Atalaya Mining plc Annual Report 2018

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FY2018 Annual Report · Atalaya Mining plc

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Atalaya Mining Plc

for the year ended 31 december 2018

Atalaya Mining Plc

for the year ended 31 december 2018

CONTENT

12 company overview
12 group highlights
15 atalaya at a glance

16 letter from the chairman

18 management report
20 introduction
21

forward looking statements

I. Review of developments,
current position and
performance of the Group’s
business and principal risks and
uncertainties

Governance

Group and the Company

34 II. Future developments of the
36 III. Statement of Corporate
37 IV. Directors’ responsibilities for the
37 V. Auditors
37 VI. Events after the reporting

financial statements

period

report

responsibility

38 corporate governance
56 corporate social
62 financial statements
64 independent auditors’ report
69

consolidated and company
statements of comprehensive
income

in equity

cash flows

consolidated and company
statements of financial
position

consolidated statements of
changes in equity

70
71
72 company statements of changes
73 consolidated statements of
74 company statements of cash
76 notes to the consolidated and
130 shareholder information
131
135 shareholder inquiries

company financial statements

glossary of terms

flows

COMPANY OVERVIEW

GROUP
HIGHLIGHTS

company overviewAtalaya Mining Plc.annual report 201813

COMPANY OVERVIEW

OPERATIONAL
HIGHLIGHTS

180,661

165,965

G R O U P P R O D U C T I O N

)
.
t
(

E
T
A
R
T
N
E
C
N
O
C

R
E
P
P
O
C

2019 GUIDANCE

45,000–46,500

42,114

37,164

)
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(

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T
A
R
T
N
E
C
N
O
C
N
I

D
E
N
I
A
T
N
O
C

R
E
P
P
O
C

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t
(

E
T
A
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I

D
E
N
I
A
T
N
O
C

R
E
P
P
O
C

E
L
B
A
Y
A
P

35,504

40,306

FY2017

FY2018

FY2017

FY2018

FY2017

FY2018

2 0 1 8 S E C O N D F U L L

Y E A R O F P R O D U C T I O N

W I T H C O P P E R

P R O D U C T I O N A B O V E

G U I D A N C E

2 0 1 9 G U I D A N C E

T A R G E T I N G A N

I M P R O V E M E N T O N

2 0 1 8 P R O D U C T I O N

E X P A N S I O N T O

P E R M I T T I N G F O R

1 5 M T P A A T P R O Y E C T O

P R O Y E C T O T O U R O I N

R I O T I N T O O V E R 8 0 %

A N A D V A N C E S T A G E

C O M P L E T I O N

company overviewAtalaya Mining Plc.annual report 2018

FINANCIAL
HIGHLIGHTS

G R O U P F I N A N C I A L S

8
1
0
2
Y
F

189,476

160,537

REVENUES (€K)

1.94

1.91

F
Y
2
0
1
7

8
1
0
2
Y
F

53,542

41,347

EBITDA (€K)

2.26

2.30

CASH COST ($/LB PAYABLE)

ALL-IN SUSTAINING COST ($/LB PAYABLE)

8,435

22,137

F
Y
2
0
1
7

8
1
0
2
Y
F

33,070

42,856

WORKING CAPITAL (€K)

CASH AT BANK (€K)

F
Y
2
0
1
7

H I G H E R E B I T D A C O M P A R E D W I T H

C A S H C O S T I M P R O V E M E N T

€ 3 3 . 1 M I L L I O N C A S H A T B A N K

P R E V I O U S Y E A R A M O U N T I N G

F R O M 2 0 1 8 E X P E C T A T I O N S

A S A T 3 1 D E C E M B E R 2 0 1 8

T O € 5 3 . 5 M I L L I O N

 Additional information about Atalaya Mining Plc. is available at www.atalayamining.com

company overviewAtalaya Mining Plc.annual report 201815

ATALAYA AT
A GLANCE

talaya is an AIM and TSX listed mining
and development group which produces
copper concentrates including silver
by-product at its wholly owned Proyecto

Riotinto site in southwest Spain. In addition,
the Group has a phased, earn-in agreement to
acquire up to 80% of Proyecto Touro, a brown-
field copper project in northwest Spain which is
currently at the permitting stage.

> Strong pipeline of low risk growth projects

> Proven management team

> Supportive strategic shareholders

P R O Y E C T O R I O T I N T O

Atalaya owns 100% of the Proyecto Riotinto
copper mine in Huelva.

Atalaya increased its open pit mineral reserves
by 29% as per the updated NI 43-101 technical
report filed in the third quarter of 2018. A brown-
field expansion is in progress which is expected
to increase throughput from the current 9.5Mtpa
to 15Mtpa.

P R O Y E C T O T O U R O

In 2017, Atalaya signed a phased, earn-in agree-
ment for up to 80% ownership of Proyecto Touro,
a brownfield copper project in northwest Spain.
The permitting process is well advanced and is
now pending for evaluation from a regulatory
perspective.

company overviewAtalaya Mining Plc.annual report 2018LET TER
FROM THE
CHAIRMAN

Dear Shareholder

I am delighted to report 2018 has been
another year of new records achieved
at your Company’s operating project at
Riotinto.

Throughput and metallurgical reco-
veries increased year-on-year as a
result of continuous improvements.
The ore processing throughput rate
was steadily increased during 2018 to
achieve a cumulative plant throughput
of 9.8Mtpa, with copper production of

42,100 tonnes, an increase of around
13% from the 37,200 tonnes produced
in 2017. The average process plant feed
grade of 0.49% copper was consis-
tent with reserve estimates and the
process recovery rate improved in 2018
to 88.30% from 85.45% in 2017. Cash
operating costs for 2018 of $1.94/lb
were well below the original forecast
guideline of $2.15/lb to $2.30/lb.

With only minimal interruption to
process throughput, the installation of
new equipment to expand the design
throughput from the present 9.5Mtpa
to 15Mtpa throughput has been
progressing throughout the year, with
an 80% overall project completion at
the end of December 2018. Engineering
and procurement is now complete and
all equipment on site with the project
on schedule for start of commissioning
at the end of the second quarter 2019.

Mining operations progressed
according to plan during 2018 and the
additional mining equipment is now
available on site in anticipation of the
increased mining output scheduled for
the second half of 2019.

Exploration and definition drilling
continued throughout the year. The
Company filed an updated NI 43-101
technical report for an updated
resources and reserves estimate for
Proyecto Riotinto in July 2018 with a
29% increase in proven and probable
reserves, a 21% increase in contained
Copper and a reduction in the strip
ratio from 1.95:1 to 1.43:1. Allowing for
the expanded 15Mtpa throughput, this
provides a resultant life of mine reserve
of 13.8 years.

letter from the chairmanAtalaya Mining Plc.annual report 201817

Project evaluation work has continued
on the Proyecto Touro in Galicia with
the Environmental Impact Assessment
completed in Q4 2018.

In November 2018, judgement on the
Astor case was received from the Court
of Appeal that confirmed the ruling
from the High Court made in March
2017, in that the Deferred Considera-
tion payable to Astor under the Master
Agreement did not start to become
payable when Proyecto Riotinto permit
approval was granted. The Company
was not in breach of any of its obliga-
tions, but the Master Agreement and
its provisions remain in place. This
provides finality to the issue and the
liability, which was fully recognised in
2016, will be settled in due course.

Proyecto Riotinto has also experienced
some challenges in the past year. In
2018, a court ruling was handed down
identifying a procedural error by the
Junta de Andalucía in granting the
environmental authorisation (Autori-
zación Ambiental Unificada or “AAU”)
to Atalaya in 2014. The Company
is currently in discussions with the
Junta de Andalucía to resolve the
issue identified by the Court and the
mine continues to operate as usual
as the court ruling does not prevent
its normal functioning. The Junta de
Andalucía has been publicly supportive
of the continuation of the operation
and of the mining sector and we are
confident that the matter raised by the
court ruling will be addressed soon
with no impact on our operation.

The Group remains focused on growth
opportunities, both internally by

expanding Proyecto Riotinto and
progressing Proyecto Touro and
externally by the technical review of
non-Atalaya assets.

Finally, I would like to offer my sincere
thanks for the continued commit-
ment and efforts of our management
and staff, for the continued support
and contributions of all the board
members and, last but not least, for
the continued support of our valued
shareholders.

Once again, we can look to the year
ahead with continued confidence and
optimism.

—

Roger Davey
Chairman of Atalaya Mining Plc
3 April 2019

letter from the chairmanAtalaya Mining Plc.annual report 201818

MANAGEMENT
REPORT

management reportAtalaya Mining Plc.annual report 201819

management reportAtalaya Mining Plc.annual report 201820

T H E B O A R D O F D I R E C T O R S O F A T A L A Y A M I N I N G P L C ( “ A T A L A Y A M I N I N G ” A N D /

O R T H E “ C O M P A N Y ” ) P R E S E N T S I T S M A N A G E M E N T R E P O R T A N D T H E A U D I T E D

C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S O F A T A L A Y A A N D I T S S U B S I D I A R I E S

( “ A T A L A Y A” A N D / O R “ T H E G R O U P ” ) A N D T H E I N D I V I D U A L F I N A N C I A L

S T A T E M E N T S O F T H E C O M P A N Y F O R T H E Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 8 .

INTRO-
DUCTION

This report provides an over-
view and analysis of the finan-
cial results of operations of the
Group, to enable the reader
to assess material changes in
the financial position between
31 December 2017 and 31
December 2018 and results of
operations for the years ended
31 December 2018 and 31
December 2017.

This report has been prepared
as of 3 April 2019. The
analysis, hereby included,
is intended to supplement
and complement the audited
consolidated financial
statements and notes thereto
(“Financial Statements”) as

at and for the year ended 31
December 2018. The reader
should review the Financial
Statements in conjunction
with the review of this report
and with the annual audited,
consolidated financial state-
ments for the year ended
31 December 2017. These
documents can be found on
the Atalaya website at www.
atalayamining.com.

Atalaya prepares its Financial
Statements in accordance
with International Financial
Reporting Standards (“IFRS”).
The currency referred to in this
document is the Euro (“EUR”),
unless otherwise specified.

management reportAtalaya Mining Plc.annual report 201821

FORWARD
LOOKING
STATEMENTS
T

his report may include certain “forward-looking state-
ments” and “forward-looking information” applicable
under securities laws. Except for statements of historical
fact, certain information contained herein constitutes

forward-looking statements. Forward-looking statements are
frequently characterised by words such as “plan”, “expect”,
“project”, “intend”, “believe”, “anticipate”, “estimate”, and other
similar words, or statements that certain events or conditions
“may” or “will” occur. Forward-looking statements are based
on the opinions and estimates of management at the date the
statements are made and are based on a number of assump-
tions and subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ mate-
rially from those projected in the forward-looking statements.

Assumptions upon which such forward-looking statements are
based include all required third party regulatory and govern-
mental approvals that will be obtained. Many of these assump-
tions are based on factors and events that are not within the
control of Atalaya and there is no assurance they will be correct.
Factors that could cause actual results to vary materially from
results anticipated by such forward-looking statements include
changes in market conditions and other risk factors discussed
or referred to in this report and other documents filed with the
applicable securities regulatory authorities.

Although Atalaya has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results
not to be anticipated, estimated or intended. There can be
no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Atalaya
undertakes no obligation to update forward-looking state-
ments if circumstances or management’s estimates or opinions
should change except as required by applicable securities
laws. The reader is cautioned not to place undue reliance on
forward-looking statements.

I. REVIEW OF
DEVELOPMENTS,
CURRENT POSITION AND
PERFORMANCE OF THE
GROUP’S BUSINESS AND
PRINCIPAL

PRINCIPAL ACTIVITIES OF THE
COMPANY AND ITS SUBSIDIARIES

The Company owns and operates through a wholly-owned
subsidiary, “Proyecto Riotinto”, an open-pit copper mine
located in the Pyritic belt, in the Andalusia region of Spain,
approximately 65 km northwest of Seville. A brownfield
expansion is in progress at this mine.

In addition, the Company has a phased earn-in agreement
up to 80% ownership of “Proyecto Touro”, a brownfield
copper project in northwest Spain, which is currently at the
permitting stage.

The Company’s and its subsidiaries’ business is to explore
for and develop metal production operations in Europe,
with an initial focus on copper.

The strategy is to evaluate and prioritise metal production
opportunities in several jurisdictions throughout the well-
known belts of base and precious metal mineralisation in
Spain and the Eastern European region.

For further details on the principal activities of the Group
and the Company, refer to Note 1 of the financial statements.

management reportAtalaya Mining Plc.annual report 201822

OPERATIONAL REVIEW

P R O Y E C T O RIO T IN T O

The following table presents a summarised statement of
operations of Proyecto Riotinto for the twelve months ended
31 December 2018 and 2017.

Units expressed in accordance with the international system of units (SI)

Unit

Ore mined

Ore processed

Copper ore grade

Copper concentrate grade

Copper recovery rate

Copper concentrate

Copper contained in concentrate

Payable copper contained in concentrate

Cash cost

All-in sustaining cost

$/lb payable

notes: The numbers in the above table may slightly differ between them due to rounding.

FY2018

10,753,598

9,819,839

0.49

23.31

88.30

180,661

42,114

40,306

1.94

2.26

FY2017

9,340,028

8,796,715

0.50

22.39

85.45

165,965

37,164

35,504

1.91

2.30

MININ G A ND P R O C E S S IN G

MINING

Mining operations in 2018 progressed according to plan and at
similar levels during every quarter. Ore mined during the year
was 10.8 Mtpa resulting a 16% increase over the 9.3 Mtpa from
previous year. Additional mining equipment is available on site
in anticipation of the increase in production scheduled for to
be mechanically completed by the end of Q2 2019.

PROCESSING

During 2018 the plant processed 9.8 Mt of ore with an average
copper head grade of 0.49% and a recovery rate of 88.30%.
In comparison to the rates for 2017, throughput and meta-
llurgical recoveries have increased as a result of continuous
improvements.

Throughput has increased from 8.8 Mtpa in 2017 to 9.8 Mtpa
in 2018 and recoveries have improved from 85.45% in 2017 to
88.30% in 2018. Copper head grade was 23.31%, in line with
expectations and above previous year´s grade 22.39%.

Concentrate production for 2018 was 180,661 tonnes
compared with 165,965 tonnes in 2017. Contained copper was
42,114 tonnes compared with 37,164 tonnes in 2017. Copper
payable amounted to 40,306 tonnes from 35,504 tonnes in
2017.

On-site concentrate inventories at 31 December 2018 were
approximately 4,667 tonnes which has been fully sold during
January 2019. All concentrate in stock was delivered to the
port at Huelva.

As part of the Company’s continuous improvements
programme, an additional secondary cone crusher was
installed in Q2 2018 and became fully operational in the third
quarter. Crushing capacity was no longer a bottleneck in the
production process in Q3 2018 as it was in previous quarters.

management reportAtalaya Mining Plc.annual report 201823

E X P L O R AT IO N A ND G E O L O G Y

Exploration progressed well at the Atalaya pit where massive
sulphides and stockwork mineralisation were being targeted.
The first 2,900m of a 19,000m drilling campaign have already
been drilled with positive preliminary results received during
the last quarter. Geological modelling of the upper and lower
sections of the orebody are still in progress. Drilling around the
high-grade underground workings in Filon Sur is also ongoing
with 9,900m drilled out of a programme of 17,400m.

E X PA N S IO N P R O JE C T O F P R O Y E C T O

RIO T IN T O

The 15Mtpa Expansion Project progressed according to
schedule during the year. Engineering and procurement were
completed with equipment delivered to site. All efforts are
now concentrated around site construction activities. Overall
progress completion at the end of December 2018 was over
80%. Earthworks were completed while civil engineering
works is being finalised. Installation of mechanical equipment
was completed in the flotation and concentrate handling
areas. Structural steel works have been finalised in the
flotation area with piping installation underway. Piping was
completed in the concentrate handling area with electrical
installation well advanced. The milling area is the critical path
of the Expansion Project that is scheduled for mechanical
completion at the end of Q2 2019.

P R O Y E C T O T O UR O

> NPV post-tax at 8% discount rate of $180 million using long

term copper price of US3.00/lb.

R E C E IP T O F R UL IN G O F C L A IM M A D E B Y A N

E N V IR O NME N TA L GR O UP

On 26 September 2018, Atalaya received notice from the
Tribunal Superior de Justicia de Andalucía ruling in favour of
certain claims made by environmental group Ecologistas en
Accion (“EeA”) against the government of Andalucía (“Junta de
Andalucía” or “JdA”) and Atalaya, as co-defendant in the case.

In July 2014, EeA had filed a legal claim to JdA with a request
to declare null the Unified Environmental declaration (in
Spanish, Authorization Ambiental Unificada, or “AAU”) granted
to Atalaya Riotinto Minera, S.L.U. dated 27 March 2014, which
was required in order to secure the required mining permits
for Proyecto Riotinto. The judgment, in spite of annulling the
AAU on procedural grounds, made very clear that the AAU was
correct and therefore, rejected the issues raised by EeA and
confirmed the decision of JdA not to suspend the AAU.

The JdA filed for appeal to the Supreme Court. Although the
claim was against the JdA, Atalaya, being an interested party
in the process, voluntarily joined as co-defendant to ask for
permission to appeal to the Supreme Court in Spain.

On 29 March 2019, Atalaya announced the receipt of notifica-
tion from the Supreme Court in Spain stating that it does not
have jurisdiction over the appeal made by the Junta de Anda-
lucía and the Company, which voluntary joined the appeal as
con-defendant.

The environmental impact assessment process was
completed during the fourth quarter. Since submission of
the latest studies and reports during the previous quarter, a
number of queries have been addressed and cleared as part
of the consultation and permitting process. The next step in
the permitting process is the evaluation of the project from a
regulatory perspective.

The main legal consequence of the Supreme Court rejection
is the ruling of the Tribunal Superior de Justicia de la Junta
de Andalucía dated 26 September 2018 is now final and
enforceable and the environmental authority must repair the
faultiness in the process. The Company is currently in discus-
sions to the Junta de Andalucía to resolve the formal defects
identified by the Tribunal Superior de Justicia de Andalucía.

During the second quarter, the Company announced the
completion of a pre-feasibility study (“PFS”) for the proposed
open pit mine and concentrator at Proyecto Touro. The PFS
report was prepared using the headings of, and guidance set
out in the NI 43-101 report. Highlights of the PFS report are:

> 392,000 tonnes of contained copper in P&P reserves;

> Average yearly production of 30,000 tonnes copper and

70,000 ounces of silver in concentrate;

> Pre-production capital expenditure of $165 million;

> All-in sustaining costs of US$1.85/lb of payable Cu net of

silver credits; and

The Company continues operating the mine normally as the
ruling does not state the operation at Proyecto Riotinto is to
be ceased, not even temporarily and it is still confident that
the ruling will not impact its operations at Proyecto Riotinto.

Th e C o m p a n y c o n t i n u e s o p e r a t i n g
t h e m i n e n o r m a l l y a s t h e r u l i n g
d o e s n o t s t a t e t h e o p e r a t i o n a t
P r o y e c t o R i o t i n t o i s t o b e c e a s e d .

management reportAtalaya Mining Plc.annual report 201824

OPERATIONAL GUIDANCE

The forward-looking information contained in this section is
subject to the risk factors and assumptions contained in the
cautionary statement on forward-looking statements included
in the note of this report.

Proyecto Riotinto operational guidance for 2019 is as follows:

Copper head grade for 2019 is budgeted to average 0.47% Cu,
with a recovery rate of approximately 85% - 87%. Cash opera-
ting costs for 2019 are expected to be in the range of $1.95/lb –
$2.15/lb. AISC for 2019 is expected to be in the range of $2.25/
lb – $2.45/lb Cu payable.

Guidance for 2019 considers the impact of the commissioning
of the plant expansion from June 2019.

ORE PROCESSED (MILLION TONNES)

GUIDANCE 2019

ACTUAL 2018

GUIDANCE 2018

11.4

9.8

9.6

CONTAINED COPPER (TONNES)

GUIDANCE 2019

ACTUAL 2018

GUIDANCE 2018

45,000 – 46,500

42,114

37,000 - 40,000

management reportAtalaya Mining Plc.annual report 201825

FINANCIAL REVIEWS

R E S UL T S

The following table presents a summarised consolidated
income statement for the twelve month period ended 31
December 2018, with comparatives for twelve months ended
31 December 2017.

(Euro 000’s)

Revenues from operations

Total operating costs

Corporate expenses

Exploration expenses

Care and maintenance expenditure

Other income

EBITDA

Depreciation/amortisation

Net foreign exchange (loss)/profit

Net finance cost

Tax charge

Twelve months ended 31 Dec 2018

Twelve months ended 31 Dec 2017

189,476

(128,898)

(5,892)

(1,021)

(281)

158

53,542

(13,430)

1,613

(182)

(7,102)

34,441

160,537

(114,687)

(4,508)

41,347

(16,671)

(2,212)

(557)

(3,696)

18,211

Revenues for FY2018 amounted to

The realised price for the twelve-month period in 2018 was

€189.5 million

(FY2017: €160.5 million).

Copper concentrate production during
FY2018 was

180,661 tonnes

(FY2017: 165,965 tonnes) and

183,368 tonnes

of copper concentrate were sold in the
same period (FY2017: 158,591).

$2.95/lb copper

compared with $2.66/lb copper in the same period of 2017.
Concentrates were sold under offtake agreements in place. The
Company did not enter into any hedging agreements in 2018.

Operating costs for FY2018 amounted to

€128.9 million

compared with €114.7 million in FY2017. Higher costs in 2018
were directly attributable to higher copper production.

management reportAtalaya Mining Plc.annual report 201826

Cash costs of

$1.94/lb

payable copper for FY2018, slightly higher compared
with $1.91/lb payable copper in the same period last year.
All-in sustaining costs for FY2018 were

US$2.26/lb

payable copper compared with US$2.30/lb payable
copper in the FY2017.

Care and maintenance costs related to the
Riotinto Project for FY2018 amounted to

€0.3 million

compared with €nil for FY2017.

EBITDA for FY2018 amounted to

€53.5 million

compared with EBITDA of €41.3 million for FY2017.

Sustaining capex for FY2018, included in capital
expenditure, amounted to

€8.0 million

Sustaining capex accounted for development
programmes at the perimetric channel of tailings
storage facility, optimisation of the flotation circuit.

Corporate costs for FY2018 were

€5.9 million

compared with €4.5 million for FY2017.

Exploration costs related to the Riotinto Project
for FY2018 amounted to

€1.0 million

compared with €nil in the same period last year.

Depreciation and amortisation amounted to

€13.4 million

for FY2018 (FY2017: €16.7 million). Lower depreciation was
mainly driven by an extension of the life of mine as per the
updated reserves and resources report.

Net finance costs for FY2018 amounted to

€0.2 million

(FY2017: €0.6 million).

management reportAtalaya Mining Plc.annual report 201827

N O N -G A A P ME A S UR E S

Atalaya has included certain non-IFRS measures including
“EBITDA”, “Cash Cost per pound of payable copper” “All In
Sustaining Costs” (“AISC”) and “realised prices” in this report.
Non-IFRS measures do not have any standardised meaning
prescribed under IFRS, and therefore they may not be compa-
rable to similar measures presented by other companies.
These measures are intended to provide additional informa-
tion and should not be considered in isolation or as a substi-
tute for indicators prepared in accordance with IFRS.

EBITDA includes gross sales net of penalties and discounts
and all operating costs, excluding finance, tax, impairment,
depreciation and amortisation expenses.

Cash Cost per pound of payable copper includes on-site cash
operating costs, and off-site costs including treatment and
refining charges (“TC/RC”), freight and distribution costs net

of by-product credits. Cash Cost per pound of payable copper
is consistent with the widely accepted industry standard
established by Wood Mackenzie and is also known as the C1
cash cost.

AISC per pound of payable copper includes the C1 Cash Costs
plus royalties and agency fees, expenditure on rehabilitations,
stripping costs, exploration and geology costs, corporate
costs, and sustaining capital expenditures.

Realised prices per pound of payable copper is the value of
the copper payable included in the concentrate produced
including the penalties, discounts, credits and other features
governed by the offtake agreements of the Group and all
discounts or premia provided in commodity hedge agree-
ments with financial institutions, expressed in USD per pound
of payable copper. Realised price is consistent with the widely
accepted industry standard definition.

C O N S O L ID AT E D F IN A N C I A L P O S I T IO N

(Euro 000’s)

Non-current assets

Other current assets

ASSETS

Cash and cash equivalents

Total assets

Shareholders’ equity

Non-current liabilities

LIABILITIES

Current liabilities

Total liabilities

Total equity and liabilities

31 Dec 2018

31 Dec 2017

337,503

34,581

33,070

405,154

286,374

59,564

59,216

118,780

405,154

283,500

48,016

42,856

374,372

246,853

58,784

68,735

127,519

374,372

ASSETS

Total assets were €405.2 million as at 31 December 2018,
compared to €374.4 million as at 31 December 2017, an
increase of €30.8 million. The Group’s significant assets are
its mining rights and mining plant at Proyecto Riotinto.

Non-current assets increase mainly related to the Expansion
Project, Rumbo Royalty Buyout and the capitalisation of
deferred mining costs.

Other current assets as at 31 December 2018 amounted
to €34.6 million (2017: €48.0 million), out of which €23.7
million (2017: €34.2 million) related to trade and other
receivables; €10.8 million (2017: €13.7 million) relates to
spare parts and ore in stockpile classified as inventories;
and €0.1 million (2017: €0.1million) relates to other finan-
cial assets.

Trade receivables comprise €4.5 million of receivables
from sales of copper concentrates from third parties (2017:

management reportAtalaya Mining Plc.annual report 201828

€12.1 million), €2.5 million (2017: €1.6 million) related to a
receivable from related parties from copper concentrates
sales, €13.7 million (2017: €17.8 million) related to VAT due
from authorities in Spain and Cyprus; €1.2 million (2017:
€1.7 million) related to tax advances; €0.7 million (2017:
€nil) related to prepayments and other current assets
amounting to €1.1 million (2017: €2.7 million).

LIABILITIES

Non-current liabilities stood at €59.6 million as at 31
December 2018 compared with €58.8 million as at 31
December 2017. Non-current liabilities mainly represent

the Deferred Consideration to Astor amounting to €53.0
million as at 31 December 2018 (2017: €52.9 million). In
addition to the Deferred Consideration, non-current
liabilities includes the rehabilitation provision of €6.5
million (2017: €5.7 million) and long term trade payables
of €0.1 million (2017: €0.1 million).

Current liabilities amounted to €59.2 million at 31
December 2018 (2017: €68.7 million), out of which €53.1
million (2017: €64.2 million) related to trade payables; €3.4
million (2017: €2.7 million) related to accruals; €1.9 million
related to current tax liabilities (2017: €0.8 million); and
€0.8 million (2017: €0.8 million) related to land options
and mortgage.

management reportAtalaya Mining Plc.annual report 201829

L IQ UIDI T Y A ND C A P I TA L R E S O UR C E S

Atalaya monitors factors that could impact its liquidity as part
of Atalaya’s overall capital management strategy. Factors that
are monitored include, but are not limited to, the market price
of copper, foreign currency rates, production levels, operating
costs, capital and administrative costs.

The following is a summary of Atalaya’s cash position as at
31 December 2018 and 2017, and cash flows for the twelve
months ended 31 December 2018 and 2017.

LIQUIDITY INFORMATION

Unrestricted cash and cash equivalents as at 31 December
2018 decreased to €32.8 million from €42.6 million at 31
December 2017. The decrease in cash balances is mainly the
result of the cash flow from investing activities during FY2018.
Cash balances are unrestricted and include balances at corpo-
rate and operational level.

of the working capital is trade payables related to Proyecto

Riotinto contractors. At 31 December 2018, trade payables

have been reduced by circa 16% compared with the same

period last year.

OVERVIEW OF THE GROUP’S CASH FLOWS

Cash and cash equivalents decreased by €9.8 million during

the twelve months ended 31 December 2018. This was due

to cash from operating activities amounting to €55.3 million,

cash used in investing activities amounting to €65.7 million

and cash generated by financing activities totalling to €0.6

million.

Cash generated from operating activities before working

capital changes was €56.3 million. Atalaya decreased its trade

receivables by €11.7 million, its trade payables balance in the

period by €10.3 million and increased its inventory levels by

€2.9 million.

Restricted cash remains at €0.3 million as at 31 December 2018
and mainly relates to deposit bond guarantees.

Investing activities in 2018 amounted to €65.7 million, mainly

relating to the Expansion Project of the Riotinto Project, defe-

As at 31 December 2018, Atalaya reported a working capital
surplus of €8.4 million, compared with a working capital
surplus of €22.1 million at 31 December 2017. The main liability

Financing activities in 2018 amounted to €0.6 million and

relate to the capital raised during 2018.

rred mining costs and Rumbo Royalty Buyout.

LIQUIDITY

(Euro 000’s)

Unrestricted cash and cash equivalents at Group level

Unrestricted cash and cash equivalents at Operation level

Restricted cash

Working capital surplus

CASH FLOW

(Euro 000’s)

Cash flows from operating activities

Cash flows used in investing activities

Cash flows from financing activities

Net (decrease)/increase in cash and cash equivalents

31 Dec 2018

31 Dec 2017

24,357

8,463

250

8,435

39,179

3,427

250

22,137

Twelve months ended 31 Dec 2018

Twelve months ended 31 Dec 2017

55,333

(65,712)

593

(9,786)

30,500

(22,678)

33,899

41,721

management reportAtalaya Mining Plc.annual report 201830

In February 2017, the Group entered into certain foreign

exchange hedging contracts to offset the agreements in force

as at 31 December 2016. During 2018, Atalaya did not have any

currency hedging agreements.

F O R E IG N E X C H A N GE

For FY2018, Atalaya recognised a foreign exchange gain of
€1.6 million (FY2017 loss: €2.2 million). Foreign exchange gain
mainly related to variances in EUR and USD conversion rates
during the period, as all sales are settled and occasionally
held in USD.

The following table summarises the movement in key
currencies versus the EUR:

Twelve months
ended 31 Dec 2018

Twelve months
ended 31 Dec 2017

Average rates
for the periods

Spot rates
as at

GBP – EUR

USD – EUR

GBP – EUR

USD – EUR

0.8847

1.1810

0.8945

1.1450

0.8767

1.1297

0.8872

1.1993

R UL IN G O N T HE A S T O R L I T IG AT IO N A ND

D E F E R R E D C O N S ID E R AT IO N

In September 2008, the Group moved to 100% ownership of
Atalaya Riotinto Mineral S.L. (“ARM”) (and thus full ownership
of Proyecto Riotinto) by acquiring the remaining 49% of the
issued capital of ARM. At the time of the acquisition, the Group
signed a Master Agreement (the “Master Agreement”) with
Astor Management AG (“Astor”) which included a deferred
consideration of €43.9 million (the “Deferred Consideration”)
payable as consideration in respect of the acquisition. The
Company also entered into a credit assignment agreement
at the same time with a related company of Astor, Shorthorn
AG, pursuant to which the benefit of outstanding loans was
assigned to the Company in consideration for the payment of
€9.1 million to Shorthorn (the “Loan Assignment”).

The Master Agreement has been the subject of litigation
in the High Court and the Court of Appeal that has now
concluded. As a consequence, ARM must apply any excess
cash (after payment of operating expenses, sustaining capital
expenditure, any senior debt service requirements and up to
US$10 million per annum (for non-Proyecto Riotinto related
expenses)) to pay the consideration due to Astor (including
the Deferred Consideration and the amount of €9.1 million

payable under the Loan Assignment). “Excess cash” is not
defined in the Master Agreement leaving ambiguity as to how
it is to be calculated.

As at 31 December 2018, no consideration has been paid.

The amount of the liability recognised by the Group and
Company is €53 million and €9.1 million respectively. The
effect of discounting remains insignificant, in line with prior
year’s assessment, and therefore the Group has measured the
liability for the Astor deferred consideration on an undis-
counted basis.

C RI T IC A L A C C O UN T IN G P O L ICIE S ,

E S T IM AT E S A ND A C C O UN T IN G C H A N GE S

The preparation of Atalaya’s Financial Statements in accor-
dance with IFRS required management to made estimates and
assumptions that affected amounts reported in the Financial
Statements and accompanying notes. There is a full discus-
sion and description of Atalaya’s critical accounting estimates
and judgements in the audited financial statements for the
year ended 31 December 2018 (Note 3.4).

management reportAtalaya Mining Plc.annual report 201831

P RIN CIPA L R I S K S A ND UN C E R TA IN T IE S

Due to the nature of Atalaya’s business in the mining industry,
the Group is subject to various risks that could mate-
rially impact its future operating results and could cause
actual events to differ materially from those described in
forward-looking statements relating to Atalaya.

