Atalaya Mining Plc

Good morning and welcome to the Atalaya Mining PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated in the right-hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can read all the questions submitted today and publish a response to where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd like to hand it over to Alberto Lavandiera, CEO. Good morning to you, sir.

Hello, thank you. Thank you very much. Welcome, everybody. Thanks for being here and taking the time to be with us. I'm going to go quite fast through the results. I think you have seen, try not to repeat all the numbers. I think that you can read them carefully. And I think the important thing here to focus is what's happening, what's going to be the future. We had already predicted pre-released the results, the production results, so it was not very difficult to conclude the economic results from there. So with me, I have Cesar Sánchez, which can answer anything that is from his specialty if needed, although I will try to reply to most of the questions. In this slide, this is live you are seeing the opening of our company trading in the in the main market in the london stock exchange i think this has been one of the good good achievements of this of this year and um and it has been an incredible journey i mean right now we have been working for this with uh for I would say one year with lots of ups and downs and lots of difficulties and lots of changes. But finally we are here. And since then we have seen lots of interest. We have seen lots of good volumes of shares traded. And I think this is just the start of a good journey. And still not finished because right now this just opens the door to be trading in one of the index of the UK. We have some delays in this because we have to go through a new procedure that was implemented in Cyprus in the first quarter of this year, which took us halfway, which means they changed some laws and we have to go again to obtain the shareholder approval, which is going in an AGM or EGM. and we are going to be doing this at the same time that we have our AGM in the 27th of June. So after that, hoping that this is approved, we will continue with the procedures and hope to get everything ready by October, November, which is basically a six month delay since our plan, because basically this is the delay that this has, we went through since our approval on December 23. We believe this is going to be creating a new additional liquidity to our stock and this is something that's going to be quite interesting for the company like being in the main market. Of course, the reason why we are quite optimistic is first of all, the copper market is excellent and the second is that the We are one of the few companies that are pure place in the copper stock exchange. Obviously, Antofagasta is one, Ivaho is in some ways, but the other companies that are present in the London market are global markets or where they are not exposed to copper as much as we are. We are 100% exposed and And I think this is excellent for investors that want to participate in the copper market. And why we believe there is interest for our company is because we are a growth company. Yes, we are providing some dividends and we continue with that dividend policy. But the reality is that in the next three years, we want to see our company doubling or more than doubling production from our existing operation in Cerro Colorado and San Dionisio, which is basically the Rio Tinto district, plus the permitting of the total project in the north part of Spain, which is advancing quite well. With that, we will be over 100,000 tons of copper, 120,000 tons of copper equivalent And we couldn't do this in a better time. I think since the last time we spoke or I spoke here, the copper was basically one pound less than today. Today it's close to five dollars per pound, one dollar per pound more. Well, that $1 per pound is quite easy to make the calculations. If we had 100 million pounds payable, it's basically $100 million more without doing anything else. So that's to the bottom line. So you can see that we are quite leveraged to the copper price. And why this is happening? I think we have been saying that this thing was going to happen. I think it had to come because there is a steady demand. There is a steady demand, especially coming from the energy transition, coming from installation of wind and solar, which China continued to build up, but also Europe and US going hard. But at the same time, we also have drivers like electrification of vehicles, and also recently we have heard about artificial intelligence data centers that are going to be also net consumers of copper. And the problem we have is that the supply is simply not there. I mean, we have seen all this bad news of Cobra Panama and others, but especially the large mines need to either make expansions or just need higher incentive prices because the capital intensity, the cost per ton produced is getting higher and higher. And the mines are not expanding. in the places where they're easy to build. So what's happening is that really the miners, and we have seen it with the approach of BHP trying to buy Anglo-American specifically for the copper price, the approach of these big companies is better to buy to build simply because buying, you can do it in one year. And while building, it's not less than four or five years, assuming you have the cash and you have the permits and you have no local opposition and you have water. And surprisingly, if you have people, which is something very important. So I think we are just starting to see this high leg of