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Atalaya Mining PLC
Symbol AYM
Shares Issued 139,879,209
Close 2022-11-23 C$ 4.50
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Atalaya drills 18.75 m of 0.84% Cu at PMV

2022-11-24 09:51 ET - News Release

Mr. Alberto Lavandeira reports

ATALAYA MINING PLC ANNOUNCES UPDATE ON EXPLORATION ACTIVITIES

Atalaya Mining PLC has provided an update on the continuing exploration program at its projects in southern Spain which include Proyecto Masa Valverde (PMV), Proyecto Ossa Morena (POM) and Proyecto Riotinto East (PRE). A total of four rigs are currently active, with three at PMV and one at POM.

Highlights:

  • Mojarra trend at PMV: New potential discovery via intersection of 18.75 metres of polymetallic massive sulphides from the second hole in a previously undrilled area;
    • MR02: 18.75 m at 0.84 per cent copper, 0.63 per cent zinc, 0.66 per cent lead and 76.24 grams per tonne silver, including a higher-grade zone of 6.80 m at 1.22 per cent Cu and 101.60 g/t Ag.
  • Masa Valverde deposit at PMV: Stepout drilling in the western area has discovered a new high-grade zinc zone;
    • MJ54: Including a main mineralized interval of 18 m at 0.25 per cent Cu, 8.30 per cent Zn, 2.49 per cent Pb, 60.17 g/t Ag and 0.89 g/t gold (4.06 per cent copper equivalent);
    • New mineralized zone remains open laterally.
  • Campanario trend at PMV: Resource definition drilling encountered new zones of shallow polymetallic mineralization, including:
    • CA42: 7.50 m at 0.45 per cent Cu, 1.09 g/t Ag and 6.67 g/t Au from 35 m;
    • CA40: 9.80 m at 0.44 per cent Cu, 8.16 g/t Ag and 0.15 g/t Au from 11 m;
    • Drill holes are located west and east of the historical Campanario mine where previously announced drilling defined shallow higher-grade zones.
  • Campanario trend at PMV: Additional drilling around the historical Campanario mine confirmed the lateral and up-dip continuity of the previously defined mineralization, including:
    • CA25: 9.10 m at 0.72 per cent Cu, 3.60 per cent Zn, 2.65 per cent Pb, 73.79 g/t Ag and 0.99 g/t Au from 100.90 m (2.90 per cent CuEq).
  • Hinchona Cu-Au prospect at POM: Initial results from a four-hole campaign included an intersection of 3.40 m at 0.80 per cent Cu, 1.84 g/t Ag and 479 parts per million cobalt;
  • Riotinto East: First drilling is expected to commence shortly.

Alberto Lavandeira, chief executive officer, commented:

"The discovery of the Mojarra trend is very promising and demonstrates the value of the systematic exploration approach being implemented by our geological team.

"We acquired PMV in 2020, having discovered the small but high-grade polymetallic Majadales deposit, and in April, 2022, announced a new NI 43-101 compliance resource estimate for the Masa Valverde and Majadales deposits. Since then we have defined new, shallow and potentially economic mineralization at the Campanario trend and have now made a potentially new discovery at the previously undrilled Mojarra trend.

"All of these achievements, together with the numerous geophysical targets that remain untested, confirm our belief that the ultimate resource potential of PMV is underexplored and far from defined.

"At POM, the encouraging initial results at Hinchona provide confidence that further drilling is warranted, with a focus on finding new zones of economic mineralization and also increasing the currently defined resources at the flagship Alconchel Cu-Au deposit.

"Exploration will remain a key activity for Atalaya in 2023 and our exploration budget is expected to reflect our geological team's recent successes and the growing list of targets across our exploration portfolio. We remain focused on expanding our resource base and identifying higher-grade material that could be processed at our Riotinto plant, potentially providing an uplift to copper production by increasing the blended head grade."

