TIDMATYM
RNS Number : 1370J
Atalaya Mining PLC
07 September 2016
Atalaya Mining Plc
("Atalaya" or the "Company")
Half Yearly Financial Statements
Atalaya Mining plc (AIM:ATYM, TSX:AYM), the European mining and
development company, announces its unaudited quarterly and interim
results for the three and six months to June 30 2016, together with
the unaudited, condensed interim consolidated financial
statements.
The complete unaudited, condensed half yearly financial
statements displayed below, are also available under the Company's
profile on SEDAR at www.sedar.com and on the Company's website at
www.atalayamining.com
Period Highlights
-- The Expansion Project was declared mechanically complete
during the first week of May 2016, ahead of schedule and under
budget.
-- The ramp-up process progressed according to plan. Copper
production increased by 10% in Q2 2016 to 4,442 tonnes, compared
with 4,048 tonnes in Q1 2016. The 10% increase in production during
the second quarter was significant considering the plant was
temporarily shut down as a result of both the tailings discharge
suspension by the Junta de AndalucĂa and the interruptions required
to commission the Expansion Project.
-- 1.3 million tonnes of ore were processed, compared with 1.1
million tonnes during Q1 2016, representing a 15% increase.
Production levels in June 2016 increased to an annualised rate of
6.8Mtpa, in line with the ramp-up schedule. This trend continued in
August 2016 with annualised rate equivalent to 8.3Mtpa.
-- Copper grade in the final concentrate was consistent with the
previous quarter, reporting 21.43% in Q2 2016 as compared to 21.33%
for Q1 2016. Recoveries were lower at 80.46% during Q2 2016,
compared with 84.26% during Q1 2016. Recoveries increased back to
over 84% during July and August, which is the expected rate of the
new flotation circuit.
-- Atalaya announced commercial production in February 2016 with
revenues of EUR17.7 million and EUR22.6 million for the three
months and six months period, respectively. Negative EBITDA of
EUR1.1 million and EUR3.6 million was recorded for the three months
and six months period respectively. EBITDA values were
significantly impacted by ramp-up of production but have improved
in Q2 2016 as compared to Q1 2016 and are expected to improve
further in Q3 2016.
-- The average market prices of copper for the three and six
months ended 30 June 2016 amounted to US$2.21/lb for the second
quarter and US$2.16/lb for the six months. The Company's realised
copper prices for the same periods were US$2.11/lb and US$2.06/lb
respectively. As commercial production was declared in February
2016, no comparative operational data was available for 2015.
-- Operating cash costs per pound of payable copper were
negatively impacted by the normal ramp-up process and the temporary
suspension. Cash costs for Q2 2016 were $2.36/lb whereas for H1
2016 were $2.31/lb. These costs are projected to come down as
nameplate capacity is reached and steady state production is
achieved.
-- Inventories of concentrates at 30 June 2016 amounted to EUR6.2 million.
-- Capital expenditure for the six months ending 30 June 2016 amounted to EUR17.1 million.
-- Astor case - Atalaya continues to work closely with its legal
advisors in preparing for trial at the High Court of Justice in
London, with the date for the trial having been set for 30 January
2017. Atalaya remains confident of a positive outcome of the
upcoming trial and will update shareholders following the trial, or
if there are any material developments in the meantime.
Events after the reporting period
-- The Company announced the appointment of Cesar Sanchez as Group Chief Financial Officer.
-- An updated Reserves and Resources statement was released
indicating a 12% increase in contained reserves and extended life
of mine to 16.5 years.
-- BMO Capital Markets Limited was appointed as Joint Corporate Broker.
-- On 5 September 2016, the Company announced the completion of
a US$14 million prepayment funding facility with Transamine Trading
S.A. The facility covers part of the Group's short term working
needs in order to support itself through the ramp-up phase. The
Group continues to work on alternative funding solutions to improve
its balance sheet and its working capital position during the
ramp-up period to full expanded production.
Alberto Lavandeira, CEO commented:
"We continue to be satisfied with the rapid progress of the
successful commissioning of the plant expansion. The Company
experienced a couple of isolated operational incidences that
together with the weak copper price have adversely affected the
operations and results. We nevertheless remain confident that with
the ramp up of the expansion and with steady throughput being
rapidly achieved, the Company is moving to positive cash generation
in the coming months. We continue to remain bullish on the long
term outlook for copper."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Contacts:
+34 959 59
Atalaya Mining plc Roger Davey / Alberto Lavandeira 28 50
---------------------------- ---------------------------------- ------------
Canaccord Genuity (NOMAD Henry Fitzgerald-O'Connor +44 20 7523
and Joint Broker) / Martin Davison 8000
---------------------------- ---------------------------------- ------------
BMO Capital Markets (Joint Jeffrey Couch/Neil Haycock/Tom +44 20 7236
Broker) Rider 1010
---------------------------- ---------------------------------- ------------
ATALAYA MINING PLC
MANAGEMENT'S REVIEW AND
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
30 JUNE 2016
(UNAUDITED)
Notice to Reader
The accompanying unaudited condensed interim consolidated
financial statements of Atalaya have been prepared by and are the
responsibility of Atalaya's management. The unaudited, condensed
interim consolidated financial statements have not been reviewed by
Atalaya's auditors.
Introduction
This report provides an overview and analysis of the financial
results of operations of Atalaya Mining plc and its subsidiaries
("Atalaya" and/or the "Group"), to enable the reader to assess
material changes in the financial position between 31 December 2015
and 30 June 2016 and results of operations for the three and six
months ended 30 June 2016 and 2015.
This report has been prepared as of 6 September 2016. The
analysis, hereby included, is intended to supplement and complement
the unaudited, condensed, consolidated financial statements and
notes thereto ("Financial Statements") as at and for the three and
six months ended 30 June 2016. 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 2015, and the unaudited, condensed
consolidated financial statements for the three months ended 31
March 2016. These documents can be found on the Atalaya website at
www.atalayamining.com.
Atalaya prepares its Financial Statements in accordance with
International Financial Reporting Standards ("IFRSs"). 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 constitutes 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. Highlights - three and six months ended 30 June 2016
Operational performance
-- The expansion project was declared mechanically complete
during the first week of May 2016, ahead of schedule and under
budget.
-- Copper production increased by 10% in Q2 2016 to 4,442
tonnes, compared with 4,048 tonnes in Q1 2016. The increase in
production was significant considering the plant was temporarily
shut down due to the administrative tailings discharge suspension
and interruptions required to commission the expansion project.
-- 1.3 million tonnes of ore were processed compared with 1.1
million tonnes during Q1 2016, representing a 15% increase.
-- Ramp-up of production is continuing as planned, with the
plant now running at 8.3 Mtpa with accumulated production for July
and August being 26% higher than Q2 2016. Full plant throughput
rate of 9.5 Mtpa expected to be achieved by the end of 2016.
-- Copper grade in final concentrate remained consistent at
21.43% while recoveries decreased to 80.46% during Q2 2016,
compared with 84.26% in Q1 2016. Recoveries increased back and
continued to average over 84% in July and August.
