TIDMATYM
RNS Number : 8598I
Atalaya Mining PLC
10 August 2023
10 August 2023
Atalaya Mining Plc.
("Atalaya" and/or the "Company")
Q2 and H1 2023 Financial Results
Strong production, decreasing AISC and focus on organic
growth
Atalaya Mining Plc (AIM: ATYM) is pleased to announce its
unaudited second quarter and first half financial results for the
period ended 30 June 2023 ("Q2 2023" and "H1 2023" respectively)
together with its unaudited condensed consolidated interim
financial statements .
Highlights
-- Strong copper production of 14.2 kt in Q2 2023, bringing H1 2023 total to 26.4 kt
-- Improved AISC of $2.89/lb Cu in Q2 2023 mainly due to lower electricity prices
-- FY2023 outlook on track: production of 53-55 kt copper at AISC of $3.00-3.20/lb
-- EBITDA of EUR15.7 million in Q2 2023 and EUR40.1 million in
H1 2023 as improved cash costs offset lower copper prices
-- 2023 interim dividend of US$0.05 per ordinary share declared
-- Strong net cash position of EUR68.8 million supports ongoing
investments in growth, cost reductions and decarbonisation
initiatives
Q2 and H1 2023 Financial Results Summary
Period ended 30 June Unit Q2 2023 Q2 2022 H1 2023 H1 2022
Revenues from operations EURk 79,051 93,418 170,222 179,669
----------------- --------- --------- ---------- ----------
Operating costs EURk (63,345) (78,749) (130,111) (138,288)
----------------- --------- --------- ---------- ----------
EBITDA EURk 15,706 14,669 40,111 41,381
----------------- --------- --------- ---------- ----------
Profit for the period EURk 9,204 11,849 20,308 30,106
----------------- --------- --------- ---------- ----------
Basic earnings per share EUR cents/share 6.8 8.6 15.0 22.1
----------------- --------- --------- ---------- ----------
Interim dividend declared
per share (1) $/share n/a n/a 0.050 0.036
----------------- --------- --------- ---------- ----------
Cash flows from operating
activities EURk 18,888 (6,916) 31,250 21,382
----------------- --------- --------- ---------- ----------
Cash flows used in investing
activities EURk (7,929) (19,771) (16,740) (27,323)
----------------- --------- --------- ---------- ----------
Cash flows from financing
activities EURk (18,936) 17,841 (28,367) 15,463
----------------- --------- --------- ---------- ----------
Net cash position (2) EURk 68,752 67,554 68,752 67,554
----------------- --------- --------- ---------- ----------
Working capital surplus EURk 81,350 129,280 81,350 129,280
----------------- --------- --------- ---------- ----------
Average realised copper
price
(excluding QPs) US$/lb 3.81 4.28 3.90 4.38
----------------- --------- --------- ---------- ----------
Cu concentrate produced tonnes 67,931 63,027 125,600 117,235
----------------- --------- --------- ---------- ----------
Cu production tonnes 14,212 13,386 26,351 24,847
----------------- --------- --------- ---------- ----------
Cash costs US$/lb payable 2.60 3.12 2.73 3.22
----------------- --------- --------- ---------- ----------
All-In Sustaining Cost
("AISC") US$/lb payable 2.89 3.33 3.00 3.45
----------------- --------- --------- ---------- ----------
(1) Interim dividends declared in relation to H1 2023 and H1 2022 periods, respectively.
(2) Includes restricted cash and bank borrowings at 30 June 2023 and 2022.
Alberto Lavandeira, CEO, commented:
"I am pleased to report that we have delivered a strong
performance in the first half of 2023. Our operations are
performing well, with production on track to achieve full year
objectives. In addition, our AISC has improved thanks to lower
electricity prices, helping to offset lower copper prices. The
resulting EBITDA of EUR40.1 million in H1 2023 reflects the
resiliency of our business.
Copper fundamentals continue to improve, with many large miners
having recently downgraded their production guidance for 2023 as a
result of operational challenges and project delays. Over the
medium term, few large new projects are expected to be sanctioned
due to uncertainties related to permitting and cost inflation.
In addition, more governments around the world are now
classifying copper as a strategic metal. Recently, the U.S.
Department of Energy released its 2023 Critical Materials
Assessment, which included copper on its list of materials with
high risk of supply disruption that are integral to clean energy
technologies.
Atalaya is well placed to benefit from the improving market
dynamics of copper. We have a robust cash position and are
continuing to advance our diverse project portfolio. Combined,
these initiatives have the potential to increase our copper
production, reduce our cost position, lower our carbon footprint
and extend the life of our operations in Spain."
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding
a live presentation relating to the Q2 and H1 2023 Financial
Results via the Investor Meet Company platform at 13:00 BST
today.
To register, please visit the following link and click "Add to
Meet" Atalaya via:
https://www.investormeetcompany.com/atalaya-mining-plc/register-investor
Management will also answer questions that have been submitted
via the Investor Meet Company dashboard.
Q2 and H1 2023 Operating Results Summary
Units expressed in accordance Unit Q2 2023 Q2 2022 YTD 2023 YTD 2022
with the international system
of units (SI)
Ore mined t 3,934,462 3,572,871 7,356,018 7,527,518
-------- ---------- ---------- ----------- -----------
Waste mined t 8,640,747 6,740,305 15,157,650 13,578,935
-------- ---------- ---------- ----------- -----------
Ore processed t 4,077,681 3,980,820 7,801,534 7,528,307
-------- ---------- ---------- ----------- -----------
Copper ore grade % 0.40 0.39 0.39 0.38
-------- ---------- ---------- ----------- -----------
Copper concentrate grade % 20.92 21.23 20.98 21.19
-------- ---------- ---------- ----------- -----------
Copper recovery rate % 87.18 86.44 87.04 86.26
-------- ---------- ---------- ----------- -----------
Copper concentrate tonnes 67,931 63,027 125,600 117,235
-------- ---------- ---------- ----------- -----------
Copper contained in concentrate tonnes 14,212 13,386 26,351 24,847
-------- ---------- ---------- ----------- -----------
Payable copper contained
in concentrate tonnes 13,533 12,756 25,095 23,674
-------- ---------- ---------- ----------- -----------
Mining
Ore mined was 3.9 million tonnes in Q2 2023 (Q2 2022: 3.6
million tonnes) and 7.4 million tonnes in H1 2023 (H1 2022: 7.5
million tonnes).
Waste mined was 8.6 million tonnes in Q2 2023 (Q2 2022: 6.7
million tonnes) and 15.2 million tonnes in H1 2023 (H1 2022: 13.6
million tonnes). Waste mining during H1 2023 was consistent with
budget and includes increased waste stripping at Cerro Colorado in
anticipation of the potential start of mining activities at San
Dionisio in late 2023.
Processing
The plant processed ore of 4.1 million tonnes in Q2 2023 (Q2
2022: 4.0 million tonnes) and 7.8 million tonnes in H1 2023 (H1
2022: 7.5 million tonnes). Throughput rates in Q2 2023 reflected
strong mill performance following the prior rescheduling of plant
maintenance activities into Q1 2023.
Copper grade was 0.40% in Q2 2023 (Q2 2022: 0.39%) and 0.39% in
H1 2023 (H1 2022: 0.38%).
Copper recoveries in Q2 2023 were 87.18% (Q2 2022: 86.44%) and
87.04% in H1 2023 (H1 2022: 86.26%), as a result of favourable ore
characteristics during the 2023 periods.
Production
Copper production was 14,212 tonnes in Q2 2023 (Q2 2022: 13,386
tonnes) and 26,351 tonnes in H1 2023 (H1 2022: 24,847 tonnes).
Production during the 2023 periods benefited from higher
throughput, copper grades and copper recoveries compared with the
2022 periods.
On-site copper concentrate inventories at 30 June 2023 were
approximately 7,291 tonnes (31 March 2023: 1,564 tonnes). All
concentrate in stock at the beginning of the period was delivered
to the port at Huelva.
Copper contained in concentrates sold was 12,858 tonnes in Q2
2023 (Q2 2022: 13,872 tonnes) and 25,359 tonnes in H1 2023 (H1
2022: 24,176 tonnes).
Cash Costs and AISC Breakdown
$/lb Cu payable Q2 2023 Q2 2022 H1 2023 H1 2022
Mining 0.79 0.87 0.81 0.86
Processing 0.82 1.22 0.89 1.31
Other site operating costs 0.52 0.50 0.51 0.55
Total site operating costs 2.13 2.59 2.21 2.72
By-product credits (0.08) (0.11) (0.08) (0.09)
Freight, treatment charges and other
offsite costs 0.55 0.64 0.60 0.59
Total offsite costs 0.47 0.53 0.52 0.50
Cash costs 2.60 3.12 2.73 3.22
-------- -------- -------- --------
Cash costs 2.60 3.12 2.73 3.22
-------- -------- -------- --------
Corporate costs 0.09 0.08 0.08 0.10
Sustaining capital (excluding one-off
tailings expansion) 0.04 0.08 0.03 0.06
Capitalised stripping costs 0.10 - 0.09 0.01
Other costs 0.06 0.05 0.07 0.06
Total AISC 2.89 3.33 3.00 3.45
Cash costs were $2. 60 /lb payable copper in Q2 2023 ( Q2 2022:
$3.12/lb) and $2.73/lb payable copper in H1 2023 (H1 2022: $3.22/lb
), with the decrease mainly due to lower electricity costs and
higher production volumes.
AISC were $ 2.89 /lb payable copper in Q2 2023 ( Q2 2022: $3. 33
/lb ) and $3.00/lb payable copper in H1 2023 (H1 2022: $3.45/lb ).
The decrease in AISC was driven by the same factors that resulted
in lower cash costs, but partly offset by higher capitalised
stripping costs. AISC excludes one-off investments in the tailings
dam, consistent with prior reporting.
Q2 and H1 2023 Financial Results Highlights
Income Statement
Revenues were EUR79.1 million in Q2 2023 (Q2 2022: EUR93.4
million) and EUR 170.2 million in H1 2023 (H1 2022: EUR179.7
million). Lower revenues were mainly the result of lower realised
copper prices during the 2023 periods.
Operating costs were EUR 63.3 million in Q2 2023 (Q2 2022:
EUR78.7 million) and EUR 130.1 million (H1 2022: EUR138.3 million
). Lower operating costs during the 2023 periods were mainly the
result of lower electricity costs and modestly lower expensed
mining costs, partly offset by higher administrative and expensed
exploration costs .
EBITDA was EUR 15.7 million in Q2 2023 (Q2 2022: EUR14.7
million) and EUR 40.1 million in H1 2023 (H1 2022: EUR41.4
million). The comparable level of EBITDA resulted from lower copper
prices being offset by lower operating costs.
Profit after tax was EUR9.2 million in Q2 2023 (Q2 2022: EUR11.8
million) or 6.8 cents basic earnings per share (Q2 2022: 8.6 cents)
and EUR 20.3 million in H1 2023 (H1 2022: EUR30.1 million) or 15.0
cents basic earnings per share (Q2 2022: 22.1 cents).
Cash Flow Statement
Cash flows from operating activities before changes in working
capital were EUR14.7 million in Q2 2023 (Q2 2022: EUR14.3 million)
and EUR18.9 million after working capital changes (Q2 2022:
negative EUR6.9 million). For H1 2023, cash flows from operating
activities before changes in working capital were EUR38.9 million
(H1 2022: EUR41. 3 million ) and EUR31.3 million after working
capital changes (H1 2022: EUR21.4 million).
Cash flows used in investing activities were EUR7.9 million in
Q2 2023 (Q2 2022: EUR19.8 million) and EUR16.7 million in H1 2023
(H1 2022: EUR27.3 million). Key investments in Q2 2023 included EUR
1.1 million in sustaining capex ( Q2 2022: EUR2.0 million), EUR2.7
million in capitalised stripping (Q2 2022: EUR 20 thousand), EUR3.5
million to increase the tailings dam ( Q2 2022: EUR 3.9 million),
EUR2.8 million for the 50 MW solar plant (Q2 2022: EUR11.3 million
) and EUR5.0 million for the E-LIX Phase I Plant (Q2 2022: EUR5.8
million ), of which EUR3.0 million was booked as long-term loans to
Lain Technologies Ltd.
Cash flows from financing activities were negative EUR18.9
million in Q2 2023 (Q2 2022: positive EUR17.8 million) and negative
EUR28.4 million in H1 2023 (H1 2022: positive EUR15.5 million), as
a result of scheduled repayments made under the Company's credit
facilities.
Balance Sheet
Consolidated cash and cash equivalents were EUR112.6 million at
30 June 2023 (31 December 2022: EUR126.4 million).
Net of current and non-current borrowings of EUR43.9 million,
net cash was EUR68.8 million as at 30 June 2023, compared to
EUR55.3 million as at 31 March 2023 and EUR53.1 million as at 31
December 2022.
Inventories of concentrate valued at cost were EUR8.2 million at
30 June 2023 (31 December 2022: EUR4.5 million).
As at 30 June 2023, total working capital was EUR81.4 million,
compared to EUR85.3 million as at 31 March 2023 and EUR84.0 million
as at 31 December 2022.
Electricity Prices
Realised Prices
Market electricity prices in Q2 2023 continued to moderate. When
including the contribution from the Company's 10-year power
purchase agreement ("PPA"), realised electricity prices in Q2 2023
and H1 2023 were around 60% lower than the Company's average
realised electricity price in 2022.
