Unaudited Interim Condensed Consolidated Financial Statements for the period ended 30 June 2020

13 August, 2020

Atalaya Mining Plc (AIM: ATYM; TSX: AYM), the European mining and development company, is pleased to announce its quarterly results for the period ended 30 June 2020 (“Q2 2020”), together with its unaudited interim condensed consolidated financial statements.

The Unaudited Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2020 (“H1 2020”) 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

Period ended 30 June   Q2 2020 Q2 2019   H1 2020 H1 2019
Revenues from operations €k 56,544 43,070   117,733 94,782
Operating costs €k (43,710) (31,036)   (95,625) (63,238)
EBITDA €k 12,834 12,034   22,108 31,544
Profit for the period €k 3,035 6,849   5,966 21,004
Basic earnings per share € cents/share 2.3 5.1   4.6 15.4
     
Cash flows from operating activities €k 7,515 6,856   23,000 14,970
Cash flows used in investing activities €k (7,746) (15,137)   (13,331) (32,275)
Cash flows (used in)/from financing activities €k (9,415) (268)   14,631 (268)
     
Working capital surplus / (deficit) €k 10,309 (18,391)   10,309 (18,391)
     
Average realised copper price US$/lb 2.51 2.81   2.54 2.80
     
Cu concentrate produced (tonnes) 60,938 48,382   120,941 91,823
Cu production (tonnes) 13,635 10,889   26,864 21,108
Cash costs US$/lb payable 1.87 1.74   1.93 1.81
All-In Sustaining Cost US$/lb payable 2.22 1.95   2.25 2.06

 

– Q2 2020 revenues of €56.5 million (Q2 2019: €43.1 million). H1 2020 revenues of €117.7 million were higher than the same period for the prior year of €94.8 million. Despite lower copper prices, revenues increased as a result of higher concentrate sales volume in the period following the completion of the plant expansion at Proyecto Riotinto.
– Q2 2020 operating costs were €43.7 million (Q2 2019: €31.0 million). H1 2020 operating costs amounted to €95.6 million (H1 2019: €63.2 million) reflecting the higher production volumes and higher cash costs.
– Q2 2020 EBITDA of €12.8 million (Q2 2019: €12.0 million). H1 2020 EBITDA of €22.1 million (H1 2019: €31.5 million). The increase in Q2 EBITDA was driven by an increase in copper concentrates sold in the period offset by lower commodity prices and higher cash costs.
– Q2 2020 profit after tax of €3.0 million or 2.3 cents basic earnings per share (Q2 2019: €6.8 million or 5.1 cents basic earnings per share). Profit after tax for H1 2020 was €6.0 million or 4.6 cents basic earnings per share (H1 2019: €21.0 million or 15.4 cents per share). Lower EBITDA and higher depreciation charges for the expanded plant at Proyecto Riotinto contributed to lower profits during the period.
– Q2 2020 cash costs of US$1.87/lb of payable copper, higher than Q2 2019 cash costs of US$1.74/lb, mainly attributable to increased processing costs during the quarter relating to higher consumption of lime and grinding balls and, to a lesser extent, SAG liners. Nevertheless, Q2 2020 cash costs were lower than Q1 2020 cash cost of US$1.99/lb.
– Q2 2020 AISC was US$2.22/lb of payable copper, higher than US$1.95/lb during Q2 2019. Increase in AISC was driven by additional investments in sustaining capex, stripping costs. AISC in Q2 2020 was lower than Q1 2020 AISC of US$2.27/lb.
– Inventories of concentrate at 30 June 2020 amounted to €2.9 million (€11.0 million at 31 December 2019).
– Working capital surplus as at 30 June 2020 of €10.3 million, increased from €3.6 million reported as at 31 December 2019. Increase in working capital attributable to operating, cash generated, cash from financing activities and partly netted off by investment cash outflows.
– Unrestricted cash balances as at 30 June 2020 amounted to €32.4 million with €14.9 million remaining drawn against the unsecured credit facilities
– Q2 2020 cash flows from operating activities before changes in working capital were €10.7 million (Q2 2019: €11.7 million). H1 2020 cash flows from operating activities before changes in working capital were €21.9 million (H1 2019: €31.9 million).
– Cash flow used for investing activities amounted to €7.7 million and €13.3 million for Q2 2020 and H1 2020 respectively (Q2 2019 and H1 2019: €15.1 million and €32.3 million respectively). The investments relate to sustaining capex and work on tailings dams.
– Q2 2020 cash from financing activities decreased by €9.4 million as credit facilities used to ensure sufficient liquidity during the COVID-19 pandemic were partly repaid. For H1 2020, the cash generated from financing activities was €14.6 million (H1 2019 €0.3 million).

