Earnings call transcript: Atalaya Mining Q4 2024 sees steady performance

Atalaya Mining PLC reported its financial results for Q4 2024, highlighting steady performance amid challenging market conditions. The company maintained strong cost controls and continued investment in strategic projects, despite a slight dip in revenue. The stock price showed a minor decline of 0.27% following the announcement, reflecting cautious market sentiment. According to InvestingPro data, the company maintains a healthy financial position with a "GOOD" overall health score, supported by strong profitability metrics and robust cash management.

Key Takeaways

• Revenue slightly decreased due to lower production levels.
• Operating costs remained low, supporting strong cash flow.
• Significant investment in solar energy and copper projects.
• Production of 90,000 tons of copper in 2024, with improved grades in the last quarter.

Company Performance

Atalaya Mining demonstrated resilience with stable operational performance in Q4 2024. Despite a revenue decline to $372.49 million, representing a -5.67% year-over-year change, the company successfully managed costs, resulting in a robust operating cash flow of €53 million. The company ended the year with €35 million in net cash, underscoring its financial stability. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with a healthy current ratio of 1.53.

Financial Highlights

• Revenue: Slight decrease compared to the previous year.
• Operating cash flow: €53 million.
• Net cash: €35 million.
• Investment: €66 million in solar plant and copper projects.

Outlook & Guidance

Looking ahead, Atalaya Mining aims to produce 50,000 tons of copper in 2025, with plans to reduce cash costs further. The company is advancing its Total copper project, with permit expectations by mid-2025, and targets reaching 100,000 tons of copper production within three years. With a market capitalization of $686 million and a P/E ratio of 24.24, investors seeking detailed analysis can access comprehensive financial metrics and additional ProTips through InvestingPro’s exclusive research reports. Additionally, Atalaya is exploring post-mining land use opportunities, including potential data center infrastructure.

Executive Commentary

CEO Alberto Lavendera emphasized the company’s growth trajectory, stating, "We are a growth company." He further highlighted the long-term production target, noting, "We will be over 100,000 tons of copper in basically three years’ time." Lavendera also stressed the importance of cautious optimism, adding, "We prefer to be conservative and say, look, this is what we believe we are going to be achieving."

Risks and Challenges

• Market volatility and copper price fluctuations could impact profitability.
• Potential delays in project permits and regulatory approvals.
• Economic conditions in Europe affecting demand for copper.
• Energy price volatility impacting operational costs.
• Competition from other copper producers.

Q&A

During the earnings call, analysts inquired about potential rare earth opportunities, the company’s relationship with Trafigura, and the development of the Helix project. Atalaya also addressed challenges related to index inclusion and provided insights into future project timelines, highlighting strategic priorities and growth plans.

This comprehensive overview of Atalaya Mining’s Q4 2024 performance underscores its strategic focus on cost management and growth initiatives, positioning the company for future success in the copper market. With a beta of 1.6 indicating higher market sensitivity, and analysts maintaining a positive outlook, the company shows promise for growth-oriented investors. For deeper insights into Atalaya Mining’s valuation and growth prospects, including exclusive ProTips and detailed financial analysis, visit InvestingPro.

Full transcript - Atalaya Mining Ltd (ATYM) Q4 2024:

Moderator/Presenter, Atalaya Mining PLC: Good morning, and welcome to the Atalaya Mining PLC twenty twenty four annual results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and present. The company may not be in a position to answer every question received during the meeting itself.

However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Alberto Lavendera. Good morning to you.

Alberto Lavendera, CEO, Atalaya Mining PLC: Good morning. Thank you very much. Good morning, everybody, ladies and gentlemen. Thanks for being here with our review presentation of the annual results of 2024 as well as some details in the last quarter of twenty four, especially the financial side because the operational side has already been pre released. I will be following the presentation, which will be available in our web page, if I may.

So let me see if I can go with this presentation. With me, I have Cesar Sanchez, the CFO of the company. If there is any detailed question at the end of the presentation in relation to financials or any other detailed details and numbers, he would be very happy to reply. I’m not going to read slide six, which talks about all the details that we are going to be looking a little bit later. So I will I will just say that in general in this presentation we’ll be looking at operational numbers, the financial results, some corporate activities that we have, some things going on during the year, how are some of our assets doing and of course some a few words in sustainability.

Let me start with the corporate initiatives and the highlights of 2024. ’20 ’20 ’4, of course, was a kind of disappointing year as we said before from some lower rates in general, although we had a good finish of the year in the last quarter. But although we had some it was the first time we had in the last ten years, reduction of our guidance, a review of our guidance, I think it was quite a good year. In April, we moved to the main market, the main market in London. And we also this January, this a couple of months ago, we moved finally all our imagination from Cyprus to Spain.

