atalaya mining plc
ANNUAL
REPORT
2020
For the year end 31 December 2020
atalaya mining plc
ANNUAL
REPORT
2020
For the year end 31 December 2020
6
COMPANY OVERVIEWANNUAL REPORTAtalaya Mining Plc. 7
COMPANY OVERVIEWANNUAL REPORTAtalaya Mining Plc. 8
ANNUAL REPORT
Atalaya Mining Plc.
ANNUAL REPORT
9
CONTENT
COMPANY OVERVIEW
10
CORPORATE GOVERNANCE
REPORT
54
Our Purpose ........................................................... 12
Board of Directors .....................................................56
2020 Performance and
Key Highlights ........................................................ 13
Strategic Focus for
Growth ..................................................................... 14
2020 Key Safety Highlights ................................ 15
Atalaya at a Glance ...................................................16
STRATEGIC REPORT
18
Letter from the Chairman ...................................... 20
Market Overview ........................................................22
Strategy Framework .................................................26
Key Performance Indicators ..................................29
Risk Analysis .................................................................30
Basis of Reporting ......................................................32
Operational Review ...................................................34
Financial Review .........................................................38
SUSTAINABILITY REPORT
46
Sustainability Framework .......................................48
— Social Development ...........................................48
— Health and Safety ............................................... 51
— Environment ......................................................... 52
Board Committees ...................................................... 71
— CGNCC: Corporate Governance,
Nominating and Compensation
Committee Report .................................................. 71
— AFRC: Audit and Financial Risk
Committee Report ................................................. 76
— PRC: Physical Risks Committee
Report ......................................................................... 79
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
80
Condensed Consolidated Financial
Statements ...................................................................82
Notes to the Condensed Consolidated
Financial Statements ................................................ 87
SHAREHOLDER
INFORMATION
110
Glossary of Terms ..................................................... 112
Shareholder Enquiries ............................................ 116
Atalaya Mining Plc.
10
Atalaya Mining Plc. — ANNUAL REPORT 2020
COMPANY
OVERVIEW
11
OUR PURPOSE ....................................................... 12
2020 PERFORMANCE AND
KEY HIGHLIGHTS .................................................. 13
STRATEGIC FOCUS FOR
GROWTH ................................................................. 14
2020 KEY SAFETY HIGHLIGHTS ........................ 15
ATALAYA AT A GLANCE ....................................... 16
12
COMPANY OVERVIEW — Our purpose
ANNUAL REPORT
OUR
PURPOSE
OUR STRATEGY
OPERATIONAL EXPERTISE THAT DELIVERS
Atalaya Mining continues to build on its success at Proyecto Riotinto, increasing
production and capacity, with a view to becoming a multi-asset producer. It
maintains a focus on the development of low-cost, low-risk assets in mining-
favourable jurisdictions.
OUR MISSION
RESPONSIBLY INCREASING LONG TERM VALUE FOR ALL STAKEHOLDERS
Atalaya Mining implements its strategic objectives to ensure the ongoing stable
growth of the Company. Protecting and enhancing the value for all stakeholders
is of paramount importance, and the Company continuously looks at opportu-
nities to achieve this.
OUR VALUES
A COMMITTED DUTY TO A SAFE AND ETHICAL WORKING ENVIRONMENT
Atalaya Mining is committed to responsible mining and upholds its core princi-
ples of honesty and accountability. The Company works with all stakeholders
to ensure that its values are completely aligned with the local community and
environment.
Atalaya Mining Plc.
ANNUAL REPORT
COMPANY OVERVIEW — 2020 Performance and Key Highlights
13
2020 PERFORMANCE
AND KEY HIGHLIGHTS
OPERATIONAL
HIGHLIGHTS
Unit
2021 Guidance
2020
2019
COPPER CONCENTRATE
COPPER CONTAINED IN
CONCENTRATE
PAYABLE COPPER
CONTAINED IN
CONCENTRATE
t
t
t
-
256,001
195,072
52,000-54,000
55,890
44,950
-
53,330
42,935
FULL YEAR 2020 COPPER PRODUCTION INCREASED BY 24.3%.
2020 GUIDANCE MET.
DURING 2020, THE PROYECTO RIOTINTO 15M EXPANSION PROJECT WAS COMPLETED WITH THE
PROCESSING PLANT FULLY COMMISSIONED AND OPERATING AT PLANNED CAPACITY.
ANNUAL ORE PROCESSED IN 2020 WAS 14.8 MILLION TONNES.
FINANCIAL
HIGHLIGHTS
REVENUES
EBITDA
Unit
€k
€k
CASH COST
$/lb payable
ALL-IN SUSTAINING COST
$/lb payable
2020
2019
252,784
187,868
67,444
61,333
1.95
2.21
1.80
2.14
CASH AT BANK
€k
37,767
8,077
EBITDA INCREASED 10% YEAR ON YEAR TO REACH €67.4 MILLION IN 2020.
CASH COSTS OF US$1.95/LB AND AISC OF US$2.21/LB.
HEALTHY LIQUIDITY POSITION WITH €37.8 MILLION CASH AT BANK AT 31 DECEMBER 2020.
Atalaya Mining Plc.
COMPANY OVERVIEW — Strategic Focus for Growth
ANNUAL REPORT
14
STRATEGIC FOCUS
FOR GROWTH
Atalaya’s ambition is to become a multi-asset, mid-tier base metals producer.
ORGANIC GROWTH
EXTERNAL GROWTH
Continue to evaluate external opportunities that
leverage core capabilities:
» New prospects in the Iberian Pyrite Belt or other
safe mining jurisdictions.
» Targeting prospects of material scale, good
geology & upside potential via rigorous technical
due diligence.
VALUE-ADDED PRODUCTS
» Evaluation of technologies (E-LIX) to maximise
value of complex sulphides at Riotinto and in the
Iberian Pyrite Belt and beyond.
EVALUATION OF EXISTING PORTFOLIO OF
HIGH GRADE BROWNFIELD OREBODIES IN
THE RIOTINTO DISTRICT
» Increases optionality and mine life.
COST REDUCTION / ESG INITIATIVES
» Solar project to reduce operating costs and
carbon emissions.
» Zero tailings water discharge design is interna-
tional best practice.
PROYECTO TOURO
We continue to be confident that our world class
approach to Proyecto Touro will satisfy the most
stringent environmental conditions that may be
imposed by the authorities prior to the develop-
ment of the project.
MASA VALVERDE
Followed the acquisition of Masa Valverde in
October 2020, the work has started on general
permitting and new geophysical surveys on the
polymetallic project located in the Riotinto District
in Huelva (Spain), one of the largest undeveloped
volcanogenic massive sulphide deposits in the
Iberian Pyrite Belt.
Atalaya Mining Plc.
ANNUAL REPORT
COMPANY OVERVIEW — 2020 Key Safety Highlights
15
2020 KEY
SAFETY
HIGHLIGHTS
PROYECTO RIOTINTO
2020
2019
Hours
760,992
Hours
697,854
Hours
1,075,323
Hours
1,105,809
Nr.
50
Nr.
31
Nr.
7
Nr.
4
Days
27
Days
206
Ratio
3.98
Ratio
3.73
Ratio
0.03
Ratio
0.19
Nr.
46
Nr.
28
Nr.
4
Nr.
7
Days
112
Days
167
Ratio
5.73
Ratio
6.33
Ratio
0.16
Ratio
0.15
WORKED
HOURS
NO LOST-TIME
ACCIDENTS
LOST-TIME
ACCIDENTS
WORKING
DAYS LOST
LOST TIME INJURY
FREQUENCY RATE
INDEX OF
SEVERITY
Employees
Contractors
Employees
Contractors
Employees
Contractors
Employees
Contractors
Employees
Contractors
Employees
Contractors
Atalaya Mining Plc.
COMPANY OVERVIEW — Atalaya at Glance
ANNUAL REPORT
16
ATALAYA AT
A 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.
ASSETS
LOCATED IN
PIPELINE OF
POTENTIAL
ESTABLISHED
GROWTH
AND STABLE
OPPORTUNITIES.
PROVEN
MANAGEMENT
TEAM.
STRONG FOCUS
SUPPORTIVE
ON ESG.
STRATEGIC
SHAREHOLDERS.
MINING
JURISDICTIONS.
The Company owns and operates through a wholly owned subsidiary, “Proyecto
Riotinto”, an open-pit copper mine located in the Iberian Pyrite Belt, in the Andalusia
region of Spain, approximately 65 km northwest of Seville. A brownfield expansion
was completed in 2019. Atalaya also owns 10% (with the right to earn up to 80%) of
Proyecto Touro, a brownfield copper project in northwest Spain and 100% of Masa
Valverde, a polymetallic project located in Huelva (Spain) and 28kms South West of
Proyecto Riotinto.
The business of the Company and its subsidiaries is to explore for and develop mining
operations in Europe, with an initial focus on copper.
The strategy is to evaluate and prioritise mining opportunities in several jurisdictions
throughout the well-known belts of base and precious metal mineralisation in Spain
and globally.
For further details on the principal activities of the Group and the Company, please
refer to www.atalayamining.com.
Atalaya Mining Plc.
ANNUAL REPORT
COMPANY OVERVIEW — Atalaya at Glance
17
PROYECTO TOURO
Ownership
10% with an earn-in agreement up to
80%
Mine Activity
Open pit mining in permitting stage
Commodity
Location
Ore Reserve*
Growth
* NI 43-101 dated April 2018.
Cu, Ag
A Coruña, Spain
91Mt at 0.43% ($2.60/lb)
Option to acquired 100% of the adjacent
exploration concessions
In 2017, Atalaya signed a phased, earn-in agreement for up
to 80% ownership of Proyecto Touro, a brownfield copper
project in northwest Spain. The mining rights are owned
by Cobre San Rafael, S.L.
PROYECTO MASA VALVERDE
Ownership
100,00%
Mine Activity
Underground mining in permitting stage
Commodity
Location
Cu, Zn, Pb, Ag and Au
Huelva, Spain
M,I&I Resources
~ 440 kt Cu; ~1,270 kt Zn; ~72 Moz Ag; ~1.3
Moz Au
PROYECTO RIOTINTO (CERRO
COLORADO)
Ownership
Mine Activity
Commodity
Location
Ore Reserve*
LOM
100,00%
Open pit mining in operation
Cu, Ag
Huelva, Spain
197Mt at 0.42% ($2.60/lb)
2021 expected Cu
production
52,000 – 54,000 tonnes
Growth
Significant additional potential
* Historical data.
12+ years
Growth
Strong exploration upside potential in
the immediate surroundings. Recent
discovery of the Majadales sulphide
body
* NI 43-101 dated July 2018.
Proyecto Riotinto is operated through Atalaya Riotinto
Minera, S.L.U. a fully owned entity established under the
laws of Spain.
In 2020, Atalaya entered into a definitive purchase agree-
ment to acquire the Masa Valverde polymetallic project
which is located near Proyecto Riotinto. The mining rights
are owned by Atalaya Masa Valverde, S.L.U. a fully owned
subsidiary of Atalaya.
Atalaya Mining Plc.
18
Atalaya Mining Plc. — ANNUAL REPORT 2020
STRATEGIC
REPORT
19
LETTER FROM THE CHAIRMAN .......................... 20
MARKET OVERVIEW ............................................ 22
STRATEGY FRAMEWORK ................................... 26
KEY PERFORMANCE INDICATORS .................... 29
RISK ANALYSIS ...................................................... 30
BASIS OF REPORTING .......................................... 32
OPERATIONAL REVIEW ...................................... 34
FINANCIAL REVIEW.............................................. 38
STRATEGIC REPORT — Letter from the Chairman
ANNUAL REPORT
20
LETTER
FROM THE
CHAIRMAN
Dear Shareholder,
To say that 2020 was a challenging year would be
an understatement. In the midst of completing
the commissioning and ramp-up of the large-
scale process plant expansion, your company
experienced the unpredictable external pres-
sures resulting from the arrival in Spain of the
Covid 19 world-wide pandemic. The principal
concern was for the protection, safety and well-
being not only of our staff and contractors but
also the community and our suppliers with the
immediate application of measures that met
and exceeded the requirements of the guidelines
from the relevant authorities.
We can be justly proud of the manner in which
the executive management acted, both reactively
and proactively, in the face of the pandemic.
Working practices were quickly modified, with
procedures and controls developed that respon-
sibly and effectively resulted in Covid-secure
operating conditions. This protected not only the
health of all concerned, including peace of mind
for their families, but also the operational and
financial health of the company.
Despite all the challenges of the year, including
a thankfully short national industry lockdown,
management completed the process plant
commissioning and ramp-up to name-plate
throughput, with the production of almost 56,000
tonnes of contained copper. This output is a
record to date and an increase of around 24%
from last year’s production. Output guidance for
2021 has been set at 52,000 to 54,000 tonnes of
contained copper resulting from a slight reduc-
tion in scheduled mined grade from the higher
copper price and resulting lower cut-off grade.
The average process plant feed grade of
0.45% copper and the process recovery rate of
84.5% were consistent with reserve estimates
and budgeted figures. Cash Costs and All-in
Sustaining Costs for 2020 of $1.95/lb and $2.21/
lb respectively, were slightly below the budgeted
figures of $1.98/lb and $2.23/lb respectively.
Notwithstanding the effect of a stronger USD/
Euro exchange rate, and a Covid-related brief
reduction in copper price, the increase in copper
production resulted in an increased turnover
from €187.9 million in 2019 to €252.8 million in
2020, and an EBITDA for 2020 of €67.4 million,
compared to €61.3 million in 2019.
The previously reported procedural process
surrounding the re-issuance of the Unified Envi-
ronmental Authorisation (“AAU”) for the Project,
delayed by Covid restrictions, was finally resolved
in May with the resulting automatic re-validation
of the mining permit of the mine.
Atalaya Mining Plc.
Atalaya Mining Plc.
ANNUAL REPORT
STRATEGIC REPORT — Letter from the Chairman
21
Mine site exploration and infill drilling continued
during 2020 with encouraging initial results. An
independent consultant is finalising the Cerro
Colorado open pit reserves and resources update
taking into consideration the latest exploration
results with current copper prices, operating costs
and geotechnical parameters. In addition, there is
an ongoing independent evaluation of the historic
polymetallic San Antonio and San Dionisio
deposits. The San Antonio deposit, located east
of the Cerro Colorado open pit, would require
underground mining methods. The San Dionisio
deposit containing copper as well as polyme-
tallic mineralisation, is located west of the Cerro
Colorado pit and current indications show there is
good potential for it to be mined with a combi-
nation of open pit and underground methods.
Exploration work also commenced on the newly
acquired Masa Valverde asset with an initial
scoping study expected by the end of the year.
In March 2021, formal communication of a
negative Environmental Impact Statement for
the Touro project was received from the local
government in Galicia, as previously reported in
January 2020. Management is currently evalu-
ating options to modify the project parameters to
address the concerns of the Xunta de Galicia with
the aim of moving the project forward.
In March 2021 the Company approved the early
payment of the Deferred Consideration to Astor,
thus removing the timing uncertainty from our
balance sheet. The Deferred Consideration was
funded by unsecured credit lines from four major
Spanish banks on a three-year tenure and an
average annual interest rate of approximately
two per cent. The smaller issue of any residual
interest that may or may not be payable remains
unresolved. A summary judgement hearing to
determine whether particular aspects of the
excess cash calculation can be resolved without
the need for a full trial will take place on 14 June
2021, with the hearing for the full trial on the
definition of “Excess Cash” set to take place on 21
February 2022.
In addition to the focus on Covid-secure working
practices, the emphasis on our high standards
and responsible approach to operational safety
and environmental management remained a
priority throughout the year. In September 2020,
the Company announced the start of a study,
the completion of which is pending relaxation of
Covid restrictions, to develop a 50MW solar plant
on site with the aim of reducing electricity costs
as well as reducing carbon emissions.
In addition to the acquisition of Masa Valverde
and the ongoing work on the Touro project, the
Company remains focused, via technical review
and assessment of other opportunities, on
growth potential to increase shareholder value.
In October 2020, the Company commenced a
feasibility study to evaluate the patented E-LIX
leaching System developed by Lain Technologies
Ltd. The aim is to produce copper cathodes at
Proyecto Riotinto with the potential to generate
cost savings and reduce carbon emissions. It
also entered into a Licence Agreement with Lain
Technologies Ltd to use its patents, under certain
conditions and on an exclusive basis, for the
treatment of the complex sulphide ores prevalent
in the Iberian Pyrite Belt in Spain and Portugal.
I would like to take this opportunity to express
our appreciation to the management and staff
for their continued dedication and commitment,
especially in maintaining their presence on site
to safely increase production and sales in the
face of such a significant health pandemic.
Finally I would like to thank the board members
for their continued support and close involve-
ment with the company activities. In particular, I
would like to thank Jon Lamb, who stepped off
the board in November 2020, for his advice and
guidance over several years, and also welcome
Neil Gregson, who joined the board in February
2021. Last but not least I would like to thank
our valued shareholders for their continued
support. We all look forward to the year ahead
with continued confidence and optimism to
take advantage of the identified opportunities to
continue the growth, and increase the value, of
your company.
Roger Davey
Chairman of Atalaya Mining Plc
24 March 2021
Atalaya Mining Plc.
Atalaya Mining Plc.
22
MARKET
OVERVIEW
COPPER DEFINITION (AS DEFINED BY INTERNATIONAL COPPER STUDY
GROUP “ICSG”)
Copper is a malleable and ductile metallic element that is an excellent
conductor of heat and electricity as well as being corrosion resistant and
antimicrobial. Copper occurs naturally in the Earth’s crust in a variety of
forms. It can be found in sulfide deposits (as chalcopyrite, bornite, chal-
cocite, covellite), in carbonate deposits (as azurite and malachite), in silicate
deposits (as chrysycolla and dioptase) and as pure “native” copper.
Copper and copper‐based alloys are used in a variety of applications that
are necessary for a reasonable standard of living. Its continued production
and use is essential for society’s development. How society exploits and
uses its resources, while ensuring that tomorrow’s needs are not compro-
mised, is an important factor in ensuring society’s sustainable development.
Chemical Symbol .....................Cu
Atomic Number ....................... 29
Atomic Weight ...................63.54
Density....................8,960 kg m-3
Melting point ................... 1,356 K
COPPER MARKET (SOURCE ICSG)
Historical mine production in thousand Metric Tonnes Copper.
Year
Copper (k tn)
Year
Copper (k tn)
Year
Copper (k tn)
Year
Copper (k tn)
2001
13,636
2006
14,983
2011
15,960
2016
20,393
2002
13,487
2007
15,508
2012
16,687
2017
20,058
2003
13,699
2008
15,532
2013
18,185
2018
20,565
2004
14,594
2009
15,941
2014
18,422
2019
20,528
2005
14,927
2010
15,987
2015
19,153
2020
20,634
World copper mine production
in 2020 was 20.6 million tonnes.
Production by region in 2020:
LATIN AMERICA ............................. 41%
ASIA ..................................................... 16%
EUROPE ............................................. 14%
NORTH AMERICA .......................... 12%
AFRICA ............................................... 12%
OCEANIA .............................................. 5%
Top five copper
mine production
countries:
Chile
Perú
China
D.R. Congo
United States
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Market Overview 23
MAJOR INTERNATIONAL TR ADER FLOWS OF COPPER ORES AND
CONCENTR ATES (SOURCE ICSG)
Major Exporters
of Copper Ores and
Concentrates, 2020:
Major Importers
of Copper Ores and
Concentrates, 2020:
1
2
3
4
5
6
7
8
9
Chile
Perú
Mexico
Australia
Mongolia
United States
Indonesia
Brazil
Kazakhstan
1
2
3
4
5
6
7
8
9
China
Japan
Korea Rep.
Spain
Germany
Bulgaria
Mexico
India
Finland
10
D.R. Congo
10
Russian Federation
THE USES OF COPPER (SOURCE ICSG)
ELECTRICAL
Copper is the best nonprec-
ious metal conductor of
electricity as it encoun-
ters much less resistance
compared with other
commonly used metals.
It sets the standard to
which other conductors are
compared.
ELECTRONICS AND
COMMUNICATIONS
Copper plays a key role
in worldwide information
and communications
technologies. HDSL (High
Digital Subscriber Line)
and ADSL (Asymmetrical
Digital Subscriber Line)
technology allows for high-
speed data transmission,
including internet service,
through the existing copper
infrastructure of ordinary
telephone wire.
CONSTRUCTION
Copper and brass are the
materials of choice for
plumbing, taps, valves and
fittings. Thanks in part to
its aesthetic appeal, copper
and its alloys, such as archi-
tectural bronze, is used in a
variety of settings to build
facades, canopies, doors
and window frames.
INDUSTRIAL
MACHINERY AND
EQUIPMENT
Wherever industrial
machinery and equipment
is found, it is a safe bet
that copper and its alloys
are present. Due to their
durability, machinability
and ability to be cast with
high precision and toler-
ances, copper alloys are
ideal for making products
such as gears, bearings and
turbine blades.
