Mr. Alberto Lavandeira reports

ATALAYA MINING PLC ANNOUNCES Q4 OPERATIONS UPDATE AND 2023 PRODUCTION GUIDANCE

Atalaya Mining PLC has released its operations update for the fourth quarter of 2022.

Mining

Ore mined was 3.5 million tonnes in Q4 2022 (Q4 2021: 3.5 million tonnes), compared with 3.8 million tonnes in Q3 2022. Ore mined was 14.9 million tonnes in FY (fiscal year) 2022 (FY 2021: 13.5 million tonnes).

Waste mined was 5.3 million tonnes in Q4 2022 (Q4 2021: 7.3 million tonnes), compared with 5.8 million tonnes in Q3 2022. Waste mined was 24.7 million tonnes in FY 2022 (FY 2021: 30.5 million tonnes).

Processing

The plant processed ore of four million tonnes during Q4 2022 (Q4 2021: 3.8 million tonnes), compared with 3.9 million tonnes in Q3 2022. Throughput was 15.4 million tonnes in FY 2022 (FY 2021: 15.8 million tonnes), demonstrating strong plant performance despite the negative impact of the Q1 2022 transport sector strike and related stoppage. The plant continues to highlight its ability to operate above its 15-million-tonne-per-annum nameplate capacity.

Copper grade was 0.41 per cent in Q4 2022 (Q4 2021: 0.41 per cent), compared with 0.41 per cent in Q3 2022. Copper grade was 0.40 per cent in FY 2022 (FY 2021: 0.41 per cent). Lower grades in FY 2022 were the result of blending with lower-grade stockpiles during H1 2022 due to pit sequencing.

Copper recoveries in Q4 2022 were 86.24 per cent (Q4 2021: 87.04 per cent), compared with 84.62 per cent in Q3 2022 which was negatively impacted by the characteristics of the ore processed. Copper recoveries in FY 2022 were 85.85 per cent (YTD (year to date) 2021: 85.97 per cent).

Production

Copper production was 13,969 tonnes in Q4 2022 (Q4 2021: 13,872 tonnes), compared with 13,453 tonnes in Q3 2022. Copper production was 52,269 tonnes in FY 2022 (FY 2021: 56,097 tonnes). Lower production for FY 2022 was the result of lower grades (pit sequencing) and lower throughput (including the impact of the Q1 2022 plant maintenance stoppage).

On-site copper concentrate inventories at the end of Q4 2022 were approximately 3,529 tonnes. All concentrate in stock at the beginning of the period was delivered to the port at Huelva.

Copper contained in concentrates sold was 14,027 tonnes in Q4 2022 (Q4 2021: 13,568 tonnes) and 52,323 tonnes in FY 2022 (FY 2021: 61,662 tonnes).

Select financial highlights

Realized copper price

The average realized copper price excluding QPs closed during the period was $3.70 per pound (lb) in Q4 2022 (Q4 2021: $4.40 per lb), compared with $3.52 per lb in Q3 2022. The average spot copper price was $3.63 per lb in Q4 2022. The average realized copper price excluding QPs closed was $3.96 per lb in FY 2022 (FY 2021: $4.22 per lb).

Provisional revenue adjustments

For Q4 2022, settlement adjustments (on QPs closed during the period) and fair value adjustments (for open QPs based on copper forward curve prices as at Dec. 31, 2022) amounted to positive five million euros.

Balance sheet

Despite cost inflation and the impact of unprecedented electricity costs in 2022, Atalaya's balance sheet remains strong with unaudited consolidated cash and cash equivalents of 126.2 million euros at Dec. 31 2022.

Net of current and non-current borrowings of 73 million euros, net cash was 53.2 million euros as at Dec. 31 2022, compared with 55.6 million euros as at Sept. 30, 2022, and 60.1 million euros as at Dec. 31, 2021.

2023 production guidance

The company expects that the strong operating performance shown in recent quarters will continue into 2023, with the plant at Riotinto maintaining throughput above nameplate capacity and copper grades improving from 2022 levels. Accordingly, copper production for 2023 is expected to be in the range of 53,000 to 55,000 tonnes.

Consistent with prior years, the company will provide cost guidance for 2023 when it reports its 2022 annual results.

