Atalaya Mining Copper (LSE:ATYM) — AGM 2025

0:01 Good morning, and welcome to the ATALAYA MINING COPPER, SA AGM twenty twenty five. Conference Call. The company may not be in a position to answer every question received during the meeting itself. However, the company can view all questions submitted today and publish responses where it's appropriate to do so. I'd now like to hand you over to Neil Gregson, non executive chairman. Good morning, sir.

0:28 Good morning. Thank you. Good morning, ladies and gentlemen. It is my pleasure to welcome you to the Annual General Meeting of ATALAYA Mining Copper, S. A. This is my first as Chair of ATALAYA. It's now twelve noon Central European Time, the time appointed meeting. I would like to introduce my fellow directors, Alberto Lavendera, our CEO Kate Harcourt, our senior independent director and chair of the board's sustainability committee Carol Whittle, chair of the board's audit committee, Hussein Baumer, chair of the board's remuneration committee, Steven Scott, chair of the board's physical risk committee, and Coriccio Gandalev Ifkiero, with apologies from Jesus Fernandez.

1:15 Before we proceed with the formal business of the meeting, I would like to inform shareholders that resolution 13 b, as set out in the notice of the meeting, is being withdrawn and will not be put to the meeting today. The decision has been made by the board since it is clear that the resolution does not have sufficient support from shareholders. In accordance with article fifteen one of the company's articles of association, voting on all proposed resolutions set out in the meeting call will be taken on a poll. That is to say each ordinary shareholder present in person or by corporate representative or by proxy has one vote for each ordinary share held.

2:02 According to the list of votes represented at the meeting prepared by the company's proxy scrutineer, Santander Investment S. A, there are 61,076,554 shares and votes represented in person or by proxy at the beginning of the meeting. That is to say 43.39% of the company's voting share capital is present in person or by proxy. I can therefore confirm that this meeting is duly quorate and on second call and validly constituted. The notice of the meeting, proposed resolutions, and reports to be considered at this meeting have been available to all shareholders for the required period.

2:51 With your permission, I would like to take note, to take the notice of meeting as read. Are there any objections?

3:02 Thank you. I see that there are no objections. The notice of meeting invited shareholders to submit in writing in advance any questions concerning items on the agenda. The secretary informs me that no shareholder questions relating to the formal business of the meeting have been received prior to the meeting. Would any shareholder present here today like to raise any questions concerning items on today's agenda?

3:32 There being no further questions or no questions, I will now propose each resolution to the meeting. The full text of each of the resolutions is set out in the document entitled proposed resolutions that was published on 05/14/2025 and amended on the 06/02/2025. With your permission, I'd like to take the full text of each of the resolutions as read. Are there any objections? Thank you. I see that there are no objections. Santander has advised me that the total number of valid proxy votes that have been received in respect of each resolution, the number in favor, the number against, and the number directed to be withheld. Full details will be displayed on the screen as each resolution is proposed to the meeting.

4:21 With your permission, I intend intend reading aloud only the percentage of votes in favor. Are there any objections? Thank you. I see that there are no objections. As the as there is less than 50% of the voting capital at present, in order to be passed resolutions ten, eleven, twelve, thirteen a, fourteen, and fifteen require at least two thirds of the votes cast to be in favor. All remaining resolutions require an absolute majority of the votes cast to be in favor. Are there any shareholders present at the company's registered office in Spain or here in London who have not yet cast their proxy votes in advance of the meeting?

5:14 I see that there are none. Sorry. Do you would you like to cast a vote? I will vote in line with the. Right. Do you do you want us to add to the votes or are you happy to?

5:37 Okay. So I would I note that there was one shareholder present who's has not voted. Well, the the the the registered shareholders for voting. Okay. So on the register, don't think there's a registered shareholder present.

6:00 Okay. Well, let's move. Yeah. Okay. So yeah. Let's move on. Of those shareholders present in person or by corporate representative or by proxy who have already cast their vote their cast their proxy votes, do any of you wish to change your vote in relation to any of the resolutions?

6:26 I see that no shareholder wishes to change their proxy vote cast in advance of the meeting. I put resolution one to the meeting, which deals with the approval of the 2024 annual report and financial statements. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution one has been duly passed by a majority of 97.93%. The actual numbers of all the resolutions will be shown on the screen for the people present in the room. I put resolution two to the meeting, which deals with the approval of the 2024 sustainability report.

