REG - Atalaya Mining PLC - Q2 and H1 2022 Financial Results
10/08/2022 07:00
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RNS Number : 4786V Atalaya Mining PLC 10 August 2022
10 August 2022
Atalaya Mining Plc.
("Atalaya" and/or the "Company")
Q2 and H1 2022 Financial Results
Continued balance sheet strength supports ongoing investment programme and
interim dividend
Atalaya Mining Plc (AIM: ATYM; TSX: AYM) is pleased to announce its quarterly
and six-monthly results for the period ended 30 June 2022 ("Q2 2022" and "H1
2022" respectively) together with its Unaudited Interim Condensed Consolidated
Financial Statements.
The Unaudited Interim Condensed Consolidated Financial Statements for the
period ended 30 June 2022 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) .
Highlights
· EBITDA of €14.7 million for Q2 2022 and €41.4 million for H1
2022, despite high input costs and negative provisional pricing adjustments
· Significant investment in projects that are expected to reduce cash
costs and carbon emissions, including the 50 MW solar plant and E-LIX Phase I
plant
· Continued balance sheet strength, including net cash of €67.6
million, supporting ongoing investment programme
· Interim dividend of US$0.036 per ordinary share declared
Q2 and H1 2022 Financial Results Summary
Period ended 30 June Q2 2022 Q2 2021 H1 2022 H1 2021
Revenues from operations €k 93,418 99,724 179,669 197,104
Operating costs €k (78,749) (47,755) (138,288) (97,692)
EBITDA €k 14,669 51,969 41,381 99,412
Profit for the period €k 11,849 32,291 30,106 65,993
Basic earnings per share € cents/share 8.6 23.3 22.1 48.1
Cash flows from operating activities €k (6,916) 33,296 21,382 73,030
Cash flows used in investing activities ((1)) €k (19,771) (6,923) (27,323) (70,853)
Cash flows from financing activities €k 17,841 1,893 15,463 54,841
Net Cash position ((2)) €k 67,554 37,777 67,554 37,777
Working capital surplus €k 129,280 90,961 129,280 90,961
Average realised copper price US$/lb 4.32 4.27 4.39 3.92
Cu concentrate produced (tonnes) 63,027 74,495 117,235 141,755
Cu production (tonnes) 13,386 14,353 24,847 28,332
Cash costs US$/lb payable 3.12 2.26 3.22 2.15
All-In Sustaining Cost US$/lb payable 3.33 2.52 3.45 2.49
((1) ) H1 2021 includes €53 million early payment of the Deferred
Consideration to Astor.
((2) ) Includes restricted cash of €350k and bank borrowings of
€59.6m at 30 June 2022 and bank borrowings of €55.0m at 30 June 2021
Alberto Lavandeira, CEO commented:
"Today we are announced our financial results for H1 2022, which was a period
that included many macroeconomic challenges. Positively, the plant
demonstrated strong performance in Q2, processing around 4.0 million tonnes of
ore and yielding good recoveries despite lower grades. We expect strong
throughput to continue for the remainder of the year.
However, as a result of the ongoing conflict in Ukraine and the inflationary
environment globally, our costs have increased materially since last year and
it is likely that current conditions will persist for some time. High
electricity prices are having a notable adverse impact, along with consumables
linked to the price of energy, such as explosives and diesel.
Thankfully, we have preserved a strong balance sheet and continue to make
meaningful investments in the sustainability and growth of our business. In
H1, we progressed development of our 50 MW solar plant, which will deliver
stable and low-cost electricity from mid-2023. We are also advancing
construction of our E-LIX Phase I plant, which is expected to reduce costs and
help to unlock value from our polymetallic resources in the Iberian Pyrite
Belt. Further, we are conducting exploration and progressing the permitting
process at several projects and deposits, including Proyecto Masa Valverde,
San Dionisio and Proyecto Touro, which we believe will allow Atalaya to grow
its production, reduce unit costs and become a multi-asset copper producer."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live
presentation relating to the Q2 and H1 2022 results via the Investor Meet
Company platform at 1:00pm BST today.
To register, please visit the following link and click "Add to Meet" Atalaya
via:
https://www.investormeetcompany.com/atalaya-mining-plc/register-investor
(https://www.investormeetcompany.com/atalaya-mining-plc/register-investor)
Management will also answer questions that have been submitted via the
Investor Meet Company dashboard.
Q2 and H1 2022 Operating Results Summary
Units expressed in accordance with the international system of units (SI) Unit Q2 2022 Q2 2021 H1 2022 H1 2021
Ore mined Mt 3.6 3.3 7.5 6.6
Waste mined Mt 6.7 8.0 13.6 15.5
Ore processed Mt 4.0 4.0 7.5 8.0
Copper ore grade % 0.39 0.42 0.38 0.42
Copper concentrate grade % 21.23 19.27 21.19 19.99
Copper recovery rate % 86.44 84.83 86.26 84.85
Copper concentrate tonnes 63,027 74,495 117,235 141,755
Copper contained in concentrate tonnes 13,386 14,353 24,847 28,232
Payable copper contained in concentrate tonnes 12,756 13,608 23,674 26,914
Mining
Ore mined was 3.6 million tonnes in Q2 2022 (Q2 2021: 3.3 million tonnes) and
7.5 million tonnes in H1 2022 (H1 2021: 6.6 million tonnes).
Waste mined was 6.7 million tonnes in Q2 2022 (Q2 2021: 8.0 million tonnes)
and 13.6 million tonnes in H1 2022 (H1 2021: 15.5 million tonnes). Waste
stripping in H1 2022 was higher than budget as waste mining was prioritised
during the temporary plant maintenance stoppage in Q1 2022.
Processing
The plant processed 4.0 million tonnes of ore during Q2 2022 (Q2 2021: 4.0
million tonnes), consistent with the plant's ability to operate above its 15
million tonne per annum nameplate capacity. Throughput was 7.5 million tonnes
in H1 2022 (H1 2021: 8.0 million tonnes) as a result of the Q1 2022 transport
sector strike and maintenance stoppage.
Copper grade was 0.39% in Q2 2022 (Q2 2021: 0.42%) and 0.38% in H1 2022 (H1
2021: 0.42%). Lower grades so far in 2022 are the result of blending with
lower grade stockpiles due to pit sequencing but are expected to improve in H2
2022.
Copper recoveries were strong despite lower grades, with Q2 2022 at 86.44% (Q2
2021: 84.83%) and 86.26% in H1 2022 (H1 2021: 84.85%) as a result of
continuous improvements made at the plant.
Production
Copper production was 13,386 tonnes in Q2 2022 (Q2 2021: 14,353 tonnes) and
24,847 tonnes in H1 2022 (H1 2021: 28,232 tonnes). Lower production was due to
lower grades (pit sequencing) and lower throughput (Q1 2022 plant stoppage),
partially offset by higher recoveries.
Q2 and H1 2022 Financial Results Highlights
Income Statement
Revenues were €93.4 million in Q2 2022 (Q2 2021: €99.7 million) and
€179.7 million in H1 2022 (H1 2021: €197.1 million). Lower revenues were
the result of lower concentrate sales volumes and negative provisional pricing
adjustments in 2022, compared with positive adjustments in the comparative
2021 periods.
Operating costs were €78.7 million in Q2 2022 (Q2 2021: €47.8 million) and
€138.3 million (H1 2021: €97.7 million) as a result of significant
increases in key input costs such as electricity, diesel, explosives, steel
and lime.
EBITDA was €14.7 million in Q2 2022 (Q2 2021: €52.0 million) and €41.4
million in H1 2022 (H1 2021: €99.4 million). The decrease in EBITDA was
driven by the combination of lower revenues and higher operating costs
compared with the periods in 2021.
Profit after tax was €11.8 million in Q2 2022 (Q2 2021: €32.3 million) or
8.6 cents basic earnings per share (Q2 2021: 23.3 cents) and €30.1 million
in H1 2022 (H1 2021: €66.0 million) or 22.1 cents basic earnings per share
(Q2 2021: 48.1 cents).
Cash costs were $3.12/lb payable copper in Q2 2022 (Q2 2021: $2.26) and
$3.22/lb in H1 2022 (H1 2021: $2.15/lb), with the increase due to lower
production volumes and higher costs associated with electricity and other
supplies, partially offset by the weaker Euro.
AISC were $3.33/lb payable copper in Q2 2022 (Q2 2021: $2.52/lb) and $3.45/lb
in H1 2022 (H1 2021: $2.49/lb). The increase in AISC in 2022 was driven by the
same factors that increased cash costs. AISC excludes one-off investments in
the tailings dam, consistent with prior reporting.
Cash Flow Statement
Cash flows from operating activities before changes in working capital were
€14.3 million in Q2 2022 (Q2 2021: €50.1 million) and negative €6.9
million after working capital changes (Q2 2021: €33.3 million). Working
capital movement is mainly related to changes in account receivables and
payables owed to timing differences. For H1 2022, cash flows from operating
activities before changes in working capital were €41.2 million (H1 2021:
€106.1) and €21.4 million after working capital changes (H1 2021: €73.0
million).
Cash flows used in investing activities were €19.8 million in Q2 2022 (Q2
2021: €6.9 million) and €27.3 million in H1 2022 (H1 2021: €70.9
million). Major investments in H1 2022 included €11.7 million for the 50 MW
solar plant (H1 2021: nil), €2.9 million in sustaining capex (H1 2021:
€3.4 million) and €6.4 million to increase the tailings dam (H1 2021:
€6.8 million). Cash flows from investing activities in the H1 2021 period
included the early payment of the deferred consideration to Astor.
Cash flows from financing activities were €17.8 million in Q2 2022 (Q2 2021:
€1.9 million) and €15.5 million in H1 2022 (H1 2021: €54.8 million).
Unsecured debt facilities were drawn in H1 2022 in order to finance the 50 MW
solar plant, while in H1 2021, unsecured debt facilities were drawn to fund
the payment of deferred consideration to Astor.
Balance Sheet
Consolidated cash and cash equivalents were €127.1 million at 30 June 2022
(31 December 2021: €107.5 million).
Net of current and non-current borrowings of €59.6 million, net cash was
€67.6 million as at 30 June 2022, compared to €86.8 million as at 31 March
2022 and €60.1 million as at 31 December 2021.
Inventories of concentrate valued at cost were €8.4 million at 30 June 2022
(31 December 2021: €5.2 million). As at 30 June 2022, total working capital
was €129.3 million, compared to €120.1 million as at 31 March 2022 and
€102.4 million as at 31 December 2021.