Atalaya´s principal risks have continued to fall within four
categories:

> Strategic risks;

> Commercial and financial risks;

> External risks; and

> Operational risks

NATURE OF THE RISK

MITIGATION OF RISK

IMPORTANCE

S
K
S
I
R

C
I
G
E
T
A
R
T
S

S
K
S
I
R

L
A
I
C
N
A
N
I
F

D
N
A

L
A
I
C
R
E
M
M
O
C

Single
asset, single
commodity and
single country
risk

Lack of
replacement of
reserves

The Company´s current production is from the
Riotinto Project, which is its single producing
asset. Atalaya produces and sell copper
concentrates with silver by-product. Any inte-
rruption in the producing asset may impact the
Group’s results.

Atalaya is continually evaluating acquisi-
tions in the mining sector, to increase the
number of operation under management.
Permits of Touro would significantly
reduce the exposure as it would add an
additional operation to the Group.

Atalaya must continually replace and expand its
mineral resources. The depletion of its mineral
reserves may not be offset by future discoveries
or acquisitions.

On-going exploration campaigns
currently in areas close to both Proyecto
Riotinto and Touro.

Underestimation
of capex, finance
and license to
operate

Atalaya´s capital expenditure requirements in
the Touro Project and/or the Riotinto Project
expansion may require more capital than
anticipated and/or Atalaya may have difficulty
obtaining required permitting and financing,
which could delay project development.

Expansion of Proyecto Riotinto around
80% completed as at 31 December 2018
on time and budget.

Permits for Proyecto Touro progressing as
expected.

Significant
changes to
commodity
prices

A decline in the price of copper and other
metals in world markets, which can fluctuate
widely, could adversely affect Atalaya´s busi-
ness, operating results and prospects.

Atalaya is continually monitoring
commodity prices and revisiting hedging
strategies policies

Limited number
of customers

100% of Atalaya´s concentrate production is
sold to three offtakers. Offtakers’ business can
significantly impact its operations.

Close contact with offtakers to ensure we
understand how they run their business.

Lack of control
over certain key
inputs

Atalaya may be unable to control the availa-
bility of key inputs such as fuel, cement and
explosives, which are beyond management’s
influence.

The purchase department of the opera-
ting company is continually expanding
their network influence to ensure supplier
chain.

Insurance
coverage

Changes in
taxation and
other financial
conditions

Atalaya´s insurance coverage does not cover all
potential losses, liabilities and damage related
to its business and certain risks are uninsured
or uninsurable.

Monthly review of insurance coverage
with qualified brokers in the mining
sector.

Atalaya is subject to laws and regulations
relating to taxation, customs and royalties that
could have an adverse effect on its business,
financial conditions and results of operations.

Recurrent meetings and analysis
performed by local advisors to ensure
that Atalaya monitored and anticipated
taxation for significant business decisions.

management reportAtalaya Mining Plc.annual report 2018

Atalaya Mining Plc.

m a n a g e m e n t r e p o r t

NATURE OF THE RISK

MITIGATION OF RISK

IMPORTANCE

S
K
S
I
R

L
A
N
R
E
T
X
E

S
K
S
I
R

L
A
N
O
I
T
A
R
E
P
O

Political, legal
and regulatory
developments

Atalaya is subject to extensive regulation,
concessions, authorisations, licences, and
permits which are subject to expiration, to
limitation on renewal and to various other risks
and uncertainties.

Monitoring all legal and political decisions
that might impact the mining sector,
by participating among peer miners in
the area in professional agencies and
meetings.

Economic
conditions

General economic conditions or changes in
consumption patterns may adversely affect
Atalaya´s growth and profitability. In particular,
the Chinese market, which has significant
impact on the world’s copper demand.

Monitoring commodities prices.

Dependence
on key
infrastructure

Atalaya is dependent on transportation faci-
lities, infrastructure and certain suppliers, a
lack of which could impact its production and
development projects.

Atalaya´s contractors are very reliable.
Atalaya maintains contingency plans to
ensure operations.

Shortages of
equipment,
services and
skilled personnel

The industry has faced a worldwide shortage
of mining and construction equipment, spare
parts, contractors, and other skilled personnel
during periods of high demand in commodities.

Atalaya has increased its headcount from
last year and is constantly looking to
expand. Atalaya invests in training and its
remuneration package ensures that its
employees have enough incentive to stay.

Operational risks
and hazards

Operational risks and hazards may adversely
impact Atalaya’s business, financial condition
and result of operations, particularly: floods,
natural disasters, industrial accidents, labour
disputes, structural collapses, transportations
delays and earthquakes.

Labour
disruptions

Atalaya may be adversely affected by labour
disruptions.

Water,
electricity and
other key supply
shortages

Atalaya’s mining operations depend on the avai-
lability of water, electricity and other key inputs.

Atalaya constantly invests in health and
safety and regularly analyses ways in
which to make its mine safer.

Atalaya has meetings periodically with
its trade unions to discuss and agree on
any changes to labour conditions and
concerns.

Atalaya monitors water consumption and
water levels frequently. As the Company
expands, Atalaya will need more water
and electricity. Atalaya has undertaken a
water use enlargement project in which
the Company will be incrementing their
water resources by 50%.

Complexity of
environmental
laws

Atalaya’s operations are subject to complex and
evolving environmental laws and regulations
and changes may increase its running costs.

Atalaya has a dedicated team that review
any new laws and changes regularly.
Atalaya has not been highlighted of any
imminent change.

In addition to the above commercial and finance risks, refer to Note 3 of the financial statements for further details on the finance risk manage-
ment policy adopted by the Group and the Company.

High

Medium

Low

annual report 2018

IN T E R N A L C O N T R O L S

C R E DI T O R S’ PAY ME N T T E R M S

The Directors have overall responsibility for the Group’s
internal control and effectiveness in safeguarding the assets of
the Group. Internal control systems are designed to reflect the
particular type of business, operations and safety risks and to
identify and manage risks, but not entirely all risks to which
the business is exposed. As a result, internal controls can only
provide a reasonable, but not absolute, assurance against
material misstatements or loss.

The processes used by the Board to review the effectiveness
of the internal controls are through the Audit and Financial
Risk Committee and Physical Risk Committee and the execu-
tive management reporting to the Board on a regular basis
where business plans and budgets, including investments are
appraised and agreed. The Board also seeks to ensure that
there is a proper organisational and management structure
with clear responsibilities and accountability. It is the Board’s
policy to ensure that the management structure and the
quality and integrity of the personnel are compatible with the
requirements of the Group.

The Board attaches importance to maintaining good rela-
tionships with all its shareholders and ensures that all price
sensitive information is released to all shareholders at
the same time in accordance with AIM and TSX rules. The
Company’s principal communication with its investors is
through the annual report and accounts, the quarterly state-
ments and press releases issued as material events unfold.

G OIN G C O N C E R N

The directors and management have performed a going
concern assessment and that assessment includes the points
highlighted here. Operations at the Group has generated
significant operational cash flows during the year. Atalaya has
also expanded the reserves and resources which has therefore
extended their life of mine.

The Company has increased their assets in line with their
expectations. Copper prices were well above the cash cost
during 2018 and Atalaya has no external debt or covenants
impacting the organisation, other than the Deferred Conside-
ration which is only payable out of excess cash flows. Atalaya
has a legal claim affecting their environmental authorisation
AAU (in Spanish “Autorización Ambiental Unificada”) but
this is being dealt with by their lawyers and advisors and on
this basis Atalaya believes that the going concern basis is
appropriate. Accordingly, the Directors have a reasonable
expectation that the mining operation and the Group have
adequate resources to continue in operational existence for
the foreseeable future.

The Group does not have a specific policy towards its
suppliers and does not follow any code or standard practice.
However, terms of payment with suppliers are settled when
agreeing overall terms of business, and the Group seeks to
abide by the terms of the contracts to which it is bound.

P O L I T IC A L A ND C H A RI TA B L E D O N AT IO N S

The Group made no political and no charitable donations
during the year ended 31 December 2018 (2017: €nil)

R E S E A R C H A ND D E V E L O P ME N T A C T I V I T IE S

For details on research and development activities carried out
by the Group and Company, refer to section (ii). Future develo-
pments of the Group and Company to the Management Report.

E X I S T E N C E O F B R A N C HE S

The Group does not maintain any branches.

S H A R E C A P I TA L S T R U C T UR E

During 2018, the Company had the following weighted average
number of shares outstanding and commitments to issue
shares:

Ordinary shares

Options

Fully diluted

Weighted Nr. of ordinary shares

136,755,426

1,354,633

138,110,059

During 2018, Atalaya increased its share capital by 2.1 million
of ordinary shares (2017: 18.6 million shares).

Details on authorised and issued share capital are disclosed in
Note 23 of the consolidated financial statements.

P R O P O S A L IN R E L AT IO N T O T HE

DI S T RIB U T IO N O F P R O F I T S A ND DI V ID E ND

The Directors do not recommend the payment of a dividend
for the year (2017: €nil).

management reportAtalaya Mining Plc.annual report 201834

II. FUTURE DEVELOPMENTS
OF THE GROUP AND
COMPANY

OUR BUSINESS MODEL

T H E B U S I N E S S M O D E L O F A T A L A Y A I S F O U N D E D U P O N C R E A T I N G V A L U E T H R O U G H

O P E R A T I O N A L A N D D E V E L O P M E N T A L E X C E L L E N C E . E X P E R I E N C E A N D A N U N C E A S I N G

S E A R C H F O R I M P R O V E M E N T A R E T H E P I L L A R S O F I T S S U C C E S S .

O U R V A L U E S

S T R A T E G I C P I L L A R S

I M P O R T A N C E O F P E O P L E

Importance of Safety, Health, Environment &
Security

> Strong work force with longstanding employees

> Working closely with communities

O P E R A T I O N A L E X C E L L E N C E

Importance of cost management

> Establishing high performance

> Operating to a world-class standard

> Maximising production capacity

C R E A T I N G V A L U E

Increase asset value under management

> Focusing on generating free cash flows

> Focusing on creating value for shareholders

> Allocating capital efficiently

> Creating opportunities for growth

O U R P E O P L E A N D

R E L A T I O N S H I P S

O U R B U S I N E S S

O U R F U T U R E

management reportAtalaya Mining Plc.annual report 201835

OUR STRATEGY

S
P
I
H
S
N
O
I
T
A
L
E
R

D
N
A

E
L
P
O
E
P

R
U
O

S
S
E
N
I
S
U
B

R
U
O

E
R
U
T
U
F

R
U
O

> Environmental matters are discussed across the

Group from the operating workforce to the Board of
Directors.

> Continuous communication with regulatory bodies
and shareholders to ensure world-class operation.

> Experienced mining team to ensure proper safety,

health and security policies.

> Focused on creating a high-performance culture

KEY DRIVER

ACHIEVEMENTS

PRINCIPAL RISKS

expenditures
to reduce
environmental
impact

2 0 1 8
A C H I E V E M E N T S

Increased the number of
employees at Proyecto
Riotinto.

O P E R A T I O N A L

R I S K S

where its people are its core asset.

400+ employees

> Atalaya has a flat management structure with

accessible people.

> Atalaya’s personnel are primarily based at site.

> Focused on improving its relationships with local

government and communities.

> Limited presence in the media, with efforts focused

on direct contact with people.

99% based at
mine site

community
support through
Fundación Atalaya
Riotinto

2 0 1 9
P R I O R I T I E S

Improve health and safety
indicators.

Increase work capacity
for Proyecto Touro.

E X T E R N A L

R I S K S

KEY DRIVER

ACHIEVEMENTS

PRINCIPAL RISKS

> World-class
processing
plant in Europe
to maximise
value of the
Group, thereby
increasing free
cash flows from
operations.

€53.5m EBITDA

42k tonnes of
Cu produced

2 0 1 8
A C H I E V E M E N T S

Production at Proyecto Riotinto above
guidance.

All-in sustaining cost improvement
above expectations.

Over 80% of the engineering works
completed for the 15Mtpa Expansion
Project.

2 0 1 9
P R I O R I T I E S

Completion of
Expansion Project
at Proyecto Riotinto
and progress on the
permitting at Proyecto
Touro.

F I N A N C I A L

R I S K S

O P E R A T I O N A L

R I S K S

> Evaluation of

existing capacity
of each project
and investment
in exploration to
replace reserves
deployed.

> Searching and

evaluating projects
around the world.

KEY DRIVER

ACHIEVEMENTS

PRINCIPAL RISKS

share price
of 209.50
pence as at
31 December
2018

2 0 1 8
A C H I E V E M E N T S

Investment of €8.0 million
(2017: €7.4 million) in
sustaining Capex in Proyecto
Riotinto.

Updated NI 43-101 for
Proyecto Riotinto.

2 0 1 9
P R I O R I T I E S

Continuing exploration
works to expand the
reserves and resources of
Proyecto Riotinto.

Ensuring no delays impede
the permit progress of
Touro.

S T R A T E G I C
R I S K S

E X T E R N A L

R I S K S

management reportAtalaya Mining Plc.annual report 2018

MARKET OVERVIEW

FOREIGN EXCHANGE

M A R K E T P RIC E

During 2018, copper traded between US$2.85 and US$3.12 per
pound of copper. The spot price for copper was US$3.26 as at
2 January 2018 and US$2.71 as at 31 December 2018, reflecting
a decrease of 20.3% for the period. The average market price
for 2018 of $2.93/lb increased 4.6% over the average for 2017.

The market copper price has a significant impact on Atalaya`s
ability to generate positive operating cash flows.

REALISED COPPER PRICE PER LB (USD)

FY2018

2.95

2.66

FY2017

MARKET COPPER PRICE PER LB (PERIOD AVERAGE) (USD)

FY2018

2.93

2.80

FY2017

Realised copper prices for the reporting period noted above
have been calculated using payable copper and including both
provisional invoices and final settlements of quotation periods
(“QPs”) together. Higher realised prices than market copper
prices are mainly due to the final settlement of invoices where
the QP was fixed in the previous quarter due to a short open
period when copper prices were higher. The realised price
during the year, excluding the QP, was approximately $2.89/lb.

ATALAYA’S RESPONSE

The Group had no hedges on commodities prices during
2018 and the resultant increase in revenues is reflected in the
income statement. As at the date of this report, the Group
is fully exposed to the copper prices with no commodities
hedging agreement in place.

Foreign exchange rate movements can have a significant
effect on Atalaya’s operations, financial position and results.
Atalaya’s sales are denominated in U.S. dollars (“USD”),
while Atalaya’s operating expenses, income taxes and other
expenses are denominated in Euros (“EUR”), and to a much
lesser extent in British Pounds (“GBP”).

Accordingly, fluctuations in the exchange rates can impact
the results of operations and carrying value of assets and liabi-
lities on the balance sheet.

ATALAYA’S RESPONSE

The Group was positively impacted by favourable rate
against USD, the currency where all sales of the Group are
denominated.

Management continuously monitor currency rates and
evaluate currency hedging to minimise risk.

III. STATEMENT OF
CORPORATE GOVERNANCE

The Group and the Company give special attention to the
application of sound corporate governance policies, practices
and procedures. Corporate Governance is the set of proce-
dures followed for the proper management and administra-
tion of the Group. Corporate Governance rules the relationship
between the shareholders, the board of directors and the
management team of a company.

The QCA code has been adopted by the Group and the
Company since its inception for Directors’ dealings which is
appropriate for a TSX and AIM listed company. The Directors
comply with Rules 21,31 and 26 of the AIM Rules relating to
Directors’ dealings and will continue to take all reasonable
steps to ensure compliance by the Group’s applicable emplo-
yees as well.

CORPORATE GOVERNANCE CODE

The QCA code is inherent to the Company´s foundation and
Atalaya´s medium and long-term success depends on its
compliance with the QCA code and with its forward looking
and long-term objectives.

The Company has adopted a model code since its inception
for Directors’ dealings which is appropriate for a TSX and AIM

management reportAtalaya Mining Plc.annual report 201837

listed company. The Directors do comply with Rules 21.31
and 26 of the AIM Rules relating to Directors’ dealings and will
take all reasonable steps to ensure compliance by the Group’s
applicable employees as well.

The board reviews and is in frequent contact with the CEO
and with other representatives of the Company to see if the
Company and its employees are in a healthy working environ-
ment and to check to see if the state of the culture represents
its values.

The Company is incorporated in Cyprus, so it is subject to
Cypriot laws and regulations, being subject to the regulations
of AIM and TSX, its trading platforms. There is no conflict there
and in fact makes it easier to be more transparent and straigh-
tforward to its shareholders.

QUOTED COMPANY ALLIANCE (QCA)

The QCA is an independent membership that “champions the
interests of small to mid-size quoted companies”. The QCA repre-
sents around 1.4 million workers and they set out the guidelines
of independence and transparency for said businesses.

During 2018, the QCA issued an updated version of its Corpo-
rate Governance Code. This new and updated version of
the Code includes 10 corporate governance principles that
companies should follow, and step-by-step guidance on how
to effectively apply these principles.

Refer to the Corporate Governance Report for further details.

IV. DIRECTORS’
RESPONSIBILITIES FOR THE
FINANCIAL STATEMENTS

Cyprus company law states that the Directors are responsible
for the preparation of financial statements for each financial
year which give a true and fair view of the state of affairs of
the Company and of the Group and of the profit or loss of the
Group for that period.

In the preparation of these financial statements, the Directors
are required to:

> state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements.

The Directors are responsible for maintaining proper accoun-
ting records, for safeguarding the assets of the Group and for
taking reasonable steps for the prevention and detection of
fraud and other irregularities. Legislation in Cyprus governing
the preparation and dissemination of the financial statements
may differ from legislation in other jurisdictions.

COMPOSITION, RESPONSIBILITIES AND REMUNERATION OF BOARD OF

DIRECTORS

The members of the Board of Directors as at 31 December
2018 and on the date of this report are presented in the Corpo-
rate Governance report. There were no significant changes
in the assignment of responsibilities of the members of the
Board of Directors.

For further details on the composition, responsibilities and
remuneration of the Board of Directors, refer to the Corporate
Governance report.

V. AUDITORS

The auditors, Ernst & Young Cyprus Ltd., have expressed their
willingness to continue in office and a resolution approving
their reappointment and giving authority to the Board of
Directors to fix their remuneration will be proposed at the next
Annual General Meeting.

VI. EVENTS AFTER
REPORTING PERIOD

Any significant events that occurred after the end of the
reporting period are described in Note 34 to the financial
statements.

By Order of the Board of Directors,

> select suitable accounting policies and then apply them

consistently;

> make judgments and estimates that are reasonable and

prudent; and

—

Roger Davey
Chairman
Nicosia, 3 April 2019

management reportAtalaya Mining Plc.annual report 201838

CORPORATE
GOVERNANCE
REPORT

Corporate governance reportAtalaya Mining Plc.annual report 201839

Corporate governance reportAtalaya Mining Plc.annual report 201840

BOARD OF
DIRECTORS

BOARD STRUCTURE

BOARD OF DIRECTORS

COMMITTEES

AUDIT AND FINANCIAL RISK
COMMITTEE (“AFRC”)

CORPORATE GOVERNANCE
NOMINATING AND COMPENSATION
COMMITTEE (“CGNCC”)

PHYSICAL RISK COMMITTEE
(“PRC”)

Summary of Committee
responsibilities

Reviews and monitors financial
statements

***
Reviews Company’s public
disclosure of financial information

***
Reviews estimates and judgements
that are material to reported
financial information

***
Oversees the auditors arrangements
and performance
Reviews internal and external risks
of the Company

Dr. Hussein Barma (Chairman)
Mr. Roger Davey
Mr. Stephen Scott

Summary of Committee
responsibilities

Reviews Directors’
compensation and
performance

***
Reviews Corporate Governance
of Atalaya and practices,
independence, charters’
review, and structure

***
Compensation and performance
of officers of Atalaya

Summary of Committee
responsibilities

Oversees safety, health,
environment and security matters
of the Company

***
Oversees enterprise-wide
physical risk management

***
Reviews compliance with legal
and regulatory obligations
relating to safety, health, and
environment

Stephen Scott (Chairman)
Mr. Roger Davey
Dr. Hussein Barma
Mr. Damon Barber

Dr. Jose Sierra (Chairman)
Mr. Roger Davey
Mr. Stephen Scott

Corporate governance reportAtalaya Mining Plc.annual report 201841

DIRECTORS

The names and particulars of the qualifications and experience of each director are set out below. All directors held office from the
start of the financial year to the date of this report. In accordance with the Company's Articles of Association, one-third of the Board
of Directors must resign each year. All the directors will retire at the next AGM and offer themselves for re-election.

ROGER DAVEY

Non-executive Chairman
of the Board

ALBERTO
LAVANDEIRA

Managing Director and
Chief Executive Officer

Mr. Davey has over forty years’ experience in the
mining industry. Previous employment included
assistant director and senior mining engineer at
NM Rothschild & Sons; director, vice-president
and general manager of AngloGold’s subsidiaries
in Argentina; operations director of Greenwich
Resources Plc, London; production manager for Blue
Circle Industries in Chile; and various production
roles from graduate trainee to mine manager, in
Gold Fields of South Africa (1971 to 1978). Mr. Davey
is currently a director of Highfield Resources Ltd.,
Central Asia Metals plc and Tharisa plc.

Mr. Davey is a graduate of the Camborne School
of Mines, England (1970), with a Master of Science
degree in Mineral Production Management from
Imperial College, London University, (1979) and
a Master of Science degree from Bournemouth
University (1994). He is a Chartered Engineer (C.Eng.),
a European Engineer (Eur. Ing.) and a Member of the
Institute of Materials, Minerals and Mining (MIMMM).

Name

Roger Davey

Role

Chairman / Independent

Years of service

Since May 2010

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, operations, processing,
exploration, Capital market, UK Market,
International business, leadership,
strategic, fund raising, M&A, governance,
project management.

Mr. Lavandeira brings close to forty years of
experience operating and developing mining
projects. Formerly, he was President, CEO and COO
of Rio Narcea Gold Mines which built three mines
including Aguablanca, El Vallés-Boinas y Tasiast. He
is a director of Black Dragon Gold Corp. and Samref
Overseas S.A, and he was involved in the deve-
lopment of the Mutanda Mine in the Democratic
Republic of Congo.

He is a graduate of the University of Oviedo, Spain
with a degree in Mining Engineering.

Name

Alberto Lavandeira

Role

Chief Executive / Officer

Years of service

Since May 2014

Executive

Time commitment

100%

Skills

Mining experience, operations, processing,
exploration, commercial, Capital market,
International business, leadership,
strategic, fund raising, M&A, governance,
project management, permitting,
government relations, CEO, sustainability

Corporate governance reportAtalaya Mining Plc.annual report 2018DAMON BARBER

Non-executive Director

Mr. Barber is currently the Senior Managing Director of Liberty Metals & Mining.
Mr. Barber has more than 20 years’ experience in natural-resources finance,
mining project development and mining operations. Mr. Barber graduated
from the University of Kentucky with a B.S. in Mining Engineering and began his
career as a section foreman at CONSOL Energy Inc.’s Loveridge Mine. Mr. Barber
holds an MBA from the Wharton School of the University of Pennsylvania.

Mr. Barber is a member of the Corporate Governance Nominating
Compensation Committee.

DR. HUSSEIN BARMA

Non-executive Director

Dr. Barma is a principal of Barma Advisory. He was formerly CFO (UK) of
Antofagasta Plc from 1998 to 2014 and possesses a deep knowledge of
governance practices at board level, as well as accounting and reporting,
investor relations and regulatory requirements of the London market. He
previously worked as an auditor at Price Waterhouse (now PwC) and until May
2018 he was a steering group member of the UK Financial Reporting Council’s
Financial Reporting Lab. He is a non-executive Director of Chaarat Gold
Holdings Limited.

Dr. Barma is the Chair of the Audit and Financial Risk Committee, and a member
of the Corporate Governance Nominating Compensation Committee.

JESÚS FERNÁNDEZ

Non-executive Director

Mr. Fernandez is head of the M&A team for Trafigura. He joined Trafigura in
2004 and has fifteen years of experience in mining investments and financing.
Previously, he was a director of Nyrstar, Tiger Resources Limited, Cadilac
Ventures, Anvil Mining Limited and Iberian Minerals Corp. plc.

Role

Non-Independent

Years of service

Since Sep 2015

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, operations, processing,
Capital market, International business,
leadership, strategic, fund raising, M&A,
governance, project management.

Role

Chair of the AFRC / Independent

Years of service

Since Sep 2015

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, Corporate finance, finance
and accounting, legal, UK Market, Capital market,
International business, leadership, strategic, fund
raising, M&A communications, sustainability.

Role

Non-independent

Years of service

Since Jun 2015

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, Capital market, UK Markets,
International business, Corporate finance, finance
and accounting, legal, leadership, strategic, fund
raising, M&A, governance.

Corporate governance reportAtalaya Mining Plc.annual report 201843

HARRY LIU

BSc. Economics - non-executive Director

Mr. Liu is a board director of Yanggu Xiangguang Copper (Shandong, China), one
of the world’s largest copper smelting, refining and processing groups.

Mr. Liu has held a number of senior management and marketing positions in the
mineral and financial industries in Shanghai and Hong Kong, including roles as
marketing manager at BHP Billiton Marketing AG and Director at BNP Paribas
Asia.

Mr. Liu graduated with a Bachelor´s Degree in Economics from Zhejiang
University in Zhejiang Province, China.

JONATHAN LAMB

Non-executive Director

Mr. Lamb is portfolio manager at Orion Mine Finance and a director at Minera
la Negra and former director at Lynx Resources. He was formerly investment
manager for Red Kite Group’s Mine Finance business. He was previously at
Deutsche Bank’s Metals & Mining Investment Banking group in New York, where
he worked on a variety of debt and equity financings and M&A transactions.

JOSÉ SIERRA LÓPEZ

Non-executive Director

Dr. Sierra has an extensive experience as a mining and energy leader in the busi-
ness and government sectors. His experience includes being Spain’s national
Director General of Mines and Construction Industries and EU Director for Fossil
Fuels for the European Commission. Most recently he was Commissioner at the
National Energy Commission of Spain. He was also a member of the Single Elec-
tricity Market of the Republic of Ireland and Northern Ireland He was a member
of the Board of Transport et Infrastructures Gaz France.

Dr. Sierra holds a Ph.D. in Mining from the University of Madrid. He obtained a
DIC at the Royal School of Mines (Imperial College) and is an elected member of
the Royal Academy of Doctors of Spain.

Dr. Sierra is the Chair of the Physical Risk Committee.

Role

Non-Independent

Years of service

Since Oct 2010

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Commodity trading and financing, Capital
market, International business, leadership,
strategic, fund raising, M&A, governance, project
management, permitting.

Role

Non-Independent

Years of service

Since Sep 2015

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, Capital market, UK Markets,
International business, Corporate finance, finance
and accounting, legal, leadership, strategic, fund
raising, M&A, governance.

Role

Chair of the PRC / Independent

Years of service

Since Oct 2011

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, operations, processing,
exploration, Capital market, UK Market,
International business, leadership, strategic,
governance, project management, permitting.

Corporate governance reportAtalaya Mining Plc.annual report 201844

STEPHEN SCOTT

Non-executive Director

Mr. Scott is president and CEO of Entree Resources Limited. Previously, he
was president and CEO of Minenet advisors advising on strategy, corporate
development, business restructuring and project management. He held various
global executive positions with Rio Tinto (2000-2014) and currently serves on
the boards of a number of public and private mining companies.

Mr. Scott is the Chair of the Corporate Governance Nominating Compensation
Committee and a member of the Audit and Financial Risk Committee.

Role

Chair of the CGNCC / Independent

Years of service

Since Sep 2015

Executive

Non-executive director

Time commitment

At least 75% meetings schedule

Skills

Mining experience, operations, processing, explo-
ration, Capital market, International business,
leadership, strategic, fund raising, M&A, gover-
nance, project management, permitting, CEO.

C or por a t e go v er nanc e
c omplianc e s t a t emen t

The Company adheres to the QCA Corporate Governance Code. Its statement of compliance is
contained in section iii of the Management Report.

B O A R D A P P OIN T ME N T S

The Board is appointed by the share-
holders and are chosen based on
their skill, experience and expertise.
Directors are always expected to be
ambassadors for the Company and
reflect its values and work ethic. They
are also expected to devote substan-
tial time in research and preparation
before each meeting to ensure that the
future of the Company is going in the
right direction.

DIR E C T O R IND U C T IO N

When appointed, new directors
are provided with an induction
programme including meetings with
other directors, members of the senior

Th e B o a r d i s
a p p o i n t e d b y t h e
s h a r e h o l d e r s a n d
a r e c h o s e n b a s e d
o n t h e i r s k i l l ,
e x p e r i e n c e a n d
e x p e r t i s e . D i r e c t o r s
a r e a l w a y s e x p e c t e d
t o b e a m b a s s a d o r s
f o r t h e C o m p a n y a n d
r e f l e c t i t s v a l u e s
a n d w o r k e t h i c .

management team and the Company’s
professional advisors. They are also
briefed on their responsibilities under
AIM and TSX. New directors are also
provided with an opportunity to visit
the Company’s operations in Spain to
understand how Atalaya works on-site.

The Company requires its directors to
keep themselves professionally up-to-
date and familiar with its articles and
charters.

DIR E C T O R IND E P E ND E N C E

The Board will be composed of at
least the same number of indepen-
dent Directors (in accordance with
applicable securities laws and stock
exchange rules) as non-independent,

Corporate governance reportAtalaya Mining Plc.annual report 201845

non-executive Directors. The CGNC
Committee will determine whether a
member of the Board, or nominee to the
Board, is an independent Director. If at
any time less than half of the non-exe-
cutive Directors are independent, the
Board shall take steps to ensure that the
composition of the Board reflect that
at least half are independent. If at any
time the Chairman of the Board is not
independent, the Board shall consider
possible steps and processes to ensure
that leadership is provided for the
Board's independent Directors.

This ensures that all Board discussions
or decisions have the benefit of outside
views and experience, and that at least
half of the non-executive Directors are
free of any interests or influences that
could or could reasonably be perceived
to materially interfere with the Direc-
tor's ability to act in the best interests
of the Company.

At least annually, the Board shall, with
the assistance of the CGNC Committee,
determine the independence of each
director and the independence of each
AFRC member.

In the opinion of the Board, all
Directors should bring specific skills
and experience that add value to the
Company. The balance of skills and
experience of the Board is to be regu-
larly reviewed by the CGNC Committee.

When considering the potential
reappointment of an existing Director,
the Board will take into account the
individual's performance as well as the
skills and experience mix required by
the Board in the future.

When considering vacancies, the Board
will take into account a candidate's
capacity to enhance the mix of skills
and experience of the Board.

affairs of the Company. The Board
directly and with the Chair provide
direction to senior management, gene-
rally through the CEO, to pursue the
best interests of the Company.

The Board has the final responsibility
for the successful operations of the
Company. The Board must ensure that
management has in place appropriate
processes for strategic planning and
risk assessment, management and
internal control and monitor perfor-
mance against benchmarks. The Board
must also ensure that the Company
complies with all of its contractual,
statutory and any other legal obliga-
tions, including the requirements of
any regulatory body.

The Board is responsible for guiding
and monitoring the business and the
affairs of the Company. The Company
recognises the importance of the
Board in providing a sound base for
good corporate governance in the
operations of the Company. The Board
must at all times act honestly, fairly
and diligently in all respects in accor-
dance with the law applicable to the
Company. Furthermore, the Board will
at all times act in accordance with all
Company policies in force.

Each of the Directors, when repre-
senting the Company, must act in the
best interests of shareholders of the
Company and in the best interests of
the Company as a whole.

HIGHL IGH T S O F T HE B O A R D
F O R T HI S Y E A R

Atalaya has had twelve Board meetings
in which a whole array of subjects were
dealt with. When needed, its profes-
sional advisors are invited to attend
meetings to provide input into legal
and financial matters.

R O L E O F T HE B O A R D

The Board has a duty to supervise
the management of the business and

Atalaya has also had three Physical Risk
Committee meetings, five Audit and
Financial Risk Committee meetings
and three Corporate Governance,

Nominating and Compensation
Committee meetings.

These committee meetings were held to
deal with specifics and then a summary
of those meetings was reported to the
Board of Directors. A summary of the
topics discussed at Board and Commi-
ttee meetings included:

Health and safety, reporting
of accidents and reviewing
policy to look for improvements
including a go ahead on a
restructuring of the safety
department.

Operational, discussed all the
different operational figures.

Financial, reviewed figures such
as cost, capital investment,
budgets, etc.

Quarterly reports, annual report
and other deliverables to the
Market.

Re-elections of Directors.

Risk Management, Atalaya had
a reassessment of risk and
the areas that changed were
updated.

Board and committees
performance.

The board would like to thank the
committees that have helped the
board reach its conclusions.

