Atalaya Mining Regulatory News (ATYM)

AIM: EMED, TSX: EMD 19 January 2011

EMED Mining Plans Drilling Programs for Rio Tinto Copper Mine

EMED Mining Public Limited (AIM: EMED, TSX: EMD) ("EMED Mining" or "the Company"), the mining exploration and development company focused on several projects in Europe, announced today plans for drilling at the Company's Rio Tinto Copper Mine in 2011:

> Grade control drilling within the planned open pit to improve grade distribution data and verify the location of historical underground mine workings for detailed mine planning in preparation for commencement of mining;

> Drilling within and adjacent to the planned open pit that is targeted at increasing current Mineral Resources as well as delineating additional Ore Reserves; and

> Initial scout drilling down-plunge of historical underground mine workings that is aimed at exploring untested underground potential.

Drilling is planned to commence as soon as regulatory permits allow.

Harry Anagnostaras-Adams, Managing Director of EMED Mining, commented:

"The Rio Tinto Copper Mine has substantial Ore Reserves based on an assumed copper price of US$2.00/lb compared with current prices above US$4.00/lb. Our first priority is to restart production once all the regulatory clearances are received. Exploration work will be conducted in parallel with completion of permitting and the start-up of the mining operation. Many areas on the mine property have not been drilled near surface or at depth.

"Even though the Rio Tinto deposit has long been recognised as one of the world's largest massive sulphide mineralisation systems, the known vertical extent of the orebody as defined by the drill-hole data is only about 250 metres below surface.

"EMED Mining has planned many improvements to the project and is also progressing work needed to expand production and extend the mine life. Exploration drilling is planned in due course to focus on the potential for the open pit to be expanded and at least one of the underground mines on the property to be reactivated.

"Exploration targets have been identified with the potential to expand the current 14-year base-case mine life and/or annual production."

Enquiries

Background Information

The Rio Tinto Copper Mine has a very long history of producing copper. The current processing facility was built in 1969 and expanded in 1982-1985 by Rio Tinto Plc and has been on care and maintenance since 2001.

The vast majority of the mine's extensive historical drilling data is now in a modern database that facilitates a much better understanding of the controls on the mineralisation and also serves to highlight gaps in the data.

Following completion of the submissions for project permitting, the exploration team is now able to focus on planning exploration programs. A thorough review of the local geology has been completed and interpretation of the digitised data is being progressed to prioritise target areas identified in the immediate vicinity of the currently planned open pit.

A 60,000 metre drilling program is planned to investigate these exploration targets with the following objectives:

> Increasing resources and reserves at potential open-pit mining depths by filling in gaps within the current data and drilling the untested host rocks adjacent to the existing resources;

> Defining initial resources that would be potentially mined by underground methods; and

> Justifying an expansion of the processing plant to treat approximately 15 million tonnes per annum following completion of appropriate studies in due course.

Drilling of five different areas in and around the currently planned Cerro Colorado open pit is considered to have the exploration potential to increase the resources that are likely to be accessed via open-pit mining by 40% to 60% to approximately 285 to 325 million tonnes with an overall grade in a range of 0.45% to 0.50% copper.

These exploration targets were estimated following a review of the extensive historical data and geological interpretation. It is uncertain if further exploration will define additional resources as these exploration targets are conceptual in nature and further exploration work is required in order to define and report additional Mineral Resources in accordance with the JORC Code and the NI 43-101 Standard. The basis for estimating these exploration targets is explained in detail below.

Drilling is planned to start in H1-2011, subject to the Company being granted Administrative Standing by the mining authorities in Spain.

Exploration drilling is often intensified during the mine start-up phase in order to optimise long-term project plans while short-term targets are pursued. This drilling is integral to EMED Mining's plans to optimise the value of the Rio Tinto Copper Mine for all stakeholders, especially as minimal exploration has been conducted since approximately 1990.

Current Reserves and Resources Confirmed

Behre Dolbear has completed a technical report entitled "NI 43-101 Technical Report on Reopening the Rio Tinto Copper Mine, Huelva Province, Spain", dated 17 November 2010. This report was filed with various regulatory authorities as part of the process for EMED Mining's dual listing on the Toronto Stock Exchange and is available on SEDAR under the Company's profile at www.sedar.com.

Behre Dolbear reviewed the previously published JORC Code-compliant reserves and resources for the Rio Tinto Copper Mine and found these estimates to be fair and reasonable, which are summarised as follows:

> Proven and Probable Ore Reserves totalling 123 million tonnes at 0.49% copper, containing 606,000 tonnes of copper; and

> Measured and Indicated Mineral Resources totalling 203.1 million tonnes at 0.46% copper, containing 933,400 tonnes of copper (inclusive of Ore Reserves).

