ANNUAL REPORT
2021
For the year ended 31 December 2021
Contents
Company Overview
Our Purpose
2021 Performance and Key Highlights
Strategic Focus for Growth
Atalaya at a Glance
Management Report
Basis of Reporting
Operational Review
Financial Review
Other Matters
Principal Risks and Uncertainties
Directors’ and Officers’ Statement
08
09
10
11
16
18
22
28
33
Directors’ and Officers’ Statement 38
Strategic Report
Letter from the Chairman
Market Overview
Strategic Framework
Key Performance Indicators
Sustainability Report
Our Commitment to Sustainability
Good Governance and Responsible Management
People
Safety Operation
Environment and Climate Change
Society
Innovation and Technology
42
44
49
53
56
58
60
63
64
66
68
Corporate Governance Report
Board of Directors
Board Committees
Consolidated and Company Financial Statements
Independent Auditor’s Report
Consolidated and Company Financial Statements
Notes to the Consolidated and Company Financial Statements
Shareholder Information
Glossary of Terms
Shareholder Enquiries
72
86
96
102
108
178
184
Atalaya Mining | Annual Report 2021 Company
Overview
08 Our Purpose
09
10
11 Atalaya at a Glance
2021 Performance and Key Highlights
Strategic Focus for Growth
Atalaya Mining | Annual Report 2021 8
Company Overview | Our Purpose
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
opportunities to achieve this.
The Company seeks to provide society with the essential raw materials required for economic growth and the energy
transition.
Atalaya Mining is focused on conducting responsible mining that positively impacts local communities, the environment
and all our stakeholders.
Our Values
A Committed Duty to a Safe and Ethical Working Environment
Atalaya Mining is committed to responsible mining and upholds its core principles 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 | Annual Report 2021 Company Overview | 2021 Performance and Key Highlights
9
2021 Performance and Key Highlights
Operational Highlights
Unit
2022 Guidance
2021
2020
Copper concentrate
Copper contained in concentrate
Payable copper contained in concentrate
t
t
t
-
270,713
256,001
54,000-56,000
-
56,097
53,390
55,890
53,330
Key messages
h Full year 2021 copper production increased by 5.75%
h Top end of 2021 increased guidance was achieved
h Annual ore processed in 2021 was 15.8 million tonnes
Revenues
EBITDA
Dividend per share
Cash cost
All-in sustaining cost
Net cash / (debt) position (1)
Cash at bank
Financial Highlights
Unit
€k
€k
$/share
$/lb payable
$/lb payable
2021
2020
405,717
252,784
199,114
67,444
0.395
2.18
2.48
-
1.95
2.21
€k
€k
60,073
(15,233)
107,517
37,767
(1) Includes restricted cash and bank borrowings at 31 December 2021 and includes Deferred Consideration at 31 December 2020.
Key messages
h EBITDA increased 195% year on year to reach €199.1 million in 2021
h Cash costs of US$2.18/lb and AISC of US$2.48/lb
h Healthy liquidity position with €107.5 million cash at bank at 31 December 2021
h An inaugural dividend of approximately US$0.395 per share was declared on 27 October 2021 and paid on 1
December 2021
h The Company’s Board of Directors also approved a future dividend policy which will take effect in financial
year 2022 and make an annual pay-out of between 30% and 50% of free cash flow generated during the
applicable financial year.
Atalaya Mining | Annual Report 2021 10
Company Overview | Strategic Focus for Growth
Strategic Focus
for Growth
Atalaya’s ambition is to become a multi-asset, mid-tier base
metals producer.
Cost reduction / ESG initiatives
Organic Growth
Value-added products
h Evaluation of technologies (E-LIX) to maximise value of
complex sulphides at Riotinto and in the Iberian Pyrite
Belt.
Advance Atalaya’s existing higher grade
brownfield orebodies, including San Dionisio,
San Antonio-Planes and Riotinto Este into
production
h Potential uplift of copper production.
h Increases optionality, production and mine life.
h Solar project reduces operating costs and carbon
emissions.
h Zero tailings water discharge design is international best
practice.
External Growth
Continue to evaluate external opportunities that leverage core
capabilities.
h New prospects in the Iberian Pyrite Belt or other safe
mining jurisdictions.
h Targeting prospects of material scale, good geology &
upside potential via rigorous technical due diligence.
Proyecto TouroWe 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 development of the project.Masa ValverdeFollowing the acquisition of Masa Valverde in October 2020, work has started on general permitting new geophysical surveys, and exploration drilling at the polymetallic project located in Huelva (Spain), one of the largest undeveloped volcanogenic massive sulphide deposits in the Iberian Pyrite Belt.Proyecto Ossa MorenaThe Ossa-Morena Metallogenic Belt has strong exploration potential for a range of base and precious metals and is north of the Iberian Pyrite Belt where Atalaya operates its flagship Proyecto Riotinto mine.Atalaya Mining | Annual Report 2021 Company Overview | Atalaya at a Glance
11
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.
Key qualities of the Company include:
Assets located in established and stable mining jurisdictions
Pipeline of potential growth opportunities
Proven management team
Strong focus on ESG
Supportive strategic shareholders
The Company owns and operates through a wholly owned
subsidiary, “Proyecto Riotinto”, an open-pit copper mine located
in the 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% of Proyecto Touro,
a brownfield copper project in northwest Spain and 100% of
Proyecto Masa Valverde, a polymetallic project located in
Huelva (Spain) and 28 kms southwest of Proyecto Riotinto.
The Company’s and its subsidiaries’ business is to explore for
and develop metal production operations in Europe, with an
initial focus on copper.
The strategy is to evaluate and prioritise metal production
opportunities in several jurisdictions throughout the well-
known belts of base and precious metal mineralisation in
Spain, Europe and Latin America.
h For further details on the principal activities of the Group
and the Company, please refer to www.atalayamining.com
Atalaya Mining | Annual Report 2021 12
Company Overview | Atalaya at a Glance
Cerro Colorado (Proyecto Riotinto)
Proyecto Masa Valverde
(Proyecto Riotinto)
Ownership
100%
Ownsership
100%
Mine Activity
Open pit mining in operation
Mine Activity
Underground mining in permitting
stage
Commodity
Cu, Ag
Location
Huelva, Spain
Ore Reserve*
~703 kt Cu ($3.10/lb)
M, I&I Resources
~750 kt Cu
Commodity
Cu, Zn, Pb, Ag and Au
Location
Huelva, Spain
Inferred Resources*
66Mt at 2.57% Cu eq.
2022 expected
Cu production
54,000-56,000 tonnes
Growth
Growth
Potential uplift on Cu production
* Reserve update as at December 2020 and announced in June
2021.
* Historical data
Strong exploration upside potential in
the immediate surroundings. Recent
discovery of the Majadales sulphide
body
In 2020, Atalaya entered into a definitive purchase agreement
to acquire the Masa Valverde polymetallic project in Huelva.
The mining rights are owned by Atalaya Masa Valverde, S.L.U. a
fully owned subsidiary of Atalaya.
San Dionisio / Planes-San Antonio
(Proyecto Riotinto)
Ownership
100%
Ownership
Proyecto Touro
10% with an earn-in agreement
up to 80%
Mine Activity
OP and UG PEA/FS Stage
Mine Activity
Open pit mining in permitting stage
Commodity
Cu, Zn
Location
Huelva, Spain
Ore Reserve
-
M, I&I Resources*
~800 kt Cu
~1,180 kt Zn
~56 Moz Ag
~0.75 Moz Au
Growth
Potential uplift on Cu production
* Historical (non 43-101 compliant) resources estimate per Rio
Tinto technical report by Behre Dolbear (Feb 2013).
Proyecto Riotinto is operated through Atalaya Riotinto Minera,
S.L.U. a fully owned entity established under the laws of Spain.
Commodity
Cu, Ag
Location
A Coruña, Spain
Ore Reserve*
~392 kt Cu ($2.60/lb)
M, I&I Resources*
~680 kt Cu
Growth
Option to acquire 100% of the
adjacent exploration concessions
* NI 43-101 dated April 2018
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.
Atalaya Mining | Annual Report 2021 Company Overview | Atalaya at a Glance
13
Proyecto Ossa Morena
Ownership
51%
Mine Activity
Open pit mining in exploration stage
Commodity
Cu, Au and Fe
Location
Huelva, Spain
23 Mt at 0.53% Cu,
0.15 g/t Au
11.2% Fe
Strong exploration upside potential in
the immediate surroundings
Resources*
Growth
* Historial data
Atalaya Mining | Annual Report 2021 Atalaya Mining | Annual Report 2021 Management
Report
16 Basis of Reporting
18 Operational Review
22
28 Other Matters
33 Principal Risks and Uncertainties
Financial Review
Atalaya Mining | Annual Report 2021 16
Management Report | Basis of Reporting
Basis of Reporting
The Board of Directors of Atalaya Mining Plc (the “Company” or “Atalaya”) presents its
Group’s and Company’s Management Report together with the audited consolidated
financial statements (hereinafter “financial statements”) of the Company and its
subsidiaries (the “Group”) and the separate financial statements of the Company for
the year ended 31 December 2021. These documents can be found on the Atalaya
website at www.atalayamining.com.
The Company is a Cypriot incorporated public company with a primary listing on AIM
of the London Stock Exchange and a secondary listing on the TSX of the Toronto Stock
Exchange. The Group’s and Company’s financial statements have been prepared in
accordance with International Financial Reporting Standards (“IFRS”) as adopted by
the European Union and the requirements of the Cyprus Companies Law, Cap.113. For
the year ending 31 December 2021, the standards applicable for IFRS’s as adopted by
the EU are aligned with the IFRS’s as issued by the IASB. The currency referred to in
this document is the Euro (“EUR”), unless otherwise specified.
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 2020 and 31 December 2021 and the results of operations for
the twelve month periods ended 31 December 2020 and 31 December 2021.
These documents can be found on the Atalaya website at
www.atalayamining.com
Atalaya Mining | Annual Report 2021 Management Report | Basis of Reporting
17
Forward Looking Statements
This report may include certain “forward-looking statements”
and “forward-looking information” applicable under securities
laws. Except for statements of historical fact, certain information
contained herein constitutes forward-looking statements.
Forward-looking statements are frequently characterised
by words such as “plan”, “expect”, “project”, “intend”, “believe”,
“anticipate”, “estimate”, and other similar words, or statements
that certain events or conditions “may” or “will” occur. Forward-
looking statements are based on the opinions and estimates
of management at the date the statements are made and are
based on a number of 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 regulatory and governmental approvals that will be
obtained. Many of these assumptions are based on factors
and events that are not within the control of Atalaya and
there is no assurance they will be correct. Factors that cause
actual results to vary materially from results anticipated by
such forward-looking statements include changes in market
conditions and other risk factors discussed or referred to in this
report and other documents filed with the applicable securities
regulatory authorities. Although Atalaya has attempted to
identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that
cause actions, events or results not to be anticipated, estimated
or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Atalaya undertakes no obligation to update
forward-looking statements if circumstances or management’s
estimates or opinions should change except as required by
applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking statements.
Alternative Performance Measures
AISC per pound of payable copper includes the C1 Cash Costs
plus royalties and agency fees, expenditure on rehabilitations,
stripping costs, exploration and geology costs, corporate
costs, and sustaining capital expenditures.
Realised prices per pound of payable copper is the value of the
copper payable included in the concentrate produced including
the 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.
Atalaya has included certain non-IFRS measures including
“EBITDA”, “Cash Cost per pound of payable copper” “All In
Sustaining Costs” (“AISC”) and “realised prices” in this report.
Non-IFRS measures do not have any standardised meaning
prescribed under IFRS, and therefore they may not be
comparable to similar measures presented by other companies.
These measures are intended to provide additional information
and should not be 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.
Atalaya Mining | Annual Report 2021 18
Management Report | Operational Review
Operational Review
Proyecto Riotinto
The following table presents a summarised statement of operations of Proyecto Riotinto for the twelve month periods
ended 31 December 2021 and 2020.
Units expressed in accordance with the
international system of units (SI)
Unit
2021
2020
Ore mined
Ore processed
Copper ore grade
Copper concentrate grade
Copper recovery rate
Copper concentrate
Copper contained in concentrate
Payable copper contained in concentrate
Cash cost
All-in sustaining cost
t
t
%
%
%
t
t
t
$/lb payable
$/lb payable
13,535,470
13,604,801
15,822,610
14,833,916
0.41
20.72
85.97
0.45
21.83
84.53
270,713
256,001
56,097
53,390
2.18
2.48
55,890
53,330
1.95
2.21
Notes
There may be slight differences between the numbers in the above table and the released quarters Operations Update due to
rounding. Available on Atalaya´s website at www.atalayamining.com
Mining and Processing
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 2021 was in line with the previous year
at 13.5 million tonnes compared to 13.6 million tonnes.
Atalaya’s operating budget for 2022 was set in early December 2021 based on certain economic assumptions of expected
inflation, particularly with respect to energy costs.
Processing
During FY2021, the plant continued to operate above nameplate capacity of 15 Mtpa and processed 15.8 million tonnes of
ore with an average copper head grade of 0.41% and a recovery rate of 85.97%. In comparison to FY2020, the increased
throughput and metallurgical recoveries more than offset the lower copper grades. In Q4 2021, 3.9 million tonnes of ore were
processed, reporting a consistent quarterly throughput.
Atalaya Mining | Annual Report 2021 Management Report | Operational Review
19
Copper concentrate grade for 2021 was 20.72%, in line with expectations and slightly below the previous year’s (21.83%).
Concentrate production for 2021 was 270,713 tonnes compared to 256,001 tonnes in 2020. Contained copper was 56,097 tonnes
compared to 55,890 tonnes in 2020. Copper payable amounted to 53,390 tonnes from 53,330 tonnes in 2020.
On-site concentrate inventories at 31 December 2021 were approximately 5,254 tonnes (12,180 tonnes at 31 December 2020)
which has been fully sold in January 2022. All concentrate in stock was delivered to the port at Huelva.
Exploration and Geology
Work is ongoing on the preparation of a NI 43-101 compliant technical report for the Cerro Colorado, San Dionisio and San
Antonio deposits. A significant portion of the resources at San Dionisio is potentially mineable by open pit and further polymetallic
mineralization could be exploited using underground mining methods at both the San Dionisio and San Antonio deposits.
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 polymetallic mineralisation.
h Proyecto Touro
h Proyecto Masa Valverde
Proyecto Touro is a high quality past producing copper project
located in Galicia, northwest Spain, and is in the permitting
process.
As announced on 6 October 2021, exploration work continues
at Proyecto Masa Valverde, which includes the Masa Valverde
the
polymetallic deposit,
Campanario-Descamisada area.
the Majadales discovery and
In 2021, the Company focused on engaging with local and
regional stakeholders on a variety of matters. As part of this
engagement, the Company began during the Period, the
construction of a new water treatment and monitoring system
that will restore the legacy water runoff from the historical
mine.
The Company continues to be confident that its development
approach to Proyecto Touro is in line with international
best practice and is working towards the submission of the
Environmental Impact Evaluation for the new enhanced project
design.
Following positive drilling results,
including high grade
intercepts within broad intervals of massive and stockwork
type polymetallic sulphide mineralization at both Masa
Valverde and Majadales, the Company decided to expand its
drilling campaign beyond the 8,000 meters originally planned.
Updates on the drilling results will be disclosed to the market in
due course and as appropriate.
These drilling results will be incorporated into the NI 43-101
compliant report for Proyecto Masa Valverde that is currently
being prepared by CSA Global and expected during H1 2022.
h Proyecto Riotinto Este
Investigation permits were granted during 2021 and the
Company now has access to two of the three investigation
permits at Riotinto Este: Cerro Negro and Los Herreros. The
third investigation permit, Peñas Blancas, continues to progress
and is expected to be granted in the coming months.
An electromagnetic airborne geophysical survey has started.
The survey will be covering the investigation permits area
located immediately east of Proyecto Riotinto and along the
same structural and stratigraphic setting.
Atalaya Mining | Annual Report 2021 20
Management Report | Operational Review
E-LIX Update
Solar Plant
On 6 June 2021 the Board of Directors approved the
construction of the first phase of an industrial-scale plant that
utilises the E-LIX System, which will produce high value copper
and zinc metals from the complex sulphide concentrates
sourced from Proyecto Riotinto.
E-LIX has the potential to unlock significant value from Atalaya’s
portfolio of polymetallic resources in the Proyecto Riotinto
district by materially increasing the recoveries of copper, zinc,
lead and precious metals from complex sulphide ores.
The plant has a construction budget of €12 million and will have
the capacity to produce between 3,000 and 10,000 tonnes of
copper or zinc metal per year. The production of high-purity
metals on-site will reduce the transportation costs, treatment
charges and penalties associated with producing and delivering
conventional concentrates.
The plant
commissioning, in 2022.
is expected to be fully operational,
including
COVID-19 Impact
Management continues to monitor the impact of COVID-19 on
the operations and the ongoing cost structure and will update
the market with any changes in expectations. Despite of
restrictions the Company has not experienced any significant
impact during 2021 due to COVID-19 and does not expect have
any significant impact in the future.
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.
On 24 September 2020 the Company announced that it started
the permitting process to develop a 50MW solar plant at its
Proyecto Riotinto. The full capacity of the Solar Project will be
used for self-consumption.
Permitting of the solar plant for self-consumption has been
obtained in March 2022 and the construction has subsequently
started.
Corporate Updates 2021
On 15 March 2021, the Company announced the payment
of the €53 million (the “Deferred Consideration”) to Astor
Management, AG (“Astor”) following the approval of its Board
of Directors. This amount arises from arrangements entered
into with Astor in 2008 in relation to Proyecto Riotinto.
As announced on 21 March 2022, the Company received the
formal Judgment from the High Court of Justice in relation
to the Claim by Astor for residual interest arising out of the
payment of €53 million to Astor.
The Judgment which puts an end to the litigation between the
parties, clarifies the basis for calculating the interest due and
confirms that is it payable by the Company. As a result, Atalaya
expects the interest to be paid to be in the range of €10 million
to €11.7 million.
On 27 October 2021, Atalaya announced that the Company’s
Board of Directors approved
inaugural dividend (the
“Inaugural Dividend”) as well as the adoption of a future dividend
policy (“Dividend Policy”) that will take effect from 2022.
its
On 21 December 2021, Atalaya announced that it had entered
into a purchase agreement to acquire 51% of Rio Narcea Nickel
S.L. and additional investigation permits.
Atalaya Mining | Annual Report 2021 Management Report | Operational Review
21
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 and the geopolitical developments in Ukraine and its
impact on energy prices 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 2022 and 2021 is
as follows:
Unit
Guidance
2022
Actual
2021
Guidance
2021
Ore mined
Waste mined
million tonnes
million tonnes
15.5
23.4
Ore processed
million tonnes
15.2 - 15.8
Copper ore grade
Copper recovery rate
%
%
0.42
83 - 86
13.5
30.5
15.8
0.41
85.97
13.2
30.0
15.5 - 16.0
0.42
84 - 86
Contained copper
tonnes
54,000 - 56,000
56,097
54,000 - 56,000
Cash costs
$/lb payable
2.25 - 2.80
All-in sustaining cost
$/lb payable
2.50 - 3.05
2.18
2.48
2.15 - 2.25
2.50 - 2.65
Atalaya’s operating budget for 2022 was set in early December
2021 based on certain economic assumptions of expected
inflation, particularly with respect to energy costs.
On this basis, full year 2022 copper production is estimated to
be in the range of 54,000 to 56,000 tonnes.
Grade mined during 2022 is expected to be slightly higher
than in 2021 owing to pit sequencing. In addition, the plant
optimisation initiatives mentioned below are expected to
further support copper production.
As a result of actual electricity costs in early 2022, the Company
is providing cash cost and AISC guidance that reflects a range
of outcomes of potential energy costs for the full year. Cash
costs for 2022 are expected to be in the range of $2.25/lb –
$2.80/lb. AISC for 2022 is expected to be in the range of $2.50/
lb – $3.05/lb copper payable. In addition, the Company expects
to spend approximately €12.5 million in 2022 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.
Atalaya Mining | Annual Report 2021 22
Management Report | Financial Review
Financial
Review
Income Statement
The following table presents a summarised consolidated income statement for the twelve months period ended 31 December
2021, with comparatives and comparison with the twelve months ended 31 December 2020.
(Euro 000’s)
Revenues from operations
Total operating costs
Corporate expenses
Exploration expenses
Care and maintenance expenditure
EBITDA
Depreciation/amortisation and impairment
Impairment loss on other receivables
Net foreign exchange gain/(loss)
Net finance cost
Tax charge
Profit for the year
Twelve months ended
31 Dec 2021
Twelve months ended
31 Dec 2020
405,717
(192,972)
(9,715)
(1,800)
(2,116)
199,114
(32,276)
-
6,589
(13,600)
(27,601)
132,226
252,784
(176,300)
(6,854)
(1,661)
(525)
67,444
(31,683)
(49)
(3,826)
(144)
(1,352)
30,390
Revenues for FY2021 amounted to €405.7 million (FY2020:
€252.8 million).
Copper concentrate production during FY2021 was 270,713
tonnes (FY2020: 256,001 tonnes) and 277,792 tonnes of copper
concentrate were sold in the same period (FY2020: 258,021
tonnes). The increase was mainly attributed to improved
recoveries, higher processing levels and ongoing optimisation.
The realised price for the twelve-months period in 2021 was
$4.14/lb copper compared to $2.70/lb copper in the same period
of 2020. Concentrates were sold under offtake agreements in
place. The Company did not enter into any hedging agreements
in either 2021 or 2020.
Operating costs for FY2021 amounted to €193.0 million,
compared to €176.3 million in FY2020. Higher costs in 2021
were mainly attributable to the increase in production volumes
plus more tonnes of waste extracted resulting in higher unit
costs.
Atalaya Mining | Annual Report 2021 Management Report | Financial Review
23
Cash costs of $2.18/lb payable copper for FY2021, were higher
than $1.95/lb payable copper in the same period last year.
Higher cash costs in 2021 were mainly attributable to higher
mining costs that resulted from higher strip ratio compared
to 2020, longer distances and, to a lower extent, higher freight
rates. AISC excluding investment in tailings dam previously
reported as sustaining capex for FY2021 was $2.48 /lb payable
copper compared to $2.21/lb payable copper in the FY2020.
Higher AISC mainly related to higher underlying cash costs as
well as additional investments in sustaining capex and higher
stripping costs.
Sustaining capex for FY2021, included in capital expenditure,
amounted to €5.9 million (FY2020: €5.5 million). Sustaining
capex mainly accounted for enhancements in processing
systems. In addition, the Company invested €14.1 million
(FY2020: €11.0 million) in the project to increase the tailings
dam.
Exploration costs related to the Proyecto Riotinto for FY2021
amounted to €1.8 million, compared to €1.7 million in the same
period last year. Main works related to exploration works in
Atalaya Masa Valverde.
Care and maintenance costs for FY2021 amounted to €2.1
million, compared to €0.5 million for FY2020. The increase is
mainly related to Proyecto Touro.
EBITDA for FY2021 amounted to €199.1 million, compared to
EBITDA of €67.4 million for FY2020. The increase is mainly
attributed to higher commodity prices and larger volumes of
concentrate sold offset by higher cash costs.
Depreciation, amortisation and impairment of assets amounted
to €32.3 million for FY2021 (FY2020: €31.7 million). Marginally
higher depreciation costs were mainly driven by the increase of
plant treated.
Corporate costs for FY2021 were €9.7 million, compared to €6.9
million for FY2020. Increase mainly related to the investment in
E-LIX project.
Net finance costs for FY2021 amounted to negative €13.6
million (FY2020: negative €144k).
Atalaya Mining | Annual Report 2021 24
Management Report | Financial Review
Financial Position
(Euro 000’s)
ASSETS
Non-current assets
Other current assets
Tax refundable
Cash and cash equivalents
Total Assets
31 Dec 2021
31 Dec 2020
402,459
74,948
483
107,517
585,407
399,611
66,853
815
37,767
505,046
Shareholders’ Equity
435,898
350,199
LIABILITIES
Non-current liabilities
Current liabilities
Total Liabilities
Total Equity and Liabilities
Assets
68,991
80,518
149,509
585,407
31,508
123,339
154,847
505,046
Total assets were €585.4 million as at 31 December 2021,
compared to €505.0 million as at 31 December 2020, an
increase of €80.4 million. The Group’s significant assets are its
mining rights and mining plant at Proyecto Riotinto. Cash and
cash equivalents increased mostly due to higher production
and copper prices.
Non-current assets as at 31 December 2021 amounted
to €402.0 million (2020: €399.6 million). These comprise
€333.1 million of PP&E (2020: €327.2 million), €57.4 million
of intangible assets (2020: €59.8 million), €5.3 million of non-
current receivables (2020: €2.7 million), €1.1 million of non-
current financial assets (2020: €1.1 million) and €5.5 million of
deferred tax assets (2020: €8.8 million).
Other current assets as at 31 December 2021 amounted to
€75.0 million (2020: €66.9 million), out of which €50.1 million
(2020: €43.2 million) related to trade and other receivables and
€24.9 million (2020: €23.7 million) related to spare parts and
ore in stockpile classified as inventories.
Trade and other receivables comprise €8.9 million of sales of
copper concentrate receivables from third parties (2020: €20.3
million), €20.3 million (2020: €4.0 million) related to sales of
copper concentrate receivables from related parties, €17.3
million (2020: €15.8 million) related to VAT due from authorities
in Spain and Cyprus; €3.3 million (2020: €2.5 million) related
to prepayments and other current assets amounted to €0.4
million (2020: €0.6 million).
Atalaya Mining | Annual Report 2021 Management Report | Financial Review
25
Liabilities
Non-current liabilities stood at €69.0 million as at 31 December
2021 compared to €31.5 million as at 31 December 2020. Non-
current liabilities mainly represent the rehabilitation provision
amounting to €26.3 million as at 31 December 2021 (2020:
€24.6 million). In addition to the rehabilitation provision, non-
current liabilities included the long term portion of borrowings
of €34.1 million (2020: €nil million), the long-term portion of
leases €4.9 million (2020: €4.8 million), legal provisions €0.3
million (2020: €0.6 million), and trade payables of €3.5 million
(2020: €1.4k).
The increase in non-current liabilities is mainly due to the long-
term portion of the borrowings taken out during 2021 to finance
the repayment of the Deferred Consideration which had been
included in current liabilities at the end of 2020.
Current liabilities amounted to €80.5 million at 31 December
2021 (2020: €123.3 million). Current liabilities balance is
comprised of the borrowings related to the payment of the
Deferred Consideration to Astor €13.4 million (2020: €53.0
million) and trade and other payables amounting to €66.2
million (2020: €68.4 million) of which €49.7 million related to
suppliers (2020: €63.9 million); €16.3 million related to accruals
(2020: €4.4 million) and €0.2 million (2020: €0.1 million) related
to other current payables. Other current liabilities include
current tax liabilities.
Results
The Group’s and Company’s consolidated results are set out
on page 100.
Distribution of Profits and Dividend
The Board of Directors declared on 27 October 2021 an Interim Dividend of US$0.395 cents per share, equivalent to €47.3 million
(2020: €nil). The dividend was paid on 1 December 2021.
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 2021 and 2020, and cash flows for the twelve months
ended 31 December 2021 and 2020.
(Euro 000’s)
31 Dec 2021
31 Dec 2020
Unrestricted cash and cash equivalents at Group level
Unrestricted cash and cash equivalents at Operation level
Restricted cash and cash equivalents at Operation level
Consolidated cash and cash equivalents
Net cash / (debt) position
Working capital surplus/(deficit)
48,375
43,722
15,420
107,517
60,073
102,430
24,519
13,248
-
37,767
(15,233)
(17,904)
Atalaya Mining | Annual Report 2021 26
Management Report | Financial Review
Unrestricted cash and cash equivalents as at 31 December
2021 increased to €92.1 million from €37.8 million at 31
December 2020. The increase in cash balances is due to the
strong cash flows generated during 2021. Cash balances are
unrestricted and include balances at operational and corporate
level. Restricted cash of €15.4 million is related to the sum that
the Company transferred to a trust account representing the
full amount of interest claimed by Astor to 30 June 2022, as
detailed in the note on Deferred Consideration.
As of 31 December 2021, Atalaya reported a working capital
surplus of €102.4 million, compared with a working capital
deficit of €17.9 million at 31 December 2020. The main liability
of the working capital is trade payables related to Proyecto
Riotinto contractors to a lesser extent, short-term loans
following the drawdown of credit facilities during Q1 2021. The
increase in working capital resulted from higher cash balances
as well as payment of the Deferred Consideration, which was
included in current liabilities at the end of 2020, by utilising
long-term credit facilities to fund the early payment of the
Deferred Consideration. At 31 December 2021, trade payables
have been decreased by 3% compared with the same period
last year.
The Directors consider current net cash position as well as the
existing levels of the commodity prices and the current liquidity
position to 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 foreign exchange differences
Net increase in cash and cash equivalents
Twelve months ended
31 Dec 2021
Twelve months ended
31 Dec 2020
148,841
(87,531)
1,851
6,589
69,750
62,916
(30,160)
760
(3,826)
29,690
Cash and cash equivalents increased by €69.8 million in the
twelve months period ended 31 December 2021. This increase
was due to cash from operating activities amounting to €148.8
million, cash used in investing activities amounting to €87.5
million and cash generated by financing activities totalling €1.9
million, and net foreign exchange of €6.6 million.
Cash generated from operating activities before working
capital changes was €200.3 million in line with EBITDA of
€199.1 million. Atalaya increased its trade receivables by
€8.8 million and its inventory levels by €1.2 million and trade
payables decreased in the period by €14.4 million. Corporate
tax paid during the period was €25.8 million.
Investing activities in 2021 amounted to €87.5 million, relating
mainly to the early payment of the Deferred Consideration to
Astor and the capitalised expenditure relating to the tailings
dam project and continuous enhancements to the processing
systems of the plant.
Financing activities in 2021 amounted to €1.9 million. The
Company increased its financing by €49.4 million due to the
use of existing unsecured credit facilities to pay the Deferred
Consideration. The payment was financed by unsecured credit
lines by four major Spanish banks having a three-year tenure
and an average annual interest rate of approximately two per
cent. This was offset by the payment of dividends of €47.3
million.