Renewable Energy Projects
Construction of the 50 MW solar plant at Riotinto continues to
advance, with start-up expected in late 2023 or early 2024. When
fully operational, the facility is expected to provide
approximately 22% of Riotinto's current electricity needs.
Together, the 50 MW solar plant and long-term PPA will provide over
50% of the Company's current electricity requirements at a rate
below historical prices in Spain.
The Company continues to assess the potential installation of
wind turbines at Riotinto, which could supply additional low cost
and carbon-free electricity and contribute to the Company's
decarbonisation objectives.
2023 Guidance
The Company remains on track to achieve the full year 2023
guidance, including copper production guidance of 53,000 to 55,000
tonnes of copper at cash costs of $2.80 to $3.00/lb copper payable
and AISC of $3.00 to $3.20/lb copper payable.
In addition, aggregate expenditures relating to non-sustaining
capital investments (such as E-LIX Phase I, the 50 MW solar plant,
Riotinto tailings facility expansion) and exploration activities
are trending in line with FY2023 guidance, although the composition
is expected to vary slightly including modestly higher investments
in the E-LIX Phase I plant.
2023 Interim Dividend
Since 2022, Atalaya has had a dividend policy that seeks to
provide capital returns to its shareholders and allows for
continued investments in its portfolio of low capital intensity
growth projects. The dividend policy consists of an annual pay-out
of 30 - 50% of free cash flow generated during the applicable
financial year and is payable in two half-yearly instalments .
In relation to FY2022, Atalaya completed the payment of the 2022
Final Dividend of US$0.0385 per ordinary share on 8 August
2023.
In relation to the H1 2023 period, the Company's Board of
Directors has elected to declare an interim dividend of US$0.050
per ordinary share ("2023 Interim Dividend"), which is equivalent
to approximately 3.9 pence per share. This compares to the 2022
interim dividend of US$0.036 per ordinary share.
Shareholders can elect to receive the 2023 Interim Dividend in
Sterling or Euros by submitting a currency election form, which
will be made available on the Company's website.
2023 Interim Dividend Timetable
Event Date
Ex-dividend date 24 August 2023
--------------------
Record date 25 August 2023
--------------------
Last day for currency election 8 September 2023
--------------------
Reference date for exchange rates used for 11 September 2023
conversion
--------------------
Announcement of dividend currency exchange 12 September 2023
rates
--------------------
Estimated payment date 28 September 2023
--------------------
The Company is not required to withhold any Cypriot special
defence contributions or general healthcare system contributions
upon the distribution of dividends to its shareholders, as a result
of the approval obtained from the Tax Department of the Ministry of
Finance of the Republic of Cyprus.
Asset Portfolio Update
Proyecto Riotinto
In April 2023, the Company was granted a substantial
modification to the existing Unified Environmental Authorisation
(or in Spanish, Autorización Ambiental Unificada ("AAU")) for
Proyecto Riotinto by the Junta de Andalucía. This allows for the
expansion of tailings capacity at Riotinto and represents an
important step towards developing regional deposits such as San
Dionisio and San Antonio.
During H1 2023, the Company continued permitting activities
associated with San Dionisio, which represents a key component of
the integrated mine plan that was outlined in the recent Riotinto
PEA.
E-LIX Phase I Plant
Construction activities continue at the E-LIX Phase I plant,
with commissioning expected during H2 2023.
Once operational, the E-LIX plant is expected to produce high
purity copper or zinc metals on site, allowing the Company to
potentially achieve higher metal recoveries from complex
polymetallic ores, lower transportation and concentrate treatment
charges and a reduced carbon footprint.
Riotinto District - Proyecto Masa Valverde (" PMV ")
In March 2023, the Company announced that PMV was granted the
AAU by the Junta de Andalucía, following an application process
that was initiated by the Company in December 2021. The AAU is an
integrated process that combines the Environmental Impact
Assessment and other authorisations and specifies requirements to
avoid, prevent and minimise a project's impacts on the environment
and the cultural heritage of the area. Various evaluation
workstreams continue in advance of filing for the exploitation
permit.
Three core rigs are active and focused on resource definition
drilling at the Campanario Trend, step-out drilling around the new
discovery made at the Mojarra Trend and first drill testing
coincident fix loop electromagnetic ("FLEM") and airborne gravity
gradiometry ("AGG") anomalies.
Proyecto Touro
Atalaya remains fully committed to the development of the Touro
copper project in Galicia, which could become a new source of
copper production for Europe.
In March 2023, the European Union announced the Critical Raw
Materials Act, which seeks to "address the EU's dependency on
imported critical raw materials by diversifying and securing a
domestic and sustainable supply of critical raw materials". Copper
was added to the list of "Strategic Raw Materials" as a result of
the challenges associated with substituting copper metal in
electrical applications.
Running parallel with the Touro permitting process, the Company
continues to focus on numerous initiatives related to securing the
social licence to operate, including engaging with the many
stakeholders in the region to provide detailed information on the
new improved project design. Positive and favourable feedback from
numerous meetings with municipalities, farmers and fishermen
associations and other industries indicate meaningful support
towards the development of a new and modern mining project.
The Company continues to restore rivers around Touro and is
operating its water treatment plant, which is addressing the legacy
issues associated with acid water runoff from the historical mine,
which closed in 1987. The construction of the treatment plant was
contemplated in the original project proposal, but Atalaya
volunteered to fix the historical acid water issues prior to the
new Environmental Impact Assessment ("EIA") in order to demonstrate
its operating philosophy and the benefits of modern operating
systems. The field work carried out by Atalaya has resulted in an
immediate and visible improvement of the water systems surrounding
the project.
Atalaya continues to be confident that its approach to Touro,
which includes fully plastic lined thickened tailings with zero
discharge, is consistent with international best practice and will
satisfy the most stringent environmental conditions that may be
imposed by the authorities prior to the development of the
project.
Proyecto Ossa Morena
Drilling continued to progress with one rig at the
Guijarro-Chaparral gold-copper project, located in the central part
of the district. Drilling at the flagship Alconchel-Pallares
copper-gold project is expected to commence during Q3 2023.
Proyecto Riotinto East
Drill testing of selected coincident FLEM and AGG anomalies are
in progress with one rig.
Corporate Matters
Following the voluntary delisting of the Company's ordinary
shares from the Toronto Stock Exchange ("TSX"), an application was
made to cease to be a reporting issuer in Canada. The request was
granted during Q2 2023, and as a result, the Company will no longer
be required to file financial statements and other continuous
disclosure documents in Canada.
The Company's disclosure obligations under the AIM Rules for
Companies, as published by London Stock Exchange plc, are
unchanged.
Financial Statements
The Unaudited Interim Condensed Consolidated Financial
Statements for the three and six months ended 30 June 2023 are also
available on Atalaya's website at www.atalayamining.com .
Contacts:
Elisabeth Cowell / Tom
SEC Newgate UK Carnegie / Matthew Elliott + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
------------------------------- ------------------
Canaccord Genuity Henry Fitzgerald-O'Connor
(NOMAD and Joint / James Asensio / Thomas
Broker) Diehl +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-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 central
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, as well as a 99.9%
interest in Proyecto Ossa Morena. For further information, visit
www.atalayamining.com
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
30 June 2023
Notice to Reader
The accompanying unaudited interim condensed consolidated
financial statements of Atalaya Mining Plc have been prepared by
and are the responsibility of Atalaya Mining Plc's management.
Atalaya will audit the Financial Statements for the period ended
30 June 2023 and the audited financial statements will be published
on Atalaya's website in due course.
Introduction
This report provides an overview and analysis of the financial
results of operations of Atalaya Mining Plc and its subsidiaries
("Atalaya" and/or "Group"), t o enable the reader to assess
material changes in the financial position between 31 December 2022
and 30 June 2023 and results of operations for the three and six
months ended 30 June 2023 and 2022.
This report has been prepared as of 9 August 2023. The analysis
hereby included is intended to supplement and complement the
unaudited interim condensed consolidated financial statements and
notes thereto ("Financial Statements") as at and for the period
ended 30 June 2023. The reader should review the Financial
Statements in conjunction with the review of this report and with
the audited, consolidated financial statements for the year ended
31 December 2022, and the unaudited interim condensed consolidated
financial statements for the period ended 30 June 2022. These
documents can be found on Atalaya's website at
www.atalayamining.com
Atalaya prepares its Annual Financial Statements in accordance
with International Financial Reporting Standards ("IFRS") as
adopted by the EU and its Unaudited Interim Condensed Consolidated
Financial Statements in accordance with International Accounting
Standard 34: Interim Financial Reporting. The currency referred to
in this document is the Euro, unless otherwise specified.
Forward-looking statements
This report may include certain "forward-looking statements" and
"forward-looking information" under applicable securities laws.
Except for statements of historical fact, certain information
contained herein constitute forward-looking statements.
Forward-looking statements are frequently characterised by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", and other similar words, or statements
that certain events or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made, and are based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Assumptions upon which such
forward-looking statements are based include that all required
third party regulatory and governmental approvals will be obtained.
Many of these assumptions are based on factors and events that are
not within the control of Atalaya and there is no assurance they
will prove to be correct. Factors that could cause actual results
to vary materially from results anticipated by such forward-looking
statements include changes in market conditions and other risk
factors discussed or referred to in this report and other documents
filed with the applicable securities regulatory authorities.
Although Atalaya has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Atalaya undertakes no obligation to
update forward-looking statements if circumstances or management's
estimates or opinions should change except as required by
applicable securities laws. The
reader is cautioned not to place undue reliance on
forward-looking statements.
1. Incorporation and description of the Business
Atalaya Mining Plc (the "Company") was incorporated in Cyprus on
17 September 2004 as a private company with limited liability under
the Companies Law, Cap. 113 and was converted to a public limited
liability company on 26 January 2005. Its registered office is at 1
Lampousa Street, Nicosia, Cyprus.
The Company was listed on AIM of the London Stock Exchange
("AIM") in May 2005 under the symbol ATYM. The Company continued to
be listed on AIM as at 30 June 2023.
On 20 February 2023, Atalaya announced that applied a voluntary
delisting of its ordinary shares from the Toronto Stock Exchange
(the "TSX"). Ordinary shares in the Company continue to trade on
the AIM market of the London Stock Exchange under the symbol
"ATYM". Delisting from TSX took effect at the close of trading on
20 March 2023. Furthermore, Atalaya ceased to be a reporting issuer
in Canadian jurisdictions on 26 June 2023.
Atalaya is a European mining and development company. The
strategy is to evaluate and prioritise metal production
opportunities in several jurisdictions throughout the well-known
belts of base and precious metal mineralisation in Spain, elsewhere
in Europe and Latin America.
The Group currently owns four mining projects: Proyecto
Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa
Morena. In addition, the Company has an earn-in agreement to
acquire three investigation permits at Proyecto Riotinto Este.
Proyecto Riotinto
The Company owns and operates through a wholly owned subsidiary,
"Proyecto Riotinto", an open-pit copper mine located in the Iberian
Pyrite Belt, in the Andalusia region of Spain, approximately 65 km
northwest of Seville. A brownfield expansion of this mine was
completed in 2019 and successfully commissioned by 31 March
2020.
Proyecto Touro
The Group has an initial 10% stake in Cobre San Rafael, S.L.,
the owner of Proyecto Touro, as part of an earn-in agreement which
will enable the Group to acquire up to 80% of the copper project.
Proyecto Touro is located in Galicia, north-west Spain. Proyecto
Touro is currently in the permitting process.
In November 2019, Atalaya executed the option to acquire 12.5%
of Explotaciones Gallegas del Cobre, S.L. the exploration property
around Touro, with known additional mineralisation, which will add
to the potential of Proyecto Touro.
Proyecto Masa Valverde
On 21 October 2020, the Company announced that it entered into a
definitive purchase agreement to acquire 100% of the shares of
Cambridge Mineria España, S.L. (since renamed Atalaya Masa
Valverde, S.L.U.), a Spanish company which fully owns the Masa
Valverde polymetallic project located in Huelva (Spain). Proyecto
Masa Valverde is currently in the permitting process.
Proyecto Riotinto Este
In December 2020, Atalaya entered into a Memorandum of
Understanding with a local private Spanish company to acquire a
100% beneficial interest in three investigation permits (known as
Peñas Blancas, Cerro Negro and Herreros investigation permits),
which cover approximately 12,368 hectares and are located
immediately east of Proyecto Riotinto.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51%
interest in Rio Narcea Nickel, S.L., which owns 17 investigation
permits. The acquisition also provided a 100% interest in three
investigation permits that are also located along the Ossa-Morena
Metallogenic Belt. In July 2022, Atalaya increased its stake in the
company to 99.9% as a result of an equity raise to fund the
exploration activities under the investigation permits.
