ATALAYA MINING PLC Highlights
Improved performance in Q4 2022 provides the basis for stronger 2023 outlook
Improved copper production of 14.0 kt at AISC of
EBITDA of
FY2022 included good operational performance and satisfactory financial results when considering the many external challenges
Copper production of 52.3 kt, partially impacted by the logistics strike in Q1 2022
EBITDA of
Net cash remains strong at
Final Dividend of
Investments in 2023 will continue to focus on growth, cost reductions and decarbonisation, including exploration, E-LIX Phase I and the 50 MW solar plant
Improved performance is expected for 2023, due in part to lower forecast electricity prices
In 2022, we were impacted by a significant increase in key input costs, especially in relation to electricity, but I am proud of the decisive action we took to enhance the resilience of our operations, including securing a long-term fixed price power purchase agreement that we have benefitted from since the beginning of 2023. Contribution from our 50 MW solar plant will provide additional price stability later this year.
As always, Atalaya remains focused on growing and enhancing its portfolio of copper assets in
Finally, we remain committed to developing Proyecto Touro into a modern and sustainable mine that can provide
Investor Presentation Reminder
Note to Readers
The financial information for the year ended
Ore mined was 3.5 million tonnes in Q4 2022 (Q4 2021: 3.5 million tonnes) and 14.9 million tonnes in FY2022 (FY2021: 13.5 million tonnes).
Waste mined was 5.3 million tonnes in Q4 2022 (Q4 2021: 7.3 million tonnes) and 24.7 million tonnes in FY2022 (FY2021: 30.5 million tonnes).
Processing
The plant processed ore of 4.0 million tonnes during Q4 2022 (Q4 2021: 3.8 million tonnes) and 15.4 million tonnes in FY2022 (FY2021: 15.8 million tonnes), demonstrating strong plant performance despite the negative impact of the Q1 2022 transport sector strike and related stoppage. The plant continues to highlight its ability to operate above its 15 million tonne per annum nameplate capacity on a consistent basis.
Copper grade was 0.41% in Q4 2022 (Q4 2021: 0.41%) and 0.40% in FY2022 (FY2021: 0.41%). Modestly lower grades in FY2022 were the result of blending with lower grade stockpiles during H1 2022 due to pit sequencing.
Copper recoveries were 86.24% in Q4 2022 (Q4 2021: 87.04%) and 85.84% in FY2022 (FY2021: 85.97%). Recoveries in certain periods in FY2022 were negatively impacted by the characteristics of the ore processed.
Production
Copper production was 13,969 tonnes in Q4 2022 (Q4 2021: 13,872 tonnes) and 52,269 tonnes in FY2022 (FY2021: 56,097 tonnes). Lower production for FY2022 was the result of lower grades (pit sequencing) and lower throughput (including the impact of the Q1 2022 plant maintenance stoppage).
On-site copper concentrate inventories at
Copper contained in concentrates sold was 14,027 tonnes in Q4 2022 (Q4 2021: 13,568 tonnes) and 52,323 tonnes in FY2022 (FY2021: 61,662 tonnes).
Q4 2022 and FY2022 Financial Results Highlights
Income Statement
Revenues were
The realised copper price (excluding QPs) was
Operating costs were
EBITDA was
Profit after tax was
Cash Flow Statement
Cash flows from operating activities before changes in working capital were positive
Cash flows used in investing activities were
Cash flows from financing activities were positive
Balance Sheet
Despite cost inflation and the impact of unprecedented electricity costs in 2022, Atalaya's balance sheet remains strong with consolidated cash and cash equivalents of
Net of current and non-current borrowings of
Total working capital was
Electricity Market in
FY2022 Average Prices
During 2022, electricity prices in
Electricity prices moderated in Q4 2022, due to the combination of mild weather in
Prices in 2023
So far in 2023, the estimated realised market electricity price in
Since
Renewable Energy Projects
The Company continues to advance construction of its 50 MW solar plant at Riotinto, which is expected to provide approximately 22% of its current electricity needs when fully operational. All major materials are on site and civil works are underway. Start-up of the 50 MW solar plant is now expected to be in late 2023. Combined, the 50 MW solar plant and long-term PPA will provide over 50% of the Company's current electricity requirements at a rate below historical prices in
As previously disclosed, the Company continues to evaluate additional renewable power initiatives that could deliver further low cost and carbon-free electricity for its operations at Riotinto, including wind turbines. Following the installation of an evaluation tower in
Outlook for 2023
Production
As announced in the Company's Q4 2022 Operations Update, production guidance for 2023 is 53,000 to 55,000 tonnes of copper, which represents an increase over FY2022 production of 52,269 tonnes.
Operating Costs
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. Although prices have stabilised for certain items, overall input costs remain well above 2021 levels.
In addition, electricity continues to be a major component of the Company's cost structure due to the elevated market prices in
Accordingly, cash cost and AISC guidance for 2023 are as follows: 2023 cash cost range of
2023 AISC range of
These cost guidance ranges are based on an assumed market electricity price range of
Capital Expenditures
Atalaya continues to focus on growing its production, reducing its cost structure and enhancing the long-term sustainability of its operations.
