REG - Atalaya Mining PLC - Q3 and YTD 2022 Financial Results
09/11/2022 07:00
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RNS Number : 7555F Atalaya Mining PLC 09 November 2022
9 November 2022
Atalaya Mining Plc.
("Atalaya" and/or the "Group")
Q3 and YTD 2022 Financial Results
Full year guidance reaffirmed and positive outlook for Q4 and beyond
Atalaya Mining Plc (AIM: ATYM; TSX: AYM) is pleased to announce its third
quarter and nine-month results for the period ended 30 September 2022 ("Q3
2022" or the "Period" and "YTD 2022" respectively) together with its Unaudited
Interim Condensed Consolidated Financial Statements.
The Unaudited Interim Condensed Consolidated Financial Statements for the
period ended 30 September 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
· Consistent quarter of production, supporting confidence in full
year guidance
· EBITDA of €37.1 million in YTD 2022 despite extremely high
electricity prices and other input cost inflation, which resulted in EBITDA of
negative €4.3 million in Q3 2022
· Maintained a strong balance sheet with net cash of €55.6 million
· Continued investments in growth, future cost reductions and
decarbonisation via exploration programme, 50 MW solar plant and E-LIX Phase I
project
· Lower power prices post quarter end support positive outlook for Q4
2022 and into 2023 when new power purchase agreement and 50 MW solar plant are
expected to materially lower costs
Q3 and YTD 2022 Financial Results Summary
Period ended 30 September Q3 2022 Q3 2021 YTD 2022 YTD 2021
Revenues from operations €k 82,284 107,161 261,953 304,265
Operating costs €k (86,550) (58,362) (224,838) (156,054)
EBITDA €k (4,266) 48,799 37,115 148,211
(Loss)/profit for the period €k (7,219) 38,206 22,887 104,199
Basic (loss)/earnings per share € cents/share (4.7) 27.5 17.4 75.9
Dividend per share ((2)) $/share 0.036 0.395 0.036 0.395
Cash flows from operating activities €k (3,810) 51,214 17,572 124,244
Cash flows used in investing activities ((1)) €k (8,681) (6,982) (36,004) (77,835)
Cash flows from financing activities €k (12,647) (3,131) 2,816 51,710
Net cash position ((3)) €k 55,598 88,854 55,598 88,854
Working capital surplus €k 106,817 126,891 106,817 126,891
Average realised copper price US$/lb 3.52 4.24 4.06 4.17
(excluding QPs closed in the period)
Average realised copper price US$/lb 3.83 4.31 4.18 4.08
(including QPs closed in the period)
Cu concentrate produced (tonnes) 63,400 64,262 180,635 206,018
Cu production (tonnes) 13,453 13,893 38,300 42,225
Cash costs US$/lb payable 3.34 2.19 3.26 2.16
All-In Sustaining Cost ("AISC") US$/lb payable 3.49 2.48 3.47 2.49
((1) ) YTD 2021 includes €53 million early payment of the Deferred
Consideration to Astor.
((2) ) Dividend per share announced on 10 August 2022 and paid on 20
September 2022.
((3) ) Includes restricted cash and bank borrowings at 30 September 2022 and
30 September 2021.
Alberto Lavandeira, CEO commented:
"Q3 was a consistent quarter operationally with good throughput and improved
grades compared to earlier quarters in 2022. These trends are expected to
continue in Q4 and into 2023 and support our reiterated 2022 guidance.
In terms of financial results, we were impacted by lower copper prices and
very high inflationary pressures, most notably the price of electricity
including extremely severe spikes in August and September 2022. Since the end
of Q3, electricity prices have decreased by around 40%, due to mild weather
and growing wind generation in Spain, reduced industrial demand and a good
supply of LNG cargoes.
As a result, we expect that costs will moderate in Q4 2022 and look forward to
2023, when we will also benefit from our new long-term power purchase
agreement and the start-up of the 50 MW solar plant, which will together
provide around 50% of our electricity requirements at highly competitive
rates.
With the benefit of a strong balance sheet, we remain committed to investing
in growth. Through greenfield exploration, the development of higher-grade
orebodies and Touro, and operating a commercial scale E-LIX plant, we are
confident that Atalaya will transform into a growth oriented and diversified
multi-asset copper producer."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live
presentation relating to the Q3 and YTD 2022 results via the Investor Meet
Company platform at 2:30pm GMT today.
To register, please visit the following link and click "Add to Meet" Atalaya
via:
https://www.investormeetcompany.com/atalaya-mining-plc/register-investor
Management will also answer questions that have been submitted via the
Investor Meet Company dashboard.
Q3 and YTD 2022 Operating Results Summary
Units expressed in accordance with the international system of units (SI) Unit Q3 2022 Q3 2021 YTD 2022 YTD 2021
Ore mined Mt 3.8 3.4 11.3 10.0
Waste mined Mt 5.8 7.8 19.3 23.2
Ore processed Mt 3.9 3.9 11.5 12.0
Copper ore grade % 0.41 0.40 0.39 0.41
Copper concentrate grade % 21.22 21.62 21.20 20.50
Copper recovery rate % 84.62 87.24 85.70 85.63
Copper concentrate tonnes 63,400 64,262 180,635 206,018
Copper contained in concentrate tonnes 13,453 13,893 38,300 42,225
Payable copper contained in concentrate tonnes 12,819 13,251 36,494 40,165
Mining
Ore mined was 3.8 million tonnes in Q3 2022 (Q3 2021: 3.4 million tonnes) and
11.3 million tonnes in YTD 2022 (YTD 2021: 10.0 million tonnes).
Waste mined was 5.8 million tonnes in Q3 2022 (Q3 2021: 7.8 million tonnes)
and 19.3 million tonnes in YTD 2022 (YTD 2021: 23.2 million tonnes).
Processing
The plant processed ore of 3.9 million tonnes during Q3 2022 (Q3 2021: 3.9
million tonnes), consistent with the plant's ability to operate above its 15
million tonne per annum nameplate capacity. Throughput was 11.5 million tonnes
in YTD 2022 (YTD 2021: 12.0 million tonnes), with the decline a result of the
Q1 2022 transport sector strike and related maintenance stoppage.
Copper grade was 0.41% in Q3 2022 (Q3 2021: 0.40%) and 0.39% in YTD 2022 (YTD
2021: 0.41%). Lower grades in YTD 2022 were the result of blending with lower
grade stockpiles during H1 2022 due to pit sequencing, however, in Q4 2022
grades are expected to be higher than the average grade processed in YTD 2022.
Copper recoveries in Q3 2022 were 84.62%, which was consistent with
expectations but below the comparative period last year (Q3 2021: 87.24%) as a
result of the characteristics of the ore processed during the quarter. Copper
recoveries in YTD 2022 were 85.70% (YTD 2021: 85.63%).
Production
Copper production was 13,453 tonnes in Q3 2022 (Q3 2021: 13,893 tonnes) and
38,300 tonnes in YTD 2022 (YTD 2021: 42,225 tonnes). Lower production for the
nine-month period was due to lower grades (pit sequencing) and lower
throughput (Q1 2022 plant maintenance stoppage).
Q3 and YTD 2022 Financial Results Highlights
Income Statement
Revenues were €82.3 million in Q3 2022 (Q3 2021: €107.2 million) and
€262.0 million in YTD 2022 (YTD 2021: €304.3 million). Lower revenues were
the result of lower copper prices during the 2022 periods, as well as lower
copper concentrate volumes sold in YTD 2022 compared to the YTD 2021 period.
Operating costs were €86.6 million in Q3 2022 (Q3 2021: €58.4 million) and
€224.8 million in YTD 2022 (YTD 2021: €156.1 million) as a result of
significant increases in key input costs such as electricity, diesel,
explosives, steel and lime. Compared to the prior periods in 2021, the
increase in the cost of electricity in Q3 2022 and YTD 2022 was €20.2
million and €49.6 million, respectively.
EBITDA was negative €4.3 million in Q3 2022 (Q3 2021: positive €48.8
million) and positive €37.1 million in YTD 2022 (YTD 2021: positive €148.2
million). The decrease in EBITDA was driven by the combination of lower
revenues and significantly higher operating costs compared with the equivalent
periods in 2021.
Loss after tax was €7.2 million in Q3 2022 (Q3 2021: €38.2 million profit)
or a 4.7 cents loss per basic share (Q3 2021: 27.5 cents earnings per basic
share) and a €22.9 million profit in YTD 2022 (YTD 2021: €104.2 million
profit) or a 17.4 cents earnings per basic share (YTD 2021: 75.9 cents profit
per basic share).
Cash costs were $3.34/lb payable copper in Q3 2022 (Q3 2021: $2.19) and
$3.26/lb payable copper in YTD 2022 (YTD 2021: $2.16/lb), with the increases
due to significantly higher costs associated with electricity and other
supplies and lower production volumes, partially offset by the weaker Euro.
