First Quarter 2020 Operations Update

15 April, 2020

Atalaya Mining Plc (AIM: ATYM; TSX: AYM) is pleased to announce its operations update for the first quarter of 2020 (“Q1 2020”).

Operating Highlights

Q1 Q4 Full year
2020 2019 2019 2020 Guidance
Ore mined (M tonnes) 3.0 2.5 2.3 15.0
Waste mined (M tonnes) 5.1 3.8 6.0 22.7
Ore milled (M tonnes) 3.4 2.4 2.9 14.0 – 15.0
Cu grade (%) 0.47 0.46 0.56 0.45
Cu recovery (%) 82.62 90.27 83.58 84 – 86
Cu production (tonnes) 13,229 10,219 13,527 55,000 – 58,000

 

• Q1 2020 copper production was 13,229 tonnes, representing a 29% increase over Q1 2019.

» 4 million tonnes of ore processed with an average copper head grade of 0.47% and a recovery rate of 82.62%.

» Compared with Q1 2019, throughput increased 40% while recoveries decreased 8%.

• Compared with Q4 2019, copper production was similar as a result of a 17% higher throughput offsetting the lower grade and recoveries.

• Lower than planned plant recoveries were owing to a combination of treating lower grade surface stockpiles as a result of partial flooding of the pit floor during December 2019, several plant stoppages for scheduled maintenance and the COVID-19 shutdown order.

• During February 2020 major scheduled maintenance was undertaken, during which time the plant was not running. These upgrades led to a new production record being achieved in March 2020 with 5,375 tonnes of copper produced from the processing of 1.35 million tonnes of ore with a recovery of 84.6%.

» March 2020 figures confirmed that the 15Mtpa expansion is now successfully working at full design just a few months after the start-up in November 2019.

• Heavy rains in December 2019 meant mining operations concentrated on ore from the higher levels of the pit. The new equipment mobilised to site by the contractor has successfully been adapted to the increased volumes as a result of the plant expansion. On a combined basis, ore, waste and marginal ore amounted to 2.9 million m3 in Q1 2020 versus 3.0 million m3 in Q4 2019.

• On-site concentrate inventories at the end of the quarter were approximately 3,036 tonnes.

• Copper prices decreased, with an average realised price per pound of copper payable, including the QPs closed in the period, of US$2.58/lb compared with US$2.65/lb in Q4 2019. The average copper spot price during the quarter was US$2.56/lb. The realised price during the quarter, excluding QPs, was approximately US$2.54/lb.

• Cash operating costs for Q1 2020 are expected to be higher than the annual cost guidance ranges previously provided of US$1.95-2.05/lb owing to higher processing rates at lower grade and recoveries. Further details on costs will be provided with the Q1 Financial Statements which will be published in May 2020.

• As announced on 30 March 2020, the Royal Decree issued by the Spanish Government resulted in the Company stopping operations at Proyecto Riotinto for four full days until clarification was provided on 3 April 2020 and operations restarted. Proyecto Riotinto continues operating with specific requirements and recommendations to prevent the COVID-19 exposure and the spread of the virus.

• Atalaya’s key priority continues to be to protect its workforce and the local communities surrounding both Proyecto Riotinto and Proyecto Touro.

Exploration Highlights

• Exploration at Proyecto Riotinto concentrated on the massive sulphides and stockwork mineralisation under the Atalaya pit as well as potential resource increases at the Cerro Colorado pit.

• In early March 2020, as a result of the sharp copper price decrease, non-essential drilling activities were put on hold

2020 Outlook

• As previously stated, guidance for copper production in 2020 is estimated to be in the range of 55,000 to 58,000 tonnes.

• The COVID-19 pandemic may still further impact how the Company manages its 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.

Corporate Update – Proyecto Touro

• On 13 April 2020, the Company was formally notified that the Environment Department of the Xunta de Galicia had issued a negative Impact Declaration (DIA) required to restart the copper production at Proyecto Touro.

• The restart proposal for Proyecto Touro, a former open pit mine, included managing past environmental liabilities and using transfer mining techniques with zero water discharge. Flotation tailings were to be stored in a plastic-lined impoundment built with compacted rock walls using techniques similar to those used in water dam construction.

• The Company, together with its advisers, is assessing its options to progress Proyecto Touro. These may include several types of appeal or modified project proposals to address the concerns of the Xunta de Galicia.

Alberto Lavandeira, CEO commented:

“During the first quarter of 2020 our operations at the Riotinto mine continued the successful ramp-up of the newly expanded plant to achieve design capacity. While conscious of the potential impact COVID-19 could have to our current operations, we maintain our production guidance and continue to monitor both volatility in the copper price and the Company’s cash costs structure.

“Early in the quarter the unprecedented COVID-19 crisis was professionally handled by the site teams in coordination with the Regional Authorities. A short production interruption was stipulated by the Spanish government but to date there have been no known cases of COVID-19 amongst employees of the Company or its contractors. We continuously follow the evolution of the situation and regard the safety and health of our employees and the communities in which we operate as the highest priority.”

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 / Michael Rechsteiner / Neil Elliot +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