REG - Atalaya Mining PLC - Results of New PEA for Riotinto
23/02/2023 07:00
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RNS Number : 7680Q Atalaya Mining PLC 23 February 2023
Atalaya Mining Plc
1 Lampousas Street
1095 Nicosia, Cyprus
Tel: +357 22442705
Fax: +357 22442708
www.atalayamining.com
23 February 2023
Atalaya Mining Plc.
("Atalaya" or "the Company")
Results of New Preliminary Economic Assessment for Riotinto
Demonstrates the potential for strong economics and production growth
Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce the results
from a new preliminary economic assessment ("PEA") for the Cerro Colorado, San
Dionisio and San Antonio deposits at its Proyecto Riotinto ("Riotinto")
operation in Spain.
Riotinto is Atalaya's flagship asset and currently consists of the operating
Cerro Colorado open pit mine, a modern 15 Mtpa processing plant and
significant supporting infrastructure. The San Dionisio and San Antonio
deposits are located adjacent to the Cerro Colorado pit and the objective of
the PEA was to incorporate these deposits into a new integrated mine plan for
Riotinto.
PEA Highlights
· Strong potential economic results over a range of metals price
assumptions
‒ $1.07 billion NPV(8%) after-tax at $3.50/lb Cu, $1.20/lb Zn and
$0.95/lb Pb ("Base Case" metals prices)
‒ $1.57 billion NPV(8%) after-tax at $4.03/lb Cu, $1.20/lb Zn and
$0.95/lb Pb ("Sensitivity Case" metals prices)
‒ Economics benefit from significant in-place infrastructure at
Riotinto
· Potential uplift in production as a result of processing higher
grade material
‒ ~60 ktpa Cu during copper stockwork-only phase (2023-2026)
‒ ~90 ktpa CuEq during polymetallic massive sulphide phase (2027+)
· Potential reduction in cash costs due to higher grades and
by-product credits
‒ $2.00/lb Cu payable Cash Costs (LOM average)
‒ $2.03/lb Cu payable Cash Costs + Sustaining (LOM average)
· Mineralised material of ~241 Mt supports a potential mine life of
15.6 years
‒ Provides significant long-term optionality to rising metals
prices
The PEA is preliminary in nature, and includes Inferred Mineral Resources that
are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorised as
Mineral Reserves, and there is no certainty that the PEA will be realised.
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
Optimisation Opportunities and Other Riotinto District Highlights
· PEA serves as a foundation for continued optimisation
‒ E-LIX System has the potential to unlock additional value by
increasing recoveries, reducing offsite costs and lowering the carbon
footprint
‒ Revised mining sequence could bring forward highest value
material
‒ Unused processing equipment at Riotinto could be refurbished,
potentially lowering capital costs associated with the Zn and Pb circuits
· Results reinforce the strategic nature of Atalaya's assets in the
Riotinto District
‒ Uniquely positioned to deliver low capital intensity growth due to
Atalaya's large resource base and significant infrastructure in the region
‒ High quality mining jurisdiction, with access to the critical inputs
required for modern and sustainable operations, including experienced labour
and renewable sources of electricity and water
‒ Atalaya's other projects in the Riotinto District, such as Masa
Valverde, could become further sources of mineralised material
PEA Summary
Table 1: Key Data
Unit CuSW((1)) PolyMS((1)) Total
Material Mined
Tonnage kt 195,890 45,601 241,491
Copper Grade % 0.42 0.98 0.53
Zinc Grade % 1.69
Lead Grade % 0.45
Mine Life Years 15.6
Unit 2023-2026 2027-2036 LOM
Total Production((2))
Copper kt 1,004
Zinc kt 575
Lead kt 76
Copper Equivalent((3)) kt 1,221
Average Annual Production((2))
Copper kt 59 69
Zinc kt - 57
Lead kt - 8
Copper Equivalent((3)) kt 59 91
Cash Costs Net of Zn & Pb Credits((4))
Cash Costs $/lb Cu payable 2.56 1.77 2.00
Cash Costs + Sustaining Capex((5)) $/lb Cu payable 2.60 1.81 2.03
Base Case Financial Summary
$3.50 Cu, $1.20 Zn and $0.95 Pb
EBITDA $m 464 2,522 3,176
Capital Expenditures $m (186) (341) (566)
Cash Flow After Tax $m 201 1,844 2,152
NPV after-tax (10%) $m 915
NPV after-tax (8%) $m 1,069
Sensitivity Case Financial Summary((6))
$4.03 Cu, $1.20 Zn and $0.95 Pb
EBITDA $m 724 3,289 4,288
Capital Expenditures $m (186) (341) (566)
Cash Flow After Tax $m 413 2,473 3,064
NPV after-tax (10%) $m 1,360
NPV after-tax (8%) $m 1,573
((1) ) CuSW = copper stockwork (Cerro Colorado and San Dionisio
copper); PolyMS = polymetallic massive sulphide.