the copper price, which I don't know where it's going to take us, but certainly higher than we are right now in the longer term. So we couldn't be in a better position. So coming back to our results of the quarter, we had already released the production results, which were around a little bit less than 11,000 tons of copper, which were basically low rates. As a result of low rates, we have better low recovers. Actually, the recovers are quite good. compared to when you consider the low grades fed to the plant. And also considering that we had some couple of shutdowns at the plant, which were planned originally. So in spite of all this, we were able to control our costs. So I think it's probably the best achievement of this month. Bad grades, but still being able to to consistent cash costs under $3 and only in sustaining costs of $3.20. Just think, and that's within our guidance. Of course, if we had a higher cover price, this would have meant basically another 10 million euros of extra EBITDA. EBITDA still was around 10%. 5.3 million euros at an average price of 390 With imagine that we are right now With much higher copper prices, of course with copper price of let's say 60 cents higher Of course, you only need to multiply by 25 or 20 million pounds and obviously will be much much better Working capital was was decreased Temporarily this month, it's not something that's worrying us too much, simply because we repaid part of our short-term loans, and we continue investing in the press trip in San Dionisio, which is moving very fast, and finalizing the plant of Elix. But still continue to have a net cash position, just counting net cash minus debt. But not all the debt is short term. So actually our working capital is much better than the net cash position. So I think overall, although it was a bad quarter from production point of view, as we had already flagged, it wasn't a bad quarter. particularly bad quarter from the financial point of view or at least not more than what we should have been expected from the low production figures as I said before it was Lots of there were lots of activities in the corporate side with with all the paperwork needed to to move to the main market and read the missile Read the missile to the Spain so that was a very very very very intense month from that side. Right now at asset levels, we continue moving fast to get to the better high rates. We continue moving in total with things moving along quite well. And we believe we are in the last leg of getting our project to be declared strategic. And we are already doing some work for our next growth projects like San Dionisio or other places like Masa Valverde. one another another disappointment let's say another couple of disappointments were slightly uh slight delay in the in the lx construction and startup i mean construction is very well advanced and it has been producing sink precipitate from copper concentrate very successfully, but they still are in the final stages of commissioning. It's quite complex. And we also have some delay from our supplier of the solar plant, which they said that fully, fully completed by the end of the year, although they will likely give us some electricity by mid-year in June. They will give us part of it will be operational. It looks like there were some delays in ordering some equipment, there were some delays in their own internal permits. This was a kind of turnkey contract and we are not very happy and we're looking how we can compensate, get some compensation for this. Having said that, we don't expect this to affect too much our financials because of the, due to the low electricity prices prevailing prevailing during the during the sunny hours which means the difference between having our our plant or having a new plant is not that is not that big so going with with albett in production i have already mentioned what I said. I mean, even with all the stops of the plant, we processed 3.7 million tons with quite long stops, so this should be better in this next quarter. The grade also was quite low and also should be slightly better in this year, in this quarter. And especially much better in the second half of the year when we hit some of the better ores at San Dionisio. The recovery, as I said, close to 85, slightly lower than previous year, but not that bad compared to when you think on the grade of the feed. Of course, this comes into lower revenues due to lower realized prices, lower operating cash flows. We gave back 17 million from investment, which is more than previous year. Sorry, 17 million, which is more than previous year. and we had a slightly negative operating cash flow. But we continue to have a working capital surplus of around 60 million euros, around 70 million dollars, which, when you compare to what's seen in the slides of our history, remember, at a certain time, we were negative 60 million euros at a certain time. So it's quite a big difference. The costs are broken down in slide 15 in little detail. When you make the calculation and see why the mining costs are slightly higher and some other costs like GNAs, it's simply because we have lower production levels. So the cost per ton has been quite constant. And even... and even lower than previous quarters due to the electricity going down, as shown in the second line where processing cost is lower than previous year, simply because electricity is lower, in spite of having lower production. But one interesting surprise and things that were good was good is that we had lower freight costs and treatment charges, which is helping, of course, the market is helping. And also we had a much