Atalaya's website at
www.atalayamining.com (http://www.atalayamining.com) .
Atalaya prepares its Annual Financial Statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by EU and its
Unaudited Interim Condensed Consolidated Financial Statements in accordance
with International Accounting Standards 34: Interim Financial Reporting. The
currency referred to in this document is the Euro, unless otherwise specified.
Forward-looking statements
This report may include certain "forward-looking statements" and
"forward-looking information" under applicable securities laws. Except for
statements of historical fact, certain information contained herein
constitutes forward-looking statements. Forward-looking statements are
frequently characterised by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate", and other similar words, or
statements that certain events or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates of
management at the date the statements are made and are based on a number of
assumptions and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking statements. Assumptions upon which such
forward-looking statements are based include that all required third party
regulatory and governmental approvals will be obtained. Many of these
assumptions are based on factors and events that are not within the control of
Atalaya and there is no assurance they will prove to be correct. Factors that
could cause actual results to vary materially from results anticipated by such
forward-looking statements include changes in market conditions and other risk
factors discussed or referred to in this report and other documents filed with
the applicable securities regulatory authorities. Although Atalaya has
attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results
not to be anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
statements. Atalaya undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions should
change except as required by applicable securities laws. The reader is
cautioned not to place undue reliance on forward-looking statements.
1. Incorporation and description of the Business
Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September
2004 as a private company with limited liability under the Companies Law, Cap.
113 and was converted to a public limited liability company on 26 January
2005. Its registered office is at 1 Lampousa Street, Nicosia, Cyprus.
The Company was listed on AIM of the London Stock Exchange ("AIM") in May 2005
under the symbol ATYM. The Company continued to be listed on AIM as at 31
March 2023.
On 20 February 2023, Atalaya announced that applied a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary
shares in the Company continue to trade on the AIM market of the London Stock
Exchange under the symbol "ATYM". Delisting from TSX took effect at the close
of trading on 20 March 2023.
Atalaya is a European mining and development company. The strategy is to
evaluate and prioritise metal production opportunities in several
jurisdictions throughout the well-known belts of base and precious metal
mineralisation in Spain, elsewhere in Europe and Latin America.
The Group currently owns four mining projects: Proyecto Riotinto, Proyecto
Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the
Company has an earn-in agreement to acquire three investigation permits at
Proyecto Riotinto Este.
Proyecto Riotinto
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 31 March 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 mineralisation, which will add to the potential of
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).
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. In July 2022, Atalaya increased its
stake in the company to 99.9% as a result of an equity raise to fund the
exploration activities under the investigation permits.
2. Overview of Operational Results
Proyecto Riotinto
The following table presents a summarised statement of operations of Proyecto
Riotinto for the three months ended 31 March 2023 and 2022, respectively.
Units expressed in accordance with the international system of units (SI) Unit Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Ore mined t 3,421,556 3,954,647
Waste mined t 6,516,903 6,838,631
Ore processed t 3,723,853 3,547,487
Copper ore grade % 0.38 0.37
Copper concentrate grade % 21.05 21.14
Copper recovery rate % 86.88 86.07
Copper concentrate t 57,670 54,209
Copper contained in concentrate t 12,139 11,461
Payable copper contained in concentrate t 11,563 10,918
Cash cost* US$/lb payable 2.88 3.33
All-in sustaining cost* US$/lb payable 3.12 3.59
(*) Refer to section 5 of this Management Review
There may be slight differences between the numbers in the above table and the
figures announced in the quarterly operations updates that are available on
Atalaya's website at www.atalayamining.com (http://www.atalayamining.com)
$/lb Cu payable Q1 2023 Q1 2022
Mining 0.83 0.86
Processing 0.97 1.42
Other site operating costs 0.52 0.59
Total site operating costs 2.32 2.87
By-product credits (0.09) (0.07)
Freight, treatment charges and other offsite costs 0.65 0.53
Total offsite costs 0.56 0.46
Cash costs 2.88 3.33
Cash costs 2.88 3.33
Corporate costs 0.07 0.12
Sustaining capital (excluding one-off tailings expansion) 0.01 0.04
Capitalised stripping costs 0.08 0.03
Other costs 0.08 0.07
Total AISC 3.12 3.59
Three months operational review
During Q1 2023, a total of 3,723,853 tonnes of ore were processed with an
average copper head grade of 0.38% and a recovery rate of 86.88%. Compared
with Q1 2022, throughput increased 6.4%. Throughput rates during the Period
were impacted by the decision to bring forward a scheduled plant maintenance
shutdown from April 2023 to March 2023.
Copper production was 12,139 tonnes in Q1 2023 (Q1 2022: 11,461 tonnes),
compared with 13,969 tonnes in Q4 2022. Production previously anticipated for
Q1 2023 is now expected in Q2 2023, as a result of the rescheduling of plant
maintenance activities.
On-site copper concentrate inventories at the end of Q1 2023 were
approximately 1,564 tonnes. All concentrate in stock at the beginning of the
Period was delivered to the port at Huelva.
Copper contained in concentrates sold was 12,501 tonnes in Q1 2023 (Q1 2022:
10,304 tonnes)
3. Outlook
The forward-looking information contained in this section is subject to the
risk factors and assumptions contained in the cautionary statement on
forward-looking statements included in the Basis of Reporting. The Company is
aware that the inflationary pressure on the goods and services required for
its business and the geopolitical developments in Ukraine and its impact on
energy prices may still have further effects or impact how the Company can
manage it operations and is accordingly keeping its guidance under regular
review. Should the Company consider the current guidance no longer achievable,
then the Company will provide a further update.
Operational guidance
Guidance for Proyecto Riotinto is unchanged from previously announced outlook.
Unit Guidance 2023
Ore mined million tonnes 17.1
Waste mined million tonnes 24.1
Ore processed million tonnes 15.3 - 15.8
Copper ore grade % 0.40 - 0.42
Copper recovery rate % 84 - 86
Contained copper tonnes 53,000-55,000
Cash costs $/lb payable 2.80 - 3.00
All-in sustaining cost $/lb payable 3.00 - 3.20
As announced in the Company's Q1 2023 Operations Update, production guidance
for 2023 remained in 53,000 to 55,000 tonnes of copper.
Inflationary pressures continue to impact the global mining industry. The
prices of many key inputs, including diesel, tyres, explosives, grinding media
and lime, increased materially in 2022 as a result of higher global energy
prices and logistics constraints. Since then, prices have stabilised for
certain items.
The cash cost guidance range for 2023 is $2.80 to $3.00/lb copper payable and
the AISC guidance range is $3.00 to $3.20/lb copper payable. These cost
guidance ranges are based on an assumed market electricity price range of
€100 to 150/MWh and also include the benefit of the Company's PPA.
4. Overview of the Financial Results
The following table presents summarised consolidated income statements for the
three months ended 31 March 2023, with comparatives for the three months ended
31 March 2022.
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Revenues 91,171 86,251
Costs of sales (63,003) (54,789)
Administrative and other expenses (2,033) (3,583)
Exploration expenses (1,533) (452)
Care and maintenance expenditure (295) (715)
Other income 98 -
EBITDA 24,405 26,712
Depreciation/amortisation (8,762) (7,520)
Net foreign exchange (loss)/gain (1,222) 2,573
Net finance cost (844) (315)
Tax (2,473) (3,193)
Profit for the period 11,104 18,257
Three months financial review
Revenues for the three-month period ended 31 March 2023 amounted to €91.2
million (Q1 2022: €86.3 million). Higher revenues are mainly due to an
increase in copper concentrate volume sold despite lower realised copper
prices.
