Annual Report 2024 For the year ended 31 December 2024 01. Strategic Report . ........................................................ 4 Performance Highlights........................................................... 5 Company Overview. .................................................................7 Our Purpose............................................................................. 9 Atalaya at a Glance...................................................................11 Letter from the Chair............................................................... 13 Letter from the Chief Executive Officer.................................. 15 Copper Market Overview........................................................ 17 Strategic Framework. ............................................................ 20 Key Performance Indicators. ................................................. 23 Risk Management and principal risk factors. ......................... 24 Viability Statement.................................................................. 31 Operating Review. ................................................................. 33 Financial Review..................................................................... 39 Sustainability Approach......................................................... 48 Task Force on Climate-related Financial Disclosures (TCFD) Reporting ................................................................... 52 Non-Financial Information Statement. .................................. 53 02. Governance................................................................. 54 Board of Directors. ................................................................ 55 Senior Management............................................................... 59 Governance Introduction. ..................................................... 60 UK Corporate Governance Code 2018 – Compliance Statement. ........................................................ 62 Board Leadership and Company Purpose. ........................... 63 Division of Responsibilities. ................................................... 66 Composition, Succession and Evaluation. ............................. 71 Audit, Risk and Internal Control...............................................75 Remuneration......................................................................... 86 Directors’ Report. ................................................................ 104 Directors’ Responsibility Statement.....................................107 03. Financial Statements............................................108 Independent Auditor’s Report..............................................109 Consolidated Financial Statements.......................................115 Notes to the consolidated financial statements....................119 04. Additional information ........................................ 170 Glossary of Terms...................................................................171 Shareholder Enquiries........................................................... 174 Table of Contents Atalaya Mining Copper, S.A. 2024 Annual Report 2024 Annual Report For the year ended 31 December 2024 Atalaya Mining Copper, S.A. 01. Strategic Report Annual Report 2024 01 Strategic Report 01. Strategic Report Annual Report 2024 Performance Highlights............................................................... 5 Company Overview......................................................................7 Our Purpose..................................................................................9 Atalaya at a Glance. .....................................................................11 Letter from the Chair. ................................................................. 13 Letter from the Chief Executive Officer.................................... 15 Copper Market Overview........................................................... 17 Strategic Framework................................................................. 20 Key Performance Indicators...................................................... 23 Risk Management and Principal Risk Factors........................... 24 Viability Statement. .................................................................... 31 Operating Review...................................................................... 33 Financial Review......................................................................... 39 Sustainability Approach. ........................................................... 48 Task Force on Climate-related Financial Disclosures (TCFD) Reporting. ...................................................................... 52 Non-Financial Information Statement...................................... 53 5 01. Strategic Report Annual Report 2024 Atalaya Mining Copper, S.A. Performance Highlights Unit 2025 2024 2023 Guidance Actual Actual Ore mined mt 15 – 16 15.2 14.9 Ore processed mt 15.5 – 15.8 15.9 15.8 Copper concentrate produced t n/a 252,165 249,321 Copper production t 48,000 – 52,000 46,227 51,667 Payable copper production t n/a 43,706 49,174 Proyecto Riotinto produced 46 kt of copper in 2024 and we expect production to grow to approximately 50 kt in 2025. We processed 15.9 Mt of ore in 2024, a new annual record, highlighting our operational efficiency and the reliability of our processing facilities. We continue to make progress on our growth strategy, having advanced permitting and pre-development works at San Dionisio and Proyecto Masa Valverde, which have the potential to deliver higher grade material to the plant at Riotinto. Proyecto Touro was awarded Strategic Industrial Project status by the Xunta de Galicia in June 2024, which represents an important permitting milestone. Operational Highlights Key messages In 2024, we demonstrated resilience despite experiencing certain challenges: Operational: We achieved a new annual record for ore processed, which helped to offset lower copper grade and copper recovery. Financial: We exhibited good control of absolute costs, strong operational efficiency and maintained a solid balance sheet. 01. Strategic Report Annual Report 2024 6 01. Strategic Report Annual Report 2024 Atalaya Mining Copper, S.A. Unit 2024 2023 Revenues €k 326,797 340,346 EBITDA €k 66,356 73,1 Dividend per share (1) $/share 0.07 0.09 Realised copper price (excluding QPs) $/lb 4.19 3.80 Cash Cost $/lb payable 2.92 2.79 All-in Sustaining Cost (AISC) $/lb payable 3.26 3.09 Net cash position €k 35,091 54,32 Cash at bank €k 52,878 121,007 Financial Highlights (1) Represents the total dividend for each fiscal year, consisting of an Interim Dividend (paid) and a proposed Final Dividend (subject to shareholder approval at the 2025 AGM) Delivered EBITDA of €66.4 million, which benefitted from good control of absolute costs. Continued to return capital to shareholders via our dividend policy. Cash Cost of US$2.92/lb and AISC of US$3.26/ lb, which are competitive with Atalaya’s copper producer peers. Healthy liquidity position with €52.9 million cash at bank at 31 December 2024. Key messages 7 01. Strategic Report Annual Report 2024 Atalaya Mining Copper, S.A. Recent Company Events At Atalaya, we are a leading European copper producer listed on the London Stock Exchange’s Main Market. We focus on sustainable growth and operational efficiency, striving to deliver long-term value to our shareholders through a high-quality portfolio of assets. Our flagship operation, Proyecto Riotinto, is located in the Iberian Pyrite Belt in southern Spain, one of the world’s most historically significant mining regions. With annual production of around 50,000 tonnes of copper, the Riotinto mine is the foundation of our success. We are committed to responsible resource management and mini mising our environmental impact. We operate our mining assets through innovation, efficiency, and a firm commitment to sustainability. By continuously optimising our production processes, controlling costs, and exploring new oppor tunities for expansion, we ensure that Atalaya remains competitive in the global marketplace. With a solid financial foundation, we are well-positioned to pursue strategic growth initiatives, including expansion projects and developing new resource opportunities both in Europe and beyond. At the core of our strategy is our commitment to creating value for all our stakeholders, including our shareholders, employees, contrac tors and the communities in which we operate. Through responsible mining practices, a focus on reducing environmental impact, and active local engagement, we are working to shape a sustainable future in copper production. Company Overview April 2024 Admission of Atalaya’s ordinary shares to the Main Market of the London Stock Exchange. May 2024 Announced appointment of Neil Gregson as Non-Executive Chair, Kate Harcourt as Senior Independent Director and Carole Whittall as Independent Non-Executive Director. June 2024 Cobre San Rafael, which owns Proyecto Touro, was awarded Stra tegic Industrial Project status by the Xunta de Galicia. November 2024 Atalaya entered into two new agree ments pursuant to which Atalaya can earn an initial 75% interest in two separate land packages in Sweden. January 2025 Atalaya announces comple tion of re-domiciliation to Spain and appoints María del Coriseo González-Izquierdo Revilla as an Independent Non-Executive Director. 01. Strategic Report Annual Report 2024 8 Atalaya Mining Copper, S.A. 8 01. Strategic Report Annual Report 2024 Proyecto Riotinto Proyecto Riotinto is a mining and processing complex that produces copper concentrates. It is located between the municipalities of Minas de Riotinto, Nerva and El Campillo in the province of Huelva (Andalucía, Spain), approximately 65 km northwest of Seville and 70 km northeast of the port of Huelva. Atalaya owns and operates Proyecto Riotinto through its wholly owned subsidiary, Atalaya Riotinto Minera, S.L.U. Proyecto Riotinto consists of an operating open pit mine (Cerro Colorado), the 15 Mtpa Riotinto Processing Plant and supporting infrastructure. In addition, the development stage San Dionisio and San Antonio deposits are located adjacent to the Cerro Colorado pit. E-LIX Phase I Plant The E-LIX Phase I Plant is an industrial-scale processing plant that utilises the E-LIX System and is located at Proyecto Riotinto. The plant is currently undergoing commissioning and ramp-up. The E-LIX System is a newly developed and innova tive electrochemical extraction process that utilises singular catalysts and physicochemical conditions to dissolve the valuable metals contained within sulphide concentrates in order to produce high-value copper and zinc metals from complex sulphide concentrates. The E-LIX System was developed by Lain Technologies Ltd (“Lain Tech”) with the financial support of Atalaya. Proyecto Touro Proyecto Touro is a brownfield copper project located in the Galicia region of northwest Spain that is currently in the permitting process. Proyecto Touro is located in the “San Rafael” concession, which is an exploitation permit held by Cobre San Rafael. Atalaya exercised an option to acquire a 10% interest in Cobre San Rafael in February 2017 as part of an earn-in agreement that enables Atalaya to acquire up to an 80% ownership interest as certain development milestones are met. In June 2024, Cobre San Rafael was awarded Strategic Industrial Project status by the Xunta de Galicia, which acts to simplify administrative procedures and intends to reduce permitting timelines. Proyecto Ossa Morena Proyecto Ossa Morena consists of a package of inves tigation permits that are strategically distributed along prospective zones of the Ossa Morena Metallogenic Belt in southwest Spain. In December 2021, Atalaya announced the acquisition of a 51% interest in Atalaya Ossa Morena, S.L. (formerly, Rio Narcea Nickel, S.L.) and in 2022, increased its ownership interest to 99.9%. Exploration activities at various projects and targets are ongoing. Riotinto District: Proyecto Masa Valverde (“PMV”) Proyecto Masa Valverde is a development stage volcanogenic massive sulphide (“VMS”) type project located in the province of Huelva (Andalucía, Spain), approximately 80 km west-northwest of Sevilla and 32 km north northeast of the port of Huelva. Atalaya has owned PMV since October 2020 through its wholly owned subsidiary Atalaya Masa Valverde, S.L.U. Development of PMV contemplates underground mining of the Masa Valverde and Majadales deposits, which would be accessed by constructing a ramp. Mined material would then be transported by public road to Riotinto for processing. This development scenario is consistent with Atalaya’s strategy of developing the Riotinto 15 Mtpa Processing Plant into a central processing hub for Atalaya’s assets in the Riotinto District. Proyecto Riotinto East In December 2020, Atalaya entered into a Memo randum of Understanding with Geotrex, S.L. to acquire a 100% beneficial interest in certain investigation permits, including two located immediately east of Proyecto Riotinto. Atalaya Mining Copper, S.A. Atalaya Mining Copper, S.A. 01. Strategic Report Annual Report 2024 9 Our Purpose At Atalaya, our purpose is to responsibly extract and deliver the essential raw materials that power global economic growth and support the ongoing energy transition. We are dedicated to producing copper, a critical element in the shift toward cleaner energy, while prioritising sustainability, innovation, and long-term value creation for our shareholders, employees, contractors, and the communities in which we operate. Our Strategy Operational Expertise that Delivers Sustainable Growth We continue to build on our success at Proyecto Riotinto, with the goal of becoming a multi-asset producer. Our strategy is centred on the development of sustainable, scalable, and low-risk assets in mining-friendly jurisdictions. This ensures that we maintain our competitive edge, mini mise risk, and unlock new opportunities for growth. 01. Strategic Report Annual Report 2024 Our focus is on expanding our operations using responsible mining practices, always evaluating the potential for growth consistent with environmental and social commitments. We actively explore new opportunities that enhance value for our stakeholders, with a disciplined approach to capital investment and risk management. Diversification and Growth Our long-term strategy involves expanding beyond Proyecto Riotinto, positioning us as a multi-asset company. By identifying and developing new assets, we aim to deliver sustainable production increases while maintaining a focus on reducing operational risk through diversification. Atalaya Mining Copper, S.A. 01. Strategic Report Annual Report 2024 10 Atalaya Mining Copper, S.A. Our Mission Responsibly Increasing Long-Term Value for All Stakeholders At Atalaya Mining, our mission is to create lasting value for all stakeholders, ensuring stable and sustainable growth. We are committed to the responsible development of our assets, working to protect and enhance the interests of our shareholders, employees, communities, and partners. We understand the vital role that copper plays in economic development and the green energy transition. As such, we view our role as more than just a mining company. We are partners in progress, contributing to society by delivering essential raw materials that enable cleaner energy technol ogies and drive industrial growth. To achieve this, we focus on operational excellence, envi ronmental stewardship, and community engagement. We continue to prioritise safety and efficiency in our operations, all while investing in sustainable mining practices that safe guard the environment and provide positive social impact. Our Values A Strong Commitment to a Safe, Ethical, and Transparent Working Environment At Atalaya Mining, our values guide everything we do. We are committed to honesty, accountability, and transparency, ensuring that our operations are always aligned with the highest ethical standards. We believe in fostering a safe and inclusive working environment that promotes diversity and encourages innovation. We work closely with all of our stakeholders, including local communities, to ensure that our activities are in harmony with their needs and expectations. Safety remains a top priority, and we are deeply committed to maintaining a workplace where everyone can thrive. Environmental and Social Responsibility We recognize the importance of environmental sustaina bility and are committed to minimizing our environmental footprint while contributing positively to the ecosystems and communities we engage with. Our proactive approach includes continuous improvement in waste management, water use, and energy efficiency to ensure that our mining activities are as sustainable as possible. In every decision we make, we strive to embody the prin ciples of responsible mining, ensuring that our long-term success is balanced with social responsibility and environ mental protection. At Atalaya, we believe that doing business the right way is the only way, and our core values of integrity, respect, and sustainability are deeply embedded in every aspect of our operations. Annual Report 2024 01. Strategic Report Annual Report 2024 11 Atalaya Mining Copper, S.A. Key Facts: ↘ ↘Primary Asset: Proyecto Riotinto, a wholly owned open-pit copper mine in the Iberian Pyrite Belt, Anda lusia, Spain. ↘ ↘Annual Production: Around 50,000 tonnes of copper produced annually at Riotinto. ↘ ↘Ownership Structure: Publicly listed company with a diverse range of shareholders, including institutional investors from the UK, Spain, Europe and North America. ↘ ↘Future Growth: Potential to grow production at Riotinto by prioritising higher grade ore from deposits in the Riotinto District, and also through developing Proyecto Touro, a brownfield copper project in northwest Spain. Strategic Focus: ↘ ↘Sustainable Growth Pipeline: We are committed to expanding our portfolio with low-risk, high-return assets, while maintaining financial discipline and competitive capital intensity. ↘ ↘Operational Excellence: With a strong management team of experienced miners and operators, Atalaya is focused on maximising efficiency and optimising costs across all operations. ↘ ↘ESG Leadership: Environmental sustainability, social responsibility, and governance (ESG) principles are at the heart of our operations. We strive to minimize our environmental footprint and generate positive impacts for local communities. Financial Health: ↘ ↘Robust Balance Sheet: Our strong financial position allows us to fund future growth initiatives while providing consistent returns to shareholders. ↘ ↘Organic Cash Flow: Consistent cash generation provides the foundation for continued investment in operational improvements and future projects. Atalaya at a Glance Looking Ahead: Annual Report 2024 As we move forward, our strategy is to diversify into multiple assets and further expand our copper production base. We are actively exploring opportunities across Europe and Latin America, leveraging our operational expertise to capitalize on global demand for copper, particularly in the context of the energy transition and technological advancement. For more information, visit www.atalayamining.com. 01. Strategic Report Atalaya is a leading copper producer listed on the London Stock Exchange’s Main Market, with its core operations based in Spain. Our strategic focus is on producing high-quality copper concentrates and advancing a pipeline of sustainable growth projects to solidify our position as a key player in the European mining sector. 01. Strategic Report Annual Report 2024 12 Atalaya Mining Copper, S.A. Proyecto Riotinto is operated through Atalaya Riotinto Min era, S.L.U. a fully owned entity established under the laws of Spain. In 2020, Atalaya entered into a definitive purchase agree ment to acquire the Masa Valverde polymetallic project in Huelva. The mining rights are owned by Atalaya Masa Valverde, S.L.U. a fully owned subsidiary of Atalaya. In 2023, AMV was granted the Unified Environmental Author isation (or in Spanish, Autorización Ambiental Unificada (“AAU”)) by the Junta de Andalucía (“JdA”). 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. In 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owned a package of inves tigation permits in the Ossa Morena Metallogenic Belt, as well as several 100% owned investigation permits. In 2022, Atalaya increased its ownership in Rio Narcea Nickel, S.L. to 99.9% following the completion of a capital increase to fund exploration activities. Cerro Colorado (Proyecto Riotinto) Ownership 100% Mine Activity Open pit mining in operation Commodity Cu, Ag Location Huelva, Spain Ore Reserve* 132.0 Mt at 0.37% Cu (P&P) Resources 156.6 Mt at 0.37% Cu (M&I) 2024 actual Cu production 46,227 tonnes * NI 43-101 compliant Reserves and Resources as at July 2023. Proyecto Touro Ownership 10% with an earn-in agreement up to 80% Mine Activity Potential open pit mine; currently in the permitting stage Commodity Cu, Ag Location A Coruña, Spain Ore Reserve* 90.9 Mt at 0.43% Cu (P&P) Resources* 129.9 Mt at 0.39% Cu (M&I) and 46.5 Mt at 0.37% Cu (Inferred) Growth Option to acquire 100% of the adjacent exploration concessions * NI 43-101 compliant Reserves and Resources as at September 2017 Proyecto Ossa Morena Ownership 99.9% Mine Activity Exploration stage. Commodity Cu, Au and Fe Location Huelva, Spain Resources* Alconchel: έέ 7.8 Mt at 0.66% Cu and 0.17 g/t Au (M&I) and 15.0 Mt at 0.47% Cu and 0.14 g/t Au (Inferred) Growth Strong exploration upside potential throughout the overall land package. Growth Option to acquire 100% of the adjacent exploration concessions * Historical data San Dionisio / San Antonio (Proyecto Riotinto) Ownership 100% Mine Activity Potential for open pit and underground mining Commodity Cu, Zn, Pb, Ag Location Huelva, Spain Ore Reserve n/a Resources* San Dionisio open pit: έέ 57.4 Mt at 0.89% Cu and 1.12% Zn (M&I) San Dionisio underground: έέ 12.4 Mt at 1.01% Cu and 2.54% Zn (Inferred) San Antonio underground: έέ 11.8 Mt at 1.32% Cu and 1.79% Zn (Inferred) Growth Potential to increase production by increasing head grade * NI 43-101 compliant Resources as at July 2023 Proyecto Masa Valverde (Riotinto District) Ownership 100% Mine Activity Potential for underground mining. AAU and exploitation permit have been granted. Commodity Cu, Zn, Pb, Ag and Au Location Huelva, Spain Resources* Masa Valverde: έέ 16.9 Mt at 0.66% Cu, 1.55% Zn and 0.65% Pb (Indicated) έέ 73.4 Mt at 0.61% Cu, 1.24% Zn and 0.61% Pb (Inferred) Majadales: έέ 3.1 Mt at 0.94% Cu, 3.08% Zn and 1.43% Pb (Inferred)" Growth Strong exploration upside potential in the immediate surroundings. Growth Potential to increase production by increasing head grade * NI 43-101 compliant Resource estimate as at March 2022 01. Strategic Report Annual Report 2024 13 Atalaya Mining Copper, S.A. Letter from the Chair 01. Strategic Report Annual Report 2024 Dear Shareholder, I am pleased to introduce the annual report of Atalaya Mining Copper, S.A. for the financial year ended 31 December 2024, my first since becoming Chair of the Board on 1 July 2024. 2024 was a year of change for the Company. Atalaya moved up from AIM to the Main Market of the London Stock Exchange on 29 April 2024 and the re-domiciliation from Cyprus to Spain took effect for Spanish corporate law purposes as from 27 December 2024, both representing major milestones for the Company. We were also very pleased when Proyecto Touro, a key growth project, was declared a strategic industrial project by the Xunta de Galicia, given this status acts to simplify the administrative procedures associated with the devel opment of industrial projects and intends to substantially reduce permitting timelines. Performance With respect to our sustainability performance, we have been making steady progress. In terms of safety, we reported a LTIFR of 3.33 in 2024 for our own employees and contractors, which represents an improvement from 3.94 in 2023 and 8.15 in 2022. We utilised recycled water for 81% of Riotinto’s needs thanks to a variety of initiatives. The start-up of the first phase of our 50 MW solar plant will help to reduce our carbon emissions. Further, we continue to think locally with respect to hiring, procurement and community programmes. From an operations perspective, performance was mixed during 2024. Lower grades resulted in a downward revision to copper production guidance at midyear, but positively, the processing plant ultimately achieved a new annual throughput record of 15.9 million tonnes, resulting in FY2024 copper production of 46,227 tonnes which was within the revised guidance range. In terms of financial performance, we exhibited good cost control which helped to offset lower revenues. Our operations generated EBITDA of €66.4 million in FY2024, supporting our investments in growth, our ongoing dividend policy and our balance sheet. Governance As Chair, I am responsible for the running of the Board and for the Group’s overall corporate governance. The Board and its committees play a key role in our governance frame work by providing external and independent support and challenge. Further information regarding corporate govern ance at Atalaya can be found on pages 60 to 103. Two members of our Board have served over nine years. I, together with my other Board colleagues, have carefully considered whether their independence has been impaired as a consequence of their extended tenure and we have concluded that it has not and that they remain independent and objective. Further details regarding how we have assessed their continued independence and reached our conclusion can be found on page 68. Our first Directors’ Remuneration Policy since moving up to the Main Market received 67% of votes in favour at our Annual General Meeting on 27 June 2024. Hussein Barma, Chair of our Remuneration Committee, and I sought engagement with 30 of our shareholders together holding almost 80% of our issued share capital. We are very grateful for the feedback we have received. The Directors’ Remu neration Report on pages 86 to 103 provides more detail regarding the consultation process and our proposed new policy. Board changes I would like to welcome Carole Whittall, who joined the Board on 3 June 2024, as an independent non-executive director. Carole brings over 25 years of experience in the natural resources sector across a broad range of functions including management, finance and M&A. Neil Gregson Chair of Atalaya Mining Copper, S.A.. 01. Strategic Report Annual Report 2024 14 Atalaya Mining Copper, S.A. I would also like to welcome María del Coriseo González-Izquierdo Revilla, who joined the Board on 14 January 2025. Coriseo is an accomplished executive with broad commercial and economic experience that will complement and enhance the skills of our Board. Coriseo will stand for election at the forthcoming annual general meeting. She replaces Roger Davey who stood down from the Board on 31 December 2024. On behalf of the Board, I would like to extend my thanks to Roger for his leadership of the Board throughout his many years of service. Hussein Barma will not be seeking re-election at the forthcoming Annual General Meeting, having served on the Board since September 2015. Stephen Scott has also served on the Board for over nine years. At the request of the Board, he has agreed to defer his resignation until later in 2025 to preserve continuity. He will resign by no later than 31 December 2025. Culture and values Part of the Board’s role involves assessing and moni toring culture. Atalaya’s culture has developed over the last decade, with our workforce having doubled from around 250 employees in 2014 to nearly 500 today. We are committed to operating in a responsible and sustainable manner. Our core values include honesty, integrity, respon sibility, and accountability. Information on how the Board monitors culture can be found on page 64. Strategy Atalaya remains focused on achieving operational excel lence and on growing and diversifying its portfolio of copper assets located in Spain. Its key projects include the San Dionisio deposit and Proyecto Masa Valverde in the Riotinto District, which have the potential to increase production by delivering higher grade material to Riotinto’s processing plant, as well as Proyecto Touro in Galicia, which could bring transformational growth for the Company. In addition, we believe that the E-LIX Phase I plant could unlock significant value from complex ores found in the Iberian Pyrite Belt and beyond. The Company also actively evaluates opportunities to further grow its portfolio including into new geographies, as shown by the recent earn-in agreement in Sweden. Investors The Directors are pleased to recommend a 2024 Final Dividend of $0.07 per ordinary share subject to shareholder approval at the 2025 Annual General Meeting. This brings the Full Year Dividend for FY2024 to $0.07 per ordinary share. This is consistent with the Company’s dividend policy which seeks to provide returns to shareholders while allowing for continued investments in the Company’s port folio of low capital intensity growth projects. During 2024, the Company’s shares closed at an all-time high of 485.5p on 20 May 2024 following a rally in the copper price and related equities. Thereafter, the copper price softened and for the full calendar year, the share price performance of Atalaya and the Global X Copper Miners ETF (COPX) were effectively flat. Looking ahead Looking to the remainder of 2025, I am confident in the strength of our leadership team and the opportunities that lie before us. We are well-positioned to navigate challenges and deliver sustainable growth and long-term value for our shareholders. On behalf of the Board, I would like to express my thanks to our shareholders for their continued support. In closing, I would like to thank my fellow board members for their engagement and advice to me since I became Chair. I would also like to thank our Chief Executive Officer, Alberto Lavandeira, and all Atalaya’s employees and contractors for their dedication and hard work throughout the year. Yours sincerely, NEIL GREGSON Chair of Atalaya Mining Copper, S.A. 17 March 2025 01. Strategic Report Annual Report 2024 15 Atalaya Mining Copper, S.A. Letter from the Chief Executive Officer 01. Strategic Report Annual Report 2024 Dear Shareholder, Introduction The past year was an active period for Atalaya, including across our asset portfolio and also at the corporate level. We are proud of the progress we made on several important strategic initiatives and are confident that our shareholders will enjoy the resulting benefits in the coming years. Before moving to specifics on 2024, I would like to thank Roger Davey for his many years of service as Chair of Atalaya. Roger played an important role in establishing the company you see today. I would also like to acknowledge the contribution that Neil Gregson, our current Chair, has made since assuming the role. Further, we are pleased to have Carole Whittall and Coriseo González-Izquierdo Revilla as the latest additions to our Board. Corporate activities We completed two important corporate initiatives during 2024, both of which were part of our multi-year strategy. In April 2024, we moved up to the Main Market of the London Stock Exchange, representing an important milestone in Atalaya’s history. Then in December 2024, our re-domicil iation from Cyprus to Spain took effect. Combined, these initiatives are expected to provide access to a broader range of institutional investors and potentially improve our trading liquidity. Safety performance The safety of our employees and contractors is our top priority. In recent years, we have made positive progress, reducing our LTIFR to 3.33 in 2024 from 8.15 in 2022, while also reducing the severity rate to 0.10 in 2024 from 0.22 in 2022. We will continue to focus on making further improve ments in 2025. Further information on our safety performance can be found in our 2024 Sustainability Report. Sustainability performance We are proud of the contribution we make to the local communities surrounding our operations. In 2024, 67% of Riotinto’s workforce came from nearby villages, 93% of procurement came from Spain and the Atalaya Riotinto Foundation invested almost €1 million in local social initia tives. With respect to the environment, we look forward to reducing our carbon footprint thanks to the start-up of our solar plant and are pleased to report that recycled water accounted for 81% of Riotinto’s needs in 2024. In addition to the sustainability information that we provide on pages 48 to 53 of the Annual Report, further details can be found in our 2024 Sustainability Report. Business performance During 2024, our copper production was impacted by lower grades and lower recoveries, which dictated a downward revision to our operating guidance. Positively, strong plant performance helped to partly offset the grade decline and we ended the year having produced 46,227 tonnes. In 2025, we expect to see production increase as grades improve. From a financial perspective, we demonstrated good cost control which provided support to our overall finan cial results. We continue to make meaningful investments across our operations and pay consistent dividends to our shareholders, while maintaining a robust balance sheet. Further information on our business performance can be found in the Operating Review on pages 33 to 38 and in the Financial Review on pages 39 to 47. Strategy Our efforts are focused on growing Atalaya’s copper production, diversifying our sources of production, extending mine life, delivering structural cost reductions and maximising overall asset optionality, while having a positive impact on our various stakeholders. Alberto Lavandeira Adán Chief Executive Officer of Atalaya Mining Copper, S.A.. 01. Strategic Report Annual Report 2024 16 Atalaya Mining Copper, S.A. We are strong believers in the fundamentals of copper, which plays a critical role in economic growth and the energy transition. As the global population grows, socie ties increase in wealth and economies seek to decarbonise and pursue advanced technologies, more copper will be required. However, the mining industry faces enormous challenges as it seeks to deliver new copper supply due to increasing costs, regulations, infrastructure needs and social and environmental requirements. This demand-supply dynamic is why Atalaya is excited about the years ahead. We have assembled a diversified portfolio of copper assets located in low risk jurisdictions, and are lucky to have an experienced team of explorers, developers and operators that have the skills to bring projects into production. Recent M&A activity involving long-dated projects that require significant capital invest ments highlights the robust outlook for copper and the increasing scarcity of high-quality assets. Looking ahead We are excited about 2025, which has the potential to be a transformational year for Atalaya. In the Riotinto District, we expect to process higher grades in the coming years as San Dionisio moves into commercial production. At Proyecto Masa Valverde, the planned start of ramp devel opment will ultimately provide another source of higher grade material for processing at Riotinto. At the E-LIX Phase I plant, we continue to see promise for this unique leaching technology which could unlock value from many deposits in the Iberian Pyrite Belt and beyond. At Proyecto Touro, we were very pleased when Proyecto Touro was declared a strategic industrial project by the Xunta de Galicia. Touro has the potential to become a modern and sustainable mine as well as a new source of copper for European industry. The declaration highlights the Xunta’s commitment to promoting new investment and fostering innovation. Combined, our asset portfolio could deliver significant production growth in the comings years at a capital inten sity far below industry averages. Conclusion Finally, I would like to take this opportunity to reiterate the comments made by our Chair in relation to our employees and contractors and thank them for their hard work and dedication during the year. Yours sincerely, ALBERTO LAVANDEIRA ADÁN Chief Executive Officer of Atalaya Mining Copper, S.A. 17 March 2025 01. Strategic Report Annual Report 2024 17 Atalaya Mining Copper, S.A. Supply Landscape In 2024, global copper mine production increased by approximately 4%, with concentrate production rising by 2.8% and solvent extraction-electrowinning (SX-EW) growing by 9.2% (Source: ICSG). Key producers such as Chile, Peru, and the Democratic Republic of the Congo (DRC) contributed significantly to this growth. Chile continued its recovery from weather-re lated disruptions experienced in 2023, while Peru bene fited from the ramp-up of new mining projects. The DRC remained a pivotal player, particularly due to its copper-co balt production for electric vehicle (EV) batteries. Despite this production growth, concerns about longer- term supply persist. Few large scale mines are currently in development and many of the largest operations globally are experiencing grade decline and require significant investments in order to maintain copper production levels. Annual Report 2024 01. Strategic Report Copper Market Overview Demand Drivers and Growth Demand for refined copper increased by 2.6% in 2024, reaching approximately 26 million tonnes (Mt) (Source: IWCC). This growth was driven by the ongoing transition to renewable energy and the expansion of electric vehicle production. Key sectors contributing to increased copper usage included: ↘ ↘EV production: Copper remains a critical component in EV batteries, wiring, and charging infrastructure. ↘ ↘Renewable energy: Wind and solar energy installations, both copper-intensive, expanded in key markets. ↘ ↘Infrastructure and construction: Major infrastructure projects in Asia-Pacific, particularly in China, India, and ASEAN countries, boosted demand. China continued to be the largest consumer of copper, accounting for a significant portion of global demand. Notable growth was also observed in North America, where copper consumption increased by 2.1%, driven by advance ments in electronics and renewable energy infrastructure (Source: IWCC). Market Trends and Regional Contributions Global refined copper production in 2024 reached 26.2 Mt, driven by continued expansions in China’s refining capacity (Source: Statista). Asia-Pacific remained the fast est-growing region for copper consumption, accounting for nearly three-quarters of global demand (Source: IWCC). 01. Strategic Report Annual Report 2024 18 Atalaya Mining Copper, S.A. Secondary copper (recycled copper) played an increasingly important role in meeting demand, reflecting a growing emphasis on sustainability and circular economy practices in the copper industry. Price Volatility and Market Dynamics In Q1 2024, copper prices hovered around $8,344/t in January and $8,310/t in February, showing minimal fluctu ation. This period reflected a balanced market with stable supply from key producers like Chile and Peru and steady demand from industrial sectors. The absence of significant price movement during these months was likely due to the seasonal slowdown in construction activity, particularly in China, which historically affects copper consumption early in the year. Additionally, the market remained cautious, awaiting clearer signals on global economic recovery and further actions from central banks regarding interest rates. In March, copper prices jumped sharply, averaging $8,676/t, with a sustained upward trend throughout the month. This increase was driven by a noticeable pickup in demand from China following the Lunar New Year holiday. Reports of stronger-than-expected industrial output and a rebound in property investments bolstered sentiment, prompting increased purchases of copper for infrastructure and manu facturing. The market also saw speculative buying, antici pating tighter supply due to delayed shipments from South American producers facing port congestion. Copper prices peaked in Q2, averaging $9,482/t in April and reaching a high of $10,129/t in May. This sharp surge was supported by several key factors: »» Increased EV and renewable energy investments in Europe and North America led to higher copper usage in grid infrastructure and battery production. »» Delays in new mine outputs in Peru and disruptions caused by strikes in Chile created temporary tightness in the market, amplifying price gains. »» The market experienced a brief speculative rally in late April as major commodity funds positioned themselves for a continued bull run on expectations of a supply deficit. By July, prices began to stabilise, averaging $9,394/t, and continued to trend downward in August and September, reaching an average of $9,254/t in September. This correc tion was driven by: »» Recovery in supply: Key producers, including Chile and Peru, managed to increase output following the disrup tions earlier in the year. »» Weaker-than-expected industrial growth in China during the summer months, particularly in the construction sector, led to reduced demand for copper. »» Increased inventories at key metal exchanges, reflecting improved availability, exerted downward pressure on prices. Copper prices averaged $9,539/t in October, before softening further in November ($9,075/t) and December ($8,920/t). This decline was consistent with the typical seasonal slowdown in demand during the winter months. Additionally, major producers ramped up output in anticipa tion of year-end demand, leading to a temporary over supply situation in the spot market. Despite the decline, prices remained higher than the previous year’s averages, underscoring the strong structural demand from green energy and electrification initiatives globally. The copper market is expected to remain stable in 2025, with steady demand growth balanced by sufficient supply, though long-term trends suggest a tightening market in the years ahead. 12.000 9.000 11.000 8.000 10.000 7.000 6.000 2024 Market Copper Prices Jan-24 Jul-24 Mar-24 Sep-24 May-24 Nov-24 Feb-24 Aug-24 Apr-24 Oct-24 Jun-24 Dec-24 USD/dmt 01. Strategic Report Annual Report 2024 19 Atalaya Mining Copper, S.A. Q4 Decline Amid Renewed Dollar Strength: The euro lost momentum in the final quarter, falling to 1.0389 USD/EUR on 31 December 2024, the lowest level of the year. This decline coincided with a resurgence in U.S. dollar strength as the Federal Reserve maintained its hawkish policy stance. Meanwhile, concerns over slowing Eurozone growth further pressured the euro. The average EUR/USD exchange rate for 2024 was approxi mately 1.081 USD/EUR, based on ECB data. This volatility had a direct impact on Atalaya Mining’s financial results, as the company’s costs are largely denominated in euros, while its revenues are primarily in U.S. dollars. The strengthening of the dollar in the latter part of the year increased cost pres sures on the business. Atalaya remains vigilant in monitoring currency fluctuations and will continue evaluating potential risk management measures to mitigate future exchange rate impacts. Atalaya’s Strategic Response Throughout 2024, Atalaya maintained its exposure to copper price fluctuations, with no hedging agreements in place. The Group focused on enhancing operational effi ciency, sustainability, and exploration activities to position itself for long-term growth. Outlook for 2025 Looking ahead, the outlook for copper remains posi tive, driven by its critical role in electrification, renewable energy, and infrastructure development. However, short- term market dynamics may continue to be influenced by economic uncertainty, geopolitical risks, and potential supply chain disruptions. Atalaya remains well-positioned to capitalise on future opportunities in the copper market, with a focus on opera tional excellence, disciplined growth, and sustainability. Realised Copper Prices The average prices of copper for 2024 and 2023 were: 1.13 1.12 1.09 1.08 1.07 1.06 1.05 1.04 1.11 1.10 1.03 Jan-24 Jul-24 Mar-24 Sep-24 May-24 Nov-24 Feb-24 Aug-24 Apr-24 Oct-24 Jun-24 Dec-24 $/lb1 2024 2023 Realised copper price (excluding QPs) $/lb 4.19 3.80 Market copper price per lb (period average) $/lb 4.15 3.85 (1) One tonne of copper is 2,204.62 pounds. Realised copper prices for the reporting period noted above have been calculated using payable copper and excluding both provisional invoices and final settlements of quotation periods (“QPs”) together. The realised price during 2024, including the QP, was approximately $4.06/lb. Foreign Exchange Impact The EUR/USD exchange rate fluctuated notably throughout 2024, reflecting changes in monetary policy expectations and varying macroeconomic conditions in the Eurozone and the United States. According to daily exchange rate data from the ECB: Q1 Stability with Mild Depreciation: The year started with the exchange rate at 1.0956 USD/EUR on 2 January. Throughout January and February, the euro exhibited mild depreciation, with an average exchange rate of 1.090 USD/ EUR during this period. The slight weakening of the euro reflected cautious sentiment around economic growth in the Eurozone, while the U.S. dollar maintained strength due to continued Federal Reserve tightening. Mid-Year Appreciation and Peak: The euro strengthened steadily from March through September, driven by positive economic sentiment in the Eurozone and expectations of continued ECB rate hikes. The exchange rate peaked at 1.1196 USD/EUR on 30 September 2024, marking the highest level for the year. This appreciation was supported by improving industrial output and stronger-than-expected inflation data in the Eurozone. 01. Strategic Report Annual Report 2024 20 Atalaya Mining Copper, S.A. Strategic Framework 01. Strategic Report Atalaya Mining Plc. A Commitment to Responsible and Sustainable Growth Atalaya is a European copper producer dedicated to long-term value creation through operational excellence, innovation, and sustainable practices. With a firm commitment to responsible mining, our strategy aligns with the global transition towards resource-efficient, low-impact operations, ensuring that we address the evolving needs of investors, communities, and regulators. Our approach integrates resilience, growth, and environmental stewardship, allowing us to generate value across the mining lifecycle—from exploration and development to production and sale. Building a High-Performance Organisation Our people strategy is designed to align individual aspi rations with Atalaya’s strategic objectives, cultivating a performance-driven culture supported by transparent decision-making and open communication. These efforts enhance engagement, productivity, and operational effi ciency, ensuring that Atalaya remains an employer of choice in the industry. People: Cultivating a Resilient, Inclusive Culture Through innovation, strong governance, and a deep-rooted commitment to sustainability, Atalaya is well-positioned to navigate the challenges of the modern mining sector while driving superior returns for shareholders. Empowering Talent and Driving Cultural Transformation Atalaya’s workforce is at the heart of our success. We are committed to attracting, developing, and retaining top talent through structured leadership, technical, and safety programmes. Our Equality Plan, along with flexible benefits and employee development initiatives, fosters a collab orative and inclusive culture that promotes resilience and innovation across all levels of the organisation. 01. Strategic Report Annual Report 2024 21 Atalaya Mining Copper, S.A. 01. Strategic Report Atalaya Mining Plc. Atalaya’s workforce is at the heart of our success. We are committed to attracting, developing, and retaining top talent through structured leadership, technical, and safety programmes ↘↘Key Initiatives: ↘↘ Leadership Development Programme focused on tech nical and safety leadership to enhance team adaptability and resilience. ↘↘ Fundacion ARM expansion to support local education, health, and infrastructure projects. ↘↘ Implement a Workplace Well-being Programme with flexible working options and feedback platforms to improve employee engagement. Community Engagement and Social Responsibility Commitment to Local Communities Atalaya recognises that active community engagement is fundamental to sustainable operations. We maintain strong, long-standing ties with our neighbours, built on a shared commitment to social, economic, and environmental prosperity. As we expand our operations sustainably, we prioritise open and transparent communication, fostering a collaborative and trust-based relationship with local communities. At Proyecto Riotinto, we engage through the Atalaya Riotinto Foundation, while at Proyecto Touro, we work closely with the community through the TERRAS programme—an initia tive focused on Transparency, Ethics, and Genuine Environ mental and Social Responsibility. In 2025, we will further strengthen these efforts, ensuring that our growth supports the long-term development and well-being of the communities that host our operations. Socially Responsible Growth and Employment In 2024, 72.5% of our workforce was locally employed, supported by new agreements with contractors to enhance regional workforce development. This strategy fosters strong community relationships and demonstrates our commitment to building long-term, mutually beneficial partnerships. By aligning our approach with industry best practices, we maintain our social licence to operate. Portfolio: Strategic Growth and Asset Optimisation Our portfolio management strategy is centred on opti mising asset quality and advancing high-value growth projects. By aligning our assets with sustainable mining practices, we strengthen our competitive position and ensure investments are directed towards opportunities with the highest potential for long-term returns. 01. Strategic Report Annual Report 2024 22 Atalaya Mining Copper, S.A. Commitment to Exploration and Resource Expansion Exploration remains a core driver of Atalaya’s growth strategy. Ongoing activities around Proyecto Riotinto leverage innovative, data-driven techniques to enhance resource availability and strengthen reserves. This approach ensures we meet the growing demand for critical metals essential for the global energy transition, reflecting industry trends prioritising sustainable resource expansion. Innovation and Technological Integration Pioneering Technology for Efficiency and Sustainability Atalaya integrates cutting-edge technology to enhance operational efficiency, reduce costs, and meet sustaina bility goals. Recent initiatives include the installation of a 50 MW solar plant. Advanced digital systems and real-time monitoring tools further support operational insights, safety enhancements, and resource optimisation. E-LIX System: Innovation in Mineral Extraction Developed in collaboration with Lain Technologies, the E-LIX System is an innovative, electrochemical mineral extraction process designed to efficiently recover copper and zinc metals from complex sulphide concentrates. This proprie tary technology operates under controlled physicochemical conditions, significantly reducing the need for traditional pyrometallurgical or hydrometallurgical processes. The system offers several advantages: »» Higher metal recovery rates from polymetallic ores. »» Lower transportation and smelting costs by enabling on-site metal production. »» A reduced environmental footprint, as the process elim inates the need for high-temperature smelting, aligning with global decarbonisation goals. Once fully operational, this technology is expected to unlock significant value from Atalaya’s existing resources and position the Company as a leader in sustainable mineral processing ↘↘Key Initiatives: »» Scale and commercialise the E-LIX System at Proyecto Riotinto, integrating it into Atalaya’s core operations to enhance resource efficiency and sustainability. »» Advance research and optimisation efforts to further improve metal recovery rates and economic viability of the technology. Environmental Stewardship: Responsible Water and Resource Management Water Stewardship and Conservation Operating in water-scarce regions, Atalaya has imple mented robust water management strategies, including advanced treatment infrastructure at Proyecto Riotinto and a water plant at Proyecto Touro. Our commitment to water conservation ensures sustainable operations while preserving vital resources, aligning with industry-leading practices in ESG. Sustainable Mining and Decarbonisation Goals Atalaya is committed to reducing its environmental footprint and aligning with global decarbonisation efforts through the integration of renewable energy and resource-efficient practices. Our sustainability strategy prioritises energy efficiency, emissions reduction, and responsible resource management, reinforcing our leadership in sustainable mining. A major milestone in 2024 was the successful commis sioning of Phase I of our solar plant at Proyecto Riotinto, making it the first mine in Spain powered by solar energy. Full capacity is expected in 2025, after which the facility will supply approximately 22% of the mine’s total energy needs, contributing to lower operational costs and reduced green house gas (GHG) emissions. Additionally, Atalaya continues to advance its water conservation initiatives, further mini mising its impact on local water resources. ↘↘Key Initiatives: »» Expand renewable energy use through the full integration of the 50 MW Solar Plant at Proyecto Riotinto. »» Achieve further improvements in water reuse, targeting a higher recirculation rate through enhanced recycling systems. »» Implement a Biodiversity Action Plan to protect local ecosystems, promote reforestation, and enhance conservation efforts. Pathway to Sustainable Growth and Innovation Atalaya’s comprehensive strategic framework is designed to balance operational excellence, community engage ment, and environmental responsibility. By adopting best practices in mining and prioritising innovation, we are committed to setting a high standard for sustainable growth and long-term value creation. This approach positions Atalaya as a resilient and forward-thinking organisation, fully prepared to meet the challenges and opportunities of the evolving mining landscape. 01. Strategic Report Annual Report 2024 23 Atalaya Mining Copper, S.A. Key Performance Indicators We use a range of financial and operational key performance indicators (KPIs) to measure our performance and assess the progress of our strategy. These KPIs help us evaluate our operational efficiency, financial health, and sustainability goals, ensuring that we create value for our shareholders and achieve our long- term objectives. The KPIs outlined below are aligned with our business model and strategic priorities. Annual Report 2024 KPI 2024 2023 Revenue (€k) 326,797 340,346 EBITDA (€k) 66,356 73,1 Net Cash Position (€k) 35,091 54,32 Dividend per Share ($/share)* 0.07 0.09 Realised Copper Price ($/lb) 4.19 3.80 *Represents the total dividend for each fiscal year, consisting of an Interim Dividend (paid) and a proposed Final Dividend (subject to shareholder approval at the 2025 AGM). These financial KPIs provide insight into the Group’s financial health, profitability, and ability to return value to shareholders. 1. Financial KPIs KPI 2024 2023 Scope 1&2 CO2 Emissions (tonnes)* 98,447 102,423 Surface Water Withdrawal (millions m³) 3.58 4.23 Lost Time Injury Frequency Rate (LTIFR) (own employees + contractors) 3.33 3.94 Severity Rate 0.10 0.14 Community Investment (€m) 1.0 0.7 *Our 2024 CO2 emissions is an estimate data using 2023 emission. These KPIs reflect Atalaya’s commitment to environmental responsibility and social governance, ensuring we main tain high standards of sustain ability while engaging with and supporting local communities. 3. Sustainability & ESG KPIs KPI Guidance 2025 2024 2023 Copper Production (tonnes) 48,000 – 52,000 46,227 51,667 Ore Processed (Mt) 15.5 – 15.8 15.9 15.8 Cash Cost ($/lb) 2.70 – 2.90 2.92 2.79 All-In Sustaining Cost (AISC) ($/lb) 3.20 – 3.40 3.26 3.09 Payable Copper Production (tonnes) n/a 43,706 49,174 Operational KPIs provide insight into our efficiency in extracting and processing copper, while also helping us monitor production costs and operational sustainability. 2. Operational KPIs 01. Strategic Report 01. Strategic Report Annual Report 2024 24 Atalaya Mining Copper, S.A. Risk Management and Principal Risk Factors Atalaya is committed to identifying, assessing, and managing risks that may impact its strategic objectives, financial performance, operations, and compliance obligations. Our risk management framework is embedded within the Company’s corporate governance structure, ensuring that risks are effectively overseen, mitigated, and aligned with the Company’s long-term growth and sustainability strategy. By integrating risk management into decision-making processes, the Company proactively addresses opera tional, financial, regulatory, environmental, and external chal lenges, enabling it to adapt to changing market conditions, regulatory developments, and industry best practices. The Company has an ongoing process for identifying, evalu ating and managing the principal risks it faces. This process has been in place for the year under review and up to the date of approval of this Annual Report. Atalaya’s risk governance framework is structured to ensure that risk management is comprehensive, transparent, and aligned with industry standards. Its approach is based on clear roles and responsibilities across different levels of the organisation: 1. Board of Directors The Board of Directors holds ultimate responsibility for Atalaya’s risk management strategy. It considers the Company’s risk appetite as part of its ongoing oversight of the business, provides oversight of internal controls, and ensures that Atalaya operates within a balanced risk-reward framework. The Board conducts an annual review of stra tegic and material business risks, ensuring alignment with corporate strategy and evolving external factors. 2. Audit Committee (AC) The Audit Committee assesses financial risks arising from Atalaya’s operations, including liquidity, market, and credit risks. It evaluates the adequacy of financial controls and risk mitigation measures, advising the Board on risk exposure and financial stability. 3. Physical Risk Committee (PRC) The PRC oversees risks related to: »» Safety, health, and security across all operational sites. »» Enterprise-wide physical risk management, addressing infrastructure vulnerabilities and operational hazards. 01. Strategic Report 01. Strategic Report Annual Report 2024 25 Atalaya Mining Copper, S.A. 4. Sustainability Committee (SC) The SC monitors Atalaya’s environmental and sustainability risks, ensuring alignment with ESG standards, decarbonisa tion efforts, and responsible mining practices. 5. Management and Risk Ownership Atalaya’s management team is responsible for designing, implementing, and monitoring risk management policies across all business units. Risk owners within each opera tional and corporate function ensure that risks are: »» Identified and assessed regularly. »» Effectively mitigated through tailored action plans. »» Monitored for changes that require strategic adjustments. Management provides regular risk reports to the Board and Committees, ensuring continuous oversight and accountability. Risk Management Process Atalaya employs a structured, company-wide risk manage ment process that enables us to identify, assess, and mitigate risks efficiently. This process includes: 1. Risk Identification The Company continuously monitors internal and external risks, including market trends, regulatory changes, opera tional challenges, and geopolitical factors. Regular risk assessments are conducted by management, ensuring potential threats are captured in a comprehensive risk register. 2. Risk Assessment and Prioritisation Risks are evaluated based on impact and likelihood, allowing for effective prioritisation. Each risk is assigned an ‘owner’ (a member of the manage ment team). Each risk is also assigned oversight responsi bility by either the Board or one of its committees. Each risk is assessed against Atalaya’s risk appetite, ensuring an appropriate balance between risk-taking and risk mitigation. 01. Strategic Report The Company proactively addresses operational, financial, regulatory, environmental, and external challenges, enabling it to adapt to changing market conditions. Annual Report 2024 01. Strategic Report Annual Report 2024 26 Atalaya Mining Copper, S.A. 3. Risk Mitigation Strategies Tailored risk management plans are developed for key risks, ensuring structured mitigation approaches. Internal controls and operational adjustments are imple mented to minimise exposure to critical risks. 