higher silver price by products because we are producing from an area that's higher silver or those lower copper so we in some way it compensated for other things so then we had we had our operating cost all-in costs very similar to what we had last year in spite of having much much lower production Only when you compare with our peers, we continue to keep under control our costs within compared with other companies that based on public information. So I would say we are keeping competitive with other people and actually much better as you can see in the slide 16, which shows that in the last column in each of the left column in each of the groups is the last quarter. You can see lots of companies having higher operating costs in this first quarter than previous quarter. So we are more or less satisfied. But anyway, we cannot be very satisfied. Our goal is to get to the higher grade of Sandinicio as soon as possible. Slide 18, you see that we have already started moving there. And actually, this slide is one month old, but this excavation here is moving very fast. There we have a grade which is almost double what we have in the main pit. And it's essential that we can blend some of this material, although limited, so that we can get better grades in the second half of the year. Seen from the top, you can see a recent picture how excavation is going. I mean, it's a kind of a small pit close to the existing Atalaya, existing flooded Atalaya pit. And also in this picture, you can see in some way the water level going down in Atalaya pit as we are pumping out already in preparation for the future expansion of the pit. Also, Big advances in helix. For those of you who are not familiar with helix, it's something to be able to leach concentrates and get better recoveries from copper sink concentrates. And that difference of recovery, it makes a big difference. Still, it's a very novel thing and still in commissioning. This is all pictures that we had in the early days. where we produce first cathodes. Now this quarter we have been producing zinc precipitate extracted from copper concentrate. So in other words, we have a concentrate having 18% of copper and 8% of zinc. after cleaning it you you end up having a concentrate of around 22 percent of copper and one percent of zinc this thing it goes into a precipitate which shown in the picture left which is basically only contains zinc and this is really solved and you can produce cathodes or ingots of zinc or sell it directly as precipitate and the copper does not lose anything because we maintain the recovery and we don't touch the copper barely So we know this production has been obtained during the commissioning, but they still have things to finalize in the construction, because this was while they were commissioned. So quite a complex plant. And I'm sorry that we cannot show pictures because due to the pictures from what's looking inside, because it's essential from the secrecy point of view. But for those of you that have the possibility of coming to a visit that we'll organize later in June, or you will probably be able to see it personally and you will appreciate the size and the complexity of the material. Another thing that's, as I say, it's a little bit delayed, but it's advancing as you can see. I mean, most of it is finished. There's still some holes left, but the main delays are coming from the moving, crossing the road with electric line and some pieces of the substation that had not been ordered and had delays. But other than that, the plant is quite ready and they will be able to likely give us some electricity by June, not full, but maybe half of what is already based on what they have already installed. And we don't have too much to show as pictures in relation to Togro, but I have to say that the new government has been formed. We continue receiving lots of support in the public media, also by the local authorities, and we believe we are going to be named or getting the status of a strategic project uh either the end of this month of the beginning of june uh this is so so this is what we have been told so we believe this is going to be permitted after that in the fast track route which is never fast enough for companies but it's good so that's in a nutshell what we are doing in addition to that we continue exploring the belt and the Osa Morena belt. We have some rigs working in a gold prospect in the north part of the Rio Tinto belt. We have, well, north is called Osa Morena. We are also in filling and doing some geotechnical work at Masa Valverde in order to be able to start the ramp there in order to access the copper ore sooner rather than later. and so we continue working very hard as you know we already have all the permits for basavalverde so as soon as we start to ramp and drive fast as soon as possible to the to the to the deposit we will be able to ship that ore directly to our plant at Rio Tinto so we are moving in that direction because we believe that the copper prices are going to be much better in the next years so with that um I think we will go into the questions, which are always very interesting. Perfect.

Alberto, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab, which is situated on the top right-hand corner of your screen. But just while the company take a few moments for you, those questions that have been submitted today, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. We have received a number of questions throughout today's presentation, and if I could just hand over to you to read out the questions and give responses where it's appropriate to do so, I'll pick up from you at the end.