Q3 2021 Financial Results

18 November, 2021

Atalaya Mining Plc (AIM: ATYM; TSX: AYM), is pleased to announce its quarterly and nine-month results for the period ended 30 September 2021 (“Q3 2021” and “YTD 2021” respectively), together with its unaudited interim condensed consolidated financial statements for the year to date.

The Unaudited Interim Condensed Consolidated Financial Statements for the three and nine months ended 30 September 2021 are also available under the Company´s profile on SEDAR at www.sedar.com and on Atalaya`s website at www.atalayamining.com.

YTD Financial Highlights

  • EBITDA increased to €148.2 million in YTD 2021 (YTD 2020: €44.4 million) and cash flows from operating activities increased to €129.2 million for YTD 2021 (YTD 2020: €41.8 million) as a result of robust operational performance at Proyecto Riotinto and strong copper prices.
  • Following the increased 2021 production guidance as announced on 13 October 2021, the Company is also updating its 2021 cost guidance, with cash costs now expected to be in the range of US$2.15/lb – US$2.25/lb and AISC now expected to be at the low end of the previous guidance range of US$2.50/lb – US$2.65/lb.
  • Total cash as at 30 September 2021 was €140.9 million (including restricted cash of €15.4 million), up from €37.8 million as at 31 December 2020. Atalaya maintains a strong balance sheet with net cash of €88.9 million as at 30 September 2021.
  • On 27 October 2021, the Board of Directors declared an Inaugural Dividend of US$0.395 per ordinary share, equivalent to £294 per share or €0.345 per share.

 

 

Quarter ended 30 September

   

Q3 2021

 

Q3 2020

  Nine months ended

30 Sep 2021

Nine months ended

30 Sep 2020

Revenues from operations €k 107,161 65,836   304,265 183,569
Operating costs €k (58,362) (43,571)   (156,054) (139,196)
EBITDA €k 48,799 22,265   148,211 44,373
Profit after tax for the period €k 38,206 12,237   104,199 18,203
Basics earnings per share € cents/share 27.5 9.0   75.9 13.7
Dividend per share $/share 0.395   0.395
     
Cash flows from operating activities €k 58,213 18,820   129,212 41,820
Cash flows used in investing activities €k (6,982) (6,338)   (77,835) (19,669)
Cash flows used in financing activities €k (3,131) (15,085)   51,710 (454)
     
Net cash / (debt) position (1) €k 88,854 (23,226)   88,854 (23,226)
Working capital surplus €k 126,891 25,002   126,891 25,002
     
Average realised copper price $/lb 4.31 2.72   4.08 2.60
     
Cu concentrate produced (tonnes) 64,262 66,091   206,018 187,032
Cu production (tonnes) 13,893 14,695   42,225 41,559
Cash costs $/lb payable 2.19 1.94   2.16 1.93
All-In Sustaining Cost $/lb payable 2.48 2.20   2.49 2.17
  • Includes restricted cash and bank borrowings at 30 September 2021 and includes Deferred Consideration at 30 September 2020.

 