Update on Key Input Costs
Electricity Market in Spain
As a result of the continued conflict in Ukraine and its impact on energy
markets, especially in Europe, electricity prices in Spain were significantly
higher than historical levels during Q2 and H1 2022. Market prices reached
unprecedented levels of over €500/MWh in March 2022, before moderating and
averaging approximately €190/MWh in April and May 2022. In mid-June 2022,
the legislated gas price cap for Spain and Portugal took effect. The cap had a
positive impact on electricity prices, with rates averaging approximately
€145/MWh since the implementation of the new pricing mechanism.
Market electricity prices averaged approximately €180/MWh in Q2 2022 and
approximately €205/MWh in H1 2022, a sharp increase over the H1 2021 average
of around €60/MWh. An increase or decrease in realised electricity prices of
€100/MWh results in an increase or decrease, respectively, to the Company's
annual operating costs of around €37 million.
Cost of Key Consumables
In addition to elevated electricity prices, the Company continues to
experience material cost inflation in many key consumables. These include
explosives, diesel, tyres, grinding media and lime for which prices have
increased 40 - 90% from levels observed in late 2021 for several of these cost
inputs. The Company continues to pursue cost savings and efficiency
initiatives, however, prices of these inputs are heavily linked to energy
costs and CO(2), which remain elevated globally.
50 MW Solar Plant
Development progress continues at Atalaya's 50 MW solar plant, which will
become a reliable source of low cost and carbon-free energy for Proyecto
Riotinto. Equipment orders have been placed and deliveries of key materials
are expected to arrive on site during Q4 2022. Planned start-up of the solar
plant continues to be Q2 2023. In H1 2022, the Company incurred capex of
€11.7 million related to the 50 MW solar plant.
Combined, the 50 MW solar plant and the previously announced long-term power
purchase agreement ("PPA") will guarantee that over 50% of the electricity
requirements at Proyecto Riotinto are sourced at competitive terms. Once the
50 MW solar plant is operational and the new long-term PPA is in effect, the
annual impact on cash costs would be a reduction of around $0.35/lb copper
payable compared to a scenario where actual H1 2022 electricity prices were
realised for a full year.
E-LIX Phase I Plant
Development progress continues at Atalaya's E-LIX Phase I plant, which will
produce high value copper and zinc metals from complex sulphide concentrates
produced from material sourced within the Riotinto District. The E-LIX System
is expected to provide numerous benefits including higher metal recoveries,
lower transportation and concentrate treatment charges and reduced carbon
emissions. The Company expects the plant to be ready for commissioning by the
end of 2022.
Atalaya has placed all equipment orders and has started initial construction
activities on the site. In H1 2022, the Company incurred capex of €5.8
million related to the E-LIX Phase I plant, of which €5.3 million are long
term loans to Lain Technologies.
Outlook for 2022
Production
As announced on 14 July 2022, Atalaya expects 2022 copper production to be
52,000 - 54,000 tonnes. Good operating performance from the plant is expected
to continue, with full year copper grade and copper recoveries expected to
average 0.40% and 85 - 87%, respectively.
Operating Costs
As a result of the elevated prices of electricity and other key consumables,
the Company now expects 2022 cash costs to be $2.95 - 3.25/lb copper payable
and AISC to be $3.25 - 3.45/lb copper payable. These new ranges are based on
an assumed electricity market price range of €150 - 175/MWh for H2 2022.
Should the electricity market price be lower than expected, cash costs and
AISC may be lower than the revised guidance.
Capital Expenditures
Atalaya continues to make significant investments in growth and the long-term
sustainability of its operations. For 2022, the main components of the capex
budget are associated with the 50 MW solar plant, the E-LIX Phase I plant,
expansion of the Riotinto tailings facility as well as sustaining capex. The
Company is maintaining its prior guidance for full year 2022 capital
expenditures.
Exploration
The Company continues to maintain an exploration budget of €10 million for
2022. However, due to the availability of equipment and delays owing to high
temperatures during the summer, the budget might be only partially utilised.
2022 Interim Dividend
In October 2021, Atalaya declared its inaugural dividend and also announced
the implementation of a sustainable dividend policy that provides capital
returns to its shareholders and allows for continued investments in its
portfolio of low capital intensity growth projects. The dividend policy
consists of an annual pay-out of 30 - 50% of free cash flow generated during
the applicable financial year and is payable in two half-yearly instalments.
Accordingly, the Company's Board of Directors has elected to declare an
interim dividend for H1 2022 of US$0.036 per ordinary share ("Interim
Dividend"), which is equivalent to approximately 3 pence per share.
The record date for the Interim Dividend will be 19 August 2022 and the shares
will become ex-dividend on 18 August 2022. Shareholders will also have the
option to receive the Interim Dividend in Sterling or Euros, should they elect
to do so by communicating their currency election to the Company by no later
than 31 August 2022. The exchange rates for payment in Sterling and Euros will
be fixed by the Company on 5 September 2022 and subsequently announced.
Update on Asset Portfolio
Riotinto 15 Mtpa Plant - Process Optimisation
During H1 2022, several improvement initiatives were implemented and tested,
with the goal of lowering reagent consumption, improving copper recoveries and
reducing cash costs.
Riotinto District - San Dionisio and San Antonio
On 13 April 2022, the Company announced new independent Mineral Resource
Estimates ("MRE") for the San Dionisio and San Antonio deposits at Proyecto
Riotinto. San Dionisio includes a potentially open pittable resource, with
separate copper-rich and polymetallic zones, that represents an extension of
the existing Cerro Colorado pit, as well as an underground polymetallic
resource. San Antonio is an underground polymetallic deposit located less than
one kilometre east of the Cerro Colorado pit.
The Company expects to complete a preliminary economic assessment ("PEA") for
San Dionisio by the end of 2022, including an evaluation of a scenario that
combines Cerro Colorado reserves with higher grade material from San Dionisio,
potentially providing an uplift to copper production by increasing the blended
head grade.
Riotinto District - Proyecto Masa Valverde ("PMV")
On 5 April 2022, the Company announced a new MRE for PMV's Masa Valverde and
Majadales deposits. Highlights included a significant increase in tonnage and
contained copper, silver and gold compared to the prior estimate, as well as
an initial Indicated Mineral Resource at Masa Valverde. The mineralisation
includes zones that are copper-rich and low-zinc, which could deliver higher
grade material for processing at the existing Riotinto plant with minimal
plant modifications.
Exploration activities continue at PMV, with four drill rigs currently
operating including two rigs at the Campanario Trend and two at anomalies west
of the Masa Valverde deposit. Initial drilling results from Campanario were
announced subsequent to the end of the quarter and included intersections of
massive and semi-massive sulphides at shallow depths.
In addition, the permitting process continues, and the Company expects to
complete a PEA for PMV by the end of 2022.
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.
The Company continues to engage with the many stakeholders in the region in
advance of its plans to submit a new project design.
In June, the Company commissioned a new acid water treatment plant at Touro,
which will address the legacy issues associated with water runoff from the
historical mine. The construction of the plant was contemplated in the
original project proposal, but Atalaya volunteered to fix the historical acid
water issues prior to submitting the Environmental Impact Assessment ("EIA")
in order to demonstrate its operating philosophy and the benefits of modern
operating systems.
Atalaya continues to be confident that its approach to Touro, which includes a
fully HDPE plastic lined thickened tailings facility 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.
Other Regional Exploration
At Riotinto East, various exploration activities continue including field
mapping, rock sampling, soil geochemistry and reinterpretation of geophysical
data. The Company expects to begin drilling targets later this year once the
investigation permit is granted.
At Proyecto Ossa Morena ("POM"), the Company has been focused on permitting,
environmental and social matters. Subsequent to Q2 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. An initial drilling
campaign is expected to begin soon at the Hinchona copper-gold target and at
the flagship Alconchel-Pallares copper-gold project.
This announcement contains information which, prior to its publication
constituted inside information for the purposes of Article 7 of Regulation
(EU) No 596/2014.
Contacts:
SEC Newgate UK Elisabeth Cowell / Axaule Shukanayeva / Max Richardson + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity Henry Fitzgerald-O'Connor / James Asensio +44 20 7523 8000
(NOMAD and Joint Broker)
BMO Capital Markets Tom Rider / Andrew Cameron +44 20 7236 1010
(Joint Broker)
Peel Hunt LLP Ross Allister / David McKeown +44 20 7418 8900
(Joint Broker)
About Atalaya Mining Plc
Atalaya is an AIM and TSX-listed mining and development group which produces
copper concentrates and silver by-product at its wholly owned Proyecto
Riotinto site in southwest Spain. Atalaya's current operations include the
Cerro Colorado open pit mine and a modern 15 Mtpa processing plant, which has
the potential to become a centralised processing hub for ore sourced from its
wholly owned regional projects around Riotinto that include Proyecto Masa
Valverde and Proyecto Riotinto East. In addition, the Group has a phased
earn-in agreement for up to 80% ownership of Proyecto Touro, a brownfield
copper project in the northwest of Spain, as well as a 99.9% interest in
Proyecto Ossa Morena. For further information, visit www.atalayamining.com
(http://www.atalayamining.com)
Management's review
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2022 and 2021
Notice to Reader
The accompanying unaudited interim condensed consolidated financial statements
of Atalaya Mining Plc have been prepared by and are the responsibility of
Atalaya Mining Plc's management. The unaudited interim condensed consolidated
financial statements have been reviewed by Atalaya's auditors in accordance
with the International Standard on Review Engagements 2410 "Review of Interim
Financial Information performed by the Independent Auditor of the Entity".
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 2021 and 30 June 2022 and results of operations
for the three and six months ended 30 June 2022 and 2021.
This report has been prepared as of 9 August 2022. 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 30 June 2022. 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 2021, and the unaudited interim condensed consolidated financial
statements for the period ended 30 June 2021. 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 ("IFRSs") as adopted by the EU and
its Unaudited Interim Condensed Consolidated Financial Statements in
accordance with International Accounting Standard 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 constitute
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 and on the Toronto Stock Exchange ("TSX") on 20 December
2010 under the symbol AYM. The Company continued to be listed on AIM and the
TSX as at 30 June 2022.
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 (including
Proyecto Riotinto Este), Proyecto Touro, Proyecto Masa Valverde, Proyecto Ossa
Morena and 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 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 owned several investigation permits in the Ossa
Morena Metallogenic Belt in Spain. 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.
Overview of Operational Results
Proyecto Riotinto
The following table presents a summarised statement of operations of Proyecto
Riotinto for the three and six months ended 30 June 2022 and 2021,
respectively.