-- An updated Reserves and Resources statement was released
following the end of Q2 2016, indicating a 12% increase in
contained reserves and extended life of mine to 16.5 years.
Financial performance
-- Atalaya announced commercial production in February 2016 with
revenues of EUR17.7 million and EUR22.6 million for the three
months and six months period, respectively.
-- Negative Earnings Before Interest, Taxation, Depreciation and
Amortisation ("EBITDA") of EUR1.1 million and EUR3.6 million for
the three months and six months period respectively. EBITDA values
were significantly impacted by ramp-up of production but have
improved in Q2 2016 as compared to Q1 2016.
-- Inventories of concentrates at 30 June 2016 amounted to EUR6.2 million.
-- Capital expenditure for the six months period ended on 30
June 2016 amounted to EUR17.1 million.
1. Highlights - three and six months ended 30 June 2016 (continued)
Funding
-- On 5 September 2016, Atalaya announced the completion of a
US$14 million prepayment funding facility with Transamine Trading
S.A. The facility covers part of Atalaya's short term working needs
in order to support itself through the ramp-up phase. Atalaya
continues to work on alternative funding solutions to improve its
balance sheet and its working capital position during the ramp-up
period to full expanded production.
2. Overview of operational results
The following table presents a summarised statement of
operations for the three and six months ended 30 June 2016. As
commercial production was declared in February 2016, no operational
data was available for 2015.
Three months Three months Six months Six months
ended ended ended ended
Unit 30 June 30 June 2015*** 30 June 30 June
2016* 2016** 2015***
Ore mined T 1,340,492 n/a 2,474,253 n/a
Ore processed T 1,308,780 n/a 2,442,728 n/a
Copper ore grade % 0.44 n/a 0.44 n/a
Copper concentrate grade % 21.43 n/a 21.38 n/a
Copper recovery rate % 80.46 n/a 82.20 n/a
Copper concentrate DMT 20,727 n/a 39,897 n/a
Copper contained in concentrate FMT 4,442 n/a 8,489 n/a
Payable copper contained
in concentrate FMT 4,287 n/a 8,283 n/a
Cash cost per lb of payable
copper $/lb 2.36 n/a 2.31 n/a
Note: The numbers in the above table may slightly differ between
them due to roundings.
* Quarterly operation data compared to prior quarter. Commercial
production started in February 2016.
** For comparison purposes, the six months figures include
pre-commissioning production for January 2016.
*** There were no operations in 2015.
Expansion Project
During the first week of May 2016, the expansion project was
declared mechanically complete, ahead of schedule and under budget.
Commissioning of the new equipment and subsequent handover to the
operations team took place during the latter part of the quarter.
Production levels increased to an annualised rate of 6.8 Mtpa in
June, in line with the ramp-up schedule. This trend has continued
and the annualised rate achieved during August was equivalent to
8.3 Mtpa.
Phase 1 of the plant ramp-up was performing well at the start of
the quarter before operations were temporarily suspended by the
Junta de AndalucĂa. During the suspension period, which was lifted
on 4 May 2016, the site team integrated the new expansion equipment
into the existing Phase 1 section, which then allowed commissioning
and ramp-up to move continuously through May.
Mining and Processing
Copper production increased by 10% during Q2 2016 to a total of
4,442 tonnes compared with 4,048 tonnes during Q1 2016. The
increase was adversely impacted by the temporary operational
suspension due to the tailings discharge issue as well as the
interruptions required to connect the Expansion of the plant to the
Phase 1 Project. Copper grade in the final concentrate was
consistent with the previous quarter, reporting 21.43% in Q2 2016
as compared to 21.33% for Q1 2016. Recoveries were lower at 80.46%
during Q2 2016, compared with 84.26% during Q1 2016. Recoveries
increased back to over 84% during July and August, which is the
expected rate of the new flotation circuit.
A total of 1,308,780 tonnes of ore was processed during Q2 2016,
compared with 1,133,948 tonnes during Q1 2016. A total of 1,343,400
cubic metres of waste was removed during Q2 2016 compared with
935,452 cubic metres during Q1 2016. The accumulated cash cost per
lb of payable copper for the six months period of $2.31/lb was
impacted by the cost scale of an expanded plant, but with lower
production levels and a temporary stoppage of production in Q2
2016.
Ramp-up of production is progressing as planned, with the plant
now running at 8.3 Mtpa annualized capacity and having produced
3,175 tonnes of copper during August. This is approximately a 30%
improvement over July`s production of 2,442 tonnes of copper.
Accumulated production for July and August 2016 is already 26%
higher than the production of the second quarter of 2016, and is an
indication of the good progress of the ramp-up of the Expansion
Project that is expected to be working at full capacity by the end
of 2016.
Exploration and Geology
Following the end of Q2 2016, a Reserves and Resources statement
was released on 14 July 2016. Total open-pit mineral reserves have
increased from 123 million tonnes at 0.49% Cu to 153 million tonnes
averaging 0.45% Cu using variable, declining cut-off grades,
representing a 12% increase in contained metal. Total open-pit
Measured and Indicated Mineral Resources were estimated at 193
million tonnes averaging 0.43% Cu, compared with the previous
estimate of 203 million tonnes at 0.46% Cu. Inferred Mineral
Resources increased to 23 million tonnes averaging 0.48% Cu, from 2
million tonnes at 0.50% Cu.
An exploration drilling campaign has been initiated during the
quarter to evaluate historical mineral resources around both the
Corta Atalaya and Filon Sur pits.
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
Introduction note of this report.
Operations
The Riotinto Project operational guidance for 2016 is as
follows:
Range
Unit 2016
Ore processed T million 6.7 - 7.1
115,000 -
Concentrate DMT 130,000
Contained copper T 23,500 - 27,000
The average head grade for 2016 is expected to be between 0.48%
Cu and 0.50% Cu with a recovery rate of approximately 80%. Cash
operating cost is expected to be within $2.05/lb to $2.20/lb of
payable copper in the second half of the year.
3. Overview of the financial results
The following table presents a summarised consolidated income
statements for the three and six months ended June 2016 with
comparatives for the three and six months ended June 2015.
Three Three Six months Six
months months ended months
ended ended 30 June ended
30 June 30 June 2016 30 June
2016 2015 2015
--------- --------- ----------- ---------
(Euro 000's)
Sales 17,723 - 22,619 -
Total operating costs (17,799) - (22,852) -
--------- --------- ----------- ---------
Gross loss (76) - (233) -
Administrative expenses (2,402) (649) (5,214) (1,736)
Care and maintenance expenses - (746) - (4,961)
Exploration expenses (517) (42) (679) (90)
--------- --------- ----------- ---------
Operating loss (2,995) (1,437) (6,126) (6,787)
Other income 15 16 25 102
Net foreign exchange loss (183) (1,735) (277) (4,922)
Net finance cost (45) (2,019) (81) (4,228)
--------- --------- ----------- ---------
Loss before tax (3,208) (5,175) (6,459) (15,835)
Tax (6) - (12) -
--------- --------- ----------- ---------
Loss for the period attributable to
owners of the parent (3,214) (5,175) (6,471) (15,835)
========= ========= =========== =========
As at 30 June 2016, Atalaya shows revenues amounting to EUR22.6
million. Revenues include sales of concentrate to off takers during
the period. Total operating costs include operating production
costs amounting to EUR22.9 million.