Atalaya Mining | Annual Report 2021 Management Report | Financial Review
27
Critical accounting policies, estimates,
judgements, assumptions and
accounting changes
IFRS required management
in
The preparation of Atalaya’s Financial Statements
to made
accordance with
estimates and assumptions that affected amounts reported in
the Financial Statements and accompanying notes. There is a
full discussion and description of Atalaya’s critical accounting
estimates and judgements in the audited financial statements
for the year ended 31 December 2021 (Note 3.3).
Going Concern
The Directors, after reviewing different scenarios with current
commodities prices, 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 for
the foreseeable future. Accordingly, the consolidated financial
statements continue to be prepared on a going concern basis
(see Note 2.1(b)).
During 2021, the Company has recurrently updated the market
with analysis and action as a result of the COVID-19 pandemic
and its impact to the Company. As of 31 December 2021,
the COVID-19 pandemic continues to have an impact in the
economy. However, the Directors consider the existing levels
of the commodities prices and the current liquidity position
of the Group mitigate any potential financial risks linked to the
COVID-19 pandemic.
the
is assessing
Management
impact of geopolitical
developments as described in Note 35 (Events after the
reporting period). Currently no significant impact is expected in
the operations of the Group although this continues to be kept
under review.
Dividends
The Board of Directors declared an Interim Dividend of
US$0.395 cents per share, equivalent to €47.3 million. The
Inaugural Dividend is for the nine months ended 30 September
2021. In addition, the Board of Directors approved a dividend
policy to pay between 30% to 50% of the free cash flow of
Proyecto Riotinto to be applied from January 2022.
Creditors’ Payment Terms
The Group does not have a specific policy towards its suppliers
and does not follow any code or standard practice. However,
terms of payment with suppliers are settled when agreeing
overall terms of business, and the Group seeks to abide by the
terms of the contracts to which it is bound.
Treasury shares
As at 31 December 2021 and at the date of this report, the
Company held nil (2020: nil) ordinary shares as treasury shares.
Foreign Exchange
In FY2021, Atalaya recognised a foreign exchange gain of €6.6
million (FY2020 loss: €3.8 million). The foreign exchange gain
mainly related to variances in EUR and USD conversion rates
during the period as all sales are settled and occasionally held
in USD.
The following table summarises the movement
currencies versus the EUR:
in key
Twelve
months
ended
31 Dec 2021
Twelve
months
ended
31 Dec 2020
0.8596
1.1827
0.8403
1.1326
0.8897
1.1422
0.8990
1.2271
Average rates for the
periods
GBP – EUR
USD – EUR
Spot rates as at
GBP – EUR
USD – EUR
During 2021 and 2020, Atalaya did not have any currency hedging
agreements.
Atalaya Mining | Annual Report 2021 28
Management Report | Other Matters
Other Matters
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 acquisition among
other items. The Company also entered into a credit assignment
agreement at the same time with a related company of Astor,
Shorthorn AG, pursuant to which the benefit of outstanding
loans was assigned to the Company in consideration for the
payment of €9.1 million to Shorthorn (the “Loan Assignment”).
The Master Agreement has been the subject of litigation in the
High Court and the Court of Appeal that concluded in November
2018. As a consequence, ARM was obliged to apply any excess
cash (after payment of operating expenses, sustaining capital
expenditure, any senior debt service requirements and up to
US$10 million per annum (for non-Proyecto Riotinto related
expenses)) to pay the consideration due to Astor (including the
Deferred Consideration and the amount of €9.1 million payable
under the Loan Assignment). “Excess cash” is not defined in
the Master Agreement leaving ambiguity as to how it was 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 exchanged statements of case to
set out their formal position. The trial was 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
was heard on 14-15 June 2021. The Court dismissed Astor’s
application meaning the proceedings would continue to Trial.
As previously announced, 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.
In March 2021, the Company fulfilled all conditions required by
the Board and made the early payment of €53 million to Astor.
The payment was fully funded by unsecured credit facilities.
The payment of the Deferred Consideration did not end the
ongoing litigation as the issue as to whether any residual
interest may or may not be payable remained unresolved. On
15 July 2021, the Company transferred €15.4 million to the
Company’s solicitors representing the full amount of interest
claimed by Astor (as at that date) covering the period up to 30
June 2022. The Company’s solicitors provided an undertaking
to Astor’s solicitors to hold the full amount until settlement
of the claim to interest or judgment following the Trial. The
Company understands the monies held on client account by
the Company’s solicitors safeguard the maximum outstanding
liability to Astor in relation to the Master Agreement. On that
basis, and because the Consideration has been paid in full in
accordance with the Master Agreement, the Company treats
itself as free of the obligations set out at clauses 6(g)(iv)(A) and
6(g)(iv)(B) in the Master Agreement.
On 21 March 2022, further to the Trial which took place between
21 February and 1 March 2022, Judgment was handed down.
The Judgment deals with matters of principle. The points that
the Judge has decided will dictate the amount of interest that
is payable.
On the basis of the principles set out in the Judgment, the
parties are in the process of determining the correct interest
calculation. It is clear that an amount will be payable in respect
of interest. A consequential hearing is due to be listed on the
earliest convenient date after 28 March 2022. The Company
has agreed to pay Astor’s costs of the proceedings.
As at 31 December 2021, the Group had accrued interest
amounting to €11.7 million, representing the interest calculation
proposed by Astor. Atalaya is currently working to calculate the
correct interest figure with a view to agreeing the amount with
Astor in accordance with the Judgment. Atalaya expects the
interest due to Astor following the Judgment to be in the range
of approximately €10 million to €11.7 million.
Both parties have a right to appeal the Judgment if granted
leave to do so.
Atalaya Mining | Annual Report 2021 Management Report | Other Matters
29
Share Capital Structure
During 2021, the Company had the following weighted average number of shares outstanding and commitments to issue shares:
Ordinary shares
Options
Diluted
Weighted No. of
Ordinary Shares
138,235,959
3,841,750
142,077,709
In June 2021, the Company granted 1,150,000 share options (2020: 1,050,000 share options) to the key management and employees.
In 2021, Atalaya increased its share capital by 95,250 shares (2020: 801,583) as result of share option executions.
Details on authorised and issued share capital are disclosed in Note 22 of the financial statements.
Significant shareholders
The shareholders holding more than 5% (directly or indirectly) of the issued share capital as of 31 December 2021 are:
Urion Holdings (Malta) Ltd (subsidiary of Trafigura)
Yanggu Xiangguang Copper Co. Ltd
Cobas Asset Management, SGIIC, S.A.
Ordinary Shares 000’s
30,821
30,706
6,959
%
22.30
22.21
5.03
Between 31 December 2021 and the date of approval of the consolidated and Company financial statements there have been
changes on the share capital holding as result of certain issuances of share capital in January 2022 due to share option executions.
Urion Holdings (Malta) Ltd (subsidiary of Trafigura)
Yanggu Xiangguang Copper Co. Ltd
Cobas Asset Management, SGIIC, S.A.
Ordinary Shares 000’s
30,821
30,706
6,959
%
22.04
21.96
4.98
Atalaya Mining | Annual Report 2021 30
Management Report | Other Matters
Related parties
Internal Controls
The Group has transactions with related parties in sales and
other nature associated with its business, as disclosed in
Note 31.
The Audit and Financial Risk Committee, established by the
Board of Directors, is responsible for reviewing and assessing
the adequacy of the overall internal control systems and
accounting procedures of the Company including reviewing the
Company’s procedures for internal control.
Environmental
The Group is committed to conducting its business in
accordance with the spirit and
letter of all applicable
environmental laws and regulations. The Group has the
obligation to restore the operating locations. The nature of
these restoration activities includes dismantling and removing
structures, rehabilitating mines, and tailings dams, dismantling
operating facilities, closure of plant and waste sites and
restoration, reclamation and re-vegetation of affected areas
(Note 26).
Articles of association
The Company’s Articles of Association may only be amended
by Special Resolution at the Annual General Meeting or at an
Extraordinary General Meeting.
Political and Charitable Donations
The Group made no political donations during the year ended
31 December 2021 (2020: €nil). During 2021 the Group made
charitable donations amounted to €nil (2020: €18k). In addition,
Atalaya contributes through its Foundation to financing projects
that benefit local communities in cooperation with local
municipalities based on our Corporate Social Responsibility.
Research and Development Activities
Atalaya carries out research and development activities that
are necessary to support and expand the operations.
Existence of Branches
The Group does not operate any branches.
Statement of Corporate Governance
The Group and the Company give special attention to the
application of sound corporate governance policies, practices
and procedures. Corporate Governance is the set of procedures
followed for the proper management and administration of the
Group. Corporate Governance rules the relationship between
the shareholders, the Board of Directors and the management
team of a company.
The QCA code has been adopted by the Group and the Company
since its inception for Directors’ dealings which is appropriate
for a TSX and AIM listed company. The Directors comply
with Rules 21 and 31 of the AIM Rules relating to Directors’
dealings and will continue to take all reasonable steps to ensure
compliance by the Group’s applicable employees as well.
Corporate Governance Code
The QCA code is inherent to the Company´s foundation and
Atalaya´s medium and long-term success depends on its
compliance with the QCA code and with its forward looking and
long-term objectives.
The Company has adopted a code of standards since its
inception for Directors’ dealings which is appropriate for a TSX
and AIM listed company. The Directors do comply with Rules
21 and 31 of the AIM Rules relating to Directors’ dealings and
will take all reasonable steps to ensure compliance by the
Group’s applicable employees as well.
The Board reviews and is in frequent contact with the CEO and
with other representatives of the Company to see if the Company
and its employees are in a healthy working environment and to
check if the state of the culture represents its values.
The Company is incorporated in Cyprus, so it is subject to
Cypriot laws and regulations, and is subject to the regulations
of AIM and TSX, its trading platforms. There is no conflict
there and in fact makes it easier to be more transparent and
straightforward with its shareholders.
Atalaya Mining | Annual Report 2021 Management Report | Other Matters
31
Quoted Company Alliance (QCA)
Composition, Responsibilities and
Remuneration of the Board of Directors
The QCA is an independent membership 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 version of the Code includes 10
corporate governance principles that companies should follow,
and step-by-step guidance on how to effectively apply these
principles.
Please refer to the Corporate Governance Report for further
details.
The members of the Board of Directors as at 31 December 2021
and on the date of this report are presented in the Corporate
Governance report. There were no significant changes in the
assignment of responsibilities of the members of the Board of
Directors.
For further details on the composition, responsibilities and
remuneration of the Board of Directors, please refer to the
Corporate Governance Report.
Members of the Board of Directors
The Board of Directors, during the year 2021 comprised:
Directors’ Responsibilities
Financial Statements
for
the
h Roger Davey
Independent Non-executive Chairman
Cyprus company law states that the Directors are responsible
for the preparation of financial statements for each financial
year which give a true and fair view of the state of affairs of the
Company and of the Group and of the profit or loss of the Group
for that period.
In the preparation of these financial statements, the Directors
are required to:
h select suitable accounting policies and then apply them
consistently;
h make judgements and estimates that are reasonable and
prudent; and
h state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements.
h Hussein Barma
Independent Non-executive Director
h Stephen Scott
Independent Non-executive Director
h José Sierra
Independent Non-executive Director (***)
h Neil Gregson
Independent Non-executive Director (*)
h Damon Barber
Non-executive Director (**)
h Jesús Fernández
Non-executive Director
h Harry Liu
Non-executive Director
h Alberto Lavandeira
Non-Independent Chief Executive Officer
The Directors are responsible for maintaining proper accounting
records, for safeguarding the assets of the Group and for taking
reasonable steps for the prevention and detection of fraud
and other irregularities. Legislation in Cyprus governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
(*) On 10 February 2021, the Board of Directors appointed Neil Gregson
as an independent Non-executive Director of the Company.
(**) On 12 April 2021, the Company announced that Mr. Damon Barber
stepped down as a Non-Executive Director of the Company with
immediate effect.
(***) On 25 March 2021, the Company announced that Dr. José Nicolas
Sierra retired as Independent Non-Executive Director and as Chair of the
Physical Risk Committee of Atalaya, with an effective date of 31 March
2021.
Atalaya Mining | Annual Report 2021 32
Management Report | Other Matters
Auditors
The auditors, Ernst & Young Cyprus Ltd., have expressed their
willingness to continue in office and a resolution approving their
reappointment and giving authority to the Board of Directors
to set their remuneration will be proposed at the next Annual
General Meeting.
Company secretary
Inter Jura CY (Services) Limited serve as the Company
Secretary. The Company Secretary is appointed and dismissed
by the Board of Directors and all directors have a right of
access to the Company Secretary. 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.
Events after the Reporting Period
Any significant events that occurred after the end of the
reporting period are described in Note 35 to the financial
statements.
By Order of the Board of Directors,
Roger Davey
Chairman
Nicosia, 23 March 2022
Atalaya Mining | Annual Report 2021 Management Report | Principal Risks and Uncertainties
33
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.
h Strategic risks;
h Commercial and financial risks;
h External risks; and
h Operational risks
Atalaya´s principal risks have continued to fall within four
categories:
Strategic Risks
Nature of the Risk
Mitigation of Risk
Single asset, single
commodity and single
country risk
The Company´s current production relates
to Proyecto Riotinto, which
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.
is
Lack of replacement of
reserves
Atalaya must continually replace and expand
its mineral resources. The depletion of its
mineral reserves may not be offset by future
discoveries or acquisitions.
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.
On-going exploration campaigns currently in
areas close to Proyecto Riotinto. During 2021,
Atalaya incurred a total of EUR €1.8 million in
exploration activities. During 2021, Atalaya
has acquired surrounding deposits, including
Proyecto Ossa Morena. Atalaya has also
increased its exploration budget for 2022 to €10
million.
Underestimation
of
capex, finance and
licence to operate
Atalaya’s capital expenditure at future projects
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.
Importance
Low
Medium
High
Atalaya Mining | Annual Report 2021 34
Management Report | Principal Risks and Uncertainties
Commercial and
Financial Risks
Significant changes to
commodity prices
A decline in the price of copper and other
metals in world markets, which can fluctuate
widely, could adversely affect Atalaya´s
business, operating results and prospects.
Nature of the Risk
Mitigation of Risk
Inflation and cost pressure
to supply chain
Recent geopolitical conflicts have result in
significant increases on prices for certain
product, with a particular impact on electricity
prices.
Limited number of
customers
A significant portion of Atalaya´s concentrate
production
three offtakers.
Offtakers’ business can significantly impact
the Company’s operations.
is sold
to
The mine’s cash costs are below the
market price for copper, even at recent
cyclical
is constantly
monitoring commodity prices and
revisiting hedging strategies and policies.
lows. Atalaya
Monitoring trend on prices and closing,
where available long term agreement to
reduce the exposure to volatility prices.
Close contact with offtakers to ensure we
understand how they run their business.
Lack of control over certain
key inputs
to control
the
Atalaya may be unable
availability of key
inputs such as fuel,
cement and explosives, which are beyond
management’s influence.
The purchase department of
operating
is
company
expanding their network
ensure our supply chain is secure.
the
continually
influence to
Foreign exchange risk
Volatility in the EUR:US$ exchange rate affects
the Group’s profitability.
is
Atalaya
continually monitoring
exchange rate and revisiting hedging
strategies policies.
Liquidity risk
Atalaya’s operations and business model are
subject to a variety of financial risks of third
parties.
the
in accordance with
liquidity and financing
the
Manage
structure
business model.
Maintain a diverse portfolio of banks and
funds.
In addition to the above commercial and finance risks, please refer to Note 3 of the financial statements for further details on the
financial risk management policy adopted by the Group and the Company.
Operational Risks
Nature of the Risk
Mitigation of Risk
Tailing dam permitting
Mining operations depend on the permit that
need to be renovated during the Life of Mine
of the operation. Recent failures in mining
projects worldwide and increase in regulation
and standards may impact the business
Atalaya maintain communications with
communities and stakeholders, including
the Public Administration, and proactively
invest to improve safety of the operation
beyond legal standards.
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.
IT department
is regularly
Atalaya’s
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.
Atalaya Mining | Annual Report 2021 Management Report | Principal Risks and Uncertainties
35
External Risks
Nature of the Risk
Mitigation of Risk
Political, legal and regulatory
developments
Atalaya is subject to extensive regulation,
licences, and
concessions, authorisations,
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.
Geopolitical conflicts
Economic conditions
Public health threats
Recent conflicts between countries have
impacted general economic conditions
worldwide, including migration flows, volatility
in regulated markets and inflation pressure.
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.
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
for significant
business decisions.
taxation
Monitoring commodities prices and
international economic variations.
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
imposed
instructions and restrictions
or recommended by the Authorities to
reduce exposure. It is also adhering to
all measures implemented by the central
and regional governments.
Dependence on key
infrastructure
Operational risks and
hazards
is dependent on
Atalaya
transportation
facilities, infrastructure and certain suppliers,
a lack of which could impact its production
and development projects.
Atalaya´s contractors are very reliable.
Atalaya maintains contingency plans to
ensure operations would not be affected.
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.
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.
Atalaya Mining | Annual Report 2021 Atalaya Mining | Annual Report 2021 Directors’
and Officers’
Statement
38 Directors’ and Officers’ Statement
Atalaya Mining | Annual Report 2021 38
Directors’ and Officers’ Statement
Directors’ and Officers’
Statement
Statement by the members of the Board of Directors and the Company
officers responsible for the drafting of the consolidated and Company financial
statements in accordance with the provisions of the Cyprus Law 190(I)/2007
on transparency requirements.
We, the Members of the Board of Directors and the Company officers responsible for the drafting of the consolidated and Company
financial statements of Atalaya Mining plc for the year ended 31 December 2021, confirm that, to the best of our knowledge:
h 1) The consolidated financial statements and the Company financial statements on pages 100 to 105:
a. have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European
Union and the requirements of the Cyprus Companies Law, Cap.113. For the year ending 31 December 2021, the standards
applicable for IFRS’s as adopted by the EU are aligned with the IFRS’s as issued by the IASB, and,
b. give a true and fair view of the assets, liabilities, financial position and profit or loss of Atalaya Mining Plc and the
undertakings included in the consolidated and Company financial statement taken as a whole; and
h 2) The Management Report includes a fair review of the development and performance of the business and the position
of Atalaya Mining Plc and the undertakings included in the consolidated and Company financial statements as a whole,
together with a description of the principal risks and uncertainties that they face, and
h 3) The adoption of a going concern basis for the preparation of the consolidated and Company financial statements
continues to be appropriately based on the foregoing and having reviewed the forecast financial position of the Group and
Company.
The Officers and the Directors of the Company
as at the dated of this statement are set out below:
By Order of the Board of Directors
Alberto Lavandeira
Chief Executive Officer
César Sánchez
Chief Financial Officer
Roger Davey
Chairman
Nicosia, 23 March 2022
Atalaya Mining | Annual Report 2021 39
Atalaya Mining | Annual Report 2021 Atalaya Mining | Annual Report 2021 Strategic
Report
Letter from the Chairman
42
44 Market Overview
49 Strategic Framework
53 Key Performance Indicators
Atalaya Mining | Annual Report 2021 42
Strategic Report | Letter from the Chairman
Letter from the
Chairman
Dear Shareholder,
2021 was another year dominated by the Covid 19 pandemic with
the Company maintaining, as its primary focus, the continued safety,
protection, and well-being not only of our staff and contractors but also
the community and our suppliers. Despite these external challenges,
the operational and financial health of the Company was not overlooked
and the Company continued to build on its 2020 operational track record,
culminating in a record annual production for 2021 of just over 56,100
tonnes of contained copper.
The average process plant feed grade of 0.41% copper and the process
recovery rate of 86% were consistent with reserve estimates and budgeted
figures. Cash Costs and All-in Sustaining Costs for 2021 of $2.18/lb and
$2.48/lb respectively, were below the lower end of the revised 2021 cost
guidance, mainly due to the combination of the U.S. dollar strengthening
against the Euro and higher copper tonnes produced. The open pit mining
schedule is supporting a slightly higher mined grade for 2022 and with
process plant optimisation initiatives expected to further support copper
production, output guidance has been set at 54,000 to 56,000 tonnes of
contained copper for 2022.
The executive team was able to capitalise not only on the continued high
level of operational performance but also the higher copper price scenario
during 2021 with revenue increasing to €405.7 million from €253.8 million
in 2020, and EBITDA for 2021 of €199.1 million, compared to €67.4 million
in 2020. The resulting free cash flow generated enabled the Company
to reward investors with an inaugural dividend pay-out of €47.3 million,
equivalent to $0.395 per share, in December. Despite the previously
announced payment of the deferred consideration to Astor, the Company
finished the year with net cash of €60.1 million and in a robust position,
based on consensus copper pricing, to maintain a future meaningful and
sustainable dividend policy of 30% to 50% of Free Cash Flow.
The completion and implementation of flotation circuit improvements
and the installation of additional tailings thickening capacity to reduce
freshwater consumption, with consequent reduction in lime consumption,
have combined to reduce overall power consumption and carbon
footprint. As well as being economically advantageous, the completion of
the permitting and the integration of the planned 50 MW solar plant on
site will be a significantly factor, and major contributor to the attainment of
corporate sustainability objectives.
Atalaya Mining | Annual Report 2021 Strategic Report | Letter from the Chairman
43
Mine site exploration and infill drilling continued with successful
replacement of mineable reserves and maintenance of mine
life despite the increased rate of mining depletion.
For additional growth prospects the Company is currently
focusing on four main projects. In the north of Spain, at Proyecto
Touro, the Company is engaging with local and regional
stakeholders whilst progressing, according to internationally
recognised best practice, with the preparation and submission
of the Environmental Impact Evaluation for the revised project.
In the south, at Proyecto Masa Valverde, exploration work is
ongoing, with encouraging drilling results. An electromagnetic
airborne geophysical survey which started at the end of 2021
has now been completed, covering investigation permits located
immediately east of Proyecto Riotinto. Several anomalies have
been identified by the survey for follow-up exploration drilling.
In December, the Company announced the acquisition of a 51%
interest in Rio Narcea Nickel S.L., establishing a presence in the
Ossa Morena Metallogenic Belt in the southwest of Spain, an
area that includes the Alconchel copper-gold project.
In January of this year, the Company announced the start of
construction of an industrial-scale E-LIX plant at Proyecto
Riotinto. The plant will utilise the E-LIX System, an extraction
process developed, patented and owned by Lain Technologies
Ltd, to produce copper and zinc metals from sulphide
concentrates. E-LIX has the potential to unlock significant
value from the Company’s portfolio of polymetallic resources
in the Proyecto Riotinto district by materially increasing the
recoveries of copper, zinc, lead and precious metals from
complex sulphide ores. The plant has a construction budget of
€12 million and will have the capacity to produce up to 10,000
tonnes of metal annually, depending on the copper/zinc mix,
thus reducing the transportation costs and treatment charges
and penalties associated with producing and delivering
conventional concentrates.
I would like to take this opportunity to express our appreciation
for the continued dedication and commitment of the
management and staff who have been responsible for such
excellent results in this difficult year. At the same time, I would
like to thank not only the board members for their continued
support, guidance and close involvement with the Company
activities, but also our valued shareholders for their continued
and appreciated support. Dr.José Sierra López retired from the
board during the year. In addition, Mr. Damon Barber stepped
down in April 2021. On behalf of the Board I would like to take
this opportunity to thank both for their efforts and assistance
over the many years with the Company and wish Dr. José Sierra
well in his retirement, and at the same time to welcome Neil
Gregson to the Board.
To date, 2022 is seeing considerable inflationary pressures, with
increased volatility in both costs and commodity markets as a
result of the recent geopolitical events in Ukraine. Nevertheless,
commodity prices remain strong and strengthened by the
experience and improvements achieved over these last two
difficult years, we look forward with confidence to continuing
investment in our portfolio of projects to continue the growth
path, and increase the value, of your Company.
Roger Davey
Chairman of Atalaya Mining Plc
23 March 2022
Atalaya Mining | Annual Report 2021 44
Strategic Report | Market Overview
Market Overview
Copper Definition (as defined by ICSG)
Copper market (source 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 sulphide deposits (as
chalcopyrite, bornite, chalcocite, covellite), in
carbonate deposits (as azurite and malachite),
in silicate deposits
(as chrysocolla 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 compromised,
is an important factor in ensuring society’s sustainable
development.
29
Cu
Copper
Atomic weight
63.54
Density
8,960 kg/m3
Melting point
1,356 K
Historical mine production in thousan Metric Tonnes Copper.
Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Copper (kt)
13,487 kt
13,699 kt
14,594 kt
14,927 kt
14,983 kt
15,508 kt
15,532 kt
15,941 kt
15,987 kt
15,960 kt
16,687 kt
18,185 kt
18,422 kt
19,153 kt
20,393 kt
20,058 kt
20,565 kt
20,528 kt
20,634 kt
21,000 kt*
* According to the preliminary data released by the U.S. Geological
Survey (USGS), estimated global mine production of copper was
21 million tonnes in 2021, or 2% higher than in 2020 (20.6 million
tonnes).
Atalaya Mining | Annual Report 2021 Strategic Report | Market Overview
45
Top five copper mine production countries (2021)
United States
5
3
China
Peru
2
1
Chile
4
D. R. Congo
Major international trader flows of copper ores and concentrates (source ICSG)
Major Exporters of Copper Ores and Concentrates, 2020
United States
6
3
México
Kazakhstan
9
5
Mongolia
D.R. Congo
10
Peru
2
1
8
Brazil
Chile
Indonesia
7
Australia
4
Atalaya Mining | Annual Report 2021 46
Strategic Report | Market Overview
Major Importers of Copper Ores and Concentrates (2020)
Finland
9
Germany
Spain
4
5
6
Bulgaria
Russian Federation
10
Korea Rep.
China
1
Japan
2
3
7
México
India
8
v
The uses of Copper
h Electrical
is
Copper
the best nonprecious
metal conductor of electricity as it
encounters much
resistance
compared with other commonly used
metals. It sets the standard to which
other conductors are compared.
less
h 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 architectural bronze, is used in a
variety of settings to build facades,
canopies, doors and window frames.
h Consumer and
General Products
Copper and copper‐based products
are used in offices, households and
workplaces. Computers, electrical
appliances, cookware, brassware,
and locks and keys are just some
of the products exploiting copper’s
advantages.
h Electronics
and Communications
Line)
Copper plays a key role in worldwide
information and communications
(High Digital
technologies. HDSL
Subscriber
ADSL
and
(Asymmetrical Digital Subscriber
Line) technology allows for high‐
speed data transmission, including
internet service, through the existing
copper
infrastructure of ordinary
telephone wire.
28%
Building and
construction
13%
Transport
source ICSG
31%
Equipment
16%
Infrastructure
12%
Industrial
h 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 tolerances, copper alloys are
ideal for making products such as
gears, bearings and turbine blades.
h Transportation
All major forms of transportation
depend on copper to perform critical
functions. Copper‐nickel alloys are
used on the hulls of boats and ships
to reduce marine befouling, thereby
improving fuel
reducing drag and
consumption.
and
trucks rely on copper motors, wiring,
radiators, connectors, brakes and
bearings.
Automobiles
Atalaya Mining | Annual Report 2021 Market Price
Spot Market Cu Price
Strategic Report | Market Overview
47
In 2021, copper traded between $3.62 and $4.62 per pound
of copper. The spot price for copper was $3.62 as in January
2021 and $4.62 as in May 2021, reflecting an increase of 27.8%
for the period. The average market price for 2021 of $4.23/lb,
51.0% higher than the average for 2020.
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 2021 and 2020 were:
(USD)
2021
2020
Realised copper price per lb
4.14
2.70
Market copper price per lb (period
average)
4.23
2.80
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. Lower 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 lower. The realised price
during the year, excluding the QP, was approximately $4.22/lb.
Spot Vs Realised price
Spot
Realised price
Realised price (excl. QP)
2.002.50Jan-203.003.504.004.505.00Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-212.002.50Jan-203.003.504.004.505.00Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Atalaya Mining | Annual Report 2021 48
Strategic Report | Market Overview
Atalaya’s Response
The Group had no hedges on commodities prices during 2021. At the date of this report, the Group is fully exposed to copper prices
with no commodities hedging agreements in place.
Foreign Exchange
FX rates EUR:USD
Foreign exchange rate movements can have a significant effect
on Atalaya’s operations, financial position and results. Atalaya’s
sales are denominated in U.S. dollars (“USD”), while Atalaya’s
operating expenses, income taxes and other expenses are
denominated in Euros (“EUR”), and to a much lesser extent in
British Pounds (“GBP”).
Accordingly, fluctuations in the exchange rates can impact the
results of operations and carrying value of assets and liabilities
on the balance sheet.
Atalaya’s Response
In 2021, 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.
Jul-21Aug-21Sep-21Oct-21Nov-21Dec-211.001.05Jan-201.101.151.201.25Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Atalaya Mining | Annual Report 2021 Strategic Report | Strategic Framework
49
Strategic 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
h Importance of Safety, Health, Environment &
Security
h Strong workforce with longstanding
employees
Operational excellence
h Importance of cost management
h Establishing high performance
h Operating to a word-class standard
h Maximising production capacity
Creating value
h Increasing asset value under management
h Focusing on generating free cash flows
h Focusing on creating value for shareholders
h Allocating capital efficiently
h Creating opportunities for growth
Social projects and
environmental
Our people
Our business
Our future
h Working closely with communities
h Contributing to community development
Support local communities
and protect the environment
Atalaya Mining | Annual Report 2021 Principal
Risks
Operational
Risks
External Risks
Principal
Risks
Financial
Risks
Operational
Risks
50
Strategic Report | Strategic Framework
Our people
Key Driver
Achievements
Cut expenditures to
reduce environmental
impact
Average 500 employees
99.5% based at mine
sites
Socially responsible
through Fundación
Atalaya Riotinto
h Environmental matters are discussed
across the Group from the operating
workforce to the Board of Directors.
h Continuous communication with
regulatory bodies and shareholders to
ensure a safe world-class operation.
h Experienced mining team to ensure
proper safety, health and security
policies.
h Focused on creating a high-
performance culture where its people
are its core asset.
h Atalaya has a flat management
structure with accessible people.
h Atalaya’s personnel are primarily
based at sites.
h Focused on improving its
relationships with local government
and communities.
h Limited presence in the media, with
efforts focused on direct contact with
people.
