Atalaya Mining Regulatory News (ATYM)

10 August 2023

Atalaya Mining Plc.

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

Q2 and H1 2023 Financial Results

Strong production, decreasing AISC and focus on organic growth

Atalaya Mining Plc (AIM: ATYM) is pleased to announce its unaudited second quarter and first half financial results for the period ended 30 June 2023 ("Q2 2023" and "H1 2023" respectively) together with its unaudited condensed consolidated interim financial statements.

Highlights

· Strong copper production of 14.2 kt in Q2 2023, bringing H1 2023 total to 26.4 kt

· Improved AISC of $2.89/lb Cu in Q2 2023 mainly due to lower electricity prices

· FY2023 outlook on track: production of 53-55 kt copper at AISC of $3.00-3.20/lb

· EBITDA of €15.7 million in Q2 2023 and €40.1 million in H1 2023 as improved cash costs offset lower copper prices

· 2023 interim dividend of US$0.05 per ordinary share declared

· Strong net cash position of €68.8 million supports ongoing investments in growth, cost reductions and decarbonisation initiatives

Q2 and H1 2023 Financial Results Summary

(1) Interim dividends declared in relation to H1 2023 and H1 2022 periods, respectively.

(2) Includes restricted cash and bank borrowings at 30 June 2023 and 2022.

Alberto Lavandeira, CEO, commented:

"I am pleased to report that we have delivered a strong performance in the first half of 2023. Our operations are performing well, with production on track to achieve full year objectives. In addition, our AISC has improved thanks to lower electricity prices, helping to offset lower copper prices. The resulting EBITDA of €40.1 million in H1 2023 reflects the resiliency of our business.

Copper fundamentals continue to improve, with many large miners having recently downgraded their production guidance for 2023 as a result of operational challenges and project delays. Over the medium term, few large new projects are expected to be sanctioned due to uncertainties related to permitting and cost inflation.

In addition, more governments around the world are now classifying copper as a strategic metal. Recently, the U.S. Department of Energy released its 2023 Critical Materials Assessment, which included copper on its list of materials with high risk of supply disruption that are integral to clean energy technologies.

Atalaya is well placed to benefit from the improving market dynamics of copper. We have a robust cash position and are continuing to advance our diverse project portfolio. Combined, these initiatives have the potential to increase our copper production, reduce our cost position, lower our carbon footprint and extend the life of our operations in Spain."

Investor Presentation Reminder

Alberto Lavandeira (CEO) and César Sánchez (CFO) will be holding a live presentation relating to the Q2 and H1 2023 Financial Results via the Investor Meet Company platform at 13:00 BST today.

To register, please visit the following link and click "Add to Meet" Atalaya via:

https://www.investormeetcompany.com/atalaya-mining-plc/register-investor

Management will also answer questions that have been submitted via the Investor Meet Company dashboard.

Q2 and H1 2023 Operating Results Summary

Mining

Ore mined was 3.9 million tonnes in Q2 2023 (Q2 2022: 3.6 million tonnes) and 7.4 million tonnes in H1 2023 (H1 2022: 7.5 million tonnes).

Waste mined was 8.6 million tonnes in Q2 2023 (Q2 2022: 6.7 million tonnes) and 15.2 million tonnes in H1 2023 (H1 2022: 13.6 million tonnes). Waste mining during H1 2023 was consistent with budget and includes increased waste stripping at Cerro Colorado in anticipation of the potential start of mining activities at San Dionisio in late 2023.

Processing

The plant processed ore of 4.1 million tonnes in Q2 2023 (Q2 2022: 4.0 million tonnes) and 7.8 million tonnes in H1 2023 (H1 2022: 7.5 million tonnes). Throughput rates in Q2 2023 reflected strong mill performance following the prior rescheduling of plant maintenance activities into Q1 2023.

Copper grade was 0.40% in Q2 2023 (Q2 2022: 0.39%) and 0.39% in H1 2023 (H1 2022: 0.38%).

Copper recoveries in Q2 2023 were 87.18% (Q2 2022: 86.44%) and 87.04% in H1 2023 (H1 2022: 86.26%), as a result of favourable ore characteristics during the 2023 periods.

Production

Copper production was 14,212 tonnes in Q2 2023 (Q2 2022: 13,386 tonnes) and 26,351 tonnes in H1 2023 (H1 2022: 24,847 tonnes). Production during the 2023 periods benefited from higher throughput, copper grades and copper recoveries compared with the 2022 periods.

On-site copper concentrate inventories at 30 June 2023 were approximately 7,291 tonnes (31 March 2023: 1,564 tonnes). All concentrate in stock at the beginning of the period was delivered to the port at Huelva.

Copper contained in concentrates sold was 12,858 tonnes in Q2 2023 (Q2 2022: 13,872 tonnes) and 25,359 tonnes in H1 2023 (H1 2022: 24,176 tonnes).

Cash Costs and AISC Breakdown

Cash costs were $2.60/lb payable copper in Q2 2023 (Q2 2022: $3.12/lb) and $2.73/lb payable copper in H1 2023 (H1 2022: $3.22/lb), with the decrease mainly due to lower electricity costs and higher production volumes.

AISC were $2.89/lb payable copper in Q2 2023 (Q2 2022: $3.33/lb) and $3.00/lb payable copper in H1 2023 (H1 2022: $3.45/lb). The decrease in AISC was driven by the same factors that resulted in lower cash costs, but partly offset by higher capitalised stripping costs. AISC excludes one-off investments in the tailings dam, consistent with prior reporting.