Electricity market in Spain

Situation update

During 2022, electricity prices in Spain were at unprecedented levels as a result of the impact of the war in Ukraine on the European and global energy markets. Severe spikes in natural gas prices in Europe pushed electricity prices in Spain to over 500 euros per megawatt-hour (MWh) in March, 2022, and similar levels in late August and early September, with average realized prices for Q3 2022 reaching around 290 euros per MWh.

Electricity prices moderated in Q4 2022, due to the combination of mild weather in Europe, good supplies of LNG (liquified natural gas) into Europe and a strong contribution from wind generation in Spain. As a result, estimated realized electricity prices for Q4 2022 were approximately 170 euros per MWh, which is over 40 per cent below Q3 2022 levels of around 290 euros per MWh.

For FY 2022, the estimated realized electricity price is expected to be approximately 240 euros per MWh, compared with FY 2021 prices of approximately 65 euros per MWh. As previously disclosed, an increase or decrease in realized electricity prices of 100 euros per MWh results in an increase or decrease, respectively, to the company's annual operating costs of around 37 million euros.

Electricity procurement for 2023 and beyond

As a result of the electricity price so far in 2023 and the expected benefits from two key company specific electricity procurement initiatives, Atalaya is optimistic on the outlook for overall electricity costs for FY 2023 and beyond.

On Jan. 1, 2023, the company's previously announced long-term power purchase agreement (PPA) took effect. The 10-year agreement will provide the company with approximately 31 per cent of its current electricity requirements at a fixed rate that is over 75 per cent lower than the estimated average realized electricity price in 2022 and also below the rates realized in 2021.

The company continues to advance construction of its 50-megawatt solar plant at Riotinto, which is expected to provide approximately 22 per cent of its current electricity needs when fully operational. Most of the materials are now on site and start-up of the 50-megawatt solar plant is expected in H2 2023. Combined, the 50-megawatt solar plant and long-term PPA will provide over 50 per cent of the company's current electricity requirements at an average final cost of less than 40 euros per MWh.

As previously disclosed, the company continues to evaluate additional renewable power initiatives that could deliver further low-cost and carbon-free electricity for its operations at Riotinto, including wind turbines. Following the installation of an evaluation tower in September, 2022, new wind measurements are now being compared with the extensive historical ground-level data in order to establish confidence in the area's wind characteristics and determine the viability of developing a small wind farm at Riotinto dedicated to self consumption.

Asset portfolio update

E-LIX phase I plant

The company continues to advance construction of the E-LIX phase I plant. In recent weeks, activities have included the completion of most civil and structural work, with equipment now being assembled. The plant is expected to be ready for commissioning toward the end of H1 2023.

Once operational, the E-LIX plant is expected to produce high-purity copper or zinc metals on site, allowing the company to potentially achieve higher metal recoveries from complex polymetallic ores, lower transportation and concentrate treatment charges, and a reduced carbon footprint.

Riotinto district -- San Dionisio and San Antonio

The company continues to advance a preliminary economic assessment (PEA) for a scenario that combines Cerro Colorado reserves with higher-grade material from San Dionisio, which has the potential to increase copper production by increasing the blended head grade processed at Riotinto's 15-million-tonne-per-annum plant. The PEA is expected to be completed during H1 2022. The permitting process for San Dionisio also continues.

Riotinto district -- Proyecto Masa Valverde (PMV)

Three core rigs continue to be active and are focused on stepout drilling at the Masa Valverde deposit, resource definition drilling at the Campanario trend and drill testing fix-loop electromagnetic (FLEM) anomalies at the Mojarra trend. A comprehensive update on recent exploration results at these targets was announced in November, 2022.

The second hole (MR02) drilled at the Mojarra trend, in a previously undrilled area, intersected massive sulphides at 434 metres (m) depth. Assay results returned a main mineralized interval of 18.75 m at 0.84 per cent copper (Cu), 0.63 per cent zinc (Zn), 0.66 per cent lead (Pb) and 76.24 grams per tonne (g/t) silver (Ag), including a higher-grade interval of 6.80 m at 1.22 per cent Cu and 101.60 g/t Ag.

Stepout drilling in the westernmost area of the Masa Valverde deposit discovered a new high-grade zinc zone in hole MJ54, including a main mineralized interval of 18.00 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 from 852 metres depth.