Administrative expenses for the period included head office
costs, costs associated with a publicly listed company and any
costs incurred by Atalaya not directly linked to production. The
cost for the period ended 30 June 2016 amounted to EUR5.2 million.
Exploration costs amounted to EUR0.7 million.
Realised copper prices
The average prices of copper for the three and six months ended
30 June 2016 are as summarised below. As commercial production was
declared in February 2016, no operational data was available for
2015.
Three months Three months Six months Six months
ended ended ended ended
30 June 30 June 30 June 30 June
2016 2015 2016 2015
------------- ------------- ----------- -----------
USD
Realised copper price per
lb 2.11 n/a 2.06 n/a
Market copper price per lb
(period average) 2.21 n/a 2.16 n/a
4. Non-GAAP Measures
Atalaya has included certain non-IFRS measures including
"EBITDA", "Cash Operating Cost per pound of payable copper" and
"realisable prices" 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 all operating costs in the operation, excluding
finance, tax, depreciation and amortisation expenses. The realised
price for copper concentrates is the average price of copper per
tonne sold over the period under analysis.
The Cash Operating Cost per pound of payable copper includes
cash operating costs, including treatment and refining charges
("TC/RC"), freight and distribution costs, and is net of by-product
metal credits. The Cash Operating Cost per pound of payable copper
indicator is consistent with the widely accepted industry standard
established by Wood Mackenzie and is also known as the C1 cash
cost.
5. Liquidity and capital resources
Atalaya monitors factors that could impact its liquidity as part
of the 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 costs and administrative costs.
The following is a summary of Atalaya's cash position and cash
flows as at 30 June 2016 and 31 December 2015 and for the six
months ended 30 June 2016 and year ended 31 December 2015:
Liquidity information
30 June 31 December
Euro 000's 2016 2015
----------- ------------
Unrestricted cash and cash equivalents 10,156 18,578
Restricted cash 290 40
Working capital deficit (28,618) (6,359)
Six months Six months
ended ended
30 June 30 June
2016 2015
Cash flows from/(used in) operating
activities 8,936 (19,803)
Cash flows from financing activities - 93,507
Cash flows used in investing activities (17,108) (35,826)
----------- ------------
Net (decrease)/increase in cash and
cash equivalents (8.172) 37,878
=========== ============
Unrestricted cash and cash equivalents as at 30 June 2016
decreased to EUR10.2 million from EUR18.6 million at 31 December
2015. The decrease in the cash balances is the result of capital
expenditures incurred in the period related to the finalisation of
the expansion project, certain ramp-up inefficiencies and slow
revenues cash inflows. Atalaya reported a working capital
deficiency of EUR28.6 million at 30 June 2016 compared with EUR6.4
million at 31 December 2015.
6. 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 denominated
in Euros ("EUR") and to a much lesser extent in British Pounds
("GBP") and USD. 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 months ended 30 June 2016, Atalaya recognised a
foreign exchange loss of EUR183,000 whilst for the six months ended
30 June 2016, Atalaya recognised a foreign exchange loss of
EUR277,000.
The following table summarises the movement in key currencies
versus the EUR:
Three months Three Six Six
ended months months months
30 June ended ended ended
2016 30 June 30 June 30 June
2015 2016 2015
------------- --------- --------- ---------
Average rates for the periods
ended
GBP - EUR 0.83 n/a 0.81 n/a
USD - EUR 1.11 n/a 1.12 n/a
Spot rates as at
GBP - EUR 1.29 n/a 1.28 n/a
USD - EUR 1.10 n/a 1.12 n/a
During Q2 2016, Atalaya signed certain short term hedging
agreements to ensure a competitive rate to USD. Further information
on the hedging agreements is disclosed in the Financial Statements
(Note 14).
7. Contingencies
Astor
Following the announcements on 2 November 2015 and 26 May 2016,
Atalaya continues to work closely with its legal advisors in
preparing for trial at the High Court of Justice in London. The
date for the trial has been set for 30 January 2017. Atalaya
remains confident of a positive outcome of the upcoming trial and
will update shareholders following the trial, or if there are any
material developments in the meantime.
More details on contingencies are included in Note 17 of the
Financial Statements that follow.
8. Off-balance sheet arrangements
Atalaya has no off-balance sheet arrangements.
9. Risk factors
Due to the nature of Atalaya's business in the mining industry
it is subject to various risks that could materially impact the
future operating results of Atalaya 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
2015.
10. Critical accounting policies, estimates and accounting changes
The preparation of Atalaya's Financial Statements in accordance
with IFRS requires management to make estimates 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 2015.
11. Other information
Additional information about Atalaya Mining Plc is available at
www.atalayamining.com
Atalaya Mining Plc
(All amounts in Euro thousands unless otherwise stated)
Condensed interim consolidated income statements
(unaudited)
Three Three Six months Six
months months ended months
ended ended 30 June ended
30 June 30 June 2016 30 June
Notes 2016 2015 2015
---------- ---------- ----------- -----------
Sales 17,723 - 22,619 -
Total operating costs (17,799) - (22,852) -
---------- ---------- ----------- -----------
Gross loss (76) - (233) -
Administrative expenses (2,402) (649) (5,214) (1,736)
Care and maintenance expenses - (746) - (4,961)
Exploration expenses (517) (42) (679) (90)
---------- ---------- ----------- -----------
Operating loss (2,995) (1,437) (6,126) (6,787)
Other income 15 16 25 102
Net foreign exchange loss (183) (1,735) (277) (4,922)
Net finance cost 4 (45) (2,019) (81) (4,228)
---------- ---------- ----------- -----------
Loss before tax (3,208) (5,175) (6,459) (15,835)
Tax (6) - (12) -
---------- ---------- ----------- -----------
Loss for the period attributable
to owners of the parent (3,214) (5,175) (6,471) (15,835)
========== ===========
Loss per share from operations
attributable to equity
holders of the parent during
the period:
Basic and fully diluted
loss per share (expressed
in cents per share) 5 (2.8) (9.9) (5.5) (31.7)
========== ========== =========== ===========
Loss for the period (3,214) (5,175) (6,471) (15,835)
Other comprehensive profit:
Change in value of available-for-sale
investment 161 (172) 193 (172)
---------- ---------- ----------- -----------
Total comprehensive loss
for the period attributable
to owners of the parent (3,053) (5,347) (6,278) (16,007)
========== ========== =========== ===========
Condensed interim consolidated statements of financial
position
(unaudited)
30 June 31 December
Notes 2016 2015
---------- ------------
Assets
Non-current assets
Property, plant and equipment 6 184,910 168,424
Intangible assets 7 18,278 20,158
