REG - Atalaya Mining PLC - Q3 and YTD 2023 Financial Results
16/11/2023 07:00
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RNS Number : 6081T Atalaya Mining PLC 16 November 2023
16 November 2023
Atalaya Mining Plc.
("Atalaya" and/or the "Company")
Q3 and YTD 2023 Financial Results
Progress at operations and projects support the planned move to LSE Main
Market
Atalaya Mining Plc (AIM: ATYM) is pleased to announce its unaudited third
quarter and nine month financial results for the period ended 30 September
2023 ("Q3 2023" and "YTD 2023" respectively) together with its unaudited
condensed consolidated financial statements.
Highlights
· Copper production of 12.5 kt in Q3 2023 and 38.9 kt YTD 2023
· AISC of $3.24/lb Cu in Q3 2023 and $3.07/lb YTD 2023
· FY2023 outlook: expect to achieve lower end of copper production
guidance range of 53-54 kt and AISC within $3.00-3.20/lb range previously
announced
· EBITDA of €19.1 million in Q3 2023 and €59.2 million YTD 2023
· Strong net cash position of €66.8 million following recent
dividend payment and investments in the 50 MW solar plant, E-LIX Phase I and
exploration
· Subsequent to Q3 2023, announced the intention to apply for admission
to the premium listing segment of the Official List and trading on the LSE's
Main Market, and a proposed re-domiciliation from Cyprus to Spain in order to
open the possibility for future FTSE UK Index Series inclusion once Main
Market listed
Q3 and YTD 2023 Financial Results Summary
Period ended 30 September Unit Q3 2023 Q3 2022 YTD 2023 YTD 2022
Revenues from operations €k 85,361 82,284 254,755 261,953
Operating costs €k (66,260) (86,550) (195,543) (224,838)
EBITDA €k 19,101 (4,266) 59,212 37,115
Profit/(loss) for the period €k 11,140 (7,219) 31,448 22,887
Basic earnings/(loss) per share € cents/share 8.3 (4.7) 23.2 17.4
Cash flows from operating activities €k 27,778 (3,810) 59,028 17,572
Cash flows used in investing activities €k (18,864) (8,681) (35,604) (36,004)
Cash flows from financing activities €k (3,202) (12,647) (31,569) 2,816
Net Cash position ((1)) €k 66,764 55,598 66,764 55,598
Working capital surplus €k 76,917 106,817 76,917 106,817
Average realised copper price (excluding QPs) US$/lb 3.77 3.52 3.86 4.06
Cu concentrate produced tonnes 59,306 63,400 184,907 180,635
Cu production tonnes 12,541 13,453 38,892 38,300
Cash costs US$/lb payable 2.82 3.34 2.76 3.26
All-In Sustaining Cost ('AISC') US$/lb payable 3.24 3.49 3.07 3.47
(1) Includes restricted cash and bank borrowings at 30 September
2023 and 2022.
Alberto Lavandeira, CEO, commented:
"Atalaya continued to demonstrate good results across its key operational and
financial metrics during Q3. Our copper production is expected to achieve the
lower end of our FY23 guidance and our AISC is tracking in line with
expectations, underscoring our commitment to operational efficiency and cost
management.
Additionally, our strategic investments in the 50 MW solar plant, E-LIX Phase
I, and exploration initiatives not only align with responsible mining
practices but also position us for future value creation.
Looking ahead, we have a strong cash position and are excited about our
application for admission to the premium listing segment of the London Stock
Exchange's Main Market and the proposed re-domiciliation. We believe these
measures could broaden the Company's appeal to new institutions at a time when
investor interest in copper and the related energy transition thematic
continues to accelerate."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live
presentation relating to the Q3 and YTD 2023 Financial Results via the
Investor Meet Company platform at 12:00 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
(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 2023 Operating Results Summary
Units expressed in accordance with the international system of units (SI) Unit Q3 2023 Q3 2022 YTD 2023 YTD 2022
Ore mined Mt 3,845,806 3,816,688 11,201,824 11,344,206
Waste mined Mt 9,662,598 5,753,382 24,820,247 19,332,317
Ore processed Mt 3,850,196 3,923,498 11,651,730 11,451,805
Copper ore grade % 0.38 0.41 0.38 0.39
Copper concentrate grade % 21.15 21.22 21.03 21.20
Copper recovery rate % 87.00 84.62 87.03 85.70
Copper concentrate tonnes 59,306 63,400 184,907 180,635
Copper contained in concentrate tonnes 12,541 13,453 38,892 38,300
Payable copper contained in concentrate tonnes 11,948 12,819 37,043 36,494
Mining
Ore mined was 3.8 million tonnes in Q3 2023 (Q3 2022: 3.8 million tonnes) and
11.2 million tonnes in YTD 2023 (YTD 2022: 11.3 million tonnes).
Waste mined was 9.7 million tonnes in Q3 2023 (Q3 2022: 5.8 million tonnes)
and 24.8 million tonnes in YTD 2023 (YTD 2022: 19.3 million tonnes). Waste
mining during YTD 2023 was consistent with budget and included increased waste
stripping at Cerro Colorado in anticipation of the potential start of mining
activities at San Dionisio in late 2023.
Processing
The plant processed 3.9 million tonnes of ore in Q3 2023 (Q3 2022: 3.9 million
tonnes) and 11.7 million tonnes in YTD 2023 (YTD 2022: 11.5 million tonnes).
Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%) and 0.38% in YTD 2023 (YTD
2022: 0.39%).
Copper recoveries in Q3 2023 were 87.00% (Q3 2022: 84.62%) and 87.03% in YTD
2023 (YTD 2022: 85.7%), as a result of favourable ore characteristics during
the 2023 periods.
Production
Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453 tonnes) and
38,892 tonnes in YTD 2023 (YTD 2022: 38,300 tonnes).
On-site copper concentrate inventories at 30 September 2023 were approximately
7,358 tonnes (30 June 2023: 7,291 tonnes). All concentrate in stock at the
beginning of the period was delivered to the port at Huelva.
Copper contained in concentrates sold was 12,521 tonnes in Q3 2023 (Q3 2022:
14,040 tonnes) and 37,880 tonnes in YTD 2023 (YTD 2022: 38,296 tonnes).
Cash Costs and AISC Breakdown
$/lb Cu payable Q3 2023 Q3 2022 YTD 2023 YTD 2022
Mining 0.90 0.75 0.84 0.82
Processing 0.93 1.53 0.90 1.39
Other site operating costs 0.51 0.49 0.52 0.52
Total site operating costs 2.34 2.77 2.26 2.73
By-product credits (0.09) (0.07) (0.09) (0.08)
Freight, treatment charges and other offsite costs 0.57 0.64 0.59 0.61
Total offsite costs 0.48 0.57 0.50 0.53
Cash costs 2.82 3.34 2.76 3.26
Cash costs 2.82 3.34 2.76 3.26
Corporate costs 0.08 0.05 0.07 0.08
Sustaining capital (excluding one-off tailings expansion) 0.06 0.06 0.04 0.06
Capitalised stripping costs 0.21 - 0.13 0.01
Other costs 0.07 0.04 0.07 0.05
Total AISC 3.24 3.49 3.07 3.46
Note: Some figures may not add up due to rounding.
Cash costs were $2.82/lb payable copper in Q3 2023 (Q3 2022: $3.34/lb) and
$2.76/lb payable copper in YTD 2023 (YTD 2022: $3.26/lb), with the decrease
mainly due to lower electricity and offsite costs despite lower production
volumes.
AISC were $3.24/lb payable copper in Q3 2023 (Q3 2022: $3.49/lb) and $3.07/lb
payable copper in YTD 2023 (YTD 2022: $3.46/lb). The decrease in AISC was
driven by the same factors that resulted in lower cash costs, but partly
offset by higher capitalised stripping costs. AISC excludes one-off
investments in the tailings dam, consistent with prior reporting.
Q3 and YTD 2023 Financial Results Highlights
Income Statement
Revenues were €85.4 million in Q3 2023 (Q3 2022: €82.3 million) and
€254.8 million in YTD 2023 (YTD 2022: €262.0 million). For Q3 period,
modestly higher revenues were the result of higher realised copper prices
partly offset by lower sales volumes, while in the YTD period, lower revenues
were mainly the result of lower realised copper prices.
Operating costs were €66.3 million in Q3 2023 (Q3 2022: €86.6 million) and
€195.5 million (YTD 2022: €224.8 million). Lower operating costs during
the 2023 periods were mainly the result of lower electricity costs, partly
offset by higher administrative and expensed exploration costs.
EBITDA was positive €19.1 million in Q3 2023 (Q3 2022: negative €4.3
million) and positive €59.2 million in YTD 2023 (YTD 2022: positive €37.1
million). Higher comparable EBITDA was mainly the result of lower operating
costs.
Profit after tax was €11.1 million in Q3 2023 (Q3 2022: €7.2 million loss)
or 8.3 cents basic earnings per share (Q3 2022: 4.7 cents loss) and €31.4
million in YTD 2023 (YTD 2022: €22.9 million) or 23.2 cents basic earnings
per share (Q3 2022: 17.4 cents).
Cash Flow Statement
Cash flows from operating activities before changes in working capital were
€20.7 million in Q3 2023 (Q3 2022: negative €4.2 million) and €27.8
million after working capital changes (Q3 2022: negative €3.8 million). For
YTD 2023, cash flows from operating activities before changes in working
capital were €59.6 million (YTD 2022: €37.0 million) and €59.0 million
after working capital changes (YTD 2022: €17.6 million).
Cash flows used in investing activities were €18.9 million in Q3 2023 (Q3
2022: €8.7 million) and €35.6 million in YTD 2023 (YTD 2022: €36.0
million). Key investments in Q3 2023 included €1.5 million in sustaining
capex (Q3 2022: €1.6 million), €5.2 million in capitalised stripping (Q3
2022: nil), €3.4 million to extend the tailings dam (Q3 2022: €3.0
million), €6.3 million for the 50 MW solar plant (Q3 2022: €0.4 million)
and €4.5 million for the E-LIX Phase I Plant (Q3 2022: €6.5 million), of
which €2.6 million was booked as prepayments for service contract to Lain
Technologies Ltd.
Cash flows from financing activities were negative €3.2 million in Q3 2023
(Q3 2022: negative €12.6 million) and negative €31.6 million in YTD 2023
(YTD 2022: positive €2.8 million), as a result of scheduled debt repayments
and dividends payments.
Balance Sheet
Consolidated cash and cash equivalents were €119.1 million at 30 September
2023 (31 December 2022: €126.4 million).
Net of current and non-current borrowings of €52.3 million, net cash was
€66.8 million as at 30 September 2023, compared to €68.8 million as at 30
June 2023 and €53.1 million as at 31 December 2022.