2. Overview of Operational Results
Proyecto Riotinto
The following table presents a summarised statement of
operations of Proyecto Riotinto for the three and six months ended
30 June 2023 and 2022, respectively.
Units expressed in Unit Three Three month Six month Six month
accordance with the month period period period period
international system ended 30 ended 30 ended 30 ended 30
of units (SI) Jun 2023 Jun 2022 Jun 2023 Jun 2022
Ore mined t 3,934,462 3,572,871 7,356,018 7,527,518
---------- -------------- ------------ ----------- -----------
Waste mined t 8,640,747 6,740,305 15,157,650 13,578,935
---------- -------------- ------------ ----------- -----------
Ore processed t 4,077,681 3,980,820 7,801,534 7,528,307
---------- -------------- ------------ ----------- -----------
Copper ore grade % 0.40 0.39 0.39 0.38
---------- -------------- ------------ ----------- -----------
Copper concentrate grade % 20.92 21.23 20.98 21.19
---------- -------------- ------------ ----------- -----------
Copper recovery rate % 87.18 86.44 87.04 86.26
---------- -------------- ------------ ----------- -----------
Copper concentrate t 67,931 63,027 125,600 117,235
---------- -------------- ------------ ----------- -----------
Copper contained in
concentrate t 14,212 13,386 26,351 24,847
---------- -------------- ------------ ----------- -----------
Payable copper contained
in concentrate t 13,533 12,756 25,095 23,674
---------- -------------- ------------ ----------- -----------
US$/lb
Cash cost* payable 2.60 3.12 2.73 3.22
---------- -------------- ------------ ----------- -----------
US$/lb
All-in sustaining cost* payable 2.89 3.33 3.00 3.45
---------- -------------- ------------ ----------- -----------
(*) Refer Section 5 of this Management Review.
There may be slight differences between the numbers in the above
table and the figures announced in the quarterly operations updates
that are available on Atalaya's website at
www.atalayamining.com
Three Three Six month Six month
month month period period
period period ended ended
ended ended 30 Jun 30 Jun
30 Jun 30 June 2023 2022
$/lb Cu payable 2023 2022
Mining 0.79 0.87 0.81 0.86
Processing 0.82 1.22 0.89 1.31
Other site operating costs 0.52 0.50 0.51 0.55
Total site operating costs 2.13 2.59 2.21 2.72
By-product credits (0.08) (0.11) (0.08) (0.09)
Freight, treatment charges and other
offsite costs 0.55 0.64 0.60 0.59
Total offsite costs 0.47 0.53 0.52 0.50
Cash costs 2.60 3.12 2.73 3.22
-------- --------- ---------- ----------
Cash costs 2.60 3.12 2.73 3.22
Corporate costs 0.09 0.08 0.08 0.10
Sustaining capital (excluding one-off
tailings expansion) 0.04 0.08 0.03 0.06
Capitalised stripping costs 0.10 - 0.09 0.01
Other costs 0.06 0.05 0.07 0.06
Total AISC 2.89 3.33 3.00 3.45
Three months operational review
The plant processed ore of 4.1 million tonnes during Q2 2023 (Q2
2022: 4.0 million tonnes), compared with 3.7 million tonnes in Q1
2023. Throughput rates during the period reflected strong mill
performance following the prior rescheduling of plant maintenance
activities into Q1 2023.
Copper grade was 0.40% in Q2 2023 (Q2 2022: 0.39%), compared
with 0.38% in Q1 2023.
Copper recoveries in Q2 2023 were 87.18% (Q2 2022: 86.44%),
compared with 86.88% in Q1 2023, as a result of favourable ore
characteristics during the period.
Copper production was 14,212 tonnes in Q2 2023 (Q2 2022: 13,386
tonnes), compared with 12,139 tonnes in Q1 2023. Production during
the period benefited from strong throughput and copper
recoveries.
On-site copper concentrate inventories at 30 June 2023 were
approximately 7,291 tonnes (31 March 2023: 1,564 tonnes). All
concentrate in stock at the beginning of the period was delivered
to the port at Huelva.
Copper contained in concentrates sold was 12,858 tonnes in Q2
2023 (Q2 2022: 13,872 tonnes), compared with 12,501 tonnes in Q1
2023.
Six months operational review
Production of copper contained in concentrate during H1 2023 was
26,351 tonnes, compared with 24,847 tonnes in the same period of
2022. Payable copper in concentrates was 25,095 tonnes compared
with 23,674 tonnes of payable copper in H1 2022.
Ore mined in H1 2023 was 7.4 million tonnes compared with 7.5
million tonnes during H1 2022. Ore processed was 7.8 million tonnes
versus 7.5 million tonnes in H1 2022 with similar-grade stockpiles
processed in both periods.
Ore grade during H1 2023 was 0.39% Cu compared with 0.38% Cu in
H1 2022. Copper recovery was 87.04% versus 86.26% in H1 2022.
Concentrate production amounted to 125,600 tonnes above H1 2022
production of 117,235 tonnes.
2. Outlook
The forward-looking information contained in this section is
subject to the risk factors and assumptions contained in the
cautionary statement on forward-looking statements included in the
Basis of Reporting. The Company is aware that the inflationary
pressure on the goods and services required for its business and
the geopolitical developments in Ukraine and its impact on energy
prices may still have further effects or impact how the Company can
manage it 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.
Operational guidance
Guidance for Proyecto Riotinto is unchanged from previously
announced outlook .
Unit Guidance
2023
Ore mined million tonnes 17.1
Waste mined million tonnes 24.1
Ore processed million tonnes 15.3 - 15.8
Copper ore grade % 0.40 - 0.42
Copper recovery
rate % 85 - 86
Contained copper tonnes 53,000-55,000
Cash costs $/lb payable 2.80 - 3.00
All-in sustaining $/lb payable 3.00 - 3.20
cost
Production guidance for 2023 remains in the range of 53,000 to
55,000 tonnes of copper.
Inflationary pressures continue to impact the global mining
industry. The prices of many key inputs, including diesel, tyres,
explosives, grinding media and lime, increased materially in 2022
as a result of higher global energy prices and logistics
constraints. Since then, prices have stabilised for certain
items.
The cash cost guidance range for 2023 remains at $2.80 to
$3.00/lb copper payable and the AISC guidance range remains at
$3.00 to $3.20/lb copper payable. These cost guidance ranges are
based on an assumed market electricity price range of EUR100 to
150/MWh and also include the benefit of the Company's PPA.
In addition, aggregate expenditures relating to non-sustaining
capital investments (such as E-LIX Phase I, the 50 MW solar plant,
Riotinto tailings facility expansion) and exploration activities
are trending in line with FY2023 guidance, although the composition
is expected to vary slightly including modestly higher investments
in the E-LIX Phase I plant.
3. Overview of the Financial Results
The following table presents summarised consolidated income
statements for the three and six months ended 30 June 2023, with
comparatives for the three and six months ended 30 June 2022,
respectively.
( Euro 000's ) Three Three month Six month Six month
month period period period period
ended 30 ended 30 ended 30 ended 30
Jun 2023 June 2022 Jun 2023 Jun 2022
Revenues 79,051 93,418 170,222 179,669
Costs of sales (57,618) (78,200) (120,621) (132,989)
Administrative and other
expenses (3,612) (868) (5,645) (4,451)
Exploration expenses (2,069) 88 (3,602) (364)
Care and maintenance expenditure (391) (55) (686) (770)
Other income 345 286 443 286
---------------------------------- -------------- ------------ ---------- ----------
EBITDA 15,706 14,669 40,111 41,381
Depreciation/amortisation (9,411) (8,785) (18,173) (16,305)
Net foreign exchange gain 1,277 7,521 55 10,094
Net finance cost 3,480 (626) 2,636 (941)
Tax (1,848) (930) (4,321) (4,123)
---------------------------------- -------------- ------------ ---------- ----------
Profit for the period 9,204 11,849 20,308 30,106
Three months financial review
Revenues for the three-month period ended 30 June 2023 amounted
to EUR79.1 million (Q2 2022: EUR93.4 million). Reduced revenues in
comparison to the same quarter of the previous year were mainly
attributable to decreased volumes of concentrate sold and lower
realised prices.
Realised prices excluding QPs were US$ 3.81 /lb copper during Q2
2023 compared with US$ 4.28 /lb copper in Q2 2022. The realised
price during the quarter, including QPs, was approximately
US$3.86/lb.
Cost of sales for the three-month period ended 30 June 2023
amounted to EUR57.6 million, compared with EUR78.2 million in Q2
2022. Unit operating costs in Q2 2023 were lower than in Q2
2022.
Cash costs of US$2.60/lb payable copper during Q2 2023 compared
with US$3.12/lb payable copper in the same period last year. Lower
cash costs were primarily attributed to a significant reduction in
the cost of electricity (approx. EUR13.3 million lower) and other
supply-related costs, which also included lower freight prices .
AISC for Q2 2023, excluding one-off investments in the tailings
dam, were US$2.89lb payable copper compared with US$3.33/lb payable
copper in Q2 2022.
Sustaining capex for Q2 2023 amounted to EUR1.1 million compared
with EUR2.0 million in Q2 2022. Sustaining capex mainly related to
continuous enhancements in the processing systems of the plant. In
addition, the Company invested EUR 3.5 million in the project to
increase the tailings dam during Q2 2023 (Q2 2022: EUR3.9 million).
Stripping costs capitalised during Q2 2023 amounted to EUR2.7
million (Q2 2022: EUR20k).
Capex associated with the construction of the 50 MW solar plant
amounted to EUR2.8 million in Q2 2023, while investments in the
E-LIX Phase I plant totalled EUR5.0 million, of which EUR3.0
million was booked as long term loans to Lain Technologies Ltd.
Administrative and other expenses amounted to EUR3.6 million (Q2
2022: EUR0.9 million) and include non-operating costs of the Cyprus
office, corporate legal and consultancy costs, on-going listing
costs, officers and directors' emoluments, and salaries and related
costs of the corporate office.
Exploration costs on Atalaya's projects portfolio for the
three-month period ended 30 June 2023 amounted to EUR2.1 million
compared to EUR88k in Q2 2022 mainly as a result of costs incurred
during the period in Proyecto Masa Valverde.
EBITDA for the three months ended 30 June 2023 amounted to
EUR15.7 million compared with Q2 2022 of EUR14.7 million.
The main item below the EBITDA line is depreciation and
amortisation of EUR9.4 million (Q2 2022: EUR8.8 million). In Q2
2023, net financing costs amounted to a positive EUR3.5 million
(compared to EUR0.6 million in Q2 2022). This increase is mainly
attributed to the interest received of EUR3.5 million as a result
of the agreement reached with Astor on 17 May 2023.
Six months financial review
Revenues for the six-month period ended 30 June 2023 amounted to
EUR170.2 million (H1 2022: EUR179.7 million).
Copper concentrate production during the six-month period ended
30 June 2023 was 125,600 tonnes (H1 2022: 117,235 tonnes) with
122,040 tonnes of copper concentrates sold in the period (H1 2022:
115,321 tonnes). Higher production levels in H1 2023 were mainly
the result of robust throughput. Inventories of concentrates as at
the reporting date were 7,291 tonnes (31 Dec 2022: 3,529
tonnes).
Realised copper prices, excluding QPs, for H1 2023 were
US$3.90/lb copper compared with US$4.38/lb copper in the same
period of 2022. Concentrates were sold under offtake agreements for
the production not committed . The Company did not enter into any
hedging agreements in 2023.
Cost of sales for the six-month period ended 30 June 2023
amounted to EUR120.6 million, compared with EUR133.0 million in H1
2022. Lower operating costs in 2023 were due to a reduction in
input costs compared with the 2022 period, where the high cost of
electricity, diesel and other supplies were the result of inflation
and the geopolitical situation in Ukraine.
Cash costs of US$2.73/lb payable copper during H1 2023 compare
with US$3.22/lb payable copper in the same period last year. The
reduction in cash costs can be mainly attributed to a significant
reduction in the cost of electricity (approx. EUR25.3 million
lower) and other supplies, including freight prices. AISC excluding
investment in the tailings dam in the six month period were
US$3.00/lb payable copper compared with US$3.45/lb payable copper
in H1 2022. The decrease is mainly due to the lower cash costs,
although partly offset by higher capitalised stripping costs.
Sustaining capex for the six-month period ended 30 June 2023
amounted to EUR1.5 million, compared with EUR2.9 million in the
same period the previous year. Sustaining capex related to
enhancements in processing systems of the plant. In addition, the
Company invested EUR6.9 million in the project to increase the
tailings dam, compared with EUR6.4 million in 2022.
Capex associated with the construction of the 50 MW solar plant
amounted to EUR4.5 million in H1 2023, while investments in the
E-LIX Phase I plant totalled EUR8.4 million, of which EUR4.9
million was booked as long term loans to Lain Technologies Ltd.
Corporate costs for the first six-month period ended June 2023
were EUR5.6 million, compared with EUR4.5 million in H1 2022.
Corporate costs mainly include the Company's overhead expenses.
Exploration costs related to Atalaya's project portfolio for the
six-month period ended 30 June 2023 and amounted to EUR3.6 million,
compared with EUR0.4 million, plus EUR1.4 million capitalised as
permits in Proyecto Masa Valverde, in H1 2022.
EBITDA for the six months ended 30 June 2023 amounted to EUR40.1
million, compared with EUR41.4 million in H1 2022.
Depreciation and amortisation amounted to EUR18.2 million for
the six-month period ended 30 June 2023 (H1 2022: EUR16.3
million).
Net foreign exchange gains amounted to EUR55k in H1 2023
(EUR10.1 million in H1 2022).
Net finance costs for H1 2023 amounted to positive EUR2.7
million (H1 2022 negative EUR0.9 million).
Copper prices
The average realised copper price (excluding QPs) decreased by
11% to US$3.81/lb in Q2 2023, from US$4.28/lb in Q2 2022.
The average prices of copper for the three months ended 30 June
2023 and 2022 are summarised below:
$/lb Three Three Six month Six month
month month period period
period period ended ended 30
ended ended 30 Jun Jun 2022
30 Jun 30 June 2023
2023 2022
Realised copper price (excluding
QPs) 3.81 4.28 3.90 4.38
Market copper price per lb (period
average) 3.85 4.40 3.95 4.13
Realised copper prices for the reporting period noted above have
been calculated using payable copper and excluding both provisional
invoices and final settlements of quotation periods ("QPs")
together. The realised price during Q2 2023, including the QP, was
approximately $3.86/lb.
4. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including
"EBITDA", "Cash Cost per pound of payable copper", "All-In
Sustaining Costs" ("AISC") "realised prices" and "Net Cash/Debt" in
this report. Non-IFRS measures do not have any standardised meaning
prescribed under IFRS, and therefore they may not be comparable to
similar measures presented by other companies. These measures are
intended to provide additional information and should not be
considered in isolation or as a substitute for indicators prepared
in accordance with IFRS.
EBITDA includes gross sales net of penalties and discounts and
all operating costs, excluding finance, tax, impairment,
depreciation and amortisation expenses.
Cash Cost per pound of payable copper includes cash operating
costs, including treatment and refining charges ("TC/RC"), freight
and distribution costs net of by-product credits. Cash Cost per
pound of payable copper is consistent with the widely accepted
industry standard established by Wood Mackenzie and is also known
as the C1 cash cost.
AISC per pound of payable copper includes C1 Cash Costs plus
royalties and agency fees, expenditures on rehabilitation,
capitalised stripping costs, exploration and geology costs,
corporate costs and recurring sustaining capital expenditures but
excludes one-off sustaining capital projects, such as the tailings
dam project.
Realised price per pound of payable copper is the value of the
copper payable included in the concentrate produced including the
discounts and other features governed by the offtake agreements of
the Group and all discounts or premiums provided in commodity hedge
agreements with financial institutions if any, expressed in USD per
pound of payable copper. Realised prices do not include period end
mark to market adjustments in respect of provisional pricing
Realised price is consistent with the widely accepted industry
standard definition.
5. Liquidity and Capital Resources
Atalaya monitors factors that could impact its liquidity as part
of Atalaya's overall capital management strategy. Factors that are
monitored include, but are not limited to, the market price of
copper, foreign currency rates, production levels, operating costs,
capital and administrative costs.
The following is a summary of Atalaya's cash position and cash
flows as at 30 June 2023 and 31 December 2022.
Liquidity information
( Euro 000's ) 30 Jun 2023 31 Dec 2022
Unrestricted cash and cash equivalents
at Group level 99,700 108,550
Unrestricted cash and cash equivalents
at Operation level 12,946 17,567
Restricted cash and cash equivalents at
Operation level - 331
-----------------------------------------
Consolidated cash and cash equivalents
(1) 112,646 126,448
----------------------------------------- ------------- ------------
Net cash position (1) 68,752 53,085
Working capital surplus 81,350 84,047
(1) Includes borrowings
Unrestricted cash and cash equivalents (which include cash at
both Group level and Operation level) as at 30 June 2023 decreased
to EUR112.6 million from EUR 126.4 million at 31 December 2022. The
decrease in cash balances is the result of net cash flow generated
in the period and payment of debt to fund development of the 50 MW
solar plant and other facilities. Restricted cash amounted at 31
December 2022 to EUR0.3 million was held in escrow, which
represented funds utilized by the Company to cover interest
payments of EUR9.6 million on 7 and 8 April 2022 (following the
trial in February and March 2022) and EUR1.1 million on 16 May 2022
to Astor under the Master Agreement. However, due to the settlement
reached with Astor on 17 May 2023 whereby Astor agreed to repay
EUR3.5 million of interest previously paid to it to finalise the
litigation, the previously restricted cash has now been released
and reversed.
Borrowings have decreased by EUR29.5 million between 31 December
2022 and 30 June 2023, primarily as a result of repayments made on
multiple fronts. These repayments include those made towards the
financing of the solar plant facility, as well as the repayment of
debt associated with operating facilities and the Astor facility.
The company's proactive approach to its balance sheet has led to
this substantial reduction in the borrowing balance, indicating
improved financial management and a strengthened position for the
company.
As of 30 June 2023, Atalaya reported a working capital surplus
of EUR81.4 million, compared with a working capital surplus of
EUR84.0 million at 31 December 2022. The main liability of the
working capital is trade payables related to Proyecto Riotinto
contractors and, to a lesser extent, short-term loans following the
settlement of credit facilities during Q2 2023.
The decrease in working capital resulted from higher inventory
levels and lower payable balances.
Overview of the Group's cash flows
( Euro 000's ) Three Three Six month Six month
month month period period
period period ended ended
ended ended 30 Jun 30 Jun
30 Jun 30 June 2023 2022
2023 2022
Cash flows / (used in) from
operating activities 18,888 (6,916) 31,250 21,382
Cash flows used in investing
activities (7,929) (19,771) (16,740) (27,323)
Cash flows (used in) / from
financing activities (18,936) 17,841 (28,367) 15,463
--------- --------- ---------- ----------
Net (decrease) / increase in
cash and cash equivalents (7,977) (8,846) (13,857) 9,522
---------------------------------- --------- --------- ---------- ----------
Net foreign exchange differences 1,277 7,521 55 10,094
---------------------------------- --------- --------- ---------- ----------
Total net cash flow for the
period (6,700) (1,325) (13,802) 19,616
Three months cash flows review
Cash and cash equivalents decreased by EUR6.7 million during the
three months ended 30 June 2023. This was due to the net results of
cash from operating activities amounting to EUR18.9 million, the
cash used in investing activities amounting to EUR7.9 million, the
cash used in financing activities totalling EUR18.9 million and net
foreign exchange differences of EUR1.3 million.
Cash generated from operating activities before working capital
changes was EUR14.7 million. Atalaya decreased its trade
receivables in the period by EUR9.9 million, increased its
inventory levels by EUR3.9 million and increased its trade payables
by EUR0.3 million.
Investing activities during the quarter consumed EUR7.9 million,
relating mainly to the 50 MW solar plant construction, tailings dam
project, E-LIX project and continuous enhancements in the
processing systems of the plant.
Financing activities during the quarter decreased by EUR18.9
million primarily due to the settlement of unsecured credit
facilities.
Six months cash flows review
Cash and cash equivalents decreased by EUR13.8 million during
the six months ended 30 June 2023. This was due to cash from
operating activities amounting to EUR31.3 million, cash used in
investing activities amounting to EUR16.7 million, cash used in
financing activities amounting to EUR28.4 million and net foreign
exchange differences of EUR0.1 million.
Cash generated from operating activities before working capital
changes was EUR38.9 million. Atalaya decreased its trade payables
in the period by EUR20.6 million, decreased its inventory levels by
EUR0.1 million and decreased its trade receivable balances by
EUR17.3 million.
Throughout the quarter, investing activities amounted to EUR16.7
million, with the majority of funds directed towards the
construction of the 50 MW solar plant, the tailings dam project,
the E-LIX project, and ongoing enhancements in the plant's
processing systems.
Financing activities during the six-month period ended 30 June
2023 decreased by EUR28.4 million driven by the repayment of
unsecured credit facilities.
Foreign exchange
Foreign exchange rate movements can have a significant effect on
Atalaya's operations, financial position and results. Atalaya's
sales are denominated in U.S. dollars ("USD"), while Atalaya's
operating expenses, income taxes and other expenses are mainly
denominated in Euros ("EUR") which is the functional currency of
the Group, and to a much lesser extent in British Pounds
("GBP").
Accordingly, fluctuations in the exchange rates can potentially
impact the results of operations and carrying value of assets and
liabilities on the balance sheet.
During the three and six months ended 30 June 2023, Atalaya
recognised a foreign exchange profit of EUR1.3 million and EUR55k,
respectively. Foreign exchange profits mainly related to changes in
the period in EUR and USD conversion rates, as all sales are cashed
and occasionally held in USD.
The following table summarises the movement in key currencies
versus the EUR:
( Euro 000's ) Three month Three month Six month Six month
period ended period period period
30 Jun 2023 ended 30 ended 30 ended 30
Jun 2022 Jun 2023 Jun 2022
Average rates for the
periods
GBP - EUR 0.8693 0.8485 0.8764 0.8424
USD - EUR 1.0887 1.0647 1.0807 1.0934
Spot rates as at
GBP - EUR 0.8583 0.8582 0.8583 0.8582
USD - EUR 1.0866 1.0387 1.0866 1.0387
6. Sustainability
Corporate Social Responsibility
The second quarter of the year marks further progress for
Atalaya and its wholly owned Fundación Atalaya Riotinto as we
continue to carry out several initiatives to fulfil our social
responsibilities.
In this context, the neighbouring municipalities have proposed
various projects to be funded by the Foundation, as part of the
signed partnership agreement. This agreement aims to provide
funding for collaborative efforts to address social, environmental,
and infrastructure challenges. During Q2 2023, Atalaya has
committed to financing the refurbishment of certain streets'
pavement and infrastructure in Nerva. Additionally, in Minas de
Riotinto, the Foundation will support the construction of a public
playground and related facilities. Furthermore, the Foundation will
provide funding for several local projects, including support for
NGOs like Athenea and AFA, dedicated to assisting individuals with
disabilities, as well as local social institutions such as the
Centro Cultural de Nerva. The Foundation has also shown support for
local football clubs and contributed to the publication of a book
on the history of Cuenca Minera and its British heritage.
Furthermore, the Foundation has completed the program for local
unemployed individuals: the Third Atalaya Mining Operators Course
has finished its practical sessions, offering comprehensive
training on various machinery. The group of 20 students has now
commenced a two-month internship period with the Riotinto Mine's
principal contractors. This hands-on experience will include
activities like blasting and hauling, alongside formal
qualifications for the participants. The previous program was a
success, with nearly half of the participants now employed by
different companies.
Health and Safety
The results for the first six months of 2023, compared to the
same period in 2022, show similar figures for the Severity Index
(0.07). However, there has been an increase in the Frequency Index
to 5.79, with one of the accidents classified as a major
accident.
Furthermore, during the quarter, Atalaya conducted an internal
audit for health and safety management in accordance with ISO
45001:2018.
In addition, Atalaya has updated its internal procedure for
controlling drugs and preventing work under the influence of
psychoactive substances and has increased the fine for a positive
result.
In terms of Field Leadership activity, 45 individuals have been
incorporated after completing training in June.
The training plan for Atalaya employees is currently focused on
basic life support and the rules of action in the event of health
emergencies at the company. An information program is also
scheduled for the summer months, as in previous years, to address
working in high temperatures.
Environment
During the second quarter of 2023, the environmental department
continued to execute actions for environmental monitoring of the
company's activities and the management of the natural environment.
Key points from the quarter:
-- No environmental incidents were recorded at Atalaya Riotinto during this quarter.
-- A total rainfall of 65.3 l/m(2) was recorded in Q2 2023,
which was approximately 19% higher than the same period in the
previous year. The total rain collected for the hydrological year
(October 2022 to September 2023) was 405.7 l/m2, which is 10% more
than the rainfall recorded in the previous hydrological year during
the same period.
-- On 18 April 2023, the substantial modification of the Unified
Environmental Authorization (Environmental permit) was granted.
-- Mandatory reports were submitted to the Environmental
Administration, including the Annual report of air quality in
nearby towns (Minas de Riotinto, La Dehesa, and Nerva) and the
Annual Water Balance Report.
-- Additional measures from the action plan against dust
continued to be implemented, including intensified periodic
irrigation, new coordination measures, and comprehensive monitoring
of the emissions generated in the operation.
-- All regular internal controls of diffuse emissions into the
atmosphere have been conducted, and the results are within the
limit values (waiting for June results). Furthermore, Annual
External Control, Point, and Diffuse Emissions monitoring were
carried out in May, with results still pending. The rest of the
periodic and mandatory controls have been carried out without
incidents. Additionally, several reports were submitted to the
Administration bodies during the quarter.
-- Daily environmental inspections were performed, with a focus
on chemical storage and handling, housekeeping, waste management,
uncontrolled releases, and environmentally friendly practices
conducted by ARM's and contractors' personnel. Regular inspections
of dust control and drainage systems were also carried out. A total
of 77 inspections were conducted during the second quarter,
covering the plant, mine area, and the contractors' camps.
7. Risk Factors
Due to the nature of Atalaya's business in the mining industry,
the Group is subject to various risks that could materially impact
the future operating results and could cause actual events to
differ materially from those described in forward-looking
statements relating to Atalaya. Readers are encouraged to read and
consider the risk factors detailed in Atalaya's audited,
consolidated financial statements for the year ended 31 December
2022.
The Company continues to monitor the principal risks and
uncertainties that could materially impact the Company's results
and operations, including the areas of increasing uncertainty such
as inflationary pressure on goods and services required for the
business and geopolitical developments in Ukraine.
8. Critical accounting policies, estimates, judgements, assumptions and accounting changes
The preparation of Atalaya's Financial Statements in accordance
with IFRS requires management to make estimates, judgements and
assumptions that affect amounts reported in the Financial
Statements and accompanying notes. There is a full discussion and
description of Atalaya's critical accounting policies in the
audited consolidated financial statements for the year ended 31
December 2022.
As at 30 June 2023, there are no significant changes in critical
accounting policies or estimates to those applied in 2022.
9. Other Information
Additional information about Atalaya Mining Plc. is available at
www.atalayamining.com
Atalaya will audit the Financial Statements for the period ended
30 June 2023 and the audited financial statements will be published
on Atalaya's website in due course.
Unaudited interim condensed consolidated financial statements on
subsequent pages.