4. Continuous Monitoring and Reporting Risks are monitored throughout the year, with regular updates to the Board and Committees. Emerging risks are evaluated, ensuring Atalaya remains proactive and adaptable in a changing risk environment. Principal Risk Factors Atalaya operates in a complex and dynamic industry, where various risks may impact our business performance, regula tory compliance, and long-term strategy. The principal risks we face include: 1. Strategic and Market Risks »» Commodity Price Volatility: Fluctuations in copper prices and exchange rates may impact revenue and profitability. »» Global Economic Uncertainty: Changes in macroeco nomic conditions, inflation, and geopolitical tensions can affect demand for copper and impact supply chains. »» Growth and Investment Risks: The ability to expand operations, develop new projects, and secure financing is subject to market conditions and regulatory approvals. 2. Operational Risks »» Health, Safety, and Environmental (HSE) Risks: Mining operations inherently carry safety and environmental challenges. Atalaya prioritises compliance with strict safety protocols, regular audits, and continuous training. »» Production and Supply Chain Risks: Disruptions in raw material supply, equipment availability, or infrastructure failures can impact operational efficiency. Atalaya contin uously evaluates procurement strategies and logistical resilience. »» Asset Integrity and Resource Management: Effective mine planning and resource optimisation are essential for ensuring long-term operational stability. 3. Legal and Regulatory Risks »» Evolving Mining Legislation: Changes in environmental laws, permitting requirements, and tax regimes can impact Atalaya’s operations and cost structure. »» Environmental Compliance: Stricter emissions, waste management, and water usage regulations require continuous monitoring and adaptation. »» Community Relations and Social Licence to Operate: Maintaining strong relationships with local communities is essential to minimising social risks and ensuring project continuity. 4. Financial Risks »» Liquidity and Capital Allocation Risks: Effective cash flow management and access to financing are critical to supporting Atalaya’s growth strategy. »» Foreign Exchange and Interest Rate Exposure: As a Euro pean mining company, Atalaya is exposed to currency fluctuations and interest rate changes, which require active financial risk management. 5. External and Emerging Risks »» Geopolitical Instability and Trade Barriers: International trade policies, conflicts, and sanctions may impact copper demand and global supply chains. »» Climate Change and Sustainability Regulations: Increasing focus on carbon reduction and energy effi ciency presents both regulatory challenges and oppor tunities for innovation. »» Cybersecurity and Technological Risks: Growing reliance on digital systems and automation necessitates strong cybersecurity measures to protect data and operational integrity. Annual Risk Review and Policy Updates The Board conducts an annual review of its risk profile, ensuring the Company’s risk management approach remains aligned with business objectives and external conditions. As part of this process: ↘↘ Management and key executives report to the Board and Committees on: »» Emerging material risks. »» Effectiveness of mitigation strategies. »» Implementation of internal controls. »» Compliance with risk management policies. ↘↘ The Board reviews Atalaya’s risk appetite, making adjust ments where necessary to ensure strategic alignment. 01. Strategic Report Annual Report 2024 27 Atalaya Mining Copper, S.A. Physical Risks – Tailings Dam Description A tailings dam failure poses a significant threat to environmental safety, operational continuity, and regulatory compliance. The uncontrolled release of tailings material could lead to widespread environmental contamination, damage to nearby communities and infrastructure, financial and legal consequences, and reputational harm. Ensuring the structural integrity and proper management of the tailings storage facility is critical to preventing catastrophic failure. Nature of Risk Tailings dam failures can result from geotechnical instability, excessive water accumulation, seismic activity, extreme weather events, or poor construction and maintenance practices. Factors such as improper drainage, inadequate monitoring, or human error can increase the likelihood of dam instability, leading to dam overtopping, slope failure, or structural collapse. In the event of a failure, the rapid release of tailings material may cause loss of life, environmental degradation, water source contamination, and significant operational disruptions, potentially resulting in regulatory fines, litigation and loss of social licence to operate. Mitigation The Company mitigates this risk via engineering and design controls, water management and stability monitoring, inspection and maintenance protocols and emergency response plan. Probability Unlikely Impact Medium Physical Risks – Excluding Tailings Dam Description The Company’s operations are exposed to various physical risks that could disrupt production, endanger personnel, and impact financial performance. These include natural hazards such as forest fires, as well as human-induced risks such as equipment sabotage, intentional damage, and theft. Additionally, structural failures, including pit wall collapse, and equipment or fleet fires, post significant operational and safety risks. Failure to manage these risks effectively could result in operational delays, increased costs, regulatory scrutiny, and reputational damage. Nature of Risk The Company’s operating mine is located in an area of increased risk from forest fire which could be triggered by natural causes, human activity, or climate-related factors. A fire could damage infrastructure, disrupt operations, and threaten worker safety. Theft of high-value equipment, fuel or materials can lead to financial losses and operational delays. Sabotage, whether by external or internal parties could result in deliberate damage to assets, security breaches, or production downtime. Heavy machinery and vehicles used in mining are susceptible to mechanical failures, fuel leaks, or electrical malfunctions that could cause fires. Such incidents may damage assets, endanger personnel, and disrupt production. Geotechnical instability due to weak rock formations, excessive rainfall, or inadequate slope management can lead to pit wall failure. This poses significant safety hazards with the potential to trap personnel and equipment, cause operational halts, and require costly remediation efforts. Mitigation Several measures are in place for all physical risks, including, but not limited to implementation of a forest fire prevention management plan, installation of fire suppression systems in the mobile mining fleet, inspection, design and rehabilitation of structures where risks are prevalent, strict control of reagent delivery and reinforcement of training on chemical reagents. Probability Likely Impact High High Medium Low The Board has completed a robust assessment of the Company’s current and emerging principal risks and the following are those that have been identified from that assessment as being the highest risk: 01. Strategic Report Annual Report 2024 28 Atalaya Mining Copper, S.A. Single Asset Concentration Description Atalaya operates under a distinctive model, emphasising a singular asset—Proyecto Riotinto. This exclusive focus centres on copper concentrate production, with a concurrent silver by-product. A meticulous financial examination is crucial to comprehending associated risks and the strategic approaches employed by the Company. Nature of Risk The risk is inherent in Atalaya’s concentrated operational structure, primarily depending on Proyecto Riotinto. The Company’s heavy reliance on this single producing asset renders it financially sensitive. Any disruption or adverse event affecting Proyecto Riotinto directly influences the overall financial performance of the entire Group, creating vulnerability associated with dependence on a solitary revenue stream. Mitigation Atalaya has proactively implemented strategic measures to mitigate this inherent risk. Proyecto Riotinto has demonstrated operational resilience since its restart in 2016, consistently maintaining cash costs below the market price for copper, even during cyclical lows. Additionally, the Company actively pursues acquisitions in the mining sector to diversify its operational portfolio, thereby reducing reliance on a single asset. The Business Development Department evaluates growth opportunities and transactions, ensuring a structured decision-making process within established authority levels set by the Board. These measures collectively aim to enhance resilience and mitigate the impact of potential disruptions to the single producing asset. Probability Possible Impact High Geopolitical Conflicts Description This risk relates to the impact of recent interstate conflicts on the global economic environment, volatility in regulated markets and inflationary pressures. Atalaya, which operates in a global context, is susceptible to the far-reaching consequences of geopolitical conflicts. Nature of Risk The nature of this risk stems from the external influence of geopolitical conflicts, which can disrupt global economic conditions, induce market volatility, and exert inflationary pressure. Atalaya’s operations are exposed to the broad-ranging implications of these conflicts. Mitigation To mitigate this risk, Atalaya adopts a proactive stance. The Company closely monitors commodities prices, supplies prices, and international economic variations, aligning its strategies with the dynamic geopolitical landscape. By staying informed and responsive to market trends influenced by geopolitical conflicts, Atalaya aims to navigate potential challenges effectively. Probability Likely Impact High Sustained and Significant Changes to Commodity Prices Description This risk pertains to the susceptibility of the Company´s business to sustained and significant changes in commodity prices, specifically a sustained decline in the price of copper and other metals in world markets. Commodity prices, known for their volatility, may experience fluctuations that could adversely impact Atalaya’s overall business, operating results, and future prospects. Nature of Risk The nature of this risk is rooted in the external factor of global market dynamics, particularly the potential for unpredictable and substantial fluctuations in commodity prices. A decline in copper and other metal prices could directly affect the revenue and profitability of Atalaya’s mining operations. Mitigation To address this risk, Atalaya has implemented proactive measures. The mine’s cash costs are consistently maintained below the market price for copper, even during recent cyclical lows. Additionally, the Company adopts a vigilant approach by constantly monitoring commodity prices. Atalaya revisits and refines its hedging strategies and policies to navigate the impact of adverse changes in commodity prices. Probability Highly Likely Impact Medium 01. Strategic Report Annual Report 2024 29 Atalaya Mining Copper, S.A. Difficulty Maintaining Existing Financing or Obtaining Future Financing if Capex Projects are Over Budget Description Atalaya faces the risk of encountering difficulty in maintaining existing or securing additional financing in the event that existing capex projects surpass their allocated budgets. Including the E-LIX project, which Atalaya has funded since 2019 and has experienced some delays and overruns in during the construction of the industrial plant. This risk is influenced by various external factors, including heightened interest rates, recent global financial market volatility, geopolitical tensions, and inflationary pressures. Nature of Risk The nature of this risk lies in the potential inability of Atalaya to access the necessary funds required to complete planned development projects. Unforeseen circumstances such as increased interest rates or global financial instability could impede the Company’s ability to secure additional financing, affecting the successful execution of capital projects. Mitigation Atalaya employs a proactive approach to mitigate this risk. The Company has a permanent contact with counterparties and potential counterparties to ensure the capacity of funding projects and continuously monitors the financial market conditions, including fluctuations in bank interest rates. This diligent monitoring allows Atalaya to stay informed about potential changes in the financial landscape and make timely, informed decisions to secure financing under favourable terms. Probability Possible Impact High Rising Extraction Cost Over Time as Reserves Deplete Description The risk involves a potential escalation in extraction costs over time as reserves deplete combined with other operating issues such as, but not limited to, higher strip ratio, low grades, and low recoveries. The maturity of the Company’s Cerro Colorado mine and the historical exploitation of low-grade minerals contribute to this risk, resulting in increased unit extraction costs due to longer hauling distances and the need to extract lower copper concentration minerals. Nature of Risk The nature of this risk is rooted in the challenges posed by the depletion of high-grade reserves at the mature Cerro Colorado mine. As the mine transitions to lower-grade minerals, the unit extraction costs are expected to rise, impacting the economic viability of continued mining operations. Mitigation To mitigate this risk, Atalaya employs a multi-faceted strategy. Regular monitoring of copper prices and mineral reserve estimates allows the Company to assess the economic feasibility of ongoing mining activities. Additionally, efforts are underway to seek administrative permits for accessing the mineral resources of the San Dionisio project, which holds high-grade ore. This strategic move aims to counterbalance the depletion of high-grade reserves at Cerro Colorado. Probability Possible Impact High Personnel Safety Description The operation of a mine site exposes personnel to various physical risks and safety and health hazards including exposure to hazardous substances, heavy machinery accidents, traffic accidents, and other occupational risks. Failure to adequately manage these risks could result in serious injuries, fatalities, regulatory penalties, operational descriptions, and reputational damage. Nature of Risk Mining activities inherently involve working in high-risk environments where personnel may be exposed to dust inhalation, fire hazards, and mechanical failures. Additionally human factors such as fatigue, inadequate training, or non-compliance with safety protocols can heighten the risk of workplace incidents. Regulatory requirements also impose stringent safety obligations, and any failure to meet these standards could lead to enforcement actions, fines, or shutdowns. Mitigation The Company prioritises a strong safety culture through comprehensive risk assessments, regular training programmes, and strict adherence to health and safety regulations. Additionally, the Company engages in continuous improvement activities to enhance workplace safety. Probability Possible Impact High 01. Strategic Report Annual Report 2024 30 Atalaya Mining Copper, S.A. Environmental – Acid Water Description The mining operation generates waste materials that may lead to the formation of acidic water. If not properly managed, uncontrolled acidic water discharge can result in environmental contamination, regulatory non-compliance, reputational damage, and potential financial liabilities. Nature of Risk Acidic water discharge occurs when sulphide minerals in waste rock and tailings react with oxygen and water, generating sulphuric acid. This acidic runoff can leach heavy metals from surrounding rock, contaminating local water sources and ecosystems. If containment and treatment systems fail or are inadequate, there is a risk of legal penalties, loss of environmental permits, and community opposition, all of which could significantly impact operational continuity and long-term sustainability. Mitigation The Company actively monitors and manages seepage levels to ensure that they remain within established design parameters. Regular inspections and upgrades of pumping systems are conducted as needed to maintain efficiency and reliability. Rainwater is segregated from acidic water and passive treatment methods are trialed to improve water acid management. Probability Likely Impact Medium Dependency on Key Management and Critical Skills Loss Description The risk involves the likelihood of losing critical skills across various areas of Atalaya’s business, including leadership/management, personnel, process/structure and technology. Nature of Risk This risk’s nature lies in the potential loss of key skills and expertise critical to the organisation’s smooth functioning. It extends to the leadership, personnel, processes, technology, and overall organizational culture. Mitigation To address this risk, Atalaya has implemented a succession plan for each key position, aiming to ensure a seamless transition in the event of skill losses. The Company focuses on talent development and retention strategies to minimise the impact of critical skill departures. Probability Low Impact Moderate 01. Strategic Report Annual Report 2024 31 Atalaya Mining Copper, S.A. In accordance with the requirements of Provision 31 of the 2018 UK Corporate Governance Code, the Board of Directors has assessed the long- term prospects of the Company over a five-year period. This period aligns with the Company’s strategic planning cycle and provides an appro priate timeframe for assessing the impact of significant risks and uncertainties on the business. Given the capital-intensive and cyclical nature of mining, the five-year period is particularly suitable for assessing Atalaya’s resilience in the face of potential commodity price declines, input cost increases, operational disruptions, and capital project cost escalations. This period also aligns with typical investment cycles, project develop ment timelines, and mine planning in the sector. The Board considered the following key factors in its assessment: Annual Report 2024 01. Strategic Report Viability Statement Financial Position and Liquidity The Board assessed Atalaya’s financial resilience, with a primary focus on cash reserves, access to credit facilities, and the overall capital structure. As of 31 December 2024, Atalaya held €52.9 million in cash and cash equivalents, and it had total borrowings of €17.8 million. Of these borrowings, €6.9 million are repayable within the next 12 months, with the remaining €10.9 million extending beyond the five-year period, ensuring a balanced repayment schedule. Addition ally, Atalaya’s access to undrawn revolving credit facilities and renewed annually combined with its historical ability to secure long-term debt financing, suggest that poten tial funding remains available (subject to prevailing market conditions) providing a buffer to maintain liquidity even in severe economic downturns. The assessment considered Atalaya’s ability to maintain sufficient cash flow under adverse conditions. This analysis included a review of potential liquidity impacts, ensuring the Company’s capacity to meet both operational and invest ment needs. The approach reflects the mining sector’s best practices, where maintaining liquidity and flexibility to manage cash flow volatility is crucial due to unpredictable commodity price movements and project-related capital demands. 01. Strategic Report Annual Report 2024 32 Atalaya Mining Copper, S.A. Business Model Resilience in a Mining Context Atalaya’s business currently consists of a single operating mine, Proyecto Riotinto, which derives effectively all of its revenue from the production of copper concentrates and other exploration and development projects which are not yet cash generating. As such, the business model of Atalaya is highly dependent on the price of copper and on the continuous operation of its only mine. In order to mitigate the risks associated with this concentra tion, Atalaya’s strategy is focused on avoiding operational disruptions and maximising profitability. This strategy includes operational excellence, efficient extraction methods, cost management, and continuous innovation. Proyecto Riotinto has a proven production track record since its restart in 2015 and maintains an expected mine life of over 10 years. The Company is currently in the process of obtaining the environmental permits for Proyecto Touro, which would provide diversification via a second operation. Principal Risks in Mining Operations The Board conducted a thorough review of Atalaya’s key operational risks, focusing on strategic, market, environ mental, regulatory, and operational factors. The following primary risks were modelled in our assessment on a stand- alone basis: In addition, these scenarios were integrated into a series of severe yet plausible stress tests, including combina tions of multiple adverse events, which were evaluated to assess Atalaya’s resilience, focusing on key metrics such as liquidity, debt covenant compliance, and the Compa ny’s ability to meet operational and financial obligations. While individual risks were assessed separately, the Board recognises that simultaneous occurrence of multiple adverse events could amplify their impact. Accordingly, the Company remains focused on maintaining financial and operational resilience under a range of combined downside scenarios. The stability and safety of our tailings storage facilities (TSFs) are critically important. Atalaya’s TSFs are designed according to international best practices, using centreline construction methods to ensure enhanced stability. Regular inspections and monitoring are conducted to maintain compliance with strict environmental and operational standards. Although a catastrophic tailings failure was not included in the stress test due to the comprehensive design and oversight of these facilities, the Company remains vigi lant in managing this and other environmental risks. Based on this analysis, and while acknowledging that unforeseen external factors, including regulatory changes or extreme market conditions could influence this outlook, the Board has a reasonable expectation that Atalaya will be able to continue in operation and meet its liabilities as they fall due over the next five years. The Company’s robust financial position, proactive risk management strategies, and commitment to operational resilience underpin our expectation of Atalaya’s ability to navigate future challenges successfully. Commodity Price Decrease As the mining sector is heavily influenced by commodity prices, the Board assessed the impact of a 15% decrease in copper prices over a two-year recessionary period and recovered in the remaining three years within the five-year outlook. Input Cost Increase Reflecting on recent cost shocks, including the significant 2022 spike in electricity prices, a 15% increase in site operating expenses over a two-year inflationary period and decreasing to expected levels in the remaining three years was modelled. Operational Shutdowns Drawing on past shutdowns, such as those experienced during the COVID-19 pandemic due to supply chain disruptions, a three-month shutdown of the production site was modelled. Capital Project Capex Escalation Recognising recent trends in project cost inflation, the Board considered a 50% increase in capital expenditures for key approved projects at Riotinto over a two-year period and decreasing to expected levels in the remaining three years over a five-year period. Lower Copper Head Grade Recognising recent trends in project cost inflation, the Board considered a 50% increase in capital expenditures for key approved projects at Riotinto over a two-year period and decreasing to expected levels in the remaining three years over a five-year period. 01. Strategic Report Annual Report 2024 33 Atalaya Mining Copper, S.A. Units expressed in accordance with the international system of units (SI) Unit Q4 2024 Q4 2023 FY2024 FY2023 Ore mined tonnes 3,507,203 3,742,814 15,176,009 14,944,638 Waste mined2 tonnes 10,200,079 7,362,657 32,824,156 32,182,904 Ore processed tonnes 3,757,040 4,138,368 15,913,064 15,790,098 Copper grade % 0.41 0.36 0.35 0.38 Copper concentrate grade % 17.37 19.83 18.33 20.72 Copper recovery % 78.15 85.47 83.06 86.62 Copper concentrate produced tonnes 69,55 64,414 252,165 249,321 Copper production tonnes 12,078 12,775 46,227 51,667 Payable copper production tonnes 11,382 12,131 43,706 49,174 Cash Cost US$/lb payable 2.79 2.90 2.92 2.79 All-in Sustaining Cost US$/lb payable 3.28 3.16 3.26 3.09 $/lb Cu payable Q4 2024 Q4 2023 FY2024 FY2023 Mining 1.05 0.92 1.07 0.86 Processing 0.88 0.84 0.90 0.89 Other site operating costs 0.66 0.67 0.64 0.56 Total site operating costs 2.58 2.44 2.61 2.30 By-product credits (0.34) (0.11) (0.27) (0.09) Freight, treatment charges and other offsite costs 0.55 0.57 0.58 0.58 Total offsite costs 0.21 0.47 0.30 0.49 Cash Cost 2.79 2.90 2.92 2.79 Cash Cost 2.79 2.90 2.92 2.79 Corporate costs 0.11 0.09 0.10 0.08 Sustaining capital (excluding tailings expansion) 0.03 0.02 0.05 0.03 Capitalised stripping costs3 0.27 0.08 0.11 0.12 Other costs 0.09 0.06 0.09 0.07 AISC 3.28 3.16 3.26 3.09 (3) Represents the Cerro Colorado pit only. * There may be slight differences between the numbers in the above tables and the figures announced in the quarterly operations updates that are available on Atalaya’s website at www.atalayamining.com (2) Represents the Cerro Colorado pit only. * There may be slight differences between the numbers in the above tables and the figures announced in the quarterly operations updates that are available on Atalaya’s website at www.atalayamining.com Proyecto Riotinto The following table presents a summarised statement of operations of Proyecto Riotinto for the three and twelve month periods ended 31 December 2024 and 2023. Annual Report 2024 Operating Review 01. Strategic Report 01. Strategic Report Annual Report 2024 34 Atalaya Mining Copper, S.A. Mining and Processing Annual Report 2024 01. Strategic Report Copper production was 12,078 tonnes in Q4 2024 (Q4 2023: 12,775 tonnes) and 46,227 tonnes in FY2024 (FY2023: 51,667 tonnes). Production in FY2024 was below FY2023 as a result of lower copper grades and recoveries, although higher silver production helped to mitigate the impact on revenues. On-site copper concentrate inventories were 21,815 tonnes at 31 December 2024 (31 December 2023: 6,722 tonnes). Copper contained in concentrates sold was 10,271 tonnes in Q4 2024 (Q4 2023: 12,928 tonnes) and 43,609 tonnes in FY2024 (FY2023: 50,808 tonnes). Production Ore mined was 3.5 million tonnes in Q4 2024 (Q4 2023: 3.7 million tonnes) and 15.2 million tonnes in FY2024 (FY2023: 14.9 million tonnes). Waste mined at Cerro Colorado was 10.2 million tonnes in Q4 2024 (Q4 2023: 7.4 million tonnes) and 32.8 million tonnes in FY2024 (FY2023: 32.2 million tonnes). In addition, waste stripping activities continued at the San Dionisio area. Mining Ore processed was 3.8 million tonnes in Q4 2024 (Q4 2023: 4.1 million tonnes) and 15.9 million tonnes in FY2024 (FY2023: 15.8 million tonnes), which represents a new annual throughput record. Copper grade was 0.41% in Q4 2024 (Q4 2023: 0.36%) and 0.35% in FY2024 (FY2023: 0.38%), with lower full-year grades as a result of pit sequencing. Copper recovery was 78.15% in Q4 2024 (Q4 2023: 85.47%) and 83.06% in FY2024 (FY2023: 86.62%), with the decrease due to a combination of lower grades and the characteristics of certain ores. Processing 01. Strategic Report Annual Report 2024 35 Atalaya Mining Copper, S.A. Proyecto Riotinto Waste stripping continues at San Dionisio in order to prepare the area for future mining phases. Total material mined was 1.9 million tonnes in Q4 2024 and 13.4 million tonnes in FY2024. Meanwhile, the permitting process associated with the San Dionisio final pit continues to advance. Construction progress continues in relation to the planned relocation of the A-461 road that currently runs between Cerro Colorado and San Dionisio. At San Antonio, an infill and step-out drilling programme is expected to begin in the coming months. Riotinto District – Proyecto Masa Valverde PMV has been granted the two key permits required for development – the Unified Environmental Author isation (or in Spanish, Autorización Ambiental Unificada (“AAU”) and the exploitation permit. The Company expects to start construction of the access ramp in H1 2025 once it has completed the purchase of certain surface rights. At present, four drill rigs are testing the north extension of the copper veining stockwork mineralisation at the Masa Valverde deposit, while additional drilling was recently completed at other targets. E-LIX Phase I Plant Commissioning and ramp-up activi ties continue at the E-LIX Phase I plant. During Q4 2024, good progress was made in relation to rectifying issues in the conventional elements of the plant. The novel leaching section continues to perform well, where recent focus has been on leaching the zinc contained within Atalaya’s copper concentrates given the low copper treatment charge environment. Once fully operational, the E-LIX plant is expected to produce high-purity copper or zinc metals on site, allowing the Company to potentially achieve higher metal recoveries from complex polymetallic ores, lower transporta tion charges and a reduced carbon footprint. Proyecto Touro On 24 June 2024, Atalaya announced that Proyecto Touro, via its local entity Cobre San Rafael, was declared a strategic industrial project by the Council of the Xunta de Galicia (“XdG”). Under legislation of the Autonomous Community of Galicia, the status of strategic industrial project (or in Spanish, Proyecto Industrial Estratégico (“PIE”)) acts to simplify the administrative procedures associated with the development of industrial projects and intends to substantially reduce permitting timelines. This declaration highlights the XdG’s commitment to promoting new investment that will benefit the region and also support the objectives of the European Union. Copper is considered a strategic raw material by the EU and this project has the potential to become a new source of sustainable European copper production. The XdG is continuing its review according to the simplified procedures afforded to projects with PIE status. The public information period, which serves to inform the surrounding communities and organisations about the proposed project, concluded on 31 January 2025. Cobre San Rafael is currently focused on analysing and responding to the feedback submitted during the public information period and assessing the sectoral reports issued by the various departments of the XdG. In addition, the Company continues to engage with the many stakeholders in the region including through various recruitment initiatives, and is restoring the water quality of the rivers around Touro by operating its water treatment plant. The Company also continues infill and step-out drilling programmes focused on areas captured in the initial mine plan and where mineralisation remains open. 50 MW Solar Plant The 50 MW solar plant was connected to the substation at the end of October 2024. With Phase I complete, full capacity is expected to be reached in 2025 after which the facility is expected to provide approx imately 22% of Riotinto’s current electricity needs. Together, the 50 MW solar plant and the Company’s 10-year PPA will provide over 50% of the Company’s current electricity requirements at a rate well below historical prices in Spain. The Company also continues to assess opportunities to enter into additional long-term PPAs in order to provide further price stability. 01. Strategic Report Annual Report 2024 Asset Portfolio Update 01. Strategic Report Annual Report 2024 36 Atalaya Mining Copper, S.A. Corporate Activities Update Move to the Main Market On 29 April 2024, the Company announced the admission of its ordinary shares to the premium listing segment of the Official List maintained by the Financial Conduct Authority (“FCA”) and to trading on London Stock Exchange’s main market for listed securities, along with the cancellation of trading on AIM. The move up marked a significant corporate milestone for Atalaya and reflected the Company’s desire to expand its investor base and continue its growth trajectory. New Listing Rules On 29 July 2024, the FCA implemented a new simplified listing regime. As a result, the Company is now admitted to the equity shares (commercial companies) (“ESCC”) cate gory of the Official List, in place of the prior premium listing segment. Re-domiciliation On 10 January 2025, the Company announced the comple tion of its re-domiciliation from the Republic of Cyprus to the Kingdom of Spain. As a result, trading in Atalaya’s shares under the new registered name of Atalaya Mining Copper, S.A. became effective on 10 January 2025. In addition, the actions and initiatives noted in the Company’s 6 January 2025 announcement became effective on 9 January 2025, with retrospective effect for Spanish corporate law purposes as from 27 December 2024. The re-domiciliation to Spain, along with Atalaya’s move to the Main Market, opened the possibility for Atalaya to be included in the FTSE UK Index Series and further expanded its access to new investors. Proyecto Ossa Morena Once new permits are approved, drilling will be prioritised at the flag ship Alconchel-Pallares copper-gold project and the Guijarro-Chaparral gold-copper project. Riotinto District – Proyecto Riotinto East A gravimetric ground survey will be carried out over selected areas to better define drill targets. Skellefte Belt and Rockliden (Sweden) On 19 November 2024, Atalaya announced that it had entered into two binding agreements with Mineral Prospektering i Sverige AB (“MPS”) pursuant to which Atalaya can earn an initial 75% interest in two separate land packages in Sweden. The Skellefte Belt land package (“Skellefte Belt Project”) and the Rockliden land package (“Rockliden Project”) are located in two notable districts that host many large-scale volcanogenic massive sulphide (“VMS”) deposits and mines owned by Boliden AB. Both regions are underexplored and could increase Atalaya’s expo sure to critical minerals in Europe. In Q4 2024, activities focused on preparing for the winter drilling season. At the Rockliden Project, drilling commenced during the first week of January 2025, with an initial focus on extensional drilling at the “Target 1” prospect and other untested high priority regional Versatile Time-Domain Electromagnetic (“VTEM”) anomalies. At the Skellefte Belt Project, drilling is underway and focused on known VTEM anomalies and infill and extensional drilling at the Bjurtraskgruvan prospect. Indexation On 5 March 2025, FTSE Russell announced the results of its March 2025 Quarterly Review for the FTSE UK Index Series. Atalaya is pleased that its shares will be added to the FTSE All-Share and FTSE SmallCap indices effective 24 March 2025. This milestone is expected to enhance the Compa ny’s visibility to institutional investors. Board of Directors During 2024 and early 2025, several updates took effect related to succession planning at the Company’s Board of Directors: ↘↘ Neil Gregson was appointed Chair of Atalaya, succeeding Roger Davey ↘↘ Kate Harcourt was appointed Senior Independent Director ↘↘ Carole Whittall was appointed as an Independent Non-Executive Director ↘↘ Roger Davey retired from the Board ↘↘ Coriseo González-Izquierdo was appointed as an Inde pendent Non-Executive Director As a result of these updates, various changes were made to the composition of the Company’s Board committees. In addition, it is intended that Coriseo González-Izquierdo will succeed Hussin Barma as Chair of the Remuneration Committee no later than the date of the 2025 Annual General Meeting. 01. Strategic Report Annual Report 2024 37 Atalaya Mining Copper, S.A. Production As announced in the Company’s Q4 2024 Operations Update, copper production guidance is 48,000 – 52,000 tonnes for FY2025, which compares to FY2024 produc tion of 46,227 tonnes. Production in FY2025 is expected to be weighted slightly towards H1 2025 as a result of pit sequencing. Production in the initial months of 2025 has been encour aging and supports the Company’s full-year 2025 outlook. Operational Guidance Proyecto Riotinto opera tional guidance for 2025 is as follows: Unit Guidance 2025 Ore mined million tonnes 15 – 16 Waste mined4 million tonnes 37 – 43 Ore processed million tonnes 15.5 – 15.8 Copper grade % 0.38 – 0.42 Copper recovery % 78 – 82 Copper production tonnes 48,000 – 52,000 Cash Cost $/lb payable $2.70 – 2.90 All-in Sustaining Cost $/lb payable $3.20 – 3.40 (4) Represents the Cerro Colorado pit only. 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. Should the Company consider the current guidance no longer achievable, then the Company will provide a further update. Operating Costs The prices of several key consumables continued their downward trend in 2024 after having peaked in 2022, although unit prices remain above 2021 levels. Ongoing conflicts in several regions may continue to disrupt supply chains and impact energy prices, therefore further input price volatility is possible. With respect to electricity, the Company’s long-term PPA and solar plant are expected to provide some price stability. 01. Strategic Report Annual Report 2024 01. Strategic Report Annual Report 2024 38 Atalaya Mining Copper, S.A. Cash Cost and AISC guidance for FY2025 are as follows: Exploration Expenditures Investing in early stage exploration remains a key compo nent of Atalaya’s long-term strategy. The Company has interests in several key land packages in Spain, including in the Iberian Pyrite Belt (Riotinto District), the Ossa Morena Metallogenic Belt (Proyecto Ossa Morena) and around Proyecto Touro, as well as new earn-in agreements in two VMS districts in Sweden. In FY2025, the Company’s exploration expenditure budget is €6 – 8 million. The main focus will be on expanding and upgrading resources at Cerro Colorado, San Antonio, Proyecto Masa Valverde and Proyecto Touro, as well as drill testing targets in Sweden and at Proyecto Masa Valverde. Item € million San Dionisio waste stripping, dewatering and road relocation5 €32 – 46 Proyecto Masa Valverde access ramp6 €8 – 12 E-LIX Phase I Plant €5 – 7 50 MW solar plant €3 – 5 Expansion of existing Riotinto tailings facility €10 – 12 Total non-sustaining capital investments €58 – 82 (5) Upon receipt of the final permit, a portion of this may be reclassified to Cash Cost and AISC (6) Ramp development to begin once purchase of surface rights are completed AISC guidance excludes investments in the tailings dam and ongoing waste stripping at the San Dionisio area, which are included in the non-sustaining capital investment guidance below. Non-Sustaining Capital Investments Atalaya continues to make investments that support its core strategic objectives of increasing its copper production, diversifying its sources of production, extending mine life, delivering structural cost reductions and maximising overall asset optionality. The Company plans to make the following non-sustaining capital investments in FY2025: Cash Cost range of $2.70 – 2.90/lb copper payable AISC range of $3.20 – 3.40/lb copper payable ↘↘ Includes capitalised stripping costs of ~$0.20/lb from Cerro Colorado ↘↘ Compares with actual of $3.26/lb in FY2024, which included $0.11/lb in capital ised stripping costs from Cerro Colorado ↘↘ Compares with actual of $2.92/ lb in FY2024 Annual Report 2024 01. Strategic Report 01. Strategic Report Annual Report 2024 39 Atalaya Mining Copper, S.A. Income Statement The following table presents a summarised consolidated income statement for the three and twelve month periods ended 31 December 2024 and 31 December 2023. Financial Review 01. Strategic Report Annual Report 2024 (Euro 000’s) Three month ended 31 Dec 2024 Three month ended 31 Dec 2023 Twelve month ended 31 Dec 2024 Twelve month ended 31 Dec 2023 Revenues from operations 77,852 85,591 326,797 340,346 Cost of sales (59,598) (65,038) (242,163) (247,290) Corporate expenses (1,833) (4,713) (7,927) (12,741) Exploration expenses (4,637) (1,311) (7,950) (6,467) Care and maintenance expenditure 1,269 (1,199) (2,784) (2,384) Other income (373) 558 383 1,636 EBITDA 12,680 13,888 66,356 73,100 Depreciation/amortisation (10,625) (10,635) (43,565) (37,800) Net Impairment reversals on Assets7 5,744 - 5,744 - Net foreign exchange gain/(loss) 2,532 (2,038) 3,090 (1,278) Net finance income/(cost) 553 (422) (102) 2,071 Tax 4,038 4,422 1,037 570 Profit for the year 14,922 5,215 32,560 36,663 (7) Includes reversal of prior Touro impairment. Refer to Note 14. Three months financial review Revenues for Q4 2024 amounted to €77.9 million, down from €85.6 million in Q4 2023. The decline was primarily due to lower concentrate sales volumes and concentrate grades. Realised copper prices, excluding QPs, were US$4.10/lb in Q4 2024, compared with US$3.78/lb in Q4 2023. Including QPs, the realised price was approximately US$4.15/lb. Copper contained in concentrates sold was 10,271 tonnes in Q4 2024 and 12,928 tonnes in FY2023. Cost of sales for Q4 2024 totalled €59.6 million, compared to €65.0 million in Q4 2023. The decrease was mainly due to a higher volume of concentrate stock at the end of the period. Cash costs stood at US$2.79/lb payable copper, down from US$2.90/lb in the prior-year quarter, benefiting from silver credits despite lower copper payable. All-in Sustaining Costs (AISC) for Q4 2024, excluding investments in the tail ings dam, were US$3.28/lb payable copper, compared with US$3.16/lb in Q4 2023. The increase was mainly due to higher capitalised stripping costs. 01. Strategic Report Annual Report 2024 40 Atalaya Mining Copper, S.A. Cost of sales for FY 2024 amounted to €242.2 million, down from €247.3 million in 2023. The reduction in costs was mainly due to a positive impact from a higher year-end copper concentrate inventories despite of higher input costs. Cash costs for FY 2024 were US$2.92/lb payable copper, up from US$2.79/lb in 2023, mainly due to lower copper production. However, higher silver by-product credits helped offset part of the impact. AISC, excluding investment in the tailings dam, stood at US$3.26/lb payable copper in FY 2024, compared to US$3.09/lb in FY 2023, with the increase driven by higher capitalised stripping costs and corporate expenses. Sustaining capex for the twelve- month period ended 31 December 2024 totalled €4.0 million, compared with €3.4 million in FY 2023, mainly for plant processing system upgrades. Investment in the tailings dam expan sion was €14.8 million, compared with €13.7 million in 2023. The 50 MW solar plant construction capex amounted to €8.4 million in FY 2024, San Dionisio area €25.7 million, Capitalised strip ping costs for Cerro Colorado €9.9 million while investments in the E-LIX Phase I plant totalled €12.4 million, of which €5.3 million was booked as a loan to Lain Technologies Ltd, €2.1 million to PPE and €5.0m as prepay ments for service contracts. Corporate expenses for FY 2024 amounted to €7.9 million, down from €12.7 million in FY 2023, reflecting lower overhead costs. Exploration expenses for the year totalled €7.9 million, compared with €6.5 million in 2023, with major exploration work carried out at Proyecto Masa Valverde and Riotinto. EBITDA for FY 2024 was €66.4 million, down from €73.1 million in FY 2023. Depreciation and amortisation for the year amounted to €43.6 million, compared with €37.8 million in 2023. Net impairment reversals for FY 2024 were €5.7 million, compared with zero in FY 2023. The net foreign exchange gain for FY 2024 was €3.1 million, compared with a loss of €1.3 million in FY 2023. Net finance costs for FY 2024 amounted to negative €0.1 million, compared with €2.1 million in FY 2023. Profit after tax for FY 2024 was €32.6 million, down from €36.7 million in FY 2023. Tax expenses amounted to €1.0 million, compared to €0.6 million in 2023. Earnings per share for FY 2024 was 22.6 cents, compared with 27.7 cents in FY 2023. Diluted EPS was 21.8 cents, down from 26.9 cents in the prior year. Revenues for FY 2024 totalled €326.8 million, compared with €340.3 million in FY 2023. The decrease was mainly due to lower concentrate sales volumes and concentrate grades, partially offset by higher realised prices. Copper concentrate production for FY 2024 was 252,165 tonnes, up from 249,321 tonnes in FY 2023, while sales totalled 237,072 tonnes, down from 246,128 tonnes in the previous year. Inventories of concentrates at year-end stood at 21,815 tonnes, compared with 6,722 tonnes at 31 December 2023. Copper contained in concentrates sold was 43,609 tonnes in FY 2024 and 50,808 tonnes in FY2023. Realised copper prices, excluding QPs, averaged US$4.19/lb in FY 2024, compared with US$3.80/lb in FY 2023. The Company did not enter into any hedging agreements during 2024. Sustaining capex for Q4 2024 amounted to €0.4 million, compared with €0.5 million in Q4 2023, primarily related to plant processing system improvements. Investment in the tailings dam project during Q4 2024 was €4.0 million, €3.4 million in Q4 2023. Capitalised stripping costs for Cerro Colorado for Q4 2024 were €6.2 million, higher than previous year (€2.0 million). The 50 MW solar plant construction capex totalled €2.9 million in Q4 2024. Corporate expenses for Q4 2024 totalled €1.8 million, compared with €4.7 million in Q4 2023. These expenses include non-operating costs of the Cyprus office, corporate legal and consultancy fees, listing costs, and salaries for corporate officers and directors. Exploration expenses for the three-month period ended 31 December 2024 were €4.6 million, compared to €1.3 million in Q4 2023. EBITDA for Q4 2024 amounted to €12.7 million, down from €13.9 million in Q4 2023. Depreciation and amorti sation remained stable at €10.6 million in both periods. Net foreign exchange gains in Q4 2024 were €2.5 million, compared with a loss of €2.0 million in Q4 2023. Net financing income in Q4 2024 were a positive €0.6 million, compared with a loss of €0.4 million in the prior-year quarter. Twelve months financial review Three months financial review 01. Strategic Report Annual Report 2024 41 Atalaya Mining Copper, S.A. Assets Liabilities Financial Position (Euro 000’s) 31 Dec 2024 31 Dec 2023 ASSETS Non-current assets 531,306 473,221 Other current assets 91,400 76,241 Tax refundable 266 100 Cash and cash equivalents 52,878 121,007 Total Assets 675,850 670,569 Shareholders’ Equity 518,537 492,392 LIABILITIES Non-current liabilities 57,497 49,447 Current liabilities 99,816 128,730 Total Liabilities 157,313 178,177 Total Equity and Liabilities 675,850 670,569 As of 31 December 2024, total assets amounted to €675.9 million, up from €670.6 million on 31 December 2023, representing an increase of €5.2 million. This increase is mainly driven by the growth in property, plant, and equipment, intangible assets, and trade receivables, partially offset by the reduction in cash and cash equivalents. The decrease in cash and cash equivalents is primarily due to increased investing activities, divi dend payments, and loan repayments. Non-current assets as of 31 December 2024 amounted to €531.3 million compared to €473.2 million in 2023. This includes property, plant, and equipment of €409.0 million in 2024, increasing from €384.7 million in 2023, intangible assets of €70.2 million in 2024 compared to €49.4 million in 2023, non-current trade and other receivables amounting to €35.9 million in 2024, up from €26.7 million in 2023, non-current financial assets remaining stable at €1.1 million, and deferred tax assets of €15.1 million, increasing from €11.3 million in 2023. Current assets as of 31 December 2024 amounted to €144.5 million, decreasing from €197.3 million in 2023. Within this category, inventories increased significantly to €49.2 million from €33.3 million in 2023, while trade and other receivables remained stable at €36.9 million compared to €42.9 million in 2023. Tax refundable increased to €0.3 million from €0.1 million in 2023. Other financial assets were slightly reduced to €0.02 million from €0.03 million in 2023. Cash and cash equivalents significantly declined to €52.9 million, down from €121.0 million in 2023, mainly due to investing and financing activities. The most notable change in current assets was the substantial decrease in cash and cash equivalents, offset partially by the increase in inventories, reflecting a buildup of spare parts and unsold concentrates in stockpile. Non-current liabilities amounted to €57.5 million, increasing from €49.4 million in 2023. The most significant component of non-current liabil ities are provisions, which stood at €29.3 million in 2024, up from €27.2 million in 2023. In addition to the provision, non-current liabilities included borrowings of €10.9 million, a decrease from €16.1 million in 2023, lease liabilities of €3.3 million, down from €3.9 million in 2023, and trade and other payables amounting to €14.0 million, increasing from €2.2 million in 2023. Current liabilities as of 31 December 2024 stood at €99.8 million, compared to €128.7 million in 2023. This includes borrowings of €6.9 million, a significant decrease from €50.6 million in 2023, trade and other payables of €90.1 million, up from €75.9 million in 2023, current tax liabil ities of €1.4 million, increasing from €1.3 million in 2023, current provi sions of €0.9 million, up from €0.4 million in 2023, and lease liabilities of €0.5 million, which remained stable compared to €0.5 million in 2023. Results The Group’s and Company´s consol idated results are set out on the Consolidated Statements of Compre hensive Income. Total liabilities decreased to €157.3 million from €178.2 million in 2023, mainly due to the reduction in borrowings. Total equity as of 31 December 2024 amounted to €518.5 million, up from €492.4 million in 2023, reflecting an increase of €26.1 million. Share capital stood at €12.7 million, decreasing from €13.6 million in 2023, while share premium increased to €321.9 million from €319.4 million in 2023. Other reserves rose significantly to €88.8 million from €70.5 million in 2023. Accumulated profit stood at €93.1 million, down from €98.0 million in 2023. Non-controlling interests amounted to €2.2 million, compared to €(9.1) million in 2023. Overall, total equity and liabilities as of 31 December 2024 stood at €675.9 million, marking an increase from €670.6 million in the previous year. 01. Strategic Report Annual Report 2024 42 Atalaya Mining Copper, S.A. Liquidity and Capital Resources Unrestricted cash and cash equivalents as at 31 December 2024 decreased to €52.9 million from €121.0 million at 31 December 2023. The decrease in cash balances is primarily due to cash outflows during 2024, mainly related to financing and investing activities. Cash balances are unrestricted and include balances at both the operational and corporate levels. The net decrease in cash and cash equivalents for the year was €68.1 million, compared to a decrease of €4.2 million in 2023. This decline was driven by increased capital expenditures, net debt repayments, and dividend payments. As of 31 December 2024, Atalaya reported a working capital surplus of €44.7 million, compared with a working capital surplus of €68.6 million at 31 December 2023. The decrease in working capital surplus in 2024 was mainly (Euro 000’s) 31 Dec 2024 31 Dec 2023 Unrestricted cash and cash equivalents at Group level 43,184 94,868 Unrestricted cash and cash equivalents at Operation level 9,694 26,139 Consolidated cash and cash equivalents 52,878 121,007 Net cash position 35,091 54,320 Working capital surplus 44,728 68,618 (Euro 000’s) Twelve month ended 31 Dec 2024 Twelve month ended 31 Dec 2023 Cash flows from operating activities 53,403 64,743 Cash flows used in investing activities (66,073) (50,406) Cash flows from financing activities (57,261) (18,500) Net (decreased)/increase in cash and cash equivalents (69,931) (4,163) Net foreign exchange differences 1,802 (1,278) Total net cash flow for the period (68,129) (5,441) driven by changes in current liabilities and cash balances. Cash decreased significantly compared to the previous year, reflecting higher investments in property, plant, and equipment, as well as the repayment of borrowings and payment of dividends. At 31 December 2024, trade and other payables increased to €90.1 million, up from €75.9 million in 2023, while inventories also increased to €49.2 million from €33.3 million in the prior year. Trade and other receivables remained relatively stable at €36.9 million in 2024, compared to €42.9 million in 2023. The Directors consider the 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 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 2024 and 2023, and cash flows for the twelve months ended 31 December 2024 and 2023. Liquidity Information 01. Strategic Report Annual Report 2024 43 Atalaya Mining Copper, S.A. Main stock market indicators 2024 2023 Shareholder remuneration ($/share) [0.07]8 0.09 Share price at end of period (£/share) 3.59 3.61 Period average share price (£/share) 3.78 3.33 Period high share price (£/share) 4.86 3.80 Period low share price (£/share) 3.09 2.86 Number of shares outstanding at the end of the period 140,759,043 139,879,209 Market capitalisation at the end of period (£ million) 505.3 505.0 Dividend yield (%) [1.6]8 2.0 In the twelve-month period ending 31 December 2024, cash and cash equivalents experienced a decrease of €69.9 million. This reduction resulted from cash generated by operating activities amounting to €53.4 million, offset by cash used in investing activities totalling €66.1 million and financing outflows amounting to €57.3 million, partially mitigated by a €1.8 million net positive foreign exchange impact. Cash generated from operating activities before changes in working capital reached €66.4 million, compared with an EBITDA of €67.0 million. Atalaya increased its inventories by €15.0 million, while trade and other receivables decreased by €1.2 million, and trade and other payables increased by €5.6 million. The company incurred corporate tax payments totalling €0.8 million during this period. Investing activities for the year 2024 amounted to €66.1 million, primarily directed towards capital expenditures related to ongoing projects, including plant improvements and infrastructure developments. Financing activities in 2024 totalled negative €57.3 million, mainly driven by the repayment of borrowings amounting to €51.9 million, dividend payments of €10.3 million, and lease payments of €0.6 million, partially offset by proceeds from the issuance of share capital totalling €2.5 million and new borrowings of €3.0 million. Dividends Atalaya has a dividend policy that seeks to provide capital returns to its shareholders and allows for continued investments in the Company’s portfolio of growth projects. Dividends are payable in two half-yearly instalments. Dividends related to fiscal year 2023 In August 2023, a 2023 interim dividend of US$0.05 per ordinary share was declared by Atalaya’s Board of Directors. In March 2024, the Board of Directors proposed a 2023 final dividend of US$0.04 per ordinary share. The 2023 final dividend was approved by the Company’s shareholders at its 2024 Annual General Meeting, and paid on 9 August 2024 (Note 12). Dividends related to fiscal year 2024 In August 2024, the Company’s Board of Directors declared a 2024 interim dividend of US$0.04 per ordinary share, which was paid on 19 September 2024. A 2024 final dividend of US$0.03 per share has been proposed for approval by shareholders at the 2025 Annual General Meeting. This would result in a total dividend in respect of 2024 of US$0.07 per share. Our share price Atalaya’s share price was effectively unchanged for 2024, beginning the year at £3.61 and ending the year at £3.59, representing a modest decrease of 0.6%. The Group’s main stock market indicators in 2024 and 2023 were as follows: (8) Estimated assuming the 2024 final dividend proposed by the Board of Directors is approved by the Shareholders meeting in June 2025. The Directors consider the 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. 01. Strategic Report Annual Report 2024 01. Strategic Report Annual Report 2024 44 Atalaya Mining Copper, S.A. Creditors’ Payment Terms Atalaya recognises its responsibilities to its supply chain partners and accepts the requirement to settle supplier payments on time. Accordingly, the Company undertakes to: »» Pay suppliers on time by paying 95% of invoices within the agreed payment terms and without attempting to change terms retrospectively. We also aim to pay 95% of all invoices within 60 days, and 95% of invoices from businesses with fewer than 50 employees within 30 days. »» Give clear guidance to suppliers by making readily available clear guidance on payment procedures and invoicing. »» At on-boarding stage and on an ongoing basis, notify suppliers if there is any reason why an invoice may not be paid to the agreed terms of their contract. »» Inform suppliers of how they can raise complaints and disputes and provide suppliers with a point of contact for payment queries. »» Adopt and encourage good practice by confirming that lead suppliers have adopted good practice throughout their own supply chains. »» Avoid any practices that adversely affect the supply chain. The Company’s standard payment terms are 60 days for large enterprises and 30 days for small enterprises. Treasury shares As at 31 December 2024 and at the date of this report, the Company held nil (2023: nil) ordinary shares as treasury shares. Twelve months ended 31 Dec 2024 Twelve months ended 31 Dec 2023 Average rates for the periods GBP – EUR 0.8587 0.8698 USD – EUR 1.091 1.0813 Spot rates as at GBP – EUR 0.8292 0.8691 USD – EUR 1.039 1.105 Foreign Exchange In FY2024, Atalaya recognised a foreign exchange gain of €3.1 million (FY2023 loss: €1.3 million). The foreign exchange gain mainly related to variances in EUR and USD conversion rates during the period as all sales are settled and occasion ally held in USD. The following table summarises the movement in key currencies versus the EUR: During 2024 and 2023, Atalaya did not have any currency hedging agreements. Annual Report 2024 01. Strategic Report Annual Report 2024 45 Atalaya Mining Copper, S.A. Basis of Reporting Introduction This report provides an overview and analysis of the financial results of oper ations of Atalaya Mining Copper, S.A. (the “Company”) and its subsidiaries (the “Group”). It is intended to enable readers to assess material changes in the Group’s financial position between 31 December 2023 and 31 December 2024, as well as to evaluate the results of operations for the twelve-month periods ended 31 December 2023 and 31 December 2024. Annual Report 2024 01. Strategic Report The Board of Directors of Atalaya Mining Copper, S.A. (the “Company” or “Atalaya”) presents its Group’s Management Report with the audited consolidated financial statements (hereinafter “financial statements”) of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2024. These documents can be found on the Atalaya website at www.atalayamining.com. Atalaya is a Spanish company that owns and operates the Proyecto Riotinto complex in southwest Spain. The Company’s shares trade on the London Stock Exchange’s Main Market under the symbol “ATYM”. The consolidated financial statements of the Company have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), in compliance with the requirements of Spanish corpo rate law, including the provisions of the Commercial Code and the Capital Compa nies Act (Ley de Sociedades de Capital). For the financial year ending 31 December 2024, IFRS as adopted by the EU is fully aligned with IFRS as issued by the International Accounting Standards Board (IASB). The financial statements are presented in Euros (EUR), unless otherwise specified. 