Q4 2021 Operations Update and 2022 Guidance
13 January 2022
Atalaya Mining Plc.
("Atalaya" or the "Company")
Fourth Quarter 2021 Operations Update and 2022 Production Guidance
New annual production record achieved
Atalaya Mining Plc (AIM:ATYM, TSX:AYM) is pleased to announce its operations update for the fourth quarter of 2021 ("Q4 2021" or the "Period") and to provide production guidance for 2022.
Proyecto Riotinto Operating Highlights
|
|
Q4 |
Q3 |
Full year |
||||
|
2021 |
2020 |
2021 |
2021 |
2020 |
2022 Guidance |
||
|
Ore mined |
(M tonnes) |
3.5 |
3.5 |
3.4 |
13.5 |
13.6 |
15.5 |
|
Waste mined |
(M tonnes) |
7.3 |
6.7 |
7.8 |
30.5 |
24.1 |
23.4 |
|
Ore milled |
(M tonnes) |
3.8 |
3.9 |
3.9 |
15.8 |
14.8 |
15.2 - 15.8 |
|
Cu grade |
(%) |
0.41 |
0.43 |
0.40 |
0.41 |
0.45 |
0.42 |
|
Cu recovery |
(%) |
87.16 |
85.73 |
87.18 |
86.01 |
84.52 |
83 - 86 |
|
Cu production |
(tonnes) |
13,885 |
14,332 |
13,893 |
56,139 |
55,890 |
54,000 - 56,000 |
· Consistent performance in Q4 2021 with production exceeding expectations at 13,885 tonnes of copper due to better metallurgical recoveries which offset the slightly lower head grade.
· A new annual production record of 56,139 tonnes of copper was achieved in 2021, exceeding Atalaya's increased guidance despite operational challenges and risks related to COVID-19 restrictions throughout the year.
· In Q4 2021, 3.8 million tonnes of ore were milled with a copper recovery of 87.16%.
· On-site concentrate inventories at the end of Q4 2021 were approximately 5,254 tonnes. All concentrate in stock at the beginning of the Period and produced during the Period was delivered to the port at Huelva.
· Copper prices increased during Q4 2021 compared with Q4 2020 and Q3 2021, with an average realised price per pound of copper payable, including the QPs closed in the Period, of $4.36/lb compared with $4.31/lb in the previous quarter. The average copper spot price during the quarter was $4.40/lb. The realised price during Q4 2021 excluding QPs was approximately $4.40/lb.
· All-in Sustaining Costs ("AISC") for 2021 are expected to be slightly below the lower end of the revised 2021 cost guidance due mainly to the U.S. dollar strengthening against the Euro and higher copper tonnes produced. Further details on costs will be provided with the 2021 Financial Statements to be reported in March 2022.
2022 Production Guidance
· Atalaya's operating budget for 2022 was set in early December 2021 based on certain economic assumptions of expected inflation, particularly with respect to energy costs.
· On this basis, full year 2022 copper production is estimated to be in the range of 54,000 to 56,000 tonnes.
· Grade mined during 2022 is expected to be slightly higher than in 2021 owing to pit sequencing. In addition, the plant optimisation initiatives mentioned below are expected to further support copper production.
· During December 2021 and the early days of January 2022, energy prices in Spain have increased significantly due to the sharp increase in wholesale European gas prices. Should the volatility and current energy prices persist for a sustained period, Atalaya expects that its operating budget and production guidance for 2022 may need to be revised.
· The Company is actively monitoring energy prices on a daily basis and is identifying potential measures that could be implemented in response. In the event that energy prices remain at elevated levels for a sustained period, possible measures could include temporary modifications to the mine plan, curtailment of throughput during periods of peak energy prices or reductions in discretionary expenditures.
Proyecto Riotinto optimisation
· During Q4 2021, some cost reduction initiatives were implemented including an expert system to control the SAG mill operations, resulting in lower energy consumption as well as associated reduction of CO2 emissions.
