TIDMATYM
RNS Number : 6081T
Atalaya Mining PLC
16 November 2023
16 November 2023
Atalaya Mining Plc.
("Atalaya" and/or the "Company")
Q3 and YTD 2023 Financial Results
Progress at operations and projects support the planned move to
LSE Main Market
Atalaya Mining Plc (AIM: ATYM) is pleased to announce its
unaudited third quarter and nine month financial results for the
period ended 30 September 2023 ("Q3 2023" and "YTD 2023"
respectively) together with its unaudited condensed consolidated
financial statements.
Highlights
-- Copper production of 12.5 kt in Q3 2023 and 38.9 kt YTD 2023
-- AISC of $3.24/lb Cu in Q3 2023 and $3.07/lb YTD 2023
-- FY2023 outlook: expect to achieve lower end of copper
production guidance range of 53-54 kt and AISC within $3.00-3.20/lb
range previously announced
-- EBITDA of EUR19.1 million in Q3 2023 and EUR59.2 million YTD 2023
-- Strong net cash position of EUR66.8 million following recent
dividend payment and investments in the 50 MW solar plant, E-LIX
Phase I and exploration
-- Subsequent to Q3 2023, announced the intention to apply for
admission to the premium listing segment of the Official List and
trading on the LSE's Main Market, and a proposed re-domiciliation
from Cyprus to Spain in order to open the possibility for future
FTSE UK Index Series inclusion once Main Market listed
Q3 and YTD 2023 Financial Results Summary
Period ended 30 September Unit Q3 2023 Q3 2022 YTD YTD 2022
2023
Revenues from operations EURk 85,361 82,284 254,755 261,953
----------------- --------- --------- ---------- ----------
Operating costs EURk (66,260) (86,550) (195,543) (224,838)
----------------- --------- --------- ---------- ----------
EBITDA EURk 19,101 (4,266) 59,212 37,115
----------------- --------- --------- ---------- ----------
Profit/(loss) for the
period EURk 11,140 (7,219) 31,448 22,887
----------------- --------- --------- ---------- ----------
Basic earnings/(loss)
per share EUR cents/share 8.3 (4.7) 23.2 17.4
----------------- --------- --------- ---------- ----------
Cash flows from operating
activities EURk 27,778 (3,810) 59,028 17,572
----------------- --------- --------- ---------- ----------
Cash flows used in investing
activities EURk (18,864) (8,681) (35,604) (36,004)
----------------- --------- --------- ---------- ----------
Cash flows from financing
activities EURk (3,202) (12,647) (31,569) 2,816
----------------- --------- --------- ---------- ----------
Net Cash position (1) EURk 66,764 55,598 66,764 55,598
----------------- --------- --------- ---------- ----------
Working capital surplus EURk 76,917 106,817 76,917 106,817
----------------- --------- --------- ---------- ----------
Average realised copper
price (excluding QPs) US$/lb 3.77 3.52 3.86 4.06
----------------- --------- --------- ---------- ----------
Cu concentrate produced tonnes 59,306 63,400 184,907 180,635
----------------- --------- --------- ---------- ----------
Cu production tonnes 12,541 13,453 38,892 38,300
----------------- --------- --------- ---------- ----------
Cash costs US$/lb payable 2.82 3.34 2.76 3.26
----------------- --------- --------- ---------- ----------
All-In Sustaining Cost
('AISC') US$/lb payable 3.24 3.49 3.07 3.47
----------------- --------- --------- ---------- ----------
(1) Includes restricted cash and bank borrowings at 30 September 2023 and 2022.
Alberto Lavandeira, CEO, commented:
" Atalaya continued to demonstrate good results across its key
operational and financial metrics during Q3. Our copper production
is expected to achieve the lower end of our FY23 guidance and our
AISC is tracking in line with expectations , underscoring our
commitment to operational efficiency and cost management.
Additionally, our strategic investments in the 50 MW solar
plant, E-LIX Phase I, and exploration initiatives not only align
with responsible mining practices but also position us for future
value creation.
Looking ahead, we have a strong cash position and are excited
about our application for admission to the premium listing segment
of the London Stock Exchange's Main Market and the proposed
re-domiciliation. We believe these measures could broaden the
Company's appeal to new institutions at a time when investor
interest in copper and the related energy transition thematic
continues to accelerate. "
Investor Presentation Reminder
Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding
a live presentation relating to the Q3 and YTD 2023 Financial
Results via the Investor Meet Company platform at 12:00 GMT
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.
Q3 and YTD 2023 Operating Results Summary
Units expressed in accordance Unit Q3 2023 Q3 2022 YTD 2023 YTD 2022
with the international system
of units (SI)
Ore mined Mt 3 ,845,806 3 ,816,688 11 ,201,824 11 ,344,206
-------- ----------- ----------- ------------ ------------
Waste mined Mt 9 ,662,598 5 ,753,382 24 ,820,247 19 ,332,317
-------- ----------- ----------- ------------ ------------
Ore processed Mt 3 ,850,196 3 ,923,498 11 ,651,730 11 ,451,805
-------- ----------- ----------- ------------ ------------
Copper ore grade % 0.38 0.41 0.38 0.39
-------- ----------- ----------- ------------ ------------
Copper concentrate grade % 21.15 21.22 21.03 21.20
-------- ----------- ----------- ------------ ------------
Copper recovery rate % 87.00 84.62 87.03 85.70
-------- ----------- ----------- ------------ ------------
Copper concentrate tonnes 59,306 63,400 184,907 180,635
-------- ----------- ----------- ------------ ------------
Copper contained in concentrate tonnes 12,541 13,453 38,892 38,300
-------- ----------- ----------- ------------ ------------
Payable copper contained
in concentrate tonnes 11,948 12,819 37,043 36,494
-------- ----------- ----------- ------------ ------------
Mining
Ore mined was 3.8 million tonnes in Q3 2023 (Q3 2022: 3.8
million tonnes) and 11.2 million tonnes in YTD 2023 (YTD 2022: 11.3
million tonnes).
Waste mined was 9.7 million tonnes in Q3 2023 (Q3 2022: 5.8
million tonnes) and 24.8 million tonnes in YTD 2023 (YTD 2022: 19.3
million tonnes). Waste mining during YTD 2023 was consistent with
budget and included 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 3.9 million tonnes of ore in Q3 2023 (Q3
2022: 3.9 million tonnes) and 11.7 million tonnes in YTD 2023 (YTD
2022: 11.5 million tonnes).
Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%) and 0.38% in
YTD 2023 (YTD 2022: 0.39%).
Copper recoveries in Q3 2023 were 87.00% (Q3 2022: 84.62%) and
87.03% in YTD 2023 (YTD 2022: 85.7%), as a result of favourable ore
characteristics during the 2023 periods.
Production
Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453
tonnes) and 38,892 tonnes in YTD 2023 (YTD 2022: 38,300
tonnes).
On-site copper concentrate inventories at 30 September 2023 were
approximately 7,358 tonnes (30 June 2023: 7,291 tonnes). All
concentrate in stock at the beginning of the period was delivered
to the port at Huelva.
Copper contained in concentrates sold was 12,521 tonnes in Q3
2023 (Q3 2022: 14,040 tonnes) and 37,880 tonnes in YTD 2023 (YTD
2022: 38,296 tonnes).
Cash Costs and AISC Breakdown
YTD
$/lb Cu payable Q3 2023 Q3 2022 2023 YTD 2022
Mining 0.90 0.75 0.84 0.82
Processing 0.93 1.53 0.90 1.39
Other site operating costs 0.51 0.49 0.52 0.52
Total site operating costs 2.34 2.77 2.26 2.73
By-product credits (0.09) (0.07) (0.09) (0.08)
Freight, treatment charges and other
offsite costs 0.57 0.64 0.59 0.61
Total offsite costs 0.48 0.57 0.50 0.53
Cash costs 2.82 3.34 2.76 3.26
-------- -------- ------- ---------
Cash costs 2.82 3.34 2.76 3.26
-------- -------- ------- ---------
Corporate costs 0.08 0.05 0.07 0.08
Sustaining capital (excluding one-off
tailings expansion) 0.06 0.06 0.04 0.06
Capitalised stripping costs 0.21 - 0.13 0.01
Other costs 0.07 0.04 0.07 0.05
Total AISC 3.24 3.49 3.07 3.46
Note: Some figures may not add up due to rounding.