01. Strategic Report Annual Report 2024 46 Atalaya Mining Copper, S.A. Forward Looking Statements This report may include certain “forward-looking statements” and “forward-looking information” appli cable under securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking state ments. Forward-looking statements are frequently characterised by words such as “plan”, “expect”, “project”, “intend”, “believe”, “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 state ments 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 state ments, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ mate rially from those anticipated in such statements. Atalaya undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reli ance on forward-looking statements. Alternative Performance Measures Atalaya has included certain non-IFRS measures including “EBITDA”, “Cash Cost per pound of payable copper” “All-In Sustaining Cost” (“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 meas ures presented by other companies. These measures are intended to provide additional information and should not be considered in isola tion 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. Critical accounting policies, estimates, judgements, assumptions and accounting changes 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 cash cost. AISC per pound of payable copper includes the Cash Cost plus royalties and agency fees, expenditure on rehabilitations, stripping costs, explo ration and geology costs, corpo rate 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. Real ised price is consistent with the widely accepted industry standard definition. The preparation of Atalaya’s Financial Statements in accordance with IFRS requires management to made 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 2024 (Note 3.3). 01. Strategic Report Annual Report 2024 47 Atalaya Mining Copper, S.A. Statement of Going Concern Energy Market and Cost Stability. Although Atalaya has mitigated some exposure to electricity price volatility through the commissioning of a 50 MW Solar Plant at Proyecto Riotinto, external factors such as grid reliability, regulatory changes, and energy tariffs could still impact costs, and a 10-year PPA, securing predictable electricity costs and reducing exposure to market price volatility Regulatory and Environmental Compliance. Evolving EU and Spanish environmental regulations, including sustainability reporting requirements and carbon pricing mechanisms, may lead to increased compliance and operational costs. Foreign Exchange Risk (USD: EUR). As copper sales are denominated in USD, while a significant portion of operating costs is in EUR, fluctuations in the USD: EUR exchange rate could impact finan cial performance. Copper Head Grade Sensitivity. Variability in ore quality could lead to fluctuations in copper head grade, affecting production efficiency, revenues, and operating margins. The Group has conducted sensitivity anal yses to assess its resilience to potential declines in head grade and has implemented strategies to optimise resource extraction and processing. Based on their assessment of the Group’s prospects and viability, the Directors have formed a judgement, at the time of approving the financial statements, that there are no material uncertainties that the Directors are aware of that could reasonably be expected to cast doubt on the Group’s going concern status and that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the period to 31 December 2024. The Directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements. The Directors considered the Group’s current strong financial position, its forecast future performance, the key risks which could impact the future results and reviewed robust down-side sensitivity analyses which all indicated results that could be managed in the normal course of business. and the terms and remaining durations of the borrowing facilities in place. The Group had a strong financial position as at 31 December 2024, with combined cash and cash equivalents of €52.9 million. Total borrowings were €17.8 million, resulting in a net cash position of €35.1 million. Of the total borrowings, €6.9 million are repayable within one year, and €10.9 million are repayable between one to five years. When assessing the going concern status of the Group, the Directors have considered various factors, impacting 2025 including: Copper price and foreign exchange forecasts, given their direct impact on revenue and profitability; expected production levels and the operating cost profile, ensuring that cost structures remain competitive; capital expenditure plans and ongoing development projects, particularly those critical to sustaining operations. These forecasts are based on the Group’s budgets and life-of-mine models, which are also used to determine key accounting estimates, including depreciation, deferred stripping, and closure provisions. The assessment focuses on the Group’s existing asset base without factoring in potential new projects, ensuring a conservative approach when evaluating resilience in a potentially depressed economic environment. The analysis includes only the draw- down of existing committed borrowing facilities and assumes no new debt financing arrangements. The Directors have assessed key risks that could impact the Group’s financial stability, with the most significant risks being: Copper Price Volatility. Copper market fluctuations can materially impact earn ings and cash flow generation. Geopolitical and Supply Chain Risks. Ongoing global trade tensions, logis tical bottlenecks, and freight cost vola tility pose risks to material availability and operational continuity. In response, the Group has diversified procurement strategies and enhanced supply chain monitoring. These audited consolidated financial statements have been prepared based on accounting principles applicable to a going concern which assumes that the Group can reasonably be expected to realise its assets and discharge its liabilities in the normal course of business. Management has carried out an assessment of the going concern assumption and has concluded that the Group will generate sufficient cash and cash equivalents to continue oper ating for the next twelve months. 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 associ ated uncertainties to the Group’s oper ations for a period of at least 12 months since the approval of these audited consolidated financial statements 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)). The Directors have assessed the going concern status of the Group, consid ering the period to 31 December 2024. Management continues to monitor the impact of geopolitical develop ments. Currently no significant impact is expected in the operations of the Group. The Group’s business activities, together with those factors likely to affect its future performance, are set out in the Strategic Report, and in particular within the Operating Review. Details of the cash flows of the Group during the period, along with its financial position at the period end, are set out in the Financial Review. The consolidated financial statements include details of the Group’s cash and cash equivalents Note 21, and details of borrowings are set out in Note 28. When assessing the going concern status of the Group, the Directors have considered in particular its financial position, including its significant balance of cash and cash equivalents 01. Strategic Report Annual Report 2024 48 Atalaya Mining Copper, S.A. Sustainability Approach Atalaya is committed to sustainable development and responsible mining, ensuring that environmental, social, and governance (ESG) considerations are embedded in every aspect of its operations. The company recognises that long-term value creation depends not only on operational excellence but also on its ability to manage resources responsibly, support local communities, and maintain strong governance structures. In 2024, Atalaya continued to advance its sustainability agenda, achieving key milestones in environmental management, fostering social progress, and adopting innovative technologies to reduce its environmental footprint. 01. Strategic Report Environmental Stewardship Environmental protection and responsible resource management are central to Atalaya’s sustainability approach. The company prioritises reducing its environmental impact through efficient use of energy and water, minimising emissions, and ensuring compliance with regulatory requirements. 01. Strategic Report Annual Report 2024 49 Atalaya Mining Copper, S.A. (*) Our 2024 carbon footprint is an estimate using 2023 emission factors at the time of publication. 01. Strategic Report Annual Report 2024 The company prioritises reducing its environmental impact through efficient use of energy and water, minimising emissions, and ensuring compliance with regulatory requirements. Key environmental achievements in 2024: → →In 2024, 81% of total water used at Proyecto Riotinto to obtain copper concentrate was recycled. Further more, just 12% of our total consumption was drawn from surface sources outside the mine, down from 19.6% in 2021. (Sustainability Report section: Water Management). → →Our solar plant is now operating (Sustainability Report section: Energy and Climate Change). → →Achieved a reduction in our electricity intensity, 22.66KWh/tonne ore processed vs 23.29 in 2023 (Sustainability Report section: Energy and Climate Change). → →Pending final data verification, we observe a 4% reduction in scope 1&2 CO2 emissions: 98,447t of CO2e Scope 1 & 2* (vs 102,423.47 in 2023 (Sustainability Report section: Energy and Climate Change). → →Advanced biodiversity conservation efforts: in 2024 we created a new specialized bat refuge at Proyecto Riotinto, in collaboration with -scientist organisations (Sustainability Report section: Nature and Biodiversity). → →We have continued to restore the brownfield mining sites (Touro and Riotinto), inherited from prior mining activities (Sustainability Report section: Management of historic environmental liabilities). Looking ahead, Atalaya’s key environmental priorities for 2025 include: ↘↘ Solar plant expected to be fully operational. ↘↘ Continue to implement measures to reduce surface water withdrawal. ↘↘ Continue to implement Water Stewardship Standard ↘↘ Extend restoration work on areas affected by previous mining activity Implement ISO 5001 Energy management system. 01. Strategic Report Annual Report 2024 50 Atalaya Mining Copper, S.A. Social Responsibility Atalaya places great emphasis on fostering a positive social impact by supporting local communities, ensuring a safe and inclusive workplace, and contributing to regional socio-economic development. Key social goals for 2025 include: ↘↘ Implementing the actions according to Equal Plan approved in 2023, with specific targets in 2025. ↘↘ Expanding the scope of community engagement programmes to further support local socio-economic development. ↘↘ Enhancing occupational health and safety measures by adopting advanced monitoring systems and increasing VR training. Governance and Compliance Strong governance is the foundation of Atalaya’s sustainable growth. In 2024, the Company strengthened its governance framework to ensure robust oversight of ESG matters and enhanced transparency in reporting. Key social initiatives and achievements in 2024: → →Increased female workforce participation through targeted recruitment and leadership development programmes (Sustainability Report section: Workforce Diversity). → →Enhanced community engagement by supporting education, healthcare, and infrastructure development in nearby communities. Several projects, including scholarships and health initiatives, were launched in 2024 (Sustainability Report section: Community Engagement). → →Strengthened occupational health and safety proto cols, resulting in a lower Lost Time Injury Frequency Rate (LTIFR) compared to 2023. The company also expanded the use of virtual reality (VR) training for hazard identifica tion and response (Sustainability Report section: Health and Safety). Key governance initiatives in 2024: → →We started compiling the necessary data to align with EU Corporate Sustainability Reporting Directive (CSRD) (Sustainability Report section: Our approach to sustainability). → →We continued work on the Global Industry Standard on Tailings Management (GISTM) (Sustainability Report section: Our approach to sustainability). → →We completed board training on new European Union ESG regulatory requirements as a listed company on the LSE. (Sustainability Report section: Our approach to sustainability). Governance priorities for 2025 include: ↘↘ Continue the work begun to align our reporting with CSRD requirements. ↘↘ Strengthening internal ESG risk management and enhancing stakeholder engagement on sustainability matters. ↘↘ Continuing to integrate ESG considerations into stra tegic decision-making processes. 01. Strategic Report Annual Report 2024 51 Atalaya Mining Copper, S.A. Innovation and Technology Innovation plays a critical role in Atalaya’s sustainability strategy. The company invests in advanced technologies to improve operational efficiency, reduce environmental impact, and enhance safety. Outlook for 2025 As Atalaya moves forward, the company remains committed to driving sustainability across all its operations. With clear goals for environmental stewardship, social responsibility, governance, and innovation, Atalaya aims to create long-term value for its stakeholders while minimising its environmental footprint and contributing to regional socio-economic progress. In 2025, Atalaya will focus on: ↘↘ Meeting its sustainability targets and aligning with CSRD requirements. ↘↘ Enhancing community engagement and workforce development initiatives. ↘↘ Leveraging innovation to improve operational efficiency and reduce environmental impact. ↘↘ Atalaya’s sustainability journey is a continuous process, driven by a commitment to responsible mining and a vision for a more sustainable future. Key innovation advancements in 2024: → →Strategy for efficient water consumption developed, aimed at closing water cycles within the process and searching for alternative water sources. (Sustainability Report section: Innovation and Technology) → →Continued process improvement, with focus on energy efficiency and production optimisa tion. (Sustainability Report section: Innovation and Technology) → →Conducted several studies to process complex polymetallic ores with different international labora tories. (Sustainability Report section: Innovation and Technology) Innovation goals for 2025 include: ↘↘ Innovation in treatment of acidic waters (Sustainability Report section: Innovation and Technology). ↘↘ Continue to expand external innovation and research collaborations (Sustainability Report section: Innovation and Technology). Key technological Achievements in 2024 → →We have continued migrating our ERP to the new cloud version. (Sustainability Report section: Innovation and Technology). → →An external audit of our cybersecurity processes has been conducted. (Sustainability Report section: Innova tion and Technology). → →A Security Information and Event Management (SIEM) service has been contracted for external 24-hour moni toring of cybersecurity events. (Sustainability Report section: Innovation and Technology). Technological goals for 2025 include: ↘↘ Complete the process of migrating our Dynamics 365 to the cloud. ↘↘ Document all company cyber security policies and the IT Security Master Plan. ↘↘ Implement new IT security systems, including AI-con trolled Network Detection and Response (NDR). ↘↘ Implement more robust blocking systems for ransom ware attacks and implement anti-ransomware systems. 01. Strategic Report Annual Report 2024 52 Atalaya Mining Copper, S.A. Disclosure Page Nº Governance Board oversight Our board is ultimately responsible for the proper management of climate change, setting the objectives and supervising the implementation and fulfilment of the actions established in the sustainability strategy, which include climate change indicators and goals, through the Sustainability Committee. 9-10 Management’s role Our sustainability/ESG management and finance department is responsible for executing all initiatives related to climate change, especially in terms of climate-related risks and opportunities. 9-10 Strategy Climate-related risks and opportunities The climate-related risk assessment was performed in 2023 using 2022 data as a baseline year. This included scenario analysis to assess the real and potential financial impact of the main risks and opportunities. 11-12 Impact on Atalaya Several physical and transition risks with a moderate to high impact on Atalaya’s business have influenced strategy and financial planning. 13-15 Resilience Different scenarios have been used to assess risks and opportunities, considering global temperature increase of less and more than 2ºC. Two different time horizons were used for the analysis: medium (2030) and long-term (2050). 13-15 Risk Management Risk identification and assessment The risk assessment considers 9 hazards in identifying the physical risks. In identifying the transition risks, the TCFD transition categories were considered. 13-15 Risk management Mitigation measures have been established for the climate-related risks identified as material, and these are consistently monitored to control impacts. 13-15 Integration of risk management The management team assess and manage climate-related risks and opportunities systematically within operations as part of our recurrent risk management process. Climate-related risks have been integrated into overall risk management by the Physical Risk Committee. 13-15 Metrics and Targets Climate-related metrics Proyecto Riotinto annually assesses greenhouse gas (GHG) emissions, energy consumption and water consumption, among other relevant environmental KPIs. We will continue to evaluate other relevant metrics as we analyse the results of the climate risk assessment and implement actions stemming from our climate change strategy. 16-24 Scope 1, Scope 2, and Scope 3 We report Scope 1, 2 and 3 emissions at Proyecto Riotinto, our only mine in operation. The GHG inventory is verified annually by an independent third-party against GHG Protocol 16-24 Climate-related targets The board of directors approved our climate change goals for Proyecto Riotinto in November 2023, published on our website. In 2025 we revised our climate goals, approved by our leadership team and the Sustainability Committee in March 2025. 16-24 Atalaya is committed to transparent and comprehensive reporting on climate-related risks and opportunities. UK Listing Rule LR 6.6.6(8) requires us to disclose whether our climate-related financial disclosures are consistent with the recommendations of TCFD. We confirm that we have made disclosures in line with the TCFD recommendations. To provide a comprehensive and detailed assessment of climate-related risks and oppor tunities, we have presented our full TCFD disclosures in a dedicated Climate Change Report which is available on our website at www.atalayamining.com. That standalone report provides a detailed assessment of the climate-related risks, governance structures, strategy, risk management, and metrics and targets relevant to our business. We believe that a standalone report allows us to present climate-re lated financial information in a manner that reflects its increasing importance and provides stakeholders with a focused, in-depth analysis of our approach to climate risk and transition planning. Information related to the required disclosures can be found on the following pages of the Climate Change Report: Task Force on Climate-related Financial Disclosures (TCFD) Reporting 01. Strategic Report Annual Report 2024 01. Strategic Report Annual Report 2024 53 Atalaya Mining Copper, S.A. Non-Financial Information Statement The Non-Financial Information Statement has been prepared in accordance with the requirements of Spanish Law 11/2018, of 28 December, on non-financial and diversity information (amending the Commercial Code, the revised text of the Capital Companies Act approved by Royal Legislative Decree 1/2010 of 2 July, and Law 22/2015 of 20 July on Auditing). This statement aims to provide stakeholders with relevant information on the Group’s environmental, social, and governance performance. For a comprehensive overview of Atalaya’s ESG performance, including envi ronmental initiatives, social impact, employee relations, human rights policies, and anti-corruption measures, please refer to the Atalaya Sustainability Report 2024, which is published separately and provides detailed disclosures aligned with international reporting standards such as the Global Reporting Initiative (GRI) standards. Atalaya remains committed to responsible mining, sustainable growth, and transparent communication with stakeholders, ensuring that ESG considerations are integrated into its business strategy to enhance long-term resilience and sustainability. 01. Strategic Report Annual Report 2024 02. Governance Annual Report 2024 54 Atalaya Mining Copper, S.A. 02 Governance 02. Governance Board of Directors..................................................................... 55 Senior Management. ................................................................. 59 Governance Introduction.......................................................... 60 UK Corporate Governance Code 2018 – Compliance Statement............................................................. 62 Board Leadership and Company Purpose............................... 63 Division of Responsibilities........................................................ 66 Composition, Succession and Evaluation................................. 71 Audit, Risk and Internal Control..................................................75 Remuneration............................................................................. 86 Directors’ Report. .................................................................... 104 Directors’ Responsibility Statement....................................... 107 02. Governance Annual Report 2024 55 Atalaya Mining Copper, S.A. Neil Gregson Chair Kate Harcourt Senior Independent Director Board of Directors 02. Governance Annual Report 2024 Board independence: Independent on appointment Appointed: 10 February 2021 (Chair since 1 July 2024) Key skills: Mining, corporate finance, finance, UK Market, capital markets, international business, leadership, strategic, fund raising, M&A communications, sustainability Education and qualifications: έέ B.Sc. (Hons) in Mining Engineering from the University of Nottingham έέ Diploma in Business Management from Damelin College, Johannesburg έέ Mine Managers Certificate of Competency, South Africa Board independence: Independent Appointed: 17 May 2022 (SID since 1 July 2024) Key skills: Mining, sustainability, health, safety, environment Education and qualifications: έέ B.Sc. (Hons) in Environmental Science from the University of Sheffield έέ M.Sc. in Environmental Technology from Imperial College, London έέ Chartered Environmentalist (CEnv) έέ Member of the Institution of Environmental Scientists Previous experience: Mr. Gregson has over 30 years of experience investing in mining and oil and gas companies. From 2010 to 2020, he was a Managing Director at J.P. Morgan Asset Management, where he was a member of the equity team and a portfolio manager investing in mining and energy companies globally. Previously, from 1990 to 2009, he was Head of Emerging Markets and Related Sector Funds (including natural resources funds) at Credit Suisse Asset Management. Prior to that, Mr. Gregson held various positions in mining companies, including a role as mining investment analyst with Gold Fields of South Africa. Current external appointments: έέ Independent Director of TSX-listed Meridian Mining UK Societas έέ Non-executive Director of TSX-listed Uranium Royalty Corp Committee membership: NGC (Chair) ~ RC ~ PRC Previous experience: Mrs. Harcourt has extensive experience as an independent sustainability consultant, including ESG Officer and ESG Adviser, at a range of UK-linked mining companies, including Cornish Lithium and Adriatic Metals, and has participated in several due diligence projects for mining assets as part of a multidisciplinary team. Prior to 2010, was Director of Health, Safety, Environment, Communities and Security at Mag Industries, Senior Environmental Scientist at Golder Associates (UK) Ltd, Senior Environmental Scientist at Wardell Armstrong and Environmental Scientist at SRK (UK) Ltd. Current external appointments: έέ Independent Director of TSX-listed Fortuna Mining Corp έέ Director of TSX-listed Orezone Gold Corporation Committee membership: SC (Chair) ~ NGC ~ RC Annual Report 2024 02. Governance Annual Report 2024 56 Atalaya Mining Copper, S.A. Hussein Barma Non-executive Director Board independence: Independent (see page 68 for an explanation as to how the Board has determined this) Appointed: 9 September 2015 Key skills: Mining, corporate finance, finance and accounting, legal, UK Market, capital market, international business, leadership, strategic, fund raising, M&A communications, sustainability Education and qualifications: έέ Fellow of the Institute of Chartered Accountants in England and Wales έέ Non-practising barrister and member of the Middle Temple έέ D.Phil. in corporate law from the University of Oxford. Previous experience: Dr. Barma is a chartered accountant and qualified lawyer by background with over 25 years’ experience in senior positions in the mining sector. He brings to Atalaya deep experience in accounting, internal control, governance, risk management, and compliance. He has significant FTSE-50 senior executive experience, gained over 15 years at Antofagasta plc, where he led its UK presence through a period of change and growth as the UK-based chief financial officer. He has also had earlier careers in professional services and academia. Current external appointments: έέ Non-executive director and audit committee chair of Fidelity Asian Values PLC έέ Independent governor and deputy audit chair of the University of the Arts, London έέ Principal at Barma Advisory Committee membership: RC (Chair) ~ AC ~ SC Alberto Lavandeira Managing Director and Chief Executive Officer Board independence: Non-independent Appointed: 14 April 2014 Key skills: Mining, operations, processing, exploration, commercial, capital market, international business, leadership, strategic, fund raising, M&A, governance, project management, permitting, government relations, CEO, sustainability Education and qualifications: έέ Degree in Mining Engineering from the University of Oviedo, Spain Previous experience: Mr. Lavandeira brings over 40 years of experience operating and developing mining projects. He was previously President, CEO and COO of Rio Narcea Gold Mines which built three mines including Aguablanca and El Vallés-Boinas in Spain and Tasiast in Mauritania. He was also involved in the key stages of development of the Mutanda mine in the Democratic Republic of Congo. Earlier in his career, Mr. Lavandeira worked within group companies of Anglo American, Rio Tinto and Cominco (now Teck). Current external appointments: έέ Non-executive director of ASX-listed Black Dragon Gold Corp έέ Non-executive director of ASX-listed Predictive Discovery Limited Committee membership: n/a Board of Directors 02. Governance Annual Report 2024 57 Atalaya Mining Copper, S.A. Jesús Fernández Non-executive Director Coriseo González-Izquierdo Non-executive Director Board independence: Non-independent Appointed: 23 June 2015 Key skills: M&A, Mining, capital markets, UK Markets, International business, corporate finance, finance and accounting, legal, leadership, strategic, fund raising Education and qualifications: έέ M.Sc. in Finance and Investment from the University of Exeter, UK έέ Licenciatura (Economics degree) from the Universidad de Cantabria, Spain Board independence: Independent Appointed: 14 January 2025 Key skills: Finance, geopolitics, international trade and economics, energy, government relations, accounting, human resources, governance, leadership, strategy, and sustainability Education and qualifications: έέ Master’s-equivalent degrees in Law and in Economic and Business Sciences from the Universidad Pontificia de Comillas – ICADE έέ Master’s Degree in Public Administration from Harvard University Previous experience: Mr. Fernández was Head of Mergers and Acquisitions for Trafigura. He joined Trafigura in 2004 and has extensive experience in mergers and acquisitions and providing financing solutions to mining companies. He established the Trafigura Group’s mining investment arm in 2005. Prior to joining Trafigura, he worked in the project finance team at International Power plc in London. Current external appointments: None Committee membership: PRC Previous experience: Ms.González-Izquierdo was Chief Executive Officer of ICEX – Spain Trade and Investment and has held a number of economic and commercial executive roles in Spain, Japan, West Africa, U.S.A., the Middle East, and China. She has also served as a director on the boards of Instituto de Crédito (the Spanish Government’s financial agency), CESCE (Spanish export credit agency), CDTI (Spanish agency for technology development) and HUNOSA (coal mining). Current external appointments: έέ Independent Director of Aena S.M.E., S.A., the Madrid- listed airports operator έέ Senior executive at OMIE (Operador del Mercardo Ibérico de la Energía), the Iberian electricity market operator Committee membership: PRC Board of Directors 02. Governance Annual Report 2024 58 Atalaya Mining Copper, S.A. Carole Whittall Non-executive Director Board independence: Independent Appointed: 3 June 2024 Key skills: Management, accounting, financing, banking and M&A in the mining industry Qualifications: έέ Bachelor of Science (B.Sc.) (Hons) in Geology from the University of Cape Town έέ Master of Business Administration (MBA) from the London Business School Previous experience: Ms. Whittall is a senior executive with over 25 years of experience in the natural resources sector across a broad range of functions including management, finance and M&A. She was Vice President, Head of M&A at ArcelorMittal Mining and a member of its Mining Executive Team, responsible for global M&A (including acquisitions, divestments, joint ventures and portfolio company management and restructuring), government relations and corporate and social responsibility. Previously she was at Rio Tinto where she held various senior commercial and business development roles. Her prior career was with JP Morgan. Current external appointments: έέ Executive Director and Chief Financial Officer of AIM-quoted Yellow Cake plc έέ Director and co-founder of Mining Strategies Limited, which provides M&A and transaction advisory services to the metals and mining sector Committee membership: AC (Chair), SC Stephen Scott Non-executive Director Board independence: Independent (see page 68 for a summary of how the Board has determined this) Appointed: 9 September 2015 Key skills: Mining, operations, processing, exploration, capital market, international business, leadership, strategic, fund raising, M&A, governance, project management, permitting, CEO Education and qualifications: έέ Bachelor of Business Accounting from Curtin University, Western Australia έέ Graduate Certificate in Corporate Secretarial Practices from Curtin University, Western Australia Previous experience: Mr. Scott has held various global executive positions with the Rio Tinto Group (2000-2014). Mr. Scott is an experienced public company director. Current external appointments: έέ President and CEO of Entree Resources Limited Committee membership: PRC (Chair) ~ AC ~ RC ~ NGC Board of Directors 02. Governance Annual Report 2024 59 Atalaya Mining Copper, S.A. Senior Management 02. Governance Annual Report 2024 Enrique Delgado General Manager of Proyecto Riotinto Appointed: May 2019 Skills: Mining, operations, processing, exploration, international business, leadership, strategic, governance, project management and permitting Education and qualifications: έέ Graduate of the University of Seville, Spain έέ Master of Senior Management of Leading Companies of the San Telmo International Institute of Sevilla, Spain έέ Vice-President of Aminer, the Spanish Base Metal Mining Association έέ Senior Management Programme at Instituto San Telmo, Seville, Spain Experience: Mr. Delgado’s previous roles include metallurgist in Riotinto Mine and later with Freeport McMoRan, at Atlantic Copper smelter in Huelva, Spain, CEO of Tharsis Mining and director of Metallurgy and Environment at Cobre Las Cruces Mine (First Quantum). With First Quantum he also participated in the start-up of Kansanshi Mine smelter in Zambia. César Sánchez Chief Financial Officer Appointed: June 2016 Skills: Mining, capital markets, Canada and UK Markets, international business, corporate finance, finance and accounting, legal, leadership, strategic, fund raising, M&A, governance Education and qualifications: έέ Degree in Business Administration from the University of Seville, Spain έέ Qualified Accountant έέ Financial and banking courses at Dublin City University and ESIC Business & Marketing School έέ Senior Management Programme (PADE) by IESE Business School Experience: Mr. Sánchez has experience as Chief Financial Officer of various companies in both the mining and financial industries, including Iberian Minerals Corp, where he participated in its equity and debt raisings and worked for Ernst & Young as an auditor and as a financial adviser to the industrial sector, where he gained experience in restructurings, initial public offerings, mergers and due diligence processes. Alberto Lavandeira Managing Director and Chief Executive Officer Appointed: April 2014 Skills and experience: See page 67 02. Governance Annual Report 2024 60 Atalaya Mining Copper, S.A. Introductory letter from Company Chair Governance Introduction In January this year we welcomed Coriseo González-Izquierdo to the Board. She is an accomplished executive with broad commercial and economic experience that will complement and enhance the skills of our existing Board. Hussein Barma, Chair of our Remuner ation Committee, and Stephen Scott, Chair of our Physical Risk Committee, have each served over nine years. I, together with my other Board colleagues, have carefully consid ered whether their independence has been impaired as a consequence of their extended tenure and we have concluded that it has not and that they remain independent and objective. Further details regarding how we have assessed their continued independ ence and reached our conclusion can be found on page 68. Hussein Barma has communicated his intention to step down from the Board no later than the forthcoming Annual General Meeting, having served on the Board since September 2015. Stephen Scott has also served on the Board for over nine years. At the request of the Board, he has agreed to defer his resignation until later in 2025 to preserve continuity. He will resign by no later than 31 December 2025. Dear Shareholder, On behalf of the Board, I am pleased to present the corporate govern ance report for the year ended 31 December 2024. The report summa rises the role of the Board in providing effective leadership to promote the long-term sustainable success of Atalaya. Governance highlights during 2024 This year marked a significant milestone for the Company as we transitioned from the AIM Market to the Main Market of the London Stock Exchange. With this move we have adopted the UK Corporate Governance Code 2018 in place of the Quoted Companies Alliance Corporate Governance Code. We have worked diligently to align our governance framework with the enhanced expectations, including those regarding board independ ence, shareholder engagement, risk management, remuneration struc tures, and transparency. Board composition, independence and diversity We have a broad and diverse range of skills and experience on our Board. Carole Whittall joined the Board on 3 June 2024 as an independent non-ex ecutive director, bringing with her over 25 years of experience in the natural resources sector across a broad range of functions including manage ment, finance and M&A. 02. Governance Annual Report 2024 Governance The summary report on our compli ance with the UK Corporate Govern ance Code 2018 can be found on page 62. This year, we are reporting six deviations from the Code and a full explanation as to the rationale for the deviations has been provided. We expect to conform to all but two by the end of 2025. The new UK Corporate Governance Code 2024 will apply to us from 1 January 2025. We will be assessing our compliance and will report to you on progress in our next annual report. Our first Directors’ Remuneration Policy since moving up to the Main Market received only 67% of votes in favour at our Annual General Meeting on 27 June 2024. Hussein Barma, Chair of our Remuneration Committee, and I sought engagement with 30 of our shareholders together holding almost 80% of our issued share capital. We are very grateful for the feedback we have received. The Directors’ Remuneration Report on pages 86 to 103 provides more detail regarding the consultation process and our proposed new policy. 61 Atalaya Mining Copper, S.A. Risk management and accountability Effective risk management and accountability are essential compo nents of our governance framework. They ensure that we identify, assess, and respond to risks while seizing opportunities to drive our strategic objectives. Further information on the role of the Board and its Audit Committee in monitoring risk management and internal control can be found on pages 75 to 82 of this report. Sustainability Our governance framework supports sustainability by embedding envi ronmental, social, and governance considerations into the Company’s decision-making processes. This ensures that the business is resilient, adaptable, and prepared to address evolving global challenges such as climate change, regulatory change, and societal expectations. Through regular reviews and monitoring, the Board ensures that sustainability initi atives are measurable and integrated into the Company’s operations. Looking ahead Looking ahead, we remain committed to maintaining the highest stand ards of corporate governance as we prepare to apply the revised UK Corporate Governance Code 2024. This update places a stronger emphasis on internal controls, board accountability, and enhanced trans parency in reporting, reinforcing the importance of strong governance in delivering sustainable long-term success. We will continue to evolve our practices to align with these new expectations while ensuring that our governance framework supports the Company’s strategic objec tives and creates lasting value for all stakeholders. Yours sincerely NEIL GREGSON Chair 17 March 2025 02. Governance Annual Report 2024 02. Governance Annual Report 2024 62 Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 UK Corporate Governance Code 2018 – Compliance Statement 02. Governance Annual Report 2024 Code Provision Comment Explanation for deviation 5 Workforce engagement No specified mechanism adopted. Page 64 15 Executive director significant appointments The Chief Executive Officer holds more than one. Page 69 19 Chair not to remain in post beyond nine years from date of first appointment Roger Davey was appointed as a Non-Executive Director of the Company on 23 April 2010 and served as Chair from 24 December 2014 to 30 June 2024. Page 72 20 Appointment of Chair and NEDs Neither open advertising nor an external search consultancy was used to appoint Neil Gregson as Chair and Carole Whittall as a non-executive director. Page 72 36 Share award vesting and holding periods The award of share options made on 12 June 2024 did not have a five-year vesting and holding period of at least five years. Page 98 (DRR) 41 Workforce engagement regarding executive remuneration No engagement with the workforce has taken place to explain how executive remuneration aligns with wider company pay policy. Page 90 (DRR) Atalaya’s ordinary shares were admitted to the premium segment of the Official List maintained by the Financial Conduct Authority and to trading on London Stock Exchange plc’s main market for listed securities on 29 April 2024. Atalaya evaluates its governance against the principles and provisions contained in the UK Corporate Governance Code issued by the Financial Reporting Council (“FRC”) in July 2018 (the “Code”) which can be found on the website of the FRC www.frc.org.uk. This corporate governance statement together with the Board committee reports and the Directors’ remuneration report detail how the Board applies the principles of good governance and best practice as set out in the Code. The Directors consider that the Company has applied the principles and complied with the provisions of the Code during 2024 except for the following provisions: 02. Governance Annual Report 2024 63 Atalaya Mining Copper, S.A. Purpose, values and strategy The Board is committed to promoting the Company’s objective to grow into a multi-asset copper producer, with a focus on developing sustainable, scalable and low-risk operations. In pursuance of this objective, the Board has set clear strategic objectives that align with long-term value creation for shareholders and stakeholders. The Board regularly reviews the Company’s performance against these objectives through regular updates from management. The Board supports management’s initiatives to embed the Company’s core values of responsible and sustainable operation, honesty and accountability to ensure that decision-making at all levels reflects the Company’s commitment to ethical conduct and sustainability. Long-term value creation The Board is committed to ensuring the long-term success and sustainability of the Company. In fulfilling its responsibilities, the Board has assessed the Compa ny’s business model, focusing on how value is generated and preserved over the long term. The Board regularly reviews and evaluates the opportunities and risks that could impact the future success of the business. This includes monitoring changes in market conditions, regulatory developments, technological advancements, and stakeholder expectations. The Board has established robust risk management and internal control frameworks to identify, assess, and mitigate key risks while leveraging strategic opportunities. The sustainability of the Company’s business model is underpinned by its commitment to produce copper in a manner that provides benefits for those regions where it operates, without compromising the ability of future genera tions to meet their own needs. The Company’s sustainability strategy pursues a two-fold objective: ↘↘ to provide society with the essential raw materials required for economic growth and energy transition; and ↘↘ to conduct responsible mining that positively impacts local communities, the environment and all the Company’s stakeholders. 02. Governance Annual Report 2024 Board Leadership and Company Purpose 02. Governance Annual Report 2024 64 Atalaya Mining Copper, S.A. Strong governance is central to the effective delivery of our strategy. The Board ensures alignment between governance practices and strategic objectives by fostering transparency, accountability, and a culture of high integrity throughout the Group. Through its governance oversight, the Board continues to drive the implementation of initia tives that enhance operational efficiency, strengthen share holder relationships, and support long-term value creation. Culture The Board actively monitors and assesses the Compa ny’s culture of prioritising safety and fostering openness, recognising that both are critical to long-term success in the mining sector. Through its site visits, Board members gain first-hand insight into safety practices. These visits allow the Board to reinforce the ‘tone from the top’ demon strating leadership in safety-first principles and ensuring that a culture of continuous improvement is embedded at all levels of the Company. By setting clear expectations and holding management accountable, the Board promotes a workplace where safety is paramount. Stakeholder Engagement The Board recognises the importance of effective engage ment with stakeholders and is committed to fostering meaningful dialogue to understand their views and inform decision-making. During the year, the Board has undertaken a range of activities to ensure stakeholder voices are heard and considered. Further details can be found in the Sustain ability Report. The Board remains committed to reviewing its engagement practices to enhance stakeholder trust. Major Shareholder Engagement Since his appointment on 1 July 2024, the Chair has, together with the Remuneration Committee Chair, under taken a shareholder consultation exercise. Although the primary purpose of the consultation was executive remu neration, shareholders who engaged were invited to give, and did give, their views on other matters relating to the Company. The Chair has ensured that the Board as a whole has a clear understanding of the views of shareholders who engaged with the consultation process. Shareholder Engagement following voting at 2024 Annual General Meeting At the Annual General Meeting of the Company held on 27 June 2024 (the “AGM”) all resolutions were successfully passed with the requisite majority of votes, although three resolutions, all of which related to remuneration, received less than 80% shareholder support. The Chair of the Remu neration Committee undertook a shareholder consultation exercise to understand the reasons behind the voting and an update was published on 20 December 2024. For further information regarding the consultation exercise, the feed back received and the impact it has had on the Remunera tion Committee’s decision-making can be found on pages 90 and 100 of the Directors’ Remuneration Report. Workforce engagement Provision 5 of the Code recommends that boards adopt one of three specified mechanisms to engage with the workforce: appointing a director from the workforce, estab lishing a workforce advisory panel, or designating a non-ex ecutive director responsible for workforce engagement. During the reporting period, the Board did not implement any of these mechanisms. The Board acknowledges the importance of meaningful workforce engagement and fully supports the principles outlined in Provision 5 of the Code. 2024 is the first year that the Company has applied the Code. The Boad has not yet had sufficient time to reach a decision on the approach to workforce engagement best suited to the Company’s specific circumstances and culture. Nevertheless, the Board is committed to ensuring that the views and interests of the workforce are effectively repre sented in its decision making. During 2025, the Board will give further consideration to this subject and will choose an approach that is tailored to the Company’s specific circum stances and culture. Updates on progress will be provided in future reports. Workforce ability to raise concerns The Board has delegated to its Audit Committee responsi bility for reviewing the effectiveness, adequacy and security of the Company’s arrangements for its workforce to raise concerns in confidence and, if they wish, anonymously. For further details of how the Audit Committee has discharged its responsibility for this, please see page 82. Conflicts of interest Directors of the Company are required to disclose in writing to the Board any actual or potential conflicts of interest. In addition, at the outset of each Board meeting, all the Direc tors present are invited to identify any actual or potential conflicts of interest in the business before the meeting together with the nature and extent of any such actual or potential interest. 02. Governance Annual Report 2024 65 Atalaya Mining Copper, S.A. Areas reviewed or actioned in 2024 Outcome Corporate Move up from AIM to Main Market Completed on 29 April 2024. Re-domiciliation from Cyprus to Spain The re-domiciliation completed effective 27 December 2024. Board and management succession One new independent non-executive director joined in June 2024 and another in January 2025. Strategy Project opportunities Entry into of earn-in agreements for the Skellefte Belt and Rockliden Projects in Sweden. Financial matters 2024 budget Approved. 2023 financial statements and annual report Approved for recommendation to shareholders. 2023 final and 2024 interim dividends 2023 final dividend approved for recommendation to shareholders and 2024 interim dividend approved. Q1, H1 and Q3 results Approved. Operations Health and safety Performance monitored. Exploration Progress monitored. Mining Progress monitored. Plant Operation monitored Capital projects Solar power plant Progress of all projects monitored. Road deviation San Dionisio open pit E-LIX phase I Governance Risk management processes and internal control system Reviewed as part of move-up to Main Market. Risk register Reviewed and risks monitored. Need for internal audit function On the recommendation of the Audit Committee, satisfaction that there is no immediate need for the establishment of a dedicated internal audit function, although this will be kept under review. Board’s annual forward agenda planner Approval with additional suggestions from the Board Performance of the Board Concluded that was performing effectively with areas for improvement noted. 02. Governance Annual Report 2024 Board activities in 2024 02. Governance Annual Report 2024 66 Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 Division of Responsibilities 02. Governance Governance Framework The role of the Board is to promote the long-term success of the Company by providing strategic direction, ensuring sustainable value creation, monitoring performance, managing risks effectively, and fostering a culture of integrity and accountability that considers the long-term interests of shareholders and other stakeholders. The Board delegates certain of its responsibilities to its five committees: Nomination & Governance Committee Remuneration Committee Audit Committee Physical Risk Committee Sustainability Committee Chair Neil Gregson Hussein Barma Carole Whittall Stephen Scott Kate Harcourt Membership The Chair and two Independent* Non-Executive Directors The Chair and three Independent* Non-Executive Directors Three Independent* Non-Executive Directors The Chair and three Non-executive Directors, two of whom are independent* Three Non-executive Directors, all of whom are independent* Primary responsibility Leading the process for Board appointments, and succession planning for the Board and management Reviews directors’ and officers’ compensation and performance Oversees the integrity of the Company’s financial reporting, the effectiveness of internal controls, risk management systems, and the independence and performance of the external auditor Oversees safety, health, environment and security matters, and enterprise- wide physical risk management of the Company Oversees the strategy and activities related to sustainable development and social responsibility Further information Page 69 Page 86 Page 76 Page 83 Page 85 The Board delegates the day-to-day management of the Company to the Chief Executive Officer, including implementing the Board’s strategic objectives, making operational decisions (within the Board delegation of authority), leading the executive team, managing resources, and ensuring that the Company’s performance aligns with its goals and governance standards. * Independence as determined by the Board. Annual Report 2024 02. Governance Annual Report 2024 67 Atalaya Mining Copper, S.A. Board Roles The Board recognises the importance of ensuring an appropriate combination of executive and non-executive directors and that a majority of its members are independent, such that no one individual or small group of individuals dominates the Board’s decision-making. 02. Governance Annual Report 2024 The Board has approved a formal statement of the divi sion of responsibilities between the Chair and the Chief Executive Officer. The Board has also approved a formal statement of the responsibilities of the Senior Independent Director. Both these documents are available on the Company’s website at: www.atalayamining.com. Name Role Independence* Neil Gregson Non-executive Chair Independent on appointment Kate Harcourt Senior Independent Non-Executive Director Independent Alberto Lavandeira Chief Executive Officer Not independent Hussein Barma Non-executive Director Independent Jesús Fernández Non-executive Director Not independent Coriseo González-Izquierdo Non-executive Director Independent Stephen Scott Non-executive Director Independent Carole Whittall Non-executive Director Independent * Independence as determined by the Board. At least half the Board, excluding the Chair, are non-ex ecutive directors whom the Board considers to be independent: Chair Neil Gregson was originally appointed as a Non-executive Director on 10 February 2021. He succeeded Roger Davey as Chair of the Company effective 1 July 2024. Mr. Gregson was independent on appointment when assessed against all the circumstances specified in Code provision 10 as being likely to impair or could appear to impair a non-exec utive director’s independence. His key responsibilities as Chair include: »» the effective running of the Board; »» ensuring that the Board as a whole plays a full and constructive part in the development and determination of the Group’s strategy and overall commercial objec tives; and »» being the guardian of the Board’s decision-making processes. 02. Governance Annual Report 2024 68 Atalaya Mining Copper, S.A. Senior Independent Director Kate Harcourt was appointed by the Board to succeed Neil Gregson as Senior Independent Director effective 1 July 2024. The key responsibilities of the Senior Independent Director include: »» acting as a sounding board for the Chair and providing support, particularly regarding governance matters and board dynamics; »» being available to meet with major shareholders to address concerns or discuss issues that cannot be resolved through standard channels; and »» leading the annual performance review of the Chair. Chief Executive Officer Alberto Lavandeira has served as Chief Executive Officer and Managing Director since 24 December 2014. The key responsibilities of the Chief Executive Officer include: »» the running of the Group’s business; »» proposing and developing the Group’s strategy and overall commercial objectives; and »» implementation of the decisions of the Board and its committees. Non-executive Directors Each of the independent and non-independent non-exec utive directors bring different perspectives to the Board’s decision-making and ensure that the viewpoints of the Company’s key stakeholders are represented. They scruti nise and hold to account the performance of management against agreed performance objectives. They provide constructive challenge, strategic guidance and offer specialist advice within their individual fields of expertise. All non-executive directors are required to exercise their independent judgement and act in the best interests of the Company, taking into account the interests of its stake holders, in their decision-making. Independence The Board has carefully considered the independence of all the non-executive directors, including against all the circumstances specified in Code provision 10 as being likely to impair or could appear to impair a non-executive director’s independence (the “Potentially Impairing Factors”). Jesús Fernández was appointed by a significant shareholder who has a right to appoint under the shareholder agreement. As a result, the Board does not consider Jesús Fernández to be independent. However, he adds valuable insight as he can provide an investor perspective to the management team and challenge them accordingly. The Board considers that all other non-executive directors are independent, including Hussein Barma and Stephen Scott who have both served more than nine years on the Board (the “Extended-Tenure NEDs”) which is a Potentially Impairing Factor. Whilst extended tenure could give rise to concerns regarding independence, the Board has imple mented safeguards to ensure that the Extended-Tenure NEDs remain independent and objective in their roles. A sub-committee of the Nominations & Governance Committee consisting of Neil Gregson and Kate Harcourt conducted an in-depth assessment of the independence of each Extended-Tenure NED, which included a review of their contributions, conduct, and ability to challenge management effectively. In addition, each Extended-Tenure NED has given a declara tion to the Board: »» affirming their commitment to objectivity and impartiality; and »» confirming that they have no emotional, professional or personal ties with any member of the Atalaya manage ment team that would inhibit him being objective and challenging and scrutinising management and serving the interests of the Company first. Having carefully considered the issue of the continued inde pendence of each Extended-Tenure NED, that sub-com mittee was satisfied that: »» their independence of judgement remained unimpaired; »» their extended tenure had not created familiarity bias, nor had it diminished their ability to bring a fresh perspective; and »» both Extended-Tenure NEDs continued to bring valuable experience and knowledge to the Board. Upon the recommendation of the sub-committee, the Board has determined that the Extended-Tenure NEDs continue to be independent, and they should continue to serve on the Board as independent non-executive directors whilst succession planning arrangements are implemented to maintain a degree of continuity, preserving corporate knowl edge and supporting effective decision making. The Company has already commenced the process of iden tifying and appointing suitable independent non-executives. The Company anticipates completing these appointments by the end of 2025 and that both Extended-Tenure NEDs will have stood down by the end of 2025. 02. Governance Annual Report 2024 69 Atalaya Mining Copper, S.A. Board and committee meeting attendance in 2024 There were 14 Board meetings held during the year and a further 32 meetings of the Board’s committees. These meetings were attended as follows (the numbers in brackets indicating the number of meetings a director was eligible to attend): Time commitment Non-executive directors are required to seek the agree ment of the Chair before accepting additional commit ments that might affect the time they are able to devote to their role as a non-executive director of the Company. Details of directors’ external commitments are contained within their individual biographies on pages 55 to 58. When considering the appointment of Carole Whittall during the year, the Board considered the demands on her time of her full-time executive role. None of the other Non-executive Directors has taken on any additional appointments during the year. External commitments Details of directors’ external commitments are contained within their individual biographies on pages 55 to 58. The Nomination & Governance Committee considers each director’s external commitments and the impact on the ability of each to devote sufficient time to the Company’s affairs annually. When considering the appointment of Carole Whittall during the year, the Board considered the demands on her time of her executive role. None of the other Non-executive Directors has taken on any additional appointments during the year. The Board is satisfied that, having considered the demands of the external appointments of each Non-execu tive Director and the time requirements from the Company, each Non-executive Director standing for re-election at Board AC RC NGC PRC SC Total № of meetings 13 6 10 10 2 4 H Barma9 13 (13) 6 (6) 2 (2) 4 (4) R Davey 13 (13) 2 (2) 3 (4) J Fernández 5 (13) 0 (2) N Gregson10 12 (13) 2 (2) 10 (10) 10 (10) 2 (2) K Harcourt 13 (13) 10 (10) 10 (10) 4 (4) A Lavandeira 12 (13) S Scott 13 (13) 6 (6) 10 (10) 10 (10) 2 (2) C Whittall11 5 (5) 4 (4) (9) Dr. Barma joined the Remuneration Committee on 1 July 2024. (10) Mr. Gregson stepped down from the Audit Committee on 1 July 2024. (11) Ms. Whittall Joined the Board on 3 june 2024 and the Audit Committee on 1 July 2024. the forthcoming Annual General Meeting continues to contribute effectively to the operation of the Board. Provision 15 of the Code recommends that full-time execu tive directors should not take on more than one non-execu tive directorship in a FTSE 100 company or other significant appointment. The Chief Executive Officer, Alberto Lavandeira, has been a non-executive director of ASX-listed Black Dragon Corp, since 10 July 2017. On 17 June 2024 he was appointed as a non-executive director of ASX-listed Predictive Discovery Limited. Prior to Mr. Lavandeira accepting the second appointment, the Board considered: »» the demands of Mr. Lavandeira’s role as Chief Executive Officer of the Company; »» the expected time commitment from the two non-exec utive directorships; »» whether there were any perceived or actual conflicts of interest; »» public perception of Mr. Lavandeira’s ability to focus on his primary executive responsibilities; »» the robustness of the executive team to handle addi tional pressures if Mr. Lavandeira’s focus was occasion ally diverted; and »» delegation mechanisms in place to manage any absence. 