Atalaya Mining LON:ATYM, the AIM-listed, Cyprus-based mining and exploration firm, operating a copper project in Southwestern Spain today (20th February) announced its proposed voluntarily delisting from the Toronto Stock Exchange.
Atalaya produces copper concentrates and silver by-product at its wholly-owned Proyecto Riotinto site in southwest Spain. The company, which was founded in 2004, also has a phased, earn-in agreement to acquire up to 80% ownership of Proyecto Touro, a brownfield copper project in the northwest of Spain which is at the permitting stage.
- Quadrise passes milestone test
- IPO Radar: ServiceTitan, Shein, Greatland Gold
- Baker Steel Resources: Veteran team bets on early-stage miners
The company’s management, in a note published for investors, said that the delisting process would go through on 7th March 2023. Atalaya currently trades under the ticker TSE:AYM in Canada, but will continue to trade in London on the AIM market under the ‘ATYM’ code.
The rationale for the delisting, said the management in the statement, was that over the last 36-months, daily trading activity in Atalaya’s ordinary shares on AIM has increased materially and, in the last twelve months, has accounted for around 99% of the aggregate trading volume on both platforms.
Expense and administration
The company’s management decided – given the expense and time taken in the administration of maintaining a listing on the Toronto Stock Exchange, that staying in the board was no longer justifiable.
Toronto still remains a magnet for global mining companies – just not Atalaya. The company said that it would not be seeking shareholder approval for the delisting, as under the TSX listing rules, Atalaya will still be trading on AIM, “which is an acceptable alternative market in accordance with Section 720(b) of the TSX Company Manual.”
With regards to holders of the Canadian-listed stock, the company said; “Following the delisting from the TSX, Canadian shareholders wishing to trade their shares on AIM will require that such shares are made eligible to be transferred and settled though CREST, the United Kingdom based share transfer and settlement system.”
The statement continued: “Shares cannot be transferred and settled through CREST until a shareholder’s CDS Participant broker or the shareholder, if the shares are held in certificated form, as applicable, validly instructs Computershare Trust Company of Canada to arrange for the shares to be held by a CREST participant broker.”
Canadian shareholders will have to complete a ‘Register Removal Request’ form with valid CREST participant account details and submit to Computershare electronically. Atalaya will maintain CDS eligibility for its shares until 10th April, 2023 in order to provide Canadian shareholders with time to complete the process.
Exploration activities
Meanwhile, the company is continuing to dig holes in the ground in Spain – having published a exploration update in November 2022. Management announced “a potential new massive sulphide discovery” at its Mojarra Trend licence, and “a new high-grade zone” at Masa Valverde after operating four drill rigs at Masa Valverde, Ossa Morena and Riotinto East.
At Mojarra Trend the company found a new 18.75m polymetallic massive sulphides (PMS) intersection in the second hole it sunk in the tenement. The discovery did create a bit of momentum for the share price at the time.
Drilling is to commence imminently on Riotinto East.
Retrieval downtrend
The company is also pulling metal out of holes in the ground in Spain and published a production update last month, announcing 3.5 million tonnes (mT) of ore mined in 4Q22 – the same as 4Q21, but 0.3mT down from 3Q22. For the full year, Atalaya extracted 14.9mT, an improvement on the 13.5mT extracted in 2021.
The company also operates a tailings project and mined 5.3mT from waste in 4Q22, down from 7.3mT in 4Q21, and also down from 5.8mT in 3Q22.
On the flip-side, processing improved from 3.9mT in 3Q22 to 4mT in 4Q22, a 0.2mT uptick from 4Q21, despite through-put falling marginally year-on-year and the processing plant continues to operate in excess of its nameplate capacity.
Grade stayed more or less the same year-on-year, but copper recovery declined marginally quarter-on-quarter to 86.24%. All-in, copper production was higher year-on-year to 13,969T for 4Q22, but across the year fell from 56,097T to 52,269T, partially-due to industrial action and a plant maintenance stoppage.
Atalaya’s performance was helped by an uptick in copper prices to USD3.7/lb, up from USD3.53/lb in 3Q22. However, year-on-year prices fell back a bit from USD4.4.lb in 4Q21 which saw a positive adjustment to EUR5m. The company maintained production forecasts of 53,000T to 55,000T for 2023.
Electricity pricing issues
One of the issues Atalaya highlighted was the disruptions to the Spanish electricity supply market as a result of the War in Ukraine, where average prices breached EUR500/MWh in March 2022. Prices had started to stabilise to EUR290/MWh in 3Q22 and a mild Spanish winter saw prices of around EUR170/MWh by 4Q22, helped by the Spanish wind fleet contributing to supply.
Electricity prices remain historically high at EUR240/MWh for FY22, when compared to average prices of EUR65/MWh in FY21. An increase or decrease in realised electricity prices of EUR100/MWh results in an increase or decrease, respectively, to the company’s annual operating costs of around EUR37m.
Atalaya has tried to mitigate this through a long-term power purchase agreement signed at the beginning of the year providing 31% of the company’s estimated electricity requirements at a fixed rate 75% lower than the estimated average realised electricity price in 2022 and also below the rates realised in 2021 for 10-years.
The company is also planning to build a 50MW solar plant at it Riotinto project, which will provide 22% of it electricity needs at the site when up and running. Construction of the proposed solar plant is scheduled for 2H23 and when these two initiatives are combined, will provide the company with an average final energy cost below EUR40/MWh.
Weak growth potential
The company has not excited like some in the sector, Deshe Analytics rates Atalaya as an ‘Underperforming’ stock, saying: “Atalaya Mining published concerning results on Nov 9th 2022. Their growth, value, and income factors performance indicate that company management are not executing well their business plan. These results indicate a weak growth potential for Atalaya Mining Plc’s stock’s price moving forward. As such, Atalaya Mining Plc received an overall score of 55 and a ‘Underperform’ recommendation,” a view The Armchair Trader shared in August 2022.Atalaya opened trading at 355p today, and has offered a year-to-date return of 6.9%, a one-year return of -20.6% with its shares ranging between 183p and 450p over a 52-week period.
The company has a market cap of GBP492.3m.