AISC were $3.49/lb payable copper in Q2 2022 (Q2 2021: $2.48/lb) and $3.47/lb
payable copper in YTD 2022 (YTD 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
negative €4.2 million in Q3 2022 (Q3 2021: positive €45.0 million) and
negative €3.8 million after working capital changes (Q3 2021: positive
€51.2 million). Working capital movements are mainly related to changes in
account receivables and payables due to timing differences. For YTD 2022, cash
flows from operating activities before changes in working capital were
positive €37.0 million (YTD 2021: positive €151.1 million) and positive
€17.6 million after working capital changes (YTD 2021: positive €124.2
million).
Cash flows used in investing activities were €8.7 million in Q3 2022 (Q3
2021: €7.0 million) and €36.0 million in YTD 2022 (YTD 2021: €77.8
million). Major investments in YTD 2022 included €12.1 million for the 50 MW
solar plant (YTD 2021: nil), €4.5 million in sustaining capex (YTD 2021:
€4.5 million) and €9.4 million to increase the tailings dam (YTD 2021:
€9.5 million). The YTD 2021 period included the early payment of the
deferred consideration to Astor.
Cash flows from financing activities were negative €12.6 million in Q3 2022
(Q3 2021: negative €3.1 million) as a result of debt repayments and the
payment of the interim 2022 dividend. Cash flows from financing activities
were positive €2.8 million in YTD 2022 (YTD 2021: positive €51.7 million).
Unsecured debt facilities were drawn in YTD 2022 in order to finance the 50 MW
solar plant, while in YTD 2021, unsecured debt facilities were drawn to fund
the payment of deferred consideration to Astor.
Balance Sheet
Consolidated cash and cash equivalents were €107.6 million at 30 September
2022 (31 December 2021: €107.5 million).
Net of current and non-current borrowings of €52.0 million, net cash was
€55.6 million as at 30 September 2022, compared to €60.1 million as at 31
December 2021.
Inventories of concentrate valued at cost were €5.8 million at 30 September
2022 (31 December 2021: €5.2 million). As at 30 September 2022, total
working capital was €106.8 million, compared to €102.4 million as at 31
December 2021.
Electricity Market in Spain
Situation Update
The ongoing conflict in Ukraine continues to impact global energy markets,
especially with respect to natural gas prices in Europe, which caused the
price of electricity in Spain to reach unprecedented levels of over €500/MWh
in March 2022.
The governments of Spain and Portugal responded to the energy crisis by
implementing a gas price cap, which took effect in mid-June 2022. While the
legislation had a positive impact on market electricity prices, it also
introduced a new mechanism whereby certain power consumers must make
additional "adjustment" payments to compensate gas power plants that are
disadvantaged by the gas price cap. As a result, consumers like Atalaya have
been subject to realised electricity prices that are significantly higher than
the observed spot market rates.
During Q3 2022, European gas prices increased to levels well beyond the
previous peaks in March 2022, following the curtailment of gas deliveries via
Nord Stream 1 and then the indefinite curtailment of gas deliveries following
the damage to the Nord Stream pipelines in late September 2022. In addition,
Spain experienced a historic heat wave in late August 2022, triggering high
energy demand and electricity prices near the March 2022 peaks.
As a result, the Company's realised electricity price for Q3 2022 was around
€290/MWh, the highest quarterly average so far in 2022. Of this total, the
market price component averaged around €150/MWh and the gas price
"adjustment" component accounted for the remainder. For reference, the
Company's annual average electricity price for 2021 was around €65/MWh. As
previously disclosed, an increase in realised electricity prices of €100/MWh
results in an increase to the Company's annual operating costs of around €37
million.
Subsequent to the end of Q3 2022, expected realised electricity prices have
decreased by around 40%, as a result of mild weather and growing wind
generation in Spain, lower industrial demand for electricity and gas in Europe
and a growing supply of LNG cargoes into Europe. Should these positive trends
continue for the remainder of Q4 2022, the Company's financial performance
would benefit meaningfully from moderated electricity costs.
Electricity Procurement Strategy
Looking forward into 2023, the Company's cost structure is expected to benefit
materially from the new long-term power purchase agreement ("PPA") and
start-up of Atalaya's 50 MW solar plant. Combined, the PPA and the 50 MW solar
plant will provide over 50% of the Company's electricity requirements at an
average final cost of less than €40/MWh, representing a reduction of almost
90% from the average realised electricity price of around €290/MWh in Q3
2022. Compared to Q3 2022 average prices, the PPA and 50 MW solar plant would
imply annual cost savings of around €50 million.
Construction of the 50 MW solar plant is progressing, with the delivery of
panels to site in the coming weeks and orders in place for all critical
equipment. Targeted start-up is mid-2023.
Atalaya continues to evaluate additional renewable power projects, including
the installation of wind turbines at Riotinto dedicated to self-consumption.
In September 2022, an evaluation tower was installed to test the area's wind
characteristics and compare measurements to extensive historical ground level
data. Based on preliminary measurements, it is estimated that the wind
turbines could potentially produce around 15% of current electricity needs.
Such initiatives would build on Atalaya's ongoing strategy to develop new
sources of reliable, low cost and carbon-free electricity for its operations.
Longer term, the Company is optimistic on the electricity market in Spain,
which is a leading producer of renewable energy in Europe. Since 2020, Spain
has added over 6 GW of solar photovoltaic capacity and significant additions
are expected to come onstream in the next 6-12 months. As a result,
electricity prices are expected to decrease in the coming years, with the
futures market indicating rates of €40-50/MWh by the end of the decade.
Outlook for 2022
Production
As announced in the Company's Q3 2022 Operations Update, full year copper
production guidance remains at 52,000 - 54,000 tonnes. The copper grade for Q4
2022 is expected to be higher than the average grade processed in YTD 2022.
Operating Costs
The cost guidance ranges that were announced in the Company's Q2 and H1 2022
Financial Results are also unchanged. Cash costs and AISC for 2022 are
expected to be in the range of $2.95 - 3.25/lb copper payable and $3.25 -
3.45/lb copper payable, respectively. Although input cost inflation remains
high, realised electricity prices so far in Q4 2022 have decreased
meaningfully from the average price realised in Q3 2022, which was the highest
quarterly average in YTD 2022.
Capital Expenditures
Total capital expenditures for 2022 are expected to be consistent with the
original guidance provided by the Company in its 2021 Annual Results.
Exploration
The Company's original exploration budget for 2022 was €10 million. As
previously disclosed, equipment availability issues and high temperatures
during the summer have delayed drilling campaigns, and as a result, the
Company now expects 2022 exploration spending to be less than €5 million.
Asset Portfolio Update
Growth Strategy
Atalaya continues to execute on its strategy of growing its resource base and
production potential from assets located in regions with modern infrastructure
and long histories as mining districts.
Riotinto District - San Dionisio and San Antonio
The Company is advancing a preliminary economic assessment ("PEA") which will
include the evaluation of a scenario that combines Cerro Colorado reserves
with higher grade material from San Dionisio, targeting an uplift to copper
production by increasing the blended head grade. The permitting process for
San Dionisio is currently underway.
Subsequent to the end of the Period, a NI 43-101 Technical Report for Proyecto
Riotinto, including the San Dionisio open pit and the San Dionisio and San
Antonio underground deposits, was filed on SEDAR in order to fulfil the
Company's reporting obligations in Canada.
Riotinto District - Proyecto Masa Valverde ("PMV")
Atalaya continues to advance its exploration programme at PMV. At present,
there are three drill rigs on site - the first is devoted to resource
definition at the Campanario Trend, the second is completing infill and step
out drilling at the Masa Valverde ("MV") deposit, while the third has
commenced first drill testing of Fix Loop Electromagnetic ("FLEM") anomalies
at the Mojarra Trend, located 1km north and parallel to the Campanario Trend.
Initial drilling results from Campanario were announced in July 2022 and
included shallow high grade intervals such as 18.10m at 1.19% Cu, 0.08% Zn,
0.32% Pb and 36.66 g/t Ag from 43.20m (hole CA21) and 35.20m at 0.70% Cu,
1.53% Zn, 1.39% Pb and 62.50 g/t Ag from 77.80m (hole CA15).
Atalaya is currently progressing a PEA which will consider operating PMV as a
satellite deposit by processing mined material at Riotinto's 15 Mtpa plant.
The permitting process for PMV is ongoing.
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.
Running parallel with the permitting process, the Company is focused on
numerous initiatives related to securing the social license, including
engaging with the many stakeholders in the region in advance of its plans to
submit a new improved project design. Positive and favourable feedback from
numerous meetings with municipalities, farmers and fishermen associations and
other industries indicate meaningful support towards the development of a new
and modern mining project.
The Company is now operating a new water treatment plant at Touro, which is
addressing the legacy issues associated with acid water runoff from the
historical mine, which closed in 1987. The construction of the treatment plant
was contemplated in the original project proposal, but Atalaya volunteered to
fix the historical acid water issues prior to the new Environmental Impact
Assessment ("EIA") in order to demonstrate its operating philosophy and the
benefits of modern operating systems. The field work carried out by Atalaya
has resulted in an immediate and visible improvement of the water systems
surrounding the project. Atalaya continues to be confident that its approach
to Touro, which includes fully plastic lined thickened tailings with zero
discharge, is consistent with the 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 Activities
At Riotinto East, the Peñas Blancas investigation permit was granted. Drill
target definition is in progress and the first drill testing of selected
anomalies is expected by year end.