02. Governance Annual Report 2024 70 Atalaya Mining Copper, S.A. The Committee also considered the potential benefits to Atalaya, in terms of expanded networks, additional insights, and broader market intelligence. The Board determined that two non-executive listed-com pany appointments would not impair Mr. Lavandeira’s effec tiveness in leading the Company. This determination was based on Mr. Lavandeira’s proven capacity to manage such commitments effectively, supported by the delegation structure within the executive team. The Board will review this arrangement periodically to ensure that it remains appropriate and in the best interests of Atalaya. Information and support for directors Company Secretary Inter Jura CY (Services) Limited served as the Company Secretary throughout the year under review. On 21 January 2025, following completion of the re-domiciliation of the Company from Cyprus to Spain, Mrs. Frances Robinson was appointed Company Secretary and Mr. Ignacio Moreno was appointed Deputy Company Secretary. Their appointment and removal are a matter for the whole Board. All directors have a right of access to the Company Secretary, who is accountable to the Board, through the Chair, on all govern ance matters. Induction Upon appointment, all new directors undergo a compre hensive induction programme tailored to familiarise them with their role and responsibilities. This programme includes meetings with existing directors, key members of the senior management team, and the Company’s professional advisors. In addition, to provide firsthand insight into the Company’s operations, new directors are afforded the opportunity to visit Atalaya’s facilities in Spain, gaining a deeper understanding of its operational dynamics. During the year under review, Carole Whittall was given a comprehensive induction programme which included meetings with the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Sustainability Manager, and Laboratory Manager. It also included a visit to the Company’s Cerro Colorado open pit mine, plant and labo ratory. This was in addition to her induction as a member of the Audit Committee, details of which can be found on page 82. Training The Board maintains a good working knowledge of the copper mining industry and how the Company operates within that industry as well as being aware of upcoming developments in the wider legal and regulatory environment. Directors attend external seminars and briefings in areas considered appropriate for their own professional develop ment. During the year, this included cyber security, execu tive remuneration, and audit committee technical update. During the year the Company invited Salterbaxter Commu nications Limited and Environmental Resources Manage ment (ERM) Iberia to deliver Board training in, respectively, ESG regulations for UK listed companies and ESG regula tions in Spain. Canaccord Genuity Limited delivered training on the changes to the UK Listing Rules and continuing obligations as a director of a UK listed company. In addition, Linklaters LLP and BMO delivered further training to the Board. Independent professional advice The directors are entitled to seek independent professional advice in furtherance of their duties if they consider this necessary. Directors’ and officers’ liability insurance The Company maintains directors’ and officers’ liability insurance, which provides appropriate legal cover for legal action brought against its directors. 02. Governance Annual Report 2024 71 Atalaya Mining Copper, S.A. Nomination and Governance Committee Role of the Committee The Committee’s role is to lead the process for Board appointments, ensure plans are in place for orderly succession to Board and senior management positions, and oversee the development of a diverse pipeline for succession. The Committee’s terms of reference, which are reviewed annually, are available on the Compa ny’s website at www.atalayamining.com/sustainability/ good-governance. How the Committee operates The Committee meets at least three times a year. Time is made available at each meeting to allow the Committee to discuss matters amongst themselves without management being present. Meetings are held in advance of the Board meetings to allow the Committee Chair to provide a report to the Board on the key matters discussed and for the Board to consider any recommendations made. Committee activities in 2024 The Committee met 10 times during the year under review and all Committee members attended all meetings that they were eligible to attend. Composition, Succession and Evaluation Committee membership and attendance at meetings Attendance in 2024 Member since: N Gregson (Chair) 10 (10) 29 November 2022 K Harcourt 10 (10) 29 November 2022 S Scott 10 (10) 29 November 2022 Committee composition The Board has established a Nomination and Governance Committee which consists of two independent non-exec utive directors and the Company Chair. Information on the skills and the experience of all Committee members can be found on pages [55 to 58]. 02. Governance Annual Report 2024 02. Governance Annual Report 2024 72 Atalaya Mining Copper, S.A. The table below summarises the areas that the Committee reviewed or actioned in 2024 and the outcome. Further detail can be found on pages [72 and 73] below. Areas reviewed or actioned in 2024 Outcome Appointment of Chair Appointment of Neil Gregson who was re-elected at the 2024 AGM Appointment of Senior Independent Director Appointment of Kate Harcourt who was re-elected by shareholders at the 2024 AGM Appointment of Non-Executive Directors Appointment of Carole Whittall who was elected by shareholders at the 2024 AGM Appointment of Coriseo González-Izquierdo who will be submitted for election by shareholders at the 2025 AGM. Governance έέ Committee’s annual forward agenda planner Approval with additional suggestions from Committee. έέ Committee’s terms of reference Inclusion of matters in Committee’s annual forward agenda planner. Performance of Committee The Committee conducted a review of how it had met its terms of reference during the year and its performance and concluded that it had met its terms of reference and continued to perform effectively. Annual re-election of Directors In accordance with provision 18 of the Code, all directors subject themselves to annual re-election. The Annual General Meeting circular contains an explanation as to the reasons why each director’s contribution is, and continues to be, important to the Company’s long-term sustainable success. Board appointments Appointment of Chair Roger Davey had served as a Non-Executive Director of the Company since 23 April 2010 and as Chair since 24 December 2014. The Board was mindful of provision 19 of the Code which provides that the Chair should not remain in post beyond nine years from date of their first appoint ment. For this reason, the Board took steps to identify a successor to Mr. Davey as soon as practicable following the Company’s move to the Main Market on 29 April 2024. On 20 May 2024, the Company announced that Neil Gregson, the then Senior Independent Director, would succeed Mr. Davey as Chair with effect from 1 July 2024 and that Mr. Davey would retire from the Board on 31 December 2024. Provision 20 of the Code provides that open advertising and/or an external search consultancy should generally be used for the appointment of the chair. In the interest of ensuring continuity, the Board determined that appointing an existing independent non-executive director as chair was in the best interests of the Company and its stakeholders. Stephen Scott led the Board discus sions regarding potential eligible internal candidates for chair succession. Neil Gregson emerged as the most suitable eligible candidate who was able to assume the role and thereafter recused himself from all further discussions on the subject. Mr. Gregson has served as an independent non-executive director since 10 February 2021 and has consistently demonstrated exemplary leadership in his committee chair roles, governance expertise and a thorough understanding of the Company’s operations. His appoint ment was unanimously endorsed by the Board. The Board believes that this approach balanced the principles of good governance with the needs of the Company at the time. It ensures a seamless transition of leadership, continuity of oversight and retention of corporate memory. Appointment of Non-executive Director Provision 20 of the Code also provides that open adver tising and/or an external search consultancy should gener ally be used for the appointment of non-executive directors. The Board decided to leverage the networks of the existing non-executive directors to identify and appoint Carole Whittall as a new non-executive director. This approach was chosen to ensure that the selected candidate possessed the specific skills, experience and cultural alignment required to complement the existing Board composition. The appointment process involved a rigorous internal evaluation of potential candidates identified through these networks, ensuring transparency, objectivity, and alignment with the Company’s strategic needs and in accordance with the Company’s board diversity policy. Carole Whittall was identified as an outstanding candidate due to her extensive experience in the natural resources sector and particularly in accounting and finance. The Board is confident that this targeted approach has resulted in the appointment of a highly qualified individual who will contribute significantly to the Company’s success. The Board remains committed to the principles of the Code and for the subsequent and current ongoing non-executive director search process, an external search firm is being used. 02. Governance Annual Report 2024 73 Atalaya Mining Copper, S.A. Succession planning In anticipation of the retirement of Roger Davey on 31 December 2024, the Committee engaged with three external search consultancy firms with a view to appointing one of them to assist with the search process. Following consideration of each firm’s proposal, the Committee resolved to appoint Cripps Leadership Advisors Ltd (“CLA”) to assist with the search. With the support of CLA, the Committee formulated the key attributes and core compe tencies required for the role. CLA then presented to the Committee profiles of 23 potential candidates who met all or some of the required attributes. The Committee reviewed each of the profiles and thereafter seven candidates were shortlisted for interview. Following the interview process, the Committee recommended to the Board that Coriseo González-Izquierdo be appointed. For the purposes of the management succession plan, the Committee engaged a third-party consultant to assess the individuals who had been identified by the Committee as potential suitable internal successors to the existing c-suite roles. This process resulted in the identification of internal successors to each of the three c-suite roles. Board evaluation In January 2025, the Board conducted a formal effective ness review encompassing an evaluation of the Board as a whole, its committees and individual directors. The review was led by the Chair. The evaluation comprised a combination of questionnaires, individual one-on-one conversations and a general group discussion amongst Board members: »» For the purposes of the review of the performance of each individual NED, each independent NED completed a detailed questionnaire regarding their own individual performance, that of the Board and each of its commit tees and submitted it to the Chair. That questionnaire was then discussed in a private meeting between the Chair and the independent NED. Any feedback relating to the performance of individual committees was fed back to the relevant committee chair. »» For the purposes of the review of the performance of the Chair, the Senior Independent Director sought feedback from all other Board members. The Senior Independent Director then discussed the feedback with the Chair in a private meeting. »» For the purposes of the review of the performance of the CEO, the Chair sought feedback from all other direc tors. In addition, the CEO was requested to complete a bespoke questionnaire. The Chair and the CEO then held a private meeting to discuss the completed question naire, feedback received from the Board and feedback which the CEO wished to give to the Board. The Chair presented an overall summary of the findings from the evaluation process to the Board for discussion. This included recommendations made by individual directors. The Board discussed these and agreed that it, its commit tees and individual directors were operating effectively, whilst also noting areas for improvement including: »» strengthening oversight mechanisms to ensure that key projects are effectively monitored and aligned with strategic objectives; »» enhancing risk management processes and reporting to ensure a more proactive approach to identifying and mitigating key risks; »» assessing and refining the composition of the Board and its committees to ensure an appropriate distribution of committee work; and »» expanding Board briefings on key topics of interest to support informed decision-making and enhance Board engagement. The Board recognises the importance of regular and effec tive evaluation to enhance its performance. In line with the UK Corporate Governance Code, the Board is mindful of the recommendation to undertake an externally facilitated eval uation at least every three years. During the year, the Board’s Nomination & Governance Committee considered whether to commission an external evaluation but concluded that it would not be appropriate at this stage. This decision was based on the fact that the Company adopted the Code part way through the year upon becoming listed on the Main Market and that the Board’s composition is undergoing planned changes. One director retired in 2024 and a further two retirements are expected in 2025. Given this ongoing transition, the Board believes that an externally facilitated review would be more effective once these changes have been implemented. In the interim, the Board will continue to conduct internal evaluations to assess its effectiveness and will revisit the timing of an external review in due course to ensure it delivers maximum value. Diversity and inclusion The Board recognises the benefits of diversity in its broadest sense and believes that the Board’s effectiveness is improved by a diverse balance of age, gender, ethnicity, sexual orientation, disability, educational, professional and socio-economic backgrounds, and cognitive and personal strengths. Together, this brings the widest possible breadth of perspectives, insights and challenge to the deci sion-making process, ultimately ensuring the Board and senior management are equipped to promote the long- term success of the Company. The Company has a Board Diversity Policy which sets out the approach to diversity on the Board and across the senior management population. While the policy does not separately extend to the Audit, Remuneration, and Nomi nation & Governance Committees, all members of these committees are directors and are therefore already subject to the Board’s diversity principles. The Board considers all aspects of diversity when reviewing its composition. Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 74 Gender balance The gender balance of those in senior management and their direct reports as at 31 December 2024 was as follows: Each Board or member of executive management has confirmed their gender and ethnic background and the above data has been collated from those confirmations. Diversity disclosures pursuant to Listing Rules 6.6.6R(9) and (10) Gender diversity № of Board members % of the Board № of senior positions on Board № in executive management % of executive management Men 6 75% 2 3 100% Women 2 25% 1 0 0% Not specified / prefer not to say 0 0% 0 0 0% Ethnic background diversity № of Board members % of the Board № of senior positions on Board № in executive management % of executive management White British or other White (including minority-white groups) 7 75% 3 3 100% Mixed/Multiple ethnic groups 0 0% 0 0 0% Asian/Asian British 1 12.50% 0 0 0% Black/African/Caribbean/Black British 0 0% 0 0 0% Other ethnic group 0 0% 0 0 0% Not specified / prefer not to say 0 12.50% 0 0 0% As at 31 December 2024 the Company met two of the three targets. Since 31 December 2024, Roger Davey retired from the Board and Coriseo González-Izquierdo was appointed in his place, increasing the percentage of women on the Board to 37.5%. In line with regulatory and governance expectations, the Company is committed to ensuring at least 40% of its Board is composed of women, Given the Company’s Board size of eight members, this equates to either 37.5% or 50%. The Board’s Nomination & Governance Committee continues to prioritise diversity and inclusion in future appointments, ensuring that gender representation remains a key consideration while balancing the need for the right mix of skills and experience. The Listing Rules require companies to state whether they have met certain targets on board diversity. The information in the table below is as at 31 December 2024. The targets set out in the Listing Rules are that: »» at least 40% of the individuals on its board of directors are women »» at least one of the following senior positions on its board of directors is held by a woman (the chair, SID, CEO, or CFO); and »» at least one individual on its board of directors is from a minority ethnic background. 31% Female 69% Male 31% 69% Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 75 02. Governance Annual Report 2024 75 Audit, Risk and Internal Control 02. Governance Annual Report 2024 Introductory letter from Audit Committee Chair During the year, our areas of focus included ensuring our annual report provides a fair, balanced, and clear assessment of the Company’s performance, strategy, and risks and establishing that the financial state ments provide a true and fair view of the Group’s financial affairs. As part of this process, we considered the significant financial judgements made during the year, together with other key financial reporting issues. Further details can be found on page 78. We also considered the scope for management override of controls, the risk of revenue recognition (including the potential for fraud therein), and valuation of mining assets. We found no concerns arising from this review. A description of the material issues that the Committee considered during the year can be found on pages 77 to 82. Viability and going concern The Committee considered the going concern statements in the interim and full-year financial statements. The Committee also conducted a detailed review of the Company’s viability statement in the Annual Report. This included consideration of the appro priateness of the five-year viability assessment period, the assumptions, the principal risks and uncertain ties considered, and the sensitiv ities tested. Following this review, the Committee was satisfied that management had conducted robust viability and going concern assess ments and recommended approval of these to the Board. Further informa tion on how the viability statement Dear Shareholder, I am pleased to introduce Atalaya’s Audit Committee report for the finan cial year ended 31 December 2024. The report summarises the areas of focus and work conducted by the Committee over the course of the last year in fulfilment of its responsibilities. I assumed the role of Audit Committee Chair at the end of October 2024 as we began planning for the external audit for the year under review. On behalf of the Board, I would like to extend my thanks to Hussein Barma for his dedicated leadership of the Committee. Neil Gregson stood down as a member of the Committee on 1 July 2024 following his appointment as Company Chair. On behalf of the Committee, I would like to thank him for his contributions to the Committee over his years of service. External auditor tender In anticipation of completion of the Company’s re-domiciliation from Cyprus to Spain, the Committee undertook a comprehensive tender process for the appointment of the external auditor. Following this process, PricewaterhouseCoopers Auditors, S.L. (Spain) was appointed as the Company’s new external auditor. Further details of the tender process can be found on page 79. Review of material issues The Committee’s primary objective is to support the Board in overseeing the integrity of financial reporting and ensuring effective risk management and control. was developed can be found on page 78. The viability and going concern statements can be found on pages 31 and 47. Risk, control, and assurance The Committee ensures the effective ness of the Company’s risk manage ment framework and internal controls. This included oversight of key risks, both financial and operational. Further information regarding the Commit tee’s oversight role can be found on page 81 Looking ahead The Committee will continue to focus on maintaining high standards of financial integrity and governance. We will consider the changes to the UK Corporate Governance Code, particularly the new requirements with respect to risk management and internal controls which will impact future reporting periods. On behalf of the Audit Committee, I would like to thank the management team, our former auditors, Ernst & Young Cyprus Ltd, and our new auditors, PricewaterhouseCoopers Auditores, S.L. (Spain) and Pricewa terhouseCoopers Limited (Cyprus), for their support and constructive engagement throughout the year. Yours sincerely CAROLE WHITTALL Chair of Audit Committee 17 March 2025 02. Governance Annual Report 2024 76 Atalaya Mining Copper, S.A. Audit Committee Report Annual Report 2024 02. Governance Attendance in 2024 Member since Carole Whittall (Chair since 26 October 2024) 4/4 1 Jul. 2024 Hussein Barma (Chair until 26 October 2024) 6/6 24 Nov. 2015 Stephen Scott 6/6 11 Oct. 2023 Neil Gregson (Member until 1 July 2024) 2/2 25 Oct. 2022 Committee composition The Committee is composed solely of non-executive direc tors. The current Committee Chair is independent. Although the other current Committee members have served more than nine years on the Board and therefore do not meet the presumptive independence criteria set out in provision 10 of the UKCGC, the Board has considered their extended tenure in the context of their independence and has concluded that they remain independent and objective and that it is appropriate that they remain as members of the Committee whilst Board succession planning arrangements are implemented in order to maintain a degree of continuity. For more information regarding the Board’s consideration of their independence, please see page 68. The Board is satisfied that the Committee Chair has recent and relevant financial experience as required by the UKCGC and that the Committee as a whole has competence relevant to the sector in which the Company operates. More information on the skills and the experience of all Committee members can be found on pages 55 to 58. Role of the Committee The Committee’s role is to provide oversight of the Company’s financial and narrative reporting statements, to monitor the effectiveness of systems of internal control and risk management, to monitor the integrity of the Group’s external audit processes, and to keep under review the need for an internal audit function. The Committee’s terms of reference, which are reviewed annually, are available on the Company’s website at www.atalayamining.com/ sustainability/good-governance. Committee membership and attendance at meetings How the Committee operates The Committee meets at least three times a year. In addition to Committee members, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Company Secre tary, and representatives of the external auditor also attend Committee meetings by invitation where appropriate. Time is made available at each meeting to allow the Committee to discuss matters amongst themselves or with the external auditor without management being present. An annual planner of matters for the Committee to review informs the agendas for each Committee meeting. The Committee receives information in advance of its meetings including information and reports from the external auditor and the Chief Financial Officer and his team. Committee meetings are scheduled to coincide with key dates in the Company’s financial reporting and audit cycle calendar. Meetings are held in advance of the Board meet ings to allow the Committee Chair to provide a report to the Board on the key matters discussed and for the Board to consider any recommendations made. The Committee Chair also meets regularly with representatives of the external auditor. 02. Governance Annual Report 2024 77 Atalaya Mining Copper, S.A. Committee activities in 2024 The Committee met six times during the year under review and all Committee members attended all meetings that they were eligible to attend. A representative of the external auditor attended all meetings of the Committee during the year. The Committee met in closed session without management present on one occasion during the year. The table below summarises the areas that the Committee reviewed or actioned in 2024 and the outcome. Further detail can be found on pages 79 to 85 below. Areas reviewed or actioned in 2024 Outcome Financial and narrative reporting Full year, half-year, and quarterly reports Recommendation to the Board for approval. Key accounting judgements and estimates Agreement with management’s key judgements and estimates. Going concern and viability statements Satisfaction that statements provide a balanced and transparent view and that there were no gaps or weaknesses that had been identified that required additional analysis or disclosure. Fair, balanced and understandable assessment Recommendation that annual report and financial statements taken as a whole were fair, balanced and understandable. External audit Conduct of tender process PricewaterhouseCoopers Auditores, S.L. (Spain) was appointed by shareholders as the external auditor for the financial year ended 31 December 2024 subject to the cross-border conversion to Spain taking effect prior to 31 December 2024. Reports from external auditor (including external audit findings) Assurance that external audit was effective. Full-year audit plan and significant audit risks Assurance that external audit sufficiently robust. External auditor’s independence and expertise Satisfaction that there were no matters impacting the auditor’s independence or objectivity and satisfaction that there was not lack of expertise that might impact audit quality. Policy on employment of former employees of the external auditor Enhancement of assurance of independence of external audit and compliance with Committee terms of reference. Effectiveness of external audit process The Committee was satisfied that the external audit remained effective. Internal control and risk management Risk management processes and internal control system The Committee confirmed to the Board that it had reviewed the effectiveness of the Group’s systems of internal control and risk management for the period under review Risk register No changes to the principal risks were made. Need for internal audit function Satisfaction that there is no immediate need for the establishment of a dedicated internal audit function, although this will be kept under review. Governance Training Circulation of relevant briefings and Inclusion of relevant matters in Committee’s forward agenda planner. Committee’s annual forward agenda planner Approval with additional suggestions from Committee. Committee’s terms of reference Inclusion of matters in Committee’s annual forward agenda planner. Performance of Committee The Committee concluded that it continued to perform effectively. Annual Report 2024 02. Governance 02. Governance Annual Report 2024 78 Atalaya Mining Copper, S.A. Financial and narrative reporting – significant areas considered »» Scope for management override of controls Management override of controls is a general presump tive audit risk. The external auditor reported to the Committee that it had not identified any instances of material fraud or of management override of controls. In connection with the Company’s move up to the Main Market during the year the Committee reviewed the adequacy of the Company’s financial position and prospects procedures and reviewed management’s assessment of internal financial controls, forecasting processes, and risk management including challenging management’s assumptions. The Committee believes that there is a culture of ethical behaviour across the Group and a strong control environment that both deters and prevents fraud. Going concern and viability statements »» Going concern The Committee reviewed and challenged management’s forecasts for 2025 and 2026 and considered risks to the projections and underlying assumptions and judge ments. The Committee also reviewed the adequacy of the disclosures in Note 3 to the financial statements relating to going concern. The Committee concluded that it was satisfied that it remained appropriate to prepare the financial statements on a going concern basis. The going concern statement can be found on page 47 of the Annual Report. »» Viability statement The Committee reviewed management’s work in conducting a thorough assessment of those risks which could threaten the business model and the Company’s future viability. This assessment included identifying severe but plausible risk events for each of the Group’s principal risks as well as considering interdependencies and the overall impact from multiple risks being realised. For those risks severe enough to impact the viability of the Group, a sensitivity analysis was performed to under stand the potential impact which the Committee consid ered. The Committee considered the findings from this analysis together with the proposed text of the viability statement and concluded that the viability statement appropriately reflected: έέ the principal risks and uncertainties facing the busi ness, including their potential impact on the Compa ny’s solvency and liquidity; and έέ the scenario analyses performed to support the statement. The Committee also reviewed the five-year viability assessment period and concluded that it was appropriate. The Committee therefore recommended approval of the viability statement to the Board. The viability statement can be found on page 31 of the Annual Report. Key accounting judgements and estimates »» Revenue recognition Revenue recognition is a key area of focus, in particular the risk of material error in relation to revenue recognition for sales of concentrate. The Committee reviewed the external auditor’s audit procedures for addressing this risk and findings. The Committee considered the appro priateness of the recognition and was comfortable with the conclusions reached. »» Carrying value of mining assets and investments The Committee considered the carrying value of the Group’s mining assets in Spain. έέ Riotinto operating project: The Committee consid ered the impairment testing work that had been carried out by management together with the review work that had been carried out by the external auditor, particularly with regard to capitalisation of €7,567k of expenses related to the implementation of ELIX (owned by Lain Technologies). The Committee chal lenged management’s confidence in the technology’s ability to contribute to the Company’s growth and operational efficiency in the future. The Committee also considered and challenged management’s financial model which estimated the potential returns that could be realised from the technology over time. The Committee concluded that management’s recognition of the capitalisation of Lain Technologies expenses was reasonable and was satisfied that that the related disclosures in the financial statements provided a clear and transparent explanation of the rationale and its impact. έέ Touro development project: The Committee consid ered and challenged management’s reversal of a €6,948k impairment made in 2019 in relation to this project and the decision to record the assets and liabilities of the project in the expectation of the Company exercising its right to acquire up to 80% ownership of the project. Following discussion with management and the external auditor and noting that an independent expert valuation had been carried out as at 31 December 2024 (the method and hypotheses used having been evaluated by the external auditor), the Committee concluded that it was appropriate to reverse the previous impairment charge and to record assets and liabilities in the expectation of the Company exercising its right to acquire up to 80% of the project. The Committee was also satisfied that the related disclosure in the financial statements provided a clear and transparent explanation of the rational for the reversal. έέ Masa Valverde and Ossa Morena development projects: The Committee was satisfied that no impair ment was required. 02. Governance Annual Report 2024 79 Atalaya Mining Copper, S.A. Fair, balanced and understandable On behalf of the Board, the Committee has considered whether, in its opinion, the Annual Report and Financial Statements (the “AR&FS”), taken as a whole, is fair, balanced and understandable and whether it provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy. To do this, the Committee considered a draft of the AR&FS at an early stage to enable sufficient time for comment and review to check the overall balance and consistency. As part of this process, the Committee considered and, where appropriate, challenged management as to whether: »» the narrative in the annual report and the financial reporting in the financial statements was consistent; »» the key judgements referred to in the narrative reporting and the significant accounting issues included in the audit committee report were consistent with the disclo sures in the financial statements; »» important messages were highlighted appropriately throughout the AR&FS; »» there were any omissions that should have been included; »» KPIs were appropriate disclosed based on the financial reporting; »» key messages in the narrative were reflected in the finan cial reporting; »» statutory and adjusted measures were explained clearly with appropriate prominence; »» there was any inconsistency with the matters that the external auditor intended to include in its report. External audit External audit tender »» Background Ernst & Young Cyprus Limited were appointed auditors to the Company on 31 May 2017 and audited the financial statements of the Company up to and including those in respect of the year ended 31 December 2023. It was reported in the Company’s 2023 annual report that the Board expected to conduct a tender process for the appointment of a new auditor consequent upon the re-domiciliation of the Company from Cyprus to Spain. »» Planning The Committee resolved to appoint a selection sub-committee authorised to carry out the tender process and make recommendations to the Committee. That sub-committee consisted of Hussein Barma, the then chair of the Committee, Neil Gregson, then a member of the Committee, Kate Harcourt, chair of the Sustainability Committee, and César Sánchez, the Chief Financial Officer. The chair of the Sustainability Committee was included as a member of the sub-com mittee because, in addition to tendering for the external audit, the Company was simultaneously conducting a tender for an independent assurance engagement for the Company’s sustainability report. The corporate department prepared the formal request for proposals document pursuant to which five firms were invited to submit proposals. This document was reviewed and approved by the sub-committee. »» Selection criteria The sub-committee prepared a list of key selection criteria for both tenders which, in respect of the audit tender, included: έέ mining sector experience; έέ audit quality and process; έέ integration of UK and Spanish teams to accommodate the Company’s move to the main market and re-dom iciliation to Spain; έέ conflicts and independence; έέ fees, value for money and cost management; and έέ understanding of, and culture fit with the Company. »» Presentations and review of proposals Five firms made two presentations, one to the members of the finance team and the other to the rest of the sub-committee including the Chief Financial Officer. The content of each of the presentations and each firm’s proposal document was considered in detail by the sub-committee. The sub-committee also considered feedback received from members of the Chief Financial Officer’s finance team who had met with team members of the potential audit firms. Following the presentations and internal discussions, two firms were shortlisted based on their experience, mining expertise and fees. »» Recommendation to the Board The sub-committee proposed two firms to the Committee for consideration. The Committee and the Sustainability Committee both resolved to recommend to the Board the appointment of Pricewaterhouse Coopers for, respectively, the external audit and the sustainability assurance provision. 02. Governance Annual Report 2024 80 Atalaya Mining Copper, S.A. Effective, objective, independent and quality audit »» Role of the Committee The Committee’s role is to ensure that the annual external audit is effective, objective, independent, appropriately priced and of a high quality. »» Effectiveness The Committee considered several factors when deter mining the effectiveness of the external audit, including whether: έέ the audit plan was comprehensive; έέ the audit team was appropriately resourced; έέ the audit team demonstrated competence, technical expertise and mining industry knowledge; έέ accurate and perceptive advice on key accounting and audit judgements, technical issues, and best practice was provided; έέ the auditor worked effectively with management; έέ the auditor applied professional scepticism and provided constructive challenge to management; έέ useful areas for improvements in company proce dures were highlighted; and έέ audit work was completed to schedule and within the agreed fee. Following completion of its review, the Committee concluded that it was satisfied with the effective ness of the external audit and the effectiveness of PricewaterhouseCoopers. »» Audit fees The Committee considered the level of audit fees proposed to be charged by the external auditor at the time of the audit tender. It also considered a supplemen tary audit fee so that additional work could be carried out on the valuation of the Company’s subsidiaries. The Committee concluded that the level of fees proposed to be charged for the audit was appropriate to enable an effective and high-quality audit to be conducted. »» Non-audit fees The Committee has approved a policy on the provision of non-audit services by the external audit to mitigate any threat related to the external auditor’s independence. This policy is reviewed regularly by the Committee to safeguard the ongoing independence of the external auditor. Details of the fees paid to PricewaterhouseCoopers for audit and non-audit services are shown in Note 31 to the financial statements. The non-audit services provided by PricewaterhouseCoopers related to sustainability assurance services and reviewing the Company’s interim results to 30 June 2024. »» Independence The external auditor has explained to the Committee its processes for maintaining independence. The external auditor has also provided the relevant infor mation to the Committee so that it can monitor the level of fees paid by the Company compared to the overall fee income of the firm, office and partner. To further safeguard the external auditor’s independ ence, during the year the Committee agreed with the Board a policy on the employment of former employees of the external auditor. PricewaterhouseCoopers has confirmed to the Committee its independence and objectivity from the Company and both the Committee and the Board are satisfied that: έέ PricewaterhouseCoopers has adequate policies and safeguards in place to ensure that its objectivity and independence are maintained; and έέ There are no matters impacting Pricewaterhouse Coopers’ independence or objectivity. The Committee’s role is to ensure that the annual external audit is effective, objective, independent, appropriately priced and of a high quality. 02. Governance Annual Report 2024 81 Atalaya Mining Copper, S.A. Principal features of internal control and risk management systems in relation to financial reporting The Company has established a comprehensive internal control and risk management framework to ensure the integrity, accuracy, and reliability of its financial reporting process. These controls are designed to safeguard the Company’s assets, ensure compliance with applicable laws and regulations, and provide reasonable assurance over the preparation of financial statements. Key features of the Company’s internal control and risk management systems in relation to the financial reporting process include: »» Governance and oversight: The Board, supported by the Committee, oversees the financial reporting process and the effectiveness of internal controls. »» Financial reporting policies and procedures: The Company has established clear accounting policies, aligned with International Financial Reporting Standards and a structured financial reporting framework to ensure consistency and compliance. There is a formalised time table and reporting calendar that governs the prepara tion and review of financial reports, including quarterly, interim and annual statements. »» Risk assessment and management: The Company main tains a risk management framework to identify, assess, and manage financial reporting risks, including fraud, misstatements, and regulatory compliance risks. Regular risk assessments are conducted to evaluate emerging financial risks, with appropriate mitigating actions implemented. »» Internal controls and compliance: A system of internal controls is in place to ensure the completeness, accu racy, and validity of financial data, including segregation of duties, approval thresholds, and reconciliations. The Company also operates a whistleblowing mechanism to enable employees and stakeholders to report concerns related to financial integrity and fraud. See page 82 below for further information regarding the whistle blowing mechanism. »» External audit and assurance: The Company engages an independent external auditor to conduct an annual audit of its financial statements, ensuring compliance with regulatory and accounting standards. The Committee oversees the external audit process, reviewing findings and recommendations to enhance financial reporting integrity. See pages 78 and 79 above for further infor mation regarding financial narrative reporting and the external audit. »» IT and financial systems controls: Robust IT controls are in place to protect financial data, including access restrictions, cybersecurity measures, and automated system validations. Role of the audit committee The Board has delegated to the Committee responsibility for: »» monitoring and managing relevant risks; and »» reviewing and challenging where necessary the effec tiveness and adequacy of the Company’s internal finan cial systems that identify, assess, manage and monitor financial risks, and other internal control and risk manage ment systems. The Company has several processes in place to provide effective internal control including various compliance and business integrity policies and a risk management frame work under which controls, and their effectiveness, are managed and evaluated. A description of the Group’s risk management framework and process together with a summary of the principal risks and uncertainties to which the Company is exposed can be found on pages 24 to 30 of the Strategic Report. How the Committee fulfilled its role in 2024 The Committee: »» regularly reviewed the Company’s risk registers with a focus on its financial and strategic risks and associated mitigation plans and, where appropriate, the Committee challenged management regarding risk scores; »» considered the Company’s approach to identifying and managing emerging risks; »» Prior to the Company’s move-up to the Main Market, the Committee considered management’s review of the Company’s compliance and business integrity policies. During the year there have been no reported breaches of any of those policies. During the year an independent firm of accountants was engaged to prepare a report on the Financial Position and Prospects Procedures (FPPP) for the Group in connection with the Company’s move from AIM to the Main Market. That engagement provided an additional level of comfort for the Committee and the Board regarding the adequacy of the Group’s internal control environment. The Committee has confirmed to the Board that it has reviewed the effectiveness of the Group’s systems of internal control and risk management for the period under review and that it has not identified any significant failings or weaknesses. Risk management and internal controls 02. Governance Annual Report 2024 82 Atalaya Mining Copper, S.A. Whistleblowing The Board has delegated to the Committee responsibility for reviewing the effectiveness, adequacy and secu rity of the Company’s whistleblowing arrangements for its employees, contractors and external parties to raise concerns, in confidence, about possible wrongdoing in financial reporting and other matters. There have been no significant reports made under the whistleblowing policy during the period under review. The Committee has reviewed the clarity, accessibility, scope and the extent to which confidentiality and anonymity can be afforded to those who might wish to make a report under the policy. The Committee has also considered the awareness and communication of the policy, ease of use and whether there are specific departments that are at higher risk for unreported misconduct. The Committee has concluded that there are no further enhancements to be made which might encourage reporting under the policy, which is available in Spanish and English, being the mother tongues of more than 99% of the Group’s employees, contractors, and suppliers. Internal audit The Group does not currently have a dedicated internal audit function. Currently, activities that would typically be carried out by an internal audit function are carried out by members of the Group’s finance team. The Committee reviews the need for an internal audit function and/or a head of internal audit annually. This year the Committee considered the nature, scale and complexity of the Group’s business and concluded that they were not such that they warranted a dedicated function or individual and accord ingly recommended so to the Board which approved the recommendation. The Committee will, however, keep the need for a dedicated internal audit function or individual under review. Governance Committee member induction and ongoing training Prior to joining the Committee, Carole Whittall received briefings from the then Committee chair and the Chief Financial Officer regarding the key elements of the Committee’s work. It has been agreed that relevant bulletins issued by the ‘big four’ accounting firms will be circulated to Committee members by way of ongoing training. In addi tion, briefings regarding changes to the FRC’s Corporate Governance Code, the FCA’s Listing Rules, and the FCA’s Disclosure Guidance and Transparency Rules sourcebook relevant to the Committee will also be provided. Committee terms of reference The Committee adopted new terms of reference in November 2023, in anticipation of its move up to the Main Market during 2024. The Committee conducted a review of adherence to those new terms of reference. That review highlighted a few non-material areas of non-adherence, all of which have now been rectified. Committee performance Questions on the performance of the Committee were included in the questionnaire circulated as part of the Board effectiveness review. Those questions related to the ability to think and act independently without undue influence from management, understanding of roles and responsi bilities, and suitability of skills. The responses were consid ered and discussed by the Committee. The Committee concluded that it continued to perform effectively. 02. Governance Annual Report 2024 83 Atalaya Mining Copper, S.A. Physical Risk Committee Report Committee composition The Committee is currently composed solely of non-ex ecutive directors, two of whom the Board considers to be independent. Although the Committee Chair has served more than nine years on the Board and therefore does not meet the presumptive independence criteria set out in provision 10 of the UKCGC, the Board has considered his extended tenure in the context of his independence and has concluded that he remains independent and objective and that it is appropriate that he remains as Chair and a member of the Committee whilst Board succession plan ning arrangements are implemented in order to maintain a degree of continuity. For more information regarding the Board’s consideration of the Committee Chair’s independ ence, please see pages page 68. More information on the skills and the experience of all Committee members can be found on pages 55 to 58. Role of the Committee The Committee’s role is one of oversight. The Committee: »» oversees safety, health, environmental and security matters relating to the Group; »» oversees enterprise-wide physical risk management; and »» reviews compliance with legal and regulatory obligations relating to safety, health, and the environment. 02. Governance Annual Report 2024 Attendance in 2024 Member since Stephen Scott (Chair since 25 October 2022) 2/2 9 Sep. 2015 Roger Davey (retired 31 December 2024) 2/2 21 Dec. 2015 Jesús Fernández 0/2 25 Oct. 2022 Neil Gregson 2/2 23 Jun. 2021 Committee membership and attendance at meetings Coriseo González-Izquierdo, an independent non-executive director, joined the Committee on her appointment to the Board on 14 January 2025. 02. Governance Annual Report 2024 84 Atalaya Mining Copper, S.A. It is recognised that the non-executive directors who are members of the Committee 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. It is not the responsibility of the indi vidual Committee members personally to conduct safety, health, environment, security, or risk reviews. The Committee’s terms of reference, which are reviewed annually, are available on the Company’s website at www. atalayamining.com/sustainability/good-governance. How the Committee operates The Committee usually meets at least three times a year. In addition to Committee members, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, the chair of the Sustainability Committee, and the Company Secretary also attend Committee meetings by invitation where appropriate. Meetings are held in advance of the Board meetings to allow the Committee Chair to provide a report to the Board on the key matters discussed and for the Board to consider any recommendations made. Committee activities in 2024 The Committee met twice during the year under review. Committee member meeting attendance is disclosed in the table above. One of these meetings included a site visit to the Compa ny’s producing mine and processing facility in Andalucía. Feedback given by the Committee to management following the site visit included: »» the need to reiterate to contractors the requirement of strict compliance with the Company’s site safety rules and regulations which could be supplemented by having Company personnel working more closely with contractor personnel when carrying out site inspections; »» observations regarding the E-LIX project construction. At both its meetings, the Committee received a presenta tion from the Proyecto Riotinto General Manager regarding the Group’s: »» physical risk matrix and the updates made by manage ment, including those relating to: έέ tailings storage facility; έέ water discharge; έέ dust emissions; έέ legionella; έέ forest fire management plan; έέ IT systems penetration, and »» safety statistics and preventative measures, including: έέ accidents; έέ alcohol and drug testing; έέ training; and έέ safety culture. Information regarding the Company’s approach to safety and its safety performance in 2024 can be found in the Sustainability Report 2024. Information regarding the Company’s approach to environ mental sustainability and related performance can be found in the Sustainability Report 2024. 02. Governance Annual Report 2024 85 Atalaya Mining Copper, S.A. Committee composition The Committee is composed solely of non-executive direc tors. More information on the skills and the experience of all Committee members can be found on pages 55 to 58. Role of the Committee The Committee: »» oversees the strategy and activities related to sustain able development and social responsibility; and »» develops and regularly reviews the policies, programmes, practices, targets, and initiatives of the Group relating to sustainability matters. The Committee’s terms of reference, which are reviewed annually, are available on the Company’s website at www. atalayamining.com/sustainability/good-governance. How the Committee operates The Committee usually meets at least three times a year. In addition to Committee members, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Sustainability Manager, and the Company Secretary also regularly attend Committee meetings. Meetings are held in advance of the Board meetings to allow the Committee Chair to provide a report to the Board on the key matters discussed and for the Board to consider any recommendations made. Committee membership and attendance at meetings Attendance in 2024 Member since Kate Harcourt (Chair since 25 October 2022) 4/4 25 Oct. 2022 Hussein Barma 4/4 25 Oct. 2022 Roger Davey (retired 31 December 2024) 3/4 25 Oct. 2022 Carole Whittall was appointed as a member of the Committee on 14 January 2025. Committee activities in 2024 The Committee met four times during the year under review. Committee member meeting attendance is disclosed in the table above. Matters reviewed by the Committee during the year included: »» the sustainability report and associated data book; »» the climate change report; »» progress on preparations for reporting under the EU Corporate Sustainability Reporting Directive; and »» progress with activities planned for 2024 under the Company’s ESG roadmap. During the year the Committee Chair and other regular attendees of Committee meetings attended external training regarding Spanish and UK sustainability regulatory reporting requirements. Information regarding the Company’s approach to sustain ability and related performance can be found on pages 48 to 53 of the Strategic Report and in our Sustainability Report 2024. 02. Governance Annual Report 2024 Sustainability Committee Report Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 86 02. Governance Annual Report 2024 Introductory letter from Remuneration Committee Chair Remuneration its proposed new performance-re lated LTI awards. The Committee will consider Provision 41 how to address workforce engagement during 2025. Further information regarding the Company’s non-compliance during the year with Code provisions 36 and 41 can be found on pages 98 and 90 below. Business performance and shareholder experience 2024 presented some challenges for the Company. Despite this we have remained focused on delivering long-term value. At the start of the year, our share price stood at 361p. Despite reaching a high of 485.5p in May 2024, it closed down at 359p on 31 December 2024. Notwithstanding the challenges faced by the business, the Company has continued to pay dividends. We recognise the impor tance of aligning executive remuner ation with shareholder experience and continue to structure our policies accordingly. Dear shareholders, I am pleased to introduce Atalaya’s Directors’ Remuneration Report for the financial year ended 31 December 2024. Having assumed the role of Committee Chair on 1 July 2024, I would like to take this opportunity to outline our approach to remuneration during the year for the business, as well as to share how we have engaged with shareholders to shape our future policy. UK Corporate Governance Code compliance This is our first Directors’ Remuner ation Report since moving up from AIM to the Main Market on 29 April 2024. We have reviewed our compli ance with Part 5 of the UK Corporate Governance Code 2018 (the “Code”) for the financial year under review. We are committed to maintaining high standards of corporate governance. However, we acknowledge that our 2024 remuneration framework was not in full compliance with the Code throughout the year, specifically in relation to Code provision 36 (total vesting and holding period of at least five years for long-term incentives and a policy on post-employment shareholding requirements) and Code provision 41 (workforce engagement). The Committee has addressed Code provision 36 and will be compliant with both elements in 2025 save in relation to a one-off transitional incentive award designed to bridge the gap between the Company’s historical long-term incentive (“LTI”) awards and 02. Governance Annual Report 2024 Atalaya Mining Copper, S.A. Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 87 Executive Director remuneration outcomes The Committee carefully assessed Executive Director performance against our remuneration framework and determined that the CEO’s annual bonus payout for 2024 would be 58% (2023: 67%) of the maximum opportu nity (100% of annual base salary). We believe this outcome appropriately reflects the Company’s financial and operational performance and delivery of strategic objectives and ensures alignment with the principles of our remuneration policy. For further details on remuneration outcomes for the financial year, please see pages 96 to 98 below. Shareholder engagement and future policy Our first Directors’ Remuneration Report and Directors’ Remuneration Policy since moving up to the Main Market received only 72% and 67% respectively of votes in favour at our Annual General Meeting on 27 June 2024 (the “2024 AGM”). Our Company Chair, Neil Gregson, and I undertook an extensive shareholder engagement exercise to understand investor perspectives. We sought engagement with 30 of our share holders together holding almost 80% of our issued share capital and met with all who requested meetings. The Committee has carefully reflected on the feedback and insights received when formulating the new Directors’ Remuneration Policy which will be presented for shareholder approval at the 2025 Annual General Meeting. We are very grateful for the time, insights, and feedback provided by those shareholders and proxy advi sory services who participated in this engagement. Full details of the voting outcome on the three remuneration-related resolutions put to the 2024 AGM can be found on page 89. The Directors’ Remuneration Report on pages 88 to 103 provides more detail regarding the consultation process and our proposed new Directors’ Remunera tion Policy. Conclusion The Committee remains committed to ensuring that our remuneration framework supports the Company’s strategy, drives performance, and aligns with the long-term interests of our shareholders. We appreciate your continued engagement and look forward to your support as we progress into 2025. Yours sincerely 02. Governance Annual Report 2024 Atalaya Mining Copper, S.A. HUSSEIN BARMA Chair of Remuneration Committee 17 March 2025 02. Governance Annual Report 2024 88 Atalaya Mining Copper, S.A. 02. Governance Annual Report 2024 02. Governance Annual Report 2024 Remuneration Committee Report Annual Report 2024 02. Governance Attendance in 2024 Member since Hussein Barma (Chair since 1 July 2024) 2/2 1 Jul. 2024 Neil Gregson (Chair until 1 July 2024) 10/10 25 Oct. 2022 Kate Harcourt 10/10 25 Oct. 2022 Stephen Scott 10/10 25 Oct. 2022 Committee composition The Committee is composed solely of independent non-executive directors. The Committee was re-consti tuted following the Company’s move from AIM to the Main Market and the Board’s decision to adopt the Code in place of the Quoted Companies Alliance Corporate Governance Code. Mr. Gregson became Chair of the Company on 1 July 2024 and was therefore no longer eligible to chair the Committee. Having been independent upon appointment, Mr. Gregson continues to be a member of the Committee. Dr. Barma was appointed Committee Chair to ensure continuity during a period of Board change and as part of succession planning until a new independent non-exec utive had been appointed and had settled in. Prior to his appointment as Committee Chair, Dr. Barma had served on a remuneration committee of another quoted company for at least 12 months and on Atalaya’s former Corporate Governance, Nomination & Compensation Committee. The Board considers that the current Committee Chair and the other Committee members are independent. Although Dr. Barma and Mr. Scott have served more than nine years on the Board and therefore do not meet the presumptive inde pendence criteria set out in provision 10 of the Code, the Board has considered their extended tenure in the context of their independence and has concluded that they remain independent and objective and that it is appropriate that they remain as members of the Committee whilst Board and Committee succession planning arrangements are implemented in order to maintain a degree of continuity. For more information regarding the Board’s consideration of their independence, please see page 68. It is intended that Ms. González-Izquierdo, who was appointed to the Board in January 2025, will take over as Committee Chair no later than the date of the 2025 Annual General Meeting. More information on the skills and the experience of all current and intended Committee members can be found on pages 55 to 58. Committee membership and attendance at meetings Role of the Committee The Committee’s role is to ensure that executive direc tors and other key employees of the Company are fairly rewarded for their individual contribution to the overall performance of the Company. The Committee’s terms of reference, which are reviewed annually, are available on the Company’s website at www.atalayamining.com/ sustainability/good-governance. How the Committee operates The Committee meets at least three times a year. In addition to Committee members, the Company Secretary and and other members of the Board and external advisers also attend Committee meetings by invitation where appropriate. An annual planner of matters for the Committee to review informs the agendas for each Committee meeting. The Committee receives information in advance of its meetings including information and reports from the Company Secre tary and external advisers. Committee activities in 2024 The Committee met 10 times during the year under review and all Committee members attended all meetings that they were eligible to attend. The table below summarises the areas that the Committee reviewed or actioned in 2024 and the outcome. Further detail can be found on pages 89 to 103 below. 