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ATYM Atalaya Mining Plc

388.00
9.00 (2.37%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Atalaya Mining Plc LSE:ATYM London Ordinary Share CY0106002112 ORD 7.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  9.00 2.37% 388.00 383.00 388.00 388.00 378.00 384.00 340,596 16:29:58
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Metal Mining Services 362.13M 33.16M - N/A 0

Atalaya Mining PLC Half-year Report (1370J)

07/09/2016 7:01am

UK Regulatory


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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 Andalucía 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 Andalucía. 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 Andalucía ("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 Andalucían 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 Andalucía 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 Andalucía 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

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