Corporate Governance

QCA Corporate Governance Code

In the light of the requirement to apply a recognised corporate governance code, the Board has undertaken a review of both the provisions of the UKCG Code and the QCA Corporate Governance Code (the "QCA Code") to assess which corporate governance code is appropriate for the Company to apply at this stage in its development. The Board has concluded that it would be appropriate for it to apply and report against the QCA Code, which has been designed for small to mid-sized companies and which has been adopted by many AIM listed companies.

The Board will assess its compliance with the QCA Code on an annual basis and publish the status of compliance in its annual report and accounts. As part of the annual review, the Board will consider whether it continues to remain appropriate to apply the QCA Code.

The following table summarises the QCA principles and Atalaya Mining´s response. For principles 1, 4, 5 and 6 of the QCA Code, refer to the disclosure in Atalaya Mining Plc Annual Report.

2. Seek to understand and meet shareholder needs and expectations

Application

Directors must develop a good understanding of the needs and expectations of all elements of the Company’s shareholder base.

The Board must manage shareholder expectations and should seek to understand the motivations behind their voting decisions.

Atalaya Mining’s response

The Company has established channels to understand and meet the needs and expectations of its shareholders, and to ensure that they are informed of Management’s future decisions.

The Company actively engages and communicates with its shareholders. It predominantly does this through Investor Relations, Public Relations advisors, Brokers, depositary and transfer agents.

As required by AIM Rule 26, the Company’s website includes contact details to ensure that it maintains open channels of communications and feedback.

The Company encourages this type of interaction and posts presentations when the interim and final results are published, as well as periodically throughout the year.  All significant changes are communicated through the Company’s website and Corporate Presentations, available on the website.

Any significant concerns raised by a shareholder in relation to the Company and its affairs are communicated to the Board.  The Company has an email address (Info@atalayamining.com) which is read by the Company’s Officers, Internal PR and Company’s Secretary.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

Application

Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The Board works to identify the Company’s stakeholders and their needs, interests and expectations.Where matters have the potential to affect the Company’s ability to deliver shareholders value over the medium to long-term, in relation to the Company’s impact on society, the communities within which it operates or the environment, then those matters must be integrated into the Company’s strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

Atalaya Mining’s response

> The business model of Atalaya Mining is founded upon creating value through operational and development excellence. It spans the full mining value chain and is based upon:

> The importance of people. The Company operates departments for the safety, health, environment and security of its employees and people of the region.

> Operational yield. Operating departments focus on improving the performance of the process, maximising production capacity and managing costs.

The pursuit of growth for all stakeholders. Finance and corporate departments focus on creating value for shareholders, creating growth opportunities and generating free cash flow.

The Company obtains feedback from stakeholders and incorporates improvements which are requested by shareholders and approved internally.

As a result of the feedback received, the Company has implemented several actions, including posting Annual Reports and Circulars to shareholders and information relevant to the Annual General Meeting ("AGM").

7. Evaluating Board performance based on clear and relevant objectives, seeking continuous improvement

Application

The Board should regularly review its efficacy, as well as that of its committees and the individual directors.

The Board performance review may be carried out internally or ideally, externally from time to time. The review should identify developmental or mentoring needs of individual directors and / or the wider senior Management team.

It is healthy for membership of the Board to be periodically refreshed. Succession planning is a vital task for Boards. No member of the Board should become indispensable.

Atalaya Mining’s response

The Board considers the evaluation of its own and senior executive performance as fundamental to establishing a culture of transparency and accountability. With the assistance of the Corporate Governance, Nomination and Compensation Committee, the Board periodically considers how directors maintain the skill and knowledge necessary to meet their obligations, including through continuing education programmes. The performance of the Board, each of its committees and each of the Directors is also evaluated.

A performance evaluation and review is to be conducted at least once a year.

Annual review for Atalaya Mining’s charters and policies

Officers of the Company will review the Charters and Policies of the Company and propose changes to the Board of Directors every third quarter.  The updated versions will be shared by email, with all main changes proposed to be presented in a Board meeting, followed by a formal approval of all documents.

Annual performance review for Atalaya Mining’s committees

Each of Atalaya Mining’s Committees Chairs requests a performance review at least once a year.  The performance review includes discussion on the following matters to determine:

(i) if the committee is properly fulfilling its responsibilities

(ii) if the Board is kept properly updated on matters within the committee;

(iii) if the committee strikes the right balance between supporting and overseeing the Management team and not overstepping into executive territory;

(iv) if there are specific areas to be covered by the committee over the next 12 months.

Annual performance review for Atalaya Mining’s Management

The Board, with the assistance of the Corporate Governance Nominating Compensation Committee manages and periodically reviews succession plans for the Chairman of the Board, the CEO and senior Management of the Company.

The review is based on a number of goals established by the Board. The goals are based on corporate requirements and any areas for improvement identified in previous reviews.

The Chairman provides the CEO with confidential feedback on his or her performance and the rest of the Officers.  This feedback is used to create a development plan for Management.

8. Promote a corporate culture that is based on ethical values and behaviours

Application

The Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.

The policy set by the Board should be visible in the actions and decisions of the CEO and the rest of the Management team. Corporate values should guide the objectives and strategy of the Company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the Company.

The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the Company.

Atalaya Mining’s response

The staff of the Company are committed to implementing this Code of Business Conduct and Ethics (the “Code of Conduct”).  It is up to each individual to comply with the Code of Conduct and he or she will be accountable for such compliance.