At Proyecto Ossa Morena, the first drilling campaign is now underway at the
Hinchona copper-gold target, with four holes having been completed. Drilling
at the flagship Alconchel-Pallares copper-gold project is expected to commence
during Q4 2022.
E-LIX Phase I Plant
Construction of the E-LIX Phase I plant continues to advance, including the
assembly of metal structures and the delivery of equipment to site. As
announced in the Q3 Operations Update, the Company expects the plant to be
ready for commissioning by Q1 2023.
Once operational, the E-LIX plant is expected to produce high purity copper
and zinc metals on site, allowing the Company to potentially achieve higher
metal recoveries from complex ore, lower transportation and concentrate
treatment charges and a reduced carbon footprint.
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)
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
30 September 2022
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.
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 September 2022 and results of
operations for the three and nine months ended 30 September 2022 and 2021.
This report has been prepared as of 8 November 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 September 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 September 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 September 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, Proyecto
Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the
Company has an earn-in agreement to acquire three investigation permits at
Proyecto Riotinto Este.
Proyecto Riotinto
The Company owns and operates through a wholly owned subsidiary, "Proyecto
Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the
Andalusia region of Spain, approximately 65 km northwest of Seville. A
brownfield expansion of this mine was completed in 2019 and successfully
commissioned by 31 March 2020.
Proyecto Touro
The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of
Proyecto Touro, as part of an earn-in agreement which will enable the Group to
acquire up to 80% of the copper project. Proyecto Touro is located in Galicia,
north-west Spain. Proyecto Touro is currently in the permitting process.
In November 2019, Atalaya executed the option to acquire 12.5% of
Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro,
with known additional mineralisation, which will add to the potential of
Proyecto Touro.
Proyecto Masa Valverde
On 21 October 2020, the Company announced that it entered into a definitive
purchase agreement to acquire 100% of the shares of Cambridge Mineria España,
S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which
fully owns the Masa Valverde polymetallic project located in Huelva (Spain).
Proyecto Masa Valverde is currently in the permitting process.
Proyecto Riotinto Este
In December 2020, Atalaya entered into a Memorandum of Understanding with a
local private Spanish company to acquire a 100% beneficial interest in three
investigation permits (known as Peñas Blancas, Cerro Negro and Herreros
investigation permits), which cover approximately 12,368 hectares and are
located immediately east of Proyecto Riotinto.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51% interest in Rio
Narcea Nickel, S.L., which 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.
2. Overview of Operational Results
Proyecto Riotinto
The following table presents a summarised statement of operations of Proyecto
Riotinto for the three and nine months ended 30 September 2022 and 2021,
respectively.
Units expressed in accordance with the international system of units (SI) Unit Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Ore mined t 3,816,688 3,420,922 11,344,206 10,041,248
Waste mined t 5,753,382 7,789,790 19,332,317 23,245,823
Ore processed t 3,923,498 3,944,934 11,451,805 11,976,051
Copper ore grade % 0.41 0.40 0.39 0.41
Copper concentrate grade % 21.22 21.62 21.20 20.50
Copper recovery rate % 84.62 87.24 85.70 85.63
Copper concentrate t 63,400 64,262 180,635 206,018
Copper contained in concentrate t 13,453 13,893 38,300 42,225
Payable copper contained in concentrate t 12,819 13,251 36,494 40,165
Cash cost* US$/lb payable 3.34 2.19 3.26 2.16
All-in sustaining cost* US$/lb payable 3.49 2.48 3.47 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 3.9 million tonnes consistent with throughput in Q3 2021
of 3.9 million tonnes, highlighting the plant's ability to operate above its
15 million tonne per annum nameplate capacity.
Copper grade was 0.41% in Q3 2022, representing an increase from the
comparative period in Q3 2021 of 0.40%.
Copper recoveries in Q3 2022 were 84.62%, which were consistent with
expectations but below Q3 2021 due to the characteristics of the ore processed
during the quarter.
Copper production in Q3 2022 was 13,453 tonnes, which was in line with
production in Q3 2021.
On-site copper concentrate inventories at the end of Q3 2022 were
approximately 4,349 tonnes.
Nine months operational review
Ore processed in YTD 2022 was 11,451,805 tonnes, below the comparable period
in YTD 2021 as a result of the Q1 2022 transportation sector strike and
temporary maintenance shutdown.
Ore grade during YTD 2022 was 0.39% Cu compared with 0.41% Cu in YTD 2021, due
to lower grades earlier in 2022 as a result of blending with lower grade
stockpiles due to pit sequencing. Copper recovery was 85.70% versus 85.63% in
YTD 2021. Concentrate production amounted to 180,635 tonnes, which was below
YTD 2021 production of 206,018 tonnes.
Production of copper contained in concentrate during YTD 2022 was 38,300
tonnes, below the comparable with 42,225 tonnes in 2021. Payable copper in
concentrates was 36,494 tonnes compared with 40,165 tonnes of payable copper
in YTD 2021.
3. Outlook
The forward-looking information contained in this section is subject to the
risk factors and assumptions contained in the cautionary statement on
forward-looking statements included in the Basis of Reporting. The Company is
aware that the inflationary pressure on the goods and services required for
its business along with the geopolitical developments in Ukraine and its
impact on energy prices may still have further impact on how the Company can
manage it operations and is accordingly keeping its guidance under regular
review. Should the Company consider the current guidance no longer achievable,
then the Company will provide a further update.
Operational guidance
Guidance for Proyecto Riotinto is unchanged from previously announced outlook.
Unit Guidance 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
As announced in the Company's Q3 2022 Operations update, full year copper
production guidance continues to be 52,000 - 54,000 tonnes. The copper grade
for Q4 2022 is expected to be higher than the average grade processed in YTD
2022.
The cost guidance ranges that were announced in the Company's Q2 and H1 2022
Financial Results are also unchanged. Cash costs and AISC for 2022 are
expected to be in the range of $2.95 - 3.25/lb copper payable and $3.25 -
3.45/lb copper payable, respectively. Although input cost inflation remains
high, realised electricity prices so far in Q4 2022 have decreased
meaningfully from Q3 2022 levels, including the spikes in August 2022. This
decrease is primarily the result of lower European gas prices, which have
benefitted from mild weather and sufficient supply of LNG cargoes.
4. Overview of the Financial Results
The following table presents summarised consolidated income statements for the
three and six months ended 30 September 2022, with comparatives for the three
and nine months ended 30 September 2021, respectively.
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Revenues 82,284 107,161 261,953 304,265
Costs of sales (84,768) (55,358) (217,757) (149,137)
Administrative and other expenses (905) (2,287) (5,356) (5,312)
Exploration expenses (92) (423) (456) (822)
Care and maintenance expenditure (789) (281) (1,559) (783)
Other income 4 (13) 290 -
EBITDA (4,266) 48,799 37,115 148,211
Depreciation/amortisation (9,039) (7,808) (25,344) (23,634)
Net foreign exchange gain 5,633 2,936 15,727 4,967
Net finance cost (510) (456) (1,451) (786)
Tax 963 (5,265) (3,160) (24,559)
(Loss)/Profit for the period (7,219) 38,206 22,887 104,199
Three months financial review
Revenues for the three-month period ended 30 September 2022 amounted to
€82.3 million (Q3 2021: €107.2 million). Lower revenues compared with the
same quarter in the previous year were driven by lower realised copper prices
compared with Q3 2021 partially offset by stronger US Dollar rate against the
Euro.
Realised prices including QPs closed in the Period were $3.83/lb copper during
Q3 2022 compared with $4.31/lb copper in Q3 2021. The realised price,
excluding QPs closed in the Period were approximately $3.52/lb during the
quarter.
Costs of sales for the three-month period ended 30 September 2022 amounted to
€84.8 million, compared with €55.4 million in Q3 2021. Unit operating
costs in Q3 2022 were significantly higher than in Q3 2021 due to the high
cost of electricity, diesel and other supplies as result of inflation and the
geopolitical situation in Ukraine.
Cash costs in Q3 2022 were $3.34/lb payable copper compared with $2.19/lb
payable copper in the same period last year. Q3 2022 operating costs were
higher than in Q3 2021 mainly due to the significantly higher cost of
electricity (€20.2 million higher) and other supplies, despite the stronger
US Dollar/Euro rate which offset a portion of the higher operating costs. AISC
for Q3 2022, excluding one-off investments in the tailings dam, were $3.49/lb
payable copper compared with $2.48/lb payable copper in Q3 2021.
