Unaudited Interim Condensed Consolidated Financial Statements for the period ended 30 June 2021

11 August, 2021

Atalaya Mining Plc (AIM: ATYM; TSX: AYM), the European mining and development company, is pleased to announce its quarterly and six-monthly results for the period ended 30 June 2021 (“Q2 2021” and “H1 2021” respectively) together with its unaudited interim condensed consolidated financial statements.

The Company increased EBITDA to €99.4 million in H1 2021 (H1 2020: €22.1 million) and cash flows from operating activities to €71.0 million (H1 2020: €23.0 million) as a result of robust operational performance at Proyecto Riotinto, combined with strong copper prices.

Total cash as at 30 June 2021 was €92.8 million up from €37.8 million as at 31 December 2020. Atalaya maintains a strong balance sheet with net cash of €37.8 million as at 30 June 2021 after drawing down facilities to pay Astor during Q1 2021.

The Unaudited Interim Condensed Consolidated Financial Statements for H1 2021 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 2021 Q2 2020 H1 2021 H1 2020
Revenues from operations €k 99,724 56,544 197,104 117,733
Operating costs €k (47,755) (43,710) (97,692) (95,625)
EBITDA €k 51,969 12,834 99,412 22,108
Profit for the period €k 32,291 3,035 65,993 5,966
Basic earnings per share € cents/share 23.3 2.3 48.1 4.6
   
Cash flows from operating activities €k 34,196 7,515 70,999 23,000
Cash flows used in investing activities €k (6,923) (7,746) (70,853) (13,331)
Cash flows from / (used in) financing activities €k 1,893 (9,415) 54,841 14,631
   
Net Cash / (debt) position (1) €k 37,777 (15,233) 37,777 (15,233)
Working capital surplus €k 90,892 10,309 90,892 10,309
   
Average realised copper price US$/lb 4.27 2.51 3.92 2.54
   
Cu concentrate produced (tonnes) 74,495 60,938 141,755 120,941
Cu production (tonnes) 14,353 13,635 28,332 26,864
Cash costs US$/lb payable 2.26 1.87 2.15 1.93
All-In Sustaining Cost US$/lb payable 2.52 2.11 2.49 2.16

 

  • Includes bank borrowings and Deferred Consideration at 31 December 2020.
  • Q2 2021 revenues amounted to €99.7 million (Q2 2020: €56.5 million). H1 2021 revenues of €197.1 million were higher than for the same period in the prior year (H1 2020: €117.7 million). Higher revenues were the result of higher realised copper prices and slightly larger volumes of concentrate sold.
  • Q2 2021 operating costs were €47.8 million (Q2 2020: €43.7 million). H1 2021 operating costs amounted to €97.7 million (H1 2020: €95.6 million) reflecting the higher production volumes and higher cash costs.
  • Q2 2021 EBITDA of €52.0 million (Q2 2020: €12.8 million). H1 2021 EBITDA of €99.4 million (H1 2020: €22.1 million). The increase in EBITDA was driven by higher revenues while operating costs remained similar compared with Q2 2020.
  • Q2 2021 cash costs of US$2.26/lb of payable copper, higher than Q2 2020 cash costs of US$1.87/lb, mainly due to a weaker US Dollar/Euro rate in Q2 2021 ($1.10 per euro in Q2 2020 versus $1.20 per euro in Q2 2021) and a one-off adjustment in June. This was to expense a proportion of year-to-date capitalised stripping costs to reflect a higher life-of-mine waste-to-ore ratio following the updated reserves and resources announced that month.
  • Q2 2021 AISC was US$2.52/lb of payable copper, higher than US$2.11/lb during Q2 2020. The increase in AISC was driven by the same impacts as those for cash costs. Reported AISC excludes one-off investments in the tailings dam during the period, which amounted to €4.0 million (Q2 2020: €3.0 million).
  • Inventories of concentrate at 30 June 2021 amounted to €11.8 million (€2.9 million at 31 December 2020).
  • Working capital surplus as at 30 June 2021 of €90.9 million, representing a €108.8 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 long term unsecured facilities and cash generated from operations.
  • Cash flow used for investing activities amounted to €6.9 million and €70.9 million for Q2 2021 and H1 2021 respectively including €53 million paid to Astor in Q1 2021 (Q2 2020 and H1 2020: €7.7 million and €13.3 million respectively).
  • Q2 2021 cash from financing activities was €1.9 million. For H1 2021, the cash generated from financing activities was €54.8 million including unsecured facilities used to fund the payment to Astor in Q1 2021 (H1 2020: €14.6 million).

