2019
Annual
Report
For the year ended 31 December 2019
2019
Annual
Report
For the year ended 31 December 2019
Atalaya Mining Plc.
Annual Report
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Annual Report
c o n t e n t
Atalaya Mining Plc.
Content
Company Overview.......................... .. . ... . . 10
Corporate Governance Report . .. . .. ..... 51
Performance highlights .................................. .. .. . ... 11
Board of Directors . .. . .. . .. . .. . .. . .. . .. . . .. .. . ... . .. .. .. .. . ... ..... 52
Atalaya at Glance ............................................. . ... . . 14
Audit and Financial Risk Committee . .. . .. . .. . .. . .. . .. . ...... 63
Letter from the Chairman ............ . .. . .. . 16
Corporate, Governance, Nominating and
Compensation Committee Report . .. . .. . .. . .. . .. . .. . . .. ...... 65
Physical Risks Committee Report . .. . .. . .. . .. . .. . .. . . .. ...... 70
Management Report ....................... . .. .. . . 19
Basis of Reporting ......................................... . ... . ... 20
Operational Review ....................................... . ... . ... 21
Financial Review ........................................... ... . ... . 24
Financial Statements . .. . .. . .. . .. . .. . .. . .. . . ...... 73
Independent Auditor’s report . .. . .. . .. . .. . .. . .. . .. . . .. .. . ...... 74
Consolidated and Company Statements of
Comprehensive Income . .. . .. . .. . .. . .. . .. . .. . . .. .. . ... . .. .. ...... 80
Risk Report ................................................... .. . . . .. . 30
Our business model and strategy ..................... .. .. . . .. 36
Consolidated and Company Statements of
Financial Position . .. . .. . .. . .. . .. . .. . . .. .. . . ... . .. .. .. .. . ... . ....... 81
Market Overview ........................................... ... . ... . 38
Consolidated Statement of Changes in Equity . .. . .. . ..... 82
Statement of Corporate Governance ................. . .. . .. . 39
Company Statement of Changes in Equity . .. . .. . .. . .. ..... 83
Consolidated Statement of Cash Flows . .. . .. . .. . .. . .. . ..... 84
Sustainability Report ..................... .. . .. .. . 43
Company Statement of Cash Flows . .. . .. . .. . .. . .. . .. . . ...... 85
Social development ......................................... . ... . .. 45
Health and Safety .......................................... . ... . ... 47
Environment ................................................... . . . . . . 47
Notes to the Consolidated and Company
Financial Statements . .. . .. . .. . .. . .. . .. . . .. .. . . ... . .. .. .. .. . ...... 87
Shareholder information . .. . .. . .. . .. . .. . .. ... 147
Glossary of terms . .. . .. . .. . .. . .. . .. . . .. .. . . ... . .. .. .. .. . ... . ..... 148
Shareholder Enquiries . .. . .. . .. . .. . .. . .. . . .. .. . . ... . .. .. .. .. . ... 152
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Atalaya Mining Plc.
c o m p a n y o v e r v i e w
Annual Report
Company
Overview
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Atalaya Mining Plc.company overviewAnnual Report Annual Report
c o m p a n y o v e r v i e w
Atalaya Mining Plc.
Performance highlights
— Operational highlights
Unit
2020 Guidance
2019
2018
Copper concentrate
Copper contained in
concentrate (1)
Payable copper contained
in concentrate
t
t
t
-
195,072
180,661
55,000-58,000
44,950
42,114
-
42,935
40,306
(1) The Company is aware that the COVID-19 pandemic may still have further effects of impact on how the
Company can manage it operations and is accordingly keeping its guidance under regular review. Should the
Company consider the current guidance no longer achievable, then the Company will provide a further update.
Full year 2019 copper
production increased by 6.7%
above 2018
2020 guidance targeting an improvement
on 2019 production
Expansion to 15Mtpa at Proyecto Riotinto
is completed
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Atalaya Mining Plc.company overviewAnnual Report Atalaya Mining Plc.
c o m p a n y o v e r v i e w
Annual Report
— Financial Highlights
Units
(€k)
(€k)
2019
2018
187,868
189,476
61,333
53,542
($/lb payable)
1.80
2.14
1.94
2.26
3,598
8,435
8,077
33,070
Revenues
EBITDA
Cash cost
All-in sustaining cost
($/lb payable)
Working capital
Cash at bank
(€k)
(€k)
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Annual Report
C O M P A N Y O V E R V I E W
Atalaya Mining Plc.
Higher EBITDA compared to previous
2019
year amounting to €61.3 million
(2018: €53.5 million)
€8.1 million cash at bank as
at 31 December 2019
(2018: 33.1 million)
Cash cost improvement from 2019
expectations. Cash costs and AISC for
2019 were US$1.80/lb and US$2.14/lb
of payable copper, respectively
(2018: US$1.94/lb and $2.26/lb)
61,333
€K
53,542
€K
2018
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Atalaya at Glance
Atalaya 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.
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Atalaya Mining Plc.company overviewAnnual Report Annual Report
C O M P A N Y O V E R V I E W
Atalaya Mining Plc.
à Strong pipeline of low risk growth projects
à Proven management team
à Supportive strategic shareholders
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 was completed in 2019. Atalaya also owns 10% of
Proyecto Touro, a brownfield copper project in northwest Spain.
The Company’s and its subsidiaries’ business are 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.
Proyecto Riotinto
Atalaya owns 100% of the Proyecto
Riotinto copper mine in Huelva.
The Expansion Project to 15Mtpa
reached full mechanical completion
in August 2019 and was fully commis-
sioned by January 2020.
Proyecto Touro
In 2017, Atalaya signed a phased,
earn-in agreement for up to 80%
ownership of Proyecto Touro, a brown-
field copper project in northwest
Spain.
In February 2020 a formal communica-
tion from the Xunta de Galicia announ-
cing a negative Environmental Impact
Statement for Proyecto Touro was
published in Galicia´s official journal.
In the meantime the Company,
along with its advisers, is currently
evaluating potential next steps for the
project, which could include an appeal
of the decision made by the Xunta de
Galicia, and/or the clarification of the
questions raised by the reports.
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Atalaya Mining Plc.
Atalaya Mining Plc.
L E T T E R F R O M T H E C H A I R M A N
L E T T E R F R O M T H E C H A I R M A N
Annual Report
Annual Report
Letter from
the Chairman
Roger Davey
Chairman of Atalaya Mining Plc
Dear Shareholder,
I am both pleased and proud to
report that 2019 was another
year of improvements at your
operating project, the Riotinto
mine, with increases in both
ore processing rates and
copper output.
The ore processing throughput
rate increased steadily during
2019 to achieve a cumulative
plant throughput of 9.9Mtpa,
with copper production of
45,000 tonnes, an increase
of around 7% from the 42,100
tonnes produced in 2018,
reaching the upper range of the
updated guidance provided by
the Company towards the end
of 2019.
This record production was
even more remarkable as
it was achieved whilst the
Company was completing and
integrating a 50% Expansion
Project at Riotinto, whilst
maintaining the existing opera-
tions. The Expansion Project
was completed in January
2020 and the new processing
plant was fully commissioned
to operate at the increased
annualised rate of 15Mtpa
together with a corresponding
increase in mining rates.
The average process plant
feed grade of 0.49% copper
was consistent with reserve
estimates and 2018 feed
grade. The process recovery
rate reduced slightly in 2019
to an average of 87.09%, from
88.3% in 2018, driven by lower
recovery rates achieved during
the ramp-up of the new mill.
Cash Costs and All-in Sustai-
ning Costs for 2019 of $1.80/
lb and $2.14/lb respectively,
were well below the budgeted
figures of $2.10/lb and $2.32/lb
respectively.
Health and safety continue to
be of paramount importance
to the Company. We aim to
provide a safe working environ-
ment not only for our emplo-
yees and consultants working
on site, but also ensure a safe
environment for the neighbou-
ring communities. This is a key
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Annual Report
Annual Report
L E T T E R F R O M T H E C H A I R M A N
L E T T E R F R O M T H E C H A I R M A N
Atalaya Mining Plc.
Atalaya Mining Plc.
priority during the outbreak of
the current global COVID-19
pandemic. The Company
has been fully supportive
of all the requirements and
recommendations issued by
the Government of Spain and
the regional and local health
authorities to manage the risk
of the COVID-19 exposure to
our employees, customers,
communities and suppliers.
At the end of March, in
response to a Royal Decree,
the mine was placed on care
and maintenance for 10 days
but following clarifications
from the Spanish Gover-
nment, Proyecto Riotinto
recommenced on 3 April. The
Company currently maintains
its production guidance for
2020 in the range of 55,000
to 58,000 tonnes. We must,
however, be conscious of the
need to protect our employees
from the rapid evolution of the
COVID-19 virus, the poten-
tial for increased measures
being imposed by the Spanish
Central Government to reduce
its spread, and any poten-
tial future impact of these
restrictions. The Company will
therefore update the market as
necessary.
Exploration and infill drilling
continued throughout 2019 in
the Atalaya and Cerro Colorado
pits to maintain the life-of-
mine reserve position based
on the increased processing
rate. Results from ongoing
exploration activities to date
have been positive, with drilling
taking place at San Dionisio
in the Atalaya pit and at Filon
Sur in the Cerro Colorado pit.
The new drill data obtained
continue to define and validate
historical data of the copper
stockwork in the area.
In January 2020, the Junta
de Andalucía issued a favou-
rable report in relation to
the procedural error in the
original issuance of the Unified
Environmental Authorisa-
tion (the “AAU”) of Proyecto
Riotinto. The AAU is still in
a short legal claim period as
all deadlines of the process
have been suspended by the
Junta de Andalucía as result
of COVID-19 outbreak. Once
the process is completed, the
validated AAU is expected to
be issued. Whilst the valida-
tion of the AAU is a required
step towards the automatic
validation of the mining permit,
I would like to stress that the
remediation of this procedural
issue has in no way affected
the normal running of the
Proyecto Riotinto.
During 2019 no consideration
was paid to Astor as, according
to our assessment, Proyecto
Riotinto did not generate any
“Excess Cash”. With the desire
to clarify any uncertainty on
this issue, in March 2020 the
Company filed an application
in the High Court to seek
clarity on the definition of
“Excess Cash”. The Company
expects that this process will
bring clarity to the definition
of “Excess Cash” and thus
the payment schedule of the
Deferred Consideration and the
Loan Assignment.
The Company remains focused
on growth opportunities.
Having successfully completed
the expansion of Proyecto
Riotinto, the Company is focu-
sing on resolving the issue with
the negative Environmental
Impact Statement for Proyecto
Touro and is also continuing
with the technical review and
assessment of other opportu-
nities for growth.
Finally, I would like to thank our
management and staff for their
continued commitment and
efforts, the board members for
their continued support and
contribution and, last but not
least, our valued shareholders
for their continued support.
We look forward to the year
ahead with continued confi-
dence and optimism.
Roger Davey
Chairman of Atalaya Mining Plc
6 April 2020
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Atalaya Mining Plc.
m a n a g e m e n t r e p o r t
Annual Report
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Atalaya Mining Plc.company overviewAnnual Report Annual Report
m a n a g e m e n t r e p o r t
Atalaya Mining Plc.
Management
Report
20 Basis of Reporting
21 Operational Review
24 Financial Review
30 Risk Report
36 Our business model and strategy
38 Market Overview
39 Statement of Corporate Governance
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Atalaya Mining Plc.company overviewAnnual Report Basis of Reporting
The Board of Directors
of Atalaya Mining Plc
presents its manage-
ment report and the
consolidated financial
statements and the
separate financial state-
ments of the Company
for the year ended 31
December 2019.
— Introduction
This report provides an overview
and analysis of the financial results
of operations of the Group, to
enable the reader to assess material
changes in the financial position
between 31 December 2018 and
31 December 2019 and results of
operations for the twelve month
period ended 31 December 2019 and
31 December 2018.
This report has been prepared as
of 6 April 2020. The analysis hereby
included, is intended to supplement
and complement the consolidated
and separate financial statements
and notes thereto (“Financial State-
ments”) as at and for the twelve
month period ended 31 December
2019. The reader should review the
Financial Statements in conjunction
with the review of this report and
with the consolidated financial state-
ments for the twelve month period
ended 31 December 2018. These
documents can be found on the
Atalaya website at www.atalayami-
ning.com.
Atalaya prepares its Financial State-
ments in accordance with Interna-
tional Financial Reporting Standards
(“IFRS”) as issued by IASB and as
adopted by the EU. The currency refe-
rred to in this document is the Euro
(“EUR”), unless otherwise specified.
— Forward Looking
Statements
This report may include certain
“forward-looking statements” and
“forward-looking information”
applicable under securities laws.
Except for statements of historical
fact, certain information contained
herein constitutes forward-looking
statements. Forward-looking state-
ments are frequently characterised
by words such as “plan”, “expect”,
“project”, “intend”, “believe”, “antici-
pate”, “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 materially from
those projected in the forward-loo-
king statements. Assumptions
upon which such forward-looking
statements are based include all
required third party regulatory and
governmental 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
- 20 -
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 state-
ments, 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-loo-
king statements 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.
Atalaya Mining Plc.management report Annual Report Annual Report
M A N A G E M E N T R E P O R T
Atalaya Mining Plc.
Operational Review
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.
Atalaya also owns 10% of Proyecto Touro, a brownfield
copper project in northwest Spain.
In November 2019, Atalaya executed the option to acquire
12.5% of Explotaciones Gallegas del Cobre, S.L. the
exploration property around Touro, with known additional
reserves, for the amount of €500k.
The Company’s and its subsidiaries’ business are 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.
Operational
Review
— Proyecto Riotinto
The following table presents a summarised statement of
operations of Proyecto Riotinto for the twelve month period
ended 31 December 2019 and 2018.
Units expressed in accordance with the international system of units (SI)
Unit
2019
2018
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
t
t
%
%
%
t
t
t
$/lb payable
$/lb payable
10,366,903
10,753,598
10,453,116
9,819,839
0.49
23.01
87.09
0.49
23.31
88.30
195,072
180,661
44,950
42,114
42,935
40,306
1.80
2.14
1.94
2.26
Notes:
There may be slight differences between the numbers in the above table due to rounding.
- 21 -
Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
Annual Report
— Mining and Processing
— Proyecto Touro
Mining
Mining operations in 2019 progressed according to plan
and at similar levels during the quarters. Ore mined during
the year decreased slightly to 10.4 Mtpa compared to 10.8
Mtpa in the previous year.
Processing
During 2019 the plant processed 10.5 Mtpa of ore with an
average copper head grade of 0.49% and a recovery rate
of 87.09%. In comparison to the rates for 2018, throughput
have increased however metallurgical recoveries have
slightly decreased.
Throughput has increased from 9.8 Mtpa in 2018 to 10.5
Mtpa in 2019. The annual copper recovery rate was 87.09%
compared to 88.30% in 2018 driven by lower recovery
rates achieved during Q4 2019 owing to the ramp-up of
the SAG mill. Copper concentrate grade was 23.01%, in line
with expectations and slightly below previous year´s grade
23.31%.
Concentrate production for 2019 was 195,072 tonnes
compared to 180,661 tonnes in 2018. Contained copper
was 44,950 tonnes compared to 42,114 tonnes in 2018.
Copper payable amounted to 42,935 tonnes from 40,306
tonnes in 2018.
On-site concentrate inventories at 31 December 2019 were
approximately 14,201 tonnes (4,667 tonnes in 2018) which
has been fully sold in January 2020. All concentrate in
stock was delivered to the port at Huelva.
— Exploration and Geology
Exploration and infill drilling continue in Atalaya pit and
Cerro Colorado pit. Results from ongoing exploration
drilling in 2019 were encouraging with 7,238 metres drilled
at San Dionisio (in Atalaya pit) and 4,959 metres drilled at
Filón Sur (in Cerro Colorado pit). Results of new Atalaya
drill data continue defining and validating historical data of
the copper stockwork in the area.
— Expansion Project of Proyecto
Riotinto
The “Dirección Xeral de Calidade Ambiental e Cambio
Climático”, (the General Directorate for the Environment
and Climate Change of Galicia), announced on 28 January
2020 that a negative Environmental Impact Statement for
Proyecto Touro (Declaración de Impacto Ambiental) had
been signed.
The short release stated that the decision was based on
two reports which form part of a wider evaluation consis-
ting of fifteen reports produced by different departments
of the Xunta de Galicia. These two reports query the ability
of the Company to guarantee that there will be no environ-
mental impact of the Project on the Ulla River and related
protected ecosystems which are located downstream.
On 7 February 2020 the formal communication from the
Xunta de Galicia was published in Galicia´s official journal.
In the meantime the Company, along with its advisers,
evaluates potential next steps for the Project, which could
include an appeal of the decision made by the Xunta de
Galicia, and/or the clarification of the questions raised by
the reports.
— Receipt of Ruling on a Claim made
by an Environmental Group
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 filed a legal claim to JdA with a request to
declare the Unified Environmental declaration (in Spanish,
Autorización Ambiental Unificada, or “AAU”) granted to
Atalaya Riotinto Minera, S.L.U. dated 27 March 2014, null,
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 an 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
seek permission to appeal to the Supreme Court in Spain.
The 15Mtpa Expansion Project was completed with the
processing plant fully commissioned and operating at an
increased annualised rate of 15Mtpa since January 2020.
On 29 March 2019, Atalaya announced the receipt of notifi-
cation from the Supreme Court in Spain stating that it does
not have jurisdiction over the appeal made by the Junta de
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Annual Report
M A N A G E M E N T R E P O R T
Atalaya Mining Plc.
Andalucía and the Company, which voluntarily joined the
appeal as co-defendant.
The main legal consequence of the Supreme Court rejec-
tion was the ruling of the Tribunal Superior de Justicia de la
Junta de Andalucía (High Court of Justice of the Autono-
mous Government of Andalusia) dated 26 September 2018
which compelled the environmental authority to repair the
inaccuracies in the process.
The Company received judgments relating to certain
issues on the AAU and the Mining Permits from the
Tribunal Superior de Justicia de Andalucía. The JdA
continued the process of resolving the administrative
issues identified and made public statements in support
of Atalaya. The Company continued to operate the mine
normally.
On 30 January 2020 the JdA issued a favourable report
in relation to the AAU of Proyecto Riotinto. The AAU
is still on a short legal consultation period as the JdA
has suspended all deadlines of the process as result of
COVID-19 outbreak. After this process is completed, the
JdA is expected to issue the validated AAU.
This process will finally resolve all the administrative issues
identified in the ruling of the Tribunal Superior de Justicia
de Andalucía (“TSJA”) that took place on 19 September
2018 regarding the AAU.
The validation of the AAU is a required step towards the
automatic re-validation of the mining permit for Proyecto
Riotinto.
The Company continues to operate the mine normally and
will update the market on any development in due course.
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. The Company is aware that the
COVID-19 pandemic may still have further effects of impact on how the Company can manage it operations and is accordingly
keeping its guidance under regular review. Should the Company consider the current guidance no longer achievable, then the
Company will provide a further update.
Proyecto Riotinto operational guidance for 2020 is as follows:
55,000-
58,000
Contained
copper
(tonnes)
44,950
44,000 -
45,000
Ore
processed
(million
tonnes)
15.1
10.5
10.6
Guidance
2020
Actual
2019
Guidance
2019(1)
Guidance
2020
Actual
2019
Guidance
2019(1)
(1) This is the updated guidance as of 17 October 2019.
Copper head grade for 2020 is budgeted to average 0.45% copper, with a recovery rate of approximately 84% - 86%. Cash
operating costs for 2020 are expected to be in the range of $1.95/lb – $2.05/lb. AISC for 2020 is expected to be in the range
of $2.20/lb – $2.30 /lb copper payable.
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Atalaya Mining Plc.
Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
M A N A G E M E N T R E P O R T
Annual Report
Annual Report
Financial Review
Income Statement
The following table presents a summarised consolidated
income statement for the twelve months period ended 31
December 2019, with comparatives and comparison with
the twelve months ended 31 December 2018.
(Euro 000’s)
Revenues from operations
Total operating costs
Corporate expenses
Exploration expenses
Care and maintenance expenditure
Other income
EBITDA
Depreciation/amortisation and impairment
Impairment loss on other receivables
Net foreign exchange profit
Net finance cost
Tax charge
Profit for the year
Twelve months ended
31 Dec 2019
Twelve months ended
31 Dec 2018
187,868
(115,944)
(6,718)
(3,588)
(373)
88
61,333
(23,025)
(1,694)
350
(37)
(6,207)
30,720
189,476
(128,923)
(5,867)
(1,021)
(281)
158
53,542
(13,430)
-
1,613
(182)
(7,102)
34,441
- 24 -
Revenues for FY2019 amounted to
€187.9
million
(FY2018: €189.5 million).
Copper concentrate production during
FY2019 was
195,072
tonnes
(FY2018: 180,661 tonnes) and
185,545
tonnes
of copper concentrate were sold in
the same period (FY2018: 183,368).
The realised price for the twelve-
months period in 2019 was
$2.73/lb
copper
compared to $2.95/lb copper in the
same period of 2018. Concentrates
were sold under offtake agreements
in place. The Company did not enter
into any hedging agreements in 2019
neither 2018.
Exploration costs related to the
Proyecto Riotinto for FY2019
amounted to
€3.6 million
compared to €1.0 million in the same
period last year.
Care and maintenance costs related
to the Proyecto Riotinto for FY2019
amounted to
€0.4 million
compared to €0.3 million for FY2018.
EBITDA for FY2019 amounted to
€61.3 million
compared to EBITDA of €53.5 million
for FY2018.
Depreciation, amortisation and
impairment of assets amounted to
€23.0 million
for FY2019 (FY2018: €13.4 million).
The higher cost was mainly driven by
the impairment of intangibles in Cobre
San Rafael, S.L. (€6.9 million) which
resulted from the negative Environ-
mental Impact Statement for Proyecto
Touro formally communicated by the
Xunta de Galicia and an impairment of
other investments (€1.7 million).
Net finance costs for FY2019
amounted to negative
€37k
(FY2018: negative €0.2 million).
Operating costs for FY2019 amounted
to
€115.9
million
compared to €128.9 million in FY2018.
Lower costs in 2019 were driven by
efficiencies in maintenance costs and
technical services.
Cash costs of
$1.80/lb
payable copper for FY2019, lower than
$1.94/lb payable copper in the same
period last year. All-in sustaining costs
for FY2019 were
US$2.14/lb
payable copper compared to US$2.26/
lb payable copper in the FY2018.
Sustaining capex for FY2019, included
in capital expenditure, amounted to
€9.8 million
(FY2018: €8.0 million). Sustaining
capex accounted for development
programmes at the perimetric channel
of tailings storage facility, optimisa-
tion of the flotation circuit.
Corporate costs for FY2019 were
€6.7 million
compared to €5.9 million for FY2018.
- 25 -
Atalaya Mining Plc.management report Annual Report Alternative Performance Measures
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 comparable to similar measures presented by other companies.
These measures are intended to provide additional information and should not be consi-
dered in isolation or as a substitute 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 opera-
ting costs, and off-site costs inclu-
ding 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, expen-
diture 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 discounts
and other features governed by the
offtake agreements of the Group and
all discounts or premia provided in
commodity hedge agreements with
financial institutions, expressed in
USD per pound of payable copper.
Realised price is consistent with the
widely accepted industry standard
definition.
- 26 -
Atalaya Mining Plc.management report Annual Report Annual Report
M A N A G E M E N T R E P O R T
Atalaya Mining Plc.