CONSUMER AND
GENERAL PRODUCTS
Copper and copper-based
products are used in
offices, households and
workplaces. Computers,
electrical appliances, cook-
ware, brassware, and locks
and keys are just some of
the products exploiting
copper’s advantages.
TRANSPORTATION
All major forms of transpor-
tation depend on copper to
perform critical functions.
Copper-nickel alloys are
used on the hulls of boats
and ships to reduce marine
befouling, thereby reducing
drag and improving fuel
consumption. Automobiles
and trucks rely on copper
motors, wiring, radiators,
connectors, brakes and
bearings.
EQUIPMENT ..................................................................... 31%
BUILDING AND CONSTRUCTION ............................28%
INFRASTRUCTURE ........................................................ 16%
TRANSPORT .....................................................................13%
INDUSTRIAL ......................................................................12%
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Market Overview 24
SPOT MARKET CU PRICE
b
l
/
$
3,60
3,40
3,20
3,00
2,80
2,60
2,40
2,20
2,00
Jan-19
Feb-19
M ar-19
Apr-19
M ay-19
Jun-19
Jul-19
Ago-19
Sep-19
Oct-19
N ov-19
Dec-19
Jan-20
Feb-20
M ar-20
Apr-20
M ay-20
Jun-20
Jul-20
Ago-20
Sep-20
Oct-20
N ov-20
Dec-20
In 2020, copper traded between US$2.09 and US$3.61 per
pound of copper. The spot price for copper was US$2.09
as at 23 March 2020 and US$3.51 as at 31 December 2020,
reflecting an increase of 67.7% for the period. The average
market price for 2020 was $2.80/lb, 2.9% higher than the
average for 2019. The average copper price for Q1 2021 was
$3.85 and the spot price at 31 March 2021 was $4.01.
The market copper price has a significant impact on
Atalaya`s ability to generate positive operating cash flows.
REALISED COPPER PRICES
The average prices of copper for 2020 and 2019 were:
(USD)
Realised copper price per lb
Market copper price per lb (period
average)
2020
2019
2.70
2.73
2.80
2.72
Realised copper prices for the reporting period noted
above have been calculated using payable copper and
including both provisional invoices and final settlements
of quotation periods (“QPs”) together. Higher realised
prices than market copper prices are mainly due to the
final settlement of invoices where the QP was fixed in the
previous quarter due to a short open period when copper
prices were higher. The realised price during the year,
excluding the QP, was approximately $2.78/lb.
SPOT VS REALISED PRICE
Spot
Realised price
Realised price (excl. QP)
b
l
/
$
3,60
3,40
3,20
3,00
2,80
2,60
2,40
2,20
2,00
Jan-19
Feb-19
M ar-19
Apr-19
M ay-19
Jun-19
Jul-19
Ago-19
Sep-19
Oct-19
N ov-19
Dec-19
Jan-20
Feb-20
M ar-20
Apr-20
M ay-20
Jun-20
Jul-20
Ago-20
Sep-20
Oct-20
N ov-20
Dec-20
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Market Overview
25
ATALAYA’S RESPONSE
The Group had no hedges on commodities prices during
2020. At the date of this report, the Group is fully exposed
to copper prices with no commodities hedging agree-
ments 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.
FX RATES EUR:USD
D
S
U
R
U
E
:
1,25
1,20
1,15
1,10
1,05
1,00
Jan-19
Feb-19
M ar-19
Apr-19
M ay-19
Jun-19
Jul-19
Ago-19
Sep-19
Oct-19
N ov-19
Dec-19
Jan-20
Feb-20
M ar-20
Apr-20
M ay-20
Jun-20
Jul-20
Ago-20
Sep-20
Oct-20
N ov-20
Dec-20
ATALAYA’S RESPONSE
In 2020, 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.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Market Overview 26
STRATEGY
FRAMEWORK
The business model
of Atalaya is founded
upon creating value
for its stakeholders
through operational
and developmental
excellence. Experience
and an unceasing search
for improvement are the
pillars of its success.
OUR VALUES
STRATEGIC PILLARS
Importance of People:
»
Importance of Safety, Health,
Environment & Security.
» Strong workforce with longstanding
OUR PEOPLE
employees.
Operational Excellence:
»
Importance of cost management.
» Establishing high performance.
» Operating to a world-class standard.
» Maximising production capacity.
Creating Value:
»
Increasing asset value under management.
» Focusing on generating free cash flows.
» Focusing on creating value for shareholders.
» Allocating capital efficiently.
» Creating opportunities for growth.
» Maximising production capacity.
Social Projects:
» Working closely with communities.
» Contributing to community development.
OUR BUSINESS
OUR FUTURE
SUPPORT LOCAL COMMUNITIES
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Strategy Framework 27
OUR PEOPLE
OUR BUSINESS
» 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 a safe 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 sites.
» Focused on improving its relationships with local government and
communities.
» Limited presence in the media, with efforts focused on direct
contact with people.
» World-class processing plant in Europe to maximise value of the
Group, thereby increasing free cash flows from operations.
» Ensure the ongoing stable growth of the Company
» Protecting and enhancing the value for all stakeholders.
Key Driver
Key Driver
✓ Reduce environmental impact
✓ 490 employees
✓ 99.5% based at mine sites
✓ Socially responsible through Fundación Atalaya Riotinto
Achievements
2020 Achievements
✓ 14.8 m tonnes of ore processed
✓ 56k tonnes of Cu produced
✓ €67.4m EBITDA
✓ €59.1 m cash flows from operations
✓ €37.8m cash balance as at 31 December 2020
Achievements
2020 Achievements
» Increased the number of employees at Proyecto Riotinto
» Production at Proyecto Riotinto within guidance.
» LTI improved in 2020 compared with 2019.
» Better monitoring process of safety records
» Prompt responses to COVID-19
» Little impact of COVID-19
2021 Priorities
» Consolidation our internal growth with production levels of 15Mtpa.
» Contained All-in sustaining cost
» All AAU legal issues of Proyecto Riotinto resolved.
» Operational continuity despite COVID-19.
» Acquisition of new mining projects.
» Further improve health and safety statistics
2021 Priorities
» Continue support to local and regional governments to control
COVID-19 incidence.
» Further growth via acquisitions.
» Continue with strong operational results.
Principal Risks
» Operational Risks
» External Risks
Principal Risks
» Financial Risks
» Operational Risks
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Strategy Framework 28
CREATING VALUE
SUPPORT AND ASSISTANCE IN THE
COVID-19 PANDEMIC
» Evaluation of existing capacity of each project and investment in
exploration to replace reserves deployed.
» Atalaya Mining is committed to responsible mining and upholds its
» With a view to becoming a multi-asset producer focussed in copper.
core principles of honesty and accountability.
» Focus on the development of low-cost assets in mining-favourable
jurisdictions.
» The Company works with all stakeholders to ensure that its values
are completely aligned with the local community and environment.
» Searching and evaluating projects around the world.
Key Driver
Key Driver
✓ Share price of 235.0 pence as at 31 December 2020
✓ 48 actions programmes through Fundación Atalaya
Achievements
2020 Achievements
Achievements
» Investment of €5.4 million (2019: €9.8 million) in sustaining Capex in
2020 Achievements
Proyecto Riotinto.
» Investment of €5.5 million in local communities at Proyecto Riotinto.
» Investment of €11.0 million in tailing dams improvements.
» €5.1 million taxes paid globally.
» Completion of 15Mtpa expansion project.
2021 Priorities
» Continuing exploration works to expand the reserves and resources
of Proyecto Riotinto
» Exploration in Proyecto Masa Valverde.
» Monitoring new opportunities.
» Working to understand and resolve environmental permitting
decision on Proyecto Touro.
» Support for local community events at Proyecto Riotinto and
Proyecto Touro.
» Support and assistance in the COVID-19 sanitary emergency
2021 Priorities
» Increase support and presence in local community projects around
Proyectos Riotinto and Touro.
» Increase community engagement in Touro.
Principal Risks
» Strategic Risks
» External Risks
Principal Risks
» Operational Risks
» External Risks
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Strategy Framework ANNUAL REPORT
STRATEGIC REPORT — Key Performance Indicators
29
KEY PERFORMANCE
INDICATORS
Proyecto Riotinto
Units
2016
2017
2018
2019
2020
Ore mined
Ore processed
Copper contained in concentrate
Cash cost
AISC
Market copper price
EBITDA
WC surplus / (deficit)
Cash at bank
mt
mt
t
$/lb
$/lb
$/lb
€’000
€’000
€’000
7,754,499
9,340,028
10,753,598
10,366,903
13,604,801
6,505,762
8,796,715
9,819,839
10,453,116
14,833,916
26,179
37,164
42,114
44,950
55,890
1.95
n.a.
2.21
15,393
(25,382)
1,135
1.91
2.30
2.80
41,347
22,137
42,856
1.94
2.26
2.93
53,542
8,435
33,070
1.80
2.14
2.72
61,333
3,598
8,077
1.95
2.21
2.80
67,444
(17,904)
37,767
Ore mined (mt)
Ore processed (mt)
Copper contained in concentrate (t)
16
14
12
10
8
6
4
2
0
3,5
3
2,5
2
1,5
1
0,5
0
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Cash cost ($/lb)
Market copper price ($/lb)
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
60.000
50.000
40.000
30.000
20.000
10.000
0
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
0
2016
2017
2018
2019
2020
EBITDA (€`000)
2016
2017
2018
2019
2020
Atalaya Mining Plc.
30
RISK ANALYSIS
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
Importance:
High
Medium
Low
Strategic Risks
Nature of Risk
Mitigation of Risk
Importance
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
concentrate with silver by-product. Any
interruption in the producing asset may impact
the Group’s results.
The operation has been producing since restart in
2016, with cash costs below the market price for copper
even taking into account recent cyclical lows. 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 opportunities and transactions and
approves or recommends them within authority levels set
by the Board.
Lack of
replacement of
reserves
Underestimation
of capex, finance
and licence to
operate
Commercial
and Financial
Risks
Significant
changes to
commodity
prices
Limited number
of customers
Atalaya must continually replace and expand its
mineral resources. The depletion of its mineral
reserves may not be offset by future discoveries
or acquisitions.
On-going exploration campaigns currently in areas close to
Proyecto Riotinto.
During 2020, Atalaya incurred a total of EUR €3.6 million in
exploration activities.
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 was completed in 2020.
Atalaya monitors project controls to ensure that we deliver
approved projects on time, on budget and in line with the
defined specifications.
Nature of Risk
Mitigation of Risk
Importance
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.
The mine’s cash costs are below the market price for
copper, even at recent cyclical lows. Atalaya is constantly
monitoring commodity prices and revisiting hedging
strategies and policies.
A significant portion of Atalaya´s concentrate
production is sold to three offtakers. Offtakers’
business can significantly impact the company’s
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
our supply chain is secure.
Foreign
exchange risk
Liquidity risk
Volatility in the EUR:US$ exchange rate affects the
Group’s profitability.
Atalaya is continually monitoring exchange rate and
revisiting hedging strategies policies.
Atalaya’s operations and business model are
subject to a variety of financial risks of third
parties.
Manage the liquidity and financing structure in accordance
with the business model.
Maintain a diverse portfolio of banks and funds.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Risk Analysis External Risks
Nature of Risk
Mitigation of Risk
Importance
31
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 business,
financial conditions and results of operations.
Economic
conditions
Public health
threats
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 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.
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.
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, transportation
delays and earthquakes.
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 (Environmental Declaration) and mining permit have
been monitored by the company to achieve a successful
result.
Permit re-validated and fully resolved.
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 has not had any appreciable impact on the
Group. This position is maintained following completion of
the transaction period.
Recurrent meetings and analysis performed by local
advisors to ensure that Atalaya monitored and anticipated
taxation for significant business decisions.
Monitoring commodities prices and international 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.
Atalaya´s contractors are very reliable. Atalaya maintains
contingency plans to ensure operations would not be
affected.
Atalaya constantly invests in health and safety and
regularly analyses ways in which to make its mine safer.
Labour
disruptions
Atalaya may be adversely affected by labour
disruptions.
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 Risk
Mitigation of Risk
Importance
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
increasing their water resources by up to 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 reviews any new laws
and changes regularly. Atalaya has not been made aware of
any imminent changes.
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
any potential impact.
Additionally, the structure of the systems was reviewed in
2019.
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.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Risk Analysis 32
BASIS OF
REPORTING
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 2019 and 31
December 2020 and the results of operations
for the twelve month periods ended 31
December 2020 and 31 December 2019.
This report has been
prepared as of 24 March
2021. The analysis herein
is intended to supplement
and complement the
consolidated and notes
thereto (the “Financial
Statements”) as at and for
the twelve month period
ended 31 December 2020.
The reader should review
the Financial Statements in conjunction with the review of this report and with
the consolidated financial statements for the twelve month period ended 31
December 2019. These documents can be found on the Atalaya website at
www.atalayamining.com.
The condensed consolidated financial statements are derived from the full
audited financial statements which are available on the Atalaya website
www.atalayamining.com which have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the IASB and
as adopted by the EU. The currency referred to in this document is the Euro
(“EUR”) unless otherwise specified.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Basis of Reporting ANNUAL REPORT
STRATEGIC REPORT — Basis of Reporting
33
33
FORWARD LOOKING STATEMENTS
cause actual results to vary mate-
rially from results anticipated by
such forward-looking statements
include changes in market conditions
and other risk factors discussed or
referred to in this report and other
documents filed with the applicable
securities regulatory authorities.
Although Atalaya has attempted
to identify important factors that
could cause actual actions, events or
results to differ materially from those
described in forward-looking 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-
looking 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 reli-
ance on forward-looking statements.
This report may include certain
“forward-looking statements” and
“forward-looking information” appli-
cable under securities laws. Except
for statements of historical fact,
certain information contained herein
constitutes forward-looking state-
ments. Forward-looking statements
are frequently characterised by words
such as “plan”, “expect”, “project”,
“intend”, “believe”, “anticípate”,
“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 esti-
mates of management at the date
the statements are made and are
based on a number of assumptions
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-looking statements.
Assumptions upon which such
forward-looking statements are based
include all required third party regu-
latory and governmental approvals
that will be obtained. Many of these
assumptions are base don factors and
events that are not within the control
of Atalaya and there is no assurance
they will be correct. Factors that
Atalaya Mining Plc.
Atalaya Mining Plc.
34
OPERATIONAL
REVIEW
The Company
owns and operates
through a wholly
owned subsidiary,
“Proyecto Riotinto”,
an open-pit copper
mine located in the
Iberian Pyrite 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.
PROYECTO RIOTINTO
The following table presents a summarised statement
of operations of Proyecto Riotinto for the twelve month
period ended 31 December 2020 and 31 December 2019.
Units expressed in accordance with the international system of units (SI)
Unit
2020
2019
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
Notes:
There may be slight differences between the numbers in the above table due to rounding.
t
t
%
%
%
t
t
t
$/lb payable
$/lb payable
13,604,801
10,366,903
14,833,916
10,453,116
0.45
21.83
84.53
0.49
23.01
87.09
256,001
195,072
55,890
53,330
1.95
2.21
44,950
42,935
1.80
2.14
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Operational Review 35
MINING AND PROCESSING
EXPLORATION AND GEOLOGY
MINING
Despite COVID-19, mining operations have continued
normally with enough equipment on site to maintain the
higher production levels required for the full operation of
the expanded plant. Ore mined in 2020 increased to 13.6
Mt compared to 10.4 Mt in the previous year.
PROCESSING
During 2020 the plant processed 14.8 Mt of ore with an
average copper head grade of 0.45% and a recovery rate
of 84.53%. In comparison to the rates for 2019, throughput
have increased however copper head grades and metal-
lurgical recoveries have slightly decreased. 3.9 Mt of ore
milled were processed in Q4 2020, reporting a consistent
quarterly throughput.
Copper concentrate grade was 21.83%, in line with expec-
tations and slightly below previous year´s grade 23.01%.
Concentrate production for 2020 was 256,001 tonnes
compared to 195,072 tonnes in 2019. Contained copper
was 55,890 tonnes compared to 44,950 tonnes in 2019.
Copper payable amounted to 53,330 tonnes from 42,935
tonnes in 2019.
On-site concentrate inventories at 31 December 2020 were
approximately 12,180 tonnes (14,201 tonnes in 2019) which
has been fully sold in January 2021. All concentrate in
stock was delivered to the port at Huelva.
EXPANSION PROJECT OF
PROYECTO RIOTINTO
Atalaya is continuing to focus on implementing cost reduc-
tion programmes to reduce fresh water and lime consump-
tion now that the 15Mtpa expanded plant is producing at
nameplate capacity.
Initiatives to improve copper recoveries, by using some of
the extra installed flotation capacity, are also ongoing.
The target of reducing the power cost at the plant in
an environmentally conscious way is being addressed
through the initiation of the permitting process to install
a 50 MW solar power plant. The full capacity of the solar
power plant will be used for self-consumption and is
anticipated to make a significant contribution to reducing
carbon emissions at Proyecto Riotinto.
Local exploration at Proyecto Riotinto focused on results
from core drilling confirming the presence of unmined
sulphides around Filon Sur, and around San Dionisio which
is under the old Atalaya pit located west of the current
operating pit.
At San Dionisio, mapping of old workings and full geolog-
ical interpretation has been completed in Q4 2020. A
mining consultant is finalising the evaluation of the
existing resource to incorporate into future mine plans.
Mineralisation at San Dionisio consists of copper stock-
work and polymetallic massive sulphides.
An independent consultant is finalising the Cerro Colorado
open pit reserve and resources update taking into consid-
eration the exploration results with current copper prices,
operating costs and geotechnical parameters.
An independent evaluation of the historic polymetallic San
Antonio/Planes deposit has begun. This shallow deposit
is located East of the open pit Cerro Colorado, which is
currently being mined, and would require underground
mining methods.
The independent evaluation of the resources at San
Dionisio, west of the Cerro Colorado pit, is ongoing.
Current indications show there is good potential for it to
be mined with a combination of open pit and underground
methods. San Dionisio contains copper as well as polyme-
tallic mineralisation.
PROYECTO TOURO
Atalaya received formal communication from the local
government in Galicia rejecting the plan to develop
Proyecto Touro on 1 March 2021 and continues evaluating
its options to address the feedback from the Xunta de
Galicia.
The Company continues to be confident that its world
class approach to Proyecto Touro, which includes fully
plastic lined tailings with zero discharge, will satisfy the
most stringent environmental conditions that may be
imposed by the authorities prior to the development of the
project.
COVID-19 IMPACT
The Company issued COVID-19 updates through the
year as the outbreak of the virus impacted the company
both operationally and financially. As announced on 30
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Operational Review is one of the largest undeveloped volcanogenic massive
sulphide deposits in the prolific Iberian Pyrite Belt and is
located 28kms south west of Proyecto Riotinto.
On 28 October 2020, Atalaya announced it had
commenced a feasibility study to evaluate production of
cathodes at Proyecto Riotinto using the newly developed
E-LIX System owned by Lain Technologies, Ltd. It also
entered into a Licence Agreement with Lain Technologies,
Ltd. to use its patents on an exclusive basis under certain
conditions, within the Iberian pyrite belt in Spain and
Portugal.
The feasibility study will help Atalaya to understand the
economic viability of producing cathodes from complex
sulphide ores prevalent in the Iberian Pyrite Belt through
the application of a new leaching process called the E-LIX
System, followed by conventional SX-EW, with a new
industrial scale plant. The production of cathodes has the
potential to generate cost savings by reducing charges
associated with concentrate transportation, treatment
and refining as well as penalties with certain elements,
while also reducing carbon emissions.
36
March 2020, a Royal Decree of 29 March 2020 excluded
mining from essential industries resulting in the halting
of operations at Proyecto Riotinto from 30 March 2020.
As announced on 6 April 2020, further clarifications
were received on the Royal Decree on 3 April 2020 which
reinstated mining on the list of permitted activities and
accordingly, operations at Proyecto Riotinto were author-
ized to recommence.
It is Atalaya’s priority to protect its workforce and the
local communities surrounding both Proyecto Riotinto
and Proyecto Touro. Atalaya has followed and continues
following the requirements and recommendations
issued by the Government of Spain and the regional and
local health authorities at all times to reduce the risk of
COVID-19 exposure and avoid the spread of the virus.
In order to mitigate the potential operational and finan-
cial impact of COVID-19 resulting from sharply decrease
in commodities prices in the first half of the year, the
Company increased its cash balance from €8.1 million as
at 31 December 2019 to €32.4 million as at 30 June 2020 by
net drawdowns on existing credit facilities. Following the
recoveries of the commodities prices, the Company has
repaid the credit facilities prior to the year-end.
REHABILITATION PROVISION UPDATE
Following the requirement to review the rehabilitation
liability every five years, the Company has updated
during 2020 its estimation of the rehabilitation provision.
The updated liability has considered the impact of the
affected mining area resulted from an increased opera-
tion to 15Mtpa. Further details are given in Note 26 to the
Condensed Consolidated Financial Statements.