2021 Achievements
h Increased the number
of employees at
Proyecto Riotinto.
h Better monitoring
process of safety
records.
h Prompt responses to
COVID-19.
h Little impact of
COVID-19.
2022 Priorities
h Further improve health
and safety statistics.
h Continue support to
local and regional
governments to
control COVID-19
incidence.
h Reduce LTI compared
with 2021.
Our business
Key Driver
Achievements
h World-class processing plant in
Europe to maximise value of the
Group, thereby increasing free cash
flows from operations.
h Ensure the ongoing stable growth of
the Company.
h Protecting and enhancing the value
for all stakeholders.
15.8m tonnes of ore
processed
2021 Achievements
56k tonnes of Cu
produced
€199.1m EBITDA
€148.8m cash flows
from operations
€107.5m cash balance
as at 31 December 2021
h Production at Proyecto
Riotinto in excess of
guidance.
h Consolidation our
internal growth with
production levels of
15Mtpa.
h Contained All-in
sustaining cost.
h Acquisition of 51% Rio
Narcea Nickel S.L.
h Operational continuity
despite COVID-19.
h Acquisition of new
mining projects.
2022 Priorities
h Further growth via
project development
or acquisitions.
h Continue with strong
operational results.
Atalaya Mining | Annual Report 2021 Strategic Report | Strategic Framework
51
Principal
Risks
Strategic
Risks
External Risks
Our future
Key Driver
Achievements
Increase in reserves and
resources by exploration
or acquisition of other
deposits
h Evaluation of existing capacity of
each project and investment in
exploration to replace reserves
deployed.
h With a view to becoming a multi-asset
producer focussed in copper.
h Focus on the development of low-
cost assets in mining-favourable
jurisdictions.
h Searching and evaluating projects
around the world.
2021 Achievements
h Investment of €5.9
million (2020: €5.6
million) in sustaining
Capex in Proyecto
Riotinto.
h Investment of €14.1
million in tailing dams
improvements.
2022 Priorities
h Continuing exploration
works to expand
the reserves and
resources of Proyecto
Riotinto.
h Exploration in
Proyecto Masa
Valverde and Rio
Narcea Nickel.
h Monitoring new
opportunities related
with metals.
h Working to
understand and
resolve environmental
permitting decision on
Proyecto Touro.
h Construction E-LIX
Plant.
Atalaya Mining | Annual Report 2021 Principal
Risks
Operational
Risks
External Risks
52
Strategic Report | Strategic Framework
Support local communities
Key Driver
Achievements
h Atalaya Mining is committed to
responsible mining and upholds
its core principles of honesty and
accountability.
h The Company works with all
stakeholders to ensure that its values
are completely aligned with the local
community and environment.
68 actions programmes
through Fundación
Atalaya
2021 Achievements
h Investment of €0.7
million in local
communities at
Proyecto Riotinto.
h €25.8 million taxes
paid globally.
h Support for local
community events at
Proyecto Riotinto and
Proyecto Touro.
h Support and
assistance in the
COVID-19 sanitary
emergency.
2022 Priorities
h Increase support
and presence in local
community projects
around Proyecto
Riotinto and Touro.
h Increase community
engagement in Touro.
Atalaya Mining | Annual Report 2021 Strategic Report | Key Performance Indicators
53
Key Performance Indicators
Ore mined
Ore processed
Copper contained in
concentrate
Cash cost
AISC
t
t
t
$/lb
$/lb
2016
2017
2018
2019
2020
2021
7,754,499
9,340,028
10,753,598
10,366,903
13,604,801
13,535,470
6,505,762
8,796,715
9,819,839
10,453,116
14,833,916
15,822,610
26,179
37,164
42,114
44,950
55,890
56,097
1.95
1.91
2.30
2.80
1.94
2.26
2.93
1.80
2.14
2.72
1.95
2.21
2.80
2.18
2.48
4.23
Market copper price
$/lb
2.21
EBITDA
€`000
15,393
41,347
53,542
61,333
67,444
199,114
WC surplus / (deficit)
€`000
(25,382)
22,137
8,435
3,598
(17,904)
102,430
Cash at bank
€`000
1,135
42,856
33,070
8,077
37,767
107,517
Atalaya Mining | Annual Report 2021 Atalaya Mining | Annual Report 2021 Sustainability
Report
56 Our Commitment to Sustainability
58 Good Governance and Responsible Management
60 People
63 Safety Operation
64
66 Society
68
Environment and Climate Change
Innovation and Technology
Atalaya Mining | Annual Report 2021 56
Sustainability Report | Our Commitment to Sustainability
Our Commitment to
Sustainability
Atalaya Mining Plc is committed to sustainability and to conducting its
activities in accordance with the highest Environmental, Social and Governance
standards.
Mining, due to its characteristics, is an activity that can
generate significant impacts in the areas where it is carried
out. However, if properly managed, negative impacts can be
mitigated and mining can become an engine for generating
wealth, developing the human capital of the local community
and promoting environmental projects that ensure the
conservation of the environment for future generations to
enjoy. At the same time, mining commodities such as copper
play a key role in helping society to achieve an environmentally
friendly future.
the proposal of new projects are aligned with these principles.
This strategy also aims to ensure that the sustainable
exploitation of its projects provides society with essential raw
materials required for the achievement of the goals established
by the main national and international sustainability policies
such us climate change mitigation and energy transition.
Mining activity, and copper mining in particular, is essential
for the development of renewable energies, construction,
digitalization and the electrification of numerous other
processes such as transportation.
Atalaya has developed its operation in accordance with these
principles since the beginning of its activity in 2015, offering the
Riotinto Mining Basin a mining project that has been a source
of prosperity and sustainable development for the region,
having achieved outstanding results since mine restart.
Beyond our Proyecto Riotinto, the Company sees sustainability
as a key element in its future growth.
The approval of this new sustainability strategy coincides with
an important change in the Company’s internal culture, which
has also resulted in the creation of a specific department
in charge of the global management of ESG aspects and
improving coordination of the efforts developed by different
areas, and the incorporation of sustainability in our dialogue
with investors and other stakeholders.
To this end, the Company has developed a specific sustainability
strategy to ensure that the management of its operations and
transparent communication of our
Also,
impacts and
achievements is a very important step in the consolidation of
this new sustainability culture.
Atalaya Mining | Annual Report 2021 Sustainability Report | Our Commitment to Sustainability
57
Atalaya Mining Plc has prepared its first Sustainability Report
for 2021 in accordance with the Global Reporting Initiative
(GRI) and has been approved on 23 March 2022.
To make this objective possible, the Company has completed
a materiality assessment to define which aspects are key in
terms of sustainability and will be the focus of its management
and reporting efforts in the coming years.
Finally, in the context of its commitment to sustainability,
Atalaya has also
joined various prestigious corporate
frameworks and initiatives, thus joining forces with other
companies and organizations to advance in the achievement
of major sustainability goals.
“Beyond our Proyecto Riotinto, the
Company sees sustainability as a key
element in its future growth.”
Atalaya Mining | Annual Report 2021 58
Sustainability Report | Good Governance and Responsible Management
Good Governance and Responsible
Management
Atalaya largely attributes its success to good governance
within its organization and recognises the importance of
responsible management to deliver a good performance and
meet is environmental, social and governance commitments
and desires. The good governance in Atalaya rules the
relations between shareholders, Board of Directors and
management of the Company, generating transparency, trust,
credibility and security.
Ethics
The Company relies on a number of corporate policies and procedures to achieve
responsible management.
One of the most important is the Code of Business Conduct and Ethics, a set of
rules and procedures to reinforce ethical behaviour within the Company and provide
guidance on appropriate working methods. The code is reviewed at least annually
by the Board and the Corporate Governance Nominating Compensation (CGNCC)
Committee is responsible for oversight compliance.
To ensure compliance with the provisions of the code, Atalaya has established a
system for the receipt of complaints and reports of possible breaches. This scheme
is formalised in the Whistle-blower Policy adopted by the Company. This policy will be
communicated to all employees and states that any of them may make a complaint,
which will be treated anonymously and confidentially.
Beyond the Code of Business Conduct and Ethics, Atalaya Mining plc has other
internal policies and procedures to ensure integrity in its operations.
These include a conflicts of interest policy, which states that Directors must disclose
to the Board actual or potential conflicts that may or might reasonably be thought
to exist between its own interests and the ones of the Company. On appointment,
Directors will have an opportunity to declare any such interests and they will be
entered into the Company’s Register of Ongoing Conflicts of Interest.
Atalaya Mining | Annual Report 2021 Sustainability Report | Good Governance and Responsible Management
59
Compliance management system
Risk prevention
Atalaya has initiated the implementation of a compliance
system to reinforce the controls in place in the Group’s Spanish
operating entity (Atalaya Riotinto Minera, SL) and to reduce
the risk of the Company, as a legal entity, and its employees
committing criminal offences that could imply future criminal
liability.
The Compliance system of Proyecto Riotinto is part of the
Company’s Integrated Management System and is made up of
various elements such as: a risk map assessing the criminal
risks in which the Company could incur and the Criminal
Liability Prevention Manual, which sets out the principles of
prevention and management within the Company, among
others. Additionally, Atalaya has made progress in defining the
criminal compliance body that will oversee these issues in the
Company, as well as the procedure it will follow after identifying
non-compliance or practices that could be subject to criminal
offences. To ensure a good understanding and implementation
of the system, a programme has been launched to provide the
necessary training to employees in this area.
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.
Proper management of these risks has a positive impact on
stakeholders as it reduces the potential impact on shareholder
return on investment, the maintenance of employment and the
local environmental where the Group’s mining operations are
located.
Therefore, Atalaya Mining plc has a Risk Management Policy
whose objective is to assist the Company in establishing an
effective system of risk control and internal control.
Also, the Group has adopted a financial risk management policy
which establishes key principles in managing its exposure to
key financial risks. The objective of the policy is to support the
delivery of the Group’s financial targets while protecting future
financial security. The Group’s senior management oversees
the management of financial risks with the support of the
AFRC (Audit and Financial Risk Committee).
Atalaya Mining | Annual Report 2021 60
Sustainability Report | People
People
The Group employs 506 people in 2021. A significant
proportion of them work at Proyecto Riotinto and, although the
majority are men, the Company has a much higher proportion
of female employees than the industry average in Spain. Our
workforce also enjoys a high degree of stability.
The Company has relied heavily on people from the Riotinto surrounding communities
to create this workforce. In doing so, the Company demonstrates its commitment to
the local community and to making the exploitation of mining resources a source of
wealth and prosperity to contribute to the sustainable development of the area. The
Company will issue its sustainability report for the year ended 31 December 2021 on
24 March 2022.
People management policy
The consolidation of a trained and effective workforce capable of sustaining the
growth of operations has been a priority for Atalaya since the start of its operations.
In 2012, the Company had 50 employees, a figure that has risen to 506 by the end of
2021. Integrating this workforce, the majority of whom come from an economically
depressed local environment, has been a challenge that has been the focus of most
of our people management efforts.
Having overcome this situation, the Company has progressively advanced in the
development of new management policies governing all activities in the life cycle of
our people, such as selection, recruitment, training, assessment and development,
remuneration, improvement of the working environment and termination of the
employment relationship.
Atalaya Mining | Annual Report 2021 Sustainability Report | People
61
Equal opportunities and non-
discrimination
Atalaya operates within a favourable framework for labour
relations based on a non-discriminatory, equal opportunities
system that respects diversity at all levels. This principle is
shrined into the corporate Code of Conduct and the rest of the
policies of the Company.
In 2021, Atalaya created a Diversity Committee with the mission
of promoting different projects to raise awareness in society
and the Company in this area and to encourage the necessary
programs to correct existing imbalances. Likewise, during the
year the Company has initiated the development of a specific
Equality Plan which seeks to ensure equal opportunities for
men and women within the Company.
For the moment, Atalaya has completed a diagnosis, conceived
as an initial negotiation phase, within the framework of a
negotiating committee with representatives of the Company
and the employees, about the equality data to be considered,
a collection of qualitative and quantitative information and an
analysis of the evolution in the latest years. After this initial
diagnosis, the final plan will be completed in 2022 including key
goals to be reached and specific actions to make it possible.
Equally, the Company will present in 2022 the result of other
actions, currently under development, aimed to prevent
potential situation of exclusion such as an anti-bullying
protocol, an equal opportunity plan and an intervention plan to
be presented by the Diversity Committee.
Freedom of association
Training and professional development
Integrated Management System of Proyecto
Within the
Riotinto, training and awareness needs are identified, as well
as the implementation and evaluation of actions carried out by
staff.
Atalaya has an Annual Training Plan aimed at the entire staff
of the Company and it includes legal requirements (e.g.
Basic mining safety standards, guidelines for mobile mining
machinery, etc.), as well as geological mining management
software training (QGIS), occupational health and safety
training, and environmental awareness training.
In addition to the activities aimed at the training and
development of its own staff, Atalaya has promoted various
projects with other academic and business organizations to
promote the training of students who may eventually develop
their careers in the Company or in other companies, and to
improve the employability of other people in the Riotinto Mining
Basin.
Fair compensation
In accordance with the Company’s Code of Ethics, Atalaya’s
salary policy promotes equal opportunities among staff
members.
The remuneration of our people is established in accordance
with the Collective Bargaining Agreement, although for the most
trained personnel, specific conditions have been established
that depend on the fulfilment of key Company objectives in
terms of safety, production or compliance with the budget.
Atalaya complies with the rights of association, with full
freedom in trade union elections and has a Collective Bargaining
Agreement, thus avoiding labour disputes. A new agreement
will be negotiated in 2022.
The Collective Bargaining Agreement also includes some other
benefits such as study grants, reduced summer working hours,
shift bonuses, etc., which are offered on equal terms to all our
employees.
Relations between the Company and the workers are articulated
in the tools established by Spanish law, one of the most
important is the Works Council, which consist of 13 members
elected by the workers. The highlights of 2021 included: holding
of elections for Workers’ Representatives; negotiations for the
development of an Equality Plan and participation of the Works
Committee in the implementation of measures to manage
COVID-19 crisis.
Flexibility and transparent
communication
In addition to the policies outlined above, flexibility and
transparent communication are two other elements in the
value proposition that Atalaya offers its employees. In the
area of flexibility and family reconciliation, the Company has
implemented various measures included in its collective
bargaining agreement, such as daily flexible working hours.
Atalaya Mining | Annual Report 2021 62
Sustainability Report | People
that
transparent
the benefits
Likewise, and aware of
communication can bring
improving the Company’s
in
internal climate, employee motivation and identification with
the business project, Atalaya has created various internal
communication mechanisms through which it shares with
its employees the most important events in the activity or the
priorities to be addressed for the future. These include the
existence of a specific platform for internal communication,
the publication of a periodic newsletter, the holding of face-
to-face meetings and the broadcasting of the most important
messages and news through television screens located in
different parts of the facility.
Atalaya Mining | Annual Report 2021 Sustainability Report | Safety Operation
63
Safety Operation
the current legislation. In addition, the Company developed
a specific programme to improve the training of its own self-
protection brigade.
Since the beginning of its activities, Atalaya has been committed
to guaranteeing safety and preventing any accidents in the
mining operation. To achieve this, it has formalized a Major
Accident Prevention Policy that establishes the principles
to achieve the highest level of protection and serves as the
basis for the Safety Management System implemented by the
Company.
The practices and procedures established by this system
complement the safety project developed by the Company for
its mining operation at Riotinto, which from the beginning has
been designed considering the most stringent standards.
Throughout 2021, the Company has continued to strengthen
its safety systems and management practices in day-to-day
operations. Some of the most important actions have been the
reinforcement of geotechnical control of the tailings deposit
and dumps with quarterly audits by an authorised control
body, the
implementation of new monitoring techniques
to improve geodetic and geotechnical monitoring, and the
provision of specialised training for employees in mining waste
management.
The Company’s good safety performance has been recognized
by the external audits received by the Proyecto Riotinto
throughout the year. It has also served as the basis for an active
knowledge-sharing effort, through which Atalaya collaborates
with other public bodies and companies in the sector to jointly
improve the safety of mining activities. Likewise, Touro and
Masa Valverde projects have been aligned perfectly with the
Group’s safety policies.
Self-protection plan
For Atalaya it is of utmost importance to have a self-protection
plan that takes into account all risk scenarios. The plan aims
to foresee all possible emergency situations and to establish
actions, provide adequate responses and serve the authorities.
Current self-protection plan for Proyecto Riotinto was updated
by the Company in December 2020 and submitted to the
competent authorities. It undergoes an annual external audit
and, also, internal audits of the integrated management system.
Emergency drills are one of the main actions established by
the self-protection plan. In 2021, Atalaya conducted two drills
at its Proyecto Riotinto, exceeding the frequency required by
Occupational Health and Safety
In addition to project safety, Atalaya is committed to ensuring
the occupational health and safety of all people working on the
project, regardless of whether they are Company employees or
external contractors involved in the operations.
To achieve this, the Company has implemented an Occupational
Health and Safety Management System which has been
externally certified in accordance with ISO 45.001:2018. This
management system extends to all personnel at Proyecto
Riotinto including subcontractors.
In order to be able to deploy this system and achieve the
established security objectives Atalaya has set up its own
Prevention Service which includes the three specialities in
prevention (industrial hygiene, safety at work, ergonomics and
applied psychosociology) and has arranged health surveillance
with an external prevention service. Each department has one
or more technicians appointed to monitor working conditions.
The Company has also set up an occupational health and safety
committee made up of representatives of the workers and the
Company, which meets periodically to analyse developments
in the most relevant aspects related to occupational health and
safety.
COVID-19 prevention strategy
Atalaya has maintained a strategy at its facilities to prevent
the spread of COVID-19. This strategy has ensured that the
good results achieved in 2020, which allowed the activity to be
carried out safely, have also been achieved in 2021.
From the outset, the implementation and monitoring of this
strategy has been the responsibility of an emergency decision-
making committee and a monitoring committee with the trade
unions.
Specifically, the main actions carried out by the Company that
have been part of this strategy included conducting PCRs,
antigen tests and antibody tests on the entire workforce and
monitoring contractors; the construction of new changing
rooms at the entrance to the facilities and the disinfections
three times a day in the changing rooms.
Atalaya Mining | Annual Report 2021 64
Sustainability Report | Environment and Climate Change
Environment and
Climate Change
Atalaya Mining Plc is committed to conduct its mining
operation on a sustainable basis, with maximum prevention of
any negative environmental, social, or cultural impact on the
environment, which is reflected in its Environmental Policy.
Proyecto Riotinto has an environmental management
system certified to the ISO 14001 standard. This system,
which is periodically audited, serves to ensure environmental
compliance with the environmental policy and aims to comply
with applicable environmental regulations, respect other
commitments that the Company subscribes to and promote
continuous improvement in operations.
The system is based on the Environmental Monitoring Plan
authorised by the competent administration and, although its
scope is currently limited to the operations of the Proyecto
Riotinto, the Company is working to extend it to the rest of its
projects in the operation and permitting phase.
Mitigation of our environmental
impacts
Within the framework of its environmental management
system, Atalaya adopts the most appropriate measures to
monitor and mitigate its main environmental impacts:
Air Quality (particulate matter)
Our operations give rise to two types of atmospheric emissions,
those that are channelled (four sources in the case of Proyecto
Riotinto) and those generated diffusely and inherent to the
mining activity.
Proyecto Riotinto has implemented an exhaustive programme
of specific control for diffusive emissions, as well as preventive
and corrective measures.
its
In 2021, the Company has continued to strengthen
management in this area by implementing various actions
such as the elimination of vehicle traffic on the mining track,
the installation of a bag filter in the screening plant and covering
the stock of coarse materials. Atalaya has also developed a
dispersions study for the emissions generated at stockpile
and improvements in the weather and air quality forecasting
service.
Circular economy
The generation of waste and its correct management is one
of the most significant aspects in our activity. Mining waste
constitute the main part of our impact. Besides, other smaller
quantities of other hazardous and non-hazardous waste
are produced (i.e. used oils, solvents, contaminated soils,
laboratory reagents, aerosols, contaminated packaging, paper
& cardboard and plastics, among others).
Therefore, a constant effort is made to minimise and reuse
waste. In this line, the project counts on an annually reviewed
waste minimization plan with reduction targets (more than 85%
of the waste generated is destined for recovery). Particularly
noteworthy is the management of mining waste, much of
which is used for restoration and dam reinforcement activities,
thus promoting the principles of the circular economy.
Other initiatives in 2021 include improvements in the internal
waste storage area (i.e. installation of electricity, water supply,
digitalisation of processes, etc.) and raising awareness in staff
and contractors through specific training, among others.
Water management
Water consumption occurs mainly during the grinding and
flotation process. Our water management focuses on reuse
and recirculation of the resource and by relying on supply
from an external source only when necessary. In order to get
a clearer understanding of its impacts, Atalaya has completed
in 2021 the calculation and verification of its water footprint.
Proyecto Riotinto has a zero-discharge policy (ZLD) and,
although it has had a discharge permit since the beginning of
the activity, it has never made use of it.
Energy transition and climate change
Electricity consumption accounts for more than 60% of CO2
emissions. In addition to this, there are other consumptions of
energy (mainly diesel, propane and fuels in heavy machinery)
that accounts for the rest. Therefore, Atalaya monitors these
consumption continuously and regularly, as one of the most
significant environmental aspects.
Atalaya Mining | Annual Report 2021
Sustainability Report | Environment and Climate Change
65
Atalaya has completed in 2021 the calculation of its carbon
footprint with an associated mitigation plan to reduce it 15%
by 2025 (reference year: 2019). This carbon footprint has
been voluntarily registered in the Official Register for carbon
footprints of the Spanish Ministry of Energy Transition.
Some of the actions conducted to reduce energy consumption
the
and greenhouse gas emissions have
improvement of the production process and equipment to
optimise energy consumption (i.e. installation of new flotation
cells, replacement of old equipment, etc.) and the harness of
renewable energy.
focused
in
Biodiversity protection
Proyecto Riotinto has implemented specific management
plans for avoiding impacts over biodiversity and prevent
potential forest fires. Some of the actions included in these
plans focuses on the conservation of protected species.
Update of the Environmental
Restoration Plan
The approval of a new mining plan by Atalaya has prompted
an update of the Proyecto Riotinto’s Restoration Plan. The
new Plan, like the previous one, aims to meet objectives such
as landscape and environmental integration, preserving the
values a culturally protected mining landscape, as well as
guaranteeing water clarity, safety and stabilisation conditions,
and a final use of the land.
As part of this Plan, the sealing layer over the facilities will be
reinforced and conditions for the colonisation of native flora
and wildlife species on the restored site will be favoured. The
geomineral resource will be integrated into the restored area,
due to the cataloguing of the Riotinto-Nerva mine basin as an
Asset of Cultural Interest (BIC, for its Spanish acronym).
The Restoration Plan also includes a number of actions to also
restore tailings from the historical mining, which existed before
Atalaya started is activity in this area.
Atalaya Mining | Annual Report 2021 66
Sustainability Report | Society
Society
Proyecto Riotinto has been a driving force for the socio-
economic revitalisation of the Riotinto Mining Basin in the
province of Huelva. The Company is strongly committed to the
creation of local employment, extending the socio-economic
footprint to contractors and business and activities providing
services to the mine.
Atalaya envisages Proyecto Riotinto as a long-term mine that
will contribute in a stable manner to the sustainable exploitation
of the mining resources in the area and contribute to the socio-
economic development of the local community.
Throughout 2021, the Company has promoted various
programmes devoted to this end, such as signing of local
agreements to promote direct and indirect employment,
development of training and qualification actions to promote
the employability of unemployed people in the region and
different actions to support economic diversification in the
region (e.g. boosting tourism activity).
Fluid relationship with local
stakeholders
Atalaya maintains an open-door policy and a fluid relationship
with its stakeholders. The high expectations of these groups
in terms of environmental, social and safety impact, among
others, drive the organisation to continuously improve the
performance of its activities, resulting in a better level of
competitiveness and adaptability.
Likewise, the careful management of stakeholders favours an
improved understanding of the territory and provides Atalaya
with the opportunity to bring the mining operation closer to the
local population, increasing the feeling of belonging.
The Company follows these principles of transparency and
deeper engagement with stakeholders, not only in its current
operation but also in the development of new projects.
Atalaya Riotinto Foundation
Since its beginnings, the Atalaya Foundation has been aware of
the importance of working alongside the local community. The
foundation has its sphere of action in the Riotinto Mining Basin,
where it maintains three lines of action: collaboration with non-
profit organisations; agreements with the local councils; and
work on its own initiatives.
For its own projects, Atalaya provides the foundation with more
than €0.5m per year for activities that positively benefit 33
entities and more than 40,000 stakeholders.
In addition, the Company has created the Terras Programme
within the framework of Proyecto Touro. This programme
aims to contribute value to society over and above its business
objectives, keeping these aligned with social expectations and
needs.
Sustainable and local supply chain
Atalaya is committed to prioritising sourcing and subcontracting
from local suppliers. Local procurements provide advantages
in terms of flexibility, risk mitigation and a quick response to
Company requests. It also improves the local economy and
brings value to the area. Only in cases where the local supplier
market cannot meet the demand, other national, European or
global suppliers are used.
Atalaya has a procedure to regulate the procurement process
for all goods and services, ensuring effective management.
Suppliers can be either input goods (equipment, machinery,
etc.) or services (consultants, contractors, etc.) mainly related
to mining and industrial process activity.
Suppliers are addressed with safety, environmental and
good practice requirements (e.g. quality and environmental
certifications, etc.). Audits are carried out to detect incidents,
which are follow up until resolved. In some cases, these
incidents can result in a financial penalty, requirements to
invest in auxiliary means, improve the safety of contractors, etc.
The importance of monitoring is based on correcting and
closing all incidents that may arise. In this way, it is possible
to prevent preferential purchases or malpractice, bring greater
security to the industrial process, improve reputation and
reduce costs.
Atalaya Mining | Annual Report 2021 Sustainability Report | Society
67
Protection of local heritage
Proyecto Riotinto is committed to the protection, conservation
and enhancement of present heritage, especially archaeological
heritage, as the project area is part of the Riotinto-Nerva
heritage area of Cultural Interest.
As a result of this commitment, the Company has a global
project for the management of the Historical and Archaeological
Heritage of the Proyecto Riotinto, authorised by the Competent
Administration, which establishes a series of actions for the
management of the affected historical heritage.
that guarantee
the main actions
Among
the correct
management of the heritage are the control of earthworks,
archaeological excavations and monitoring, as well as
documentary and graphic studies for a better interpretation.
Historical and archaeological management actions are part
of the Company’s Integrated Management System and are
subject to internal and external audits.
Some of the initiatives carried out are the restoration and
enhancement of unique elements of great interest, the creation
of two heritage tourism routes and an interpretation centre that
will contribute to the development of tourism and economic
diversification in the area once mining activity has ceased.
Quality and customer satisfaction
In addition to the society, customers are another important
stakeholder group for Atalaya. The customer approach
is part of the ISO 9001:2015 System, which allows us to
assess satisfaction with regard to meeting requirements and
expectations, implement systems to manage complaints,
incidents and claims and ensure that they are resolved. Atalaya
prepares an annual customer satisfaction report.
Atalaya Mining | Annual Report 2021 68
Sustainability Report | Innovation and technology
More specifically, the Company has focused its efforts in 2021
on two initiatives thanks to which it has improved efficiency or
solved challenges of different nature that affected operations.
Cybersecurity
For Atalaya Mining’s business, it is essential to use Information
and Technology (IT) resources as a means of providing
information at all levels. Likewise, in order to the organisation
to achieve its objectives, it is necessary to guarantee minimum
downtime, both in its IT resources and in communications; in
this way it is possible to maintain an efficient contingency in
all operational areas. Consequently, Atalaya has implemented
a Contingency and Cybersecurity Plan to protect the Company
from these risks.
Innovation and
technology
Innovation and the development of new technologies provide
an opportunity for Atalaya to maintain and improve its
competitiveness and adopt the best practices in the copper
market.
To efficiently manage these efforts, the Company has created
a specific working group composed of representatives from
different departments. This group meets monthly to discuss
potential developments, national and European projects and
consortia for our membership, among other initiatives to
deploy the Company’s innovation strategy.
Throughout 2021, the Company worked on various innovation
projects along the priority areas indicated above. In these
projects, the Company has cooperated with external partners
from the university and industrial sectors, which has made it
possible to share capabilities and promote the exchange of
knowledge.
Digitalisation and New Technologies
Atalaya has promoted during the latest years several projects
aimed at fostering the digitalisation of different processes and
improving data generation and management. Some of these
initiatives have consisted in the establishment of a new network
system (corporate and local system with segmented networks),
the implementation of an enterprise resource planning (ERP)
and other projects developed in the context of the situation
created by COVID-19 (i.e. communications for remote access
were strengthened and new procedures for end-user support
were created). All these projects have brought important
benefits to the operations.
Atalaya Mining | Annual Report 2021 69
Atalaya Mining | Annual Report 2021 Sustainability Report | Innovation and technology
Atalaya Mining | Annual Report 2021 Corporate
Governance
Report
72 Board of Directors
86 Board Committees
Atalaya Mining | Annual Report 2021 72
Corporate Governance Report | Board of Directors
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 the Company.
Board structure
Committees
Audit and Financial Risk
Committee (“AFRC”)
Corporate Governance
Nominating Compensation
Committee (“CGNCC”)
Physical Risk Committee
(“PRC”)
Summary of Committee
Responsibilities
Summary of Committee
Responsibilities
Summary of Committee
Responsibilities
h Reviews and monitors financial
h Reviews Directors’ compensation
h Oversees safety, health,
statements
and performance
h Reviews Company’s public
disclosure of financial
information
h Reviews estimates and
h Reviews Corporate Governance
of Atalaya and practices,
independence, charters’ review,
and structure
judgements that are material to
reported financial information
h Compensation and performance
of officers of Atalaya
h Oversees the auditors’
h Succession planning
environment and security
matters of the Company
h Oversees enterprise-wide
physical risk management
h Reviews compliance with legal
and regulatory obligations
relating to safety, health, and the
environment
arrangements and performance
h Reviews internal and external
risks of the Company
Dr. Hussein Barma (Chairman)
Mr. Roger Davey
Mr. Stephen Scott
Mr. Stephen Scott (Chairman)
Mr. Roger Davey
Dr. Hussein Barma
Mr. Neil Gregson (Chairman)
Mr. Roger Davey
Mr. Stephen Scott
Dr. José Sierra
(Chairman until March 2021)
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board of Directors
73
Directors
The names and particulars of the qualifications
and experience of each director are set out below.