Sustaining capex for Q3 2022 amounted to €1.6 million compared with €1.1
million in Q3 2021. Sustaining capex mainly related to continuous enhancements
in the processing systems of the plant. In addition, the Company invested
€2.9 million in the project to increase the tailings dam during Q3 2022 (Q3
2021: €2.8 million). Stripping costs capitalised during Q3 2022 amounted to
€nil (Q3 2021: €2.5 million).
Capex associated with the construction of the 50 MW solar plant amounted to
€0.4 million in Q3 2022, while investments in the E-LIX Phase I plant
totalled €6.5 million, of which €4.9 million was booked as long term loans
to Lain Technologies Ltd.
Administrative and other expenses amounted to €0.9 million (Q3 2021: €2.3
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 September 2022 amounted to €0.1 million (Q3 2021: €0.4 million)
while an additional €0.9 million in project costs were capitalised.
EBITDA for the three months ended 30 September 2022 amounted to negative
€4.3 million compared with positive EBITDA for Q3 2021 of €48.8 million.
The main item below the EBITDA line is depreciation and amortisation of €9.0
million (Q3 2021: €7.8 million). Net financing costs for Q3 2022 amounted to
€0.5 million (Q3 2021: €0.5 million).
Nine months financial review
Revenues for the nine-month period ended 30 September 2022 amounted to
€262.0 million (YTD 2021: €304.3 million). Reduced revenues were driven by
lower copper prices and lower volumes of concentrate sold in YTD 2022
partially offset by stronger average US Dollar rates against Euro.
Copper concentrate production during the nine-month period ended 30 September
2022 was 180,635 tonnes (YTD 2021: 206,018 tonnes) with 181,541 tonnes of
copper concentrates sold in the period (YTD 2021: 213,966 tonnes). Lower
production levels were mainly the result of lower grades and lower throughput
following the transport sector strike in Q1 2022. Inventories of concentrates
as at the reporting date were 4,349 tonnes (31 Dec 2021: 4,232 tonnes).
Realised copper prices including QPs closed for YTD 2022 were $4.18/lb
compared with $4.08/lb in the same period of 2021. Concentrates were sold
under offtake agreements in place. The Company did not enter into any hedging
agreements in either 2022 or 2021.
Costs of sales for the nine-month period ended 30 September 2022 amounted to
€217.8 million, compared with €149.1 million in Q3 2021. Unit operating
costs in YTD 2022 were significantly higher than in YTD 2021 due to the
significantly higher cost of electricity (€49.6 million higher), diesel and
other supplies as result of inflation and the geopolitical situation in the
Ukraine.
Cash costs during YTD 2022 were $3.26/lb payable copper compared with $2.16/lb
payable copper in the same period last year. Higher cash costs were primarily
due to the significantly higher electricity price as well as increased costs
for other supplies. The stronger US Dollar/Euro rate in YTD 2022 offset a
portion of the higher operating costs. AISC excluding investment in the
tailings dam in the nine-month period were $3.47/lb payable copper compared
with $2.49/lb payable copper in YTD 2021. The increase is mainly attributable
to the higher cash costs despite lower capitalised stripping costs, which
amounted to €0.7 million in YTD 2022 compared with €8.3 million invested
in YTD 2021.
Sustaining capex for the nine-month period ended 30 September 2022 amounted to
€4.5 million, compared with €4.5 million in the same period the previous
year. Sustaining capex related to enhancements in processing systems of the
plant. In addition, the Company invested €9.4 million in the project to
increase the tailings dam, compared with €9.5 million in 2021.
Capex associated with the construction of the 50 MW solar plant amounted to
€12.1 million in YTD 2022, while investments in the E-LIX Phase I plant
totalled €12.9 million, of which €10.2 million was booked as long-term
loans to Lain Technologies Ltd.
Corporate costs for the first nine-month period ended 30 September 2022 were
€5.4 million, compared with €5.3 million in YTD 2021. Corporate costs
mainly include the Company's overhead expenses.
Exploration costs related to Atalaya's project portfolio for the nine-month
period ended 30 September 2022 and amounted to €0.5 million (YTD 2021:
€0.8 million) while an additional €2.2 million in project costs were
capitalised.
EBITDA for the nine months ended 30 September 2022 amounted to €37.1
million, compared with €148.2 million in YTD 2021.
Depreciation and amortisation amounted to €25.3 million for the nine-month
period ended 30 September 2022 (YTD 2021: €23.6 million) as a result of the
higher finished assets under construction.
Net finance costs for YTD 2022 amounted to €1.5 million (YTD 2021 €0.8
million).
On 10 August 2022 the Board declared an interim dividend of US$0.036 per
share.
Copper prices
The average realised copper price excluding QPs decreased by 17.0% from $4.24
per pound in Q3 2021 to $3.52 per pound in Q3 2022. Realised copper prices
including QPs closed decreased by 11.0% from $4.31 per pound in Q3 2021 to
$3.83 per pound in Q3 2022.
The average prices of copper for the three months ended 30 September 2022 and
2021 are summarised below:
(USD per pound) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Realised copper price excluding QPs closed 3.52 4.24 4.06 4.17
Realised copper price including QPs closed 3.83 4.31 4.18 4.08
Market copper price (period average) 3.51 4.25 4.12 4.17
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. Higher realised prices than
market averages are mainly due to the final settlement of invoices where QP
was fixed in the previous quarter due to a short open period when copper
prices were higher. Q3 2022 realised price excluding QPs closed was
approximately $3.52/lb, in line with average spot prices for the quarter.
5. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost
per pound of payable copper", "All-In Sustaining Costs" ("AISC") and "realised
prices" in this report. Non-IFRS measures do not have any standardised meaning
prescribed under IFRS, and therefore they may not be comparable to similar
measures presented by other companies. These measures are intended to provide
additional information and should not be considered in isolation or as a
substitute for indicators prepared in accordance with IFRS.
EBITDA includes gross sales net of penalties and discounts and all operating
costs, excluding finance, tax, impairment, depreciation and amortisation
expenses.
Cash Cost per pound of payable copper includes cash operating costs, including
treatment and refining charges ("TC/RC"), freight and distribution costs net
of by-product credits. Cash Cost per pound of payable copper is consistent
with the widely accepted industry standard established by Wood Mackenzie and
is also known as the C1 cash cost.
AISC per pound of payable copper includes C1 Cash Costs plus 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 and before silver credits,
TC/RCs, penalties freights and other cost items included in the sales invoices
and booked as revenues. Realised price is consistent with the widely accepted
industry standard definition.
6. Liquidity and Capital Resources
Atalaya monitors factors that could impact its liquidity as part of Atalaya's
overall capital management strategy. Factors that are monitored include, but
are not limited to, the market price of copper, foreign currency rates,
production levels, operating costs, capital and administrative costs.
The following is a summary of Atalaya's cash position and cash flows as at 30
September 2022 and 31 December 2021.
Liquidity information
(Euro 000's) 30 Sep 2022 31 Dec 2021
Unrestricted cash and cash equivalents at Group level 58,268 48,375
Unrestricted cash and cash equivalents at Operation level 49,029 43,722
Restricted cash and cash equivalents at Operation level 331 15,420
Consolidated cash and cash equivalents 107,628 107,517
Net cash position ((1)) 55,598 60,073
Working capital surplus 106,817 102,430
((1) ) Includes borrowings
Unrestricted cash and cash equivalents (which include cash at both Group level
and Operation level) as at 30 September 2022 increased to €107.3 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 €0.3 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 potential liability to
Astor on costs) reverted to the Company and it has been classified as
unrestricted cash.
As of 30 September 2022, Atalaya reported a working capital surplus of
€106.8 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 Q3 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 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Cash flows (used in) / from operating activities (3,810) 51,214 17,572 124,244
Cash flows used in investing activities (8,681) (6,982) (36,004) (77,835)
Cash flows (used in) / from financing activities (12,647) (3,131) 2,816 51,710
Net (decrease) / increase in cash and cash equivalents (25,138) 41,101 (15,616) 98,119
Net foreign exchange differences 5,633 6,999 15,727 4,968
Total net cash flow for the period (19,505) 48,100 111 103,087
Three months cash flows review
Cash and cash equivalents decreased by €19.5 million during the three months
ended 30 September 2022. This was due to cash used in operating activities
amounting to €3.8 million, the cash used in investing activities amounting
to €8.7 million and the cash used from financing activities totalling
€12.6 million and partially offset by net foreign exchange differences of
€5.6 million.
Cash generated from operating activities before working capital changes was
€4.2 million. Atalaya increased its trade receivables in the period by
€9.8 million, decreased its inventory levels by €0.6 million and increased
its trade payables by €11.8 million.
Investing activities during the quarter consumed €8.7 million, relating
mainly to the 50 MW solar plant construction, tailings dam project, the
PP&E portion of the E-LIX Phase I Plant and continuous enhancements in the
processing systems of the plant.
Financing activities during the quarter were negative €12.6 million as
result of debt repayments and payment of the 2022 interim dividend.