Q3 Financial Highlights

  • Revenues for Q3 2021 increased to €107.2 million compared with €65.8 million for the three months ended 30 September 2020 (“Q3 2020”). Higher revenues were the result of increased realised copper prices and slightly larger volumes of concentrate sold.
  • Operating costs during Q3 2021 were €58.4 million compared with €43.6 million in Q3 2020. This increase mainly reflects the higher volumes of waste mined at greater unit costs at Proyecto Riotinto.
  • Despite the increase in operating costs, EBITDA for Q3 2021 increased to €48.8 million compared with €22.3 million in Q3 2020 driven by the larger volume of concentrate sold and higher copper prices.
  • Cash costs for Q3 2021 were $2.19/lb of payable copper, higher than in Q3 2020 ($1.94/lb). This increase is mainly the result of higher volumes of waste mined plus higher freight rates.
  • All-in Sustaining Costs (“AISC”) during Q3 2021 amounted to $2.48/lb of payable copper, higher than Q3 2020 at $2.20/lb. The increase in AISC was mainly driven by the same impacts as those for cash costs. Reported AISC excludes one-off investments in the tailings dam, which amounted to €2.8 million for the quarter (Q3 2020: €2.5 million).
  • Inventories of concentrate as at 30 September 2021 amounted to €3.6 million (€6.7 million at 31 December 2020).
  • Working capital surplus as at 30 September 2021 of €126.9 million, representing a €144.8 million increase from a €17.9 million deficit as at 31 December 2020. The increase was mainly due to the cash generated from concentrate sold in the period supported by higher copper prices, as well as the use of long term borrowings to finance the payment of the deferred consideration which was classified as short term as at 31 December 2020.
  • Total cash balances at 30 September 2021 comprised unrestricted cash balances of €125.4 million and restricted cash balances of €15.4 million. Total cash balances at 31 December 2020 of €37.8 million were wholly unrestricted.
  • Net cash flow from operating activities was €58.2 million for Q3 2021 compared with €18.8 million during Q3 2020. Cash flows from operating activities were €129.2 million for YTD 2021 compared with €41.8 million for the same period in 2020.
  • Net cash flow used for investing activities amounted to outflows of €7.0 million and €77.8 million for Q3 2021 and YTD 2021, respectively, compared with outflows of €6.3 million and €19.7 million for the same periods in the prior year. Cash outflows for YTD 2021 mostly relate to the €53 million paid to Astor in Q1 2021, sustaining capex and investments in the tailings dam.
  • Net cash flow from financing activities amounted to an outflow of €3.1 million and an inflow of €51.7 million for Q3 2021 and YTD 2021 respectively, compared with outflows of €15.1 million and €0.5 million, respectively, for the same periods in the previous year. The cash generated from financing activities of €51.7 million for YTD 2021 included unsecured facilities to fund the payment to Astor in Q1 2021.

 

Dividend

  • An inaugural dividend of approximately $0.395 per share was declared on 27 October 2021. The Inaugural Dividend is for the nine months ended 30 September 2021.
  • The Company’s Board of Directors also approved a future dividend policy which will take effect in financial year 2022 and make an annual pay-out of between 30% and 50% of free cash flow generated during the applicable financial year.

 

Q3 Operational Highlights

Proyecto Riotinto

  • Copper production during Q3 2021 was 13,893 tonnes, a modest decrease from Q3 2020 due to planned maintenance stoppages. Copper production for YTD 2021 was 42,225 tonnes compared with 41,559 tonnes during YTD 2020.
  • Ore processed during Q3 2021 was 3.9 million tonnes, in line with Q3 2020 when ore processed amounted to 4.0 million tonnes. Total ore processed during YTD 2021 amounted to 12.0 million tonnes (YTD 2020: 11.0 million tonnes).
  • During Q3 2021, some cost reduction initiatives were implemented including an expert system to control the SAG mill operation that resulted in lower energy consumption as well as an associated reduction of CO2 emissions.
  • Permitting of a 50 MW solar plant for self-consumption has advanced significantly and final permits are expected in the coming weeks, with construction to start immediately after. The selection of construction contractor for the solar plant is ongoing.
  • Flotation improvements are being investigated with the use of new reagents focused on increased recoveries.

 

Proyecto Touro

  • All of the documents and reports required for the environmental evaluation of the new project design for Touro have been reviewed and prepared for filing. The new project design includes initiatives to eliminate the water over the thickened tailings that will be stored in a plastic lined basin with zero water discharge. Initiatives to treat the water runoff from the historic mine will be implemented with the new project.
  • The Company continues to be confident that its approach to Proyecto Touro is in line with international best practice and has been engaging in recent months with local and regional stakeholders prior to the public consultation period that will commence once the Environmental Impact Evaluation starts for the new project.