Inventories of concentrate valued at cost were €8.3 million at 30 June 2023
(31 December 2022: €4.5 million).
As at 30 September 2023, total working capital was €76.9 million, compared
to €81.4 million as at 30 June 2023 and €84.0 million as at 31 December
2022.
Electricity Prices
Realised Prices
Market electricity prices in Q3 2023 increased slightly from Q2 2023, in part
due to the impact of strikes at LNG export facilities in Australia on
European natural gas prices, but remained significantly below 2022 levels.
After including the contribution from the Company's 10-year power purchase
agreement ("PPA"), realised electricity prices in Q3 2023 were approximately
60% lower than the Company's average realised electricity price in 2022.
Renewable Energy Projects
Construction of the 50 MW solar plant at Riotinto continues to advance.
Ramp-up is expected to begin in early January 2024, with full operations
expected in the following months. When fully operational, the facility is
expected to provide approximately 22% of Riotinto's current electricity needs.
Together, the 50 MW solar plant and long-term PPA will provide over 50% of the
Company's current electricity requirements at a rate well below historical
prices in Spain.
The Company continues to assess the potential installation of wind turbines at
Riotinto, which could supply additional low cost and carbon-free electricity
and contribute to the Company's decarbonisation objectives.
2023 Guidance
The Company expects to achieve copper production at the lower end of its full
year guidance range of 53,000 to 54,000 tonnes at cash costs of $2.80 to
$3.00/lb copper payable and AISC of $3.00 to $3.20/lb copper payable.
Aggregate expenditures relating to non-sustaining capital investments (such as
E-LIX Phase I, the 50 MW solar plant, Riotinto tailings facility expansion)
and exploration activities continue to trend in line with prior FY2023
guidance, although the composition is expected to vary including higher
investments in the E-LIX Phase I plant.
Asset Portfolio Update
Proyecto Riotinto
In April 2023, the Company was granted a substantial modification to the
existing Unified Environmental Authorisation (or in Spanish, Autorización
Ambiental Unificada ("AAU")) for Proyecto Riotinto by the Junta de Andalucía.
The AAU allows for the expansion of tailings capacity and the mine footprint
at Riotinto and represents an important step towards developing regional
deposits such as San Dionisio and San Antonio.
The Company is continuing with permitting activities associated with San
Dionisio, which represents a key component of the integrated mine plan that
was outlined in the recent Riotinto PEA. Preparation of the pit for mining is
underway.
E-LIX Phase I Plant
Construction activities continue at the E-LIX Phase I plant, with
commissioning expected to begin in December 2023.
Once operational, the E-LIX plant is expected to produce high purity copper or
zinc metals on site, allowing the Company to potentially achieve higher metal
recoveries from complex polymetallic ores, lower transportation and
concentrate treatment charges and a reduced carbon footprint.
Riotinto District - Proyecto Masa Valverde ("PMV")
In March 2023, the Company announced that PMV was granted an AAU by the Junta
de Andalucía, following an application process that was initiated by the
Company in December 2021. The AAU is an integrated process that combines the
Environmental Impact Assessment and other authorisations and specifies
requirements to avoid, prevent and minimise a project's impacts on the
environment and the cultural heritage of the area. Various optimisation
workstreams continue.
Three core rigs are active and focused on step out drilling at the Mojarra
Trend, drill testing coincident fix loop electromagnetic ("FLEM") and airborne
gravity gradiometry ("AGG") anomalies and completing metallurgical and infill
drilling at the Masa Valverde deposit. The first phase of resource definition
drilling at the Campanario Trend was completed during the Period.
Proyecto Touro
Atalaya remains fully committed to the development of the Touro copper
project, which has the potential to provide substantial benefits to Galicia
and also support the European Union's critical raw materials mandate.
The Xunta de Galicia has legislation that seeks to promote industry in Galicia
by simplifying the approval process. Business initiatives can be classified as
priority business initiatives ("IEP") and strategic industrial projects
("Proyecto Industrial Estratégico" or "PIE") which provide a variety of
development advantages. The Company believes that Touro fulfils the
requirements to be granted the status of a PIE in Galicia.
Touro has the potential to become a new source of copper production
for Europe. As such, the project could also be granted "Strategic Project"
status by the EU, which can be awarded to projects "based on their
contribution to the security of supply of strategic raw materials, their
technical feasibility, sustainability and social standards", as part of the
Critical Raw Materials Act. Copper was recently added to the list of
"Strategic Raw Materials" owing to its importance for strategic sectors and
technologies and due to the supply-demand imbalance that is expected in the
near future.
Running parallel with the ongoing Touro permitting process, the Company
continues to focus on numerous initiatives related to the social licence,
including engaging with the many stakeholders in the region to provide
detailed information on the new and improved project design. Positive and
favourable feedback from numerous meetings with municipalities, farmers and
fishermen associations and other industries indicate meaningful support
towards the development of a new and modern mining project.
The Company continues to successfully restore the water quality of the rivers
around Touro and is operating its water treatment plant, which is addressing
the legacy issues associated with acid water runoff from the historical mine,
which closed in 1987. The field-work carried out by Atalaya has resulted in an
immediate and visible improvement of the water systems surrounding the
project, with the progress being recognised by local stakeholders and the
media.
Atalaya continues to be confident that its approach to Touro, which includes
fully plastic lined thickened tailings with zero discharge, is consistent with
international best practice and will satisfy the most stringent environmental
conditions that may be imposed by the authorities prior to the development of
the project.
Proyecto Ossa Morena
Drilling continued to progress with one rig at the Guijarro-Chaparral
gold-copper project and the La Hinchona copper-gold project, both in the
central part of the district. One rig is being mobilised to the flagship
Alconchel-Pallares copper-gold project.
Proyecto Riotinto East
Drill testing of selected coincident FLEM and AGG anomalies is in progress
with one rig.
Corporate Activities After the Reporting Period
Corporate Governance Update
Following the completion of an internal policy review in October 2023, the
former Audit & Financial Risk Committee was renamed the Audit Committee.
Hussein Barma continues as Chair of the Audit Committee, Neil Gregson
continues as a Member and Stephen Scott was appointed as a Member in place of
Roger Davey. Mr. Davey continues as Chair of the Board of Directors, a Member
of the Physical Risk Committee and a Member of the Sustainability Committee.
In addition, Neil Gregson was appointed as Senior Independent Director. Mr.
Gregson joined the Company's Board of Directors in February 2021 and continues
as Chair of the Nomination & Governance Committee, Member of the Audit
Committee, Member of the Physical Risk Committee and Chair of the Remuneration
Committee.
Intention to Move to the Main Market
On 13 November 2023, the Company announced its intention to apply for the
Company's ordinary shares ("Ordinary Shares") to be admitted to the premium
listing segment of the Official List maintained by the Financial Conduct
Authority ("FCA") ("Official List") and to trading on the London Stock
Exchange plc's ("London Stock Exchange") main market for listed securities
("Main Market") (together, "Admission").
Since restarting operations at Proyecto Riotinto in 2016, Atalaya has become a
leading European producer of copper, which is a key commodity for economic
growth and the energy transition. Atalaya has assembled a portfolio of growth
projects across several world-class mineral districts in Spain and maintains a
sustainable dividend policy. In order to build on this success, Atalaya's
Board of Directors believes that the move to the Main Market would further
enhance the Company's corporate profile and broaden its appeal to new
institutional investors.
Atalaya does not intend to raise any funds or offer any new securities in
connection with Admission or the publication of the related prospectus. The
Admission will be effected through an introduction of the Company's existing
Ordinary Shares.
Admission is subject to the approval by the FCA of a prospectus and the
Ordinary Shares being admitted by the FCA to the premium listing segment of
the Official List and by the London Stock Exchange to trading on the Main
Market. Subject to the satisfaction of these conditions, Admission is expected
to occur before the end of December 2023. Accordingly, the Company has given
notice of the intended cancellation of trading of its Ordinary Shares on AIM
in accordance with Rule 41 of the AIM Rules for Companies. The Company's
listing on AIM is expected to be to be cancelled before the end of December
2023.
Atalaya will make a further announcement on the status of the proposed
applications for Admission, together with the timeline for Admission, in due
course.
Proposed Re-domiciliation
On 14 November 2023, the Company announced its intention to re-domicile the
Company by transferring its registered office from the Republic of Cyprus to
the Kingdom of Spain ("Proposed Re-domiciliation").
This change in corporate structure is subject to shareholder approval and
regulatory consents. The Company is convening an Extraordinary General Meeting
("EGM") to consider and, if thought advisable, to approve the resolutions
which are necessary to approve the Proposed Re-domiciliation. If approved, the
Proposed Re-domiciliation is expected to be completed before end of May 2024.
The re-domiciliation is being proposed as the incorporation in Cyprus no
longer reflects the Company's geographic and strategic focus, and therefore
represents a legacy structure for the Company.
The Proposed Re-domiciliation follows the Company's announcement on 13
November 2023 confirming its intention to move to the Main Market of the
London Stock Exchange ("Step-up"). In the event the Step-up occurs, the
Proposed Re-domiciliation also opens the possibility for the Company to be
eligible for inclusion in the FTSE UK Index Series (subject to other
eligibility criteria being satisfied at the time of application), which the
Company believes would be in the interest of all its shareholders.
The proposed Re-domiciliation and the Step-up are independent of each other
and neither is conditional upon the other occurring.
The EGM will take place on Tuesday, 12 December 2023 at 11:00 am GMT at
Hamilton House, 1 Temple Avenue, London EC4Y 0HA to consider the Proposed
Re-domiciliation and related matters as a consequence of the Proposed
Re-domiciliation.
A circular, incorporating the Notice of EGM and further background and
information on the Proposed Re-domiciliation, together with forms of proxy are
available on the Company's website at www.atalayamining.com
(http://www.atalayamining.com) .
Financial Statements
The Unaudited Condensed Consolidated Financial Statements for the three and
nine months ended 30 September 2023 are also available on Atalaya's website at
www.atalayamining.com (http://www.atalayamining.com) .
Contacts:
SEC Newgate UK Elisabeth Cowell / Tom Carnegie / Matthew Elliott + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity Henry Fitzgerald-O'Connor / James Asensio +44 20 7523 8000
(NOMAD and Joint Broker)
BMO Capital Markets Tom Rider / Andrew Cameron +44 20 7236 1010
(Joint Broker)
Peel Hunt LLP Ross Allister / David McKeown +44 20 7418 8900
(Joint Broker)
About Atalaya Mining Plc
Atalaya is an AIM-listed mining and development group which produces copper
concentrates and silver by-product at its wholly owned Proyecto Riotinto site
in southwest Spain. Atalaya's current operations include the Cerro Colorado
open pit mine and a modern 15 Mtpa processing plant, which has the potential
to become a central processing hub for ore sourced from its wholly owned
regional projects around Riotinto that include Proyecto Masa Valverde and
Proyecto Riotinto East. In addition, the Group has a phased earn-in agreement
for up to 80% ownership of Proyecto Touro, a brownfield copper project in the
northwest of Spain, as well as a 99.9% interest in Proyecto Ossa Morena. For
further information, visit www.atalayamining.com
(http://www.atalayamining.com)
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
30 September 2023
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 2022 and 30 September 2023 and results of
operations for the three and nine months ended 30 September 2023 and 2022.