These things are quite important together because these two changes allow us to become eligible, for the FTSE index, I would say Russell index. And in early March, actually, the review of the index announced that Atalanta would be part of the all share index. And we were very close, very close to be included in the 40 to 50. For some reasons, we were not included at the very end, but we are there. We I’m sure we’ll get back.

Of course, these things, index inclusion is important because we believe that they they will increase the the company visibility to large investors and, of course, will will increase, will help in the trade and liquidity. At our operations, things also went very well. As you can see in this slide, you can see the solar plant, basically built. It took some time, some delays, but finally, we are very proud to see that this is one of the the largest, if not the largest self consumption, solar plant for industrial activity in Spain and also one of the large ones of the world. It basically provides all our power during sunny hours.

And not only will we use the Talaria footprint, and will provide us a stable source of power for realty operations, but it will also produce around 22% of our energy needs at our plant once it’s fully operational later in the year. Right now we have like 80% running. But as I always said, one of the big value drivers of the company is total new project that had been developed in, and in in the North part of Spain, copper project. And in June 24, we were awarded the strategic status for this project by the regional government. This thing, streamlines the permitting process.

It gives basically gives the the regional government one year to to produce all the all the the reports and permits, which will be due in June. And, of course, it can still be some delays if they ask for additional time, some of the departments. But we basically are extremely optimistic. We are quite optimistic that they are the total prospects of approval. And we expect, certainly, we expect environmental decision sometime in this year.

Of course, last but not least, I mean, there’s lots of things going on in our operations. There’s a few of them are shown in the slide seven. And of course, permitting of some initial, the pit that’s close to our our our Federal Colorado operation is should be obtained. It’s very advanced and should be obtained certainly this year, but really will be obtained probably in the next weeks or months, because we have already received some preliminary indications of that. At Masa Valverde, it’s a satellite deposit around 25 kilometers away.

We are about to start the construction of a ramp accessing the high rig copper zone and we are just waiting to finalize the acquisition of some surface rights to install the portal, the box cut. We also will see the ramp up of Elix after lots of issues, startup being a new technology at our installation. And then in addition to that, we have been doing a lot of exploration in our ground, specifically in Mar Masa Valverde area and also in Sweden. And we will be updating the market in new course when especially when we finalize the winter drilling campaign in Sweden, which, as you probably most of you know, they can only drill in the North. Sorry.

In the far North, you can only drill during the winter season because in summer, the ground becomes very muddy and it’s a little bit difficult to and not operational. You can still do it, but it’s not operational. So that’s, I would say, the highlights of what happened in ’24. Before I continue with the operations, let me give you a few few words to sustainability. There’s lots of things that we we have done, and we will be publishing those in the in the new report, sustainability report for ’24 in the in the next few weeks.

Actually has already been approved and then it’s the final print in the glossy. The glossy version has been printed and once it’s done, we’ll be publishing this. We saw some nice, nice improvements in in this thing. First of all, the accidents, the lost time accidents were reduced. We published everything, every small accident, even if it’s just a twist on the ankle or a feet or a small thing, and it’s it’s quite low lower than the industry.

And I think we are very proud of that safety of our employees is is really the most important thing in our operation. But also continue trying to get make progress in water, in electricity consumption rates. Both have been reduced from previous years and we will continue doing so. It’s always good for sustainability, but it’s also good from the operating point of view. And we continue to be good neighbors.

I think one of the good things that we have at Pinto, and I think we are very proud of, is that we have had, basically, almost eleven years in our operation without the minimum problem being not only accepted, but a very welcome partner, a very welcome stakeholder without any strike, without any issues, with the local communities. And we have a foundation that makes significant investments in lots of social activities, cultural activities in the areas around Rio Tinto, around €1,000,000 that go directly to to all kinds of of things that are are really not related to the mine and people welcome it. And, of course, we continue purchasing everything from Spanish suppliers, highlighting that we can make a contribution to the local economy. I think those things are very important, especially we want to continue there for lots of years. Now let’s go to the production results in the last quarter and and also in the in the the whole year.

Well, we had already published the the production results, which were 90,000 tons of copper, slightly similar, slightly lower than previous year, but certainly an improvement versus previous quarters. And finally, we got better grades, substantially higher rates than the rest of the year and also substantially higher rate than the previous quarter. Tons on the plant, the throughput didn’t go as well as expected, although we had a kind of record year overall. But we had some issues with the we had to stop the plant for a while to connect a couple of times the solar plant. And that we could have produced slightly slightly higher, but no big deal.

We had recoveries. We had recoveries that were lower than than average and lower than expected in including copper concentrates. But this is really due to the nature of the ore where we were blending some of the surface material very close to San Benicio where we have an interim permit to start a small pit. And you have to adjust reagents. Right now, the only thing I can report is as a whole, we ended well.