Nine months cash flows review
Cash and cash equivalents increased by €0.1 million during the nine-month
period ended 30 September 2022. This was due to cash from operating activities
amounting to €17.6 million, cash used in investing activities amounting to
€36.0 million, cash from financing activities amounting to €2.8 million
and net foreign exchange differences of €15.7 million.
Cash generated from operating activities before working capital changes was
€37.0 million. Atalaya increased its trade payables in the period by €15.5
million, increased its inventory levels by €13.1 million and increased its
trade receivable balances by €17.7 million.
Investing activities during YTD 2022 amounted to €36.0 million, relating
mainly to the 50 MW solar plant construction, tailings dam project, the
PP&E portion of the E-LIX Phase I Plant, the acquisition of lands around
Riotinto and continuous enhancements in the processing systems of the plant.
Financing activities during the YTD 2022 increased by €2.8 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% and are partially offset by schedule repayments during the
period.
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 nine months ended 30 September 2022, Atalaya recognised a
foreign exchange profit of €5.6 million and €15.7 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 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Average rates for the periods
GBP - EUR 0.8563 0.8553 0.8472 0.8636
USD - EUR 1.0070 1.1788 1.0638 1.1962
Spot rates as at
GBP - EUR 0.8830 0.8605 0.8830 0.8605
USD - EUR 0.9748 1.1579 0.9748 1.1579
7. Sustainability
Health and Safety
Despite the good trend in the first half of the year 2022, the results for the
third quarter have not improved with respect to the same period of the
previous year, in consequence, the frequency and severity index, up until 30
September 2022 are 7.0 and 0.16, respectively. In Q3 2022 there were seven
minor accidents with sick leave. This means that it is necessary to redouble
our efforts to enhance the safety culture, including that of contractors, in
order to reach "zero injuries".
The consolidation of the leadership in site field activity and its integration
into the company's Management System should be highlighted. Random checks at
the entrances and exits to prevent work under the influence of psychoactive
substances are operating normally. In this respect, the campaign to raise
awareness about working without being under the influence of alcohol and other
psychoactive substances continues.
In this quarter, training our staff continued on basic life support and rules
of action in the event of health emergencies.
Finally, the Proyecto Riotinto health and safety management system has
undergone the legal audit established by the Occupational Risk Prevention Act,
with successful outcomes.
Environment
During the third quarter of 2022, the environmental department has continued
environmental monitoring of the site activities and management of the natural
environment. Key points of the quarter:
· Four minor environmental incidents (spillages over unpaved and
paved areas) were registered.
· A total rainfall of 37,9 l/m2 was recorded in Q3 2022, which was
around 119% more than in the same period of previous year. The total rain
collected for the hydrological year (October 2021 to September 2022) is 405,4
l/m2, which is 32% less than the rainfall recorded in the previous
hydrological year.
· On 22 June 2022 the document to request AAI (Plant Environmental
Permit) for E-LIX Phase I Plant was submitted.
· The additional measures included in the action plan for dust control
continued to be implemented, increasing 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-point (diffuse) emissions
into the atmosphere have been carried out, and the results of the controls are
within the limit values set out in the regulations. The rest of periodic and
mandatory controls have been carried out without incidents. In addition,
during the quarter, several reports were handed to the Administration bodies.
· Environmental inspections were performed daily, mainly focused on
chemical storage and handling, housekeeping, waste management, uncontrolled
releases and environmentally friendly practices carried out in the project by
ARM's and contractors' personnel. Additionally, dust control and drainage
system inspections were performed regularly. 96 inspections in total were
carried out during the third quarter, including, plant, mine area and the
contractors' camps.
Corporate Social Responsibility
Social responsibility activities have made steady progress in the third
quarter of the year, with Atalaya Mining and its wholly owned Fundación
Atalaya Riotinto leading multiple initiatives to reinforce its support to the
communities surrounding the projects.
In this regard, Atalaya is working with the municipalities in various
projects, based on the already long standing collaboration agreements in
place. Example of this includes the agreements made with the municipality of
Campofrío, that will support a street refurbishment project that includes the
acquisition and installation of urban furniture, ornamental items and a new
fountain. Also, the municipality of Zalamea La Real has implemented the second
phase of its integral project to solve historical issues with its municipal
water supply system. Finally, La Granada de Riotinto and Atalaya have agreed
to start the refurbishment of a public playground and the municipal sporting
facilities.
The Foundation has also agreed to support a number of initiatives by local
institutions, associations and individuals, including the support to the
publication of a book by a local writer, the sponsoring of a local cycling
team formed by Atalaya´s employees and the release of an album by a local
renowned musician.
8. Risk Factors
Due to the nature of Atalaya's business in the mining industry, the Group is
subject to various risks that could materially impact the future operating
results and could cause actual events to differ materially from those
described in forward-looking statements relating to Atalaya. Readers are
encouraged to read and consider the risk factors detailed in Atalaya's
audited, consolidated financial statements for the year ended 31 December
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 COVID-19, inflationary pressure on
goods and services required for the business and geopolitical developments
worldwide.
9. Critical accounting policies, estimates, judgements, assumptions and
accounting changes
The preparation of Atalaya's Financial Statements in accordance with IFRS
requires management to make estimates, judgements and assumptions that affect
amounts reported in the Financial Statements and accompanying notes. There is
a full discussion and description of Atalaya's critical accounting policies in
the audited consolidated financial statements for the year ended 31 December
2021.
As at 30 September 2022, there are no significant changes in critical
accounting policies or estimates to those applied in 2021.
10. Other Information
Additional information about Atalaya Mining Plc. is available at www.sedar.com
(http://www.sedar.com) and at www.atalayamining.com
(http://www.atalayamining.com)
Unaudited interim condensed consolidated financial statements on subsequent
pages
By Order of the Board of Directors
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2022 and 2021
(Euro 000's) Note Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Revenue 4 82,284 107,161 261,953 304,265
Operating costs and mine site administrative expenses (84,450) (55,063) (217,082) (148,533)
Mine site depreciation and amortization (9,039) (7,808) (25,344) (23,634)
Gross (loss)/profit (11,205) 44,290 19,527 132,098
Administration and other expenses (905) (2,287) (5,356) (5,312)
Share-based benefits 15 (318) (295) (675) (604)
Exploration expenses (92) (423) (456) (822)
Care and maintenance expenditure (789) (281) (1,559) (783)
Operating (loss)/profit (13,309) 41,004 11,481 124,577
Other income 4 (13) 290 -
Net foreign exchange gain 3 5,633 2,936 15,727 4,967
Net Finance costs 5 (510) (456) (1,451) (786)
(Loss)/Profit before tax (8,182) 43,471 26,047 128,758
Tax 6 963 (5,265) (3,160) (24,559)
(Loss)/Profit for the period (7,219) 38,206 22,887 104,199
(Loss)/Profit for the period attributable to:
- Owners of the parent 7 (6,608) 38,422 24,274 104,863
- Non-controlling interests (611) (216) (1,387) (664)
(7,219) 38,206 22,887 104,199
(Loss)/Earnings per share from operations attributable to equity holders of
the parent during the period:
Basic (loss)/earnings per share (EUR cents per share) 7 (4.7) 27.5 17.4 75.9
Fully diluted (loss)/earnings per share (EUR cents per share) 7 (4.6) 26.7 17.0 74.2
(Loss)/Profit for the period (7,219) 38,206 22,887 104,199
Other comprehensive (loss)/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) (36) (12) (34)
'OCI'
Total comprehensive (Loss)/income for the period (7,225) 38,170 22,875 104,165
Total comprehensive (Loss)/income for the period attributable to:
- Owners of the parent 7 (6,614) 38,386 24,262 104,829
- Non-controlling interests (611) (216) (1,387) (664)
(7,225) 38,170 22,875 104,165
The notes on subsequent pages are an integral part of these Unaudited Interim
Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Financial Position
(All amounts in Euro thousands unless otherwise stated)
As at 30 September 2022 and 2021
(Euro 000's) Note 30 Sep 2022 31 Dec 2021
Assets Unaudited Audited
Non-current assets
Property, plant and equipment 9 346,303 333,096
Intangible assets 10 56,205 57,368
Trade and other receivables 12 13,860 5,330
Non-current financial assets 12 1,101 1,101
Deferred tax asset 4,749 5,564
422,218 402,459
Current assets
Inventories 11 37,897 24,781
Trade and other receivables 12 61,162 50,128
Tax refundable 221 483
Other financial assets 27 39
Cash and cash equivalents 13 107,628 107,517
206,935 182,948
Total assets 629,153 585,407
Equity and liabilities
Equity attributable to owners of the parent
Share capital 14 13,596 13,447
Share premium 14 319,411 315,916
Other reserves 15 68,904 52,690
Accumulated profit 62,035 58,754
463,946 440,807
Non-controlling interests (6,297) (4,909)
Total equity 457,649 435,898
Liabilities
Non-current liabilities
Trade and other payables 16 3,450 3,450
Provisions 17 28,661 26,578
Lease liabilities 19 4,505 4,913
Borrowings 18 34,770 34,050
71,386 68,991
Current liabilities
Trade and other payables 16 81,681 66,191
Lease liabilities 19 558 597
Borrowings 18 17,260 13,394
Current tax liabilities 619 336
100,118 80,518
Total liabilities 171,504 149,509
Total equity and liabilities 629,153 585,407
The notes on subsequent pages are an integral part of these Unaudited Interim
Condensed Consolidated Financial Statements. The unaudited interim condensed
consolidated financial statements were authorised for issue by the Board of
Directors on 8 November 2022 and were signed on its behalf.