CORPORATE UPDATES 2020
On 7 May 2020, the Company announced that the Junta
de Andalucía had issued a favourable resolution (the
“Resolution”) which validates the Unified Environmental
Authorisation (the “AAU”) of Proyecto Riotinto. The Reso-
lution ends the legal process announced by the Company
on 26 September 2018 in relation to the judgement made
by the Tribunal Superior de Justicia de Andalucía (“TSJA”)
in connection with the AAU.
On 21 October 2020, Atalaya announced that it had
entered into a definitive purchase agreement to acquire
100% of the Masa Valverde polymetallic project located
in Huelva (Spain) through the acquisition of 100% of
Cambridge Minera Espana S.L., a Spanish company for
€1.4 million payable in two instalments. Masa Valverde
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Operational Review 37
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 Basis of Reporting. The Company is aware
that the COVID-19 pandemic may still have further effects
or impact 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 2021 is as
follows:
Guidance
2021
Actual
2020
Guidance
2020
ORE PROCESSED
(million tonnes)
15.1
14.8
14.0 - 15.0
CONTAINED COOPER (tonnes)
52,000-54,000
55,890
55,000 - 58,000
Copper head grade for 2021 is budgeted to average 0.43%
copper, with a recovery rate of approximately 84%. Cash
operating costs for 2021 are expected to be in the range of
$2.25/lb – $2.35/lb. AISC for 2021 is expected to be in the
range of $2.50/lb – $2.65 /lb copper payable. In addition
the Company expects to spend approximately €17 million
in 2021 as part of the project to increase the capacity of
the tailing dam. AISC are presented net of the one-off
project to increase the capacity of the tailing dam.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Operational Review 38
FINANCIAL
REVIEW
INCOME STATEMENT
The following table presents a summarised consolidated income statement for the twelve months period ended 31
December 2020, with comparatives and comparison with the twelve months ended 31 December 2019.
(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 (loss)/gain
Net finance cost
Tax charge
Profit for the year
Twelve months ended
31 Dec 2020
Twelve months ended
31 Dec 2019
252,784
(176,300)
(6,854)
(1,661)
(525)
-
67,444
(31,683)
(49)
(3,826)
(144)
(1,352)
30,390
187,868
(115,944)
(6,718)
(3,588)
(373)
88
61,333
(23,025)
(1,694)
350
(37)
(6,207)
30,720
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review Revenues for FY2020 amounted to €252.8 million (FY2019:
€187.9 million).
Copper concentrate production during FY2020 was
256,001 tonnes (FY2019: 195,072 tonnes) and 258,021
tonnes of copper concentrate were sold in the same
period (FY2019: 185,545 tonnes). The increased volumes
resulted from the higher processing levels following
completion of the expansion ramp up at the end of 2019.
The realised price for the twelve-months period in 2020
was $2.70/lb copper compared to $2.73/lb copper in the
same period of 2019. Concentrates were sold under offtake
agreements in place. The Company did not enter into any
hedging agreements in either 2020 or 2019.
Operating costs for FY2020 amounted to €176.3 million,
compared to €115.9 million in FY2019. Higher costs in 2020
were mainly attributable to the increase in production
volumes and cash costs.
Cash costs of US$1.95 /lb payable copper for FY2020,
were higher than $1.80/lb payable copper in the same
period last year. AISC excluding investment in tailings
dam previously reported as sustaining capex for FY2020
was US$2.21 /lb payable copper compared to US$2.14/lb
payable copper in the FY2019.
39
Sustaining capex for FY2020, included in capital
expenditure, amounted to €5.5 million (FY2019:
€9.8 million). Sustaining capex mainly accounted for
enhancements in processing systems. In addition, the
Company invested €11.0 million in the project to increase
the tailings dam.
Corporate costs for FY2020 were €6.9 million, compared to
€6.7 million for FY2019.
Exploration costs related to the Proyecto Riotinto for
FY2020 amounted to €1.7 million, compared to €3.6 million
in the same period last year. Lower costs related to a
decrease in drilling during 2020.
Care and maintenance costs related to the Proyecto
Riotinto for FY2020 amounted to €0.5 million, compared to
€0.4 million for FY2019.
EBITDA for FY2020 amounted to €67.4 million, compared to
EBITDA of €61.3 million for FY2019.
Depreciation, amortisation and impairment of assets
amounted to €31.7 million for FY2020 (FY2019: €23.0 million).
Higher depreciation costs were mainly driven by the increase
of capex for 15 Mtpa Expansion Project which has been fully
operational since January 2020. During 2020 no impairment
charge was recognised (FY19: €6.9 related to Touro).
Net finance costs for FY2020 amounted to €144k (FY2019:
negative €37k).
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review 40
CASH COST METHODOLOGY
During the last quarter of 2020 Atalaya carried out an
exhaustive analysis on the methodology applied to its
operating costs reported through the year, with the main
purpose of providing enough and consistent information
to the market to assess the operating cash costs and All In
Sustaining Costs (“AISC”) of Proyecto Riotinto.
As a result of the analysis, management has changed the
methodology used when calculating AISC in previous
quarters to exclude one off projects, such as the increase
in the capacity of the tailing dam. The following tables
provide a reconciliation between the AISC reported and
the adjustments to make the information comparable.
AISC ($/lb)
AISC reported
Sustaining capex related to tailing dam
Normalised AISC costs
Q1 2020
Q2 2020
Q3 2020
Q4 2020
FY2020
$2.27
($0.06)
$2.21
$2.22
($0.11)
$2.11
$2.29
($0.09)
$2.20
$2.36
$2.21
-
-
$2.36
$2.21
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review ALTERNATIVE PERFORMANCE MEASURES
41
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 there-
fore they may not be comparable
to similar measures presented by
other companies. These meas-
ures are intended to provide
additional information and should
not be considered 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
operating costs, and off-site costs
including treatment and refining
charges (“TC/RC”), freight and
distribution costs net of by-product
credits. Cash Cost per pound of
payable copper is consistent with the
widely accepted industry standard
established by Wood Mackenzie and
is also known as the C1 cash cost.
AISC per pound of payable copper
includes the C1 Cash Costs plus
royalties and agency fees, expend-
iture 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 premiums 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.
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 2020
31 Dec 2019
399,611
66,853
815
37,767
505,046
350,199
31,508
123,339
154,847
505,046
379,077
54,229
1,924
8,077
443,307
317,456
65,219
60,632
125,851
443,307
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review 42
ASSETS
LIABILITIES
Total assets were €505.0 million as at 31 December 2020,
compared to €443.3 million as at 31 December 2019, an
increase of €61.7 million. The Group’s significant assets are
its mining rights and mining plant at Proyecto Riotinto.
Non-current assets increased mainly due to the tailing
dams project and enhancements in processing systems
and also the increase in the rehabilitation provision.
Other current assets as at 31 December 2020 amounted
to €66.9 million (2019: €54.2 million), out of which €43.2
million (2019: €32.8 million) related to trade and other
receivables and €23.7 million (2019: €21.3 million) related
to spare parts and ore in stockpile classified as inventories.
Trade and other receivables comprise €20.3 million
of sales of copper concentrate receivables from third
parties (2019: €8.8 million), €4.0 million (2019: €8.9 million)
related to sales of copper concentrate receivables from
related parties, €15.8 million (2019: €14.4 million) related
to VAT due from authorities in Spain and Cyprus; €2.5
million (2019: €0.6 million) related to prepayments and
other current assets amounted to €0.6 million (2019: €0.1
million).
Non-current liabilities stood at €31.5 million as at 31
December 2020 compared to €65.2 million as at 31
December 2019. Non-current liabilities mainly represent
the rehabilitation provision amounting to €24.6 million as
at 31 December 2020 (2019: €6.6 million). In addition to the
rehabilitation provision, non-current liabilities included
the Deferred Consideration to Astor of €nil million (2019:
€53.0 million), the long-term portion of leases following
the adoption of IFRS 16 of €4.8 million (2019: €5.3 million),
legal provisions 0.6 million (2019: €0.4 million), and trade
payables of €1.4 million (2019: €13k).
The decrease in non-current liabilities is mainly due to
the reclassification of the Deferred Consideration of €53
million from non-current to current liabilities (Note 28).
This was partly offset by the increase in the updated
rehabilitation provision, which increased from €6.6 million
as at 31 December 2019 to €24.6 million as at 31 December
2020 (Note 26).
Current liabilities amounted to €123.3 million at 31
December 2020 (2019: €60.6 million). Current liabilities
balance is comprised of the Deferred Consideration to
Astor €53.0 million (2019: €nil million) and trade and other
payables amounting to €68.4 million (2019: €57.5 million)
of which €63.9 million related to suppliers (2019: €52.4
million); €4.4 million related to accruals (2019: €4.9 million)
and €0.1 million (2019: €0.3 million) related to other current
payables. Other current liabilities include the short-term
portion of leases and current tax liabilities.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review 43
LIQUIDITY AND CAPITAL RESOURCES
Atalaya monitors factors that could impact its liquidity
as part of the Company’s overall capital management
strategy. Factors that are monitored include, but are not
limited to, the market price of copper, foreign currency
rates, production levels, operating costs, capital and
administrative costs.
The following is a summary of Atalaya’s cash position as at
31 December 2020 and 2019, and cash flows for the twelve
months ended 31 December 2020 and 2019.
LIQUIDITY INFORMATION
(Euro 000’s)
31 December 2020
31 December 2019
Unrestricted cash and cash equivalents at Group level
Unrestricted cash and cash equivalents at Operation level
Restricted cash
Working capital (deficit)/surplus
24,519
13,248
-
(17,904)
1,730
6,347
-
3,598
Unrestricted cash and cash equivalents as at 31 December 2020 increased to €37.8 million from €8.1 million at 31 December
2019. The increase in the cash balance is mainly as a result of the cash flows from operating activities for the period 2020.
Cash balances are unrestricted and include balances at corporate and operational level.
The Directors consider the existing levels of the commodity prices and the current liquidity position mitigate any potential
financial risks linked to the liquidity position of the Company.
OVERVIEW OF THE GROUP’S CASH FLOWS
(Euro 000’s)
Cash flows from operating activities
Cash flows used in investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Twelve months ended
31 Dec 2020
Twelve months ended
31 Dec 2019
59,090
(30,160)
760
29,690
37,934
(62,351)
(576)
(24,993)
Cash and cash equivalents increased by €29.7 million in the twelve months period ended 31 December 2020. This increase
was due to cash from operating activities amounting to €59.1 million, cash used in investing activities amounting to €30.2
million and cash generated by financing activities totalling €0.8 million.
Cash generated from operating activities before working capital changes was €64.6 million. Atalaya increased its trade
receivables by €10.4 million, its trade payables balance in the period by €11.7 million and its inventory levels by €2.2 million.
Investing activities in 2020 amounted to €30.2 million, mainly relating to sustaining Capex.
Financing activities in 2020 amounted to €0.8 million, mostly due to the impact of share issuances from the execution of
share options.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review 44
FOREIGN EXCHANGE
In FY2020, Atalaya recognised a foreign exchange loss of €3.8 million (FY2019 gain: €0.4 million). The foreign exchange loss
mainly related to variances in EUR and USD conversion rates during the period as all sales are settled and occasionally held
in USD.
The following table summarises the movement in key currencies versus the EUR:
Twelve months ended 31 Dec 2020
Twelve months ended 31 Dec 2019
Average rates for the periods
GBP – EUR
USD – EUR
Spot rates as at
GBP – EUR
USD – EUR
0.8897
1.1422
0.8990
1.2271
0.8777
1.1195
0.8508
1.1234
During 2020 neither 2019, Atalaya did not have any currency hedging agreements.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review 45
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 remaining 49% of the
issued capital of ARM. At the time
of the acquisition, the Group signed
a Master Agreement (the “Master
Agreement”) with Astor Management
AG (“Astor”) which included a deferred
consideration of €43.9 million (the
“Deferred Consideration”) payable as
consideration in respect of the acquisi-
tion 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,
sustaining capital expenditure, any
senior debt service requirements
and up to US$10 million per annum
(for non-Proyecto Riotinto related
expenses)) to pay the consideration
due to Astor (including the Deferred
Consideration and the amount of €9.1
million payable under the Loan Assign-
ment). “Excess cash” is not defined in
the Master Agreement leaving ambi-
guity 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”. The Company and Astor have
now exchanged statements of case to
set out their formal position. The trial
is listed to be heard from 21 February
2022 (the “Trial”). Following the filing
of the statements of case for the Trial,
Astor applied to Court seeking an early
determination (without the need for
a full trial) of the dispute in relation
to the “Excess Cash” (the “Summary
Judgment application”). The Summary
Judgment application will be heard
on 14-15 June 2021. Astor will need
to demonstrate (i) Atalaya has no
reasonable prospect of success at Trial:
and (ii) there is no other compelling
reason why the case or issue should be
disposed of at Trial.
As at 31 December 2020, no considera-
tion was paid to Astor. However, during
December 2020 the Board had discus-
sions and considered an early payment
of the Deferred Consideration and the
Loan Assignment provided certain
conditions could be met. Conditions
included among others the execution
of credit facilities agreements to fund
the payment.
The Company classified the liability as
current as at 31 December 2020.
On 15 March 2021, the Company
fulfilled all conditions required by
the Board of Directors and made
the early payment of €53 million to
Astor. The payment was fully funded
by unsecured credit facilities entered
into between December 2020 and
February 2021 at interest rates ranging
from 1,60% to 2,45% and repayable
by 2023 and 2024. The payment of the
Deferred Consideration does not end
the ongoing litigation as the issue as to
whether any residual interest may or
may not be payable remains unre-
solved. Consequently, the Company
continues with these aspects of the
case.
ANNUAL REPORTAtalaya Mining Plc.STRATEGIC REPORT — Financial Review 46
Atalaya Mining Plc. — ANNUAL REPORT 2020
SUSTAINA-
BILITY
REPORT
47
SUSTAINABILITY FRAMEWORK ........................ 48
— SOCIAL DEVELOPMENT .............................. 48
— HEALTH AND SAFETY ................................... 51
— ENVIRONMENT .............................................. 52
48
SUSTAINABILITY
FRAMEWORK
SOCIAL DEVELOPMENT
OVERVIEW
Atalaya Mining is strongly committed to
Corporate Social Responsibility (“CSR”) and
strives for excellence in the way Atalaya´s
operations affect people, the environment, and
communities. In this regard, the management
of the Company, supported by the Board of
Directors, maintains standards and policies
that operate across the whole organisation,
and that demonstrate a strong will to fulfill
stakeholder´s expectations.
SUSTAINABILITY REPORT — Sustainability FrameworkANNUAL REPORTAtalaya Mining Plc. 49
OUR
COMMUNITIES
Atalaya is the most relevant productive
player in its region. As such, the Company
is conscious of its responsibilities towards
the Riotinto Mining Basin and is dedicated
to being a responsible corporate citizen in
all respects. This heightens the importance
of maintaining a focus on adding value to its
mining operations in accordance with the
expectations and needs of its communities.
Thus, dealing with the social and environmental impacts
of its activities in a careful and sensitive manner is essential
to Atalaya´s strategy for supporting the establishment of
sustainable, long-standing operations. Consequently, an
appropriate degree of interaction with all stakeholders is
encouraged. Transparency and mutual trust are the key
values that inform the relations with governments, the
regional or local authorities, the media, the workforce, the
contractors and suppliers, and society in general.
In this regard, the organisation is fully aware of the impor-
tance of open and regular communication with its stake-
holders. The result of this established dialogue is that the
economic, social and environmental impact of the mining
operations in Proyecto Riotinto are generally perceived as
very positive. Notwithstanding this, it is the Company´s
approach to seek further involvement with the objectives
and aspirations of its communities.
These goals are fully integrated with Atalaya Mining´s CSR
plans, which are implemented by its wholly owned Atalaya
Riotinto Foundation. After its fourth full year in operation,
the organisation led by Proyecto Riotinto management
has continued building strong ties with its communities.
Numerous actions and programs have been developed
with the objective of assisting and supporting the Riotinto
Mining Basin communities. Among these, the most
relevant are the efforts devoted to local development, job
creation, and diversification.
During 2020, Atalaya´s foundation has worked in four
areas: Social Support; Culture & Heritage; Local Devel-
opment & Education; and Health, Environment & Sports.
These four areas are implemented in collaboration with
local associations and NGOs, the programs established
with the various municipalities and the own initiatives
managed by our foundation. In total, Atalaya has invested
€0.5 million in 2019 dedicated to all these activities.
SOCIAL SUPPORT
The Foundation is aware of the difficulties that part of the
population living in the mine´s surrounding areas must
deal with, and it assists where possible to alleviate such
social problems. In this regard, the Foundation establishes
collaborations with charities, NGOs and the administration
that addresses such issues. In 2020, Fundación Atalaya has
granted funds to support the activities of Cáritas assisting
disadvantaged families with food, clothing and educa-
tional needs. It has also supported programs of AFA which
assists people with Alzheimer’s Disease and their families.
It has also supported the activities of Athenea Association,
dedicated to providing support to people with various
disabilities. Also, Fundación Atalaya has provided funds
to support the acquisition of a van by a local charity that
will allow transport for various social purposes. Amongst
others, the Foundation has sponsored the local Hospital
SUSTAINABILITY REPORT — Sustainability FrameworkANNUAL REPORTAtalaya Mining Plc. 50
pediatrics area to be decorated for the children,
has participated in a Christmas campaign by
another local NGO to provide presents for every
child in disadvantaged areas of the local towns,
and has contributed to the sponsoring of a
charitable event to collect money for the people
affected by the floods suffered by the town of
Nerva last winter. Finally, the municipality of
Minas de Riotinto has acquired a van for assisting
people with transport difficulties, thanks to the
contribution of Fundación Atalaya.
CULTURE & HERITAGE
The Riotinto Mining Basin is an area of signifi-
cant culture and heritage and it is considered
as strategic by the community to preserve this,
to be able to express itself and attract people
to promote its economy. With this view, the
Company has provided sponsorship to various
cultural associations to support their activities
and events.
In this regard, and in association with the
municipality of Campofrío, the Foundation is
supporting the opening of a Visitor´s Centre
and is financing the construction of a panoramic
viewpoint in the municipality of Berrocal. It has
also supported the publishing of a book released
by Nerva´s historical TV and Radio station and
the republishing of an historical book about the
mining sector in Huelva.
LOCAL DEVELOPMENT & EDUCATION
The development of economic areas that are
not dependent on the mine is one of the main
challenges that the region must address and that
Atalaya regards as its duty to support. This will
be achieved by improving the local infrastruc-
ture, promoting new businesses and improving
education and training for the local population.
With this view the Foundation has started
multiple initiatives: It has established collabora-
tion with the municipality of nearby Zalamea La
Real, to support the project that will restore the
town´s boarding school. In collaboration with
Nerva Town Hall, the Foundation is sponsoring
the town´s English Language School and has
funded the acquisition of new equipment for
the Youth House facilities. Some other initiatives
with Nerva Municipality include collaboration
with the paving of streets and installing LED
bulbs in some of the streetlights. This last action
has also been undertaken with Minas de Riotinto
municipality, which has also constructed new
infrastructure for the town, including a caravan
park and a dog park.
In El Campillo, thanks to the collaboration
between the municipality and the Foundation, a
new scrubbing machine has been acquired, the
Cultural Hall has been air-conditioned, a new
multi-sport facility has been built and there is a
new trail route prepared and signposted.
Due to the unfortunate circumstances of the
COVID-19 pandemic, the Foundation has tempo-
rarily cancelled two of its key initiatives in this
area: “Reto Malacate”, the entrepreneurs contest
to reward the best business project to be settled
in the region; and the school visits program of
the mining region to Atalaya´s facilities.
HEALTH, ENVIRONMENT & SPORTS
Atalaya is interested in promoting a better envi-
ronment and supports a health culture based on
prevention, self-care and the practice of sports.
In this regard, Atalaya´s foundation has devel-
oped or sponsored various initiatives.
This year, and in light of the extraordinary
circumstances arising from the COVID-19
pandemic, the Foundation established an
special aid program to support the local commu-
nities, specifically aimed at financing the acqui-
sition of protection and cleaning equipment by
local municipalities and other local institutions.
The program comprised a €20,000 investment
that was distributed amongst the various local
organisations.
Also, in El Campillo, the company has supported
the project to install a new multi-sport track, and
has provided new sporting material to Nerva´s
municipality. It has also supported Riotinto to
build an open-air gym.
Once again this year, Atalaya has taken part in
the GAVI program (Business Alliance for Child-
hood Vaccination) in collaboration with the
Fundación La Caixa and the Bill & Melinda Gates
Foundation. Atalaya has also sponsored sporting
events throughout the year and sponsors local
sporting teams.
SUSTAINABILITY REPORT — Sustainability FrameworkANNUAL REPORTAtalaya Mining Plc. 51
HEALTH AND
SAFETY
As the global health emergency became clear,
Atalaya acted quickly to protect our work-
force from the spread of Covid-19. Across the
business, we implemented all the appropriate
health, hygiene and distancing measures to
keep our people safe and well, while main-
taining the security and integrity of our opera-
tions to ensure unimpeded economic activity
for our supply chain and flow of essential
products to our customers.
