TIDMATYM
RNS Number : 3058V
Atalaya Mining PLC
01 December 2023
1 December 2023
Atalaya Mining Plc.
("Atalaya" or "the Company")
Historical Related Party Transactions
Atalaya Mining Plc (AIM: ATYM) has identified certain historical
dealings with related parties where additional public disclosure is
required. All of these dealings relate to amendments, entered into
on preferable terms to the Company, to certain historical
contracts.
Background
In May 2015, the Company agreed terms with key stakeholders in a
capitalisation exercise to finance the re-start of Proyecto
Riotinto (the "2015 Capitalisation").
As part of the 2015 Capitalisation, the Company entered into
offtake agreements with some of its large shareholders, one of
which was Trafigura Pte Ltd ("Trafigura"), under which the total
forecast concentrate production from Proyecto Riotinto was
committed ("2015 Offtake Agreements"). Trafigura was a substantial
shareholder in Atalaya and, therefore, a Related Party to the
Company. As a result, the offtake agreement with Trafigura was
deemed to be an AIM Rule 13 Related Party Transaction and
appropriately disclosed in the Shareholder Circular published at
the time.
In addition, in September 2015, the Company separately entered
into a services agreement with Impala Terminals Huelva S.L.U.
("Impala Terminals") for the handling, storage and shipment of
copper concentrates produced from Proyecto Riotinto ("2015 Port
Handling Agreement"). At the time, Impala Terminals was majority
owned by Trafigura. The agreement covered total export concentrate
volumes produced from Proyecto Riotinto for three years for volumes
not committed to Trafigura under its offtake agreement and for the
life of mine for the volumes committed to Trafigura under its
offtake agreement.
Spot Sales Agreements
Due to various expansions implemented at Proyecto Riotinto in
recent years, as well as the production of pre-commercial
concentrate in 2015 and 2016, volumes of concentrate have been
periodically available for sale outside of the Company's various
offtake agreements. As a result, from 2015 to November 2023, the
Company completed 19 concentrate sales transactions on a spot basis
("Historical Spot Sales") outside of its offtake agreements, 10 of
which were completed with Trafigura through amendments to its
existing offtake agreement. Historical Spot Sales were the result
of competitive tenders involving multiple potential buyers and were
completed on an arm's length basis.
The Historical Spot Sales to Trafigura are shown below in Table
1 and represent an aggregate invoice value of approximately
EUR159.9 million, or approximately 7.6% of the Company's total
aggregate invoices over the eight year period. These transactions
with Trafigura, although not individually identifiable, formed part
of the related party transactions disclosure notes of the Company's
financial statements since 2015.
Table 1: Historical Spot Sales to Trafigura
Transaction Date Invoice Value (EURm)
----------------------------------- ---------------------
2015 November (pre-commercial)(1) 5. 3
2015 December (pre-commercial)(1) 9.1
2016 March (pre-commercial)(1) 4. 8
2020 December / 2021 January 19.9
2021 June 10.8
2021 June / July 15.7
2021 September 19.5
2021 December / 2022 May 29.9
2023 August 30.1
2023 October 14.8
Total 159.9
----------------------------------- ---------------------
(1) Shipments of concentrate produced before commerical
production was declared, therefore the sales were not included in
historical revenues, consistent with accounting standards.
As a result of an internal review, the Company has identified
that the Historical Spot Sales transactions with Trafigura, as they
technically sat outside the original 2015 Offtake Agreement, should
have been evaluated as AIM Rule 13 Related Party Transactions
individually but they were not evaluated as such at the time of
being entered into.
The Company's independent directors (excluding Trafigura's
nominee) consider, having consulted with its nominated adviser,
that the terms of the Historical Spot Sales with Trafigura were
fair and reasonable insofar as its shareholders are concerned.
Port Handling Agreement Amendment
In September 2018, the Company entered into an amendment to the
2015 Port Handling Agreement, which included improved financial
terms and a five year extension ("2018 Port Handling Extension
Agreement").
In aggregate, the total fees paid to Impala Terminals, both
directly and indirectly via deductions included in sales invoices,
amounted to approximately EUR13 million during the period from
October 2018 to October 2023 . This represents approximately 1.3%
of the Company's operating costs over the same period.
The Company notes that the fees payable to Impala Terminals were
not included in the related party transactions disclosure notes of
the Company's financial statements since the 2015 Port Handling
Agreement was entered into. Future transactions with Impala
Terminals, if it remains a related party, will be disclosed in the
notes of all future financial statements. No amendments are
required to be made to the Company's historical financial
statements, as the fees payable to Impala Terminals were accurately
accounted for.
As a result of an internal review, the Company has identified
that the 2018 Port Handling Extension Agreement should have been
evaluated as an AIM Rule 13 Related Party Transaction but it was
not evaluated as such at the time.
The Company's independent directors (excluding Trafigura's
nominee) consider, having consulted with its nominated adviser,
that the terms of the 2018 Port Handling Extension Agreement were
fair and reasonable insofar as its shareholders are concerned.
Further Review of Procedures
The Company regularly evaluates its internal controls and
procedures to ensure compliance with all applicable rules and
regulations. As a result, revisions to its reporting procedures are
in the process of being implemented, in consultation with the
Company's Board of Directors and its external advisors.
Contacts:
Elisabeth Cowell / Tom
SEC Newgate UK Carnegie / Matthew Elliott + 44 20 3757 6882
4C Communications Carina Corbett +44 20 3170 7973
------------------------------- ------------------
Canaccord Genuity
(NOMAD and Joint Henry Fitzgerald-O'Connor
Broker) / James Asensio +44 20 7523 8000
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BMO Capital Markets
(Joint Broker) Tom Rider / Andrew Cameron +44 20 7236 1010
------------------------------- ------------------
Peel Hunt LLP
(Joint Broker) Ross Allister / David McKeown +44 20 7418 8900
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About Atalaya Mining Plc
Atalaya is an AIM-listed mining and development group which
produces copper concentrates and silver by-product at its wholly
owned Proyecto Riotinto site in southwest Spain. Atalaya's current
operations include the Cerro Colorado open pit mine and a modern 15
Mtpa processing plant, which has the potential to become a central
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% ownership of Proyecto Touro, a brownfield
copper project in the northwest of Spain, as well as a 99.9%
interest in Proyecto Ossa Morena. For further information, visit
www.atalayamining.com
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