Operational Highlights

Proyecto Riotinto

– Copper production during Q2 2020 was 13,635 tonnes, an increase of 25.2% compared with 10,888 tonnes produced during Q2 2019 due to the plant expansion completed in 2019. Copper production for H1 2020 was 26,864 tonnes compared with 21,108 tonnes during H1 2019.

– Ore processed during Q2 2020 was 3,572,094 tonnes, an increase on Q2 2019 when ore processed amounted to 2,565,559 tonnes. Total ore processed during H1 2020 amounted to 6,999,242 tonnes (H1 2019: 5,011,536 tonnes).

– Copper recovery during the quarter was 85.89%, higher than the 82.62% achieved in Q1 2020. For H1 2020 copper recovery was 84.32%, compared with 89.47% in H1 2019. Plant recoveries increased against Q1 2020 as a result of operational improvements to the fully commissioned plant.

– As reported on 30 March 2020, operations at Proyecto Riotinto halted for five days following the Royal Decree issued by the Spanish Government to establish national protective measures against COVID-19. This affected tonnage processed during April 2020 resulting in ore milled lower than planned during Q2 2020.

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 copper production at Proyecto Touro.

– The Company continues to assess its options which may include several types of appeals or modified project proposals to address the concerns of the Xunta de Galicia.

– The Company is confident that its world class approach to Proyecto Touro, that includes fully plastic lined tailings with zero discharge, will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to the development of the project.

Outlook 2020

– Annual guidance range of US$1.95/lb-US$2.05/lb and US$2.20/lb-US$2.30/lb for cash costs and AISC, respectively, is currently being maintained.

– Production guidance remains at 55k to 58k tonnes of contained copper.

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

COVID-19 Update

– Since the announcement on 6 April 2020, Proyecto Riotinto continues operating with exceptional requirements and recommendations to prevent exposure to COVID-19 and the spread of the virus.

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

– In light of new cases in the north of Spain, the Company has reinforced its measures to protect against the pandemic and any adverse development will be notified accordingly.

Legal updates

– On 7 May 2020, the Company announced the Junta de Andalucía had issued a favourable resolution (the “Resolution”) which validates the Unified Environmental Authorisation (the “AAU”) of Proyecto Riotinto. In addition, on 1 June 2020, the Company announced the Junta de Andalucía validated the Mining Permits. The Resolutions end the legal process announced by the Company on 26 September 2018 in relation to the judgement made by the Tribunal Superior de Justicia de Andalucía (“TSJA”) in connection with the AAU and the Mining Permits.

 

Alberto Lavandeira, CEO commented:

“Despite the challenges of COVID-19, our Proyecto Riotinto site continues to perform well, with copper production and ore milled both increasing over the quarter and half year and our production and cash costs on track to meet our full year guidance. The work the Atalaya team has carried out during this time gives me immense pride as our key priority continues to be protecting our workforce and the local communities surrounding both Proyecto Riotinto and Proyecto Touro. Looking ahead, the completion of the Proyecto Riotinto expansion in 2019 means that Atalaya is well positioned to continue benefitting from higher copper concentrate sales and the improved commodity price environment.”

 

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