((2) ) Recovered metal in concentrate.
((3) ) Copper Equivalent ("CuEq") production is calculated from
results presented in the PEA and based on $3.50/lb Cu, $1.20/lb Zn and
$0.95/lb Pb. CuEq = Cu + (Zn x 1.20 / 3.50) + (Pb x 0.95 / 3.50).
((4) ) Based on $1.20/lb Zn and $0.95/lb Pb.
((5) ) Excludes head office costs typically included in AISC
figures.
((6) ) See Table 9 for Downside Case financial summary.
Table 2: NPV After-Tax ($m) Sensitivity to Copper Price ($/lb) and Discount
Rate((1))
2.80 2.98 3.15 3.33 3.50 3.68 3.85 4.03 4.20
0% 928 1,240 1,545 1,848 2,152 2,456 2,760 3,064 3,368
5% 539 750 957 1,163 1,369 1,575 1,781 1,987 2,193
8% 392 564 733 901 1,069 1,237 1,405 1,573 1,741
10% 318 470 619 767 915 1,064 1,212 1,360 1,508
12% 258 393 526 658 790 922 1,053 1,185 1,317
((1) ) Assumes $1.20/lb Zn and $0.95/lb Pb.
Alberto Lavandeira, CEO, commented:
"We are pleased to announce the outcome of the PEA, which demonstrates strong
economics and confirms the results of prior internal studies on the future of
our flagship Riotinto operation.
After delivering a major expansion of processing capacity at Riotinto in
recent years and announcing new mineral resource estimates for San Dionisio
and San Antonio in 2022, we set out to quantify the significant value of an
integrated Riotinto approach.
The Riotinto District has many advantages over more remote mining regions
around the world, where the ability to bring assets into production in a
sustainable and economic manner is becoming increasingly difficult. Our region
has a long mining history, the workforce is highly experienced, infrastructure
is modern and we benefit from good access to sustainable sources of water and
energy. Together, these advantages reduce execution risk, capital intensity
and development timelines.
As we progress the permitting process for San Dionisio, we shall continue to
evaluate ways to further optimise the development plan for Riotinto. This is
an exciting time for Atalaya, and we look forward to leveraging our execution
capabilities to grow our copper production and deliver further value for our
shareholders."
Background
Riotinto District Portfolio
Atalaya controls a strategic portfolio of assets in the Riotinto District of
the Iberian Pyrite Belt, including:
· Operating Cerro Colorado open pit mine
· 15 Mtpa processing plant and supporting infrastructure
· San Dionisio and San Antonio deposits, which were mined
historically
· Proyecto Masa Valverde ("PMV")
· Exploration permits, including at Proyecto Riotinto East ("PRE")
The Company's focus is to develop its existing facilities into a centralised
processing hub for ore sourced from its various projects in the region.
Mineral Resource Estimates and PEA Objectives
Atalaya announced new independent mineral resource estimates for the San
Dionisio and San Antonio deposits in April 2022. These estimates confirmed
prior internal estimation work on the deposits and quantified their
significant contained metal as well as their higher grades compared to the
material currently being mined at Cerro Colorado.