Reserves and resources were both estimated at a cut-off grade of 0.20% copper, and were based on copper prices of US$2.00/lb and US$3.00/lb, respectively.

Near-Term Potential to Increase Resources

Initial drilling will target "gaps in historical data" within the current resources. These gaps are currently included in the resource estimation model as blocks with zero contained copper. Given the disseminated, stockwork style of mineralisation at the Rio Tinto deposit, many of these gaps are considered likely to contain copper mineralisation above the cut-off grade of 0.20% copper and are thus expected to lead to an increase in resources (see diagrams in Appendix A).

Drilling is also planned to target areas near the current resources, both laterally and at depth, which remain untested by drilling and contain the same volcanic rocks that host known mineralisation.

Near-Term Potential to Increase Reserves

Many "gaps in historical data" are located immediately below the current reserves. The addition of these "infill" blocks are considered likely to result in a larger optimised open pit at the same cut-off grade and a similar strip ratio, thus increasing reserves by enlarging the open pit to include part of the current resources outside of the current reserve as well as some of the additional resources identified by drilling (see diagrams in Appendix A).

A substantial portion (80 million tonnes) of current Measured and Indicated Resources has not yet been converted to Ore Reserves.

Further drilling is likely to enlarge the pit shell to include more of the Measured and Indicated Resources because:

> Gaps in drilling which have necessitated these areas to be included in the block model at an assumed grade of zero pending verification of grade;

> These gaps are adjacent to blocks above the cut-off grade (>0.20% copper) so have a good probability of also being above the cut-off grade due to the gradational nature of the stockwork mineralisation; and

> The current reserves fall within an optimised pit that was strongly influenced by the zero grade of these gaps.

Note that the optimised pit for reserves was based on a US$2.00/lb copper price and the non-optimised pit for resources was based on a US$3.00/lb copper price. Raising the copper price would also enlarge the pit shell used to estimate reserves.

Following the completion of appropriate technical and financial studies, to be carried out in due course, it is anticipated that the existing resource base for the Rio Tinto Copper Mine together with the targeted increase in resources will result in a commensurate increase in the Ore Reserves.

It is uncertain if further exploration will define additional resources or reserves as these exploration targets are conceptual in nature and further exploration work is required in order to define and report additional Mineral Resources and Ore Reserves in accordance with the JORC Code and the NI 43-101 Standard.

Potential to Increase Resources for Mining Underground

A number of deeper exploration targets have been identified that are considered to have good potential to add Mineral Resources that may be accessible via underground mining methods.

The data from approximately 4,000 maps of the extensive historical underground workings at the Rio Tinto Copper Mine have recently been added to EMED Mining's database. Historical geological mapping, historical underground drillhole data and historical underground channel sampling are currently being added to the database.

Interpretation of this data will facilitate an improved 3D spatial understanding of this deeper mineralisation and focus the exploration accordingly.

Copper mineralisation detailed in this data is outside of the current resource estimates. This data needs to be confirmed by further drilling and appropriately verified prior to becoming suitable for inclusion in resource estimates. Drilling is planned to confirm and extend known mineralisation down-plunge in order to provide sufficient data to estimate initial resources for potential underground mines.

Potential Outcomes

Exploration success would enable the mine life to be extended and/or enable a substantial increase in annual production. The zones targeted for drilling are as follows:

> Near the current resources, laterally and at depth - zones that would fall within an expanded open pit, which remain untested by drilling and contain the same volcanic rocks that host known mineralisation; and

> Near to and down-plunge of extensive underground workings, in order to estimate initial resources for potential underground mines.

The area in and around the current open pit is considered to have the exploration potential to increase the resources that are accessible via open-pit mining by 40% to 60% to approximately 285 to 325 million tonnes with an overall grade in a range of 0.45% to 0.50% copper. An increase of this magnitude is likely to result in a commensurate increase in reserves and be sufficient to support a potential expansion of processing rates to approximately 15 million tonnes per annum without changing the mine cut-off-grade and without a large change to the stripping ratio.

It is uncertain if further exploration will define additional resources or reserves as these exploration targets are conceptual in nature and further exploration work is required in order to define and report additional Mineral Resources and Ore Reserves in accordance with the JORC Code and the NI 43-101 Standard.

A preliminary engineering review of the existing processing facilities indicates that sufficient crushing and grinding capacity is already in place for such an expansion. New cells would need to be added to the flotation circuit and the tailings facilities would need to be expanded.

Following the completion of appropriate technical and financial studies, to be carried out in due course, it is anticipated that the existing resource base at the Rio Tinto Copper Mine together with the targeted increase in resources will result in a commensurate increase in the Ore Reserves and copper production rates.

Please click link below to see appendices: Diagrams to Illustrate Exploration Potential and Resource and Revenue Statement.

http://www.rns-pdf.londonstockexchange.com/rns/6659Z_-2011-1-18.pdf