REG - Atalaya Mining PLC - Q1 2024 Operations Update

Atalaya MiningAnnouncement

11/04/2024 07:00

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RNS Number : 1132K  Atalaya Mining PLC  11 April 2024

 

11 April 2024

Atalaya Mining Plc.

("Atalaya" or "the Company")

Q1 2024 Operations Update

Project activities continue to advance as copper fundamentals strengthen

 

Atalaya Mining Plc (AIM: ATYM) is pleased to announce its operations update
for the first quarter of 2024 ("Q1 2024" or the "Period").

Proyecto Riotinto Operating Highlights

                             Q1                 Q4      Full Year
                             2024((1))  2023    2023    2024 Guidance
 Ore mined         M tonnes  3.7        3.4     3.7     ~19
 Waste mined((2))  M tonnes  5.5        6.5     7.4     ~25
 Ore milled        M tonnes  3.7        3.7     4.1     15.3 - 15.8
 Cu grade          %         0.34       0.38    0.36    0.39 - 0.41
 Cu recovery       %         84.74      86.88   85.47   84 - 86
 Cu production     tonnes    10,666     12,139  12,775  51,000 - 53,000

(1)   Figures for Q1 2024 are preliminary and final figures will be released
with Q1 2024 financial results.

(2)   Represents the Cerro Colorado pit only.

Mining

Ore mined was 3.7 million tonnes in Q1 2024 (Q1 2023: 3.4 million tonnes),
compared with 3.7 million tonnes in Q4 2023.

Waste mined was 5.5 million tonnes in Q1 2024 (Q1 2023: 6.5 million tonnes),
compared with 7.4 million tonnes in Q4 2023. Separately, waste stripping
activities advanced at the San Dionisio area.

Processing

The plant processed ore of 3.7 million tonnes during Q1 2024 (Q1 2023: 3.7
million tonnes), compared with 4.1 million tonnes in Q4 2023. Throughput was
impacted by the scheduling of two plant shutdowns, one for maintenance and the
other for connecting the 50 MW solar plant to the substation.

Copper grade was 0.34% in Q1 2024 (Q1 2023: 0.38%), compared with 0.36% in Q4
2023. The lower copper grade in Q1 2024 was mainly the result of pit
sequencing and also due to rainfall which prevented access to higher grade
areas of the Cerro Colorado pit.

Copper recovery was 84.74% in Q1 2024 (Q1 2023: 86.88%), compared with 85.47%
in Q4 2023, due to lower grades being processed.

Production

Copper production was 10,666 tonnes in Q1 2024 (Q1 2023: 12,139 tonnes),
compared with 12,775 tonnes in Q4 2023. Lower production in Q1 2024 was mainly
the result of lower grades and recoveries.

On-site copper concentrate inventories at the end of Q1 2024 were
approximately 8,283 tonnes.

Copper contained in concentrates sold was 10,286 tonnes in Q1 2024 (Q1 2023:
12,501 tonnes).

Select Financial Highlights

Realised Copper Price

The average realised copper price (excluding QPs closed during the Period) was
$3.89/lb in Q1 2024 (Q1 2023: $4.00/lb), compared with $3.78/lb in Q4 2023.
The average spot copper price was $3.83/lb in Q1 2024.

Provisional Revenue Adjustments

For Q1 2024, settlement adjustments (for QPs closed during the Period) and
fair value adjustments (for open QPs based on copper forward curve prices as
at 31 March 2024) were negative €3.8 million.

Balance Sheet

The Company's balance sheet remains strong with consolidated cash and cash
equivalents of €86.2 million as at 31 March 2024.

Net of current and non-current borrowings of €50.1 million, net cash was
€36.1 million as at 31 March 2024, compared with €54.3 million as at 31
December 2023 with the decrease in cash being the result of lower copper sales
and higher investment in the Company's capital projects.

Outlook for 2024

Full year guidance is unchanged from the outlook announced as part of the
Company's 2023 Annual Results. This includes copper production of 51,000 -
53,000 tonnes (weighted towards H2 2024) and cash costs and AISC of $2.80 -
3.00/lb and  $3.00 - 3.20/lb copper payable, respectively.

Asset Portfolio Update

Proyecto Riotinto

In 2023, the Company was granted a substantial modification to the existing
Unified Environmental Authorisation (or in Spanish, Autorización Ambiental
Unificada ("AAU")) for Proyecto Riotinto by the Junta de Andalucía. The AAU
allows for the expansion of tailings capacity and the mine footprint at
Riotinto and represents an important step towards developing regional deposits
such as San Dionisio and San Antonio.

The Company is advancing the permitting process associated with the San
Dionisio final pit, which represents a key component of the integrated mine
plan outlined in the 2023 Riotinto PEA. Waste stripping is underway in order
to prepare the area for future mining phases, with 4.6 million tonnes of
waste mined in Q1 2024. Additional mining equipment is expected to arrive on
site in Q2 2024.

At San Antonio, preparations are underway to begin an infill and step-out
drilling programme.

E-LIX Phase I Plant

Final construction activities are underway at the E-LIX Phase I plant.
Following the production of initial copper cathodes in December 2023,
commissioning and ramp-up continues, with first zinc recovered in recent
weeks.

