Atalaya Mining Regulatory News (ATYM)

EMED MINING QUARTERLY OPERATIONAL UPDATE

6 Oct 2011

EMED Mining Public Limited (AIM: EMED, TSX: EMD) ("EMED Mining" or "the Company"), the Europe-based minerals development and exploration company, announces today the following operational update for the three-month period ended 30 September 2011. The full Quarterly Report, including consolidated Financial Statements and the Management Discussion and Analysis, will be issued on or before 14 November 2011.

Key Points

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

"In Spain, as part of the standard local permitting process, we submitted to the authorities on 01 September the additional documentation which addressed regulatory requests and conditions relating to the Rio Tinto Mine. Informal exchanges are on-going, to address matters requiring clarification and minimise delays.

"We continue to strive for the achievement of critical permitting stages in 2011, formal access to all required project lands in mid-2012 and for commissioning to start in late 2012, at which stage the Rio Tinto Mine will create over 1200 new direct employment opportunities and more indirect jobs.

"As regards the project economics and financing, it is notable that the recent pull-back of US$ copper prices has been cushioned in Euro terms by concurrent exchange rate movements. And project financing term sheets are being refined so that mandates can be awarded in Q4-2011.

"Our plans for operating the Rio Tinto Mine continued to be refined during the quarter in response to the feedback from the Junta de Andalucia. Improvements now also include the environmental rehabilitation of areas left contaminated by previous operators since 1982 and enhanced water treatment in line with new river management policies. Being a bigger project covering an enlarged land footprint, the enhanced project not only provides for a better environmental outcome but now also provides room for extension of the project life by facilitating conversion of resources to reserves in the Cerro Colorado open pit as well as the anticipated development of underground deposits on the property. These aspects will be outlined in the current quarter.

"A sensitive matter for planning has been the tailings dams and tailings disposal aspects and, in this regard, the Company is pleased to report that it has from the outset committed to improvements which introduce European Union Standard tailings thickening and acid mine drainage protection systems. And to reinforce public safety the Company has contracted the original design engineers, leading Spanish firm EPTISA, to oversee the design and supervision of dam extensions during the initial 14-year project life. EMED Mining intends to also examine in-pit backfilling for tailings disposal beyond the already-planned extraction of initial copper reserves.

"At the Rio Tinto site the first major section of the processing plant, the primary crusher, has been cleaned up and readied for powering-up and testing without materials feed.

"In Slovakia, we have had a very successful exploration program and completed this year's deep drilling at the Biely Vrch gold deposit. The latest drill hole DVE-52 returned an encouraging 783 metres at 0.84g/t from surface which is three times the depth of current reported resources. We are deferring further fieldwork at Biely Vrch in order to revisit pit design in light of this and other drill results and in consideration of the gold price which, at approximately $1,600/oz gold, is now double that assumed in the initial conceptual pit design. Most importantly we are also concurrently progressing our Mining Lease application.

"On the corporate news front, the Directors are pleased to welcome Dr. Jose Nicolas Sierra Lopez as non- executive Director of EMED Mining as from today. Doctor Sierra brings to the Company over 30 years ' experience as a mining and energy leader in the business and government sectors, including Spain's national Director General of Mines and Construction Industries and, for the European Commission, EU Director for Fossil Fuels."

Rio Tinto Copper Mine - Spain

·; In March 2011 the Industry Minister cleared legal legacy issues and in April 2011 two of three regulatory departments (Industry and Environment) set out requests and conditions on technical, economic and social aspects as regards the project submitted in mid-2010.

·; In May 2011 the Company outlined its package of responses to these requests and proceeded into informal reviews with the authorities in July and August, submitting the restoration plan for the enlarged land footprint on 1 September as requested.

·; Once conditionally approved, this enlarged restoration plan is expected to follow a series of steps we expect will be shortly confirmed by the regulatory authorities leading to the approval of Administrative Standing. This allows various physical activities and expropriation processes.

·; In May 2011, the third regulatory department (Culture and Heritage) issued its formal approval for the project and this will be updated for the enlarged restoration plan in due course.

·; Copper prices are today lower than at the end of the last quarter, falling from just over $4.30/lb (approximately $9,000/tonne) to just over $3.30/lb (approximately $7,000/tonne). The impact on project economics of this decline in the US$ copper price has been mostly offset by the weakening of the Euro against the dollar, resulting in the copper price decreasing from €3.00/lb (approximately €6,600/tonne) to just over €2.50/lb (approximately €6,000/tonne).

·; At today's prices and exchange rates the Rio Tinto Copper Mine's projected net operating cash flow exceeds our base case assumptions and is an attractive opportunity to quickly achieve profitability at the same time as pursuing opportunities for rapid growth within the Iberian Peninsula and elsewhere in the European region, from the operating headquarters in Rio Tinto.