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2023 and 2022
( Euro 000's ) Note Three Three Six Six
month month month month
period period period period
ended ended ended ended
30 Jun 30 Jun 30 Jun 30 Jun
2023 2022 2023 2022
Revenue 4 79,051 93,418 170,222 179,669
Operating costs and mine site administrative
expenses (57,364) (78,021) (120,291) (132,632)
Mine site depreciation and amortization (9,411) (8,785) (18,173) (16,305)
--------------------------------------------- --------- --------- ---------- ----------
Gross profit 12,276 6,612 31,758 30,732
Administration and other expenses (3,612) (868) (5,645) (4,451)
Share-based benefits 14 (254) (179) (330) (357)
Exploration expenses (2,069) 88 (3,602) (364)
Care and maintenance expenditure (391) (55) (686) (770)
--------------------------------------------- --------- --------- ---------- ----------
Operating profit 5,950 5,598 21,495 24,790
Other income 345 286 443 286
Net foreign exchange (loss)/gain 3 1,277 7,521 55 10,094
Net finance income/(costs) 5 3,480 (626) 2,636 (941)
--------------------------------------------- --------- --------- ---------- ----------
Profit before tax 11,052 12,779 24,629 34,229
Tax 6 (1,848) (930) (4,321) (4,123)
--------------------------------------------- --------- --------- ---------- ----------
Profit for the period 9,204 11,849 20,308 30,106
--------------------------------------------- --------- --------- ---------- ----------
Profit for the period attributable to:
- Owners of the parent 7 9,542 12,058 20,911 30,882
- Non-controlling interests (338) (209) (603) (776)
9,204 11,849 20,308 30,106
--------- --------- ---------- ----------
Earnings per share from operations attributable to equity holders
of the parent during the period:
Basic earnings per share (EUR cents per
share) 7 6.8 8.6 15.0 22.1
--------- --------- ---------- ----------
Fully diluted earnings per share (EUR cents
per share) 7 6.6 8.4 14.6 21.7
--------- --------- ---------- ----------
Profit for the period 9,204 11,849 20,308 30,106
Other comprehensive income that will not be reclassified to profit
or loss in subsequent periods (net of tax):
Change in fair value of financial assets through
other comprehensive income 'OCI' (11) (6) (5) (6)
Total comprehensive income for the period 9,193 11,843 20,303 30,100
--------- --------- ---------- ----------
Total comprehensive income for the period attributable
to:
- Owners of the parent 7 9,531 12,052 20,906 30,876
- Non-controlling interests (338) (209) (603) (776)
--------- --------- ---------- ----------
9,193 11,843 20,303 30,100
--------- --------- ---------- ----------
The notes on the subsequent pages are an integral part of these
Unaudited Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Financial
Position
(All amounts in Euro thousands unless otherwise stated)
As at 31 March 2023 and 2022
(Euro 000's) Note 30 Jun 31 Dec 2022
2023
Assets Unaudited Audited
Non-current assets
Property, plant and equipment 8 366,527 354,908
Intangible assets 9 51,619 53,830
Trade and other receivables 12 21,848 16,362
Non-current financial assets 2.3 1,101 1,101
Deferred tax asset 7,033 7,293
-------------------------------
448,128 433,494
---------- ------------
Current assets
Inventories 10 38,762 38,841
Trade and other receivables 12 41,341 64,155
Tax refundable 100 100
Other financial assets 2.3 28 33
Cash and cash equivalents 13 112,646 126,448
-------------------------------
192,877 229,577
------------------------------- ---------- ------------
Total assets 641,005 663,071
---------- ------------
Equity and liabilities
Equity attributable to owners
of the parent
Share capital 14 13,596 13,596
Share premium 14 319,411 319,411
Other reserves 15 70,131 69,805
Accumulated profit 86,650 70,483
-------------------------------
489,788 473,295
------------------------------- ---------- ------------
Non-controlling interests (7,601) (6,998)
-------------------------------
Total equity 482,187 466,297
---------- ------------
Liabilities
Non-current liabilities
Trade and other payables 16 3,412 2,015
Provisions 17 27,114 24,083
Lease liabilities 19 4,128 4,378
Borrowings 18 12,637 20,768
------------------------------- ---------- ------------
47,291 51,244
Current liabilities
Trade and other payables 16 70,199 90,022
Lease liabilities 19 504 536
Borrowings 18 31,257 52,595
Dividend payable 11 4,956 -
Current provisions 17 722 952
Current tax liabilities 3,889 1,425
------------------------------- ---------- ------------
111,527 145,530
------------------------------- ---------- ------------
Total liabilities 158,818 196,774
------------------------------- ---------- ------------
Total equity and liabilities 641,005 663,071
The notes on the subsequent pages are an integral part of these
Unaudited Interim Condensed Consolidated Financial Statements.
Atalaya will audit the Financial Statements for the period ended
30 June 2023 and the audited financial statements will be published
on Atalaya's website in due course.
Unaudited Interim Condensed Consolidated Statements of Changes
in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2023 and 2022
(Euro 000's) Note Share Share Other Accum. Total NCI Total
capital premium reserves Profits equity
(1)
At 1 January 2023 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
Adjustment prior year - - - (12) (12) - (12)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
Opening balance adjusted 13,596 319,411 69,805 70,471 473,283 (6,998) 466,285
Profit for the period - - - 20,911 20,911 (603) 20,308
Change in fair value of
financial assets through
OCI - - (5) - (5) - (5)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
Total comprehensive income - - (5) 20,911 20,906 (603) 20,303
Transactions with owners
Recognition of share-based
payments 15 - - 331 - 331 - 331
Other changes in equity - - - 224 224 - 224
Dividends 11 - - - (4,956) (4,956) - (4,956)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
At 30 June 2023 13,596 319,411 70,131 86,650 489,788 (7,601) 482,187
(Euro 000's) Note Share Share Other Accum. Total NCI Total
capital premium reserves Profits equity
(1)
At 1 January 2022 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
Adjustment prior year - - - (53) (53) - (53)
--------- --------- ---------- --------- -------- -------- --------
Opening balance adjusted 13,447 315,916 52,690 58,701 440,754 (4,909) 435,845
Profit for the period - - - 30,882 30,882 (776) 30,106
Change in fair value of
financial assets through
OCI - - (6) - (6) - (6)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
Total comprehensive income - - (6) 30,882 30,876 (776) 30,100
Transactions with owners
Issuance of share capital 14 149 3,495 - - 3,644 - 3,644
Recognition of share-based
payments 15 - - 12,800 (12,800) - - -
Recognition of depletion
factor 15 - - 357 - 357 - 357
Recognition of non-distributable
reserve 15 - - 316 (316) - - -
Recognition of-distributable
reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - (292) (1) (293) - (293)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
At 30 June 2022 13,596 319,411 68,591 73,740 475,338 (5,685) 469,653
(Euro 000's) Note Share Share Other Accum. Total NCI Total
capital premium reserves Profits equity
(1)
Audited
At 1 January 2022 13,447 315,916 52,690 58,754 440,807 (4,909) 435,898
Adjustment prior year - - - (53) (53) - (53)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
Opening balance adjusted 13,447 315,916 52,690 58,701 440,754 (4,909) 435,845
Profit for the period - - - 33,155 33,155 (2,229) 30,926
Change in fair value of
financial assets through
OCI - - (6) - (6) - (6)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
Total comprehensive income - - (6) 33,155 33,149 (2,229) 30,920
Transactions with owners
Issuance of share capital 14 149 3,495 - - 3,644 - 3,644
Recognition of depletion
factor 15 - - 12,800 (12,800) - - -
Recognition of share-based
payments 15 - - 1,279 - 1,279 - 1,279
Recognition of non-distributable
reserve 15 - - 316 (316) - - -
Recognition of distributable
reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - - (432) (432) 140 (292)
Dividends - - - (5,099) (5,099) - (5,099)
---------------------------------- --------- --------- ---------- --------- -------- -------- --------
At 31 December 2022 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297
(1) The share premium reserve is not available for
distribution
The notes on subsequent pages are an integral part of these
Unaudited Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statement of Cash
Flows
(All amounts in Euro thousands unless otherwise stated)
For to the period ended 30 June 2023 and 2022
(Euro 000's) Note Three Three Six Six month
month month month period
period period period ended
ended ended ended 30 Jun
30 Jun 30 June 30 Jun 2022
2023 2022 2023
Cash flows from operating activities
Profit before tax 11,052 12,779 24,629 34,229
Adjustments for:
Depreciation of property, plant
and equipment 8 8,236 7,629 15,914 14,118
Amortisation of intangibles 9 1,175 1,156 2,259 2,187
Recognition of share-based payments 15 254 179 330 357
Interest income 5 (4,171) (14) (4,397) (15)
Interest expense 5 684 (238) 1,194 -
Unwinding of discounting on mine
rehabilitation provision 17 - 396 553 469
Other provisions 17 234 - 287 -
Net foreign exchange differences 3 (1,277) (7,521) (55) (10,094)
Unrealised foreign exchange loss
on financing activities (1,446) (45) (1,850) (1)
---------------------------------------- --------- --------- --------- ==========
Cash inflows from operating activities
before working capital changes 14,741 14,321 38,864 41,250
Changes in working capital:
Inventories 10 (3,851) (638) 79 (13,666)
Trade and other receivables 12 9,893 (13,128) 17,328 (7,951)
Trade and other payables 16 347 (5,966) (20,647) 3,694
Provisions 17 (146) - (294)
----------------------------------------
Cash flows from operations 20,984 (5,411) 35,330 23,327
Tax paid (1,406) (1,261) (2,873) (1,458)
Interest on leases liabilities 5 (6) 2 (13) (3)
Interest paid 5 (684) (246) (1,194) (484)
----------------------------------------
Net cash from operating activities 18,888 (6,916) 31,250 21,382
Cash flows from investing activities
Purchase of property, plant and
equipment 9 (11,678) (18,781) (20,523) (26,032)
Purchase of intangible assets 10 (17) (1,004) (48) (1,306)
Interest received 5 3,766 14 3,831 15
---------------------------------------- --------- --------- --------- ==========
Net cash used in investing activities (7,929) (19,771) (16,740) (27,323)
Cash flows from financing activities
Lease payments 19 (144) (155) (295) (315)
Net (Repayments) from borrowings 18 (18,792) 17,957 (28,072) 12,135
Proceeds from issuance of shares 14 - 39 - 3,643
----------------------------------------
Net cash from financing activities (18,936) 17,841 (28,367) 15,463
Net (decrease) / increase in
cash and cash equivalents (7,977) (8,846) (13,857) 9,522
Net foreign exchange difference 3 1,277 7,521 55 10,094
Cash and cash equivalents :
At beginning of the period 119,346 128,458 126,448 107,517
---------------------------------------- --------- --------- --------- ==========
At end of the period 112,646 127,133 112,646 127,133
The notes on the subsequent pages are an integral part of these
Unaudited Interim Condensed Consolidated Financial Statements.
Notes to the Unaudited Interim Condensed Consolidated Financial
Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 June 2023 and 2022
1. Incorporation and summary of business
Atalaya Mining Plc (the "Company") was incorporated in Cyprus on
17 September 2004 as a private company with limited liability under
the Companies Law, Cap. 113 and was converted to a public limited
liability company on 26 January 2005. Its registered office is at 1
Lampousa Street, Nicosia, Cyprus.
The Company was listed on AIM of the London Stock Exchange in
May 2005 under the symbol ATYM. The Company continued to be listed
on AIM as at 30 June 2022.
On 20 February 2023, Atalaya announced that applied a voluntary
delisting of its ordinary shares from the Toronto Stock Exchange
(the "TSX"). Ordinary shares in the Company continue to trade on
the AIM market of the London Stock Exchange under the symbol
"ATYM". Delisting from the TSX took effect at the close of trading
on 20 March 2023. Furthermore, Atalaya ceased to be a reporting
issuer in Canadian jurisdictions on 26 June 2023.
Additional information about Atalaya Mining Plc is available at
www.atalayamining.com as per requirement of AIM rule 26.
Change of name and share consolidation
Following the Company's Extraordinary General Meeting ("EGM") on
13 October 2015, the change of name from EMED Mining Public Limited
to Atalaya Mining Plc became effective on 21 October 2015. On the
same day, the consolidation of ordinary shares came into effect,
whereby all shareholders received one new ordinary share of nominal
value Stg GBP0.075 for every 30 existing ordinary shares of nominal
value Stg GBP0.0025.
Principal activities
Atalaya is a European mining and development company. The
strategy is to evaluate and prioritise metal production
opportunities in several jurisdictions throughout the well-known
belts of base and precious metal mineralisation in Spain, elsewhere
in Europe and Latin America.
The Group has interests in four mining projects: Proyecto
Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa
Morena. In addition, the Group has an earn-in agreement to acquire
three investigation permits at Proyecto Riotinto Este.
Proyecto Riotinto
The Company owns and operates through a wholly owned subsidiary,
"Proyecto Riotinto", an open-pit copper mine located in the Iberian
Pyrite Belt, in the Andalusia region of Spain, approximately 65 km
northwest of Seville. A brownfield expansion of this mine was
completed in 2019 and successfully commissioned by Q1 2020.
Proyecto Touro
The Group has an initial 10% stake in Cobre San Rafael, S.L.,
the owner of Proyecto Touro, as part of an earn-in agreement which
will enable the Group to acquire up to 80% of the copper project.
Proyecto Touro is located in Galicia, north-west Spain. Proyecto
Touro is currently in the permitting process.
