Q3 2021 Financial Results
18 November 2021
Atalaya Mining Plc.
("Atalaya" and/or the "Company")
Q3 2021 Financial Results
Atalaya Mining Plc (AIM: ATYM; TSX: AYM), is pleased to announce its quarterly and nine-month results for the period ended 30 September 2021 ("Q3 2021" and "YTD 2021" respectively), together with its unaudited interim condensed consolidated financial statements for the year to date.
The Unaudited Interim Condensed Consolidated Financial Statements for the three and nine months ended 30 September 2021 are also available under the Company´s profile on SEDAR at www.sedar.com and on Atalaya`s website at www.atalayamining.com .
YTD Financial Highlights
· EBITDA increased to €148.2 million in YTD 2021 (YTD 2020: €44.4 million) and cash flows from operating activities increased to €129.2 million for YTD 2021 (YTD 2020: €41.8 million) as a result of robust operational performance at Proyecto Riotinto and strong copper prices.
· Following the increased 2021 production guidance as announced on 13 October 2021, the Company is also updating its 2021 cost guidance, with cash costs now expected to be in the range of US$2.15/lb - US$2.25/lb and AISC now expected to be at the low end of the previous guidance range of US$2.50/lb - US$2.65/lb.
· Total cash as at 30 September 2021 was €140.9 million (including restricted cash of €15.4 million), up from €37.8 million as at 31 December 2020. Atalaya maintains a strong balance sheet with net cash of €88.9 million as at 30 September 2021.
· On 27 October 2021, the Board of Directors declared an Inaugural Dividend of US$0.395 per ordinary share, equivalent to £ 0.294 per share or €0.345 per share.
|
Quarter ended 30 September |
|
Q3 2021 |
Q3 2020 |
|
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Revenues from operations |
€k |
107,161 |
65,836 |
|
304,265 |
183,569 |
|
Operating costs |
€k |
(58,362) |
(43,571) |
|
(156,054) |
(139,196) |
|
EBITDA |
€k |
48,799 |
22,265 |
|
148,211 |
44,373 |
|
Profit after tax for the period |
€k |
38,206 |
12,237 |
|
104,199 |
18,203 |
|
Basics earnings per share |
€ cents/share |
27.5 |
9.0 |
|
75.9 |
13.7 |
|
Dividend per share |
$/share |
0.395 |
- |
|
0.395 |
- |
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
€k |
58,213 |
18,820 |
|
129,212 |
41,820 |
|
Cash flows used in investing activities |
€k |
(6,982) |
(6,338) |
|
(77,835) |
(19,669) |
|
Cash flows used in financing activities |
€k |
(3,131) |
(15,085) |
|
51,710 |
(454) |
|
|
|
|
|
|
|
|
|
Net cash / (debt) position (1) |
€k |
88,854 |
(23,226) |
|
88,854 |
(23,226) |
|
Working capital surplus |
€k |
126,891 |
25,002 |
|
126,891 |
25,002 |
|
|
|
|
|
|
|
|
|
Average realised copper price |
$/lb |
4.31 |
2.72 |
|
4.08 |
2.60 |
|
|
|
|
|
|
|
|
|
Cu concentrate produced |
(tonnes) |
64,262 |
66,091 |
|
206,018 |
187,032 |
|
Cu production |
(tonnes) |
13,893 |
14,695 |
|
42,225 |
41,559 |
|
Cash costs |
$/lb payable |
2.19 |
1.94 |
|
2.16 |
1.93 |
|
All-In Sustaining Cost |
$/lb payable |
2.48 |
2.20 |
|
2.49 |
2.17 |
(1) Includes restricted cash and bank borrowings at 30 September 2021 and includes Deferred Consideration at 30 September 2020.
Q3 Financial Highlights
· Revenues for Q3 2021 increased to €107.2 million compared with €65.8 million for the three months ended 30 September 2020 ("Q3 2020"). Higher revenues were the result of increased realised copper prices and slightly larger volumes of concentrate sold.
· Operating costs during Q3 2021 were €58.4 million compared with €43.6 million in Q3 2020. This increase mainly reflects the higher volumes of waste mined at greater unit costs at Proyecto Riotinto.
· Despite the increase in operating costs, EBITDA for Q3 2021 increased to €48.8 million compared with €22.3 million in Q3 2020 driven by the larger volume of concentrate sold and higher copper prices.
· Cash costs for Q3 2021 were $2.19/lb of payable copper, higher than in Q3 2020 ($1.94/lb). This increase is mainly the result of higher volumes of waste mined plus higher freight rates.
· All-in Sustaining Costs ("AISC") during Q3 2021 amounted to $2.48/lb of payable copper, higher than Q3 2020 at $2.20/lb. The increase in AISC was mainly driven by the same impacts as those for cash costs. Reported AISC excludes one-off investments in the tailings dam, which amounted to €2.8 million for the quarter (Q3 2020: €2.5 million).
· Inventories of concentrate as at 30 September 2021 amounted to €3.6 million (€6.7 million at 31 December 2020).
· Working capital surplus as at 30 September 2021 of €126.9 million, representing a €144.8 million increase from a €17.9 million deficit as at 31 December 2020. The increase was mainly due to the cash generated from concentrate sold in the period supported by higher copper prices, as well as the use of long term borrowings to finance the payment of the deferred consideration which was classified as short term as at 31 December 2020.
· Total cash balances at 30 September 2021 comprised unrestricted cash balances of €125.4 million and restricted cash balances of €15.4 million. Total cash balances at 31 December 2020 of €37.8 million were wholly unrestricted.
· Net cash flow from operating activities was €58.2 million for Q3 2021 compared with €18.8 million during Q3 2020. Cash flows from operating activities were €129.2 million for YTD 2021 compared with €41.8 million for the same period in 2020.
· Net cash flow used for investing activities amounted to outflows of €7.0 million and €77.8 million for Q3 2021 and YTD 2021, respectively, compared with outflows of €6.3 million and €19.7 million for the same periods in the prior year. Cash outflows for YTD 2021 mostly relate to the €53 million paid to Astor in Q1 2021, sustaining capex and investments in the tailings dam.
· Net cash flow from financing activities amounted to an outflow of €3.1 million and an inflow of €51.7 million for Q3 2021 and YTD 2021 respectively, compared with outflows of €15.1 million and €0.5 million, respectively, for the same periods in the previous year. The cash generated from financing activities of €51.7 million for YTD 2021 included unsecured facilities to fund the payment to Astor in Q1 2021.
Dividend
· An inaugural dividend of approximately $0.395 per share was declared on 27 October 2021. The Inaugural Dividend is for the nine months ended 30 September 2021.
· The Company's Board of Directors also approved a future dividend policy which will take effect in financial year 2022 and make an annual pay-out of between 30% and 50% of free cash flow generated during the applicable financial year.
Q3 Operational Highlights
Proyecto Riotinto
· Copper production during Q3 2021 was 13,893 tonnes, a modest decrease from Q3 2020 due to planned maintenance stoppages. Copper production for YTD 2021 was 42,225 tonnes compared with 41,559 tonnes during YTD 2020.
· Ore processed during Q3 2021 was 3.9 million tonnes, in line with Q3 2020 when ore processed amounted to 4.0 million tonnes. Total ore processed during YTD 2021 amounted to 12.0 million tonnes (YTD 2020: 11.0 million tonnes).
· During Q3 2021, some cost reduction initiatives were implemented including an expert system to control the SAG mill operation that resulted in lower energy consumption as well as an associated reduction of CO2 emissions.
· Permitting of a 50 MW solar plant for self-consumption has advanced significantly and final permits are expected in the coming weeks, with construction to start immediately after. The selection of construction contractor for the solar plant is ongoing.
· Flotation improvements are being investigated with the use of new reagents focused on increased recoveries.
Proyecto Touro
· All of the documents and reports required for the environmental evaluation of the new project design for Touro have been reviewed and prepared for filing. The new project design includes initiatives to eliminate the water over the thickened tailings that will be stored in a plastic lined basin with zero water discharge. Initiatives to treat the water runoff from the historic mine will be implemented with the new project.
· The Company continues to be confident that its approach to Proyecto Touro is in line with international best practice and has been engaging in recent months with local and regional stakeholders prior to the public consultation period that will commence once the Environmental Impact Evaluation starts for the new project.
Proyecto Masa Valverde
· As announced on 6 October 2021, exploration work continues at Proyecto Masa Valverde, which includes the Masa Valverde polymetallic deposit, the Majadales discovery and the unexplored Campanario-Descamisada area.
· Following positive drilling results, including high grade intercepts within broad intervals of massive and stockwork type polymetallic sulphide mineralisation at both Masa Valverde and Majadales, the Company has decided to expand its drilling campaign beyond the 8,000 metres originally planned. Updates on the drilling results will be disclosed to the market in due course and as appropriate.
· These drilling results will be incorporated into the NI 43-101 compliant report for Proyecto Masa Valverde that is currently being prepared by CSA Global and expected by early Q1 2022.
Proyecto Riotinto Este
· Investigation permits were granted during 2021 and the Company now has access to two of the three investigation permits at Riotinto Este: Cerro Negro and Los Herreros. The third investigation permit, Peñas Blancas, continues to progress and is expected to be granted in the coming months.
· An electromagnetic airborne geophysical survey has started. The survey will cover the investigation permits area located immediately east of Proyecto Riotinto and along the same structural and stratigraphic setting .
E-LIX Update
· The E-LIX pilot plant continues to operate and gather data as planned, demonstrating the potential range of applications for this technology, which enables the processing of copper and zinc concentrates to produce cathodes on site.
· The feasibility study for the construction of an industrial plant has shown initial results that are encouraging and a process of iterative optimization review is ongoing.
· The Company is currently evaluating development options with the inventor and owner of the ELIX System, LAIN Technologies, with the aim of constructing a phased industrial plant.
Reserves and Resources Updates at Proyecto Riotinto
· Following an independent reserve estimate which confirmed a long mine life at the Cerro Colorado open pit, studies have advanced focusing on the addition of new resources contained in satellite deposits at Proyecto Riotinto.
· Work is ongoing on the preparation of a NI 43-101 compliant technical report for the Cerro Colorado, San Dionisio and San Antonio deposits. A large portion of the resources at San Dionisio are potentially mineable by open pit and further polymetallic mineralization could be exploited using underground mining methods at both the San Dionisio and San Antonio deposits.
Outlook 2021
· As a result of the strong performance at Proyecto Riotinto year-to-date, the Company increased its 2021 copper production guidance to 54,000 - 56,000 tonnes, as previously announced on 13 October 2021.
· The Company is also providing updated cost guidance for 2021. Cash costs are now expected to be in the range of US$2.15/lb - US$2.25/lb (from US$2.25/lb - US$2.35/lb previously) and AISC is now expected to be at the low end of the previous guidance range of US$2.50/lb - US$2.65/lb.
COVID-19 Update
· Management continues to monitor the impact of COVID-19 on the operations and the ongoing cost structure and will update the market with any changes in expectations.
Alberto Lavandeira, CEO commented:
"I am pleased to report another strong quarter and year-to-date for Atalaya Mining. Robust operational performance, combined with strong copper prices, has seen our EBITDA for the first nine months of 2021 more than triple from the amount generated during the same period of 2020. We have also greatly strengthened our balance sheet, with net cash of €89 million at the end of Q3 2021.
This continued strong performance, underpinned by our solid balance sheet, makes us confident we will achieve our increased 2021 copper production guidance of between 54,000 - 56,000 tonnes.