Resource definition drilling at the Campanario trend continues to encounter shallow, massive and semi-massive sulphides with, in cases, associated high-grade intersections. For example, hole CA42 in the western part of the Campanario trend assayed 7.50 m at 0.45 per cent Cu, 1.09 g/t Ag and 6.67 g/t Au from 35 m depth.

An airborne gravity gradiometry (AGG) and magnetic survey covering the entire PMV is near completion. AGG is a leading technology in the search for buried mineral deposits, especially those of the size that is typical in the Iberian pyrite belt.

Work continues on the PEA which will consider operating PMV as a satellite deposit by processing mined material at Riotinto's 15-million-tonne-per-annum plant. Further metallurgical testing for the Masa Valverde and Majadales deposits is now planned for inclusion in the PEA, which may also include new results from the regional drilling program, therefore, the company now expects the PEA to be completed no earlier than H2 2023. The permitting process for PMV is also continuing.

Proyecto Touro

Atalaya remains fully committed to the development of the Touro copper project in Galicia, which could become a new source of copper production for Europe. Running parallel with the permitting process, the company is focused on numerous initiatives related to securing the social licence, including engaging with the many stakeholders in the region in advance of its plans to submit a new improved project design. Positive and favourable feedback from numerous meetings with municipalities, farmer and fishermen associations and other industries indicate meaningful support toward the development of a new and modern mining project.

The company is now operating a new water treatment plant at Touro, which is addressing the legacy issues associated with acid water runoff from the historical mine, which closed in 1987. The construction of the treatment plant was contemplated in the original project proposal, but Atalaya volunteered to fix the historical acid water issues prior to the new environmental impact assessment (EIA) in order to demonstrate its operating philosophy and the benefits of modern operating systems. The fieldwork carried out by Atalaya has resulted in an immediate and visible improvement of the water systems surrounding the project.

Atalaya continues to be confident that its approach to Touro, which includes fully plastic lined thickened tailings with zero discharge, is consistent with international best practice and will satisfy the most stringent environmental conditions that may be imposed by the authorities prior to the development of the project.

Proyecto Ossa Morena

Two short drilling programs were completed at the Hinchona and Chaparral copper-gold prospects, which are both located in the central part of the district.

At Hinchona, four holes totalling 1,874 m were completed, with the initial results previously announced in November, 2022. The best results were in the southernmost hole, HIN04, with several mineralized intervals such as 14.95 m at 0.29 per cent Cu from 239.35 m depth and including two higher-grade intervals of 3.40 m at 0.80 per cent Cu, 1.84 g/t Ag and 479 parts per million (ppm) cobalt (Co) and 1.45 m at 1.01 per cent Cu and 6.04 g/t Ag.

At Chaparral, four holes totalling 1,185 m were recently completed and results will be published once the exploration campaign is completed. Drilling at the flagship Alconchel-Pallares copper-gold project is expected to commence during Q1 2023.

Riotinto East

Drill target definition continues to progress and the first drill testing of selected anomalies is planned to start during Q1 2023. An airborne gravity gradiometry and magnetic survey covering the entire project will commence shortly.

Alberto Lavandeira, chief executive officer, commented:

"We are pleased to have closed 2022 with a strong quarter, allowing the company to deliver solid production for the year despite the disruption during Q1. The year was dominated by geopolitical and macroeconomic factors, including war, cost inflation and an unprecedented energy crisis in Europe, but for the most part, our operational performance was not impacted.

"We look forward to 2023 and expect Q4's momentum to continue, both in terms of operations and also with respect to energy prices. The combination of lower market electricity prices and the contribution from our long-term PPA and 50-megawatt solar plant are expected to reduce our costs materially compared with 2022.

"Despite the cost headwinds we faced, our balance sheet remains strong and will allow Atalaya to continue to invest in growth and cost reduction initiatives, including E-LIX, higher-grade orebodies and exploration across our portfolio. In addition, our financial strength means we are well positioned to develop Touro should approvals be granted, which could become a new source of copper production in Europe."

This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No. 596/2014.

About Atalaya Mining PLC

Atalaya is a 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-million-tonne-per-annum 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.