This report has been prepared as of 15 November 2023. The analysis hereby
included is intended to supplement and complement the unaudited interim
condensed consolidated financial statements and notes thereto ("Financial
Statements") as at and for the period ended 30 September 2023. The reader
should review the Financial Statements in conjunction with the review of this
report and with the audited, consolidated financial statements for the year
ended 31 December 2022 and the six month ended 30 June 2023, and the unaudited
interim condensed consolidated financial statements for the period ended 30
September 2022. These documents can be found on Atalaya's website at
www.atalayamining.com (http://www.atalayamining.com)
Atalaya prepares its Annual Financial Statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by 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. The Company continued to be listed on AIM as at 30
September 2023.
On 20 February 2023, Atalaya announced that applied a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary
shares in the Company continue to trade on the AIM market of the London Stock
Exchange under the symbol "ATYM". Delisting from TSX took effect at the close
of trading on 20 March 2023. Furthermore, Atalaya ceased to be a reporting
issuer in Canadian jurisdictions on 26 June 2023.
Atalaya is a European mining and development company. The company's 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 certain investigation permits at
Proyecto Riotinto Este.
Proyecto Riotinto
The Company owns and operates through a wholly owned subsidiary, "Proyecto
Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the
Andalusia region of Spain, approximately 65 km northwest of Seville. A
brownfield expansion of this mine was completed in 2019 and successfully
commissioned by 31 March 2020.
Proyecto Touro
The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of
Proyecto Touro, as part of an earn-in agreement which will enable the Group to
acquire up to 80% of the copper project. Proyecto Touro is located in Galicia,
north-west Spain. Proyecto Touro is currently in the permitting process.
In November 2019, Atalaya executed the option to acquire 12.5% of
Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro,
with known additional mineralisation, which will add to the potential of
Proyecto Touro.
Proyecto Masa Valverde
On 21 October 2020, the Company announced that it entered into a definitive
purchase agreement to acquire 100% of the shares of Cambridge Mineria España,
S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which
fully owns the Masa Valverde polymetallic project located in Huelva (Spain).
Proyecto Masa Valverde is currently in the permitting process.
Proyecto Riotinto Este
In December 2020, Atalaya entered into a Memorandum of Understanding with a
local private Spanish company to acquire a 100% beneficial interest in three
investigation permits (known as Peñas Blancas, Cerro Negro and Herreros
investigation permits), which cover approximately 12,368 hectares and are
located immediately east of Proyecto Riotinto.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51% interest in Rio
Narcea Nickel, S.L., which owns 17 investigation permits. The acquisition also
provided a 100% interest in three investigation permits that are also located
along the Ossa-Morena Metallogenic Belt. In July 2022, Atalaya increased its
stake in the company to 99.9% as a result of an equity raise to fund the
exploration activities under the investigation permits.
2. Overview of Operational Results
Proyecto Riotinto
The following table presents a summarised statement of operations of Proyecto
Riotinto for the three and nine months ended 30 September 2023 and 2022,
respectively.
Units expressed in accordance with the international system of units (SI) Unit Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Ore mined t 3,845,806 3,816,688 11,201,824 11,344,206
Waste mined t 9,662,598 5,753,382 24,820,247 19,332,317
Ore processed t 3,850,196 3,923,498 11,651,730 11,451,805
Copper ore grade % 0.38 0.41 0.38 0.39
Copper concentrate grade % 21.15 21.22 21.03 21.20
Copper recovery rate % 87.00 84.62 87.03 85.70
Copper concentrate t 59,306 63,400 184,907 180,635
Copper contained in concentrate t 12,541 13,453 38,892 38,300
Payable copper contained in concentrate t 11,948 12,819 37,043 36,494
Cash cost (*) US$/lb payable 2.82 3.34 2.76 3.26
All-in sustaining cost (*) US$/lb payable 3.24 3.49 3.07 3.47
(*) Refer Section 5 of this Management Review.
There may be slight differences between the numbers in the above table and the
figures announced in the quarterly operations updates that are available on
Atalaya's website at www.atalayamining.com (http://www.atalayamining.com)
$/lb Cu payable Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Mining 0.90 0.75 0.84 0.82
Processing 0.93 1.53 0.90 1.39
Other site operating costs 0.51 0.49 0.52 0.52
Total site operating costs 2.34 2.77 2.26 2.73
By-product credits (0.09) (0.07) (0.09) (0.08)
Freight, treatment charges and other offsite costs 0.57 0.64 0.59 0.61
Total offsite costs 0.48 0.57 0.50 0.53
Cash costs 2.82 3.34 2.76 3.26
Cash costs C1 2.82 3.34 2.76 3.26
Corporate costs 0.08 0.05 0.07 0.08
Sustaining capital (excluding one-off tailings expansion) 0.06 0.06 0.04 0.06
Capitalised stripping costs 0.21 - 0.13 0.01
Other costs 0.07 0.04 0.07 0.05
Total AISC 3.24 3.49 3.07 3.46
Note: Some figures may not add up due to rounding.
Three months operational review
The plant processed 3.9 million tonnes of ore during Q3 2023 (Q3 2022: 3.9
million tonnes), compared with 4.1 million tonnes in Q2 2023.
Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%), compared with 0.40% in Q2
2023.
Copper recoveries in Q3 2023 were 87.00% (Q3 2022: 84.62%), compared with
87.18% in Q2 2023, as a result of favourable ore characteristics during the
period.
Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453 tonnes),
compared with 14,212 tonnes in Q2 2023. Lower grades during the Period were
partially offset by recoveries that were higher than budget.
On-site copper concentrate inventories at 30 September 2023 were approximately
7,358 tonnes (30 June 2023: 7,291 tonnes). All concentrate in stock at the
beginning of the Period was delivered to the port at Huelva.
Copper contained in concentrates sold was 12,521 tonnes in Q3 2023 (Q3 2022:
14,040 tonnes), compared with 12,858 tonnes in Q2 2023.
Nine months operational review
Production of copper contained in concentrate during YTD 2023 was 38,892
tonnes, compared with 38,300 tonnes in the same period of 2022. Payable copper
in concentrates was 37,043 tonnes compared with 36,494 tonnes of payable
copper in YTD 2022.
Ore mined in YTD 2023 was 11.2 million tonnes compared with 11.3 million
tonnes during YTD 2022. Ore processed was 11.7 million tonnes versus 11.5
million tonnes in YTD 2022.
Ore grade during YTD 2023 was 0.38% Cu compared with 0.39% Cu in YTD 2022.
Copper recovery was 87.03% versus 85.70% in YTD 2022. Concentrate production
amounted to 184,907 tonnes above YTD 2022 production of 180,635 tonnes.
2. Outlook
The forward-looking information contained in this section is subject to the
risk factors and assumptions contained in the cautionary statement on
forward-looking statements included in the Basis of Reporting. The Company is
aware that the inflationary pressure on the goods and services required for
its business and the geopolitical developments and its impact on energy prices
may still have further effects or impact how the Company can manage it
operations and is accordingly keeping its guidance under regular review.
Should the Company consider the current guidance no longer achievable, then
the Company will provide a further update.
Operational guidance
Guidance for Proyecto Riotinto is as follows.
Unit Guidance 2023
Ore mined million tonnes ~15
Waste mined million tonnes ~30
Ore processed million tonnes 15.3 - 15.8
Copper ore grade % 0.39 - 0.41
Copper recovery rate % 86 - 87
Contained copper tonnes 53,000-54,000
Cash costs $/lb payable 2.80 - 3.00
All-in sustaining cost $/lb payable 3.00 - 3.20
Full year copper production is expected to be at the lower end of the
production guidance range of 53,000 to 54,000 tonnes.
Inflationary pressures continue to impact the global mining industry. The
prices of many key inputs, including diesel, tyres, explosives, grinding media
and lime, increased materially in 2022 as a result of higher global energy
prices and logistics constraints. Since then, prices have stabilised for
certain items.
The cash cost guidance range for 2023 remains at $2.80 to $3.00/lb copper
payable and the AISC guidance range remains at $3.00 to $3.20/lb copper
payable. Market electricity prices for YTD 2023 have been consistent with
expectations.
In addition, aggregate expenditures relating to non-sustaining capital
investments (such as E-LIX Phase I, the 50 MW solar plant, Riotinto tailings
facility expansion) and exploration activities are trending in line with
FY2023 guidance, although the composition is expected to vary slightly
including modestly higher investments in the E-LIX Phase I plant.
3. Overview of the Financial Results
The following table presents summarised consolidated income statements for the
three and nine months ended 30 September 2023, with comparatives for the three
and nine months ended 30 September 2022, respectively.
(Euro 000's) Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Revenues 85,361 82,284 254,755 261,953
Costs of sales (62,459) (84,768) (182,252) (217,757)
Administrative and other expenses (2,383) (905) (8,028) (5,356)
Exploration expenses (1,554) (92) (5,156) (456)
Care and maintenance expenditure (499) (789) (1,185) (1,559)
Other income 635 4 1,078 290
EBITDA 19,101 (4,266) 59,212 37,115
Depreciation/amortisation (8,992) (9,039) (27,165) (25,344)
Net foreign exchange gain 705 5,633 760 15,727
Net finance (cost)/ income (143) (510) 2,493 (1,451)
Tax 469 963 (3,852) (3,160)
Profit/ (loss) for the period 11,140 (7,219) 31,448 22,887
Three months financial review
Revenues for the three-month period ended 30 September 2023 amounted to
€85.4 million (Q3 2022: €82.3 million). Increase revenues in comparison to
the same quarter of the previous year were mainly attributable to higher
realised prices with decreased volumes of concentrate sold.
Realised prices excluding QPs were US$3.77/lb copper during Q3 2023 compared
with US$3.52/lb copper in Q3 2022. The realised price during the quarter,
including QPs, was approximately US$3.81/lb.
Cost of sales for the three-month period ended 30 September 2023 amounted to
€62.5 million, compared with €84.8 million in Q3 2022. Unit operating
costs in Q3 2023 were lower than in Q3 2022.
Cash costs of US$2.82/lb payable copper during Q3 2023 compared with
US$3.34/lb payable copper in the same period last year. Lower cash costs were
primarily attributed to a significant reduction in the cost of electricity
(approx. €18.2 million lower) and other supply-related costs, which also
included lower freight prices. AISC for Q3 2023, excluding one-off investments
in the tailings dam, were US$3.24/lb payable copper compared with US$3.49/lb
payable copper in Q3 2022.
