TIDMATYM
RNS Number : 8547P
Atalaya Mining PLC
12 October 2023
12 October 2023
Atalaya Mining Plc.
("Atalaya" or "the Company")
Q3 2023 Operations Update
On track to achieve full year production within original
guidance range
Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce
its operations update for the third quarter of 2023 ("Q3 2023" or
the "Period").
Proyecto Riotinto Operating Highlights
Q3 Q2 Full Year
2023(1) 2022 2023 2023 Guidance
-------------------------- -------- ------- -------------------
Ore mined M tonnes 3.8 3.8 3.9 15(2)
---------- -------- ------- ------- -------------------
Waste mined M tonnes 9.7 5.8 8.6 30(2)
---------- -------- ------- ------- -------------------
Ore milled M tonnes 3.9 3.9 4.1 15.3 - 15.8
---------- -------- ------- ------- -------------------
0.39 - 0.41
Cu grade % 0.38 0.41 0.40 (2)
---------- -------- ------- ------- -------------------
Cu recovery % 87.01 84.62 87.18 86 - 87 (2)
---------- -------- ------- ------- -------------------
Cu production tonnes 12,541 13,453 14,212 53,000 - 54,000(2)
---------- -------- ------- ------- -------------------
(1) Figures for Q3 2023 are preliminary and final figures will
be released with Q3 2023 financial results.
(2) Represents updated guidance.
Mining
Ore mined was 3.8 million tonnes in Q3 2023 (Q3 2022: 3.8
million tonnes), compared with 3.9 million tonnes in Q2 2023.
Waste mined was 9.7 million tonnes in Q3 2023 (Q3 2022: 5.8
million tonnes), compared with 8.6 million tonnes in Q2 2023. Waste
mining during the Period was consistent with budget and includes
increased waste stripping at Cerro Colorado in anticipation of the
start of mining activities at San Dionisio in late 2023.
Processing
The plant processed ore of 3.9 million tonnes during Q3 2023 (Q3
2022: 3.9 million tonnes), compared with 4.1 million tonnes in Q2
2023.
Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%), compared
with 0.40% in Q2 2023.
Copper recoveries in Q3 2023 were 87.01 % (Q3 2022: 84.62%),
compared with 87.18% in Q2 2023, as a result of favourable ore
characteristics during the Period.
Production
Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453
tonnes), compared with 14,212 tonnes in Q2 2023. Lower grades
during the Period were partially offset by recoveries that were
higher than budget.
On-site copper concentrate inventories at 30 September 2023 were
approximately 7,358 tonnes (30 June 2023: 7,291 tonnes). All
concentrate in stock at the beginning of the Period was delivered
to the port at Huelva.
Copper contained in concentrates sold was 12,521 tonnes in Q3
2023 (Q3 2022: 14,040 tonnes), compared with 12,858 tonnes in Q2
2023.
Select Financial Highlights
Realised Copper Price
The average realised copper price (excluding QPs closed during
the Period) was $3.77/lb in Q3 2023 (Q3 2022: $3.52/lb), compared
with $3.81/lb in Q2 2023. The average spot copper price was
$3.80/lb in Q3 2023.
Provisional Revenue Adjustments
For Q3 2023, settlement adjustments (for QPs closed during the
Period) and fair value adjustments (for open QPs based on copper
forward curve prices as at 30 September 2023) were negative EUR0.9
million.
Balance Sheet
The Company's balance sheet remains strong with consolidated
cash and cash equivalents of EUR119.0 million as at 30 September
2023.
Net of current and non-current borrowings of EUR52.3 million,
net cash was EUR66.7 million as at 30 September 2023, compared with
EUR53.1 million as at 31 December 2022.
Electricity Prices
Estimated Realised Prices
Market electricity prices in Q3 2023 increased slightly from Q2
2023, in part due to the impact of strikes at LNG export facilities
in Australia on European natural gas prices, but remained
significantly below 2022 levels. After including the contribution
from the Company's 10-year power purchase agreement ("PPA"),
realised electricity prices in Q3 2023 were approximately 60% lower
than the Company's average realised electricity price in 2022.
Renewable Energy Projects
Construction of the 50 MW solar plant at Riotinto continues to
advance, with start-up expected in late 2023 or early 2024. When
fully operational, the facility is expected to provide
approximately 22% of Riotinto's current electricity needs.
Together, the 50 MW solar plant and long-term PPA will provide over
50% of the Company's current electricity requirements at a rate
well below historical prices in Spain.
The Company continues to assess the potential installation of
wind turbines at Riotinto, which could supply additional low cost
and carbon-free electricity and contribute to the Company's
decarbonisation objectives.
2023 Guidance
The Company remains on track to achieve full year production
within its original guidance, with the 2023 range now narrowed to
53,000 to 54,000 tonnes (from 53,000 to 55,000 tonnes). Operating
costs are trending in line with expectations and the Company will
provide further update in its Q3 2023 financial results.
Aggregate expenditures relating to non-sustaining capital
investments (such as E-LIX Phase I, the 50 MW solar plant, Riotinto
tailings facility expansion) and exploration activities continue to
trend in line with FY2023 guidance, although the composition is
expected to vary including higher investments in the E-LIX Phase I
plant.