The announcement of our inaugural dividend in October also expresses the confidence the Board has for Atalaya's future and allows us to reward our loyal shareholders for their continued support while at the same time growing the Company. "
Investor Presentation Reminder
Alberto Lavandeira and César Sánchez (CFO) will be holding a live presentation regarding the Q3 2021 results via the Investor Meet Company platform at 11:00 GMT today. To register please visit the following link and click on "Add to Meet" Atalaya:
https://www.investormeetcompany.com/atalaya-mining-plc/register-investor
Investors who already follow Atalaya on the Investor Meet Company platform will automatically be invited.
This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Contacts:
|
SEC Newgate UK |
Elisabeth Cowell / Tom Carnegie |
+ 44 20 3757 6880 |
|
4C Communications |
Carina Corbett |
+44 20 3170 7973 |
|
Canaccord Genuity (NOMAD and Joint Broker) |
Henry Fitzgerald-O'Connor / James Asensio |
+44 20 7523 8000 |
|
BMO Capital Markets (Joint Broker) |
Tom Rider / 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 and TSX-listed mining and development group which produces copper concentrates and silver by-product at its wholly owned Proyecto Riotinto site in southwest Spain. 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 centralised 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. For further information, visit www.atalayamining.com
Management's review
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2021 and 2020
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. The unaudited interim condensed consolidated financial statements have not been reviewed by Atalaya's auditors.
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"), to enable the reader to assess material changes in the financial position between 31 December 2020 and 30 September 2021 and results of operations for the three and nine months ended 30 September 2021 and 2020.
This report has been prepared as of 17 November 2021. 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 2021. 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 2020, and the unaudited interim condensed consolidated financial statements for the period ended 30 September 2020. These documents can be found on SEDAR at www.sedar.com and on Atalaya's website at www.atalayamining.com .
Atalaya prepares its Annual Financial Statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by EU and its Unaudited Interim Condensed Consolidated Financial Statements in accordance with International Accounting Standards 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 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 and on the Toronto Stock Exchange ("TSX") on 20 December 2010 under the symbol AYM. The Company continued to be listed on AIM and the TSX as at 30 September 2021.
Atalaya is a European mining and development company and currently owns three mining projects: Proyecto Riotinto which includes other satellite projects in the Proyecto Riotinto District, Proyecto Touro and Proyecto Masa Valverde. In addition, the Company has an earn-in agreement to acquire three investigation permits at Proyecto Riotinto Este.
Proyecto Riotinto
Proyecto Riotinto, wholly owned by the Company's subsidiary Atalaya Riotinto Minera, S.L.U., is located in Huelva, Spain. The Group operates the Cerro Colorado open pit mine and its associated processing plant where copper in concentrate and silver by-product is produced. A brownfield expansion of the plant was completed in 2019 and successfully commissioned in 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 mineralisation, which will add to the potential of Proyecto Touro.
Proyecto Masa Valverde
On 21 October 2020, the Company announced that it had 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.
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 2021 and 2020, respectively.
|
Units expressed in accordance with the international system of units (SI) |
Unit |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
|
|
|
|
|
|
|
|
|
Ore mined |
t |
3,420,922 |
3,836,108 |
10,041,248 |
10,097,800 |
|
|
Ore processed |
t |
3,944,934 |
3,974,821 |
11,976,051 |
10,974,063 |
|
|
|
|
|
|
|
|
|
|
Copper ore grade |
% |
0.40 |
0.44 |
0.41 |
0.45 |
|
|
Copper concentrate grade |
% |
21.62 |
22.20 |
20.50 |
22.22 |
|
|
Copper recovery rate |
% |
87.24 |
83.78 |
85.63 |
84.13 |
|
|
|
|
|
|
|
|
|
|
Copper concentrate |
t |
64,262 |
66,091 |
206,018 |
187,032 |
|
|
Copper contained in concentrate |
t |
13,893 |
14,695 |
42,225 |
41,559 |
|
|
Payable copper contained in concentrate |
t |
13,251 |
14,034 |
40,165 |
39,688 |
|
|
Cash cost* |
US$/lb payable |
2.19 |
1.94 |
2.16 |
1.93 |
|
|
All-in sustaining cost* |
US$/lb payable |
2.48 |
2.20 |
2.49 |
2.17 |
|
(*) Refer to Section 5 of this Management's Review
Note: The numbers in the above table may slightly differ among them due to rounding.
Three months operational review
During Q3 2021 a total of 3.49 million tonnes of ore were processed with an average copper head grade of 0.40% and a recovery rate of 87.24%. In comparison with the same quarter of 2020, throughput is in line while recovery increased 4.1%. The decrease in copper production during Q3 2021 is mainly attributable to two stoppage for maintenance and lower ore grade partly offset by higher recoveries. Compared with Q2 2021, copper production decreased 2.8% as a result of 2% lower throughput and lower ore grade.
On-site concentrate inventories at the end of the quarter were approximately 4 ,232 tonnes, lower than Q2 2021. All concentrate in stock at the beginning of the quarter and produced during the period was delivered to the port at Huelva.
The average realised price p er pound of copper payable for the period, including the QPs closed in the period, was $4.31/lb compared with $4.27/lb in Q2 2021. The average copper spot price during the quarter was $4.25/lb. The realised price during the quarter excluding QPs was approximately $4.24/lb compared to $4.40/lb in Q2 2021.
Nine months operating review
Production of copper contained in concentrate during YTD 2021 was 42,225 tonnes, compared with 41,559 tonnes in the same period of 2020. Payable copper in concentrates was 39,688 tonnes compared with 40,165 tonnes of payable copper in YTD 2020.
Ore mined in YTD 2021 was 10,041,248 tonnes compared to 10,097,800 tonnes during YTD 2020. Ore processed was 11,976,051 tonnes versus 10,974,063 tonnes in YTD 2020.
Ore grade during YTD 2021 was 0.41% Cu compared with 0.45% Cu in YTD 2020. Copper recovery was 85.63% versus 84.13% in YTD 2020. Concentrate production amounted to 206,018 tonnes above YTD 2020 of 187,032 tonnes a s increased throughput partially offset by slightly lower grade and higher recoveries.
The average realised price p er pound of copper payable during the nine months, including the QPs closed in the period, was $4.08/lb compared with $2.60/lb in YTD 2020. The average copper spot price during the nine month ended 30 September 2021 was $4.17/lb. The realised price during YTD 2021 excluding QPs was approximately $4.17/lb compared to $2.64/lb in YTD 2020.
3. 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 introduction note of this report.. The Company is aware that the COVID-19 pandemic may still have further effects of impact on how the Company can manage its 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
As a result of the strong performance at Proyecto Riotinto year-to-date, the Company increased its 2021 copper production guidance to 54,000 - 56,000 tonnes, as previously announced on 13 October 2021.
|
|
|
Guidance |
|
|
Unit |
2021 |
|
Ore processed |
million tonnes |
15.5 - 16.0 |
|
Contained copper |
tonnes |
54,000 - 56,000 |
Copper head grade for 2021 is budgeted to average 0.42% copper, with a recovery rate between 84 - 86%.
Cash costs for 2021 are now expected to be in the range of US$2.15/lb - US$2.25/lb. AISC for 2021 is now expected to be at the low end of the previous guidance range of US$2.50/lb - US$2.65 /lb copper payable. In addition, the Company expects to spend approximately €17 million in 2021 as part of the project to increase the capacity of the tailings dam. AISC are reported net of the one-off project to increase the capacity of the tailings dam, with year-to-date expenditures totaling €9.5 million.
4. Overview of the Financial Results
The following table presents summarised unaudited consolidated income statements for the three and nine months ended 30 September 2021, with comparatives for the three and nine months ended 30 September 2020, respectively.
|
( Euro 000's ) |
Three months ended 30 Sep 2021 |
|
Three months ended 30 Sep 2020 |
|
Nine months ended 30 Sep 2021 |
|
Nine months ended 30 Sep 2020 |
|
|
|
|
|
|
|
|
|
|
Revenue |
107,161 |
|
65,836 |
|
304,265 |
|
183,569 |
|
Costs of sales |
(55,358) |
|
(41,813) |
|
( 149,137) |
|
(134,024) |
|
Administrative and other expenses |
(2,287) |
|
(1,361) |
|
(5,312) |
|
(3,519) |
|
Exploration expenses |
(423) |
|
(380) |
|
(822) |
|
(1,484) |
|
Care and maintenance expenditure |
(281) |
|
(29) |
|
(783) |
|
(189) |
|
Other income |
(13) |
|
12 |
|
- |
|
20 |
|
EBITDA |
48,799 |
|
22,265 |
|
148,211 |
|
44,373 |
|
Depreciation/amortisation |
(7,808) |
|
(8,419) |
|
(23,634) |
|
(22,186) |
|
Impairment loss on other receivables |
- |
|
- |
|
- |
|
(45) |
|
Net foreign exchange gain/(loss) |
2,936 |
|
(1,411) |
|
4,967 |
|
(2,027) |
|
Net finance cost |
(456) |
|
82 |
|
(786) |
|
(67) |
|
Tax |
(5,265) |
|
(280) |
|
(24,559) |
|
(1,845) |
|
Profit for the period |
38,206 |
|
12,237 |
|
104,199 |
|
18,203 |
Three months financial review
Revenues for the three month period ended 30 September 2021 amounted to €107.2 million (Q3 2020: €65.8 million). Higher revenues, compared with the same quarter in the previous year, were mainly driven by higher copper prices plus higher volumes sold during the period partially offset to an extent by weaker average US Dollar rates against the Euro.
Realised prices were $4.31/lb copper during Q3 2021 compared with $2.72/lb copper in Q3 2020. The realised price during the quarter, excluding QPs, was approximately $4.24/lb. Concentrates during the quarter were sold under existing offtake agreements and spot sales.
Cost of sales for the three month period ended 30 September 2021 amounted to €55.4 million, compared with €41.8 million in Q3 2020. In absolute terms, higher operating costs were mainly due to larger tonnes of waste extracted at greater unit costs.
Cash costs of $2.19/lb payable copper during Q3 2021 compared with $1.94lb payable copper in the same period last year. Higher cash costs in 2021 mainly attributable to the increase of mining costs during the period resulted from larger volumes of waste extracted plus higher freight rates . Capitalised stripping costs during Q3 2021 amounted to €2.5 million compared with €2.0 million in Q3 2020. AISC excluding one-off investments in the tailings dam previously reported as sustaining capex for Q3 2021 were $2.48/lb payable copper compared with $2.20/lb payable copper in Q3 2020.
Sustaining capex for Q3 2021 amounted to €1.1 million compared with €0.9 million in Q3 2020. Sustaining capex mainly related to continuous enhancements in the processing systems of the plant. In addition, the Company invested € 2.8 million in the project to increase the tailings dam during Q3 2021 (Q3 2020: €2.5 million).
Administrative and other expenses amounted to €2.3 million (Q3 2020: €1.4 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.
Three months financial review (cont.)
Exploration costs on Atalaya's projects portfolio for the three-month period ended 30 September 2021 amounted to €0.4 million (Q3 2020: €0.4 million).
EBITDA for the three months ended 30 September 2021 amounted to €48.8 million compared with Q3 2020 of €22.3 million.
The main item below the EBITDA line is depreciation and amortisation of €7.8 million (Q3 2020: €8.4 million) which decreased as a result of the increase of the reserves and resources as announced by the Company in July 2021. Net finance expense for Q3 2021 amounted to €0.5 million (Q3 2020: income for €0.1 million). The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.
Nine months financial review
Revenues for the nine month period ended 30 September 2021 amounted to €304.3 million (YTD 2020: €183.6 million).
Copper concentrate production during the nine month period ended 30 September 2021 was 206,018 tonnes (YTD 2020: 187,032 tonnes) with 213,966 tonnes of copper concentrates sold in the period (YTD 2020: 192,830 tonnes). Inventories of concentrates as at the reporting date were 4,232 tonnes (31 Dec 2020: 3,845 tonnes).