Cash costs were $2.82/lb payable copper in Q3 2023 ( Q3 2022:
$3. 34 /lb) and $2. 76 /lb payable copper in YTD 2023 (YTD 2022:
$3. 26 /lb), with the decrease mainly due to lower electricity and
offsite costs despite lower production volumes.
AISC were $ 3.24 /lb payable copper in Q3 2023 ( Q3 2022:
$3.49/lb) and $3. 07 /lb payable copper in YTD 2023 (YTD 2022: $3.
46 /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.
Q3 and YTD 2023 Financial Results Highlights
Income Statement
Revenues were EUR85.4 million in Q3 2023 (Q3 2022: EUR82.3
million) and EUR254.8 million in YTD 2023 (YTD 2022: EUR262.0
million). For Q3 period, modestly higher revenues were the result
of higher realised copper prices partly offset by lower sales
volumes, while in the YTD period, lower revenues were mainly the
result of lower realised copper prices.
Operating costs were EUR 66.3 million in Q3 2023 (Q3 2022:
EUR86.6 million) and EUR195.5 million (YTD 2022: EUR224.8 million).
Lower operating costs during the 2023 periods were mainly the
result of lower electricity costs, partly offset by higher
administrative and expensed exploration costs.
EBITDA was positive EUR19.1 million in Q3 2023 (Q3 2022:
negative EUR4.3 million) and positive EUR59.2 million in YTD 2023
(YTD 2022: positive EUR37.1 million). Higher comparable EBITDA was
mainly the result of lower operating costs.
Profit after tax was EUR11.1 million in Q3 2023 (Q3 2022: EUR7.2
million loss) or 8.3 cents basic earnings per share (Q3 2022: 4.7
cents loss) and EUR31.4 million in YTD 2023 (YTD 2022: EUR22.9
million) or 23.2 cents basic earnings per share (Q3 2022: 17.4
cents).
Cash Flow Statement
Cash flows from operating activities before changes in working
capital were EUR 20.7 million in Q3 2023 (Q3 2022: negative EUR4.2
million) and EUR 27.8 million after working capital changes (Q3
2022: negative EUR3.8 million). For YTD 2023, cash flows from
operating activities before changes in working capital were EUR
59.6 million (YTD 2022: EUR37.0 million) and EUR 59.0 million after
working capital changes (YTD 2022: EUR17.6 million).
Cash flows used in investing activities were EUR18.9 million in
Q3 2023 (Q3 2022: EUR8.7 million) and EUR 35.6 million in YTD 2023
(YTD 2022: EUR36.0 million). Key investments in Q3 2023 included
EUR 1.5 million in sustaining capex ( Q3 2022: EUR 1 .6 million),
EUR 5.2 million in capitalised stripping ( Q3 2022 : nil ), EUR3.4
million to extend the tailings dam ( Q3 2022 : EUR3. 0 million),
EUR 6.3 million for the 50 MW solar plant ( Q3 2022: EUR0.4 million
) and EUR 4. 5 million for the E-LIX Phase I Plant ( Q3 2022:
EUR6.5 million ), of which EUR 2.6 million was booked as
prepayments for service contract to Lain Technologies Ltd.
Cash flows from financing activities were negative EUR3.2
million in Q3 2023 (Q3 2022: negative EUR12.6 million) and negative
EUR 31.6 million in YTD 2023 (YTD 2022: positive EUR2.8 million),
as a result of scheduled debt repayments and dividends
payments.
Balance Sheet
Consolidated cash and cash equivalents were EUR119.1 million at
30 September 2023 (31 December 2022: EUR126.4 million).
Net of current and non-current borrowings of EUR52.3 million,
net cash was EUR66.8 million as at 30 September 2023, compared to
EUR68.8 million as at 30 June 2023 and EUR53.1 million as at 31
December 2022.
Inventories of concentrate valued at cost were EUR8.3 million at
30 June 2023 (31 December 2022: EUR4.5 million).
As at 30 September 2023, total working capital was EUR76.9
million, compared to EUR81.4 million as at 30 June 2023 and EUR84.0
million as at 31 December 2022.
Electricity Prices
Realised Prices
Market electricity prices in Q3 2023 increased slightly from Q2
2023, in part due to the impact of strikes at LNG export facilities
in Australia on European natural gas prices, but remained
significantly below 2022 levels. After including the contribution
from the Company's 10-year power purchase agreement ("PPA"),
realised electricity prices in Q3 2023 were approximately 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. Ramp-up is expected to begin in early January 2024, with
full operations expected in the following months. 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 well 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 expects to achieve copper production at the lower
end of its full year guidance range of 53,000 to 54,000 tonnes at
cash costs of $2.80 to $3.00/lb copper payable and AISC of $3.00 to
$3.20/lb copper payable.
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 continue to
trend in line with prior FY2023 guidance, although the composition
is expected to vary including higher investments in the E-LIX Phase
I plant.
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. The AAU allows for the
expansion of tailings capacity and the mine footprint at Riotinto
and represents an important step towards developing regional
deposits such as San Dionisio and San Antonio.
The Company is continuing with permitting activities associated
with San Dionisio, which represents a key component of the
integrated mine plan that was outlined in the recent Riotinto PEA.
Preparation of the pit for mining is underway.
E-LIX Phase I Plant
Construction activities continue at the E-LIX Phase I plant,
with commissioning expected to begin in December 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 an 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 optimisation
workstreams continue.
Three core rigs are active and focused on step out drilling at
the Mojarra Trend, drill testing coincident fix loop
electromagnetic ("FLEM") and airborne gravity gradiometry ("AGG")
anomalies and completing metallurgical and infill drilling at the
Masa Valverde deposit. The first phase of resource definition
drilling at the Campanario Trend was completed during the
Period.
Proyecto Touro
Atalaya remains fully committed to the development of the Touro
copper project, which has the potential to provide substantial
benefits to Galicia and also support the European Union's critical
raw materials mandate.
The Xunta de Galicia has legislation that seeks to promote
industry in Galicia by simplifying the approval process. Business
initiatives can be classified as priority business initiatives
("IEP") and strategic industrial projects ("Proyecto Industrial
Estratégico" or "PIE") which provide a variety of development
advantages. The Company believes that Touro fulfils the
requirements to be granted the status of a PIE in Galicia.
Touro has the potential to become a new source of copper
production for Europe. As such, the project could also be granted
"Strategic Project" status by the EU, which can be awarded to
projects "based on their contribution to the security of supply of
strategic raw materials, their technical feasibility,
sustainability and social standards", as part of the Critical Raw
Materials Act. Copper was recently added to the list of "Strategic
Raw Materials" owing to its importance for strategic sectors and
technologies and due to the supply-demand imbalance that is
expected in the near future.
Running parallel with the ongoing Touro permitting process, the
Company continues to focus on numerous initiatives related to the
social licence, including engaging with the many stakeholders in
the region to provide detailed information on the new and 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 successfully restore the water quality
of the 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
field-work carried out by Atalaya has resulted in an immediate and
visible improvement of the water systems surrounding the project,
with the progress being recognised by local stakeholders and the
media.
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 and the La Hinchona
copper-gold project, both in the central part of the district. One
rig is being mobilised to the flagship Alconchel-Pallares
copper-gold project.
Proyecto Riotinto East
Drill testing of selected coincident FLEM and AGG anomalies is
in progress with one rig.
Corporate Activities After the Reporting Period
Corporate Governance Update
Following the completion of an internal policy review in October
2023, the former Audit & Financial Risk Committee was renamed
the Audit Committee. Hussein Barma continues as Chair of the Audit
Committee, Neil Gregson continues as a Member and Stephen Scott was
appointed as a Member in place of Roger Davey. Mr. Davey continues
as Chair of the Board of Directors, a Member of the Physical Risk
Committee and a Member of the Sustainability Committee.
In addition, Neil Gregson was appointed as Senior Independent
Director. Mr. Gregson joined the Company's Board of Directors in
February 2021 and continues as Chair of the Nomination &
Governance Committee, Member of the Audit Committee, Member of the
Physical Risk Committee and Chair of the Remuneration
Committee.
Intention to Move to the Main Market
On 13 November 2023, the Company announced its intention to
apply for the Company's ordinary shares ("Ordinary Shares") to be
admitted to the premium listing segment of the Official List
maintained by the Financial Conduct Authority ("FCA") ("Official
List") and to trading on the London Stock Exchange plc's ("London
Stock Exchange") main market for listed securities ("Main Market")
(together, "Admission").
Since restarting operations at Proyecto Riotinto in 2016,
Atalaya has become a leading European producer of copper, which is
a key commodity for economic growth and the energy transition.