The objective of the PEA was to develop a new integrated mine plan based on
existing Riotinto mineral resources that considers concurrent mining of Cerro
Colorado, San Dionisio and San Antonio and the processing of polymetallic
massive sulphide ("PolyMS") material in addition to the copper stockwork
("CuSW") material currently being processed. Other operations in the Iberian
Pyrite Belt, including MATSA and mines in Portugal, currently process similar
PolyMS material. The production plan includes Inferred Mineral Resources,
which are too speculative in nature to be classified as Mineral Reserves.
Regional Advantages
Atalaya is well positioned to execute on its "central processing hub" growth
strategy due to several factors:
· Experience gained from operating the large Cerro Colorado open
pit mine and Riotinto processing plant since 2016
· The 15 Mtpa processing plant at Riotinto is the largest mill in
the region
· Riotinto's existing tailings storage facility has significant
capacity, with land available for future expansion
· The Company has access to multiple sources of water via nearby
reservoirs
· Riotinto is connected to the national power grid, where the share
of electricity from renewable sources continues to grow
· Highly experienced workforce lives in close proximity to
Atalaya's operations
· The long history of mining in the region has developed a strong
network of suppliers and service providers, including open pit and underground
mining contractors with vast experience at similar deposits
Combined, these attributes are expected to allow Atalaya to continue to
increase the scale of its operations while avoiding many of the
well-publicised challenges that miners are facing in other minerals districts.
PEA Independent Consultant
Tetra Tech was retained by Atalaya to develop a PEA of the Cerro Colorado, San
Dionisio, and San Antonio deposits at Riotinto. Tetra Tech prepared its report
(the "Technical Report") in accordance with the Canadian National Instrument
43-101 Standards of Disclosure for Mineral Projects (NI 43-101) guidelines.
The PEA is preliminary in nature and includes Inferred Mineral Resources that
are too speculative in nature to be classified as Mineral Reserves. There is
no certainty that the economic results presented in this PEA will be realized.
Mineral Resources are not Mineral Reserves and therefore do not have
demonstrated economic viability.
The Technical Report has an effective date of 31 October 2022 and incorporates
project information developed by Atalaya and its consultants. The Technical
Report will be made available on the Company's website at
www.atalayamining.com (http://www.atalayamining.com) and under the Company's
corporate profile on SEDAR at www.sedar.com (http://www.sedar.com) . For
readers to fully understand the information in this announcement, they should
read the Technical Report in its entirety, including all qualifications,
assumptions and exclusions that relate to the PEA. The Technical Report is
intended to be read as a whole, and sections should not be read or relied upon
out of context.
Mining
A production plan for Riotinto was developed based on the existing mineral
resources for Cerro Colorado, San Dionisio and San Antonio.
Mining at Cerro Colorado is currently conducted by a contractor using
conventional open pit mining methods and produces CuSW material. The PEA
contemplates continued open pit mining at Cerro Colorado, but at a reduced
annual rate to provide capacity for material mined from the San Dionisio and
San Antonio deposits.
At San Dionisio, mining will begin using the same open pit methods, equipment
and contractors as Cerro Colorado. The conceptual open pit design includes two
phases, with Phase 1 containing primarily CuSW mineralised material and Phase
2 containing a majority of PolyMS mineralised material. During Phase 1, PolyMS
material is assumed to be stockpiled until the necessary plant modifications
are implemented.
Photo 1: Riotinto Site Layout Looking East
Underground mining at San Dionisio and San Antonio is planned to be completed
using the blasthole stoping method to produce PolyMS mineralised material.
Underground mining activities have been carried out historically at both
deposits. Development requirements include dewatering and rehabilitation of
old shafts and drifts as well as the development of any required new
underground openings.
The concurrent open pit and underground mining of Cerro Colorado, San Dionisio
and San Antonio is planned to produce an aggregate of 15.5 Mtpa of CuSW and
PolyMS mineralised material.