Realised prices excluding QPs were US$4.00/lb copper during Q1 2023 compared
with US$4.50/lb copper in Q1 2022. The realised price, including QPs were
approximately $3.94/lb during the quarter ($4.42/lb in Q1 2022).
Cost of sales for the three-month period ended 31 March 2023 amounted to
€63.0 million, compared with €54.8 million in Q1 2022. Although unit
operating costs were lower in Q1 2023 compared to Q1 2022, this improvement
was offset by the impact of a lower variation in stock at the end of the
period.
Cash costs of US$2.88/lb payable copper during Q1 2023 compared with US$3.33lb
payable copper in the same period last year. Lower cash costs were mainly due
to the significantly reduction in cost of electricity (€12.1 million lower)
and the stronger US Dollar/Euro rate in Q1 2023 despite of higher prices in
other supplies, which partially offset the lower operating costs in Q1 2023.
AISC excluding investment in tailings dam expansion for Q1 2023 were
US$3.12/lb payable copper compared to US$3.59/lb payable copper in Q1 2022.
The increase was mainly driven by the impacts derived from the cash costs and
lower sustaining capex invested in Q1 2023.
Sustaining capex for Q1 2023 amounted to €0.3 million compared with €0.9
million in Q1 2022. Sustaining capex was mainly related to continuous
enhancements in the processing systems of the plant. In addition, the Company
invested €3.4 million in the project to increase the tailings dam during Q1
2023.
Capex associated with the construction of the 50 MW solar plant amounted to
€1.6 million in Q1 2023, while investments in the E-LIX Phase I plant
totalled €3.3 million, of which €1.9 million was booked as long term loans
to Lain Technologies Ltd.
Administrative and other expenses amounted to €2.0 million (Q1 2022: €3.6
million) and include non-operating costs of the Cyprus office, corporate legal
and consultancy costs, on-going listing costs, officers and directors'
emoluments, and salaries and related costs of the corporate office. The
decrease in costs during the period was primarily due to the absence of
one-off legal expenses related to the Astor litigation case, which occurred in
Q1 2022.
Exploration costs for the three-month period ended 31 March 2023 amounted to
€1.5 million, higher than Q1 2022 (€0.5 million).
EBITDA for the three months ended 31 March 2023 amounted to €24.5 million
compared with Q1 2022 of €26.7 million.
The main item below the EBITDA line is depreciation and amortisation of €8.8
million (Q1 2022: €7.5 million).
Net foreign exchange differences have a negative impact due to the weaker US
Dollar/Euro rate in Q1 2023 compared to Q4 2022.
Net financing costs for Q1 2023 amounted to €0.8 million compared with
€0.3 million in Q1 2022.
Copper prices
The average realised copper price (excluding QPs) decreased 11% from US$4.50
per pound in Q1 2022 to US$4.00 per pound in Q1 2023.
The average prices of copper for the three months ended 31 March 2023 and 2022
are summarised below:
$/lb Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Realised copper price excluding QPs closed 4.00 4.50
Market copper price per lb (period average) 4.05 4.53
Realised copper prices for the reporting period noted above have been
calculated using payable copper and excluding both provisional invoices and
final settlements of quotation periods ("QPs") together. The realised price
during the year, including the QP, was approximately $3.94/lb.
5. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost
per pound of payable copper", "All-In Sustaining Costs" ("AISC") and "realised
prices" in this report. Non-IFRS measures do not have any standardised meaning
prescribed under IFRS, and therefore they may not be comparable to similar
measures presented by other companies. These measures are intended to provide
additional information and should not be considered in isolation or as a
substitute for indicators prepared in accordance with IFRS.
EBITDA includes gross sales net of penalties and discounts and all operating
costs, excluding finance, tax, impairment, depreciation and amortisation
expenses.
Cash Cost per pound of payable copper includes cash operating costs, including
treatment and refining charges ("TC/RC"), freight and distribution costs net
of by-product credits. Cash Cost per pound of payable copper is consistent
with the widely accepted industry standard established by Wood Mackenzie and
is also known as the C1 cash cost.
AISC per pound of payable copper includes C1 Cash Costs plus agency fees,
expenditures on rehabilitation, capitalised stripping costs, exploration and
geology costs, corporate costs and sustaining capital expenditures, but
excludes one-off sustaining capital projects, such as the tailings dam
project.
Realised price per pound of payable copper is the value of the copper payable
included in the concentrate produced including the discounts and other
features governed by the offtake agreements of the Group and all discounts or
premiums provided in commodity hedge agreements with financial institutions if
any, expressed in USD per pound of payable copper and before silver credits,
TC/RCs, penalties freights and other cost items included in the sales invoices
and booked as revenues. Realised price is consistent with the widely accepted
industry standard definition.
6. Liquidity and Capital Resources
Atalaya monitors factors that could impact its liquidity as part of Atalaya's
overall capital management strategy. Factors that are monitored include, but
are not limited to, the market price of copper, foreign currency rates,
production levels, operating costs, capital and administrative costs.
The following is a summary of Atalaya's cash position and cash flows as at 31
March 2023 and 31 December 2022.
Liquidity information
(Euro 000's) 31 Mar 2023 31 Dec 2022
Unrestricted cash and cash equivalents at Group level 105,519 108,550
Unrestricted cash and cash equivalents at Operation level 13,496 17,567
Restricted cash and cash equivalents at Operation level 331 331
Consolidated cash and cash equivalents 119,346 126,448
Net cash position ((1)) 55,263 53,085
Working capital surplus 85,336 84,047
((1) ) Includes borrowings
Unrestricted cash and cash equivalents (which include cash at both Group level
and Operation level) as at 31 March 2023 decreased to €119.0 million from
€126.4 million at 31 December 2022. The decrease in cash balances is the
result of net cash flow generated in the period and drawdown of debt to fund
development of the 50 MW solar plant. Restricted cash of €0.3 million
represented the amount in escrow out of which the Company paid interest of
€9.6 million on 7 and 8 April 2022 (following the trial in February and
March 2022) and €1.1 million on 16 May 2022 to Astor under the Master
Agreement. Following the payment made in May 2022, the balance (less an amount
representing £280,000, or~€350k being the remaining potential liability to
Astor on costs) reverted to the Company and has been classified as
unrestricted cash.
As of 31 March 2023, Atalaya reported a working capital surplus of €85.3
million, compared with a working capital surplus of €84.0 million at 31
December 2022. The main liability of the working capital is trade payables
related to Proyecto Riotinto contractors and, to a lesser extent, short-term
loans following the drawdown of credit facilities during Q1 2023. The increase
in working capital resulted from lower payable balances.
Overview of the Group's cash flows
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Cash flows from operating activities 12,457 28,298
Cash flows used in investing activities (8,811) (7,552)
Cash flows used in financing activities (9,431) (2,378)
Net (decrease) / increase in cash and cash equivalents (5,785) 18,368
Net foreign exchange differences (1,222) 2,573
Total net cash flow for the period (7,007) 20,941
Three months cash flows review
Cash and cash equivalents were €119.3 million at 31 March 2023. This was due
to the net results of cash generated from operating activities amounting to
€12.5 million, the cash used in investing activities amounting to €8.8
million, the cash used from financing activities totalling €9.4 million and
net foreign exchange differences of negative €1.2 million.
