REG - Atalaya Mining PLC - Q3 2023 Operations Update

Atalaya MiningAnnouncement

12/10/2023 07:00

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RNS Number : 8547P  Atalaya Mining PLC  12 October 2023

12 October 2023

Atalaya Mining Plc.

("Atalaya" or "the Company")

Q3 2023 Operations Update

On track to achieve full year production within original guidance range

 

Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce its operations
update for the third quarter of 2023 ("Q3 2023" or the "Period").

Proyecto Riotinto Operating Highlights

                          Q3                 Q2      Full Year
                          2023((1))  2022    2023    2023 Guidance
 Ore mined      M tonnes  3.8        3.8     3.9     ~15((2))
 Waste mined    M tonnes  9.7        5.8     8.6     ~30((2))
 Ore milled     M tonnes  3.9        3.9     4.1     15.3 - 15.8
 Cu grade       %         0.38       0.41    0.40    0.39 - 0.41((2))
 Cu recovery    %         87.01      84.62   87.18   86 - 87((2))
 Cu production  tonnes    12,541     13,453  14,212  53,000 - 54,000((2))

(1)   Figures for Q3 2023 are preliminary and final figures will be released
with Q3 2023 financial results.

(2)   Represents updated guidance.

Mining

Ore mined was 3.8 million tonnes in Q3 2023 (Q3 2022: 3.8 million tonnes),
compared with 3.9 million tonnes in Q2 2023.

Waste mined was 9.7 million tonnes in Q3 2023 (Q3 2022: 5.8 million tonnes),
compared with 8.6 million tonnes in Q2 2023. Waste mining during the Period
was consistent with budget and includes increased waste stripping at Cerro
Colorado in anticipation of the start of mining activities at San Dionisio in
late 2023.

Processing

The plant processed ore of 3.9 million tonnes during Q3 2023 (Q3 2022: 3.9
million tonnes), compared with 4.1 million tonnes in Q2 2023.

Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%), compared with 0.40% in Q2
2023.

Copper recoveries in Q3 2023 were 87.01% (Q3 2022: 84.62%), compared with
87.18% in Q2 2023, as a result of favourable ore characteristics during the
Period.

Production

Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453 tonnes),
compared with 14,212 tonnes in Q2 2023. Lower grades during the Period were
partially offset by recoveries that were higher than budget.

On-site copper concentrate inventories at 30 September 2023 were approximately
7,358 tonnes (30 June 2023: 7,291 tonnes). All concentrate in stock at the
beginning of the Period was delivered to the port at Huelva.

Copper contained in concentrates sold was 12,521 tonnes in Q3 2023 (Q3 2022:
14,040 tonnes), compared with 12,858 tonnes in Q2 2023.

Select Financial Highlights

Realised Copper Price

The average realised copper price (excluding QPs closed during the Period) was
$3.77/lb in Q3 2023 (Q3 2022: $3.52/lb), compared with $3.81/lb in Q2 2023.
The average spot copper price was $3.80/lb in Q3 2023.

Provisional Revenue Adjustments

For Q3 2023, settlement adjustments (for QPs closed during the Period) and
fair value adjustments (for open QPs based on copper forward curve prices as
at 30 September 2023) were negative €0.9 million.

Balance Sheet

The Company's balance sheet remains strong with consolidated cash and cash
equivalents of €119.0 million as at 30 September 2023.

Net of current and non-current borrowings of €52.3 million, net cash was
€66.7 million as at 30 September 2023, compared with €53.1 million as at
31 December 2022.

Electricity Prices

Estimated Realised Prices

Market electricity prices in Q3 2023 increased slightly from Q2 2023, in part
due to the impact of strikes at LNG export facilities in Australia on European
natural gas prices, but remained significantly below 2022 levels. After
including the contribution from the Company's 10-year power purchase agreement
("PPA"), realised electricity prices in Q3 2023 were approximately 60% lower
than the Company's average realised electricity price in 2022.

Renewable Energy Projects

Construction of the 50 MW solar plant at Riotinto continues to advance, with
start-up expected in late 2023 or early 2024. When fully operational, the
facility is expected to provide approximately 22% of Riotinto's current
electricity needs. Together, the 50 MW solar plant and long-term PPA will
provide over 50% of the Company's current electricity requirements at a rate
well below historical prices in Spain.

The Company continues to assess the potential installation of wind turbines at
Riotinto, which could supply additional low cost and carbon-free electricity
and contribute to the Company's decarbonisation objectives.

2023 Guidance

The Company remains on track to achieve full year production within its
original guidance, with the 2023 range now narrowed to 53,000 to 54,000 tonnes
(from 53,000 to 55,000 tonnes). Operating costs are trending in line with
expectations and the Company will provide further update in its Q3 2023
financial results.

Aggregate expenditures relating to non-sustaining capital investments (such as
E-LIX Phase I, the 50 MW solar plant, Riotinto tailings facility expansion)
and exploration activities continue to trend in line with FY2023 guidance,
although the composition is expected to vary including higher investments in
the E-LIX Phase I plant.