Atalaya has assembled a portfolio of growth projects across several
world-class mineral districts in Spain and maintains a sustainable
dividend policy. In order to build on this success, Atalaya's Board
of Directors believes that the move to the Main Market would
further enhance the Company's corporate profile and broaden its
appeal to new institutional investors.
Atalaya does not intend to raise any funds or offer any new
securities in connection with Admission or the publication of the
related prospectus. The Admission will be effected through an
introduction of the Company's existing Ordinary Shares.
Admission is subject to the approval by the FCA of a prospectus
and the Ordinary Shares being admitted by the FCA to the premium
listing segment of the Official List and by the London Stock
Exchange to trading on the Main Market. Subject to the satisfaction
of these conditions, Admission is expected to occur before the end
of December 2023. Accordingly, the Company has given notice of the
intended cancellation of trading of its Ordinary Shares on AIM in
accordance with Rule 41 of the AIM Rules for Companies. The
Company's listing on AIM is expected to be to be cancelled before
the end of December 2023.
Atalaya will make a further announcement on the status of the
proposed applications for Admission, together with the timeline for
Admission, in due course.
Proposed Re-domiciliation
On 14 November 2023, the Company announced its intention to
re-domicile the Company by transferring its registered office from
the Republic of Cyprus to the Kingdom of Spain ("Proposed
Re-domiciliation").
This change in corporate structure is subject to shareholder
approval and regulatory consents. The Company is convening an
Extraordinary General Meeting ("EGM") to consider and, if thought
advisable, to approve the resolutions which are necessary to
approve the Proposed Re-domiciliation. If approved, the Proposed
Re-domiciliation is expected to be completed before end of May
2024.
The re-domiciliation is being proposed as the incorporation in
Cyprus no longer reflects the Company's geographic and strategic
focus, and therefore represents a legacy structure for the
Company.
The Proposed Re-domiciliation follows the Company's announcement
on 13 November 2023 confirming its intention to move to the Main
Market of the London Stock Exchange ("Step-up"). In the event the
Step-up occurs, the Proposed Re-domiciliation also opens the
possibility for the Company to be eligible for inclusion in the
FTSE UK Index Series (subject to other eligibility criteria being
satisfied at the time of application), which the Company believes
would be in the interest of all its shareholders.
The proposed Re-domiciliation and the Step-up are independent of
each other and neither is conditional upon the other occurring.
The EGM will take place on Tuesday, 12 December 2023 at 11:00 am
GMT at Hamilton House, 1 Temple Avenue, London EC4Y 0HA to consider
the Proposed Re-domiciliation and related matters as a consequence
of the Proposed Re-domiciliation.
A circular, incorporating the Notice of EGM and further
background and information on the Proposed Re-domiciliation,
together with forms of proxy are available on the Company's website
at www.atalayamining.com .
Financial Statements
The Unaudited Condensed Consolidated Financial Statements for
the three and nine months ended 30 September 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
(NOMAD and Joint Henry Fitzgerald-O'Connor
Broker) / James Asensio +44 20 7523 8000
------------------------------- ------------------
BMO Capital Markets
(Joint Broker) Tom Rider / Andrew Cameron +44 20 7236 1010
------------------------------- ------------------
Peel Hunt LLP
(Joint Broker) Ross Allister / David McKeown +44 20 7418 8900
------------------------------- ------------------
About Atalaya Mining Plc
Atalaya is an AIM-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 September 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.
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 September 2023 and results of operations for the three and
nine months ended 30 September 2023 and 2022.
This report has been prepared as of 15 November 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 September 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 six month ended 30 June 2023, and the
unaudited interim condensed consolidated financial statements for
the period ended 30 September 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 September 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
company's 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 certain 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 nine months ended
30 September 2023 and 2022, respectively.
Units expressed in accordance Unit Three Three Nine Nine month
with the international month month month period
system of units (SI) period period period ended
ended ended ended 30 Sep
30 Sep 30 Sep 30 Sep 2022
2023 2022 2023
Ore mined t 3,845,806 3,816,688 11,201,824 11,344,206
Waste mined t 9,662,598 5,753,382 24,820,247 19,332,317
Ore processed t 3,850,196 3,923,498 11,651,730 11,451,805
Copper ore grade % 0.38 0.41 0.38 0.39
Copper concentrate grade % 21.15 21.22 21.03 21.20
Copper recovery rate % 87.00 84.62 87.03 85.70
Copper concentrate t 59,306 63,400 184,907 180,635
Copper contained in concentrate t 12,541 13,453 38,892 38,300
Payable copper contained
in concentrate t 11,948 12,819 37,043 36,494
US$/lb
Cash cost (*) payable 2.82 3.34 2.76 3.26
All-in sustaining cost US$/lb
(*) payable 3.24 3.49 3.07 3.47
(*) 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 Nine Nine month
month month month period
period period period ended
ended ended ended 30 Sep
30 Sep 30 Sep 30 Sep 2022
$/lb Cu payable 2023 2022 2023
Mining 0.90 0.75 0.84 0.82
Processing 0.93 1.53 0.90 1.39
Other site operating costs 0.51 0.49 0.52 0.52
Total site operating costs 2.34 2.77 2.26 2.73
By-product credits (0.09) (0.07) (0.09) (0.08)
Freight, treatment charges and other
offsite costs 0.57 0.64 0.59 0.61
Total offsite costs 0.48 0.57 0.50 0.53
Cash costs 2.82 3.34 2.76 3.26
-------- -------- -------- -----------
Cash costs C1 2.82 3.34 2.76 3.26
Corporate costs 0.08 0.05 0.07 0.08
Sustaining capital (excluding one-off
tailings expansion) 0.06 0.06 0.04 0.06
Capitalised stripping costs 0.21 - 0.13 0.01
Other costs 0.07 0.04 0.07 0.05
Total AISC 3.24 3.49 3.07 3.46
Note: Some figures may not add up due to rounding.
Three months operational review
The plant processed 3.9 million tonnes of ore during Q3 2023 (Q3
2022: 3.9 million tonnes), compared with 4.1 million tonnes in Q2
2023.
Copper grade was 0.38% in Q3 2023 (Q3 2022: 0.41%), compared
with 0.40% in Q2 2023.
Copper recoveries in Q3 2023 were 87.00% (Q3 2022: 84.62%),
compared with 87.18% in Q2 2023, as a result of favourable ore
characteristics during the period.
Copper production was 12,541 tonnes in Q3 2023 (Q3 2022: 13,453
tonnes), compared with 14,212 tonnes in Q2 2023. Lower grades
during the Period were partially offset by recoveries that were
higher than budget.
On-site copper concentrate inventories at 30 September 2023 were
approximately 7,358 tonnes (30 June 2023: 7,291 tonnes). All
concentrate in stock at the beginning of the Period was delivered
to the port at Huelva.
Copper contained in concentrates sold was 12,521 tonnes in Q3
2023 (Q3 2022: 14,040 tonnes), compared with 12,858 tonnes in Q2
2023.
Nine months operational review
Production of copper contained in concentrate during YTD 2023
was 38,892 tonnes, compared with 38,300 tonnes in the same period
of 2022. Payable copper in concentrates was 37,043 tonnes compared
with 36,494 tonnes of payable copper in YTD 2022.
Ore mined in YTD 2023 was 11.2 million tonnes compared with 11.3
million tonnes during YTD 2022. Ore processed was 11.7 million
tonnes versus 11.5 million tonnes in YTD 2022.
Ore grade during YTD 2023 was 0.38% Cu compared with 0.39% Cu in
YTD 2022. Copper recovery was 87.03% versus 85.70% in YTD 2022.
Concentrate production amounted to 184,907 tonnes above YTD 2022
production of 180,635 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 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 as follows .
Unit Guidance
2023
Ore mined million tonnes 15
Waste mined million tonnes 30
Ore processed million tonnes 15.3 - 15.8
Copper ore grade % 0.39 - 0.41
Copper recovery
rate % 86 - 87
Contained copper tonnes 53,000-54,000
Cash costs $/lb payable 2.80 - 3.00
All-in sustaining $/lb payable 3.00 - 3.20
cost
Full year copper production is expected to be at the lower end
of the production guidance range of 53,000 to 54,000 tonnes.
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 $3.20/lb copper payable. Market electricity prices for YTD
2023 have been consistent with expectations.
In addition, aggregate expenditures relating to non-sustaining
capital investments (such as E-LIX Phase I, the 50 MW solar plant,
Riotinto tailings facility expansion) and exploration activities
are trending in line with FY2023 guidance, although the composition
is expected to vary slightly including modestly higher investments
in the E-LIX Phase I plant.