Financial position
(Euro 000’s)
ASSETS
Non-current assets
Other current assets
Tax refundable
Cash and cash equivalents
Total Assets
Shareholders’ equity
LIABILITIES
Non-current liabilities
Current liabilities
Total liabilities
Total equity and liabilities
31 Dec 2019
31 Dec 2018
379,077
54,229
1,924
8,077
443,307
317,456
65,219
60,632
125,851
443,307
337,503
34,581
-
33,070
405,154
286,374
59,564
59,216
118,780
405,154
— Assets
— Liabilities
Total assets were €443.3 million as at 31 December 2019,
compared to €405.2 million as at 31 December 2018, an
increase of €38.1 million. The Group’s significant assets are
its mining rights and mining plant at Proyecto Riotinto.
Non-current assets increased mainly due to the Expansion
Project despite of a negative impact from the impairment
of Proyecto Touro.
Other current assets as at 31 December 2019 amounted
to €54.2 million (2018: €34.6 million), out of which €32.8
million (2018: €23.7 million) related to trade and other
receivables and €21.3 million (2018: €10.8 million) related
to spare parts and ore in stockpile classified as inventories.
Trade and other receivables comprise €8.8 million of
sales of copper concentrate receivables from third parties
(2018: €4.5 million), €8.9 million (2018: €2.5 million) related
to sales of copper concentrate receivables from related
parties, €14.4 million (2018: €13.7 million) related to VAT
due from authorities in Spain and Cyprus; €0.6 million
(2018: €0.7 million) related to prepayments and other
current assets amounted to €0.1 million (2018: €1.1 million).
Non-current liabilities stood at €65.2 million as at 31
December 2019 compared to €59.6 million as at 31
December 2018. Non-current liabilities mainly represent
the Deferred Consideration to Astor amounting to €53.0
million as at 31 December 2019 (2018: €53.0 million).
In addition to the Deferred Consideration, non-current
liabilities included the rehabilitation provision of €6.6
million (2018: €6.5 million), the long term portion of leases
following the adoption of IFRS 16 of €5.3 million (2018: nil)
and trade payables of €13k (2018: €0.1 million).
Current liabilities amounted to €60.6 million at 31
December 2019 (2018: €59.2 million). Circa. 95% of current
liabilities balance is comprised by trade and other paya-
bles amounting to €57.5 million (2018: €57.3 million) out
of which €52.4 million related to suppliers (2018: €53.1
million); €4.9 million related to accruals (2018: €3.4 million)
and €0.3 million (2018: €0.8 million) related to land options
and mortgage. Other current liabilities include the short
term portion of leases and current tax liabilities.
- 27 -
Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
Annual Report
Liquidity and Capital
Resources
Atalaya monitors factors that could impact its
liquidity as part of Atalaya’s overall capital mana-
gement 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 2019 and 2018,
and cash flows for the twelve months ended 31
December 2019 and 2018.
— Liquidity Information
Unrestricted cash and cash equivalents as at 31 December
2019 decreased to €8.1 million from €32.8 million at
31 December 2018. The decrease in cash balances is
mainly as result of the cash flow from investing activities
in FY2019. Cash balances are unrestricted and include
balances at corporate and operational level.
Restricted cash at 31 December 2019 has been reclassified
to non-current trade and other receivables since the deposit
related to restricted cash is considered to be long term.
As at 31 December 2019, Atalaya reported a working capital
surplus of €3.6 million, compared to a working capital
surplus of €8.4 million at 31 December 2018. The main
liability of the working capital is trade payables related to
Proyecto Riotinto contractors. The decrease was motivated
by higher current tax liabilities and the lease impact in 2019.
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
31 December 2019
31 December 2018
1,730
6,347
-
3,598
24,357
8,463
250
8,435
— Overview of the Group’s Cash
Flows
Cash and cash equivalents decreased by €25.0 million
in the twelve months period ended 31 December 2019.
This decrease was due to cash from operating activities
amounting to €37.9 million, cash used in investing activities
amounting to €62.4 million and cash generated by finan-
cing activities totalling negative €0.6 million.
Cashflow
(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
Cash generated from operating activities before working
capital changes was €62.5 million. Atalaya increased its
trade receivables by €9.9 million, its trade payables balance
in the period by €1.2 million and its inventory levels by
€10.5 million.
Investing activities in 2019 amounted to €62.4 million,
mainly relating to the Expansion Project of Proyecto
Riotinto and sustaining Capex.
Financing activities in 2019 amounted to negative €0.6
million and related to the impact of leases as result of the
application of IFRS 16.
Twelve months ended
31 Dec 2019
Twelve months ended
31 Dec 2018
37,934
(62,351)
(576)
(24,993)
55,333
(65,712)
593
(9,786)
- 28 -
Annual Report
M A N A G E M E N T R E P O R T
Atalaya Mining Plc.
excess cash (after payment of operating expenses, sustai-
ning capital expenditure, any senior debt service require-
ments and up to US$10 million per annum (for non-Pro-
yecto 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 Assign-
ment). “Excess cash” is not defined in the Master Agree-
ment leaving ambiguity as to how it is to be calculated.
On 2 March 2020, the Company filed an application in
the High Court to seek clarity on the definition of “Excess
Cash”. A preliminary hearing is due to take place on 22
May 2020. As and when a substantive hearing takes place,
the Company expects to have clarity on the definition of
Excess Cash and the payment schedule of the Deferred
Consideration and the Loan Assignment.
As at 31 December 2019, no consideration has been paid.
The amount of the liability recognised by the Group and
Company is €53 million (€43.9 million + €9.1 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.
Critical accounting
policies, estimates,
judgements,
assumptions and
accounting changes
The preparation of Atalaya’s Financial Statements in
accordance with IFRS required management to made esti-
mates and assumptions that affected amounts reported in
the Financial Statements and accompanying notes. There
is a full discussion and description of Atalaya’s critical
accounting estimates and judgements in the audited
financial statements for the year ended 31 December 2019
(Note 3.4).
Foreign Exchange
In FY2019, Atalaya recognised a foreign
exchange gain of €0.4 million (FY2018 gain: €1.6
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:
31 Dec.
2019
31 Dec.
2018
Average rates
for the periods
Spot rates
as at
GBP – EUR
0.8777
0.8847
USD – EUR
1.1195
1.1810
GBP – EUR
0.8508
0.8945
USD – EUR
1.1234
1.1450
During 2019 neither 2018, Atalaya did not have any
currency hedging agreements.
Ruling on the Astor
Litigation and Deferred
Consideration
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 remai-
ning 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 among other items. The
Company also entered into a credit assignment agreement
at the same time with a related company of Astor, Shor-
thorn 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
- 29 -
Risk Report
Principal Risks and Uncertainties
Due to the nature of Atalaya’s business in the mining
industry, the Group is subject to various risks that could
materially 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
Strategic
Risks
Nature of the Risk
Mitigation of Risk
Single
asset, single
commodity and
single country
risk
The Company´s current production
relates to Proyecto Riotinto, which is
its single producing asset. Atalaya
produces and sells copper concen-
trate with silver by-product. Any
interruption in the producing asset
may impact the Group’s results.
e
c
n
a
t
r
o
p
m
I
Lack of
replacement of
reserves
Atalaya must continually replace
and expand its mineral resources.
The depletion of its mineral reserves
may not be offset by future discove-
ries or acquisitions.
Atalaya is constantly evaluating
acquisitions in the mining sector, to
increase the number of operations
under management. The Group’s
Business Development Committee
reviews potential growth opportuni-
ties and transactions, and approves
or recommends them within autho-
rity levels set by the Board.
On-going exploration campaigns
currently in areas close to Proyecto
Riotinto.
During 2019, Atalaya incurred in a
total of EUR €3.6 million in explora-
tion activities.
Underestimation
of capex, finance
and license to
operate
Atalaya’s capital expenditure in
Proyecto Riotinto may require
more capital than anticipated and/
or Atalaya may have difficulties in
obtaining required permitting and
financing, which could delay project
developments.
Expansion of Proyecto Riotinto have
been completed in 2019.
Atalaya monitors project controls
to ensure that we deliver approved
projects on time, on budget and in
line with the defined specifications.
High
Medium
Low
- 30 -
Atalaya Mining Plc.management report Annual Report
Annual Report
m a n a g e m e n t r e p o r t
Atalaya Mining Plc.
Commercial
and financial
risks
Nature of the Risk
Mitigation of Risk
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 business, operating
results and prospects.
Atalaya is constantly monitoring
commodity prices and revisiting
hedging strategies policies.
Improved operating efficiencies and
production driving down unit costs.
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 availability of key inputs such as
fuel, cement and explosives, which
are beyond management’s influence.
The purchase department of the
operating company is continually
expanding their network influence to
ensure supplier chain.
I
m
p
o
r
t
a
n
c
e
Foreign
exchange risk
Atalaya’s operations are subject to
complex and evolving environmental
laws and regulations and changes
may increase its running costs.
Volatility in the EUR:US$ exchange
rate affects the Group’s profitability.
Liquidity risk
Atalaya’s operations and business
model are subject to variety of
financial risks of third parties.
Atalaya is continually monitoring
exchange rate and revisiting hedging
strategies policies.
Manage the liquidity and financing
structure according with the busi-
ness model.
Maintain a diverse portfolio of banks
and funds.
High
Medium
Low
- 31 -
Atalaya Mining Plc.company overviewAnnual Report
External
risks
Nature of the Risk
Mitigation of Risk
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.
Partner with government and local
municipalities.
AAU and mining permit have been
monitored by the company to achieve a
successful result.
Atalaya is monitoring the current situation
of the environmental permit at Proyecto
Touro.
The Group has no operations or material
exposure to the UK., Brexit is not expected
to have any appreciable impact on the
Group. This position is kept maintained
under review as Brexit discussions
continue.
Recurrent meetings and analysis
performed by local advisors to ensure that
Atalaya monitored and anticipated taxa-
tion for significant business decisions.
Monitoring commodities prices and inter-
national economic variations
The Group is continuously monitoring
public health threats and takes necessary
steps to protect the health and safety of
its staff and minimise any disruption to its
operations.
The Group’s main measures are as
follows: reduce all non-critical site visits
and meetings with contractors, require
employees to work remotely whenever
possible and communicate any potential
exposure to any health threat, follow any
mandatory health and safety instructions
and restrictions imposed or recommended
by the Authorities to reduce exposure. It is
also adhering to all measures implemented
by the central and regional governments.
e
c
n
a
t
r
o
p
m
I
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.
Atalaya is also subject to laws and
regulations relating to taxation,
customs and royalties that could
have an adverse effect on its busi-
ness, financial conditions and results
of operations.
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.
Public health
threats
Public health threats such as
coronavirus (COVID-19) or other
epidemics or pandemics could affect
the operations of the Group, the
operations of the Group’s customers
and suppliers. A temporary stoppage
was announced on 30 March 2020
and the restart of operations on 3
April 2020 as a result of measures
taken by the Spanish Central
Government in response to the
COVID-19 outbreak.
High
Medium
Low
- 32 -
Atalaya Mining Plc.management report Annual Report
External
risks (cont.)
Nature of the Risk
Mitigation of Risk
Dependence
on key
infrastructure
Atalaya is dependent on transportation
facilities, 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.
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, transpor-
tations delays and earthquakes.
Labour
disruptions
Atalaya may be adversely affected by
labour disruptions.
Atalaya constantly invests in health and
safety and regularly analyses ways in
which to make its mine safer.
Atalaya has periodic meetings with
its trade unions to discuss and agree
on any changes to labour conditions
and concerns. Ongoing training
programmes.
Operational
risks
Nature of the Risk
Mitigation of Risk
Water,
electricity
and other
key supply
shortages
Atalaya’s mining operations depend on
the availability of water, electricity and
other key inputs.
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 regu-
larly. Atalaya has not been highlighted
of any imminent change.
Cyber security
A cyber-attack could affect our
systems, data bases and regular
activities.
Atalaya’s IT department is regularly
reviewing the internal process to identify
any potential attack and to minimise the
impact.
Additionally, the structure of the systems
has been reviewed during 2019.
I
m
p
o
r
t
a
n
c
e
I
m
p
o
r
t
a
n
c
e
High
Medium
Low
In addition to the above commercial and finance risks, please refer to
Note 3 of the financial statements for further details on the finance risk
management policy adopted by the Group and the Company.
- 33 -
- 33 -
Atalaya Mining Plc.management report Annual Report
Atalaya Mining Plc.
Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
M A N A G E M E N T R E P O R T
Annual Report
Annual Report
Internal Controls
Going Concern
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 all
risks completely 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 effecti-
veness of the internal controls are through the Audit and
Financial Risk Committee and Physical Risk Committee
and the executive 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
relationships 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
statements and press releases issued as material events
unfold.
On 11 March 2020, the World Health Organisation declared
the Coronavirus COVID- 19 outbreak to be a pandemic
in recognition of its rapid spread across the globe. Many
governments are taking increasingly stringent steps to help
contain, and in many jurisdictions, now delay, the spread of
the virus, including: requiring self-isolation/ quarantine by
those potentially affected, implementing social distancing
measures, and controlling or closing borders and “locking-
down” cities/regions or even entire countries.
The crisis and the actions taken by governments have
resulted in significant disruption to business operations,
consumption patterns worldwide, equity markets and
significant volatility in commodities prices, including
copper, with prices declining below the Group’s ASIC level
in March 2020.
Furthermore, in Spain, where the Company has its single
producing asset, the Government issued a Royal Decree
on 14 March 2020 to declare a nationwide lockdown to
reduce the impact of the COVID-19 pandemic. On 29 March
2020, the Spanish Government issued a new Royal Decree
implementing enhanced measures to protect the people
from the virus. The new Decree stipulated that only emplo-
yees from a short list of essential industries are allowed
to continue working from 30 March 2020. Mining was
excluded as an essential industry and consequently the
Proyecto Riotinto site was required to halt operations for
a short period until 3 April 2020 when mining operations
were permitted to restart.
The significant impact on copper prices and the stoppage
of Proyecto Riontinto as a result of the Royal Decree will
impact revenues for the year ended 31 December 2020.
The uncertainty surrounding future copper prices and if
- 34 -
Annual Report
M A N A G E M E N T R E P O R T
Atalaya Mining Plc.
Proyecto Riotinto will be required to be halted again for a
longer period makes difficult to determine and quantify the
operational and financial impact the situation may cause to
the business going forward.
The Directors have considered and debated different
possible scenarios on the Company’s operations, financial
position and forecast for a period of at least 12 months
since the approval of these financial statements. Possible
scenarios range from (i) further disruption in Proyecto
Riotinto; (ii) market volatility in commodity prices; and (iii)
availability of existing credit facilities.
The Company has increased its cash balance from €8.0
million as at 31 December 2019 to €41.7 million as at 31
March 2020 by drawing down on existing credit facilities.
The Directors, after reviewing these scenarios, the current
cash resources, forecasts and budgets, timing of cash
flows, borrowing facilities, sensitivity analyses and consi-
dering the associated uncertainties to the Group’s opera-
tions have a reasonable expectation that the Company
has adequate resources to continue operating for the
foreseeable future. Accordingly, the consolidated financial
statements continue to be prepared on a going concern
basis (see Note 2.1(b)).
Atalaya had a legal claim affecting their environmental
authorisation AAU, however the Junta de Andalucía (“JdA”)
issued in January 2020 a favourable report in relation to
the AAU of Proyecto Riotinto. The AAU continues in a short
legal consultation period exclusively with parties involved
in the process, and the Company expects to have the AAU
revalidated with no impact on the operation.
Creditors’ Payment
Terms
The Group does not have a specific policy towards its
suppliers and does not follow any code or standard prac-
tice. 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.
Political and Charitable
Donations
The Group made no political and no charitable donations
during the year ended 31 December 2019 (2018: €nil).
However, it often contributes financing for projects that
benefit local communities in cooperation with local munici-
palities based on our Corporate Social Responsibility.
Research and
Development Activities
For details on research and development activities carried
out by the Group and Company (refer to section (ii). Future
developments of the Group and Company to the Manage-
ment Report).
Existence of Branches
The Group does not operate any branches.
Share Capital Structure
During 2019, the Company had the following weighted
average number of shares outstanding and commitments
to issue shares:
Weighted No. of Ordinary Shares
Ordinary shares
Options
Diluted
137,339,126
1,896,516
139,235,642
During 2019, Atalaya did not increase its share capital
(2018: increase of 2.1 million shares) but granted 1,900,000
share options (2018: nil).
Details on authorised and issued share capital are
disclosed in Note 22 of the consolidated financial
statements.
Proposal in Relation
to the Distribution of
Profits and Dividend
The Directors do not recommend the payment of a divi-
dend for the year (2018: €nil).
- 35 -
Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
Annual Report
Our business model and
strategy
The business model of Atalaya is founded upon creating value through operational and
developmental excellence. Experience and an unceasing search for improvement are the
pillars of its success.
Our values
Importance of people
à Importance of Safety, Health, Environment & Security
Strategic pillars
à Strong work force with longstanding employees
Our people
Operational excellence
à Importance of cost management
à Establishing high performance
à Operating to a world-class standard
à Maximising production capacity
Creating value
à Increase asset value under management
à Focusing on generating free cash flows
à Focusing on creating value for shareholders
à Allocating capital efficiently
à Creating opportunities for growth
Social projects
à Working closely with communities
à Contribute to community development
- 36 -
Our business
Our future
Support to local
communities
Our people and relationships
Key driver
Achievements
Principal Risks
• 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
where its people are its core asset.
• 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.
Cut
expenditures
to reduce
environmental
impact
450 employees
99% based at
mine site
Socially
responsible
through
Fundación
Atalaya
Riotinto
2019 achievements
Increased the
number of
employees at
Proyecto Riotinto
LTI and LTIFR
improved in 2019
compared with 2018
2020 priorities
Further improve
health and safety
statistics
Operational
risks
External
risks
Our business
Key driver
Achievements
Principal Risks
• World-class
processing plant in
Europe to maximise
value of the Group,
thereby increasing
free cash flows from
operations.
€61.3m
EBITDA
45k tonnes
of Cu
produced
2019 achievements
Production at Proyecto Riotinto above guidance.
All-in sustaining cost improvement above expectations.
The Junta de Andalucía issued a favourable report in
relation to the AAU of Proyecto Riotinto in January 2020.
2020 priorities
Consolidate our growth with a production plant of 15Mtpa.
Maintaining operational continuity in view of COVID-19.
Financial
risks
Operational
risks
Our future
Key driver
Achievements
Principal Risks
• Evaluation of
existing capacity
of each project
and investment
in exploration to
replace reserves
deployed
• Searching and
evaluating projects
around the world
share price
of 192.0
pence
as at 31
December
2019
2019 achievements
Investment of €9.8 million (2018: €8.0 million) in
sustaining Capex in Proyecto Riotinto.
Finalised 15Mtpa expansion project according with
budget and timeline.
2020 priorities
Continuing exploration works to expand the reserves
and resources of Proyecto Riotinto.
Expecting AAU validation by the JdA.
Monitoring new opportunities related with metals.
Working to understand and resolve environmental
permitting decision on Projecto Touro.
Stategic
risks
External
risks
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Atalaya Mining Plc.management report Annual Report Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
Annual Report
Atalaya’s Response
The Group had no hedges on commodities prices during
2019. At the date of this report, the Group is fully exposed
to copper prices with no commodities hedging agreement
in place.
— Foreign Exchange
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
liabilities on the balance sheet.
Atalaya’s Response
The Group was positively impacted by favourable rate
against USD, the currency in which all sales of the Group
are denominated.
Management is continuously monitoring currency rates
and evaluating possible currency hedging to minimise risk.
Market
Overview
Market Price
In 2019, copper traded between US$2.60 and
US$2.93 per pound of copper. The spot price
for copper was US$2.65 as at 2 January 2019
and US$2.79 as at 31 December 2019, reflec-
ting an increase of 5.3% for the period. The
average market price for 2019 of $2.72/lb, 7.2%
lower than the average for 2018. The average
copper price for Q1 2020 was $2.55 and the spot
price at 31 March 2020 was $2.18, reflecting
the economic uncertainty resulting from the
COVID-19 outbreak.
The market copper price has a significant impact
on Atalaya`s ability to generate positive opera-
ting cash flows.
— Realised Copper Prices
The average prices of copper for 2019 and 2018 were:
(USD)
2019
2018
Realised copper price
per lb
Market copper price
per lb (period average)
2.73
2.72
2.95
2.93
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 sett-
lement 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 $2.73/lb.
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Annual Report
M A N A G E M E N T R E P O R T
Atalaya Mining Plc.
Statement
of Corporate
Governance
The Group and the Company give special attention to the
application of sound corporate governance policies, prac-
tices and procedures. Corporate Governance is the set
of procedures followed for the proper management and
administration 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 Direc-
tors comply with Rules 21 and 31 of the AIM Rules relating
to Directors’ dealings and will continue to take all reaso-
nable steps to ensure compliance by the Group’s applicable
employees as well.
- 39 -
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 code
of standards since its inception
for Directors’ dealings which is
appropriate for a TSX and AIM listed
company. The Directors do comply
with Rules 21 and 31 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 environment
and to check if the state of the culture
represents its values.
The Company is incorporated in
Cyprus, so it is subject to Cypriot
laws and regulations, and is 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 straightforward
with its shareholders.
Atalaya Mining Plc.
M A N A G E M E N T R E P O R T
Annual Report
Quoted
Company
Alliance (QCA)
The QCA is an independent member-
ship that “champions the interests of
small to mid-size listed companies”.
The QCA represents companies
employing around 1.4 million workers
and they set out the guidelines of
independence and transparency for
said businesses.
In 2018, the QCA issued an updated
version of its Corporate Governance
Code. This new and updated version
of the Code includes 10 corporate
governance principles that compa-
nies should follow, and step-by-step
guidance on how to effectively apply
these principles.
Please refer to the Corporate Gover-
nance Report for further details.
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 finan-
cial statements, the Directors are
required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and estimates
that are reasonable and prudent;
and
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 Direc-
tors to set their remuneration will be
proposed at the next Annual General
Meeting.
Events after
Reporting
Period
Any significant events that occurred
after the end of the reporting period
are described in Note 34 to the finan-
cial statements.
• 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 accounting
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 disse-
mination of the financial statements
may differ from legislation in other
jurisdictions.
— Composition,
Responsibilities and
Remuneration of the
Board of Directors
The members of the Board of Direc-
tors as at 31 December 2019 and on
the date of this report are presented
in the Corporate 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 composi-
tion, responsibilities and remunera-
tion of the Board of Directors, please
refer to the Corporate Governance
report.
By Order of the Board of Directors,
Roger Davey
Chairman
Nicosia, 6 April 2020
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s u s t a i n a b i l i t y r e p o r t
Annual Report
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Atalaya Mining Plc.management report Annual Report Annual Report
s u s t a i n a b i l i t y r e p o r t
Atalaya Mining Plc.
Sustainability
Report
45 Social development
47 Health and Safety
47 Environment
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s u s t a i n a b i l i t y r e p o r t
Annual Report
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Atalaya Mining Plc.sustainability reportAnnual Report Annual Report
S U S T A I N A B I L I T Y R E P O R T
Atalaya Mining Plc.
Social development
Overview
Atalaya Mining is strongly committed with its
Corporate Social Responsibility. In this regard,
the management of the Company, supported by
the Board of Directors, have integrated stan-
dards and policies that operate across the whole
organisation. These determine a strong will for
an excellent performance in the way Atalaya´s
operations affect people, the environment, and
society.