Asset Portfolio Update
Proyecto Riotinto
In April 2023, the Company was granted a substantial
modification to the existing Unified Environmental Authorisation
(or in Spanish, Autorización Ambiental Unificada ("AAU")) for
Proyecto Riotinto by the Junta de Andalucía. The AAU allows for the
expansion of tailings capacity and the mine footprint at Riotinto
and represents an important step towards developing regional
deposits such as San Dionisio and San Antonio.
The Company is continuing with permitting activities associated
with San Dionisio, which represents a key component of the
integrated mine plan that was outlined in the recent Riotinto
PEA.
E-LIX Phase I Plant
Construction activities continue at the E-LIX Phase I plant,
with commissioning expected during Q4 2023.
Once operational, the E-LIX plant is expected to produce high
purity copper or zinc metals on site, allowing the Company to
potentially achieve higher metal recoveries from complex
polymetallic ores, lower transportation and concentrate treatment
charges and a reduced carbon footprint.
Riotinto District - Proyecto Masa Valverde ("PMV")
In March 2023, the Company announced that PMV was granted an AAU
by the Junta de Andalucía, following an application process that
was initiated by the Company in December 2021. The AAU is an
integrated process that combines the Environmental Impact
Assessment and other authorisations and specifies requirements to
avoid, prevent and minimise a project's impacts on the environment
and the cultural heritage of the area. Various optimisation
workstreams continue.
Three core rigs are active and focused on step out drilling at
the Mojarra Trend, drill testing coincident fix loop
electromagnetic ("FLEM") and airborne gravity gradiometry ("AGG")
anomalies and completing metallurgical and infill drilling at the
Masa Valverde deposit. The first phase of resource definition
drilling at the Campanario Trend was completed during the
Period.
Proyecto Touro
Atalaya remains fully committed to the development of the Touro
copper project, which has the potential to provide substantial
benefits to Galicia and also support the European Union's critical
raw materials mandate.
The Xunta de Galicia has legislation that seeks to promote
industry in Galicia by simplifying the approval process. Business
initiatives can be classified as priority business initiatives
("IEP") and strategic industrial projects ("Proyecto Industrial
Estratégico" or "PIE") which provide a variety of development
advantages. The Company believes that Touro fulfils the
requirements to be granted the status of a PIE in Galicia.
Touro has the potential to become a new source of copper
production for Europe. As such, the project could also be granted
"Strategic Project" status by the EU, which can be awarded to
projects "based on their contribution to the security of supply of
strategic raw materials, their technical feasibility,
sustainability and social standards", as part of the Critical Raw
Materials Act. Copper was recently added to the list of "Strategic
Raw Materials" owing to its importance for strategic sectors and
technologies and due to the supply-demand imbalance that is
expected in the near future.
Running parallel with the ongoing Touro permitting process, the
Company continues to focus on numerous initiatives related to the
social licence, including engaging with the many stakeholders in
the region to provide detailed information on the new improved
project design. Positive and favourable feedback from numerous
meetings with municipalities, farmers and fishermen associations
and other industries indicate meaningful support towards the
development of a new and modern mining project.
The Company continues to successfully restore the water quality
of the rivers around Touro and is operating its water treatment
plant, which is addressing the legacy issues associated with acid
water runoff from the historical mine, which closed in 1987. The
field work carried out by Atalaya has resulted in an immediate and
visible improvement of the water systems surrounding the project,
with the progress being recognised by local stakeholders and the
media.
Atalaya continues to be confident that its approach to Touro,
which includes fully plastic lined thickened tailings with zero
discharge, is consistent with international best practice and will
satisfy the most stringent environmental conditions that may be
imposed by the authorities prior to the development of the
project.
Proyecto Ossa Morena
Drilling continued to progress with one rig at the
Guijarro-Chaparral gold-copper project and the La Hinchona
copper-gold project, both in the central part of the district. One
rig is being mobilised to the flagship Alconchel-Pallares
copper-gold project.
Proyecto Riotinto East
Drill testing of selected coincident FLEM and AGG anomalies is
in progress with one rig.
Alberto Lavandeira, CEO, commented:
"We are pleased to be on track to achieve production within our
original guidance range, thanks to steady operational performance
during the quarter.
Our two key capital projects - the E-LIX Phase I plant and the
50 MW solar plant - continue to progress and there is significant
activity on site. We look forward to delivering these projects in
the coming months, which are expected to unlock value, reduce costs
and lower our carbon footprint.
Regarding the outlook for copper, we continue to be confident in
its strong fundamentals. Even with economic uncertainties, the
demand for copper is growing thanks to massive new investments in
infrastructure and the energy transition. On the supply side, we
have seen very few new large projects approved in recent years,
therefore the expectation remains that a substantial deficit is
unavoidable."
Contacts:
Elisabeth Cowell / Tom
SEC Newgate UK Carnegie / Matthew Elliott + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
------------------------------- ------------------
Canaccord Genuity Henry Fitzgerald-O'Connor
(NOMAD and Joint /
Broker) James Asensio +44 20 7523 8000
------------------------------- ------------------
BMO Capital Markets
(Joint Broker) Tom Rider / Andrew Cameron +44 20 7236 1010
------------------------------- ------------------
Peel Hunt LLP
(Joint Broker) Ross Allister / David McKeown +44 20 7418 8900
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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
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