Atalaya Mining Regulatory News (ATYM)

16 November 2017

Atalaya Mining Plc.

("Atalaya" and/or the "Group")

Three and nine months ended 30 September 2017 Interim Financial Statements

Atalaya Mining Plc (AIM: ATYM; TSX: AYM) with its subsidiaries is pleased to announce its unaudited quarterly results for the three and nine months ended 30 September 2017, together with the unaudited, condensed, interim consolidated financial statements.

Operational Highlights

Proyecto Riotinto

· Copper production during Q3 2017 was a record of 10,679 tonnes, 18.0% higher than the previous quarter´s production of 9,058 tonnes. Copper production during the nine months ended 30 September 2017 ("YTD17") was 28,542 tonnes compared with 16,728 tonnes during the nine months ended 30 September 2016 ("YTD16").

· Ore processed during the quarter was 2,173,826 tonnes in line with prior quarter when ore processed was 2,154,907 tonnes. During YTD17 ore processed was 6,525,032 tonnes compared with 4,476,617 tonnes during YTD16.

· Copper recovery during the quarter was 85.95% slightly above the previous quarter of 85.16%. Copper recovery for YTD17 averaged 85.22% representing an improvement over 82.87% during YTD16.

· Guidance for copper production has been adjusted accordingly and is now estimated to be within the range of 36,000 to 39,000 tonnes for 2017.

Expansion of Proyecto Riotinto

· During the quarter, the study to demonstrate the feasibility of increasing mining and processing capacity beyond the current 9.5 Mtpa, to a maximum of 15.0 Mtpa at Proyecto Riotinto was finalised.

· The study has concluded the expansion is technically and financially robust. The Board is encouraged by these results and will provide further details on the expansion over the coming weeks.

· Estimated copper production of the expanded plant would reach approximately 50,000 - 55,000 tonnes per year.

Proyecto Touro

· Permitting of Proyecto Touro is progressing according to schedule with the public hearing finalised at the beginning of October. The Company anticipates a period of consultation with different regulatory bodies and stakeholders which should take place over the following months.

· The technical report is progressing ahead of schedule with all efforts now concentrated on getting the report completed and ready for release during Q4 2017. The technical report is confirmed to be at pre-feasibility level of detail and in compliance with NI 43-101 guidelines.

· An exploration campaign was initiated during the quarter over the newly optioned exploration concessions around Proyecto Touro. The campaign includes an airborne VTEM geophysical survey, a detailed assessment of structural geology and a regional geochemical campaign.

Financial Highlights

· Revenues of €35.7 million for Q3 2017 compared with €27.2 million in Q3 2016. Similarly, revenues for the nine months 2017 were €114.8 million compared with €49.9 million for the same period of 2016.

· Cash costs during Q3 2017 were $2.14/lb of payable copper, an increase from cash costs of $2.07/lb of payable copper in Q2 2017. The increase was due to higher than budgeted penalties and freight costs. All-in sustaining costs ("AISC") during Q3 2017 amounted to $2.33/lb of payable copper, an increase from $2.30/lb of payable copper during Q2 2017. Cash costs for the nine months 2017 were $2.06/lb payable copper versus $2.14/lb payable copper during the nine months 2016. AISC amounted to $2.29/lb payable copper during the nine months 2017 against $2.42/lb payable copper for the nine months 2016.

Financial Highlights (continued)

· Management expects cash costs for the year to be maintained in the range of $1.95/lb to $2.10/lb. The increase from the original estimate is mainly due to different capitalisation criteria applicable to mining stripping costs.

· Positive Earnings Before Interest, Taxation, Depreciation and Amortisation ("EBITDA") of €9.3 million in Q3 2017 compared with €1.9 million in Q3 2016. The increase in EBITDA was a result of the increase in the volume of copper concentrate sold and higher realised copper prices. On a cumulative basis EBITDA during the nine months 2017 was €33.8 million compared with a negative EBITDA of €1.7 million during the nine months in 2016.