Roger Davey Alberto Lavandeira
Chairman Director and Chief Executive Officer
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
As at 30 September 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 - - - 24,274 24,274 (1,388) 22,886
Change in fair value of financial assets through OCI - - - (12) - (12) -
Total comprehensive income - - (12) 24,274 24,262 (1,388) 22,874
Transactions with owners
Issuance of share capital 14 149 3,495 - - 3,644 - 3,644
Recognition of depletion factor 15 - - 12,800 (12,800) - - -
Recognition of share-based payments 15 - - 675 - 675 - 675
Recognition of non-distributable reserve 15 - - 316 (316) - - -
Recognition of distributable reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - (291) - (291) - (291)
Dividends - - - (5,098) (5,098) - (5,098)
At 30 September 2022 13,596 319,411 68,904 62,035 463,946 (6,297) 457,649
(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 - - 104,863 104,863 (664) 104,119
Change in fair value of financial assets through OCI - - (34) - (34) - (34)
Total comprehensive income - - (34) 104,863 104,829 (664) 104,165
Transactions with owners
Issuance of share capital 14 6 151 - 157 - 157
Recognition of share-based payments 15 - - 605 - 605 - 605
Recognition of depletion factor 15 - - 6,100 (6,100) - - -
Recognition of non-distributable reserve 15 - - 2,372 (2,372) - - -
Recognition of-distributable reserve 15 - - 3,317 (3,317)
Other changes in equity - - - (279) (279) - (279)
At 30 September 2021 13,445 315,865 52,409 77,283 459,002 (4,155) 454,847
(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 14 8 202 - - 210 - 210
Recognition of depletion factor 15 - - 6,100 (6,100) - - -
Recognition of share-based payments 15 - - 899 - 899 - 899
Recognition of non-distributable reserve 15 - - 2,372 (2,372) - - -
Recognition of distributable reserve 15 - - 3,317 (3,317) - - -
Other changes in equity - - - (299) (299) - (299)
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
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2022 and 2021
((1)) The share premium reserve is not available for distribution
The notes on subsequent pages are an integral part of these Unaudited Interim
Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
(All amounts in Euro thousands unless otherwise stated)
For to the period ended 30 September 2022 and 2021
(Euro 000's) Note Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Cash flows from operating activities
(Loss)/Profit before tax (8,182) 43,471 26,047 128,758
Adjustments for:
Depreciation of property, plant and equipment 9 7,899 6,662 22,017 20,155
Amortisation of intangibles 10 1,140 1,146 3,327 3,479
Recognition of share-based payments 15 318 295 675 604
Interest income 5 (1) (15) (16) (20)
Interest expense 5 - 385 - 632
Unwinding of discounting on mine rehabilitation provision 17 249 84 718 167
Other provisions 17 - - - 2,617
Legal provisions 17 - - - (278)
Net foreign exchange differences 3 (5,633) (6,999) (15,727) (4,968)
Unrealised foreign exchange loss on financing activities (26) (48) (27) (37)
Cash inflows from operating activities before working capital changes (4,236) 44,981 37,014 151,109
Changes in working capital:
Inventories 11 550 5,880 (13,116) 2,311
Trade and other receivables 12 (9,784) 6,599 (17,735) (4,089)
Trade and other payables 16 11,797 (4,304) 15,491 (15,886)
Cash flows from operations (1,673) 53,156 21,654 133,445
Tax paid (1,875) (3) (3,333) (8)
Interest on leases liabilities 5 (12) (385) (15) (632)
Interest paid 5 (250) (1,554) (734) (8,561)
Net cash (used in) / from operating activities (3,810) 51,214 17,572 124,244
Cash flows from investing activities
Purchase of property, plant and equipment 9 (7,824) (6,906) (33,856) (24,594)
Purchase of intangible assets 10 (858) (91) (2,164) (261)
Payment of deferred consideration - - - (53,000)
Interest received 5 1 15 16 20
Net cash used in investing activities (8,681) (6,982) (36,004) (77,835)
Cash flows from financing activities
Lease payments 19 - (154) (315) (463)
Net (repayments)/proceeds from borrowings 18 (7,549) (2,977) 4,586 52,015
Proceeds from issuance of shares 14 - - 3,643 158
Dividends (5,098) - (5,098) -
Net cash from financing activities (12,647) (3,131) 2,816 51,710
Net (decrease) / increase in cash and cash equivalents (25,138) 41,101 (15,616) 98,119
Net foreign exchange difference 3 5,633 6,999 15,727 4,968
Cash and cash equivalents:
At beginning of the period 127,133 92,754 107,517 37,767
At end of the period 107,628 140,854 107,628 140,854
The notes on subsequent pages are an integral part of these Unaudited Interim
Condensed Consolidated Financial Statements.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 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 September 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, Proyecto
Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group
has an earn-in agreement to acquire three investigation permits at Proyecto
Riotinto Este.
Proyecto Riotinto
The Company owns and operates through a wholly owned subsidiary, "Proyecto
Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the
Andalusia region of Spain, approximately 65 km northwest of Seville. A
brownfield expansion of this mine was completed in 2019 and successfully
commissioned by Q1 2020.
Proyecto Touro
The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of
Proyecto Touro, as part of an earn-in agreement which will enable the Group to
acquire up to 80% of the copper project. Proyecto Touro is located in Galicia,
north-west Spain. Proyecto Touro is currently in the permitting process.
In November 2019, Atalaya executed the option to acquire 12.5% of
Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro,
with known additional reserves, which will provide high potential to the
Proyecto Touro.
Proyecto Masa Valverde
On 21 October 2020, the Company announced that it entered into a definitive
purchase agreement to acquire 100% of the shares of Cambridge Mineria España,
S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which
fully owns the Masa Valverde polymetallic project located in Huelva (Spain).
Proyecto Masa Valverde is currently in the permitting process.
Proyecto Riotinto Este
In December 2020, Atalaya entered into a Memorandum of Understanding with a
local private Spanish company to acquire a 100% beneficial interest in three
investigation permits (known as Peñas Blancas, Cerro Negro and Herreros
investigation permits), which cover approximately 12,368 hectares and are
located immediately east of Proyecto Riotinto.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51% interest in Rio
Narcea Nickel, S.L., which owns 17 investigation permits. The acquisition also
provided a 100% interest in three investigation permits that are also located
along the Ossa- Morena Metallogenic Belt. In Q3 2022, Atalaya increased its
ownership interest in POM to 99.9%, up from 51%, following completion of a
capital increase that will fund exploration activities.
2. Basis of preparation and accounting policies
2.1 Basis of preparation
(a) Overview
These condensed interim financial statements are unaudited.
The unaudited interim condensed consolidated financial statements for the
period ended 30 September 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, except for the
revaluation of certain financial instruments that are measured at fair value
at the end of each reporting period, as explained below.
These unaudited interim condensed consolidated financial statements include
the financial statements of the Company and its subsidiary undertakings. They
have been prepared using accounting bases and policies consistent with those
used in the preparation of the consolidated financial statements of the
Company and the Group for the year ended 31 December 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. The accounting policies are unchanged from those disclosed in
the annual consolidated financial statements 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.
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).
