Atalaya Mining Regulatory News (ATYM)

06 January 2022

Atalaya Mining Plc.

("Atalaya" or the "Company")

Atalaya to Start Construction of an E-LIX Plant

Atalaya Mining Plc (AIM:ATYM, TSX:AYM) is pleased to announce that it has approved the construction of the first phase of an industrial-scale plant ("Phase I") that utilises the E-LIX System ("E-LIX"), which will produce high value copper and zinc metals from the complex sulphide concentrates sourced from Proyecto Riotinto.

Highlights

· Expected to unlock significant value from Atalaya's portfolio of polymetallic resources in the Riotinto District by materially increasing the recoveries of copper, zinc, lead and precious metals from complex sulphide ores.

· Producing high-purity metals on-site will reduce transportation costs, treatment charges and penalties associated with producing and delivering conventional concentrates.

· Expected to reduce Atalaya's carbon footprint through a reduction in land and sea freight and by utilising power from Proyecto Riotinto's planned solar plant.

Following its announcement on 28 October 2020, Atalaya has concluded a feasibility study that evaluated the technical and economic viability of producing cathodes from complex sulphide concentrates by applying E-LIX, a new electrochemical extraction process developed and owned by Lain Technologies Ltd ("Lain Tech") with the financial support of Atalaya. E-LIX is patented by Lain Tech.

Relative to conventional flotation techniques, the value creation potential of E-LIX offers a unique opportunity for Atalaya. As a result, as disclosed in the 28 October 2020 announcement, the Company has secured certain terms of exclusivity with Lain Tech for the use of E-LIX within the Iberian Pyrite Belt.

The E-LIX plant will dissolve the valuable metals contained within the concentrates. The testwork and system design allows for the dissolution of chalcopyrite while avoiding the passivation of particles. After copper or other metals are brought into solution, they can be recovered by conventional precipitation or solvent extraction followed by electrowinning ("SX-EW").

Phase I plant capacity has been designed to produce between 3,000 to 10,000 tonnes of copper or zinc metal per year depending on the ratio of copper to zinc in the concentrate feed.

The estimated capex for Phase I is €12 million and the design allows for unlimited capacity expansion through the addition of multiple lines in parallel. Atalaya will start the construction of the plant in the coming weeks and it is expected that the plant will be operational in 2022, including commissioning.

The decision to approve and construct the Phase I industrial-sized plant follows over six years of evaluation and de-risking work including continuous tests at the laboratory, a small pilot plant and finally a semi-industrial pilot plant.

A semi-industrial E-LIX pilot plant was constructed in late 2019 and has operated during 2020 and 2021 despite the challenges of the COVID-19 outbreak. The results of the pilot tests were included in the feasibility study and successive optimisation work. The long run continuous tests demonstrated the feasibility of leaching complex polymetallic concentrates with global recoveries of over 95% for copper and zinc while producing clean metal precipitates and/or high purity metals.

The use of the E-LIX System has shown the potential to unlock the significant value from the polymetallic sulphides contained within Atalaya's mineral resources, including:

· The polymetallic deposits of San Dionisio, San Antonio, Masa Valverde and Majadales, all of which are located in the Iberian Pyrite Belt and within trucking distance of Proyecto Riotinto's modern 15 Mtpa processing facility.

· The significant contained metal within these historical drilled resources from San Dionisio and Masa Valverde contain over 1.1 million tonnes of copper, 2.4 million tonnes of zinc, 1.7 million ounces of gold, over 110 million ounces of silver as well as additional lead resources. These figures are in addition to the over 1 million tonnes of copper reserve at Proyecto Riotinto's Cerro Colorado orebody and at Proyecto Touro.

· Historical applications of differential flotation within the Iberian Pyrite Belt in Spain and Portugal have typically resulted in recoveries of 60 - 80% into concentrates for complex copper-zinc polymetallic sulphides, with even lower recoveries historically reported for lead, silver and gold. The use of hydrometallurgical systems, such as E-LIX, has demonstrated that base metal recoveries of over 90% can be achieved.

E-LIX is also expected to reduce Atalaya's carbon footprint. By producing high-purity metals on-site, Atalaya can reduce the transportation costs associated with delivering concentrates to smelters, avoid treatment and refining charges associated with converting concentrates into metal, and eliminate penalties associated with deleterious elements often contained within concentrates produced in the Iberian Pyrite Belt and elsewhere. The E-LIX plant is also expected to utilise the renewable energy that will be produced by Proyecto Riotinto's planned solar plant.

Alberto Lavandeira, CEO commented:

"The E-LIX System offers Atalaya a unique opportunity to unlock significant value from its portfolio of deposits that contain complex polymetallic mineralisation. Atalaya has worked together with Lain Technologies for many years in order to test, refine and demonstrate the E-LIX process, providing the Company with confidence in its potential. In addition to enhancing recoveries, E-LIX will eliminate penalties associated with deleterious elements and reduce the costs of transportation and energy, thereby improving the Company's carbon footprint."

Contacts:

About Atalaya Mining Plc

Atalaya is an AIM and TSX-listed mining and development group which produces copper concentrates and silver by-product at its wholly owned Proyecto Riotinto site in southwest Spain. Atalaya's current operations include the Cerro Colorado open pit mine and a modern 15 Mtpa processing plant, which has the potential to become a centralised processing hub for ore sourced from its wholly owned regional projects around Riotinto that include Proyecto Masa Valverde and Proyecto Riotinto East. 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. For further information, visit www.atalayamining.com