Realised copper prices for YTD 2021 including and excluding QPs were $4.08/lb and $4.17/lb copper compared with $2.60/lb and $2.64/lb copper in the same period of 2020. Concentrates were sold under offtake agreements in place. The Company did not enter into any hedging agreements in 2021.
Costs of sales for the nine month period ended 30 September 2021 amounted to €149.1 million, compared with €134.0 million in YTD 2020. Higher costs in 2021 were mainly attributable to the increase in production volumes plus greater tonnes of waste extracted resulting in higher unit costs.
Cash costs of $2.16/lb payable copper during YTD 2021 compare with $1.93/lb payable copper in the same period last year. Higher cash costs in YTD 2021 mainly attributable to the increase of mining costs during the period resulted from larger volumes of waste extracted plus higher freight rates. All-in sustaining costs in the reporting period were $2.49/lb payable copper compared with $2.17/lb payable copper in YTD 2020. Higher AISC mainly related to higher underlying cash costs as well as additional investments in sustaining capex and higher stripping costs.
Sustaining capex for the nine-month period ended 30 September 2021 amounted to €4.5 million, compared with €3.8 million in the same period the previous year. Sustaining capex related to enhancements in processing systems of the plant. In addition, the Company invested €9.5 million in the project to increase the tailings dam, compared with €7.5 million in 2020. Stripping costs capitalised during 2021 amounted to €8.3 million (2020: €5.2 million).
Corporate costs for the first nine month period ended of 2021 were €5.3 million, compared with €3.5 million in YTD 2020. Corporate costs mainly include Company's overhead expenses.
Exploration costs related to Proyecto Riotinto for the nine month period ended 30 September 2021 amounted to €0.8 million, compared with €1.5 million in YTD 2020.
EBITDA for the nine months ended 30 September 2021 amounted to €148.2 million, compared with €44.4 million in YTD 2020.
Depreciation and amortisation amounted to €23.6 million for the nine-month period ended 30 September 2021 (YTD 2020: €22.2 million) as a result of the higher throughput resulting from the 2020 plant expansion.
Net finance costs for YTD 2021 amounted to €0.8 million (YTD 2020 €0.1 million loss).
On 27 October 2021 the Board declared an interim inaugural dividend of US$0.395 per share.
4. Overview of the Financial Results (cont.)
Copper prices
The average realised copper price increased by 59.2% from US$2.72 per pound in Q3 2020 to US$4.31 per pound in Q3 2021.
The average prices of copper for the three months ended 30 September 2021 and 2020 are summarised below:
|
( USD ) |
Three months ended 30 Sep 2021 |
|
Three months ended 30 Sep 2020 |
|
Nine months ended 30 Sep 2021 |
|
Nine months ended 30 Sep 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Realised copper price per lb |
4.31 |
|
2.72 |
|
4.08 |
|
2.60 |
|
|
Realised copper price per lb excluding QPs |
4.24 |
|
3.05 |
|
4.17 |
|
2.64 |
|
|
Market copper price per lb (period average) |
4.25 |
|
2.96 |
|
4.17 |
|
2.65 |
|
Realised copper prices for the reporting period noted above have been calculated using payable copper and including provisional invoices and final settlements of quotation periods ("QPs") together. Higher realised prices than market averages are mainly due to the final settlement of invoices where QP was fixed in the previous quarter due to a short open period when copper prices were higher. Atalaya's average realised price increased to US$4.31/lb from US$4.27/lb in the previous quarter. When excluding the QPs, the realised price during Q3 2021 was US$4.24/lb. On a year-to-date basis, the realised price has been US$4.08/lb and US$4.17/lb including and excluding QPs, respectively.
5. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost per pound of payable copper", "All-In Sustaining Costs" ("AISC") and "realised prices" 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 price is consistent with the widely accepted industry standard definition.
Cash cost methodology
During the last quarter of 2020, AISC was recalculated to exclude the one-off investments in the tailings dam project. Further details including the impact on earlier quarters are given in the 2020 audited consolidated financial statements.
6. 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 2021 and 31 December 2020.
Liquidity information
|
( Euro 000's ) |
|
30 September 2021 |
31 December 2020 |
|
|
|
|
|
|
Unrestricted cash and cash equivalents at Group level |
|
78,333 |
24,519 |
|
Unrestricted cash and cash equivalents at Operation level |
|
47,101 |
13,248 |
|
Restricted cash and cash equivalents at Operation level |
|
15,420 |
- |
|
Consolidated cash and cash equivalents |
|
140,854 |
37,767 |
|
Net cash / (debt) position (1) |
|
88,854 |
(15,233) |
|
Working capital surplus / (deficit) |
|
126,891 |
(17,904) |
|
|
|
|
|
(1) Includes bank borrowings and Deferred Consideration at 31 December 2020.
Unrestricted cash and cash equivalents as at 30 September 2021 increased to €126.9 million from €37.8 million at 31 December 2020. The increase in cash balances is as result of the raise in operation activities. Cash balances are unrestricted and include balances at operational and corporate level. Restricted cash of €15.4 million is related to the amount that the Company transferred to a trust account (the "Trust Account") representing the full amount of interest claimed by Astor to 30 June 2022, as detailed in the note on Deferred Consideration.
As of 30 September 2021, Atalaya reported a working capital surplus of €126.9 million, compared with a working capital deficit of €17.9 million at 31 December 2020. The main liability of the working capital is trade payables related to Proyecto Riotinto contractors to a lesser extent, short-term loans following the drawdown of credit facilities during Q1 2021. The increase in working capital resulted from higher cash balances as well as payment of the Deferred Consideration, which was included in current liabilities at the end of 2020, by utilising long-term credit facilities. At 30 September 2021, trade payables have been decreased by circa 23% compared with the same period last year.
Overview of the Group's cash flows
|
( Euro 000's ) |
Three months ended 30 Sep 2021 |
|
Three months ended 30 Sep 2020 |
|
Nine months ended 30 Sep 2021 |
|
Nine months ended 30 Sep 2020 |
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
58,213 |
|
18,820 |
|
129,212 |
|
41,820 |
|
Cash flows used in investing activities |
(6,982) |
|
(6,338) |
|
(77,835) |
|
(19,669) |
|
Cash flows used in financing activities |
(3,131) |
|
(15,085) |
|
51,710 |
|
(454) |
|
Net increase/(decrease) in cash and cash equivalents |
48,100 |
|
(2,603) |
|
103,087 |
|
21,697 |
Three months cash flows review
Cash and cash equivalents increased by €48.1 million during the three months ended 30 September 2021. This was due to the net results of cash from operating activities amounting to €58.2 million, the cash used in investing activities amounting to €7.0 million and the cash used in financing activities totalling €3.1 million.
Cash generated from operating activities before working capital changes was €52.0 million. Trade receivables decreased in the period by €6.6 million, inventory levels decreased by €5.9 million and trade payables decreased by €4.3 million.
Investing activities during the quarter consumed €7.0 million, relating mainly to the tailing dams Capex and sustaining Capex mostly in enhancements in processing systems of the plant.
Financing activities during the quarter decreased by €3.1 million as result of the full repayment of the existing unsecured credit facilities drawdown during previous quarters.
Nine months cash flows review
Cash and cash equivalents increased by €103.1 million during the nine months ended 30 September 2021. This was due to cash from operating activities amounting to €129.2 million, cash used in investing activities amounting to €77.8 million and cash used in financing activities amounting to €51.7 million.
Cash generated from operating activities before working capital changes was €156.1 million. Trade receivable balances increased by €4.1 million, inventories levels decreased by €2.3 million and trade payables decreased in the period by €15.9 million.
Investing activities during the nine month period amounted to €77.8 million, relating mainly to the early payment of the Deferred Consideration to Astor and the tailings dam project and continuous enhancements to the processing systems of the plant.
Financing activities during the nine month period ended 30 September 2021 reduced by €51.7 million driven by the use of existing unsecured credit facilities to pay the Deferred Consideration. The payment was financed by unsecured credit lines by four major Spanish banks having a three-year tenure and an average annual interest rate of approximately two per cent.
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 month period ended 30 September 2021, Atalaya recognised a foreign exchange gain of €3.0 million and €5.0 million, respectively. Foreign exchange gains mainly related to changes in the period in EUR and USD conversion rates, as all sales are cashed and occasionally held in USD.
6. Liquidity and Capital Resources (cont.)
The following table summarises the movement in key currencies versus the EUR:
|
|
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Average rates for the periods |
|
|
|
|
|
GBP - EUR |
0.8553 |
0.9050 |
0.8636 |
0.8851 |
|
USD - EUR |
1.1788 |
1.1689 |
1.1962 |
1.1250 |
|
Spot rates as at |
|
|
|
|
|
GBP - EUR |
0.8605 |
0.9124 |
0.8605 |
0.9124 |
|
USD - EUR |
1.1579 |
1.1708 |
1.1579 |
1.1708 |
|
|
|
|
|
|
7. Deferred Consideration
In September 2008, the Group moved to 100% ownership of Atalaya Riotinto Mineral S.L. ("ARM") (and thus full ownership of Proyecto Riotinto) by acquiring the remaining 49% of the issued capital of ARM. At the time of the acquisition, the Group signed a Master Agreement (the "Master Agreement") with Astor Management AG ("Astor") which included a deferred consideration of €43.9 million (the "Deferred Consideration") payable as consideration in respect of the acquisition among other items. The Company also entered into a credit assignment agreement at the same time with a related company of Astor, Shorthorn AG, pursuant to which the benefit of outstanding loans was assigned to the Company in consideration for the payment of €9.1 million to Shorthorn (the "Loan Assignment").
The Master Agreement has been the subject of litigation in the High Court and the Court of Appeal that has now concluded. As a consequence, ARM must apply any excess cash (after payment of operating expenses, sustaining capital expenditure, any senior debt service requirements and up to US$10 million per annum (for non-Proyecto Riotinto related expenses)) to pay the consideration due to Astor (including the Deferred Consideration and the amount of €9.1 million payable under the Loan Assignment). "Excess cash" is not defined in the Master Agreement leaving ambiguity as to how it is to be calculated.
On 2 March 2020, the Company filed an application in the High Court to seek clarity on the definition of "Excess Cash". The Company and Astor have now exchanged statements of case to set out their formal position. The trial is listed to be heard from 21 February 2022 (the "Trial"). Following the filing of the statements of case for the Trial, Astor applied to Court seeking an early determination (without the need for a full trial) of the dispute in relation to the "Excess Cash" (the "Summary Judgment application"). The Summary Judgment application was heard on 14-15 June 2021. The Court dismissed Astor's application and the question as to whether any residual interest is payable to Astor therefore remains to be resolved at Trial.
As previously announced, during December 2020 the Board had discussions and considered an early payment of the Deferred Consideration and the Loan Assignment provided certain conditions could be met. Conditions included among others the execution of credit facilities agreements to fund the payment.
In March 2021, the Company fulfilled all conditions required by the Board of Directors and made the early payment of €53 million to Astor. The payment was fully funded by unsecured credit facilities entered into between December 2020 and February 2021 at interest rates ranging from 1.60% to 2.45% and repayable by 2023 and 2024.
The payment of the Deferred Consideration does not end the ongoing litigation as the issue as to whether any residual interest may or may not be payable remains unresolved. Consequently, on 15 July 2021, the Company transferred €15.4 million to a trust account (the "Trust Account") representing the full amount of interest claimed by Astor to 30 June 2022. The holder of the Trust Account has provided an undertaking to hold the full amount until settlement of the claim to interest or judgment following the Trial. The Company understands the monies held in the Trust Account safeguard the maximum outstanding liability to Astor in relation to the Master Agreement. On that basis, and because the Consideration has been paid in full in accordance with the Master Agreement, Atalaya treats itself as free of the obligations set out in the Master Agreement.