Financial assets or liabilities Level 1 Level 2 Level 3 Total
(Euro 000's)
30 Sep 2022
Other financial assets
Financial assets at FV through OCI 27 - 1,101 1,128
Trade and other receivables
Receivables (subject to provisional pricing) - 15,524 - 15,524
Total 27 15,524 1,101 16,652
31 Dec 2021
Other financial assets
Financial assets at FV through OCI 39 1,101 1140
Trade and other receivables 0
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 Sep 2022
Revenue - from external customers 8,792 73,492 - 82,284
EBITDA 6,190 (10,413) (43) (4,266)
Depreciation/amortisation charge - (9,039) - (9,039)
Net foreign exchange gain 1,511 4,122 - 5,633
Finance income - 1 - 1
Finance cost - (511) - (511)
Profit/(loss) before tax 7,701 (15,840) (43) (8,182)
Tax (590) 1,553 - 963
Profit/(loss) for the period 7,111 (14,287) (43) (7,219)
Nine month period ended 30 Sep 2022
Revenue - from external customers 26,532 235,421 - 261,953
EBITDA 18,509 18,663 (57) 37,115
Depreciation/amortisation charge - (25,344) - (25,344)
Net foreign exchange gain 6,827 8,900 - 15,727
Finance income - 16 - 16
Finance cost - (1,467) - (1,467)
Profit/(loss) before tax 25,336 768 (57) 26,047
Tax (2,506) (654) - (3,160)
Profit/(loss) for the period 22,830 114 (57) 22,887
Total assets 83,189 544,443 1,521 629,153
Total liabilities (5,544) 141,817 (307,777) (171,504)
Depreciation of property, plant and equipment - 22,017 - 22,017
Amortisation of intangible assets - 3,327 - 3,327
Total net additions of non-current assets - 50,812 - 50,812
(Euro 000's) Cyprus Spain Other Total
Three month period ended 30 Sep 2021
Revenue - from external customers 7,303 99,858 - 107,161
EBITDA 4,893 43,931 (25) 48,799
Depreciation/amortisation charge - (7,808) - (7,808)
Net foreign exchange gain 1,173 1,764 - 2,937
Finance income - 15 - 15
Finance cost - (472) - (472)
Profit/(loss) before tax 6,066 37,430 (25) 43,471
Tax (511) (4,754) - (5,265)
Profit/(loss) for the period 5,555 32,676 (25) 38,206
Nine month period ended 30 Sep 2021
Revenue - from external customers 29,041 275,224 - 304,265
EBITDA 21,539 126,706 (34) 148,211
Depreciation/amortisation charge - (23,634) - (23,634)
Net foreign exchange gain 1,568 3,398 2 (4,968)
Finance income - 20 - 20
Finance cost - (807) - (807)
Profit/(loss) before tax 23,107 105,683 (32) 128,758
Tax (2,075) (22,484) - (24,559)
Profit/(loss) for the period 21,032 83,199 (32) 104,199
Total assets 100,463 511,026 1,132 612,621
Total liabilities (1,636) (156,138) - (157,774)
Depreciation of property, plant and equipment - 20,155 - 20,155
Amortisation of intangible assets - 3,479 - 3,479
Total net additions of non-current assets - 35,553 - 35,553
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) Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Segment €'000 €'000
Offtaker 1 Copper 60,343 92,708
Offtaker 2 Copper 73,021 67,229
Offtaker 3 Copper 128,577 135,062
4. Revenue
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Revenue from contracts with customers ((1)) 89,796 110,363 275,474 297,551
Fair value (losses)/gains relating to provisional pricing within sales ((2)) (7,512) (3,202) (13,521) 6,714
Total revenue 82,284 107,161 261,953 304,265
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 YTD 2022 revenue, there is a transaction price
of €5.7 million (€1.7 million in YTD 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
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Other interest (250) (385) (734) (632)
Interest on lease liabilities (12) (3) (15) (8)
Unwinding of discount on mine rehabilitation provision (Note 16) (249) (84) (718) (167)
Interest income((1)) 1 15 16 20
Net interest expense (510) (457) (1,451) (787)
((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:
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Income taxes
Current income tax expense/(income) 963 (5,265) (3,160) (24,559)
Income tax expense recognised in statement of profit and loss 963 (5,265) (3,160) (24,559)
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:
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
(Loss)/Profit attributable to equity holders of the parent (6,608) 38,422 24,274 104,863
Weighted number of ordinary shares for the purposes of basic earnings per 139,879 139,730 139,716 138,190
share (000's)
Basic (loss)/earnings per share (EUR cents/share) (4.7) 27.5 17.4 75.9
Weighted number of ordinary shares for the purposes of fully diluted 143,423 143,639 142,635 141,342
(loss)/earnings per share (000's)
Fully diluted earnings per share (EUR cents/share) (4.6) 26.7 17.0 74.2
At 30 September 2022 there are nil warrants (Note 14) and 3,543,500 options
(Note 14) (2021: nil warrants and 3,866,250 options) which have been included
when calculating the weighted average number of shares for 2022.
8. Dividends paid
Cash dividends declared and paid during the period:
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Inaugural dividend - 47,290 - 47,290
Interim dividend 5,098 - 5,098 -
Total cash dividends paid in the period to ordinary shareholders 5,098 47,290 5,098 47,290
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
On 10 August 2022, the Company's Board of Directors elected to declare an
interim dividend for H1 2022 of US$0.036 per ordinary share, which was
equivalent to 3.13 pence per share and amounted to €5.1 million. The interim
dividend was paid on 20 September 2022.
9. Property, plant and equipment
(Euro 000's) Land and buildings Right-of-use assets Plant and machinery Assets under construction ((1)) Deferred mining costs ((2)) Other assets ((3)) Total
Cost
At 1 January 2021 64,034 6,569 268,051 15,828 41,868 801 397,151
Additions 510 507 1,734 14,593 8,267 - 25,611
Reclassifications - - 807 -807 - - -
At 30 September 2021 64,544 7,076 270,592 29,614 50,135 801 422,762
Additions -240 - 207 5,793 1,532 - 7,292
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 - 1378 29,404 691 - 33,856
Increase in rehab. Provision 1,365 - - - - - 1,365
Reclassifications 15,300 - 4,979 (20,279) - - -
At 30 September 2022 84,054 7,076 289,703 31,985 52,358 801 465,977
Depreciation
At 1 January 2021 11,671 956 48,134 - 8,528 688 69,977
Charge for the period 3,303 446 14,348 - 2,038 20 20,155
At 30 September 2021 14,974 1,402 62,482 - 10,566 708 90,132
Charge for the period 1,052 144 5,509 - 814 6 7,525
At 31 December 2021 16,026 1,546 67,991 - 11,380 714 97,657
Charge for the period 3,291 428 15,574 - 2,705 19 22,017
At 30 September 2022 19,317 1,974 83,565 - 14,085 733 119,674
Net book value
At 30 September 2022 64,737 5,102 206,138 31,985 38,273 67.6 346,303
At 31 December 2021 48,977 5,530 215,355 22,860 40,287 87 333,096
((1)) Assets under construction at 30 September 2022 were €32.0 million
(2021: €22.9 million) which include sustaining capital expenditures,
tailings dams project and 50MW 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.
10. Intangible assets
(Euro 000's) Permits ((1)) Licences, R&D and software Total
Cost
At 1 January 2021 78,210 8,595 86,805
Additions - 261 261
At 30 September 2021 78,210 8,856 87,066
Additions 2,148 ((1)) (261) 1,887
At 31 December 2021 80,358 8,595 88,953
Additions 2,164 0 2,164
At 30 September 2022 82,522 8,595 91,117
Amortisation
At 1 January 2021 18,683 8,306 26,989
Charge for the period 3,430 49 3,479
At 30 September 2021 22,113 8,355 30,468
Charge for the period 1,101 16 1,117
At 31 December 2021 23,214 8,371 31,585
Charge for the period 3,278 49 3,327
At 30 September 2022 26,492 8,420 34,912
Net book value
At 30 September 2022 56,030 175 56,205
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. 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 September 2022 and thus no impairment has been recognised.
11. Inventories
(Euro 000's) 30 Sep 2022 31 Dec 2021
Finished products 5,794 5,185
Materials and supplies 29,410 18,216
Work in progress 2,693 1,380
Total inventories 37,897 24,781
As of 30 September 2022, copper concentrate produced and not sold amounted to
4,349 tonnes (31 Dec 2021: 5,254 tonnes). Accordingly, the inventory for
copper concentrate was €5.8 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.
12. Trade and other receivables
(Euro 000's) 30 Sep 2022 31 Dec 2021
Non-current
Deposits 309 303
Loans 10,855 2,332
Other non-current receivables 2,696 2,695
13,860 5,330
Current
Trade receivables at fair value - subject to provisional pricing 17,256 8,865
Trade receivables from shareholders at fair value - subject to provisional 10,132 20,283
pricing (Note 22.3)
Other receivables from related parties at amortised cost (Note 22.3) 56 56
Deposits 35 21
VAT receivables 25,364 17,300
Tax advances 1,273 -
Prepayments 3,195 3,303
Other current assets 3,851 300
61,162 50,128
Allowance for expected credit losses - -
Total trade and other receivables 75,022 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%.
13. Cash and cash equivalents
(Euro 000's) 30 Sep 2022 31 Dec 2021
Unrestricted cash and cash equivalents at Group level 58,268 48,375
Unrestricted cash and cash equivalents at Operation level 49,029 43,722
Restricted cash and cash equivalents at Operation level 331 15,420
Consolidated cash and cash equivalents 107,628 107,517
As at 30 September 2022, the Group's operating subsidiary held restricted cash
of €0.3 million of a provision for legal costs related to Astor.
Cash and cash equivalents denominated in the following currencies:
(Euro 000's) 30 Sep 2022 31 Dec 2021
Euro - functional and presentation currency 71,156 30,145
Great Britain Pound 325 36
United States Dollar 36,147 77,336
Consolidated cash and cash equivalents 107,628 107,517
14. Share capital and share premium
Shares Share Capital Share premium Total
000's Stg£'000 Stg£'000 Stg£'000
Authorised
Ordinary shares of Stg £0.075 each* 200,000 15,000 - 15,000
Issued and fully paid
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 September 2022 139,880 13,596 319,411 333,007
The Company´s share capital at 30 September 2022 is 139,879,209 ordinary
shares of Stg £0.075 each.