·; At mine site improper interference by competing local private companies has resulted in the authorities enforcing control of the tailings dams by EMED Mining's local wholly-owned subsidiary. Officers of these private companies are being prosecuted for various offences.

Detva Gold Project - Slovakia

·; The second of two planned deep drill holes at the Biely Vrch deposit was consistently mineralised from surface to a depth of 783m, averaging 0.84g/t gold over that interval and included several higher grade zones.

·; EMED Mining is progressing community consultation, environmental studies, and the approvals required for the proposed open-pit mine at Biely Vrch producing ~60,000 ounces of gold per year at an average cash cost of ~US$530/ounce. The pit design will be further optimised.

Corporate

Dr Jose Nicolas Sierra Lopez (age 73) has joined the Board of EMED Mining as non- executive Director. Doctor Sierra brings to the Company over 30 years ' experience as a mining and energy leader in the business and government sectors, including serving as Spain's national Director General of Mines and Construction Industries, Vice Chairman and CEO of E.N. Adaro, Executive Chairman of CARBOEX, and, for the European Commission, EU Director for Fossil Fuels. More recently he was a Commissioner at the CNE (National Energy Commission of Spain). Dr Sierra holds a Doctorate degree from the School of Mines of Madrid, DIC from the Imperial College of London, and PADE in business administration from IESE.

Cash on hand is €12 million which reflects an average year-to-date spending rate of €1 million per month. The Company is discussing refining indicative terms sheets with project financiers so that financing mandates can be awarded in Q4-2011 for start-up funding in 2012. 

In Spain, the Company's Rio Tinto Copper Mine provides an excellent opportunity to bring a large copper mine back into production at a relatively low total cost as it already has an established open-pit mine, processing plant and other infrastructure.

In Slovakia, the Biely Vrch deposit at the Company's Detva Gold Project is a potential greenfields development of an open-pit gold mine.

EMED Mining has earlier-stage activities in Cyprus and Portugal, as well as via 19%-owned associate KEFI Minerals which operates early-stage exploration joint ventures in the Kingdom of Saudi Arabia and Turkey and is investigating a joint venture opportunity in Morocco.

EMED Mining is managed by a well-qualified, multi-cultural team drawn initially from Australia and the Americas and is now mainly comprised of Spanish citizens. The main priority for the short term is to safely and efficiently start copper production at the Rio Tinto Mine once EMED Mining has completed the regulatory approvals, financed the start-up and obtained shareholder approval.

EMED Mining, via its wholly-owned subsidiary EMED Tartessus, owns 100% of the Rio Tinto Copper Mine in Andalucía, Spain. The Company is the owner of the mine, the mineral rights and the processing plant and is complying with all regulatory requirements to be awarded Administrative Standing (or "Titularidad Administrativa") so that the project can proceed.

As detailed in a NI 43-101 Technical Report1, key anticipated production parameters for the Rio Tinto Copper Mine are:

·; Ramp-up to a 9 million tonne per annum ("tpa") throughput over a two-year period;

·; Open-pit mine with average waste-to-ore strip ratio of 1.1 to 1;

·; Contained copper-in-concentrate averaging ~37,000 tpa;

·; Average cash costs of C1 = US$1.37/lb (cash operating costs ) and C3 = US$1.57/lb (total costs including operating, capital and closure costs);

·; Measured and Indicated Resources = 203 million tonnes at 0.46% copper, containing 933,000 tonnes of copper (inclusive of Ore Reserves);

·; Ore Reserves = 123 million tonnes at 0.49% copper, containing 606,000 tonnes of copper; and

·; Mine life > 14 years.

The following aspects of the project will require refinement when permitting conditions are finalised and after expansion opportunities are fully assessed and prioritised:

·; The extra project costs to be incurred as a result of environmental restoration of the agreed enlarged land footprint;

·; Ore Reserves (Proven and Probable - 123 million tonnes at 0.49% copper, containing 606,000 tonnes of copper) are currently based on a cut-off grade of 0.2% copper which was derived using a copper price of $2.00/lb ($4,400/tonne). In due course, this needs re-optimisation in light of the planned drilling within the open pit;

·; Mineral Resources (Measured plus Indicated - 203 million tonnes at 0.46% copper, containing 933,000 tonnes of copper) which was derived using a copper price of $3.00/lb ($6,600/tonne) for the Cerro Colorado open pit. This needs updating in light of the planned drilling of the open pit and the underground deposits on the property, and

·; Drilling can commence on the grant of Administrative Standing.