Q2 and H1 2023 Financial Results Highlights

Income Statement

Revenues were €79.1 million in Q2 2023 (Q2 2022: €93.4 million) and €170.2 million in H1 2023 (H1 2022: €179.7 million). Lower revenues were mainly the result of lower realised copper prices during the 2023 periods.

Operating costs were €63.3 million in Q2 2023 (Q2 2022: €78.7 million) and €130.1 million (H1 2022: €138.3 million). Lower operating costs during the 2023 periods were mainly the result of lower electricity costs and modestly lower expensed mining costs, partly offset by higher administrative and expensed exploration costs.

EBITDA was €15.7 million in Q2 2023 (Q2 2022: €14.7 million) and €40.1 million in H1 2023 (H1 2022: €41.4 million). The comparable level of EBITDA resulted from lower copper prices being offset by lower operating costs.

Profit after tax was €9.2 million in Q2 2023 (Q2 2022: €11.8 million) or 6.8 cents basic earnings per share (Q2 2022: 8.6 cents) and €20.3 million in H1 2023 (H1 2022: €30.1 million) or 15.0 cents basic earnings per share (Q2 2022: 22.1 cents).

Cash Flow Statement

Cash flows from operating activities before changes in working capital were €14.7 million in Q2 2023 (Q2 2022: €14.3 million) and €18.9 million after working capital changes (Q2 2022: negative €6.9 million). For H1 2023, cash flows from operating activities before changes in working capital were €38.9 million (H1 2022: €41.3 million) and €31.3 million after working capital changes (H1 2022: €21.4 million).

Cash flows used in investing activities were €7.9 million in Q2 2023 (Q2 2022: €19.8 million) and €16.7 million in H1 2023 (H1 2022: €27.3 million). Key investments in Q2 2023 included €1.1 million in sustaining capex (Q2 2022: €2.0 million), €2.7 million in capitalised stripping (Q2 2022: €20 thousand), €3.5 million to increase the tailings dam (Q2 2022: €3.9 million), €2.8 million for the 50 MW solar plant (Q2 2022: €11.3 million) and €5.0 million for the E-LIX Phase I Plant (Q2 2022: €5.8 million), of which €3.0 million was booked as long-term loans to Lain Technologies Ltd.

Cash flows from financing activities were negative €18.9 million in Q2 2023 (Q2 2022: positive €17.8 million) and negative €28.4 million in H1 2023 (H1 2022: positive €15.5 million), as a result of scheduled repayments made under the Company's credit facilities.

Balance Sheet

Consolidated cash and cash equivalents were €112.6 million at 30 June 2023 (31 December 2022: €126.4 million).

Net of current and non-current borrowings of €43.9 million, net cash was €68.8 million as at 30 June 2023, compared to €55.3 million as at 31 March 2023 and €53.1 million as at 31 December 2022.

Inventories of concentrate valued at cost were €8.2 million at 30 June 2023 (31 December 2022: €4.5 million).

As at 30 June 2023, total working capital was €81.4 million, compared to €85.3 million as at 31 March 2023 and €84.0 million as at 31 December 2022.

Electricity Prices

Realised Prices

Market electricity prices in Q2 2023 continued to moderate. When including the contribution from the Company's 10-year power purchase agreement ("PPA"), realised electricity prices in Q2 2023 and H1 2023 were around 60% lower than the Company's average realised electricity price in 2022.

Renewable Energy Projects

Construction of the 50 MW solar plant at Riotinto continues to advance, with start-up expected in late 2023 or early 2024. When fully operational, the facility is expected to provide approximately 22% of Riotinto's current electricity needs. Together, the 50 MW solar plant and long-term PPA will provide over 50% of the Company's current electricity requirements at a rate below historical prices in Spain.

The Company continues to assess the potential installation of wind turbines at Riotinto, which could supply additional low cost and carbon-free electricity and contribute to the Company's decarbonisation objectives.

2023 Guidance

The Company remains on track to achieve the full year 2023 guidance, including copper production guidance of 53,000 to 55,000 tonnes of copper at cash costs of $2.80 to $3.00/lb copper payable and AISC of $3.00 to $3.20/lb copper payable.

In addition, aggregate expenditures relating to non-sustaining capital investments (such as E-LIX Phase I, the 50 MW solar plant, Riotinto tailings facility expansion) and exploration activities are trending in line with FY2023 guidance, although the composition is expected to vary slightly including modestly higher investments in the E-LIX Phase I plant.

2023 Interim Dividend

Since 2022, Atalaya has had a dividend policy that seeks to provide capital returns to its shareholders and allows for continued investments in its portfolio of low capital intensity growth projects. The dividend policy consists of an annual pay-out of 30 - 50% of free cash flow generated during the applicable financial year and is payable in two half-yearly instalments.

In relation to FY2022, Atalaya completed the payment of the 2022 Final Dividend of US$0.0385 per ordinary share on 8 August 2023.

In relation to the H1 2023 period, the Company's Board of Directors has elected to declare an interim dividend of US$0.050 per ordinary share ("2023 Interim Dividend"), which is equivalent to approximately 3.9 pence per share. This compares to the 2022 interim dividend of US$0.036 per ordinary share.

Shareholders can elect to receive the 2023 Interim Dividend in Sterling or Euros by submitting a currency election form, which will be made available on the Company's website.

2023 Interim Dividend Timetable

The Company is not required to withhold any Cypriot special defence contributions or general healthcare system contributions upon the distribution of dividends to its shareholders, as a result of the approval obtained from the Tax Department of the Ministry of Finance of the Republic of Cyprus.

