Positive Drilling Results from the Campanario Trend

5 July, 2022

Shallow polymetallic mineralisation including massive and semi-massive sulphides intersected as part of four-rig drilling campaign at Proyecto Masa Valverde

Atalaya Mining Plc (AIM: ATYM, TSX: AYM) is pleased to announce the results of the first 22 exploration drill holes completed to date on the Campanario Trend, one of several mineralised zones comprising Proyecto Masa Valverde (“PMV”). PMV is located in southern Spain approximately 28 km to the south of Atalaya’s 15 Mtpa mill at Proyecto Riotinto (see Figure 1 in the Website Announcement).

Highlights

  • Initial drilling results confirm PMV’s continued exploration potential and the possibility to quickly define a shallow mineral resource
  • Shallow polymetallic mineralisation includes:
    • CA15: 35.20m at 0.70% Cu, 1.53% Zn, 1.39% Pb and 62.50 g/t Ag (1.71% CuEq) from 77.80m from surface
    • CA21: 18.10m at 1.19% Cu, 0.08% Zn, 0.32% Pb and 36.66 g/t Ag (1.40% CuEq) from 43.20m from surface
  • Drilling to date has focused around the historical Campanario workings, which only represents approximately 10% of the entire strike length of the mineralised structure
  • Intersected mineralisation includes massive and semi-massive sulphides as well as stockwork-type material, consistent with the Masa Valverde and Majadales deposits
  • Initial drilling results demonstrate the significant exploration potential of Atalaya’s strategic land package in the world-class Iberian Pyrite Belt

 Alberto Lavandeira, CEO, commented:

“We are pleased with these initial drilling results from the Campanario Trend which confirm the expectations we had on the exploration potential of PMV. We continue working on defining the potential shallow mineral resource in the short term which to date has only been drill tested in approximately 10% of the entire mineralised structure. In addition, we have several coincident geochemical and geophysical targets pending for drill testing indicating that we are still far from knowing the ultimate exploration potential of PMV.

We believe that these initial results will not only have a positive impact on future development scenarios and project economics, but they also highlight the significant exploration potential of the Iberian Pyrite Belt.”

About Proyecto Masa Valverde              

PMV consists of several volcanogenic massive sulphide (“VMS”) type deposits including Masa Valverde, Majadales, the Campanario Trend and other drill ready targets. Atalaya’s exploration team discovered the Majadales deposit and in 2020 acquired a 100% interest in PMV.  The project is strategically located approximately 28 km from Proyecto Riotinto, therefore future development scenarios are expected to utilise the Company’s existing 15 Mtpa processing plant.

In April 2022, Atalaya announced a new independent resource estimate for PMV that was prepared in accordance with CIM guidelines and disclosure requirements of NI 43-101, including:

  • Masa Valverde Indicated Mineral Resource of 16.9 Mt at 0.66% Cu, 1.55% Zn, 0.65% Pb, 27 g/t Ag and 0.55 g/t Au (1.51% CuEq)
  • Masa Valverde Inferred Mineral Resource of 73.4 Mt at 0.61% Cu, 1.24% Zn, 0.61% Pb, 30 g/t Ag and 0.62 g/t Au (1.37% CuEq)
  • Majadales Inferred Mineral Resource of 3.1 Mt at 0.94% Cu, 3.08% Zn, 1.43% Pb, 54 g/t Ag and 0.32 g/t Au (2.55% CuEq)

Atalaya expects to complete a PEA for PMV by the end of the year.

Four rigs are currently operating at PMV, as part of the Company’s €10 million exploration programme for 2022. Two rigs are devoted to the Campanario Trend and the rest are drill testing the Fix Loop Electromagnetic (“FLEM”) anomalies west of the Masa Valverde deposit. So far, three holes were completed at two of the FLEM anomalies. The results of that programme will be released in a future announcement.

About the Campanario Trend

The Campanario Trend is a five kilometre north-west trending mineralised corridor, located one kilometre north of the Masa Valverde and Majadales VMS deposits. Campanario is characterised by the presence of numerous small historical workings and coincident soil geochemical and geophysical anomalies (see Figure 2 in the Website Announcement).

Historical mining activity (from 1876 – 1917) along the Campanario Trend was at a small scale and focused on narrow zones of massive sulphides. Near-surface oxidation of the massive sulphides, mainly pyrite, generated gossans which were also investigated for gold potential.

Total historical mine production is estimated to be 0.22 million tonnes at 1.5% Cu from six main mining areas situated from the east to the west: Cruz Infante, Cibeles, Campanario, California, Descamisada and Descamisada Oeste. Drilling to date by Atalaya has focused around the historical Campanario workings which, by size, are the most important along the Campanario Trend.