Cash generated from operating activities before working capital changes was
€24.1 million. Trade receivables in the period decreased by €7.4 million,
inventory levels decreased by €3.9 million and trade payables decreased
by €21.0 million.
Investing activities during the quarter consumed €8.8 million, relating
mainly to the tailings dams project and continuous enhancements in the
processing systems of the plant.
Financing activities during the quarter used €9.4 million driven by
repayments of existing unsecured credit facilities.
Foreign exchange
Foreign exchange rate movements can have a significant effect on Atalaya's
operations, financial position and results. Atalaya's sales are denominated in
U.S. dollars ("USD"), while Atalaya's operating expenses, income taxes and
other expenses are mainly denominated in Euros ("EUR"), and to a much lesser
extent in British Pounds ("GBP").
Accordingly, fluctuations in the exchange rates can potentially impact the
results of operations and carrying value of assets and liabilities on the
balance sheet.
During the three months ended 31 March 2023, Atalaya recognised a foreign
exchange loss of €1.2 million (€2.6 million foreign exchange profit in Q1
2022). Foreign exchange losses mainly related to change in the period end EUR
and USD conversion rates, as all sales are cashed and generally held in USD.
The following table summarises the movement in key currencies versus the EUR:
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Average rates for the periods
GBP - EUR 0.8831 0.8459
USD - EUR 1.0730 1.1217
Spot rates as at
GBP - EUR 0.8792 0.8364
USD - EUR 1.0875 1.1101
7. Sustainability
Corporate Social Development
During the first quarter of this year, Atalaya and its wholly owned
subsidiary, Fundación Atalaya Riotinto, have been actively working on
developing programs to fulfil their social responsibilities. The Foundation
has completed the classroom sessions for the third iteration of its training
program, designed for local unemployed individuals. This program is supported
by Riotinto Mine's principal contractors and has now commenced its practical
portion, which includes four weeks of on-the-job training to equip
participants with the necessary skills for industrial work conditions. The
program will also provide hands-on experience in blasting and hauling
activities, which will result in formal qualifications for the participants,
thanks to the involvement of some of the company's primary contractors. The
previous program was successfully completed, and almost half of the
participants are now employed by different companies.
As part of the partnership agreement signed with all the nearby towns, the
Foundation has initiated discussions with neighbouring municipalities to
identify the fundamentals of individual projects for the year. The agreement
aims to provide funding for joint activities addressing social, environmental,
and infrastructure problems. In addition to this, the Foundation is also
providing funding for several projects, including supporting the local golf
club, a running team, and a poetry reading event. Furthermore, the Foundation
is sponsoring the development of a book that brings together numerous writings
by various specialists on historical copper mining.
Alongside these initiatives, the Atalaya Foundation is also supporting
Athenea, a local association devoted to assisting people with disabilities.
These efforts demonstrate our commitment to upholding our social
responsibilities and supporting the communities in which we operate.
Health and Safety
Regarding the results of the first quarter of 2023, the positive trend of the
first months of the year has continued and has improved compared to the
previous year, with a 3.89 in the Frequency Index and 0.03 for the Severity
Index, with two minor accidents recorded in this quarter.
Annual reports of technical specialties in occupational risk prevention, the
prevention plan, and the safety and health document accompanying the Work Plan
were prepared, as well as the planning of preventive activity for the year
2023.
Regarding Industrial Hygiene measurements, almost all of those planned for the
first quarter were carried out. As for the first intervention brigade,
training for the volunteers of the Brigade in the handling of the
High-Pressure equipment installed on a pick-up truck, which allows direct
support in fire extinguishing until the arrival of public fire services in
case of emergency, was conducted.
Environmental Management
During the first quarter of 2023, the Environmental Department continued its
execution of environmental monitoring actions for activity and natural
environment management. Here are the key points for the quarter:
· A total of 72.2 l/m2 of rainfall was recorded in Q1 2023, which
is approximately 47% less than the same period in the previous year. However,
the total rain collected for the hydrological year (October 2022 to September
2023) was 340.4 l/m2, an 8% increase compared to the previous hydrological
year (same period).
· On 3 March 2023, a request for modification of the current water
concession document was submitted. Additionally, Annual Mandatory Reports were
submitted to the Environmental Administration, including the Annual Waste
Report (Hazardous and Non-Hazardous), E-PRTR (pollutant emissions), and
protected species (Erica andevalensis and E. chiropterous) management reports.
· During the first quarter, the Unified Environmental Authorization
of Proyecto Valverde (Environmental Permit) was granted and received on March
14th, 2023.
· Additional measures in the action plan against dust continued to
be implemented, including intensifying periodic irrigation, implementing new
coordination measures, and carrying out exhaustive monitoring of the emissions
generated during operation.
· All regular internal controls of diffuse emissions into the
atmosphere were carried out, and the results of the controls remained within
the limit values set out in the regulations. The rest of the periodic and
mandatory controls were carried out without incidents, and several reports
were handed to the Administration bodies during the quarter.
· Daily environmental inspections were conducted, with a focus on
chemical storage and handling, housekeeping, waste management, uncontrolled
releases, and environmentally friendly practices carried out in the project by
ARM's and contractors' personnel. Additionally, dust control and drainage
system inspections were regularly performed, totalling 68 inspections in the
first quarter, including plant, mine area, and the contractors' camps.
8. Risk Factors
Due to the nature of Atalaya's business in the mining industry, the Group is
subject to various risks that could materially impact the future operating
results and could cause actual events to differ materially from those
described in forward-looking statements relating to Atalaya. Readers are
encouraged to read and consider the risk factors detailed in Atalaya's
audited, consolidated financial statements for the year ended 31 December
2022.
The Company continues to monitor the principal risks and uncertainties that
could materially impact the Company's results and operations, including the
areas of increasing uncertainty such as inflationary pressure on goods and
services required for the business and geopolitical developments worldwide.
9. Critical accounting policies, estimates, judgements, assumptions
and accounting changes
The preparation of Atalaya's Financial Statements in accordance with IFRS
requires management to make estimates, judgements and assumptions that affect
amounts reported in the Financial Statements and accompanying notes. There is
a full discussion and description of Atalaya's critical accounting policies in
the audited consolidated financial statements for the year ended 31 December
2022.
As at 31 March 2023, there are no significant changes in critical accounting
policies or estimates to those applied in 2022.
10. Other Information
Additional information about Atalaya Mining Plc. is available at www.sedar.com
(http://www.sedar.com) and at www.atalayamining.com
(http://www.atalayamining.com)
Unaudited Interim Condensed Consolidated Financial Statements on subsequent
pages.