During 2021 one Non-independent Director and one
independent Director stepped down and they were
replaced by one independent Director. 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.
Roger Davey
Non-executive Chairman of the Board
in
the mining
forty years’
Mr. Davey has over
experience
industry.
Previous employment included Assistant
Director and Senior Mining Engineer at
NM Rothschild & Sons; Director, Vice-
president and General Manager of
AngloGold’s subsidiaries in Argentina;
Operations Director of Greenwich
Resources Plc, London; Production
Manager for Blue Circle Industries in
Chile; and various production roles from
Graduate Trainee to Mine Manager, in
Gold Fields of South Africa (1971 to
1978). Mr. Davey is currently a director
of Highfield Resources Ltd., Central Asia
Metals plc and Tharisa plc.
Mr. Davey is a graduate of the Camborne
School of Mines, England (1970), with
a Master of Science degree in Mineral
Production Management from Imperial
College, London University,
(1979)
and a Master of Science degree from
Bournemouth University (1994). He is a
Chartered Engineer (C.Eng.), a European
Engineer (Eur. Ing.) and a Member of
the Institute of Materials, Minerals and
Mining (MIMMM).
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.
Role
Chairman Independent
Years of service
Since May 2010
Executive
Non-executive director
Time commitment
At least 75% of meetings scheduled
Skills
Mining experience, operations,
processing, exploration, Capital
markets, UK Market, International
business, leadership, strategic, fund
raising, M&A, governance, project
management.
Atalaya Mining | Annual Report 2021 74
Corporate Governance Report | Board of Directors
Alberto Lavandeira
Managing Director and Chief Executive Officer
Role
Non-Independent - 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.
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.
Damon Barber
Non-executive Director
Mr. Barber
the Senior
is currently
Managing Director of Liberty Metals &
Mining. Mr. Barber has more than 20
years’ experience in natural-resources
finance, mining project development and
mining operations. Mr. Barber graduated
from the University of Kentucky with a
B.S. in Mining Engineering and began his
career as a section foreman at CONSOL
Energy Inc.’s Loveridge Mine. Mr. Barber
holds an MBA from the Wharton School
of the University of Pennsylvania.
Role
Non-Independent
Mr. Barber was a member of the
Corporate Governance Nominating
Compensation Committee.
Years of service
Since Sep 2015 to April 2021
On 12 April 2021,
the Company
announced that Mr. Damon Barber
stepped down as a Non-Executive
Director of the Company with immediate
effect.
Executive
Non-executive Director
Time commitment
At least 75% of meetings scheduled
Skills
Mining experience, operations,
processing, Capital market,
international business, leadership,
strategic, fund raising, M&A,
governance, project management.
Atalaya Mining | Annual Report 2021 Dr. Hussein Barma
Non-executive Director
Dr. Barma
is a principal of Barma
Advisory. He was formerly CFO (UK)
of Antofagasta Plc from 1998 to 2014
and possesses a deep knowledge of
governance practices at board level,
as well as accounting and reporting,
regulatory
investor
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
relations
and
Corporate Governance Report | Board of Directors
75
member of the UK Financial Reporting
Council’s Financial Reporting Lab. He is
a non-executive Director of Chaarat Gold
Holdings Limited and an independent
Governor of the University of the Arts
London.
Dr. Barma is the Chair of the Audit
and Financial Risk Committee, and a
member of the Corporate Governance
Nominating Compensation Committee.
Role
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.
Neil Gregson
Non-executive Director
Mr. Gregson has over 30 years’
experience 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
positions 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 University.
He became an associate of the Institute
of
and
Investment Management
Research of London in 1994. He holds a
Diploma in Business Management from
Damelin College, Johannesburg (1988)
and a Mine Managers Certificate of
Competency, South Africa (1985).
Mr. Gregson is the Chair of the Physical
Risk Committee.
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.
Atalaya Mining | Annual Report 2021 76
Corporate Governance Report | Board of Directors
Jesús Fernández
Non-executive Director
Mr. Fernández 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.
Harry Liu, BSc. Economics
Non-executive Director
Mr. Liu is the advisor of the board of
Shandong Xiangguang Copper Group at
in Shandong of China, one of the largest
Chinese copper smelting, refining and
fabricating companies.
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.
Role
Non-Independent
Years of service
Since Jun 2015
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.
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.
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board of Directors
77
Dr. José Sierra López
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
the European
for Fossil Fuels
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.
for
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 was the Chair of the Physical
Risk Committee.
the Company
On 25 March 2021,
announced that Dr. Sierra was retired as
an Independent Non-Executive Director
and the Chair of the Physical Risk
Committee, with an effective date of 31
March 2021.
Role
Chair of the PRC
Independent
Years of service
Since Oct 2011 to March 2021
Executive
Non-executive director
Time commitment
At least 75% of meetings scheduled
Skills
Mining experience, operations,
processing, exploration, capital
market, UK Market, international
business, leadership, strategic,
governance, project management,
permitting.
Stephen Scott
Non-executive Director
Mr. Scott
is president and CEO of
Entree Resources Limited. Previously,
he was president and CEO of Minenet
advisors advising on strategy, corporate
development, business
restructuring
and project management. He held
various global executive positions with
Rio Tinto (2000-2014).
Mr. Scott is the Chair of the Corporate
Governance Nominating Compensation
Committee, and a member of the Audit
and Financial Risk Committee and the
Physical Risk Committee.
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.
Atalaya Mining | Annual Report 2021 78
Corporate Governance Report | Board of Directors
Management
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.
César Sánchez
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.
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.
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.
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board of Directors
79
Enrique Delgado
General Manager Proyecto Riotinto
He is a graduate of the University of
Sevilla, Spain and Master of Senior
Management of Leading Companies of
the San Telmo International Institute of
Sevilla, Spain.
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.
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.
Board Appointments
Director Independence
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 their 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
They are also briefed on their
professional advisors.
responsibilities under AIM and TSX. New Directors are also
provided with an opportunity to visit the Company’s operations
in Spain to understand how Atalaya works on-site.
The Company requires its Directors to keep themselves
professionally up-to-date and familiar with its articles and
charters.
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-independent,
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
leadership is provided for the Board’s independent Directors.
This ensures that all Board discussions or decisions have
the benefit of outside views and experience, and that at least
half of the non-executive Directors are free of any interests
or influences that could or could reasonably be perceived to
materially interfere with the Director’s ability to act in the best
interests of the Company.
Atalaya Mining | Annual Report 2021 80
Corporate Governance Report | Board of Directors
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.
Highlights of the Board for this
Year
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.
Atalaya has had twenty 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.
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.
Atalaya has also three Physical Risk Committee meetings,
five Audit and Financial Risk Committee meetings and two
Corporate Governance, Nominating and Compensation
Committee meetings.
When considering vacancies, the Board will consider a
candidate’s capacity to enhance the mix of skills and experience
of the Board.
Role of the Board
The Board has a duty to supervise the management of the
business and affairs of the Company. The Board directly
and with the Chair provide direction to senior management,
generally through the CEO, to pursue the best interests of the
Company.
The Board has the final responsibility for the successful
operations of the Company. The Board must ensure that
management has in place appropriate processes for strategic
planning and risk assessment, management and 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 accordance with the law applicable
to the Company. Furthermore, the Board will at all times act in
accordance with all Company policies in force.
Each of the Directors, when 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.
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:
h Health and safety, reporting of accidents and reviewing
policy to look for improvements including giving the go
ahead on a restructuring of the safety department.
h Operational, discussed all the operational information and
data.
h Financial, reviewed figures such as cost, capital investment,
budgets, etc.
h Quarterly reports, annual report and other deliverables to
the Market.
h Re-election of Directors.
h Board and committees’ performance.
h Monitoring of expansion, review of growth opportunities/
acquisitions.
h Dividends policy.
The Board would like to thank the committees that have helped
the Board reach its conclusions.
The Role of Individual Directors
As members of the Board, Directors have ultimate responsibility
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:
h Leadership of the Company, particularly in the areas
of ethics and culture including a clear and appropriate
strategic direction.
h Accountability
shareholders.
to
key
stakeholders,
particularly
h Oversight of all control and accountability systems
including all financial operations and solvency, risk
management and compliance.
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board of Directors
81
h An effective senior management team and appropriate
personnel policies; and
h timely and effective decisions on matters relating to it.
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.
It is also expected that the Directors comply with the following:
h Behaving in a manner consistent with the words and spirit
of the Code of Conduct.
h Making reasonable efforts to attend all meetings of the
Board, the annual general meeting of shareholders of the
Company and of all the Board committees upon which they
serve. Subject to extenuating circumstances, Directors are
expected to attend at least 75% of regularly scheduled
Board and committee meetings. The CGNC Committee
will review the circumstances that prevent any director
from achieving the minimum level and report its findings
to the Board.
h Addressing issues in a confident, firm and friendly manner
but also ensure that others are given a reasonable
opportunity to put forward their views.
h Preparing thoroughly for each Board or Committee event.
h Using
judgement, common sense and
tact when
discussing issues.
Lastly Directors will keep confidential all Board discussions and
deliberations. Similarly, all confidential information received
by a Director in the course of the exercise of the Director’s
duties remains the property of the Company and is not to be
discussed outside the boardroom. It is improper to disclose it,
or allow it to be disclosed, without appropriate authorisation.
Chairman’s Role
The Chairman is considered the “lead” Director and utilises his/
her experience, skills and leadership abilities to facilitate the
governance processes. The Chairman will be selected on the
basis of relevant experience, skill and leadership abilities.
The responsibilities of the Chair include but is not restricted to:
h Chair Board, annual and extraordinary meetings;
h Set Board agendas and ensure that the meetings are
effective and follow the agenda;
h Ensure that the decisions are implemented promptly;
h Ensure that the Board behaves in accordance with the
Company´s code of conduct
The Role of the CEO
The CEO is responsible for the attainment of the Company’s
goals and vision for the future, in accordance with the strategies,
policies, programmes and performance requirements approved
by the Board. The position reports directly to the Board.
The CEO’s primary objective is to ensure the ongoing success
of the Company through being responsible for all aspects of the
management and development of the Company. The CEO is of
critical importance to the Company in guiding the Company to
develop new and imaginative ways of winning and conducting
business. The CEO must have the industry knowledge and
credibility to fulfil the requirements of the role.
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:
h 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;
h Develop all financial reports, and all other material reporting
and external communications by the Company, including
material announcements and disclosure, in accordance
with the Company’s Shareholder Communication Policy;
h Manage the appointment of the Chief Operating Officer
(“COO”), CFO, Company Secretary and other specific
senior management positions;
h Develop, implement and monitor the Company’s risk
management practices and policies;
h Consult with the Chairman and the Company Secretary in
relation to establishing the agenda for Board meetings;
h Agree with the Chairman their respective roles in relation to
all meetings (formal and informal) with shareholders and
all public relations activities;
h Be the primary channel of communication and point of
contact between members of senior management and the
Board (and the Directors);
h The primary spokesperson and channel of communication
for the Company in the annual general meeting and in all
public relation activities;
h Keep the Chairman fully informed of all material matters
which may be relevant to the Board and its members, in
their capacity as Directors;
h To be kept informed by the CEO and other senior
management which may be relevant to Directors in their
capacity as Directors;
h Ensures Directors devote sufficient time to their tasks
h Provide strong leadership to, and effective management
of, the Company in order to:
h 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;
Atalaya Mining | Annual Report 2021
82
Corporate Governance Report | Board of Directors
h Advise the Board on the most effective organisational
structure and overseeing its implementation;
h Establishing and maintaining effective and positive
relationships with Board members, shareholders,
customers, suppliers and other government and business
liaisons;
The tasks of the Company Secretary shall include but not
restricted to:
h Notifying the Directors in writing in advance of a meeting
of the Board as specified in the Constitution and the Board
Charter;
h Carry out the day-to-day management of the Company.
h Recording, maintaining and distributing the minutes of all
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.
Board and Board Committee meetings as required;
h Preparing for and attending all annual and extraordinary
general meetings of the Company;
h Overseeing the Company’s compliance programme and
ensuring all Company legislative obligations are met;
h Ensuring all requirements of regulatory bodies are fully
met; and providing counsel on corporate governance
principles and Director liability.
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.
Executive
Gender
Nationality
Years of service
R. Davey
Independent Non-executive
Chairman
Male
British
Since May 2010
A. Lavandeira
Chief Executive Officer
Male
Spanish
Since May 2014
H. Barma
Independent Non-executive
Director
Male
British
Since Sep 2015
J. Fernández
Non-executive Director
H. Liu
Non-executive Director
Male
Male
Spanish
Since Jun 2015
Chinese
Since Oct 2010
S. Scott
Independent Non-executive
Director
Male
Canadian
Since Sep 2015
Neil Gregson
Independent Non-executive
Director
Male
Australian
Since Feb 2021
J. Sierra López
Independent Non-executive
Director
Male
Spanish
Since Oct 2011 to
March 2021
D. Barber
Non-executive Director
Male
American
Since Sep 2015 to April
2021
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board of Directors
83
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 20 times in 2021. Meetings occurred in
person and by teleconference.
BoD
AFRC
CGNCC
PRMC
Total
Attended
Total
Attended
Total
Attended
Total
Attended
R. Davey
20
A. Lavandeira
20
D. Barber
H. Barma
J. Fernández
H. Liu
J. Sierra López
Neil Gregson
S. Scott
5
20
20
20
5
19
20
20
20
5
20
17
20
5
18
19
5
-
-
5
-
-
-
-
5
5
-
-
5
-
-
-
-
5
2
-
-
2
-
-
-
-
2
2
-
-
2
-
-
-
-
2
3
3
-
-
-
-
-
1
2
3
-
-
-
-
-
1
2
3
Board evaluation
The Corporate Governance, Nominating and Compensation
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 responsibilities 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.
Atalaya Mining | Annual Report 2021 84
Corporate Governance Report | Board of Directors
Conflict of interest
Compliance
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.
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 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.
During the year 2021 there have not been identified any material
instances of non-compliance by the Company.
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 procedures 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 possession 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 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
performance 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.
Information technology governance
The Board assumes the responsibility for risks related to the
information technology (“IT”) systems and cyber security. 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 effectiveness
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 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
to maintaining good
importance
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.
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board of Directors
85
Code of business ethic and conduct
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.
2022 Annual General Meeting
Atalaya’s AGM will be held on 22 June 2022 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.
is dedicated
The Company
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 ethically 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 shareholders 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 guidelines, 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 business partners, and other intermediaries.
Atalaya Mining | Annual Report 2021 86
Corporate Governance Report | Board Committees
CGNCC
Corporate, Governance, Nominating and
Compensation Committee
Members
Stephen Scott (Chair)
Hussein Barma
Roger Davey
Attendance
2/2
2/2
2/2
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.
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:
h The Committee shall periodically review and, if advisable,
the
for Board approval
approve and
compensation paid to Directors.
recommend
h At
least annually, and prior to the nomination or
appointment of potential candidates, the Committee shall
review the competencies, skills, experience and areas of
expertise of the Board on an individual and collective basis.
Based on this review, the Committee shall identify areas
where additional competency, skill, experience or expertise
would be of benefit to Atalaya Mining.
h As required, the Committee shall identify and, if advisable,
recommend to the Board for approval, potential candidates
for nomination or appointment to the Board having regard
to the results of the review referred to above. The Board
should consider whether or not each new nominee can
devote sufficient time and resources to his or her duties as
a Committee member.
h The Committee shall periodically assess the contribution
and effectiveness of the Board, the Directors, each Board
Committee and the Chairman of the Board against
their respective mandate, charters or other criteria the
Committee considers appropriate. The Committee shall
report its findings to the Board and, based on those
findings, recommend any action plans that the Committee
considers appropriate.
h 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.
h The Committee shall periodically review Atalaya Mining’s
corporate governance practices and policies. As part of its
review, the Committee shall take regulatory requirements
and best practices, including the UK Corporate Governance
Code and QCA guidelines, into account. The Committee
including any
shall report the results of
recommended changes to existing practices, to the Board
in a timely manner.
its review,
h The Committee will also establish 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.
h 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.
h The Committee shall
in conjunction with
review,
management, the corporate governance disclosure for
Atalaya Mining’s annual report, notice of shareholders
meetings and other regulatory and shareholder reports.
h 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.
h The Committee shall periodically evaluate the performance
of the Chief Executive Officer in relation to his or her
performance goals. The Chief Executive Officer evaluation
shall be conducted in conjunction with the Chairman of the
Board and shall be presented to the Board for its review.
h The Committee shall periodically review, and, if advisable,
approve and
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.
for Board approval
recommend
h The Committee shall, as
required,
if
advisable, approve and recommend for Board approval,
the appointment, compensation and other terms of
employment of all senior management reporting directly
to the CEO.
review and,
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board Committees
87
h The Committee shall periodically
review and,
if
advisable, approve and recommend for Board approval,
a succession and emergency preparedness plan for all
senior management reporting directly to the CEO. Upon
the vacancy of such senior management personnel, the
Committee may make a replacement recommendation for
Board approval based on the succession plan.
h 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 three members all of whom are non-
executive and Independent. The current membership of the
committee is Mr. S. Scott (Chairman), Mr. R. Davey and Dr. H.
Barma.
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
Expiration
Date
Exercise
Price
A.
Lavandeira
23 Feb 2017
22 Feb 2022
144.0p
150,000
29 May 2019
28 May 2024
201.5p
600,000
30 June 2020
29 June 2030
147.5p
400,000
24 June 2021
23 June 2031
309.0p
400,000
1,550,000
There were no further option grants between the balance sheet
date and the date of this report.
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.
Atalaya Mining | Annual Report 2021 88
Corporate Governance Report | Board Committees
Corporate Governance
The Directors comply with TSX and AIM regulations and Cyprus Company Law. The Board remains accountable to the Company’s
shareholders for good corporate governance.
Directors’ Emoluments
In compliance with the disclosure requirements of the listing requirements of AIM and TSX, the aggregate remuneration paid to the
Directors of Atalaya Mining Plc for the year ended 31 December 2021 is set out below:
(Euro 000’s)
31 Dec 2021
Executive Directors
A. Lavandeira
Non-executive Directors
R. Davey
D. Barber
H. Barma
J. Fernández
H. Liu
J. Sierra López
S. Scott
N. Gregson
Short term benefits
Salary & Fees
Bonus
Incentive options*
Total
472
134
18
91
65
65
18
97***
59
1,019
438**
321
1,231
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
438
321
134
18
91
65
65
18
97***
59
1,778
(*) The amount relates to the non-cash expense recognised in accordance with IFRS 2 Share-based payments. On 24 June 2021, the Company granted 400,000
share options to the Executive Director Alberto Lavandeira (see Note 22 to the financial statements). (**) These amounts in 2021 related to the performance bonus
for 2020 approved by the CGNC Committee of the Company during H1 2021. Director’s bonus relates to the amount approved for the CEO as an executive director.
(***) Includes €7k paid to the Canadian Pension Plan.
(Euro 000’s)
31 Dec 2020
Executive Directors
A. Lavandeira
Non-executive Directors
R. Davey
D. Barber
H. Barma
J. Fernández
J. Lamb(1)
H. Liu
J. Sierra López
S. Scott
Short term benefits
Salary & Fees
Bonus
Incentive options*
Total
472
115
60
80
55
53
55
69
86***
1,045
305**
291
1,068
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
115
60
80
55
53
55
69
86
305
291
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 22). (**)
The amount relates to the approval of the performance bonus for 2019 by the BoD 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 BoD. There is no certain
or guarantee that the BoD will approve a similar amount for 2020 performance. (***) Includes €6.7k paid to the Canadian Pension Plan.
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board Committees
89
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
2021 and 2020, are as follows:
The interest percentage represents the percentage of voting
rights. Between 31 December 2021 and the date of approval
of the consolidated and Company financial statements, the
change in the Board of Directors’ interests in the share capital
of the Company was the disposal of 19,578,947 shares by
Liberty and 43,376 shares by Mr. Liu.
Name
A. Lavandeira
D. Barber(1)
J. Fernández(2)
H. Liu(3)
2021
2020
No. of existing
Ordinary Shares
% of issued
Share Capital
No. of existing
Ordinary Shares
% of issued
Share Capital
280,000
-*
30,821,213*
31,075,251**
0.20%
-%
22.30%
22.48%
240,000
19,578,947*
30,821,213*
31,118,627**
0.17%
14.17%
22.31%
22.53%
(1) Liberty Metals & Mining Holdings LLC (2) Urion Holdings (Malta) Ltd (3) Yanggu Xiangguang Copper Co. Ltd (*) Shares held by the companies
the Directors represent (**) includes 369,019 shares held personally by Mr. Liu (FY2020: 412,395 shares).
2021 Review
The Committee met two times during 2021, covering a number
of issues.
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 2021.
Atalaya always bases
in
comparison with their peers in the mining sector and in
companies of similar size and similar financials.
remuneration packages
their
Stephen Scott
Chairman of Corporate Governance, Nominating and
Compensation Committee
23 March 2022
Atalaya Mining | Annual Report 2021 90
Corporate Governance Report | Board Committees
PRC
Physical Risks Committee
Members
Attendance
Dr. José Sierra López (Chair resigned
March 2021)
Neil Gregson (Chair)
Roger Davey
Stephen Scott
1/1
2/2
3/3
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 responsibility
and on external professionals on matters within their areas of
expertise.
The PRC comprises three members all of whom are non-
executive and Independent. The current membership of the
committee is Dr. N. Gregson (Chairman), Mr. R. Davey and Mr.
S. Scott. Dr. José Nicolas Sierra retired as an Independent Non-
Executive Director and the Chair of the Physical Risk Committee
of Atalaya, with an effective date of 31 March 2021.
2021 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 are 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.
Committee members may assume the accuracy of information
provided by such persons, so long as the members are not
aware of any reasonable grounds upon which such reliance or
assumption may not be appropriate.
Neil Gregson
Chairman of Physical Risks Committee
23 March 2022
is responsible for
Management
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.
Atalaya Mining | Annual Report 2021 Corporate Governance Report | Board Committees
91
AFRC
Audit and Financial Risk Committee
To fulfil these functions the AFRC shall have the following
duties and responsibilities:
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.
Attendance
Members
Attendance
Hussein Barma (Chair)
Stephen Scott
Roger Davey
5/5
5/5
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 overseeing
the independence of the external auditors and fulfilling the
Boards’ statutory and fiduciary responsibilities relating to:
h Financial reporting;
h 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
h External Audit.
h To review the quality and integrity of all published financial
statements and reports including the annual Management
Discussion and Analysis report (if applicable) and quarterly
earnings press releases issued by the Company, prior to
the Company publicly disclosing the information, as well
as all other material continuous disclosure documents and
analysis with a view to making a recommendation to the
Board.
h To review estimates and judgements that are material to
reported financial information and consider the quality
and acceptability of the Company’s accounting policies
and procedures and the clarity of disclosure in financial
statements.
h To ensure compliance by the Company with legal and
regulatory requirements related to financial reporting.
h 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’ report or performing
other audit, review or attest services and to recommend to
the Board the compensation of the external auditor.
h 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.
h To oversee the work of the external auditor engaged for
the purposes of preparing or issuing an auditor’s report
or performing other audit, review or attest services for
the Company, including the resolution of disagreements
between management and the external auditor regarding
financial reporting.
h To meet with the external auditor to discuss the annual
financial report and any transaction referred to in the Board
Charter.
h 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.
h 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.
h To identify risks inherent in the business of the Company
and to review the Company’s risk management procedures.
h 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.
Atalaya Mining | Annual Report 2021 92
Corporate Governance Report | Board Committees
h To
review any significant,
including any pending,
transactions outside the Company’s ordinary course of
business and any pending litigation involving the Company.
h To review and monitor management’s responsiveness to
external audit findings or any regulatory authority.
h To report to the Board of Directors, who in turn may refer
the matter to the Corporate Governance, Nominating
improprieties or
and Compensation Committee, any
suspected improprieties with respect to accounting and
other matters that affect financial reporting or the integrity
of the business.
In addition, the AFRC shall establish procedures for the
receipt, retention and treatment of complaints (including
“whistleblowing” complaints) received by Atalaya Mining
legal/regulatory compliance,
regarding risk management,
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 membership 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.
2021 Review
The AFRC met five times during 2021. Four meetings were
timed to coincide with approval of financial results for
publication with one meeting 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:
h Review and approval of the quarterly, half yearly and full
year financial results.
h The going concern statement in the Management Report
above and in Note 2.1(b) to the Financial Statements,
including the possible impact of the COVID-19 outbreak.
h Key accounting and audit matters for 2021 including the
Astor Deferred Consideration and Revenue Recognition.
h An internal evaluation of the AFRC’s performance with
feedback from board members, senior management and
the external auditors.
h 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
23 March 2022
Atalaya Mining | Annual Report 2021 93
Atalaya Mining | Annual Report 2021 94
Atalaya Mining | Annual Report 2021 95
Consolidated and
Company Financial
Statements
Independent Auditor’s Report
96
102 Consolidated and Company Financial Statements
108 Notes to the Consolidated and Company Financial Statements
Atalaya Mining | Annual Report 2021 102
Consolidated and Company Statements of the Comprehensive Income
for the year ended 31 December 2021
Note
The Group
2021
The Company
2021
The Group
2020
The Company
2020
(Euro 000’s)
Revenue
5
405,717
65,849
Operating costs and mine site administrative expenses
(192,073)
Mine site depreciation, amortisation and impairment
13,14
(32,276)
-
-
Gross profit
181,368
65,849
Administration and other expenses
Share based benefits
Exploration expenses
Impairment loss on other receivables
Care and maintenance expenditure
Operating profit/(loss)
Net foreign exchange gain/(loss)
Interest income from financial assets at fair value
through profit and loss
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
22
6
4
8
8
9
10
(9,715)
(899)
(1,800)
-
(2,116)
166,838
6,589
-
57
(13,657)
159,827
(27,601)
132,226
133,644
(1,418)
132,226
(2,422)
-
-
-
-
63,427
1,450
12,854
2,398
-
80,129
(862)
79,267
79,267
-
79,267
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)
11
11
96.7
94.4
-
-
252,784
(175,484)
(31,683)
45,617
(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
1,442
-
-
1,442
(1,935)
-
-
(45)
-
(538)
16
13,607
2,516
-
15,601
(928)
14,673
14,673
-
14,673
-
-
Profit for the year
Other comprehensive income:
132,226
79,267
30,390
14,673
-
-
-
-
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 income for the year
Total comprehensive income for the year attributable
to:
- Owners of the parent
- Non-controlling interests
20
(47)
132,179
(47)
79,220
44
30,434
44
14,717
133,597
(1,418)
132,179
79,220
-
79,220
31,523
(1,089)
30,434
14,717
-
14,717
The notes on pages 106 to 173 are an integral part of these consolidated and Company financial statements.
Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021
103
Consolidated and Company Statements of Financial Position
As at 31 December 2021
As at 31 December
As at 31 December
(Euro 000’s)
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Trade and other receivables
Non-current financial asset
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Tax refundable
Other financial assets
Cash and cash equivalents
Total assets
Equity and liabilities
Equity attributable to owners of the parent
Share capital
Share premium
Other reserves
Accumulated profit/(losses)
Non-controlling interests
Total equity
Liabilities
Non-current liabilities
Trade and other payables
Provisions
Lease liability
Borrowings
Current liabilities
Trade and other payables
Lease liability
Current tax liabilities
Deferred consideration
Borrowings
Total liabilities
Total equity and liabilities
Note
The Group
2021
The Company
2021
The Group
2020
The Company
2020
13
14
15
19
20
17
18
19
20
21
22
22
23
24
25
26
27
28
25
27
10
29
28
333,096
57,368
-
5,330
1,101
5,564
-
-
64,171
245,744
-
-
327,174
59,816
-
2,715
1,101
8,805
-
-
5,448
318,857
-
-
402,459
309,915
399,611
324,305
24,781
50,128
483
39
107,517
182,948
585,407
13,447
315,916
52,690
58,754
440,807
(4,909)
435,898
3,450
26,578
4,913
34,050
68,991
-
4,433
-
39
37,270
41,742
351,657
13,447
315,916
8,146
10,116
347,625
-
347,625
-
-
-
-
-
66,191
4,032
597
336
-
13,394
80,518
149,509
585,407
-
-
-
-
4,032
4,032
351,657
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
-
10,737
-
86
2,049
12,872
337,177
13,439
315,714
7,295
(21,863)
314,585
-
314,585
-
-
-
-
-
13,002
-
473
9,117
-
22,592
22,592
337,177
The notes on pages 106 to 173 are an integral part of these consolidated and company financial statements. The consolidated and
company financial statements were authorised for issue by the Board of Directors on 23 March 2022 and were signed on its behalf.
Roger Davey
Chairman
Alberto Lavandeira
Chief Execute Officer
Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 104
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
(Euro 000’s)
Note
Share
capital
Share
Premium(2)
Other
reserves(1)
Accumulated
Profit/
(losses)
Total
Non-
controlling
interest
Total
equity
Attributable to owners of the parent
At 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
20
Total comprehensive income
Transactions with owners
Issuance of share capital
Depletion factor
Recognition of share-based
payments
Recognition of non
distributable reserve
Other changes in equity
At 31 December 2020/
1 January 2021
Profit / (loss) for the year
22
23
23
23
23
Change in fair value of
financial assets through OCI
20
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
Recognition of distributable
reserve
22
23
23
23
Other changes in equity
23
Interim dividends paid
At 31 December 2021
-
-
-
-
-
-
67
1,395
-
44
44
-
31,479
31,479
(1,089)
30,390
-
44
-
44
31,479
31,523
(1,089)
30,434
-
-
-
-
-
-
-
-
-
14,155
(14,155)
816
2,198
-
-
(2,198)
31
1,462
-
816
-
31
-
-
-
-
-
1,462
-
816
-
31
13,439
315,714
40,049
(15,512)
353,690
(3,491)
350,199
-
133,644
133,644
(1,418)
132,226
-
-
-
8
-
-
-
-
-
-
-
-
-
202
-
-
-
-
-
-
(47)
(47)
-
6,100
899
3,317
-
-
-
(47)
-
(47)
133,644
133,597
(1,418)
132,179
-
(6,100)
-
(3,317)
(299)
210
-
899
-
-
(299)
(47,290)
(47,290)
-
-
-
-
-
-
-
210
-
899
-
-
(299)
(47,290)
2,372
(2,372)
13,447
315,916
52,690
58,754
440,807
(4,909)
435,898
(1) Refer to Note 23
(2) The share premium reserve is not available for distribution.