02. Governance Annual Report 2024 89 Atalaya Mining Copper, S.A. Advisers After considering a number of alternatives, in October 2024 the Committee appointed FIT Remuneration Consultants LLP (“FIT”) as the independent adviser to the Committee. FIT’s fees are calculated on a time expended basis by reference to an hourly rate. FIT’s fees in respect of advice to the Committee in the year under review were £6,500. FIT has no connection with the Company and has not provided any other services to the Company during the year. The Committee, based on its experience, is satisfied that the advice it received from FIT was objective and independent. Areas reviewed or actioned in 2024 Outcome Shareholder remuneration consultation Understanding shareholder views and taking them into account for the purposes of proposing amendments to the Company’s remuneration policy. In- and post-employment shareholding requirements Decision to increase the in-employment requirement and to implement a formal post-employment requirement policy both with effect from 1 January 2025. The Company is now in compliance with Code provision 36 in respect of developing a formal policy for post-employment shareholding requirements. Review of external advisers to the Committee Appointment of FIT Remuneration Consultants LLP. Review of Remuneration Policy Recommendation to shareholders of amendments for approval at the 2025 AGM. Remuneration outcomes for the 2023 short-term incentive Recommendation to the Board for approval. Grant of options under long-term incentive plan (“LTIP”) Recommendation to the Board for approval. Performance measures for 2024 short-term incentive Recommendation to the Board for approval. Performance measures for 2025 short-term incentive Recommendation to the Board for approval. New performance-related LTIP for 2025 and beyond Recommendation to the Board for approval. One-off transitional award to bridge gap between old-style LTIP and new performance-related LTIP Recommendation to the Board for approval. Committee’s annual forward agenda planner Approval with additional suggestions from Committee. Committee’s terms of reference Satisfied that the Committee had met them during the year and that no amendments required. Performance of Committee Concluded that the Committee continued to perform effectively. Committee effectiveness The Board evaluation questionnaire invited directors to comment on the performance of each of the Board’s committees, including the Committee. The Board endorsed the Committee’s focus during 2024 on developing a competitive remuneration structure with enhanced disclo sure that would meet the requirements of the Code. Future areas for focus included ensuring suitable benefits for senior executives are in place. The Board concluded that the Committee had operated effectively during 2024, with appropriate experience and skills in its membership and sufficient resources to discharge its responsibilities. 2024 AGM shareholder voting Please see page 90 for details of the Company’s response to the voting outcome. For Against Withheld Resolutions № of shares as a % of votes cast № of shares as a % of votes cast № of shares as a % of votes cast Remuneration Report 68,102,204 72% 26,575,624 28% 1,185 n/a Remuneration Policy 63,485,819 67% 31,192,009 33% 1,185 n/a Grant of Share Options 68,798,135 76% 21,519,133 24% 4,361,745 n/a * A withheld vote is not a vote in law. 02. Governance Annual Report 2024 90 Atalaya Mining Copper, S.A. Directors’ Remuneration Policy Introduction The Directors’ Remuneration Policy (the “2025 Policy”), set out below, is subject to a shareholder vote at the Compa ny’s 2025 annual general meeting (“2025 AGM”). This Policy will take effect from the date it is approved by shareholders, replacing the policy approved at last year’s AGM. The 2025 Policy is expected to apply for three years. As the Company is incorporated in Spain, the vote on the 2025 Policy will be advisory rather than binding (which is the case for UK incorporated companies). Neverthe less, the Board will only authorise payments to Directors that are consistent with the 2025 Policy (as approved by shareholders). The Group’s policy on Directors’ remuneration has been set with the objective of attracting, motivating and retaining high calibre directors, in a manner that is consistent with best practice and aligned with the interests of the Group’s shareholders. The policy on Directors’ remuneration is that the overall remuneration package should be sufficiently competitive to attract and retain individuals of a quality capable of achieving the Group’s objectives. Remuneration policy is designed such that individuals are remunerated on a basis that is appropriate to their position, experience and value to the Company. Consideration of employment conditions elsewhere in company In setting the remuneration policy for Directors, the pay and conditions of other Group employees are taken into account. The Committee is provided with data on the remuneration structure for senior members of staff below the Executive Director level and uses this information to ensure consistency of approach throughout the Group. The Committee does not directly engage with the work force on executive remuneration but, the workforce has the opportunity to raise any issues (including those on executive remuneration) in the employee engagement initiatives. Workforce engagement Provision 41 of the Code requires the remuneration committee report to state what engagement with the work force has taken place to explain how executive remunera tion aligns with wider company pay policy. Since the Company moved up to the Main Market on 29 April 2024 and became subject to the Code, steps have been taken to be able to report compliance with Code provision 41. Given the extensive shareholder engagement exercise undertaken in relation to executive remuneration in the autumn of this year (see page 90) and the consequent formulation of a revised Directors’ Remuneration Policy, there has been no direct engagement with the workforce to explain how executive remuneration aligns with wider company pay policy during the year although consideration has been taken of pay and employment conditions across the Group in ensuring executive remuneration aligns with wider company pay policy. The Remuneration Committee will consider direct workforce engagement regarding executive remuneration during 2025. In the meantime, the Committee can confirm that the Company’s approach to salary increases is aligned throughout Atalaya. Statement of consideration of shareholder views Shareholders views are considered when evaluating and setting remuneration strategy. Opportunities to discuss the remuneration strategy are available during individual meetings with institutional shareholders when requested or as part of a shareholder consultation process as well as by voting on the report at the AGM. During the final quarter of 2024, the Committee carried out a detailed review of the Remuneration Policy that had been approved at the Company’s 2024 AGM: »» noting last year’s AGM took place just three months following the Company’s move from AIM to the Main Market whilst the Company was in the midst of a process to redomicile from Cyprus to Spain; and »» in the light of feedback received. The Committee also took further independent advice from FIT. Feedback received from shareholders and the main share holder representatives at the time of the AGM was largely centred around a desire for greater levels of disclosure in respect of annual and long-term incentives (such as quantum, performance metrics, and targets) and a require ment for greater shareholder protections (such as the oper ation of bonus deferral, post vesting holding periods, and in- and post-employment shareholding requirements). Following consideration of shareholder feedback, the Committee formulated the outline of a new Directors’ Remuneration Policy and sought engagement on the proposed approach with the Company’s 30 largest shareholders (comprising almost 80% of the Company’s current issued share capital) and the main shareholder representatives. During the engagement process, the Committee received written feedback, and the Committee Chair, Company Chair and Company Secretary attended a number of meetings with major shareholders. 02. Governance Annual Report 2024 91 Atalaya Mining Copper, S.A. Changes to the Directors’ Remuneration Policy A summary of the key changes is set out below. Annual bonus ↘↘On-target and maximum potential aligned to market On-target and maximum annual bonus potential for Executive Directors will be set at 150% of salary with on target performance being rewarded at 50% of the maximum. This compares to maximum potential for 2024 set at 100% of salary with on target performance rewarded at 75% of this lower maximum. ↘↘Introduction of bonus deferral Compulsory bonus deferral will be introduced such that one third of any bonus awarded to Executive Directors who have not met their in-employment shareholding requirement will be deferred into shares for two years. The Committee retains discretion to defer a greater proportion of any bonus award into shares where consid ered appropriate. Long-term incentive plan (“LTIP”) awards ↘↘Introduction of a market aligned annual LTIP Policy An annual LTIP grant policy will be introduced whereby Executive Directors will receive annual awards capped at 200% of salary (300% of salary in exceptional circumstances) albeit the CEO’s 2025 LTIP award will be limited to 175% of salary. LTIPs will normally vest three years from grant, subject to continued employment and the achievement of three-year performance conditions. Post vesting, a two-year holding period will operate for awards granted to Executive Directors. Shareholder protections ↘↘Introduction of discretion The Committee will retain discretion to adjust bonus payments / LTIP vestings if formulaic outcomes do not reflect the Committee’s assessment of overall business performance including consideration of shareholder experience and the individual executive’s performance. ↘↘Increase to in-employment shareholding requirements In-employment requirements for Executive Directors will be increased from 100% to 200% of salary. New appointments will normally have a five-year period from their date of appointment to build up their minimum shareholding requirement. ↘↘Introduction of post cessation shareholding requirements Post-cessation shareholding requirements will be intro duced for Executive Directors, set at 200% of salary (or, if lower, the actual shareholding on departure) for two years post cessation. Purpose and link to strategy Operation Maximum opportunity Performance measures Fixed Remuneration Base salary Core element of remuneration. To set at a level which is sufficiently competitive to recruit and retain individuals of the appropriate calibre and experience. Basic salary is normally reviewed annually as at 1 January with reference to company performance; the performance of the individual Executive Director; the individual Executive Director’s experience and responsibilities; market conditions and pay and conditions throughout the Company. There is no prescribed maximum annual base salary or salary increase. The Committee is guided by the general increase for the broader employee population but has discretion to decide a lower or a higher increase. n/a Pension To help recruit and retain high performing Executive Directors. To provide market competitive benefits. The Company may offer pension provision and/or a cash supplement in lieu of pension. 10% of salary. n/a Benefits To help recruit and retain high performing Executive Directors. To provide market competitive benefits. To date a Company car has been provided. The Company intends to introduce private medical and life insurance during the life of the Policy. Additional benefits may be provided if the Committee decides that this is appropriate. There is no prescribed annual maximum cost. n/a Executive Directors’ remuneration policy table continue → 02. Governance Annual Report 2024 92 Atalaya Mining Copper, S.A. Purpose and link to strategy Operation Maximum opportunity Performance metrics Non-Executive Directors’ Remuneration To attract and retain high calibre non-executives with the necessary experience. To provide fees appropriate to time commitments and responsibilities of each role. Non-Executive Directors are paid a basic fee. An additional fee is paid for additional time and responsibility such as but not limited to chairing or being a member of a committee. Fee levels reflect market conditions and are reviewed annually on 1 January each year. n/a Non-Executive Directors’ remuneration policy table Purpose and link to strategy Operation Maximum opportunity Performance measures Performance-Related Variable Remuneration Short-term incentive To incentivise the achievement of a range of short-term performance targets that are key to the success of the Company. To align the interests of the Executives and shareholders to the annual targets. Executive Directors are eligible to participate in the Company’s annual bonus scheme under which an annual bonus is earned subject to achievement of performance measures over the financial year against targets set by the Committee; and continued employment (see below). One third of any bonus awarded to Executive Directors who have not met their in-employment shareholding requirement will be deferred into shares for two years. The Committee retains discretion to defer a greater proportion of any bonus award into shares where considered appropriate. Malus and clawback provisions operate – see below. Maximum of 150% of salary. Threshold up to 25% of maximum. On target: 50% of maximum. Performance measures will be majority financial / operational and minority strategic / personal. Performance measures and weightings are reviewed annually to ensure that they continue to support the achievement of the Company’s key strategic priorities. Financial targets are set with reference to internal plans and published guidance. The Committee retains discretion to adjust bonus payments if formulaic outcomes do not reflect the Committee’s assessment of overall business performance including consideration of shareholder experience and the individual executive’s performance. Long-term incentives To support retention, long-term performance and increase alignment between the executives and shareholders. The Company intends to make awards under this structure annually. Awards are normally made on an annual basis and normally vest three years from grant subject to continued employment and the satisfaction of challenging three-year performance targets. Awards may be structured as conditional awards, nominal cost options and/or forfeitable shares. A two-year holding period following LTIP vesting applies to grants to Executive Directors. In total, this results in a five-year combined vesting and holding period. Malus and clawback provisions operate – see below. Up to 200% of base salary (300% of salary in exceptional cases). Performance measures will include financial, operational measures, strategic measures and/or Total Shareholder Return (TSR). Subject to the Committee’s discretion to override formulaic outturns, awards will normally vest as to 25% for threshold performance, increasing to 100% for maximum performance. The measures will be designed to balance commercial success, operational efficiency, and sustainable practices so as to ensure long-term value creation for the Company and its shareholders. Performance will normally be measured over a three-year period. The Committee retains discretion to adjust vesting levels should any formulaic outcome not reflect the Committee’s assessment of the overall business performance, including consideration of shareholder and other stakeholder experience. Shareholding policy Encourages Executive Directors to build a meaningful shareholding to further align interests with the Company and shareholders. In-employment minimum requirement Shareholding requirements for Executive Directors are 200% of base annual salary. New appointees will normally have a five-year period from the date of their appointment to build up the minimum shareholding requirement. Until the shareholding requirement is met: »» one third of the Executive Director’s annual cash bonus will be deferred into shares; and »» the Executive Director will be required to retain up to 50% of the net of tax shares they receive under any share incentive arrangement. Post-employment minimum requirement Post-employment shareholding requirements for Executive Directors are 200% of base annual salary for two years post cessation. If the Executive Director has not met the relevant shareholding requirement at the point of cessation of employment, they will be required to retain their full pre-cessation shareholding for the two-year period. 02. Governance Annual Report 2024 93 Atalaya Mining Copper, S.A. Other elements of remuneration policy ↘↘Discretion The Committee will operate the Company’s incentive plans according to their respective rules and consistent with normal market practice, including flexibility in a number of regards. These include making awards and setting performance criteria each year, dealing with leavers, and adjustments to awards and performance criteria following acquisitions, disposals, special dividends, changes in share capital and to take account of the impact of other merger and acquisition activity or other significant events, and to settle awards in cash. The Committee also retains discretion within the policy to adjust the targets, set different measures and/or alter weightings for the annual bonus plan and share awards, pay dividend equivalents and, in exceptional circumstances, under the rules of the Atalaya Long-Term Incentive Plan 2020 to adjust performance conditions to ensure that the awards fulfil their original purposes. All assessments of performance are ultimately subject to the Committee’s judgement. Any discretion exercised, and the rationale, will be disclosed in the Annual Remuneration Report. ↘↘Malus and clawback Malus and clawback provisions which operate in respect of the annual bonus and LTIP are as follows: Malus Clawback Annual Bonus If, prior to payment of the annual bonus, there is reasonable evidence of gross misconduct or gross negligence by an Executive Director and/or there is reasonable evidence of a material breach by an Executive Director of any of the Company’s policies relating to business integrity and ethics, and/or there is reasonable evidence of conduct by an Executive Director which results in significant losses or reputational damage to the Atalaya group, the Committee has discretion to reduce or cancel payment of the annual bonus. Any annual bonus will be subject to clawback if there is a restatement of the Company’s financial results (other than a restatement caused by a change in applicable accounting rules or interpretations), to the extent that the amount of the annual bonus paid would have been a materially lower amount had it been calculated based on the restated results or if the Executive Director has been involved in a wrongful act. The lookback period for clawback will be a three-year period preceding the date on which the Company determines that it is required to restate materially non-compliant financial statements or discovers that an Executive Director has been involved in a wrongful act. LTIP If the Board considers that: »» there has been a significant downward restatement of the financial results of the Company; and/or »» there is reasonable evidence of gross misconduct or gross negligence by the Executive Director; and/or »» there is reasonable evidence of material breach by the Executive Director of the Company’s Code of Business Principles or the Company’s Code Policies (or equivalent); and/or »» there is reasonable evidence of conduct by the Executive Director which results in significant losses or reputational damage to the Company or the Group, and/or »» the Executive Director is in breach of any applicable restrictions on competition, solicitation or the use of confidential information (whether arising out of the Executive Director’s employment contract, his termination arrangements or any internal policies), it may, in its discretion, at any time prior to vesting, or exercise of an option, decide that: »» an award will lapse wholly or in part; »» the delivery of shares will be delayed until any action or investigation is completed; and/or »» vesting of the award or delivery of the shares will be subject to additional conditions. If the Board considers there has been a significant downward restatement of the financial results of the Company, it may, in its discretion, within two years of an Award Vesting: »» require a Participant to transfer to the Company (or as the Company directs), for nominal or nil consideration, some or all of the after-tax number of Shares which have previously Vested, or pay to the Company (or as the Company directs) an amount equal to the value of those Shares (as determined by the Board); and/or »» require the Company to withhold from, or offset against, the grant or Vesting of any other Award to which the Participant may be or become entitled in connection with their employment with the Group such an amount as the Board considers appropriate. 02. Governance Annual Report 2024 94 Atalaya Mining Copper, S.A. Approach to recruitment and promotion remuneration The recruitment package for a new Executive Director will be set in accordance with the Directors’ Remuneration Policy (the “Policy”). »» Base annual salary: On recruitment the salary may be set below the normal market rate, with phased increases as the Executive Director demonstrates performance within the Company. »» Benefits: The Policy enables the Committee to include those benefits it deems appropriate for an Executive Director. On recruitment, this may include benefits such as relocation or housing expenses. In arriving at a benefits package, the Committee’s prevailing consideration will be to pay only what is considered necessary and appro priate, taking into account the importance of securing the right candidate for the job, acting in the best interests of the Company’s stakeholders and limiting certain benefits to a specified time period where possible. »» Annual bonus opportunity: This will reflect the period of service for the year. The maximum will be in accordance with the Policy. »» Long-term incentive: The Committee retains discretion to make an award shortly after an appointment if the usual annual award date has passed. The exceptional limit of 300% of salary is for the Company to be able to attract and secure the right candidate if required. »» Variable pay: With internal appointments, any variable pay element awarded in respect of the individual’s prior role will normally be allowed to continue according to its terms. »» Compensation for lost arrangements with previous employer: Any replacement share awards would be made under the Company’s Long-Term Incentive Plan 2020 and as permitted under the UK Listing Rule 9.3.2. Any new awards would take account of the structure of the awards being forfeited (cash or shares), the amount foregone, the extent to which performance conditions apply, the likelihood of meeting any existing performance conditions, and the time left to vesting. Service contracts: duration and payment obligations ↘↘CEO’s Service contract The service contract of the CEO, Alberto Lavandeira, dated 14 March 2014 (as amended on 25 March 2014 and 21 September 2023) is available for inspection at the Company’s registered office at Paseo de las Delicias, 1, 3, 41001, Sevilla, Spain. The details are: Date of appointment 14 April 2024 Notice period from Company to CEO 6 months Notice period from CEO to Company 3 months Unexpired term of contract Rolling contract Potential termination payment On a change of control* Non-Executive Director Date of appointment Notice Period Hussein Barma 9 September 2015 3 months Stephen Scott 9 September 2015 3 months Jesús Fernández 23 June 2015 3 months Neil Gregson 10 February 2021 3 months Kate Harcourt 19 May 2022 3 months Carole Whittall 3 June 2024 3 months Coriseo González-Izquierdo 14 January 2025 3 months * Mr. Lavandeira’s service contract includes a change of control provision whereby in the event that there is a change of control and within 12 months after the event (i) the contract is terminated by the Company; or (ii) the employee terminates his contract with at least three months’ notice due to a pre-agreed good reason, the exec utive will receive the equivalent to 24 months’ base salary less any payment made in lieu of notice and any legal severance payment. ↘↘NEDs’ Letters of appointment NEDs have letters of appointment with the Company for an initial three-year period, thereafter renewable with the agreement of both the Company and the NED. The letters of appointment are available for inspection at the Company’s registered office at Paseo de las Delicias, 1, 3, 41001, Sevilla, Spain. The details are: Annual Report 2024 02. Governance 02. Governance Annual Report 2024 95 Atalaya Mining Copper, S.A. Policy on setting notice periods The Company seeks to balance the need to attract and retain high-calibre Executive Directors with best practice in corporate governance. The standard notice period for Executive Directors will not normally exceed six months. The Board may approve a shorter or longer (up to a maximum of 12 months) notice period where it is justified by commercial reasons or market practice. NEDs are appointed for fixed terms of up to three years, subject to annual re-election by shareholders in accord ance with the Code. Their letters of appointment include a notice period of up to three months by either party. Policy on payments for loss of office The Company will not provide any payment for loss of office beyond what is contractually required unless it is in the best interests of the Company and its shareholders. Payments will be determined in accordance with the terms of the individual’s service contract and applicable employment law. The Company will seek to limit payments on termination to reflect only contractual entitlements, including salary, pension contributions, and benefits during the notice period. In respect of annual bonus awards, an Executive Director must still be employed by the Company at the time of payment and must not have served or been served notice to terminate employment prior to payment. The Committee retains discretion to allow payments to Executive Directors who do not meet the continued employment requirement at the time of payment because they have died, suffered ill health, injury, or disability, have retired (with the agreement of the Company) or any other reason at the discretion of the Committee if the Committee is of the view that a payment (whether full or partial) is fair and reasonable in all the circumstances. If an Executive Director leaves employment before vesting, share awards will normally lapse. However, if an Executive Director leaves employment before vesting due to death, ill health, injury, disability, retirement (with the agreement of the Company) or another reason at the discretion of the Board: »» Unvested share awards will vest to the extent that any performance condition has been satisfied on the date of vesting and, unless the Board decides otherwise, the level of vesting will be reduced pro rata to reflect that proportion of the performance period during which the Executive Director was not employed by the Company. The Board may decide that it is appropriate to permit early vesting in which case it will determine the extent to which any performance condition is satisfied. »» Unvested share options will be exercisable for six months from the later of the date on which the option vests and the date on which the Executive Director left. If an Executive Director leaves employment for any reason (except for misconduct or breach of employment terms) after share options have vested, their share options will be exercisable for six months from the date on which the Executive Director left. Policy on fees from external appointments The Company recognises that external appointments can broaden the knowledge and experience of Execu tive Directors for the benefit of the Company. Therefore, Executive Directors may accept external appointments as long as they do not lead to a conflict of interest and do not impair their effectiveness in their roles with the Company. Executive Directors are allowed to retain any fees from such external appointments where the appointment is personal and independent of their executive role. The CEO’s external appointments are detailed in his biography on page 56 of the Governance Report. Chief Executive Officer € 3,000 € 2,500 € 2,000 € 1,500 € 1,000 € 500 € 0 Remuneration (€’000) 26% 34% 40% Maximum € 2,268 21% 29% 33% 17% Maximum with share price growth € 2,723 41% 27% 32% On-target € 1,423 Minimum 100% € 578 Fixed pay Annual Bonus LTIP Share price growth 02. Governance Annual Report 2024 96 Atalaya Mining Copper, S.A. Annual Report on Remuneration The Committee has applied the principles of good govern ance set out in the Code. Implementation of Existing Policy in 2024 Executive Director’s single remuneration figure The table below presents a single remuneration figure for the Chief Executive Officer (“CEO”) who is the Company’s sole Executive Director for the years ended 31 December 2023 and 31 December 2024. The charts above for the CEO are based on the following: * 175% is the percentage for the first year of the Policy. The maximum potential is 200% of salary (300% of salary exceptional limit) under the Policy. * As indicated in the 2023 Annual Report, a defined contribution pension plan has been put in place from the beginning of 2024. ** Company lease car benefit in kind (inclusive of taxes paid by the Company). *** The 2024 cash bonus was earned in respect of the financial year ended 31 December 2024 and will be paid in 2025. The 2023 cash bonus was earned in respect of the financial year ended 31 December 2023 and was paid in 2024. **** The amount relates to the non-cash expense recognised in accordance with IFRS 2 Share Based Payments. The vesting and exercise of share options is subject to continued employment as described on page 101. On 11 June 2024 Mr. Lavandeira was granted options over 400,000 Ordinary Shares in the capital of the Company at an exercise price of 413.5 pence per share (being the market value at grant). 133,334 vested on grant and the balance will vest in two equal tranches on the first and second anniversa ries of grant. On 22 May 2023 Mr. Lavandeira was granted options over 400,000 Ordinary Shares in the capital of the Company at an exercise price of 327.0 pence per share (being the market value at grant). 133,334 vested on grant, 133,333 vested on the first anniversary of grant and the balance will vest on the second anniversary of grant. Minimum On-target Maximum Maximum with share price Fixed pay Base salary at 1 January 2025 Benefits estimated at €6,000 10% pension provision assumed Annual bonus CEO max: 150% of salary 0% 50% of max 100% of max 100% of max LTIP CEO max: 175% of salary* 0% 50% of max 100% of max 100% of maximum with a 50% share price growth assumption on LTIPs Fixed Pay (€) Variable Pay (€) Total (€) A. Lavandeira Salary Pension* Benefits** Total fixed Cash bonus*** Share options**** Total variable FY 2024 498,188 50,531 5,580 554,299 293,787 409,000 702,787 1,257,086 FY 2023 481,000 0 6,000 487,000 327,000 190,000 517,000 1,004,000 Base Salary The Committee reviewed the CEO’s annual base salary during the year under review, and the Committee deter mined to increase it by 3.5% with effect from 1 July 2024. Pension The CEO has an employer pension contribution equal to 10% of base salary (which was introduced at the start of 2024). Taxable Benefits Taxable benefits for the CEO comprised a company car. 02. Governance Annual Report 2024 97 Atalaya Mining Copper, S.A. * For performance between threshold, target, and maximum, vesting is on a straight-line basis where the performance measure permits. * During the year, the Riotinto operation modified its plan to mine and process ores with higher silver content to compensate for the lower copper ore grade, which had the effect of increasing copper equivalent production and revenues. Accordingly, in assessing actual performance, the Committee considered 2,000 tonnes of copper equivalent of the incremental silver production in assessing performance under this metric. ** This metric considers both the absolute level of capex incurred compared with target as well as an assessment of expenditure with a focus on timing and cost efficiency. Considering these factors, the Committee’s final assessment was 65% of maximum bonus for this metric notwithstanding that the absolute level of expenditure was within the target range which would otherwise have implied an outcome of 75%. Measure Performance Targets Actual performance Outcome (% of maximum) Weighting Unit of measurement Threshold (35% of maximum) Target Maximum Financial and operational targets Throughput 4.5% M Tonnes 15.0 15.5 16.0 15.9 4.28% Recovery 4.5% Percentage 83.0% 85.0% 87.0% 83.1% 1.63% Cu metal produced 6.0% Tonnes 47,000 52,000 57,000 48,227* 2.69% On-site cost per tonne processed 6.0% €/tonne processed 16.20 15.70 15.20 14.63 6.00% AISC in $/lb Cu payable 9.0% $/lb Cu 3.30 3.10 2.90 3.26 3.87% Capex incurred/ execution 6% k€ 80,000 64,000–73,000 60,000 66,062 3.90% Audited net cash flows 15% k€ (15,000) nil 10,000 (69,931) 0.00% H&S frequency 4.5% LTIFR 6.25 5.25 4.25 3.33 4.50% H&S severity 4.5% Severity rate 0.26 0.21 0.16 0.10 4.50% Sub-total 60.0% 31.36% Strategic, project and growth targets E-LIX plant progress** 10.0% The Committee considered carefully the progress made with E-LIX during the year. Although commercial production was not achieved during the year, the technology and the installation have been proven to function. 4.00% Growth projects evaluation 10.0% A number of growth opportunities were evaluated during the year. Including the Swedish joint ventures that were announced on 19 November 2024. 7.50% Shareholder diversification and interaction 10.0% The move-up from AIM to the Main Market and the re-domiciliation from Cyprus to Spain were both completed during the year which together with a detailed programme of investor meetings and communications served to diversify the shareholder base. 7.50% Sub-total 30.0% 19.00% Individual personal targets Organisation development 5.0% An evaluation of the top five potential executives for inclusion on the Company’s succession plan was undertaken which included identification of skills and areas for development. Planning work for the move from one to two operations was also well advanced during the year. 3.75% Direct report blended personal targets 5.0% The Committee considered the outcome of the performance of the CFO and Rio Tinto General Manager during the year. The CFO and GM’s targets comprised a combination of operational, financial, ESG and strategic targets for which each was responsible. The blended outcome of these performances resulted in 80% achievement under this metric. 4.03% Sub-total 10.0% 7.78% Grand total 100.0% 58.14% Performance* Threshold On Target Maximum 35% of maximum opportunity 75% of maximum opportunity 100% of base annual salary Performance measures related to copper production, cost performance, capital expenditure, cash flow and safety performance. The table below sets out the performance measures and the outcome of each: Short-term incentive plan The CEO’s annual bonus opportunity in 2024 was: 02. Governance Annual Report 2024 98 Atalaya Mining Copper, S.A. The Committee considered the formulaic outcomes in the context of the Company’s overall business performance, including consideration of shareholder experience and the CEO’s individual performance. The Committee determined that the formulaic outcomes were fair and reasonable, and that the CEO’s bonus payment did not need to be adjusted. Therefore, performance against the measures (adjusted as described above in the notes to the operational perfor mance targets table) result in a bonus for the CEO for 2024 as follows (with 2023 figures in brackets for comparison): Year Maximum opportunity (% of base annual salary) Maximum opportunity (€) % of maximum payable Total bonus 2024 100% €505,308 58.14% €293,787 2023 100% €488,220 67.00% €327,000 NED (€’000) 2024 fees 2023 fees Hussein Barma* 107 94 Roger Davey* 117 139 Jesús Fernández 83 74 Neil Gregson* 138 107 Kate Harcourt 103 93 Stephen Scott 120 98 Carole Whittall* 53 - Long-term incentive plan The CEO was granted options over 400,000 ordinary shares in the Company on 11 June 2024 pursuant to the 2020 LTIP (the “2024 Options”) at an exercise price of 413.5 pence per ordinary share being the mid-market price on the grant date. There are no performance conditions attached to the exercise of the 2024 Options. One third of the 2024 Options vested on the Grant Date. The balance of the 2024 Options will vest in two equal tranches on the first and second anniversary of the Grant Date. The 2024 Options will lapse on the fifth anniversary of the Grant Date if not already exercised. Provision 36 of the Code provides that share awards should be subject to a total vesting and holding period of five years or more. The award of the 2024 Options was not in accord ance with Code provision 36. As noted in the Remuneration Policy section, the Committee has formulated a revised Directors’ Remuneration Policy which will be put to share holders at the 2025 AGM. That policy, once implemented, will address the minimum five-year vesting period, save for a one-off transitional award of share options expected to take place during 2025. For further details regarding the proposed transitional award, please see page 100 below. As at 31 December 2024, the CEO held the following options over ordinary shares in the Company under the rules of the 2020 LTIP: Non-Executive Directors’ Single Remuneration Figure The table below presents a single remuneration figure for each non-executive director (“NED”) for the years ended 31 December 2024 and 31 December 2023 in respect of performance during the years ended on those dates. Date of Grant Interest as at 1 January 2024 № granted in year Exercise price Expiry date Vested in year Total vested Exercised in year Lapsed in year Outstanding as at 31 December 2024 29-May-19 600,000 0 201.5p 28-May-24 0 600,000 600,000* 0 0 30-Jun-20 400,000 0 147.5p 29-Jun-30 0 400,000 0 0 400,000 24-Jun-21 400,000 0 309.0p 23-Jun-31 0 400,000 0 0 400,000 22-Jun-22 400,000 0 357.5p 30-Jun-27 133,333 400,000 0 0 400,000 22-May-23 400,000 0 327.0p 21-May-28 133,333 266,667 0 0 400,000 11-Jun-24 0 400,000 413.5p 11-Jun-29 133,334 133,334 0 0 400,000 *On 22 May 2024 Mr. Lavandeira exercised options over 600,000 ordinary shares in the capital of the Company when the market price was 482.45 pence per ordinary share. * Dr. Barma became Remuneration Committee Chair on 1 July 2024 and retired as Audit Committee Chair on 28 October 2024. * Mr. Davey retired as Chair on 1 July 2024. * Mr. Gregson became Chair on 1 July 2024. * Ms. Whittall joined the Board on 3 June 2024, became a member of the Audit Committee on 1 July 2024 and became Audit Committee Chair on 28 October 2024. 02. Governance Annual Report 2024 99 Atalaya Mining Copper, S.A. Implementation of the new Policy in 2025 Base salary The Committee reviewed the CEO’s annual base salary at the beginning of 2025 and determined to increase it by 3% to €520k with effect from 1 January 2025, in line with the general overall increases awarded to the wider workforce of 3%. Taxable benefits The Company may introduce private healthcare and/or life insurance for the benefit of the Executive Director. Annual bonus Subject to shareholder approval of the revised policy, the annual bonus opportunity for the CEO for 2025 will be capped at 150% of salary. Performance measures will be based on financial and operational targets linked to copper production, capital expenditure, audited net cash flow, health and safety and community engagement (60% of potential) and strategic, project and growth targets (30% of potential) and personal targets (10% of potential). The targets are considered to be commercially sensitive and therefore will be disclosed retrospectively in next year’s report. LTIP awards Following the preliminary announcement of the Company’s 2024 full-year results, the Committee intends to grant the CEO a 2025 LTIP award over shares equal to 175% of salary (i.e. within the normal 200% of salary normal individual limit) which will vest three years from grant and subject to a two year post vesting holding period. Awards will be structured as nil or nominal cost awards. The performance targets, which will be measured over the three years ending 31 December 2027 will be as follows: Performance Measure Weighting Performance Range Threshold Maximum Relative Performance 60% Total Shareholder Return vs. bespoke comparator group12 30% Median Upper quartile TSR vs. Global X Copper Miners ETF 30% In line with benchmark 30% out-performance over three-year performance period Performance Measure Weighting Performance Range13 Threshold On Target Maximum Absolute Performance 40% Strategic 30% Project performance – Northern Spain: Development of Touro project to commercial operation 15% 50% constructed Fully constructed and first concentrate production Fully constructed with sustainable full nameplate processing levels achieved Project performance – Southern Spain: Advancement of four projects14 to provide ore for treatment at Riotinto plant 15% Completion of two of four projects14 Completion of three of four projects14 Completion of all four projects14 Sustainability 10% Decarbonisation: Reduction in scope 1 and 2 emissions for concentrate production from 1 January 2022 baseline 5% 15% 25% 30% Tailings management – Completion of three projects15 to further improve management of tailings at Riotinto operation 5% Completion of one of three projects15 Completion of two of three projects15 Completion of all three projects15 (12) Antofagasta plc, Capstone Copper Corp., Central Asia Metals Ltd, Ero Copper Corp, Freeport-McMoRan Inc., Hudbay Minerals Inc., Lundin Mining Corporation, MAC Copper Ltd, Sandfire Resources Ltd, Southern Copper Corporation, and Taseko Mines Ltd. (13) Pro-rata vesting between: (i) threshold and maximum in respect of TSR; and (ii) threshold, target and maximum in respect of the strategic/sustaina bility targets where applicable. (14) » San Dionisio – develop of upper copper zone, define processing method for polymetallic ore and complete mine plan for underground section » San Antonio – complete of drilling programme, define the processing method for polymetallic ore and complete mine plan for underground section. » Masa Valverde – complete access to reach high copper zone and complete development to access ore. » Cerro Colorado – establish final pit limits. (15) » Optimise capacity of current tailings storage facility and establish an improved reclamation plan. » Identify additional capacity, complete the design of, and obtain permitting for a new tailings storage facility. » Achieve compliance with Global Industry Standard on Tailings Management (GISTM) with independent assurance and publication of annual report in line with principle 15.1.B of GISTM. 02. Governance Annual Report 2024 100 Atalaya Mining Copper, S.A. Rationale for selection of performance measures For 60% of the 2025 awards, the Committee decided to use a dual Total Shareholder Return (“TSR”) approach with half measured against a bespoke comparator group and half measured against the Global X Copper Miners ETF (the “ETF”) so that there is a balanced and fair assessment of performance: »» Measuring TSR against a bespoke comparator group incentivises direct outperformance against similar mining companies facing similar macroeconomic conditions and provides focused industry-specific benchmarking. Measuring TSR against the ETF ensures that broader market competitiveness is maintained. Using both these relative measures offers a broader sector-wide bench mark, ensuring that performance is not just measured against a selected comparator group but also against overall market trends in the copper mining industry. »» Using a combination of TSR vs. the bespoke comparator group and vs. the ETF ensures that the Company remains competitive on a global scale, avoiding a situation where outperforming a weak comparator group still results in suboptimal shareholder returns. »» Due to the cyclical nature of the copper industry, external factors such as copper price fluctuations can dispropor tionately impact TSR. Measuring performance against the ETF neutralises the impact of broader commodity price movements, ensuring that the CEO is rewarded for company-specific value creation rather than general sector tailwinds. For the remaining 40% of the 2025 awards, the Committee has decided to use a combination of strategic measures designed to create long-term sustainable shareholder value: »» The project performance metric reinforces accounta bility for disciplined project execution and operational excellence. »» Decarbonisation is a strategic priority for the mining industry driven by the industry’s role in enabling the global energy transition. Including this as a performance measure underscores the Company’s commitment to reducing its carbon footprint and enhancing opera tional efficiency and fosters accountability for achieving sustainability goals. »» The management of tailings is a critical ESG issue, directly impacting operational sustainability, regulatory compli ance, and stakeholder confidence. Including this as a performance metric reinforces the Company’s commit ment to responsible mining practices and risk mitigation and drives accountability and progress in implementing best-in-class tailings management measures. One-off transitional award As stated above, annual LTIP awards are proposed from 2025 onwards. However, assuming the initial LTIP award is granted after approval by the Board of this Annual Report, there will be no vesting event until 2028 (i.e. three years from grant), notwithstanding that the CEO has been in role for more than 10 years. Had similar long-term incentive awards been granted in earlier years instead of the market value options which are now being replaced, vesting opportuni ties would have occurred between 2025 and 2027. As retention of the CEO is crucial for the Company at this stage, the Committee believes that it is appropriate to make a final ‘transitional award’ of market value options to ensure vesting events take place in 2025, 2026, and 2027. The Committee considered various alternatives for the design of the transitional award: »» Restricted Share Awards with no performance conditions with staggered vesting over 2025, 2026, and 2027, but with a significant reduction to the face value of the award in recognition of the fact that the award would have a more certain outcome for the CEO; »» Market Value Options (“MVOs”) with staggered vesting over 2025, 2026, and 2027; »» Relative share price performance LTI measured over one, two, and three years; and »» Performance-related transitional LTI measured over one, two, and three years. The Committee carefully considered a performance award. However, as there would be a one-year short-term incentive and a three-year long-term incentive, both with perfor mance criteria; to try and overlay additional performance criteria to fit between the two was challenging. Having considered the pros and cons of the alternative approaches and consulting with major shareholders, the Committee’s preference was to grant a final award of MVOs consistent with the existing long-term incentive arrange ment. The rationale for and principle of this received broad support from those shareholders whom the Committee met with as part of its consultation exercise. In response to shareholder feedback, the Committee will apply a perfor mance ‘underpin’ to the vesting of the MVOs. Factors which the Committee will take into consideration when applying the discretionary ‘underpin’ include: »» the Company’s overall performance in terms of share price growth and total shareholder return; »» key financial and operational metrics; »» whether there have been material impairments or excep tional losses; and »» whether there have been significant environmental, social or reputational issues. 02. Governance Annual Report 2024 101 Atalaya Mining Copper, S.A. When proposing the quantum of the transitional award to the CEO, the Committee considered the total number of share options that would have vested in each of 2025, 2026 and 2027 (i.e. 400,000 MVOs each year) had further MVO awards been made on the same basis as in recent years. To deliver this vesting profile, an MVO award over 800,000 shares would be required, with 1/6th vesting in 2025, 1/3rd vesting in 2026 and 50% vesting in 2027. The Committee has considered the value of the MVOs and is comfortable that they are in line with the expected value of LTIs that would have been granted had the new scheme already been in place. Provision 36 of the Code provides that share awards should be subject to a total vesting and holding period of five years or more. The proposed one-off transitional award would not be in compliance with Provision 36. However, it is consid ered necessary to bridge the vesting gap between the previous MVO approach and the proposed annual three- year LTI policy. Given that this would be a ‘one-off’ award, it has not been included in the new Policy. However, a resolution authorising the grant of one final award of MVOs over 800,000 shares for the CEO in 2025 will be put to the forthcoming Annual General Meeting for shareholder approval. This transitional award of MVOs will be subject to the leaver provisions in the Rules of the Long-Term Incentive Plan 2020 as summarised on page 95. Chair fee £114,300 Base NED fee £66,300 Audit Chair fee £17,000 Other Committee Chair fee £12,000 Committee member fee £4,500 NED fees Current NED fees (denominated in Sterling), which remain unchanged from 1 January 2024 are as follows: NEDs receive no benefits and do not participate in any of the Company’s short- or long-term incentive plans. № of shares № of unvested share options № of vested share options Shareholding requirements Executive Director 17Mar25 31Dec24 31Dec23 17Mar25 31Dec24 31Dec23 17Mar25 31Dec24 31Dec23 31Dec24 A Lavandeira 880,000 880,000 430,000 400,000 400,000 400,000 1,600,000 1,600,000 1,800,000 Met* Non-Executive Directors 17Mar25 31Dec24 31Dec23 17Mar25 31Dec24 31Dec23 17Mar25 31Dec24 31Dec23 31Dec24 H Barma 0 0 0 n/a n/a n/a n/a n/a n/a n/a R Davey 0 0 0 n/a n/a n/a n/a n/a n/a n/a J Fernández **106,412 **106,412 65,000 n/a n/a n/a n/a n/a n/a n/a N Gregson 12,800 10,000 5,000 n/a n/a n/a n/a n/a n/a n/a K Harcourt 0 0 0 n/a n/a n/a n/a n/a n/a n/a S Scott 0 0 0 n/a n/a n/a n/a n/a n/a n/a C Whittall 0 0 0 n/a n/a n/a n/a n/a n/a n/a * As at 31 December 2024, the CEO’s shareholding requirement was 100% of his annual base salary. As at 31 December 2024 his shareholding of 880,000 was worth €3.82m which represented more than 800% of his base annual salary as at that date. ** Mr. Fernández is the appointee of Urion Holdings (Malta) Ltd which holds 30,821,213 shares in the Company (excluding Mr. Fernández’s personal holding of 106,412 shares). Additional information Payments to past directors There were no payments made to past directors during 2024. Payments for loss of office No payments in lieu of notice or for loss of office were made during 2024. Statement of directors’ shareholding and share interests Directors’ interests in shares as at 31 December 2024 are set out in the table below. 02. Governance Annual Report 2024 102 Atalaya Mining Copper, S.A. CEO pay history The total remuneration of the CEO, Alberto Lavandeira, for the past five years: Fixed Pay Variable Pay Total Salary Pension Benefits* Total fixed Cash bonus** Share Options*** Total variable FY2024 498,188 € 50,531 € 5,580 € 554,299 € 293,787 € 409,000 € 702,787 € 1,257,086 € FY2023 481,000 € 0 € 6,000 € 487,000 € 327,000 € 190,000 € 517,000 € 1,004,000 € FY2022 467,000 € 0 € 9,000 € 476,000 € 322,999 € 426,000 € 748,999 € 1,224,999 € FY2021 452,000 € 0 € 9,000 € 461,000 € 357,000 € 321,000 € 678,000 € 1,139,000 € FY2020 440,000 € 0 € 8,000 € 448,000 € 438,000 € 291,000 € 729,000 € 1,177,000 € * Lease car benefit in kind + taxes paid by Atalaya. **This is the bonus earned in respect of the relevant financial year - but it will not be / was not paid until the following year. *** The amount relates to the non-cash expense recognised in accordance with IFRS 2 Share Based Payments. On 11 June 2024 granted options over 400,000 Ordinary Shares at an exercise price of 413.5 pence per share (being the market value at grant). 133,334 vested on grant and the balance will vest in two equal tranches on the first and second anniversaries of grant. They expire on 11 June 2029. On 22 May 2023 granted options over 400,000 Ordinary Shares at an exercise price of 327.0 pence per share (being the market value at grant). 133,334 vested on grant, 133,333 vested on the first anniversary of grant and the balance will vest on the second anniversary of grant. They expire on 21 May 2028. On 22 June 2022 granted options over 400,000 Ordinary Shares at an exercise price of 357.5 pence per share (being the market value at grant). 133,334 vested on grant, 133,333 vested on the first anniversary of grant and the balance vested on the second anniversary of grant. They expire on 30 June 2027. On 24 June 2021 granted options over 400,000 Ordinary Shares at an exercise price of 309.0p per share (being the market value at grant). All have now vested, and they expire on 23 June 2031. On 30 June 2020 granted options over 400,000 Ordinary Shares at an exercise price of 147.5p per share (being the market value at grant). All have now vested, and they expire on 29 June 2030. 02. Governance Annual Report 2024 103 Atalaya Mining Copper, S.A. Total shareholder return performance graph and table The chart below shows the value by 31 December 2024 of a hypothetical £100 invested in Atalaya shares on 31 December 2014 compared with the value of £100 vested in the FTSE 250 index over the same period. Although Atalaya was first listed on the London Stock Exchange on 29 April 2024 and prior to that had been listed on AIM, the FTSE 250 was selected because it is considered to be the best comparator group for Atalaya going forward. 300 150 250 100 200 50 0 Total Shareholder Return Value (£) 2014 2020 2015 2022 2018 2024 2016 2021 2017 2023 2019 Atalaya Mining FTSE 250 2024 €’m 2023 €’m Change % Total employee costs 27.9 25.8 9% Dividends paid 10.3 11.5 (10%) Capital expenditure 66.1 54.3 22% CEO pay ratio table The Company has one employee employed in the UK and, as a result is exempt from the gender pay and average employee: CEO pay disclosure requirements. Relative importance of spend on pay The table below show the amount of dividends, and capital expenditure against employee costs for the last two finan cial years. APPROVAL This report was approved by the Board of Directors on 17 March 2025 and signed on its behalf by: HUSSEIN BARMA Remuneration Committee Chair 17 March 2025 02. Governance Annual Report 2024 104 Atalaya Mining Copper, S.A. 02. Governance 02. Governance Directors’ Report 02. Governance Annual Report 2024 Annual Report 2024 Annual Report 2024 There is no further information to be disclosed pursuant to LR 6.6.1R. Note LR 6.6.1R Statement of capitalised interest 8 Hussein Barma Roger Owen Davey Chair until 1 July 2024. Retired from the Board on 31 December 2024 Jesús Fernández Lopez Neil Dean Gregson Chair from 1 July 2024 Kate Jane Harcourt Senior Independent Director from 1 July 2024 Alberto Arsenio Lavandeira Adán Chief Executive Officer & Managing Director Stephen Victor Scott Carole Helene Whittall Appointed 3 June 2024 The Directors present their report, together with the audited financial statements for the year ended 31 December 2024. In addition to the information set out herein, this Directors’ Report incorporates by reference the following sections of the Annual Report: »» Strategic report »» Governance report »» Additional directors’ report disclosures »» Financial statements In accordance with the requirements of Spanish corporate law for the preparation of consolidated financial state ments, Atalaya Mining Copper, S.A. includes a Management Report as an integral part of this Annual Report. The infor mation required under Article 262 of the Spanish Capital Companies Act (Ley de Sociedades de Capital) and Article 49 of the Commercial Code has been incorporated into the Strategic Report and the Governance Report. These sections provide a comprehensive overview of the Group’s business performance, financial position, principal risks and uncertainties, outlook, and non-financial infor mation, ensuring full compliance with applicable Spanish regulatory requirements. Accordingly, the Annual Report, in its entirety, serves as the Group’s Management Report, fulfilling all legal disclosure obligations. Listing Rule 6.6.4R Information required to be disclosed under the Financial Conduct Authority’s Listing Rule 6.6.1R can be found in the following note to the financial statements: Members of the Board of Directors The Directors of the Company in office at the date of this report, together with their biographical and independence details, are listed on pages 55 to 58. The Directors of the Company who served during the year under review are listed below: Principal activity The principal activity of the Group is the production and sale of copper and other critical metals. Results The Group’s results for the year ended 31 December 2024 are detailed in the Financial Review on page 39, and the consolidated income statement is provided on page 115. Dividends An interim dividend of US$0.04 per ordinary shares was paid on 19 September 2024 (2023: US$0.05) to share holders on the register on 23 August 2024. The Board is recommending the payment of a final dividend of US$0.03 per ordinary share. Information given to the auditor Each Director has confirmed that, so far as they are aware, there is no relevant audit information of which the Compa ny’s auditor is unaware. Furthermore, each Director has taken the necessary steps to ensure that they are aware of any relevant audit information. 