3. Overview of the Financial Results
The following table presents summarised consolidated income
statements for the three and nine months ended 30 September 2023,
with comparatives for the three and nine months ended 30 September
2022, respectively.
( Euro 000's ) Three Three month Nine month Nine month
month period period period period
ended 30 ended 30 ended 30 ended 30
Sep 2023 Sep 2022 Sep 2023 Sep 2022
Revenues 85,361 82,284 254,755 261,953
Costs of sales (62,459) (84,768) (182,252) (217,757)
Administrative and other
expenses (2,383) (905) (8,028) (5,356)
Exploration expenses (1,554) (92) (5,156) (456)
Care and maintenance expenditure (499) (789) (1,185) (1,559)
Other income 635 4 1,078 290
---------------------------------- -------------- ------------ ----------- -----------
EBITDA 19,101 (4,266) 59,212 37,115
Depreciation/amortisation (8,992) (9,039) (27,165) (25,344)
Net foreign exchange gain 705 5,633 760 15,727
Net finance (cost)/ income (143) (510) 2,493 (1,451)
Tax 469 963 (3,852) (3,160)
---------------------------------- -------------- ------------ ----------- -----------
Profit/ (loss) for the
period 11,140 (7,219) 31,448 22,887
Three months financial review
Revenues for the three-month period ended 30 September 2023
amounted to EUR85.4 million (Q3 2022: EUR82.3 million). Increase
revenues in comparison to the same quarter of the previous year
were mainly attributable to higher realised prices with decreased
volumes of concentrate sold.
Realised prices excluding QPs were US$ 3.77 /lb copper during Q3
2023 compared with US$3.52/lb copper in Q3 2022. The realised price
during the quarter, including QPs, was approximately
US$3.81/lb.
Cost of sales for the three-month period ended 30 September 2023
amounted to EUR62.5 million, compared with EUR84.8 million in Q3
2022. Unit operating costs in Q3 2023 were lower than in Q3
2022.
Cash costs of US$2.82/lb payable copper during Q3 2023 compared
with US$3.34/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. EUR18.2 million lower) and other
supply-related costs, which also included lower freight prices .
AISC for Q3 2023, excluding one-off investments in the tailings
dam, were US$3.24/lb payable copper compared with US$3.49/lb
payable copper in Q3 2022.
Sustaining capex for Q3 2023 amounted to EUR1.5 million compared
with EUR1.6 million in Q3 2022. Sustaining capex mainly related to
continuous enhancements in the processing systems of the plant. In
addition, the Company invested EUR 3.4 million in the project to
increase the tailings dam during Q3 2023 (Q3 2022: EUR3.0 million).
Stripping costs capitalised during Q3 2023 amounted to EUR5.2
million (Q3 2022: EURnil).
Capex associated with the construction of the 50 MW solar plant
amounted to EUR6.3 million in Q3 2023, while investments in the
E-LIX Phase I plant totalled EUR4.5 million, of which EUR2.6
million was booked as prepayments for service contract to Lain
Technologies Ltd.
Administrative and other expenses amounted to EUR2.4 million (Q3
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 project portfolio for the
three-month period ended 30 September 2023 amounted to EUR1.6
million compared to EUR0.1 million in Q3 2022 mainly as a result of
costs incurred during the period in Proyecto Masa Valverde.
EBITDA for the three months ended 30 September 2023 amounted to
EUR19.1 million compared with Q3 2022 negative of EUR4.3
million.
The main item below the EBITDA line is depreciation and
amortisation of EUR9.0 million (Q3 2022: EUR9.0 million). In Q3
2023, net financing costs amounted to a negative EUR0.1 million
(compared to EUR0.5 million in Q3 2022).
Nine months financial review
Revenues for the nine-month period ended 30 September 2023
amounted to EUR254.8 million (YTD 2022: EUR262.0 million).
Copper concentrate production during the nine-month period ended
30 September 2023 was 184,907 tonnes (YTD 2022: 180,635 tonnes)
with 181,078 tonnes of copper concentrates sold in the period (YTD
2022: 181,541 tonnes). Higher production levels in YTD 2023 were
mainly the result of robust throughput. Inventories of concentrates
as at the reporting date were 7,358 tonnes (31 Dec 2022: 3,529
tonnes).
Realised copper prices, excluding QPs, for YTD 2023 were
US$3.86/lb copper compared with US$4.06/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 nine-month period ended 30 September 2023
amounted to EUR182.3 million, compared with EUR217.8 million in YTD
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.
Cash costs of US$2.76/lb payable copper during YTD 2023 compare
with US$3.26/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. EUR52.3 million
lower) and other supplies, including freight prices. AISC excluding
investment in the tailings dam in the nine month period were
US$3.07/lb payable copper compared with US$3.47/lb payable copper
in YTD 2022. The decrease is mainly due to the lower cash costs,
although partly offset by higher capitalised stripping costs.
Sustaining capex for the nine-month period ended 30 September
2023 amounted to EUR2.9 million, compared with EUR4.5 million in
the same period the previous year. Sustaining capex related to
enhancements in plant processing systems. In addition, the Company
invested EUR10.3 million in the project to extend the tailings dam,
compared with EUR9.4 million in 2022.
Capex associated with the construction of the 50 MW solar plant
amounted to EUR10.7 million in YTD 2023, while investments in the
E-LIX Phase I plant totalled EUR12.9 million, of which EUR7.5
million was booked as prepayments for service contract to Lain
Technologies Ltd.
Corporate costs for the first nine-month period ended September
2023 were EUR8.0 million, compared with EUR5.4 million in YTD 2022.
Corporate costs mainly include the Company's overhead expenses.
Exploration costs related to Atalaya's project portfolio for the
nine-month period ended 30 September 2023 and amounted to EUR5.2
million, compared with EUR0.5 million, plus EUR2.2 million
capitalised as permits in Proyecto Masa Valverde, in YTD 2022.
EBITDA for the nine months ended 30 September 2023 amounted to
EUR59.2 million, compared with EUR37.1 million in YTD 2022.
Depreciation and amortisation amounted to EUR27.2 million for
the nine-month period ended 30 September 2023 (YTD 2022: EUR25.3
million).
Net foreign exchange gains amounted to EUR0.8 million in YTD
2023 (EUR15.7 million in YTD 2022).
Net finance costs for YTD 2023 amounted to positive EUR2.5
million (YTD 2022 negative EUR1.5 million), 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.
Copper prices
The average realised copper price (excluding QPs) increased by
7.1% to US$3.77/lb in Q3 2023, from US$3.52/lb in Q3 2022.
The average prices of copper for the three and nine months ended
30 September 2023 and 2022 are summarised below:
$/lb Three Three Nine Nine month
month month month period
period period period ended 30
ended ended ended Sep 2022
30 Sep 30 Sep 30 Sep
2023 2022 2023
Realised copper price (excluding
QPs) 3.77 3.52 3.86 4.06
Market copper price per lb (period
average) 3.79 3.51 3.90 4.12
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 Q3 2023, including the QP, was
approximately $3.81/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 September 2023 and 31 December 2022.
Liquidity information
( Euro 000's ) 30 Sep 2023 31 Dec 2022
Unrestricted cash and cash equivalents
at Group level 98,032 108,550
Unrestricted cash and cash equivalents
at Operation level 21,031 17,567
Restricted cash and cash equivalents at
Operation level - 331
-----------------------------------------
Consolidated cash and cash equivalents
(1) 119,063 126,448
----------------------------------------- ------------- ------------
Net cash position (1) 66,764 53,085
Working capital surplus 76,917 84,047
(1) Includes borrowings
Unrestricted cash and cash equivalents (which include cash at
both Group level and Operation level) as at 30 September 2023
decreased to EUR119.1 million from EUR 126.5 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 at 31
December 2022 amounted to EUR0.3 million held in escrow, which
represented funds utilized by the Company to cover possible
remaining costs due to Astor following litigation during 2022.
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.
Between 31 December 2022 and 30 September 2023, borrowings have
exhibited a notable reduction of EUR21.1 million. This decline is
primarily attributed to repayments made across various fronts,
encompassing the financing of the solar plant facility, debt
associated with operational facilities, and the Astor facility. The
company's proactive stance in managing its balance sheet has been
instrumental in achieving this significant reduction in the
borrowing balance. This development underscores enhanced financial
stewardship and fortified the company's financial position.