· Q3 2017 profit after tax amounted to €2.5 million (or 2.1 cents per share on a fully diluted basis) compared with a loss for Q3 2016 of €1.5 million (or negative 1.3 cents per share on a fully diluted basis). Profits after tax for the nine months 2017 were €13.4 million versus a loss of €8.0 million for the nine months 2016.

· Inventories of concentrate at 30 September 2017 amounted to €7.7 million.

· Working capital deficit has consistently improved over the last three quarters as a result of cash generated from operations. At the end of Q3 2017 working capital deficit was €13.3 million, down from €14.1 million at the end of Q2 2017, €20.0 million at the end of Q1 2017 and €25.4 million at 31 December 2016. Unrestricted cash balances as at 30 September 2017 amounted to €9.1 million.

· Cash flow from operating activities before changes in working capital was €8.0 million for Q3 2017 compared with a cash flow of €2.0 million during Q3 2016. Cumulative for the nine months 2017, cash flow from operating activities before changes in working capital was €32.0 compared with a negative cash flow of €1.8 million for the nine months of 2016.

· Net cash flow from operating activities after changes in working capital was €12.9 million for Q3 2017 compared with a negative cash flow of €3.4 million during Q3 2016. Net cash flow from operating activities after changes in working capital was €22.9 million for the nine months 2017 compared with €5.4 million for the nine months 2016.

Corporate Highlights

· On 15 September 2017, the US$14 million copper concentrate prepayment agreement with Transamine Trading, S.A. was fully settled ahead of schedule. The Company will decide whether to extend the contract with the same terms before January 2018, as permitted under the original agreement.

· On 25 April 2017, Atalaya and Astor applied for permission to appeal to the Court of Appeal. On 11 August 2017, the Court of Appeal granted permission to both parties to appeal (although it rejected three of Astor's seven grounds). The Appeal is anticipated to take place in May 2018.

Alberto Lavandeira, CEO commented:

"These financial results reflect another good quarter of operations at our Riotinto mine, which gives us confidence that our annual production will be within the guidance range. We continue to advance Proyecto Riotinto to its next phase of copper production, with the expansion study now concluded with very positive results. This expansion has the potential to increase production at Riotinto to 50,000 to 55,000 tonnes per year. Proyecto Touro progresses as expected. We anticipate updating the market in Q4 2017 with the results of the technical study, ahead of schedule."

About Atalaya Mining Plc

Atalaya is an AIM and TSX listed operational and development group which produces copper concentrates and silver by-product at its fully owned Proyecto Riotinto site in southwest Spain. In addition, the Group has a phased, earn-in agreement for up to 80% ownership of Proyecto Touro, a brownfield copper project in the northwest of Spain which is currently in the permitting stage. For further information, visit www.atalayamining.com

This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

Contacts:

ATALAYA MINING PLC

MANAGEMENT'S REVIEW AND

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

30 September 2017

(UNAUDITED)

Notice to Reader

The accompanying unaudited, condensed, interim consolidated financial statements of Atalaya Mining Plc have been prepared by and are the responsibility of Atalaya Mining Plc's management. The unaudited, condensed, interim consolidated financial statements have not been reviewed by Atalaya's auditors.

Introduction

This report provides an overview and analysis of the financial results of operations of Atalaya Mining Plc and its subsidiaries ("Atalaya" and/or "Group"), to enable the reader to assess material changes in the financial position between 31 December 2016 and 30 September 2017 and results of operations for the nine months ended 30 September 2017 and 2016.

This report has been prepared as of 16 November 2017. The analysis, hereby included, is intended to supplement and complement the unaudited, condensed, interim consolidated financial statements and notes thereto ("Financial Statements") as at and for the nine months ended 30 September 2017. The reader should review the Financial Statements in conjunction with the review of this report and with the audited, consolidated financial statements for the year ended 31 December 2016, and the unaudited, condensed interim consolidated financial statements for the nine months ended 30 September 2016. These documents can be found on Atalaya's website at www.atalayamining.com.

Atalaya prepares its Financial Statements in accordance with International Financial Reporting Standards ("IFRSs"). The currency referred to in this document is the Euro, unless otherwise specified.

