TIDMATYM
RNS Number : 2527Y
Atalaya Mining PLC
04 December 2017
4 December 2017
Atalaya Mining plc
("Atalaya" and/or the "Company")
Approval of 15 Mtpa Expansion Project at Proyecto Riotinto
Atalaya Mining plc (AIM: ATYM; TSX: AYM), with its subsidiaries,
is pleased to announce its decision to proceed with the 15 Mtpa
expansion plan at Proyecto Riotinto in south-western Spain.
The 15 Mtpa expansion plan is designed to upgrade processing
facilities with the ultimate goal of increasing copper production
to approximately 50,000 - 55,000 tonnes per year.
Project Highlights
-- The purpose of the 15 Mtpa expansion plan is to increase
copper production, improve operational efficiencies, reduce
maintenance requirements and lower operating cash costs.
-- The expansion plan is designed to deliver processing capacity
of up to 15 Mtpa which correlates to an estimated 50,000 - 55,000
tonnes of copper contained in concentrate per year.
-- Capital cost has been estimated at EUR80.4 million consistent
with the low capital intensity that the Company has delivered
previously at Proyecto Riotinto.
o Expansion project represents capital intensity of
approximately US$6,100 per tonne for the expected incremental
15,000 tonnes of copper production over current nameplate.
-- Estimated reduction in cash costs and all-in sustaining costs
by approximately 7% compared to the existing 9.5 Mtpa operation,
based on maintenance and processing efficiencies.
-- Subject to completion of financing arrangements and
permitting activities, it is anticipated that ground construction
works will start during the first quarter of 2018 with
commissioning scheduled for the second half of 2019 and nominal
production during the first half of 2020.
-- Management expects that the expansion project will result in
an incremental post-tax net present value (NPV) of approximately
US$113 million (assuming an 8% discount rate) and a post-tax
internal rate of return (IRR) of approximately 43%, when assuming a
US$3.00/lb copper price, US$18.00/oz silver price, and USD:EUR of
1.15.
The 15 Mtpa expansion comprises modernisation of the process
plant with the installation of a new primary crushing system, a new
SAG mill, additional flotation cells and concentrate handling
installations as well as other site infrastructure.
As a result of the positive economic results of the studies, the
Board of the Company has approved the start of the early activities
required to implement the expansion, including the placing of
orders for long-lead equipment.
Alberto Lavandeira, CEO commented:
"Our decision to proceed to upgrade and expand Proyecto Riotinto
to processing capacity of 15 Mtpa is based on the strong project
economics that demonstrate that significant incremental value can
be generated for our shareholders. The project will benefit from
the excellent technical experience of our teams which are committed
to driving low capital intensity while increasing metal production
and mine competitiveness to benefit our shareholders, employees and
the local economy."
Indicative Statistics for the 15 Mtpa Expansion Project
All of the information in this press release regarding the 15
Mtpa expansion are estimates only based on various assumptions, and
internal data and analysis of the Company. The financial metrics
shown are internally generated by management and assume a
US$3.00/lb copper price (unless otherwise noted), a US$18.00/oz
silver price and a USD:EUR exchange rate of 1.15.
Key Operating Statistics (2018+, 10yr Averages)
Unit 15 Mtpa 9.5 Mtpa Incremental
Expansion Plan Change
Plan
------------------------ --------- ----------- --------- -------------------
Total Ore Mined Mt 163 150 +8.5%
Total Waste Mined Mt 275 254 +8.2%
Waste :
LOM Strip Ratio Ore 1.7 1.7 (0.3%)
Total LOM (from
2016) years 13.5 16.5 (3.0)
Total Ore to Mill Mt 161 141 +14.3%
LOM Copper Mill
Grade % 0.42% 0.42% --
LOM Copper Recovery % 84.6% 84.3% +32 bp
Total Copper Recovered kt 586 512 +14.3%
Average Annual
Copper Recovered ktpa 52 38 +39.1%
Average Annual
Silver Payable kozpa 697 501 +39.1%
------------------------ --------- ----------- --------- -------------------
15 Mtpa Expansion Capital Cost Estimate
Cost
(EURm)
