Atalaya Mining Plc

Good morning and welcome to the Atelier Mining investor presentation. Throughout this recorded presentation, your investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. 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 Lavandera. Good morning to you.

Good morning. Thank you very much. Good morning to everybody. Thanks for being here once again this quarter. I will have with me Cesar Sanchez, the CFO of the company, that will be able to reply any detailed questions in relation to financials. With that, I will go directly to the presentation that has been submitted, and I hope you can see the screen. Without going through all the lines that are in the presentation, we are very pleased to report a good quarter, another good quarter, which leaves us on track to achieve what we said about guidance for the year. The production was solid. We had already submitted the the production and our costs have been quite good so far this year and combined with a copper price, our financial performance has been quite good. Even with our capital investments, we have generated strong pre-cash flow and our net cost position continues to grow. Also, we have an excellent working capital position. I will cover a little bit more on that. about the operating and financial details in the rest of the presentation. Some corporate activities, initiatives that we are highlighting there, I think are relevant to mention. We know that we had some old shareholders, some shareholders who were coming from the early mid days that had some challenges with their physical certificates. So we have now implemented a system where this in order to convert those certificates into CDIs. Also, important to mention is that we had Fernando Arauz, General Manager of Rio Tinto, being appointed this quarter. He follows Enrique Delgado, who has been with us six years, which will continue as a consultant and working with the company. Fernando Arauz is a mine engineer that has been with us as a deputy general manager, and he was also instrumental in achieving the permits back in 2013 in the old days. This is part of the preparation for long-term in our company. We have had also some internal changes in order to prepare ourselves to be a multi-mining company. We have made a lot of progress in our different assets, and I will go with that in the presentation. In terms of ESG sustainability, our board renewal continues. We have had some additions that I will go through later, but basically substituting some of our former directors that have been with us over over 10 years so we we welcome any fall uh with a huge background in anglo-american copper and corey gonzalez which is a spanish spanish executive also in several boards in spain and and we we saw jose marma retiring after over 10 years in the company where it should it couldn't be independent non-executive kind of rules or indications of the . With that, I would like to go directly into the presentation in relation to production results. Copper production, we have released that. There was 12,100 tons of copper consistent with our guidance. We had already released that. Remember that we had said that the second half was going to be lower rates than first half that's consistent with that but the mill itself performed very well in the upper graph you will see that the vertical bar showing how production it's intermittently going up and down basically the quarters that we have a maintenance in the large mill the production of the mill goes down a little bit, and it wasn't the case in Q3, so we've gone three quarters with good production, but we will have a lower production or treatment rate during Q4 as a result of this planned maintenance that happened in the first days of October. The copper grades were solid at 0.38% copper, And recovers were slightly lower, around 74.5% copper, due to the complex metallurgy of this transition of ores that we have been experiencing when we are blending the upper areas of Sandinitio, which are slightly oxidized. As we move forward, our metallurgy is going to improve, both in Sandinitio, because we will be getting access to the fresh ore. So that thing should be changing in the near future. With all that, we had a good copper price and low off-site costs, and due to the better sales, we had a very good performance in the third quarter. The cost performance also was quite good, even if we had included there a $4.5 million provision for a potential tax reassessment disputes with the municipalities in relation to the tailings bond. So we prefer to put this as a provision. Otherwise, our cost performance itself, absolute performance would have been very good. Regardless of this, we had a good EBITDA for a quarter of around 31 million euros, and the operating cash flow was for over 42 million euros. And after investing 18 million euros, we would still have a strong free cash flow of around 24 million euros. The main investments that we had this quarter really were all related to mining. So basically we were moving waste at San Domingo in order to get to the better grades. We have capitalized stripping that we account for