Atalaya Mining Copper (LSE:ATYM) — Annual Results

0:01 Good morning, and welcome to the ATALAYA MINING PLC Annual Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I

0:32 would now like to hand you over to CEO, Alberto Avan Deira. Good morning to you. Many thanks. Hello, everybody. Good morning, everybody. Thanks for being with us. Again, I have with me the CFO, Cesar Sanchez and Mike Kristeiner, Head of Corporate Development. And if needed, they will also be available for for to help respond some questions. I'm going to go through the presentation of our results, which will include the the main results of the last quarter of twenty twenty three and the first quarter of two thousand and sorry, in the full year.

1:21 And I will also be give a little bit of highlight of how things are going and the forecast for 2024. 2023 was excellent year, I would say. It was a positive year with, let's say, recovering back to more or less normal conditions from the operating cost point of view. We produced 99% of what we produced the previous year. And we did so even with slightly lower grades that we had in the last quarter, which are already were planned to be there according to the mine plan before we start getting the recoveries of these grades up. But we processed 15,800,000 tonnes with good recoveries of 56,600,000 tonnes. So we achieved cash cost of slightly less than $280,000,000 and only cost of $3.00 9,000,000 This is consistent with the guidance. And I would have to say that this is these are quite remarkable good costs when you consider the type of grades we were able to maintain the cost unit cost per tonne well under control.

2:35 This is basically due to the lower electricity prices. And of course, we had other this lower electricity prices have an effect in other things like balls and the price of lime and price of rain. So the whole thing flows down. In the other hand, we have some higher costs, I'm sorry, how cost in the mining, not because our unit costs were higher, simply we had to move a little bit more tonnes. More tonnes of later, we will not have to move, simply because we needed to move tonnes from the federal existing federal corral pit so that we could move our key equipment. The contractor could move the equipment into the stripping of San Dionisio, which has already started. San Dionisio, just to remind you, is an area with much higher rate.

3:26 Well, with all these operating parameters that went reasonably well, we had an EBITDA of EUR 73,000,000, which is higher, almost EUR 20,000,000 higher than the previous year, mainly due to lower operating costs. Cash flows were also higher. And we invested this extra cash flow from operating activities in our prudent way so we could maintain our free our net cash position under control. And we invested that in building the LX and also

4:05 building the solar plant, which were EUR 18,000,000 in 1,000,000 and EUR 12,000,000, EUR 13,000,000 in all, so basically around EUR 30,000,000. So with all this considering that we are things are going as expected and that the operating costs are under control, the Board decided that we had a good financial position. The Board decided to give a final dividend of $0.04 which basically tops a little bit what we had already. So it's slightly, it's around 20% higher than previous year. But that was not only that. I mean, we had lots of other things going on. We continue with our plans to move away from AIM into the main market. And this is all the papers going. We had slight delay due to the our last attempt, but pretty close to Christmas and year end.

5:03 But finally, this thing seems it's going to be happening in the first weeks of April, so only one month from now. We also proposed the domiciliation from Cyprus to Spain, was basically will allow us to be included in the indexes. And since didn't have any liquidity in Toronto, we decided to cut costs there and to remove the listing in Toronto. So right now, we're basically will be listed in the main market starting in April. The Board, we continue to reinforce the Board. Neil Krexel was appointed the Director, but also I mean, Lead Director.

5:53 But we also continue basically to fulfill the conditions set by the new main market listing. And we will be strengthening the Board in the next months with new independent directors. Although our Board right now is basically formed by independent professionals. From the assets point of view, we saw the first copper cathodes coming out from Elix, although these were only a small amount during the start up of the commissioning of this plant. And the plant continues to be under construction. Right now, they're leaching with zinc.

6:38 We also started moving the waste in San Deniso in order to get to the ore as soon as possible. And also equipment has mining equipment has been order and is about to arrive to this to be able to get this additional waste movement. And from the permitting point of view, we continue advancing in Toro. We got a permit to extend the mine life of Rio Tinto including a huge tailings expansion, which will give us space for new for this for the extra tonnage mine at San Denizio. And we also got the mining permit to for MASSA ABELVE, which means we'll likely start at the end of the year a ramp to access the higher grade that's closer to surface.

7:33 From the sustainability side, we continue to set strong targets. We advanced the construction of our solar plant, which is there is some delays there, but it's going to be up and running in the second quarter of this year. And of course, we continue with the water treatment plants at total, which are key to get the permits. And of course, we publish a new sustainability report. And the next one is going to be coming out soon. We already seen some the drafts, it really looks very professional and very nice. So going through the details of those, I mean, most of it has been already explained, but I think the graph explains very well what happens. I mean, you see in the graphs in the right side, you would see that we passed more tonnes, almost a record.