Units expressed in accordance with the international system of units (SI) Unit Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Ore mined t 3,572,871 3,291,938 7,527,518 6,620,327
Waste mined t 6,740,305 8,021,599 13,578,935 15,456,033
Ore processed t 3,980,820 4,025,327 7,528,307 8,031,117
Copper ore grade % 0.39 0.42 0.38 0.42
Copper concentrate grade % 21.23 19.27 21.19 19.99
Copper recovery rate % 86.44 84.83 86.26 84.85
Copper concentrate t 63,027 74,495 117,235 141,755
Copper contained in concentrate t 13,386 14,353 24,847 28,332
Payable copper contained in concentrate t 12,756 13,608 23,674 26,914
Cash cost* US$/lb payable 3.12 2.26 3.22 2.15
All-in sustaining cost* US$/lb payable 3.33 2.52 3.45 2.49
(*) Refer Section 5 of this Management Review.
Note: The numbers in the above table may slightly differ among them due to
rounding.
Three months operational review
The plant processed 4.0 million tonnes of ore during Q2 2022 as it returned to
normalised throughput rates following the Q1 2022 transport sector strike and
maintenance stoppage, which lowered throughput to 3.5 million tonnes that
quarter. Processing rates in Q2 2022 were consistent with throughput in Q2
2021 of 4.0 million tonnes, highlighting the plant's ability to operate above
its 15 million tonne per annum nameplate capacity.
Copper grade was 0.39% in Q2 2022, representing an increase from 0.37% in Q1
2022 but below the comparative period in Q2 2021 of 0.42%. Lower grades so far
in 2022 are the result of blending with lower grade stockpiles due to pit
sequencing.
Copper recoveries in Q2 2022 were strong at 86.44%, above Q1 2022 of 86.07%
and despite lower grades, higher than the Q2 2021 comparative period.
Copper production in Q2 2022 was 13,386 tonnes, which represents an increase
of 16.8% over Q1 2022. The increase is due to good performance of the
processing plant, the return to a normalised period following the temporary
plant maintenance stoppage in Q1 2022, as well as higher copper grades and
improved copper recoveries.
On-site copper concentrate inventories at the end of Q2 2022 were
approximately 7,169 tonnes. All concentrate in stock at the beginning of the
period was delivered to the port at Huelva.
Six months operational review
Production of copper contained in concentrate during H1 2022 was 24,847
tonnes, compared with 28,332 tonnes in the same period of 2021. Payable copper
in concentrates was 23,674 tonnes compared with 26,914 tonnes of payable
copper in H1 2021.
Ore mined in H1 2022 was 7,527,518 tonnes compared with 6,620,327 tonnes
during H1 2021. Ore processed was 7,528,307 tonnes versus 8,031,117 tonnes in
H1 2021 with low-grade stockpiles processed in both periods.
Ore grade during H1 2022 was 0.38% Cu compared with 0.42% Cu in H1 2021.
Copper recovery was 86.26% versus 84.85% in H1 2021. Concentrate production
amounted to 117,235 tonnes below H1 2021 production of 141,755 tonnes.
2. 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
Proyecto Riotinto updated its production guidance in its Q2 2022 Operations
Update and has now also updated its cost guidance as follows.
Unit Guidance 2022
Ore mined million tonnes 15.5
Waste mined million tonnes 23.4
Ore processed million tonnes 15.2 - 15.4
Copper ore grade % 0.40
Copper recovery rate % 85 - 87
Contained copper tonnes 52,000 - 54,000
Cash costs * $/lb payable 2.95 - 3.25
All-in sustaining cost * $/lb payable 3.25 - 3.45
(*) These new ranges are based on an assumed electricity market price range of
€150 - 175/MWh for H2 2022
As announced in the Company's Q2 2022 Operations update, full year copper
production is expected to be 52,000 - 54,000 tonnes. The average copper grade
is expected to increase in H2 2022 due to pit sequencing and full year
guidance is 0.40%. Copper recoveries are expected to be 85 - 87% for the full
year.
The Company's original cost guidance was based on a range of potential
economic outcomes including regarding electricity costs and overall inflation.
So far in 2022, the prices of electricity and other key consumables have
remained elevated and as a result, the Company now expects 2022 cash costs to
be in the range of $2.95 - 3.25/lb copper payable and AISC to be in the range
of $3.25 - 3.45/lb copper payable. These new ranges are based on an assumed
electricity market price range of €150 - 175/MWh for H2 2022. In addition,
the Company continues to expect to spend approximately €12.5 million in 2022
as part of the project to increase the capacity of the tailings dam. AISC are
presented net of the one-off project to increase the capacity of the tailings
dam.
3. Overview of the Financial Results
The following table presents summarised consolidated income statements for the
three and six months ended 30 June 2022, with comparatives for the three and
six months ended 30 June 2021, respectively.
(Euro 000's) Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Revenue 93,418 99,724 179,669 197,104
Costs of sales (78,200) (45,753) (132,989) (93,779)
Administrative and other expenses (868) (1,452) (4,451) (3,025)
Exploration expenses 88 (279) (364) (399)
Care and maintenance expenditure (55) (284) (770) (502)
Other income 286 13 286 13
EBITDA 14,669 51,969 41,381 99,412
Depreciation/amortisation (8,785) (6,882) (16,305) (15,826)
Net foreign exchange (loss)/gain 7,521 (900) 10,094 2,031
Net finance cost (626) (247) (941) (330)
Tax (930) (11,649) (4,123) (19,294)
Profit for the period 11,849 32,291 30,106 65,993
Three months financial review
Revenues for the three-month period ended 30 June 2022 amounted to €93.4
million (Q2 2021: €99.7 million). Lower revenues compared with the same
quarter in the previous year were driven by lower volumes of concentrate sold
and negative provisional pricing adjustments for the Q2 2022 period.
Realised prices were US$4.32/lb copper during Q2 2022 compared with US$4.27/lb
copper in Q2 2021. The realised price during the quarter, excluding QPs, was
approximately US$4.28/lb.
Operating costs for the three-month period ended 30 June 2022 amounted to
€78.2 million, compared with €45.8 million in Q2 2021. Unit operating
costs in Q2 2022 were higher than in Q2 2021 due to the high cost of
electricity, diesel and other supplies as result of inflation and the
geopolitical situation in Ukraine.
Cash costs of US$3.12/lb payable copper during Q2 2022 compared with
US$2.26/lb payable copper in the same period last year. Q2 2022 operating
costs were higher than in Q2 2021, mainly due to lower volumes produced and
the increase in costs associated with electricity and other supplies, despite
the stronger US Dollar/Euro rate which partially offset the higher operating
costs of the period. AISC for Q2 2022, excluding one-off investments in the
tailings dam, were US$3.33/lb payable copper compared with US$2.52/lb payable
copper in Q2 2021.
Sustaining capex for Q2 2022 amounted to €2.0 million compared with €1.4
million in Q2 2021. Sustaining capex mainly related to continuous enhancements
in the processing systems of the plant. In addition, the Company invested
€3.9 million in the project to increase the tailings dam during Q2 2022 (Q2
2021: €4.0 million). Stripping costs capitalised during Q2 2022 amounted to
€20k (Q2 2021: €1.5 million).
Capex associated with the construction of the 50 MW solar plant amounted to
€11.3 million in Q2 2022, while investments in the Phase I E-LIX System
plant totalled €5.8 million, of which €5.3 million was booked as long term
loans to Lain Technologies Ltd.
Administrative and other expenses amounted to €0.9 million (Q2 2021: €1.5
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.
Exploration costs on Atalaya's projects portfolio for the three-month period
ended 30 June 2022 amounted to negative €88k (Q2 2021: €0.3 million)
mainly as result of cost capitalisation made during the period in Proyecto
Masa Valverde.
The Company continues with the overall exploration budget of €10 million.
However, due to the availability of the equipment and delays due to high
temperatures during the summer, the budget might be only partially used.
EBITDA for the three months ended 30 June 2022 amounted to €14.7 million
compared with Q2 2021 of €52.0 million.
The main item below the EBITDA line is depreciation and amortisation of €8.8
million (Q2 2021: €6.9 million). Net financing costs for Q2 2022 amounted to
€0.6 million (Q2 2021: €0.2 million).
Six month financial review
Revenues for the six-month period ended 30 June 2022 amounted to €179.7
million (H1 2021: €197.1 million).
Copper concentrate production during the six-month period ended 30 June 2022
was 117,235 tonnes (H1 2021: 141,755 tonnes) with 115,321 tonnes of copper
concentrates sold in the period (H1 2021: 138,833 tonnes). Lower production
levels in H1 2022 were mainly the result of lower grades and lower throughput
in Q1 2022 following the transport sector strike. Inventories of concentrates
as at the reporting date were 7,169 tonnes (31 Dec 2021: 5,254 tonnes).
Realised copper prices for H1 2022 were US$4.39/lb copper compared with
US$3.92/lb copper in the same period of 2021. Concentrates were sold under
offtake agreements and certain spot agreements for the production not
committed. The Company did not enter into any hedging agreements in 2022.
Operating costs for the six-month period ended 30 June 2022 amounted to
€133.0 million, compared with €93.8 million in H1 2021. Unit operating
costs in H1 2022 were higher than in H1 2021 due to the high cost of
electricity, diesel and other supplies as result of inflation and the
geopolitical situation in Ukraine.
Cash costs of US$3.22/lb payable copper during H1 2022 compare with US$2.15/lb
payable copper in the same period last year. Higher cash cost was due to lower
production levels and the increase in cost of electricity and other supplies,
despite the stronger US Dollar/Euro rate in H1 2022 which partially offset the
higher operating costs. AISC excluding investment in the tailings dam in the
six month period were US$3.45/lb payable copper compared with US$2.49/lb
payable copper in H1 2021. The increase is mainly attributable to the cash
cost, despite lower capitalised stripping costs, which amounted to €0.7
million in H1 2022 compared with €5.7 million invested in H1 2021.
Sustaining capex for the six-month period ended 30 June 2022 amounted to
€2.9 million, compared with €3.4 million in the same period the previous
year. Sustaining capex related to enhancements in processing systems of the
plant. In addition, the Company invested €6.4 million in the project to
increase the tailings dam, compared with €6.8 million in 2021.
Capex associated with the construction of the 50 MW solar plant amounted to
€11.7 million in H1 2022, while investments in the Phase I E-LIX System
plant totalled €5.8 million, of which €5.3 million was booked as long term
loans to Lain Technologies, Ltd..