Continuing exploration programs

In the past years, Atalaya has assembled a substantial portfolio of exploration projects in southern Spain. These include PMV and PRE, which are located in the Riotinto district, as well as POM, which is located north of Riotinto. Exploration activities at these projects are consistent with Atalaya's strategy to develop its existing 15-million-tonne-per-annum mill into a central processing hub for material sourced from its deposits in the region.

PMV

Overview

PMV is strategically located approximately 28 kilometres from Proyecto Riotinto, and consists of several VMS-type )volcanogenic massive sulphide) deposits, including Masa Valverde (MV), Majadales, the Campanario trend and now the Mojarra trend. In April, 2022, Atalaya announced a new independent resource estimate for MV and Majadales.

Three core rigs are currently active and focused on stepout drilling at MV, resource definition drilling at the Campanario trend, and drill testing the lateral continuity of the new discovery made at the Mojarra trend.

Since the company's last exploration update, 34 holes have been completed at Campanario, five at MV West Extension and two at Mojarra Trend for a total of about 20,871 m.

Mojarra trend

The Mojarra trend is a two km long, northwest-trending structural corridor, located one km north of the Campanario trend. It is defined by the presence of small, historical manganese and pyrite mines, elevated Cu values in soils, and associated fixed-loop electromagnetic (FLEM) anomalies, all along a complex structural (low-angle faulting) and stratigraphic (including basic volcanics) setting.

Two holes totalling 1,162 m have been completed to date and one more hole is under way. The first hole (MR01) failed to hit any significant mineralization but the second hole (MR02), located in the westernmost part of the FLEM anomaly, intersected 18.75 m of massive sulphides at 434 m depth. Pyrite is the predominant sulphide mineral, but is also associated with visible sphalerite, galena and chalcopyrite. Host rocks are graphitic black shales with felsic tuffs and minor volcanics interbedded. Assay results returned 18.75 m at 0.84 per cent Cu, 0.63 per cent Zn, 0.66 per cent Pb and 76.24 g/t Ag, including a higher-grade interval of 6.80 m at 1.22 per cent Cu and 101.60 g/t Ag.

The next round of drilling will test the lateral continuity of this new zone which, if confirmed, could represent a significant discovery not only at PMV but also in the Iberian pyrite belt.

MV West Extension

Five holes totalling 5,034 m were completed in the western part of the MV deposit with the aim of extending the known mineralization in that direction. The holes were distributed as follows:

  • Holes MJ54 and MJ55 were drilled in the westernmost section of the deposit which currently represents the west limit of the resource envelope;
  • Hole MJ53 was targeting the FLEM anomaly located 300 m west of MV;
  • Holes OD01 and OD02 drill tested another FLEM anomaly located one km west of MV.

MJ54 and MJ55 hit wide intervals of massive sulphide mineralization demonstrating that the system remains open to the west. Hole MJ54 intersected 90.10 m from 823 m depth while drill hole MJ55 hit 19.40 m from 908.20 m depth. In both cases, visible sphalerite, galena and chalcopyrite is associated with the massive pyrite mineralization.

Assay results for hole MJ54 returned two high-grade mineralized intervals of 18 m at 0.25 per cent Cu, 8.30 per cent Zn, 2.49 per cent Pb, 60.17 g/t Ag and 0.89 g/t Au, plus three m at 0.36 per cent Cu, 6.11 per cent Zn, 0.22 per cent Pb, 29.33 g/t Ag and 0.98 g/t Au. A separate lower-grade interval returned 12 m at 0.09 per cent Cu, 2.54 per cent Zn, 1.58 per cent Pb, 51.08 g/t Ag and 0.75 g/t Au. Stockwork-type mineralization intersected above and below the massive sulphides returned low-grade results.

Assay results for hole MJ55 returned 28.50 m at 0.42 per cent Cu, 0.27 per cent Zn, 0.20 per cent Pb and 19.50 g/t Ag. Gold values are not yet available for this hole.