T HE R O L E O F INDI V ID U A L
DIR E C T O R S

As members of the Board, Directors
have ultimate responsibility for the
Company's overall success. Therefore,
Directors have an individual responsibi-
lity to ensure that the Board is underta-
king its responsibilities as set out in the
Board charters.

Corporate governance reportAtalaya Mining Plc.annual report 2018Directors need to ensure the following:

> Leadership to the Company, parti-
cularly in the areas of ethics and
culture including a clear and appro-
priate strategic direction;

> Accountability to key stakeholders,

particularly shareholders;

> Oversight of all control and accoun-
tability systems including all finan-
cial operations and solvency, risk
management and compliance;

> an effective senior management
team and appropriate personnel
policies; and

timely and effective decisions on
matters reserved to it.

It is also expected that the Directors
comply with the following:

> Behaving in a manner consistent

with the letter and spirit of the Code
of Conduct;

> Making reasonable efforts to attend
all meetings of the Board, the annual
general meeting of shareholders of
the Company and of all the Board
committees upon which they serve.
Subject to extenuating circum-
stances, Directors are expected
to attend at least 75% of regularly
scheduled Board and committee
meetings. The CGNC Committee
will review the circumstances that
prevent any director from achieving
the minimum level and report its
findings to the Board.

> Addressing issues in a confident,
firm and friendly manner but also
ensure that others are given a reaso-
nable opportunity to put forward
their views;

> Preparing thoroughly for each Board

or Committee event;

> Using judgement, common sense
and tact when discussing issues.

Lastly Directors will keep confidential
all Board discussions and delibera-
tions. Similarly, all confidential infor-
mation received by a Director in the
course of the exercise of the Director's

duties remains the property of the
Company and is not to be discussed
outside the boardroom. It is improper
to disclose it, or allow it to be disclosed,
without appropriate authorisation.

C H A IR M A N’ S R O L E

The Chairman is considered the "lead"
Director and utilises his/her expe-
rience, skills and leadership abilities to
facilitate the governance processes.
The Chairman will be selected on the
basis of relevant experience, skill and
leadership abilities.

The responsibilities of the Chair include
but is not restricted to:

> Chair Board, annual and extraordi-

nary meetings;

> Set Board agendas and ensure that

the meetings are effective and follow
the agenda;

> Ensure that the decisions are imple-

mented promptly;

> Ensure that the Board behaves in
accordance with the Company´s
code of conduct;

> The primary spokesperson and

channel of communication for the
Company in the annual general
meeting and in all public relation
activities;

> To be kept informed by the CEO and
other senior management which
may be relevant to Directors in their
capacity as Directors;

> Ensures Directors devote sufficient

time to their tasks.

The Board monitors and promotes cor-
porate culture with frequent contact via
senior management and the CEO. The
management and CEO report the state
of the culture to the Board and include
any recommendations they have.

T HE R O L E O F T HE C E O

The CEO is responsible for the attain-
ment of the Company's goals and

Th e C h a i r m a n i s
c o n s i d e r e d t h e " l e a d "
D i r e c t o r a n d u t i l i s e s
h i s / h e r e x p e r i e n c e ,
s k i l l s a n d l e a d e r s h i p
a b i l i t i e s t o f a c i l i t a t e
t h e g o v e r n a n c e
p r o c e s s e s

vision for the future, in accordance with
the strategies, policies, programmes
and performance requirements
approved by the Board. The position
reports directly to the Board.

The CEO's primary objective is to
ensure the ongoing success of the
Company through being responsible
for all aspects of the management and
development of the Company. The
CEO is of critical importance to the

Corporate governance reportAtalaya Mining Plc.annual report 201847

Company in guiding the Company to
develop new and imaginative ways of
winning and conducting business. The
CEO must have the industry knowledge
and credibility to fulfil the requirements
of the role.

The CEO will manage a team of
executives responsible for all functions
contributing to the success of the
Company

The tasks of the CEO shall include but
not restricted to:

> Develop with the Board, implement
and monitor the short- medium- and
long-term strategic and financial
plans for the Company to achieve
the Company's vision and overall
business objectives;

> Develop all financial reports, and
all other material reporting and
external communications by the
Company, including material

announcements and disclosure,
in accordance with the Company's
Shareholder Communication Policy;

> Manage the appointment of the
Chief Operating Officer (“COO”),
CFO, Company Secretary and
other specific senior management
positions;

> Develop, implement and monitor
the Company's risk management
practices and policies;

> Consult with the Chairman and the
Company Secretary in relation to
establishing the agenda for Board
meetings;

> Agree with the Chairman their

respective roles in relation to all
meetings (formal and informal) with
shareholders and all public relations
activities;

> Be the primary channel of communi-
cation and point of contact between
members of senior management and
the Board (and the directors);

> Keep the Chairman fully informed
of all material matters which may
be relevant to the Board and its
members, in their capacity as
directors;

> Provide strong leadership to, and
effective management of, the
Company in order to:

> Encourage co-operation and

teamwork, build and maintain staff
morale at a high level and build and
maintain a strong sense of staff iden-
tity with, and a sense of allegiance
to, the Company;

> Advise the Board on the most effec-
tive organisational structure and
overseeing its implementation;

> Establishing and maintaining

effective and positive relationships
with Board members, shareholders,
customers, suppliers and other
government and business liaisons;

> Carry out the day-to-day manage-

ment of the Company.

Corporate governance reportAtalaya Mining Plc.annual report 201848

T HE R O L E O F C O MPA N Y
S E C R E TA R Y

The Company Secretary is charged with
facilitating the Company’s corporate
governance processes and so holds
primary responsibility for ensuring that
the Board processes and procedures
run efficiently and effectively.

The Company Secretary is accountable
to the Board, through the Chairman,
on all governance matters and reports
directly to the Chairman as the repre-
sentative of the Board. The Company

Secretary is appointed and dismissed by
the Board and all Directors have a right
of access to the Company Secretary.

> Preparing for and attending all

annual and extraordinary general
meetings of the Company;

The tasks of the Company Secretary
shall include but not restricted to:

> Notifying the directors in writing in
advance of a meeting of the Board
as specified in the Constitution and
the Board Charter;

> Recording, maintaining and distri-
buting the minutes of all Board
and Board Committee meetings as
required;

> Overseeing the Company’s

compliance programme and
ensuring all Company legislative
obligations are met;

Ensuring all requirements of regulatory
bodies are fully met; and providing
counsel on corporate governance prin-
ciples and Director liability.

Board diversity

Atalaya recognises the need to have a diverse board so that varying points of view can be brought to
the table. It ensures its directors are well qualified and have a range of different skills and experience,
with a good international mix to meet the requirements of operating in a global industry.

B O A R D ME E T IN G S A ND AT T E ND A N C E

The board and directors do not have a fixed time requirement.
They are expected to attend all meetings and be sufficiently
prepared with all issues that arise.

All Directors are required to take decisions objectively and in the
best interests of the Company. As part of their duties as direc-
tors, non-executive directors are expected to apply independent
judgement to contribute to issues of strategy and performance
and to scrutinise the performance of management.

Atalaya’s decisions are predominantly made by achieving a
consensus at Board meetings. In exceptional circumstances,
decisions may be taken by the majority of Board members.

The Board is scheduled to meet at least 8 times a year, and at
such other times as are necessary to discharge its duties. The
Board met a total of 12 times in 2018. Meetings occurred in
person and by teleconference.

BoD

Held

AFRC

Held

n.a.

Attended

CGNCC

Held

n.a.

Attended

n.a.

PRC

Held

n.a.

Attended

n.a.

Attended

n.a.

R. Davey

A. Lavandeira

D. Barber

H. Barma

J. Fernández

H. Liu

J. Lamb

J. Sierra Lopez

S. Scott

Corporate governance reportAtalaya Mining Plc.annual report 201849

2 0 1 9 A NNU A L GE NE R A L ME E T IN G

IND E MNIF IC AT IO N O F DIR E C T O R S A ND O F F IC E R S

Atalaya’s AGM will be held on 27 June 2019 at 11:00h in
London (United Kingdom). The business of the meeting will be
conducted in accordance with regulatory requirements and
standards. The Chairman of the Board and the Chairmen of
the Committees will be available to answer questions put to
them by shareholders at the meeting.

During the year, the Company held insurance to indemnify
Directors. The Company Secretary and its executive officers
against liabilities incurred in the conduct of their duties to the
extent permitted under applicable legislation.

Audit and Financial
Risk Committee
report

T HE R O L E O F T HE A F R C

The Company’s Audit and Financial
Risk Committee (“AFRC”) is responsible
for ensuring that appropriate financial
reporting procedures are properly
maintained and reported on, for
meeting with the Group’s auditors and
reviewing their reports on the Group’s
financial statements and the internal
controls and for reviewing key financial
risks.

The AFRC is responsible for assisting
the Board in overseeing the indepen-
dence of the external auditors and fulfi-
lling the Boards’ statutory and fiduciary
responsibilities relating to:

> Financial reporting;

> Reviewing and assessing the

Company’s business and financial
risk management process, including
the adequacy of the overall internal
control environment and controls in
selected areas representing signifi-
cant risk; and

> External Audit.

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To fulfil these functions the AFRC
shall have the following duties and
responsibilities:

> To review the quality and integrity
of all published financial state-
ments and reports including the
annual Management Discussion and
Analysis report (if applicable) and
quarterly earnings press releases
issued by the Company, prior to
the Company publicly disclosing
the information, as well as all other
material continuous disclosure
documents and analysis with a view
to making a recommendation to the
Board.

> To review estimates and judge-

ments that are material to reported
financial information and consider
the quality and acceptability of the
Company’s accounting policies and
procedures and the clarity of disclo-
sure in financial statements.

> To ensure compliance by the

Company with legal and regulatory
requirements related to financial
reporting.

> To review and to recommend to the
Board the nomination and appoint-
ment of the external auditor for the
purposes of preparing or issuing
an auditors’ report or performing
other audit, review or attest services
and to recommend to the Board
the compensation of the external
auditor.

> To review the qualifications, perfor-
mance and independence of the
external auditor, to consider the
auditor’s recommendations and
manage the relationship with the
auditor, which includes meeting with
the external auditor as required in
connection with the audit services
provided and to review the engage-
ment letter of the external auditor.

> To oversee the work of the external
auditor engaged for the purposes
of preparing or issuing an auditor’s
report or performing other audit,
review or attest services for the
Company, including the resolution
of disagreements between mana-
gement and the external auditor
regarding financial reporting.

Corporate governance reportAtalaya Mining Plc.annual report 2018 > To meet with the external auditor to
discuss the annual financial report
and any transaction referred to in
the Board Charter.

> To provide the external auditor

with the opportunity to meet with
the AFRC without management
present at least once per year for the
purpose of discussing any issues.

> To review the quality and integrity
of the internal controls and accoun-
ting procedures of the Company
including reviewing the Company’s
procedures for internal control.

> To identify risks inherent in the busi-
ness of the Company and to review
the Company’s risk management
procedures.

> To review and approve the

Company’s hiring policies regarding
partners, employees and former
partners and employees of the
present and former external auditor
of the Company.

> To review any significant, including
any pending, transactions outside
the Company’s ordinary course of
business and any pending litigation
involving the Company.

> To review and monitor manage-

ment’s responsiveness to external
audit findings or any regulatory
authority.

> To report to the Board of Directors,
who in turn may refer the matter to
the Corporate Governance, Nomina-
ting and Compensation Committee,
any improprieties or suspected
improprieties with respect to
accounting and other matters that
affect financial reporting or the
integrity of the business.

In addition, the AFRC shall establish
procedures for the receipt, retention
and treatment of complaints (including

t h e a f r c s h a l l
e s t a b l i s h
p r o c e d u r e s f o r t h e
r e c e i p t , r e t e n t i o n
a n d t r e a t m e n t
o f c o m p l a i n t s
r e c e i v e d b y a t a l a y a
m i n i n g r e g a r d i n g
r i s k m a n a g e m e n t ,
l e g a l / r e g u l a t o r y
c o m p l i a n c e ,
a c c o u n t i n g , i n t e r n a l
a c c o u n t i n g c o n t r o l s
o r a u d i t i n g .

“whistleblowing” complaints) received
by Atalaya Mining regarding risk mana-
gement, legal/regulatory compliance,
accounting, internal accounting
controls or auditing. This is to include
a process for confidential anonymous
complaints by employees or other
stakeholders.

The AFRC comprises three members
all of whom are non-executive and
Independent. The current member-
ship of the committee is Dr. H. Barma
(Chairman), Mr. R. Davey and Mr. S.
Scott. The secretary, CEO and CFO and
external auditors also attend in when
requested by the Committee.

2018 REVIEW

The AFRC met five times during 2018.
Four meetings were timed to coincide
with approval of financial results for
publication with a fifth meeting held as
a planning meeting for the year-end.

During the year, the AFRC maintained
regular dialogue with management

as well as the external auditors, both
within and outside of formal commi-
ttee meetings. The principal matters
considered by the AFRC during the year
and in its discussions with mana-
gement and the external auditors
included:

> Review and approval of the

quarterly, half yearly and full year
financial results.

Impact of new accounting standards
and guidance, in particular IFRS 9
“Financial Instruments” and IFRS
15 “Revenue for Contracts with
Customers”.

> Key accounting and audit matters
for 2018 including the Astor Defe-
rred Consideration and Revenue
Recognition.

> A workshop on treatment of

stripping costs, to ensure that the
Group’s accounting policy remains
in line with best practice and reflects
the operational reality of the Riotinto
mining operation.

> An internal evaluation of the AFRC’s
performance with feedback from
board members, senior manage-
ment and the external auditors.

> A review of the AFRC’s Charter

to ensure that it remained fit for
purpose and that the AFRC complied
with its responsibilities.

—

Hussein Barma
Chairman of Audit and Financial
Risk Committee
3 April 2019

Corporate governance reportAtalaya Mining Plc.annual report 201851

Corporate
Governance,
Nominating and
Compensation
Committee Report

T HE R O L E O F T HE C GN C C

The Company’s Corporate Gover-
nance, Nominating and Compensation
Committee (“CGNCC”) is, among other
things, responsible for reviewing the
performance of the executives, setting
their remuneration, determining the
payment of bonuses, considering the
grant of options under any share option
scheme and, in particular, the price per
share and the application of perfor-
mance standards which may apply to
any such grant.

Remuneration arrangements are
aligned to support the implementation
of the Company strategy and effective
risk management for the medium to
long-term. The remuneration commi-
ttee ensures that this is done and takes
into account the views of shareholders.

The Committee makes recommenda-
tions for Board review. The Committee
shall have such powers and duties
as may be conferred on it from time
to time by resolution of the Board. In
addition, the Committee shall have
the following specific functions and
responsibilities:

> The Committee shall periodically
review and, if advisable, approve
and recommend for Board approval
the compensation paid to Directors.

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> At least annually, and prior to the
nomination or appointment of
potential candidates, the Committee
shall review the competencies, skills,
experience and areas of expertise
of the Board on an individual and
collective basis. Based on this
review, the Committee shall identify
areas where additional competency,
skill, experience or expertise would
be of benefit to Atalaya Mining.

> As required, the Committee shall
identify and, if advisable, recom-
mend to the Board for approval,
potential candidates for nomination
or appointment to the Board having
regard to the results of the review
referred to above. The Board should
consider whether or not each new
nominee can devote sufficient time
and resources to his or her duties as
a Committee member.

> The Committee shall periodically
conduct an assessment of the
contribution and effectiveness of
the Board, the Directors, each Board
Committee and the Chairman of
the Board against their respective
mandate, charters or other criteria
the Committee considers appro-
priate. The Committee shall report
its findings to the Board and, based
on those findings, recommend any
action plans that the Committee
considers appropriate.

> The Committee shall oversee the
development of any orientation
programmes for new Directors. The
Committee shall periodically review
any such programme and approve
changes it considers appropriate.

> The Committee shall periodically
review Atalaya Mining’s corporate
governance practices and policies.
As part of its review, the Committee
shall take into account regulatory
requirements and best practices,
including the UK Corporate Gover-
nance Code and QCA guidelines.
The Committee shall report the
results of its review, including any
recommended changes to existing
practices, to the Board in a timely
manner.

> The Committee will also esta-

blish and maintain a complaints
programme to facilitate (1) the
receipt, retention and treatment
of complaints received by the
Company regarding its Accounting
Standards, violations of the Code of
Business Conduct and Ethics and
the Anti-Bribery and Corruption
Policy, breaches in compliance with
applicable laws including relating to
health and safety or the environment
and (2) the confidential, anonymous
submission by employees of the
Company of any complaints made in
these areas.

Corporate governance reportAtalaya Mining Plc.annual report 201852

There were no further option grants
between the balance sheet date and
the date of this report. Options granted
on 20 Mar 2014 included in the table
above have expired at the date of this
report.

Options expire five years after grant
date and are exercisable at the exercise
price in whole or in part up to one third
in the first year from the grant date, two
thirds in the second year from the grant
date and the balance thereafter.

all senior management reporting
directly to the CEO.

> The Committee shall periodically
review and, if advisable, approve
and recommend for Board approval
a succession and emergency
preparedness plan for all senior
management reporting directly to
the CEO. Upon the vacancy of such
senior management personnel, the
Committee may make a replacement
recommendation for Board approval
based on the succession plan.

> The Committee shall periodically

review the Company’s existing share
option plan and make any recom-
mendations to the Board regarding
the plan as it considers advisable.
The Committee shall also review
any proposed equity compensation
grants (other than pursuant to the
existing plan), programmes or plans.

The CGNCC comprises four members
all of whom are non-executive and
three are Independent. The current
membership of the committee is Mr. S.
Scott (Chairman), Mr. R. Davey, Dr. H.
Barma and Mr. D. Barber.

DIRECTORS’ SHARE OPTIONS

The Directors to whom options over
ordinary shares have been granted and
the number of ordinary shares subject
to such options (post share consoli-
dation figures) as at the balance sheet
date are as follows:

Grant date

20 Mar. 2014

23 Feb. 2017

Expiration date

Exercise price

A. Lavandeira

19 Mar. 2019

22 Feb. 2022

360 p

144 p

200,000

150,000

350,000

> At least annually, the Committee
shall evaluate each Director and
each Audit and Financial Risk
Committee member against the
independence criteria established
by the UK Corporate Governance
Code and report the results to the
Board.

> The Committee shall review, in

conjunction with management, the
corporate governance disclosure
for Atalaya Mining’s annual report,
notice of shareholders meetings and
other regulatory and shareholder
reports.

> The Committee shall periodically
review and, if advisable, approve
and recommend for Board approval
performance goals for the CEO in
light of the Company’s corporate
goals and objectives.

> The Committee shall periodically
evaluate the performance of the
Chief Executive Officer in relation to
his or her performance goals. The
Chief Executive Officer evaluation
shall be conducted in conjunction
with the Chairman of the Board and
shall be presented to the Board for
its review.

> The Committee shall periodically
review, and, if advisable, approve
and recommend for Board approval
the Chief Executive Officer’s
compensation package. The
compensation package recommen-
dation shall be based on the CEO’s
evaluation, as well as other factors
and criteria as may be determined
by the Committee from time to time.

> The Committee shall, as required,
review and, if advisable, approve
and recommend for Board approval
the appointment, compensation
and other terms of employment of

Corporate governance reportAtalaya Mining Plc.annual report 201853

SUBSTANTIAL SHARE INTERESTS

The Shareholders holding more than
3% of the share capital of the Company
as at the date of this report were:

Urion Holdings (Malta) Ltd (subsidiary of Trafigura)

Yanggu Xiangguang Copper Co. Ltd

Liberty Metals & Mining Holdings LLC

Orion Mine Finance (Master) Fund I LP

Majedie Asset Management Limited

Ordinary shares 000’s

30,821

30,706

19,579

18,787

9,067

22.44

22.36

14.26

13.68

6.60

22.44
%

Urion
Holdings
(Malta)

22.36
%

14.26
%

Yanggu
Xiangguang
Copper

Liberty Metals
& Mining
Holdings

13.68
%

Orion Mine
Finance
(Master)

6.60
%

Majedie
Asset
Management

CORPORATE GOVERNANCE

The Directors comply with TSX and
AIM regulations and Cyprus Company
Law. The Board remains accountable to
the Company’s shareholders for good
corporate governance.

DIRECTORS’ EMOLUMENTS

In compliance with the disclosure
requirements of the listing require-
ments of AIM and TSX, the aggregate
remuneration paid to the directors of
Atalaya Mining Plc for the year ended 31
December 2018 is set out below:

(Euro 000’s)

31 Dec 2018

Executive directors

A. Lavandeira

Non-executive directors

R. Davey

D. Barber

H. Barma

J. Fernández

J. Lamb

H. Liu

J. Sierra Lopez

S. Scott

Short term benefits

Share based payments

Salary & fees

Bonus

Incentive options*

Bonus shares**

468

280***

75****

921

280

Total

787

1,240

* No new options granted in 2018.

** There were no bonus shares granted during 2018.

*** The amount relates to the approval of the performance bonus for 2017 by the BoD following the proposal of the CGNC Committee. During 2018, the Group has
expensed the same amount for the performance bonus of 2018 which is not included in the table. The amount is yet to be approved by the BoD. There is no certain
or guarantee that the BoD will approve a similar amount for 2018 performance.

**** Includes €13k paid to the Canadian Pension Plan for fees related to previous years.

Corporate governance reportAtalaya Mining Plc.annual report 201854

DIRECTORS’ INTERESTS

The interests of the Directors and their immediate families, (all of which are beneficial unless otherwise stated) and of persons
connected with them, in Ordinary Shares, as at 31 December 2018 and 2017, are as follows:

Name

R. Davey

A. Lavandeira

D. Barber(1)

H. Barma

J. Fernández(2)

H. Liu(3)

J. Lamb(4)

J. Sierra Lopez

S. Scott

2018

2817

Nr. of existing ordinary shares

% of issued share capital

Nr. of existing ordinary shares

% of issued share capital

160,000

19,578,947*

30,821,213*

31,150,943**

18,786,609*

26,666

0.12%

14.26%

22.44%

22.68%

13.68%

0.02%

160,000

19,578,947*

30,821,213*

31,150,943**

18,786,609*

26,666

0.12%

14.48%

22.79%

23.03%

13.89%

0.02%

(1) Liberty Metals & Mining Holdings LLC.

(4) Orion Mine Finance (Master) Fund I LP.

(2) Urion Holdings (Malta) Ltd.

* Shares held by the companies the directors represent.

(3) Yanggu Xiangguang Copper Co. Ltd.

** includes 444,711 shares held personally by Mr. Liu. No movements during 2018.

FY2018 REVIEW

The Committee, this year, has had a
large number of discussions as Atalaya
increased the operations of the mine
and as targets are reached, although this
is not reflected in the number of formal
meetings that Atalaya. The Company
invited Field Fisher into their meetings to
support all decisions from the Commi-
ttee to be proposed to the Board.

Atalaya keeps the balance and member-
ship of its Board under review and no
new appointments were made during
the year. All Directors were re-elected at
the last Annual General Meeting during
2018.

Atalaya always bases their remuneration
packages in comparison with their peers
in the mining sector and in companies
of similar size and similar financials.

—

Stephen Scott
Chairman of Corporate Governance,
Nominating and Compensation
Committee
3 April 2019

Corporate governance reportAtalaya Mining Plc.annual report 201855

Physical Risks
Committee Report

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T HE R O L E O F T HE P R C

The function of the PRC is oversight.
It is recognised that members of the
PRC who are Non-Executive Directors
are not full-time employees of the
Company and generally do not repre-
sent themselves as experts in the fields
of safety, health, environment, security
or risk management. As such, it is not
the responsibility of the PRC personally
to conduct safety, health, environment,
security or risk reviews.

Committee members are entitled to
rely on Atalaya Mining Management
with respect to matters within their
responsibility and on external profes-
sionals on matters within their areas of
expertise.

Committee members may assume the
accuracy of information provided by
such persons, so long as the members
are not aware of any reasonable
grounds upon which such reliance or
assumption may not be appropriate.

Management is responsible for imple-
menting, managing and maintaining
appropriate enterprise-wide safety,
health, environment, security and risk
management systems, policies and
procedures, reporting protocols and
internal controls that are designed to
ensure compliance with applicable
laws and regulations. Management is
also responsible for the preparation,
presentation and integrity of the infor-
mation provided to the Committee.

The PRC comprises three members
all of whom are non-executive and
Independent. The current member-
ship of the committee is Dr. J. Sierra
(Chairman), Mr. R. Davey and Mr. S.
Scott.

FY2018 REVIEW

re-start in early 2016, the Company
has had to ensure that employees and
contractors have learnt to operate
in accordance with its operating
standards. Health and safety is a key
priority to ensure a safe working envi-
ronment and the Company is focused
on ensuring it meets all regulations and
assesses risk factors on a regular basis.

I would like to thank in particular the
safety department for their contribu-
tions and suggestions to continually
make our operations safer. There is no
excuse for putting lives on the line and
without the help of the safety depart-
ment Atalaya could never make the
mine the safest it can be.

The PRC had three meetings in the year
which covered a number of issues. This
included meetings on site. As Atalaya’s
operation at Rio Tinto has only been
in operation for three years since the

—

Dr. José Sierra López
Chairman of Physical Risks
Committee
3 April 2019

Corporate governance reportAtalaya Mining Plc.annual report 201856

CORPORATE
SOCIAL
RESPONSA-
BILIT Y

Corporate social responsabilityAtalaya Mining Plc.annual report 201857

Corporate social responsabilityAtalaya Mining Plc.annual report 201858

OVERVIEW

A T A L A Y A H A S I N T E G R A T E D C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y I N T O I T S

A C T I V I T I E S A T T H E P R O Y E C T O R I O T I N T O A N D S T R I V E S F O R E X C E L L E N T

S T A N D A R D S I N H E A L T H A N D S A F E T Y , L O O K I N G A F T E R T H E E N V I R O N M E N T

A N D H E L P I N G T H E C O M M U N I T Y.

T H E G R O U P E M P L O Y S H I G H L Y Q U A L I F I E D P E O P L E T O O V E R S E E I T S

C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y W I T H T H E S U P P O R T O F T H E B O A R D O F

D I R E C T O R S .

Corporate social responsabilityAtalaya Mining Plc.annual report 2018
59

OUR COMMUNITIES

A T A L A Y A I S C O M M I T T E D T O B E I N G A R E S P O N S I B L E C O R P O R A T E C I T I Z E N B Y M A N A G I N G

T H E E N V I R O N M E N T A L A N D S O C I A L I M P A C T O F I T S M I N I N G O P E R A T I O N S I N A

C O N S C I E N T I O U S A N D S E N S I T I V E M A N N E R .

Atalaya´s strategy is to ensure that relations with authorities, society and the environment are led by transparency in Atalaya´s
commercial activities, the appropriate degree of interaction with stakeholders and maximum responsibility and accountability in
all Atalaya´s operations. Atalaya is in touch with and has a vested interest in the surrounding area and the Board believes that the
mining operations it undertakes have a very positive impact on the area of influence. In addition, Atalaya is strongly committed to
supporting the efforts devoted to job creation and the development and diversification of the area. Atalaya collaborates with initia-
tives of an educational, welfare and sporting nature and has contributed with over €0.6 million in 2018.

Campillo case study

Challenge Malacate case study

In July 2018 Atalaya renewed its collaboration agree-
ments to contribute to the great work of welfare insti-
tutions, such as Cáritas, the Association of Relatives of
People with Alzheimer’s Disease and other dementias
(AFA-El Campillo) and the Protective Association
of People with Intellectual Disability of the area of
influence -ASPROMIN EL Campillo.

Municipality case study

During 2018 Fundacion Atalaya Riotinto contributed
€250,000 to the neighboring municipalities Nerva, El
Campillo, Campofrío and Berrocal, to develop cultural,
social, educational, environmental, and economic
development activities.

The signatories thus consolidate the cooperation
between the local communities and Atalaya which
promotes relationships of all kinds. Atalaya is respon-
sible for the development of the municipalities, and
recognises the importance of its investment. It is
committed to performing the administrative proce-
dures in the most efficient way. Atalaya maintains a
commitment to the sustainable development of its
operations. Thus, Atalaya supports initiatives of a
social and cultural nature and actively collaborates in
the economic diversification of the area.

A key CSR activity for Atalaya during the year was
Challenge Malacate. The Challenge is an initiative
aimed at promoting the entrepreneurial culture and
diversification of the industries present here. Fundación
Atalaya Riotinto together with other foundations in the
area, managed a process for submitting proposals to
select annually a single project that will receive a finan-
cial contribution of €25,000 for its implementation.

There were four finalists in the year 2018. The jury of
the “Challenge Malacate” announced the four finalists
projects in the first stage of this contest. In the second
stage an independent jury determined that the fina-
lists of the “Reto Malacate” selected from among the
10 candidates were: (i) Podiatry Clinic to open to the
public a new health care service in Zalamea La Real;
(ii) a Rural Self-sufficient Complex center for tourism,
environmental and sporting dynamics in Campofrío;
(iii) 3D printing that offers printing services with 3
Dimensional technology in Nerva; and (iv) Spacio
Drone for services and training in the drone sector in
Zalamea La Real.

The organisers commented: “This is the first competeti-
tion and Atalaya is pleased to see that it has stimulated
entrepeneurial excellence in the region. The proposals
encompased technology, commerce, sanitary services,
tourist products and energetic efficiency, etc., which
tells us that Atalaya interpreted correctly the objective
of diversity in the initiative”.

Corporate social responsabilityAtalaya Mining Plc.annual report 2018
60

Atalaya has a dedicated team of 28
personnel that work to ensure stability
in the environment, monitoring of
waste, water treatment and resto-
ration. Atalaya´s team managed to
reduce fresh water usage in 2018:
1,184,690 m³ compared with usage in
2017 of 1,989,952 m³. The reduction
aims to achieve a sustainable envi-
ronment where the use of fresh water
is minimised. Atalaya has spent over
€30,500 to improve water quality for
the area.

a t a l a y a h a s r e d u c e d
i t s q u i c k l i m e u s a g e
f o r w a t e r t r e a t m e n t
f r o m 2 , 0 2 0 t o n n e s i n
2 0 1 7 t o 1 , 2 8 9 t o n n e s
i n 2 0 1 8 , o r 3 6 . 2 % .

OUR
ARCHAEOLOGY

Atalaya has a team of archaeologists
that are working to document all
historical findings. During 2018 Atalaya
invested €201,800 in archaeology.
During 2018, Atalaya discovered five
large Roman households complete
with pots and individual rooms.

WATER
MANAGEMENT

Atalaya has reduced its quicklime
usage for water treatment from 2,020
tonnes in 2017 to 1,289 tonnes in 2018,
or 36.2%.

PROMOTING
TALENT

Atalaya is committed to achieving
its goal to provide benefits to these
regions it which it operates, without
compromising the ability of future
generations to meet their own needs
both economically and environmen-
tally. Atalaya endeavours to achieve
excellence in environmental perfor-
mance, abiding by all expected envi-
ronmental standards.

Atalaya, through its wholly owned
entities and foundation, frequently
organises site visits for engineering
schools and other mining professionals
to embed sustainability in its projects.

OUR HISTORY

The history of the mine has been a
crucial aspect in the development of
Proyecto Riotinto: As heir to hundreds
of years of mining legacy addressing
implementation with current criteria
has represented a great technical
challenge owing to previous activities
but Atalaya is committed to maintai-
ning the legacy of the mine.

At Proyecto Riotinto, Atalaya demons-
trates that it is possible to reconcile
mining with the conservation of the
environment and nature. In a territory
determined by its extensive mining
legacy, the new activity becomes a
lever of change to improve what was
affected by the impact of previous
operations.

For over 2,000 years, successive
civilisations have come to Riotinto
attracted by its mineral richness. Today
there is a wealth of cultural interest
and it is a source of attraction for many
visitors.

Corporate social responsabilityAtalaya Mining Plc.annual report 201861

FLORA AND
FAUNA

This year Atalaya spent €80,000 for its
local environment to prevent forest
fires. The money spent also went
towards the replanting of trees which
included Pines, Eucalyptus and Brezo
Andevolo (protected species) and in
maintaining nurseries for those replan-
tation´s. This summer 1,600 ha of pine
trees and eucalyptus burnt in a forest
fire close to Proyecto Riotinto. Atalaya
focused their efforts on restoring the
natural flora and fauna along with
preventing any more fires. Atalaya
supports the protection of a species of
flora called Erica Andevalis.

Atalaya also collaborates in looking
after a species of protected Lesser

implemented a comprehensive mana-
gement system as a basis for fulfilling
its commitments based on quality,
environment and security.

OUR SAFETY

During the year 2018 the total number
of hours worked at Proyecto Riotinto
amounted to 1.59 million hours, of
which 625,000 hours relates to Atalaya
personnel and 965,000 hours to
contractors.