Sustaining capex for Q3 2023 amounted to €1.5 million compared with €1.6
million in Q3 2022. Sustaining capex mainly related to continuous enhancements
in the processing systems of the plant. In addition, the Company invested
€3.4 million in the project to increase the tailings dam during Q3 2023 (Q3
2022: €3.0 million). Stripping costs capitalised during Q3 2023 amounted to
€5.2 million (Q3 2022: €nil).
Capex associated with the construction of the 50 MW solar plant amounted to
€6.3 million in Q3 2023, while investments in the E-LIX Phase I plant
totalled €4.5 million, of which €2.6 million was booked as prepayments for
service contract to Lain Technologies Ltd.
Administrative and other expenses amounted to €2.4 million (Q3 2022: €0.9
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 project portfolio for the three-month period
ended 30 September 2023 amounted to €1.6 million compared to €0.1 million
in Q3 2022 mainly as a result of costs incurred during the period in Proyecto
Masa Valverde.
EBITDA for the three months ended 30 September 2023 amounted to €19.1
million compared with Q3 2022 negative of €4.3 million.
The main item below the EBITDA line is depreciation and amortisation of €9.0
million (Q3 2022: €9.0 million). In Q3 2023, net financing costs amounted to
a negative €0.1 million (compared to €0.5 million in Q3 2022).
Nine months financial review
Revenues for the nine-month period ended 30 September 2023 amounted to
€254.8 million (YTD 2022: €262.0 million).
Copper concentrate production during the nine-month period ended 30 September
2023 was 184,907 tonnes (YTD 2022: 180,635 tonnes) with 181,078 tonnes of
copper concentrates sold in the period (YTD 2022: 181,541 tonnes). Higher
production levels in YTD 2023 were mainly the result of robust throughput.
Inventories of concentrates as at the reporting date were 7,358 tonnes (31 Dec
2022: 3,529 tonnes).
Realised copper prices, excluding QPs, for YTD 2023 were US$3.86/lb copper
compared with US$4.06/lb copper in the same period of 2022. Concentrates were
sold under offtake agreements for the production not committed. The Company
did not enter into any hedging agreements in 2023.
Cost of sales for the nine-month period ended 30 September 2023 amounted to
€182.3 million, compared with €217.8 million in YTD 2022. Lower operating
costs in 2023 were due to a reduction in input costs compared with the 2022
period, where the high cost of electricity, diesel and other supplies were the
result of inflation and the geopolitical situation.
Cash costs of US$2.76/lb payable copper during YTD 2023 compare with
US$3.26/lb payable copper in the same period last year. The reduction in cash
costs can be mainly attributed to a significant reduction in the cost of
electricity (approx. €52.3 million lower) and other supplies, including
freight prices. AISC excluding investment in the tailings dam in the nine
month period were US$3.07/lb payable copper compared with US$3.47/lb payable
copper in YTD 2022. The decrease is mainly due to the lower cash costs,
although partly offset by higher capitalised stripping costs.
Sustaining capex for the nine-month period ended 30 September 2023 amounted to
€2.9 million, compared with €4.5 million in the same period the previous
year. Sustaining capex related to enhancements in plant processing systems. In
addition, the Company invested €10.3 million in the project to extend the
tailings dam, compared with €9.4 million in 2022.
Capex associated with the construction of the 50 MW solar plant amounted to
€10.7 million in YTD 2023, while investments in the E-LIX Phase I plant
totalled €12.9 million, of which €7.5 million was booked as prepayments
for service contract to Lain Technologies Ltd.
Corporate costs for the first nine-month period ended September 2023 were
€8.0 million, compared with €5.4 million in YTD 2022. 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 2023 and amounted to €5.2 million, compared with
€0.5 million, plus €2.2 million capitalised as permits in Proyecto Masa
Valverde, in YTD 2022.
EBITDA for the nine months ended 30 September 2023 amounted to €59.2
million, compared with €37.1 million in YTD 2022.
Depreciation and amortisation amounted to €27.2 million for the nine-month
period ended 30 September 2023 (YTD 2022: €25.3 million).
Net foreign exchange gains amounted to €0.8 million in YTD 2023 (€15.7
million in YTD 2022).
Net finance costs for YTD 2023 amounted to positive €2.5 million (YTD 2022
negative €1.5 million), this increase is mainly attributed to the interest
received of €3.5 million as a result of the agreement reached with Astor on
17 May 2023.
Copper prices
The average realised copper price (excluding QPs) increased by 7.1% to
US$3.77/lb in Q3 2023, from US$3.52/lb in Q3 2022.
The average prices of copper for the three and nine months ended 30 September
2023 and 2022 are summarised below:
$/lb Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Realised copper price (excluding QPs) 3.77 3.52 3.86 4.06
Market copper price per lb (period average) 3.79 3.51 3.90 4.12
Realised copper prices for the reporting period noted above have been
calculated using payable copper and excluding both provisional invoices and
final settlements of quotation periods ("QPs") together. The realised price
during Q3 2023, including the QP, was approximately $3.81/lb.
4. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost
per pound of payable copper", "All-In Sustaining Costs" ("AISC") "realised
prices" and "Net Cash/Debt" in this report. Non-IFRS measures do not have any
standardised meaning prescribed under IFRS, and therefore they may not be
comparable to similar measures presented by other companies. These measures
are intended to provide additional information and should not be considered in
isolation or as a substitute for indicators prepared in accordance with IFRS.
EBITDA includes gross sales net of penalties and discounts and all operating
costs, excluding finance, tax, impairment, depreciation and amortisation
expenses.
Cash Cost per pound of payable copper includes cash operating costs, including
treatment and refining charges ("TC/RC"), freight and distribution costs net
of by-product credits. Cash Cost per pound of payable copper is consistent
with the widely accepted industry standard established by Wood Mackenzie and
is also known as the C1 cash cost.
AISC per pound of payable copper includes C1 Cash Costs plus royalties and
agency fees, expenditures on rehabilitation, capitalised stripping costs,
exploration and geology costs, corporate costs and recurring sustaining
capital expenditures but excludes one-off sustaining capital projects, such as
the tailings dam project.
Realised price per pound of payable copper is the value of the copper payable
included in the concentrate produced including the discounts and other
features governed by the offtake agreements of the Group and all discounts or
premiums provided in commodity hedge agreements with financial institutions if
any, expressed in USD per pound of payable copper. Realised prices do not
include period end mark to market adjustments in respect of provisional
pricing. Realised price is consistent with the widely accepted industry
standard definition.
5. Liquidity and Capital Resources
Atalaya monitors factors that could impact its liquidity as part of Atalaya's
overall capital management strategy. Factors that are monitored include, but
are not limited to, the market price of copper, foreign currency rates,
production levels, operating costs, capital and administrative costs.
The following is a summary of Atalaya's cash position and cash flows as at 30
September 2023 and 31 December 2022.
Liquidity information
(Euro 000's) 30 Sep 2023 31 Dec 2022
Unrestricted cash and cash equivalents at Group level 98,032 108,550
Unrestricted cash and cash equivalents at Operation level 21,031 17,567
Restricted cash and cash equivalents at Operation level - 331
Consolidated cash and cash equivalents ((1)) 119,063 126,448
Net cash position ((1)) 66,764 53,085
Working capital surplus 76,917 84,047
((1) ) Includes borrowings
Unrestricted cash and cash equivalents (which include cash at both Group level
and Operation level) as at 30 September 2023 decreased to €119.1 million
from €126.5 million at 31 December 2022. The decrease in cash balances is
the result of net cash flow generated in the period and payment of debt to
fund development of the 50 MW solar plant and other facilities. Restricted
cash at 31 December 2022 amounted to €0.3 million held in escrow, which
represented funds utilized by the Company to cover possible remaining costs
due to Astor following litigation during 2022. However, due to the settlement
reached with Astor on 17 May 2023 whereby Astor agreed to repay €3.5 million
of interest previously paid to it to finalise the litigation, the previously
restricted cash has now been released and reversed.
Between 31 December 2022 and 30 September 2023, borrowings have exhibited a
notable reduction of €21.1 million. This decline is primarily attributed to
repayments made across various fronts, encompassing the financing of the solar
plant facility, debt associated with operational facilities, and the Astor
facility. The company's proactive stance in managing its balance sheet has
been instrumental in achieving this significant reduction in the borrowing
balance. This development underscores enhanced financial stewardship and
fortified the company's financial position.
As of 30 September 2023, Atalaya reported a working capital surplus of €76.9
million, compared with a working capital surplus of €84.0 million at 31
December 2022. The main liability of the working capital is trade payables
related to Proyecto Riotinto contractors and, to a lesser extent, short-term
loans following the settlement of credit facilities during Q3 2023.
The decrease in working capital resulted from higher inventory levels and
lower payable balances.
Overview of the Group's cash flows
(Euro 000's) Three month period ended 30 Sept 2023 Three month period ended 30 Sept 2022 Nine month period ended 30 Sept 2023 Nine month period ended 30 Sept 2022
Cash flows from/ (used in) from operating activities 27,778 (3,810) 59,028 17,572
Cash flows used in investing activities (18,864) (8,681) (35,604) (36,004)
Cash flows (used in)/ from financing activities (3,202) (12,647) (31,569) 2,816
Net decrease in cash and cash equivalents 5,712 (25,138) (8,145) (15,616)
Net foreign exchange differences 705 5,633 760 15,727
Total net cash flow for the period 6,417 (19,505) (7,385) 111
Three months cash flows review
Cash and cash equivalents increased by €6.4 million during the three months
ended 30 September 2023. This was due to the net results of cash from
operating activities amounting to €27.8 million, the cash used in investing
activities amounting to €18.9 million, the cash used in financing activities
totalling €3.2 million and net foreign exchange differences of €0.7
million.
Cash generated from operating activities before working capital changes was
€20.7 million. Atalaya increased its trade receivables in the period by
€5.9 million, decreased its inventory levels by €0.6 million and increased
its trade payables by €13.2 million.
Investment activities during the quarter consumed €18.9 million, relating
mainly to the 50 MW solar plant construction, tailings dam project, E-LIX
project and continuous enhancements in the processing systems of the plant.
Financing activities during the quarter decreased by €3.2 million primarily
due to the dividends paid.
Nine months cash flows review
Cash and cash equivalents decreased by €7.4 million during the nine months
ended 30 September 2023. This was due to cash from operating activities
amounting to €59.0 million, cash used in investing activities amounting to
€35.6 million, cash used in financing activities amounting to €31.6
million and net foreign exchange differences of €0.7 million.