Chart 1: Mining Schedule by Mineralised Material Source (Mt)
Table 3: Summary of Mining Inventory
Unit LOM
CuSW Tonnage kt 195,890
Copper Grade % 0.42
PolyMS Tonnage: Open Pit kt 27,046
PolyMS Tonnage: Underground kt 18,555
PolyMS Tonnage: Total kt 45,601
Copper Grade % 0.98
Zinc Grade % 1.69
Lead Grade % 0.45
Total Tonnage kt 241,491
Copper Grade % 0.53
Total Waste kt 555,638
Strip Ratio: Cerro Colorado & San Dionisio w:o 2.5
Mine Life Years 15.6
Processing
The existing plant at Riotinto has a nameplate capacity of 15 Mtpa and
currently processes CuSW sulphide material using conventional froth flotation
to produce a copper concentrate.
Photo 2: Existing 15 Mtpa Plant at Riotinto
In order to process the PolyMS material associated with the San Antonio
deposit and portions of the San Dionisio deposit, a modified recovery circuit
is required. Preliminary testwork indicates that ultra-fine grinding followed
by differential flotation may be required to achieve acceptable metal
recoveries and produce three separate saleable concentrates - copper, zinc and
lead. The PEA assumes the installation of a differential flotation circuit,
however, additional processing options are being studied that may achieve
higher metallurgical recoveries.
The PEA contemplates that mineralised material from Cerro Colorado will be
blended with higher grade CuSW material from San Dionisio beginning in
mid-2024. Starting in 2027, a portion of the plant feed will include PolyMS
material sourced from San Dionisio and San Antonio, further increasing the
blended head grade.
Chart 2: Processing Schedule by Mineralised Material Type and Grade
Production
At present, Riotinto produces a copper concentrate with silver by-product
credits, which it sells at commercial terms to its offtake partners. As
contemplated in the PEA, Riotinto would continue to produce a single copper
concentrate in the initial years when only CuSW material is processed.
Beginning in 2027 and the start of PolyMS material processing, three separate
copper, zinc and lead concentrates would be produced and sold internationally.
As a result of the higher copper grades and by-product credits from the PolyMS
material at San Dionisio and San Antonio, the future blended head grade is
expected to provide an increase in production at Riotinto, which produced 56
kt Cu in 2021 and 52 kt Cu in 2022.
The PEA assumes that all mineralised material mined from Cerro Colorado is
immediately processed, therefore no stockpiling of lower grade mineralised
material is contemplated. In certain recent periods, however, stockpiling has
been implemented in order to prioritise higher grade material for processing.
In addition, the effective date of the PEA is 31 October 2022, which was
before the publication of the Company's production guidance for 2023. As a
result, the production profile shown in Chart 3 below should not be
interpreted as formal production guidance for the near term.
Chart 3: Production Profile((1)(2))
((1) ) Recovered metal in concentrate.
((2) ) d CuEq production is calculated from results presented in
the PEA and based on $3.50/lb Cu, $1.20/lb Zn and $0.95/lb Pb. CuEq = Cu +
(Zn x 1.20 / 3.50) + (Pb x 0.95 / 3.50).
Table 4: Summary of Production
Unit 2023-2026 2027-2036 LOM
Total Production((1))
Copper kt 1,004
Zinc kt 575
Lead kt 76
Copper Equivalent((2)) kt 1,221
Average Annual Production((1))
Copper kt 59 69
Zinc kt - 57
Lead kt - 8
Copper Equivalent((2)) kt 59 91
((1) ) Recovered metal in concentrate.
((2) ) Copper Equivalent production is calculated from results
presented in the PEA and based on $3.50/lb Cu, $1.20/lb Zn and $0.95/lb Pb.
CuEq = Cu + (Zn x 1.20 / 3.50) + (Pb x 0.95 / 3.50).
Capital Costs
Capital expenditures included in the PEA relate to mine development costs for
San Dionisio (pre-strip to access CuSW material, followed by underground
development) and San Antonio (underground development), modification of the
processing plant to include new zinc and lead circuits, as well as sustaining
capital, tailings dam expansion and closure costs. Mine equipment is not
included in capital costs as all equipment will be provided by the mining
contractor.