Atalaya periodically tested employees to limit
the spread in the operations, enabling early
detection of any cases, avoiding the risk of
contagion, guaranteeing the health of workers
and enabling production to continue as normal.
At the same time, Atalaya created a committee
to monitor the situation. Key preventive actions
included disinfection, in addition to the usual
cleaning, of common facilities, changing rooms,
nursing and other common use areas; and high-
lighting health information and follow-up work
with the workers’ representatives, through the
monitoring committee.
Regarding Safety, in 2020, the planned
programme of comprehensive action on
health and safety at work was carried out. This
programme has enabled Atalaya to end the
2020 year meeting its goals in terms of occu-
pational accidents and reaching the lowest
numbers of accidents since the start of oper-
ations. This resulted in Index of severity and
frequency rates of 0.13 and 3.81. The Company
has significantly improved its rates compared to
previous years.
In this regard, in 2020, Atalaya received the A.
Baró award for the management of occupa-
tional health and safety from its mutual insur-
ance company, where the work in occupational
risk prevention of companies associated with
the mutual is recognised at a national level.
SUSTAINABILITY REPORT — Sustainability FrameworkANNUAL REPORTAtalaya Mining Plc. 52
During 2020 Atalaya continued with its “zero damage”
policy, reinforcing all the actions that have been taken
and increasing safety in all its operations. As such,
it plans to establish the discipline of field leadership,
through an ambitious programme of audits, preven-
tive observations, inspections and the “Stop and Talk”
methodology.
In addition, with regard to management systems, Atalaya,
after implementation of the OHSAS 18001: 2007 certifi-
cation in 2019, this year has upgraded to the ISO 45001:
2018 standard, with excellent results. Likewise, it passed
the independent audit, demonstrating efficient compli-
ance with the standards and with no Non-Conformances
identified.
The Company has also continued with the formation
of an emergency first-response brigade, made up of
volunteers who are being trained and coached in several
disciplines such as rescue from heights, fire protection
and first aid. Atalaya has also invested in preparing prem-
ises to house specific emergency equipment.
Regarding the management of non-mining waste, in 2020
there has been an increase in the production of waste
from the operation in Proyecto Riotinto. In 2020, 14.1kg/t
of waste of concentrate produced in 2020 was generated in
Proyecto Riotinto, compared to an average of 12.8 kg/t in
previous years, representing a 10% increase in non-mining
waste produced in 2020, mainly in non-hazardous waste
and spare parts. During the year Atalaya has constructed a
new non-hazardous waste facility and specific training in
waste management was provided to the entire staff of the
Company.
ENVIRONMENT
Atalaya received a favourable report in relation to the
Unified Environmental Authorisation (the “AAU”) of Proyecto
Riotinto in January 2020. After a short legal consultation
period exclusively with parties involved in the process
lapses, The Company now has the AAU revalidated with no
impact on the operation.
Water management and mining facilities improvements
have resulted in a 70% decrease in water pollution
recorded prior to the start of Proyecto Riotinto in 2015.
During 2020 Proyecto Riotinto has launched an assess-
ment of its water footprint. This assessment will allow the
Company to implement additional measures to optimize
the water usage of the project.
In terms of air quality, there is a continued decline in
particle levels in the surrounding population, as in the
prior year (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 operations
In 2020, in the towns of Nerva and Riotinto, where air
quality data is available prior to the start of the Proyecto
Riotinto, particle levels were recorded close to the
concentrations of geochemical background in PM10
recorded between the years 2009-2014. Similar results
were obtained in Doñana National Park. The data obtained
in 2020 (a year that was hydrologically very dry, which
facilitates the production of emissions into the atmos-
phere), demonstrates the effectiveness of the atmospheric
particulate study carried out by ARM.
SUSTAINABILITY REPORT — Sustainability FrameworkANNUAL REPORTAtalaya Mining Plc. In 2020, hazardous waste production decreased by 4%
compared to the previous year.
Additionally, during 2020 Atalaya built a recycling plant.
Regarding historical and archaeological heritage, a study
and documentation of the archaeological site at the Look
Out has been completed, providing remarkable informa-
tion about the spatial and chronological definition of the
city of “Urium”, which is one of the most relevant models
of active metallurgical deposits worldwide, since the
Tartessos era. The Tartessos era was at its height during
the Roman period, from the 3rd century B.C. until the end
of the 2nd century A.D.
Planned actions in the conservation of the natural envi-
ronment have been carried out, including the Forest Fire
Prevention Plan, a census of bats and the relocation of
some of the existing populations of “Erica Andevalensis”
(an endemic species to the mining area).
Finally, during the second quarter of 2020, the Carbon
Footprint report for 2019 and 2020 was completed. Subse-
quently, after validation by an external company, it will
be included in the voluntary register of Carbon Footprint
and Reduction Commitment of the Ministry of Ecological
Transition and the Demographic Challenge. The Company
will implement actions to achieve improvements in the
sustainability of its operations.
53
TARGETS FOR 2021:
WATER QUALITY
It is planned to carry out an assessment
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 begin-
ning of the operations in Riotinto, in
2021 the objective is to finalise actions
on air quality improvement in the area
of La Dehesa (located next to the indus-
trial complex of Proyecto Riotinto).
NON-MINING WASTE
The Company has integrated actions
to improve the management of waste
produced in its facilities in order to
continue the downward trend in the
production of non-mining waste and a
more sustainable activity.
NATURAL ENVIRONMENT
During 2021 it is intended to implement
the plan for revegetation and restora-
tion of forest spaces within the scope
of the Project in order to reduce / offset
the Carbon Footprint of the activity.
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 in 2021.
SUSTAINABILITY REPORT — Sustainability FrameworkANNUAL REPORTAtalaya Mining Plc. 54
Atalaya Mining Plc. — ANNUAL REPORT 2020
CORPORATE
GOVERNANCE
REPORT
55
BOARD OF DIRECTORS ........................................ 56
BOARD COMMITTEES ................................................ 71
— CGNCC: CORPORATE GOVERNANCE,
NOMINATING AND COMPENSATION
COMMITTEE REPORT .....................................71
— AFRC: AUDIT AND FINANCIAL
RISK COMMITTEE REPORT ..........................76
— PRC: PHYSICAL RISKS
COMMITTEE REPORT ....................................79
56
BOARD OF
DIRECTORS
The Group and the Company give special attention to the
application of sound corporate governance policies, practices
and procedures. Corporate Governance is the set of procedures
followed for the proper management and administration of the
Group. Corporate Governance governs the relationship between
the shareholders, the Board of Directors and the management
team of a company.
CORPORATE GOVERNANCE CODE
The Quoted Company Alliance
(“QCA”) code is inherent to the
Company´s governance 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’ deal-
ings which is appropriate for a
TSX and AIM listed company.
The Directors 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 ensure the
Company and its employees
have a healthy working envi-
ronment and to ensure the
Company’s culture reflects its
values.
The Company is incorporated
in Cyprus, so it is subject to
Cypriot laws and regulations,
and is subject to the regula-
tions of AIM and TSX, its trading
platforms. There is no conflict
between the Cypriot regula-
tions and the requirements of
AIM and the TSX.
QUOTED COMPANY
ALLIANCE
The QCA is an independent
organisation 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.
Atalaya’s response to these princi-
ples is set out within this Corporate
Governance Report.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 57
Board of Directors
Committees
Audit and Financial Risk
Committee (“AFRC”)
Corporate Governance
Nominating Compensation
Committee (“CGNCC”)
Audit and Financial Risk
Committee (“AFRC”)
SUMMARY OF COMMITTEE
RESPONSIBILITIES:
SUMMARY OF COMMITTEE
RESPONSIBILITIES:
SUMMARY OF COMMITTEE
RESPONSIBILITIES:
✓ Reviews and monitors
financial statements.
✓ Reviews Company’s public
disclosure of financial
information.
✓ Reviews estimates and
judgements that are
material to reported
financial information.
✓ Oversees the auditors’
arrangements and
performance
✓ Reviews internal and
external risks of the
Company.
Dr. Hussein Barma (Chairman)
Mr. Roger Davey
Mr. Stephen Scott
✓ Reviews Directors’
compensation and
performance.
✓ Reviews Corporate
Governance of Atalaya and
practices, independence,
charters’ review, and
structure.
✓ Compensation and
performance of officers of
Atalaya.
✓ Succession planning.
Stephen Scott (Chairman)
Mr. Roger Davey
Dr. Hussein Barma
Mr. Damon Barber
✓ Oversees safety, health,
environment and security
matters of the Company.
✓ Oversees enterprise‐wide
physical risk management.
✓ Reviews compliance
with legal and regulatory
obligations relating to
safety, health, and the
environment.
Dr. Jose Sierra (Chairman)
Mr. Roger Davey
Mr. Stephen Scott
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 58
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 2020 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 resign at the next AGM and offer themselves
for re-election.
ALBERTO LAVANDEIRA
Managing Director and Chief
Executive Officer
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 and 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
Independent
> Years of service ...............................
Since May 2014
ROGER DAVEY
Non-executive Chairman of the
Board
Mr. Davey has over forty years’
experience in the mining industry.
Previous employment included
Assistant Director and Senior Mining
Engineer at NM Rothschild & Sons;
Director, Vice-president and General
Manager of AngloGold’s subsidiaries
in Argentina; Operations Director of
Greenwich Resources Plc, London;
Production Manager for Blue Circle
Industries in Chile; and various
production roles from Graduate
Trainee to Mine Manager, in Gold
Fields of South Africa (1971 to 1978).
Mr. Davey is currently a director of
Highfield Resources Ltd., Central Asia
Metals plc and Tharisa plc.
Mr. Davey is a graduate of the
Camborne School of Mines, England
(1970), with a Master of Science
degree in Mineral Production 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 Engi-
neer (Eur. Ing.) and a Member of the
Institute 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.
> Name ...................................................
> Executive ...........................................
Roger Davey
Executive
> Role ......................................................
> Time commitment ...........................
Chairman Independent
100%
> Years of service ...............................
> 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.
Since May 2010
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% meetings schedule
> Skills .....................................................
Mining experience, operations,
processing, exploration, Capital
markets, UK Market, International
business, leadership, strategic, fund
raising, M&A, governance, project
management.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 59
DAMON BARBER
DR. HUSSEIN BARMA
NEIL GREGSON
Non-executive Director
Non-executive Director
Non-executive Chairman of the
Board
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.
Mr. Barber is a member of the
Corporate Governance Nominating
Compensation Committee.
> Name ...................................................
Damon Barber
> Role ......................................................
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 Govern-
ance Nominating Compensation
Committee.
Non-Independent
> Name ...................................................
> Years of service ...............................
Hussein Barma
Since Sep 2015
> Role ......................................................
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% meetings schedule
> Skills .....................................................
Mining experience, operations,
processing, Capital market,
International business, leadership,
strategic, fund raising, M&A,
governance, project management.
Chair of the AFRC
Independent
> Years of service ...............................
Since Sep 2015
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% of meetings scheduled
> Skills .....................................................
Mining experience, Corporate finance,
finance and accounting, legal, UK
Market, capital market, international
business, leadership, strategic,
fund raising, M&A communications,
sustainability.
Mr. Gregson has over 30 years’ expe-
rience of investing in mining and oil
and gas companies. From 2010 to
2020 he was a Managing Director at
J.P. Morgan Asset Management where,
as a member of the equity team, he
was a portfolio manager investing
in mining and energy companies
globally. Prior to that, from 1990
to 2009 he was Head of Emerging
Markets and Related Sector Funds
(including natural resource funds) at
Credit Suisse Asset Management. Mr.
Gregson previously held various posi-
tions at mining companies, including a
role as a mining investment analyst at
Gold Fields of South Africa.
Mr. Gregson has a BSc (Hons) Mining
Engineering from Nottingham Univer-
sity. He became an associate of the
Institute of Investment Management
and Research of London in 1994. He
holds a Diploma in Business Manage-
ment from Damelin College, Johan-
nesburg (1988) and a Mine Managers
Certificate of Competency, South
Africa (1985).
> Name ...................................................
Neil Gregson
> Role ......................................................
Independent
> Years of service ...............................
Since Feb 2021
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% of meetings scheduled
> Skills .....................................................
Mining experience, Corporate finance,
finance, legal, UK Market, capital
market, international business,
leadership, strategic, fund raising,
M&A communications, sustainability.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 60
JESÚS FERNÁNDEZ
HARRY LIU
Non-executive Director
Mr. Fernandez is head of the M&A
team for Trafigura. He joined Trafigura
in 2004 and has fifteen years of
experience in mining investments
and financing. Previously, he was a
director of Nyrstar, Tiger Resources
Limited, Cadilac Ventures, Anvil
Mining Limited and Iberian Minerals
Corp. plc.
> Name ...................................................
Damon Barber
> Role ......................................................
Non-Independent
> Years of service ...............................
Since Jun 2015
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% meetings schedule
> Skills .....................................................
Mining experience, Capital market,
UK Markets, International business,
Corporate finance, finance and
accounting, legal, leadership,
strategic, fund raising, M&A,
governance.
BSc. Economics - Non-executive
Director
Mr. Liu is a board director of Yanggu
Xiangguang Copper (Shandong,
China), one of the world’s largest
copper smelting, refining and
processing groups.
Mr. Liu has held a number of senior
management and marketing positions
in the mineral and financial industries
in Shanghai and Hong Kong, including
roles as Marketing Manager at BHP
Billiton Marketing AG and Director at
BNP Paribas Asia.
Mr. Liu graduated with a Bachelor´s
Degree in Economics from Zhejiang
University in Zhejiang Province, China.
> Name ...................................................
Harry Liu
> Role ......................................................
Non-Independent
> Years of service ...............................
Since Oct 2010
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% of meetings scheduled
> Skills .....................................................
Commodity trading and financing,
capital market, international
business, leadership, strategic, fund
raising, M&A, governance, project
management, permitting.
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.
> Name ...................................................
Jonathan Lamb
> Role ......................................................
Non-Independent
> Years of service ...............................
Since Sep 2015
Resigned Dec 2020
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% of meetings scheduled
> Skills .....................................................
Mining experience, Capital market,
UK Markets, International business,
Corporate finance, finance and
accounting, legal, leadership,
strategic, fund raising, M&A,
governance.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 61
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 restruc-
turing 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
and the Physical Risk Committee.
> Name ...................................................
Steve Scott
> Role ......................................................
Chair of the CGNCC
Independent
> Years of service ...............................
Since Sep 2015
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% of meetings scheduled
> Skills .....................................................
Mining experience, operations,
processing, exploration, capital
market, international business,
leadership, strategic, fund
raising, M&A, governance, project
management, permitting, CEO.
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 Infrastructures Gaz France.
Dr. Sierra holds a Ph.D. in Mining from
the University of Madrid. He obtained
a DIC at the Royal School of Mines
(Imperial College) and is an elected
member of the Royal Academy of
Doctors of Spain.
Dr. Sierra is the Chair of the Physical
Risk Committee.
> Name ...................................................
José Sierra López
> Role ......................................................
Chair of the PRC
Independent
> Years of service ...............................
Since Oct 2011
> Executive ...........................................
Non‐executive director
> Time commitment ...........................
At least 75% meetings schedule
> Skills .....................................................
Mining experience, operations,
processing, exploration, capital
market, UK Market, international
business, leadership, strategic,
governance, project management,
permitting.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 62
MANAGEMENT
ALBERTO LAVANDEIRA
CÉSAR SÁNCHEZ
ENRIQUE DELGADO
Chief Financial Officer
Former CFO of companies in mining
and financial sectors; including 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 ...................................................
César Sánchez
> Role ......................................................
Chief Financial Officer
> Years of service ...............................
Since June 2016
> Executive ...........................................
Executive
> Time commitment ...........................
100%
> Skills .....................................................
Mining experience, Capital
markets, Canada and UK Markets,
International business, Corporate
finance, finance and accounting,
legal, leadership, strategic, fund
raising, M&A, governance.
Managing Director and Chief
Executive Officer
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 and 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.
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 metallurgist 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 Insti-
tute of Sevilla, Spain.
> 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,
governance, project management
and permitting.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 63
The Company requires its Directors to keep themselves
professionally up-to-date and familiar with its articles and
charters.
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-inde-
pendent, 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 rectify this and
ensure that the composition of the Board returns to having
at least half independent Directors. If at any time the
Chairman of the Board is not independent, the Board shall
consider possible steps and processes to ensure that lead-
ership is provided for the Board’s independent Directors.
This ensures that all Board discussions or decisions have
the benefit of outside views and experience, and that at
least half of the non-executive Directors are free of any
interests or influences that could or could reasonably be
perceived to materially interfere with the Director’s ability
to act in the best interests of the Company.
At least annually, the Board shall, with the assistance of the
CGNC Committee, determine the independence of each
director and the independence of each AFRC member.
In the opinion of the Board, all Directors should bring
specific skills and experience that add value to the
Company. The balance of skills and experience of the
Board is to be regularly reviewed by the CGNC Committee.
When considering the potential reappointment of an
existing Director, the Board will consider the individual’s
performance as well as the skills and experience mix
required by the Board in the future.
When considering vacancies, the Board will 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 manage-
ment, generally through the CEO, to pursue 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.
BOARD APPOINTMENTS
The Board is appointed by the shareholders and Directors
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
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.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 64
The Board has the final responsibility for the successful
operations of the Company. The Board must ensure that
management has in place appropriate processes for strategic
planning and risk assessment, management and internal
control and monitor performance against benchmarks. 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.
The Board is responsible for guiding and monitoring the
business and the affairs of the Company. The Company
recognises the importance of the Board in providing
a sound base for good corporate governance in the
operations of the Company. The Board must at all times
act honestly, fairly and diligently in all respects in accord-
ance with the law applicable to the Company. Further-
more, the Board will at all times act in accordance with all
Company policies in force.
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 11 Board
meetings in which a wide array
of subjects was dealt with.
When needed, its professional
advisors are invited to attend
meetings to provide input into
legal and financial matters.
Atalaya has also had four
Physical Risk Committee
meetings, six Audit and
Financial Risk Committee
meetings and three Corporate
Governance, Nominating and
Compensation Committee
meetings.
These committee meetings
were held to deal with specifics
and then a summary of those
meetings was reported to the
Board of Directors. A summary
of the topics discussed at Board
and Committee meetings
included:
Health and safety, reporting
of accidents and reviewing
policy to look for improve-
ments including giving the go
ahead on a restructuring of
the safety department.
Operational, discussed all the
operational information and
data.
Quarterly reports, annual
report and other deliverables
to the Market.
Re-election of Directors.
Risk Management, Atalaya
had a reassessment of risk
and the areas that changed
were updated.
Board and committees’
performance.
Monitoring of expan-
sion, review of growth
opportunities/acquisitions.
Financial, reviewed figures
such as cost, capital invest-
ment, budgets, etc.
The Board would like to thank the
committees that have helped the
Board reach its conclusions.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 65
THE ROLE OF INDIVIDUAL
DIRECTORS
and is not to be discussed outside the boardroom. It is
improper to disclose it, or allow it to be disclosed, without
appropriate authorisation.
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 of the Company, particularly in the areas
of ethics and culture including a clear and appropriate
strategic direction.
» Accountability to key stakeholders, particularly
ROLE OF THE CHAIRMAN
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:
shareholders.
» Chair Board, annual and extraordinary meetings;
» Oversight of all control and accountability systems
including all financial operations and solvency, risk
management and compliance.
» an effective senior management team and appropriate
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 circum-
stances, Directors are expected to attend at least 75%
of regularly scheduled Board and committee meetings.
The CGNC Committee will review the circumstances
that prevent any director from achieving the minimum
level and report its findings to the Board.
» Addressing issues in a confident, firm and friendly
manner but also ensure that others are given a reason-
able 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 discus-
sions and deliberations. Similarly, all confidential informa-
tion received by a Director in the course of the exercise of
the Director’s duties remains the property of the Company
» 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
Company´s code of conduct
» The primary spokesperson and channel of communi-
cation 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.
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 strat-
egies, 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.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 66
The CEO must have the industry knowledge and credibility
to fulfil the requirements of the role.
The CEO will manage a team of executives responsible for
all functions contributing to the success of the Company.
The tasks of the CEO shall include but not restricted to:
» Develop with the Board, implement and monitor the
short- medium- and long-term strategic and financial
plans for the Company to achieve the Company’s vision
and overall business objectives;
» Develop all financial reports, and all other mate-
rial reporting and external communications by the
Company, including material announcements and
disclosure, in accordance with the Company’s Share-
holder Communication Policy;
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:
» Manage the appointment of the Chief Operating Officer
(“COO”), CFO, Company Secretary and other specific
senior management positions;
» Notifying the Directors in writing in advance of a
meeting of the Board as specified in the Constitution
and the Board Charter;
» Develop, implement and monitor the Company’s risk
management practices and policies;
» Recording, maintaining and distributing the minutes of
all Board and Board Committee meetings as required;
» Preparing for and attending all annual and extraordi-
nary general meetings of the Company;
» Overseeing the Company’s compliance programme and
ensuring all Company legislative obligations are met;
» Ensuring all requirements of regulatory bodies are fully
met; and providing counsel on corporate governance
principles and Director liability.