By Order of the Board of Directors,
___________________________________
Roger Davey
Chairman
Nicosia, 15 May 2023
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 March 2023 and 2022
(Euro 000's) Note Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Revenue 4 91,171 86,251
Operating costs and mine site administrative expenses (62,927) (54,611)
Mine site depreciation and amortisation (8,762) (7,520)
Gross profit 19,482 24,120
Administration and other expenses (2,033) (3,583)
Share-based benefits 15 (76) (178)
Exploration expenses (1,533) (452)
Care and maintenance expenditure (295) (715)
Operating profit 15,545 19,192
Other income 98 -
Net foreign exchange (loss)/gain 3 (1,222) 2,573
Net finance costs 5 (844) (315)
Profit before tax 13,577 21,450
Tax 6 (2,473) (3,193)
Profit for the period 11,104 18,257
Profit for the period attributable to:
- Owners of the parent 7 11,369 18,824
- Non-controlling interests (265) (567)
11,104 18,257
Earnings per share from operations attributable to equity holders of the
parent during the period:
Basic earnings per share (EUR cents per share) 7 8.1 13.5
Fully diluted earnings per share (EUR cents per share) 7 7.9 13.2
Profit for the period 11,104 18,257
Other comprehensive income that will not be reclassified to profit or loss in
subsequent periods (net of tax):
Change in fair value of financial assets through other comprehensive income 6 -
'OCI'
Total comprehensive income for the period 11,110 18,257
Total comprehensive income for the period attributable to:
- Owners of the parent 7 11,375 18,824
- Non-controlling interests (265) (567)
11,110 18,257
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Financial Position
(All amounts in Euro thousands unless otherwise stated)
As at 31 March 2023 and 2022
(Euro 000's) Note 31 Mar 2023 31 Dec 2022
Assets Unaudited Audited
Non-current assets
Property, plant and equipment 9 357,604 354,908
Intangible assets 10 52,777 53,830
Trade and other receivables 12 18,456 16,362
Non-current financial assets 2.3 1,101 1,101
Deferred tax asset 7,074 7,293
437,012 433,494
Current assets
Inventories 11 34,911 38,841
Trade and other receivables 12 54,626 64,155
Tax refundable 100 100
Other financial assets 2.3 38 33
Cash and cash equivalents 13 119,346 126,448
209,021 229,577
Total assets 646,033 663,071
Equity and liabilities
Equity attributable to owners of the parent
Share capital 14 13,596 13,596
Share premium 14 319,411 319,411
Other reserves 15 69,811 69,805
Accumulated profit 81,852 70,483
484,670 473,295
Non-controlling interests (7,263) (6,998)
Total equity 477,407 466,297
Liabilities
Non-current liabilities
Trade and other payables 16 2,015 2,015
Provisions 17 24,756 24,083
Lease liabilities 19 4,253 4,378
Borrowings 18 13,917 20,768
44,941 51,244
Current liabilities
Trade and other payables 16 69,850 90,022
Lease liabilities 19 517 536
Borrowings 18 50,166 52,595
Current provisions 17 804 952
Current tax liabilities 2,348 1,425
123,685 145,530
Total liabilities 168,626 196,774
Total equity and liabilities 646,033 663,071
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 March 2023 and 2022
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total NCI Total equity
At 1 January 2023 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
Profit for the period - - - 11,369 11,369 (265) 11,104
Change in fair value of financial assets through OCI - - 6 - 6 - 6
Total comprehensive income - - 6 11,369 11,375 (265) 11,110
Transactions with owners
Issuance of share capital 14 - - - - - - -
Recognition of depletion factor 15 - - - - - - -
Recognition of share-based payments 15 - - - - - - -
Recognition of non-distributable reserve 15 - - - - - - -
Recognition of distributable reserve 15 - - - - - - -
At 31 March 2023 13,596 319,411 69,811 81,852 484,670 (7,263) 477,407
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total NCI Total equity
At 1 January 2022 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
Profit for the period - - - 18,824 18,824 (567) 18,257
Change in fair value of financial assets through OCI - - - - - - -
Total comprehensive income - - - 18,824 18,824 (567) 18,257
Transactions with owners
Issuance of share capital 14 147 3,458 - - 3,605 - 3,605
Recognition of share-based payments 15 - - 178 - 178 - 178
Recognition of depletion factor 15 - - 12,800 (12,800) - - -
Recognition of non-distributable reserve 15 - - 316 (316) - - -
Recognition of-distributable reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - - 16 16 - 16
At 31 March 2022 13,594 319,374 68,710 61,752 463,430 (5,476) 457,954
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total NCI Total equity
Audited
At 1 January 2022 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
Adjustment prior year - - - (53) (53) - (53)
Opening balance adjusted 13,447 315,916 52,690 58,701 440,754 (4,909) 435,845
Profit for the period - - - 33,155 33,155 (2,229) 30,926
Change in fair value of financial assets through OCI - - (6) - (6) - (6)
Total comprehensive income - - (6) 33,155 33,149 (2,229) 30,920
Transactions with owners
Issuance of share capital 14 149 3,495 - - 3,644 - 3,644
Recognition of depletion factor 15 - - 12,800 (12,800) - - -
Recognition of share-based payments 15 - - 1,279 - 1,279 - 1,279
Recognition of non-distributable reserve 15 - - 316 (316) - - -
Recognition of distributable reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - - (432) (432) 140 (292)
Dividends paid 8 - - - (5,099) (5,099) - (5,099)
At 31 December 2022 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
((1)) The share premium reserve is not available for distribution
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
(All amounts in Euro thousands unless otherwise stated)
For to the period ended 31 March 2023 and 2022
(Euro 000's) Note Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Cash flows from operating activities
Profit before tax 13,577 21,450
Adjustments for:
Depreciation of property, plant and equipment 9 7,678 6,489
Amortisation of intangibles 10 1,084 1,031
Recognition of share-based payments 15 76 178
Interest income 5 (226) (1)
Interest expense 5 510 238
Unwinding of discounting on mine rehabilitation provision 17 553 73
Other provisions 17 53 -
Net foreign exchange differences 3 1,222 (2,573)
Unrealised foreign exchange loss on financing activities (404) 44
Cash inflows from operating activities before working capital changes 24,123 26,929
Changes in working capital:
Inventories 11 3,930 (13,028)
Trade and other receivables 12 7,435 5,177
Trade and other payables 16 (20,994) 9,660
Provisions 17 (148) -
Cash flows from operations 14,346 28,738
Tax paid (1,467) (197)
Interest on leases liabilities 5 (7) (5)
Interest paid 5 (510) (238)
Net cash from operating activities 12,362 28,298
Cash flows from investing activities
Purchase of property, plant and equipment 9 (8,845) (7,251)
Purchase of intangible assets 10 (31) (302)
Payment of deferred consideration - -
Interest received 5 65 1
Net cash used in investing activities (8,811) (7,552)
Cash flows from financing activities
Lease payments 19 (151) (160)
Net repayments from borrowings (9,280) (5,822)
Proceeds from issuance of shares 14 - 3,604
Dividends - -
Net cash from financing activities (9,431) (2,378)
Net (decrease) / increase in cash and cash equivalents (5,880) 18,368
Net foreign exchange difference 3 (1,222) 2,573
Cash and cash equivalents:
At beginning of the period 126,448 107,517
At end of the period 119,346 128,458
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 31 March 2023 and 2022
1. Incorporation and Summary of Business
Country of incorporation
Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September
2004 as a private company with limited liability under the Companies Law, Cap.
113 and was converted to a public limited liability company on 26 January
2005. Its registered office is at 1 Lampousa Street, Nicosia, Cyprus.
The Company was listed on AIM of the London Stock Exchange ("AIM") in May 2005
under the symbol ATYM. The Company continued to be listed on AIM as at 31
March 2023.