Table 5: Capital Cost Summary
Unit 2023-2026 2027-2036 LOM
By Mineralised Material Type
Related to CuSW Material $m 44 - 44
Related to PolyMS Material $m 98 154 252
Related to Overall Operations $m 20 142 196
Subtotal $m 162 297 492
Contingency of 15% $m 24 44 74
Total $m 186 341 566
By Expenditure Type
Mine Equipment $m - - -
Mine Development $m 68 136 204
Plant Capital $m 74 18 92
Surface Infrastructure $m - 93 93
Sustaining Capital $m 20 49 71
Closure $m - - 32
Subtotal $m 162 297 492
Contingency of 15% $m 24 44 74
Total $m 186 341 566
Operating Costs
Operating cost estimates are based principally on actuals from the existing
operations at Riotinto. Open pit mining costs continue to assume the
contractor mining model, including when mining begins at San Dionisio.
Processing costs for CuSW material are also based on actuals.
For the planned underground mining at San Dionisio and San Antonio, costs are
based on estimated mining contractor rates in the region, where key
neighbouring mines are operated under a similar model. Processing costs for
PolyMS material include additional costs compared to the current copper
circuit.
Table 6: Operating Cost Summary
Unit 2023-2026 2027-2036 LOM
Site Operating Costs
Mining $m 435 1,371 1,875
Processing $m 492 1,275 1,962
G&A $m 71 177 275
Subtotal $m 998 2,822 4,112
Contingency of 5% $m 50 141 206
Total $m 1,048 2,963 4,318
Total Site Operating Costs $/t processed 16.91 19.12 17.88
Cash Costs Net of Zn & Pb Credits((1))
Cash Costs $/lb Cu payable 2.56 1.77 2.00
Cash Costs + Sustaining Capex((2)) $/lb Cu payable 2.60 1.81 2.03
((1) ) Based on $3.50/lb Cu, $1.20/lb Zn and $0.95/lb Pb; assumes
nil Ag production.
((2) ) Excludes head office costs typically included in AISC
figures.
Economic Analysis
The PEA shows strong potential economic results over a range of metals price
assumptions for copper, zinc and lead. Base Case prices represent consensus
long term forecasts published by a wide selection of financial institutions,
while the copper price assumed in the Sensitivity Case is based on the recent
prevailing copper spot price. The PEA is preliminary in nature, and includes
Inferred Mineral Resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be
categorised as mineral reserves, and there is no certainty that the PEA will
be realised. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
Table 7: Economic Summary at Base Case Metals Prices
$3.50/lb Cu, $1.20/lb Zn, $0.95/lb Pb
Unit 2023-2026 2027-2036 LOM
Gross Revenues $m 1,735 6,549 8,855
Offsite Costs $m (223) (1,064) (1,361)
Net Smelter Return $m 1,512 5,486 7,494
Site Operating Costs $m (1,048) (2,963) (4,318)
EBITDA $m 464 2,522 3,176
Change in Working Capital $m (18) (1) (50)
Capital Expenditures $m (186) (341) (566)
Cash Flow Pre-Tax $m 259 2,180 2,561
Income Tax $m (58) (336) (408)
Cash Flow After-Tax $m 201 1,844 2,152
NPV Pre-Tax (10%) $m 1,105
NPV After-Tax (10%) $m 915
NPV Pre-Tax (8%) $m 1,286
NPV After-Tax (8%) $m 1,069
Table 8: Economic Summary at Sensitivity Case Metals Prices
$4.03/lb Cu, $1.20/lb Zn, $0.95/lb Pb
Unit 2023-2026 2027-2036 LOM
Gross Revenues $m 1,995 7,316 9,967
Offsite Costs $m (223) (1,064) (1,361)
Net Smelter Return $m 1,772 6,252 8,606
Site Operating Costs $m (1,048) (2,963) (4,318)
EBITDA $m 724 3,289 4,288
Change in Working Capital $m (20) (1) (50)
Capital Expenditures $m (186) (341) (566)
Cash Flow Pre-Tax $m 518 2,947 3,672
Income Tax $m (105) (474) (609)
Cash Flow After-Tax $m 413 2,473 3,064
NPV Pre-Tax (10%) $m 1,647
NPV After-Tax (10%) $m 1,360
NPV Pre-Tax (8%) $m 1,901
NPV After-Tax (8%) $m 1,573
Table 9: Economic Summary at Downside Case Metals Prices
$2.98/lb Cu, $1.20/lb Zn, $0.95/lb Pb