Health and safety is a priority for
Atalaya. At Proyecto Riotinto, the
Company managed to exceed the
target set for the year. Using severity
index, a value of 0.56 was achieved,
30% lower than the target which
was 0.80, as well as a very significant
decrease on to the previous year, which
was 0.74. The severity index is an indi-
cator of the severity of accidents and
is established based on the number of
days lost.

To continue working to avoid accidents
and reduce frequency of accidents,
Atalaya defined in the last quarter
of the year a specific formative plan
(theoretical-practical) for 100% of the
workforce. The first training actions
referred to in this plan have taken place
during the month of December 2018
and will continue throughout 2019.

Since August 2018, Atalaya investigates
all accidents that have been incurred,
whether with lost time or not, in which
workers are affected, as well as all
potentially serious incidents. Atalaya
uses an analysis methodology of the “5
whys”, which allows us to know how to
establish corrective measures.

Horseshoe Bat (Rhinolophus Hippo-
sideros). The colony that Atalaya has
within the Proyecto Riotinto land is
the only known colony in the south of
Spain. Since Atalaya has operated the
mine its monitoring and management
has aided the growth of the species.

ATMOSPHERE

Atalaya is focused on and determined
to make sure that the air quality of
the area is affected the least amount
possible from its activities. During 2018,
Atalaya spent €150,600 on monitoring
and controlling the air quality of the
mine. Atalaya irrigates the mine perio-
dically to reduce the impact of dust in
the air.

OUR PEOPLE

Atalaya operates within a favou-
rable framework for labour relations
based on a non-discriminatory, equal
opportunities employment system,
that promotes and embraces diversity
and facilitates communication at all
levels of the Group. Atalaya provides a
healthy and safe working environment
by implementing world-class inter-
national practices and procedures.
Atalaya prioritises the use of local
expertise over employing from further
away. Over 70% of Atalaya´s workers
are local. Atalaya is a non-discrimina-
tory and fair employer interested in
having a balanced workforce in terms
of gender and ethnic diversity.

Atalaya promotes a business based
on continuous improvement, secu-
rity and technological innovation in
all its processes. The innovation and
development that Atalaya applies
to all its activities contributes to the
achievement of the business and the
creation of an efficient and sustainable
operation. The Riotinto project has

Corporate social responsabilityAtalaya Mining Plc.annual report 201862

FINANCIAL
STATEMENTS

Atalaya Mining Plc.Financial statementsannual report 201863

Atalaya Mining Plc.Financial statementsannual report 201864

INDEPENDENT
AUDITORS’ REPORT

To the Members of Atalaya Mining Plc

Report on the Audit of the Financial Statements

OPINION

We have audited the accompanying consolidated and
parent company financial statements of Atalaya Mining Plc
(the “Company”), and its subsidiaries (the “Group”), which
comprise the consolidated and parent company statements
of financial position as at 31 December 2018, and the conso-
lidated and parent company statements of comprehensive
income, changes in equity and cash flows for the year then
ended, and notes to the consolidated and parent company
financial statements, including a summary of significant
accounting policies.

In our opinion, the accompanying consolidated and parent
company financial statements give a true and fair view of the
consolidated and parent company financial position of the
Group and the Company as at 31 December 2018, and of the
consolidated and parent company financial performance and
cash flows of the Group and the Company for the year then
ended in accordance with International Financial Reporting
Standards (IFRSs) as issued by the IASB and also as adopted
by the European Union and the requirements of the Cyprus
Companies Law, Cap. 113.

BASIS FOR OPINION

We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibi-
lities for the Audit of the Consolidated and Parent Company
Financial Statements section of our report. We are indepen-
dent of the Group and the Company in accordance with the

International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants (IESBA Code) together
with the ethical requirements that are relevant to our audit of
the consolidated and parent company financial statements in
Cyprus, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
consolidated and parent company financial statements of the
current period. These matters were addressed in the context
of our audit of the consolidated and parent company financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit
addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Audi-
tor’s Responsibilities for the Audit of the Consolidated and
Parent Company Financial Statements section of our report,
including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond
to our assessment of the risks of material misstatement of
the consolidated and parent company financial statements.
The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis
for our audit opinion on the accompanying consolidated and
parent company financial statements.

Atalaya Mining Plc.Financial statementsannual report 201865

Key Audit Matters

Our response to the Key Audit Matters

Astor deferred consideration

Our approach in this area focused on the following procedures:

As of 31 December 2018, the deferred consideration
liability in respect of Astor amounts to €53m for the Group
and €9.1m for the Company (Note 2.17, 3.4(i) and 28).

The valuation of the Astor deferred consideration has
been identified as a key audit matter considering it is a
highly judgemental matter and the amounts involved are
significant. The litigation in the High Court and the Court
of Appeal has been concluded and in accordance with
the ruling, any “excess cash” generated by the subsidiary
Atalaya Riotinto Minera, S.L.U (“ARM”) must be used to
repay the deferred consideration. Atalaya have recognised
the total value of the provision at €53m and judgement
remains in the interpretation of “excess cash”.

IAS 37 requires the provision to be made using
management’s best estimate and discounted, where the
impact of doing so is material to the financial statements.
In order to determine the best estimate and assess if
discounting the liability is needed, management has
applied significant judgments and assumptions which are
disclosed in Note 3.4(i) and Note 28.

> We obtained an understanding of the issue through discussions with
management and from reading the Master Agreement, Final Court
Judgment, explanation from the Group’s external lawyers on the
definition and implication of “excess of cash” and the accounting paper
prepared by management;

> We obtained an update on the status of the legal proceedings through

discussions with management and the Group’s external lawyers.
Furthermore, we have obtained a letter of representation from the
lawyers;

> We analysed and assessed management’s judgements and assumptions
made to determine the best estimate of the liability for the Astor deferred
consideration, considering the interpretation of “excess of cash”, expected
timing of cash outflows, and management’s conclusion not to discount
the liability as the effect of discounting was not considered significant;

> We have assessed the valuation of the liability for the Astor deferred

consideration to ascertain that the IAS 37 requirements, specifically for
the measurement of provisions, have appropriately been considered;
and

> We assessed whether the consolidated and parent company financial
statements include complete and adequate disclosures in respect of
the Astor deferred consideration and related management judgements
(Notes 3.4(i) and 28).

Revenue recognition

Our approach focused on the following procedures:

During the year ended 31 December 2018 the Group
recognised revenue from operations of €189.5m. Refer to
Note 2.23, 4 and 5.

> We obtained an understanding of the key controls around the revenue

recognition process in order to assess whether it is designed to prevent,
detect or correct material misstatements in the reported revenue figures;

The significant value of revenue transactions and complex
terms under which title and control pass to the customer
increases the risk of cut-off errors. We have also identified
risks in relation to the calculation of the adjustment for
provisional pricing. In particular:

> Cut-off: the complexity of terms that define when

control is transferred to the customer, as well as the
high value of transactions, give rise to the risk that
revenue is not recognised in the correct period.

> Measurement: at each reporting period there are a

number of open invoices that are provisionally priced
using the concentrate sold and the forward pricing of
those sales. Estimation is used in the valuation of these
transactions and the income statement impact of the
mark to market movement is recorded as a fair value
gain/loss relating to provisional pricing, disclosed
separately in revenue included in the statement of
comprehensive income.

Due to the significance of revenue for the Group financial
statements, and since the calculations are based on
estimations and susceptible to potential manipulation,
we consider this to be a key audit matter.

> We analysed the terms and conditions of the sales contracts and

evaluated whether they have been accounted for in line with the Group’s
revenue recognition policy. We have reviewed revenue recognition
policies for compliance with the requirements of IFRS 15 Revenue from
contracts with customers (“IFRS 15”), which was adopted by the Group
with initial date of application 1 January 2018;

> For a risk-based sample, we performed detailed substantive testing
procedures over the revenue transactions. This included: agreeing
the main inputs to supporting evidence (such as provisional and final
invoices, shipments confirmation, market prices, agreements and
bank statements), recalculating the amounts invoiced and recorded as
revenue, performing cut off testing over the revenue recognition in the
correct period;

> For open sales where provisional pricing applied, we compared to

external sources the inputs used and recalculated the provisional price
adjustment to evaluate whether it was correctly measured;

> We considered and analysed the nature of any significant credits raised

post year-end to evaluate that revenue transactions were recorded at the
correct value in the relevant period; and

> We assessed whether the consolidated financial statements include
disclosures in respect of revenue and the provisional pricing in
accordance with the applicable IFRS (Notes 2.23, 4 and 5).

Atalaya Mining Plc.Financial statementsannual report 201866

OTHER INFORMATION

The Board of Directors is responsible for the other information.
The other information comprises the Management report,
Corporate Governance report, Company Overview, Corporate
Social Responsibility report and Letter from the Chairman but
does not include the consolidated and parent company finan-
cial statements and our auditor’s report thereon.

Our opinion on the consolidated and parent company finan-
cial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated and parent
company financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the consolidated
and parent company financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report in this regard.

RESPONSIBILITIES OF THE
BOARD OF DIRECTORS
AND THOSE CHARGED
WITH GOVERNANCE
FOR THE CONSOLIDATED
AND PARENT COMPANY
FINANCIAL STATEMENTS

The Board of Directors is responsible for the preparation of
consolidated and parent company financial statements that
give a true and fair view in accordance with International
Financial Reporting Standards as issued by the IASB and also
as adopted by the European Union and the requirements of
the Cyprus Companies Law, Cap. 113, and for such internal
control as the Board of Directors determines is necessary to
enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to
fraud or error.

the Group’s and the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the
Group or Company or to cease operations, or has no realistic
alternative but to do so.

Those charged with governance are responsible for overseeing
the Group’s and the Company’s financial reporting process.

AUDITOR’S
RESPONSIBILITIES
FOR THE AUDIT OF THE
CONSOLIDATED AND
PARENT COMPANY
FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about
whether the consolidated and parent company financial
statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material miss-
tatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
consolidated and parent company financial statements.

As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:

Identify and assess the risks of material misstatement of
the consolidated and parent company financial statements,
whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override
of internal control.

In preparing the consolidated and parent company financial
statements, the Board of Directors is responsible for assessing

> Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are

Atalaya Mining Plc.Financial statementsannual report 201867

appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Group’s
and Company’s internal control.

> Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by the Board of Directors.

> Conclude on the appropriateness of the Board of Directors’
use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncer-
tainty exists related to events or conditions that may cast
significant doubt on the Group’s and the Company’s ability
to continue as a going concern. If we conclude that a mate-
rial uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the conso-
lidated and parent company financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or
conditions may cause the Group and the Company to cease
to continue as a going concern.

> Evaluate the overall presentation, structure and content of
the consolidated and parent company financial statements,
including the disclosures, and whether the consolidated
and parent company financial statements represent the
underlying transactions and events in a manner that
achieves a true and fair view.

disclosure about the matter or when, in extremely rare circum-
stances, we determine that a matter should not be commu-
nicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.

REPORT ON OTHER LEGAL
REQUIREMENTS

Pursuant to the additional requirements of the Auditors Law of
2017, we report the following:

In our opinion, the Management report has been prepared
in accordance with the requirements of the Cyprus Compa-
nies Law, Cap. 113, and the information given is consis-
tent with the consolidated and parent company financial
statements.

In our opinion, and in the light of the knowledge and
understanding of the Group and its environment obtained
in the course of the audit, we have not identified material
misstatements in the Management report.

OTHER MATTER

> Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinion.

This report, including the opinion, has been prepared for and
only for the Company’s members as a body in accordance
with Section 69 of the Auditors Law of 2017 and for no other
purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to
whose knowledge this report may come to.

We communicate with those charged with governance regar-
ding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a state-
ment that we have complied with relevant ethical require-
ments regarding independence, and to communicate with
them all relationships and other matters that may reasonably
be thought to bear on our independence, and where appli-
cable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated and parent
company financial statements of the current period and are
therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public

The engagement partner on the audit resulting in this inde-
pendent auditor’s report is Stavros Pantzaris.

Stavros Pantzaris
Certified Public Accountant and Registered Auditor for and
on behalf of

Ernst & Young Cyprus Limited
Certified Public Accountants and
Registered Auditors
Nicosia, 3 April 2019

Atalaya Mining Plc.Financial statementsannual report 201868

Atalaya Mining Plc.Financial statementsannual report 2018Years ended 31 December 2018 and 2017

The Group 2018

The Company 2018

The Group 2017

The Company 2017

Consolidated and company statements
of comprehensive income

Notes

13,14

(Euro 000’s)

Revenue

Operating costs and mine site administrative expenses

Mine site depreciation and amortization

Gross profit

Administration and other expenses

Corporate depreciation

Share based benefits

Care and maintenance expenditure

Exploration expenses

Operating profit/(loss)

Other income

Net foreign exchange gain/(loss)

Interest income from financial assets at fair value

Interest income from financial assets at amortised cost

Finance costs

Profit/(loss) before tax

Tax

Profit / (loss) for the year

Profit / (loss) for the year attributable to:

Owners of the parent

Non-controlling interests

Basic earnings per share (EUR cents per share)

Fully diluted earnings per share (EUR cents per share)

Profit / (loss) for the year

Other comprehensive income:

Change in fair value of financial assets through other
comprehensive income ‘OCI’

Change in value of available-for-sale investments

189,476

(128,707)

(13,430)

47,339

(5,867)

(216)

(281)

(1,021)

1,323

(4,370)

(10)

39,954

(3,057)

158

1,613

(253)

41,543

(7,102)

34,441

34,715

(274)

34,441

117

13,615

2,569

13,284

(1,524)

11,760

25.4

25.1

(58)

Earnings per share from operations attributable to equity holders of the parent during the year:

Total comprehensive profit /(loss) for the year

34,383

11,702

Total comprehensive profit for the year attributable to:

Owners of the parent

Non-controlling interests

34,657

(274)

34,383

11,702

The notes on pages 76 to 127 are an integral part of these consolidated and Company financial statements.

1,015

(4,001)

(7)

(34)

(3,027)

264

1,635

(1,127)

-1,127

160,537

(114,687)

(16,664)

29,186

(4,356)

(7)

(152)

24,671

(2,212)

(579)

21,907

(3,696)

18,211

18,239

(28)

18,211

15.5

15.3

(132)

18,079

18,107

(28)

18,079

(132)

(1,259)

34,441

11,760

18,211

(1,127)

Atalaya Mining Plc.Financial statementsannual report 201870

Consolidated and company statements
of financial position

As at 31 December

(Euro 000’s)

ASSETS

Non-current assets

Property, plant and equipment

Intangible assets

Investment in subsidiaries

Trade and other receivables

Deferred tax asset

Current assets

Inventories

Trade and other receivables

Available-for-sale investments

Other financial assets

Cash and cash equivalents

Total assets

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital

Share premium

Other reserves

Accumulated losses

Non-controlling interests

Total equity

Liabilities

Non-current liabilities

Trade and other payables

Provisions

Deferred consideration

Current liabilities

Trade and other payables

Current tax liabilities

Total liabilities

Total equity and liabilities

Notes

The Group 2018

The Company 2018

The Group 2017

The Company 2017

257,376

71,951

249

7,927

337,503

10,822

23,688

33,070

67,651

405,154

13,372

314,319

12,791

(58,308)

282,174

4,200

286,374

6,519

53,000

59,564

57,271

1,945

59,216

118,780

405,154

3,899

290,104

294,003

6,689

826

7,586

301,589

13,372

314,319

5,845

(50,657)

282,879

9,117

8,069

1,524

9,593

18,710

301,589

199,458

73,700

212

10,130

283,500

13,674

34,213

129

42,856

90,872

374,372

13,192

309,577

6,137

(86,527)

242,379

4,474

246,853

5,727

52,983

58,784

67,983

752

68,735

127,519

374,372

3,693

242,824

129

34,410

277,363

281,056

13,192

309,577

5,687

(62,417)

266,039

9,100

5,917

15,017

281,056

The notes on pages 76 to 127 are an integral part of these consolidated and
company financial statements.

The consolidated and company financial statements were authorised for
issue by the Board of Directors on 3 April and were signed on its behalf.

—

Roger Davey
Chairman

—

Alberto Lavandeira
Managing Director

Atalaya Mining Plc.Financial statementsannual report 201871

Consolidated statements of changes
in equity

Years ended 31 December 2018 and 2017

Attributable to owners of the parent

l
a
t
i
p
a
c

e
r
a
h
S

)
2
(

m
u
i
m
e
r
P

e
r
a
h
S

)
1
(

s
e
v
r
e
s
e
r

r
e
h
t
O

s
e
s
s
o
l

d
e
t
a
l
u
m
u
c
c
A

g
n
i
l
l
o
r
t
n
o
c
-
n
o
N

t
s
e
r
e
t
n
i

y
t
i
u
q
e

l
a
t
o
T

11,632

277,238

5,667

(104,316)

190,221

1,560

33,182

(843)

18,239

(28)

18,211

(132)

450

152

(132)

18,239

18,107

(28)

18,079

34,742

(843)

(450)

152

34,742

(843)

152

4,502

(Euro 000’s)

Note

At 1 January 2017

Profit for the year

Change in value of available-for-sale investments

Total comprehensive income

Transactions with owners

Issue of share capital

Share issue costs

Depletion factor

Recognition of share-based payments

Non-controlling interests

At 31 December 2017 / 1 January 2018

13,192

309,577

6,137

(86,527)

242,379

4,474

246,853

Profit for the year

Change in fair value of financial assets through OCI

Total comprehensive income

Transactions with owners

Issue of share capital

Share issue costs

Depletion factor

Recognition of share-based payments

Recognition of non-distributable reserve

180

4,747

(5)

(58)

34,715

(274)

34,441

(58)

34,715

34,657

(274)

34,383

4,927

(5)

216

4,927

(5)

216

5,050

(5,050)

216

1,446

(1,446)

At 31 December 2018

13,372

314,319

12,791

(58,308)

282,174

4,200

286,374

(1) Refer to Note 24

(2) The share premium reserve is not available for distribution.

The notes on pages 76 to 127 are an integral part of these consolidated and company financial statements.

Atalaya Mining Plc.Financial statementsannual report 2018

Company statements of changes
in equity

(Euro 000’s)

At 1 January 2017

Loss for the year

Change in value of available-for-sale investments

Total comprehensive income

Issue of share capital

Share issue costs

Recognition of share-based payments

Years ended 31 December 2018 and 2017

Note

Share
capital

Share
premium(2)

Other
reserves(1)

Accumulated
losses

Total

11,632

277,238

1,560

33,182

(843)

5,667

(132)

152

(61,290)

233,247

(1,127)

(132)

(1,259)

34,742

(843)

152

At 31 December 2017/1 January 2018

13,192

309,577

5,687

(62,417)

266,039

Profit for the year

Change in fair value of financial assets through OCI

Total comprehensive income

Issue of share capital

Share issue costs

Recognition of share-based payments

180

4,747

(5)

(58)

216

11,760

(58)

11,702

4,927

(5)

216

At 31 December 2018

13,372

314,319

5,845

(50,657)

282,879

(1) Refer to Note 24

(2) The share premium reserve is not available for distribution.

Companies which do not distribute 70% of their profits after tax, as defined by the relevant tax law, within two years after the end of the relevant
tax year, will be deemed to have distributed as dividends 70% of these profits. Special contribution for defence at 17% will be payable on such
deemed dividends to the extent that the ultimate shareholders are both Cyprus tax resident and Cyprus domiciled. The amount of deemed distri-
bution is reduced by any actual dividends paid out of the profits of the relevant year at any time. This special contribution for defence is payable by
the Company for the account of the shareholders.The notes on pages 54 to 106 are an integral part of these consolidated and company financial
statements.

Atalaya Mining Plc.Financial statementsannual report 201873

Consolidated statements of cash flow

(Euro 000’s)

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax

Adjustments for:

Depreciation of property, plant and equipment

Amortisation of intangible assets

Recognition of share-based payments

Hedging income

Interest income

Interest expense

Unwinding of discounting

Legal provisions

Release of prior year provision

Gain on disposal of associate

Loss on disposal of intangibles

Impairment on available-for-sale investment

Unrealised foreign exchange loss on financing activities

Cash inflows from operating activities before working capital changes

Changes in working capital:

Inventories

Trade and other receivables

Trade and other payables

Derivative instruments

Deferred consideration

Provisions

Cash flows from operations

Interest paid

Tax paid

Net cash from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment

Purchases of intangible assets

Proceeds from sale of property, plant and equipment

Disposal of subsidiary

Purchase of other financial assets

Hedging income

Interest received

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of share capital

Listing and issue costs

Net cash from financing activities

Net (decrease) / increase in cash and cash equivalents

Cash and cash equivalents:

At beginning of the year

At end of the year

Years ended 31 December 2018 and 2017

Note

2018

2017

41,543

10,143

3,287

216

(71)

214

(86)

(117)

955

179

21,907

12,540

4,131

152

(205)

(22)

671

113

213

(49)

56,302

39,511

2,852

11,697

(10,334)

60,534

(214)

(4,987)

55,333

(63,216)

(2,492)

(75)

(7,479)

(2,653)

5,350

(215)

(733)

33,781

(671)

(2,610)

30,500

(20,220)

(2,694)

205

(65,712)

(22,678)

598

(5)

593

(9,786)

42,856

33,070

34,742

(843)

33,899

41,721

1,135

42,856

The notes on pages 76 to 127 are an integral part of these consolidated and company financial statements.

Atalaya Mining Plc.Financial statementsannual report 2018Company statements of cash flow

(Euro 000’s)

CASH FLOWS FROM OPERATING ACTIVITIES

Profit/(loss) before tax

Adjustments for:

Depreciation of property, plant and equipment

Share-based payments

Interest income

Interest income from interest-bearing intercompany loans

Loss on available-for-sale investment

Release of prior year provision

Gain on disposal of associate

Unrealised foreign exchange loss on financing activities

Cash inflows used in operating activities before working capital changes

Changes in working capital:

Increase in trade and other receivables

Increase in trade and other payables

Cash flows used in operations

Interest paid

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of property, plant and equipment

Interest received

Interest income from interest-bearing intercompany loans

Net cash from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of share capital

Listing and issue costs

Net cash from financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents:

At beginning of the year

At end of the year

Years ended 31 December 2018 and 2017

Note

2018

2017

13,284

(1,127)

(63)

(16,121)

(1,635)

(117)

209

(45)

(3)

(2,798)

(2,720)

(53,969)

2,077

(54,690)

16,121

16,184

4,927

(5)

4,922

(33,584)

34,410

826

(2,579)

3,846

(1,453)

1,635

1,644

34,742

(843)

33,899

34,090

320

34,410

The notes on pages 76 to 127 are an integral part of these consolidated and company financial statements.

Atalaya Mining Plc.Financial statementsannual report 201875

Atalaya Mining Plc.Financial statementsannual report 201876

NOTES TO THE
CONSOLIDATED AND
COMPANY FINANCIAL
STATEMENTS

1. INCORPORATION AND
SUMMARY OF BUSINESS

COUNTRY OF INCORPORATION

Atalaya Mining Plc (the “Company”) was incorporated in Cyprus
on 17 September 2004 as a private company with limited
liability under the Companies Law, Cap. 113 and was converted
to a public limited liability company on 26 January 2005. Its
registered office is at 1 Lampousa Street, Nicosia, Cyprus.

The Company was listed on AIM of the London Stock Exchange
in May 2005 under the symbol ATYM and on the TSX on 20
December 2010 under the symbol AYM. The Company conti-
nued to be listed on AIM and the TSX as at 31 December 2018.

Additional information about Atalaya Mining Plc is available at
www.atalayamining.com as per requirement of AIM rule 26.

PRINCIPAL ACTIVITIES

The Company owns and operates through a wholly-owned
subsidiary, “The Riotinto Project”, an open-pit copper mine
located in the Pyritic belt, in the Andalusia region of Spain,
approximately 65 km northwest of Seville.

In addition, the Company has a phased earn-in agreement up
to 80% ownership of “The Touro Project”, a brownfield copper
project in northwest Spain, which is currently at the permitting
stage.

The Company’s and its subsidiaries’ activity is to explore for
and develop metals production operations in Europe, with an
initial focus on copper.

CHANGED ON NAME AND SHARE CONSOLIDATION

Following the Company’s EGM on 13 October 2015, the change
of the name EMED Mining Public Limited to Atalaya Mining Plc
became effective on 21 October 2015. On the same day, the
consolidation of ordinary shares came into effect, whereby
all shareholders received one new ordinary share of nominal
value £0.075 for every 30 existing ordinary shares of nominal
value of £0.0025.

2. SUMMARY OF
SIGNIFICANT ACCOUNTING
POLICIES

The principal accounting policies applied in the preparation
of these consolidated and company financial statements
(hereinafter “financial statements”) are set out below. These

Atalaya Mining Plc.Financial statementsannual report 201877

policies have been consistently applied to all the years
presented, unless otherwise stated.

Standards (IFRS) that are relevant to its operations and are
effective for accounting periods beginning on 1 January 2018.

2.1 BASIS OF PREPARATION

(A) OVERVIEW

The financial statements of Atalaya Mining Plc have been
prepared in accordance with International Financial Reporting
Standards (“IFRS”). IFRS comprise the standards issued by the
International Accounting Standards Board (“IASB”) and IFRS
Interpretations Committee (“IFRICs”) as issued by the IASB.

Additionally, the financial statements have also been prepared
in accordance with the IFRS as adopted by the European
Union and the requirements of the Cyprus Companies Law,
Cap.113. For the year ending 31 December 2018, the standards
applicable for IFRS’s as adopted by the EU are aligned with the
IFRS’s as issued by the IASB.

The consolidated financial statements have been prepared
on a historical cost basis except for the revaluation of certain
financial instruments that are measured at fair value at the
end of each reporting period, as explained below.

The preparation of financial statements in conformity with
IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgment in the
process of applying the Group’s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the finan-
cial statements are disclosed in Note 3.4.

(B) GOING CONCERN

These financial statements have been prepared on the basis
of accounting principles applicable to a going concern which
assumes that the Group and the Company will realise its
assets and discharge its liabilities in the normal course of busi-
ness. Management has carried out an assessment of the going
concern assumption and has concluded that the Group and
the Company will generate sufficient cash and cash equiva-
lents to continue operating for the next twelve months.

2.2 CHANGES IN ACCOUNTING POLICY
AND DISCLOSURES

2.2.1 NE W A ND A ME ND E D S TA ND A R D S A ND
IN T E R P R E TAT IO N S

During the current year the Group and the Company adopted
all the new and revised International Financial Reporting

The Group and the Company applied IFRS 9 and IFRS 15 for
the first time from 1 January 2018. The nature and effect of
the changes as a result of adoption of these new accounting
standards are described below.

Several other amendments and interpretations apply for the
first time in 2018, but do not have a significant impact on the
consolidated financial statements of the Group. The Group has
not early adopted any standards, interpretations or amend-
ments that have been issued but are not yet effective.

IFRS 9 FINANCIAL INSTRUMENTS

IFRS 9 Financial Instruments addresses the classification,
measurement, and derecognition of financial assets and finan-
cial liabilities, introduces new rules for hedge accounting and
a new impairment model for financial assets.

Based on the assessment performed, the new guidance has
the following impacts on the classification and measurement
of its financial instruments.

> Classification and measurement of the embedded

derivatives arising from sales: The financial assets and
liabilities arising from the revaluation of provisional priced
contracts were previously disclosed separately in the
balance sheet as part of “Other financial assets/liabilities”.
Under IFRS 9, the embedded derivative is no longer sepa-
rated from the host contract and therefore the revaluation
of provisionally priced contract is disclosed within the
receivable of the host contract in “Trade and other recei-
vables” and classified as fair value through profit and loss.
An embedded derivative will often make a financial asset
fail the SPPI test thereby requiring the instrument to be
measured at fair value through profit or loss in its entirety.
This is applicable to the Group’s trade receivables (subject
to provisional pricing). No significant impact on measure-
ment on transition to IFRS 9.

> Classification and measurement of the Parent

Company participative loan: The Participative loan
was previously classified at amortised cost. Under IFRS 9
the classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Company’s business model for
managing them. In order for a financial asset to be classified
and measured at amortised cost or fair value through OCI,
it needs to give rise to cash flows that are ‘solely payments
of principal and interest (SPPI)’ on the principal amount
outstanding. The Participative loan is now classified as
fair value through profit and loss. No significant impact on
measurement on transition to IFRS 9.

Atalaya Mining Plc.Financial statementsannual report 201878

> Financial assets at fair value through Other Compre-
hensive Income (“OCI”): The equity instruments that
were classified as available-for-sale financial assets satisfy
the conditions for classification as at fair value through
other comprehensive income (FVOCI) and therefore there is
no impact in classification. Gains and losses accumulated
in other comprehensive income are not recycled to the
income statement.

Furthermore, under IFRS 9 there is no exception to carry
investments in entities at costs less any recognised impair-
ment and therefore, fair value will need to be calculated.
There are no other significant changes to the accounting
treatment of these assets.

Impairment: The new impairment model requires the
recognition of impairment provisions based on expected
credit losses (ECL) rather than only incurred credit losses as
is the case under IAS 39. The Group applies the simplified
approach and records lifetime expected losses on all trade
receivables. However, given the short term nature of the
Group’s receivables, there is not a significant impact in the
financial statements.

For the Parent Company, current and non-current recei-
vables (except for non-current assets at fair value through
profit and loss) are stated at amortised cost. A provision for
impairment of receivables is established using the expected
credit loss impairment model according IFRS 9. The amount
of the provision is the difference between the carrying
amount and the recoverable amount and this difference is
recognised in the income statement.

> Disclosures: The standard introduces expanded disclosure
requirements and changes in presentation included in this
report. The Group also assessed other changes introduced
by IFRS 9 that have no impact on the financial statements
as explained below:

> There is no impact on the accounting for financial liabilities,
as the new requirements of IFRS 9 only affect the accoun-
ting for financial liabilities that are designated at fair value
through profit or loss and the Group does not have any such
liabilities.

> No impacts in relation to derecognition of financial instru-
ments as the same rules have been transferred from IAS39
Financial Instruments: Recognition and Measurement.

IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS

The IASB has issued a new standard for the recognition of
revenue arising from contracts with customers. The new

revenue standard supersedes all current revenue recognition
requirements under IFRS.

The new standard is based on the principle that revenue is
recognised when control of a good or service transfers to a
customer. The Group evaluates recognition and measurement
of revenue based on the five-step model in IFRS 15 and has
not identified significant financial impacts, hence no adjust-
ments were recorded derived from the adoption of IFRS 15
other than certain reclassifications as explained below.

The Group adopted the new standard from 1 January 2018
applying the simplified transition method and modified
retrospective approach. Certain disclosures changed as a
result of the requirements of IFRS 15.

The key issues identified, and the Group’s views and perspec-
tive are set below:

The revaluation of provisionally priced contracts is
recorded as an adjustment to revenue. IFRS 15 does not
change the assessment of the provisional price adjustment,
but they are not considered within the scope of IFRS 15, and
consequently have to be disclosed separately (refer to Note 5).

Impact of shipping terms: The group sells a very small
portion of its products on CIF Incoterms and therefore the
Group is responsible for shipping services after the date at
which control of the copper passes to the customer. Under
IAS 18, these shipping services were not considered to be part
of the revenue transaction and thus the Group disclosed them
as selling expenses. However, under IFRS 15, the Group reclas-
sified the portion of these selling expenses relating to trans-
port of copper from the Group’s production plants to the ports
and to the customers, and reclassify those costs to cost of
sales. The shipping services reclassified for the period ending
31 December 2018 amounted to €1.0 million. The Group
assessed the amount of costs related to shipping services
which are considered a separate performance obligation
under IFRS 15 and therefore, a portion of the revenue currently
recognised when the title has passed to the customer will
need to be deferred and recognised as the shipping services
are subsequently provided. Under IFRS 15 the costs related to
shipping services are considered a separate performance obli-
gation and therefore they should be deferred and recognised
as the shipping services are subsequently provided. Based on
the Group’s assessment, the shipping services being provided
at the beginning and end of the reporting period are immate-
rial and therefore these have not been deferred. The total
shipping services recognised during the year as a separate
performance obligation under IFRS 15 amounts to €1.0 million
and have been disclosed in Note 5.

Atalaya Mining Plc.Financial statementsannual report 201879

IFRS 2: CLASSIFICATION AND MEASUREMENT OF SHARE BASED PAYMENT
TRANSACTIONS (AMENDMENTS)

The Amendments are effective for annual periods beginning
on or after 1 January 2018 with earlier application permitted.
The Amendments provide requirements on the accounting
for the effects of vesting and non-vesting conditions on the
measurement of cash-settled share-based payments, for
share-based payment transactions with a net settlement
feature for withholding tax obligations and for modifications
to the terms and conditions of a share-based payment that
changes the classification of the transaction from cash-settled
to equity-settled. As the Company does not have cash settled
awards, the amendments to IFRS 2 do not impact the Consoli-
dated and Company’s financial statements.