In November 2019, Atalaya executed the option to acquire 12.5%
of Explotaciones Gallegas del Cobre, S.L. the exploration property
around Touro, with known additional reserves, which will provide
high potential to the Proyecto Touro.
Proyecto Masa Valverde
On 21 October 2020, the Company announced that it entered into a
definitive purchase agreement to acquire 100% of the shares of
Cambridge Mineria España, S.L. (since renamed Atalaya Masa
Valverde, S.L.U.), a Spanish company which fully owns the Masa
Valverde polymetallic project located in Huelva (Spain). Proyecto
Masa Valverde is currently in the permitting process.
Proyecto Riotinto East
In December 2020, Atalaya entered into a Memorandum of
Understanding with a local private Spanish company to acquire a
100% beneficial interest in three investigation permits (known as
Peñas Blancas, Cerro Negro and Herreros investigation permits),
which cover approximately 12,368 hectares and are located
immediately east of Proyecto Riotinto.
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51%
interest in Rio Narcea Nickel, S.L., which owns 17 investigation
permits. The acquisition also provided a 100% interest in three
investigation permits that are also located along the Ossa- Morena
Metallogenic Belt. In Q3 2022 Atalaya increased its ownership
interest in POM to 99.9%, up from 51%, following completion of a
capital increase that will fund exploration activities.
2. Basis of preparation and accounting policies
2.1 Basis of preparation
(a) Overview
These condensed interim financial statements are unaudited.
The unaudited interim condensed consolidated financial
statements for the period ended 30 June 2023 have been prepared in
accordance with International Accounting Standard 34: Interim
Financial Reporting. IFRS comprise the standard issued by the
International Accounting Standard Board ("IASB"), and IFRS
Interpretations Committee ("IFRICs") as issued by the IASB.
Additionally, the unaudited interim condensed consolidated
financial statements have also been prepared in accordance with the
IFRS as adopted by the European Union (EU), using the historical
cost convention and have been prepared on a historical cost basis
except for the revaluation of certain financial instruments that
are measured at fair value at the end of each reporting period, as
explained below.
These unaudited interim condensed consolidated financial
statements include the financial statements of the Company and its
subsidiary undertakings. They have been prepared using accounting
bases and policies consistent with those used in the preparation of
the consolidated financial statements of the Company and the Group
for the year ended 31 December 2022. These unaudited interim
condensed consolidated financial statements do not include all the
disclosures required for annual financial statements, and
accordingly, should be read in conjunction with the consolidated
financial statements and other information set out in the Group's
annual report for the year ended 31 December 2022.
(b) Going concern
These unaudited condensed interim consolidated financial
statements have been prepared based on accounting principles
applicable to a going concern which assumes that the Group will
realise its assets and discharge its liabilities in the normal
course of business. Management has carried out an assessment of the
going concern assumption and has concluded that the Group will
generate sufficient cash and cash equivalents to continue operating
for the next twelve months.
Management continues to monitor the impact of geopolitical
developments. Currently no significant impact is expected in the
operations of the Group.
2.2 New standards, interpretations and amendments adopted by the
Group
The accounting policies adopted in the preparation of the
unaudited condensed interim consolidated financial statements are
consistent with those followed in the preparation of the Group's
annual consolidated financial statements for the year ended 31
December 2022, except for the adoption of new standards effective
as of 1 January 2023. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet
effective.
Several amendments and interpretations apply for the first time
in 2023, but do not have a material impact on the unaudited
condensed interim consolidated financial statements of the
Group.
IFRS 17 Insurance Contracts
In May 2017, the IASB issued IFRS 17 Insurance Contracts, a
comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure.
IFRS 17 replaces IFRS 4 Insurance Contracts that was issued in
2005. IFRS 17 applies to all types of insurance contracts (i.e.,
life, non-life, direct insurance and re-insurance), regardless of
the type of entities that issue them, as well as to certain
guarantees and financial instruments with discretionary
participation features; a few scope exceptions will apply. The
overall objective of IFRS 17 is to provide an accounting model for
insurance contracts that is more useful and consistent for
insurers. In contrast to the requirements in IFRS 4, which are
largely based on grandfathering previous local accounting policies,
IFRS 17 provides a comprehensive model for insurance contracts,
covering all relevant accounting aspects. IFRS 17 is based on a
general model, supplemented by:
-- A specific adaptation for contracts with direct participation
features (the variable fee approach)
-- A simplified approach (the premium allocation approach) mainly for short-duration contracts
The amendments had no impact on the Group's unaudited condensed
interim consolidated financial statements.
Definition of Accounting Estimates - Amendments to IAS 8
The amendments to IAS 8 clarify the distinction between changes
in accounting estimates, and changes in accounting policies and the
correction of errors. They also clarify how entities use
measurement techniques and inputs to develop accounting
estimates.
The amendments had no impact on the Group's unaudited condensed
interim consolidated financial statements.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS
Practice Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements provide guidance and examples to help
entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting
policy disclosures that are more useful by replacing the
requirement for entities to disclose their 'significant' accounting
policies with a requirement to disclose their 'material' accounting
policies and adding guidance on how entities apply the concept of
materiality in making decisions about accounting policy
disclosures.
The amendments had no impact on the Group's unaudited condensed
interim consolidated financial statements. but are expected to
affect the accounting policy disclosures in the Group's annual
consolidated financial statements.
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
The amendments to IAS 12 Income Tax narrow the scope of the
initial recognition exception, so that it no longer applies to
transactions that give rise to equal taxable and deductible
temporary differences such as leases and decommissioning
liabilities. The amendments had no impact on the Group's unaudited
condensed interim consolidated financial statements.
2.3 Fair value estimation
The fair values of the Group's financial assets and liabilities
approximate their carrying amounts at the reporting date.
The fair value of financial instruments traded in active
markets, such as publicly traded trading and other financial assets
is based on quoted market prices at the reporting date. The quoted
market price used for financial assets held by the Group is the
current bid price. The appropriate quoted market price for
financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in
an active market is determined by using valuation techniques. The
Group uses a variety of methods, such as estimated discounted cash
flows, and makes assumptions that are based on market conditions
existing at the reporting date.
Fair value measurements recognised in the consolidated statement
of financial position
The following table provides an analysis of financial
instruments that are measured subsequent to initial recognition at
fair value, Grouped into Levels 1 to 3 based on the degree to which
the fair value is observable.
-- Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
-- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
-- Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
2.3 Fair value estimation
Financial assets or liabilities Level Level Level Total
(Euro 000's) 1 2 3
30 Jun 2023
Other financial assets
Financial assets at FV through
OCI 28 - 1,101 1,129
Trade and other receivables
Receivables (subject to provisional
pricing) - 8,787 - 8,787
Total 28 8,797 1,101 9,916
------------------------------------- ------ ------- ------ -------
31 Dec 2022
Other financial assets
Financial assets at FV through
OCI 38 - 1,101 1,139
Trade and other receivables
Receivables (subject to provisional
pricing) - 11,669 - 11,669
Total 38 11,669 1,101 12,808
------------------------------------- ------ ------- ------ -------
2.4 Critical accounting estimates and judgements
The preparation of the unaudited interim condensed consolidated
financial statements require management to make judgements,
estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities at the
date of the consolidated financial statements. Estimates and
assumptions are continually evaluated and are based on management's
experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount
of assets or liabilities affected in future periods.
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation, and a reliable estimate of the amount can be made. If
the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting
is used, the increase in the provision due to the passage of time
is recognised as a finance cost.
A full analysis of critical accounting estimates and judgements
is set out in Note 3.3 of the 2022 audited financial
statements.
3. Business and geographical segments
Business segments
The Group has only one distinct business segment, being that of
mining operations, which include mineral exploration and
development.
Copper concentrates produced by the Group are sold to three
off-takers as per the relevant offtake agreements. In addition, the
Group has spot agreements for the concentrates not committed to
off-takers.
Geographical segments
The Group's mining activities are located in Spain. The
commercialisation of the copper concentrates produced in Spain is
carried out through Cyprus. Sales transactions to related parties
are on arm's length basis in a similar manner to transaction with
third parties. Accounting policies used by the Group in different
locations are the same as those contained in Note 2.
(Euro 000's) Cyprus Spain Other Total
Three month period ended 30 Jun 2023
Revenue - from external customers 7,283 71,768 - 79,051
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) 1,964 13,759 (17) 15,706
Depreciation/amortisation charge - (9,411) - (9,411)
Net foreign exchange gain (171) 1,448 - 1,277
Finance income 131 4,039 - 4,170
Finance cost - (690) - (690)
Profit before tax 1,924 9,145 (17) 11,052
-------- ---------- ------- ----------
Tax (820) (1,028) - (1,848)
-------- ---------- ------- ----------
Profit/(loss) for the period 1,104 8,117 (17) 9,204
-------- ---------- ------- ----------
Six month period ended 30 Jun 2023
Revenue - from external customers 13,872 156,350 - 170,222
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) 5,821 34,307 (17) 40,111
Depreciation/amortisation charge - (18,173) - (18,173)
Net foreign exchange gain (457) 512 - 55
Finance income 201 4,195 - 4,396
Finance cost - (1,760) - (1,760)
Profit/(loss) before tax 5,565 19,081 (17) 24,629
-------- ---------- ------- ----------
Tax (1,589) (2,732) - (4,321)
-------- ---------- ------- ----------
Profit/(loss) for the period 3,976 16,349 (17) 20,308
-------- ---------- ------- ----------
Total assets 76,642 539,615 24,748 641,005
Total liabilities (7,928) (150,890) - (158,818)
-------- ---------- ------- ----------
Depreciation of property, plant and
equipment - 15,914 - 15,914
-------- ---------- ------- ----------
Amortisation of intangible assets - 2,259 - 2,259
-------- ---------- ------- ----------
Total net additions of non-current
assets - 37,343 - 37,343
-------- ---------- ------- ----------
(Euro 000's) Cyprus Spain Other Total
Three month period ended 30 Jun 2022
Revenue - from external customers 5,910 87,508 - 93,418
======== ========= ========== ==========
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) 3,352 11,324 (7) 14,669
Depreciation/amortisation charge - (8,785) - (8,785)
Net foreign exchange loss 4,146 3,375 - 7,521
Finance income - 14 - 14
Finance cost - (640) - (640)
Profit before tax 7,498 5,288 (7) 12,779
======== ========= ========== ==========
Tax (892) (38) - (930)
==========
Profit for the period 6,606 5,250 (7) 11,849
==========
Six month period ended 30 Jun 2022
Revenue - from external customers 17,740 161,929 - 179,669
======== ========= ========== ==========
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) 12,319 29,076 (14) 41,381
Depreciation/amortisation charge - (16,305) - (16,305)
Net foreign exchange gain 5,316 4,778 - 10,094
Finance income - 15 - 15
Finance cost - (956) - (956)
Profit/(loss) before tax 17,635 16,608 (14) 34,229
======== ========= ========== ==========
Tax (1,916) (2,207) - (4,123)
==========
Profit for the period 15,719 14,401 (14) 30,106
==========
Total assets 85,742 553,321 1,175 640,238
======== ========= ========== ==========
Total liabilities (3,973) 133,932 (300,544) (170,585)
======== ========= ========== ==========
Depreciation of property, plant and
equipment - (14,188) - (14,188)
======== ========= ========== ==========
Amortisation of intangible assets - (2,187) - (2,187)
======== ========= ========== ==========
Total net additions of non-current
assets - 39,645 - 39,645
======== ========= ========== ==========
Revenue represents the sales value of goods supplied to
customers; net of value added tax. The following table summarises
sales to customers with whom transactions have individually
exceeded 10.0% of the Group's revenues.
(Euro 000's) Six month Six month
period ended period ended
30 Jun 2023 30 Jun 2022
Segment EUR'000 Segment EUR'000
--------------------------- -------------- -------- --------------
Offtaker 1 Copper 36,667 Copper 43,005
Offtaker 2 Copper 39,553 Copper 60,566
Offtaker 3 Copper 93,985 Copper 76,086
4. Revenue
(Euro 000's) Three Three Six month Six month
month month period period
period period ended ended
ended ended 30 Jun 30 Jun
30 Jun 30 Jun 2023 2022
2023, 2022
Revenue from contracts with
customers (1) 85,602 103,909 173,915 185,678
Fair value losses relating
to provisional pricing within
sales (2) (6,551) (10,491) (3,693) (6,009)
================================ ======== ========= ========== ==========
Total revenue 79,051 93,418 170,222 179,669
All revenue from copper concentrate is recognised at a point in
time when the control is transferred. Revenue from freight services
is recognised over time as the services are provided.
(1) Included within Q2 2023 and H1 2023 revenues are transaction
prices, which relate to the freight services provided by the Group
to the customers arising from the sales of copper concentrate under
CIF incoterm, of EUR2.1 million (Q2 2022: EUR2.9 million) and
EUR4.5 million (H1 2022: EUR4.3 million), respectively.
(2) Provisional pricing impact represents the change in fair
value of the embedded derivative arising on sales of
concentrate.
5. Net Finance Income/(Costs)
(Euro 000's) Three Three Six Six
month month month month
period period period period
ended ended ended ended
30 Jun 30 June 30 Jun 30 Jun
2023 2022 2023 2022
Interest expense
Other interest (684) (246) (1,194) (484)
Interest on lease liabilities (6) 2 (13) (3)
Unwinding of discount on mine rehabilitation
provision (Note 17) - (396) (553) (469)
Interest income
Financial interests (1) 340 14 566 15
Other received interests (2) 3,830 - 3,830 -
3,480 (626) 2,636 (941)
----------------------------------------------- -------- --------- -------- --------
(1) Interest income relates to interest received on bank
balances.
