Condensed Interim Consolidated Financial Statements for the three months ended 31 March 2021

13 May, 2021

Atalaya Mining Plc (AIM: ATYM; TSX: AYM), is pleased to announce its unaudited quarterly results for the three months ended 31 March 2021 (“Q1 2021”), together with its unaudited interim financial statements for Q1 2021.

The Company increased EBITDA to €47.4 million (Q1 2020: €9.3 million) and cash flows from operating activities to €36.8 million (Q1 2020: €15.5 million) in Q1 2021 as a result of robust operational performance at Proyecto Riotinto, combined with strong copper prices.

Unrestricted cash as at 31 March 2021 was €63.6 million up from €37.8 million as at 31 December 2020. Atalaya maintains a strong cash position with net cash of €10.6 million as at 31 March 2021 after drawing down facilities to pay Astor.

The Q1 2021 Unaudited Condensed Interim Consolidated Financial Statements are also available under the Company’s profile on SEDAR at www.sedar.com and on Atalaya’s website at www.atalayamining.com.

Financial Highlights for Q1 2021

 

Quarter ended 31 March   Q1 2021 Q1 2020 %
Revenues from operations €k 97,380 61,189 59.1%
Operating costs €k (48,026) (49,191) (2.4%)
EBITDA €k 47,443 9,274 411.6%
Profit for the period €k 33,702 2,931 1,049.8%
Basic earnings per share € cents/share 24.5 2.3 965.2%
   
Cash flows from operating activities €k 36,803 15,485 137.7%
Cash flows used in investing activities €k (63,930) (5,585) (1,044.7%)
Cash flows from financing activities €k 52,948 24,046 120.2%
   
Net cash / (debt) position (1) €k 10,588 (10,977) 196.5%
Working capital surplus €k 61,028 7,878 674.7%
   
Average realised copper price US$/lb 3.62 2.58 40.3%
   
Cu concentrate produced (tonnes) 67,260 60,003 12.1%
Cu production (tonnes) 13,979 13,229 5.7%
Cash costs US$/lb payable 2.04 1.99 2.5%
All-In Sustaining Costs US$/lb payable 2.46 2.21 11.3%
  • Includes borrowings and Deferred Consideration liability
  • Q1 2021 revenues of €97.4 million (Q1 2020: €61.2million). Higher revenues were the result of higher realised copper prices and slightly larger volumes of concentrate sold.
  • Lower Q1 2021 operating costs of €48.0 million (Q1 2020: €49.2 million) due to strong cost control and the one-off nature of several cost items in Q1 2020. These one-off Q1 2020 costs included increased electricity consumption during SAG mill commissioning and increased consumables and maintenance costs required to support the expanded nameplate processing capacity.
  • Q1 2021 EBITDA of €47.4 million (Q1 2020: €9.3 million). The increase in EBITDA was driven by higher revenues and lower operating costs compared with Q1 2020.
  • Q1 2021 profit after tax of €33.7 million or 24.5 cents basic earnings per share (Q1 2020: €2.9 million or 2.3 cents basic earnings per share).
  • Q1 2021 realised average copper prices in Q1 2021 excluding QPs were US$3.84/lb, in line with average spot copper prices during the period of US$3.85/lb.
  • Q1 2021 cash costs of US$2.04/lb payable copper are similar to those reported in Q4 2020 (US$2.03/lb) but slightly higher than Q1 2020 (US$1.99/lb) mainly due to a weaker US Dollar/Euro rate in Q1 2021 which offset the higher operating costs in Q1 2020. All-in Sustaining Costs (“AISC”) during Q1 2021 amounted to US$2.46/lb payable copper compared with US$2.36/lb payable copper during Q4 2020 and US$2.21/lb in Q1 2020. The increase in AISC during Q1 2021 was driven by higher deferred mining costs capitalised during the period. AISC excludes investment in the tailings dam during the period, which amounted to €2.7 million (Q1 2021: €2.0 million).
  • Inventories of concentrate at 31 March 2021 valued at cost amounted to €6.6 million (31 December 2020: €8.6 million).
  • As at 31 March 2021, Atalaya’s working capital was €61.0 million, representing a €78.9 million increase from a €17.9 million deficit as at 31 December 2020. The increase was mainly due to the impact of the €53 million paid to Astor Management, A.G. (“Astor”) in Q1 2021 which was funded by previously established long term unsecured facilities.
  • Atalaya´s robust cash flow from operating activities before changes in working capital amounted to €53.1 million in Q1 2021 (Q1 2020: €10.0 million) or €36.8 million after working capital changes (Q1 2020: €15.5 million). Cash flows used in investing activities were €63.9 million, including €53 million paid to Astor (Q1 2020: €5.6 million) and cash flows generated from financing activities were €52.9 million, including unsecured facilities used to fund the payment to Astor (Q1 2020: €24.1 million).