Asset Portfolio Update

Proyecto Riotinto

In April 2023, the Company was granted a substantial modification to the existing Unified Environmental Authorisation (or in Spanish, Autorización Ambiental Unificada ("AAU")) for Proyecto Riotinto by the Junta de Andalucía. This allows for the expansion of tailings capacity at Riotinto and represents an important step towards developing regional deposits such as San Dionisio and San Antonio.

During H1 2023, the Company continued permitting activities associated with San Dionisio, which represents a key component of the integrated mine plan that was outlined in the recent Riotinto PEA.

E-LIX Phase I Plant

Construction activities continue at the E-LIX Phase I plant, with commissioning expected during H2 2023.

Once operational, the E-LIX plant is expected to produce high purity copper or zinc metals on site, allowing the Company to potentially achieve higher metal recoveries from complex polymetallic ores, lower transportation and concentrate treatment charges and a reduced carbon footprint.

Riotinto District - Proyecto Masa Valverde ("PMV")

In March 2023, the Company announced that PMV was granted the AAU by the Junta de Andalucía, following an application process that was initiated by the Company in December 2021. The AAU is an integrated process that combines the Environmental Impact Assessment and other authorisations and specifies requirements to avoid, prevent and minimise a project's impacts on the environment and the cultural heritage of the area. Various evaluation workstreams continue in advance of filing for the exploitation permit.

Three core rigs are active and focused on resource definition drilling at the Campanario Trend, step-out drilling around the new discovery made at the Mojarra Trend and first drill testing coincident fix loop electromagnetic ("FLEM") and airborne gravity gradiometry ("AGG") anomalies.

Proyecto Touro

Atalaya remains fully committed to the development of the Touro copper project in Galicia, which could become a new source of copper production for Europe.

In March 2023, the European Union announced the Critical Raw Materials Act, which seeks to "address the EU's dependency on imported critical raw materials by diversifying and securing a domestic and sustainable supply of critical raw materials". Copper was added to the list of "Strategic Raw Materials" as a result of the challenges associated with substituting copper metal in electrical applications.

Running parallel with the Touro permitting process, the Company continues to focus on numerous initiatives related to securing the social licence to operate, including engaging with the many stakeholders in the region to provide detailed information on the new improved project design. Positive and favourable feedback from numerous meetings with municipalities, farmers and fishermen associations and other industries indicate meaningful support towards the development of a new and modern mining project.

The Company continues to restore rivers around Touro and is operating its water treatment plant, which is addressing the legacy issues associated with acid water runoff from the historical mine, which closed in 1987. The construction of the treatment plant was contemplated in the original project proposal, but Atalaya volunteered to fix the historical acid water issues prior to the new Environmental Impact Assessment ("EIA") in order to demonstrate its operating philosophy and the benefits of modern operating systems. The field work carried out by Atalaya has resulted in an immediate and visible improvement of the water systems surrounding the project.

Atalaya continues to be confident that its approach to Touro, which includes fully plastic lined thickened tailings with zero discharge, is consistent with international best practice and will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to the development of the project.

Proyecto Ossa Morena

Drilling continued to progress with one rig at the Guijarro-Chaparral gold-copper project, located in the central part of the district. Drilling at the flagship Alconchel-Pallares copper-gold project is expected to commence during Q3 2023.

Proyecto Riotinto East

Drill testing of selected coincident FLEM and AGG anomalies are in progress with one rig.

Corporate Matters

Following the voluntary delisting of the Company's ordinary shares from the Toronto Stock Exchange ("TSX"), an application was made to cease to be a reporting issuer in Canada. The request was granted during Q2 2023, and as a result, the Company will no longer be required to file financial statements and other continuous disclosure documents in Canada.

The Company's disclosure obligations under the AIM Rules for Companies, as published by London Stock Exchange plc, are unchanged.

Financial Statements

The Unaudited Interim Condensed Consolidated Financial Statements for the three and six months ended 30 June 2023 are also available on Atalaya's website at www.atalayamining.com.

Contacts:

About Atalaya Mining Plc

Atalaya is an AIM-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 central 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, as well as a 99.9% interest in Proyecto Ossa Morena. For further information, visit www.atalayamining.com

ATALAYA MINING PLC

MANAGEMENT'S REVIEW AND

UNAUDITED INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

30 June 2023

Notice to Reader

The accompanying unaudited interim condensed consolidated financial statements of Atalaya Mining Plc have been prepared by and are the responsibility of Atalaya Mining Plc's management.

Atalaya will audit the Financial Statements for the period ended 30 June 2023 and the audited financial statements will be published on Atalaya's website in due course.

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 2022 and 30 June 2023 and results of operations for the three and six months ended 30 June 2023 and 2022.

This report has been prepared as of 9 August 2023. The analysis hereby included is intended to supplement and complement the unaudited interim condensed consolidated financial statements and notes thereto ("Financial Statements") as at and for the period ended 30 June 2023. 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 2022, and the unaudited interim condensed consolidated financial statements for the period ended 30 June 2022. These documents can be found on Atalaya's website at www.atalayamining.com

Atalaya prepares its Annual Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and its Unaudited Interim Condensed Consolidated Financial Statements in accordance with International Accounting Standard 34: Interim Financial Reporting. 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 constitute 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. Incorporation and description of the Business

Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the 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 Company was listed on AIM of the London Stock Exchange ("AIM") in May 2005 under the symbol ATYM. The Company continued to be listed on AIM as at 30 June 2023.