(2) Interest income comprise mainly the interest received of
EUR3.5 million as a result of the agreement reached with Astor in
May 2023.
6. Tax
The Group calculates the period income tax expense using the tax
rate that would be applicable to the expected total annual
earnings. The major components of income tax expense in the
unaudited interim condensed consolidated statement of profit or
loss are:
Three Three Six Six months
months months months ended
ended 30 ended ended 30 Jun
Jun 2023 30 Jun 30 Jun 2022
(Euro 000's) 2022 2023
Income taxes
Current income tax expense (1,848) (930) (4,321) (4,123)
Income tax expense recognised
in statement of profit and loss (1,848) (930) (4,321) (4,123)
---------- -------- ---------- -----------
7. Earnings per share
The calculation of the basic and fully diluted loss per share
attributable to the ordinary equity holders of the Company is based
on the following data:
Three Three Six months Six months
months months ended ended
ended ended 30 Jun 30 Jun
30 Jun 30 Jun 2023 2022
(Euro 000's) 2023 2022
Profit attributable to equity
holders of the parent 9,542 12,058 20,911 30,882
-------- -------- ----------- -----------
Weighted number of ordinary shares
for the purposes of basic earnings
per share (000's) 139,880 139,859 139,880 139,634
-------- -------- ----------- -----------
Basic profit per share (EUR cents/share) 6.8 8.6 15.0 22.1
-------- -------- ----------- -----------
Weighted number of ordinary shares
for the purposes of fully diluted
earnings per share (000's) 144,028 143,736 143,705 142,235
-------- -------- ----------- -----------
Fully diluted profit per share
(EUR cents/share) 6.6 8.4 14.6 21.7
-------- -------- ----------- -----------
At 30 June 2023 there are nil warrants (Note 14) and 4,848,500
options (Note 14) (2022: nil warrants and 3,543,500 options) which
have been included when calculating the weighted average number of
shares for 2022.
8. Property, plant and equipment
(Euro 000's) Land Right-of-use Plant Assets Deferred Other Total
and assets and under mining assets
buildings machinery construction costs (3)
(1) (2)
Cost
At 1 January 2022 65,003 7,076 283,346 22,860 51,667 801 430,753
Additions 2,383 - 621 22,334 691 - 26,029
Reclassifications 15,300 - 4,979 (20,279) - - -
Increase in rehab.
Provision 1,107 - - - - - 1,107
Advances 3 - - - - - 3
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 30 June 2022 83,796 7,076 288,946 24,915 52,358 801 457,892
Additions - - 641 27,139 - - 27,780
Increase in rehab.
Provision 620 - - - - - 620
Reclassifications - - 1,748 (1,819) - 71 -
Advances 100 - - - - - 100
Write-off (4,190) - - - - - (4,190)
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 31 December 2022 80,326 7,076 291,335 50,235 52,358 872 482,202
Additions 36 - 4,525 15,825 4,572 24 24,982
Increase in rehab.
Provision 2,541 - - - - - 2,541
Reclassifications - - 18,413 (18,413) - - -
At 30 June 2023 82,913 7,076 314,273 47,647 56,930 896 509,735
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
Depreciation
At 1 January 2022 16,026 1,546 67,991 - 11,380 714 97,657
Charge for the period 2,157 158 9,994 - 1,797 12 14,118
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 30 June 2022 18,183 1,704 77,985 - 13,177 726 111,775
Charge for the period 2,271 294 11,197 - 1,744 13 15,519
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 31 December 2022 20,454 1,998 89,182 - 14,921 739 127,294
Charge for the period 2,057 278 11,717 - 1,855 7 15,914
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 30 June 2023 22,511 2,276 100,899 - 16,776 746 143,208
Net book value
At 30 June 2023 60,402 4,800 213,374 47,647 40,154 150 366,527
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 31 December 2022 59,872 5,078 202,153 50,235 37,437 133 354,908
(1) Assets under construction at 30 June 2023 were EUR47.6
million (2022: EUR24.9 million) which include sustaining capital
expenditures, tailings dams project, ELIX plant and solar
plant.
(2) Stripping costs
(3) Includes motor vehicles, furniture, fixtures and office
equipment which are depreciated over 5-10 years.
(4) Increase in lands related to the rehabilitation
provision
The above fixed assets are mainly located in Spain.
9. Intangible assets
(Euro 000's) Permits Licences, Total
R&D and software
Cost
At 1 January 2022 80,358 8,595 88,953
Additions 1,306 - 1,306
----------------------- -------- ------------------ -------
At 30 June 2022 81,664 8,595 90,259
Additions (409) 47 (362)
----------------------- -------- ------------------ -------
At 31 December 2022 81,255 8,642 89,897
Additions 48 - 48
----------------------- -------- ------------------ -------
At 30 June 2023 81,303 8,642 89,945
Amortisation
At 1 January 2022 23,214 8,371 31,585
Charge for the period 2,155 32 2,187
----------------------- -------- ------------------ -------
At 30 June 2022 25,369 8,403 33,772
Charge for the period 2,258 37 2,295
----------------------- -------- ------------------ -------
At 31 December 2022 27,627 8,440 36,067
Charge for the period 2,234 25 2,259
----------------------- -------- ------------------ -------
At 30 June 2023 29,861 8,465 38,326
Net book value
At 30 June 2023 51,442 177 51,619
----------------------- -------- ------------------ -------
At 31 December 2022 53,628 202 53,830
Increase of permits in 2023 related to the capitalisation of
Proyecto Masa Valverde.
The ultimate recovery of balances carried forward in relation to
areas of interest or all such assets including intangibles is
dependent on successful development, and commercial exploitation,
or alternatively the sale of the respective areas.
The Group conducts impairment testing on an annual basis unless
indicators of impairment are not present at the reporting date.
10. Inventories
(Euro 000's) 30 Jun 2023 31 Dec 2022
Finished products 8,197 4,547
Materials and supplies 27,158 31,330
Work in progress 3,407 2,964
Total inventories 38,762 38,841
------------------------ ------------- ------------
As of 30 June 2023, copper concentrate produced and not sold
amounted to 7,291 tonnes (31 Dec 2022: 3,529 tonnes). Accordingly,
the inventory for copper concentrate was EUR8.2 million (31 Dec
2022: EUR4.5 million).
Materials and supplies relate mainly to machinery spare parts.
Work in progress represents ore stockpiles, which is ore that has
been extracted and is available for further processing.
11. Dividends payable
Cash dividends payable at the end of the period:
(Euro 000's) 30 Jun 2023 31 Dec 2022
Dividend payable(*) 4,956 -
Fully paid ordinary shares carry one vote per share and carry
the right to dividends.
(*) In March 2023, the Board of Directors proposed a final
dividend for 2022 of US$0.0385 per ordinary share, which was
equivalent to approximately 3.15 pence per share. Following the
approval of Resolution 10 by the Company's shareholders at its 2023
Annual General Meeting, which took place on 28 June 2023, the 2022
final dividend was paid on 8 August 2023 (Note 26).
12. Trade and other receivables
(Euro 000's) 30 Jun 31 Dec 2022
2023
Non-current
Deposits 310 256
Loans 18,848 12,865
Other non-current receivables 2,690 3,241
----------------------------------------------- -------- ------------
21,848 16,362
Current
Trade receivables at fair value - subject
to provisional pricing 7,066 14,757
Trade receivables from shareholders at fair
value - subject to provisional pricing (Note
22.3) 1,721 12,800
Other receivables from related parties at
amortised cost (Note 22.3) 56 56
Deposits 37 37
VAT receivables 25,690 28,856
Tax advances 1,109 9
Prepayments 3,621 5,845
Other current assets 2,041 1,795
----------------------------------------------- -------- ------------
41,341 64,155
Allowance for expected credit losses - -
Total trade and other receivables 63,189 80,517
----------------------------------------------- -------- ------------
Trade receivables are shown net of any interest applied to
prepayments. Payment terms are aligned with offtake agreements and
market standards and generally are 7 days on 90% of the invoice and
the remaining 10% at the settlement date which can vary between 1
to 5 months. The fair values of trade and other receivables
approximate to their book values.
Non-current deposits included EUR250k (EUR250k at 31 December
2022) as a collateral for bank guarantees, which was recorded as
restricted cash (or deposit).
Loans are related to an agreement entered by the Group and Lain
Technologies Ltd in relation to the construction of the pilot plan
to develop the E-LIX System. The Loan is secured with the pilot
plant, has a grace period of up to four years and repayment terms
depending on future investments in E-LIX System facilities. Amounts
withdrawn bears interest at 2%.
13. Cash and cash equivalents
( Euro 000's ) 30 Jun 31 Dec
2023 2022
Unrestricted cash and cash equivalents
at Group level 99,700 108,550
Unrestricted cash and cash equivalents
at Operation level 12,946 17,567
Restricted cash and cash equivalents at
Operation level - 331
Consolidated cash and cash equivalents 112,646 126,448
----------------------------------------- -------- --------
Restricted cash amounted at 31 December 2022 to EUR0.3 million
was held in escrow, which represented funds utilized by the Company
to cover interest payments of EUR9.6 million on 7 and 8 April 2022
(following the trial in February and March 2022) and EUR1.1 million
on 16 May 2022 to Astor under the Master Agreement. However, due to
the settlement reached with Astor on 17 May 2023 whereby Astor
agreed to repay EUR3.5 million of interest previously paid to it to
finalise the litigation, the previously restricted cash has now
been released and reversed.
Cash and cash equivalents denominated in the following
currencies:
(Euro 000's) 30 Jun 31 Dec 2022
2023
Euro - functional and presentation currency 81,570 84,146
Great Britain Pound 71 895
United States Dollar 31,005 41,407
Consolidated cash and cash equivalents 112,646 126,448
--------------------------------------------- -------- ------------
14. Share capital and share premium
Shares Share Capital Share premium Total
000's StgGBP'000 StgGBP'000 StgGBP'000
Authorised
Ordinary shares of Stg
GBP0.075 each* 200,000 15,000 - 15,000
--------- ---------------- ---------------- -------------
Issued and fully Shares Share Share Total
paid Capital premium
Price
Issue Date (GBP) Details 000's EUR'000 EUR'000 EUR'000
31 December 2021/1
January 2022 138,236 13,447 315,916 329,363
Exercised share
22-Jan-22 1.44 options (b) 314 28 512 540
Exercised share
22-Jan-22 2.015 options (b) 321 29 746 775
Exercised share
22-Jan-22 2.045 options (b) 400 36 941 977
Exercised share
22-Jan-22 1.475 options (b) 451 42 754 796
Exercised share
22-Jan-22 3.09 options (b) 135 12 505 517
Exercised share
23-Jun-22 1.475 options (a) 23 2 37 39
------------------ ------- ---------------- -------- --------- --------- --------
31-Dec-22 139,880 13,596 319,411 333,007
30-Jun-23 139,880 13,596 319,411 333,007
Authorised capital
The Company's authorised share capital is 200,000,000 ordinary
shares of Stg GBP0.075 each.
Issued capital
2023
No share issuance has taken place thus far in 2023.
The Company's share capital at 30 June 2023 is 139,879,209
ordinary shares of Stg GBP0.075 each.
2022
a) On 23 June 2022, the Company announced that it has issued
22,500 ordinary shares of 7.5p in the Company pursuant to an
exercise of share options by an employee.
b) On 26 January 2022, the Company announced that it was
notified that PDMRs and senior employees exercised a total of
1,350,000 and 270,750 options.
In general, option agreements contain provisions adjusting the
exercise price in certain circumstances including the allotment of
fully paid ordinary shares by way of a capitalisation of the
Company's reserves, a subdivision or consolidation of the ordinary
shares, a reduction of share capital and offers or invitations
(whether by way of rights issue or otherwise) to the holders of
ordinary shares.
Details of share options outstanding as at 30 June 2023:
Grant date Expiry date Exercise price GBP Share options
========================== ====================== =================== ==============
29 May 2019 28 May 2024 2.015 666,500
30 June 2020 29 June 2030 1.475 516,000
24 June 2021 23 June 2031 3.090 1,016,000
26 January 2022 25 January 2032 4.160 120,000
22 June 2022 30 June 2027 3.575 1,225,000
22 May 2023 30 May 2028 3.270 1,305,000
==============
Total 4,848,500
==============
Weighted average
exercise price GBP Share options
==================== ===================================
At 1 January 2023 2.857 3,543,500
Granted during the year 3.270 1,305,000
30 June 2023 2.968 4,848,500
===================================
Warrants
As at 30 June 2023 and 2022 there were no warrants.