The notes on pages 106 to 173 are an integral part of these consolidated and Company financial statements.
Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021
Company Statement of Changes in Equity
for the year ended 31 December 2021
105
(Euro 000’s)
At 1 January 2020
Profit for the year
Change in fair value of financial assets through
OCI
Total comprehensive income
Issuance of share capital
Recognition of share-based payments
At 31 December 2020/1 January 2021
Profit for the year
Change in fair value of financial assets through
OCI
Total comprehensive income
Issuance of share capital
Recognition of share-based payments
Interim dividends paid
At 31 December 2021
20
22
23
20
22
23
(1) Refer to Note 23
(2) The share premium reserve is not available for distribution.
Note
Share
capital
Share
premium(2)
Other
reserves(1)
Accumulated
losses
Total
13,372
314,319
6,435
(36,535)
297,591
-
-
-
67
-
-
-
-
1,395
-
13,439
315,714
-
-
-
8
-
-
-
-
202
-
-
44
44
-
816
7,294
-
(47)
(47)
-
899
14,673
14,673
-
14,673
-
-
44
14,717
1,462
816
(21,861)
314,586
79,267
79,267
-
(47)
79,267
79,220
-
-
210
899
(47,290)
(47,290)
13,447
315,916
8,146
10,116
347,625
Companies, which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the
Republic Law, within two years after the end of the relevant tax year, will be deemed to have distributed this amount as dividend on
the 31 of December of the second year. The amount of the deemed dividend distribution is reduced by any actual dividend already
distributed by 31 of December of the second year for the year the profits relate.
The Company pays special defence contribution on behalf of the shareholders over the amount of the deemed dividend distribution
at a rate of 17% (applicable since 2014) when the entitled shareholders are natural persons tax residents of Cyprus and have their
domicile in Cyprus. In addition, from 2019 (deemed dividend distribution of year 2017 profits), the Company pays on behalf of the
shareholders General Healthcare System (GHS) contribution at a rate of 2.65% (31 December 2020: 2.65%), when the entitled
shareholders are natural persons tax residents of Cyprus, regardless of their domicile.
The notes on pages 106 to 173 are an integral part of these consolidated and Company financial statements.
Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021
106
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
(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 share-based payments
Interest income
Interest expense
Unwinding of discounting
Finance provisions
Other provisions
Legal provisions
Impairment loss on other receivables
Net foreign exchange differences
Cash inflows from operating activities before working capital changes
Changes in working capital:
Inventories
Trade and other receivables
Trade and other payables
Provisions
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
Payment of deferred consideration
Interest received
Net cash used in from investing activities
Cash flows from financing activities
Lease payment
Net proceeds from borrowings
Proceeds from issue of share capital
Dividends paid
Net cash from financing activities
Net increase in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents:
At beginning of the year
At end of the year
Note
2021
2020
159,827
31,742
13
14
14
23
8
9
9
9
26
19
18
19
25
26
27
13
14
8
27
21
21
27,680
4,596
-
899
(57)
846
1,063
11,737
417
(61)
-
(6,692)
200,255
(1,205)
(8,807)
(14,400)
(343)
175,500
(11)
(846)
(25,802)
148,841
(32,440)
(2,148)
(53,000)
57
25,766
4,941
985
816
(197)
180
144
-
-
238
49
3,779
68,443
(2,246)
(10,356)
11,747
-
67,588
(17)
(180)
(4,475)
62,916
(27,046)
(3,311)
-
197
(87,531)
(30,160)
(463)
49,446
158
(47,290)
1,851
63,161
6,589
37,767
107,517
(618)
-
1,378
-
760
33,516
(3,826)
8,077
37,767
The notes on pages 106 to 173 are an integral part of these consolidated and Company financial statements.
Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 Company Statement of Cash Flows
for the year ended 31 December 2021
(Euro 000’s)
Cash flows from operating activities
Profit before tax
Adjustments for:
Interest income
Interest income from interest-bearing intercompany loans
Impairment loss on other receivables
Unrealised foreign exchange loss on financing activities
Cash used in operating activities before working capital changes
Changes in working capital:
Trade and other receivables
Trade and other payables
Cash flows from / (used in) operations
Tax paid
Net cash from / (used in) operating activities
Cash flows from investing activities
Investment in subsidiaries
Interest income from interest-bearing intercompany loans
Net cash (used in) / from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Dividends paid
Net cash (used in) / from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents:
At beginning of the year
At end of the year
107
Note
2021
2020
80,129
15,601
8
8
19
25
15
8
22
12
21
21
-
(15,252)
-
-
64,877
81,713
(20,103)
126,487
(1,614)
124,873
(57,824)
15,252
(42,572)
210
(47,290)
(47,080)
(16)
(16,123)
(45)
20
(563)
(15,549)
2,728
(13,384)
(2,194)
(15,578)
(2)
16,123
16,121
1,378
-
1,378
35,221
1,921
2,049
37,270
W128
2,049
The notes on pages 106 to 173 are an integral part of these consolidated and Company financial statements.
Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 108
Notes to the Consolidated and Company
Financial Statements
Year ended 31 December 2021
1. Incorporation and summary of business
Atalaya Mining Plc (the “Company”) was incorporated in Cyprus on 17 September 2004 as a private company with limited liability
under the Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered
office is at 1 Lampousa Street, Nicosia, Cyprus.
The Company was listed on AIM of the London Stock Exchange in May 2005 under the symbol ATYM and on the TSX on 20
December 2010 under the symbol AYM. The Company continued to be listed on AIM and the TSX as at 31 December 2021.
Additional information about Atalaya Mining Plc is available at www.atalayamining.com as per requirement of AIM rule 26.
Change of name and share consolidation
Following the Company’s Extraordinary General Meeting (“EGM”) on 13 October 2015, the change of name from 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 Stg £0.075 for every 30 existing
ordinary shares of nominal value Stg £0.0025.
Principal activities
Atalaya is a European mining and development company. 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, elsewhere in European
and Latin America.
The Group currently owns four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa
Morena. In addition, the Company has an earn-in agreement to acquire three investigation permits at Proyecto Riotinto Este.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 109
Proyecto Riotinto
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 of this mine
was completed in 2019 and successfully commissioned by Q1 2020.
Proyecto Touro
The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of Proyecto Touro, as part of an earn-in agreement which
will enable the Group to acquire up to 80% of the copper project. Proyecto Touro is located in Galicia, north-west Spain. Proyecto
Touro is currently in the permitting process.
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.
Proyecto Masa Valverde
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. The first payment is to be executed once the project
is permitted and second and final payment when first production is achieved from the concession. Proyecto Masa Valverde is
currently in the permitting process.
Proyecto Riotinto Este
In December 2020, Atalaya entered into a Memorandum of Understanding with a local private Spanish company to acquire a 100%
beneficial interest in three investigation permits (known as Peñas Blancas, Cerro Negro and Herreros investigation permits), which
cover approximately 12,368 hectares and are located immediately east of Proyecto Riotinto.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 110
Proyecto Ossa Morena
In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owns 17 investigation
permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa-Morena
Metallogenic Belt.
2. Summary of significant accounting policies
Atalaya will pay a total of €2.5 million in cash in three instalments and grant a 1% net smelter return (“NSR”) royalty over all acquired
permits. The first payment of €0.5 million will be made following execution of the purchase agreement. The second and third
instalments of €1 million each will be made once the environmental impact statement (“EIS”) and the final mining permits for any
project within any of the investigation permits acquired under the Transaction are secured.
The principal accounting policies applied in the preparation of these consolidated and company 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 Reporting Standards
(“IFRS”). IFRS comprise the standards issued by the International Accounting Standards Board (“IASB”).
The financial statements are presented in € and all values are rounded to the nearest thousand (€’000), except where otherwise
indicated.
Additionally, the financial statements have also been prepared in accordance with the IFRS as adopted by the European Union and
the requirements of the Cyprus Companies Law, Cap.113. For the year ending 31 December 2021, the standards applicable for
IFRS’s as adopted by the EU are aligned with the IFRS’s as issued by the IASB.
The consolidated financial statements have been prepared on a historical cost basis except for the revaluation of certain financial
instruments that are measured at fair value at the end of each reporting period, as explained below and in note 3.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting 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 3.3.
(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.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 111
Accordingly, these financial statements have been prepared based on accounting principles applicable to a going concern which
assumes that the Group and the Company will realise its assets and discharge its liabilities in the normal course of business.
Management has carried out an assessment of the going concern assumption and has concluded that the Group and the Company
will generate sufficient cash and cash equivalents to continue operating for the next twelve months since the approval of these
consolidated financial statements.
Management is assessing the impact of geopolitical developments as described in note 35 (Events after the reporting period).
Currently no significant impact is expected in the operations of the Group.
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 2021.
Several other amendments and interpretations apply for the first time in 2021, but do not have a significant impact on the financial
statements of the Group. The Group has not early adopted any standards, interpretations or amendments that have been issued
but are not yet effective.
IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments)
The amendments are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted. In May
2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12 and specify
how companies should account for deferred tax on transactions such as leases and decommissioning obligations. Under the
amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal taxable
and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning
liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal. The
Amendments have not yet been endorsed by the EU. The amendment is not expected to have a material impact on the Group.
Covid-19-Related Rent Concessions beyond 30 June 2021 Amendments to IFRS 16
On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases. The amendments provide
relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct
consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent
concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments
resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change
were not a lease modification.
The amendment was intended to apply until 30 June 2021, but as the impact of the pandemic is continuing, on 31 March 2021, the
IASB extended the period of application of the practical expedient to 30 June 2022. The amendment applies to annual reporting
periods beginning on or after 1 April 2021. However, the Group has not received Covid-19-related rent concessions but plans to
apply the practical expedient if it becomes applicable within allowed period of application.
Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:
•
•
A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be
treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest.
Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging
relationship being discontinued.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 112
Temporary relief provided to entities from having to meet the separately identifiable requirement when an RFR instrument is
designated as a hedge of a risk component.
These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use the practical
expedients in future periods if they become applicable.
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the
financial statements are disclosed below. Some of them were adopted by the European Union and others not yet. The Group and
the Company intend to adopt these new and amended standards and interpretations, if applicable, when they become effective.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities
as current or non-current. The amendments clarify:
• What is meant by a right to defer settlement
•
•
•
That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not
impact its classification
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively.
The Group is currently assessing the impact the amendments will have on current practice and whether existing loan agreements
may require renegotiation. The amendment is not expected to have a material impact on the Group.
Reference to the Conceptual Framework – Amendments to IFRS 3
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The
amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements,
issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly
changing its requirements.
The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses arising
for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.
At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by
replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The amendments are
effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively.
The amendment is not expected to have a material impact on the Group.
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended Use, which prohibits entities deducting
from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to
the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively
to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when
the entity first applies the amendment.
The amendments are not expected to have a material impact on the Group.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements
113
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether
a contract is onerous or loss-making.
The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services
include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs
do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The amendment is not expected
to have a material impact on the Group.
IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued amendment to IFRS 9. The amendment
clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially
different from the terms of the original financial liability. The fees include only those paid or received between the borrower and the
lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to
financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first
applies the amendment.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. The
amendment is not expected to have a material impact on the Group.
Definition of Accounting Estimates - Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting estimates’. The amendments
clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.
Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to changes in accounting
policies and accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this fact
is disclosed.
The amendments are not expected to have a material impact on the Group.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it
provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments
aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose
their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how
entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023 with earlier application permitted.
Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material
to accounting policy information, an effective date for these amendments is not necessary.
The Group is currently assessing the impact of the amendments to determine the impact they will have on the Group’s accounting
policy disclosures.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 114
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)
The amendments are effective for annual periods beginning on or after 1 January 2022 with earlier application permitted. The IASB
has issued narrow-scope amendments to the IFRS Standards as follows:
•
•
•
•
IFRS 3 Business Combinations (Amendments) update a reference in IFRS 3 to the Conceptual Framework for Financial
Reporting without changing the accounting requirements for business combinations.
IAS 16 Property, Plant and Equipment (Amendments) prohibit a company from deducting from the cost of property, plant
and equipment amounts received from selling items produced while the company is preparing the asset for its intended use.
Instead, a company will recognise such sales proceeds and related cost in profit or loss.
IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendments) specify which costs a company includes in
determining the cost of fulfilling a contract for the purpose of assessing whether a contract is onerous.
Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting
Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases
The Amendments have not yet been endorsed by the EU. The amendment is not expected to have a material impact on the Group.
2.3 Consolidation
(a) Basis of consolidation
The consolidated financial statements comprise the financial statements of Atalaya Mining Plc and its subsidiaries.
(b) Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Group and the Company has control. Control exists
when the Group is exposed, or has rights, to variable returns for its involvement with the investee and has the ability to affect
those returns through its power over the investee. The existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls another entity. The Group also assesses existence of
control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue
of de-facto control.
De-facto control may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of
holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.
The Group re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of
the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group
ceases to control the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling
interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to
the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-
group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are
eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. If the Group loses control over a
subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of
equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value’.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 115
The main operating subsidiary of Atalaya Mining Plc is the 100% owned Atalaya Riotinto Minera, S.L.U. which operates “Proyecto
Riotinto”, in the historical site of Huelva, Spain.
The name and shareholding of the entities included in the Group in these financial statements are:
Entity name
Atalaya Mining, Plc
EMED Marketing Ltd.
EMED Mining Spain, S.L. (5)
Atalaya Riotinto Minera, S.L.U.
Recursos Cuenca Minera, S.L. (4)
Atalaya Minasderiotinto Project (UK), Ltd.
Eastern Mediterranean Exploration & Development, S.L.U.
Atalaya Touro (UK), Ltd.
Fundación Atalaya Riotinto
Cobre San Rafael, S.L. (1)
Atalaya Servicios Mineros, S.L.U.
Atalaya Masa Valverde, S.L.U.
Atalaya Financing Ltd.
Rio Narcea Nickel S.L. (2)
Notes
Business
Holding
Marketing
Dormant
Operating
Operating
Holding
Operating
Holding
Trust
Development
Dormant
Development
Financing
Development
%(3)
n/a
100%
100%
100%
50%
100%
100%
100%
100%
10%
100%
100%
100%
51%
Country
Cyprus
Cyprus
Spain
Spain
Spain
UK
Spain
UK
Spain
Spain
Spain
Spain
Cyprus
Spain
(1) Cobre San Rafael, S.L. is the entity which holds the mining rights of the Proyecto Touro. The Group has control in the management of Cobre
San Rafael, S.L., including one of the two Directors, management of the financial books and the capacity to appoint the key personnel. Refer to
Note 30 for details on the acquisition of Cobre San Rafael, S.L.
(2) Rio Narcea Nickel S.L. is the entity which holds 17 investigation permits. This group of 17 permits will be known collectively as Proyecto Ossa
Morena (“POM”) and are strategically distributed along prospective zones of the Ossa Morena Metallogenic Belt, and in particular, along the
southern flank of the major Olivenza-Monesterio Antiform (“OMA”). Refer to Note 30 for details on the acquisition of Atalaya Ossa Morena, S.L.
(3) The effective proportion of shares held as at 31 December 2021 and 2020 remained unchanged.
(4) Recursos Cuenca Minera is a joint venture with Atalaya Riotinto Minera SLU, see note 16.
(5) EMED Mining Spain, S.L. was disposed on 4 January 2022.
The Group applied the acquisition method to account for business combinations. The consideration transferred for the acquisition
of a subsidiary is the fair value of the transferred assets, liabilities incurred by the former owners of the acquiree and the equity
interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination
are measured initially at fair value at the acquisition date. The Group recognised any non-controlling interest in the acquiree on
an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionated share of the recognised
amounts of acquiree’s identifiable net assets.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 116
(c) Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquire is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement
are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes
to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 in
profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted
for within equity.
Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Gains
and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
(d) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is,
as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
(e) Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is
lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes
of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income
are reclassified to profit or loss.
(f) Associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee (generally accompanying a shareholding of between 20% and 50% of the
voting rights) but is not control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control.
Investments in associates or joint ventures are accounted for using the equity method of accounting. Under the equity method, the
investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the
profit or loss of the investee after the date of acquisition. The Group’s investment in associates or joint ventures includes goodwill
identified on acquisition.
If the ownership interest in an associate or joint venture is reduced but significant influence is retained, only a proportionate share
of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 117
The Group’s share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition
movements in other comprehensive income is recognised in other comprehensive income, with a corresponding adjustment to the
carrying amount of the investment. When the Group share of losses in an associate or a joint venture equals or exceeds its interest
in the associate or joint venture, including any other unsecured receivables, the Group does not recognise further losses, unless it
has incurred legal or constructive obligations or made payments on behalf of the associate or the joint venture.
The Group determines at each reporting date whether there is any objective evidence that the investment in the associate or
the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the
recoverable amount of the associate or the joint venture and its carrying value and recognises the amount adjacent to ‘share of
profit/(loss) of associates’ or joint ventures’ in the income statement.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate or joint venture are
recognised in the Group’s consolidated financial statements only to the extent of unrelated investors’ interests in the associates
or the joint ventures. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies
adopted by the Group. Dilution gains and losses arising in investments in associates or joint ventures are recognised in the income
statement.
(g) Functional currency
Functional and presentation currency items included in the financial statements of each of the Group’s entities are measured using
the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements
are presented in Euro which is the Company’s functional and presentation currency.
Determination of functional currency may involve certain judgements to determine the primary economic environment and the
parent entity reconsiders the functional currency of its entities if there is a change in events and conditions which determined the
primary economic environment.
Foreign currency transactions are translated into the functional currency using the spot exchange rates prevailing at the dates of
the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of
such transactions are recognised in the income statement.
Monetary assets and liabilities denominated in foreign currencies are updated at year-end spot exchange rates.
Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates
of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined.
Gains or losses of monetary and non-monetary items are recognised in the income statement.
Balance sheet items are translated at period-end exchange rates. Exchange differences on translation of the net assets of such
entities whose functional currency are not the Euro are taken to equity and recorded in a separate currency translation reserve.
2.4 Investments in subsidiary companies in the Company’s financial statements
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense
in the period in which the impairment is identified.
2.5 Interest in joint arrangements
A joint arrangement is a contractual arrangement whereby the Group and other parties undertake an economic activity that
is subject to joint control that is when the strategic, financial and operating policy decisions relating to the activities the joint
arrangement require the unanimous consent of the parties sharing control.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 118
Where a Group entity undertakes its activities under joint arrangements directly, the Group’s share of jointly controlled assets and
any liabilities incurred jointly with other ventures are recognised in the financial statements of the relevant entity and classified
according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted
for on an accrual basis. Income from the sale or use of the Group’s share of the output of jointly controlled assets, and its share of
joint arrangement expenses, are recognised when it is probable that the economic benefits associated with the transactions will
flow to/from the Group and their amount can be measured reliably.
The Group enters joint arrangements that involve the establishment of a separate entity in which each acquiree has an interest
(jointly controlled entity). The Group reports its interests in jointly controlled entities using the equity method of accounting.
Where the Group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the extent of the
Group’s interest in the joint arrangement.
2.6 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the CEO who makes strategic decisions.
The Group has only one distinct business segment, being that of mining operations, mineral exploration and development.
2.7 Inventory
Inventory consists of copper concentrates, ore stockpiles and metal in circuit and spare parts. Inventory is physically measured
or estimated and valued at the lower of cost or net realisable value. Net realisable value is the estimated future sales price of the
product the entity expects to realise when the product is processed and sold, less estimated costs to complete production and
bring the product to sale. Where the time value of money is material, these future prices and costs to complete are discounted.
Cost is determined by using the FIFO method and comprises direct purchase costs and an appropriate portion of fixed and variable
overhead costs, including depreciation and amortisation, incurred in converting materials into finished goods, based on the normal
production capacity. The cost of production is allocated to joint products using a ratio of spot prices by volume at each month end.
Separately identifiable costs of conversion of each metal are specifically allocated.
Materials and supplies are valued at the lower of cost or net realisable value. Any provision for obsolescence is determined by
reference to specific items of stock. A regular review is undertaken to determine the extent of any provision for obsolescence.
2.8 Assets under construction
All subsequent expenditure on the construction, installation or completion of infrastructure facilities including mine plants and
other necessary works for mining, are capitalised in “Assets under Construction”. Any costs incurred in testing the assets to
determine if they are functioning as intended, are capitalised, net of any proceeds received from selling any product produced
while testing. Where these proceeds exceed the cost of testing, any excess is recognised in the statement of profit or loss and
other comprehensive income. After production starts, all assets included in “Assets under Construction” are then transferred to the
relevant asset categories.
Once a project has been established as commercially viable, related development expenditure is capitalised. A development
decision is made based upon consideration of project economics, including future metal prices, reserves and resources, and
estimated operating and capital costs. Capitalisation of costs incurred and proceeds received during the development phase
ceases when the property is capable of operating at levels intended by management.
Capitalisation ceases when the mine is capable of commercial production, except for development costs which give rise to a future
benefit.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 119
Pre-commissioning sales are offset against the cost of assets under construction. No depreciation is recognised until the assets
are substantially complete and ready for productive use.
2.9 Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred.
Property, plant and equipment are depreciated to their estimated residual value over the estimated useful life of the specific asset
concerned, or the estimated remaining life of the associated mine (“LOM”), field or lease. Depreciation commences when the asset
is available for use.
The major categories of property, plant and equipment are depreciated/amortised on a Unit of Production (“UOP”) and/or straight-
line basis as follows:
Buildings
Mineral rights
Deferred mining costs
Plant and machinery
Motor vehicles
Furniture/fixtures/office equipment
UOP
UOP
UOP
UOP
5 years
5 – 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
“Other (losses)/gains – net” in the income statement.
(a) Mineral rights
Mineral reserves and resources which can be reasonably valued are recognised in the assessment of fair values on acquisition.
Mineral rights for which values cannot be reasonably determined are not recognised. Exploitable mineral rights are amortised
using the UOP basis over the commercially recoverable reserves and, in certain circumstances, other mineral resources. Mineral
resources are included in amortisation calculations where there is a high degree of confidence that they will be extracted in an
economic manner.
(b) Deferred mining costs – stripping costs
Mainly comprises of certain capitalised costs related to pre-production and in-production stripping activities as outlined below.
Stripping costs incurred in the development phase of a mine (or pit) before production commences are capitalised as part of the
cost of constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a UOP basis.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 120
In-production stripping costs related to accessing an identifiable component of the ore body to realise benefits in the form of
improved access to ore to be mined in the future (stripping activity asset), are capitalised within deferred mining costs provided all
the following conditions are met:
i. it is probable that the future economic benefit associated with the stripping activity will be realised;
ii. the component of the ore body for which access has been improved can be identified and;
iii. the costs relating to the stripping activity associated with the improved access can be reliably measured.
If all of the criteria are not met, the production stripping costs are charged to the consolidated statement of income as they are
incurred.
The stripping activity asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping
activity that improves access to the identified component of ore, plus an allocation of directly attributable overhead costs.
(c) Exploration costs
Under the Group’s accounting policy, exploration expenditure is not capitalised until the management determines a property will
be developed and point is reached at which there is a high degree of confidence in the project’s viability and it is considered
probable that future economic benefits will flow to the Group. A development decision is made based upon consideration of project
economics, including future metal prices, reserves and resources, and estimated operating and capital costs.
Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. If
a project does not prove viable, all irrecoverable costs associated with the project net of any related impairment provisions are
written off.
(d) Major maintenance and repairs
Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of assets and overhaul
costs. Where an asset, or part of an asset, that was separately depreciated and is now written off is replaced, and it is probable that
future economic benefits associated with the item will flow to the Group through an extended life, the expenditure is capitalised.
Where part of the asset was not separately considered as a component and therefore not depreciated separately, the replacement
value is used to estimate the carrying amount of the replaced asset(s) which is immediately written off. All other day-to-day
maintenance and repairs costs are expensed as incurred.
(e) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale (a qualifying asset) are capitalised as part of the cost of the respective asset.
Where funds are borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred.
All other borrowing costs are recognised in the statement of profit or loss and other comprehensive income in the period in which
they are incurred.
(f) Restoration, rehabilitation and decommissioning
Restoration, rehabilitation and decommissioning costs arising from the installation of plant and other site preparation work,
discounted using a risk adjusted discount rate to their net present value, are provided for and capitalised at the time such an
obligation arises.
The costs are charged to the consolidated statement of income over the life of the operation through depreciation of the asset
and the unwinding of the discount on the provision. Costs for restoration of subsequent site disturbance, which are created on an
ongoing basis during production, are provided for at their net present values and charged to the consolidated statement of income
as extraction progresses.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 121
Changes in the estimated timing of the rehabilitation or changes to the estimated future costs are accounted for prospectively by
recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, provided
the reduction in the provision is not greater than the depreciated capitalised cost of the related asset, in which case the capitalised
cost is reduced to zero and the remaining adjustment recognised in the consolidated statement of income. In the case of closed
sites, changes to estimated costs are recognised immediately in the consolidated statement of income.
2.10 Intangible assets
(a) Business combination and goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the acquired
interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the
non-controlling interest in the acquiree.
The results of businesses acquired during the year are brought into the consolidated financial statements from the effective date of
acquisition. The identifiable assets, liabilities and contingent liabilities of a business which can be measured reliably are recorded
at their provisional fair values at the date of acquisition. Acquisition-related costs are expensed as incurred.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair
value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.
For the purposes of goodwill impairment testing, goodwill acquired in a business combination is allocated to groups of CGUs that
are expected to benefit from the synergies of the combination.
An impairment loss in respect of goodwill is not reversed.
(b) Permits
Permits are capitalised as intangible assets which relate to projects that are at the pre-development stage. No amortisation
charge is recognised in respect of these intangible assets. Once the Group receives those permits and commence production, the
intangible assets relating to permits will be depreciated on a UOP basis.
Other intangible assets include computer software.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition provided they meet recognition criteria as per IFRS 3. Following
initial recognition, intangible assets are carried at cost less any accumulated amortisation (calculated on a straight-line basis over
their useful lives) and accumulated impairment losses, if any.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset
with a finite useful life are reviewed at least at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the consolidated and company statements of comprehensive income
when the asset is derecognised.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 122
2.11 Impairment of non-financial assets
Assets that have an indefinite useful life – for example, goodwill or intangible assets not ready for use – are not subject to
amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that
suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
2.12 Financial assets and liabilities
2.12.1 Classification
From 1 January 2019, the Group classifies its financial assets in the following measurement categories:
•
•
•
those to be measured at amortised cost.
those to be measured subsequently at fair value through OCI, and.
those to be measured subsequently at fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s and the Company’s business model for managing them. In order for a financial asset to be classified and measured
at amortised cost, it needs to give rise to cash flows that are ‘solely payments of principal and interest’ (‘SPPI’) on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to
purchase or sell the asset.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely
payment of principal and interest.
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow
characteristics of the asset. There are three measurement
categories into which the Group classifies its debt instruments:
2.12.2 Amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the
effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in
other gains/(losses) together with foreign exchange gains and losses.
Impairment losses are presented as separate line item in the statement of profit or loss.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 123
The Company´s financial assets at amortised cost include current and non-current receivables (other than trade receivables which
are measured at fair value through profit and loss) and cash and cash equivalents.
2.12.3 Fair value through other comprehensive income
Financial assets which are debt instruments, that are held for collection of contractual cash flows and for selling the financial
assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in
the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain
or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest
income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains
and losses are presented in net foreign exchange gain/(loss) before tax and impairment expenses are presented as a separate line
item in the statement of profit or loss.
At transition to IFRS 9, the Group had certain financial asset that were accounted for as debt instruments at fair value through other
comprehensive income.
2.12.4 Equity instruments designated as fair value through other comprehensive income
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair
value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for
trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the
consolidated and company statements of comprehensive income when the right of payment has been established, except when
the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under this category.
2.12.5 Assets at fair value through profit and loss
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is
subsequently measured at FVPL is recognised as profit or loss and presented net within other gains/(losses) in the period in which
it arises.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the consolidated and company
statements of comprehensive income as applicable. The Company’s and Group’s financial assets at fair value through profit and
loss include current and non-current receivables (other than trade receivables which are measured amortised cost).
2.12.6 De-recognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership.
2.12.7 Impairment of financial assets
From 1 January 2019, the Group assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost. Expected credit losses are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 124
For receivables (other than trade receivables which are measured at FVPL), the Group applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the
Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely
to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A
financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs
when past due for more than one year and not subject to enforcement activity.
2.12.8. Financial liabilities and trade payables
After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in the consolidated and company statements of comprehensive
income when the liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by taking any discount or premium on acquisition and fees or costs that are an integral part of the EIR,
into account. The EIR amortisation is included as finance costs in the consolidated and company statements of comprehensive
income
2.13 Current versus Non-current Classification
The Group presents assets and liabilities in the consolidated and company statements of financial position based on current/non-
current classification.
(a) An asset is current when it is either:
•
•
•
•
Expected to be realised or intended to be sold or consumed in normal operating cycle;
Held primarily for the purpose of trading;
Expected to be realised within 12 months after the reporting period; Or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period
All other assets are classified as non-current.
(b) A liability is current when either:
•
•
•
•
It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading
It is due to be settled within 12 months after the reporting period; Or
There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.14 Cash and cash equivalents
In the consolidated and company statements of cash flows, cash and cash equivalents includes cash in hand and in bank including
deposits held at call with banks, with a maturity of less than 3 months.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 125
2.15 Provisions
Provisions are recognised when: The Group has a present legal or constructive obligation as a result of past events; it is probable
that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not
recognised for future operating losses.