On 20 February 2023, Atalaya announced that applied a voluntary delisting of its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary shares in the Company continue to trade on the AIM market of the London Stock Exchange under the symbol "ATYM". Delisting from TSX took effect at the close of trading on 20 March 2023. Furthermore, Atalaya ceased to be a reporting issuer in Canadian jurisdictions on 26 June 2023.

Atalaya is a European mining and development company. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in Spain, elsewhere in Europe and Latin America.

The Group currently owns four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Company has an earn-in agreement to acquire three investigation permits at Proyecto Riotinto Este.

Proyecto Riotinto

The Company owns and operates through a wholly owned subsidiary, "Proyecto Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the Andalusia region of Spain, approximately 65 km northwest of Seville. A brownfield expansion of this mine was completed in 2019 and successfully commissioned by 31 March 2020.

Proyecto Touro

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. Proyecto Touro is currently in the permitting process.

In November 2019, Atalaya executed the option to acquire 12.5% of Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro, with known additional mineralisation, which will add to the potential of Proyecto Touro.

Proyecto Masa Valverde

On 21 October 2020, the Company announced that it entered into a definitive purchase agreement to acquire 100% of the shares of Cambridge Mineria España, S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which fully owns the Masa Valverde polymetallic project located in Huelva (Spain). Proyecto Masa Valverde is currently in the permitting process.

Proyecto Riotinto Este

In December 2020, Atalaya entered into a Memorandum of Understanding with a local private Spanish company to acquire a 100% beneficial interest in three investigation permits (known as Peñas Blancas, Cerro Negro and Herreros investigation permits), which cover approximately 12,368 hectares and are located immediately east of Proyecto Riotinto.

Proyecto Ossa Morena

In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owns 17 investigation permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa-Morena Metallogenic Belt. In July 2022, Atalaya increased its stake in the company to 99.9% as a result of an equity raise to fund the exploration activities under the investigation permits.

2. Overview of Operational Results

Proyecto Riotinto

The following table presents a summarised statement of operations of Proyecto Riotinto for the three and six months ended 30 June 2023 and 2022, respectively.

(*) Refer Section 5 of this Management Review.

There may be slight differences between the numbers in the above table and the figures announced in the quarterly operations updates that are available on Atalaya's website at www.atalayamining.com

Three months operational review

The plant processed ore of 4.1 million tonnes during Q2 2023 (Q2 2022: 4.0 million tonnes), compared with 3.7 million tonnes in Q1 2023. Throughput rates during the period reflected strong mill performance following the prior rescheduling of plant maintenance activities into Q1 2023.

Copper grade was 0.40% in Q2 2023 (Q2 2022: 0.39%), compared with 0.38% in Q1 2023.

Copper recoveries in Q2 2023 were 87.18% (Q2 2022: 86.44%), compared with 86.88% in Q1 2023, as a result of favourable ore characteristics during the period.

Copper production was 14,212 tonnes in Q2 2023 (Q2 2022: 13,386 tonnes), compared with 12,139 tonnes in Q1 2023. Production during the period benefited from strong throughput and copper recoveries.

On-site copper concentrate inventories at 30 June 2023 were approximately 7,291 tonnes (31 March 2023: 1,564 tonnes). All concentrate in stock at the beginning of the period was delivered to the port at Huelva.

Copper contained in concentrates sold was 12,858 tonnes in Q2 2023 (Q2 2022: 13,872 tonnes), compared with 12,501 tonnes in Q1 2023.

Six months operational review

Production of copper contained in concentrate during H1 2023 was 26,351 tonnes, compared with 24,847 tonnes in the same period of 2022. Payable copper in concentrates was 25,095 tonnes compared with 23,674 tonnes of payable copper in H1 2022.

Ore mined in H1 2023 was 7.4 million tonnes compared with 7.5 million tonnes during H1 2022. Ore processed was 7.8 million tonnes versus 7.5 million tonnes in H1 2022 with similar-grade stockpiles processed in both periods.

Ore grade during H1 2023 was 0.39% Cu compared with 0.38% Cu in H1 2022. Copper recovery was 87.04% versus 86.26% in H1 2022. Concentrate production amounted to 125,600 tonnes above H1 2022 production of 117,235 tonnes.

2. 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 Basis of Reporting. The Company is aware that the inflationary pressure on the goods and services required for its business and the geopolitical developments in Ukraine and its impact on energy prices may still have further effects or impact how the Company can manage it operations and is accordingly keeping its guidance under regular review. Should the Company consider the current guidance no longer achievable, then the Company will provide a further update.

Operational guidance

Guidance for Proyecto Riotinto is unchanged from previously announced outlook.

Production guidance for 2023 remains in the range of 53,000 to 55,000 tonnes of copper.

Inflationary pressures continue to impact the global mining industry. The prices of many key inputs, including diesel, tyres, explosives, grinding media and lime, increased materially in 2022 as a result of higher global energy prices and logistics constraints. Since then, prices have stabilised for certain items.

The cash cost guidance range for 2023 remains at $2.80 to $3.00/lb copper payable and the AISC guidance range remains at $3.00 to $3.20/lb copper payable. These cost guidance ranges are based on an assumed market electricity price range of €100 to 150/MWh and also include the benefit of the Company's PPA.

In addition, aggregate expenditures relating to non-sustaining capital investments (such as E-LIX Phase I, the 50 MW solar plant, Riotinto tailings facility expansion) and exploration activities are trending in line with FY2023 guidance, although the composition is expected to vary slightly including modestly higher investments in the E-LIX Phase I plant.

3. Overview of the Financial Results

The following table presents summarised consolidated income statements for the three and six months ended 30 June 2023, with comparatives for the three and six months ended 30 June 2022, respectively.