Asset Portfolio Update

Proyecto Riotinto

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

The Company is continuing with permitting activities associated with San
Dionisio, which represents a key component of the integrated mine plan that
was outlined in the recent Riotinto PEA.

E-LIX Phase I Plant

Construction activities continue at the E-LIX Phase I plant, with
commissioning expected during Q4 2023.

Once operational, the E-LIX plant is expected to produce high purity copper or
zinc metals on site, allowing the Company to potentially achieve higher metal
recoveries from complex polymetallic ores, lower transportation and
concentrate treatment charges and a reduced carbon footprint.

Riotinto District - Proyecto Masa Valverde ("PMV")

In March 2023, the Company announced that PMV was granted an AAU by the Junta
de Andalucía, following an application process that was initiated by the
Company in December 2021. The AAU is an integrated process that combines the
Environmental Impact Assessment and other authorisations and specifies
requirements to avoid, prevent and minimise a project's impacts on the
environment and the cultural heritage of the area. Various optimisation
workstreams continue.

Three core rigs are active and focused on step out drilling at the Mojarra
Trend, drill testing coincident fix loop electromagnetic ("FLEM") and airborne
gravity gradiometry ("AGG") anomalies and completing metallurgical and infill
drilling at the Masa Valverde deposit. The first phase of resource definition
drilling at the Campanario Trend was completed during the Period.

Proyecto Touro

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

The Xunta de Galicia has legislation that seeks to promote industry in Galicia
by simplifying the approval process. Business initiatives can be classified as
priority business initiatives ("IEP") and strategic industrial projects
("Proyecto Industrial Estratégico" or "PIE") which provide a variety of
development advantages. The Company believes that Touro fulfils the
requirements to be granted the status of a PIE in Galicia.

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

Running parallel with the ongoing Touro permitting process, the Company
continues to focus on numerous initiatives related to the social licence,
including engaging with the many stakeholders in the region to provide
detailed information on the new improved project design. Positive and
favourable feedback from numerous meetings with municipalities, farmers and
fishermen associations and other industries indicate meaningful support
towards the development of a new and modern mining project.

The Company continues to successfully restore the water quality of the rivers
around Touro and is operating its water treatment plant, which is addressing
the legacy issues associated with acid water runoff from the historical mine,
which closed in 1987. The field work carried out by Atalaya has resulted in an
immediate and visible improvement of the water systems surrounding the
project, with the progress being recognised by local stakeholders and the
media.

Atalaya continues to be confident that its approach to Touro, which includes
fully plastic lined thickened tailings with zero discharge, is consistent with
international best practice and will satisfy the most stringent environmental
conditions that may be imposed by the authorities prior to the development of
the project.

Proyecto Ossa Morena

Drilling continued to progress with one rig at the Guijarro-Chaparral
gold-copper project and the La Hinchona copper-gold project, both in the
central part of the district.  One rig is being mobilised to the flagship
Alconchel-Pallares copper-gold project.

Proyecto Riotinto East

Drill testing of selected coincident FLEM and AGG anomalies is in progress
with one rig.

Alberto Lavandeira, CEO, commented:

"We are pleased to be on track to achieve production within our original
guidance range, thanks to steady operational performance during the quarter.

Our two key capital projects - the E-LIX Phase I plant and the 50 MW solar
plant - continue to progress and there is significant activity on site. We
look forward to delivering these projects in the coming months, which are
expected to unlock value, reduce costs and lower our carbon footprint.

Regarding the outlook for copper, we continue to be confident in its strong
fundamentals. Even with economic uncertainties, the demand for copper is
growing thanks to massive new investments in infrastructure and the energy
transition. On the supply side, we have seen very few new large projects
approved in recent years, therefore the expectation remains that a substantial
deficit is unavoidable."

 

Contacts:

 SEC Newgate UK             Elisabeth Cowell / Tom Carnegie / Matthew Elliott  + 44 20 3757 6882
 4C Communications          Carina Corbett                                     +44 20 3170 7973
 Canaccord Genuity          Henry Fitzgerald-O'Connor /                        +44 20 7523 8000

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

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

 (Joint Broker)

 

About Atalaya Mining Plc

Atalaya is an AIM-listed mining and development group which produces copper
concentrates and silver by-product at its wholly owned Proyecto Riotinto site
in southwest Spain. Atalaya's current operations include the Cerro Colorado
open pit mine and a modern 15 Mtpa processing plant, which has the potential
to become a central processing hub for ore sourced from its wholly owned
regional projects around Riotinto that include Proyecto Masa Valverde and
Proyecto Riotinto East. In addition, the Group has a phased earn-in agreement
for up to 80% ownership of Proyecto Touro, a brownfield copper project in the
northwest of Spain, as well as a 99.9% interest in Proyecto Ossa Morena. For
further information, visit www.atalayamining.com
(http://www.atalayamining.com)

 

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