 

Operating Highlights

Proyecto Riotinto

  • Higher key production metrics during Q1 2021 when compared with Q1 2020:
  • Q1 2021 copper production of 13,979 tonnes, an increase of 5.7% compared with 13,229 tonnes produced during Q1 2020.
  • Ore processed during Q1 2021 was 4,005,790 tonnes, an increase of 16.9% on Q1 2020 when ore processed amounted to 3,427,148 tonnes.
  • Q1 2021 copper recovery of 84.90% (Q1 2020: 82.62%).

 

Proyecto Touro

  • As previously announced, on 1 March 2021, Atalaya received formal communication from the local government in Galicia rejecting the plan to develop Proyecto Touro, based on a negative environmental impact statement. This was the official communication of the information reported by the Company in January 2020.
  • Despite the negative environmental impact statement, the Company continues to be confident that its approach to Proyecto Touro following international best practices, which includes fully plastic lined tailings with zero discharge, will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to development of the project.

 

Proyecto Masa Valverde

  • Masa Valverde is one of the largest undeveloped volcanogenic massive sulphide deposits in the prolific Iberian Pyrite Belt and is located 28km south west of Proyecto Riotinto. Exploration work continues and will continue through 2021 with first drilling ongoing along with geophysical prospecting.
  • Initial works for permitting have been carried out and Atalaya has filed for the environmental permits which are expected during 2022.

 

Outlook 2021

  • Production guidance for FY2021 remains unchanged at between 52,000 and 54,000 tonnes of copper.
  • Cash costs and AISC expectations remain unchanged between US$2.25/lb to US$2.35/lb and US$2.50/lb to US$2.65/lb, respectively.

 

COVID update

  • Management continues to monitor the impact of COVID-19 on the operations and the ongoing cost structure and will update the market with any changes in expectations.

 

Legal overview

  • On 15 March 2021, the Company approved the early payment of the deferred consideration totalling €53 million (the “Deferred Consideration”) to Astor Management, A.G. (“Astor”) and consequently, Atalaya has removed the timing uncertainty from its balance sheet.
  • The payment was funded by unsecured credit lines from four major Spanish banks having a three-year tenure and an average annual interest rate of approximately 2.00%.
  • The payment of the Deferred Consideration does not end the ongoing litigation as the issue as to whether any residual interest may or may not be payable remains unresolved.
  • On 2 March 2020, the Company filed an application in the High Court to seek clarity on the definition of “Excess Cash”. The Company has now filed its statement of case to set out its formal position and the hearing for the trial will be heard on 21 February 2022.
  • Astor applied for the Court to determine at an early stage that particular aspects of the excess cash calculation can be resolved without the need for a full trial. A summary judgement will be heard on 14 June 2021 when Astor will have to demonstrate that Atalaya has no reasonable prospect of success at trial.

 

Corporate developments

The Company continues exploring opportunities to increase shareholder value:

  • Solar power project. Given its location in an area with a natural abundance of sunlight, on 24 September 2020, the Company announced the start of the permitting process to develop a 50MW solar plant at Proyecto Riotinto for self-consumption. The solar plant project, in addition to making a significant contribution to reducing carbon emissions, is economically viable and could potentially contribute to reducing operating costs. Permitting continues and the Company expects to complete this part of the process during 2021.
  • E-LIX System. On 28 October 2020, Atalaya announced it had commenced a feasibility study to evaluate production of copper cathodes at Proyecto Riotinto using the newly developed E-LIX System developed by Lain Technologies, Ltd. It also entered into a Licence Agreement with Lain Technologies, Ltd. to use its patents on an exclusive basis, under certain conditions, within the Iberian pyrite belt in Spain and Portugal. The feasibility study will help Atalaya to understand the economic viability of a new industrial scale plant to produce cathodes from complex sulphide ores prevalent in the Iberian Pyrite Belt through the application of a new leaching process, followed by conventional SX-EW. The production of cathodes has the potential to generate cost savings by reducing charges associated with concentrate transportation, treatment and refining as well as penalties with certain elements, while also reducing carbon emissions.

 

Alberto Lavandeira, CEO commented:

Our strong operating performance and the increased copper prices have led to significant period on period financial growth, positioning Atalaya well for the rest of the year. The excellent operational performance means that the annualised production rate for the quarter is towards the upper end of the 2021 production guidance range. Additionally, we are continually looking to deliver additional value for shareholders, through initiatives designed to decrease our carbon footprint, reduce costs and achieve superior returns, while also protecting the safety of our employees. We are pleased with the strong financial results achieved in Q1 and look forward to the rest of the year, with confidence.

 

This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Contacts:

Newgate Communications Elisabeth Cowell / Adam Lloyd / Tom Carnegie + 44 20 3757 6880
4C Communications Carina Corbett +44 20 3170 7973
Canaccord Genuity (NOMAD and Joint Broker) Henry Fitzgerald-O’Connor / 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

 

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. 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. For further information, visit www.atalayamining.com