2.2.2 S TA ND A R D S I S S UE D B U T N O T Y E T
E F F E C T I V E

The new and amended standards and interpretations that
are issued, but not yet effective, up to the date of issuance of
the financial statements are disclosed below. Some of them
were adopted by the European Union and others not yet.
The Group and the Company intend to adopt these new and
amended standards and interpretations, if applicable, when
they become effective.

IFRS 16 – LEASES

The new standard on leases that replaces IAS 17, IFRIC 4,
SIC-15 and SIC-27. Under the provisions of the standard most
leases, including the majority of those previously classified as
operating leases, will be brought onto the statement of finan-
cial position, as both a right-of-use asset and a largely offse-
tting lease liability. The right-of-use asset and lease liability
are both based on the present value of lease payments due
over the term of the lease, with the asset being depreciated in
accordance with IAS 16 ‘Property, Plant and Equipment’ and
the liability increased for the accretion of interest and reduced
by lease payments.

Atalaya has completed an initial assessment of the potential
impact of IFRS 16 on its consolidated financial statements but
has not yet completed its detailed assessment. The actual
impact of applying IFRS 16 on the consolidated financial state-
ments in the period of initial application will depend on future
economic conditions, including the Group´s borrowing rate at
1 January 2019, the composition of Atalaya´s borrowing rate at
1 January 2019, the composition of Atalaya´s portfolio at that
date, its latest assessment of whether it will exercise any lease
renewal options, and the extent to which Atalaya chooses to
use practical expedients and recognition exemptions. The

directors continue to consider the potential effects on the
Group’s financial statements and do not currently expect that
there will be a material impact, given the current market and
internal conditions.

IFRS 9: PREPAYMENT FEATURES WITH NEGATIVE COMPENSATION
(AMENDMENT)

These Amendments should be applied retrospectively and are
effective from 1 January 2019, with earlier application permi-
tted, These Amendments have no impact on the consolidated
financial statements of the Group..

Amendment in IFRS 10 Consolidated Financial Statements and
IAS 28 Investments in Associates and Joint Ventures: Sale or
Contribution of Assets between an Investor and its Associate
or Joint Venture.

The amendments address an acknowledged inconsistency
between the requirements in IFRS 10 and those in IAS 28,
in dealing with the sale or contribution of assets between
an investor and its associate or joint venture. The main
consequence of the amendments is that a full gain or loss is
recognized when a transaction involves a business (whether it
is housed in a subsidiary or not). A partial gain or loss is recog-
nized when a transaction involves assets that do not consti-
tute a business, even if these assets are housed in a subsi-
diary. In December 2015 the IASB postponed the effective date
of this amendment indefinitely, but an entity that early adopts
the amendments must apply them prospectively. The Group
will apply these amendments when they become effective.

IFRS 17 INSURANCE CONTRACTS

In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS
17), a comprehensive new accounting standard for insurance
contracts covering recognition and measurement, presenta-
tion and disclosure. Once effective, IFRS 17 will replace IFRS 4
Insurance Contracts (IFRS 4) that was issued in 2005. IFRS 17
applies to all types of insurance contracts (i.e., life, non-life,
direct insurance and re-insurance), regardless of the type of
entities that issue them, as well as to certain guarantees and
financial instruments with discretionary participation features.
A few scope exceptions will apply. The overall objective of IFRS
17 is to provide an accounting model for insurance contracts
that is more useful and consistent for insurers. In contrast to
the requirements in IFRS 4, which are largely based on grand-
fathering previous local accounting policies, IFRS 17 provides
a comprehensive model for insurance contracts, covering all
relevant accounting aspects. The core of IFRS 17 is the general
model, supplemented by:

Atalaya Mining Plc.Financial statementsannual report 201880

> A specific adaptation for contracts with direct participation

features (the variable fee approach).

benefits offered under the plan and the plan assets after
that event.

> A simplified approach (the premium allocation approach)

mainly for short-duration contracts.

IFRS 17 is effective for reporting periods beginning on or after
1 January 2021, with comparative figures required. Early
application is permitted, provided the entity also applies IFRS
9 and IFRS 15 on or before the date it first applies IFRS 17. This
standard is not applicable to the Group.

THE IASB HAS ISSUED THE ANNUAL IMPROVEMENTS TO IFRSS 2015 –
2017 CYCLE, WHICH IS A COLLECTION OF AMENDMENTS TO IFRSS.

The amendments are effective for annual periods beginning
on or after 1 January 2019 with earlier application permitted.
These annual improvements have not yet been endorsed by
the EU. Management is currently evaluating the effect of these
standards or interpretations on its financial statements.

(i). IFRS 3 Business Combinations and IFRS 11 Joint

Arrangements: The amendments to IFRS 3 clarify that
when an entity obtains control of a business that is a joint
operation, it remeasures previously held interests in that
business. The amendments to IFRS 11 clarify that when
an entity obtains joint control of a business that is a joint
operation, the entity does not remeasure previously held
interests in that business.

(ii). IAS 12 Income Taxes: The amendments clarify that

the income tax consequences of payments on financial
instruments classified as equity should be recognized
according to where the past transactions or events that
generated distributable profits has been recognized. The
standard has been endorsed by EU. The adoption of
these amendments are effective for accounting periods
beginning on 1 January 2019. The Group has assessed that
these amendments have no material effect on the Group
and the Company financial statements.

AMENDMENTS TO IAS 19: PLAN AMENDMENT, CURTAILMENT OR
SETTLEMENT

The amendments to IAS 19 address the accounting when a
plan amendment, curtailment or settlement occurs during a
reporting period. The amendments specify that when a plan
amendment, curtailment or settlement occurs during the
annual reporting period, an entity is required to:

> Determine current service cost for the remainder of the
period after the plan amendment, curtailment or settle-
ment, using the actuarial assumptions used to remea-
sure the net defined benefit liability (asset) reflecting the

> Determine net interest for the remainder of the period after
the plan amendment, curtailment or settlement using: the
net defined benefit liability (asset) reflecting the benefits
offered under the plan and the plan assets after that event;
and the discount rate used to remeasure that net defined
benefit liability (asset).

The amendments also clarify that an entity first determines
any past service cost, or a gain or loss on settlement, without
considering the effect of the asset ceiling. This amount is
recognised in profit or loss. An entity then determines the
effect of the asset ceiling after the plan amendment, curtail-
ment or settlement. Any change in that effect, excluding
amounts included in the net interest, is recognised in other
comprehensive income.

The amendments apply to plan amendments, curtailments,
or settlements occurring on or after the beginning of the first
annual reporting period that begins on or after 1 January 2019,
with early application permitted. These amendments will
apply only to any future plan amendments, curtailments, or
settlements of the Group.

AMENDMENTS TO IAS 28: LONG-TERM INTERESTS IN ASSOCIATES AND
JOINT VENTURES

The amendments clarify that an entity applies IFRS 9 to long-
term interests in an associate or joint venture to which the
equity method is not applied but that, in substance, form part
of the net investment in the associate or joint venture (long-
term interests). This clarification is relevant because it implies
that the expected credit loss model in IFRS 9 applies to such
long-term interests.

The amendments also clarified that, in applying IFRS 9, an
entity does not take account of any losses of the associate or
joint venture, or any impairment losses on the net investment,
recognised as adjustments to the net investment in the asso-
ciate or joint venture that arise from applying IAS 28 Invest-
ments in Associates and Joint Ventures. The amendments
should be applied retrospectively and are effective from 1
January 2019, with early application permitted. Management
is currently evaluating the effect of these standards or inter-
pretations on its financial statements.

IFRIC INTERPETATION 23: UNCERTAINTY OVER INCOME TAX TREATMENTS

The Interpretation is effective for annual periods beginning
on or after 1 January 2019 with earlier application permitted.
The Interpretation addresses the accounting for income taxes

Atalaya Mining Plc.Financial statementsannual report 201881

when tax treatments involve uncertainty that affects the
application of IAS 12. The Interpretation provides guidance
on considering uncertain tax treatments separately or
together, examination by tax authorities, the appropriate
method to reflect uncertainty and accounting for changes in
facts and circumstances. This Interpretation has not yet been
endorsed by the EU. Management is currently evaluating the
effect of these standards or interpretations on its financial
statements.

IFRS 3: BUSINESS COMBINATIONS (AMENDMENTS)

The IASB issued amendments in Definition of a Business
(amendments to IFRS 3) aimed at resolving the difficulties that
arise when an entity determines whether it has acquired a
business or a group of assets. These amendments are effec-
tive for business combinations for which the acquisition date
is in the first annual reporting period beginning on or after 1
January 2020 and to asset acquisitions that occur on or after
the beginning of that period, with earlier application permi-
tted. The Group does not expect these amendments to have a
material impact on its results and financial position.

IAS 1 PRESENTATION OF FINANCIAL STATEMENTS AND IAS 8 ACCOUNTING

POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS:

DEFINITION OF ‘MATERIAL’ (AMENDMENTS)

The amendments are effective for annual periods beginning
on or after 1 January 2020 with earlier application permitted.
They clarify the definition of material and how it should be
applied. The new definition states that, ’Information is mate-
rial if omitting, misstating or obscuring it could reasonably
be expected to influence decisions that the primary users of
general purpose financial statements make on the basis of
those financial statements, which provide financial informa-
tion about a specific reporting entity’. In addition, the expla-
nations accompanying the definition have been improved.
The amendments also ensure that the definition of material is
consistent across all IFRS Standards. The Group and Company
does not expect these amendments to have a material impact
on its results and financial position.

Conceptual Framework in IFRS standards

The IASB issued the revised Conceptual Framework for Finan-
cial Reporting on 29 March 2018. The Conceptual Framework
sets out a comprehensive set of concepts for financial repor-
ting, standard setting, guidance for preparers in developing
consistent accounting policies and assistance to others in
their efforts to understand and interpret the standards. IASB
also issued a separate accompanying document, Amend-
ments to References to the Conceptual Framework in IFRS

Standards, which sets out the amendments to affected stan-
dards in order to update references to the revised Conceptual
Framework. Its objective is to support transition to the revised
Conceptual Framework for companies that develop accoun-
ting policies using the Conceptual Framework when no IFRS
Standard applies to a particular transaction. For preparers
who develop accounting policies based on the Conceptual
Framework, it is effective for annual periods beginning on
or after 1 January 2020. The Group and Company does not
expect this framework to have a material impact on its results
and financial position.

2.3 CONSOLIDATION

( A ) B A S I S O F C O N S O L ID AT IO N

The consolidated financial statements comprise the financial
statements of Atalaya Mining Plc and its subsidiaries.

( B ) S UB S IDI A RIE S

Subsidiaries are all entities (including special purpose entities)
over which the Group and the Company has control. Control
exists when the Group is exposed, or has rights, to variable
returns for its involvement with the investee and has the
ability to affect those returns through its power over the
investee. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered
when assessing whether the Group controls another entity.
The Group also assesses existence of control where it does not
have more than 50% of the voting power but is able to govern
the financial and operating policies by virtue of de-facto
control.

De-facto control may arise in circumstances where the size of
the Group’s voting rights relative to the size and dispersion of
holdings of other shareholders give the Group the power to
govern the financial and operating policies, etc.

Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated
from the date that control ceases.

The only operating subsidiary of Atalaya Mining Plc is the
100% owned Atalaya Riotionto Minera, S.L.U. which operates
“Proyecto Minero Riotinto”, in the historical site of Huelva, Spain.

The name and shareholding of the entities include in the
Group in these financial statements are:

Atalaya Mining Plc.Financial statementsannual report 2018Entity name

Atalaya Mining, Plc

EMED Marketing Ltd.

EMED Mining Spain, S.L.

Atalaya Riotinto Minera, S.L.U.

Recursos Cuenca Minera, S.L.

Atalaya Minasderiotinto Project (UK), Ltd.

Eastern Mediterranean Exploration & Development, S.L.U.

Atalaya Touro (UK), Ltd.

Fundación Atalaya Riotinto

Cobre San Rafael, S.L. (1)

Atalaya Servicios Mineros, S.L.U.

Notes:

Business

Holding

Marketing

Dormant

Operating

Holding

Operating

Holding

Trust

Operating

Dormant

%(2)

n/a

100%

50%

100%

10%

100%

Country

Cyprus

Spain

United Kingdom

Spain

United Kingdom

Spain

(1) Cobre San Rafael, S.L. is the entity which holds the mining rights of the Touro Project. The Group has control in the management of Cobre San
Rafael, S.L., including one of the two directors, management of the financial books and the capacity to appoint the key personnel. Refer to Note 30
for details on the acquisition of Cobre San Rafael, S.L.

(2) The effective proportion of shares held as at 31 December 2018 and 2017 remained unchanged.

The Group applied the acquisition method to account for
business combinations. The consideration transferred for
the acquisition of a subsidiary is the fair value of the transfe-
rred assets, liabilities incurred by the former owners of the
acquiree and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset
or liability resulting from a contingent consideration arrange-
ment. Identifiable assets acquired, liabilities and contingent
liabilities assumed in a business combination are measured
initially at fair value at the acquisition date. The Group
recognised any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest’s proportionated share of the recog-
nised amounts of acquiree’s identifiable net assets.

(C ) A C Q UI S I T IO N -R E L AT E D C O S T S A R E E X P E N S E D
A S IN C UR R E D

If the business combination is achieved in stages, the acqui-
sition date carrying value of the acquirer’s previously held
equity interest in the acquiree is re-measured to fair value
at the acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the Group
is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that
is deemed to be an asset or liability is recognised in accor-
dance with IFRS 9 in profit or loss. Contingent consideration
that is classified as equity is not re-measured, and its subse-
quent settlement is accounted for within equity.

Inter-company transactions, balances, income and expenses
on transactions between Group companies are eliminated.
Profits and losses resulting from intercompany transactions
that are recognised in assets are also eliminated. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.

( D) C H A N GE S IN O W NE R S HIP IN T E R E S T S IN
S UB S IDI A RIE S W I T H O U T C H A N GE O F C O N T R O L

Transactions with non-controlling interests that do not result in
loss of control are accounted for as equity transactions – that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and
the relevant share acquired of the carrying value of net assets
of the subsidiary is recorded in equity. Gains or losses on dispo-
sals to non-controlling interests are also recorded in equity.

Atalaya Mining Plc.Financial statementsannual report 201883

( E ) DI S P O S A L O F S UB S IDI A RIE S

When the Group ceases to have control any retained interest
in the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised
in profit or loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the retained inte-
rest as an associate, joint venture or financial asset. In addi-
tion, any amounts previously recognised in other comprehen-
sive income in respect of that entity are accounted for as if the
Group had directly disposed of the related assets or liabilities.
This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.

( F ) A S S O CI AT E S A ND J OIN T V E N T UR E S

An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee
(generally accompanying a shareholding of between 20% and
50% of the voting rights), but is not control or joint control over
those policies.

A joint venture is a type of joint arrangement whereby the
parties that have joint control of the arrangement have rights
to the net assets of the joint venture. Joint control is the
contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control.

Investments in associates or joint ventures are accounted
for using the equity method of accounting. Under the equity
method, the investment is initially recognised at cost, and the
carrying amount is increased or decreased to recognise the
investor’s share of the profit or loss of the investee after the
date of acquisition. The Group’s investment in associates or
joint ventures includes goodwill identified on acquisition.

If the ownership interest in an associate or joint venture is
reduced but significant influence is retained, only a propor-
tionate share of the amounts previously recognised in other
comprehensive income is reclassified to profit or loss where
appropriate.

The Group’s share of post-acquisition profit or loss is recog-
nised in the income statement, and its share of post-acqui-
sition movements in other comprehensive income is recog-
nised in other comprehensive income, with a corresponding
adjustment to the carrying amount of the investment. When
the Group share of losses in an associate or a joint venture
equals or exceeds its interest in the associate or joint venture,
including any other unsecured receivables, the Group does
not recognise further losses, unless it has incurred legal or
constructive obligations or made payments on behalf of the
associate or the joint venture.

The Group determines at each reporting date whether there
is any objective evidence that the investment in the asso-
ciate or the joint venture is impaired. If this is the case, the
Group calculates the amount of impairment as the difference
between the recoverable amount of the associate or the joint
venture and its carrying value and recognises the amount
adjacent to ‘share of profit/(loss) of associates’ or joint
ventures’ in the income statement.

Profits and losses resulting from upstream and downstream
transactions between the Group and its associate or joint
venture are recognised in the Group’s consolidated financial
statements only to the extent of unrelated investors’ interests
in the associates or the joint ventures. Unrealised losses are
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure
consistency with the policies adopted by the Group. Dilution
gains and losses arising in investments in associates or joint
ventures are recognised in the income statement.

(G ) F UN C T IO N A L C UR R E N C Y

Functional and presentation currency items included in
the financial statements of each of the Group’s entities are
measured using the currency of the primary economic environ-
ment in which the entity operates (‘the functional currency’).
The financial statements are presented in Euro which is the
Group and the Company functional and presentation currency.

Determination of functional currency may involve certain
judgements to determine the primary economic environment
and the parent entity reconsiders the functional currency of
its entities if there is a change in events and conditions which
determined the primary economic environment.

Foreign currency transactions are translated into the func-
tional currency using the spot exchange rates prevailing at the
dates of the transactions or valuation where items are re-me-
asured. Foreign exchange gains and losses resulting from the
settlement of such transactions are recognised in the income
statement.

Monetary assets and liabilities denominated in foreign curren-
cies are retranslated at year-end spot exchange rates.

Non-monetary items that are measured at historical cost in a
foreign currency are translated using the exchange rates at the
dates of the initial transaction. Non-monetary items measured
at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.

Gains or losses of monetary and non-monetary items are
recognised in the income statement.

Atalaya Mining Plc.Financial statementsannual report 201884

Balance sheet items are translated at period-end exchange
rates. Exchange differences on translation of the net assets of
such entities are taken to equity and recorded in a separate
currency translation reserve.

decision-maker. The chief operating decision-maker, who is
responsible for allocating resources and assessing perfor-
mance of the operating segments, has been identified as the
CEO who makes strategic decisions.

2.4 INVESTMENTS IN SUBSIDIARY
COMPANIES

Investments in subsidiary companies are stated at cost less
provision for impairment in value, which is recognised as an
expense in the period in which the impairment is identified.

2.5 INTEREST IN JOINT
ARRANGEMENTS

A joint arrangement is a contractual arrangement whereby the
Group and other parties undertake an economic activity that
is subject to joint control that is when the strategic, financial
and operating policy decisions relating to the activities the
joint arrangement require the unanimous consent of the
parties sharing control.

Where a Group entity undertakes its activities under joint
arrangements directly, the Group’s share of jointly controlled
assets and any liabilities incurred jointly with other ventures
are recognised in the financial statements of the relevant
entity and classified according to their nature. Liabilities and
expenses incurred directly in respect of interests in jointly
controlled assets are accounted for on an accrual basis.
Income from the sale or use of the Group’s share of the output
of jointly controlled assets, and its share of joint arrange-
ment expenses, are recognised when it is probable that the
economic benefits associated with the transactions will flow
to/from the Group and their amount can be measured reliably.

The Group undertakes joint arrangements that involve the
establishment of a separate entity in which each acquiree has
an interest (jointly controlled entity). The Group reports its
interests in jointly controlled entities using the equity method of
accounting.

Where the Group transacts with its jointly controlled entities,
unrealised profits and losses are eliminated to the extent of
the Group’s interest in the joint arrangement.

2.6 SEGMENT REPORTING

Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating

The Group has only one distinct business segment, being that
of mining operations, mineral exploration and development.

2.7 INVENTORY

Inventory consists in copper concentrates, ore stockpiles
and metal in circuit and spare parts. Inventory is physically
measured or estimated and valued at the lower of cost or net
realisable value. Net realisable value is the estimated future
sales price of the product the entity expects to realise when
the product is processed and sold, less estimated costs to
complete production and bring the product to sale. Where the
time value of money is material, these future prices and costs
to complete are discounted.

Cost is determined by using the FIFO method and comprises
direct purchase costs and an appropriate portion of fixed and
variable overhead costs, including depreciation and amorti-
sation, incurred in converting materials into finished goods,
based on the normal production capacity. The cost of produc-
tion is allocated to joint products using a ratio of spot prices
by volume at each month end. Separately identifiable costs of
conversion of each metal are specifically allocated.

Materials and supplies are valued at the lower of cost or net
realisable value. Any provision for obsolescence is deter-
mined by reference to specific items of stock. A regular review
is undertaken to determine the extent of any provision for
obsolescence.

2.8 ASSETS UNDER CONSTRUCTION

All subsequent expenditure on the construction, installa-
tion or completion of infrastructure facilities including mine
plants and other necessary works for mining, are capitalised
in “Assets under construction”. Any costs incurred in testing
the assets to determine if they are functioning as intended,
are capitalised, net of any proceeds received from selling any
product produced while testing. Where these proceeds exceed
the cost of testing, any excess is recognised in the statement
of profit or loss and other comprehensive income. After
production starts, all assets included in “Assets under cons-
truction” are then transferred to the relevant asset categories.

Once a project has been established as commercially viable,
related development expenditure is capitalised. A develop-
ment decision is made based upon consideration of project

Atalaya Mining Plc.Financial statementsannual report 201885

economics, including future metal prices, reserves and
resources, and estimated operating and capital costs. Capi-
talization of costs incurred and proceeds received during the
development phase ceases when the property is capable of
operating at levels intended by management.

Capitalisation ceases when the mine is capable of commercial
production, with the exception of development costs which
give rise to a future benefit.

Pre-commissioning sales are offset against the cost of cons-
tructing the asset. No depreciation is recorded until the assets
are substantially complete and ready for productive use.

2.9 PROPERTY, PLANT AND
EQUIPMENT

Property, plant and equipment are stated at historical cost
less accumulated depreciation and any accumulated impair-
ment losses.

Subsequent costs are included in the assets’ carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of the replaced part is
derecognised. All other repairs and maintenance are charged
to the income statement during the financial period in which
they are incurred.

Property, plant and equipment are depreciated to their
estimated residual value over the estimated useful life of the
specific asset concerned, or the estimated remaining life
of the associated mine (“LOM”), field or lease. Depreciation
commences when the asset is available for use.

The major categories of property, plant and equipment are
depreciated/amortised on a Unit of Production (“UOP”) and/
or straight-line basis as follows:

buildings

mineral rights

deferred mining costs

plant and machinery

motor vehicles

furniture/fixtures/office equipment

UOP

5 years

5 – 10 years

The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised
within “Other (losses)/gains – net” in the income statement.

(A) MINERAL RIGHTS

Mineral reserves and resources which can be reasonably
valued are recognised in the assessment of fair values on
acquisition. Mineral rights for which values cannot be reaso-
nably determined are not recognised. Exploitable mineral
rights are amortised using the UOP basis over the commer-
cially recoverable reserves and, in certain circumstances,
other mineral resources. Mineral resources are included in
amortisation calculations where there is a high degree of
confidence that they will be extracted in an economic manner.

(B) DEFERRED MINING COSTS – STRIPPING COSTS

Mainly comprises of certain capitalised costs related to
pre-production and in-production stripping activities as
outlined below.

Stripping costs incurred in the development phase of a mine
(or pit) before production commences are capitalised as part
of the cost of constructing the mine (or pit) and subsequently
amortised over the life of the mine (or pit) on a UOP basis.

In-production stripping costs related to accessing an iden-
tifiable component of the ore body to realise benefits in the
form of improved access to ore to be mined in the future (stri-
pping activity asset), are capitalised within deferred mining
costs provided all the following conditions are met:

(i). it is probable that the future economic benefit associated

with the stripping activity will be realised;

(ii). the component of the ore body for which access has been

improved can be identified; and

(iii). the costs relating to the stripping activity associated with

the improved access can be reliably measured.

If all of the criteria are not met, the production stripping costs
are charged to the consolidated statement of income as they
are incurred.

The stripping activity asset is initially measured at cost, which
is the accumulation of costs directly incurred to perform
the stripping activity that improves access to the identified
component of ore, plus an allocation of directly attributable
overhead costs.

Atalaya Mining Plc.Financial statementsannual report 2018(C) EXPLORATION COSTS

Under the Group’s accounting policy, exploration expenditure
is not capitalised until the management determines a property
will be developed and point is reached at which there is a high
degree of confidence in the project’s viability and it is considered
probable that future economic benefits will flow to the Group.
A development decision is made based upon consideration of
project economics, including future metal prices, reserves and
resources, and estimated operating and capital costs.

Subsequent recovery of the resulting carrying value depends
on successful development or sale of the undeveloped
project. If a project does not prove viable, all irrecoverable
costs associated with the project net of any related impair-
ment provisions are written off.

(D) MAJOR MAINTENANCE AND REPAIRS

Expenditure on major maintenance refits or repairs comprises
the cost of replacement assets or parts of assets and overhaul
costs. Where an asset, or part of an asset, that was sepa-
rately depreciated and is now written off is replaced, and it
is probable that future economic benefits associated with
the item will flow to the Group through an extended life, the
expenditure is capitalised.

Where part of the asset was not separately considered as a
component and therefore not depreciated separately, the
replacement value is used to estimate the carrying amount of
the replaced asset(s) which is immediately written off. All other
day-to-day maintenance and repairs costs are expensed as
incurred.

(E) BORROWING COSTS

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use
or sale (a qualifying asset) are capitalised as part of the cost
of the respective asset. Where funds are borrowed specifically
to finance a project, the amount capitalised represents the
actual borrowing costs incurred.

(F) RESTORATION, REHABILITATION AND DECOMMISSIONING

Restoration, rehabilitation and decommissioning costs arising
from the installation of plant and other site preparation work,
discounted using a risk adjusted discount rate to their net
present value, are provided for and capitalised at the time
such an obligation arises.

the asset and the unwinding of the discount on the provision.
Costs for restoration of subsequent site disturbance, which are
created on an ongoing basis during production, are provided
for at their net present values and charged to the consolidated
statement of income as extraction progresses.

Changes in the estimated timing of the rehabilitation or
changes to the estimated future costs are accounted for
prospectively by recognising an adjustment to the rehabilita-
tion liability and a corresponding adjustment to the asset to
which it relates, provided the reduction in the provision is not
greater than the depreciated capitalised cost of the related
asset, in which case the capitalised cost is reduced to nil and
the remaining adjustment recognised in the consolidated
statement of income. In the case of closed sites, changes to
estimated costs are recognised immediately in the consoli-
dated statement of income.

2.10 INTANGIBLE ASSETS

(A) BUSINESS COMBINATION AND GOODWILL

Goodwill arises on the acquisition of subsidiaries and repre-
sents the excess of the consideration transferred over the
acquired interest in net fair value of the net identifiable assets,
liabilities and contingent liabilities of the acquiree and the fair
value of the non-controlling interest in the acquiree.

The results of businesses acquired during the year are brought
into the consolidated financial statements from the effective
date of acquisition. The identifiable assets, liabilities and
contingent liabilities of a business which can be measured
reliably are recorded at their provisional fair values at the date
of acquisition. Provisional fair values are finalised within 12
months of the acquisition date. Acquisition-related costs are
expensed as incurred.

Goodwill impairment reviews are undertaken annually or
more frequently if events or changes in circumstances indicate
a potential impairment. The carrying value of goodwill is
compared to the recoverable amount, which is the higher of
value in use and the fair value less costs to sell. Any impair-
ment is recognised immediately as an expense and is not
subsequently reversed.

(B) PERMITS

Permits are capitalised as intangible assets which relate to
projects that are at the pre-development stage. No amortisa-
tion charge is recognised in respect of these intangible assets.
Once the Group receives those permits, the intangible assets
relating to permits will be depreciated on a UOP basis.

The costs are charged to the consolidated statement of
income over the life of the operation through depreciation of

Other intangible assets include computer software.

Atalaya Mining Plc.Financial statementsannual report 201887

Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisi-
tion. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation (calculated on a
straight-line basis over their useful lives) and accumulated
impairment losses, if any.

The useful lives of intangible assets are assessed as either
finite or indefinite.

Intangible assets with finite lives are amortised over their
useful economic lives and assessed for impairment whenever
there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period.

Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recog-
nised in the statement of profit or loss and other comprehen-
sive income when the asset is derecognised.

2.11 IMPAIRMENT OF NON-FINANCIAL
ASSETS

Assets that have an indefinite useful life – for example, goodwill
or intangible assets not ready to use – are not subject to amor-
tisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recog-
nised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). Non-financial assets other
than goodwill that suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.

2.12 FINANCIAL ASSETS AND
LIABILITIES

2.12.1 C L A S S IF IC AT IO N

those to be measured subsequently at fair value through
OCI, and

those to be measured subsequently at fair value through
profit or loss.

The classification depends on the Group’s business model for
managing the financial assets and the contractual terms of the
cash flows.

The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the Group’s and the Company’s business
model for managing them. In order for a financial asset to be
classified and measured at amortised cost, it needs to give
rise to cash flows that are ‘solely payments of principal and
interest’ (‘SPPI’) on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at
an instrument level.

For assets measured at fair value, gains and losses will either
be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on
whether the group has made an irrevocable election at the
time of initial recognition to account for the equity investment
at fair value through other comprehensive income (FVOCI).

The Group reclassifies debt investments when and only when
its business model for managing those assets changes.

Regular way purchases and sales of financial assets are recog-
nised on trade-date, the date on which the Group commits to
purchase or sell the asset.

At initial recognition, the Group measures a financial asset
at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are
directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.

Financial assets with embedded derivatives are considered in
their entirety when determining whether their cash flows are
solely payment of principal and interest.

Subsequent measurement of debt instruments depends on the
Group’s business model for managing the asset and the cash
flow characteristics of the asset. There are three measurement
categories into which the Group classifies its debt instruments:

2.12.2 A M O R T I S E D C O S T

From 1 January 2018, the Group classifies its financial assets in
the following measurement categories:

those to be measured at amortised cost.

Assets that are held for collection of contractual cash flows
where those cash flows represent solely payments of principal
and interest are measured at amortised cost. Interest income

Atalaya Mining Plc.Financial statementsannual report 201888

from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains/(losses) together with foreign
exchange gains and losses.

Impairment losses are presented as separate line item in the
statement of profit or loss.

Gains and losses on these financial assets are never recycled
to profit or loss. Dividends are recognised as other income
in the statement of profit or loss when the right of payment
has been established, except when the Group benefits from
such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are not
subject to impairment assessment.

The Group’s financial assets at amortised cost include receiva-
bles (other than trade receivables which are measured at fair
value through profit and loss) and cash and cash equivalents.

The Company´s financial assets at amortised cost include
current and non-current receivables (other than trade receiva-
bles which are measured at fair value through profit and loss)
and cash and cash equivalents.

2.12.3 FA IR VA L UE T HR O U GH O T HE R
C O MP R E HE N S I V E IN C O ME

Financial assets which are debt instruments, that are held
for collection of contractual cash flows and for selling the
financial assets, where the assets’ cash flows represent solely
payments of principal and interest, are measured at FVOCI.
Movements in the carrying amount are taken through OCI,
except for the recognition of impairment gains or losses,
interest income and foreign exchange gains and losses which
are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recog-
nised in OCI is reclassified from equity to profit or loss and
recognised in other gains/(losses). Interest income from
these financial assets is included in finance income using the
effective interest rate method. Foreign exchange gains and
losses are presented in other gains/(losses) and impairment
expenses are presented as separate line item in the statement
of profit or loss.

At transition to IFRS 9, the Group had certain financial asset
that were accounted for as debt instruments at fair value
through other comprehensive income; however, at the repor-
ting date, no such assets existed.

2.12.4 E Q UI T Y IN S T R UME N T S D E S IGN AT E D A S
FA IR VA L UE T HR O U GH O T HE R C O MP R E HE N S I V E
IN C O ME

Upon initial recognition, the Group can elect to classify irrevo-
cably its equity investments as equity instruments designated
at fair value through OCI when they meet the definition of
equity under IAS 32 Financial Instruments: Presentation and
are not held for trading. The classification is determined on an
instrument-by-instrument basis.

The Group elected to classify irrevocably its listed equity
investments under this category.

2.12.5 FA IR VA L UE T HR O U GH P R O F I T O R L O S S

Assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVPL. A gain or loss on a debt invest-
ment that is subsequently measured at FVPL is recognised in
profit or loss and presented net within other gains/(losses) in
the period in which it arises.

Changes in the fair value of financial assets at FVPL are recog-
nised in other gains/(losses) in the statement of profit or loss
as applicable.

2.12.6 D E -R E C O GNI T IO N O F F IN A N CI A L A S S E T S

Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the
risks and rewards of ownership.

2.12.7 IMPA IR ME N T O F F IN A N CI A L A S S E T S

From 1 January 2018, the Group assesses on a forward looking
basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. Expected
credit losses are based on the difference between the contrac-
tual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted
at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral
to the contractual terms.