Investment in associate 10 10
203,198 188,592
---------- ------------
Current Assets
Inventories 8 10,965 -
Trade and other receivables 9 11,676 16,632
Available-for-sale investment 495 302
Cash and cash equivalents 10,446 18,618
---------- ============
33,582 35,552
---------- ------------
Total assets 236,780 224,144
========== ============
Equity and Liabilities
Equity attributable to owners of the parent
Share capital 10 11,632 11,632
Share premium 10 277,238 277,238
Other reserves 11 5,832 5,508
Accumulated losses (124,483) (118,012)
---------- ============
Total equity 170,219 176,366
---------- ------------
Liabilities
Non-current liabilities
Trade and other payables 12 343 1,896
Provisions 13 4,018 3,971
------------
4,361 5,867
---------- ------------
Current liabilities
Trade and other payables 12 62,200 41,911
62,200 41,911
---------- ------------
Total liabilities 66,561 47,778
---------- ------------
Total equity and liabilities 236,780 224,144
========== ============
Condensed interim consolidated statements of changes in
equity
(unaudited)
Share Share Other Accumulated Non -controlling
capital premium reserves losses Total Interest Total
---------- ---------- ---------- ------------ ----------- ----------------- -----------
At 1 January 2015 4,409 149,823 5,815 (103,002) 57,045 (116) 56,929
Total comprehensive
loss for the period - - - (15,835) (15,835) - (15,835)
Issue of share capital 7,223 130,017 - - 137,240 - 137,240
Share issue costs - (2,592) - - (2,592) - (2,592)
Derivative element
of conversion of
convertible
note - 440 - - 440 - 440
Purchase of minority
interest share - - - - - 116 116
Change in value of
available-for-sale
investment - - (172) - (172) - (172)
Bonus shares issued
in escrow - - 50 - 50 - 50
Warrant issue costs - (122) 122 - - - -
Recognition of share
based payments - - 76 - 76 - 76
At 30 June 2015 11,632 277,566 5,891 (118,837) 176,252 - 176,252
Total comprehensive
profit for the period - - - 825 825 - 825
Share issue costs - (328) - - (328) - (328)
Bonus shares issued
in escrow - - 51 - 51 - 51
Change in value of
available-for-sale
investment - - (510) - (510) - (510)
Recognition of share
based payments - - 76 - 76 - 76
---------- ---------- ---------- ------------ ----------- ----------------- -----------
At 31 December 2015 11,632 277,238 5,508 (118,012) 176,366 - 176,366
Total comprehensive
loss for the period - - - (6,471) (6,471) - (6,471)
Change in value of
available-for-sale
investment - - 193 - 193 - 193
Bonus shares issued
in escrow - - 63 - 63 - 63
Recognition of share
based payments - - 68 - 68 - 68
-----------
At 30 June 2016 11,632 277,238 5,832 (124,483) 170,219 - 170,219
========== ========== ========== ============ =========== ================= ===========
Condensed interim consolidated statements of cash flows
(unaudited)
Notes Three Three Six months Six
months months ended months
ended ended 30 June ended
30 June 30 June 2016 30 June
2016 2015 2015
---------- ----------- ----------- ----------
Cash flows from operating activities
Loss before tax (3,208) (5,175) (6,459) (15,835)
Adjustments for:
Depreciation of property, plant
and equipment 6 1,712 33 2,207 66
Amortisation of intangibles 7 200 - 314 123
Recognition of share-based payments 11 34 38 68 76
Bonus share issued in escrow 11 31 25 63 50
Interest income 4 (4) (1) (18) (1)
Interest expense 4 25 61 52 136
Rehabilitation cost 4 24 - 47 -
Gain on disposal of property,
plant and equipment (1) - (1) -
(Gain)/loss on fair value on the
convertible note 4 (827) - 310
Accretion expense on convertible
note 4 - - - 31
Bridge loan interest expense 4 - 678 - 1,232
Bridge loan financing expenditure 4 - 1,342 - 1,342
Convertible note interest expense 4 - 766 - 1,178
Foreign exchange loss on repayment
of borrowings - 1,846 - 5,304
Unrealised foreign exchange loss
on financing activities - 248 - 248
---------- -----------
Cash outflows from operating activities
before working capital changes (1,187) (966) (3,727) (5,740)
Changes in working capital:
Inventories 8 (3,464) (1,669) (10,965) (1,669)
Trade and other receivables (119) (5,550) 4,956 (7,506)
Trade and other payables 12,234 (5,137) 18,724 (4,059)
---------- -----------
Cash flows from/(used in) operations 7,464 (13,322) 8,988 (18,974)
Interest paid (25) (590) (52) (665)
Financing expenditure paid - (164) - (164)
Tax paid - - - -
---------- ----------- ----------- ----------
Net cash from/(used) in operating
activities 7,439 (14,076) 8,936 (19,803)
---------- ----------- ----------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment 6 (8,788) (19,180) (17,079) (27,838)
Purchase of intangible assets - (5,646) - (7,982)
Proceeds from disposal of property,
plant and equipment 1 - 1 -
Increase in provisions (24) - (47) -
Payment for increase in investment
in subsidiary - - - (7)
Interest received 3 1 17 1
---------- -----------
Net cash used in investing activities (8,808) (24,825) (17,108) (35,826)
---------- ----------- ----------- ----------
Cash flows from financing activities
Proceeds from issue of share capital - 90,435 - 90,435
Listing and issue costs - (2,592) - (2,592)
Proceeds from bridge loan drawn
down in the period - 5,664 - 5,664
---------- ----------- ----------- ----------
Net cash from financing activities - 93,507 - 93,507
---------- ----------- ----------- ----------
Net (decrease)/increase in cash
and cash equivalents (1,369) 54,606 (8,172) 37,878
Cash and cash equivalents:
At beginning of the period 11,815 4,322 18,618 21,050
---------- ----------- ----------- ----------
At end of the period 10,446 58,928 10,446 58,928
========== =========== =========== ==========
Atalaya Mining Plc
(All amounts in Euro thousands unless otherwise stated)
Notes to the condensed interim consolidated financial
statements
For the three and six months to 30 June 2016 and 2015 -
(Unaudited)
1. General information
Country of incorporation
Atalaya Mining Plc ("Atalaya Mining" and/or the "Company"), and
its subsidiaries ("Atalaya" and/or the "Group"), 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 Group has
offices in Minas de Riotinto in Spain and in Nicosia, Cyprus. The
Company was listed on AIM of the London Stock Exchange in May 2005
and on the TSX on 20 December 2010.
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 GBP0.075 for every 30 existing ordinary shares of nominal
value Stg GBP0.0025.
Principal activities
The principal activity of the Company and its subsidiaries is to
operate the recently commissioned Rio Tinto Copper Project
("Proyecto Riotinto") and to explore and develop metal production
operations in Europe, with an initial focus on copper. The strategy
is to evaluate and prioritise metal production opportunities in
several jurisdictions throughout the well-known belts of base and
precious metals mineralisation in the European region.
2. Basis of preparation and accounting policies
Basis of preparation
The condensed interim consolidated financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS) including International Accounting Standard 34
"Interim Financial Reporting" and IFRIC interpretations as adopted
by the European Union (EU), using the historical cost
convention.