· Permitting of a 50 MW solar plant for self-consumption has advanced and construction is expected to start in the next few weeks.
· Flotation improvements have been implemented during 2021 with the use of new reagents focused on increased recoveries.
· Tailings thickening capacity to be increased in 2022 to recover water with high pH resulting in a reduction of lime consumption.
Reserves and resources updates at Proyecto Riotinto
· NI 43-101 compliant technical reports for the San Dionisio and San Antonio deposits are being finalised and will be released in the coming weeks. As previously announced, a substantial portion of the resources at San Dionisio are potentially mineable by open pit and further polymetallic mineralisation could be exploited using underground mining methods at both San Dionisio and San Antonio.
Growth projects
Proyecto Touro
· Initiatives to address and resolve the historic water issues relating to the old mine have been approved for execution and are currently under construction.
· 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 ahead of the public consultation period that will commence once the Environmental Impact Evaluation is submitted for the new project.
Proyecto Masa Valverde
· As announced on 6 October 2021, exploration work is ongoing at Proyecto Masa Valverde , which includes the Masa Valverde polymetallic deposit, the Majadales discovery and the unexplored Campanario-Descamisada area .
· Positive drilling results previously announced include high grade intercepts within broad intervals of massive and stockwork type polymetallic sulphide mineralisation at both Masa Valverde and Majadales.
· Further drilling results will be released in due course and will be incorporated into the NI 43-101 compliant report for Proyecto Masa Valverde that is currently being prepared by CSA Global and expected during Q1 2022 .
Proyecto Riotinto East
· An electromagnetic airborne geophysical survey started during Q4 2021 has largely been completed. The survey covers the investigation permits area located immediately east of Proyecto Riotinto and along the same structural and stratigraphic setting.
· Anomalies identified by the geophysical survey will be followed up with drilling as soon as drill permits are obtained.
Proyecto Ossa Morena
· On 21 December 2021, the Company announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L. establishing a presence in the Ossa Morena Metallogenic Belt in the southwest of Spain.
· Proyecto Ossa Morena includes the Alconchel copper-gold-iron project, which has NI 43-101 compliant total indicated and inferred resources of 23 Mt at 0.53% Cu, 0.15 g/t Au and 11.2% Fe (Golder Associates, October 2017).
· The Company has approved an exploration budget of up to €2 million for 2022, which is scalable depending on drilling results and focused on the Alconchel, Pallares, Vicaria and Guijarro targets.
E-LIX update
· On 6 January 2022, the Company announced the start of construction of an industrial-scale E-LIX plant at Proyecto Riotinto. The plant will utilise the E-LIX System, an extraction process developed and owned by Lain Technologies Ltd, to produce high value copper and zinc metals from complex sulphide concentrates from Proyecto Riotinto.
· E-LIX has the potential to unlock significant value from Atalaya's portfolio of polymetallic resources in the Proyecto Riotinto district by materially increasing the recoveries of copper, zinc, lead and precious metals from complex sulphide ores.
· The plant has a construction budget of €12 million and will have the capacity to produce between 3,000 and 10,000 tonnes of copper or zinc metal per year. The production of high-purity metals on-site will reduce the transportation costs, treatment charges and penalties associated with producing and delivering conventional concentrates.
· The plant will be fully operational, including commissioning, in 2022.
Alberto Lavandeira, CEO commented:
"The Company has enjoyed another robust quarter culminating in record annual production for 2021. We enter 2022 with a proven operational track record, a range of exciting optimisation workstreams and a strengthened portfolio of growth opportunities. We are mindful of current inflationary pressures and while we shall endeavour to keep costs as low as possible, it is not unreasonable to assume that challenges lie ahead, particularly in relation to unprecedented energy costs. We remain confident that Atalaya is well positioned to navigate any current uncertainty while still investing in its portfolio of growth projects owing to its strong balance sheet. We have much to look forward to in 2022 with the advancement of our projects and exploration activities."
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
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