8:24 Remember, this plant was supposed to be treating 15,000,000 tonnes, and we have been able to treat 16,000,000 tonnes equivalent. So the plant is running well. The recoveries in the last quarter was slightly lower due to the lower grade and production was similar to previous quarters. But since we had some good production in the second quarter, the overall for the year has been quite constant and you see that the revenues are similar to the previous year. So basically, although the copper price was slightly lower sorry, production was slightly lower, the revenues were basically the same. EBITDA was slightly lower in the last quarter, but overall, in the year, you will see later that it has been better than the previous year.

9:15 And the nat cat's position stayed very similar to our previous levels, even having invested around CHF 50,000,000 in this quarter.

9:27 And our profits, as I said before, similar to previous year, even with this low quarter. Coming back to the whole year, revenues were slightly lower due to lower copper prices and slightly lower production. But since we had much lower operating costs, we had a better EBITDA and better profits and much better cash flow and allow it allowed us to continue investing in, let's say, investing in the operations in the future. And we still kept a very good cash position at the end of the year with around €120,000,000 and a net cash position without any net debt of €54,000,000 Working capital has gone down a little bit, but that's simply due to our short term debt.

10:20 It's a mixture of short term and medium term debt medium term meaning three years and depending on the maturity of that debt, which normally we can roll because there are, yes, revolving facilities. It doesn't mean too much. But it shows that our financial position in the last three years, in spite of this high cost have been high cost structure, have been maintained quite well, while we continue to invest. And this is fully disclosed in the Slide 10, where we show the costs in the quarter and the cost for the full year. Second column from the right, you will see the year 2023, what we are discussing compared to 2022.

11:07 The main difference, as you can see, is much lower cost from processing. That's mainly due to electricity, but also due to lower line cost, lower steel balls, lower things. Other things like mining is slightly higher due to the, as I said before, more and more material in order to get to the better grades of Sandinicio and overall lower site costs. Rest of the things like freight and off-site are quite similar to previous years, slightly lower, but we expect to see much better cost in this next year. We will go later with the guidance. And there are reasons for that. The treatment charges are falling down.

11:53 Freight, it's flat going down. And we also expect to see lower inflation in other parts. Corporate costs and the rest of things are very similar. The main question here is much higher in capitalized stripping, and this is due to the starting activities in Southern Asia. This is as expected. As you remember, there was a plan to mine Southern Asia and Cerro Corral simultaneously, and the first movement of material was going to happen in 2024. We accelerated that a little bit because we wanted to see if we can compensate the slightly lower rates that were predicted in this year as soon as possible with the higher rates that are going to be found at the Sindel Nusupol Pit. Overall, there's important reduction in all in sustaining costs.

12:41 I should probably remind here that our within our capitalized stripping and within our mining costs, we have the cost of the contractor includes the purchasing of equipment, the replacement of the mining fleet. And this is very relevant since, for example, just to get to the Southern East area, the contractor is buying has already ordered and they are arriving five new trucks with much larger size, a 50% larger capacity and excavator that's double the size, simply to expand. And this is totally out of our costs. So within the cost of excavation, those costs are included, and you don't have to account in addition to that for the purchase of a new mining fleet.

13:32 Most of these good results, as I said before, are due to the lower cost of energy. You can see that 2023 has been much lower than the horrible year of 2022. But I think the important point here is also to show that 2024 has already started in a very good mode. We have had around two months that where the prices have been around 50, so well within the prices in the long term. And remember, as a reminder, that we have hedged, we have covered around 30% of our production for the future. Those prices are around the 50s, plus the solar plant will provide price much lower. So our future cost will be similar to what we had in days 2021 or even '19. So that's a big part of the the equation that gave rise to much higher costs during during 'twenty two are, I believe, gone.

14:38 Just to compare with peers into the industry, and we always do that not to show ourselves versus others, simply to show that due to the way of reporting that some people do not include in the C1 costs, the mining cost, the capital required to replace the fleet in the mining costs. Our C1 costs are normally higher than average, but later, the difference between C1 and all in costs are much lower, which means you can see there that in spite of the big increase in the left side of the columns, the increase in costs that we saw in 2022 due to the electricity prices. Since then, we have been able to control the costs and to keep them well within the industry average, which I think is relevant. Because at the end, what matters is not the C1, it's the all in cost. You always need to replace fleet and you always need to do work, ongoing work in your minds.