» Consult with the Chairman and the Company Secre-
tary in relation to establishing the agenda for Board
meetings;
» Agree with the Chairman their respective roles in rela-
tion to all meetings (formal and informal) with share-
holders 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);
» 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 manage-
ment 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 busi-
ness liaisons;
» Carry out the day-to-day management of the Company.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 67
BOARD DIVERSITY AND BALANCE
Atalaya recognises the need to have a diverse board so
that varying points of view can be brought to the board
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.
Name
R. Davey
Executive
Gender
Nationality
Years of service
Independent Non-executive Chairman
Male
British
Since May 2010
A. Lavandeira
Chief Executive Officer
D. Barber
Non-executive Director
Male
Male
Spanish
Since May 2014
American
Since Sep 2015
H. Barma
Independent Non-executive Director
Male
British
Since Sep 2015
J. Fernández
Non-executive Director
H. Liu
J. Lamb
Non-executive Director
Non-executive Director
Male
Male
Male
Spanish
Since Jun 2015
Chinese
Since Oct 2010
American
Since Sep 2015 to Dec 2020
J. Sierra Lopez
Independent Non-executive Director
Male
Spanish
Since Oct 2011
S. Scott
Independent Non-executive Director
Male
Canadian
Since Sep 2015
The table above comprises directors who served during the 2020 financial year.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 68
BOARD MEETINGS AND ATTENDANCE
The board and Directors do not have fixed time requirements. They are
expected to attend all meetings and be sufficiently prepared with all issues
that arise.
Atalaya’s decisions are predominantly made by achieving a consensus at
Board meetings. In exceptional circumstances, decisions may be taken by the
majority of Board members.
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.
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 11 times in
2020. Meetings occurred in person and by teleconference.
Board
meetings
and
attendance
2020
R. Davey
A. Lavandeira
D. Barber
H. Barma
J. Fernández
H. Liu
J. Lamb
J. Sierra Lopez
S. Scott
BoD
AFRC
CGNCC
PRMC
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3
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. BOARD EVALUATION
The Corporate Governance, Nominating and Compen-
sation Committee determines the compensation of the
directors of Atalaya, reviews the compensation of the
CEO and approves the compensation of the other officers
of Atalaya as recommended by the CEO. The CGNCC
approves the Company´s compensation policy as regards
base, short-term and long-term incentivisation, identifies
potential candidates to become members of the Board
and fulfils the Board´s statutory and fiduciary responsibil-
ities with respect to corporate governance and integrity.
Meetings of the Committee are held not less than twice
a year to enable the Committee to undertake its role
effectively.
CONFLICT OF INTEREST
Where an individual’s private interests are at variance in
any way with the interests of the Company as a whole,
a conflict of interest exists. Further, a conflict of interest
can be seen to exist where a staff member or family
member of staff, has a direct or indirect financial interest
in, or receives any compensation/other benefit from, any
individual or firm. Directors of the Company shall disclose
in writing conflicts of interest to the Board or request to
have entered in the minutes of meetings of the Board the
nature and extent of such interest.
SHARE DEALING AND INSIDER TRADING
Pursuant to Rule 21 of the AIM Rules for Companies, the
Company must have in place a reasonable and effective
dealing policy setting out the requirements and proce-
dures for dealings in the Company’s securities. AIM Rule
21 sets out the minimum provisions which the dealing
policy must contain. A Person Discharging Managerial
Responsibilities (“PDMR”) (any person who is member
of the administrative, management or supervisory body
of the Company or an Officer of the Company) may not
deal in any securities, on his or her own account or for the
account of a third party, directly or indirectly, during: a
close Period; or at any time when he or she is in posses-
sion of Inside Information; or otherwise, where clearance
to deal is not given under the Clearance to Deal policy.
Summary of the provisions of the Criminal Justice Act
1993 and the Market Abuse Regulation (596/2014/EU): In
addition to the rules set out in this Policy, there are two
principal pieces of legislation that PDMRs must be aware
of when dealing in both the securities of the Company and
securities in general. The Criminal Justice Act contains
a criminal offence of insider dealing and Market Abuse
Regulation covers market abuse. In broad terms, there are
69
three insider dealing offences: dealing when in possession
of inside information, encouraging another person to deal
when in possession of inside information; and disclosing
inside information otherwise than in the proper perfor-
mance of the functions of the job. Inside information is
information, which is not public, relates to the securities
in a company, and if it were publicly known would have a
significant effect on the price of the shares/securities of
that company. This may include information about the
Company, but it may also include confidential information
regarding the intentions or prospects of someone the
Company deals with or a competitor of the Company.
COMPLIANCE
The Audit and Financial Risk Committee is responsible
for assisting the Board in overseeing the independence of
the external auditors and fulfilling the Boards’ statutory
and fiduciary responsibilities relating to the compliance of
financial reporting, reviewing and assessing the Compa-
ny’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.
During the year 2020 there have not been identified any
material instances of non-compliance by the Company.
INFORMATION TECHNOLOGY GOVERNANCE
The Board assumes the responsibility for risks related to
the information technology (“IT”) systems and cyber secu-
rity. The IT department implements procedures to avoid
or solve any potential IT business impact.
INTERNAL CONTROL SYSTEM
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 to
eliminate 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 effective-
ness of the internal controls are through the Audit and
Financial Risk Committee and the senior 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
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. 70
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.
CODE OF BUSINESS ETHIC AND CONDUCT
The Company is dedicated to delivering outstanding
performance for investors, customers, consumers and
its Staff. The Company aspires to be the leader in its
field while operating openly, with honesty, integrity and
responsibility and maintaining a strong sense of corporate
social responsibility. In maintaining its corporate social
responsibility, the Company will conduct its business ethi-
cally and according to its values, encourage community
initiatives, consider the environment and ensure a safe,
equal and supportive workplace.
Atalaya is committed to delivering value to its share-
holders and to representing the Company’s growth and
progress truthfully and accurately. The Company also
complies with the spirit as well as the letter of all laws and
regulations that govern shareholders’ rights.
The Company is committed to safeguarding the integrity
of financial reporting and as such will openly promote
and instigate a structure of review and authorisation
designed to ensure the truthful and factual presentation
of the Company’s financial position. The Company will
prepare and maintain its accounts fairly and accurately in
accordance with the accounting and financial reporting
standards that represent the generally accepted guide-
lines, principles, standards, laws and regulations of the
countries in which the Company conducts its business.
MODERN SLAVERY AND HUMAN TRAFFICKING
The Group is committed in respect of working conditions
and to removing potential modern slavery risks relating
to the business. Atalaya ensures that there is no slavery or
human trafficking further along its supply chain and/or in
any part of its business.
ANTI-BRIBERY AND CORRUPTION POLICY
It is Atalaya´s policy to conduct all of its business in an
honest and ethical manner and it takes a zero-tolerance
approach to bribery and corruption. As Atalaya is a UK and
Canadian listed company, it ensures compliance with the
UK Bribery Act 2010 (the “Bribery Act”) and the Corruption
of Foreign Public Officials Act (Canada).
The Anti-bribery and corruption policy applies to all
directors, officers, consultants, temporary workers and
employees of the Group and any other person performing
services for the Group or on its behalf, e.g., due to a
contractual relationship, including but not limited to
distributors, contractors, agents, joint venture and busi-
ness partners, and other intermediaries.
INVESTOR RELATIONS
The senior management of Atalaya is committed to having
regular interaction with investors on the performance of
the Group through presentations and meetings. A broad
range of documentation and information for investors is
available on the Company´s website www.atalayamining.
com and it is updated on a regular basis.
2021 ANNUAL GENERAL
MEETING
Atalaya’s AGM will be held on 24 June 2021 at
11:00h in London (United Kingdom). The business
of the meeting will be conducted in accordance
with regulatory requirements and standards. The
Chairman of the Board and the Chairmen of the
Committees will be available to answer questions
put to them by shareholders at the meeting.
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.
CORPORATE GOVERNANCE REPORT — Board of DirectorsANNUAL REPORTAtalaya Mining Plc. CGNCC
CORPORATE
GOVERNANCE,
NOMINATING AND
COMPENSATION
COMMITTEE REPORT
THE ROLE OF THE
CGNCC
The Company’s Corporate
Governance, Nominating and
Compensation Committee (“CGNCC”)
is, among other things, responsible
for reviewing the performance of the
executives, setting their remuneration,
determining the payment of bonuses,
considering the grant of options under
any share option scheme and, in
particular, the price per share and the
application of performance standards
which may apply to any such grant.
71
MEMBERS
ATTENDANCE
Stephen Scott ....................... 3/3
Damon Barber ...................... 3/3
Hussein Barma ..................... 3/3
Roger Davey ......................... 3/3
Remuneration arrangements are aligned to
support the implementation of the Company
strategy and effective risk management for
the medium to long-term. The remuneration
committee ensures that this is done and
considers the views of shareholders.
The Committee makes recommendations
for Board review. The Committee shall have
such powers and duties as may be conferred
on it from time to time by resolution of the
Board. In addition, the Committee shall
have the following specific functions and
responsibilities:
» The Committee shall periodically review
and, if advisable, approve and recom-
mend for Board approval the compensa-
tion paid to Directors.
» At least annually, and prior to the
nomination or appointment of potential
candidates, the Committee shall review
the competencies, skills, experience and
areas of expertise of the Board on an indi-
vidual and collective basis. Based on this
review, the Committee shall identify areas
where additional competency, skill, expe-
rience or expertise would be of benefit to
Atalaya Mining.
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 72
» 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 effec-
tiveness 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 Committee considers
appropriate.
» The Committee shall oversee the
development of any orientation
programmes for new Directors.
The Committee shall periodically
review any such programme and
approve changes it considers
appropriate.
» The Committee shall periodically
review Atalaya Mining’s corpo-
rate governance practices and
policies. As part of its review,
the Committee shall take regu-
latory requirements and best
practices, including the UK
Corporate Governance Code and
QCA guidelines, into account.
The Committee shall report the
results of its review, including any
recommended changes to existing
practices, to the Board in a timely
manner.
» The Committee will also estab-
lish and maintain a complaints
programme to facilitate (1) the
receipt, retention and treatment
of complaints received by the
Company regarding its Accounting
Standards, violations of the
Code of Business Conduct and
Ethics and the Anti-Bribery and
Corruption Policy, breaches in
compliance with applicable laws
including relating to health and
safety or the environment and
(2) the confidential, anonymous
submission by employees of the
Company of any complaints made
in these areas.
» 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 rela-
tion to his or her performance
goals. The Chief Executive Officer
evaluation shall be conducted in
conjunction with the Chairman of
the Board and shall be presented
to the Board for its review.
» The Committee shall periodically
review, and, if advisable, approve
and recommend for Board
approval the Chief Executive
Officer’s compensation package.
The compensation package
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.
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 73
Options expire five/ten years after grant date and are
exercisable at the exercise price in whole or in part up to
either (i) half on grant and half on the first anniversary
of the grant, or (ii) one third on grant, one third on the
first anniversary of grant and one third on the second
anniversary of grant.
CORPORATE GOVERNANCE
The Directors comply with TSX and AIM regulations and
Cyprus Company Law. The Board remains accountable
to the Company’s shareholders for good corporate
governance.
DIRECTORS’ 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:
Grant
Date
23 Feb
2017
29 May
2019
Expiration
Date
Exercise
Price
Alberto
Lavandeira
22 Feb
2022
28 May
2024
144p
150,000
201.5p
600,000
30 June
2020
29 June
2030
147.5p
400,000
1,150,000
DIRECTORS’ EMOLUMENTS
There were no further option grants between the
balance sheet date and the date of this report.
In compliance with the disclosure requirements of
the listing requirements of AIM and TSX, the aggregate
remuneration paid to the Directors of Atalaya Mining
Plc for the year ended 31 December 2020 is set out
below:
(Euro 000’s)
Short term benefits
Share based payments
31 Dec 2020
Executive Directors
Salary &
Fees
Bonus
Incentive
options*
Bonus
shares**
Total
A. Lavandeira
472
305**
291
Non-executive Directors
R. Davey
D. Barber
H. Barma
J. Fernández
J. Lamb (1)
H. Liu
J. Sierra López
S. Scott
115
60
80
55
53
55
69
86***
1,045
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
305
291
-
-
-
-
-
-
-
-
-
-
1,068
115
60
80
55
53
55
69
86
1,641
1) Mr. Jon Lamb resigned as
director of the Company on
15 December 2020.
(*) The amount relates
to the non-cash expense
recognised in accordance
with IFRS 2 Share-based
payments. On 30 June
2020, the Company granted
400,000 share options to the
Executive Director Alberto
Lavandeira (see Note 23 to
the financial statements).
(**) The amount relates
to the approval of the
performance bonus for
2019 by the Board following
the proposal of the CGNC
Committee. During 2020,
the Group has expensed
the same amount for the
performance bonus of 2019
which is not included in the
table. The amount is yet to
be approved by the Board.
There is no certain or guar-
antee that the Board will
approve a similar amount
for 2020 performance.
(***) Includes €6.7k paid to
the Canadian Pension Plan.
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 74
(Euro 000’s)
Short term benefits
Share based
payments
31 Dec 2019
Salary & Fees
Bonus
Incentive options*
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
457
107
56
76
51
51
51
65
79***
993
325**
173
955
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
107
56
76
51
51
51
65
79
325
173
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).
(**) The amount relates
to the approval of the
performance bonus for
2018 by the Board 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 Board.
There was no certainty or
guarantee at the time that
the Board would approve
a similar amount for 2019
performance.
(***) Includes €3k paid to
the Canadian Pension Plan
for fees related to previous
years.
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 75
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 2020 and 2019, are as follows:
The interest percentage represents the percentage of voting
rights. Between 31 December 2020 and the date of approval
of the consolidated and Company financial statements, the
only change in the Board of Directors’ interests in the share
capital of the Company was the disposal of 12,312 shares
by Mr. Liu.
2020
2019
Name
No. of existing
Ordinary
Shares
% of issued
Share
Capital
No. of existing
Ordinary
Shares
% of issued
Share Capital
A. Lavandeira
240,000
0.17%
210,000
D. Barber(1)
19,578,947*
14.17%
19,578,947*
J. Fernández(2)
30,821,213*
22.31%
30,821,213*
H. Liu(3)
J. Lamb(4)
J. Sierra Lopez
31,118,627**
22.53%
31,150,943**
n/d
26,666
-
18,786,609*
0.02%
26,666
0.15%
14.26%
22.44%
22.68%
13.68%
0.02%
(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. Mr. Lamb
resigned as Director of the
Company on 15 December
2020. The number of shares
as of 31 December 2020 was
4,758,526 shares.
(*) Shares held by the
companies the Directors
represent
(**) includes 412,395 shares
held personally by Mr. Liu
(FY2019: 444,711 shares).
2020 REVIEW
The Committee met three times during 2020, covering a
number of issues. The Company invited Field Fisher into
their meetings to support all decisions from the Committee
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 2020.
Atalaya always bases their remuneration packages in
comparison with their peers in the mining sector and in
companies of similar size and similar financials.
Stephen Scott
Chairman of Corporate Governance,
Nominating and Compensation Committee
24 March 2021
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 76
AFRC
AUDIT AND
FINANCIAL RISK
COMMITTEE REPORT
MEMBERS
ATTENDANCE
Hussein Barma .................................... 5/5
Stephen Scott ....................................... 4/5
Roger Davey ......................................... 5/5
THE ROLE OF THE
AFRC
The Company’s Audit and
Financial Risk Committee
(“AFRC”) is responsible for
ensuring that appropriate
financial reporting procedures
are properly maintained and
reported on, for meeting with
the Group’s auditors and
reviewing their reports on the
Group’s financial statements
and the internal controls and
for reviewing key financial risks.
The AFRC is responsible for assisting the Board in over-
seeing the independence of the external auditors and
fulfilling the Boards’ statutory and fiduciary responsibili-
ties 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.
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 77
» To review and approve the
Company’s hiring policies
regarding partners, employees
and former partners and
employees of the present and
former external auditor of the
Company.
» To review any significant, including
any pending, transactions outside
the Company’s ordinary course of
business and any pending litiga-
tion 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 Govern-
ance, Nominating and Compensa-
tion Committee, any improprieties
or suspected improprieties with
respect to accounting and other
matters that affect financial
reporting or the integrity of the
business.
In addition, the AFRC shall establish
procedures for the receipt, reten-
tion and treatment of complaints
(including “whistleblowing”
complaints) received by Atalaya
Mining regarding risk manage-
ment, legal/regulatory compliance,
accounting, internal accounting
controls or auditing. This is to include
a process for confidential anonymous
complaints by employees or other
stakeholders.
The AFRC comprises three members
all of whom are non-executive and
Independent. The current member-
ship of the committee is Dr. H. Barma
(Chairman), Mr. R. Davey and Mr. S.
Scott. The secretary, CEO and CFO
and external auditors also attend in
when requested by the Committee.
report or performing other audit,
review or attest services and to
recommend to the Board the
compensation of the external
auditor.
» To review the qualifications,
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 disa-
greements between management
and the external auditor regarding
financial reporting.
» To meet with the external auditor
to discuss the annual financial
report and any transaction
referred to in the Board Charter.
» To provide the external auditor
with the opportunity to meet with
the AFRC without management
present at least once per year for
the purpose of discussing any
issues.
» To review the quality and integrity
of the internal controls and
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
management procedures.
To fulfil these functions the AFRC
shall have the following duties and
responsibilities:
» To review the quality and integrity
of all published financial state-
ments and reports including the
annual Management Discussion
and Analysis report (if applicable)
and quarterly earnings press
releases issued by the Company,
prior to the Company publicly
disclosing the information, as
well as all other material contin-
uous disclosure documents and
analysis with a view to making a
recommendation to the Board.
» To review estimates and judge-
ments that are material to
reported financial information and
consider the quality and accepta-
bility 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 regu-
latory requirements related to
financial reporting.
» To review and to recommend to
the Board the nomination and
appointment of the external
auditor for the purposes of
preparing or issuing an auditors’
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 78
2020 REVIEW
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 standards 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 State-
ments, including the possible impact of the COVID-19
outbreak.
» Key accounting and audit matters for 2019 including the
Astor Deferred Consideration and Revenue Recognition.
» An internal evaluation of the AFRC’s performance with
feedback 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
24 March 2021
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 79
PRC
PHYSICAL RISKS
COMMITTEE
REPORT
MEMBERS
ATTENDANCE
Dr José Sierra López (Chair) ................ 3/3
Roger Davey ......................................... 3/3
Stephen Scott ....................................... 3/3
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 responsi-
bility and on external professionals on matters within their
areas of expertise.
Committee members may assume the accuracy of infor-
mation provided by such persons, so long as the members
are not aware of any reasonable grounds upon which such
reliance or assumption may not be appropriate.
Management is responsible for implementing, managing
and maintaining appropriate enterprise-wide safety,
health, environment, security and risk management
systems, policies and procedures, reporting protocols and
internal controls that are designed to ensure compliance
with applicable laws and regulations. Management is also
responsible for the preparation, presentation and integrity
of the information provided to the Committee.
The PRC comprises three members all of whom are
non-executive and Independent. The current membership
of the committee is Dr. J. Sierra (Chairman), Mr. R. Davey
and Mr. S. Scott.
2020 REVIEW
The PRC had three 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 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 suggestions to
continually make our operations safer.
Dr José Sierra López
Chairman of Physical Risks Committee
24 March 2021
CORPORATE GOVERNANCE REPORT — Board CommitteesANNUAL REPORTAtalaya Mining Plc. 80
Atalaya Mining Plc. — ANNUAL REPORT 2020
CONDENSED
CONSOLIDATED
FINANCIAL
STATEMENTS
81
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS .................................... 82
NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL
STATEMENTS ..........................................................87
82
CONDENSED
CONSOLIDATED
FINANCIAL
STATEMENTS
The condensed consolidated financial
statements for the year ended 31
December 2020 have been extracted
from the audited financial statements
of the Group, but have not been
audited. The auditor’s report on the
audited financial statements does
not report on all of the information
contained herein.
Shareholders are therefore advised
that in order to obtain a full under-
standing of the financial position
and results of the Group, these
condensed consolidated financial
statements should be read together
with the full audited financial state-
ments and full audit report.
These condensed consolidated finan-
cial statements and the audited finan-
cial statements, together with the audit
report, are available on the Company’s
website, www.atalayamining.com.
The directors of Atalaya Mining plc:
» take full responsibility for the
preparation of this report and the
correct extraction of the financial
information from the underlying
financial statements;
» are responsible for the mainte-
nance of adequate accounting
records and the preparation of the
financial statements and related
information in a manner that fairly
presents the state of affairs of the
Company;
» are responsible for ensuring that
these financial statements are
prepared in accordance with
International Financial Reporting
Standards and incorporate full
and responsible disclosure in line
with the accounting policies of the
Group, which are supported by
prudent judgement;
» are responsible for the mainte-
nance of effective systems of
internal control, which are based
on established organisational
structure and procedures. These
systems are designed to provide
reasonable assurance as to the
reliability of the financial state-
ments, and to prevent and detect
material misstatement and loss.