These condensed interim consolidated financial statements are
unaudited and 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 2015. These condensed
interim consolidated financial statements do not include all of 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 Company's
31 December 2015 Annual Report. The accounting policies are
unchanged from those disclosed in the annual consolidated financial
statements.
The Directors have formed a judgment at the time of approving
the financial statements that there is a reasonable expectation
that the Company and the Group have adequate available resources to
continue in operational existence for the foreseeable future.
The condensed interim consolidated financial statements have
been prepared on the basis of accounting principles applicable to a
going concern which assumes that the Company will realise its
assets and discharge its liabilities in the normal course of
business. These condensed interim consolidated financial statements
do not give effect to any adjustment, which would be necessary
should the Company be unable to continue as a going concern and,
therefore, be required to realise its assets and discharge its
liabilities in other than the normal course of business and at
amounts different than those reflected in the consolidated
financial statements.
Fair value estimation
The fair values of the Company'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 available--for--sale
financial assets is based on quoted market prices at the reporting
date. The quoted market price used for financial assets held by the
Company 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
Company 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).
Financial assets Level 1 Level 2 Level 3 Total
-------- -------- -------- ------
30 June 2016
Available for sale financial assets 495 - - 495
-------- -------- -------- ------
Total 495 - - 495
======== ======== ======== ======
31 December 2015
Available for sale financial assets 302 - - 302
-------- -------- -------- ------
Total 302 - - 302
======== ======== ======== ======
Use and revision of accounting estimates
The preparation of the condensed interim consolidated financial
statements requires the making of estimations and assumptions that
affect the recognised amounts of assets, liabilities, revenues and
expenses and the disclosure of contingent liabilities. The
estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgments about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in
the period of the revision and future periods if the revision
affects both current and future periods.
Adoption of new and revised International Financial Reporting
Standards (IFRSs)
The Group has adopted all the new and revised IFRSs and
International Accounting Standards (IASs) which are relevant to its
operations and are effective for accounting periods commencing on 1
January 2016. The adoption of these Standards did not have a
material effect on the condensed interim consolidated financial
statements.
Critical accounting estimates and judgements
The fair values of the Group's financial assets and liabilities
approximate their carrying amounts at the reporting date. Estimates
and judgments are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are unchanged from those disclosed in the annual
consolidated financial statements.
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.
3. Business and geographical segments
Business segments
The Group has only one distinct business segment, being that of
mining operations, mineral exploration and development.
Geographical segments
The Group's mining and exploration activities are located in
Spain and its administration is based in Cyprus.
Three months ended 30 June 2016 Cyprus Spain Other Total
-------- -------- ------ --------
Sales 17,723 - - 17,723
-------- -------- ------ --------
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) (647) (417) (4) (1,068)
Depreciation/amortisation charge (4) (1,908) - (1,912)
Net finance cost - (45) - (45)
Foreign exchange (loss) / gain (247) 64 - (183)
Loss for the period before taxation (898) (2,306) (4) (3,208)
-------- -------- ------
Tax (6)
--------
Net loss for the period (3,214)
========
Six months ended 30 June 2016 Cyprus Spain Other Total
-------- -------- ------ --------
Sales 22,619 - - 22,619
-------- -------- ------ --------
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) (1,625) (1,947) (8) (3,580)
Depreciation/amortisation charge (8) (2,513) - (2,521)
Net finance cost - (81) - (81)
Foreign exchange (loss) / gain (343) 66 - (277)
Loss for the period before taxation (1,976) (4,475) (8) (6,459)
-------- -------- ------
Tax (12)
--------
Net loss for the period (6,471)
========
Total assets 4,327 232,448 5 236,780
======== ======== ====== ========
Total liabilities (9,080) (57,422) (59) (66,561)
======== ======== ====== ========
Depreciation of property, plant and
equipment 8 2,199 - 2,207
======== ======== ====== ========
Amortisation of intangible assets - 314 - 314
======== ======== ====== ========
Total net additions of non-current assets - 17,079 - 17,0079
======== ======== ====== ========
Three months ended 30 June 2015 Cyprus Spain Other Total
-------- -------- ------ ----------
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) (371) (861) - (1,232)
Depreciation/amortisation charge (132) (57) - (189)
Finance cost (1,958) (61) - (2,019)
Foreign exchange loss (1,715) (20) - (1,735)
Loss for the period before taxation (4,176) (999) - (5,175)
-------- -------- ------
Tax -
----------
Net loss for the period (5,175)
==========
Six months ended 30 June 2015 Cyprus Spain Other Total
--------- -------- ------ ---------
Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) (1,284) (5,202) (10) (6,496)
Depreciation/amortisation charge (132) (57) - (189)
Finance cost (4,092) (136) - (4,228)
Foreign exchange loss (4,866) (56) - (4,922)
Loss for the period before taxation (10,374) (5,451) (10) (15,835)
--------- -------- ------
Tax -
---------
Net loss for the period (15,835)
=========
Total assets 23,803 166,052 9 189,864
====== ======== ==== ========
Total liabilities (383) (13,194) (35) (13,612)
====== ======== ==== ========
Depreciation of property, plant and
equipment 9 57 - 66
====== ======== ==== ========
Amortisation of intangible assets 123 - - 123
====== ======== ==== ========
Total net additions of non-current assets 123 35,820 - 35,943
====== ======== ==== ========
4. Net finance cost
Three Three Six Six
months months months months
ended ended ended ended
30 June 30 June 30 June 30 June
2016 2015 2016 2015
--------- --------- --------- ---------
Interest expense 25 61 52 136
Interest income (4) (1) (18) (1)
Rehabilitation cost 24 - 47 -
Accretion expense on convertible
note - - - 31
Bridge loan interest expense - 678 - 1,232
Convertible note interest expense - 766 - 1,178
Bridge loan financing expenditure - 1,342 - 1,342
Loss on fair value on conversion
of the convertible note - (827) - 310
--------- --------- --------- ---------
45 2,019 81 4,228
========= ========= ========= =========
5. Basic and fully diluted loss per share
The calculation of the basic and fully diluted loss per share
attributable to the ordinary equity holders of the parent is based
on the following data:
Three Three Six Six
months months months months
ended ended ended ended
30 30 30 30
June June June June
2016 2015 2016 2015
-------- -------- -------- ---------
Parent (730) (4,176) (1,379) (10,374)
Subsidiaries (2,484) (999) (5,092) (5,461)
-------- -------- -------- ---------
Loss attributable to the ordinary
holders of the parent (3,214) (5,175) (6,471) (15,835)
======== ======== ======== =========
Weighted number of ordinary shares
for the purposes of basic loss
per share (000's) 116,680 51,811* 116,680 49,903*
======== ======== ======== =========
Basic loss per share:
Basic and fully diluted loss per
share (cents) (2.8) (9.9) (5.5) (31.7)
======== ======== ======== =========
* Adjusted for the 30:1 share consolidation which took place in
October 2015
6. Property, plant and equipment
Plant Assets Deferred
Land and Mineral under mining Other
Cost and buildings machinery rights construction costs(2) assets(3) Total
--------------- ----------- -------- ----------------- ---------- ----------- --------
At 1 January
2015 35,797 29,087 - - - 1,086 65,970
Additions 23 27,747 - - 68 27,838
--------------- ----------- -------- ----------------- ---------- ----------- --------
At 30 June 2015 35,820 56,834 - - - 1,154 93,808
Additions /
(reclassifications) 3,971(1) (27,770) - 88,885 10,334 4 75,424
Reclassifications (730) (5,860) 950 5,640 - - -
Disposals - (158) - - (132) (290)
At 31 December
2015 39,061 23,046 950 94,525 10,334 1,026 168,942
Additions 46 16,994 - - 39 17,079
Reclassifications - 46,935 - (41,731) (5,204) - -
Reclassifications
-intangibles - 1,614 - - - - 1,614
Disposals - - - - - (5) (5)
At 30 June 2016 39,107 88,589 950 52,794 5,130 1,060 187,630
--------------- ----------- -------- ----------------- ---------- ----------- --------
Depreciation
At 1 January
2015 - 158 - - - 498 656
Charge for the
period - - - - - 66 66
At 30 June 2015 - 158 - - - 564 722
Charge for the
period - - - - - 86 86
Disposals - (158) - - - (132) (290)
At 31 December
2015 - - - - - 518 518
Charge for the
period 658 1,652 - - - (103) 2,207
Disposals - - - - - (5) (5)
At 30 June 2016 658 1,652 - - - 410 2,720
--------------- ----------- -------- ----------------- ---------- ----------- --------
Net book value
At 30 June 2016 38,449 86,937 950 52,794 5,130 650 184,910
=============== =========== ======== ================= ========== =========== ========
At 31 December
2015 39,061 23,046 950 104,859 - 508 168,424
=============== =========== ======== ================= ========== =========== ========
(1) Rehabilitation provision
(2) Stripping costs
(3) Includes motor vehicles, furniture, fixtures and office
equipment which are depreciated over 5-10 years.