And what we have seen in the first quarter of twenty five, to two months and a half so far indicates that we are improving these figures by substantial margin and we will be well within our guidance so far at least with what we can see. From those operational results, we can get the financial results. The financial results, the revenue was slightly lower than previous year, basically due to to lower production. And, and the operating costs, it’s important that were also lower. Lower because the cost per ton are low are very similar to previous years.

So we were able to maintain the cost per ton. But, of course, when you produce a little bit less, your your your EBITDA is slightly lower. And the profits are better than previous year, but that’s due to, an impairment impairment reversal in total for around €7,000,000 Without that, it would have been similar to the previous quarter. This reversal of total is simply because our auditors believe that after the been the prior been declared of strategic interest, Those costs that had been written down at certain time for development prior to 2020 decision, we are optimistic enough that we believe that those things can be capitalized, so we return them back. So they give slightly higher profits.

Investments similar to previous year and and even with this lower production numbers, we ended with a very strong balance sheet including €35,000,000 in net cash, which is and without that, which is significant, very good position. As a general review of the whole year, very similar to what IBS mentioned for the whole quarter, The revenues were slightly lower due due to the due to the lower sales, but, good cost control, the good cost control that we have, you can see that actually our operating costs were lower even in the fact even with the fact that we treated more tons. So our cost per unit per ton has been lower. We have made a big effort to even fight inflation. The bid decrease is much more modest than the revenue decrease.

As a result of that, we had operating cash flow of 53,000,000, which helped us, still invest 66,000,000 across our business, which includes solar plant, the Helix, the exploration in Sweden and Valverde, so and maintaining a very good balance sheet. Looking at the breakdown of our costs, as you know, we provide all this good guidance and very detailed guidance on how we do. And you can see that all in costs and well, the site operating costs were were slightly higher than previous years. But this is due, as I said before, to the lower production. So in the cost per unit, they were were similar.

But when you consider that we had also always some, let’s call it a good luck or a little bit better behavior on the on the some other things, for example, the byproduct rates. When we were treating low grade, low grade copper at the pit, we saw since about two years ago, year and a half ago, that we had an area with high silver content where we could blend it. Without much copper, we can blend it in through the plant and produce some additional silver, which is helping with around 20¢ with our byproduct credit. So overall, our cash cost is is similar to lower than previous year, and we have been able to maintain a quite decent cash cost even considering that we had this lower production. So these silver crates have helped out to offset.

But, and in the in the we always report all in sustaining costs. We believe this is the only way to do it simply because we are capitalizing a lot of our stripping because we are moving more material to open the pit and to avoid any future problems. And with that, our all in costs were around $3.26 for a year, slightly higher than previous years, but still quite good considering the lower production, lower production of the year. So with that, how do we look? We always like to compare ourselves with with try to be competitive, try to be constant.

And here, we have, we are showing some of benchmark with compare other peers. We believe that our all in sustaining costs, which is the right measure to measure your operation, are competitive and are within the industry guidance considering our position. And we have been fighting inflation. And in the long run, we expect that this the evolution of this all in cost is going to be positive and going lower. Why?

Because we are going to be producing higher grade, which reduces some more production, reduces your all in costs. We also seen in the future a good evolution of the treatment charges, which is expected to be quite lower this year and can be five onwards due to the lack of concentrates in the world. And and also we we expect to see also reduction of energy prices. So with that, how do we see the year? We’ve been given some guidance which, we believe is conservative, but we prefer to be conservative and say, look, this is what we believe we are going to be achieving.

Around 50,000 tons of copper in the year. So far, the indication this first quarter, the year has started quite well, so this is encouraging. The cash cost respect to have them a little bit lower than ’24. And the all in costs, we will have a slightly similar to ’24 simply because we are going to be having around 20¢ of of capitalized shipping at Colorado. We need to do that.

We need to do that because because, we want to open the pit to make sure we have several lots of fronts available for for blending and be able to have a constant feed at the plant, which is good for recoveries, good for grades, and we’ll be able to blend with the material coming from San Dimitio, which is slightly slightly, more complex, although higher rate. We will be doing investments in San Dimitio, which will include a big a big a big pushback of the basically, the hill. I will show you a picture a little bit later, which also includes moving, of a road and also tell you how things is this is progressing very well. We also start our, the ramp access ramp to Masa Alverde going towards the high grade copper zone that we have identified there. We have to finalize, some works in the solar plant to be able to make it full to have it produced in full capacity and as well as continue with the tailings expansion.

So overall, it’s going to be a very busy year, but but but but very interesting. Looking at the itself in this some of this big, big investments, everybody asks us about what’s the process on an issue. You can see in the picture that the actually, the the the mining is progressing well. And what we are waiting is for a final permit, basically, to remove the hill that you see in the left side, which is in minute. In the meantime, we are mining with an interim pit that you can see there.