Ernst & Young Cyprus Limited has
expressed an unmodified audit
opinion in the Independent Audi-
tor’s Report dated 24 March 2021 on
the audited consolidated financial
statements approved on the same
date by the Directors of the Company.
The report includes the communi-
cation of key audit matters and their
response to the key audit matter
and it is available on the Company’s
website www.atalayamining.com.
The preparation of these condensed
results was supervised by the Chief
Finance Officer, Cesar Sanchez, a
Chartered Accountant (ICAC).
The condensed consolidated finan-
cial statements have been prepared
on a going concern basis, as the
directors believe that the Company
and Group will continue to be in
operation for the foreseeable future.
The consolidated annual financial
statements have been approved by
the Board on 24 March 2021.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
for the year ended 31 December 2020
83
(Euro 000’s)
Revenue
Operating costs and mine site administrative expenses
Mine site depreciation, amortisation and impairment
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 (loss)/gain
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’
Total comprehensive profit for the year
Total comprehensive profit for the year attributable to:
Owners of the parent
Non-controlling interests
The notes on pages 87 to 109 are an integral part of these condensed consolidated financial statements.
Note
2020
2019
4
252,784
187,868
(175,484)
(115,325)
12,13
(31,683)
(23,025)
45,617
49,518
21
6
5
3
8
9
10
11
11
18
(6,854)
(816)
(1,661)
(49)
(525)
35,712
-
(3,826)
197
(341)
31,742
(1,352)
30,390
31,479
(1,089)
30,390
22.9
22.4
(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
30,390
30,720
44
30,434
31,523
(1,089)
30,434
(29)
30,691
37,294
(6,603)
30,691
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 84
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December 2020
(Euro 000’s)
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
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
Lease liability
Deferred consideration
Current liabilities
Trade and other payables
Lease liability
Current tax liabilities
Deferred consideration
Total liabilities
Total equity and liabilities
The notes on pages 87 to 109 are an integral part of these condensed consolidated financial statements.
Note
2020
2019
12
13
17
28
15
16
17
18
19
20
20
21
22
23
24
25
26
23
25
10
26
327,174
59,816
2,715
1,101
8,805
307,815
63,085
500
1,101
6,576
399,611
379,077
23,576
43,191
815
86
37,767
105,435
505,046
13,439
315,714
40,049
(15,512)
353,690
(3,491)
350,199
1,448
25,264
4,796
-
31,508
68,437
592
1,310
53,000
123,339
154,847
505,046
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
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 85
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2020
(Euro 000’s)
Note
AT 1 JANUARY 2019
Profit / (loss) for the year
Change in fair value of financial assets through OCI
18
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
21
21
21
21
21
l
a
t
i
p
a
c
e
r
a
h
S
)
2
(
i
m
u
m
e
r
P
e
r
a
h
S
)
1
(
s
e
v
r
e
s
e
r
r
e
h
t
O
l
d
e
t
a
u
m
u
c
c
A
s
e
s
s
o
l
l
a
t
o
T
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
t
s
e
r
e
t
n
i
y
t
i
u
q
e
l
a
t
o
T
13,372
314,319
12,791
(58,308)
282,174
4,200
286,374
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,323
37,323
(6,602)
30,721
(29)
(29)
-
(29)
-
(29)
37,323
37,294
(6,602)
30,692
5,378
(5,378)
619
-
1,984
(1,984)
1,844
(1,844)
-
619
-
-
249
(478)
(229)
-
-
-
-
-
-
619
-
-
(229)
AT 31 DECEMBER 2019/ 1 JANUARY 2020
13,372
314,319
22,836
(30,669)
319,858
(2,402)
317,456
Profit / (loss) for the year
Change in fair value of financial assets through OCI
18
Total comprehensive income / (loss) for the year
Transactions with owners
Issuance of share capital
Depletion factor
Recognition of share-based payments
Recognition of non-distributable reserve
Other changes in equity
20
21
21
21
21
-
-
-
-
-
-
67
1,395
-
44
44
-
31,479
31,479
(1,089)
30,390
-
44
-
44
31,479
31,523
(1,089)
30,434
-
1,462
-
-
-
-
-
-
-
-
14,155
(14,155)
816
-
2,198
(2,198)
-
31
-
816
-
31
-
-
-
-
-
1,462
-
816
-
31
AT 31 DECEMBER 2020
13,439
315,714
40,049
(15,512)
353,690
(3,491)
350,199
(1) Refer to Note 21
(2) The share premium reserve is not available for distribution.
The notes on pages 87 to 109 are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc.
86
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2020
(Euro 000’s)
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 sharebased payments
Interest income
Interest expense
Unwinding of discounting
Legal provisions
Impairment loss on other receivables
Rehabilitation provision
Unrealised foreign exchange loss on financing activities
Cash inflows from operating activities before working capital changes
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
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
Interest received
Net cash used in investing activities
Cash flows from financing activities
Lease payment
Proceeds from issue of share capital
Net cash from / (used in) financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents:
At beginning of the year
At end of the year
The notes on pages 87 to 109 are an integral part of these condensed consolidated financial statements.
Note
2020
2019
31,742
36,927
12
13
13
21
8
9
9
24
17
16
17
23
25
12
13
18
8
25
19
19
25,766
4,941
985
816
(197)
180
144
238
49
-
(47)
12,575
3,502
6,948
619
(52)
41
40
261
1,694
(18)
2
64,617
62,539
(2,246)
(10,508)
(10,356)
11,747
63,762
(17)
(180)
(4,475)
59,090
(27,046)
(3,311)
-
197
(9,911)
1,159
43,279
(8)
(41)
(5,296)
37,934
(56,453)
(5,449)
(501)
52
(30,160)
(62,351)
(618)
1,378
760
(576)
-
(576)
29,690
(24,993)
8,077
37,767
33,070
8,077
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 87
NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL
STATEMENTS
1. INCORPORATION AND SUMMARY
OF BUSINESS
COUNTRY OF INCORPORATION
Atalaya Mining Plc (the “Company”) was incorporated in
Cyprus on 17 September 2004 as a private company with
limited liability under the Companies Law, Cap. 113 and
was converted to a public limited liability company on 26
January 2005. Its registered office is at 1 Lampousa Street,
Nicosia, Cyprus.
The Company was listed on the Alternative Investment
Market (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 2020.
Additional information about Atalaya Mining Plc is avail-
able at www.atalayamining.com as per requirement of AIM
rule 26.
CHANGE ON NAME AND SHARE CONSOLIDATION
Following the Company’s EGM on 13 October 2015, the
change of the name EMED Mining Public Limited to
Atalaya Mining Plc became effective on 21 October 2015.
On the same day, the consolidation of ordinary shares
came into effect, whereby all shareholders received one
new ordinary share of nominal value £0.075 for every 30
existing ordinary shares of nominal value of £0.0025.
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. The following four
phases determine how the Company may acquire up to
80% of Proyecto Touro:
» Phase 1 – The Company paid €0.5 million to secure the
exclusivity agreement and will continue to fund up to a
maximum of €5 million to get the project through the
permitting and financing stages.
» Phase 2 – When permits are granted, the Company will
pay €2 million to earn-in an additional 30% interest in
the project (cumulative 40%).
» Phase 3 – Once development capital is in place and
construction is underway, the Company will pay €5
million to earn-in an additional 30% interest in the
project (cumulative 70%).
» Phase 4 – Once commercial production is declared, the
Company will purchase an additional 10% interest in
the project (cumulative 80%) in return for a 0.75% Net
Smelter Return (NSR) royalty, with a buyback option.
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, which will provide high potential to the Proyecto
Touro.
On 21 October 2020, the Company announced that it
entered into a definitive purchase agreement to acquire
100% of the shares of Cambridge Mineria España, S.L.
(since renamed Atalaya Masa Valverde, S.L.U.), a Spanish
company which fully owns the Masa Valverde polymetallic
project located in Huelva (Spain). Under the terms of the
agreement Atalaya will make an aggregate €1.4 million
cash payment in two instalments of approximately the
same amount. Initial payment to be executed once the
project is permitted and second and last payment when
first production is achieved from the concession.
The Company’s and its subsidiaries’ activity are to explore
for and develop mining 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 globally.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 88
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The principal accounting policies applied in the prepara-
tion of these consolidated 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 Report-
ing Standards (“IFRS”). IFRS comprise the standards issued
by the International Accounting Standards Board (“IASB”).
The financial statements are presented in euros (€) and all
values are rounded to the nearest thousand (€’000), except
where otherwise indicated.
Additionally, the financial statements have also been
prepared in accordance with the IFRSs as adopted by
the European Union and the requirements of the Cyprus
Companies Law, Cap.113. For the year ending 31 December
2020, the standards applicable for IFRSs 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 revalua-
tion 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 estimates.
It also requires management to exercise its judgment in the
process of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to
the financial statements are disclosed in Note 3.4.
(B) GOING CONCERN
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) disruption in Proyecto Riotinto
including any potential future impact of the COVID-19
pandemic; (ii) market volatility in commodity prices; and
(iii) availability of 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 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.
The analysis included the long term credit lines available to
fund the payment of the Deferred Consideration, reclassi-
fied as at 31 December 2020 as a current liability.
Accordingly, these financial statements have been prepared
based on accounting principles applicable to a going
concern which assumes that the Group 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 will generate sufficient cash and cash equivalents to
continue operating for the next twelve months.
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 2020.
Several other amendments and interpretations apply for
the first time in 2020, but do not have a significant impact
on the consolidated financial statements of the Group.
The Group has not early adopted any standards, interpre-
tations or amendments that have been issued but are not
yet effective:
» Conceptual Framework in IFRS standards.
» IFRS 3: Business Combinations (Amendments).
» IAS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates
and Errors: Definition of ‘material’ (Amendments).
» Interest Rate Benchmark Reform - IFRS 9, IAS 39 and
IFRS 7 (Amendments).
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 have been adopted by the European Union whilst
others are awaiting adoption. The Group intends to adopt
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 89
these new and amended standards and interpretations, if
applicable, when they become effective:
» Amendment in IFRS 10 Consolidated Financial State-
ments and IAS 28 Investments in Associates and Joint
Ventures: Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture.
» IAS 1 Presentation of Financial Statements: Clas-
sification of Liabilities as Current or Non-current
(Amendments).
» IFRS 3 Business Combinations; IAS 16 Property, Plant
and Equipment; IAS 37 Provisions, Contingent Liabilities
and Contingent Assets as well as Annual Improvements
2018-2020 (Amendments).
» IFRS 16 Leases-Cοvid 19 Related Rent Concessions
(Amendment).
» Interest Rate Benchmark Reform – Phase 2 – IFRS 9, IAS
39, IFRS 7, IFRS 4 and IFRS 16 (Amendments).
2.2.2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies in the preparation of these
condensed consolidated financial statements are
consistent with those applied in the preparation of the
Group´s consolidated financial statements for the year
ended 31 December 2020.
The full set of accounting policies can be found in Note 2
and the disclosures on financial risk management and crit-
ical accounting estimates and judgements can be found in
Note 3 to the audited consolidated financial statements,
which are available on the Company’s website www.
atalayamining.com.
3. BUSINESS AND GEOGRAPHICAL
SEGMENTS
BUSINESS SEGMENTS
The Group has only one distinct business segment, that
being mining operations, which include mineral explora-
tion and development.
Copper concentrates produced by the Group are sold
to three offtakers as per the relevant offtake agreements
(Note 28.3).
GEOGRAPHICAL SEGMENTS
The Group’s mining activities are located in Spain. The
sale 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.
2020
(Euro 000’s)
Revenue
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation
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
Cyprus
Spain
Other
Total
30,848
22,324
(2)
(960)
(49)
-
(1)
21,312
(2,036)
221,936
45,277
(31,681)
(2,870)
-
197
(340)
10,583
684
37,284
466,605
(12,271)
(142,545)
2
-
2
25,741
4,941
58,650
-
252,784
(157)
-
4
-
-
-
(153)
-
1,157
(31)
-
-
-
67,444
(31,683)
(3,826)
(49)
197
(341)
31,742
(1,352)
30,390
505,046
(154,847)
25,743
4,941
58,652
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 90
2019
(Euro 000’s)
Revenue
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation
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
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
4. REVENUE
Cyprus
10,335
4,195
(1)
126
(1,694)
25
(1)
2,650
(1459)
Spain
177,533
58,209
(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
Other
-
(1,071)
-
-
-
-
-
(1,071)
-
1,476
(567)
-
-
-
Total
187,868
61,333
(23,025)
350
(1,694)
52
(89)
36,927
(6,207)
30,720
443,307
(125,851)
12,575
3,502
63,499
2020
2019
Segment
€’000
Segment
Copper
Copper
Copper
50,611
Copper
67,012
Copper
119, 491
Copper
€’000
35,766
53,147
98,955
(Euro 000’s)
2020
2019
Revenue from contracts with
customers (1)
Fair value gain/losses relating to
provisional pricing within sales (2)
249,438
188,019
3,346
(151)
Total revenue
252,784
187,868
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 2020 revenue there is a transaction price of €3.0 million
(€0.2 million in 2019) related to the freight services provided by the Group to
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.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 91
5. OTHER INCOME
7. EMPLOYEE BENEFIT EXPENSE
(Euro 000’s)
2020
2019
(Euro 000’s)
Gain on disposal of associate
Release of prior year provision
Other income
-
-
-
-
50
-
38
88
Wages and salaries
Social security and social contributions
Employees’ other allowances
Bonus to employees
2020
15,675
5,054
20
445
2019
14,599
4,997
21
536
21,194
20,153
6. EXPENSES BY NATURE
The average number of employees and the number of
employees at year end by office are:
(Euro 000’s)
Operating costs
Rents (Note 25)
Care and maintenance expenditure
Exploration expenses
2020
150,253
4,509
369
1,661
2019
92,699
4,040
240
3,588
Employee benefit expense (Note 7)
21,194
20,153
Compensation of key management
personnel
Auditors’ remuneration – audit
Other services
Other accountants’ remuneration
2,100
2,105
229
19
111
215
31
152
Average
At year end
Number of
employees
2020
2019
2020
2019
Spain – Full time
482
441
482
446
Spain – Part time
Cyprus – Full time
Cyprus – Part time
6
1
1
6
3
-
6
1
1
7
2
-
Total
490
450
490
455
Consultants’ remuneration
1,174
1,026
8. FINANCE INCOME
Depreciation of property, plant and
equipment (Note 12)
25,744
12,575
Amortisation of intangible assets (Note 13)
4,941
3,502
Travel costs
Share option-based employee benefits
Shareholders’ communication expense
On-going listing costs
Legal costs
Public relations and communication
development
Insurances
Impairment of intangible assets (Note 13)
Impairment loss on other receivables
(Note 17)
140
816
178
235
689
492
112
985
49
371
619
-
369
448
567
-
6,948
1,694
(Euro 000’s)
Interest income
2020
2019
197
197
52
52
Interest income relates to interest received on bank
balances.
9. FINANCE COSTS
(Euro 000’s)
Interest expense:
Other interest
2020
2019
180
17
144
341
40
8
41
89
Other expenses and provisions
1,069
-
Total cost of operation, corporate,
share based benefits, care and
maintenance, and exploration
expenses
Interest expense on lease liabilities
217,069
151,342
Unwinding of discount on mine
rehabilitation provision (Note 24)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 92
10. TAX
(Euro 000’s)
2020
2019
Current income tax charge
(Over)/under provision previous years
Deferred tax related to utilization of
losses for the year (Note 15)
Deferred tax income relating to the
origination of temporary differences
(Note 15)
Deferred tax expense relating to reversal
of temporary differences (Note 15)
3,582
-
777
(3,320)
313
5,158
(302)
256
874
221
1,352
6,207
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
2020
31,742
2019
36,927
3,968
4,616
2,334
662
1,103
4,021
Tax effect of allowances and income not
subject to tax
(3,502)
(7,123)
Over provision for prior year taxes
Effect of higher tax rates in other
jurisdictions of the Group
Tax effect of tax losses brought forward
Deferred tax (Note 15)
Tax charge
-
897
(777)
(2,230)
1,352
(302)
2,797
(256)
1,351
6,207
Tax losses carried forward
As at 31 December 2020, the Group had tax losses carried
forward amounting to €15.4 million from the Spanish
subsidiary for the period 2008 to 2015.
CYPRUS
The corporation tax rate is 12.5%. Under certain condi-
tions interest income may be subject to a defence contri-
bution under Cypriot tax law at the rate of 30%. In such
cases this interest will be exempt from corporation tax.
In certain cases, dividends received from abroad may be
subject to defence contribution at the rate of 17% for 2014
and thereafter. Under current legislation, tax losses may
be carried forward and be set off against taxable income
of the five succeeding years.
Companies which do not distribute 70% of their profits
after tax, as defined by the relevant tax law, within two
years after the end of the relevant tax year, will be deemed
to have distributed as dividends 70% of these profits.
Special contribution for defence at 20% for the tax years
2012 and 2013 and 17% for 2014 and thereafter will be
payable on such deemed dividends to the extent that the
shareholders (companies and individuals) are Cyprus tax
residents 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 2020 and 2019 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.
11. 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)
Parent company
Subsidiaries
2020
(2,842)
34,321
2019
(3,997)
41,320
Profit attributable to equity holders of the
parent
31,479
37,323
Weighted number of ordinary shares for
the purposes of basic earnings per share
(‘000)
137,359
137,339
Basic profit per share (EUR cents/share)
22.9
27.2
Weighted number of ordinary shares for
the purposes of diluted earnings per share
(‘000)
140,511
139,236
Diluted profit per share (EUR cents/share)
22.4
26.8
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. At 31 December 2020, there are 2,787,000 options (Note 21)
and nil warrants (Note 20) (At 31 December 2019: 2,505,250
options and nil warrants) which have been included when
calculating the weighted average number of shares for
FY2020.
93
12. PROPERTY,
PLANT AND
EQUIPMENT
(Euro 000’s)
2020
Cost
d
n
a
d
n
a
L
s
g
n
d
i
l
i
u
b
e
s
u
f
o
t
h
g
R
i
)
5
(
s
t
e
s
s
a
t
n
e
m
p
u
q
e
i
d
n
a
t
n
a
P
l
)
3
(
n
o
i
t
c
u
r
t
s
n
o
c
r
e
d
n
u
s
t
e
s
s
A
i
i
g
n
n
m
d
e
r
r
e
f
e
D
)
1
(
s
t
e
s
s
a
r
e
h
t
O
)
2
(
s
t
s
o
c
l
a
t
o
T
AT 1 JANUARY 2020
46,063
6,421
248,221
16,517
34,013
781
352,016
Additions
-
148
2,278
16,863
7,855
20
27,164
Increase in rehab. provision
17,954(7)
Reclassifications
Advances
-
17
-
-
-
-
-
17,552(4)
(17,552)
-
-
-
-
-
-
-
-
17,954
-
17
AT 31 DECEMBER 2020
64,034
6,569
268,051
15,828
41,868
801
397,151
Depreciation
AT 1 JANUARY 2020
Charge for the year
Disposals
8,257
3,414
391
28,872
565(6)
19,257(8)
-
-
5
AT 31 DECEMBER 2020
11,671
956
48,134
-
-
-
-
6,061
2,467
-
620
44,201
63
5
25,766
10
8,528
688
69,977
52,363
5,613
219,917
15,828
33,340
113
327,174
NET BOOK VALUE AT 31
DECEMBER 2020
2019
Cost
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
(94,230)
-
-
-
-
1
-
(5)
56,872
-
(5)
AT 31 DECEMBER 2019
46,063
6,421
248,221
16,517
34,013
781
352,016
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
-
561
31,629
62
(3)
12,575
(3)
6,061
620
44,201
NET BOOK VALUE AT 31
DECEMBER 2019
37,806
6,030
219,349
16,517
27,952
161
307,815
The above fixed assets are mainly located in Spain.
(1) Includes motor vehicles,
furniture, fixtures and office
equipment which are depreci-
ated over 5-10 years.
(2) Stripping costs
(3) Assets under construc-
tion at 31 December 2020
amounted to €15.8 million
(2019: €16.5 million). It
includes the capitalisation
of costs related sustaining
capital expenses.
(4) Transfers related to
sustaining Capex and the
Tailing Dam Project.
(5) See leases in Note 25.
(6) Depreciation includes an
adjustment of previous year
amounted to €11k.
(7) Increase in lands related
with the rehabilitation provi-
sion amounting to €17,941k
(8) The increase in the
depreciation relate to the
completion of the expansion
project in January 2020 and
the increase of ore processed.
In 2017 the Board
approved an Expan-
sion Project to
increase the plant
capacity to 15Mtpa.