Forward-looking statements

This report may include certain "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterised by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based include that all required third party regulatory and governmental approvals 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 prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in this report and other documents filed with the applicable securities regulatory authorities. Although Atalaya has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Atalaya undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

1. Description of the business

Atalaya is a Cyprus based copper producer with mining interests in Spain. The Company is listed on the Alternative Investment Market of the London Stock Exchange ("AIM") and on the Toronto Stock Exchange ("TSX").

Proyecto Riotinto, fully owned by the Company's subsidiary Atalaya Riotinto Minera, S.L.U., is located in Huelva, Spain. The Group operates the Cerro Colorado open-pit mine and its associated processing plant of 9.5Mtpa where copper in concentrate and silver by-product are produced.

The Group has an initial 10% stake in Cobre San Rafael, S.L., the owner of Proyecto Touro, as part of an earn-in agreement which will enable the Group to acquire up to 80% of the copper project. Proyecto Touro is located in Galicia, north-west Spain.

2. Overview of operational results

Proyecto Riotinto

The following table presents a summarised statement of operations of Proyecto Riotinto for the three and nine months ended 30 September 2017. Note that commercial production was declared in February 2016.

Note: The numbers in the above table may differ slightly between them due to rounding.

* Commercial production started in February 2016.

Three months operational review

Production of copper contained in concentrate in Q3 2017 was 10,679 tonnes, reaching a new record and significantly above 9,058 tonnes in Q2 2017 and 8,752 tonnes in Q3 2016 when the processing plant was still ramping up throughput. In terms of payable copper in concentrate, Q3 2017 production was 10,206 tonnes compared with 8,445 tonnes of payable copper in Q3 2016, representing also a record in production of payable copper. Payable copper during Q3 2017 also improved with respect to Q2 2017 production of 8,660 tonnes. Guidance for copper production has been adjusted accordingly and is now estimated to be within the range of 36,000 to 39,000 tonnes for 2017.

On a combined basis, ore, waste and marginal ore amounted to 2.7 Mm3 in Q3 2017 compared with 2.8Mm3 during Q2 2017. Mining operations are running at a consistent rate quarter-on-quarter, as a result of improved operational efficiencies and the availability of additional mining fleet. As part of the mining fleet replacement programme three new excavators and eight new trucks have been delivered, assembled and commissioned during the quarter.

Ore processed in Q3 2017 was 2,173,826 tonnes, higher than the 2,033,889 tonnes in Q3 2016 and slightly above the 2,154,907 tonnes in Q2 2017. The processing plant was down for maintenance during the last five days of the quarter while relining of the primary mill and other maintenance activities were completed.

Ore grade averaged 0.58% Cu in Q3 2017 compared with 0.52% Cu in Q3 2016. Copper recovery during the quarter was 85.95% slightly above the previous quarter of 85.16%.

At the end of the quarter, the Company´s continuous improvement programme reported completion and commissioning of a new 300 m3 primary rougher flotation cell. Installation of plastic lining in one of the paddocks at the tailings storage facilities is also nearing completion and new initiatives designed to improve process and fresh water supply are currently under evaluation.

During Q3 2017, the Group sold 40,989 tonnes of concentrates, compared with 22,701 tonnes in Q3 2016. Concentrate production in Q3 2017 amounted to 47,628 tonnes, compared with 42,993 tonnes for the same period in 2016. On-site concentrate inventories at the end of the quarter were 8,615 tonnes. All concentrate in stock at the beginning of the quarter and produced during the quarter was delivered to the port at Huelva.

Nine months operational review

Production of copper contained in concentrate during YTD17 was 28,542 tonnes, compared with 17,241 tonnes in the same period of 2016. For comparative purposes commercial production was only declared in February 2016. Payable copper in concentrates was 27,269 tonnes compared with 16,728 tonnes of payable copper in YTD16.

Ore mined in YTD17 was 7,685,419 tonnes compared with 4,935,647 tonnes during YTD16. Ore processed was 6,525,032 tonnes versus 4,476,617 tonnes in YTD16.