As of 30 September 2023, Atalaya reported a working capital
surplus of EUR76.9 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 Q3 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 Nine Nine month
month month month period
period period period ended
ended ended ended 30 Sept
30 Sept 30 Sept 30 Sept 2022
2023 2022 2023
Cash flows from/ (used in)
from operating activities 27,778 (3,810) 59,028 17,572
Cash flows used in investing
activities (18,864) (8,681) (35,604) (36,004)
Cash flows (used in)/ from
financing activities (3,202) (12,647) (31,569) 2,816
--------- --------- --------- -----------
Net decrease in cash and cash
equivalents 5,712 (25,138) (8,145) (15,616)
---------------------------------- --------- --------- --------- -----------
Net foreign exchange differences 705 5,633 760 15,727
---------------------------------- --------- --------- --------- -----------
Total net cash flow for the
period 6,417 (19,505) (7,385) 111
Three months cash flows review
Cash and cash equivalents increased by EUR6.4 million during the
three months ended 30 September 2023. This was due to the net
results of cash from operating activities amounting to EUR27.8
million, the cash used in investing activities amounting to EUR18.9
million, the cash used in financing activities totalling EUR3.2
million and net foreign exchange differences of EUR0.7 million.
Cash generated from operating activities before working capital
changes was EUR20.7 million. Atalaya increased its trade
receivables in the period by EUR5.9 million, decreased its
inventory levels by EUR0.6 million and increased its trade payables
by EUR13.2 million.
Investment activities during the quarter consumed EUR18.9
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 EUR3.2
million primarily due to the dividends paid.
Nine months cash flows review
Cash and cash equivalents decreased by EUR7.4 million during the
nine months ended 30 September 2023. This was due to cash from
operating activities amounting to EUR59.0 million, cash used in
investing activities amounting to EUR35.6 million, cash used in
financing activities amounting to EUR31.6 million and net foreign
exchange differences of EUR0.7 million.
Cash generated from operating activities before working capital
changes was EUR59.6 million. Atalaya decreased its trade payables
in the period by EUR7.5 million, decreased its inventory levels by
EUR0.7 million and decreased its trade receivable balances by
EUR11.4 million.
Throughout the period, investment activities amounted to EUR35.6
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 nine-month period ended 30
September 2023 decreased by EUR31.6 million driven by the repayment
of unsecured credit facilities and dividends paid.
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 nine months ended 30 September 2023,
Atalaya recognised a foreign exchange profit of EUR0.8 million and
EUR0.7 million, 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 Nine month Nine month
period ended period period period
30 Sept 2023 ended 30 ended 30 ended 30
Sept 2022 Sept 2023 Sept 2022
Average rates for the
periods
GBP - EUR 0.8597 0.8563 0.8707 0.8472
USD - EUR 1.0884 1.0070 1.0833 1.0638
Spot rates as at
GBP - EUR 0.8646 0.8830 0.8646 0.8830
USD - EUR 1.0594 0.9748 1.0594 0.9748
6. Sustainability
Corporate Social Responsibility
The third quarter of the year marks further progress from
Atalaya and its wholly owned Fundación Atalaya Riotinto as they
continue their efforts to fulfil their social responsibilities.
In this context, neighbouring municipalities have just renewed
leadership after municipal elections. During this quarter the
company and its Foundation are in conversations with the new
administrations to develop new partnership agreements that need to
be signed. The agreements are designed to secure funding for
collaborative initiatives aimed at addressing social,
environmental, and infrastructure challenges. During this quarter,
in Minas de Riotinto, the Foundation has contributed with a
programme to refurbish a number of pedestrian pathways in the
surroundings of the town. Furthermore, the Foundation has agreed to
provide funding for several local projects, including support for
NGOs, local associations and sport clubs.
Moreover, the Foundation has now completed its training program
aimed at local unemployed individuals. The Third Atalaya Mining
Operators Course has successfully finished its practical two-month
internship with the principal contractors of the Riotinto Mine. Now
the group of 20 students is ready to engage with the labour market
with new skills acquired thanks to the hands-on experience in
various mining and industrial related operations which include
official qualifications. The previous programme was successful,
with nearly half of the participants now employed by various
companies.
Health and Safety
The results for Q3 2023, compared to the same period in 2022,
show a significant improvement with only one lost time accident and
97 consecutive days with no lost-time accidents.
For the nine months, results have been improved regarding the
previous year with three minor loss accidents and severity and
frequency indices are 0.10 and 4.48.
In addition, Atalaya has updated its internal procedure for
controlling drugs and preventing work under the influence of
psychoactive substances and has been approved an evidentiary test
with a biological sample (blood) carried out by an accredited
laboratory.
The Field Leadership activity is running well and has added
value to contributing to the safety behaviour in the mining
facility.
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 with a specific training in
heat-stressed work according with the metabolic loading of the
job.
Environment
During the third quarter of 2023, the environmental department
has continued executing the actions of environmental monitoring of
the activity and management of the natural environment. Key points
of the quarter:
-- During the third quarter of the year, one environmental
incident was registered: A spill was detected in Flotation Area
over open ground. It was caused by an electrical failure. The area
was cleaned, and the waste was taken to the tailings facility.
-- A total rainfall of 36.6 l/m2 was recorded in Q3 2023, which
was around 3% less than in the same period of previous year. Total
rainfall for the hydrological year (October 2022 to September 2023)
is 442.3 l/m(2) , which is 9% more than the rainfall recorded in
the previous hydrological year (same period).
-- On July 21st, 2023, the Integrated Environmental
Authorization (IPPC Permit for ELIX Plant) was granted.
-- The additional measures defined in the action plan against
dust continued to be implemented, intensifying periodic irrigation,
implementing new coordination measures, and carrying out exhaustive
monitoring of the emissions generated in the operation.
-- All the regular internal controls of diffuse emissions into
the atmosphere have been carried out, and the results of the
controls are within the limit values. However, in August, the TSP
(Total Suspended Particles) limit was exceeded at sampling point
number 1. In the rest, ADP (Atmospheric Deposition Particles) and
TSP limits were met. Furthermore, the results of Annual External
Control, Point and Diffuse Emissions into the atmosphere were
received. All limits were met. Other periodic and mandatory
controls have been carried out without incidents. In addition,
during the quarter, several reports were handed to the
Administration bodies.
-- Environmental inspections were performed daily, mainly
focused on chemical storage and handling, housekeeping, waste
management, uncontrolled releases and environmentally friendly
practices carried out in the project by ARM's and contractors'
personnel. Additionally, dust control and drainage system
inspections were performed regularly. 82 inspections in total were
carried out during the third quarter, including, 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 which could affect
operations and markets..
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 September 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
Unaudited interim condensed consolidated financial statements on
subsequent pages.