During 2020, 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 2020, the Group
capitalised personnel
costs amounting to
€466k (2019: €953k) in
relation to the Expan-
sion Project.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc.
94
13. INTANGIBLE ASSETS
(Euro 000’s)
2020
Cost
ON 1 JANUARY 2020
Additions
Disposals
AT 31 DECEMBER 2020
Amortisation
ON 1 JANUARY 2020
Charge for the year
Impairment charge (Note 6)
AT 31 DECEMBER 2020
NET BOOK VALUE AT 31 DECEMBER 2020
2019
Cost
ON 1 JANUARY 2019
Additions from acquisition of subsidiary
Additions
AT 31 DECEMBER 2019
Amortisation
ON 1 JANUARY 2019
Charge for the year
Impairment charge (Note 6)
AT 31 DECEMBER 2019
NET BOOK VALUE AT 31 DECEMBER 2019
Permits (1)
Licences, R&D
and Software
Total
(1) Permits include an amount
of €5.0 million that relate to
the Proyecto Touro mining
rights.
(2) Addition resulting from the
acquisition of Atalaya Masa
Valverde SLU.
76,538
1,672(2)
-
78,210
13,808
4,875
-
18,683
59,527
76,538
-
-
76,538
10,370
3,438
-
13,808
62,730
7,610
1,312
(327)
8,595
7,255
66
985
8,306
289
6,026
5,449
(3,865)
7,610
243
64
6,948
7,255
355
84,148
2,984
(327)
86,805
21,063
4,941
985
26,989
59,816
82,564
5,499
(3,865)
84,148
10,613
3,502
6,948
21,063
63,085
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
processing plant.
The ultimate recovery of balances carried forward in
relation to areas of interest or all such assets including
intangibles is dependent on successful development, and
commercial exploitation, or alternatively the sale of the
respective areas.
The Group conducts impairment testing on an annual
basis unless indicators of impairment are not present at
the reporting date. Atalaya assessed its assets concluding
that there are no indicators of impairment for either
Proyecto Riotinto or Atalaya Masa Valverde as of 31
December 2020. Management decided to impair in 2019 all
the investment (€6,948k) related to exploration and other
related expenses of Proyecto Touro due to the existence of
substantial evidence of impairment based on the negative
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 95
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 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. in September 2008. This amount was
fully impaired on acquisition, in the absence of the mining
licence in 2008.
14. INVESTMENT IN JOINT
VENTURE
COMPANY NAME ............................................................................
Recursos Cuenca Minera S.L.
PRINCIPAL ACTIVITIES .................................................................
Exploitation of tailing dams and waste areas resources
COUNTRY OF INCORPORATION ..............................................
Spain
EFFECTIVE PROPORTION OF SHARES HELD
AT 31 DECEMBER 2015 .................................................................
50%
In 2012 ARM entered into a 50/50 joint venture with
Recursos Cuenca Minera S.L. (Rumbo) to evaluate and
exploit the potential of the class B resources in the tailings
dam and waste areas at 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 of the
Class B resources. ARM will fund the initial expenditure of
a feasibility study up to a maximum of €2.0 million. Costs
are then borne by the joint venture partners in accordance
with their respective ownership interests.
The Group’s significant aggregate amounts in respect of
the joint venture are as follows:
(Euro 000’s)
Intangible assets
Trade and other receivables
Cash and cash equivalents
2020
2019
94
2
21
94
2
21
» Trade and other payables
(115)
(115)
» Net assets
Revenue
» Expenses
» Net profit/(loss) after tax
2
-
-
-
2
-
-
-
15. DEFERRED TAX
(Euro 000’s)
Deferred tax asset
AT 1 JANUARY
Deferred tax asset due to losses available against future taxable income (Note 10)
Deferred tax related to utilization of losses for the year (Note 10)
Deferred tax asset due to losses available against future taxable income
overprovision previous years (Note 10)
Deferred tax income relating to the origination of temporary differences (Note 10)
Deferred tax expense relating to reversal of temporary differences (Note 10)
AT 31 DECEMBER
Deferred tax income (Note 10)
Consolidated statement
of financial position
Consolidated income
statement
2020
2019
2020
2019
6,576
-
(777)
-
3,319
(313)
8,805
7,927
-
(256)
-
(874)
(221)
6,576
-
-
777
-
(3,319)
313
-
-
256
-
874
221
(2,229)
1,351
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 96
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
available to carry forward for 5 years against future taxable
income of the Group companies in which the losses arose,
and in Spain €15.4 million (2019: €18.5 million) which
are available to carry forward indefinitely against future
profits. Deferred tax assets have not been recognised in
respect of losses in Cyprus as they may not be used to
offset taxable profits elsewhere in the Group, and due to
the uncertainty in profitability in the near future to support
(either partially or in full) the recognition of the losses as
deferred income tax assets.
16. INVENTORIES
(Euro 000’s)
Finished products
Materials and supplies
Work in progress
2020
2019
8,642
11,024
13,764
1,170
9,266
1,040
23,576
21,330
As at 31 December 2020, copper concentrate produced
and not sold amounted to 12,180 tonnes (2019: 14,201
tonnes). Accordingly, the inventory for copper concentrate
was €8.6 million (2019: €11.0 million). During the year 2020
the Group recorded cost of sales amounting to €175.5
million (2019: €115.3 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.
17. TRADE AND OTHER
RECEIVABLES
(Euro 000’s)
Non-current trade and other receivables
Deposits
Loans
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 28.4)
Other receivables from related parties at amortised cost (Note 28.3)
Deposits
VAT receivable
Tax advances
Prepayments
Other current assets
Allowance for expected credit losses
Total trade and other receivables
2020
2019
48
2,667
2,715
20,304
3,946
56
21
15,826
9
2,507
522
43,191
-
45,906
500
-
500
8,798
8,918
56
26
14,380
7
616
56
32,857
-
33,357
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 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.
The increase in loans is related to an agreement entered
by the Group and Lain Technologies Ltd in relation to the
construction of the Pilot Plan to develop the E-LIX System.
The Loan is secured with the pilot plant, has a grace period
of up to four years and repayment terms depending on
future investments on the system. Amounts withdrawn
bears interest at 2%.
In 2018, the Company recognised a €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 in 2019. Set out below
are the movements of the impairment:
(Euro 000’s)
2020
2019
1 JANUARY
Additions
Impairment
AT 31 DECEMBER
-
49
(49)
-
200
1,494
(1,694)
-
97
18. OTHER FINANCIAL ASSETS
(Euro 000’s)
2020
2019
Financial asset at fair value through
OCI (see (a)) below)
1,187
1,143
Total current
86
42
Total non-current
1,101
1,101
a) Financial assets at fair value through
OCI
(Euro 000’s)
AT 1 JANUARY (1)
Additions (3)
Fair value change recorded in equity
(Note 21)
Reversal of previously impaired
Disposals (2)
2020
2019
1,143
-
44
-
-
71
1,101
(29)
50
(50)
AT 31 DECEMBER
1,187
1,143
(1) The Group decided to recognise changes in the fair value of availa-
ble-for-sale investments in Other Comprehensive Income (‘OCI’).
(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.
Company
name
Principal
activities
Country of
incorporation
Effective proportion of shares
held at 31 December 2020
Explotaciones Gallegas
del Cobre SL
KEFI Minerals Plc
Exploration company
Spain
12.5%
Exploration and
development mining
company listed on AIM
UK
0.19%
Prospech Limited
Exploration company
Australia
0.53%
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 98
19. CASH AND CASH EQUIVALENTS
(Euro 000’s)
Cash at bank and in hand
2020
37,767
2019
8,077
CASH AND CASH EQUIVALENTS DENOMINATED IN THE
FOLLOWING CURRENCIES:
(Euro 000’s)
2020
2019
As at 31 December 2020, the Group’s operating subsidiary
held €250k (FY2019: €250k) as a collateral for bank guaran-
tees, which was recorded as restricted cash (or deposit).
Restricted cash was reclassified to non-current trade and
other receivables (Note 19) since the deposit is considered
to be long term.
Euro – functional and presentation
currency
» Great Britain Pound
» United States Dollar
2,431
2,019
33,317
37,767
2,059
374
5,644
8,077
20. SHARE CAPITAL
Authorised
Nr. of Shares
’000’s
Share capital
£ 000’s
Share Premium
£ 000’s
Total
£ 000’s
Ordinary shares of £0.075 each
200,000
15,000
-
15,000
Issued and fully paid
1 JANUARY 2019
Issue Date
Price (£)
Details
000’s
Euro 000’s
Euro 000’s
Euro 000’s
13,372
314,319
327,691
31 DECEMBER 2019/1 JANUARY 2020
137,340
13,372
314,319
327,691
22 Dec 2020
2.015
Exercised share options (e)
22 Dec 2020
1.475
Exercised share options (e)
22 Dec 2020
1.440
Exercised share options (e)
22 Dec 2020
2.302
Bonus share to former Key management
228
41
499
33
19
3
42
3
491
65
758
81
510
68
800
84
31 DECEMBER 2020
138,141
13,439
315,714
329,153
AUTHORISED CAPITAL
ISSUED CAPITAL
b) On 22 December 2020, the
The Company’s authorised share
capital is 200,000,000 ordinary shares
of £0.075 each.
FY2020
a) On 22 December 2020, the
Company was notified that certain
employees exercised options over
768,250 ordinary shares of £0.075
at a price between £1.44 to £2.015,
thus creating a share premium of
€1,314k.
Company granted a bonus share
to a former Key management of
33,333 ordinary shares of £0.075 at
a price £2.302.
FY2019
No issuances during the twelve
months period ended 31 December
2019.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 21. OTHER RESERVES
(Euro 000’s)
AT 1 JANUARY 2019
Recognition of depletion factor
Recognition of non-distributable reserve
Recognition of distributable reserve
Recognition of share based payments
Change in fair value of financial assets at fair value through OCI (Note 18)
Other changes in reserves
AT 31 DECEMBER 2019
Recognition of depletion factor
Recognition of non-distributable reserve
Recognition of distributable reserve
Recognition of share based payments
Change in fair value of financial assets at fair value through OCI (Note 18)
Other changes in reserves
AT 31 DECEMBER 2020
99
)
4
(
e
v
r
e
s
e
r
-
-
-
l
a
t
o
T
12,791
5,378
1,984
1,844
1,844
-
-
249
619
(29)
249
n
o
i
t
p
o
e
r
a
h
S
e
r
a
h
s
s
u
n
o
B
)
1
(
r
o
t
c
a
f
n
o
i
t
e
p
e
D
l
e
v
r
e
s
e
r
e
u
a
v
r
i
a
F
l
s
t
e
s
s
a
l
i
a
c
n
a
n
i
f
f
o
)
2
(
I
C
O
V
F
t
a
l
e
b
a
t
u
b
i
r
t
s
d
-
n
o
N
i
l
e
b
a
t
u
b
i
r
t
s
D
i
)
3
(
e
v
r
e
s
e
r
6,752
208
5,500
(1,115)
1,446
-
-
-
619
-
-
-
-
-
-
-
-
5,378
-
-
-
-
-
-
-
-
-
(29)
-
-
1,984
-
-
-
-
7,371
208
10,878
(1,144)
3,430
2,093
22,836
-
-
-
816
-
-
-
-
-
-
-
-
14,155
-
-
-
-
-
-
-
-
-
44
-
-
2,198
-
-
-
-
-
-
-
-
-
-
14,155
2,198
-
816
44
-
8,187
208
25,033
(1,100)
5,628
2,093
40,049
(1) Depletion factor reserve: During the twelve month period ended 31 December 2020, the Group has disposed €14.2 million (FY2019: €5.4 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 securi-
ties 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 recorded a distributable reserve in order to comply with the Spanish Corporate Tax Act.
DETAILS OF SHARE OPTIONS OUTSTANDING AS AT 31 DECEMBER 2020:
Grant date
Expiry date
Exercise price £
Share options
23 Feb 2017
29 May 2019
8 July 2019
30 June 2020
Total
22 Feb 2022
28 May 2024
7 July 2024
29 June 2030
AT 1 JANUARY 2020
Granted options during the year
Options executed during the year
31 DECEMBER 2020
1.44
2.015
2.045
1.475
314,000
1,064,500
400,000
1,008,500
2,787,000
Weighted average exercise price £
Share options
1.833
1.475
1.612
1.759
2,505,250
1,050,000
(768,250)
2,787,000
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc.
e
s
i
c
r
e
x
e
e
g
a
r
e
v
a
d
e
t
h
g
e
W
i
£
e
c
i
r
p
e
r
a
h
s
e
g
a
r
e
v
a
d
e
t
h
g
e
W
i
£
e
c
i
r
p
l
y
t
i
l
i
t
a
o
v
d
e
t
c
e
p
x
E
1.440
1.440
51.8%
2.015
2.015
46.9%
2.045
2.045
46.9%
)
s
r
a
e
y
(
e
f
i
l
d
e
t
c
e
p
x
E
5
5
5
l
i
i
d
e
y
d
n
e
d
v
d
d
e
t
c
e
p
x
E
i
l
£
e
u
a
V
r
i
a
F
d
e
t
a
m
i
t
s
E
e
t
a
r
e
e
r
F
k
s
R
i
0.6%
Nil
0.666
0.8%
Nil
0.66
0.8%
Nil
0.66
1.475
1.475
50.32%
10
0.3%
Nil
0.60
e
t
a
D
t
n
a
r
G
23 Feb
2017
29 May
2019
8 July
2019
30 June
2020
The volatility has been estimated based on the under-
lying volatility of the price of the Company’s shares in the
preceding twelve months.
100
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 30 June 2020, the Company announced a grant
of 1,050,000 share options (the “Options”) to Persons
Discharging Managerial Responsibilities (“PDMRs”) and key
management in accordance with the Company’s approved
Share Option Plan 2020 (the “Option Plan”). The Options
expire ten years from the date of grant (30 June 2030), have
an exercise price of 147.5 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
Discharging 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.
On 22 December 2020, the Company was notified that
certain employees exercised options over 768,250 ordi-
nary shares of £0.075 at a price between £1.44 to £2.015
(Note 20 (b)).
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
capitalisation of the Company’s reserves, a subdivision or
consolidation of the ordinary shares, a reduction of share
capital and offers or invitations (whether by way of rights
issue or otherwise) to the holders of ordinary shares.
The estimated fair values of the options were calculated
using the Black Scholes option pricing model. The inputs
into the model and the results are as follows:
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc.
101
22. NON-CONTROLLING INTEREST
23. TRADE AND OTHER PAYABLES
(Euro 000’s)
Opening balance
Share of results for the year
Closing balance
2020
(2,402)
(1,089)
(3,491)
2019
4,200
(6,602)
(2,402)
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. The significant financial informa-
tion with respect to the subsidiary before intercompany
eliminations as at and for the year ended 31 December
2020 is as follows:
(Euro 000’s)
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity
Revenue
2020
5,111
706
-
9,697
(3,879)
-
2019
5,096
580
-
8,345
(2669)
-
Loss for the year and total
comprehensive income
(1,210)
(7,336)
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.
(Euro 000’s)
2020
2019
Non-current trade and other payables
Other non-current payables
Government grant
1,435
13
1,448
-
13
13
Current trade and other payables
Trade payables
63,946
52,395
Land options and mortgage
Accruals
VAT payable
Other
-
4,355
60
76
282
4,860
-
-
68,437
57,537
Other non-current payables are related with the acquisi-
tion of Atalaya Masa Valverde former Cambridge Minería
España, SL (see Note 27).
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.
Trade payables are non-interest-bearing and are normally
settled on 60-day terms.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 102
24. PROVISIONS
(Euro 000’s)
1 JANUARY 2019
Additions
Revision of provision
Finance cost (Note 9)
31 DECEMBER 2019/1 JANUARY 2020
Additions
(Reduction) / addition of provision
Finance cost (Note 19)
31 DECEMBER 2020
(Euro 000’s)
Non-Current
Current
Total
2020
25,264
-
2019
6,941
-
25,264
6,941
Key numbers
Undiscounted liability at the end of the Project (1)
Undiscounted liability affected as at reporting date
Life of mine (3)
Restoration period
Average inflation rate used
Discount rate (2)
Discounted liability
Legal
Rehabilitation
127
284
(23)
-
388
311
(73)
-
626
6,392
138
(18)
41
6,553
-
17,941
144
24,638
Total
6,519
422
(41)
41
6,941
311
17,868
144
25,264
REHABILITATION PROVISION
Rehabilitation provision represents the estimated cost
required for adequate restoration and rehabilitation upon
the completion of production activities. These amounts
will be settled when rehabilitation is undertaken, generally
over the project’s life.
During 2020, Management engaged an independent
consultant to review and update the rehabilitation liability.
The updated estimation includes the expanded capacity
of the plant and its impact on the mining project. The key
comparative figures are:
Unit
Euro
Euro
Years
Years
%
%
Euro
2020
2019
31,007,410
25,334,377
13.8
20
0.8800%
1.3580%
11,617,030
7,870,243
13.8
13.8
1,50%
1.8700%
24,638,008
6,553,094
(1) Total undiscounted liability in 2019 was €9.3 million with an extra 25% provision
(2) The discount rate used in the calculation of the net present value of the liability as at 31 December 2020 was 1.36% (2019: 1.87%), which is the average of the
15-year Spain Government Bond rate from 2016 to 2020.
(3) 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 processing plant.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 103
The expected payments for the rehabilitation work are
as follows:
(Euro 000 ’s)
Between
1 – 5 Years
Between
6 – 10 Years
Between
10 – 20 Years
Expected payments for rehabilitation of the mining site, discounted
4,704
3,247
16,687
LEGAL PROVISION
The Group has been named as defendant in several legal
actions in Spain, the outcome of which is not determi-
nable as at 31 December 2020. Management has reviewed
individually each case and made a provision of €626k
(€388k in 2019) for these claims, which has been reflected
in these consolidated financial statements. (Note 30).
25. LEASES
(Euro 000’s)
31 Dec 2020
31 Dec 2019
Non-current
Leases
Current
Leases
4,796
4,796
592
592
5,265
5,265
588
588
The Group entered into lease arrangements for the renting
of land, laboratory equipment, a building and vehicles
which are subject to the adoption of all requirements of
IFRS 16 Leases. 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.
AMOUNTS RECOGNISED IN THE STATEMENT OF
FINANCIAL POSITION AND PROFIT OR LOSS
Set out below are the carrying amounts of the Group’s
right-of-use assets and lease liabilities and the movements
during the period:
(Euro 000’s)
AS AT 1 JANUARY 2020
Additions
Depreciation expense
Interest expense
Payments
AS AT 31 DECEMBER 2020
Right – of-use assets
Lands and
buildings
Vehicles
Laboratory
equipment
5,750
135
(469)
-
-
5,416
44
-
(15)
-
-
29
Total
6,031
135
(553)
-
-
Lease
liabilities
5,853
135
-
17
-617
237
-
(69)
-
-
168
5,613
5,388
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 104
The amounts recognised in profit or loss, are set out
below:
(Euro 000’s)
Twelve month ended 31 Dec 2020
Twelve month ended 31 Dec 2019
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 (Note 6).
Depreciation expense regarding leases amounts to €0.5
million (2019: €0.3) for the twelve month period ended 31
December 2020.
The duration of the land and building lease is for a period
of twelve years. Payments are due at the beginning of
the month escalating annually on average by 1.5%. At 31
December 2020, the remaining term of this lease is twelve
years.
The duration of the motor vehicle and laboratory equip-
ment 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 2020, the remaining term
of this motor vehicle and laboratory equipment lease is
two years and two 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
(553)
(17)
(570)
(391)
(8)
(399)
(Euro 000’s)
Lease liability
BALANCE 1 JANUARY 2020
Additions
Interest expense
Lease payments
BALANCE AT 31 DEC 2020
BALANCE AT 31 DEC 2020
» Non-current liabilities
» Current liabilities
5,853
135
17
(617)
5,388
4,795
592
5,388
31 Dec 2020
31 Dec 2019
592
2,068
2,728
-
5,388
592
2,068
2,728
5,388
588
2,134
3,131
-
5,853
588
2,134
3,131
5,853
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 105
26. DEFERRED CONSIDERATION
The Company classified the liability as current as at 31
December 2020.
In September 2008, the Group moved to 100% owner-
ship of Atalaya Riotinto Mineral S.L. (“ARM”) (and thus
full ownership of Proyecto Riotinto) by acquiring the
remaining 49% of the issued capital of ARM. At the time of
the acquisition, the Group signed a Master Agreement (the
“Master Agreement”) with Astor Management AG (“Astor”)
which included a deferred consideration of €43.9 million
(the “Deferred Consideration”) payable as consideration
in respect of the acquisition among other items. The
Company also entered into a credit assignment agreement
at the same time with a related company of Astor, Short-
horn AG, pursuant to which the benefit of outstanding
loans was assigned to the Company in consideration
for the payment of €9.1 million to Shorthorn (the “Loan
Assignment”).