Three months financial review

Revenues for the three-month period ended 30 June 2023 amounted to €79.1 million (Q2 2022: €93.4 million). Reduced revenues in comparison to the same quarter of the previous year were mainly attributable to decreased volumes of concentrate sold and lower realised prices.

Realised prices excluding QPs were US$3.81/lb copper during Q2 2023 compared with US$4.28/lb copper in Q2 2022. The realised price during the quarter, including QPs, was approximately US$3.86/lb.

Cost of sales for the three-month period ended 30 June 2023 amounted to €57.6 million, compared with €78.2 million in Q2 2022. Unit operating costs in Q2 2023 were lower than in Q2 2022.

Cash costs of US$2.60/lb payable copper during Q2 2023 compared with US$3.12/lb payable copper in the same period last year. Lower cash costs were primarily attributed to a significant reduction in the cost of electricity (approx. €13.3 million lower) and other supply-related costs, which also included lower freight prices. AISC for Q2 2023, excluding one-off investments in the tailings dam, were US$2.89lb payable copper compared with US$3.33/lb payable copper in Q2 2022.

Sustaining capex for Q2 2023 amounted to €1.1 million compared with €2.0 million in Q2 2022. Sustaining capex mainly related to continuous enhancements in the processing systems of the plant. In addition, the Company invested €3.5 million in the project to increase the tailings dam during Q2 2023 (Q2 2022: €3.9 million). Stripping costs capitalised during Q2 2023 amounted to €2.7 million (Q2 2022: €20k).

Capex associated with the construction of the 50 MW solar plant amounted to €2.8 million in Q2 2023, while investments in the E-LIX Phase I plant totalled €5.0 million, of which €3.0 million was booked as long term loans to Lain Technologies Ltd.

Administrative and other expenses amounted to €3.6 million (Q2 2022: €0.9 million) and 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 on Atalaya's projects portfolio for the three-month period ended 30 June 2023 amounted to €2.1 million compared to €88k in Q2 2022 mainly as a result of costs incurred during the period in Proyecto Masa Valverde.

EBITDA for the three months ended 30 June 2023 amounted to €15.7 million compared with Q2 2022 of €14.7 million.

The main item below the EBITDA line is depreciation and amortisation of €9.4 million (Q2 2022: €8.8 million). In Q2 2023, net financing costs amounted to a positive €3.5 million (compared to €0.6 million in Q2 2022). This increase is mainly attributed to the interest received of €3.5 million as a result of the agreement reached with Astor on 17 May 2023.

Six months financial review

Revenues for the six-month period ended 30 June 2023 amounted to €170.2 million (H1 2022: €179.7 million).

Copper concentrate production during the six-month period ended 30 June 2023 was 125,600 tonnes (H1 2022: 117,235 tonnes) with 122,040 tonnes of copper concentrates sold in the period (H1 2022: 115,321 tonnes). Higher production levels in H1 2023 were mainly the result of robust throughput. Inventories of concentrates as at the reporting date were 7,291 tonnes (31 Dec 2022: 3,529 tonnes).

Realised copper prices, excluding QPs, for H1 2023 were US$3.90/lb copper compared with US$4.38/lb copper in the same period of 2022. Concentrates were sold under offtake agreements for the production not committed. The Company did not enter into any hedging agreements in 2023.

Cost of sales for the six-month period ended 30 June 2023 amounted to €120.6 million, compared with €133.0 million in H1 2022. Lower operating costs in 2023 were due to a reduction in input costs compared with the 2022 period, where the high cost of electricity, diesel and other supplies were the result of inflation and the geopolitical situation in Ukraine.

Cash costs of US$2.73/lb payable copper during H1 2023 compare with US$3.22/lb payable copper in the same period last year. The reduction in cash costs can be mainly attributed to a significant reduction in the cost of electricity (approx. €25.3 million lower) and other supplies, including freight prices. AISC excluding investment in the tailings dam in the six month period were US$3.00/lb payable copper compared with US$3.45/lb payable copper in H1 2022. The decrease is mainly due to the lower cash costs, although partly offset by higher capitalised stripping costs.

Sustaining capex for the six-month period ended 30 June 2023 amounted to €1.5 million, compared with €2.9 million in the same period the previous year. Sustaining capex related to enhancements in processing systems of the plant. In addition, the Company invested €6.9 million in the project to increase the tailings dam, compared with €6.4 million in 2022.

Capex associated with the construction of the 50 MW solar plant amounted to €4.5 million in H1 2023, while investments in the E-LIX Phase I plant totalled €8.4 million, of which €4.9 million was booked as long term loans to Lain Technologies Ltd.

Corporate costs for the first six-month period ended June 2023 were €5.6 million, compared with €4.5 million in H1 2022. Corporate costs mainly include the Company's overhead expenses.

Exploration costs related to Atalaya's project portfolio for the six-month period ended 30 June 2023 and amounted to €3.6 million, compared with €0.4 million, plus €1.4 million capitalised as permits in Proyecto Masa Valverde, in H1 2022.

EBITDA for the six months ended 30 June 2023 amounted to €40.1 million, compared with €41.4 million in H1 2022.

Depreciation and amortisation amounted to €18.2 million for the six-month period ended 30 June 2023 (H1 2022: €16.3 million).

Net foreign exchange gains amounted to €55k in H1 2023 (€10.1 million in H1 2022).

Net finance costs for H1 2023 amounted to positive €2.7 million (H1 2022 negative €0.9 million).

Copper prices

The average realised copper price (excluding QPs) decreased by 11% to US$3.81/lb in Q2 2023, from US$4.28/lb in Q2 2022.