By Order of the Board of Directors,
___________________________________
Roger Davey
Chairman
Nicosia, 15 November 2023
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2023 and 2022
( Euro 000's ) Note Three Three Nine Nine
month month month month
period period period period
ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept
2023 2022 2023 2022
Revenue 4 85,361 82,284 254,755 261,953
Operating costs and mine site administrative
expenses (62,294) (84,450) (181,757) (217,082)
Mine site depreciation and amortization (8,992) (9,039) (27,165) (25,344)
--------------------------------------------- --------- --------- ---------- ----------
Gross profit 14,075 (11,205) 45,833 19,527
Administration and other expenses (2,383) (905) (8,028) (5,356)
Share-based benefits 14 (165) (318) (495) (675)
Exploration expenses (1,554) (92) (5,156) (456)
Other income 635 4 1,078 290
Care and maintenance expenditure (499) (789) (1,185) (1,559)
--------------------------------------------- --------- --------- ---------- ----------
Operating profit 10,109 (13,305) 32,047 11,771
Net foreign exchange gain 3 705 5,633 760 15,727
Net finance (costs)/income 5 (143) (510) 2,493 (1,451)
--------------------------------------------- --------- --------- ---------- ----------
Profit before tax 10,671 (8,182) 35,300 26,047
Tax 6 469 963 (3,852) (3,160)
--------------------------------------------- --------- --------- ---------- ----------
Profit for the period 11,140 (7,219) 31,448 22,887
--------------------------------------------- --------- --------- ---------- ----------
Profit for the period attributable to:
- Owners of the parent 7 11,570 (6,608) 32,481 24,274
- Non-controlling interests (430) (611) (1,033) (1,387)
11,140 (7,219) 31,448 22,887
--------- --------- ---------- ----------
Earnings per share from operations attributable to equity holders
of the parent during the period:
Basic earnings per share (EUR cents per
share) 7 8.3 (4.7) 23.2 17.4
--------- --------- ---------- ----------
Fully diluted earnings per share (EUR cents
per share) 7 8.0 (4.6) 22.6 17.0
--------- --------- ---------- ----------
Profit for the period 11,140 (7,219) 31,448 22,887
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' 4 (6) (1) (12)
Total comprehensive income for the period 11,144 (7,225) 31,447 22,875
--------- --------- ---------- ----------
Total comprehensive income for the period attributable
to:
- Owners of the parent 7 11,574 (6,614) 32,480 24,262
- Non-controlling interests (430) (611) (1,033) (1,387)
--------- --------- ---------- ----------
11,144 (7,225) 31,447 22,875
--------- --------- ---------- ----------
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 30 September 2023 and 2022
(Euro 000's) Note 30 Sep 31 Dec 2022
2023
Assets Unaudited Audited
Non-current assets
Property, plant and equipment 8 376,065 354,908
Intangible assets 9 50,359 53,830
Trade and other receivables 12 24,680 16,362
Non-current financial assets 2.3 1,101 1,101
Deferred tax asset 8,355 7,293
-------------------------------
460,560 433,494
---------- ------------
Current assets
Inventories 10 38,142 38,841
Trade and other receivables 12 44,388 64,155
Tax refundable 100 100
Other financial assets 2.3 31 33
Cash and cash equivalents 13 119,063 126,448
-------------------------------
201,724 229,577
------------------------------- ---------- ------------
Total assets 662,284 663,071
---------- ------------
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 70,300 69,805
Accumulated profit 91,699 70,483
-------------------------------
495,006 473,295
------------------------------- ---------- ------------
Non-controlling interests (8,031) (6,998)
-------------------------------
Total equity 486,975 466,297
---------- ------------
Liabilities
Non-current liabilities
Trade and other payables 16 3,415 2,015
Provisions 17 27,589 24,083
Lease liabilities 19 4,002 4,378
Borrowings 18 15,496 20,768
------------------------------- ---------- ------------
50,502 51,244
Current liabilities
Trade and other payables 16 83,373 90,022
Lease liabilities 19 503 536
Borrowings 18 36,803 52,595
Current provisions 17 631 952
Current tax liabilities 3,497 1,425
------------------------------- ---------- ------------
124,807 145,530
------------------------------- ---------- ------------
Total liabilities 175,309 196,774
------------------------------- ---------- ------------
Total equity and liabilities 662,284 663,071
The notes on the subsequent pages are an integral part of these
Unaudited Interim Condensed Consolidated Financial Statements.
Unaudited Interim Condensed Consolidated Statements of Changes
in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 Sept 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 - - - 32,481 32,481 (1,033) 31,448
Change in fair value of
financial assets through
OCI - - (1) - (1) - (1)
---------------------------------- --------- --------- ---------- --------- --------- -------- ---------
Total comprehensive income - - (1) 32,481 32,480 (1,033) 31,447
Transactions with owners
Recognition of share-based
payments 15 - - 496 - 496 - 496
Other changes in equity - - - 224 224 - 224
Dividends 11 - - - (11,477) (11,477) - (11,477)
---------------------------------- --------- --------- ---------- --------- --------- -------- ---------
At 30 September 2023 13,596 319,411 70,300 91,699 495,006 (8,031) 486,975
(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 - - - 24,274 24,274 (1,388) 22,886
Change in fair value of
financial assets through
OCI - - (12) - (12) - (12)
---------------------------------- --------- --------- ---------- --------- --------- -------- ---------
Total comprehensive income - - (12) 24,274 24,262 (1,388) 22,874
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 - - 675 - 675 - 675
Recognition of non-distributable
reserve 15 - - 316 (316) - - -
Recognition of distributable
reserve 15 - - 2,726 (2,726) - - -
Other changes in equity - - (291) - (291) - (291)
Dividends 11 - - - (5,098) (5,098) - (5,098)
---------------------------------- --------- --------- ---------- --------- --------- -------- ---------
At 30 September 2022 13,596 319,411 68,904 62,035 463,946 (6,297) 457,649
(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 September 2023 and 2022
(Euro 000's) Note Three Three Nine Nine
month month month month
period period period period
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2023 2022 2023 2022
Cash flows from operating activities
Profit/ (loss) before tax 10,671 (8,182) 35,300 26,047
Adjustments for:
Depreciation of property, plant
and equipment 8 7,886 7,899 23,800 22,017
Amortisation of intangibles 9 1,106 1,140 3,365 3,327
Recognition of share-based payments 15 165 318 495 675
Interest income 5 (461) (1) (4,858) (16)
Interest expense 5 461 - 1,655 -
Unwinding of discounting on mine
rehabilitation provision 17 137 249 690 718
Other provisions 17 (287) - - -
Legal provisions 17 1 - 1 -
Net foreign exchange differences 3 (705) (5,633) (760) (15,727)
Unrealised foreign exchange loss
on financing activities 1,727 (26) (123) (27)
--------------------------------------- --------- --------- --------- ---------
Cash inflows/(outflows) from
operating activities before working
capital changes 20,701 (4,236) 59,565 37,014
Changes in working capital:
Inventories 10 620 550 699 (13,116)
Trade and other receivables 12 (5,879) (9,784) 11,449 (17,735)
Trade and other payables 16 13,172 11,797 (7,475) 15,491
Provisions 17 (103) - (397)
---------------------------------------
Cash flows from operations 28,511 (1,673) 63,841 21,654
Tax paid (266) (1,875) (3,139) (3,333)
Interest on leases liabilities 5 (6) (12) (19) (15)
Interest paid 5 (461) (250) (1,655) (734)
---------------------------------------
Net cash from operating activities 27,778 (3,810) 59,028 17,572
Cash flows from investing activities
Purchase of property, plant and
equipment 9 (18,620) (7,824) (39,143) (33,856)
Purchase of intangible assets 10 (246) (858) (294) (2,164)
Interest received 5 2 1 3,833 16
--------------------------------------- --------- --------- --------- ---------
Net cash used in investing activities (18,864) (8,681) (35,604) (36,004)
Cash flows from financing activities
Lease payments 19 (133) - (428) (315)
Net proceeds/(repayments) from
borrowings 18 8,408 (7,549) (19,664) 4,586
Proceeds from issuance of shares 14 - - - 3,643
Dividends (11,477) (5,098) (11,477) (5,098)
---------------------------------------
Net cash (used in)/ from financing
activities (3,202) (12,647) (31,569) 2,816
Net increase/(decrease) in cash and
cash equivalents 5,712 (25,138) (8,145) (15,616)
Net foreign exchange difference 3 705 5,633 760 15,727
Cash and cash equivalents :
At beginning of the period 112,646 127,133 126,448 107,517
--------------------------------------- --------- --------- --------- ---------
At end of the period 119,063 107,628 119,063 107,628
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 September 2023 and 2023
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 September 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 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
certain 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 September 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
1 2 3
(Euro 000's)
30 Sep 2023
Other financial assets
Financial assets at FV through
OCI 31 - 1,101 1,132
Trade and other receivables - - - -
Receivables (subject to provisional
pricing) - 12,257 - 12,257
Total 31 12,257 1,101 13,389
------------------------------------- ------ ------- ------ -------
31 Dec 2022
Other financial assets