The Master Agreement has been the subject of litigation
in the High Court and the Court of Appeal that has now
concluded. As a consequence, ARM must apply any excess
cash (after payment of operating expenses, sustaining
capital expenditure, any senior debt service requirements
and up to US$10 million per annum (for non-Proyecto
Riotinto related expenses)) to pay the consideration due
to Astor (including the Deferred Consideration and the
amount of €9.1 million payable under the Loan 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”. The Company and Astor have now exchanged state-
ments of case to set out their formal position. The trial
is listed to be heard from 21 February 2022 (the “Trial”).
Following the filing of the statements of case for the Trial,
Astor applied to Court seeking an early determination
(without the need for a full trial) of the dispute in relation
to the “Excess Cash” (the “Summary Judgment applica-
tion”). The Summary Judgment application will be heard
on 14-15 June 2021. Astor will need to demonstrate (i)
Atalaya has no reasonable prospect of success at Trial: and
(ii) there is no other compiling reason why the case or issue
should be disposed of at Trial.
As at 31 December 2020, no consideration was paid to
Astor. However, during December 2020 the Board had
discussions and considered an early payment of the
Deferred Consideration and the Loan Assignment provided
certain conditions could be met. Conditions included
among others the execution of credit facilities agreements
to fund the payment.
On 15 March 2021, the Company fulfilled all conditions
required by the Board of Directors and made the early
payment of €53 million to Astor. The payment was fully
funded by unsecured credit facilities entered into between
December 2020 and February 2021 at interest rates ranging
from 1.60% to 2.45% and repayable by 2023 and 2024.
The payment of the Deferred Consideration does not
end the ongoing litigation as the issue as to whether any
residual interest may or may not be payable remains unre-
solved. Consequently, the Company continues with these
aspects of the case.
27. ACQUISITION, INCORPORATION
AND DISPOSALS OF SUBSIDIARIES
2020
— ACQUISITION AND INCORPORATION OF
SUBSIDIARIES
On 16 September 2020 the Group established a new
company in Cyprus under the name of Atalaya Financing,
Limited. The activity of the new company is financing. The
unaudited interim condensed consolidated financial state-
ments include the results of the entity for the half month
period since the incorporation date:
On 15 October 2020, the Company acquired 100% of the
voting shares of Cambridge Minería España, SL, a company
located in Huelva (Spain) that holds exploration permits
for Masa Valverde polymetallic project located in Huelva
(Spain) for €1.4 million payable in two instalments.
— DISPOSALS OF SUBSIDIARIES
There were no disposals of subsidiaries during the year.
2019
— ACQUISITION AND INCORPORATION OF
SUBSIDIARIES
There were no acquisition nor incorporation of subsidi-
aries during the year.
— DISPOSALS OF SUBSIDIARIES
There were no disposals of subsidiaries during the year.
— WIND-UP OF SUBSIDIARIES
There were no operations wound-up during FY2020 and
FY2019.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 106
28. GROUP INFORMATION AND
RELATED PARTY DISCLOSURES
28.1 Information about subsidiaries
These audited consolidated financial statements include:
Subsidiary companies
Parent
Principal
activity
Country of
incorporation
Effective
proportion
of shares held
Atalaya Touro (UK) Ltd
Atalaya Mining Plc
Holding
United Kingdom
100%
Atalaya Financing Limited
Atalaya Mining Plc
Financing
Cyprus
100%
Atalaya MinasdeRiotinto Project (UK)
Limited
Atalaya Mining Plc
Holding
United Kingdom
100%
EMED Marketing Ltd
Atalaya Mining Plc
EMED Mining Spain S.L.U.
Atalaya Mining Plc
Trading
Exploration
Cyprus
Spain
Atalaya Riotinto Minera S.L.U.
Atalaya MinasdeRiotinto Project (UK)
Limited
Production
Spain
Eastern Mediterranean Exploration
and Development S.L.U.
Atalaya MinasdeRiotinto Project (UK)
Limited
Cobre San Rafael, S.L. (1)
Atalaya Touro (UK) Limited
Recursos Cuenca Minera S.L.U.
Atalaya Riotinto Minera SLU
Exploration
Exploration
Exploration
Fundacion Atalaya Riotinto
Atalaya Riotinto Minera SLU
Trust
Atalaya Servicios Mineros, S.L.U.
Atalaya MinasdeRiotinto Project (UK)
Limited
Dormant
Atalaya Masa Valverde S.L.U. (2)
Atalaya Servicios Mineros, S.L.U.
Exploration
Spain
Spain
Spain
Spain
Spain
Spain
100%
100%
100%
100%
10%
J-V
100%
100%
100%
(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 of appointment the key personnel.
(2) Cambridge Mineria Espana, S.L.U. changed its name to Atalaya Masa Valverde, S.L.U on 28 November 2020.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 107
The following transactions were carried out with related
parties:
28.3 Transactions with shareholders and
related parties
28.2 Compensation of key management
personnel
(Euro 000’s)
Trafigura– Revenue from contracts
The total remuneration and fees of Directors (including
executive Directors) and other key management personnel
was as follows:
Freight services
Gains relating provisional pricing within
sales
Trafigura – Total revenue from contracts
2020
49,775
-
2019
33,179
-
49,775
33,179
837
2,587
50,592
50,592
35,766
35,766
(Euro 000’s)
Directors’ remuneration and fees
Director’s bonus (1)
Share option-based benefits to Directors
Key management personnel
remuneration (2)
Key management bonus (1)
Key management share bonus (3)
Share option-based and other benefits to
key management personnel (4)
2020
1,044
2019
1,319
305
291
522
182
84
374
325
173
765
740
-
267
(Euro 000’s)
2020
2019
Current assets - Receivable from related parties (Note 17):
Recursos Cuenca Minera S.L.
56
56
56
56
2,802
3,589
The above balances bear no interest and are repayable on
demand.
28.4 Year-end balances with shareholders
(Euro 000’s)
2020
2019
Receivable from shareholders (Note 17):
Trafigura – Debtor balance –subject to
provisional pricing
3,946
3,946
8,918
8,918
The above debtor balance arising from the pre-commis-
sioning sales of goods bears no interest and is repayable
on demand.
(1) These amounts related to the approved performance bonus for 2019
by the Board of Directors following the proposal of the CGNC Committee.
The 2020 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 2020
performance.
(2) Includes wages and salaries of key management personnel of €506k
(2019: €730k) and other benefits of €16k (2019: €35k).
(3) In December 2020, a former key management employee was granted with
33,333 shares.
(4) Includes share option of a former key management employee.
At 31 December 2020 amounts due to Directors, as from
the Group, are €nil (€nil million at 31 December 2019)
and €nil million (€0.5 million at 31 December 2019) to key
management.
At 31 December 2020 amounts due to Directors, as from
the Company, are €nil (€nil at 31 December 2019) and €nil
(€nil million at 31 December 2019) to key management.
SHARE-BASED BENEFITS
In 2020, the Directors and key management personnel
have been granted 1,050,000 options (2019: 1,650,000
options) (see Note 21).
During 2020, the Directors and key management personnel
have not been granted any bonus shares (2019: nil).
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 108
29. CONTINGENT LIABILITIES
31. SIGNIFICANT EVENTS
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.
30. 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 classification
of the Class B resources and 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
accordance with their respective ownership interests.
COVID-19 OUTBREAK
The Company issued COVID-19 updates through the
year as the outbreak of the virus impacted the company
both operationally and financially. As announced on 30
March 2020, a Royal Decree of 29 March 2020 excluded
mining from essential industries resulting in the halting
of operations at Proyecto Riotinto from 30 March 2020.
As announced on 6 April 2020, further clarifications
were received on the Royal Decree on 3 April 2020 which
reinstated mining on the list of permitted activities and
accordingly, operations at Proyecto Riotinto were author-
ized to recommence.
It is Atalaya’s priority to protect its workforce and the
local communities surrounding both Proyecto Riotinto
and Proyecto Touro. Atalaya has followed and continues
following the requirements and recommendations
issued by the Government of Spain and the regional and
local health authorities at all times to reduce the risk of
COVID-19 exposure and avoid the spread of the virus.
In order to mitigate the potential operational and finan-
cial impact of COVID-19 resulting from a sharply decrease
in commodities prices, the Company increased its cash
balance from €8.1 million as at 31 December 2019 to €32.4
million as at 30 June 2020 by net drawdowns on existing
credit facilities. Following the recoveries of the commodi-
ties prices, the Company has repaid the credit facilities as
of 31 December 2020.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 109
32. EVENTS AFTER THE
REPORTING PERIOD
Depending on the duration of the COVID-19 pandemic,
and continued negative impact on economic activity, the
Group might experience negative results, and liquidity
restraints and incur impairments on its assets in 2021.
The exact impact on the Group’s activities in 2021 and
thereafter cannot be predicted. In the period since 31
December 2020 the Group has not incurred losses due to
impairments. Refer to Note 17.
On 10 February 2021, the Company announced that its
Board of Directors had appointed Mr. Neil Gregson as an
independent Non-Executive Director of the Company.
On 12 February 2021, the Company was notified that
certain employees exercised options over 40,750 ordinary
shares of £0.075.
On 1 March 2021, Atalaya received the formal communica-
tion from Xunta de Galicia of the negative Environmental
Impact Declaration on Proyecto Touro (Note 31).
In March 2021, the Board of Directors of the Company
decided to make an early payment of the Deferred Consid-
eration and the Loan Assignment related to Astor. The
Payment was completed in March 2021 (Note 26).
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. After a short
legal consultation period exclusively with parties involved
in the process lapses, The Company now has the AAU
revalidated with no impact on the operation.
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
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 1 March 2021 the formal communication from the
Xunta de Galicia was received. 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 ques-
tions raised by the reports.
NEW GROUP ENTITY
In 2020, the Company established in Cyprus a new subsid-
iary under the name of Atalaya Financing, Limited. The
activity of this new company will be financing.
On 21 October 2020, Atalaya announced that it had
entered into a definitive purchase agreement to acquire
100% of the Masa Valverde polymetallic project located
in Huelva (Spain) through the acquisition of 100% of a
Spanish company for €1.4 million payable in two instal-
ments. Masa Valverde is one of the largest undeveloped
volcanogenic massive sulphide deposits in the prolific
Iberian Pyrite Belt and is located 28kms south west of
Proyecto Riotinto.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORTAtalaya Mining Plc. 110
Atalaya Mining Plc. — ANNUAL REPORT 2020
SHAREHOLDER
INFORMATION
111
GLOSSARY OF TERMS ........................................ 112
SHAREHOLDER ENQUIRIES ............................ 116
112
GLOSSARY OF
TERMS
The following definitions and terms are used throughout this Annual Report.
CURRENCY
ABBREVIATIONS
US$ / USD or $ ......................................................................... US Dollars
$000 ....................................................................... Thousand US dollars
$m ............................................................................... Million US Dollars
£ ..................................................................................... Sterling Pound
£000 ............................................................... Thousand Pounds Sterling
£m ....................................................................... Million Pounds Sterling
€ / EUR ........................................................................................... Euro
€000 / €k ........................................................................Thousand Euros
€m ..................................................................................... Million Euros
€nil ....................................................................................... Zero Euros
FY2020 / 2020 ..................... Twelve month period ended 31 December 2020
FY2019 / 2019 ...................... Twelve month period ended 31 December 2019
DEFINITIONS AND
CONVERSION TABLE
lb ................................................................................................ Pound
Oz ......................................................................................... Troy ounce
‘000 m³ ............................................................... Thousand cubic metres
t ................................................................................................ Tonnes
DMT ............................................................................. Dry Metric Tonne
‘000 tonnes ........................................................ Thousand metric tonnes
mt ................................................................................... Million tonnes
1 Kilogramme/ (kg) ...........................................................2.2046 pounds
1000 Kilogrammes/ (´000 kg) ............................................ 2,204.6 pounds
1 Kilometre (km) .................................................................. 0.6214 miles
1 troy ounce........................................................................... 31.1 grams
Ha ............................................................................................. Hectare
ft ................................................................................................... Foot
CHEMICAL SYMBOLS
Cu .............................................................................................. Copper
Ag ................................................................................................. Silver
Au .................................................................................................. Gold
SHAREHOLDER INFORMATION — Glossary of TermsANNUAL REPORTAtalaya Mining Plc. BUSINESS,
FINANCE AND
ACCOUNTING
113
AAU .................................................................Autorización Ambiental Unificada
(Unified Environmental Declaration)
Atalaya or the Company .....................................Atalaya Mining Plc, a company
incorporated in Cyprus under the
Companies law, cap. 113
Atalaya Group or Group ........................Atalaya Mining Plc and its subsidiaries
AFRC ............................................................Audit and Financial Risk Committee
AGM ..................................................................................Annual General Meeting
AIM ................... Alternative Investment Market of the London Stock Exchange
AISC ......................................................................................All In Sustaining Cost
AR .....................................................................................................Annual Report
ARM .......................................................................Atalaya Riotinto Minera, S.L.U.
Articles ..................................The articles of association of Atalaya Mining Plc.
Average head grade ...................................................Average ore grade fed into
the mill, expressed in % of weight
BoD or Board of Directors ................... The Board of Directors of the Company
CAPEX .................................................................................... Capital Expenditure
Cash Cost .......................................... The cost to produce one pound of copper
CEO ....................................................................................Chief Executive Officer
C. Eng ...................................................................................... Chartered Engineer
CFO .....................................................................................Chief Financial Officer
COO ................................................................................Chief Operational Officer
COF ..................................................................................................Cost of Freight
CIF ...............................................................................Cost Insurance and Freight
CIT .......................................................................................Corporate Income Tax
CIP ........................................................................ Carriage and Insurance paid to
CGU ...................................................................................... Cash Generating Unit
CGNCC ........................................................ Corporate Governance, Numeration
and Compensation Committee
Code of Conduct...................... Atalaya’s Code of Business Conduct and Ethics
Cont. ...................................................................................................... Continued
CSR ...................................................................................... Cobre San Rafael S.L.
Directors ............................... The Directors of Atalaya for the reporting period
EBITDA ..................................................................... Earnings Before Interest Tax
Depreciation and Amortisation
ECL ........................................................................................Expected Credit Loss
EeA .......................................................................................Ecologistas en Accion
EIR .........................................................................Effective Interest Rate Method
EMED TARTESSUS ...................................... Eastern Mediterranean Exploration
& Development TARTESSUS S.L.
Etc. ............................................................................................................ Et cetera
EU ..................................................................................................European Union
FIFO............................................................................................... First In First Out
SHAREHOLDER INFORMATION — Glossary of TermsANNUAL REPORTAtalaya Mining Plc.
114
BUSINESS,
FINANCE AND
ACCOUNTING
Financial statements...... Consolidated and company financial statements of
Atalaya Mining Plc. .................................................................................................
FOB ...................................................................................................Free on Board
FV .............................................................................................................Fair Value
FVOCI ....................................Fair Value Through Other Comprehensive Income
FVPL .................................................................. Fair Value Through Profit or Loss
GAAP ..................................................... Generally Accepted Accounting Policies
Group .......................................................Atalaya Mining plc and its subsidiaries
H1, H2 ....................... Six month periods ending 30th June and 31st December
IAS ............................................................... International Accounting Standards
ie. ....................................................................... Id est (explanatory information)
IFRS ............................................... International Financial Reporting Standards
IPO ....................................................................................... Initial Public Offering
JdA ...........................................................................................Junta de Andalucía
KPI´s .........................................................................Key Performance Indicators
LDC ................................................................................... Louis Dreyfus Company
LIBOR .............................. The British Bankers’ Association Interest Settlement
Rate for the relevant currency
LITFR ................................................................. Lost Injury Time Frequency Rate
Ltd. .............................................................................................................. Limited
LLC ...............................................................................Limited Liability Company
LP ........................................................................................... Limited partnership
London Stock Exchange / LSE ................................London Stock Exchange plc
MBA ..............................................................Master’s in Business Administration
NED´s ..............................................................................Non‐Executive Directors
NPV ............................................................................................ Net Present Value
Nr ................................................................................................................Number
OCI ........................................................................ Other Comprehensive Income
Ordinary Shares .................................. Ordinary Shares of 10 pence each in the
capital of the Company
Ph.D. .....................................................................................Doctor of Philosophy
PRC ................................................................................ Physical Risk Committee
PFS ........................................................................................Pre-Feasibility Study
Plc. ................................................................................... Public limited company
P&L .................................................................................................. Profit and Loss
P&P reserves ....................................................... Proven and Probable reserves
Q1, Q2, Q3, Q4 ................................... Three month periods ending 31st March,
30th June, 30th September and 31st December
QCA ........................................................................... Quoted Companies Alliance
QP ...............................................................................................Quotation Period
SIC ...................................................Standard Interpretations Committee which
were endorsed by the IAS
SHAREHOLDER INFORMATION — Glossary of TermsANNUAL REPORTAtalaya Mining Plc.
115
BUSINESS,
FINANCE AND
ACCOUNTING
Shareholders ............................................................ Holders of Ordinary Shares
SL ................................................ Sociedad Limitada (private limited company)
SLU ................................ Sociedad Limitada Unipersonal (limited partnership)
TSX .................................................................................. Toronto Stock Exchange
United Kingdom or UK ............................. the United Kingdom of Great Britain
and Northern Ireland
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
UOP ...........................................................................................Unit of Production
VAT ................................................................................................Value Added Tax
WC ................................................................................................. Working Capital
XGC................................................................Yanggu Xiangguang Copper Co. Ltd
MINING TERMS
Average head grade ....................................Average ore grade fed into the mill,
expressed in % of weight
Concentrate ............................... A fine powdery product of the milling process
containing a high percentage of valuable metal
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
Grade ................................................ The amount of metal in each tonne of ore,
expressed as a percentage of valuable metal
Mtpa ..............................................................................Million tonnes per annum
NI 43-101 ...........................National Instrument 43-101, standard of disclosure
for mineral projects according to Canadian
guidelines
Open pit ..................................... A mine where the minerals are mined entirely
from the surface. Also referred to as open-cut
or open-cast mine
Ore body ..................................... A sufficiently large amount of ore that can be
mined economically
P&P Reserves....................................................... Proven and Probable reserves
Stripping ................................. Removal of overburden or waste rock overlying
an ore body in preparation for mining by
open pit methods
Tailings ....................................................Materials left over after the process of
separating the valuable fraction from the
uneconomic fraction of an ore
TC/RC ................................................Treatment Charge and Refinement Charge
VTEM .................................................... Versatile Time Electomagnetic mapping
3D ............................................................................................. Three Dimensional
SHAREHOLDER INFORMATION — Glossary of TermsANNUAL REPORTAtalaya Mining Plc.
SHAREHOLDER INFORMATION — Shareholder Enquiries
ANNUAL REPORT
ANNUAL REPORT
116
116
SHAREHOLDER
ENQUIRIES
BOARD OF DIRECTORS:
Roger Davey ......................... Chairman. Independent non‐executive chairman
Alberto Lavandeira .................................................. Managing director and CEO
Hui (Harry) Liu .................................................................Non‐executive director
Dr. Jose Sierra Lopez ...............................Independent Non‐executive director
Jesus Fernandez .............................................................Non‐executive director
Damon Barber .................................................................Non‐executive director
Dr. Hussein Barma ...................................Independent Non‐executive director
Neil Gregson .............................................Independent Non‐executive director
Stephen Scott ...........................................Independent Non‐executive director
CORPORATE BROKERS
PUBLIC RELATIONS
COMPANY SECRETARY:
Canaccord Genuity Limited
Elisabeth Cowell
Inter Jura CY (Services) Limited
41 Lothbury
London EC2R 7AE
—
BMO Capital Markets
95 Queen Victoria Street
London, EC4V 4HG
NOMINATED ADVISOR
(“NOMAD”)
Canaccord Genuity Limited
41 Lothbury
London EC2R 7AE
INVESTOR RELATIONS
Carina Corbett
4C Communications Ltd.
Hudson House
8 Tavistock Street
London WC2E 7PP
+44 (0) 203 170 7973
1 Lampousa Street,
1095 Nicosia, Cyprus
GROUP AUDITOR
Ernst & Young Cyprus Ltd
Jean Nouvel Tower,
6 Stasinos Avenue,
P.O.Box 21656,
1511, Nicosia,
Cyprus
REGISTERED OFFICE
1 Lampousa Street,
1095 Nicosia, Cyprus
Newgate Communications
Sky Light City Tower
50 Basinghall Street
London EC2V 5DE
+44 (0) 207 680 6550
REGISTRARS
Cymain registrars Ltd.
26 Vyronos Avenue
1096 Nicosia, Cyprus
DEPOSITARY / TRANSFER
AGENT
United Kingdom
Computershare Investor Services Plc.
The Pavilions
Bridgwater
Bristol BS13 8AE
—
Canada
Computershare Investor Services Inc.
100 Universtity Avenue
8th Floor, North Tower
Toronto, Ontario M5J 2Y1
Atalaya Mining Plc.
Atalaya Mining Plc.
ANNUAL REPORT
SHAREHOLDER INFORMATION — Glossary of Terms
117
Atalaya Mining Plc.
ATALAYA MINING PLC
ANNUALREPORT 2020
For the year end 31 December 2020
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