The Company is currently working on other court directions in preparation for the Trial and continues to be confident in its case and is of the view that no residual interest will be payable to Astor.
Corporate Social Responsibility
Atalaya's wholly-owned Fundación Atalaya Riotinto has continued its efforts to develop initiatives to comply with its social responsibility during the third quarter of the year.
In this regard, the Company has started the proceedings to initiate the second edition of its training program for unemployed people from local communities, which is also supported by Riotinto Mine main contractors. The precedent program concluded satisfactorily with around half the participants now working in different companies.
During the quarter, the Company has finalised the conversations with the neighbouring municipalities, and a new cooperation agreement has been signed that include all the municipalities. The new agreement will provide with funds to undertake cooperation initiatives addressing infrastructure, social and environmental projects. Atalaya has also closed several agreements with the municipality of Minas de Riotinto to start with various initiatives which include works to refurbish the local school, improvements in the sporting municipal facilities, cleaning campaign for La Dehesa district and installation of new signs and CCTV to improve the security in the town. Corta Atalaya historical pit access and look-out have been refurbished and are now successfully established as a new tourist attraction which is contributing to the local economy. In Nerva town, Atalaya has agreed to fund a program to train recently graduated scholars, who will work at the municipality to improve their skills. Atalaya has also cooperated with various local organisations, including a retired miners association, the NGO: "Unidos por el Alto", which work with troubled kids, and several sporting clubs which have received sponsorship.
8. Health and Safety
During the quarter, in relation to prevention actions against Covid, the SAR-CoV2 control tests have continued to be carried out in the infirmary: antigens, antibodies and PCR, as well as the other measures implemented to prevent the spread of the virus. It should also be noted that Atalaya joined the Junta de Andalucía's Sumamos Plan to facilitate vaccination to anyone (employee or contractor) interested and within the age range authorised by the regional administration. Up to September 2021, 134. employees have been vaccinated in the facilities, 48% Atalaya employees and 52% from contracting companies.
On the other hand, in this quarter the control of drugs continues the prevention work under the influence of psychoactive substances. Since July 2021 these tests are mandatory when workers start and finish the workday, as well as when an accident happen.
The training plan of Atalaya employees is focused on respiratory protection against dust and breathable crystalline silica, as well as 10 training sessions this quarter for the first assistance Brigade of Atalaya.
It should be noted that the internal audit of the ISO 45001: 2018 occupational health and safety management system has been carried out, which is part of the company's Integrated Management System.
9. Environmental Management
During Q3 2021, the environmental department has continued to carry out environmental monitoring and environmental management activities, as well as environmental compliance inspection activities. Key points of the quarter:
- The additional measures included in the action plan against dust continued to be implemented, intensifying periodic risks, implementing new coordination measures and carrying out exhaustive monitoring of the emissions generated in the operation
- A project was started, in cooperation with the University of Huelva, to develop a passive treatment for mine drainage. The aim of this project is to improve the quality of the water around Proyecto Riotinto. The project will be developed over the next 9 months.
10. 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 2020.
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 COVID-19 (refer to point 13 below).
11. 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 2020.
As at 30 September 2021, there are no significant changes in critical accounting policies or estimates to those applied in 2020.
12. COVID-19 impact
It is Atalaya's priority to protect its workforce and the local communities surrounding Proyecto Riotinto, Proyecto Masa Valverde and Proyecto Touro. Atalaya is following the requirements and recommendations issued by the Government of Spain and the regional and local health authorities to reduce the risk of COVID-19 exposure and avoid the spread of the virus.
13. Other Information
Additional information about Atalaya Mining Plc. is available at www.sedar.com and at www.atalayamining.com
Unaudited Interim Condensed Consolidated Financial Statements on pages 13 to 38.
By Order of the Board of Directors,
___________________________________
Roger Davey
Chairman
Nicosia, 17 November 2021
Unaudited Interim Condensed Consolidated Income Statements
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2021 and 2020
|
( Euro 000's ) |
Note |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
|
|
|
|
|
|
|
Revenue |
4 |
107,161 |
65,836 |
304,265 |
183,569 |
|
Operating costs and mine site administrative expenses |
|
(55,063) |
(41,565) |
(148,533) |
(133,455) |
|
Mine site depreciation and amortization |
|
(7,808) |
(8,419) |
(23,634) |
(22,186) |
|
Gross profit |
|
44,290 |
15,852 |
132,098 |
27,928 |
|
Administration and other expenses |
|
(2,287) |
(1,361) |
(5,312) |
(3,519) |
|
Share-based benefits |
13 |
(295) |
(248) |
(604) |
(569) |
|
Impairment loss on other receivables |
|
- |
- |
- |
(45) |
|
Exploration expenses |
|
(423) |
(380) |
(822) |
(1,484) |
|
Care and maintenance expenditure |
|
(281) |
(29) |
(783) |
(189) |
|
Operating profit |
|
41,004 |
13,834 |
124,577 |
22,122 |
|
Other income |
|
(13) |
12 |
- |
20 |
|
Net foreign exchange gain/(loss) |
|
2,936 |
(1,411) |
4,967 |
(2,027) |
|
Net finance costs |
5 |
(456) |
82 |
(786) |
(67) |
|
Profit before tax |
|
43,471 |
12,517 |
128,758 |
20,048 |
|
Tax |
|
(5,265) |
(280) |
(24,559) |
(1,845) |
|
Profit for the period |
|
38,206 |
12,237 |
104,199 |
18,203 |
|
|
|
|
|
|
|
|
Profit for the period attributable to: |
|
|
|
|
|
|
- Owners of the parent |
|
38,422 |
12,402 |
104,863 |
18,794 |
|
- Non-controlling interests |
|
(216) |
(165) |
(664) |
(591) |
|
|
|
38,206 |
12,237 |
104,199 |
18,203 |
|
Earnings per share from operations attributable to equity holders of the parent during the period: |
|
|
|
|
|
|
Basic earnings per share (EUR cents per share) |
6 |
27.5 |
9.0 |
75.9 |
13.7 |
|
Fully diluted earnings per share (EUR cents per share) |
6 |
26.7 |
8.8 |
74.2 |
13.4 |
|
|
|
|
|
|
|
|
Profit for the period |
|
38,206 |
12,237 |
104,199 |
18,203 |
|
Other comprehensive income: |
|
|
|
|
|
|
Change in fair value of financial assets through other comprehensive income 'OCI' |
|
(36) |
61 |
(34) |
52 |
|
Total comprehensive income for the period |
|
38,170 |
12,298 |
104,165 |
18,255 |
|
|
|
|
|
|
|
|
Total comprehensive income for the period attributable to: |
|
|
|
|
|
|
- Owners of the parent |
|
38,386 |
12,463 |
104,829 |
18,846 |
|
- Non-controlling interests |
|
(216) |
(165) |
(664) |
(591) |
|
|
|
38,170 |
12,298 |
104,165 |
18,255 |
The notes on pages 17 to 38 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 2021 and 2020
|
(Euro 000's) |
Note |
30 Sep 2021 |
|
31 Dec 2020 |
|
Assets |
|
Unaudited |
|
Audited |
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
8 |
332,630 |
|
327,174 |
|
Intangible assets |
9 |
56,598 |
|
59,816 |
|
Trade and other receivables |
11 |
5,321 |
|
2,715 |
|
Non-current financial assets |
|
1,101 |
|
1,101 |
|
Deferred tax asset |
|
9,311 |
|
8,805 |
|
|
|
404,961 |
|
399,611 |
|
Current assets |
|
|
|
|
|
Inventories |
10 |
21,265 |
|
23,576 |
|
Trade and other receivables |
11 |
45,391 |
|
43,191 |
|
Tax refundable |
|
98 |
|
815 |
|
Other financial assets |
|
52 |
|
86 |
|
Cash and cash equivalents |
12 |
140,854 |
|
37,767 |
|
|
|
207,660 |
|
105,435 |
|
Total assets |
|
612,621 |
|
505,046 |
|
Equity and liabilities |
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
|
|
|
Share capital |
13 |
13,445 |
|
13,439 |
|
Share premium |
13 |
315,865 |
|
315,714 |
|
Other reserves |
14 |
52,409 |
|
40,049 |
|
Accumulated profits/(losses) |
|
77,283 |
|
(15,512) |
|
|
|
459,002 |
|
353,690 |
|
Non-controlling interests |
|
(4,155) |
|
(3,491) |
|
Total equity |
|
454,847 |
|
350,199 |
|
|
|
|
|
|
|
Liabilities Non-current liabilities |
|
|
|
|
|
Trade and other payables |
15 |
1,463 |
|
1,448 |
|
Provisions |
16 |
28,237 |
|
25,264 |
|
Leases liabilities |
18 |
5,063 |
|
4,796 |
|
Borrowings |
17 |
42,242 |
|
- |
|
|
|
77,005 |
|
31,508 |
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
15 |
52,551 |
|
68,437 |
|
Leases liabilities |
18 |
600 |
|
592 |
|
Borrowings |
17 |
9,758 |
|
- |
|
Deferred consideration |
|
- |
|
53,000 |
|
Current tax liabilities |
|
17,860 |
|
1,310 |
|
|
|
80,769 |
|
123,339 |
|
Total liabilities |
|
157,774 |
|
154,847 |
|
Total equity and liabilities |
|
612,621 |
|
505,046 |
The notes on pages 17 to 38 are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements. The unaudited interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 17 November 2021 and were signed on its behalf.