2. Overview of operational results (continued)

Ore grade during YTD17 was 0.52% Cu compared with 0.48% Cu in YTD16. Copper recovery during YTD17 was 85.22% versus 82.87% in YTD16. Concentrate production amounted to 127,281 tonnes significantly above YTD16 production of 82,891 tonnes.

Dust mitigation measures have been successful over the summer months with indicators significantly reduced and within legal requirements. Installation of a dome covering the coarse ore stockpile is ongoing with civil foundations reaching advanced stages. Dewatering of the Cerro Colorado pit is now complete and will now be limited to pumping runoff water as required. Relocation of pumping stations from the Cerro Colorado pit to the Atalaya pit was completed with dewatering activities now underway.

Study to increase copper production

During the quarter, the study to demonstrate the feasibility of increasing mining and processing capacity beyond the current 9.5 Mtpa, to a maximum of 15.0 Mtpa at Proyecto Riotinto was finalised.

The study has concluded the expansion is technically and financially robust. The Board is encouraged by these results and will provide further details on the expansion over the coming weeks.

Estimated copper production of the expanded plant would reach approximately 50,000 - 55,000 tonnes per year.

Exploration and Geology

Near-mine exploration drilling has turned its focus on to the north-west extension of the Cerro Colorado pit now that the east-west extension of Filon Sur has been completed. The exploration block model has been updated with results which will be part of the resources and reserves update that form part of the studies related to the expansion to 15 Mtpa.

Greenfield exploration has initiated during the quarter including an airborne VTEM geophysical survey to help further understand deep geological structures in the mining and exploration concessions of the Company around the Riotinto mine.

Proyecto Touro

Permitting of Proyecto Touro is progressing according to schedule with the public hearing finalised at the beginning of October. The Company anticipates a period of consultation with different regulatory bodies and stakeholders which should take place over the following months.

The technical report is progressing ahead of schedule with all efforts now concentrated on getting the report completed and ready for release during Q4 2017. The technical report is confirmed to be at a pre-feasibility level of detail and in compliance with NI 43-101 guidelines.

The Group signed an option agreement to acquire exploration concessions that cover 122.7 km2 immediately surrounding Proyecto Touro, where mineralised copper occurrences are documented. An ambitious regional exploration programme is underway.

An exploration campaign was initiated during the quarter over the newly optioned exploration concessions around Proyecto Touro. The campaign includes an airborne VTEM geophysical survey, detailed assessment of structural geology and a regional geochemical campaign.

Corporate Social Responsibility ("CSR")

The archaeological program initiated in the previous quarter as part of the Company's Corporate Social Responsibility activities is expected to reach an important milestone at the end of the year when the first archaeological level will be fully documented.

3. Outlook

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 introduction note of this report.

Operational guidance

Proyecto Riotinto operational guidance for 2017 is as follows:

Copper head grade for 2017 was budgeted to average between 0.49% and 0.51% Cu, with a recovery rate of approximately 82% to 84%. Cash operating cost for 2017 is expected to be in the range of $1.95/lb - $2.10/lb.

4. Overview of the financial results

The following table presents summarised consolidated income statements for the three and nine months ended 30 September 2017, with comparatives for the three and nine months ended 30 September 2016.

Three months financial review

Revenues for the three-month period ended 30 September 2017 amounted to €35.7 million (Q3 2016: €27.2 million). Higher revenues, compared with the same quarter in the previous year, were driven by higher volumes of concentrate sold and an increase in copper prices.

Realised prices of $2.66/lb copper during Q3 2017 compared with $2.18/lb copper in Q3 2016. Concentrates were sold under offtake agreements in place. The Group did not enter into any hedging agreements in Q3 2017.

Operating costs for the three-month period ended 30 September 2017 amounted to €24.3 million, compared with €20.7 million in Q3 2016. The increase was mainly due to higher mining and processing variable costs directly attributable to increase in copper production.