The average prices of copper for the three months ended 30 June 2023 and 2022 are summarised below:

Realised copper prices for the reporting period noted above have been calculated using payable copper and excluding both provisional invoices and final settlements of quotation periods ("QPs") together. The realised price during Q2 2023, including the QP, was approximately $3.86/lb.

4. Non-GAAP Measures

Atalaya has included certain non-IFRS measures including "EBITDA", "Cash Cost per pound of payable copper", "All-In Sustaining Costs" ("AISC") "realised prices" and "Net Cash/Debt" 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.

AISC per pound of payable copper includes C1 Cash Costs plus royalties and agency fees, expenditures on rehabilitation, capitalised stripping costs, exploration and geology costs, corporate costs and recurring sustaining capital expenditures but excludes one-off sustaining capital projects, such as the tailings dam project.

Realised price per pound of payable copper is the value of the copper payable included in the concentrate produced including the discounts and other features governed by the offtake agreements of the Group and all discounts or premiums provided in commodity hedge agreements with financial institutions if any, expressed in USD per pound of payable copper. Realised prices do not include period end mark to market adjustments in respect of provisional pricing Realised price is consistent with the widely accepted industry standard definition.

5. 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 and cash flows as at 30 June 2023 and 31 December 2022.

Liquidity information

(1) Includes borrowings

Unrestricted cash and cash equivalents (which include cash at both Group level and Operation level) as at 30 June 2023 decreased to €112.6 million from €126.4 million at 31 December 2022. The decrease in cash balances is the result of net cash flow generated in the period and payment of debt to fund development of the 50 MW solar plant and other facilities. Restricted cash amounted at 31 December 2022 to €0.3 million was held in escrow, which represented funds utilized by the Company to cover interest payments of €9.6 million on 7 and 8 April 2022 (following the trial in February and March 2022) and €1.1 million on 16 May 2022 to Astor under the Master Agreement. However, due to the settlement reached with Astor on 17 May 2023 whereby Astor agreed to repay €3.5 million of interest previously paid to it to finalise the litigation, the previously restricted cash has now been released and reversed.

Borrowings have decreased by €29.5 million between 31 December 2022 and 30 June 2023, primarily as a result of repayments made on multiple fronts. These repayments include those made towards the financing of the solar plant facility, as well as the repayment of debt associated with operating facilities and the Astor facility. The company's proactive approach to its balance sheet has led to this substantial reduction in the borrowing balance, indicating improved financial management and a strengthened position for the company.

As of 30 June 2023, Atalaya reported a working capital surplus of €81.4 million, compared with a working capital surplus of €84.0 million at 31 December 2022. The main liability of the working capital is trade payables related to Proyecto Riotinto contractors and, to a lesser extent, short-term loans following the settlement of credit facilities during Q2 2023.

The decrease in working capital resulted from higher inventory levels and lower payable balances.

Overview of the Group's cash flows

Three months cash flows review

Cash and cash equivalents decreased by €6.7 million during the three months ended 30 June 2023. This was due to the net results of cash from operating activities amounting to €18.9 million, the cash used in investing activities amounting to €7.9 million, the cash used in financing activities totalling €18.9 million and net foreign exchange differences of €1.3 million.

Cash generated from operating activities before working capital changes was €14.7 million. Atalaya decreased its trade receivables in the period by €9.9 million, increased its inventory levels by €3.9 million and increased its trade payables by €0.3 million.

Investing activities during the quarter consumed €7.9 million, relating mainly to the 50 MW solar plant construction, tailings dam project, E-LIX project and continuous enhancements in the processing systems of the plant.

Financing activities during the quarter decreased by €18.9 million primarily due to the settlement of unsecured credit facilities.

Six months cash flows review

Cash and cash equivalents decreased by €13.8 million during the six months ended 30 June 2023. This was due to cash from operating activities amounting to €31.3 million, cash used in investing activities amounting to €16.7 million, cash used in financing activities amounting to €28.4 million and net foreign exchange differences of €0.1 million.

Cash generated from operating activities before working capital changes was €38.9 million. Atalaya decreased its trade payables in the period by €20.6 million, decreased its inventory levels by €0.1 million and decreased its trade receivable balances by €17.3 million.

Throughout the quarter, investing activities amounted to €16.7 million, with the majority of funds directed towards the construction of the 50 MW solar plant, the tailings dam project, the E-LIX project, and ongoing enhancements in the plant's processing systems.

Financing activities during the six-month period ended 30 June 2023 decreased by €28.4 million driven by the repayment of unsecured credit facilities.

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 mainly denominated in Euros ("EUR") which is the functional currency of the Group, 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 six months ended 30 June 2023, Atalaya recognised a foreign exchange profit of €1.3 million and €55k, respectively. Foreign exchange profits mainly related to changes in the period in 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:

6. Sustainability

Corporate Social Responsibility

The second quarter of the year marks further progress for Atalaya and its wholly owned Fundación Atalaya Riotinto as we continue to carry out several initiatives to fulfil our social responsibilities.

In this context, the neighbouring municipalities have proposed various projects to be funded by the Foundation, as part of the signed partnership agreement. This agreement aims to provide funding for collaborative efforts to address social, environmental, and infrastructure challenges. During Q2 2023, Atalaya has committed to financing the refurbishment of certain streets' pavement and infrastructure in Nerva. Additionally, in Minas de Riotinto, the Foundation will support the construction of a public playground and related facilities. Furthermore, the Foundation will provide funding for several local projects, including support for NGOs like Athenea and AFA, dedicated to assisting individuals with disabilities, as well as local social institutions such as the Centro Cultural de Nerva. The Foundation has also shown support for local football clubs and contributed to the publication of a book on the history of Cuenca Minera and its British heritage.