|
|
|
|
Roger Davey |
Alberto Lavandeira |
|
Chairman |
Managing Director |
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
(All amounts in Euro thousands unless otherwise stated)
For the period ended 30 September 2021 and 2020
|
(Euro 000's) |
Note |
Share capital |
Share premium(1) |
Other reserves |
Accum. profits |
Total |
Non-controlling interest |
Total equity |
|
At 1 January 2021 |
|
13,439 |
315,714 |
40,049 |
(15,512) |
353,690 |
(3,491) |
350,199 |
|
Profit for the period |
|
- |
- |
|
104,863 |
104,863 |
(664) |
104,119 |
|
Change in fair value of financial assets through OCI |
|
- |
- |
(34) |
- |
(34) |
- |
(34) |
|
Total comprehensive income |
|
- |
- |
(34) |
104,863 |
104,829 |
(664) |
104,165 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Issuance of share capital |
|
6 |
151 |
- |
|
157 |
- |
157 |
|
Recognition of share-based payments |
13 |
- |
- |
605 |
- |
605 |
- |
605 |
|
Recognition of depletion factor |
13 |
- |
- |
6,100 |
(6,100) |
- |
- |
- |
|
Recognition of non-distributable reserve |
13 |
- |
- |
2,372 |
(2,372) |
- |
- |
- |
|
Recognition of distributable reserve |
|
- |
- |
3,317 |
(3,317) |
|
|
|
|
Other changes in equity |
|
- |
- |
- |
(279) |
(279) |
- |
(279) |
|
At 30 September 2021 |
|
13,445 |
315,865 |
52,409 |
77,283 |
459,002 |
(4,155) |
454,847 |
(1) The share premium reserve is not available for distribution
|
(Euro 000's) |
Note |
Share capital |
Share premium(1) |
Other reserves |
Accum. losses |
Total |
Non-controlling interest |
Total equity |
|
|
At 1 January 2020 |
|
13,372 |
314,319 |
22,836 |
(30,669) |
319,858 |
(2,402) |
317,456 |
|
|
Profit for the period |
|
- |
- |
|
18,794 |
18,795 |
(591) |
18,204 |
|
|
Change in fair value of financial assets through OCI |
|
- |
- |
52 |
- |
- |
- |
52 |
|
|
Total comprehensive income |
|
- |
- |
52 |
18,794 |
18,846 |
(591) |
18,255 |
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
Recognition of share-based payments |
|
- |
- |
569 |
- |
569 |
- |
569 |
|
|
Recognition of depletion factor |
13 |
- |
- |
8,000 |
(8,000) |
- |
- |
- |
|
|
Recognition of non-distributable reserve |
13 |
- |
- |
2,198 |
(2,198) |
- |
- |
- |
|
|
Other changes in equity |
13 |
- |
- |
- |
27 |
27 |
- |
27 |
|
|
At 30 September 2020 |
|
13,372 |
314,319 |
33,655 |
(22,046) |
339,300 |
(2,993) |
336,307 |
|
(1) The share premium reserve is not available for distribution
|
(Euro 000's) Audited |
Note |
Share capital |
Share premium(1) |
Other reserves |
Accum. losses |
Total |
Non-controlling interest |
Total equity |
|
At 1 January 2020 |
|
13,372 |
314,319 |
22,836 |
(30,669) |
319,858 |
(2,402) |
317,456 |
|
Profit for the period |
|
- |
- |
- |
31,479 |
31,479 |
(1,089) |
30,390 |
|
Change in fair value of financial assets through OCI |
|
- |
- |
44 |
- |
44 |
- |
44 |
|
Total comprehensive income |
|
- |
- |
44 |
31,479 |
31,523 |
(1,089) |
30,434 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Recognition of depletion factor |
13 |
67 |
1,395 |
|
|
1,462 |
|
1,462 |
|
Recognition of share-based payments |
13 |
|
|
14,155 |
(14,155) |
- |
- |
- |
|
Recognition of non-distributable reserve |
13 |
- |
- |
816 |
|
816 |
- |
816 |
|
Recognition of distributable reserve |
13 |
- |
- |
2,198 |
(2,198) |
- |
- |
- |
|
Other changes in equity |
|
- |
- |
- |
31 |
31 |
- |
31 |
|
At 31 December 2020 |
|
13,439 |
315,714 |
40,049 |
(15,512) |
353,690 |
(3,491) |
350,199 |
(1) The share premium reserve is not available for distribution
The notes on pages 17 to 38 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 2021 and 2020
|
(Euro 000's) |
Note |
Three months ended Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Cash flows from operating activities |
|
|
|
|
|
|
Profit before tax |
|
43,471 |
12,517 |
128,758 |
20,048 |
|
Adjustments for: |
|
|
|
|
|
|
Depreciation of property, plant and equipment |
8 |
6,662 |
7,096 |
20,155 |
18,530 |
|
Amortisation of intangibles |
9 |
1,146 |
1,323 |
3,479 |
3,656 |
|
Recognition of share-based payments |
13 |
295 |
248 |
604 |
569 |
|
Interest income |
5 |
(15) |
(112) |
(20) |
(116) |
|
Interest expense |
5 |
385 |
56 |
632 |
109 |
|
Unwinding of discounting on mine rehabilitation provision |
5 |
84 |
(30) |
167 |
62 |
|
Other provisions |
16 |
- |
- |
2,617 |
-- |
|
Legal provisions |
16 |
- |
267 |
(278) |
300 |
|
Impairment loss on other receivables |
8 |
- |
- |
- |
45 |
|
Unrealised foreign exchange loss on financing activities |
|
(48) |
(90) |
(37) |
(19) |
|
Cash inflows from operating activities before working capital changes |
|
51,980 |
21,275 |
156,077 |
43,184 |
|
Changes in working capital: |
|
|
|
|
|
|
Inventories |
10 |
5,880 |
(4,052) |
2,311 |
1,709 |
|
Trade and other receivables |
11 |
6,599 |
7,700 |
(4,089) |
(3,427) |
|
Trade and other payables |
15 |
(4,304) |
(3,863) |
(15,886) |
3,934 |
|
Cash flows from operations |
|
60,155 |
21,060 |
138,413 |
45,400 |
|
Interest on lease liabilities |
|
(3) |
(4) |
(8) |
(12) |
|
Interest paid |
|
(385) |
(56) |
(632) |
(109) |
|
Tax paid |
|
(1,554) |
(2,180) |
(8,561) |
(3,459) |
|
Net cash from operating activities |
|
58,213 |
18,820 |
129,212 |
41,820 |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Purchase of property, plant and equipment |
8 |
(6,906) |
(6,450) |
(24,594) |
(19,875) |
|
Purchase of intangible assets |
9 |
(91) |
- |
(261) |
- |
|
Payment of deferred consideration |
|
- |
- |
(53,000) |
- |
|
Interest received |
5 |
15 |
112 |
20 |
116 |
|
Net cash used in investing activities |
|
(6,982) |
(6,338) |
(77,835) |
(19,669) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Lease payments |
18 |
(154) |
(151) |
(463) |
(454) |
|
Net (repayment)/proceeds from borrowings |
|
(2,977) |
(14,934) |
52,015 |
- |
|
Proceeds from issuance of shares |
|
- |
|
158 |
|
|
Net cash flows (used in)/from financing activities |
|
(3,131) |
(15,085) |
51,710 |
(454) |
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
48,100 |
(2,063) |
103,087 |
21,697 |
|
Cash and cash equivalents : |
|
|
|
|
|
|
At beginning of the period |
|
92,754 |
32,377 |
37,767 |
8,077 |
|
At end of the period |
|
140,854 |
29,774 |
140,854 |
29,774 |
The notes on pages 17 to 38 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 2021 and 2020
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 and on the TSX on 20 December 2010 under the symbol AYM. The Company continued to be listed on AIM and the TSX as at 30 September 2021.
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 £0.075 for every 30 existing ordinary shares of nominal value Stg £0.0025.
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 and the Eastern European region.
The Group currently owns three mining projects: Proyecto Riotinto, Proyecto Touro and Proyecto Masa Valverde. In addition, the Company has an earn-in agreement to acquire three investigation permits at Proyecto Riotinto Este.
Proyecto Riotinto
The Company owns and operates through a wholly owned subsidiary, "Proyecto Riotinto", an open-pit copper mine located in the Pyritic belt, in the Andalusia region of Spain, approximately 65 km northwest of Seville. A brownfield expansion of this mine was completed in 2019.
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). Under the terms of the agreement Atalaya will make an aggregate €1.4 million cash payment in two instalments of approximately the same amount. The first payment is to be executed once the project is permitted and second and final payment when first production is achieved from the concession. 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.
2. Basis of preparation and accounting policies
2.1 Basis of preparation
(a) Overview
The unaudited interim condensed consolidated financial statements for the period ended 30 September 2021 have been prepared in accordance with International Accounting Standards 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.
These unaudited interim condensed consolidated financial statements are 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 2020. These unaudited interim condensed consolidated financial statements do not include all of 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 2020. The accounting policies are unchanged from those disclosed in the annual consolidated financial statements for the year ended 31 December 2020.
(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.
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 2020, except for the adoption of new standards effective as of 1 January 2021. 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 2021, but do not have a material impact on the unaudited condensed interim consolidated financial statements of the Group.
Interest Rate Benchmark Reform - Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).
The amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest
• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued
• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component
These amendments had no impact on the unaudited interim condensed consolidated financial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable.
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).
|
Financial assets or liabilities |
|
|
|
|
|
|
(Euro 000's) |
Level 1 |
Level 2 |
Level 3 |
|
Total |
|
30 September 2021 |
|
|
|
|
|
|
Other financial assets |
|
|
|
|
|
|
Financial assets at FV through OCI |
52 |
- |
1,101 |
|
1,153 |
|
Trade and other receivables |
|
|
|
|
|
|
Receivables (subject to provisional pricing) |
- |
22,692 |
- |
|
22,692 |
|
Total |
52 |
22,692 |
1,101 |
|
23,845 |
|
31 December 2020 |
|
|
|
|
|
|
Other financial assets |
|
|
|
|
|
|
Financial assets at FV through OCI |
86 |
- |
1,101 |
|
1,187 |
|
Trade and other receivables |
|
|
|
|
|
|
Receivables (subject to provisional pricing) |
- |
24,250 |
- |
|
24,250 |
|
Total |
86 |
24,250 |
1,101 |
|
25,437 |
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 to the 2020 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 (Note 22.3)
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. In addition, the Company sells to the Spot market concentrate produced during the period which are in excess of the offtake agreements commitments.
|
(Euro 000's) |
Cyprus |
Spain |
Other |
|
Total |
|
|
Three months ended 30 September 2021 |
|
|
|
|
|
|
|
Revenue - from external customers |
7,303 |
99,858 |
- |
|
107,161 |
|
|
Earnings/(loss) Before Interest, Tax, Depreciation and Amortisation (EBITDA) |
4,893 |
43,931 |
(25) |
|
48,799 |
|
|
Depreciation/amortisation charge |
- |
(7,808) |
- |
|
(7,808) |
|
|
Net foreign exchange gain |
1,173 |
1,764 |
- |
|
2,937 |
|
|
Finance income |
- |
15 |
- |
|
15 |
|
|
Finance cost |
- |
(472) |
- |
|
(472) |
|
|
Profit/(loss) before tax |
6,066 |
37,430 |
(25) |
|
43,471 |
|
|
Tax |
(511) |
(4,754) |
- |
|
(5,265) |
|
|
Profit for the period |
5,555 |
32,676 |
(25) |
|
38,206 |
|
|
|
|
|
|
|
|
|
|
Nine months ended 30 September 2021 |
|
|
|
|
|
|
|
Revenue - from external customers |
29,041 |
275,224 |
- |
|
304,265 |
|
|
Earnings/(loss) Before Interest, Tax, Depreciation and Amortisation (EBITDA) |
21,539 |
126,706 |
(34) |
|
148,211 |
|
|
Depreciation/amortisation charge |
- |
(23,634) |
- |
|
(23,634) |
|
|
Net foreign exchange gain/(loss) |
1,568 |
3,398 |
2 |
|
(4,968) |
|
|
Finance income |
- |
20 |
- |
|
20 |
|
|
Finance cost |
- |
(807) |
- |
|
(807) |
|
|
Profit/(loss) before tax |
23,107 |
105,683 |
(32) |
|
128,758 |
|
|
Tax |
(2,075) |
(22,484) |
- |
|
(24,559) |
|
|
Profit for the period |
21,032 |
83,199 |
(32) |
|
104,199 |
|
|
|
|
|
|
|
|
|
|
Total assets |
100,463 |
511,026 |
1,132 |
|
612,621 |
|
|
Total liabilities |
(1,636) |
(156,138) |
- |
|
(157,774) |
|
|
Depreciation of property, plant and equipment |
- |
20,155 |
- |
|
20,155 |
|
|
Amortisation of intangible assets |
- |
3,479 |
- |
|
3,479 |
|
|
Total additions of non-current assets |
- |
35,553 |
- |
|
35,553 |
|
|
(Euro 000's) |
Cyprus |
Spain |
Other |
|
Total |
|
Three months ended 30 September 2020 |
|
|
|
|
|
|
Revenue - from external customers |
4,312 |
61,524 |
- |
|
65,836 |
|
Earnings/(loss) Before Interest, Tax, Depreciation and Amortisation (EBITDA) |
2,132 |
20,175 |
(42) |
|
22,265 |
|
Depreciation/amortisation charge |
- |
(8,419) |
- |
|
(8,419) |
|
Net foreign exchange (loss) |
(425) |
(986) |
- |
|
(1,411) |
|
Finance income |
- |
112 |
- |
|
112 |
|
Finance cost |
- |
(30) |
- |
|
(30) |
|
Profit/(loss) before tax |
1,707 |
10,852 |
(42) |
|
12,517 |
|
Tax |
405 |
(685) |
- |
|
(280) |
|
Profit for the period |
2,112 |
10,167 |
(42) |
|
12,237 |
|
|
|
|
|
|
|
|
Nine months ended 30 September 2020 |
|
|
|
|
|
|
Revenue - from external customers |
11,896 |
171,673 |
- |
|
183,569 |
|
Earnings/(loss) Before Interest, Tax, Depreciation and Amortisation (EBITDA) |
6,481 |
38,035 |
(143) |
|
44,373 |
|
Depreciation/amortisation charge |
- |
(22,186) |
- |
|
(22,186) |
|
Net foreign exchange gain/(loss) |
(481) |
(1,550) |
4 |
|
(2,027) |
|
Finance income |
(45) |
- |
- |
|
45 |
|
Finance cost |
- |
116 |
- |
|
116 |
|
Profit/(loss) before tax |
(1) |
(182) |
- |
|
(183) |
|
Tax |
5,954 |
14,234 |
(139) |
|
20,048 |
|
Profit for the period |
(1,022) |
(823) |
- |
|
(1,845) |
|
|
4,932 |
13,411 |
(139) |
|
18,203 |
|
Total assets |
|
|
|
|
|
|
Total liabilities |
33,167 |
431,391 |
1,160 |
|
465,718 |
|
Depreciation of property, plant and equipment |
(11,041) |
(118,332) |
(38) |
|
(129,411) |
|
Amortisation of intangible assets |
- |
18,530 |
- |
|
18,530 |
|
Total additions of non-current assets |
- |
3,656 |
- |
|
3,656 |
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 months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
||
|
|
Segment |
€'000 |
Segment |
€'000 |
|
|
|
|
|
|
|
Offtaker 1 |
Copper |
92,708 |
Copper |
30,821 |
|
Offtaker 2 |
Copper |
67,229 |
Copper |
56,687 |
|
Offtaker 3 |
Copper |
135,062 |
Copper |
96,061 |
4. Revenue
|
(Euro 000's ) |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Revenue from contracts with customers (1) |
110,363 |
183,447 |
297,551 |
63,421 |
|
Fair value (losses)/gains relating to provisional pricing within sales (2) |
(3,202) |
122 |
6,714 |
2,415 |
|
Total revenue |
107,161 |
183,569 |
304,265 |
65,836 |
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 YTD 2021 revenue, there is a transaction price of € 1.7 million (€2.3 million in YTD 2020) related to the freight services provided by the Group to the customers arising from the sales of copper concentrate under CIF incoterm.