Cash costs of $2.14/lb payable copper during Q3 2017 compared with $1.97/lb payable copper in the same period last year. Cash costs were impacted by penalties and higher freights in the period compared with Q2 2017. Capitalised stripping costs during Q3 2017 amounted to €1.5 million compared with €1.0 million in Q2 2017. All-in sustaining costs in the reporting quarter were $2.33/lb payable copper compared with $2.11/lb payable copper in Q3 2016 and to $2.30/lb payable copper in Q2 2017. The increase in AISC compared with Q2 2017 mainly related to higher cash costs.

Sustaining capex for Q3 2017 amounted to €1.4 million compared with €nil in Q3 2016. Sustaining capex accounted for development programmes at the tailings storage facilities and optimisation of the flotation circuit.

Corporate expenses amounting to €1.9 million (Q3 2016: €4.5 million) include non-operating costs of the Cyprus office, corporate legal and consultancy costs, on-going listing costs, officers and directors' emoluments, and salaries and related costs of the corporate office.

Exploration costs at Proyecto Riotinto for the three-month period ended 30 September 2017 amounted to €0.2 million compared with €0.2 million in Q3 2016. All exploration costs at Proyecto Touro are capitalised.

EBITDA for the three months ended 30 September 2017 amounted to €9.3 million as compared to Q3 2016 of €1.9 million.

The main item below the EBITDA line is depreciation and amortisation of €3.8 million (Q3 2016: €2.5 million). Net financing costs for Q3 2017 amounted to €0.7 million, including accretion cost of the discounted liability for Astor.

4. Overview of the financial results (continued)

Nine months financial review

Revenues for the nine-month period ended 30 September 2017 amounted to €114.8 million (YTD16: €49.9 million). Commercial production at Proyecto Riotinto was declared in February 2016.

Copper concentrate production during YTD17 was 127,281 tonnes (YTD16: 82,891 tonnes), 118,666 tonnes of copper concentrates were sold in the same period (YTD16: 72,276 tonnes). Inventories of concentrates as at the reporting date were 8,615 tonnes (YTD16: 15,049 tonnes), with no inventories held as at 31 December 2016.

The realised price for the nine months period in 2017 was $2.58/lb copper compared with $2.16/lb copper in the same period of 2016. Concentrates were sold under offtake agreements in place. The Group did not enter into any hedging agreements in 2017.

Operating costs for the nine-month period ended 30 September 2017 amounted to €76.9 million, compared with €41.1 million in the nine months period in 2016. The increase was mainly due to higher mining and processing variable costs directly attributable to an increase in copper production and the impact of the stripping cost which is now mainly expensed rather than capitalised.

Cash costs of $2.06/lb payable copper during the nine months period in 2017 compares with $2.14/lb payable copper in the same period last year. All-in sustaining costs for YTD17 were $2.29/lb payable copper compared to $2.42/lb payable copper in nine-month period in 2016.

Sustaining capex for the nine-month period included in capital expenditure amounted to €4.2 million, compared with €nil in the same period in the previous year. Sustaining capex accounted for improvements in the water supply systems, modifications to the processing flowsheet, upgrades at the main incoming substation and development programmes at the tailings storage facilities, flotation circuit and environmental measures.

Corporate costs for the first nine months of 2017 were €3.5 million, compared with €9.7 million in the nine months period of 2016. Corporate costs mainly include overhead expenses as described before in this report.

Exploration costs related to Proyecto Riotinto for the nine-month period ended 30 September 2017 amounted to €0.7 million, compared with €0.9 million in the nine-month period in 2016. All exploration costs relating to Proyecto Touro during 2017 have been capitalized.

EBITDA for the nine months ended 30 September 2017 amounted to €33.8 million, compared with a negative EBITDA in the same period of last year of €1.7 million.

Depreciation and amortisation amounted to €11.9 million for the nine-month period ended 30 September 2017 (YTD16: €5.0 million). The increase in depreciation was mainly driven by an increase in production as all mining assets are depreciated per unit of production.

Net finance costs for YTD17 amounting to €2.4 million (YTD16: €0.1 million) mainly related to the unwinding of the net present value of the deferred consideration for Astor. In addition, the Group has also incurred interest costs for the Transamine prepayment and the Social Security debt.