------------------------- --------
Direct Field Costs EUR51.8
Indirect Field Costs EUR13.3
Total Field Costs EUR65.2
Home Office Costs EUR1.9
-------------------------- --------
Total Costs EUR67.1
Project Management
& 10% Contingency EUR13.3
-------------------------- --------
Total 15 Mtpa Expansion
Capital Cost EUR80.4
-------------------------- --------
15 Mtpa Processing Cost Estimate of Additional Throughput
Figures shown represent annual processing costs of incremental
5.5 Mtpa of ore above existing 9.5 Mtpa operation.
Cost Cost
(EURm) (EUR/t
ore)
--------------------- -------- --------
Reagents EUR3.9 EUR0.71
Other Consumables EUR10.4 EUR1.90
Power EUR9.8 EUR1.78
Labour (Laboratory) EUR0.3 EUR0.06
Plant Maintenance EUR0.4 EUR0.07
Total Additional
Processing Cost EUR24.9 EUR4.52
--------------------- -------- --------
Key Financial Metrics (2018+, 10yr Averages)
Unit 15 Mtpa 9.5 Mtpa Incremental
Expansion Plan Change
Plan
Total LOM EBITDA EURm EUR927.7 EUR634.7 46.2%
Unit Processing EUR/t
Cost ore EUR4.25 EUR4.63 (8.2%)
Average C1 Cash
Costs US$/lb $2.08 $2.23 (6.5%)
Average AISC US$/lb $2.18 $2.33 (6.7%)
Average Annual
Sustaining Capex EURm EUR6.4 EUR4.4 +EUR2.0
------------------- -------- ----------- --------- ---------------------
Production and All-In Sustaining Cost Profile
Year Production AISC (US$/lb)
(kt Cu)
------ ----------- --------------
2018 43 $2.10
2019 41 $2.14
2020 61 $2.09
2021 57 $2.19
2022 56 $2.23
2023 60 $2.12
2024 57 $2.19
2025 55 $2.29
2026 49 $2.19
2027 44 $2.23
2028 38 $2.22
2029 24 $2.29
------ ----------- --------------
NPV (8% discount rate) and IRR Sensitivities
Flat copper price
assumption US$/lb $2.75 $3.00 $3.25 $3.50 $3.75
------------------- -------- ------ ------ ------ ------ ------
15 Mtpa Expansion
Plan NPV (2018+) US$m $314 $468 $621 $774 $927
9.5 Mtpa Plan NPV
(2018+) US$m $229 $355 $479 $603 $727
15 Mtpa Expansion
Plan Stand-alone
IRR % 34% 43% 52% 60% 70%
------------------- -------- ------ ------ ------ ------ ------
15 Mtpa Expansion Execution Schedule
Overall duration 18 months
----------------- ----------
Basic & detailed 4 months
design
Procurement 10 months
Construction 10 months
Commissioning 6 months
----------------- ----------
Comparison to the Previous Proyecto Riotinto Restart and
Expansion Phases
Unit Phase 9.5 Mtpa 15 Mtpa
I Restart Plan Expansion
Plan
------------------------ ------- ----------- --------- ------------
Mtpa
Incremental throughput Ore +5.0 +4.5 +5.5
Nameplate copper ktpa
production Cu 25 40 50-55
Incremental capital
cost US$m $82 $68* $92**
Cumulative capital US$/t
intensity Cu $3,280 $4,000* EUR4,600***
Unit processing EUR/t
cost Ore EUR5.01 EUR4.63 EUR4.25
------------------------ ------- ----------- --------- ------------
* Approximately.
** Based on EUR80.4m and 1.15 USD:EUR.
*** Based on midpoint of stated range; for expected incremental
copper production of 15 ktpa, capital intensity is US$6,100/t
Cu.
Qualified Person Statement
The scientific and technical information contained in this press
release has been prepared under the supervision of Alberto
Lavandeira Adán, Chief Executive Officer of the Company. Mr.
Lavandeira is a graduate of the Oviedo School of Mines with a
Master of Science in Mining Engineering. He is a Member of the
Society of Mining Engineering of Spain since 1980 and has over 38
years mining experience. The scientific and technical information
contained in this press release has been reviewed and approved by
Roger Davey, Chairman and a Director of the Company. Mr. Davey is a
graduate of the Camborne School of Mines, with a Master of Science
in Mineral Production Management from Imperial College. He is a
Chartered Engineer, a European Engineer and a Member of the
Institute of Materials, Minerals and Mining (IMMM) and a "qualified
person" under the meaning of National Instrument 43-101 - Standards
of Disclosure for Mineral Projects.