And this contains much higher grades. And, of course, we need to move a lot of movement of around 30,000,000 tons in order to get to this to the main area. This is the the big part. We are in the in the last part of the administration to complete the the all the the permitting stage. We want to make sure that things are done correctly.

And but we as I said, we don’t expect the issues. We will continue right now as it’s not affecting us at all with the blending of our existing operations. As part of that, we are already advancing the move of a road. This road basically is behind the pit. So you can see it very clear at the far end, a white areas is the solar plant.

The road just goes around the pit. As you can see, it’s very advanced and very neat and very nice. And, we will expect to be finishing this road during this year. By the way, this road has been moved several times. So I know some people were had questions.

We were able to move on a national road. You can see we are, and this is what we are doing right now. We we have the permits. We will be providing updates of of how the work progresses, as we go through the year. Another important thing we are going to be starting is an access ramp to Masa Valverde.

Remind you that Masa Valverde is a set of group of deposits of BMS deposits. The main one is Masa Valverde is shown in the picture at the left, very left. And in the right hand picture, it’s also shown on the right is the deeper one. It contains massive sulfides polymetallic, but in one of the areas it contains high grade coppers. This is the area where we are defining with infill drilling from surface.

And the satellite deposits located around 25 kilometers straight line, around 30 kilometers by road. We are in the basically, in the final stages of getting the the land to to install the portal with all the permits. And after that, we will very likely start to to to drive the ramp as soon as possible. This year, we will be given updates of their final drilling in this copper zone and and in our in our plans. But this is something that’s going on already as we speak.

And then, of course, we will continue unlocking some some value in in Alex, which is working right now treating, treating copper zinc concentrates with high content of zinc. By the way, in the picture that you can see, a real picture that you see in in the slide right now, in the left side, you can see the road also that going around the around the the plant from another view. An important thing is total. Total, is is is is the big the big value driver, the of the company. The public consultation has been completed in January.

There’s lots of support. Of course, there’s allegations against the project by the by the opposition as expected And in, like, you know, any democratic country, but, we have also had thousands of of of, supports, written supports. We are quite active in that, and we believe, we are believe we are going to be getting the the permits this year sometime mid mid year. This this project is has some very good attributes compared to Rio Tinto. And I think it’s important to mention, how does it compare.

It has a production of around 30,000 compared to around 50,000 Rio Tinto. The CapEx is going to be around €250,000,000 So we are talking about a capital intensive around $10,000 per ton. This is very low compared to what’s around the world. And and there are reasons for that. The reasons he says that the the product is located in a in a place with, with very good infrastructure, four lane motorway running just four kilometers north, three ports, people, train people, house heavy industry in the region.

Some of the equipment that we manufactured for the routine to probably was built in this part of the area. And so that drives the capital intensity quite, to a quite good and competitive number compared to other points in the world. And besides that, it has a low sweep radius like lower than It has a better copper grade, better recovery, better concentrate grade, which results in higher probability with no penalties at all. So the concentrates is going to be a premium concentrate with with a good demand from traders and smelters. And it’s a softer slightly softer.

There’s not a soft material, but it’s slightly softer than Rio Tinto, which means it will consume less balls, less energy, and less explosives. And also the whole is distance is quite low. We are not guiding yet the the all in sustaining cost, but I can advance you that’s well below the one the all in sustaining cost of Rio Tinto, probably in the order of around $1 per pound. So it’s really it’s really quite quite quite good. So where are we going to focus in in this year?

Well, lots of work. Ahead, continue stripping in some initial, get the final permits, basically, to get them out of the way, not because they are too much of a problem. Start or develop to the ramp of total, Obtain the final permits at total. Finalize the commissioning ramp up of Alex. Finalize the full capacity of the solar plant, although it’s not so relevant anyway, anymore.

And, let’s see if we can make some new discoveries in either in Sweden or in Spain. So we have lots of things going on. But, of course, the big conclusion is that this company is is a growth company. At the end, we are going we are talking about having around 52,000, 50 thousand tons of capacity with our existing Terracorpolo pit. But just treating the stock work area at Rio Tinto, where we have in some initial only the upper part, which is only copper and also only copper in the area of of, mass our benefit.

So this this two areas do not require any additional change in the circuit of of the of the mine. So basically, this is just mine and dump it there. That can give additional 10,000 tons of copper without any additional CapEx or relative CapEx. We would need a special addition of zinc circuit in the future to get the polymetallic phase, which can drive us another 20,000 tons of copper equivalent because it has a combined rate much higher. And and, of course, we will have the total project, which is is can give around 30,000 tons of copper, which will take us over 100,000 tons of copper in basically three years’ time, which is almost doubling our existing production capacity.