For 2023, the Company will be making the following non-sustaining capital investments:
Exploration
Atalaya controls large and strategic land packages across
Following the promising results from drilling campaigns in 2022, the Company looks forward to continuing and expanding its exploration efforts in the coming year. As a result, Atalaya's exploration budget for 2023 is approximately
2022 Final Dividend
In 2021, Atalaya implemented a dividend policy that seeks to provide capital returns to its shareholders and allows for continued investments in its portfolio of low capital intensity growth projects. The dividend policy consists of an annual pay-out of 30 - 50% of free cash flow generated during the applicable financial year and is payable in two half-yearly instalments.
The Board of Directors has proposed a final dividend for 2022 of
Asset Portfolio Update
Proyecto Riotinto
On
The Riotinto PEA demonstrated strong potential economic results, including a
The Riotinto PEA serves as a foundation for further optimisation and the Company will continue to evaluate opportunities to enhance value, including the potential application of the E-LIX System, considering a revised mining sequence to bring forward the highest value material and studying the refurbishment of existing processing equipment at Riotinto in order to reduce the capital costs associated with plant modifications.
E-LIX Phase I Plant
Construction activities at the E-LIX Phase I plant continue to make good progress. With most equipment on site or in transit, commissioning activities are now expected in H2 2023.
Once operational, the E-LIX plant is expected to produce high purity copper or zinc metals on site, allowing the Company to potentially achieve higher metal recoveries from complex polymetallic ores, lower transportation and concentrate treatment charges and a reduced carbon footprint.
Three core rigs continue to be active and are focused on step-out drilling at the Masa Valverde deposit, resource definition drilling at the Campanario Trend and step out drilling around the new discovery made at the Mojarra Trend. A comprehensive update on recent exploration results at these targets was announced in
The second hole (MR02) drilled at the Mojarra Trend, in a previously undrilled area, intersected massive sulphides at 434m depth. Assay results returned a main mineralised interval of 18.75m at 0.84% Cu, 0.63% Zn, 0.66% Pb and 76.24 g/t Ag including a higher-grade interval of 6.80m at 1.22% Cu and 101.60 g/t Ag.
Step-out drilling in the westernmost area of the Masa Valverde deposit discovered a new high-grade zinc zone in hole MJ54, including a main mineralised interval of 18.00m at 0.25% Cu, 8.30% Zn, 2.49% Pb, 60.17 g/t Ag and 0.89 g/t Au from 852 meters depth.
Resource definition drilling at the Campanario Trend continues to encounter shallow, massive, and semi-massive sulphides with, in cases, associated high grade intersections. For example, hole CA42 in the western part of the Campanario Trend assayed 7.50m at 0.45% Cu, 1.09 g/t Ag and 6.67 g/t Au from 35m depth.
An airborne gravity gradiometry ('AGG') and magnetic survey covering the entire PMV has been completed and preliminary results already received. AGG is a leading technology in the search for buried mineral deposits, especially those of the size that is typical in the Iberian Pyrite Belt.
Work continues on the PEA which will consider operating PMV as a satellite deposit by processing mined material at Riotinto's 15 Mtpa plant. Further metallurgical testing for the Masa Valverde and Majadales deposits is planned for inclusion in the PEA, which may also include new results from the regional drilling programme. The permitting process for PMV is also ongoing.
Proyecto Touro
Atalaya remains fully committed to the development of the Touro copper project in Galicia, which could become a new source of copper production for
In
Running parallel with the Touro permitting process, the Company continues to focus on numerous initiatives related to securing the social licence, including engaging with the many stakeholders in the region in advance of its plans to submit a new improved project design. Positive and favourable feedback from numerous meetings with municipalities, farmer and fishermen associations and other industries indicate meaningful support towards the development of a new and modern mining project.
The Company is operating its new water treatment plant at Touro, which is addressing the legacy issues associated with acid water runoff from the historical mine, which closed in 1987. The construction of the treatment plant was contemplated in the original project proposal, but Atalaya volunteered to fix the historical acid water issues prior to the new Environmental Impact Assessment ('EIA') in order to demonstrate its operating philosophy and the benefits of modern operating systems. The field work carried out by Atalaya has resulted in an immediate and visible improvement of the water systems surrounding the project.
Atalaya continues to be confident that its approach to Touro, which includes fully plastic lined thickened tailings with zero discharge, is consistent with international best practice and will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to the development of the project.
Proyecto Ossa Morena
Two short drilling programmes were completed at the Hinchona and Chaparral copper-gold prospects, which are both located in the central part of the district. A second drilling program at Chaparral is currently in progress. Drilling has been also planned for the Guijarro gold project located immediately west of Chaparral.
At Hinchona, four holes totalling 1,874m were completed, with the initial results previously announced in
At Chaparral, four holes totalling 1,185m were completed and results will be published once the exploration campaign is completed. Drilling at the flagship Alconchel-Pallares copper-gold project is expected to commence during Q3 2023.
Proyecto Riotinto East
Drill target definition continues to progress and the first drill testing of selected anomalies is planned to start during Q2 2023. An airborne gravity gradiometry and magnetic survey covering the entire project was completed and preliminary results expected by the end of
This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Contact:
Tel: + 44 20 3757 6882
About
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
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