On 20 February 2023, Atalaya announced that applied a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary
shares in the Company continue to trade on the AIM market of the London Stock
Exchange under the symbol "ATYM". Delisting from the TSX took effect at the
close of trading on 20 March 2023.
Additional information about Atalaya Mining Plc is available at
www.atalayamining.com (http://www.atalayamining.com) as per requirement of AIM
rule 26.
Change of name and share consolidation
Following the Company's Extraordinary General Meeting ("EGM") on 13 October
2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc
became effective on 21 October 2015. On the same day, the consolidation of
ordinary shares came into effect, whereby all shareholders received one new
ordinary share of nominal value Stg £0.075 for every 30 existing ordinary
shares of nominal value Stg £0.0025.
Principal activities
Atalaya is a European mining and development company. The strategy is to
evaluate and prioritise metal production opportunities in several
jurisdictions throughout the well-known belts of base and precious metal
mineralisation in Spain, elsewhere in Europe and Latin America.
The Group has interests in four mining projects: Proyecto Riotinto, Proyecto
Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group
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).
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. In Q3 2022, Atalaya increased its
ownership interest in POM to 99.9%, up from 51%, following completion of a
capital increase that will fund exploration activities.
2. Basis of Preparation and Accounting Policies
2.1 Basis of preparation
(a) Overview
The unaudited interim condensed consolidated financial statements for the
period ended 31 March 2023 have been prepared in accordance with International
Accounting Standards 34: Interim Financial Reporting. IFRS comprise the
standard issued by the International Accounting Standard Board ("IASB"), and
IFRS Interpretations Committee ("IFRICs") as issued by the IASB. Additionally,
the unaudited interim condensed consolidated financial statements have also
been prepared in accordance with the IFRS as adopted by the European Union
(EU), using the historical cost convention, except for the revaluation of
certain financial instruments that are measured at fair value at the end of
each reporting period, as explained below.
These unaudited interim condensed consolidated financial statements include
the financial statements of the Company and its subsidiary undertakings. They
have been prepared using accounting bases and policies consistent with those
used in the preparation of the consolidated financial statements of the
Company and the Group for the year ended 31 December 2022. These unaudited
interim condensed consolidated financial statements do not include all the
disclosures required for annual financial statements, and accordingly, should
be read in conjunction with the consolidated financial statements and other
information set out in the Group's annual report for the year ended 31
December 2022. The accounting policies are unchanged from those disclosed in
the annual consolidated financial statements for the year ended 31 December
2022.
(b) Going concern
These unaudited condensed interim consolidated financial statements have been
prepared based on accounting principles applicable to a going concern which
assumes that the Group 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 will generate
sufficient cash and cash equivalents to continue operating for the next twelve
months.
Management continues to monitor the impact of geopolitical developments.
Currently no significant impact is expected in the operations of the Group.
2.2 New standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the unaudited condensed
interim consolidated financial statements are consistent with those followed
in the preparation of the Group's annual consolidated financial statements for
the year ended 31 December 2022, except for the adoption of new standards
effective as of 1 January 2023. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
Several amendments and interpretations apply for the first time in 2023, but
do not have a material impact on the unaudited condensed interim consolidated
financial statements of the Group.
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new
accounting standard for insurance contracts covering recognition and
measurement, presentation and disclosure. IFRS 17 replaces IFRS 4 Insurance
Contracts that was issued in 2005. IFRS 17 applies to all types of insurance
contracts (i.e., life, non-life, direct insurance and re-insurance),
regardless of the type of entities that issue them, as well as to certain
guarantees and financial instruments with discretionary participation
features; a few scope exceptions will apply. The overall objective of IFRS 17
is to provide an accounting model for insurance contracts that is more useful
and consistent for insurers. In contrast to the requirements in IFRS 4, which
are largely based on grandfathering previous local accounting policies, IFRS
17 provides a comprehensive model for insurance contracts, covering all
relevant accounting aspects. IFRS 17 is based on a general model, supplemented
by:
• A specific adaptation for contracts with direct
participation features (the variable fee approach)
• A simplified approach (the premium allocation
approach) mainly for short-duration contracts
The amendments had no impact on the Group's unaudited condensed interim
consolidated financial statements.
Definition of Accounting Estimates - Amendments to IAS 8
The amendments to IAS 8 clarify the distinction between changes in accounting
estimates, and changes in accounting policies and the correction of errors.
They also clarify how entities use measurement techniques and inputs to
develop accounting estimates.
The amendments had no impact on the Group's unaudited condensed interim
consolidated financial statements.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality
Judgements provide 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 had no impact on the Group's unaudited condensed interim
consolidated financial statements. but are expected to affect the accounting
policy disclosures in the Group's annual consolidated financial statements.
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12
The amendments to IAS 12 Income Tax narrow the scope of the initial
recognition exception, so that it no longer applies to transactions that give
rise to equal taxable and deductible temporary differences such as leases and
decommissioning liabilities. The amendments had no impact on the Group's
unaudited condensed interim consolidated financial statements.
2.3 Fair value estimation
The fair values of the Group's financial assets and liabilities approximate
their carrying amounts at the reporting date.
The fair value of financial instruments traded in active markets, such as
publicly traded trading and other financial assets is based on quoted market
prices at the reporting date. The quoted market price used for financial
assets held by the Group is the current bid price. The appropriate quoted
market price for financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. The group uses a variety
of methods, such as estimated discounted cash flows, and makes assumptions
that are based on market conditions existing at the reporting date.
Fair value measurements recognised in the consolidated statement of financial
position
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, Grouped into Levels
1 to 3 based on the degree to which the fair value is observable.
· Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
· Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
Financial assets or liabilities Level 1 Level 2 Level 3 Total
(Euro 000's)
31 Mar 2023
Other financial assets
Financial assets at FV through OCI 38 - 1,101 1,139
Trade and other receivables - - - -
Receivables (subject to provisional pricing) - 15,637 - 15,637
Total 38 15,637 1,101 16,776
31 Dec 2022
Other financial assets
Financial assets at FV through OCI 38 - 1,101 1,139
Trade and other receivables - - - -
Receivables (subject to provisional pricing) - 11,669 - 11,669
Total 38 11,669 1,101 12,808
2.4 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 unaudited
condensed interim consolidated financial statements. Estimates and assumptions
are continually evaluated and are based on management's experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future periods.
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate
of the amount can be made. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time
is recognised as a finance cost.
A full analysis of critical accounting estimates and judgements is set out in
Note 3.3 of the 2022 audited consolidated financial statements.
3. Business and Geographical Segments
Business segments
The Group has only one distinct business segment, being that of mining
operations, which include mineral exploration and development.
Copper concentrates produced by the Group are sold to three off-takers as per
the relevant offtake agreement (Note 21.3). in addition, the Group has spot
agreements for the concentrates not committed to off-takers.