Corporate costs for the first six-month period ended June 2022 were €4.5
million, compared with €3.0 million in H1 2021. Corporate costs mainly
include the Company's overhead expenses.
Exploration costs related to Atalaya's project portfolio for the six-month
period ended 30 June 2022 and amounted to €0.4 million plus €1.4 million
capitalised as permits in Proyecto Masa Valverde, compared with €0.4 million
in H1 2021.
EBITDA for the six months ended 30 June 2022 amounted to €41.4 million,
compared with €99.4 million in H1 2021.
Depreciation and amortisation amounted to €16.3 million for the six-month
period ended 30 June 2022 (H1 2021: €15.8 million) as a result of the higher
throughput and finished assets under construction.
Net finance costs for H1 2022 amounted to €0.9 million (H1 2021 €0.3
million).
Copper prices
The average realised copper price increased by 1% from US$4.27 per pound in Q2
2021 to US$4.32 per pound in Q2 2022.
The average prices of copper for the three months ended 30 June 2022 and 2021
are summarised below:
(USD) Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Realised copper price per lb 4.32 4.27 4.39 3.92
Market copper price per lb (period average) 4.32 4.40 4.43 4.13
Realised copper prices for the reporting period noted above have been
calculated using payable copper and including provisional invoices and final
settlements of quotation periods ("QPs") together but excluding adjustment of
€10.5 million in the profit and loss account to value open QPs mark to
market as at 30 June 2022. Lower realised prices than market averages in H1
are mainly due to the final settlement of invoices where QP was fixed in the
previous quarter due to a long open period when copper prices were higher. Q2
2022 realised price excluding QPs was approximately US$4.28/lb.
4. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost
per pound of payable copper", "All-In Sustaining Costs" ("AISC") "realised
prices" and "Net Cash/Debt" 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 royalties and
agency fees, expenditures on rehabilitation, capitalised stripping costs,
exploration and geology costs, corporate costs and recurring 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. Realised prices do not
include period end mark to market adjustments in respect of provisional
pricing Realised price is consistent with the widely accepted industry
standard definition.
Net debt is the face value of the current and non current financial debt less
cash at bank.
5. 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 30
June 2022 and 31 December 2021.
Liquidity information
(Euro 000's) 30 Jun 2022 31 Dec 2021
Unrestricted cash and cash equivalents at Group level 70,218 48,375
Unrestricted cash and cash equivalents at Operation level 56,565 43,722
Restricted cash and cash equivalents at Operation level 350 15,420
Consolidated cash and cash equivalents ((1)) 127,133 107,517
Net cash position ((2)) 67,554 60,073
Working capital surplus 129,280 102,430
((1) ) A significant portion of the cash balances are held
in US Dollar and converted to Euro with the official exchange rate at 30 June
2022
((2) ) Includes borrowings
Unrestricted cash and cash equivalents (which include cash at both Group level
and Operation level) as at 30 June 2022 increased to €126.8 million from
€92.1 million at 31 December 2021. The increase 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 €0.4 million
represented the amount in escrow out of which the Company has 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 liability to Astor on
costs) reverted to the Company and it has been classified as unrestricted
cash.
As of 30 June 2022, Atalaya reported a working capital surplus of €129.3
million, compared with a working capital surplus of €102.4 million at 31
December 2021. 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 Q2 2022.
The increase in working capital resulted from higher cash balances and
inventory levels.
Overview of the Group's cash flows
(Euro 000's) Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Cash flows (used in) / from operating activities (6,916) 33,296 21,382 73,030
Cash flows used in investing activities (19,771) (6,923) (27,323) (70,853)
Cash flows from financing activities 17,841 1,893 15,463 54,841
Net (decrease) / increase in cash and cash equivalents (8,846) 28,266 9,522 57,018
Net foreign exchange differences 7,521 900 10,094 (2,031)
Total net cash flow for the period (1,325) 29,166 19,616 54,987
Three months cash flows review
Cash and cash equivalents decreased by €1.3 million during the three months
ended 30 June 2022. This was due to the net results of cash used in operating
activities amounting to €6.9 million, the cash used in investing activities
amounting to €19.8 million, the cash generated from financing activities
totalling €17.8 million and net foreign exchange differences of €7.5
million.
Cash generated from operating activities before working capital changes was
€14.3 million. Atalaya increased its trade receivables in the period by
€13.1 million, increased its inventory levels by €0.6 million and
decreased its trade payables by €6.0 million.
Investing activities during the quarter consumed €19.8 million, relating
mainly to the 50 MW solar plant construction, tailings dam project and
continuous enhancements in the processing systems of the plant.
Financing activities during the quarter increased by €17.8 million mainly as
result of the use of unsecured credit facilities for the financing of the 50
MW solar plant.
Six months cash flows review
Cash and cash equivalents increased by €19.6 million during the six months
ended 30 June 2022. This was due to cash from operating activities amounting
to €21.4 million, cash used in investing activities amounting to €27.3
million, cash from financing activities amounting to €15.5 million and net
foreign exchange differences of €10.1 million.
Cash generated from operating activities before working capital changes was
€41.2 million. Atalaya increased its trade payables in the period by €3.7
million, increased its inventory levels by €13.7 million and increased its
trade receivable balances by €8.0 million.
Investing activities during the six-month period amounted to €27.3 million,
relating mainly to the50 MW solar plant construction, tailings dam project,
acquisition of land around Riotinto and continuous enhancements in the
processing systems of the plant.
Financing activities during the six-month period ended 30 June 2022 increased
by €15.5 million driven by the use of unsecured credit facilities for the
financing of the 50 MW solar plant. The financing was made by unsecured credit
lines by three major Spanish banks having a three to six-year tenure and an
average annual interest rate of approximately 1.7%.
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") which is the functional
currency of the Group, 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 and six months ended 30 June 2022, Atalaya recognised a
foreign exchange profit of €7.5 million and €10.1 million, respectively.
Foreign exchange profits mainly related to changes in the period in EUR and
USD conversion rates, as all sales are cashed and occasionally held in USD.
The following table summarises the movement in key currencies versus the EUR:
(Euro 000's) Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Average rates for the periods
GBP - EUR 0.8485 0.8621 0.8424 0.8680
USD - EUR 1.0647 1.2058 1.0934 1.2053
Spot rates as at
GBP - EUR 0.8582 0.8581 0.8582 0.8581
USD - EUR 1.0387 1.1884 1.0387 1.1884
7. Corporate Social Responsibility
The second quarter of the year has been significant in terms of social
responsibility activities for Atalaya Mining and its wholly owned Fundación
Atalaya Riotinto.
Of particular interest was the reestablishing of the school visits to the mine
program, after two years cancelled due to the COVID restrictions. This program
brings groups of students from the surrounding primary and secondary schools
and include a one-day visit full of activities, and a guided tour inside the
facilities, where they learn not only about the mining process but the history
and environment of the area. Also, during the quarter, the second edition of
Atalaya's training program for unemployed people from the local communities
has finalised. After two months of fruitful hands-on training working with
Atalaya and its contractors, the students have received their diploma and are
ready to seek for job opportunities in much a better position.
Also, Atalaya has continued its support to the neighbouring municipalities
with whom it holds permanent cooperation agreements to promote projects that
have a positive impact on the life of the communities. It is worth
highlighting the cooperation with Minas de Riotinto municipality, which
includes the establishing of a program to support boarding facilities for
young kids from working families, a program for training municipal
technicians, and another to offer scholarships for local students. Also, some
resources have been allocated to the refurbishing of some sporting facilities.
The Foundation has also agreed to support a number of initiatives by local
institutions, associations and individuals, including the support to the
elderly residence in Zalamea, the contribution to the association that assists
local people with Alzheimer's (AFA) that is purchasing a new vehicle, and the
association of people retired from Atalaya Rio Tinto Minera.
8. Health and Safety
The results for the first six months of 2022 have improved significantly
compared to the same period last year, with figures at Q2 2022 of 3.14 for the
Frequency Index and 0.07 for the Severity Index, with three lost-time
accidents, all of them minor, in this six month period ended 30 June 2022. The
change in trend that was already reflected in the first quarter continues and
this is the best six-month period in terms of number of accidents since the
restart of Proyecto Riotinto.
In the first half of the year, it is worth highlighting the consolidation of
the Field Leadership activity and its integration into the company's
Management System. Random checks at the entrances and exits to prevent work
under the influence of psychoactive substances are operating normally.
In 2022 Atalaya staff will continue to receive training on basic life support
and the rules of action in the event of health emergencies at Atalaya, with an
information program in the summer months in relation to work in high
temperatures.
Finally, regarding the SArCov-2 global health crisis, in June 2022 it ceased
to be compulsory to wear a mask to work at the mining facility, except for
access to the infirmary, where all personnel who require it continue to be
tested. These measures are almost back to normal pre-pandemic conditions.
9. Environment
During Q2 2022, the environmental department has continued executing the
actions of environmental monitoring of the activity and management of the
natural environment. Key points of the quarter:
· A total rainfall of 54,7 l/m(2) was recorded in Q2 2022, which
was around 43% less than in the same period of previous year. The total rain
collected for the hydrological year (October 2021 to date) is 367.5 l/m2,
which is 36% less than the rainfall recorded in the same period of the
previous hydrological year.
· The additional measures contemplated in the action plan against
dust continued to be implemented, intensifying periodic irrigation,
implementing new coordination measures and carrying out exhaustive monitoring
of the emissions generated in the operation.
· All the periodic internal controls of non-channelled emissions
into the atmosphere have been carried out, and the results of the controls are
within the limit values set out in the regulations. In addition, the annual
external control of emissions (channelled emissions and fugitive emissions)
was carried out in April 2022. Likewise, all the results obtained are within
the applicable limit values. The rest of periodic controls have been carried
out without incidents
· Environmental inspections were performed daily, mainly focused on
chemical storage and handling, housekeeping, waste management, uncontrolled
releases and environmentally friendly practices carried out by Proyecto
Riotinto and contractors' personnel. Additionally, dust control and drainage
system inspections were performed regularly. 75 inspections in total were
carried out during the second quarter, including plant, mine area and the
contractors' camps.
10. 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
2021.
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 in Ukraine.
11. 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
2021.
As at 30 June 2022, there are no significant changes in critical accounting
policies or estimates to those applied in 2021.