(2) Provisional pricing impact represents the change in fair value of the embedded derivative arising on sales of concentrate.
5. Net finance cost
|
(Euro 000's) |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Interest expense: |
|
|
|
|
|
Other interest |
(385) |
(56) |
(632) |
(109) |
|
Interest on lease liabilities |
(3) |
(4) |
(8) |
(12) |
|
Unwinding of discount on mine rehabilitation provision (Note 16) |
(84) |
30 |
(167) |
(62) |
|
Interest income(1) |
15 |
112 |
20 |
116 |
|
|
(457) |
82 |
(787) |
(67) |
(1) Interest income relates to interest received on bank balances
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:
|
(Euro 000's) |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Six months ended 30 Sep 2021 |
Six months ended 30 Sep 2020 |
|
Income taxes |
|
|
|
|
|
Current income tax expense |
(5,265) |
(280) |
(24,559) |
(1,845) |
|
Income tax expense recognised in statement of profit and loss |
(5,265) |
(280) |
(24,559) |
(1,845) |
7. Earnings per share
The calculation of the basic and fully diluted earnings per share attributable to the ordinary equity holders of the Company is based on the following data:
|
(Euro 000's) |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Profit attributable to equity holders of the parent |
38,422 |
12,403 |
104,863 |
18,794 |
|
|
|
|
|
|
|
Weighted number of ordinary shares for the purposes of basic earnings per share (000's) |
139,730 |
137,339 |
138,190 |
137,339 |
|
Basic earnings per share (EUR cents/share) |
27.5 |
9.0 |
75.9 |
13.7 |
|
|
|
|
|
|
|
Weighted number of ordinary shares for the purposes of fully diluted earnings per share (000's) |
143,639 |
140,894 |
141,342 |
140,202 |
|
Fully diluted earnings per share (EUR cents/share) |
26.7 |
8.8 |
74.2 |
13.4 |
At 30 September 2021 there are nil warrants (Note 11) and 3,866,250 options (Note 13) (30 September 2020: nil warrants and 3,555,250 options) which have been included when calculating the weighted average number of shares for fully diluted earnings per share for 2021.
8. Property, plant and equipment
|
(Euro 000's) |
Land and buildings |
Right-of-use assets |
Plant and machinery |
Assets under construction (1) |
Deferred mining costs (2) |
Other assets (3) |
Total |
|
|
Cost |
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
46,063 |
6,421 |
248,221 |
16,517 |
34,013 |
781 |
352,016 |
|
|
Additions |
401 |
- |
543 |
13,983 |
5,242 |
- |
20,169 |
|
|
Reclassifications |
- |
- |
9,296 |
(9,296) |
- |
- |
- |
|
|
At 30 September 2020 |
46,464 |
6,421 |
258,060 |
21,204 |
39,255 |
781 |
372,185 |
|
|
Additions |
- |
148 |
1,735 |
2,880 |
2,613 |
20 |
7,396 |
|
|
Increase in rehab. provision |
17,954 (4) |
- |
- |
- |
- |
- |
17,954 |
|
|
Reclassifications |
- |
- |
8,256 |
(8,256) |
- |
- |
- |
|
|
Advances |
17 |
- |
- |
- |
- |
- |
17 |
|
|
At 31 December 2020 |
64,034 |
6,569 |
268,051 |
15,828 |
41,868 |
801 |
397,151 |
|
|
Additions |
510 |
507 |
1,734 |
14,593 |
8,267 |
- |
25,611 |
|
|
Reclassifications |
- |
- |
807 |
(807) |
- |
- |
- |
|
|
At 30 September 2021 |
64,544 |
7,076 |
270,592 |
29,614 |
50,135 |
801 |
422,762 |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
8,257 |
391 |
28,872 |
- |
6,061 |
620 |
44,201 |
|
|
Charge for the period |
2,278 |
402 |
14,044 |
- |
1,765 |
41 |
18,530 |
|
|
At 30 September 2020 |
10,535 |
793 |
42,916 |
- |
7,826 |
661 |
62,731 |
|
|
Charge for the period |
1,136 |
163 |
5,218 |
- |
702 |
27 |
7,246 |
|
|
At 31 December 2020 |
11,671 |
956 |
48,134 |
- |
8,528 |
688 |
69,977 |
|
|
Charge for the period |
3,303 |
446 |
14,348 |
- |
2,038 |
20 |
20,155 |
|
|
At 30 September 2021 |
14,974 |
1,402 |
62,482 |
- |
10,566 |
708 |
90,132 |
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
- |
|
|
|
- |
- |
- |
|
|
At 30 September 2021 |
49,570 |
5,674 |
208,110 |
29,614 |
39,569 |
93 |
332,630 |
|
|
At 31 December 2020 |
52,363 |
5,613 |
219,917 |
15,828 |
33,340 |
113 |
327,174 |
|
(1) Assets under construction at 30 September 2021 were €29.6 million (31 December 2020: €15.8 million) which include sustaining capital expenditures and tailings dams project.
(2) Stripping costs
(3) Includes motor vehicles, furniture, fixtures and office equipment which are depreciated over 5-10 years.
(4) The increase in the depreciation relate to the completion of the expansion project in January 2020 and the increase of ore processed.
The above fixed assets are mainly located in Spain.
9. Intangible assets
|
(Euro 000's) |
Permits (1) |
Licences, R&D and software |
|
Total |
|
Cost |
|
|
|
|
|
At 1 January 2020 |
76,538 |
7,610 |
|
84,148 |
|
Additions |
- |
- |
|
- |
|
At 30 September 2020 |
76,538 |
7,610 |
|
84,148 |
|
Additions |
1,672(2) |
1,312 |
|
2,984 |
|
Disposals |
- |
(327) |
|
(327) |
|
At 31 December 2020 |
78,210 |
8,595 |
|
86,805 |
|
Additions |
- |
261 |
|
261 |
|
At 30 September 2021 |
78,210 |
8,856 |
|
87,066 |
|
Amortisation |
|
|
|
|
|
On 1 January 2020 |
13,808 |
7,255 |
|
21,063 |
|
Charge for the period |
3,607 |
49 |
|
3,656 |
|
At 30 September 2020 |
17,415 |
7,304 |
|
24,719 |
|
Charge for the period |
1,268 |
16 |
|
1,284 |
|
Impairment charge |
- |
985 |
|
985 |
|
At 31 December 2020 |
18,683 |
8,306 |
|
26,989 |
|
Charge for the period |
3,430 |
49 |
|
3,479 |
|
At 30 September 2021 |
22,113 |
8,355 |
|
30,468 |
|
Net book value |
|
|
|
|
|
At 30 September 2021 |
56,097 |
501 |
|
56,598 |
|
At 31 December 2020 |
59,527 |
289 |
|
59,816 |
|
|
|
|
|
|
(1) Permits include an amount of €5.0 million related to Proyecto Touro mining rights.
(2) Addition resulting from the acquisition of Atalaya Masa Valverde SLU.
The ultimate recovery of balances carried forward in relation to areas of interest or 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. Considering the carrying value of the assets at Proyecto Riotinto, including the intangible assets and any impairment thereof, the Group assessed that no indicators were present as at 30 September 2021 and thus no impairment has been recognised.
10. Inventories
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Finished products |
3,619 |
|
8,642 |
|
Materials and supplies |
16,354 |
|
13,764 |
|
Work in progress |
1,293 |
|
1,170 |
|
|
21,265 |
|
23,576 |
As of 30 September 2021, copper concentrate produced and not sold amounted to 4,232 tonnes (31 Dec 2020: 12,180 tonnes). Accordingly, the inventory for copper concentrate was €3.6 million (31 Dec 2020: €8.6 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. Trade and other receivables
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Non-current |
|
|
|
|
Deposits |
301 |
|
48 |
|
Loans |
2,324 |
|
2,667 |
|
Other non-current receivables |
2,696 |
|
- |
|
|
5,321 |
|
2,715 |
|
Current |
|
|
|
|
Trade receivables at fair value - subject to provisional pricing |
6,490 |
|
20,304 |
|
Trade receivables from shareholders at fair value - subject to provisional pricing (Note 22.3) |
16,202 |
|
3,946 |
|
Other receivables from related parties at amortised cost (Note 22.3) |
56 |
|
56 |
|
Deposits |
21 |
|
21 |
|
VAT receivables |
18,005 |
|
15,816 |
|
Tax advances |
- |
|
9 |
|
Prepayments |
4,476 |
|
2,507 |
|
Other current assets |
141 |
|
522 |
|
|
45,391 |
|
43,191 |
|
Allowance for expected credit losses |
- |
|
- |
|
Total trade and other receivables |
50,712 |
|
45,906 |
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.
Loans are related to an agreement entered by the Group and Lain Technologies Ltd in relation to the construction of the pilot plan to develop the E-LIX System. The Loan is secured with the pilot plant, has a grace period of up to four years and repayment terms depending on future investments on the system. Amounts drawn down bear interest at 2%.
Non-current deposits included €250k (YTD 2020: €250k) as a collateral for bank guarantees, which was recorded as restricted cash (or deposit). Restricted cash related to the collateral was reclassified to non-current trade and other receivables since the deposit is considered to be long term.
12. Cash and cash equivalents
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Cash at bank and in hand |
140,854 |
|
37,767 |
As at 3 0 September 2021, the Group's operating subsidiary held restricted cash of €15.4 million related to the amount that the Company transferred to a trust account (the "Trust Account") representing the full amount of interest claimed by Astor to 30 June 2022, see note on Deferred Consideration.