And this is important because in London, we are the second largest pure play listed. Obviously, the big one is Antafas, which is much larger than us. But anyone who wants to do with a higher visibility, who wants some pure exposure to copper, I think that, Atalaya would provide a very good opportunity to invest. So I think this is the conclusion and that we can end before we get into the q and a. And, I’m happy to take some questions now.

Moderator/Presenter, Atalaya Mining PLC: Fantastic. Alberto, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. Alright. As you can see, we have received a number of questions throughout today’s presentation.

And if I may now hand back to you to chair the q and a, read out the questions where appropriate to do so, and I’ll pick up from you at the end. Thank you.

Alberto Lavendera, CEO, Atalaya Mining PLC: Okay. Good. Let me start. I will try to reply to all the questions if we have time as usual. The first question is high.

Some questions regarding costs. As you expect all in sustaining costs to increase compared to ’24, even you have the PPA and solar operational and some import prices have decreased. Would you provide some insights on this? Additionally, what you would normalize and achieve all in sustaining cost we like in the medium term? Well, yes, it’s, we expect a little bit of increase of volume cost, especially due to the capitalization and the of the stripping.

But PPA and solar remember, that are important but not so relevant. Basically, our our cost of of electricity, it’s is, is around not even $2 per tonne of material, the cost of electricity global with around sorry, euros 2 per tonne roughly a little bit less, but anyway, euros 2 per tonne versus a €15 per tonne total cost of mining plant in G and A. So even if you reduce a little bit your due to the solar in PPA, which is let’s say you can get it from two to 1.8 is not so relevant in the overall cost. What’s more relevant here is the only sustaining costs. How do we look long term?

It’s a very good question. People asked, about what happens with your continuing investment in in, Tailings. You can see there that every year we have, like, 10¢ coming from Tailings. This thing is expected to decrease in the future, in future being around three years because we expect to permit a new deposit of tailings, which will require lower ongoing additions of waste every year. The reason of that is that we have more reserves and resources coming from Valverde, San Dimitio, San Antonio.

And it and also we believe we are going to be expanding the mineable open pit reserves at Cerro Colorado with our recent drilling. So we will eventually require some additional space. So we are in very, very well advanced already with the permit being with the project being discussed on to to try to get a place permitted with with much lower capital intensity in a year than the one that we have right now. That’s where I see things going. In the future, we also see more of our concentrates going to Spain and Europe due to the that will probably take transport costs of around 10¢ and and due to the fact that there is a lack of concentrates in the world and specifically in Europe.

And with new smelters coming on stream in Indonesia, that will also help because they will deviate some of these concentrates to that areas and the conditions in Europe should improve. So I think in the meantime, we will see those improvements. Other than that, I don’t see a huge increase or decrease in all in sustaining costs because we have what we have low grade. When we get higher production from Sandin Nishi in a blend and we have an average production of 60,000, 60 five thousand tons of copper. Of course, we’ll see a decrease which is more or less automatic.

Another question is, could you provide more insight into our rates and recovery rates to 2025? We have already passed the most challenging phase of core quality. Yes, we have passed most of the challenging phases because we were basically blending the surface in this interim pit. We are, as I said before, already getting into better grades, as we see in January, February, March. We have to be careful not to blend the material.

We cannot just put high grade only for several reasons. One is that we don’t have enough capacity in the filters. We cannot depress too much of the sulfide. So we will be blending a certain amount and we’ll try to optimize obviously that. And this is quite we expect an improvement in recoveries and rates in the next few months and in the year.

Very interesting, says here. Do you consider recent developments in the macro level loss priority and ability to be positive for you? For those of you that are not familiar, the regional government has approved the positive environment pact declaration in a cellulose plant around 20 kilometers east from Toto in the same rivershed, which has been in theory highly contested socially by some by the typical opposition and the the sea people and also very supported locally. So I think the fact that the regional government has approved this, requiring a good investment, an investment of around EUR 800,000,000. I think it’s a very positive sign that the regional government has to is serious imposing, of course, good conditions or strong conditions for operations.

But it’s serious to take difficult decisions because this project obviously implies a heavy higher utilization or plantation of eucalyptus trees. And there’s another already a second cellulose plant in Galicia and forestry is an important industry. And in some cases, it’s a bit contested. I think this is very positive development because we believe that our project complies. It was also a project that was considered strategic.

And our project, we believe it’s a local project, also very well supported by local population and certainly with much limited impact regionally. So I think it’s quite positive and we believe we are the second in the queue. Another one is, when you expect some Delicious Antonio to stop production, What’s estimated mine life of this and expect the tons of copper from each? Well, a bit difficult to say this, but San Antonio contains is an underground deposit of around, depends on the cutoff, around 15,000,000 tons per year sorry, 15,000,000 tonnes reserves is open towards the east. And this year, we are doing some infill.