2.16 Interest-bearing loans and borrowings
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest
expense.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss
over the period of the borrowings, using the effective interest method, unless they are directly attributable to the acquisition,
construction or production of a qualifying asset, in which case they are capitalised as part of the cost of that asset.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised
over the period of the facility to which it relates.
Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on
borrowings, amortisation of discounts or premium relating to borrowings, amortisation of ancillary costs incurred in connection
with the arrangement of borrowings, finance lease charges and exchange differences arising from foreign currency borrowings to
the extent that they are regarded as an adjustment to interest costs.
2.17 Deferred consideration
Deferred consideration arises when settlement of all or any part of the cost of an agreement is deferred. It is stated at fair value
at the date of recognition, which is determined by discounting the amount due to present value at that date. Interest is imputed on
the fair value of non-interest-bearing deferred consideration at the discount rate and expensed within interest payable and similar
charges. At each balance sheet date deferred consideration comprises the remaining deferred consideration valued at acquisition
plus interest imputed on such amounts from recognition to the balance sheet date.
2.18 Share capital
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the Company and
the nominal value of the share capital being issued is taken to the share premium account.
Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the
proceeds in the share premium account.
2.19 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 126
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period date in the countries where the Company and its subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill; deferred income tax is also not recognised if it arises from initial recognition of
an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss. Income tax is determined using tax rates (and laws) that have been enacted or substantively enacted
by the end of the reporting period date and are expected to apply when the related deferred tax asset is realised or the deferred
income tax liability is settled. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred
income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax
liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
2.20 Share-based payments
The Group operates a share-based compensation plan, under which the entity receives services from employees as consideration
for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the
options is recognised as an expense. The fair value is measured using the Black Scholes pricing model. The inputs used in the
model are based on management’s best estimates for the effects of non-transferability, exercise restrictions and behavioural
considerations. Non-market performance and service conditions are included in assumptions about the number of options that
are expected to vest.
Vesting conditions are: (i) the personnel should be an employee that provides services to the Group; and (ii) should be in continuous
employment for the whole vesting period of 3 years. Specific arrangements may exist with senior managers and board members,
whereby their options stay in use until the end.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are
to be satisfied (Note 23).
2.21 Rehabilitation provisions
The Group records the present value of estimated costs of legal and constructive obligations required to restore operating
locations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and
removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites
and restoration, reclamation and re-vegetation of affected areas. The obligation generally arises when the asset is installed, or
the ground/environment is disturbed at the production location. When the liability is initially recognised, the present value of the
estimated cost is capitalised by increasing the carrying amount of the related mining assets to the extent that it was incurred
prior to the production of related ore. Over time, the discounted liability is increased for the change in present value based on the
discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount
is recognised in the consolidated income statement as a finance cost. Additional disturbances or changes in rehabilitation costs
will be recognised as additions or charges to the corresponding assets and rehabilitation liability when they occur. For closed sites,
changes to estimated costs are recognised immediately in the consolidated income statement.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 127
The Group assesses its mine rehabilitation provision annually. Significant estimates and assumptions are made in determining the
provision for mine rehabilitation as there are numerous factors that will affect the ultimate liability payable. These factors include
estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes and changes in discount
rates. Those uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision at
the consolidated statement of financial position date represents management’s best estimate of the present value of the future
rehabilitation costs required.
2.22 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception
date including whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement
conveys a right to use the asset.
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use
the underlying assets.
A reassessment is made after inception of the lease only if one of the following applies:
a) There is a change in contractual terms, other than a renewal or extension of the arrangement;
b) A renewal option is exercised, or extension granted, unless the term of the renewal or extension was initially included in the lease
term;
c) There is a change in the determination of whether fulfilment is dependent on a specified asset; or
d) There is a substantial change to the asset.
Group as a lessee
The Group has lease contracts for various items of laboratory equipment, motor vehicle, lands and buildings used in its operations.
Leases of laboratory equipment and motor vehicles generally have lease terms for four years, while lands and buildings generally
have lease terms for the life of mine, currently after 13 years of operation. The Group’s obligations under its leases are secured by
the lessor’s title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets.
Accounting policy - leases
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain
ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line
basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 128
After initial measurement, the right-of-use assets are depreciated from the commencement date using the straight-line method
over the shorter of the estimated useful lives of the right-of-use assets or the end of lease term. These are as follows:
Right-of-use asset
Depreciation terms in years
Lands and buildings
Based on Units of Production (UOP)
Motor vehicles
Based on straight line depreciation
Laboratory equipment
Based on straight line depreciation
After the commencement date, the right-of-use assets are measured at cost less any accumulated depreciation and any
accumulated impairment losses and adjusted for any remeasurement of the lease liability.
Lease liabilities
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease payments included in the measurement
of the lease liability include the following:
•
•
•
•
•
•
Fixed payments, less any lease incentives receivable
Variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement
date
Amounts expected to be payable by the lessee under residual value guarantees
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option
Lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option
Payments of penalties for early terminating the lease, unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest rate method. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the in-substance fixed
lease payments or a change in the assessment to purchase the underlying asset. The result of this re-measurement is disclosed in
a line of the right-of-use assets note as modifications.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is
recorded as profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (i.e.,
below €5,000). Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line
basis over the lease term.
Significant judgement in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option
to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 129
The Group has the option, under some of its leases to lease the assets for additional terms of three to five years. The Group applies
judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that
create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if
there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise)
the option to renew (e.g., a change in business strategy). The Group included the renewal period as part of the lease term for leases
of plant and machinery due to the significance of these assets to its operations. These leases have a short non-cancellable period
(i.e., three to five years) and there will be a significant negative effect on production if a replacement is not readily available. The
renewal options for leases of motor vehicles were not included as part of the lease term because the Group has a policy of leasing
motor vehicles for not more than five years and hence not exercising any renewal options.
2.23 Revenue recognition
(a) Revenue from contracts with customers
Atalaya is principally engaged in the business of producing copper concentrate and in some instances, provides freight/shipping
services. Revenue from contracts with customers is recognised when control of the goods or services is transferred to the
customer at an amount that reflects the consideration to which Atalaya expects to be entitled in exchange for those goods or
services. Atalaya has concluded that it is the principal in its revenue contracts because it controls the goods or services before
transferring them to the customer.
(b) Copper in concentrate (metal in concentrate) sales
For most copper in concentrate (metal in concentrate) sales, the enforceable contract is each purchase order, which is an individual,
short-term contract. For the Group’s metal in concentrate sales not sold under CIF Incoterms, the performance obligations are the
delivery of the concentrate. A proportion of the Group’s metal in concentrate sales are sold under CIF Incoterms, whereby the Group
is also responsible for providing freight services. In these situations, the freight services also represent separate performance
obligation (see paragraph (c) below).
The majority of the Group’s sales of metal in concentrate allow for price adjustments based on the market price at the end of the
relevant QP stipulated in the contract. These are referred to as provisional pricing arrangements and are such that the selling price
for metal in concentrate is based on prevailing spot prices on a specified future date after shipment to the customer. Adjustments
to the sales price occur based on movements in quoted market prices up to the end of the QP. The period between provisional
invoicing and the end of the QP can be between one and three months.
Revenue is recognised when control passes to the customer, which occurs at a point in time when the metal in concentrate is
physically transferred onto a vessel, train, conveyor or other delivery mechanism. The revenue is measured at the amount to which
the Group expects to be entitled, being the estimate of the price expected to be received at the end of the QP, i.e., the forward
price, and a corresponding trade receivable is recognised. For those arrangements subject to CIF shipping terms, a portion of the
transaction price is allocated to the separate freight services provided (See paragraph (c) below).
For these provisional pricing arrangements, any future changes that occur over the QP are included within the provisionally priced
trade receivables and are, therefore, within the scope of IFRS 9 and not within the scope of IFRS 15. Given the exposure to the
commodity price, these provisionally priced trade receivables will fail the cash flow characteristics test within IFRS 9 and will
be required to be measured at fair value through profit or loss up from initial recognition and until the date of settlement. These
subsequent changes in fair value are recognised as part of revenue in the statement of profit or loss and other comprehensive
income each period and disclosed separately from revenue from contracts with customers as part of ‘Fair value gains/losses on
provisionally priced trade receivables. Changes in fair value over, and until the end of, the QP, are estimated by reference to updated
forward market prices for copper as well as taking other relevant fair value considerations as set out in IFRS 13, into account,
including interest rate and credit risk adjustments.
Final settlement is based on quantities adjusted as required following the inspection of the product by the customer as well as
applicable commodity prices. IFRS 15 requires that variable consideration should only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognized will not occur. As the adjustments relating to
the final assay results for the quantity and quality of concentrate sold are not significant, they do not constrain the recognition of
revenue.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 130
(c) Freight services
As noted above, a proportion of the Group’s metal in concentrate sales are sold under CIF Incoterms, whereby the Group is
responsible for providing freight services (as principal) after the date that the Group transfers control of the metal in concentrate to
its customers. The Group, therefore, has separate performance obligation for freight services which are provided solely to facilitate
sale of the commodities it produces.
The revenue from freight services is a separate performance obligation under IFRS 15 and therefore is recognised as the service is
provided, hence at year end a portion of revenue must be deferred as well as the insurance costs associated.
Other Incoterms commonly used by the Group are FOB, where the Group has no responsibility for freight or insurance once control
of the products has passed at the loading port, Ex works where control of the goods passes when the product is picked up at seller´s
promises, and CIP where control of the goods passes when the product is delivered to the agreed destination. For arrangements
which have these Incoterms, the only performance obligations are the provision of the product at the point where control passes.
(d) Sales of services
The Group sells services in relation to maintenance of accounting records, management, technical, administrative support and
other services to other companies. Revenue is recognised in the accounting period in which the services are rendered.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs
by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset
is recognised for the earned consideration that is conditional. The Group does not have any contract assets as performance and a
right to consideration occurs within a short period of time and all rights to consideration are unconditional.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or
services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when the Group performs under the contract.
From time to time, the Group recognises contract liabilities in relation to some metal in concentrate sales which are sold under CIF
Incoterms, whereby a portion of the cash may be received from the customer before the freight services are provided.
2.24 Interest income
Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the Group and the
Company reduce the carrying amount to its recoverable amount, the estimated future cash flow is discounted at the original
effective interest rate of the instrument and the discount continues unwinding as interest income. Interest income on impaired loan
and receivables is recognised using the original effective interest rate.
2.25 Dividend income
Dividend income is recognised when the right to receive payment is established.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements
131
2.26 Dividend distribution
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial statements in the period
in which the dividends are approved by the Company’s shareholders.
2.27 Earnings per share
Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares
outstanding during the year. The basic and diluted earnings per share are the same as there are no instruments that have a dilutive
effect on earnings.
2.28 Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
2.29 Amendment of financial statements after issue
The consolidated and company financial statements were authorised for issue by the Board of Directors on 23 March 2022. The
Board of Directors and shareholders has no right to amend the Financial Statements after they are authorised.
2.30 Fair value estimation
The fair values of the Group’s financial assets and liabilities approximate their carrying amounts at the reporting date.
The fair value of financial instruments traded in active markets, such as publicly traded and available-for-sale financial assets is
based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the
current bid price. The appropriate quoted market price for financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The
Group uses a variety of methods, such as estimated discounted cash flows, and makes assumptions that are based on market
conditions existing at the reporting date.
Fair value measurements recognised in the consolidated and company statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
Grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
•
•
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that
are not based on observable market data (unobservable inputs).
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 132
THE GROUP
(Euro 000’s)
31 December 2021
Other current financial assets
Financial assets at FV through OCI
Trade and other receivables
Receivables (subject to provisional pricing)
Total
31 December 2020
Other current financial assets
Financial assets at FV through OCI
Trade and other receivables
Receivables (subject to provisional pricing)
Total
THE COMPANY
(Euro 000’s)
31 December 2021
Non-current receivables
Financial assets at FV through profit and loss (note 31.4)
Other current financial assets
Financial assets at FV through OCI
Total
31 December 2020
Non-current receivables
Financial assets at FV through profit and loss (note 31.4)
Other current financial assets
Financial assets at FV through OCI
Total
Level 1
Level 2
Level 3
Total
39
-
39
86
-
86
-
1,101
1,140
29,148
29,148
-
1,101
29,148
30,288
-
1,101
1,187
24,250
24,250
-
1,101
24,250
25,437
Level 1
Level 2
Level 3
Total
-
39
39
-
86
86
-
-
-
-
-
-
176,292
176,292
-
39
176,292
176,331
243,557
243,557
-
86
243,557
243,643
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 133
3. Financial Risk Management and Critical accounting estimates
and judgements
3.1 Financial risk factors
The Group manages its exposure to key financial risks in accordance with its financial risk management policy. The objective of
the policy is to support the delivery of the Group’s financial targets while protecting future financial security. The main risks that
could adversely affect the Group’s financial assets, liabilities or future cash flows are market risks comprising: commodity price
risk, interest rate risk and foreign currency risk; liquidity risk and credit risk; operational risk, compliance risk and litigation risk.
Management reviews and agrees policies for managing each of these risks that are summarised below.
The Group’s senior management oversees the management of financial risks. The Group’s senior management is supported by
the AFRC that advises on financial risks and the appropriate financial risk governance framework for the Group. The AFRC provides
assurance to the Group’s senior management that the Group’s financial risk-taking activities are governed by appropriate policies
and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk
objectives. Currently, the Group does not apply any form of hedge accounting.
(a) Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially
enhances profitability but can also increase the risk of losses. The Group has procedures with the object of minimising such losses
such as maintaining sufficient cash to meet liabilities when due. Cash flow forecasting is performed in the operating entities of the
Group and aggregated by Group finance. Group finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it
has sufficient cash to meet operational needs.
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.
The table includes principal cash flows.
THE GROUP
(Euro 000’s)
31 December 2021
Carrying
amounts
Contractual
cash flows
Less than
3 months
Between
3 – 12
months
Between
1 – 2
years
Between
2 – 5
years
Over
5 years
Tax liability
336
336
Other financial liabilities
47,444
47,444
-
-
Trade and other payables
69,641
53,977
32,593
Lease liability
5,510
5,510
-
336
13,394
33,613
597
-
-
28,425
5,625
-
-
-
2,014
-
-
3,435
2,899
122,931
107,267
32,593
47,940
28,425
7,639
6,334
31 December 2020
Tax liability
1,310
1,310
-
Deferred consideration
53,000
53,000
53,000
1,310
-
Trade and other payables
69,885
69,885
27,077
41,360
Lease liability
6,046
6,046
154
463
-
13
619
-
-
1,435
1,623
-
-
-
3,187
130,241
130,241
80,231
43,133
632
3,058
3,187
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 134
THE COMPANY
(Euro 000’s)
31 December 2021
Trade and other payables
31 December 2020
Tax liability
Deferred consideration
Trade and other payables
(b) Currency risk
Carrying
amounts
Contractual
cash flows
Less than
3 months
Between
3 – 12
months
Between
1 – 2
years
Between
2 – 5
years
Over
5 years
2,013
2,013
473
9,117
12,485
22,075
493
493
473
9,117
12,485
22,075
-
-
-
-
-
-
2,013
2,013
473
9,117
12,485
22,075
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.
Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that
is not the Group’s measurement currency. The Group is exposed to foreign exchange risk arising from various currency exposures
primarily with respect to the US Dollar and the British Pound. The Group’s management monitors the exchange rate fluctuations on
a continuous basis and acts accordingly.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in the foreign exchange rate, with all other
variables held constant, of the Group’s profit before tax due to changes in the carrying value of monetary assets and liabilities at
reporting date:
(Euro 000’s)
Effect on profit before tax for the year ended 31
Dec 2021 increase/(decrease)
Effect on profit before tax for the year ended
31 Dec 2020 increase/(decrease)
+5%
-5%
15,045
(15,045)
12,867
(12,867)
(c) Commodity price risk
Commodity price is the risk that the Group’s future earnings will be adversely impacted by changes in the market prices of
commodities, primarily copper. Management is aware of this impact on its primary revenue stream but knows that there is little it
can do to influence the price earned apart from a hedging scheme.
Commodity price hedging is governed by the Group´s policy which allows to limit the exposure to prices. The Group may decide to
hedge part of its production during the year.
Commodity price sensitivity
The table below summarises the impact on profit before tax for changes in commodity prices on the fair value of derivative financial
instruments and trade receivables (subject to provisional pricing). The impact on equity is the same as the impact on profit before
income tax as these derivative financial instruments have not been designated as hedges and are classified as held-for-trading and
are therefore fair valued through profit or loss.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 135
The analysis is based on the assumption that the copper prices move $0.05/lb with all other variables held constant. Reasonably
possible movements in commodity prices were determined based on a review of the last two years’ historical prices.
Effect on profit before tax for the year
ended 31 Dec 2021
increase/(decrease)
Effect on profit before tax for the year
ended 31 Dec 2020
increase/(decrease)
Eur 000’s
Eur 000’s
4,920
(4,920)
4,629
(4,629)
Increase/(decrease) in copper prices
Increase $0.05/lb (2021: $0.05)
Decrease $0.05/lb (2021: $0.05)
(d) Credit risk
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows
from financial assets on hand at the reporting date. The Group has no significant concentration of credit risk. The Group has
policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and
monitors on a continuous basis the ageing profile of its receivables. The Group has policies to limit the amount of credit exposure
to any financial institution.
Except as detailed in the following table, the carrying amount of financial assets recorded in the financial statements, which is net
of impairment losses, represents the maximum credit exposure without taking account of the value of any collateral obtained:
(Euro 000’s)
Unrestricted cash and cash equivalent at Group
Unrestricted cash and cash equivalent at operating entity
Restricted cash and cash equivalents at operating entity
Consolidates cash and cash equivalents
Net cash / (debt) position (1)
Working capital surplus / (deficit)
(1) Includes bank borrowings and Deferred Consideration at 31 December 2020.
2021
2020
48,375
24,519
43,722
13,248
15,420
-
107,517
37,767
60,073
(15,233)
102,430
(17,904)
Besides of the above, there are no collaterals held in respect of these financial instruments and there are no financial assets that
are past due or impaired as at 31 December 2021.
(e) Interest rate risk
Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. Borrowings
issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair
value interest rate risk. The Group’s management monitors the interest rate fluctuations on a continuous basis and acts accordingly.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 136
At the reporting date the interest rate profile of interest-bearing financial instruments was:
(Euro 000’s)
Variable rate instruments
Financial assets
2021
2020
107,517
37,767
An increase of 100 basis points in interest rates at 31 December 2021 would have increased / (decreased) equity and profit or loss
by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
For a decrease of 100 basis points there would be an equal and opposite impact on the profit and other equity.
(Euro 000’s)
Variable rate instruments
(f) Operational risk
2021
1,075
Equity
2020
378
Profit or loss
2020
378
2021
1,075
Operational risk is the risk that derives from the deficiencies relating to the Group’s information technology and control systems as
well as the risk of human error and natural disasters. The Group’s systems are evaluated, maintained and upgraded continuously.
(g) Compliance risk
Compliance risk is the risk of financial loss, including fines and other penalties, which arises from non-compliance with laws and
regulations. The Group has systems in place to mitigate this risk, including seeking advice from external legal and regulatory
advisors in each jurisdiction.
(h) Litigation risk
Litigation risk is the risk of financial loss, interruption of the Group’s operations or any other undesirable situation that arises from
the possibility of non-execution or violation of legal contracts and consequentially of lawsuits. The risk is restricted through the
contracts used by the Group to execute its operations.
3.2 Capital risk management
The Group considers its capital structure to consist of share capital, share premium and share options reserve. The Group’s
objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns
for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The
Group is not subject to any externally imposed capital requirements.
In order to maintain or adjust the capital structure, the Group issues new shares. The Group manages its capital to ensure that it
will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and
equity balance. The AFRC reviews the capital structure on a continuing basis.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain
an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 137
Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares,
obtain new borrowings or sell assets to reduce borrowings.
The Group monitors capital on the basis of the gearing ratio. The gearing ratio is calculated as net debt divided by total capital. Net
debt is calculated as provisions plus deferred consideration plus trade and other payables less cash and cash equivalents.
(Euro 000’s)
Total liabilities less cash
Total equity
Total capital
Gearing ratio
2021
2020
41,992
117,080
440,807
353,690
482,799
470,770
8.7%
24.9%
(1) Net debt includes non-current and current liabilities net of cash and cash equivalent.
3.3 Critical accounting estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of
contingent liabilities at the date of the consolidated financial statements. Estimates and assumptions are continually evaluated
and are based on management’s experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or liabilities affected in future periods.
In particular, the Group has identified a number of areas where significant judgements, estimates and assumptions are required.
(a) Capitalisation of exploration and evaluation costs
Under the Group’s accounting policy, exploration and evaluation expenditure is not capitalised until the point is reached at which
there is a high degree of confidence in the project’s viability, and it is considered probable that future economic benefits will flow
to the Group. Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped
project. If a project proves to be unviable, all irrecoverable costs associated with the project net of any related impairment provisions
are written off.
(b) Stripping costs
The Group incurs waste removal costs (stripping costs) during the development and production phases of its surface mining
operations. Furthermore, during the production phase, stripping costs are incurred in the production of inventory as well as in
the creation of future benefits by improving access and mining flexibility in respect of the orebodies to be mined, the latter being
referred to as a stripping activity asset. Judgement is required to distinguish between the development and production activities
at surface mining operations.
The Group is required to identify the separately identifiable components or phases of the orebodies for each of its surface mining
operations. Judgement is required to identify and define these components, and also to determine the expected volumes (tonnes)
of waste to be stripped and ore to be mined in each of these components. These assessments may vary between mines because
the assessments are undertaken for each individual mine and are based on a combination of information available in the mine
plans, specific characteristics of the orebody, the milestones relating to major capital investment decisions and the type and grade
of minerals being mined.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 138
Judgement is also required to identify a suitable production measure that can be applied in the calculation and allocation of
production stripping costs between inventory and the stripping activity asset. The Group considers the ratio of expected volume of
waste to be stripped for an expected volume of ore to be mined for a specific component of the orebody, compared to the current
period ratio of actual volume of waste to the volume of ore to be the most suitable measure of production.
These judgements and estimates are used to calculate and allocate the production stripping costs to inventory and/or the stripping
activity asset(s). Furthermore, judgements and estimates are also used to apply the units of production method in determining the
depreciable lives of the stripping activity asset(s).
(c) Ore reserve and mineral resource estimates
The Group estimates its ore reserves and mineral resources based on information compiled by appropriately qualified persons
relating to the geological and technical data on the size, depth, shape and grade of the ore body and suitable production techniques
and recovery rates.
Such an analysis requires complex geological judgements to interpret the data. The estimation of recoverable reserves is based
upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements and production costs,
along with geological assumptions and judgements made in estimating the size and grade of the ore body.
The Group uses qualified persons (as defined by the Canadian Securities Administrators’ National Instrument 43-101) to compile
this data. Changes in the judgments surrounding proven and probable reserves may impact as follows:
•
•
•
•
•
The carrying value of exploration and evaluation assets, mine properties, property, plant and equipment, and goodwill may be
affected due to changes in estimated future cash flows;
Depreciation and amortisation charges in the consolidated and company statements of comprehensive income may change
where such charges are determined using the UOP method, or where the useful life of the related assets change;
Capitalised stripping costs recognised in the statement of financial position as either part of mine properties or inventory or
charged to profit or loss may change due to changes in stripping ratios;
Provisions for rehabilitation and environmental provisions may change where reserve estimate changes affect expectations
about when such activities will occur and the associated cost of these activities;
The recognition and carrying value of deferred income tax assets may change due to changes in the judgements regarding the
existence of such assets and in estimates of the likely recovery of such assets.
(d) Impairment of assets
Events or changes in circumstances can give rise to significant impairment charges or impairment reversals in a particular year.
The Group assesses each Cash Generating Unit (“CGU”) annually to determine whether any indications of impairment exist. If it
was necessary management could contract independent expert to value the assets. Where an indicator of impairment exists, a
formal estimate of the recoverable amount is made, which is considered the higher of the fair value less cost to sell and value-in-
use. An impairment loss is recognised immediately in net earnings. The Group has determined that each mine location is a CGU.
These assessments require the use of estimates and assumptions such as commodity prices, discount rates, future capital
requirements, exploration potential and operating performance. Fair value is determined as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value
for mineral assets is generally determined as the present value of estimated future cash flows arising from the continued use of
the asset, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an
independent market participant may take into account. Cash flows are discounted at an appropriate discount rate to determine the
net present value. For the purpose of calculating the impairment of any asset, management regards an individual mine or works
site as a CGU.
Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that
could adversely affect management’s estimate of the net cash flow to be generated from its projects.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 139
(e) Provisions for decommissioning and site restoration costs
Accounting for restoration provisions requires management to make estimates of the future costs the Group will incur to complete
the restoration and remediation work required to comply with existing laws, regulations and agreements in place at each mining
operation and any environmental and social principles the Group is in compliance with. The calculation of the present value of these
costs also includes assumptions regarding the timing of restoration and remediation work, applicable risk-free interest rate for
discounting those future cash outflows, inflation and foreign exchange rates and assumptions relating to probabilities of alternative
estimates of future cash outflows.
Management uses its judgement and experience to provide for and (in the case of capitalised decommissioning costs) amortise
these estimated costs over the life of the mine. The ultimate cost of decommissioning and timing is uncertain and cost estimates
can vary in response to many factors including changes to relevant environmental laws and regulations requirements, the
emergence of new restoration techniques or experience at other mine sites. As a result, there could be significant adjustments to
the provisions established which would affect future financial results. Refer to Note 26 for further details.
(f) Income tax
Significant judgment is required in determining the provision for income taxes. There are transactions and calculations for which
the ultimate tax determination is uncertain during the ordinary course of business. The Group and Company recognise liabilities
for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
Judgement is also required to determine whether deferred tax assets are recognised in the consolidated statements of financial
position. Deferred tax assets, including those arising from unutilised tax losses, require the Group to assess the probability that the
Group will generate sufficient taxable earnings in future periods, in order to utilise recognised deferred tax assets.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These
estimates of future taxable income are based on forecast cash flows from operations (which are impacted by production and sales
volumes, commodity prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure, dividends and other
capital management transactions). To the extent that future cash flows and taxable income differ significantly from estimates, the
ability of the Group to realise the net deferred tax assets could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of the Group to obtain
tax deductions in future periods.
(g) Inventory
Net realisable value tests are performed at each reporting date and represent the estimated future sales price of the product
the entity expects to realise when the product is processed and sold, less estimated costs to complete production and bring the
product to sale. Where the time value of money is material, these future prices and costs to complete are discounted.
(h) Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates
are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the
terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates
the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific
estimates (such as the subsidiary’s stand-alone credit rating).
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 140
(i) Contingent liabilities
A contingent liability arises where a past event has taken place for which the outcome will be confirmed only by the occurrence
or non-occurrence of one or more uncertain events outside of the control of the Group, or a present obligation exists but is not
recognised because it is not probable that an outflow of resources will be required to settle the obligation.
A provision is made when a loss to the Group is likely to crystallise. The assessment of the existence of a contingency and its likely
outcome, particularly if it is considered that a provision might be necessary, involves significant judgment taking all relevant factors
into account.
(j) Share-based compensation benefits
Share based compensation benefits are accounted for in accordance with the fair value recognition provisions of IFRS 2 “Share-
based Payment”. As such, share-based compensation expense for equity-settled share-based payments is measured at the grant
date based on the fair value of the award and is recognised as an expense over the vesting period. The fair value of such share-
based awards at the grant date is measured using the Black Scholes pricing model. The inputs used in the model are based on
management’s best estimates for the effects of non-transferability, exercise restrictions, behavioural considerations and expected
volatility. Please refer to Note 23.
(k) Consolidation of Cobre San Rafael
Cobre San Rafael, S.L. is the entity which holds the mining rights of Proyecto Touro. The Group controls Cobre San Rafael, S.L. as it
is exposed to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power
over the subsidiary. The control is proven as: one of the two Directors belongs to the Group and management of the financial books
and the capacity to appoint the key personnel is controlled by Atalaya.
(l) Consolidation of Rio Narcea Nickel
Rio Narcea Nickel S.L. is the entity which holds 17 investigation permits. This group of 17 permits will be known collectively as
Proyecto Ossa Morena (“POM”) and are strategically distributed along prospective zones of the Ossa Morena Metallogenic Belt,
and in particular, along the southern flank of the major Olivenza-Monesterio Antiform (“OMA”).
(m) Classification of financial assets
Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through OCI, or fair
value through profit or loss.
The Group and Company exercises judgement upon determining the classification of its financial assets upon considering whether
contractual features including interest rate could significantly affect future cash flows. Furthermore, judgment is required when
assessing whether compensation paid or received on early termination of lending arrangements results in cash flows that are not
‘solely payments of principal and interest (SPPI).
4. Business and geographical segments
Business segments
The Group has only one distinct business segment, that being mining operations, which include mineral exploration and
development.
Copper concentrates produced by the Group are sold to three offtakers as per the relevant offtake agreement (Note 31.3)
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 141
Geographical segments
The Group’s mining activities are located in Spain. The commercialisation of the copper concentrates produced in Spain is carried
out through Cyprus. Sales transactions to related parties are on arm’s length basis in a similar manner to transaction with third
parties. Accounting policies used by the Group in different locations are the same as those contained in Note 2.