The above property, plant and equipment is located in Cyprus and
Spain.
7. Intangible assets
Permits Acquisition
Cost of Rio Tinto of mineral
Project rights Goodwill Total
-------------- ------------ ----------- ----------
At 1 January 2015 17,655 310 10,023 27,988
Additions 7,982 - 123 8,105
-------------- ------------ ----------- ----------
At 30 June 2015 25,637 310 10,146 36,093
Reclassification (5,479) - - (5,479)
Disposals/closure of subsidiaries - (310) (813) (1,123)
At 31 December 2015 20,158 - 9,333 29,491
Reclassifications - property,
plant and equipment (1,614) - - (1,614)
Other reclassifications 48 - - 48
At 30 June 2016 18,592 - 9,333 27,925
-------------- ------------ ----------- ----------
Provision for impairment
On 1 January 2015 - 310 10,023 10,333
Provision for the period - - 123 123
-------------- ------------ ----------- ----------
At 30 June 2015 - 310 10,146 10,456
Disposal/closure of subsidiaries - (310) (813) (1,123)
-------------- ------------ ----------- ----------
At 31 December 2015 - - 9,333 9,333
Provision for the period 314 - - 314
-------------- ------------ ----------- ----------
At 30 June 2016 314 - 9,333 9,647
-------------- ------------ ----------- ----------
Net book value
At 30 June 2016 18,278 - - 18,278
==============
At 31 December 2015 20,158 - - 20,158
============== ============ =========== ==========
The useful life of the intangible assets is estimated to be not
less than fourteen years from the start of production (the revised
Reserves and Resources statement which was announced in July 2016
has increased the life of mine to 16 1/2 years). The ultimate
recoupment of balances carried forward in relation to areas of
interest or all such assets including intangibles is dependent on
successful development, and commercial exploitation, or
alternatively sale of the respective areas. The Group conducts
impairment testing on an annual basis unless indicators of
impairment are present at the reporting date. In considering the
carrying value of the assets at Proyecto Riotinto, including the
intangible assets and any impairment thereof, the Group assessed
the carrying values having regard to (a) the current recovery value
(less costs to sell) and (b) the net present value of potential
cash flows from operations. In both cases, the estimated net
realisable values exceeded current carrying values and thus no
impairment has been recognised. Goodwill of EUR9,333,000 arose on
the acquisition of the remaining 49% of the issued share capital of
Atalaya Riotinto Minera S.L.U. ("ARM") back in September 2008. This
amount was fully impaired on acquisition, in the absence of the
mining license back in 2008.
8. Inventories
30 June 31 Dec
2016 2015
-------- -------
Finished products 6,216 -
Materials and supplies 4,749 -
10,965 -
======== =======
9. Trade and other receivables
30 June 31 Dec
2016 2015
-------- -------
Trade receivables 1,016 -
Receivables from related parties (Note 16.4) 570 6,541
Deposits and prepayments 1,109 1,114
VAT 8,789 7,970
Other receivables 192 1,007
11,676 16,632
======== =======
The fair values of trade and other receivables approximate to
their carrying amounts as presented above.
10. Share capital and share premium
Share Share
Shares Capital premium Total
000's StgGBP'000 StgGBP'000 StgGBP'000
--------- ------------ ------------ -------------
Authorised
Ordinary shares of Stg GBP0.075
each* 200,000 15,000 - 15,000
========= ============ ============ =============
Issued and fully paid 000's Euro Euro Euro
000's 000's 000's
Balance at 1 January 2016
and 30 June 2016 116,679 11,632 277,238 288,870
========= ============ ============ =============
Authorised capital
2015
*Following the Company's EGM on 13 October 2015, the
consolidation of ordinary shares came into effect on 21 October
2015, whereby all shareholders received one new ordinary share of
nominal value Stg GBP0.075 for every 30 existing ordinary shares of
nominal value Stg GBP0.0025.
2016
The Company's authorised share capital is 200,000,000 ordinary
shares of Stg GBP0.075 each.
Issued capital
2016
No shares were issued in the period from 1 January 2016 to 30
June 2016.
Warrants
The Company has issued warrants to advisers to the Group.
Warrants, noted below, expire three or five years after the grant
date and have exercise prices ranging from Stg GBP1.425 to Stg
GBP3.150.
Details of share warrants outstanding as at 30 June 2016:
Number of warrants
-------------------
Outstanding warrants at 1 January and 30 June 2016 473,061
===================
11. Other reserves
Share Bonus Available-for-sale
option share investment Total
-------- ------- ------------------- --------
At 1 January 2015 5,973 44 (202) 5,815
Change in value of available-for-sale
investment - - (172) (172)
Bonus shares issued in escrow - 50 - 50
Warrant issue costs 122 - - 122
Recognition of share based
payments 76 - - 76
-------- ------- ------------------- --------
At 30 June 2015 6,171 94 (374) 5,891
Bonus shares issued in escrow - 51 - 51
Change in value of available-for-sale
investment - - (510) (510)
Recognition of share based
payments 76 - - 76
-------- ------- ------------------- --------
At 31 December 2015 6,247 145 (884) 5,508
Change in value of available-for-sale
investments - - 193 193
Bonus shares issued in escrow - 63 - 63
Recognition of share based
payments 68 - - 68
-------- ------- ------------------- --------
At 30 June 2016 6,315 208 (691) 5,832
======== ======= =================== ========
Share options
No share options were issued in the period from 1 January 2016
to 30 June 2016. Details of share options outstanding as at 30 June
2016:
Number of share options 000's
------------------------------
Outstanding options at 1 January 2016 931,654
- cancelled/expired during the reporting period (113,331)
------------------------------
Outstanding options at 30 June 2016 818,323
==============================
12. Trade and other payables
30 June 2016 31 Dec 2015
Non-current trade and other payables
Social Security* 208 1,741
Land options 135 155
343 1,896
Current trade and other payables
Trade payables 48,594 37,106
Deferred income 5,403 -
Deferred income (Note 16.4) 3,503 -
Social Security* 3,248 2,867
Land options and mortgage 774 789
Accruals 642 1,124
Tax liability 36 24
Other - 1
62,200 41,911
The fair values of trade and other payables due within one year
approximate to their carrying amounts as presented above.