12. 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 pages 13 to
36
By Order of the Board of Directors,
___________________________________
Roger Davey
Chairman
Nicosia, 9 August 2022
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TO ATALAYA MINING PLC
Introduction
We have reviewed the interim condensed consolidated financial statements of
Atalaya Mining Plc (the "Company"), and its subsidiaries (collectively
referred to as "the Group") on pages 13 to 36 contained in the accompanying
interim report, which comprise the interim condensed consolidated statement of
financial position as at 30 June 2022 and the interim condensed consolidated
statements of profit or loss and other comprehensive income, changes in equity
and cash flows for the period then ended and selected explanatory notes.
Management is responsible for the preparation and presentation of these
interim condensed consolidated financial statements in accordance with
International Financial Reporting Standard IAS 34 Interim Financial Reporting
(IAS 34). Our responsibility is to express a conclusion on these interim
condensed consolidated financial statements based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements 2410, "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity". A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the accompanying interim condensed consolidated financial
statements do not present fairly, in all material respects, the financial
position of the Group as at 30 June 2022 and of its financial performance and
its cash flows for the period then ended in accordance with International
Financial Reporting Standard IAS 34 Interim Financial Reporting (IAS 34).
Stavros Pantzaris
Certified Public Accountant and Registered Auditor
for and on behalf of
Ernst & Young Cyprus Limited
Certified Public Accountants and Registered Auditors
Nicosia
9 August 2022
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2022 and 2021
(Euro 000's) Note Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Revenue 4 93,418 99,724 179,669 197,104
Operating costs and mine site administrative expenses (78,021) (45,598) (132,632) (93,470)
Mine site depreciation and amortization (8,785) (6,882) (16,305) (15,826)
Gross profit 6,612 47,244 30,732 87,808
Administration and other expenses (868) (1,452) (4,451) (3,025)
Share-based benefits 14 (179) (155) (357) (309)
Exploration expenses 88 (279) (364) (399)
Care and maintenance expenditure (55) (284) (770) (502)
Operating profit 5,598 45,074 24,790 83,573
Other income 286 13 286 13
Net foreign exchange (loss)/gain 3 7,521 (900) 10,094 2,031
Net finance costs 5 (626) (247) (941) (330)
Profit before tax 12,779 43,940 34,229 85,287
Tax 6 (930) (11,649) (4,123) (19,294)
Profit for the period 11,849 32,291 30,106 65,993
Profit for the period attributable to:
- Owners of the parent 7 12,058 32,583 30,882 66,441
- Non-controlling interests (209) (292) (776) (448)
11,849 32,291 30,106 65,993
Earnings per share from operations attributable to equity holders of the
parent during the period:
Basic earnings per share (EUR cents per share) 7 8.6 23.3 22.1 48.1
Fully diluted earnings per share (EUR cents per share) 7 8.4 22.9 21.7 47.1
Profit for the period 11,849 32,291 30,106 65,993
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) (7) (6) 2
'OCI'
Total comprehensive income for the period 11,843 32,284 30,100 65,995
Total comprehensive income for the period attributable to:
- Owners of the parent 7 12,052 32,576 30,876 66,443
- Non-controlling interests (209) (292) (776) (448)
11,843 32,284 30,100 65,995
Notes to the Condensed Interim Consolidated Financial Statements
(All amounts in Euro thousands unless otherwise stated)
For the three and six months to 30 June 2020 and 2019 - (Unaudited)
(Euro 000's) Note 30 Jun 2022 31 Dec 2021
Assets Unaudited Audited
Non-current assets
Property, plant and equipment 8 346,117 333,096
Intangible assets 9 56,487 57,368
Trade and other receivables 11 10,662 5,330
Non-current financial assets 11 1,101 1,101
Deferred tax asset 5,463 5,564
419,830 402,459
Current assets
Inventories 10 38,447 24,781
Trade and other receivables 11 54,568 50,128
Tax refundable 228 483
Other financial assets 32 39
Cash and cash equivalents 12 127,133 107,517
220,408 182,948
Total assets 640,238 585,407
Equity and liabilities
Equity attributable to owners of the parent
Share capital 13 13,596 13,447
Share premium 13 319,411 315,916
Other reserves 14 68,591 52,690
Accumulated profit 73,740 58,754
475,338 440,807
Non-controlling interests (5,685) (4,909)
Total equity 469,653 435,898
Liabilities
Non-current liabilities
Trade and other payables 15 3,450 3,450
Provisions 16 28,154 26,578
Lease liabilities 18 4,625 4,913
Borrowings 17 43,228 34,050
79,457 68,991
Current liabilities
Trade and other payables 15 69,885 66,191
Lease liabilities 18 580 597
Borrowings 17 16,351 13,394
Current tax liabilities 4,312 336
91,128 80,518
Total liabilities 170,585 149,509
Total equity and liabilities 640,238 585,407
The unaudited interim condensed consolidated financial statements were
authorised for issue by the Board of Directors on 9 August 2022 and were
signed on its behalf.
Roger Davey Alberto Lavandeira
Chairman CEO
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2022 and 2021
(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
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 - - - 30,882 30,882 (776) 30,106
Change in fair value of financial assets through OCI - - (6) - (6) - (6)
Total comprehensive income - - (6) 30,882 30,876 (776) 30,100
Transactions with owners
Issuance of share capital 13 149 3,495 - - 3,644 - 3,644
Recognition of depletion factor 14 - - 12,800 (12,800) - - -
Recognition of share-based payments 14 - - 357 - 357 - 357
Recognition of non-distributable reserve 14 - - 316 (316) - - -
Recognition of distributable reserve 14 - - 2,726 (2,726) - - -
Other changes in equity - - (292) (1) (293) - (293)
At 30 June 2022 13,596 319,411 68,591 73,740 475,338 (5,685) 469,653
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total NCI Total equity
At 1 January 2021 13,439 315,714 40,049 (15,512) 353,690 (3,491) 350,199
Profit for the period - - - 66,441 66,441 (448) 65,993
Change in fair value of financial assets through OCI - - 2 - 2 - 2
Total comprehensive income - - 2 66,441 66,443 (448) 65,995
Transactions with owners
Issuance of share capital 13 6 151 - - 157 - 157
Recognition of share-based payments 14 - - 309 - 309 - 309
Recognition of depletion factor 14 - - 6,100 (6,100) - - -
Recognition of non-distributable reserve 14 - - 2,372 (2,372) - - -
Recognition of-distributable reserve 14 - - 3,317 (3,317) - - -
Other changes in equity - - - (278) (278) - (278)
At 30 June 2021 13,445 315,865 52,149 38,862 420,321 (3,939) 416,382
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total NCI Total equity
Audited
At 1 January 2021 13,439 315,714 40,049 (15,512) 353,690 (3,491) 350,199
Profit for the period - - - 133,644 133,644 (1,418) 132,226
Change in fair value of financial assets through OCI - - (47) - (47) - (47)
Total comprehensive income - - (47) 133,644 133,597 (1,418) 132,179
Transactions with owners
Issuance of share capital 13 8 202 - - 210 - 210
Recognition of depletion factor 14 - - 6,100 (6,100) - - -
Recognition of share-based payments 14 - - 899 - 899 - 899
Recognition of non-distributable reserve 14 - - 2,372 (2,372) - - -
Recognition of distributable reserve 14 - - 3,317 (3,317) - - -
Other changes in equity - - - (299) (299) - (299)
Interim dividends paid - - - (47,290) (47,290) - (47,290)
At 31 December 2021 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
((1)) The share premium reserve is not available for distribution
(Euro 000's) Note Three month period ended 30 Jun 2022 Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Cash flows from operating activities
Profit before tax 12,779 43,940 34,229 85,287
Adjustments for:
Depreciation of property, plant and equipment 8 7,629 5,882 14,118 13,493
Amortisation of intangibles 9 1,156 1,000 2,187 2,333
Recognition of share-based payments 14 179 155 357 309
Interest income 5 (14) (5) (15) (5)
Interest expense 5 (238) 171 - 247
Unwinding of discounting on mine rehabilitation provision 16 396 83 469 83
Other provisions 16 - 2,617 - 2,617
Legal provisions 16 - (2,807) - (278)
Net foreign exchange differences 3 (7,521) (900) (10,094) 2,031
Unrealised foreign exchange loss on financing activities (45) (72) (1) 11
Cash inflows from operating activities before working capital changes 14,321 50,064 41,250 106,128
Changes in working capital:
Inventories 10 (638) (6,849) (13,666) (3,569)
Trade and other receivables 11 (13,128) (1,734) (7,951) (10,688)
Trade and other payables 15 (5,966) (2,065) 3,694 (11,582)
Cash flows from operations (5,411) 39,416 23,327 80,289
Tax paid (1,261) (5,951) (1,458) (7,007)
Interest on leases liabilities 5 2 2 (3) (5)
Interest paid 5 (246) (171) (484) (247)
Net cash (used in) / from operating activities (6,916) 33,296 21,382 73,030
Cash flows from investing activities
Purchase of property, plant and equipment 8 (18,781) (6,841) (26,032) (17,688)
Purchase of intangible assets 9 (1,004) (87) (1,306) (170)
Payment of deferred consideration 19 - - - (53,000)
Interest received 5 14 5 15 5
Net cash used in investing activities (19,771) (6,923) (27,323) (70,853)
Cash flows from financing activities
Lease payments 18 (155) (148) (315) (309)
Proceeds from borrowings 17 17,957 1,977 12,135 54,992
Proceeds from issuance of shares 13 39 64 3,643 158
Net cash from financing activities 17,841 1,893 15,463 54,841
Net (decrease) / increase in cash and cash equivalents (8,846) 28,266 9,522 57,018
Net foreign exchange difference 3 7,521 900 10,094 (2,031)
Cash and cash equivalents:
At beginning of the period 128,458 63,588 107,517 37,767
At end of the period 127,133 92,754 127,133 92,754
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2022 and 2021
1. Incorporation and summary of business
Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September
2004 as a private company with limited liability under the Companies Law, Cap.
113 and was converted to a public limited liability company on 26 January
2005. Its registered office is at 1 Lampousa Street, Nicosia, Cyprus.
The Company was listed on AIM of the London Stock Exchange in May 2005 under
the symbol ATYM and on the TSX on 20 December 2010 under the symbol AYM. The
Company continued to be listed on AIM and the TSX as at 30 June 2022.
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 currently controls four mining projects: Proyecto Riotinto
(including Proyecto Riotinto Este), Proyecto Touro, Proyecto Masa Valverde and
Proyecto Ossa Morena.
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. Subsequent to the end of Q2 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
These condensed interim financial statements are unaudited.
