Atalaya Mining Regulatory News (ATYM)

AIM: EMED 8 June 2010

EMED Mining Agrees Debt-Repayment Plans with Department of Social Security

EMED Mining Public Limited ("EMED Mining"), the AIM-quoted mining exploration and development company, is pleased to announce that its wholly-owned subsidiary EMED Tartessus S.L. ("EMED Tartessus" or "the Company") has settled the terms with Tesorería General de la Seguridad Social of Spain ('Department of Social Security') for extinguishing its liens against its principal landholdings which underlie the entire mine, minerals title area and plant site of Proyecto Rio Tinto ('PRT' or "Rio Tinto Mine").

The liens had been granted as a form of security interest set against the landholdings to secure the payment of the debt owed to the Department of Social Security by previous owner - the now insolvent Minas de Rio Tinto ("MRT").

Following discussion, EMED Tartessus has agreed new arrangements for the repayment of the €16.9m debt over a five year period. This covers the unpaid social security contributions incurred by MRT and also includes interest accrued since MRT went into liquidation.

EMED Tartessus has always been aware of the liens and factored in full repayment of the past debt as part of the cost of the restart of the Rio Tinto Mine. Under the terms of the settlement, the Department of Social Security will not enforce the liens it holds against the relevant assets owned by EMED Tartessus and the debt will be repaid in full over a five year period: €1.3 million initially, followed by annual payments of €1.1 million, €2.9 million, €3.6 million, €4.2 million and €5.9 million, including interest.

This transaction is important as it assists the planned project financing arrangements for PRT's restart and the extended repayment profile helps to protect the cash flow of the project in its early years. It is also important for the central government of Spain as it will recover 100% of a large and long outstanding debt with interest.

The successful resolution of this obligation is another important milestone in the re-opening of the Rio Tinto Mine.

The initial step, achieved in 2008, was the clarification of project ownership when EMED Mining moved to full ownership by acquiring from MRI Investment A.G the 49% of EMED Tartessus it did not already own. Previously progress had been hampered by disputes between various historical stakeholders and this restructuring, combined with a number of subsequent favourable court rulings (refer to announcement dated 11 January 2010) has made it easier for the Junta de Andalucía and others to more confidently engage in the restart and permitting process.

The Company continues to proceed with permitting activities, working cooperatively with all relevant government departments to complete the full range of requested technical submissions on schedule in the coming month. An outstanding matter to be resolved is the acquisition of certain adjacent landholdings needed for PRT. In the absence of a negotiated agreement, the Company will initiate compulsory acquisition as permitted under Spanish law and the relevant independent valuations have been carried out.

Mr. Harry Anagnostaras-Adams, Managing Director of EMED Mining commented: "Our financial projections have always included appropriate payments for settling the outstanding debt and extinguishing these liens. Working closely with the Department of Social Security, we have been able to agree payment of the debt over a five year period which will assist the Company in our project financing arrangements.

"The restart of PRT has always been as much about the clean-up of the pre-existing legal disputes as it is about the proper planning to elevate PRT both technically and operationally to a 21st century operation. Today's announcement further demonstrates the progress being made on all fronts in accordance with the schedule published in December 2009."