later in the oil and sustaining costs of Terra Colorado. And also we have some investments in maintenance investments in our tailings fund. In the future, the states are going also to be going down these tailings investments because we plan to construct a new tailings fund, which will require less capital investments during the years. So all in this left us with a very good balance sheet where we ended the quarter with 93 million euros of working capital position. So that's over 50 million euros, almost like 100 million dollars of surplus from the beginning of the year, which is excellent. Looking at the results to date, it's a little bit of the same. The EBITDA was around 140 million euros, and the free cash flow was around half of that, 60 million euros. This figure are placing us extremely well to basically get very good results at the end of the year. better than last year, also year-to-date, which were only about $18 million. Looking at the details of all these costs, I mean, how we got all these figures that I just mentioned are shown in the next slide. As usual, we provide a good breakdown of mining, processing, and other costs, what we call the site operating costs. That's the production onsite. Costs are lower, substantially lower than previous year but on site costs were, they are very similar in a quarter by quarter than previous years because we have inflation which is very similar. But year to date they are lower than previous year due to basically the higher production. Overall the costs, The cost itself for mining, for processing one ton or for striking one ton of rock are very similar. We are fighting very well with the inflation. But of course, depending if you produce more or less, your cash per pound is higher or lower. In the off-site costs is where you see a big improvement. due to several factors the main factors you can see is a further increase in bipolar credits this is a result of maintaining our silver production but having better prices for silver so this means negative payments of 0.43 dollars per pound copper which is higher than the average of the year but at the same time and following the tendency that's happening in the world the treatment charges of smelters continue to be low and as well as freight and other off-site costs so our these are only dependent on on the material produced so they're not dependent on on the grade and we have seen the of what we had in 24. And this tendency is very likely going to continue and probably improve during this last quarter because we will have some spot sales that we very likely will sell at negative treatment charges. The rest, what's not the spot sales, which is most of our production, is sold under long-term contracts based on benchmarks, which are lower than previous year, but not as low as the spot sales. All in with this, our cash costs were around $255 per pound, which is which is also substantially lower than previous year, and they accumulated an accident at $2.33 per pound for the year to date. Mainly, as I said before, the big improvement from previous year is basically, as I said, better production and higher silver credits and lower off-site cost of treatment charges. And as I said before, especially these last two elements are likely going to improve or increase during the fourth quarter. We have also seen in the negative side and the strengthening of the euro. So we have been able to keep this good cost in spite of the fact that we had a the euro going from around 105 to 115, 116 dollars per euro, all of the year, and obviously most of our costs on-site are in euros. Excuse me. All insustaining costs are also lower than previous year, around a bit less than three dollars per pound, in Q3 and year-to-date around $2.84 per pound, which is around 50 cents lower than previous year. When we compare this with our peers, we always like to show how the industry is trading to see if it's us or else. I mean, we see that we are keeping ourselves under the 350 line, which we believe is going to be the the future tendency of the world. It's true that other peers are benefiting from the gold credits, which are excellent with the gold price, especially those buys in Chile and Peru, which have lots of gold-buy products, but also have to be fair that we have benefit from the silver credits. So, overall, we are at least as the industry, or better, and we will leave it. It's going to be like that in the future. Going forward, what are we looking at as a guidance? Well, it's not much to change in the last, let's say, month and a half. So we have, I think we'll be very well positioned to be in production guidance, which we kept in 49-52. Remember, we had upped a little bit. Very likely mid-range and slightly higher, which means we will have a modest quarter Q4 due to the lower production, due to the stop of the maintenance of the plant, but still in a good range. Looking at the cash costs, we will be in the low end or lower than the 260, so probably 260 or lower in that sense. And the only sustaining cost will be also in the low end or even lower than that. So we expect to have a good result. For accounting