Where a staff member is concerned that there has been a violation of this Code of Conduct, it can be reported in good faith in accordance with the Company’s Whistleblower Policy.  While records of such reports will be kept by the Company for the purposes of the investigation, the reports may be made anonymously.  No one making such a report will be subject to any form of reprimand.

The CEO will  acknowledges in writing that all staff have read and understood the Code of Conduct and agrees to abide by it at the time of engagement and certify annually thereafter, before the end of the first fiscal quarter of each year, that they have complied with it.

The CEO will provide written confirmation to the Board of Directors and the Corporate Governance, Nominating and Compensation Committee that such certifications have been obtained, and summarising the results thereof.

The disciplinary measures that may be imposed for violations of this Code of Conduct and other policies and procedures of the Company or applicable laws, rules and regulations include, but are not limited to, counselling, verbal or written reprimands, warnings, suspension without pay, demotion, reduction in salary, termination of employment or restitution and may lead to civil or criminal actions against the staff member or any other party involved.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Application

The Company should maintain governance structures and processes in line with its corporate culture and appropriate to its:

> size and complexity; and

> capacity, appetite and tolerance for risk.

The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the Company.

Atalaya Mining’s response

The Board has a duty to supervise the Management of the business and affairs of the Company. The Board, directly and through its Chairman provides direction to senior Management.

The Board has the ultimate responsibility for the successful operations of the Company.  The Board must ensure that Management has appropriate processes in place for strategic planning and risk assessment, Management and internal controls, and it must monitor performance against pre-defined benchmarks. The Board must also ensure that the Company complies with all contractual, statutory and other legal obligations, including the requirements of any regulatory body.

The roles and responsibilities of key persons such as the Chairman, CEO, CFO and the Company Secretary are described below:

The Chairman is considered the "lead" director and utilises his / her experience, skills and leadership abilities to facilitate the governance processes. The Chairman is selected based on relevant experience, skill and leadership abilities as recognised by the Board. Some of his / her main duties are to:

> Ensure that the decisions of the Board are implemented properly.

> Ensure that the Board behaves in accordance with the Company's Code of Conduct.

The CEO is responsible for the attainment of the Company's goals and vision for the future, in accordance with the strategies, policies, programmes and performance requirements approved by the Board.  He / she reports directly to the Board.

The CEO's primary objective is to ensure the ongoing success of the Company through being responsible for all aspects of the Management and development of the Company.  Some of his / her duties are:

> Develop with the Board, implement and monitor the short, medium, and long-term strategic and financial plans for the Company.

> Assess business opportunities of potential benefit to the Company.

The CFO is responsible for the financial performance of the Company and his / her responsibilities include:

> Exercising diligence, skill and good faith in the preparation of financial information and ensure that such information is accurate, timely and represents a true and fair view of the financial performance and condition of the Company and complies with all relevant legislative requirements;

> Maintaining transparency in the preparation and delivery of financial information to both internal and external users.

The Company Secretary is charged with facilitating the Company's corporate governance processes and holds primary responsibility for ensuring that the Board processes and procedures run efficiently and effectively.  The Company Secretary is accountable to the Board, through the Chairman, on all governance matters and reports directly to the Chairman as the representative of the Board.

The roles of the committees are described as the following:

Audit and Financial Risk Committee (“AFRC”). The purpose of the AFRC is to oversee all material aspects of the Company’s financial reporting, control and audit functions. The AFRC has been formed by the Board of Atalaya Mining to act on behalf of the Board in overseeing all material aspects of the Company’s financial reporting, control and audit functions. The AFRC shall report a summary of the findings of each AFRC meeting to the Board. The Minutes are to be tabled at the Board meeting which immediately follows the AFRC meeting along with any recommendations of the AFRC. In summary, the AFRC is responsible for assisting the Board in overseeing the independence of the external auditors and fulfilling the Boards’ statutory and fiduciary responsibilities relating to: financial reporting, reviewing and assessing the Company’s business and financial risk Management process, including the adequacy of the overall internal control environment and controls in selected areas representing significant risk, and external audit.

Corporate Governance Nominating Compensation Committee (“CGNCC”). The purpose of the CGNCC is to determine and agree with the Board the framework or broad policy for the remuneration of the Company’s chairperson and the executive directors as well as the composition of the Board itself. The primary function of the Committee is to assist the Board in: determining the compensation of the Directors of Atalaya Mining; reviewing the compensation and performance of the CEO; approving the compensation of the other officers of Atalaya Mining as recommended by the CEO; approving the Company’s compensation policy as regards base, short-term and long-term incentivisation; identifying potential candidates to become members of the Board; evaluating the performance of the Board, Committees of the Board and individual directors; and fulfilling the Board´s statutory and fiduciary responsibilities with respect to  corporate governance and integrity.

Physical Risk Committee (“PRC”). The PRC is responsible for reviewing the compliance with regulatory and industry standards for environmental performance and occupational health and safety of personnel and the communities affected by the Company. The PRC has been formed by the Board of Atalaya Mining to act on behalf of the Board in overseeing all aspects of the Company’s risks with regards to: safety, health, environment and security matters; enterprise-wide physical risk Management; and compliance with legal and regulatory obligations relating to safety, health, and environment.

10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Application

A healthy dialogue should exist between the Board and all its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the Company. Appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base. This will assist:

> the communication of shareholders’ views to the Board; and

> the shareholders’ understanding of the unique circumstances and constraints faced by the Company.

It should be clear where these communication practices are described (annual report or website).

Atalaya Mining’s response

Results of every AGM are publicly disclosed via RNS and available on the Company’s website.

Historic annual reports and notices of all AGMs for the last five years may also be found on the website.

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