Our Communities
Atalaya is devoted to being a responsible corporate citizen
and is aware of its responsibilities as the most relevant
productive player in its area. This circumstance highlights
the importance of a well-tuned channel of communication
with its stakeholders, in order to add value to its mining
operations in accordance with the expectations and needs
of its communities.
Atalaya´s strategy to support the establishment of sustai-
nable, long-standing operations is strongly attached to
dealing with the environmental and social impact of its
activities in a conscientious and delicate manner. This is
achieved through ensuring that relations with governments,
regional or local authorities, media, workforce, contractors
and providers, and the society in general, are led by trans-
parency and mutual trust, and an appropriate degree of
interaction is encouraged.
The result of the analysis of this continuous dialogue esta-
blished with its stakeholders advises that even though the
economic, social and environmental impact of the mining
operations in Proyecto Riotinto are generally considered
as very positive. Notwithstanding this, it is the Company´s
responsible approach to opt for further involvement with
the goals and aspirations of its communities.
The most relevant goals are the efforts devoted to job
creation, local development and diversification of the area.
These goals are incorporated to Atalaya´s responsibility
plans, which are implemented by its wholly owned Funda-
ción Atalaya Riotinto, an organisation led by Proyecto
Riotinto management that, after its third full year in
operation, has built strong ties with the communities and
developed numerous actions and programmes in order to
assist and support the Riotinto Mining Basin communities.
During 2019, Fundación Atalaya Riotinto has worked in
four fields of action: Social Support, Culture & Heritage,
Local Development & Education, and Health, Environ-
ment & Sports. These four areas are worked on thanks to
the collaboration with local associations and NGOs, the
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Atalaya Mining Plc.
S U S T A I N A B I L I T Y R E P O R T
Annual Report
programmes established with the various municipalities
and the own initiatives managed by our Fundación Atalaya
Riotinto. Atalaya has invested €0.5 million in 2019 in all
these activities.
Social Support
Fundación Atalaya Riotinto is aware of the difficulties that
part of the population, living in the mine´s surrounding
areas, must deal with, and it has a commitment to assist
when possible and alleviate such social problems. In this
regard, Fundación Atalaya Riotinto establishes coopera-
tion plans with charities, NGOs and local governments
that address such issues. In 2019, Fundación Atalaya
Riotino has supported programmes to assist people with
Alzheimer Syndrome and their families, and the integration
of an IT training classroom for people with disabilities.
Also, Fundación Atalaya Riotinto has contributed with
funds to support the acquisition, by a local charity, of a van
that will allow groups of kids form disadvantaged areas to
be transported to several educational activities. Atalaya
has also sponsored a charitable golf tournament to benefit
Huelva´s Food Bank, and has funded activities of Cruz Roja
and Cáritas, in cooperation with the local government of
Nerva to assist disadvantaged families with food, clothing
and educational needs.
Culture & Heritage
The Riotinto Mining Basin is a place full of culture and
heritage and it is considered as strategic by the commu-
nity to preserve such wealth, be able to express itself and
attract people to promote its economy. With this in mind,
the Company has sponsored a regional music contest
with the participation of hundreds of young musicians
from official music schools; Atalaya has also sponsored
the Cultural Week of Nerva´s official adults school. It has
also signed agreements with the association of retired
employees of Riotinto Mine, that represent more than 200
people, to contribute in the funding of some of their cultural
activities. In cooperation with the city hall of Minas de
Riotinto, Atalaya has provided the necessary funding for
the opening of the Museum of the Town, which contains
large scale models that represent the old town of Minas
de Riotinto. In Campofrío, Atalaya has contributed to the
refurbishment of the local church (XVII century), which is a
relevant heritage site.
Local Development & Education
The development of economic areas so to not to be
dependent on the mine is one of the main challenges that
the region must address and that Atalaya perceives as its
duty to support. This will be achieved by improving local
infrastructures, promoting new businesses, improving local
education and training for the local population.
One of the main steps taken towards this objective is “Reto
Malacate”, an initiative to reward the best business project
to be identified in the region. In the 2019 edition, 10 ideas
were presented, and the idea selected is the project for
establishing an adventure tourism business that will use
some of the great opportunities that the area provides.
Other actions carried out in 2019 include cooperating with
the city hall of Nerva, to provide the necessary funding for
the reconstruction of a road that connects the town with
some populated areas outside the town. Continuing with
this involvement in education and entrepreneurship, the
Company has extended the Language School Programme
in cooperation with the city council of Nerva and has
restarted the school visits programme of the mining region
to Atalaya´s facilities. Atalaya has also reached agreements
with the towns of Nerva and Campofrío, respectively,
to repopulate an important street with palm trees, and
advertising the town to attract tourism. Minas de Riotinto
has started a renovation programme for some of their
streets thanks to a programme sponsored by our Funda-
ción Atalaya Riotinto. Nerva has also renovated two parks
and changed some of their streetlights to LED. Berrocal
has also invested funds coming from Fundación Atalaya
Riotinto in fixing some of their infrastructure, including
streets and rural roads.
Health, Environment & Sports
Atalaya is interested in promoting a better environment
and supports a health culture based on prevention, self-
care and the practice of sports. In this regard, Fundación
Atalaya Riotinto has developed and sponsored several
initiatives.
For example, in collaboration with Asociación Matilde, the
Company has been involved in a programme consisting of
restoring an organic local garden and selling the vegeta-
bles to local markets. People involved in this project come
from families at risk of social exclusion. In El Campillo, the
company has supported a project to create new facilities
for abandoned dogs. In Nerva, Atalaya has cooperated with
its municipality to fund the acquisition of new equipment to
practice crossfit. Atalaya has also taken part into the GAVI
program (Business Alliance for Childhood Vaccination) in
cooperation with Fundación La Caixa and Bill & Melinda
Gates Foundation. Atalaya has sponsored also many sport
events, and local sport teams, throughout the entire year.
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Annual Report
S U S T A I N A B I L I T Y R E P O R T
Atalaya Mining Plc.
Health and Safety
In the last quarter of 2019, the programme and lines of work planned for more compre-
hensive action on health and safety at work were carried out. This programme has enabled
Atalaya to end the 2019 year meeting its goals in terms of occupational accidents and
reaching the lowest numbers of accidents since the start of operations. Index of severity
and frequency rates of 0.15 and 6.10. The Company has significantly improved its rates
compared to previous years.
These improvements have been obtained through the
following lines of work in the area of occupational risk
prevention, supported by all departments:
• Total implementation in the investigation of
accidents to reach the root cause through the “5 why”
methodology.
•
Implementation of a two-year theoretical and
practical training programme to all company’
employees. This training was based on risk analysis
and preventive measures in the protocols for high risk
jobs mainly: working at height, reduced spaces and
auto-breathing equipment, insulation, blocking and
mechanical lifting of loads.
• OSHAS qualification standards: 18001-2007 of the
occupational health and safety management systems.
• Regular meetings, involving employees’ representatives
to discuss aspects of safety improvement conditions
for employees. Furthermore, Atalaya set up a team
to evaluate the psychosocial impacts in which these
representatives have experienced.
Likewise, the emergency drill plan has been fully accom-
plished with three exercises being carried out in 2019, in
order to learn about and improve the means of action in
critical situations at the facility.
Improvement of the circulation of information relating
occupational safety and health using information screens
located at strategic points in the mining facility, sending
news and key occupational risk prevention messages.
At the same time, the Company formed an emergency a
first response brigade, made up of volunteers whose are
being trained and coached in several disciplines such as
rescue from heights, fire protection and first aid. Atalaya
has also invested in preparing premises to house specific
emergency materials.
In 2020, Atalaya will continue with the “zero damage”
policy, re-inforcing all the actions that have been taken and
increasing safety in all its work. As such, it plans to esta-
blish the discipline of field leadership, through an ambitious
programme of audits, preventive observations, inspections
and the “Stop and Talk” methodology.
Environment
Water management and mining facilities improvement
have resulted in a 46% decrease in water pollution recorded
prior to the start of Proyecto Riotinto in 2015.
In terms of air quality, there is a continued decline in
particle levels in the surrounding population (12% average
reduction in these levels since 2017), as a result of the
enormous efforts made by Atalaya to reduce particle
emissions into the atmosphere as a consequence of its
operation, such as the acquisition of four pieces of high
tonnage equipment for the continuous irrigation of the
mining tracks, the conducting of a study of particle emis-
sions to the atmosphere in the surroundings of the mining
region surrounding Riotinto and the hiring of a weather
forecasting and air quality service.
In 2019, in the town of Nerva, where air quality data is
available prior to the start of the Proyecto Riotinto, particle
- 47 -
Atalaya Mining Plc.
S U S T A I N A B I L I T Y R E P O R T
Annual Report
levels were recorded close to the concentrations of
geochemical background in PM10 recorded between the
years 2009-2014, and even in the regional background
obtained in Doñana Natural Park. The data obtained in
2019 (a year that was hydrologically very dry, which faci-
litates the production of emissions into the atmosphere),
demonstrate the effectiveness of the atmospheric particu-
late study carried out by ARM.
Regarding the management of non-mining waste, in 2019
there has been a decrease in the production of waste from
the operation in Proyecto Riotinto. In 2019, 11.3kg/t of
waste of concentrate produced in 2019 was generated in
Proyecto Riotinto, compared to an average of 13.4 kg/t in
previous years, representing a 16% reduction in non-mining
waste produced in 2019.
Efforts made by the environment department to raise
awareness among employees regarding recycling have
been accomplished as there is a high percentage of waste
destined for recycling (82%).
In terms of quality management, the department of environ-
ment, quality and historical heritage has continued to lead
in 2019 the process of implementing an Integrated Quality
Management System, so Atalaya sets itself standards of
quality management, environmental management and
prevention of occupational risks higher than those legally
enforceable, pursuing excellence as a main objective.
During 2019, the certification process of The Integrated
Quality Management System of Atalaya has been under-
taken, which is expected to be completed in the first half of
2020.,The leadership and commitment of Company mana-
gement stand out as strengths in this certification process
of the system due to their active participation in the audit
process. The high level of training and commitment of the
technical staff must also be noted.
Regarding historical and archaeological heritage, a study
and documentation of the archaeological site of the Look
Out has been completed, providing remarkable results
from the point of view of the spatial and chronological
definition of the city of “Urium”, which is one of the most
relevant models of active metallurgical deposits world-
wide, since the Tartessos era. The most majestic era of
the Tartessos during the Roman period since the Roman
period, from the 3rd century B.C. until the end of the 2nd
century A.D.
Among the building elements exhumed in the excavation
are two Roman metallurgical furnaces from the 1st century
A.C. whose uniqueness and exceptional state of preserva-
tion ensures they are of significant scientific interest. Said
will be extracted and placed in a museum.
- 48 -
Targets for
2020:
Water Quality
It is planned to carry out the calculation of the
water footprint of the mining project, as a tool
for the improvement of the water management
system currently in use.
Air Quality
As part of the continuous enhancement process
undertaken since the beginning of the opera-
tions in Riotinto, in 2020 the objective is to fina-
lise actions on air quality improvement in the
area of La Dehesa (located next to the industrial
complex of Proyecto Riotinto).
Carbon Footprint
In addition, in 2020 the carbon footprint of the
mining project will be available. It will be used to
implement actions to achieve an improvement
in the sustainability of the activity.
Non-mining Waste
The Company has integrated actions to improve
the management of waste produced in its facili-
ties in order to continue the downward trend in
the production of non-mining waste and a more
sustainable activity. Among these actions, the
project of construction of a new non-hazardous
waste park and a specific training in waste
management to the entire staff of the Company.
Historical and Archaeological
Heritage
The study and documentation of the Cortalago
site (also belonging to the ancient city of Urium)
will continue with the target of completing this
intervention in 2021.
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Annual Report
c o r p o r a t e g o v e r n a n c e r e p o r t
Atalaya Mining Plc.
Corporate
Governance
Report
52 Board of Directors
63 Audit and Financial Risk Committee
65 Corporate, Governance, Nominating
and Compensation Committee Report
70 Physical Risks Committee Report
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Atalaya Mining Plc.
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Annual Report
Board of Directors
Board Structure
Board of Directors
Committees
Audit and Financial Risk
Committee (“AFRC”)
Corporate Governance
Nominating Compensation
Committee (“CGNCC”)
Physical Risk Committee
(“PRC”)
Summary of Committee
responsibilities
Summary of Committee
responsibilities
Summary of Committee
responsibilities
Reviews and monitors financial
statements
Reviews Directors’ compensa-
tion and performance
Reviews Corporate Governance
of Atalaya and practices, inde-
pendence, charters’ review, and
structure
Compensation and performance
of officers of Atalaya
Oversees safety, health, environ-
ment 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
Reviews Company’s public
disclosure of financial
information
Reviews estimates and judge-
ments that are material to
reported financial information
Oversees the auditors arrange-
ments and performance
Reviews internal and external
risks of the Company
Dr. Hussein Barma (Chairman)
Mr. Roger Davey
Mr. Stephen Scott
Stephen Scott (Chairman)
Dr. Jose Sierra (Chairman)
Mr. Roger Davey
Dr. Hussein Barma
Mr. Damon Barber
Mr. Roger Davey
Mr. Stephen Scott
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Annual Report
Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
Atalaya Mining Plc.
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
Mr. Davey has over forty years’ expe-
rience 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.
— Alberto
Lavandeira
Managing Director and
Chief Executive Officer
Mr. Davey is a graduate of the
Camborne School of Mines, England
(1970), with a Master of Science
degree in Mineral Production Manage-
ment 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 Insti-
tute of Materials, Minerals and Mining
(MIMMM).
Mr. Davey is the Chair of the Board
of Directors and a member of the
Audit and Financial Risk Committee,
the Physical Risk Committee and the
Corporate Governance Nominating
Compensation Committee.
Mining experience, operations, proces-
sing, exploration, Capital market, UK
Market, International business, leader-
ship, 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 development 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.
- 53 -
- 53 -
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.
Name .........................................
Alberto Lavandeira
Role ...........................................
Chief Executive Officer
Years of service ............................
Since May 2014
Executive ...................................
Executive
Time commitment ........................
100%
Skills ..........................................
Mining experience, operations,
processing, exploration, commer-
cial, Capital market, International
business, leadership, strategic, fund
raising, M&A, governance, project
management, permitting, govern-
ment relations, CEO, sustainability.
Atalaya Mining Plc.
Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
Annual Report
— Damon 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 Engi-
neering 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.
— 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 Gover-
nance Nominating Compensation
Committee.
— Jesús
Fernández
Non-executive Director
Mr. Fernandez is head of the M&A
team for Trafigura. He joined Trafi-
gura 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.
Name .............................................
Damon Barber
Role ...............................................
Non-Independent
Years of service ................................
Since Sep 2015
Executive .......................................
Non-executive director
Time commitment ............................
At least 75% meetings schedule
Skills ..............................................
Mining experience, operations, proces-
sing, Capital market, International
business, leadership, strategic, fund
raising, M&A, governance, project
management.
Name .............................................
Hussein Barma
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.
Name .............................................
Jesús Fernández
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.
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Annual Report
Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
Atalaya Mining Plc.
— 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 proces-
sing 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 invest-
ment 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.
— Dr. Jose Sierra
Lopez
Non-executive Director
Dr. Sierra has an extensive experience
as a mining and energy leader in the
business 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 Electricity
Market of the Republic of Ireland and
Northern Ireland He was a member of
the Board of Transport et Infrastruc-
tures 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.
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Name .............................................
Harry Liu
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 manage-
ment, permitting.
Name .............................................
John Lamb
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.
Name .............................................
Jose Sierra Lopez
Role ...............................................
Non-Independent
Years of service ................................
Since Sep 2015
Executive .......................................
Non-executive director
Time commitment ............................
At least 75% meetings schedule
Skills ..............................................
Mining experience, operations, proces-
sing, exploration, Capital market, UK
Market, International business, leader-
ship, strategic, governance, project
management, permitting.
Atalaya Mining Plc.
Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
Annual Report
— 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, corpo-
rate development, business restructu-
ring 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 Compensa-
tion Committee and a member of the
Audit and Financial Risk Committee.
Name .............................................
Damon Barber
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, proces-
sing, exploration, Capital market,
International business, leadership, stra-
tegic, fund raising, M&A, governance,
project management, permitting, CEO.
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Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
Management
— Alberto
Lavandeira
Managing Director and Chief Executive
Officer
Mr. Lavandeira brings close to forty years of experience opera-
ting 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 development 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 ..................................................... 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.
— Cesar Sanchez
Chief Financial Officer
Former CFO of companies in mining and financial sectors; inclu-
ding CFO of Iberian Minerals Corp. with copper assets in Spain
and Peru performing equity and debt raisings. Worked for Ernst
& Young as financial advisor and auditor. Qualified accountant,
holds a business administration degree.
He is a graduate of the University of Sevilla, Spain with courses in
Dublin City University and ESIC.
Name .................................................... Cesar Sanchez
Role ........................................... Chief Financial Officer
Years of service .................................... Since June 2016
Executive ..................................................... Executive
Time commitment ............................................... 100%
Skills ................................................................ ... ..... .
Mining experience, Capital market, Canada and UK
Markets, International business, Corporate finance,
finance and accounting, legal, leadership, strategic, fund
raising, M&A, governance.
Name ................................................. Enrique Delgado
Role .......... Operation General Manager Proyecto Riotinto
Years of service .................................... Since May 2019
Executive ..................................................... Executive
Time commitment ............................................... 100%
Skills ................................................................ ... ..... .
Mining experience, operations, processing, exploration,
international business, leadership, strategic, gover-
nance, project management and permitting.
— Enrique Delgado
Operations - General Manager Proyecto
Riotinto
Former CEO of Tharsis Mining has also performed as
director of Metallurgy and Environment at Cobre Las
Cruces Mine (First Quantum) both in Spain. With First
Quantum also participated in the start-up of Kansanshi
Mine smelter in Zambia. Started his career as metallur-
gist in Riotinto Mine and later with FreePort McMoran, at
Atlantic Copper smelter in Huelva, Spain.
He is a graduate of the University of Sevilla, Spain and
Master of Senior Management of Leading Companies of
the San Telmo International Institute of Sevilla, Spain.
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Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
Director Independence
The Board will be composed of at least the same number
of independent Directors (in accordance with applicable
securities laws and stock exchange rules) as non-indepen-
dent, 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-executive 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 indepen-
dent 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 Director’s ability
to act in the best interests of the Company.
Corporate Governance
Compliance Statement
The Company adheres to the QCA Corporate Governance
Code. Its statement of compliance is contained in section
iii of the Management Report.
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.
Board Appointments
The Board is appointed by the shareholders 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 substantial time to research and
preparation before each meeting to ensure that the future
of the Company is going in the right direction.
Director Induction
When appointed, new Directors are provided with an
induction programme including meetings with other
Directors, members of the senior 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.
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 regularly reviewed by the CGNC Committee.
When considering the potential reappointment of an exis-
ting Director, the Board will consider the individual’s perfor-
mance as well as the skills and experience mix required by
the Board in the future.
When considering vacancies, the Board will consider a
candidate’s capacity to enhance the mix of skills and expe-
rience of the Board.
Role of the Board
The Board has a duty to supervise the management of the
business and affairs of the Company. The Board directly
and with the Chair provide direction to senior management,
generally 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
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Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
internal control and monitor performance against bench-
marks. The Board must also ensure that the Company
complies with all of its contractual, statutory and any
other legal obligations, including the requirements of any
regulatory body.
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. Further-
more, the Board will at all times act in accordance with all
Company policies in force.
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
Each of the Directors, when representing the Company,
must act in the best interests of shareholders of the
Company and in the best interests of the Company as a
whole.
Highlights of
the Board for
this Year
Atalaya has had thirteen Board
meetings in which a whole array
of subjects were dealt with. When
needed, its professional advisors
are invited to attend meetings to
provide input into legal and finan-
cial matters.
Atalaya has also had four Physical
Risk Committee meetings, six
Audit and Financial Risk Commi-
ttee meetings and three Corpo-
rate 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 Committee meetings
included:
à Health and safety, reporting
of accidents and reviewing
policy to look for improvements
including a go ahead on a
restructuring of the safety
department.
à Operational, discussed all the
different operational figures.
à Financial, reviewed figures such
as cost, capital investment,
budgets, etc.
à Quarterly reports, annual report
and other deliverables to the
Market.
à Re-election of Directors.
à Risk Management, Atalaya had
a reassessment of risk and
the areas that changed were
updated.
à Board and committees’
performance.
The Board would like to thank the
committees that have helped the
Board reach its conclusions.
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Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
The Role of Individual
Directors
As members of the Board, Directors have ultimate respon-
sibility for the Company’s overall success. Therefore,
Directors have an individual responsibility to ensure that
the Board is undertaking its responsibilities as set out in
the Board charters.
Directors need to ensure the following:
• Leadership to the Company, particularly in the areas
of ethics and culture including a clear and appropriate
strategic direction.
• Accountability to key stakeholders, particularly
shareholders.
• Oversight of all control and accountability systems
including all financial operations and solvency, risk
management and compliance.
improper to disclose it, or allow it to be disclosed, without
appropriate authorisation.
Chairman’s Role
The Chairman is considered the “lead” Director and
utilises his/her experience, 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 extraordinary meetings;
• Set Board agendas and ensure that the meetings are
effective and follow the agenda;
• Ensure that the decisions are implemented promptly;
• Ensure that the Board behaves in accordance with the
• An effective senior management team and appropriate
Company´s code of conduct
personnel policies; and
• Timely and effective decisions on matters relating to it.
It is also expected that the Directors comply with the
following:
• Behaving in a manner consistent with the words 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
circumstances, 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
reasonable 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 deliberations. Similarly, all confidential information
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
• 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 corporate 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.
The Role of the CEO
The CEO is responsible for the attainment of the
Company’s goals and 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
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.
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C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
• 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 identity with, and a
sense of allegiance to, the Company;
– Advise the Board on the most effective
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 management of the
Company.
The role of Company
Secretary
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 representative
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.
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 distributing the minutes of
all Board and Board Committee meetings as required;
• Preparing for and attending all annual and extraordinary
general meetings of the Company;
• Overseeing the Company’s compliance programme and
ensuring all Company legislative obligations are met;
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 communication and point of
contact between members of senior management and
the Board (and the directors);
Ensuring all requirements of regulatory bodies are fully
met; and providing counsel on corporate governance prin-
ciples and Director liability.
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Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
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.
Board Meetings and
Attendance
The board and Directors do not have fixed time require-
ments. They are expected to attend all meetings and be
sufficiently prepared with all issues that arise.
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 13 times in 2019. Meetings
occurred in person and by teleconference.
Atalaya’s decisions are predominantly made by achieving
a consensus at Board meetings. In exceptional circum-
stances, decisions may be taken by the majority of Board
members.
2019 Annual General
Meeting
All Directors are required to take decisions objectively and
in the best interests of the Company. As part of their duties
as Directors, 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 AGM will be held on 25 June 2020 at 11:00h in
London (United Kingdom). The business of the meeting
will be conducted in accordance with regulatory require-
ments 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.
Board meetings and attendance
Directors
R. Davey
A. Lavandeira
D. Barber
H. Barma
J. Fernández
H. Liu
J. Lamb
J. Sierra Lopez
S. Scott
BoD
AFRC
CGNCC
PRC
Held
Attended
Held
Attended
Held
Attended
Held
Attended
13
13
13
13
13
13
13
13
13
13
13
13
13
9
10
13
13
13
6
-
-
6
-
-
-
-
6
5
-
-
6
-
-
-
-
6
- 62 -
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3
3
3
-
-
-
-
3
3
-
2
3
-
-
-
-
3
4
-
-
-
-
-
-
4
4
4
-
-
-
-
-
-
4
4
Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
Audit and Financial
Risk Committee
Indemnification of
Directors and Officers
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.