Cash generated from operating activities before working capital changes was
€59.6 million. Atalaya decreased its trade payables in the period by €7.5
million, decreased its inventory levels by €0.7 million and decreased its
trade receivable balances by €11.4 million.
Throughout the period, investment activities amounted to €35.6 million, with
the majority of funds directed towards the construction of the 50 MW solar
plant, the tailings dam project, the E-LIX project, and ongoing enhancements
in the plant's processing systems.
Financing activities during the nine-month period ended 30 September 2023
decreased by €31.6 million driven by the repayment of unsecured credit
facilities and dividends paid.
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 2023, Atalaya recognised a
foreign exchange profit of €0.8 million and €0.7 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 Sept 2023 Three month period Nine month period ended 30 Sept 2023 Nine month period ended 30 Sept 2022
ended 30
Sept 2022
Average rates for the periods
GBP - EUR 0.8597 0.8563 0.8707 0.8472
USD - EUR 1.0884 1.0070 1.0833 1.0638
Spot rates as at
GBP - EUR 0.8646 0.8830 0.8646 0.8830
USD - EUR 1.0594 0.9748 1.0594 0.9748
6. Sustainability
Corporate Social Responsibility
The third quarter of the year marks further progress from Atalaya and its
wholly owned Fundación Atalaya Riotinto as they continue their efforts to
fulfil their social responsibilities.
In this context, neighbouring municipalities have just renewed leadership
after municipal elections. During this quarter the company and its Foundation
are in conversations with the new administrations to develop new partnership
agreements that need to be signed. The agreements are designed to secure
funding for collaborative initiatives aimed at addressing social,
environmental, and infrastructure challenges. During this quarter, in Minas de
Riotinto, the Foundation has contributed with a programme to refurbish a
number of pedestrian pathways in the surroundings of the town. Furthermore,
the Foundation has agreed to provide funding for several local projects,
including support for NGOs, local associations and sport clubs.
Moreover, the Foundation has now completed its training program aimed at local
unemployed individuals. The Third Atalaya Mining Operators Course has
successfully finished its practical two-month internship with the principal
contractors of the Riotinto Mine. Now the group of 20 students is ready to
engage with the labour market with new skills acquired thanks to the hands-on
experience in various mining and industrial related operations which include
official qualifications. The previous programme was successful, with nearly
half of the participants now employed by various companies.
Health and Safety
The results for Q3 2023, compared to the same period in 2022, show a
significant improvement with only one lost time accident and 97 consecutive
days with no lost-time accidents.
For the nine months, results have been improved regarding the previous year
with three minor loss accidents and severity and frequency indices are 0.10
and 4.48.
In addition, Atalaya has updated its internal procedure for controlling drugs
and preventing work under the influence of psychoactive substances and has
been approved an evidentiary test with a biological sample (blood) carried out
by an accredited laboratory.
The Field Leadership activity is running well and has added value to
contributing to the safety behaviour in the mining facility.
The training plan for Atalaya employees is currently focused on basic life
support and the rules of action in the event of health emergencies at the
company with a specific training in heat-stressed work according with the
metabolic loading of the job.
Environment
During the third quarter of 2023, the environmental department has continued
executing the actions of environmental monitoring of the activity and
management of the natural environment. Key points of the quarter:
· During the third quarter of the year, one environmental incident
was registered: A spill was detected in Flotation Area over open ground. It
was caused by an electrical failure. The area was cleaned, and the waste was
taken to the tailings facility.
· A total rainfall of 36.6 l/m2 was recorded in Q3 2023, which was
around 3% less than in the same period of previous year. Total rainfall for
the hydrological year (October 2022 to September 2023) is 442.3 l/m(2), which
is 9% more than the rainfall recorded in the previous hydrological year (same
period).
· On July 21st, 2023, the Integrated Environmental Authorization (IPPC
Permit for ELIX Plant) was granted.
· The additional measures defined in the action plan against dust
continued to be implemented, intensifying periodic irrigation, implementing
new coordination measures, and carrying out exhaustive monitoring of the
emissions generated in the operation.
· All the regular internal controls of diffuse emissions into the
atmosphere have been carried out, and the results of the controls are within
the limit values. However, in August, the TSP (Total Suspended Particles)
limit was exceeded at sampling point number 1. In the rest, ADP (Atmospheric
Deposition Particles) and TSP limits were met. Furthermore, the results of
Annual External Control, Point and Diffuse Emissions into the atmosphere were
received. All limits were met. Other 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. 82 inspections in total were
carried out during the third quarter, including, plant, mine area and the
contractors' camps.
7. Risk Factors
Due to the nature of Atalaya's business in the mining industry, the Group is
subject to various risks that could materially impact the future operating
results and could cause actual events to differ materially from those
described in forward-looking statements relating to Atalaya. Readers are
encouraged to read and consider the risk factors detailed in Atalaya's
audited, consolidated financial statements for the year ended 31 December
2022.
The Company continues to monitor the principal risks and uncertainties that
could materially impact the Company's results and operations, including the
areas of increasing uncertainty such as inflationary pressure on goods and
services required for the business and geopolitical developments which could
affect operations and markets..
8. Critical accounting policies, estimates, judgements, assumptions
and accounting changes
The preparation of Atalaya's Financial Statements in accordance with IFRS
requires management to make estimates, judgements and assumptions that affect
amounts reported in the Financial Statements and accompanying notes. There is
a full discussion and description of Atalaya's critical accounting policies in
the audited consolidated financial statements for the year ended 31 December
2022.
As at 30 September 2023, there are no significant changes in critical
accounting policies or estimates to those applied in 2022.
9. Other Information
Additional information about Atalaya Mining Plc. is available at
www.atalayamining.com (http://www.atalayamining.com)
Unaudited interim condensed consolidated financial statements on subsequent
pages.
By Order of the Board of Directors,
___________________________________
Roger Davey
Chairman
Nicosia, 15 November 2023
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2023 and 2022
(Euro 000's) Note Three month period ended 30 Sept 2023 Three month period ended 30 Sept 2022 Nine month period ended 30 Sept 2023 Nine month period ended 30 Sept 2022
Revenue 4 85,361 82,284 254,755 261,953
Operating costs and mine site administrative expenses (62,294) (84,450) (181,757) (217,082)
Mine site depreciation and amortization (8,992) (9,039) (27,165) (25,344)
Gross profit 14,075 (11,205) 45,833 19,527
Administration and other expenses (2,383) (905) (8,028) (5,356)
Share-based benefits 14 (165) (318) (495) (675)
Exploration expenses (1,554) (92) (5,156) (456)
Other income 635 4 1,078 290
Care and maintenance expenditure (499) (789) (1,185) (1,559)
Operating profit 10,109 (13,305) 32,047 11,771
Net foreign exchange gain 3 705 5,633 760 15,727
Net finance (costs)/income 5 (143) (510) 2,493 (1,451)
Profit before tax 10,671 (8,182) 35,300 26,047
Tax 6 469 963 (3,852) (3,160)
Profit for the period 11,140 (7,219) 31,448 22,887
Profit for the period attributable to:
- Owners of the parent 7 11,570 (6,608) 32,481 24,274
- Non-controlling interests (430) (611) (1,033) (1,387)
11,140 (7,219) 31,448 22,887
Earnings per share from operations attributable to equity holders of the
parent during the period:
Basic earnings per share (EUR cents per share) 7 8.3 (4.7) 23.2 17.4
Fully diluted earnings per share (EUR cents per share) 7 8.0 (4.6) 22.6 17.0
Profit for the period 11,140 (7,219) 31,448 22,887
Other comprehensive income that will not be reclassified to profit or loss in
subsequent periods (net of tax):
Change in fair value of financial assets through other comprehensive income 4 (6) (1) (12)
'OCI'
Total comprehensive income for the period 11,144 (7,225) 31,447 22,875
Total comprehensive income for the period attributable to:
- Owners of the parent 7 11,574 (6,614) 32,480 24,262
- Non-controlling interests (430) (611) (1,033) (1,387)
11,144 (7,225) 31,447 22,875
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Financial Position
(All amounts in Euro thousands unless otherwise stated)
As at 30 September 2023 and 2022
(Euro 000's) Note 30 Sep 2023 31 Dec 2022
Assets Unaudited Audited
Non-current assets
Property, plant and equipment 8 376,065 354,908
Intangible assets 9 50,359 53,830
Trade and other receivables 12 24,680 16,362
Non-current financial assets 2.3 1,101 1,101
Deferred tax asset 8,355 7,293
460,560 433,494
Current assets
Inventories 10 38,142 38,841
Trade and other receivables 12 44,388 64,155
Tax refundable 100 100
Other financial assets 2.3 31 33
Cash and cash equivalents 13 119,063 126,448
201,724 229,577
Total assets 662,284 663,071
Equity and liabilities
Equity attributable to owners of the parent
Share capital 14 13,596 13,596
Share premium 14 319,411 319,411
Other reserves 15 70,300 69,805
Accumulated profit 91,699 70,483
495,006 473,295
Non-controlling interests (8,031) (6,998)
Total equity 486,975 466,297
Liabilities
Non-current liabilities
Trade and other payables 16 3,415 2,015
Provisions 17 27,589 24,083
Lease liabilities 19 4,002 4,378
Borrowings 18 15,496 20,768
50,502 51,244
Current liabilities
Trade and other payables 16 83,373 90,022
Lease liabilities 19 503 536
Borrowings 18 36,803 52,595
Current provisions 17 631 952
Current tax liabilities 3,497 1,425
124,807 145,530
Total liabilities 175,309 196,774
Total equity and liabilities 662,284 663,071
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 Sept 2023 and 2022
(Euro 000's) Note Share capital Share premium ((1)) Other reserves Accum. Profits Total NCI Total equity
At 1 January 2023 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
Adjustment prior year - - - (12) (12) - (12)
Opening balance adjusted 13,596 319,411 69,805 70,471 473,283 (6,998) 466,285
Profit for the period - - - 32,481 32,481 (1,033) 31,448
Change in fair value of financial assets through OCI - - (1) - (1) - (1)
Total comprehensive income - - (1) 32,481 32,480 (1,033) 31,447
Transactions with owners
Recognition of share-based payments 15 - - 496 - 496 - 496
Other changes in equity - - - 224 224 - 224
Dividends 11 - - - (11,477) (11,477) - (11,477)
At 30 September 2023 13,596 319,411 70,300 91,699 495,006 (8,031) 486,975
(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) - (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 11 - - - (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
Audited
At 1 January 2022 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
Adjustment prior year - - - (53) (53) - (53)
Opening balance adjusted 13,447 315,916 52,690 58,701 440,754 (4,909) 435,845
Profit for the period - - - 33,155 33,155 (2,229) 30,926
Change in fair value of financial assets through OCI - - (6) - (6) - (6)
Total comprehensive income - - (6) 33,155 33,149 (2,229) 30,920
Transactions with owners
Issuance of share capital 14 149 3,495 - - 3,644 - 3,644
Recognition of depletion factor 15 - - 12,800 (12,800) - - -
Recognition of share-based payments 15 - - 1,279 - 1,279 - 1,279
Recognition of non-distributable reserve 15 - - 316 (316) - - -
Recognition of distributable reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - - (432) (432) 140 (292)
Dividends - - - (5,099) (5,099) - (5,099)
At 31 December 2022 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
((1)) The share premium reserve is not available for distribution
The notes on 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 2023 and 2022
(Euro 000's) Note Three month period ended 30 Sep 2023 Three month period ended Nine month period ended 30 Sep 2023 Nine month period ended
30 Sep 2022 30 Sep 2022
Cash flows from operating activities
Profit/ (loss) before tax 10,671 (8,182) 35,300 26,047
Adjustments for:
Depreciation of property, plant and equipment 8 7,886 7,899 23,800 22,017
Amortisation of intangibles 9 1,106 1,140 3,365 3,327
Recognition of share-based payments 15 165 318 495 675
Interest income 5 (461) (1) (4,858) (16)
Interest expense 5 461 - 1,655 -
Unwinding of discounting on mine rehabilitation provision 17 137 249 690 718
Other provisions 17 (287) - - -
Legal provisions 17 1 - 1 -
Net foreign exchange differences 3 (705) (5,633) (760) (15,727)
Unrealised foreign exchange loss on financing activities 1,727 (26) (123) (27)
Cash inflows/(outflows) from operating activities before working capital 20,701 (4,236) 59,565 37,014
changes
Changes in working capital:
Inventories 10 620 550 699 (13,116)
Trade and other receivables 12 (5,879) (9,784) 11,449 (17,735)
Trade and other payables 16 13,172 11,797 (7,475) 15,491
Provisions 17 (103) - (397)
Cash flows from operations 28,511 (1,673) 63,841 21,654
Tax paid (266) (1,875) (3,139) (3,333)
Interest on leases liabilities 5 (6) (12) (19) (15)
Interest paid 5 (461) (250) (1,655) (734)
Net cash from operating activities 27,778 (3,810) 59,028 17,572
Cash flows from investing activities
Purchase of property, plant and equipment 9 (18,620) (7,824) (39,143) (33,856)
Purchase of intangible assets 10 (246) (858) (294) (2,164)
Interest received 5 2 1 3,833 16
Net cash used in investing activities (18,864) (8,681) (35,604) (36,004)
Cash flows from financing activities
Lease payments 19 (133) - (428) (315)
Net proceeds/(repayments) from borrowings 18 8,408 (7,549) (19,664) 4,586
Proceeds from issuance of shares 14 - - - 3,643
Dividends (11,477) (5,098) (11,477) (5,098)
Net cash (used in)/ from financing activities (3,202) (12,647) (31,569) 2,816
Net increase/(decrease) in cash and cash equivalents 5,712 (25,138) (8,145) (15,616)
Net foreign exchange difference 3 705 5,633 760 15,727
Cash and cash equivalents:
At beginning of the period 112,646 127,133 126,448 107,517
At end of the period 119,063 107,628 119,063 107,628
The notes on the subsequent pages are an integral part of these Unaudited
Interim Condensed Consolidated Financial Statements.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2023 and 2023
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. The Company continued to be listed on AIM as at 30 September
2023.
On 20 February 2023, Atalaya announced that applied a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary
shares in the Company continue to trade on the AIM market of the London Stock
Exchange under the symbol "ATYM". Delisting from the TSX took effect at the
close of trading on 20 March 2023. Furthermore, Atalaya ceased to be a
reporting issuer in Canadian jurisdictions on 26 June 2023.
Additional information about Atalaya Mining Plc is available at
www.atalayamining.com (http://www.atalayamining.com) as per requirement of AIM
rule 26.
Change of name and share consolidation
Following the Company's Extraordinary General Meeting ("EGM") on 13 October
2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc
became effective on 21 October 2015. On the same day, the consolidation of
ordinary shares came into effect, whereby all shareholders received one new
ordinary share of nominal value Stg £0.075 for every 30 existing ordinary
shares of nominal value Stg £0.0025.
Principal activities
Atalaya is a European mining and development company. The strategy is to
evaluate and prioritise metal production opportunities in several
jurisdictions throughout the well-known belts of base and precious metal
mineralisation in Spain, elsewhere in Europe and Latin America.
The Group has interests in four mining projects: Proyecto Riotinto, Proyecto
Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group
has an earn-in agreement to acquire certain 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 East
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 2023 have been prepared in accordance with
International Accounting Standard 34: Interim Financial Reporting. IFRS
comprise the standard issued by the International Accounting Standard Board
("IASB"), and IFRS Interpretations Committee ("IFRICs") as issued by the IASB.
Additionally, the unaudited interim condensed consolidated financial
statements have also been prepared in accordance with the IFRS as adopted by
the European Union (EU), using the historical cost convention and have been
prepared on a historical cost basis except for the revaluation of certain
financial instruments that are measured at fair value at the end of each
reporting period, as explained below.
These unaudited interim condensed consolidated financial statements include
the financial statements of the Company and its subsidiary undertakings. They
have been prepared using accounting bases and policies consistent with those
used in the preparation of the consolidated financial statements of the
Company and the Group for the year ended 31 December 2022. These unaudited
interim condensed consolidated financial statements do not include all the
disclosures required for annual financial statements, and accordingly, should
be read in conjunction with the consolidated financial statements and other
information set out in the Group's annual report for the year ended 31
December 2022.
(b) Going concern
These unaudited condensed interim consolidated financial statements have been
prepared based on accounting principles applicable to a going concern which
assumes that the Group will realise its assets and discharge its liabilities
in the normal course of business. Management has carried out an assessment of
the going concern assumption and has concluded that the Group will generate
sufficient cash and cash equivalents to continue operating for the next twelve
months.
Management continues to monitor the impact of geopolitical developments.
Currently no significant impact is expected in the operations of the Group.
2.2 New standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the unaudited condensed
interim consolidated financial statements are consistent with those followed
in the preparation of the Group's annual consolidated financial statements for
the year ended 31 December 2022, except for the adoption of new standards
effective as of 1 January 2023. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
Several amendments and interpretations apply for the first time in 2023, but
do not have a material impact on the unaudited condensed interim consolidated
financial statements of the Group.
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new
accounting standard for insurance contracts covering recognition and
measurement, presentation and disclosure. IFRS 17 replaces IFRS 4 Insurance
Contracts that was issued in 2005. IFRS 17 applies to all types of insurance
contracts (i.e., life, non-life, direct insurance and re-insurance),
regardless of the type of entities that issue them, as well as to certain
guarantees and financial instruments with discretionary participation
features; a few scope exceptions will apply. The overall objective of IFRS 17
is to provide an accounting model for insurance contracts that is more useful
and consistent for insurers. In contrast to the requirements in IFRS 4, which
are largely based on grandfathering previous local accounting policies, IFRS
17 provides a comprehensive model for insurance contracts, covering all
relevant accounting aspects. IFRS 17 is based on a general model, supplemented
by:
· A specific adaptation for contracts with direct participation
features (the variable fee approach)
· A simplified approach (the premium allocation approach) mainly
for short-duration contracts
The amendments had no impact on the Group's unaudited condensed interim
consolidated financial statements.
Definition of Accounting Estimates - Amendments to IAS 8
The amendments to IAS 8 clarify the distinction between changes in accounting
estimates, and changes in accounting policies and the correction of errors.
They also clarify how entities use measurement techniques and inputs to
develop accounting estimates.
The amendments had no impact on the Group's unaudited condensed interim
consolidated financial statements.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality
Judgements provide guidance and examples to help entities apply materiality
judgements to accounting policy disclosures. The amendments aim to help
entities provide accounting policy disclosures that are more useful by
replacing the requirement for entities to disclose their 'significant'
accounting policies with a requirement to disclose their 'material' accounting
policies and adding guidance on how entities apply the concept of materiality
in making decisions about accounting policy disclosures.
The amendments had no impact on the Group's unaudited condensed interim
consolidated financial statements. but are expected to affect the accounting
policy disclosures in the Group's annual consolidated financial statements.
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12
The amendments to IAS 12 Income Tax narrow the scope of the initial
recognition exception, so that it no longer applies to transactions that give
rise to equal taxable and deductible temporary differences such as leases and
decommissioning liabilities. The amendments had no impact on the Group's
unaudited condensed interim consolidated financial statements.
2.3 Fair value estimation
The fair values of the Group's financial assets and liabilities approximate
their carrying amounts at the reporting date.
The fair value of financial instruments traded in active markets, such as
publicly traded trading and other financial assets is based on quoted market
prices at the reporting date. The quoted market price used for financial
assets held by the Group is the current bid price. The appropriate quoted
market price for financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active
market is determined by using valuation techniques. The Group uses a variety
of methods, such as estimated discounted cash flows, and makes assumptions
that are based on market conditions existing at the reporting date.
Fair value measurements recognised in the consolidated statement of financial
position
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, Grouped into Levels
1 to 3 based on the degree to which the fair value is observable.
· Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
· Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
2.3 Fair value estimation
Financial assets or liabilities Level 1 Level 2 Level 3 Total
(Euro 000's)
30 Sep 2023
Other financial assets
Financial assets at FV through OCI 31 - 1,101 1,132
Trade and other receivables - - - -
Receivables (subject to provisional pricing) - 12,257 - 12,257
Total 31 12,257 1,101 13,389
31 Dec 2022
Other financial assets
Financial assets at FV through OCI 33 - 1,101 1,134
Trade and other receivables -
Receivables (subject to provisional pricing) - 27,557 - 27,557
Total 33 27,557 1,101 28,691
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 of the 2022 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 2023
Revenue - from external customers 6,312 79,049 - 85,361
EBITDA 3,225 15,937 (61) 19,101
Depreciation/amortisation charge - (8,992) - (8,992)
Net foreign exchange gain 506 199 - 705
Finance income 174 287 - 461
Finance cost - (604) - (604)
Profit/ (loss) before tax 3,905 6,827 (61) 10,671
Tax (639) 1,108 - 469
Profit/ (loss) for the period 3,266 7,935 (61) 11,140
Nine month period ended 30 Sep 2023
Revenue - from external customers 19,356 235,399 - 254,755
EBITDA 9,046 50,244 (78) 59,212
Depreciation/amortisation charge - (27,165) - (27,165)
Net foreign exchange gain 49 711 - 760
Finance income 375 4,482 - 4,857
Finance cost - (2,364) - (2,364)
Profit/(loss) before tax 9,470 25,908 (78) 35,300
Tax (2,228) (1,624) - (3,852)
Profit/(loss) for the period 7,242 24,284 (78) 31,448
Total assets 99,663 558,551 4,070 662,284
Total liabilities (3,579) (171,656) (74) (175,309)
Depreciation of property, plant and equipment - 23,800 - 23,800
Amortisation of intangible assets - 3,365 - 3,365
Total net additions of non-current assets - 58,416 - 58,416
(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
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 2023 Nine month period ended 30 Sep 2022
Segment €'000 Segment €'000
Offtaker 1 Copper 66,400 Copper 60,343
Offtaker 2 Copper 51,329 Copper 73,021
Offtaker 3 Copper 137,008 Copper 128,577
4. Revenue
(Euro 000's) Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Revenue from contracts with customers ((1)) 86,224 89,796 259,311 275,474
Fair value losses relating to provisional pricing within sales ((2)) (863) (7,512) (4,556) (13,521)
Total revenue 85,361 82,284 254,755 261,953
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 Q3 2023 and YTD 2023 revenues are transaction
prices, which relate to the freight services provided by the Group to the
customers arising from the sales of copper concentrate under CIF incoterm, of
€1.2 million (Q3 2022: €1.5 million) and €5.7 million (YTD 2022: €5.7
million), respectively.