It’s already been approved to do some infill drilling there. It will be mined underground through a ramp. The ramp will start from the existing petrocorpinal pit. This thing is not planned on the least three, four years from now and the mine rate very likely will be around 1,000,000 tonnes per year of polymetallic material. This is all polymetallic material.

In the case of something issue, you we are already mining, as you know, and it can it’s basically two zones. One, the upper part is is copper only, and the lower part, it’s copper only, stockwork. Then we have a copper only, but with some some massive sulfides embedded. And the lower part is is polymetallic, and it’s part of a pit, part on the ground. The underground is also around 20,000,000 tons of polymetallic, grades of around one and a half percent copper versus around three percent zinc and lead.

Those will require the the the the mining using, underground methods. Rock is very good, And we expect the mine rate to be in the underground around 1,500,000 tons per year, mining with a contractor, and it will not happen also until we have the, sync circuit construct. The sync circuit constructed will have to be constructed in the next three years, because right now we only have copper. So we don’t need to we don’t need to rush to construct the sink. What are we doing now?

We’re basically optimizing the grinding rates, the recoveries in order to improve what’s in our PA, which is based on historic recoveries. And in historic test work, it’s around 58, 60 percent copper recovery. So we want to see how we can improve that and also how we can improve the same recovery. Rare earths. Spain does have some rare deposits in in a place called Matamula in Fioreal, considered one of the most promising monasticity sites, making Spain potentially largest in Europe after Finland and Sweden.

It was blocked in ’ninety nine due to environmental concerns. Has Atalaya explored opportunities in this region, giving you track record with permitting and previous environmental issues at the moment. Do you think you would have an advantage? Probably would, but we have not contacted them at all, simply because we have so much in our place. And to be honest, we don’t have, we don’t have visibility.

At least I don’t have to be humble visibility on how how we to treat rare earths. I remember somebody telling me that rare earths are basically gravel unless and are should be paid as gravel unless you have a recovery system to remove the oxides, especially the high value rare earths heavy neodymium, presidium oxides, which is what are used for the magnets. So I think this project in Villareal, although it’s very interesting by the way, I don’t think it’s a problem of personally, I don’t think it’s a problem of environment. The place is not environmental sensitive at all. It’s a problem of local opposition, very vocal, but really no no big deal.

Unless we unless there is a processing plant somewhere in Europe in order to produce this this this oxides, which otherwise most of the downstream processing has to go to China. As far as far as I know, I think they control 80% of the downstream facilities. Although there is some some new things in The United States and in in Australia. The next, question also related to rare earths. Sweden is has one large rare earths in located in Kiruna.

Discovery announced in ’23 by Lake AB. Does the Talaya deal with mineral prospecting very bring us any closer to rare earths? I don’t think so. I don’t think I don’t think I we we are in an area and that’s basically a VMS deposit with prospects of copper and zinc. This this case of LIKV is an iron deposit of magnetite which has is an iron with high four four content In one of the satellites around the Kiruna Mine, they contain a lot of phosphates, and these phosphates are what contain their air earths.

Actually, the monocyte is a phosphate if I remember well. Although, as I say, I’m not a specialist. By the way, we have to be a bit careful with rare earth because the market is much I know it makes a nice headings, but the markets of rare earth is minuscule, is very small compared to what’s surrounding copper. Another question is, land Atalaya’s, land use post mining, Azura launches platform with 300 megawatts data center in Terra Ota, 2 Billion in development of campus. Nasatralia management recognized as clean energy, expandable waterline infrastructure that we could that could be used for data center revolution.

What active steps are taken to capitalize in this opportunity? The second question and actually we are looking at these things. We are looking at what can we do because we have basically solar and we have the ability of more solar and we are quite close to an area with good winds in the Southwest Of Spain and Portugal’s border where there’s good winds but required infrastructure to get cheap power into our position. I know that the the local the local, the regional supplier is developing some electric lines to connect to that area of the wind, because solar only runs during the day. What are we doing?

We yes. We are looking at something not related to totally with data centers, but how can we use in the future our tailings, old tailings pond? Is it possible to install batteries? Batteries are going battery prices are going down and we have a team investigating that to see if there is opportunity to have abundant solar because we do have lots of sun hours and we can capitalize by having good storage facility and we can get some really cheap power. It could be used for data centers, but it could be used to any other thing.

But we are studying the possibility of of batteries and we are watching the evolution. In the case of sustaining CapEx, total terms, what’s the ballpark number that you are expecting in 2025? Do you expect the change in 2026 and 2027? Well, we have given already the guidance. And as I said, it’s not very different in 2627.