Unit 2023-2026 2027-2036 LOM
Gross Revenues $m 1,475 5,783 7,744
Offsite Costs $m (223) (1,064) (1,361)
Net Smelter Return $m 1,252 4,719 6,383
Site Operating Costs $m (1,048) (2,963) (4,318)
EBITDA $m 203 1,756 2,065
Change in Working Capital $m (16) (1) (50)
Capital Expenditures $m (186) (341) (566)
Cash Flow Pre-Tax $m 1 1,413 1,449
Income Tax $m (14) (195) (209)
Cash Flow After-Tax $m (13) 1,218 1,240
NPV Pre-Tax (10%) $m 562
NPV After-Tax (10%) $m 470
NPV Pre-Tax (8%) $m 671
NPV After-Tax (8%) $m 564
Table 10: NPV After-Tax ($m) Sensitivity to Copper Price ($/lb) and Discount
Rate((1))
2.80 2.98 3.15 3.33 3.50 3.68 3.85 4.03 4.20
0% 928 1,240 1,545 1,848 2,152 2,456 2,760 3,064 3,368
5% 539 750 957 1,163 1,369 1,575 1,781 1,987 2,193
8% 392 564 733 901 1,069 1,237 1,405 1,573 1,741
10% 318 470 619 767 915 1,064 1,212 1,360 1,508
12% 258 393 526 658 790 922 1,053 1,185 1,317
((1) ) Assumes $1.20/lb Zn and $0.95/lb Pb.
Next Steps
Atalaya continues to advance the permitting process associated with expanding
the Cerro Colorado pit into the San Dionisio area, which will require the
relocation of the public road, power lines and water lines that run between
the two deposits, as well as the fulfilment of other regulatory matters.
Opportunities for Additional Optimisation
Atalaya believes the PEA provides a clear path for the long-term development
of Riotinto. The PEA will now serve as a foundation for continued optimisation
work that will be completed, including during the permitting process for San
Dionisio.
Testwork related to improving the metallurgical recoveries for the PolyMS
material will be an ongoing focus. The E-LIX System has the potential to
unlock value from this complex material, including by increasing recoveries,
reducing offsite costs and also lowering the carbon footprint associated with
downstream transportation and smelting. Further testwork is planned once the
E-LIX Phase I plant is operational. In addition, historical third-party
testwork using conventional flotation, including by Lakefield in 1985-1986,
resulted in higher recoveries than assumed in the PEA, therefore additional
testing will be completed using alternative approaches.
Other areas of potential optimisation include revising the mining sequence of
the various deposits in order to bring forward the highest value material, as
well as potential capital cost savings via the study of refurbishing unused
processing equipment at Riotinto as an alternative to purchasing new equipment
for the new zinc and lead recovery circuits.
Finally, exploration and evaluation work continues at Atalaya's other projects
in the Riotinto District, including PMV and PRE. In particular, deposits at
PMV have the potential to become further sources of mineralised material that
could be processed at Riotinto and integrated into a regional operating model.
Qualified Person Statement
The PEA for Riotinto was prepared by Tetra Tech in accordance with CIM
guidelines and with Canadian regulatory requirements set out in National
Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").
The report was prepared by Tetra Tech Qualified Persons Dr. Guillermo Dante
Ramírez-Rodríguez, PhD, MMSAQP, Jaye Pickarts, MMSA QP, and Ms. Kira Lyn
Johnson, MMSAQP, who are Qualified Persons as defined under NI 43-101 and the
AIM Rules, and are independent of the Company. The Qualified Persons have
reviewed and approved this announcement regarding the results of the PEA in
the form and context it appears.
This announcement contains information which, prior to its publication
constituted inside information for the purposes of Article 7 of Regulation
(EU) No 596/2014.