02. Governance Annual Report 2024 105 Atalaya Mining Copper, S.A. Political donations and expenditure The Group made no political donations during the year ended 31 December 2024 (2023: €nil). The Company’s policy prohibits the payment of political donations and expenditure. Important events since year end Details of any important events that occurred after the balance sheet date are provided in note 35 to the financial statements on page 169. Future developments The Company is focused on expanding its asset base, particularly through advancing exploration and devel opment activities at Proyecto Touro and Proyecto Masa Valverde. Further details about these initiatives and our future growth strategy are outlined in the Strategic Report. Research and development activities R&D projects are an essential driver for increase the capacity and the Life of Mine (“LOM”) of the actual mines with more sustainable energy models and meeting the chal lenge of decarbonisation in industrial production. In recent years, Atalaya have made efforts to create a specific department for Innovation to collaborate internally and with our external partners. Main current activities are related to developing tech nologies for the treatment of acidic waters, recovery of metals and co-products from acidic waters and implement magnetic aggregation technology in the flotation circuit to increase metallurgical yields. Some of these activities have been granted with European funds and executed in collabo ration with universities and international companies. For further information, see our Sustainability Report 2024. Acquisition of own shares The Company did not acquire any of its own shares during the period under review. Branches The Company does not operate any branches either inside or outside the UK. Financial risk management The required disclosure can be found in Note 3 to the finan cial statements. Directors’ responsibilities The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with appli cable law and regulations. They ensure that the financial statements give a true and fair view of the state of the Company and are prepared in line with International Finan cial Reporting Standards (IFRS) as adopted by the Euro pean Union. A full statement of Directors’ responsibilities is provided on page 116. Employee Engagement Our employees are at the heart of our operations. The ways in which we engage with our workforce are discussed in the sustainability report, ensuring open communication, safety, and well-being across all operations. Supplier and customer engagement Information on the Board’s engagement with its suppliers and customers is detailed in our Sustainability Report 2024. Share capital ↘↘Structure The Company has one class of ordinary shares which, until 27 December 2024, were denominated as shares of GBP 7.5 pence each nominal value and since 27 December 2024 have been denominated as ordinary shares of EUR 0.09 each nominal value. Details of the Company’s authorised and issued share capital, together with movements in the issued share capital during the year, can be found in Note 23 to the financial statements on page 158. ↘↘Restrictions There are no specific restrictions on the size of a holding or on the transfer of shares, which are both governed by the provisions of the Company’s articles of association and prevailing Spanish legislation. ↘↘Major shareholdings As of 31 December 2024, the Company has been advised of the following major holdings in its issued share capital, in accordance with DTR 5. Ordinary Shares % Urion Holdings (Malta) Ltd (subsidiary of Trafigura Group Pte. Ltd.) 30,821,212 21.93% Cobas Asset Management, SGIIC, S.A. 21,170,270 15.04% Ithaki Limited 8,420,633 6.02% Hamblin Watsa Investment Counsel (subsidiary of Fairfax Financial Holding Ltd.) 8,251,795 5.87% The interests in the table above are as stated by the shareholder at the time of the notification and current interests may vary. Between 31 December 2024 and the date of this Report, the Company has not been advised of any changes to its major shareholders. ↘↘Special rights relating to control of the Company No person has any special rights with regard to the control of the Company’s share capital and all issued shares are fully paid. 02. Governance Annual Report 2024 106 Atalaya Mining Copper, S.A. »» at least two-thirds of the votes cast to be in favour (where between 25% and 50% of the Voting Share Capital is represented); or »» an absolute majority of the votes cast to be in favour (where more than 50% of the Voting Share Capital is represented). Directors’ powers The powers of the Directors are determined by the Compa ny’s Articles of Association (estatutos sociales) and the Spanish Companies Act (Ley de Sociedades de Capital). Change of control The following significant agreements could allow counter parties to terminate or alter arrangements in the event of a change of control: »» the Group’s borrowing facilities; and »» Arrangements with Lain Technologies Ltd., the owner of the E-LIX technologies. The Rules of the Long-Term Incentive Plan 2020 contain provisions as a result of which options and awards may vest and become exercisable on a change of control of the Company in accordance with the rules of that plan. The CEO’s service contract includes a change of control provision whereby in the event that there a change of control and within 12 months after the event (i) the contract is terminated by the Company; or (ii) the employee termi nates his contract with at least three months’ notice due to a pre-agreed good reason, the executive will receive the equivalent to 24 months’ base salary less any payment made in lieu of notice and any legal severance payment. In addition, five other members of the management team have similar provisions in their employment agreements. Directors’ liabilities The Company has purchased insurance against Directors’ and Officers’ liability for the benefit of directors and officers of the Company and its subsidiaries. The Company has provided indemnities to each Director in respect of liabilities in connection with the performance of their duties. These indemnities remained in place throughout the year and continue as of the date of this report. Auditor Following a comprehensive tender process led by the Audit Committee, the Board appointed a new auditor for the Group, effective for the three financial years starting 1 January 2024 and ending on 31 December 2027. This appointment reflects the recent relocation of the Compa ny’s domicile to Spain. Shareholders approved the new auditor’s appointment at the time that they approved the re-domiciliation of the Company, and the appointment was subject to the condition that the cross-border conver sion took effect before the end of 2024. Further details regarding the tender process can be found on page 79. No shares relating to The Atalaya Mining Long-Term Incentive Plan 2020 have rights with regard to control of the Company that are not exercisable directly by the employees. ↘↘Restrictions on voting rights Each share carries the right to one vote at general meet ings of the Company. ↘↘Agreements between shareholders restricting transferability The Directors are not aware of any agreements between holders of the Company’s shares that may have resulted in restrictions on the transfer of shares or on voting rights. Directors’ interests in shares Details of Directors’ beneficial interests in the Company’s shares are outlined in the Directors’ Remuneration Report on page 101. Appointment and replacement of directors It is the Board’s policy that all Directors should retire and, should the Director wish to continue in office, seek election or re-election annually. The Company’s articles of association provide that direc tors serve for a term of one year, although they may be re-elected for further terms of the same maximum duration. If a director leaves their position before the end of their term, the Board of Directors can appoint a replacement to serve only for the remaining term of the departing director. The appointment of the replacement director is only temporary and must be ratified at the next general share holder’s meeting. Directors may be removed from office at any time by shareholders, even if their removal is not on the agenda of a general meeting. Amendment to Articles of Association Under the Spanish Companies Act (Ley de Sociedades de Capital), any amendment to a company’s articles of association (estatutos sociales) must be approved by shareholders at a validly constituted general meeting (junta general). For a general meeting to be validly constituted for this purpose, shareholders together holding at least 50% of all the shares in the capital of the Company which carry voting rights (the “Voting Share Capital”) must be present in person or by proxy. If this quorum is met, an absolute majority of the votes cast must be in favour for the amendment to be approved. If this quorum is not met, a further general meeting may be held. That adjourned meeting will be validly constituted if it is attended by shareholders in person or by proxy repre senting at least 25% of the Voting Share Capital. In that event, the amendment will require: 02. Governance Annual Report 2024 107 Atalaya Mining Copper, S.A. Annual General Meeting The Annual General Meeting of the Company will be held at Hamilton House, 1 Temple Avenue, London EC4Y 0HA, United Kingdom on Tuesday, 24 June 2025 at 11am. The notice convening the meeting will be given in a separate document and will include a commentary on the business of the AGM, will explain how shareholders can take part and will include notes to help shareholders exercise their rights at the meeting. NEIL GREGSON Chair Atalaya Mining Copper, S.A. 17 March 2025 NEIL GREGSON Chair Atalaya Mining Copper, S.A. 17 March 2025 Responsibility Statement of the Directors in respect of the Annual Report and Financial Statements The Directors are responsible for preparing the Annual Report (which comprises the Strategic Report, the Governance Report, and Other Disclosures), and Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and applicable laws and regulations. The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s and Group’s transactions and which disclose with reasonable accuracy at any time the financial position of the Company and of the Group and enable them to ensure that the financial statements comply with applicable law and regula tions. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors confirm that, to the best of their knowledge: »» suitable accounting policies have been selected and applied; »» judgements and estimates made have been reasonable, relevant and reliable; »» the Financial Statements comply with IFRS as adopted by the European Union; »» the Company and Group’s ability to continue as a going concern has been assessed and it is appropriate that the financial statements have been prepared on the going concern basis. The Annual Report and Financial Statements are the responsibility of, and have been approved by, the Directors. Each of the Directors named on pages 54 to 59 confirms that to the best of his/her knowledge: »» the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the infor mation necessary for shareholders to assess the Group’s position and performance, business model and strategy; »» the consolidated financial statements, prepared in accordance with IFRS as adopted by the EU and the relevant provisions of Spanish law, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the under takings included in the consolidation taken as a whole; and »» the Annual Report includes a fair review of the development and performance of the business and the position of the Group and Company and the undertakings included in the consolidation taken as a whole, together with a description of the risks and uncertainties that they face. This responsibility statement was approved by the Board of Directors on 17 March 2025 and is signed on its behalf by 03. Financial Statements Annual Report 2024 108 Atalaya Mining Copper, S.A. 03 Financial Statements 03. Financial Statements Independent Auditor’s Report.................................................109 Consolidated Financial Statements. ........................................115 Notes to the consolidated financial statements......................119 03. Financial Statements Annual Report 2024 109 Atalaya Mining Copper, S.A. 03. Financial Statements Annual Report 2024 Independent Auditor’s Report 03. Financial Statements Annual Report 2024 110 Atalaya Mining Copper, S.A. 03. Financial Statements Annual Report 2024 111 Atalaya Mining Copper, S.A. 03. Financial Statements Annual Report 2024 112 Atalaya Mining Copper, S.A. 03. Financial Statements Annual Report 2024 113 Atalaya Mining Copper, S.A. 03. Financial Statements Annual Report 2024 114 Atalaya Mining Copper, S.A. 03. Financial Statements Annual Report 2024 115 Atalaya Mining Copper, S.A. Consolidated Financial Statements 03. Financial Statements Annual Report 2024 (Euro 000’s) Note 2024 2023 Revenue 5 326,797 340,346 Operating costs and mine site administrative expenses (240,784) (246,630) Mine site depreciation, amortisation and impairment 13,14 (36,617) (37,800) Gross profit 49,396 55,916 Administration and other expenses (7,927) (12,741) Share based benefits 24 (1,379) (661) Impairment loss on financial and contract assets 15 (1,204) - Exploration expenses (7,950) (6,467) Care and maintenance expenditure (2,784) (2,384) Other income 383 1,637 Operating profit 28,535 35,300 Net foreign exchange gain/(loss) 4 3,090 (1,278) Interest income from financial assets at amortised cost 8 1,887 5,393 Finance costs 9 (1,989) (3,322) Profit before tax 31,523 36,093 Tax 10 1,037 570 Profit for the year 32,560 36,663 Profit for the year attributable to: »» Owners of the parent 25 31,738 38,769 »» Non-controlling interests 25 822 (2,106) 32,560 36,663 Earnings per share from operations attributable to ordinary equity holders of the parent during the year: Basic earnings per share (EUR cents per share) 11 22.6 27.7 Diluted earnings per share (EUR cents per share) 11 21.8 26.9 Profit for the year 32,560 36,663 Other comprehensive income: - - Other comprehensive income that will not be reclassified to profit or loss in subsequent periods (net of tax): Change in fair value of financial assets through other comprehensive income ‘OCI’ 21 (7) (2) Total comprehensive income for the year 32,553 36,661 Total comprehensive income for the year attributable to: »» Owners of the parent 25 31,731 38,767 »» Non-controlling interests 25 822 (2,106) Consolidated Statement of Comprehensive Income for the year ended 31 December 2024 The notes on subsequent pages are an integral part of these consolidated financial statements 03. Financial Statements Annual Report 2024 116 Atalaya Mining Copper, S.A. (Euro 000’s) Note 31 Dec 2024 31 Dec 2023 Non-current assets Property, plant and equipment 13 409,032 384,739 Intangible assets 14 70,209 49,397 Loans 19 2,627 - Trade and other receivables 20 33,252 26,702 Non-current financial asset 21 1,101 1,101 Deferred tax asset 17 15,085 11,282 531,306 473,221 Current assets Inventories 18 49,162 33,314 Loans 19 5,352 - Trade and other receivables 20 36,863 42,897 Tax refundable 266 100 Other financial assets 21 23 30 Cash and cash equivalents 22 52,878 121,007 144,544 197,348 Total assets 675,850 670,569 Equity and liabilities Equity attributable to owners of the parent Share capital 23 12,668 13,596 Share premium 23 321,856 319,411 Other reserves 24 88,774 70,463 Accumulated profit 93,085 98,026 516,383 501,496 Non-controlling interests 25 2,154 (9,104) Total equity 518,537 492,392 Liabilities Non-current liabilities Trade and other payables 26 13,983 2,205 Provisions 27 29,328 27,234 Lease liability 28 3,320 3,877 Borrowings 29 10,866 16,131 57,497 49,447 Current liabilities Trade and other payables 26 90,090 75,922 Lease liability 28 481 501 Current tax liabilities 1,408 1,317 Provisions 27 916 434 Borrowings 29 6,921 50,556 99,816 128,730 Total liabilities 157,313 178,177 Total equity and liabilities 675,850 670,569 Consolidated Statement of Financial Position As at 31 December 2024 The notes on subsequent pages are an integral part of these consolidated financial statements. The consolidated financial statements were authorised for issue by the Board of Directors on 17 March 2025 and were signed on its behalf. 03. Financial Statements Annual Report 2024 117 Atalaya Mining Copper, S.A. (Euro 000’s) Note Share capital Share premium Other reserves16 Accum. Profits Total NCI Total equity 1 Jan 2024 13,596 319,411 70,463 98,026 501,496 (9,104) 492,392 Profit for the period - - - 31,738 31,738 822 32,560 Change in fair value of financial assets through other comprehensive income ‘OCI’ 21 - - (7) - (7) - (7) Total comprehensive (loss)/income - - (7) 31,738 31,731 822 32,553 Issuance of share capital 23 76 2,445 - - 2,521 - 2,521 Recognition of depletion factor 24 - - 8,949 (8,949) - - - Recognition of non-distributable reserve 24 - - 1,843 - 1,843 - 1,843 Recognition of distributable reserve 24 - - 142 (142) - - - Recognition of share-based payments 24 - - 7,385 (7,385) - - - Other changes in equity (1,004) - (1) 542 (463) - (463) Revaluation of non-controlling interest - - - (10,439) (10,439) 10,436 (3) Dividends paid 12 - - - (10,306) (10,306) - (10,306) 31 Dec 2024 12,668 321,856 88,774 93,085 516,383 2,154 518,537 (Euro 000’s) Note Share capital Share premium Other reserves12 Accum. Profits Total NCI Total equity 1 Jan 2023 13,596 319,411 69,805 70,483 473,295 (6,998) 466,297 Profit/(loss) for the period - - - 38,769 38,769 (2,106) 36,663 Change in fair value of financial assets through other comprehensive income ‘OCI’ 21 - - (3) - (3) - (3) Total comprehensive (loss)/income - - (3) 38,769 38,766 (2,106) 36,660 Recognition of share-based payments 24 - - 661 - 661 - 661 Other changes in equity - - - 252 252 - 252 Dividends paid 12 - - - (11,478) (11,478) - (11,478) 31 Dec 2023 13,596 319,411 70,463 98,026 501,496 (9,104) 492,392 Consolidated Statement of Changes in Equity for the year ended 31 December 2024 (16) Refer to Note 23. The notes on subsequent pages are an integral part of these consolidated financial statements. 03. Financial Statements Annual Report 2024 118 Atalaya Mining Copper, S.A. (Euro 000’s) Note 2024 2023 Cash flows from operating activities Profit before tax 31,523 36,093 Adjustments for: Depreciation of property, plant and equipment 13 39,658 33,307 Amortisation of intangible assets 14 3,907 4,493 Recognition of share based payments 24 1,379 660 Interest income 8 (1,887) (5,392) Interest expense 9 1,161 2,607 Unwinding of discounting 9 828 690 Legal provisions 27 (1,255) 1 Impairment loss on financial and contract assets 6 1,205 - Reversal of Intangible Asset Impairment 14 (6,948) - Net foreign exchange differences (3,090) 1,278 Unrealised foreign exchange (loss)/gain on financing activities (85) (1,492) Cash inflows from operating activities before working capital changes 66,396 72,245 Changes in working capital: Inventories 18 (14,958) 5,527 Trade and other receivables 20 (1,247) 10,918 Trade and other payables 26 5,595 (14,924) Provisions 27 (434) (1,203) Cash flows from operations 55,352 72,563 Interest expense on lease liabilities 28 (30) (25) Interest paid (1,131) (2,607) Tax paid (788) (5,188) Net cash from operating activities 53,403 64,743 Cash flows from investing activities Purchases of property, plant and equipment 13 (60,212) (53,837) Purchases of intangible assets 14 (1,198) (460) Payments for investments 19 (5,305) - Interest received 8 642 3,891 Net cash used in investing activities (66,073) (50,406) Cash flows from financing activities Lease payment 28 (577) (536) Proceeds from borrowings 29(a) 3,000 36,810 Repayment of borrowings 29(a) (51,900) (43,296) Proceeds from issue of share capital 2,522 - Dividends paid 12 (10,306) (11,478) Net cash (used in)/from financing activities (57,261) (18,500) Net decrease in cash and cash equivalents (69,931) (4,163) Net foreign exchange difference 1,802 (1,278) Cash and cash equivalents: At beginning of the year 22 121,007 126,448 At end of the year 22 52,878 121,007 Consolidated Statement of Cash Flows for the year ended 31 December 2024 The notes on subsequent pages are an integral part of these consolidated financial statements. 03. Financial Statements Annual Report 2024 119 Atalaya Mining Copper, S.A. Annual Report 2024 Notes to the consolidated financial statements. 03. Financial Statements 1. Incorporation and summary of business »» Atalaya’s corporate seat was transferred from Cyprus to Spain, and Atalaya became a Spanish public limited company (Sociedad Anónima) under the laws of the Kingdom of Spain; »» Atalaya’s registered name changed from Atalaya Mining Plc to Atalaya Mining Copper, S.A.; and; »» Atalaya’s registered address changed from 1, Lampousas Street, 1095 Nicosia, Cyprus to Paseo de las Delicias, 1, 3, 41001, Sevilla, Spain. The Company’s shares commenced trading under “Atalaya Mining Copper, S.A.” on 10 January 2025 at 8:00 am (London time) and the nominal value of the Company’s shares were also adjusted from 7.5p to €0.09 per share. 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 Europe and Latin America. The Group has interests in four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group has an earn-in agreement to acquire certain investigation permits at Proyecto Riotinto East. Additional information about the Company is available at www.atalayamining.com. 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 brown field expansion of this mine was completed in 2019 and successfully commissioned by Q1 2020. Atalaya Mining Plc 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 was at 1 Lampousa Street, Nicosia, Cyprus. The Company was first listed on the Alternative Investment Market (AIM) of the London Stock Exchange in May 2005. Change of name and share consolidation (2015) 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 consol idation 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. The Company’s trading symbol became “ATYM”. On 29 April 2024, the Company was admitted to trading on the main market of the London Stock Exchange. Cross-border conversion (re-domiciliation) (2024-2025) On 10 January 2025, the Company successfully completed a cross-border conversion, resulting in its re-domiciliation from the Republic of Cyprus to the Kingdom of Spain. This process was carried out in accordance with the Company’s strategic objectives to align its corporate structure with its operational base in Spain. A cross-border conversion deed was executed on 23 December 2024 and subsequently filed with the Spanish Commercial Registry on 27 December 2024. Under Spanish corporate law, the re-domiciliation became legally effective from the date of registration with the Spanish Commercial Registry, i.e., 27 December 2024. However, for admin istrative and procedural purposes, the final formalities were completed on 9 January 2025, with the official public announcement being made on 10 January 2025. Following this change: 03. Financial Statements Annual Report 2024 120 Atalaya Mining Copper, S.A. Proyecto Touro The Group initially acquired a 10% stake in Cobre San Rafael, S.L. (“CSR”), the owner of Proyecto Touro, as part of an earn-in agreement, which was designed to enable the Group to acquire up to 80% of the copper project. Proyecto Touro is located in Galicia, north-west Spain, and is currently in the permitting process. In July 2017, the Group announced that it had executed the option to acquire 10% of the share capital of CSR, a wholly owned subsidiary of Explotaciones Gallegas S.L. This acquisition was part of an earn-in agreement, structured in four phases, allowing the Group to progressively increase its stake in CSR up to 80%: »» Phase 1: The Group paid €0.5 million to secure the exclusivity agreement and committed to funding up to a maximum of €5.0 million to support the permitting and financing stages. »» Phase 2: Upon receipt of permits, the Group is required to pay €2.0 million to acquire an additional 30% interest in the project (cumulative 40%). »» Phase 3: Once development capital is secured and construction commences, the Group is required to pay €5.0 million to acquire an additional 30% interest in the project (cumulative 70%). »» Phase 4: Upon declaration of commercial production, the Group purchases an additional 10% interest (cumu lative 80%) in exchange for a 0.75% Net Smelter Return royalty, with a buyback option. The Agreement was structured to ensure that each phase and corresponding payment would only occur once the project was de-risked, permitted, and operational.. On 24 June 2024, Atalaya announced that Proyecto Touro, via its local entity Cobre San Rafael, was declared a strategic industrial project by the Council of the Xunta de Galicia (“XdG”). Under legislation of the Autonomous Community of Galicia, the status of strategic industrial project (or in Spanish, Proyecto Industrial Estratégico (“PIE”)) acts to simplify the administrative procedures associated with the development of industrial projects and intends to substantially reduce permitting timelines. This declaration highlights the XdG’s commitment to promoting new investment that will benefit the region and also support the objectives of the European Union. Copper is considered a strategic raw material by the EU and this project has the potential to become a new source of sustainable European copper production. The XdG is continuing its review according to the simplified procedures afforded to projects with PIE status. The public information period, which serves to inform the surrounding communities and organisations about the proposed project, concluded on 31 January 2025. Cobre San Rafael is currently focused on analysing and responding to the feedback submitted during the public information period and assessing the sectoral reports issued by the various departments of the XdG. As a result of the changes occurred during the year, the Group considers that it is likely that phases 2, 3 and 4 of the Touro project may be completed, and therefore, in application of the Group’s policy on contingent payments (Note 2.31), it has recorded an intangible asset amounting to €16.5 million at the end of the year (Note 14), as well as the corresponding contingent liabilities (note 26). In line with the Group’s policy on non-controlling interests (note 2.3), the Group has allocated 20% of this new intan gible asset in non-controlling interests, amounting to €3.3 million (Note 25). As described in note 14 and linked to the Group’s expecta tion that future phases may be completed, the Group has reversed an impairment recorded in 2019 on intangible fixed assets amounting to €6.9 million, which corresponded to capitalised expenses associated with Proyecto Touro. In addition, the Company continues to engage with the many stakeholders in the region including through various recruitment initiatives, and is restoring the water quality of the rivers around Touro by operating its water treatment plant. The Company also continues infill and step-out drilling programmes focused on areas captured in the initial mine plan and where mineralisation remains open. 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. n November 2023, the exploitation permit for the Masa Valverde and Majadales deposits was officially granted. Following this milestone, in January 2024, the Company made a payment of €0.7 million as part of the process associated with the granted permits. Proyecto Ossa Morena In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owned 9 investigation permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa-Morena Metallogenic Belt. In Q3 2022, Atalaya increased its ownership interest in POM to 99.9%, up from 51%, following completion of a capital increase that will fund exploration activities. During 2022 Atalaya rejected 8 investigation permits. Atalaya will pay a total of €2.5 million in cash in three instal ments and grant a 1% net smelter return (“NSR”) royalty over all acquired permits. The first payment of €0.5 million was made following execution of the purchase agreement. The 03. Financial Statements Annual Report 2024 121 Atalaya Mining Copper, S.A. 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 investi gation permits acquired under the Transaction are secured. In accordance with the agreement, these outstanding instalments are disclosed as a non-current payable to the sellers (Note 26). Proyecto Riotinto East 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. After a short drilling campaign, the Los Herreros investigation permit was rejected in June 2022. Proyecto Riotinto East consists of the remaining two investigation permits, Peñas Blancas and Cerro Negro, totalling 10,016 hectares. Skellefte Belt Project and Rockliden Project During the year, the Group entered into agreements with Mineral Prospektering i Sverige AB in relation to the Skellefte Belt Project and the Rockliden Project, both situated in well-established volcanogenic massive sulphide districts renowned for their mineral resource potential. In 2024, a total of €1.2 million in funding was provided to MPS in relation to preparatory work for the planned winter drilling campaigns and to compensate for certain past expendi tures incurred by MPS (Note 15). Overview of assets by mining projects The following table presents the allocation of assets across the Company’s mining operations, distinguishing between mining assets, which include exploration, development, and production-related investments, and non-mining assets, covering infrastructure, equipment, and other supporting assets. Net book value (€'000) Proyecto Touro Proyecto Ossa Morena Proyecto Masa Valverde Proyecto Riotinto Proyecto Riotinto East Total Mining assets 31,894 2,101 3,842 441,295 50 479,182 Non-mining assets - - - 59 - 59 31,894 2,101 3,842 441,354 50 479,241 2. Summary of material accounting policies 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 consolidated financial statements of Atalaya Mining Copper, S.A. and its subsidiaries (together, the “Group”) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (EU). IFRS comprise the standards issued by the International Accounting Standards Board (“IASB”), as endorsed by the EU for application by publicly listed companies. The consolidated financial statements are presented in Euros (€), with all amounts rounded to the nearest thousand (€’000), unless otherwise stated. As a Spanish company operating under EU regulations, the Group also complies with the requirements of Spanish corporate law, including the Commercial Code (Código de Comercio) and the Spanish Capital Companies Act (Ley de Sociedades de Capital), where applicable. These regula tions govern the preparation and disclosure of consolidated financial statements. The definition of Public Interest Entity (“PIE”) is set out in Article 2.13 of Directive 2006/43/EC, amended by Article 1 of Directive 2014/56/EU, that states that it is considered to be PIEs: (a) entities governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market of any Member State; (b) credit institu tions as defined in point 1 of Article 3(1) of Directive 2013/36/ EU; (c) insurance undertakings within the meaning of Article 2(1) of Directive 91/674/EEC; and (d) entities designated by Member States as public-interest entities. As the company is not included in any of the categories above, it is not considered to be a PIE. The preparation of these financial statements in conformity with IFRS requires the application of critical accounting esti mates and judgements. Management must exercise its best 03. Financial Statements Annual Report 2024 122 Atalaya Mining Copper, S.A. judgement when applying the Group’s accounting policies, particularly in areas involving complex transactions, esti mates, and assumptions. The key areas requiring significant judgment or estimates are disclosed in Note 3.3. (b) Going concern These consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will continue to operate and meet its financial obliga tions in the normal course of business. The Directors have assessed the Group’s financial position, operational performance, and external market conditions for a period of at least 12 months from the date of approval of these financial statements. This assessment considered: Copper price volatility and foreign exchange fluctuations, given their direct impact on revenue and profitability; production levels and cost profile, ensuring the Group main tains operational efficiency and financial resilience; capital expenditure and ongoing development projects, aligning with the Group’s strategic and operational needs; liquidity and borrowing facilities, confirming the Group’s ability to meet financial obligations as they fall due; energy cost stability, supported by the commissioning of a solar power plant and a long-term PPA to mitigate electricity price vola tility, regulatory and geopolitical risks, ensuring compliance with evolving industry regulations and addressing potential global market disruptions; copper head grade variability, with sensitivity analyses conducted to evaluate the impact of potential fluctuations in ore quality. Following a comprehensive review of forecasts, finan cial resources, and stress-tested downside scenarios, the Directors have concluded that there are no material uncertainties that could reasonably be expected to cast significant doubt on the Group’s ability to continue oper ating as a going concern. Accordingly, the going concern basis of accounting remains appropriate for the preparation of these consolidated financial statements. The Directors and Management will continue to monitor external factors, including market conditions and regulatory developments, to ensure the Group remains well-posi tioned to navigate potential challenges. 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 2024. ↘↘IFRS 16 (Amendment) – Lease Liability in a Sale and Leaseback The amendment to IFRS 16 clarifies how a company should account for a sale and leaseback transaction after the transaction date. While IFRS 16 already includes requirements on how to recognise a sale and leaseback at the transaction date, it did not previously specify how to record the transaction thereafter. The amendment provides additional guidance on how entities should measure lease liabilities that arise in a sale and leaseback transaction. This amendment became effective from 1 January 2024. After assessment, management has concluded that this amendment has no material impact on the Group’s consolidated financial statements. ↘↘IAS 1 (Amendment) – Classification of Liabilities as Current or Non-Current and IAS 1 (Amendment) – Non-Current Liabilities with Covenants The amendments to IAS 1 clarify that the classification of liabilities as current or non-current depends on the rights that exist at the reporting date, rather than manage ment’s expectations or post-balance sheet events (e.g., waivers or covenant breaches). Additionally, the amendments improve disclosure requirements when the right to defer the settlement of a liability is conditional on meeting covenants within 12 months after the reporting date. These amendments became effective on 1 January 2024 and must be applied retrospectively under IAS 8 (“Accounting Policies, Changes in Accounting Esti mates, and Errors”). After assessment, management has concluded that this amendment has no material impact on the Group’s consolidated financial statements. ↘↘IAS 7 (Amendment) and IFRS 7 (Amendment) – Supplier Finance Arrangements (“Confirming”) The IASB has amended IAS 7 and IFRS 7 to enhance disclosure requirements for supplier finance arrange ments (“confirming”) and their impact on liabilities, cash flows, and liquidity risk exposure. These amendments address investor concerns regarding the lack of trans parency in the reporting of supplier finance arrange ments. This amendment became effective on 1 January 2024. After assessment, management has concluded that this amendment has no material impact on the Group’s consolidated financial statements. 03. Financial Statements Annual Report 2024 123 Atalaya Mining Copper, S.A. Standards issued but not yet effective and not yet adopted by the Group The following amendment has been issued but is not yet effective for the Group. While its mandatory application begins on 1 January 2025, early adoption is permitted. ↘↘IAS 21 (Amendment) – Lack of Exchangeability The IASB has amended IAS 21 to introduce new require ments to help entities determine whether a currency is exchangeable into another currency and, if not, how to determine the appropriate spot exchange rate to use. When a currency is not exchangeable, an entity must estimate the spot exchange rate on the valuation date, reflecting the rate at which an orderly exchange trans action between market participants would occur under prevailing economic conditions. Upon initial application of this amendment, entities are not required to restate comparative information. Instead, affected balances must be translated using the esti mated spot exchange rate at the initial application date, with the resulting adjustment recognised in reserves. This amendment becomes effective on 1 January 2025, with early adoption permitted. Following our assessment, we have determined that this amendment does not have a material impact on the Group’s consolidated financial statements. Standards, Interpretations, and Amendments to Existing Standards Not Yet Endorsed by the European Union or Not Available for Early Adoption As of the date of preparation of these consolidated financial statements, the IASB and the IFRS Interpretations Committee have issued the following standards, amend ments, and interpretations that are still pending endorse ment by the European Union. Since these standards cannot yet be adopted, we have assessed their potential impact on the Group’s consoli dated financial statements once they become applicable. ↘↘IFRS 10 (Amendment) and IAS 28 (Amendment) – Sale or Contribution of Assets Between an Investor and Its Asso ciate or Joint Venture These amendments clarify the accounting treatment for sales and contributions of assets between an investor and its associates or joint ventures, depending on whether the non-monetary assets transferred consti tute a “business” under IFRS 3. If the assets qualify as a business, the investor must recognise the full gain or loss on the transaction. Otherwise, the investor recognises only the portion of the gain or loss attributable to other investors. Originally, these amendments were set to be applied prospectively from 1 January 2016, but in late 2015, the IASB postponed their effective date indefinitely, pending a broader review of the accounting treatment for asso ciates and joint ventures. As these amendments remain indefinitely deferred and pending EU endorsement, their potential impact on the Group has adopted the following accounting policy in accordance with IAS 8: Since the Group does not engage in business combina tions, the sale or contribution of assets to a joint venture is accounted for by recognising only the portion of the gain or loss attributable to other investors in the joint venture. ↘↘IFRS 18 – Presentation and Disclosures in Financial Statements IFRS 18 is a newly issued standard that replaces IAS 1 (Presentation of Financial Statements) while retaining many of its core principles. However, it introduces key changes, including: έέ A structured format for the income statement, requiring specific totals and subtotals and catego rising items into five sections: operating, investing, financing, income taxes, and discontinued operations. έέ Disclosure requirements for performance measures reported in financial statements (management-de fined performance measures). έέ Enhanced aggregation and disaggregation principles applicable to both primary financial statements and notes. Although IFRS 18 does not affect recognition or meas urement principles, it may alter how entities present their operating result. This standard becomes effective from 1 January 2027, including interim financial statements, and requires retro spective application. Early adoption is permitted, but it is still pending EU endorsement. Following our preliminary assessment, IFRS 18 is expected to impact the presentation and disclosures in the Group’s consolidated financial statements but will not affect recognition or measurement principles. ↘↘IFRS 19 – Subsidiaries Without Public Accountability: Disclosures IFRS 19 is a new standard designed for subsidiaries without public accountability whose parent company applies full IFRS in its consolidated financial statements. It allows such subsidiaries to follow IFRS recognition and measurement principles while applying reduced disclo sure requirements. This voluntary standard applies to subsidiaries preparing consolidated, separate, or individual financial state ments, provided that local regulations permit its use. IFRS 19 becomes effective from 1 January 2027, with early adoption permitted, but it is still pending EU endorsement. This standard is not expected to have a material impact on the Group’s consolidated financial statements, as its applicability depends on the status of subsidiaries and local regulatory requirements. 03. Financial Statements Annual Report 2024 124 Atalaya Mining Copper, S.A. ↘↘IFRS 9 (Amendment) and IFRS 7 (Amendment) – Classifi cation and Measurement of Financial Instruments These amendments clarify and refine the classification and derecognition of certain financial instruments, including: έέ Clarification of the recognition and derecognition date for specific financial assets and liabilities, with a new exception for certain liabilities settled through electronic cash transfer systems. έέ Additional guidance on assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion. έέ New disclosure requirements for financial instruments with contractual terms that can alter cash flows, including ESG-linked financial instruments. έέ Updates to disclosure requirements for equity instru ments measured at fair value through other compre hensive income (FVOCI). While the amendments related to the SPPI criterion mainly affect financial institutions, the changes regarding recognition, ESG-linked instruments, and disclosures are relevant to all entities. These amendments become effective from 1 January 2026, with early adoption permitted but pending EU endorsement. The amendments may introduce addi tional disclosure requirements, but they are not expected to have a significant impact on the Group’s recognition and measurement of financial instruments. ↘↘IFRS Annual Improvements – Volume 11 The IASB’s Annual Improvements process addresses minor amendments to IFRS to eliminate inconsistencies and improve clarity. The 11th volume includes changes to the following standards: έέ IFRS 1 – First-time Adoption of IFRS έέ IFRS 7 – Financial Instruments: Disclosures έέ IFRS 9 – Financial Instruments έέ IFRS 10 – Consolidated Financial Statements έέ IAS 7 – Statement of Cash Flows These amendments become effective from 1 January 2026, pending EU endorsement. The impact of these improvements is expected to be limited, as they primarily clarify existing guidance rather than introduce substantial changes. ↘↘IFRS 9 (Amendment) and IFRS 7 (Amendment) – Electricity Supply Contracts Linked to Natural Variability These amendments address the accounting for elec tricity supply contracts dependent on natural conditions (e.g., wind and solar energy), helping entities reflect these contracts more accurately in their financial state ments. The key changes include: έέ Clarification of the “own use” exemption for electricity contracts. έέ Allowing hedge accounting for certain contracts when used as hedging instruments. έέ New disclosure requirements to improve transparency regarding the financial impact of such contracts. These amendments become effective from 1 January 2026, pending EU endorsement. The amendments may require additional disclosures, particularly if the Group enters into renewable energy contracts, but they are not expected to have a material impact on recognition or measurement principles. 2.3 Consolidation The consolidated financial statements include the financial statements of Atalaya Mining Copper, S.A. and its subsidi aries, each prepared up to 31 December, together with the attributable share of results and reserves of associates and joint ventures, adjusted where necessary to conform to the Group’s accounting policies. Subsidiaries are consolidated from the date of acquisition, which is the date on which the Group obtains control and continue to be consolidated until the date such control ceases. Control exists when the Group is exposed to, or has rights to, variable returns from its involvement with an entity and has the ability to affect those returns through its power over the entity. The Group reassesses control whenever facts and circum stances indicate that one or more of the elements of control may have changed. A subsidiary is an entity that is controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity to obtain benefits from its activities. This control is typically achieved through ownership of more than 50% of the voting rights, either directly or indirectly. The Group also considers the existence of potential voting rights, which are currently exercisable or convertible, in its assessment of control. Additionally, de facto control may exist where the Group’s voting rights, relative to the size and dispersion of other shareholders, give it the power to direct the financial and operating policies of the entity. If the Group’s ownership interest in a subsidiary change but control is retained, the transaction is accounted for as an equity transaction. If the Group loses control of a subsidiary, it: »» Derecognises the subsidiary’s assets, liabilities, non-con trolling interests, and other equity components. »» Recognises any resulting gain or loss in profit or loss. »» Recognises any retained investment at fair value on the date control is lost. All intragroup balances, transactions, income, and expenses, including unrealised profits and losses on trans actions within the Group, are eliminated in full in preparing the consolidated financial statements. 03. Financial Statements Annual Report 2024 125 Atalaya Mining Copper, S.A. The name and shareholding of the entities included in the Group in these financial statements are: The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the trans ferred assets, liabilities incurred by the former owners of the acquiree, and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the acquisition date. The Group recognised any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. Non-controlling interests in the results and equity of subsid iaries are shown separately in the consolidated statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of financial position. If there are contractual arrangements that determine the attribution of earnings, such as a profit-sharing agree ment or the attribution specified by the arrangement the non-controlling interest will be presented accordingly. Otherwise, the relative ownership interests in the entity should be used if the parent’s ownership and the non-con trolling interest’s ownership in the assets and liabilities are proportional. When contractual profit-sharing arrangement changes over time, the earnings allocation to the non-controlling interest should be based on its present entitlement. Entity name Business %17 Country Atalaya Mining Copper, S.A. (former Atalaya Mining Plc) Holding n/a Spain EMED Marketing Ltd. Trade 100% Cyprus Atalaya Riotinto Minera, S.L.U. Operating 100% Spain Recursos Cuenca Minera, S.L.18 Dormant 50% Spain Atalaya Minasderiotinto Project (UK), Ltd. Holding 100% United Kingdom Eastern Mediterranean Exploration & Development, S.L.U. Dormant 100% Spain Atalaya Touro (UK), Ltd. Holding 100% United Kingdom Fundación ARM Trust 100% Spain Cobre San Rafael, S.L.19 Development 10% Spain Atalaya Servicios Mineros, S.L.U. Holding 100% Spain Atalaya Masa Valverde, S.L.U. Development 100% Spain Atalaya Financing Ltd. Financing 100% Cyprus Atalaya Ossa Morena, S.L. Development 99.9% Spain Iberian Polimetal S.L. Development 100% Spain (17) The effective proportion of shares held as at 31 December 2024 and 31 December 2023 remained unchanged. (18) Recursos Cuenca Minera is a joint venture with ARM, see note 16. (19) 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. (a) Acquisition-related costs are expensed as incurred If the business combination is achieved in stages, the acqui sition 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 intercom pany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (b) 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 consider ation 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. 03. Financial Statements Annual Report 2024 126 Atalaya Mining Copper, S.A. (c) 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 previ ously 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. (d) Associates and joint ventures An associate is an entity over which the Group has signif icant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee (generally accompanying a shareholding of between 20% and 50% of the voting rights) but is not control or joint control over those policies. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrange ment, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in associates or joint ventures are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recog nise the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’s investment in associates or joint ventures includes goodwill identified on acquisition. If the ownership interest in an associate or joint venture is reduced but significant influence is retained, only a propor tionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate. The Group’s share of post-acquisition profit or loss is 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 asso ciate or joint venture, including any other unsecured receiv ables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate or the joint venture. The Group determines at each reporting date whether there is any objective evidence that the investment in the asso ciate or the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the differ ence 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 finan cial 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. (e) 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 envi ronment and the parent entity reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment. Foreign currency transactions are translated into the func tional currency using the spot exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the income statement. Monetary assets and liabilities denominated in foreign currencies are updated at year-end spot exchange rates. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Gains or losses of monetary and non-monetary items are recognised in the income statement. Balance sheet items are translated at period-end exchange rates. Exchange differences on translation of the net assets of such entities whose functional currency are not the Euro are taken to equity and recorded in a separate currency translation reserve. 03. Financial Statements Annual Report 2024 127 Atalaya Mining Copper, S.A. (f) Care and Maintenance Expenditure Care and maintenance expenditure includes costs incurred to maintain assets and infrastructure in an operationally ready state during periods of reduced or suspended activity. These costs may relate to preparatory works for potential projects, ongoing maintenance of assets not currently in active production, or regulatory compliance obligations. Under IFRS, these expenditures are classified below gross profit in the statement of comprehensive income because they are not directly attributable to revenue-generating operations. Instead, they represent period costs incurred while assets are not in active use, and therefore, are recog nised as an operating expense rather than part of cost of sales. 2.4 Interest in joint arrangements A joint arrangement is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control that is when the strategic, financial and operating policy decisions relating to the activities the joint arrangement require the unanimous consent of the parties sharing control. Where a Group entity undertakes its activities under joint arrangements directly, the Group’s share of jointly controlled assets and any liabilities incurred jointly with other ventures are recognised in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group’s share of the output of jointly controlled assets, and its share of joint 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. 2.5 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing perfor mance of the operating segments, has been identified as the CEO who makes strategic decisions. The Group has only one distinct business segment, being that of mining operations, mineral exploration and development. 2.6 Inventory Inventory consists of copper concentrates, ore stockpiles and metal in circuit and spare parts. Inventory is physically measured or estimated and valued at the lower of cost or net realisable value. Net realisable value is the estimated future sales price of the product the entity expects to realise when the product is processed and sold, less esti mated costs to complete production and bring the product to sale. Where the time value of money is material, these future prices and costs to complete are discounted. Cost is determined by using the FIFO method and comprises direct purchase costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting mate rials into finished goods, based on the normal production capacity. The cost of production is allocated to joint prod ucts using a ratio of spot prices by volume at each month end. Separately identifiable costs of conversion of each metal are specifically allocated. Materials and supplies are valued at the lower of cost or net realisable value. Any provision for obsolescence is deter mined by reference to specific items of stock. A regular review is undertaken to determine the extent of any provi sion for obsolescence. 2.7 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. ↘↘Revenue and costs from pre-commissioning sales In accordance with IAS 16 (Amendment, paragraph 20A), proceeds from selling any product produced during the testing phase are recognised as revenue in the statement of profit or loss, and the related production costs are recognised in accordance with IAS 2 Inventories. These proceeds are not offset against the cost of assets under construction. ↘↘Capitalisation of development expenditure Development expenditure, including expenditure on intangible assets, is capitalised when it meets the recog nition criteria under IFRS. Specifically, expenditure is capitalised when: έέ It is directly attributable to preparing the asset for its intended use, including feasibility studies, pilot plant costs, engineering and design costs, and other costs necessary for the development of the asset. έέ The technical and commercial feasibility of the project has been demonstrated, and it is probable that the expenditure will generate future economic benefits. 03. Financial Statements Annual Report 2024 128 Atalaya Mining Copper, S.A. έέ The project is determined to be commercially viable, based on an assessment of project economics, including market conditions, resource estimates, expected operating and capital costs, and manage ment’s strategic intent. έέ For intangible assets, capitalisation applies to development-phase expenditures when the future economic benefits of the asset are probable. Costs incurred before feasibility is demonstrated, or those related to general research activities, are expensed as incurred. έέ The project is determined to be commercially viable, based on an assessment of project economics, including market conditions, resource estimates, expected operating and capital costs, and manage ment’s strategic intent. ↘↘Reversal of Impairment An impairment loss previously recognised on an asset, including capitalised intangible expenditure, is reversed when there is an indication that the impairment condi tions no longer exist or have changed. The reversal occurs when: έέ There is new evidence supporting the recoverability of the asset, such as technological or economic devel opments, improved market conditions, or additional data confirming its future economic benefits. έέ The asset’s recoverable amount, determined as the higher of fair value less costs of disposal and value in use, exceeds its previously impaired carrying amount. έέ The initial impairment was not due to obsolescence or permanent damage that would prevent the asset from generating future economic benefits. The reversal is recognised in the income statement up to the amount that would have been recognised had the original impairment not occurred, in line with IAS 36 Impairment of Assets. ↘↘Depreciation commencement Depreciation is not recognised until the assets are substantially complete and ready for productive use. At that point, all capitalised amounts within “Assets under Construction” are transferred to the relevant asset cate gories and depreciation begins in accordance with the Group’s accounting policy. 2.8 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: Land and buildings UOP Deferred mining costs UOP Plant and equipment UOP Other assets: Furniture/fixtures/office equipment/Motor vehicles 5 – 10 years Right of use assets (IFRS 16) UOP The Group reviews the estimated residual values and expected useful lives of assets at least annually. In particular, the Group considers the impact of health, safety and envi ronmental legislation in its assessment of expected useful lives and estimated residual values. Furthermore, the Group considers climate-related matters, including physical and transition risks. Specifically, the Group determines whether climate-related legislation and regulations might impact either the useful life or residual values, e.g., by banning or restricting the use of the Group’s fossil fuel-driven machinery and equipment or imposing additional energy efficiency requirements on the Group’s buildings and office properties. 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 income” 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 circum stances, 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. 03. Financial Statements Annual Report 2024 129 Atalaya Mining Copper, S.A. (b) Deferred mining costs – stripping costs Mainly comprises of certain capitalised costs related to pre-production and in-production stripping activities as outlined below. Stripping costs incurred in the development phase of a mine (or pit) before production commences are capitalised as part of the cost of constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a UOP basis. In-production stripping costs related to accessing an iden tifiable component of the ore body to realise benefits in the form of improved access to ore to be mined in the future (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 associ ated 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 expend iture 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 and indirectly 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 capi talised 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 prepara tion work, discounted using a risk adjusted discount rate to their net present value, are provided for and capitalised at the time such an obligation arises. The costs are charged to the consolidated statement of income over the life of the operation through depreciation of the asset and the unwinding of the discount on the provi sion. Costs for restoration of subsequent site disturbance, which are created on an ongoing basis during production, are provided for at their net present values and charged to the consolidated statement of income as extraction progresses. Changes in the estimated timing of the rehabilitation or changes to the estimated future costs are accounted for prospectively by recognising an adjustment to the rehabili tation liability and a corresponding adjustment to the asset to which it relates, provided the reduction in the provision is not greater than the depreciated capitalised cost of the related asset, in which case the capitalised cost is reduced to zero and the remaining adjustment recognised in the consolidated statement of income. In the case of closed sites, changes to estimated costs are recognised immedi ately in the consolidated statement of income. 