15. Other reserves
(Euro 000's) FV reserve Non-Distributable Total
Share Bonus Depletion of financial reserve Distributable
option share factor assets at (3) reserve
(1) FVOCI (2) (4)
At 1 January 2022 9,086 208 24,978 (1,147) 8,000 11,565 52,690
Recognition of
share- based
payments 357 - - - - - 357
Recognition of
depletion factor - - 12,800 - - - 12,800
Recognition of
non-distributable
reserve - - - - 316 - 316
Recognition of
distributable
reserve - - - - - 2,726 2,726
Change in fair
value of financial
assets at fair
value through OCI - - - (6) - - (6)
Other changes in
reserves - - - - - (292) (292)
-------------------- --------- -------- ------------ -------------- ------------------ ---------------- -------
At 30 June 2022 9,443 208 37,778 (1,153) 8,316 13,999 68,591
Recognition of
share-based
payments 922 - - - - - 922
Other changes in
reserves - - - - - 292 292
Change in fair - - - - - - -
value of financial
assets at fair
value through OCI
-------------------- --------- -------- ------------ -------------- ------------------ ---------------- -------
At 31 December
2022 10,365 208 37,778 (1,153) 8,316 14,291 69,805
Recognition of
share-based
payments 330 - - - - - 330
Change in fair
value of financial
assets at fair
value through OCI - - - (4) - - (4)
-------------------- --------- -------- ------------ -------------- ------------------ ---------------- -------
At 30 June 2023 10,695 208 37,778 (1,157) 8,316 14,291 70,131
(1) Depletion factor reserve
At 30 June 2023, the Group has recognised EURnil million (H1
2022: disposed EUR12.8 million) as a depletion factor reserve as
per the Spanish Corporate Tax Act.
(2) Fair value reserve of financial assets at FVOCI
The Group has elected to recognise changes in the fair value of
certain investments in equity securities in OCI, as explained in
(1) above. These changes are accumulated within the FVOCI reserve
within equity. The Group transfers amounts from this reserve to
retained earnings when the relevant equity securities are
derecognised.
(3) Non-distributable reserve
To comply with Spanish Law, the Group needed to record a reserve
of profits generated equal to a 10% of profit/(loss) for the year
until 20% of share capital is reached.
(4) Distributable reserve
The Group reclassified at least 10% of the profit of 2022 to
distributable reserves.
16. Trade and other payables
(Euro 000's) 30 Jun 31 Dec 2022
2023
Non-current
Other non-current payables 2,000 2,000
Government grant 1,412 15
------------
3,412 2,015
Current
Trade payables 65,896 85,038
Accruals 3,547 3,322
VAT payables - 259
Other 756 1,403
70,199 90,022
Other non-current payables are related with the acquisition of
Atalaya Ossa Morena SL (former Rio Narcea Nickel SL).
Trade payables are mainly for the acquisition of materials,
supplies and other services. These payables do not accrue interest
and no guarantees have been granted. The fair value of trade and
other payables approximate their book values. Trade payables are
non-interest-bearing and are normally settled on 60-day terms.
17. Provisions
(Euro 000's) Other provisions Legal costs Rehabilitation Total costs
costs
At 1 January 2022 - 279 26,299 26,578
Additions - - 1,033 1,033
Revision of provision - - 74 74
Finance cost - - 469 469
----------------------- ----------------- ------------ --------------- ------------
At 30 June 2022 - 279 27,875 28,154
Additions - 30 - 30
Reclassification 1,435 - - 1,435
Used of provision - (10) (155) (165)
Reversal of provision - (73) (3,497) (3,570)
Finance cost - - (849) (849)
----------------------- ----------------- ------------ --------------- ------------
At 31 December 2022 1,435 226 23,374 25,035
Used of provision - - (294) (294)
Revision of provision - - 2,542 2,542
Finance cost - - 553 553
At 30 June 2023 1,435 226 26,175 27,836
----------------------- ----------------- ------------ --------------- ------------
(Euro 000's) 30 Jun 2023 31 Dec 2022
Non-current 27,114 24,083
Current 722 952
-------------- ------------- ------------
Total 27,836 25,035
Rehabilitation provision
Rehabilitation provision represents the accrued cost required to
provide adequate restoration and rehabilitation upon the completion
of production activities. These amounts will be settled when
rehabilitation is undertaken, generally over the project's
life.
The discount rate used in the calculation of the net present
value of the liability as at 30 June 2023 was 3.41% (2022: 3.41%),
which is the 15-year Spain Government Bond rate from 2017 to 2021.
An inflation rate of 1%-5.70% is applied on annual basis.
Legal provision
The Group has been named a defendant in several legal actions in
Spain, the outcome of which is not determinable as at 30 June 2023.
Management has individually reviewed each case and established a
provision of EUR0.2 million as of 30 June 2023 (EUR0.2 million at
31 December 2022) for these claims, which has been reflected in
these unaudited condensed interim consolidated financial
statements.
18. Borrowings
(Euro 000's) 30 Jun 2023 31 Dec 2022
Non-current borrowings
Credit facilities 12,637 20,768
------------------------ ------------- ------------
12,637 20,768
Current borrowings
Credit facilities 31,257 52,595
------------------------ ------------- ------------
31,257 52,595
The Group had credit approval for facilities totalling EUR128.0
million (EUR119.6 million at 31 December 2022). During 2023,
Atalaya drew down some of its existing credit facilities to
financing the construction of 50 MW solar plant (payable amount of
EUR17.6 million at 30 June 2023) and in 2022 to pay the Deferred
Consideration.
Borrowing with fixed interest rates range from 1.60 % to 2.45 %
with an average fixed interest rate of 1.95%. Margins on borrowing
with variable interest rates, usually 12 months EURIBOR, range from
1.10 % to 2.00 % with an average margin of 1.49%.
At 30 June 2023, the Group had used EUR43.9 million of its
facilities and had undrawn facilities of EUR84.1 million.
19. Lease liabilities
(Euro 000's) 30 Jun 31 Dec 2022
2023
Non-current
Lease liabilities 4,128 4,378
------------------- -------- ------------
4,128 4,378
Current
Lease liabilities 504 536
------------------- -------- ------------
504 536
Lease liabilities
The Group entered into lease arrangements for the renting of
land, laboratory equipment and vehicles which are subject to the
adoption of all requirements of IFRS 16 Leases. The Group has
elected not to recognise right-of-use assets and lease liabilities
for short-term leases that have a lease term of 12 months or less
and leases of low-value assets. Depreciation expense regarding
leases amounts to EUR0.3 million (2022: EUR0.2 million) for the six
month period ended 30 June 2023. The land lease is set for a
duration of thirteen years, with payments due at the beginning of
each month, increasing annually by an average of 1.5%. As of 30
June 2023, the remaining term of this lease is nine and a half
years.
Since the Company acquired 100% of the shares of Cambridge
Mineria Espana, S.L. (renamed to Atalaya Masa Valverde, S.L.U.) in
October 2020, a lease arrangement for a warehouse rent was
included. The warehouse lease is scheduled for a period of thirteen
years, with payments due at the beginning of each month, escalating
in accordance with the yearly Spanish consumer price index. As of
30 June 2023, the remaining term of this lease is eight and a half
years.
(Euro 000's) 30 Jun 2023 31 Dec 2022
Minimum lease payments due:
- Within one year 504 536
- Two to five years 1,943 1,957
- Over five years 2,185 2,421
----------------------------------------- ------------------ ------------
Present value of minimum lease payments
due 4,632 4,914
(Euro 000's) Lease liabilities
At 1 January 2023 4,914
Interest expense 13
Lease payments (295)
----------------------------------------- ------------------
At 30 June 2023 4,632
At 30 June 2023
Non-current liabilities 4,128
Current liabilities 504
----------------------------------------- ------------------
4,632
20. Acquisition, incorporation and disposal of subsidiaries
There were no acquisitions or incorporation of subsidiaries
during the six month period ended 30 June 2023 and 2022.
21. Winding-up of subsidiaries
There were no operations wound up during the six month period
ended 30 June 2023.
On 4 January 2022, the subsidiary EMED Mining Spain, S.L. was
wound up.
22. Related party transactions
The following transactions were carried out with related
parties:
22.1 Compensation of key management personnel
The total remuneration and fees of Directors (including
Executive Directors) and other key management personnel was as
follows:
(Euro 000's) Three Three Six Six month
month month month period
period period period ended
ended ended ended 30 Jun
30 Jun 30 June 30 Jun 2022
2023 2022 2023
Directors' remuneration and fees 255 238 615 496
Directors' bonus (1) 163 357 163 357
Share option-based benefits and
other benefits to directors 48 64 68 127
Key management personnel fees 154 141 358 282
Key management bonus (1) 109 239 109 239
Share option-based and other
benefits to key management personnel 48 62 68 123
--------------------------------------- -------- --------- -------- ----------
777 1,101 1,381 1,624
(1) These amounts related to the performance bonus for 2022
approved by the Board of Directors of the Company during H1 2023.
Director's bonus relates to the amount approved for the CEO as an
executive director and key management bonus relates to the amount
approved for other key management personnel which are not directors
of Atalaya Mining plc.
22.2 Share-based benefits
On 23 May 2023, the Company announced that in accordance with
the Company's Long Term Incentive Plan 2020 which was approved by
shareholders at the Annual General Meeting on 28 June 2023, it has
granted 1,305,000 share options to Persons Discharging Managerial
Responsibilities and other management.
The Options expire on 21 May 2028, five years from the deemed
date of grant (22 May 2023), have an exercise price of 327 pence
per ordinary share, being the last mid-market closing price on the
grant date, and vest in three equal tranches, one third on grant
and the balance equally on the first and second anniversary of the
grant date.
22.3 Transactions with related parties/shareholders
i) Transaction with shareholders
(Euro 000's) Three Three month Six month Six month
month period period period period
ended 30 ended 30 ended 30 ended 30
Jun 2023 June 2022 Jun 2023 Jun 2022
Trafigura- Revenue from contracts 21,526 36,590 33,820 44,808
Freight services - - - -
21,526 36,590 33,820 44,808
Gain / (losses) relating
provisional pricing within
sales 745 (3,197) 2,847 (1,803)
----------------------------------- -------------- ------------ ---------- ----------
Trafigura - Total revenue
from contracts 22,271 33,394 36,667 43,005
ii) Period-end balances with related parties
(Euro 000's) 30 Jun 2023 31 Dec 2022
Receivables from related parties:
Recursos Cuenca Minera S.L. 56 56
----------------------------------- ------------- ------------
Total (Note 12) 56 56
The above balances bear no interest and are repayable on
demand.
iii) Period-end balances with shareholders
(Euro 000's) 30 Jun 2023 31 Dec 2022
Trafigura - Debtor balance- subject
to provisional pricing 1,721 12,800
------------------------------------- ------------- ------------
Total (Note 12) 1,721 12,800
The above debtor balance arising from sales of goods and other
balances bear no interest and is repayable on demand.
23. Contingent liabilities
Judicial and administrative cases
In the normal course of business, the Group may be involved in
legal proceedings, claims and assessments. Such matters are subject
to many uncertainties, and outcomes are not predictable with
assurance. Legal fees for such matters are expensed as incurred and
the Group accrues for adverse outcomes as they become probable and
estimable.
24. Commitments
There are no minimum exploration requirements at Proyecto
Riotinto. However, the Group is obliged to pay local land taxes
which currently are approximately EUR235,000 per year in Spain and
the Group is required to maintain the Riotinto site in compliance
with all applicable regulatory requirements.
In 2012, ARM entered into a 50/50 joint venture with Rumbo to
evaluate and exploit the potential of the class B resources in the
tailings dam and waste areas at Proyecto Riotinto (mainly residual
gold and silver in the old gossan tailings). Under the joint
venture agreement, ARM will be the operator of the joint venture,
will reimburse Rumbo for the costs associated with the application
for classification of the Class B resources and will fund the
initial expenditure of a feasibility study up to a maximum of
EUR2.0 million. Costs are then borne by the joint venture partners
in accordance with their respective ownership interests.
25. Significant events
The events in Ukraine from 24 February 2022 are impacting the
Global Economy but cannot yet be predicted in full. The main
concern now is the rising prices for energy, fuel and other raw
materials and rising inflation, which may affect household incomes
and business operating costs. The financial effect of the current
crisis on the Global Economy and overall business activities cannot
be estimated with reasonable certainty at this stage.
-- On 12 January 2023, the Company was notified that Allianz
Global Investors GmbH, shareholder of the Company, decreased its
voting rights from 4.93% to 3.98%.
-- On 20 February 2023, Atalaya announced a voluntary delisting
of its ordinary shares from the Toronto Stock Exchange (the "TSX")
which was effective from the closing of trading on 20 March
2023.
-- On 23 February 2023, Atalaya announced the results from a new
preliminary economic assessment ("PEA") for the Cerro Colorado, San
Dionisio and San Antonio deposits at its Proyecto Riotinto
operation in Spain.
-- On 28 March 2023, Atalaya announced that Proyecto Masa
Valverde was granted the Unified Environmental Authorisation (or in
Spanish, Autorización Ambiental Unificada ("AAU")) by the Junta de
Andalucía.
-- On 23 May 2023, the Company announced that in accordance with
the Company's Long Term Incentive Plan 2020, it was granted
1,305,000 share options to Persons Discharging Managerial
Responsibilities ("PDMRs") and other employees.
-- On 26 June 2023, the Company announced that the Ontario
Securities Commission, as principal regulator, granted Atalaya's
request to cease to be a reporting issuer in the Canadian
Jurisdictions.
26. Events after the Reporting Period
-- On 10 July 2023, a PMDR sold 250,000 ordinary shares.
-- Following the approval of Resolution 10 by the Company's
shareholders at its 2023 Annual General Meeting, which took place
on 28 June 2023, the 2022 Final Dividend of US$0.0385 per ordinary
share was paid on 8 August 2023.
-- On 9 August 2023, the Company's Board of Directors elected to
declare a 2023 Interim Dividend of US$0.05 per ordinary share,
which is equivalent to approximately 3.9 pence per share.
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END
IR PLMPTMTBMBRJ
(END) Dow Jones Newswires
August 10, 2023 02:00 ET (06:00 GMT)
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