Membership
Attendance
Hussein Barma
Stephen Scott
Roger Davey
6/6
6/6
5/6
The Role of the
AFRC
The AFRC is responsible for assisting
the Board in overseeing the indepen-
dence of the external auditors and
fulfilling 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
significant risk; and
• External Audit.
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.
To fulfil these functions the AFRC
shall have the following duties and
responsibilities:
• To review the quality and
integrity of all published financial
statements 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
judgements 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
disclosure in financial statements.
• To ensure compliance by
the Company with legal and
regulatory requirements related to
financial reporting.
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C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
• To review and to recommend to
the Board the nomination and
appointment of the external
auditor for the purposes of prepa-
ring or issuing an auditors’ report
or performing other audit, review
or attest services and to recom-
mend to the Board the compensa-
tion of the external auditor.
• To review the qualifications,
performance 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 engagement 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.
• To meet with the external auditor
to discuss the annual financial
report and any transaction refe-
rred 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 inte-
grity of the internal controls and
accounting procedures of the
Company including reviewing
the Company’s procedures for
internal control.
• To identify risks inherent in the
business of the Company and to
review the Company’s risk mana-
gement procedures.
• To review and approve the
— 2019 Review
Company’s hiring policies regar-
ding partners, employees and
former partners and employees
of the present and former external
auditor of the Company.
• To review any significant, inclu-
ding 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 Direc-
tors, who in turn may refer the
matter to the Corporate Gover-
nance, Nominating and Compen-
sation Committee, any improprie-
ties or suspected improprieties
with respect to accounting and
other matters that affect financial
reporting or the integrity of the
business.
IIn addition, the AFRC shall establish
procedures for the receipt, retention
and treatment of complaints (inclu-
ding “whistleblowing” complaints)
received by Atalaya Mining regarding
risk management, legal/regulatory
compliance, accounting, internal
accounting controls or auditing. This
is to include a process for confi-
dential 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.
- 64 -
The AFRC met six times during 2019.
Four meetings were timed to coincide
with approval of financial results for
publication with two meetings held as
planning meetings 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
committee meetings. The principal
matters considered by the AFRC
during the year and in its discussions
with management and the external
auditors included:
• Review and approval of the
quarterly, half yearly and full year
financial results.
•
Impact of new accounting stan-
dards and guidance, in particular
IFRS 16 “Leases” and IFRIC 23.
• The going concern statement in
the Management Report above
and in Note 2.1(b) to the Financial
Statements, including the possible
impact of the COVID-19 outbreak.
• Key accounting and audit matters
for 2019 including the Astor Defe-
rred Consideration and Revenue
Recognition.
• An internal evaluation of the
AFRC’s performance with feed-
back from board members, senior
management 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
6 April 2020
Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
Corporate,
Governance,
Nominating and
Compensation
Committee
Report
Membership
Attendance
Stephen Scott
Damon Barber
Hussein Barma
Roger Davey
3/3
2/3
3/3
3/3
The Role of the
CGNCC
The Company’s Corporate Gover-
nance, Nominating and Compen-
sation Committee (“CGNCC”) is,
among other things, responsible
for reviewing the performance of
the executives, setting their remu-
neration, 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
performance standards which may
apply to any such grant.
Remuneration arrangements are
aligned to support the implementa-
The Company’s Corporate Governance, Nominating and Compensa-
tion Committee (“CGNCC”) is, among other things, responsible for
reviewing the performance of the executives, setting their remune-
ration, 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 performance standards which
may apply to any such grant.
tion of the Company strategy and
effective risk management for the
medium to long-term. The remune-
ration committee ensures that this
is done and considers the views of
shareholders.
The Committee makes recom-
mendations 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 Commi-
ttee 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.
- 65 -
Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
• At least annually, and prior to the
nomination or appointment of
potential candidates, the Commi-
ttee shall review the competen-
cies, skills, experience and areas
of expertise of the Board on an
individual and collective basis.
Based on this review, the Commi-
ttee 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 nomina-
tion 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
assess 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 appropriate.
The Committee shall report its
findings to the Board and, based
on those findings, recommend
any action plans that the Commi-
ttee 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 corpo-
rate governance practices and
policies. As part of its review, the
Committee shall take regulatory
requirements and best prac-
tices, including the UK Corporate
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
recommendation 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 all senior manage-
ment reporting directly to the CEO.
• The Committee shall periodi-
cally 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 manage-
ment personnel, the Committee
may make a replacement recom-
mendation for Board approval
based on the succession plan.
• The Committee shall periodically
review the Company’s existing
share option plan and make any
recommendations 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.
Governance Code and QCA
guidelines, into account. The
Committee shall report the results
of its review, including any recom-
mended 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 Accoun-
ting 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.
• 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 disclo-
sure 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
- 66 -
Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
— 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
consolidation figures) as at the
balance sheet date are as follows:
There were no further option grants
between the balance sheet date and
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.
— Substantial Share
Interests
The Shareholders holding more
than 3% of the share capital of the
Company as at the date of this report
were:
— 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.
Grant date
Expiration date
Exercise price
A. Lavandeira
23 Feb 2017
22 Feb 2022
29 May 2019
28 May 2024
144p
201.5p
Company
Urion Holdings (Malta) Ltd (subsidiary of Trafigura)
Yanggu Xiangguang Copper Co. Ltd
Liberty Metals & Mining Holdings LLC
Orion Mine Finance (Master) Fund I LP
Cobas Asset Management, SGIIC, S.A.
Ordinary
shares
000’s
30,821
30,706
19,579
18,787
6,959
150,000
600,000
750,000
%
22.44
22.36
14.26
13.68
5.07
- 67 -
Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
— 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 2019 is set out below:
(Euro 000’s)
Short term benefits
Share based payments
31 Dec 2019
Salary & fees
Bonus
Incentive options*
Bonus shares**
Total
Executive directors
A. Lavandeira
Non-executive directors
R. Davey
D. Barber
H. Barma
J. Fernández
J. Lamb
H. Liu
J. Sierra López
S. Scott
Notes:
457
107
56
76
51
51
51
65
79****
993
325***
173
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
325
173
-
-
-
-
-
-
-
-
-
-
955
107
56
76
51
51
51
65
79
1,491
(*) The amount relates to the non-cash expense recognised in accordance with IFRS 2 Share-based payments. On 29 May 2019 the
Company granted 600,000 share options to the Executive Director Alberto Lavandeira (see Note 23).
(**) There were no bonus shares granted during 2019.
(***) The amount relates to the approval of the performance bonus for 2018 by the BoD following the proposal of the CGNC Committee.
During 2019, 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 2019 performance.
(****) Includes €3k paid to the Canadian Pension Plan for fees related to previous years.
- 68 -
Annual Report
C O R P O R A T E G O V E R N A N C E R E P O R T
Atalaya Mining Plc.
— 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 2019 and 2018, are as follows:
2019
2018
Nr. of existing ordinary
shares
% of issued share
capital
Nr. of existing ordinary
shares
% of issued share
capital
-
210,000
19,578,947*
-
30,821,213*
31,150,943**
18,786,609*
26,666
-
-
0.15%
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%
14.26%
-
22.44%
22.68%
13.68%
0.02%
-
Name
R. Davey
A. Lavandeira
D. Barber(1)
H. Barma
J. Fernández(2)
H. Liu(3)
J. Lamb(4)
J. Sierra Lopez
S. Scott
Notes:
(1) Liberty Metals & Mining Holdings LLC
(2) Urion Holdings (Malta) Ltd
(3) Yanggu Xiangguang Copper Co. Ltd
(4) Orion Mine Finance (Master) Fund I LP
(*) Shares held by the companies the Directors represent
(**) includes 444,711 shares held personally by Mr. Liu. No movements during 2019.
— 2019 Review
The Committee met three times during 2019, covering a
number of issues. 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 membership 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 2019.
Atalaya always bases their remuneration packages in
comparison with their peers in the mining sector and in
companies of similar size and similar financials.
- 69 -
Stephen Scott
Chairman of Corporate
Governance, Nominating and
Compensation Committee
6 April 2020
Atalaya Mining Plc.
C O R P O R A T E G O V E R N A N C E R E P O R T
Annual Report
Physical Risks
Committee Report
Membership
Attendance
Dr José Sierra López (Chair)
Roger Davey
Stephen Scott
4/4
4/4
4/4
The Role of the
PRC
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 represent 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 reaso-
nable grounds upon which such
reliance or assumption may not be
appropriate.
meets all regulations and assesses
risk factors on a regular basis.
I would like to thank the safety
department personnel, in particular,
for their contributions and sugges-
tions to continually make our opera-
tions safer.
Dr José Sierra López
Chairman of Physical Risks
Committee
6 April 2020
Management is responsible for
implementing, managing and main-
taining 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 information 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.
— 2019 Review
The PRC had four meetings in the
year which covered a number of
issues. These included meetings on
site which covered health and safety
issues and risk areas. Health and
safety is a key priority to ensure a
safe working environment for both
employees and contractors and the
Company is focused on ensuring it
- 70 -
- 71 -
Atalaya Mining Plc.corporate governance reportAnnual Report Atalaya Mining Plc.
f i n a n c i a l s t a t e m e n t s
Annual Report
- 72 -
Annual Report
f i n a n c i a l s t a t e m e n t s
Atalaya Mining Plc.
Financial
Statements
74
Independent Auditor’s report
80 Consolidated and Company
Statements of Comprehensive Income
81 Consolidated and Company
Statements of Financial Position
82 Consolidated Statement of Changes
in Equity
83 Company Statement of Changes
in Equity
84 Consolidated Statement of Cash Flows
85 Company Statement of Cash Flows
87 Notes to the Consolidated and
Company Financial Statements
- 73 -
Independent
Auditor’s report
to the members of atalaya mining plc
Report on the Audit of the Financial
Statements
- 74 -
Atalaya Mining Plc.financial statementsAnnual Report - 75 -
Atalaya Mining Plc.financial statementsAnnual Report - 76 -
Atalaya Mining Plc.financial statementsAnnual Report - 77 -
Atalaya Mining Plc.financial statementsAnnual Report - 78 -
Atalaya Mining Plc.financial statementsAnnual Report - 79 -
Atalaya Mining Plc.financial statementsAnnual Report Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Consolidated and Company Statements of
Comprehensive Income — For the year ended 31 December 2019
(Euro 000’s)
Revenue
Note
5
Operating costs and mine site administrative expenses
187,868
(115,325)
Mine site depreciation, amortisation and impairment
13,14
(23,025)
The Group
2019
The Company
2019
The Group
2018
The Company
2018
1,283
189,476
1,323
-
-
1,283
(1,540)
-
-
(1,694)
-
(1,951)
124
(3)
13,607
3,223
-
15,000
(878)
14,122
14,122
-
(128,707)
(13,430)
47,339
(5,867)
(216)
(1,021)
-
(281)
39,954
158
1,613
-
71
(253)
41,543
(7,102)
34,441
34,715
(274)
-
-
1,323
(4,370)
(10)
-
-
-
(3,057)
117
40
13,615
2,569
-
13,284
(1,524)
11,760
11,760
-
14,122
34,441
11,760
25.4
25.1
49,518
(6,718)
(619)
(3,588)
(1,694)
(373)
36,526
88
350
-
52
(89)
36,927
(6,207)
30,720
37,323
(6,603)
30,720
27.2
26.8
23
7
6
4
9
9
10
11
12
12
Gross profit
Administration and other expenses
Share based benefits
Exploration expenses
Impairment loss on other receivables
Care and maintenance expenditure
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 before tax
Tax
Profit for the year
Profit for the year attributable to:
— Owners of the parent
— Non-controlling interests
Earnings per share from operations attributable to equity
holders of the parent during the year:
Basic earnings per share (EUR cents per share)
Diluted earnings per share (EUR cents per share)
Profit for the year
Other comprehensive income:
Other comprehensive income that will not be reclassified
to profit or loss in subsequent periods (net of tax):
Change in fair value of financial assets through other
comprehensive income 'OCI'
30,720
14,122
34,441
11,760
20
(29)
(29)
(58)
(58)
Total comprehensive profit for the year
30,691
14,093
34,383
11,702
Total comprehensive profit for the year attributable to:
— Owners of the parent
— Non-controlling interests
37,294
(6,603)
30,691
14,093
-
14,093
34,657
(274)
34,383
11,702
-
11,702
The notes on pages 85 to 140 are an integral part of these consolidated and Company financial statements.
- 80 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Consolidated and Company Statements of
Financial Position — As at 31 December 2019
(Euro 000’s)
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Trade and other receivables
Non-current financial asset
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Tax refundable
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
Leases
Deferred consideration
Current liabilities
Trade and other payables
Leases
Current tax liabilities
Total liabilities
Total equity and liabilities
Note
The Group 2019
The Company 2019
The Group 2018
The Company 2018
13
14
15
19
20
17
18
19
20
21
22
22
23
24
25
26
27
28
25
27
11
307,815
63,085
-
500
1,101
6,576
-
-
4,630
310,002
-
-
379,077
314,632
21,330
32,857
1,924
42
8,077
64,230
443,307
13,372
314,319
22,836
(30,669)
319,858
(2,402)
317,456
13
6,941
5,265
53,000
65,219
57,537
588
2,507
60,632
125,851
443,307
-
4,043
-
42
128
4,213
318,845
13,372
314,319
6,435
(36,535)
297,591
-
297,591
-
-
-
9,117
9,117
10,272
-
1,865
12,137
21,254
318,845
257,376
71,951
-
249
-
7,927
337,503
10,822
23,688
-
71
33,070
67,651
405,154
13,372
314,319
12,791
(58,308)
282,174
4,200
286,374
45
6,519
-
53,000
59,564
57,271
-
1,945
59,216
118,780
405,154
-
-
3,899
290,104
-
-
294,003
-
6,689
-
71
826
7,586
301,589
13,372
314,319
5,845
(50,657)
282,879
-
282,879
-
-
-
9,117
9,117
8,069
-
1,524
9,593
18,710
301,589
The notes on pages 85 to 140 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 6 April 2020 and were signed on its behalf.
Roger Davey
Chairman
Alberto Lavandeira
Managing Director
- 81 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Consolidated Statement of Changes in Equity
— For the year ended 31 December 2019
(Euro 000’s)
At 1 January 2018
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
20
22
22
23
23
23
Attributable to owners of the parent
Note
Share
capital
Share
Premium(2)
Other
reserves(1)
Accumulated
losses
Total
Non-
controlling
interest
Total
equity
13,192
309,577
6,137
(86,527)
242,379
4,474
246,853
-
-
-
180
-
-
-
-
-
-
-
4,747
(5)
-
-
-
(58)
(58)
-
-
-
34,715
34,715
(274)
34,441
-
(58)
-
(58)
34,715
34,657
(274)
34,383
-
-
5,050
(5,050)
216
-
1,446
(1,446)
4,927
(5)
-
216
-
-
-
-
-
-
4,927
(5)
-
216
-
At 31 December 2018/ 1 January 2019
13,372
314,319
12,791
(58,308)
282,174
4,200
286,374
Profit for the year
Change in fair value of financial
assets through OCI
Total comprehensive income
Transactions with owners
Depletion factor
Recognition of share-based
payments
Recognition of non-distributable
reserve
Recognition of distributable reserve
Other changes in equity
20
23
23
23
23
23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,323
37,323
(6,602)
30,721
-
(29)
-
(29)
37,323
37,294
(6,602)
30,692
(29)
(29)
5,378
(5,378)
619
-
1,984
(1,984)
-
619
-
-
1,844
249
(1,844)
(478)
(229)
-
-
-
-
-
-
619
-
-
(229)
At 31 December 2019
13,372
314,319
22,836
(30,669)
319,858
(2,402)
317,456
(1) Refer to Note 23
(2) The share premium reserve is not available for distribution.
The notes on pages 85 to 140 are an integral part of these consolidated and company financial statements.
- 82 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Company Statement of Changes in Equity
— For the year ended 31 December 2019
(Euro 000’s)
Note
Share capital
Share
premium(2)
Other
reserves(1)
Accumulated
losses
Total
At 1 January 2018
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
At 31 December 2018/1 January 2019
Profit for the year
Change in fair value of financial assets through
OCI
Total comprehensive income
Recognition of share-based payments
20
22
22
23
20
23
13,192
309,577
5,687
(62,417)
266,039
-
-
-
-
-
-
180
4,747
-
-
(5)
-
-
(58)
(58)
-
-
216
11,760
11,760
-
(58)
11,760
-
-
-
11,702
4,927
(5)
216
13,372
314,319
5,845
(50,657)
282,879
-
-
-
-
-
-
-
-
-
14,122
14,122
(29)
(29)
619
-
(29)
14,122
14,093
-
619
At 31 December 2019
13,372
314,319
6,435
(36,535)
297,591
(1) Refer to Note 23
(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 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.
The notes on pages 85 to 140 are an integral part of these consolidated and company financial statements.
- 83 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Consolidated Statement of Cash Flows
— For the year ended 31 December 2019
(Euro 000’s)
Note
2019
2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Impairment of intangibles
Recognition of share based payments
Interest income
Interest expense
Unwinding of discounting
Legal provisions
Release of prior year provision
Impairment loss on other receivables
Rehabilitation provision
Loss on disposal of intangibles
Unrealised foreign exchange loss on financing activities
13
14
14
23
9
10
10
26
6
19
36,927
41,543
12,575
3,502
6,948
619
(52)
41
40
261
-
1,694
(18)
-
2
10,143
3,287
-
216
(71)
214
39
(86)
(117)
-
-
955
179
CASH INFLOWS FROM OPERATING ACTIVITIES BEFORE WORKING CAPITAL CHANGES
62,539
56,302
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Deferred consideration
Cash flows from operations
Interest expense on lease liabilities
Interest paid
Tax paid
Net cash from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Acquisition of other financial assets
Disposal of subsidiary
Interest received
Net cash used in investing activities
Cash flows from financing activities
Lease payment
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
18
19
25
27
13
14
20
15
9
27
22
21
21
(10,508)
(9,911)
1,159
-
43,279
(8)
(41)
(5,296)
37,934
(56,453)
(5,449)
(501)
-
52
2,852
11,697
(10,334)
17
60,534
-
(214)
(4,987)
55,333
(63,216)
(2,492)
-
(75)
71
(62,351)
(65,712)
(576)
-
-
(576)
(24,993)
33,070
8,077
-
598
(5)
593
(9,786)
42,856
33,070
The notes on pages 85 to 140 are an integral part of these consolidated and Company financial statements.
- 84 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Company Statement of Cash Flows
— For the year ended 31 December 2019
(Euro 000’s)
Note
2019
2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before tax
Adjustments for:
Share based payments
Interest income
Interest income from interest-bearing intercompany loans
Impairment loss on other receivables
Release of prior year provision
Unrealised foreign exchange loss on financing activities
15,000
13,284
-
(25)
10
(63)
(16,805)
(16,121)
-
-
-
-
(117)
209
9
9
6
CASH INFLOWS USED IN OPERATING ACTIVITIES BEFORE WORKING CAPITAL CHANGES
(1,830)
(2,798)
Changes in working capital:
Increase in trade and other receivables
Increase in trade and other payables
Cash flows used in operations
Tax paid
Net cash used in operating activities
Cash flows from investing activities
Interest received
Investment in subsidiaries
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
19
25
9
9
22
22
21
21
(17,252)
2,204
(16,878)
(537)
(17,415)
25
(113)
16,805
16,717
-
-
-
(53,969)
2,077
(54,690)
-
(54,690)
63
-
16,121
16,184
4,927
(5)
4,922
(698)
(33,584)
826
128
34,410
826
The notes on pages 85 to 140 are an integral part of these consolidated and company financial statements.
- 85 -
- 86 -
Atalaya Mining Plc.financial statementsAnnual Report Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Notes to the Consolidated
and Company Financial
Statements — Year ended 31 December 2019
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 continued to be listed on AIM and the TSX as at
31 December 2019.
Additional information about Atalaya Mining Plc is avai-
lable at www.atalayamining.com as per requirement of
AIM rule 26.
— 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 ordi-
nary shares of nominal value of £0.0025.
— Principal activities
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.
Atalaya also owns 10% of Proyecto Touro, a brownfield
copper project in northwest Spain.
In November 2019, Atalaya executed the option to acquired
12.5% of Explotaciones Gallegas del Cobre, S.L. the explora-
tion property around Touro, with known additional reserves,
which will provide high potential to the Proyecto Touro.
The Company’s and its subsidiaries’ activity are to explore
for and develop metals 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.
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 policies have been consistently applied to all the
years presented, unless otherwise stated.
2.1 Basis of preparation
(a) Overview
The financial statements of Atalaya Mining Plc have been
prepared in accordance with International Financial Repor-
ting Standards (“IFRS”). IFRS comprise the standards issued
by the International Accounting Standards Board (“IASB”).
The financial statements are presented in € and all values
are rounded to the nearest thousand (€’000), except where
otherwise indicated.
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Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
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
2019, 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 and in note 3.
The preparation of financial statements in conformity with
IFRS requires the use of certain critical accounting esti-
mates. It also requires management to exercise its judg-
ment 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 financial statements are disclosed in
Note 3.4.
(b) Going concern
On 11 March 2020, the World Health Organisation declared
the Coronavirus COVID- 19 outbreak to be a pandemic
in recognition of its rapid spread across the globe. Many
governments are taking increasingly stringent steps to help
contain, and in many jurisdictions, now delay, the spread of
the virus, including: requiring self-isolation/ quarantine by
those potentially affected, implementing social distancing
measures, and controlling or closing borders and “locking-
down” cities/regions or even entire countries.
The crisis and the actions taken by governments have
resulted in significant disruption to business operations,
consumption patterns worldwide, equity markets and
significant volatility in commodities prices, including
copper, which prices declined below Company’s ASIC level
during March 2020.
Furthermore, in Spain, where the Company has its single
producing asset, the Government issued a Royal Decree
on 14 March 2020 to declare the nationwide lockdown to
reduce the impact of the COVID-19 pandemic. On 29 March
2020, the Spanish Government issued a new Royal Decree
implementing enhanced measures to protect the people
from the virus. The new Decree stipulated that only emplo-
yees from a short list of essential industries are allowed
to continue working from 30 March 2020. Mining was
excluded as an essential industry and consequently the
Proyecto Riotinto site was required to halt its operations for
a short period until 3 April 2020 when mining operations
were permitted to restart.
The significant impact on copper prices and the stoppage
of Proyecto Riontinto as a result of the Royal Decree will
impact the revenues for the year ended 31 December
2020. The uncertain surrounding future copper prices and
if Proyecto Riotinto will be required to be halted again for
a longer period makes difficult to determine and quantify
the operational and financial impact there may be on the
business going forward.
The Directors have considered and debated different
possible scenarios on the Company’s operations, financial
position and forecast for a period of at least 12 months
since the approval of these financial statements. Possible
scenarios range from (i) further disruption in Proyecto
Riotinto; (ii) market volatility in commodity prices; and (iii)
availability of existing credit facilities.
The Company has increased its cash balance from €8.0
million as at 31 December 2019 to €41.7 million as at 31
March 2020 by drawing down on existing credit facilities
(see Note 34).
The Directors, after reviewing these scenarios, the current
cash resources, forecasts and budgets, timing of cash flows,
borrowing facilities, sensitivity analyses and considering
the associated uncertainties to the Group’s operations have
a reasonable expectation that the Company has adequate
resources to continue operating in the foreseeable future.