 

Proyecto Masa Valverde

  • As announced on 6 October 2021, exploration work continues at Proyecto Masa Valverde, which includes the Masa Valverde polymetallic deposit, the Majadales discovery and the unexplored Campanario-Descamisada area.
  • Following positive drilling results, including high grade intercepts within broad intervals of massive and stockwork type polymetallic sulphide mineralisation at both Masa Valverde and Majadales, the Company has decided to expand its drilling campaign beyond the 8,000 metres originally planned. Updates on the drilling results will be disclosed to the market in due course and as appropriate.
  • These drilling results will be incorporated into the NI 43-101 compliant report for Proyecto Masa Valverde that is currently being prepared by CSA Global and expected by early Q1 2022.

 

Proyecto Riotinto Este

  • Investigation permits were granted during 2021 and the Company now has access to two of the three investigation permits at Riotinto Este: Cerro Negro and Los Herreros. The third investigation permit, Peñas Blancas, continues to progress and is expected to be granted in the coming months.
  • An electromagnetic airborne geophysical survey has started. The survey will cover the investigation permits area located immediately east of Proyecto Riotinto and along the same structural and stratigraphic setting.

 

 E-LIX Update

  • The E-LIX pilot plant continues to operate and gather data as planned, demonstrating the potential range of applications for this technology, which enables the processing of copper and zinc concentrates to produce cathodes on site.
  • The feasibility study for the construction of an industrial plant has shown initial results that are encouraging and a process of iterative optimization review is ongoing.
  • The Company is currently evaluating development options with the inventor and owner of the ELIX System, LAIN Technologies, with the aim of constructing a phased industrial plant.

 

Reserves and Resources Updates at Proyecto Riotinto

  • Following an independent reserve estimate which confirmed a long mine life at the Cerro Colorado open pit, studies have advanced focusing on the addition of new resources contained in satellite deposits at Proyecto Riotinto.
  • Work is ongoing on the preparation of a NI 43-101 compliant technical report for the Cerro Colorado, San Dionisio and San Antonio deposits. A large portion of the resources at San Dionisio are potentially mineable by open pit and further polymetallic mineralization could be exploited using underground mining methods at both the San Dionisio and San Antonio deposits.

 

Outlook 2021

  • As a result of the strong performance at Proyecto Riotinto year-to-date, the Company increased its 2021 copper production guidance to 54,000 – 56,000 tonnes, as previously announced on 13 October 2021.
  • The Company is also providing updated cost guidance for 2021. Cash costs are now expected to be in the range of US$2.15/lb – US$2.25/lb (from US$2.25/lb – US$2.35/lb previously) and AISC is now expected to be at the low end of the previous guidance range of US$2.50/lb – US$2.65/lb.

 

COVID-19 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.

 

Alberto Lavandeira, CEO commented:

I am pleased to report another strong quarter and year-to-date for Atalaya Mining. Robust operational performance, combined with strong copper prices, has seen our EBITDA for the first nine months of 2021 more than triple from the amount generated during the same period of 2020. We have also greatly strengthened our balance sheet, with net cash of €89 million at the end of Q3 2021.

This continued strong performance, underpinned by our solid balance sheet, makes us confident we will achieve our increased 2021 copper production guidance of between 54,000 – 56,000 tonnes.

The announcement of our inaugural dividend in October also expresses the confidence the Board has for Atalaya’s future and allows us to reward our loyal shareholders for their continued support while at the same time growing the Company.

Investor Presentation Reminder

Alberto Lavandeira and César Sánchez (CFO) will be holding a live presentation regarding the Q3 2021 results via the Investor Meet Company platform at 11:00 GMT today.  To register please visit the following link and click on “Add to Meet” Atalaya:

https://www.investormeetcompany.com/atalaya-mining-plc/register-investor

Investors who already follow Atalaya on the Investor Meet Company platform will automatically be invited.

 

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:

SEC Newgate UK Elisabeth Cowell / 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. 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 centralised 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. For further information, visit www.atalayamining.com