We expect to have much less sustaining CapEx as soon as we get us. At the moment, we start with a new tailings with a new tailings bond. And also, we will not have the the prescription of some of the initiatives. Excuse me. Atalaya’s land use post mining management.

Is Atalaya looking at the opportunity given data center, how that centers are funded? Would Atalaya consider creating a new legal entity for the sole purpose of developing funding digital Spain Twenty Five in the data center space? Well, right now, as I said before, the only thing we are looking is how we can get a cheap power. Because if we don’t have cheap power and good infrastructure, data centers are not. It’s only one part of the use.

Once we have a cheap electricity, I’m sure we could have good opportunities for our land. In the case of Toro, what are the next key milestones for the project after consultation process is is completed. Right now, we are in the process of getting the responses from the from the what they call the the the each of the bodies of the administration. So sectorial politics, sectorial sectorial, bodies, water, air, land, forestry, culture, and so on. And we have obtained already or we have received or know that we have been that they have been processed around half of them.

And that’s the, the the activity. In the meantime, in parallel, we we as a supplier or the teams of Toro are with their consultants answering each and all of the allegations that have been received. And those form a body that goes into the final impact declaration. So basically, it includes all the complaints or in positive or allegations positive or negative. The response, summarized response from the company, plus all the summary reports of all the allegation of all the bodies of the administration.

So it’s quite a long process, which is basically takes a couple of months, at least two or three months. Any update of resolution on the relation with Trafigura? Is it good relation? Do you they contribute anyway? Do they still have offtake agreements?

Do you know if they want to remain long term shareholder? Well, we don’t know what they want, in the long term. If you look at history, in the past, they have been in and out because that’s how the nature of the business. They have been loyal shareholders since August 2014. So it’s going to be eleven years.

They came in at a very good price buying a stake of of a fund. So they’re well in the money. They continue to be traders of our concentrates, but they only take around a little bit less than 20% of our concentrates in fair terms, in market terms. And they have been quite supportive. And actually, when we have a a spot sale that’s out of the specifications of the contract, we always tender it out to all the tenders is sometimes a new one, and sometimes they have been awarded the tenders, sometimes not.

And I only say that relation has been quite good and they contribute a lot in in this sense, in the in no no conflicts at all as far as I I am always very supportive. In relation to Alex, has the relation changed? Will you be able to see it in a better deal with Alex considering the delays? Well, we’ll see it in the right moment. Depends obviously, right now, until now, we have been given loans and some of the cases are loans with certain conditions.

In some of the loans also have some warranties with equity. And if some additional funds are required, we’ll speak in the moment depends on the conditions. Certainly, we have taken a lot of development risk and I think we should be compensated in some way for taking this risk. When will it actually start to have an impact on driving down all in sustaining costs? Is there a final time cost that you come online before shutting the product down?

Look, the instructions have been very simple. We will not allow this to be a cash drain. So the Alex will have to be self sustaining from the operating cost point of view and have a future. So far the numbers in theory show that is the case. But if that’s not the case, certainly we’re not contributing, we’re not continue contributing to the operating cost.

It doesn’t mean it doesn’t mean, the thing is not economic. It doesn’t mean it cannot be economic for other third party. It doesn’t mean we cannot change the and instead of using our own constantly, we we can use a third party constantly. It’s very difficult. So the case of Alex is still very valid, but certainly, we have a very clear instruction.

After this year, we don’t want this to be a cash drain for the company. Did you get a response from Felt C. Russell as how went wrong with the entry to $2.50? The decrease in share price does not explain no entry. There are other ruble that entered.

Yeah. We we did write to them and they gave us an explanation where it was not very clear in relation that it was not only the market cap what they looked. It didn’t convince us too much, but I don’t think it was the right we don’t we didn’t believe that it was the right thing to start fighting with this because eventually, we believe we are going to be getting in in the next review in three months. And, and in any case, the all index is also replies requires a lot of liquidity. So there’s not such a huge difference between being in the in the two fifty and the in the three fifty or or all in.

But certainly, the yes. We did get into them. And, we did get into them. And the reply was not totally satisfied, but but we leave it there. We we believe we are going to be getting there.

Gold hits new highs. Does satellite have any gold prospects in portfolio? Also, Morena, we’ll use our Conceal Copper Gold process. You are % right. Conceal is a copper gold IOCG, and we are waiting for some drilling permits and also at the same time getting this project into a mining concession because it already has it already has us more resource that can be mined.

In addition to that, we have the one place called Guijaro area, which contains between 200,000 and half a million ounces of gold, likely or predictable. And that’s one of the areas where we are exploring. And we’ll be looking at either either development and permitting ourselves or farming in that, you know, into a junior that can get, in exchange of shares where we can get more added value sooner because it is not something major in our portfolio. BHP, Anglo, Avandon, Rio, Glengor, just in talks, what do you think of this potential deals? Have any mayors approach at Alaya?