Glossary of Terms
Ag Silver
CIM Canadian Institute of Mining, Metallurgy and Petroleum
Cu Copper
CuEq Copper Equivalent
g/t Grams per tonne
Indicated Mineral Resources An Indicated Mineral Resource is that part of a Mineral Resource for which
quantity, grade or quality, densities, shape and physical characteristics are
estimated with sufficient confidence to allow the application of Modifying
Factors in sufficient detail to support mine planning and evaluation of the
economic viability of the deposit.
Geological evidence is derived from adequately detailed and reliable
exploration, sampling and testing and is sufficient to assume geological and
grade or quality continuity between points of observation.
An Indicated Mineral Resource has a lower level of confidence than that
applying to a Measured Mineral Resource and may only be converted to a
Probable Mineral Reserve.
Inferred Mineral Resource An Inferred Mineral Resource is that part of a Mineral Resource for which
quantity and grade or quality are estimated on the basis of limited geological
evidence and sampling. Geological evidence is sufficient to imply but not
verify geological and grade or quality continuity.
An Inferred Mineral Resource has a lower level of confidence than that
applying to an Indicated Mineral Resource and must not be converted to a
Mineral Reserve. It is reasonably expected that the majority of Inferred
Mineral Resources could be upgraded to Indicated Mineral Resources with
continued exploration.
kt Thousand tonnes
Massive Sulphide Mineral deposit characterised by a great concentration of ore in one place, as
opposed to a disseminated or veinlike deposit.
Measured Mineral Resources A Measured Mineral Resource is that part of a Mineral Resource for which
quantity, grade or quality, densities, shape, and physical characteristics are
estimated with confidence sufficient to allow the application of Modifying
Factors to support detailed mine planning and final evaluation of the economic
viability of the deposit.
Geological evidence is derived from detailed and reliable exploration,
sampling and testing and is sufficient to confirm geological and grade or
quality continuity between points of observation. A Measured Mineral Resource
has a higher level of confidence than that applying to either an Indicated
Mineral Resource or an Inferred Mineral Resource. It may be converted to a
Proven Mineral Reserve or to a Probable Mineral Reserve.
Mineral Resources A concentration or occurrence of material of intrinsic economic interest in or
on the Earth's crust in such a form and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity, grade,
geological characteristics and continuity of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge.
Mineral Resources are sub-divided, in order of increasing geological
confidence, into Inferred, Indicated and Measured categories.
Mt Million tonnes
Mtpa Million tonnes per annum
n.a. Not available
NI 43-101 Canadian National Instrument for the Standards of Disclosure for Mineral
Projects
Pb Lead
PEA Preliminary Economic Assessment
Polymetallic Deposits that contain economically important quantities of three or more
metals.
PPM Parts per million
Stockwork Mineral deposit consisting of a 3D network of planar to irregular veinlets
closely enough spaced that the whole mass can be mined. They are also referred
to as stringer zones.
VMS Volcanic Massive Sulphide
Zn Zinc
Contacts:
SEC Newgate UK Elisabeth Cowell / Axaule Shukanayeva + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity Henry Fitzgerald-O'Connor / James Asensio +44 20 7523 8000
(NOMAD and Joint Broker)
BMO Capital Markets Tom Rider / Andrew Cameron +44 20 7236 1010
(Joint Broker)
Peel Hunt LLP Ross Allister / David McKeown +44 20 7418 8900
(Joint Broker)
About Atalaya Mining Plc
Atalaya is an AIM and TSX-listed mining and development group which produces
copper concentrates and silver by-product at its wholly owned Proyecto
Riotinto site in southwest Spain. Atalaya's current operations include the
Cerro Colorado open pit mine and a modern 15 Mtpa processing plant, which has
the potential to become a centralised processing hub for ore sourced from its
wholly owned regional projects around Riotinto that include Proyecto Masa
Valverde and Proyecto Riotinto East. In addition, the Group has a phased
earn-in agreement for up to 80% ownership of Proyecto Touro, a brownfield
copper project in the northwest of Spain, as well as a 99.9% interest in
Proyecto Ossa Morena. For further information, visit www.atalayamining.com
(http://www.atalayamining.com)
Forward Looking Statements
This announcement contains certain forward-looking statements and
forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable securities
laws. All statements other than statements of historical fact are
forward-looking statements. Forward-looking statements are often, but not
always, identified by the use of words such as "anticipate", "achieve",
"could", "believe", "plan", "intend", "objective", "continuous", "ongoing",
"estimate", "outlook", "expect", "may", "will", "project", "should" or similar
words, including negatives thereof, suggesting future outcomes. Such
forward-looking statements necessarily involve known and unknown risks and
uncertainties, which may cause the Company's actual performance and financial
results in future periods to differ materially from any projections of future
performance or results expressed or implied by such forward-looking
statements.