Accordingly, 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 business. 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 equivalents to continue
operating for the next twelve months (see Note 34).
2.2 Changes in accounting policy and
disclosures
The Group has adopted all the new and revised IFRSs
and International Accounting Standards (IASs) which are
relevant to its operations and are effective for accounting
periods commencing on 1 January 2019.
The Group applied IFRS 16 and IFRIC 23 for the first time
from 1 January 2019. The nature and effect of the changes
as a result of adoption of this new accounting standard is
described below.
Several other amendments and interpretations apply for the
first time in 2019, but do not have a significant impact on the
consolidated financial statements of the Group. The Group
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
has not early adopted any standards, interpretations or
amendments that have been issued but are not yet effective.
a) Comparative accounting policy in terms of IAS 17
IFRS 16 – Leases
The Group has adopted all of the requirements of IFRS 16
Leases (‘IFRS 16’) effective 1 January 2019 (initial applica-
tion). IFRS 16 supersedes IAS 17 Leases (‘IAS 17’). IFRIC
4 Determining whether an Arrangement contains a Lease,
SIC-15 Operating Leases-Incentives and SIC-27 Evaluating
the Substance of Transactions Involving the Legal Form
of a Lease. The standard sets out the principles for the
recognition, measurement, presentation and disclosure
of leases and requires lessees to account for most leases
under a single on-balance sheet model.
The Group has applied IFRS 16 using the modified retros-
pective approach and therefore the comparative informa-
tion has not been restated and continues to be reported
in terms of IAS 17 and IFRIC 4: Determining Whether an
Arrangement Contains a Lease. The Group has applied the
modified retrospective approach whereby the right of use
asset was set equal to the finance lease liability with no
impact on retained earnings on 1 January 2019.The Group
elected to use the “transition practical expedient” allowing
the standard to be applied only to contracts that were
previously identified as leases applying IAS 17 and IFRIC 4
at the date of initial application. As a result, the Group has
changed its accounting policy for leases as detailed in the
accounting policies (Note 2.2)
In terms of IAS 17, the Group was required to classify its
leases as either finance leases or operating leases and
account for those two types of leases differently (both as
a lessor or a lessee). A lease was classified as a finance
lease if it transferred substantially all the risks and rewards
incidental to ownership. A lease was classified as an opera-
ting lease if all the risks and rewards incidental to owner-
ship did not substantially transfer.
Finance leases were recognised as assets and liabilities
in the statement of financial position at amounts equal to
the fair value of the leased property or, if lower, the present
value of the minimum lease payments. The correspon-
ding liability to the lessor was included in the statement
of financial position as a finance lease obligation. The
discount rate used in calculating the present value of the
minimum lease payments is the interest rate implicit in the
lease. The lease payments are apportioned between the
finance charge and reduction of the outstanding liability.
The finance charge is allocated to each period during the
lease term so as to produce a constant periodic rate on the
remaining balance of the liability.
Operating lease payments, in the event of the Group
operating as lessee, were recognised as an expense on
a straight-line basis over the lease term. The difference
between the amounts recognised as an expense and the
contractual payments were recognised as an operating
lease asset. The liability was not discounted.
Impact of adopting IFRS 16 on the Group’s consolidated
financial statements
b) Accounting policy in terms of IFRS 16
The following table summarises the impact of adopting
IFRS 16 on the Group’s extracted consolidated statement
of financial position at 1 January 2019:
The Group recognises right-of-use assets at the commen-
cement date of the lease (i.e., the date the underlying asset
Right-of-use assets
(Euro 000’s)
Non-current assets
Note
As previously reported
31 December 2018
Adjustments as at
1 January 2019
Balance as at
1 January 2019
Property, plant and equipment
13
Deferred tax asset
Equity and liabilities
Accumulated losses
Non-current liabilities
Leases
Current liabilities
Leases
27
27
257,376
7,927
(58,308)
-
-
- 89 -
6,144
-
-
5,609
534
263,520
7,927
(58,308)
5,609
534
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
is available for use). Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease
liabilities.
The cost of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement
date less any lease incentives received. Unless the Group
is reasonably certain to obtain ownership of the leased
asset at the end of the lease term, the recognised right-
of-use assets are depreciated on a straight-line basis over
the shorter of its estimated useful life and the lease term.
Right-of-use assets are subject to impairment.
Subsequent to initial measurement, the right-of-use assets
are depreciated from the commencement date using the
straight-line method over the shorter of the estimated
useful lives of the right-of-use assets or the end of lease
term. These are as follows:
Right-of-use asset
Depreciation terms in years
Land
Motor vehicles
Laboratory equipment
Based on Units of Production
(UOP)
Based on straight line
depreciation
Based on straight line
depreciation
After the commencement date, the right-of-use assets are
measured at cost less any accumulated depreciation and
any accumulated impairment losses and adjusted for any
remeasurement of the lease liability.
Lease liabilities
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commen-
cement date, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the
Group’s incremental borrowing rate. Generally, the Group
uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease
liability include the following:
• The exercise price of a purchase option if the lessee is
reasonably certain to exercise that option
• Lease payments in an optional renewal period if the
Group is reasonably certain to exercise an extension
option
• Payments of penalties for early terminating the lease,
unless the Group is reasonably certain not to terminate
early.
The lease liability is measured at amortised cost using
the effective interest rate method. After the commence-
ment date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease
liabilities is re-measured if there is a modification, a change
in the lease term, a change in the in-substance fixed lease
payments or a change in the assessment to purchase
the underlying asset. The result of this re-measurement
is disclosed in a line of the right-of-use assets note as
modifications.
The lease liabilities as at 1 January 2019 can be reconciled
to the operating lease commitments as of 31 December
2018, as follows:
Assets
Operating lease commitments as at 31
December 2018
Weighted average incremental borrowing rate
as at 1 January 2019
Discounted operating lease commitments as
at 1 January 2019
Lease liabilities as at 1 January 2019
€’000
6,803
1.50%
6,144
6,144
When the lease liability is remeasured, a corresponding
adjustment is made to the carrying amount of the right-
of-use asset or is recorded as profit or loss if the carrying
amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
• Fixed payments, less any lease incentives receivable
• Variable lease payments that depend on an index or
rate, initially measured using the index or rate as at the
commencement date
• Amounts expected to be payable by the lessee under
residual value guarantees
The Group applies the short-term lease recognition exemp-
tion to its short-term leases of machinery and equipment
(i.e., those leases that have a lease term of 12 months or
less from the commencement date and do not contain
a purchase option). It also applies the lease of low-value
assets recognition exemption to leases of office equipment
that are considered of low value (i.e., below €5,000). Lease
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
payments on short-term leases and leases of low-value
assets are recognised as expense on a straight-line basis
over the lease term.
The amounts recognised in profit or loss, are set out below:
Significant judgement in determining the lease term of
contracts with renewal options
(Euro 000’s)
The Group determines the lease term as the non-cance-
llable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain
to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be
exercised.
The Group has the option, under some of its leases to
lease the assets for additional terms of three to five years.
The Group applies judgement in evaluating whether it is
reasonably certain to exercise the option to renew. That is,
it considers all relevant factors that create an economic
incentive for it to exercise the renewal. After the commen-
cement date, the Group reassesses the lease term if there
is a significant event or change in circumstances that is
within its control and affects its ability to exercise (or not
to exercise) the option to renew (e.g., a change in business
strategy). The Group included the renewal period as part
of the lease term for leases of plant and machinery due to
the significance of these assets to its operations. These
leases have a short non-cancellable period (i.e., three to
five years) and there will be a significant negative effect
on production if a replacement is not readily available.
The renewal options for leases of motor vehicles were not
included as part of the lease term because the Group has
a policy of leasing motor vehicles for not more than five
years and hence not exercising any renewal options.
Twelve month
ended
31 Dec
2019
Twelve month
ended
31 Dec
2018
(391)
(8)
(399)
-
-
-
As at 31 December
Depreciation expense of
right-of-use assets
Interest expense on lease
liabilities
Total amounts recognised
in profit or loss
The Group recognised rent expense from short-term
leases.
IFRIC Interpretation 23 Uncertainty over Income
Tax Treatment
The Interpretation addresses the accounting for income
taxes when tax treatments involve uncertainty that affects
the application of IAS 12 Income Taxes. It does not apply
to taxes or levies outside the scope of IAS 12, nor does it
specifically include requirements relating to interest and
penalties associated with uncertain tax treatments. The
Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments
separately
c) Amounts recognised in the statement of financial posi-
tion and profit or loss
• The assumptions an entity makes about the
examination of tax treatments by taxation authorities
Set out below are the carrying amounts of the Group’s
right-of-use assets and lease liabilities and the movements
during the period:
• How an entity determines taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax
rates
(Euro 000’s)
As at 1 January 2019
Additions
Depreciation expense
Interest expense
Payments
As at 31 December 2019
Total
6,144
277
(390)
-
-
Lease
liabilities
6,144
277
-
8
(576)
5,853
-
277
(40)
-
-
237
6,031
Right – of-use assets
Land
Vehicles
Laboratory
equipment
59
-
(15)
-
-
44
6,085
-
(335)
-
-
5,750
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Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
• How an entity considers changes in facts and
circumstances
The Group determines whether to consider each uncertain
tax treatment separately or together with one or more
other uncertain tax treatments and uses the approach that
better predicts the resolution of the uncertainty.
The Group applies significant judgement in identifying
uncertainties over income tax treatments. Since the
Group operates in a complex multinational environment, it
assessed whether the Interpretation had an impact on its
consolidated financial statements.
Upon adoption of the Interpretation, the Group considered
whether it has any uncertain tax positions, particularly
those relating to transfer pricing. The Company’s and the
subsidiaries’ tax filings in different jurisdictions include
deductions related to transfer pricing and the taxation
authorities may challenge those tax treatments. The Group
determined, based on its tax compliance and transfer
pricing study, that it is probable that its tax treatments
(including those for the subsidiaries) will be accepted by
the taxation authorities. The Interpretation did not have
an impact on the consolidated financial statements of the
Group.
Amendments to IFRS 9: Prepayment Features with
Negative Compensation
Under IFRS 9, a debt instrument can be measured at
amortised cost or at fair value through other comprehen-
sive income, provided that the contractual cash flows are
‘solely payments of principal and interest on the principal
amount outstanding’ (the SPPI criterion) and the instru-
ment is held within the appropriate business model for that
classification. The amendments to IFRS 9 clarify that a
financial asset passes the SPPI criterion regardless of an
event or circumstance that causes the early termination
of the contract and irrespective of which party pays or
receives reasonable compensation for the early termina-
tion of the contract. These amendments had no impact on
the consolidated financial statements of the Group.
IAS 28: Long-term Interests in Associates and Joint
Ventures (Amendments)
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 invest-
ment, recognised as adjustments to the net investment in
the associate or joint venture that arise from applying IAS
28 Investments in Associates and Joint Ventures.
These amendments had no impact on the consolidated
financial statements as the Group does not have long term
interests in its associate and joint venture.
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 the current service cost for the remainder of the
period after the plan amendment, curtailment or settlement,
using the actuarial assumptions used to remeasure the
net defined benefit liability (asset) reflecting the benefits
offered under the plan and the plan assets after that event.
An entity is also required to determine the net interest for
the remainder of the period after the plan amendment,
curtailment or settlement using the net defined benefit liabi-
lity (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 had no impact on the consolidated financial
statements of the Group as it did not have any plan amend-
ments, curtailments, or settlements during the period.
Annual Improvements 2015-2017 Cycle
•
IFRS 3 Business Combinations. The amendments
clarify that, when an entity obtains control of a business
that is a joint operation, it applies the requirements for
a business combination achieved in stages, including
remeasuring previously held interests in the assets and
liabilities of the joint operation at fair value. In doing
so, the acquirer remeasures its entire previously held
interest in the joint operation. An entity applies those
amendments to business combinations for which the
acquisition date is on or after the beginning of the first
annual reporting period beginning on or after 1 January
2019, with early application permitted. These amend-
ments had no impact on the consolidated financial
statements of the Group as there is no transaction
where joint control is obtained.
•
IAS 12 Income Taxes. The amendments clarify that the
income tax consequences of dividends are linked more
directly to past transactions or events that generated
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Atalaya Mining Plc.
distributable profits than to distributions to owners.
Therefore, an entity recognises the income tax conse-
quences of dividends in profit or loss, other comprehen-
sive income or equity according to where it originally
recognised those past transactions or events. An entity
applies the amendments for annual reporting periods
beginning on or after 1 January 2019, with early
application permitted. When the entity first applies
those amendments, it applies them to the income tax
consequences of dividends recognised on or after the
beginning of the earliest comparative period. Since the
Group’s current practice is in line with these amend-
ments, they had no impact on the consolidated financial
statements of the Group.
•
IAS 23 Borrowing Costs. The amendments clarify that
an entity treats as part of general borrowings any
borrowing originally made to develop a qualifying asset
when substantially all of the activities necessary to
prepare that asset for its intended use or sale are
complete. The entity applies the amendments to
borrowing costs incurred on or after the beginning of
the annual reporting period in which the entity first
applies those amendments. An entity applies those
amendments for annual reporting periods beginning on
or after 1 January 2019, with early application permi-
tted. Since the Group’s current practice is in line with
these amendments, they had no impact on the consoli-
dated financial statements of the Group.
2.2.1 Standards issued but not yet
effective
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 appli-
cable, when they become effective.
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 recognised when a transaction involves assets
that do not constitute a business, even if these assets
are housed in a subsidiary. In December 2015 the IASB
postponed the effective date of this amendment indefi-
nitely, but an entity that early adopts the amendments
must apply them prospectively. The amendments have not
yet been endorsed by the EU. The Group will apply these
amendments when they become effective.
IFRS 3: Business Combinations (amendments)
The IASB issued amendments in Definition of a Business
(amendments to IFRS 3) aimed at resolving the difficul-
ties that arise when an entity determines whether it has
acquired a business or a group of assets. These amend-
ments are effective 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 acqui-
sitions that occur on or after the beginning of that period,
with earlier application permitted. These Amendments
have not yet been endorsed by the EU. The Group does not
expect these amendments to have a material impact on its
profit 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 begin-
ning 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, ’Infor-
mation is material 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 information about a specific reporting
entity’. In addition, the explanations accompanying the
definition have been improved. The amendments also
ensure that the definition of material is consistent across
all IFRS Standards. The Group does not expect these
amendments to have a material impact on its profit and
financial position.
Interest Rate Benchmark Reform - IFRS 9, IAS 39
and IFRS 7 (Amendments)
The amendments are effective for annual periods begin-
ning on or after 1 January 2020 and must be applied
retrospectively. Earlier application is permitted. In
September 2019, the IASB issued amendments to IFRS
9, IAS 39 and IFRS 7, which concludes phase one of its
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work to respond to the effects of Interbank Offered Rates
(IBOR) reform on financial reporting. Phase two will focus
on issues that could affect financial reporting when an
existing interest rate benchmark is replaced with a risk-
free interest rate (an RFR). The amendments published,
deal with issues affecting financial reporting in the period
before the replacement of an existing interest rate bench-
mark with an alternative interest rate and address the
implications for specific hedge accounting requirements
in IFRS 9 Financial Instruments and IAS 39 Financial
Instruments: Recognition and Measurement, which require
forward-looking analysis. The amendments provided
temporary reliefs, applicable to all hedging relationships
that are directly affected by the interest rate benchmark
reform, which enable hedge accounting to continue during
the period of uncertainty before the replacement of an
existing interest rate benchmark with an alternative nearly
risk-free interest rate. There are also amendments to IFRS
7 Financial Instruments: Disclosures regarding additional
disclosures around uncertainty arising from the interest
rate benchmark reform. The Group does not expect these
amendments to have a material impact on its profit and
financial position.
IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or
Non-current (Amendments)
The amendments are effective for annual reporting periods
beginning on or after January 1, 2022 with earlier applica-
tion permitted. The amendments aim to promote consis-
tency in applying the requirements by helping companies
determine whether, in the statement of financial position,
debt and other liabilities with an uncertain settlement
date should be classified as current or non-current. The
amendments affect the presentation of liabilities in the
statement of financial position and do not change existing
requirements around measurement or timing of recog-
nition of any asset, liability, income or expenses, nor the
information that entities disclose about those items. Also,
the amendments clarify the classification requirements for
debt which may be settled by the company issuing own
equity instruments. These Amendments have not yet been
endorsed by the EU. The Group does not expect these
amendments to have a material impact on its profit and
financial position.
Conceptual Framework in IFRS standards
The IASB issued the revised Conceptual Framework for
Financial Reporting on 29 March 2018. The Conceptual
Framework sets out a comprehensive set of concepts
for financial reporting, 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, Amendments to References
to the Conceptual Framework in IFRS Standards, which
sets out the amendments to affected standards in order to
update references to the revised Conceptual Framework.
Its objective is to support transition to the revised Concep-
tual Framework for companies that develop accounting
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) Basis of consolidation
The consolidated financial statements comprise the finan-
cial statements of Atalaya Mining Plc and its subsidiaries.
(b) Subsidiaries
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 disper-
sion of holdings of other shareholders give the Group the
power to govern the financial and operating policies, etc.
The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated financial
statements from the date the Group gains control until the
date the Group ceases to control the subsidiary.
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Profit or loss and each component of OCI are attributed
to the equity holders of the parent of the Group and to
the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial state-
ments of subsidiaries to bring their accounting policies in
line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the
Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without
a loss of control, is accounted for as an equity transaction.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. If the Group loses
control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interest and
other components of equity, while any resultant gain or
loss is recognised in profit or loss. Any investment retained
is recognised at fair value’.
The main operating subsidiary of Atalaya Mining Plc is
the 100% owned Atalaya Riotionto Minera, S.L.U. which
operates “Proyecto Riotinto”, in the historical site of Huelva,
Spain.
The name and shareholding of the entities included in the
Group in these financial statements are:
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 trans-
ferred 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
arrangement. 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 recognised amounts of acquiree’s identifiable
net assets.
(c) Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer’s previously
held equity interest in the acquire 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 accordance with IFRS 9 in profit or loss.
Entity 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
Operating
Holding
Operating
Holding
Trust
Development
Dormant
%(2)
n/a
100%
100%
100%
50%
Country
Cyprus
Cyprus
Spain
Spain
Spain
100%
United Kingdom
100%
Spain
100%
United Kingdom
100%
10%
100%
Spain
Spain
Spain
(1) Cobre San Rafael, S.L. is the entity which holds the mining rights of the Proyecto Touro. 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 31 for details on the acquisition of Cobre San Rafael, S.L.
(2) The effective proportion of shares held as at 31 December 2019 and 2018 remained unchanged.
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Contingent consideration that is classified as equity is not
re-measured, and its subsequent settlement is accounted
for within equity.
Inter-company transactions, balances, income and
expenses on transactions between Group companies are
eliminated. Gains and losses resulting from intercom-
pany 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) Changes in ownership interests in subsidiaries
without change of control
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 subsi-
diary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
(e) Disposal of subsidiaries
When the Group ceases to have control any retained inte-
rest 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 accoun-
ting for the retained interest as an associate, joint venture
or financial asset. In addition, any amounts previously
recognised in other comprehensive 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 comprehen-
sive income are reclassified to profit or loss.
(f) Associates and joint ventures
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 arrange-
ment, 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 invest-
ment 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
proportionate 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
recognised in the income statement, and its share of
post-acquisition movements in other comprehensive
income is recognised in other comprehensive income, with
a corresponding adjustment to the carrying amount of the
investment. When the Group share of losses in an asso-
ciate 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
associate 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 downs-
tream transactions between the Group and its associate
or joint venture are recognised in the Group’s consoli-
dated 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 transfe-
rred. 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) Functional currency
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
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environment 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 environ-
ment 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-measured. 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
currencies are updated 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.
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.
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 stra-
tegic, 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 contro-
lled 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 arrangement 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
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.
The Group has only one distinct business segment,
being that of mining operations, mineral exploration and
development.
2.7 Inventory
Inventory consists of 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 esti-
mated 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 com-
prises direct purchase costs and an appropriate portion of
fixed and variable overhead costs, including depreciation
and amortisation, incurred in converting materials into
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finished goods, based on the normal production capacity.
The cost of production is allocated to joint products using
a ratio of spot prices by volume at each month end. Sepa-
rately 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 determined 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 capita-
lised 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 Construction” are then transfe-
rred to the relevant asset categories.
Once a project has been established as commercially
viable, related development expenditure is capitalised.
A development decision is made based upon consi-
deration of project economics, including future metal
prices, reserves and resources, and estimated operating
and capital costs. Capitalisation 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
assets under construction. No depreciation is recognised
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
impairment 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 esti-
mated 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 ............................................................ UOP
× Mineral rights ..................................................... UOP
× Deferred mining costs ........................................ UOP
× Plant and machinery ........................................... UOP
× Motor vehicles ................................................ 5 years
× Furniture/fixtures/office equipment .......... 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 compa-
ring the proceeds with the carrying amount and are recog-
nised 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
reasonably determined are not recognised. Exploitable
mineral rights are amortised using the UOP basis over
the commercially 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.
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(b) Deferred mining costs – stripping costs
(d) Major maintenance and repairs
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
(stripping activity asset), are capitalised within deferred
mining costs provided all the following conditions are met:
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 separately 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.
i.
it is probable that the future economic benefit
associated with the stripping activity will be realised;
(e) Borrowing costs
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.
(c) Exploration costs
Under the Group’s accounting policy, exploration expendi-
ture 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 impairment provisions are written off.
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 capi-
talised 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 prepara-
tion 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 costs are charged to the consolidated statement of
income over the life of the operation through depreciation of
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 rehabili-
tation 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 zero and the remaining adjustment recognised in the
consolidated statement of income. In the case of closed
sites, changes to estimated costs are recognised immedia-
tely in the consolidated statement of income.
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2.10 Intangible assets
(a) Business combination and goodwill
Goodwill arises on the acquisition of subsidiaries and
represents 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. Acquisi-
tion-related costs are expensed as incurred.
Goodwill impairment reviews are undertaken annually or
more frequently if events or changes in circumstances indi-
cate 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
impairment is recognised immediately as an expense and
is not subsequently reversed.
(b) Permits
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 recognised in the consolidated and company
statements of comprehensive 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 amortisation 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 recognised 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-finan-
cial assets other than goodwill that suffered impairment
are reviewed for possible reversal of the impairment at
each reporting date.
Permits are capitalised as intangible assets which relate
to projects that are at the pre-development stage. No
amortisation 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.
2.12 Financial assets and liabilities
2.12.1 Classification
From 1 January 2018, the Group classifies its financial
assets in the following measurement categories:
Other intangible assets include computer software.
•
those to be measured at amortised cost.
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 acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amorti-
sation (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 amorti-
sation method for an intangible asset with a finite useful life
are reviewed at least at the end of each reporting period.
•
•
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 recogni-
tion 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
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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 comprehen-
sive 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
recognised 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 finan-
cial 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 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 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.
The Group’s financial assets at amortised cost include
receivables (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 recei-
vables which are measured at fair value through profit and
loss) and cash and cash equivalents.
2.12.3 Fair value through other
comprehensive income
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 recognised 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 reporting date, no such assets existed.
2.12.4 Equity instruments designated as
fair value through other comprehensive
income
Upon initial recognition, the Group can elect to classify
irrevocably 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.
Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as other
income in the consolidated and company statements of
comprehensive income 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 elected to classify irrevocably its listed equity
investments under this category.
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2.12.5 Fair value through profit or loss
Or
Assets that do not meet the criteria for amortised cost
or FVOCI are measured at FVPL. A gain or loss on a debt
investment that is subsequently measured at FVPL is
recognised as 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
recognised in other gains/(losses) in the consolidated
and company statements of comprehensive income as
applicable.