7:13 Shareholders present having confirmed that they do not wish to change their proxy voting instructions. I declare that resolution two has been duly passed by a majority of 98.04%. I put resolution three to the meeting, which deals with the approval of the corporation management actions for the 2024 financial year. Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declare that resolution three has been duly passed by a majority of 97.62%. As announced on the 03/18/2025, the board has proposed a final dividend for the 2024 financial year of dollars 0.03 per ordinary share, which was then equivalent to approximately 2.3p per share.

8:15 Payment of the final dividend is subject to shareholder approval at this meeting of this resolution. Resolution four deals with the allocation of the 2024 results and approval of the dividend. I put resolution four to the meeting. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution four has been duly passed by a majority of 98.04%. I now turn to the resolutions, relating to the election and reelection of directors, Biographical details of each director seeking election or reelection are contained in both the main market version of the company's 2024 annual report and in the document entitled proposed resolutions.

9:07 I put resolution five a to the meeting, which pertains to the reelection of Jesus Fernandez. Shareholders present haven't confirmed that they do not wish to change their proxy voting instructions. I declare that resolution five a has been duly passed by a majority of 71.66%. As resolution five b pertains my own reelection, I will hand over to Kate Harcourt and have a drink of water. I put resolution five b to the meeting to reelect mister Neil Dean Gregson as a director for the period of one year. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that Resolution 5b has been duly passed by a majority of 93.66%.

9:56 I'll now hand back to Neil. Thank you, Kate. I put Resolution 5c to the meeting, which pertains to the reelection of our CEO, Alberto Lavendera. Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declare that resolution five c has been duly passed by a majority of 95.74%. I put resolution five d to the meeting, which pertains to the reelection of Kate Richards. Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declare that resolution five d has been duly passed by majority 93.71%.

10:43 I've put resolution five e to the meeting, which pertains to the reelection of Stephen Scott. Shareholders present having confirmed that they do not wish wish to change their proxy voting instructions. I declare that resolution five e has been duly passed by a majority of 92.14%. I put resolution five f to the meeting, which pertains to the reelection of Carol Whittle. Shareholders present having confirmed that they do not wish to change their proxy voting instructions. I declare that resolution five f has been duly passed by a majority of 97.89%. I put resolution five g to the meeting which pertains to the elect election of Maria del Coriccio Gonzales Ifiedo.

11:32 Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution five g has been duly passed by a majority of 98.04%. I put resolution six to the meeting, which relates to the 2024 annual report on directors' remuneration. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution six has been duly passed by a majority of 72.13%. I put resolution seven to the meeting, which relates to the director's remuneration policy. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution seven has been duly passed by a majority of 96.35%.

12:32 I put resolution eight to the meeting. This resolution relates to the ratification of long term incentive plan and the authority to allot a maximum of 5,471,999 shares to satisfy awards made under the plan. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution eight has been duly passed by a majority of 73.70%. I put resolution nine to the meeting, which relates to the proposed one off transitional share option award to the CEO. Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declare that resolution nine has been duly passed by a majority of 71.13%.

13:34 I I put resolution 10 to the meeting. This resolution grants authority for the company to purchase its own shares. Shareholders present having confirmed that they do not wish to change their proxy voting instructions I declare that resolution 10 has been duly passed by a majority of 98.01%. I put resolution 11 to the meeting. A report on this resolution was published with the rest of the meeting documentation on 05/14/2025. This resolution grants authority for the company to increase the company's share capital by up to 50%. Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declare that resolution 11 has been duly passed by a majority of 87.36%.

14:31 I put resolution 12 to the meeting. A report on this resolution was published with the rest of the meeting documentation on the 05/14/2025. This resolution grants authority for the allotment of securities. Shareholders present having confirmed that they do not wish to change their proxy voting instructions have declared that resolution 12 has been duly passed by a majority of 87.51%. I put resolution 13.1 to the meeting. Report on this resolution was published by with the rest of the meeting documentation on the 05/14/2025. Resolute resolution 13.1 is a general authority to disapply pre preemption rights.

15:25 Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declared that resolution 13 a or thirteen one has been duly passed by majority of 97.99%.

15:42 I put resolution 14 to the meeting. A report on this resolution was published with the rest of the meeting documentation on the 05/14/2025. This resolution approves the amendment of the company's articles of association to to permit general meetings to be held in London, UK, as well as in Seville, Spain. Shareholders present having confirmed that they do not wish to change their proxy voting instructions I declare that resolution 14 has been duly passed by a majority of 9898.04%. I put resolution 15 to the meeting. A report on this resolution was published with the rest of the meeting documentation on the 05/14/2025.