2021
(Euro 000’s)
Revenue
Cyprus
Spain
Other
Total
40,827
364,890
-
405,717
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation
30,284
168,880
(50)
199,114
Depreciation/amortisation charge
Net foreign exchange gain/(loss)
Finance income
Finance cost
Profit/(loss) before tax
Tax
Profit for the year
Total assets
Total liabilities
Depreciation of property, plant and equipment
Amortisation of intangible assets
Total additions of non-current assets
2020
(Euro 000’s)
Revenue
-
(32,276)
2,301
4,285
-
-
57
(13,657)
-
3
-
-
(32,276)
6,589
57
(13,657)
32,585
127,289
(47)
159,827
(3,776)
(23,825)
-
(27,601)
132,226
77,750
506,523
1,134
585,407
(1,934)
(147,567)
(8)
(149,509)
-
-
-
27,680
4,596
41,040
-
-
-
27,680
4,596
41,040
Cyprus
Spain
Other
Total
30,848
221,936
-
252,784
Earnings/(loss)before Interest, Tax, Depreciation and Amortisation
22,324
45,277
(157)
67,444
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
(2)
(31,681)
(960)
(2,870)
(49)
-
(1)
-
197
(340)
-
4
-
-
-
21,312
10,583
(153)
(2,036)
684
-
(31,683)
(3,826)
(49)
197
(341)
31,742
(1,352)
30,390
37,284
466,605
1,157
505,046
(12,271)
(142,545)
(31)
(154,847)
2
-
2
25,741
4,941
58,650
-
-
-
25,743
4,941
58,652
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 142
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
5. Revenue
THE GROUP
(Euro 000’s)
Revenue from contracts with customers (1)
Fair value gain relating to provisional pricing within sales (2)
Total revenue
2021
2020
Segment
€’000
Segment
€’000
Copper
130,642
Copper
50,611
Copper
91,651
Copper
67,012
Copper
173,904
Copper
119, 491
2021
2020
399,966
249,438
5,751
3,346
405,717
252,784
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 2021 revenue there is a transaction price of €2.8 million (€3.0 million in 2020) related to the freight services
provided by the Group to the customers arising from the sales of copper concentrate under CIF incoterm.
(2) Provisional pricing impact represented the change in fair value of the embedded derivative arising on sales of concentrate.
THE COMPANY
(Euro 000’s)
Sales of services to related companies (Note 31.3)
Dividends
2021
1,849
64,000
65,849
2020
1,442
-
1,442
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 6. Expenses by nature
THE GROUP
(Euro 000’s)
Operating costs
Rents (Note 27)
Care and maintenance expenditure
Exploration expenses
Employee benefit expense (Note 7)
Compensation of key management personnel
Auditors’ remuneration – audit
Other auditors´ services
Other accountants’ remuneration
Consultants’ remuneration
Depreciation of property, plant and equipment (Note 13)
Amortisation of intangible assets (Note 14)
Travel costs
Share option-based employee benefits
Shareholders’ communication expense
On-going listing costs
Legal costs
Public relations and communication development
Insurances
Impairment of intangible assets
(Note 14)
Impairment loss on other receivables
Other expenses and provisions
Total cost of operation, corporate, share based benefits, care and maintenance,
and exploration expenses
143
2021
2020
150,954
150,253
5,752
13,720
1,800
23,793
2,335
283
-
86
921
27,680
4,596
105
899
251
352
1,086
650
90
-
-
4,509
369
1,661
21,194
2,100
229
19
111
1,174
25,744
4,941
140
816
178
235
689
492
112
985
49
3,526
1,069
238,879
217,069
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021
144
THE COMPANY
(Euro 000’s)
Key management remuneration
Auditors’ remuneration – audit
Other auditors´ services
Other accountants’ remuneration
Consultants’ remuneration
Management fees (Note 31.3)
Travel costs
Shareholders’ communication expense
On-going listing costs
Legal costs
Insurances
Impairment loss on other receivables
Other expenses and provisions
Total cost of corporate, share based benefits and impairment
7. Employee benefit expense
THE GROUP
(Euro 000’s)
Wages and salaries
Social security and social contributions
Employees’ other allowances
Bonus to employees
2021
547
146
-
42
222
61
3
251
352
667
91
-
40
2,422
2020
656
118
17
80
60
55
4
178
235
661
113
45
(242)
1,980
2021
17,652
5,583
17
541
2020
15,675
5,054
20
445
23,793
21,194
The average number of employees and the number of employees at year end by office are:
Number of employees
Spain – Full time
Spain – Part time
Cyprus – Full time
Cyprus – Part time
Total
Average
At year end
2021
406
91
1
2
500
2020
482
6
1
1
490
2021
422
81
1
2
506
2020
482
6
1
1
490
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements THE COMPANY
(Euro 000’s)
Wages and salaries
Social security and social contributions
The average number of employees and the number of employees at year end by office are:
145
2021
2020
-
-
-
-
-
-
2021
-
-
Average
2020
-
-
At year end
2021
2020
-
-
-
-
Number of employees
Cyprus – Full time
Total
8. Finance income
THE GROUP
(Euro 000’s)
Interest income
THE COMPANY
(Euro 000’s)
Interest income from interest-bearing intercompany loans at fair value through profit and
loss
(Note 31.3)
Interest income from interest-bearing intercompany loans at amortised cost (Note 31.3)
Interest income
Interest income relates to interest received on bank balances.
2021
57
57
2020
197
197
2021
2020
12,854
3,607
2,398
-
17,271
2,516
16
16,139
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 146
9. Finance costs
THE GROUP
(Euro 000’s)
Interest expense:
Other interest
Interest expense on lease liabilities
Other finance expenses (Note 29)
Unwinding of discount on mine rehabilitation provision (Note 26)
Other finance expense is related to the interest calculation proposed by Astor (Note 29).
10. Tax
THE GROUP
(Euro 000’s)
Current income tax charge
Deferred tax related to utilization of losses for the year (Note 17)
Deferred tax income relating to the origination of temporary differences (Note 17)
Deferred tax expense relating to reversal of temporary differences (Note 17)
2021
2020
846
11
11,737
1,063
13,657
2021
24,359
3,856
(2,986)
2,372
27,601
180
17
-
144
341
2020
3,582
777
(3,320)
313
1,352
The tax on the Group’s results before tax differs from the theoretical amount that would arise using the applicable tax rates as
follows:
(Euro 000’s)
Accounting profit before tax
Tax calculated at the applicable tax rates of the Company – 12.5%
Tax effect of expenses not deductible for tax purposes
Tax effect of tax loss for the year
Tax effect of allowances and income not subject to tax
Effect of higher tax rates in other jurisdictions of the group
Tax effect of tax losses brought forward
Deferred tax (Note 17)
Tax charge
2021
159,827
19,978
2,743
359
(2,629)
7,764
(3,856)
3,242
27,601
2020
31,742
3,968
2,334
662
(3,502)
897
(777)
(2,230)
1,352
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements THE COMPANY
(Euro 000’s)
Current income tax charge
Tax losses carried forward
147
2020
928
928
2021
862
862
As at 31 December 2021, the Group had tax losses carried forward amounting to €0.3 million from the Spanish subsidiary for the
period 2008 to 2015.
Cyprus
The corporation tax rate is 12.5%. Under certain conditions interest income may be subject to defence contribution at the rate of
30%. In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be
subject to defence contribution at the rate of 17% for 2014 and thereafter. Under current 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 2021 and 2020 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
Profit attributable to equity holders of the parent
2021
(1,773)
135,417
133,644
2020
(2,842)
34,321
31,479
Weighted number of ordinary shares for the purposes of basic earnings per share (‘000)
138,196
137,359
Basic profit per share (EUR cents/share)
96.7
22.9
Weighted number of ordinary shares for the purposes of diluted earnings per share (‘000)
141,526
140,511
Diluted profit per share (EUR cents/share)
94.4
22.4
At 31 December 2021, there are 3,841,750 options (Note 23) and nil warrants (Note 22) (At 31 December 2020: 2,787,000 options
and nil warrants) which have been included when calculating the weighted average number of shares for FY2021.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 148
12. Dividends paid
Cash dividends declared and paid during the year:
(Euro 000’s)
Interim dividend for 2021:
Total cash dividends paid in the year to ordinary shareholders
31 Dec 2021
31 Dec 2020
47,290
47,290
-
-
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Dividend Policy
Following the expansion of Proyecto Riotinto’s processing capacity to 15 Mtpa, Atalaya has been generating robust cash flow as a
result of the plant consistently operating above nameplate capacity, coupled with the strong copper price environment.
Accordingly, on 27 October 2021, Atalaya initiated a sustainable dividend policy that will allow for continued investments in its
portfolio of low capital intensity growth projects, such as the San Dionisio deposit, Proyecto Masa Valverde and Proyecto Touro.
Consistent with its strategy to create and deliver shareholder value, the Company approved a Dividend Policy that will make an
annual pay-out of between 30% and 50% of free cash flow generated during the applicable financial year.
The Dividend Policy will take effect in financial year 2022. The annual Ordinary Dividend will be paid in two half-yearly instalments
and announced in conjunction with future interim and full year results.
The declaration and payment of all future dividends under the new policy will remain subject to approval by the Board of Directors.
Inaugural Dividend
Also on 27 October 2021, the Board of Directors elected to declare an Inaugural Dividend of US$0.395 per ordinary share, which
was equivalent to £0.294 per share or €0.345 per share.
The record date for the Inaugural Dividend was 5 November 2021 and the shares became ex-dividend on 4 November 2021.
The Inaugural Dividend was paid on 1 December 2021 in US Dollars, with an option for shareholders to elect to receive the
dividend in Sterling or Euros. Shareholders were required to communicate their currency election to the Company by no later
than 11 November 2021. The exchange rates for payments in Sterling and Euros were fixed by Atalaya on 15 November 2021 and
subsequently announced.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements (Euro 000’s)
Interim dividend for 2021:
Total cash dividends paid in the year to ordinary shareholders
31 Dec 2021
31 Dec 2020
47,290
47,290
-
-
(Euro 000’s)
2021
Cost
Land and
buildings
Right of use
assets (5)
Plant and
equipment
Assets under
construction(3)
Deferred
mining
costs (2)
Other
assets (1)
Total
13. Property, plant and equipment
149
-
-
At 1 January 2021
64,034
6,569
268,051
Additions
Increase in rehab.
provision
Reclassifications
Advances
270
655
-
44
15,828
20,386
-
507
1,941
-
-
-
13,354(4)
(13,354)
-
-
41,868
9,799
-
-
-
801
397,151
-
-
-
-
32,903
655
-
44
At 31 December 2021
65,003
7,076
283,346
22,860
51,667
801
430,753
Depreciation
At 1 January 2021
Charge for the year
At 31 December 2021
Net book value at
31 December 2021
2020
Cost
11,671
4,355
16,026
48,977
956
590
1,546
48,134
19,857
67,991
-
-
-
8,528
2,852
11,380
688
26
714
69,977
27,680
97,657
5,530
215,355
22,860
40,287
87
333,096
At 1 January 2020
46,063
6,421
248,221
-
148
2,278
17,954
-
17
-
-
-
17,552
(17,552)
-
-
16,517
16,863
-
34,013
7,855
781
20
352,016
27,164
-
-
-
-
-
-
17,954
-
17
Additions
Increase in rehab.
provision
Reclassifications
Advances
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
At 31 December 2020
Net book value at
31 December 2020
8,257
3,414
-
11,671
402
554(6)
-
956
28,876
19,257
5
48,134
-
-
-
-
6,061
2,467
-
8,528
627
63
5
44,201
25,744
10
688
69,977
52,363
5,613
219,917
15,828
33,340
113
327,174
(1) Includes motor vehicles, furniture, fixtures and office equipment which are depreciated over 5-10 years.
(2) Stripping costs
(3) Assets under construction at 31 December 2021 amounted to €22.9 million (2020: €15.8 million). It includes the
capitalisation of costs related sustaining capital expenses (€5.9 million) and tailing dams (€14.1 million).
(4) Transfers related to sustaining Capex (€4.0 million) and the Tailing Dam Project (€9.4 million).
(5) See leases in Note 27.
(6) Depreciation includes an adjustment of previous year amounted to €11k.
The Group
The above fixed assets are mainly located in Spain.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 150
THE COMPANY
(Euro 000’s)
2021
Cost
At 1 January 2021
At 31 December 2021
Depreciation
At 1 January 2021
Charge for the year
At 31 December 2021
Net book value at 31 December 2021
2020
Cost
At 1 January 2020
At 31 December 2020
Depreciation
At 1 January 2020
Charge for the year
At 31 December 2020
Net book value at 31 December 2020
(1) Includes furniture, fixtures and office equipment which were depreciated over 5-10 years.
Other assets (1)
Total
15
15
15
-
15
-
15
15
15
-
15
-
15
15
15
-
15
-
15
15
15
-
15
-
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 14. Intangible assets
THE GROUP
(Euro 000’s)
2021
Cost
On 1 January 2021
Additions
At 31 December 2021
Amortisation
On 1 January 2021
Charge for the year
At 31 December 2021
Net book value at 31 December 2021
2020
Cost
On 1 January 2020
Additions
Disposals
At 31 December 2020
Amortisation
On 1 January 2020
Charge for the year
Impairment charge (Note 7)
At 31 December 2020
Net book value at 31 December 2020
151
Permits (1)
Licences, R&D
and Software
Total
78,210
2,148(3)
80,358
18,683
4,531
23,214
57,144
76,538
1,672(2)
-
78,210
13,808
4,875
-
18,683
59,527
8,595
86,805
-
2,148
8,595
88,953
8,306
26,989
65
8,371
224
4,596
31,585
57,368
7,610
1,312
(327)
8,595
84,148
2,984
(327)
86,805
7,255
21,063
66
985
8,306
289
4,941
985
26,989
59,816
(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.
(3) Addition resulting from the acquisition of 51% of Rio Narcea Nickel SL
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 any other as of 31
December 2021.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 152
15. Investment in subsidiaries
(Euro 000’s)
Opening amount at cost minus provision for impairment
Increase of investment (2)
Closing amount at cost less provision for impairment
2021
2020
5,448
4,630
58,723
818
64,171
5,448
The directly owned subsidiaries of the Group, the percentage of equity owned and the main country of operation are set out below.
These interests are consolidated within these financial statements.
Subsidiary companies
Date of
incorporation/
acquisition
Principal
activity
Country of
incorporation
Atalaya Touro (UK) Ltd(1)
10 March 2017
Holding
Atalaya Minasderiotinto Project (UK)
Ltd(2)
10 Sep 2008
Holding
United
Kingdom
United
Kingdom
EMED Marketing Ltd
08 Sep 2008
Trading
Cyprus
EMED Mining Spain SLU(3)
12 April 2007
Exploration
Spain
Atalaya Financing Ltd(4)
16 Sep 2020
Financing
Cyprus
Effective
proportion
of shares
held in
2021(5)
Effective
proportion of
shares held in
2020(5)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
As security for the obligation on ARM to pay consideration to Astor under the Master Agreement and the Loan Assignment
Agreement, Atalaya Minasderiotinto Project (UK) Ltd. has granted pledges to Astor Resources AG over the issued capital of ARM
and granted a pledge to Astor over the issued share capital of Eastern Mediterranean Exploration and Development S.L.U. and the
Company has provided a parent company guarantee (Note 28).
(1) On 10 March 2017, Atalaya Touro (UK) Limited was incorporated. Atalaya Mining Plc is its sole shareholder.
(2) The increase of €58.7 million related to a share capital increase of Atalaya Minasderiotinto Project (UK) Ltd. amounting to
€57.8 million and share-based payment expense of €0.9 million (2020: €0.8 million).
(3) In December 2017, EMED Mining Spain S.L.U. increased its capital by €300k from its sole shareholder. This investment
increase was fully impaired in the year.
(4) 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 audited consolidated financial statements include the results of the entity since
its establishment date.
(5) The effective proportion of shares held as at 31 December 2021 and 2020 remained unchanged.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 153
16. Investment in joint venture
Company name
Principal activities
Country of
incorporation
Effective proportion of shares
held at 31 December 2015
Recursos Cuenca Minera S.L.
Exploitation of tailing dams
and waste areas resources
Spain
50%
In 2012 ARM entered into a 50/50 joint venture with Rumbo to evaluate and exploit the potential of the class B resources in the
tailings dam and waste areas at The Proyecto Riotinto. Under the joint venture agreement, ARM will be the operator of the joint
venture and will reimburse Rumbo for the costs associated with the application for classification 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
Trade and other payables
Net assets
Revenue
Expenses
Net profit/(loss) after tax
17. Deferred tax
THE GROUP
(Euro 000’s)
Deferred tax asset
At 1 January
2021
2020
94
2
21
94
2
21
(115)
(115)
2
-
-
-
2
-
-
-
Consolidated statement of
financial position
Consolidated income
statement
2021
2020
2021
2020
8,805
6,576
-
-
777
Deferred tax related to utilization of losses for the year (Note 10)
(3,856)
(777)
3,856
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/(expense) (Note 10)
2,986
3,320
(2,986)
(3,320)
(2,371)
5,564
(313)
8,805
2,371
313
3,241
(2,230)
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. The Company held tax
losses amounted to €0.3 million in Spain.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 154
18. Inventories
THE GROUP
(Euro 000’s)
Finished products
Materials and supplies
Work in progress
2021
2020
5,185
8,642
18,216
13,764
1,380
1,170
24,781
23,576
As at 31 December 2021, copper concentrate produced and not sold amounted to 5,254 tonnes (FY2020: 12,180 tonnes).
Accordingly, the inventory for copper concentrate was €5.2 million (FY2020: €8.6 million). During the year 2021 the Group recorded
cost of sales amounting to €192.1 million (FY2020: €175.5 million).
Materials and supplies relate mainly to machinery spare parts. Work in progress represents ore stockpiles, which is ore that has
been extracted and is available for further processing.
19. Trade and other receivables
THE GROUP
(Euro 000’s)
Non-current trade and other receivables
Deposits
Loans
Other non-current receivables
Current trade and other receivables
2021
2020
303
2,332
2,695
5,330
48
2,667
-
2,715
Trade receivables at fair value – subject to provisional pricing
8,865
20,304
Trade receivables from shareholders at fair value – subject to provisional pricing (Note 31.5)
20,283
3,946
Other receivables from related parties at amortised cost (Note 31.3)
Deposits
VAT receivable
Tax advances
Prepayments
Other current assets
Allowance for expected credit losses
Total trade and other receivables
56
21
56
21
17,300
15,826
-
3,303
300
9
2,507
522
50,128
43,191
-
-
55,458
45,906
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements THE COMPANY
(Euro 000’s)
Non-current trade and other receivables
155
2021
2020
Receivables from own subsidiaries at amortised cost (Note 31.4)
69,452
75,300
Receivables from own subsidiaries at fair value through profit and loss (Note 31.4)
176,292
243,557
Current trade and other receivables
Tax advances CIT
Receivables from own subsidiaries at amortised cost (Note 31.4)
Other receivables
Total current trade and other receivables
245,744
318,857
279
2,084
52
-
10,737
-
2,415
10,737
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.
Non-current deposits included €250k (YTD 2020: €250k) as a collateral for bank guarantees, which was recorded as restricted
cash (or deposit). Restricted cash related to the collateral was reclassified to non-current trade and other receivables since the
deposit is considered to be long term.
Loans are 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 drawn down bear interest at 2%.
20. Other Financial assets
THE GROUP
(Euro 000’s)
Financial asset at fair value through OCI (see (a)) below)
Total current
Total non-current
THE COMPANY
(Euro 000’s)
Financial asset at fair value through OCI (see (a)) below)
Total current
2021
1,140
39
2020
1,187
86
1,101
1,101
2021
2020
39
39
86
86
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 156
a) Financial assets at fair value through OCI
THE GROUP
(Euro 000’s)
At 1 January (1)
Fair value change recorded in equity (Note 23)
At 31 December
THE COMPANY
(Euro 000’s)
At 1 January (1)
Fair value change recorded in equity (Note 23)
At 31 December
2021
1,187
(47)
2020
1,143
44
1,140
1,187
2021
2020
86
(47)
39
42
44
86
Company name
Principal activities
Country of
incorporation
Effective proportion of
shares held at 31 December
2021
Explotaciones Gallegas del Cobre
SL
Exploration company
Spain
12.5%
KEFI Minerals Plc
Exploration and
development mining
company listed on AIM
UK
Prospech Limited
Exploration company
Australia
0.19%
0.53%
(1) The Group decided to recognise changes in the fair value of available-for-sale investments in Other Comprehensive Income
(“OCI”), as explained in Note 2.12.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 21. Cash and cash equivalents
THE GROUP
(Euro 000’s)
Unrestricted cash and cash equivalents at Group level
Unrestricted cash and cash equivalents at Operation level
Restricted cash and cash equivalents at Operation level
Consolidated cash and cash equivalents
157
31 December 2021
31 December 2020
48,375
43,722
15,420
107,517
24,519
13,248
-
37,767
As at 31 December 2021, the Group’s operating subsidiary held restricted cash of €15.4 million related to the amount that the
Company transferred to a trust account representing the full amount of interest claimed by Astor to 30 June 2022, as detailed in
the note on Deferred Consideration.
Cash and cash equivalents denominated in the following currencies:
(Euro 000’s)
Euro – functional and presentation currency
Great Britain Pound
United States Dollar
THE COMPANY
(Euro 000’s)
Cash at bank and on hand
Cash and cash equivalents denominated in the following currencies:
Euro – functional and presentation currency
Great Britain Pound
United States Dollar
2021
30,145
36
77,336
107,517
2021
37,270
22
36
37,212
37,270
2020
2,431
2,019
33,317
37,767
2020
2,049
62
1,985
2
2,049
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 158
22. 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 2020
Issue Date
22 Dec 2020
22 Dec 2020
22 Dec 2020
Price (£)
Details
2.015
Exercised share options (e)
1.475
Exercised share options (e)
1.440
Exercised share options (e)
22 Dec 2020
2.302
Bonus share to former
Key management
000’s
Euro 000’s
Euro 000’s
Euro 000’s
137,340
13,372
314,319
327,691
228
41
499
33
19
3
42
3
491
65
758
81
510
68
800
84
31 December 2020/1 January 2021
138,141
13,439
315,714
329,153
12 Feb 2021
18 May 2021
18 May 2021
15 Dec 2021
15 Dec 2021
2.015
Exercised share options (a)
2.015
Exercised share options (b)
1.475
Exercised share options (b)
1.475
Exercised share options (c)
2.015
Exercised share options (c)
41
20
10
9
15
4
1
1
2
-
91
45
15
43
8
95
46
16
45
8
31 December 2021
138,236
13,447
315,916
329,363
Authorised capital
The Company’s authorised share capital is 200,000,000 ordinary shares of £0.075 each.
Issued capital
FY2021
(a) On 12 February 2021, the Company was notified that certain employees exercised options over 40,750 ordinary shares of
£0.075 at a price of £2.015, thus creating a share premium of €91k.
(b) On 18 May 2021, the Company was notified that certain employees exercised options over 30,000 ordinary shares of £0.075
at a price between £1.475 and £2.015, thus creating a share premium of €61k.
(c) On 15 December 2021, the Company was notified that certain employees exercised options over 24,500 ordinary shares of
£0.075 at a price between £1.475 and £2.015, thus creating a share premium of €50k.
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.
(b) On 22 December 2020, the Company granted a bonus share to a former Key management of 33,333 ordinary shares of £0.075
at a price £2.302.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements
159
23. Other reserves
THE GROUP
(Euro 000’s)
Share
option
Bonus
share
Depletion
factor (1)
Fair value
reserve of
financial
assets at
FVOCI (2)
Non-
distributable
reserve (3)
Distributable
reserve (4)
Total
At 1 January 2020
7,371
208
10,878
(1,144)
3,430
2,093
22,836
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 20)
Other changes in reserves
-
-
-
816
-
-
-
-
-
-
-
-
14,155
-
-
-
-
-
-
-
-
-
44
-
-
2,198
-
-
-
-
-
-
-
-
-
-
14,155
2,198
-
816
44
-
At 31 December 2020
8,187
208
25,033
(1,100)
5,628
2,093 40,049
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 20)
Other changes in reserves
-
-
-
899
-
-
-
-
-
-
-
-
(55)
-
-
-
-
-
-
-
-
-
(47)
-
-
6,155
6,100
2,372
-
2,372
-
-
-
-
3,317
3,317
-
-
-
899
(47)
-
At 31 December 2021
9,086
208
24,978
(1,147)
8,000
11,565 52,690
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 160
THE COMPANY
(Euro 000’s)
At 1 January 2020
Adjustment for initial application of IFRS 9
Recognition of share based payments
Change in fair value of financial assets at fair value
through OCI (Note 20)
At 31 December 2020
Recognition of share based payments
Change in fair value of financial assets at fair value
through OCI (Note 20)
Share option
Bonus share
Fair value reserve
of financial assets
at FVOCI (2)
Total
7,371
208
(1,144)
6,435
-
816
-
8,187
899
-
-
-
-
208
-
-
-
-
44
-
816
44
(1,100)
7,295
-
(47)
899
(47)
At 31 December 2021
9,086
208
(1,147)
8,147
(1) Depletion factor reserve
During the twelve month period ended 31 December 2021, the Group has disposed €6.1 million (FY2020: €14.2 million) as a
depletion factor reserve as per the Spanish Corporate Tax Act.
(2) Fair value reserve of financial assets at FVOCI
The Group decided to recognise changes in the fair value of certain investments in equity securities in OCI. These changes are
accumulated within the FVOCI reserve under equity. The Group transfers amounts from this reserve to retained earnings when
the relevant equity securities are derecognised.
(3) Non-distributable reserve
As required by the Spanish Corporate Tax Act, the Group classified a non-distributable reserve of 10% of the profits generated
by the Spanish subsidiaries until the reserve is 20% of share capital of the subsidiary.
(4) Distributable reserve
As result of the 2018 profit generated in ARM, the Group decided to record a distributable reserve in order to comply with the
Spanish Corporate Tax Act.
Details of share options outstanding as at 31 December 2021:
Grant date
23 Feb 2017
22 Feb 2022
Expiry date
Exercise price £
Share options
29 May 2019
28-May-2024
8 July 2019
30 June 2020
24 June 2021
Total
7 July 2024
29 June 2030
23 June 2031
At 1 January 2021
Granted options during the year
Options executed during the year
31 December 2021
1.440
2.015
2.045
1.475
3.090
Weighted average
exercise price £
1.759
3.090
1.907
2.154
314,000
988,250
400,000
989,500
1,150,000
3,841,750
Share options
2,787,000
1,150,000
(95,250)
3,841,750
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 161
On 12 February 2021, the Company was notified that certain employees exercised options over 40,750 ordinary shares of £0.075
at a price of £2.015, thus creating a share premium of €91k.
On 18 May 2021, the Company was notified that certain employees exercised options over 30,000 ordinary shares of £0.075 at a
price between £1.475 and £2.015, thus creating a share premium of €61k.
On 25 June 2021, the Company announced a grant of 1,150,000 share options (the “Options”) to Person Discharging Managerial
Responsibilities (“PDMRs”) and key management in accordance to the Company’s approved Share Option Plan 2020 (the “Option
Plan”). The Options expire ten years from the date of grant (23 June 2031), have an exercise price of 309.0 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 15 December 2021, the Company was notified that certain employees exercised options over 24,500 ordinary shares of £0.075
at a price between £1.475 and £2.015, thus creating a share premium of €50k.
On 30 June 2020, the Company announced a grant of 1,050,000 share options (the “Options”) to Person Discharging Managerial
Responsibilities (“PDMRs”) and key management in accordance to the Company’s approved Share Option Plan 2020 (the “Option
Plan”). The Options expire ten years from the date of grant (30 June 2031), 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 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 (Note 21 (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:
Grant
Date
23 Feb
2017
29 May
2019
8 July
2019
30 June
2020
23 June
2021
Weighted
average share
price £
Weighted
average
exercise price £
Expected
volatility
Expected life
(years)
Risk Free
rate
Expected
dividend yield
Estimated Fair
Value £
1.440
1.440
51.8%
2.015
2.015
46.9%
2.045
2.045
46.9%
1.475
1.475
50.32%
3.090
3.090
50.91%
5
5
5
10
10
0.6%
0.8%
0.8%
0.3%
0.7%
Nil
Nil
Nil
Nil
Nil
0.666
0.66
0.66
0.60
0.81
The volatility has been estimated based on the underlying volatility of the price of the Company’s shares in the preceding twelve
months.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 162
24. Non-controlling interest
(Euro 000’s)
Opening balance
Share of total comprehensive income for the year
Closing balance
2021
2020
(3,491)
(2,402)
(1,418)
(1,089)
(4,909)
(3,491)
The Group has a 10% interest in Cobre San Rafael, S.L. acquired in July 2017 while the remaining 90% is held by a non-controlling
interest (Note 2.3 (b) (1)). The significant financial information with respect to the subsidiary before intercompany eliminations as
at and for the twelve month period ended 31 December 2021 is as follows:
(Euro 000’s)
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity
Revenue
Loss for the year and total comprehensive income
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.
2021
2020
5,155
315
-
5,111
706
-
9,481
9,697
(5,299)
(3,879)
-
-
(1,420)
(1,210)
The Group has a 51% interest in Río Narcea Nickel, S.L. acquired in December 2021 while the remaining 49% is held by a non-
controlling interest (Note 2.3 (b) (1)). The significant financial information with respect to the subsidiary before intercompany
eliminations as at and for the twelve month period ended 31 December 2021 is as follows:
(Euro 000’s)
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity
Revenue
Loss for the year and total comprehensive income
2021
2020
1
78
-
16
64
-
(287)
-
-
-
-
-
-
-
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 25. Trade and other payables
THE GROUP
(Euro 000’s)
Non-current trade and other payables
Other non-current payables
Government grant
Current trade and other payables
Trade payables
Accruals
VAT payable
Other
THE COMPANY
(Euro 000’s)
Current trade and other payables
Suppliers
Accruals
Payable to own subsidiaries (Note 31.4)
VAT payable
163
2021
2020
3,435
1,435
15
13
3,450
1,448
49,712
63,946
16,267
4,355
74
138
60
76
66,191
68,437
2021
2020
47
1,257
753
809
634
11,380
74
60
2,012
13,002
Other non-current payables are related with the acquisition of Atalaya Masa Valverde formerly Cambridge Minería España, SL and
Rio Narcea Nickel, SL (see Note 31).
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.
Accruals included an interest payable amounted to €11.7 million for the Group representing the interest calculation proposed by
Astor (Note 29).
The Group’s exposure to currency and liquidity risk related to liabilities is disclosed in Note 3.