15:38 So with that, how is '24 looking? Well, we expect to produce more or less the same

15:47 ore. We expect to process around the same thing, point five to 15, maybe a little bit higher million tons through the plant. The copper grade, it's going to be slightly lower in the first part of the year, but higher in the second part when we access the higher grades of San Dimitio. And recovery rate, we also expect it to be around 85%. With all these parameters, you should expect a transitional year, a year that will have around also around 52,000 tonnes of copper, similar to the previous year. With cash cost, I would say, very, very similar to what we had this year. With that, of course, depends on the copper price, which so far seems to have started in good way.

16:41 Our EBITDA should be equal or higher than previous years. And the extra cash flow, where we will use it? Well, we'll use it to finalize the solar plant and helix, not because there are new investments. It's simply their investment coming from previous year that are rolled to this year. But the main thing is to move the road and relocate the electric line and so on

17:08 at San Dimitio, which is takes most of the investment. Part of this can probably be going into 2025, but most of it's going to be done in 'twenty four because we need to get the better grades sooner rather than later to benefit from the higher grades and to be able to get lower costs. So in addition to that, within our

17:39 normal investments, we continue spending around $5,000,000 to 7,000,000 into exploration, probably a bit higher this year. And of course, this can change if we have our discovery, we'll devote more money for that. So for those of you that are not familiar why we are pushing so hard in San Luis is because the resource grade is basically doubled than what we have. In the picture that you have in the center, you will see the pit of Cerro Corrado, which is the one that we are mining right now. There, you see two things. You see in the far right, you see we are advancing with a pushback. You see that there's a new area there that needs to be taken down in order to access areas of the North and the South sorry, in the East and the South.

18:30 But at the same time, you will see in the first part of the picture that the machines have already started pushing in Indonesia. And this picture actually is slightly old because it's it's already advancing very well.

18:48 Things that you can see in the in the picture in the picture that I'm showing now on slide 16 is several things. In the far end, you see a whole gray area. That's the solar plant that you can see is basically covered already with panels. And in the bottom left corner, you see the LX plant. In blue is the thickener of the tailings. LX is important because

19:13 normal differential flotation applied to polymetallic sulfides in the Parrott Belt will give you recoveries of 60%, 70% of copper, 70%, 75% of zinc. This is basically based on historic reporting and also in our own test work. By applying LX, the combination of flotation and LX itself goes up to 80% or 85% in copper zinc. This is a huge difference. And we are

19:44 seeing that's why we are so keen in getting this up and running and to prove the concept in order to apply it for the longer term. It's going well. We started the year, the plant, as you can see in the right side, it's not a small plant. It's complex plant with lots of pipes, lots of tanks, electrolytic cells and leaching system. It's a quite novel system, which I cannot give too much details. And in January 24, when they were leaching some copper concentrates, they got very clean solution enough to produce very clean copper cathodes, totally commercial. Grade A, 9.995 copper content without the use of Essex, which is absolutely incredible and intriguing.

20:34 Right now, are working with other with conditions to remove sync, and I can report verbally that the the results are coming very well. But, of course, this any start up and especially when it's a start up of something that's totally new, needs time, and they they still need some time to finalize this. And I I don't expect this to start running smoothly until midyear because it's logical. They need it works when it works, but then suddenly, a a bulge breaks or or a pipe is leaking and they have to repair it and the things go smoothly. In addition to that, they started with a small team. But right now, they are engaging people and they are training people locally normally. And they will be continuing to recruit people during this next few months.

21:26 The solar plant is had some delays in these pictures in February, now it's much more advanced than few days ago. You can see some small holes in the middle. There were some some delays when including the supports because of rejects in the pulling tests. And but the plant is very advanced and the main connection to the electric line, to the high voltage line has already been completed. We had to stop during a few days in this quarter. And the substation is in the far end, so we will not need to stop to make the connection to the electric to the solar plant.