Forward looking statements contained herein include, but are not limited to,
statements regarding the PEA and the associated increases or improvements in
production, metallurgical recovery, capital costs, operating costs, project
economics and financial metrics, future permitting activities, all of which
are based on various assumptions including that the new development plan will
proceed on schedule, that the development deposits are mineable as described,
that metals prices will be at levels that render Riotinto economic and that
internal data and analyses prove to be accurate. Forward-looking statements
also include those relating to the future financial and operating performance
of the Company and Riotinto, the estimates and realisation of Mineral
Resources and Mineral Reserves, the timing and amount of estimated future
production, plans relating to future exploration, expansion, development and
production activities and the realisation of expected production and life of
mine economics of Riotinto.
Certain risks, uncertainties and factors that may cause the actual results,
performance or achievements to differ materially from forward-looking
statements include, among others, general business, economic, competitive,
political and social uncertainties; the actual results of current exploration,
production and expansion activities; the actual results of reclamation
activities; conclusions of economic evaluations; changes in project parameters
as plans continue to be refined; future prices of metals; the future costs of
capital to the Company; possible variations of ore grade or recovery rates;
failure of plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; environmental risks;
uncertainties regarding reclamation expenses, title disputes or claims,
limitations of insurance coverage, and the timing and possible outcome of
litigation and regulatory matters; political instability, terrorist attacks,
insurrection or war; and delays in obtaining governmental approvals or
financing or in the completion of development, construction or expansion
activities.
The reader is cautioned that such forward-looking statements are not a
guarantee of future performance and may prove to be incorrect. These
forward-looking statements are statements regarding the Company's intentions,
beliefs or current expectations concerning, among other things, the Company's
and/or its subsidiaries' results of operations, financial condition,
prospects, growth, strategies, the industry in which the Company and its
subsidiaries operate and are based on the opinions and estimates of management
at the date the statements are made and should not be unduly relied on. By
their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future.
These forward-looking statements speak only as of the date of this
announcement and the Company does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof, except as required by applicable
securities laws.
Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash
Costs" and "Cash Costs + Sustaining Capex" 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 treatment and refining charges ("TC/RC"),
freight and distribution costs and all operating costs, excluding finance,
tax, impairment, depreciation and amortisation expenses. See Table 7 for
further details.
Cash Costs per pound of payable copper includes cash operating costs,
including TC/RC, freight and distribution costs and net of by-product credits.
Cash Costs 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.
Cash Costs + Sustaining Capex per pound of payable copper includes C1 Cash
Costs plus recurring sustaining capital expenditures but excludes one-off
sustaining capital projects, such as tailings dam expansion.
Cash Cost Calculation
Unit 2023-2026 2027-2036 LOM
Copper Payable kt 225 662 960
Site Operating Costs
Mining $m 435 1,371 1,875
Processing $m 492 1,275 1,962
G&A $m 71 177 275
Subtotal $m 998 2,822 4,112
Contingency $m 50 141 206
Total $m 1,048 2,963 4,318
Offsite Costs $m 223 1,064 1,361
By-Product Credits $m - (1,438) (1,444)
Total Cash Costs $m 1,271 2,588 4,235
Total Cash Costs $/lb Cu payable 2.56 1.77 2.00
Sustaining Capex $m 20 49 71
Cash Costs + Sustaining Capex $m 1,291 2,637 4,306
Cash Costs + Sustaining Capex $/lb Cu payable 2.60 1.81 2.03
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