Furthermore, the Foundation has completed the program for local unemployed individuals: the Third Atalaya Mining Operators Course has finished its practical sessions, offering comprehensive training on various machinery. The group of 20 students has now commenced a two-month internship period with the Riotinto Mine's principal contractors. This hands-on experience will include activities like blasting and hauling, alongside formal qualifications for the participants. The previous program was a success, with nearly half of the participants now employed by different companies.

Health and Safety

The results for the first six months of 2023, compared to the same period in 2022, show similar figures for the Severity Index (0.07). However, there has been an increase in the Frequency Index to 5.79, with one of the accidents classified as a major accident.

Furthermore, during the quarter, Atalaya conducted an internal audit for health and safety management in accordance with ISO 45001:2018.

In addition, Atalaya has updated its internal procedure for controlling drugs and preventing work under the influence of psychoactive substances and has increased the fine for a positive result.

In terms of Field Leadership activity, 45 individuals have been incorporated after completing training in June.

The training plan for Atalaya employees is currently focused on basic life support and the rules of action in the event of health emergencies at the company. An information program is also scheduled for the summer months, as in previous years, to address working in high temperatures.

Environment

During the second quarter of 2023, the environmental department continued to execute actions for environmental monitoring of the company's activities and the management of the natural environment. Key points from the quarter:

· No environmental incidents were recorded at Atalaya Riotinto during this quarter.

· A total rainfall of 65.3 l/m2 was recorded in Q2 2023, which was approximately 19% higher than the same period in the previous year. The total rain collected for the hydrological year (October 2022 to September 2023) was 405.7 l/m2, which is 10% more than the rainfall recorded in the previous hydrological year during the same period.

· On 18 April 2023, the substantial modification of the Unified Environmental Authorization (Environmental permit) was granted.

· Mandatory reports were submitted to the Environmental Administration, including the Annual report of air quality in nearby towns (Minas de Riotinto, La Dehesa, and Nerva) and the Annual Water Balance Report.

· Additional measures from the action plan against dust continued to be implemented, including intensified periodic irrigation, new coordination measures, and comprehensive monitoring of the emissions generated in the operation.

· All regular internal controls of diffuse emissions into the atmosphere have been conducted, and the results are within the limit values (waiting for June results). Furthermore, Annual External Control, Point, and Diffuse Emissions monitoring were carried out in May, with results still pending. The rest of the periodic and mandatory controls have been carried out without incidents. Additionally, several reports were submitted to the Administration bodies during the quarter.

· Daily environmental inspections were performed, with a focus on chemical storage and handling, housekeeping, waste management, uncontrolled releases, and environmentally friendly practices conducted by ARM's and contractors' personnel. Regular inspections of dust control and drainage systems were also carried out. A total of 77 inspections were conducted during the second quarter, covering the plant, mine area, and the contractors' camps.

7. 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 2022.

The Company continues to monitor the principal risks and uncertainties that could materially impact the Company's results and operations, including the areas of increasing uncertainty such as inflationary pressure on goods and services required for the business and geopolitical developments in Ukraine.

8. Critical accounting policies, estimates, judgements, assumptions and accounting changes

The preparation of Atalaya's Financial Statements in accordance with IFRS requires management to make estimates, judgements 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 2022.

As at 30 June 2023, there are no significant changes in critical accounting policies or estimates to those applied in 2022.

9. Other Information

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

Atalaya will audit the Financial Statements for the period ended 30 June 2023 and the audited financial statements will be published on Atalaya's website in due course.

Unaudited interim condensed consolidated financial statements on subsequent pages.

Unaudited Interim Condensed Consolidated Income Statements

(All amounts in Euro thousands unless otherwise stated)

For the period ended 30 June 2023 and 2022

The notes on the subsequent pages are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

Unaudited Interim Condensed Consolidated Statement of Financial Position

(All amounts in Euro thousands unless otherwise stated)

As at 31 March 2023 and 2022

The notes on the subsequent pages are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

Atalaya will audit the Financial Statements for the period ended 30 June 2023 and the audited financial statements will be published on Atalaya's website in due course.

Unaudited Interim Condensed Consolidated Statements of Changes in Equity

(All amounts in Euro thousands unless otherwise stated)

For the period ended 30 June 2023 and 2022

(1) The share premium reserve is not available for distribution

The notes on subsequent pages are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

Unaudited Interim Condensed Consolidated Statement of Cash Flows

(All amounts in Euro thousands unless otherwise stated)

For to the period ended 30 June 2023 and 2022

The notes on the subsequent pages are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

Notes to the Unaudited Interim Condensed Consolidated Financial Statements

(All amounts in Euro thousands unless otherwise stated)

For the period ended 30 June 2023 and 2022

1. Incorporation and summary of business

Atalaya Mining Plc (the "Company") was incorporated in Cyprus on 17 September 2004 as a private company with limited liability under the 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 Company was listed on AIM of the London Stock Exchange in May 2005 under the symbol ATYM. The Company continued to be listed on AIM as at 30 June 2022.

On 20 February 2023, Atalaya announced that applied a voluntary delisting of its ordinary shares from the Toronto Stock Exchange (the "TSX"). Ordinary shares in the Company continue to trade on the AIM market of the London Stock Exchange under the symbol "ATYM". Delisting from the TSX took effect at the close of trading on 20 March 2023. Furthermore, Atalaya ceased to be a reporting issuer in Canadian jurisdictions on 26 June 2023.