22:13 A little bit of delay in this plant, which is disappointing. But in the other hand, as I said before, we had very low electricity prices during the first quarter and is going to be also low in the second quarter. So we took advantage of this good prices and have locked in prices for basically most of the second quarter. So any delay on the start off of this plant will not affect our costs. To the contrary, it will be very similar or lower than previous years. But we will hope to get this thing going in the during the second quarter. And total, there's not much to say. There's not much to say, but there is important thing to say is that we had elections. There were elections in in February in the regional elections, and we don't mention too much, obviously, in the press release because this is something that, in theory, does not affect us. But what I mean in theory, the reality is that, obviously, there was a certain uncertainty of the results of elections, which were won by the the conservative party with full majority, not because any specific party has more or less support, simply because, obviously, this continuity is is very good to to be able to to process our papers. We have applied

23:44 to we have applied for our project to be included in the strategic project, strategic interest, project of strategic interest, which is a new law that came into stream in in January 1. And we believe this is going to be included and approved and the and as soon as the new government is in place, which is expected to happen sometime late March or early April, we believe that our our

24:18 request will be accepted. This means that the permitting lines speed are shortened, and there's a much higher confidence that this thing will be will see the light sometime later this year. An important point is, as I said before, is that we will be starting to be trading in the main market sometime in April. And later, we'll also be trying to get into the indexes a little bit later. So overall, I can cite in 2024 where we have lots of targets. Alex, to confirm that the solar plant will reduce our costs and MINICI will as soon as we get try to get to the high rates as soon as possible.

25:12 The permitting process, hopefully, we get this as a strategic nomination, which means it will be a further improvement. Right now, the situation with the stakeholders is excellent with very good relation with everybody. And we will continue exploring and of course, into the main market, as I said before. So our future is very clear. We have said we don't want to be a single asset, so we want to have that total as soon as possible. We continue to look at all the things. And I think that in less than three years, our I see our company getting to the 120,000 tonnes of copper equivalent level, which means copper in the copper on the zinc coming from the other areas of polymetallic, which is basically doubling our copper production, the same thing that we did it what that we doubled in the first years of this company.

26:10 So I can cite in future. And since we are one of the few pure copper plays in the copper market, I think it would be a strong interest in these years that we are seeing an important change in the upper market perception. As you probably all know, this we have been going back to the $4 per pound levels with difficulties in production for mines, with the waking up after the lunar period, the New Year period in China.

26:55 The supply side is a little bit stressed, let's say, with Codelgo facing problems with Coral Panama shutdown, with Anglo American and Quebrada Blanca delays. So I think the time from the supply side is bright. And the demand continue we continue to see the steady demand, especially from renewals, new energy transition is going all over the world. India is picking up. So there's lots of good news expected to come from the copper price, we expect. And I would say that this is this concludes my my my presentation. Probably longer than expected, but fine. Perfect. Alberto, thank you very much indeed for your presentation.

27:43 Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Alberto, Cesar, as you can see, we have received a number of questions throughout today's presentation. And Alberto, if I may just hand back to you and kindly ask you to read out the questions, give responses where appropriate to do so, and I'll pick up from you at the end.

28:17 Okay. Thank you very much. I'm going to be reading the there's lots of presentation questions here. I know that '23 BA are reacting to include mining ore from Indonesia in '24. Where are you currently where you are currently with stripping? So does the current 2024 guidance, 51, 53 include ore processed from Indonesia? And if so, how much? In other words, is final permit of Indonesia with its high rate of risk of potential upside for 2000 guidance? Thanks. Well, there is mostly most of the excavation is going to be waste. But yes, we will be mining through some areas of better grades, which will be processed. So there is a small amount, not much. I would say roughly, I don't have the numbers in my head, I would say that from the 15,000,000 tonnes processed, I would say around 10% will be coming from San Dimitri at higher grade.

29:14 And the permitting, in theory, should not affect us because we have a permit with you to make this first interim pushback. I mean, if the final permitting of the full perimeter of the San Denisio was delayed beyond, I would say, first, second quarter of next year, we'll probably start impacting the access to this grade. Doesn't mean it will impact the production because we will be mining from Cerro Colorado, but obviously, the delay, it would mean a delay of better grades and improvement in copper production.

29:49 Could you provide an update on commissioning ramp up the LX, planned it which is due this half? In terms of economics from what you're currently seeing, does production have seen makes sense at current spot prices or you would prefer to look at producing copper? It's a very good question, actually, this last part, because we could produce copper and we're producing. But right now, our plants are very likely this is the way we will start and is we will be taking away the zinc from the copper concentrates, but removing the zinc, but keeping the copper. So we will stay producing copper normally, but we will remove the zinc as contained in this copper concentrates. We have some areas that are available to be mined almost immediately that have higher zinc, which are not in our reserves, but also contain higher copper within the federal government. And that's where we will start.