The unaudited interim condensed consolidated financial statements for the
period ended 30 June 2022 have been prepared in accordance with International
Accounting Standard 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 and have been prepared on a
historical cost basis except for the revaluation of certain financial
instruments that are measured at fair value at the end of each reporting
period, as explained below and in note 7.
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 2021. 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 2021.
(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.
The Directors have considered scenarios of disruption in Proyecto Riotinto
including market volatility in commodity prices for a period of at least 12
months since the approval of these unaudited condensed interim consolidated
financial statements, and after reviewing them, the current cash resources,
forecasts and budgets, timing of cash flows, borrowing facilities, sensitivity
analyses and considering the associated uncertainties to the Group's
operations have a reasonable expectation that the Company has adequate
resources to continue operating in the foreseeable future.
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 2021, except for the adoption of new standards
effective as of 1 January 2022. 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 2022, but
do not have a material impact on the unaudited condensed interim consolidated
financial statements of the Group.
Reference to the Conceptual Framework - Amendments to IFRS 3
The amendments replace a reference to a previous version of the IASB's
Conceptual Framework with a reference to the current version issued in March
2018 without significantly changing its requirements.
The amendments add an exception to the recognition principle of IFRS 3
Business Combinations to avoid the issue of potential 'day 2' gains or losses
arising for liabilities and contingent liabilities that would be within the
scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets or
IFRIC 21 Levies, if incurred separately. The exception requires entities to
apply the criteria in IAS 37 or IFRIC 21, respectively, instead of the
Conceptual Framework, to determine whether a present obligation exists at the
acquisition date.
The amendments also add a new paragraph to IFRS 3 to clarify that contingent
assets do not qualify for recognition at the acquisition date. These
amendments had no impact on the interim condensed consolidated financial
statements of the Group as there were no contingent assets, liabilities and
contingent liabilities within the scope of these amendments arisen during the
period.
Property, Plant and Equipment: Proceeds before Intended Use - Amendments to
IAS 16
The amendment prohibits entities from deducting from the cost of an item of
property, plant and equipment, any proceeds of the sale of items produced
while bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the costs of producing
those items, in profit or loss.
These amendments had no impact on the interim condensed consolidated financial
statements of the Group as there were no sales of such items produced by
property, plant and equipment made available for use on or after the beginning
of the earliest period presented. However, the Group will review the
accounting policies relating to assets under construction for any possible
change.
IFRS 1 First-time Adoption of International Financial Reporting Standards -
Subsidiary as a first-time adopter
The amendment permits a subsidiary that elects to apply paragraph D16(a) of
IFRS 1 to measure cumulative translation differences using the amounts
reported in the parent's consolidated financial statements, based on the
parent's date of transition to IFRS, if no adjustments were made for
consolidation procedures and for the effects of the business combination in
which the parent acquired the subsidiary. This amendment is also applied to an
associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.
These amendments had no impact on the interim condensed consolidated financial
statements of the Group as it is not a first-time adopter.
IFRS 9 Financial Instruments - Fees in the '10 per cent' test for
derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing
whether the terms of a new or modified financial liability are substantially
different from the terms of the original financial liability. These fees
include only those paid or received between the borrower and the lender,
including fees paid or received by either the borrower or lender on the
other's behalf. There is no similar amendment proposed for IAS 39 Financial
Instruments: Recognition and Measurement. These amendments had no impact on
the interim condensed consolidated financial statements of the Group as there
were no modifications of the Group's financial instruments during the period.
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).
2.3 Fair value estimation
Financial assets or liabilities Level 1 Level 2 Level 3 Total
(Euro 000's)
30 Jun 2022
Other financial assets
Financial assets at FV through OCI 38 - 1,101 1,139
Trade and other receivables
Receivables (subject to provisional pricing) - 15,524 - 15,524
Total 38 15,524 1,101 16,663
31 Dec 2021
Other financial assets
Financial assets at FV through OCI 39 - 1,101 1,140
Trade and other receivables
Receivables (subject to provisional pricing) - 29,148 - 29,148
Total 39 29,148 1,101 30,288
2.4 Critical accounting estimates and judgements
The preparation of the unaudited interim condensed consolidated financial
statements require management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of
contingent liabilities at the date of the consolidated financial statements.
Estimates and assumptions are continually evaluated and are based on
management's experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. Uncertainty
about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected
in future periods.
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 to the 2021 audited 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 agreements. In addition, the Group has spot agreements
for the concentrates not committed to off-takers.
Geographical segments
The Group's mining activities are located in Spain. The commercialisation of
the copper concentrates produced in Spain is carried out through Cyprus. Sales
transactions to related parties are on arm's length basis in a similar manner
to transaction with third parties. Accounting policies used by the Group in
different locations are the same as those contained in Note 2.
(Euro 000's) Cyprus Spain Other Total
Three month period ended 30 Jun 2022
Revenue - from external customers 5,910 87,508 - 93,418
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 3,352 11,324 (7) 14,669
Depreciation/amortisation charge - (8,785) - (8,785)
Net foreign exchange gain 4,146 3,375 - 7,521
Finance income - 14 - 14
Finance cost - (640) - (640)
Profit before tax 7,498 5,288 (7) 12,779
Tax (892) (38) - (930)
Profit/(loss) for the period 6,606 5,250 (7) 11,849
Six month period ended 30 Jun 2022
Revenue - from external customers 17,740 161,929 - 179,669
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 12,319 29,076 (14) 41,381
Depreciation/amortisation charge - (16,305) - (16,305)
Net foreign exchange gain 5,316 4,778 - 10,094
Finance income - 15 - 15
Finance cost - (956) - (956)
Profit/(loss) before tax 17,635 16,608 (14) 34,229
Tax (1,916) (2,207) - (4,123)
Profit/(loss) for the period 15,719 14,401 (14) 30,106
Total assets 85,742 553,321 1,175 640,238
Total liabilities (3,973) 133,932 (300,544) (170,585)
Depreciation of property, plant and equipment - (14,188) - (14,188)
Amortisation of intangible assets - (2,187) - (2,187)
Total net additions of non-current assets - 39,645 - 39,645
(Euro 000's) Cyprus Spain Other Total
Three month period ended 30 Jun 2021
Revenue - from external customers 6,784 92,940 - 99,724
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 4,056 47,906 7 51,969
Depreciation/amortisation charge - (6,882) - (6,882)
Net foreign exchange loss (160) (740) - (900)
Finance income - 5 - 5
Finance cost - (252) - (252)
Profit before tax 3,896 40,037 7 43,940
Tax (11,649)
Profit for the period 32,291
Six month period ended 30 Jun 2021
Revenue - from external customers 21,738 175,366 - 197,104
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 16,646 82,775 (9) 99,412
Depreciation/amortisation charge - (15,826) - (15,826)
Net foreign exchange gain 395 1,634 2 2,031
Finance income - 5 - 5
Finance cost - (335) - (335)
Profit/(loss) before tax 17,041 68,253 (7) 85,287
Tax (19,294)
Profit for the period 65,993
Total assets 46,101 529,645 1,144 576,890
Total liabilities (2,969) (157,540) - (160,509)
Depreciation of property, plant and equipment - 13,493 - 13,493
Amortisation of intangible assets - 2,333 - 2,333
Total net additions of non-current assets - 25,139 - 25,139
Revenue represents the sales value of goods supplied to customers; net of
value added tax. The following table summarises sales to customers with whom
transactions have individually exceeded 10.0% of the Group's revenues.
(Euro 000's) Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Segment €'000 Segment €'000
Offtaker 1 Copper 43,005 Copper 49,280
Offtaker 2 Copper 60,566 Copper 40,538
Offtaker 3 Copper 76,086 Copper 98,021
4. Revenue
(Euro 000's) Three month period ended 30 Jun 2022, Three month period ended 30 Jun 2021 Six month period ended 30 Jun 2022 Six month period ended 30 Jun 2021
Revenue from contracts with customers ((1)) 103,909 94,488 185,678 187,188
Fair value (losses)/gains relating to provisional pricing within sales ((2)) (10,491) 5,236 (6,009) 9,916
Total revenue 93,418 99,724 179,669 197,104
All revenue from copper concentrate is recognised at a point in time when the
control is transferred. Revenue from freight services is recognised over time
as the services are provided.
((1) ) Included within H1 2022 revenue, there is a transaction
price of €4.3 million (€1.7 million in H1 2021) 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 cost
Three months ended 30 Jun 2022 Three months ended 30 Jun 2021 Six months ended 30 Jun 2022 Six months ended
30 Jun 2021
(Euro 000's)
Interest expense:
Other interest (246) (83) (484) (83)
Interest on lease liabilities 2 2 (3) (5)
Unwinding of discount on mine rehabilitation provision (Note 16)
(396) (171) (469) (247)
Interest income ((1)) 14 5 15 5
(626) (247) (941) (330)
((1) ) Interest income relates to interest received on bank
balances
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 30 Jun 2022 Three months ended 30 Jun 2021 Six months ended 30 Jun 2022 Six months ended
30 Jun 2021
(Euro 000's)
Income taxes
Current income tax expense (930) (11,649) (4,123) (19,294)
Income tax expense recognised in statement of profit and loss (930) (11,649) (4,123) (19,294)
7. Earnings per share
The calculation of the basic and fully diluted loss per share attributable to
the ordinary equity holders of the Company is based on the following data:
Three months ended 30 Jun 2022 Three months ended 30 Jun 2021 Six months ended 30 Jun 2022 Six months ended
30 Jun 2021
(Euro 000's)
Profit attributable to equity holders of the parent 12,058 32,583 30,882 66,441
Weighted number of ordinary shares for the purposes of basic earnings per
share (000's)
139,859 139,730 139,634 138,179
Basic profit per share (EUR cents/share) 8.6 23.3 22.1 48.1
Weighted number of ordinary shares for the purposes of fully diluted earnings
per share (000's)
143,736 142,527 142,235 140,966
Fully diluted profit per share (EUR cents/share) 8.4 22.9 21.7 47.1
At 30 June 2022 there are nil warrants (Note 13) and 3,543,500 options (Note
13) (2021: nil warrants and 3,866,250 options) which have been included when
calculating the weighted average number of shares for 2022.