Cash and cash equivalents denominated in the following currencies:
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Euro - functional and presentation currency |
28,633 |
|
2,431 |
|
Great Britain Pound |
62 |
|
2,019 |
|
United States Dollar |
112,159 |
|
33,317 |
|
|
140,854 |
|
37,767 |
13. Share capital and share premium
|
|
|
Shares 000's |
Share Capital Stg£'000 |
Share premium Stg£'000 |
Total Stg£'000 |
|
|||||||||||
|
Authorised |
|
|
|
|
|
|
|||||||||||
|
Ordinary shares of Stg £0.075 each* |
|
200,000 |
15,000 |
- |
15,000 |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||
|
Issued and fully paid |
|
|
|
000's |
Euro 000's |
Euro 000's |
Euro 000's |
||||||||||
|
Issue Date |
Price (£) |
Details |
|
|
|
|
|
|
|||||||||
|
31 December 2019/1 January 2020 |
|
|
137,340 |
13,372 |
314,319 |
327,691 |
|
||||||||||
|
22 Dec 2020 |
2.015 |
Exercised share options (c) |
|
228 |
19 |
491 |
510 |
||||||||||
|
22 Dec 2020 |
1.475 |
Exercised share options (c) |
|
41 |
3 |
65 |
68 |
||||||||||
|
22 Dec 2020 |
1.440 |
Exercised share options (c) |
|
499 |
42 |
758 |
800 |
||||||||||
|
22 Dec 2020 |
2.302 |
Bonus share to former Key management (d) |
|
33 |
3 |
81 |
84 |
||||||||||
|
|
|
000's |
Euro 000's |
Euro 000's |
Euro 000's |
|
|||||||||||
|
31 December 2020/1 January 2021 |
|
138,141 |
13,439 |
315,714 |
329,153 |
||||||||||||
|
12 Feb 2021 |
2.015 |
Exercised share options(b) |
|
41 |
4 |
91 |
95 |
||||||||||
|
18 May 2021 |
2.015 |
Exercised share options(a) |
|
20 |
1 |
45 |
46 |
||||||||||
|
18 May 2021 |
1.475 |
Exercised share options(a) |
|
10 |
1 |
15 |
16 |
||||||||||
|
30 September 2021 |
|
138,212 |
13,445 |
315,865 |
329,310 |
||||||||||||
Authorised capital
The Company's authorised share capital is 200,000,000 ordinary shares of Stg £0.075 each.
Issued capital
(a) On 18 May 2021, the Company was notified that certain employees exercised options over 30,000 ordinary shares of £0.075 at a price between £1.475 and £2.015, thus creating a share premium of €61k.
(b) On 12 February 2021, the Company was notified that certain employees exercised options over 40,750 ordinary shares of £0.075 at a price of £2.015, thus creating a share premium of €91k.
(c) On 22 December 2020, the Company was notified that certain employees exercised options over 768,250 ordinary shares of £0.075 at a price between £1.44 to £2.015, thus creating a share premium of €1,314k.
(d) On 22 December 2020, the Company granted a bonus share to a former Key management of 33,333 ordinary shares of £0.075 at a price £2.302.
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 sub division 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 2021:
|
Grant date |
Expiry date |
Exercise price £ |
Share options |
||||||
|
23 Feb 2017 |
22 Feb 2022 |
1.44 |
314,000 |
||||||
|
29 May 2019 |
28-May-2024 |
2.015 |
1,003,750 |
||||||
|
8 July 2019 |
7 July 2024 |
2.045 |
400,000 |
||||||
|
30 June 2020 |
29 June 2030 |
1.475 |
998,500 |
||||||
|
24 June 2021 |
23 June 2031 |
3.090 |
1,150,000 |
||||||
|
Total |
3,866,250 |
||||||||
|
|
|
||||||||
|
|
|
|
Weighted average exercise price £ |
Share options |
|||||
|
|
At 1 January 2021 |
1.759 |
2,787,000 |
||||||
|
Options executed during the year |
2.015 |
(60,750) |
|||||||
|
Options executed during the year |
1.475 |
(10,000) |
|||||||
|
Granted during the year |
3.090 |
1,150,000 |
|||||||
|
|
30 September 2021 |
1.754 |
3,866,250 |
||||||
Warrants
As at 30 September 2021 and 2020 there were no warrants.
14. Other reserves
|
(Euro 000's) |
Share option |
Bonus share |
Depletion factor(1) |
Fair value reserve of financial assets at FVOCI (2) |
Non-Distributable reserve(3) |
Distributable reserve(4) |
|
Total |
|
At 1 January 2020 |
7,371 |
208 |
10,878 |
(1,144) |
3,430 |
2,093 |
22,836 |
|
|
Recognition of share- based payments |
569 |
- |
- |
- |
- |
- |
|
569 |
|
Recognition of depletion factor |
- |
- |
8,000 |
- |
- |
- |
|
8,000 |
|
Recognition of non-distributable reserve |
- |
- |
- |
- |
2,198 |
- |
|
2,198 |
|
Recognition of distributable reserve |
- |
- |
- |
- |
- |
- |
|
- |
|
Change in fair value of financial assets at fair value through OCI |
- |
- |
- |
52 |
- |
- |
|
52 |
|
At 30 September 2020 |
7,940 |
208 |
18,878 |
(1,092) |
5,628 |
2,093 |
|
33,655 |
|
Recognition of share-based payments |
247 |
- |
- |
|
- |
- |
|
247 |
|
Recognition of depletion factor |
- |
- |
6,155 |
- |
- |
- |
|
6,155 |
|
Change in fair value of financial assets at fair value through OCI |
- |
- |
- |
(8) |
- |
- |
|
(8) |
|
At 31 December 2020 |
8,187 |
208 |
25,033 |
(1,100) |
5,628 |
2,093 |
|
40,049 |
|
Recognition of share-based payments |
605 |
- |
- |
- |
- |
- |
|
605 |
|
Recognition of depletion factor |
- |
- |
(55) |
- |
- |
6,155 |
|
6,100 |
|
Recognition of non-distributable reserve |
- |
- |
- |
- |
2,372 |
- |
|
2,372 |
|
Recognition of distributable reserve |
- |
- |
- |
- |
- |
3,317 |
|
3,317 |
|
Change in fair value of financial assets at fair value through OCI |
- |
- |
- |
(34) |
- |
- |
|
(34) |
|
At 30 September 2021 |
8,792 |
208 |
24,978 |
(1,134) |
8,000 |
11,565 |
|
52,409 |
(1) Depletion factor reserve
At 30 September 2021, the Group has disposed €6.1 million (30 September 2020: €8.0 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 when profit generated equal to a 10% of profit/(loss) for the year until 20% of share capital is reached.
(4) Distributable reserve
The Group reclassified 10% of the profit of 2020 to distributable reserves.
15. Trade and other payables
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Non-current |
|
|
|
|
Government grant |
28 |
|
13 |
|
Other non-current payables |
1,435 |
|
1,435 |
|
|
1,463 |
|
1,448 |
|
Current |
|
|
|
|
Trade payables |
47,799 |
|
63,946 |
|
VAT payables |
- |
|
4,355 |
|
Accruals |
4,710 |
|
60 |
|
Other |
42 |
|
76 |
|
|
52,551 |
|
68,437 |
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.
16. Provisions
|
(Euro 000's) |
Other tax costs |
Legal costs |
Rehabilitation costs |
|
Total costs |
|
1 January 2020 |
- |
388 |
6,553 |
|
6,941 |
|
Additions |
|
300 |
384 |
|
684 |
|
Finance cost |
|
- |
62 |
|
62 |
|
At 30 September 2020 |
|
688 |
6,999 |
|
7,687 |
|
Additions |
|
11 |
- |
|
11 |
|
(Reduction) / addition of provision |
|
(73) |
17,495 |
|
17,422 |
|
Finance cost |
|
- |
174 |
|
174 |
|
At 31 December 2020 |
- |
626 |
24,638 |
|
25,264 |
|
Additions |
2,617 |
- |
510 |
|
3,127 |
|
Reduction of provision |
- |
(278) |
(43) |
|
(321) |
|
Finance cost |
- |
- |
167 |
|
167 |
|
At 30 September 2021 |
2,617 |
348 |
25,272 |
|
28,237 |
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Non-current |
28,237 |
|
25,264 |
|
Total |
28,237 |
|
25,264 |
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 provision as at 30 September 2021 was 1.36%, which is the average 15-year Spain Government Bond rate from 2016-2020 (31 December 2020: 1.36%). An inflation rate of 1% is applied on annual basis.
Other tax provision
Other tax costs include taxes on (i) construction, installation and works provision and (ii) other local taxes provision amounting to €2.4 million and €0.2 million, respectively.
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 2021.
17. Borrowings
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Non-current borrowings |
|
|
|
|
Credit facilities |
42,242 |
|
- |
|
|
42,242 |
|
- |
|
Current borrowings |
|
|
|
|
Credit facilities |
9,758 |
|
- |
|
|
9,758 |
|
- |
The Group had uncommitted credit risks totalling €120.5 million. During Q1 2021, Atalaya drawdown some of its existing credit facilities to pay the Deferred Consideration (Note 19). Interest rates of existing credit facilities, including facilities used to pay the Deferred Consideration, range from 1.60% to 2.45% and the average interest rate on all facilities used and unused is 1.79%. The maximum term of the facilities is three years. In addition, as at 30 September 2021, the Company had used nil million in existing credit facilities.
18. Leases liabilities
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Non-current |
|
|
|
|
Lease liabilities |
5,063 |
|
4,796 |
|
|
5,063 |
|
4,796 |
|
Current |
|
|
|
|
Lease liabilities |
600 |
|
592 |
|
|
600 |
|
592 |
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 €0.4 million (2020: €0.4 million) for the nine month period ended 30 September 2021. The duration of the land lease is for a period of thirteen years, payments are due at the beginning of the month escalating annually on average by 1.5%. At 30 September 2021, the remaining term of this lease is eleven years and a half.
The duration of the motor vehicle and laboratory equipment lease is for a period of four years, payments are due at the beginning of the month escalating annually on average by 1.5%. At 30 September 2021, the remaining term of this motor vehicle and laboratory equipment lease is one year and a half, and two years, respectively.
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 duration of the warehouse lease is for a period of thirteen years, payments are due at the beginning of the month escalating based on the yearly Spanish consumer price index. At 30 September 2021, the remaining term of this lease is eleven years and a half.
|
(Euro 000's) |
30 Sep 2021 |
31 Dec 2020 |
|
Minimum lease payments due: |
|
|
|
- Within one year |
600 |
592 |
|
- Two to five years |
1,678 |
2,068 |
|
- Over five years |
3,384 |
2,728 |
|
Present value of minimum lease payments due |
5,662 |
5,388 |
|
(Euro 000's) |
Lease liability |
|
Balance 1 January 2021 |
5,388 |
|
Additions |
729 |
|
Interest expense |
8 |
|
Lease payments |
(463) |
|
Balance at 30 September 2021 |
5,662 |
|
|
|
|
Balance at 30 September 2021 |
|
|
- Non-current liabilities |
5,062 |
|
- Current liabilities |
600 |
|
|
5,662 |
19. Deferred consideration
In September 2008, the Group moved to 100% ownership of Atalaya Riotinto Mineral S.L. ("ARM") (and thus full ownership of Proyecto Riotinto) by acquiring the remaining 49% of the issued capital of ARM. At the time of the acquisition, the Group signed a Master Agreement (the "Master Agreement") with Astor Management AG ("Astor") which included a deferred consideration of €43.9 million (the "Deferred Consideration") payable as consideration in respect of the acquisition among other items. The Company also entered into a credit assignment agreement at the same time with a related company of Astor, Shorthorn AG, pursuant to which the benefit of outstanding loans was assigned to the Company in consideration for the payment of €9.1 million to Shorthorn (the "Loan Assignment").
