AGM statement13 Jul 2017 10:10
AGM Statement
At Atalaya Mining's AGM to be held at 12.00pm (CEST) today at the Rio Tinto Mine, La Dehesa s/n, Minas de Riotinto, 21660 Huelva, Spain, Roger Davey, non-executive Chairman, will make the following statement:
"2016 was a transformational year for your Company.
After declaring commercial production at the Riotinto Copper Project ("Proyecto Riotinto") in February 2016, management progressively increased processing capacity, reaching the nameplate processing plant throughput rate of 9.5 Mtpa by December 2016.
Total capital costs were kept under control and came in below the revised budget of US$164 million to achieve this throughput. This confirmed Proyecto Riotinto as one of the lowest capital intensity projects in the world, at this time.
In September 2016, the Company filed an updated Mineral Reserves and Resources estimate for Proyecto Riotinto, which indicated a 12% increase in contained reserves and extended the life of mine to 16.5 years.
To date, copper grades, recoveries and operating cash costs are well within the forecast values and the estimated copper production guidance for 2017 remains between 34,000 and 40,000 tonnes. Mining operations continue to run according to plan, along with ongoing rehabilitation works.
Near-mine exploration drilling is underway. The programme is designed to confirm the lateral extension of Filon Sur as well as the northern extension of the Atalaya pit. A total of 7,200 metres have already been drilled at Filon Sur and at the Atalaya pit. An in-fill drilling campaign of 4,400 metres at Cerro Colorado is also under way targeting inferred resources with the objective of increasing confidence levels and potential reclassification to the indicated category.
The trial of the Astor case took place at the High Court of Justice in London during January 2017, with judgement handed down in March 2017. The High Court found that the Group was not in breach of any of its obligations and the deferred consideration under the master agreement entered into between the Company, Astor and others (the "Master Agreement") did not start to become payable when permit approval was granted for Proyecto Riotinto. Accordingly, the first instalment of the deferred consideration had not fallen due.
Notwithstanding this, the Court confirmed that the provisions of the Master Agreement remain in place. As a consequence of this, the Judgment requires that, in accordance with the Master Agreement, Atalaya Riotinto Minera, S.L.U. must apply any excess cash (after payment of operating expenses, sustaining capital expenditure, any senior debt service requirements and up to US$10 million for non-Proyecto Riotinto related expenses) to pay approximately €43.9 million of the deferred consideration due to Astor under the Master Agreement and the amount of €9.1 million payable under the loan assignment. Both parties have applied for permission to appeal to the Court of Appeal
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