30:41 In the term of economics, it will not make a huge difference because this year is our year of ramp up. And we are only looking at the plant capacity of 10,000 to 50,000 tons of zinc. So and this is starting in June, ramping up slowly. So I don't think economic will make sense. I think we'll make I mean, make a huge difference. I think the upside will come from the application of in other parts of the belt and application of specifically in the lower parts of Southern Museum. How is it going to start? Well, right now, as I said before, they are already contracting some people. They already have one full shift working, not three shifts working from Monday to Friday, but they stop during the weekend. The idea is to train all these people until during the next couple of months. This is not a new new technology, absolutely new.

31:34 And, of course, I expect things to happen, some issues to happen, but the idea is to start ramping up until the during the second quarter and then start slowly going up, bringing more capacity. More capacity will come from better availability and stopping the small hiccups that they have with filters and pipes, things that are not related to the leaching itself. The next question is share buyback. Are we any closer to this being started? No, we have not decided to do anything with this. I mean, are some question marks about if we will reduce the liquidity. I think we'll wait and see what happens with the liquidity once we get into the index once we get into the index and once we get into the main listing.

32:26 I think this will probably change the liquidity and then maybe this will be possible. ATALAYA does not seem to be included in any ASG rankings for the mining sector. What is being done to improve this visibility? Well, we are providing now with all the data to sending it to the providers of these rankings. So hopefully, this come into place this year. Also, are publishing the '23 report. And I think we will be ranking very well because actually we are doing things, I would say, much higher level than others. Alberto, if I may ask, but just to be more specific. So we we have engaged with the the major sustainability rating companies such as Sustainalytics, MSCI, and and ISS.

33:21 And and we have done a lot of initiatives, and they are all aware about the initiatives that we take in, which is, you know, a very broad, you know, things that we have done since, you know, going through the in in in implementation of CBDs reporting or reporting the climate change, getting to some target in the midterms, and all this is being considered. So I'm expecting that that these sustainability rating agencies to start considering this very soon. Thank you, Faiza. Another question in this line is what other green measures, not including energy generation, is that the LAI implemented has implemented? For example, electric furnaces, biodiesel, hydrogen.

34:11 Well, look, so far, hydrogen is not yet economic or even feasible for trucks. The diesel could be used, but there's no availability in the area where we are. Electric furnaces, they are not applicable. But there are several things that we are doing. One is a much reduced level of water, are not specifically energy, but they also count for ESG. We are recycling 85% of the water. We only get water from new areas, from dams, specifically to avoid what we lose from evaporation. We use absolutely all the water that of the rains on top of the pit after cleaning it.

34:59 But the main big change will come with the success in application of LX. LX is a leaching system that basically treats the copper concentrates with electricity. And of electricity that can be solar, can be wind. Spain has a huge generation of wind and solar. And this will avoid, first of all, the transport of concentrates and second, use cathodes directly instead of burning them in furnaces. So this is a huge change. And I think we can probably change the way things are done in some areas. We'll never compete with a smelter because a smelter, besides being ESG friendly or not, they are very, very efficient if because they sell the sulfuric acid, which is needed, by the way, for agriculture, for fertilizers.

35:51 So they sell the slag. Are very efficient. But I think LX is one of the big contributions as well as water control. Can the dividend just indicated be paid as an interim dividend before the AGM and rhythm oscillation to avoid withholding tax issues? Cesar, can you respond to the there are some issues with this? Yes. I think it it might be a little bit difficult as the the year is now completed and behind us. I mean, the board of directors proposed to pay a final dividend for the year, and there might be some legal issues around paying an interim dividend on a year that is completed. I think the process is continues to be that the final dividend must be approved by the shareholders, and and we're expecting that will happen once the company is already paying. So I'm I'm I'm happy to have a look at this, but I've but I've but I think we will have limited options here.

36:54 The start up of solar next question is start up of solar plant is late in q two. As is near term, can you be more precise, please? I think May is when we expect to have the connection of the grid of most of the plant, which is a good timing also for solar plant. I mean, that's the last estimate. So the delays were coming from some supply issues, delays with the provider of some materials for the substation of Endesa, of the main company, ours. And also, as I said before, with with the supports of the panels that in some places, they did not pass the quality test of what they call the pool test. Basically, it's a way to check that the panels are not going to be flying out if there's a huge wind coming.

37:45 And this is means that you have to reinforce them by putting some cement and so on. So this took time, but it's already finished. So the our latest estimate is made and should be up and running. Another one is, is ATALAYA Member of International Copper Association? No, we are not. They produce a comprehensive report in 2023 called the Pathway to Net Zero. There seems to be no mention at ATALAYA in this report. Don't you think ESG profile would be higher considering what we have implemented so far? The first question, yes, we will see if how we can become a member. Really, we have not thought on that. And the second thing, I think the profile is going to be increased, as Teshar said, when they receive it, when we have already been engaging with these rating agencies, because the way we are doing things, I think it should be much higher.