Realised copper prices

The average prices of copper for the three and nine months ended 30 September 2017 and 2016 are summarised below:

Realised copper prices for the reporting period noted above have been calculated using payable copper and including provisional invoices and final settlements of quotation periods ("QPs") together. Lower realised prices than market averages are mainly due to the final settlement of invoices whose QP was fixed in the previous quarter due to a short open period when copper prices were lower. The realised price of shipments during the quarter excluding QP was approximately $2.83/lb.

The Group had no hedges during the nine-month period ended 30 September 2017.

5. Non-GAAP Measures

Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost per pound of payable copper" and "realised prices" in this report. Non-IFRS measures do not have any standardised meaning prescribed under IFRS, and therefore they may not be comparable to similar measures presented by other companies. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for indicators prepared in accordance with IFRS.

EBITDA includes gross sales net of penalties and discounts and all operating costs, excluding finance, tax, impairment, depreciation and amortisation expenses.

Cash Cost per pound of payable copper includes cash operating costs, including treatment and refining charges ("TC/RC"), freight and distribution costs net of by-product credits. Cash Cost per pound of payable copper is consistent with the widely accepted industry standard established by Wood Mackenzie and is also known as the C1 cash cost.

Realised prices per pound of payable copper is the value of the copper payable included in the concentrate produced including the penalties, discounts, credits and other feature governed by the offtake agreements of the Group and all discounts or premium provided in commodity hedge agreements with financial institutions, expressed in USD per pound of payable copper. Realised price is consistent with the widely accepted industry standard definition.

6. Liquidity and capital resources

Atalaya monitors factors that could impact its liquidity as part of Atalaya'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 30 September 2017 and 31 December 2016 and cash flows for the three and nine months ended 30 September 2017 and 2016.

Liquidity information

Unrestricted cash and cash equivalents as at 30 September 2017 increased to €9.1 million from €0.9 million at 31 December 2016. The increase in cash balances is the result of net cash flow incurred in the period. Cash balances are unrestricted and include balances at operational and corporate level.

Restricted cash remains at €0.3 million as at 30 September 2017 and mainly relates to deposit bond guarantees.

As of 30 September 2017, Atalaya reported a working capital deficiency of €13.3 million, compared with a working capital deficit of €25.4 million at 31 December 2016. The main liability of the working capital is trade payables. The trade payable account relates to the main contractor where the Group has reached certain agreements to reduce its deficit progressively during 2017 and 2018. Atalaya expects the deficit to be reduced over the next months with cash generated by operations.

In June 2017, the Group completed repayment of €16.9 million to the Social Security's General Treasury in Spain. The debt liability was incurred by the former owners of the assets. Repayment was completed according to the agreed repayment schedule.

In September 2016, the Group entered into a US$14 million copper concentrate prepayment agreement with Transamine Trading, S.A. an independent and privately owned commodity trader company based in Geneva. The duration of the prepayment was from 1 January 2017 to 31 December 2018 with terms at market conditions and the settlement was agreed to be paid through deductions form payments received for each shipment. On 15 September 2017, the Group fully settled the prepayment ahead of schedule and will decide whether to extend the contract on the same terms before January 2018 as permitted under the original agreement.

During Q2 2017, Atalaya filed a formal claim in the Administrative Court relating to the previously announced government grant of €8.8 million. No amount was recognised in the financial statements.

6. Liquidity and capital resources (continued)

Overview of the Group's cash flows

Three months cash flows review

Cash and cash equivalents increased by €7.5 million during the three months ended 30 September 2017. This was due to cash from operating activities amounting to €12.9 million and cash used in investing activities amounting to €5.4 million.

Cash generated from operating activities before working capital changes was €8.0 million. Atalaya reduced its trade receivables in the period by €7.5 million and increased its inventory levels by €5.7 million and its trade payables by €3.6 million.

Investing activities during the quarter consumed €5.4 million, relating mainly to the permits of Proyecto Touro and stripping costs.