reasons, the no sustaining capital guidance is now in the high end. Basically, we are passing some cost to per stripping. So we will be in the high end in the no sustaining capital, which is basically per stripping at San Dionisio. uh inspiration overall we keep it but probably will not also not reach the high end uh simply because we have started already the exploration campaign in sweden in the winter campaign but but there's not much time to finalize so we will not go overboard so with with that we respect to have a quite quite decent quite decent quarter um Going a little bit, now moving into our projects in general, we are concentrating as ammunition, which is the picture you are seeing. You can see in the left part of the picture, taking that hill down as fast as possible, slowly disappearing. We still have to move an electric line somewhere there, and that will be our focus. We want to expand a little bit the Cerro Colorado pit to have better access in the future for high-grade material. But overall, this thing is tracking well. The important thing here is that during 26, we already start hitting the fresh ore at Sandinismo, which will allow us better recoveries and better production in the years to come. Another project where we are making some advances, although there have not been so many advances during this quarter is the Masado Verde, where we continue to drill with a couple of rigs, and basically we are waiting for the access to the surface rights where the portal is going to be located. Everything is ready, but we need to have access to a forced expropriation that has to be finalized by the administration, which the paperwork is ongoing. And subject to board approval, we will start to ramp very likely now in the first part of the next year. In the meantime, as I said before, we continue to have two weeks drilling, drilling in that green area in the side of the main deposit of Masalverde. and we also do some exploration in some other anomalies, but basically we will be concentrating in these high-grade zones, and we announced, remember that we announced the results of these high-grade zones sometime in July, if I remember well. I think an important step here is what you see in this picture. In November, we had a We had a panel, a forum of critical minerals in Andalusia. And the three persons that are in the picture are Maria Jesus Lorenzana, which is the consejera, or consejera, which is basically the minister of industry of Galicia, where the TORO project is located. Mercedes Moran is the same equivalent position of Extremadura, just north of the pirate belt, where we have this satellite deposit of Rosa Morena and Arconchel. And the person on the right, Cristóbal Sánchez, is the head, general director of mines and industry of Andalucía, where we have our operations. This was something very interesting, where everybody expressed their interest on on andalusia and spain and specifically these regions as a friendly uh friendly countries there are some projects not only base metals but lithium and other other critical minerals going and being approved and and this was a huge endorsement as part of this opportunity this lady that was at the left they visited our operation in She was extremely impressed to see the automatization, the safety, and really assured that the project of TORO was going ahead without any question. Really, it's a matter of time. It's not a matter of if it will happen or not. It's true that we heard that they had some delays. in the water department due to the change of people there, of civil servants. We only have two reports missing. One is the water department, the other one is Natural Heritage, which we have already seen a draft, so that's ongoing. And hopefully we will be receiving the final papers for the environmental declaration soon. The way things with these delays are accumulating, I really think that our hope to have this in this year is not so easy. And I don't know if we'll have to push it to the first quarter of next year. But we got the full assurance that this project is going to go ahead. And as such, we continue to work already with the engineering team. work that has been contracted already, all the detailed engineering to engineering companies in South Africa, to get ready for the construction of TOTO. And the reason why we want TOTO is, I have mentioned this slide before, it's a project that's going to have a very good economics, it's a value driver for Atalaya, I think already the people are seeing are really imminent. It's a project with a very low capital intensity of less than $10,000 per ton of copper, which is extremely low compared to other projects, and the main reason for this is the very good infrastructure. Capable of producing over 30,000 tons of copper over 20 years of life at least, with better grades and better recoveries, better concentrated grades and better payability than Rio Tinto, it's easy to to judge that with all these better terms, the cash cost and all the existing costs are going to be lower than what we have at Rio Tinto. And without saying a specific number, you can judge that easily you will get over 50 cents per pound lower, dollars per pound lower than what we have in Rio Tinto, which means that this 30,000 tons of copper produced are going to make a significant flow of the company. 