8. Property, plant and equipment
Land and buildings Right-of-use assets Plant and machinery Assets under construction ((1)) Other assets ((3)) Total
Deferred mining costs ((2))
(Euro 000's)
Cost
At 1 January 2021 64,034 6,569 268,051 15,828 41,868 801 397,151
Additions 477 293 1,511 10,453 5,724 - 18,458
Reclassifications - - 807 (807) - - -
At 30 June 2021 64,511 6,862 270,369 25,474 47,592 801 415,609
Additions (207) 214 430 9,933 4,075 - 14,445
Increase in rehab. Provision
655 - - - - - 655
Reclassifications - - 12,547 (12,547) - - -
Advances 44 - - - - - 44
At 31 December 2021 65,003 7,076 283,346 22,860 51,667 801 430,753
Additions 2,383 - 621 22,334 691 - 26,029
Increase in rehab. Provision
1,107 - - - - - 1,107
Reclassifications 15,300 - 4,979 (20,279) - - -
Advances 3 - - - - - 3
At 30 June 2022 83,796 7,076 288,946 24,915 52,358 801 457,892
Depreciation
At 1 January 2021 11,671 956 48,134 - 8,528 688 69,977
Charge for the period 2,219 289 9,680 - 1,292 13 13,493
At 30 June 2021 13,890 1,245 57,814 - 9,820 701 83,470
Charge for the period 2,136 301 10,177 - 1,560 13 14,187
At 31 December 2021 16,026 1,546 67,991 - 11,380 714 97,657
Charge for the period 2,157 158 9,994 - 1,797 12 14,118
At 30 June 2022 18,183 1,704 77,985 - 13,177 726 111,775
Net book value
At 30 June 2022 65,613 5,372 210,961 24,915 39,181 75 346,117
At 31 December 2021 48,977 5,530 215,355 22,860 40,287 87 333,096
((1)) Assets under construction at 30 June 2022 were €24.9 million (2021:
€25.5 million) which include sustaining capital expenditures, tailings dams
project and solar plant.
((2)) Stripping costs
((3)) Includes motor vehicles, furniture, fixtures and office equipment which
are depreciated over 5-10 years.
((4)) Increase in lands related to the rehabilitation provision
The above fixed assets are mainly located in Spain.
9. Intangible assets
Permits ((1))
(Euro 000's) Licences, R&D and software Total
Cost
At 1 January 2021 78,210 8,595 86,805
Additions - 170 170
At 30 June 2021 78,210 8,765 86,975
Additions 2,148 ((1)) (170) 1,978
At 31 December 2021 80,358 8,595 88,953
Additions 1,306 - 1,306
At 30 June 2022 81,664 8,595 90,259
Amortisation
On 1 January 2021 18,683 8,306 26,989
Charge for the period 2,300 33 2,333
At 30 June 2021 20,983 8,339 29,322
Charge for the period 2,231 32 2,263
At 31 December 2021 23,214 8,371 31,585
Charge for the period 2,155 32 2,187
At 30 June 2022 25,369 8,403 33,772
Net book value
At 30 June 2022 56,295 192 56,487
At 31 December 2021 57,144 224 57,368
((1) ) Addition resulting from the acquisition of 51% of Rio
Narcea Nickel SL
Increase of permits in 2022 related to the capitalisation of Proyecto Masa
Valverde.
The ultimate recovery of balances carried forward in relation to areas of
interest or all such assets including intangibles is dependent on successful
development, and commercial exploitation, or alternatively the sale of the
respective areas.
The Group conducts impairment testing on an annual basis unless indicators of
impairment are not present at the reporting date. The Directors have
considered scenarios of disruption in Proyecto Riotinto including market
volatility in commodity prices, and after reviewing them, the current cash
resources, forecasts and budgets, timing of cash flows, borrowing facilities,
sensitivity analyses and considering the associated uncertainties to the
Group's operations have a reasonable expectation that the Company has adequate
resources to continue operating in the foreseeable future. In considering the
carrying value of the assets at Proyecto Riotinto, including the intangible
assets and any impairment thereof, the Group assessed that no indicators were
present as at 30 June 2022 and thus no impairment has been recognised.
10. Inventories
(Euro 000's) 30 Jun 2022 31 Dec 2021
Finished products 8,811 5,185
Materials and supplies 26,986 18,216
Work in progress 2,650 1,380
38,447 24,781
As of 30 June 2022, copper concentrate produced and not sold amounted to 7,169
tonnes (31 Dec 2021: 5,254 tonnes). Accordingly, the inventory for copper
concentrate was €8.4 million (31 Dec 2021: €5.2 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.
11. Trade and other receivables
(Euro 000's) 30 Jun 2022 31 Dec 2021
Non-current
Deposits 303 303
Loans 7,663 2,332
Other non-current receivables 2,696 2,695
10,662 5,330
Current
Trade receivables at fair value - subject to provisional pricing 3,209 8,865
Trade receivables from shareholders at fair value - subject to provisional
pricing (Note 21.3)
12,315 20,283
Other receivables from related parties at amortised cost (Note 21.3) 56 56
Deposits 35 21
VAT receivables 31,619 17,300
Tax advances 1,273 -
Prepayments 3,098 3,303
Other current assets 2,963 300
54,568 50,128
Allowance for expected credit losses - -
Total trade and other receivables 65,230 55,458
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 2021) as a
collateral for bank guarantees, which was recorded as restricted cash (or
deposit).
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 in E-LIX System
facilities. Amounts withdrawn bears interest at 2%.
12. Cash and cash equivalents
(Euro 000's) 30 Jun 2022 31 Dec 2021
Unrestricted cash and cash equivalents at Group level 70,218 48,375
Unrestricted cash and cash equivalents at Operation level 56,565 43,722
Restricted cash and cash equivalents at Operation level 350 15,420
Consolidated cash and cash equivalents 127,133 107,517
Restricted cash of €0.4 million represented the amount in escrow out of
which the Company has 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 liability to Astor on costs) reverted to the Company and it has been
classified as unrestricted cash.
Cash and cash equivalents denominated in the following currencies:
(Euro 000's) 30 Jun 2022 31 Dec 2021
Euro - functional and presentation currency 24,958 30,145
Great Britain Pound 1,984 36
United States Dollar 100,191 77,336
127,133 107,517
13. 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
000's Euro 000's Euro 000's Euro 000's
Issue Date Price (£) Details
31 December 2020/1 January 2021 138,141 13,439 315,714 329,153
12 Feb 2021 2.015 Exercised share options((c)) 41 4 91 95
18 May 2021 2.015 Exercised share options((d)) 20 1 45 46
18 May 2021 1.475 Exercised share options((d)) 10 1 15 16
15 Dec 2021 1.475 Exercised share options((e)) 9 2 43 45
15 Dec 2021 2.015 Exercised share options((e)) 15 - 8 8
000's Euro 000's Euro 000's Euro 000's
31 December 2021/1 January 2022 138,236 13,447 315,916 329,363
22 Jan 2022 1.440 Exercised share options((b)) 314 28 512 540
22 Jan 2022 2.015 Exercised share options((b)) 321 29 746 775
22 Jan 2022 2.045 Exercised share options((b)) 400 36 941 977
22 Jan 2022 1.475 Exercised share options((b)) 451 42 754 796
22 Jan 2022 3.090 Exercised share options((b)) 135 12 505 517
23 June 2022 1.475 Exercised share options((a)) 23 2 37 39
30 June 2022 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
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. Further details (including
details of sales of shares following the exercise of options) are given in
Note 24.
c) On 12 February 2021, the Company was notified that certain
employees exercised options over 40,750 ordinary shares of £0.075 at a price
of £2.015, thus creating a share premium of €91k.
d) On 18 May 2021, the Company was notified that certain employees
exercised options over 30,000 ordinary shares of £0.075 at a price between
£1.475 and £2.015, thus creating a share premium of €61k.
e) On 15 December 2021, the Company was notified that certain
employees exercised options over 24,500 ordinary shares of £0.075 at a price
between £1.475 and £2.015, thus creating a share premium of €50k.
In general, option agreements contain provisions adjusting the exercise price
in certain circumstances including the allotment of fully paid ordinary shares
by way of a capitalisation of the Company's reserves, a subdivision or
consolidation of the ordinary shares, a reduction of share capital and offers
or invitations (whether by way of rights issue or otherwise) to the holders of
ordinary shares.
Details of share options outstanding as at 30 June 2022:
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 2022 2.154 3,841,750
Options executed during the year 1.844 (1,643,250)
Granted during the year 3.627 1,345,000
30 June 2022 2.857 3,543,500
Warrants
As at 30 June 2022 and 2021 there were no warrants.
14. Other reserves
Share option Bonus share
Fair value reserve of financial assets at FVOCI ((2)) Total
(Euro 000's) Non-Distributable reserve ((3))
Depletion factor ((1)) Distributable reserve ((4))
At 1 January 2021 8,187 208 25,033 (1,100) 5,628 2,093 40,049
Recognition of share- based payments
309 - - - - - 309
Recognition of depletion factor
- - (55) - - 6,155 6,100
Recognition of non-distributable reserve
- - - - 2,372 - 2,372
Recognition of distributable reserve
- - - - - 3,317 3,317
Change in fair value of financial assets at fair value through OCI
- - - - - 2
2
At 30 June 2021 8,496 208 24,978 (1,098) 8,000 11,565 52,149
Recognition of share-based payments
590 - - - - - 590
Change in fair value of financial assets at fair value through OCI
- - - (49) - - (49)
At 31 December 2021 9,086 208 24,978 (1,147) 8,000 11,565 52,690
Recognition of share-based payments
357 - - - - - 357
Recognition of depletion factor
- - 12,800 - - - 12,800
Recognition of non-distributable reserve
- - - - 316 - 316
Recognition of distributable reserve
- - - - - 2,726 2,726
Change in fair value of financial assets at fair value through OCI
- - - - - (6)
(6)
Other changes in reserves
- - - - - (292) (292)
At 30 June 2022 9,443 208 37,778 (1,153) 8,316 13,999 68,591
((1) ) Depletion factor reserve
At 30 June 2022, the Group has recognised €12.8 million (H1 2021: disposed
€0.1 million) as a depletion factor reserve as per 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 of profits
generated equal to a 10% of profit/(loss) for the year until 20% of share
capital is reached.
((4) ) Distributable reserve
The Group reclassified at least 10% of the profit of 2021 to distributable
reserves.
15. Trade and other payables
(Euro 000's) 30 Jun 2022 31 Dec 2021
Non-current
Other non-current payables 3,435 3,435
Government grant 15 15
3,450 3,450
Current
Trade payables 65,871 49,712
Accruals 3,877 16,267
VAT payables - 74
Other 137 138
69,885 66,191
Other non-current payables are related with the acquisition of Atalaya Masa
Valverde, SLU formerly Cambridge Minería España, SL and 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.