For receivables (other than trade receivables which are
measured at FVPL), the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables.

2.12.8 HE D GE A C C O UN T IN G

The Group does not apply hedge accounting.

Atalaya Mining Plc.Financial statementsannual report 201889

2.13 CURRENT VERSUS NON-CURRENT
CLASSIFICATION

The Group presents assets and liabilities in statement of finan-
cial position based on current/non-current classification.

(A) AN ASSET IS CURRENT WHEN IT IS EITHER:

> Expected to be realised or intended to be sold or consumed

in normal operating cycle;

> Held primarily for the purpose of trading;

> Expected to be realised within 12 months after the repor-

ting period

> Cash or cash equivalent unless restricted from being

exchanged or used to settle a liability for at least 12 months
after the reporting period

All other assets are classified as non-current.

(B) A LIABILITY IS CURRENT WHEN EITHER:

It is expected to be settled in the normal operating cycle;

It is held primarily for the purpose of trading

It is due to be settled within 12 months after the reporting
period

> There is no unconditional right to defer the settlement of

the liability for at least 12 months after the reporting period

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current
assets and liabilities.

2.14 CASH AND CASH EQUIVALENTS

In the consolidated and company statements of cash flows,
cash and cash equivalents includes cash in hand and in bank
including deposits held at call with banks, with a maturity of
less than 3 months.

2.15 PROVISIONS

Provisions for environmental restoration, restructuring costs
and legal claims are recognised when: the Group has a present
legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle
the obligation; and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.

2.16 INTEREST-BEARING LOANS AND
BORROWINGS

Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision
is recognised even if the likelihood of an outflow with respect
to any one item included in the same class of obligations may
be small. Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation
using a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the obli-
gation. The increase in the provision due to passage of time is
recognised as interest expense.

Borrowings are recognised initially at fair value, net of tran-
saction costs incurred. Borrowings are subsequently stated
at amortised cost. Any difference between the proceeds (net
of transaction costs) and the redemption value is recognised
in profit or loss over the period of the borrowings, using the
effective interest method, unless they are directly attributable
to the acquisition, construction or production of a qualifying
asset, in which case they are capitalised as part of the cost of
that asset.

Fees paid on the establishment of loan facilities are recog-
nised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In
this case, the fee is deferred until the draw-down occurs. To
the extent there is no evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as
a prepayment and amortised over the period of the facility to
which it relates.

Borrowing costs are interest and other costs that the Group
incurs in connection with the borrowing of funds, including
interest on borrowings, amortisation of discounts or premium
relating to borrowings, amortisation of ancillary costs incurred
in connection with the arrangement of borrowings, finance
lease charges and exchange differences arising from foreign
currency borrowings to the extent that they are regarded as an
adjustment to interest costs.

Atalaya Mining Plc.Financial statementsannual report 2018Borrowing costs that are directly attributable to the acquisi-
tion, construction or production of a qualifying asset, being
an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale, are capitalised as part of
the cost of that asset, when it is probable that they will result
in future economic benefits to the Group and the costs can be
measured reliably.

FINANCIAL LIABILITIES AND TRADE PAYABLES

After initial recognition, interest-bearing loans and borrowings
and trade and other payables are subsequently measured
at amortised cost using the EIR method. Gains and losses
are recognised in the statement of profit or loss and other
comprehensive income when the liabilities are derecognised,
as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included
as finance costs in the statement of profit or loss and other
comprehensive income.

2.17 DEFERRED CONSIDERATION

Deferred consideration arises when settlement of all or any
part of the cost of an agreement is deferred. It is stated at
fair value at the date of recognition, which is determined by
discounting the amount due to present value at that date.
Interest is imputed on the fair value of non-interest bearing
deferred consideration at the discount rate and expensed
within interest pay able and similar charges. At each balance
sheet date deferred consideration comprises the remaining
deferred consideration valued at acquisition plus interest
imputed on such amounts from recognition to the balance
sheet date.

2.18 SHARE CAPITAL

Ordinary shares are classified as equity. The difference
between the fair value of the consideration received by the
Company and the nominal value of the share capital being
issued is taken to the share premium account.

Incremental costs directly attributable to the issue of new
ordinary shares are shown in equity as a deduction, net of tax,
from the proceeds in the share premium account.

2.19 CURRENT AND DEFERRED INCOME
TAX

The tax expense for the period comprises current and deferred
tax. Tax is recognised in the income statement, except to the
extent that it relates to items recognised in other compre-
hensive income or directly in equity. In this case, the tax is
also recognised in other comprehensive income or directly in
equity, respectively.

The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period date in the countries where the Company and
its subsidiaries operate and generate taxable income. Mana-
gement periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to
the tax authorities.

Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consoli-
dated financial statements. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of
goodwill; deferred income tax is also not recognised if it arises
from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or
loss. Income tax is determined using tax rates (and laws) that
have been enacted or substantively enacted by the end of the
reporting period date and are expected to apply when the
related deferred tax asset is realised or the deferred income
tax liability is settled. Deferred tax assets are recognised only
to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be
utilised.

Deferred income tax is provided on temporary differences
arising on investments in subsidiaries and associates, except
for deferred income tax liabilities where the timing of the
reversal of the temporary difference is controlled by the
Group and it is probable that the temporary difference will not
reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax
assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or diffe-
rent taxable entities where there is an intention to settle the
balances on a net basis.

Atalaya Mining Plc.Financial statementsannual report 201891

2.20 SHARE-BASED PAYMENTS

The Group operates a share-based compensation plan, under
which the entity receives services from employees as conside-
ration for equity instruments (options) of the Group. The fair
value of the employee services received in exchange for the
grant of the options is recognised as an expense. The fair value
is measured using the Black Scholes pricing model. The inputs
used in the model are based on management’s best estimates
for the effects of non-transferability, exercise restrictions and
behavioural considerations. Non-market performance and
service conditions are included in assumptions about the
number of options that are expected to vest.

Vesting conditions are: (i) the personnel should be an
employee that provides services to the Group; and (ii) should
be in continuous employment for the whole vesting period of
3 years. Specific arrangements may exist with senior managers
and board members, whereby their options stay in use until
the end.

The total expense is recognised over the vesting period, which
is the period over which all of the specified vesting conditions
are to be satisfied (Note 24).

2.21 REHABILITATION PROVISIONS

The Group records the present value of estimated costs of
legal and constructive obligations required to restore opera-
ting locations in the period in which the obligation is incurred.
The nature of these restoration activities includes dismantling
and removing structures, rehabilitating mines and tailings
dams, dismantling operating facilities, closure of plant and
waste sites and restoration, reclamation and re-vegetation
of affected areas. The obligation generally arises when the
asset is installed or the ground/environment is disturbed at
the production location. When the liability is initially recog-
nised, the present value of the estimated cost is capitalised by
increasing the carrying amount of the related mining assets
to the extent that it was incurred prior to the production of
related ore. Over time, the discounted liability is increased for
the change in present value based on the discount rates that
reflect current market assessments and the risks specific to
the liability. The periodic unwinding of the discount is recog-
nised in the consolidated income statement as a finance cost.
Additional disturbances or changes in rehabilitation costs will
be recognised as additions or charges to the corresponding
assets and rehabilitation liability when they occur. For closed
sites, changes to estimated costs are recognised immediately
in the consolidated income statement.

The Group assesses its mine rehabilitation provision
annually. Significant estimates and assumptions are made in

determining the provision for mine rehabilitation as there are
numerous factors that will affect the ultimate liability payable.
These factors include estimates of the extent and costs of
rehabilitation activities, technological changes, regulatory
changes and changes in discount rates. Those uncertainties
may result in future actual expenditure differing from the
amounts currently provided. The provision at the consolidated
statement of financial position date represents management’s
best estimate of the present value of the future rehabilitation
costs required.

2.22 LEASES

The determination of whether an arrangement is, or contains
a lease is based on the substance of the arrangement at incep-
tion date including whether the fulfilment of the arrangement
is dependent on the use of a specific asset or assets or the
arrangement conveys a right to use the asset. A reassessment
is made after inception of the lease only if one of the following
applies:

a). There is a change in contractual terms, other than a

renewal or extension of the arrangement;

b). A renewal option is exercised or extension granted, unless
the term of the renewal or extension was initially included
in the lease term;

c). There is a change in the determination of whether fulfil-

ment is dependent on a specified asset; or

d). There is a substantial change to the asset.

GROUP AS A LESSEE

Capitalised leased assets are depreciated over the shorter
of the estimated useful life of the asset and the lease term,
if there is no reasonable certainty that the Group will obtain
ownership by the end of the lease term.

Operating lease payments are recognised as an expense in the
income statement on a straight-line basis over the lease term.

2.23 REVENUE RECOGNITION

(A) REVENUE FROM CONTRACTS WITH CUSTOMERS

Atalaya is principally engaged in the business of producing
copper concentrate and in some instances, provides freight/
shipping services. Revenue from contracts with custo-
mers is recognised when control of the goods or services is
transferred to the customer at an amount that reflects the

Atalaya Mining Plc.Financial statementsannual report 201892

consideration to which Atalaya expects to be entitled in
exchange for those goods or services. Atalaya has concluded
that it is the principal in its revenue contracts because it
controls the goods or services before transferring them to the
customer.

priced trade receivables’. Changes in fair value over, and until
the end of, the QP, are estimated by reference to updated
forward market prices for copper as well as taking into
account relevant other fair value considerations as set out in
IFRS 13, including interest rate and credit risk adjustments.

(B) COPPER IN CONCENTRATE (METAL IN CONCENTRATE) SALES

For most copper in concentrate (metal in concentrate) sales,
the enforceable contract is each purchase order, which is
an individual, short-term contract. For the Group’s metal in
concentrate sales not sold under CIF Incoterms, the perfor-
mance obligations are the delivery of the concentrate. A
proportion of the Group’s metal in concentrate sales are sold
under CIF Incoterms, whereby the Group is also responsible
for providing freight services. In these situations, the freight
services also represent separate performance obligation (see
paragraph (c) below).

The majority of the Group’s sales of metal in concentrate allow
for price adjustments based on the market price at the end of
the relevant QP stipulated in the contract. These are referred
to as provisional pricing arrangements and are such that the
selling price for metal in concentrate is based on prevailing
spot prices on a specified future date after shipment to the
customer. Adjustments to the sales price occur based on
movements in quoted market prices up to the end of the QP.
The period between provisional invoicing and the end of the
QP can be between one and three months.

Revenue is recognised when control passes to the customer,
which occurs at a point in time when the metal in concentrate
is physically transferred onto a vessel, train, conveyor or other
delivery mechanism. The revenue is measured at the amount
to which the Group expects to be entitled, being the estimate
of the price expected to be received at the end of the QP, i.e.,
the forward price, and a corresponding trade receivable is
recognised. For those arrangements subject to CIF shipping
terms, a portion of the transaction price is allocated to the
separate freight services provided (See paragraph (c) below).

For these provisional pricing arrangements, any future
changes that occur over the QP are embedded within the
provisionally priced trade receivables and are, therefore,
within the scope of IFRS 9 and not within the scope of IFRS 15.
Given the exposure to the commodity price, these provisio-
nally priced trade receivables will fail the cash flow characte-
ristics test within IFRS 9 and will be required to be measured
at fair value through profit or loss up from initial recognition
and until the date of settlement. These subsequent changes
in fair value are recognised as part of revenue in the statement
of profit or loss and other comprehensive income each period
and disclosed separately from revenue from contracts with
customers as part of ‘Fair value gains/losses on provisionally

Final settlement is based on quantities adjusted as required
following the inspection of the product by the customer as
well as applicable commodity prices. IFRS 15 requires that
variable consideration should only be recognised to the extent
that it is highly probable that a significant reversal in the
amount of cumulative revenue recognized will not occur. As
the adjustments relating to the final assay results for the quan-
tity and quality of concentrate sold are not significant, they do
not constrain the recognition of revenue.

As noted above, a proportion of the Group’s metal in concen-
trate sales are sold under CIF Incoterms, whereby the Group
is responsible for providing freight services (as principal)
after the date that the Group transfers control of the metal
in concentrate to its customers. The Group, therefore, has
separate performance obligation for freight services which
are provided solely to facilitate sale of the commodities it
produces.

The revenue from freight services is a separate performance
obligation under IFRS 15 and therefore is recognised as the
service is provided, hence at year end a portion of revenue
must be deferred.

Other Incoterms commonly used by the Group are FOB, where
the Group has no responsibility for freight or insurance once
control of the products has passed at the loading port, Ex
works where control of the goods passes when the product is
picked up at seller´s promises, and CIP where control of the
goods passes when the product is delivered to the agreed
destination. For arrangements which have these Incoterms,
the only performance obligations are the provision of the
product at the point where control passes.

(D) SALES OF SERVICES

The Group sells services in relation to maintenance of accoun-
ting records, management, technical, administrative support
and other services to other companies. Revenue is recognised
in the accounting period in which the services are rendered.

Contract assets

A contract asset is the right to consideration in exchange for
goods or services transferred to the customer. If the Group

Atalaya Mining Plc.Financial statementsannual report 201893

performs by transferring goods or services to a customer
before the customer pays consideration or before payment is
due, a contract asset is recognised for the earned considera-
tion that is conditional. The Group does not have any contract
assets as performance and a right to consideration occurs
within a short period of time and all rights to consideration are
unconditional.

Contract liabilities

A contract liability is the obligation to transfer goods or
services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the
customer. If a customer pays consideration before the Group
transfers goods or services to the customer, a contract liability
is recognised when the payment is made or the payment is
due (whichever is earlier). Contract liabilities are recognised as
revenue when the Group performs under the contract.

From time to time, the Group recognises contract liabilities
in relation to some metal in concentrate sales which are sold
under CIF Incoterms, whereby a portion of the cash may be
received from the customer before the freight services are
provided.

2.24 INTEREST INCOME

Interest income is recognised using the effective inte-
rest method. When a loan and receivable is impaired, the
Group and the Company reduce the carrying amount to
its recoverable amount, being the estimated future cash
flow discounted at the original effective interest rate of the
instrument, and continues unwinding the discount as interest
income. Interest income on impaired loan and receivables is
recognised using the original effective interest rate.

2.25 DIVIDEND INCOME

Dividend income is recognised when the right to receive
payment is established.

2.26 DIVIDEND DISTRIBUTION

Dividend distributions to the Company’s shareholders are
recognised as a liability in the Group’s financial statements
in the period in which the dividends are approved by the
Company’s shareholders. No dividend has been paid by the
Company since its incorporation.

2.27 EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net
profit for the year by the weighted average number of ordinary
shares outstanding during the year. The basic and diluted
earnings per share are the same as there are no instruments
that have a dilutive effect on earnings.

2.28 AMENDMENT OF FINANCIAL
STATEMENTS AFTER ISSUE

The consolidated and company financial statements were
authorised for issue by the Board of Directors on 3 April 2019.
The Board of Directors has the power to amend the consoli-
dated financial statements after issue.

2.29 COMPARATIVES

Where necessary, comparative figures have been adjusted to
conform to changes in presentation in the current year.

3. FINANCIAL RISK
MANAGEMENT

3.1 FINANCIAL RISK FACTORS

Risk management is overseen by the AFRC under the Board
of Directors. The AFRC oversees the risk management poli-
cies employed by the Group to identify, evaluate and hedge
financial risks, in close co-operation with the Group’s opera-
ting units. The Group is exposed to liquidity risk, currency
risk, commodity price risk, credit risk, interest rate risk,
operational risk, compliance risk and litigation risk arising
from the financial instruments it holds. The risk manage-
ment policies employed by the Group to manage these risks
are discussed below:

(A) LIQUIDITY RISK

Liquidity risk is the risk that arises when the maturity of
assets and liabilities does not match. An unmatched position
potentially enhances profitability, but can also increase the
risk of losses. The Group has procedures with the object
of minimising such losses such as maintaining sufficient

Atalaya Mining Plc.Financial statementsannual report 201894

cash to meet liabilities when due. Cash flow forecasting is
performed in the operating entities of the Group and aggre-
gated by Group finance. Group finance monitors rolling
forecasts of the Group’s liquidity requirements to ensure it
has sufficient cash to meet operational needs.

The following tables detail the Group’s remaining contrac-
tual maturity for its financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Group can
be required to pay. The table includes principal cash flows.

The Group

(Euro 000’s)

31 December 2018

Land options and mortgages

Tax liability

Deferred consideration

Trade and other payables

31 December 2017

Land options and mortgages

Provisions

Deferred consideration

Trade and other payables

The Company

(Euro 000’s)

31 December 2018

Tax liability

Deferred consideration

Trade and other payables

31 December 2017

Deferred consideration

Trade and other payables

Carrying
amounts

Contractual
cash flows

Less than 3
months

Between 3 – 12
months

Between 1-2
years

Between 2-5
years

Over 5 years

823

1,945

53,000

56,493

823

1,945

53,000

56,493

112,261

5,727

52,983

67,983

5,727

52,983

67,983

126,767

49,710

67,983

67,993

791

1,945

53,000

6,770

9,506

53,045

165

4,961

373

228

35,220

17,763

260

35,625

17,928

4,961

Carrying
amounts

Contractual
cash flows

Less than 3
months

Between3 – 12
months

Between 1-2
years

Between 2-5
years

Over 5 years

1,524

9,117

8,069

1,524

9,117

8,069

18,710

9,100

5,917

9,100

5,917

15,017

6,124

6,125

1,303

1,524

9,117

1,945

3,469

4,614

9,117

9,100

Atalaya Mining Plc.Financial statementsannual report 201895

(B) CURRENCY RISK

Currency risk is the risk that the value of financial instru-
ments will fluctuate due to changes in foreign exchange
rates.

Currency risk arises when future commercial transactions
and recognised assets and liabilities are denominated in a
currency that is not the Group’s measurement currency.
The Group is exposed to foreign exchange risk arising from
various currency exposures primarily with respect to the
US Dollar and the British Pound. The Group’s management
monitors the exchange rate fluctuations on a continuous
basis and acts accordingly.

The carrying amounts of the Group’s foreign currency deno-
minated monetary assets and monetary liabilities at the end
of the reporting period are as follows:

Liabilities

Assets

(Euro 000’s)

2018

2017

2018

2017

United States dollar

1,011

1,554

32,318

Great Britain pound

Australian dollar

South African rand

138

139

416

261

21,660

34,346

Sensitivity analysis

A 10% strengthening of the Euro against the following
currencies at 31 December 2018 would have increased /
(decreased) equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables, in parti-
cular interest rates, remain constant. For a 10% weakening
of the Euro against the relevant currency, there would be an
equal and opposite impact on profit or loss and other equity.

Commodity price is the risk that the Group’s future earnings
will be adversely impacted by changes in the market prices
of commodities, primarily copper. Management is aware of
this impact on its primary revenue stream but knows that
there is little it can do to influence the price earned apart
from a hedging scheme.

Commodity price hedging is governed by the Group´s policy
which allows to limit the exposure to prices. The Group may
decide to hedged part of its production during the year.

(D) CREDIT RISK

Credit risk arises when a failure by counterparties to
discharge their obligations could reduce the amount of
future cash inflows from financial assets on hand at the
reporting date. The Group has no significant concentration
of credit risk. The Group has policies in place to ensure that
sales of products and services are made to customers with
an appropriate credit history and monitors on a continuous
basis the ageing profile of its receivables. The Group has
policies to limit the amount of credit exposure to any finan-
cial institution.

Except as detailed in the following table, the carrying
amount of financial assets recorded in the financial state-
ments, which is net of impairment losses, represents the
maximum credit exposure without taking account of the
value of any collateral obtained:

(Euro 000’s)

Unrestricted cash and cash equivalent at
Group

Unrestricted cash and cash equivalent at
operating entity

2018

2017

24,357

39,179

8,463

3,427

Restricted cash at the operating entity

250

Cash and cash equivalents

33,070

42,856

(Euro 000’s)

United States dollar

Great Britain pound

Australian dollar

South African rand

Equity

Profit or (loss)

2018

3,131

(14)

(1)

2017

2,011

3,421

2018

3,131

(14)

(1)

2017

2,011

3,421

Restricted cash held as at 31 December 2018 is a collateral
of a bank guarantee provided to a contractor.

Other than the above, there are no collaterals held in
respect of these financial instruments and there are no
financial assets that are past due or impaired as at 31
December 2018.

Atalaya Mining Plc.Financial statementsannual report 201896

(E) INTEREST RATE RISK

(H) LITIGATION RISK

Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest
rates. Borrowings issued at variable rates expose the Group
to cash flow interest rate risk. Borrowings issued at fixed
rates expose the Group to fair value interest rate risk. The
Group’s management monitors the interest rate fluctuations
on a continuous basis and acts accordingly.

Litigation risk is the risk of financial loss, interruption of the
Group’s operations or any other undesirable situation that
arises from the possibility of non execution or violation of
legal contracts and consequentially of lawsuits. The risk
is restricted through the contracts used by the Group to
execute its operations.

At the reporting date the interest rate profile of interest
bearing financial instruments was:

3.2 CAPITAL RISK MANAGEMENT

(Euro 000’s)

2018

2017

Variable rate instruments

Financial assets

33,070

42,856

An increase of 100 basis points in interest rates at 31
December 2018 would have increased / (decreased)
equity and profit or loss by the amounts shown below. This
analysis assumes that all other variables, in particular foreign
currency rates, remain constant. For a decrease of 100 basis
points there would be an equal and opposite impact on the
profit and other equity.

Equity

Profit or loss

(Euro 000’s)

Variable rate instruments

2018

331

2017

429

2018

331

2017

429

(F) OPERATIONAL RISK

Operational risk is the risk that derives from the deficiencies
relating to the Group’s information technology and control
systems as well as the risk of human error and natural disas-
ters. The Group’s systems are evaluated, maintained and
upgraded continuously.

(G) COMPLIANCE RISK

Compliance risk is the risk of financial loss, including fines
and other penalties, which arises from non compliance with
laws and regulations. The Group has systems in place to
mitigate this risk, including seeking advice from external
legal and regulatory advisors in each jurisdiction.

The Group considers its capital structure to consist of share
capital, share premium and share options reserve. The
Group’s objectives when managing capital are to safeguard
the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stake-
holders and to maintain an optimal capital structure to reduce
the cost of capital. The Group is not subject to any externally
imposed capital requirements.

In order to maintain or adjust the capital structure, the Group
issues new shares. The Group manages its capital to ensure
that it will be able to continue as a going concern while maxi-
mizing the return to shareholders through the optimisation
of the debt and equity balance. The AFRC reviews the capital
structure on a continuing basis.

The Group’s objectives when managing capital are to safe-
guard the Group’s ability to continue as a going concern and
to maintain an optimal capital structure so as to maximise
shareholder value. In order to maintain or achieve an optimal
capital structure, the Group may adjust the amount of
dividend payment, return capital to shareholders, issue new
shares, buy back issued shares, obtain new borrowings or sell
assets to reduce borrowings.

The Group monitors capital on the basis of the gearing ratio.
The gearing ratio is calculated as net debt divided by total
capital. Net debt is calculated as provisions plus deferred
consideration plus trade and other payables less cash and cash
equivalents. The decrease in the gearing ratio during FY2018
was mainly due to the profit generated during the year.

(Euro 000’s)

Net debt(1)

Total equity

Total capital

Gearing ratio

2018

2017

85,710

282,174

367,884

23.3%

84,663

246,853

331,516

25.5%

(1) Net debt includes non-current and current liabilities net of cash and cash
equivalent

Atalaya Mining Plc.Financial statementsannual report 201897

3.3 FAIR VALUE ESTIMATION

The fair values of the Group’s financial assets and liabilities
approximate their carrying amounts at the reporting date.

The fair value of financial instruments traded in active
markets, such as publicly traded and available for sale finan-
cial assets is based on quoted market prices at the reporting
date. The quoted market price used for financial assets held
by the Group is the current bid price. The appropriate quoted
market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in
an active market is determined by using valuation techniques.
The Group uses a variety of methods, such as estimated
discounted cash flows, and makes assumptions that are based
on market conditions existing at the reporting date.

Fair value measurements recognised in the consolidated
statement and company statement of financial position

The following table provides an analysis of financial instru-
ments that are measured subsequent to initial recognition at
fair value, Grouped into Levels 1 to 3 based on the degree to
which the fair value is observable.

> Level 1 fair value measurements are those derived from
quoted prices (unadjusted) in active markets for identical
assets or liabilities.

> Level 2 fair value measurements are those derived from

inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).

> Level 3 fair value measurements are those derived from
valuation techniques that include inputs for the asset or
liability that are not based on observable market data
(unobservable inputs).

The Group

(Euro 000’s)

31 December 2018

Other financial assets

Financial assets at FV through OCI

Trade and other receivables

Receivables (subject to provisional pricing)

Total

31 December 2017

Financial assets

Available for sale financial assets

Total

The Company

(Euro 000’s)

31 December 2018

Non-current receivables

Financial assets at FV through profit and loss

Other current assets

Financial assets at FV through OCI

Total

31 December 2017

Financial assets

Available for sale financial assets

Total

Level 1

Level 2

Level 3

Total

129

6,959

7,030

129

Level 1

Level 2

Level 3

Total

129

215,308

215,379

129

Atalaya Mining Plc.Financial statementsannual report 201898

3.4 CRITICAL ACCOUNTING ESTIMATES
AND JUDGEMENTS

The preparation of the financial statements requires manage-
ment to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures, and the
disclosure of contingent liabilities at the date of the conso-
lidated financial statements. Estimates and assumptions
are continually evaluated and are based on management’s
experience and other factors, including expectations of future
events that are believed to be reasonable under the circum-
stances. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected in future
periods.

In particular, the Group has identified a number of areas
where significant judgements, estimates and assumptions are
required.

(A) CAPITALISATION OF EXPLORATION AND EVALUATION COSTS

Under the Group’s accounting policy, exploration and evalua-
tion expenditure is not capitalised until the point is

reached at which there is a high degree of confidence in the
project’s viability and it is considered probable that future
economic benefits will flow to the Group. Subsequent recovery
of the resulting carrying value depends on successful deve-
lopment or sale of the undeveloped project. If a project does
not proven viable, all irrecoverable costs associated with the
project net of any related impairment provisions are written off.

(B) STRIPPING COSTS

The Group incurs waste removal costs (stripping costs) during
the development and production phases of its surface mining
operations. Furthermore, during the production phase, strip-
ping costs are incurred in the production of inventory as well
as in the creation of future benefits by improving access and
mining flexibility in respect of the orebodies to be mined, the
latter being referred to as a stripping activity asset. Judge-
ment is required to distinguish between the development and
production activities at surface mining operations.

between mines because the assessments are undertaken
for each individual mine and are based on a combination of
information available in the mine plans, specific characteris-
tics of the orebody, the milestones relating to major capital
investment decisions and the type and grade of minerals
being mined.

Judgement is also required to identify a suitable production
measure that can be applied in the calculation and allocation
of production stripping costs between inventory and the strip-
ping activity asset. The Group considers the ratio of expected
volume of waste to be stripped for an expected volume of
ore to be mined for a specific component of the orebody,
compared to the current period ratio of actual volume of
waste to the volume of ore to be the most suitable measure of
production.

These judgements and estimates are used to calculate and
allocate the production stripping costs to inventory and/
or the stripping activity asset(s). Furthermore, judgements
and estimates are also used to apply the units of production
method in determining the depreciable lives of the stripping
activity asset(s).

The Group estimates its ore reserves and mineral resources
based on information compiled by appropriately qualified
persons relating to the geological and technical data on the
size, depth, shape and grade of the ore body and suitable
production techniques and recovery rates.

Such an analysis requires complex geological judgements to
interpret the data. The estimation of recoverable reserves is
based upon factors such as estimates of foreign exchange rates,
commodity prices, future capital requirements and production
costs, along with geological assumptions and judgements
made in estimating the size and grade of the ore body.

The Group uses qualified persons (as defined by the Cana-
dian Securities Administrators’ National Instrument 43-101)
to compile this data. Changes in the judgments surrounding
proven and probable reserves may impact as follows:

> The carrying value of exploration and evaluation assets,

mine properties, property, plant and equipment, and good-
will may be affected due to changes in estimated future
cash flows;

The Group is required to identify the separately identifiable
components or phases of the orebodies for each of its surface
mining operations. Judgement is required to identify and
define these components, and also to determine the expected
volumes (tonnes) of waste to be stripped and ore to be mined
in each of these components. These assessments may vary

> Depreciation and amortisation charges in the statement of
profit or loss and other comprehensive income may change
where such charges are determined using the UOP method,
or where the useful life of the related assets change;

> Capitalised stripping costs recognised in the statement of

Atalaya Mining Plc.Financial statementsannual report 201899

Atalaya Mining Plc. - ANNUAL REPORT 2018

financial position as either part of mine properties or inven-
tory or charged to profit or loss may change due to changes
in stripping ratios;

> Provisions for rehabilitation and environmental provi-

sions may change where reserve estimate changes affect
expectations about when such activities will occur and the
associated cost of these activities;

> The recognition and carrying value of deferred income

tax assets may change due to changes in the judgements
regarding the existence of such assets and in estimates of
the likely recovery of such assets.

(D) IMPAIRMENT OF ASSETS

Events or changes in circumstances can give rise to significant
impairment charges or impairment reversals in a particular
year. The Group assesses each Cash Generating Unit (“CGU”)
annually to determine whether any indications of impairment
exist. If it was necessary management could contract indepen-
dent expert to value the assets. Where an indicator of impair-
ment exists, a formal estimate of the recoverable amount is
made, which is considered the higher of the fair value less
cost to sell and value-in-use. An impairment loss is recognised
immediately in net earnings. The Group has determined that
each mine location is a CGU.

These assessments require the use of estimates and assump-
tions such as commodity prices, discount rates, future
capital requirements, exploration potential and operating
performance. Fair value is determined as the price that would
be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the
measurement date. Fair value for mineral assets is generally
determined as the present value of estimated future cash
flows arising from the continued use of the asset, which
includes estimates such as the cost of future expansion plans
and eventual disposal, using assumptions that an indepen-
dent market participant may take into account. Cash flows are
discounted at an appropriate discount rate to determine the
net present value. For the purpose of calculating the impair-
ment of any asset, management regards an individual mine or
works site as a CGU.

Although management has made its best estimate of these
factors, it is possible that changes could occur in the near term
that could adversely affect management’s estimate of the net
cash flow to be generated from its projects.

(E) PROVISIONS FOR DECOMMISSIONING AND SITE RESTORATION COSTS

Accounting for restoration provisions requires management
to make estimates of the future costs the Group will incur to

complete the restoration and remediation work required to
comply with existing laws, regulations and agreements in
place at each mining operation and any environmental and
social principles the Group is in compliance with. The calcula-
tion of the present value of these costs also includes assump-
tions regarding the timing of restoration and remediation
work, applicable risk-free interest rate for discounting those
future cash outflows, inflation and foreign exchange rates and
assumptions relating to probabilities of alternative estimates
of future cash outflows.

Management uses its judgement and experience to provide
for and (in the case of capitalised decommissioning costs)
amortise these estimated costs over the life of the mine. The
ultimate cost of decommissioning and timing is uncertain and
cost estimates can vary in response to many factors inclu-
ding changes to relevant environmental laws and regulations
requirements, the emergence of new restoration techniques
or experience at other mine sites. As a result, there could be
significant adjustments to the provisions established which
would affect future financial results. Refer to Note 27 for
further details.

(F) INCOME TAX

Significant judgment is required in determining the provision
for income taxes. There are transactions and calculations for
which the ultimate tax determination is uncertain during the
ordinary course of business. The Group and Company recog-
nise liabilities for anticipated tax audit issues based on esti-
mates of whether additional taxes will be due. Where the final
tax outcome of these matters is different from the amounts
that were initially recorded, such differences will impact the
income tax and deferred tax provisions in the period in which
such determination is made.

Judgement is also required to determine whether deferred tax
assets are recognised in the consolidated statements of finan-
cial position. Deferred tax assets, including those arising from
unutilised tax losses, require the Group to assess the probabi-
lity that the Group will generate sufficient taxable earnings in
future periods, in order to utilise recognised deferred tax assets.

Assumptions about the generation of future taxable profits
depend on management’s estimates of future cash flows.
These estimates of future taxable income are based on
forecast cash flows from operations (which are impacted
by production and sales volumes, commodity prices,
reserves, operating costs, closure and rehabilitation costs,
capital expenditure, dividends and other capital manage-
ment transactions). To the extent that future cash flows and
taxable income differ significantly from estimates, the ability
of the Group to realise the net deferred tax assets could be
impacted.

Atalaya Mining Plc.Financial statementsannual report 2018100

In addition, future changes in tax laws in the jurisdictions in
which the Group operates could limit the ability of the Group
to obtain tax deductions in future periods.