Notably, immediately to the west of the historical Descamisada Oeste mine, the FLEM geophysical survey delineated a significant conductor (Loop 14 in Figure 2 in the Website Announcement) which is interpreted to be the potential west extension of the main mineralised corridor. To the east of the historical Campanario workings and coincident with the Cruz Infantes and old Cibeles mines, a previous VTEM (“Versatile Time Domain Electromagnetic”) survey delineated a zone of elevated conductivity which could be related with the presence of massive sulphides at depth.

Despite the numerous historical workings, the semi-continuous outcropping mineralisation and the proximity to the large Masa Valverde deposit, the Campanario Trend remained under-explored for many years.  The last drilling campaign was carried out in 1995 by the Spanish state-owned company Adaro.

Campanario Trend Initial Drilling Results

Atalaya has completed 22 drill holes at the Campanario Trend with assay results produced by the certified laboratory at Proyecto Riotinto. In addition, assays including gold were produced by an independent external laboratory (ALS) up to hole CA-13.

Drilling was focused around the historical Campanario workings, located in the central part of the five kilometre long Campanario Trend (see drill hole map in Figure 3 in the Website Announcement). Assay results received to date included intersections that are the best so far in terms of “grade x thickness” factor.

Local stratigraphy consists of black shales with varying graphite content, coherent acid rocks of rhyodacitic composition and, to a lesser extent, volcanic tuffs. Mineralised zones are mainly hosted in the black shale levels which are intensely folded and sheared and often show zones of sericitic, chloritic and silicic alteration.

Except near surface where it is oxidised (gossans), the main mineralisation styles are massive and semi-massive sulphides and stockwork-type. Pyrite is the predominant sulphide mineral with subordinate chalcopyrite, sphalerite, galena and sulphosalts. Mineralisation is polymetallic with elevated As, Sb, Hg and Bi values, therefore Atalaya believes the E-LIX System has strong potential to unlock value from any future mined material from the Campanario Trend.

The geometry of the mineralised zones varies down dip from steeply dipping to moderately dipping to the north-north-east and may include several parallel lenses of massive and semi-massive sulphides, with individual true thicknesses varying from 1-2 metres up to 20-25 metres.  Two representative cross sections are included in Figure 4 in the Website Announcement.

The mineralised system remains completely open laterally but seems to get thinner at depth in some sections. Pinch and swell geometry is evident, quite likely due to syn/late deformation.

Table 1: Selected Campanario Drill Holes

Hole ID From
(m)
To
(m)
Interval
(m)
Cu
(%)
Zn
(%)
Pb
(%)
Ag
(g/t)
Au1
(g/t)
CuEq2
(%)
CA15 77.80 113.00 35.20 0.70 1.53 1.39 62.50 n/a 1.71
Including 92.00 102.10 10.10 1.27 3.32 1.87 77.17 n/a 3.08
CA16 88.00 116.00 28.00 0.45 0.14 0.25 22.61 n/a 0.62
Including 88.00 99.30 11.30 0.97 0.08 0.27 41.03 n/a 1.19
Inc. 90.80 93.30 2.50 2.21 0.13 0.61 72.31 n/a 2.61
CA21 43.20 61.30 18.10 1.19 0.08 0.32 36.66 n/a 1.40
Including 43.20 48.00 4.80 3.85 0.16 0.86 95.34 n/a 4.38
1 Assays are from the certified laboratory at Proyecto Riotinto, which does not assay for gold, therefore gold is not included in the CuEq calculation.
2 Metal prices and recoveries used for CuEq calculation are: $9,600/t Cu and 80%; $3,500/t Zn and 80%; $2,300/t Pb and 60%; $23/oz Ag and 35%.

The full set of results from the 22 holes is shown below in Table 2.

Next Steps

Drilling at PMV will continue testing the shallow lateral extensions of mineralisation found to date at the Campanario Trend as well as drill testing the FLEM geophysical anomalies west of the Masa Valverde deposit.

Mineralogical and petrographic studies are already in progress as well as sampling for initial metallurgical testwork.

Data gathering during the current drilling programme at Campanario will form the basis of the new geological model which will support an initial mineral resource estimation.

Qualified Person Statement

Alberto Lavandeira has reviewed the technical information contained within this announcement in his capacity as a Qualified Person, as required under the AIM Rules for Companies. Alberto Lavandeira is the Chief Executive Officer for the Company and is a member of good standing with the Association of Mining Engineers of Spain, with over 41 years’ experience.