Drill hole MJ53 was the second attempt to hit the core of the FLEM anomaly located 300 m west of the western limit of the MV deposit. However, and as occurred with previous hole MJ47, it failed due to severe drifting problems. Despite those issues, the first hole (MJ47) had intersected massive sulphides which returned 14 m at 0.36 per cent Cu, 0.61 per cent Zn, 0.32 per cent Pb, 18.04 g/t Ag and 0.54 g/t Au (0.78 per cent CuEq).

Drill holes OD01 and OD02 failed to find any significant mineralization. However, a down-hole EM survey on those holes showed a moderate off-hole conductor immediately north of OD1 which will deserve further drill testing.

Mineralization found in holes MJ54 and MJ55 has several positive exploration implications for the following main reasons:

  • Improves the geological model in the west sector of the deposit, providing more lateral continuity to the massive sulphide zones;
  • Suggests that several historical holes were stopped prematurely;
  • Confirms that mineralization remains open laterally, especially to the west, but, more importantly, with associated high-grade results which could be economic even at those depths;
  • Will help to target more accurately the two main FLEM anomalies west of the deposit.

An additional stepout hole, MJ56, is currently in progress with the goal of proving the continuity of the high-grade zone encountered in hole MJ54 approximately 150 m to the northwest.

Campanario trend

Resource definition drilling continues in progress at the Campanario trend with one rig. Since the beginning of the program, the company completed a total of 14,676 m in 56 holes. Assay results for the first 22 holes were announced in July, 2022, which corresponded to drilling around the historical Campanario mine, located in the central part of the Campanario trend. Drilling since then has been distributed as follows:

  • 20 holes on the western part of the Campanario trend, mainly around the California, Descamisada and Descamisada West historical mines;
  • 11 holes around the Campanario historical mine to fill gaps in previously drilled sections to test lateral and up-dip continuities;
  • Three holes around the Cibeles historical mine, situated in the easternmost part of the Campanario trend.

Most of the holes drilled at California, Descamisada and Descamisada West intersected narrow zones of massive, semi-massive and, in some cases, stockwork-type sulphide mineralization. The structural and stratigraphic setting is similar to that at the central part of the Campanario trend as well as the mineralogy and geochemistry. However, assay results received to date were in general lower grade than at Campanario except for some very high Au-Ag intercepts, such as in hole CA42. Among the best results were 7.50 m at 0.45 per cent Cu, 1.09 g/t Ag and 6.67 g/t Au (1.62 per cent CuEq) from 35 m depth in hole CA42, and 9.80 m at 0.44 per cent Cu, 8.16 g/t Ag and 0.15 g/t Au from 11 m depth in hole CA40.

All the recent holes drilled around the Campanario historical mine hit massive sulphide zones and returned higher-grade polymetallic results, confirming the lateral and up-dip continuity of the previously defined mineralization. Among the best results was 9.10 m at 0.72 per cent Cu, 3.60 per cent Zn, 2.65 per cent Pb, 73.79 g/t Ag and 0.99 g/t Au (2.90 per cent CuEq) from 100.90 m depth in hole CA25.

Of the three holes completed so far at Cibeles, located 1.8 km east of the Campanario historical mine, one of them, CA55, intersected a narrow interval of massive sulphide mineralization which returned 2.90 m at 0.69 per cent Cu, 0.11 per cent Zn, 2.61 per cent Pb and 118.10 g/t Ag. Gold values are not yet available for this hole.

Based on the drilling conducted to date, the company may conclude that the central and eastern sectors of the Campanario trend are the most favourable areas to define a small but shallow and higher-grade mineral resource. Consequently, priority will be given to complete systematic drilling along the 1.8 km gap between Cibeles and Campanario and where the promising Cruz Infantes historical mine is located.

PMV exploration potential

Several FLEM anomalies remain pending for drill testing inside the current limits of the property. Priority will be given to the anomalies located south of MV (Alcolea Trend), the northwest extension of the Campanario trend (Campanario northwest extension) and northeast of the Mojarra Trend (Madrono trend).