Once fully 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.

50 MW Solar Plant

Construction activities continue at the 50 MW solar plant at Riotinto, with
initial power generation expected in Q2 2024.

Once fully operational, the 50 MW solar plant is expected to provide
approximately 22% of Riotinto's current electricity needs. Together, the 50 MW
solar plant and 10-year PPA will provide over 50% of the Company's current
electricity requirements at a rate well below historical prices in Spain.

Riotinto District - Proyecto Masa Valverde ("PMV")

In 2023, the Company was granted the AAU and exploitation permit for PMV. As
a result, various workstreams continue including geotechnical and
sterilisation drilling to support design work associated with a future ramp
and ventilation shaft.

Two core rigs are active and focused on step-out drilling at the Mojarra Trend
and the Masa Valverde deposit.

Proyecto Touro

Atalaya remains fully committed to the development of the Touro copper
project, which has the potential to provide substantial benefits to Galicia
and also support the European Union's critical raw materials mandate.

Touro has the potential to become a new source of copper production
for Europe. As such, the project could also be granted "Strategic Project"
status by the EU, which can be awarded to projects "based on their
contribution to the security of supply of strategic raw materials, their
technical feasibility, sustainability and social standards", as part of the
Critical Raw Materials Act. Copper was added to the list of "Strategic Raw
Materials" owing to its importance for strategic sectors and technologies and
due to the supply-demand imbalance that is expected in the near future.

Running parallel with the ongoing Touro permitting process, the Company
continues to focus on numerous initiatives related to the social licence,
including engaging with the many stakeholders in the region to provide
detailed information on the new and 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 successfully restore the water quality of the 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 field-work carried out by Atalaya has resulted in an
immediate and visible improvement of the water systems surrounding the
project, with the progress being recognised by local stakeholders and the
media.

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 and the La Hinchona copper-gold project, both in the
central part of the district.

Proyecto Riotinto East

Preparation work is underway that would allow the Company to begin drilling
priority anomalies identified via SkyTEM and AGG surveys.

Corporate Activities Update

Intention to Move to the Main Market

In November 2023, the Company announced its intention to apply for its
ordinary shares to be admitted to the premium listing segment of the Official
List maintained by the Financial Conduct Authority ("FCA") and to trading on
the London Stock Exchange plc's main market for listed securities (together,
"Admission").

On 21 December 2023, the Company announced the application process was
ongoing, outlined that Admission remained subject to a number of conditions
including the approval by the FCA of a prospectus and noted that Admission
would not take place until after the announcement of the Company's 2023 Annual
Results.

The Company continues to progress the application process and will provide
further update on the potential timing of Admission in due course.

Re-domiciliation

In November 2023, Atalaya announced its intention to re-domicile the Company
by transferring its registered office from the Republic of Cyprus to the
Kingdom of Spain and convened an Extraordinary General Meeting ("EGM") to
seek approval for various related matters. On 12 December 2023, the Company
held the EGM, at which all resolutions were approved by the Company's
shareholders.

The re-domiciliation procedure is ongoing. Following a new law implementing
Directive EU 2019/2121 (in respect of cross-border reorganisations) entering
into force in Cyprus on 15 March 2024, the Company is assessing the potential
impacts of the new law on the re-domiciliation process. As a result, there may
be a delay in the completion of the re-domiciliation and a further update will
be provided to the market in due course.

Alberto Lavandeira, CEO, commented:

"We have been active across our asset portfolio since the start of the year.
Although production was lower than recent quarters, we expect improvement in
grade and recoveries throughout the year and reiterate our full year
production guidance.

At San Dionisio, waste stripping activity is making good progress and at San
Antonio we are preparing plans for a drilling programme. Both deposits are
expected to provide Riotinto with higher grade material in the coming years.
We interrupted our operations to connect our 50 MW solar plant to the
substation, which will allow for power generation to begin in Q2 2024.  At
E-LIX, final construction and commissioning works continue and first zinc was
recovered from our concentrates. At our Touro project, local engagement
continues and the permitting process is advancing.

Finally, we are pleased to see the strengthening in copper market
fundamentals. Ongoing supply challenges and growing demand from renewables and
new technologies have supported the copper price in recent weeks. We continue
to believe this is the right time to invest in our growth pipeline in order to
capitalise on the expected copper deficits in the coming years."

 

This announcement contains information which, prior to its publication
constituted inside information for the purposes of Article 7 of Regulation
(EU) No 596/2014.

Contacts:

 SEC Newgate UK             Elisabeth Cowell / Tom Carnegie / Matthew Elliott  +44 20 3757 6882
 Atalaya Mining             Michael Rechsteiner                                +34 959 59 28 50
 Canaccord Genuity          Henry Fitzgerald-O'Connor / James Asensio          +44 20 7523 8000

 (NOMAD and Joint Broker)
 BMO Capital Markets        Tom Rider / Andrew Cameron                         +44 20 7236 1010

 (Joint Broker)
 Peel Hunt LLP              Ross Allister / David McKeown                      +44 20 7418 8900

 (Joint Broker)

 

About Atalaya Mining Plc

Atalaya is an AIM-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)

 

 

 

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