2.12.6 De-recognition of financial assets
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 Impairment of financial assets
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 contractual 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.
2.13 Current versus Non-current
Classification
The Group presents assets and liabilities in the consoli-
dated and company statements of financial 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
reporting 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
•
•
•
Or
• 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-cu-
rrent 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 likeli-
hood that an outflow will be required in settlement is deter-
mined 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
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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 obligation. The increase in the provision
due to passage of time is recognised as interest expense.
Borrowings are recognised initially at fair value, net of
transaction 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, construc-
tion 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
recognised 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 anci-
llary 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.
Borrowing costs that are directly attributable to the acqui-
sition, 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 capita-
lised 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 consolidated and
company statements of comprehensive income when
the liabilities are derecognised, as well as through the EIR
amortisation process.
Amortised cost is calculated by taking any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR, into account. The EIR amortisa-
tion is included as finance costs in the consolidated and
company statements of 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 defe-
rred tax. Tax is recognised in the income statement, except
to the extent that it relates to items recognised in other
comprehensive 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. Management 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
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in the consolidated 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 accoun-
ting nor taxable profit or loss. Income tax is determined
using tax rates (and laws) that have been enacted or subs-
tantively 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 different taxable entities where there is an inten-
tion to settle the balances on a net basis.
2.20 Share-based payments
The Group operates a share-based compensation plan,
under which the entity receives services from employees
as consideration 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 23).
2.21 Rehabilitation provisions
The Group records the present value of estimated costs
of legal and constructive obligations required to restore
operating 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/environ-
ment is disturbed at the production location. When the
liability is initially recognised, 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 diffe-
ring from the amounts currently provided. The provision at
the consolidated statement of financial position date repre-
sents 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 arran-
gement at inception 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;
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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
fulfilment is dependent on a specified asset; or
d). There is a substantial change to the asset.
Group as a lessee
The Group assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
2.23 Revenue recognition
(a) Revenue from contracts with customers
Atalaya is principally engaged in the business of produ-
cing copper concentrate and in some instances, provides
freight/shipping services. Revenue from contracts with
customers is recognised when control of the goods or
services is transferred to the customer at an amount
that reflects the 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.
(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 performance obligations are the delivery of the concen-
trate. 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 ship-
ment 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 included 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
provisionally priced trade receivables will fail the cash flow
characteristics 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 separa-
tely from revenue from contracts with customers as part of
‘Fair value gains/losses on provisionally priced trade recei-
vables. 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 other relevant fair value
considerations as set out in IFRS 13, into account, inclu-
ding interest rate and credit risk adjustments.
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 quantity and quality of
concentrate sold are not significant, they do not constrain
the recognition of revenue.
(c) Freight services
As noted above, a proportion of the Group’s metal in
concentrate sales are sold under CIF Incoterms, whereby
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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 perfor-
mance obligation under IFRS 15 and therefore is recog-
nised 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 obli-
gations 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
accounting records, management, technical, adminis-
trative 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 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 consideration 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.
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 interest
method. When a loan and receivable is impaired, the
Group and the Company reduce the carrying amount to
its recoverable amount, the estimated future cash flow
is discounted at the original effective interest rate of the
instrument and the discount continues unwinding as inte-
rest income. Interest income on impaired loan and receiva-
bles 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.
Contract liabilities
2.28 Comparatives
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 liabi-
lities are recognised as revenue when the Group performs
under the contract.
Where necessary, comparative figures have been adjusted
to conform to changes in presentation in the current year.
2.29 Amendment of financial
statements after issue
The consolidated and company financial statements were
authorised for issue by the Board of Directors on 6 April
2020.
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3. Financial Risk
Management
3.1 Financial risk factors
The Group manages its exposure to key financial risks
in accordance with its financial risk management policy.
The objective of the policy is to support the delivery of the
Group’s financial targets while protecting future financial
security. The main risks that could adversely affect the
Group’s financial assets, liabilities or future cash flows are
market risks comprising: commodity price risk, interest
rate risk and foreign currency risk; liquidity risk and credit
risk; operational risk, compliance risk and litigation risk.
Management reviews and agrees policies for managing
each of these risks that are summarised below.
The Group’s senior management oversees the manage-
ment of financial risks. The Group’s senior management is
supported by the AFRC that advises on financial risks and
the appropriate financial risk governance framework for
the Group. The AFRC provides assurance to the Group’s
senior management that the Group’s financial risk-taking
activities are governed by appropriate policies and proce-
dures and that financial risks are identified, measured and
managed in accordance with the Group’s policies and risk
objectives. Currently, the Group does not apply any form of
hedge accounting.
(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 cash to meet liabilities when due. Cash flow fore-
casting is performed in the operating entities of the Group
and aggregated 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 COMPANY
(Euro 000’s)
31 December 2019
Carrying
amounts
Contractual
cash flows
Less than 3
months
Between
3–12 months
Between
1–2 years
Between
2–5 years
Over 5
years
Land options and mortgages
282
282
Tax liability
2,507
2,507
Deferred consideration
53,000
53,000
11
-
-
Trade and other payables
57,268
57,268
44,554
113,057
113,057
44,565
31 December 2018
Land options and mortgages
Tax liability
823
1,945
823
1,945
Deferred consideration
53,000
53,000
-
-
-
271
2,507
-
12,705
15,483
791
1,945
-
-
-
9
9
32
-
-
53,000
Trade and other payables
56,493
56,493
49,710
6,770
13
112,261
112,261
49,710
9,506
53,045
-
-
53,000
-
53,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 107 -
- 107 -
Atalaya Mining Plc.
Atalaya Mining Plc.
L E T T E R F R O M T H E C H A I R M A N
F I N A N C I A L S T A T E M E N T S
Annual Report
Annual Report
THE GROUP
(Euro 000’s)
31 December 2019
Tax liability
Deferred consideration
Carrying
amounts
Contractual
cash flows
Less than
3 months
Between
3–12 months
Between
1–2 years
Between
2–5 years
Over 5
years
1,865
9,117
1,865
9,117
Trade and other payables
10,272
10,272
31 December 2018
Tax liability
Deferred consideration
Trade and other payables
21,254
21,254
1,524
9,117
8,069
1,524
9,117
8,069
18,710
18,710
-
-
-
-
-
-
6,124
6,124
1,865
-
10,272
12,137
1,524
-
-
-
-
-
-
9,117
1,945
3,469
-
9,117
-
9,117
-
9,117
-
-
-
-
-
-
-
-
-
-
-
-
(b) Currency risk
(c) Commodity price 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.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a
reasonably possible change in the foreign exchange rate,
with all other variables held constant, of the Group’s profit
before tax due to changes in the carrying value of mone-
tary assets and liabilities at reporting date:
(Euro 000's)
+5%
-5%
Effect on profit
before tax for the
year ended 31 Dec
2019 increase/
(decrease)
Effect on profit
before tax for the
year ended 31 Dec
2018 increase/
(decrease)
9,393
(9,393)
9,474
(9,474)
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. Manage-
ment 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.
Commodity price sensitivity
The table below summarises the impact on profit before
tax for changes in commodity prices on the fair value of
derivative financial instruments and trade receivables
(subject to provisional pricing). The impact on equity is the
same as the impact on profit before income tax as these
derivative financial instruments have not been designated
as hedges and are classified as held-for-trading and are
therefore fair valued through profit or loss.
The analysis is based on the assumption that the copper
prices move $0.05/lb with all other variables held constant.
Reasonably possible movements in commodity prices
were determined based on a review of the last two years’
historical prices.
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Effect on profit
before tax for the
year ended 31 Dec
2019 increase/
(decrease)
Effect on profit
before tax for the
year ended 31 Dec
2018 increase/
(decrease)
Eur 000's
Eur 000's
4,090
3,845
(e) Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market inte-
rest 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.
(4,090)
(3,845)
At the reporting date the interest rate profile of interest
bearing financial instruments was:
Increase/
(decrease)
in copper
prices
Increase
$0.05/lb
(2018: $0.05)
Decrease
$0.05/lb
(2018: $0.05)
(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)
2019
2018
Variable rate instruments
Financial assets
8,077
33,070
An increase of 100 basis points in interest rates at 31
December 2019 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)
2019
2018
2019
2018
Variable rate instruments
808
331
808
331
(Euro 000's)
2019
2018
Unrestricted cash and cash equivalent
at Group
1,730
24,357
(f) Operational risk
Unrestricted cash and cash equivalent
at operating entity
6,347
8,463
Restricted cash at the operating entity
-
250
Cash and cash equivalents
8,077
33,070
Restricted cash as of 31 December 2018 has been reclassi-
fied to non-current trade and other receivables in 2019, as
the deposit is considered to be long term (Note 19).
Besides of 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 2019.
Operational risk is the risk that derives from the deficien-
cies relating to the Group’s information technology and
control systems as well as the risk of human error and
natural disasters. 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.
(h) Litigation risk
Litigation risk is the risk of financial loss, interruption of the
Group’s operations or any other undesirable situation that
- 109 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
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.
3.3 Fair value estimation
The fair values of the Group’s financial assets and liabilities
approximate their carrying amounts at the reporting date.
3.2 Capital risk management
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 safe-
guard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits
for other stakeholders 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 maximising 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
safeguard 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 share-
holders, 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.
(Euro 000's)
Net debt(1)
Total equity
Total capital
Gearing ratio
2019
2018
117,774
85,710
319,858
282,174
437,632
367,884
26.9%
23.3%
(1) Net debt includes non-current and current liabilities net of cash
and cash equivalent.
The increase in the gearing ratio during 2019 was mainly
due to the undertaken impairments in the year which
reduced the total equity for the year 2019 and the impact
of the leases resulting in a debt increase.
The fair value of financial instruments traded in active
markets, such as publicly traded and available for sale
financial assets is based on quoted market prices at the
reporting date. The quoted market price used for finan-
cial 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 assump-
tions that are based on market conditions existing at the
reporting date.
Fair value measurements recognised in the
consolidated 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).
3.4 Critical accounting estimates and
judgements
The preparation of the financial statements requires mana-
gement 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 consolidated financial statements. Estimates and
assumptions are continually evaluated and are based on
- 110 -
Annual Report
Annual Report
F I N A N C I A L S T A T E M E N T S
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Atalaya Mining Plc.
THE GROUP
(Euro 000's)
31 December 2019
Other financial assets
Financial assets at FV through OCI
Trade and other receivables
Receivables (subject to provisional pricing)
Total
31 December 2018
Other financial assets
Financial assets at FV through OCI
Trade and other receivables
Receivables (subject to provisional pricing)
Total
THE COMPANY
(Euro 000's)
31 December 2019
Non-current receivables
Financial assets at FV through profit and loss
Other current assets
Financial assets at FV through OCI
Total
31 December 2018
Non-current receivables
Financial assets at FV through profit and loss
Other current assets
Financial assets at FV through OCI
Total
Level 1
Level 2
Level 3
Total
42
-
42
71
-
71
-
1,101
1,143
17,716
17,716
-
1,101
17,716
18,859
-
6,959
6,959
-
-
-
71
6,959
7,030
Level 1
Level 2
Level 3
Total
-
42
42
-
71
71
-
-
-
-
-
-
229,686
229,686
-
42
229,686
229,728
215,308
215,308
-
71
215,308
215,379
management’s experience and other factors, including
expectations of future events that are believed to be reaso-
nable under the circumstances. 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
evaluation 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. Subse-
quent recovery of the resulting carrying value depends
on successful development or sale of the undeveloped
project. If a project proves to be unviable, all irrecoverable
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Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
costs associated with the project net of any related impair-
ment 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, stripping 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 refe-
rred to as a stripping activity asset. Judgement is required
to distinguish between the development and production
activities at surface mining operations.
The Group is required to identify the separately identi-
fiable 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 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 characteristics 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 produc-
tion measure that can be applied in the calculation and
allocation of production stripping costs between inventory
and the stripping 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 compo-
nent 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 produc-
tion method in determining the depreciable lives of the
stripping activity asset(s).
(c) Ore reserve and mineral resource estimates
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 judge-
ments 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
Canadian 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
goodwill may be affected due to changes in estimated
future cash flows;
• Depreciation and amortisation charges in the
consolidated and company statements of
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 financial position as either part of mine properties or
inventory or charged to profit or loss may change due to
changes in stripping ratios;
• Provisions for rehabilitation and environmental
provisions 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 signi-
ficant 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 independent expert to value the assets.
Where an indicator of impairment 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
assumptions such as commodity prices, discount rates,
future capital requirements, exploration potential and
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
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 independent market participant may
take into account. Cash flows are discounted at an appro-
priate discount rate to determine the net present value. For
the purpose of calculating the impairment 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 esti-
mate of the net cash flow to be generated from its projects.
(e) Provisions for decommissioning and site restoration
costs
Accounting for restoration provisions requires manage-
ment 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 calculation of the present value
of these costs also includes assumptions 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 assump-
tions 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 including 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 26 for further details.
(f) Income tax
Significant judgment is required in determining the provi-
sion for income taxes. There are transactions and calcula-
tions for which the ultimate tax determination is uncertain
during the ordinary course of business. The Group and
Company recognise liabilities for anticipated tax audit
issues based on estimates 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 financial position. Deferred tax assets, including those
arising from unutilised tax losses, require the Group to
assess the probability that the Group will generate suffi-
cient 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.
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
production and bring the product to sale. Where the time
value of money is material, these future prices and costs to
complete are discounted.
(h) Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate
implicit in the lease, therefore, it uses its incremental
borrowing rate (IBR) to measure lease liabilities. The IBR
is the rate of interest that the Group would have to pay to
borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to
the right-of-use asset in a similar economic environment.
The IBR therefore reflects what the Group ‘would have to
pay’, which requires estimation when no observable rates
are available (such as for subsidiaries that do not enter into
financing transactions) or when they need to be adjusted
- 113 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
to reflect the terms and conditions of the lease (for
example, when leases are not in the subsidiary’s functional
currency). The Group estimates the IBR using observable
inputs (such as market interest rates) when available and is
required to make certain entity-specific estimates (such as
the subsidiary’s stand-alone credit rating).
(i) Contingent liabilities
A contingent liability arises where a past event has taken
place for which the outcome will be confirmed only by the
occurrence 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
crystallise. The assessment of the existence of a contin-
gency and its likely outcome, particularly if it is considered
that a provision might be necessary, involves significant
judgment taking all relevant factors into account.
(j) 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 opera-
tions at the Proyecto Riotinto.
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
consideration on an undiscounted basis.
(l) Consolidation of Cobre San Rafael
Cobre San Rafael, S.L. is the entity which holds the mining
rights of Proyecto Touro. The Group controls Cobre San
Rafael, S.L. as it is exposed to variable returns from its
involvement with the subsidiary and has the ability to
affect those returns through its power over the subsidiary.
The control is proven as: one of the two Directors belongs
to the Group and management of the financial books and
the capacity to appoint the key personnel is controlled by
Atalaya.
(m) Classification of financial assets
The Group and Company exercises judgement upon deter-
mining the classification of its financial assets upon consi-
dering whether contractual features including interest rate
could significantly affect future cash flows. Furthermore,
judgment is required when assessing whether compen-
sation paid or received on early termination of lending
arrangements results in cash flows that are not SPPI.
4. Business and
geographical segments
Business segments
The Group has only one distinct business segment, that
being 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
The actual timing of any payments to Astor of the consi-
deration involves significant judgment as it depends on
certain factors which are out of control of management.
30.3)
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 poli-
cies used by the Group in different locations are the same
as those contained in Note 2.
(k) 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 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 consi-
derations and expected volatility. Please refer to Note 23.
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
2019
(Euro 000's)
Revenue
Cyprus
Spain
Other
Total
10,335
177,533
-
187,868
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation
4,195
58,209
(1,071)
61,333
Depreciation/amortisation charge
Net foreign exchange gain/(loss)
Impairment of other receivables
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
2018
(Euro 000's)
Revenue
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation
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
(1)
126
(1,694)
25
(1)
2,650
(1,459)
(23,024)
224
-
27
(88)
35,348
(4,748)
19,515
422,316
(13,823)
(111,461)
1
-
1
12,574
3,502
63,498
-
-
-
-
-
(1,071)
-
1,476
(567)
-
-
-
(23,025)
350
(1,694)
52
(89)
36,927
(6,207)
30,720
443,307
(125,851)
12,575
3,502
63,499
Cyprus
Spain
Other
Total
12,938
1,839
-
999
63
(2)
176,538
52,110
(13,430)
615
8
(251)
-
189,476
(407)
53,542
-
(1)
-
-
(13,430)
1,613
71
(253)
2,899
39,052
(408)
41,543
31,721
372,790
(13,672)
(104,931)
-
-
-
10,143
3,287
69,086
643
(177)
-
-
-
(7,102)
34,441
405,154
(118,780)
10,143
3,287
69,086
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
2019
2018
Segment
€'000
Segment
Copper
Copper
Copper
35,766
53,147
98,955
Copper
Copper
Copper
€'000
25,900
99,703
63,873
- 115 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
5. Revenue
THE GROUP
(Euro 000's)
Revenue from contracts with customers(1)
Fair value gain/losses relating to provisional pricing within sales (2)
Total revenue
2019
188,019
(152)
187,868
2018
195,891
(6,415)
189,476
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.
(1) Included within 2019 revenue there is a transaction price of €0.2 million (€1.0 million in 2018) 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 30.3)
6. Other income
THE GROUP
(Euro 000's)
Gain on disposal of associate
Release of prior year provision
Other income
THE COMPANY
(Euro 000's)
Gain on disposal of associate
Release of prior year provision
Sales of services to related parties (Note 30.3)
2019
1,283
1,283
2019
50
-
38
88
2019
50
-
74
124
2018
1,323
1,323
2018
-
117
41
158
2018
-
117
-
117
- 116 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
7. Expenses by nature
THE GROUP
(Euro 000's)
Operating costs
Care and maintenance expenditure
Exploration expenses
Employee benefit expense (Note 8)
Compensation of key management personnel
Auditors' remuneration - audit
— Other services
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
Impairment of intangible assets (Note 14)
Impairment loss on other receivables (Note 19)
Other expenses and provisions
2019
2018
96,739
110,140
240
3,588
20,153
2,105
215
31
152
1,026
12,575
3,502
371
619
-
369
448
567
6,948
1,694
281
1,021
17,248
2,061
196
8
85
881
10,143
3,287
329
125
172
163
450
640
-
-
-
2,292
Total cost of operation, corporate, share based benefits, care and maintenance, and exploration expenses
151,342
149,522
THE COMPANY
(Euro 000's)
Employee benefit expense (Note 8)
Key management remuneration
Auditors' remuneration - audit
— Other services
Other accountants' remuneration
Consultants' remuneration
Management fees (Note 30.3)
Travel costs
Shareholders' communication expense
On-going listing costs
Legal costs
Impairment loss on other receivables (Note 19)
Other expenses and provisions
Total cost of corporate, share based benefits and impairment
- 117 -
2019
2018
122
386
116
31
134
159
42
13
181
188
420
1,694
(252)
3,234
144
864
102
6
80
114
213
31
172
163
423
-
2,068
4,380
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
8. Employee benefit expense
THE GROUP
(Euro 000's)
Wages and salaries
Social security and social contributions
Employees’ other allowances
Bonus to employees
The average number of employees and the number of employees at year end by office are:
2019
14,599
4,997
21
536
2018
13,357
3,622
28
241
20,153
17,248
Number of employees
Spain - Full time
Spain - Part time
Cyprus - Full time
Total
THE COMPANY
(Euro 000's)
Wages and salaries
Social security and social contributions
Average
At year end
2019
441
6
3
450
2018
379
5
3
387
2019
446
7
2
455
2018
409
5
3
417
2019
2018
109
13
122
131
13
144
The average number of employees and the number of employees at year end by office are:
Average
At year end
2019
2018
2019
2018
3
3
3
3
-
-
3
3
Number of employees
Cyprus - Full time
Total
9. Finance income
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 30.3)
Interest income from interest-bearing intercompany loans at amortised cost (Note 30.3)
Interest income
Interest income relates to interest received on bank balances.
- 118 -
2019
2018
52
52
2019
13,607
3,198
25
16,830
71
71
2018
13,615
2,506
63
16,184
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
10. Finance costs
THE GROUP
(Euro 000's)
Interest expense:
— Other interest
— Interest expense on lease liabilities
— Unwinding of discount on mine rehabilitation provision (Note 26)
11. Tax
THE GROUP
(Euro 000's)
Current income tax charge
(Over)/under provision previous years
Deferred tax related to utilization of losses for the year (Note 17)
Deferred tax income relating to the origination of temporary differences (Note 17)
Deferred tax expense relating to reversal of temporary differences (Note 17)
2019
2018
40
8
41
89
2019
5,158
(302)
256
874
221
6,207
214
-
39
253
2018
4,899
-
975
1,020
208
7,102
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)
Accounting profit before tax
Tax calculated at the applicable tax rates of the Company – 12.5%
Tax effect of expenses not deductible for tax purposes
Tax effect of tax loss for the year
Tax effect of allowances and income not subject to tax
Over provision for prior year taxes
Effect of higher tax rates in other jurisdictions of the group
Tax effect of tax losses brought forward
Additional tax
Deferred tax (Note 17)
Tax charge
THE COMPANY
(Euro 000's)
Current income tax charge
(Over)/under provision previous years
- 119 -
2019
2018
36,927
41,543
4,616
1,103
4,021
5,193
2,212
86
(7,123)
(4,501)
(302)
2,797
(256)
-
1,351
6,207
2019
1,152
(274)
878
-
2,710
(975)
174
2,203
7,102
2018
1,524
-
1,524
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Tax losses carried forward
As at 31 December 2019, the Group had tax losses carried
forward amounting to €18.5 million from the Spanish subsi-
diary for the period 2008 to 2015.
Cyprus
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 legis-
lation, 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 and Cyprus domiciled. 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 2019 and 2018 is 25%. The
recent Spanish tax reform approved in 2014 reduced the
general corporation tax rate from 30% to 28% in 2015 and
to 25% in 2016, and introduced, 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.
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:
(Euro 000's)
2019
2018
Parent company
(3,997)
(5,587)
Subsidiaries
41,320
40,302
Profit attributable to equity
holders of the parent
37,323
34,715
Weighted number of ordinary
shares for the purposes of basic
earnings per share ('000)
137,339
136,755
Basic profit per share (EUR
cents/share)
27.2
25.4
Weighted number of ordinary
shares for the purposes of
diluted earnings per share ('000)
139,236
138,110
Diluted profit per share (EUR
cents/share)
26.8
25.1
At 31 December 2019, there are 2,505,250 options (Note
23) and nil warrants (Note 22) (At 31 December 2018:
1,313,000 options and nil warrants) which have been
included when calculating the weighted average number of
shares for FY2019.