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 25.
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 September 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 exercised during the year 1.844 (1,643,250)
Granted during the year 3.627 1,345,000
30 September 2022 2.857 3,543,500
Warrants
As at 30 September 2022 and 2021 there were no warrants.
15. Other reserves
(Euro 000's) Share option Bonus share Depletion factor ((1)) FV reserve of financial assets at FVOCI ((2)) Non-Distributable reserve ((3)) Distributable reserve ((4)) Total
At 1 January 2021 8,187 208 25,033 (1,100) 5,628 2,093 40,049
Recognition of share- based payments 605 - - - - - 605
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 - - - (34) - - (34)
At 30 September 2021 8,792 208 24,978 (1,134) 8,000 11,565 52,409
Recognition of share-based payments 294 - - - - - 294
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 675 - - - - - 675
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 - - - (12) - - (12)
Other changes in reserves - - - - - (291) (291)
At 30 September 2022 9,761 208 37,778 (1,159) 8,316 14,000 68,904
((1) ) Depletion factor reserve
During Q3 2022, the Group has recognised €12.8 million (Q3 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.
16. Trade and other payables
(Euro 000's) 30 Sep 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 78,371 49,712
Accruals 3,170 16,267
VAT payables - 74
Other 140 138
69,885 66,191
Other non-current payables are related with the acquisition of Atalaya Masa
Valverde, SLU former Cambridge Minería España, SL and Atalaya Ossa Morena,
SLU formerly Rio Narcea Nickel, SL.
Trade payables are mainly for the acquisition of materials, supplies and other
services. These payables do not accrue interest and no guarantees have been
granted. The fair value of trade and other payables approximate their book
values. Trade payables are non-interest-bearing and are normally settled on
60-day terms.
17. Provisions
(Euro 000's) Other tax costs Legal costs Rehabilitation costs Total costs
At 1 January 2021 - 626 24,638 25,264
Additions 2,617 - 510 3,127
Reduction of provision - (278) (43) (321)
Finance cost - - 167 167
At 30 September 2021 2,617 348 25,272 28,237
Additions - 26 145 171
Used of provision - (8) (14) (22)
Reversal of provision (2,617) (87) - (2,704)
Finance cost - - 980 980
At 31 December 2021 - 279 26,299 26,578
Additions - - 1,033 1,033
Reduction of provision - - 332 332
Finance cost - - 718 718
At 30 September 2022 - 279 28,382 28,661
(Euro 000's) 30 Sep 2022 31 Dec 2021
Non-current 28,661 26,578
Total 28,661 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 September 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 September 2022. Management has
individually reviewed each case and made no provision (€0.3 million at 31
December 2021) for these claims during the nine month period ended 30
September 2022.
18. Borrowings
(Euro 000's) 30 Sep 2022 31 Dec 2021
Non-current borrowings
Credit facilities 34,770 34,050
34,770 34,050
Current borrowings
Credit facilities 17,260 13,394
17,260 13,394
The Group had uncommitted credit facilities risks totalling €112.3 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 €20.2 million at 30 September 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
1.71%. The maximum term of the facilities is six years. All borrowings are
unsecured.
At 30 September 2022, the Group had used €52.6 million of its facilities and
had undrawn facilities of €59.7 million.
19. Lease liabilities
(Euro 000's) 30 Sep 2022 31 Dec 2021
Non-current
Lease liabilities 4,505 4,913
4,505 4,913
Current
Lease liabilities 558 597
558 597
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 €0.4 million (2021: €0.3 million) for the nine month
period ended 30 September 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 September 2022, the remaining term of this
lease is ten 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 September 2022, the remaining
term of this motor vehicle and laboratory equipment lease is a quarter, and
three quarters, 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
September 2022, the remaining term of this lease is nine years and a quarter.
(Euro 000's) 30 Sep 2022 31 Dec 2021
Minimum lease payments due:
- Within one year 558 597
- Two to five years 1,964 2,014
- Over five years 2,541 2,899
Present value of minimum lease payments due 5,063 5,510
(Euro 000's) Lease liabilities
At 1 January 2022 5,510
Additions -
Interest expense 15
Lease payments (462)
At 30 September 2022 5,063
At 30 September 2022
Non-current liabilities 4,505
Current liabilities 558
5,063
20. Acquisition, incorporation and disposal of subsidiaries
There were neither acquisition nor incorporation of subsidiaries during the
nine month period to 30 September 2022.
21. Winding-up of subsidiaries
On 4 January 2022, the subsidiary EMED Mining Spain, S.L. was wound up.
22. Related party transactions
The following transactions were carried out with related parties:
22.1 Compensation of key management personnel
The total remuneration and fees of Directors (including Executive Directors)
and other key management personnel was as follows:
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Directors' remuneration and fees 262 265 758 770
Directors' bonus ((1)) - - 357 438
Share option-based benefits and other benefits to directors 63 130 190 241
Key management salaries 144 139 426 399
Key management bonus ((1)) - - 239 265
Share option-based and other benefits to key management personnel 61 220 184 350
530 754 2,154 2,463
((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.
22.2 Share-based benefits
On 25 June 2022, the Company announced that in accordance with the Company's
Long Term Inventive 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.
22.3 Transactions with related parties/shareholders
i) Transaction with shareholders
(Euro 000's) Three month period ended 30 Sep 2022 Three month period ended 30 Sep 2021 Nine month period ended 30 Sep 2022 Nine month period ended 30 Sep 2021
Trafigura- Revenue from contracts 17,270 45,460 62,078 96,390
Freight services - - - -
17,270 45,460 62,078 96,390
Losses relating provisional pricing within sales 68 (2,032) (1,735) (3,682)
Trafigura - Total revenue from contracts 17,338 43,428 60,343 92,708
ii) Period-end balances with related parties
(Euro 000's) 30 Sep 2022 31 Dec 2021
Receivables from related parties:
Recursos Cuenca Minera S.L. 56 56
Total (Note12) 56 56
The above balances bear no interest and are repayable on demand.
iii) Period-end balances with shareholders
(Euro 000's) 30 Sep 2022 31 Dec 2021
Trafigura - Debtor balance- subject to provisional pricing 10,132 20,283
Total (Note 12) 10,132 20,283
The above debtor balance arising from sales of goods and other balances bear
no interest and is repayable on demand.
23. 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.
24. 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.
25. Significant events
Τhe 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.
The main significant events disclosed during the nine months ended 30
September 2022 were:
· On 4 January 2022 the subsidiary EMED Mining Spain, S.L. was winded
down (refer to Note 21).
· 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.
· Through the year, the Company announced share dealings from persons
discharging managerial responsibilities ("PDMR") as follows
o On 26 January 2022, executed certain options by PDMRs;.
o On 22 February 2022, certain PDMRs had sold ordinary shares of the
Company;
o On 25 August 2022, purchased of 65,000 ordinary shares in Atalaya by a
PDMR.
· On 27 January 2022, Atalaya announced that, in accordance with the
Company's Long Term Inventive Plan 2020, it had granted 120,000 share options.
Further, on 24 June 2022, it was announced the Company has granted 1,225,000
share options to PDMRs and other employees.
· 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.
· 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, funds managed by Hamblin Watsa Investment Counsel
Ltd. acquired 5.08% of voting rights.
· The Company has been notified on the following transaction by
Allianz Global Investors GmbH ("Allianz"):
o On 4 April 2022, increased its % of voting rights from below 3% to 3.92%;
o On 4 May 2022, increased its % of voting rights from 3.92% to 4.07%;
o On 23 August 2022, increased its % of voting rights from 4.07% to 5.09%;
and
o On 29 September 2022, decreased its share of voting rights from 5.09% to
4.93%.
· 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") (via its subsidiary, Hong Kong
Xiangguang International Holdings Ltd), in Atalaya.
· On 8 April 2022, the Company transferred €9.6 million to Astor
from the trust account already established by Atalaya on 15 July 2021 (refer
to Note 13).
· 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 25 April 2022, the Company announced the publication of its
inaugural Sustainability Report for the year ended 31 December 2021.
· On 19 May 2022 the Board of Directors appointed Kate Harcourt as an
independent Non-Executive Director of the Company.
· On 22 June 2022, the 2022 Annual General Meeting was held, and all
the resolutions proposed were dully passed.
· 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.
· 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.
Dividends
The Company's Board of Directors elected to declare an interim dividend for H1
2022 of US$0.036 per ordinary share, which was equivalent to 3.13 pence per
share and amounted to €5.1 million.
The interim dividend was paid on 20 September 2022.
Further details are given in Note 8.
26. Events after the Reporting Period
· On 14 October 2022, Cobas Asset Management SGIIC, S.A., shareholder of
the Company, increased its % of voting rights from 5.07% to 10.04%.
· On 25 October 2022, the Board approved a new committee structure, with
immediate effect, comprised of: Audit & Financial Risk Committee,
Remuneration Committee, Nomination and Governance Committee, Sustainability
Committee and a Physical Risk Committee.
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