Additional information about Atalaya Mining Plc is available at www.atalayamining.com as per requirement of AIM rule 26.

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

Atalaya is a European mining and development company. The strategy is to evaluate and prioritise metal production opportunities in several jurisdictions throughout the well-known belts of base and precious metal mineralisation in Spain, elsewhere in Europe and Latin America.

The Group has interests in four mining projects: Proyecto Riotinto, Proyecto Touro, Proyecto Masa Valverde and Proyecto Ossa Morena. In addition, the Group has an earn-in agreement to acquire three investigation permits at Proyecto Riotinto Este.

Proyecto Riotinto

The Company owns and operates through a wholly owned subsidiary, "Proyecto Riotinto", an open-pit copper mine located in the Iberian Pyrite Belt, in the Andalusia region of Spain, approximately 65 km northwest of Seville. A brownfield expansion of this mine was completed in 2019 and successfully commissioned by Q1 2020.

Proyecto Touro

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. Proyecto Touro is currently in the permitting process.

In November 2019, Atalaya executed the option to acquire 12.5% of Explotaciones Gallegas del Cobre, S.L. the exploration property around Touro, with known additional reserves, which will provide high potential to the Proyecto Touro.

Proyecto Masa Valverde

On 21 October 2020, the Company announced that it entered into a definitive purchase agreement to acquire 100% of the shares of Cambridge Mineria España, S.L. (since renamed Atalaya Masa Valverde, S.L.U.), a Spanish company which fully owns the Masa Valverde polymetallic project located in Huelva (Spain). Proyecto Masa Valverde is currently in the permitting process.

Proyecto Riotinto East

In December 2020, Atalaya entered into a Memorandum of Understanding with a local private Spanish company to acquire a 100% beneficial interest in three investigation permits (known as Peñas Blancas, Cerro Negro and Herreros investigation permits), which cover approximately 12,368 hectares and are located immediately east of Proyecto Riotinto.

Proyecto Ossa Morena

In December 2021, Atalaya announced the acquisition of a 51% interest in Rio Narcea Nickel, S.L., which owns 17 investigation permits. The acquisition also provided a 100% interest in three investigation permits that are also located along the Ossa- Morena Metallogenic Belt. In Q3 2022 Atalaya increased its ownership interest in POM to 99.9%, up from 51%, following completion of a capital increase that will fund exploration activities.

2. Basis of preparation and accounting policies

2.1 Basis of preparation

(a) Overview

These condensed interim financial statements are unaudited.

The unaudited interim condensed consolidated financial statements for the period ended 30 June 2023 have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting. IFRS comprise the standard issued by the International Accounting Standard Board ("IASB"), and IFRS Interpretations Committee ("IFRICs") as issued by the IASB. Additionally, the unaudited interim condensed consolidated financial statements have also been prepared in accordance with the IFRS as adopted by the European Union (EU), using the historical cost convention and have been prepared on a historical cost basis except for the revaluation of certain financial instruments that are measured at fair value at the end of each reporting period, as explained below.

These unaudited interim condensed consolidated financial statements 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 Company and the Group for the year ended 31 December 2022. These unaudited interim condensed consolidated financial statements do not include all 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 annual report for the year ended 31 December 2022.

(b) Going concern

These unaudited condensed interim consolidated financial statements have been prepared based on 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 will generate sufficient cash and cash equivalents to continue operating for the next twelve months.

Management continues to monitor the impact of geopolitical developments. Currently no significant impact is expected in the operations of the Group.

2.2 New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the unaudited condensed interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2022, except for the adoption of new standards effective as of 1 January 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments and interpretations apply for the first time in 2023, but do not have a material impact on the unaudited condensed interim consolidated financial statements of the Group.

IFRS 17 Insurance Contracts

In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. IFRS 17 replaces IFRS 4 Insurance Contracts that was issued in 2005. IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features; a few scope exceptions will apply. The overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. IFRS 17 is based on a general model, supplemented by:

· A specific adaptation for contracts with direct participation features (the variable fee approach)

· A simplified approach (the premium allocation approach) mainly for short-duration contracts

The amendments had no impact on the Group's unaudited condensed interim consolidated financial statements.

Definition of Accounting Estimates - Amendments to IAS 8

The amendments to IAS 8 clarify the distinction between changes in accounting estimates, and changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates.

The amendments had no impact on the Group's unaudited condensed interim consolidated financial statements.

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments had no impact on the Group's unaudited condensed interim consolidated financial statements. but are expected to affect the accounting policy disclosures in the Group's annual consolidated financial statements.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12

The amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities. The amendments had no impact on the Group's unaudited condensed interim consolidated financial statements.

2.3 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 other 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.

Fair value measurements recognised in the 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).

2.3 Fair value estimation

2.4 Critical accounting estimates and judgements

The preparation of the unaudited interim condensed consolidated financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the date of the consolidated financial statements. Estimates and assumptions are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

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.

A full analysis of critical accounting estimates and judgements is set out in Note 3.3 of the 2022 audited financial statements.

3. Business and geographical segments

Business segments

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

Copper concentrates produced by the Group are sold to three off-takers as per the relevant offtake agreements. In addition, the Group has spot agreements for the concentrates not committed to off-takers.

Geographical segments

The Group's mining activities are located in Spain. The commercialisation of the copper concentrates produced in Spain is carried out through Cyprus. Sales transactions to related parties are on arm's length basis in a similar manner to transaction with third parties. Accounting policies used by the Group in different locations are the same as those contained in Note 2.