* On 25 May 2010 ARM recognised a debt with the Social
Security's General Treasury in Spain amounting to EUR16.9 million
that was incurred by a previous owner in order to stop the
execution process by Public Auction of the land over which Social
Security had a lien. EUR13.5 million has been repaid to date.
Originally payable over 5 years, the repayment schedule was
subsequently extended until June 2017.
13. Provisions
Rehabilitation
costs
---------------
At 1 January 2015 -
Additions 3,971
At 31 December 2015 3,971
Charge to profit and loss as finance cost (Note
4) 47
---------------
At 30 June 2016 4,018
===============
30 June 2016 31 Dec 2015
Non-current 4,018 3,971
Current - -
Total 4,018 3.971
Rehabilitation provision represents the accrued cost required to
provide adequate restoration and rehabilitation upon the completion
of production activities. These amounts will be settled when
rehabilitation is undertaken, generally over the project's
life.
14. Derivative instruments
As at 30 June 2016, Atalaya had certain short term foreign
exchange contracts. The contracts were in an unrealised gain
position which was recorded as a foreign exchange gain in the
income statements (30 June 2016 - EUR54,000), as part of net
foreign exchange loss, the corresponding receivable amount recorded
in other receivables. The relevant information of the contracts is
as follows:
Foreign exchange contracts - Euro/USD
Period Contract type Amount in USD Contract rate Strike
------------------- --------------- -------------- -------------- -------
June 2016 - March FX Forward
2017 - Put 5,000,000 1.0955 n/a
FX Forward
- Call 10,000,000 1.0955 1.0450
The counter parties of the foreign exchange agreements are third
parties.
15. Acquisition and disposal of subsidiaries
There were no acquisitions in the six months ended 30 June
2016.
16. Related party transactions
The following transactions were carried out with related
parties:
16.1 Compensation of key management personnel
The total remuneration and fees of Directors (including
Executive Directors) and other key management personnel was as
follows:
Three Three Six Six
months months months months
ended ended ended ended
30 June 30 June 30 June 30 June
2016 2015 2016 2015
-------- -------- ---------- --------
Directors' remuneration and fees 175 170 350 258
Share option-based benefits to directors 14 14 28 28
Bonus shares issued to director, in
escrow 31 25 63 50
Key management personnel remuneration 95 157 190 315
Share option-based and other benefits
to key management personnel 8 20 16 26
-------- -------- ---------- --------
323 386 647 677
======== ======== ========== ========
16.2 Share-based benefits
The directors and key management personnel have not been granted
options during the three month period.
16.3 Transactions with shareholders
Three Three Six Six
months months months months
ended ended ended ended
30 June 30 June 30 June 30 June
2016 2015 2016 2015
-------- -------- ---------- --------
Trafigura - Sales of goods (pre commissioning
sales offset against the cost of constructing - - 2,452 -
assets)
Trafigura - Sales of goods 6,497 - 11,393 -
6,497 - 13,845 -
======== ======== ========== ========
16.4 Period-end balances with shareholders
30 June 31 Dec 2015
2016
--------- -----------
Receivables from related parties (Note
9):
Trafigura 570 6,541
========= ===========
The above debtor balance arising from sales of goods bears
no interest and is repayable on demand.
Deferred income (Note 12):
Orion 3,503 -
========= ===========
17. Contingent liabilities
Deferred consideration
In September 2008, the Group moved to 100% ownership of ARM (and
thus full ownership of Proyecto Riotinto) by acquiring the
remaining 49% of the issued capital of ARM. The cost of the
acquisition was satisfied by issuing 39,140,000 Ordinary Shares to
MRI Trading AG ("MRI") at an issue price of 21p per Ordinary Share
and a deferred cash settlement of up to EUR53 million ("Deferred
Consideration"), (including loans of EUR9,116,617.30 owed to
companies related to MRI incurred in relation to the operation of
Proyecto Riotinto). The obligation to pay the Deferred
Consideration is subject to the satisfaction of the following
conditions (the "Conditions"): (a) all authorisations to restart
mining activities in Proyecto Riotinto having been granted by the
Junta de AndalucĂa ("Permit Approval"); and (b) the Group securing
a senior debt finance facility for a sum sufficient to restart
mining operations at Proyecto Riotinto ("Senior Debt Facility") and
being able to draw down funds under the Senior Debt Facility.
Originally the Group was obliged to pay the Deferred
Consideration in instalments commencing on the date of drawdown
under the Senior Debt Facility until the second anniversary of
commercial production at Proyecto Riotinto. On 31 March 2009,
pursuant to a deed of amendment, MRI consented to the Group paying
the Deferred Consideration over a period of six or seven years
following satisfaction of the Conditions (the "Payment Period"). In
return, the Company agreed to potentially pay further Deferred
Consideration of up to EUR15,900,000 in regular instalments over
the Payment Period depending upon the price of copper. Any such
additional Deferred Consideration would only be payable if, during
the relevant period, the average price of copper per tonne is
US$6,614 or more (US$3.00/lb). On 11 November 2011 MRI novated its
right to be paid the Deferred Consideration to Astor Management AG
("Astor").
As security, inter alia, for the obligation to pay the Deferred
Consideration to Astor, EMED Holdings (UK) Limited has granted a
pledge to Astor Resources AG over the issued capital of ARM and the
Company has provided a parent company guarantee.
As at the date of this report, the Permit Approval condition has
been satisfied. However, the Group has not entered into
arrangements in connection with a Senior Debt Facility and, in the
absence of drawdown of funds by the Group pursuant to a Senior Debt
Facility, there is significant doubt concerning the legal
obligation on the Company to pay any of the Deferred
Consideration.
On 2 November 2015, the Company announced that it was in receipt
of a formal claim from Astor (the "Claim"). The Claim was made in
the High Court of Justice in London against the Company and certain
other members of the Group. In its Claim, Astor is claiming, inter
alia, that the Conditions have been satisfied and the first
instalment of the Deferred Consideration is due (together with
damages). The Company is disputing this and it is defending the
proceedings vigorously. The Company continues to work closely with
its legal advisors in preparing for trial at the High Court of
Justice in London. The date for the trial has been set for 30
January 2017.