38:43 Next question is, will you provide color on the project strategic projects CapEx? There are still no details on the sustaining CapEx. Will you provide more detail on the sustaining CapEx for 2024? How much stripping in Italy are planning to capitalize in 2024 for some of recent Tetracolorado? Well, I think, yes, I think we have provided the guidance. I think the typical way of how to capitalize is basically the excess of stripping that you do in a year on over and on top of over and on top of the what's the average of the reserves is what you capitalize simply for accounting rules. It does not affect the overall all in sustaining cost that we always we always report.

39:29 In the during 2024, as I said before, most of the work in Southern Italy is capitalized, I would say all, because basically, it's removing stripping access, moving the road, moving the electric lines. And the strategic projects, we have just said what we have is basically send an issue of preparation and finalize what has been going during this year. I'll back to you if I'd be a little bit more specific on the sustaining CapEx for 2024. So we historically, we've been spending around $8,000,000 6,000,000 to $8,000,000 closer to $8,000,000 this year as we're investing on the pre stripping of San Diego. The plan is to spend around EUR 6,000,000 on sustaining CapEx.

40:21 Next question is, thanks to you, officer. It seems that LX showing promising results. When does ATALAYA expect to provide more details about LX performance forecast? I would say as soon as we have them midyear. I think we will probably announce the production of of zinc material as soon as they start commissioning. And I would say midyear, yes, when we see that the things can go more or less steady, I think we will give some guidance of what we but so far, the results from the recovery point of view, which is difficult part or difficult, are okay. What shows some looking to show some hiccups is in basically typical things of commissioning like water, valves, filters, clogging until they fine tune, which is quite normal with commissioning of plants.

41:15 The next question is, ATALAYA's energy generation, can you give more details of any plans, if any, to expand this energy production? Well, we had a study and we had a measuring tower to produce wind, 18 megawatts. But we had we received the results and it was barely economic, so for self generation. So when you see that there's a huge wind generation happening in Spain and solar, where the future prices being around 40 per megawatt hour is very difficult to be competing with this. Although the energy generation will not be ours, but it will be generated by wind and solar because Spain is growing big time.

42:03 And the next question actually mixed with this is going forward, what will be the big with wind and solar in five, ten years? Look, then we Spain, I mean, we get the besides the 22% that we will get from our solar, that's ours. The rest of, let's say, 80% to simplify, the rest will come from the grid. The Spanish grid, normally, it's around 80% to 85% is non related to CO2, around 20% is nuclear and the rest is hydraulic, wind and solar, with the wind growing big time and solar also. But solar, as you know, is intermittent. So I think that will be the profile in the future, will be probably growing to 90% in general.

42:52 That will be wind and solar and hydraulic. And that's 90% of the 80% that we don't consume. So I would say, probably our copper and our production will be one of the better from this CO2 point of view because it will be basically 90% of the AT plus over 95% or 92% related to wind, solar and hydro. Continuing with energy generation, will these assets be incorporated into separate company owned by ATALAYA? Adventist is operating debt from the separate unit. It reaches a critical if it reaches a critical site, could it be IPO'd, could it be considered? I think our size is very small, and I don't think that would be we may think in disposing of this our solar plant into a electric company to to to strengthen the balance sheet and and take it away. It's something that we we can do, sign up a a term PPA with the supplier and something we will investigate.

44:09 But IPO in this is a very small amount. It's not worth that. Another question is how are evolving rates in Federal Colorado and reason to worry? When you should expect to reach 60,000 tons, thanks to San Dimitri. I think starting with the last one, sixty three thousand tons, we'll see them in '25. And reason to worry, well, we have had a couple of quarters with with low ish grades, lower than normal, similar to the mine grades. But if you look at the PA that was prepared in 'twenty one, those numbers of lower copper grades were predicted. So we expect it to happen in 2024, simply because we the best grades of the Federal Corrado are in the East and Far East and in the West, basically under the road.

45:12 And there is slated to be production in the last five years of of the life of, which means we are going through lower grades. But this is planned. I mean, there's nothing that is it's in the PA that's published in our in our web page. In relation, somebody asks me about artificial intelligence if we have considered practical application of this new technology for ATALAYA. Not as such, but we have lots of things that are doing this in a practical way, like optimizing the consumption of the mills, small things that have been we are in the leading part of that, but not AI itself.