Nine months cash flows review

Cash and cash equivalents increased by €8.2 million during the nine months ended 30 September 2017. This was due to cash from operating activities amounting to €22.9 million and cash used in investing activities amounting to €14.6 million.

Cash generated from operating activities before working capital changes was €32.0 million. Atalaya decreased its trade receivables by €2.8 million and increased its trade payables balance in the period by €1.2 million respectively and increased its inventory levels by €9.6 million.

Investing activities during the nine-month period amounted to €14.6 million, mainly relating to the deferred mining costs and the permits of Proyecto Touro.

Foreign exchange

Foreign exchange rate movements can have a significant effect on Atalaya's operations, financial position and results. Atalaya's sales are denominated in U.S. dollars ("USD"), while Atalaya's operating expenses, income taxes and other expenses are denominated in Euros ("EUR"), and to a much lesser extent in British Pounds ("GBP").

Accordingly, fluctuations in the exchange rates can potentially impact the results of operations and carrying value of assets and liabilities on the balance sheet.

During the three and nine months ended 30 September 2017, Atalaya recognised a foreign exchange loss of €1.1 million and €1.9 million, respectively. Foreign exchange losses mainly related to changed in the period end EUR and USD conversion rates, as all sales are cashed and occasionally held in USD.

The following table summarises the movement in key currencies versus the EUR:

In February 2017, the Group entered into certain foreign exchange hedging contracts to offset the agreements in force as at 31 December 2016. During Q3 2017, Atalaya did not have any currency hedging agreements.

Further information on the hedging agreements is disclosed in the unaudited, condensed interim consolidated financial statements that follow (Note 15).

7. Deferred consideration

Astor Case

On 6 March 2017, judgment in the case (the "Astor Case") brought by Astor Management AG ("Astor") was handed down in the High Court of Justice in London (the "Judgment"). On 31 March 2017, declarations were made by the High Court which gave effect to the Judgment. The High Court found that the deferred consideration under the master agreement entered into between the Group, Astor and others (the "Master Agreement") did not start to become payable when permit approval was granted for the Rio Tinto Copper Project ("Proyecto Riotinto"). Accordingly, the first instalment of the deferred consideration had not fallen due.

While the Court confirmed that Atalaya was not in breach of any of its obligations, the Master Agreement and its provisions remain in place.

7. Deferred consideration (continued)

Astor Case (continued)

As a consequence, 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 early.

Accordingly, the Group recorded the liability of €53 million at fair value, using a discount rate on an estimated excess cash flow of Atalaya Riotinto Minera, S.L.U.

On 25 April 2017, Atalaya and Astor applied for permission to appeal to the Court of Appeal. On 11 August 2017, the Court of Appeal granted permission to both parties to appeal (although it rejected three of Astor's seven grounds). The Appeal will take place during May 2018.

More details on the Astor Case are included in Note 14 of the unaudited, condensed, interim, consolidated financial statements that follow.

8. Risk factors

Due to the nature of Atalaya's business in the mining industry, the Group is subject to various risks that could materially impact the future operating results and could cause actual events to differ materially from those described in forward-looking statements relating to Atalaya. Readers are encouraged to read and consider the risk factors detailed in Atalaya's audited, consolidated financial statements for the year ended 31 December 2016.

9. Critical accounting policies, estimates and accounting changes

The preparation of Atalaya's Financial Statements in accordance with IFRS requires management to make estimates and assumptions that affect amounts reported in the Financial Statements and accompanying notes. There is a full discussion and description of Atalaya's critical accounting policies in the audited consolidated financial statements for the year ended 31 December 2016.

10. Other information

Additional information about Atalaya Mining Plc. is available at www.atalayamining.com

Condensed interim consolidated income statements

(unaudited)

The notes on pages 15 to 28 are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed interim consolidated statements of financial position

(unaudited)

The notes on pages 15 to 28 are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed interim consolidated statements of changes in equity

(unaudited)

The notes on pages 15 to 28 are an integral part of these unaudited condensed interim consolidated financial statements.

Condensed interim consolidated statements of cash flows

(unaudited)

The notes on pages 15 to 28 are an integral part of these unaudited condensed interim consolidated financial statements.