No, we have not had any mayors approach in Alaya and I don’t think they will. We are a small company. We have to be modest. We are but sometimes good is beautiful. I don’t expect the shares of Glencore to be able to multiply by 100% in one year, which I think this thing can happen in shares of Atalaya.

So I think this is we are we have not been approached by big companies but of course we have been receiving interest and especially some of our larger holders have been receiving interest from the different parties in our company because we are very good we offer very good value. Somebody is asking about the potential increased capacity of the solar plant. Well, depends if we can store. If we can store electricity, we can really expand the solar plant to 200, two 50. What we are not able is to be able to sell into the grid in an economic terms.

So, we can probably be able to produce 100 megawatts and store the 50 and then use this 50 if it’s economic based on the battery. So it’s a matter of, batteries are now starting to be potentially interesting. In the case of, we have lots of land in the space, so there’s not a problem of land. It simply has to make sense. In the case of some of the issue, when do you expect to see the final permit?

Could you delay the impact of the mine material in ’25? No, it will not affect the the the the mine plan because we have already a stockpile of material that we are using. And we have already received what we call, the which is like a preliminary version of the permit that they submit so you can correct the facts. So we know this thing is imminent. It could be weeks or one month, but it’s not going to affect us at all.

What is the what was the start start end date in relation to this strategic declaration? The it was the June 24 when it was when it was declared strategic. So basically, it’s one year from that, so the June. But of course, the administration could request additional time if there is some it depends on what the reports are missing. If there’s unknown substantial report, then they will issue the the moment and back declaration anyway.

But if there’s something missing like the water department or something that’s really very important, they can request some additional time to issue that thing. They have not done that in the case of the paper mill or the cellulose mill. They were able to do it. But in our case, it’s 25,000 pages. It’s quite complex.

Of course, not everything is water, but that’s something that’s, yeah. I think we will get it before for that. Why mining waste increases from thirty two twenty four to guided thirty seven forty two? Does it include the waste outside of Colorado? Basically, no.

This is basically the capitalized strip and we want to open the pit a little bit more to be able to access, to access several fronts and make sure that we have several fronts to be able to blend. The strip rate of the pit itself doesn’t change. Actually, we are working in in we are going to be working this year into act to update the reserves, and we already have some preliminary numbers. The overall strip rate of around two to one is not going to change at all. When do you expect Masa Valverde to commence initial production?

I would say around two years from the start of the ramp, which is likely going to be mid this year. Maybe a little bit faster. Can you please provide a bit when you expect total to start production of copper concentrate and when you expect to feed in P and L account? Look, if we get the permits by mid year, we will be in position to start putting the first production in year and a half from that. So basically, it would be the end of twenty six, start of twenty seven.

Depends if it’s delayed one, two months, or whatever, it will be sometime in ’27, for sure. And the startup of of total, we don’t expect the issues, very similar to what we have here. Has the company received any revenues from EdX production? Yes, we have sold a couple of things, but not really relevant to provide any update to that. We have lots of stockpiles of same precipitate stored, but nothing relevant.

What’s the contribution in 2026, ’20 ’20 ’7 and 2028 for Alex? Some numbers could be appreciated. Well, it’s very, very difficult to say at this stage until we get the top and running. What are the prospects for dividend growth? What do you think will be in twelve months?

Well, we depends on the production. If copper prices goes as I believe, it’s going to be very good. Well, I think we will be providing 30% to 50% of the of the free cash flow as we said in the past. So the moment we get a little bit more of cash flow, we will be doubling, tripling, whatever the dividend. Really, this depends a lot in the current price.

And that’s all. Thank you. No. There’s another one. No.

There’s another one here. No. This is the old one. It’s the data center. Another one.

Moderator/Presenter, Atalaya Mining PLC: Perfect. That’s great, Alberto. Thank you very much indeed for addressing all those questions for investors today. And of course, the company can review all questions submitted today, and we’ll polish those responses on the InvestInThe company platform. But before we direct investors to provide you with their feedback, which I know is particularly important to the company, Alberto, if I may just ask you for a few closing comments.

Alberto Lavendera, CEO, Atalaya Mining PLC: Well, as usual, very many thanks for your support. I I like to see names in the questions of of long term supporters. They know our effort. They know that we are doing the best for the company and for the shareholders. And, and I really like, the patience and their their continues to support.

I think we are in a great company and we will be updating, this is going to be a very good year. So thanks very much and I’ve been for being there and look forward to to continue chatting.

Moderator/Presenter, Atalaya Mining PLC: Alright. Thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I’m sure it will be greatly valued by the company. On behalf of the management team of Atelier Mining PLC, we’d like to thank you for attending today’s presentation, and good afternoon to

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