(G) INVENTORY

Net realisable value tests are performed at each reporting
date and represent the estimated future sales price of the
product the entity expects to realise when the product is
processed and sold, less estimated costs to complete produc-
tion and bring the product to sale. Where the time value of
money is material, these future prices and costs to complete
are discounted.

(H) CONTINGENT LIABILITIES

A contingent liability arises where a past event has taken place
for which the outcome will be confirmed only by the occu-
rrence or non-occurrence of one or more uncertain events
outside of the control of the Group, or a present obligation
exists but is not recognised because it is not probable that an
outflow of resources will be required to settle the obligation.

A provision is made when a loss to the Group is likely to crysta-
llise. The assessment of the existence of a contingency and its
likely outcome, particularly if it is considered that a provision
might be necessary, involves significant judgment taking all
relevant factors into account.

expense for equity-settled share-based payments is measured
at the grant date based on the fair value of the award and is
recognised as an expense over the vesting period. The fair value
of such share-based awards at the grant date is measured
using the Black Scholes pricing model. The inputs used in the
model are based on management’s best estimates for the
effects of non-transferability, exercise restrictions, behavioural
considerations and expected volatility. Refer to Note 24.

(K) CONSOLIDATION OF COBRE SAN RAFAEL

Cobre San Rafael, S.L. is the entity which holds the mining
rights of Proyecto Touro. The Group has a significant influence
in the management of the Cobre San Rafael, S.L., including
one of the two directors, management of the financial books
and the capacity to appoint the key personnel.

(L) CLASSIFICATION OF FINANCIAL ASSETS

The Group and Company exercises judgement upon determi-
ning the classification of its financial assets upon considering
whether contractual features including interest rate could
significantly affect future cash flows. Furthermore, judgment
is required when assessing whether compensation paid or
received on early termination of lending arrangements results
in cash flows that are not SPPI.

(I) DEFERRED CONSIDERATION

As disclosed in Note 28, the Group has recorded a deferred
consideration liability in relation to the obligation to pay Astor
up to €53.0 million out of excess cash from operations at the
Riotinto Project.

4. BUSINESS AND
GEOGRAPHICAL SEGMENTS

BUSINESS SEGMENTS

In 2018 the discount rate used to value the liability for the
deferred consideration was re-assessed to apply a risk free
rate as required by IAS 37. The discounted amount, when
applying this discount rate, was not considered significant and
the Group has measured the liability for the deferred conside-
ration on an undiscounted basis.

The Group has only one distinct business segment, being that
of mining operations, which include mineral exploration and
development.

Copper concentrates produced by the Group are sold to three
offtakers as per the relevant offtake agreement (Note 31.2)

The actual timing of any payments to Astor of the conside-
ration involves significant judgment as it depends on certain
factors which are out of control of management.

(J) SHARE-BASED COMPENSATION BENEFITS

Share based compensation benefits are accounted for in
accordance with the fair value recognition provisions of IFRS 2
“Share-based Payment”. As such, share-based compensation

GEOGRAPHICAL SEGMENTS

The Group’s mining activities are located in Spain. The
commercialisation of the copper concentrates produced in
Spain is carried out through Cyprus. Sales transactions to
related parties are on arm’s length basis in a similar manner to
transaction with third parties. Accounting policies used by the
Group in different locations are the same as those contained
in Note 2.

Atalaya Mining Plc.Financial statementsannual report 2018101

2018
(Euro 000’s)

Revenue

Cyprus

Spain

Other

Total

12,938

176,538

189,476

Earnings/(loss)before Interest, Tax, Depreciation and Amortisation

1,839

52,110

(407)

53,542

Depreciation/amortisation charge

Net foreign exchange gain/(loss)

Finance income

Finance cost

Profit/(loss) before tax

Tax

Profit for the year

Total assets

Total liabilities

Depreciation of property, plant and equipment

Amortisation of intangible assets

Total additions of non-current assets

2017

(Euro 000’s)

Revenue (1)

External customers

Inter-segment

Earnings/(loss)before Interest, Tax,Depreciation and
Amortisation

999

(2)

(13,430)

615

(251)

(1)

2,899

39,052

(408)

(13,430)

1,613

(253)

41,543

(7,102)

34,441

31,721

372,790

643

405,154

(13,672)

(104,931)

(177)

(118,780)

10,143

3,287

69,086

10,143

3,287

69,086

Cyprus

Spain

Other

Elimination

Total

160,537

148,356

151,331

(109,957)

(27)

(1)

(28)

202

(59)

(148,356)

160,537

41,347

(16,671)

(2,212)

(579)

21,907

(3,696)

18,211

374,372

(127,519)

12,540

4,131

26,079

Depreciation/amortisation charge

(7)

(16,664)

Net foreign exchange loss

Finance income

Finance costs

Profit/(loss) before tax

Tax

Profit for the year

Total assets

Total liabilities

Depreciation of property, plant and equipment

Amortisation of intangible assets

Total additions of non-current assets

(1,510)

(366)

(701)

(213)

149,448

(127,513)

53,034

321,136

(11,836)

(115,624)

12,533

4,131

26,079

(1) In 2017, the amount included as inter-segment revenues between Spain and Cyprus totalled €148,356k, which were eliminated through consolidation.

Atalaya Mining Plc.Financial statementsannual report 2018102

Revenue represents the sales value of goods supplied to
customers, net of value added tax. The following table
summarises sales to customers with whom transactions have
individually exceeded 10.0% of the Group’s revenues.

(Euro 000’s)

Offtaker 1

Offtaker 2

Offtaker 3

Offtaker 4

2018

2017

Segment

€’000

Segment

Copper

25,900

99,703

63,873

Copper

€’000

28,119

82,905

49,518

5. REVENUE

6. OTHER INCOME

All revenue from copper concentrate is recognised at a point
in time when the control is transferred. Revenue from freight
services is recognised over time as the services are provided.

The Group

(Euro 000’s)

2018

2017

The Group
(Euro 000’s)

2018

2017

Gain on disposal of associate

Release of prior year provision (Note 15 (4))

Loss on available-for-sale investments

Revenue from contracts with customers(1)

195,891

160,537

Sales of services

Fair value gain/losses relating to
provisional pricing within sales(2)

(6,415)

Other income

Total revenue

189,476

160,537

(1) Included within FY2018 revenue there is a transaction price of €1.0
million related to the freight services provided by the Group to the
customers arising from the sales of copper concentrate under CIF
incoterm.

(2) Provisional pricing impact represented the change in fair value of
the embedded derivative arising on sales of concentrate.

The Company
(Euro 000’s)

Sales of services to related companies
(Note 31.2)

2018

2017

1,323

1,015

1,323

1,015

The Company
(Euro 000’s)

Loss on available-for-sale investments

Gain on disposal of associate

Release of prior year provision (Note 15 (4))

Sales of services to third parties

117

158

2018

117

(49)

2017

(49)

Atalaya Mining Plc.Financial statementsannual report 2018103

7. EXPENSES BY NATURE

The Group
(Euro 000’s)

Operating costs

Royalties

Care and maintenance expenditure

Exploration expenses

Employee benefit expense (Note 8)

Compensation of key management personnel

Auditors’ remuneration – audit

> Other services

> Prior year audit

Other accountants’ remuneration

Consultants’ remuneration

Depreciation of property, plant and equipment (Note 13)

Amortisation of intangible assets (Note 14)

Travel costs

Share option-based employee benefits

Shareholders’ communication expense

On-going listing costs

Legal costs

Public relations and communication development

Provision for impairment

Other expenses and provisions

2018

2017

110,140

281

1,021

17,248

2,061

196

881

97,786

500

15,420

2,804

180

157

10,143

3,287

12,540

4,131

329

125

172

163

450

640

2,292

298

288

157

413

283

782

Total cost of operation, corporate, share based benefits, care and maintenance, and exploration expenses

149,522

135,866

The Company
(Euro 000’s)

Employee benefit expense (Note 8)

Key management remuneration

Auditors’ remuneration – audit

> Other services

> Prior year audit

Other accountants’ remuneration

Consultants’ remuneration

Management fees (Note 31.2)

Depreciation of property, plant and equipment (Note 13)

Travel costs

Share option-based employee benefits

Shareholders’ communication expense

On-going listing costs

Legal costs

Provision for impairment

Other expenses and provisions

Total cost of corporate, share based benefits and impairment

2018

144

864

102

114

213

172

163

423

2,068

4,380

2017

180

1,854

104

288

157

410

583

268

4,042

Atalaya Mining Plc.Financial statementsannual report 2018104

2018

2017

2018

2017

13,615

2,506

1,635

16,184

1,635

8. EMPLOYEE BENEFIT
EXPENSE

9. FINANCE INCOME

The Group
(Euro 000’s)

Wages and salaries

2018

2017

13,357

11,101

Social security and social contributions

3,622

3,250

Employees’ other allowances

Bonus to employees

241

1,038

17,248

15,420

The average number of employees and the number of
employees at year end by office are:

The Group
(Euro 000’s)

Interest income

The Company
(Euro 000’s)

Interest income from interest-bearing
intercompany loans at fair value through
profit and loss (Note 31.2)

Interest income from interest-bearing
intercompany loans at amortised cost
(Note 31.2)

Average

At year end

Interest income

Number of employees

Spain – Full time

Spain – Part time

Cyprus – Full time

2018

379

2017

339

2018

409

2017

363

Total

387

348

417

373

Interest income relates to interest received on bank balances.

10. FINANCE COSTS

The Company
(Euro 000’s)

Wages and salaries

Social security and social contributions

2018

131

144

2017

164

180

The Group
(Euro 000’s)

Interest expense

Other interest

The average number of employees and the number of
employees at year end by office are:

Average

At year end

Number of employees

2018

2017

2018

2017

Cyprus – Full time

Total

Interest on copper concentrate
prepayment (1)

Unwinding of discount on mine
rehabilitation provision (Note 27)

Interest paid on early payment on
receivable from trading

Hedging income

2018

2017

214

253

306

109

113

256

(205)

579

(1) Interest rate US$ 3 months LIBOR + 2.75%.

Atalaya Mining Plc.Financial statementsannual report 2018105

11. TAX

The Group
(Euro 000’s)

Current income tax charge

(Over)/Under provision previous years

Deferred tax asset due to losses available
against future taxable income overprovision
previous years (Note 17)

The Company
(Euro 000’s)

Current income tax charge

Deferred tax charge

2018

2017

4,926

1,622

1,459

2018

2017

1,524

Deferred tax related to utilization of losses
for the year (Note 17)

975

345

Deferred tax income relating to the
origination of temporary differences
(Note 17)

Deferred tax expense relating to reversal of
temporary differences (Note 17)

1,020

TAX LOSSES CARRIED FORWARD

208

262

7,102

3,696

As at 31 December 2018, the Group had tax losses carried
forward amounting to €34.6 million, including tax losses of €24.9
million from the Spanish subsidiary for the period 2008 to 2015.

Cyprus

The tax on the Group’s results before tax differs from the
theoretical amount that would arise using the applicable tax
rates as follows:

(Euro 000’s)

2018

2017

Accounting profit before tax

41,543

21,907

Tax calculated at the applicable tax rates of
the Company – 12.5%

5,193

2,738

Tax effect of expenses not deductible for tax
purposes

2,212

1,449

Tax effect of tax loss for the year

Tax effect of allowances and income not
subject to tax

(4,501)

(4,212)

Over provision for prior year taxes

Effect of higher tax rates in other jurisdictions
of the group

2,710

2,001

Tax effect of tax losses brought forward

(975)

(363)

Additional tax

Deferred tax (Note 17)

Tax charge

174

2,203

7,102

2,066

3,696

The corporation tax rate is 12.5%. Under certain conditions
interest income may be subject to defence contribution at the
rate of 30%. In such cases this interest will be exempt from
corporation tax. In certain cases, dividends received from
abroad may be subject to defence contribution at the rate
of 17% for 2014 and thereafter. Under current legislation, tax
losses may be carried forward and be set off against taxable
income of the five succeeding years.

Companies which do not distribute 70% of their profits after
tax, as defined by the relevant tax law, within two years after the
end of the relevant tax year, will be deemed to have distributed
as dividends 70% of these profits. Special contribution for
defence at 20% for the tax years 2012 and 2013 and 17% for
2014 and thereafter will be payable on such deemed dividends
to the extent that the shareholders (companies and individuals)
are Cyprus tax residents. The amount of deemed distribution is
reduced by any actual dividends paid out of the profits of the
relevant year at any time. This special contribution for defence
is payable by the Company for the account of the shareholders.

Spain

The corporation tax rate for 2018 and 2017 is 25%. The recent
Spanish tax reform approved in 2014 reduces the general
corporation tax rate from 30% to 28% in 2015 and to 25% in
2016, and introduces, among other changes, a 10% reduction in
the tax base subject to equity increase and other requirements.
Under current legislation, tax losses may be carried forward
and be set off against taxable income with no limitation.

Atalaya Mining Plc.Financial statementsannual report 2018106

12. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share
attributable to the ordinary equity holders of the Company is
based on the following data:

At 31 December 2018, there are 1,313,000 options (Note 24)
and no warrants (Note 23) (At 31 December 2017: 1,400,000
options and 262,569 warrants) which have been included
when calculating the weighted average number of shares for
FY2018.

(Euro 000’s)

Parent company

Subsidiaries

Profit attributable to equity holders of the parent

Weighted number of ordinary shares for the purposes of basic earnings per share (‘000)

Basic profit per share (EUR cents/share)

Weighted number of ordinary shares for the purposes of fully diluted earnings per share (‘000)

Fully diluted profit per share (EUR cents/share)

2018

2017

(5,587)

40,302

34,715

(3,477)

21,716

18,239

136,755

117,904

25.4

15.5

138,110

119,485

25.1

15.3

Atalaya Mining Plc.Financial statementsannual report 2018107

13. PROPERTY, PLANT AND
EQUIPMENT

The Group

(Euro 000’s)

2018

COST

At 1 January 2018

Additions

Reclassifications

Land
and buildings

Plant and
equipment

Assets under
construction(4)

Deferred
mining costs(3)

Other
assets(2)

Total

40,995

4,858(1)

145,402

2,324

5,094

At 31 December 2018

45,853

152,820

DEPRECIATION

At 1 January 2018

Charge for the year

At 31 December 2018

4,076

1,996

6,072

13,465

6,850

20,315

11,445

55,659

(5,094)

62,010

22,317

5,220

27,537

3,469

1,212

4,681

Net book value at 31 December 2018

39,781

132,505

62,010

22,856

2017

COST

At 1 January 2017

Additions

Reclassifications

Disposals

At 31 December 2017

DEPRECIATION

At 1 January 2017

Charge for the year

Disposals

At 31 December 2017

Net book value at 31 December 2017

40,188

144,930

407

400

472

40,995

145,402

1,736

2,340

4,076

36,919

5,073

8,392

13,465

131,937

566

11,751

(872)

11,445

13,848

8,469

22,317

1,758

1,711

3,469

18,848

785

220,944

68,061

785

289,005

476

561

224

838

(53)

785

423

(44)

476

309

21,486

10,143

31,629

257,376

200,370

20,627

(53)

220,944

8,990

12,540

(44)

21,486

199,458

(1) Mine rehabilitation assets and Rumbo Royalty Buyout.

(2) Includes motor vehicles, furniture, fixtures and office equipment which are depreciated over 5-10 years.

(3) Stripping costs

(4) Assets under construction at 31 December 2018 was an amount of €62.0 million (2017: €11.4 million) include the capitalisation of costs related to the
Expansion Project and sustaining capital expenses.

The above fixed assets are located mainly in Spain.

Atalaya Mining Plc.Financial statementsannual report 2018The Company

(Euro 000’s)

2018

COST

At 1 January 2018

Disposals

At 31 December 2018

DEPRECIATION

At 1 January 2018

Charge for the year

At 31 December 2018

Net book value at 31 December 2018

2017

COST

At 1 January 2017

Disposals

At 31 December 2017

DEPRECIATION

At 1 January 2017

Charge for the year

Disposals

At 31 December 2017

Net book value at 31 December 2017

(1) Includes furniture, fixtures and office equipment which are depreciated over 5-10 years.

108

Other assets(1)

Total

(53)

(44)

(53)

(44)

THE GROUP

Certain land plots required for the Riotinto Project (the “Project
Lands”) are affected by pre-existing liens and embargos derived
from unpaid obligations of former Project operators or owners
(the “Pre-Existing Debt”).

a). In May 2010 the Group signed an agreement with the Depart-
ment of Social Security in which it undertook to repay, over
a period of 5 years, the €16.9 million Pre-Existing Debt to
the Department of Social Security in exchange for a stay
of execution proceedings for recovery of this debt against
these Project Lands (the “Social Security Agreement”). The
Group granted a mortgage to guarantee the payment of a
total debt of €6,436,661 and two embargos to guarantee the
two payments of a total debt of €6,742,039 and €10,472,612
respectively in favour of Social Security’s General Treasury.
Originally payable over 5 years, the repayment schedule was
subsequently extended until June 2017. The Group repaid
the Department of Social Security on 30 June 2017.

b). The Project Lands are also subject to a lien in the amount
of €5.0 million created in 1979 to secure the repayment of

certain government grants that were in all likelihood paid at
the relevant time by former operators. Relevant court proce-
edings have been followed to strike this lien from title, given
that in the opinion of the Group the right of the government
to reclaim this Pre-Existing Debt has expired due to the
relevant statute of limitations.

c). The Project Lands are also affected by the following

Pre-Existing Debt liens: A €400k mortgage to Oxiana Limited
(that will be paid in due course) and a mortgage of €222k
pre-existing on lands acquired by the Group in August 2012
which has been paid in full.

d). Other land plots owned by the Group, but not required for
The Riotinto Project (the “Non-Project Lands”), are affected
by a Pre-Existing Debt lien of €10.5 million registered by the
Junta de Andalucía. If in the event of execution proceedings
commencing against the Non-Project Lands, the Group would
either negotiate a settlement or allow the execution to proceed
in total satisfaction of the Pre-Existing Debt in question.

During FY2018, the Group capitalised personnel costs amoun-
ting to €756k (FY2017: €259k). No borrowing costs were capita-
lised in the same period.

Atalaya Mining Plc.Financial statementsannual report 2018109

14. INTANGIBLE ASSETS

The Group

(Euro 000’s)

2018

COST

On 1 January 2018

Additions

Disposals

At 31 December 2018

AMORTISATION

On 1 January 2018

Charge for the year

At 31 December 2018

Net book value at 31 December 2018

2017

COST

On 1 January 2017

Additions from acquisition of subsidiary

Additions

At 31 December 2017

AMORTISATION

On 1 January 2017

Charge for the year

At 31 December 2017

Net book value at 31 December 2017

Permits of Rio
Tinto Project (1)

Licences, R&D
and Software

Total

76,521

76,538

7,145

3,225

10,370

66,168

71,521

5,000

76,521

3,072

4,073

7,145

69,376

4,505

2,476

(955)

6,026

181

243

5,783

1,685

126

2,694

4,505

123

181

4,324

81,026

2,493

(955)

82,564

7,326

3,287

10,613

71,951

73,206

5,126

2,694

81,026

3,195

4,131

7,326

73,700

(1) Permits and R&D include an amount of €5.0 million and an amount of €1.9 million respectively that relate to the Touro Project mining rights.

The useful life of the intangible assets is estimated to be
not less than fourteen years from the start of production
(the revised Reserves and Resources statement which was
announced in July 2016 increased the life of mine to 16 ½
years). In July 2018, the Company announced an updated
technical report on the mineral resources and reserves of The
Riotinto Project. The Report increases the open pit mineral
reserves by 29% and stated the life of mine as 13.8 years,
considering the on-going expansion of the processing plant.

The ultimate recovery of balances carried forward in relation
to areas of interest or all such assets including intangibles
is dependent on successful development, and commercial
exploitation, or alternatively the sale of the respective areas.

The Group conducts impairment testing on an annual basis
unless indicators of impairment are not present at the repor-
ting date. In considering the carrying value of the assets at
The Riotinto Project, including the intangible assets and any
impairment thereof, the Group assessed that no indicators
were present as at 31 December 2018 and thus no impairment
has been recognised.

Goodwill of €9,333,000 arose on the acquisition of the remai-
ning 49% of the issued share capital of Atalaya Riotinto Minera
S.L.U. back in September 2008. This amount was fully impaired
on acquisition, in the absence of the mining licence back in
2008.

Atalaya Mining Plc.Financial statementsannual report 201815. INVESTMENT IN
SUBSIDIARIES

The Company

(Euro 000’s)

Opening amount at cost minus provision for impairment

Incorporation(1)

Increase of investment (2)

Disposal of investment (4)

110

2018

3,693

206

2017

3,572

118

Closing amount at cost less provision for impairment

3,899

3,693

Subsidiary
companies

Date of
incorporation/
acquisition

Principal activity

Country of
incorporation

Effective
proportion of
shares held in
2018(5)

Effective
proportion of
shares held in
2017(5)

Atalaya Touro Project (UK) Ltd(1)

10 Mar. 2017

Holding United Kingdom

Atalaya Minasderiotinto Project (UK) Ltd(2)

10 Sep. 2008

Holding United Kingdom

EMED Marketing Ltd

8 Sep. 2008

Trading

EMED Mining Spain SLU(3)

12 Apr. 2007

Exploration

Cyprus

Spain

Eastern Mediterranean Resources (Caucasus) Ltd(4)

11 Nov. 2005

Exploration

Georgia

100%

(1) On 10 March 2017, Atalaya Touro Project (UK) Limited was incorporated. Atalaya Mining Plc is its sole shareholder.

(2) On 16 February 2017, EMED Holdings (UK) Ltd changed its name to Atalaya Riotinto Project (UK) Ltd and changed again to Atalaya Minasderiotinto
Project (UK) Limited on 30 June 2017. During the year 2018 there was an increase amounting to €206k in the investment related to the employee benefit
expenses (2017: €118k).

(3) In December 2017, EMED Mining Spain S.L.U. increased its capital by €300.0 k from its sole shareholder. This investment increase was fully impaired in
the year.

(4) On 15 May 2018, the Group sold Eastern Mediterranean Resources (Caucasus) Ltd. which was fully impaired, by transferring all issued shares.
Following the sale the Company recognised a gain in the net amount of €117k as a result of the release of a prior year provision in the amount of €250k
relating to the subsidiary’s liabilities and the costs incurred of the sale in the total cost of €133k (Note 6).

(5) The effective proportion of shares held as at 31 December 2018 and 2017 remained unchanged other than Atalaya Touro Project (UK) Ltd. which was
incorporated in 2017 and Eastern Mediterranean Resources (Caucasus) Ltd which was sold in 2018.

As security for the obligation on ARM to pay consideration to
Astor under the Master Agreement and the Loan Assignment
Agreement, Atalaya Minasderiotinto Project (UK) Ltd has
granted pledges to Astor Resources AG over the issued capital

of ARM and granted a pledge to Astor over the issued share
capital of Eastern Mediterranean Exploration and Develop-
ment S.L.U. and the Company has provided a parent company
guarantee (Note 28).

Atalaya Mining Plc.Financial statementsannual report 2018111

16. INVESTMENT IN JOINT
VENTURE

Company
name

Principal
activities

Country of
incorporation

Effective
proportion of
shares
held at 31
December 2015

Recursos
Cuenca Minera
S.L.

Exploitation of
tailing dams
and waste
areas resources

Spain

50%

ARM will fund the initial expenditure of a feasibility study up to
a maximum of €2.0 million. Costs are then borne by the joint
venture partners in accordance with their respective owner-
ship interests.

The Group’s significant aggregate amounts in respect of the
joint venture are as follows:

The Group
(Euro 000’s)

Intangible assets

Trade and other receivables

Cash and cash equivalents

2018

2017

Trade and other payables

(115)

ARM entered into a 50/50 joint venture with Rumbo to evaluate
and exploit the potential of the class B resources in the tailings
dam and waste areas at The Riotinto Project. Under the joint
venture agreement, ARM will be the operator of the joint
venture and will reimburse Rumbo for the costs associated
with the application for classification of the Class B resources.

Net assets

Revenue

Expenses

Net loss after tax

17. DEFERRED TAX

The Group

(Euro 000’s)

Deferred tax asset

At 1 January

Deferred tax asset due to losses available against future taxable income (Note 11)

Deferred tax related to utilization of losses for the year (Note 11)

Deferred tax asset due to losses available against future taxable income
overprovision previous years (Note 11)

Deferred tax income relating to the origination of temporary differences (Note 11)

Deferred tax expense relating to reversal of temporary differences (Note 11)

At 31 December

Deferred tax income (Note 11)

Consolidated statement of
financial position

Consolidated income
statement

2018

2017

2018

2017

10,130

12,196

(975)

(345)

(1,459)

(1,020)

(208)

7,927

(262)

10,130

975

1,020

208

345

1,459

262

2,203

2,066

Atalaya Mining Plc.Financial statementsannual report 2018Deferred tax assets are recognised for the carry-forward of
unused tax losses and unused tax credits to the extent that it
is probable that taxable profits will be available in the future
against which the unused tax losses/credits can be utilised.

In addition to recognised deferred income tax asset, the
Group has unrecognised tax losses in Cyprus that are available
to carry forward for 5 years against future taxable income of
the Group companies in which the losses arose, and in Spain
€24.9 million (2017: €28.0 million) which are available to carry
forward indefinitely against future profits. Deferred tax assets
have not been recognised in respect of losses in Cyprus as
they may not be used to offset taxable profits elsewhere in the
Group, and due to the uncertainty in profitability in the near
future to support (either partially or in full) the recognition of
the losses as deferred income tax assets.

18. INVENTORIES

As at 31 December 2018, copper concentrate produced and
not sold amounted to 4,667 tonnes (FY2017: 7,274 tonnes).

112

2018

2017

2,955

4,797

7,381

8,003

486

874

10,822

13,674

The Group
(Euro 000’s)

Finished products

Materials and supplies

Work in progress

Accordingly, the inventory for copper concentrate was €3.0
million (FY2017: €4.8 million). During the year 2018 the Group
recorded cost of sales amounting to €140.5 million (FY2017:
€131.4 million).

Materials and supplies relate mainly to machinery spare parts.
Work in progress represents ore stockpiles, which is ore that
has been extracted and is available for further processing.

Atalaya Mining Plc.Financial statementsannual report 2018113

19. TRADE AND OTHER
RECEIVABLES

Trade receivables are shown net of any interest applied to
prepayments. Payment terms are aligned with offtake agree-
ments and market standards and generally are 7 days on 90%
of the invoice and the remaining 10% at the settlement date
which can vary between 1 to 5 months. The fair value of trade
and other receivables approximate their book values.

The Group

(Euro 000’s)

Non-current trade and other receivables

Deposits

Current trade and other receivables

Trade receivables at amortised cost

Trade receivables at fair value – subject to provisional pricing

Trade receivables from shareholders at fair value – subject to provisional pricing (Note 31.4)

Other receivables from related parties at amortised cost (Note 31.3)

Deposits

VAT receivable

Tax advances (Note 11)

Prepayments

Other current assets

Allowance for expected credit losses

Total current trade and other receivables

The Company

(Euro 000’s)

Non-current trade and other receivables

Receivables from own subsidiaries at amortised cost (Note 31.3)

Receivables from own subsidiaries at fair value through profit and loss (Note 31.3)

Current trade and other receivables

Deposits and prepayments

VAT receivable

Receivables from own subsidiaries at amortised cost (Note 31.3)

Other receivables

Total current trade and other receivables

2018

2017

249

212

12,113

4,498

2,461

13,691

1,208

688

1,060

1,556

221

17,804

1,716

747

23,688

34,213

23,688

34,213

2018

2017

74,796

215,308

290,104

161

389

6,328

242,416

200

6,689

242,824

Atalaya Mining Plc.Financial statementsannual report 2018114

20. AVAILABLE-FOR-SALE
INVESTMENT

These assets were reclassified from available for sale invest-
ment to other financial assets at fair value through OCI. See
Note 2.12 and Note 21.

The Group & the Company
(Euro 000’s)

At 1 January

Addition

Impairment

Loss transferred to reserves (Note 24)

Total

21. OTHER FINANCIAL
ASSETS

2018

2017

261

(49)

(132)

129

The Group & the Company

(Euro 000’s)

Financial asset at fair value through OCI
(see (a)) next)

Total

a) Financial asset at fair value through OCI:

2018

2017

The Group & the Company

(Euro 000’s)

At 1 January (1)

Fair value change recorded in equity (Note 24)

At 31 December

2018

129

(58)

2017

Company name

Principal activities

Country of incorporation

Effective proportion of shares
held at 31 December 2018

Eastern Mediterranean Minerals Ltd

Holder of exploration licences in Cyprus

Exploration and development mining
company listed on AIM

Exploration company

Australia

Cyprus

10.00%

1.80%

0.65%

KEFI Minerals Plc

Prospech Limited

(1) The Group decided to recognise changes in the fair value of available-for-sale investments in Other Comprehensive Income (‘OCI’), as explained in
Note 2.12.

Atalaya Mining Plc.Financial statementsannual report 2018115

22. CASH AND CASH
EQUIVALENTS

The Group

(Euro 000’s)

Cash at bank and in hand

2018

33,070

2017

42,856

As at 31 December 2018, the Group’s operating subsidiary held €250k (FY2017: €250k) as a collateral for bank guarantees, which has
been classified as restricted cash.

Cash and cash equivalents denominated in the following currencies:

(Euro 000’s)

Euro – functional and presentation currency

Great Britain Pound

United States Dollar

The Company

(Euro 000’s)

Cash at bank and on hand

Cash and cash equivalents denominated in the following currencies:

(Euro 000’s)

Euro – functional and presentation currency

Great Britain Pound

United States Dollar

2018

7,649

255

25,166

33,070

2018

826

2018

774

826

2017

517

34,346

7,993

42,856

2017

34,410

2017

34,345

34,410

Atalaya Mining Plc.Financial statementsannual report 2018116

23. SHARE CAPITAL

AUTHORISED CAPITAL

The Company’s authorised share capital is 200,000,000 ordi-
nary shares of £0.075 each.

ISSUED CAPITAL

FY2018

£0.075 were issued, thus creating a share premium of
€405,087.

FY2017

On 7 December 2017, 18,574,555 ordinary shares at £0.075
were issued at a price of £1.67. Upon the issue an amount of
€33,181,585 was credited to the Company’s share premium
reserve.

WARRANTS

a). On 13 February 2018, the Company issued 192,540 new

ordinary shares of £0.075 to Rumbo at a price of £1.867, thus
creating a share premium of €410,146.

The Company has issued warrants to advisers to the Group.
Warrants expired three years after the grant date and have exer-
cise price £1.425. On 1 June 2018, all warrants were exercised.

b). On 13 February 2018, the Company was notified that certain
employees exercised options over 29,000 ordinary shares of
£0.075 at a price of £1.44, thus creating a share premium of
€44,576.

c). On 5 April 2018, the Company entered into an agreement
with Rumbo to purchase the whole royalty agreement for
a total consideration of US$4,750,000 to be paid through
the issuance of 1,600,907 new ordinary shares of £0.075 at
a price of £2.118 per share. After this transaction the share
premium increased by €3,887,128. On 13 April 2018, the new
ordinary shares were issued to Rumbo.

d). On 1 June 2018, 262,569 warrants were exercised at £1.425
per ordinary share. Hence, 262,569 new ordinary shares of

Details of share warrants outstanding as at 31 December 2018:

Number of warrants

Outstanding warrants at 1 January 2018

> Exercised during the reporting period

262,569

(262,569)

Outstanding warrants at 31 December 2018

On 1 June 2018, the Company received notification for the exer-
cise of warrants over 262,569 ordinary shares of £0.075 in the
Company at an exercise price of £1.425 per share. As a result,
the Company received proceeds of £374,160.83 (as d) above).