Judicial and administrative cases
On 23 September 2010, ARM was notified that the AndalucĂan Water
Authority ("AWA") had initiated a Statement of Objections and
Opening of File (the "Administrative File 2010") following
allegations by third parties of unauthorised industrial discharges
from the Tailings Management Facility ("TMF") at the Rio Tinto
Copper Mine in the winter months of late 2010 and early 2011. These
assertions are judicial (alleging negligence) and administrative
(alleging damage to the environment) in nature. At that time, the
Company owned 33% of the TMF and the owners of the remaining 67%
are co-defendants (Rumbo and Zeitung).
In December 2011, the judicial claims were dismissed in the
initial discovery phase by the appeals Court (upholding a lower
court decision) finding that the controlled discharges of excess
rainwater were force majeure events carried out to protect the
stability of the TMF, thereby ensuring public safety and protection
of the environment (the "Court Decisions").
Given that all judicial claims were dismissed in the very early
stages of the court's investigation, no formal charges were ever
made against ARM or against any of its Directors or Officers.
Now that the Court Decisions are final, the Administrative File
2010, which can only result in a monetary sanction against the
co-defendants, was re-opened in 2012. The defence arguments
successfully used in a later case which has been dismissed on 11
February 2015 (see below) will be used in the defence of
Administrative File 2010 and the management is positive that they
will be accepted.
On January 2, 2013 ARM, Rumbo and Zeitung were notified of a
Resolution of Fine and Damages (in a total amount of
EUR1,867,958.39). In February 2013 ARM appealed this Resolution and
the Court has agreed that the Fine and Damages amount be secured by
a mortgage over certain properties owned by ARM until the final
decision on the alleged discharges is known.
In the Company's view, no "industrial discharge" took place, but
rather a force majeure controlled discharge of excess rainwater
accumulated in the TMF since industrial operations ceased in the
early 2000's with no actual damage to the environment having taken
place.
In the Company's view it is unlikely that any fine or sanction
will be imposed against ARM once the Administrative File 2010
reaches its final conclusion after all appeals are exhausted in
approximately 3-5 years. On 28 January 2016, the Court ruled in
favour of ARM, Rumbo and Zeitung. On 26 April 2016 the Court issued
a final decree by which the 28 January 2016 ruling was declared
final.
On 20 January 2014, ARM was notified that the Huelva Territorial
Delegation of the Ministry of Environment (which has absorbed the
former AWA) had initiated another disciplinary proceeding for
unauthorised discharge (the "Administrative File 2013") of
administrative nature following allegations by the administration
of alleged unauthorised industrial discharges from the TMF at the
Rio Tinto Copper Mine during the heavy rains occurred from 7 March
to 25 April 2013. The Administration has proposed the amount of
EUR726,933.30 as compensation for alleged damages to the
environment ("Public Water Domain") and a fine of between
EUR300,507 and EUR601,012. On 11 February 2015, the Huelva
Territorial Delegation of the Ministry of Environment dismissed the
case. On 13 May 2015, the Huelva Territorial Delegation of the
Ministry of Environment re-opened the Administrative File 2013.
Written allegations were submitted on 30 May 2015. On 29 March 2016
the Huelva Territorial Delegation of the Ministry of Environment
dismissed finally and without further recourse the Administrative
File 2013.
On 19 February 2015, ARM was notified that the Huelva
Territorial Delegation of the Ministry of Environment had initiated
another disciplinary proceeding for unauthorised discharge (the
"Administrative File 2014") which has proposed a fine of between
EUR300,507 and EUR601,012. On 10 March 2015 the Company submitted
the relevant defence arguments.
The Junta de AndalucĂa notified ARM of another disciplinary
proceeding for unauthorised discharge in 2014. ARM submitted the
relevant defence arguments on 10 March 2015 but has had no response
or feedback from the Junta de AndalucĂa since the submissions.
Based on the time that has lapsed without a response, it is
expected that the outcome of this proceedings will also be
favourable for ARM. Once the necessary time has lapsed, ARM will
ask for the Administrative File to be dismissed.
18. Commitments
Spain
There are no minimum exploration requirements at Proyecto
Riotinto. However, the Group is obliged to pay municipal land taxes
which currently are approximately EUR110,000 per year in Spain and
the Group is required to maintain the Riotinto site in compliance
with all applicable regulatory requirements.
As part of the consideration for the purchase of land from
Rumbo, ARM has agreed to pay a royalty to Rumbo subject to
commencement of production of $250,000 in each quarter where the
average price of LME copper or the average copper sale price
achieved by the Group is at least $2.60/lb. No royalty is payable
in respect of any quarter where the average copper price for that
quarter is below this amount and in certain circumstances any
quarterly royalty payment can be deferred until the following
quarter. The royalty obligation terminates 10 years after
commencement of production.
Commencement of production is defined as being the first to
occur of processing of ore at a rate of nine million tonnes per
annum for a continuous period of six months or the date that is 18
months after the first product sales from Proyecto Riotinto.
ARM has entered into a 50/50 joint venture with Rumbo to
evaluate and exploit the potential of the class B resources in the
tailings dam and waste areas at Proyecto Riotinto. Under the joint
venture agreement, ARM will be the operator of the joint venture,
will reimburse Rumbo for the costs associated with the application
for classification of the Class B resources and will fund the
initial expenditure of a feasibility study up to a maximum of EUR2
million. Costs are then borne by the joint venture partners in
accordance with their respective ownership interests. Half of the
costs paid by ARM in connection with the feasibility study can be
deducted from any royalty which may fall due to be paid.
At Proyecto Riotinto, the Group had four year options with each
of Zeitung and Inland for the purchase of certain land plots
adjacent to the mine at a purchase price of EUR4,202,000 (expiry
date 31 July 2016) and EUR4,648,000 (expiry date 2 August 2016)
respectively. The completion of the infill drilling programme,
assays and updating of the block model provided the Group with a
better understanding of the mineralisation. Based on these results,
the Group took the view that the options on the said land plots
were no longer necessary and opted not to exercise them.
19. Significant events
The Group declared commercial production on 1 February 2016. The
commissioning of the expansion project began in May 2016, with
nameplate capacity of 9.5Mtpa forecast by the end of 2016.
The updated Reserves and Resources statement released on 14 July
2016 indicated a 12% increase in contained reserves and extended
life of mine to 16 1/2 years.
20. Events after the reporting period
On 7 July 2016, the Annual General Meeting was held at Rio
Tinto, in Spain, with all resolutions being passed by shareholders.
On the same day, Atalaya announced the appointment of Mr Cesar
Sanchez as Group Chief Financial Officer.
On 5 September 2016, the Company announced the completion of a
US$14 million prepayment funding facility with Transamine Trading
S.A. The facility covers part of the Group's short term working
needs in order to support itself through the ramp-up phase. The
Group continues to work on alternative funding solutions to improve
its balance sheet and its working capital position during the
ramp-up period to full expanded production.
There were no other events after the reporting period, which
would have a material effect on the consolidated financial
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFSAAEIRIIR
(END) Dow Jones Newswires
September 07, 2016 02:01 ET (06:01 GMT)
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