16. Provisions
(Euro 000's) Other tax costs Legal costs Rehabilitation costs Total costs
1 January 2021 - 626 24,638 25,264
Additions 2,617 - 477 3,094
Reduction of provision - (278) - (278)
Finance cost - - 83 83
At 30 June 2021 2,617 348 25,198 28,163
Additions - 26 178 204
Used of provision - (8) (57) (65)
Reversal of provision (2,617) (87) - (87)
Finance cost - - 980 980
At 31 December 2021 - 279 26,299 26,578
Additions - - 1,033 1,033
Reduction of provision - - 74 74
Finance cost - - 469 469
At 30 June 2022 - 279 27,875 28,154
(Euro 000's) 30 Jun 2022 31 Dec 2021
Non-current 28,154 26,578
Total 28,154 26,578
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.
The discount rate used in the calculation of the net present value of the
liability as at 30 June 2022 was 1.12% (2021: 1.12%), which is the average of
the 15-year Spain Government Bond rate from 2017 to 2021. An inflation rate of
1%-1.96% is applied on annual basis.
Legal provision
The Group has been named a defendant in several legal actions in Spain, the
outcome of which is not determinable as at 30 June 2022. Management has
individually reviewed each case and made a provision of €0.3 million (€0.3
million at 31 December 2021) for these claims, which has been reflected in
these unaudited condensed interim consolidated financial statements.
17. Borrowings
(Euro 000's) 30 Jun 2022 31 Dec 2021
Non-current borrowings
Credit facilities 43,228 34,050
43,228 34,050
Current borrowings
Credit facilities 16,351 13,394
16,351 13,394
The Group had uncommitted credit facilities totalling €119.6 million
(€111.0 million at 31 December 2021). During 2022, Atalaya drawn down some
of its existing credit facilities to financing the construction of 50 MW solar
plant (payable amount of €20.8 million at 30 June 2022) and in 2021 to pay
the Deferred Consideration. 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
1.73%. The maximum term of the facilities is six years. All borrowings are
unsecured.
At 30 June 2022, the Group had used €59.6 million of its facilities and had
undrawn facilities of €59.0 million.
18. Lease liabilities
(Euro 000's) 30 Jun 2022 31 Dec 2021
Non-current
Lease liabilities 4,625 4,913
4,625 4,913
Current
Lease liabilities 580 597
580 597
Lease liabilities
The Group entered into lease arrangements for the renting of land, 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 amounts to €0.2 million (2021: €0.3 million) for the six month
period ended 30 June 2022. The duration of the land lease is for a period of
thirteen years, payments are due at the beginning of the month escalating
annually on average by 1.5%. At 30 June 2022, the remaining term of this lease
is eleven years and a half.
The duration of the motor vehicle and laboratory equipment lease is for a
period of four years, payments are due at the beginning of the month
escalating annually on average by 1.5%. At 30 June 2022, the remaining term of
this motor vehicle and laboratory equipment lease is one year and a half, and
two years, respectively.
Since the Company acquired 100% of the shares of Cambridge Mineria Espana,
S.L. (renamed to Atalaya Masa Valverde, S.L.U.) in October 2020, a lease
arrangement for a warehouse rent was included. The duration of the warehouse
lease is for a period of thirteen years, payments are due at the beginning of
the month escalating based on the yearly Spanish consumer price index. At 30
June 2022, the remaining term of this lease is eleven years and a half.
(Euro 000's) 30 Jun 2022 31 Dec 2021
Minimum lease payments due:
- Within one year 580 597
- Two to five years 1,972 2,014
- Over five years 2,653 2,899
Present value of minimum lease payments due 5,205 5,510
(Euro 000's) Lease liabilities
Balance 1 January 2022 5,510
Additions -
Interest expense 10
Lease payments (315)
Balance at 30 June 2022 5,205
Balance at 30 June 2022
- Non-current liabilities 4,625
- Current liabilities 580
5,205
19. Acquisition, incorporation and disposal of subsidiaries
There were neither acquisition nor incorporation of subsidiaries during the
six month period to 30 June 2022.
20. Winding-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:
Three months ended Three months ended Six months ended 30 Jun 2022 Six months ended
30 Jun 2022 30 Jun 2021 30 Jun 2021
(Euro 000's)
Directors' remuneration and fees 238 240 496 505
Directors´ bonus ((1)) 357 438 357 438
Share option-based benefits and other benefits to directors 64 55 127 111
Key management personnel fees 141 136 282 260
Key management bonus ((1)) 239 265 239 265
Share option-based and other benefits to key management personnel 62 51 123 130
1,101 1,185 1,624 1,709
((1) ) These amounts related to the performance bonus for 2021
approved by the Board of Directors of the Company during H1 2022. Director's
bonus relates to the amount approved for the CEO as an executive director and
key management bonus relates to the amount approved for other key management
personnel which are not directors of Atalaya Mining plc. Bonuses for 2020 were
approved and paid in H2 2021.
21.2 Share-based benefits
On 25 June 2022, the Company announced that in accordance with the Company's
Long Term Incentive Plan 2020 which was approved by shareholders at the Annual
General Meeting on 25 June 2020, it has granted 1,150,000 share options to
Persons Discharging Managerial Responsibilities and other management.
The Options expire on 30 June 2027, five years from the deemed date of grant
(22 June 2022), have an exercise price of 357.50 pence per ordinary share,
being the last mid-market closing price on the grant date, and vest in three
equal tranches, one third on grant and the balance equally on the first and
second anniversary of the grant date.
21.3 Transactions with related parties/shareholders
i) Transaction with shareholders
Three months ended Three months ended Six months ended Six months ended
30 Jun 2022 30 Jun 2021 30 Jun 2022 30 Jun 2021
(Euro 000's)
Trafigura- Revenue from contracts 36,590 29,055 44,808 50,930
36,590 29,055 44,808 50,930
Losses relating provisional pricing within sales (3,197) (1,380) (1,803) (1,650)
Trafigura - Total revenue from contracts 33,394 27,675 43,005 49,280
ii) Period-end balances with related parties
(Euro 000's) 30 Jun 2022 31 Dec 2021
Receivables from related parties:
Recursos Cuenca Minera S.L. 56 56
Total (Note11) 56 56
The above balances bear no interest and are repayable on demand.
iii) Period-end balances with shareholders
(Euro 000's) 30 Jun 2022 31 Dec 2021
Trafigura - Debtor balance- subject to provisional pricing 12,315 20,283
Total (Note 11) 12,315 20,283
The above debtor balance arising from sales of goods and other balances bear
no interest and is repayable on demand.
22. Contingent liabilities
Judicial and administrative cases
In the normal course of business, the Group may be involved in legal
proceedings, claims and assessments. Such matters are subject to many
uncertainties, and outcomes are not predictable with assurance. Legal fees for
such matters are expensed as incurred and the Group accrues for adverse
outcomes as they become probable and estimable.
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 from 24 February 2022 are impacting the Global Economy
but cannot yet be predicted in full. The main concern now is the rising prices
for energy, fuel and other raw materials and rising inflation, which may
affect household incomes and business operating costs. The financial effect of
the current crisis on the Global Economy and overall business activities
cannot be estimated with reasonable certainty at this stage.
· On 4 January 2022 the subsidiary EMED Mining Spain, S.L. was
wound down.
· On 6 January 2022, the Company announced the approval of the
construction of the first phase of an industrial scale plant ("Phase I") that
utilises the E-LIX System ("E-LIX"), which will produce high value copper and
zinc metals from the complex sulphide concentrates sourced from Proyecto
Riotinto.
· On 26 January 2022, the Company announced that it was notified
that certain PDMRs (persons discharging managerial responsibilities) executed
options 1,350,000 ordinary shares.
· On 27 January 2022, Atalaya announced that, in accordance with
the Company's Long Term Incentive Plan 2020, it has granted 120,000 share
options an employee.
· On 3 February 2022, the Company announced the results of five
additional drill holes from its ongoing resource definition drilling programme
at Proyecto Masa Valverde ("PMV"). PMV is located in southern Spain
approximately 28 km to the south of Atalaya's 15Mtpa mill at Proyecto
Riotinto.
· On 22 February 2022, the Company announced that it was notified
on 21 February 2022, that certain PDMRs, sold 550,000 ordinary shares in
Atalaya, at a price of 440.0 pence per share.
· On 21 March 2022, further to the Trial in relation to Astor which
took place between 21 February and 1 March 2022, the Judgment was handed down.
The Judgment deals with matters of principle. The points that the Judge has
decided will dictate the amount of interest that is payable.
· On 24 March 2022, Atalaya announced that Mr. Harry Liu has
stepped down as a Non-Executive Director of the Company with immediate effect.
· On 4 April 2022, new shareholders of the Company, Newline
Insurance Company Limited, Brit Reinsurance (Bermuda) Limited, Brit Syndicates
Limited, Odyssey Reinsurance Company, acquired 5.08% of voting rights. In
addition, Allianz Global Investors GmbH, shareholder of the Company, increased
its % of voting rights from below 3% to 3.92%.
· On 5 April 2022, Atalaya announced a new Mineral Resource
Estimate, prepared in accordance with CIM guidelines and disclosure
requirements of NI 43-101, for its 100% owned Proyecto Masa Valverde.
· On 7 April 2022, the Company noted the announcement on 1 April
2022 by ICBC Standard Bank Plc ("ICBCS") confirming the sale of the entire
holding of Yanggu Xiangguang Copper Co. Ltd ("XGC").
· On 13 April 2022, Atalaya announced new Mineral Resource
Estimates, prepared in accordance with CIM guidelines and disclosure
requirements of NI 43-101, for its San Dionisio and San Antonio deposits.
· On 4 May 2022, Allianz Global Investors GmbH, shareholder of the
Company, increased its % of voting rights from below 3.92% to 4.07%.
· On 19 May 2022 the Board of Directors of the Company appointed
Kate Harcourt as an independent Non-Executive Director of the Company.
· On 19 May 2022, a PDMR of the Company, purchased 13,500 ordinary
shares in Atalaya at an average price of 364.0 pence per share
· On 23 June 2022, the Company has issued 22,500 ordinary shares of
7.5p in the Company pursuant to an exercise of share options by an employee.
· On 24 June 2022, the Company granted 1,225,000 share options to
PDMRs and other employees.
25. Events after the Reporting Period
· In July 2022, Atalaya increased its ownership interest in
Proyecto Ossa Morena to 99.9%, up from 51%, following completion of a capital
increase that will fund exploration activities.
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