- 120 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
13. Property, plant and equipment
THE GROUP
(Euro 000's)
2019
COST
Land and
buildings
Right
of use
assets(6)
Plant and
equipment
Assets under
construction(4)
Deferred
mining
costs(3)
Other
assets(2)
Total
At 1 January 2019
45,853
6,144
152,820
62,010
27,537
785
295,149
Additions
Reclassifications
Disposals
210
277
1,171
48,737
6,476
-
-
-
-
94,230(5)
(94,230)
-
-
-
-
At 31 December 2019
46,063
6,421
248,221
16,517
34,013
DEPRECIATION
At 1 January 2019
Charge for the year
Disposals
6,072
2,185
-
-
20,315
391
-
8,557
-
At 31 December 2019
8,257
391
28,872
-
-
-
-
4,681
1,380
-
6,061
Net book value at 31 December 2019
37,806
6,030
219,349
16,517
27,952
1
-
(5)
781
56,872
-
(5)
352,016
561
31,629
62
(3)
620
161
12,575
(3)
44,201
307,815
2018
COST
At 1 January 2018
Additions
Reclassifications
At 31 December 2018
DEPRECIATION
At 1 January 2018
Charge for the year
At 31 December 2018
40,995
4,858(1)
-
45,853
4,076
1,996
6,072
Net book value at 31 December 2018
39,781
-
-
-
-
-
-
-
-
145,402
11,445
22,317
785
220,944
2,324
5,094
55,659
5,220
(5,094)
-
-
-
68,061
-
152,820
62,010
27,537
785
289,005
13,465
6,850
20,315
-
-
-
3,469
1,212
4,681
132,505
62,010
22,856
476
85
561
224
21,486
10,143
31,629
257,376
(1) Mine rehabilitation assets and Rumbo Royalty Buyout. 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.
(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 2019 amounted to €16.5 million (2018: €62.0 million). It includes the capitalisation of costs
related to the Expansion Project and sustaining capital expenses.
(5) Transfers related to the completion of the Expansion Project (circa. €90 million) and the Tailing Dam Project (circa. €4 million).
(6) See leases in Note 27.
The above fixed assets are mainly located in Spain.
- 121 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Other assets(1)
Total
15
-
15
15
-
15
-
15
-
15
15
-
-
15
-
15
-
15
15
-
15
-
15
-
15
15
-
-
15
-
THE COMPANY
(Euro 000's)
2019
COST
At 1 January 2019
Disposals
At 31 December 2019
DEPRECIATION
At 1 January 2019
Charge for the year
At 31 December 2019
Net book value at 31 December 2019
2018
COST
At 1 January 2018
Disposals
At 31 December 2018
DEPRECIATION
At 1 January 2018
Charge for the year
Disposals
At 31 December 2018
Net book value at 31 December 2018
(1) Includes furniture, fixtures and office equipment which are depreciated over 5-10 years.
The Group
In 2017 the BoD approved an Expansion Project to increase
the plant capacity to 15Mtpa. During 2019, the Expansion
Project was completed with the processing plant fully
commissioned and operating at an increased annualised
rate of 15 Mtpa since January 2020.
During FY2019, the Group capitalised personnel costs
amounting to €953k (2018: €756k).
- 122 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
14. Intangible assets
THE GROUP
(Euro 000's)
2019
COST
On 1 January 2019
Additions
Disposals
At 31 December 2019
Amortisation
On 1 January 2019
Charge for the year
Impairment charge (Note 7)
At 31 December 2019
Net book value at 31 December 2019
2018
COST
On 1 January 2018
Additions from acquisition of subsidiary
Additions
At 31 December 2018
AMORTISATION
On 1 January 2018
Charge for the year
At 31 December 2018
Net book value at 31 December 2018
Permits(1)
Licences, R&D and
Software
76,538
-
-
76,538
10,370
3,438
-
13,808
62,730
76,521
17
-
76,538
7,145
3,225
10,370
66,168
6,026
5,449
(3,865)
7,610
243
64
6,948
7,255
355
4,505
2,476
(955)
6,026
181
62
243
5,783
Total
82,564
5,449
(3,865)
84,148
10,613
3,502
6,948
21,063
63,085
81,026
2,493
(955)
82,564
7,326
3,287
10,613
71,951
(1) Permits include an amount of €5.0 million that relate to the Proyecto Touro 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 Proyecto Riotinto. The Report increased the open pit
mineral reserves by 29% and stated the life of mine as 13.8
years, considering the on-going expansion of the proces-
sing 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 reporting date. Atalaya assessed its assets concluding
that there are no indicators of impairment for Proyecto
- 123 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Riotinto as of 31 December 2019. Management has
decided to impair all the investment (€6,948k) referred to
exploration and other related expenses of Proyecto Touro
due to the existence of substantial evidence of impairment
based on the negative Environmental Impact Statement
notified by the Xunta de Galicia. Mining rights relating to
Proyecto Touro continue to be carried at their book value of
€5.0 million in Permits as their market value is considered
to be in excess of the carrying value.
Goodwill of €9,333,000 arose on the acquisition of the
remaining 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.
15. 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)
2019
3,899
-
731
-
2018
3,693
-
206
-
Closing amount at cost less provision for impairment
4,630
3,899
The subsidiaries of the Group, the percentage of equity owned and the main country of operation are set out below. These
interests are consolidated within these financial statements.
Subsidiary companies
Date of
incorporation/
acquisition
Principal
Activity
Country of
incorporation
Effective proportion
of shares held in
2019(5)
Effective proportion
of shares held in
2018(5)
Atalaya Touro (UK) Ltd(1)
10 March 2017
Holding
United Kingdom
Atalaya Minasderiotinto Project (UK) Ltd(2)
10 Sep 2008
Holding
United Kingdom
EMED Marketing Ltd
08 Sep 2008
Trading
EMED Mining Spain SLU(3)
12 April 2007
Exploration
Cyprus
Spain
100%
100%
100%
100%
100%
100%
100%
100%
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 Development
S.L.U. and the Company has provided a parent company guarantee (Note 28).
(1) On 10 March 2017, Atalaya Touro (UK) Limited was incorporated.
Atalaya Mining Plc is its sole shareholder.
(2) During the year 2019 there was an increase amounting to €731k
in the investment mainly related to the employee benefit expenses
(2018: €206k).
(3) In December 2017, EMED Mining Spain S.L.U. increased its capi-
tal by €300k from its sole shareholder. This investment increase was
fully impaired in the year.
(4) On 15 May 2018, the Group sold Eastern Mediterranean Resour-
ces (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 pro-
vision 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 2019
and 2018 remained unchanged excluding Eastern Mediterranean
Resources (Caucasus) Ltd which was sold in 2018.
- 124 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
16. Investment in joint
venture
of the Class B resources. ARM will fund the initial expendi-
ture of a feasibility study up to a maximum of €2.0 million.
Costs are then borne by the joint venture partners in accor-
dance with their respective ownership interests.
Company
name
Principal
activities
Country of
incorporation
Effective
proportion of
shares held at
31 December
2015
Recursos
Cuenca
Minera S.L.
Explotation
of tailing
dams and
waste areas
resources
Spain
50%
The Group’s significant aggregate amounts in respect of
the joint venture are as follows:
THE COMPANY
(Euro 000's)
Intangible assets
Trade and other receivables
Cash and cash equivalents
2019
2018
94
2
21
94
4
22
In 2012 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 Proyecto
Riotinto. 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
Trade and other payables
(115)
(115)
Net assets
Revenue
Expenses
Net loss after tax
2
-
-
-
5
-
-
-
17. Deferred tax
THE GROUP
Number of employees
DEFERRED TAX ASSET
At 1 January
Consolidated statement
of financial position
Consolidated income
statement
2019
2018
2019
2018
7,927
10,130
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)
(256)
(975)
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)
-
(874)
(221)
6,576
-
(1,020)
(208)
7,927
-
-
256
-
874
221
-
-
975
-
1,020
208
1,351
2,203
Deferred 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 availa-
ble to carry forward for 5 years against future taxable income
of the Group companies in which the losses arose, and in
Spain €18.5 million (2018: €24.9 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 profi-
tability in the near future to support (either partially or in full)
the recognition of the losses as deferred income tax assets.
- 125 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
18. Inventories
THE GROUP
(Euro 000's)
Finished products
Materials and supplies
Work in progress
2019
11,024
9,266
1,040
2018
2,955
7,381
486
21,330
10,822
As at 31 December 2019, copper concentrate produced
and not sold amounted to 14,201 tonnes (FY2018: 4,667
tonnes). Accordingly, the inventory for copper concentrate
was €11.0 million (FY2018: €3.0 million). During the year
2019 the Group recorded cost of sales amounting to €115.3
million (FY2018: €140.5 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.
19. Trade and other receivables
THE GROUP
(Euro 000's)
NON-CURRENT TRADE AND OTHER RECEIVABLES
Deposits
CURRENT TRADE AND OTHER RECEIVABLES
Trade receivables at fair value - subject to provisional pricing
Trade receivables from shareholders at fair value - subject to provisional pricing (Note 30.5)
Other receivables from related parties at amortised cost (Note 30.3)
Deposits
VAT receivable
Tax advances
Prepayments
Other current assets
Allowance for expected credit losses
Total trade and other receivables
- 126 -
2019
2018
500
500
8,798
8,918
56
26
249
249
4,498
2,461
56
26
14,380
13,691
7
616
56
1,208
688
1,060
32,857
23,937
-
-
33,357
23,937
Annual Report
Annual Report
F I N A N C I A L S T A T E M E N T S
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
Atalaya Mining Plc.
THE GROUP
(Euro 000's)
NON-CURRENT TRADE AND OTHER RECEIVABLES
Receivables from own subsidiaries at amortised cost (Note 30.4)
Receivables from own subsidiaries at fair value through profit and loss (Note 30.4)
CURRENT TRADE AND OTHER RECEIVABLES
Deposits and prepayments
VAT receivable
Receivables from own subsidiaries at amortised cost (Note 30.4)
Other receivables
Total current trade and other receivables
2019
2018
80,316
74,796
229,686
215,308
310,002
290,104
-
47
3,996
-
4,043
-
161
6,328
200
6,689
Trade receivables are shown net of any interest applied
to prepayments. Payment terms are aligned with offtake
agreements 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.
Increase in deposits relates to the restricted cash of €250k
reclassified from cash and cash equivalents (note 21) in
non-current deposits in 2019 since the deposit is consi-
dered to be long term.
In 2018, the Company recognised €200k prepayment
from an option to acquire a portion of an investment on a
company which held mining rights of a land. In 2019, the
Company signed an agreement to acquire an option over
a portion of investment in another entity. The total amount
paid in as prepayment for these two investments in 2019
was €1,494k. After the exploration processed performed by
the Company on both lands, management decided not to
pursue with the execution of both options and therefore to
fully impaired the prepayments.
Set out below are the movements of the impairment:
THE GROUP
(Euro 000's)
1 January
Additions
Impairment
At 31 December
2019
200
1,494
(1,694)
-
2018
-
200
-
200
- 127 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
20. Other Financial assets
THE GROUP
(Euro 000's)
Financial asset at fair value through OCI (see (a)) below)
Total current
Total non-current
THE COMPANY
(Euro 000's)
Financial asset at fair value through OCI (see (a)) below)
Total current
a) Financial asset at fair value through OCI
THE GROUP
(Euro 000's)
At 1 January(1)
Additions(3)
Fair value change recorded in equity (Note 23)
Reversal of previously impaired
Disposals(2)
At 31 December
THE COMPANY
(Euro 000's)
At 1 January(1)
Fair value change recorded in equity (Note 23)
Reversal of previously impaired
Disposals(2)
At 31 December
2019
1,143
42
1,101
2018
71
71
-
2019
2018
42
42
71
71
2019
71
1,101
(29)
50
(50)
1,143
2018
129
-
(58)
-
-
71
2019
2018
71
(29)
50
(50)
42
129
(58)
-
-
71
Company name
Principal activities
Country of
incorporation
Effective proportion
of shares held at 31
December 2019
Explotaciones Gallegas del Cobre SL
Exploration company
Spain
KEFI Minerals Plc
Prospech Limited
Exploration and development mining company listed on AIM
UK
Exploration company
Australia
12.5%
1.80%
0.65%
(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.
(2) 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, an exploration company with interest in Cyprus.
(3) In November 2019, Atalaya executed the option to acquire 12.5% of Explotaciones Gallegas del Cobre, S.L. the exploration property
around Touro, with known additional reserves.
- 128 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
21. Cash and cash equivalents
THE GROUP
(Euro 000's)
Cash at bank and in hand
2019
8,077
2018
33,070
As at 31 December 2019, the Group’s operating subsidiary held €250k (FY2018: €250k) as a collateral for bank guarantees,
which has been reclassified as restricted cash (or deposit). In 2019 restricted cash were reclassified to non-current trade and
other receivables (Note 19) since the deposit is considered to be long term.
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 - functional and presentation currency
Great Britain Pound
United States Dollar
2019
2,059
374
5,644
8,077
2019
128
97
29
2
128
2018
7,649
255
25,166
33,070
2018
826
774
3
49
826
- 129 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
22. Share capital
Authorised
Nr.
of Shares
Share
capital
Share
Premium
Total
’000’s
£ 000’s
£ 000’s
£ 000’s
Ordinary shares of £0.075 each
200,000
15,000
-
15,000
Issued and fully paid
1 January 2018
Issue Date
13 Feb 2018
13 Feb 2018
13 April 2018
1 June 2018
000's
Euro 000's
Euro 000's
Euro 000's
135,254
13,192
309,577
322,769
Price (£)
Details
1.87
Shares issued to Rumbo(a)
1.44
Exercised share options(b)
193
29
2.118
1.425
Rumbo buyout(c)
1,601
Exercised warrants(d)
Costs of Issued Shares
263
-
16
3
139
22
-
410
45
426
48
3,887
4,026
405
(5)
427
(5)
31 December 2018/1 January 2019
137,340
13,372
314,319
327,691
31 December 2019
137,340
13,372
314,319
327,691
Authorised capital
The Company’s authorised share capital is 200,000,000
ordinary shares of £0.075 each.
d) On 1 June 2018, 262,569 warrants were exercised
at £1.425 per ordinary share. Hence, 262,569 new
ordinary shares of £0.075 were issued, thus creating a
share premium of €405,087.
Issued capital
FY2019
No issuances during the twelve months period ended 31
December 2019.
Warrants
The Company has issued warrants to advisers to the
Group. Warrants expired three years after the grant date
and had exercise price £1.425. At 31 December 2019 there
are nil warrants.
FY2018
On 1 June 2018, all warrants were exercised.
a) On 13 February 2018, the Company issued 192,540
Details of share warrants at 31 December 2018:
new ordinary shares of £0.075 to Rumbo at a price of
£1.867, thus creating a share premium of €410,146.
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.
Outstanding warrants at 1 January 2018
— Exercised during the reporting period
Number of
warrants
262,569
(262,569)
c) On 5 April 2018, the Company entered into an
Outstanding warrants at 31 December 2018
-
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.
On 1 June 2018, the Company received notification for
the exercise 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).
- 130 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
23. Other reserves
THE GROUP
(Euro 000's)
Share
option
Bonus
share
Depletion
factor(1)
At 1 January 2018
6,536
208
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 20)
-
-
216
-
-
-
-
-
450
5,050
-
-
-
Fair value
reserve of
financial
assets at
FVOCI(2)
(1,057)
-
-
-
(58)
At 31 December 2018
6,752
208
5,500
(1,115)
1,446
Recognition of depletion factor
Recognition of non-distributable reserve
Recognition of distributable reserve
-
-
-
Recognition of share based payments
619
Change in fair value of financial assets at
fair value through OCI (Note 20)
Other changes in reserves
-
-
-
-
-
-
-
-
5,378
-
-
-
-
-
-
-
-
-
(29)
-
-
1,984
-
-
-
-
Non-
distributable
reserve(3)
Distributable
reserve(4)
-
-
1,446
-
-
Total
6,137
5,050
1,446
216
(58)
12,791
5,378
1,984
-
-
-
-
-
-
-
-
1,844
1,844
-
-
249
619
(29)
249
At 31 December 2019
7,371
208
10,878
(1,144)
3,430
2,093
22,836
THE COMPANY
(Euro 000's)
At 1 January 2018
Recognition of share based payments
Change in fair value of financial assets at fair value through OCI (Note 20)
Share
option
Bonus
share
Fair value reserve
of financial assets
at FVOCI(2)
Total
6,536
208
(1,057)
5,687
216
-
-
-
-
(58)
216
(58)
At 31 December 2018
6,752
208
(1,115)
5,845
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 20)
-
619
-
-
-
-
-
-
(29)
-
619
(29)
At 31 December 2019
7,371
208
(1,144)
6,435
(1) Depletion factor reserve: During the twelve month period ended 31 December 2019, the Group has disposed €5.4 million (FY2018: €5.0
million) as a depletion factor reserve as per the Spanish Corporate Tax Act.
(2) Fair value reserve of financial assets at FVOCI: The Group decided to recognise changes in the fair value of certain investments in equity
securities in OCI. These changes are accumulated within the FVOCI reserve under equity. The Group transfers amounts from this reserve to
retained earnings when the relevant equity securities are derecognised.
(3) Non-distributable reserve: As required by the Spanish Corporate Tax Act, the Group classified a non-distributable reserve of 10% of the
profits generated by the Spanish subsidiaries until the reserve is 20% of share capital of the subsidiary.
(4) Distributable reserve: As result of the 2018 profit generated in ARM, the Group decided to record a distributable reserve in order to
comply with the Spanish Corporate Tax Act.
- 131 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
Details of share options outstanding as at 31 December
2019:
Grant date
23 Feb 2017
29 May 2019
8 July 2019
Total
Expiry date
Exercise price £
Share options
22 Feb 2022
28-May-2024
7 July 2024
1.44
2.015
2.045
813,000
1,292,250
400,000
2,505,250
At 1 January 2019
Granted during the reporting period
Granted during the reporting period
Less options cancelled during the year
31 December 2019
Weighted average exercise price £
Share options
2.19
2.015
2.045
2.015
2.08
1,313,000
1,500,000
400,000
(707,750)
2,505,250
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 (Note 22 (b)).
On 30 May 2019, the Company announced a grant of
1,500,000 share options (the “Options”) to Persons
Discharging Managerial Responsibilities (“PDMRs”) and
management, in accordance with the Company’s approved
Share Option Plan 2013 (the “Option Plan”). The Options
expire five years from the date of grant (29 May 2019), have
an exercise price of 201.5 pence per ordinary share, based
on the minimum share price in the five days preceding the
grant date, and vest in two equal tranches, half on grant
and half on the first anniversary of the granting date.
On 10 July 2019, the Company announced a grant of
400,000 share options (the “Options”) to Person Dischar-
ging Managerial Responsibilities (“PDMRs”) in accordance
with the Company’s approved Share Option Plan 2013
(the “Option Plan”). The Options expire five years from the
date of grant (8 July 2019), have an exercise price of 204.5
pence per ordinary share, based on the minimum share
price in the five days preceding the grant date, and vest
in two equal tranches, half on grant and half on the first
anniversary of the granting date.
In general, option agreements contain provisions adjusting
the exercise price in certain circumstances including the
allotment of fully paid ordinary shares by way of a capitali-
sation of the Company’s reserves, a sub division or conso-
lidation 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
29 May 2019
8 July 2019
Weighted
average share
price £
Weighted
average
exercise price £
Expected
volatility
Expected life
(years)
Risk Free rate
Expected
dividend yield
Estimated
Fair Value £
1.440
2.015
2.045
1.440
2.015
2.045
51.8%
46.9%
46.9%
5
5
5
0.6%
0.8%
0.8%
Nil
Nil
Nil
0.666
0.66
0.66
The volatility has been estimated based on the underlying
volatility of the price of the Company’s shares in the prece-
ding twelve months.
- 132 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
24. Non-controlling interest
(Euro 000's)
Opening balance
On acquisition of a subsidiary
Share of results for the year
Closing balance
2019
4,200
-
(6,602)
(2,402)
2018
4,474
-
(274)
4,200
The Group has a 10% interest in Cobre San Rafael, S.L.
acquired in July 2017 while the remaining 90% is held by
a non-controlling interest (Note 2.3 (b) (1)). The significant
financial information with respect to the subsidiary before
intercompany eliminations as at and for the year ended 31
December 2019 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
2019
5,096
580
-
8,345
(2,669)
-
(7,336)
2018
7,024
456
-
2,813
4,667
-
(304)
Cobre San Rafael, S.L. was established on 13 June 2016.
* 10% interest in Cobre San Rafael, S.L. was acquired by the Group
in July 2017.
25. Trade and other payables
THE GROUP
(Euro 000's)
NON-CURRENT TRADE AND OTHER PAYABLES
Land options
Government grant
CURRENT TRADE AND OTHER PAYABLES
Trade payables
Land options and mortgage
Accruals
- 133 -
2019
2018
-
13
13
32
13
45
52,395
53,098
282
4,860
791
3,382
57,537
57,271
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
THE COMPANY
(Euro 000's)
CURRENT TRADE AND OTHER PAYABLES
Accruals
Payable to own subsidiaries (Note 30.4)
Other
2019
2018
1,744
8,507
21
10,272
2,200
5,851
18
8,069
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.
26. Provisions
THE GROUP
(Euro 000's)
1 January 2018
Additions
Revision of provision
Finance cost (Note 10)
31 December 2018/1 January 2019
Additions
Revision of provision
Finance cost (Note 10)
31 December 2019
(Euro 000's)
Non-Current
Current
Total
Legal
Rehabilitation
213
6
(92)
-
127
284
(23)
-
388
5,514
972
(133)
39
6,392
138
(18)
41
6,553
2019
6,941
-
6,941
Total
5,727
978
(225)
39
6,519
422
(41)
41
6,941
2018
6,519
-
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 2019
was 1.87%, which is the 15-year Spain Government Bond
rate (2018: 1.87%). An inflation rate of 1.5% is applied on
annual basis.
- 134 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
The expected payments for the rehabilitation work are as
follows:
(Euro 000's)
Between
1-5 Years
Between
6-10 Years
Between
10-15
Years
Expected
payments for
rehabilitation of
the mining site
401
2,069
4,083
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 2019. Management has reviewed indivi-
dually each case and made a provision of €388k (€127k in
2018) for these claims, which has been reflected in these
consolidated financial statements. (Note 32)
27. Leases
(Euro 000's)
Non-current
Leases
Current
Leases
31 Dec 2019
31 Dec 2018
5,265
5,265
588
588
-
-
-
-
Finance leases
The Group entered into lease arrangements for the renting
of land, laboratory equipment and vehicles which are
subject to the adoption of all requirements of IFRS 16
Leases (Note 2.2). The Group has elected not to recognise
right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and
leases of low-value assets. Depreciation expense regarding
leases amounts to €0.3 million (2018: €nil) for the twelve
month period ended 31 December 2019. The duration of
the land lease is for a period of thirteen years. Payments
are due at the beginning of the month escalating annually
on average by 1.5%. At 31 December 2019, the remaining
term of this lease is twelve years. (Note 2)
The duration of the motor vehicle and laboratory equi-
pment lease is for a period of four years, payments are
due at the beginning of the month escalating annually on
average by 1.5%. At 31 December 2019, the remaining term
of this motor vehicle and laboratory equipment lease is
three years and three and half years respectively.
(Euro 000's)
MINIMUM LEASE PAyMENTS DUE:
— Within one year
— Two to five years
— Over five years
Less future finance charges
Present value of minimum lease payments due
PRESENT VALUE OF MINIMUM LEASE PAyMENTS DUE:
— Within one year
— Two to five years
— Over five years
- 135 -
31 Dec 2019
31 Dec 2018
588
2,134
3,131
-
5,853
588
2,134
3,131
5,853
-
-
-
-
-
-
-
-
-
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
(Euro 000's)
Balance 1 January 2019
Additions
Interest expense
Lease payments
Balance at 31 Dec 2019
Balance at 31 Dec 2019
— Non-current liabilities
— Current liabilities
Lease liability
6,144
277
8
(576)
5,853
5,265
588
5,853
28. Deferred
consideration
In September 2008, the Group moved to 100% ownership of
Atalaya Riotinto Mineral S.L. (“ARM”) (and thus full owner-
ship 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 Agree-
ment”) 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 among other items. 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, sustai-
ning capital expenditure, any senior debt service require-
ments and up to US$10 million per annum (for non-Pro-
yecto 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 Assign-
ment). “Excess cash” is not defined in the Master Agree-
ment leaving ambiguity as to how it is to be calculated.