46:06 I think this is something that has been done for a few years already. If an acquisition is made abroad in a more geographically challenging environment, automation and running the minor off-site maybe a strategy. Is this something that ATALAYA has looked into? Have you looked at into truck optimization, including Spain? Yes, we have looked at truck optimization. It's not so economic in Spain due to the low wages. I mean, our drivers are probably cost around 5 to seven times less than in Australia, so the advantage of that is not that clear. Running from from from the distance, well, actually can be done because it's not a problem at all. Right now, I or anyone could look in their telephone or computer how the plant is going. We can start it. We can stop it. We can do everything.

47:06 Everything is done automatically from the control room, but with access to any of the computers that are authorized. So this, of course, it could be done. If you had to go in a challenging environment, the main question here is always maintenance. Maintenance and getting good people is the difficult part. Anything new at TORO that you can say respect of timelines for permitting? We expect to receive the approval of a project being considered strategic of interest strategic interest sometime in in, I would say, April, maximum May. That speeds up the permitting and also almost as an endorsement of of the government, of the regional government.

47:54 Why is that? It's because before declaring it is strategic, they have to go through a whole evaluation of of of the project from the environmental point of view, economical point of view, social, which means it's very unlikely that the the departments of the of the government, regional government that are reporting and making the reports for the president and the council saying that this is strategic will change their views just two months later. So I think that will be a huge endorsement and we expect to see this change in, I would say, maybe May. You never know because there's no timeline, but we believe it's going to be soon, sooner rather than later. Considering that Delix has theoretically was theoretically until ATYM build the testing was theoretical until ATALAYA built the testing plant and then move into production. How do you intend to protect your IP?

48:53 Is there a way to build a JV company with Helix to monetize the technology further? Well, the IP is we have the exclusivity in the in the product belt, and we have the rights for refusal if the technology is sold somewhere else. But the technology is not ours. We are financing line technology that has it. It's a single person company, which we are financing mostly with loans convertible into equity in this company. So we have a participation in the market if this technology is monetized. But, unfortunately, it's it's not ours. Although we have lots of rights attached to to the success of this.

49:40 Since we are no longer incorporated into Cypress, and we have no takeover protection built into articles, what is a fair takeover value? How would you hope to protect against a hostile takeover? Well, fair takeover value, it depends on what the shareholders decide or approve. I think everybody understands that we are quite far from our fair takeover value. And the best way to be protected is to have strong shareholders. And we have Trafigura, we have Covas, we have MULSA, we have some that with five calls, you will get over 50%. So it would have to be something that at least these five entities would would consider it positive. So it's a hostile takeover will be very difficult to to to happen into our company. And if it happens, of course, we have a defensive strategy and we have some banks already in place for for this for our defense.

50:45 What is our current relationship with Sunfire and Matza? Is there a dialogue? Well, we have a dialogue from from the technical point of view, and and always try to see if we can optimize things, but nothing else that I I may think. Eventually, I think we'll have to agree in areas that are common, where we have tailings, where there are deposits that are very close to each other, where maybe we can optimize. Our debt is very low, which makes us more attractive for any potential bidder. Do you plan to address this acquisition? Well, we are looking at things as usual, but it's better to have a very low debt or very strength good balance sheet because it will give us more protection if there's any difficult times. Another question is, it was mentioned that total permitting was proven swiftly.

51:34 What's the next key milestone for total? When do you expect to have the outcome of the permitting process? As I said before, the the next milestone is is the consideration of the project to be a strategic project. And later, the the next the permitting will probably be the last part of the year when they have gone through all the environmental evaluations. On CapEx, you have guided EUR 24,000,000, but you would possibly provide a bit more color for EUR 25,000,000. As a reference, consensus is EUR 135,000,000. How do you feel about this number? And will you please talk that your expectations are? I think we will I think the reason why is 135,000,000 is everybody is expecting total. And I think it's reasonable. I think total will be around CHF $250,000,000, so higher than before.

52:23 And I think the expectation as consensus is that we will have about half of that CapEx to be incurred in 'twenty five because it's when we expect to start pushing total. Total very likely, if we get the permits at the end of the year, the last quarter, we will be constructing it in one year and three months. We have everything ready to move very fast, so most of the expenditure will happen in '25. Shareholder structure given Trafigura, an exit from Marcia. From ATALAYA, you have any view on their long term position with ATALAYA? Is there any dialogue with Trafigura? Well, Trafigura, we don't have any dialogue especially. We have one person of Trafigura on the board, but we don't have anything special. We know well, we know, no. We never know, but we suspect looking at the history that, obviously, there will be exit at a certain time to to monetize their investment. They have been here already, I would say, seven years or eight years or nine years.