About Atalaya Mining Plc
Atalaya is an AIM and TSX listed operational and development
group which produces copper concentrates and silver by-product at
its fully owned Proyecto Riotinto site in southwest Spain. In
addition, the Group has a phased, earn-in agreement for up to 80%
ownership of Proyecto Touro, a brownfield copper project in the
northwest of Spain which is currently in the permitting stage. For
further information, visit www.atalayamining.com
This announcement contains information which, prior to its
publication constituted inside information for the purposes of
Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the
publication of this announcement, this information is now
considered to be in the public domain.
Contacts:
Charlie Chichester
Newgate Communications / James Ash / James +44 20 7680
(Financial PR) Browne 6550
------------------------ ---------------------------- ------------
Canaccord Genuity Martin Davison /
(NOMAD and Joint Henry Fitzgerald-O'Connor +44 20 7523
Broker) / James Asensio 8000
------------------------ ---------------------------- ------------
BMO Capital Markets Jeffrey Couch / Neil +44 20 7236
(Joint Broker) Haycock / Tom Rider 1010
------------------------ ---------------------------- ------------
Forward Looking Statements
This press release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities laws. All statements other than statements of historical
fact are forward-looking statements. Forward-looking statements are
often, but not always, identified by the use of words such as
"anticipate", "achieve", "could", "believe", "plan", "intend",
"objective", "continuous", "ongoing", "estimate", "outlook",
"expect", "may", "will", "project", "should" or similar words,
including negatives thereof, suggesting future outcomes. Such
forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may cause the Company's actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements.
Forward looking statements contained herein include, but are not
limited to, statements regarding the 15 Mtpa expansion plan and the
associated increases or improvements in production, processing
capacity, copper recovery, operational efficiencies, capital costs,
operating costs, project economics and financial metrics, future
financing and permitting activities, all of which are based on
various assumptions including that the operational expansion
program will proceed on schedule, that pit optimization will lead
to a larger mineable resource, that copper prices will be at levels
that render the Proyecto Riotinto economic and that internal data
and analyses prove to be accurate. Forward-looking statements also
include those relating to the future financial and operating
performance of the Company and the Proyecto Riotinto, the estimates
and realization of mineral resources and mineral reserves, the
timing and amount of estimated future production, plans relating to
future exploration, expansion, development and production
activities and the realization of expected production and life of
mine economics of the Proyecto Riotinto.
Certain risks, uncertainties and factors that may cause the
actual results, performance or achievements to differ materially
from forward-looking statements include, among others, general
business, economic, competitive, political and social
uncertainties; the actual results of current exploration,
production and expansion activities; the actual results of
reclamation activities; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined;
future prices of metals; the future costs of capital to the
Company; possible variations of ore grade or recovery rates;
failure of plant, equipment or processes to operate as anticipated;
accidents, labour disputes and other risks of the mining industry;
environmental risks; uncertainties regarding reclamation expenses,
title disputes or claims, limitations of insurance coverage, and
the timing and possible outcome of litigation and regulatory
matters; political instability, terrorist attacks, insurrection or
war; and delays in obtaining governmental approvals or financing or
in the completion of development, construction or expansion
activities.
The reader is cautioned that such forward-looking statements are
not a guarantee of future performance and may prove to be
incorrect. These forward-looking statements are statements
regarding the Company's intentions, beliefs or current expectations
concerning, among other things, the Company's and/or its
subsidiaries' results of operations, financial condition,
prospects, growth, strategies, the industry in which the Company
and its subsidiaries operate and are based on the opinions and
estimates of management at the date the statements are made and
should not be unduly relied on. By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future.
These forward-looking statements speak only as of the date of
this press release and the Company does not undertake any
obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof, except as required by applicable securities
laws.
Use of Non-IFRS Financial Measures
This press release refers to certain non-IFRS measures such as
EBITDA, cash costs, total cash costs and all-in sustaining costs.
However, these performance measures are not measures calculated in
accordance with IFRS, do not have any standardized meaning
prescribed by IFRS and therefore may not be comparable to similar
measures presented by other issuers. These non-IFRS measures are
furnished to provide additional information only, have limitations
as analytical tools and should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with IFRS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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