Steps to Restart Copper Production

The steps to restarting production at the Rio Tinto Copper Mine are briefly summarised as follows:

·; Conditional approval of the enlarged restoration plan;

·; Administrative Standing and triggering formal procedures for occupation of third party lands which are zoned for mining and now form part of the planned project, particularly from an environmental management and rehabilitation viewpoint;

·; Commencement of personnel training programs and drilling programs for extending mine life;

·; Formal approval of the final project details;

·; Shareholder and financier approvals of the final project details;

·; Triggering the restart project execution program, upon receipt of formal land access rights;

·; Appointment and induction of the workforce and contractors;

·; Construction permits and operating licences to be issued as project execution proceeds and commissioning is carried out;

·; Eighteen-month ramp-up of production to the base case rate of processing 9 million tpa of ore and 37,000 tpa copper-in-concentrate; and

·; Concurrent assessment of project extension or expansion opportunities, based largely on the results of drilling in the vicinity of the existing open pit and underground mines.

The restart is expected to be straightforward from an operational perspective, with an established infrastructure and processing facility that can be readily restarted, albeit with aspects to be updated to incorporate mining industry improvements that have been developed over the past 20 years.

EMED Mining is conducting project engineering so that commissioning can commence in 2012, subject to the timing of project permitting, formalised access rights to adjoining lands, finance and shareholder approval.

Interference by Third Parties

Summary of Interference: The Company and its personnel have, since 2008, been subjected to, a campaign led by Mr Carlos Estévez, a shareholder and former manager of the previous owner Minas de Rio Tinto ("MRT"), that appears to have the objective of gaining financial compensation in exchange for his desisting from striving to undermine the Company's ability to progress the Rio Tinto Copper Mine. This individual has been banned by the Junta de Andalucia from holding the position of Director Facultativo (registered engineer) and is being prosecuted by his former colleagues, his financiers and by EMED Mining.

Interference has taken various forms including forgery, fraud, vandalism, defamatory smear-campaigns, publicly threatening lawsuits and the promotion of frivolous allegations and accusations to the Company's shareholders, corporate advisers and to regulatory authorities in Spain and corporate regulators in England and Canada.

Tailings Dams Repairs and Maintenance: The co-owners of sections of the tailings dams, Rumbo 5-Cero SL ("Rumbo 50") and Construcciones Zeitung SL ("Zeitung") have recently overtly collaborated with Mr Estevez and interfered with the Company's maintenance of public safety. Since August 2011 these third parties have intermittently obstructed the repairs and maintenance at the tailings storage facilities. As a result of the intervention of the police, the Court has issued an order by which the Company continues to carry out all care and maintenance activities on site, in accordance with various resolutions from the Andalucia Government. The crown prosecutor has requested a 9 month prison term for one of the interferers' personnel and several other prosecutions are in progress.

Water Discharges: During 2010, third party allegations triggered a statement of objection initiated by the Andalucían Water Authority in respect of alleged unauthorized discharges from the Rio Tinto Copper Mine site. Initial claims against the Company have since been judicially dismissed as events of force majeure due to heavy rainfall combined with lack of permits to do anything with the water other than a controlled release. It is expected that all other judicial claims and the administrative file open against the Company will be dismissed in due course.

Liens against Company property: At the time the Company acquired the Rio Tinto Copper Mine there existed several pre-existing liens registered on the project's various land plots.

The only significant lien was with the Department of Social Security and that has been settled.

There are some others which are irrelevant or immaterial. There was also one annotation on title representing a request for the registration of another lien for approximately €2.5 million, which has now been rejected by the court.

Former Employees: Claims by former employees for additional termination payouts have been judicially rejected. 

Summary: The Company has no obligations to Mr Estevez, MRT or that company's former personnel and creditors. It does however have an obligation to offer fair compensation to the landowners Rumbo50 and Zeitung based on recently updated independent valuations. If we are unable to settle by private treaty, the Company intends to avail itself of the procedures for provisional occupation and expropriation which would be triggered upon the Government's formal approval of our Administrative Standing.

EMED Mining is progressing its 100%-owned Biely Vrch gold deposit, which contains Indicated Resources of 461,000 ounces (17.7 million tonnes at 0.81g/t gold) and Inferred Resources of 596,000 ounces (24.0 million tonnes at 0.77g/t gold).

A revised Scoping Study completed by AMC Consultants (UK) Ltd in June 2010 confirmed the attractive economics of developing a mine at Biely Vrch based on a gold price of US$800/ounce (currently ~US$1,600/ounce). The envisaged project has the following parameters:

·; Initial capital cost of ~US$64 million

·; 3 million tonne per annum, heap-leach operation;

·; Open-pit mine with average waste-to-ore strip ratio of 0.84 to 1;

·; Mine plan tonnage of 27.5 million tonnes at 0.86g/t gold, containing 756,000 ounces of gold;

·; Overall gold recoveries averaging 81%; and

·; Annual gold production of 60,000 ounces at an average C1 cash cost of ±US$530/ounce;

The Scoping Study is preliminary in nature and includes Inferred Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as ore reserves, and there is no certainty that the preliminary assessment will be realised.