53:22 So if you look at what happened in other cases, they have exited. But when they will do it? Well, I'm sure they will do it in the time where they believe they have a good return. But then we don't have any special dialogue with them about this. Next question is solar plant. Will you remind us what the difference it makes in terms of cash cost per pound? Look, it's around 22% of the electricity that will become, let's call it, for free. It will be in our balance sheet. So 22% of electricity, if the total cost was around, let's say, 30,000,000, EUR 22,000,000 will be EUR 6,000,000 saving. 6,000,000 saving is around EUR $650.06 per pound, if you consider rough numbers if you divide by EUR 100,000,000 payable.

54:10 Alex, will you remind us the commissioning time lines? When might you consider permitting more capital to this project? Well, I have mentioned, I mean, commissioning in this next quarter and then more capital to this project probably at the end of the year or next year, if we consider that it can be applied for as our benefit from other areas. We always use that contractor for mining. Why is everything outsourced? Any plan to bring back in house? It's possible to bring it back in house, but we have made all kinds of numbers. And a contractor has a very low margin and has something that we don't have, which is the access to sell the machines later at a very good price. And that's the reason why in Spain, most of it is outsourced. Simply, they are more economic than anything else.

55:01 Treatment refining charges, POTCs have fallen dramatically year on year. Are you able to quantify tailwind that generates ATALAYA that we should expect in 2024? Well, normally, we are through benchmarks. So the benchmark of this first part is already matched and is going down, of course. But yes, in the future, it can be very interesting. Normally, TCCRCs, I would say represent around $0.20 per pound, $24 So if if this are, let's say, in half, you you can consider it would be $0.10 per pound if it continues to be like like that. I I don't think it will continue so much, to be to be honest, simply because I suppose it must be some discipline in stopping some some smelters. Otherwise otherwise, everybody will lose money because at this at this spot prices, the smelter does not make any money and and they better stop.

55:53 Does the 25 another question. The waste is million tons waste is sweeping guidance for 24 inclusion in issue. No. That's the that's the waste on Taro Corrado, which is roughly two to one slightly less than two to one cost per ton. How would you should be thinking about margin uplift given Helix from 2025 onwards? Very early to say. I cannot say how its margin going to improve. I think the main key point of Helix to use it on polymetallic, which will increase recoveries. And of course, by increasing the recoveries, you lower your costs and get more tons. Could you could the forthcoming announcement dividend be paid before the remuneration? I think this has been answered because it's a bit complicated. At the moment, ATALAYA is one horse ride.

56:40 It's a one horse ride. Is there any possibility to expand into another corporate country, like Spain, for example, Congo or another country? Well, we are looking at other places, certainly not Congo, but yes, we are looking at all things. Congo, it's a it's a I've I've seven years experience in Congo. It's not an easy place for foreign companies, and that's why you only see there Glencore and Chinese companies with some Indian small companies. There's a reason for that. What could be expected only cost when the company gets to those 120,000 tons in three, four years, closer to and a half? And what are the key movers of them now? Well, yes, absolutely. Drivers will be around closer to 2.5. But volume wise, I mean, these are a set of different operations, group of different operations, not a single operation of 220,000.

57:37 So the effect in all in cost is not that high. It's adding several companies, not a larger operating company. So the only thing that goes down is the G and As, which are divided down and also the fact that the costs in total are going to be lower. And the costs at some initial with the higher rates are going to be, if I remember well, average around $2 per pound, so substantially lower than now. Next question is, could you consider alternative business in non copper that take advantage of assets, land, clean energy, building, warehouse and structures to the power operational, both data centers. Not at this stage because you need people, you need the experience.

58:23 And I think we have enough troubles with in our hands and we have lots of projects going on that we don't even report until they are already materialized. So we'll concentrate in what we know best. Well, we have gone through one hour. There's no more questions. There have been lots of questions. I'll try to run as much as possible. I only want to we are out out of time. I want to thank you for for attending and and being so active as usual. And if you have any questions, please let us know with our web page or any of our executives. Thanks very much. That's great, Alberto Cesar. Thank you very much indeed for updating investors today.

59:09 Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback and order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of management team of ATALAYA MINING PLC, we would like to thank you for attending today's presentation, and good afternoon to you all. Thank you. Thank you.