2.9 Intangible assets (a) Permits Permits represent legal rights, licences, and authorisations required to advance mining projects from the pre-devel opment stage to production. Costs directly attributable to obtaining and securing these permits are capitalised as intangible assets, provided they meet the recognition criteria of IAS 38 – Intangible Assets. These costs typically include application fees, environmental and engineering studies, legal expenses, and other necessary expenditures incurred to obtain the permits. 03. Financial Statements Annual Report 2024 130 Atalaya Mining Copper, S.A. No amortisation is recognised on these intangible assets until the associated project transitions into commercial production. Once the Group receives the required permits and commences production, the capitalised permit costs are amortised using the UOP method, based on the commercially recoverable reserves of the related mining project. If at any stage it is determined that the permit will not be utilised due to project discontinuation or regulatory changes, the capitalised costs are immediately impaired and recognised as an expense in the consolidated state ment of profit or loss. The Group will recurrently evaluate the status of the project. Should subsequently evaluation of the project determine the underlying reasons to determine the permit would not be utilised are reasonable reversed or mitigated, the Group may reverse the impairment consequently. (b) 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 when ever 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. 2.10 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 iden tifiable 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. The Group assesses whether climate risks, including phys ical risks and transition risks could have a significant impact. 2.11 Financial assets and liabilities (a) Classification 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 char acteristics 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: 03. Financial Statements Annual Report 2024 131 Atalaya Mining Copper, S.A. (b) Amortised cost Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of prin cipal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss. The 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. (c) 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. (d) 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 recy cled 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. (e) 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 recog nised 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 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 at amortised cost). (f) 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. (g) Impairment of financial assets 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 approxi mation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For receivables (other than trade receivables which are measured at FVPL), the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. 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 indi cates 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. (h). Financial liabilities and trade payables After initial recognition, interest-bearing loans and borrow ings and trade and other payables are subsequently meas ured 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. 03. Financial Statements Annual Report 2024 132 Atalaya Mining Copper, S.A. 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 2.12 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: έέ Expected to be realised or intended to be sold or consumed in normal operating cycle; έέ Held primarily for the purpose of trading; έέ Expected to be realised within 12 months after the reporting period Or έέ 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: έέ It is expected to be settled in the normal operating cycle; έέ It is held primarily for the purpose of trading έέ It is due to be settled within 12 months after the reporting period Or έέ 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-cur rent assets and liabilities. 2.13 Cash and cash equivalents In the consolidated statements of cash flows, cash and cash equivalents includes cash in hand and cash at bank, as well as short-term deposits with banks that have an original maturity of less than three months from the date of acquisition. 2.14 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 esti mated. Provisions are not recognised for future operating losses. 2.15 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 recog nised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised over the period of the facility to which it relates. Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds, including interest on borrowings, amortisation of discounts or premium relating to borrowings, amortisation of ancil lary costs incurred in connection with the arrangement of borrowings, finance lease charges and exchange differ ences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs. 2.16 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. 2.17 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. 03. Financial Statements Annual Report 2024 133 Atalaya Mining Copper, S.A. 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. 2.18 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. 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 combi nation that at the time of the transaction affects neither accounting nor taxable profit or loss. Income tax is deter mined 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. In assessing the recoverability of deferred tax assets, the Group relies on the same forecast assumptions used else where in the financial statements and in other management reports, which, among other things, reflect the potential impact of climate-related development on the business, such as increased cost of production as a result of meas ures to reduce carbon emission. 2.19 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-trans ferability, exercise restrictions and behavioural considera tions. Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. Vesting conditions are: (i) the personnel should be an employee that provides services to the Group; and (ii) should be in continuous employment for the whole vesting period of 3 years. Specific arrangements may exist with senior managers and board members, whereby their options stay in use until the end. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied (Note 24). 2.20 Rehabilitation provisions The Group records the present value of estimated costs of legal and constructive obligations required to restore operating locations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and re-vegetation of affected areas. The obligation generally arises when the asset is installed, or the ground/environ ment is disturbed at the production location. When the liability is initially recognised, the present value of the esti mated 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. Addi tional disturbances or changes in rehabilitation costs will be recognised as additions or charges to the corresponding assets and rehabilitation liability when they occur. For closed sites, changes to estimated costs are recognised immediately in the consolidated income statement. The Group assesses its mine rehabilitation provision annually. Material 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. 03. Financial Statements Annual Report 2024 134 Atalaya Mining Copper, S.A. The impact of climate-related matters, such as changes in environmental regulations and other relevant legislation, is considered by the Group in estimating the rehabilitation provision on the manufacturing facility. Changes in the estimated future costs, or in the discount rate applied, are added to or deducted from the cost of the asset. 2.21 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 fulfil ment 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 labora tory 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. ↘↘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 remeasure ment 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 owner ship 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. 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: έέ Fixed payments, less any lease incentives receivable έέ Variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement date έέ Amounts expected to be payable by the lessee under residual value guarantees έέ The exercise price of a purchase option if the lessee is reasonably certain to exercise that option έέ Lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option έέ Payments of penalties for early terminating the lease, unless the Group is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the effective interest rate method. After the commence ment date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, 03. Financial Statements Annual Report 2024 135 Atalaya Mining Copper, S.A. 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-meas urement 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. 2.22 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 transfer ring them to the customer. (b) Copper in concentrate (metal in concentrate) sales For most copper in concentrate (metal in concentrate) sales, the enforceable contract is each purchase order, which is an individual, short-term contract. For the Group’s metal in concentrate sales not sold under CIF Incoterms, the performance obligations are the delivery of the concen trate. A proportion of the Group’s metal in concentrate sales are sold under CIF Incoterms, whereby the Group is also responsible for providing freight services. In these situations, the freight services also represent separate performance obligation (see paragraph (c) below). The majority of the Group’s sales of metal in concentrate allow for price adjustments based on the market price at the end of the relevant QP stipulated in the contract. These are referred to as provisional pricing arrangements and are such that the selling price for metal in concentrate is based on prevailing spot prices on a specified future date after ship ment to the customer. Adjustments to the sales price occur based on movements in quoted market prices up to the end of the QP. The period between provisional invoicing and the end of the QP can be between one and three months. Revenue is recognised when control passes to the customer, which occurs at a point in time when the metal in concentrate is physically transferred onto a vessel, train, conveyor or other delivery mechanism. The revenue is measured at the amount to which the Group expects to be entitled, being the estimate of the price expected to be received at the end of the QP, i.e., the forward price, and a corresponding trade receivable is recognised. For those arrangements subject to CIF shipping terms, a portion of the transaction price is allocated to the separate freight services provided (See paragraph (c) below). For these provisional pricing arrangements, any future changes that occur over the QP are included within the provisionally priced trade receivables and are, therefore, within the scope of IFRS 9 and not within the scope of IFRS 15. Given the exposure to the commodity price, these provisionally priced trade receivables will fail the cash flow characteristics test within IFRS 9 and will be required to be measured at fair value through profit or loss up from initial recognition and until the date of settlement. These subsequent changes in fair value are recognised as part of revenue in the statement of profit or loss and other compre hensive 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 consid erations 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. (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 03. Financial Statements Annual Report 2024 136 Atalaya Mining Copper, S.A. which have these Incoterms, the only performance obli gations are the provision of the product at the point where control passes. (d) Sales of services The Group sells services in relation to maintenance of accounting records, management, technical, 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. 2.23 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 recov erable 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 recog nised using the original effective interest rate. 2.24 Dividend income Dividend income is recognised when the right to receive payment is established. 2.25 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. 2.26 Earnings per share The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordi nary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise instruments convertible into ordinary shares and share options granted to employees. 2.27 Comparatives Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. 2.28 Amendment of financial statements after issue The Board of Directors and shareholders has no right to amend the Financial Statements after they are authorised. 2.29 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 fair value through profit and loss 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 tech niques. The Group uses a variety of methods, such as esti mated 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. έέ Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. 03. Financial Statements Annual Report 2024 137 Atalaya Mining Copper, S.A. (Euro 000’s) Level 1 Level 2 Level 3 Total 31 Dec 2024 Other current financial assets Financial assets at FV through OCI 23 - 1,101 1,124 Trade and other receivables Receivables (subject to provisional pricing) - 10,769 - 10,769 Total 23 10,769 1,101 11,893 31 Dec 2023 Other current financial assets Financial assets at FV through OCI 30 - 1,101 1,131 Receivables (subject to provisional pricing) - 15,164 - 15,164 Total 30 15,164 1,101 16,295 έέ 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). έέ 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). 2.30 Climate-related matters The Group considers climate-related matters in estimates and assumptions, where appropriate. This assessment includes a wide range of possible impacts on the group due to both physical and transition risks. Even though the Group believes its business model and products will still be viable after the transition to a low-carbon economy, climate-re lated matters increase the uncertainty in estimates and assumptions underpinning several items in the financial statements. Even though climate-related risks might not currently have a significant impact on measurement, the Group is closely monitoring relevant changes and develop ments, such as new climate-related legislation. The items and considerations that are most directly impacted by climate-related matters are: »» Useful life of property, plant and equipment. When reviewing the residual values and expected useful lives of assets, the Group considers climate-related matters, such as climate-related legislation and regulations that may restrict the use of assets or require significant capital expenditures, based on the assessment on climate-re lated matters, there was no impact. »» Impairment of non-financial assets. The value-in-use may be impacted in several different ways by transition risk in particular, such as climate-related legislation and regu lations and changes in demand for the Group products, based on the assessment on climate-related matters, there was no impact. »» In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements has been consid ered and based on the assessment on climate-related matters, there was no impact. »» Rehabilitation provision. The impact of climate-related legislation and regulations is considered in estimating the timing and future costs of rehabilitation of the Group facilities, based on the assessment on climate-related matters, there was no impact. 2.31 Contingent liabilities in assets acquisitions The Group has adopted the approach set out in IFRIC 1 (International Financial Reporting Interpretations Committee) for contingent payments related to asset acquisitions. When acquiring intangible assets with contin gent payments that depend on future events, such as the Touro, Masa Valverde, and Ossa Morena projects (see Note 1), the Group assesses whether these payments are directly attributable to the cost of the acquired asset. If the analysis concludes that the payment is linked to the acquisition cost, the Group recognises an intangible asset reflecting the fair value of the acquired rights and a corresponding liability based on the best estimate of the expected future payment, including anticipated undetermined costs. If the contingent payment is not directly related to the acquisition cost of the asset, it is recognised as an expense in the period it is incurred. Subsequent changes in the estimated liability due to revisions in assumptions, project feasibility, or economic factors are recognised against the carrying amount of the intangible asset. If at a later stage there is uncertainty regarding the continuation of the project, leading to a reassessment of the probability of making the contingent payment, the Group adjusts the liability accordingly and recognises the change against the asset’s carrying amount. For intangible assets where non-controlling interests exist, the Group assigns the corresponding portion of the asset to non-controlling interest holders, ensuring that any valuation adjustments to contingent liabilities are reflected appropri ately. This policy is applied consistently across all projects to ensure compliance with IFRS and alignment with industry practices. 03. Financial Statements Annual Report 2024 138 Atalaya Mining Copper, S.A. 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. Manage ment reviews and agrees policies for managing each of these risks that are summarised below. The Group’s senior management oversees the manage ment of financial risks. The Group’s senior management is supported by the AC that advises on financial risks and the appropriate financial risk governance framework for the Group. The AC 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 posi tion 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 aggre gated by Group finance. Group finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. The following tables detail the Group’s remaining contrac tual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes principal cash flows associated with both principal and interests. (b) Currency risk 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. The table below presents the Group’s balances denomi nated in foreign currencies as at 31 December 2024 and 31 December 2023, categorised by currency and nature of balance: For better understanding and comparability, the 2023 figures have been broken down in line with the 2024 presentation. (Euro 000’s) Carrying amounts Contractual cash flows Less than 3 months Between 3–12 months Between 1–2 years Between 2–5 years Over 5 years 31 Dec 2024 Other financial liabilities 17,787 18,983 1,519 6,015 5,670 5,779 - Non-current payables 12,492 13,750 - - 750 11,000 2,000 Trade and other payables 90,090 90,255 52,929 37,266 60 - - 124,170 127,311 54,448 43,800 6,999 18,335 3,729 31 Dec 2023 Lease liability 4,378 4,841 - 519 1,037 1,556 1,729 Other financial liabilities 66,687 67,896 1,749 51,171 9,912 5,064 - Non-current payables 2,003 2,750 - - 750 - 2,000 Trade and other payables 75,922 75,922 36,964 38,882 76 - - 148,990 151,409 38,713 90,572 11,775 6,620 3,729 (Euro 000’s) 2024 2023 USD Cash and cash equivalents 15,513 70,496 Trade and other receivables 10,769 31,580 26,282 102,075 GBP Cash and cash equivalents 70 41 03. Financial Statements Annual Report 2024 139 Atalaya Mining Copper, S.A. ↘↘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 2024 increase/(decrease) Effect on profit before tax for the year ended 31 Dec 2023 increase/(decrease) Effect on equity for the year ended 31 Dec 2024 increase/(decrease) Effect on equity for the year ended 31 Dec 2023 increase/(decrease) (+5%) 20,364 17,454 16,698 14,312 (-5%) (20,364) (17,454) (16,698) (14,312) (Euro 000’s) Effect on profit before tax for the year ended 31 Dec 2024 increase/(decrease) Effect on profit before tax for the year ended 31 Dec 2023 increase/(decrease) Effect on equity for the year ended 31 Dec 2024 increase/(decrease) Effect on equity for the year ended 31 Dec 2023 increase/(decrease) Increase/(decrease) in copper prices Increase $0.05/lb (2023: $0.05) 5,012 5,138 4,110 4,213 Decrease $0.05/lb (2023: $0.05) (5,012) (5,138) (4,110) (4,213) ↘↘Commodity price risk Commodity price is the risk that the Group’s future earn ings 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 that are 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 under IFRS 9. Instead, they are classified as held-for-trading and are therefore fair valued through profit or loss. The derivative financial instruments referenced in this sensitivity analysis are economic derivatives rather than hedge derivatives. These instruments arise from the Group’s provisional pricing arrangements, whereby copper concentrate sales are initially recorded at provi sional prices and are subsequently adjusted based on market prices at the end of the quotational period (QP), as per the terms of offtake agreements. As a result, the fair value of trade receivables fluctuates with commodity price movements, creating an embedded derivative that is accounted for separately. This derivative is not designated as a hedge and is clas sified as held-for-trading, meaning its fair value fluctu ations are recognised in profit or loss. Since this pricing adjustment is directly linked to revenue, the impact on profit before tax (PBT) and equity is the same. The analysis is based on the assumption that copper prices move by $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. A $0.05/lb movement in copper prices was determined as a reasonably possible change based on historical volatility over the past two years. (c) Credit risk Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The Group has no significant concentration of credit risk. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history and monitors on a continuous basis the ageing profile of its receivables. The Group has policies to limit the amount of credit exposure to any finan cial institution. 03. Financial Statements Annual Report 2024 140 Atalaya Mining Copper, S.A. 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) 31 Dec 2024 31 Dec 2023 Unrestricted cash and cash equivalents at Group level 43,184 94,868 Unrestricted cash and cash equivalents at Operation level 9,694 26,139 Consolidated cash and cash equivalents 52,878 121,007 Net cash position 35,091 54,320 Working capital surplus 44,728 68,618 (Euro 000’s) 2024 2023 Variable rate instruments Financial assets 52,878 121,007 (Euro 000’s) 2024 2023 Non-current financial assets Non-current loans 2,768 233 Non-current deposits 611 307 3,379 540 Current financial assets Current loans 5,352 - Current receivables 11,458 16,039 16,810 16,039 Total 20,189 16,579 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 2024 and 2023. The table below presents the Group’s financial assets exposed to credit risk as at 31 December 2024 and 31 December 2023, classified by type of asset. An increase of 100 basis points in interest rates at 31 December 2024 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. (e) Operational risk Operational risk is the risk that derives from the deficiencies relating to the Group’s information technology and control systems as well as the risk of human error and natural disas ters. The Group’s systems are evaluated, maintained and upgraded continuously. (f) 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. (g) 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. (d) Interest rate risk Interest rate risk is the risk that the value of financial instru ments 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. At the reporting date the interest rate profile of interest bearing financial instruments was: Equity Profit or loss (Euro 000’s) 2024 2023 2024 2023 Variable rate instruments 529 1,210 529 1,210 03. Financial Statements Annual Report 2024 141 Atalaya Mining Copper, S.A. 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 AC reviews the capital structure on a continuing basis. The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to share holders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. The Group monitors capital on the basis of the gearing ratio. The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as provisions plus deferred consideration plus trade and other payables less cash and cash equivalents. 3.3 Critical accounting judgements and Key sources of estimation uncertainty The preparation of the Group’s financial statements requires management to apply judgements, estimates, and assumptions that affect the recognition and measure ment of assets, liabilities, revenues, and expenses. These judgements and estimates are based on management’s experience, industry knowledge, and expectations of future events that are considered reasonable under the circumstances. Under IAS 1 – Presentation of Financial Statements, the Group distinguishes between critical accounting judge ments and key sources of estimation uncertainty, as they have different disclosure requirements: »» Critical accounting judgements involve decisions made by management in applying accounting policies that have the most significant impact on the financial state ments (IAS 1, paragraph 122). These judgements do not involve estimation uncertainty but require management to make subjective assessments in applying IFRS. »» Key sources of estimation uncertainty involve assump tions about the future that create a significant risk of material adjustment to the carrying amounts of assets and liabilities within the next financial year (IAS 1, para graph 125). These estimates are subject to inherent uncertainty, and actual results may differ from those originally assumed. Management continuously evaluates these judgements and estimates to ensure they remain appropriate and reflect the latest available information. Significant accounting judge ments and critical estimates identified by the Group are outlined below, along with their potential financial impact. Critical accounting judgments (a) Consolidation of Cobre San Rafael Cobre San Rafael, S.L. is the entity that holds the mining rights for Proyecto Touro. Although the Group initially owned only a 10% equity interest, management has exercised judgement under IFRS 10 – Consolidated Financial State ments and determined that Atalaya controls Cobre San Rafael, S.L. and should consolidate up to 80% of its interest in the Group’s financial statements. This judgement is based on the following key factors: → →Power Over Relevant Activities έέ Atalaya has substantive rights that enable it to direct key operational and financial decisions. έέ The Group has the ability to appoint key personnel, including senior management and operational leadership. έέ One of the two Directors of Cobre San Rafael, S.L. is appointed by Atalaya, allowing it to influence strategic decisions. (Euro 000’s) 31 Dec 2024 31 Dec 2023 Total liabilities less cash 104,433 57,170 Total equity (excluding NCI) 516,384 501,496 Total capital 620,187 558,666 Gearing ratio 16.82% 10.23% 03. Financial Statements Annual Report 2024 142 Atalaya Mining Copper, S.A. → →Exposure to Variable Returns έέ Atalaya bears financial risks through contractual obligations that require it to absorb Cobre San Rafael, S.L.’s losses, exceeding its initial ownership percentage. έέ The Group provides funding and financial support to maintain the subsidiary’s operations, reinforcing its economic exposure. → →Control and Increased Consolidation Up to 80% έέ Under IFRS 10, control is determined by power over the entity, exposure to variable returns, and the ability to affect those returns. έέ Due to Atalaya’s contractual rights, financial obliga tions, and decision-making authority, management has determined that the Group exercises control over Cobre San Rafael, S.L. έέ As a result, the Group has elected to consolidate up to 80% of its interest, in line with its milestone-based acquisition framework, which allows for an increase in ownership over time. This assessment represents a significant judgement, as control is not based solely on the percentage of ownership but rather on the ability to direct relevant activities and bear associated financial risks. Management continues to monitor changes in contractual arrangements, funding obligations, and decision-making rights to assess whether control remains appropriate under IFRS 10. Management has exercised judgement in determining that Atalaya controls Cobre San Rafael, S.L., despite holding only a 10% equity interest. Under IFRS 10 – Consolidated Finan cial Statements, control exists when an entity has power over relevant activities, exposure to variable returns, and the ability to affect those returns. Atalaya has the ability to appoint key personnel and influ ence strategic decisions through board representation. Additionally, it bears the financial risks of the subsidiary due to contractual obligations requiring it to absorb its losses. Based on these factors, Atalaya consolidates up to 80% of its interest in the Group’s financial statements. Contingent Liabilities Related to Cobre San Rafael In addition to the consolidation judgement, the Group eval uated whether any contingent liabilities exist in relation to Cobre San Rafael or other entities. Under IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, a contingent liability arises when a past event creates a possible obliga tion, but its settlement depends on uncertain future events outside the Group’s control. As of 31 December 2024, the Group does not have any significant contingent liabilities other than those related to Cobre San Rafael. The main risks associated with CSR include potential legal and environmental obligations related to Proyecto Touro’s permitting process, which remain subject to ongoing regulatory developments. Management continues to assess whether any additional provisions or contingent liabilities should be recognised, considering legal, regulatory, and operational risks affecting the Group’s interests. (b) Capitalisation of exploration and evaluation costs Under the Group’s accounting policy, exploration and evaluation expenditure is not capitalised until the point is reached at which there is a high degree of confidence in the project’s viability, and it is considered probable that future economic benefits will flow to the Group. Subse quent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project. If a project proves to be unviable, all irrecoverable costs associated with the project net of any related impair ment provisions are written off. Judgement is required to determine when exploration and evaluation costs should be capitalised. The Group only capitalises expenditure once there is a high degree of confidence in a project’s viability, and future economic benefits are considered probable. Until this point, costs are expensed. (c) Classification of financial instruments 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 deter mining the classification of its financial assets upon consid ering whether contractual features including interest rate could significantly affect future cash flows. Furthermore, judgment is required when assessing whether compen sation paid or received on early termination of lending arrangements results in cash flows that are not ‘solely payments of principal and interest (SPPI). The classification of financial instruments requires judge ment in assessing whether contractual terms meet the Solely Payments of Principal and Interest (SPPI) test under IFRS 9 – Financial Instruments. Certain financial assets contain features such as early termination options or linked interest rates, which require management to assess their classification as amortised cost, fair value through OCI, or fair value through profit or loss. (d) Stripping costs The Group incurs waste removal costs (stripping costs) during the development and production phases of its surface mining operations. Furthermore, during the produc tion 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. 03. Financial Statements Annual Report 2024 143 Atalaya Mining Copper, S.A. 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 assess ments may vary between mines because the assessments are undertaken for each individual mine and are based on a combination of information available in the mine plans, specific characteristics of the orebody, the milestones relating to major capital investment decisions and the type and grade of minerals being mined. Judgement is also required to identify a suitable production measure that can be applied in the calculation and alloca tion 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 suit able 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). (e) 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 crys tallise. 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. (f) 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 appro priate discount rate to determine the net present value. For the purpose of calculating the impairment of any asset, management regards an individual mine or works site as a CGU. Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that could adversely affect management’s estimate of the net cash flow to be generated from its projects. The assessment of impairment indicators and the recover able amount of assets requires management to estimate future cash flows, discount rates, and market conditions. After performing sensitivity calculations, a 10% decrease in copper prices would not result in an impairment charge. Key sources of estimation uncertainty (g) Ore reserve and mineral resource estimates The estimation of ore reserves and mineral resources impacts various accounting estimates in the Group’s finan cial statements that requires critical accounting judgement. . While ore reserve estimates are based on geological, technical, and economic assessments performed by quali fied persons, they are not standalone accounting estimates under IFRS. Instead, they act as key assumptions that influ ence multiple financial statement areas, including: »» Depreciation and amortisation, particularly for assets depreciated using the unit-of-production (UOP) method. »» Impairment assessments, as future expected cash flows depend on estimated recoverable reserves. »» Capitalisation of stripping costs, which determines whether waste removal costs should be recognised as an asset or expensed. »» Rehabilitation and decommissioning provisions, as reserve estimates affect the timing and expected costs of site restoration. The Group estimates its ore reserves and mineral resources based on geological and technical data relating to the size, depth, shape, and grade of the ore body, along with suitable production techniques and recovery rates. These assessments require complex geological judgements, including: »» Long-term copper price assumptions. »» Foreign exchange rate forecasts affecting project viability. »» Production costs, capital expenditure requirements, and expected recovery rates. 03. Financial Statements Annual Report 2024 144 Atalaya Mining Copper, S.A. »» Mining recovery and dilution factors. »» Environmental and regulatory considerations. The Group uses qualified persons (as defined by the Cana dian Securities Administrators’ National Instrument 43-101) to compile this data. Changes in the judgments surrounding proven and probable reserves may impact as follows: »» The carrying value of exploration and evaluation assets, mine properties, property, plant and equipment, and goodwill may be affected due to changes in estimated future cash flows; »» Depreciation and amortisation charges in the consol idated 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. Update in Ore Reserves and Its Financial Impact In May 2024, Atalaya incorporated an update of its ore reserves based on an independent expert analysis in accordance with the Canadian Institute of Mining, Metal lurgy and Petroleum (“CIM”) Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council (the “CIM Standards”). This update has some impact on our financial statements and accounting estimates and reflects a revised understanding of the economic potential and operational requirements of our mining assets. → →Judgements and Assumptions: The update in ore reserves requires significant judgments and assumptions, particularly in estimating the quantity and quality of the ore, the economic viability of extrac tion, and the life of the mine. These estimates impact various accounting measures, including depreciation schedules, cost allocations, and capitalisation policies. Our management has applied considerable expertise and relied on independent expert opinions to ensure these estimates are robust and reflect the best available information. → →Impact on Profit and Loss Statement: The update of ore reserves has resulted in some changes to our accounting practices in relation to depreciation, stripping costs and capitalisation. Specifically, these changes result in a total decrease in net profit of €1.5 million, comprising €0.7 million from increased deprecia tion, €0.1 million from increased depreciation of stripping costs and €0.7 million from reduced capitalisation of stripping costs. These changes help to maintain the accuracy of our financial statements and ensure that they give a fair view of the financial position and performance of our business. → →Accumulated Depreciation of Mining Assets: The revised ore reserve estimates have led to an increase in the accumulated depreciation of our mining assets by €0.7 million during the year. This change is due to the adjustment in the useful life and depletion rate of these assets, which are now expected to be utilised over a shorter timeframe than previously estimated. The new ore reserve data has provided a more accurate basis for calculating depreciation, ensuring our financial records accurately reflect the wear and tear on these assets over their updated useful lives. → →Stripping Costs: depreciation The reserves update also resulted in an increase in depre ciation of €0.1 million during the period. Depreciation, which covers the allocation of the cost of assets over their useful lives, has been adjusted to reflect the new ore reserve estimates. The reassessment of reserves has impacted the level and timing of depreciation, reflecting the updated operational requirements to access the newly defined ore bodies. → →Capitalisation of Stripping Costs: In conjunction with the increase in stripping costs, there is a reduction in the capitalisation of stripping costs amounting to €0.7 million. This adjustment arises from the revised criteria for capitalising stripping costs under the updated ore reserve estimates. With a clearer under standing of the ore body and its economic feasibility, certain costs previously capitalised are now expensed, aligning our financial practices with the current and more accurate projections of our mining operations. → →Compliance with Reporting Standards: The Group reports its Mineral Resources and Mineral Reserves in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council (the “CIM Standards”). This ensures that our reporting is consistent with internation ally recognised guidelines, providing transparency and comparability for our stakeholders. 03. Financial Statements Annual Report 2024 145 Atalaya Mining Copper, S.A. (h) 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. The discount rate used in the calculation of the net present value of the liability as at 31 December 2024 was 3.23% (2023: 3.62%), which corresponds to the 15-year Spain Government Bond rate for 2024. An inflation rate of 2%-2.80% (2023: 1%-3.10%) was applied on an annual basis. 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 uncer tain and cost estimates can vary in response to many factors including changes to relevant environmental laws and regu lations requirements, the emergence of new restoration techniques or experience at other mine sites. As a result, there could be significant adjustments to the provisions established which would affect future financial results. Refer to Note 27 for further details. Provisions are based on estimates of future costs, inflation rates, discount rates, and the timing of restoration activ ities. Changes in environmental laws or unexpected site conditions could significantly affect these estimates. A 1% increase in the discount rate would reduce the provision by €2.1 million, while a 1% decrease would increase the provi sion by €2.1 million. (i) 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. Copper concentrate inventories are valued at the lower of cost or NRV. This estimate is based on forecasted commodity prices and production costs. A 10% decrease in copper prices would not result in any impairment, as inven tory values would still exceed cost. (j) Recoverability of Assets Related to the E-LIX Project The new E-LIX technology represents a source of estimation uncertainty due to the significant assumptions involved in assessing the recoverability of Atalaya’s investment in the project. The Group has invested and funded Lain various phases of development, including the construction of a pilot plant, feasibility studies testing, and the development of an industrial-scale plant to apply the E-LIX electrochem ical extraction technology to complex sulphide ores. The recoverability of these investments depends on several factors, including: »» Successful commercialisation of the E-LIX Technology – The technology must demonstrate continued opera tional effectiveness and economic scalability in full-scale production. »» Market conditions for copper and zinc – Long-term price trends impact the financial viability of the project. »» Production efficiency and cost assumptions – The plant’s ability to achieve projected recovery rates and cost efficiencies is critical. »» Exclusivity agreements – The Group holds limited exclusive rights to the E-LIX technology within the Iberian Pyrite Belt, supporting long-term value generation. Given these factors, management assesses the recover ability of the investment based on projected future cash flows from the plant’s operations. The key estimation uncer tainties relate to: »» The finalisation of the ramp-up and expected operational efficiency running the Industrial Plant at continuously production pace – Any delays or underperformance could impact future cash flow generation. »» Commodity price fluctuations – Variations in copper and zinc prices could significantly influence revenue projections. »» Regulatory and operational risks – The project requires ongoing compliance with environmental and industrial regulations. Sensitivity Analysis: A reasonable range of changes in these key assumptions could result in a material impact on the estimated recov erability of the investment. After performing sensitivity calculations, a 10% decrease in zinc prices has resulted in a 3.21% reduction in the IRR of the project. Or delays in the ramp-up with an increase in €10 million cost, has resulted in a 3.4% reduction in the IRR. Management monitors these factors closely and assesses whether impairment indicators exist at each reporting date. At 31 December 2024, no impairment indicators have been identified. However, due to the inherent estimation uncertainty, the Group will continue to monitor operational performance and market conditions, reassessing the valua tion of the investment as necessary. 03. Financial Statements Annual Report 2024 146 Atalaya Mining Copper, S.A. 4. Segments 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). Geographical areas of operations The Group has only one distinct business segment, which is mining operations, including mineral exploration and development. The Group’s copper concentrate production takes place in Spain, while its commercialisation is carried out through Cyprus via its subsidiary, EMED Marketing Limited. The production of copper concentrate is undertaken by Atalaya Riotinto Minera, S.L.U. in Spain. Once produced, the copper concentrate is sold to international clients under the Group’s offtake agreements, which are managed by EMED Marketing Limited, a subsidiary based in Cyprus. EMED Marketing Limited holds the offtake agreements with customers and is responsible for the promotion and sale of the copper concentrate. Under these agreements, it provides marketing services, including coordinating and managing the ordering and delivery of the copper concen trate. However, EMED Marketing Limited does not control the concentrate before it is transferred to customers, as the production and provision of the product are undertaken by Atalaya Riotinto Minera, S.L.U. Since it does not have the ability to direct the use of the concentrate or obtain benefits from it before the transfer to customers, EMED Marketing Limited acts as an agent in these transactions. The transfer of control over the marketing services provided by EMED Marketing Limited occurs at the moment the customer receives the copper concentrate. This is the point in time when the customer benefits from EMED Marketing Limited’s role in arranging for the provision of the concen trate. Consequently, revenue from these sales is recognised at that point. Sales transactions between Group companies are conducted at arm’s length, in accordance with transfer pricing regulations, ensuring comparability with third-party transactions. The accounting policies applied by the Group in Spain and Cyprus are consistent with those outlined in Note 2. The table below presents an analysis of revenue from external customers based on their geographical loca tion, determined by the country of establishment of each customer. The table below presents revenues from external customers attributed to the country of domicile of the Company. The geographical location of the specified non-current assets is based on the physical location of the asset in the case of property, plant and equipment as well as intellectual property. 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. Revenue – from external customers 2024 2023 €'000 €'000 Switzerland 256,243 260,284 Singapore 69,676 80,031 Spain 878 31 326,797 340,346 Revenue – from external customers 2024 2023 €'000 €'000 Cyprus 25,404 25,712 Spain 301,393 314,634 326,797 340,346 Non-current assets 2024 2023 €'000 €'000 Spain 479,241 434,136 479,241 434,136 2024 2023 Segment €’000 Segment €’000 Offtaker 1 Copper 69,676 Copper 80,031 Offtaker 2 Copper 91,849 Copper 76,688 Offtaker 3 Copper 164,394 Copper 183,596 03. Financial Statements Annual Report 2024 147 Atalaya Mining Copper, S.A. 5. Revenue 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. (Euro 000’s) 2024 2023 Revenue from contracts with customers20 341,787 344,940 Fair value gain/(loss) relating to provisional pricing within sales21 (15,868) (4,594) Other income22 878 - Total revenue 326,797 340,346 (20) Included within 2024 revenue there is a transaction price of €11,709 thousand (€9,783 thousand in 2023) related to the freight services provided by the Group to the customers arising from the sales of copper concentrate under CIF incoterm. (21) Provisional pricing impact represented the change in fair value of the embedded derivative arising on sales of concentrate. (22) Other income mainly represents scraps. 6. Expenses by nature (Euro 000’s) 2024 2023 Operating costs** 197,793 208,416 Care and maintenance expenditure 16,723 11,511 Exploration expenses 4,975 5,103 Employee benefit expense (Note 7) 27,868 25,756 Compensation of directors and key management personnel 2,397 2,230 Auditors’ remuneration – audit (Note 32) 401 452 Other accountants’ remuneration 1,291 385 Consultants’ remuneration 1,775 4,977 Depreciation of property, plant and equipment (Note 13) 39,658 33,307 Amortisation of intangible assets (Note 14) 3,907 4,493 Share option-based employee benefits (Note 24) 1,379 660 Shareholders’ communication expense 125 232 On-going listing costs 1,114 521 Legal costs 368 1,779 Public relations and communication development 963 711 Rents (Note 28) 5,492 5,682 Other expenses and provisions (1,841) 467 Reversal of impairment losses* (Note 14) (6,948) - Impairment loss on trade receivables and contract assets 1,205 - Total 298,645 306,682 (*) An impairment charge for the same amount was recorded in the same caption: mine site depreciation, amortisation and impairment, in the consoli dated statement of comprehensive income of 2019. The reduction in costs was mainly due to lower input costs and an increase in copper concentrate stock at the end of the period. The increase in amor tisation mainly due to the change of stripping ratio from 1.84 to 2.10. (**) Operating costs primarily include mining and processing costs related to the Proyecto Riotinto operation. These comprise costs for raw materials (€56.2m), utilities (€31.4m), professional and contract services (€92.9m), maintenance (€13.3m) and other direct production expenses incurred in the extraction and processing of copper concentrate. The decrease in revenues was mainly due to lower concen trate sales volumes and concentrate grades, partially offset by higher realised prices. Inventories of concentrates at year-end was 21,815 tonnes, compared with 6,722 tonnes in 2023. 03. Financial Statements Annual Report 2024 148 Atalaya Mining Copper, S.A. 7. Employee benefit expense (Euro 000’s) 2024 2023 Wages and salaries 20,430 18,836 Social security and social contributions 6,613 6,246 Employees’ other allowances 24 18 Bonus to employees 801 656 Total 27,868 25,756 Average At year end Number of employees 2024 2023 2024 2023 Spain – Full time 492 479 490 476 Spain – Part time 3 6 3 6 Cyprus – Full time 1 1 1 1 Cyprus – Part time 2 2 2 2 United Kingdom – Full time - - 1 - Total 498 488 497 485 The average number of employees and the number of employees at year end by office are: (Euro 000’s) 2024 2023 Financial interest 1,887 1,501 Other received interest - 3,892 1,887 5,393 8. Finance income Financial interests include interest received on bank balances of €0.6 million (2023: €0.5 million) and €1.3 million related to E-LIX project funding (Note 13) Other received interests, in 2023, mainly comprise the €3.5 million interest received as a result of the agreement reached with Astor in May 2023. (Euro 000’s) 2024 2023 Interest expense: Interest payable for borrowings 1,131 2,607 Interest expense on lease liabilities 30 25 Unwinding of discount on mine rehabilitation provision (Note 27) 828 690 1,989 3,322 9. Finance costs Interest payable for borrowings include the financing costs related to Solar plant, other long-term debt and other oper ating facilities. 03. Financial Statements Annual Report 2024 149 Atalaya Mining Copper, S.A. 10. Tax Tax losses carried forward As at 31 December 2024, the Group had tax losses carried forward amounting to €9.7 million from the Spanish subsidiaries. Applicable tax With regard to taxation and, in particular, income tax, the Group is subject to the regulations of several tax jurisdic tions due to the broad geographical activities carried out by the companies comprising the Group. For this reason, the Group effective tax rate is shaped by the breakdown of earnings obtained in each of the countries where it operates and, occasionally, by the taxation of these earnings in more than one country (double taxation). Cyprus The corporation tax rate is 12.5%. Under certain conditions interest income may be subject to defence contribution at the rate of 30%. In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 17% for 2014 and thereafter. Under current legis lation, tax losses may be carried forward and be set off against taxable income of the five succeeding years. Spain Most of the entities resident in Spain for tax purposes are subject to taxation for corporate income tax under Spain’s consolidated tax regime. Under this regime, the companies comprising the tax group jointly determine the Group’s taxable profit and tax liability. (Euro 000’s) 2024 2023 Current income tax charge 2,732 3,419 Deferred tax income relating to the origination of temporary differences (Note 17) (6,297) (6,852) Deferred tax expense relating to reversal of temporary differences (Note 17) 2,528 2,863 (1,037) (570) (Euro 000’s) 2024 2023 Accounting profit before tax 31,523 36,093 Tax calculated at the applicable tax rates of the Company –25% Spain (2023: 12.5% Cyprus) 7,881 4,512 Tax effect of expenses not deductible for tax purposes - 3,290 Tax effect of tax loss for the year 4,018 (1,271) Tax effect of allowances and income not subject to tax (5,769) (4,381) Effect of lower tax rates in other jurisdictions of the group (2,921) 993 Tax effect of tax losses brought forward - 276 Deferred tax (Note 17) (4,246) (3,989) Tax (credit)/ charge (1,037) (570) Country Years Spain 2020-2024 Cyprus 2019-2024 United Kingdom 2019-2024 The tax on the Group’s results before tax differs from the theoretical amount that would arise using the applicable tax rates as follows: Atalaya Mining Copper, S.A. is the parent of Consolidated Tax Group, which comprises all of the companies resident in Spain that are at least 75%-owned, directly or indirectly, by the parent and that meet certain prerequisites. This Consolidated Tax Group was composed of 7 companies in 2024, the most significant of which are: Atalaya Mining Copper, S.A., Atalaya Riotinto Minera, S.L.U. and Atalaya Masa Valverde S.L.U. The rest of the companies resident in Spain for tax purposes that are not included in the above tax group determine their income tax individually. Spanish companies, whether taxed individually or on a consolidated basis, were subject to a general tax rate of 25% in 2024. The corporate income tax rate in Spain for 2024 is 25% (25% in 2023), in accordance with the Spanish General Tax Law. Government and legal proceedings with tax implications The years for which the Group companies have their tax returns open for audit with regard to income tax and the main applicable taxes are as follows: The Group hasn’t recognized tax provisions related to Administrative and judicial proceedings with tax implications in 2024 (2023: €nil). 03. Financial Statements Annual Report 2024 150 Atalaya Mining Copper, S.A. 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) 2024 2023 Parent company (2,468) (6,255) Subsidiaries 34,206 45,024 Profit attributable to equity holders of the parent 31,738 38,769 Weighted number of ordinary shares for the purposes of basic earnings per share (‘000) 140,404 139,880 Basic earnings per share (EUR cents/share) 22.6 27.7 Weighted number of ordinary shares for the purposes of diluted earnings per share (‘000) 145,457 144,224 Diluted earnings per share (EUR cents/share) 21.8 26.9 (Euro 000’s) 2024 2023 Final dividends declared and paid 5,243 4,956 Interim dividends declared and paid 5,063 6,522 10,306 11,478 At 31 December 2024 there are nil warrants and 5,423,666 options (Note 23) (31 December 2023: nil warrants and 4,848,500 options) which have been included when calculating the weighted average number of shares for FY2024. FY 2023 A final dividend of US$0.04 per ordinary share, which is equivalent to approximately £0.031 per share, was proposed on 18 March 2024 for approval by shareholders at the 2024 AGM, which gave a total dividend for 2023 of US$0.09 per share. Following the approval of Resolution 11 by the Company’s shareholders at the 2024 AGM, which took place on 27 June 2024, the final dividend which (based on as exchange rates used for conversion after the record date) amounted to €5.2 million was approved and the divi dend was paid on 9 August 2024. 12. Dividends Cash dividends declared and paid during the year: FY 2024 On 13 August 2024, the Company’s Board of Directors elected to declare an interim dividend of US$0.04 per share, which was equivalent to approximately 3.1 pence per share. The interim dividend was paid on 19 September 2024. A final dividend of US$0.03 per share has been proposed for approval by shareholders at the 2025 Annual General Meeting. This would give a total dividend for 2024 of US$0.07 per share. 03. Financial Statements Annual Report 2024 151 Atalaya Mining Copper, S.A. 12. Property, plant and equipment (Euro 000’s) Land and buildings Right of use assets27 Plant and equipment Assets under construction25 Deferred mining costs24 Other assets23 Total 2024 Cost At 1 January 2024 83,517 7,076 319,129 70,601 64,072 951 545,346 Adjustments - - 5 - - - 5 Opening adjusted 83,517 7,076 319,134 70,601 64,072 951 545,351 Additions30 233 - 332 52,801 9,902 - 63,268 Increase in rehab. Provision (Note 27) 3,274 - - - - - 3,274 Reclassifications26 - - 21,050 (21,969) - 29 (890) Other transfer (572) - - (2,586)30 - - (3,158) Write-off - (148) - - - - (148) Advances - - - 1,60129 - - 1,601 31 Dec 2024 86,452 6,928 340,516 100,448 73,974 980 609,298 Depreciation At 1 January 2024 24,702 2,531 113,547 - 19,063 764 160,607 Adjustments - - 1 - - - 1 Opening adjusted 24,702 2,531 113,548 - 19,063 764 160,608 Charge for the year28 6,192 497 27,328 - 5,655 43 39,715 Write-off - (57) - - - - (57) 31 Dec 2024 30,894 2,971 140,876 - 24,718 807 200,266 Net book value at 31 December 2024 55,558 3,957 199,640 100,448 49,256 173 409,032 2023 Cost 1 Jan 2023 80,326 7,076 291,335 50,235 52,358 872 482,202 Additions 36 - 6,011 42,149 11,714 79 59,782 Increase in rehab. provision 3,145 - - - - - 3,145 Reclassifications - - 21,783 (21,783) - - - Advances 10 - - - - - 10 31 Dec 2023 83,517 7,076 319,129 70,601 64,072 951 545,346 Depreciation At 1 January 2023 20,454 1,998 89,182 - 14,921 739 127,294 Adjustments - - 6 - - - 6 Opening adjusted 20,454 1,998 89,188 - 14,921 739 127,300 Charge for the year 4,248 533 24,359 - 4,142 25 33,307 31 Dec 2023 24,702 2,531 113,547 - 19,063 764 160,607 Net book value at 31 December 2023 58,815 4,545 205,582 70,601 45,009 187 384,739 (23) Includes motor vehicles, furniture, fixtures and office equipment which are depreciated over 5-10 years. (24) Stripping costs related to Cerro Colorado (note 2.9 (b)) (25) Assets under construction at 31 December 2024 amounted to €100.4 million (2023: €70.6 million), this balance include €30.6 million related to San Dionisio where €4.7 million are road deviation, €41.0 million Solar plant, €7.0 million sustaining capital, €13.0 million E-LIX plant and €28.2 million tailing dams capital expenditure. Additions include sustaining capital expenditures with an investment of €4.0 million (2023: €3.4 million), tailings dams project €14.8 million (2023: €13.7 million), E-LIX plant amounted to €2.1 million (€8.9 million in 2023) San Dionisio area spending €25.7 million (2023, €4.8 million) and solar plant €8.4 million (2023, €12.9 million). (26) Reclassifications of €21.1 million to plant and equipment are associated with sustaining capex. Additionally, €0.9 million related to low-rotation stock were reclassified to inventories (material supplies). (27) See leases in Note 28. (28) Increase of depreciation due to the update of its ore reserves in May 2024 in the subsidiary ARM. (29) Advances related to E-LIX plant. (30) During the year ended 31 December 2024, the Group capitalised €1.0 million of borrowing costs related to the construction of the solar plant in accordance with IAS 23. The average effective interest rate applied was 1.5%. The tax deductibility of these capitalised borrowing costs will be realised over the asset’s useful life through depreciation deductions, rather than as an immediate tax relief. The above fixed assets are mainly located in Spain. 03. Financial Statements Annual Report 2024 152 Atalaya Mining Copper, S.A. Description Caption Note Amount (€k) Pilot plant Non-current loan 19 2,627 Industrial Plant Non-current Receivables (prepayment) 20 29,662 Industrial Plant PPE 13 12,978 Convertible Loan Current loan 19 5,352 50,619 E-LIX Project In May 2019, after approx. 