25 has been a very busy year, and we will continue with it. Right now we are working in Massalabar the drilling, we continue the permitting in total, but at the same time we are drilling already there, some open pits that have been left open, and that will be influenced in the early mining stages. We continue working with Alex to the bottleneck and to finalize to make sure that the plant becomes a contributor of cash flow. We are already drilling with a couple of rigs at Antonio Deposit, which is located east of Cerro Coronado. And we have exploration activities mainly focused in, as I said before, in Masa Valverde. But we also initiated the exploration drilling with some anomalies discovered during summer in the two belts that we are exploring in Sweden. And as you know, all this has to be carried out in winter due to the normal conditions of the ground there. And we have already started and we will be giving the results later in the year. I will conclude a couple of things before I finalize. People ask us, how is the market? Well, the market, as you can see, is very active. We are showing in slide 21 all the deals that have happened a lot in the recent years. The pace is accelerating during 2024 and 2025. There's a clear lack of copper projects, and we see the market very competitive. We are also looking at some things ourselves, and we will continue being very active. The main reason of this is the market. The market is excellent. Since the last time we spoke, one extra thing happened, which is the big accident in Grasberg. Very unfortunate, because seven persons died. but really has created a deficit in the copper market that is likely going to stay one year, year and a half at least. And in a market that's already very tight. And with other companies like also a couple of rock accidents in Camoa and El Teniente. Again, three mines of the five largest mines of the world affected by these things. plus the largest mine in the world, Escondida, being affected by basically a pushback from 1927 onwards. They have to reduce the production or have a huge investment in order to stay still, which means we are getting into years that were predicted, even with a slowdown in some of the In some of the consumers, we are getting to a huge problem of production. From the consumption side, there's maybe a word that there have been lots of talks about the influence of the AI in the world, which is accelerating. As you know, data centers and infrastructure are being built all over the world. I've seen all kinds of numbers. The last from international agency, electrical agency, its energy agency was almost one million tons of extra demand a year. It's like having a couple of these two big mines just every year needed for the supply of this extra electricity. So we are getting into very interesting times and we are very well positioned. How are we going to try to contribute to that? Well, with their growth, I think in three years, two to three years, we are going to be basically getting the stock work of San Dionisio. We're going to have the copper zone of Basal Verde, and especially we're going to have Touro. In addition to that, that's the fourth column. In addition to that, we have the polymetallic area, which is basically an area that has copper, but also has zinc, where we have to build a zinc circuit in order to recover our pipeline will show production growth to basically be able to double our capacity in the next two to three years. So with that, I would like to conclude. At the end, our company, it's basically, by the way, we have reached almost one billion pounds market cap, one billion euros, which is a also quite an important feature. We have increased liquidity due to being in the index. We have a company with a very good balance sheet with nothing hidden in the balance sheet in the form of streams or royalties. We are paying dividends. We will continue paying dividends. We will continue paying dividends because we believe that we can grow and pay dividends at the same time. Because there are people that require at least this minimum dividends. And we have paid continuously even in the downturns of 2022 up to 84 million euros. When we had only raised around 100 million dollars, 100 million euros back in 2017. In a very good location with modern jurisdiction, and I would say another important thing. Besides being a pure corporate play, which is important, I think the very important point here is that we have a very good team. We have good operators that are very consistent. And this is one of the issues, big issues, that's happening in the world. The lack of people, the mines are located in remote places. Our mines are located in excellent jurisdiction, in places where you can get good people to stay there and have a very stable workforce with minimal rotation, which at the end is always good for the shareholders. So with that, I think I will pass it to the operator and look at the Q&A.