Geographical segments
(Euro 000's) Cyprus Spain Other Total
Three month period ended 31 Mar 2023
Revenue - from external customers 6,589 84,582 - 91,171
EBITDA 3,857 20,548 - 24,405
Depreciation/amortisation charge - (8,762) - (8,762)
Net foreign exchange (loss)/gain (286) (936) - (1,222)
Finance income 70 156 - 226
Finance cost - (1,070) - (1,070)
Profit before tax 3,641 9,936 - 13,577
Tax (769) (1,704) - (2,473)
Profit for the period 2,872 8,232 - 11,104
Total assets 113,123 529,417 3,493 646,033
Total liabilities (2,930) (165,696) - (168,626)
Depreciation of property, plant and equipment - 7,678 - 7,678
Amortisation of intangible assets - 1,084 - 1,084
Total net additions of non-current assets - 19,237 - 19,237
(Euro 000's) Cyprus Spain Other Total
Three month period ended 31 Mar 2022
Revenue - from external customers 11,830 74,421 - 86,251
EBITDA 8,967 17,752 (7) 26,712
Depreciation/amortisation charge - (7,520) - (7,520)
Net foreign exchange gain 1,170 1,403 - 2,573
Finance income - 1 - 1
Finance cost - (316) - (316)
Profit/(loss) before tax 10,137 11,320 (7) 21,450
Tax (1,024) (2,169) - (3,193)
Profit/(loss) for the period 9,113 9,151 (7) 18,257
Total assets 81,725 531,625 1,178 614,528
Total liabilities (2,617) (153,949) (8) (156,574)
Depreciation of property, plant and equipment - 6,489 - 6,489
Amortisation of intangible assets - 1,031 - 1,031
Total net additions of non-current assets - 18,876 - 18,876
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 an arm's length basis in a similar
manner to transactions with third parties. Accounting policies used by the
Group in different locations are the same as those contained in Note 2.
4. Revenues
Three months ended 31 March 2023 Three months ended
31 March 2022
(Euro 000's)
Revenue from contracts with customers ((1)) 88,313 81,769
Fair value gains relating to provisional pricing within sales ((2)) 2,858 4,482
Total revenue 91,171 86,251
All revenue from copper concentrate is recognised at a point in time when the
control of the product is transferred. Revenue from freight services is
recognised over time as the services are provided.
((1) ) Included within Q1 2023 revenue, there is a transaction
price of €2.4 million (€1.4 million in Q1 2022) 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 represents the change in fair
value of the embedded derivative arising on sales of concentrate.
5. Net Finance Costs
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Other interest (510) (238)
Interest on lease liabilities (7) (5)
Unwinding of discount on mine rehabilitation provision (Note 17) (553) (73)
Interest income 226 1
Total interest expense (844) (315)
6. Tax
The Group calculates the period income tax expense using the tax rate that
would be applicable to the expected total annual earnings. The major
components of income tax expense in the unaudited interim condensed
consolidated statement of profit or loss are:
Three months ended 31 March 2023 Three months ended 31 March 2022
(Euro 000's)
Income taxes
Current income tax expense 2,473 3,193
Income tax expense recognised in statement of profit and loss 2,473 3,193
7. Earnings per share
The calculation of the basic and fully diluted profit per share attributable
to the ordinary equity holders of the Company is based on the following data:
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Profit attributable to equity holders of the parent 11,369 18,824
Weighted number of ordinary shares for the purposes of basic earnings per 139,880 139,407
share (000's)
Basic earnings per share (EUR cents/share) 8.1 13.5
Weighted number of ordinary shares for the purposes of fully diluted earnings 143,423 142,163
per share (000's)
Fully diluted earnings per share (EUR cents/share) 7.9 13.2
As at 31 March 2023, there are nil warrants (Note 14) and 3,543,500 options
(Note 15) (31 March 2022: nil warrants and 2,341,000 options). Warrants and
options are included when calculating the weighted average number of shares
for the period.
8. Dividends paid
Cash dividends declared and paid during the period:
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Dividends declared and paid - -
Total cash dividends paid to ordinary shareholders - -
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
In March 2023, the Board of Directors proposed a final dividend for 2022 of
US$0.0385 per ordinary share, which was equivalent to approximately 3.15 pence
per share. Payment of the 2022 Final Dividend is subject to shareholder
approval at the Company's 2023 Annual General Meeting ("AGM"). Should it be
approved, the 2022 Final Dividend, together with the 2022 Interim Dividend
paid in September 2022, would result in a Full Year 2022 Dividend of US$0.0745
per ordinary share, which was equivalent to approximately 6.28 pence per
share. Further details on the timing of the potential payment of the 2022
Final Dividend will be provided ahead of the AGM.
9. Property, Plant and Equipment
(Euro 000's) Land and buildings Right-of-use assets ((4)) Plant and machinery Assets under construction ((1)) Deferred mining costs ((2)) Other assets ((3)) Total
Cost
At 1 January 2022 65,003 7,076 283,346 22,860 51,667 801 430,753
Additions 2,383 - 244 3,950 671 - 7,248
Reclassifications - - 2,376 (2,376) - - -
Increase in rehab. Provision 54 - - - - - 54
Advances 3 - - - - - 3
At 31 March 2022 67,443 7,076 285,966 24,434 52,338 801 438,058
Additions - - 1,018 45,523 20 - 46,561
Increase in rehab. Provision 1,673 - - - - - 1,673
Reclassifications 15,300 - 4,351 (19,722) - 71 -
Advances 100 - - - - - 100
Disposals (4,190) - - - - - (4,190)
At 31 December 2022 80,326 7,076 291,335 50,235 52,358 872 482,202
Additions - - 1,409 6,977 1,868 - 10,254
Increase in rehab. Provision 120 - - - - - 120
Reclassifications - - 1,543 (1,543) - - -
At 31 March 2023 80,446 7,076 294,287 55,669 54,226 872 492,576
Depreciation
At 1 January 2022 16,026 1,546 67,991 - 11,380 714 97,657
Charge for the period 1,001 140 4,466 - 875 7 6,489
At 31 March 2022 14,974 1,402 62,482 - 10,566 708 90,132
Charge for the period 3,427 312 16,725 - 2,666 18 23,148
At 31 December 2022 20,454 1,998 89,182 - 14,921 739 127,294
Charge for the period 984 603 5,277 - 816 (2) 7,678
At 31 March 2023 21,438 2,601 94,459 - 15,737 737 134,972
Net book value
At 31 March 2023 59,008 4,475 199,828 55,669 38,489 135 357,604
At 31 December 2022 59,872 5,078 202,153 50,235 37,437 133 354,908
( )
((1)) Assets under construction at 31 March 2023 were €55.7 million (Q1
2022: €24.1 million) which include sustaining capital expenditures and
tailings dams project.
((2)) Stripping costs
((3)) Includes motor vehicles, furniture, fixtures and office equipment which
are depreciated over 5-10 years.
((4)) See leases in Note 19.
The above fixed assets are mostly located in Spain.
10. Intangible Assets
(Euro 000's) Permits ((1)) Licences, R&D and software Total
Cost
At 1 January 2022 80,358 8,595 88,953
Additions 302 - 302
At 31 March 2022 80,660 8,595 89,255
Additions 595 47 642
At 31 December 2022 81,255 8,642 89,897
Additions 31 - 31
At 31 March 2023 81,286 8,642 89,928
Amortisation
At 1 January 2022 23,214 8,371 31,585
Charge for the period 1,015 16 1,031
At 31 March 2022 24,229 8,387 32,616
Charge for the period 3,398 53 3,451
At 31 December 2022 27,627 8,440 36,067
Charge for the period 1,066 18 1,084
At 31 March 2023 28,693 8,458 37,151
Net book value
At 31 March 2023 52,593 184 52,777
At 31 December 2022 53,628 202 53,830
(1) Permits include the mining right of Proyecto Touro, Masa
Valverde and Ossa Morena.