Authorised

Ordinary shares of £0.075 each

Issued and fully paid

1 January 2017

Issue Date

7 Dec. 2017

Price (£)

1.67

31 December 2017/1 January 2018

Nr. of Shares

Share capital

Share Premium

’000’s

200,000

£ 000’s

15,000

£ 000’s

Total

£ 000’s

15,000

Details

Share placement

Share issue costs

000’s

Euro 000’s

116,679

11,632

277,238

288,870

18,575

1,560

33,182

(843)

34,742

(843)

135,254

13,192

309,577

322,769

Issue Date

13 Feb. 2018

13 Apr. 2018

1 Jun. 2018

Price (£)

Details

1.87

1.44

2.118

1.425

Shares issued to Rumbo (a)

Exercised share options (b)

Rumbo buyout (c)

Exercised warrants (d)

Share issued costs

193

1,601

263

139

410

426

3,887

4,026

405

(5)

427

(5)

31 December 2018

137,340

13,372

314,319

327,691

Atalaya Mining Plc.Financial statementsannual report 2018117

24. OTHER RESERVES

The Group

(Euro 000’s)

At 1 January 2017

Recognition of depletion factor

Recognition of share based payments

Change in fair value of available-for-sale
investments (Note 20)

Share
option

Bonus
share

Depletion
factor(3)

Available-
for-sale
investments(1)

Fair value
reserve of
financial assets
at FVOCI(2)

Non-
distributable
reserve(4)

6,384

208

152

450

(925)

(132)

Total

5,667

450

152

(132)

6,137

5,050

1,446

216

(58)

(1,115)

1,446

12,791

At 31 December 2017

6,536

208

450

(1,057)

Adjustment for initial application of IFRS 9

Recognition of depletion factor

Recognition of non-distributable reserve

Recognition of share based payments

Change in fair value of financial assets at fair
value through OCI (Note 21)

216

5,050

At 31 December 2018

6,752

208

5,500

1,057

(1,057)

Share
option

Bonus
share

Available-for-
sale investments
reserves (1)

Fair value reserve
of financial assets
at FVOCI (2)

The Company

(Euro 000’s)

At 1 January 2017

Recognition of share based payments

Change in fair value of available-for-sale investments (Note 20)

At 31 December 2017

Adjustment for initial application of IFRS 9

Recognition of share based payments

Change in fair value of financial assets at fair value through OCI (Note
21)

6,384

208

152

6,536

208

216

At 31 December 2018

6,752

208

Total

5,667

152

(132)

5,687

216

(1,057)

(58)

(1,115)

5,845

(925)

(132)

(1,057)

1,057

(1) Available-for-sale investments reserve

As at 31 December 2017 this reserve recorded fair value changes on available-for-sale investments. On disposal or impairment, the cumulative changes
in fair value were recycled to the income statement. These assets were reclassified upon adoption of IFRS 9, for further detail see Note 2.12.

(2) Fair value reserve of financial assets at FVOCI

The Group has elected to recognise changes in the fair value of certain investments in equity securities in OCI, as explained in Note 2.12 These changes
are accumulated within the FVOCI reserve within equity. The Group transfers amounts from this reserve to retained earnings when the relevant equity
securities are derecognised.

(3) Depletion factor reserve

At 31 December 2018, the Group has disposed €5,050k as a depletion factor reserve in order to fulfil with the Spanish Corporate Tax Act.

(4) Non-distributable reserve

To comply with Spanish Law on Corporations, the Group needed to record a reserve when profit generated equal to a 10% of profit/(loss) for the year
until 20% of share capital is reached.

Atalaya Mining Plc.Financial statementsannual report 2018Details of share options outstanding as at 31 December 2018:

Grant date

Expiry date

Exercise price – £

Share options

20 Mar. 2014

1 Jun. 2014

23 Feb. 2017

Total

19 Mar. 2019

31 May 2019

22 Feb. 2022

At 1 January 2018

Less options exercised during the year (Note 23 b))

Less options cancelled during the year

31 December 2018

3.60

2.70

1.44

Weighted average exercise price £

Share options

2.15

1.44

2.19

118

400,000

100,000

900,000

1,400,000

(29,000)

(58,000)

1,313,000

On 13 February 2018, the Company was notified that certain
employees exercised options over 29,000 ordinary shares of
£0.075 at a price of £1.44.

On 23 February 2017, the Group announced that 900,000 share
options were granted to Persons Discharging Managerial
Responsibilities and management, of which 800,000 were in
accordance with the incentive share option plan and 100,000
were under a contractual entitlement. These included 150,000
share options granted to a Director, as disclosed in the Corpo-
rate Governance Report.

In general, option agreements contain provisions adjusting
the exercise price in certain circumstances including the allot-
ment of fully paid ordinary shares by way of a capitalisation
of the Company’s reserves, a sub division or consolidation of
the ordinary shares, a reduction of share capital and offers or
invitations (whether by way of rights issue or otherwise) to the
holders of ordinary shares.

The estimated fair values of the options were calculated using
the Black Scholes option pricing model. The inputs into the
model and the results are as follows:

Grant date

23 Feb. 2017

1 Jun. 2014

20 Mar 2014

Weighted
average share
price £

Weighted
average exercise
price £

Expected
volatility

Expected life
(years)

Risk Free rate

Expected
dividend yield

Estimated Fair
Value £

1.440

2.700

3.600

1.440

2.700

3.600

51.8%

62.9%

64.2%

0.6%

2.0%

Nil

0.666

0.597

0.705

The volatility has been estimated based on the underlying volatility of the price of the Company’s shares in the preceding twelve
months.

Atalaya Mining Plc.Financial statementsannual report 2018119

25. NON-CONTROLLING
INTEREST

26. TRADE AND OTHER
PAYABLES

(Euro 000’s)

Opening balance

On acquisition of a subsidiary

Share of results for the year

Closing balance

2018

4,474

(274)

4,200

2017

4,502

(28)

4,474

The Group
(Euro 000’s)

Non-current trade and other payables

Land options

Government grant

2018

2017

The Group has a 10% interest in Cobre San Rafael, S.L., while
the remaining 90% is held by a non-controlling interest (Note
2.3 (b) (2)). The significant financial information with respect to
the subsidiary before intercompany eliminations as at and for
the year ended 31 December 2018 is as follows:

(Euro 000’s)

Non-current assets

Current assets

Non-current liabilities

Current liabilities

Equity

Revenue

Loss for the year and total
comprehensive income

2018

7,024

456

2,813

4,667

(304)

2017*

5,127

1,087

1,242

4,972

(31)

* 10% interest in Cobre San Rafael, S.L. was acquired by the Group in
July 2017.

Cobre San Rafael, S.L. was established on 13 June 2016.

Current trade and other payables

Trade payables

53,098

64,234

Land options and mortgage

Accruals

VAT payable

Other

The Company
(Euro 000’s)

Current trade and other payables

Accruals

Payable to own subsidiaries (Note 31.3)

Other

791

3,382

791

2,660

291

57,271

67,983

2018

2017

2,200

5,851

8,069

1,287

4,614

5,917

Trade payables are mainly for the acquisition of materials,
supplies and other services. These payables do not accrue
interest and no guarantees have been granted. The fair value
of trade and other payables approximate their book values.

The Group’s exposure to currency and liquidity risk related to
liabilities is disclosed in Note 3.

Trade payables are non-interest-bearing and are normally
settled on 60-day terms.

Atalaya Mining Plc.Financial statementsannual report 201827. PROVISIONS

The Group

(Euro 000’s)

1 January 2017

Additions

Change in discount rate

Finance cost (Note 10)

31 December 2017/1 January 2018

Additions

Revision of provision

Finance cost (Note 10)

31 December 2018

(Euro 000’s)

Non-Current

Current

Total

120

Total

5,092

620

(98)

113

5,727

978

(225)

6,519

2017

5,727

Legal

Rehabilitation

213

(92)

127

5,092

407

(98)

113

5,514

972

(133)

6,392

2018

6,519

REHABILITATION PROVISION

Rehabilitation provision represents the accrued cost
required to provide adequate restoration and rehabilita-
tion upon the completion of production activities. These
amounts will be settled when rehabilitation is undertaken,
generally over the project’s life.

The discount rate used in the calculation of the net present
value of the provision as at 31 December 2018 was 1.87%,
which is the 15-year Spain Government Bond rate (2017:
1.87%). An inflation rate of 1.5% is applied on annual basis.

The expected payments for the rehabilitation work are as
follows:

(Euro 000’s)

Expected payments for rehabilitation of the mining site

Between
1 – 5 Years

457

Between
6 – 10 Years

1,974

Between
10 – 15 Years

3,961

LEGAL PROVISION

The Group has been named as defendant in several legal
actions in Spain. The outcome of which is not determinable
as at 31 December 2018. Management has reviewed

individually each case and made a provision of €127k (€213k
in 2017) for these claims, which has been reflected in these
consolidated financial statements. (See Note 32).

Atalaya Mining Plc.Financial statementsannual report 2018121

28. DEFERRED
CONSIDERATION

As at 31 December 2018, no consideration has been paid.

The amount of the liability recognised by the Group and
Company is €53 million and €9.1 million respectively. The effect
of discounting remains insignificant, in line with prior year’s
assessment, and therefore the Group has measured the liability
for the Astor deferred consideration on an undiscounted basis.

29. ACQUISITION,
INCORPORATION
AND DISPOSALS OF
SUBSIDIARIES

2018

Acquisition and incorporation of subsidiaries

Disposals of subsidiaries

On 15 May 2018, the Group sold Eastern Mediterranean
Resources (Caucasus) Ltd. which was fully impaired, by
transferring all issued shares. The net effect of the gain in the
income statement arose from the release of the prior year
provision of €250k (Georgian Tax liability). The total costs for
the sale were €75k, paid to the buyer in addition to €58k rela-
ting consulting costs (Note 6).

2017

Incorporation of Atalaya Touro (UK) Limited

On 10 March 2017, Atalaya Touro (UK) Limited was incorpo-
rated. Atalaya Mining Plc is its sole shareholder. In July 2017,
Atalaya Touro (UK) Limited executed the option and acquired
10% of Cobre San Rafael, S.L. a company which owns the
mining rights of The Touro Project.

Acquisitions

In July 2017, the Group announced that it had executed the
option to acquire 10% of the share capital of Cobre San Rafael
S.L., (“CSR”), a wholly owned subsidiary of Explotaciones
Gallegas S.L. (“EG”), part of the F. GOMEZ company. This is part
of an earn-in agreement (the “Agreement”), which will enable
the Group to acquire up to 80% of CSR.

Following the acquisition of the initial 10% of CSR’s share
capital, the agreement included the following four phases:

> Phase 1 – The Group paid €0.5 million to secure the exclusi-
vity agreement and will continue to fund up to a maximum
of €5.0 million to get the project through the permitting and
financing stages.

> Phase 2 – When permits are granted, the Group will pay €2.0
million to earn-in an additional 30% interest in the project
(cumulative 40%).

> Phase 3 – Once development capital is in place and cons-
truction is under way, the Group will pay €5.0 million to
earn-in an additional 30% interest in the project (cumulative
70%).

> Phase 4 – Once commercial production is declared, the
Group will purchase an additional 10% interest in the
project (cumulative 80%) in return for a 0.75% Net Smelter
Return (NSR) royalty, with a buyback option.

The Agreement has been structured so that the various
phases and payments will only occur once the project is
de-risked, permitted and in operation.

There were neither acquisition nor incorporation of subsidia-
ries during the year.

In July 2017, the Group executed the acquisition of 10% of
CSR, which has been accounted for as a subsidiary with

Atalaya Mining Plc.Financial statementsannual report 2018122

a corresponding non-controlling interest of 90% as the
Company has control over the entity (Note 2.3 (b) (2)).

The amount of €500.000 paid during FY2017 for the acquisition
of the initial 10% of CSR share capital, represents the fair value
of the net assets of CSR on the date of acquisition giving rise to
no goodwill. The non-controlling interest is set out in Note 25.

Disposals of subsidiaries

On 15 May 2018, the Group sold Eastern Mediterranean
Resources (Caucasus) Ltd. which was fully impaired, by
transferring all issued shares. Following the sale, the Company
recognised a gain in the net amount of €117k as a result of
the release of a prior year provision in the amount of €250k
relating to the subsidiary’s liabilities and the costs incurred of
the sale in the total cost of €133k (Note 6).

30. WIND-UP OF
SUBSIDIARIES

There were no operations wound-up during FY2018 and FY2017.

31. GROUP INFORMATION
AND RELATED PARTY
DISCLOSURES

3 1.0 INF O R M AT IO N A B O U T S UB S IDI A RIE S

These audited consolidated financial statements include:

Subsidiary
companies

Parent

Principal activity

Country of
incorporation

Effective proportion of
shares held

Atalaya Touro Project (UK) Ltd

Atalaya Mining Plc

Holding

United Kingdom

Atalaya Minasderiotinto Project (UK) Ltd

Atalaya Mining Plc

Holding

United Kingdom

EMED Marketing Ltd

Atalaya Mining Plc

Trading

Cyprus

EMED Mining Spain S.L.U.

Atalaya Mining Plc

Exploration

Atalaya Riotinto Minera S.L.U.

Atalaya Minasderiotinto Project
(UK) Limited

Production

Eastern Mediterranean Exploration and
Development S.L.U.

Atalaya Minasderiotinto Project
(UK) Limited

Exploration

Cobre San Rafael, S.L. (1)

Atalaya Touro (UK) Limited

Exploration

Recursos Cuenca Minera S.L.U.

Atalaya Riotinto Minera SLU

Exploration

Fundacion Atalaya Riotinto

Atalaya Riotinto Minera SLU

Trust

Atalaya Servicios Mineros, S.L.U.

Atalaya Minasderiotinto Project
(UK) Limited

Dormant

Spain

100%

10%

J-V

100%

(1) Cobre San Rafael, S.L. is the entity which hold the mining rights of The Touro Project. The Group has control in the management of Cobre San
Rafael, S.L., including one of the two directors, management of the financial books and the capacity of appointment the key personnel (Note 2 (b) (2)).

Atalaya Mining Plc.Financial statementsannual report 2018123

The following transactions were carried out with related
parties:

(Euro 000’s)

Directors’ remuneration and fees

Director’s bonus (1)

Share option-based benefits to directors

Key management personnel fees

Key management bonus (1)

Share option-based and other benefits to key management personnel

3 1.1 C O MP E N S AT IO N O F K E Y M A N A GE ME N T
P E R S O NNE L

The total remuneration and fees of Directors (including execu-
tive Directors) and other key management personnel was as
follows:

The Group

The Company

2018

922

280

462

235

2,026

2017

742

245

467

1,270

2,804

2018

454

116

150

730

2017

357

232

1,232

1,854

(1) These amounts relate to the approved performance bonus for 2017 by the BoD following the proposal of the CGNC Committee. As at 31 December
2018, the Group and company has accrued for and expensed their best estimate for the 2018 performance bonus, which is in line with the 2017 approved
performance bonus. The 2018 estimates are not included in the table above as this is yet to be approved by the BoD. There is no certain or guarantee
that the BoD will approve a similar amount for 2018 performance.

At 31 December 2018 amounts due to Directors, as from the
Group, are €0.5 million (€0.5 million at 31 December 2017)
and €0.3 million (€0.7 million at 31 December 2017) to key
management.

At 31 December 2018 amounts due to Directors, as from the
Company, are €nil million (€nil million at 31 December 2017)
and €0.2 million (€0.6 million at 31 December 2017) to key
management.

Share-based benefits

In 2018, the directors and key management personnel have
not been granted any options (2017: 345,000 options) (Note
24).

During 2018 the directors and key management personnel
have not been granted any bonus shares (2017: nil).

Atalaya Mining Plc.Financial statementsannual report 2018124

31.2 TRANSACTIONS WITH
SHAREHOLDERS AND
RELATED PARTIES

The Group
(Euro 000’s)

Trafigura– Revenue from contracts

Freight services

2018

2017

26,234

28,924

26,234

28,924

Losses relating provisional pricing within sales

(334)

(805)

Trafigura – Total revenue from contracts

25,900

28,119

Orion Mine Finance (Master) Fund I LP
(“Orion”) – Sales of goods

(4)

25,900

28,115

XGC was granted an offtake over 49.12% of life of mine
reserves as per the NI 43-101 report issued in September
2016. Similarly, Orion was granted an offtake over 31.54%
and Trafigura 19.34% respectively of life of mine reserves as
per the same NI 43-101 report. In November 2016, the Group
was notified and consented the novation of the Orion offtake
agreement as Orion reached an agreement with a third party
(XGC) to transfer the rights over the concentrates. In December
2017, the Group was notified and consented the novation of
XGC offtake agreement as XGC reached an agreement with a
third party (LDC) to transfer the rights over the concentrates.

3 1.3 Y E A R -E ND B A L A N C E S W I T H R E L AT E D
PA R T IE S

The Company

(Euro 000’s)

Sales of services (Note 5):

> EMED Marketing Limited

> Atalaya Minasderiotinto Project (UK) Limited

Purchase of services (Note 7):

Atalaya Riotinto Minera SLU

Finance income (Note 9):

Atalaya Minasderiotinto Project (UK) Limited – Finance income from interest-bearing loan :

> Zero coupon note – at amortised cost

> Participative loan – at fair value through profit and loss

> Credit facility – at amortised cost

The Group

(Euro 000’s)

Current assets - Receivable from related parties (Note 19):

Recursos Cuenca Minera S.L.

The above balances bear no interest and are repayable on demand.

2018

2017

749

574

1,323

213

1,760

13,615

746

16,121

565

450

1,015

1,635

2018

2017

Atalaya Mining Plc.Financial statementsannual report 2018125

The Company

(Euro 000’s)

Non-current assets – Loan from related parties at FV through profit and loss (Note 19):

Atalaya Minasderiotinto Project (UK) Limited – Participative Loan (1)

Total (5)

Non-current assets – Loans and receivables from related parties at amortised cost (Note 19):

Atalaya Minasderiotinto Project (UK) Limited – Credit Expansion Loan (2)

Atalaya Minasderiotinto Project (UK) Limited – Zero Coupon Note (3)

Atalaya Riotinto Minera SLU (4)

EMED Marketing Limited (4)

Atalaya Minasderiotinto Project (UK) Limited (4)

Total (5)

Current assets – Loans and receivables from related parties at amortised cost (Note 19):

Atalaya Minasderiotinto Project (UK) Limited (4)

Atalaya Minasderiotinto Project (UK) Limited – Zero Coupon Note (3)

Atalaya Riotinto Minera SLU (4)

Atalaya Touro (UK) Limited (4)

EMED Mining Spain SL (4)

Total (5)

(1) This balance bears interest of 6.75% (FY2017: Nil).

(2) This balance bears interest of US$ 6month LIBOR + 3.25% (FY2017: Nil).

(3) The zero coupon note bears interest of 7.5% (FY2017: 7.5%).

(4) These receivables bear no interest

2018

2017

215,308

38,743

24,798

9,117

1,563

575

74,796

5,230

1,098

6,328

209,293

23,038

9,350

697

242,416

(5) These balances are repayable on demand. However management will not claim any repayment in the following twelve months period after the
release of the current consolidated financial statements.

The Company

(Euro 000’s)

Payable to related party (Note 26):

EMED Marketing Limited

EMED Mining Spain S.L.

Atalaya Riotinto Minera SLU

The above balances bear no interest and are repayable on demand.

2018

2017

5,376

262

213

5,851

4,614

Atalaya Mining Plc.Financial statementsannual report 20183 1.4 Y E A R -E ND B A L A N C E S W I T H S H A R E H O L D E R S

(Euro 000’s)

Receivable from shareholders (Note 19):

Trafigura – Debtor balance –subject to provisional pricing

126

2018

2017

2,461

1,556

The above debtor balance arising from the pre-commissioning
sales of goods bear no interest and is repayable on demand.

32. CONTINGENT
LIABILITIES

JUDICIAL AND ADMINISTRATIVE CASES

In the normal course of business, the Group may be involved
in legal proceedings, claims and assessments. Such matters
are subject to many uncertainties, and outcomes are not
predictable with assurance. Legal fees for such matters are
expensed as incurred and the Group accrues for adverse
outcomes as they become probable and estimable.

The Junta de Andalucía notified the Group of another disci-
plinary proceeding for unauthorised discharge in 2014. The
Group submitted the relevant defence arguments on 10 March
2015 but has had no response or feedback from the Junta de
Andalucía since the submissions. Based on the time that has
lapsed without a response, it is expected that the outcome of
this proceedings will also be favourable for the Group. Once
the necessary time has lapsed, the Group will ask for the Admi-
nistrative File to be dismissed.

RECEIPT OF RULING OF CLAIM MADE BY AN ENVIRONMENTAL GROUP

In July 2014, EeA had filed a legal claim to JdA with a request
to declare null the Unified Environmental declaration (in
Spanish, Authorization Ambiental Unificada, or “AAU”) granted

to Atalaya Riotinto Minera, S.L.U. dated 27 March 2014, which
was required in order to secure the required mining permits
for Proyecto Riotinto. The judgment, in spite of annulling the
AAU on procedural grounds, made very clear that the AAU was
correct and therefore, rejected the issues raised by EeA and
confirmed the decision of JdA not to suspend the AAU.

33. COMMITMENTS

There are no minimum exploration requirements at The
Riotinto Project. However, the Group is obliged to pay local
land taxes which currently are approximately €235,000 per
year in Spain and the Group is required to maintain the
Riotinto site in compliance with all applicable regulatory
requirements.

Atalaya Mining Plc.Financial statementsannual report 2018Following the issue of the New Ordinary Shares, the total
number of Ordinary Shares in issue is 137,339,126.

35. EVENTS AFTER THE
REPORTING PERIOD

On 19 March 2019, 200,000 shares options expired without
being exercised. The share options were granted on 20 March
2014 at an exercise price of 360.0 pence.

On 20 March 2019, the Board of Directors approved the
disposal of the 10% free-carried investment of Atalaya in
Eastern Mediterranean Minerals (Cyprus) Limited (“EMM”) an
exploration company with interest in Cyprus.

On 29 March 2019, Atalaya announced the receipt of notifica-
tion from the Supreme Court in Spain that it does not have
jurisdiction over the appeal made by the Junta de Andalucía
and the Company, which voluntarily joined the appeal as
co-defendant. Therefore, the previously announced Ruling
made by the Tribunal Superior de Justicia de Andalucía
remains valid. Refer to Note 32.

127

ARM has entered into a 50/50 joint venture with Rumbo to
evaluate and exploit the potential of the class B resources
in the tailings dam and waste areas at The Riotinto Project
(mainly residual gold and silver in the old gossan tailings).
Under the joint venture agreement, ARM will be the operator of
the joint venture, will reimburse Rumbo for the costs asso-
ciated with the application for classification of the Class B
resources and will fund the initial expenditure of a feasibility
study up to a maximum of €2.0 million. Costs are then borne
by the joint venture partners in accordance with their respec-
tive ownership interests.

34. SIGNIFICANT EVENTS

BUYOUT OF RUMBO ROYALTY

In July 2012, Atalaya Riotinto Minera, S.L. signed a royalty
agreement with Rumbo 5 Cero, S.L. (“Rumbo”), at which
Rumbo was entitled to receive a royalty payment of up to
US$0.25 million per quarter if the average copper sales price
or LME price for the period is equal to or above US$2.60/lb for
ten years up to a maximum amount of US$10.0 million. As the
average copper price for the third and fourth quarter of 2017
was above US$2.60/lb, the Company was required to pay a
royalty amounting to US$0.5 million to Rumbo. On 8 February
2018, the companies agreed to satisfy this payment through
an issuance of 192,540 new ordinary shares at Stg £0.075.

On 5 April 2018, the Company signed a contract with Rumbo to
purchase the remaining royalty agreement for a total consi-
deration of US$4.75 million to be paid through the issuance
of 1,600,907 new ordinary shares of Stg £0.075. The shares
were issued at the 30-day volume weighted average price
(the “Calculation Period”) of £2.118 per share and using the
average USD to GBP exchange rate for the Calculation Period
of 1.4008. ARM also agreed to pay the VAT associated with
the transaction through a cash payment of US$997,500 to
Rumbo, which is recoverable by ARM upon an ordinary course
application for a VAT reclaim from the Spanish tax authorities.
(See Note 13).

EXERCISE OF WARRANTS AND ISSUE OF EQUITY

In May, the Company received notification for the exercise of
warrants over 262,569 ordinary shares of £0.075 at an exercise
price of $1.425 per share. As a result, the Company received
proceeds of £374,160.83.

Application was made for the 262,569 shares (“New Ordinary
Shares”) to be admitted to trading on AIM and the dealings in
the New Ordinary Shares commenced on 7 June 2018.

Atalaya Mining Plc.Financial statementsannual report 2018128

Atalaya Mining Plc.Financial statementsannual report 2018129

Atalaya Mining Plc.Financial statementsannual report 2018130

SHARE-
HOLDER
INFORMATION

Shareholder informationAtalaya Mining Plc.annual report 2018131

GLOSSARY
OF TERMS

Currency
abbreviations

Definitions
and
conversion
table

US$ / USD or $

US Dollars

$000

Thousand US
dollars

Million US
Dollars

Sterling Pound

£000

£m

Thousand
Sterling Pounds

Million Sterling
Pounds

€ / EUR

Euro

€000 / €k

Thousand Euros

€m

€nil

Million Euros

Zero Euros

FY2018 /
FY2018

FY2017 /
FY2017

Twelve month
period ended 31
December 2018

Twelve month
period ended 31
December 2017

Pound

Troy ounce

‘000 m³

Thousand cubic
metres

Tonne

DMT

Dry Metric Tonne

‘000 tonnes

Thousand metric
tonnes

1 Kilogramme/
(kg)

2.2046 pounds

Definitions
and
conversion
table

1000
Kilogrammes/
(´000 kg)

1 Kilometre
(km)

2,204.6 pounds

0.6214 miles

1 troy ounce

31.1 grams

Chemical
Symbols

Business,
Finance and
Accounting

AAU

Atalaya or the
Company

Atalaya Group
or Group

AFRC

AGM

AIM

Hectare

Foot

Copper

Silver

Gold

Authorization
Ambiental
Unificada
(Unified
Environmental
Declaration)

Atalaya Mining
Plc, a company
incorporated in
Cyprus under
the Companies
law, cap. 113

Atalaya Mining
Plc and its
subsidiaries

Audit and
Financial Risk
Committee

Annual General
Meeting

Alternative
Investment
Market of the
London Stock
Exchange

Shareholder informationAtalaya Mining Plc.annual report 2018Business,
Finance and
Accounting

Business,
Finance and
Accounting

AISC

All In Sustaining
Cost

Annual Report

ARM

Atalaya Riotino
Minera, S.L.U.

Articles

Average head
grade

BoD or Board
of Directors

The articles of
association of
Atalaya Mining
Plc.

Average ore
grade fed
into the mill,
expressed in %
of weight

The Board of
Directors of the
Company

CAPEX

Capital
Expenditure

Cash Cost

The cost to
produce one
pound of copper

CEO

Chief Executive
Officer

C. Eng

Chartered
Engineer

CFO

COO

Chief Financial
Officer

Chief
Operational
Officer

COF

Cost of Freight

CIF

CIT

CIP

Cost Insurance
and Freight

Corporate
Income Tax

Carriage and
Insurance
paid to

CGU

Cash Generating
Unit

CGNCC

Code of
Conduct

Corporate
Governance,
Numeration and
Compensation
Committee

Atalaya’s Code
of Business
Conduct and
Ethics

Cont.

Continued

132

CSR

Cobre San Rafael
S.L.

Directors

EBITDA

ECL

EeA

EIR

EMED
TARTESSUS

The Directors of
Atalaya for the
reporting period

Earnings Before
Interest Tax
Depreciation
and
Amortisation

Expected Credit
Loss

Ecologistas en
Accion

Effective Interest
Rate Method

Eastern
Mediterranean
Exploration &
Development
TARTESSUS S.L.

Etc.

Et cetera

European Union

FIFO

First In First Out

Financial
statements

Consolidated
and company
financial
statements of
Atalaya Mining
Plc.

FOB

Free on Board

Fair Value

FVOCI

FVPL

GAAP

Group

H1, H2

Fair Value
Through Other
Comprehensive
Income

Fair Value
Through Profit
or Loss

Generally
Accepted
Accounting
Policies

Atalaya Mining
plc and its
subsidiaries

Six month
periods ending
30th June and
31st December

Shareholder informationAtalaya Mining Plc.annual report 2018133

Business,
Finance and
Accounting

IAS

ie.

IFRS

IPO

JdA

International
Accounting
Standards

Id est
(explanatory
information)

International
Financial
Reporting
Standards

Initial Public
Offering

Junta de
Andalucía

KPI´s

Key Performance
Indicators

LDC

Louis Dreyfus
Company

LIBOR

The British
Bankers’
Association
Interest
Settlement Rate
for the relevant
currency

LITFR

Lost Injury Time
Frequency Rate

Ltd.

Limited

LLC

Limited Liability
Company

Limited
partnership

London Stock
Exchange / LSE

London Stock
Exchange plc

MBA

Master’s in
Business
Administration

NED´s

Non-Executive
Directors

NPV

Net Present
Value

Number

OCI

Ordinary
Shares

Other
Comprehensive
Income

Ordinary Shares
of 10 pence each
in the capital of
the Company

Ph.D.

Doctor of
Philosophy

Business,
Finance and
Accounting

PRC

PFS

Plc.

Physical Risk
Committee

Pre-Feasibility
Study

Public limited
company

P&L

Profit and Loss

P&P reserves

Q1, Q2, Q3, Q4

QCA

SIC

Shareholders

SLU

Proven and
Probable
reserves

Three month
periods ending
31st March,
30th June, 30th
September and
31st December

Quoted
Companies
Alliance

Quotation
Period

Standard
Interpretations
Committee
which were
endorsed by
the IAS

Holders of
Ordinary Shares

Sociedad
Limitada
(private limited
company)

Sociedad
Limitada
Unipersonal
(limited
partnership)

TSX

Toronto Stock
Exchange

United
Kingdom or UK

United States
or US

the United
Kingdom of
Great Britain and
Northern Ireland

the United
States of
America, its
territories and
possessions,
any state of the
United States
of America and
the District of
Columbia

UOP

Unit of
Production

Shareholder informationAtalaya Mining Plc.annual report 2018134

Proven and
Probable
reserves

Removal of
overburden
or waste rock
overlying an
ore body in
preparation for
mining by open
pit methods

Materials left
over after the
process of
separating
the valuable
fraction from
the uneconomic
fraction of an ore

Treatment
Charge and
Refinement
Charge

Versatile Time
Electomagnetic
mapping

Tailings

TC/RC

VTEM

Three
Dimensional

Business,
Finance and
Accounting

VAT

Value Added Tax

Working Capital

XGC

Yanggu
Xiangguang
Copper Co. Ltd

Mining terms

P&P Reserves

Stripping

Mining terms

Average head
grade

Concentrate

Contained
copper

Grade

Average ore
grade fed
into the mill,
expressed in %
of weight

A fine powdery
product of the
milling process
containing a
high percentage
of valuable
metal

Represents total
copper in a
mineral reserve
before reduction
to account
for tonnes
not able to be
recovered by
the applicable
metallurgical
process

The amount of
metal in each
tonne of ore,
expressed as a
percentage of
valuable metal

Mtpa

Million tonnes
per annum

NI 43-101

Open pit

Ore body

National
Instrument
43-101, standard
of disclosure for
mineral projects
according
to Canadian
guidelines

A mine where
the minerals are
mined entirely
from the surface.
Also referred to
as open-cut or
open-cast mine

A sufficiently
large amount
of ore that
can be mined
economically

Shareholder informationAtalaya Mining Plc.annual report 2018135

SHAREHOLDER
INQUIRIES

Board of
Directors:

Corporate
brokers:

Roger Davey
Chairman. Non-
executive chairman
Alberto Lavandeira
Managing director and
CEO

Hui (Harry) Liu
Non-executive director

Dr. Jose Sierra Lopez
Non-executive director

Jesus Fernandez
Non-executive director

Damon Barber
Non-executive director

Dr. Hussein Barma
Non-executive director

Jonathan Lamb
Non-executive director

Stephen Scott
Non-executive director

canaccord genuity ltd.

41 Lothbury
London EC2R 7AE

—

bmo capital markets

95 Queen Victoria Street
London, EC4V 4HG

NOMAD:

canaccord genuity ltd.

41 Lothbury
London EC2R 7AE

Investor
Relations:

Carina Corbett

4c communications ltd.

Hudson House
8 Tavistock Street
London WC2E 7PP

+44 (0) 203 170 7973

Public
Relations:

Elisaberh Cowell

newgate
communications

Sky Light City Tower
50 Basinghall Street
London EC2V 5DE

+44 (0) 207 680 6550

Registrars:

cymain registrars ltd.

26 Vyronos Avenue
1096 Nicosia, Cyprus

Depositary
/ transfer
agent:

United Kingdom
computershare
investor services plc.

The Pavilions
Bridgwater
Bristol BS13 8AE

Canada
computershare
investor services inc.

100 Universtity Avenue
8th Floor, North Tower
Toronto, Ontario M5J
2Y1

Company
secretary:

inter jura cy (services)
limited

1 Lampousa Street,
1095 Nicosia, Cyprus

Group
Auditor:

ernst & young cyprus
ltd.

Jean Nouvel Tower,
6 Stasinos Avenue,
P.O.Box 21656,
1511, Nicosia,
Cyprus

Registered
office:

1 Lampousa Street,
1095 Nicosia, Cyprus

Shareholder informationAtalaya Mining Plc.annual report 2018spain office
La Dehesa s/n
Minas de Riotinto, 21660
Huelva, Spain

registered office
1, Lambousa Street.
Nicosia 1095,
Cyprus

cyprus office
3, Ayiou Demetriou Street,
Acropolis 2012
Nicosia, Cyprus