Perfect. That's great, Alberto. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen. And while the company take a few moments to view those questions submitted today, I would like to remind you that recording of this presentation along with a copy of the slides in the published Q&A can be accessed via your invested dashboard. Alberto, if I may now hand over to you to go through the Q&A, and I'll pick up from you at the end.

Thank you. I will try to respond as usual to all of them, even briefly. Is there an advantage for you to be in a European source of copper? Actually, I don't think so. We have no specific advantage or get any special benefit. from this. When do you expect to get full permits of TOR? Well, I wish I knew, but it's out of our control. We expect to have an environmental permit either end of this year, the modern pack recreation, or very beginning of the next year. With that, for us, it's almost enough to get ahead because the final blessing is basically only the financial backing and technical capability, which we already have ready, all the financing. So basically, we will be able to press the button almost immediately as soon as we get the environmental permit, which I expect to be end of this year or early part of next year. There's a question about 4.4 million euros provision for potential lack tax. Where does this come from? Is this the authorities trying to change or take advantage? Can you... Ken, are we challenging this? You want to give the details, sir?

Yes, very happy to. Yeah, so this is in relation to a local tax in the taking stamp. maintain in the future so yes of course we will challenge that number and for the time being because it was received with a very short notice to close the books it was fully booked as a provision so the maximum amount is 4.4 million but obviously we expect to

Thank you, Professor. Another question is land ownership and the old Rio Tinto was basically sold in small parcels to land or business associates. Anyway, does Atavaya own all this land? Yes, we own all this land, 100% of it, and we don't have any land or anything. I relate this and we have not heard from our friend Carlos for years. Unfortunately, he's not in jail or as far as I know, but anyway, we don't care too much. We have continue working with that. No problem at all from that point of view. When do you anticipate the third-party review of the ELEX plant will be available to yourself in the market, please? Well, we have already received a draft report from the consultants showing that the plant, remember this is a small plant. breaking even or very close to breaking even. So the process works. It's working, extracting zinc from mixed copper zinc concentrates. So this is only the first route that's been received a few days ago. We still have to go around to see what we do, if we de-bottleneck a bit more or we find the right feed to get a better use for this plant. I would say that 2026 the plant would operate normally even with whatever bottlenecks it has. They have been doing some work to extract the silver and gold contained in the concentrates to get better pay abilities and this is being constructed right now. So I would say this next year is going to, I hope it can operate kind of normally. We are still discussing ourselves how we can finance or we find third parties to finance those expenses because one of the clear things we have said to the line technologies is that we have to make sure that this thing doesn't consume cash. It's something that's good to have, but we have already invested in form of loans, a substantial amount of money from the shareholders and taking the risk. But anyway, it's a, We'll look at it very prudently. But now the reports are there and the reports are very positive and really encouraging. At the last reached an intraday one billion market cap. Congratulations with expansion of current footprint total. What's the next target? Well, as I said before, we are always looking at opportunities. We have been looking at opportunities and we continue to do so in South America. We continue to do so in Spain, in Portugal, in the Paris Belt. And yes, right now we have some things in our books and we will continue looking at that. And if they are finalized, we will announce it. But those are the places. something to be to get ready after total so we need to be keep busy after total because we think we can grow we have good basis for growth when such small changes in head rate have such significant effect on copper production what checks and balances do you have on mud accounting well this is uh actually a small change is not such a small change because we you have low copper grade and you have a 0.4 and you get only 0.38 basically it's a five percent so it's not not that small we are very efficient everything is automatic but you need to adjust the blends to make sure you don't put much so far in you don't put too much hard material in order to optimize the blend i mean right now it's it's it's planned monthly, weekly, daily, the plans, and it's really automatic, and the people are very professional. And by the way, they are doing an excellent job. If you had time to look at what was filed in CEDAR in 2013, you would see that the plans for this mine was to have a coverage of 75% to 79%. of copper. So, historically, we have always been much better than was the plan back in 2013. Fairfax exit was dis-expected. Any dialogue with them? Reading their investment strategy based on value and their long-term holders, I guess they missed the recent 8.30 broker target price. You're right. For us, it was a surprise. I suppose they made a good return in a short period of time. And that was the reason they had come in at three. They sold at six. They doubled the money in two years. So I suppose that was the reason. So, yes, maybe they missed the long-term value, but it's fine. I used to say that for each happy seller, there's a happy buyer. So that has helped us a lot to get these blocks into the market, which were absorbed very fast. You mentioned silver. Any plans for gold? Not in this project. We have very low levels of gold, but there is some recovery of gold in the concentrates with use in the system, which will be investigated. We do have a gold project. It's called Guijarro. in the Osa Morena belt with around 300,000 ounces of gold, open pitable, which we are drilling and we expect to, we will try to get to at least half a million ounces of gold and then we will decide what we do with this. This is a basic gold only deposit located north of the product belt. Looking forward to 26, what's the estimated cover production for 26 based on additional satellite projects for 26? I think for 26 it will be a little bit better than 25, but we will not have the satellite deposit. Yes, we'll only have some blending from , which we don't have the guidance yet. Use of land post-mining for additional land data centers. Do you have the land, water, and power? Clouds in terms of the active in region. Any plans to explore that? We have been exploring this. We have an issue. River Eurasia is a problem. It's a big consumer of electricity and water. And in summer, this is not a good place to have the systems. They are looking for something. Summer is a problem here because it's very hot. We do have the land, and there are some things that we are planning to do with the land. But data centers, it's not really, so far from what they have told us, it's probably not the best place. Talk about shortage of power giving growing AI demand. Would this make sense to continue to expand solar capacity before it becomes more expensive? Well, one of the issues with expanding the solar demand is you have to do it for self-demand. So there's a lot of electricity already in solar in Spain. There's actually excess of electricity. So whatever you build is what you can use. And the problem we have is that we have a use of 50 megawatts, and that's what we have installed. So if we installed more, we could not use it. because we don't have capacity to use it. And there is, at the same time, to export it to the network, it will be a little bit difficult because there's also lots of other producers that will be willing to get into that. Having said that, we have been exploring the possibility of installing some batteries in order to, with excess solar capacity, be able to charge that batteries to try to offset the peaks of high cost of energy in the sunrise and the sunset. But again, this is something a little bit marginal, not a huge thing. The spot price has been around 5 over the last quarter. At the last sale, the sale price was $4.40. Why was this the case and why do you expect to be closer to spotting before? Well, actually, no. Actually, the price of copper in the market was around $450, $460 in the LME. And that's why we benchmark. Normally, what you see is futures in the Chicago and basically in comics in the United States. And there is a differential of around $500 per ton or arbitrage of copper in the U.S., which shows higher copper prices. That's what's shown in most of the screens. versus the LME. But what marks the transactions is LME, and we have been always very close to that.