16:30 This resolution approves an an amendment to the company's articles of association to require disclosure of interests in the company's shares.

16:40 To the extent permissible under Spanish law, this amendment broadly replicates the equivalent provisions in section seven ninety three of The UK Companies Act. Shareholders present having confirmed that they do not wish they do not not wish to change their proxy voting instructions and declare that resolution 15 has been duly passed by a majority of 98.04%.

17:10 I put resolution 16 to the meeting, which relates to the reduction in the notice period required to call extraordinary general meetings from one month to fifteen calendar days. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution 16 has been duly passed by a majority of 96.64%.

17:38 I put resolution 17 to the meeting. This resolution delegates the necessary powers and authorizations to put into effect all the resolutions passed at this meeting. Shareholders present having confirmed that they do not wish to change their proxy voting instructions and declared that resolution 17 has been duly passed by a majority of 98.04%. I put resolution 18 to the meeting. This resolution relates to the approval of the minutes of this meeting. The minutes of this meeting have been drawn drawn up in accordance with the results of the voting and the proceedings of this meeting. With the permission of the meeting, I propose that the minutes be taken as read and that the meeting proceeds to consider their approval.

18:29 Are there any objections? Thank you. I see that there are no objections. The minutes will therefore be taken as read. Shareholders present having confirmed that they do not wish to change their proxy voting instructions, I declare that resolution 18 has been duly passed by a majority of 98.04%.

18:54 As previously announced, Hussein Bama is retiring at the conclusion of this annual general meeting. He has served on the board since September 2015. And during his tenure, he has served as a member of and chaired several of the board's committees. On behalf of the board, I would like to extend my thanks to Hussein for his very dedicated service throughout his nine year tenure on the board. 10? Close to close to 10. Nine and a bit year ten year on the board. That sounds better. Thanks thanks for your all your great help. I would ask the secretary to release the required announcement confirming that all the resolutions have been passed at the meeting and to make available on the company's website the voting results.

19:49 I would like to thank those shareholders who attended in Seville and in London and those who who availed themselves of the webcast facility for their interest. Ladies and gentlemen, that concludes the business of the meeting, and I declare the formal business of the meeting closed. And I will now hand back to Paul. Fantastic. Thank you very much indeed for running through the AGM today. I now believe I'd like to hand you over to Alberto to run through a short presentation and take any questions you have. Do feel free to submit those questions just using the Q and A tab on the right hand corner of your screen, and I'll pick up from you at the end. Thank you.

20:39 Good morning. Good morning, ladies and gentlemen. I'm going to go through a very short presentation looking at the results and accomplishments that we had last year. And, also, I will go through the near term future of this company, how things are evolving in the almost half year that we have gone through, and how the company looks in the next few years. '24 was a transitional year, I would say, with some things that were excellent and some things that were not as expected. Starting from the operational and financial results, we produced 46,000 tons of copper, with a record throughput of the plant, of 15,900,000 tons, which is more than the design rate of 15,000,000 tons. This was achieved with cash cost of around $3.26 all in sustaining costs and generated €32,000,000 EBITDA, profits and an EBITDA of around €66,000,000.

21:53 Cash flow was €53,000,000, and free cash flow was negative of €12,700,000 due to the investments that we had to do during this year. The results were slightly lower than we had expected due to lower production, but we ended up with excellent balance sheet, and we kept our net cash position very similar to what we had previous years. It was not only it was not only the financial results were important. I think we had set some goals in the previous meetings. One of them was to move to the to the main market out of the out of AIM, which was something that some of our key shareholders had asked for.

22:39 We also moved our legal domicile in Cyprus to Spain that had effect at the end of the year. And this was also a requirement that was needed to be able to to be part of the FTSE index sometime in the future, something that we have achieved in the first part of of twenty twenty five. And besides that, we paid and we continue to pay the dividend, a small dividend, and we proposed another final dividend of $0.03 cents per share dollars per share, basically confirming our stated discipline of giving back some of the money even knowing that we'll have to be reinvested in the future years.