The ultimate recovery of balances carried forward in relation to areas of
interest or all such assets including intangibles is dependent on successful
development, and commercial exploitation, or alternatively the sale of the
respective areas.
The Group conducts impairment testing in case there is an indicator of
impairment. Atalaya assessed its assets concluding that there are no
indicators of impairment for either Proyecto Riotinto or any other projects or
operation as of 31 March 2023.
11. Inventories
(Euro 000's) 31 Mar 2023 31 Dec 2022
Finished products 2,080 4,547
Materials and supplies 29,720 31,330
Work in progress 3,111 2,964
Total inventories 34,911 38,841
As at 31 March 2023, copper concentrate produced and not sold amounted to
1,564 tonnes (31 Dec 2022: 3,529 tonnes). Inventory for copper concentrate is
valued at cost and was €2.1 million as at 31 March 2023 (31 Dec 2022: €4.5
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.
12. Trade and Other Receivables
(Euro 000's) 31 Mar 2023 31 Dec 2022
Non-current
Deposits 256 256
Loans 15,510 12,865
Other non-current receivables 2,690 3,241
18,456 16,362
Current
Trade receivables at fair value - subject to provisional pricing 14,632 14,757
Trade receivables from shareholders at fair value - subject to provisional 1,005 12,800
pricing (Note 21.3)
Other receivables from related parties at amortised cost (Note 21.3) 56 56
Deposits 37 37
VAT receivables 34,421 28,856
Tax advances 10 9
Prepayments 3,253 5,845
Other current assets 1,212 1,795
54,626 64,155
Allowance for expected credit losses - -
Total trade and other receivables 73,082 80,517
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 values of trade
and other receivables approximate to their book values.
Non-current deposits included €250k (€250k at 31 December 2022) as a
collateral for bank guarantees, which was recorded as restricted cash (or
deposit). Restricted cash related to the collateral was reclassified to
noncurrent 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 withdrawn bears interest at 2%.
13. Cash and cash equivalents
(Euro 000's) 31 Mar 2023 31 Dec 2022
Unrestricted cash and cash equivalents at Group level 105,519 108,550
Unrestricted cash and cash equivalents at Operation level 13,496 17,567
Restricted cash and cash equivalents at Operation level 331 331
Consolidated cash and cash equivalents 119,346 126,448
As at 31 March 2023, the Group's operating subsidiary held restricted cash of
€0.3 million of a provision for legal costs related to Astor (€0.3m at 31
December 2022).
Cash and cash equivalents denominated in the following currencies:
(Euro 000's) 31 Mar 2023 31 Dec 2022
Euro - functional and presentation currency 61,034 84,146
Great Britain Pound 198 895
United States Dollar 58,114 41,407
Consolidated cash and cash equivalents 119,346 126,448
14. Share Capital and Share Premium
Shares Share Capital Share premium Total
000's Stg£'000 Stg£'000 Stg£'000
Authorised
Ordinary shares of Stg £0.075 each* 200,000 15,000 - 15,000
Issued and fully paid Shares Share Capital Share premium Total
Issue Date Price (£) Details 000's €'000 €'000 €'000
31 December 2021/1 January 2022 138,236 13,447 315,916 329,363
22-Jan-22 1.44 Exercised share options ((a)) 314 28 512 540
22-Jan-22 2.015 Exercised share options ((a)) 321 29 746 775
22-Jan-22 2.045 Exercised share options ((a)) 400 36 941 977
22-Jan-22 1.475 Exercised share options ((a)) 451 42 754 796
22-Jan-22 3.09 Exercised share options ((a)) 135 12 505 517
31 March 2022 139,857 13,594 319,374 332,968
23-June-22 1.475 Exercised share options ((b)) 23 2 37 39
31 December 2022/ 31 March 2023 139,880 13,596 319,411 333,007
Authorised capital
The Company's authorised share capital is 200,000,000 ordinary shares of Stg
£0.075 each.
Issued capital
2023
No share issuance has taken place thus far in 2023.
The Company's share capital at 31 March 2023 is 139,879,209 ordinary shares of
Stg £0.075 each.
2022
(a) On 23 June 2022, the Company announced that it has issued 22,500
ordinary shares of 7.5p in the Company ("Option Shares") pursuant to an
exercise of share options by an employee.
(b) On 26 January 2022, the Company announced that is was notified that
PDMRs exercised a total of 1,350,000 options.
Warrants
As at 31 March 2023 and 2022, there were no warrants.
Options
In general terms, share 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.
Details of share options outstanding as at 31 March 2023:
Grant date Expiry date Exercise price £ Share options
29 May 2019 28-May-2024 2.015 666,500
30 June 2020 29 June 2030 1.475 516,000
24 June 2021 23 June 2031 3.090 1,016,000
26 January 2022 25 January 2032 4.160 120,000
22 June 2022 30 June 2027 3.575 1,225,000
Total 3,543,500
Weighted average Share options
exercise price £
At 1 January 2023 2.857 3,543,500
Granted options during the year - -
Options executed during the year - -
31 March 2023 2.857 3,543,500
15. Other Reserves
(Euro 000's) Share option Bonus share Depletion factor ((1)) FV reserve of financial assets at FVOCI ((2)) Non-Distributable reserve ((3)) Distributable reserve ((4)) Total
At 1 January 2022 9,086 208 24,978 (1,147) 8,000 11,565 52,690
Recognition of share-based payments 178 - - - - - 178
Recognition of depletion factor - - 12,800 - - - 12,800
Recognition of non-distributable reserve - - - - 316 - 316
Recognition of distributable reserve - - - - - 2,726 2,726
At 31 March 2022 9,264 208 37,778 (1,147) 8,316 14,291 68,710
Recognition of share-based payments 1,101 - - - - - 1,101
Change in fair value of financial assets at fair value through OCI - - - (6) - - (6)
At 31 December 2022 10,365 208 37,778 (1,153) 8,316 14,291 69,805
Change in fair value of financial assets at fair value through OCI - - - 6 - - 6
At 31 March 2023 10,365 208 37,778 (1,147) 8,316 14,291 69,811
((1) ) Depletion factor reserve
At 31 March 2023, the Group has recognised €nil (disposed €12.8 million at
31 March 2022) as a depletion factor reserve in order to fulfil with the
Spanish Corporate Tax Act.
((2) ) Fair value reserve of financial assets at FVOCI
The Group has elected to recognise changes in the fair value of certain
investments in equity securities in OCI, as explained in (1) above. These
changes are accumulated within the FVOCI reserve within equity. The Group
transfers amounts from this reserve to retained earnings when the relevant
equity securities are derecognised.
((3) ) Non-distributable reserve
To comply with Spanish Law, the Group needed to record a reserve when profit
generated equal to a 10% of profit/(loss) for the year until 20% of share
capital is reached.
((4) ) Distributable reserve
The Group reclassified 10% of the profit of 2021 to distributable reserves.
16. Trade and Other Payables
(Euro 000's) 31 Mar 2023 31 Dec 2022
Non-current
Other non-current payables 2,000 2,000
Government grant 15 15
2,015 2,015
Current
Trade payables 65,769 85,038
Accruals 3,460 3,322
VAT payables 222 259
Other 399 1,403
69,850 90,022
Other non-current payables are related with the acquisition of Atalaya Masa
Valverde, SLU formerly Cambridge Minería España, SL and Atalaya Ossa Morena
formerly Rio Narcea Nickel, SL.