((2) )Provisional pricing impact represents the change in fair value of
the embedded derivative arising on sales of concentrate.
5. Net Finance (Costs)/Income
(Euro 000's) Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Interest expense
Other interest (461) (250) (1,655) (734)
Interest on lease liabilities (6) (12) (19) (15)
Unwinding of discount on mine rehabilitation provision (Note 17) (137) (249) (690) (718)
Interest income
Financial interests ((1)) 459 1 1,025 16
Other received interests ((2)) 2 - 3,832 -
(143) (510) 2,493 (1,451)
((1) )Interest income relates to interest received on bank balances.
((2) )Interest income comprise mainly the interest received of €3.5
million as a result of the agreement reached with Astor in May 2023.
6. Tax
The Group calculates the period income tax expense using the tax rate that
would be applicable to the expected total annual earnings. The major
components of income tax expense in the unaudited interim condensed
consolidated statement of profit or loss are:
Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
(Euro 000's)
Income taxes
Current income tax income/ (expense) 469 963 (3,852) (3,160)
Income tax income/ (expense) recognised in statement of profit and loss 469 963 (3,852) (3,160)
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 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Profit/ (loss) attributable to equity holders of the parent 11,570 (6,608) 32,481 24,274
Weighted number of ordinary shares for the purposes of basic earnings per 139,880 139,880 139,880 139,716
share (000's)
Basic earnings per share (EUR cents/share) 8.3 (4.7) 23.2 17.4
Weighted number of ordinary shares for the purposes of fully diluted earnings 144,728 143,423 144,051 142,635
per share (000's)
Fully diluted earnings per share (EUR cents/share) 8.0 (4.6) 22.6 17.0
At 30 September 2023 there are nil warrants (Note 14) and 4,848,500 options
(Note 14) (2022: nil warrants and 3,543,500 options) which have been included
when calculating the weighted average number of shares for 2023 for fully
diluted earnings per share.
8. 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 2022 65,003 7,076 283,346 22,860 51,667 801 430,753
Additions 2,383 - 1,378 29,404 691 - 33,856
Reclassifications 15,300 - 4,979 (20,279) - - -
Increase in rehab. Provision 1,365 - - - - - 1,365
At 30 September 2022 84,051 7,076 289,703 31,985 52,358 801 465,974
Additions - - (116) 20,069 - - 19,953
Increase in rehab. Provision 362 - - - - - 362
Reclassifications - - 1,748 (1,819) - 71 -
Advances 103 - - - - - 103
Write-off (4,190) - - - - - (4,190)
At 31 December 2022 80,326 7,076 291,335 50,235 52,358 872 482,202
Additions 36 - 2,975 29,255 9,762 24 42,052
Increase in rehab. Provision 2,891 - - - - - 2,891
Reclassifications - - 19,014 (19,010) - - 4
At 30 September 2023 83,263 7,076 313,324 60,480 62,120 896 527,159
Depreciation
At 1 January 2022 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
Charge for the period 1,137 24 5,617 - 836 6 7,620
At 31 December 2022 20,454 1,998 89,182 - 14,921 739 127,294
Charge for the period 3,113 401 17,311 - 2,959 16 23,800
At 30 September 2023 23,567 2,399 106,493 - 17,880 755 151,094
Net book value
At 30 September 2023 59,696 4,677 206,831 60,480 44,240 141 376,065
At 31 December 2022 59,872 5,078 202,153 50,235 37,437 133 354,908
( )
((1)) Assets under construction at 30 September 2023 were €60.5 million
(2022: €32.0 million) which include sustaining capital expenditures,
tailings dam project, ELIX plant and solar plant.
((2)) Stripping costs
((3)) Includes motor vehicles, furniture, fixtures and office equipment which
are depreciated over 5-10 years.
The above fixed assets are mainly located in Spain.
9. Intangible assets
(Euro 000's) Permits Licences, R&D and software Total
Cost
At 1 January 2022 80,358 8,595 88,953
Additions 2,164 - 2,164
At 30 September 2022 82,522 8,595 91,117
(Disposals)/additions (1,267) 47 (1,220)
At 31 December 2022 81,255 8,642 89,897
Additions 58 36 94
Disposals (200) - (200)
At 30 September 2023 81,113 8,678 89,791
Amortisation
At 1 January 2022 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
Charge for the period 1,135 20 1,155
At 31 December 2022 27,627 8,440 36,067
Charge for the period 3,336 29 3,365
At 30 September 2023 30,963 8,469 39,432
Net book value
At 30 September 2023 50,150 209 50,359
At 31 December 2022 53,628 202 53,830
Increase of permits in 2023 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.
10. Inventories
(Euro 000's) 30 Sep 2023 31 Dec 2022
Finished products 8,328 4,547
Materials and supplies 25,744 31,330
Work in progress 4,070 2,964
Total inventories 38,142 38,841
As of 30 September 2023, copper concentrate produced and not sold amounted to
7,358 tonnes (31 Dec 2022: 3,529 tonnes). Accordingly, the inventory for
copper concentrate was €8.3 million (31 Dec 2022: €4.5 million).
Materials and supplies relate mainly to machinery spare parts. Work in
progress represents ore stockpiles, which is ore that has been extracted and
is available for further processing.
11. Dividends paid
Cash dividends declared and paid during the period:
(Euro 000's) Three month period ended 30 Sep 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Final dividends declared and paid 4,956 - 4,956 -
Interim dividend declared and paid 6,520 5,098 6,520 5,098
Fully paid ordinary shares carry one vote per share and carry the right to
dividends.
In March 2023, the Board of Directors proposed a final dividend for 2022 of
US$0.0385 per ordinary share, which was equivalent to approximately 3.15 pence
per share. Following the approval of Resolution 10 by the Company's
shareholders at its 2023 Annual General Meeting, which took place on 28 June
2023, the 2022 final dividend was paid on 8 August 2023 (Note 26).
On 9 August 2023, the Company's Board of Directors elected to declare a 2023
Interim Dividend of US$0.05 per ordinary share, which is equivalent to
approximately 3.9 pence per share. The 2023 Interim Dividend was paid on 28
September 2023.
12. Trade and other receivables
(Euro 000's) 30 Sep 2023 31 Dec 2022
Non-current
Deposits 310 256
Loans 229 -
Prepayments for service contract 21,451 12,865
Other non-current receivables 2,690 3,241
24,680 16,362
Current
Trade receivables at fair value - subject to provisional pricing 7,806 14,757
Trade receivables from shareholders at fair value - subject to provisional 4,451 12,800
pricing (Note 22.3)
Other receivables from related parties at amortised cost (Note 22.3) 56 56
Deposits 37 37
VAT receivables 26,241 28,856
Tax advances 1,107 9
Prepayments 3,817 5,845
Other current assets 873 1,795
44,388 64,155
Allowance for expected credit losses - -
Total trade and other receivables 69,068 80,517
Trade receivables are shown net of any interest applied to prepayments.
Payment terms are aligned with offtake agreements and market standards and
generally are 7 days on 90% of the invoice and the remaining 10% at the
settlement date which can vary between 1 to 5 months. The fair values of trade
and other receivables approximate to their book values.
Non-current deposits included €250k (€250k at 31 December 2022) as a
collateral for bank guarantees, which was recorded as restricted cash (or
deposit).
Other non-current receivables 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 prepayment 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 2023 31 Dec 2022
Unrestricted cash and cash equivalents at Group level 98,032 108,550
Unrestricted cash and cash equivalents at Operation level 21,031 17,567
Restricted cash and cash equivalents at Operation level - 331
Consolidated cash and cash equivalents 119,063 126,448
Restricted cash amounted at 31 December 2022 to €0.3 million was held in
escrow, which represented funds utilized by the Company to cover possible
remaining costs due to Astor following litigation during 2022. However, due to
the settlement reached with Astor on 17 May 2023 whereby Astor agreed to repay
€3.5 million of interest previously paid to it to finalise the litigation,
the previously restricted cash has now been released and reversed.
Cash and cash equivalents denominated in the following currencies:
(Euro 000's) 30 Sep 2023 31 Dec 2023
Euro - functional and presentation currency 62,625 84,146
Great Britain Pound 360 895
United States Dollar 56,078 41,407
Consolidated cash and cash equivalents 119,063 126,448
14. Share capital and share premium
Shares Share Capital Share premium Total
000's Stg£'000 Stg£'000 Stg£'000
Authorised
Ordinary shares of Stg £0.075 each* 200,000 15,000 - 15,000
Issued and fully paid Shares Share Capital Share premium Total
Issue Date Price (£) Details 000's €'000 €'000 €'000
31 December 2021/1 January 2022 138,236 13,447 315,916 329,363
22-Jan-22 1.44 Exercised share options ((b)) 314 28 512 540
22-Jan-22 2.015 Exercised share options ((b)) 321 29 746 775
22-Jan-22 2.045 Exercised share options ((b)) 400 36 941 977
22-Jan-22 1.475 Exercised share options ((b)) 451 42 754 796
22-Jan-22 3.09 Exercised share options ((b)) 135 12 505 517
23-Jun-22 1.475 Exercised share options ((a)) 23 2 37 39
31-Dec-22 139,880 13,596 319,411 333,007
30-Sep-23 139,880 13,596 319,411 333,007
Authorised capital
The Company's authorised share capital is 200,000,000 ordinary shares of Stg
£0.075 each.
Issued capital
2023
No share issuance has taken place thus far in 2023.
The Company's share capital at 30 September 2023 is 139,879,209 ordinary
shares of Stg £0.075 each.