The Master Agreement has been the subject of litigation in the High Court and the Court of Appeal that has now concluded. As a consequence, ARM must apply any excess cash (after payment of operating expenses, sustaining capital expenditure, any senior debt service requirements and up to US$10 million per annum (for non-Proyecto Riotinto related expenses)) to pay the consideration due to Astor (including the Deferred Consideration and the amount of €9.1 million payable under the Loan Assignment). "Excess cash" is not defined in the Master Agreement leaving ambiguity as to how it is to be calculated.
On 2 March 2020, the Company filed an application in the High Court to seek clarity on the definition of "Excess Cash". The Company and Astor have now exchanged statements of case to set out their formal position. The trial is listed to be heard from 21 February 2022 (the "Trial"). Following the filing of the statements of case for the Trial, Astor applied to Court seeking an early determination (without the need for a full trial) of the dispute in relation to the "Excess Cash" (the "Summary Judgment application"). The Summary Judgment application was heard on 14-15 June 2021. The Court dismissed Astor's application and the question as to whether any residual interest is payable to Astor therefore remains to be resolved at Trial.
As previously announced, during December 2020 the Board had discussions and considered an early payment of the Deferred Consideration and the Loan Assignment provided certain conditions could be met. Conditions included among others the execution of credit facilities agreements to fund the payment.
In March 2021, the Company fulfilled all conditions required by the Board of Directors and made the early payment of €53 million to Astor. The payment was fully funded by unsecured credit facilities entered into between December 2020 and February 2021 at interest rates ranging from 1.60% to 2.45% and repayable by 2023 and 2024.
The payment of the Deferred Consideration does not end the ongoing litigation as the issue as to whether any residual interest may or may not be payable remains unresolved. Consequently, on 15 July 2021, the Company transferred €15.4 million to a trust account (the "Trust Account") representing the full amount of interest claimed by Astor to 30 June 2022. The holder of the Trust Account has provided an undertaking to hold the full amount until settlement of the claim to interest or judgment following the Trial. The Company understands the monies held in the Trust Account safeguard the maximum outstanding liability to Astor in relation to the Master Agreement. On that basis, and because the Consideration has been paid in full in accordance with the Master Agreement, Atalaya treats itself as free of the obligations set out in the Master Agreement.
The Company is currently working on other court directions in preparation for the Trial and continues to be confident in its case and is of the view that no interest will be payable to Astor.
20. Acquisition, incorporation and disposal of subsidiaries
There were neither acquisition nor incorporation of subsidiaries during the nine month period to 30 September 2021.
21. Wind-up of subsidiaries
There were no subsidiaries wound-up during the nine month period to 30 September 2021.
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 months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Directors' remuneration and fees |
265 |
246 |
770 |
758 |
|
Director´s bonus (1) |
- |
- |
438 |
- |
|
Share option-based benefits and other benefits to directors |
130 |
90 |
241 |
202 |
|
Key management personnel fees |
139 |
130 |
399 |
379 |
|
Key management bonus (1) |
- |
- |
265 |
- |
|
Share option-based and other benefits to key management personnel |
220 |
108 |
350 |
266 |
|
|
754 |
574 |
2,463 |
1,605 |
(1) These amounts in 2021 related to the performance bonus for 2020 approved by the Board of Directors of the Company during H1 2021. 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. Bonuses for 2019 were recorded in Q4 2020 and hence no amounts are disclosed for the comparative for Q3 YTD period.
22.2 Share-based benefits
On 25 June 2021, the Company announced that in accordance with the Company's Long Term Inventive Plan 2020 which was approved by shareholders at the Annual General Meeting on 25 June 2020, it has granted 1,150,000 share options to Persons Discharging Managerial Responsibilities and other management.
22.3 Transactions with related parties/shareholders
i) Transaction with shareholders
|
(Euro 000's ) |
Three months ended 30 Sep 2021 |
Three months ended 30 Sep 2020 |
Nine months ended 30 Sep 2021 |
Nine months ended 30 Sep 2020 |
|
Trafigura- Revenue from contracts |
45,460 |
19,148 |
96,390 |
32,096 |
|
Freight services |
- |
- |
- |
- |
|
|
45,460 |
19,148 |
96,390 |
32,096 |
|
Gain relating provisional pricing within sales |
(2,032) |
(2,574) |
(3,682) |
(1,275) |
|
Trafigura - Total revenue from contracts |
43,428 |
16,573 |
92,708 |
30,821 |
ii) Period-end balances with related parties
|
(Euro 000's) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Receivables from related parties: |
|
|
|
|
Recursos Cuenca Minera S.L. |
56 |
|
56 |
|
Total (Note10) |
56 |
|
56 |
The above balances bear no interest and are repayable on demand.
iii) Period-end balances with shareholders
|
(Euro 000's ) |
30 Sep 2021 |
|
31 Dec 2020 |
|
Trafigura - Debtor balance- subject to provisional pricing |
16,202 |
|
3,946 |
|
Total (Note 10) |
16,202 |
|
3,946 |
The above debtor balance arising from sales of goods and other balances bear no interest and is repayable on demand.
23. Contingent liabilities
Judicial and administrative cases
In the normal course of business, the Group may be involved in legal proceedings, claims and assessments. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and the Group accrues for adverse outcomes as they become probable and estimable.
24. Commitments
There are no minimum exploration requirements at Proyecto Riotinto. However, the Group is obliged to pay local land taxes which currently are approximately €235,000 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 €2.0 million. Costs are then borne by the joint venture partners in accordance with their respective ownership interests.
25. Significant events
The "Dirección Xeral de Calidade Ambiental e Cambio Climático", (the General Directorate for the Environment and Climate Change of Galicia), announced on 28 January 2020 that a negative Environmental Impact Statement for Proyecto Touro (Declaración de Impacto Ambiental) had been signed.
The short release stated that the decision was based on two reports which form part of a wider evaluation consisting of fifteen reports produced by different departments of the Xunta de Galicia. These two reports challenge the ability of the Company to guarantee that there will be no environmental impact of the Project on the Ulla River and related protected ecosystems which are located downstream.
On 1 March 2021, Atalaya received the formal communication from Xunta de Galicia of the negative Environmental Impact Declaration on Proyecto Touro.
On 10 February 2021, the Company announced that its Board of Directors had appointed Mr. Neil Gregson as an independent Non-Executive Director of the Company.
On 12 February 2021, the Company was notified that certain employees exercised options over 40,750 ordinary shares of £0.075.
On 15 March 2021, Atalaya announced that it has made the payment of the €53 million (the "Deferred Consideration") to Astor Management following the approval of its Board of Directors. This amount arises from arrangements entered with Astor in 2008 in relation to Proyecto Riotinto. The payment was financed with unsecured credit lines by four major Spanish banks having a three-year tenure and an average annual interest rate of approximately two per cent.
On 25 March 2021, the Company announced that Dr. José Nicolas Sierra who retired as an Independent Non-Executive Director and the Chair of the Physical Risk Committee of Atalaya, with an effective date of 31 March 2021.
On 12 April 2021, the Company announced that Mr. Damon Barber stepped down as a Non-Executive Director of the Company with immediate effect.
On 17 May 2021, the Company was notified that Harry Liu, Director of the Company, sold 5,000 ordinary shares in Atalaya at an average price of 356.0 pence per share.
On 18 May 2021, the Company was notified that Harry Liu, Director of the Company, sold 3,698 ordinary shares in Atalaya at an average price of 358.0 pence per share.
On 26 May 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the Company, reduced its % of voting rights from 14.17% to 12.97%.
On 25 June 2021, the Company announced that in accordance with the Company's Long Term Inventive Plan 2020 which was approved by shareholders at the Annual General Meeting on 25 June 2020, it has granted 1,150,000 share options to Persons Discharging Managerial Responsibilities and other management.
The Options expire ten years from the deemed date of grant (24 June 2021), have an exercise price of 309.0 pence per ordinary share, based on the average of the mid-market closing prices for the five dealing days immediately preceding the grant date, and vest in two equal tranches, half on grant and half on the first anniversary of the granting date.
On 29 June 2021, the Company was notified that Harry Liu, Director of the Company, sold 5,000 ordinary shares in Atalaya at an average price of 310.0 pence per share. On 1 July 2021 the Company announced that it was notified that Harry Liu, Director of the Company, sold 192 ordinary shares in Atalaya at an average price of 308.0 pence per share.
On 5 July 2021, the Company announced that it was notified, that Alberto Lavandeira, Chief Executive Officer and Managing Director of the Company, purchased 40,000 ordinary shares at an average price of 310.0 pence per share. The Company was also notified on 3 July 2021, that Harry Liu, Director of the Company, sold, on 1 July 2021, 170 ordinary shares in Atalaya at an average price of 309.0 pence per share.
Following the above transactions Mr Lavandeira and Mr. Liu are interested in an aggregate of 280,000 and 386,019 ordinary shares of the Company representing 0.20% and 0.28% of the current issued share capital, respectively.
On 15 July 2021, the Company transferred €15.4 million to a trust account (the "Trust Account") representing the full amount of interest claimed by Astor to 30 June 2022. The holder of the Trust Account has provided an undertaking to hold the full amount until settlement of the claim to interest or judgment following the trial in February 2022. The Company understands the monies held in the Trust Account safeguard the maximum outstanding liability to Astor in relation to the Master Agreement. On that basis, and because the Consideration has been paid in full in accordance with the Master Agreement, Atalaya treats itself as free of the obligations set out in the Master Agreements (refer to Note 19). The Company is currently working on other court directions in preparation for the Trial and continues to be confident in its case and is of the view that no residual intertest should be payable to Astor.
On 13 August 2021, the Company was notified that Harry Liu, Director of the Company, sold 11,000 ordinary shares in Atalaya at an average price of 324.0 pence per share.
On 4 August 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the Company, reduced its % of voting rights from 11.79% to 10.94%.. And on 18 August 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the Company, reduced its % of voting rights to nil.
On 20 August 2021, a new shareholder of the Company, Polar Capital LLP, acquired 5.08% of voting rights
On 6 October 2021, the Company announced that the recent drilling campaign has intersected broad intervals of massive and stockwork type polymetallic sulphide mineralization including significant high-grade intercepts at both Masa Valverde and Majadales.
26. Events after the reporting period
Dividends
Following the expansion of Proyecto Riotinto's processing capacity to 15 Mtpa, Atalaya has been generating robust cash flow as a result of the plant consistently operating above nameplate capacity, coupled with the strong copper price environment.
Accordingly, on 27 October 2021, Atalaya initiated a sustainable dividend policy that will allow for continued investments in its portfolio of low capital intensity growth projects, such as the San Dionisio deposit, Proyecto Masa Valverde and Proyecto Touro.
Dividend Policy
Consistent with its strategy to create and deliver shareholder value, the Company approved a Dividend Policy that will make an annual payout of between 30% and 50% of free cash flow generated during the applicable financial year.
The Dividend Policy will take effect in financial year 2022. The annual Ordinary Dividend will be paid in two half-yearly instalments and announced in conjunction with future interim and full year results.
The declaration and payment of all future dividends under the new policy will remain subject to approval by the Board of Directors.
Inaugural Dividend
Also on 27 October 2021, the Board of Directors elected to declare an Inaugural Dividend of US$0.395 per ordinary share , which was equivalent to £ 0.294 per share or €0.345 per share .
The record date for the Inaugural Dividend was 5 November 2021 and the shares became ex-dividend on 4 November 2021.
The Inaugural Dividend will be paid on 1 December 2021 in US Dollars, with an option for shareholders to elect to receive the dividend in Sterling or Euros. Shareholders were required to communicate their currency election to the Company by no later than 11 November 2021. The exchange rates for payments in Sterling and Euros were fixed by Atalaya on 15 November 2021 and subsequently announced.
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