And just to add a little bit more color on that, so item number four of our MD&A deals with the copper price, and you can see a full disclosure of the average LME prices and the realized prices.

Thank you, Cesar. When we expect our production from total, I think mid-2027 is still our hopes, maybe late-2027, but in 2027 for sure. You mentioned Portugal. Do we still have the regular tungsten project? I don't think so. I don't think we have anything in tungsten. Have you received any approaches informally from third parties for equality issues? No, we have not received anything. We know that we are always in the radars because everybody says that, but we have not received. And I think we will not act in any way. We have there a big shareholder that controls 22%, which is not interested in selling because they see that the value still has to go up with Tauro and with other things. Maybe just talks, but we have not received any indications of.

That's great, Alberto. Cesar, if I may just jump back in there and thank you for addressing all those questions from investors today. And, of course, the company can review all questions submitted today. I will publish those responses on the rest of the company platform. But, Alberto, before I redirect investors to provide you with their feedback, which I know is particularly important to the company, could I please just ask you for a few closing comments?

Well, yeah, basically, thank you very much for being here, taking your time, also for being as lawyers and shareholders. I think we have gone through a long period. I think the other day somebody was 700% in the last 10 years, which shows that persistence pays. I think we work hard for everybody, for the shareholders. And I think we have not seen the end yet. So let's continue. Hold with us. Who was going to say that copper was going to be at $5 and the share price was going to be at 7 pounds? So we are here. Next stop is 8. And let's see. There's lots of numbers still. Thank you very much. Thanks very much for your time.

Fantastic, Alberto Cesar. 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 will be greatly valued by the company. On behalf of the management team of Alaya Mining, we would like to thank you for attending today's presentation and good morning.