In November 2010, Behre Dolbear International Ltd completed the report entitled "Amended and Restated NI 43-101 Technical Report on the Biely Vrch Gold Deposit, Detva Licence Area in Slovakia" dated November 17, 2010.

Deep Drilling Program at Biely Vrch

During 2011, EMED Mining has completed two deep drill holes at Biely Vrch to test the potential for economic gold mineralisation at depth.

Drillhole DVE-52 was completed at Biely Vrch during the quarter and assays for the entire hole have recently been received (see Appendix).

This drill hole was 783m long, inclined at 72 degrees to the south, mineralised from surface throughout its length and averaged 0.84g/t gold. Several higher grade zones were intercepted:

Detva Gold Project Permitting

In parallel with progressing the required permitting studies and approvals for Biely Vrch, EMED Mining is working towards reaching various agreements with local parties directly impacted by the potential development.

The permitting process for Biely Vrch has advanced to being granted Protective Deposit Status over the Biely Vrch gold deposit and the Company has applied for a Mining Lease. In preparation for the subsequent permitting step, EMED Mining and its environmental consultants are preparing the Preliminary Environmental Impact Assessment for Biely Vrch. In addition, a series of community briefings and consultations are being conducted in the local towns and villages, the need for which has been reinforced by recent opposition by anti-mining lobby groups.

In September 2010, EMED Mining obtained an exclusive option to acquire the Regua Tungsten Deposit which is located 400km north of Lisbon and 95km east of Porto. The deposit has not been previously mined and is located close to infrastructure with good road access.

EMED Mining has completed initial planned drilling aimed at extending known mineralisation and will then complete its assessment of the property and decide whether or not to exercise its purchase option.

Information in this report as regards the Rio Tinto Mine that relates to Mineral Resource estimates is based on information compiled by Mr. Pat Stephenson, BSc (Geology) and Mr. Ron Cunneen, BSc (Geology), with Mr. Stephenson taking responsibility for the Mineral Resource estimates and Mr. Cunneen taking responsibility for the data on which the estimates are based.

Mr. Stephenson is Regional Manager, Vancouver and Principal Geologist with AMC Mining Consultants (Canada) Ltd and a full-time employee of that company. He is a Fellow of The Australasian Institute of Mining and Metallurgy.

Mr. Cunneen is Head of Exploration for EMED Mining and a full-time employee of that company. He is a Member of The Australian Institute of Geoscientists.

Information in this report as regards the Rio Tinto Mine that relates to Ore Reserve estimates is based on information compiled by Mr. Andy Robb, BSc (Mining Engineering). Mr. Robb is Principal Mining Consultant with AMC Consultants and a full-time employee of that company. He is a Member of the Australasian Institute of Mining and Metallurgy.

Mr. Stephenson, Mr. Cunneen and Mr. Robb have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activities which they are undertaking to qualify as "Competent Persons" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" ("JORC Code") and "Qualified Persons" as defined in the "National Instrument 43-101 of the Canadian Securities Administrators" ("NI 43-101") and "CIM Definition Standards For Mineral Resources and Mineral Reserves" of December 2005 as prepared by the CIM Standing Committee on Reserve Definitions of the Canadian Institute of Mining.

Mr. Stephenson, Mr. Cunneen and Mr. Robb consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Information in this report regarding the Rio Tinto Mine that relates to San Dionisio mineralisation is based on information compiled by the on-site geological team and overseen by Mr. Cunneen.

References in this report as regards the Mineral Resources or exploration results and potential in Slovakia, Cyprus or elsewhere have been approved for release by Mr. Ron Cunneen.

Certain information contained in this report, including any information on EMED Mining's plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. EMED Mining cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of EMED Mining to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of EMED Mining, as well as those factors discussed in the section entitled "Risk Factors" in the Company's annual information form dated 31 March 2011 which has been filed under the Company's corporate profile at www.sedar.com.

Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell EMED Mining securities.

The collar location of drill hole DVE 52 was WGS 84 UTM 34 grid: N 5 379 908.6; E 379 973.3. The dip of the hole was -72° and azimuth was 175° true; 170° magnetic. The following table lists the assays received for each interval analysed to date.

EMED Mining is listed on AIM (Code: EMED) and the TSX (Code:EMD)

Enquiries:

Investors/Media: Harry Anagnostaras-Adams +357 9945 7843

In North America : Andreas Curkovic +1 416-577-9927

General: Cyprus office: +357 2244 2705, Email: info@emed-mining.com