4 years of laboratory work, Atalaya initiated a partnership with Lain Technologies Ltd. (herein after “Lain”) for the development of technology known as E-LIX. The E-LIX Technology is a new-developed technology invented and owned by Lain which is protected by industrial secret. Atalaya’s rights on the E-LIX technology is limited to its use on favourable terms and other benefits but excluding the ownership. E-LIX is an innovative electrochemical extraction process developed by Lain to assess the production of zinc and copper cathodes, as well as other derivatives of these metals, from complex sulphide ores. Lain and Atalaya have worked on a partnership to develop the E-LIX technology from 2019 to date. During these years, the collaboration has progressed through different phases, summarised as follows: »» Phase 0: Preliminary work and research. »» Phase 1: Construction and commissioning of the Pilot Plant. »» Phase 2: Operation of the Pilot Plant and feasibility studies of the project. »» Phase 3: Construction and commissioning of an Industrial Plant. As a result of the successful laboratory tests carried out by Atalaya on the E-LIX technology during Phase 0, in July 2020, Atalaya and Lain executed a memorandum of under standing (“MOU”), with the first step being the construction of a pilot plant (the “Pilot Plant”) fully funded by Atalaya via loans. The Pilot Plant was built during 2021 and confirmed the feasibility of E-LIX, proving the capacity of leaching selec tive metals from concentrates and achieving high recovery rates for copper and zinc through a more efficient and sustainable process compared to traditional methods. In December 2021, the Company’s Board of Directors approved the construction and financing of a Phase 1 of a larger-scale plant with a significantly greater processing capacity than the Pilot Plant (the “Industrial Plant”). As of 31 December 2024, the construction of the Indus trial Plant was close to be completed and Lain was in the process of bringing the Industrial Plant into operation at a commercial production rate. Once the plant is fully ramped up it is intended that the plant will operate at normal commercial levels.. Throughout the partnership from 2019 and aligned with the MOU signed between Atalaya and Lain, several agreements have been signed, including: »» Construction of the fixed assets required for the use of the E-LIX technology; »» Exclusivity agreements »» Funding agreements for the construction and the commissioning of the Pilot Plant »» Funding agreements for the construction and commis sioning of the Industrial Plant; and »» Operational agreements for the construction of the Industrial Plant. As of 31 December 2024, Atalaya has the following balances relating to the pilot plant and the industrial plant arising from the agreements with Lain: Recoverability of Assets The E-LIX technology has demonstrated positive results in the recovery of pure zinc and copper, as well as their derivatives, in a technologically efficient manner. The E-LIX technology has the potential to unlock the production of metals from complex ore in a financially and sustainable viable manner and its use at an industrial scale could poten tially increase significantly the life of the mine at Proyecto Riotinto. As of the reporting date, Atalaya has a reasonable expec tation that the E-LIX technology can operate a commercial scale. During 2024, the construction of the Industrial Plant and the ramp up experienced certain delays but unrelated to the E-LIX technology. Atalaya has considered both external and internal factors that support the strength of the project and has assessed the recoverability of the assets associated with E-LIX tech nology based on a financial model that demonstrates its long-term sustainability. The main production assumptions used in the base case financial model zinc model are as follows for the balances relating to the pilot and industrial plant: Main assumptions for the E-LIX model Total investment* €million 45 Processing capacity Tpa cons 74,500 Zinc metal produced tpa Zn 6,700 Zinc recovery rate % 90 Zinc grade in concentrate % 10 (*) Excluding convertible loan which is guaranteed with equity of Lain. The assessment carried out by the Company on the zinc base case financial model results on an after-tax NPV (8%) of €18.8 million a 14% IRR and a payback period of 7 years estimated using long-term prices of 3,000 US$/tonne. 03. Financial Statements Annual Report 2024 153 Atalaya Mining Copper, S.A. 14. Intangible assets Whilst the ramp-up of the Industrial Plant is not completed and the production assumptions are yet to be proven, the Company has enough information to consider the above production assumptions as reasonable. In addition, various adverse scenarios were tested to determine whether, as at 31 December 2024, the asset related to the E-LIX technology should be impaired, including lower recovery rates, higher sustaining capex and sensitivity on zinc prices ranging +/- 15% of the base case price and additional delays of the ramp-up with a €10 million extra investment. Based on the base case financial model analysis, and while acknowledging that unforeseen delays in the ramp up or unfavourable market conditions could influence this outlook, the Board has a reasonable expectation that Atalaya will be able to recover the balances relating to Lain and therefore, no impairment indicators have been identified. (Euro 000’s) Permits31 Licences, R&D and Software Other intangible assets Total 2024 Cost At 1 January 2024 81,199 8,758 - 89,957 Additions - - 17,77132 17,771 Reclassification (3,128) (6,948) 10,076 - 31 Dec 2024 78,071 1,810 27,847 107,728 Amortisation At 1 January 2024 32,080 8,480 - 40,560 Charge for the year 3,878 29 - 3,907 Reversal of impairment losses - (6,948) - (6,948) 31 Dec 2024 35,958 1,561 - 37,519 Net book value at 31 December 2024 42,113 249 27,847 70,209 2023 Cost 1 Jan 2023 81,255 8,642 - 89,897 Additions 144 116 - 260 Disposals (200) - - (200) 31 Dec 2023 81,199 8,758 - 89,957 Amortisation 1 Jan 2023 27,627 8,440 - 36,067 Charge for the year 4,453 40 - 4,493 31 Dec 2023 32,080 8,480 - 40,560 Net book value at 31 December 2023 49,119 278 - 49,397 (31) Permits include the mining rights of Proyecto Riotinto, Proyecto Touro, Masa Valverde and Ossa Morena (32) Additions include €16.7 million at fair value related to the interest to acquire the 80% of the shares of Cobre San Rafael, SL, as per the Share holders’ Agreement, including €16.5 million (note 26) and €0.2 million related to capitalisation expenses according with the policy of the Group once the Touro Project was granted as Strategic Industrial Project (PIE). 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 in case there is an indicator of impairment. Atalaya assessed its assets concluding that there are no indicators of impairment for either Proyecto Riotinto or any other as of 31 December 2024 and 2023. Reversal of Impairment on Intangible Assets On 29 January 2020, the Company released an update on Proyecto Touro. The Company announced a recent press released by the regional government of Galicia (“Xunta de Galicia”) in relation to the permitting process, where the General Directorate to the Mines, Energy and Industry Department announced a negative Environmental Impact Statement for Proyecto Touro. 03. Financial Statements Annual Report 2024 154 Atalaya Mining Copper, S.A. As a result of the announcement made by the Xunta de Galicia, the Company re-assessed the uncertainty about the feasibility of obtaining the necessary permits for Touro, impacting the project’s development prospects. As at result of the re-assessment, the Company booked as at 31 December 2019 an impairment of €6.9 million related to the capitalised cost incurred by the Company to the date according to its accounting policy. However, the Company retained the value of the mining rights at €5.0 million, as these rights remained in force. Since 2019, the Company had actively worked with stake holders to advance the permitting process and improve the regulatory framework for Proyecto Touro. In 2024, the permitting and operational environment for the project had improved significantly, leading to a reassessment of its technical and financial feasibility. A key development had been the designation of Proyecto Touro as a Strategic Industrial Project (“PIE”) by the Xunta de Galicia. This designation had granted priority status, accel erated administrative procedures, and reduced regulatory uncertainties, removing the primary risk factor that had led to the initial impairment. In compliance with IAS 36 – Impairment of Assets, the Company had conducted an impairment test as at 31 December 2024, concluding that the conditions that had led to the impairment in 2019 no longer existed. The impair ment test had been carried out by evaluating both technical and financial feasibility, confirming that the project was in a position to generate economic benefits in line with initial expectations. The impairment assessment had considered: »» Technical viability, based on updated resource and reserve estimates, engineering reports, and environ mental compliance advancements. »» Financial feasibility, including updated cash flow projections, capital expenditure forecasts, and a revised financing strategy that had demonstrated the project’s ability to meet investment requirements. »» Projected long-term copper prices, in line with industry benchmarks and independent market forecasts. »» Capital and operating cost projections, supported by recent feasibility studies To further validate the assessment, an independent third- party valuation of the mining assets had been conducted. The valuation had confirmed that the estimated fair value of the project was higher than the total carrying amount of the intangible assets associated with Proyecto Touro, rein forcing the recoverability of the asset. As a result, the impairment loss of €6.9 million had been fully reversed as at 31 December 2024, reflecting the improved expectations for the project and supporting the recovera bility of the asset in accordance with IAS 36 – Impairment of Assets. This assessment had demonstrated that there had been no doubts regarding the technical and financial viability of Proyecto Touro as at the reporting date, further supporting the impairment reversal. 15. Non-current assets During the year, the Group entered into agreements with Mineral Prospektering i Sverige AB (“MPS”) in relation to the Skellefte Belt Project and the Rockliden Project, both located in established volcanogenic massive sulphide (“VMS”) districts known for their potential mineral resources. The Group entered into earn-in agreements with MPS to acquire an initial 75% interest in these projects, structured as follows: »» An initial funding commitment of US$3 million per project, to be invested over a 24-month period. »» Stage 1 option to provide additional funding of US$3 million per project to secure a 51% ownership interest. »» Stage 2 option to provide additional funding of US$6 million per project, and complete scoping studies, to secure a 75% ownership interest. During 2024, a total of €1.2 million in funding was provided to MPS in relation to preparatory work for the planned winter drilling campaigns and to compensate for certain past expenditures incurred by MPS. The following table summarises the movement in explora tion and evaluation assets during the year: (Euro 000’s) 2024 2023 Opening balance as of 1 January - - Additions during the year 1,205 - Impairment losses (1,205) - Closing balance as of 31 December - - As of 31 December 2024, the carrying amount of explora tion and evaluation assets was reviewed for impairment. Following management’s assessment, the Company recog nised a full impairment of €1.2 million, as these projects remain in the early exploration stage and are still far from obtaining operating mining permits. 03. Financial Statements Annual Report 2024 155 Atalaya Mining Copper, S.A. (Euro 000’s) 31 Dec 2024 31 Dec 2023 Intangible assets 94 94 Trade and other receivables 4 3 Cash and cash equivalents 15 19 Trade and other payables (115) (115) Net assets 2 1 Revenue - - Expenses - - Net profit/(loss) after tax - - 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 initiated a 50/50 joint venture with Rumbo to assess and leverage the potential of class B resources within the tailings dam and waste areas at Proyecto Riotinto. Pursuant to the joint venture agreement, ARM served as the operator and reimbursed Rumbo for the expenses linked to the classification application for the Class B resources. ARM covered the initial expenses for a feasibility study, with a maximum funding limit of €2.0 million. Subsequent costs were shared 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: 16. Investment in joint venture 18. Inventories (Euro 000’s) 31 Dec 2024 31 Dec 2023 Finished products 19,732 8,416 Materials and supplies 25,540 21,852 Work in progress 3,890 3,046 49,162 33,314 As at 31 December 2024, copper concentrate produced and not sold amounted to 21,815 tonnes (FY2023: 6,722 tonnes), due to timing on shipments. Accordingly, the inventory for copper concentrate was €19.7 million (FY2023: €8.4 million). During the year 2024 the Group recorded cost of sales amounting to €242.2 million (FY2023: €247.3 million). Materials and supplies relate mainly to machinery spare parts. Work in progress represents ore stockpiles, which is ore that has been extracted and is available for further processing. Consolidated statement of financial position Consolidated income statement (Euro 000’s) 2024 2023 2024 2023 Deferred tax asset At 1 January 11,282 7,293 - - Deferred tax income relating to the origination of temporary differences (Note 10) 6,297 6,852 (6,297) (6,852) Deferred tax asset due to losses available against future taxable income overprovision previous years 34 - - - Deferred tax expense relating to reversal of temporary differences (Note 10) (2,528) (2,863) 2,528 2,863 At 31 December 15,085 11,282 Deferred tax income/(expense) (Note 10) (3,769) (3,989) 17. Deferred tax 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 Group held tax losses amounted to €9.7 million in Spain (2023: €6.0 million). 03. Financial Statements Annual Report 2024 156 Atalaya Mining Copper, S.A. 20. Trade and other receivables 19. Loans (Euro 000’s) 2024 2023 Non-current loans Loans 2,627 - Current loans Loans 5,352 - 5,352 - (Euro 000’s) 2024 2023 Non-current trade and other receivables Deposits 611 307 Loans 141 233 Prepayments for service contract33 29,662 23,476 Other non-current receivables 2,838 2,686 33,252 26,702 Current trade and other receivables Trade receivables at fair value – subject to provisional pricing 9,727 10,110 Trade receivables from shareholders at fair value – subject to provisional pricing (Note 31.5) 1,042 5,054 Other receivables from related parties at amortised cost (Note 31.4) - 56 Deposits 35 37 VAT receivable 20,898 21,003 Prepayments 4,507 5,855 Other current assets 654 782 36,863 42,897 Allowance for expected credit losses - - Total trade and other receivables 70,115 69,599 During 2024, the Company reassessed the classification of a loan related to the funding of the E-LIX pilot plant. This loan, originally classified as prepayments for service contract under trade receivables, has been reclassified as a non-current loan, as it is now considered more probable that the recoverability will be in cash rather than through the use of the E-LIX technology. The original agreement with Lain Technologies Ltd. contemplated both possibilities—repayment in cash or recovery through the use of the E-LIX technology. Initially, the Company expected to recover the amount through the use of the technology; however, following a reassessment, it has now been concluded that repayment in cash is the more probable outcome. This change in classification is a reclassification and not a correction of an error, as the previous classification was based on the Company’s best estimate at the time. Given the updated assessment of the expected recovery method, the loan has been presented accordingly in 2024. Non-current loans are referred to the loan with Lain Technol ogies regarding the Pilot Plant. Includes principal for €2.3 million plus €0.3 million of interest accumulated (see note 13). This balance bears interest of EURIBOR 12M + 2%. This amount has been reclassified from prepayments regarding the previous year. On 30 September 2024 the Company signed a convertible loan, granting a credit facility of up to a maximum amount of €10 million. This facility was granted for a fixed term up to 31 December 2025. This balance bears interest of EURIBOR 3M + 2%. This balance includes €5.3 million referred to the convertible loan with Lain Technologies Ltd plus €0.1 million of interest accumulated (see note 13). (33) On 28 January 2022 the Company signed a loan for €15 million and on 8 May 2023 an amendment up to €20 million to the construction of the first phase of the industrial-scale plant (“Phase I”) that utilises the E-LIX System. This loan was granted for a fixed term of 10 years since the start of commer cial production. This balance includes capitalised interest, and repayment will be made through the use of the E-LIX technology. This balance also includes €7.6 million refer additional costs classified as prepayments related to Industrial Plant of Proyecto E-LIX (see note 13). 03. Financial Statements Annual Report 2024 157 Atalaya Mining Copper, S.A. 21. Other Financial assets (Euro 000’s) 31 Dec 2024 31 Dec 2023 Financial asset at fair value through OCI (see (a) below) 1,124 1,131 Total current 23 30 Total non-current 1,101 1,101 (Euro 000’s) 31 Dec 2024 31 Dec 2023 At 1 January 1,131 1,134 Fair value change recorded in equity (Note 24) (7) (3) At 31 December 1,124 1,131 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. a) Financial assets at fair value through OCI Non-current deposits included €250k (€250k at 31 December 2023) as a collateral for bank guarantees, which was recorded as restricted cash (or deposit) in Proyecto Riotinto and €334k related to Proyecto Masa Valverde. Company name Principal activities Country of incorporation Effective proportion of shares held at 31 December 2024 Explotaciones Gallegas del Cobre SL Exploration company Spain 12.5% KEFI Minerals Plc Exploration and development mining company listed on AIM UK 0.19% Prospech Limited Exploration company Australia 0.53% The Group decided to recognise changes in the fair value through Other Comprehensive Income (‘OCI’), as explained in Note 2.12. As per Note 2.29, the Group’s investment in Explotaciones Gallegas del Cobre S.L., amounting to €1,101k, is classified as a Level 3 financial instrument, as its fair value is based on unobservable inputs. The fair value is determined using valuation techniques that reflect the asset’s nature and the absence of an active market. The primary methodology applied is a market- based approach, considering comparable transactions within the mining exploration sector. Where such data is unavailable, management applies an adjusted cost approach, incorporating estimates of resource potential and exploration progress. The valuation is reviewed periodically, considering changes in market conditions, commodity prices, and exploration results. 22. Cash and cash equivalents (Euro 000’s) 31 Dec 2024 31 Dec 2023 Unrestricted cash and cash equivalents at Group level 43,184 94,868 Unrestricted cash and cash equivalents at Operation level 9,694 26,139 Consolidated cash and cash equivalents 52,878 121,007 03. Financial Statements Annual Report 2024 158 Atalaya Mining Copper, S.A. 23. Share capital Shares 000’s Share Capital €’000 Share premium €’000 Total €’000 Authorised Ordinary shares of €0.09 each* 200,000 18,000 - 18,000 Issued and fully paid Issue Date Price (£) Details Shares 000’s Share Capital €’000 Share premium €’000 Total €’000 31 December 2022/ 1 January 2023 139,880 13,596 319,411 333,007 31-Dec-23 139,880 13,596 319,411 333,007 9-Feb-24 3.090 Exercised share options (a) 20 3 71 74 7-May-24 2.015 Exercised share options (b) 67 6 151 157 22-May-24 2.015 Exercised share options (c) 600 53 1,368 1,421 27-Jun-24 4.160 Exercised share options (d) 120 11 570 581 27-Jun-24 3.575 Exercised share options (d) 36 3 149 152 27-Jun-24 3.270 Exercised share options (d) 36 3 136 139 26- Dec 24 Capital increase** 272 272 26- Dec 24 Capital decrease** - (1,279) - (1,279) 31-Dec-24 140,759 12,668 321,856 334,524 (Euro 000’s) 31 Dec 2024 31 Dec 2023 Euro – functional and presentation currency 37,299 50,470 Great Britain Pound 70 52 United States Dollar 15,509 70,485 52,878 121,007 Cash and cash equivalents denominated in the following currencies: *The Company´s share capital at 31 December 2024 is 140,759,043 ordinary shares (139,879,209 in 2023) of €0.09 each. ** Decrease of capital from 7.5p to €0.09 per share Authorised capital The Company’s authorised share capital is 200,000,000 ordinary shares After the re-domiciliation of Atalaya to Spain, in order to comply with Spanish law, redenominate it to euros, thereby increasing the share capital (represented by 140,759,043 ordinary shares) to 12,395,853.02 euros, instead of 10,556,928.2 GBP, and the nominal value per ordinary share to 0.088065 EUR instead of 0.075 GBP (all applying the exchange rate of 0.85165 EUR/GBP. In order to round the nominal value of the shares following the Cross- Border Transformation, the shareholders have agreed to increase the Company’s share capital, currently amounting to €12,395,853.02, by €272,460.85. This has resulted in an increase of €0.001935 in the nominal value of each share, thereby setting the nominal value per share at €0.09. The share capital increase has been carried out using distribut able reserves. Issued capital (a) On 9 February 2024, the Company announced that it has issued 20,000 ordinary shares of 7.5p in the Company (“Option Shares”) pursuant to an exercise of share options by an employee. (b) On 7 May 2024, Atalaya announced that it has issued 66,500 ordinary shares of 7.5p in the Company (“Option Shares”) pursuant to an exercise of share options by an employee. (c) On 22 May 2024, the Company announced that it has issued 600,000 ordinary shares of 7.5p in the Company (“Option Shares”) pursuant to an exercise of share options by a person discharging managerial responsibil ities (“PDMR”). (d) On 27 June 2024, Atalaya announced that it has issued 193,334 ordinary shares of 7.5p in the Company (“Option Shares”) pursuant to the exercise of share options by an employee. These options were issued as part of the Company’s long term incentive plan. No shares were issued in FY2023. 03. Financial Statements Annual Report 2024 159 Atalaya Mining Copper, S.A. 24. Other reserves Grant date Expiry date Exercise price £ Share options 30 Jun 2020 30 Jun 2030 1.475 516,000 24 Jun 2021 23 Jun 2031 3.090 996,000 22 Jun 2022 30 Jun 2027 3.575 1,188,333 22 May 2023 21 May 2028 3.270 1,268,333 11 June 2024 10 Jun 2029 4.135 1,305,000 22 Dec 2024 21 Dec 2029 3.335 150,000 Total 5,423,666 Weighted average exercise price £ Share options At 1 January 2024 2.968 4,848,500 Granted options during the year 4.053 1,455,000 Options executed during the year 2.449 (879,834) 31 December 2024 3.343 5,423,666 Depletion factor reserve During the twelve month period ended 31 December 2024, the Group has recognised €8.9 million (FY2023: addition of €nil) as a depletion factor reserve as per the Spanish Corporate Tax Act. 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. (Euro 000’s) Share option Bonus share Depletion factor34 FV reserve of financial assets at FVOCI35 Non- distributable reserve36 Distributable reserve37 Total 1 Jan 2023 10,365 208 37,778 (1,153) 8,316 14,291 69,805 Recognition of share based payments 661 - - - - - 661 Change in fair value of financial assets at fair value through OCI (Note 21) - - - (3) - - (3) 31 Dec 2023/1 Jan 2024 11,026 208 37,778 (1,156) 8,316 14,291 70,463 Recognition of depletion factor - - 8,949 - - - 8,949 Recognition of non-distributable reserve - - - - 142 - 142 Recognition of distributable reserve - - - - - 7,848 7,848 Recognition of share based payments 1,379 - - - - - 1,379 Change in fair value of financial assets at fair value through OCI (Note 21) - - - (7) - - (7) Other changes in reserves 464 - - - - (464) - 31 Dec 2024 12,869 208 46,727 (1,163) 8,458 21,675 88,774 (34) See the “Depletion factor reserve” section below. (35) See the “Fair value reserve of financial assets at FVOCI” section below. (36) See the “Non-distributable reserve” section below. (37) See the “Distributable reserve” section below. (38) See the “Share options” section below. 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 for an amount of €8.0m. Distributable reserve This heading includes the transfer from income for the year attributable to the parent for 2024. Share options Details of share options outstanding as at 31 December 2024: 03. Financial Statements Annual Report 2024 160 Atalaya Mining Copper, S.A. On 12 June 2024, the Company announced that in accord ance with the Company’s Long Term Incentive Plan 2020, it granted 1,305,000 share options to Persons Discharging Managerial Responsibilities (“PDMRs”) and other employees and, on 22 December was granted 150,000 share options (the “Options”) to an employee. On 9 February 2024, the Company announced that it has issued 20,000 ordinary shares of 7.5p in the Company (“Option Shares”) pursuant to an exercise of share options by a former employee. On 7 May 2024, the Company announced that it has issued 66,500 ordinary shares of 7.5p in the Company (“Option Shares”) pursuant to an exercise of share options by non-PDMr. employees and on 22 May announced that 600,000 ordinary The volatility has been estimated based on the underlying volatility of the price of the Company’s shares in the preceding twelve months. Grant date Weighted average share price £ Weighted average exercise price £ Expected volatility Expected life (years) Risk free rate Expected dividend yield Estimated Fair Value £ 23 Feb 2017 1.440 1.440 51.8% 5 0.6% Nil 0.666 29 May 2019 2.015 2.015 46.9% 5 0.8% Nil 0.66 8 July 2019 2.045 2.045 46.9% 5 0.8% Nil 0.66 30 June 2020 1.475 1.475 50.32% 10 0.3% Nil 0.60 23 June 2021 3.090 3.090 50.91% 10 0.7% Nil 0.81 26 Jan 2022 4.160 4.160 49.18% 10 1.149% Nil 1.12 22 June 2022 3.575 3.575 34.12% 5 2.748% Nil 0.71 22 May 2023 3.270 3.270 38.15% 5 4.219% Nil 0.88 11 June 2024 4.135 4.135 39.28% 5 4.149% 2.13% 0.93 22 Dec 2024 3.335 3.335 39.28% 5 4.322% 2.13% 0.79 On 23 May 2023, the Company announced that in accord ance with the Company’s Long Term Incentive Plan 2020, it granted 1,305,000 share options to Persons Discharging Managerial Responsibilities (“PDMRs”) and other employees. In general, option agreements contain provisions adjusting the exercise price in certain circumstances including the allotment of fully paid ordinary shares by way of a capitali sation of the Company’s reserves, a subdivision or consol idation 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: The non-controlling interest corresponds to the partner involved in Sociedad Cobre San Rafael, the owner of the Touro project. 25. Non-controlling interest (Euro 000’s) 2024 2023 Opening balance (9,104) (6,998) Share of total comprehensive income for the year 822 (2,106) Revaluation of NCI 10,436 - Closing balance 2,154 (9,104) 03. Financial Statements Annual Report 2024 161 Atalaya Mining Copper, S.A. 26. Trade and other payables Change of controlling interest Atalaya held an initial 10% stake in Cobre San Rafael S.L., which, under normal circumstances, would classify it as a non-controlling investment with limited influence over the company’s operations. However, to determine of the effective control of the company it has been considered the substantive contractual arrangements between Atalaya and the other shareholders according to note 2.3. As a result of the changes in project Touro that have occurred during the current year (note 1) , Group considers it likely that phases 2, 3 and 4 of the Touro project will be As of 31 December 2024, other non-current payables include €9.7 million reflecting the liabilities related to the potential acquisition of 80% of the shares of Cobre San Rafael, SL, as per the Shareholders’ Agreement (note 14). In addition, there are €2.8 million related with the acquisition of Atalaya Masa Valverde SL formerly Cambridge Minería España, SL and Atalaya Ossa Morena SLU formerly Rio Narcea Nickel, SL (note 1). Other current payables include €6.8 million also related to the potential increase in the stake of Cobre San Rafael, S.L., under the Shareholders’ Agreement (note 14). This amount has been classified as current, as the likelihood of reaching the associated milestone is high, making settlement prob able within 2025. completed, and therefore, it has been recorded the asso ciated impact in Non-controlling interest, according with the shareholders agreement, due to the impact that the project’s phase change has on the responsibilities agreed between the parties as outlined in notes 1, as well as the allocation of the intangible asset that also emerged during the 2024 fiscal year. The significant financial information with respect to the subsidiary before intercompany eliminations as at and for the twelve-month period ended 31 December 2024 and 2023 is as follows: (Euro 000’s) 2024 2023 Non-current assets 15,322 7,273 Current assets 1,636 601 Non-current liabilities (21,624) (17,096) Grants (177) - Current liabilities (960) (697) Equity 9,915 7,578 (Profit)/loss for the year and total comprehensive income (4,112) 2,341 (Euro 000’s) 31 Dec 2024 31 Dec 2023 Non-current trade and other payables Other non-current payables 12,492 2,003 Government grant 1,491 202 13,983 2,205 Current trade and other payables Trade payables 78,965 70,303 Trade payables to shareholders (Note 31.5) 109 179 Accruals 2,505 3,395 VAT payable - 391 Other 8,511 1,654 90,090 75,922 Trade payables are mainly for the acquisition of materials, supplies and other services. These payables do not accrue interest and no guarantees have been granted. The fair value of trade and other payables approximate their book values. The Group’s exposure to currency and liquidity risk related to liabilities is disclosed in Note 3. Trade payables are non-interest-bearing and are normally settled on 60-day terms. Information on the average period of payment to suppliers in Spain The disclosures made in relation to the average period of payment for trade payables in Spain are presented below in accordance with that established in applicable law. 03. Financial Statements Annual Report 2024 162 Atalaya Mining Copper, S.A. Average payment days to suppliers Days 2024 2023 Average payment days for payment to suppliers 28 27 Ratio of transactions paid 31 29 Ratio of transactions outstanding for payment 15 25 (€m) 2024 2023 Total payments made 187.8 363.2 Total payments made within the legal term 115.3 339.7 Percentage over total payments 80% 94% Total payments outstanding 50.8 36.3 Number of invoices 2024 2023 Number of invoices within the legal term 7,013 11,524 Percentage over total invoices 85% 88% 27. Provisions (Euro 000’s) Other provisions Legal costs Rehabilitation costs Total 31 Dec 2022/1 Jan 2023 1,435 226 23,374 25,035 Additions - 1 - 1 Used of provision (685) - (518) (1,203) Increase of provision - - 3,145 3,145 Finance cost (Note 9) - - 690 690 31 Dec 2023/1 Jan 2024 750 227 26,691 27,668 Additions - 230 - 230 Used of provision - (62) (944) (1,006) Transfer to other non-current Payables (750) - - (750) Increase of provision - - 3,274 3,274 Finance cost (Note 9) - - 828 828 31 Dec 2024 - 395 29,849 30,244 (Euro 000’s) 2024 2023 Non-Current 29,328 27,234 Current 916 434 Total 30,244 27,668 Rehabilitation provision Rehabilitation provision represents the estimated cost required for adequate restoration and rehabilitation upon the completion of production activities. These amounts will be settled when rehabilitation is undertaken, generally over the project’s life. During 2020, Management engaged an independent consultant to review and update the rehabilitation liability. The updated estimation includes the expanded capacity of the plant and its impact on the mining project. The discount rate used in the calculation of the net present value of the liability as at 31 December 2024 was 3.23% (2023: 3.62%), which is the 15-year Spain Government Bond rate for 2024. An inflation rate of 2%-2.80% (2023: 1%-3.10%) is applied on annual basis. In May 2024, Atalaya incorporated an update of its ore reserves based on an independent expert analysis in accordance with the Canadian Institute of Mining, Metal lurgy and Petroleum (“CIM”) Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council (the “CIM Standards”). This update has some impact on our financial statements and accounting estimates and reflects a revised understanding of the economic potential and operational requirements of our mining assets. 03. Financial Statements Annual Report 2024 163 Atalaya Mining Copper, S.A. 28. Leases Right – of-use assets Lease liabilities (Euro 000’s) Lands and buildings Vehicles Laboratory equipment Total As at 1 January 2024 4,545 - - 4,545 4,378 Additions - - - - - Depreciation expense (440) - - (440) - Interest expense - - - - 30 Payments - - - - (519) Write-off (148) (148) (88) As at 31 December 2024 3,957 - - 3,957 3,801 (Euro 000 ’s) Between 1 – 5 Years Between 6 – 10 Years More than 10 years Expected payments for rehabilitation of the mining site, discounted 5,167 19,612 5,070 The expected payments for the rehabilitation work are as follows: 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 2024. Management has reviewed indi vidually each case and made a provision of €395k (€227k in 2023) for these claims, which has been reflected in these consolidated financial statements. The Group entered into lease arrangements for the renting of land and a warehouse 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: The Group recognised rent expense from short-term leases (Note 6). 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 2024, the remaining term of this lease is six years. (Note 2). (Euro 000’s) 31 Dec 2024 31 Dec 2023 Non-current Leases 3,320 3,877 3,320 3,877 Current Leases 481 501 481 501 (Euro 000’s) Twelve month ended 31 Dec 2024 Twelve month ended 31 Dec 2023 As at 31 December Depreciation expense of right-of-use assets (440) (533) Interest expense on lease liabilities (30) (25) Total amounts recognised in profit or loss (470) (558) The amounts recognised in profit or loss, are set out below: 03. Financial Statements Annual Report 2024 164 Atalaya Mining Copper, S.A. Present value of minimum lease payments due 31 Dec 2024 31 Dec 2023 €'000 €'000 Within one year 481 501 2 to 5 years 1,856 1,928 Over 5 years 1,464 1,949 3,801 4,378 Minimum lease payments due 31 Dec 2024 31 Dec 2023 €'000 €'000 Within one year 518 531 2 to 5 years 2,075 2,125 Over 5 years 1,729 2,285 4,322 4,941 (Euro 000’s) Lease liability Balance 1 January 2024 4,378 Additions - Interest expense 30 Lease payments (519) Write-off (88) Balance at 31 Dec 2024 3,801 Balance at 31 Dec 2024 »» Non-current liabilities 3,320 »» Current liabilities 481 3,801 29. Borrowings (Euro 000’s) 2024 2023 Non-current borrowings Credit facilities - fix interest - - Credit facilities - variable interest 10,866 16,131 10,866 16,131 Current borrowings Credit facilities - fix interest - 5,626 Credit facilities - variable interest 6,921 44,930 6,921 50,556 The Group had credit approval for unsecured facilities totalling €97.4 million (€103.8 million at 31 December 2023). During 2024, Atalaya drew down some of its existing credit facilities to finance the solar plant, payable amount of €13.9 million at 31 December 2024 (2023: €20.0m) and for the construction of a new part of the processing plant payable amount of €2.8 million at 31 December 2024 (2023: €nil). Borrowing with fixed interest rates in 2023 was between a range of 2.00% and 2.45%. Margins on borrowings with variable interest rates, usually 3 months EURIBOR and 12 months EURIBOR, range from 0.75% to 2.25% with an average margin of 1.25%. At 31 December 2024, the Group had used €17.8 million of its facilities and had undrawn facilities of €79.5 million. 29(a) Net debt reconciliation Reconciliation of Liabilities Arising from Financing Activities In accordance with IAS 7 paragraph 44D, the reconciliation below provides information on changes in liabilities arising from financing activities, including both cash and non-cash changes. €'000 2024 2023 Cash and cash equivalents 52,878 121,007 Borrowings – repayable within one year (6,921) (50,556) Borrowings – repayable after one year (10,866) (16,131) Lease (3,801) (4,378) Net debt 31,290 49,942 03. Financial Statements Annual Report 2024 165 Atalaya Mining Copper, S.A. €'000 Cash Borrowings Lease Total Net debt as at 1 January 2023 126,448 (73,363) (4,914) 48,171 Financing cash flows (4,504) - - (4,504) Proceeds from borrowings - (36,730) - (36,730) Repayment of borrowings - 43,216 536 43,752 Foreign exchanges adjustments (937) - - (937) Other changes Interest paid - 2,607 25 2,632 Interest expense - (2,417) (25) (2,442) Net debt as at 31 December 2023 121,007 (66,687) (4,378) 49,942 Financing cash flows (69,931) - - (69,931) Proceeds from borrowings - (3,000) - (3,000) Repayment of borrowings - 51,900 519 52,419 Foreign exchanges adjustments 1,802 - - 1,802 Other changes Interest paid - 1,131 30 1,161 Interest expense - (1,131) (30) (1,161) Other changes - 58 58 Net debt as at 31 December 2024 52,878 (17,787) (3,801) 31,290 (*) The comparative figures of the cash flow statement includes further breakdown in respect comparative figures, breaking down loan proceeds and repayments for a better understanding of the movement. 30. Acquisition, incorporation and disposals of subsidiaries 2024 Acquisition and incorporation of subsidiaries There were no acquisition or incorporation of subsidiaries during the year. Disposals of subsidiaries There were no disposals of subsidiaries during the year. Wind-up of subsidiaries There were no disposals of subsidiaries during the year. 2023 Acquisition and incorporation of subsidiaries There were no acquisition or incorporation of subsidiaries during the year. Disposals of subsidiaries There were no disposals of subsidiaries during the year. Wind-up of subsidiaries There were no disposals of subsidiaries during the year. 03. Financial Statements Annual Report 2024 166 Atalaya Mining Copper, S.A. 31. Group information and related party disclosures Subsidiary companies Parent Principal activity Country of incorporation Effective proportion of shares held Atalaya Touro (UK) Ltd Atalaya Mining Copper SA Holding United Kingdom 100% Atalaya Financing Ltd Atalaya Mining Copper SA Financing Cyprus 100% Atalaya MinasdeRiotinto Project (UK) Ltd Atalaya Mining Copper SA Holding United Kingdom 100% EMED Marketing Ltd Atalaya Mining Copper SA Trading Cyprus 100% Atalaya Riotinto Minera S.L.U. Atalaya MinasdeRiotinto Project (UK) Ltd Production Spain 100% Eastern Mediterranean Exploration and Development S.L.U. Atalaya MinasdeRiotinto Project (UK) Ltd Dormant Spain 100% Cobre San Rafael, S.L.39 Atalaya Touro (UK) Ltd Exploration Spain 10% Recursos Cuenca Minera S.L.U. Atalaya Riotinto Minera SLU Dormant Spain J-V Fundacion Atalaya Riotinto Atalaya Riotinto Minera SLU Trust Spain 100% Atalaya Servicios Mineros, S.L.U. Atalaya MinasdeRiotinto Project (UK) Ltd Holding Spain 100% Atalaya Masa Valverde S.L.U. Atalaya Servicios Mineros, S.L.U. Exploration Spain 100% Atalaya Ossa Morena S.L.U.40 Atalaya Servicios Mineros, S.L.U. Exploration Spain 99.9% Iberian Polimetal S.L.U. Atalaya Servicios Mineros, S.L.U. Dormant Spain 100% 31.1 Information about subsidiaries These audited consolidated financial statements include: (39) Cobre San Rafael, S.L. is the entity which holds the mining rights of Proyecto Touro. The Group has control in the government, key management and other key business aspects 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)). Transactions between Atalaya and Cobre San Rafael are not disclosed as related party interest as they are fully eliminated as part of the consolidation process (Note 2.3 (b)). (40) Rio Narcea Nickel, S.L.U. changed its name to Atalaya Ossa Morena, S.L.U on 31 January 2022. In July 2022, Atalaya increased its ownership interest in Proyecto Ossa Morena to 99.9%, up from 51%, following completion of a capital increase that will fund exploration activities. 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: (41) These amounts related to the performance bonus for 2024 (and 2023 in respect of the comparatives) approved by the Board of Directors following the proposal of the Remuneration Committee. In the 2023 financial statements, the amount disclosed related to the bonus paid in the year in respect of the preceding year as the 2023 bonus had not yet been decided by the Board of Directors at the time the financial statements were approved. As the bonus for 2024 has been approved as explained above, this amount has been disclosed for 2024. The bonus disclosed for 2023 remains stated at the amount actually paid in that year in respect of 2022. The bonus in respect of 2023 was €327k for the Executive Director and €247k for other key management. (42) Includes wages and salaries of key management personnel of €568k (2023: €568k) and other benefits of €30k (2023: €20k). At 31 December 2024 amounts due to Directors, as from the Company, are €nil (€nil at 31 December 2023) and €nil (€nil at 31 December 2023) to key management. (Euro 000’s) 2024 2023 Directors’ remuneration and fees 1,275 1,092 Director’s bonus41 294 322 Share option-based benefits to Directors 409 190 Key management personnel remuneration42 598 588 Key management bonus41 325 221 Share option-based and other benefits to key management personnel 409 190 3,215 2,603 03. Financial Statements Annual Report 2024 167 Atalaya Mining Copper, S.A. Share-based benefits In 2024, the Company granted a total of 800,000 share options to Persons Discharging Managerial Responsibilities (PDMRs) with an exercise price of 413.5 pence per share and an expiry date of 10 June 2029 under the Long Term Incentive Plan 2020 (LTIP20), which was approved by share holders at the Annual General Meeting on 25 June 2020. In 2023, the Company granted a total of 800,000 share options to Persons Discharging Managerial Responsibilities (PDMRs) with an exercise price of 327.0 pence per share and an expiry date of 21 May 2028 under the Long Term Incentive Plan 2020 (LTIP20), which was approved by shareholders at the Annual General Meeting on 25 June 2020. Both grants vest in three equal tranches—one-third on grant, with the remaining balance vesting equally on the first and second anniversaries of the grant date. During 2024 the Directors and key management personnel have not been granted any bonus shares (2023: nil). Conflict of interest In order to avoid situations of conflict of interests of the parent company, during the year Directors who have held positions as company director have complied with the obli gations provided for in article 228 of the Revised Text of the Spanish Capital Enterprises Act. Furthermore, Directors or related to them have abstained from incurring in the cases of conflict of interest provided for in article 229 the Spanish Capital Enterprises Act, except in cases where the corre sponding authorization has been obtained. 31.3 Transactions with shareholders and related parties (Euro 000’s) 2024 2023 Trafigura Pte Ltd – Revenue from contracts (a) 73,433 78,723 Gains/(Losses) relating provisional pricing within sales (3,757) 1,308 69,676 80,031 Impala Terminals Huelva S.L.U. - Port Handling and Warehousing services (b) (2,201) (2,431) Related parties - total amounts from contracts 67,475 77,600 (a) Offtake agreement and spot sales to Trafigura Offtake agreement In May 2015, the Company agreed terms with key stake holders in a capitalisation exercise to finance the re-start of Proyecto Riotinto (the “2015 Capitalisation”). As part of the 2015 Capitalisation, the Company entered into offtake agreements with some of its large shareholders, one of which was Trafigura Pte Ltd (“Trafigura”), under which the total forecast concentrate production from Proyecto Riotinto was committed (“2015 Offtake Agreements”). During 2024, the Company completed 10 sales transactions under the terms of the Offtake Agreements valued at €71.6 million (2023: 6 sales valued at €36.9 million). Spot Sales Agreements Due to various expansions implemented at Proyecto Riotinto in recent years, volumes of concentrate have been periodically available for sale outside of the Company’s various offtake agreements. In 2024, the Company did not complete any spot sales with Trafigura; however, €1.0 million in sales was recognised through amendments to its existing offtake agreement following QP closures during the year. (2023: 2 spot sales valued at €43.1 million). Sales transactions with related parties are at arm’s length basis in a similar manner to transactions with third parties. (b) Port Handling and Warehousing services In September 2015, Atalaya entered into a services agree ment with Impala Terminals Huelva S.L.U. (“Impala Terminals”) for the handling, storage and shipping of copper concen trates produced from Proyecto Riotinto. The agreement covered total export concentrate volumes produced from Proyecto Riotinto for three years for volumes not committed to Trafigura under its offtake agreement and for the life of mine for the volumes committed to Trafigura under its offtake agreement. In September 2018, the Company entered into an amend ment to the 2015 Port Handling Agreement, which included improved financial terms and a five year extension. As at year end 31 December 2024 and 2023, Impala Termi nals was part of the Trafigura Group, under joint control. During 2023, management carried out a reassessment of its relationship with Impala Terminals in accordance with IAS 24 requirements and concluded that Impala Terminals is a related party of the Group. These transactions with related parties are at arm’s length basis in a similar manner to trans actions with third parties. In December 2023, the Company entered into an exten sion of the service agreement with Impala Terminals for the handling, storage and shipping of copper concentrates produced from Proyecto Riotinto on similar terms than the 2015 agreement and the extension in 2018. This extension has a term of approximately five years and covers the concentrate volumes produced for export from Proyecto Riotinto that are not already committed to the Trafigura Group under its offtake agreement. 03. Financial Statements Annual Report 2024 168 Atalaya Mining Copper, S.A. 31.4 Year-end balances with shareholders and their joint ventures (Euro 000’s) 31 Dec 2024 31 Dec 2023 Receivable from shareholder (Note 20) Trafigura Pte. Ltd »» Debtor balance- subject to provisional pricing 1,042 5,054 1,042 5,054 Payable from joint venture of shareholder (Note 26) Impala Terminals Huelva S.L.U. - Payable balance (109) (179) (109) (179) The above debtor balance arising from the agreements between Trafigura and Impala (Note 31.3), bear no interest and is repayable on demand. 33. 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. (Euro 000’s) 2024 2023* Fees payable for the audit of the Group and individual accounts 401 452 Other non-audit services** 70 - 471 452 32. Auditor’s remuneration The fees for the years to 31 December 2024 and 31 December 2023, for audit and non-audit services provided by the auditor of the Group’s consolidated financial statements and of certain individual financial statements of the consolidated compa- nies, PricewaterhouseCoopers Auditores, S.L., and by companies belonging to PwC’s network, were as follows: * For the year 2023, the Group’s auditor was Ernst & Young Cyprus Limited, along with companies within the EY network. ** Included Non-Financial Information Statement and Transfer Pricing Report in 2024. These reports were contracted and performed before PwC’s appointment. For the year 2024, the audit services related to the audit of the British subsidiaries were performed by Rayner Essex LLP, amounting to GBP 35 thousand. 34. 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. 03. Financial Statements Annual Report 2024 169 Atalaya Mining Copper, S.A. 35. Significant events 36. Events after the reporting period Ongoing geopolitical events are impacting the global economy, but the full implications cannot yet be predicted. Key impacts include higher and more volatile input costs and disruptions to freight and logistics. The financial conse quences of these events cannot be estimated with any reasonable degree of certainty at this stage. »» On 9 February 2024, the Company issued 20,000 ordinary shares of 7.5p in the Company pursuant to an exercise of share options by a former employee. »» On 25 April 2024, BlackRock, Inc., shareholder of the Company, decreased its voting rights from 4.07% to 4.05%, and on 26 April decreased its voting rights to 3.97%. »» Following the publication the prospectus in relation to the admission of its ordinary shares (“Ordinary Shares”) to the premium listing segment of the Official List of the Financial Conduct Authority (“FCA”), which took place on 24 April 2024, Atalaya was admitted to the premium listing segment and to trading on London Stock Exchange plc’s main market for listed securities (together, “Admission”) on 29 April and cancelled from trading on AIM. »» On 7 May 2024, the Company issued 66,500 ordinary shares of 7.5p in the Company pursuant to an exercise of share options by non-PDMr. employees. »» On 22 May 2024, the Company issued 600,000 ordinary shares of 7.5p in the Company pursuant to an exercise of share options by a PDMr. employee. »» On 12 June 2024, the Company announced that in accordance with the Company’s Long Term Incen tive Plan 2020 which was approved by shareholders at the Annual General Meeting on 25 June 2020, it has granted 1,305,000 share options to PDMr. and other management. »» On 27 June 2024, the Company issued 193,334 ordinary shares of 7.5p in the Company pursuant to an exercise of share options by an employee. »» On 17 July 2024, Cobas Asset Management SGIIC, S.A., shareholder of the Company, increased its voting rights from 10.04% to 15.04%. »» On 10 January 2025, Atalaya Mining Copper, S.A. (formerly Atalaya Mining Plc) completed its re-domiciliation to Spain. Trading under the new name became effective at 8:00 AM, and the nominal value of shares changed from 7.5p to €0.09. »» On 15 January 2025, the Board announced the appoint ment of María del Coriseo (“Coriseo”) González-Izquierdo Revilla as an independent non-executive director, effec tive 14 January 2025. »» Following the approval of Resolution 10 by the Compa ny’s shareholders at its 2024 Annual General Meeting, which took place on 27 June 2024, the 2023 Final Dividend of US$0.04 per ordinary share was paid on 9 August 2024. »» On 13 August 2024, the Company’s Board of Directors elected to declare a 2024 Interim Dividend of US$0.04 per ordinary share, which is equivalent to approximately 3.1 pence per share. Dividend was paid on 19 September 2024. »» On 15 October 2024, the Company announced that Neil Gregson, Chairman of the Company, purchased 5,000 ordinary shares in Atalaya at an average price of 343.0 pence per share. »» On 29 October 2024, the Company announced that Carole Whittall was succeeding Hussein Barma as Chair of the Audit Committee of its Board of Directors with immediate effect. »» On 19 November 2024, the Company entered into two binding agreements with Mineral Prospektering i Sverige AB (“MPS”) to earn a 75% interest in the Skellefte Belt Project and Rockliden Project in Sweden, both located in highly prospective VMS districts. Atalaya committed US$3 million over 24 months, with the option to invest up to a further US$9 million in each project. Initial exploration identified key targets, with drilling planned for the winter season. »» On 2 December 2024, Atalaya was notified that Jesús Fernández, a PDMR, purchased 13,912 ordinary shares at an average price of 350.0 pence per share. Following this purchase, Mr. Fernández held a total of 106,412 ordinary shares, representing 0.076% of the Company’s issued share capital. »» On 22 December 2024, the Company granted 150,000 share options under its Long Term Incentive Plan 2020 (LTIP2020), approved by shareholders on 25 June 2020. The options expire on 21 December 2029, have an exer cise price of 333.50 pence per share, and vest in three equal tranches—one-third on grant, with the remainder vesting equally on the first and second anniversaries of the grant date. »» On 31 January 2025, Atalaya received notification that Neil Gregson, Non-Executive Chair, purchased 2,800 ordi nary shares of €0.09 nominal value at an average price of 347.28 pence per share. 04. Additional information Annual Report 2024 170 Atalaya Mining Copper, S.A. 04 Additional information 04. Additional information Glossary of Terms. .....................................................................171 Shareholder Enquiries............................................................... 174 04. Additional information Annual Report 2024 171 Atalaya Mining Copper, S.A. 04. Additional information Annual Report 2024 Glossary of Terms The following definitions and terms are used throughout this Annual Report. lb Pound Oz Troy ounce ‘000 m³ Thousand cubic metres t Tonne DMT Dry Metric Tonne ‘000 tonnes Thousand metric tonnes 1 Kilogramme/ (kg) 2.2046 pounds 1000 Kilogrammes/ (´000 kg) 2,204.6 pounds 1 Kilometre (km) 0.6214 miles 1 troy ounce 31.1 grams Ha Hectare ft Foot US$ / USD or $ US Dollars $000 Thousand US dollars $m Million US Dollars £ Sterling Pound £000 Thousand Sterling Pounds £m Million Sterling Pounds € / EUR Euro €000 / €k Thousand Euros €m Million Euros €nil Zero Euros FY2024 Twelve month period ended 31 December 2024 FY2023 Twelve month period ended 31 December 2023 Cu Copper Ag Silver Au Gold Fe Iron Currency abbreviations Definitions and conversion table Business, Finance and Accounting Definitions and conversion table Chemical Symbols AAU Autorización Ambiental Unificada (Unified Environmental Declaration) Atalaya or the Company Atalaya Mining Copper, S.A. Atalaya Group or Group Atalaya Mining Copper, S.A. and its subsidiaries AC Audit Committee AGM Annual General Meeting AIM Alternative Investment Market of the London Stock Exchange AISC All-in Sustaining Cost AMV Atalaya Masa Valverde, S.L. AR Annual Report ARM Atalaya Riotinto Minera, S.L.U. AMP Atalaya Minasderiotinto Project (UK) Limited Articles The articles of association of Atalaya Mining Plc. ATYM Atalaya Mining Plc Average head grade Average ore grade fed into the mill, expressed in % of weight BoD or Board of Directors The Board of Directors of the Company CAPEX Capital Expenditure Cash Cost The cost to produce one pound of copper CEO Chief Executive Officer C. Eng Chartered Engineer CFO Chief Financial Officer 04. Additional information Annual Report 2024 172 Atalaya Mining Copper, S.A. COO Chief Operational Officer COF Cost of Freight CIF Cost Insurance and Freight CIT Corporate Income Tax CIP Carriage and Insurance paid to CGU Cash Generating Unit CGNCC Corporate Governance, Numeration and Compensation Committee Code of Conduct Atalaya’s Code of Business Conduct and Ethics Cont. Continued CSR Cobre San Rafael S.L. Directors The Directors of Atalaya for the reporting period EBITDA Earnings Before Interest Tax Depreciation and Amortisation ECL Expected Credit Loss EeA Ecologistas en Accion EGC Explotaciones Gallegas del Cobre S.L. EGM Extraordinary General Meeting EIR Effective Interest Rate Method E-LIX E-LIX System EMED TARTESSUS Eastern Mediterranean Exploration & Development TARTESSUS S.L. Etc. Et cetera EU European Union FCA Financial Conduct Authority FIFO First In First Out Financial statements Consolidated and company financial statements of Atalaya Mining Plc. FOB Free on Board FV Fair Value FVOCI Fair Value Through Other Comprehensive Income FVPL Fair Value Through Profit or Loss FY Fiscal year Phase I The first phase of an industrial-scale plant that utilises the E-LIX System Ph.D. Doctor of Philosophy PRC Physical Risk Committee PFS Pre-Feasibility Study Plc. Public limited company POM Proyecto Ossa Morena PP&E Plant, property and equipment P&L Profit and Loss P&P reserves Proven and Probable reserves Q1, Q2, Q3, Q4 Three month periods ending 31st March, 30th June, 30th September and 31st December QCA Quoted Companies Alliance QP Quotation Period RC Remuneration Committee RNN Rio Narcea Nickel, S.L. SIC Standard Interpretations Committee which was endorsed by the IAS Shareholders Holders of Ordinary Shares SL Sociedad Limitada (private limited company) SLU Sociedad Limitada Unipersonal (limited partnership) SC Sustainability Committee TSX Toronto Stock Exchange UK Corporate Governance Code the 2018 UK Corporate Governance Code published by the Financial Reporting Council, as amended from time to time United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland United States or US the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia UOP Unit of Production VAT Value Added Tax WC Working Capital XGC Yanggu Xiangguang Copper Co. Ltd GAAP Generally Accepted Accounting Policies Group Atalaya Mining plc and its subsidiaries H1, H2 Six month periods ending 30th June and 31st December IAS International Accounting Standards ie. Id est (explanatory information) IFRS International Financial Reporting Standards Impala Terminals Impala Terminals Huelva S.L.U. IPO Initial Public Offering JdA Junta de Andalucía KPI´s Key Performance Indicators LDC Louis Dreyfus Company LIBOR The British Bankers’ Association Interest Settlement Rate for the relevant currency LITFR Lost Injury Time Frequency Rate Ltd. Limited LLC Limited Liability Company LP Limited partnership LOM Life of mine London Stock Exchange / LSE London Stock Exchange plc MBA Master’s in Business Administration n.a. Not available NED´s Non-Executive Directors NGC Nomination and Governance Committee NPV Net Present Value Nr Number N/A Non Applicable OCI Other Comprehensive Income Ordinary Shares Ordinary Shares of 10 pence each in the capital of the Company PDMR Persons Discharging Managerial Responsibilities PEA Preliminary Economic Assessment 04. Additional information Annual Report 2024 173 Atalaya Mining Copper, S.A. Average head grade Average ore grade fed into the mill, expressed in % of weight Concentrate A fine powdery product of the milling process containing a high percentage of valuable metal Contained copper Represents total copper in a mineral reserve before reduction to account for tonnes not able to be recovered by the applicable metallurgical process Grade The amount of metal in each tonne of ore, expressed as a percentage of valuable metal Mtpa Million tonnes per annum NI 43-101 National Instrument 43-101, standard of disclosure for mineral projects according to Canadian guidelines Open pit A mine where the minerals are mined entirely from the surface. Also referred to as open-cut or open-cast mine Ore body A sufficiently large amount of ore that can be mined economically P&P Reserves Proven and Probable reserves Stripping Removal of overburden or waste rock overlying an ore body in preparation for mining by open pit methods Tailings Materials left over after the process of separating the valuable fraction from the uneconomic fraction of an ore TC/RC Treatment Charge and Refinement Charge VTEM Versatile Time Electomagnetic Mapping 3D Three Dimensional Mining terms 04. Additional information Annual Report 2024 174 Atalaya Mining Copper, S.A. Shareholder Enquiries 04. Additional information Annual Report 2024 Registered office: Atalaya Mining Copper, S.A. Paseo de las Delicias, 1, 3 41001, Sevilla (Spain) Corporate brokers Canaccord Genuity Limited 88 Wood Street London EC2V 7QR +44 (0)20 7523 4500 BMO Capital Markets 100 Liverpool Street London, EC2M 2RH +44 (0) 20 7236 1010 Peel Hunt LLP 100 Liverpool Street London, EC2M 2AT +44 (0)20 7418 8900 Investor Relations Michael Rechsteiner Hamilton House 1 Temple Avenue London EC4Y 0HA +34 959 59 28 50 Public Relations Elisabeth Cowell SEC Newgate UK Limited 14 Greville Street London EC1N 8SB +44 (0)20 3757 6882 Registrars Sociedad de Gestión de los Sistema de Registro, Compensación y Liquidación de Valores, S.A.U. (Iberclear) Plaza de la Lealtad, 1 28014 Madrid Spain Depositary / transfer agent Europe: Euroclear SA/NV 1 Boulevard du Roi Albert II 1210 Brussels Belgium United Kingdom Euroclear UK & International Ltd. 33 Cannon Street London EC4M 5SB Group Auditor: PricewaterhouseCoopers Auditores, S.L. Paseo de la Castellana, nº259 28046 Madrid Spain Board of Directors: Neil Gregson................................... Independent Non-executive Chair Kate Harcourt. ................................ Senior Independent Non-executive Director Alberto Lavandeira. ........................ Managing Director and CEO Hussein Barma................................ Independent Non-executive Director Jesús Fernández.............................. Non-executive Director Coriseo Gonzalez-Izquierdo. ......... Independent Non-executive Director Stephen Scott. ............................... Independent Non-executive Director Carole Whittall................................ Independent Non-executive Director Frances Robinson ........................... Non-director Company secretary 2024 Annual Report For the year ended 31 December 2024 Cyprus office 121 Prodromou Street, 7th Floor Office 705, 2064 Strovolos - Nicosia, Cyprus Spain office La Dehesa s/n Minas de Riotinto, 21660 - Huelva, Spain Registered office Atalaya Mining Copper, S.A. Paseo de las Delicias, 1, 3 41001, Sevilla (Spain) atalayamining.com