Financial assets at FV through
OCI 33 - 1,101 1,134
Trade and other receivables -
Receivables (subject to provisional
pricing) - 27,557 - 27,557
Total 33 27,557 1,101 28,691
------------------------------------- ------ ------- ------ -------
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 Sep 2023
Revenue - from external customers 6,312 79,049 - 85,361
EBITDA 3,225 15,937 (61) 19,101
Depreciation/amortisation charge - (8,992) - (8,992)
Net foreign exchange gain 506 199 - 705
Finance income 174 287 - 461
Finance cost - (604) - (604)
Profit/ (loss) before tax 3,905 6,827 (61) 10,671
-------- ---------- ------ ----------
Tax (639) 1,108 - 469
-------- ---------- ------ ----------
Profit/ (loss) for the period 3,266 7,935 (61) 11,140
-------- ---------- ------ ----------
Nine month period ended 30 Sep 2023
Revenue - from external customers 19,356 235,399 - 254,755
EBITDA 9,046 50,244 (78) 59,212
Depreciation/amortisation charge - (27,165) - (27,165)
Net foreign exchange gain 49 711 - 760
Finance income 375 4,482 - 4,857
Finance cost - (2,364) - (2,364)
Profit/(loss) before tax 9,470 25,908 (78) 35,300
-------- ---------- ------ ----------
Tax (2,228) (1,624) - (3,852)
-------- ---------- ------ ----------
Profit/(loss) for the period 7,242 24,284 (78) 31,448
-------- ---------- ------ ----------
Total assets 99,663 558,551 4,070 662,284
Total liabilities (3,579) (171,656) (74) (175,309)
-------- ---------- ------ ----------
Depreciation of property, plant and
equipment - 23,800 - 23,800
-------- ---------- ------ ----------
Amortisation of intangible assets - 3,365 - 3,365
-------- ---------- ------ ----------
Total net additions of non-current
assets - 58,416 - 58,416
-------- ---------- ------ ----------
(Euro 000's) Cyprus Spain Other Total
Three month period ended 30 Sep 2022
Revenue - from external customers 8,792 73,492 - 82,284
======== ========= ========== ==========
EBITDA 6,190 (10,413) (43) (4,266)
Depreciation/amortisation charge - (9,039) - (9,039)
Net foreign exchange gain 1,511 4,122 - 5,633
Finance income - 1 - 1
Finance cost - (511) - (511)
Profit/(loss) before tax 7,701 (15,840) (43) (8,182)
======== ========= ========== ==========
Tax (590) 1,553 - 963
==========
Profit/(loss) for the period 7,111 (14,287) (43) (7,219)
==========
Nine month period ended 30 Sep 2022
Revenue - from external customers 26,532 235,421 - 261,953
======== ========= ========== ==========
EBITDA 18,509 18,663 (57) 37,115
Depreciation/amortisation charge - (25,344) - (25,344)
Net foreign exchange gain 6,827 8,900 - 15,727
Finance income - 16 - 16
Finance cost - (1,467) - (1,467)
Profit/(loss) before tax 25,336 768 (57) 26,047
======== ========= ========== ==========
Tax (2,506) (654) - (3,160)
==========
Profit/(loss) for the period 22,830 114 (57) 22,887
==========
Total assets 83,189 544,443 1,521 629,153
======== ========= ========== ==========
Total liabilities (5,544) 141,817 (307,777) (171,504)
======== ========= ========== ==========
Depreciation of property, plant and
equipment - 22,017 - 22,017
======== ========= ========== ==========
Amortisation of intangible assets - 3,327 - 3,327
======== ========= ========== ==========
Total net additions of non-current
assets - 50,812 - 50,812
======== ========= ========== ==========
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) Nine month Nine month
period ended period ended
30 Sep 2023 30 Sep 2022
Segment EUR'000 Segment EUR'000
--------------------------- -------------- -------- --------------
Offtaker 1 Copper 66,400 Copper 60,343
Offtaker 2 Copper 51,329 Copper 73,021
Offtaker 3 Copper 137,008 Copper 128,577
4. Revenue
(Euro 000's) Three Three Nine Nine month
month month month period
period period period ended
ended ended ended 30 Sep
30 Sep 30 Sep 30 Sep 2022
2023 2022 2023
Revenue from contracts with
customers (1) 86,224 89,796 259,311 275,474
Fair value losses relating to
provisional pricing within sales
(2) (863) (7,512) (4,556) (13,521)
=================================== ======== ======== ======== ===========
Total revenue 85,361 82,284 254,755 261,953
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 Q3 2023 and YTD 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 EUR1.2 million (Q3 2022: EUR1.5
million) and EUR5.7 million (YTD 2022: EUR5.7 million),
respectively.
(2) Provisional pricing impact represents the change in fair
value of the embedded derivative arising on sales of
concentrate.
5. Net Finance (Costs)/Income
(Euro 000's) Three Three Nine Nine
month month month month
period period period period
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2023 2022 2023 2022
Interest expense
Other interest (461) (250) (1,655) (734)
Interest on lease liabilities (6) (12) (19) (15)
Unwinding of discount on mine rehabilitation
provision (Note 17) (137) (249) (690) (718)
Interest income
Financial interests (1) 459 1 1,025 16
Other received interests (2) 2 - 3,832 -
(143) (510) 2,493 (1,451)
----------------------------------------------- -------- -------- -------- --------
(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 Nine Nine month
month period month month period
ended 30 period period ended
Sep 2023 ended ended 30 Sep
(Euro 000's) 30 Sep 30 Sep 2022
2022 2023
Income taxes
Current income tax income/ (expense) 469 963 (3,852) (3,160)
Income tax income/ (expense)
recognised in statement of profit
and loss 469 963 (3,852) (3,160)
-------------- -------- -------- -----------
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:
(Euro 000's) Three Three Nine Nine
month month month month
period period period period
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2023 2022 2023 2022
Profit/ (loss) attributable to
equity holders of the parent 11,570 (6,608) 32,481 24,274
-------- -------- -------- --------
Weighted number of ordinary shares
for the purposes of basic earnings
per share (000's) 139,880 139,880 139,880 139,716
-------- -------- -------- --------
Basic earnings per share (EUR
cents/share) 8.3 (4.7) 23.2 17.4
-------- -------- -------- --------
Weighted number of ordinary shares
for the purposes of fully diluted
earnings per share (000's) 144,728 143,423 144,051 142,635
-------- -------- -------- --------
Fully diluted earnings per share
(EUR cents/share) 8.0 (4.6) 22 .6 17.0
-------- -------- -------- --------
At 30 September 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 2023 for fully diluted earnings per
share.
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 - 1,378 29,404 691 - 33,856
Reclassifications 15,300 - 4,979 (20,279) - - -
Increase in rehab.
Provision 1,365 - - - - - 1,365
At 30 September 2022 84,051 7,076 289,703 31,985 52,358 801 465,974
Additions - - (116) 20,069 - - 19,953
Increase in rehab.
Provision 362 - - - - - 362
Reclassifications - - 1,748 (1,819) - 71 -
Advances 103 - - - - - 103
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 - 2,975 29,255 9,762 24 42,052
Increase in rehab.
Provision 2,891 - - - - - 2,891
Reclassifications - - 19,014 (19,010) - - 4
At 30 September
2023 83,263 7,076 313,324 60,480 62,120 896 527,159
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
Depreciation
At 1 January 2022 16,026 1,546 67,991 - 11,380 714 97,657
Charge for the period 3,291 428 15,574 - 2,705 19 22,017
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 30 September 2022 19,317 1,974 83,565 - 14,085 733 119,674
Charge for the period 1,137 24 5,617 - 836 6 7,620
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 31 December 2022 20,454 1,998 89,182 - 14,921 739 127,294
Charge for the period 3,113 401 17,311 - 2,959 16 23,800
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 30 September
2023 23,567 2,399 106,493 - 17,880 755 151,094
Net book value
At 30 September
2023 59,696 4,677 206,831 60,480 44,240 141 376,065
----------------------- ----------- ------------- ----------- -------------- --------- -------- --------
At 31 December 2022 59,872 5,078 202,153 50,235 37,437 133 354,908
(1) Assets under construction at 30 September 2023 were EUR60.5
million (2022: EUR32.0 million) which include sustaining capital
expenditures, tailings dam 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.
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 2,164 - 2,164
----------------------- -------- ------------------ --------
At 30 September 2022 82,522 8,595 91,117
(Disposals)/additions (1,267) 47 (1,220)
----------------------- -------- ------------------ --------
At 31 December 2022 81,255 8,642 89,897
Additions 58 36 94
Disposals (200) - (200)
----------------------- -------- ------------------ --------
At 30 September 2023 81,113 8,678 89,791
Amortisation
At 1 January 2022 23,214 8,371 31,585
Charge for the period 3,278 49 3,327
----------------------- -------- ------------------ --------
At 30 September 2022 26,492 8,420 34,912
Charge for the period 1,135 20 1,155
----------------------- -------- ------------------ --------
At 31 December 2022 27,627 8,440 36,067
Charge for the period 3,336 29 3,365
----------------------- -------- ------------------ --------
At 30 September 2023 30,963 8,469 39,432
Net book value
At 30 September 2023 50,150 209 50,359
----------------------- -------- ------------------ --------
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 Sep 2023 31 Dec 2022
Finished products 8,328 4,547
Materials and supplies 25,744 31,330
Work in progress 4,070 2,964
Total inventories 38,142 38,841
------------------------ ------------- ------------
As of 30 September 2023, copper concentrate produced and not
sold amounted to 7,358 tonnes (31 Dec 2022: 3,529 tonnes).