On 2 March 2020, the Company filed an application in
the High Court to seek clarity on the definition of “Excess
Cash”. A preliminary hearing is due to take place on 22
May 2020. As and when a substantive hearing takes place,
the Company expects to have clarity on the definition of
Excess Cash and the payment schedule of the Deferred
Consideration and the Loan Assignment.
As at 31 December 2019, no consideration has been paid.
The amount of the liability recognised by the Group and
Company is €53 million (€43.9 million + €9.1 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
2019
Acquisition and incorporation of subsidiaries
There were no acquisition nor incorporation of subsidiaries
during the year.
Disposals of subsidiaries
There were no disposals of subsidiaries during the year.
2018
Acquisition and incorporation of subsidiaries
There were no acquisition nor incorporation of subsidiaries
during the year.
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 relating consulting costs (Note 6).
Wind-up of subsidiaries
There were no operations wound-up during FY2019 and
FY2018.
- 136 -
Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
30. Group information
and related party
disclosures
30.1 Information about subsidiaries
These audited consolidated financial statements include:
(1) Cobre San Rafael, S.L. is the entity which holds the mining rights
of The Proyecto Touro. The Group has control in the management of
Cobre San Rafael, S.L., including one of the two Directors, manage-
ment of the financial books and the capacity of appointment the key
personnel (Note 2.3 (b) (1)).
Subsidiary companies
Parent
Principal
activity
Country of
incorporation
Effective
proportion of
shares held
Atalaya Touro (UK) Ltd
Atalaya Mining Plc
Atalaya MinasdeRiotinto Project (UK) Limited
Atalaya Mining Plc
Holding
Holding
United
Kingdom
United
Kingdom
EMED Marketing Ltd
Atalaya Mining Plc
Trading
Cyprus
EMED Mining Spain S.L.U.
Atalaya Mining Plc
Exploration
Spain
Atalaya Riotinto Minera S.L.U.
Atalaya MinasdeRiotinto Project
(UK) Limited
Production
Spain
100%
100%
100%
100%
100%
Eastern Mediterranean Exploration and
Development S.L.U.
Atalaya MinasdeRiotinto Project
(UK) Limited
Exploration
Spain
100%
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
Spain
Spain
Spain
Atalaya Servicios Mineros, S.L.U.
Atalaya MinasdeRiotinto Project
(UK) Limited
Dormant
Spain
10%
J-V
100%
100%
30.2 Compensation of key
management personnel
The total remuneration and fees of Directors (including
executive Directors) and other key management personnel
was as follows:
(1) These amounts related to the approved performance bonus for
2018 by the Board of Directors following the proposal of the CGNC
Committee. The 2019 estimates recorded are not included in the
table above as this is yet to be approved by the Board of Directors.
There is no certainty or guarantee that the Board of Directors will
approve a similar amount for 2019 performance.
(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
The Group
The Company
2019
1,319
325
173
765
740
267
2018
922
280
39
462
235
88
2019
536
-
-
-
-
-
3,589
2,026
536
2018
454
-
-
116
150
10
730
- 137 -
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
At 31 December 2019 amounts due to Directors, as from
the Group, are €nil (€0.5 million at 31 December 2018)
and €0.5 million (€0.3 million at 31 December 2018) to key
management.
At 31 December 2019 amounts due to Directors, as from
the Company, are €nil (€nil at 31 December 2018) and €nil
(€0.2 million at 31 December 2018) to key management.
Share-based benefits
In 2019, the Directors and key management personnel have
granted 1,650,000 options (2018: nil options) (see note 23).
During 2019 the Directors and key management personnel
have not been granted any bonus shares (2018: nil).
30.3 Transactions with shareholders and related parties
THE GROUP
(Euro 000's)
Trafigura- Revenue from contracts
Freight services
Gains/(losses) relating provisional pricing within sales
Trafigura - Total revenue from contracts
THE COMPANY
(Euro 000's)
SALES OF SERVICES (NOTE 5):
— EMED Marketing Limited
— Atalaya MinasdeRiotinto Project (UK) Limited
OThER INCOME SERVICES (NOTE 6):
— EMED Marketing 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 :
— Credit agreement - 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.
2019
33,179
-
33,179
2,587
35,766
35,766
2018
26,234
-
26,234
(334)
25,900
25,900
2019
2018
690
593
1,283
74
42
1,644
13,607
1,554
16,805
749
574
1,323
-
213
1,760
13,615
746
16,121
2019
2018
56
56
56
56
The above debtor balance arising from the pre-commissioning sales of goods bear no interest and is repayable on demand.
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
30.4 Year-end balances with related parties
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 - Credit agreement (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 - Credit agreement (3)
Atalaya Riotinto Minera SLU (4)
Atalaya Touro (UK) Limited (4)
EMED Mining Spain SL (4)
EMED Marketing Limited (4)
Total (5)
2019
2018
229,686
215,308
229,686
215,308
43,591
26,442
9,117
-
1,166
38,743
24,798
9,117
1,563
575
80,316
74,796
-
-
-
1,611
-
2,385
3,996
5,230
-
-
1,098
-
-
6,328
(1) This balance bears interest of 6.75% (2018: 6.75%).
(2) This balance bears interest of EURIBOR 6m plus 4% (2018: LIBOR 6month + 3.25% ).
(3) This balance bears interest of EURIBOR 12month plus 4% (2018: nil). The Note Facility Agreement expired on 29 September 2019. The
Group signed on 30 September 2019 a new Credit Agreement for the amount due of the Note Facility Agreement bearing a EURIBOR 12
month plus 4% interest and maturing on 30 September 2024
(4) These receivables bear no interest. 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 25):
EMED Marketing Limited
EMED Mining Spain S.L.
Atalaya Riotinto Minera SLU
The above balances bear no interest and are repayable on demand.
- 139 -
2019
2018
7,990
262
255
8,507
5,376
262
213
5,851
Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
30.5 Year-end balances with
shareholders
(Euro 000's)
2019
2018
RECEIVABLE FROM
ShAREhOLDERS (NOTE 19):
Trafigura - Debtor balance -subject
to provisional pricing
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 judg-
ment, 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 deci-
sion of JdA not to suspend the AAU.
8,918
2,461
The JdA filed for appeal to the Supreme Court. Although
8,918
2,461
The above debtor balance arising from the pre-commis-
sioning sales of goods bear no interest and is repayable on
demand.
31. 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 Administrative File to be dismissed.
— Receipt of ruling of claim made by
an environmental Group
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
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 notifi-
cation from the Supreme Court in Spain stating that it does
not have jurisdiction over the appeal made by the Junta de
Andalucía and the Company, which voluntary joined the
appeal as con-defendant.
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 discussions to the Junta de Andalucía to
resolve the formal defects identified by the Tribunal Supe-
rior de Justicia de Andalucía.
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.
32. Commitments
There are no minimum exploration requirements at
Proyecto Riotinto. 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.
In 2012, 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 Proyecto
Riotinto (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 associated with the application for classi-
fication of the Class B resources and will fund the initial
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Annual Report
F I N A N C I A L S T A T E M E N T S
Atalaya Mining Plc.
expenditure of a feasibility study up to a maximum of €2.0
million. Costs are then borne by the joint venture partners
respond to the pandemic to protect its workforce and local
communities surrounding its projects.
in accordance with their respective ownership interests.
33. Significant events
On 30 May 2019, the Company announced a grant of
1,500,000 share options (the “Options”) to Persons
Discharging Managerial Responsibilities (“PDMRs”) and
management, in accordance with the Company’s approved
Share Option Plan 2013 (the “Option Plan”). The Options
expire five years from the date of grant (29 May 2019), have
an exercise price of 201.5 pence per ordinary share, based
on the minimum share price in the five days preceding the
grant date, and vest in two equal tranches, half on grant
and half on the first anniversary of the granting date.
On 10 July 2019, the Company announced a grant of
400,000 share options (the “Options”) to Person Dischar-
ging Managerial Responsibilities (“PDMRs”) in accordance
with the Company’s approved Share Option Plan 2013
(the “Option Plan”). The Options expire five years from the
date of grant (8 July 2019), have an exercise price of 204.5
pence per ordinary share, based on the minimum share
price in the five days preceding the grant date, and vest
in two equal tranches, half on grant and half on the first
anniversary of the granting date.
In May 2019 the Board of Directors appointed a new Opera-
tional General Manager of Proyecto Riotinto.
34. Events after the
reporting period
COVID-19 outbreak
On 11 March 2020, the World Health Organization raised
the public health emergency caused by the coronavirus
outbreak (COVID-19) to an international pandemic. The
rapid national and international developments represent an
unprecedented health crisis, which will impact the macro-
economic environment and business developments. To
address this situation, among other measures, the Spanish
Government declared a state of emergency by publishing
Royal Decree 463/2020 of 14 March and approved a
series of extraordinary urgent measures to address the
economic and social impact of COVID-19 by Royal Decree
Law 8/2020 of 17 March. On 17 March 2020, the Company
released an update on the measures taken to manage and
In addition, a new Royal Decree was released on 29
March 2020 (the “Royal Decree”) implementing enhanced
measures to protect the people from the virus. The Royal
Decree stipulated that only employees from a short list
of essential industries were allowed to continued working
from 30 March 2020. Mining was excluded as an essen-
tial industry and consequently the Company’s Proyecto
Riotinto site was required to halt its operations for a period
until 3 April 2020 when mining operations were permitted
to restart.
COVID-19 crisis is considered as a non-adjusting event and
is therefore not reflected in the recognition and measu-
rement of the assets and liabilities in the financial state-
ments as at 31 December 2019.
Due to the complexity of the situation and its fast evolu-
tion, it is not possible at this time to make a reliable
quantified estimate of the potential impact on the Group,
which will be recognised prospectively in the 2020 financial
statements. (see Note 2.1 (b)). The Company has increased
its cash balance from €8.0 million as at 31 December 2019
to €41.7 million as at 31 March 2020 by drawing down on
existing credit facilities.
The Directors continue monitoring the business and taking
appropriate steps to address the situation and reduce its
operational and financial impact. After reviewing alter-
native scenarios, the current cash resources, forecasts
and budgets, timing of cash flows, borrowing facilities,
sensitivity analyses on alternative commodities prices and
considering the associated uncertainties to the Group’s
operations, the Directors have a reasonable expectation
that the Company has adequate resources to continue
operating in the foreseeable future. Accordingly, the conso-
lidated financial statements continue to be prepared on a
going concern basis (see Note 2.1 (b)).
The Company continues carrying out several measures
and implemented an exceptional plan developed for the
purpose of protecting its workforce and the people of the
surrounding communities to manage the crisis. The main
key risk, its impact and the response plans to protect its
workforce are: Spread of COVID-19 at the mine site may
cause disruption in the production and additional costs.
The Group is implementing emergency response plans.
Only critical employees for the operation are allowed to
enter on site. There are severe distance and hygienical
mandatory rules, mandatory body temperature controls,
and facilitate systems and tools to work from home for all
remaining employees.
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Atalaya Mining Plc.
F I N A N C I A L S T A T E M E N T S
Annual Report
consisting of fifteen reports produced by different depart-
ments of the Xunta de Galicia. These two reports challenge
the ability of the Company to guarantee that there will be
no environmental impact of the Project on the Ulla River
and related protected ecosystems which are located
downstream.
On 7 February 2020 the formal communication from the
Xunta de Galicia was published in Galicia´s official journal.
In the meantime, the Company along with its advisers, is
evaluating potential next steps for the Project, which could
include an appeal of the decision made by the Xunta de
Galicia, and/or the clarification of the questions raised by
the reports.
New group entity
In 2020, the Company has initiated the process to establish
in Cyprus a new subsidiary under the name of Atalaya
Financing, Limited. The activity of this new company will
be financing.
Additionally, the Group, up to the date of approval of these
financial statements, assessed the existence of any impair-
ment indicators and the sensitivity analysis to volatility of
commodity prices about its key assets being the mining
rights, the property plant and equipment, the intangible
assets, deferred taxes, trade receivables and inventories
corresponding above 95% of its total assets (excluding
cash and cash equivalents). The Directors have considered
and debated different possible scenarios on the Company’s
operations, financial position and forecast for a period of at
least 12 months since the approval of these financial state-
ments. Possible scenarios range from (i) further disruption
in Proyecto Riotinto; (ii) market volatility in commodity
prices; and (iii) availability of existing credit facilities and
have considered the capacity of the Group and its single
asset Proyecto Riontinto to generate cash, the Group
concluded that no impairment indicators are in place.
All the above were considered in the assessment of the
impact of COVID-19 in the 2020 operations for which an
inherent uncertainty exists given the current facts and
circumstances at the date of preparation of these financial
statements. Although an impact is anticipated in certain
projects due to delays, the overall conclusion is that such
an impact given the current facts and circumstances
does not cast a material uncertainty about the ability of
the Group to continue as a going concern which is the
assumption used for the preparation of these financial
statements as per Note 2.1 (b).
AAU Permits
The Junta de Andalucía issued a favourable report in
relation to the Unified Environmental Authorisation (the
“AAU”) of Proyecto Riotinto in January 2020. The AAU is
now on a short legal consultation period exclusively with
parties involved in the process, as all deadlines of the
process have been suspended by the Junta de Andalucía
as result of COVID-19 outbreak. The validation of the AAU
is a required step towards the automatic re-validation of
the mining permit for Proyecto Riotinto.
Negative Environmental Impact Statement on
Proyecto Touro
The “Dirección Xeral de Calidade Ambiental e Cambio
Climático”, (the General Directorate for the Environment
and Climate Change of Galicia), announced on 28 January
2020 that a negative Environmental Impact Statement for
Proyecto Touro (Declaración de Impacto Ambiental) had
been signed.
The short release stated that the decision was based
on two reports which form part of a wider evaluation
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Atalaya Mining Plc.financial statementsAnnual Report Atalaya Mining Plc.
s h a r e h o l d e r i n f o r m a t i o n
Annual Report
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s h a r e h o l d e r i n f o r m a t i o n
Atalaya Mining Plc.
Shareholder
information
148 Glossary of terms
152 Shareholder Enquiries
- 147 -
Glossary of Terms
The following definitions and terms are used throughout this Annual Report.
Currency abbreviations
à US$ / USD or $ .......................... US Dollars
à $000 ...................................... Thousand US dollars
à $m ........................................ Million US Dollars
à £ .......................................... Sterling Pound
à £000 ...................................... Thousand Sterling Pounds
à £m ........................................ Million Sterling Pounds
à € / EUR ................................... Euro
à €000 / €k ................................. Thousand Euros
à €m ........................................ Million Euros
à €nil ....................................... Zero Euros
à Fy2019 / 2019 ........................... Twelve month period ended 31 December 2019
à Fy2018 / 2018 ........................... Twelve month period ended 31 December 2018
Definitions and conversion table
à lb.......................................... Pound
à oz ......................................... Troy ounce
à ‘000 m³ ................................... Thousand cubic metres
à t ........................................... Tonne
à dmt ...................................... Dry Metric Tonne
à ‘000 tonnes ............................. Thousand metric tonnes
à 1 Kilogramme/ (kg) ..................... 2.2046 pounds
à 1000 Kilogrammes/ (´000 kg) ......... 2,204.6 pounds
à 1 Kilometre (km) ........................ 0.6214 miles
à 1 troy ounce ............................. 31.1 grams
à ha ........................................ Hectare
à ft .......................................... Foot
Chemical Symbols
à Cu ......................................... Copper
à Ag ......................................... Silver
à Au ........................................ Gold
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Atalaya Mining Plc.shareholder informationAnnual Report Business, Finance and Accounting
à AAu ...................................... Autorización Ambiental Unificada (Unified Environmental Declaration)
à Atalaya or the Company ................ Atalaya Mining Plc, a company incorporated in Cyprus under the
Companies law, cap. 113
à Atalaya Group or Group ................ Atalaya Mining Plc and its subsidiaries
à AfrC ..................................... Audit and Financial Risk Committee
à Agm ...................................... Annual General Meeting
à Aim ....................................... Alternative Investment Market of the London Stock Exchange
à AisC ...................................... All In Sustaining Cost
à Ar ........................................ Annual Report
à Arm ...................................... Atalaya Riotinto Minera, S.L.U.
à Articles................................... The articles of association of Atalaya Mining Plc.
à Average head grade .................... Average ore grade fed into the mill, expressed in % of weight
à BoD or Board of Directors .............. The Board of Directors of the Company
à CApex ................................... Capital Expenditure
à Cash Cost ................................ The cost to produce one pound of copper
à Ceo ....................................... Chief Executive Officer
à C. Eng .................................... Chartered Engineer
à Cfo ....................................... Chief Financial Officer
à Coo ...................................... Chief Operational Officer
à Cof ....................................... Cost of Freight
à Cif ........................................ Cost Insurance and Freight
à Cit ........................................ Corporate Income Tax
à Cip ........................................ Carriage and Insurance paid to
à Cgu ...................................... Cash Generating Unit
à CgnCC ................................... Corporate Governance, Numeration and Compensation Committee
à Code of Conduct ........................ Atalaya’s Code of Business Conduct and Ethics
à Cont. . ....................................Continued
à Csr ....................................... Cobre San Rafael S.L.
à Directors ................................. The Directors of Atalaya for the reporting period
à ebitdA ................................... Earnings Before Interest Tax Depreciation and Amortisation
à eCl ....................................... Expected Credit Loss
à eeA ....................................... Ecologistas en Accion
à eir ........................................ Effective Interest Rate Method
à emed tArtessus ..................... Eastern Mediterranean Exploration & Development TARTESSUS S.L.
à Etc. .. .....................................Et cetera
à eu ........................................ European Union
- 149 -
Atalaya Mining Plc.shareholder informationAnnual Report
à fifo ...................................... First In First Out
à Financial statements ................... Consolidated and company financial statements of Atalaya Mining Plc.
à fob ....................................... Free on Board
à fv ........................................ Fair Value
à fvoCi .................................... Fair Value Through Other Comprehensive Income
à fvpl ..................................... Fair Value Through Profit or Loss
à gAAp ..................................... Generally Accepted Accounting Policies
à Group ..................................... Atalaya Mining plc and its subsidiaries
à h1, h2 .................................... Six month periods ending 30th June and 31st December
à iAs ........................................ International Accounting Standards
à ie. ......................................... Id est (explanatory information)
à ifrs ...................................... International Financial Reporting Standards
à ipo ....................................... Initial Public Offering
à JdA ....................................... Junta de Andalucía
à KPI´s ..................................... Key Performance Indicators
à ldC ....................................... Louis Dreyfus Company
à libor .................................... The British Bankers’ Association Interest Settlement Rate for the
relevant currency
à litfr ..................................... Lost Injury Time Frequency Rate
à Ltd. .... ...................................Limited
à llC ....................................... Limited Liability Company
à lp ......................................... Limited partnership
à London Stock Exchange / LSE ........ London Stock Exchange plc
à mbA ...................................... Master’s in Business Administration
à NED´s ..................................... Non-Executive Directors
à npv ...................................... Net Present Value
à nr ......................................... Number
à oCi ....................................... Other Comprehensive Income
à Ordinary Shares ......................... Ordinary Shares of 10 pence each in the capital of the Company
à Ph. d. ... ..................................Doctor of Philosophy
à prC ....................................... Physical Risk Committee
à pfs ....................................... Pre-Feasibility Study
à Plc. ....................................... Public limited company
à P&L ....................................... Profit and Loss
à P&P reserves ............................ Proven and Probable reserves
à q1, q2, q3, q4 ........................... Three month periods ending 31st March, 30th June, 30th September
and 31st December
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Atalaya Mining Plc.shareholder informationAnnual Report
à qCA ....................................... Quoted Companies Alliance
à qp ........................................ Quotation Period
à siC ........................................ Standard Interpretations Committee which were endorsed by the IAS
à Shareholders ............................ Holders of Ordinary Shares
à sl ......................................... Sociedad Limitada (private limited company)
à slu ....................................... Sociedad Limitada Unipersonal (limited partnership)
à tsx ....................................... Toronto Stock Exchange
à United Kingdom or UK .................. the United Kingdom of Great Britain and Northern Ireland
à United States or US ..................... the United States of America, its territories and possessions, any state
of the United States of America and the District of Columbia
à uop ...................................... Unit of Production
à vAt ....................................... Value Added Tax
à wC ........................................ Working Capital
à xgC ....................................... Yanggu Xiangguang Copper Co. Ltd
Mining terms
à Average head grade .................... Average ore grade fed into the mill, expressed in % of weight
à Concentrate ............................. A fine powdery product of the milling process containing a high
percentage of valuable metal
à Contained copper ....................... Represents total copper in a mineral reserve before reduction to
account for tonnes not able to be recovered by the applicable
metallurgical process
à Grade ..................................... The amount of metal in each tonne of ore, expressed as a percentage
à Mtpa ...................................... Million tonnes per annum
of valuable metal
à ni 43-101 ................................ National Instrument 43-101, standard of disclosure for mineral
projects according to Canadian guidelines
à Open pit .................................. A mine where the minerals are mined entirely from the surface. Also
referred to as open-cut or open-cast mine
à Ore body ................................. A sufficiently large amount of ore that can be mined economically
à P&P Reserves ........................... Proven and Probable reserves
à Stripping ................................. Removal of overburden or waste rock overlying an ore body in
preparation for mining by open pit methods
à Tailings .................................. Materials left over after the process of separating the valuable
fraction from the uneconomic fraction of an ore
à TC/RC .................................... Treatment Charge and Refinement Charge
à vtem ..................................... Versatile Time Electomagnetic mapping
à 3d......................................... Three Dimensional
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Atalaya Mining Plc.shareholder informationAnnual Report
Atalaya Mining Plc.
S H A R E H O L D E R I N F O R M A T I O N
Annual Report
Shareholder Enquiries
Board of Directors:
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
Corporate brokers
BMO Capital Markets
Canaccord Genuity Limited
95 Queen Victoria Street
41 Lothbury
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London, EC4V 4HG
NOMAD
Investor Relations
Canaccord Genuity Limited
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41 Lothbury
London EC2R 7AE
4C Communications Ltd.
Hudson House
8 Tavistock Street
London WC2E 7PP
+44 (0) 203 170 7973
Public Relations
Registrars
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Newgate Communications
Sky Light City Tower
50 Basinghall Street
London EC2V 5DE
+44 (0) 207 680 6550
Cymain registrars Ltd.
26 Vyronos Avenue
1096 Nicosia, Cyprus
- 152 -
Annual Report
S H A R E H O L D E R I N F O R M A T I O N
Atalaya Mining Plc.
Depositary / transfer
agent
Company secretary:
Inter Jura CY (Services) Limited
United Kingdom
Computershare Investor Services Plc.
1 Lampousa Street,
1095 Nicosia, Cyprus
The Pavilions
Bridgwater
Bristol BS13 8AE
Canada
Computershare Investor Services Inc.
100 Universtity Avenue
8th Floor, North Tower
Toronto, Ontario M5J 2Y1
Group Auditor:
Registered office:
Ernst & Young Cyprus Ltd
Jean Nouvel Tower,
6 Stasinos Avenue,
P.O.Box 21656,
1511, Nicosia,
Cyprus
1 Lampousa Street,
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- 153 -
spain 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