2022
a) On 23 June 2022, the Company announced that it has issued 22,500
ordinary shares of 7.5p in the Company pursuant to an exercise of share
options by an employee.
b) On 26 January 2022, the Company announced that it was notified that
PDMRs and senior employees exercised a total of 1,350,000 and 270,750 options.
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 2023:
Grant date Expiry date Exercise price £ Share options
29 May 2019 28 May 2024 2.015 666,500
30 June 2020 29 June 2030 1.475 516,000
24 June 2021 23 June 2031 3.090 1,016,000
26 January 2022 25 January 2032 4.160 120,000
22 June 2022 30 June 2027 3.575 1,225,000
22 May 2023 30 May 2028 3.270 1,305,000
Total 4,848,500
Weighted average Share options
exercise price £
At 1 January 2023 2.857 3,543,500
Granted during the year 3.270 1,305,000
30 Sep 2023 2.968 4,848,500
Warrants
As at 30 September 2023 and 2022 there were no warrants.
15. Other reserves
(Euro 000's) FV reserve of financial assets at FVOCI ((2)) Non-Distributable reserve ((3)) Total
Share option Bonus share Depletion factor ((1)) Distributable
reserve ((4))
At 1 January 2022 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
Recognition of share-based payments 604 - - - - - 604
Other changes in reserves - - - - - 291 291
Change in fair value of financial assets at fair value through OCI - - - - - - -
At 31 December 2022 10,365 208 37,778 (1,159) 8,316 14,291 69,799
Recognition of share-based payments 495 - - - - - 495
Change in fair value of financial assets at fair value through OCI - - - - - - -
At 30 September 2023 10,860 208 37,778 (1,153) 8,316 14,291 70,300
((1) )Depletion factor reserve
At 30 September 2023, the Group has recognised €nil million (YTD 2022:
disposed €12.8 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 2022 to distributable
reserves.
16. Trade and other payables
(Euro 000's) 30 Sep 2023 31 Dec 2022
Non-current
Other non-current payables 2,000 2,000
Government grant 1,415 15
3,415 2,015
Current
Trade payables 79,662 85,038
Accruals 3,355 3,322
VAT payables - 259
Other 356 1,403
83,373 90,022
Other non-current payables are related with the acquisition of Atalaya Ossa
Morena SL (former Rio Narcea Nickel SL).
Trade payables are mainly for the acquisition of materials, supplies and other
services. These payables do not accrue interest and no guarantees have been
granted. The fair value of trade and other payables approximate their book
values. Trade payables are non-interest-bearing and are normally settled on
60-day terms.
17. Provisions
(Euro 000's) Other provisions Legal costs Rehabilitation costs Total costs
At 1 January 2022 - 279 26,299 26,578
Additions - - 1,033 1,033
Revision of provision - - 332 332
Finance cost - - 718 718
At 30 September 2022 - 279 28,382 28,661
Additions - 30 - 30
Reclassification 1,435 - - 1,435
Used of provision - (10) (413) (423)
Reversal of provision - (73) (3,497) (3,570)
Finance cost - - (1,098) (1,098)
At 31 December 2022 1,435 226 23,374 25,035
Additions - 1 - 1
Used of provision - - (397) (397)
Revision of provision - - 2,891 2,891
Finance cost - - 690 690
At 30 September 2023 1,435 227 26,558 28,220
(Euro 000's) 30 Sep 2023 31 Dec 2022
Non-current 27,589 24,083
Current 631 952
Total 28,220 25,035
Rehabilitation provision
Rehabilitation provision represents the accrued cost required to provide
adequate restoration and rehabilitation upon the completion of production
activities. These amounts will be settled when rehabilitation is undertaken,
generally over the project's life.
The discount rate used in the calculation of the net present value of the
liability as at 30 September 2023 was 3.41% (2022: 3.41%), which is the
15-year Spain Government Bond rate from 2017 to 2021. An inflation rate of
1%-5.70% is applied on annual basis.
Legal provision
The Group has been named a defendant in several legal actions in Spain, the
outcome of which is not determinable as at 30 September 2023. Management has
individually reviewed each case and established a provision of €0.2 million
as of 30 September 2023 (€0.2 million at 31 December 2022) for these claims,
which has been reflected in these unaudited condensed interim consolidated
financial statements.
18. Borrowings
(Euro 000's) 30 Sep 2023 31 Dec 2022
Non-current borrowings
Credit facilities 15,496 20,768
15,496 20,768
Current borrowings
Credit facilities 36,803 52,595
36,803 52,595
The Group had credit approval for facilities totalling €128.0 million
(€119.6 million at 31 December 2022). During 2023, Atalaya drew down some of
its existing credit facilities to financing the construction of 50 MW solar
plant (payable amount of €21.5 million at 30 September 2023) and in 2022 to
pay the Deferred Consideration.
Borrowing with fixed interest rates range from 1.60% to 2.45% with an average
fixed interest rate of 1.95%. Margins on borrowing with variable interest
rates, usually 12 months EURIBOR, range from 1.10% to 2.25% with an average
margin of 1.53%.
At 30 September 2023, the Group had used €52.3 million of its facilities and
had undrawn facilities of €83.7 million.
19. Lease liabilities
(Euro 000's) 30 Sep 2023 31 Dec 2022
Non-current
Lease liabilities 4,002 4,378
4,002 4,378
Current
Lease liabilities 503 536
503 536
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 (2022: €0.4 million) for the nine month
period ended 30 September 2023. The land lease is set for a duration of
thirteen years, with payments due at the beginning of each month, increasing
annually by an average of 1.5%. As of 30 September 2023, the remaining term of
this lease is nine years and a quarter.
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 warehouse lease is
scheduled for a period of thirteen years, with payments due at the beginning
of each month, escalating in accordance with the yearly Spanish consumer price
index. As of 30 September 2023, the remaining term of this lease is eight
years and a quarter.
(Euro 000's) 30 Sep 2023 31 Dec 2022
Minimum lease payments due:
- Within one year 503 536
- Two to five years 1,935 1,957
- Over five years 2,067 2,421
Present value of minimum lease payments due 4,505 4,914
(Euro 000's) Lease liabilities
At 1 January 2023 4,914
Interest expense 19
Lease payments (428)
At 30 September 2023 4,505
At 30 September 2023
Non-current liabilities 4,002
Current liabilities 503
4,505
20. Acquisition, incorporation and disposal of subsidiaries
There were no acquisitions or incorporation of subsidiaries during the nine
month period ended 30 September 2023 and 2023.
21. Winding-up of subsidiaries
There were no operations wound up during the nine month period ended 30
September 2023.
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 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Directors' remuneration and fees 455 262 1,070 758
Directors' bonus ((1)) 159 - 322 357
Share option-based benefits and other benefits to directors 29 63 97 190
Key management personnel fees 244 144 602 426
Key management bonus ((1)) 112 - 221 239
Share option-based and other benefits to key management personnel 29 61 97 184
1,028 530 2,409 2,154
((1) ) These amounts related to the performance bonus for 2022
approved by the Board of Directors of the Company during YTD 2023. 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.
22.2 Share-based benefits
On 23 May 2023, the Company announced that in accordance with the Company's
Long Term Incentive Plan 2020 which was approved by shareholders at the Annual
General Meeting on 28 June 2023, it has granted 1,305,000 share options to
Persons Discharging Managerial Responsibilities and other management.
The Options expire on 21 May 2028, five years from the deemed date of grant
(22 May 2023), have an exercise price of 327 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 2023 Three month period ended 30 Sep 2022 Nine month period ended 30 Sep 2023 Nine month period ended 30 Sep 2022
Trafigura- Revenue from contracts 29,382 17,270 63,202 62,078
Freight services - - - -
29,382 17,270 63,202 62,078
Gain / (losses) relating provisional pricing within sales 351 68 3,198 (1,735)
Trafigura - Total revenue from contracts 29,733 17,338 66,400 60,343
ii) Period-end balances with related parties
(Euro 000's) 30 Sep 2023 31 Dec 2022
Receivables from related parties:
Recursos Cuenca Minera S.L. 56 56
Total (Note 12) 56 56
The above balances bear no interest and are repayable on demand.
iii) Period-end balances with shareholders
(Euro 000's) 30 Sep 2023 31 Dec 2022
Trafigura - Debtor balance- subject to provisional pricing 4,451 12,800
Total (Note 12) 4,451 12,800
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 are currently 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
Geopolitical developments are impacting the Global Economy but cannot yet be
predicted in full. The main concern now is the rising prices for energy, fuel
and other raw materials and rising inflation, which may affect household
incomes and business operating costs. The financial effect of the current
crisis on the Global Economy and overall business activities cannot be
estimated with reasonable certainty at this stage.
· On 12 January 2023, the Company was notified that Allianz Global
Investors GmbH, shareholder of the Company, decreased its voting rights from
4.93% to 3.98%.
· On 20 February 2023, Atalaya announced a voluntary delisting of
its ordinary shares from the Toronto Stock Exchange (the "TSX") which was
effective from the closing of trading on 20 March 2023.
· On 23 February 2023, Atalaya announced the results from a new
preliminary economic assessment ("PEA") for the Cerro Colorado, San Dionisio
and San Antonio deposits at its Proyecto Riotinto operation in Spain.
· On 28 March 2023, Atalaya announced that Proyecto Masa Valverde
was granted the Unified Environmental Authorisation (or in Spanish,
Autorización Ambiental Unificada ("AAU")) by the Junta de Andalucía.
· On 23 May 2023, the Company announced that in accordance with the
Company's Long Term Incentive Plan 2020, it was granted 1,305,000 share
options to Persons Discharging Managerial Responsibilities ("PDMRs") and other
employees.
· On 26 June 2023, the Company announced that the Ontario
Securities Commission, as principal regulator, granted Atalaya's request to
cease to be a reporting issuer in the Canadian Jurisdictions.
· On 10 July 2023, a PMDR sold 250,000 ordinary shares.
· Following the approval of Resolution 10 by the Company's
shareholders at its 2023 Annual General Meeting, which took place on 28 June
2023, the 2022 Final Dividend of US$0.0385 per ordinary share was paid on 8
August 2023.
· On 9 August 2023, the Company's Board of Directors elected to
declare a 2023 Interim Dividend of US$0.05 per ordinary share, which is
equivalent to approximately 3.9 pence per share. This dividend was paid on
28 September 2023.
26. Events after the Reporting Period
· On 10 October 2023, Atalaya announced that a PDMR purchased 5,000
ordinary shares.
· On 13 November 2023, Atalaya announced its intention to apply for
the Company's ordinary shares to be admitted to the premium listing segment of
the Official List maintained by the Financial Conduct Authority ("FCA") and to
trading on the London Stock Exchange plc's main market for listed securities.
· On 14 November 2023, Atalaya announced its intention to
re-domicile the Company by transferring its registered office from the
Republic of Cyprus to the Kingdom of Spain.
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