Accordingly, the inventory for copper concentrate was EUR8.3
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 paid
Cash dividends declared and paid during the period:
(Euro 000's) Three Three month Nine month Nine month
month period period period period
ended 30 ended 30 ended 30 ended 30
Sep 2023 Sep 2022 Sep 2023 Sep 2022
Final dividends declared
and paid 4,956 - 4,956 -
Interim dividend declared
and paid 6,520 5,098 6,520 5,098
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).
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. The 2023
Interim Dividend was paid on 28 September 2023.
12. Trade and other receivables
(Euro 000's) 30 Sep 31 Dec 2022
2023
Non-current
Deposits 310 256
Loans 229 -
Prepayments for service contract 21,451 12,865
Other non-current receivables 2,690 3,241
----------------------------------------------- -------- ------------
24,680 16,362
Current
Trade receivables at fair value - subject
to provisional pricing 7,806 14,757
Trade receivables from shareholders at fair
value - subject to provisional pricing (Note
22.3) 4,451 12,800
Other receivables from related parties at
amortised cost (Note 22.3) 56 56
Deposits 37 37
VAT receivables 26,241 28,856
Tax advances 1,107 9
Prepayments 3,817 5,845
Other current assets 873 1,795
----------------------------------------------- -------- ------------
44,388 64,155
Allowance for expected credit losses - -
Total trade and other receivables 69,068 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).
Other non-current receivables 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
prepayment 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 Sep 31 Dec
2023 2022
Unrestricted cash and cash equivalents
at Group level 98,032 108,550
Unrestricted cash and cash equivalents
at Operation level 21,031 17,567
Restricted cash and cash equivalents at
Operation level - 331
Consolidated cash and cash equivalents 119,063 126,448
----------------------------------------- -------- --------
Restricted cash amounted at 31 December 2022 to EUR0.3 million
was held in escrow, which represented funds utilized by the Company
to cover possible remaining costs due to Astor following litigation
during 2022. 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 Sep 31 Dec 2023
2023
Euro - functional and presentation currency 62,625 84,146
Great Britain Pound 360 895
United States Dollar 56,078 41,407
Consolidated cash and cash equivalents 119,063 126,448
--------------------------------------------- -------- ------------
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-Sep-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 September 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 September
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 Sep 2023 2.968 4,848,500
===================================
Warrants
As at 30 September 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 675 - - - - - 675
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 - - - (12) - - (12)
Other changes in
reserves - - - - - (291) (291)
-------------------- --------- -------- ------------ -------------- ------------------ ---------------- -------
At 30 September
2022 9,761 208 37,778 (1,159) 8,316 14,000 68,904
Recognition of
share-based
payments 604 - - - - - 604
Other changes in
reserves - - - - - 291 291
Change in fair - - - - - - -
value of financial
assets at fair
value through OCI
-------------------- --------- -------- ------------ -------------- ------------------ ---------------- -------
At 31 December
2022 10,365 208 37,778 (1,159) 8,316 14,291 69,799
Recognition of
share-based
payments 495 - - - - - 495
Change in fair - - - - - - -
value of financial
assets at fair
value through OCI
-------------------- --------- -------- ------------ -------------- ------------------ ---------------- -------
At 30 September
2023 10,860 208 37,778 (1,153) 8,316 14,291 70,300
(1) Depletion factor reserve
At 30 September 2023, the Group has recognised EURnil million
(YTD 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 Sep 31 Dec 2022
2023
Non-current
Other non-current payables 2,000 2,000
Government grant 1,415 15
3,415 2,015
Current
Trade payables 79,662 85,038
Accruals 3,355 3, 322
VAT payables - 259
Other 356 1,403
83,373 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 - - 332 332
Finance cost - - 718 718
----------------------- ----------------- ------------ --------------- ------------
At 30 September 2022 - 279 28,382 28,661
Additions - 30 - 30
Reclassification 1,435 - - 1,435
Used of provision - (10) (413) (423)
Reversal of provision - (73) (3,497) (3,570)
Finance cost - - (1,098) (1,098)
----------------------- ----------------- ------------ --------------- ------------
At 31 December 2022 1,435 226 23,374 25,035
Additions - 1 - 1
Used of provision - - (397) (397)
Revision of provision - - 2,891 2,891
Finance cost - - 690 690
At 30 September 2023 1,435 227 26,558 28,220
----------------------- ----------------- ------------ --------------- ------------
(Euro 000's) 30 Sep 2023 31 Dec 2022
Non-current 27,589 24,083
Current 631 952
-------------- ------------- ------------
Total 28,220 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 September 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 September
2023. Management has individually reviewed each case and
established a provision of EUR0.2 million as of 30 September 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 Sep 2023 31 Dec 2022
Non-current borrowings
Credit facilities 15,496 20,768
------------------------ ------------- ------------
15,496 20,768
Current borrowings
Credit facilities 36,803 52,595
------------------------ ------------- ------------
36,803 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
EUR21.5 million at 30 September 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 2.25 % with an average margin of 1.53%.
At 30 September 2023, the Group had used EUR52.3 million of its
facilities and had undrawn facilities of EUR83.7 million.
19. Lease liabilities
(Euro 000's) 30 Sep 31 Dec 2022
2023
Non-current
Lease liabilities 4,002 4,378
------------------- -------- ------------
4,002 4,378
Current
Lease liabilities 503 536
------------------- -------- ------------
503 536
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 EUR0.4 million (2022: EUR0.4 million) for the
nine month period ended 30 September 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 September 2023, the remaining term of this lease is nine
years and a quarter.
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 September 2023, the remaining term of this lease is eight years
and a quarter.
(Euro 000's) 30 Sep 2023 31 Dec 2022
Minimum lease payments due:
- Within one year 503 536
- Two to five years 1,935 1,957
- Over five years 2,067 2,421
----------------------------------------- ------------------ ------------
Present value of minimum lease payments
due 4,505 4,914
(Euro 000's) Lease liabilities
At 1 January 2023 4,914
Interest expense 19
Lease payments (428)
----------------------------------------- ------------------
At 30 September 2023 4,505
At 30 September 2023
Non-current liabilities 4,002
Current liabilities 503
----------------------------------------- ------------------
4,505
20. Acquisition, incorporation and disposal of subsidiaries
There were no acquisitions or incorporation of subsidiaries
during the nine month period ended 30 September 2023 and 2023.
21. Winding-up of subsidiaries
There were no operations wound up during the nine month period
ended 30 September 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 Nine Nine
month month month month
period period period period
ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep
2023 2022 2023 2022
Directors' remuneration and fees 455 262 1,070 758
Directors' bonus (1) 159 - 322 357
Share option-based benefits and
other benefits to directors 29 63 97 190
Key management personnel fees 244 144 602 426
Key management bonus (1) 112 - 221 239
Share option-based and other
benefits to key management personnel 29 61 97 184
--------------------------------------- -------- -------- -------- --------
1,028 530 2,409 2,154
(1) These amounts related to the performance bonus for 2022
approved by the Board of Directors of the Company during YTD 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 Nine month Nine month
month period period period period
ended 30 ended 30 ended 30 ended 30
Sep 2023 Sep 2022 Sep 2023 Sep 2022
Trafigura- Revenue from contracts 29,382 17,270 63,202 62,078
Freight services - - - -
29,382 17,270 63,202 62,078
Gain / (losses) relating
provisional pricing within
sales 351 68 3,198 (1,735)
----------------------------------- -------------- ------------ ----------- -----------
Trafigura - Total revenue
from contracts 29,733 17,338 66,400 60,343
ii) Period-end balances with related parties
(Euro 000's) 30 Sep 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 Sep 2023 31 Dec 2022
Trafigura - Debtor balance- subject
to provisional pricing 4,451 12,800
------------------------------------- ------------- ------------
Total (Note 12) 4,451 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 are currently 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
Geopolitical developments 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.
-- 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. This
dividend was paid on 28 September 2023.
26. Events after the Reporting Period
-- On 10 October 2023, Atalaya announced that a PDMR purchased 5,000 ordinary shares.
-- On 13 November 2023, Atalaya announced its intention to apply
for the Company's ordinary shares to be admitted to the premium
listing segment of the Official List maintained by the Financial
Conduct Authority ("FCA") and to trading on the London Stock
Exchange plc's main market for listed securities.
-- On 14 November 2023, Atalaya announced its intention to
re-domicile the Company by transferring its registered office from
the Republic of Cyprus to the Kingdom of Spain.
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END
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(END) Dow Jones Newswires
November 16, 2023 02:00 ET (07:00 GMT)
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