Trade payables are non-interest-bearing and are normally settled on 60-day terms.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 164
26. Provisions
THE GROUP
(Euro 000’s)
1 January 2020
Additions
(Reduction) / addition of provision
Finance cost (Note 9)
31 December 2020/1 January 2021
Additions
Used of provision
Reversal of provision
Finance cost (Note 9)
31 December 2021
(Euro 000’s)
Non-Current
Current
Total
Rehabilitation provision
Legal Rehabilitation
388
311
(73)
-
626
26
(286)
(87)
-
279
Total
6,941
311
6,553
-
17,941
17,868
144
144
24,638
25,264
655
(57)
-
1,063
741
(403)
(87)
1,063
26,299
26,578
2021
2020
26,578
25,264
-
-
26,578
25,264
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 discount rate used in the calculation of the net present value of the liability as at 31 December 2021 was 1.12% (2020: 1.36%),
which is the average of the 15-year Spain Government Bond rate from 2017 to 2021. An inflation rate of 1%-1.96% is applied on
annual basis.
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 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
5,128
3,637
17,534
Legal provision
The Group has been named as defendant in several legal actions in Spain, the outcome of which is not determinable as at 31
December 2021. Management has reviewed individually each case and made a provision of €279k (€626k in 2020) for these claims,
which has been reflected in these consolidated financial statements. (Note 31)
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 27. Leases
(Euro 000’s)
Non-current
Leases
Current
Leases
165
31 Dec 2021
31 Dec 2020
4,913
4,913
597
597
4,796
4,796
592
592
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 (Note 2.2). The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets.
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:
Right-of-use assets
Lands and
buildings
Vehicles
Laboratory
equipment
Total
Lease liabilities
(Euro 000’s)
As at 1 January 2021
Additions
Depreciation expense
Interest expense
Payments
5,416
507
(506)
-
-
As at 31 December 2021
5,417
The amounts recognised in profit or loss, are set out below:
(Euro 000’s)
As at 31 December
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Total amounts recognised in profit or loss
29
-
(15)
-
-
14
168
-
(69)
-
-
99
5,613
507
(590)
-
-
5,530
5,388
729
-
11
(618)
5,510
Twelve month ended
31 Dec 2021
Twelve month ended
31 Dec 2020
(590)
(11)
(601)
(553)
(17)
(570)
The Group recognised rent expense from short-term leases (Note 6).
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 166
Depreciation expense regarding leases amounts to €0.6 million (2020: €0.5) for the twelve month period ended 31 December 2021.
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 2021, the remaining term of this lease is twelve years. (Note 2).
The duration of the motor vehicle and laboratory equipment 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 2021, 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
(Euro 000’s)
Balance 1 January 2021
Additions
Interest expense
Lease payments
Balance at 31 Dec 2021
Balance at 31 Dec 2021
Non-current liabilities
Current liabilities
31 Dec 2021
31 Dec 2020
597
2,014
2,899
-
5,510
597
2,014
2,899
5,510
592
2,068
2,728
-
5,388
592
2,068
2,728
5,388
Lease liability
5,388
729
11
(618)
5,510
4,913
597
5,510
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 28. Borrowings
(Euro 000’s)
Non-current borrowings
Credit facilities
Current borrowings
Credit facilities
167
31 Dec 2021
31 Dec 2020
34,050
34,050
13,394
13,394
-
-
-
The Group had uncommitted credit facilities totalling €111.0 million. During Q1 2021, Atalaya drew down some of its existing credit
facilities to pay the Deferred Consideration (Note 29). Interest rates of existing credit facilities, including facilities used to pay the
Deferred Consideration, range from 1.60% to 2.45% and the average interest rate on all facilities used and unused is 1.75%. The
maximum term of the facilities is three years. As of 31 December 2021, the Company had used €47.4m in existing credit facilities.
At as 31 December 2021 the Group had undrawn credit facilities of €63.6m.
29. 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 acquisition among other items. The Company also
entered into a credit assignment agreement at the same time with a related company of Astor, Shorthorn AG, pursuant to which
the benefit of outstanding loans was assigned to the Company in consideration for the payment of €9.1 million to Shorthorn (the
“Loan Assignment”).
The Master Agreement has been the subject of litigation in the High Court and the Court of Appeal that concluded in November
2018. As a consequence, ARM was obliged to apply any excess cash (after payment of operating expenses, sustaining capital
expenditure, any senior debt service requirements and up to US$10 million per annum (for non-Proyecto Riotinto related expenses))
to pay the consideration due to Astor (including the Deferred Consideration and the amount of €9.1 million payable under the Loan
Assignment). “Excess cash” is not defined in the Master Agreement leaving ambiguity as to how it was 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 exchanged statements of case to set out their formal position. The trial was 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 was heard on 14-15 June 2021. The Court dismissed Astor’s application meaning the proceedings would continue to
Trial.
As previously announced, 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.
In March 2021, the Company fulfilled all conditions required by the Board and made the early payment of €53 million to Astor. The
payment was fully funded by unsecured credit facilities.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 168
The payment of the Deferred Consideration did not end the ongoing litigation as the issue as to whether any residual interest
may or may not be payable remained unresolved. On 15 July 2021, the Company transferred €15.4 million to the Company’s
solicitors representing the full amount of interest claimed by Astor (as at that date) covering the period up to 30 June 2022. The
Company’s solicitors provided an undertaking to Astor’s solicitors to hold the full amount until settlement of the claim to interest or
judgment following the Trial. The Company understands the monies held on client account by the Company’s solicitors safeguard
the maximum outstanding liability to Astor in relation to the Master Agreement. On that basis, and because the Consideration has
been paid in full in accordance with the Master Agreement, the Company treats itself as free of the obligations set out at clauses
6(g)(iv)(A) and 6(g)(iv)(B) in the Master Agreement.
On 21 March 2022, further to the Trial which took place between 21 February and 1 March 2022, Judgment was handed down. The
Judgment deals with matters of principle. The points that the Judge has decided will dictate the amount of interest that is payable.
On the basis of the principles set out in the Judgment, the parties are in the process of determining the correct interest calculation.
It is clear that an amount will be payable in respect of interest. A consequential hearing is due to be listed on the earliest convenient
date after 28 March 2022. The Company has agreed to pay Astor’s costs of the proceedings.
As at 31 December 2021, the Group had accrued interest amounting to €11.7 million, representing the interest calculation proposed
by Astor (Note 25). Atalaya is currently working to calculate the correct interest figure with a view to agreeing the amount with
Astor in accordance with the Judgment. Atalaya expects the interest due to Astor following the Judgment to be in the range of
approximately €10 million to €11.7 million.
Both parties have a right to appeal the Judgment if granted leave to do so.
30. Acquisition, incorporation and disposals of subsidiaries
2021
Acquisition and incorporation of subsidiaries
On 21 December 2021 Atalaya announced the acquisition of a 51% interest in Río Narcea Nickel, S.L., which owns 17 investigation
permits.
Disposals of subsidiaries
There were no disposals of subsidiaries during the year.
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.
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.
Wind-up of subsidiaries
There were no operations wound-up during FY2021 and FY2020.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 169
31. Group information and related party disclosures
31.1 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
Trading
Cyprus
EMED Mining Spain S.L.U.
Atalaya Mining Plc
Exploration
Spain
100%
100%
Atalaya Riotinto Minera S.L.U.
Atalaya MinasdeRiotinto Project
(UK) Limited
Production
Spain
100%
Eastern Mediterranean Exploration
and Development S.L.U.
Atalaya MinasdeRiotinto Project
(UK) Limited
Exploration
Spain
100%
Cobre San Rafael, S.L.(1)
Atalaya Touro (UK) Limited
Exploration
Spain
Recursos Cuenca Minera S.L.U.
Atalaya Riotinto Minera SLU
Exploration
Spain
10%
J-V
Fundacion Atalaya Riotinto
Atalaya Riotinto Minera SLU
Trust
Spain
100%
Atalaya Servicios Mineros, S.L.U.
Atalaya MinasdeRiotinto Project
(UK) Limited
Dormant
Spain
100%
Atalaya Masa Valverde S.L.U.(2)
Rio Narcea Nickel, S.L.
Atalaya Servicios Mineros,
S.L.U.
Atalaya Servicios Mineros,
S.L.U.
Exploration
Spain
100%
Exploration
Spain
51%
(1) Cobre San Rafael, S.L. is the entity which holds the mining rights of 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 (Note 2.3 (b) (1)).
(2) Cambridge Mineria Espana, S.L.U. changed its name to Atalaya Masa Valverde, S.L.U on 28 November 2020.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 170
The following transactions were carried out with related parties:
31.2 Compensation of key management personnel
The total remuneration and fees of Directors (including executive Directors) and other key management personnel was as follows:
(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)
The Group
The Company
2021
1,019
438
321
522
265
-
327
2020
1,044
305
291
522
182
84
374
2021
547
2020
572
-
-
-
-
-
-
-
-
-
-
-
-
2,892
2,802
547
572
(1) These amounts related to the approved performance bonus for 2020 by the Board of Directors following the proposal of the
CGNC Committee. The 2021 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 2021 performance.
(2) Includes wages and salaries of key management personnel of €505k (2020: €506k) and other benefits of €17k (2020: €16k).
(3) In December 2020, a former key management employee was granted with 33,333 shares.
(4) In 2020 includes share option of a former key management employee.
At 31 December 2021 amounts due to Directors, as from the Group, are €nil (€nil at 31 December 2020) and €nil (€nil at 31
December 2020) to key management.
At 31 December 2021 amounts due to Directors, as from the Company, are €nil (€nil at 31 December 2020) and €nil (€nil at 31
December 2020) to key management.
Share-based benefits
In 2021, 1,150,000 options were granted at a price of 309.0 pence, of which 800,000 were granted to Directors and key management
personnel (2020: 1,050,000 options) (see note 23).
During 2021 the Directors and key management personnel have not been granted any bonus shares (2020: nil).
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 31.3 Transactions with shareholders and related parties
THE GROUP
(Euro 000’s)
Trafigura – Revenue from contracts
Freight services
Gains relating provisional pricing within sales
Trafigura – Total revenue from contracts
THE COMPANY
(Euro 000’s)
Sales of services (Note 5):
EMED Marketing Limited
Atalaya MinasdeRiotinto Project (UK) Limited
Purchase of services (Note 6):
Atalaya Riotinto Minera SLU
Other services (Note 6)
Atalaya Riotinto Minera SLU
EMED Marketing Limited
Finance income (Note 8):
Atalaya Minasderiotinto Project (UK) Limited – Finance income from interest-bearing loan:
Credit agreement – at amortised cost
Participative loan – at fair value through profit and loss
Credit facility – at amortised cost
THE GROUP
(Euro 000’s)
Current assets - Receivable from related parties (Note 19):
Recursos Cuenca Minera S.L.
The above balances bear no interest and are repayable on demand.
(1) This balance representing the interest calculation for the Company proposed by Astor (Note 29).
171
2021
2020
125,912
49,775
-
-
125,912
49,775
4,730
837
130,642
50,612
130,642
50,612
2021
2020
978
871
749
693
1,849
1,442
(61)
(55)
208
208
-
-
941
970
12,854
13,607
1,457
1,546
15,252
16,123
2021
2020
56
56
56
56
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 172
31.4 Year-end balances with related parties
THE COMPANY
(Euro 000’s)
2021
2020
Non-current assets – Loan from related parties at FV through profit and loss (Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited – Participative Loan (1)
173,930
243,545
Atalaya MinasdeRiotinto Project (UK) Limited – Eastern Loan (5)
Atalaya Masa Valverde SL – Participative Loan (6)
Río Narcea Nickel SL – Participative Loan (6)
Non-current assets – Loans and receivables from related parties at amortised cost (Note 19):
Atalaya MinasdeRiotinto Project (UK) Limited – Credit Expansion Loan (2)
Atalaya MinasdeRiotinto Project (UK) Limited – Credit Agreement (3)
EMED Marketing Limited (4)
Atalaya MinasdeRiotinto Project (UK) Limited (4)
Total
Current assets – Loans and receivables from related parties at amortised cost (Note 19):
Atalaya Riotinto Minera SLU (4)
EMED Marketing Limited (4)
Atalaya Touro (UK) Limited (4)
Atalaya Financing Ltd
Total
12
1,850
500
12
-
-
176,292
243,557
41,535
45,138
26,354
27,412
1,164
892
399
1,858
69,452
75,300
208
208
9,117
-
1,634
1,618
34
2
2,084
10,737
(1) This balance bears interest of 6.75% (2020: 6.75%).
(2) This balance bears interest of EURIBOR 6month plus 4% (2020: LIBOR 6month + 4.00%).
(3) This balance bears interest of EURIBOR 12month plus 4% (2020: 12month plus 4%). The Note Facility Agreement expired on
29 September 2019. The Group signed on 30 September 2019 a new Credit Agreement for the amount due of the Note Facility
Agreement bearing a EURIBOR 12month plus 4% interest and maturing on 30 September 2024
(4) These receivables bear no interest. These balances are repayable on demand. However, management will not claim any
repayment in the following twelve months period after the release of the current consolidated financial statements.
(5) This balance bears interest of 3.00% (2020: 3.00%).
(6) This balance bears no interest.
THE COMPANY
(Euro 000’s)
Payable to related party (Note 25):
EMED Marketing Limited
EMED Mining Spain S.L.
Atalaya Riotinto Minera S.L.U.
The above balances bear no interest and are repayable on demand.
2021
2020
-
10,808
262
372
634
262
310
11,380
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 31.5 Year-end balances with shareholders
(Euro 000’s)
Receivable from shareholders (Note 19):
Trafigura – Debtor balance –subject to provisional pricing
173
2021
2020
20,283
20,283
3,946
3,946
The above debtor balance arising from the pre-commissioning sales of goods bear no interest and is repayable on demand.
32. Contingent liabilities
Judicial and administrative cases
In the normal course of business, the Group may be involved in legal proceedings, claims and assessments. Such matters are
subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as
incurred and the Group accrues for adverse outcomes as they become probable and estimable.
33. 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 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.
34. Significant events
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 communication from Xunta de Galicia of the negative Environmental Impact
Declaration on Proyecto Touro.
On 15 March 2021, Atalaya announced that it has made the payment of the €53 million (the “Deferred Consideration”) to Astor
Management following the approval of its Board of Directors. This amount arises from arrangements entered with Astor in 2008 in
relation to Proyecto Riotinto. The payment was financed with unsecured credit lines by four major Spanish banks having a three-
year tenure and an average annual interest rate of approximately two per cent.
On 25 March 2021, the Company announced that Dr. José Nicolas Sierra retired as Independent Non-Executive Director and as
Chair of the Physical Risk Committee of Atalaya, with an effective date of 31 March 2021. From this date Mr. Neil Gregson is the
Chair of the Physical Risk Committee of Atalaya.
On 12 April 2021, the Company announced that Mr. Damon Barber stepped down as a Non-Executive Director of the Company with
immediate effect.
On 17 May 2021, the Company was notified that Harry Liu, Director of the Company, sold 5,000 ordinary shares in Atalaya at an
average price of 356.0 pence per share.
On 18 May 2021, the Company was notified that Harry Liu, Director of the Company, sold 3,698 ordinary shares in Atalaya at an
average price of 358.0 pence per share.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 174
On 26 May 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the Company, reduced its share of voting rights from 14.17%
to 12.97%.
On 25 June 2021, the Company announced that in accordance with the Company’s Long Term Inventive Plan 2020, which was
approved by shareholders at the Annual General Meeting on 25 June 2020, it had granted 1,150,000 share options to Persons
Discharging Managerial Responsibilities and other management.
The Options expire ten years from the deemed date of grant (24 June 2021), have an exercise price of 309.0 pence per ordinary
share, based on the average of the mid-market closing prices for the five dealing days immediately preceding the grant date, and
vest in two equal tranches, half on grant and half on the first anniversary of the granting date.
On 29 June 2021, the Company was notified that Harry Liu, Director of the Company, sold 5,000 ordinary shares in Atalaya at an
average price of 310.0 pence per share. On 1 July 2021 the Company announced that it was notified that Harry Liu, Director of the
Company, sold 192 ordinary shares in Atalaya at an average price of 308.0 pence per share.
On 5 July 2021, the Company announced that it was notified, that Alberto Lavandeira, Chief Executive Officer and Managing Director
of the Company, purchased 40,000 ordinary shares at an average price of 310.0 pence per share. The Company was also notified
on 3 July 2021, that Harry Liu, Director of the Company, sold, on 1 July 2021, 170 ordinary shares in Atalaya at an average price of
309.0 pence per share.
Following the above transactions Mr. Lavandeira and Mr. Liu are interested in an aggregate of 280,000 and 386,019 ordinary shares
of the Company representing 0.20% and 0.28% of the current issued share capital, respectively.
On 13 August 2021, the Company was notified that Harry Liu, Director of the Company, sold 11,000 ordinary shares in Atalaya at an
average price of 324.0 pence per share.
On 4 August 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the Company, reduced its share of voting rights from
11.79% to 10.94%. On 18 August 2021, Liberty Metals & Mining Holdings, LLC, shareholder of the Company, reduced its share of
voting rights to nil.
On 20 August 2021, Polar Capital LLP notified the Company that it held 5.08% of voting rights.
On 6 October 2021, the Company announced that the recent drilling campaign has intersected broad intervals of massive and
stockwork type polymetallic sulphide mineralization including significant high-grade intercepts at both Masa Valverde and
Majadales.
Dividends
The Board of Directors declared an Inaugural Dividend of US$0.395 per ordinary share, which was equivalent to approximately 29
pence per share, and amounted to €47.3 million.
The interim dividend was paid on 1 December 2021
Further details are given in Note 12.
35. Events after the reporting period
Depending on the duration of the COVID-19 pandemic and any related negative impact on economic activity, the Group may
experience negative results, liquidity restraints or incur impairments on its assets in 2022. The exact impact on the Group’s
activities in 2022 thereafter cannot be predicted. In the period since 31 December 2021 the Group has not incurred losses due to
impairments. Refer to note 19.
Τhe recent events in Ukraine from 24 February 2022 may have consequences for the Global Economy, which cannot yet be
predicted, but the main concern at the moment is the rising prices for energy, fuel and other raw materials and rising inflation, which
may affect household incomes and business operating costs. The financial effect of the current crisis on the Global Economy and
overall business activities cannot be estimated with reasonable certainty at this stage. The event is considered as a non-adjusting
event and is therefore not reflected in the recognition and measurement of the assets and liabilities in the financial statements as
at 31 December 2021.
On 4 January 2022, the subsidiary EMED Mining Spain, S.L. was disposed.
Atalaya Mining | Annual Report 2021Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial Statements 175
On 6 January 2022, the Company announced the approval of the construction of the first phase of an industrial-scale plant
(“Phase I”) that utilises the E-LIX System (“E-LIX”), which will produce high value copper and zinc metals from the complex sulphide
concentrates sourced from Proyecto Riotinto.
On 26 January 2022, the Company announced that it was notified that PDMRs executed options as follow:
•
•
•
Alberto Lavandeira, Chief Executive Officer and Managing Director of the Company executed 150,000 options. Following the
above transactions Mr. Lavandeira is interested in an aggregate of 430,000 ordinary shares of the Company representing
0.30% of the current issued share capital.
Enrique Delgado, General Manager of Proyecto Riotinto, executed 550,000 options. Following the above transactions Mr.
Delgado is interested in an aggregate of 550,000 ordinary shares of the Company representing 0.39% of the current issued
share capital.
César Sánchez, Chief Financial Officer, executed 650,000 options. Following the above transactions Mr. Sánchez is interested
in an aggregate of 650,000 ordinary shares of the Company representing 0.46% of the current issued share capital.
On 22 February, the Company was notified that César Sánchez and Enrique Delgado, both persons discharging managerial
responsibilities (“PDMR”), had sold 300,000 and 250,000 ordinary shares in Atalaya, respectively, at a price of 440.0 pence per
share. Following the sale of these shares Mr. Sanchez is interested in an aggregate of 350,000 ordinary shares of the Company
representing 0.250% of the current issued share capital. Mr. Delgado is interested in an aggregate of 300,000 ordinary shares of
Atalaya representing 0.215% of the current issued share capital.
On 27 January 2022, the Company announced that in accordance with the Company’s Long Term Inventive Plan 2020, which was
approved by shareholders at the Annual General Meeting on 25 June 2020, it had granted 120,000 share options to an employee.
On 3 February 2022, Atalaya announced the results of five additional drill holes from its ongoing resource definition drilling
programme at Proyecto Masa Valverde (“PMV”).
On 21 March 2022, further to the Trial which took place between 21 February and 1 March 2022, the Judgment was handed down.
The Judgment deals with matters of principle. The points that the Judge has decided will dictate the amount of interest that is
payable.
On the basis of the principles set out in the Judgment, the parties are in the process of determining the correct interest calculation.
It is clear that an amount will be payable in respect of interest. A consequential hearing is due to be listed on the earliest convenient
date after 28 March 2022. The Company has agreed to pay Astor’s costs of the proceedings.
As at 31 December 2021, the Group had accrued interest amounting to €11.7 million, representing the interest calculation proposed
by Astor. Atalaya is currently working to calculate the correct interest figure with a view to agreeing the amount with Astor in
accordance with the Judgment. Atalaya expects the interest due to Astor following the Judgment to be in the range of approximately
€10 million to €11.7 million.
Both parties have a right to appeal the Judgment if granted leave to do so.
Consolidated and Company Financial Statements | Notes to the Consolidated and Company Financial StatementsAtalaya Mining | Annual Report 2021 Atalaya Mining | Annual Report 2021 Shareholder
Information
178 Glossary of Terms
184 Shareholder Enquiries
Atalaya Mining | Annual Report 2021 178
Glossary of
Terms
Currency abbreviations
US$ / USD or $
$000
$m
£
£000
£m
€ / EUR
€000 / €k
€m
€nil
FY2021
FY2020
Definitions and conversion table
lb
Oz
‘000 m³
t
DMT
‘000 tonnes
1 Kilogramme/ (kg)
1000 Kilogrammes/ (´000 kg)
1 Kilometre (km)
1 troy ounce
Ha
ft
The following definitions and terms are used
throughout this Annual Report.
US Dollars
Thousand US dollars
Million US Dollars
Sterling Pound
Thousand Sterling Pounds
Million Sterling Pounds
Euro
Thousand Euros
Million Euros
Zero Euros
Twelve month period ended 31 December 2021
Twelve month period ended 31 December 2020
Pound
Troy ounce
Thousand cubic metres
Tonne
Dry Metric Tonne
Thousand metric tonnes
2.2046 pounds
2,204.6 pounds
0.6214 miles
31.1 grams
Hectare
Foot
Shareholder Information | Glossary of termsAtalaya Mining | Annual Report 2021 Chemical Symbols
Cu
Ag
Au
Fe
Business, Finance and Accounting
AAU
Atalaya or the Company
179
Copper
Silver
Gold
Iron
Autorización Ambiental Unificada (Unified Environmental
Declaration)
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
AGM
AIM
AISC
AMV
AR
ARM
Audit and Financial Risk Committee
Annual General Meeting
Alternative Investment Market of the London Stock
Exchange
All In Sustaining Cost
Atalaya Masa Valverde, S.L.
Annual Report
Atalaya Riotinto Minera, S.L.U.
Articles
Average head grade
The articles of association of Atalaya Mining Plc.
Average ore grade fed into the mill, expressed in % of weight
BoD or Board of Directors
The Board of Directors of the Company
CAPEX
Cash Cost
CEO
C. Eng
CFO
COO
COF
CIF
CIT
CIP
CGU
CGNCC
Capital Expenditure
The cost to produce one pound of copper
Chief Executive Officer
Chartered Engineer
Chief Financial Officer
Chief Operational Officer
Cost of Freight
Cost Insurance and Freight
Corporate Income Tax
Carriage and Insurance paid to
Cash Generating Unit
Corporate Governance, Numeration and Compensation
Committee
Shareholder Information | Glossary of termsAtalaya Mining | Annual Report 2021 180
Business, Finance and Accounting
Code of Conduct
Atalaya’s Code of Business Conduct and Ethics
Cont.
CSR
Directors
EBITDA
ECL
EeA
EIR
E-LIX
Continued
Cobre San Rafael S.L.
The Directors of Atalaya for the reporting period
Earnings Before Interest Tax Depreciation and Amortisation
Expected Credit Loss
Ecologistas en Accion
Effective Interest Rate Method
E-LIX System
EMED TARTESSUS
Eastern Mediterranean Exploration & Development
TARTESSUS S.L.
Etc.
EU
FIFO
Et cetera
European Union
First In First Out
Financial statements
Consolidated and company financial statements of Atalaya
Mining Plc.
FOB
FV
FVOCI
FVPL
GAAP
Group
H1, H2
IAS
ie.
IFRS
IPO
JdA
KPI´s
LDC
LIBOR
Free on Board
Fair Value
Fair Value Through Other Comprehensive Income
Fair Value Through Profit or Loss
Generally Accepted Accounting Policies
Atalaya Mining plc and its subsidiaries
Six month periods ending 30th June and 31st December
International Accounting Standards
Id est (explanatory information)
International Financial Reporting Standards
Initial Public Offering
Junta de Andalucía
Key Performance Indicators
Louis Dreyfus Company
The British Bankers’ Association Interest Settlement Rate
for the relevant currency
Shareholder Information | Glossary of termsAtalaya Mining | Annual Report 2021 181
Business, Finance and Accounting
LITFR
Ltd.
LLC
LP
Lost Injury Time Frequency Rate
Limited
Limited Liability Company
Limited partnership
London Stock Exchange / LSE
London Stock Exchange plc
MBA
NED´s
NPV
Nr
OCI
Ordinary Shares
Phase I
Ph.D.
PRC
PFS
Plc.
PP&E
P&L
P&P reserves
Q1, Q2, Q3, Q4
QCA
QP
RNN
SIC
Master’s in Business Administration
Non-Executive Directors
Net Present Value
Number
Other Comprehensive Income
Ordinary Shares of 10 pence each in the capital of the
Company
The first phase of an industrial-scale plant that utilises the
E-LIX System
Doctor of Philosophy
Physical Risk Committee
Pre-Feasibility Study
Public limited company
Plant, property and equipment
Profit and Loss
Proven and Probable reserves
Three month periods ending 31st March, 30th June, 30th
September and 31st December
Quoted Companies Alliance
Quotation Period
Rio Narcea Nickel, S.L.
Standard Interpretations Committee which was endorsed
by the IAS
Shareholders
Holders of Ordinary Shares
SL
SLU
TSX
United Kingdom or UK
United States or US
Sociedad Limitada (private limited company)
Sociedad Limitada Unipersonal (limited partnership)
Toronto Stock Exchange
the United Kingdom of Great Britain and Northern Ireland
the United States of America, its territories and
possessions, any state of the United States of America and
the District of Columbia
Shareholder Information | Glossary of termsAtalaya Mining | Annual Report 2021 182
Business, Finance and Accounting
UOP
VAT
WC
XGC
Mining terms
Average head grade
Concentrate
Contained copper
Grade
Mtpa
NI 43-101
Open pit
Ore body
Unit of Production
Value Added Tax
Working Capital
Yanggu Xiangguang Copper Co. Ltd
Average ore grade fed into the mill, expressed in % of weight
A fine powdery product of the milling process containing a
high percentage of valuable metal
Represents total copper in a mineral reserve before
reduction to account for tonnes not able to be recovered by
the applicable metallurgical process
The amount of metal in each tonne of ore, expressed as a
percentage of valuable metal
Million tonnes per annum
National Instrument 43-101, standard of disclosure for
mineral projects according to Canadian guidelines
A mine where the minerals are mined entirely from the
surface. Also referred to as open-cut or open-cast mine
A sufficiently large amount of ore that can be mined
economically
P&P Reserves
Proven and Probable reserves
Stripping
Tailings
TC/RC
VTEM
3D
Removal of overburden or waste rock overlying an ore body
in preparation for mining by open pit methods
Materials left over after the process of separating the
valuable fraction from the uneconomic fraction of an ore
Treatment Charge and Refinement Charge
Versatile Time Electomagnetic Mapping
Three Dimensional
Shareholder Information | Glossary of termsAtalaya Mining | Annual Report 2021 183
Atalaya Mining | Annual Report 2021 184
Shareholder Information | Shareholder Enquiries
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. José Sierra López
Independent Non-executive director (resigned March 2021)
Jesús Fernández
Non-executive director
Damon Barber
Non-executive director (resigned April 2021)
Dr. Hussein Barma
Independent Non-executive director
Neil Gregson
Stephen Scott
Independent Non-executive director
Independent Non-executive director
Atalaya Mining | Annual Report 2021 Shareholder Information | Shareholder Enquiries
185
Corporate brokers
Depositary / transfer agent
United Kingdom
Computershare Investor Services Plc.
The Pavilions
Bridgwater
Bristol BS13 8AE
Canada
Computershare Investor Services Inc.
100 University Avenue
8th Floor, North Tower
Toronto, Ontario M5J 2Y1
Company secretary
Inter Jura CY (Services) Limited
1 Lampousa Street,
1095 Nicosia, Cyprus
Group Auditor
Ernst & Young Cyprus Ltd
Jean Nouvel Tower,
6 Stasinos Avenue,
P.O.Box 21656,
1511, Nicosia,
Cyprus
Registered office
1 Lampousa Street,
1095 Nicosia, Cyprus
Canaccord Genuity Limited
88 Wood Street
London EC2V 7QR
BMO Capital Markets
95 Queen Victoria Street
London, EC4V 4HG
Peel Hunt LLP
100 Liverpool Street
London, EC2M 2AT
NOMAD
Canaccord Genuity Limited
88 Wood Street London EC2V 7QR
Investor Relations
Carina Corbett
4C Communications Ltd.
Hudson House
8 Tavistock Street
London WC2E 7PP
+44 (0) 203 170 7973
Public Relations
Elisabeth Cowell
Newgate Communications
Sky Light City Tower
50 Basinghall Street
London EC2V 5DE
+44 (0) 207 680 6550
Registrars
Cymain registrars Ltd.
26 Vyronos Avenue
1096 Nicosia, Cyprus
Atalaya Mining | Annual Report 2021 Atalaya Mining
SPAIN OFFICE
REGISTERED OFFICE
CYPRUS OFFICE
La Dehesa s/n
Minas de Riotinto,
21660 - Huelva
Spain
1, Lambousa Street
Nicosia 1095,
Cyprus
3, Ayiou Demetriou Street
Acropolis 2012
Nicosia, Cyprus