1. General information

Country of incorporation

Atalaya Mining Plc. and its subsidiaries ("Atalaya" and/or the "Group"), was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under Companies Law, Cap. 113 and was converted to a public limited liability company on 26 January 2005. Its registered office is at 1 Lampousa Street, Nicosia, Cyprus. The Group has offices in Minas de Riotinto in Spain and in Nicosia, Cyprus. The Company was listed on the AIM market of the London Stock Exchange in May 2005 and on the TSX on 20 December 2010.

Change of name and share consolidation

Following the company's Extraordinary General Meeting ("EGM") on 13 October 2015, the change of name from EMED Mining Public Limited to Atalaya Mining Plc. became effective on 21 October 2015. On the same day, the consolidation of ordinary shares came into effect, whereby all shareholders received one new ordinary share of nominal value Stg £0.075 for every 30 existing ordinary shares of nominal value Stg £0.0025.

Principal activities

The principal activity of the Company and its subsidiaries is to operate the recently commissioned Rio Tinto Copper Project ("Proyecto Riotinto") and to explore for and develop base metal assets in Europe, with a focus on copper. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metals mineralisation in the European region.

2. Basis of preparation and accounting policies

Basis of preparation

The condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). IFRSs comprise the standards issued by the International Accounting Standard Board ("IASB"), and IFRS Interpretations Committee ("IFRICs") as issued by the IASB. Additionally, the consolidated financial statements have also been prepared in accordance with IFRSs as adopted by the European Union (EU), using the historical cost convention.

These condensed interim consolidated financial statements are unaudited and include the financial statements of the Company and its subsidiary undertakings. They have been prepared using accounting bases and policies consistent with those used in the preparation of the consolidated financial statements of the Group and the Company for the year ended 31 December 2016. These condensed interim consolidated financial statements do not include all of the disclosures required for annual financial statements, and accordingly, should be read in conjunction with the consolidated financial statements and other information set out in the Group's 31 December 2016 Annual Report. The accounting policies are unchanged from those disclosed in the annual consolidated financial statements.

The Directors have formed a judgment at the time of approving the financial statements that there is a reasonable expectation that the Group and the Company have adequate available resources to continue in operational existence for the foreseeable future.

These condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes that the Group will realise its assets and discharge its liabilities in the normal course of business. Management has carried out an assessment of the going concern assumption and has concluded that the Group's will generate sufficient cash and cash equivalents to continue operating for the next twelve months.

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 trading and available‑for‑sale financial assets is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price. The appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods, such as estimated discounted cash flows, and makes assumptions that are based on market conditions existing at the reporting date.

2. Basis of preparation and accounting policies (continued)

Fair value measurements recognised in the condensed interim consolidated statement of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

· Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

· Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

· Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Use and revision of accounting estimates

The preparation of the condensed interim consolidated financial statements requires the making of estimations and assumptions that affect the recognised amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Adoption of new and revised International Financial Reporting Standards (IFRSs)

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 2017. The adoption of these Standards did not have a material effect on the condensed interim consolidated financial statements.

Critical accounting estimates and judgements

The fair values of the Group's financial assets and liabilities approximate their carrying amounts at the reporting date. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are unchanged from those disclosed in the annual consolidated financial statements.

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 a reliable estimate of the amount can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3. Business and geographical segments

Business segments

The Group has only one distinct business segment, being that of mining operations, mineral exploration and development.

Geographical segments

The Group's mining and exploration activities are located in Spain and its administration is based in Cyprus.

3. Business and geographical segments (continued)

Geographical segments (continued)

4. Net finance cost

5. Basic and fully diluted profit/(loss) per share

The calculation of the basic and fully diluted profit/(loss) per share attributable to the ordinary equity holders of the parent is based on the following data:

6. Property, plant and equipment

(1) Rehabilitation provision

(2) Stripping costs

(3) Includes motor vehicles, furniture, fixtures and office equipment which are depreciated over 5-10 years.

The above property, plant and equipment is located in Cyprus and Spain.

7. Intangible assets