POM

A four-hole drilling program totalling 1,874 m was completed at the La Hinchona Cu-Au project, located in the central part of POM. Mineralization at La Hinchona is related to a north-northwest-trending structure which controls the emplacement of a diorite porphyry and associated alteration and hydrothermal mineralization. The main target zone is one km long as defined by the alignment of several small historical mines, soil geochemical and induced polarization anomalies. So far only 450 m of the one km long target zone has been drill tested.

The four holes encountered centimetric- to metric-scale zones of hydrothermal alteration and pyrite, chalcopyrite, arsenopyrite, and pyrrhotite mineralization associated with quartz (plus/minus carbonate) veinlets, veins, breccia veins, stockworks and, in some cases, sulphide breccias.

The best results were obtained in the southernmost hole, HIN04, which returned several mineralized intervals such as 14.95 m at 0.29 per cent Cu from 239.35 m depth and included two higher-grade intervals of 3.40 m at 0.80 per cent Cu, 1.84 g/t Ag and 479 ppm Co and 1.45 m at 1.01 per cent Cu and 6.04 g/t Ag. Gold values are not yet available.

Mineralization found in hole HIN04 has positive exploration implications mainly because it represents a mineralogical, textural and geochemical vector toward better grades to the south.

Drilling has just started at the Chaparral Cu-Au prospect where previous drilling had intersected narrow intervals of high-grade Cu mineralization (0.40 m at 2.26 per cent Cu from 92.40 m depth). Drilling at the flagship Alconchel-Pallares copper-gold-ion project is expected to start at the beginning of next year.

PRE

Final granting of the Penas Blancas investigation permit was received in August, 2022. Drill target definition work carried out to date, which included soil and rock geochemistry as well as reinterpretation of the original SkyTEM geophysical data, has evidenced a main east-west-trending mineralized corridor, Coto Vicario, which will deserve immediate drill testing. This corridor is characterized by the alignment of several small historical mines (mainly pyrite), Cu soil geochemical and geophysical SkyTEM anomalies. Grab samples taken from old dumps returned up to 10.25 per cent and 5.90 per cent Cu. Several historical holes drilled on this corridor encountered stockwork-type mineralization, mainly pyritic, but results were not available.

Atalaya exploration program next steps

Drilling will continue with four rigs until the end of the year. Priority will be given to:

  • Investigate the lateral continuity of the new discovery at Mojarra trend;
  • The area between Campanario and Cibeles historical mines where the potential to find more shallow, high-grade polymetallic sulphide mineralization is high;
  • The west extension of the high-grade mineralization discovered in hole MJ-54;
  • Drill testing the Chaparral Cu-Au prospect at POM and to commence infill and stepout drilling at the flagship Alconchel Cu-Au deposit;
  • Commence drilling at the Coto Vicario anomaly at PRE.

An airborne gravity gradiometry (AGG) and magnetic survey is planned to start before year-end at PMV and subsequently at PRE. AGG is a leading technology in the search for buried mineral deposits, especially those of the size that is typical in the pyrite belt.

Qualified person statement

Mr. Lavandeira has reviewed the technical information contained within this announcement in his capacity as a qualified person, as required under the Alternative Investment Market rules for companies. Mr. Lavandeira is the chief executive officer for the company and is a member of good standing with the Association of Mining Engineers of Spain, with over 40 years experience.

About Atalaya Mining PLC

Atalaya is an AIM- and Toronto Stock Exchange-listed mining and development group which produces copper concentrates and silver byproduct at its wholly owned Proyecto Riotinto site in southwest Spain. Atalaya's current operations include the Cerro Colorado open-pit mine and a modern 15 mtpa processing plant, which has the potential to become a centralized processing hub for ore sourced from its wholly owned regional projects around Riotinto that include Proyecto Masa Valverde and Proyecto Riotinto East. In addition, the group has a phased earn-in agreement for up to 80-per-cent ownership of Proyecto Touro, a brownfield copper project in the northwest of Spain, as well as a 99.9-per-cent interest in Proyecto Ossa Morena.

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