23:28 Where the investments are going to come with our growth projects. We are not a dividend company. We are a growth company, and we have certain assets. One is the federal Colorado pit, which is is being is working, but our growth project is very close to Cerro Corral, this call San Benicio. And finally, we got the put all the papers to get the permits, which we got this year. But last year, we started already with the pre stripping with an interim pit that we were allowed to start with. Our next growth project is Toro. Toro is a project in the North Part of Spain, as you know. And finally, last year, more or less at this time of the year, the the regional government, the Chunta de Galicia, declared this project strategic, which means that they they would streamline and push the the permitting of this project, which in three should be around one year, which is very close to where we are getting.

24:25 Of course, interruptions in the process can extend this deadline, but really put some pressure in the issue to the Galicia to give the permits of this project. Other assets that we have been working is is the continue working with Elix, which basically is a system to be able to leach complex sulfides where we have lots in in Spain and specifically in Vuelva, and also even they are potentially there in an exploration asset that we have in Sweden. One of these assets is Massa Valverde, where we continue exploration and advancing towards development with respect to this year. Another and we also signed an agreement for exploration in a farm in into belts in the northern part of Sweden, which are very well known for hosting VMS deposits.

25:26 Last but not least, we can prove we continue with our highest standards in ESG, and safety, very low frequency accident frequency, lowered our consumption rates of water in Spain, installed a solar plant, where we have completed in this operation operation in operation, the first phase. 50 megawatts is the largest self consumption solar plant in Spain for a sing single, consumer. And, related to relate and and, also, we published our sustainability report on '23. Related to also to corporate matters, Neil Gretchen was appointed chair, substituting Roger Davy after a long servicing with the company, and Kate Harcourt Harcourt was was appointed senior independent director.

26:30 We also had Carol Wittel appointed as independent normal executive director. So this is what happened during 2024. So how are things looking in '20 first quarter twenty five and even the first almost three months of of twenty five? There are some graphs shown in the screen, but basically showing that the the plant is performing very well, almost at record levels. The recovery is slightly lower than previous quarters due to the presence of startup ores from San Dionysio. But the combination of both very good recovery, better grades, and and better recovery basically, has set us set almost a record copper production in levels that have not been seen since three or four years ago. As a result of that and very good copper prices, our revenues were company record.

27:31 And also, the EBITDA over €50,000,000 was the higher since four years ago before the crisis of the gas and crane invasion. As a result of that, we had a we continue to have a very good cash position with very good working capital, and the company is very well placed to continue with these levels in the in in the rest of the year. As we are now in the AGM, I can report that most of the second quarter is already gone. So far, the production is going quite well. The copper price is also maintaining very good levels, so we expect to have a a very good quarter, close or very similar or maybe even better, than the first quarter of two thousand and twenty four.

28:27 Looking a little bit of our assets and how we were able to do that is that in the picture, you will be able to see the the pit that's providing the the ore during these last ten years, which is called in the back part of the picture. In the front part of the picture, you see the interim development of the Saint Denisio Pit. So you can see, first of all, in the pictures that we are already working there, mining a small part of the pit, which slightly oxidized. Thus, that's the reason why we are going to have a slightly lower recoveries. But also in the left part of the picture, it's shown that it contains very good copper grades, double the grade of the Federal Corallo Pit. And in the lower part, it also contains zinc, which means that we are looking forward to to mine this polymetallic includes including zinc in the lower part of the pit.

29:20 One thing you will notice is that they have there is a road there divided in both pits. Of course, that road needs to be moved, and we have advanced the movement of that road. And the thing is it's not going to be a problem at all. In the back end of the picture, you see a white shadow. That's the the solar plant, which fully is operational right now. We have mentioned polymetallic. As you know, we have been betting in in in using the system for polymetallic complex ores. It has been a very difficult year because being something totally new, with new people, new hires, new equipment, and new system. I won't say that the the the results have been, their operation is working quite well, but still needs to to perform to the highest capacity in order to be to prove its economics.

30:13 We continue to support this, and the reason why we are supporting this has been is that using differential flotation to for complex copper and zinc ores, the recoveries that you can get with global flotation plus LX are much larger, so we would be able to use this system in deposits that are very complex. One of the deposits that's very complex is the Massimo Bernal deposit, which is the one shown in the picture at the left. It's a very large deposit of around 90,000,000 tons of sulfides shown in red. We have also discovered our exploration teams have discovered three smaller deposits called, Majadales, Campanario. It's a part of and several others actually not shown in this picture, which are very complex and will require some of these systems like ELX. But in the meantime, our our geologists have discovered one zone that's only copper shown in the pictures as red. We have four rigs right now as we speak, drilling that that area because that area is is copper only with very good grades. We'll be reporting those soon.