 

Operational Highlights

Proyecto Riotinto

  • Copper production during Q2 2021 was 14,353 tonnes, an increase of 5% compared with 13,635 tonnes produced during Q2 2020. Copper production for H1 2021 was 28,332 tonnes compared with 26,864 tonnes during H1 2020.
  • Ore processed during Q2 2021 was 4,025,327 tonnes, an increase on Q2 2020 when ore processed amounted to 3,572,094 tonnes. Total ore processed during H1 2021 amounted to 8,031,117 tonnes (H1 2020: 6,999,242 tonnes).
  • Copper recovery during the quarter was 84.83%, slightly lower than the 85.89% achieved in Q2 2020. For H1 2021 copper recovery was 84.85%, compared with 84.32% in H1 2020. Plant recoveries are in line with guidance.

Reserves and Resources Updates at Proyecto Riotinto

  • Following the independent reserves estimate announced on 24 June 2021 which confirmed the long life status of the Cerro Colorado open pit, studies have continued at Proyecto Riotinto.

As noted, a sizeable resource was identified at San Dionisio deposit that is potentially mineable by open pit. Further polymetallic mineralization could be exploited using underground mining methods at the Planes-San Antonio and San Dionisio deposits.

Work has started on the preparation of an NI 43-101 compliant technical report which will be followed by economic studies.

Proyecto Touro

  • The Company is finalising a new project to be presented to the Xunta de Galicia during Q3 2021. The new project for Touro includes a new design to address and resolve all the concerns previously raised by stakeholders during the Environmental Impact Evaluation Assessment.
  • The Company continues to be confident that its approach to Proyecto Touro is in line with international best practice and includes fully plastic lined tailings with zero discharge which will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to development of the project.

 

Proyecto Masa Valverde

  • Exploration at Masa Valverde is continuing with ground geophysics and two rigs currently drilling around the new Majadales and the historic Masa Valverde deposits.
  • Technical work has begun with the objective of publishing NI 43-101 compliant resource estimates on the properties.

 

Proyecto Riotinto Este

  • The Los Herreros investigation permit was granted in May 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, is expected to be granted in the coming months.
  • A proposal and quotes for an electromagnetic airborne geophysics survey covering Cerro Negro and Peñas Blancas investigation permits at Riotinto Este have been requested from three geophysical operators and the Company will provide a further update on activity for this area in due course.

 

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-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.

 

Other corporate developments

  • As previously announced, 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 ongoing litigation relates to whether any residual interest on the Deferred Consideration may or may not be payable. Refer to Notes 18 and 25 in the Financial Statements for further information.
  • Following the dismissal of Astor’s application for summary judgment which was heard on 14-15 June, the Company is currently working on other court directions in preparation for trial in February 2022 and continues to be confident in its case and is of the view that no residual interest should be payable to Astor.

 

The Company continues exploring opportunities to increase shareholder value:

  • Solar power project. Permitting of a 50 MW solar plant for self-consumption advanced significantly during H1 2021 and final construction permits are expected in the coming weeks.
  • E-LIX System. A feasibility study continues for an industrial plant using the third party-patented E-LIX System followed by conventional SX-EW to produce cathodes on site at Proyecto Riotinto. Results of the feasibility study are expected in Q3 2021.The E-LIX pilot plant is fully operational and continues gathering real data to be incorporated in the copper and zinc concentrates leaching section of the feasibility studies. The work at the pilot plant continues to support the viability of the E-LIX system and further details will be provided in due course.

 

Alberto Lavandeira, CEO commented:

Atalaya has had another solid quarter and half year, driven by its robust operational performance and strong copper prices. Our team that delivered this financial performance also continues to focus on delivering new efficiencies to further increase shareholder value, including looking at new technologies to increase productivity and reducing our carbon footprint.

 

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