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.
Trade payables are non-interest-bearing and are normally settled on 60-day
terms.
17. Provisions
(Euro 000's) Other provisions Legal costs Rehabilitation costs Total costs
At 1 January 2022 - 279 26,299 26,578
Revision of provision - - 54 54
Finance cost - - 73 73
At 31 March 2022 - 279 26,426 26,705
Additions - 30 1,033 1,063
Reclassification 1,435 - - 1,435
Used of provision - (10) (135) (145)
Reversal of provision - (73) (3,497) (3,570)
Finance cost - - (453) (453)
At 31 December 2022 1,435 226 23,374 25,035
Used of provision - - (148) (148)
Reversal of provision - - 120 120
Finance cost - - 553 553
At 31 March 2023 1,435 226 23,899 25,560
(Euro 000's) 31 Mar 2023 31 Dec 2022
Non-current 24,756 24,083
Current 804 952
Total 25,560 25,035
Rehabilitation provision
Rehabilitation provision represents the accrued cost required to provide
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 March 2023 was 3.41% (31 Dec 2022: 3.41%), which is the
15-year Spain Government Bond rate for 2022. An inflation rate of 1%-5.70% is
applied on annual basis.
Legal provision
The Group has been named a defendant in several legal actions in Spain, the
outcome of which is not determinable as at 31 March 2023. Management has
individually reviewed each case and made a provision of 226k (€226k million
at 31 Dec 2022) for these claims, which has been reflected in these unaudited
condensed interim consolidated financial statements.
18. Borrowings
(Euro 000's) 31 Mar 2023 31 Dec 2022
Non-current borrowings
Credit facilities 13,917 20,768
13,917 20,768
Current borrowings
Credit facilities 50,166 52,595
50,166 52,595
The Group has credit approval for facilities totalling €114.0 million.
During 2023, Atalaya drew down on its existing credit facilities to finance
the construction of the 50MW solar plant. Interest rates of existing credit
facilities, including facilities used to pay the Deferred Consideration, range
from 1.10% to 2.45% and the average interest rate on all facilities used and
unused is 1.71%. Euribor is referred to by some of these facilities. The
maximum term of the facilities is six years. All borrowings are unsecured.
At 31 March 2023, the Group had used €64.1 million of its facilities and had
undrawn facilities of €49.9 million.
19. Lease liabilities
(Euro 000's) 31 Mar 2023 31 Dec 2022
Non-current
Lease liabilities 4,253 4,378
4,253 4,378
Current
Lease liabilities 517 536
517 536
Finance leases
The Group entered into lease arrangements for the renting of land and
building, laboratory equipment and vehicles which are subject to the adoption
of all requirements of IFRS 16 Leases. 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. Depreciation
expense regarding leases amount to €0.6 million (Q1 2022: €0.1 million)
for the three month period ended 31 March 2023. 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 March
2023, the remaining term of this lease is ten years.
The duration of 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 March 2023, the remaining term of laboratory equipment lease is
two months.
(Euro 000's) 31 Mar 2023 31 Dec 2022
Minimum lease payments due:
- Within one year 517 536
- Two to five years 1,950 1,957
- Over five years 2,303 2,421
Present value of minimum lease payments due 4,770 4,914
(Euro 000's) Lease liabilities
At 1 January 2023 4,914
Interest expense 7
Lease payments (151)
At 31 March 2023 4,770
At 31 March 2023
Non-current liabilities 4,253
Current liabilities 517
4,770
20. Acquisition, Incorporation and Disposal of Subsidiaries
2023
Acquisition and incorporation of subsidiaries
There were no acquisition or incorporation of subsidiaries during the three
months period ended 31 March 2023.
Disposals of subsidiaries
There were no disposals of subsidiaries during the three months period ended
31 March 2023.
Wind-up of subsidiaries
There were no operations wound up during the three months period ended 31
March 2022.
2022
Acquisition and incorporation of subsidiaries
On 31 January 2022, Atalaya established a new entity, Iberian Polimetal S.L.U.
Disposals of subsidiaries
There were no disposals of subsidiaries during the three months period ended
31 March 2022.
Wind-up of subsidiaries
On 4 January 2022, the subsidiary EMED Mining Spain, S.L. was wound up.
21. Related Party Transactions
The following transactions were carried out with related parties:
21.1 Compensation of key management personnel
The total remuneration and fees of Directors (including Executive Directors)
and other key management personnel was as follows:
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Directors' remuneration and fees 360 258
Share option-based benefits and other benefits to directors 20 64
Key management personnel fees 204 141
Share option-based and other benefits to key management personnel 20 61
604 524
( )
21.2 Share-based benefits
The directors and key management personnel have not been granted any options
during the three-month period ended 31 March 2023 (Q1 2022: nil).
21.3 Transactions with related parties/shareholders
i) Transaction with shareholders
(Euro 000's) Three month period ended 31 Mar 2023 Three month period ended 31 Mar 2022
Trafigura- Revenue from contracts 12,294 8,218
Freight services - -
12,294 8,218
Gain relating provisional pricing within sales 2,103 1,395
Trafigura - Total revenue from contracts 14,397 9,613
ii) Period-end balances with related parties
(Euro 000's) 31 Mar 2023 31 Dec 2022
Receivables from related parties:
Recursos Cuenca Minera S.L. 56 56
Total (Note 12) 56 56
The above balances bear no interest and are repayable on demand.
iii) Period-end balances with shareholders
(Euro 000's) 31 Mar 2023 31 Dec 2022
Trafigura - Debtor balance - subject to provisional pricing 1,005 12,800
Total (Note 12) 1,005 12,800
The above debtor balance arising from sales of goods and other balances bear
no interest and is repayable on demand.
22. Contingent Liabilities
Legal 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.
23. 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.
24. Significant Events
The events in Ukraine since 24 February 2022 and the monetary policy being
implemented by major central banks are impacting the global economy but cannot
yet be predicted in full. The main concern now is the volatility in prices for
energy, fuel and other raw materials and rising inflation, which may affect
household incomes and business operating costs. The financial effect on the
global economy and overall business activities cannot be estimated with
reasonable certainty at this stage.
· On 12 January 2023, the Company was notified that Allianz Global
Investors GmbH, shareholder of the Company, decreased its voting rights from
4.93% to 3.98%.
· On 20 February 2023, Atalaya announced a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX") which was
effective from the closing of trading on 20 March 2023. Ordinary shares in the
Company continue to trade on the AIM market of the London Stock Exchange under
the symbol "ATYM".
Delisting from the TSX took effect at the close of trading on 20 March 2023.
· On 23 February 2023, Atalaya announced the results from a new
preliminary economic assessment ("PEA") for the Cerro Colorado, San Dionisio
and San Antonio deposits at its Proyecto Riotinto operation in Spain.
· On 28 March 2023, Atalaya announced that Proyecto Masa Valverde
was granted the Unified Environmental Authorisation (or in Spanish,
Autorización Ambiental Unificada ("AAU")) by the Junta de Andalucía.
25. Events After the Reporting Period
No significant events occurred after the reporting period.
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