31:22 And that type of material, you can dump into the plant directly without having to modify the circuits and produce extra copper from the same installations. We do have already all the permits to do start this, and we are basically waiting for the final investment decision in this in this case. And last but not least, the the the, really, the future of this company, the high value is total project. Total, we are, as I said, we are in the the last stages of of permitting. And why we like total is that we will be producing around 30,000 tons of copper, so slightly lower than Rio Tinto, but with a very low capital intensity of less than $10,000 per ton, which is less than half of what's the normal projects in the world, CapEx is around €250,000,000.

32:22 And we have progressed the the financing of this to almost a final level. Why we like the project is it has a slightly lower strip ratio than than Rio Tinto to versus to 2.2, slightly higher grade. You get better recoveries, and you get better recoveries in a much better concentrate grade, which, with which means higher pay payability, almost one point more, and with very low penalties, basically nothing. It's a extremely clean concentrate. All these, features make this concentrate very valuable for the company because as you probably all know, there's a huge deficit of copper concentrates in the world, and this deficit, it seems here to stay for quite a few years.

33:14 So the ore itself also from the operational point of view is softer, slightly softer than Rio Tinto, and the haulage distance is low. What does all this mean? It means probably around 0.5 a dollar per pound lower protein cost than than Rio Tinto. So it's a it's a product that has extreme value for for the company. With all this, this basically is a summary of what I have said. This company is not a dividend payer. It is a dividend payer, but that's not the scope of the the company. We are going to be around 50,000 tons this year of copper, but there is the potential to grow the stock work. The copper only ore, at some initiative can add up to 10,000 tons of copper.

33:59 The copper only ore of Marcia Valverde has the potential of around the same thing. The polymetallic will increase because it has, extra sulfides in the form of zinc and lead, but the key growth is going to be, around 30,000 tons of copper for from total. With these things, it means that with our projects in the next few years and not much more than three, our companies is has the potential to be basically doubling the capacity of production, which is something that, not many companies can say. And I think with that, this is the this is end of my presentation. And probably before further introduction, maybe I could go directly to the questions that have been presubmitted and those that have that I can read in my screen.

35:03 So one question is how effective is LX system? How is it progressing compared with the estimates and estimated precommission delivery in terms of output? If it's progressing, what commercial what commercialization opportunities are available? And are there any deals lined up with off takers? Well, it's progressing. It's taking longer than expected because it's absolutely new. The system is working perfectly well from the operational point of view. In terms of output, I think we are still not in the desire in the design capacity. And about opportunities, I think it's very early to say. I think, we'll be dealing with off takers.

35:51 The real value for us will be the added value that we can get from from deposits that otherwise would not be easy to not be easy to to process. One question. Can you be more specific about the percentage return in dividend of free cash flow? Previously notified us between 3050%. That's correct. We will be giving back 30 or 50% of the free cash flow. In obviously, in this free cash flow, sometimes you deduct some one off investments that are needed, and that's what we have been doing up to up to now. It means that when we do get, higher cash flows due to higher production of higher, copper prices like we did back in 2021, we we provided more dividends than we did, these last few years.

36:54 Just a technicality, but, the minorities for these boats aren't the total of the four boats. They are the four boats minus the boats. Okay. Thank you very much. Yes. We take note of that. We are just reading the the the boats. Another question in the last one is once permits have been granted, how long would it take to bring tow into production? I think, once all the permits are granted with eighteen months, we will be into production. The commissioning should be very fast based on our experience in Rio Tinto, about three months. So in between eighteen months and two years, we'll be at full production Rio Tinto, which in a total, which probably means we're looking at, sometime in year thousand and twenty seven.

37:47 And that's ends up the informal part of the meeting from my side. Any questions present those present here? So Paul, back to you. Thanks. Fantastic. Alberto, thank you very much indeed. Thank you to the Board for updating investors today. That concludes today's session. Again, thank you for updating. Could I please ask attendees not to close the session? You should now automatically be redirected to provide your feedback nor the team can better understand your views and expectations. It's going to take a few moments to complete, and that's greatly valued by the company. On behalf of the Board of ATALAYA MINING COPPER, S. A, we'd like to thank you for attending today's annual general meeting proceedings. That concludes today's session, and good afternoon to you.